First Merchants Corporation (NASDAQ: FRME) has reported full year 2013 record net income available to common shareholders of $42.2 million compared to $40.6 million earned in 2012. Full-year 2013 earnings per share totaled $1.41 equaling 2012. Included in the full year results are $5.4 million, or $.12 per share, of acquisition expenses related to the CFS Bancorp (CFS) merger. By contrast, 2012 results include a one-time gain from the FDIC purchase of SCB Bank totaling $9.1 million, or $.21 per share. Fourth quarter 2013 earnings per share totaled $.34 compared to $.32 in 2012. Net income available to common stockholders totaled $11.2 million, a $2 million increase over the $9.2 million reported in the fourth quarter of 2012.

Michael C. Rechin, President and Chief Executive Officer, stated, "Our teams are energized by the closing of the CFS merger on November 12th 2013, and we are looking forward to capturing the full earnings impact in our 2014 results." Rechin also added, "2013 was a highly successful year for us by many measures, including record net income of $42.2 million, healthy organic loan growth and the addition of CFS with its $1.1 billion balance sheet. In addition, we optimized our capital structure and increased First Merchants market capitalization by more than 90 percent to over $800 million. Our employees take pride in our continued progress and our merger that caps 2013 and propels us into 2014."

Total assets equaled $5.4 billion, as loans and investments totaled $3.6 billion and $1.1 billion, respectively. Total loans increased by $730 million during the year, including $133 million of organic growth and $597 million related to the acquisition of CFS. Investments increased by $222 million during the year primarily due to the acquisition of CFS as deposits exceed loan balances by $359 million.

Net-interest income totaled $154.3 million in 2013, an increase of $2 million. Net-interest margin remained strong totaling 3.99 percent, down from 4.12 percent in 2012, as yields on earning assets declined by 34 basis points and the cost of supporting liabilities declined by 21 basis points. Net-interest income totaled $41.1 million for the fourth quarter of 2013 compared to $38.3 million during the same period of 2012.

Non-interest income totaled $54.8 million in 2013 and $64.3 million in 2012, which included the one-time gain from the FDIC purchase of SCB Bank totaling $9.1 million. Fourth quarter non-interest income increased by $867,000 over the prior year, and totaled $15.1 million. Non-interest expense totaled $137.1 million in 2012 and $143.2 million in 2013, which included acquisition expenses of $5.4 million. During the quarter, non-interest expense totaled $40.6 million and included $4.5 million of the $5.4 million in acquisition expenses.

Provision expense totaled $6.6 million for the year, down from $18.5 million in 2012. Net charge-offs totaled $8.1 million during the year, also down from $20.1 million in 2012. CFS loan marks totaled nearly $40 million or 6.2 percent of purchased loans as of year-end. NPA's increased by $31.4 million, which includes CFS; however, our pre-merger NPA's declined by 42 percent resulting in a lower total allowance for loan losses totaling $67.9 million, or 2.24 percent of loans excluding CFS.

As of December 31, 2013, the Corporation's total risk-based capital equaled 14.54 percent, Tier 1 common risk-based capital equaled 10.37 percent, and tangible common equity ratio totaled 8.34 percent. During the quarter, the Corporation refinanced $50 million of sub-debt and redeemed $34 million of Small Business Lending Fund shares through a new $65 million, 15-year term no call 10, sub-debt instrument with a fixed coupon rate of 6.75 percent.

Mark K. Hardwick, Executive Vice President and Chief Financial Officer, stated, "The optimization of our capital structure and the repayment of the SBLF is rewarding and completes a journey that started in 2009 during the financial crisis." Hardwick also added, "The increase in our tangible book value per share from $11.56 as of September 30, 2013 to $12.17 as of year-end is better than our earlier forecasts and market expectations. Net Income and other comprehensive income accounted for $.74 of the improvement which was offset by $.08 dilution from the acquisition and our fourth quarter dividend payment of $.05 per share. The dilution resulting from our acquisition of $.08 has an estimated one-year earn back, meaningfully shorter than our May 2013 announcement projecting three years."

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, January 28, 2014.

To participate, dial (Toll Free) 888-317-6016 and reference First Merchants Corporation's fourth quarter earnings release. International callers please call +1 412-317-6016. A replay of the call will be available until January 28, 2015. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 10037877.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme140128.html during the time of the call.

During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, Commerce National Bank, and First Merchants Trust Company as divisions of First Merchants Bank, N.A. First Merchants Corporation also operates First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.

First Merchants Corporation's common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company's Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

CONSOLIDATED BALANCE SHEETS    
(Dollars In Thousands) December 31,
2013 2012
ASSETS
Cash and cash equivalents $ 109,434 $ 101,460
Interest-bearing time deposits 55,069 38,443
Investment securities 1,095,579 874,363
Mortgage loans held for sale 5,331 22,300
Loans 3,632,409 2,902,209
Less: Allowance for loan losses (67,870 ) (69,366 )
Net loans 3,564,539 2,832,843
Premises and equipment 74,454 52,749
Federal Reserve and Federal Home Loan Bank stock 38,990 32,785
Interest receivable 18,672 16,367
Core deposit intangibles and goodwill 202,767 149,529
Cash surrender value of life insurance 164,571 125,397
Other real estate owned 22,246 13,263
Tax asset, deferred and receivable 56,614 30,867
Other assets 28,996   14,455  
TOTAL ASSETS $ 5,437,262   $ 4,304,821  
LIABILITIES
Deposits:
Noninterest-bearing $ 930,772 $ 801,597
Interest-bearing 3,300,696   2,544,786  
Total Deposits 4,231,468 3,346,383
Borrowings:
Federal funds purchased 125,645 18,862
Securities sold under repurchase agreements 148,672 141,828
Federal Home Loan Bank advances 122,140 94,238
Subordinated debentures and term loans 126,807   112,161  
Total Borrowings 523,264 367,089
Interest payable 1,771 1,841
Other liabilities 45,836   37,272  
Total Liabilities 4,802,339 3,752,585
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding - 0 and 90,782.94 shares 90,783
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares 125 125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding - 35,921,761 and 28,692,616 shares 4,490 3,587
Additional paid-in capital 380,390 256,843
Retained earnings 256,328 206,397
Accumulated other comprehensive loss (6,410 ) (5,499 )
Total Stockholders' Equity 634,923   552,236  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,437,262   $ 4,304,821  
 
CONSOLIDATED STATEMENTS OF INCOME   Three Months Ended   Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts) December 31, December 31,
2013   2012 2013   2012
INTEREST INCOME
Loans receivable:
Taxable $ 38,027 $ 36,085 $ 142,752 $ 146,745
Tax-exempt 78 122 393 480
Investment securities:
Taxable 4,143 3,809 15,214 17,027
Tax-exempt 3,020 2,544 10,829 10,189
Deposits with financial institutions 59 31 158 100
Federal Reserve and Federal Home Loan Bank stock 380   373   1,488   1,408  
Total Interest Income 45,707   42,964   170,834   175,949  
INTEREST EXPENSE
Deposits 2,350 3,234 10,053 14,800
Federal funds purchased 18 7 102 69
Securities sold under repurchase agreements 193 204 787 907
Federal Home Loan Bank advances 669 501 2,096 2,624
Subordinated debentures and term loans 1,342   753   3,531   5,213  
Total Interest Expense 4,572   4,699   16,569   23,613  
NET INTEREST INCOME 41,135 38,265 154,265 152,336
Provision for loan losses 1,016   4,505   6,648   18,534  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 40,119   33,760   147,617   133,802  
OTHER INCOME
Service charges on deposit accounts 3,639 2,962 12,400 11,587
Fiduciary activities 2,237 1,984 8,594 7,891
Other customer fees 3,371 2,757 11,866 11,233
Commission income 1,585 1,454 7,141 6,224
Earnings on cash surrender value of life insurance 692 693 2,613 3,418
Net gains and fees on sales of loans 1,003 3,513 7,511 10,628
Net realized gains on sales of available for sale securities 255 487 2,389
Gain on FDIC modified whole bank transaction 9,124
Other income 2,546   588   4,197   1,808  
Total Other Income 15,073   14,206   54,809   64,302  
OTHER EXPENSES
Salaries and employee benefits 23,470 20,320 85,413 79,398
Net occupancy 2,992 2,494 10,291 10,186
Equipment 2,369 1,942 7,737 7,201
Marketing 675 616 2,236 2,158
Outside data processing fees 1,205 1,361 5,591 5,656
Printing and office supplies 378 321 1,340 1,169
Core deposit amortization 496 489 1,649 1,927
FDIC assessments 767 738 2,862 3,509
Other real estate owned and credit-related expenses 1,668 1,766 6,661 8,178
Other expenses 6,538   4,456   19,439   17,733  
Total Other Expenses 40,558   34,503   143,219   137,115  
INCOME BEFORE INCOME TAX 14,634 13,463 59,207 60,989
Income tax expense 3,187   3,153   14,677   15,867  
NET INCOME 11,447 10,310 44,530 45,122
Preferred stock dividends (241 ) (1,135 ) (2,380 ) (4,539 )
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 11,206   $ 9,175   $ 42,150   $ 40,583  
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.34 $ 0.32 $ 1.42 $ 1.42
Diluted Net Income Available to Common Stockholders $ 0.34 $ 0.32 $ 1.41 $ 1.41
Cash Dividends Paid $ 0.05 $ 0.03 $ 0.18 $ 0.10
Average Diluted Shares Outstanding (in thousands) 32,913 28,930 30,008 28,847
 
FINANCIAL HIGHLIGHTS        
(Dollars in thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
NET CHARGE OFF'S $ (630 ) $ 4,632 $ 8,144 $ 20,066
 
AVERAGE BALANCES:
Total Assets $ 4,950,274 $ 4,293,082 $ 4,455,411 $ 4,245,996
Total Loans 3,292,993 2,867,793 3,008,555 2,819,816
Total Earning Assets 4,409,496 3,875,969 4,017,247 3,833,174
Total Deposits 3,860,452 3,321,997 3,465,640 3,263,020
Total Stockholders' Equity 576,157 551,414 540,255 535,497
 
FINANCIAL RATIOS:
Return on Average Assets 0.91 % 0.85 % 0.95 % 0.96 %
Return on Average Stockholders' Equity 7.78 6.66 7.80 7.58
Return on Average Common Stockholders' Equity 8.05 7.97 8.55 9.13
Average Earning Assets to Average Assets 89.08 90.28 90.17 90.28
Allowance for Loan Losses as % of Total Loans 1.87 2.37 1.87 2.37
Net Charge Off's as % of Average Loans (Annualized) (0.08 ) 0.65 0.27 0.71
Average Stockholders' Equity to Average Assets 11.64 12.84 12.13 12.61
Tax Equivalent Yield on Earning Assets 4.30 4.58 4.40 4.74
Cost of Supporting Liabilities 0.41 0.48 0.41 0.62
Net Interest Margin (FTE) on Earning Assets 3.89 4.10 3.99 4.12
Tangible Book Value Per Share $ 12.17 $ 10.95 $ 12.17 $ 10.95
 
NON-PERFORMING ASSETS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
Non-Accrual Loans $ 56,402 $ 34,992 $ 38,971 $ 46,761 $ 53,399
Renegotiated Loans 3,048   3,269   4,407   5,445   12,681  
Non-Performing Loans (NPL) 59,450 38,261 43,378 52,206 66,080
Other Real Estate Owned 22,246   12,052   11,765   13,130   13,263  
Non-Performing Assets (NPA) 81,696 50,313 55,143 65,336 79,343
90+ Days Delinquent 1,350   837   1,072   959   2,037  
NPAS & 90 Day Delinquent $ 83,046   $ 51,150   $ 56,215   $ 66,295   $ 81,380  
 
Loan Loss Reserve $ 67,870 $ 66,224 $ 68,202 $ 68,537 $ 69,366
Quarterly Net Charge-offs (630 ) 3,511 2,332 2,931 4,632
NPAs / Actual Assets % 1.50 % 1.16 % 1.27 % 1.54 % 1.84 %
NPAs & 90 Day / Actual Assets % 1.53 % 1.18 % 1.30 % 1.56 % 1.89 %
NPAs / Actual Loans and OREO % 2.23 % 1.71 % 1.87 % 2.24 % 2.70 %
Loan Loss Reserves / Actual Loans (%) 1.87 % 2.26 % 2.32 % 2.36 % 2.37 %
Net Charge Off's as % of Average Loans (Annualized) (0.08 )% 0.48 % 0.32 % 0.40 % 0.65 %
 
CONSOLIDATED BALANCE SHEETS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
ASSETS
Cash and cash equivalents $ 109,434 $ 92,341 $ 69,404 $ 51,592 $ 101,460
Interest-bearing time deposits 55,069 18,875 59,898 60,407 38,443
Investment securities 1,095,579 914,135 908,992 869,563 874,363
Mortgage loans held for sale 5,331 5,312 14,531 26,555 22,300
Loans 3,632,409 2,925,457 2,920,080 2,879,542 2,902,209
Less: Allowance for loan losses (67,870 ) (66,224 ) (68,202 ) (68,537 ) (69,366 )
Net loans 3,564,539 2,859,233 2,851,878 2,811,005 2,832,843
Premises and equipment 74,454 54,386 54,165 53,762 52,749
Federal Reserve and Federal Home Loan Bank stock 38,990 32,790 32,790 32,777 32,785
Interest receivable 18,672 16,171 15,186 15,346 16,367
Core deposit intangibles and goodwill 202,767 148,376 148,759 149,142 149,529
Cash surrender value of life insurance 164,571 127,322 126,710 126,098 125,397
Other real estate owned 22,246 12,052 11,765 13,130 13,263
Tax asset, deferred and receivable 56,614 31,385 30,959 27,597 30,867
Other assets 28,996   13,533   13,227   15,856   14,455  
TOTAL ASSETS $ 5,437,262   $ 4,325,911   $ 4,338,264   $ 4,252,830   $ 4,304,821  
LIABILITIES
Deposits:
Noninterest-bearing 930,772 790,174 $ 741,095 $ 763,965 $ 801,597
Interest-bearing 3,300,696   2,465,672   2,591,698   2,546,843   2,544,786  
Total Deposits 4,231,468 3,255,846 3,332,793 3,310,808 3,346,383
Borrowings:
Federal funds purchased 125,645 115,938 57,085 18,862
Securities sold under repurchase agreements 148,672 123,935 161,779 161,813 141,828
Federal Home Loan Bank advances 122,140 172,292 92,743 93,169 94,238
Subordinated debentures and term loans 126,807   111,849   111,778   111,778   112,161  
Total Borrowings 523,264 524,014 423,385 366,760 367,089
Interest payable 1,771 1,155 1,150 1,348 1,841
Other liabilities 45,836   31,427   41,643   35,356   37,272  
Total Liabilities 4,802,339 3,812,442 3,798,971 3,714,272 3,752,585
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding 34,043 68,087 68,087 90,783
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding 125 125 125 125 125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding 4,490 3,603 3,600 3,598 3,587
Additional paid-in capital 380,390 258,350 257,626 256,966 256,843
Retained earnings 256,328 233,546 225,034 216,530 206,397
Accumulated other comprehensive loss (6,410 ) (16,198 ) (15,179 ) (6,748 ) (5,499 )
Total Stockholders' Equity 634,923   513,469   539,293   538,558   552,236  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,437,262   $ 4,325,911   $ 4,338,264   $ 4,252,830   $ 4,304,821  
 
CONSOLIDATED STATEMENTS OF INCOME          
(Dollars In Thousands, Except Per Share Amounts) December 31, September 30, June 30, March 31, December 31,
2013 2013   2013 2013 2012
INTEREST INCOME
Loans receivable:
Taxable $ 38,027 $ 33,548 $ 34,018 $ 37,159 $ 36,085
Tax-exempt 78 85 113 117 122
Investment securities:
Taxable 4,143 3,876 3,577 3,618 3,809
Tax-exempt 3,020 2,840 2,515 2,454 2,544
Deposits with financial institutions 59 18 62 19 31
Federal Reserve and Federal Home Loan Bank stock 380   369   368   371   373  
Total Interest Income 45,707   40,736   40,653   43,738   42,964  
INTEREST EXPENSE
Deposits 2,350 2,213 2,599 2,891 3,234
Federal funds purchased 18 72 1 11 7
Securities sold under repurchase agreements 193 192 208 194 204
Federal Home Loan Bank advances 669 506 462 459 501
Subordinated debentures and term loans 1,342   731   733   725   753  
Total Interest Expense 4,572   3,714   4,003   4,280   4,699  
NET INTEREST INCOME 41,135 37,022 36,650 39,458 38,265
Provision for loan losses 1,016   1,533   1,997   2,102   4,505  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 40,119   35,489   34,653   37,356   33,760  
OTHER INCOME
Service charges on deposit accounts 3,639 3,120 2,912 2,729 2,962
Fiduciary activities 2,237 1,986 2,264 2,107 1,984
Other customer fees 3,371 2,899 2,816 2,780 2,757
Commission income 1,585 1,636 1,748 2,172 1,454
Earnings on cash surrender value of life insurance 692 611 610 700 693
Net gains and fees on sales of loans 1,003 1,673 2,457 2,378 3,513
Net realized gains on sales of available for sale securities 239 248 255
Other income 2,546   (125 ) 1,013   763   588  
Total Other Income 15,073   11,800   14,059   13,877   14,206  
OTHER EXPENSES
Salaries and employee benefits 23,470 20,616 20,536 20,791 20,320
Net occupancy 2,992 2,430 2,267 2,602 2,494
Equipment 2,369 1,852 1,742 1,774 1,942
Marketing 675 559 535 467 616
Outside data processing fees 1,205 1,515 1,391 1,480 1,361
Printing and office supplies 378 320 311 331 321
Core deposit amortization 496 383 383 387 489
FDIC assessments 767 677 674 744 738
Other real estate owned and credit-related expenses 1,668 1,648 1,479 1,866 1,766
Other expenses 6,538   4,219   4,424   4,258   4,456  
Total Other Expenses 40,558   34,219   33,742   34,700   34,503  
INCOME BEFORE INCOME TAX 14,634 13,070 14,970 16,533 13,463
Income tax expense 3,187   2,667   4,155   4,668   3,153  
NET INCOME 11,447 10,403 10,815 11,865 10,310
Preferred stock dividends (241 ) (430 ) (852 ) (857 ) (1,135 )
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 11,206   $ 9,973   $ 9,963   $ 11,008   $ 9,175  
 
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.34 $ 0.35 $ 0.35 $ 0.38 $ 0.32
Diluted Net Income Available to Common Stockholders $ 0.34 $ 0.35 $ 0.34 $ 0.38 $ 0.32
Cash Dividends Paid $ 0.05 $ 0.05 $ 0.05 $ 0.03 $ 0.03
Average Diluted Shares Outstanding (in thousands) 32,913 29,081 29,024 28,971 28,930
FINANCIAL RATIOS:
Return on Average Assets 0.91 % 0.93 % 0.92 % 1.04 % 0.85 %
Return on Average Stockholders' Equity 7.78 7.85 7.34 8.25 6.66
Return on Average Common Stockholders' Equity 8.05 8.42 8.40 9.47 7.97
Average Earning Assets to Average Assets 89.08 90.71 90.59 90.46 90.28
Allowance for Loan Losses as % of Total Loans 1.87 2.26 2.32 2.36 2.37
Net Charge Off's as % of Average Loans (Annualized) (0.08 ) 0.48 0.32 0.40 0.65
Average Stockholders' Equity to Average Assets 11.64 11.85 12.54 12.56 12.84
Tax Equivalent Yield on Earning Assets 4.30 4.35 4.29 4.70 4.58
Cost of Supporting Liabilities 0.41 0.38 0.41 0.45 0.48
Net Interest Margin (FTE) on Earning Assets 3.89 3.97 3.88 4.25 4.10
Tangible Book Value Per Share $ 12.17 $ 11.56 $ 11.27 $ 11.24 $ 10.95
 
LOANS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
Commercial and industrial loans $ 761,705 $ 652,356 $ 657,764 $ 637,952 $ 622,579
Agricultural production financing and other loans to farmers 114,348 98,489 105,175 104,284 112,527
Real estate loans:
Construction 177,082 149,875 101,909 75,877 98,639
Commercial and farmland 1,611,809 1,264,180 1,272,761 1,280,611 1,266,682
Residential 616,385 452,277 460,108 467,629 473,537
Home Equity 255,223 206,816 203,788 201,767 203,406
Individuals' loans for household and other personal expenditures 69,783 70,380 79,258 73,314 75,748
Lease financing receivables, net of unearned income 1,545 1,815 1,828 2,013 2,590
Other loans 24,529   29,269   37,489   36,095   46,501  
Loans 3,632,409 2,925,457 2,920,080 2,879,542 2,902,209
Allowance for loan losses (67,870 ) (66,224 ) (68,202 ) (68,537 ) (69,366 )
NET LOANS $ 3,564,539   $ 2,859,233   $ 2,851,878   $ 2,811,005   $ 2,832,843  
 
DEPOSITS          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
Demand deposits $ 2,018,650 $ 1,610,662 $ 1,648,712 $ 1,590,709 $ 1,646,756
Savings deposits 1,257,994 937,521 916,481 891,061 831,952
Certificates and other time deposits of $100,000 or more 272,660 190,866 205,467 224,505 236,470
Other certificates and time deposits 595,110 422,151 448,885 481,446 502,927
Brokered deposits 87,054   94,646   113,248   123,087   128,278
TOTAL DEPOSITS $ 4,231,468   $ 3,255,846   $ 3,332,793   $ 3,310,808   $ 3,346,383
 
CONSOLIDATED BALANCE SHEETS (AVERAGE)          
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
ASSETS
Cash and cash equivalents $ 91,121 $ 69,974 $ 69,045 $ 62,221 $ 70,817
Interest-bearing time deposits 116,839 24,497 109,522 48,807 83,309
Investment securities 963,478 908,419 880,241 865,255 908,788
Mortgage loans held for sale 5,069 11,063 17,489 31,271 23,155
Loans 3,287,924 2,907,144 2,892,199 2,878,845 2,844,638
Less: Allowance for loan losses (66,949 ) (69,117 ) (69,296 ) (69,890 ) (70,382 )
Net loans 3,220,975 2,838,027 2,822,903 2,808,955 2,774,256
Premises and equipment 66,383 54,757 53,896 53,763 51,868
Federal Reserve and Federal Home Loan Bank stock 36,095 32,790 32,789 32,782 32,821
Interest receivable 17,359 14,026 13,864 13,885 16,252
Core deposit intangibles and goodwill 177,518 148,571 148,954 149,340 149,776
Cash surrender value of life insurance 152,972 126,922 126,315 125,646 124,916
Other real estate owned 16,557 11,669 12,202 14,073 13,512
Tax asset, deferred and receivable 49,525 32,484 27,676 28,605 28,748
Other assets 36,383   13,783   14,683   14,352   14,864  
TOTAL ASSETS $ 4,950,274   $ 4,286,982   $ 4,329,579   $ 4,248,955   $ 4,293,082  
LIABILITIES
Deposits:
Noninterest-bearing 883,044 775,545 753,695 776,527 737,611
Interest-bearing 2,977,408   2,519,824   2,632,227   2,540,184   2,584,386  
Total Deposits 3,860,452 3,295,369 3,385,922 3,316,711 3,321,997
Borrowings:
Federal funds purchased 21,367 68,236 2,267 14,757 7,991
Securities sold under repurchase agreements 135,697 126,938 158,377 139,780 150,319
Federal Home Loan Bank advances 149,278 139,941 93,014 93,916 110,361
Subordinated debentures and term loans 121,795   111,779   111,778   112,149   112,168  
Total Borrowings 428,137 446,894 365,436 360,602 380,839
Interest payable 1,811 1,592 1,808 2,074 2,262
Other liabilities 83,717   35,093   33,492   35,771   36,570  
Total Liabilities 4,374,117 3,778,948 3,786,658 3,715,158 3,741,668
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding 19,242 34,413 68,087 68,591 90,783
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding 125 125 125 125 125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding 4,075 3,601 3,598 3,587 3,584
Additional paid-in capital 323,196 257,847 257,147 256,682 256,445
Retained earnings 245,083 230,077 221,606 210,550 202,921
Accumulated other comprehensive loss (15,564 ) (18,029 ) (7,642 ) (5,738 ) (2,444 )
Total Stockholders' Equity 576,157   508,034   542,921   533,797   551,414  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,950,274   $ 4,286,982   $ 4,329,579   $ 4,248,955   $ 4,293,082  
 

First Merchants Corporation
David L. Ortega, First Vice President/Director of Investor Relations, 765-378-8937
http://www.firstmerchants.com