GlobeNewswire Inc | Oct 26, 2021 08:00AM EDT

October 26, 2021

MUNCIE, Ind., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) has reported third quarter 2021 net income of $52.8 million compared to $36.2 million during the same period in 2020, an increase of 45.7 percent. Earnings per share for the period totaled $.98 per share compared to the third quarter of 2020 result of $.67 per share. Year-to-date net income totaled $157.8 million compared to $103.5 million during the nine months ended September 30, 2020, an increase of 52.5 percent. Year-to-date earnings per share totaled $2.92 compared to $1.91 during the same period in 2020.

Total assets equaled $15.1 billion as of September 30, 2021 and loans totaled $9.0 billion. The Corporation experienced organic loan growth of $503.9 million, or 6.0 percent during the last twelve months, offset by the forgiveness of Paycheck Protection Program (PPP) loans which accounted for a decline of $703.3 million. As a result, the loan portfolio decreased by $199.5 million, or 2.2 percent, during that period. Organic loan growth, on an annualized basis, was 5.8 percent in the third quarter 2021. Investments increased $1.5 billion, or 51.6 percent, during the last twelve months and now total $4.4 billion. Total deposits equaled $12.3 billion as of quarter-end and increased by $1.4 billion, or 13.2 percent, from the same period in 2020.

The Corporations Allowance for Credit Losses Loans totaled $200.0 million as of quarter-end, or 2.21 percent of total loans. Net recoveries for the quarter totaled $0.2 million and no provision expense was recorded. Provision expense taken during the three and nine months ended September 30, 2020 of $12.5 million and $54.2 million, respectively, reflected our view of increased credit risk related to the COVID-19 pandemic. Non-accrual loans totaled $51.5 million as of quarter-end.

Mark Hardwick, Chief Executive Officer, stated, We are having a record year powered by strong balance sheet growth and high levels of profitability. We remain optimistic about the remainder of 2021 and our ability to deliver high levels of performance in 2022.

Net-interest income for the quarter totaled $104.7 million, an increase of $11.8 million from the third quarter of 2020, or 12.7 percent. Net interest margin, on a tax equivalent basis, totaling 3.20 percent, increased by 5 basis points compared to the third quarter of 2020. Yields on earning assets for the third quarter totaled 3.46 percent and cost of supporting liabilities totaled 26 basis points. Fair value accretion contributed less to margin as it accounted for 4 basis points in the third quarter of 2021, compared to 10 basis points in the third quarter of 2020. PPP loans contributed 17 basis points to margin during the third quarter of 2021 but subtracted 7 basis points from margin in the same quarter of 2020.

Non-interest income totaled $28.5 million for the quarter, a $2.3 million increase over the third quarter of 2020. Increases in service charges on deposit accounts, fiduciary and wealth management fees and earnings on cash surrender value of life insurance were somewhat offset by a decline in gains on the sale of mortgage loans. Non-interest expense totaled $71.4 million for the quarter compared to $64.7 million in the third quarter of 2020, an increase primarily due to higher salaries and employee benefits.

The loan to deposit ratio now totals 73.3 percent and the loan to asset ratio totals 60.1 percent. As of September 30, 2021, the Corporations total risk-based capital ratio equaled 14.02 percent, the common equity tier 1 capital ratio equaled 11.75 percent, and the tangible common equity ratio totaled 8.94 percent. These ratios continue to reflect the Corporations strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, October 26, 2021.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until November 26, 2021. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10160141.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme211021.html during the time of the call. A replay of the web cast will be available until October 26, 2022.

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 has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporations 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 companys Internet web page ( http://www.firstmerchants.com).

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

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like believe, continue, pattern, estimate, project, intend, anticipate, expect and similar expressions or future or conditional verbs such as will, would, should, could, might, can, may, or similar expressions. These statements include statements of First Merchants goals, intentions and expectations; statements regarding the First Merchants business plan and growth strategies; statements regarding the asset quality of First Merchants loan and investment portfolios; and estimates of First Merchants risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants business; and other risks and factors identified in each of First Merchants filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants past results of operations do not necessarily indicate its anticipated future results.

CONSOLIDATED BALANCE SHEETS (Dollars In Thousands) September 30, 2021 2020ASSETS Cash and cash equivalents $ 169,261 $ 164,632 Interest-bearing deposits 369,447 273,936 Investment securities, net of allowance for 4,445,516 2,933,286 credit losses of $245,000 and $0Loans held for sale 5,990 3,183 Loans 9,041,576 9,243,833 Less: Allowance for credit losses - loans (199,972 ) (126,726 )Net loans 8,841,604 9,117,107 Premises and equipment 104,814 112,959 Federal Home Loan Bank stock 28,736 28,736 Interest receivable 53,079 52,992 Goodwill and other intangibles 572,323 574,369 Cash surrender value of life insurance 291,825 291,543 Other real estate owned 698 6,942 Tax asset, deferred and receivable 39,504 21,762 Other assets 137,928 155,903 TOTAL ASSETS $ 15,060,725 $ 13,737,350 LIABILITIES Deposits: Noninterest-bearing $ 2,554,323 $ 2,187,607 Interest-bearing 9,794,366 8,718,546 Total Deposits 12,348,689 10,906,153 Borrowings: Federal funds purchased ? 80,000 Securities sold under repurchase agreements 183,589 187,732 Federal Home Loan Bank advances 334,149 399,522 Subordinated debentures and other borrowings 118,558 118,320 Total Borrowings 636,296 785,574 Interest payable 3,736 5,038 Other liabilities 203,914 206,929 Total Liabilities 13,192,635 11,903,694 STOCKHOLDERS' EQUITY 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 -- 100,000,000 shares Issued and outstanding - 53,510,745 and 6,689 6,736 53,891,733 sharesAdditional paid-in capital 988,659 1,003,777 Retained earnings 832,728 757,550 Accumulated other comprehensive income 39,889 65,468 Total Stockholders' Equity 1,868,090 1,833,656 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15,060,725 $ 13,737,350

CONSOLIDATED STATEMENTS OF Three Months Ended Nine Months EndedINCOME(Dollars In Thousands, September 30, September 30,Except Per Share Amounts) 2021 2020 2021 2020INTEREST INCOME Loans receivable: Taxable $ 85,319 $ 84,162 $ 257,426 $ 268,126 Tax-exempt 5,591 5,395 16,475 16,069 Investment securities: Taxable 7,788 5,399 21,923 19,177 Tax-exempt 14,464 10,931 39,920 30,285 Deposits with financial 218 90 461 799 institutionsFederal Home Loan Bank 168 248 434 828 stockTotal Interest Income 113,548 106,225 336,639 335,284 INTEREST EXPENSE Deposits 5,707 9,776 17,730 44,231 Federal funds purchased ? 5 4 118 Securities sold under 77 83 239 527 repurchase agreementsFederal Home Loan Bank 1,389 1,749 4,283 5,317 advancesSubordinated debentures and 1,660 1,691 4,976 5,275 other borrowingsTotal Interest Expense 8,833 13,304 27,232 55,468 NET INTEREST INCOME 104,715 92,921 309,407 279,816 Provision for credit losses ? 12,544 ? 54,191 - loansNET INTEREST INCOME AFTER 104,715 80,377 309,407 225,625 PROVISION FOR CREDIT LOSSESOTHER INCOME Service charges on deposit 6,249 5,209 17,109 15,491 accountsFiduciary and wealth 7,352 5,910 21,284 17,496 management feesCard payment fees 4,156 3,996 12,682 16,000 Net gains and fees on sales 3,955 5,841 16,266 12,878 of loansDerivative hedge fees 1,028 1,715 2,288 4,696 Other customer fees 393 372 1,129 1,103 Earnings on cash surrender 2,468 1,171 5,009 3,857 value of life insuranceNet realized gains on salesof available for sale 1,756 1,817 5,316 9,497 securitiesOther income 1,144 132 2,393 1,425 Total Other Income 28,501 26,163 83,476 82,443 OTHER EXPENSES Salaries and employee 43,314 39,187 124,563 114,128 benefitsNet occupancy 5,576 5,855 17,682 17,103 Equipment 4,529 4,956 14,407 13,789 Marketing 1,676 1,311 3,922 4,846 Outside data processing 4,794 3,776 13,736 10,593 feesPrinting and office 265 331 861 997 suppliesIntangible asset 1,463 1,486 4,284 4,511 amortizationFDIC assessments 1,552 1,249 4,381 4,244 Other real estate owned and (91 ) 717 821 1,906 foreclosure expensesProfessional and other 2,767 2,254 8,286 6,065 outside servicesOther expenses 5,539 3,587 13,834 12,687 Total Other Expenses 71,384 64,709 206,777 190,869 INCOME BEFORE INCOME TAX 61,832 41,831 186,106 117,199 Income tax expense 9,062 5,621 28,308 13,734 NET INCOME AVAILABLE TO $ 52,770 $ 36,210 $ 157,798 $ 103,465 COMMON STOCKHOLDERS Per Share Data: Basic Net Income Available $ 0.98 $ 0.67 $ 2.93 $ 1.91 to Common StockholdersDiluted Net IncomeAvailable to Common $ 0.98 $ 0.67 $ 2.92 $ 1.91 StockholdersCash Dividends Paid $ 0.29 $ 0.26 $ 0.84 $ 0.78 Average Diluted Shares 53,960 53,971 54,093 54,278 Outstanding (in thousands)

FINANCIAL HIGHLIGHTS(Dollars in Three Months Ended Nine Months Endedthousands) September 30, September 30, 2021 2020 2021 2020NET $ (197 ) $ 6,937 $ 4,731 $ 7,749 CHARGE-OFFS AVERAGE BALANCES:Total Assets $ 15,006,087 $ 13,660,818 $ 14,672,596 $ 13,297,789 Total Loans 9,089,648 9,252,839 9,202,327 8,987,645 Total Earning 13,741,196 12,341,257 13,419,310 11,941,839 AssetsTotal 12,350,336 10,944,721 12,017,335 10,541,777 DepositsTotalStockholders' 1,889,037 1,831,300 1,858,680 1,814,471 Equity FINANCIAL RATIOS:Return onAverage 1.41 % 1.06 % 1.43 % 1.04 %AssetsReturn onAverage 11.17 7.91 11.32 7.60 Stockholders'EquityReturn onAverageCommon 11.17 7.91 11.32 7.60 Stockholders'EquityAverageEarningAssets to 91.57 90.34 91.46 89.80 AverageAssetsAllowance forCredit Losses- Loans as % 2.21 1.37 2.21 1.37 of TotalLoansNetCharge-offsas % of (0.01 ) 0.30 0.07 0.11 Average Loans(Annualized)AverageStockholders'Equity to 12.59 13.41 12.67 13.64 AverageAssetsTaxEquivalentYield on 3.46 3.58 3.49 3.88 AverageEarningAssetsInterestExpense/Average 0.26 0.43 0.27 0.62 EarningAssetsNet InterestMargin (FTE)on Average 3.20 3.15 3.22 3.26 EarningAssetsEfficiency 51.18 51.40 50.10 50.52 RatioTangibleCommon Book $ 24.31 $ 23.48 $ 24.31 $ 23.48 Value PerShare

NON-PERFORMING ASSETS(Dollars In September June 30, March 31, December 31, SeptemberThousands) 30, 30, 2021 2021 2021 2020 2020Non-Accrual $ 51,502 $ 57,556 $ 57,923 $ 61,471 $ 56,739 LoansRenegotiated 439 629 655 3,240 2,677 LoansNon-Performing 51,941 58,185 58,578 64,711 59,416 Loans (NPL)Other RealEstate Owned 698 601 604 940 6,984 andRepossessionsNon-Performing 52,639 58,786 59,182 65,651 66,400 Assets (NPA)90+ Days 157 183 1,093 746 1,330 DelinquentNPAs & 90 Day $ 52,796 $ 58,969 $ 60,275 $ 66,397 $ 67,730 Delinquent Allowance forCredit Losses $ 199,972 $ 199,775 $ 201,082 $ 130,648 $ 126,726 - LoansQuarterly Net (197 ) 1,307 3,621 560 6,937 Charge-offsNPAs / Actual 0.35 % 0.39 % 0.40 % 0.47 % 0.48 %Assets %NPAs & 90 Day/ Actual 0.35 % 0.40 % 0.41 % 0.47 % 0.49 %Assets %NPAs / ActualLoans and OREO 0.58 % 0.64 % 0.63 % 0.71 % 0.72 %%Allowance forCredit Losses- Loans / 2.21 % 2.19 % 2.16 % 1.41 % 1.37 %Actual Loans(%)NetCharge-offs as% of Average (0.01 )% 0.06 % 0.16 % 0.02 % 0.30 %Loans(Annualized)

CONSOLIDATED BALANCE SHEETS(Dollars In September 30, June 30, March 31, December 31, September 30,Thousands) 2021 2021 2021 2020 2020ASSETS Cash and cash $ 169,261 $ 167,596 $ 187,901 $ 192,896 $ 164,632 equivalentsInterest-bearing 369,447 438,863 392,806 392,305 273,936 depositsInvestmentsecurities, net of 4,445,516 4,148,314 3,700,857 3,146,787 2,933,286 allowance forcredit lossesLoans held for sale 5,990 18,582 4,430 3,966 3,183 Loans 9,041,576 9,121,250 9,318,228 9,243,174 9,243,833 Less: Allowance forcredit losses - (199,972 ) (199,775 ) (201,082 ) (130,648 ) (126,726 )loansNet loans 8,841,604 8,921,475 9,117,146 9,112,526 9,117,107 Premises and 104,814 103,822 109,432 111,062 112,959 equipmentFederal Home Loan 28,736 28,736 28,736 28,736 28,736 Bank stockInterest receivable 53,079 54,173 54,662 53,948 52,992 Goodwill and other 572,323 573,786 571,536 572,893 574,369 intangiblesCash surrendervalue of life 291,825 294,462 293,766 292,745 291,543 insuranceOther real estate 698 601 604 940 6,942 ownedTax asset, deferred 39,504 36,924 40,163 12,340 21,762 and receivableOther assets 137,928 135,763 127,027 146,066 155,903 TOTAL ASSETS $ 15,060,725 $ 14,923,097 $ 14,629,066 $ 14,067,210 $ 13,737,350 LIABILITIES Deposits: Noninterest-bearing $ 2,554,323 $ 2,479,853 $ 2,494,891 $ 2,298,138 $ 2,187,607 Interest-bearing 9,794,366 9,723,547 9,456,889 9,063,472 8,718,546 Total Deposits 12,348,689 12,203,400 11,951,780 11,361,610 10,906,153 Borrowings: Federal funds ? ? ? ? 80,000 purchasedSecurities soldunder repurchase 183,589 146,904 185,721 177,102 187,732 agreementsFederal Home Loan 334,149 334,243 359,337 389,430 399,522 Bank advancesSubordinateddebentures and 118,558 118,498 118,439 118,380 118,320 other borrowingsTotal Borrowings 636,296 599,645 663,497 684,912 785,574 Interest payable 3,736 2,929 4,020 3,287 5,038 Other liabilities 203,914 245,323 203,913 141,756 206,929 Total Liabilities 13,192,635 13,051,297 12,823,210 12,191,565 11,903,694 STOCKHOLDERS' EQUITYCumulativePreferred Stock,$1,000 par value, $1,000 liquidationvalue:Authorized -- 600 sharesIssued and 125 125 125 125 125 outstandingCommon Stock, $.125 stated value:Authorized -- 100,000,000 sharesIssued and 6,689 6,747 6,744 6,740 6,736 outstandingAdditional paid-in 988,659 1,009,182 1,007,300 1,005,366 1,003,777 capitalRetained earnings 832,728 795,666 755,877 788,578 757,550 Accumulated othercomprehensive 39,889 60,080 35,810 74,836 65,468 incomeTotal Stockholders' 1,868,090 1,871,800 1,805,856 1,875,645 1,833,656 EquityTOTAL LIABILITIESAND STOCKHOLDERS' $ 15,060,725 $ 14,923,097 $ 14,629,066 $ 14,067,210 $ 13,737,350 EQUITY

CONSOLIDATEDSTATEMENTS OF INCOME(Dollars InThousands, September June 30 March 31, December SeptemberExcept Per Share 30 31, 30,Amounts) 2021 2021 2021 2020 2020INTEREST INCOME Loans receivable:Taxable $ 85,319 $ 87,002 $ 85,105 $ 90,138 $ 84,162 Tax-exempt 5,591 5,545 5,339 5,414 5,395 Investment securities:Taxable 7,788 7,440 6,695 5,263 5,399 Tax-exempt 14,464 13,071 12,385 12,056 10,931 Deposits withfinancial 218 129 114 139 90 institutionsFederal Home 168 88 178 214 248 Loan Bank stockTotal Interest 113,548 113,275 109,816 113,224 106,225 IncomeINTEREST EXPENSE Deposits 5,707 5,823 6,200 7,509 9,776 Federal funds ? 2 2 2 5 purchasedSecurities soldunder repurchase 77 75 87 77 83 agreementsFederal HomeLoan Bank 1,389 1,452 1,442 1,656 1,749 advancesSubordinateddebentures and 1,660 1,659 1,657 1,669 1,691 other borrowingsTotal Interest 8,833 9,011 9,388 10,913 13,304 ExpenseNET INTEREST 104,715 104,264 100,428 102,311 92,921 INCOMEProvision forcredit losses - ? ? ? 4,482 12,544 loansNET INTERESTINCOME AFTER 104,715 104,264 100,428 97,829 80,377 PROVISION FORCREDIT LOSSESOTHER INCOME Service chargeson deposit 6,249 5,596 5,264 5,508 5,209 accountsFiduciary andwealth 7,352 7,510 6,422 6,251 5,910 management feesCard payment 4,156 4,159 4,367 3,502 3,996 feesNet gains andfees on sales of 3,955 8,325 3,986 5,393 5,841 loansDerivative hedge 1,028 943 317 2,281 1,715 feesOther customer 393 368 368 394 372 feesEarnings on cashsurrender value 2,468 1,205 1,336 1,283 1,171 of lifeinsuranceNet realizedgains on sales 1,756 1,761 1,799 2,398 1,817 of available forsale securitiesOther income 1,144 1,017 232 473 132 Total Other 28,501 30,884 24,091 27,483 26,163 IncomeOTHER EXPENSES Salaries andemployee 43,314 42,438 38,811 41,809 39,187 benefitsNet occupancy 5,576 5,615 6,491 9,653 5,855 Equipment 4,529 4,848 5,030 5,555 4,956 Marketing 1,676 1,122 1,124 1,763 1,311 Outside data 4,794 4,698 4,244 3,839 3,776 processing feesPrinting and 265 313 283 307 331 office suppliesIntangible asset 1,463 1,464 1,357 1,476 1,486 amortizationFDIC assessments 1,552 1,461 1,368 1,560 1,249 Other realestate owned and (91 ) 178 734 (1,576 ) 717 foreclosureexpensesProfessional andother outside 2,767 2,976 2,543 2,836 2,254 servicesOther expenses 5,539 4,182 4,113 5,314 3,587 Total Other 71,384 69,295 66,098 72,536 64,709 ExpensesINCOME BEFORE 61,832 65,853 58,421 52,776 41,831 INCOME TAXIncome tax 9,062 10,294 8,952 7,641 5,621 expenseNET INCOMEAVAILABLE TO $ 52,770 $ 55,559 $ 49,469 $ 45,135 $ 36,210 COMMONSTOCKHOLDERS Per Share Data: Basic Net IncomeAvailable to $ 0.98 $ 1.03 $ 0.92 $ 0.83 $ 0.67 CommonStockholdersDiluted NetIncome Available $ 0.98 $ 1.03 $ 0.91 $ 0.83 $ 0.67 to CommonStockholdersCash Dividends $ 0.29 $ 0.29 $ 0.26 $ 0.26 $ 0.26 PaidAverage DilutedShares 53,960 54,184 54,134 54,050 53,971 Outstanding (inthousands)FINANCIAL RATIOS:Return on 1.41 % 1.51 % 1.39 % 1.29 % 1.06 %Average AssetsReturn onAverage 11.17 12.04 10.75 9.72 7.91 Stockholders'EquityReturn onAverage Common 11.17 12.04 10.75 9.72 7.91 Stockholders'EquityAverage EarningAssets to 91.57 91.87 91.43 90.66 90.34 Average AssetsAllowance forCredit Losses - 2.21 2.19 2.16 1.41 1.37 Loans as % ofTotal LoansNet Charge-offsas % of Average (0.01 ) 0.06 0.16 0.02 0.30 Loans(Annualized)AverageStockholders' 12.59 12.51 12.92 13.29 13.41 Equity toAverage AssetsTax EquivalentYield on Average 3.46 3.49 3.52 3.72 3.58 Earning AssetsInterest Expense/Average Earning 0.26 0.27 0.29 0.34 0.43 AssetsNet InterestMargin (FTE) on 3.20 3.22 3.23 3.38 3.15 Average EarningAssetsEfficiency Ratio 51.18 48.91 50.23 55.01 51.40 Tangible CommonBook Value Per $ 24.31 $ 24.15 $ 22.98 $ 24.27 $ 23.48 Share

LOANS (Dollars In September 30, June 30, March 31, December 31, September 30,Thousands) 2021 2021 2021 2020 2020Commercialand $ 2,573,615 $ 2,671,076 $ 2,876,212 $ 2,776,699 $ 2,875,331 industrialloansAgriculturalland,production 240,686 235,020 245,631 281,884 301,192 and otherloans tofarmersReal estate loans:Construction 521,889 491,200 541,224 484,723 622,084 Commercialreal estate, 2,150,387 2,263,497 2,178,832 2,220,949 2,098,589 non-owneroccupiedCommercialreal estate, 952,441 953,501 950,038 958,501 931,815 owneroccupiedResidential 1,154,373 1,127,442 1,239,925 1,234,741 1,146,406 Home equity 531,307 489,997 482,229 508,259 527,458 Individuals'loans forhousehold 135,093 130,819 126,387 129,479 125,411 and otherpersonalexpendituresPublicfinance andother 781,785 758,698 677,750 647,939 615,547 commercialloansLoans 9,041,576 9,121,250 9,318,228 9,243,174 9,243,833 Allowancefor credit (199,972 ) (199,775 ) (201,082 ) (130,648 ) (126,726 )losses -loansNET LOANS $ 8,841,604 $ 8,921,475 $ 9,117,146 $ 9,112,526 $ 9,117,107

DEPOSITS (Dollars In September 30, June 30, March 31, December 31, September 30,Thousands) 2021 2021 2021 2020 2020Demand $ 7,317,399 $ 7,261,603 $ 7,245,850 $ 6,821,152 $ 6,279,554 depositsSavings 4,301,483 4,157,552 3,857,624 3,661,713 3,518,286 depositsCertificatesand othertime 283,396 304,394 332,745 346,194 467,610 deposits of$100,000 ormoreOthercertificates 404,010 423,922 449,655 459,168 542,919 and timedepositsBrokered 42,401 55,929 65,906 73,383 97,784 depositsTOTAL $ 12,348,689 $ 12,203,400 $ 11,951,780 $ 11,361,610 $ 10,906,153 DEPOSITS

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS(Dollars in Thousands) For the Three Months Ended September 30, 2021 September 30, 2020 Average Interest Average Average Interest Average Balance Income / Rate Balance Income / Rate Expense ExpenseAssets: Interest-bearing $ 539,377 $ 218 0.16 % $ 301,529 $ 90 0.12 %depositsFederal Home Loan 28,736 168 2.34 28,736 248 3.45 Bank stockInvestment Securities: ^(1)Taxable 1,843,026 7,788 1.69 1,258,690 5,399 1.72 Tax-Exempt ^(2) 2,240,409 18,309 3.27 1,499,463 13,837 3.69 Total Investment 4,083,435 26,097 2.56 2,758,153 19,236 2.79 SecuritiesLoans held for sale 17,426 158 3.63 24,705 257 4.16 Loans: ^(3) Commercial 6,745,303 70,442 4.18 6,965,837 66,826 3.84 Real Estate Mortgage 886,469 8,142 3.67 887,661 9,996 4.50 Installment 690,093 6,576 3.81 693,363 7,083 4.09 Tax-Exempt ^(2) 750,357 7,078 3.77 681,273 6,829 4.01 Total Loans 9,089,648 92,396 4.07 9,252,839 90,991 3.93 Total Earning Assets 13,741,196 118,879 3.46 % 12,341,257 110,565 3.58 %Total Non-Earning 1,264,891 1,319,561 AssetsTotal Assets $ 15,006,087 $ 13,660,818 Liabilities: Interest-bearing deposits:Interest-bearing $ 4,799,624 $ 3,606 0.30 % $ 4,098,017 $ 3,890 0.38 %depositsMoney market deposits 2,459,205 764 0.12 1,813,392 1,167 0.26 Savingsdeposits 1,788,281 486 0.11 1,574,700 583 0.15 Certificates and 758,565 851 0.45 1,267,152 4,136 1.31 other time depositsTotalInterest-bearing 9,805,675 5,707 0.23 8,753,261 9,776 0.45 DepositsBorrowings 619,768 3,126 2.02 733,757 3,528 1.92 TotalInterest-bearing 10,425,443 8,833 0.34 9,487,018 13,304 0.56 LiabilitiesNoninterest-bearing 2,544,661 2,191,460 depositsOther liabilities 146,946 151,040 Total Liabilities 13,117,050 11,829,518 Stockholders' Equity 1,889,037 1,831,300 Total Liabilities and $ 15,006,087 8,833 $ 13,660,818 13,304 Stockholders' EquityNet Interest Income $ 110,046 $ 97,261 (FTE)Net Interest Spread 3.12 % 3.02 %(FTE) ^(4) Net Interest Margin (FTE):Interest Income (FTE)/ Average Earning 3.46 % 3.58 %AssetsInterest Expense /Average Earning 0.26 % 0.43 %AssetsNet Interest Margin 3.20 % 3.15 %(FTE) ^(5) ^(1) Average balance of securities is computed based on the average of thehistorical amortized cost balances without the effects of the fair valueadjustments. Annualized amounts are computed using a 30/360 day basis.^(2) Tax-exempt securities and loans are presented on a fully taxableequivalent basis, using a marginal tax rate of 21 percent for 2021 and 2020.These totals equal $5,331 and $4,340 for the three months ended September 30,2021 and 2020, respectively.^(3)Non accruing loans have been included in the average balances.^(4) Net Interest Spread (FTE) is interest income expressed as a percentage ofaverage earning assets minus interest expense expressed as a percentage ofaverage interest-bearing liabilities.^(5) Net Interest Margin (FTE) is interest income expressed as a percentage ofaverage earning assets minus interest expense expressed as a percentage ofaverage earning assets.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS(Dollars in Thousands) For the Nine Months Ended September 30, 2021 September 30, 2020 Average Interest Average Average Interest Average Balance Income / Rate Balance Income / Rate Expense ExpenseAssets: Interest-bearing $ 509,153 $ 461 0.12 % $ 280,038 $ 799 0.38 %depositsFederal Home Loan 28,736 434 2.01 28,736 828 3.84 Bank stockInvestment Securities: ^(1)Taxable 1,689,697 21,923 1.73 1,302,943 19,177 1.96 Tax-Exempt ^(2) 1,989,397 50,532 3.39 1,342,477 38,335 3.81 Total Investment 3,679,094 72,455 2.63 2,645,420 57,512 2.90 SecuritiesLoans held for sale 19,360 551 3.79 17,175 581 4.51 Loans: ^(3) Commercial 6,857,968 210,502 4.09 6,698,042 213,241 4.24 Real Estate Mortgage 924,652 26,917 3.88 882,911 30,520 4.61 Installment 674,696 19,456 3.84 725,596 23,784 4.37 Tax-Exempt ^(2) 725,651 20,854 3.83 663,921 20,341 4.09 Total Loans 9,202,327 278,280 4.03 8,987,645 288,467 4.28 Total Earning Assets 13,419,310 351,630 3.49 % 11,941,839 347,606 3.88 %Total Non-Earning 1,253,286 1,355,950 AssetsTotal Assets $ 14,672,596 $ 13,297,789 Liabilities: Interest-bearing deposits:Interest-bearing $ 4,721,267 $ 10,875 0.31 % $ 3,880,489 $ 16,351 0.56 %depositsMoney market deposits 2,295,589 2,395 0.14 1,674,622 6,647 0.53 Savingsdeposits 1,730,149 1,424 0.11 1,507,269 3,007 0.27 Certificates and 809,721 3,036 0.50 1,476,499 18,226 1.65 other time depositsTotalInterest-bearing 9,556,726 17,730 0.25 8,538,879 44,231 0.69 DepositsBorrowings 646,326 9,502 1.96 796,836 11,237 1.88 TotalInterest-bearing 10,203,052 27,232 0.36 9,335,715 55,468 0.79 LiabilitiesNoninterest-bearing 2,460,609 2,002,898 depositsOther liabilities 150,255 144,705 Total Liabilities 12,813,916 11,483,318 Stockholders' Equity 1,858,680 1,814,471 Total Liabilities and $ 14,672,596 27,232 $ 13,297,789 55,468 Stockholders' EquityNet Interest Income $ 324,398 $ 292,138 (FTE)Net Interest Spread 3.13 % 3.09 %(FTE) ^(4) Net Interest Margin (FTE):Interest Income (FTE)/ Average Earning 3.49 % 3.88 %AssetsInterest Expense /Average Earning 0.27 % 0.62 %AssetsNet Interest Margin 3.22 % 3.26 %(FTE) ^(5) ^(1) Average balance of securities is computed based on the average of thehistorical amortized cost balances without the effects of the fair valueadjustments. Annualized amounts are computed using a 30/360 day basis.^(2) Tax-exempt securities and loans are presented on a fully taxableequivalent basis, using a marginal tax rate of 21 percent for 2021 and 2020.These totals equal $14,991 and $12,322 for the nine months ended September 30,2021 and 2020, respectively.^(3) Non accruing loans have been included in the averagebalances.^(4) Net Interest Spread (FTE) is interest income expressed as a percentage ofaverage earning assets minus interest expense expressed as a percentage ofaverage interest-bearing liabilities.^(5) Net Interest Margin (FTE) is interest income expressed as a percentage ofaverage earning assets minus interest expense expressed as a percentage ofaverage earning assets.

For more information, contact:Nicole M. Weaver, Vice President and Director of Corporate Administration765-521-7619 http://www.firstmerchants.com