Slide 1: Investor Update First Quarter 2025
INVESTOR UPDATE First Quarter 2025
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation 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”
Slide 3: Executive Management Team
Executive Management Team Mark Hardwick FMB: Chief Executive Officer 27 Yrs Mark K. Hardwick currently serves as the Chief Executive Officer of First Merchants Corporation and First Merchants Bank. Mark joined First Merchants in November of 1997 as Corporate Controller and was promoted to Chief Fina
Slide 4: First Merchants Corporation (NASDAQ: FRME)
First Merchants Corporation (NASDAQ: FRME) Largest financial services holding company headquartered in Central Indiana Financial Highlights as of 3/31/2025 $18.4 Billion YTD ROAA: 1.21% Total Assets YTD Return on TCE 14.12% $13.0 Billion TCE/TA: 8.90% Total Loans Market Cap $2.3B $14.5 Billion Divid
Slide 5: Highlights First Quarter
Highlights First Quarter Net Income & EPS1 ROA (Annualized) ROE & ROTCE (Annualized) $54.9 Million 1.21% ROA 9.38% ROE $0.94 Per Share 1.47% PTPP ROA2 14.12% ROTCE2 ▪ EPS of $0.941 compared to core EPS of $0.851,2 in 1Q24 an increase of 10.6% ▪ Core PTPP income growth of 12% and positive operating l
Slide 6: Business Strategy
Business Strategy Commercial Banking Consumer Banking Full Spectrum of Debt Capital and Treasury Service Offerings Full Spectrum of Consumer Deposit and Lending Offerings Located in Prime Growth Markets Supported by: Talented, Customer Service Oriented Banking Center Small Business & SBA Asset Based
Slide 7: Business Highlights - Loans
Business Highlights - Loans Michigan Loan Growth Summary1,2 Monroe MSA Rank: 1 Detroit MSA Rank: 9 1Q25 Balance ($B) Growth Deposits: $2.6B Loans: $2.9B Commercial 9.8 7.0% Northwest Indiana Lake County Rank: 4 Consumer 3.2 -1.8% Lafayette MSA Rank: 2 Total Loan Growth QTD 4.8% Deposits: $3.0B Loans
Slide 8: Business Highlights - Deposits
Business Highlights - Deposits Michigan Monroe MSA Rank: 1 Deposit Growth Summary1,2 Detroit MSA Rank: 9 Deposits: $2.6B 1Q25 Balance ($B) Growth Northwest Indiana Loans: $2.9B Lake County Rank: 4 Commercial 7.1 -12.4% Lafayette MSA Rank: 2 Consumer 5.8 -0.6% Deposits: $3.0B Total Deposit Growth QTD
Slide 9: First Quarter Financial Results
First Quarter Financial Results ($M except per share data) For the Three Months Ended, Variance % Variance Linked Linked QTR- 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Quarter Annualized Balance Sheet & Asset Quality 1Q25 Highlights 1. Total Assets $18,317.8 $18,303.4 $18,347.6 $18,312.0 $18,439.8 $1
Slide 10: Investment Portfolio Highlights
Investment Portfolio Highlights 1Q25 Investment Portfolio Composition Yield on Investments (%) / Total Investments ($B) Corporate U.S. Agencies Obligations 12% 1% Collateralized Mortgage 2.58% 2.61% 2.63% 2.67% 2.63% Obligations 5% $3.4B $3.8 $3.8 $3.7 $3.5 $3.4 Municipal Mortgage- Total Bonds 1Q24
Slide 11: Loan Portfolio Highlights
Loan Portfolio Highlights 1Q25 Loan Composition Highlights Construction Land & Land Development 6.1% Agricultural Land & Commercial Real Estate Production 1.9% ▪ Portfolio composition is ~75% Commercial oriented Non-Owner Occupied Public Finance/Other 16.7% Commercial 8.3% ▪ Total loan yield of 6.21
Slide 12: Allowance for Credit Losses - Loans
Allowance for Credit Losses - Loans 1Q25 Allowance for Credit Losses - Loans Highlights ▪ $4.2 million Q1 provision 1.64% ▪ The reserve for unfunded commitments totals $18.0 million 1.50% 1.48% 1.50% 1.47% and is recorded in Other Liabilities ▪ The remaining fair value accretion on acquired loans is
Slide 13: Deposit Portfolio Highlights
Deposit Portfolio Highlights 1Q25 Deposit Composition Highlights Certificates & Time Deposits < $100k ▪ Strong core deposit base 4% Brokered Certificates of Deposits 1 • 91% core deposits2 3% Certificates & Time Deposits > $100k • 15% noninterest bearing 6% • 36% of total deposits yield 0 to 5 bps ▪
Slide 14: Net Interest Margin
Net Interest Margin 1Q24 2Q24 3Q24 4Q24 1Q25 1. Net Interest Income - FTE ($millions) $ 132.9 $ 134.4 $ 137.0 $ 140.2 $ 136.4 2. Fair Value Accretion $ 1.4 $ 1.5 $ 1.4 $ 1.4 $ 1.1 3. Adjusted Net Interest Income - FTE1 $ 131.5 $ 132.9 $ 135.6 $ 138.8 $ 135.3 4. Tax Equivalent Yield on Earning Assets
Slide 15: Noninterest Income Highlights
Noninterest Income Highlights 1Q25 Noninterest Income Detail ($M) Noninterest Income Trends Fee Income / Revenue 23.4% Service Charges $8.1 18.9% 27% 18.0% 16.7% 15.4% Card Payment Fees Gain on $4.5 Sale of Loans $5.0 $30.0M 15% Customer-Related Fees ($M) 17% Derivative Total Hedge Fees $0.4 1% $29.
Slide 16: Noninterest Expense Highlights
Noninterest Expense Highlights 1Q25 Noninterest Expense Detail Noninterest Expense Trends ($M) Efficiency Ratio Net Occupancy & Equipment Outside Data Processing 59.21% $14.2 54.54% Salary & Benefits $5.9 53.84% 53.76% 53.60%1 $55.0 15% 6% 59% Professional & Other Outside Services 57.03%1 $3.3 48.48
Slide 17: Capital Ratios
Capital Ratios Tangible Common Equity Ratio Highlights 8.76% 8.81% 8.90% ▪ TCE increased over 4Q24 due to strong earnings 8.32% 8.27% growth 9.57% 9.31% ▪ Capital ratios reflect $30 million of sub debt 9.31% redemption and $7.9 million of shares repurchased during 1Q25 9.65% 9.04% 9.31% 9.31% 9.57%
Slide 18: Loan Portfolio
Loan Portfolio Loan Portfolio Trends ($M) 1Q25 Highlights 1Q24 2Q24 3Q24 4Q24 1Q25 ▪ Balanced Commercial loan growth of $169 1. C&I - Regional Banking $ 2,910 $ 3,132 $ 3,201 $ 3,349 $ 3,482 million 2. C&I - Sponsor Finance 813 818 841 766 824 ▪ Strong C&I Loan growth of $248 million 3. CRE Owner Oc
Slide 19: Loan Portfolio Insights
Loan Portfolio Insights Commercial C&I C&I - Sponsor Finance ▪ $824.4 million in loans to 90 companies in a diversity of industries ▪ Senior Debt/Adj. EBITDA < 3.0X ~75% ▪ Total Debt/Adj. EBITDA < 4.0X ~73% ▪ FCCR > 1.50X ~63% ▪ ~6.6% Classified (as a % of portfolio) ▪ Excellent credit history with
Slide 20: Loan Portfolio Insights (continued)
Loan Portfolio Insights (continued) Commercial Real Estate (Non-Owner Occupied) ($M) Multi- Warehouse Total CRE Family Industrial Retail / Storage Office Hotel Other (NOO) Balance: $ 659.9 $ 405.5 $ 311.3 $ 281.4 $ 237.3 $ 96.3 $ 186.1 $ 2,177.8 Commitment: $ 704.1 $ 425.6 $ 314.9 $ 293.3 $ 240.9 $
Slide 21: Asset Quality
Asset Quality Asset Quality Trends ($M) 1Q25 Highlights 1Q24 2Q24 3Q24 4Q24 1Q25 Asset Quality: 1. Non-Accrual Loans $ 62.5 $ 61.9 $ 59.1 $ 73.8 $ 81.9 ▪ Largest Non-Accruals 2. Other Real Estate 4.9 4.8 5.2 4.9 5.0 • $22 million – Multi-family - Originally payoff expected by end of Q1- 3. 90PD Loan
Slide 22: Nonperforming Assets
Nonperforming Assets Nonperforming Assets Roll Forward ($M) 1Q25 Highlights 1Q24 2Q24 3Q24 4Q24 1Q25 Non-Accrual Migration: 1. Beginning Balance NPAs + 90PD $ 58.6 $ 70.2 $ 68.4 $ 78.4 $ 84.6 ▪ Largest new non-accrual relationship totals $6.8 Non-Accrual million 2. Add: New Non-Accruals 17.7 51.6 13
Slide 23: Track Record of Shareholder Value
Track Record of Shareholder Value 10-Year Total Return (2014-2024) Earnings per Share CAGR 2014-2024: 7.5% $3.81 $3.81 $3.73 $3.41 230.1% $3.22 $3.19 $2.74 $1.98 $2.12 $1.65 $1.72 200.3% $0.94 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YTD'25 Dividends per Share FRME KBW NASDAQ Regional
Slide 24: History of Organic and Whole Bank Acquisition Growth
History of Organic and Whole Bank Acquisition Growth Total Assets ($B) Growth Through Acquisition ✓ Experienced Acquirer ✓ Expanded in Current High-Growth Markets ✓ Added to Franchise with Stable Deposit Gathering Markets $18.3 $18.3 $18.4 $17.9 $15.5 $14.1 $12.5 $9.9 $9.4 $6.8 $7.2 $5.8 2014 2015 2
Slide 25: Vision for the Future
Vision for the Future Our Vision: To enhance the financial wellness of the diverse communities we serve. Our Mission: To be the most attentive, knowledgeable, and high-performing bank for our clients, teammates, and shareholders. Strategic ▪ Drive engagement through inclusivity, teamwork, performanc
Slide 26: Appendix
APPENDIX ss 00) First Merchants Corporation Helping you prosper
Slide 27: Non-GAAP: Adjusted Net Income and Diluted EPS
Non-GAAP ADJUSTED NET INCOME AND DILUTED EARNINGS PER COMMON SHARE 1Q24 2Q24 3Q24 4Q24 1Q25 (Dollars in Thousands, Except Per Share Amounts) Net Income Available to Common Stockholders - GAAP $ 47,472 $ 39,456 $ 48,719 $ 63,880 $ 54,870 Adjustments: Net realized losses/(gains) on sales of available
Slide 28: Non-GAAP: Pre-Tax, Pre-Provision Earnings
Non-GAAP PRE-TAX, PRE-PROVISION ("PTPP") EARNINGS, AS ADJUSTED 1Q24 2Q24 3Q24 4Q24 1Q25 (Dollars in Thousands, Except Per Share Amounts) Net Interest Income (GAAP) $ 127,063 $ 128,571 $ 131,110 $ 134,370 $ 130,270 Other Income (GAAP) 26,638 31,334 24,866 42,742 30,047 Total Revenue 153,701 159,905 1
Slide 29: Non-GAAP: Net Interest Margin, Adjusted
Non-GAAP NET INTEREST MARGIN ("NIM"), ADJUSTED 1Q24 2Q24 3Q24 4Q24 1Q25 (Dollars in Thousands, Except Per Share Amounts) Net Interest Income (GAAP) $ 127,063 $ 128,571 $ 131,110 $ 134,370 $ 130,270 Fully Taxable Equivalent ("FTE") Adjustment 5,795 5,859 5,883 5,788 6,127 Net Interest Income (FTE) (n
Slide 30: Non-GAAP: Efficiency Ratio
Non-GAAP EFFICIENCY RATIO (dollars in thousands): 1Q24 2Q24 3Q24 4Q24 1Q25 EFFICIENCY RATIO (dollars in thousands): Non Interest Expense (GAAP) $ 96,935 $ 91,413 $ 94,629 $ 96,289 $ 92,902 Less: Intangible Asset Amortization (1,957) (1,771) (1,772) (1,771) (1,526) Less: OREO and Foreclosure Expenses
Slide 31: Non-GAAP: Capital Ratios
Non-GAAP CAPITAL RATIOS (dollars in thousands): 1Q24 2Q24 3Q24 4Q24 1Q25 Total Risk-Based Capital Ratio (dollars in thousands) Total Stockholders' Equity (GAAP) 2,224,803 2,212,525 2,302,373 2,304,983 2,332,214 1 Adjust for Accumulated Other Comprehensive (Income) Loss 198,029 211,979 151,825 188,68
Slide 32: Non-GAAP: Tangible Common Equity Ratio
Non-GAAP TANGIBLE COMMON EQUITY RATIO (dollars in thousands): 1Q24 2Q24 3Q24 4Q24 1Q25 Tangible Common Equity Ratio (dollars in thousands) Total Stockholders' Equity (GAAP) $ 2,224,803 $ 2,212,525 $ 2,302,373 $ 2,304,983 $ 2,332,214 Less: Preferred Stock (25,125) (25,125) (25,125) (25,125) (25,125)
Slide 33: Non-GAAP: Return on Tangible Common Equity
Non-GAAP RETURN ON TANGIBLE COMMON EQUITY (dollars in thousands): 2014 2015 2016 2017 2018 2019 2020 2021 Return on Tangible Common Equity Total Average Stockholders' Equity (GAAP) $ 675,295 $ 753,724 $ 884,664 $ 1,110,524 $ 1,343,861 $ 1,569,615 $ 1,825,135 $ 1,866,632 Less: Average Preferred Stock