N / E / W / S   R / E / L / E / A / S / E



August 14, 1998

For more information, contact:
JAMES L. THRASH, SENIOR VICE PRESIDENT/CHIEF FINANCIAL OFFICER, 765-747-1390
OR
DOUG HARRIS, VICE PRESIDENT, INVESTOR SERVICES, 765-741-7278
http://firstmerchants.com


FIRST MERCHANTS ANNOUNCES
3-FOR-2 STOCK SPLIT AND DIVIDEND INCREASE


First Merchants Corporation (NASDAQ-FRME) has announced the declaration of a
3-for-2 split of its shares of outstanding common stock. The split was declared
by the Corporation's Board of Directors at a meeting on August 11, 1998.
Shareholders of record on October 16, 1998 are entitled to participate in the
split. The effective date for shares to be issued pursuant to the split is
October 23, 1998.

At the same meeting, the Board of Directors also approved an increase in
quarterly dividend from $ .28 to $ .30 per share, payable September 18, 1998 to
shareholders of record on September 4, 1998. The increase reflects the Board's
long-term intent to raise dividend levels commensurate with earnings growth.
Dividends have increased in each of the last sixteen years.

First Merchants Corporation is an east central Indiana bank holding company. Its
subsidiaries include First Merchants Bank in Delaware County, Pendleton Banking
Company in Madison County, First United Bank in Henry County, Union County
National Bank, the Randolph County Bank, and First Merchants Insurance Services.

First Merchants Corporation common stock is traded over-the-counter on the
NASDAQ National Market System under the symbol "FRME" and is rated "A+" by
Standard and Poor's Corporation. Quotations are carried in many daily newspapers
and other financial publications and can be found on the company's Internet web
page (http://firstmerchants.com). Eight brokerage firms make a market in First
Merchants Corporation stock: City Securities Corporation; David A. Noyes and
Company; NatCity Investments; Howe, Barnes & Johnson, Inc.; Herzog, Heine,
Geduld, Inc.; Keefe, Bruyette & Woods, Inc.; McDonald & Co.; and 
Robert W. Baird & Co., Inc.

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