SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993 Commission file number 0-17071
FIRST MERCHANTS CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-1544218
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Jackson
Muncie, Indiana 47305-2814
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 747-1500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.125 stated value per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value (not necessarily a reliable indication of the
price at which more than a limited number of shares would trade) of the voting
stock held by non-affiliates of the registrant was $88,979,607 as of March 9,
1994.
As of March 9, 1994, there were outstanding 3,386,324 common shares,
without par value, of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Documents Into Which Incorporated
--------- -----------------------
1993 Annual Report to Stockholders Part II (Items 5 through 8)
Definitive Proxy Statement for
Annual Meeting of Shareholders
to be held March 31, 1994 Part III (Items 10 through 13)
EXHIBIT INDEX: Pages 23 Total Pages 124
FORM 10-K TABLE OF CONTENTS
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Page
Part I
Item 1 - Business. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 - Properties. . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 3 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 16
Item 4 - Submission of Matters to a Vote of Security Holders . . . . 16
Supplemental Information - Executive Officers of the Registrant . . . 17
Part II
Item 5 - Market For the Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . . . . 18
Item 6 - Selected Financial Data . . . . . . . . . . . . . . . . . . 18
Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 18
Item 8 - Financial Statements and Supplementary Data . . . . . . . . 18
Item 9 - Changes In and Disagreements With Accountants on
Accounting and Financial Disclosures . . . . . . . . . . . 18
Part III
Item 10 - Directors and Executive Officers of the Registrant . . . . 18
Item 11 - Executive Compensation . . . . . . . . . . . . . . . . . . 18
Item 12 - Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . . . 19
Item 13 - Certain Relationships and Related Transactions . . . . . . 19
Part IV
Item 14 - Exhibits, Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . . . . . . . . . . 19
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Index to Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Page 2
PART I
ITEM 1. BUSINESS.
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GENERAL
First Merchants Corporation (the "Corporation") was incorporated under Indiana
law on September 20, 1982, as the bank holding company for First Merchants Bank,
National Association ("First Merchants"), a national banking association
incorporated on February 6, 1893. Prior to December 16, 1991, First Merchants'
name was The Merchants National Bank of Muncie. On November 30, 1988, the
Corporation acquired Pendleton Banking Company ("Pendleton"), a state chartered
commercial bank organized in 1872. On July 31, 1991, the Corporation acquired
First United Bank ("First United"), a state chartered commercial bank organized
in 1882.
The Corporation is headquartered in Muncie, Indiana, and is presently engaged in
conducting commercial banking business through the 21 offices of its three
banking subsidiaries. As of December 31, 1993, the Corporation and its
subsidiaries had 371 full-time equivalent employees.
COMPETITION
The Corporation's banking subsidiaries are located in Delaware, Madison, and
Henry counties, Indiana. In addition to the competition provided by the lending
and deposit gathering subsidiaries of national manufacturers, retailers,
insurance companies and investment brokers, the banking subsidiaries compete
vigorously with other banks, thrift institutions, credit unions and finance
companies located within their service areas.
SUPERVISION AND REGULATION
The Corporation is a bank holding company ("BHC") subject to regulation under
the Bank Holding Company Act of 1956, as amended (the "Act"). The Act generally
requires a BHC to obtain prior approval of the Federal Reserve Board (the "FRB")
to acquire or hold more than a 5% voting interest in any bank. The Act
restricts the non-banking activities of BHCs to those which are closely related
to banking activities. As a result of the provisions in the Financial
Institutional Reform, Recovery and Enforcement Act of 1989, BHCs may now own and
operate savings and loan associations or savings banks which, in the past, was
prohibited. First Merchants is a national bank and is supervised, regulated and
examined by the Comptroller of the Currency. Pendleton and First United are
state banks and are supervised, regulated and examined by the Indiana Department
of Financial Institutions. In addition, First Merchants, as a member of the
Federal Reserve System, is supervised and regulated by the Federal Reserve. In
addition, Pendleton and First United, which are not members of the Federal
Reserve System, are supervised and regulated by the Federal Deposit Insurance
Corporation ("FDIC"). The deposits of First Merchants, Pendleton, and First
United (the "Banks") are insured by the FDIC. Each regulator has the authority
to issue cease-and-desist orders if it determines their activities represent an
unsafe and unsound practice or violation of law.
Under the Act and under regulations of the FRB, the Corporation and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with the extension of credit and are subject to limitations as to
certain intercompany transactions.
Page 3
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SUPERVISION AND REGULATION (CONTINUED)
Subject to certain limitations, an Indiana bank may establish branches de novo
and may establish branches by acquisition in any location or locations within
Indiana. Indiana law permits intrastate bank holding company acquisitions,
subject to certain limitations. Effective July 1, 1992, Indiana bank holding
companies were permitted to acquire banks, and banks and bank holding companies
in Indiana were permitted to be acquired by bank holding companies, located in
any state in the United States which permits reciprocal entry by Indiana bank
holding companies. Prior to July 1, 1992, such interestate bank holding company
acquisitions were permitted only on a regional, as opposed to national, basis.
Neither the corporation nor its subsidiaries presently contemplate engaging in
any non-banking related business activities.
During 1991, Congress passed the Federal Deposit Insurance Corporation
Improvement Act ("FDICIA"). In addition to addressing the insurance fund's
financial needs, FDICIA expanded the power of the federal banking regulators.
FDICIA introduced a new system of classifying financial institutions with
respect to their capitalization. Effective in 1993, FDICIA also requires
certain financial institutions to have annual audits and requires management to
issue supplemental reports attesting to an institution's compliance with laws
and regulations and to the adequacy of its internal controls and procedures.
The Corporation's income is principally derived from dividends paid on the
common stock of its subsidiaries. The payment of these dividends are subject to
certain regulatory restrictions.
Page 4
STATISTICAL DATA
The following tables set forth statistical data relating the Corporation and its
subsidiaries.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
The daily average balance sheet amounts, the related interest income or expense,
and average rates earned or paid are presented in the following table.
1993 1992 1991
---------------------------- -------------------------- --------------------------
INTEREST INTEREST INTEREST
Average Income/ Average Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate Balance Expense Rate
------- ------- ---- ------- ------- ---- ------- ------- ----
(Dollars in Thousands on Fully Taxable Equivalent Basis)
Assets:
Federal funds sold. . . . . . . . . . . . . $ 15,653 $ 454 2.9% $ 13,949 $ 475 3.4% $ 7,234 $ 386 5.3%
Interest-bearing deposit. . . . . . . . . . 648 35 5.4 1,977 124 6.3 1,673 139 8.3
Investment securities:
Taxable. . . . . . . . . . . . . . . . . . 163,501 10,292 6.3 180,246 13,359 7.4 177,066 14,747 8.3
Tax-exempt . . . . . . . . . . . . . . . . 50,179 3,633 7.2 40,545 3,266 8.1 39,550 3,592 9.1
-------- ------- -------- ------- -------- -------
Total investment securities . . . . . . . 213,680 13,925 6.5 220,791 16,625 7.5 216,616 18,339 8.5
Loans:*
Commercial . . . . . . . . . . . . . . . . 148,657 10,919 7.3 136,602 10,790 7.9 127,139 12,541 9.9
Bankers' acceptances and commercial paper
purchased . . . . . . . . . . . . . . . . 112 4 3.6 1,016 38 3.7 3,364 252 7.5
Real estate mortgage . . . . . . . . . . . 132,932 11,364 8.5 121,677 11,981 9.8 106,412 10,829 10.2
Installment. . . . . . . . . . . . . . . . 73,226 6,418 8.8 67,559 6,827 10.1 60,576 7,089 11.7
Tax-exempt loans . . . . . . . . . . . . . 2,101 185 8.8 2,896 235 8.1 2,785 291 10.4
-------- ------- -------- ------- -------- -------
Total loans. . . . . . . . . . . . . . . . 357,028 28,890 8.1 329,750 29,871 9.1 300,276 31,002 10.3
-------- ------- -------- ------- -------- -------
Total earning assets . . . . . . . . . . . 587,009 43,304 7.4 566,467 47,095 8.3 525,799 49,866 9.5
------- ------- -------
Allowance for loan losses . . . . . . . . . (4,584) (4,253) (3,550)
Cash and due from banks . . . . . . . . . . 23,373 22,067 20,869
Premises and equipment. . . . . . . . . . . 8,634 7,206 6,383
Other assets. . . . . . . . . . . . . . . . 11,966 11,580 10,911
-------- -------- --------
Total assets. . . . . . . . . . . . . . . $626,398 $603,067 $560,412
-------- -------- --------
-------- -------- --------
Liabilities:
Interest-bearing deposits:
NOW accounts. . . . . . . . . . . . . . . 79,106 1,811 2.3 70,068 2,189 3.1 59,057 2,636 4.5
Money market deposit accounts . . . . . . 111,136 3,112 2.8 104,855 3,795 3.6 86,943 4,695 5.4
Savings deposits. . . . . . . . . . . . . 51,697 1,414 2.7 46,001 1,654 3.6 33,682 1,700 5.0
Certificates and other time deposits. . . 206,833 9,094 4.4 220,328 11,675 5.3 207,807 13,972 6.7
-------- ------- -------- ------- -------- -------
Total interest-bearing deposits. . . . . . 448,772 15,431 3.4 441,252 19,313 4.4 387,489 23,003 5.9
Short-term borrowings. . . . . . . . . . . 35,317 1,067 3.0 35,796 1,382 3.9 59,878 3,586 6.0
-------- ------- -------- ------- -------- -------
Total interest-bearing liabilities . . . 484,089 16,498 3.4 477,048 20,695 4.3 447,367 26,589 5.9
Noninterest-bearing deposits . . . . . . . 69,054 60,274 53,813
Other liabilities. . . . . . . . . . . . . 6,368 4,499 4,759
-------- -------- --------
Total liabilities . . . . . . . . . . . . 559,511 541,821 505,939
Stockholders' equity . . . . . . . . . . . . 66,887 61,246 54,473
-------- -------- --------
Total liabilities and stockholders' equity $626,398 16,498 2.8** $603,067 20,695 3.7** $560,412 26,589 5.1**
-------- ------- -------- ------- -------- -------
-------- -------- --------
Net interest income. . . . . . . . . . . . $26,806 4.6 $26,400 4.7 $23,277 4.4
------- ------- -------
------- ------- -------
Adjustment to convert tax exempt investment
securities to fully taxable equivalent basis,
using marginal rate of 34% . . . . . . . . . $ 1,298 $ 1,190 $ 1,320
------- ------- -------
------- ------- -------
<FN>
*Nonaccruing loans have been included in the average balances.
**Total interest expense divided by total earning assets
Page 5
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STATISTICAL DATA (Continued)
ANALYSIS OF CHANGES IN NET INTEREST INCOME
The following table presents net interest income components on a tax-equivalent
basis and reflects changes between periods attributable to movement in either
the average balance or average interest rate for both earning assets and
interest-bearing liabilities. The volume differences were computed as the
difference in volume between the current and prior year times the interest rate
of the prior year, while the interest rate changes were computed as the
difference in rate between the current and prior year times the volume of the
prior year. Volume/rate variances have been allocated on the basis of the
absolute relationship between volume variances and rate variances.
1993 Compared to 1992 1992 Compared to 1991
Increase (Decrease) Due To Increase (Decrease) Due To
-------------------------- --------------------------
Volume Rate Total Volume Rate Total
------ ---- ----- ------ ---- -----
(Dollars in Thousands on Fully Taxable Equivalent Basis)
Interest income:
Federal funds sold. . . . . . . $ 54 $ (75) $ (21) $ 262 $ (173) $ 89
Interest-bearing deposits . . . (73) (16) (89) 22 (37) (15)
Investment securities . . . . . (525) (2,175) (2,700) 369 (2,083) (1,714)
Loans . . . . . . . . . . . . . 2,411 (3,392) (981) 2,778 (3,909) (1,131)
------ ------- ------ ------ ------ -------
Totals . . . . . . . . . . . . 1,867 (5,658) (3,791) 3,431 (6,202) (2,771)
------ ------- ------ ------ ------ -------
Interest expense:
NOW accounts. . . . . . . . . . 248 (626) (378) 452 (899) (447)
Money market deposit
accounts . . . . . . . . . . . 211 (894) (683) 852 (1,752) (900)
Savings deposits. . . . . . . . 195 (435) (240) 508 (554) (46)
Certificates and other
time deposits. . . . . . . . . (684) (1,897) (2,581) 788 (3,085) (2,297)
Short-term borrowings. . . . (18) (297) (315) (1,179) (1,025) (2,204)
------ ------- ------ ------ ------ -------
Totals . . . . . . . . . . . . (48) (4,149) (4,197) 1,421 (7,315) (5,894)
------ ------- ------ ------ ------ -------
Change in net interest
income (fully taxable
equivalent basis) . . . . . . . $1,915 $(1,509) 406 $2,010 $1,113 3,123
------ ------- ------ ------
------ ------- ------ ------
Tax equivalent adjustment
using marginal rate
of 34%. . . . . . . . . . . . . (108) 130
------ -------
Change in net interest
income. . . . . . . . . . . . . $ 298 $3,253
------ -------
------ -------
Page 6
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STATISTICAL DATA (Continued)
INVESTMENT PORTFOLIO
The amortized cost, gross unrealized gains, gross unrealized losses and
approximate market value of the investment securities portfolio at the dates
indicated were:
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in Thousands)
Securities at December 31, 1993:
U.S. Treasury. . . . . . . . . $ 45,397 $ 654 $ 1 $ 46,050
Federal agencies . . . . . . . 53,452 691 62 54,081
State and municipal. . . . . . 44,866 1,211 55 46,022
Mortgage and other
asset-backed securities. . . 23,690 219 93 23,816
Federal Reserve stock. . . . . 307 307
Federal Home Loan Bank stock . 1,572 1,572
Corporate obligations. . . . . 36,959 581 87 37,453
--------- ------ -------- ---------
Totals . . . . . . . . . . . $ 206,243 $3,356 $ 298 $ 209,301
--------- ------ -------- ---------
--------- ------ -------- ---------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in Thousands)
Securities at December 31, 1992:
U.S. Treasury. . . . . . . . . $ 53,120 $ 1,348 $ 105 $ 54,363
Federal agencies . . . . . . . 66,778 1,544 85 68,237
State and municipal. . . . . . 33,203 911 76 34,038
Mortgage and other
asset-backed securities. . . 16,073 508 2 16,579
Federal Reserve stock. . . . . 307 307
Corporate obligations. . . . . 26,804 710 36 27,478
--------- ------ -------- ---------
Totals . . . . . . . . . . . $ 196,285 $ 5,021 $ 304 $ 201,002
--------- ------ -------- ---------
--------- ------ -------- ---------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in Thousands)
Securities at December 31, 1991:
U.S. Treasury. . . . . . . . . $ 52,851 $ 2,114 $ 54,965
Federal agencies . . . . . . . 70,081 2,877 $ 16 72,942
State and municipal. . . . . . 30,816 839 31,655
Mortgage and other
asset-backed securities. . . 27,916 1,186 10 29,092
Federal Reserve stock. . . . . 307 307
Corporate obligations. . . . . 27,319 819 9 28,129
--------- ------ -------- ---------
Totals . . . . . . . . . . . $ 209,290 $ 7,835 $ 35 $ 217,090
--------- ------ -------- ---------
--------- ------ -------- ---------
Page 7
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STATISTICAL DATA (Continued)
The maturity distribution and average yields for the investment securities
portfolio at December 31, 1993 were:
Within 1 Year 1-5 Years 5-10 Years Over 10 Years
------------- --------- ---------- -------------
Amount Yield* Amount Yield* Amount Yield* Amount Yield*
------ ------ ------ ------ ------ ------ ------ ------
(Dollars in Thousands)
U.S. Treasury. . . . . . . . . $25,216 5.66% $20,181 5.75%
Federal agencies . . . . . . . 8,959 7.05 41,993 5.33 $ 2,500 6.34%
State and Municipal. . . . . . 6,257 7.16 27,484 7.22 10,197 7.49 $ 928 6.94%
Mortgage and other
asset-backed
securities . . . . . . . . .
Federal Reserve stock. . . . .
Federal Home Loan Bank
stock. . . . . . . . . . . .
Corporate obligations. . . . . 5,518 6.81 30,552 6.09 549 5.20 340 7.98
------- -------- ------- -------
Totals . . . . . . . . . . . . $45,950 6.27% $120,210 6.03% $13,246 7.18% $ 1,268 7.22%
------- -------- ------- -------
------- -------- ------- -------
Mortgage and
Other Federal Home
Asset-Backed Federal Reserve Loan Bank
Securities Stock Stock Total Securities
-------------- --------------- -------------- ----------------
Amount Yield* Amount Yield* Amount Yield* Amount Yield*
------ ------ ------ ------ ------ ------ ------ ------
(Dollars in Thousands)
U.S. Treasury. . . . . . . . . $45,397 5.70%
Federal agencies . . . . . . . 53,452 5.67
State and Municipal. . . . . . 44,866 7.27
Mortgage and other
asset-backed
securities . . . . . . . . . $23,690 6.24% 23,690 6.24
Federal Reserve stock. . . . . $ 307 6.00% 307 6.00
Federal Home Loan Bank
stock. . . . . . . . . . . . 1,572 7.00% 1,572 7.00
Corporate obligations. . . . . 36,959 6.20
------- -------- ------- -------
Totals . . . . . . . . . . . . $23,690 6.24% $ 307 6.00% $ 1,572 7.00% $206,243 6.19%
------- -------- ------- -------
------- -------- ------- -------
<FN>
*Interest yields on state and municipal securities are presented on a fully
taxable equivalent basis using a 34% rate.
Page 8
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STATISTICAL DATA (Continued)
LOAN PORTFOLIO
TYPES OF LOANS
The loan portfolio at the dates indicated is presented below:
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(Dollars in Thousands)
Loans at December 31:
Commercial and
industrial loans . . . . . . $ 76,760 $ 70,959 $ 76,245 $ 70,254 $ 74,391
Bankers acceptances and loans
to financial institutions. . 3,000 9,496 2,092 9,927 4,476
Agricultural production
financing and other loans
to farmers . . . . . . . . . 5,591 6,240 6,887 5,449 6,874
Real estate loans:
Construction . . . . . . . . 8,127 2,619 3,191 3,512 2,248
Commercial and farmland. . . 58,235 52,402 51,323 41,789 37,618
Residential. . . . . . . . . 150,572 140,526 120,281 101,993 85,706
Individuals' loans for
household and other
personal expenditures. . . . 70,347 60,625 58,000 47,897 51,291
Tax-exempt loans . . . . . . . 1,474 2,402 2,309 2,938 3,819
Other loans. . . . . . . . . . 2,766 5,039 3,054 4,028 3,659
-------- -------- -------- -------- --------
Total loans . . . . . . . . $376,872 $350,308 $323,382 $287,787 $270,082
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES
Presented in the table below are the maturities of loans (excluding commercial
real estate, farmland, residential real estate and individuals' loans)
outstanding as of December 31, 1993. Also presented are the amounts due after
one year classified according to the sensitivity to changes in interest rates.
Maturing
---------------------------------------
Within 1-5 Over 5
1 Year Years Years Total
------ ----- ----- -----
(Dollars in Thousands)
Commercial and industrial loans. . . $ 39,602 $ 15,146 $ 22,012 $ 76,760
Banker acceptances and loans to
financial institutions . . . . . . 3,000 3,000
Agricultural production financing
and other loans to farmers . . . . 3,990 895 706 5,591
Real estate - Construction . . . . . 5,672 26 2,429 8,127
Tax-exempt loans . . . . . . . . . . 328 477 669 1,474
Other loans. . . . . . . . . . . . . 2,033 67 666 2,766
-------- -------- -------- --------
Totals. . . . . . . . . . . . . $ 54,625 $ 16,611 $ 26,482 $ 97,718
-------- -------- -------- --------
-------- -------- -------- --------
Page 9
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STATISTICAL DATA (Continued)
Maturing
----------------------
1-5 Over
Years 5 Years
----- -------
(Dollars in Thousands)
Loans maturing after one
year with:
Fixed rates. . . . . . . . . . . . $ 3,787 $ 4,036
Variable rate. . . . . . . . . . . 12,824 22,446
-------- --------
Totals . . . . . . . . . . . . . $ 16,611 $ 26,482
-------- --------
-------- --------
RISK ELEMENTS
December 31
---------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(Dollars in Thousands)
Nonaccruing loans. . . . . . . . $ 527 $ 493 $1,434 $1,178 $1,687
Loans contractually past due 90
days or more other than
nonaccruing . . . . . . . . . . 616 949 1,356 1,972 2,474
Restructured loans . . . . . . . 879 548 828 864 594
Nonaccruing loans are loans which are reclassified to a nonaccruing status when
in management's judgment the collateral value and financial condition of the
borrower do not justify accruing interest. Interest previously recorded but not
deemed collectible is reversed and charged against current income. Interest
income on these loans is then recognized when collected.
Restructured loans are loans for which the contractual interest rate has been
reduced or other concessions are granted to the borrower because of a
deterioration in the financial condition of the borrower resulting in the
inability of the borrower to meet the original contractual terms of the loans.
Interest income of $13,154 for the year ended December 31, 1993, was recognized
on the nonaccruing and restructured loans listed in the table above, whereas
interest income of $52,198 would have been recognized under their original loan
terms.
Potential problem loans:
Management has identified certain other loans totaling $4,760,200 as of December
31, 1993, not included in the risk element table, which are current as to
principal and interest, about which there are doubts as to the to the borrowers'
ability to comply with present repayment terms.
Page 10
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STATISTICAL DATA (Continued)
SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes the loan loss experience for the years indicated.
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(Dollars in Thousands)
Allowance for loan losses:
Balance at January 1 . . . . . . . $ 4,351 $ 3,867 $ 3,254 $ 2,915 $ 2,739
Addition resulting from
acqisition . . . . . . . . . . . 252
------- ------- ------- ------- -------
Chargeoffs:
Commercial . . . . . . . . . . . 391 588 806 614 914
Real estate mortgage . . . . . . 129 100 41 46
Installment. . . . . . . . . . . 388 552 511 590 383
------- ------- ------- ------- -------
Total chargeoffs. . . . . . . . 908 1,240 1,358 1,250 1,297
------- ------- ------- ------- -------
Recoveries:
Commercial . . . . . . . . . . . 240 215 227 195 255
Real estate mortgage . . . . . . 5 38 7 1
Installment. . . . . . . . . . . 98 114 84 98 63
------- ------- ------- ------- -------
Total recoveries. . . . . . . . 343 367 318 294 318
------- ------- ------- ------- -------
Net chargeoffs . . . . . . . . . . 565 873 1,040 956 979
------- ------- ------- ------- -------
Provisions for loan losses . . . . 1,014 1,357 1,401 1,295 1,155
------- ------- ------- ------- -------
Balance at December 31 . . . . . . $ 4,800 $ 4,351 $ 3,867 $ 3,254 $ 2,915
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of net chargeoffs during the
period to average loans
outstanding during the period . . .16% .26% .35% .35% .37%
Page 11
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STATISTICAL DATA (Continued)
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES AT DECEMBER 31:
Presented below is an analysis of the composition of the allowance for loan
losses and per cent of loans in each category to total loans:
1993 1992
---------------------- -----------------------
Amount Per Cent Amount Per Cent
------ -------- ------ --------
(Dollars in Thousands)
Balance at December 31:
Commercial, financial and
agricultural . . . . . . . . . . $ 2,187 23.4% $ 2,193 26.2%
Real estate - construction . . . . 2.2 .7
Real estate - mortgage . . . . . . 384 55.4 435 55.1
Installment. . . . . . . . . . . . 1,266 18.6 1,473 17.3
Tax-exempt loans . . . . . . . . . .4 .7
Unallocated. . . . . . . . . . . . 963 N/A 250 N/A
------- ------- ------- ------
Totals . . . . . . . . . . . . . . $ 4,800 100.0% $ 4,351 100.0%
------- ------- ------- ------
------- ------- ------- ------
1991 1990
---------------------- -----------------------
Amount Per Cent Amount Per Cent
------ -------- ------ --------
(Dollars in Thousands)
Balance at December 31:
Commercial, financial and
agricultural . . . . . . . . . . $ 2,127 27.3% $ 1,789 31.2%
Real estate - construction . . . . 1.0 1.2
Real estate - mortgage . . . . . . 193 53.1 163 50.0
Installment. . . . . . . . . . . . 1,547 17.9 1,302 16.6
Tax-exempt loans . . . . . . . . . 0.7 1.0
Unallocated. . . . . . . . . . . . N/A N/A
------- ------- ------- ------
Totals . . . . . . . . . . . . . . $ 3,867 100.0% $ 3,254 100.0%
------- ------- ------- ------
------- ------- ------- ------
1989
----------------------
Amount Per Cent
------ --------
(Dollars in Thousands)
Balance at December 31:
Commercial, financial and
agricultural . . . . . . . . . . $ 1,603 33.1%
Real estate - construction . . . . .8
Real estate - mortgage . . . . . . 146 45.7
Installment. . . . . . . . . . . . 1,166 19.0
Tax-exempt loans . . . . . . . . . 1.4
Unallocated. . . . . . . . . . . . N/A
------- ------
Totals . . . . . . . . . . . . . . $ 2,915 100.0%
------- ------
------- ------
Page 12
- --------------------------------------------------------------------------------
STATISTICAL DATA (Continued)
LOAN LOSS CHARGEOFF PROCEDURES
The Banks have weekly meetings at which loan delinquencies, maturities and
problems are reviewed. The Board of Directors receive and review reports on
loans monthly.
The Executive Committee of First Merchants' Board meets bimonthly to approve or
disapprove all new loans in excess of $1,000,000 and the Board reviews all
commercial loans in excess of $50,000 which were made or renewed during the
preceding month. Pendleton's and First United's loan committees, consisting of
all loan officers and the president, meet as required to approve or disapprove
any loan which is in excess of an individual loan officer's lending limit.
All chargeoffs are approved by the senior loan officer and are reported to the
Banks' Boards. The Banks charge off loans when a determination is made that all
or a portion of a loan is uncollectible or as a result of examinations by
regulators and the independent auditors.
PROVISION FOR LOAN LOSSES
In banking, loan losses are one of the costs of doing business. Although the
Banks' management emphasize the early detection and chargeoff of loan losses, it
is inevitable that at any time certain losses exist in the portfolio which have
not been specifically identified. Accordingly, the provision for loan losses is
charged to earnings on an anticipatory basis, and recognized loan losses are
deducted from the allowance so established. Over time, all net loan losses must
be charged to earnings. During the year, an estimate of the loss experience for
the year serves as a starting point in determining the appropriate level for the
provision. However, the amount actually provided in any period may be greater
or less than net loan losses, based on management's judgment as to the
appropriate level of the allowance for loan losses. The determination of the
provision in any period is based on management's continuing review and
evaluation of the loan portfolio, and its judgment as to the impact of current
economic conditions on the portfolio. The evaluation by management includes
consideration of past loan loss experience, changes in the composition of the
loan portfolio, and the current condition and amount of loans outstanding.
Page 13
- --------------------------------------------------------------------------------
STATISTICAL DATA (Continued)
DEPOSITS
The following table shows the average amount of deposits and average rate of
interest paid thereon for the years indicated.
1993 1992 1991
----------------- ----------------- ------------------
Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ -----
(Dollars in Thousands)
Balance at December 31:
Noninterest bearing deposits . . . . . $69,054 $ 60,274 $53,813
NOW accounts . . . . . . . . . . . . . 79,106 2.3% 70,068 3.1% 59,057 4.5%
Money market deposit accounts. . . . . 111,136 2.8 104,855 3.6 86,943 5.4
Savings deposits . . . . . . . . . . . 51,697 2.7 46,001 3.6 33,682 5.0
Certificates of deposit and
other time deposits. . . . . . . . . 206,833 4.4 220,328 5.3 207,807 6.7
-------- -------- --------
Total deposits . . . . . . . . . . . $517,826 3.0 $501,526 3.9 $441,302 5.2
-------- -------- --------
-------- -------- --------
As of December 31, 1993, certificates of deposit and other time deposits of
$100,000 or more mature as follows:
Maturing
------------------------------------------------
3 Months 3-6 6-12 Over 12
or less Months Months Months Total
-------- ------ ------ ------- ------
Certificates of deposit and
other time deposits. . . . . . . . . . $21,318 $10,009 $ 7,096 $38,423
Per cent . . . . . . . . . . . . . . . . 55% 26% 19% 100%
RETURN ON EQUITY AND ASSETS
1993 1992 1991
---- ---- ----
Return on assets (net income divided by
average total assets). . . . . . . . . . . . . . . 1.39% 1.29% 1.21%
Return on equity (net income divided by
average equity). . . . . . . . . . . . . . . . . . 13.01 12.71 12.41
Dividend payout ratio (dividends per
share divided by net income per share) . . . . . . 36.86 36.96 37.79
Equity to assets ratio (average equity
divided by average total assets) . . . . . . . . . 10.68 10.16 9.72
Page 14
- --------------------------------------------------------------------------------
STATISTICAL DATA (Continued)
SHORT-TERM BORROWINGS
1993 1992 1991
---- ---- ----
(Dollars in Thousands)
Balance at December 31:
Federal funds purchased. . . . . . . . . . . . . $ 5,300
Securities sold under repurchase
agreements. . . . . . . . . . . . . . . . . . 26,363 $ 27,340 $33,592
U.S. Treasury demand notes . . . . . . . . . . . 15,227 9,733 15,471
-------- -------- --------
Total short-term borrowings. . . . . . . . . $ 46,890 $ 37,073 $ 49,063
-------- -------- --------
-------- -------- --------
Securities sold under repurchase agreements are borrowings maturing within one
year and are secured by U. S. Government securities.
Pertinent information with respect to short-term borrowings is summarized below:
1993 1992 1991
---- ---- ----
(Dollars in Thousands)
Weighted average interest rate on outstanding
balance at December 31:
Securities sold under repurchase agreements. . . 2.86% 3.07% 4.39%
Total short-term borrowings. . . . . . . . . . . 2.88 3.00 4.27
Weighted average interest rate during the year:
Securities sold under repurchase agreements. . . 2.94 3.88 6.00
Total short-term borrowings . . . . . . . . . . 3.02 3.86 5.99
Highest amount outstanding at any month
end during the year:
Securities sold under repurchase agreements. . . $33,949 $39,949 $56,552
Total short-term borrowings. . . . . . . . . . . 51,130 49,141 74,849
Average amount outstanding during the year:
Securities sold under repurchase agreements. . . 22,882 23,518 41,185
Total short-term borrowings. . . . . . . . . . . 35,317 35,796 59,878
ITEM 2. PROPERTIES.
- -------------------------------------------------------------------------------
The headquarters of the Corporation and First Merchants are located in a five-
story building at 200 East Jackson Street, Muncie, Indiana. This building and
seven branch buildings are owned by First Merchants; six remaining branches of
First Merchants are located in leased premises. Four automated cash dispensers
are located in leased premises; one cash dispenser is located in premises that
are provided free of charge. All of the Corporation's and First Merchants'
facilities are located in Delaware and Madison Counties of Indiana. The
principal offices of Pendleton are located at 100 West State Street, Pendleton,
Indiana. Pendleton also operates three branches. All of Pendleton's properties
are owned by Pendleton and are located in Madison County, Indiana. The
principal offices of First United are located at 790 West Mill Street,
Middletown, Indiana. First United also operates two branches. All of First
United's properties are owned by First United and are
Page 15
- --------------------------------------------------------------------------------
ITEM 2. PROPERTIES (Continued)
located in Henry County, Indiana. None of the properties owned by the banks are
subject to any major encumbrances. The net investment of the Corporation and
subsidiaries in real estate and equipment at December 31, 1993 was $9,441,000.
ITEM 3. LEGAL PROCEEDINGS.
- -------------------------------------------------------------------------------
There is no pending legal proceeding, other than ordinary routine litigation
incidental to the business of the Corporation or its subsidiaries, of a material
nature to which the Corporation or its subsidiaries is a party or of which any
of their properties are subject. Further, there is no material legal proceeding
in which any director, officer, principal shareholder, or affiliate of the
Corporation, or any associate of any such director, officer or principal
shareholder, is a party, or has a material interest, adverse to the Corporation.
None of the routine legal proceedings, individually or in the aggregate, in
which the Corporation or its affiliates are involved are expected to have a
material adverse impact on the financial position or the results of operations
of the Corporation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -------------------------------------------------------------------------------
No matters were submitted during the fourth quarter of 1993 to a vote of
security holders, through the solicitation of proxies or otherwise.
Page 16
SUPPLEMENTAL INFORMATION - EXECUTIVE OFFICERS OF THE REGISTRANT.
- -------------------------------------------------------------------------------
The names, ages, and positions with the Corporation and subsidiary banks of all
executive officers of the Corporation are listed below.
Offices with the Corporation Principal Occupation
Name and Age And Subsidiary Banks During Past Five Years
------------ ---------------------------- ----------------------
Stefan S. Anderson Chairman of the Board and Chairman of the Board of
59 President, Corporation and the Corporation and
First Merchants First Merchants since
1987; President of First
Merchants since 1979 and
of the Corporation since
1982
Roger W. Gilcrest Executive Vice President Executive Vice President
56 and Director, First Merchants First Merchants since
July, 1988; Senior Vice
President, First Source
Bank prior to July,
1988; Director of First
Merchants since July
1992.
Paul R. Hoover Senior Vice President, Senior Vice President,
52 First Merchants First Merchants since
1987
Larry R. Helms Senior Vice President and Senior Vice President
53 General Counsel, Corporation; Corporation since 1982
Senior Vice President, First and First Merchants
Merchants; Director of First since 1979; Director
United; Director of Pendleton of First United and
Pendleton since 1992
Lowell E. Williams Senior Vice President, First Senior Vice President
62 Merchants First Merchants since
1979
James L. Thrash Senior Vice President and Chief Senior Vice President
44 Financial Officer, Corporation; and Chief Financial
Senior Vice President, Officer of the
First Merchants Corporation since 1990;
Chief Financial Officer,
Corporation prior to May
1990; Senior Vice
President, First
Merchants since 1990;
Vice President, First
Merchants prior to April
1990
Jack L. Demaree Senior Vice President and Senior Vice President,
45 Senior Commercial Loan Officer, First Merchants Bank
First Merchants since March 1992, Senior
Commercial Loan Officer,
First Merchants since
1987; Vice President,
First Merchants prior to
March 1992
Page 17
PART II
TEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 2
and 3 of the Corporation's 1993 Annual Report to Stockholders, "The Spirit of
Community Banking," under the caption "Stockholder Information," Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA.
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 1
of the Corporation's 1993 Annual Report to Stockholders, "Financial Review,"
under the caption "Five-Year Summary of Selected Financial Data," Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 2
through 6 of the Corporation's 1993 Annual Report to Stockholders, "Financial
Review," under the caption "Management's Discussion and Analysis," Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
- -------------------------------------------------------------------------------
The financial statements and supplementary data required under this item are
incorporated herein by reference to inside cover and pages 7 through 22 of the
Corporation's 1993 Annual Report to Stockholders, "Financial Review,"
Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
- -------------------------------------------------------------------------------
In connection with its audits for the two most recent fiscal years ended
December 31, 1993, there have been no disagreements with the Corporation's
independent certified public accountants on any matter of accounting principles
or practices, financial statement disclosure or audit scope or procedure, nor
have there been any changes in accountants.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
- -------------------------------------------------------------------------------
The information required under this item relating to directors is incorporated
by reference to the Corporation's 1994 Proxy Statement furnished to its
stockholders in connection with an annual meeting to be held March 31, 1994 (the
"1994 Proxy Statement"), under the caption "Election of Directors," which Proxy
Statement has been filed with the Commission. The information required under
this item relating to executive officers is set forth in Part I, "Supplemental
Information - Executive Officers of the Registrant" of this annual report on
Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the
Corporation's 1994 Proxy Statement, under the captions, "Compensation of
Directors" and "Compensation of Executive Officers," which Proxy Statement has
been filed with the Commission.
Page 18
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the
Corporation's 1994 Proxy Statement, under the caption, "Security Ownership of
Certain Beneficial Owners and Management," which Proxy Statement has been filed
with the Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the
Corporation's 1994 Proxy Statement, under the caption "Interest of Management in
Certain Transactions," which Proxy Statement has been filed with the Commission.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
- -------------------------------------------------------------------------------
Annual Report
"Financial Review" Form 10-K
Page Page
Number Number
----------------- -----------
(a)1. Financial Statements:
Independent auditor's report . . . . . . . . Inside 102
Cover
Consolidated balance sheet at December 31,
1993 and 1992 . . . . . . . . . . . . . . . 7 109
Consolidated statement of income, years
ended December 31, 1993, 1992 and 1991 . . 8 110
Consolidated statement of changes in
stockholders' equity, years ended
December 31, 1993, 1992 and 1991 . . . . . 9 111
Consolidated statement of cash flows, years
ended December 31, 1993, 1992 and 1991 . . 9-10 111-112
Notes to consolidated financial statements . 11-22 113-124
(a)2. Financial statement schedules:
All schedules are omitted because they are
not applicable or not required, or because
the required information is included in the
consolidated financial statements or
related notes.
(a)3. Exhibits:
Exhibit No: Description of Exhibit:
----------- -----------------------
3.1 Articles of Incorporation, dated September 20, 1982
and the Articles of Amendment thereto dated
March 13, 1985 and March 14, 1988 . . . . . . . 27-49
3.2 Bylaws and amendments thereto dated February 12,
1985, February 20, 1987, July 14, 1987,
December 8, 1987, December 13, 1988,
November 14, 1989, August 13, 1991, April 14,
1992, and February 15, 1994 . . . . . . . . . . 50-69
Page 19
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(Continued)
- -------------------------------------------------------------------------------
Form 10-K
Page
Exhibit No: Description of Exhibit: Number
----------- ----------------------- ----------
10.1 First Merchants Bank, National Association
Management Incentive Plan . . . . . . . . . (A)
10.2 Unfunded Deferred Compensation Plan,
as Amended . . . . . . . . . . . . . . . . (D)
10.3 Employee Stock Purchase Plan (1989) . . . . . (B)
10.4 1989 Stock Option Plan . . . . . . . . . . . (C)
10.5 Employee Stock Purchase Plan (1994) . . . . . 70-73
10.6 1994 Stock Option Plan . . . . . . . . . . . 74-78
13 1993 Annual Report to Stockholders (except
for the Pages and information thereof
expressly incorporated by reference in this
Form 10-K, the Annual Report to Stockholders
is provided solely for the information of
the Securities and Exchange Commission and
is not deemed "filed" as part of this Form
10-K) . . . . . . . . . . . . . . . . . . . 79-124
22 Subsidiaries of Registrant . . . . . . . . . 24
23 Consent of Independent Auditors . . . . . . . 25
99.1 Financial statements and independent
auditor's report for First Merchants
Corporation Employee Stock Purchase Plan . . 26
<FN>
(A) Incorporated by reference to Registrant's Registration Statement on
Form S-4 (SEC File No. 33-110) ordered effective on September 30, 1988.
(B) Incorporated by reference to Registrant's Registration Statement on
Form S-8 (SEC File No. 33-28900) effective on May 24, 1989.
(C) Incorporated by reference to Registrant's Registration Statement on
Form S-8 (SEC File No. 33-28901) effective on May 24, 1989.
(D) Incorporated by reference to Registrant's Form 10-K for year ended
December 31, 1990.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the three months ended December 31,
1993.
Page 20
- --------------------------------------------------------------------------------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 15th day of March,
1994.
FIRST MERCHANTS CORPORATION
By /s/ Stefan S. Anderson
---------------------------------
Stefan S. Anderson, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
on Form 10-K has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Capacity Date
- --------------------------- --------------------------- ------------------
/s/ Stefan S. Anderson Director and Chairman, March 15, 1994
- -------------------------- Principal Executive Officer
Stefan S. Anderson
/s/ Thomas B. Clark Director March 15, 1994
- ---------------------------
Thomas B. Clark
/s/ Michael L. Cox Director March 15, 1994
- ---------------------------
Michael L. Cox
/s/ Clell W. Douglass Director March 15, 1994
- ---------------------------
Clell W. Douglass
/s/ David A. Galliher Director March 15, 1994
- ---------------------------
David A. Galliher
/s/ Thomas K. Gardiner Director March 15, 1994
- ---------------------------
Thomas K. Gardiner
/s/ Hurley C. Goodall Director March 15, 1994
- ---------------------------
Hurley C. Goodall
/s/ John W. Hartmeyer Director March 15, 1994
- ---------------------------
John W. Hartmeyer
/s/ Nelson W. Heinrichs Director March 15, 1994
- ---------------------------
Nelson W. Heinrichs
Page 21
- --------------------------------------------------------------------------------
Signature Capacity Date
- --------------------------- --------------------------- ----------------
/s/ Jon H. Moll Director March 15, 1994
- ---------------------------
Jon H. Moll
/s/ Robert M. Smitson Director March 15, 1994
- --------------------------
Robert M. Smitson
Director March 15, 1994
- --------------------------
Joseph E. Wilson
Director March 15, 1994
- --------------------------
Robert F. Wisehart
/s/ John E. Worthen Director March 15, 1994
- --------------------------
John E. Worthen
/s/ James L. Thrash Principal Financial and March 15, 1994
- -------------------------- Principal Accounting
James L. Thrash Officer
Page 22
INDEX TO EXHIBITS
- --------------------------------------------------------------------------------
Form 10-K
Page
Exhibit No: Description of Exhibit: Number
----------- ----------------------- ---------
3.1 Articles of Incorporation, dated September 20,
1982 and the Articles of Amendment thereto dated
March 13, 1985 and March 14, 1988 . . . . . . . . 27-49
3.2 Bylaws and amendments thereto dated February 12,
1985, February 20, 1987, July 14, 1987,
December 8, 1987, December 13, 1988,
November 14, 1989, August 13, 1991, April 14,
1992, and February 15, 1994 . . . . . . . . . . . 50-69
10.1 First Merchants Bank, National Association
Management Incentive Plan . . . . . . . . . . . . (A)
10.2 Unfunded Deferred Compensation Plan,
as Amended . . . . . . . . . . . . . . . . . . . . (D)
10.3 Employee Stock Purchase Plan (1989) . . . . . . . . (B)
1989 Stock Option Plan . . . . . . . . . . . . . . (C)
10.5 Employee Stock Purchase Plan (1994) . . . . . . . . 70-73
10.6 1994 Stock Option Plan . . . . . . . . . . . . . . 74-78
13 1993 Annual Report to Stockholders (except
for the Pages and information thereof
expressly incorporated by reference in this
Form 10-K, the Annual Report to Stockholders
is provided solely for the information of
the Securities and Exchange Commission and
is not deemed "filed" as part of this Form
10-K) . . . . . . . . . . . . . . . . . . . . . . 79-124
22 Subsidiaries of Registrant . . . . . . . . . . . . 24
23 Consent of Independent Auditors . . . . . . . . . . 25
99.1 Financial statements and independent auditor's
report for First Merchants
Corporation Employee Stock Purchase Plan . . . . . 26
(A) Incorporated by reference to Registrant's Registration Statement on Form
S-4 (SEC File No. 33-110) ordered effective on September 30, 1988.
(B) Incorporated by reference to Registrant's Registration Statement on Form
S-8 (SEC File No. 33-28900) effective on May 24, 1989.
(C) Incorporated by reference to Registrant's Registration Statement on Form
S-8 (SEC File No. 33-28901) effective on May 24, 1989.
(D) Incorporated by reference to Registrant's Form 10-K for year ended
December 31, 1990.
Page 23
- --------------------------------------------------------------------------------
EXHIBIT 22--SUBSIDIARIES OF THE REGISTRANT
- -------------------------------------------------------------------------------
State of
Name Incorporation
---- -------------
First Merchants Bank, National Association. . . . . . . . . . U.S.
Pendleton Banking Company . . . . . . . . . . . . . . . . . . Indiana
First United Bank . . . . . . . . . . . . . . . . . . . . . . Indiana
Page 24
- --------------------------------------------------------------------------------
EXHIBIT 23--CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
We hereby consent to the incorporation by reference to Registration Statements
on Form S-8, File Numbers 33-28900 and 33-28901, of our report dated January 21,
1994 on the consolidated financial statements of First Merchants Corporation,
which report is incorporated by reference in the Annual Report on Form 10-K of
First Merchants Corporation.
/s/ GEO S. OLIVE & CO.
Indianapolis, Indiana
March 18, 1994
Page 25
- --------------------------------------------------------------------------------
EXHIBIT 99.1--FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT FOR
FIRST MERCHANTS CORPORATION EMPLOYEE STOCK PURCHASE PLAN
- --------------------------------------------------------------------------------
The annual financial statements and independent auditor's report thereon for
First Merchants Corporation Employee Stock Purchase Plan for the year ending
June 30, 1994, will be filed as an amendment to the 1993 Annual Report on Form
10-K no later than October 28, 1994.
Page 26