FIRST MERCHANTS CORPFRME
FIRST MERCHANTS CORP Debt Disclosure
BORROWINGS
The following table summarizes the Corporation’s borrowings as of December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Federal funds purchased | $ | 40,000 | $ | 99,226 | |||||||
| Securities sold under repurchase agreements | 103,755 | 142,876 | |||||||||
| Federal Home Loan Bank advances | 798,549 | 822,554 | |||||||||
| Subordinated debentures and other borrowings | 57,630 | 93,529 | |||||||||
| Total borrowings | $ | 999,934 | $ | 1,158,185 | |||||||
Securities sold under repurchase agreements consist of obligations of the Bank to other parties and are secured by U.S. Government-Sponsored Enterprise obligations. The maximum amount of outstanding agreements at any month-end during 2025 and 2024 totaled $169.1 million and $194.2 million, respectively, and the average of such agreements totaled $127.9 million and $136.0 million during 2025 and 2024, respectively.
Transfers Accounted For As Secured Borrowings
The collateral pledged for all repurchase agreements that are accounted for as secured borrowings as of December 31, 2025 and 2024 were:
| December 31, 2025 | |||||||||||||||||||||||||||||
| Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||
| Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater Than 90 Days | Total | |||||||||||||||||||||||||
| U.S. Government-sponsored mortgage-backed securities | $ | 103,755 | $ | — | $ | — | $ | — | $ | 103,755 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||
| Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater Than 90 Days | Total | |||||||||||||||||||||||||
| U.S. Government-sponsored mortgage-backed securities | $ | 142,876 | $ | — | $ | — | $ | — | $ | 142,876 | |||||||||||||||||||
Contractual maturities of borrowings as of December 31, 2025, are as follows:
| Maturities in Years Ending December 31: | Federal Funds Purchased | Securities Sold Under Repurchase Agreements | Federal Home Loan Bank Advances | Subordinated Debentures and Term Loans | |||||||||||||||||||
| 2026 | $ | 40,000 | $ | 103,755 | $ | 75,000 | $ | 1,095 | |||||||||||||||
| 2027 | — | — | 320,000 | — | |||||||||||||||||||
| 2028 | — | — | 290,000 | — | |||||||||||||||||||
| 2029 | — | — | 50,000 | — | |||||||||||||||||||
| 2030 | — | — | — | — | |||||||||||||||||||
| 2031 and after | — | — | 63,549 | 60,375 | |||||||||||||||||||
| ASC 805 fair value adjustments at acquisition | — | — | — | (3,840) | |||||||||||||||||||
| $ | 40,000 | $ | 103,755 | $ | 798,549 | $ | 57,630 | ||||||||||||||||
At December 31, 2025, the outstanding FHLB advances had interest rates from 0.00 to 4.56 percent and are subject to restrictions or penalties in the event of prepayment. The total available remaining borrowing capacity from the FHLB at December 31, 2025, was $819.9 million. As of December 31, 2025, the Corporation had $280.0 million of putable advances with the FHLB.
Subordinated Debentures and Term Loans. As of December 31, 2025 and 2024, subordinated debentures and term loans totaled $57.6 million and $93.5 million, respectively.
•First Merchants Capital Trust II (“FMC Trust II”). At December 31, 2025 and 2024, the Corporation had $41.7 million of subordinated debentures issued to FMC Trust II, a wholly-owned statutory business trust. FMC Trust II was formed in July 2007 for purposes of issuing trust preferred securities to investors. At that time, it simultaneously issued and sold its common securities to the Corporation, which constituted all of the issued and outstanding common securities of FMC Trust II. The subordinated debentures, which were purchased with the proceeds of the sale of the trust’s capital securities, are the sole assets of FMC Trust II and are fully and unconditionally guaranteed by the Corporation. As of December 31, 2025 and 2024, the subordinated debentures and trust preferred securities bear interest at a variable rate equal to the three-month CME Term Secured Overnight Financing Rate published by the Chicago Mercantile Exchange Group (“CME Term SOFR”), plus the 0.26161 percent spread adjustment. The interest rate at December 31, 2025 and 2024, was 5.54 percent and 6.18 percent, respectively. The trust preferred securities are currently redeemable at par and without penalty, subject to the Corporation having first redeemed the related subordinated debentures, with the prior approval of the Federal Reserve if then required under applicable capital guidelines or policies. The trust preferred securities and the subordinated debentures of FMC Trust II will mature on September 15, 2037. The Corporation continues to hold all outstanding common securities of FMC Trust II.
•Ameriana Capital Trust I. At December 31, 2025 and 2024, the Corporation had $10.3 million of subordinated debentures issued to Ameriana Capital Trust I. On December 31, 2015, the Corporation acquired Ameriana Capital Trust I in conjunction with its acquisition of Ameriana Bancorp, Inc. With a trust preferred structure substantially similar to that described above for FMC Trust II, the subordinated debentures held by Ameriana Capital Trust I were purchased with the proceeds of the sale of the trust’s capital securities. As of December 31, 2025 and 2024, the subordinated debentures and trust preferred securities bear interest at a variable rate equal to the three-month CME Term SOFR, plus the 0.26161 percent spread adjustment. The interest rate at December 31, 2025 and 2024 was 5.48 percent and 6.12 percent, respectively. The trust preferred securities of Ameriana Capital Trust I are currently redeemable at par and without penalty, subject to the Corporation having first redeemed the related subordinated debentures, with the prior approval of the Federal Reserve if then required under applicable capital guidelines or policies. The trust preferred securities and the subordinated debentures of Ameriana Capital Trust I will mature in March 2036. The Corporation continues to hold all of the outstanding common securities of Ameriana Capital Trust I.
•First Merchants Senior Notes and Subordinated Notes. On November 1, 2013, the Corporation completed the private issuance and sale to four institutional investors of an aggregate of $70 million of debt comprised of (a) 5.00 percent Fixed-to-Floating Rate Senior Notes due 2028 in the aggregate principal amount of $5 million (the “Senior Debt”) and (b) 6.75 percent Fixed-to-Floating Rate Subordinated Notes due 2028 in the aggregate principal amount of $65 million (the “Subordinated Debt”). The interest rate on the Senior Debt and Subordinated Debt remained fixed for the first ten (10) years and converted to floating on October 30, 2023 at which time the optional redemption provisions of both instruments became effective. During the year ended December 31, 2024, the Corporation exercised its option to redeem $65 million in principal, fully repaying the Subordinated Debt on the scheduled interest payment dates.
As of December 31, 2024, the Senior Debt had an annual floating rate equal to three-month CME Term SOFR, plus the 0.26161 percent spread adjustment, plus 2.345 percent, resulting in an interest rate of 7.18 percent. The Senior Debt agreement contained certain customary representations and warranties and financial and negative covenants. As of December 31, 2024 the Corporation was in compliance with these covenants. During the third quarter of 2025, the Corporation exercised its rights to redeem the $5.0 million in principal and paid the Senior Debt on the scheduled interest payment date. No principal amount remains outstanding related to the Senior Debt as of December 31, 2025.
•Level One Subordinated Notes. On April 1, 2022, the Corporation assumed certain subordinated notes in conjunction with its acquisition of Level One. The $30.0 million of subordinated notes issued on December 18, 2019 bear a fixed interest rate of 4.75 percent per annum, payable semiannually through December 18, 2024. The notes had a floating interest rate equal to the three-month CME Term SOFR plus 3.11 percent, payable quarterly, after December 18, 2024 through maturity. The Corporation had the option to redeem any or all of the subordinated notes without premium or penalty any time after December 18, 2024 or upon the occurrence of a tier 2 capital event or tax event. During the first quarter of 2025, the Corporation exercised its rights to redeem $30.0 million in principal and paid the debt in full on the scheduled interest payment date. The redemption was permitted under the optional redemptions provisions of the subordinated notes. No principal amount remains outstanding related to the subordinated notes as of December 31, 2025.
•Other Borrowings. On April 1, 2022, the Corporation acquired a secured borrowing in conjunction with its acquisition of Level One. The secured borrowing related to a certain loan participation sold by Level One that did not qualify for sales treatment. The secured borrowing bears a fixed rate of 1.00 percent and had a balance of $1.1 million as of December 31, 2025 and 2024. During the third quarter of 2023, the Corporation acquired a secured borrowing in conjunction with the purchase of the Indianapolis regional headquarters building. The secured borrowing bears a fixed interest rate of 3.41 percent, has a maturity date of March 2035, and had a balance of $7.0 million and $7.1 million as of December 31, 2025 and 2024, respectively.
Line of Credit. As of December 31, 2025 and 2024, there was no outstanding balance on the line of credit.
•U.S. Bank, N.A. On September 30, 2024, the Corporation entered into a Credit Agreement with U.S. Bank, N.A. Under the terms of the Credit Agreement, U.S. Bank, N.A. has provided the Corporation with a revolving line of credit (“Credit Facility”) of up to $75.0 million. The outstanding principal balance under the Credit Facility bears interest at a variable rate equal to the one-month CME Term SOFR rate plus 2.25 percent. Interest on the outstanding balance is payable quarterly. Additionally, the Corporation is subject to a non-refundable facility fee equal to 0.40 percent per annum on the average daily unused amount of the Credit Facility, payable quarterly. The Credit Agreement contains customary representations, warranties and covenants. During the third quarter of 2025, the Corporation amended the Credit Facility to extend the termination date from September 30, 2025 to September 29, 2026. As of December 31, 2025 and 2024, the Corporation's outstanding principal balance under the Credit Facility was zero and the Corporation was in compliance with all covenants.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.