## 2003 YEAR IN REVIEW 

## january 

## FMC FORMS MERCHANTS TRUST COMPANY, EFFECTIVE JANUARY 1 

First Merchants Corporation formed Merchants Trust Company, a wholly- owned subsidiary of First Merchants Corporation, effective January 1, 2003. The new company unites the trust and asset management services of all affiliate banks of the Corporation and represents one of the largest trust companies in the State of Indiana. 

Mr. Cox said, “In forming Merchants Trust Company, we remain true to our commitment of partnering with local community banks to provide the personal service that our customers desire. The efficiencies gained in combining our trust services will give us greater resources in investment management, estate planning, retirement plan services, and state-of-the-art operating systems.” 

## february 

## NOMINATING & GOVERNANCE COMMITTEE FORMED 

The Board of Directors for First Merchants Corporation established a Nominating and Governance Committee to ensure the continuation of a high quality and independent Board of Directors. 

The Committee, which is composed entirely of independent directors, will provide oversight to ensure that the governance structure and processes of First Merchants Corporation are in compliance with applicable law and regulation, including rules issued by the SEC and NASDAQ. 

## july 

## RECORD QUARTER AS EARNINGS PER SHARE REACH $.50 

First Merchants Corporation reported that second quarter 2003 diluted earnings per share increased 4.2% to $.50, up from $.48 in the prior year. Net income increased $805,000, or 10.1%, from $7,940,000 to $8,745,000 during the same period. 

Year-to-date diluted earnings reached $.84 per share compared to $.89 in 2002. Year-to-date net income increased $990,000, or 7.4%, from $13,413,000 to $14,403,000. 

Total assets reached $3.1 billion as total loans outstanding reached $2.3 billion, an increase of $365 million, or 18.5%. 

## august 

## 21ST CONSECUTIVE ANNUAL DIVIDEND INCREASE 

First Merchants Corporation announced that its Board of Directors declared a 5% share dividend to its shareholders of record on August 29, 2003, payable on September 12, 2003. The Board also declared a $.23 per share cash dividend to shareholders of record on September 5, 2003, payable on September 19, 2003. The $.23 per share cash dividend is consistent with prior quarters and affords to shareholders of record on August 29, 2003, an effective 5% increase by virtue of the stock dividend. 

Michael L. Cox, President and Chief Executive Officer, commented, “First Merchants Corporation has consistently produced a return to its shareholders through dividends and price appreciation that is attractive in today’s capital markets. We are pleased to continue our record of consecutive dividend increases to the 21st year. 

## october 

## FIRST DIRECTORS’ RETREAT HELD 

First Merchants Corporation hosted its first Directors’ Retreat in October 2003. Over eighty affiliate Directors participated in the meeting at Minnetrista Cultural Center in Muncie, Indiana. Michael L. Cox, President and Chief Executive Officer, and Roger Arwood, Chief Operating Officer, were featured guest speakers who presented the Corporate strategic plan to the Directors. Presentations were also made by regulators of the banking industry, providing continued education to the Directors. 

## november 

## SUCCESSFUL INTEGRATION OF LAFAYETTE BANK AND TRUST 

First Merchants Corporation completed the integration of Lafayette Bank and Trust Company’s core processing system. Michael L. Cox, President and Chief Executive Officer, commented that this data integration project, which took six months in planning and execution, “was a huge undertaking with near flawless completion.” 

## december 

## SIX STATE CHARTERS CONVERTED TO NATIONAL CHARTERS 

In order to bring consistency of application and interpretation of all applicable banking regulations, First Merchants Corporation successfully converted six state bank charters to national charters effective January 1, 2004. All ten of the Corporation’s banks are now nationally chartered and regulated by the Office of the Comptroller of the Currency and the Federal Reserve System. 

