Regulatory Capital

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Regulatory Capital

REGULATORY CAPITAL

The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category.  The assigned capital category is largely determined by three ratios that are calculated according to the regulations: total risk adjusted capital, Tier 1 capital, and Tier 1 leverage ratios. The ratios are intended to measure capital relative to assets and credit risk associated with those assets and off-balance sheet exposures of the entity.  The capital category assigned to an entity can also be affected by qualitative judgments made by regulatory agencies about the risk inherent in the entity's activities that are not part of the calculated ratios.

There are five capital categories defined in the regulations, ranging from well capitalized to critically undercapitalized. Classification of a bank in any of the undercapitalized categories can result in actions by regulators that could have a material effect on a bank's operations.

At December 31, 2012, the management of the Corporation believes that it meets all capital adequacy requirements to which it is subject. The most recent notifications from the regulatory agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well capitalized, a bank must maintain a minimum total capital to risk-weighted assets, Tier I capital to risk-weighted assets and Tier I capital to average assets of 10 percent, 6 percent and 5 percent, respectively.  It should be noted that a bank's capital category is determined solely for the purpose of applying the OCC's "prompt corrective action" regulations and that the capital category may not constitute an accurate representation of the Bank's overall financial condition or prospects.

Actual and required capital amounts and ratios are listed below.

	2012								2011
					Required For								Required For
	Actual				Adequate Capital				Actual				Adequate Capital
December 31,	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-weighted Assets)
First Merchants Corporation	$	526,792	16.34	%	$	257,927	8.00	%	$	487,393	16.54	%	$	235,781	8.00	%
First Merchants Bank	515,337		16.01		257,446		8.00		477,805		16.26		235,089		8.00
Tier I Capital (to Risk-weighted Assets)
First Merchants Corporation	$	456,132	14.15	%	$	128,964	4.00	%	$	410,132	13.92	%	$	117,890	4.00	%
First Merchants Bank	474,782		14.75		128,723		4.00		440,909		15.00		117,545		4.00
Tier I Capital (to Average Assets)
First Merchants Corporation	$	456,132	11.03	%	$	165,460	4.00	%	$	410,132	10.17	%	$	161,350	4.00	%
First Merchants Bank	474,782		11.50		165,124		4.00		440,909		10.96		160,848		4.00