Second Mortgage Loan Commercial

First Merchants 2Q Profit Falls

First Merchants Corp., which operates banks in Indiana and Ohio, said Monday its second-quarter earnings decreased 8 percent, due to a decline in mortgage loans sales and rising rates on commercial checking accounts.

Quarterly net income fell to $7.3 million, or 39 cents per share, from $7.9 million, or 43 cents per share during the same period last year. The results include a charge of $290,000, or 1 cent per share, related to the disposition of fixed assets from a branch closing.

Net interest income, or earnings from interest on deposits and loans, fell less than 1 percent to $27.8 million, from $27.9 million in the same period in 2005.

First Merchants blamed the decline on a challenging interest-rate climate.

The Federal Reserve has raised short-term interest rates 17 consecutive times to 5.25 percent, the highest level since April 2001, while long-term rates have remained fairly stagnant.