FRMEP · First Merchants Corporation

First Merchants Corporation's Q1 2026 results reflect a transformative quarter marked by the February 1 closing of the First Savings Financial Group acquisition, adding $2.4 billion in assets, $1.8 billion in loans, and $1.7 billion in deposits, bolstering its Indiana presence and Midwest footprint across Ohio and Michigan. Reported net income of $27.7 million and $0.45 diluted EPS were pressured by $17.0 million in acquisition costs (employee retention, severance, professional fees) and a $29.8 million mark-to-market loss on $357 million of low-coupon (3.46%) mortgage loans shifted to held-for-sale, expected to close in Q2 for funding capacity. Adjusted figures show robust performance with $63.1 million net income and $1.03 EPS, up 9.6% YoY. Net interest income rose 8.8% linked quarter to $151.3 million, driving a 3.35% fully taxable equivalent margin (up 6 bps), aided by improved funding mix, lower deposit costs, and a $1.2 million interest recovery on a resolved nonaccrual loan, despite fewer days. Organic loan growth of 5.9% LTM ($768 million) and deposit growth of 2.3% LTM ($333.5 million) excluding acquisition underscore core strength, with loan-to-deposit ratio expanding to 92.6%. Credit quality held firm with ACL at 1.39% of loans ($212.5 million), nonperformers at 0.43% of assets (up 5 bps), net charge-offs $10.3 million, and provision $4.9 million. Capital remains robust at 11.22% CET1 and 9.00% tangible common equity. Share repurchases of $27.6 million YTD signal confidence. CEO Mark Hardwick highlighted adjusted earnings growth, NIM expansion, commercial production, and strategic positioning for growth. Earnings call set for April 23, 2026.