First Merchants Announces First Quarter 2026 Earnings Per Share

First Quarter 2026 Highlights:

• Net income available to common stockholders was $27.7 million, or $0.45 per diluted share, compared to $56.6 million, or $0.99 per diluted share, in the fourth quarter of 2025. On an adjusted basis1, net income totaled $63.1 million, or $1.03 per diluted share, compared to $56.4 million, or $0.98 per diluted share, in the prior quarter.
• Completed legal closing on the acquisition of First Savings Financial Group, Inc. ("First Savings") on February 1, 2026.
• Maintained strong capital position with Common Equity Tier 1 Capital Ratio of 11.22%.
• Repurchased 708,856 shares totaling $27.6 million of common stock year-to-date, including 640,486 shares totaling $24.9 million in the first quarter.
• Loans declined $18.8 million, or 0.5% annualized linked quarter, and increased $768.0 million, or 5.9%, during the last twelve months, excluding $1.8 billion of loans added from the First Savings acquisition.
• Deposits declined $499.4 million, or 13.1% annualized linked quarter, and increased $333.5 million, or 2.3%, during the last twelve months, excluding $1.7 billion of deposits added from the First Savings acquisition.
• Nonperforming assets to total assets were 43 basis points compared to 38 basis points in the prior quarter.
• Adjusted efficiency ratio1 totaled 54.21% for the quarter.

"First Merchants delivered a strong start to 2026, highlighted by solid adjusted earnings growth, expanding net interest margin, and continued strength in commercial loan production," said Mark Hardwick, Chief Executive Officer. "We successfully closed the acquisition of First Savings, adding $2.4 billion in assets and further strengthening our statewide Indiana presence while enhancing our ability to serve clients across Indiana, Ohio, and Michigan. Our capital, liquidity, and credit quality remain very strong, positioning us well for continued growth and long-term shareholder value creation."

First Quarter Financial Results:

The Corporation reported first quarter 2026 net income available to common stockholders of $27.7 million compared to $54.9 million during the same period in 2025. Diluted earnings per common share1 for the period totaled $0.45 compared to $0.94 in the first quarter of 2025. Current quarter results included acquisition costs of $17.0 million that primarily consist of employee retention bonuses and severance, contract termination charges and professional fees. Current quarter results also included a mark-to-market loss of $29.8 million on $357 million of mortgage loans moved to held-for-sale with a weighted average coupon of 3.46%. The loan sale is expected to close during the second quarter and will create incremental funding capacity. Excluding these non-core charges, adjusted earnings per common share1 for the first quarter of 2026 totaled $1.03 compared to $0.94 in the prior year period, an increase of 9.6%.

Total assets of the Corporation equaled $21.1 billion as of quarter-end and loans totaled $15.3 billion. Loans increased $2.3 billion during the past twelve months. The acquisition of First Savings contributed $1.8 billion of loans. Excluding acquired loans and the impact of loans moved to held-for-sale, the Corporation experienced organic loan growth of $768.0 million, or 5.9%, during the past twelve months. On a linked quarter basis, loans declined $18.8 million, or 0.5% annualized.

Investment securities, totaling $3.3 billion, decreased $117.2 million, or 3.4%, during the last twelve months and decreased $68.7 million, or 8.1% annualized on a linked quarter basis. Investments declined during the quarter due to principal paydowns and maturities as well as a modest decline in the securities portfolio valuation.

Total deposits equaled $16.5 billion as of quarter-end and increased by $2.0 billion, over the past twelve months. The acquisition of First Savings contributed $1.7 billion in deposits. Excluding acquired deposits, the Corporation experienced an increase in organic deposit growth of $333.5 million, or 2.3%. Deposits decreased $499.4 million, or 13.1% annualized on a linked quarter basis, excluding acquired deposits. The balance sheet growth resulted in an increase in the loan to deposit ratio to 92.6% at period end from 90.3% in the prior quarter.

The Corporation's Allowance for Credit Losses - Loans (ACL) totaled $212.5 million as of quarter-end, or 1.39% of loans, an increase of $16.9 million from prior quarter. The ACL increased $22.3 million for the purchase accounting adjustment for estimated credit losses recorded for the First Savings loan portfolio. Net charge-offs totaled $10.3 million and provision for credit losses of $4.9 million was recorded during the quarter. Reserves for unfunded commitments totaled $18.5 million, an increase of $0.5 million from prior quarter recorded for estimated credit losses on unfunded commitments of First Savings. Non-performing assets to total assets were 0.43% for the first quarter of 2026, an increase of five basis points compared to 0.38% in the prior quarter reflecting stable credit performance.

Net interest income totaling $151.3 million for the quarter, increased $12.2 million, or 8.8%, compared to prior quarter and increased $21.0 million, or 16.1%, compared to the first quarter of 2025. Positively impacting net interest income was an interest recovery of $1.2 million recorded during the quarter from the successful resolution of a nonaccrual multifamily commercial real estate loan. Fully taxable equivalent net interest margin was 3.35%, an increase of six basis points compared to prior quarter and an increase of 13 basis points compared to the first quarter of 2025. The lower day count in the quarter caused a decline of five basis points in net interest margin from the prior quarter. This was more than offset by an improved funding mix and meaningfully lower deposit costs.

Noninterest income totaled $5.8 million for the quarter, a decrease of $27.3 million, compared to prior quarter and a decrease of $24.2 million compared to the first quarter of 2025. The declines were due to a valuation adjustment on mortgage loans that were reclassified to held-for-sale during the current quarter. Customer-related fees increased by $1.8 million from the previous quarter and $4.7 million over the first quarter of 2025. The linked quarter increase was driven by higher wealth management fees and higher gains on the sales of loans offset by a slight reduction in derivative hedge fees.

Noninterest expense totaled $125.1 million for the quarter, an increase of $25.6 million from the fourth quarter of 2025 and an increase of $32.2 million from the first quarter of 2025. Acquisition-related costs totaling $17.0 million were incurred during the quarter, including $5.2 million attributed to salaries and benefits and $11.3 million in professional and other outside services. Contributing to current quarter expenses was an annual benefit plan expense of $1.1 million and a $0.9 million one-time charge for the write-down of a held-for-sale building.

The Corporation's total risk-based capital ratio was 13.05%, common equity tier 1 capital ratio was 11.22%, and the tangible common equity ratio was 9.00%. These ratios continue to reflect the Corporation's strong capital position.

1 See "Non-GAAP Financial Information" for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct an earnings conference call and webcast at 9:00 a.m. (ET) on Thursday, April 23, 2026.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register-conf.media-server.com/register/BIea2e66c5a6e240dea7770076185c1054)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/i5u3npdn) during the time of the call. A replay of the webcast will be available until April 23, 2027.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporation's common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company's Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This news release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like "believe", "continue", "pattern", "estimate", "project", "intend", "anticipate", "expect" and similar expressions or future or conditional verbs such as "will", "would", "should", "could", "might", "can", "may", or similar expressions. These forward- looking statements include, but are not limited to, statements relating to the expected benefits of the merger between First Merchants and First Savings, including future financial and operating results, cost savings, enhanced revenues, and accretion/dilution to reported earnings that may be realized from the merger, as well as other statements of expectations regarding the merger, and other statements of First Merchants' goals, intentions and expectations; statements regarding the First Merchants' business plan and growth strategies; statements regarding the asset quality of First Merchants' loan and investment portfolios; and estimates of First Merchants' risks and future costs and benefits, whether with respect to the merger or otherwise. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: the risk that the businesses of First Merchants and First Savings will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; revenues following the merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the merger; the ability to complete the merger on the expected timeframe; possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit-worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants' affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity (including the ability to grow and maintain core deposits and retain large uninsured deposits), credit and interest rate risks associated with First Merchants' business; the impacts of epidemics, pandemics or other infectious disease outbreaks; and other risks and factors identified in each of First Merchants' filings with the SEC. Neither First Merchants nor First Savings undertakes any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release. In addition, the companies' respective past results of operations do not necessarily indicate their anticipated future results, whether or not the merger is completed.

Non-GAAP Financial Measures

This news release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, First Merchants Corporation has provided reconciliations within this news release, as necessary, of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

For more information, contact:
Nicole M. Weaver, First Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com

(1) Total brokered deposits of $1.5 billion, which includes brokered CD's of $593.0 million at March 31, 2026.