First Merchants Corporation Announces Third Quarter 2026 Results

MUNCIE, Ind., Oct. 21, 2026 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) (the "Corporation" or "First Merchants")

Third Quarter 2026 Highlights:

• Net income available to common stockholders was $67.8 million, or $1.09 per diluted common share, compared with $43.5 million, or $0.70 per diluted common share, in the second quarter of 2026 and $56.3 million, or $0.98 per diluted common share in the third quarter of 2025.
• Adjusted pre-tax, pre-provision income¹ of $83.7 million, compared to $84.6 million in the prior quarter and $70.5 million in the third quarter of 2025.
• Net interest margin on a fully taxable equivalent basis¹ of 3.44%, up 6 basis points from the prior quarter and up 20 basis points from the third quarter of 2025.
• Loan growth of $70.2 million, or 1.8% annualized, on a linked quarter basis.
• Deposit growth of $175.6 million, or 4.2% annualized, on a linked quarter basis.
• Robust capital position with Common Equity Tier 1 Capital Ratio of 11.22%.
• Completed $100 million subordinated debt issuance in late September.
• Repurchased 1,264,062 shares of common stock totaling $50.3 million year-to-date, including 287,431 shares totaling $12.0 million in the third quarter.
• Nonperforming assets to total assets were 57 basis points compared to 56 basis points on a linked quarter basis.
• Efficiency ratio¹ totaled 54.55% for the quarter.
• Announced the planned CEO transition: President Mike Stewart will succeed Mark Hardwick as Chief Executive Officer upon Mr. Hardwick’s retirement at year-end 2026.

"First Merchants delivered strong third quarter results. Earnings per diluted share were $1.09, up 11 percent from the third quarter of last year, fully taxable equivalent net interest margin¹ rose 6 basis points to 3.44 percent, and deposit growth was solid," said Mark Hardwick, Chief Executive Officer. "We made meaningful progress resolving the two commercial credits identified last quarter, and nonperforming assets remained stable. Our capital position remains very strong and we continue to return capital to shareholders through dividends and share repurchases."

"As I approach my retirement at year-end, I am grateful to our 2,200 teammates for their dedication and to our clients and shareholders for the trust they have placed in us during my 29 years with First Merchants. I have great confidence in Mike Stewart and our leadership team, and I believe First Merchants is well positioned for continued success as they build on our Midwestern strength, deepen our client relationships and continue helping the communities we serve prosper."

Third Quarter Financial Results:

The Corporation reported net income available to common stockholders of $67.8 million for the third quarter of 2026, compared with $56.3 million in the third quarter of 2025. Diluted earnings per common share were $1.09, compared with $0.98 a year earlier. Current quarter results included acquisition-related costs of $0.9 million that consisted primarily of equipment and professional fees. Excluding these non-core charges, adjusted earnings per diluted common share¹ for the third quarter of 2026 totaled $1.10 compared to $0.99 in the prior-year period.

For the nine months ended September 30, 2026, net income available to common stockholders totaled $139.0 million, or $2.24 per diluted common share, compared with $167.5 million, or $2.90 per diluted common share in the prior-year period. Adjusted net income available to common stockholders¹ was $178.0 million, or $2.87 per diluted common share, compared with $168.2 million, or $2.91 per diluted common share, a year earlier. Nine-month adjusted earnings exclude $21.7 million of acquisition-related expenses and the $29.8 million negative valuation adjustment recorded in the first quarter on $271.1 million of mortgage loans sold, resulting in total adjustments of $51.4 million before tax and $39.0 million after tax.

Total assets of the Corporation equaled $21.1 billion as of quarter-end and loans totaled $15.6 billion. Loans increased $2.0 billion during the last twelve months and $70.2 million on a linked quarter basis. Excluding loans acquired through First Savings Financial Group, Inc. (“First Savings”) and the impact of mortgage loan sale activity in the first quarter of 2026, the Corporation generated organic loan growth of $473.7 million, or 3.5% during the past twelve months.

Investment securities, totaling $3.1 billion, decreased $257.9 million, or 7.6% during the last twelve months and decreased $167.6 million on a linked quarter basis. Investment securities declined during the quarter due to principal paydowns and maturities, and a decline in the securities portfolio valuation due to increases in interest rates.

Total deposits equaled $16.9 billion as of quarter-end and increased by $2.1 billion over the past twelve months. The acquisition of First Savings contributed $1.7 billion in deposits. Total deposits increased $175.6 million, or 4.2% annualized, on a linked quarter basis. The loan-to-deposit ratio remained relatively stable at 92.2% at period end, compared to 92.7% in the prior quarter.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $215.5 million as of quarter-end, or 1.38% of loans, a decrease of $26.1 million from the prior quarter. Net charge-offs totaled $29.4 million driven by two non-performing credits for which specific reserves were established in the prior quarter. Provision for credit losses of $3.3 million was recorded during the quarter. Nonperforming assets to total assets remained relatively stable at 0.57%, compared to 0.56% in the prior quarter. Related credit costs for new nonaccrual loans were recognized in prior quarters. Reserves for unfunded commitments totaling $18.5 million remained unchanged from the previous quarter.

Net interest income, totaling $161.1 million for the quarter, increased $2.1 million, or 1.3%, compared to prior quarter and increased $27.4 million, or 20.5%, compared to the third quarter of 2025. Fully taxable equivalent net interest margin¹ was 3.44%, an increase of 6 basis points from the linked quarter and an increase of 20 basis points compared to the third quarter of 2025.

Noninterest income totaled $38.0 million for the quarter, an increase of $0.8 million, compared to the prior quarter and an increase of $5.5 million compared to the third quarter of 2025. The linked-quarter increase primarily reflects higher deposit service charges and an increase in income from CRA investments recorded through Other Income.

Noninterest expense totaled $116.3 million for the quarter, an increase of $0.9 million from the prior quarter and an increase of $19.7 million from the third quarter of 2025. Acquisition-related costs totaling $0.9 million were incurred during the quarter and $3.8 million were recorded in the prior quarter. Excluding acquisition costs, noninterest expense increased $3.9 million linked quarter, primarily driven by a $1.4 million increase in marketing expense, a $0.7 million increase in employee health insurance costs, and a $0.6 million increase in premises expense that included a $0.5 million building lease impairment charge.

The Corporation’s total risk-based capital ratio equaled 13.58%, the common equity tier 1 capital ratio equaled 11.22%, and the tangible common equity ratio totaled 8.83%. 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, October 22, 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/BIb6ca7718e42d48c3b903034aad19eef4)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/izzbnu6m) during the time of the call. A replay of the webcast will be available until October 22, 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 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; 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. First Merchants undertakes no obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release. In addition, First Merchants’ past results of operations do not necessarily indicate their anticipated future results.

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.

⁽¹⁾ See "Non-GAAP Financial Information" for reconciliation

⁽¹⁾ See "Non-GAAP Financial Information" for reconciliation

⁽¹⁾ See "Non-GAAP Financial Information" for reconciliation

⁽¹⁾ Total Interest-Bearing Deposits contain brokered deposits of $1.4 billion, which includes brokered CDs of $409.8 million at September 30, 2026.

⁽¹⁾ Non-core expenses in the Three Months Ended December 31, 2025 included a $0.7 million reduction in the FDIC special assessment
⁽²⁾ Non-core expenses in the Three and Nine Months Ended September 30, 2025 included $0.6 million of severance costs

⁽¹⁾ Non-core expenses in the Three Months Ended December 31, 2025 included a $0.7 million reduction in the FDIC special assessment
⁽²⁾ Non-core expenses in the Three and Nine Months Ended September 30, 2025 included $0.6 million of severance costs