First Merchants Stock Earnings Reports

First Merchants reported Q1 2026 net income of $27.7 million ($0.45 diluted EPS) and adjusted EPS of $1.03 (up 9.6% year-over-year) after excluding acquisition and one-time items. The company closed the First Savings acquisition on Feb 1, adding Southern Indiana and bringing assets to $21.1 billion, loans to $15.3 billion and deposits to $16.5 billion. Management repositioned $357 million of low-coupon mortgage loans from held for investment to held for sale (3.46% weighted coupon), recording a $29.8 million mark-to-market charge; proceeds are intended to pay down higher-cost deposits and be redeployed into higher-yielding commercial loans over time. Adjusted profitability metrics remain strong (adjusted ROA 1.25%; adjusted ROTCCE >14%), margin improved modestly to 3.35%, and deposit costs declined to 2.09% as the bank strategically reduced deposit rates and increased noninterest-bearing deposits via a checking product redesign. Credit quality is stable with idiosyncratic, manageable NPAs and an allowance for credit losses of $212.5 million (coverage 1.39%). Management reiterated a mid-single-digit loan growth target for 2026, expects modest margin pickup through the year (a few basis points above Q1 after day-count effects reverse), anticipates cost synergies from the acquisition (quarterly expense run rate post-synergies roughly $111–$114 million), and plans to remain active in share repurchases given capital levels (TCE ratio ~9%, CET1 11.22%).