First Merchants (FRME) Q1 2026 earnings summary

Executive summary

• Completed acquisition of First Savings Financial Group on February 1, 2026, adding $2.4B in assets, $1.8B in loans, and $1.7B in deposits, expanding to 127 banking centers and $21.1B in assets.

• Net income available to common stockholders was $27.7M ($0.45/share), down from $54.9M ($0.94/share) year-over-year, primarily due to integration and transaction-related expenses and a net loss on mortgage loans reclassified to held for sale.

• Adjusted net income was $63.1M ($1.03/share), up from $54.9M ($0.94/share) in Q1 2025, excluding $17.0M acquisition expenses and $29.8M mortgage loan loss.

• Share repurchases totaled 708,856 shares ($27.6M) year-to-date through April.

• Strong capital position maintained with CET1 ratio at 11.22%.

Financial highlights

• Total assets reached $21.1B, up 43% year-over-year; total loans $15.3B, total deposits $16.5B.

• Net interest income (FTE) rose to $157.7M, up 15.6% year-over-year and 8.8% sequentially; net interest margin (FTE) increased to 3.35%.

• Noninterest income dropped to $5.8M, mainly due to a $29.8M mark-to-market loss on mortgage loans reclassified as held-for-sale.

• Noninterest expense increased to $125.1M, including $17.0M in integration and transaction-related costs.

• Tangible book value per share was $29.34, up 7.3% year-over-year.

Outlook and guidance

• Management expects continued integration of First Savings, focus on organic growth, and mid-single-digit loan growth for 2026.

• Net interest margin expected to rise a few basis points in coming quarters.

• Non-interest income projected to lift 3%-4% in Q2 and similar trajectory in H2.

• Quarterly expense run rate expected at $111M-$114M post-synergies.

• Effective tax rate expected at 13%.