Third Quarter 2025 Highlights:
Net income available to common stockholders was $56.3 million and diluted earnings per common share totaled $0.98 in the third quarter of 2025, compared to $48.7 million and $0.84 in the third quarter of 2024, and $56.4 million and $0.98 in the second quarter of 2025.
Robust capital position with Common Equity Tier 1 Capital Ratio of 11.34% and Tangible Common Equity to Tangible Assets Ratio of 9.18%.
Repurchased 939,271 shares totaling $36.5 million year-to-date; repurchased 162,474 shares totaling $6.5 million during the third quarter.
Total loans grew $288.8 million, or 8.7% annualized, on a linked quarter basis, and $926.9 million, or 7.3%, during the last twelve months.
Total deposits increased $72.4 million, or 2.0% annualized, on a linked quarter basis.
Nonperforming assets to total assets were 36 basis points and flat compared to prior quarter.
The efficiency ratio totaled 55.09% for the quarter or 54.56%1 excluding $0.9 million of non-core charges incurred during the quarter.
Announced the acquisition of First Savings Financial Group, Inc. on September 25, 2025, adding approximately $2.4 billion in assets and expanding the Corporation's presence into Southern Indiana and the Louisville MSA.
"Our strong year-to-date balance sheet and earnings performance underscore the strength and resilience of our business model. Our return on assets, return on tangible capital, and efficiency ratio are in the top-quartile relative to our peers, reflecting disciplined execution and operational excellence," said Mark Hardwick, Chief Executive Officer. "The pending acquisition of First Savings Financial Group marks a strategic expansion into Southern Indiana and the Louisville metropolitan area, adding approximately $2.4 billion in assets and enhancing our ability to serve Indiana, Ohio, and Michigan while delivering sustainable long-term growth."
Third Quarter Financial Results:
First Merchants Corporation (the "Corporation") reported third quarter 2025 net income available to common stockholders of $56.3 million compared to $48.7 million during the same period in 2024. Diluted earnings per common share for the period totaled $0.98 compared to $0.84 in the third quarter of 2024. Adjusted diluted earnings per common share1 for the third quarter 2025 totaled $0.99, up from $0.95 in the prior year period. Third quarter 2025 results included $0.9 million in pre-tax acquisition-related and other non-core expenses, while the third quarter 2024 included a $9.1 million pre-tax loss related to the repositioning of the available-for-sale securities portfolio.
On September 25, 2025, the Corporation signed a definitive agreement to acquire First Savings Financial Group, Inc., ("First Savings"), in an all-stock transaction that was valued at approximately $241.3 million on the day of announcement. Headquartered in Jeffersonville, Indiana, First Savings operates 16 banking center locations in southern Indiana. First Savings had total assets of $2.4 billion, total loans of $1.9 billion, and total deposits of $1.7 billion as of June 30, 2025. The transaction is expected to close in the first quarter of 2026.
Total assets of the Corporation equaled $18.8 billion as of quarter-end and loans totaled $13.6 billion. During the past twelve months, total loans grew by $926.9 million, or 7.3%. On a linked quarter basis, loans grew $288.8 million, or 8.7% annualized, with growth primarily in Commercial & Industrial loans.
Investments, totaling $3.4 billion, decreased $279.8 million, or 7.6%, during the last twelve months and increased $1.4 million on a linked quarter basis. The modest increase during the quarter was due to an increase in the securities portfolio valuation offset by principal paydowns and maturities.
Total deposits equaled $14.9 billion as of quarter-end and increased by $504.9 million, or 3.5%, over the past twelve months. On a linked quarter basis, deposits increased $72.4 million, or 2.0% annualized. The loan to deposit ratio increased to 91.6% at period end from 90.1% in the prior quarter.
The Corporation's Allowance for Credit Losses, Loans (ACL) totaled $194.5 million as of quarter-end, or 1.43% of total loans, a decrease of $0.8 million from prior quarter. Net charge-offs totaled $5.1 million and provision for credit losses of $4.3 million was recorded during the quarter. Reserves for unfunded commitments totaled $18.0 million and remained unchanged from the prior quarter. Non-performing assets to total assets were 0.36% for the third quarter of 2025, consistent with the prior quarter, reflecting continued strong credit performance.
Net interest income, totaling $133.7 million for the quarter, increased $0.7 million, or 0.5%, compared to prior quarter and increased $2.6 million, or 1.9%, compared to the third quarter of 2024. Fully tax equivalent net interest margin was 3.24%, a decrease of one basis point compared to prior quarter, and an increase of one basis point compared to the third quarter of 2024.
Noninterest income totaled $32.5 million for the quarter, an increase of $1.2 million, or 3.8%, compared to the second quarter of 2025 and an increase of $7.6 million, or 30.6%, from the third quarter of 2024. The increase over second quarter of 2025 was driven primarily by the recording of a $0.9 million negative valuation adjustment to a CRA investment in the second quarter. Customer related fees were stable on a linked quarter basis. The increase from the third quarter of 2024 was driven by realized losses of $9.1 million on sales of available for sale securities recorded in the third quarter of the prior year.
Noninterest expense totaled $96.6 million for the quarter, an increase of $3.0 million from the second quarter of 2025 and an increase of $1.9 million from the third quarter of 2024. The linked quarter increase was driven by higher salaries and incentives and $0.6 million of severance.
The Corporation's total risk-based capital ratio equaled 13.04%, common equity tier 1 capital ratio equaled 11.34%, and the tangible common equity ratio totaled 9.18%. These ratios continue to reflect the Corporation's robust capital position.
1 See "Non-GAAP Financial Information" for reconciliation
CONFERENCE CALL
First Merchants Corporation will conduct a third quarter earnings conference call and webcast at 9:00 a.m. (ET) on Thursday, October 23, 2025.
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/BIf471933f076b43ed86fc41e507892de6)
To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/b8bccx5o) during the time of the call. A replay of the webcast will be available until October 23, 2026.
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 timing and benefits of the proposed 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 proposed merger, as well as other statements of expectations regarding the proposed 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 proposed 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 proposed merger may not be fully realized or realized within the expected time frame; revenues following the proposed merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the proposed merger; the ability to obtain required regulatory approvals or the approval of First Savings' common shareholders, and the ability to complete the proposed 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 proposed merger is completed.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars In Thousands, Except Per Share Amounts)
September 30,
2025
2024
ASSETS
Cash and due from banks
$
88,079
$
84,719
Interest-bearing deposits
168,706
359,126
Investment securities available for sale
1,386,903
1,553,496
Investment securities held to maturity, net of allowance for credit losses
1,995,488
2,108,649
Loans held for sale
23,190
40,652
Loans
13,591,174
12,646,808
Less: Allowance for credit losses - loans
(194,468
)
(187,828
)
Net loans
13,396,706
12,458,980
Premises and equipment
121,771
129,582
Federal Home Loan Bank stock
47,264
41,716
Interest receivable
89,102
92,055
Goodwill
712,002
712,002
Other intangibles
15,298
21,599
Cash surrender value of life insurance
306,583
304,613
Other real estate owned
1,270
5,247
Tax asset, deferred and receivable
89,758
86,732
Other assets
369,509
348,384
TOTAL ASSETS
$
18,811,629
$
18,347,552
LIABILITIES
Deposits:
Noninterest-bearing
$
2,100,570
$
2,334,197
Interest-bearing
12,769,409
12,030,903
Total Deposits
14,869,979
14,365,100
Borrowings:
Federal funds purchased
199,370
30,000
Securities sold under repurchase agreements
122,226
124,894
Federal Home Loan Bank advances
798,626
832,629
Subordinated debentures and other borrowings
57,632
93,562
Total Borrowings
1,177,854
1,081,085
Deposits and other liabilities held for sale
—
288,476
Interest payable
18,240
18,089
Other liabilities
333,154
292,429
Total Liabilities
16,399,227
16,045,179
STOCKHOLDERS' EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 cumulative shares Issued and outstanding - 125 cumulative shares
125
125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized -- 10,000 non-cumulative perpetual shares Issued and outstanding - 10,000 non-cumulative perpetual shares
25,000
25,000
Common Stock, $0.125 stated value:
Authorized -- 100,000,000 shares Issued and outstanding - 57,192,497 and 58,117,115 shares
7,149
7,265
Additional paid-in capital
1,158,026
1,192,683
Retained earnings
1,377,966
1,229,125
Accumulated other comprehensive loss
(155,864
)
(151,825
)
Total Stockholders' Equity
2,412,402
2,302,373
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
18,811,629
$
18,347,552
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts)
September 30,
September 30,
2025
2024
2025
2024
INTEREST INCOME
Loans:
Taxable
$
200,406
$
206,680
$
583,307
$
606,116
Tax-exempt
11,173
8,622
32,510
25,242
Investment securities:
Taxable
8,288
9,263
24,926
27,062
Tax-exempt
12,460
13,509
37,493
40,733
Deposits with financial institutions
1,676
2,154
5,940
11,642
Federal Home Loan Bank stock
1,092
855
3,172
2,569
Total Interest Income
235,095
241,083
687,348
713,364
INTEREST EXPENSE
Deposits
90,821
98,856
255,609
296,292
Federal funds purchased
224
329
2,001
455
Securities sold under repurchase agreements
654
700
2,059
2,377
Federal Home Loan Bank advances
8,638
8,544
27,716
21,715
Subordinated debentures and other borrowings
1,093
1,544
3,014
5,781
Total Interest Expense
101,430
109,973
290,399
326,620
NET INTEREST INCOME
133,665
131,110
396,949
386,744
Provision for credit losses
4,300
5,000
14,100
31,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
129,365
126,110
382,849
355,244
NONINTEREST INCOME
Service charges on deposit accounts
8,921
8,361
25,559
24,482
Fiduciary and wealth management fees
8,842
8,525
26,317
25,550
Card payment fees
5,007
5,121
14,465
14,360
Net gains and fees on sales of loans
4,983
6,764
15,854
15,159
Derivative hedge fees
1,097
736
2,332
1,488
Other customer fees
414
344
1,230
1,231
Earnings on bank-owned life insurance
1,667
2,755
5,759
6,276
Net realized losses on sales of available for sale securities
—
(9,114
)
(8
)
(9,165
)
Other income
1,546
1,374
2,320
3,457
Total Noninterest Income
32,477
24,866
93,828
82,838
NONINTEREST EXPENSES
Salaries and employee benefits
57,317
55,223
166,826
165,730
Net occupancy
7,057
6,994
21,118
21,052
Equipment
6,998
6,949
20,933
19,774
Marketing
2,120
1,836
5,470
4,807
Outside data processing fees
6,943
7,150
19,979
21,111
Printing and office supplies
311
378
930
1,085
Intangible asset amortization
1,499
1,772
4,530
5,500
FDIC assessments
3,526
3,720
10,726
11,285
Other real estate owned and foreclosure expenses
121
942
750
1,849
Professional and other outside services
3,718
3,035
10,720
10,809
Other expenses
6,951
6,630
21,079
19,975
Total Noninterest Expenses
96,561
94,629
283,061
282,977
INCOME BEFORE INCOME TAX
65,281
56,347
193,616
155,105
Income tax expense
8,516
7,160
24,680
18,052
NET INCOME
56,765
49,187
168,936
137,053
Preferred stock dividends
468
468
1,406
1,406
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
$
56,297
$
48,719
$
167,530
$
135,647
PER SHARE DATA:
Basic Net Income Available to Common Stockholders
$
0.98
$
0.84
$
2.91
$
2.32
Diluted Net Income Available to Common Stockholders
$
0.98
$
0.84
$
2.90
$
2.31
Cash Dividends Paid to Common Stockholders
$
0.36
$
0.35
$
1.07
$
1.04
Tangible Common Book Value Per Share
$
29.08
$
26.64
$
29.08
$
26.64
Average Diluted Common Shares Outstanding (in thousands)
57,448
58,289
57,817
58,629
FINANCIAL HIGHLIGHTS
(Dollars In Thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
NET CHARGE-OFFS
$
5,148
$
6,709
$
12,389
$
48,606
AVERAGE BALANCES:
Total Assets
$
18,637,581
$
18,360,580
$
18,497,118
$
18,374,370
Total Loans
13,402,379
12,680,166
13,186,843
12,592,907
Total Earning Assets
17,282,901
16,990,358
17,135,301
17,042,540
Total Deposits
14,907,861
14,702,454
14,654,894
14,826,056
Total Stockholders' Equity
2,367,971
2,251,547
2,349,718
2,232,419
FINANCIAL RATIOS:
Return on Average Assets
1.22
%
1.07
%
1.22
%
0.99
%
Return on Average Stockholders' Equity
9.51
8.66
9.51
8.10
Return on Tangible Common Stockholders' Equity
14.21
13.39
14.27
12.64
Average Earning Assets to Average Assets
92.73
92.54
92.64
92.75
Allowance for Credit Losses - Loans as % of Total Loans
1.43
1.48
1.43
1.48
Net Charge-offs as % of Average Loans (Annualized)
0.15
0.21
0.13
0.51
Average Stockholders' Equity to Average Assets
12.71
12.26
12.70
12.15
Fully Taxable Equivalent (FTE) Yield on Average Earning Assets
5.58
5.82
5.49
5.72
Interest Expense/Average Earning Assets
2.34
2.59
2.26
2.56
Net Interest Margin FTE
3.24
3.23
3.23
3.16
Efficiency Ratio
55.09
53.76
54.54
55.54
ASSET QUALITY
(Dollars In Thousands)
September 30,
June 30,
March 31,
December 31,
September 30,
2025
2025
2025
2024
2024
Nonaccrual Loans
$
65,740
$
67,358
$
81,922
$
73,773
$
59,088
Other Real Estate Owned and Repossessions
1,270
177
4,966
4,948
5,247
Nonperforming Assets (NPA)
67,010
67,535
86,888
78,721
64,335
90+ Days Delinquent
1,925
4,443
4,280
5,902
14,105
NPAs & 90+ Days Delinquent
$
68,935
$
71,978
$
91,168
$
84,623
$
78,440
Allowance for Credit Losses - Loans
$
194,468
$
195,316
$
192,031
$
192,757
$
187,828
Quarterly Net Charge-offs
5,148
2,315
4,926
771
6,709
NPAs / Actual Assets %
0.36
%
0.36
%
0.47
%
0.43
%
0.35
%
NPAs & 90 Day / Actual Assets %
0.37
%
0.39
%
0.49
%
0.46
%
0.43
%
NPAs / Actual Loans and OREO %
0.49
%
0.51
%
0.67
%
0.61
%
0.51
%
Allowance for Credit Losses - Loans / Actual Loans (%)
1.43
%
1.47
%
1.47
%
1.50
%
1.48
%
Quarterly Net Charge-offs as % of Average Loans (Annualized)
0.15
%
0.07
%
0.15
%
0.02
%
0.21
%
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars In Thousands, Except Per Share Amounts)
September 30,
June 30,
March 31,
December 31,
September 30,
2025
2025
2025
2024
2024
ASSETS
Cash and due from banks
$
88,079
$
81,567
$
86,113
$
87,616
$
84,719
Interest-bearing deposits
168,706
223,343
331,534
298,891
359,126
Investment securities available for sale
1,386,903
1,358,130
1,378,489
1,386,475
1,553,496
Investment securities held to maturity, net of allowance for credit losses
1,995,488
2,022,826
2,048,632
2,074,220
2,108,649
Loans held for sale
23,190
28,783
23,004
18,663
40,652
Loans
13,591,174
13,296,759
13,004,905
12,854,359
12,646,808
Less: Allowance for credit losses - loans
(194,468
)
(195,316
)
(192,031
)
(192,757
)
(187,828
)
Net loans
13,396,706
13,101,443
12,812,874
12,661,602
12,458,980
Premises and equipment
121,771
122,808
128,749
129,743
129,582
Federal Home Loan Bank stock
47,264
47,290
45,006
41,690
41,716
Interest receivable
89,102
93,258
88,352
91,829
92,055
Goodwill
712,002
712,002
712,002
712,002
712,002
Other intangibles
15,298
16,797
18,302
19,828
21,599
Cash surrender value of life insurance
306,583
305,695
