FRME

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. First Merchants stock has delivered a 50.3% return over the past three years, yet current valuation checks suggest the market price may still sit at a discount to an intrinsic value estimate based on the Excess Returns model. Over the past three years, First Merchants has returned 50.3%, which puts more focus on whether the current share price properly reflects the underlying fundamentals. Recent earnings underperformance and credit quality issues can weigh on sentiment. At the same time, management’s confidence in the loan book and the push to grow loans and return capital may support the valuation case if execution stays on track. The company scores 3 out of 6 on value checks, which points to a mixed picture rather than a clear bargain or clear overvaluation. The issue now is whether First Merchants' current share price already reflects this Excess Returns based upside, or if there is still a reasonable margin between market price and intrinsic value. Find out why First Merchants' 17.7% return over the last year is lagging behind its peers. The Excess Returns model looks at how much profit First Merchants can generate over the long run above the return that equity investors require. For this stock, the focus is on the spread between its earnings power and the cost of that equity capital. The model uses a Book Value of $42.96 per share and a Stable EPS of $4.25 per share, based on weighted future Return on Equity estimates from 5 analysts. Against a Cost of Equity of $3.32 per share, this implies an Excess Return of $0.94 per share on an Average Return on Equity of 9.27%. The Stable Book Value is set at $45.87 per share, based on estimates from 6 analysts. Using these inputs together produces an estimated intrinsic value of $71.21 per share, which is above the current share price and suggests that the stock is trading at a discount. Because First Merchants shares fell after the Q2 2026 earnings miss and credit quality issues, the current gap between price and the Excess Returns value helps explain why the stock still screens as inexpensive even with those near-term concerns in view. On this Excess Returns view, First Merchants stock currently appears undervalued relative to its estimated long-term earnings power. Our Excess Returns analysis suggests First Merchants is undervalued by 39.3%. Track this in your watchlist or portfolio, or discover 57 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for First Merchants. P/E is usually the cleanest quick check for a bank like First Merchants, since earnings sit at the core of how investors often price the stock. Right now, First Merchants trades on a P/E of 14.6x, which is above the broader Banks industry average of about 11.9x and higher than the peer group average of 13.2x. The Fair P/E Ratio for First Merchants is estimated at 17.7x. That is higher than where the stock currently trades, so even with a premium to the industry and peers, the shares still sit below this more tailored benchmark that factors in the company’s profile and risk. Put simply, the stock does not need to re rate to extreme levels to align with that fair multiple. On this P/E view, First Merchants stock appears undervalued, as its current earnings multiple sits below the fair ratio implied by its fundamentals. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for First Merchants pick up where the valuation work leaves off and explain what patterns in growth, margins and earnings would need to emerge for the stock to be worth materially more or materially less than today's price. Each narrative links its figures to a clear view of how First Merchants' growth, profitability and risk profile could evolve, which you can revisit on the Community page as new information becomes available. If you have a clear view on whether First Merchants' earnings miss, revenue shortfall and recent credit developments open up an opportunity or signal more risk, share a Narrative and put your numbers on the table. Add your voice to the Simply Wall St community and see how your thesis holds up as new results and updates arrive. Do you think there's more to the story for First Merchants? Head over to our Community to see what others are saying! For First Merchants, both the Excess Returns intrinsic value estimate and the earnings multiple view currently point to the stock as undervalued, even though the broader valuation checks are mixed rather than emphatically strong. That combination leaves the story finely balanced between potential upside and the real risk that recent earnings and credit issues prove more than a temporary setback. The crux for investors now is whether First Merchants can stabilise credit quality and earnings so that the current discount closes, or whether the market is correctly pricing in a more persistent drag on returns. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FRME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was significantly impacted by two specific commercial credits moved to nonaccrual status, which management views as isolated events rather than broad portfolio deterioration. Net interest margin expanded to 3.38% driven by disciplined deposit pricing and the redeployment of capital from lower-yielding bonds and mortgage loans into higher-yielding assets. Loan growth returned to a 6% annualized pace in Q2, fueled by organic expansion across the three-state Midwest footprint and new relationship wins in corporate and investment real estate. The First Savings acquisition integration is now complete, with cost synergies on track and the new Southern Indiana team contributing to commercial and specialty vertical growth. Balance sheet repositioning was finalized through a mortgage loan sale that added $271 million in liquidity, used primarily to retire higher-cost brokered deposits and wholesale funding. Management emphasized a 'backyard' strategy for Shared National Credits, focusing only on large local customers where they maintain direct management access and ancillary business relationships. Management maintains an outlook for mid-single-digit loan growth through the end of 2026, supported by stable commercial pipelines and strong mortgage production. Net interest margin is expected to remain stable or increase by a couple of basis points in the second half of 2026, assuming no further Federal Reserve rate changes. Full-year 2026 net charge-offs are projected to trend into the 40- to 45-basis-point range as loss content from the two identified nonaccrual credits is realized. The quarterly expense run rate is guided between $111 million and $114 million for the remainder of the year, reflecting normalized organic growth and continued investment in talent. Capital allocation will prioritize supporting loan growth and maintaining dividends, with excess capital directed toward share repurchases if the stock price remains in the current range. A $28.1 million participation in a syndicated credit to a wireless retailer was moved to nonaccrual following a sudden shift in the carrier's retail distribution model. A $13.7 million sponsor-financed loan to a roofing contractor was downgraded after the sponsor withdrew financial support, representing a more routine commercial migration. Specific reserves of $29.7 million were established against these two credits, significantly increasing the provision for credit losses to $33 million for the quarter. The mortgage loan sale resulted in a $29.8 million loss recorded in the first quarter, but the transaction is now complete and providing yield-enhancing liquidity. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is conducting a complete portfolio review of SNCs to better understand asset coverage versus cash flow lending following the wireless retailer downgrade. They reiterated that their SNC strategy is limited to 'backyard' companies where they have management access, rather than buying outside credits to simply grow the balance sheet. The $111 million to $114 million quarterly range remains valid; stripping away acquisition noise, the bank landed at the $111 million mark this quarter. A normalized annual expense growth rate of 3% to 5% is expected long-term to account for technology investments and hiring in specialty teams like asset-based lending. Approximately $385 million in fixed-rate loans yielding 4.5% to 4.6% will reprice over the next 12 months, providing a yield tailwind. New and renewed loan yields of 6.28% are currently trending above the total portfolio yield of 6.11%, supporting net interest income growth. Management is currently focused on internal execution rather than acquisitions, noting that the M&A market in their three-state footprint is relatively quiet. Any future interest would be limited to 'easy to digest' institutions with strong deposit bases and low loan-to-deposit ratios.

This article first appeared on GuruFocus. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. First Merchants Corp (NASDAQ:FRME) reported a net income of $43.5 million or $0.70 per diluted share for the second quarter. The company achieved a 6% annualized loan growth in both commercial and consumer business sectors. Net interest margin expanded to 3.38%, indicating improved profitability. The mortgage loan sale added $271 million of liquidity to the balance sheet. Tangible book value per share increased by 1.6% linked-quarter, reflecting strong financial health. Second quarter results were negatively impacted by two loans moved to non-accrual status, affecting overall performance. Non-accrual loans increased to $118.2 million, indicating potential credit quality issues. Classified loans rose to $393.3 million from $357.1 million last quarter, driven by a limited number of borrower relationships. The company anticipates full-year 2026 net charge-offs to trend into the 40 to 45 basis point range, higher than current levels. The rate paid on deposits continued to decline, which could impact future funding costs. Warning! GuruFocus has detected 8 Warning Signs with FRME. Is FRME fairly valued? Test your thesis with our free DCF calculator. Q: How is First Merchants Corp. addressing the issues with the two credits that impacted credit quality this quarter? A: Mark Hardwick, CEO, explained that the company still values the business and the balances on their financials. They focus on customers within their core markets, maintaining strong relationships and continuous dialogue. John Martin, Chief Credit Officer, added that they are conducting a complete portfolio review of their shared national credit to better understand asset coverage versus cash flow lending. Q: Can you provide an outlook on expense numbers post-integration efforts? A: Michelle Kabieski, CFO, stated that the quarterly expense run rate is expected to be between $111 million and $114 million per quarter for the remainder of the year. This range accounts for some hiring and other factors, but it remains consistent with previous guidance. Q: What is the outlook for net interest margin and loan yields for the rest of the year? A: Michelle Kabieski, CFO, mentioned that they are assuming no Fed rate changes for the rest of the year, expecting the margin to increase by a couple of basis points. They are seeing high CD specials from competitors, but they have tailwinds from fixed-rate assets that will be repricing. Mike Stewart, President, added that new and renewed loan yields are above the overall portfolio yield, which helps drive net interest. Q: How is the pipeline for mortgage banking and non-interest income shaping up for the third quarter? A: Michelle Kabieski, CFO, expects non-interest income to be up 10% over the prior year, with a solid quarter for gains on sales and mortgages. She anticipates similar performance in the next quarter. Q: What are the plans for capital management and share buybacks? A: Mark Hardwick, CEO, confirmed that they plan to continue buyback activity through the remainder of the year, assuming the stock price remains stable. They have a $100 million approval for buybacks and continue to generate capital, using a portion for loan growth, dividends, and share repurchases. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in First Merchants Corporation? Here are five stocks we like better. First Merchants beat on earnings in Q2 2026 with net income of $43.5 million, or $0.70 per share, as stronger net interest income and margin expansion helped offset credit costs. The bank’s net interest margin rose to 3.38%, aided by lower funding costs, improved loan yields, and the payoff from a mortgage loan sale that reduced higher-cost brokered and wholesale funding. Credit issues weighed on results after two commercial loans were moved to non-accrual, driving a $33 million provision for credit losses and pushing management to expect higher charge-offs in the second half of 2026. First Merchants (NASDAQ:FRME) reported second-quarter 2026 net income of $43.5 million, or $0.70 per diluted share, as stronger revenue and margin expansion were offset by credit costs tied to two commercial loans moved to non-accrual status. Chief Executive Officer Mark Hardwick said the company was “disappointed” by the two downgrades but said management does not view them as representative of the broader loan portfolio. The bank recorded adjusted pre-tax, pre-provision earnings of $84.6 million, up 7.5% from the prior quarter, while net interest margin expanded to 3.38%. → 3 Photonics Companies Making Quantum Tech Possible Hardwick said First Merchants ended the quarter with $21.3 billion in total assets, $15.5 billion in loans and $16.8 billion in deposits. The company now operates 126 banking centers, reflecting the addition of Southern Indiana locations following the First Savings acquisition. President Mike Stewart said loan growth returned to more typical levels after a flat first quarter. Commercial and consumer loans each grew at nearly a 6% annualized rate in the second quarter, with activity coming across the bank’s three-state footprint. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? “Our Midwest economies continue to expand, our clients’ businesses continue to grow, and our bankers continue to win new relationships,” Stewart said. He said the company remains confident in its expectation for mid-single-digit loan growth through the end of 2026. Deposits grew at a 6.5% annualized rate in the quarter. Stewart attributed commercial deposit growth primarily to seasonal public fund increases tied to tax collections and a large temporary deposit from a client’s business sale. He said consumer deposit declines were also seasonal, reflecting spending of tax refunds, and that the patterns should normalize through the rest of the year. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off Chief Financial Officer Michele Kawiecki said second-quarter total revenue increased meaningfully, with net interest income up $7.6 million from the prior quarter and non-interest income up $1.6 million after normalizing for a $29.8 million loss on mortgage loans sold in the first quarter. Net interest income on a fully tax-equivalent basis totaled $165.3 million, up $7.6 million linked quarter and $26.1 million from the prior-year period. Kawiecki said the company’s pricing discipline on both loans and deposits helped drive margin expansion despite Federal Reserve rate cuts in the fourth quarter of 2025. The rate paid on deposits declined to 2.07% in the quarter, and Kawiecki said the bank used $271 million in proceeds from the completed mortgage loan sale to reduce higher-cost brokered deposits and wholesale funding. She said the mortgage loan sale added liquidity to the balance sheet. Loan yields also improved modestly. The held-for-investment loan portfolio yield rose two basis points from the prior quarter to 6.11%, while new and renewed loans were originated at an average yield of 6.28%, compared with 6.18% in the prior quarter. Chief Credit Officer John Martin said the bank recorded a $33 million provision for credit losses in the quarter, largely due to $29.7 million in specific reserves established on two commercial credits. Net charge-offs totaled $3.9 million, and the allowance for credit losses ended the quarter at $241.6 million, representing a coverage ratio of 1.56%. The larger credit was a $28.1 million participation in a syndicated loan to an authorized wireless retailer. Martin said new company-specific information received after quarter-end led the bank to place the loan on non-accrual status. He said negotiations with the borrower remain active and that the company expects “substantially greater visibility” into the likely resolution by the end of the fourth quarter. The second credit was a $13.7 million sponsor-financed loan to a commercial and residential roofing contractor. Martin said the loan had been on the watchlist for three quarters and was moved to non-accrual in July after the sponsor informed the bank it no longer intended to support the company. Non-accrual loans increased to $118.2 million, while non-performing assets plus loans 90 days past due rose to $129.5 million, or 0.83% of loans. Classified loans increased to $393.3 million from $357.1 million in the prior quarter. Martin said the increase was driven primarily by a limited number of borrower relationships rather than broad-based portfolio deterioration. He said First Merchants expects a meaningful portion of the loss content associated with the two non-accrual relationships to be realized through charge-offs in the third and fourth quarters. Full-year 2026 net charge-offs are expected to trend into the 40 to 45 basis point range, largely due to those known credits. Hardwick said First Merchants has completed the integration and related expense savings from the First Savings acquisition, positioning the company for the next quarter. Kawiecki said acquisition-related costs totaled $3.8 million in the second quarter, primarily in professional and outside services and equipment expense categories, and said expected cost synergies remain on track. During the question-and-answer session, Stewart said the Southern Indiana commercial team is “off to a great start,” with commercial activity growing during the quarter. He said First Savings’ specialty verticals, including SBA lending, first-lien HELOCs and triple-net lease lending, are performing as expected. Kawiecki reiterated expense guidance for the remainder of 2026, saying quarterly total expense run rate is expected to remain between $111 million and $114 million. She also said the company expects a normalized organic expense growth rate of roughly 3% to 5% going forward as it invests in talent and technology. Tangible book value per share increased $0.46, or 1.6%, from the prior quarter to $29.80. The tangible common equity ratio was 8.99%. Kawiecki said First Merchants repurchased just under 1 million shares for $38.3 million year to date. Hardwick said the company expects to continue share repurchase activity through the remainder of the year if the stock price remains in a similar range. He said management continues to view buybacks as a good use of capital while also supporting loan growth and dividends. On interest margin, Kawiecki said the company is assuming no Federal Reserve rate changes for the rest of the year. Under that scenario, she said First Merchants would expect margin to increase by “maybe a couple basis points” in the second half, though competitive deposit pricing remains a variable. Hardwick said the first half of the year was “a little noisy,” citing both progress on integration and the completed mortgage loan sale as positives, while acknowledging the credit issues that pressured second-quarter results. He said he is “enthusiastic and excited” about what the second half of 2026 should represent for the company. First Merchants Corporation, through its subsidiary First Merchants Bank, offers a comprehensive suite of banking and financial services to individuals, businesses and public sector clients. The company's core business activities include retail and commercial banking, lending, treasury and cash management, and wealth advisory services. With a focus on relationship banking, First Merchants seeks to deliver tailored solutions for deposit accounts, loan financing and other credit products. On the consumer side, First Merchants provides checking and savings accounts, certificates of deposit, personal and mortgage loans, and electronic banking conveniences. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "First Merchants Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

First Merchants (FRME) came out with quarterly earnings of $0.74 per share, missing the Zacks Consensus Estimate of $1.03 per share. This compares to earnings of $0.98 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -28.16%. A quarter ago, it was expected that this bank would post earnings of $0.96 per share when it actually produced earnings of $1.03, delivering a surprise of +7.29%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. First Merchants, which belongs to the Zacks Banks - Midwest industry, posted revenues of $196.1 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.59%. This compares to year-ago revenues of $164.32 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. First Merchants shares have added about 17.5% since the beginning of the year versus the S&P 500's gain of 9.7%. While First Merchants has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for First Merchants was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.09 on $198.85 million in revenues for the coming quarter and $4.26 on $782.86 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Midwest is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Huntington Bancshares (HBAN), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on July 23. This regional bank holding company is expected to post quarterly earnings of $0.39 per share in its upcoming report, which represents a year-over-year change of +2.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Huntington Bancshares' revenues are expected to be $2.85 billion, up 41.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Merchants Corporation (FRME) : Free Stock Analysis Report Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MUNCIE, Ind., July 22, 2026 (GLOBE NEWSWIRE) -- First Merchants Corporation (NASDAQ - FRME) (the "Corporation" or "First Merchants") Second Quarter 2026 Highlights: Net income available to common stockholders was $43.5 million, or $0.70 per diluted common share, compared to $27.7 million, or $0.45 per diluted common share, in the first quarter of 2026. On an adjusted basis1, net income totaled $46.4 million, or $0.74 per diluted common share, compared to $63.1 million, or $1.03 per diluted common share in the prior quarter. Adjusted pre-tax, pre-provision income1 of $84.6 million, compared to $78.7 million in the prior quarter and $70.7 million in the second quarter of 2025. Net interest margin on a fully taxable equivalent basis1 of 3.38%, up 3 basis points from the prior quarter and up 13 basis points from the second quarter of 2025. Loan growth of $221.7 million, or 5.8% annualized, on a linked quarter basis2. Sold $271.1 million of mortgage loans with a weighted average rate of 3.43% during the current quarter and deployed proceeds to fund loan growth and pay down high-cost funding. The loans had been moved to held-for-sale and marked to fair value in the first quarter. Deposit growth of $267.8 million, or 6.5% annualized, on a linked quarter basis. Robust capital position with Common Equity Tier 1 Capital Ratio of 11.16%. Repurchased 976,631 shares of common stock totaling $38.3 million year-to-date, including 336,145 shares totaling $13.4 million in the second quarter. Nonperforming assets to total assets were 56 basis points compared to 43 basis points on a linked quarter basis. Two commercial lending relationships with outstanding balances totaling $41.8 million were placed in nonaccrual status and associated reserves of $29.7 million were recorded. Adjusted efficiency ratio1 totaled 53.22% for the quarter. Successfully completed systems conversion of First Savings Financial Group, Inc. (“First Savings”) in mid-May. "First Merchants continued to build momentum during the second quarter with expanding net interest margin, solid loan and deposit growth, and another quarter of strong commercial loan production," said Mark Hardwick, Chief Executive Officer. "While we identified two commercial lending relationships that were placed on nonaccrual, we acted promptly to recognize the associated reserves and believe our balance sheet remains well positioned. We successfully completed the integration of First Savings, further strengthening our statewide Indiana franchise and enhancing our ability to serve clients across Indiana, Ohio and Michigan. Our capital, liquidity and credit quality remain very strong and position us well to execute our long-term growth strategy and continue creating shareholder value." Second Quarter Financial Results: The Corporation reported second quarter 2026 net income available to common stockholders of $43.5 million compared to $56.4 million during the same period in 2025. Diluted earnings per common share for the period totaled $0.70 compared to $0.98 in the second quarter of 2025. Current quarter results included acquisition-related costs of $3.8 million that consist primarily of employee salaries, equipment, and professional fees. Excluding these non-core charges, adjusted earnings per common share1 for the second quarter of 2026 totaled $0.74 compared to $0.98 in the prior year period. Subsequent to quarter-end, based on additional information obtained regarding conditions that existed at June 30, 2026, two commercial lending relationships were placed on nonaccrual status and reserve levels were increased, resulting in elevated provision expense for the second quarter. The first was a $28.1 million participation in a shared national credit to a commercial authorized wireless retailer. The second was a credit to a commercial and residential roofing contractor with an outstanding balance of $13.7 million. Associated reserves for these credits totaled $29.7 million. Total assets of the Corporation equaled $21.3 billion as of quarter-end and loans totaled $15.5 billion. Loans increased $2.2 billion during the last twelve months and $268.8 million on a linked quarter basis. During the second quarter, the Corporation completed the previously announced sale of $271.1 million of mortgage loans that had been transferred to held-for-sale during the first quarter. Additionally, mortgage loans totaling $47.1 million were returned to held-for-investment during the second quarter. Excluding loans acquired through First Savings and the impact of mortgage loan sale activity, the Corporation generated organic loan growth of $697.9 million, or 5.2% during the past twelve months. On a linked quarter basis, organic loan growth totaled $221.7 million, or 5.8% annualized. Investment securities, totaling $3.3 billion, decreased $88.9 million, or 2.6% during the last twelve months and decreased $17.8 million, or 2.2% annualized on a linked quarter basis. Investment securities declined during the quarter due to principal paydowns and maturities, offset by an increase in the securities portfolio valuation. Total deposits equaled $16.8 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. Total deposits increased $267.8 million, or 6.5% annualized, on a linked quarter basis. The loan to deposit ratio of 92.7% at period end remained stable on a linked quarter basis. The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $241.6 million as of quarter-end, or 1.56% of loans, an increase of $29.1 million from the prior quarter. Net charge-offs totaled $3.9 million and provision for credit losses of $33.0 million was recorded during the quarter. Reserves for unfunded commitments totaling $18.5 million remained unchanged from the previous quarter. Nonperforming assets to total assets were 0.56% for the second quarter of 2026, an increase of 13 basis points compared to 0.43% in the prior quarter. The increase in nonperforming assets and provision for credit losses reflects the impact of the two commercial lending relationships placed in nonaccrual status. Net interest income, totaling $158.9 million for the quarter, increased $7.6 million, or 5.0%, compared to prior quarter and increased $25.9 million, or 19.5%, compared to the second quarter of 2025. Fully taxable equivalent net interest margin was 3.38%, an increase of three basis points compared to the prior quarter and an increase of 13 basis points compared to the second quarter of 2025. Noninterest income totaled $37.2 million for the quarter, an increase of $31.3 million, compared to the prior quarter and an increase of $5.9 million compared to the second quarter of 2025. The linked quarter increase primarily reflects the negative valuation adjustment of $29.8 million recorded in the first quarter on mortgage loans sold in the second quarter. Also contributing to the increase were higher gains on sales of loans and derivative hedge fees. Noninterest expense totaled $115.3 million for the quarter, a decrease of $9.8 million from the prior quarter and an increase of $21.7 million from the second quarter of 2025. Acquisition-related costs totaling $3.8 million were incurred during the quarter, including $1.4 million in professional and other outside services and $1.0 million in equipment costs. Acquisition-related costs recorded in the prior quarter totaled $17.0 million. The Corporation’s total risk-based capital ratio equaled 12.98%, the common equity tier 1 capital ratio equaled 11.16%, and the tangible common equity ratio totaled 8.99%. These ratios continue to reflect the Corporation’s strong capital position. 1 See “Non-GAAP Financial Information” for reconciliation2 Excludes $47.1 million of loans returned to held-for-investment from held-for-sale CONFERENCE CALL First Merchants Corporation will conduct an earnings conference call and webcast at 9:00 a.m. (ET) on Thursday, July 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/BIc1f6f98686534d529e7f3d66c4d50b16) To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/hqyvbr3q) during the time of the call. A replay of the webcast will be available until July 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; 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) Total brokered deposits of $1.3 billion, which includes brokered CD's of $418.9 million at June 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 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 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 Months Ended September 30, 2025 included $0.6 million of severance costs For more information, contact:Nicole M. Weaver, First Vice President and Director of Corporate Administration765-521-7619http://www.firstmerchants.com

For the quarter ended June 2026, First Merchants (FRME) reported revenue of $196.1 million, up 19.3% over the same period last year. EPS came in at $0.74, compared to $0.98 in the year-ago quarter. The reported revenue represents a surprise of +0.59% over the Zacks Consensus Estimate of $194.96 million. With the consensus EPS estimate being $1.03, the EPS surprise was -28.16%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how First Merchants performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net Interest Margin (FTE): 3.4% versus 3.4% estimated by three analysts on average. Efficiency Ratio: 55.1% versus the three-analyst average estimate of 55.7%. Average Balance - Total Earning Assets: $19.58 billion versus $19.56 billion estimated by two analysts on average. Net Charge-offs (Recoveries) as % of Average Loans (Annualized): 0.1% compared to the 0.2% average estimate based on two analysts. Total Non-Interest Income: $37.16 million versus the three-analyst average estimate of $36.99 million. Net gains and fees on sales of loans: $7.74 million versus $7.03 million estimated by three analysts on average. Card payment fees: $5.51 million versus $5.38 million estimated by two analysts on average. Derivative hedge fees: $1.12 million versus $0.82 million estimated by two analysts on average. Other income: $0.58 million versus $1 million estimated by two analysts on average. Fiduciary and wealth management fees: $9.64 million versus $10.05 million estimated by two analysts on average. Other customer fees: $0.88 million versus $0.65 million estimated by two analysts on average. Earnings on bank-owned life insurance: $2.33 million versus the two-analyst average estimate of $2.3 million. View all Key Company Metrics for First Merchants here>>> Shares of First Merchants have returned +5.1% over the past month versus the Zacks S&P 500 composite's +0.3% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Merchants Corporation (FRME) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider First Merchants (FRME). This company, which is in the Zacks Banks - Midwest industry, shows potential for another earnings beat. When looking at the last two reports, this bank has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 4.69%, on average, in the last two quarters. For the most recent quarter, First Merchants was expected to post earnings of $0.96 per share, but it reported $1.03 per share instead, representing a surprise of 7.29%. For the previous quarter, the consensus estimate was $0.96 per share, while it actually produced $0.98 per share, a surprise of 2.08%. Thanks in part to this history, there has been a favorable change in earnings estimates for First Merchants lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. First Merchants currently has an Earnings ESP of +0.81%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #2 (Buy) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on July 22, 2026. Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric. Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Merchants Corporation (FRME) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research