FRME

First Merchants delivered a positive third quarter, with results that exceeded Wall Street's expectations for both revenue and adjusted earnings per share. Management credited the quarter's performance to higher net interest margin, disciplined credit management, and stable deposit growth. CEO Mark Hardwick highlighted that "net interest margin expanded to its highest level in more than two years," driven by a favorable shift toward higher-yielding loans and proactive portfolio management. The company also noted that previously identified problem credits were resolved as planned, limiting new provision expenses and stabilizing asset quality. Is now the time to buy FRME? Find out in our full research report (it's free). - Revenue: $205.3 million vs analyst estimates of $203.9 million (19.1% year-on-year growth, 0.7% beat) - Adjusted EPS: $1.10 vs analyst estimates of $1.04 (5.4% beat) - Market Capitalization: $2.54 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. - Daniel Tamayo (Raymond James) pressed for details on how much of the new nonaccrual loans would be charged off next quarter and whether reserves would remain stable. CFO Michele Kawiecki clarified that not the full amount would be charged off and reserve coverage ratios are expected to remain in the low to mid-1.30% range. - Russell Gunther (Stephens) asked about the drivers of anticipated loan growth and the impact of interest rates on demand. President Michael Stewart explained that core commercial and asset-based lending segments have strong pipelines, while higher rates mainly impact consumer mortgage demand. - Damon Del Monte (KBW) inquired about the outlook for fee income, especially mortgage banking and noninterest income. Kawiecki said fee income should remain stable, with gains from new business lines like SBA and first lien HELOCs offsetting softness in mortgage banking. - Nathan Race (Piper Sandler) questioned if expense growth would include new banker hires, especially in Michigan. Stewart confirmed that expansion in Michigan is a focus due to market opportunities, but overall team size is largely stable elsewhere. - Brendan Nosal (Hovde Group) sought clarification on the decline in the shared national credit (SNC) portfolio and risk appetite. Stewart and Chief Credit Officer John Martin explained this was due to selective participation decisions and normal renewals, not a broad portfolio strategy shift. In the coming quarters, the StockStory team will be monitoring (1) the pace and mix of loan growth across commercial and consumer segments, (2) the impact of expense investments on deposit gathering and organic expansion, and (3) credit performance as the bank works through the resolution of existing problem loans. Successful integration of new hires in Michigan and the sustained execution of the company's relationship-based growth strategy will also be critical signposts. First Merchants currently trades at $41.41, up from $39.96 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it's free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

This article first appeared on GuruFocus. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Net interest margin expanded 6 basis points to 3.44%, the highest in over two years, driven by higher loan yields and disciplined pricing. - Adjusted EPS increased 11% year-over-year to $1.10, and adjusted pre-tax-provision earnings grew 19% to $83.7 million. - Deposits grew 4.2% annualized, with non-interest-bearing deposits at 22% of total, supporting strong core funding. - Credit quality remains stable with non-performing assets at 57 basis points of total assets and net charge-offs in line with guidance. - Capital position is strong with total risk-based capital ratio of 13.58% and tangible common equity ratio of 8.83%, above the 8% target. - Loan growth was modest at 1.8% annualized, with commercial loans flat due to payoffs in sponsor finance and shared national credit portfolios. - Non-interest expense increased $3.9 million linked-quarter, driven by higher marketing, health insurance, and a building lease impairment, exceeding prior guidance. - Tangible book value per share declined 3.2% linked-quarter due to negative impact from AOCI amid higher interest rates. - Consumer mortgage pipeline is softening due to elevated mortgage rates, with refinancing activity nearly nil and purchase activity slowing. - Net charge-offs were elevated at $29.4 million, including $29 million related to two previously identified problem credits, though reserves were already established. - Warning! GuruFocus has detected 8 Warning Signs with FRME. - Is FRME fairly valued? Test your thesis with our free DCF calculator. Q: Daniel (Raymond James) asked for clarity on credit costs, specifically whether the ~$22 million of new non-accruals would be fully charged off in Q4 and whether reserves should remain stable as a percentage of loans. A: John Martin (Chief Credit Officer) clarified that the full amount of those loans will not be charged off. He guided full-year net charge-offs toward the lower end of the prior 4045 bps range, closer to 3840 bps for the full year. He added that Q4 reserving will largely relate to portfolio growth, with no new specific reserves expected beyond what has already been established. Q: Daniel (Raymond James) asked where a more normalized credit level should settle as the company looks into 2027, from both a provision and charge-off perspective. A: John Martin (Chief Credit Officer) said a more normalized charge-off run rate is likely in the 2025 bps range, up from his prior 1520 bps expectation, with provision expense tracking that level. Michelle Kabieski (CFO) added that once the large credits resolve and exit non-performing in Q4, specific reserves of roughly $10 million should resolve, bringing the coverage ratio from 1.38% to the low-to-mid 130s, which she expects going forward with new growth. Q: Russell Gunther (Stevens) asked about the drivers of expected mid-single-digit loan growth in Q4 and whether any absolute rate level would threaten the 6%8% growth target through demand destruction. A: Mike Stewart (President) attributed lighter Q3 growth to deliberate management of the sponsor and shared national credit portfolios, while community/corporate banking, investment real estate, and asset-based lending showed strong production. He expects a return to mid-single-digit growth in Q4 as payoffs and purposeful credit exits moderate. On rates, he said consumer mortgage pipelines are softening with mortgage rates in the 7s (refi business "nil"), and higher rates may cause some commercial real estate projects or capex/acquisitions to be rethought, but he does not view rates as hurting demand outside consumer mortgage. Q: Russell Gunther (Stevens) asked about potential continued NIM expansion in Q4, focusing on loan yields and what to expect in a rising rate environment. A: Michelle Kabieski (CFO) expects the Q4 margin to be stable. Normally a September rate hike would lift the margin 12 bps given the asset-sensitive balance sheet and asset repricing tailwinds, but a full quarter of sub-debt interest expense will offset that. She noted September loan yields dipped on flat growth and lower fees, but expects loan yields and interest income to rise from Q3 to Q4, with continued modest margin lift into 2027 once sub-debt expense normalizes. Q: Russell Gunther (Stevens) noted Q3 expenses came in above guidance and asked about the Q4 expense outlook and a normalized growth rate for 2027 that covers tech and talent investment while delivering positive operating leverage. A: Michelle Kabieski (CFO) said the elevated Q3 level stemmed from a strategic decision to invest more in marketing and branding to win deposits organically, and that the Q3 run rate is a good base for Q4. For 2027, she guided to a 3%5% expense increase on top of that level. Q: Damon Delmonte (KBW) asked about mortgage banking gain-on-sale income in Q4 given the tougher rate environment and how that translates to the overall non-interest income outlook. A: Michelle Kabieski (CFO) noted about $700,000 of one-time items (including CRA income) in Q3 that won't recur, and said loan sale gains could be somewhat softer, but overall fee income should be fairly consistent with Q3. Mike Stewart (President) added that new verticalsthe SBA business and first-lien HELOC businessare contributing gain-on-sale income that wasn't present a year ago. Q: Damon Delmonte (KBW) asked whether card payment and wealth management should be viewed as high-single-digit growth engines for 2027. A: Michelle Kabieski (CFO) said client-related fee categories are expected to grow at a higher single-digit rate of roughly 8%10% in 2027. Q: Damon Delmonte (KBW) asked whether the company remains committed to share buybacks following the subordinated debt offering and whether additional repurchases should be expected. A: Michelle Kabieski (CFO) confirmed the commitment, noting the company was in a quiet period earlier in the quarter. She said some sub-debt proceeds will fund buybacks, with an elevated level of repurchase activity expected in Q4 and potentially Q1, and that the intention is to stay in the repurchase game. Q: Nathan Race (Piper Sandler) sought confirmation that provisioning is not expected to cover Q4 charge-offs given specific allocations already in place. A: John Martin (Chief Credit Officer) confirmed this, explaining that the new non-accruals working through were specifically reserved for in prior quarters and are already in the allowance. Q: Nathan Race (Piper Sandler) asked whether commercial banker or production-related hires are contemplated in the 3%5% 2027 expense growth outlook, and whether disruption in the footprint creates hiring opportunities. A: Mike Stewart (President) said the company remains opportunistic, especially in Michigan following the Fifth Third/Comerica integration as bankers become available, and is actively looking to add bankers who would immediately add valueany salary increase should come with a corresponding production increase. Outside Michigan, he feels the core team is strong after 18 months of investment. Q: Nathan Race (Piper Sandler) asked incoming CEO Mike Stewart about initiatives he plans to accelerate or potential balance sheet optimization to enhance earnings power. A: Mike Stewart (President) emphasized continuityexecuting with the existing executive and senior management team is job one. He noted the company is deep into a strategic planning initiative started a year ago to help with choices around resourcing teams and staff, with the goal of continuing to grow EPS and tangible book value and supporting a strong valuation. Q: Brian Martin (Janney For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Regional banking company First Merchants (NASDAQ:FRME) reported Q3 2026 results topping the market's revenue expectations , with sales up 19.1% year on year to $205.3 million. Its non-GAAP profit of $1.10 per share was 5.4% above analysts' consensus estimates. Is now the time to buy FRME? Find out in our full research report (it's free). - Revenue: $205.3 million vs analyst estimates of $203.9 million (19.1% year-on-year growth, 0.7% beat) - Adjusted EPS: $1.10 vs analyst estimates of $1.04 (5.4% beat) - Market Capitalization: $2.51 billion First Merchants delivered a positive third quarter, with results that exceeded Wall Street's expectations for both revenue and adjusted earnings per share. Management credited the quarter's performance to higher net interest margin, disciplined credit management, and stable deposit growth. CEO Mark Hardwick highlighted that "net interest margin expanded to its highest level in more than two years," driven by a favorable shift toward higher-yielding loans and proactive portfolio management. The company also noted that previously identified problem credits were resolved as planned, limiting new provision expenses and stabilizing asset quality. Looking forward, management believes that continued focus on organic loan growth, disciplined expense management, and selective talent investments will support sustainable earnings. Outgoing CEO Mark Hardwick emphasized the company's "resilient Midwest markets and relationship-based model" as key to maintaining growth momentum. CFO Michele Kawiecki noted that while marketing and tech investments are expected to increase expenses by 3% to 5% next year, these are intended to "help us win organically, particularly in deposit gathering." The transition to new CEO Mike Stewart is expected to maintain strategic consistency while exploring further balance sheet optimization and growth initiatives. Management attributed the quarter's outperformance to net interest margin expansion, successful resolution of legacy credit issues, and steady deposit and loan growth, while also highlighting benefits from the First Savings integration and disciplined cost control. - Net interest margin expansion: The net interest margin increased to 3.44%, the highest in over two years, supported by higher loan yields and a shift in earning asset mix from lower-yielding investments to loans. Management cited pricing discipline as a key contributor to this trend. - Credit performance stable: The company resolved previously identified problem loans with charge-offs and provisions in line with prior guidance, resulting in stable nonperforming assets at 57 basis points of total assets. Management emphasized that new nonaccruals were already reserved for, minimizing unexpected losses. - Deposit growth driven by consumer segment: Deposits grew at a 4.2% annualized rate, with particular strength in consumer and private wealth business lines. The company continues to focus on core funding to support loan growth while maintaining a disciplined balance sheet. - Expense management and strategic investment: Noninterest expenses increased primarily due to higher marketing and technology spend, with management positioning these as investments to drive future organic growth and deposit wins. The efficiency ratio improved, reflecting ongoing cost discipline despite these targeted investments. - First Savings integration complete: The acquisition and integration of First Savings contributed significantly to year-on-year loan and deposit growth, while management highlighted that organic loan growth remains a focus for the coming quarters. First Merchants' outlook is shaped by targeted loan growth, continued margin discipline, and selective expense increases aimed at supporting organic expansion and operational resilience. - Loan growth focus: Management expects mid-single-digit annualized loan growth in the next quarter, particularly from core commercial and asset-based lending segments. While consumer mortgage demand is softening due to higher interest rates, commercial pipelines remain stable, and new banker hires in Michigan are expected to add production capacity. - Margin and expense dynamics: CFO Michele Kawiecki anticipates stable net interest margins in the near term, with modest expansion possible in 2027 as sub-debt costs normalize. Expenses are projected to rise 3% to 5% next year, mainly from elevated marketing and technology investments intended to drive organic growth and support deposit gathering. - Credit cost normalization: The company expects credit costs to return to normalized levels of 20–25 basis points of loans once current problem credits are resolved, with provision expenses tracking closely to portfolio growth. Management does not anticipate material new reserves unless new credit issues arise. In the coming quarters, the StockStory team will be monitoring (1) the pace and mix of loan growth across commercial and consumer segments, (2) the impact of expense investments on deposit gathering and organic expansion, and (3) credit performance as the bank works through the resolution of existing problem loans. Successful integration of new hires in Michigan and the sustained execution of the company's relationship-based growth strategy will also be critical signposts. First Merchants currently trades at $40.93, up from $39.96 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it's free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it's flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

First Merchants came into this earnings season with a reputation as a steady Midwestern bank and a stock that had drifted, with the share price down over the past three months despite small gains in the last week. Q3 2026 snapped that narrative. The company posted earnings per share of US$1.09 on revenue of US$195.8 million, and the market reacted, with the stock climbing about 2% today. The focus this quarter is on profitability. Net income of US$67.8 million and a stronger net interest margin point to a franchise that is extracting more value from its balance sheet than the recent share price suggested. Like the profitability trend at First Merchants but want a wider set of banks and financials with sturdy balance sheets to compare it against? Line this quarter up against our list of solid balance sheet and fundamentals stocks (26 results) to see how it stacks up on resilience and fundamentals. - Revenue (Q3 2026 vs. Q3 2025): US$195.8 million compared with US$161.8 million (up about 21%) - Net Income (Q3 2026 vs. Q3 2025): US$67.8 million compared with US$56.3 million (up about 20%) - Basic EPS (Q3 2026 vs. Q3 2025): US$1.09 compared with US$0.98 (up about 11%) - Net Interest Margin, NIM (Q3 2026 vs. Q3 2025): 3.44% compared with 3.24% (higher margin on earning assets) Earnings tell part of the story, but investors who care about what they are paying often pay closer attention to the cash that actually comes in and out of a business over time. When you look at First Merchants' cash flows rather than just this quarter's profit print, the stock could be a striking 48% undervalued. Optimists argue First Merchants is quietly building a higher earning, more fee rich franchise. The key ambition is clear. "Investments in digital platforms and internal tech efficiencies are starting to show up in the numbers, with Q2 2026 pretax pre provision earnings up 7.5% quarter on quarter to US$84.6m and 2% positive operating leverage. This signals ongoing potential for better net margins and earnings as revenue growth stays ahead of expense growth." Q3 results are consistent with that picture. Adjusted pre tax pre provision earnings were US$83.7m, with ROA at 1.30% and PTIPP ROA at 1.59%. NIM reached 3.44%, and the adjusted efficiency ratio improved to roughly 53.9%, which indicates expenses remain under tight control. The worry has been that credit issues and expensive capital could quietly weaken the story. That concern is specific and testable. "Greater use of higher cost capital instruments, such as the recent $100m of 6.75% subordinated notes, could offset the benefit of share repurchases and dividends if earnings growth does not keep pace with the additional interest expense. This would limit growth in earnings per share and reduce flexibility for future capital returns." Q3 illustrates the trade off in motion. First Merchants issued US$100m of subordinated notes while repurchasing US$50.3m of stock year to date. EPS was US$1.09, up year on year, and CET1 of 11.22% indicates capital capacity. Management has also indicated that subordinated debt interest will partially offset margin gains in Q4. The price and this Narrative do not agree. → Uncover what this Narrative says First Merchants is actually worth. First Merchants just showed how a single quarter can reset expectations without rewriting the whole story. The real opportunity sits in finding stocks that could be undervalued before sentiment catches up. - Company 1 - 41% below our estimate - taps AI data center and defense hardware demand while investing in higher end manufacturing capacity. - Company 2 - 50% below our estimate - shifts a lending focused model toward larger recurring fee streams as acquired branches are integrated onto a single platform. - Company 3 - 23% below our estimate - turns a cardiometabolic and obesity drug portfolio into a production scale up story tied to broader insurance coverage. Those are three of them. See every one of the 30 undervalued companies on it → 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]

- First Merchants reported third quarter 2026 net income of US$68.32 million on net interest income of US$161.07 million, with basic and diluted EPS from continuing operations of US$1.09 and a sharp increase in quarterly net charge offs to US$29.389 million. - The bank combined higher net interest income and earnings per share with active capital management through US$12 million of share repurchases and ongoing preferred dividends, while preparing for a CEO transition planned at year end 2026. - We will now look at how First Merchants' investment narrative is affected by its stronger net interest income and earnings beat. Capitalize on what First Merchants' earnings and credit trends reveal about bank risk by lining up potential alternatives from our 30 resilient stocks with low risk scores. To own First Merchants, you need to be comfortable with a straightforward banking story. The business leans on Midwestern loan and deposit growth, an improving net interest margin and tight cost control. The latest quarter supports that thesis on earnings and revenue, but the sharp jump in net charge offs keeps credit quality at the center of the near term story. The key short term swing factor is whether recent problem credits stay contained while loan and deposit pipelines keep feeding net interest income. The biggest risk is that elevated charge offs or additional classified loans persist and eat into earnings just as First Merchants works to redeploy assets into higher yielding loans. The most relevant update here is the reported US$29.389 million of net charge offs in the third quarter, compared with US$5.148 million a year earlier. That size of move matters for a regional bank because it goes straight through the income statement and interacts directly with capital and future lending capacity. Viewed alongside the earnings beat and higher net interest income, the spike in charge offs gives you a clear view of execution risk. If credit costs stay closer to this level, it could blunt the benefit of loan growth, balance sheet remixing and capital returns, and it keeps risk management discipline as a core catalyst to watch. First Merchants' current analyst narrative points to revenues of US$985.3 million and earnings of US$347.2 million by 2029. This outlook is anchored on forecast revenue growth of 15.3% a year and an earnings increase of about US$163 million from current earnings of US$184.1 million. Discover how First Merchants' fair value indicates a 15% potential upside to its current price that may not last much longer. Two fair value estimates from the Simply Wall St Community sit wide apart, from US$47 to about US$78, which shows how far opinions on First Merchants can stretch. When you set that against rising net charge offs, new subordinated debt costs and active buybacks, you can arrive at very different readings on risk and reward. Use that spread as a prompt to explore several contrasting views before deciding where you sit. Explore another First Merchants fair value estimate, including one that suggests it could be worth just $47.00. Don't just follow the ticker, dig into the data and build a conviction that's truly your own. - A great starting point for your First Merchants research is our analysis highlighting 3 key rewards that could impact your investment decision. - See our latest analysis for First Merchants. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate First Merchants' overall financial health at a glance. If First Merchants has sharpened your sense of bank risk and reward, you can use that same lens to line up other candidates with balance sheets and cash flows that better match your comfort level. - If resilience is your priority, you can start with companies that score well on financial strength and cash coverage using the list of solid balance sheet and fundamentals (26 results). - If value is front of mind, you can focus on shares that combine quality fundamentals with what may be appealing entry prices through the 30 high quality undervalued stocks. - If income matters most to you, you can concentrate on businesses offering higher yields that the Screener identifies as potential 6 dividend fortresses. 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]

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Chief Executive Officer - Mark K. Hardwick - President - Michael J. Stewart - Chief Credit Officer - John J. Martin - Chief Financial Officer - Michele Kawiecki Operator: Thank you for standing by, and welcome to the First Merchants Corporation Third Quarter 26 Earnings Conference Call. Before we begin, management would like to remind you that today's call contains forward-looking statements with respect to the future performance and financial condition of First Merchants Corporation. That involve risk and uncertainties. Further information is contained within the press release which we encourage you to review. Additionally, management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on the website contains financial and other quantitative information to be discussed on today's call as well as a reconciliation of GAAP to non-GAAP measures. As a reminder, today's call is being recorded. I will now turn the conference over to Mark K. Hardwick, CEO. Mr. Hardwick, you may begin. Mark K. Hardwick: Good morning, and welcome to First Merchants Third Quarter 26 Conference Call. Thanks for the introduction and for covering the forward looking statement on Page 2. We released our earnings yesterday after markets closed and today's presentation materials are available via the link on Page 3 of the earnings release. Turning to Slide 3, you will see today's presenters and members of the executive management team. Joining me on today's call are Mike Stewart, our president John J. Martin, our chief credit officer and Michele Kawiecki, our chief financial officer. Slide 4 highlights our footprint and financial scale. We operate 126 banking centers across Indiana, Michigan, and Ohio. Total assets stand at 21.1 billion with $15.6 billion in loans, $16.9 billion in deposits, and 7.1 billion in assets under advisement. Turning to Slide 5. Third quarter net income totaled 67.8 million or $1.09 per diluted share. Earnings per share are up 11% from the third quarter of last year and up nearly 30% from the third quarter of 2 thousand 24. Excluding a small amount of remaining acquisition related expenses adjusted earnings per share for the quarter totaled $1.10 Last quarter, I said that we believe that the key factors were in place for improved performance in the second half of the year. The third quarter delivered on that belief. Net interest margin expanded 6 basis points to 3.44% our highest margin in more than 2 years, and 20 basis points higher than the third quarter of 25. Fully taxable equivalent net interest income has grown 20% over the past year. Adjusted pretax pre provision earnings totaled $83.7 million up 19% from a year ago, and an adjusted pretax pre provision ROA totaling 1.59%. Return on assets was 1.30% return on tangible common equity was 15.09%. We also made meaningful progress with the 2 commercial credits we discussed last quarter. Net charge offs on those 2 loans were in line with the specific reserves we established in the second quarter. Non performing assets were stable at 57 basis points of total assets. Credit cost, for new non accrual loans were recognized in prior quarters keeping this quarter's provision expense to a modest $3.3 million Year to date net charge offs of 38 basis points remain consistent with the full year outlook we provided last quarter. Deposits grew $175.6 million or 4.2% annualized and noninterest bearing deposits now represent 22% of total deposits. Loan growth was more modest at 1.8% annualized. Year to date results on Slide 6 reflect the earnings power of a combined company now that First Savings acquisition and integration are fully behind us. Excluding acquisition related expenses, and the first quarter mortgage loan sale adjustment. Adjusted EPS totaled $2.87. Up nearly 16% from the same period 2 years ago. Adjusted pretax pre provision earnings totaled $247 million up 18% from last year and 24% from 2 years ago. And our adjusted efficiency ratio improved to 53.85%. Our capital position remains strong. We completed a $100 million subordinated debt issuance in late September Our total risk based capital ratio increased to 13.58% and we repurchased 50.3 million of common stock year to date. Including $12 million in the third quarter. Tangible common equity was 8.83% with the decline in tangible book value this quarter driven by the impact of higher interest rates on AOCI rather than our operating performance. Now Mike Stewart will discuss our line of business momentum. Michael J. Stewart: Thanks, Mark. I will start on slide 17. Business strategy. Our primary business strategy is to build on our Midwestern strength through disciplined organic growth. Our goal is to be the bank of choice across the Midwest, earn through trusted relationships. Our 4 core business lines continue to work together to deliver financial solutions for businesses and consumers across the markets we serve. We are focused on driving organic growth by concentrating on the client segments in the markets where we hold a competitive advantage and by deepening relationships across our commercial and consumer banking. Lines of business. We have made meaningful progress building a stronger more focused growth engine that is supported by deep client relationships disciplined capital deployment, and continued investment in the capabilities needed to serve our clients and communities. Our Midwest markets remain resilient and our relationship based model continues to create opportunities for growth As we engage with clients every day, we see businesses investing, expanding, and seeking trusted financial partners who can provide a broad range of solutions. Turning to Slide 8, a few more comments on loans. After a strong second quarter, third quarter loans, like Mark said, increased at 1.8% annualized rate. With strong growth coming from the construction and mortgage loan portfolio. Overall, commercial loans were relatively flat as solid production did occur within our community and corporate banking segments, our asset based and investment real estate teams, but that could not outpace the normal course payoffs within the sponsor finance and the shared national credit portfolios. Pipelines overall are stable. So loan growth should continue through the fourth quarter in the mid single digits. Slide 9, deposits. We continue to focus on our deposit gathering and deepening relationships across both the commercial and consumer side of the business. Our objective is to support loan growth with strong core funding while maintaining a disciplined approach to the balance sheet. Third quarter deposits grew at a 4.2% annualized rate. With the consumer line of business and specifically the private wealth team driving the increase. We spoke last quarter about 1 of our clients selling a business which resulted in a large and temporary increase in the commercial deposit base. That client has now moved those balances to our private client team for investment services and distributed some of the cash they needed to along the way. The 0.5% annualized year to date decline in total deposits is primarily now the result of balance sheet repositioning from the first quarter with First Savings Bank broker deposits being eliminated. On a year to date basis, consumer non maturity deposits continue to show growth of 3% and net increases in households, and as noted on this page, our core commercial loans also grew. So I will turn it now over to Michele for her detailed summary of the balance sheet income statement. Michele? Michele Kawiecki: Thanks, Mike, and good morning, everyone. Slide 10 covers our third quarter performance. Total revenues continued to grow in Q3 with net interest income increasing $2.1 million or 1.3% and noninterest income increasing $800 thousand linked quarter. This resulted in healthy pretax pre-provision earnings for the quarter. Tangible book value per share of $28.86 decreased $0.94 or 3.2% linked quarter due to the impact of AOCI from changes in interest rates during the quarter. Slide 11 shows our year to date results Lines 1 through 4 at the top of the page show the growth of our balance sheet over the past 12 months with loans increasing $2 billion or 14.6% and deposits increasing $2.1 billion or 13.8%. At the same time, the lower yielding investment portfolio declined $258 million as we continued to shift our earning asset mix toward higher yielding loans. Of the $2 billion increase in loans, the majority came from the acquisition of First Savings in the first quarter. Excluding loans acquired from First Savings, and the impact of the mortgage loan sale activity in the second quarter, we generated organic loan growth of 473.7 million or 3.5% over the past 12 months reflecting continued demand across our markets. Looking at the income statement in the middle of the page, net interest income increased $74.3 million or 18.7% benefiting from growth and lower funding costs and our year to date net interest margin of 3.39% was 16 basis points higher than the same period in the prior year. Noninterest income increased $17 million when excluding the $29.8 million loss on mortgage loans sold in the second quarter. All together, total revenue grew nearly 19% on a normalized basis with first savings contributing approximately 13% of that growth. Slide 12 shows the details of our investment portfolio. The bond portfolio declined $168 million linked quarter to 3.1 billion due to principal paydowns and maturities as well as a decline in the portfolio valuation due to interest rate changes. Expected cash flows from scheduled principal and interest payments bond maturities over the next 12 months totaled $271.4 million with a roll off yield of approximately 2.11%. We plan to continue to use this cash flow to fund higher yielding loan growth in the near term. Slide 13 covers our loan portfolio. The loan portfolio yield increased 12 basis points from the prior quarter to 6.23%. During the quarter, new and renewed loans originated at an average yield of 6.34% compared to 6.28% in the prior quarter which continues to be a tailwind for the overall portfolio yield and reflects the pricing discipline from our team. The allowance for credit losses is shown on slide 14. This quarter, we recorded $3.3 million in provision and had net charge offs of 29.4 million As a result, the allowance for credit losses totaled 215.5 million at the end of the quarter representing a coverage ratio of 1.38%. Slide 15 shows details of our deposit portfolio. Total deposits grew to 60.9 billion this quarter, and the rate paid on deposits increased 9 basis points to 2.16%, reflecting the competitive deposit pricing in our markets. Next, slide 16 shows a continued favorable net interest margin trend. Our net interest margin of 3.44% increased 6 basis points from prior quarter and 20 basis points over the past year. The yield on earning assets shown on line 4 increased 10 basis points to 5.56% driven by higher loan yields which more than offset the 4 basis point increase in interest expense shown on line 5. When comparing to the same period in the prior year, the yield on earning assets nearly returned to that level in the prior year, yet interest expense was 22 basis points less creating an attractive earnings profile. Next, on slide 17, Shows the details of noninterest income, which totaled $38 million for the quarter, an increase of $800 thousand over prior quarter. Customer related fees shown on the bottom right of the page totaled 34.3 million and were consistent with the prior quarter as growth in service charges, wealth management fees, and card payment fees offset a modest decline in gains on sales of loans. Moving to Slide 18, noninterest expense for the quarter totaled 116.3 million and included $900 thousand in acquisition related costs. Excluding acquisition costs, noninterest expense increased 3.9 million over the prior quarter, driven by higher marketing expense, employee health insurance costs, and $500 thousand on an impairment charge of a building lease. Slide 19 shows our capital ratios. The tangible common equity ratio declined 16 basis points to 8.83% due to the impact of AOCI but remains well above our 8% target. During the quarter, we purchased 287 thousand shares for $12 million bringing total share repurchases year to date to just under 1.3 million shares for $50.3 million. The $100 million subordinate debt issuance we completed during the quarter increased our total risk based capital ratio by 60 basis points bringing it to 13.58%. We remain well capitalized with the common equity tier 1 ratio at 11.22% and are well positioned to support continued balance sheet growth and disciplined capital return. That concludes my remarks, and I will now turn it over to John J. Martin to discuss asset quality. John J. Martin: Thanks, Michele, and good morning. My remarks begin on Slide 20. Overall, the loan portfolio remains well diversified across commercial and consumer lending categories. With total loans of $15.6 billion at quarter end. Commercial real estate concentration levels remain well within regulatory guidelines with total CRE at 182% of total risk based capital and construction at 42% leaving meaningful capacity relative to the regulatory concentration thresholds of 300% and 100%, respectively. Within the commercial portfolio, line utilization remains stable at approximately 49%, Shared national credit exposure declined to $936 million across 88 borrowers, while sponsor finance totaled approximately $811 million across 91 companies in diverse industries. Overall, these measures continue to reflect a diversified portfolio and a disciplined approach to concentration and structural risk management. Turning to slide 21. Third quarter asset quality activity primarily reflects the continued resolution and migration of previously identified problem credits rather than broad based deterioration across the portfolio. We recognized approximately $29 million of charge related to the authorized wireless retailer and commercial and residential roofing contractor discussed last quarter with the associated provision expense having been recognized in the prior quarter. We also moved 2 larger relationships to nonaccrual during the quarter, an $18.4 million auto parts distributor and a $4.3 million digital marketing firm, Both had been under stress for multiple quarters and had already been downgraded specifically evaluated and specifically reserved in prior quarters. Before moving to nonaccrual in the third quarter. That timing is important to understand--the core is important to understanding the quarter. Although these relationships were newly reported as nonaccrual in the third quarter, the expected loss content had already been recognized through specific reserves established in prior periods. Consequently, their migration to nonaccrual did not create a significant new provision requirement As such, total third quarter provision expense of $3.3 million was deemed sufficient to cover growth new credit migration, and the impact of the economic forecast. We expect these new non accrual relationships to be resolved during the fourth quarter. Moving to slide 22. Net nonperforming asset migration was essentially flat during the quarter. New non accrual inflows including the 2 relationships just discussed, and several smaller additions, were offset by charge offs and other resolution activity. The significant charge offs recognized this quarter were tied to the loss content of credits that moved to nonaccrual last quarter and had been reserved for at that time. In summary, reported credit activity remained elevated as we continue to work through a limited number of known problem relationships. However, the quarter did not reflect a comparable increase in newly identified loss content. The largest charge offs were previously provided for, and the largest new non accruals had specific reserves established in prior quarters. Outside of these relationship specific credits, portfolio performance remains generally stable, We remain focused on proactive portfolio management timely recognition of risk, discipline reserving, and the orderly resolution of problem assets. I will now turn the call back over to Mark. Mark K. Hardwick: Thanks, John. Turning now to slide 23, our long term track record of shareholder value creation remains a key strength and a priority. Over the past decade, earnings per share has grown at an 8.5% compound annual growth rate. Dividends per share at 13.3%, and tangible book value per share, excluding AOCI, at 8.5%. Slide 24 highlights our 11.2% total asset CAGR over the past decade, reflecting a consistent strategy of organic growth complemented by disciplined value accretive acquisitions that expand our demographic and geographic footprint. Before we open the line for questions, I would like to take a moment on a more personal note. As we previously announced, I will retire at the end of this year, and Mike Stewart will succeed me as chief executive officer. As such, this will. this is my final earnings call. I joined First Merchants in November 2000 as corporate controller Over the past 29 years, I have been privileged to serve as chief financial officer, chief operating officer, and now chief executive Those last 3 positions over the. Over a 24 year period. I could not have asked for a better place to spend my career. To our 2.2 thousand teammates, thank you. Your dedication to our clients and our communities is what makes First Merchants special. And it is been an honor it is been the honor of my professional life to work alongside all of you. To our clients, thank you for trusting us with your financial lives and your businesses. To our board of directors, thank you for your guidance, your support, and your confidence over many years. And to our shareholders and the analysts on this call, many of whom I have known since my early days as chief financial officer. Thank you for your interest. Your challenging questions, and your investment in First Merchants. Those conversations have made us a better company. I have great confidence in Mike, he is been a trusted partner for 18 years. He knows our clients. He knows our markets. he is built strong teams across all of our lines of business. And together with Michael, John, and the rest of our leadership team, Mike and First Merchants are well positioned to build on our Midwestern strength deepen our client relationships, and deliver sustainable earnings growth and shareholder value. This company is in excellent hands and I look forward to cheering on First Merchants as a shareholder. Thank you for your continued support and investment in First Merchants. And operator, we are ready to take questions for the last time. Operator: Thank you. If your question has been answered or you wish to move yourself from the queue, please press 1-1 again. Our first question comes from Daniel Tamayo with Raymond James. Your line is open. Daniel: Thank you. Good morning, everyone. First, just wanted to say congrats on your retirement mark. Good luck in your endeavors, and we will definitely miss you on the call here. And then you know, in our dealings with First Merchants. And then congratulations to Mike on the new role. I guess my first question is just probably for John, actually, on credit cost. John J. Martin: I appreciate all the detail on the near term. So I just want to make sure that we kind of understand that. So the way to think about it is the 22 and change million of new nonaccruals will be charged off in the fourth quarter Is the way to think about that, the reserve should be relatively stable as a percentage of loans going forward? And is there anything else in terms of specific reserves that we need to be aware of, kind of near term? Michele Kawiecki: Yeah. Let me. Daniel, let me clarify. We are not going to charge off the full amount of those loans. And I think the way to think about it last quarter, I guided for the full year between 40 and 45 basis points for the year. And then kind of after reviewing those names and the portfolio for the end of the year, I would probably guide towards the lower of those 2. it is probably closer to 40. 38 to 40 basis points for the remainder of the year. Not for the quarter, but for the full year annualized. Or for the full year. Yep. That makes sense? John J. Martin: Yeah. that is helpful, John. Anything on the on the reserve levels going forward? And anything else in terms of specific reserves that we need to be aware of? You know, I think in terms of the reserving level, it is at this point, you know, the reserving is gonna largely be related to portfolio growth for, again, into the fourth quarter, as it relates to specific reserves or new specific reserves into the fourth quarter, I am not seeing or expecting anything at this point outside of, you know, what is previously been specifically reserved for. Okay. Daniel: The increase in. I apologize. I think I am I am remembering this correctly. There was an increase in criticized, small if it was, but anything to kind of read into with that other than you know, there is a lot of moving parts. But Right. Any color you can provide on that. John J. Martin: No. You know, the. They are both the criticized and classifieds were up somewhat for the quarter, but it was not related to you know, an individual large name or like that. it is just kind of normal migration that we see quarter to quarter. Higher rates, you know, do have an impact, and know, portions of the investment real estate portfolio, but it is not really a broad based concern that I have as it relates to the portfolio. it is just kind of new migrations that kind of come in and go out. We are constantly reviewing the portfolio and looking at grades and you know, how the borrowers are performing and in any given quarter, you can see an uptick or a downtick, but there is nothing there that I am concerned with at the moment. Okay. Daniel: Last question, and I will just keep it on the same topic. On credit. You know, just maybe help us given the volatility around credit kind of this quarter and next quarter, where and next quarter where you think the more normalized level should be kind of post that as we as we look into 2027? From a from a--yeah, either a provision or charge off perspective. Thanks. John J. Martin: Oh, from a provision or charge off perspective. You know, I had been kind of pre-the last quarter saying it was between 15 and 20 basis points. I would say probably on a more normalized basis, we are probably in the 20 to 25-basis point range. Would be a normal. Kind of a more normalized charge off run rate. Michele Kawiecki: And in terms of the provision expense, it will just obviously keep up with that, Michele. Yeah. And just to give you a little more color around provision, I mean, I think once John once we have these other large credits resolved and coming out of nonperforming in Q4. Would expect the specifics maybe to resolve around $10 million or so. So when you think about coverage ratio, it will be somewhere between, like, that mid 1 Right now, we are at 38. It will be, you know, low to mid 1 thirties, and that kind of coverage ratio is what we will expect to have going forward with new growth. Okay. Daniel: Great. Thanks for all the color, John, Michael. I will step back. Operator: Thank you. 1 moment for our next question. Our next question comes from Russell Gunther with Stephens. Your line is open. Russell Gunther: Good morning. Wanted to begin--yeah, morning. On the loan growth discussion. So appreciate the color you shared in terms of growth coming in a little lighter this quarter and sounds like you expect to return to your more traditional mid single digit clip in 4Q. Could you just give us a sense of the drivers or kind of mix of the anticipated growth next quarter? And then, you know, perhaps bigger picture, is there an absolute level of rates where you start to see demand destruction or pipeline fallout that puts that kind of 6% to 8% growth target at risk. Michael J. Stewart: Sure. Mike Stewart here. Go back to your first part of that question. The muted loan growth this time was as much just the management of a portfolio that sat really inside the sponsor and that shared national credit where we are selectively choosing where we want to play and how much we want to continue to grow that portfolio, If you look at the rest of the production level through the commercial book of business that what we call the community corporate bank and the investment real estate, and what we do with asset based lending, there was really good production numbers in those. So which is what I like. And to that point, those pipelines continue to be at really good levels. And the expected payoffs and or purposeful credit exits probably will not be at that same level in the fourth quarter. So back to that mid single digit expectation of loan growth. And I. Like I said, I am seeing that through our geographies, and I am seeing it through how we segment or go to market on our commercial business lines. When I go back to your second part of that question, interest rates and impact, Well, the pipeline on our consumer mortgage is definitely showing softness. You get mortgage rates that have a 7 You know, the refi business was already kind of slowing out nil. And purchases just became. just become a little bit less active, so to speak. So the pipeline on the consumer mortgage side is definitely being impacted now. That level is still a good level. it is just not where it would have been a year ago. When we look year over year understanding seasonality and quarter over quarter. When you look at. And to John's point, maybe, you look at where the interest rate impacts would be on a commercial portfolio, it is not bringing credit issues to bear, but it is having certain real estate projects potentially be rethought or business owners rethinking how they wanna potentially do some capital expenditures or do an acquisition. So that is just an end-of-the-year mentality maybe. Maybe it is rate. Maybe it is still a little uncertainty with tariffs and the general temperature, throughout business minds. But right now, I do not view interest rates hurting demand except for on the consumer mortgage. Russell Gunther: Okay. Got it. that is, very helpful. Thank you. And then switching gears, to the margin, Michele, it would be helpful to get your thoughts in terms of potential continued expansion. In the coming quarter and maybe focusing on loan yields. You know, appreciate where you shared where new production came on at. Perhaps if you could touch on kind of where they exited the quarter in September, and bigger picture, just what type of loan yield beta you would expect in a rising rate environment. Michele Kawiecki: Yeah. Good morning. Well, looking at our Q4 margin--I mean, I would expect our Q4 margin to be stable Normally, when we get a rate increase like we did in September, we would see our margin tick up a basis point or 2 because of our asset sensitive balance sheet. And the fact that we have got some really great tailwinds on asset repricing, not only on the loan side, but also on the bond portfolio. But I just wanted to remind you, I mean, this fourth quarter will be the first quarter that we will be absorbing a full quarter of interest expense from the sub debt, so that will offset a little bit of that increase. When I look at September, our September loan yields were down a little bit. It just simply because we had kind of flat growth in September and loan fees were lower. So I do not really use September kind of as an indication of where I think it is going to go. I feel like fourth quarter will be when you look at third quarter to fourth quarter, we should see loan yields increase interest income increasing. And so once we kind of normalize with our sub debt expense, I think when you look into 2027, we will continue to see a little bit of lift in margin. Russell Gunther: Okay, great. Very helpful. Thank you, Michele. And then just if I could sneak 1 more in on expenses. So results this quarter, I think a little higher than what I was thinking about at least. And maybe above where you would thought about, exiting the year around $114 million. So have your thoughts changed at all in terms of, you know, the near-term expense outlook in 4 q and then perhaps bigger picture as we start to think about for next year? Is there sort of a normalized growth rate to contemplate that would kind of cover your anticipated investment in tech and talent? And does that translate to positive operating leverage? Michele Kawiecki: Yeah. It is higher. This quarter was more elevated than we had guided, and really, it kind of came from a strategic decision we made to invest more in marketing and branding. Not just this quarter, but even on a go forward basis. To help us kind of win organically, particularly in the deposits in our markets. And so I do think for this Q3 run rate, is a good run rate to use for Q4. And I think when we look into 2027, as I have guided before, I think it is 3% to 5% expense increase on top of that is really what I think would make sense for us Got it. Russell Gunther: Okay. that is it for me, guys. Thanks for taking my question. Operator: Thank you. 1 moment for our next question. Our next question comes from Damon DelMonte with KBW. Your line is open. Damon Del Monte: Hey, good morning, everyone. First off, Mark, congrats on the upcoming retirement. Been a pleasure working with you over the last decade or so, and wish you nothing but the best going forward. And, Mike, welcome to the new role. Gotten to know you in the last few years. So look forward to continuing, the journey with you. My first question, probably more for Michele here on fee income. You know, mortgage banking held up pretty well this quarter. But as we progress through the quarter and then with the rate hike and kind of where mortgage rates have been, last couple weeks, it seems like it is becoming a more challenging environment. So just curious on your thoughts on kind of gain-on-sale income here in the fourth quarter and then kind of how that translates into an outlook for all of noninterest income? Michele Kawiecki: In the fourth quarter. Yeah. I mean, for fourth quarter, I mean, I feel well, I should say first, we had just a couple of onetime items, some CRA income and so forth. It really amounted to maybe $700 thousand. It was relatively needed that will not recur in Q4. And as Mike said, you know, I do think that maybe gains on sale of loans could be a little bit softer. But by and large, we feel like we should be able to deliver a pretty consistent level of fee income in Q4 that we did in Q3. Michael J. Stewart: And talk about the new verticals that we have and some of the gain on sale. We would not have had this time last year. When I think about the SBA business and the first lien HELOC business. We are picking up some gain on sale there that we would not have had a year ago. Damon Del Monte: Got it. Okay. Okay. And then as you look out into 2027, you know, do we think about kind of, you know, card payment and wealth management as being like high single digit growth engines for you there? Michele Kawiecki: Yeah. I mean, I think, when we look at particularly the client related fee categories, which we break out on our slides, you know, we do expect those categories to grow kind of in that higher single digit somewhere between, like, that 8% to 10% rate So that is what we would expect for 2027. Damon Del Monte: Okay. Great. And then I guess lastly, with the sub debt offering, I think you noted at the time of that, that gives you more flexibility to remain supportive of the shares with a buyback. So just curious on your thoughts. Are you still kind of committed to that? Can we expect additional buyback over the coming quarters? Michele Kawiecki: Yeah. Definitely. You know, we were in a black. We were in a quiet period really, I think, so far through this quarter just because of earnings and other announcements and so forth. But we will use some of that sub debt to buy back shares and I think you will see an elevated level of share buyback in Q4 maybe potentially in Q1 as well. But it is our intention to continue to stay in the repurchase game Okay. Damon Del Monte: Great. Well, thanks. And, Mark, good luck. We will talk soon. Mark K. Hardwick: Yeah. Thank you, Damon. Operator: You. 1 moment for our next question. Our next question comes from Nathan Race with Piper Sandler. Your line is open. Nathan Race: Just want echo the earlier comments. Mark K. Hardwick: Congratulations. Mark. Nathan Race: And Mike, look forward to working with you in the future. More so. Just wanna clarify going back to John's comments around kind of the near-term provisioning outlook. it is. Does not sound like you expect provisioning to cover the expected charge offs in the fourth quarter just given that you have some specific allocations already in place. Is that the right way to think about it? John J. Martin: Yes. Yeah. Okay. The new non accruals that you know, are working their way through obviously, those are the ones that are specifically reserved for in prior quarters. And are in the allowance Okay. Nathan Race: Great. And then Michael, if you are just going back to your comments around, kind of, you know, hopefully getting to the kind of middle to lower end of the range of the 3% to 5%. Expense growth outlook for next year. I am just curious, 1, if you could confirm that and, 2, to what extent are any kind of commercial banker or other kind of production-related hires contemplated in that figure? To the extent you are seeing kind of opportunities or disruption across your footprint to, add some high quality folks? Michael J. Stewart: Yeah. I will hit a little bit on that. We are remaining opportunistic and open to what might be coming our way, especially in the Michigan market. We are now on the back end of the integration. Of the Fifth Third-Comerica, and individuals are becoming available, so we are actively looking at where we could add bankers that would immediately add value. Michele Kawiecki: So if there is any increase on the salary side, I would expect to see the result increase on level of production When you think about other areas in which right now, I feel like we have got a really strong core team. We have built out and invested in some teams the last 18 months that have been benefiting us. Michael J. Stewart: So absent Michigan market, I think that is about the only place we will continue to look heavy Okay. Nathan Race: Great. And then, Mike, while I have you, just, you know, as you are taking over as CEO, and I know it is kind of early days in the transition period, just given the announcement last month. But just curious as you take the seat, is there any kind of particular initiatives that you are looking to accelerate? Or any potential changes that we can expect or any kind of balance sheet optimization that maybe looking at just to, maybe kind of enhance the earnings power? company going forward? Michael J. Stewart: Yeah. We have been talking a lot about those things. I wanna go back a little bit that you know, Mark's retirement really is nothing more than his opportunity in front of him. So the consistency of First Merchants and continue to execute with the existing executive team and the senior management team for me is job 1 is to build that consistency and assure that our clients and the rest of our teammates and you, our shareholders, have great comfort of that. As we look into 2027, we can look at things from a budget point of view, but we are also looking at things strategically. And we are really, deep into an initiative that I started and Mark's been supportive of a year ago to really analyze, and build a strategic plan that helps us with choices. We have got a nice. A varied balance sheet. We have got opportunities to continue to improve how we want to resource our teams and our staff and we are gonna make those come to life with all in the idea that we can continue to grow our earnings per share and our tangible book value. And it means that, it brings us back to some really strong valuation. Nathan Race: Okay. Good stuff. And if I could just sneak in 1 more housekeeping question. I apologize if I did not catch it, Michele, but just on the tax rate, for the fourth quarter and into 2027. Michele Kawiecki: 14%, I think, would be a good effective tax rate to use for the modeling. Nathan Race: Good. Great. I appreciate all the color. Everyone. Operator: Thank you. 1 moment for our next question. Our next question comes from Brian Martin with Janney Montgomery Scott. Your line is open. Analyst: Hey, good morning, everyone, and congrats to you guys, both on different roles here. I look forward to working with you, Mike, and, Mark, it is been a great journey over the years, and I wish you all the best in your retirement. So maybe just the first 1 for me was just on Mike, you talked about on kind of the loan pipelines and consumer where it is at. Maybe can you just give a little, you know, color, just some thoughts on where you are seeing the most opportunity on the commercial side as you look into 4Q and next year, given that seems to be a bigger focus given the consumer side at least right now. So just on kind of what you are thinking about it. You already touched on the, you know, potential rate outlook impact. So just, you know, or maybe it is for John. Either 1 of you. Michael J. Stewart: Well, we can both do it together. I think that where we are still seeing the best momentum and you see it continue in our pipeline is what we call in our community and our corporate bank. So in the market, bankers working with the businesses, that are right in our backyards, good C and I activity, outworking our competition, being in the Midwest, offers us some stability and growth opportunities as these owners are evaluating their plans into 2027. that is where I see the continued growth happen. John J. Martin: Yeah and I would agree. You know, the opportunities that we continue to see are our core C&I and even on a somewhat accelerated basis, the ABL, the asset based lending, portfolio where you have borrowers who need liquidity to grow their businesses, and, we have a quality group of individuals that have the controls and portfolio management skills that have allowed us to originate some real nice opportunities. So couple of places there. Investment real estate, you know, with higher rates, it does have an impact, but, you know, as long as they meet the capital hurdles, we can still. we still are finding opportunities there as well as some low income housing tax opportunities. Still continue to still continue to see those as well. So there is a lot of opportunities across the portfolio. Analyst: Okay. And those pipelines are both up from where they were a quarter ago or stable? Or just, you know, how are the pipelines? Michael J. Stewart: Yeah, those are, you know, in some segment, part of those. That commercial pipeline, it is modestly up. Quarter over quarter. I also look at things seasonal year over year, and it is stable to that means as well. Gotcha. Analyst: Okay. And then, secondly, maybe just for Michele on the margin--I mean, I guess, thanks for the comments on the fourth quarter and where the balance sheet's positioned here. Just maybe 2 things. Just with the rate environment and a couple rate hikes, can you just remind us of, you know, the impact from rate hikes and just how you are thinking about if we get a couple hikes going into, you know, the next couple quarters, how that plays out, and then just remind us the level of fixed rate loans in 2027 kind of what is repricing there? Michele Kawiecki: Sure. Yeah. So with each 25-basis point rate hike, we typically see margin increase 1 to 2 basis points. And so as I said, you know, normally, we would see 1 to 2 basis point lift with the September rate hike, but we are adding the cost of the sub debt, which will partially offset that. I think if we get an additional rate hike or 2, you will see some of that additional lift And so I think that is the way you can think about it. On the fixed rate portfolio over the next 12 months, we have got about 350 million that is at a 4.90 rate. That we will reprice. Analyst: Gotcha. Okay. Perfect. My other ones were already asked, so thanks for the time, guys. Operator: Thank you. 1 moment for our question. Our next question comes from Brendan Nosal with Hovde Group. Brendan: Hey, good morning, folks. Hope you are doing well. Just 1 for me at this point. Notice that the. the SNC book was down from $1 billion to $936 million quarter over quarter. Just kind of curious if this was due course in the book or if this was the result of anything intentional that you implemented in the portfolio following last quarter's wireless carrier credit out of that book? Michael J. Stewart: it is a little bit of both. Those account declines were. You know, they were coming up for just normal renewals or had some request in front of us. I mean, you know, we always look for how well have we cross sell the opportunity, what is the return we are getting on the opportunity, and where does it fit within our hold levels. And it is, all those transactions felt like they were ones we would be better not participating in. Brendan: Got it. And then to the extent that you have additional renewals coming up, Is more work that you would do in that portfolio just to kind of, you know, realign it with where your risk appetite is at now, or is most of that work complete at this point? Michael J. Stewart: I do not really have a good view on what is coming at us in the fourth and the first quarter as far as what is on their minds with we have got a really strong team in that area as well and we do have some fantastic relationships in that book of business. So it is just like anything. We look at it on a an individual basis, each time, and it is it will be, once something that we will evaluate. But I do not think there is any changes in front of me right now. I am looking at John as I say that. John J. Martin: Yeah. Yeah. it is--I would just repeat the first part of Mike Stewart's answer. In that, you know, we are looking at them transaction by transaction. it is not like we instituted a core portfolio model change or something of that nature. We look at you know, relationships as they come up and I think from my seat, as they come through and we discuss them, we are looking at the pricing, the cross-sell, the opportunity, how it fits to what happened last quarter as it relates to, you know, potential for loss and how much you know, maybe unsecured. Not unsecured, but air, to use a term in the transaction. But you know, that is. it is a risk management and, return exercise. Brendan: All right. Fantastic. Thanks for taking my questions. Operator: And I am not showing any further questions at this time. This concludes today's conference. Thank you for your participation. Have a great day. You may now disconnect. 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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. - Achieved the highest net interest margin in over two years at 3.44%, driven by disciplined loan pricing and a shift from lower-yielding investments to higher-yielding loans. - Successfully resolved two significant commercial credits identified last quarter, with charge-offs aligning with previously established specific reserves. - Reported modest loan growth of 1.8% annualized, as strong production in community and corporate banking was offset by intentional exits from sponsor finance and shared national credit portfolios. - Maintained a resilient deposit base with 4.2% annualized growth, supported by private wealth inflows and a strategic reduction in higher-cost broker deposits. - Improved the adjusted efficiency ratio to 53.85%, reflecting the realization of synergies following the full integration of the First Savings acquisition. - Strengthened the capital position through a $100 million subordinated debt issuance, providing flexibility for future organic growth and share repurchases. - Management expects loan growth to return to a mid-single-digit range in the fourth quarter as pipelines remain stable across core commercial segments. - Net interest margin is projected to remain stable in Q4, as asset sensitivity benefits are balanced by a full quarter of interest expense from the new subordinated debt. - Credit costs for the full year are guided toward the lower end of the previous 40 to 45 basis point range, with updated expectations specifically between 38 and 40 basis points., with new non-accruals expected to be resolved in the fourth quarter. - Expense growth for 2027 is forecasted at 3% to 5%, incorporating strategic investments in marketing, branding, and opportunistic talent acquisition in the Michigan market. - The company plans to maintain an elevated level of share repurchases in Q4 and Q1 2027, utilizing capital flexibility provided by recent debt issuance. - Recognized $29 million in charge-offs related to previously identified wireless and roofing sector credits; management noted these were fully reserved in prior periods. - Tangible book value per share decreased 3.2% linked-quarter, primarily due to the impact of higher interest rates on AOCI rather than operational performance. - Announced the retirement of CEO Mark Hardwick effective year-end, with President Mike Stewart named as successor to ensure leadership continuity. - Identified softening in the consumer mortgage pipeline as interest rates near 7% impact refinancing and purchase activity. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management anticipates a normalized net charge-off run rate of 20 to 25 basis points once current problem credits are resolved. - The allowance coverage ratio is expected to settle in the low-to-mid 1.30% range as specific reserves are utilized and the portfolio grows. - The $64 million decline in SNC exposure was a deliberate choice to exit relationships with insufficient cross-sell opportunities or inadequate returns. - Management emphasized a transaction-by-transaction review process rather than a broad portfolio model change, focusing on risk-adjusted returns. - Each 25-basis point rate hike is expected to provide a 1 to 2 basis point lift to the net interest margin due to the bank's asset-sensitive positioning. - Approximately $350 million in fixed-rate loans yielding 4.90% are scheduled to reprice over the next 12 months, providing a yield tailwind. - Primary focus is maintaining consistency and executing the existing strategic plan to grow earnings per share and tangible book value. - Management is conducting a deep-dive strategic analysis to optimize resource allocation and enhance the bank's valuation through 2027.

- Interested in First Merchants Corporation? Here are five stocks we like better. - Strong third-quarter earnings: First Merchants reported net income of $67.8 million, or $1.09 per diluted share, with adjusted EPS of $1.10. Net interest margin expanded to 3.44%, its highest level in more than two years, helping drive a 20% year-over-year increase in fully taxable equivalent net interest income. - Moderate growth amid credit issues: Loans grew at a 1.8% annualized rate, while deposits increased 4.2% annualized during the quarter. Net charge-offs totaled $29.4 million, but management lowered its full-year charge-off outlook to 38–40 basis points and said the main problem credits had been previously reserved. - Capital deployment and leadership transition: The bank strengthened capital through a $100 million subordinated debt issuance and repurchased $12 million of shares during the quarter, with potentially elevated buybacks ahead. CEO Mark Hardwick plans to retire at year-end, with President Mike Stewart set to succeed him. First Merchants (NASDAQ:FRME) reported third-quarter 2026 net income of $67.8 million, or $1.09 per diluted share, as the regional bank benefited from higher net interest income and margin expansion while continuing to address a limited number of previously identified problem loans. Chief Executive Officer Mark Hardwick said adjusted earnings per share, excluding remaining acquisition-related costs, totaled $1.10. Reported EPS rose 11% from the third quarter of 2025 and nearly 30% from the third quarter of 2024. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over The company, which operates 126 banking centers across Indiana, Michigan and Ohio, ended the quarter with $21.1 billion in assets, $15.6 billion in loans and $16.9 billion in deposits. First Merchants' net interest margin expanded 6 basis points from the prior quarter to 3.44%, its highest level in more than two years and 20 basis points above the year-earlier period. Fully taxable equivalent net interest income increased 20% year over year, according to Hardwick. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? Chief Financial Officer Michele Kawiecki said quarterly net interest income rose $2.1 million, or 1.3%, from the second quarter, while non-interest income increased $800,000 to $38 million. The yield on earning assets increased 10 basis points to 5.56%, driven by higher loan yields, while interest expense rose 4 basis points. Loan portfolio yield increased 12 basis points sequentially to 6.23%. New and renewed loans carried an average yield of 6.34%, compared with 6.28% in the prior quarter. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Looking ahead, Kawiecki said the company expects net interest margin to be stable in the fourth quarter. The benefit from the company's asset-sensitive balance sheet and loan repricing is expected to be partly offset by a full quarter of interest expense from $100 million in subordinated debt issued in late September. Management said each 25-basis-point rate increase has historically added approximately 1 to 2 basis points to margin. Kawiecki also said roughly $350 million of fixed-rate loans with an average rate of 4.90% are set to reprice during the next 12 months. Loans grew at a 1.8% annualized rate during the third quarter, following stronger growth in the second quarter. President Mike Stewart said growth in construction and mortgage loans was strong, while overall commercial loan growth was held back by normal payoffs in sponsor finance and shared national credit portfolios. Stewart said loan pipelines remained stable and management expects mid-single-digit loan growth in the fourth quarter. He cited continued opportunities in community and corporate banking, commercial and industrial lending, asset-based lending and selected investment real estate financing. Consumer mortgage demand has softened as rates remained elevated, Stewart said. Refinancing activity has become "nil," while purchase activity has slowed, although he said interest rates were not broadly hurting commercial loan demand. Total deposits increased $175.6 million during the quarter, or at a 4.2% annualized rate, led by the consumer business and private wealth team. Noninterest-bearing deposits represented 22% of total deposits. The average rate paid on deposits increased 9 basis points to 2.16%, reflecting competitive pricing conditions. On a year-to-date basis, total deposits declined at a 0.5% annualized rate, primarily due to the elimination of brokered deposits acquired through First Savings Bank, management said. Consumer non-maturity deposits rose 3% year to date. First Merchants recorded $29.4 million of net charge-offs and a $3.3 million provision for credit losses in the third quarter. The charge-offs primarily related to an authorized wireless retailer and a commercial and residential roofing contractor that had been discussed in the prior quarter. Chief Credit Officer John Martin said the associated provision expense for those credits had largely been recognized during the second quarter. The company also moved an $18.4 million auto parts distributor and a $4.3 million digital marketing firm to nonaccrual status during the quarter. Both relationships had been under stress, downgraded and specifically reserved in previous periods, he said. Nonperforming assets remained stable at 57 basis points of total assets. The allowance for credit losses totaled $215.5 million, equal to 1.38% of loans at quarter-end. Martin lowered his full-year net charge-off outlook toward the lower end of the company's prior 40-to-45-basis-point range, indicating an expectation for 38 to 40 basis points for the full year. He described a normalized future charge-off run rate as approximately 20 to 25 basis points. Management expects the two newly reported nonaccrual relationships to be resolved in the fourth quarter. Kawiecki said that as specific reserves are resolved, the company expects its allowance coverage ratio to settle in the low-to-mid 130-basis-point range, supported by future portfolio growth. The company's $100 million subordinated debt issuance raised its total risk-based capital ratio by 60 basis points to 13.58%. Its common equity tier 1 ratio stood at 11.22%, while tangible common equity was 8.83%, above management's 8% target. First Merchants repurchased 287,000 shares for $12 million during the third quarter, bringing year-to-date repurchases to nearly 1.3 million shares for $50.3 million. Kawiecki said the company intends to maintain its repurchase activity and could execute an elevated level of buybacks in the fourth quarter and potentially the first quarter. Non-interest expense totaled $116.3 million, including $900,000 of acquisition-related expenses. Excluding those costs, expenses rose $3.9 million sequentially, reflecting higher marketing, employee health insurance and a building lease impairment charge. Kawiecki said the third-quarter expense run rate is appropriate for the fourth quarter and forecast expense growth of 3% to 5% for 2027. Hardwick also used his final earnings call to address his planned retirement at year-end. Stewart, who has served as president, will succeed him as CEO. Hardwick said Stewart and the existing executive team are positioned to continue building on the company's Midwestern franchise and relationship-based growth strategy. First Merchants Corporation is a financial services holding company headquartered in Muncie, Indiana. Through its principal subsidiary, First Merchants Bank, the company provides banking and related financial services to individuals, families, businesses and institutions. First Merchants Bank offers deposit accounts, consumer and commercial lending, mortgage services, treasury and cash-management solutions, online and mobile banking, investment management and trust services. The company also provides wealth-management and insurance-related services through affiliated operations. Founded in 1893, First Merchants has expanded through organic growth and acquisitions and serves customers across Indiana, Ohio and Michigan. 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 Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

First Merchants (FRME) reported $205.33 million in revenue for the quarter ended September 2026, representing a year-over-year increase of 23.6%. EPS of $1.10 for the same period compares to $0.99 a year ago. The reported revenue represents a surprise of +0.67% over the Zacks Consensus Estimate of $203.97 million. With the consensus EPS estimate being $1.04, the EPS surprise was +5.77%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. 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: - Efficiency Ratio: 54.6% compared to the 55.1% average estimate based on four analysts. - Net Interest Margin (FTE): 3.4% versus the four-analyst average estimate of 3.4%. - Net Charge-offs (Recoveries) as % of Average Loans (Annualized): 0.8% compared to the 0.8% average estimate based on three analysts. - Average Balance - Total Earning Assets: $19.43 billion versus the two-analyst average estimate of $19.7 billion. - Net gains and fees on sales of loans: $7.43 million compared to the $7.37 million average estimate based on four analysts. - Total Non-Interest Income: $38.01 million versus $37.35 million estimated by four analysts on average. - Other income: $1.39 million compared to the $1.06 million average estimate based on three analysts. - Other customer fees: $0.58 million versus $0.81 million estimated by three analysts on average. - Net Interest Income (FTE): $167.33 million versus $166.6 million estimated by three analysts on average. - Derivative hedge fees: $1.08 million versus $1.17 million estimated by three analysts on average. - Card payment fees: $5.61 million versus the three-analyst average estimate of $5.39 million. - Earnings on bank-owned life insurance: $2.35 million versus $2.31 million estimated by three analysts on average. View all Key Company Metrics for First Merchants here>>> Shares of First Merchants have returned -1.3% over the past month versus the Zacks S&P 500 composite's +1% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with 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

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. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars In Thousands, Except Per Share Amounts) | September 30, | | 2026 | | | | 2025 | ASSETS | | | Cash and due from banks | $ | 86,594 | | | $ | 88,079 | Interest-bearing deposits | | 262,503 | | | | 168,706 | Investment securities available for sale | | 1,251,540 | | | | 1,386,903 | Investment securities held to maturity, net of allowance for credit losses of $245 in 2026 and 2025 | | 1,872,951 | | | | 1,995,488 | Loans held for sale | | 87,300 | | | | 23,190 | Loans | | 15,600,974 | | | | 13,591,174 | Less: Allowance for credit losses - loans | | (215,526 | ) | | | (194,468 | ) Net loans | | 15,385,448 | | | | 13,396,706 | Premises and equipment | | 145,030 | | | | 121,771 | Federal Home Loan Bank stock | | 70,794 | | | | 47,264 | Interest receivable | | 99,280 | | | | 89,102 | Goodwill | | 788,186 | | | | 712,002 | Other intangibles | | 36,320 | | | | 15,298 | Cash surrender value of life insurance | | 374,974 | | | | 306,583 | Other real estate owned | | 1,605 | | | | 1,270 | Tax asset, deferred and receivable | | 136,258 | | | | 89,758 | Other assets | | 457,939 | | | | 369,509 | TOTAL ASSETS | $ | 21,056,722 | | | $ | 18,811,629 | LIABILITIES | | | Deposits: | | | Noninterest-bearing | $ | 3,752,990 | | | $ | 2,100,570 | Interest-bearing | | 13,175,942 | | | | 12,769,409 | Total Deposits | | 16,928,932 | | | | 14,869,979 | Borrowings: | | | Federal funds purchased | | — | | | | 199,370 | Securities sold under repurchase agreements | | 99,638 | | | | 122,226 | Federal Home Loan Bank advances | | 903,941 | | | | 798,626 | Subordinated debentures and other borrowings | | 184,505 | | | | 57,632 | Total Borrowings | | 1,188,084 | | | | 1,177,854 | Interest payable | | 17,095 | | | | 18,240 | Other liabilities | | 286,230 | | | | 333,154 | Total Liabilities | | 18,420,341 | | | | 16,399,227 | 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 - 62,210,134 and 57,192,497 shares | | 7,754 | | | | 7,149 | Additional paid-in capital | | 1,347,943 | | | | 1,158,026 | Retained earnings | | 1,483,496 | | | | 1,377,966 | Accumulated other comprehensive loss | | (227,937 | ) | | | (155,864 | ) Total Stockholders' Equity | | 2,636,381 | | | | 2,412,402 | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 21,056,722 | | | $ | 18,811,629 | | | | | | | | CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars In Thousands, Except Per Share Amounts) | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | | 2026 | | | 2025 | | | 2026 | | | | 2025 | INTEREST INCOME | | | | | | | Loans: | | | | | | | Taxable | $ | 230,072 | | $ | 200,406 | | $ | 670,230 | | | $ | 583,307 | Tax-exempt | | 11,379 | | | 11,173 | | | 34,791 | | | | 32,510 | Investment securities: | | | | | | | Taxable | | 7,331 | | | 8,288 | | | 22,233 | | | | 24,926 | Tax-exempt | | 12,279 | | | 12,460 | | | 37,334 | | | | 37,493 | Deposits with financial institutions | | 1,308 | | | 1,676 | | | 3,699 | | | | 5,940 | Federal Home Loan Bank stock | | 1,578 | | | 1,092 | | | 5,068 | | | | 3,172 | Total Interest Income | | 263,947 | | | 235,095 | | | 773,355 | | | | 687,348 | INTEREST EXPENSE | | | | | | | Deposits | | 91,313 | | | 90,821 | | | 261,660 | | | | 255,609 | Federal funds purchased | | 225 | | | 224 | | | 1,532 | | | | 2,001 | Securities sold under repurchase agreements | | 378 | | | 654 | | | 1,129 | | | | 2,059 | Federal Home Loan Bank advances | | 9,537 | | | 8,638 | | | 33,775 | | | | 27,716 | Subordinated debentures and other borrowings | | 1,426 | | | 1,093 | | | 3,947 | | | | 3,014 | Total Interest Expense | | 102,879 | | | 101,430 | | | 302,043 | | | | 290,399 | NET INTEREST INCOME | | 161,068 | | | 133,665 | | | 471,312 | | | | 396,949 | Provision for credit losses | | 3,300 | | | 4,300 | | | 41,200 | | | | 14,100 | NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | 157,768 | | | 129,365 | | | 430,112 | | | | 382,849 | NONINTEREST INCOME | | | | | | | Service charges on deposit accounts | | 9,775 | | | 8,921 | | | 28,184 | | | | 25,559 | Fiduciary and wealth management fees | | 9,786 | | | 8,842 | | | 29,192 | | | | 26,317 | Card payment fees | | 5,606 | | | 5,007 | | | 16,386 | | | | 14,465 | Net gains and fees on sales of loans | | 7,428 | | | 4,983 | | | 21,681 | | | | 15,854 | Derivative hedge fees | | 1,082 | | | 1,097 | | | 2,763 | | | | 2,332 | Other customer fees | | 584 | | | 414 | | | 2,057 | | | | 1,230 | Earnings on bank-owned life insurance | | 2,353 | | | 1,667 | | | 8,124 | | | | 5,759 | Net realized losses on sales of available for sale securities | | — | | | — | | | — | | | | (8 | ) Net loss on mortgage loans reclassified to held for sale | | — | | | — | | | (29,755 | ) | | | — | Other income | | 1,391 | | | 1,546 | | | 2,358 | | | | 2,320 | Total Noninterest Income | | 38,005 | | | 32,477 | | | 80,990 | | | | 93,828 | NONINTEREST EXPENSE | | | | | | | Salaries and employee benefits | | 66,339 | | | 57,317 | | | 201,556 | | | | 166,826 | Net occupancy | | 8,807 | | | 7,057 | | | 25,335 | | | | 21,118 | Equipment | | 8,061 | | | 6,998 | | | 24,482 | | | | 20,933 | Marketing | | 3,630 | | | 2,120 | | | 7,601 | | | | 5,470 | Outside data processing fees | | 7,883 | | | 6,943 | | | 23,118 | | | | 19,979 | Printing and office supplies | | 481 | | | 311 | | | 1,349 | | | | 930 | Intangible asset amortization | | 2,652 | | | 1,499 | | | 7,660 | | | | 4,530 | FDIC assessments | | 4,381 | | | 3,526 | | | 12,664 | | | | 10,726 | Other real estate owned and foreclosure expenses | | 1,594 | | | 121 | | | 3,746 | | | | 750 | Professional and other outside services | | 4,665 | | | 3,718 | | | 24,237 | | | | 10,720 | Other expenses | | 7,761 | | | 6,951 | | | 24,998 | | | | 21,079 | Total Noninterest Expense | | 116,254 | | | 96,561 | | | 356,746 | | | | 283,061 | Income Before Income Taxes | | 79,519 | | | 65,281 | | | 154,356 | | | | 193,616 | Income tax expense | | 11,204 | | | 8,516 | | | 13,905 | | | | 24,680 | NET INCOME | | 68,315 | | | 56,765 | | | 140,451 | | | | 168,936 | Preferred stock dividends | | 468 | | | 468 | | | 1,406 | | | | 1,406 | NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 67,847 | | $ | 56,297 | | $ | 139,045 | | | $ | 167,530 | PER SHARE DATA: | | | | | | | Basic Net Income Available to Common Stockholders | $ | 1.09 | | $ | 0.98 | | $ | 2.25 | | | $ | 2.91 | Diluted Net Income Available to Common Stockholders | $ | 1.09 | | $ | 0.98 | | $ | 2.24 | | | $ | 2.90 | Cash Dividends Paid to Common Stockholders | $ | 0.37 | | $ | 0.36 | | $ | 1.10 | | | $ | 1.07 | Tangible Common Book Value Per Share(1) | $ | 28.86 | | $ | 29.08 | | $ | 28.86 | | | $ | 29.08 | Average Diluted Common Shares Outstanding (in thousands) | | 62,411 | | | 57,448 | | | 62,003 | | | | 57,817 | (1) See "Non-GAAP Financial Information" for reconciliation FINANCIAL HIGHLIGHTS (Dollars In Thousands) | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | NET CHARGE-OFFS | $ | 29,389 | | | $ | 5,148 | | | $ | 43,550 | | | $ | 12,389 | | | | | | | | AVERAGE BALANCES: | | | | | | | Assets | $ | 21,065,760 | | | $ | 18,637,581 | | | $ | 20,911,229 | | | $ | 18,497,118 | Loans | | 15,608,069 | | | | 13,376,214 | | | | 15,321,286 | | | | 13,162,668 | Earning Assets | | 19,432,368 | | | | 17,282,901 | | | | 19,288,344 | | | | 17,135,301 | Deposits | | 16,885,365 | | | | 14,907,861 | | | | 16,537,651 | | | | 14,654,894 | Stockholders' Equity | | 2,695,943 | | | | 2,367,971 | | | | 2,684,796 | | | | 2,349,718 | | | | | | | | FINANCIAL RATIOS: | | | | | | | Return on Average Assets | | 1.30 | % | | | 1.22 | % | | | 0.90 | % | | | 1.22 | % Return on Average Stockholders' Equity | | 10.07 | | | | 9.51 | | | | 6.91 | | | | 9.51 | Return on Tangible Common Stockholders' Equity(1) | | 15.09 | | | | 14.21 | | | | 10.43 | | | | 14.27 | Average Earning Assets to Average Assets | | 92.25 | | | | 92.73 | | | | 92.24 | | | | 92.64 | Allowance for Credit Losses - Loans as % of Loans | | 1.38 | | | | 1.43 | | | | 1.38 | | | | 1.43 | Net Charge-offs as % of Average Loans (Annualized) | | 0.75 | | | | 0.15 | | | | 0.38 | | | | 0.13 | Average Stockholders' Equity to Average Assets | | 12.80 | | | | 12.71 | | | | 12.84 | | | | 12.70 | Fully Taxable Equivalent ("FTE") Yield on Average Earning Assets | | 5.56 | | | | 5.58 | | | | 5.48 | | | | 5.49 | Interest Expense/Average Earning Assets | | 2.12 | | | | 2.34 | | | | 2.09 | | | | 2.26 | Net Interest Margin FTE(1) | | 3.44 | | | | 3.24 | | | | 3.39 | | | | 3.23 | Efficiency Ratio(1) | | 54.55 | | | | 55.09 | | | | 60.44 | | | | 54.54 | (1) See "Non-GAAP Financial Information" for reconciliation ASSET QUALITY (Dollars In Thousands) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | Nonaccrual Loans | $ | 117,415 | | | $ | 118,203 | | | $ | 89,592 | | | $ | 71,773 | | | $ | 65,740 | Other Real Estate Owned and Repossessions | | 1,605 | | | | 1,562 | | | | 1,264 | | | | 658 | | | | 1,270 | Nonperforming Assets (NPA) | | 119,020 | | | | 119,765 | | | | 90,856 | | | | 72,431 | | | | 67,010 | Accruing Loans 90+ Days Delinquent | | 12,672 | | | | 9,738 | | | | 4,078 | | | | 2,042 | | | | 1,925 | NPAs & 90+ Days Delinquent | $ | 131,692 | | | $ | 129,503 | | | $ | 94,934 | | | $ | 74,473 | | | $ | 68,935 | | | | | | | | | | Allowance for Credit Losses - Loans | $ | 215,526 | | | $ | 241,615 | | | $ | 212,520 | | | $ | 195,597 | | | $ | 194,468 | Quarterly Net Charge-offs | | 29,389 | | | | 3,905 | | | | 10,256 | | | | 6,021 | | | | 5,148 | NPAs / Assets % | | 0.57 | % | | | 0.56 | % | | | 0.43 | % | | | 0.38 | % | | | 0.36 | % NPAs & 90+ Days / Assets % | | 0.63 | % | | | 0.61 | % | | | 0.45 | % | | | 0.39 | % | | | 0.37 | % NPAs / Loans and OREO % | | 0.76 | % | | | 0.77 | % | | | 0.60 | % | | | 0.52 | % | | | 0.49 | % Allowance for Credit Losses - Loans as % of Loans | | 1.38 | % | | | 1.56 | % | | | 1.39 | % | | | 1.42 | % | | | 1.43 | % Quarterly Net Charge-offs as % of Average Loans (Annualized) | | 0.75 | % | | | 0.10 | % | | | 0.27 | % | | | 0.18 | % | | | 0.15 | % | | | | | | | | | | | | | | | | | | | CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars In Thousands, Except Per Share Amounts) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | ASSETS | | | | | | | | | Cash and due from banks | $ | 86,594 | | | $ | 86,665 | | | $ | 98,083 | | | $ | 84,158 | | | $ | 88,079 | Interest-bearing deposits | | 262,503 | | | | 529,432 | | | | 175,354 | | | | 196,300 | | | | 168,706 | Investment securities available for sale | | 1,251,540 | | | | 1,384,392 | | | | 1,372,417 | | | | 1,407,102 | | | | 1,386,903 | Investment securities held to maturity, net of allowance for credit losses | | 1,872,951 | | | | 1,907,684 | | | | 1,937,485 | | | | 1,971,539 | | | | 1,995,488 | Loans held for sale | | 87,300 | | | | 77,880 | | | | 401,839 | | | | 20,079 | | | | 23,190 | Loans | | 15,600,974 | | | | 15,530,737 | | | | 15,261,889 | | | | 13,791,707 | | | | 13,591,174 | Less: Allowance for credit losses - loans | | (215,526 | ) | | | (241,615 | ) | | | (212,520 | ) | | | (195,597 | ) | | | (194,468 | ) Net loans | | 15,385,448 | | | | 15,289,122 | | | | 15,049,369 | | | | 13,596,110 | | | | 13,396,706 | Premises and equipment | | 145,030 | | | | 148,164 | | | | 146,013 | | | | 121,058 | | | | 121,771 | Federal Home Loan Bank stock | | 70,794 | | | | 70,818 | | | | 70,835 | | | | 47,245 | | | | 47,264 | Interest receivable | | 99,280 | | | | 101,927 | | | | 97,026 | | | | 93,374 | | | | 89,102 | Goodwill | | 788,186 | | | | 788,186 | | | | 782,789 | | | | 712,002 | | | | 712,002 | Other intangibles | | 36,320 | | | | 38,972 | | | | 41,678 | | | | 13,800 | | | | 15,298 | Cash surrender value of life insurance | | 374,974 | | | | 373,242 | | | | 371,238 | | | | 308,438 | | | | 306,583 | Other real estate owned | | 1,605 | | | | 1,562 | | | | 1,264 | | | | 658 | | | | 1,270 | Tax asset, deferred and receivable | | 136,258 | | | | 113,975 | | | | 116,814 | | | | 78,664 | | | | 89,758 | Other assets | | 457,939 | | | | 436,744 | | | | 410,317 | | | | 374,574 | | | | 369,509 | TOTAL ASSETS | $ | 21,056,722 | | | $ | 21,348,765 | | | $ | 21,072,521 | | | $ | 19,025,101 | | | $ | 18,811,629 | LIABILITIES | | | | | | | | | Deposits: | | | | | | | | | Noninterest-bearing | $ | 3,752,990 | | | $ | 3,831,836 | | | $ | 3,748,279 | | | $ | 2,137,262 | | | $ | 2,100,570 | Interest-bearing | | 13,175,942 | | | | 12,921,545 | | | | 12,737,338 | | | | 13,157,593 | | | | 12,769,409 | Total Deposits | | 16,928,932 | | | | 16,753,381 | | | | 16,485,617 | | | | 15,294,855 | | | | 14,869,979 | Borrowings: | | | | | | | | | Federal funds purchased | | — | | | | — | | | | 170,000 | | | | 40,000 | | | | 199,370 | Securities sold under repurchase agreements | | 99,638 | | | | 103,340 | | | | 89,458 | | | | 103,755 | | | | 122,226 | Federal Home Loan Bank advances | | 903,941 | | | | 1,414,059 | | | | 1,299,192 | | | | 798,549 | | | | 798,626 | Subordinated debentures and other borrowings | | 184,505 | | | | 86,350 | | | | 86,345 | | | | 57,630 | | | | 57,632 | Total Borrowings | | 1,188,084 | | | | 1,603,749 | | | | 1,644,995 | | | | 999,934 | | | | 1,177,854 | Interest payable | | 17,095 | | | | 17,491 | | | | 18,890 | | | | 18,235 | | | | 18,240 | Other liabilities | | 286,230 | | | | 276,967 | | | | 250,454 | | | | 245,410 | | | | 333,154 | Total Liabilities | | 18,420,341 | | | | 18,651,588 | | | | 18,399,956 | | | | 16,558,434 | | | | 16,399,227 | STOCKHOLDERS' EQUITY | | | | | | | | | Preferred Stock, $1,000 par value, $1,000 liquidation value: | | | | | | | | | Authorized -- 600 cumulative shares | | | | | | | | | Issued and outstanding - 125 cumulative shares | | 125 | | | | 125 | | | | 125 | | | | 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 | | | | 25,000 | | | | 25,000 | | | | 25,000 | Common Stock, $0.125 stated value: | | | | | | | | | Authorized -- 100,000,000 shares | | | | | | | | | Issued and outstanding | | 7,754 | | | | 7,776 | | | | 7,813 | | | | 7,119 | | | | 7,149 | Additional paid-in capital | | 1,347,943 | | | | 1,358,975 | | | | 1,369,879 | | | | 1,150,816 | | | | 1,158,026 | Retained earnings | | 1,483,496 | | | | 1,438,894 | | | | 1,418,609 | | | | 1,413,742 | | | | 1,377,966 | Accumulated other comprehensive loss | | (227,937 | ) | | | (133,593 | ) | | | (148,861 | ) | | | (130,135 | ) | | | (155,864 | ) Total Stockholders' Equity | | 2,636,381 | | | | 2,697,177 | | | | 2,672,565 | | | | 2,466,667 | | | | 2,412,402 | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 21,056,722 | | | $ | 21,348,765 | | | $ | 21,072,521 | | | $ | 19,025,101 | | | $ | 18,811,629 | | | | | | | | | | | | | | | | | | | | CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars In Thousands, Except Per Share Amounts) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | INTEREST INCOME | | | | | | | | | Loans: | | | | | | | | | Taxable | $ | 230,072 | | | $ | 226,531 | | | $ | 213,627 | | | $ | 203,120 | | | $ | 200,406 | Tax-exempt | | 11,379 | | | | 11,823 | | | | 11,589 | | | | 10,905 | | | | 11,173 | Investment securities: | | | | | | | | | Taxable | | 7,331 | | | | 7,355 | | | | 7,547 | | | | 7,736 | | | | 8,288 | Tax-exempt | | 12,279 | | | | 12,458 | | | | 12,597 | | | | 12,459 | | | | 12,460 | Deposits with financial institutions | | 1,308 | | | | 1,147 | | | | 1,244 | | | | 2,187 | | | | 1,676 | Federal Home Loan Bank stock | | 1,578 | | | | 1,525 | | | | 1,965 | | | | 1,037 | | | | 1,092 | Total Interest Income | | 263,947 | | | | 260,839 | | | | 248,569 | | | | 237,444 | | | | 235,095 | INTEREST EXPENSE | | | | | | | | | Deposits | | 91,313 | | | | 86,254 | | | | 84,093 | | | | 88,670 | | | | 90,821 | Federal funds purchased | | 225 | | | | 717 | | | | 590 | | | | 218 | | | | 224 | Securities sold under repurchase agreements | | 378 | | | | 419 | | | | 332 | | | | 405 | | | | 654 | Federal Home Loan Bank advances | | 9,537 | | | | 13,190 | | | | 11,048 | | | | 8,047 | | | | 8,638 | Subordinated debentures and other borrowings | | 1,426 | | | | 1,318 | | | | 1,203 | | | | 1,040 | | | | 1,093 | Total Interest Expense | | 102,879 | | | | 101,898 | | | | 97,266 | | | | 98,380 | | | | 101,430 | NET INTEREST INCOME | | 161,068 | | | | 158,941 | | | | 151,303 | | | | 139,064 | | | | 133,665 | Provision for credit losses | | 3,300 | | | | 33,000 | | | | 4,900 | | | | 7,150 | | | | 4,300 | NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | 157,768 | | | | 125,941 | | | | 146,403 | | | | 131,914 | | | | 129,365 | NONINTEREST INCOME | | | | | | | | | Service charges on deposit accounts | | 9,775 | | | | 9,372 | | | | 9,037 | | | | 8,704 | | | | 8,921 | Fiduciary and wealth management fees | | 9,786 | | | | 9,638 | | | | 9,768 | | | | 9,175 | | | | 8,842 | Card payment fees | | 5,606 | | | | 5,505 | | | | 5,275 | | | | 5,325 | | | | 5,007 | Net gains and fees on sales of loans | | 7,428 | | | | 7,742 | | | | 6,511 | | | | 5,421 | | | | 4,983 | Derivative hedge fees | | 1,082 | | | | 1,117 | | | | 564 | | | | 1,053 | | | | 1,097 | Other customer fees | | 584 | | | | 880 | | | | 593 | | | | 315 | | | | 414 | Earnings on bank-owned life insurance | | 2,353 | | | | 2,325 | | | | 3,446 | | | | 1,854 | | | | 1,667 | Net loss on mortgage loans reclassified to held for sale | | — | | | | — | | | | (29,755 | ) | | | — | | | | — | Other income | | 1,391 | | | | 577 | | | | 390 | | | | 1,259 | | | | 1,546 | Total Noninterest Income | | 38,005 | | | | 37,156 | | | | 5,829 | | | | 33,106 | | | | 32,477 | NONINTEREST EXPENSE | | | | | | | | | Salaries and employee benefits | | 66,339 | | | | 65,774 | | | | 69,443 | | | | 58,254 | | | | 57,317 | Net occupancy | | 8,807 | | | | 8,227 | | | | 8,301 | | | | 7,283 | | | | 7,057 | Equipment | | 8,061 | | | | 8,603 | | | | 7,818 | | | | 7,681 | | | | 6,998 | Marketing | | 3,630 | | | | 2,370 | | | | 1,601 | | | | 2,324 | | | | 2,120 | Outside data processing fees | | 7,883 | | | | 8,045 | | | | 7,190 | | | | 7,509 | | | | 6,943 | Printing and office supplies | | 481 | | | | 491 | | | | 377 | | | | 450 | | | | 311 | Intangible asset amortization | | 2,652 | | | | 2,706 | | | | 2,302 | | | | 1,498 | | | | 1,499 | FDIC assessments | | 4,381 | | | | 4,390 | | | | 3,893 | | | | 2,684 | | | | 3,526 | Other real estate owned and foreclosure expenses | | 1,594 | | | | 1,052 | | | | 1,100 | | | | 775 | | | | 121 | Professional and other outside services | | 4,665 | | | | 4,979 | | | | 14,593 | | | | 3,774 | | | | 3,718 | Other expenses | | 7,761 | | | | 8,710 | | | | 8,527 | | | | 7,290 | | | | 6,951 | Total Noninterest Expense | | 116,254 | | | | 115,347 | | | | 125,145 | | | | 99,522 | | | | 96,561 | Income Before Income Taxes | | 79,519 | | | | 47,750 | | | | 27,087 | | | | 65,498 | | | | 65,281 | Income tax expense (benefit) | | 11,204 | | | | 3,770 | | | | (1,069 | ) | | | 8,433 | | | | 8,516 | NET INCOME | | 68,315 | | | | 43,980 | | | | 28,156 | | | | 57,065 | | | | 56,765 | Preferred stock dividends | | 468 | | | | 469 | | | | 469 | | | | 469 | | | | 468 | NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 67,847 | | | $ | 43,511 | | | $ | 27,687 | | | $ | 56,596 | | | $ | 56,297 | PER SHARE DATA: | | | | | | | | | Basic Net Income Available to Common Stockholders | $ | 1.09 | | | $ | 0.70 | | | $ | 0.46 | | | $ | 0.99 | | | $ | 0.98 | Diluted Net Income Available to Common Stockholders | $ | 1.09 | | | $ | 0.70 | | | $ | 0.45 | | | $ | 0.99 | | | $ | 0.98 | Cash Dividends Paid to Common Stockholders | $ | 0.37 | | | $ | 0.37 | | | $ | 0.36 | | | $ | 0.36 | | | $ | 0.36 | Tangible Common Book Value Per Share(1) | $ | 28.86 | | | $ | 29.80 | | | $ | 29.34 | | | $ | 30.18 | | | $ | 29.08 | Average Diluted Common Shares Outstanding (in thousands) | | 62,411 | | | | 62,574 | | | | 61,008 | | | | 57,442 | | | | 57,448 | FINANCIAL RATIOS: | | | | | | | | | Return on Average Assets | | 1.30 | % | | | 0.83 | % | | | 0.55 | % | | | 1.20 | % | | | 1.22 | % Return on Average Stockholders' Equity | | 10.07 | | | | 6.44 | | | | 4.17 | | | | 9.23 | | | | 9.51 | Return on Tangible Common Stockholders' Equity(1) | | 15.09 | | | | 9.80 | | | | 6.39 | | | | 13.57 | | | | 14.21 | Average Earning Assets to Average Assets | | 92.25 | | | | 92.14 | | | | 92.33 | | | | 92.69 | | | | 92.73 | Allowance for Credit Losses - Loans as % of Loans | | 1.38 | | | | 1.56 | | | | 1.39 | | | | 1.42 | | | | 1.43 | Net Charge-offs as % of Average Loans (Annualized) | | 0.75 | | | | 0.10 | | | | 0.27 | | | | 0.18 | | | | 0.15 | Average Stockholders' Equity to Average Assets | | 12.80 | | | | 12.71 | | | | 13.01 | | | | 12.88 | | | | 12.71 | Fully Taxable Equivalent (FTE) Yield on Average Earning Assets | | 5.56 | | | | 5.46 | | | | 5.41 | | | | 5.52 | | | | 5.58 | Interest Expense/Average Earning Assets | | 2.12 | | | | 2.08 | | | | 2.06 | | | | 2.23 | | | | 2.34 | Net Interest Margin FTE(1) | | 3.44 | | | | 3.38 | | | | 3.35 | | | | 3.29 | | | | 3.24 | Efficiency Ratio(1) | | 54.55 | | | | 55.11 | | | | 74.45 | | | | 54.52 | | | | 55.09 | (1) See "Non-GAAP Financial Information" for reconciliation LOANS | | | | | | | | | (Dollars In Thousands) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | Commercial and industrial loans | $ | 4,578,572 | | | $ | 4,720,441 | | | $ | 4,611,596 | | | $ | 4,478,282 | | | $ | 4,604,895 | Agricultural land, production and other loans to farmers | | 339,723 | | | | 323,348 | | | | 310,788 | | | | 283,125 | | | | 275,817 | Real estate loans: | | | | | | | | | Construction | | 959,483 | | | | 874,419 | | | | 899,895 | | | | 804,775 | | | | 789,021 | Commercial real estate, non-owner occupied | | 3,208,902 | | | | 3,271,620 | | | | 3,192,337 | | | | 2,338,666 | | | | 2,304,889 | Commercial real estate, owner occupied | | 1,440,264 | | | | 1,368,627 | | | | 1,334,959 | | | | 1,237,100 | | | | 1,232,117 | Residential | | 2,419,376 | | | | 2,361,480 | | | | 2,273,860 | | | | 2,420,310 | | | | 2,412,783 | Home equity | | 1,139,040 | | | | 1,118,662 | | | | 1,104,739 | | | | 710,980 | | | | 687,021 | Individuals' loans for household and other personal expenditures | | 157,939 | | | | 149,878 | | | | 153,283 | | | | 155,436 | | | | 138,703 | Public finance and other commercial loans | | 1,357,675 | | | | 1,342,262 | | | | 1,380,432 | | | | 1,363,033 | | | | 1,145,928 | Loans | | 15,600,974 | | | | 15,530,737 | | | | 15,261,889 | | | | 13,791,707 | | | | 13,591,174 | Allowance for credit losses - loans | | (215,526 | ) | | | (241,615 | ) | | | (212,520 | ) | | | (195,597 | ) | | | (194,468 | ) NET LOANS | $ | 15,385,448 | | | $ | 15,289,122 | | | $ | 15,049,369 | | | $ | 13,596,110 | | | $ | 13,396,706 | DEPOSITS | | | | | | | | | (Dollars In Thousands) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | 2026 | | | 2026 | | | 2025 | | | 2025 Interest-Bearing Deposits: | | | | | | | | | Checking deposits | $ | 4,768,669 | | $ | 4,738,680 | | $ | 4,261,269 | | $ | 5,633,210 | | $ | 5,545,127 Money market deposits | | 4,780,359 | | | 4,632,564 | | | 4,761,930 | | | 4,219,226 | | | 3,908,199 Savings deposits | | 1,380,813 | | | 1,410,997 | | | 1,442,596 | | | 1,262,560 | | | 1,256,508 Certificates and other time deposits | | 2,246,101 | | | 2,139,304 | | | 2,271,543 | | | 2,042,597 | | | 2,059,575 Total Interest-Bearing Deposits(1) | | 13,175,942 | | | 12,921,545 | | | 12,737,338 | | | 13,157,593 | | | 12,769,409 Noninterest-bearing deposits | | 3,752,990 | | | 3,831,836 | | | 3,748,279 | | | 2,137,262 | | | 2,100,570 TOTAL DEPOSITS | $ | 16,928,932 | | $ | 16,753,381 | | $ | 16,485,617 | | $ | 15,294,855 | | $ | 14,869,979 (1) Total Interest-Bearing Deposits contain brokered deposits of $1.4 billion, which includes brokered CDs of $409.8 million at September 30, 2026. CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS (Dollars In Thousands) | | | | | | | | | | | | Three Months Ended | September 30, 2026 | | September 30, 2025 | Average Balance | | Interest Income / Expense | | Average Rate | | Average Balance | | Interest Income / Expense | | Average Rate ASSETS | | | | | | | | | | | Interest-bearing deposits | $ | 234,715 | | $ | 1,308 | | 2.23 | % | | $ | 229,271 | | $ | 1,676 | | 2.92 | % Federal Home Loan Bank stock | | 70,805 | | | 1,578 | | 8.91 | | | | 47,278 | | | 1,092 | | 9.24 | Investment Securities:(1) | | | | | | | | | | | Taxable | | 1,434,474 | | | 7,331 | | 2.04 | | | | 1,567,594 | | | 8,288 | | 2.11 | Tax-exempt(2) | | 2,005,985 | | | 15,543 | | 3.10 | | | | 2,036,379 | | | 15,772 | | 3.10 | Total Investment Securities | | 3,440,459 | | | 22,874 | | 2.66 | | | | 3,603,973 | | | 24,060 | | 2.67 | Loans held for sale | | 78,320 | | | 1,600 | | 8.17 | | | | 26,165 | | | 401 | | 6.13 | Loans:(3) | | | | | | | | | | | Commercial | | 10,915,052 | | | 177,309 | | 6.50 | | | | 9,165,241 | | | 158,469 | | 6.92 | Real estate mortgage | | 2,215,960 | | | 27,989 | | 5.05 | | | | 2,217,524 | | | 25,676 | | 4.63 | HELOC and installment | | 1,317,354 | | | 23,174 | | 7.04 | | | | 851,239 | | | 15,860 | | 7.45 | Tax-exempt(2) | | 1,159,703 | | | 14,375 | | 4.96 | | | | 1,142,210 | | | 14,070 | | 4.93 | Total Loans, including loans held for sale | | 15,686,389 | | | 244,447 | | 6.23 | | | | 13,402,379 | | | 214,476 | | 6.40 | Total Earning Assets | | 19,432,368 | | | 270,207 | | 5.56 | % | | | 17,282,901 | | | 241,304 | | 5.58 | % Total Non-Earning Assets | | 1,633,392 | | | | | | | 1,354,680 | | | | TOTAL ASSETS | $ | 21,065,760 | | | | | | $ | 18,637,581 | | | | LIABILITIES | | | | | | | | | | | Interest-Bearing Deposits: | | | | | | | | | | | Checking deposits | $ | 4,774,656 | | $ | 35,524 | | 2.98 | % | | $ | 5,600,373 | | $ | 37,463 | | 2.68 | % Money market deposits | | 4,702,730 | | | 33,686 | | 2.87 | | | | 3,843,537 | | | 31,709 | | 3.30 | Savings deposits | | 1,396,706 | | | 2,311 | | 0.66 | | | | 1,269,539 | | | 2,605 | | 0.82 | Certificates and other time deposits | | 2,249,894 | | | 19,792 | | 3.52 | | | | 2,036,704 | | | 19,044 | | 3.74 | Total Interest-Bearing Deposits | | 13,123,986 | | | 91,313 | | 2.78 | | | | 12,750,153 | | | 90,821 | | 2.85 | Borrowings | | 1,191,522 | | | 11,566 | | 3.88 | | | | 1,072,145 | | | 10,609 | | 3.96 | Total Interest-Bearing Liabilities | | 14,315,508 | | | 102,879 | | 2.87 | | | | 13,822,298 | | | 101,430 | | 2.94 | Noninterest-bearing deposits | | 3,761,379 | | | | | | | 2,157,708 | | | | Other liabilities | | 292,930 | | | | | | | 289,604 | | | | Total Liabilities | | 18,369,817 | | | | | | | 16,269,610 | | | | STOCKHOLDERS' EQUITY | | 2,695,943 | | | | | | | 2,367,971 | | | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 21,065,760 | | | | | | $ | 18,637,581 | | | | Net Interest Income (FTE) | | | $ | 167,328 | | | | | | $ | 139,874 | | Net Interest Spread (FTE)(4) | | | | | 2.69 | % | | | | | | 2.64 | % | | | | | | | | | | | Net Interest Margin (FTE): | | | | | | | | | | | Interest Income (FTE) / Average Earning Assets | | | | | 5.56 | % | | | | | | 5.58 | % Interest Expense / Average Earning Assets | | | | | 2.12 | % | | | | | | 2.34 | % Net Interest Margin (FTE)(5) | | | | | 3.44 | % | | | | | | 3.24 | % | | | | | | | | | | | (1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis. (2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2026 and 2025. These totals equal $6.3 million and $6.2 million for the three months ended September 30, 2026 and 2025, respectively. See "Non-GAAP Financial Information" for reconciliation. (3) Nonaccrual loans have been included in the average balances. (4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities. See "Non-GAAP Financial Information" for reconciliation. (5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets. See "Non-GAAP Financial Information" for reconciliation. | | | | | | | | | | | CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS (Dollars In Thousands) | | | | | | | | | | | | Nine Months Ended | September 30, 2026 | | September 30, 2025 | Average Balance | | Interest Income / Expense | | Average Rate | | Average Balance | | Interest Income / Expense | | Average Rate ASSETS | | | | | | | | | | | Interest-bearing deposits | $ | 225,198 | | $ | 3,699 | | 2.19 | % | | $ | 258,396 | | $ | 5,940 | | 3.07 | % Federal Home Loan Bank stock | | 68,147 | | | 5,068 | | 9.92 | | | | 45,964 | | | 3,172 | | 9.20 | Investment Securities:(1) | | | | | | | | | | | Taxable | | 1,467,054 | | | 22,233 | | 2.02 | | | | 1,602,343 | | | 24,926 | | 2.07 | Tax-exempt(2) | | 2,030,587 | | | 47,258 | | 3.10 | | | | 2,041,755 | | | 47,459 | | 3.10 | Total Investment Securities | | 3,497,641 | | | 69,491 | | 2.65 | | | | 3,644,098 | | | 72,385 | | 2.65 | Loans held for sale | | 176,072 | | | 7,568 | | 5.73 | | | | 24,175 | | | 1,109 | | 6.12 | Loans:(3) | | | | | | | | | | | Commercial | | 10,655,628 | | | 514,636 | | 6.44 | | | | 8,982,171 | | | 460,349 | | 6.83 | Real estate mortgage | | 2,239,083 | | | 82,763 | | 4.93 | | | | 2,203,263 | | | 75,184 | | 4.55 | HELOC and installment | | 1,241,618 | | | 65,263 | | 7.01 | | | | 838,420 | | | 46,665 | | 7.42 | Tax-exempt(2) | | 1,184,957 | | | 43,912 | | 4.94 | | | | 1,138,814 | | | 41,079 | | 4.81 | Total Loans, including loans held for sale | | 15,497,358 | | | 714,142 | | 6.14 | | | | 13,186,843 | | | 624,386 | | 6.31 | Total Earning Assets | | 19,288,344 | | | 792,400 | | 5.48 | % | | | 17,135,301 | | | 705,883 | | 5.49 | % Total Non-Earning Assets | | 1,622,885 | | | | | | | 1,361,817 | | | | TOTAL ASSETS | $ | 20,911,229 | | | | | | $ | 18,497,118 | | | | LIABILITIES | | | | | | | | | | | Interest-Bearing Deposits: | | | | | | | | | | | Checking deposits | $ | 4,904,249 | | $ | 96,544 | | 2.62 | % | | $ | 5,556,274 | | $ | 107,372 | | 2.58 | % Money market deposits | | 4,667,252 | | | 99,003 | | 2.83 | | | | 3,633,314 | | | 86,375 | | 3.17 | Savings deposits | | 1,397,781 | | | 6,823 | | 0.65 | | | | 1,283,856 | | | 7,563 | | 0.79 | Certificates and other time deposits | | 2,245,010 | | | 59,290 | | 3.52 | | | | 1,996,406 | | | 54,299 | | 3.63 | Total Interest-Bearing Deposits | | 13,214,292 | | | 261,660 | | 2.64 | | | | 12,469,850 | | | 255,609 | | 2.73 | Borrowings | | 1,412,602 | | | 40,383 | | 3.81 | | | | 1,194,498 | | | 34,790 | | 3.88 | Total Interest-Bearing Liabilities | | 14,626,894 | | | 302,043 | | 2.76 | | | | 13,664,348 | | | 290,399 | | 2.83 | Noninterest-bearing deposits | | 3,323,359 | | | | | | | 2,185,044 | | | | Other liabilities | | 276,180 | | | | | | | 298,008 | | | | Total Liabilities | | 18,226,433 | | | | | | | 16,147,400 | | | | STOCKHOLDERS' EQUITY | | 2,684,796 | | | | | | | 2,349,718 | | | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 20,911,229 | | | | | | $ | 18,497,118 | | | | Net Interest Income (FTE) | | | $ | 490,357 | | | | | | $ | 415,484 | | Net Interest Spread (FTE)(4) | | | | | 2.72 | % | | | | | | 2.66 | % | | | | | | | | | | | Net Interest Margin (FTE): | | | | | | | | | | | Interest Income (FTE) / Average Earning Assets | | | | | 5.48 | % | | | | | | 5.49 | % Interest Expense / Average Earning Assets | | | | | 2.09 | % | | | | | | 2.26 | % Net Interest Margin (FTE)(5) | | | | | 3.39 | % | | | | | | 3.23 | % | | | | | | | | | | | (1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis. (2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2026 and 2025. These totals equal $19.0 million and $18.5 million for the nine months ended September 30, 2026 and 2025, respectively. See "Non-GAAP Financial Information" for reconciliation. (3) Nonaccrual loans have been included in the average balances. (4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities. See "Non-GAAP Financial Information" for reconciliation. (5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets. See "Non-GAAP Financial Information" for reconciliation. ADJUSTED NET INCOME AND DILUTED EARNINGS PER COMMON SHARE (NON-GAAP) (Dollars In Thousands, Except Per Share Amounts) | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | September 30, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | 2026 | | | | 2025 | Net Income Available to Common Stockholders (GAAP) | $ | 67,847 | | | $ | 43,511 | | | $ | 27,687 | | | $ | 56,596 | | | $ | 56,297 | | | $ | 139,045 | | | $ | 167,530 | Adjustments: | | | | | | | | | | | | | Net realized losses on sales of available for sale securities | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | Net loss on mortgage loans reclassified to held for sale | | — | | | | — | | | | 29,755 | | | | — | | | | — | | | | 29,755 | | | | — | Acquisition-related expenses | | 862 | | | | 3,830 | | | | 16,968 | | | | 524 | | | | 276 | | | | 21,660 | | | | 276 | Non-core expenses(1)(2) | | — | | | | — | | | | — | | | | (743 | ) | | | 633 | | | | — | | | | 633 | Tax on adjustments | | (208 | ) | | | (925 | ) | | | (11,279 | ) | | | 53 | | | | (220 | ) | | | (12,412 | ) | | | (222 | ) Adjusted Net Income Available to Common Stockholders (non-GAAP) | $ | 68,501 | | | $ | 46,416 | | | $ | 63,131 | | | $ | 56,430 | | | $ | 56,986 | | | $ | 178,048 | | | $ | 168,225 | | | | | | | | | | | | | | Average Diluted Common Shares Outstanding (in thousands) | | 62,411 | | | | 62,574 | | | | 61,008 | | | | 57,442 | | | | 57,448 | | | | 62,003 | | | | 57,817 | | | | | | | | | | | | | | Diluted Earnings Per Common Share (GAAP) | $ | 1.09 | | | $ | 0.70 | | | $ | 0.45 | | | $ | 0.99 | | | $ | 0.98 | | | $ | 2.24 | | | $ | 2.90 | Adjustments: | | | | | | | | | | | | | Net realized losses on sales of available for sale securities | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | Net loss on mortgage loans reclassified to held for sale | | — | | | | — | | | | 0.49 | | | | — | | | | — | | | | 0.48 | | | | — | Acquisition-related expenses | | 0.01 | | | | 0.06 | | | | 0.28 | | | | — | | | | — | | | | 0.35 | | | | — | Non-core expenses(1)(2) | | — | | | | — | | | | — | | | | (0.01 | ) | | | 0.01 | | | | — | | | | 0.01 | Tax on adjustments | | — | | | | (0.02 | ) | | | (0.19 | ) | | | — | | | | — | | | | (0.20 | ) | | | — | Adjusted Diluted Earnings Per Common Share (non-GAAP) | $ | 1.10 | | | $ | 0.74 | | | $ | 1.03 | | | $ | 0.98 | | | $ | 0.99 | | | $ | 2.87 | | | $ | 2.91 | (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 PRE-TAX, PRE-PROVISION ("PTPP") EARNINGS, AS ADJUSTED (NON-GAAP) (Dollars In Thousands) | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | September 30, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | 2026 | | | | 2025 | Net Interest Income (GAAP) | $ | 161,068 | | | $ | 158,941 | | | $ | 151,303 | | | $ | 139,064 | | | $ | 133,665 | | | $ | 471,312 | | | $ | 396,949 | Noninterest Income (GAAP) | | 38,005 | | | | 37,156 | | | | 5,829 | | | | 33,106 | | | | 32,477 | | | | 80,990 | | | | 93,828 | Total Revenue | | 199,073 | | | | 196,097 | | | | 157,132 | | | | 172,170 | | | | 166,142 | | | | 552,302 | | | | 490,777 | Noninterest Expense (GAAP) | | 116,254 | | | | 115,347 | | | | 125,145 | | | | 99,522 | | | | 96,561 | | | | 356,746 | | | | 283,061 | Pre-Tax, Pre-Provision Earnings (non-GAAP) | | 82,819 | | | | 80,750 | | | | 31,987 | | | | 72,648 | | | | 69,581 | | | | 195,556 | | | | 207,716 | Provision for Credit Losses (GAAP) | | 3,300 | | | | 33,000 | | | | 4,900 | | | | 7,150 | | | | 4,300 | | | | 41,200 | | | | 14,100 | Income Tax Expense (Benefit) (GAAP) | | 11,204 | | | | 3,770 | | | | (1,069 | ) | | | 8,433 | | | | 8,516 | | | | 13,905 | | | | 24,680 | Net Income (GAAP) | $ | 68,315 | | | $ | 43,980 | | | $ | 28,156 | | | $ | 57,065 | | | $ | 56,765 | | | $ | 140,451 | | | $ | 168,936 | | | | | | | | | | | | | | Pre-Tax, Pre-Provision Earnings (non-GAAP) | | 82,819 | | | | 80,750 | | | | 31,987 | | | | 72,648 | | | | 69,581 | | | | 195,556 | | | | 207,716 | Net realized losses on sales of available for sale securities | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | Net loss on mortgage loans reclassified to held for sale | | — | | | | — | | | | 29,755 | | | | — | | | | — | | | | 29,755 | | | | — | Acquisition-related expenses | | 862 | | | | 3,830 | | | | 16,968 | | | | 524 | | | | 276 | | | | 21,660 | | | | 276 | Non-core expenses(1)(2)(non-GAAP) | | — | | | | — | | | | — | | | | (743 | ) | | | 633 | | | | — | | | | 633 | Adjusted Pre-Tax, Pre-Provision ("Adjusted PTPP") Earnings (non-GAAP) | $ | 83,681 | | | $ | 84,580 | | | $ | 78,710 | | | $ | 72,429 | | | $ | 70,490 | | | $ | 246,971 | | | $ | 208,633 | | | | | | | | | | | | | | Average Assets (GAAP) | $ | 21,065,760 | | | $ | 21,253,171 | | | $ | 20,407,523 | | | $ | 19,039,989 | | | $ | 18,637,581 | | | $ | 20,911,229 | | | $ | 18,497,118 | Average Equity (GAAP) | $ | 2,695,943 | | | $ | 2,702,249 | | | $ | 2,655,756 | | | $ | 2,452,005 | | | $ | 2,367,971 | | | $ | 2,684,796 | | | $ | 2,349,718 | | | | | | | | | | | | | | Adjusted PTPP / Average Assets (Adjusted PTPP ROA) | | 1.59 | % | | | 1.59 | % | | | 1.54 | % | | | 1.52 | % | | | 1.51 | % | | | 1.57 | % | | | 1.50 | % Adjusted PTPP / Average Equity (Adjusted PTPP ROE) | | 12.42 | % | | | 12.52 | % | | | 11.86 | % | | | 11.82 | % | | | 11.91 | % | | | 12.27 | % | | | 11.84 | % (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 NET INTEREST SPREAD AND MARGIN (FTE ADJUSTED) (NON-GAAP) | | | | | | | | (Dollars in Thousands) | | | | | | | | | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | September 30, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | 2026 | | | | 2025 | Interest income (GAAP) | $ | 263,947 | | | $ | 260,839 | | | $ | 248,569 | | | $ | 237,444 | | | $ | 235,095 | | | $ | 773,355 | | | $ | 687,348 | FTE adjustment | | 6,260 | | | | 6,391 | | | | 6,394 | | | | 6,185 | | | | 6,209 | | | | 19,045 | | | | 18,535 | Interest Income (FTE) (non-GAAP) | | 270,207 | | | | 267,230 | | | | 254,963 | | | | 243,629 | | | | 241,304 | | | | 792,400 | | | | 705,883 | Interest Expense (GAAP) | | 102,879 | | | | 101,898 | | | | 97,266 | | | | 98,380 | | | | 101,430 | | | | 302,043 | | | | 290,399 | Net Interest Income (FTE) (non-GAAP) | $ | 167,328 | | | $ | 165,332 | | | $ | 157,697 | | | $ | 145,249 | | | $ | 139,874 | | | $ | 490,357 | | | $ | 415,484 | | | | | | | | | | | | | | Average Earning Assets (GAAP) | $ | 19,432,368 | | | $ | 19,583,204 | | | $ | 18,842,984 | | | $ | 17,648,233 | | | $ | 17,282,901 | | | $ | 19,288,344 | | | $ | 17,135,301 | Average Interest-Bearing Liabilities (GAAP) | $ | 14,315,508 | | | $ | 14,553,001 | | | $ | 15,019,911 | | | $ | 14,109,091 | | | $ | 13,822,298 | | | $ | 14,626,894 | | | $ | 13,664,348 | | | | | | | | | | | | | | Net Interest Spread (GAAP) | | 2.56 | % | | | 2.53 | % | | | 2.69 | % | | | 2.59 | % | | | 2.50 | % | | | 2.59 | % | | | 2.51 | % FTE adjustment | | 0.13 | % | | | 0.13 | % | | | 0.13 | % | | | 0.14 | % | | | 0.14 | % | | | 0.13 | % | | | 0.15 | % Net Interest Spread (FTE) (non-GAAP) | | 2.69 | % | | | 2.66 | % | | | 2.82 | % | | | 2.73 | % | | | 2.64 | % | | | 2.72 | % | | | 2.66 | % | | | | | | | | | | | | | Net Interest Margin (GAAP) | | 3.32 | % | | | 3.25 | % | | | 3.21 | % | | | 3.15 | % | | | 3.09 | % | | | 3.26 | % | | | 3.09 | % FTE adjustment | | 0.12 | % | | | 0.13 | % | | | 0.14 | % | | | 0.14 | % | | | 0.15 | % | | | 0.13 | % | | | 0.14 | % Net Interest Margin (FTE) (non-GAAP) | | 3.44 | % | | | 3.38 | % | | | 3.35 | % | | | 3.29 | % | | | 3.24 | % | | | 3.39 | % | | | 3.23 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | EFFICIENCY RATIO (NON-GAAP) | | | | | | | | | | | | | (Dollars In Thousands) | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | September 30, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | 2026 | | | | 2025 | Noninterest Expense (GAAP) | $ | 116,254 | | | $ | 115,347 | | | $ | 125,145 | | | $ | 99,522 | | | $ | 96,561 | | | $ | 356,746 | | | $ | 283,061 | Less: Intangible asset amortization | | (2,652 | ) | | | (2,706 | ) | | | (2,302 | ) | | | (1,498 | ) | | | (1,499 | ) | | | (7,660 | ) | | | (4,530 | ) Less: OREO and foreclosure expenses | | (1,594 | ) | | | (1,052 | ) | | | (1,100 | ) | | | (775 | ) | | | (121 | ) | | | (3,746 | ) | | | (750 | ) Adjusted Noninterest Expense (non-GAAP) | $ | 112,008 | | | $ | 111,589 | | | $ | 121,743 | | | $ | 97,249 | | | $ | 94,941 | | | $ | 345,340 | | | $ | 277,781 | | | | | | | | | | | | | | Net Interest Income (GAAP) | $ | 161,068 | | | $ | 158,941 | | | $ | 151,303 | | | $ | 139,064 | | | $ | 133,665 | | | $ | 471,312 | | | $ | 396,949 | Plus: Fully taxable equivalent adjustment | | 6,260 | | | | 6,391 | | | | 6,394 | | | | 6,185 | | | | 6,209 | | | | 19,045 | | | | 18,535 | Net Interest Income on a Fully Taxable Equivalent Basis (non-GAAP) | $ | 167,328 | | | $ | 165,332 | | | $ | 157,697 | | | $ | 145,249 | | | $ | 139,874 | | | $ | 490,357 | | | $ | 415,484 | | | | | | | | | | | | | | Noninterest Income (GAAP) | $ | 38,005 | | | $ | 37,156 | | | $ | 5,829 | | | $ | 33,106 | | | $ | 32,477 | | | $ | 80,990 | | | $ | 93,828 | Less: Investment securities (gains) losses | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | Adjusted Noninterest Income (non-GAAP) | $ | 38,005 | | | $ | 37,156 | | | $ | 5,829 | | | $ | 33,106 | | | $ | 32,477 | | | $ | 80,990 | | | $ | 93,836 | Adjusted Revenue (non-GAAP) | $ | 205,333 | | | $ | 202,488 | | | $ | 163,526 | | | $ | 178,355 | | | $ | 172,351 | | | $ | 571,347 | | | $ | 509,320 | Efficiency Ratio (non-GAAP) | | 54.55 | % | | | 55.11 | % | | | 74.45 | % | | | 54.52 | % | | | 55.09 | % | | | 60.44 | % | | | 54.54 | % | | | | | | | | | | | | | Adjusted Noninterest Expense (non-GAAP) | $ | 112,008 | | | $ | 111,589 | | | $ | 121,743 | | | $ | 97,249 | | | $ | 94,941 | | | $ | 345,340 | | | $ | 277,781 | Less: Acquisition-related expenses | | (862 | ) | | | (3,830 | ) | | | (16,968 | ) | | | (524 | ) | | | (276 | ) | | | (21,660 | ) | | | (276 | ) Less: Non-core expenses(1)(2) | | — | | | | — | | | | — | | | | 743 | | | | (633 | ) | | | — | | | | (633 | ) Adjusted Noninterest Expense Excluding Non-core Expenses (non-GAAP) | $ | 111,146 | | | $ | 107,759 | | | $ | 104,775 | | | $ | 97,468 | | | $ | 94,032 | | | $ | 323,680 | | | $ | 276,872 | | | | | | | | | | | | | | Adjusted Revenue (non-GAAP) | $ | 205,333 | | | $ | 202,488 | | | $ | 163,526 | | | $ | 178,355 | | | $ | 172,351 | | | $ | 571,347 | | | $ | 509,320 | Add: Net loss on mortgage loans reclassified to held for sale | | — | | | | — | | | | 29,755 | | | | — | | | | — | | | | 29,755 | | | | — | Adjusted Revenue Excluding Net loss on mortgage loans reclassified to held for sale (non-GAAP) | $ | 205,333 | | | $ | 202,488 | | | $ | 193,281 | | | $ | 178,355 | | | $ | 172,351 | | | $ | 601,102 | | | $ | 509,320 | Adjusted Efficiency Ratio (non-GAAP) | | 54.13 | % | | | 53.22 | % | | | 54.21 | % | | | 54.65 | % | | | 54.56 | % | | | 53.85 | % | | | 54.36 | % (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 TANGIBLE COMMON EQUITY (NON-GAAP) | | | | | | | | (Dollars In Thousands) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | Total Stockholders' Equity (GAAP) | $ | 2,636,381 | | | $ | 2,697,177 | | | $ | 2,672,565 | | | $ | 2,466,667 | | | $ | 2,412,402 | Less: Preferred stock | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) Less: Intangible assets | | (824,506 | ) | | | (827,158 | ) | | | (824,467 | ) | | | (725,802 | ) | | | (727,300 | ) Tangible Common Equity (non-GAAP) | $ | 1,786,750 | | | $ | 1,844,894 | | | $ | 1,822,973 | | | $ | 1,715,740 | | | $ | 1,659,977 | | | | | | | | | | Total Assets (GAAP) | $ | 21,056,722 | | | $ | 21,348,765 | | | $ | 21,072,521 | | | $ | 19,025,101 | | | $ | 18,811,629 | Less: Intangible assets | | (824,506 | ) | | | (827,158 | ) | | | (824,467 | ) | | | (725,802 | ) | | | (727,300 | ) Tangible Assets (non-GAAP) | $ | 20,232,216 | | | $ | 20,521,607 | | | $ | 20,248,054 | | | $ | 18,299,299 | | | $ | 18,084,329 | | | | | | | | | | Tangible Common Equity Ratio (non-GAAP) | | 8.83 | % | | | 8.99 | % | | | 9.00 | % | | | 9.38 | % | | | 9.18 | % TANGIBLE COMMON EQUITY PER COMMON SHARE (NON-GAAP) | | | | | | (Dollars In Thousands, Except Per Share Amounts) | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | Total Stockholders' Equity (GAAP) | $ | 2,636,381 | | | $ | 2,697,177 | | | $ | 2,672,565 | | | $ | 2,466,667 | | | $ | 2,412,402 | Less: Preferred stock | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) Less: Intangible assets | | (824,506 | ) | | | (827,158 | ) | | | (824,467 | ) | | | (725,802 | ) | | | (727,300 | ) Plus: Tax benefit | | 8,470 | | | | 9,084 | | | | 11,069 | | | | 2,966 | | | | 3,290 | Tangible Common Equity, Net of Tax (non-GAAP) | $ | 1,795,220 | | | $ | 1,853,978 | | | $ | 1,834,042 | | | $ | 1,718,706 | | | $ | 1,663,267 | | | | | | | | | | Common Shares Outstanding | | 62,210,134 | | | | 62,205,528 | | | | 62,508,055 | | | | 56,951,939 | | | | 57,192,497 | | | | | | | | | | Tangible Common Equity per Share, Net of Tax (non-GAAP) | $ | 28.86 | | | $ | 29.80 | | | $ | 29.34 | | | $ | 30.18 | | | $ | 29.08 | RETURN ON TANGIBLE COMMON EQUITY (NON-GAAP) (Dollars In Thousands) | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | September 30, | | September 30, | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | 2026 | | | | 2025 | Total Average Stockholders' Equity (GAAP) | $ | 2,695,943 | | | $ | 2,702,249 | | | $ | 2,655,756 | | | $ | 2,452,005 | | | $ | 2,367,971 | | | $ | 2,684,796 | | | $ | 2,349,718 | Less: Average preferred stock | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) | | | (25,125 | ) Less: Average intangible assets, net of tax | | (817,139 | ) | | | (813,608 | ) | | | (784,490 | ) | | | (723,466 | ) | | | (724,619 | ) | | | (805,198 | ) | | | (725,775 | ) Average Tangible Common Equity, Net of Tax (non-GAAP) | $ | 1,853,679 | | | $ | 1,863,516 | | | $ | 1,846,141 | | | $ | 1,703,414 | | | $ | 1,618,227 | | | $ | 1,854,473 | | | $ | 1,598,818 | | | | | | | | | | | | | | Net Income Available to Common Stockholders (GAAP) | $ | 67,847 | | | $ | 43,511 | | | $ | 27,687 | | | $ | 56,596 | | | $ | 56,297 | | | $ | 139,045 | | | $ | 167,530 | Plus: Intangible asset amortization, net of tax | | 2,095 | | | | 2,137 | | | | 1,819 | | | | 1,183 | | | | 1,185 | | | | 6,051 | | | | 3,579 | Tangible Net Income (non-GAAP) | $ | 69,942 | | | $ | 45,648 | | | $ | 29,506 | | | $ | 57,779 | | | $ | 57,482 | | | $ | 145,096 | | | $ | 171,109 | | | | | | | | | | | | | | Return on Tangible Common Equity (non-GAAP) | | 15.09 | % | | | 9.80 | % | | | 6.39 | % | | | 13.57 | % | | | 14.21 | % | | | 10.43 | % | | | 14.27 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | For more information, contact: Nicole M. Weaver, First Vice President and Director of Corporate Administration 765-521-7619 http://www.firstmerchants.com