First Merchants Q2 Earnings Call Highlights

Key Points

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• First Merchants bushed connected earnings successful Q2 2026 with nett income of $43.5 million, oregon $0.70 per share, arsenic stronger nett involvement income and borderline enlargement helped offset recognition costs.

• The bank's net involvement borderline roseate to 3.38%, aided by little backing costs, improved indebtedness yields, and the payoff from a owe indebtedness merchantability that reduced higher-cost brokered and wholesale funding.

• Credit issues weighed connected results aft 2 commercialized loans were moved to non-accrual, driving a $33 cardinal proviso for recognition losses and pushing absorption to expect higher charge-offs successful the 2nd fractional of 2026.

First Merchants (NASDAQ:FRME) reported second-quarter 2026 nett income of $43.5 million, oregon $0.70 per diluted share, arsenic stronger gross and borderline enlargement were offset by recognition costs tied to 2 commercialized loans moved to non-accrual status.

Chief Executive Officer Mark Hardwick said the institution was "disappointed" by the 2 downgrades but said absorption does not presumption them arsenic typical of the broader indebtedness portfolio. The slope recorded adjusted pre-tax, pre-provision net of $84.6 million, up 7.5% from the anterior quarter, portion nett involvement borderline expanded to 3.38%.

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Hardwick said First Merchants ended the 4th with $21.3 cardinal successful full assets, $15.5 cardinal successful loans and $16.8 cardinal successful deposits. The institution present operates 126 banking centers, reflecting the summation of Southern Indiana locations pursuing the First Savings acquisition.

Loan Growth Rebounds, Deposits Rise Seasonally

President Mike Stewart said indebtedness maturation returned to much emblematic levels aft a level archetypal quarter. Commercial and user loans each grew astatine astir a 6% annualized complaint successful the 2nd quarter, with enactment coming crossed the bank's three-state footprint.

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"Our Midwest economies proceed to expand, our clients' businesses proceed to grow, and our bankers proceed to triumph caller relationships," Stewart said. He said the institution remains assured successful its anticipation for mid-single-digit indebtedness maturation done the extremity of 2026.

Deposits grew astatine a 6.5% annualized complaint successful the quarter. Stewart attributed commercialized deposit maturation chiefly to seasonal nationalist money increases tied to taxation collections and a ample impermanent deposit from a client's concern sale. He said user deposit declines were besides seasonal, reflecting spending of taxation refunds, and that the patterns should normalize done the remainder of the year.