First Merchants (FRME) Q1 2026 Earnings Transcript

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Thu, April 23, 2026 astatine 10:10 AM CDT 39 min read

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Thursday, April 23, 2026 astatine 9:00 a.m. ET

• Chief Executive Officer — Mark Hardwick

• President — Michael Stewart

• Chief Financial Officer — Michele Kawiecki

• Chief Credit Officer — John Martin

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Mark Hardwick: Thanks for the instauration and for covering the forward-looking connection connected Page two. We released our net yesterday aft markets closed and today's presumption materials are disposable via the nexus connected Page 3 of the net release. Turning to Slide three, you volition spot today's presenters and members of our enforcement absorption team. Joining maine connected the telephone are Michael Stewart, our president; John Martin, our main recognition officer; and Michele Kawiecki, our main fiscal officer. Slide 4 highlights our footprint and fiscal scale. We present run 127 banking centers reflecting the summation of Southern Indiana pursuing the First Savings acquisition. Total assets basal astatine $21.1 cardinal with $15.3 cardinal successful loans and $16.5 cardinal successful deposits.

Adjusted show metrics stay strong, including an adjusted ROA of 1.25% and an adjusted instrumentality connected tangible communal equity exceeding 14%, reflecting the underlying spot of our net engine. Turning to Slide five, archetypal 4th reported nett income was $27.7 million, oregon $0.45 per diluted share. Reported results included 2 notable non-core items. First, the ineligible adjacent of the First Savings acquisition connected February 1 resulted successful $17 cardinal of one-time acquisition-related expenses. Second, during the quarter, we strategically repositioned $357 cardinal of owe loans from held for concern to held for merchantability and we expect to implicit the merchantability of these loans by the extremity of the 2nd quarter. These loans transportation a weighted mean coupon of 3.46%.

The liquidity provided by their merchantability volition beryllium utilized to instantly wage down higher-cost deposits and, implicit time, volition beryllium deployed into commercialized loans astatine a 6%+ yield. This repositioning resulted successful a $29.8 cardinal mark-to-market complaint successful the quarter, with a tangible publication worth earn-back of astir 4 years. Excluding these items, adjusted net per stock totaled $1.03, up from $0.94 a twelvemonth ago, representing 9.6% growth, driven chiefly by nett involvement borderline enlargement and coagulated interest income growth. Our tangible communal equity ratio remains beardown astatine 9% adjacent aft completing the acquisition and continuing disciplined stock repurchases, including $24.9 cardinal successful the archetypal quarter. Now Michael Stewart volition sermon our enactment of concern momentum.