First Merchants (FRME) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $54.9 million, with diluted EPS of $0.94, up 15.6% year-over-year and 10.6% on a core basis.

• Annualized ROA was 1.21%, ROTCE 14.12%, and tangible book value per share increased 9.1% year-over-year to $27.34.

• Total assets reached $18.4 billion, with 4.8% annualized loan growth to $13.0 billion.

• A $100 million share repurchase program was approved, with $10 million repurchased YTD and $30 million of subordinated debt redeemed.

• Strong capital position maintained, with tangible common equity ratio at 8.90%.

Financial highlights

• Net interest income was $130.3 million, with net interest margin at 3.22%; noninterest income totaled $30.0 million.

• Noninterest expense was $92.9 million, down sequentially and year-over-year; efficiency ratio at 54.54%.

• Total assets were $18.4 billion, loans $13.0 billion, deposits $14.5 billion, and assets under advisement $5.8 billion.

• Book value per share was $39.91; tangible book value per share was $27.34.

• Dividend per share remained at $0.35; payout ratio at 37.2%.

Outlook and guidance

• Management expects mid-to-high single-digit loan and fee income growth for 2025, with double-digit growth in mortgage and wealth management.

• Expense growth is expected at 1%-3% over the 2024 base, with stable net interest margin and effective tax rate of 13-14%.

• Focus remains on organic growth, digital investments, and disciplined capital allocation.