First Merchants (FRME) Q4 2025 earnings summary

Executive summary

• Achieved record full-year net income of $224.1M and diluted EPS of $3.88 for 2025, with Q4 net income of $56.6M ($0.99 per share), up 13.8% year-over-year.

• Total assets reached $19.0B, loans $13.8B, and deposits $15.3B at year-end 2025.

• Efficiency ratio for 2025 was 54.5%, with Q4 at 54.52%.

• Regulatory and shareholder approval received for the First Savings Financial Group acquisition, adding $2.4B in assets and expanding into Southern Indiana and Louisville, closing February 1, 2026.

• Repurchased 1,211,224 shares for $46.9M in 2025, including 271,953 shares for $10.4M in Q4.

Financial highlights

• Annual ROA was 1.21% and return on tangible common equity was 14.08%.

• Loan growth of $197.4M in Q4 (5.8% annualized) and $938.8M for the year (7.3%).

• Tangible book value per share rose 12.7% year-over-year to $30.18.

• Net interest income in Q4 was $145.3M, up $5.4M sequentially and $5.1M year-over-year; net interest margin increased 5 bps to 3.29%.

• Noninterest income in Q4 was $33.1M, with strong growth in wealth management, card payment, and mortgage fees.

Outlook and guidance

• Expect mid to high single-digit loan growth (6–8%) in 2026, consistent with 2025.

• Double-digit non-interest income growth targeted for 2026, even excluding the acquisition.

• Core non-interest expense budgeted to rise 3–5% in 2026, with 27.5% annualized cost savings from the acquisition expected post-integration.

• Efficiency ratio expected to remain below 55% throughout 2026.

• Net interest margin projected to compress slightly in 2026, but net interest income to grow.