First Merchants Corporation (FRME) Q3 2025 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 23 2025
0mins
Should l Buy FRME?
Source: SeekingAlpha
Return on Assets (ROA) 1.22% for the 9 months ended September 30, 2025, consistent with the year-to-date number and reflecting high performance.
Loan Growth 9% year-to-date annualized growth, with $268 million in commercial loan growth for the quarter (over 10% annualized). Growth driven by CapEx financing, increased usage of revolvers, M&A financings, and new business conversion.
Net Income $167.5 million year-to-date, an increase of $31.9 million or 23.5% from the same period in 2024. Growth attributed to strong balance sheet performance and earnings.
Earnings Per Share (EPS) $2.90 year-to-date, an increase of $0.59 or 25.5% from the same period in 2024.
Efficiency Ratio 55% for the quarter, consistent with high performance goals.
Nonperforming Assets (NPA) + 90 Days Past Due to Total Loans 0.51%, down from 0.62% a year ago, indicating improved asset quality.
Net Interest Income $139.9 million on a fully tax-equivalent basis for Q3, up $0.7 million linked quarter and $2.9 million from the same period in the prior year.
Noninterest Income $32.5 million for Q3, with customer-related fees contributing $29.3 million, reflecting strong momentum.
Total Revenue Increased by 4.5% year-to-date compared to 2024, driven by balance sheet growth and improved earning asset mix.
Tangible Book Value Increased 4% linked quarter and 9% year-over-year, reflecting strong earnings and AOCI recapture.
Allowance for Credit Losses (ACL) $194.5 million at quarter end, with a coverage ratio of 1.43%, remaining robust.
Deposit Growth $96 million in total for the quarter, driven by Consumer segment growth. Non-maturity deposit balances increased by $178 million year-to-date, while maturity deposit balances decreased by $198 million.
Net Charge-Offs $5.1 million for the quarter, with a $4.3 million provision recorded.
Total Loan Portfolio Yield 6.4%, an increase of 8 basis points from the prior quarter, driven by loan originations and refinancings at an average yield of 6.84%.
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Analyst Views on FRME
Wall Street analysts forecast FRME stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 41.640
Low
46.00
Averages
48.00
High
50.00
Current: 41.640
Low
46.00
Averages
48.00
High
50.00
About FRME
First Merchants Corporation is a financial holding company. The Company has one full-service bank charter, First Merchants Bank (the Bank). The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank). Through the Bank, the Company offers a broad range of commercial and consumer banking services to meet the diverse needs of its customers. Its commercial banking team offers a full spectrum of debt capital, treasury management services and depository products. The consumer banking group offers a variety of consumer deposit and lending products. The mortgage banking team offers consumer mortgage solutions to assist with the purchase, refinance, construction or renovation of residential properties. Private Wealth Advisors offers personal wealth management services with expertise in investment management, private banking, fiduciary estate and financial planning. The Bank includes about 110 banking locations in Indiana, Ohio, and Michigan.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
First Merchants Corporation Declares Cash Dividend
- Dividend Declaration: First Merchants Corporation announced a cash dividend of $0.36 per common share on February 9, 2026, reflecting the company's stable profitability and commitment to shareholder returns.
- Payment Schedule: The dividend is set to be paid on March 20, 2026, to common shareholders of record as of March 6, 2026, ensuring timely returns for investors and bolstering their confidence in the company.
- Company Overview: Headquartered in Muncie, Indiana, First Merchants Corporation operates as a financial holding company with a full-service bank charter through First Merchants Bank, showcasing its comprehensive capabilities in the financial services sector.
- Stock Trading Information: The company's common stock is traded on the NASDAQ Global Select Market System under the ticker symbol FRME, facilitating investor access to market information and trading opportunities.
See More
First Merchants Appoints Larry Myers to Board of Directors
- New Board Member: First Merchants Corporation has appointed Larry Myers to its Board of Directors, bringing nearly 20 years of experience as CEO of First Savings Bank, which is expected to enhance the company's governance and strategic capabilities.
- Post-Merger Impact: The merger with First Savings Bank, completed on February 1, 2026, strengthens First Merchants' presence in southern Indiana, and Myers' addition is anticipated to drive long-term growth in the region.
- Market Knowledge Advantage: Myers' deep understanding of the southern Indiana market aligns well with First Merchants' long-term growth priorities, which is expected to support the company's efforts in creating customer value in the area.
- Commitment to Strategic Growth: CEO Mark K. Hardwick emphasized that Myers' community banking experience will provide valuable insights to the board, supporting disciplined growth and strong financial performance, thereby enhancing shareholder value.
See More
First Merchants Corporation Q4 2025 Earnings Call Highlights
- Asset and Income Innovation: First Merchants Corporation reported a net income of $56.6 million and earnings per share of $0.99 in Q4 2025, with an annual return on assets of 1.21%, demonstrating sustained growth in asset management and profitability, further solidifying its market position.
- Loan and Deposit Growth: The company reported a loan growth of $197 million for the quarter, achieving a 7.3% annual growth rate, while deposits increased by $424.9 million, with an annualized growth rate of 11.4%, indicating strong performance in the credit market and enhanced customer trust.
- M&A Integration Confidence: CEO Mark Hardwick confirmed the imminent closing of the First Savings Group acquisition, expected to add approximately $2.4 billion in assets and enhance the company's market share in Southern Indiana and the Louisville area, reflecting confidence in future growth.
- Expense and Revenue Outlook: CFO Kawiecki projected a 3% to 5% increase in noninterest expenses for 2026 while planning for a 10% growth in noninterest income, indicating a strategic focus on cost control while actively seeking revenue diversification.
See More
First Merchants Reports Decline in Q4 Earnings
- Earnings Decline: First Merchants Corporation reported a net income of $56.60 million for Q4, translating to an EPS of $0.99, which is a decrease from $63.88 million and $1.10 per share last year, indicating a weakening in profitability.
- Adjusted Earnings: Excluding items, adjusted earnings stood at $56.43 million or $0.98 per share, suggesting ongoing pressure on the company's core business performance, which may impact investor confidence.
- Revenue Growth: Despite the earnings decline, the company achieved a 3.5% year-over-year revenue increase to $139.06 million, up from $134.37 million last year, indicating potential for sales growth.
- Market Reaction: The earnings drop may raise concerns in the market regarding First Merchants' future performance, especially amid increasing economic uncertainty, prompting investors to reassess their strategies.
See More
First Merchants Corporation (FRME) Declares $0.4688 Quarterly Dividend with 7.26% Yield
- Dividend Declaration: First Merchants Corporation has declared a quarterly dividend of $0.4688 per share, consistent with previous distributions, reflecting the company's stable cash flow and profitability, which enhances investor confidence.
- Yield Performance: The forward yield of 7.26% not only attracts investors seeking stable returns but may also enhance the stock's market appeal, promoting price stability amid market fluctuations.
- Payment Schedule: The dividend is payable on February 16, with a record date of January 30 and an ex-dividend date also on January 30, ensuring shareholders receive timely returns and strengthening the relationship between the company and its investors.
- Acquisition Plans: First Merchants is targeting a mid-first quarter close for its acquisition of First Savings, aiming to drive future growth through expanded loan offerings, demonstrating the company's proactive strategy in mergers and acquisitions.
See More
First Merchants Corporation Declares $46.88 Quarterly Dividend on Preferred Stock
- Quarterly Cash Dividend: First Merchants Corporation has declared a quarterly cash dividend of $46.88 per share, reflecting the company's commitment to shareholder returns, which is expected to enhance investor confidence and attract more investments.
- Preferred Stock Details: The dividend applies to its 7.50% Non-Cumulative Perpetual Preferred Stock Series A, with each depositary share yielding $0.4688, further enhancing the attractiveness of the preferred stock and potentially increasing market trading activity.
- Payment Schedule: The dividend will be payable on February 16, 2026, to stockholders of record on January 30, 2026, ensuring timely returns for shareholders and strengthening trust between the company and its investors.
- Company Background: First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana, operating First Merchants Bank, and its ongoing dividend policy demonstrates its robust financial health and confidence in future growth.
See More
First Merchants Corporation Declares Cash Dividend
- Dividend Declaration: First Merchants Corporation announced a cash dividend of $0.36 per common share on February 9, 2026, reflecting the company's stable profitability and commitment to shareholder returns.
- Payment Schedule: The dividend is set to be paid on March 20, 2026, to common shareholders of record as of March 6, 2026, ensuring timely returns for investors and bolstering their confidence in the company.
- Company Overview: Headquartered in Muncie, Indiana, First Merchants Corporation operates as a financial holding company with a full-service bank charter through First Merchants Bank, showcasing its comprehensive capabilities in the financial services sector.
- Stock Trading Information: The company's common stock is traded on the NASDAQ Global Select Market System under the ticker symbol FRME, facilitating investor access to market information and trading opportunities.
See More
First Merchants Appoints Larry Myers to Board of Directors
- New Board Member: First Merchants Corporation has appointed Larry Myers to its Board of Directors, bringing nearly 20 years of experience as CEO of First Savings Bank, which is expected to enhance the company's governance and strategic capabilities.
- Post-Merger Impact: The merger with First Savings Bank, completed on February 1, 2026, strengthens First Merchants' presence in southern Indiana, and Myers' addition is anticipated to drive long-term growth in the region.
- Market Knowledge Advantage: Myers' deep understanding of the southern Indiana market aligns well with First Merchants' long-term growth priorities, which is expected to support the company's efforts in creating customer value in the area.
- Commitment to Strategic Growth: CEO Mark K. Hardwick emphasized that Myers' community banking experience will provide valuable insights to the board, supporting disciplined growth and strong financial performance, thereby enhancing shareholder value.
See More
First Merchants Corporation Q4 2025 Earnings Call Highlights
- Asset and Income Innovation: First Merchants Corporation reported a net income of $56.6 million and earnings per share of $0.99 in Q4 2025, with an annual return on assets of 1.21%, demonstrating sustained growth in asset management and profitability, further solidifying its market position.
- Loan and Deposit Growth: The company reported a loan growth of $197 million for the quarter, achieving a 7.3% annual growth rate, while deposits increased by $424.9 million, with an annualized growth rate of 11.4%, indicating strong performance in the credit market and enhanced customer trust.
- M&A Integration Confidence: CEO Mark Hardwick confirmed the imminent closing of the First Savings Group acquisition, expected to add approximately $2.4 billion in assets and enhance the company's market share in Southern Indiana and the Louisville area, reflecting confidence in future growth.
- Expense and Revenue Outlook: CFO Kawiecki projected a 3% to 5% increase in noninterest expenses for 2026 while planning for a 10% growth in noninterest income, indicating a strategic focus on cost control while actively seeking revenue diversification.
See More
First Merchants Reports Decline in Q4 Earnings
- Earnings Decline: First Merchants Corporation reported a net income of $56.60 million for Q4, translating to an EPS of $0.99, which is a decrease from $63.88 million and $1.10 per share last year, indicating a weakening in profitability.
- Adjusted Earnings: Excluding items, adjusted earnings stood at $56.43 million or $0.98 per share, suggesting ongoing pressure on the company's core business performance, which may impact investor confidence.
- Revenue Growth: Despite the earnings decline, the company achieved a 3.5% year-over-year revenue increase to $139.06 million, up from $134.37 million last year, indicating potential for sales growth.
- Market Reaction: The earnings drop may raise concerns in the market regarding First Merchants' future performance, especially amid increasing economic uncertainty, prompting investors to reassess their strategies.
See More
First Merchants Corporation (FRME) Declares $0.4688 Quarterly Dividend with 7.26% Yield
- Dividend Declaration: First Merchants Corporation has declared a quarterly dividend of $0.4688 per share, consistent with previous distributions, reflecting the company's stable cash flow and profitability, which enhances investor confidence.
- Yield Performance: The forward yield of 7.26% not only attracts investors seeking stable returns but may also enhance the stock's market appeal, promoting price stability amid market fluctuations.
- Payment Schedule: The dividend is payable on February 16, with a record date of January 30 and an ex-dividend date also on January 30, ensuring shareholders receive timely returns and strengthening the relationship between the company and its investors.
- Acquisition Plans: First Merchants is targeting a mid-first quarter close for its acquisition of First Savings, aiming to drive future growth through expanded loan offerings, demonstrating the company's proactive strategy in mergers and acquisitions.
See More
First Merchants Corporation Declares $46.88 Quarterly Dividend on Preferred Stock
- Quarterly Cash Dividend: First Merchants Corporation has declared a quarterly cash dividend of $46.88 per share, reflecting the company's commitment to shareholder returns, which is expected to enhance investor confidence and attract more investments.
- Preferred Stock Details: The dividend applies to its 7.50% Non-Cumulative Perpetual Preferred Stock Series A, with each depositary share yielding $0.4688, further enhancing the attractiveness of the preferred stock and potentially increasing market trading activity.
- Payment Schedule: The dividend will be payable on February 16, 2026, to stockholders of record on January 30, 2026, ensuring timely returns for shareholders and strengthening trust between the company and its investors.
- Company Background: First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana, operating First Merchants Bank, and its ongoing dividend policy demonstrates its robust financial health and confidence in future growth.
See More
