First Merchants Corporation Reports Q2 2026 Financial Results with Asset and Loan Growth

First Merchants Corporation reported its financial results for the second quarter and first half of 2026, highlighting a significant increase in total assets and loans, largely attributed to the acquisition of First Savings Financial Group, Inc. on February 1, 2026. The Corporation's total assets reached $21.3 billion, a 12.2% increase from $19.0 billion at the end of 2025. Total loans also rose to $15.6 billion, up from $13.8 billion, with the acquisition contributing approximately $1.8 billion in loans. The net income available to common stockholders for the second quarter was $43.5 million, or $0.70 per diluted share, compared to $56.4 million, or $0.98 per diluted share, in the same quarter of the previous year.

The Corporation's net interest income for the second quarter was $158.9 million, an increase of 19.5% from $133.0 million in the prior year, driven by a rise in average loan balances and a favorable funding mix. The net interest margin on a fully taxable equivalent basis improved to 3.38% from 3.25% year-over-year. However, the provision for credit losses increased significantly to $33.0 million for the quarter, reflecting the acquisition's impact and specific reserves established for two commercial lending relationships. The allowance for credit losses on loans stood at $241.6 million, or 1.56% of total loans, up from $195.6 million, or 1.42%, at the end of 2025.

In terms of operational metrics, First Merchants reported a total deposit increase of $1.5 billion, or 19.1% annualized, to $16.8 billion, with the acquisition contributing $1.7 billion in deposits. The Corporation's noninterest income for the second quarter was $37.2 million, an increase of 18.7% from the previous year, primarily due to higher customer-related fees. However, for the first half of 2026, noninterest income decreased to $43.0 million, largely due to a $29.8 million net loss recognized on mortgage loans that were moved to held-for-sale.

Looking ahead, First Merchants Corporation remains focused on integrating the First Savings acquisition and optimizing its loan portfolio. The Corporation's management anticipates that the acquisition will be accretive to earnings and enhance its market presence in Indiana. The outlook for the remainder of 2026 includes continued emphasis on organic loan growth and maintaining strong credit quality, despite the challenges posed by economic conditions and market volatility. The Corporation's capital ratios remain strong, with all regulatory capital ratios exceeding the requirements for a well-capitalized institution.