First Merchants (US:FRME)2026-01-26 21:08Financial Performance - First Merchants Corporation reported a record net income of $224.1 million and diluted EPS of $3.88 for the full year 2025[1]. - In Q4 2025, net income available to common stockholders was $56.6 million, down from $63.9 million in Q4 2024, with diluted EPS at $0.99 compared to $1.10 in the same period[2]. - The return on average assets for Q4 2025 was 1.20%, down from 1.39% in Q4 2024[23]. - Net income available to common stockholders for Q4 2025 was $56,596,000, compared to $63,880,000 in Q4 2024, representing a decline of about 11.3%[22]. - Adjusted Net Income Available to Common Stockholders for the twelve months ended December 31, 2025 was $224,655 thousand, up from $203,315 thousand in 2024, representing an increase of 10.5%[31]. Loan and Deposit Growth - Total loans increased by $197.4 million, or 5.8% annualized, on a linked quarter basis, and by $938.8 million, or 7.3%, over the last twelve months[3]. - Total deposits rose by $424.9 million, or 11.4% annualized, on a linked quarter basis, and by $773.2 million, or 5.3%, year-over-year[6]. - Total loans reached $13,717,822 thousand in Q4 2025 from $12,757,676 thousand in Q4 2024, reflecting a growth of approximately 7.5%[23]. - Total deposits increased to $15,294,855 thousand from $14,521,626 thousand, indicating an increase of about 5.3%[21]. Asset and Liability Management - Total assets of the Corporation reached $19.0 billion as of quarter-end, with total loans at $13.8 billion[4]. - Total assets increased to $19,025,101 thousand from $18,311,969 thousand, representing a growth of approximately 3.9%[21]. - Total liabilities grew to $16,558,434 thousand, up from $16,006,986 thousand, which is an increase of approximately 3.4%[21]. - Stockholders' equity increased to $2,466,667 thousand from $2,412,402 thousand, indicating a growth of 2.2%[25]. Income and Expense Analysis - Net interest income for Q4 2025 was $139.1 million, an increase of $5.4 million, or 4.0%, from the previous quarter[8]. - Noninterest income totaled $33.1 million for the quarter, a decrease of $9.6 million from Q4 2024, primarily due to a prior year gain from branch sales[9]. - Noninterest Expense (GAAP) for the three months ended December 31, 2025, was $99,522 thousand, an increase from $96,561 thousand in the previous quarter[34]. - The provision for credit losses was $7.150 million in Q4 2025, up from $4.200 million in Q4 2024, indicating a significant increase in credit loss provisions[26]. Credit Quality and Performance - Nonperforming assets to total assets were 0.38% for Q4 2025, compared to 0.36% in the prior quarter, indicating stable credit performance[7]. - Nonaccrual loans increased to $71,773 thousand from $65,740 thousand in the previous quarter, representing an increase of 3.9%[24]. - Net charge-offs for Q4 2025 were $6,021,000, significantly higher than $771,000 in Q4 2024, marking a substantial increase[23]. - The allowance for credit losses on loans was $195,597 thousand, slightly up from $192,757 thousand, indicating a marginal increase of about 1.0%[21]. Efficiency and Profitability Metrics - The efficiency ratio for Q4 2025 was 54.52%, compared to 48.48% in Q4 2024, indicating a decline in operational efficiency[23]. - The net interest margin (FTE) for the twelve months ended December 31, 2025, was 3.25%, compared to 3.19% for the same period in 2024, indicating an improvement of 1.88%[30]. - Return on Tangible Common Equity for Q4 2025 was 13.57%, down from 16.75% in Q4 2024, reflecting a decrease of 3.18 percentage points year-over-year[33]. - The Efficiency Ratio (Non-GAAP) improved to 54.52% for the three months ended December 31, 2025, compared to 55.09% in the prior quarter[34]. Acquisition and Future Outlook - The acquisition of First Savings Financial Group, Inc. is expected to close on February 1, 2026, adding approximately $2.4 billion in assets[3]. - The company incurred acquisition-related expenses of $524 thousand in Q4 2025, compared to $800 thousand for the full year 2024[31].