Core Insights - First Merchants Corporation reported record full-year results for 2025, highlighting strong loan and deposit growth, an improving net interest margin, and progress on the acquisition of First Savings Group [7] Deposits - The fourth quarter was the strongest for deposit growth, primarily driven by consumer deposits, which increased by $155 million, including over $250 million in non-maturity balance growth [2] - Commercial deposits growth was attributed to public fund depository relationships, which are higher cost but tied to local government relationships [1] Lending - Loan growth was robust across segments, with linked-quarter growth of $197 million (5.8% annualized) and full-year growth of $939 million (7.3%) [4] - Consumer lending saw a growth of $44 million in the fourth quarter and $87 million for the year, driven by residential mortgage, HELOC, and private banking relationships [3] Financial Performance - The company ended 2025 with total assets of $19 billion, total loans of $13.8 billion, and total deposits of $15.3 billion, achieving record net income of $224.1 million and diluted EPS of $3.88, up 13.8% from the prior year [6] - The efficiency ratio was reported at 54.5% for 2025, with revenues growing nearly five times faster than expenses [5] Net Interest Margin - Net interest margin improved to 3.29%, with net interest income on a fully tax-equivalent basis rising to $145.3 million, up $5.4 million from the prior quarter [9] - Deposit costs decreased by 12 basis points to 2.32%, contributing to a $3 million reduction in interest expense despite a $424.9 million increase in deposits [10] Credit Quality - Asset quality remained strong, with non-performing assets rising to 2.54%, but a significant non-accrual loan was resolved without loss [12] - The allowance for credit losses ended the quarter at $195.6 million, with a coverage ratio of 1.42% [13] Acquisition of First Savings Group - The acquisition is expected to close on February 1, 2026, adding approximately $2.4 billion in assets and expanding the company's presence into Southern Indiana and the Louisville MSA [14] - Integration efforts are on track, with product and process mapping completed and onsite training set to begin after legal close [14] Future Outlook - The company plans for 10% growth in non-interest income for 2026 and anticipates mid-single-digit loan growth near term, with a target range of 6% to 8% for the year [18]