EL7.AI
StocksMedium•21 October 2026•
2 min read

First Merchants' earnings available to common shareholders rise to $67.8 million in third quarter

Key Facts

1Income available to common shareholders was $67.8 million, with diluted earnings per share of $1.09.
2Net interest income was $161.1 million, up quarter-on-quarter and year-on-year.
3Deposits increased by $175.6 million during the quarter, equivalent to annualized growth of 4.2%.
4Net credit charge-offs totaled $29.4 million, driven by troubled credit facilities for which reserves had been established in the previous quarter.
5The common equity tier 1 capital ratio was 11.22%.

First Merchants on October 21 reported net income available to common shareholders of $67.8 million for the third quarter of 2026, exceeding levels in the previous quarter and the same period a year earlier. Diluted earnings per share were $1.09, according to the company's earnings release. The company had reported income available to common shareholders of $43.5 million and diluted earnings per share of $0.70 in the second quarter. In the third quarter of 2025, income available to common shareholders was $56.3 million and diluted earnings per share were $0.98. Total net income in the third quarter of 2026, before preferred stock dividends, was $68.315 million. Excluding non-core costs, adjusted diluted earnings per share were $1.10. Adjusted pre-tax, pre-provision income was $83.7 million, according to the release.

In its banking operations, net interest income was $161.1 million, up from the previous quarter and the same period a year earlier, according to the company. Net interest margin on a fully tax-equivalent basis reached 3.44%. Deposits increased by $175.6 million during the quarter. The increase represented annualized quarterly growth of 4.2%, according to the earnings release. The common equity tier 1 capital ratio stood at 11.22% at quarter-end.

First Merchants recorded a provision for credit losses of $3.3 million in the third quarter. Net credit charge-offs totaled $29.4 million. The company attributed the charge-offs to troubled credit facilities for which reserves had been established in the previous quarter. It had classified two commercial lending relationships, with total balances of $41.8 million, as non-accrual loans in the second quarter. It recorded $29.7 million in associated reserves at that time, according to that quarter's earnings release. In its third-quarter release, the company said: "Nonperforming assets to total assets were 57 basis points, compared with 56 basis points in the previous quarter."

The company had announced in September the pricing of a $100 million offering of subordinated notes. The notes carry an initial fixed interest rate of 6.750% that later switches to a floating rate, and mature in 2036, according to the offering announcement. On the management front, First Merchants Bank announced Mark Hardwick's retirement at year-end. Mike Stewart is set to succeed him as president and chief executive officer at the start of 2027. The company will hold its earnings conference call and webcast on October 22, 2026, at 9:00 a.m. U.S. Eastern Time.