First Merchants Closes $2.4B Acquisition, Q1 EPS Tops Estimates
First Merchants reported Q1 net income of $27.7 million ($0.45/share) versus $56.6 million ($0.99) in Q4 2025, with adjusted EPS of $1.03 beating the 96¢ consensus. The bank closed its $2.4 billion First Savings acquisition, boosting assets to $21.1 billion while repurchasing $27.6 million of stock and maintaining an 11.22% CET1 ratio.
1. Q1 Financial Results
First Merchants posted net income of $27.7 million in Q1 2026, or $0.45 per diluted share, down from $56.6 million ($0.99) in Q4 2025. On an adjusted basis, EPS reached $1.03 versus $0.98 in the prior quarter, exceeding the 96¢ consensus estimate.
2. Acquisition of First Savings
The bank completed the legal closing of its acquisition of First Savings Financial Group on February 1, adding $1.8 billion in loans and $1.7 billion in deposits to its balance sheet. Total assets rose to $21.1 billion, enhancing its footprint across Indiana, Ohio and Michigan.
3. Capital Ratios and Share Repurchases
First Merchants maintained a Common Equity Tier 1 capital ratio of 11.22% at quarter end. Year-to-date share buybacks totaled 708,856 shares for $27.6 million, including $24.9 million repurchased in Q1 to bolster shareholder returns.
4. Balance Sheet and Margin Trends
Loans stood at $15.3 billion, up $768 million organically over twelve months; deposits reached $16.5 billion, up $333.5 million excluding acquisition contributions. Net interest margin climbed six basis points to 3.35%, driven by improved funding mix and lower deposit costs.