The clean quarter after Q2's credit spike and continued NIM expansion confirm the core earnings trajectory is intact. Watch the Q4 earnings call for credit normalization trends (NCOs returning to sub-20bp) and any update on the CEO transition timeline — the stock's 12.3x LTM P/E leaves room for multiple expansion if credit costs remain benign.
Price Chart
Executive Summary
First Merchants Corporation reported Q3 2026 GAAP diluted EPS of $1.09 (adjusted $1.10), beating consensus of $1.00 by ~10%, with net interest margin expanding 20bp YoY to 3.44% and organic deposit growth of 4.2% annualized. The quarter was clean of the prior period's credit spike (provision fell to $3.3M from $33M) and the $100M sub-debt issuance in late September bolsters Tier 2 capital, though net charge-offs spiked to $29.4M on two previously reserved credits and AOCI drove tangible book value down $0.94 to $28.86.
Key Financial Metrics
Key Facts
- GAAP diluted EPS $1.09 vs $0.98 YoY; adjusted diluted EPS $1.10 vs $0.99 YoY
- Net interest margin (FTE) 3.44%, up 6bp QoQ and 20bp YoY
- Net interest income $161.1M, +20.5% YoY
- Provision for credit losses fell to $3.3M from $33.0M in Q2 2026
- Net charge-offs $29.4M driven by two previously reserved commercial credits
- Organic loan growth $70.2M (1.8% annualized); organic deposit growth $175.6M (4.2% annualized)
- Completed $100M subordinated debt issuance in late September
- Repurchased 287,431 shares for $12.0M in Q3; YTD 1,264,062 shares for $50.3M
- CET1 ratio 11.22%; total RBC ratio 13.58%
- CEO transition announced: President Mike Stewart to succeed Mark Hardwick at year-end 2026
Financial Impact
EPS beat consensus by ~$0.10 (10%); net interest margin expansion of 20bp YoY adds ~$30M annualized revenue vs prior year; $100M sub-debt issuance at 6.75% adds ~$6.8M annual interest expense
Risk Factors
- Net charge-offs of $29.4M (0.75% annualized) remain elevated vs historical ~0.15%; further credit deterioration in the two large credits could pressure provision
- AOCI hit $227.9M loss (vs $155.9M a year ago) from rising rates, pressuring tangible book value and TCE ratio (8.83%)
- $100M sub-debt at 6.75% adds ~$6.8M annual interest cost, partially offsetting NIM gains
- CEO transition introduces execution risk during integration of First Savings acquisition
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000712534-26-000073 |
| Document: frme3q2026earningsreleas.htm | 0000712534-26-000073 |
| Document: frme-20261021.htm | 0000712534-26-000073 |
| Document: 0000712534-26-000073-index-headers.html | 0000712534-26-000073 |
| Document: 0000712534-26-000073-index.html | 0000712534-26-000073 |
| Document: 0000712534-26-000073.txt | 0000712534-26-000073 |
| 8-K Data (Synthetic) | 0000712534-26-000073 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 21, 2026 6d ago | 8-K | $40.83 $40.68 | ▼ −0.37% | ▲ +0.15% | $40.93 (+0.24%) |
Oct 21, 2026 6d ago | Press Release | $40.83 $40.68 | ▼ −0.37% | ▲ +0.15% | $40.93 (+0.24%) |
Oct 15, 2026 12d ago | 8-K | $39.48 $39.60 | ▲ +0.30% | ▲ +1.41% | $40.93 (+3.67%) |
Oct 15, 2026 12d ago | Press Release | $39.48 $39.60 | ▲ +0.30% | ▲ +1.41% | $40.93 (+3.67%) |
Oct 1, 2026 26d ago | 8-K | $39.58 $40.15 | ▲ +1.44% | ▲ +0.70% | $40.93 (+3.41%) |
Oct 1, 2026 26d ago | Press Release | $39.58 $40.15 | ▲ +1.44% | ▲ +0.70% | $40.93 (+3.41%) |
Sep 30, 2026 27d ago | Press Release | $39.78 | awaiting T+1 | — | $40.93 (+2.89%) |
Sep 25, 2026 4w ago | 8-K | $40.71 $40.37 | ▼ −0.84% | ▼ −0.09% | $40.93 (+0.54%) |
Sep 24, 2026 4w ago | 424B5 | $40.71 $40.37 | ▼ −0.84% | ▼ −0.09% | $40.93 (+0.54%) |
Sep 23, 2026 4w ago | Press Release | $40.49 $40.71 | ▲ +0.56% | ▲ +0.01% | $40.93 (+1.10%) |
US Market Status
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