First Merchants Corporation

Thank you for standing by and welcome to the First Merchants Corporation fourth quarter 2025 earnings conference call. Before we begin, management would like to remind you that today's call contains forward-looking statements with respect to the future performance and financial conditions of First Merchant Corporation and involves risks and uncertainties. Further information is contained within the press release, which we encourage you to review. Additionally, management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable gap measures. The press release available on the website contains financial and other quantitative information to be discussed today and will be as well as reconciliation of gap and non-gap measures. As a reminder, today's call is being recorded. I would now like to hand the conference over to your speaker today, Mr. Mark Hardwick, CEO. Mr. Hardwick, you may begin.

Good morning and welcome to First Merchant's fourth quarter 2025 earnings call. Thanks for the introduction and for covering the forward-looking statements. We released our earnings yesterday. After the market close, you can access today's slides by following the link on the third page of our earnings release. Joining me today are President Mike Stewart, Chief Credit Officer John Martin, and Chief Financial Officer Michelle Kaviesky. On slide four, you'll see our 111 banking centers across Indiana, Ohio, and Michigan, along with several recent awards recognizing our culture and performance. We ended the year with record total assets of 19 billion, record total loans of 13.8 billion, and record total deposits of 15.3 billion. On slides five and six, our strong balance sheet and earnings performance reflect the quality, of the First Merchants team, our customer base, and our community-oriented business model. For the full year, we delivered record net income of $224.1 million and record diluted earnings per share of $3.88, an increase of 13.8% from the previous year. Fourth quarter net income totaled $56.6 million or 99 cents per share. Annual return on assets was 1.21% and annual return on tangible common equity was 14.08%. Loan growth remained robust with 197 million of length quarter growth or 5.8% annualized and nearly 1 billion or 939 million of growth for the year representing 7.3%. Our efficiency ratio was 54.5% for the year, and we achieved significant operating leverage with revenues growing almost five times faster than expenses. We have now received all regulatory and shareholder approval to proceed with the acquisition of First Savings Group, which adds approximately $2.4 billion of assets and expands our presence into southern Indiana and the Louisville MSA. We remain confident in our strategic and financial benefits of the merger, and we'll actually close this weekend on February 1st, 2026. Now, Mike Stewart will cover some of our line of business metrics.

Thank you, Mark, and good morning to all. The business strategy summarized on slide seven has been updated. to reflect the collective work of our lines of business leadership teams. Each of these business units refined and updated their strategy in alignment with our primary focus of building on our Midwestern strength, growing organically through deeper relationships and smarter use of technology for enhanced client relationship and internal efficiencies. 2025 was a year of momentum and record results. This slide summarizes how our teams have been winning and capturing market share. We remain a commercially focused organization across all these business segments with an eye on growing within the markets pictured on the next slide. So let's go to slide eight. As Mark stated earlier, this was another great quarter of loan growth across all segments and across all markets. It is very pleasing to see our Midwest economies continue to expand Our clients' businesses continue to grow and see our bankers continuing to win new relationships. 153 million in commercial loan growth for the quarter, or 6% annualized, 852 million of increased commercial loan balances year-to-date, nearly 7% growth rate for all of 2025. CapEx financing, increased usage of revolvers, M&A financing, and new business conversion are the drivers of this growth. Another encouraging bullet point on this page is the quarter ending pipeline, which is stable from prior quarter and gives me optimism that we will be able to maintain our loan growth into the first quarter. The consumer segment also shared in balance sheet growth with the residential mortgage, HELOC, and private banking relationships driving the $44 million of loan growth for the quarter and the $87 million for all 2025. Pipelines in this segment also consisted from our end of quarter prior. So, we can turn to slide nine and talk about deposits. The fourth quarter was our strongest quarter of deposit growth with the consumer segment driving increases in new households and balances. Enhanced digital platforms are deepening our client relationships. Our marketing efforts are leveraging the strength of our local brand and the reputation that we have and driving new relationships. The bottom section of this page summarizes the fourth quarter growth of $155 million of total consumer deposit increases with over $250 million in non-maturity balance growth. The full year's results also reflect the growth in the mix of non-maturity and maturity balances assisting in the margin improvement Michelle will review next. Commercial business segment is summarized on the top of the page. While deposits have increased, in both the quarter and year to date, the primary driver has come through our public fund depository relationships. It is a higher cost of deposit, but they are local government and public relationships that utilize many other treasury services we offer. Part of the increase in loan balances come from higher line of credit utilization, which typically reduces operating deposit account balances. Improving the mix of all deposit categories has been the focus of our teams for the past year and has been accomplished by focusing on primary, core accounts, and deposit cost. Overall, I'm pleased with the active engagement our teams are having with their clients as we've continued our pricing discipline, specifically with maturity deposits and public funds, and remain hyper-focused on relationships and converting single product users. Before turning the call over to Michelle, one last comment regarding First Savings Bank. As Mark said, our integration efforts are on track. The engagement of their team has been strong. We have completed our product and process mapping, so post-legal close, we will begin the onsite training and preparation for the May integration. Their community bank model and specialty verticals have a solid reputation, and continuing their growth within southern Indiana and these verticals will be our priority. So I'm going to turn the call over to Michelle now, and she can review in more detail the drivers of our balance sheet and income statement. Michelle?