First Merchants Corporation

Thank you for standing by and welcome to the First Merchants Corporation third quarter 2026 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 condition of First Merchants Corporation that involve risk 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 GAAP measures. The press release available on the website contains financial and other quantitative information to be discussed on today's call, as well as a reconciliation of GAAP to non-GAAP measures. As a reminder, today's call is being recorded. I will now turn the conference over to Mark Hardwick, CEO. Mr. Hardwick, you may begin.

Good morning and welcome to First Merchants' third quarter 2026 conference call. Thanks for the introduction and for covering the forward-looking statement on page two. We released our earnings yesterday after markets closed and today's presentation materials are available via the link on page three of the earnings release. Turning to slide three, you will see today's presenters and members of the executive management team. Joining me on today's call are Mike Stewart, our president, John Martin, our chief credit officer, and Michele Kawiecki, our chief financial officer. Slide four highlights our footprint and financial scale. We operate 126 banking centers across Indiana, Michigan, and Ohio. Total assets stand at $21.1 billion with $15.6 billion in loans, $16.9 billion in deposits, and $7.1 billion in assets under advisement. Turning to slide five, third quarter net income totaled $67.8 million, or $1.09 per diluted share. Earnings per share are up 11% from the third quarter of last year and up nearly 30% from the third quarter of 2024. Excluding a small amount of remaining acquisition-related expenses, adjusted earnings per share for the quarter totaled $1.10. Last quarter, we said that we believe the key factors were in place for improved performance in the second half of the year. The third quarter delivered on that belief. Net interest margin expanded six basis points to 3.44%, our highest margin in more than two years, and 20 basis points higher than the third quarter of 2025. Fully taxable equivalent net interest income has grown 20% over the past year. Adjusted pre-tax pre-provision earnings totaled 83.7 million of 19% from a year ago and an adjusted pre-tax pre-provision ROA totaling 1.59%. Return on assets was 1.30% and return on tangible common equity was 15.09%. We also made meaningful progress with the two commercial credits we discussed last quarter. Net charge-offs on those two loans were in line with the specific reserves we established in the second quarter. Non-performing assets were stable at 57 basis points of total assets. Credit costs for new non-accrual loans were recognized in prior quarters, keeping this quarter's provision expense to a modest $3.3 million. Year-to-date net charge-offs of 38 basis points remains consistent with the full-year outlook we provided last quarter. Deposits grew $175.6 million or 4.2% annualized and non-interest-bearing deposits now represent 22% of total deposits. Loan growth was more modest at 1.8% annualized. Year-to-date results on slide six reflect the earnings power of a combined company now that first savings acquisition and integration are fully behind us. Excluding acquisition-related expenses, and the first quarter mortgage loan sale adjustment. Adjusted EPS totaled $2.87 of nearly 16% from the same period two years ago. Adjusted pre-tax pre-provision earnings totaled $247 million of 18% from last year and 24% from two years ago. And our adjusted efficiency ratio improved to 53.85%. Our capital position remains strong. We completed a $100 million subordinated debt issuance in late September. Our total risk-based capital ratio increased to 13.58%, and we repurchased $50.3 million of common stock year-to-date, including $12 million in the third quarter. Tangible common equity was 8.83%. with the decline in tangible book value this quarter driven by the impact of higher interest rates on AOCI rather than our operating performance. Now, Mike Stewart will discuss our line of business momentum.

Thanks, Mark. Start on slide seven, business strategy. Our primary business strategy is to build on our Midwestern strength through disciplined organic growth. Our goal is to be the bank of choice across the Midwest earned through trusted relationships. Our four core business lines continue to work together to deliver financial solutions for businesses and consumers across the markets we serve. We are focused on driving organic growth by concentrating on the client segments in the markets where we hold a competitive advantage and by deepening relationships across our commercial and consumer banking lines of business. We have made meaningful progress building a stronger, more focused growth engine that is supportive by deep client relationships, disciplined capital deployment, and continued investment in the capabilities needed to serve our clients and communities. Our Midwest markets remain resilient and our relationship-based model continues to create opportunities for growth. As we engage with clients every day, we see businesses investing, expanding, and seeking trusted financial partners who can provide our broad range of solutions. Turn to slide eight, a few more comments on loans after a strong second quarter. Third quarter loans, like Mark said, increased at 1.8% annualized rate with strong growth coming from the construction and mortgage loan portfolio. Overall, commercial loans were relatively flat as solid production did occur within our community and corporate banking segments, our asset-based and investment real estate teams, but that could not outpace the normal course payoffs within the sponsor, and the Shared National Credit Portfolios. Pipelines overall are stable, so loan growth should continue through the fourth quarter and mid-single digits. Slide 9, deposits. We continue to focus on our deposit gathering and deepening relationships across both the commercial and consumer side of business. Our objective is to support loan growth with strong core funding while maintaining a disciplined approach to balance sheets. Third quarter deposits grew at a 4.2% annualized rate with the consumer line of business and specifically the private wealth team driving the increase. We spoke last quarter about one of our clients selling a business which resulted in a large and temporary increase in the commercial deposit base. That client has now moved those balances to our private client team for investment services and distributed some of the cash they need to do along the way. The 0.5% annualized year-to-date decline in total deposits is primarily now the result of balance sheet repositioning from the first quarter with first savings bank broker deposits being eliminated. On a year-to-date basis, consumer non-maturity deposits continue to show growth of 3% and net increases in households and as noted on this page, our core commercial loans also grew. So I'll turn it now over to Michele for her detailed summary of the balance sheet income statement. Michele.