First Merchants's Q4 Earnings Call: Our Top 5 Analyst Questions

First Merchants’ fourth quarter performance was driven by continued loan growth, disciplined deposit management, and margin resilience despite an 8.3% year-over-year decline in revenue. Management credited robust expansion in commercial and consumer segments, alongside stable pipelines, for maintaining momentum. CEO Mark Hardwick highlighted, “Loan growth remained robust with $197 million of linked quarter growth,” attributing the results to strong activity in capex financing, revolver utilization, and new business conversions. Expense control and improvements in net interest income also contributed to earnings stability.

Is now the time to buy FRME? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From First Merchants’s Q4 Earnings Call

• Brendan Nosal (Hovde Group) asked about balance sheet optimization plans. CEO Mark Hardwick responded that any repositioning would be modest, primarily involving the sale of First Savings’ bond portfolio to ease liquidity pressures.
• Daniel Tamayo (Raymond James) questioned expectations for loan growth by category. President Michael Stewart indicated balanced pipelines across segments and geographies, projecting mid-single-digit growth for the year, with further upside from the First Savings acquisition.
• Damon Del Monte (KBW) probed on expense outlook and integration timing. CFO Michele Kawiecki guided to a 3%-5% increase in core expenses, with cost savings from First Savings integration expected in the second half of 2026.
• Nathan Race (Piper Sandler) inquired about fee income growth potential. Kawiecki and Stewart confirmed a double-digit growth target, driven by wealth management, treasury services, and product additions from First Savings.
• Terence McEvoy (Stephens Inc.) asked about multifamily construction loan quality and expected charge-offs. Chief Credit Officer John Martin described the portfolio as stable, expecting charge-offs to remain in the $6–$7 million range, consistent with recent quarters.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace and success of First Savings Group integration and realization of targeted cost synergies, (2) loan growth consistency across commercial and consumer segments, and (3) the effectiveness of deposit repricing strategies amid a shifting rate environment. Progress on noninterest income expansion and asset quality metrics will also be important to track.

First Merchants currently trades at $39.78, up from $38.01 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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