First Merchants misses estimates for Q2 adjusted profit  as credit quality deteriorates

First Merchants

22/07/2026 21:23

    

    Overview
  
U.S. regional bank's Q2 adjusted EPS missed analyst expectations
Adjusted net income for Q2 also missed analyst expectations
Results impacted by higher provision expenses from two commercial loans placed on nonaccrual

    

    Outlook
  
Company did not provide specific financial guidance for the current or future periods

    

    Result Drivers
  
CREDIT QUALITY DETERIORATION - Higher provision expense driven by two commercial lending relationships placed on nonaccrual status, with associated reserves of $29.7 mln recorded
LOAN AND DEPOSIT GROWTH - Loan growth of $221.7 mln and deposit growth of $267.8 mln on a linked quarter basis supported balance sheet expansion
NONINTEREST INCOME REBOUND - Noninterest income increased from prior quarter, reflecting the absence of a negative mortgage loan valuation adjustment and higher gains on sales of loans and derivative hedge fees

    
Company press release: ID:nGNX7R3bJc

    

    Key Details
  

            Metric
          

            Beat/Miss
          

            Actual
          

            Consensus Estimate
          
Q2 Adjusted EPS
Miss
$0.74
$1.03 (6 Analysts)
Q2 EPS
 
$0.70
 
Q2 Adjusted Net Income
Miss
$46.40 mln
$65.05 mln (5 Analysts)
Q2 Net Income
 
$43.50 mln
 
Q2 Net Interest Income
 
$158.90 mln
 

    

    Analyst Coverage
  
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the banks peer group is "buy"
Wall Street's median 12-month price target for First Merchants Corp is $48.00, about 9% above its July 21 closing price of $44.03
The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 9 three months ago

    

    Reuters Recommended Reads
  
July 21 - Webster Financial Q2 revenue beats estimates on loan, deposit growth
July 21 - First Financial Bancorp Q2 adjusted EPS hits record on loan growth
July 21 - KeyCorp quarterly profit rises on interest income strength

    
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)