Housing Sector – Page 2

MIL-OSI: Hanover Bancorp, Inc. Reports Second Quarter 2025 Results Highlighted by Strong Demand Deposit Growth, Continued Margin Expansion and Its Inclusion in the Russell 2000 Index

Source: GlobeNewswire (MIL-OSI)

Second Quarter Performance Highlights

Net Income: Net income for the quarter ended June 30, 2025 totaled $2.4 million or $0.33 per diluted share (including Series A preferred shares).
Pre-Provision Net Revenue: Pre-provision net revenue was $5.7 million resulting in a return on average assets of 1.04% for the quarter ended June 30, 2025 which was the highest level since the first quarter of 2023.
Net Interest Income: Net interest income was $14.8 million for the quarter ended June 30, 2025, an increase of $0.2 million, or 1.13% from the quarter ended March 31, 2025 and $1.5 million, or 11.69%, from the quarter ended June 30, 2024.
Net Interest Margin Expansion: The Company’s net interest margin during the quarter ended June 30, 2025 increased to 2.76% from 2.68% in the quarter ended March 31, 2025 and 2.46% in the quarter ended June 30, 2024.
Demand Deposit Growth: Demand deposits increased $28.1 million, or 13.03%, from March 31, 2025 and $32.0 million, or 15.12%, from December 31, 2024, underscoring the success of our C&I and Municipal banking verticals.
Strong Liquidity Position: At June 30, 2025, undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $686.5 million, or approximately 274% of uninsured deposit balances. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 87% of total deposits at June 30, 2025.
Loan Diversification Strategy: The Company continues to actively manage its Multi-Family and Commercial Real Estate portfolios which resulted in a reduction in the commercial real estate concentration ratio to 368% of capital at June 30, 2025 from 385% at December 31, 2024 and 403% at June 30, 2024. The Company continues to focus loan growth primarily in residential loan products originated for sale to specific buyers in the secondary market, C&I and SBA loans. The Company will selectively explore Commercial Real Estate opportunities with an emphasis on relationship based Commercial Real Estate lending.
Asset Quality: At June 30, 2025, the Bank’s asset quality metrics remained solid with non-performing loans totaling $12.7 million, representing 0.64% of the total loan portfolio, and the allowance for credit losses equaling 1.10% of total loans, a decrease from non-performing loans totaling $16.4 million, representing 0.82% of the total loan portfolio, as of December 31, 2024.
Port Jefferson Branch: In June 2025, the Company continued its strategic expansion in Suffolk County Long Island with the opening of its tenth branch in Port Jefferson, New York. The Company will continue to be opportunistic in furthering its expansion into the underserved markets of Eastern Long Island.
Inclusion in Russell 2000: The Company was added to the Russell 2000 Index in late June 2025. The Russell 2000 Index encompasses the 2,000 largest U.S.-traded stocks by objective, market-capitalization rankings, and style attributes. The Russell Indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies.
Quarterly Cash Dividend: The Company’s Board of Directors approved a $0.10 per share cash dividend on both common and Series A preferred shares payable on August 13, 2025 to stockholders of record on August 6, 2025.

MINEOLA, N.Y., July 23, 2025 (GLOBE NEWSWIRE) — Hanover Bancorp, Inc. (“Hanover” or “the Company” – NASDAQ: HNVR), the holding company for Hanover Community Bank (“the Bank”), today reported results for the quarter ended June 30, 2025 and the declaration of a $0.10 per share cash dividend on both common and Series A preferred shares payable on August 13, 2025 to stockholders of record on August 6, 2025.

Earnings Summary for the Quarter Ended June 30, 2025

The Company reported net income for the quarter ended June 30, 2025 of $2.4 million or $0.33 per diluted share (including Series A preferred shares), versus $0.8 million (after giving effect to an allowance for credit loss (“ACL”) on an individually evaluated loan of $2.5 million and a $1.1 million provision resulting from ongoing enhancements to the current expected credit loss (“CECL”) model) or $0.11 per diluted share (including Series A preferred shares) in the quarter ended June 30, 2024. Returns on average assets, average stockholders’ equity and average tangible equity were 0.44%, 4.93% and 5.46%, respectively, for the quarter ended June 30, 2025, versus 0.15%, 1.77% and 1.97%, respectively, for the comparable quarter of 2024.

The increase in net income recorded in the second quarter of 2025 from the comparable 2024 quarter resulted from an increase in net interest income and a decrease in provision for credit losses. These were partially offset by the increase in non-interest expenses, particularly compensation and benefits, and an increase in income tax expense. The increase in compensation and benefits expense in the second quarter of 2025 versus the comparable 2024 quarter was primarily related to the staffing of the newly opened Port Jefferson branch and additions to the C&I Banking teams, partially offset by lower incentive compensation expense resulting from reduced lending activity and other expense reduction initiatives. The Company’s effective tax rate was 27.8% in the second quarter of 2025 and 27.2% in the comparable 2024 quarter. We expect a normalized run rate of 25.0% for the remainder of the year.

Net interest income was $14.8 million for the quarter ended June 30, 2025, an increase of $1.5 million, or 11.69% from the comparable 2024 quarter. This increase was due to improvement of the Company’s net interest margin to 2.76% in the 2025 quarter from 2.46% in the comparable 2024 quarter. The cost of interest-bearing liabilities decreased to 3.94% in the 2025 quarter from 4.48% in the comparable 2024 quarter, a decrease of 54 basis points. This decrease was partially offset by a 24 basis point decrease in the yield on interest earning assets to 5.98% in the 2025 quarter from 6.22% in the second quarter of 2024. Net interest income on a linked quarter basis increased $0.2 million or 1.13%, due to an 8 basis point increase in net interest margin resulting from a 7 basis point decrease in cost of interest-bearing liabilities, partially offset by a 3 basis point decrease on yield on interest earning assets.

Earnings Summary for the Six Months Ended June 30, 2025

For the six months ended June 30, 2025, the Company reported net income of $4.0 million or $0.53 per diluted share (including Series A preferred shares), versus $4.9 million or $0.66 per diluted share (including Series A preferred shares) in the comparable 2024 six-month period. The Company recorded adjusted (non-GAAP) net income (excluding core system conversion expenses of $2.6 million, net of tax) of $6.5 million or $0.87 per diluted share in the six months ended June 30, 2025, versus net income of $4.9 million or $0.66 per diluted share in the comparable 2024 six-month period (which included no adjustments). Returns on average assets, average stockholders’ equity and average tangible equity were 0.36%, 4.02% and 4.46%, respectively, for the six months ended June 30, 2025, versus 0.44%, 5.20% and 5.80%, respectively, for the comparable 2024 period. Adjusted (non-GAAP) returns, exclusive of core system conversion expenses on average assets, average stockholders’ equity and average tangible equity were 0.59%, 6.63% and 7.35%, respectively, in the six months ended June 30, 2025, versus 0.44%, 5.20% and 5.80%, respectively, in the comparable of 2024 period.

The decrease in net income recorded for the six months ended June 30, 2025 from the comparable 2024 period is due to an increase in non-interest expenses, particularly compensation and benefits and the one-time core system conversion expenses. These were partially offset by an increase in net interest income and a decrease in provision for credit losses. The increase in compensation and benefits expense for the six months ended June 30, 2025 versus the comparable 2024 period was primarily related to additional headcount to staff the new Port Jefferson branch and expansion of the C&I lending vertical and lower deferred loan origination costs partially offset by lower incentive compensation expense resulting from reduced lending activity. The Company’s effective tax rate decreased to 23.0% for the six months ended June 30, 2025 from 25.3% in the comparable 2024 period.

Net interest income was $29.4 million for the six months ended June 30, 2025, an increase of $3.2 million, or 12.38% from the comparable 2024 period, due to the improvement of the Company’s net interest margin to 2.72% in the 2025 period from 2.43% in the comparable 2024 period. The cost of interest-bearing liabilities decreased to 3.98% in the 2025 six months period from 4.41% in the comparable 2024 period, a decrease of 43 basis points. This decrease was partially offset by a 13 basis point decrease in the yield on interest earning assets to 5.99% in the 2025 period from 6.12% in the comparable 2024 period. The increase in the net interest margin was a result of the late 2024 reductions in the Fed Funds effective rate and the liability sensitive nature of the Bank’s balance sheet.

Michael P. Puorro, Chairman and Chief Executive Officer, commented on the Company’s quarterly results: “Our second quarter performance, reflects a number of high notes, including increased Pre-Provision Net Revenue of $5.7 million, strong non-interest bearing deposit growth of $28.1 million, underscoring the success of our C&I and Municipal banking verticals, and continued improvement in our Net Interest Margin. We are extremely pleased with the recent opening of our Port Jefferson branch and will continue to be opportunistic in furthering our expansion into the underserved markets of Eastern Long Island. With our inclusion in the Russell 2000, the continued development of our diversified revenue verticals and liability sensitive balance sheet, we look forward to delivering continued shareholder value and the eventual benefits of a more favorable interest rate environment.”

Balance Sheet Highlights

Total assets were $2.31 billion at June 30, 2025 and December 31, 2024. Total securities available for sale at June 30, 2025 were $102.6 million, an increase of $18.9 million from December 31, 2024, primarily driven by growth in collateralized mortgage obligations, collateralized loan obligations and corporate bonds.

Total deposits were $1.95 billion at June 30, 2025 and December 31, 2024. Total deposits increased $9.4 million or 0.48% from June 30, 2024. Demand deposits increased $43.8 million or 21.93% from June 30, 2024 and $32.0 million, or 15.12%, from December 31, 2024 underscoring the success of our C&I and Municipal banking verticals. Our loan to deposit ratio improved to 101% at June 30, 2025 from 102% at December 31, 2024.

The Company had $517.4 million in total municipal deposits at June 30, 2025, at a weighted average rate of 3.67% versus $509.3 million at a weighted average rate of 3.72% at December 31, 2024 and $452.6 million at a weighted average rate of 4.61% at June 30, 2024. The Company’s municipal deposit program is built on long-standing relationships developed in the local marketplace. This core deposit business will continue to provide a stable source of funding for the Company’s lending products at costs lower than those of consumer deposits and market-based borrowings. The Company continues to broaden its municipal deposit base and currently services 40 customer relationships.

Total borrowings at June 30, 2025 were $107.8 million, with a weighted average rate and term of 4.11% and 17 months, respectively. At June 30, 2025 and December 31, 2024, the Company had $107.8 million of term FHLB advances outstanding. The Company had no FHLB overnight borrowings outstanding at June 30, 2025 and December 31, 2024. The Company had no borrowings outstanding under lines of credit with correspondent banks at June 30, 2025 and December 31, 2024.

Stockholders’ equity was $198.9 million at June 30, 2025 and compared to $196.6 million at December 31, 2024. Retained earnings increased by $2.5 million due primarily to net income of $4.0 million for the six months ended June 30, 2025, which was offset by $1.5 million of dividends declared. The accumulated other comprehensive loss at June 30, 2025 was 0.62% of total equity and was comprised of a $0.7 million after tax net unrealized loss on the investment portfolio and a $0.5 million after tax net unrealized loss on derivatives. Tangible book value per share (including Series A preferred shares) was $23.94 at June 30, 2025 compared to $23.86 at December 31, 2024.

Loan Portfolio

For the six months ended June 30, 2025, the Bank’s loan portfolio decreased $19.1 million to $1.97 billion from December 31, 2024. The decrease resulted primarily from the ongoing management of our commercial real estate and multifamily loan concentrations. On a linked quarter basis, net loans increased $5.8 million. At June 30, 2025, the Company’s residential loan portfolio (including home equity) amounted to $738.8 million, with an average loan balance of $489 thousand and a weighted average loan-to-value ratio of 57%. Commercial real estate (including construction) and multifamily loans totaled $1.08 billion at June 30, 2025, with an average loan balance of $1.5 million and a weighted average loan-to-value ratio of 59%. As will be discussed below, approximately 36% of the multifamily portfolio is subject to rent regulation. The Company’s commercial real estate concentration ratio continues to improve, decreasing to 368% of capital at June 30, 2025 from 385% at December 31, 2024 and 403% at June 30, 2024, with loans secured by office space accounting for 2.48% of the total loan portfolio and totaling $48.9 million at June 30, 2025. The Company’s loan pipeline with executed term sheets at June 30, 2025 is approximately $190.2 million, with approximately 81% being niche-residential, conventional C&I, SBA and USDA lending opportunities.

The Bank remains focused on expanding its core verticals and continues to originate loans for its portfolio and for sale in the secondary market under its residential flow origination program. The Bank originated $62.2 million in residential loans in the quarter ended June 30, 2025. During the quarters ended June 30, 2025 and 2024, the Company sold $23.7 million and $2.9 million, respectively, of residential loans under its flow origination program and recorded gains on sale of loans held-for-sale of $0.5 million and $0.1 million, respectively.

During the quarters ended June 30, 2025 and 2024, the Company sold approximately $22.3 million and $28.0 million, respectively, in government guaranteed SBA loans and recorded gains on sale of loans held-for-sale of $1.8 million and $2.5 million, respectively. SBA loan originations and gains on sale were lower than expected due to a confluence of factors. One factor is the impact of the “higher-for-longer” interest rate environment that we believe has both worsened the financial condition of and reduced demand among small business borrowers, resulting in a lower volume of creditworthy customers. Another factor is the negative impact of and uncertainty created by tariffs, which we believe have also dampened loan demand among borrowers in certain industries. A third factor is the Bank’s decision to tighten credit over the course of the last year. Although management continues to believe this to be a prudent measure, it has nonetheless resulted in a lower volume of loan approvals, causing the Bank to re-evaluate the number and caliber of its business development officers. Taken together these and other factors have adversely impacted SBA loan originations and closings. With the addition of additional business development officers in the second half of 2025, we anticipate higher volumes of eligible loans as we transition into 2026. The Bank concluded the second quarter of 2025 with C&I loan originations of approximately $29.3 million. Based on its existing pipeline, the Bank expects C&I lending and deposit activity to grow as the year progresses.

Commercial Real Estate Statistics

A significant portion of the Bank’s commercial real estate portfolio consists of loans secured by Multi-Family and CRE-Investor owned real estate that are predominantly subject to fixed interest rates for an initial period of 5 years. The Bank’s exposure to Land/Construction loans is minor at $8.2 million, all at floating interest rates. As shown below, 31% of the loan balances in these combined portfolios will either have a rate reset or mature in 2025 and 2026, with another 57% with rate resets or maturing in 2027.

Multi-Family Market Rent Portfolio Fixed Rate Reset/Maturity Schedule										Multi-Family Stabilized Rent Portfolio Fixed Rate Reset/Maturity Schedule
Calendar Period	# Loans		Total O/S ($000’s omitted)		Avg O/S ($000’s omitted)		Avg Interest Rate			Calendar Period	# Loans		Total O/S ($000’s omitted)		Avg O/S ($000’s omitted)		Avg Interest Rate

2025		7	$	8,609	$	1,230		5.29	%	2025		8	$	14,950	$	1,869		4.54	%
2026		36		117,249		3,257		3.66	%	2026		20		42,310		2,115		3.67	%
2027		70		185,157		2,645		4.41	%	2027		51		122,901		2,410		4.22	%
2028		16		21,310		1,332		6.20	%	2028		12		10,117		843		7.14	%
2029		6		4,924		821		7.70	%	2029		4		4,313		1,078		6.38	%
2030+		3		6,667		2,222		3.68	%	2030+		4		1,099		275		6.04	%
Fixed Rate		138		343,916		2,492		4.32	%	Fixed Rate		99		195,690		1,977		4.34	%
Floating Rate		2		347		174		9.50	%	Floating Rate		—		—		—		—	%
Total		140	$	344,263	$	2,459		4.33	%	Total		99	$	195,690	$	1,977		4.34	%

CRE Investor Portfolio Fixed Rate Reset/Maturity Schedule
Calendar Period	# Loans		Total O/S ($000’s omitted)		Avg O/S ($000’s omitted)		Avg Interest Rate

2025		25	$	33,503	$	1,340		7.28	%
2026		30		35,702		1,190		4.90	%
2027		89		156,924		1,763		4.86	%
2028		28		30,868		1,102		6.65	%
2029		4		2,336		584		7.04	%
2030+		15		8,999		600		6.46	%
Fixed Rate		191		268,332		1,405		5.45	%
Floating Rate		6		11,905		1,984		9.50	%
Total CRE-Inv.		197	$	280,237	$	1,423		5.62	%

Stabilized Multi-Family Pro Forma Stress Results

The table below reflects a proforma stressed evaluation of the Bank’s Multifamily stabilized loan portfolio, using the primary assumption for a revised Debt Service Coverage Ratio (“DSCR”) calculation, for all loans where the current interest rate is below 6%. The current balance for these loans is recast at 6% with a 30-year amortization. The chart below reflects the impact of these adjustments on the portfolio. The projected loan to value (“LTV”) assumption resets all loans using a 6% cap rate and the last reported property net operating income (“NOI”) to determine an implied property valuation and based on the current loan balance the resultant LTV.

Multi-Family Stabilized Rent Portfolio
DSCR Range	# Loans	Total O/S ($000’s omitted)		% of Total MF Portfolio		Current Weighted Average LTV		Projected Weighted Average LTV

< 1.0	10	$	18,153	3	%	61	%	95	%
1.0 < x < 1.2	24		69,751	13	%	65	%	74	%
1.2 < x < 1.3	20		34,897	6	%	62	%	67	%
1.3 < x < 1.5	15		38,547	7	%	63	%	61	%
1.5 < x < 2.0	18		25,805	5	%	58	%	53	%
x > 2.0	12		8,537	2	%	43	%	33	%
Total	99	$	195,690	36	%	62	%	67	%

As reflected above, the results show approximately 3%, or 10 loans totaling $18 million of the total multi-family portfolio would have proforma DSCR’s less than 1x while maintaining projected weighted average LTV’s under 100%. Additionally, approximately 97% or 89 loans totaling $178 million would possess DSCR’s greater than 1x while maintaining a projected weighted average LTV well within our policy guidelines. We believe the overall demand for multifamily housing in our market will allow our borrowers to address any adverse impact proactively, as evidenced by the maturities and rate resets in the previous 12 months which have been successfully refinanced with other institutions at market rates similar to those used in the above analysis.

Rental breakdown of Multi-Family portfolio

The table below segments our portfolio of loans secured by Multi-Family properties based on rental terms and location. As shown below, 64% of the combined portfolio is secured by properties subject to free market rental terms, which is the dominant tenant type. Both the Market Rent and Stabilized Rent segments of our portfolio present very similar average borrower profiles. The portfolio is primarily located in the New York City boroughs of Brooklyn, the Bronx and Queens.

Multi-Family Loan Portfolio – Loans by Rent Type
Rent Type	# of Notes		Outstanding Loan Balance		% of Total Multi-Family			Avg Loan Size		LTV			Current DSCR		Avg # of Units
			($000’s omitted)					($000’s omitted)

Market		140	$	344,263		64	%	$	2,459		61.8	%		1.41		11
Location
Manhattan		7	$	10,251		2	%	$	1,464		49.4	%		1.88		14
Other NYC		92	$	254,515		47	%	$	2,766		61.7	%		1.40		10
Outside NYC		41	$	79,497		15	%	$	1,939		63.9	%		1.36		14

Stabilized		99	$	195,690		36	%	$	1,977		61.8	%		1.44		12
Location
Manhattan		7	$	10,459		2	%	$	1,494		48.2	%		1.71		19
Other NYC		81	$	168,044		31	%	$	2,075		62.6	%		1.42		11
Outside NYC		11	$	17,187		3	%	$	1,562		63.1	%		1.54		14

Office Property Exposure

The Bank’s exposure to the Office market is minor. Loans secured by office space accounted for 2.48% of the total loan portfolio with a total balance of $48.9 million, of which less than 1% is located in Manhattan. The pool has a 2.48x weighted average DSCR, a 53% weighted average LTV and less than $350,000 of exposure in Manhattan.

Asset Quality and Allowance for Credit Losses

The Bank’s asset quality metrics remain solid. At June 30, 2025, the Bank reported $12.7 million in non-performing loans compared to $16.4 million at December 31, 2024, a decrease of $3.7 million. This decrease resulted primarily from the proactive sale of non-performing loans, satisfactions and the charge-off of a specific reserve established in June 2024 on an individually evaluated commercial loan. At June 30, 2025 non-performing loans were 0.64% of total loans outstanding versus 0.82% at December 31, 2024.

During the second quarter of 2025, the Bank recorded a provision for credit losses expense of $2.4 million (including $187 thousand provision for credit losses on unfunded commitments). Net charge-offs of $3.5 million were incurred during the quarter, of which $2.5 million is attributable to the aforementioned charge-off of a specific reserve on an individually evaluated commercial loan. The June 30, 2025 allowance for credit losses was $21.6 million versus $22.8 million at December 31, 2024. The allowance for credit losses as a percentage of total loans was 1.10% at June 30, 2025 and 1.15% at December 31, 2024.

Net Interest Margin

The Bank’s net interest margin increased to 2.76% for the quarter ended June 30, 2025 compared to 2.68% in the quarter ended March 31, 2025 and 2.46% in the quarter ended June 30, 2024 due to the continuing effects of the late 2024 reductions in the Federal Funds effective rate and the liability sensitive nature of the Bank’s balance sheet.

About Hanover Community Bank and Hanover Bancorp, Inc.

Hanover Bancorp, Inc. (NASDAQ: HNVR), is the bank holding company for Hanover Community Bank, a community commercial bank focusing on highly personalized and efficient services and products responsive to client needs. Management and the Board of Directors are comprised of a select group of successful local businesspeople who are committed to the success of the Bank by knowing and understanding the metro-New York area’s financial needs and opportunities. Backed by state-of-the-art technology, Hanover offers a full range of financial services. Hanover offers a complete suite of consumer, commercial, and municipal banking products and services, including multi-family and commercial mortgages, residential loans, business loans and lines of credit. Hanover also offers its customers access to 24-hour ATM service with no fees attached, free checking with interest, telephone banking, advanced technologies in mobile and internet banking for our consumer and business customers, safe deposit boxes and much more. The Company’s corporate administrative office is located in Mineola, New York where it also operates a full-service branch office along with additional branch locations in Garden City Park, Hauppauge, Port Jefferson, Forest Hills, Flushing, Sunset Park, Rockefeller Center and Chinatown, New York, and Freehold, New Jersey.

Hanover Community Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For further information, call (516) 548-8500 or visit the Bank’s website at www.hanoverbank.com.

Non-GAAP Disclosure

This discussion, including the financial statements attached thereto, includes non-GAAP financial measures which include the Company’s adjusted net income, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, tangible common equity (“TCE”) ratio, TCE, tangible assets, tangible book value per share, return on average tangible equity and efficiency ratio. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes that the presentation of non-GAAP financial measures provides both management and investors with a greater understanding of the Company’s operating results and trends in addition to the results measured in accordance with GAAP, and provides greater comparability across time periods. While management uses non-GAAP financial measures in its analysis of the Company’s performance, this information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by other financial institutions.

With respect to the calculations of and reconciliations of adjusted net income, TCE, tangible assets, TCE ratio and tangible book value per share, reconciliations to the most comparable U.S. GAAP measures are provided in the tables that follow.

Forward-Looking Statements

This release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Hanover Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Hanover Bancorp, Inc. may turn out to be incorrect. They can be affected by inaccurate assumptions that Hanover Bancorp, Inc. might make or by known or unknown risks and uncertainties, including those discussed in our Annual Report on Form 10-K under Item 1A – Risk Factors, as updated by our subsequent filings with the Securities and Exchange Commission. Further, the adverse effect of health emergencies or natural disasters on the Company, its customers, and the communities where it operates may adversely affect the Company’s business, results of operations and financial condition for an indefinite period of time. Consequently, no forward-looking statement can be guaranteed. Hanover Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.

Investor and Press Contact:
Lance P. Burke
Chief Financial Officer
(516) 548-8500


HANOVER BANCORP, INC.
STATEMENTS OF CONDITION (unaudited)
(dollars in thousands)

		June 30,		March 31,		December 31,
		2025		2025		2024
Assets
Cash and cash equivalents		$	164,535	$	160,234	$	162,857
Securities-available for sale, at fair value			102,636		93,197		83,755
Investments-held to maturity			3,594		3,671		3,758
Loans held for sale			10,593		16,306		12,404

Loans, net of deferred loan fees and costs			1,966,452		1,960,674		1,985,524
Less: allowance for credit losses			-21,571		-22,925		-22,779
Loans, net			1,944,881		1,937,749		1,962,745

Goodwill			19,168		19,168		19,168
Premises & fixed assets			14,388		14,511		15,337
Operating lease assets			10,890		8,484		8,337
Other assets			41,291		38,207		43,749
	Assets	$	2,311,976	$	2,291,527	$	2,312,110

Liabilities and stockholders’ equity
Core deposits		$	1,439,656	$	1,418,209	$	1,456,513
Time deposits			511,625		518,229		497,770
Total deposits			1,951,281		1,936,438		1,954,283

Borrowings			107,805		107,805		107,805
Subordinated debentures			24,716		24,702		24,689
Operating lease liabilities			11,565		9,144		9,025
Other liabilities			17,724		16,795		19,670
	Liabilities		2,113,091		2,094,884		2,115,472

Stockholders’ equity			198,885		196,643		196,638
	Liabilities and stockholders’ equity	$	2,311,976	$	2,291,527	$	2,312,110

HANOVER BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except per share data)

		Three Months Ended				Six Months Ended
		6/30/2025		6/30/2024		6/30/2025		6/30/2024

Interest income		$	32,049	$	33,420	$	64,886	$	65,852
Interest expense			17,254		20,173		35,462		39,670
	Net interest income		14,795		13,247		29,424		26,182
Provision for credit losses			2,357		4,040		2,957		4,340
	Net interest income after provision for credit losses		12,438		9,207		26,467		21,842

Loan servicing and fee income			1,083		836		2,164		1,749
Service charges on deposit accounts			162		114		279		210
Gain on sale of loans held-for-sale			2,298		2,586		4,650		5,092
Gain on sale of investments			–		4		–		4
Other operating income			18		82		200		143
	Non-interest income		3,561		3,622		7,293		7,198

Compensation and benefits			7,003		6,499		14,235		12,061
Conversion expenses			–		–		3,180		–
Occupancy and equipment			1,910		1,843		3,746		3,613
Data processing			508		495		1,101		1,013
Professional fees			878		717		1,665		1,535
Federal deposit insurance premiums			365		365		702		683
Other operating expenses			1,952		1,751		3,983		3,569
	Non-interest expense		12,616		11,670		28,612		22,474

	Income before income taxes		3,383		1,159		5,148		6,566
Income tax expense			940		315		1,184		1,661

	Net income	$	2,443	$	844	$	3,964	$	4,905

Earnings per share (“EPS”):⁽¹⁾
Basic		$	0.33	$	0.11	$	0.53	$	0.66
Diluted		$	0.33	$	0.11	$	0.53	$	0.66

Average shares outstanding for basic EPS ⁽¹⁾⁽²⁾			7,500,871		7,399,816		7,482,307		7,388,021
Average shares outstanding for diluted EPS ⁽¹⁾⁽²⁾			7,506,584		7,449,110		7,488,226		7,438,234

⁽¹⁾ Calculation includes common stock and Series A preferred stock.
⁽²⁾ Average shares outstanding before subtracting participating securities.

HANOVER BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
QUARTERLY TREND
(dollars in thousands, except per share data)

		Three Months Ended
		6/30/2025		3/31/2025		12/31/2024		9/30/2024		6/30/2024

Interest income		$	32,049	$	32,837	$	33,057	$	34,113	$	33,420
Interest expense			17,254		18,208		19,249		21,011		20,173
	Net interest income		14,795		14,629		13,808		13,102		13,247
Provision for credit losses			2,357		600		400		200		4,040
	Net interest income after provision for credit losses		12,438		14,029		13,408		12,902		9,207

Loan servicing and fee income			1,083		1,081		981		960		836
Service charges on deposit accounts			162		117		136		123		114
Gain on sale of loans held-for-sale			2,298		2,352		3,014		2,834		2,586
Gain on sale of investments			–		–		27		–		4
Other operating income			18		182		29		37		82
	Non-interest income		3,561		3,732		4,187		3,954		3,622

Compensation and benefits			7,003		7,232		6,699		6,840		6,499
Conversion expenses			–		3,180		–		–		–
Occupancy and equipment			1,910		1,836		1,810		1,799		1,843
Data processing			508		593		536		547		495
Professional fees			878		787		782		762		717
Federal deposit insurance premiums			365		337		375		360		365
Other operating expenses			1,952		2,031		2,198		1,930		1,751
	Non-interest expense		12,616		15,996		12,400		12,238		11,670

	Income before income taxes		3,383		1,765		5,195		4,618		1,159
Income tax expense			940		244		1,293		1,079		315

	Net income	$	2,443	$	1,521	$	3,902	$	3,539	$	844

Earnings per share (“EPS”):⁽¹⁾
Basic		$	0.33	$	0.20	$	0.53	$	0.48	$	0.11
Diluted		$	0.33	$	0.20	$	0.52	$	0.48	$	0.11

Average shares outstanding for basic EPS ⁽¹⁾⁽²⁾			7,500,871		7,463,537		7,427,583		7,411,064		7,399,816
Average shares outstanding for diluted EPS ⁽¹⁾⁽²⁾			7,506,584		7,469,489		7,456,471		7,436,068		7,449,110

⁽¹⁾ Calculation includes common stock and Series A preferred stock.
⁽²⁾ Average shares outstanding before subtracting participating securities.

HANOVER BANCORP, INC.
CONSOLIDATED NON-GAAP FINANCIAL INFORMATION ⁽¹⁾(unaudited)
(dollars in thousands, except per share data)

	Three Months Ended						Six Months Ended
	6/30/2025			6/30/2024			6/30/2025			6/30/2024

ADJUSTED NET INCOME:
Net income, as reported	$	2,443		$	844		$	3,964		$	4,905
Adjustments:
Conversion expenses		–			–			3,180			–
Total adjustments, before income taxes		–			–			3,180			–
Adjustment for reported effective income tax rate		–			–			608			–
Total adjustments, after income taxes		–			–			2,572			–
Adjusted net income	$	2,443		$	844		$	6,536		$	4,905
Basic earnings per share – adjusted	$	0.33		$	0.11		$	0.87		$	0.66
Diluted earnings per share – adjusted	$	0.33		$	0.11		$	0.87		$	0.66

ADJUSTED OPERATING EFFICIENCY RATIO:
Operating efficiency ratio, as reported		68.73	%		69.18	%		77.93	%		67.33	%
Adjustments:
Conversion expenses		0.00	%		0.00	%		-8.66	%		0.00	%
Adjusted operating efficiency ratio		68.73	%		69.18	%		69.27	%		67.33	%

ADJUSTED RETURN ON AVERAGE ASSETS		0.44	%		0.15	%		0.59	%		0.44	%
ADJUSTED RETURN ON AVERAGE EQUITY		4.93	%		1.77	%		6.63	%		5.20	%
ADJUSTED RETURN ON AVERAGE TANGIBLE EQUITY		5.46	%		1.97	%		7.35	%		5.80	%

⁽¹⁾ A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. GAAP. While management uses non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP.

Note: Prior period information has been adjusted to conform to current period presentation.

HANOVER BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
(dollars in thousands)

	Three Months Ended						Six Months Ended
	6/30/2025			6/30/2024			6/30/2025			6/30/2024
Profitability:
Return on average assets		0.44	%		0.15	%		0.36	%		0.44	%
Return on average equity ⁽¹⁾		4.93	%		1.77	%		4.02	%		5.20	%
Return on average tangible equity ⁽¹⁾		5.46	%		1.97	%		4.46	%		5.80	%
Pre-provision net revenue return on assets		1.04	%		0.94	%		0.73	%		0.99	%
Yield on average interest-earning assets		5.98	%		6.22	%		5.99	%		6.12	%
Cost of average interest-bearing liabilities		3.94	%		4.48	%		3.98	%		4.41	%
Net interest rate spread ⁽²⁾		2.04	%		1.74	%		2.01	%		1.71	%
Net interest margin ⁽³⁾		2.76	%		2.46	%		2.72	%		2.43	%
Non-interest expense to average assets		2.29	%		2.11	%		2.57	%		2.03	%
Operating efficiency ratio ⁽⁴⁾		68.73	%		69.18	%		77.93	%		67.33	%

Average balances:
Interest-earning assets	$	2,148,782		$	2,162,250		$	2,182,757		$	2,162,543
Interest-bearing liabilities		1,756,316			1,809,991			1,798,958			1,810,195
Loans		1,978,535			2,014,820			1,984,135			1,999,448
Deposits		1,838,947			1,773,205			1,878,969			1,807,924
Borrowings		142,733			231,473			138,224			196,950

⁽¹⁾ Includes common stock and Series A preferred stock.
⁽²⁾ Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
⁽³⁾ Represents net interest income divided by average interest-earning assets.
⁽⁴⁾ Represents non-interest expense divided by the sum of net interest income and non-interest income.

Note: Prior period information has been adjusted to conform to current period presentation.

HANOVER BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
(dollars in thousands, except share and per share data)

	At or For the Three Months Ended
	6/30/2025			3/31/2025			12/31/2024			9/30/2024
Asset quality:
Provision for credit losses – loans ⁽¹⁾	$	2,170		$	600		$	400		$	200
Net (charge-offs)/recoveries		(3,524	)		(454	)		(1,027	)		(438	)
Allowance for credit losses		21,571			22,925			22,779			23,406
Allowance for credit losses to total loans ⁽²⁾		1.10	%		1.17	%		1.15	%		1.17	%
Non-performing loans	$	12,651		$	11,697		$	16,368		$	15,365
Non-performing loans/total loans		0.64	%		0.60	%		0.82	%		0.77	%
Non-performing loans/total assets		0.55	%		0.51	%		0.71	%		0.66	%
Allowance for credit losses/non-performing loans		170.51	%		195.99	%		139.17	%		152.33	%

Capital (Bank only):
Tier 1 Capital	$	203,322		$	201,925		$	201,744		$	198,196
Tier 1 leverage ratio		9.29	%		8.95	%		9.13	%		8.85	%
Common equity tier 1 capital ratio		13.16	%		13.37	%		13.32	%		12.99	%
Tier 1 risk based capital ratio		13.16	%		13.37	%		13.32	%		12.99	%
Total risk based capital ratio		14.41	%		14.62	%		14.58	%		14.24	%

Equity data:
Shares outstanding ⁽³⁾		7,499,243			7,503,731			7,427,127			7,428,366
Stockholders’ equity	$	198,885		$	196,643		$	196,638		$	192,339
Book value per share ⁽³⁾		26.52			26.21			26.48			25.89
Tangible common equity ⁽³⁾		179,495			177,239			177,220			172,906
Tangible book value per share ⁽³⁾		23.94			23.62			23.86			23.28
Tangible common equity (“TCE”) ratio ⁽³⁾		7.83	%		7.80	%		7.73	%		7.49	%

(1) Excludes $187 thousand, $0, $0 and $0 provision for credit losses on unfunded commitments for the quarters ended 6/30/25, 3/31/25, 12/31/24 and 9/30/24, respectively.
(2) Calculation excludes loans held for sale.
(3) Includes common stock and Series A preferred stock.

HANOVER BANCORP, INC.
STATISTICAL SUMMARY
QUARTERLY TREND
(unaudited, dollars in thousands, except share data)

	6/30/2025			3/31/2025			12/31/2024			9/30/2024

Loan distribution ⁽¹⁾:
Residential mortgages	$	715,418		$	708,649		$	702,832		$	719,037
Multifamily		539,573			535,429			550,570			557,634
Commercial real estate – OO		267,223			264,855			261,223			246,458
Commercial real estate – NOO		271,552			280,345			298,517			305,536
Commercial & industrial		148,907			146,050			145,457			149,853
Home equity		23,361			24,914			26,422			26,825
Consumer		418			432			503			470

Total loans	$	1,966,452		$	1,960,674		$	1,985,524		$	2,005,813

Sequential quarter growth rate		0.29	%		-1.25	%		-1.01	%		-0.35	%

CRE concentration ratio		368	%		369	%		385	%		397	%

Loans sold during the quarter	$	46,045		$	46,649		$	53,499		$	43,537

Funding distribution:
Demand	$	243,664		$	215,569		$	211,656		$	206,327
N.O.W.		655,333			698,297			692,890			621,880
Savings		42,860			46,275			48,885			53,024
Money market		497,799			458,068			503,082			572,213
Total core deposits		1,439,656			1,418,209			1,456,513			1,453,444
Time		511,625			518,229			497,770			504,100
Total deposits		1,951,281			1,936,438			1,954,283			1,957,544
Borrowings		107,805			107,805			107,805			125,805
Subordinated debentures		24,716			24,702			24,689			24,675

Total funding sources	$	2,083,802		$	2,068,945		$	2,086,777		$	2,108,024

Sequential quarter growth rate – total deposits		0.77	%		-0.91	%		-0.17	%		0.80	%

Period-end core deposits/total deposits ratio		73.78	%		73.24	%		74.53	%		74.25	%

Period-end demand deposits/total deposits ratio		12.49	%		11.13	%		10.83	%		10.54	%

⁽¹⁾ Excluding loans held for sale

Note: Prior period information has been adjusted to conform to current period presentation.

HANOVER BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ⁽¹⁾(unaudited)
(dollars in thousands, except share and per share amounts)

	6/30/2025			3/31/2025			12/31/2024			9/30/2024			6/30/2024
Tangible common equity
Total equity ⁽²⁾	$	198,885		$	196,643		$	196,638		$	192,339		$	190,072
Less: goodwill		(19,168	)		(19,168	)		(19,168	)		(19,168	)		(19,168	)
Less: core deposit intangible		(222	)		(236	)		(250	)		(265	)		(279	)
Tangible common equity ⁽²⁾	$	179,495		$	177,239		$	177,220		$	172,906		$	170,625

Tangible common equity (“TCE”) ratio
Tangible common equity ⁽²⁾	$	179,495		$	177,239		$	177,220		$	172,906		$	170,625
Total assets		2,311,976			2,291,527			2,312,110			2,327,814			2,331,098
Less: goodwill		(19,168	)		(19,168	)		(19,168	)		(19,168	)		(19,168	)
Less: core deposit intangible		(222	)		(236	)		(250	)		(265	)		(279	)
Tangible assets	$	2,292,586		$	2,272,123		$	2,292,692		$	2,308,381		$	2,311,651
TCE ratio ⁽²⁾		7.83	%		7.80	%		7.73	%		7.49	%		7.38	%

Tangible book value per share
Tangible equity ⁽²⁾	$	179,495		$	177,239		$	177,220		$	172,906		$	170,625
Shares outstanding ⁽²⁾		7,499,243			7,503,731			7,427,127			7,428,366			7,402,163
Tangible book value per share ⁽²⁾	$	23.94		$	23.62		$	23.86		$	23.28		$	23.05

⁽¹⁾ A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. GAAP. While management uses non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP.

⁽²⁾ Includes common stock and Series A preferred stock.

HANOVER BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Three Months Ended June 30, 2025 and 2024
(unaudited, dollars in thousands)

	2025							2024
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost

Assets:
Interest-earning assets:
Loans	$	1,978,535	$	29,785		6.04	%	$	2,014,820	$	31,124		6.21	%
Investment securities		99,448		1,433		5.78	%		99,324		1,534		6.21	%
Interest-earning cash		62,760		695		4.44	%		36,633		497		5.46	%
FHLB stock and other investments		8,039		136		6.79	%		11,473		265		9.29	%
Total interest-earning assets		2,148,782		32,049		5.98	%		2,162,250		33,420		6.22	%
Non interest-earning assets:
Cash and due from banks		9,218							7,979
Other assets		50,164							51,106
Total assets	$	2,208,164						$	2,221,335

Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings, N.O.W. and money market deposits	$	1,126,495	$	10,649		3.79	%	$	1,117,029	$	12,667		4.56	%
Time deposits		487,088		5,058		4.17	%		461,489		4,910		4.28	%
Total savings and time deposits		1,613,583		15,707		3.90	%		1,578,518		17,577		4.48	%
Borrowings		118,026		1,221		4.15	%		206,820		2,270		4.41	%
Subordinated debentures		24,707		326		5.29	%		24,653		326		5.32	%
Total interest-bearing liabilities		1,756,316		17,254		3.94	%		1,809,991		20,173		4.48	%
Demand deposits		225,364							194,687
Other liabilities		27,615							25,039
Total liabilities		2,009,295							2,029,717
Stockholders’ equity		198,869							191,618
Total liabilities & stockholders’ equity	$	2,208,164						$	2,221,335
Net interest rate spread						2.04	%						1.74	%
Net interest income/margin			$	14,795		2.76	%			$	13,247		2.46	%

HANOVER BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Six Months Ended June 30, 2025 and 2024
(unaudited, dollars in thousands)

	2025							2024
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost

Assets:
Interest-earning assets:
Loans	$	1,984,135	$	59,769		6.07	%	$	1,999,448	$	60,861		6.12	%
Investment securities		92,681		2,619		5.70	%		97,085		2,991		6.20	%
Interest-earning cash		97,914		2,177		4.48	%		55,652		1,511		5.46	%
FHLB stock and other investments		8,027		321		8.06	%		10,358		489		9.49	%
Total interest-earning assets		2,182,757		64,886		5.99	%		2,162,543		65,852		6.12	%
Non interest-earning assets:
Cash and due from banks		9,360							7,962
Other assets		49,930							50,523
Total assets	$	2,242,047						$	2,221,028

Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings, N.O.W. and money market deposits	$	1,171,711	$	22,104		3.80	%	$	1,139,111	$	25,600		4.52	%
Time deposits		489,023		10,378		4.28	%		474,134		9,872		4.19	%
Total savings and time deposits		1,660,734		32,482		3.94	%		1,613,245		35,472		4.42	%
Borrowings		113,524		2,328		4.14	%		172,304		3,546		4.14	%
Subordinated debentures		24,700		652		5.32	%		24,646		652		5.32	%
Total interest-bearing liabilities		1,798,958		35,462		3.98	%		1,810,195		39,670		4.41	%
Demand deposits		218,235							194,679
Other liabilities		26,179							26,499
Total liabilities		2,043,372							2,031,373
Stockholders’ equity		198,675							189,655
Total liabilities & stockholders’ equity	$	2,242,047						$	2,221,028
Net interest rate spread						2.01	%						1.71	%
Net interest income/margin			$	29,424		2.72	%			$	26,182		2.43	%

The MIL Network –

July 24, 2025

MIL-OSI: First Merchants Corporation Announces Second Quarter 2025 Earnings Per Share

Source: GlobeNewswire (MIL-OSI)

MUNCIE, Ind., July 23, 2025 (GLOBE NEWSWIRE) — First Merchants Corporation (NASDAQ – FRME)

Second Quarter 2025 Highlights:

Net income available to common stockholders was $56.4 million and diluted earnings per common share totaled $0.98 in the second quarter of 2025, compared to $39.5 million and $0.68 in the second quarter of 2024, and $54.9 million and $0.94 in the first quarter of 2025.
Robust capital position with Common Equity Tier 1 Capital Ratio of 11.35%.
Repurchased 818,480 shares totaling $31.7 million year-to-date; Repurchased 582,486 shares totaling $22.1 million during the second quarter.
Total loans grew $297.6 million, or 9.1% annualized, on a linked quarter basis, and $653.6 million, or 5.2%, during the last twelve months.
Total deposits increased $335.6 million, or 9.3% annualized, on a linked quarter basis.
Nonperforming assets to total assets were 36 basis points compared to 47 basis points on a linked quarter basis.
The efficiency ratio totaled 53.99% for the quarter.

“Our strong balance sheet and earnings growth in the first half of the year underscore the strength and resilience of our business model,” said Mark Hardwick, Chief Executive Officer of First Merchants Bank. “With continued momentum in loan and deposit growth, expanding margins, disciplined expense management, and a robust capital position, we are well-positioned to deliver long-term value for our shareholders. We remain committed to supporting our clients and communities while navigating a dynamic economic environment with confidence and clarity.”

Second Quarter Financial Results:

First Merchants Corporation (the “Corporation) reported second quarter 2025 net income available to common stockholders of $56.4 million compared to $39.5 million during the same period in 2024. Diluted earnings per common share for the period totaled $0.98 per share compared to the second quarter of 2024 result of $0.68 per share.

Total assets equaled $18.6 billion as of quarter-end and loans totaled $13.3 billion. During the past twelve months, total loans grew by $653.6 million, or 5.2%. On a linked quarter basis, loans grew $297.6 million, or 9.1% with growth primarily in Commercial & Industrial loans.

Investments, totaling $3.4 billion, decreased $372.1 million, or 9.9%, during the last twelve months and decreased $46.2 million, or 5.4% annualized, on a linked quarter basis. The decline in the last twelve months reflected sales of available for sale securities in 2024 totaling $268.5 million.

Total deposits equaled $14.8 billion as of quarter-end and increased by $228.5 million, or 1.6%, over the past twelve months. Total deposits increased $335.6 million, or 9.3% annualized, on a linked quarter basis. The loan to deposit ratio of 90.1% at period end remained stable on a linked quarter basis.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $195.3 million as of quarter-end, or 1.47% of total loans. Net charge-offs totaled $2.3 million and provision for credit losses of $5.6 million was recorded during the quarter. Reserves for unfunded commitments totaling $18.0 million remain unchanged from the previous quarter. Non-performing assets to total assets were 0.36% for the second quarter of 2025, a decrease of 11 basis points compared to 0.47% in the linked quarter.

Net interest income, totaling $133.0 million for the quarter, increased $2.7 million, or 2.1%, compared to prior quarter and increased $4.4 million, or 3.5% compared to the second quarter of 2024. Fully taxable equivalent net interest margin was 3.25%, an increase of three basis points compared to the first quarter of 2025 and an increase of nine basis points compared to the second quarter of 2024. During the quarter, higher yields on earnings assets outpaced increased yields on interest bearing liabilities resulting in margin expansion.

Noninterest income totaled $31.3 million for the quarter, an increase of $1.3 million, compared to the first quarter of 2025 and was stable compared to the second quarter of 2024. The increase over first quarter of 2025 was driven primarily by higher gains on the sales of loans, treasury management fees, derivative hedge fees, and card payment fees offset by a decrease in other income associated with CRA investments.

Noninterest expense totaled $93.6 million for the quarter, an increase of $0.7 million from the first quarter of 2025. The increase was from higher marketing and data processing costs.

The Corporation’s total risk-based capital ratio equaled 13.06%, the common equity tier 1 capital ratio equaled 11.35%, and the tangible common equity ratio totaled 8.92%. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 9:00 a.m. (ET) on Thursday, July 24, 2025.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register-conf.media-server.com/register/BI605c2e360ce04cfc9c4221bda7f67a49)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/ced58zg3) during the time of the call. A replay of the webcast will be available until July 24, 2026.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements about First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity (including the ability to grow and maintain core deposits and retain large, uninsured deposits), credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statements, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,
		2025			2024
ASSETS
Cash and due from banks	$	81,567		$	105,372
Interest-bearing deposits		223,343			168,528
Investment securities available for sale		1,358,130			1,618,893
Investment securities held to maturity, net of allowance for credit losses		2,022,826			2,134,195
Loans held for sale		28,783			32,292
Loans		13,296,759			12,639,650
Less: Allowance for credit losses – loans		(195,316	)		(189,537	)
Net loans		13,101,443			12,450,113
Premises and equipment		122,808			133,245
Federal Home Loan Bank stock		47,290			41,738
Interest receivable		93,258			97,546
Goodwill		712,002			712,002
Other intangibles		16,797			23,371
Cash surrender value of life insurance		305,695			306,379
Other real estate owned		177			4,824
Tax asset, deferred and receivable		97,749			107,080
Other assets		380,909			367,845
TOTAL ASSETS	$	18,592,777		$	18,303,423
LIABILITIES
Deposits:
Noninterest-bearing	$	2,197,416		$	2,303,313
Interest-bearing		12,600,162			12,265,757
Total Deposits		14,797,578			14,569,070
Borrowings:
Federal funds purchased		85,000			147,229
Securities sold under repurchase agreements		114,758			100,451
Federal Home Loan Bank advances		898,702			832,703
Subordinated debentures and other borrowings		62,617			93,589
Total Borrowings		1,161,077			1,173,972
Interest payable		16,174			18,554
Other liabilities		269,996			329,302
Total Liabilities		16,244,825			16,090,898
STOCKHOLDERS’ EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized — 600 cumulative shares
Issued and outstanding – 125 cumulative shares		125			125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized — 10,000 non-cumulative perpetual shares
Issued and outstanding – 10,000 non-cumulative perpetual shares		25,000			25,000
Common Stock, $.125 stated value:
Authorized — 100,000,000 shares
Issued and outstanding – 57,272,433 and 58,045,653 shares		7,159			7,256
Additional paid-in capital		1,163,170			1,191,193
Retained earnings		1,342,473			1,200,930
Accumulated other comprehensive loss		(189,975	)		(211,979	)
Total Stockholders’ Equity		2,347,952			2,212,525
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,592,777		$	18,303,423

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended						Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,						June 30,
		2025			2024			2025			2024
INTEREST INCOME
Loans:
Taxable	$	195,173		$	201,413		$	382,901		$	399,436
Tax-exempt		10,805			8,430			21,337			16,620
Investment securities:
Taxable		8,266			9,051			16,638			17,799
Tax-exempt		12,516			13,613			25,033			27,224
Deposits with financial institutions		1,892			2,995			4,264			9,488
Federal Home Loan Bank stock		1,083			879			2,080			1,714
Total Interest Income		229,735			236,381			452,253			472,281
INTEREST EXPENSE
Deposits		84,241			99,151			164,788			197,436
Federal funds purchased		965			126			1,777			126
Securities sold under repurchase agreements		663			645			1,405			1,677
Federal Home Loan Bank advances		9,714			6,398			19,078			13,171
Subordinated debentures and other borrowings		1,138			1,490			1,921			4,237
Total Interest Expense		96,721			107,810			188,969			216,647
NET INTEREST INCOME		133,014			128,571			263,284			255,634
Provision for credit losses		5,600			24,500			9,800			26,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		127,414			104,071			253,484			229,134
NONINTEREST INCOME
Service charges on deposit accounts		8,566			8,214			16,638			16,121
Fiduciary and wealth management fees		8,831			8,825			17,475			17,025
Card payment fees		4,932			4,739			9,458			9,239
Net gains and fees on sales of loans		5,849			5,141			10,871			8,395
Derivative hedge fees		831			489			1,235			752
Other customer fees		401			460			816			887
Earnings on cash surrender value of life insurance		1,913			1,929			4,092			3,521
Net realized losses on sales of available for sale securities		(1	)		(49	)		(8	)		(51	)
Other income (loss)		(19	)		1,586			774			2,083
Total Noninterest Income		31,303			31,334			61,351			57,972
NONINTEREST EXPENSES
Salaries and employee benefits		54,527			52,214			109,509			110,507
Net occupancy		6,845			6,746			14,061			14,058
Equipment		6,927			6,599			13,935			12,825
Marketing		1,997			1,773			3,350			2,971
Outside data processing fees		7,107			7,072			13,036			13,961
Printing and office supplies		272			354			619			707
Intangible asset amortization		1,505			1,771			3,031			3,728
FDIC assessments		3,552			3,278			7,200			7,565
Other real estate owned and foreclosure expenses		29			373			629			907
Professional and other outside services		3,741			3,822			7,002			7,774
Other expenses		7,096			7,411			14,128			13,345
Total Noninterest Expenses		93,598			91,413			186,500			188,348
INCOME BEFORE INCOME TAX		65,119			43,992			128,335			98,758
Income tax expense		8,287			4,067			16,164			10,892
NET INCOME		56,832			39,925			112,171			87,866
Preferred stock dividends		469			469			938			938
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	56,363		$	39,456		$	111,233		$	86,928


PER SHARE DATA:
Basic Net Income Available to Common Stockholders	$	0.98		$	0.68		$	1.93		$	1.48
Diluted Net Income Available to Common Stockholders	$	0.98		$	0.68		$	1.92		$	1.48
Cash Dividends Paid to Common Stockholders	$	0.36		$	0.35		$	0.71		$	0.69
Tangible Common Book Value Per Share	$	27.90		$	25.10		$	27.90		$	25.10
Average Diluted Common Shares Outstanding (in thousands)		57,773			58,328			58,005			58,800

FINANCIAL HIGHLIGHTS
(Dollars In Thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
NET CHARGE-OFFS	$	2,315		$	39,644		$	7,241		$	41,897

AVERAGE BALANCES:
Total Assets	$	18,508,785		$	18,332,159		$	18,425,723		$	18,381,340
Total Loans		13,211,729			12,620,530			13,077,288			12,548,798
Total Earning Assets		17,158,984			17,013,984			17,060,278			17,068,917
Total Deposits		14,632,113			14,895,867			14,526,314			14,888,536
Total Stockholders’ Equity		2,340,010			2,203,361			2,340,440			2,222,750

FINANCIAL RATIOS:
Return on Average Assets		1.23	%		0.87	%		1.22	%		0.96	%
Return on Average Stockholders’ Equity		9.63			7.16			9.51			7.82
Return on Tangible Common Stockholders’ Equity		14.49			11.29			14.30			12.26
Average Earning Assets to Average Assets		92.71			92.81			92.59			92.86
Allowance for Credit Losses – Loans as % of Total Loans		1.47			1.50			1.47			1.50
Net Charge-offs as % of Average Loans (Annualized)		0.07			1.26			0.11			0.67
Average Stockholders’ Equity to Average Assets		12.64			12.02			12.70			12.09
Tax Equivalent Yield on Average Earning Assets		5.50			5.69			5.45			5.67
Interest Expense/Average Earning Assets		2.25			2.53			2.22			2.54
Net Interest Margin (FTE) on Average Earning Assets		3.25			3.16			3.23			3.13
Efficiency Ratio		53.99			53.84			54.26			56.47

ASSET QUALITY
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2025			2025			2024			2024			2024
Nonaccrual Loans	$	67,358		$	81,922		$	73,773		$	59,088		$	61,906
Other Real Estate Owned and Repossessions		177			4,966			4,948			5,247			4,824
Nonperforming Assets (NPA)		67,535			86,888			78,721			64,335			66,730
90+ Days Delinquent		4,443			4,280			5,902			14,105			1,686
NPAs & 90 Day Delinquent	$	71,978		$	91,168		$	84,623		$	78,440		$	68,416

Allowance for Credit Losses – Loans	$	195,316		$	192,031		$	192,757		$	187,828		$	189,537
Quarterly Net Charge-offs		2,315			4,926			771			6,709			39,644
NPAs / Actual Assets %		0.36	%		0.47	%		0.43	%		0.35	%		0.36	%
NPAs & 90 Day / Actual Assets %		0.39	%		0.49	%		0.46	%		0.43	%		0.37	%
NPAs / Actual Loans and OREO %		0.51	%		0.67	%		0.61	%		0.51	%		0.53	%
Allowance for Credit Losses – Loans / Actual Loans (%)		1.47	%		1.47	%		1.50	%		1.48	%		1.50	%
Quarterly Net Charge-offs as % of Average Loans (Annualized)		0.07	%		0.15	%		0.02	%		0.21	%		1.26	%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
		2025			2025			2024			2024			2024
ASSETS
Cash and due from banks	$	81,567		$	86,113		$	87,616		$	84,719		$	105,372
Interest-bearing deposits		223,343			331,534			298,891			359,126			168,528
Investment securities available for sale		1,358,130			1,378,489			1,386,475			1,553,496			1,618,893
Investment securities held to maturity, net of allowance for credit losses		2,022,826			2,048,632			2,074,220			2,108,649			2,134,195
Loans held for sale		28,783			23,004			18,663			40,652			32,292
Loans		13,296,759			13,004,905			12,854,359			12,646,808			12,639,650
Less: Allowance for credit losses – loans		(195,316	)		(192,031	)		(192,757	)		(187,828	)		(189,537	)
Net loans		13,101,443			12,812,874			12,661,602			12,458,980			12,450,113
Premises and equipment		122,808			128,749			129,743			129,582			133,245
Federal Home Loan Bank stock		47,290			45,006			41,690			41,716			41,738
Interest receivable		93,258			88,352			91,829			92,055			97,546
Goodwill		712,002			712,002			712,002			712,002			712,002
Other intangibles		16,797			18,302			19,828			21,599			23,371
Cash surrender value of life insurance		305,695			304,918			304,906			304,613			306,379
Other real estate owned		177			4,966			4,948			5,247			4,824
Tax asset, deferred and receivable		97,749			87,665			92,387			86,732			107,080
Other assets		380,909			369,181			387,169			348,384			367,845
TOTAL ASSETS	$	18,592,777		$	18,439,787		$	18,311,969		$	18,347,552		$	18,303,423
LIABILITIES
Deposits:
Noninterest-bearing	$	2,197,416		$	2,185,057		$	2,325,579		$	2,334,197		$	2,303,313
Interest-bearing		12,600,162			12,276,921			12,196,047			12,030,903			12,265,757
Total Deposits		14,797,578			14,461,978			14,521,626			14,365,100			14,569,070
Borrowings:
Federal funds purchased		85,000			185,000			99,226			30,000			147,229
Securities sold under repurchase agreements		114,758			122,947			142,876			124,894			100,451
Federal Home Loan Bank advances		898,702			972,478			822,554			832,629			832,703
Subordinated debentures and other borrowings		62,617			62,619			93,529			93,562			93,589
Total Borrowings		1,161,077			1,343,044			1,158,185			1,081,085			1,173,972
Deposits and other liabilities held for sale		—			—			—			288,476			—
Interest payable		16,174			13,304			16,102			18,089			18,554
Other liabilities		269,996			289,247			311,073			292,429			329,302
Total Liabilities		16,244,825			16,107,573			16,006,986			16,045,179			16,090,898
STOCKHOLDERS’ EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized — 600 cumulative shares
Issued and outstanding – 125 cumulative shares		125			125			125			125			125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized — 10,000 non-cumulative perpetual shares
Issued and outstanding – 10,000 non-cumulative perpetual shares		25,000			25,000			25,000			25,000			25,000
Common Stock, $.125 stated value:
Authorized — 100,000,000 shares
Issued and outstanding		7,159			7,226			7,247			7,265			7,256
Additional paid-in capital		1,163,170			1,183,263			1,188,768			1,192,683			1,191,193
Retained earnings		1,342,473			1,306,911			1,272,528			1,229,125			1,200,930
Accumulated other comprehensive loss		(189,975	)		(190,311	)		(188,685	)		(151,825	)		(211,979	)
Total Stockholders’ Equity		2,347,952			2,332,214			2,304,983			2,302,373			2,212,525
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,592,777		$	18,439,787		$	18,311,969		$	18,347,552		$	18,303,423

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,				March 31,				December 31,				September 30,				June 30,
	2025				2025				2024				2024				2024
INTEREST INCOME
Loans:
Taxable	$	195,173			$	187,728			$	197,536			$	206,680			$	201,413
Tax-exempt		10,805				10,532				9,020				8,622				8,430
Investment securities:
Taxable		8,266				8,372				9,024				9,263				9,051
Tax-exempt		12,516				12,517				12,754				13,509				13,613
Deposits with financial institutions		1,892				2,372				5,350				2,154				2,995
Federal Home Loan Bank stock		1,083				997				958				855				879
Total Interest Income		229,735				222,518				234,642				241,083				236,381
INTEREST EXPENSE
Deposits		84,241				80,547				89,835				98,856				99,151
Federal funds purchased		965				812				26				329				126
Securities sold under repurchase agreements		663				742				680				700				645
Federal Home Loan Bank advances		9,714				9,364				8,171				8,544				6,398
Subordinated debentures and other borrowings		1,138				783				1,560				1,544				1,490
Total Interest Expense		96,721				92,248				100,272				109,973				107,810
NET INTEREST INCOME		133,014				130,270				134,370				131,110				128,571
Provision for credit losses		5,600				4,200				4,200				5,000				24,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		127,414				126,070				130,170				126,110				104,071
NONINTEREST INCOME
Service charges on deposit accounts		8,566				8,072				8,124				8,361				8,214
Fiduciary and wealth management fees		8,831				8,644				8,665				8,525				8,825
Card payment fees		4,932				4,526				4,957				5,121				4,739
Net gains and fees on sales of loans		5,849				5,022				5,681				6,764				5,141
Derivative hedge fees		831				404				1,594				736				489
Other customer fees		401				415				316				344				460
Earnings on cash surrender value of life insurance		1,913				2,179				2,188				2,755				1,929
Net realized losses on sales of available for sale securities		(1	)			(7	)			(11,592	)			(9,114	)			(49	)
Gain on branch sale		—				—				19,983				—				—
Other income (loss)		(19	)			793				2,826				1,374				1,586
Total Noninterest Income		31,303				30,048				42,742				24,866				31,334
NONINTEREST EXPENSES
Salaries and employee benefits		54,527				54,982				55,437				55,223				52,214
Net occupancy		6,845				7,216				7,335				6,994				6,746
Equipment		6,927				7,008				7,028				6,949				6,599
Marketing		1,997				1,353				2,582				1,836				1,773
Outside data processing fees		7,107				5,929				6,029				7,150				7,072
Printing and office supplies		272				347				377				378				354
Intangible asset amortization		1,505				1,526				1,771				1,772				1,771
FDIC assessments		3,552				3,648				3,744				3,720				3,278
Other real estate owned and foreclosure expenses		29				600				227				942				373
Professional and other outside services		3,741				3,261				3,777				3,035				3,822
Other expenses		7,096				7,032				7,982				6,630				7,411
Total Noninterest Expenses		93,598				92,902				96,289				94,629				91,413
INCOME BEFORE INCOME TAX		65,119				63,216				76,623				56,347				43,992
Income tax expense		8,287				7,877				12,274				7,160				4,067
NET INCOME		56,832				55,339				64,349				49,187				39,925
Preferred stock dividends		469				469				469				468				469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	56,363			$	54,870			$	63,880			$	48,719			$	39,456


PER SHARE DATA:
Basic Net Income Available to Common Stockholders	$	0.98			$	0.95			$	1.10			$	0.84			$	0.68
Diluted Net Income Available to Common Stockholders	$	0.98			$	0.94			$	1.10			$	0.84			$	0.68
Cash Dividends Paid to Common Stockholders	$	0.36			$	0.35			$	0.35			$	0.35			$	0.35
Tangible Common Book Value Per Share	$	27.90			$	27.34			$	26.78			$	26.64			$	25.10
Average Diluted Common Shares Outstanding (in thousands)		57,773				58,242				58,247				58,289				58,328
FINANCIAL RATIOS:
Return on Average Assets		1.23		%		1.21		%		1.39		%		1.07		%		0.87		%
Return on Average Stockholders’ Equity		9.63				9.38				11.05				8.66				7.16
Return on Tangible Common Stockholders’ Equity		14.49				14.12				16.75				13.39				11.29
Average Earning Assets to Average Assets		92.71				92.47				92.48				92.54				92.81
Allowance for Credit Losses – Loans as % of Total Loans		1.47				1.47				1.50				1.48				1.50
Net Charge-offs as % of Average Loans (Annualized)		0.07				0.15				0.02				0.21				1.26
Average Stockholders’ Equity to Average Assets		12.64				12.76				12.51				12.26				12.02
Tax Equivalent Yield on Average Earning Assets		5.50				5.39				5.63				5.82				5.69
Interest Expense/Average Earning Assets		2.25				2.17				2.35				2.59				2.53
Net Interest Margin (FTE) on Average Earning Assets		3.25				3.22				3.28				3.23				3.16
Efficiency Ratio		53.99				54.54				48.48				53.76				53.84

LOANS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
		2025			2025			2024			2024			2024
Commercial and industrial loans	$	4,440,924		$	4,306,597		$	4,114,292		$	4,041,217		$	3,949,817
Agricultural land, production and other loans to farmers		265,172			243,864			256,312			238,743			239,926
Real estate loans:
Construction		836,033			793,175			792,144			814,704			823,267
Commercial real estate, non-owner occupied		2,171,092			2,177,869			2,274,016			2,251,351			2,323,533
Commercial real estate, owner occupied		1,226,797			1,214,739			1,157,944			1,152,751			1,174,195
Residential		2,397,094			2,389,852			2,374,729			2,366,943			2,370,905
Home equity		673,961			650,499			659,811			641,188			631,104
Individuals’ loans for household and other personal expenditures		141,045			140,954			166,028			158,480			162,089
Public finance and other commercial loans		1,144,641			1,087,356			1,059,083			981,431			964,814
Loans		13,296,759			13,004,905			12,854,359			12,646,808			12,639,650
Allowance for credit losses – loans		(195,316	)		(192,031	)		(192,757	)		(187,828	)		(189,537	)
NET LOANS	$	13,101,443		$	12,812,874		$	12,661,602		$	12,458,980		$	12,450,113


DEPOSITS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
		2025			2025			2024			2024			2024
Demand deposits	$	7,798,695		$	7,786,554		$	7,980,061		$	7,678,510		$	7,757,679
Savings deposits		4,984,659			4,791,874			4,522,758			4,302,236			4,339,161
Certificates and other time deposits of $100,000 or less		617,857			625,203			692,068			802,949			889,949
Certificates and other time deposits of $100,000 or more		891,139			896,143			1,043,068			1,277,833			1,415,131
Brokered certificates of deposits¹		505,228			362,204			283,671			303,572			167,150
TOTAL DEPOSITS	$	14,797,578		$	14,461,978		$	14,521,626		$	14,365,100		$	14,569,070

^{1 –} Total brokered deposits of $1.2 billion, which includes brokered CD’s of $505.2 million at June 30, 2025.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars In Thousands)
	Three Months Ended
	June 30, 2025						June 30, 2024
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
ASSETS
Interest-bearing deposits	$	252,613	$	1,892	3.00	%	$	322,647	$	2,995	3.71	%
Federal Home Loan Bank stock		46,598		1,083	9.30			41,749		879	8.42
Investment Securities: ⁽¹⁾
Taxable		1,605,718		8,266	2.06			1,788,749		9,051	2.02
Tax-exempt ⁽²⁾		2,042,326		15,843	3.10			2,240,309		17,232	3.08
Total Investment Securities		3,648,044		24,109	2.64			4,029,058		26,283	2.61
Loans held for sale		25,411		389	6.12			28,585		431	6.03
Loans: ⁽³⁾
Commercial		9,006,650		154,108	6.84			8,691,746		160,848	7.40
Real estate mortgage		2,200,521		25,062	4.56			2,150,591		23,799	4.43
HELOC and installment		834,901		15,614	7.48			823,417		16,335	7.94
Tax-exempt ⁽²⁾		1,144,246		13,677	4.78			926,191		10,670	4.61
Total Loans		13,211,729		208,850	6.32			12,620,530		212,083	6.72
Total Earning Assets		17,158,984		235,934	5.50	%		17,013,984		242,240	5.69	%
Total Non-Earning Assets		1,349,801						1,318,175
TOTAL ASSETS	$	18,508,785					$	18,332,159
LIABILITIES
Interest-Bearing Deposits:
Interest-bearing deposits	$	5,545,158	$	35,303	2.55	%	$	5,586,549	$	40,994	2.94	%
Money market deposits		3,613,952		28,714	3.18			3,036,398		27,230	3.59
Savings deposits		1,282,951		2,513	0.78			1,508,734		3,476	0.92
Certificates and other time deposits		2,003,682		17,711	3.54			2,414,967		27,451	4.55
Total Interest-Bearing Deposits		12,445,743		84,241	2.71			12,546,648		99,151	3.16
Borrowings		1,250,519		12,480	3.99			885,919		8,659	3.91
Total Interest-Bearing Liabilities		13,696,262		96,721	2.82			13,432,567		107,810	3.21
Noninterest-bearing deposits		2,186,370						2,349,219
Other liabilities		286,143						347,012
Total Liabilities		16,168,775						16,128,798
STOCKHOLDERS’ EQUITY		2,340,010						2,203,361
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,508,785					$	18,332,159
Net Interest Income (FTE)			$	139,213					$	134,430
Net Interest Spread (FTE) ⁽⁴⁾					2.68	%					2.48	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.50	%					5.69	%
Interest Expense / Average Earning Assets					2.25	%					2.53	%
Net Interest Margin (FTE) ⁽⁵⁾					3.25	%					3.16	%

⁽¹⁾ Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2025 and 2024. These totals equal $6,199 and $5,859 for the three months ended June 30, 2025 and 2024, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.
⁽⁴⁾ Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
⁽⁵⁾ Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars In Thousands)
	Six Months Ended
	June 30, 2025						June 30, 2024
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
ASSETS
Interest-bearing deposits	$	273,200	$	4,264	3.12	%	$	449,173	$	9,488	4.22	%
Federal Home Loan Bank stock		45,296		2,080	9.18			41,757		1,714	8.21
Investment Securities: ⁽¹⁾
Taxable		1,620,005		16,638	2.05			1,785,903		17,799	1.99
Tax-exempt ⁽²⁾		2,044,489		31,687	3.10			2,243,286		34,461	3.07
Total Investment Securities		3,664,494		48,325	2.64			4,029,189		52,260	2.59
Loans held for sale		23,190		708	6.11			25,184		759	6.03
Loans: ⁽³⁾
Commercial		8,889,119		301,880	6.79			8,644,927		320,057	7.40
Real estate mortgage		2,195,988		49,508	4.51			2,140,769		46,156	4.31
HELOC and installment		831,904		30,805	7.41			822,616		32,464	7.89
Tax-exempt ⁽²⁾		1,137,087		27,009	4.75			915,302		21,038	4.60
Total Loans		13,077,288		409,910	6.27			12,548,798		420,474	6.70
Total Earning Assets		17,060,278		464,579	5.45	%		17,068,917		483,936	5.67	%
Total Non-Earning Assets		1,365,445						1,312,423
TOTAL ASSETS	$	18,425,723					$	18,381,340
LIABILITIES
Interest-Bearing deposits:
Interest-bearing deposits	$	5,533,858	$	69,909	2.53	%	$	5,503,185	$	80,484	2.92	%
Money market deposits		3,526,461		54,666	3.10			3,040,938		54,613	3.59
Savings deposits		1,291,133		4,958	0.77			1,534,305		7,277	0.95
Certificates and other time deposits		1,975,923		35,255	3.57			2,421,413		55,062	4.55
Total Interest-Bearing Deposits		12,327,375		164,788	2.67			12,499,841		197,436	3.16
Borrowings		1,256,688		24,181	3.85			948,866		19,211	4.05
Total Interest-Bearing Liabilities		13,584,063		188,969	2.78			13,448,707		216,647	3.22
Noninterest-bearing deposits		2,198,939						2,388,695
Other liabilities		302,281						321,188
Total Liabilities		16,085,283						16,158,590
STOCKHOLDERS’ EQUITY		2,340,440						2,222,750
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,425,723					$	18,381,340
Net Interest Income (FTE)			$	275,610					$	267,289
Net Interest Spread (FTE) ⁽⁴⁾					2.67	%					2.45	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.45	%					5.67	%
Interest Expense / Average Earning Assets					2.22	%					2.54	%
Net Interest Margin (FTE) ⁽⁵⁾					3.23	%					3.13	%

⁽¹⁾ Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2025 and 2024. These totals equal $12,326 and $11,655 for the six months ended June 30, 2025 and 2024, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.
⁽⁴⁾ Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
⁽⁵⁾ Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

ADJUSTED NET INCOME AND DILUTED EARNINGS PER COMMON SHARE – NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)	Three Months Ended																			Six Months Ended
	June 30,			March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
	2025			2025				2024				2024				2024				2025				2024
Net Income Available to Common Stockholders – GAAP	$	56,363		$	54,870			$	63,880			$	48,719			$	39,456			$	111,233			$	86,928
Adjustments:
Net realized losses on sales of available for sale securities		1			7				11,592				9,114				49				8				51
Gain on branch sale		—			—				(19,983	)			—				—				—				—
Non-core expenses^1,2		—			—				762				—				—				—				3,481
Tax on adjustments		—			(2	)			1,851				(2,220	)			(12	)			(2	)			(860	)
Adjusted Net Income Available to Common Stockholders – Non-GAAP	$	56,364		$	54,875			$	58,102			$	55,613			$	39,493			$	111,239			$	89,600

Average Diluted Common Shares Outstanding (in thousands)		57,773			58,242				58,247				58,289				58,328				58,005				58,800

Diluted Earnings Per Common Share – GAAP	$	0.98		$	0.94			$	1.10			$	0.84			$	0.68			$	1.92			$	1.48
Adjustments:
Net realized losses on sales of available for sale securities		—			—				0.20				0.15				—				—				—
Gain on branch sale		—			—				(0.34	)			—				—				—				—
Non-core expenses^1,2		—			—				0.01				—				—				—				0.06
Tax on adjustments		—			—				0.03				(0.04	)			—				—				(0.01	)
Adjusted Diluted Earnings Per Common Share – Non-GAAP	$	0.98		$	0.94			$	1.00			$	0.95			$	0.68			$	1.92			$	1.53

¹ – Non-core expenses in the Three Months Ended December 31, 2024 included $0.8 million of costs directly related to the branch sale.
² – Non-core expenses in the Six Months Ended June 30, 2024 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.


NET INTEREST MARGIN (“NIM”), ADJUSTED
(Dollars in Thousands)
	Three Months Ended																			Six Months Ended
	June 30,			March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
	2025			2025				2024				2024				2024				2025				2024
Net Interest Income (GAAP)	$	133,014		$	130,270			$	134,370			$	131,110			$	128,571			$	263,284			$	255,634
Fully Taxable Equivalent (“FTE”) Adjustment		6,199			6,127				5,788				5,883				5,859				12,326				11,655
Net Interest Income (FTE) (non-GAAP)	$	139,213		$	136,397			$	140,158			$	136,993			$	134,430			$	275,610			$	267,289

Average Earning Assets (GAAP)	$	17,158,984		$	16,960,475			$	17,089,198			$	16,990,358			$	17,013,984			$	17,060,278			$	17,068,917
Net Interest Margin (GAAP)		3.10	%		3.07		%		3.15		%		3.09		%		3.02		%		3.09		%		3.00		%
FTE Adjustment		0.15	%		0.15		%		0.13		%		0.14		%		0.14		%		0.14		%		0.13		%
Net Interest Margin (FTE) (non-GAAP)		3.25	%		3.22		%		3.28		%		3.23		%		3.16		%		3.23		%		3.13		%

RETURN ON TANGIBLE COMMON EQUITY – NON-GAAP
(Dollars In Thousands)	Three Months Ended																				Six Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
	2025				2025				2024				2024				2024				2025				2024
Total Average Stockholders’ Equity (GAAP)	$	2,340,010			$	2,340,874			$	2,312,270			$	2,251,547			$	2,203,361			$	2,340,440			$	2,222,750
Less: Average Preferred Stock		(25,125	)			(25,125	)			(25,125	)			(25,125	)			(25,125	)			(25,125	)			(25,125	)
Less: Average Intangible Assets, Net of Tax		(725,813	)			(726,917	)			(728,218	)			(729,581	)			(730,980	)			(726,362	)			(731,706	)
Average Tangible Common Equity, Net of Tax (Non-GAAP)	$	1,589,072			$	1,588,832			$	1,558,927			$	1,496,841			$	1,447,256			$	1,588,953			$	1,465,919

Net Income Available to Common Stockholders (GAAP)	$	56,363			$	54,870			$	63,880			$	48,719			$	39,456			$	111,233			$	86,928
Plus: Intangible Asset Amortization, Net of Tax		1,188				1,206				1,399				1,399				1,399				2,394				2,945
Tangible Net Income (Non-GAAP)	$	57,551			$	56,076			$	65,279			$	50,118			$	40,855			$	113,627			$	89,873

Return on Tangible Common Equity (Non-GAAP)		14.49		%		14.12		%		16.75		%		13.39		%		11.29		%		14.30		%		12.26		%


EFFICIENCY RATIO – NON-GAAP
(Dollars In Thousands)	Three Months Ended																				Six Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
	2025				2025				2024				2024				2024				2025				2024
Noninterest Expense (GAAP)	$	93,598			$	92,902			$	96,289			$	94,629			$	91,413			$	186,500			$	188,348
Less: Intangible Asset Amortization		(1,505	)			(1,526	)			(1,771	)			(1,772	)			(1,771	)			(3,031	)			(3,728	)
Less: OREO and Foreclosure Expenses		(29	)			(600	)			(227	)			(942	)			(373	)			(629	)			(907	)

Adjusted Noninterest Expense (Non-GAAP)	$	92,064			$	90,776			$	94,291			$	91,915			$	89,269			$	182,840			$	183,713

Net Interest Income (GAAP)	$	133,014			$	130,270			$	134,370			$	131,110			$	128,571			$	263,284			$	255,634
Plus: Fully Taxable Equivalent Adjustment		6,199				6,127				5,788				5,883				5,859				12,326				11,655
Net Interest Income on a Fully Taxable Equivalent Basis (Non-GAAP)	$	139,213			$	136,397			$	140,158			$	136,993			$	134,430			$	275,610			$	267,289

Noninterest Income (GAAP)	$	31,303			$	30,048			$	42,742			$	24,866			$	31,334			$	61,351			$	57,972
Less: Investment Securities (Gains) Losses		1				7				11,592				9,114				49				8				51
Adjusted Noninterest Income (Non-GAAP)	$	31,304			$	30,055			$	54,334			$	33,980			$	31,383			$	61,359			$	58,023
Adjusted Revenue (Non-GAAP)	$	170,517			$	166,452			$	194,492			$	170,973			$	165,813			$	336,969			$	325,312
Efficiency Ratio (Non-GAAP)		53.99		%		54.54		%		48.48		%		53.76		%		53.84		%		54.26		%		56.47		%

Adjusted Noninterest Expense (Non-GAAP)	$	92,064			$	90,776			$	94,291			$	91,915			$	89,269			$	182,840			$	183,713
Less: Non-core Expenses^1,2		—				—				(762	)			—				—				—				(3,481	)
Adjusted Noninterest Expense Excluding Non-core Expenses (Non-GAAP)	$	92,064			$	90,776			$	93,529			$	91,915			$	89,269			$	182,840			$	180,232

Adjusted Revenue (Non-GAAP)	$	170,517			$	166,452			$	194,492			$	170,973			$	165,813			$	336,969			$	325,312
Less: Gain on Branch Sale		—				—				(19,983	)			—				—				—				—
Adjusted Revenue Excluding Gain on Branch Sale (Non-GAAP)	$	170,517			$	166,452			$	174,509			$	170,973			$	165,813			$	336,969			$	325,312

Adjusted Efficiency Ratio (Non-GAAP)		53.99		%		54.54		%		53.60		%		53.76		%		53.84		%		54.26		%		55.40		%

¹ – Non-core expenses in the Three Months Ended December 31, 2024 included $0.8 million of costs directly related to the branch sale.
² – Non-core expenses in the Six Months Ended June 30, 2024 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.

For more information, contact:
Nicole M. Weaver, First Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

The MIL Network –

July 24, 2025

MIL-OSI: First Merchants Corporation Announces Second Quarter 2025 Earnings Per Share

Source: GlobeNewswire (MIL-OSI)

MUNCIE, Ind., July 23, 2025 (GLOBE NEWSWIRE) — First Merchants Corporation (NASDAQ – FRME)

Second Quarter 2025 Highlights:

Net income available to common stockholders was $56.4 million and diluted earnings per common share totaled $0.98 in the second quarter of 2025, compared to $39.5 million and $0.68 in the second quarter of 2024, and $54.9 million and $0.94 in the first quarter of 2025.
Robust capital position with Common Equity Tier 1 Capital Ratio of 11.35%.
Repurchased 818,480 shares totaling $31.7 million year-to-date; Repurchased 582,486 shares totaling $22.1 million during the second quarter.
Total loans grew $297.6 million, or 9.1% annualized, on a linked quarter basis, and $653.6 million, or 5.2%, during the last twelve months.
Total deposits increased $335.6 million, or 9.3% annualized, on a linked quarter basis.
Nonperforming assets to total assets were 36 basis points compared to 47 basis points on a linked quarter basis.
The efficiency ratio totaled 53.99% for the quarter.