First Merchants Corporation - 10-Q quarterly report FY2026 Q2

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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______ to _______

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)


Indiana
(State or other jurisdiction of incorporation)
001-41342			35-1544218
(Commission File Number)			(IRS Employer Identification No.)

200 East Jackson Street, Muncie, IN 47305-2814

(Address of principal executive offices) (Zip code)

(Registrant’s telephone number, including area code): (765) 747-1500

Not Applicable

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A	FRMEP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 27, 2026, there were 62,801,423 outstanding common shares of the registrant.

TABLE OF CONTENTS

FIRST MERCHANTS CORPORATION


		Page No.
Glossary of Defined Terms		3

Part I. Financial Information
Item 1.	Financial Statements (Unaudited):
	Consolidated Condensed Balance Sheets	4
	Consolidated Condensed Statements of Income	5
	Consolidated Condensed Statements of Comprehensive Income	6
	Consolidated Condensed Statements of Stockholders' Equity	7
	Consolidated Condensed Statements of Cash Flows	9
	Notes to Consolidated Condensed Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 4.	Controls and Procedures	64

Part II. Other Information
Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	66

Signatures		67

GLOSSARY OF DEFINED TERMS

FIRST MERCHANTS CORPORATION


ACL - Loans			Allowance for Credit Losses on Loans
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
Bank			First Merchants Bank, a wholly-owned subsidiary of the Corporation
CECL			Current Expected Credit Losses (FASB Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, adopted by the Corporation on January 1, 2021.)
CET1			Common Equity Tier 1
CME Term SOFR			A forward-looking term Secured Overnight Financing Rate, as administered by CME Group Benchmark Administration Limited
CODM			Chief operating decision maker
Corporation			First Merchants Corporation
CRA			Community Reinvestment Act
Credit Agreement			Credit agreement entered into on September 30, 2024 with U.S. Bank, N.A.
Credit Facility			Revolving line of credit related to Credit Agreement entered into on September 30, 2024
ESPP			Employee Stock Purchase Plan
Exchange Ratio			0.85 share of the Corporation's stock pursuant to the Merger Agreement
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation
Federal Reserve			Board of Governors of the Federal Reserve System
FHLB			Federal Home Loan Bank
First Savings			First Savings Financial Group, Inc.
FMC Trust II			First Merchants Capital Trust II
FTE			Fully taxable equivalent
GAAP			U.S. Generally Accepted Accounting Principles
IRA			Inflation Reduction Act of 2022
Level One			Level One Bancorp, Inc., which was acquired by the Corporation on April 1, 2022
Merger			The merger of First Savings with and into the Corporation pursuant to the Merger Agreement
Merger Agreement			Agreement and Plan of Merger entered into on September 24, 2025 with First Savings
PCD			Purchased credit-deteriorated loans
PSL			Purchased seasoned loans
RSAs			Restricted Stock Awards
Senior Debt			Fixed-to-Floating Rate Senior Notes due 2028
Subordinated Debt			Fixed-to-Floating Rate Subordinated Notes due 2028

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)


	June 30, 2026		December 31, 2025

ASSETS
Cash and due from banks	$	86,665	$	84,158
Interest-bearing deposits	529,432		196,300
Investment securities available for sale	1,384,392		1,407,102
Investment securities held to maturity, net of allowance for credit losses of $245 and $245 (fair value of $1,653,943 and $1,718,287)	1,907,684		1,971,539
Loans held for sale	77,880		20,079
Loans	15,530,737		13,791,707
Less: Allowance for credit losses - loans	(241,615)		(195,597)
Net loans	15,289,122		13,596,110
Premises and equipment	148,164		121,058
Federal Home Loan Bank stock	70,818		47,245
Interest receivable	101,927		93,374
Goodwill	788,186		712,002
Other intangibles	38,972		13,800
Cash surrender value of life insurance	373,242		308,438
Other real estate owned	1,562		658
Tax asset, deferred and receivable	113,975		78,664
Other assets	436,744		374,574
TOTAL ASSETS	$	21,348,765	$	19,025,101
LIABILITIES
Deposits:
Noninterest-bearing	$	3,831,836	$	2,137,262
Interest-bearing	12,921,545		13,157,593
Total Deposits	16,753,381		15,294,855
Borrowings:
Federal funds purchased	—		40,000
Securities sold under repurchase agreements	103,340		103,755
Federal Home Loan Bank advances	1,414,059		798,549
Subordinated debentures and other borrowings	86,350		57,630
Total Borrowings	1,603,749		999,934

Interest payable	17,491		18,235
Other liabilities	276,967		245,410
Total Liabilities	18,651,588		16,558,434
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY




Cumulative 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, $0.125 stated value:
Authorized - 100,000,000 shares
Issued and outstanding - 62,205,528 and 56,951,939 shares	7,776		7,119
Additional paid-in capital	1,358,975		1,150,816
Retained earnings	1,438,894		1,413,742
Accumulated other comprehensive loss	(133,593)		(130,135)
Total Stockholders' Equity	2,697,177		2,466,667
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	21,348,765	$	19,025,101

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
INTEREST INCOME
Loans:
Taxable	$	226,531	$	195,173	$	440,158	$	382,901
Tax exempt	11,823		10,805		23,412		21,337
Investment securities:
Taxable	7,355		8,266		14,902		16,638
Tax exempt	12,458		12,516		25,055		25,033

Deposits with financial institutions	1,147		1,892		2,391		4,264
Federal Home Loan Bank stock	1,525		1,083		3,490		2,080
Total Interest Income	260,839		229,735		509,408		452,253
INTEREST EXPENSE
Deposits	86,254		84,241		170,347		164,788
Federal funds purchased	717		965		1,307		1,777
Securities sold under repurchase agreements	419		663		751		1,405
Federal Home Loan Bank advances	13,190		9,714		24,238		19,078
Subordinated debentures and other borrowings	1,318		1,138		2,521		1,921
Total Interest Expense	101,898		96,721		199,164		188,969
NET INTEREST INCOME	158,941		133,014		310,244		263,284
Provision for credit losses	33,000		5,600		37,900		9,800
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	125,941		127,414		272,344		253,484
NONINTEREST INCOME
Service charges on deposit accounts	9,372		8,566		18,409		16,638
Fiduciary and wealth management fees	9,638		8,831		19,406		17,475
Card payment fees	5,505		4,932		10,780		9,458
Net gains and fees on sales of loans	7,742		5,849		14,253		10,871
Derivative hedge fees	1,117		831		1,681		1,235
Other customer fees	880		401		1,473		816
Earnings on bank-owned life insurance	2,325		1,913		5,771		4,092
Net realized losses on sales of available for sale securities	—		(1)		—		(8)
Net loss on mortgage loans reclassified to held for sale	—		—		(29,755)		—
Other income (loss)	577		(19)		967		774
Total Noninterest Income	37,156		31,303		42,985		61,351
NONINTEREST EXPENSE
Salaries and employee benefits	65,774		54,527		135,217		109,509
Net occupancy	8,227		6,845		16,528		14,061
Equipment	8,603		6,927		16,421		13,935
Marketing	2,370		1,997		3,971		3,350
Outside data processing fees	8,045		7,107		15,235		13,036
Printing and office supplies	491		272		868		619
Intangible asset amortization	2,706		1,505		5,008		3,031
FDIC assessments	4,390		3,552		8,283		7,200
Other real estate owned and foreclosure expenses	1,052		29		2,152		629
Professional and other outside services	4,979		3,741		19,572		7,002
Other expenses	8,710		7,096		17,237		14,128
Total Noninterest Expense	115,347		93,598		240,492		186,500
Income Before Income Taxes	47,750		65,119		74,837		128,335
Income tax expense	3,770		8,287		2,701		16,164
NET INCOME	43,980		56,832		72,136		112,171
Preferred stock dividends	469		469		938		938
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	43,511	$	56,363	$	71,198	$	111,233
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.70	$	0.98	$	1.16	$	1.93
Diluted Net Income Available to Common Stockholders	$	0.70	$	0.98	$	1.15	$	1.92
Cash Dividends Paid	$	0.37	$	0.36	$	0.73	$	0.71
Average Diluted Common Shares Outstanding (in thousands)	62,574		57,773		61,795		58,005

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Net income	$	43,980	$	56,832	$	72,136	$	112,171
Other comprehensive income (loss):
Unrealized gains (losses) on securities available for sale:
Unrealized holding gain (loss) arising during the period	19,327		424		(4,377)		(1,641)
Reclassification adjustment for losses included in net income	—		1		—		8
Tax effect	(4,059)		(89)		919		343













Total other comprehensive income (loss), net of tax	15,268		336		(3,458)		(1,290)
Comprehensive income	$	59,248	$	57,168	$	68,678	$	110,881

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)



	Three Months Ended June 30, 2026
	Cumulative Preferred Stock			Non-Cumulative Preferred Stock			Common Stock			Additional				Accumulated Other
	Shares	Amount		Shares	Amount		Shares	Amount		Paid in Capital		Retained Earnings		Comprehensive Loss		Total
Balances, March 31, 2026	125	$	125	10,000	$	25,000	62,508,055	$	7,813	$	1,369,879	$	1,418,609	$	(148,861)	$	2,672,565
Comprehensive income:
Net income	—	—		—	—		—	—		—		43,980		—		43,980
Other comprehensive income, net of tax	—	—		—	—		—	—		—		—		15,268		15,268
Cash dividends on preferred stock ($46.88 per share)	—	—		—	—		—	—		—		(469)		—		(469)
Cash dividends on common stock ($0.37 per share)	—	—		—	—		—	—		—		(23,226)		—		(23,226)

Repurchases of common stock	—	—		—	—		(336,145)	(42)		(13,332)		—		—		(13,374)
Excise tax on stock repurchases	—	—		—	—		—	—		(123)		—		—		(123)
Share-based compensation	—	—		—	—		15,747	2		1,849		—		—		1,851
Stock issued under employee benefit plans	—	—		—	—		4,919	—		169		—		—		169
Stock issued under dividend reinvestment and stock purchase plan	—	—		—	—		14,344	3		591		—		—		594

Shares withheld on equity award settlements	—	—		—	—		(1,392)	—		(58)		—		—		(58)
Balances, June 30, 2026	125	$	125	10,000	$	25,000	62,205,528	$	7,776	$	1,358,975	$	1,438,894	$	(133,593)	$	2,697,177



	Three Months Ended June 30, 2025
	Cumulative Preferred Stock			Non-Cumulative Preferred Stock			Common Stock			Additional				Accumulated Other
	Shares	Amount		Shares	Amount		Shares	Amount		Paid in Capital		Retained Earnings		Comprehensive Loss		Total
Balances, March 31, 2025	125	$	125	10,000	$	25,000	57,810,232	$	7,226	$	1,183,263	$	1,306,911	$	(190,311)	$	2,332,214
Comprehensive income:
Net income	—	—		—	—		—	—		—		56,832		—		56,832
Other comprehensive income, net of tax	—	—		—	—		—	—		—		—		336		336
Cash dividends on preferred stock ($46.88 per share)	—	—		—	—		—	—		—		(469)		—		(469)
Cash dividends on common stock ($0.36 per share)	—	—		—	—		—	—		—		(20,801)		—		(20,801)

Repurchases of common stock	—	—		—	—		(582,486)	(73)		(22,022)		—		—		(22,095)
Excise tax on stock repurchases	—	—		—	—		—	—		(219)		—		—		(219)
Share-based compensation	—	—		—	—		24,842	3		1,564		—		—		1,567
Stock issued under employee benefit plans	—	—		—	—		4,423	1		143		—		—		144
Stock issued under dividend reinvestment and stock purchase plan	—	—		—	—		15,987	3		571		—		—		574
Stock options exercised	—	—		—	—		6,191	—		111		—		—		111
Shares withheld on equity award settlements	—	—		—	—		(6,756)	(1)		(241)		—		—		(242)
Balances, June 30, 2025	125	$	125	10,000	$	25,000	57,272,433	$	7,159	$	1,163,170	$	1,342,473	$	(189,975)	$	2,347,952

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)



	Six Months Ended June 30, 2026
	Cumulative Preferred Stock			Non-Cumulative Preferred Stock			Common Stock			Additional				Accumulated Other
	Shares	Amount		Shares	Amount		Shares	Amount		Paid in Capital		Retained Earnings		Comprehensive Loss		Total
Balances, December 31, 2025	125	$	125	10,000	$	25,000	56,951,939	$	7,119	$	1,150,816	$	1,413,742	$	(130,135)	$	2,466,667
Comprehensive income:
Net income	—	—		—	—		—	—		—		72,136		—		72,136
Other comprehensive loss, net of tax	—	—		—	—		—	—		—		—		(3,458)		(3,458)
Cash dividends on preferred stock ($93.76 per share)	—	—		—	—		—	—		—		(938)		—		(938)
Cash dividends on common stock ($0.73 per share)	—	—		—	—		—	—		—		(46,046)		—		(46,046)
Issuance of stock related to acquisition	—	—		—	—		6,117,038	765		242,449		—		—		243,214
Repurchases of common stock	—	—		—	—		(976,631)	(122)		(38,167)		—		—		(38,289)
Excise tax on stock repurchases	—	—		—	—		—	—		(347)		—		—		(347)
Share-based compensation	—	—		—	—		83,518	10		3,524		—		—		3,534
Stock issued under employee benefit plans	—	—		—	—		10,044	1		338		—		—		339
Stock issued under dividend reinvestment and stock purchase plan	—	—		—	—		30,014	5		1,167		—		—		1,172
Stock options exercised	—	—		—	—		19,524	1		464		—		—		465
Shares withheld on equity award settlements	—	—		—	—		(29,918)	(3)		(1,269)		—		—		(1,272)
Balances, June 30, 2026	125	$	125	10,000	$	25,000	62,205,528	$	7,776	$	1,358,975	$	1,438,894	$	(133,593)	$	2,697,177



	Six Months Ended June 30, 2025
	Cumulative Preferred Stock			Non-Cumulative Preferred Stock			Common Stock			Additional				Accumulated Other
	Shares	Amount		Shares	Amount		Shares	Amount		Paid in Capital		Retained Earnings		Comprehensive Loss		Total
Balances, December 31, 2024	125	$	125	10,000	$	25,000	57,974,535	$	7,247	$	1,188,768	$	1,272,528	$	(188,685)	$	2,304,983
Comprehensive income:
Net income	—	—		—	—		—	—		—		112,171		—		112,171
Other comprehensive loss, net of tax	—	—		—	—		—	—		—		—		(1,290)		(1,290)
Cash dividends on preferred stock ($93.76 per share)	—	—		—	—		—	—		—		(938)		—		(938)
Cash dividends on common stock ($0.71 per share)	—	—		—	—		—	—		—		(41,288)		—		(41,288)

Repurchases of common stock	—	—		—	—		(776,797)	(97)		(29,903)		—		—		(30,000)
Excise tax on stock repurchases	—	—		—	—		—	—		(293)		—		—		(293)
Share-based compensation	—	—		—	—		30,508	4		3,158		—		—		3,162
Stock issued under employee benefit plans	—	—		—	—		9,315	1		316		—		—		317
Stock issued under dividend reinvestment and stock purchase plan	—	—		—	—		29,867	4		1,136		—		—		1,140
Stock options exercised	—	—		—	—		11,943	1		236		—		—		237
Shares withheld on equity award settlements	—	—		—	—		(6,938)	(1)		(248)		—		—		(249)
Balances, June 30, 2025	125	$	125	10,000	$	25,000	57,272,433	$	7,159	$	1,163,170	$	1,342,473	$	(189,975)	$	2,347,952

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)


	Six Months Ended June 30,
	2026		2025
Cash Flows from Operating Activities:
Net income	$	72,136	$	112,171
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	37,900		9,800
Depreciation and amortization	18,259		15,711
Change in deferred taxes	(3,618)		(2,178)
Share-based compensation	3,534		3,162

Loans originated for sale	(368,576)		(237,250)
Proceeds from sales of loans held for sale	383,856		235,456
Net gains on sales of loans held for sale	(10,544)		(8,326)
Loss on mortgage loans reclassified to held for sale	29,755		—


Net losses on sales of securities available for sale	—		8

Increase in cash surrender value of life insurance	(4,368)		(3,150)
Gains on life insurance benefits	(1,403)		(942)
Change in income tax receivable	(11,280)		(3,648)
Change in interest receivable	2,449		(1,429)
Change in interest payable	(6,674)		72
Other adjustments	5,202		(4,082)
Net cash provided by operating activities	146,628		115,375
Cash Flows from Investing Activities:
Net change in interest-bearing deposits	(308,988)		75,548

Purchase of securities available for sale	(10,833)		(5,906)

Proceeds from sales of securities available for sale	251,341		—
Proceeds from maturities and redemptions of:
Securities available for sale	26,632		30,084
Securities held to maturity	62,218		49,687
Purchases of Federal Home Loan Bank stock	—		(5,643)
Redemptions of Federal Home Loan Bank stock	57		43
Redemptions of Federal Reserve Bank stock	1,863		—
Payment of capital calls to qualified affordable housing investments	(23,494)		(23,596)

Net change in loans	(215,809)		(457,029)
Proceeds from mortgage portfolio loan sale	271,069		—

Net cash and cash equivalents received in acquisition	29,922		—

Proceeds from the sale of other real estate owned	1,788		5,724
Proceeds from life insurance benefits	4,593		3,303
Other adjustments	(11,953)		(1,951)
Net cash provided (used) by investing activities	78,406		(329,736)
Cash Flows from Financing Activities:
Net change in:
Demand and savings deposits	106,823		280,535
Certificates of deposit and other time deposits	(338,427)		(4,583)
Proceeds from borrowings	1,059,021		682,194
Repayment of borrowings	(966,647)		(679,302)
Cash dividends on preferred stock	(938)		(938)
Cash dividends on common stock	(46,046)		(41,288)

Stock issued under employee benefit plans	339		317
Stock issued under dividend reinvestment and stock purchase plans	1,172		1,140
Stock options exercised	465		237


Repurchase of common stock	(38,289)		(30,000)
Net cash provided (used) by financing activities	(222,527)		208,312
Net Change in Cash and Cash Equivalents	2,507		(6,049)
Cash and Cash Equivalents, January 1	84,158		87,616
Cash and Cash Equivalents, June 30	$	86,665	$	81,567
Additional cash flow information:
Interest paid	$	199,908	$	188,897
Income tax paid	3,282		13,062
Loans transferred to other real estate owned	2,317		643

Non-cash investing activities using trade date accounting	—		6,745

ROU assets obtained in exchange for new operating lease liabilities	12,119		388
Qualified affordable housing investments obtained in exchange for funding commitments	29,000		20,000
Reclassification of loans to held for sale	356,956		—
Reclassification of loans from held for sale to loans	47,139		—

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)


In conjunction with the acquisition, liabilities were assumed as follows:
Fair value of assets acquired	$	2,464,488	$	—
Cash paid in acquisition	(7)		—
Less: Common stock issued	243,214		—

Liabilities assumed	$	2,221,267	$	—

See NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 1

GENERAL

Financial Statement Preparation

The Consolidated Condensed Balance Sheet of the Corporation as of December 31, 2025, has been derived from the audited consolidated balance sheet of the Corporation as of that date. Certain information and note disclosures normally included in the Corporation’s annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission. The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results to be expected for the year. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses.

Significant Accounting Policies

The significant accounting policies followed by the Corporation and its wholly-owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments, which are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported, have been included in the accompanying Consolidated Condensed Financial Statements.

Recent Accounting Changes Adopted in 2026

FASB Accounting Standards Update No. 2025-08 - Financial Instruments - Credit Losses (Topic 326): Purchased Loans

Summary - Effective January 1, 2026, the Corporation early adopted Accounting Standards Update ("ASU") No. 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans, which expands the use of the gross-up method to certain purchased seasoned loans. Upon adoption, the Corporation recognized acquisition-date expected credit losses of $22.3 million, consisting of $15.2 million related to purchased seasoned loans and $7.1 million related to purchased credit-deteriorated loans, through the allowance for credit losses with a corresponding increase to the acquired loans’ amortized cost basis. The guidance was applied prospectively and did not result in a cumulative-effect adjustment to retained earnings. See NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES of the Notes to Consolidated Condensed Financial Statements for additional information.

New Accounting Pronouncements Not Yet Adopted

The Corporation continually monitors potential accounting pronouncements and the following pronouncements have been deemed to have the most applicability to the Corporation's financial statements:

FASB Accounting Standards Update No. 2024-03 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

Summary - The FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures in the fourth quarter of 2024. This ASU requires public business entities to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods.

The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities.

The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Corporation is currently assessing the impact of this new standard on our disclosures and expect to provide additional detail and disclosures under this new guidance.

FASB Accounting Standards Update No. 2025-09 - Derivatives and Hedging (Topic 815): Hedge Accounting Improvements

Summary - The FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements in the fourth quarter of 2025. The amendments in this Update clarify certain aspects of the guidance on hedge accounting and address several incremental hedge accounting issues from the global reference rate reform initiative.

The objective is to more closely align hedge accounting with the economics of an entity’s risk management activities. The five issues addressed in this Update are intended to better reflect those strategies in financial reporting by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions.

The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those fiscal years. Early adoption is permitted. The Corporation is assessing the terms of this guidance, but adoption of the standard is not expected to have a significant impact on the Corporation’s financial statements or disclosures.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

FASB Accounting Standards Update No. 2025-10 - Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities

Summary - The FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities in the fourth quarter of 2025. This Update establishes authoritative U.S. GAAP guidance for accounting for government grants received by business entities, including recognition, measurement, and presentation. It provides specific guidance for grants related to assets and grants related to income. The amendments exclude income taxes, below-market interest rate loans, and government guarantees.

The amendments are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those fiscal years. Early adoption is permitted for any interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Corporation is assessing the terms of this guidance, but adoption of the standard is not expected to have a significant impact on the Corporation’s financial statements or disclosures.

NOTE 2

ACQUISITIONS

First Savings Financial Group, Inc. Acquisition

On February 1, 2026 (the "Effective Time"), the Corporation completed the acquisition of First Savings Financial Group, Inc., an Indiana corporation ("First Savings"), pursuant to the Agreement and Plan of Merger, dated September 24, 2025, by and between the Corporation and First Savings (the "Merger Agreement"). Immediately following the Merger, First Savings Bank, a wholly-owned subsidiary of First Savings, merged with and into the Bank, with the Bank surviving the merger and continuing its corporate existence.

First Savings was headquartered in Jeffersonville, Indiana and had 16 banking centers serving the southern Indiana market. As of the Effective Time, each share of outstanding First Savings common stock was converted into the right to receive 0.85 of a share (the "Exchange Ratio") of First Merchants common stock, in a tax-free exchange, plus cash-in-lieu of any fractional share created by the Exchange Ratio.

Immediately prior to the Effective Time, each outstanding First Savings restricted stock award held by certain directors, executive officers and employees of First Savings, whether unvested or vested, was exchanged for shares of First Merchants common stock based on the Exchange Ratio according to their respective award agreement terms.

In addition, on the day immediately preceding the Effective Time, each outstanding option to acquire a share of First Savings common stock was cancelled in exchange for the right to receive a cash payment, which was paid by First Savings, equal to (i) $32.59 per share, which is equal to the Exchange Ratio multiplied by the volume-weighted average price of First Merchants common stock over the ten (10) consecutive trading days ending on January 27, 2026, less (ii) the option exercise price per share, and less (iii) any applicable withholding taxes.

The Corporation issued 6.1 million shares of its common stock, in exchange for all of the issued and outstanding shares of First Savings common stock.

The total purchase price of approximately $243.2 million consists primarily of equity consideration issued by the Corporation and is measured at fair value based on the Corporation’s common stock price as of the acquisition date. The purchase price also includes cash paid in lieu of fractional shares. The purchase price represents the fair value of consideration transferred in accordance with Accounting Standards Codification ("ASC") 805.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which remain subject to adjustment during the measurement period, the purchase price for the First Savings acquisition is detailed in the following table. If, prior to the end of the one-year measurement period for finalizing the purchase price allocation, information becomes available about facts and circumstances that existed as of the acquisition date, which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively.


	Fair Value
Cash and due from banks	$	29,929
Interest-bearing deposits	24,144
Investment securities	251,341
Loans held for sale	62,537
Loans	1,840,524
Allowance for credit losses - loans	(22,280)
Premises and equipment	23,465
Federal Home Loan Bank stock	23,630
Other real estate owned	856
Interest receivable	11,002
Cash surrender value of life insurance	63,626
Tax asset, deferred and receivable	22,862
Other assets	26,488
Deposits	(1,690,130)
Federal Home Loan Bank advances	(482,729)
Subordinated debentures	(28,712)
Interest payable	(5,930)
Other liabilities	(13,766)
Net tangible assets acquired	136,857
Other intangibles	30,180
Goodwill	76,184
Purchase price	$	243,221

The Corporation early adopted ASU 2025‑08, Purchased Financial Assets, for the First Savings acquisition. Consistent with this guidance, acquired loans were initially recognized using the acquisition‑date gross‑up method, with expected credit-related losses recognized through an acquisition‑date allowance for credit losses, which results in a corresponding increase to the loans’ amortized cost basis rather than through an embedded credit discount within fair value. For acquired loans that exhibited more‑than‑insignificant deterioration in credit quality since origination, the Corporation identified acquisition‑date expected credit losses, which represent the present value of expected credit-related losses over the life of the loans and are recognized as an allowance for credit losses at acquisition with a corresponding increase to the loans’ amortized cost basis. The Corporation did not identify a non‑credit discount on these loans, as the entire purchase discount was attributable to expected credit losses recognized through the acquisition‑date allowance for credit losses. Subsequent changes in expected credit losses on acquired loans are recognized through provision for credit losses in accordance with ASC 326. Additional information regarding the acquired loan portfolio and allowance for credit losses is provided in NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES.

Of the total purchase price, $30.2 million was allocated to identifiable intangible assets. Approximately $29.4 million was allocated to a core deposit intangible, which is being amortized over an estimated useful life of 10 years, and approximately $0.8 million was allocated to a non-compete intangible, which is being amortized over an estimated useful life of one year. The remaining purchase price was allocated to goodwill, which is not deductible for tax purposes.

Goodwill primarily represents the expected synergies from combining First Savings’ operations with the Corporation’s existing franchise, including anticipated cost savings, revenue enhancement opportunities, and the value of the assembled workforce, none of which qualify for separate recognition under GAAP. Additional factors contributing to goodwill include the expansion of the Corporation’s geographic footprint in southern Indiana and the acquired core customer relationships.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Integration and Transaction‑Related Expenses

During the three and six months ended June 30, 2026, the Corporation recorded $3.8 million and $20.8 million, respectively, of integration and transaction‑related expenses. During the three months ended June 30, 2026, these expenses were comprised of $2.3 million of contract termination and similar charges, $0.9 million of other integration-related expenditures, and $0.6 million of salaries and benefits. During the six months ended June 30, 2026, these costs consisted primarily of $10.7 million of contract termination and similar charges, $5.8 million of salaries and benefits, and $3.0 million of acquisition-related professional and advisory services. Acquisition‑related professional and advisory services primarily related to investment banking, legal, and valuation services incurred to effect the acquisition. Contract termination and similar charges primarily related to the early termination of vendor and service agreements and core systems and software arrangements as part of post‑acquisition integration activities. Salaries and benefits primarily related to employee retention and severance arrangements associated with post‑acquisition integration activities.

Results of First Savings Since Acquisition

The Corporation's results of operations for the three and six months ended June 30, 2026 include the operating results of the acquired assets and assumed liabilities of First Savings subsequent to the acquisition on February 1, 2026. Due to the integration of certain processes and the conversion of operational systems during the second quarter of 2026, the Corporation determined that separately identifying the revenue and earnings attributable solely to legacy First Savings subsequent to the acquisition date is impracticable.

Pro Forma Financial Information

The results of operations of First Savings have been included in the Corporation's consolidated financial statements since the acquisition date. The following schedule presents unaudited pro forma results for the six months ended June 30, 2026 and the year ended December 31, 2025, as if the First Savings acquisition had occurred at the beginning of the periods presented.

The unaudited pro forma financial information includes adjustments for interest income on loans, interest expense on deposits and borrowings, premises expense related to the acquired real estate, amortization of intangible assets arising from the transaction and the related income tax effects.

The pro forma financial information for the six months ended June 30, 2026 excludes certain non‑recurring charges recognized by First Savings during January 2026, prior to the February 1, 2026 acquisition date. These charges primarily relate to the write‑off of assets and the settlement or extinguishment of liabilities determined to have no continuing economic benefit to the combined company, as well as other transaction‑related items, including change‑in‑control payments, severance costs, legal and investment banking fees, and accelerated equity compensation expense associated with restricted stock awards and stock options.

In addition, the pro forma financial information excludes $20.8 million of non‑recurring integration‑related costs incurred by the Corporation during the six months ended June 30, 2026 in connection with the acquisition. These costs primarily consist of employee retention bonuses and severance arrangements associated with post‑acquisition integration activities, contract termination charges, core system conversion expenses and transaction advisory services.

The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future operating results.


	Six Months Ended
	June 30, 2026
Total revenue (net interest income plus noninterest income)	$	360,944
Net income	$	89,377
Net income available to common stockholders	$	88,439
Earnings per common share:
Basic	$	1.41
Diluted	$	1.41


	Year Ended
	December 31, 2025
Total revenue (net interest income plus noninterest income)	$	757,511
Net income	$	253,686
Net income available to common stockholders	$	251,811
Earnings per common share:
Basic	$	3.96
Diluted	$	3.94

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 3

INVESTMENT SECURITIES

The following tables summarize the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale as of June 30, 2026 and December 31, 2025.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale at June 30, 2026

U.S. Government-sponsored agency securities	$	83,118	$	—	$	(11,379)	$	71,739
State and municipal	988,306		133		(95,307)		893,132
U.S. Government-sponsored mortgage-backed securities	474,786		984		(65,551)		410,219
Foreign investment	1,500		—		—		1,500
Corporate obligations	7,989		—		(187)		7,802

Total available for sale	$	1,555,699	$	1,117	$	(172,424)	$	1,384,392


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale at December 31, 2025

U.S. Government-sponsored agency securities	$	87,936	$	—	$	(11,837)	$	76,099
State and municipal	993,911		225		(91,842)		902,294
U.S. Government-sponsored mortgage-backed securities	482,702		1,600		(64,792)		419,510
Foreign investment	1,500		—		—		1,500
Corporate obligations	7,974		1		(276)		7,699

Total available for sale	$	1,574,023	$	1,826	$	(168,747)	$	1,407,102

The following tables summarize the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity as of June 30, 2026 and December 31, 2025.


	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity at June 30, 2026
U.S. Government-sponsored agency securities	$	313,105	$	—	$	313,105	$	—	$	(43,984)	$	269,121
State and municipal	1,058,396		(245)		1,058,151		489		(138,678)		920,207
U.S. Government-sponsored mortgage-backed securities	536,428		—		536,428		—		(71,813)		464,615

Total held to maturity	$	1,907,929	$	(245)	$	1,907,684	$	489	$	(254,475)	$	1,653,943


	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity at December 31, 2025
U.S. Government-sponsored agency securities	$	324,643	$	—	$	324,643	$	—	$	(46,693)	$	277,950
State and municipal	1,069,653		(245)		1,069,408		868		(137,706)		932,815
U.S. Government-sponsored mortgage-backed securities	577,488		—		577,488		—		(69,966)		507,522

Total held to maturity	$	1,971,784	$	(245)	$	1,971,539	$	868	$	(254,365)	$	1,718,287

Accrued interest on investment securities available for sale and held to maturity at June 30, 2026 and December 31, 2025 of $21.7 million and $21.9 million, respectively, is included in the "Interest receivable" line on the Corporation's Consolidated Condensed Balance Sheets. The total amount of accrued interest is excluded from the amortized cost of available for sale and held to maturity securities presented above.

In determining the allowance for credit losses on investment securities available for sale that are in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement.

For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (loss).

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Adjustments to the allowance are reported in the income statement as a component of the provision for credit losses. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses.

Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality.

The allowance for credit losses on investment securities held to maturity is a contra asset-valuation account that is deducted from the amortized cost basis of investment securities held to maturity to present the net amount expected to be collected. Investment securities held to maturity are charged off against the allowance when deemed uncollectible. Adjustments to the allowance are reported in the income statement as a component of the provision for credit losses.

The Corporation measures expected credit losses on investment securities held to maturity on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities held to maturity from the estimate of credit losses.

With regard to U.S. Government-sponsored agency and U.S. Government-sponsored mortgage-backed securities, all of these securities are issued by a U.S. Government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities.

With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in the Corporation's portfolio have been insignificant. Furthermore, as of June 30, 2026, there were no past due principal and interest payments associated with these securities.

The balance of the allowance for credit losses on investment securities held to maturity remained unchanged at $245,000 as of June 30, 2026 and December 31, 2025 based on applying the long-term historical credit rate, as published by Moody's, for similar rated securities.

On a quarterly basis, the Corporation monitors the credit quality of investment securities held to maturity through the use of credit ratings. The following tables summarize the amortized cost of investment securities held to maturity at June 30, 2026 and December 31, 2025, aggregated by credit quality indicator.


	June 30, 2026
	U.S. Government-sponsored agency securities (1)		State and municipal		U.S. Government-sponsored mortgage-backed securities (1)		Total
Credit Rating:
Aaa	$	313,105	$	73,616	$	536,428	$	923,149
Aa1	—		206,330		—		206,330
Aa2	—		161,487		—		161,487
Aa3	—		195,134		—		195,134
A1	—		59,625		—		59,625
A2	—		10,190		—		10,190
A3	—		10,153		—		10,153

Non-rated	—		341,861		—		341,861
Total	$	313,105	$	1,058,396	$	536,428	$	1,907,929

(1) U.S. Government-sponsored agency securities and U.S. Government-sponsored mortgage-backed securities are included within the Aaa credit rating category due to their explicit or implicit government guarantees, which provide a high level of assurance regarding the timely collection of principal and interest payments.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)


	December 31, 2025
	U.S. Government-sponsored agency securities (1)		State and municipal		U.S. Government-sponsored mortgage-backed securities (1)		Total
Credit Rating:
Aaa	$	324,643	$	75,598	$	577,488	$	977,729
Aa1	—		200,189		—		200,189
Aa2	—		172,127		—		172,127
Aa3	—		192,682		—		192,682
A1	—		59,631		—		59,631
A2	—		13,664		—		13,664
A3	—		6,670		—		6,670

Non-rated	—		349,092		—		349,092
Total	$	324,643	$	1,069,653	$	577,488	$	1,971,784

The following tables summarize, as of June 30, 2026 and December 31, 2025, investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and length of time in a continuous unrealized loss position.


	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Investment securities available for sale at June 30, 2026

U.S. Government-sponsored agency securities	$	31	$	(1)	$	71,708	$	(11,378)	$	71,739	$	(11,379)
State and municipal	88,596		(1,334)		782,596		(93,973)		871,192		(95,307)
U.S. Government-sponsored mortgage-backed securities	45,699		(339)		297,367		(65,212)		343,066		(65,551)
Corporate obligations	985		(15)		6,786		(172)		7,771		(187)
Total investment securities available for sale	$	135,311	$	(1,689)	$	1,158,457	$	(170,735)	$	1,293,768	$	(172,424)


	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Investment securities available for sale at December 31, 2025

U.S. Government-sponsored agency securities	$	—	$	—	$	76,099	$	(11,837)	$	76,099	$	(11,837)
State and municipal	5,468		(11)		861,410		(91,830)		866,878		(91,841)
U.S. Government-sponsored mortgage-backed securities	4,885		(10)		313,353		(64,783)		318,238		(64,793)
Corporate obligations	—		—		6,676		(276)		6,676		(276)
Total investment securities available for sale	$	10,353	$	(21)	$	1,257,538	$	(168,726)	$	1,267,891	$	(168,747)

The following tables summarize investment securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by security type and the number of securities in the portfolio as of the dates indicated.


	Gross Unrealized Losses		Number of Securities
Investment securities available for sale at June 30, 2026

U.S. Government-sponsored agency securities	$	(11,379)	13
State and municipal	(95,307)		594
U.S. Government-sponsored mortgage-backed securities	(65,551)		103
Corporate obligations	(187)		6
Total investment securities available for sale	$	(172,424)	716

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)


	Gross Unrealized Losses		Number of Securities
Investment securities available for sale at December 31, 2025

U.S. Government-sponsored agency securities	$	(11,837)	12
State and municipal	(91,841)		587
U.S. Government-sponsored mortgage-backed securities	(64,793)		89
Corporate obligations	(276)		5
Total investment securities available for sale	$	(168,747)	693

The unrealized losses in the Corporation’s investment portfolio were the result of changes in interest rates and not credit quality. As a result, the Corporation expects to recover the amortized cost basis over the term of the securities. The Corporation does not intend to sell the investments and it is not more likely than not that the Corporation will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity.

Certain investment securities available for sale are reported in the financial statements at an amount less than their historical cost as indicated in the table below.


	June 30, 2026			December 31, 2025
Investment securities available for sale reported at less than historical cost:
Historical cost	$	1,466,192		$	1,436,638
Fair value	1,293,768			1,267,891
Gross unrealized losses	$	(172,424)		$	(168,747)
Percentage of the Corporation's investment securities available for sale in an unrealized loss position	93.5		%	90.1		%

In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy. The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs. From these discussions, the Corporation’s management is comfortable that the classifications are proper. The Corporation has gained confidence in the data for two reasons: (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or losses resulting from the sale of certain securities have proven the data to be accurate over time. Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.

The amortized cost and fair value of investment securities available for sale and held to maturity at June 30, 2026 and December 31, 2025, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately.


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturity Distribution at June 30, 2026
Due in one year or less	$	751	$	747	$	20,113	$	19,993
Due after one through five years	21,701		21,387		109,135		106,569
Due after five through ten years	293,438		272,988		241,143		219,493
Due after ten years	765,023		679,051		1,001,110		843,273
	1,080,913		974,173		1,371,501		1,189,328
U.S. Government-sponsored mortgage-backed securities	474,786		410,219		536,428		464,615

Total investment securities	$	1,555,699	$	1,384,392	$	1,907,929	$	1,653,943


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturity Distribution at December 31, 2025
Due in one year or less	$	—	$	—	$	7,014	$	7,024
Due after one through five years	16,877		16,577		118,912		115,973
Due after five through ten years	241,803		227,493		228,224		210,125
Due after ten years	832,641		743,522		1,040,146		877,643
	1,091,321		987,592		1,394,296		1,210,765
U.S. Government-sponsored mortgage-backed securities	482,702		419,510		577,488		507,522

Total investment securities	$	1,574,023	$	1,407,102	$	1,971,784	$	1,718,287

Securities with a carrying value of approximately $3.1 billion and $3.3 billion were pledged at June 30, 2026 and December 31, 2025, respectively, primarily to secure borrowing capacity at the Federal Reserve Discount Window, as well as certain deposits, securities sold under agreements to repurchase, and for other purposes as permitted or required by law.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

The book value of securities pledged and available under agreements to repurchase amounted to $120.4 million at June 30, 2026 and $119.8 million at December 31, 2025.

Gross gains and losses on the sales of investment securities available for sale for the three and six months ended June 30, 2026 and 2025 are shown below.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Sales of investment securities available for sale:
Gross gains	$	—	$	—	$	—	$	—
Gross losses	—		(1)		—		(8)

Net losses on sales of investment securities available for sale	$	—	$	(1)	$	—	$	(8)

NOTE 4

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loan Portfolio and Credit Quality

The Corporation's primary lending focus is small business and middle market commercial, commercial real estate, public finance and residential real estate, which results in portfolio diversification. The following tables show the composition of the loan portfolio and credit quality characteristics by collateral classification, excluding loans held for sale.

The following table illustrates the composition of the Corporation’s loan portfolio by loan class as of the dates indicated.


	June 30, 2026		December 31, 2025

Commercial and industrial loans	$	4,720,441	$	4,478,282
Agricultural land, production and other loans to farmers	323,348		283,125
Real estate loans:
Construction	874,419		804,775
Commercial real estate, non-owner occupied	3,271,620		2,338,666
Commercial real estate, owner occupied	1,368,627		1,237,100
Residential	2,361,480		2,420,310
Home equity	1,118,662		710,980
Individuals' loans for household and other personal expenditures	149,878		155,436
Public finance and other commercial loans	1,342,262		1,363,033
Loans	$	15,530,737	$	13,791,707

Credit Quality

As part of the ongoing monitoring of the credit quality of the Corporation's loan portfolio, management tracks certain credit quality indicators including trends related to: (i) the level of criticized commercial loans, (ii) net charge-offs, (iii) nonperforming loans, (iv) covenant failures and (v) the general national and local economic conditions.

The Corporation utilizes a risk grading of pass, special mention, substandard, doubtful and loss to assess the overall credit quality of large commercial loans. All large commercial credit grades are reviewed at a minimum of once a year for pass grade loans. Loans with grades below pass are reviewed more frequently depending on the grade. A description of the general characteristics of these grades is as follows:

•Pass - Loans that are considered to be of acceptable credit quality.

•Special Mention - Loans which possess some credit deficiency or potential weakness, which deserves close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Corporation's credit position at some future date. Special mention assets are not adversely classified and do not expose the Corporation to sufficient risk to warrant adverse classification.

•Substandard - Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

•Doubtful - Loans that have all of the weaknesses of those classified as Substandard. However, based on existing facts, conditions and values, these weaknesses make full collection of principal highly questionable and improbable.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

•Loss – Loans that are considered uncollectible and of such little value that continuing to carry them as an asset is not warranted. Loans will be classified as Loss when it is neither practical nor desirable to defer charging-off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

The following tables summarize the risk grading of the Corporation’s loan portfolio and gross charge-offs by loan class and by year of origination for the periods indicated. Consumer loans are not risk graded. For the purposes of this disclosure, consumer loans are classified in the following manner: loans that are less than 30 days past due are Pass, loans 30-89 days past due are Special Mention and loans greater than 89 days past due are Substandard. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.


	June 30, 2026
	Term Loans (amortized cost basis by origination year)
	2026		2025		2024		2023		2022		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial and industrial loans
Pass	$	466,817	$	1,182,789	$	585,824	$	198,497	$	114,033	$	199,661	$	1,667,871	$	429	$	4,415,921
Special Mention	214		4,037		17,049		18,538		8,018		6,876		84,008		—		138,740
Substandard	4,841		2,868		24,845		3,847		4,725		28,646		51,727		—		121,499
Doubtful	—		27,121		590		—		—		11,256		5,314		—		44,281

Total Commercial and industrial loans	471,872		1,216,815		628,308		220,882		126,776		246,439		1,808,920		429		4,720,441
Current period gross charge-offs	—		3,294		633		733		1,807		4,764		—		—		11,231
Agricultural land, production and other loans to farmers
Pass	33,420		62,738		24,635		20,446		27,322		73,048		73,820		—		315,429
Special Mention	—		400		—		—		—		—		2,250		—		2,650
Substandard	—		600		2,157		88		16		1,451		957		—		5,269


Total Agricultural land, production and other loans to farmers	33,420		63,738		26,792		20,534		27,338		74,499		77,027		—		323,348

Real estate loans:
Construction
Pass	75,598		344,291		281,794		100,568		16,976		15,514		18,110		—		852,851
Special Mention	—		9,536		—		—		35		—		—		—		9,571
Substandard	—		—		—		—		11,667		330		—		—		11,997


Total Construction	75,598		353,827		281,794		100,568		28,678		15,844		18,110		—		874,419

Commercial real estate, non-owner occupied
Pass	226,178		523,756		299,785		323,063		535,571		1,140,422		28,697		—		3,077,472
Special Mention	—		9,128		8,730		39,842		3,808		29,318		60		—		90,886
Substandard	—		54,243		29,788		5,856		5,351		8,024		—		—		103,262


Total Commercial real estate, non-owner occupied	226,178		587,127		338,303		368,761		544,730		1,177,764		28,757		—		3,271,620
Current period gross charge-offs	—		3,468		—		—		—		—		—		—		3,468
Commercial real estate, owner occupied
Pass	144,339		282,324		144,262		125,596		145,183		408,099		46,685		—		1,296,488
Special Mention	395		2,591		3,127		5,440		6,033		11,074		549		—		29,209
Substandard	1,940		3,267		16,169		2,613		9,048		9,600		293		—		42,930


Total Commercial real estate, owner occupied	146,674		288,182		163,558		133,649		160,264		428,773		47,527		—		1,368,627
Current period gross charge-offs	—		—		—		57		5		211		—		—		273
Residential
Pass	169,892		312,355		179,954		363,070		508,030		772,020		3,660		768		2,309,749
Special Mention	—		900		1,141		4,266		7,655		9,320		—		25		23,307
Substandard	—		1,428		1,136		4,962		6,975		10,042		3,193		—		27,736
Doubtful	—		—		234		—		—		108		346		—		688

Total Residential	169,892		314,683		182,465		372,298		522,660		791,490		7,199		793		2,361,480
Current period gross charge-offs	—		137		22		279		311		279		—		—		1,028
Home equity
Pass	1,275		8,396		3,806		4,615		20,353		50,168		1,003,997		8,765		1,101,375
Special Mention	—		38		9		—		183		473		11,454		35		12,192
Substandard	—		—		—		659		53		701		3,474		208		5,095


Total Home Equity	1,275		8,434		3,815		5,274		20,589		51,342		1,018,925		9,008		1,118,662
Current period gross charge-offs	—		—		6		7		24		268		—		—		305
Individuals' loans for household and other personal expenditures
Pass	22,454		29,693		13,789		9,634		15,038		5,239		51,820		1,098		148,765
Special Mention	5		259		133		282		67		58		309		—		1,113



Total Individuals' loans for household and other personal expenditures	22,459		29,952		13,922		9,916		15,105		5,297		52,129		1,098		149,878
Current period gross charge-offs	37		335		349		216		85		89		—		—		1,111
Public finance and other commercial loans
Pass	25,126		98,321		142,871		55,548		203,497		579,843		236,845		—		1,342,051

Substandard	—		—		—		—		—		211		—		—		211


Total Public finance and other commercial loans	25,126		98,321		142,871		55,548		203,497		580,054		236,845		—		1,342,262

Loans	$	1,172,494	$	2,961,079	$	1,781,828	$	1,287,430	$	1,649,637	$	3,371,502	$	3,295,439	$	11,328	$	15,530,737
Total current period gross charge-offs	$	37	$	7,234	$	1,010	$	1,292	$	2,232	$	5,611	$	—	$	—	$	17,416

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)


	December 31, 2025
	Term Loans (amortized cost basis by origination year)
	2025		2024		2023		2022		2021		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial and industrial loans
Pass	$	1,518,095	$	710,695	$	236,596	$	115,775	$	69,834	$	65,800	$	1,540,939	$	—	$	4,257,734
Special Mention	9,552		34,613		7,683		3,246		4,041		479		40,986		—		100,600
Substandard	1,587		17,140		2,671		2,980		11,710		19,116		62,556		—		117,760
Doubtful	401		582		—		—		—		—		1,205		—		2,188

Total Commercial and industrial loans	1,529,635		763,030		246,950		122,001		85,585		85,395		1,645,686		—		4,478,282
Current period gross charge-offs	7,981		1,348		2,434		264		3,685		1,964		—		—		17,676
Agricultural land, production and other loans to farmers
Pass	62,959		18,469		20,924		24,465		22,246		42,529		80,039		—		271,631
Special Mention	590		1,636		22		499		—		1,478		1,182		—		5,407
Substandard	600		2,165		16		—		—		2,085		1,221		—		6,087


Total Agricultural land, production and other loans to farmers	64,149		22,270		20,962		24,964		22,246		46,092		82,442		—		283,125

Real estate loans:
Construction
Pass	231,041		313,838		100,587		17,515		921		9,954		15,261		—		689,117
Special Mention	41,580		6,104		—		—		8,683		—		—		—		56,367
Substandard	34,176		12,889		641		11,585		—		—		—		—		59,291


Total Construction	306,797		332,831		101,228		29,100		9,604		9,954		15,261		—		804,775
Current period gross charge-offs	—		63		—		—		1		—		—		—		64
Commercial real estate, non-owner occupied
Pass	482,587		259,106		292,161		258,662		367,482		458,340		31,841		—		2,150,179
Special Mention	59,566		36,106		340		3,633		2,308		4,715		100		—		106,768
Substandard	57,489		10,496		5,119		5,171		2,701		662		81		—		81,719


Total Commercial real estate, non-owner occupied	599,642		305,708		297,620		267,466		372,491		463,717		32,022		—		2,338,666
Current period gross charge-offs	—		—		—		451		—		16		—		—		467
Commercial real estate, owner occupied
Pass	332,121		136,005		129,030		141,679		180,180		219,914		33,983		—		1,172,912
Special Mention	883		16,592		1,426		4,922		4,838		1,075		443		—		30,179
Substandard	—		13,510		5,328		5,732		1,061		7,826		260		—		33,717
Doubtful	—		292		—		—		—		—		—		—		292

Total Commercial real estate, owner occupied	333,004		166,399		135,784		152,333		186,079		228,815		34,686		—		1,237,100
Current period gross charge-offs	—		243		152		—		—		4		—		—		399
Residential
Pass	310,019		167,128		389,574		613,787		352,662		528,875		7,188		46		2,369,279
Special Mention	345		1,312		6,116		9,565		5,993		4,926		346		—		28,603
Substandard	328		1,411		4,517		7,145		4,840		3,919		268		—		22,428


Total Residential	310,692		169,851		400,207		630,497		363,495		537,720		7,802		46		2,420,310
Current period gross charge-offs	—		114		814		737		102		163		—		—		1,930
Home equity
Pass	10,173		3,020		3,431		21,442		42,749		10,194		608,020		1,470		700,499
Special Mention	—		674		—		297		447		59		5,097		329		6,903
Substandard	60		—		—		90		304		377		2,637		110		3,578


Total Home Equity	10,233		3,694		3,431		21,829		43,500		10,630		615,754		1,909		710,980
Current period gross charge-offs	—		92		8		653		563		204		—		—		1,520
Individuals' loans for household and other personal expenditures
Pass	40,478		16,525		12,010		19,038		5,067		3,961		55,751		1,649		154,479
Special Mention	108		139		174		113		152		16		115		140		957



Total Individuals' loans for household and other personal expenditures	40,586		16,664		12,184		19,151		5,219		3,977		55,866		1,789		155,436
Current period gross charge-offs	307		618		612		396		149		83		—		—		2,165
Public finance and other commercial loans
Pass	134,004		144,742		52,795		198,964		185,906		407,974		238,648		—		1,363,033




Total Public finance and other commercial loans	134,004		144,742		52,795		198,964		185,906		407,974		238,648		—		1,363,033

Loans	$	3,328,742	$	1,925,189	$	1,271,161	$	1,466,305	$	1,274,125	$	1,794,274	$	2,728,167	$	3,744	$	13,791,707
Total current period gross charge-offs	$	8,288	$	2,478	$	4,020	$	2,501	$	4,500	$	2,434	$	—	$	—	$	24,221

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Total past due loans equaled $154.6 million as of June 30, 2026 representing a $23.7 million increase from $130.9 million at December 31, 2025. At June 30, 2026, 30-59 days past due increased $3.1 million from December 31, 2025 as commercial and industrial, commercial real estate, owner occupied, and home equity loan classes increased $8.9 million, $5.9 million, and $4.0 million, respectively. The increase was partially offset by a decrease in the commercial real estate, non-owner occupied and residential loan classes of $13.0 million and $2.3 million, respectively. At June 30, 2026, 60-89 days past due increased $11.4 million from December 31, 2025 as the commercial real estate, non-owner occupied, construction, and home equity loan classes increased $6.2 million, $5.8 million, and $1.8 million, respectively. The increase was partially offset by a decrease in the residential loan class of $2.2 million. At June 30, 2026, 90 days or more past due increased $9.2 million from December 31, 2025 as the commercial real estate, non-owner occupied, commercial real estate, owner occupied and residential loan classes increased $12.9 million, $5.0 million and $3.3 million, respectively. The increase was partially offset by a decrease in the construction loan class of $13.9 million. The tables below show a past due aging of the Corporation’s loan portfolio, by loan class, as of the dates indicated.


	June 30, 2026
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total		Loans > 90 Days or More Past Due and Accruing
Commercial and industrial loans	$	4,693,372	$	16,064	$	1,107	$	9,898	$	4,720,441	$	3,444
Agricultural land, production and other loans to farmers	322,235		—		138		975		323,348		976
Real estate loans:
Construction	858,706		34		5,765		9,914		874,419		130
Commercial real estate, non-owner occupied	3,245,491		6,149		6,549		13,431		3,271,620		4,745
Commercial real estate, owner occupied	1,348,570		10,223		2,403		7,431		1,368,627		410
Residential	2,314,948		14,907		7,372		24,253		2,361,480		9
Home equity	1,101,834		8,759		3,219		4,850		1,118,662		24
Individuals' loans for household and other personal expenditures	148,767		654		457		—		149,878		—

Public finance and other commercial loans	1,342,262		—		—		—		1,342,262		—
Loans	$	15,376,185	$	56,790	$	27,010	$	70,752	$	15,530,737	$	9,738


	December 31, 2025
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total		Loans > 90 Days or More Past Due and Accruing
Commercial and industrial loans	$	4,459,842	$	7,194	$	1,160	$	10,086	$	4,478,282	$	313
Agricultural land, production and other loans to farmers	282,411		480		—		234		283,125		—
Real estate loans:
Construction	780,999		—		—		23,776		804,775		1,295
Commercial real estate, non-owner occupied	2,318,624		19,125		345		572		2,338,666		—
Commercial real estate, owner occupied	1,227,448		4,295		2,880		2,477		1,237,100		—
Residential	2,372,637		17,182		9,536		20,955		2,420,310		434
Home equity	701,360		4,717		1,427		3,476		710,980		—
Individuals' loans for household and other personal expenditures	154,479		738		219		—		155,436		—

Public finance and other commercial loans	1,363,033		—		—		—		1,363,033		—
Loans	$	13,660,833	$	53,731	$	15,567	$	61,576	$	13,791,707	$	2,042

Loans are reclassified to a nonaccruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in prior years, if any, is charged to the allowance for credit losses. Payments subsequently received on nonaccrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

The following table summarizes the Corporation’s nonaccrual loans by loan class as of the dates indicated. At June 30, 2026, nonaccrual loans totaled $118.2 million, an increase of $46.4 million from December 31, 2025, primarily attributable to the placement of two commercial lending relationships, totaling $41.8 million, on nonaccrual status during the second quarter of 2026.


	June 30, 2026				December 31, 2025
	Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Losses		Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Losses
Commercial and industrial loans	$	51,072	$	575	$	10,548	$	2,174
Agricultural land, production and other loans to farmers	192		—		250		—
Real estate loans:
Construction	9,775		9,775		22,481		22,482
Commercial real estate, non-owner occupied	8,857		—		837		—
Commercial real estate, owner occupied	8,415		6,288		3,705		3,188
Residential	33,205		155		29,774		—
Home equity	6,581		560		4,158		—
Individuals' loans for household and other personal expenditures	18		—		20		—
Public finance and other commercial loans	88		—		—		—
Loans	$	118,203	$	17,353	$	71,773	$	27,844

Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. There was no interest income recognized on nonaccrual loans for the three and six months ended June 30, 2026 or 2025.

Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs, if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings, and/or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on the age and quality of the information and current market conditions.

The tables below present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses. The total collateral dependent loan balance increased $19.9 million from December 31, 2025, primarily related to increases of $24.5 million and $5.1 million in the commercial and industrial and commercial real estate, owner occupied loan classes, respectively. The increase was partially offset by a decrease of $12.4 million in the construction loan class. The total related allowance balance increased $10.1 million from December 31, 2025, primarily related to an increase of $10.9 million in the commercial and industrial loan class. The increase was partially offset by a decrease of $2.1 million in the commercial real estate, non-owner occupied loan class.


	June 30, 2026
	Commercial Real Estate		Residential Real Estate		Business Assets and Other		Total		Allowance on Collateral Dependent Loans
Commercial and industrial loans	$	—	$	—	$	62,589	$	62,589	$	24,080

Real estate loans:
Construction	—		10,060		—		10,060		167
Commercial real estate, non-owner occupied	16,479		—		—		16,479		1,819
Commercial real estate, owner occupied	10,626		—		—		10,626		934
Residential	—		1,864		—		1,864		318
Home equity	—		696		—		696		17


Loans	$	27,105	$	12,620	$	62,589	$	102,314	$	27,335


	December 31, 2025
	Commercial Real Estate		Residential Real Estate		Business Assets and Other		Total		Allowance on Collateral Dependent Loans
Commercial and industrial loans	$	—	$	—	$	38,063	$	38,063	$	13,157

Real estate loans:
Construction	—		22,482		—		22,482		—
Commercial real estate, non-owner occupied	15,161		—		—		15,161		3,938
Commercial real estate, owner occupied	5,511		—		—		5,511		—
Residential	—		1,023		—		1,023		166
Home equity	—		145		—		145		19


Loans	$	20,672	$	23,650	$	38,063	$	82,385	$	17,280

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

In certain situations, the Corporation may modify the terms of a loan to a debtor experiencing financial difficulty. The modifications may include principal forgiveness, interest rate reductions, payment delays, term extensions or combinations of these modifications. The following tables present the amortized cost basis of loans at June 30, 2026 and 2025 that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2026 and 2025, by class and by type of modification. For the three and six months ended June 30, 2026 and 2025, the tables below exclude loan modifications considered insignificant. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.


	Three Months Ended June 30, 2026
	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Term Extension		Combination Payment Delay & Term Extension		% of Total Class of Financing Receivable
Commercial and industrial loans	$	2,950	$	—	0.06	%

Real estate loans:


Commercial real estate, owner occupied	2,922		—		0.21	%

Home equity	—		374		0.03	%


Total	$	5,872	$	374


	Three Months Ended June 30, 2025
	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Payment Delay		Term Extension		Interest Rate Reduction		Combination Payment Delay & Term Extension		Combination Interest Rate Reduction, Term Extension, & Payment Delay		% of Total Class of Financing Receivable
Commercial and industrial loans	$	—	$	3,691	$	—	$	—	$	—	0.08	%

Real estate loans:

Commercial real estate, non-owner occupied	—		14,112		38,244		6,008		—		2.69	%

Residential	459		—		—		—		1,286		0.07	%



Total	$	459	$	17,803	$	38,244	$	6,008	$	1,286



	Six Months Ended June 30, 2026
	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Payment Delay		Term Extension		Combination Payment Delay & Term Extension		Combination Interest Rate Reduction & Term Extension		Combination Interest Rate Reduction, Term Extension, & Payment Delay		% of Total Class of Financing Receivable
Commercial and industrial loans	$	7,217	$	8,647	$	14,540	$	—	$	—	0.64	%

Real estate loans:
Construction	—		1,892		—		—		—		0.22	%
Commercial real estate, non-owner occupied	5,092		1,560		—		962		—		0.23	%
Commercial real estate, owner occupied	—		2,922		—		—		—		0.21	%
Residential	282		—		—		—		357		0.03	%
Home Equity	—		—		374		—		—		0.03	%


Total	$	12,591	$	15,021	$	14,914	$	962	$	357



	Six Months Ended June 30, 2025
	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Payment Delay		Term Extension		Interest Rate Reduction		Combination Payment Delay & Term Extension		Combination Interest Rate Reduction, Term Extension, & Payment Delay		% of Total Class of Financing Receivable
Commercial and industrial loans	$	—	$	7,504	$	—	$	—	$	—	0.17	%

Real estate loans:

Commercial real estate, non-owner occupied	—		14,112		38,244		6,008		—		2.69	%

Residential	725		—		—		—		1,286		0.08	%



Total	$	725	$	21,616	$	38,244	$	6,008	$	1,286

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended June 30, 2026 and 2025.

Three Months Ended June 30, 2026

Financial Effect of Loan Modifications

Term Extension

Combination Payment Delay & Term Extension

Commercial and industrial loans

Extended loans by a weighted average of 75 months.

Real estate loans:

Commercial real estate, owner occupied

Extended loans by a weighted average of 12 months.

Home equity

Provided payment deferrals with weighted average delayed amounts of $63 and extended loans by a weighted average of 60 months.

Three Months Ended June 30, 2025

Financial Effect of Loan Modifications

Payment Delay

Term Extension

Interest Rate Reduction

Combination Interest Rate Reduction & Term Extension

Combination Interest Rate Reduction, Term Extension & Payment Delay

Commercial and industrial loans

Extended loans by a weighted average of 4 months.

Real estate loans:

Commercial real estate, non-owner occupied

Extended loans by a weighted average of 6 months.

Reduced the weighted average contractual interest rate from 7.58% to 6.93%.

Reduced the weighted average contractual interest rate from 14.00% to 7.00% and extended loans by a weighted average of 16 months.

Residential

Provided payment deferrals with weighted average delayed amounts of $36.

Reduced the weighted average contractual interest rate from 4.50% to 2.50%, extended loans by a weighted average of 68 months, and provided payment deferrals with weighted average delayed amounts of $8.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Six Months Ended June 30, 2026

Financial Effect of Loan Modifications

Payment Delay

Term Extension

Combination Payment Delay & Term Extension

Combination Interest Rate Reduction & Term Extension

Combination Interest Rate Reduction, Term Extension & Payment Delay

Commercial and industrial loans

Provided payment deferrals with weighted average delayed amounts of $374.

Extended loans by a weighted average of 30 months.

Provided payment deferrals with weighted average delayed amounts of $909 and extended loans by a weighted average of 6 months.

Real estate loans:

Construction

Extended loans by a weighted average of 12 months.

Commercial real estate, non-owner occupied

Provided payment deferrals with weighted average delayed amounts of $67.

Extended loans by a weighted average of 6 months.

Reduced the weighted average contractual interest rate from 7.16% to 5.86% and extended loans by a weighted average of 60 months.

Commercial real estate, owner occupied

Extended loans by a weighted average of 12 months.

Residential

Provided payment deferrals with weighted average delayed amounts of $19.

Reduced the weighted average contractual interest rate from 6.75% to 2.00%, extended loans by a weighted average of 120 months, and provided payment deferrals with weighted average delayed amounts of $13.

Home equity

Provided payment deferrals with weighted average delayed amounts of $63 and extended loans by a weighted average of 60 months.

Six Months Ended June 30, 2025

Financial Effect of Loan Modifications

Payment Delay

Term Extension

Interest Rate Reduction

Combination Interest Rate Reduction & Term Extension

Combination Interest Rate Reduction, Term Extension & Payment Delay

Commercial and industrial loans

Extended loans by a weighted average of 4 months.

Real estate loans:

Commercial real estate, non-owner occupied

Extended loans by a weighted average of 6 months.

Reduced the weighted average contractual interest rate from 7.58% to 6.93%.

Reduced the weighted average contractual interest rate from 14.00% to 7.00%. Extended loans by a weighted average of 16 months.

Residential

Provided payment deferrals with weighted average delayed amounts of $25.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

The Corporation closely monitors the performance of financial difficulty loan modifications to understand the effectiveness of its efforts. The following tables present the performance of financial difficulty loan modifications in the twelve months following modification.


	June 30, 2026
	Current		30-59 Days Past Due		90+ Days Past Due		Total
Commercial and industrial loans	$	32,911	$	—	$	359	$	33,270

Real estate loans:
Construction	1,892		—		—		1,892
Commercial real estate, non-owner occupied	4,044		5,093		8,656		17,793
Commercial real estate, owner occupied	2,922		—		—		2,922
Residential	1,872		—		—		1,872
Home equity	374		—		—		374


Total	$	44,015	$	5,093	$	9,015	$	58,123


	June 30, 2025
	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Commercial and industrial loans	$	14,186	$	2,831	$	448	$	501	$	17,966
Agricultural land, production and other loans to farmers	2,194		—		—		—		2,194
Real estate loans:
Construction	6,425		—		—		—		6,425
Commercial real estate, non-owner occupied	58,364		—		—		—		58,364
Commercial real estate, owner occupied	2,153		—		—		3,573		5,726
Residential	3,717		576		412		702		5,407
Home equity	138		—		—		—		138


Total	$	87,177	$	3,407	$	860	$	4,776	$	96,220

During the six months ended June 30, 2026 and 2025, there were payment defaults of $9.0 million and $4.8 million, respectively, on loans to borrowers whose loans were modified due to financial difficulties within the previous twelve months. The payment defaults did not materially impact the allowance for credit losses on loans.

Upon the Corporation's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged-off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

Purchased Credit-Deteriorated Loans

The Corporation acquired First Savings on February 1, 2026 and performed an evaluation of the acquired loan portfolio, identifying loans that had more-than-insignificant deterioration in credit quality since origination at the acquisition date. The carrying amount of those loans is shown in the table below:


	First Savings
Purchase price of PCD loans at acquisition	$	14,869
CECL Day 1 PCD ACL - loans	7,067
Par value of acquired PCD loans at acquisition	$	21,936

Allowance for Credit Losses on Loans

The Allowance for Credit Losses on Loans ("ACL - Loans") is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over the contractual term. The ACL - Loans is adjusted by the provision for credit losses, which is reported in earnings, and reduced by charge-offs for loans, net of recoveries. Provision for credit losses on loans reflects the totality of actions taken on all loans for a particular period including any necessary increases or decreases in the allowance related to changes in credit loss expectations associated with specific loans or pools of loans. Loans are charged-off against the allowance when the uncollectibility of the loan is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance represents the Corporation’s best estimate of current expected credit losses on loans using relevant available information from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The Current Expected Credit Losses ("CECL") calculation is performed and evaluated quarterly and losses are estimated over the expected life of the loan. The level of the ACL - Loans is believed to be adequate to absorb all expected future losses inherent in the loan portfolio at the measurement date.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

In calculating the ACL - Loans, the loan portfolio was pooled into twelve loan segments with similar risk characteristics. Common characteristics include the type or purpose of the loan, underlying collateral and historical/expected credit loss patterns. In developing the loan segments, the Corporation analyzed the degree of correlation in how loans within each portfolio respond when subjected to varying economic conditions and scenarios as well as other portfolio stress factors.

The expected credit losses are measured over the life of each loan segment utilizing the Probability of Default / Loss Given Default methodology combined with economic forecast models to estimate the current expected credit loss inherent in the loan portfolio. This approach is also leveraged to estimate the expected credit losses associated with unfunded loan commitments incorporating expected utilization rates.

The Corporation sub-segmented certain commercial portfolios by risk level and certain consumer portfolios by delinquency status where appropriate. The Corporation utilized a four-quarter reasonable and supportable economic forecast period followed by a six-quarter, straight-line reversion period to the historical macroeconomic mean for the remaining life of the loans. Econometric modeling was performed using historical default rates and a selection of economic forecast scenarios published by Moody’s to develop a range of estimated credit losses for which to

determine the best credit loss estimate within. Macroeconomic factors utilized in the modeling process include the national unemployment rate, BBB US corporate index, commercial real estate price index and the home price index.

The Corporation qualitatively adjusts model results for risk factors that are not inherently considered in the quantitative modeling process, but are nonetheless relevant in assessing the expected credit losses within the loan portfolio. These adjustments may increase or decrease the estimate of expected credit losses based upon the assessed level of risk for each qualitative factor. The various risks that may be considered in making qualitative adjustments include, among other things, the impact of (i) changes in the nature and volume of the loan portfolio, (ii) changes in the existence, growth and effect of any concentrations in credit, (iii) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, charge-offs, and recoveries, (iv) changes in the quality of the credit review function, (v) changes in the experience, ability and depth of lending, investment, collection and other relevant management staff, (vi) changes in the volume and severity of past due financial assets, the volume of the nonaccrual assets, and the volume and severity of adversely classified or graded assets, (vii) the value of underlying collateral for loans that are not collateral dependent, and (viii) other environmental factors such as regulatory, legal and technological considerations, as well as competition and changes in the economic and business conditions that affect the collectability of financial assets.

In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within the loan segments. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific reserve allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The fair value of collateral supporting collateral dependent loans is evaluated on a quarterly basis.

The risk characteristics of the Corporation’s portfolio segments are as follows:

Commercial

Commercial lending is primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the tangible assets being financed such as equipment or real estate or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Other loans may be unsecured, secured but under-collateralized or otherwise made on the basis of the enterprise value of an organization. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. The Corporation monitors commercial real estate loans based on collateral and risk grade criteria, as well as the levels of owner-occupied versus non-owner occupied loans.

Construction

Construction loans are underwritten utilizing a combination of tools and techniques including feasibility and market studies, independent appraisals and appraisal reviews, absorption and interest rate sensitivity analysis as well as the financial analysis of the developer and all guarantors. Construction loans are monitored by either in house or third party inspectors limiting advances to a percentage of costs or stabilized project value. These loans frequently involve the disbursement of significant funds with the repayment dependent upon the successful completion and, where necessary, the future stabilization of the project. The predominant inherent risk of this portfolio is associated with the borrower's ability to successfully complete a project on time, within budget and stabilize the project as originally projected.

Consumer and Residential

With respect to residential loans that are secured by 1-4 family residences, which are typically owner occupied, the Corporation generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans, such as small installment loans and certain lines of credit, are unsecured. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers and can also be impacted by changes in property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

The ACL - Loans increased $46.0 million from December 31, 2025 to $241.6 million at June 30, 2026. Net charge-offs totaled $3.9 million and $14.2 million during the three and six months ended June 30, 2026, respectively. Provision expense of $33.0 million and $37.9 million was recorded during the three and six months ended June 30, 2026, respectively. The following tables summarize changes in the allowance for credit losses by loan segment for the three and six months ended June 30, 2026 and 2025.


	Three Months Ended June 30, 2026
	Commercial		Commercial Real Estate		Construction		Consumer & Residential		Total
Allowance for credit losses - loans
Balances, March 31, 2026	$	106,894	$	56,721	$	6,346	$	42,559	$	212,520
Provision for credit losses - loans	31,220		1,772		(1,813)		1,821		33,000


Recoveries on loans	1,269		5		1		1,057		2,332
Loans charged off	(1,358)		(3,547)		—		(1,332)		(6,237)
Balances, June 30, 2026	$	138,025	$	54,951	$	4,534	$	44,105	$	241,615


	Three Months Ended June 30, 2025
	Commercial		Commercial Real Estate		Construction		Consumer & Residential		Total
Allowance for credit losses - loans
Balances, March 31, 2025	$	99,982	$	46,336	$	11,541	$	34,172	$	192,031
Provision for credit losses - loans	(406)		(83)		(2,735)		8,824		5,600


Recoveries on loans	1,514		98		—		324		1,936
Loans charged off	(2,106)		(74)		(63)		(2,008)		(4,251)
Balances, June 30, 2025	$	98,984	$	46,277	$	8,743	$	41,312	$	195,316



	Six Months Ended June 30, 2026
	Commercial		Commercial Real Estate		Construction		Consumer & Residential		Total
Allowance for credit losses - loans
Balances, December 31, 2025	$	104,435	$	45,541	$	5,470	$	40,151	$	195,597
Provision for credit losses - loans	38,384		4,346		(2,141)		(2,689)		37,900
CECL Day 1 PSL ACL - loans	2,293		5,357		562		7,000		15,212
CECL Day 1 PCD ACL - loans	2,488		3,368		641		570		7,067
Recoveries on loans	1,656		80		2		1,517		3,255
Loans charged off	(11,231)		(3,741)		—		(2,444)		(17,416)
Balances, June 30, 2026	$	138,025	$	54,951	$	4,534	$	44,105	$	241,615



	Six Months Ended June 30, 2025
	Commercial		Commercial Real Estate		Construction		Consumer & Residential		Total
Allowance for credit losses - loans
Balances, December 31, 2024	$	94,757	$	51,099	$	9,784	$	37,117	$	192,757
Provision for credit losses - loans	8,748		(4,450)		(978)		6,480		9,800


Recoveries on loans	2,452		103		—		637		3,192
Loans charged off	(6,973)		(475)		(63)		(2,922)		(10,433)
Balances, June 30, 2025	$	98,984	$	46,277	$	8,743	$	41,312	$	195,316

Off-Balance Sheet Arrangements, Commitments And Contingencies

In the normal course of business, the Corporation has entered into off-balance sheet financial instruments which include commitments to extend credit and standby letters of credit. Commitments to extend credit are usually the result of lines of credit granted to existing borrowers under agreements that the total outstanding indebtedness will not exceed a specific amount during the term of the indebtedness. Typical borrowers are commercial customers that use lines of credit to supplement their treasury management functions, and thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing for their cash flows. Other typical lines of credit are related to home equity loans granted to customers. Commitments to extend credit generally have fixed expiration dates or other termination clauses that may require a fee.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Standby letters of credit are generally issued on behalf of an applicant (the Corporation’s customer) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary. Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit. The standby letter of credit would permit the beneficiary to obtain payment from the Corporation under certain prescribed circumstances. Subsequently, the Corporation would seek reimbursement from the applicant pursuant to the terms of the standby letter of credit.

The Corporation typically follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments. Each customer’s creditworthiness is typically evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management’s credit evaluation of the customer. Collateral held varies but may include cash, real estate, marketable securities, accounts receivable, inventory, equipment and personal property. The contractual amounts of these commitments are not reflected in the consolidated financial statements and only amounts drawn upon would be reflected in the future. Since many of the commitments are expected to expire without being drawn upon, the contractual amounts do not necessarily represent future cash requirements. However, should the commitments be drawn upon and should the Corporation’s customers default on their resulting obligation to the Corporation, the maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those commitments.

Financial instruments with off-balance sheet risk were as follows:


	June 30, 2026		December 31, 2025
Amounts of commitments:
Loan commitments to extend credit	$	5,971,657	$	5,586,510
Standby letters of credit	$	93,827	$	73,997

The Corporation maintains an accrual for credit losses on off-balance sheet commitments using the CECL methodology. There was no additional allowance for credit losses associated with off-balance sheet commitments during the three months ended June 30, 2026. The First Savings acquisition added $0.5 million of Day 1 allowance for credit losses associated with off-balance sheet commitments during the six months ended June 30, 2026. There was no provision for credit losses on unfunded commitments during the three and six months ended June 30, 2025. This reserve level remains appropriate and is reported in "Other liabilities" as of June 30, 2026 and December 31, 2025 in the Consolidated Condensed Balance Sheets.



	Three Months Ended				Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Balance, beginning of period	$	18,500	$	18,000	$	18,000	$	18,000


Day 1 allowance for credit losses - unfunded commitments	—		—		500		—
Balance, end of period	$	18,500	$	18,000	$	18,500	$	18,000

Loans Held for Sale

Loans held for sale at June 30, 2026 and December 31, 2025, were $77.9 million and $20.1 million, respectively. The increase in the loans held for sale balance is due to the First Savings acquisition. In March 2026, management approved a plan to sell a pool of performing residential mortgage loans with a principal balance totaling $357.0 million. At the time of the decision, all loans included in the pool were current and performing in accordance with their contractual terms. As a result of the decision to sell, the loan pool was reclassified from held for investment to held for sale and the Corporation recognized a $29.8 million loss during the first quarter. During the second quarter of 2026, the Corporation sold $271.1 million of mortgage loans and transferred $47.1 million of mortgage loans back to held for investment, as those loans were no longer expected to be sold.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 5

GOODWILL AND OTHER INTANGIBLES

Goodwill is recorded on the acquisition date of an entity. The Corporation has up to one year after the acquisition date, the measurement period, to record subsequent adjustments to goodwill for provisional amounts recorded at the acquisition date. The First Savings acquisition on February 1, 2026 resulted in $76.2 million of goodwill. Details regarding the First Savings acquisition are discussed in NOTE 2. ACQUISITIONS of these Notes to Consolidated Condensed Financial Statements. The changes in carrying basis of goodwill are noted below.



	2026		2025
Balance, January 1	$	712,002	$	712,002
Goodwill acquired	76,184		—


Balance, June 30	$	788,186	$	712,002

Core deposit intangibles and other intangibles are recorded on the acquisition date of an entity. The Corporation has up to one year after the acquisition date, the measurement period, to record subsequent adjustments to these intangibles for provisional amounts recorded at the acquisition date. The First Savings acquisition resulted in recognition of a $29.4 million core deposit intangible and $0.8 million of other intangibles related to non-compete agreements. Details regarding the First Savings acquisition are discussed in NOTE 2. ACQUISITIONS of these Notes to Consolidated Condensed Financial Statements. The carrying basis and accumulated amortization of recognized core deposit intangibles and other intangibles are noted below.


	June 30, 2026		December 31, 2025
Gross carrying amount	$	153,465	$	123,285



Accumulated amortization	(114,493)		(109,485)

Total core deposit and other intangibles	$	38,972	$	13,800

The core deposit intangibles and other intangibles are being amortized primarily on an accelerated basis over their estimated useful lives, ranging from one to ten years. Intangible amortization expense for the three and six months ended June 30, 2026 was $2.7 million and $5.0 million, respectively. This compared to $1.5 million and $3.0 million, respectively, for the same periods in 2025. Estimated future amortization expense is summarized as follows:


	Amortization Expense
2026	$	5,205
2027	8,862
2028	7,167
2029	4,918
2030	4,053
After 2030	8,767
	$	38,972

NOTE 6

DERIVATIVE FINANCIAL INSTRUMENTS

Non-designated Hedges

Derivatives not designated as hedges are not used for speculative purposes. Instead, they arise from services provided to commercial banking customers as part of their risk management strategies. The Corporation executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Corporation executes with a third party, such that the Corporation minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

Interest rate lock commitments related to mortgage loans and forward sale commitments to third-party investors are also considered derivatives. It is the Corporation's practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated in hedge relationships. Fair values were estimated using observable market inputs, primarily changes in mortgage interest rates, from the date of the commitment to the reporting date. Changes in the fair value of these mortgage banking derivatives are included in "Net gains and fees on sales of loans" in the Consolidated Condensed Statements of Income.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

The table below presents the fair value of the Corporation’s non-designated hedges, as well as their classification on the Consolidated Condensed Balance Sheets, as of June 30, 2026 and December 31, 2025.


	June 30, 2026				December 31, 2025
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in other assets:
Interest rate swaps	$	1,526,758	$	48,573	$	1,529,421	$	47,850
Forward contracts related to mortgage loans to be delivered for sale	44,685		742		15,217		422
Interest rate lock commitments	37,362		241		26,595		196
Included in other assets	$	1,608,805	$	49,556	$	1,571,233	$	48,468
Included in other liabilities:
Interest rate swaps	$	1,643,997	$	48,529	$	1,668,136	$	47,879
Forward contracts related to mortgage loans to be delivered for sale	39,000		171		25,000		99
Interest rate lock commitments	19,547		56		2,246		2
Included in other liabilities	$	1,702,544	$	48,756	$	1,695,382	$	47,980

In the normal course of business, the Corporation may decide to settle a forward contract rather than fulfill the contract. Cash received or paid in this settlement manner is included in "Net gains and fees on sales of loans" in the Consolidated Condensed Statements of Income and is considered a cost of executing a forward contract. The amount of gain (loss) recognized into income related to non-designated hedging instruments is included in the tables below for the periods indicated.


Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized into Income on Derivatives
		Three Months Ended June 30, 2026		Three Months Ended June 30, 2025
Forward contracts related to mortgage loans to be delivered for sale	Net gains and fees on sales of loans	$	133	$	306
Interest rate lock commitments	Net gains and fees on sales of loans	256		18
Total net gain recognized in income		$	389	$	324



Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized into Income on Derivatives
		Six Months Ended June 30, 2026		Six Months Ended June 30, 2025
Forward contracts related to mortgage loans to be delivered for sale	Net gains and fees on sales of loans	$	798	$	74
Interest rate lock commitments	Net gains and fees on sales of loans	(9)		219
Total net gain recognized in income		$	789	$	293

The Corporation’s exposure to credit risk occurs because of nonperformance by its counterparties. The counterparties approved by the Corporation are usually financial institutions, which are well capitalized and have credit ratings through Moody’s and/or Standard & Poor’s at or above investment grade. The Corporation’s mitigation of such risk is through quarterly financial reviews, comparing mark-to-market values with policy limitations, credit ratings and collateral pledging.

Credit-Risk-Related Contingent Features

The Corporation has agreements with certain of its derivative counterparties that contain a provision where if the Corporation fails to maintain its status as a well or adequately capitalized institution, then the Corporation could be required to terminate or fully collateralize all outstanding derivative contracts. Additionally, the Corporation has agreements with certain of its derivative counterparties that contain a provision where if the Corporation defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Corporation could also be declared in default on its derivative obligations. As of June 30, 2026, the termination value of derivatives in a net liability position related to these agreements was $3.8 million, and the Corporation had pledged $0.1 million of collateral pledged to counterparties as of that date. While the Corporation did not breach any of these provisions as of June 30, 2026, if it had, the Corporation could have been required to settle its obligations under the agreements at their termination value.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 7

FAIR VALUES OF FINANCIAL INSTRUMENTS

The Corporation uses fair value measurements to adjust certain assets and liabilities and to provide fair value disclosures. ASC 820 defines fair value, establishes a framework for measuring it and expands related disclosure requirements. It applies only when other accounting guidance requires or permits fair value measurement and does not expand its use to new circumstances.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It represents an exit price at the measurement date. Market participants are buyers and sellers, who are independent, knowledgeable, and willing and able to transact in the principal (or most advantageous) market for the asset or liability being measured. The Corporation values its assets and liabilities in the principal market where it sells the asset or transfers the liability with the greatest volume and level of activity. If no principal market exists, valuation is based on the most advantageous market — one that maximizes the asset’s sale price or minimizes the liability’s transfer cost.

Valuation inputs reflect assumptions that market participants would use to price an asset or liability. These inputs are categorized as either observable or unobservable. Observable inputs are based on market data from independent sources and reflect assumptions market participants would use. Unobservable inputs are derived from the Corporation’s own estimates, reflecting assumptions market participants might use when market data is not available. These rely on the best available information at the measurement date.

Inputs are ranked within a three-level fair value hierarchy. Level 1 inputs consist of quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are based on one or more of the following: quoted prices for similar assets, observable inputs such as interest rates or yield curves, or inputs corroborated by market data. Level 3 inputs are unobservable and reflect minimal market activity.

An input is considered significant if it contributes 10 percent or more to the total fair value of the asset or liability.

RECURRING AND NONRECURRING FAIR VALUE MEASUREMENTS

Assets and liabilities are considered to be measured at fair value on a recurring basis if fair value is measured regularly — such as daily, weekly, monthly, or quarterly. Recurring valuation occurs at least on the measurement date. Assets and liabilities are considered to be measured at fair value on a nonrecurring basis if the fair value measurement is not performed regularly and does not necessarily result in a change to the recorded balance sheet amount. Generally, nonrecurring valuation is the result of the application of other accounting pronouncements which require assets or liabilities to be assessed for impairment and recorded at the lower of cost or fair value. The fair value of assets or liabilities transferred in or out of Level 3 is measured on the transfer date, with any additional changes in fair value subsequent to the transfer considered to be realized or unrealized gains or losses.

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the

accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Investment Securities

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. As of June 30, 2026, and December 31, 2025 the Corporation did not hold any Level 1 securities. Where significant observable inputs, other than Level 1 quoted prices, are available, securities are classified within Level 2 of the valuation hierarchy. Level 2 securities include U.S. Government-sponsored agency and mortgage-backed securities, state and municipal securities, foreign investment and corporate obligations. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include state and municipal securities and corporate obligations. Fair values for Level 3 securities were determined using discounted cash flow models that incorporated market estimates of interest rates and volatility in markets that have not been active.

Third party vendors compile prices from various sources and may apply such techniques as matrix pricing to determine the value of identical or similar investment securities (Level 2). Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities. Any investment security not valued based upon the methods above are considered Level 3.

Loans Held for Sale

Loans held for sale are carried at the lower of amortized cost basis or fair value, determined at the individual loan level, and are intended for sale in the secondary market. Certain loans classified as held for sale continue to be carried at amortized cost as their cost basis does not exceed fair value and, accordingly, are not included in the fair value measurement disclosures below.

Loans held for sale that are written down to fair value, including loans reclassified from held for investment when management commits to a plan to sell, are measured at fair value on a recurring basis and are included within Level 2 of the fair value hierarchy. Fair value is determined using observable market‑based inputs, including pricing obtained from third‑party investors for similar residential mortgage loans, adjusted for loan‑specific characteristics such as coupon, term, credit quality, and expected execution costs. Quoted prices for identical instruments in active markets are generally not available for these loans.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Loans held for sale that are carried at amortized cost are not subject to recurring fair value measurement and are therefore excluded from the tables presenting assets and liabilities measured at fair value.

Derivative Financial Agreements

See information regarding the Corporation’s derivative financial agreements in NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS of these Notes to Consolidated Condensed Financial Statements.

The following tables present the fair value measurements of assets and liabilities measured at fair value in the accompanying balance sheets on a recurring basis, along with their classification within the fair value hierarchy as of June 30, 2026, and December 31, 2025.


			Fair Value Measurements Using:
June 30, 2026	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities:

U.S. Government-sponsored agency securities	$	71,739	$	—	$	71,739	$	—
State and municipal	893,132		—		890,711		2,421
U.S. Government-sponsored mortgage-backed securities	410,219		—		410,219		—
Foreign investment	1,500		—		1,500		—
Corporate obligations	7,802		—		7,771		31

Derivative assets	49,556		—		49,556		—
Derivative liabilities	48,756		—		48,756		—


			Fair Value Measurements Using:
December 31, 2025	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities:


U.S. Government-sponsored agency securities	$	76,099	$	—	$	76,099	$	—
State and municipal	902,294		—		900,339		1,955
U.S. Government-sponsored mortgage-backed securities	419,510		—		419,510		—
Foreign investment	1,500		—		1,500		—
Corporate obligations	7,699		—		7,668		31

Derivative assets	48,468		—		48,468		—
Derivative liabilities	47,980		—		47,980		—

Level 3 Reconciliation

The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying

balance sheets using significant unobservable Level 3 inputs for the three and six months ended June 30, 2026 and 2025.


	Available for Sale Securities
	Three Months Ended				Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Balance, beginning of period	$	2,419	$	2,182	$	1,986	$	2,416


Assets acquired in a business combination	—		—		660		—
Included in other comprehensive income (loss)	35		16		44		9


Principal payments	(2)		(2)		(238)		(229)
Balance, end of period	$	2,452	$	2,196	$	2,452	$	2,196

There were no gains or losses included in earnings that were attributable to the changes in unrealized gains or losses related to assets or

liabilities held at June 30, 2026 or December 31, 2025.

Transfers Between Levels

There were no transfers in or out of Level 3 during the three and six months ended June 30, 2026 and 2025.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

Nonrecurring Measurements

Following is a description of valuation methodologies used for instruments measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy at June 30, 2026, and December 31, 2025.


			Fair Value Measurements Using
June 30, 2026	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent loans	$	55,408	$	—	$	—	$	55,408


			Fair Value Measurements Using
December 31, 2025	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent loans	$	65,302	$	—	$	—	$	65,302

Collateral Dependent Loans

Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and/or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions.

Unobservable (Level 3) Inputs

The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill, at June 30, 2026 and December 31, 2025.

June 30, 2026

Fair Value

Valuation Technique

Unobservable Inputs

Range (Weighted-Average)

State and municipal securities

2,421

Discounted cash flow

Maturity/Call date

1 month to 5 years

US Muni BQ curve

BBB

Discount rate

3.2% - 5.1%

Weighted-average coupon

3.8%

Corporate obligations

Discounted cash flow

Risk free rate

3 month CME Term SOFR plus 26bps

plus premium for illiquidity (basis points)

plus 200bps

Weighted-average coupon

Collateral dependent loans

55,408

Collateral based measurements

Discount to reflect current market conditions and ultimate collectability

0% - 90%

Weighted-average discount by loan balance

24.2%

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

December 31, 2025

Fair Value

Valuation Technique

Unobservable Inputs

Range (Weighted-Average)

State and municipal securities

1,955

Discounted cash flow

Maturity/Call date

1 month to 5 years

US Muni BQ curve

BBB

Discount rate

3.6% - 5.7%

Weighted-average coupon

3.6%

Corporate obligations and U.S. Government-sponsored mortgage-backed securities

Discounted cash flow

Risk free rate

3 month CME Term

SOFR plus 26bps

plus premium for illiquidity (basis points)

plus 200bps

Weighted-average coupon

Collateral dependent loans

65,302

Collateral based measurements

Discount to reflect current market conditions and ultimate collectability

1% - 16%

Weighted-average discount by loan balance

1.5%

The following is a discussion of the sensitivity of significant unobservable inputs, the interrelationships between those inputs and other unobservable inputs used in recurring fair value measurement and how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement.

State and Municipal Securities and Corporate Obligations

The significant unobservable inputs used in the fair value measurement of the Corporation's state and municipal securities and corporate obligations are premiums for unrated securities and marketability discounts. Significant increases or decreases in either of those inputs in isolation would result in a significantly lower or higher fair value measurement. Generally, changes in either of those inputs will not affect the other input.

Collateral Dependent Loans

The Corporation's loans that are deemed collateral dependent are valued using the fair value of the underlying collateral. Collateral values are generally based on current appraisals, broker price opinions, or internally developed valuations and may be adjusted to reflect management's assumptions regarding market conditions, disposition costs, and the estimated realizable value of the collateral.

Fair Value of Financial Instruments

The following tables present estimated fair values of the Corporation’s financial instruments not carried at fair value and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2026 and December 31, 2025.


			June 30, 2026
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Carrying Amount		(Level 1)		(Level 2)		(Level 3)		Total Fair Value
Assets:
Cash and due from banks	$	86,665	$	86,665	$	—	$	—	$	86,665
Interest-bearing deposits	529,432		529,432		—		—		529,432
Investment securities held to maturity, net of allowance for credit losses	1,907,684		—		1,650,805		3,138		1,653,943
Loans held for sale	77,880		—		77,880		—		77,880
Net loans	15,289,122		—		—		15,352,936		15,352,936
Federal Home Loan Bank stock	70,818		—		70,818		—		70,818
Interest receivable	101,927		—		101,927		—		101,927
Liabilities:
Deposits	$	16,753,381	$	14,614,077	$	2,131,657	$	—	$	16,745,734
Borrowings:

Securities sold under repurchase agreements	103,340		—		103,333		—		103,333
Federal Home Loan Bank advances	1,414,059		—		1,411,741		—		1,411,741
Subordinated debentures and other borrowings	86,350		—		79,438		—		79,438

Interest payable	17,491		—		17,491		—		17,491

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)


			December 31, 2025
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Carrying Amount		(Level 1)		(Level 2)		(Level 3)		Total Fair Value
Assets:
Cash and due from banks	$	84,158	$	84,158	$	—	$	—	$	84,158
Interest-bearing deposits	196,300		196,300		—		—		196,300
Investment securities held to maturity, net of allowance for credit losses	1,971,539		—		1,713,872		4,415		1,718,287
Loans held for sale	20,079		—		20,079		—		20,079
Net loans	13,596,110		—		—		13,498,304		13,498,304
Federal Home Loan Bank stock	47,245		—		47,245		—		47,245

Interest receivable	93,374		—		93,374		—		93,374
Liabilities:
Deposits	$	15,294,855	$	13,252,258	$	2,042,782	$	—	$	15,295,040
Borrowings:
Federal funds purchased	40,000		—		40,000		—		40,000
Securities sold under repurchase agreements	103,755		—		103,747		—		103,747
Federal Home Loan Bank advances	798,549		—		803,396		—		803,396
Subordinated debentures and other borrowings	57,630		—		53,982		—		53,982

Interest payable	18,235		—		18,235		—		18,235

NOTE 8

QUALIFIED AFFORDABLE HOUSING INVESTMENTS

The Corporation has investments in various limited partnerships that sponsor affordable housing projects. The purpose of these investments is to earn an adequate return on capital through the receipt of low income housing tax credits and to assist the Corporation in achieving goals associated with the Community Reinvestment Act ("CRA"). These investments are included in other assets on the Consolidated Condensed Balance Sheets, with any unfunded commitments included in other liabilities. The investments are amortized as a component of income tax expense.

The following table summarizes the Corporation’s affordable housing investments as of June 30, 2026 and December 31, 2025.


	June 30, 2026				December 31, 2025
Investment Type	Investment		Unfunded Commitment		Investment		Unfunded Commitment
LIHTC	$	206,759	$	118,854	$	178,380	$	109,214

The following table summarizes the amortization expense and tax credits recognized for the Corporation’s affordable housing investments for the three and six months ended June 30, 2026 and 2025.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Amortization expense	$	5,110	$	4,100	$	10,107	$	8,121
Tax credits recognized	6,350		5,017		12,551		9,939

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 9

BORROWINGS

The following table summarizes the Corporation’s borrowings as of June 30, 2026 and December 31, 2025.


	June 30, 2026		December 31, 2025
Federal funds purchased	$	—	$	40,000
Securities sold under repurchase agreements	103,340		103,755
Federal Home Loan Bank advances	1,414,059		798,549
Subordinated debentures and other borrowings	86,350		57,630
Total borrowings	$	1,603,749	$	999,934

Securities sold under repurchase agreements consist of obligations of the Bank to other parties and are secured by U.S. Government-sponsored enterprise obligations. The maximum amount of outstanding agreements at any month-end during the six months ended June 30, 2026 and 2025 totaled $120.3 million and $169.1 million, respectively, and the average balance of such agreements totaled $110.2 million and $141.7 million during the same period of 2026 and 2025, respectively.

The following table presents the collateral pledged for repurchase agreements accounted for as secured borrowings as of June 30, 2026 and December 31, 2025:


	June 30, 2026
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 Days		Total
U.S. Government-sponsored mortgage-backed securities	$	103,340	$	—	$	—	$	—	$	103,340


	December 31, 2025
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater Than 90 Days		Total
U.S. Government-sponsored mortgage-backed securities	$	103,755	$	—	$	—	$	—	$	103,755

Contractual maturities of borrowings as of June 30, 2026, are as follows:


Maturities in Years Ending December 31:	Securities Sold Under Repurchase Agreements		Federal Home Loan Bank Advances		Subordinated Debentures and Other Borrowings
2026	$	103,340	$	560,019	$	1,061
2027	—		320,000		—
2028	—		240,000		—
2029	—		50,000		—
2030	—		—		—
2031 and after	—		244,040		89,181
ASC 805 fair value adjustments at acquisition	—		—		(3,892)
	$	103,340	$	1,414,059	$	86,350

At June 30, 2026, the outstanding Federal Home Loan Bank ("FHLB") advances had interest rates from 0 percent to 4.56 percent and are subject to restrictions or penalties in the event of prepayment. The total available remaining borrowing capacity from the FHLB at June 30, 2026, was $749.3 million. As of June 30, 2026, the Corporation had $410.0 million of putable advances with the FHLB.

Subordinated Debentures and Other Borrowings. As of June 30, 2026 and December 31, 2025, subordinated debentures and other borrowings totaled $86.4 million and $57.6 million, respectively.

•First Merchants Capital Trust II (“FMC Trust II”). At June 30, 2026 and December 31, 2025, the Corporation had $41.7 million of subordinated debentures issued to FMC Trust II, a wholly-owned statutory business trust. FMC Trust II was formed in July 2007 for purposes of issuing trust preferred securities to investors. At that time, it simultaneously issued and sold its common securities to the Corporation, which constituted all of the issued and outstanding common securities of FMC Trust II. The subordinated debentures, which were purchased with the proceeds of the sale of the trust’s capital securities, are the sole assets of FMC Trust II and are fully and unconditionally guaranteed by the Corporation. As of June 30, 2026 and December 31, 2025, the subordinated debentures and trust preferred securities bear interest at a variable rate equal to the three-month CME Term Secured Overnight Financing Rate published by the Chicago Mercantile Exchange Group ("CME Term SOFR"), plus the 0.26161 percent spread adjustment. The interest rates at June 30, 2026 and December 31, 2025 were 5.49 percent and 5.54 percent, respectively. The trust preferred securities are currently redeemable at par and without penalty, subject to the Corporation having first redeemed the related subordinated debentures, with the prior approval of the Board of Governors of the Federal Reserve System ("Federal Reserve") if then required under applicable

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

capital guidelines or policies. The trust preferred securities and the subordinated debentures of FMC Trust II will mature on September 15, 2037. The Corporation continues to hold all outstanding common securities of FMC Trust II.

•Ameriana Capital Trust I. At June 30, 2026 and December 31, 2025, the Corporation had $10.3 million of subordinated debentures issued to Ameriana Capital Trust I. On December 31, 2015, the Corporation acquired Ameriana Capital Trust I in conjunction with its acquisition of Ameriana Bancorp, Inc. With a trust preferred structure substantially similar to that described above for FMC Trust II, the subordinated debentures held by Ameriana Capital Trust I were purchased with the proceeds of the sale of the trust’s capital securities. As of June 30, 2026 and December 31, 2025, the subordinated debentures and trust preferred securities bear interest at a variable rate equal to the three-month CME Term SOFR, plus the 0.26161 percent spread adjustment. The interest rates at June 30, 2026 and December 31, 2025 were 5.43 percent and 5.48 percent, respectively. The trust preferred securities of Ameriana Capital Trust I are currently redeemable at par and without penalty, subject to the Corporation having first redeemed the related subordinated debentures, with the prior approval of the Federal Reserve if then required under applicable capital guidelines or policies. The trust preferred securities and the subordinated debentures of Ameriana Capital Trust I will mature in March 2036. The Corporation continues to hold all of the outstanding common securities of Ameriana Capital Trust I.

•First Savings Subordinated Notes. On February 1, 2026, the Corporation assumed certain subordinated notes in conjunction with its acquisition of First Savings. The subordinated notes assumed in the acquisition had an outstanding principal balance of $29.0 million at acquisition and were originally issued on March 18, 2022. The notes have a fixed interest rate of 4.50 percent per annum, payable semiannually through March 30, 2027. The notes have a floating interest rate equal to the three-month CME Term SOFR plus 2.76 percent, payable quarterly, after March 30, 2027 through maturity. The notes mature on March 30, 2032, and the Corporation has the option to redeem any or all of the subordinated notes without premium or penalty any time after March 30, 2027 or upon the occurrence of a Tier 2 capital event or tax event.

•Other Borrowings. On April 1, 2022, the Corporation acquired a secured borrowing in conjunction with its acquisition of Level One. The secured borrowing related to a certain loan participation sold by Level One that did not qualify for sales treatment. The secured borrowing bears a fixed rate of 1.00 percent and had a balance of $1.1 million as of June 30, 2026 and December 31, 2025. During the third quarter of 2023, the Corporation acquired a secured borrowing in conjunction with the purchase of the Indianapolis regional headquarters building. The secured borrowing bears a fixed interest rate of 3.41 percent, has a maturity date of March 2035, and had a balance of $6.9 million and $7.0 million as of June 30, 2026 and December 31, 2025, respectively.

Line of Credit. As of June 30, 2026 and December 31, 2025, there was no outstanding balance on the line of credit.

•U.S. Bank, N.A. On September 30, 2024, the Corporation entered into a Credit Agreement with U.S. Bank, N.A. Under the terms of the Credit Agreement, U.S. Bank, N.A. has provided the Corporation with a revolving line of credit ("Credit Facility") of up to $75.0 million. The outstanding principal balance under the Credit Facility bears interest at a variable rate equal to the one-month CME Term SOFR rate plus 2.25 percent. Interest on the outstanding balance is payable quarterly. Additionally, the Corporation is subject to a non-refundable facility fee equal to 0.40 percent per annum on the average daily unused amount of the Credit Facility, payable quarterly. The Credit Agreement contains customary representations, warranties and covenants. During the third quarter of 2025, the Corporation amended the Credit Facility to extend the termination date from September 30, 2025 to September 29, 2026. As of June 30, 2026 and December 31, 2025, the Corporation's outstanding principal balance under the Credit Facility was zero and the Corporation was in compliance with all covenants.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 10

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in the balances of each component of accumulated other comprehensive loss, net of tax, as of June 30, 2026 and 2025.


	Accumulated Other Comprehensive Loss
	Unrealized Gains (Losses) on Securities Available for Sale		Unrealized Gains (Losses) on Defined Benefit Plans		Total
Balance at December 31, 2025	$	(131,902)	$	1,767	$	(130,135)
Other comprehensive loss before reclassifications	(3,458)		—		(3,458)
Amounts reclassified from accumulated other comprehensive loss	—		—		—
Period change	(3,458)		—		(3,458)

Balance at June 30, 2026	$	(135,360)	$	1,767	$	(133,593)


Balance at December 31, 2024	$	(188,412)	$	(273)	$	(188,685)
Other comprehensive loss before reclassifications	(1,296)		—		(1,296)
Amounts reclassified from accumulated other comprehensive loss	6		—		6
Period change	(1,290)		—		(1,290)

Balance at June 30, 2025	$	(189,702)	$	(273)	$	(189,975)

The following tables present the reclassification adjustments out of accumulated other comprehensive loss that were included in net income in the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2026 and 2025.


	Amounts Reclassified from Accumulated Other Comprehensive Loss For the Three Months Ended June 30,
Details about Accumulated Other Comprehensive Loss Components	2026		2025		Affected Line Item in the Statements of Income
Unrealized gains (losses) on available for sale securities (1)
Realized securities losses reclassified into income	$	—	$	(1)	Noninterest income - net realized losses on sales of available for sale securities
Related income tax benefit (expense)	—		—		Income tax expense












Total reclassifications for the period, net of tax	$	—	$	(1)



	Amounts Reclassified from Accumulated Other Comprehensive Loss For the Six Months Ended June 30,
Details about Accumulated Other Comprehensive Loss Components	2026		2025		Affected Line Item in the Statements of Income
Unrealized gains (losses) on available for sale securities (1)
Realized securities losses reclassified into income	$	—	$	(8)	Noninterest income - net realized losses on sales of available for sale securities
Related income tax benefit (expense)	—		2		Income tax expense












Total reclassifications for the period, net of tax	$	—	$	(6)

(1) For additional detail related to unrealized gains (losses) on available for sale securities and related amounts reclassified from accumulated other comprehensive loss see NOTE 3. INVESTMENT SECURITIES of these Notes to Consolidated Condensed Financial Statements.

NOTE 11

SHARE-BASED COMPENSATION

Stock options and Restricted Stock Awards ("RSAs") have been issued to directors, officers and other management employees under the Corporation's 2024 Long-term Equity Incentive Plan, the 2019 Long-term Equity Incentive Plan, the Level One Bancorp, Inc. 2007 Stock Option Plan and the Equity Compensation Plan for Non-Employee Directors. The stock options, which have a ten year life, become 100 percent vested based on time ranging from one year to two years and are fully exercisable when vested. Option exercise prices equal the Corporation's common stock closing price on Nasdaq on the date of grant. The RSAs issued to employees and non-employee directors provide for the issuance of shares of the Corporation's common stock at no cost to the holder and generally vest after three years. The RSAs vest only if the employee is actively employed by the Corporation on the vesting date. For non-employee directors, the RSAs vest only if the non-employee director remains as an active board member on the vesting date. The RSAs for employees and non-employee directors are either immediately

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

vested at retirement, disability or death, or continue to vest after retirement, disability or death, depending on the plan under which the shares were granted.

The Corporation’s 2024 Employee Stock Purchase Plan ("ESPP") provides eligible employees of the Corporation an opportunity to purchase shares of common stock of the Corporation through quarterly offerings financed by payroll deductions. The price of the stock to be paid by the employees shall be equal to 85 percent of the average of the closing price of the Corporation’s common stock on each trading day during the offering period. However, in no event shall such purchase price be less than the lesser of an amount equal to 85 percent of the market price of the Corporation’s stock on the offering date or an amount equal to 85 percent of the market value on the date of purchase. Common stock purchases are made quarterly and are paid through advance payroll deductions up to a calendar year maximum of $25,000.

Compensation expense related to unvested share-based awards is recorded by recognizing the unamortized grant date fair value of these awards over the remaining service periods of those awards, with no change in historical reported fair values and earnings. Awards are valued at fair value in accordance with provisions of share-based compensation guidance and are recognized on a straight-line basis over the service periods of each award. To complete the exercise of vested stock options, RSAs and ESPP options, the Corporation generally issues new shares from its authorized but unissued share pool. Share-based compensation has been recognized as a component of salaries and employee benefits expense in the accompanying Consolidated Condensed Statements of Income.

The following table summarizes the components of the Corporation's share-based compensation awards recorded as an expense and the income tax benefit of such awards.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Stock and ESPP Options
Pre-tax compensation expense	$	29	$	27	$	56	$	54
Income tax expense (benefit)	—		—		(23)		—
Stock and ESPP option expense, net of income taxes	$	29	$	27	$	33	$	54
Restricted Stock Awards
Pre-tax compensation expense	$	1,822	$	1,540	$	3,478	$	3,108
Income tax expense (benefit)	(430)		(307)		(794)		(635)
Restricted stock awards expense, net of income taxes	$	1,392	$	1,233	$	2,684	$	2,473
Total Share-Based Compensation
Pre-tax compensation expense	$	1,851	$	1,567	$	3,534	$	3,162
Income tax expense (benefit)	(430)		(307)		(817)		(635)
Total share-based compensation expense, net of income taxes	$	1,421	$	1,260	$	2,717	$	2,527

The grant date fair value of ESPP options was estimated to be approximately $30,000 at the beginning of the April 1, 2026 quarterly offering period. The ESPP shares were purchased and issued during the three months ended June 30, 2026, resulting in no unrecognized compensation expense related to ESPP options at June 30, 2026.

Stock option activity under the Corporation's stock option plans as of June 30, 2026 and changes during the six months ended June 30, 2026, were as follows:


	Number of Shares	Weighted-Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2026	19,524	$	23.86


Exercised	(19,524)	$	23.86

Outstanding at June 30, 2026	—	$	—	0.00	$	—
Vested and Expected to Vest at June 30, 2026	—	$	—	0.00	$	—
Exercisable at June 30, 2026	—	$	—	0.00	$	—

Cash receipts from stock options exercised during the six months ended June 30, 2026 and 2025 were $465,000 and $237,000, respectively. No options remain outstanding as of June 30, 2026.

The following table summarizes changes in unvested RSAs for the six months ended June 30, 2026.


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested RSAs at January 1, 2026	641,117	$	36.08
Granted	40,577	$	40.97
Vested	(83,518)	$	38.39
Forfeited	(3,550)	$	35.98
Unvested RSAs at June 30, 2026	594,626	$	36.10

As of June 30, 2026, unrecognized compensation expense related to RSAs was $9.5 million and is expected to be recognized over a weighted-average period of 1.4 years. The Corporation did not have any unrecognized compensation expense related to stock options as of June 30, 2026.

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 12

INCOME TAXES

The following table reconciles income taxes computed at the federal statutory rate to the income tax expense and effective tax rate recorded in the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2026 and 2025.


	Three Months Ended June 30,								Six Months Ended June 30,
	2026				2025				2026				2025








	Amount		%		Amount		%		Amount		%		Amount		%
Income Before Income Taxes	$	47,750			$	65,119			$	74,837			$	128,335
Federal statutory income tax at 21%	$	10,028	21.0	%	$	13,675	21.0	%	$	15,716	21.0	%	$	26,950	21.0	%
State & Local taxes, net of Federal income tax effect	(97)		(0.2)	%	297		0.5	%	(569)		(0.7)	%	604		0.5	%
Tax-exempt interest income	(4,808)		(10.1)	%	(4,643)		(7.1)	%	(9,621)		(12.9)	%	(9,241)		(7.2)	%
Non-deductible FDIC premiums	310		0.6	%	162		0.2	%	493		0.7	%	291		0.2	%

Tax-exempt earnings and gains on life insurance	(488)		(1.0)	%	(401)		(0.7)	%	(1,212)		(1.6)	%	(859)		(0.7)	%
Other non-taxable/non-deductible items	117		0.3	%	124		0.2	%	530		0.7	%	236		0.2	%
Tax credits	(1,240)		(2.6)	%	(915)		(1.4)	%	(2,444)		(3.3)	%	(1,818)		(1.4)	%
Other	(52)		(0.1)	%	(12)		—	%	(192)		(0.3)	%	1		—	%
Income tax expense and effective tax rate	$	3,770	7.9	%	$	8,287	12.7	%	$	2,701	3.6	%	$	16,164	12.6	%

NOTE 13

NET INCOME PER COMMON SHARE

Basic net income per common share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the reporting period.

Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. It is computed by dividing net income available to common stockholders by the sum of the weighted-average common shares outstanding and the effect of all potentially dilutive common shares outstanding during the period.

Potentially dilutive common shares include stock options and RSAs granted under the Corporation’s share-based compensation plans. These securities are included in the diluted earnings per share calculation only when their effect is dilutive. Securities that would increase earnings per share are considered anti-dilutive and are therefore excluded from the computation of diluted earnings per share for the applicable periods.

The following tables reconcile basic and diluted net income per common share for the three and six months ended June 30, 2026 and 2025.


	Three Months Ended June 30,
	2026					2025
	Net Income Available to Common Stockholders		Weighted-Average Common Shares	Per Share Amount		Net Income Available to Common Stockholders		Weighted-Average Common Shares	Per Share Amount
Net income available to common stockholders	$	43,511	62,286,754	$	0.70	$	56,363	57,501,593	$	0.98
Effect of potentially dilutive stock options and restricted stock awards			286,982					270,987
Diluted net income per common share	$	43,511	62,573,736	$	0.70	$	56,363	57,772,580	$	0.98
RSAs excluded from the diluted average common share calculation			47,522					60,990



	Six Months Ended June 30,
	2026					2025
	Net Income Available to Common Stockholders		Weighted-Average Common Shares	Per Share Amount		Net Income Available to Common Stockholders		Weighted-Average Common Shares	Per Share Amount
Net income available to common stockholders	$	71,198	61,513,413	$	1.16	$	111,233	57,734,032	$	1.93
Effect of potentially dilutive stock options and restricted stock awards			281,989					271,353
Diluted net income per common share	$	71,198	61,795,402	$	1.15	$	111,233	58,005,385	$	1.92
RSAs excluded from the diluted average common share calculation			59,681					53,548

PART I: FINANCIAL INFORMATION

ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(table dollar amounts in thousands, except share data)

(Unaudited)

NOTE 14

SEGMENT INFORMATION

The Corporation has one reportable segment, community banking. The Corporation’s reportable segment is determined by the Chief Executive Officer, who is the designated chief operating decision maker (“CODM”), based upon information provided about the Corporation’s products and services offered. The CODM evaluates the financial performance of the Corporation’s business components by evaluating revenue streams, significant expenses, and budget-to-actual results in assessing the Corporation’s segment. The Corporation generates revenue primarily by providing banking services to its customers. Interest expense, provisions for credit losses, and salaries and employee benefits are significant expenses in the Corporation's banking operations. The CODM evaluates performance, allocates resources and makes key operating decisions based on consolidated net income that is reported in the Consolidated Statements of Income. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets. All operations are domestic.

NOTE 15

GENERAL LITIGATION AND REGULATORY EXAMINATIONS

The Corporation is subject to claims and lawsuits that arise primarily in the ordinary course of business. Additionally, the Corporation is also subject to periodic examinations by various regulatory agencies. It is the general opinion of management that the disposition or ultimate resolution of any such routine litigation or regulatory examinations will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Corporation.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

From time to time, we include forward-looking statements in our oral and written communication. We may include forward-looking statements in filings with the Securities and Exchange Commission, such as this Quarterly Report on Form 10-Q, in other written materials and in oral statements made by senior management to analysts, investors, representatives of the media and others. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of these safe harbor provisions. Forward-looking statements can often 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 forward-looking statements include:

•statements of the Corporation's goals, intentions and expectations;

•statements regarding the Corporation's business plan and growth strategies;

•statements regarding the asset quality of the Corporation's loan and investment portfolios; and

•estimates of the Corporation's risks and future costs and benefits.

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors which could affect the actual outcome of future events:

•fluctuations in market rates of interest and loan and deposit pricing, which could negatively affect our net interest margin, asset valuations and expense expectations;

•adverse changes in the economy, which might affect our business prospects and could cause credit-related losses and expenses;

•the impacts of epidemics, pandemics or other infectious disease outbreaks;

•the impacts related to or resulting from recent bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;

•adverse developments in our loan and investment portfolios;

•competitive factors in the banking industry, such as the trend towards consolidation in our market;

•changes in the banking legislation or the regulatory requirements of federal and state agencies applicable to bank holding companies and banks like our affiliate bank;

•acquisitions of other businesses by us and integration of such acquired businesses;

•changes in market, economic, operational, liquidity, credit and interest rate risks associated with our business; and

•the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. In addition, our past results of operations do not necessarily indicate our anticipated future results.

BUSINESS SUMMARY

First Merchants Corporation (the “Corporation”) is a financial holding company headquartered in Muncie, Indiana and was organized in September 1982. The Corporation’s common stock is traded on the Nasdaq’s Global Select Market System under the symbol FRME. The Corporation conducts its banking operations through First Merchants Bank (the “Bank”), a wholly-owned subsidiary that opened for business in Muncie, Indiana in March 1893. The Bank also operates First Merchants Private Wealth Advisors (a division of First Merchants Bank). The Bank operates 126 banking locations in Indiana, Ohio, and Michigan. In addition to its branch network, the Corporation offers comprehensive electronic and mobile delivery channels to its customers. The Corporation’s business activities are currently limited to one reportable business segment, which is community banking.

Through the Bank, the Corporation offers a broad range of commercial and consumer banking services to meet the diverse needs of our customers. Our commercial banking team offers a full spectrum of debt capital, treasury management services and depository products. The consumer banking group offers a variety of consumer deposit and lending products. The mortgage banking team offers consumer mortgage solutions to assist with the purchase, refinance, construction or renovation of residential properties. Private Wealth Advisors offers personal wealth management services with expertise in investment management, private banking, fiduciary estate and financial planning.

Acquisitions

On February 1, 2026, the Corporation completed the acquisition of First Savings Financial Group, Inc., an Indiana corporation, pursuant to the Agreement and Plan of Merger, dated as of September 24, 2025, by and between the Corporation and First Savings. Immediately following the Merger, First Savings Bank, a wholly-owned subsidiary of First Savings, merged with and into the Bank with the Bank surviving the merger and continuing its corporate existence.

First Savings was headquartered in Jeffersonville, Indiana and had 16 banking centers serving the southern Indiana market. The Corporation engaged in this transaction with the objective that the transaction would be accretive to earnings and add to the existing market area in Indiana that has a demographic profile consistent with many of the current Midwest markets served by the Bank.

The Corporation acquired total assets of $2.4 billion, total loans of $1.8 billion, and total deposits of $1.7 billion. The total purchase price of approximately $243.2 million consisted primarily of equity consideration issued by the Corporation and was measured at fair value based on the Corporation’s common stock price as of the acquisition date. The purchase price also included cash paid in lieu of fractional shares. The purchase price represented the fair value of consideration transferred in accordance with ASC 805. Immediately following the acquisition of First

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Savings, the Corporation sold substantially all of the acquired investment securities portfolio. The sale was executed as part of the Corporation’s balance sheet repositioning strategy, with the resulting liquidity used to pay down wholesale funding following the acquisition.

For additional information regarding the acquisition, see NOTE 2. ACQUISITIONS of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The U.S. Generally Accepted Accounting Principles ("GAAP") are complex and require us to apply significant judgment in the application of accounting, reporting, and disclosure requirements. Management uses estimates and assumptions where actual amounts are not reasonably available, including assumptions based on historical experience and other factors management believes to be reasonable under the circumstances. Because of this inherent uncertainty in these estimates and assumptions, actual results could differ from those estimates, and such differences could be material to the financial condition and results of operations.

There have been no significant changes during the six months ended June 30, 2026 to the items disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025. For a complete discussion of our significant accounting policies, see “Notes to the Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2025. However, due to the First Savings acquisition on February 1, 2026, the Corporation has expanded its discussion below of accounting practices and valuation methodologies related to business combinations, which involve significant judgment and estimation uncertainty.

Business Combinations

Business combinations are accounted for under the acquisition method of accounting. Under this method, the acquired assets and liabilities assumed are recorded at their estimated fair values as of the acquisition date, with the excess of the purchase price over the estimated fair value of the net assets acquired recorded as goodwill. The Corporation uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates and realizable collateral values.

In connection with the acquisition, and consistent with the guidance in ASU 2025‑08, loans acquired through business combinations that meet the definition of PSL are recorded using the gross-up method. PCD loans continue to be accounted for under existing PCD guidance, which also applies the gross‑up method; however, PCD loans represent loans that experienced more‑than‑insignificant credit deterioration since origination, while PSLs did not. Under this method, the Corporation recognizes an allowance for credit losses on loans at the acquisition date, with a corresponding increase to the loan's amortized cost basis. The establishment of the ACL - Loans at acquisition did not result in a provision for credit losses or earnings impact on the acquisition date. Expected credit losses as of the acquisition date are recognized through the acquisition‑date allowance for credit losses, while the non‑credit discount reflects all other valuation factors, including differences between contractual interest rates and prevailing market rates, liquidity considerations, and other non‑credit‑related assumptions. The non‑credit discount is accreted into interest income over the remaining life of the loans using the effective interest method. Subsequent changes in expected credit losses for PSLs are recognized through the provision for credit losses in the period in which the estimate changes, consistent with the Corporation's methodology for originated loans measured at amortized cost.

The acquisition date valuations, as well as any measurement period adjustments recognized subsequent to the acquisition date, determine the amount of goodwill recorded. Measurement period adjustments are recorded if new information is obtained about facts and circumstances that existed as of the acquisition date and are reflected as adjustments to goodwill. Because these adjustments affect the fair values of acquired assets and liabilities, including loans and identifiable intangible assets, changes in these estimates could materially affect the amount of goodwill recorded.

The fair value determinations are based on valuation methodologies that incorporate management's assumptions regarding future growth rates, attrition, discount rates, and other relevant factors. In certain circumstances, third party valuation specialists are engaged to assist in the development of these fair value estimates. The valuation of acquired assets and assumed liabilities often requires a significant degree of judgment, particularly when observable market data is limited or unavailable. Changes in these estimates or in economic or market conditions could require adjustments to the carrying values of acquired assets and liabilities, including the recognition of impairment where applicable.

Results of operations of First Savings are included in the income statement from the date of acquisition. Details of the Corporation's acquisitions are included in NOTE 2. ACQUISITIONS of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL HIGHLIGHTS

The table below includes certain financial data of the Corporation for the previous five quarters:


	Three Months Ended
(Dollars in Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2026			2026			2025			2025			2025
Income Statement:
Net interest income	$	158,941		$	151,303		$	139,064		$	133,665		$	133,014
Provision for credit losses	33,000			4,900			7,150			4,300			5,600
Noninterest income	37,156			5,829			33,106			32,477			31,303
Noninterest expense	115,347			125,145			99,522			96,561			93,598
Net income available to common stockholders	43,511			27,687			56,596			56,297			56,363
Per Share Data:
Average diluted common shares outstanding (in thousands)	62,574			61,008			57,442			57,448			57,773
Diluted net income available to common stockholders	$	0.70		$	0.45		$	0.99		$	0.98		$	0.98
Cash dividends paid to common stockholders	0.37			0.36			0.36			0.36			0.36
Common dividend payout ratio (1)	52.86		%	80.00		%	36.36		%	36.90		%	36.73		%
Book value per share	$	42.96		$	42.35		$	42.87		$	41.74		$	40.56
Tangible common book value per share (2)	29.80			29.34			30.18			29.08			27.90
Performance Ratios:
Return on average assets	0.83		%	0.55		%	1.20		%	1.22		%	1.23		%
Return on average stockholders' equity	6.44			4.17			9.23			9.51			9.63
Return on tangible common stockholders' equity(2)	9.80			6.39			13.57			14.21			14.49
Net interest margin	3.25			3.21			3.15			3.09			3.10
Net interest margin (FTE)(2)(3)	3.38			3.35			3.29			3.24			3.25
Efficiency ratio(2)	55.11			74.45			54.52			55.09			53.99
Net charge-offs as % of average loans (annualized)	0.10			0.27			0.18			0.15			0.07
Allowance for credit losses - loans as % of total loans	1.56			1.39			1.42			1.43			1.47
Nonperforming assets / total assets %	0.56			0.43			0.38			0.36			0.36
Balance Sheet:
Total securities	$	3,292,076		$	3,309,902		$	3,378,641		$	3,382,391		$	3,380,956
Total loans	15,608,617			15,663,728			13,811,786			13,614,364			13,325,542
Total assets	21,348,765			21,072,521			19,025,101			18,811,629			18,592,777
Total deposits	16,753,381			16,485,617			15,294,855			14,869,979			14,797,578
Total borrowings	1,603,749			1,644,995			999,934			1,177,854			1,161,077
Total stockholders' equity	2,697,177			2,672,565			2,466,667			2,412,402			2,347,952
Capital Ratios:
Total stockholders' equity to assets	12.63		%	12.68		%	12.97		%	12.82		%	12.63		%
Tangible common equity to tangible assets(2)	8.99			9.00			9.38			9.18			8.92
Total risk-based capital to risk-weighted assets	12.98			13.05			13.41			13.04			13.06
Tier 1 capital to risk-weighted assets	11.30			11.36			11.86			11.49			11.50
Common equity tier 1 capital to risk-weighted assets	11.16			11.22			11.70			11.34			11.35
Tier 1 capital to average assets	9.84			10.23			10.24			10.30			10.20
(1) Cash dividends paid per common share divided by diluted net income per common share.
(2) Non-GAAP financial measures. Refer to the "Non-GAAP Financial Measures" section for reconciliations to GAAP financial measures.
(3) Calculated using a marginal tax rate of 21 percent for all periods.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Results for the three and six months ended June 30, 2026 reflect the partial-period impact of the acquisition of First Savings, which was completed on February 1, 2026. Accordingly, period-over-period changes in assets, loans, deposits, net interest income, noninterest income and noninterest expense reflect the contribution of the acquired operations in addition to changes driven by market conditions, volume, and mix. Further details of the Corporation's acquisition are provided within NOTE 2. ACQUISITIONS of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

The Corporation reported second quarter 2026 net income available to common stockholders and diluted earnings per common share of $43.5 million and $0.70 per diluted share, respectively, compared to $56.4 million and $0.98 per diluted share, respectively, during the second quarter of 2025. The Corporation reported net income available to common stockholders and diluted earnings per common share of $71.2 million and $1.15 per diluted share, respectively, for the six months ended June 30, 2026 compared to $111.2 million and $1.92 per diluted share, respectively, for the six months ended June 30, 2025.

When adjusting for certain non-recurring items, adjusted net income available to common stockholders was $46.4 million and adjusted diluted earnings per common share totaled $0.74 for the second quarter of 2026, compared to $56.4 million and $0.98, respectively, in the second quarter of 2025. Adjusted net income available to common stockholders and adjusted diluted earnings per common share for the six months ended June 30, 2026, totaled $109.5 million and $1.77, respectively, compared to $111.2 million and $1.92, respectively, for the same period in 2025. These adjusted net income and earnings per share amounts are non-GAAP measures. For reconciliations of GAAP earnings per share measures to the corresponding non-GAAP measures provided above, refer to the "NON-GAAP FINANCIAL MEASURES" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

As of June 30, 2026, total assets were $21.3 billion, an increase of $2.3 billion or 12.2 percent from December 31, 2025. The Corporation acquired First Savings on February 1, 2026, which included $2.4 billion in assets at acquisition. Details of the acquisition are discussed within NOTE 2. ACQUISITIONS of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

Cash and due from banks and interest-bearing deposits increased $335.6 million from December 31, 2025, primarily due to proceeds received from the mortgage loan portfolio sale completed on June 30, 2026. Total investment securities decreased by $86.6 million from December 31, 2025, primarily due to $88.9 million of principal paydowns and maturities. Investments represented 15.4 percent of total assets at June 30, 2026, compared to 17.8 percent at December 31, 2025. Additional details of the Corporation's investment securities portfolio are discussed within NOTE 3. INVESTMENT SECURITIES of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

Excluding loans held-for-sale, total loans increased $1.7 billion from December 31, 2025. Loans acquired in the First Savings acquisition contributed $1.8 billion, partially offset by the sale of $271.1 million in mortgage loans. Excluding acquired loans and the impact of loans sold, the Corporation experienced organic loan growth of $202.9 million, or 2.9 percent, since December 31, 2025. The loan portfolio remains predominantly commercial-oriented, with commercial loans comprising 76.6 percent of total loans. Commercial and industrial and commercial real estate, non-owner occupied, represent the largest loan categories at 30.4 percent and 21.1 percent of total loans, respectively. Growth during the period was driven primarily by increases in commercial real estate, non-owner occupied, home equity, commercial and industrial, and commercial real estate, owner occupied loans. Additional details regarding changes in the Corporation's loan portfolio are discussed within NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q, and the "LOAN QUALITY AND PROVISION FOR CREDIT LOSSES ON LOANS" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Corporation's allowance for credit losses - loans ("ACL - Loans") totaled $241.6 million, or 1.56 percent of total loans, as of June 30, 2026, compared to $195.6 million, or 1.42 percent, at December 31, 2025, representing an increase of $46.0 million. The increase reflected a $22.3 million acquisition-date allowance for expected credit losses recognized in connection with the First Savings loan portfolio, and a provision expense recorded during the period, including $29.7 million of specific reserves established during the second quarter related to two commercial lending relationships, partially offset by net charge-offs of $3.9 million. During the three and six months ended June 30, 2026, the Corporation recorded net charge-offs of $3.9 million and $14.2 million, respectively, and provision for credit losses - loans of $33.0 million and $37.9 million, respectively. During the three and six months ended June 30, 2025, the Corporation recorded net charge-offs of $2.3 million and $7.2 million, respectively, and provision for credit losses - loans of $5.6 million and $9.8 million, respectively. Nonaccrual loans as of June 30, 2026 totaled $118.2 million, an increase of $46.4 million from December 31, 2025. The increase was primarily attributable to the two commercial lending relationships discussed above, totaling $41.8 million, being placed on nonaccrual status during the second quarter of 2026. The Corporation's reserve for unfunded commitments increased to $18.5 million at June 30, 2026, from $18.0 million at December 31, 2025, reflecting a $0.5 million Day 1 allowance for credit losses recognized in connection with the First Savings acquisition related to off-balance sheet commitments. The reserve is recorded in other liabilities. There was no provision for credit losses on unfunded commitments recognized during the three and six months ended June 30, 2026. Additional details of the Corporation's allowance methodology and asset quality are discussed within NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q and within the “LOAN QUALITY AND PROVISION FOR CREDIT LOSSES ON LOANS” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Several additional asset categories increased from December 31, 2025 primarily due to the acquisition of First Savings, including goodwill of $76.2 million, cash surrender value of life insurance of $64.8 million, premises and equipment of $27.1 million, other intangibles of $25.2 million, FHLB stock of $23.6 million, and interest receivable of $8.6 million.

The Corporation's net tax asset, deferred and receivable increased $35.3 million from December 31, 2025, primarily driven by the $22.9 million net tax asset recorded as part of the First Savings acquisition and an increase of $11.3 million in income tax receivable.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other assets increased $62.2 million from December 31, 2025, primarily due to $26.5 million of assets acquired in the First Savings acquisition, $28.4 million related to investments in community redevelopment funds, and $5.6 million related to the recognition of a right‑of‑use asset associated with the Corporation’s new Michigan headquarters.

As of June 30, 2026, total deposits equaled $16.8 billion, an increase of $1.5 billion from December 31, 2025, or 19.1 percent on an annualized basis. The acquisition of First Savings contributed $1.7 billion in deposits, partially offset by a decline in deposits of $231.6 million from December 31, 2025 driven by $289.8 million reduction of brokered deposits. Net period activity resulted in increases from December 31, 2025 primarily in demand deposits of $800.0 million, money market and savings deposits of $561.8 million, and time deposits of $201.5 million. Total deposits less time deposits greater than $100,000, or core deposits, represented 91.5 percent of the deposit portfolio at June 30, 2026. Noninterest bearing deposits represented 22.9 percent of the deposit portfolio at June 30, 2026, compared to 14.0 percent at December 31, 2025. Due to balance sheet growth, the loan to deposit ratio increased to 92.7 percent at period end from 90.3 percent as of December 31, 2025.

The average account balance within the deposit portfolio was $39,000 at June 30, 2026. Insured deposits totaled 70.5 percent of total deposits, with the State of Indiana's Public Deposit Insurance Fund, which insures certain public deposits, providing insurance for 15.8 percent of deposits and the Federal Deposit Insurance Corporation ("FDIC") providing insurance to the remaining 54.7 percent. Uninsured deposits represented 29.5 percent of total deposits. The Corporation maintains available liquidity through on-balance-sheet sources and unused borrowing capacity from the Federal Reserve Discount Window, the FHLB and unsecured borrowing sources.

Total borrowings increased $603.8 million at June 30, 2026, compared to December 31, 2025. FHLB advances and subordinated debentures and other borrowings increased $615.5 million and $28.7 million, respectively. The increase in borrowings was primarily attributable to the First Savings acquisition, which included the assumption of $482.7 million of FHLB advances and $28.7 million of subordinated debentures and other borrowings. The remaining increase in FHLB advances was primarily attributable to borrowings used to support loan growth and liquidity needs. Federal funds purchased decreased $40.0 million from December 31, 2025, primarily due to elevated deposit balances during the second quarter, which reduced the Corporation's need for short-term wholesale funding. Additional details regarding the Corporation's subordinated debentures and term loans are discussed in NOTE 9. BORROWINGS of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

The Corporation's other liabilities increased $31.6 million as of June 30, 2026, compared to December 31, 2025, primarily due to $13.8 million of assumed liabilities related to the First Savings acquisition, as well as increases in lease liabilities of $5.6 million related to the new Michigan headquarters and liabilities associated with unfunded commitments of $9.6 million related to the Corporation's affordable housing investments.

Additional paid-in capital increased $208.2 million from December 31, 2025, primarily due to the issuance of $243.2 million of common stock as equity consideration in connection with the First Savings acquisition. The increase was partially offset by $38.3 million of share repurchases under the Corporation's Stock Repurchase Program and other capital activity.

The Corporation continued to maintain all regulatory capital ratios in excess of the regulatory definition of “well-capitalized.” Details of the Stock Repurchase Program and regulatory capital ratios are discussed within the “CAPITAL” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

NON-GAAP FINANCIAL MEASURES

The Corporation's accounting and reporting policies conform to GAAP and general practices within the banking industry. As a supplement to GAAP, the Corporation provides non-GAAP performance measures, which management believes are useful because they assist investors in assessing the Corporation's performance. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure can be found in the following tables.

Adjusted net income available to common stockholders and adjusted diluted earnings per common share are meaningful non-GAAP financial measures for management, as they provide a meaningful foundation for period-to-period and company-to-company comparisons, which management believes will aid both investors and analysts in analyzing our financial measures and predicting future performance.

Net interest income and net interest margin presented on a fully taxable equivalent ("FTE") basis, reflecting the income tax savings when comparing tax-exempt and taxable assets using the federal statutory rate of 21 percent, are non-GAAP financial measures used by management to assess what our tax-exempt assets would need to yield in order to achieve the same after-tax yield as a taxable asset. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on an FTE basis and that it provides useful information for management and investors for peer comparison purposes. Non-GAAP financial measures such as tangible common stockholders' equity, tangible assets, tangible common stockholders' equity to tangible assets, tangible book value per common share, tangible net income available to common stockholders, diluted tangible net income per common share, return on average tangible common stockholders' equity and return on average tangible assets are important measures of the strength of the Corporation's capital and ability to generate earnings on tangible common equity invested by our shareholders. These non-GAAP measures provide useful supplemental information and may assist investors in analyzing the Corporation’s financial position without regard to the effects of intangible assets and preferred stock, but do retain the effect of accumulated other comprehensive losses in stockholders' equity. Disclosure of these measures also allows analysts and banking regulators to assess our capital adequacy on these same bases.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


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,		June 30,		June 30,		June 30,
	2026		2025		2026		2025
Net income available to common stockholders (GAAP)	$	43,511	$	56,363	$	71,198	$	111,233
Adjustments:
Net realized losses on sales of available for sale securities	—		1		—		8
Integration and transaction-related expenses	3,830		—		20,798		—

Net loss on mortgage loans reclassified to held for sale	—		—		29,755		—

Tax on adjustments	(925)		—		(12,204)		(2)
Adjusted net income available to common stockholders (non-GAAP)	$	46,416	$	56,364	$	109,547	$	111,239

Average diluted common shares outstanding (in thousands)	62,574		57,773		61,795		58,005

Diluted earnings per common share (GAAP)	$	0.70	$	0.98	$	1.15	$	1.92
Adjustments:
Net realized losses on sales of available for sale securities	—		—		—		—
Integration and transaction-related expenses	0.06		—		0.34		—

Net loss on mortgage loans reclassified to held for sale	—		—		0.48		—

Tax on adjustments	(0.02)		—		(0.20)		—
Adjusted diluted earnings per common share (non-GAAP)	$	0.74	$	0.98	$	1.77	$	1.92


NET INTEREST INCOME (FTE) AND NET INTEREST MARGIN (FTE) (NON-GAAP)
(Dollars in Thousands, Except Per Share Amounts)
	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2026			2025			2026			2025
Net interest income (GAAP)	$	158,941		$	133,014		$	310,244		$	263,284
FTE adjustment	6,391			6,199			12,785			12,326
Net interest income (FTE) (non-GAAP)	165,332			139,213			323,029			275,610

Average earning assets (GAAP)	$	19,583,204		$	17,158,984		$	19,215,138		$	17,060,278
Net interest margin (GAAP)	3.25		%	3.10		%	3.23		%	3.09		%
FTE adjustment	0.13		%	0.15		%	0.13		%	0.14		%
Net interest margin (FTE) (non-GAAP)	3.38		%	3.25		%	3.36		%	3.23		%


TANGIBLE COMMON STOCKHOLDERS' EQUITY TO TANGIBLE ASSETS (NON-GAAP)
(Dollars in Thousands, Except Per Share Amounts)

	June 30, 2026			December 31, 2025
Total stockholders' equity (GAAP)	$	2,697,177		$	2,466,667
Less: Preferred stock (GAAP)	(25,125)			(25,125)
Less: Intangible assets (GAAP)	(827,158)			(725,802)
Tangible common stockholders' equity (non-GAAP)	$	1,844,894		$	1,715,740
Total assets (GAAP)	$	21,348,765		$	19,025,101
Less: Intangible assets (GAAP)	(827,158)			(725,802)
Tangible assets (non-GAAP)	$	20,521,607		$	18,299,299
Stockholders' equity to assets (GAAP)	12.63		%	12.97		%
Tangible common stockholders' equity to tangible assets (non-GAAP)	8.99		%	9.38		%

Tangible common stockholders' equity (non-GAAP)	$	1,844,894		$	1,715,740
Plus: Tax benefit of intangibles (non-GAAP)	9,084			2,966
Tangible common stockholders' equity, net of tax (non-GAAP)	$	1,853,978		$	1,718,706
Common stock outstanding (in thousands)	62,206			56,952
Book value per common share (GAAP)	$	42.96		$	42.87
Tangible book value per common share (non-GAAP)	$	29.80		$	30.18

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


DILUTED TANGIBLE NET INCOME PER COMMON SHARE, RETURN ON AVERAGE TANGIBLE ASSETS AND RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY (NON-GAAP)
(Dollars in Thousands, Except Per Share Amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Average goodwill (GAAP)	$	782,908		$	712,002		$	771,633		$	712,002
Average other intangibles (GAAP)	40,589			17,599			36,652			18,297
Average deferred tax on other intangibles (GAAP)	(9,889)			(3,788)			(9,156)			(3,937)
Intangible adjustment (non-GAAP)	$	813,608		$	725,813		$	799,129		$	726,362
Average stockholders' equity (GAAP)	$	2,702,249		$	2,340,010		$	2,679,131		$	2,340,440
Average preferred stock (GAAP)	(25,125)			(25,125)			(25,125)			(25,125)

Intangible adjustment (non-GAAP)	(813,608)			(725,813)			(799,129)			(726,362)
Average tangible common stockholders' equity (non-GAAP)	$	1,863,516		$	1,589,072		$	1,854,877		$	1,588,953
Average assets (GAAP)	$	21,253,171		$	18,508,785		$	20,832,683		$	18,425,723
Intangible adjustment (non-GAAP)	(813,608)			(725,813)			(799,129)			(726,362)
Average tangible assets (non-GAAP)	$	20,439,563		$	17,782,972		$	20,033,554		$	17,699,361
Net income available to common stockholders (GAAP)	$	43,511		$	56,363		$	71,198		$	111,233
Other intangible amortization, net of tax (GAAP)	2,137			1,188			3,956			2,394
Tangible net income available to common stockholders (non-GAAP)	45,648			57,551			75,154			113,627
Preferred stock dividend	469			469			938			938
Tangible net income (non-GAAP)	$	46,117		$	58,020		$	76,092		$	114,565
Per Share Data:
Diluted net income available to common stockholders (GAAP)	$	0.70		$	0.98		$	1.15		$	1.92
Diluted tangible net income per common share (non-GAAP)	$	0.73		$	1.00		$	1.22		$	1.96
Ratios:
Return on average stockholders' equity (GAAP)	6.44		%	9.63		%	5.32		%	9.51		%
Return on average tangible common stockholders' equity (non-GAAP)	9.80		%	14.49		%	8.10		%	14.30		%
Return on average assets (GAAP)	0.83		%	1.23		%	0.69		%	1.22		%
Return on average tangible assets (non-GAAP)	0.90		%	1.31		%	0.76		%	1.29		%

Return on average tangible common stockholders' equity is tangible net income (annualized) expressed as a percentage of average tangible common stockholders' equity. Return on average tangible assets is tangible net income (annualized) expressed as a percentage of average tangible assets.


EFFICIENCY RATIO (NON-GAAP)
(Dollars in Thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Noninterest expense (GAAP)	$	115,347		$	93,598		$	240,492		$	186,500
Less: Intangible asset amortization	(2,706)			(1,505)			(5,008)			(3,031)
Less: Other real estate owned and foreclosure expenses	(1,052)			(29)			(2,152)			(629)
Adjusted noninterest expense (non-GAAP)	$	111,589		$	92,064		$	233,332		$	182,840

Net interest income (GAAP)	$	158,941		$	133,014		$	310,244		$	263,284
Plus: FTE adjustment	6,391			6,199			12,785			12,326
Net interest income (FTE) (non-GAAP)	$	165,332		$	139,213		$	323,029		$	275,610

Noninterest income (GAAP)	$	37,156		$	31,303		$	42,985		$	61,351
Less: Net realized losses on sales of available for sale securities	—			1			—			8
Adjusted noninterest income (non-GAAP)	$	37,156		$	31,304		$	42,985		$	61,359
Adjusted revenue (non-GAAP)	$	202,488		$	170,517		$	366,014		$	336,969
Efficiency ratio (non-GAAP)	55.11		%	53.99		%	63.75		%	54.26		%

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest income is the most significant component of the Corporation's earnings, comprising 87.8 percent of total revenue for the six months ended June 30, 2026. Net interest income and net interest margin are influenced by the volume and mix of earning assets and funding sources, as well as prevailing interest rate conditions. Other factors include accretion income on purchased loans, prepayment activity and the composition and maturity of earning assets and interest-bearing liabilities. Loans typically generate more interest income than investment securities with similar maturities. Funding from customer deposits generally costs less than wholesale funding sources. Factors such as general economic activity, the Federal Reserve's monetary policy, and price volatility of competing alternative investments can also exert significant influence on the Corporation's ability to optimize the mix of assets and funding and the net interest income and net interest margin.

Net interest income is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is also presented on an FTE basis in the tables that follow to reflect what the Corporation's tax-exempt assets would need to yield in order to achieve the same after-tax yield as a taxable asset. The federal statutory rate of 21 percent was used for 2026 and 2025. For reconciliations of GAAP net interest margin to the corresponding non-GAAP measures provided below, refer to the "NON-GAAP FINANCIAL MEASURES" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Average Balance Sheet

Three months ended June 30, 2026 and 2025

Total average earning assets increased $2.4 billion, or 14.1 percent, to $19.6 billion for the three months ended June 30, 2026, compared to the same period in 2025. This increase was primarily driven by a $2.6 billion, or 19.6 percent, increase in average total loans, reflecting the impact of loans acquired from First Savings on February 1, 2026, which totaled approximately $1.8 billion at acquisition. Average commercial loans and HELOC and installment loans increased $1.8 billion and $446.6 million, respectively. These increases were partially offset by a $166.5 million decline in average investment securities.

Total average deposits increased $2.0 billion year-over-year, reflective of $1.7 billion in deposits acquired from First Savings. Total average interest-bearing deposits increased $466.8 million, driven primarily by higher money market deposit balances, partially offset by lower interest-bearing transaction deposit balances. The decrease in interest-bearing transaction deposit balances reflected changes to the Corporation’s deposit product offerings, under which certain accounts that previously earned interest were intentionally transitioned to noninterest-bearing products. Average noninterest‑bearing deposits increased $1.5 billion, consistent with those product offering changes. Average borrowings increased $389.9 million, primarily driven by higher FHLB advances, including advances assumed in connection with the First Savings acquisition, and borrowings used to support balance sheet growth and liquidity needs.

Six months ended June 30, 2026 and 2025

Total average earning assets increased $2.2 billion, or 12.6 percent, to $19.2 billion for the six months ended June 30, 2026, compared to the same period in 2025. This increase was primarily driven by a $2.3 billion, or 17.8 percent, increase in average total loans, reflecting the impact of loans acquired from First Savings on February 1, 2026, which totaled approximately $1.8 billion at acquisition. Average commercial loans and HELOC and installment loans, increased $1.6 billion and $371.2 million, respectively. These increases were partially offset by a $137.8 million decline in average investment securities.

Total average deposits increased $1.8 billion year-over-year primarily driven by the impact of $1.7 billion of interest-bearing deposits acquired from First Savings. Total average interest-bearing deposits increased $932.8 million, driven primarily by higher money market deposit balances, partially offset by lower interest-bearing transaction deposit balances. The decrease in interest-bearing transaction deposit balances reflected changes to the Corporation’s deposit product offerings, under which certain accounts that previously earned interest were intentionally transitioned to noninterest-bearing products. Average noninterest‑bearing deposits increased $901.8 million, consistent with those product offering changes. Average borrowings increased $268.3 million, primarily driven by higher FHLB advances, including advances assumed in connection with the First Savings acquisition, partially offset by lower repurchase agreement balances.

Interest Income/Expense and Average Yields

Three months ended June 30, 2026 and 2025

Net interest income on an FTE basis increased $26.1 million, or 18.8 percent, to $165.3 million for the three months ended June 30, 2026, compared to $139.2 million for the three months ended June 30, 2025. Net interest margin on an FTE basis increased 13 basis points to 3.38 percent from 3.25 percent in the prior year quarter. This improvement was driven primarily by growth in average loan balances and favorable changes in funding mix, including higher average noninterest-bearing deposits. The yield on average earning assets decreased four basis points to 5.46 percent from 5.50 percent, while the cost of interest-bearing liabilities decreased two basis points to 2.80 percent from 2.82 percent. The Corporation recognized $3.7 million of fair value accretion income from purchased loans during the quarter, which contributed approximately eight basis points to net interest margin during the three months ended June 30, 2026. This compares to $1.0 million, or three basis points, in the same period of 2025.

Interest income on an FTE basis increased $31.3 million compared to the same period in the prior year, driven primarily by a $2.4 billion increase in average earning assets, which reflected the contribution of loans acquired from First Savings and growth in average loan balances across commercial and HELOC and installment portfolios. Average total loans increased $2.6 billion, or 19.6 percent, year‑over‑year, more than offsetting lower average balances in cash and investment securities.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest expense on deposits increased $2.0 million compared to the prior year period, reflecting a $466.8 million increase in average interest‑bearing deposit balances, partially offset by lower deposit pricing across most deposit categories. Lower average rates on money market, savings deposits, and time deposits reduced interest expense and favorably impacted margin. Borrowing expense increased due to higher average borrowing balances, partially offset by lower average borrowing costs. Overall, the decline in average earning asset yields exceeded the decline in funding costs, resulting in a 2 basis point decline in the FTE net interest spread to 2.66 percent from 2.68 percent in the prior year quarter.

Six months ended June 30, 2026 and 2025

Net interest income on an FTE basis increased $47.4 million, or 17.2 percent, to $323.0 million for the six months ended June 30, 2026, compared to $275.6 million for the six months ended June 30, 2025. Net interest margin on an FTE basis increased 13 basis points to 3.36 percent from 3.23 percent in the prior year. This improvement was driven primarily by a 9 basis point decline in the cost of interest-bearing liabilities to 2.69 percent from 2.78 percent, reflecting lower average deposit costs and favorable changes in funding mix, while yields on average earning assets remained relatively stable at 5.43 percent compared to 5.45 percent in the prior year period. The Corporation recognized $6.5 million of fair value accretion income from purchased loans during the six months, which contributed approximately seven basis points to net interest margin during the six months ended June 30, 2026. This compares to $2.1 million, or two basis points, in the same period of 2025.

Interest income on an FTE basis increased $57.6 million compared to the same period in the prior year, driven primarily by a $2.2 billion increase in average earning assets, which reflected the contribution of loans acquired from First Savings and growth in average loan balances across commercial and HELOC and installment portfolios. Average total loans increased $2.3 billion, or 17.8 percent, year‑over‑year, more than offsetting lower average balances in cash and investment securities.

Interest expense on deposits increased $5.6 million compared to the prior year period, reflecting a $932.8 million increase in average interest‑bearing deposit balances, partially offset by lower deposit pricing across all deposit categories. The total cost of interest‑bearing liabilities declined 9 basis points to 2.69 percent for the six months ended June 30, 2026, from 2.78 percent for the six months ended June 30, 2025. Lower average rates on core deposit products reduced interest expense and favorably impacted margin, while higher average borrowings partially offset these benefits, despite lower average borrowing costs. Overall, the reduction in funding costs more than offset relatively stable asset yields and resulted in a 7 basis point improvement in the FTE net interest spread to 2.74 percent from 2.67 percent in the prior year period.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following tables present the Corporation’s average balance sheet, interest income/interest expense, and the average rate as a percent of average earning assets/liabilities for the three and six months ended June 30, 2026 and 2025.


(Dollars in Thousands)	Three Months Ended
	June 30, 2026						June 30, 2025
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	228,468	$	1,147	2.01	%	$	252,613	$	1,892	3.00	%
Federal Home Loan Bank stock	70,826		1,525		8.61		46,598		1,083		9.30
Investment Securities: (1)
Taxable	1,457,179		7,355		2.02		1,605,718		8,266		2.06
Tax-Exempt (2)	2,024,323		15,769		3.12		2,042,326		15,843		3.10
Total Investment Securities	3,481,502		23,124		2.66		3,648,044		24,109		2.64
Loans held for sale	379,122		4,541		4.79		25,411		389		6.12
Loans: (3)
Commercial	10,809,590		172,562		6.39		9,006,650		154,108		6.84
Real estate mortgage	2,133,638		26,859		5.04		2,200,521		25,062		4.56
HELOC and installment	1,281,529		22,569		7.04		834,901		15,614		7.48
Tax-Exempt (2)	1,198,529		14,903		4.97		1,144,246		13,677		4.78
Total Loans	15,802,408		241,434		6.11		13,211,729		208,850		6.32
Total Earning Assets	19,583,204		267,230		5.46	%	17,158,984		235,934		5.50	%
Total Non-Earning Assets	1,669,967						1,349,801
Total Assets	$	21,253,171					$	18,508,785
Liabilities:
Interest-Bearing Deposits:
Interest-bearing deposits	$	4,515,106	$	31,239	2.77	%	$	5,545,158	$	35,303	2.55	%
Money market deposits	4,731,251		33,269		2.81		3,613,952		28,714		3.18
Savings deposits	1,424,566		2,279		0.64		1,282,951		2,513		0.78
Certificates and other time deposits	2,241,647		19,467		3.47		2,003,682		17,711		3.54
Total Interest-bearing Deposits	12,912,570		86,254		2.67		12,445,743		84,241		2.71
Borrowings	1,640,431		15,644		3.81		1,250,519		12,480		3.99
Total Interest-bearing Liabilities	14,553,001		101,898		2.80		13,696,262		96,721		2.82
Noninterest-bearing deposits	3,725,703						2,186,370
Other liabilities	272,218						286,143
Total Liabilities	18,550,922						16,168,775
Stockholders' Equity	2,702,249						2,340,010
Total Liabilities and Stockholders' Equity	$	21,253,171					$	18,508,785
Net Interest Income (FTE)			$	165,332					$	139,213
Net Interest Spread (FTE) (4)					2.66	%					2.68	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.46	%					5.50	%
Interest Expense / Average Earning Assets					2.08	%					2.25	%
Net Interest Margin (FTE) (5)					3.38	%					3.25	%

(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 utilizing a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on an FTE basis, using a marginal tax rate of 21 percent for 2026 and 2025. These totals equal $6.4 million and $6.2 million for the three months ended June 30, 2026 and 2025, respectively. For reconciliations of GAAP to the corresponding non-GAAP measures provided above, refer to the "NON-GAAP FINANCIAL MEASURES" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.
(3) Nonaccruing 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.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



(Dollars in Thousands)	Six Months Ended
	June 30, 2026						June 30, 2025
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	220,361	$	2,391	2.17	%	$	273,200	$	4,264	3.12	%
Federal Home Loan Bank stock	66,795		3,490		10.45		45,296		2,080		9.18
Investment Securities: (1)
Taxable	1,483,615		14,902		2.01		1,620,005		16,638		2.05
Tax-Exempt (2)	2,043,092		31,715		3.10		2,044,489		31,687		3.10
Total Investment Securities	3,526,707		46,617		2.64		3,664,494		48,325		2.64
Loans held for sale	225,868		5,968		5.28		23,190		708		6.11
Loans: (3)
Commercial	10,523,765		337,327		6.41		8,889,119		301,880		6.79
Real estate mortgage	2,250,726		54,774		4.87		2,195,988		49,508		4.51
HELOC and installment	1,203,122		42,089		7.00		831,904		30,805		7.41
Tax-Exempt (2)	1,197,794		29,537		4.93		1,137,087		27,009		4.75
Total Loans	15,401,275		469,695		6.10		13,077,288		409,910		6.27
Total Earning Assets	19,215,138		522,193		5.43	%	17,060,278		464,579		5.45	%
Total Non-Earning Assets	1,617,545						1,365,445
Total Assets	$	20,832,683					$	18,425,723
Liabilities:
Interest-Bearing Deposits:
Interest-bearing deposits	$	4,970,120	$	61,020	2.46	%	$	5,533,858	$	69,909	2.53	%
Money market deposits	4,649,219		65,317		2.81		3,526,461		54,666		3.10
Savings deposits	1,398,327		4,512		0.65		1,291,133		4,958		0.77
Certificates and other time deposits	2,242,527		39,498		3.52		1,975,923		35,255		3.57
Total Interest-bearing Deposits	13,260,193		170,347		2.57		12,327,375		164,788		2.67
Borrowings	1,524,974		28,817		3.78		1,256,688		24,181		3.85
Total Interest-bearing Liabilities	14,785,167		199,164		2.69		13,584,063		188,969		2.78
Noninterest-bearing deposits	3,100,719						2,198,939
Other liabilities	267,666						302,281
Total Liabilities	18,153,552						16,085,283
Stockholders' Equity	2,679,131						2,340,440
Total Liabilities and Stockholders' Equity	$	20,832,683					$	18,425,723
Net Interest Income (FTE)			$	323,029					$	275,610
Net Interest Spread (FTE) (4)					2.74	%					2.67	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.43	%					5.45	%
Interest Expense / Average Earning Assets					2.07	%					2.22	%
Net Interest Margin (FTE) (5)					3.36	%					3.23	%

(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 utilizing a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on an FTE basis, using a marginal tax rate of 21 percent for 2026 and 2025. These totals equal $12.8 million and $12.3 million for the six months ended June 30, 2026 and 2025, respectively. For reconciliations of GAAP to the corresponding non-GAAP measures provided above, refer to the "NON-GAAP FINANCIAL MEASURES" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.
(3) Nonaccruing 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.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NONINTEREST INCOME

Noninterest income totaled $37.2 million for the three months ended June 30, 2026, representing an increase of $5.9 million, or 18.7 percent, compared to the same period in 2025. The increase was primarily driven by higher customer‑related fees, which increased $4.8 million to $34.3 million for the three months ended June 30, 2026 compared to the same period in 2025. The increase in customer‑related fees was driven primarily by increases in net gains and fees on sales of loans $1.9 million, higher fiduciary and wealth management fees of $0.8 million, increased service charges on deposit accounts of $0.8 million, and higher card payment fees of $0.6 million.

For the six months ended June 30, 2026, noninterest income totaled $43.0 million, representing a decrease of $18.4 million, or 29.9 percent, compared to the same period in 2025. The decrease was driven primarily by a $29.8 million net loss recognized on mortgage loans that had been moved to held-for-sale and marked to fair value in the first quarter, which were sold during the second quarter. This decline was partially offset by higher customer‑related fees, which increased $9.5 million to $66.0 million for the six months ended June 30, 2026 compared to the same period in 2025. Customer-related fee growth was primarily attributable to higher net gains and fees on sales of loans of $3.4 million, higher fiduciary and wealth management fees of $1.9 million, increased service charges on deposit accounts of $1.8 million, and higher card payment fees of $1.3 million.

NONINTEREST EXPENSE

Noninterest expense totaled $115.3 million for the three months ended June 30, 2026, representing an increase of $21.7 million, or 23.2 percent, compared to the same period in 2025. The increase was driven primarily by higher salaries and employee benefits due to the acquisition of First Savings, which increased $11.2 million to $65.8 million for the three months ended June 30, 2026. Other increases include equipment, net occupancy, professional and other outside services, intangible asset amortization, and other real estate owned, which increased $1.7 million, $1.4 million, $1.2 million, $1.2 million and $1.0 million, respectively, during the three months ended June 30, 2026, compared to the same period in 2025. Other expense increased $1.6 million primarily due the write-down of a held-for-sale building and increased travel costs.

For the six months ended June 30, 2026, noninterest expense totaled $240.5 million, representing an increase of $54.0 million, or 29.0 percent, compared to the same period in 2025. The increase was driven primarily by higher salaries and employee benefits, which increased $25.7 million to $135.2 million for the six months ended June 30, 2026. Integration and transaction-related expenses totaling $20.8 million were incurred during the six months ended June 30, 2026, including $10.7 million of contract termination and similar charges, $5.8 million related to salaries and benefits, $3.0 million of acquisition-related professional and advisory services and $1.3 million in miscellaneous costs. Salaries and employee benefits expense, excluding integration and transaction-related expenses, increased by $19.9 million, primarily due to higher salaries and incentive costs during the six months ended June 30, 2026, compared to the same period in 2025. Professional and other outside services, excluding integration and transaction-related expenses, increased $9.6 million during the six months ended June 30, 2026, compared to the same period in 2025. Additionally, equipment, net occupancy and outside data processing fees increased $2.5 million, $2.5 million and $2.2 million, respectively, during the six months ended June 30, 2026, compared to the same period in 2025. Other expense increased $3.1 million primarily due to the write-down of a held-for-sale building, increased travel costs and other miscellaneous expenses.

INCOME TAXES

Income tax expense for the three months ended June 30, 2026 was $3.8 million on pre-tax income of $47.8 million. For the same period in 2025, income tax expense was $8.3 million on pre-tax income of $65.1 million. The effective income tax rates for the second quarter of 2026 and 2025 were 7.9 percent and 12.7 percent, respectively.

Income tax expense for the six months ended June 30, 2026 was $2.7 million on pre-tax income of $74.8 million. For the same period in 2025, income tax expense was $16.2 million on pre-tax income of $128.3 million. The effective income tax rates for the six months ended June 30, 2026 and 2025 were 3.6 percent and 12.6 percent, respectively.

The lower effective income tax rates for the three and six months ended June 30, 2026, when compared to the same periods in 2025, were primarily due to a higher proportion of non-taxable income relative to total income before income taxes and lower income before income taxes in 2026. Lower income before income taxes during the three months ended June 30, 2026 was driven by integration and transaction‑related expenses resulting from the First Savings acquisition and the net loss on mortgage loans reclassified to held for sale. Lower income before income taxes during the six months ended June 30, 2026 was driven by the provision for credit losses of $33.0 million.

The detailed reconciliation of federal statutory to actual tax expense is shown in NOTE 12. INCOME TAXES of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

CAPITAL

Preferred Stock

As part of the Level One acquisition, the Corporation issued 10,000 shares of newly created 7.5 percent non-cumulative perpetual preferred stock, with a liquidation preference of $2,500 per share, in exchange for the outstanding Level One Series B preferred stock, and as part of that exchange, each outstanding Level One depository share representing a 1/100th interest in a share of the Level One preferred stock was converted into a depository share of the Corporation representing a 1/100th interest in a share of its newly issued preferred stock. The Corporation had $25.0 million of outstanding preferred stock at June 30, 2026 and December 31, 2025. During the three and six months ended June 30, 2026 and 2025, the Corporation declared and paid dividends of $46.88 per share (equivalent to $0.4688 per depository share) and $93.76 per share, respectively, equal to $0.5 million and $0.9 million, respectively. The Series A preferred stock qualifies as tier 1 capital for purposes of the regulatory capital calculations.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Stock Repurchase Program

On March 18, 2025, the Board of Directors of the Corporation approved a stock repurchase program of up to 2,927,000 shares of the Corporation's outstanding common stock; provided, however, that the total aggregate investment in shares repurchased under the program may not exceed $100.0 million. On a share basis, the amount of common stock subject to the repurchase program represented approximately 5 percent of the Corporation's outstanding shares at the time the program became effective. During the three and six months ended June 30, 2026, the Corporation repurchased 0.3 million and 1.0 million shares of its common stock, respectively, under the program, for total consideration of $13.4 million and $38.3 million, respectively. The average purchase price was $39.79 and $39.21 per share, respectively. During the three and six months ended June 30, 2025, the Corporation repurchased 0.6 million and 0.8 million shares of its common stock, respectively, under the program, for total consideration of $22.1 million and $30.0 million, respectively. The average purchase prices were $37.93 and $38.62 per share, respectively. The stock repurchase program approved in 2025 was discontinued as of June 24, 2026.

On June 24, 2026, the Board of Directors of the Corporation approved a stock repurchase program of up to 3,125,000 shares of the Corporation's outstanding common stock; provided, however, that the total aggregate investment in shares repurchased under the program may not exceed $100.0 million. On a share basis, the amount of common stock subject to the repurchase program represented approximately 5 percent of the Corporation's outstanding shares at the time the program became effective. No shares had been repurchased under the 2026 stock repurchase program as of June 30, 2026.

In August 2022, the Inflation Reduction Act of 2022 (the "IRA") was enacted. Among other things, the IRA imposes a 1 percent excise tax on the fair market value of stock repurchased after December 31, 2022, by publicly traded U.S. corporations, including the Corporation. With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements. During the three and six months ended June 30, 2026, the Corporation recorded excise tax of $0.1 million and $0.3 million, respectively. During the three and six months ended June 30, 2025, the Corporation recorded excise tax of $0.2 million and $0.3 million, respectively, related to its share repurchases during the period, which is reflected in the Statement of Stockholders' Equity as a component of additional paid-in capital.

Regulatory Capital

Capital adequacy is an important indicator of financial stability and performance. The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category. The assigned capital category is largely determined by four ratios that are calculated according to the regulations: total risk-based capital, tier 1 risk-based capital, common equity tier 1 ("CET1"), and tier 1 leverage ratios. The ratios are intended to measure capital relative to assets and credit risk associated with those assets and off-balance sheet exposures of the entity. The capital category assigned to an entity can also be affected by qualitative judgments made by regulatory agencies about the risk inherent in the entity's activities that are not part of the calculated ratios.

There are five capital categories defined in the regulations, ranging from well capitalized to critically undercapitalized. Classification of a bank in any of the undercapitalized categories can result in actions by regulators that could have a material effect on a bank's operations. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total risk-based capital, tier 1 capital, and CET1 capital, in each case, to risk-weighted assets, and of tier 1 capital to average assets, or leverage ratio, all of which are calculated as defined in the regulations. Banks with lower capital levels are deemed to be undercapitalized, significantly undercapitalized or critically undercapitalized, depending on their actual levels. The appropriate federal regulatory agency may also downgrade a bank to the next lower capital category upon a determination that the bank is in an unsafe or unsound practice. Banks are required to monitor closely their capital levels and to notify their appropriate regulatory agency of any basis for a change in capital category.

Under the fully phased-in Basel III capital rules, the Corporation and the Bank maintain the minimum capital and leverage ratios, including a 2.5 percent capital conservation buffer, as illustrated in the tables below. In order to avoid limitations on capital distributions, including dividends, the Corporation must maintain capital levels above these minimum requirements. The Corporation and Bank have elected to opt-out of including accumulated other comprehensive income in regulatory capital. As of June 30, 2026, the Bank met all capital adequacy requirements to be considered well capitalized under the fully phased-in Basel III capital rules. There is no threshold for well capitalized status for bank holding companies.

The Corporation's and Bank's actual and required capital ratios as of June 30, 2026 and December 31, 2025 were as follows:


					Prompt Corrective Action Thresholds
	Actual				Basel III Minimum Capital Required				Well Capitalized
June 30, 2026	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total risk-based capital to risk-weighted assets
First Merchants Corporation	$	2,310,940	12.98	%	$	1,869,440	10.50	%	N/A		N/A
First Merchants Bank	2,270,446		12.75		1,869,163		10.50		$	1,780,156	10.00	%
Tier 1 capital to risk-weighted assets
First Merchants Corporation	$	2,011,580	11.30	%	$	1,513,356	8.50	%	N/A		N/A
First Merchants Bank	2,047,527		11.50		1,513,132		8.50		$	1,424,124	8.00	%
Common equity tier 1 capital to risk-weighted assets
First Merchants Corporation	$	1,986,580	11.16	%	$	1,246,293	7.00	%	N/A		N/A
First Merchants Bank	2,047,527		11.50		1,246,109		7.00		$	1,157,101	6.50	%
Tier 1 capital to average assets
First Merchants Corporation	$	2,011,580	9.84	%	$	817,364	4.00	%	N/A		N/A
First Merchants Bank	2,047,527		9.96		822,040		4.00		$	1,027,550	5.00	%

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


					Prompt Corrective Action Thresholds
	Actual				Basel III Minimum Capital Required				Well Capitalized
December 31, 2025	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total risk-based capital to risk-weighted assets
First Merchants Corporation	$	2,121,288	13.41	%	$	1,660,386	10.50	%	N/A		N/A
First Merchants Bank	2,074,790		13.11		1,661,540		10.50		$	1,582,419	10.00	%
Tier 1 capital to risk-weighted assets
First Merchants Corporation	$	1,875,892	11.86	%	$	1,344,122	8.50	%	N/A		N/A
First Merchants Bank	1,876,817		11.86		1,345,056		8.50		$	1,265,935	8.00	%
Common equity tier 1 capital to risk-weighted assets
First Merchants Corporation	$	1,850,892	11.70	%	$	1,106,924	7.00	%	N/A		N/A
First Merchants Bank	1,876,817		11.86		1,107,693		7.00		$	1,028,572	6.50	%
Tier 1 capital to average assets
First Merchants Corporation	$	1,875,892	10.24	%	$	732,768	4.00	%	N/A		N/A
First Merchants Bank	1,876,817		10.18		737,699		4.00		$	922,124	5.00	%

On February 1, 2026, the Corporation assumed $29.0 million of subordinated notes in conjunction with its acquisition of First Savings.

Management believes the disclosed capital ratios are meaningful measurements for evaluating the safety and soundness of the Corporation. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations. The Federal Reserve focuses its assessment of capital adequacy on a component of tier 1 capital known as CET1. Because the Federal Reserve has long indicated that voting common stockholders' equity (essentially tier 1 risk-based capital less preferred stock and non-controlling interest in subsidiaries) generally should be the dominant element in tier 1 risk-based capital, this focus on CET1 is consistent with existing capital adequacy categories. Tier I regulatory capital consists primarily of total common stockholders’ equity and subordinated debentures issued to business trusts categorized as qualifying borrowings, less non-qualifying intangible assets and unrealized net securities gains or losses.

A reconciliation of regulatory measures are detailed in the following table as of the dates indicated.


	June 30, 2026						December 31, 2025
(Dollars in Thousands)	First Merchants Corporation			First Merchants Bank			First Merchants Corporation			First Merchants Bank
Total Risk-Based Capital
Total Stockholders' Equity (GAAP)	$	2,697,177		$	2,734,712		$	2,466,667		$	2,469,036
Adjust for Accumulated Other Comprehensive Loss (1)	133,593			131,706			130,135			128,247
Less: Preferred Stock	(25,125)			(125)			(25,125)			(125)
Add: Qualifying Capital Securities	25,000			—			25,000			—

Less: Disallowed Goodwill and Intangible Assets	(815,322)			(814,874)			(720,688)			(720,241)


Less: Disallowed Deferred Tax Assets	(3,743)			(3,892)			(97)			(100)
Total Tier 1 Capital (Regulatory)	2,011,580			2,047,527			1,875,892			1,876,817
Qualifying Subordinated Debentures	76,409			—			47,559			—
Allowance for Credit Losses Includible in Tier 2 Capital	222,951			222,919			197,837			197,973
Total Risk-Based Capital (Regulatory)	$	2,310,940		$	2,270,446		$	2,121,288		$	2,074,790

Net Risk-Weighted Assets (Regulatory)	$	17,804,188		$	17,801,556		$	15,813,198		$	15,824,187
Average Assets (Regulatory)	$	20,434,106		$	20,551,004		$	18,319,204		$	18,442,484

Total Risk-Based Capital Ratio (Regulatory)	12.98		%	12.75		%	13.41		%	13.11		%
Tier 1 Capital to Risk-Weighted Assets (Regulatory)	11.30		%	11.50		%	11.86		%	11.86		%
Tier 1 Capital to Average Assets (Regulatory)	9.84		%	9.96		%	10.24		%	10.18		%

CET1 Capital Ratio
Total Tier 1 Capital (Regulatory)	$	2,011,580		$	2,047,527		$	1,875,892		$	1,876,817
Less: Qualified Capital Securities	(25,000)			—			(25,000)			—


CET1 Capital (Regulatory)	$	1,986,580		$	2,047,527		$	1,850,892		$	1,876,817

Net Risk-Weighted Assets (Regulatory)	$	17,804,188		$	17,801,556		$	15,813,198		$	15,824,187
CET1 Capital Ratio (Regulatory)	11.16		%	11.50		%	11.70		%	11.86		%

(1) Includes net unrealized gains or losses on available for sale securities and amounts resulting from the application of the applicable accounting guidance for defined benefit and other postretirement plans.

In management's view, certain non-GAAP financial measures, when taken together with the corresponding GAAP financial measures and ratios, provide meaningful supplemental information regarding our performance. We believe investors benefit from referring to these non-GAAP financial measures and ratios in assessing our operating results, related trends, and when forecasting future periods. However, these non-GAAP financial measures should be considered in addition to, and not a substitute for or preferable to, financial measures and ratios presented in accordance with GAAP.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Corporation's tangible common equity measures are capital adequacy metrics that are meaningful to the Corporation, as well as analysts and investors, in assessing the Corporation's use of equity and in facilitating period-to-period and company-to-company comparisons. Tangible common equity to tangible assets ratio was 8.99 percent at June 30, 2026, and 9.38 percent at December 31, 2025.

Non-GAAP financial measures such as tangible common equity to tangible assets, tangible earnings per share, return on average tangible assets and return on average tangible equity are important measures of the strength of the Corporation's capital and ability to generate earnings on tangible common equity invested by our shareholders. These non-GAAP measures provide useful supplemental information and may assist investors in analyzing the Corporation’s financial position without regard to the effects of intangible assets and preferred stock, but retain the effect of accumulated other comprehensive losses in stockholders' equity. Disclosure of these measures also allows analysts and banking regulators to assess our capital adequacy on these same bases.

The tables within the “NON-GAAP FINANCIAL MEASURES” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations reconcile traditional GAAP measures to these non-GAAP financial measures at June 30, 2026 and December 31, 2025.

LOAN QUALITY AND PROVISION FOR CREDIT LOSSES ON LOANS

The Corporation’s primary lending focus is small business and middle market commercial, commercial real estate, public finance and residential real estate, which results in portfolio diversification. Commercial loans are individually underwritten and judgmentally risk rated. They are periodically monitored and prompt corrective actions are taken on deteriorating loans. Consumer loans are typically underwritten with statistical decision-making tools and are managed throughout their life cycle on a portfolio basis.

Loan Maturities

The following tables present the maturity distribution of our loan portfolio, excluding loans held for sale, by collateral classification at June 30, 2026 according to contractual maturities of (1) one year or less, (2) after one year but within five years and (3) after five years.

The tables also present the portion of loans by loan classification that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index.


	June 30, 2026
(Dollars in Thousands)	Maturing Within 1 Year		Maturing 1-5 Years		Maturing Over 5 Years		Total
Commercial and industrial loans	$	925,195	$	3,231,634	$	563,612	$	4,720,441
Agricultural land, production and other loans to farmers	96,437		38,238		188,673		323,348
Real estate loans:
Construction	271,507		411,206		191,706		874,419
Commercial real estate, non-owner occupied	556,518		1,592,039		1,123,063		3,271,620
Commercial real estate, owner occupied	204,055		679,150		485,422		1,368,627
Residential	43,302		176,140		2,142,038		2,361,480
Home Equity	21,579		16,700		1,080,383		1,118,662
Individuals' loans for household and other personal expenditures	28,169		91,992		29,717		149,878
Public finance and other commercial loans	75,031		308,305		958,926		1,342,262
Total	$	2,221,793	$	6,545,404	$	6,763,540	$	15,530,737


	June 30, 2026
(Dollars in Thousands)	Maturing Within 1 Year		Maturing 1-5 Years		Maturing Over 5 Years		Total
Commercial and industrial loans	$	78,575	$	419,042	$	150,056	$	647,673
Agricultural land, production and other loans to farmers	3,339		22,242		10,190		35,771
Real estate loans:
Construction	598		20,374		151,856		172,828
Commercial real estate, non-owner occupied	160,828		593,115		442,656		1,196,599
Commercial real estate, owner occupied	108,667		287,390		85,743		481,800
Residential	26,658		95,721		912,510		1,034,889
Home Equity	10,101		5,605		14,871		30,577
Individuals' loans for household and other personal expenditures	2,767		61,916		18,596		83,279
Public finance and other commercial loans	4,439		114,241		933,855		1,052,535
Total loans with fixed interest rates	$	395,972	$	1,619,646	$	2,720,333	$	4,735,951

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


	June 30, 2026
(Dollars in Thousands)	Maturing Within 1 Year		Maturing 1-5 Years		Maturing Over 5 Years		Total
Commercial and industrial loans	$	846,620	$	2,812,592	$	413,556	$	4,072,768
Agricultural land, production and other loans to farmers	93,098		15,996		178,483		287,577
Real estate loans:
Construction	270,909		390,832		39,850		701,591
Commercial real estate, non-owner occupied	395,690		998,924		680,407		2,075,021
Commercial real estate, owner occupied	95,388		391,760		399,679		886,827
Residential	16,644		80,419		1,229,528		1,326,591
Home Equity	11,478		11,095		1,065,512		1,088,085
Individuals' loans for household and other personal expenditures	25,402		30,076		11,121		66,599
Public finance and other commercial loans	70,592		194,064		25,071		289,727
Total loans with variable interest rates	$	1,825,821	$	4,925,758	$	4,043,207	$	10,794,786

Loan Quality

The quality of the loan portfolio and the amount of nonperforming loans may increase or decrease as a result of acquisitions, organic portfolio growth, problem loan recognition and resolution through collections, sales or charge-offs. The performance of any loan can be affected by external factors such as economic conditions, or internal factors specific to a particular borrower, such as the actions of a customer's internal management.

At June 30, 2026, nonaccrual loans totaled $118.2 million, an increase of $46.4 million from December 31, 2025, primarily attributable to the placement of two commercial lending relationships, totaling $41.8 million, on nonaccrual status during the second quarter of 2026. The increase was also driven by increases in the commercial real estate, non-owner occupied, commercial real estate, owner occupied, and residential loan classes of $8.0 million, $4.7 million, and $3.4 million, respectively. The increase was partially offset by a decrease in the construction loan class of $12.7 million.

At June 30, 2026, loans 90-days or more delinquent and still accruing totaled $9.7 million, an increase of $7.7 million from December 31, 2025, as the commercial real estate, non-owner occupied, and commercial and industrial loan classes increased $4.7 million and $3.1 million, respectively.

The Corporation's nonperforming assets plus accruing loans 90-days or more delinquent are presented in the table below.


(Dollars in Thousands)	June 30, 2026		December 31, 2025
Nonperforming Assets:
Nonaccrual loans	$	118,203	$	71,773
Other real estate owned and repossessions	1,562		658
Nonperforming assets	119,765		72,431
Accruing loans 90+ days delinquent	9,738		2,042
Nonperforming assets and loans 90-days or more delinquent	$	129,503	$	74,473

The composition of nonperforming assets plus accruing loans 90-days or more delinquent is reflected in the following table by loan class.


(Dollars in Thousands)	June 30, 2026		December 31, 2025
Nonperforming assets and loans 90-days or more delinquent:
Commercial and industrial loans	$	54,516	$	10,861
Agricultural land, production and other loans to farmers	192		250
Real estate loans:
Construction	9,914		23,776
Commercial real estate, non-owner occupied	13,602		837
Commercial real estate, owner occupied	8,825		3,705
Residential	34,701		30,786
Home equity	6,671		4,238
Individuals' loans for household and other personal expenditures	18		20
Public finance and other commercial loans	1,064		—
Nonperforming assets and loans 90-days or more delinquent:	$	129,503	$	74,473

Provision Expense and Allowance for Credit Losses on Loans

The CECL model requires the measurement of all expected credit losses for financial assets measured at amortized cost based on historical experience, current conditions, and reasonable and supportable forecasts. CECL also requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as credit quality and underwriting standards of an organization's portfolio. Additional details of the Corporation's CECL methodology and allowance calculation are discussed within NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

The CECL allowance is maintained through the provision for credit losses, which is a charge against earnings. Based on management’s judgment as to the appropriate level of the allowance for credit losses, the amount provided in any period may be greater or less than net loan

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

losses for the same period. The determination of the provision amount and the adequacy of the allowance in any period is based on management’s continuing review and evaluation of the loan portfolio.

The Corporation’s loan balances, excluding loans held for sale, increased $1.7 billion from December 31, 2025, to $15.5 billion at June 30, 2026. The ACL - Loans increased $46.0 million from December 31, 2025, to $241.6 million at June 30, 2026. As a percentage of loans, the ACL - Loans was 1.56 percent and 1.42 percent at June 30, 2026 and December 31, 2025, respectively.

The Corporation’s credit loss experience is presented in the table below for the periods indicated.


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in Thousands)	2026			2025			2026			2025
Allowance for credit losses - loans:
Beginning balance	$	212,520		$	192,031		$	195,597		$	192,757
Loans charged off	(6,237)			(4,251)			(17,416)			(10,433)
Recoveries on loans	2,332			1,936			3,255			3,192
Net charge-offs	(3,905)			(2,315)			(14,161)			(7,241)
Provision for credit losses - loans	33,000			5,600			37,900			9,800
CECL Day 1 PSL ACL - loans	—			—			15,212			—
CECL Day 1 PCD ACL - loans	—			—			7,067			—
Balances, June 30	$	241,615		$	195,316		$	241,615		$	195,316
Ratio of net charge-offs during the period to average loans outstanding during the period	0.10		%	0.07		%	0.19		%	0.11		%
Ratio of allowance for credit losses - loans to nonaccrual loans	204.4		%	290.0		%	204.4		%	290.0		%
Ratio of allowance for credit losses - loans to total loans outstanding	1.56		%	1.47		%	1.56		%	1.47		%

Net charge-offs totaling $3.9 million and $14.2 million were recognized for the three and six months ended June 30, 2026, respectively, and provision for credit losses - loans of $33.0 million and $37.9 million, respectively, was recorded for the same periods. Net charge-offs totaling $2.3 million and $7.2 million were recognized for the three and six months ended June 30, 2025, respectively, and provision for credit losses - loans of $5.6 million and $9.8 million, respectively, was recorded.

The distribution of the net charge-offs (recoveries) for the three and six months ended June 30, 2026 and 2025 are reflected in the following table.


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in Thousands)	2026		2025		2026		2025
Net charge-offs (recoveries):
Commercial and industrial loans	$	89	$	592	$	9,575	$	4,521

Real estate loans:
Construction	(1)		63		(2)		63
Commercial real estate, non-owner occupied	3,336		(20)		3,398		172
Commercial real estate, owner occupied	206		(4)		263		200
Residential	153		210		525		580
Home equity	(342)		1,125		(214)		1,060
Individuals' loans for household and other personal expenditures	464		349		616		645

Total net charge-offs (recoveries)	$	3,905	$	2,315	$	14,161	$	7,241

Management continually evaluates the commercial loan portfolio by including consideration of specific borrower cash flow analysis and estimated collateral values, types and amounts on nonperforming loans, past and anticipated credit loss experience, changes in the composition of the loan portfolio, and the current condition and amount of loans outstanding. The determination of the provision for credit losses in any period is based on management’s continuing review and evaluation of the loan portfolio, and its judgment as to the impact of current economic conditions on the portfolio. The Corporation continues to monitor economic forecast changes, loan growth and credit quality to determine provision needs in the future.

LIQUIDITY

Liquidity management is the process by which the Corporation ensures that adequate liquid funds are available for the holding company and its subsidiaries. These funds are necessary to meet financial commitments on a timely basis. These commitments include withdrawals by depositors, funding credit obligations to borrowers, paying dividends to stockholders, paying operating expenses, funding capital expenditures, and maintaining deposit reserve requirements. Liquidity is monitored and closely managed by the asset/liability committee.

The Corporation’s liquidity is dependent upon the receipt of dividends from the Bank, which is subject to certain regulatory limitations, and access to other funding sources. Liquidity of the Bank is derived primarily from core deposit growth, principal payments received on loans, the sale and maturity of investment securities, net cash provided by operating activities, and access to other funding sources.

The principal source of asset-funded liquidity is investment securities classified as available for sale, the market values of which totaled $1.4 billion at June 30, 2026, a decrease of $22.7 million from December 31, 2025. Securities classified as held to maturity that are maturing

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

within a short period of time can also be a source of liquidity. Securities classified as held to maturity that are maturing in one year or less totaled $20.1 million at June 30, 2026. In addition, other types of assets such as cash and interest-bearing deposits with other banks, federal funds sold, and loans maturing within one year are sources of liquidity.

The most stable source of liability-funded liquidity for both the long-term and short-term is deposit growth and retention in the core deposit base. Federal funds purchased and securities sold under agreements to repurchase are also considered sources of liquidity. In addition, FHLB advances and Federal Reserve Discount Window borrowings are utilized as funding sources. At June 30, 2026, total borrowings from the FHLB were $1.4 billion and there were no outstanding borrowings from the Federal Reserve Discount Window. The Bank has pledged certain mortgage loans and investments to the FHLB and Federal Reserve. The total available remaining borrowing capacity from the FHLB and Federal Reserve at June 30, 2026 was $749.3 million and $6.6 billion, respectively.

The following table presents the Corporation's material cash requirements from known contractual and other obligations at June 30, 2026:


	Payments Due In
(Dollars in Thousands)	One Year or Less		Over One Year		Total
Deposits without stated maturity	$	14,614,077	$	—	$	14,614,077
Certificates and other time deposits	1,931,840		207,464		2,139,304
Securities sold under repurchase agreements	103,340		—		103,340
Federal Home Loan Bank advances	680,103		733,956		1,414,059

Subordinated debentures and other borrowings	985		85,365		86,350
Total	$	17,330,345	$	1,026,785	$	18,357,130

Also, in the normal course of business, the Bank is a party to a number of other off-balance sheet activities that contain credit, market and operational risk that are not reflected in whole or in part in our consolidated financial statements. These activities primarily consist of traditional off-balance sheet credit-related financial instruments such as loan commitments and standby letters of credit.

Summarized credit-related financial instruments at June 30, 2026 are as follows:


(Dollars in Thousands)	June 30, 2026
Amounts of commitments:
Loan commitments to extend credit	$	5,971,657
Standby and commercial letters of credit	93,827
	$	6,065,484

Since many of the commitments are expected to expire unused or be only partially used, the total amount of unused commitments in the preceding table does not necessarily represent future cash requirements.

INTEREST SENSITIVITY AND DISCLOSURE ABOUT MARKET RISK

Asset/Liability management has been an important factor in the Corporation's ability to record consistent earnings growth through periods of interest rate volatility and product deregulation. Management and the Board of Directors monitor the Corporation's liquidity and interest sensitivity positions at regular meetings to review how changes in interest rates may affect earnings. Decisions regarding investment and the pricing of loan and deposit products are made after analysis of reports designed to measure liquidity, rate sensitivity, the Corporation’s exposure to changes in net interest income given various rate scenarios and the economic and competitive environments.

It is the objective of the Corporation to monitor and manage risk exposure to net interest income caused by changes in interest rates. It is the goal of the Corporation’s Asset/Liability management function to provide optimum and stable net interest income. To accomplish this, management uses two asset liability tools. GAP/Interest Rate Sensitivity Reports and Net Interest Income Simulation Modeling are constructed, presented and monitored quarterly. Management believes that the Corporation's liquidity and interest sensitivity position at June 30, 2026, remained adequate to meet the Corporation’s primary goal of achieving optimum interest margins while avoiding undue interest rate risk.

Net interest income simulation modeling, or earnings-at-risk, measures the sensitivity of net interest income to various interest rate movements. The Corporation's asset liability process monitors simulated net interest income under three separate interest rate scenarios; base, rising and falling. Estimated net interest income for each scenario is calculated over a twelve-month horizon. The immediate and parallel changes to the base case scenario used in the model are presented below. The interest rate scenarios are used for analytical purposes and do not necessarily represent management's view of future market movements. Rather, these are intended to provide a measure of the degree of volatility interest rate movements may introduce into the earnings of the Corporation.

The base scenario is highly dependent on numerous assumptions embedded in the model, including assumptions related to future interest rates. While the base sensitivity analysis incorporates management's best estimate of interest rate and balance sheet dynamics under various market rate movements, the actual behavior and resulting earnings impact will likely differ from those projected. For certain assets, the base simulation model captures the expected prepayment behavior under changing interest rate environments. Assumptions and methodologies regarding the interest rate or balance behavior of indeterminate maturity products, such as savings, money market, interest-bearing and demand deposits, reflect management's best estimate of expected future behavior. Historical retention rate assumptions are applied to non-maturity deposits for modeling purposes.

PART I: FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table presents the estimated impact of immediate, parallel interest rate shocks of +100, +200, -100, and -200 basis points relative to the base case scenario as of June 30, 2026 and December 31, 2025. The change from the base case represents the cumulative change in net interest income over a twelve-month horizon. All balance sheet assumptions used in the rate shock scenarios are consistent with those applied in the base case simulation.


	June 30, 2026		December 31, 2025
Rising 200 basis points from base case	2.6	%	4.5	%
Rising 100 basis points from base case	1.5	%	2.4	%
Falling 100 basis points from base case	(1.6)	%	(2.8)	%
Falling 200 basis points from base case	(3.8)	%	(5.6)	%

OTHER

The Securities and Exchange Commission maintains a website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the Commission, including the Corporation, at https://www.sec.gov.

PART I: FINANCIAL INFORMATION

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required under this item is included as part of Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the headings “LIQUIDITY” and “INTEREST SENSITIVITY AND DISCLOSURE ABOUT MARKET RISK”.

PART I: FINANCIAL INFORMATION

ITEM 4. CONTROLS AND PROCEDURES

At the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective and timely, providing them with material information relating to the Corporation required to be disclosed in the reports the Corporation files or submits under the Exchange Act. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There have been no changes in the Corporation’s internal control over financial reporting identified that occurred during the Corporation’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1., ITEM 1A., ITEM 2., ITEM 3., ITEM 4. AND ITEM 5.

(table dollar amounts in thousands, except share data)

ITEM 1. LEGAL PROCEEDINGS

There are no pending legal proceedings, other than litigation incidental to the ordinary business of the Corporation or its subsidiaries, of a material nature to which the Corporation or its subsidiaries is a party or of which any of their properties is subject. Further, there are no material legal proceedings in which any director, officer, principal shareholder, or affiliate of the Corporation, or any associate of any such director, officer or principal shareholder, is a party, or has a material interest, adverse to the Corporation.

None of the routine legal proceedings, individually or in the aggregate, in which the Corporation or its affiliates are involved are expected to have a material adverse impact on the consolidated financial position, results of operations and cash flows of the Corporation.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a. None

b. None

c. Issuer Purchases of Equity Securities

The following table presents information relating to our purchases of equity securities during the three months ended June 30, 2026.


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as part of Publicly announced Plans or Programs (2)(3)	Maximum Number of Shares that may yet be Purchased Under the Plans or Programs (2)(3)
April, 2026	152,568	$	39.78	151,794	923,496
May, 2026	184,351	$	39.80	184,351	739,145
June, 2026	618	$	42.81	—	3,125,000
Total	337,537	$	39.80	336,145

(1) During the three months ended June 30, 2026, there were 336,145 shares repurchased pursuant to the Corporation's share repurchase program described in note (2) below. The amounts in April 2026 and June 2026 include 774 and 618 shares, respectively, repurchased pursuant to net settlement by employees in satisfaction of income tax withholding obligations incurred through the vesting of the Corporation's restricted stock awards and are not a part of the Corporation's share repurchase program described in note (2) below.

(2) On March 18, 2025, the Board of Directors of the Corporation approved a stock repurchase program of up to 2,927,000 shares of the Corporation's outstanding common stock; provided, however, that the total aggregate investment in shares repurchased under the program may not exceed $100,000,000. Since commencing the program, the Corporation has repurchased a total of 2,187,855 shares of common stock for a total aggregate investment of $85.2 million. The program was replaced by the stock repurchase program described in note (3) below.

(3) On June 24, 2026, the Board of Directors of the Corporation approved a stock repurchase program of up to 3,125,000 shares of the Corporation's outstanding common stock; provided, however, that the total aggregate investment in shares repurchased under the program may not exceed $100,000,000. The program does not have an expiration date. However, it may be discontinued by the Board at any time. Since commencing the program, the Corporation has repurchased no shares of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

a. None

b. None

c. During the three months ended June 30, 2026, no director or officer of the Corporation adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

PART II: OTHER INFORMATION

ITEM 6. EXHIBITS


Exhibit No:			Description of Exhibits:

2.1*			Agreement and Plan of Merger between First Merchants Corporation and First Savings Financial Group, Inc. dated September 24, 2025 (Incorporated by reference to Exhibit 2.1 of registrants Form 8-K filed on September 25, 2025) (SEC No. 000-17071)
3.1			First Merchants Corporation Articles of Incorporation, as amended (Incorporated by reference to Exhibit 3.1 of registrant’s Form 8-K filed on May 22, 2024) (SEC No. 000-17071)
3.2			Bylaws of First Merchants Corporation effective as of May 20, 2024 (Incorporated by reference to Exhibit 3.2 of registrant’s Form 8-K filed on May 22, 2024) (SEC No. 001-41342)
4.1			First Merchants Corporation Amended and Restated Declaration of Trust of First Merchants Capital Trust II dated as of July 2, 2007 (Incorporated by reference to Exhibit 4.1 of registrant's Form 8-K filed on July 3, 2007) (SEC No. 000-17071)
4.2			Indenture dated as of July 2, 2007 (Incorporated by reference to Exhibit 4.2 of registrant's Form 8-K filed on July 3, 2007) (SEC No. 000-17071)
4.3			Guarantee Agreement dated as of July 2, 2007 (Incorporated by reference to Exhibit 4.3 of registrant's Form 8-K filed on July 3, 2007) (SEC No. 000-17071)
4.4			Form of Capital Securities Certification of First Merchants Capital Trust II (Incorporated by reference to Exhibit 4.4 of registrant's Form 8-K filed on July 3, 2007) (SEC No. 000-17071)
4.5			First Merchants Corporation Dividend Reinvestment and Stock Purchase Plan (Incorporated by reference to registrant’s Prospectus filed pursuant to Rule 424(b)(3) on July 17, 2020) (SEC No. 333-229527)
4.6			Deposit Agreement by and among First Merchants Corporation, Broadridge Corporate Issuer Solutions, Inc., as depositary, and holders from time to time of the depositary receipts described therein, as amended on March 30, 2022 (Incorporated by reference to Exhibit 4.1 of registrant’s Form 8-A filed on March 30, 2022) (SEC No. 001-41342)
4.7			Form of Depositary Receipt (Incorporated by reference to Exhibit 4.2 of registrant’s Form 8-A filed on March 30, 2022) (SEC No. 001-41342)
4.8			Indenture, dated as of December 18, 2019, between First Merchants Corporation (as successor to Level One Bancorp, Inc.) and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibit 4.1 of Level One Bancorp, Inc.’s Form 8-K filed on December 19, 2019) (SEC No. 001-38458)
4.9			First Supplemental Indenture, dated as of March 31, 2022, among First Merchants Corporation, Level One Bancorp, Inc. and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibit 4.11 of registrant’s Form 10-K filed on March 1, 2023) (SEC No. 001-41342)
4.10			Form of 4.75% Fixed-to-Floating Rate Subordinated Notes due 2029 (Incorporated by reference to Exhibit 4.2 of Level One Bancorp, Inc.’s Form 8-K filed on December 19, 2019) (SEC No. 001-38458)
4.11			Upon request, the registrant agrees to furnish supplementally to the Commission a copy of the instruments defining the rights of holders of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2032 in the aggregate principal amount of $29 million.
31.1			Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (1)
31.2			Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (1)
32			Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 (2)
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (1)
101.SCH			Inline XBRL Taxonomy Extension Schema Document (1)
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document (1)
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document (1)
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document (1)
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document (1)
104			Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101)

(1)			Filed herewith.
(2)			Furnished herewith.
*			Schedules to the subject agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished to the Securities and Exchange Commission upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			First Merchants Corporation
			(Registrant)


July 31, 2026			by /s/ Mark K. Hardwick
			Mark K. Hardwick
			Chief Executive Officer
			(Principal Executive Officer)

July 31, 2026			by /s/ Michele M. Kawiecki
			Michele M. Kawiecki
			Executive Vice President, Chief Financial Officer
			(Principal Financial and Accounting Officer)

First Merchants Corporation - 10-Q quarterly report FY2026 Q2

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