NET INCOME PER COMMON SHARE

Basic net income per common share is computed 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 table reconciles basic and diluted net income per common share for the years indicated:


	2025					2024					2023
	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		Weighted-Average Common Shares	Per Share Amount

Net income available to common stockholders	$	224,126	57,456,772	$	3.90	$	199,527	58,312,575	$	3.42	$	221,911	59,304,879	$	3.74
Effect of potentially dilutive stock options and restricted stock awards			269,437					219,990					183,641
Diluted net income per common share	$	224,126	57,726,209	$	3.88	$	199,527	58,532,565	$	3.41	$	221,911	59,488,520	$	3.73
RSAs excluded from the diluted average common share calculation			59,611					92,175					69,421

As of December 31, 2025, 2024 and 2023, there were no stock options with an option price greater than the average market price of the common shares.

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

FIRST MERCHANTS CORP Earnings Per Share Disclosure

About Earnings Per Share Disclosures

Other Available Disclosures