Executive Summary

FSFG delivered Q4 FY2025 GAAP diluted EPS of $0.75 ($0.82 non-GAAP) on net income of $5.3M; revenue strength came from higher net interest income (NII) and stronger noninterest income from HELOC and SBA loan sales . Versus S&P Global consensus, EPS modestly missed ($0.82 actual vs $0.84*) while revenue materially beat ($21.2M* vs $17.3M*) .
Core banking fundamentals improved: tax-equivalent NIM rose to 3.07% (from 2.99% in Q3 and 2.93% in Q2), while efficiency was 67.1% (vs 64.5% in Q3) as compensation and incentive accruals rose with performance .
Credit quality remained solid: NPLs/loans improved YoY to 0.77% and ACL/NPL coverage rose to 138.7%; quarterly net charge-offs increased to 0.03% of avg loans (driven partly by unguaranteed SBA) but remain low .
Strategic backdrop: merger with First Merchants (FRME) progressing; FSFG holders to receive 0.85 FRME shares per FSFG share, with close targeted for Q1 2026—likely a dominant stock narrative near-term .
Deposits mix improved (customer deposits +$118.2M YoY; brokered -$289.2M), offset by higher FHLB borrowings (+$133.4M YoY); tangible book value per share rose to $26.28 .

What Went Well and What Went Wrong

What Went Well

“Third consecutive profitable quarter” in SBA Lending with solid originations and sales; management emphasized “strong performance” and improving trends across ROAA/ROAE/NIM and efficiency vs last year .
Tax-equivalent NIM expanded to 3.07% and NII rose 13.6% YoY in Q4; efficiency improved YoY (67.1% vs 70.6%) as operating leverage benefited from mix and noninterest income (HELOC and SBA gains) .
Customer deposit growth (+$118.2M YoY) and reduced reliance on brokered deposits (-$289.2M) strengthened funding quality; TBVPS increased to $26.28, supporting capital resilience .

What Went Wrong

Slight EPS miss vs S&P consensus ($0.82 actual vs $0.84*), with higher effective tax rate (19.8% vs 3.8% prior-year) dampening bottom line despite stronger revenue .
Noninterest expense increased YoY (+$2.0M) on compensation and incentives tied to stronger company results; segment efficiency in SBA (69.3%) improved but remains above core bank (66.7%) .
FHLB borrowings rose to $435.0M (from $301.6M YoY) and AOCI losses widened with rising rates, pressuring balance sheet optics even as equity and TBV increased .

Financial Results

Headline P&L and ratios (USD Millions unless noted)

Metric	Q2 FY2025 (Mar 31)	Q3 FY2025 (Jun 30)	Q4 FY2025 (Sep 30)
Net Interest Income ($)	$15.991	$16.725	$17.130
Noninterest Income ($)	$3.560	$4.520	$4.659
Total Revenue ($) (NII + Noninterest)	$19.551	$21.245	$21.789
Net Income ($)	$5.499	$6.166	$5.271
Diluted EPS (GAAP)	$0.79	$0.88	$0.75
NIM (tax-equivalent)	2.93%	2.99%	3.07%
Efficiency Ratio	70.06%	64.45%	67.13%
ROA (annualized)	0.93%	1.02%	0.88%

Consensus vs actual (S&P Global; values with asterisks from S&P)

Metric	Q2 FY2025	Q3 FY2025	Q4 FY2025
EPS Consensus Mean ($)*	0.593	0.737	0.840
EPS Actual ($)*	0.760	0.810	0.820
Revenue Consensus Mean ($MM)*	15.550	16.937	17.271
Revenue Actual ($MM)*	19.786	20.822	21.201

Note: Company also reported non-GAAP diluted EPS of $0.76 (Q2), $0.81 (Q3), $0.82 (Q4) and GAAP diluted EPS of $0.79, $0.88, $0.75 respectively .

Segment net income (USD Millions)

Segment Net Income	Q2 FY2025	Q3 FY2025	Q4 FY2025
Core Banking	$5.069	$5.774	$5.189
SBA Lending	$0.430	$0.392	$0.082

Key KPIs and balance indicators

KPI	Q2 FY2025	Q3 FY2025	Q4 FY2025
NPLs / Total Loans (%)	0.67%	0.79%	0.77%
NPAs / Total Assets (%)	0.55%	0.68%	0.66%
ACL / Total Loans (%)	1.08%	1.07%	1.06%
ACL / NPLs (%)	161.04%	134.88%	138.73%
Net Charge-offs / Avg Loans (%)	-0.01%	0.02%	0.03%
Customer Int.-bearing Deposits ($MM)	1,207.159	1,253.525	1,302.378
Brokered Deposits ($MM)	396.770	280.020	219.940
FHLB Borrowings ($MM)	325.310	434.924	435.000
Tangible BVPS ($)	24.43	24.90	26.28

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (EPS/Revenue/Margins)	FY/Q4 2025	None disclosed	None disclosed	Maintained (no guidance)
Dividend	Q4 FY2025	—	$0.16 per share; payable ~Sep 30, 2025	Announced
Merger with First Merchants (FRME)	Close timing	—	Expected Q1 2026 close; 0.85 FRME shares per FSFG share	New (announced Sept 25)

Earnings Call Themes & Trends

No Q4 FY2025 transcript was available in our document set; we searched for “earnings-call-transcript” and “other-transcript” for FSFG from Sep–Dec 2025 and found none. We therefore summarize themes using Q2/Q3/Q4 press releases.

Topic	Previous Mentions (Q2 FY25)	Previous Mentions (Q3 FY25)	Current Period (Q4 FY25)	Trend
Net interest margin	NIM 2.93%; improvement vs 2.66% YoY	NIM 2.99%; +32 bps YoY	NIM 3.07%; +35 bps YoY	Improving
SBA Lending	First profitable quarter since Mar-24; strong originations/sales	Second consecutive profitable quarter; robust pipeline	Third consecutive profitable quarter; modest profit ($0.08M)	Positive but modest
HELOC sales	Bulk sales aided noninterest income and reserve release	HELOC sales gains ($0.617M)	HELOC gain $0.929M; supported revenue beat	Ongoing contributor
Deposits/funding	Brokered deposits down; FHLB up; customer deposits up $20.7M YTD	Customer deposits +$84.4M YTD; brokered down; FHLB up	Customer +$118.2M YoY; brokered -$289.2M; FHLB +$133.4M YoY	Improving mix; higher FHLB
Credit quality	NPLs fell to 0.67%	NPLs 0.79%	NPLs 0.77%; coverage 138.7%	Stable/healthy
Regulatory/Strategic	—	—	Announced merger (0.85 FRME; close Q1’26)	New strategic overhang

Management Commentary

“We are pleased with the strong performance for the 2025 fiscal year and continually improving trends... The SBA Lending segment posted its third consecutive profitable quarter” — Larry W. Myers, President & CEO .
Q3 context: “continued improvement in the net interest margin... solid growth in deposits, expense containment, and meaningful efficiency ratio improvement” .
Q2 context: “SBA Lending segment posted its first profitable quarter since March 2024... NIM increased” .

Q&A Highlights

No Q4 FY2025 earnings call transcript was available; key clarifications from the release:
- Effective tax rate rose to 19.8% in Q4 due to higher taxable income; both 2025 and 2024 tax rates benefited from investment tax credits .
- Noninterest income drivers were HELOC ($0.929M) and SBA loan sales ($0.853M) gains; there were no HELOC gains in prior-year quarter .
- Funding mix: customer deposits +$118.2M YoY, brokered deposits -$289.2M, partly offset by higher FHLB borrowings (+$133.4M YoY) .

Estimates Context

Coverage depth is limited (2–3 estimates per quarter), but S&P Global consensus shows: Q2 beat (EPS $0.76 vs $0.59*; revenue $19.8M vs $15.6M*), Q3 beat (EPS $0.81 vs $0.74*; revenue $20.8M vs $16.9M*), and Q4 slight EPS miss ($0.82 vs $0.84*) alongside a sizable revenue beat ($21.2M vs $17.3M*) [GetEstimates]*.
Given outsized revenue beats driven by HELOC and SBA gains, we expect estimates to recalibrate around noninterest income cadence and a 3.00%+ NIM run-rate; tax rate normalization (higher vs prior-year) may cap EPS uplift absent stronger pre-tax earnings .

Key Takeaways for Investors

Slight EPS miss but clear revenue outperformance; the quality of beat reflects transactional noninterest income (HELOC/SBA), while core NII/NIM trends are also improving—a constructive mix for medium-term earnings power [GetEstimates]*.
Credit remains benign with low NCOs and solid coverage; NPLs/loans at 0.77% and ACL/NPL ~139% support resiliency through the merger process .
Funding quality improved as brokered deposits fell sharply and customer deposits rose; however, FHLB reliance increased—watch deposit pricing and FHLB trajectory if rates stay higher-for-longer .
Operating leverage is improving (NIM up to 3.07%), yet efficiency ticked up Q/Q on incentives; sustained cost discipline will be key to holding mid‑60s efficiency into integration .
Merger terms (0.85 FRME per FSFG) and timeline (target Q1’26) likely anchor near-term stock narrative; synergy/credit assumptions at FRME and regulatory timing are primary catalysts/risk factors .
Dividend continuity ($0.16 in Q4) and rising TBVPS ($26.28) underpin capital return and book value support into deal close .

Footnote: Values marked with an asterisk (*) are retrieved from S&P Global consensus and actuals via GetEstimates. Values retrieved from S&P Global.

First Savings Financial Group, Inc. (FSFG)·Q4 2025 Earnings Summary