First Merchants downgraded to Market Perform from Outperform at Raymond James

Raymond James downgraded First Merchants (FRME) to Market Perform from Outperform without a price target following the announcement to acquire First Savings Financial. While the deal creates entry into Louisville and boosts earnings forecasts, First Merchants’ use of capital lessens the likelihood of share repurchases and material securities restructurings near-term, the analyst tells investors in a research note. In addition, the bank’s core net interest margin faces some headwinds with lower rates, adds Raymond James.