First Merchants (FRME) AI Stock Analysis

• Market Cap: $2.16B
• Dividend Yield: 3.88%
• Average Volume (3M): 256.53K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.92
• Revenue Growth: 1.42%
• EPS Growth: 2.67%
• Country: US
• Employees: 2,120
• Sector: Financial
• Sector Strength: 79
• Industry: Banks - Regional
• EPS (TTM): 0.94
• Shares Outstanding: 58,306,988
• 10 Day Avg. Volume: 345,610
• 30 Day Avg. Volume: 256,529
• PEG Ratio: 2.27
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.79
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 0.72
• Enterprise Value/Gross Profit: 5.07
• Enterprise Value/Ebitda: 3.12
• 1Y Price Target: $47.00
• Price Target Upside: 23.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 71 Outperform
• Price Target: $40.00 ▲(5.18%Upside)

First Merchants demonstrates solid financial performance with robust earnings and efficient capital management. Valuation metrics are attractive, and the recent dividend announcement enhances shareholder returns. Technical indicators present mixed signals, and while some market challenges exist, the overall outlook remains positive.

First Merchants Business Overview & Revenue Model

Company Description

First Merchants Corporation operates as the financial holding company for First Merchants Bank that provides community banking services. It accepts time, savings, and demand deposits; and provides consumer, commercial, agri-business, and real estate mortgage loans, as well as public finance. The company also offers personal and corporate trust; brokerage and private wealth management; and letters of credit, repurchase agreements, and other corporate services. It operates 109 banking locations in Indiana, Illinois, Ohio, and Michigan counties. The company also offers its services through electronic and mobile delivery channels. First Merchants Corporation was founded in 1893 and is headquartered in Muncie, Indiana.

How the Company Makes Money

First Merchants Corporation generates revenue primarily through interest income from loans and securities, as well as non-interest income from fees and service charges. The company's key revenue streams include interest earned on commercial and consumer loans, residential mortgages, and investment securities. Additionally, First Merchants earns non-interest income from various banking fees, such as account maintenance fees, transaction fees, and charges for other banking services. Wealth management and fiduciary services also contribute to its non-interest revenue. The company's earnings are further supported by strategic partnerships and its broad geographic presence, which enable it to attract a diverse customer base and expand its market share.

First Merchants Financial Statement Overview

Summary

First Merchants demonstrates solid financial health with strong revenue growth and a robust balance sheet. While profitability margins have faced some pressure, the absence of debt enhances stability. The company maintains a healthy cash flow position, but continued focus on optimizing profitability and liquidity management will be beneficial.

Income Statement

First Merchants has shown consistent revenue growth over the years with a notable increase from $492 million in 2020 to $948 million in 2024. The gross profit margin has remained stable, reflecting efficient cost management. However, the net profit margin has seen fluctuations, decreasing slightly in 2024 compared to prior years, which may indicate rising costs or expenses impacting net income.

Balance Sheet

The balance sheet of First Merchants is robust, with a strong equity position and no total debt reported in 2024, contributing to a favorable debt-to-equity ratio. The equity ratio has remained stable, indicating solid financial health. However, fluctuations in cash and equivalents suggest potential liquidity management challenges.

Cash Flow

The company's cash flow is generally strong, with a positive free cash flow trend, enabling continued investment and financing activities. However, the operating cash flow to net income ratio has decreased slightly, indicating potential challenges in converting earnings into cash. Investment cash flow has been negative, reflecting ongoing investments in business growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	1.05B	999.49M	712.95M	555.96M	558.43M
Gross Profit	595.43M	591.01M	647.50M	611.39M	520.00M	433.38M
EBITDA	271.67M	258.58M	270.94M	267.49M	251.49M	180.98M
Net Income	208.80M	201.40M	223.79M	222.09M	205.53M	148.60M
Balance Sheet
Total Assets	18.44B	18.31B	18.41B	17.94B	15.45B	14.07B
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.77B	2.18B	2.23B	2.99B	2.50B
Total Debt	1.34B	1.16B	1.03B	1.31B	634.25M	684.91M
Total Liabilities	16.11B	16.01B	16.16B	15.90B	13.54B	12.19B
Stockholders Equity	2.33B	2.30B	2.25B	2.03B	1.91B	1.88B
Cash Flow
Free Cash Flow	269.06M	266.21M	258.83M	284.29M	215.34M	204.81M
Operating Cash Flow	269.06M	266.21M	258.83M	284.29M	215.34M	204.81M
Investing Cash Flow	-495.72M	-252.42M	-344.43M	-462.69M	-1.48B	-1.55B
Financing Cash Flow	212.26M	-38.82M	75.65M	133.84M	1.24B	1.36B

First Merchants Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 38.03
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRME, the sentiment is Positive. The current price of 38.03 is above the 20-day moving average (MA) of 36.81, above the 50-day MA of 36.83, and below the 200-day MA of 38.81, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 58.36 is Neutral, neither overbought nor oversold. The STOCH value of 82.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRME.

First Merchants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TBBK	77 Outperform	$2.58B	12.49	26.52%	―	18.52%	21.05%
FFBC	76 Outperform	$2.30B	10.10	9.58%	3.99%	8.05%	-3.31%
PFS	73 Outperform	$2.21B	15.23	6.77%	5.68%	80.24%	-30.60%
FRME	71 Outperform	$2.16B	10.46	9.16%	3.88%	1.42%	2.67%
WAFD	71 Outperform	$2.31B	10.94	7.70%	3.74%	24.53%	0.16%
Sector *	67 Neutral	$16.51B	11.23	9.71%	3.96%	11.61%	-10.70%
BANC	66 Neutral	$2.18B	21.31	4.33%	2.89%	121.00%	―

First Merchants Corporate Events

First Merchants Announces Senior Notes Redemption Plan

First Merchants Corporation announced the redemption of $5,000,000 in principal amount of its 5.00% Fixed-to-Floating Rate Senior Notes, originally issued on November 1, 2013, and due in 2028. This redemption, scheduled for July 30, 2025, will result in no outstanding principal amount remaining for this issuance, potentially impacting the company’s financial obligations and capital structure.

The most recent analyst rating on (FRME) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on First Merchants stock, see the FRME Stock Forecast page.

First Merchants Holds Annual Shareholder Meeting

On May 16, 2025, First Merchants Corporation held its Annual Meeting of Shareholders, where F. Howard Halderman, Kevin D. Johnson, Clark C. Kellogg, and Michael C. Rechin were elected to the Board of Directors for one-year terms. Shareholders also approved a non-binding resolution on executive compensation and appointed Forvis Mazars, LLP as the independent auditor for 2025. These decisions reflect shareholder confidence in the current leadership and financial oversight, potentially impacting the corporation’s governance and financial transparency.

The most recent analyst rating on (FRME) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on First Merchants stock, see the FRME Stock Forecast page.

First Merchants Announces Cash Dividend for Shareholders

On May 16, 2025, First Merchants Corporation announced a cash dividend of $0.36 per share, payable on June 20, 2025, to common shareholders of record as of June 6, 2025. This announcement reflects the company’s ongoing commitment to providing returns to its shareholders and may impact trading activities around the ex-date of June 5, 2025.

The most recent analyst rating on (FRME) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on First Merchants stock, see the FRME Stock Forecast page.