First Merchants (FRME) AI Stock Analysis

• Market Cap: $2.40B
• Dividend Yield: 3.4%
• Average Volume (3M): 254.45K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.98
• Revenue Growth: -1.18%
• EPS Growth: 23.43%
• Country: US
• Employees: 2,120
• Sector: Financial
• Sector Strength: 78
• Industry: Banks - Regional
• EPS (TTM): 0.98
• Shares Outstanding: 57,732,338
• 10 Day Avg. Volume: 229,271
• 30 Day Avg. Volume: 254,448
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 3.20
• Enterprise Value/Gross Profit: 5.36
• Enterprise Value/Ebitda: 11.47
• 1Y Price Target: $46.67
• Price Target Upside: 12.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: $43.00 ▲(3.56% Upside)

First Merchants' strong financial performance and attractive valuation are key strengths, supported by positive earnings call sentiment. However, technical indicators suggest caution due to potential short-term weakness. Continued focus on revenue growth and cash flow management will be crucial for sustained performance.

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 generates revenue through several key streams. The primary source is net interest income, which comes from the difference between the interest earned on loans and the interest paid on deposits. This includes a variety of loan products such as commercial loans, residential mortgages, and consumer loans. Additionally, the company earns non-interest income from service fees, wealth management services, and transaction-based fees. Significant partnerships with local businesses and community organizations also contribute to its earnings by enhancing customer retention and expanding service offerings. The bank's focus on regional growth and strategic acquisitions further bolsters its revenue potential.

First Merchants Financial Statement Overview

Summary

First Merchants shows a solid financial position with consistent revenue growth and strong profitability metrics. While the company maintains a healthy balance between debt and equity, the rising debt levels in recent years warrant careful management. Cash flows remain stable, supporting ongoing operations and investments.

Income Statement

First Merchants has shown steady revenue growth over the years with a notable increase from 2022 to 2023. The Gross Profit Margin has slightly decreased, indicating higher costs or increased competition. However, the company's Net Profit Margin remains strong, showing efficiency in managing expenses relative to revenue. The EBIT and EBITDA margins are solid, reflecting good operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is moderate, indicating a balanced approach to leveraging debt. The Return on Equity (ROE) is robust, suggesting effective use of equity to generate profits. The Equity Ratio is stable, showcasing a strong equity base relative to total assets. However, the increase in total debt from 2023 to 2025 requires monitoring for potential risks of over-leverage.

Cash Flow

Operating cash flow has been consistent, demonstrating reliable cash generation from core operations. The Free Cash Flow growth is positive, although the increase in investing outflows suggests significant investment activities. The Operating Cash Flow to Net Income Ratio indicates strong cash conversion, but attention should be paid to maintaining this level amid fluctuating financing cash flows.

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	618.74M	591.01M	647.50M	611.39M	520.00M	433.38M
EBITDA	289.31M	258.58M	270.94M	267.49M	251.49M	180.98M
Net Income	225.71M	201.40M	223.79M	222.09M	205.53M	148.60M
Balance Sheet
Total Assets	18.59B	18.31B	18.41B	17.94B	15.45B	14.07B
Cash, Cash Equivalents and Short-Term Investments	1.44B	1.77B	2.18B	2.23B	2.99B	2.50B
Total Debt	1.16B	1.16B	1.03B	1.31B	634.25M	684.91M
Total Liabilities	16.24B	16.01B	16.16B	15.90B	13.54B	12.19B
Stockholders Equity	2.35B	2.30B	2.25B	2.03B	1.91B	1.88B
Cash Flow
Free Cash Flow	259.71M	266.21M	258.83M	284.29M	215.34M	204.81M
Operating Cash Flow	259.71M	266.21M	258.83M	284.29M	215.34M	204.81M
Investing Cash Flow	-649.45M	-252.42M	-344.43M	-462.69M	-1.48B	-1.55B
Financing Cash Flow	365.94M	-38.82M	75.65M	133.84M	1.24B	1.36B

First Merchants Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 41.52 is above the 20-day moving average (MA) of 39.41, above the 50-day MA of 39.53, and above the 200-day MA of 39.58, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 62.93 is Neutral, neither overbought nor oversold. The STOCH value of 91.58 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
PFS	80 Outperform	$2.59B	11.19	8.78%	4.84%	66.96%	67.27%
WAFD	79 Outperform	$2.48B	12.00	7.59%	3.40%	8.75%	5.16%
FFBC	77 Outperform	$2.54B	10.61	9.77%	3.66%	4.62%	2.69%
TBBK	77 Outperform	$3.51B	16.39	27.41%	―	25.43%	21.96%
BANC	71 Outperform	$2.67B	26.20	4.32%	2.36%	49.10%	―
FRME	69 Neutral	$2.40B	10.78	9.90%	3.40%	-1.18%	23.43%
Sector *	68 Neutral	$17.88B	11.68	10.28%	3.72%	9.78%	1.27%

First Merchants Corporate Events

First Merchants Announces Cash Dividend for Shareholders

On August 15, 2025, First Merchants Corporation announced a cash dividend of $0.36 per common share, payable on September 19, 2025, to shareholders of record as of September 5, 2025. This announcement reflects the company’s ongoing commitment to providing value to its shareholders, potentially impacting its market perception and stakeholder confidence.

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 Declares Quarterly Cash Dividend

On July 15, 2025, First Merchants Corporation announced a quarterly cash dividend of $46.88 per share on its 7.50% Non-Cumulative Perpetual Preferred Stock Series A, with a payment date set for August 15, 2025, to stockholders recorded by July 30, 2025. This declaration reflects the company’s ongoing commitment to providing returns to its shareholders and may influence its market positioning and stakeholder relations.

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 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.