First Merchants (FRME) AI Stock Analysis

• Market Cap: $2.06B
• Dividend Yield: 3.98%
• Average Volume (3M): 358.30K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.89
• Revenue Growth: -1.76%
• EPS Growth: 32.44%
• Country: US
• Employees: 2,120
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.98
• Shares Outstanding: 57,825,020
• 10 Day Avg. Volume: 238,347
• 30 Day Avg. Volume: 358,297
• PEG Ratio: -1.35
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 2.21
• P/FCF Ratio: 8.74
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 5.30
• Enterprise Value/Ebitda: 11.04
• 1Y Price Target: $47.33
• Price Target Upside: 31.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 3.82
• Revenue Forecast (FY): $682.77M

• Rating: 68 Neutral
• Price Target: $40.00 ▲(11.05% Upside)

First Merchants' strong earnings call performance and undervaluation are significant positives, but technical indicators suggest bearish momentum. Financial performance is solid but faces challenges in revenue growth and cash flow management.

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 demonstrates solid profitability with a consistent net profit margin and a healthy return on equity. However, challenges in revenue growth and cash flow management slightly dampen the overall financial performance.

Income Statement

First Merchants shows strong profitability with a consistent net profit margin of over 21% in TTM, despite a slight decline in revenue. The gross profit margin remains robust at nearly 60%. However, the negative revenue growth rate in the TTM period indicates potential challenges in revenue generation.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.49, indicating a balanced approach to leverage. The return on equity is healthy at 9.72%, reflecting efficient use of equity. However, the equity ratio is not explicitly calculated, which could provide additional insights into financial stability.

Cash Flow

Operating cash flow to net income ratio is low, suggesting potential cash flow management issues. Free cash flow growth has been negative recently, which could impact future liquidity. However, the free cash flow to net income ratio remains stable at 1.0, indicating adequate cash generation relative to net income.

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	297.19M	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	739.25M	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: Negative
• Last Price: 36.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRME, the sentiment is Negative. The current price of 36.02 is below the 20-day moving average (MA) of 36.30, below the 50-day MA of 38.22, and below the 200-day MA of 38.63, indicating a bearish trend. The MACD of -0.64 indicates Negative momentum. The RSI at 40.75 is Neutral, neither overbought nor oversold. The STOCH value of 37.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRME.

First Merchants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BANR	73 Outperform	$2.06B	11.01	10.28%	3.18%	6.98%	15.08%
NBTB	72 Outperform	$2.13B	13.55	8.87%	3.37%	11.65%	5.61%
CUBI	70 Outperform	$2.25B	13.70	8.99%	―	-0.35%	-20.30%
FRME	68 Neutral	$2.06B	8.92	9.90%	3.98%	-1.76%	32.44%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FBNC	67 Neutral	$2.10B	21.25	6.40%	1.78%	-5.72%	-3.90%
SYBT	59 Neutral	$1.93B	14.25	13.69%	1.87%	11.74%	26.27%

First Merchants Corporate Events

First Merchants Reports Strong Q3 2025 Earnings

First Merchants Corporation, a financial holding company based in Muncie, Indiana, operates in the banking sector through its full-service bank charter, First Merchants Bank, and a wealth management division. The company is publicly traded on NASDAQ under the symbol FRME.

First Merchants Announces Quarterly Cash Dividend

On October 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 of $0.4688 per depositary share. The dividend is scheduled for payment on November 14, 2025, to stockholders recorded by October 31, 2025, reflecting the company’s ongoing commitment to shareholder returns.

The most recent analyst rating on (FRME) stock is a Buy with a $48.00 price target. To see the full list of analyst forecasts on First Merchants stock, see the FRME Stock Forecast page.

First Merchants Announces Merger with First Savings

On September 24, 2025, First Merchants Corporation and First Savings Financial Group announced a merger agreement where First Savings will merge into First Merchants in an all-stock transaction valued at approximately $241.3 million. This merger, expected to close in the first quarter of 2026, aims to strengthen First Merchants’ presence in southern Indiana and enhance its growth potential through diversified loan offerings. The merger will result in a combined entity with assets of approximately $21 billion and 127 branches across Indiana, Michigan, and Ohio, positioning First Merchants as the second largest financial holding company headquartered in Indiana.

The most recent analyst rating on (FRME) stock is a Buy with a $44.00 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 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 Reports Strong Earnings Amid Challenges

First Merchants Corporation’s recent earnings call painted a picture of robust financial health, characterized by strong loan growth, increased net income, and improved credit quality. While there were concerns about rising deposit costs and challenges in mortgage fee growth, the company’s overall performance and strategic positioning remain solid.

First Merchants Reports Strong Q2 2025 Earnings

First Merchants Corporation, headquartered in Muncie, Indiana, operates as a financial holding company with a full-service bank charter, offering a range of banking services including commercial, consumer, and wealth management solutions.