First Merchants (FRME) AI Stock Analysis

• Market Cap: $2.30B
• Dividend Yield: 3.59%
• Average Volume (3M): 255.48K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.95
• Revenue Growth: -1.18%
• EPS Growth: 23.43%
• Country: US
• Employees: 2,120
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.98
• Shares Outstanding: 57,732,338
• 10 Day Avg. Volume: 361,861
• 30 Day Avg. Volume: 255,479
• 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: 1.44
• Enterprise Value/Revenue: 3.20
• Enterprise Value/Gross Profit: 5.36
• Enterprise Value/Ebitda: 11.16
• 1Y Price Target: $48.50
• Price Target Upside: 22.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 70 Outperform
• Price Target: $44.00 ▲(11.31% Upside)

First Merchants' strong earnings performance and attractive valuation are key strengths, supported by solid profitability and operational efficiency. However, challenges in revenue growth and cash flow management, along with deposit cost pressures, temper the overall outlook.

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: 39.53
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 39.53 is below the 20-day moving average (MA) of 40.45, below the 50-day MA of 39.61, and above the 200-day MA of 39.07, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 45.76 is Neutral, neither overbought nor oversold. The STOCH value of 35.76 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	76 Outperform	2.26B	12.56	9.76%	2.93%	8.40%	9.46%
FBNC	75 Outperform	2.21B	22.67	6.25%	1.67%	-2.04%	-14.82%
CUBI	74 Outperform	2.23B	16.28	7.92%	―	-7.45%	-45.67%
NBTB	74 Outperform	2.24B	15.42	7.39%	3.25%	10.00%	7.35%
FRME	70 Outperform	$2.30B	10.36	9.90%	3.59%	-1.18%	23.43%
SYBT	60 Neutral	2.10B	16.89	12.76%	1.76%	13.28%	22.43%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

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.