First Merchants Corp. (FRME)
NASDAQ:FRME
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First Merchants
(NASDAQ:FRME)
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Rating:76Outperform
Price Target:
$46.00
▲(11.81% Upside)
Action:ReiteratedDate:04/23/26
FRME scores well primarily on solid financial quality (steady earnings, improving leverage, and strong cash generation) and attractive valuation (low P/E with a solid dividend). The latest earnings call adds support via improved core trends, clear balance-sheet actions, and continued capital returns, while technicals are moderately positive with the stock trading above key moving averages.
Positive Factors
Capital Strength
An 11.22% CET1 ratio and roughly 9% tangible common equity provide a durable loss-absorbing buffer, allowing the bank to sustain dividends, buybacks and opportunistic growth without immediate capital raises. Strong capital supports credit stress absorption and regulatory flexibility over quarters.
Negative Factors
Slowing Revenue Growth
Top-line momentum has decelerated to roughly flat year-on-year, limiting operating leverage. With revenue growth slowed, earnings expansion becomes more dependent on margin recovery and cost synergies, constraining long-term EPS growth unless loan growth or fee income accelerates.
Read all positive and negative factors
Positive Factors
Negative Factors
Capital Strength
An 11.22% CET1 ratio and roughly 9% tangible common equity provide a durable loss-absorbing buffer, allowing the bank to sustain dividends, buybacks and opportunistic growth without immediate capital raises. Strong capital supports credit stress absorption and regulatory flexibility over quarters.
Read all positive factors
First Merchants (FRME) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.51B
Dividend Yield3.72%
Average Volume (3M)415.29K
Price to Earnings (P/E)21.0
Beta (1Y)0.83
Revenue Growth-1.76%
EPS Growth32.44%
CountryUS
Employees2,120
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.45
Shares Outstanding63,325,780
10 Day Avg. Volume362,943
30 Day Avg. Volume415,293
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)0.88
Price to Sales (P/S)2.06
P/FCF Ratio7.63
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue2.30
Enterprise Value/Gross Profit3.77
Enterprise Value/Ebitda8.37
Forecast
1Y Price Target
$46.50Price Target Upside13.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)4.11
Revenue Forecast (FY)$803.21M
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 esta...
How the Company Makes Money
First Merchants makes money primarily through banking spread and fee-based businesses. (1) Net interest income: The largest revenue driver for most regional banks, generated from the difference between interest earned on interest-earning assets (n...
First Merchants Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call conveyed constructive momentum: core revenue and margin trends improved, acquisition integration is progressing with less dilution than expected, deposit mix and NII rose, and asset quality is described as contained. Negative items were largely one-time or transitional (acquisition expenses, a mortgage MTM charge, and a few idiosyncratic charge-offs), and management articulated clear actions and timelines for liquidity redeployment and cost synergies. Balanced against manageable credit items and temporary mark losses, the positive operating and capital developments outweigh the lowlights.Positive Updates
Size and Scale Expansion
Total assets of $21.1 billion, loans of $15.3 billion and deposits of $16.5 billion following the February 1 First Savings acquisition; network now operates 127 banking centers.
Negative Updates
Reported Earnings Impacted by One-Time Items
Reported net income was $27.7 million, or $0.45 per diluted share, which included $17 million of one-time acquisition-related expenses and a $29.8 million mark-to-market charge tied to mortgage repositioning.
Read all updates
Q1-2026 Updates
Positive
Negative
Size and Scale Expansion
Total assets of $21.1 billion, loans of $15.3 billion and deposits of $16.5 billion following the February 1 First Savings acquisition; network now operates 127 banking centers.
Read all positive updates
Company Guidance
Management reiterated mid‑single‑digit loan growth for 2026, expects to complete the sale of $357M of mortgages (WAC 3.46%) by end‑Q2 and use proceeds to pay down higher‑cost deposits (~3.80%) and redeploy into commercial loans yielding 6%+ over an 18–24 month period; they see net interest margin edging up a few basis points from the Q1 NIM of 3.35% (Q1 was down ~5 bps from day‑count), with loan portfolio yield at 6.09% and new/renewed loans averaging 6.18%. Other forward metrics: fair‑value accretion run‑rate ~ $2M+/quarter, Q2 noninterest income expected ~3–4% above Q1’s normalized $35.6M, legacy expense growth guided to +3–5% YoY with a post‑synergy quarterly run‑rate target of $111–$114M (exit savings in back half), effective tax rate ~13%, continued active buybacks ( >700k shares repurchased / $27.6M YTD) while maintaining tangible common equity around 9% and CET1 of 11.22%; management also noted potential Basel III RWA relief of ~50–80 bps.First Merchants Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
72
Positive
Cash Flow
76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.05B | 1.05B | 999.49M | 712.95M | 555.96M |
| Gross Profit | 640.17M | 591.01M | 647.50M | 611.39M | 520.00M |
| EBITDA | 288.54M | 258.58M | 270.94M | 267.49M | 251.49M |
| Net Income | 226.00M | 201.40M | 223.79M | 222.09M | 205.53M |
Balance Sheet | |||||
| Total Assets | 19.03B | 18.31B | 18.41B | 17.94B | 15.45B |
| Cash, Cash Equivalents and Short-Term Investments | 1.49B | 1.77B | 2.18B | 2.23B | 2.99B |
| Total Debt | 999.93M | 1.16B | 1.03B | 1.31B | 634.25M |
| Total Liabilities | 16.56B | 16.01B | 16.16B | 15.90B | 13.54B |
| Stockholders Equity | 2.47B | 2.30B | 2.25B | 2.03B | 1.91B |
Cash Flow | |||||
| Free Cash Flow | 283.65M | 266.21M | 258.83M | 284.29M | 215.34M |
| Operating Cash Flow | 283.65M | 266.21M | 258.83M | 284.29M | 215.34M |
| Investing Cash Flow | -773.82M | -252.42M | -344.43M | -462.69M | -1.48B |
| Financing Cash Flow | 486.72M | -38.82M | 75.65M | 133.84M | 1.24B |
First Merchants Technical Analysis
Positive
41.14
Price Trends
39.43
Positive
38.62
Positive
38.18
Positive
Market Momentum
0.69
Negative
63.91
Neutral
56.33
Neutral
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 41.14 is above the 20-day moving average (MA) of 39.47, above the 50-day MA of 39.43, and above the 200-day MA of 38.18, indicating a bullish trend. The MACD of 0.69 indicates Negative momentum. The RSI at 63.91 is Neutral, neither overbought nor oversold. The STOCH value of 56.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRME.
First Merchants Risk Analysis
First Merchants disclosed 31 risk factors in its most recent earnings report. First Merchants reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Merchants Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.51B | 20.98 | 9.46% | 3.72% | -1.76% | 32.44% | |
74 Outperform | $2.30B | 9.44 | 10.34% | 2.97% | 6.98% | 15.08% | |
73 Outperform | $2.61B | ― | 11.25% | ― | -0.37% | -20.30% | |
70 Outperform | $2.47B | 12.48 | 7.03% | 1.69% | -5.72% | -3.86% | |
68 Neutral | $2.36B | ― | 9.51% | 3.33% | 11.63% | 5.58% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $2.08B | 13.31 | 13.31% | 1.88% | 11.74% | 26.27% |
* Financial Sector Average
FRME
First Merchants
39.70
4.55
12.93%
BANR
Banner
67.76
7.45
12.35%
FBNC
First Bancorp
59.55
19.84
49.95%
NBTB
NBT Bancorp
45.29
4.35
10.63%
SYBT
Stock Yards Bancorp
70.44
-4.92
-6.52%
CUBI
Customers Bancorp
77.47
27.14
53.92%
First Merchants Corporate Events
Dividends
First Merchants Declares Quarterly Dividend on Preferred Shares
Positive
Apr 16, 2026
On April 16, 2026, First Merchants Corporation announced that its board declared a quarterly cash dividend of $46.88 per share on its 7.50% Non‑Cumulative Perpetual Preferred Stock Series A, equivalent to $0.4688 per NASDAQ‑listed FRME...
Dividends
First Merchants Declares Quarterly Cash Dividend to Shareholders
Positive
Feb 10, 2026
On February 9, 2026, First Merchants Corporation declared a cash dividend of $0.36 per common share, underscoring its ongoing practice of returning capital to shareholders. The dividend is scheduled to be paid on March 20, 2026, to common sharehol...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
First Merchants Adds Larry Myers to Expanded Board
Positive
Feb 9, 2026
On February 9, 2026, First Merchants Corporation expanded its Board of Directors from 12 to 13 members and appointed Larry W. Myers to the new Class III seat, with his initial term running until the 2026 annual shareholders meeting. Myers, a long-...
Business Operations and StrategyExecutive/Board Changes
First Merchants Adopts 2026 Senior Management Incentive Plan
Positive
Feb 6, 2026
On February 3, 2026, First Merchants Corporation’s board approved a 2026 Senior Management Incentive Compensation Program, a non-equity cash incentive plan for named executive officers and other senior managers, with payout opportunities exp...
Business Operations and StrategyM&A Transactions
First Merchants completes acquisition of First Savings Financial
Positive
Feb 2, 2026
On February 1, 2026, First Merchants Corporation completed its previously announced stock-based acquisition of First Savings Financial Group, legally merging First Savings into First Merchants and subsequently combining First Savings Bank with and...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.