First Merchants Corporation

First Merchants Corporation

FRMEยทNASDAQ

$38.90

-1.6%
Financial ServicesBanks - Regional

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.

At a Glance

Live Snapshot
Market Cap$2.45B
EPS3.9000
P/E Ratio9.97
Earnings Date07/22/2026

Intrinsic Alpha Methodology

Thesis Lenses

Signal ยท Driver ยท Risk

Signal

High confidence

Valuation multiple is compressed (P/E 10.0).

Valuation inputs: P/E 10.0, earnings yield +10.0%, momentum -1.6%.

If multiples stay elevated while momentum fades, downside repricing risk rises.

Driver

High confidence

Return profile is soft (ROE +9.2%, ROIC -4.3%).

Profitability stack: net margin +21.5%, ROE +9.2%, ROIC -4.3%.

Quality deterioration often appears in margins before it shows up in headline EPS.

Risk

High confidence

Risk profile is balanced but has notable pressure points to monitor.

Risk factors: liabilities/assets +87.0%, momentum -1.6%, net margin +21.5%.

Higher leverage with weak momentum and thin margins can amplify drawdown severity.

frme

First Merchants Corporation Market vs Earnings Trajectory

FRME ยท NASDAQ

Loading price and EPS data...

First Merchants Corporation

First Merchants Corporation Fair Value Envelope

FRME ยท NASDAQ

Our analysis suggests that FRME has a fair value of HIDDEN per share in the Base Case projection. With shares currently trading at $38.9, this represents a potential HIDDEN relative to our calculated worth for First Merchants Corporation.

Intrinsic Value
Current Price: $38.9
3Y+2.0%
5Y+42.0%
10Y+96.0%
3Y+47.0%
5Y+88.0%
10Y+230.0%
3Y+2.0%
5Y+52.0%
10Y+179.0%
3Y-
5Y+38.0%
10Y+173.0%
3Y-
5Y+38.0%
10Y+173.0%
3Y+6.0%
5Y+35.0%
10Y+164.0%
First Merchants Corporation

First Merchants Corporation Profit Bridge

FRME ยท NASDAQ
Revenue1.05B
Cost of Goods Sold (410.03M)
Gross Profit640.17M
Operating Expenses (381.06M)
Operating Income259.11M
Interest Expense (388.78M)
Other Income/Expense0.00
Pretax Income259.11M
Income Tax (33.11M)
Net Income226.00M
Net Income
226.00M

Profitability Analysis

Gross Margin

61.0%

Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.

Operating Margin

24.7%

Healthy operating margins demonstrate effective cost control and strong business fundamentals.

Net Profit Margin

21.5%

Exceptional profitability. The company converts a significant portion of revenue to bottom-line earnings.

Effective Tax Rate

12.8%

Below-average tax rate suggests effective tax planning, favorable jurisdictions, or tax credits.

Profitability Insight

Exceptional profitability across all levels: Strong pricing power, efficient operations, and healthy bottom line indicate a high-quality business with sustainable competitive advantages.

60.96%
Gross Profit Margin
9%
3Y-29.0%
5Y-21.0%
10Y-32.0%
24.67%
Operating Profit Margin
12%
3Y-31.0%
5Y-19.0%
10Y-28.0%
21.52%
Net Profit Margin
13%
3Y-31.0%
5Y-19.0%
10Y-15.0%
9.16%
Return on Equity
5%
3Y-16.0%
5Y+16.0%
10Y+2.0%
1.19%
Return on Assets
8%
3Y-4.0%
5Y+12.0%
10Y+6.0%
-4.28%
Return on Invested Capital
-180%
3Y-170.0%
5Y-178.0%
10Y-187.0%
FRME

First Merchants Corporation Cash Conversion Engine

FRME ยท NASDAQ
Net Income226.00M
Depreciation & Amortization29.42M
Stock-Based Compensation7.33M
Change in Working Capital-5.93M
Others24.60M
Capital Expenditures0.00
Free Cash Flow283.65M

Cash Flow Quality Analysis

FCF Conversion Rate

125.5%

Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.

FCF Growth Trend

+6.5%

Steady FCF growth indicates consistent cash generation improvement. On a positive trajectory.

Working Capital Impact

-$5.93M

Minimal working capital impact on FCF. Changes in operating assets and liabilities well-managed.

Cash Flow Quality Insight

Asset-light with strong cash conversion: Low capital requirements combined with efficient cash generation creates significant shareholder value through dividends, buybacks, or strategic investments.

frme

First Merchants Corporation Funding & Solvency Profile

FRME ยท NASDAQ
Cash & Cash Equivalents98.08M
Net Receivables97.03M
Inventory0.00
Other Current Assets0.00
Total Current Assets2 B
Property, Plant & Equipment146.01M
Goodwill & Intangible Assets824.47M
Long-Term Investments0.00
Other Non-Current Assets0.00
Total Non-Current Assets146 M
Total Assets
21.07B

Financial Health Analysis

Debt-to-Equity Ratio

6.88x

High financial leverage. Heavy reliance on debt may indicate increased financial risk and potential solvency concerns.

Working Capital

2 B

Strong working capital position provides significant operational flexibility and financial cushion.

Asset Composition

7% Current

Capital-intensive business with significant long-term investments in property, equipment, or intangibles.

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First Merchants Corporation Street Expectations Map

FRME ยท NASDAQ

Wall Street analysts project that FRME stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 49.00, with estimates ranging from a low of 49.00 to a high of 49.00.

Lowest Target
49.00
25.96%
Consensus Target
49.00
25.96%
Highest Target
49.00
25.96%

The consensus 1-year price target stands at 49.00, with estimates ranging from a low of 49.00 to a high of 49.00.

Analyst Consensus Analysis

Upside Potential

+26.0%

Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.

Analyst Agreement

0.0% spread

High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.

Analyst Conviction

Very High

Strong buy conviction: High upside with tight consensus suggests compelling investment opportunity backed by analyst confidence.

Market Sentiment Insight

Rare opportunity: Exceptional upside potential with strong analyst consensus creates a compelling setup. The combination of significant price target premium and tight agreement suggests high-conviction undervaluation that may attract institutional capital.

frme

First Merchants Corporation Insider Positioning

FRME ยท NASDAQ

During the last 12 months, insiders have purchased $3.50M and sold $1.49M worth of FRME shares, resulting in $2.01M of net buying activity.

3 Months

Bought

0

0.00

Sold

0

0.00

Net Activity

+0

+$0

3-6 Months

Bought

0

0.00

Sold

12.4K

518.56K

Net Activity

-519K

-$519K

6-9 Months

Bought

7.5K

282.52K

Sold

5.7K

202.24K

Net Activity

+80K

+$80K

9-12 Months

Bought

85.7K

3.22M

Sold

20.7K

769.70K

Net Activity

+2.4M

+$2.45M

Top Buyers

1
HMK

Hardwick Mark K

Director, Officer: Chief Executive Officer

21.0K sharesโ€ข1 transactions

$787K

2
SMJ

Stewart Michael J

Officer: President

16.0K sharesโ€ข1 transactions

$600K

3
KM

Kawiecki Michele

Officer, Other: Chief Financial Officer

13.0K sharesโ€ข1 transactions

$487K

4
MJ

Martin John

Officer, Other: Chief Credit Officer

8.0K sharesโ€ข1 transactions

$300K

5
PJC

Peterson Joseph C

Officer: Chief Commercial Officer

8.0K sharesโ€ข1 transactions

$300K

Top Sellers

1
FS

Fluhler Stephan

Officer, Other: Chief Information Officer

11.1K sharesโ€ข3 transactions

$422K

2
HMK

Hardwick Mark K

Director, Officer: Chief Executive Officer

8.5K sharesโ€ข1 transactions

$314K

3
SMJ

Stewart Michael J

Officer: President

5.6K sharesโ€ข1 transactions

$210K

4
MLW

Myers Larry W

Director, Officer: First Vice President

5.0K sharesโ€ข2 transactions

$208K

5
SED

Scurlock Eva D.

Officer: Chief Risk Officer

3.2K sharesโ€ข1 transactions

$136K

Insider Activity Analysis

Net Insider Sentiment

Bullish

Positive insider sentiment with $2.01M net buying. Buying activity substantially exceeds selling, indicating insider confidence.

Buy/Sell Ratio

2.35:1

Strong buy/sell ratio. Buying is at least double the selling activity, suggesting robust insider confidence.

Insider Participation

Balanced

5 insider buyers and 5 sellers. Equal participation suggests mixed or neutral insider views.

Insider Activity Insight

Compelling insider conviction: The combination of strong buy/sell ratio and multiple buyers suggests insiders see attractive risk/reward. Consider this alongside fundamental analysis for confirmation.

0.93%
Dividend Yield
-6%
3Y-7.0%
5Y+65.0%
10Y+61.0%
ย 

frme Dividend History

FRME
10Y CAGR +10%
Latest $0.37
Annual $1.81
5 year growth trend
Last Period: +3%