Is Preferred Dividend Declaration Shaping the Investment Case for First Merchants (FRME)?

• First Merchants Corporation previously declared a quarterly cash dividend of US$46.88 per share on its 7.50% Non-Cumulative Perpetual Preferred Stock Series A, with holders of depositary shares set to receive US$0.4688 per share, payable on August 15, 2025, to shareholders of record as of July 30, 2025.
• This dividend declaration comes as investors focus on the upcoming earnings report, for which analysts are predicting a turnaround from last year’s revenue decline.
• In light of the preferred dividend announcement, we'll explore its impact on key factors shaping First Merchants' investment outlook.

Uncover 15 companies that survived and thrived after COVID and have the right ingredients to survive Trump's tariffs.

First Merchants Investment Narrative Recap

Owning First Merchants means believing in the company’s ability to grow its regional banking footprint while managing lending risk and maintaining strong customer relationships. The recent preferred dividend announcement is a routine event and does not materially impact the biggest short-term catalyst, upcoming earnings results expected to show a revenue recovery, or the greatest risk of ongoing net interest margin pressure due to funding costs and loan yields.

Among the recent announcements, the company's inclusion in several Russell growth indices stands out. This new index membership may draw additional investor attention at a time when the market is closely watching for improvement in First Merchants’ earnings and revenue trajectory.

By contrast, investors should be particularly mindful of persistent declines in commercial deposit balances, as this could indicate...

Read the full narrative on First Merchants (it's free!)

First Merchants' outlook projects $829.3 million in revenue and $250.8 million in earnings by 2028. This requires 10.5% annual revenue growth and a $43.9 million increase in earnings from the current level of $206.9 million.

Uncover how First Merchants' forecasts yield a $44.34 fair value, a 8% upside to its current price.

Exploring Other Perspectives

Two Simply Wall St Community members estimate First Merchants’ fair value between US$28 and US$44.34 per share. With analysts highlighting ongoing net interest margin challenges, your outlook could shift if funding costs keep rising.

Explore 2 other fair value estimates on First Merchants - why the stock might be worth 32% less than the current price!

Build Your Own First Merchants Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your First Merchants research is our analysis highlighting 5 key rewards that could impact your investment decision.
• Our free First Merchants research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate First Merchants' overall financial health at a glance.

Interested In Other Possibilities?

Early movers are already taking notice. See the stocks they're targeting before they've flown the coop:

• AI is about to change healthcare. These 26 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• We've found 17 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
• Outshine the giants: these 19 early-stage AI stocks could fund your retirement.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com