NasdaqGS:FRME

Stock Analysis Report

Executive Summary

First Merchants Corporation operates as the financial holding company for First Merchants Bank that provides community banking services.

Snowflake

Fundamentals

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

How has First Merchants's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.0%

FRME

5.8%

US Banks

3.4%

US Market


1 Year Return

-13.9%

FRME

1.0%

US Banks

5.4%

US Market

Return vs Industry: FRME underperformed the US Banks industry which returned 1% over the past year.

Return vs Market: FRME underperformed the US Market which returned 5.4% over the past year.


Shareholder returns

FRMEIndustryMarket
7 Day4.0%5.8%3.4%
30 Day-3.7%-0.6%-1.0%
90 Day0.8%3.1%-0.4%
1 Year-11.6%-13.9%3.9%1.0%7.7%5.4%
3 Year48.7%39.9%53.5%42.9%46.2%36.8%
5 Year98.1%79.8%69.8%51.3%65.6%47.5%

Price Volatility Vs. Market

How volatile is First Merchants's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is First Merchants undervalued compared to its fair value and its price relative to the market?

34.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: FRME ($37.64) is trading below our estimate of fair value ($57.75)

Significantly Undervalued: FRME is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: FRME is good value based on its PE Ratio (11.4x) compared to the Banks industry average (12.6x).

PE vs Market: FRME is good value based on its PE Ratio (11.4x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: FRME is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: FRME is overvalued based on its PB Ratio (1.2x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is First Merchants forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FRME's forecast earnings growth (10.3% per year) is above the savings rate (2.7%).

Earnings vs Market: FRME's earnings (10.3% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: FRME's earnings are forecast to grow, but not significantly.

Revenue vs Market: FRME's revenue (10.3% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: FRME's revenue (10.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: FRME's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has First Merchants performed over the past 5 years?

23.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: FRME's earnings have grown significantly by 23.9% per year over the past 5 years.

Accelerating Growth: FRME's earnings growth over the past year (30.1%) exceeds its 5-year average (23.9% per year).

Earnings vs Industry: FRME earnings growth over the past year (30.1%) underperformed the Banks industry 31.8%.


Return on Equity

High ROE: FRME's Return on Equity (10.8%) is considered low.


Return on Assets

ROA vs Industry: FRME has a higher Return on Assets than the Banks industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate FRME's Return on Capital Employed to determine if it has improved over the past 3 years.


Next Steps

Financial Health

How is First Merchants's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: FRME has a low level of unsold assets or inventory.

Debt Coverage by Assets: FRME's debt is not covered by short term assets (assets are 0.4x debt).


Financial Institutions Analysis

Asset Level: FRME's level of assets compared to its equity is low.

Allowance for Bad Loans: FRME has a sufficient allowance for bad loans.

Low Risk Liabilities: FRME's liabilities are made up of primarily low risk sources of funding.

Loan Level: FRME has an acceptable proportion of non-loan assets held.

Low Risk Deposits: FRME's loans are broadly funded by customer deposits.

Level of Bad Loans: FRME has an appropriate level of bad loans (0.35%)


Next Steps

Dividend

What is First Merchants's current dividend yield, its reliability and sustainability?

2.76%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.5%markettop25%3.8%industryaverage3.0%forecastin3Years2.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: FRME's dividend (2.76%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: FRME's dividend (2.76%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: FRME's dividend payments have been volatile in the past 10 years.

Growing Dividend: FRME's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (27.9%), FRME's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FRME's dividends in 3 years are forecast to be well covered by earnings (37% payout ratio).


Next Steps

Management

What is the CEO of First Merchants's salary, the management and board of directors tenure and is there insider trading?

12.3yrs

Average management tenure


CEO

Mike Rechin (60yo)

12.5yrs

Tenure

US$2,046,901

Compensation

Mr. Michael C. Rechin, also known as Mike has been the Chief Executive Officer and President of First Merchants Corporation since April 24, 2007. Mr. Rechin serves as the Chief Executive Officer of First M ...


CEO Compensation Analysis

Compensation vs. Market: Mike's total compensation ($USD2.05M) is below average for companies of similar size in the US market ($USD4.07M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Management Age and Tenure

12.3yrs

Average Tenure

54yo

Average Age

Experienced Management: FRME's management team is seasoned and experienced (12.3 years average tenure).


Board Age and Tenure

11.2yrs

Average Tenure

66yo

Average Age

Experienced Board: FRME's board of directors are seasoned and experienced ( 11.2 years average tenure).


Insider Trading

Insider Buying: FRME insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

BuyUS$1,66702 Oct 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares44.09
Max PriceUS$37.80
BuyUS$50002 Oct 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares13.23
Max PriceUS$37.80
SellUS$150,95023 Sep 19
Stephan Fluhler
EntityIndividual
Role
Chief Information Officer
Senior VP & Chief Information Officer
Shares3,873
Max PriceUS$38.98
SellUS$277,25412 Sep 19
Charles Schalliol
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares7,300
Max PriceUS$37.98
BuyUS$1,66705 Sep 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares47.34
Max PriceUS$35.21
BuyUS$50005 Sep 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares14.2
Max PriceUS$35.21
BuyUS$1,66705 Aug 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares43.1
Max PriceUS$38.67
BuyUS$50005 Aug 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares12.93
Max PriceUS$38.67
BuyUS$1,66702 Jul 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares44.95
Max PriceUS$37.08
BuyUS$50002 Jul 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares13.48
Max PriceUS$37.08
SellUS$169,69720 Jun 19
Charles Schalliol
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares4,680
Max PriceUS$36.26
BuyUS$50005 Jun 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares14.78
Max PriceUS$33.83
BuyUS$1,66705 Jun 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares49.26
Max PriceUS$33.83
BuyUS$1,66702 May 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares45.23
Max PriceUS$36.85
BuyUS$50002 May 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares13.57
Max PriceUS$36.85
BuyUS$50002 Apr 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares13.52
Max PriceUS$36.99
BuyUS$1,66702 Apr 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares45.06
Max PriceUS$36.99
BuyUS$50004 Mar 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares12.3
Max PriceUS$40.65
BuyUS$1,66704 Mar 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares41
Max PriceUS$40.65
BuyUS$50005 Feb 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares13.5
Max PriceUS$37.05
BuyUS$1,66705 Feb 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares44.99
Max PriceUS$37.05
BuyUS$1,66703 Jan 19
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares48.78
Max PriceUS$34.17
BuyUS$50003 Jan 19
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares14.63
Max PriceUS$34.17
BuyUS$35,12021 Dec 18
Terry Walker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,000
Max PriceUS$35.12
BuyUS$50004 Dec 18
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares11.97
Max PriceUS$41.76
BuyUS$1,66704 Dec 18
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares39.91
Max PriceUS$41.76
BuyUS$50005 Nov 18
Patrick Sherman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares11.95
Max PriceUS$41.86
BuyUS$1,66705 Nov 18
Gary Lehman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares39.82
Max PriceUS$41.86

Ownership Breakdown


Management Team

  • Mark Hardwick (48yo)

    Executive VP

    • Tenure: 17.5yrs
    • Compensation: US$1.14m
  • Mike Rechin (60yo)

    President

    • Tenure: 12.5yrs
    • Compensation: US$2.05m
  • Brian Hunt (59yo)

    Secretary & Legal Counsel

    • Tenure: 1.8yrs
  • Jeff Lorentson (55yo)

    Senior VP & Chief Risk Officer

    • Tenure: 12.3yrs
    • Compensation: US$165.10k
  • Karen Evens

    VP & Director of Marketing

    • Tenure: 14.7yrs
  • Mike Stewart (53yo)

    Executive VP & Chief Banking Officer

    • Tenure: 12.8yrs
    • Compensation: US$1.05m
  • Stephan Fluhler (50yo)

    Senior VP & Chief Information Officer

    • Tenure: 5.4yrs
    • Compensation: US$556.25k
  • Nicole Weaver

    VP & Director of Corporate Administration

    • Tenure: 0yrs
  • Michele Kawiecki (46yo)

    Senior VP & Director of Finance

    • Tenure: 4.6yrs
  • Steven Harris (55yo)

    Senior Vice President & Director of Human Resources

    • Tenure: 3yrs

Board Members

  • Jean Wojtowicz (61yo)

    Director

    • Tenure: 15.8yrs
    • Compensation: US$114.55k
  • Bill Hoy (70yo)

    Director

    • Tenure: 12yrs
    • Compensation: US$99.05k
  • Charles Schalliol (71yo)

    Chairman of the Board

    • Tenure: 12.5yrs
    • Compensation: US$151.00k
  • Mike Rechin (60yo)

    President

    • Tenure: 12.5yrs
    • Compensation: US$2.05m
  • Gary Lehman (66yo)

    Director

    • Tenure: 8.4yrs
    • Compensation: US$99.05k
  • Patrick Sherman (71yo)

    Director

    • Tenure: 10.4yrs
    • Compensation: US$104.52k
  • Terry Walker (72yo)

    Director

    • Tenure: 13.3yrs
    • Compensation: US$112.04k
  • F. Halderman (52yo)

    Director

    • Tenure: 5.9yrs
    • Compensation: US$104.29k
  • Mike Becher (66yo)

    Director

    • Tenure: 7.3yrs
    • Compensation: US$114.09k
  • Jud Fisher (49yo)

    Director

    • Tenure: 2.7yrs
    • Compensation: US$96.35k

Company Information

First Merchants Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: First Merchants Corporation
  • Ticker: FRME
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$2.111b
  • Shares outstanding: 56.08m
  • Website: https://www.firstmerchants.com

Number of Employees


Location

  • First Merchants Corporation
  • 200 East Jackson Street
  • Muncie
  • Indiana
  • 47305
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FRMENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 1989
FM5BST (Boerse-Stuttgart)YesCommon StockDEEURJun 1989

Biography

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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 23:34
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.