Company Overview
First Merchants Corporation functions as a financial holding company that oversees First Merchants Bank, delivering a comprehensive suite of commercial and consumer banking services. The institution operates within the Financial Services sector, specifically categorized under the Banks - Regional industry, which implies a focus on localized lending and deposit gathering rather than nationwide systemic dominance. The company employs a workforce of 2,086 individuals to support its operations, while its reported market capitalization is listed as N/A and its trailing twelve-month revenue stands at $641.70M. The absence of a specific market cap figure in available data prevents a direct valuation comparison with larger peers, yet the revenue of $641.70M combined with a regional industry classification suggests the entity maintains a significant but localized footprint within the banking landscape. The employee count of 2,086 further contextualizes the scale of operations required to manage the diverse product offerings, including checking, savings, and deposit products alongside lending solutions.
Financial Health
The company reported a trailing twelve-month revenue of $641.70M and a corresponding net income of $224.13M, while the specific EBITDA figure is not disclosed in the available data. The substantial gap between the $641.70M revenue and the $224.13M net income highlights a cost structure where operating expenses are managed efficiently to retain a significant portion of top-line income as profit. Free cash flow metrics are not provided in the current data set, meaning an external assessment of the company's immediate financial flexibility regarding capital allocation must rely on other balance sheet indicators. The gross margin is reported as 0.0%, a standard characteristic for financial institutions where interest income and expense are recorded net of each other rather than as a traditional gross profit figure. In contrast, the operating margin stands at 42.7% and the profit margin is 35.2%, indicating that for every dollar of revenue, the company retains over 35 cents as net earnings after all expenses are deducted. The balance sheet shows a cash position of $328.93M against total debt of $1.07B, which suggests a leveraged position where debt obligations exceed liquid cash reserves. The debt-to-equity ratio is listed as N/A, preventing a direct calculation of leverage relative to shareholders' equity, but the cash versus debt comparison indicates the company relies on borrowed funds to finance its assets. The current ratio is not available in the provided facts, so a specific assessment of short-term liquidity relative to current liabilities cannot be quantified with the given data. Return on Equity is 9.5% and Return on Assets is 1.2%, revealing that the company generates significantly higher returns on shareholder capital compared to its total asset base, which is typical for banks where assets are heavily financed by low-cost deposits.
Valuation Assessment
The trailing twelve-month P/E ratio is 6.86, whereas the forward P/E ratio is N/A, indicating that market expectations for future earnings growth cannot be quantified using standard forward multiples based on the available data. The price-to-book ratio is 0.61, which suggests the company is trading at a significant discount to its book value per share, potentially reflecting market concerns about asset quality or growth prospects rather than a direct premium. Both the price-to-sales ratio and the EV/EBITDA metric are listed as N/A, meaning alternative valuation methods that focus on sales efficiency or enterprise value multiples are not applicable or calculable with the current disclosure. The stock has traded between a 52-week high of $27.09 and a 52-week low of $25.00, though the specific current share price is not provided to calculate the exact percentage distance from these levels. The beta value is 0.91, which indicates that the stock's price volatility is slightly lower than the broader market benchmark, suggesting it may be less sensitive to general market fluctuations compared to the average financial stock.
Growth & Income
Revenue growth year-over-year is -4.6% and earnings growth year-over-year is -10.9%, indicating that earnings are contracting at a faster rate than revenue, which may suggest rising cost pressures or a decline in net interest margins. The dividend yield is 7.2%, while the payout ratio is N/A, preventing a direct calculation of sustainability based on current earnings per share; however, the high yield in the context of declining earnings growth warrants scrutiny regarding the long-term ability to maintain this payout level without capitalizing on retained earnings. The available facts do not classify the company as a non-dividend payer, so the focus remains on the existing 7.2% yield and the need to understand its relationship to the company's profitability. Overall, the growth and income profile presents a scenario of negative earnings growth alongside a high current dividend yield, creating a complex picture where income support exists but capital expansion is currently hindered by contraction in earnings performance.