First Merchants (NASDAQ:FRME) Shares Gap Down on Disappointing Earnings

First Merchants Corporation (NASDAQ:FRME)’s stock price gapped down before the market opened on Thursday following a weaker than expected earnings announcement. The stock had previously closed at $43.75, but opened at $39.60. First Merchants shares last traded at $41.0330, with a volume of 76,847 shares traded.

The bank reported $0.74 earnings per share for the quarter, missing the consensus estimate of $1.02 by ($0.28). First Merchants had a net margin of 17.05% and a return on equity of 9.02%. The firm had revenue of $202.49 million during the quarter, compared to analyst estimates of $202.78 million.

First Merchants Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, June 19th. Investors of record on Friday, June 5th were paid a $0.37 dividend. This represents a $1.48 dividend on an annualized basis and a yield of 3.4%. The ex-dividend date of this dividend was Friday, June 5th. This is a positive change from First Merchants’s previous quarterly dividend of $0.36. First Merchants’s dividend payout ratio is currently 43.53%.

Wall Street Analyst Weigh In

FRME has been the subject of a number of research reports. Wall Street Zen upgraded shares of First Merchants from a “sell” rating to a “hold” rating in a research report on Sunday, May 17th. Piper Sandler increased their price target on shares of First Merchants from $49.00 to $51.00 and gave the company an “overweight” rating in a research report on Friday, June 26th. Finally, Weiss Ratings cut shares of First Merchants from a “buy (b)” rating to a “hold (c+)” rating in a research note on Monday, May 18th. Two research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. According to data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus price target of $49.00.

Insider Activity at First Merchants

In related news, Director Larry W. Myers sold 10,000 shares of the stock in a transaction on Thursday, June 11th. The stock was sold at an average price of $41.50, for a total transaction of $415,000.00. Following the sale, the director owned 99,751 shares of the company’s stock, valued at $4,139,666.50. This trade represents a 9.11% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 1.77% of the stock is currently owned by insiders.

Institutional Investors Weigh In On First Merchants

Several hedge funds have recently modified their holdings of FRME. Waterfront Wealth Inc. raised its position in shares of First Merchants by 1.0% in the first quarter. Waterfront Wealth Inc. now owns 28,184 shares of the bank’s stock valued at $1,092,000 after buying an additional 275 shares during the last quarter. Allworth Financial LP lifted its stake in shares of First Merchants by 9.9% during the third quarter. Allworth Financial LP now owns 3,100 shares of the bank’s stock valued at $117,000 after buying an additional 279 shares during the period. GAMMA Investing LLC boosted its position in First Merchants by 24.9% during the second quarter. GAMMA Investing LLC now owns 1,403 shares of the bank’s stock worth $61,000 after acquiring an additional 280 shares during the last quarter. Chicago Partners Investment Group LLC boosted its position in First Merchants by 1.3% during the fourth quarter. Chicago Partners Investment Group LLC now owns 25,264 shares of the bank’s stock worth $962,000 after acquiring an additional 335 shares during the last quarter. Finally, California State Teachers Retirement System grew its stake in First Merchants by 0.8% in the 2nd quarter. California State Teachers Retirement System now owns 54,058 shares of the bank’s stock worth $2,070,000 after acquiring an additional 417 shares during the period. 73.92% of the stock is owned by institutional investors and hedge funds.

First Merchants Price Performance

The company’s 50 day simple moving average is $41.85 and its 200 day simple moving average is $40.32. The company has a current ratio of 0.94, a quick ratio of 0.92 and a debt-to-equity ratio of 0.52. The stock has a market capitalization of $2.72 billion, a PE ratio of 13.84 and a beta of 0.84.

About First Merchants

First Merchants Corporation, through its subsidiary First Merchants Bank, offers a comprehensive suite of banking and financial services to individuals, businesses and public sector clients. The company’s core business activities include retail and commercial banking, lending, treasury and cash management, and wealth advisory services. With a focus on relationship banking, First Merchants seeks to deliver tailored solutions for deposit accounts, loan financing and other credit products.

On the consumer side, First Merchants provides checking and savings accounts, certificates of deposit, personal and mortgage loans, and electronic banking conveniences.