First Merchants Corp. (Indiana) : FRME-US: Dividend Analysis : December 01st, 2017 (record date) : By the numbers : December 4, 2017

Our analysis is based on comparing First Merchants Corp. (Indiana) with the following peers – First Financial Corporation, 1st Source Corporation, Horizon Bancorp, Old National Bancorp, MainSource Financial Group, Inc., German American Bancorp, Inc., Lakeland Financial Corporation and MutualFirst Financial, Inc. (THFF-US, SRCE-US, HBNC-US, ONB-US, MSFG-US, GABC-US, LKFN-US and MFSF-US).

First Merchants Corp. (Indiana)’s dividend yield is 1.57 percent and its dividend payout is 30.39 percent. This compares to a peer average dividend yield of 1.68 percent and a payout level of 34.53 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 58 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2017), FRME-US paid a medium quality dividend, which represents a yield of 1.50% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were medium quality and 1 was low quality.
  • The ending cash balance, with a dividend coverage of 5.04x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to September 30, 2017), FRME-US paid a medium quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.18x), investing cash flow (coverage of -16.22x), issuance cash flow (coverage of 15.66x) and twelve-month prior cash (coverage of 3.42x), for a total dividend coverage of 6.04x.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 0.68 0.69 1.25 1.51 1.44 1.57
Dividend Payout (%) 7.09 12.82 17.58 23.84 27.27 30.39

A complete list of metrics and analysis is available on the company page.

Company Profile

First Merchants Corp. operates as financial holding company. Its provides consumer, mortgage and business banking, and cash and wealth management services to its customers through its subsidiaries First Merchants Bank NA, Lafayette Bank and Trust NA, First Merchants Bank of Central Indiana NA, Commerce National Bank, First Merchants Trust Co. NA and First Merchants Insurance Services. It offers financial services, including accepting time deposits, savings and demand deposits; making consumer, commercial, agri-business and real estate mortgage loans; renting safe deposit facilities; providing personal and corporate trust services; providing full-service brokerage; and providing other corporate services, letters of credit and repurchase agreements. The company also operates a full-service property, casualty, personal lines, and employee benefit insurance agency through its subsidiary First Merchants Insurance services. First Merchants was founded in September 1982 and is headquartered in Muncie, IN.

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