First Merchants Corporation (FRME) AI Stock Analysis

First Merchants Corporation serves as the financial holding company for First Merchants Bank, offering community banking services throughout Indiana, Illinois, Ohio, and Michigan. Headquartered in Muncie, Indiana, the bank operates 109 banking locations. It offers time, savings, and demand deposits, as well as consumer, commercial, agri-business, and real estate mortgage loans, in addition to public finance solutions. The company serves both individual and corporate clients with personal and corporate trust services, brokerage, private wealth management, and corporate banking solutions. It also provides electronic and mobile banking, letters of credit, and repurchase agreements.

Between FY2020 and FY2025, First Merchants delivered a 5-year revenue compound annual growth rate of 13.5%. Revenue reached $1.05B in FY2024 and remained flat at $1.05B in FY2025, though revenue growth fell 0.3%. Net income rose to $226.0M in FY2025 from $201.4M in FY2024, resulting in a net margin of 21.5% and EPS of $3.89. In the trailing twelve months through June 30, 2026, revenue stood at $642.2M with EPS of $3.11. For the quarter ended June 30, 2026, quarterly revenue grew 2.8% year-over-year, while quarterly earnings declined 28.7%.

As of June 30, 2026, First Merchants held $3.91B in cash and short-term investments against total debt of $1.60B, yielding net cash of $2.30B. Total assets stood at $21.35B and shareholders' equity was $2.70B, with a debt-to-equity ratio of 0.59 and a current ratio of 0.24. In FY2025, the company generated $283.6M in operating cash flow and free cash flow. Cash deployment in FY2025 included $84.8M in dividends paid and $46.9M in share buybacks.

At $39.60, First Merchants has a market cap of $2.49B and an enterprise value of $3.50B. The stock trades at a trailing P/E of 12.7x and a forward P/E of 11.1x, compared to medians of 12.1x and 10.8x for its US-listed Financial Services peers. Its price-to-sales ratio is 3.9x compared to the peer median of 3.2x, while its price-to-book ratio is 0.9x. Over the past year, the stock returned 16.4%, closely tracking the S&P 500's 16.8% return, while its 5-year return of 10.9% trailed the S&P 500's 83.0% return.

First Merchants provides an annual forward dividend of $1.48 per share, which equates to a dividend yield of 3.74% as of October 16, 2026. The company maintains a payout ratio of 39.0% and has paid dividends for 38 consecutive years. Over the past 5 years, the dividend has grown at an annualized rate of 6.6%. Its last ex-dividend date occurred on September 4, 2026.

Wall Street coverage includes 6 analysts, consisting of 2 Strong Buy, 3 Buy, and 1 Hold ratings. The mean price target is $46.50, representing an upside of 17.4% above the last close of $39.60. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $805.1M and EPS of $3.86. First Merchants has beaten EPS estimates in 3 of the last 4 quarters, with its next earnings report scheduled for October 21, 2026.

This page is an AI-written research summary of First Merchants Corporation (FRME). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

Related: FRME income statement, FRME balance sheet, FRME key metrics, FRME analyst forecast, FRME chart. See the FRME stock overview for the latest quote and news.