First Merchants Corporation offers an inexpensive forward multiple of roughly 9 times and a breakout chart structure with four consecutive earnings beats, but with the stock priced essentially at the analyst consensus target, declining revenues, and high geographic concentration, the setup favors waiting for analyst upgrades before adding.
Thesis pillars
- Cheap Valuation With Breakout Setup→Stable
- Stock At Analyst Target→Stable
- Geographic Concentration Limits Growth↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 25, 2026· older than 90 days
First Merchants Corporation (FRME) Stock Analysis
Financial Services · Banks - Regional
Hold if already holding. Not a fresh buy at $41.89, but acceptable to hold if already in. Reasons: Concentration risk — Geographic: Indiana, Ohio, Michigan; Concentration risk — Regulatory: FDIC and Indiana DFI.
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana, operating 111 banking locations solely in Indiana, Ohio, and Michigan through its subsidiary First Merchants Bank. The bank earns revenue from commercial and consumer lending, deposits,... Read more
Hold if already holding. Not a fresh buy at $41.89, but acceptable to hold if already in. Reasons: Concentration risk — Geographic: Indiana, Ohio, Michigan; Concentration risk — Regulatory: FDIC and Indiana DFI. Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Score 6.1/10, moderate confidence.
Passes 6/8 gates (positive momentum, clean insider activity, news events none recent, earnings proximity 81d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: aggressive.
About First Merchants Corporation
About First Merchants Corporation
First Merchants Corporation held $19.0 billion in consolidated assets, $15.3 billion in deposits, and $2.5 billion in stockholders' equity at December 31, 2025—reflecting a February 1, 2026 acquisition of First Savings Financial Group, a $2.4 billion institution headquartered in Jeffersonville, Indiana. The company operates 111 banking locations exclusively in Indiana, Ohio, and Michigan through its single community banking segment, with the Bank subject to primary oversight by the FDIC and the Indiana DFI and the holding company regulated by the Federal Reserve.
First Merchants generates revenue primarily through net interest income on its commercial and consumer loan and investment portfolio, supplemented by fee income from treasury management, private wealth advisory services through First Merchants Private Wealth Advisors, and mortgage banking. Funding relies on $15.3 billion in total deposits, supplemented where needed by brokered certificates of deposit, repurchase agreements, federal funds purchased, and Federal Home Loan Bank advances; the 10-K notes that inability to access these sources at maturity could constrain financial flexibility. Capital ratios at December 31, 2025 included a CET1 of 11.70%, tier 1 of 11.86%, and total risk-based capital of 13.41%—each above the Basel III minimums inclusive of the 2.5% conservation buffer. The bank competes with national, regional, and internet banks as well as credit unions and finance companies across its three-state footprint.
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The 10-K notes that allowances for credit losses under the fully phased-in CECL methodology—fully reflected in regulatory capital on January 1, 2024—are sensitive to macro forecasts and management judgment, and that material additions to the allowance could materially reduce net income. First Merchants' credit strategy emphasizes diversification across regional geography, industry, and customer level, supported by an independent loan review function and a loan watch list, but the filing acknowledges that credit losses may exceed allowance levels if adverse conditions materialize. The February 2026 acquisition of First Savings Financial Group, adding $1.9 billion in loans, introduces near-term integration risk for the credit portfolio.
See also: Financial Services · Banks - Regional
From First Merchants Corporation's most recent 10-K filing, extracted June 10, 2026.
Recent developments
No fresh coverage since Oct 21, 2026
Recent Developments — First Merchants Corporation
Latest news
- NEWS Earnings Flash (FRME) First Merchants Posts Q3 Revenue $199.1M, vs. FactSet Est of $203.9M - marketscreener.com — marketscreener.com Oct 21, 2026 negative
- NEWS FIRST MERCHANTS ($FRME) Releases Q3 2026 Earnings - Quiver Quantitative — Quiver Quantitative Oct 21, 2026 neutral
- NEWS First Merchants (NASDAQ:FRME) misses Q3 2026 revenue estimates - StockStory — StockStory Oct 21, 2026 negative
- NEWS First Merchants (FRME) Q3 Earnings and Revenues Top Estimates - Yahoo Finance — Yahoo Finance Oct 21, 2026 positive
- NEWS First Merchants (NASDAQ:FRME) Posts Earnings Results, Beats Estimates By $0.06 EPS - MarketBeat — MarketBeat Oct 21, 2026 positive
Latest item Oct 21, 2026 · Generated 2026-11-05T11:39:29Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHGeographicIndiana, Ohio, Michigan10-K Item 1: 'The Bank includes 111 banking locations in Indiana, Ohio, and Michigan.'
- HIGHregulatoryFDIC and Indiana DFI10-K Item 1: 'The Bank is subject to the primary regulatory oversight, supervision and examination of the FDIC and the Indiana DFI.'
Material Events(8-K, last 90d)
- 2026-05-19Item 5.02LOWOn May 19, 2026, director Gary Lehman (Board member since 2011) retired from First Merchants Corporation's Board, effective immediately. Paul Fultz was appointed same day to fill the vacancy, with term through the 2027 Annual Meeting. No disagreement with Corporation cited.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
1 floor-breaker
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $41.89, but acceptable to hold if already in. Reasons: Concentration risk — Geographic: Indiana, Ohio, Michigan; Concentration risk — Regulatory: FDIC and Indiana DFI. Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Analyst target $40.31 reached (−3.8%), stop $40.33 (−3.9%), A.R:R -0.5:1. Score 6.1/10, moderate confidence.
Analyst target $40.31 reached (−3.8% from $41.89); no take-profit level is published. Analyst target $40.31 reached (−3.8%), stop $40.33 (−3.9%), A.R:R -0.5:1. Stop-loss: $40.33.
Concentration risk — Geographic: Indiana, Ohio, Michigan; Concentration risk — Regulatory: FDIC and Indiana DFI; Analyst target reached - limited upside remaining.
First Merchants Corporation trades at a P/E of 13.3 (forward 9.6). TrendMatrix value score: 7.9/10. Verdict: Hold.
12 analysts rate FRME, with a consensus score of 4.0/5. 6 analysts publish price targets averaging $46.
What does First Merchants Corporation do?First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana, operating 111 banking...
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana, operating 111 banking locations solely in Indiana, Ohio, and Michigan through its subsidiary First Merchants Bank. The bank earns revenue from commercial and consumer lending, deposits, mortgage banking, and private wealth management, reporting $19.0 billion in consolidated assets and $15.3 billion in deposits as of December 31, 2025.