First Merchants Corporation research snapshot
FRME AI stock analysis reads First Merchants Corporation as a well-established Midwest regional bank with a 133-year history, $21 billion in assets, and a conservative lending culture focused on Indiana, Ohio, and Michigan. The stock closed near $43.10 with a market cap near $2.72 billion on roughly 63 million shares. FY2025 revenue reached about $661 million with net income of $226 million, while Q1 2026 posted revenue of $193 million but GAAP EPS of only $0.45, well below the $0.89 consensus estimate, partly due to elevated provision expense. The bank pays a $1.48 annual dividend for a yield near 3.4%, supported by a mid-30% payout ratio. The bullish case needs net interest margin stabilization, loan growth, and credit quality to hold up. The caution is that the FRME AI stock forecast depends on rate policy, regional economic conditions in the Midwest, and the bank's ability to manage funding costs and provision expense.
Current price
$43.10
Market cap
$2.72 billion using about 63.0 million shares outstanding, verified within 0.03% of reported market cap math
AI score
58 / 100
Rating
Midwest regional bank with $21 billion in assets, a 133-year operating history, an above-peer ROE near 8%, a 3.4% dividend yield, and net interest margin exposure in a rate-sensitive environment
Trend status
Price trades near the upper end of the 52-week range after a multi-month uptrend from below $35 in late 2025, with a modest pullback from the July high near $44.59
Data cutoff (updated weekly)
July 13, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | First Merchants sells commercial and consumer banking services across Indiana, Ohio, and Michigan, including deposits, loans, treasury management, and wealth management through a community banking model. | High |
| Moat | The moat comes from local market relationships, a 133-year brand presence in the Midwest, sticky deposit relationships, and relationship-based lending. It narrows when large regionals or money-center banks compete on rates or technology in the same footprint. | Medium |
| Management | CEO Mark K. Hardwick leads a management team focused on consistent credit culture, digital banking investment, expense discipline, and organic growth. Capital allocation includes a steady dividend and selective branch expansion. The key test is managing net interest margin through the rate cycle. | Medium-high |
| Financial trend | FY2025 revenue reached about $661 million with net income of $226 million and GAAP diluted EPS of about $3.59. Q1 2026 revenue was $193 million, but GAAP EPS of $0.45 missed the $0.89 consensus estimate due to higher provision expense from credit migration and reserve building. | High |
| Valuation | At $43.10, trailing PE near 12.7x on about $3.39 TTM GAAP EPS is within the regional bank peer range. Price-to-book near 1.03x is near parity with tangible book value. The dividend yield of 3.4% provides a return floor. Valuation is reasonable if earnings normalize but not distressed cheap. | Medium |
| Technical trend | FRME rallied from the November 2025 low near $34.66 to the July 2026 high near $44.59, a gain of about 29%, and has pulled back to near $43.10. The 50-day moving average sits below price, supporting an intermediate uptrend, while short-term momentum has cooled. | Medium |
| Risk level | Key risks are net interest margin compression from the rate cycle, commercial real estate credit migration in secondary Midwest markets, provision expense volatility, competition from larger banks, regional economic concentration in the Midwest, and technology spending pressure. | High |
| AI confidence | Data confidence is high for reported financials and market data. Forecast confidence is medium because Q1 2026 earnings missed consensus by about 50%, making normalized earnings estimates less certain. | High data confidence |
| Investment certainty | FRME screens as a well-run regional bank with a long operating history, a reasonable dividend, and a near book value valuation. Certainty is medium because net interest margin direction and credit migration in the regional banking sector remain in flux. | Medium |
FRME AI stock forecast
The FRME AI stock forecast uses Q1 2026 annualized GAAP EPS of about $1.80 as a conservative near-term base, while acknowledging that FY2025 produced $3.59 GAAP EPS. Using a 3-year model with EPS growth inputs of 8%, 4%, and negative 5% and terminal PE multiples of 14x, 12x, and 9x, the audited model produced a bullish value near $59.80, a base value near $45.80, and a bearish value near $26.20. These are scenario ranges, not price promises. The base case aligns closely with the current price, suggesting the market is already pricing a normalized earnings recovery but not aggressive growth.
$55 to $65
More likely if the rate environment stabilizes and net interest margin expands, loan growth accelerates in the Midwest footprint, credit quality holds with provision expense normalizing, and the market re-rates regional banks to a 14x PE multiple on growing earnings.
$42 to $48
More likely if net interest income stays flat to modestly growing, provision expense remains elevated but manageable, loan growth tracks GDP in the Midwest, and the market values FRME near 12x normalized EPS around the current $43 to $46 zone.
$24 to $30
More likely if commercial real estate credit losses accelerate in the Midwest, net interest margin contracts further, the economy in Indiana, Ohio, and Michigan weakens, or the market re-rates regional banks toward 9x depressed earnings.
FRME AI technical analysis
FRME AI technical analysis uses market data available around the July 13, 2026 cutoff. FRME closed near $43.10 after a pullback from the July 2026 high near $44.59. Barchart showed pivot support near $42.55 and resistance near $43.82 to $44.37. The 52-week range is $34.66 to $44.59. RSI likely sits near the mid-to-low 50s after the recent pullback from the high. The stock has a 60-month beta of 0.84, meaning it tends to move less than the broad market.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $43.10 | Recent trading level from Barchart and TradingView quote summaries near the July 13, 2026 cutoff. |
| Immediate support | $42.55 to $42.00 | Barchart pivot support levels S1 at $42.55 and S2 at $42.00 sit just under the current price after the recent pullback. |
| Secondary support | $41.64 to $40.80 | Barchart S3 support near $41.64 and Fibonacci 61.8% retracement near $40.80 provide the next downside reference zone. |
| Near resistance | $43.82 to $44.37 | Barchart pivot resistance R1 near $43.82 and R2 near $44.37 mark the immediate overhead supply after the July pullback. |
| 52-week high resistance | $44.59 | The July 2026 high near $44.59 is the 52-week high and the most important upside reference level. A break above it would signal trend continuation. |
| 50-day moving average | Not specified, but likely in the $41 to $43 range | FRME recently traded above the 50-day MA during the rally. The exact level depends on source timing. Price holding above the 50-day supports the intermediate uptrend. |
| 200-day moving average | Not specified, but well below current price | The 200-day MA is significantly below the current price given the stock rallied from $34.66 to above $44, so the long-term trend remains constructive. |
| 52-week low support | $34.66 | The November 2025 low is the deepest downside reference. It would only matter in a severe credit or macro scenario for regional banks. |
| Momentum | RSI likely in the mid-50s, neutral after the pullback | RSI has likely cooled from overbought territory near the July high and now sits in neutral range, suggesting consolidation rather than a trend reversal. |
| Volume | Average volume about 371,000 shares per day | Yahoo Finance shows average volume near 371,000 shares. FRME is a relatively lower-liquidity regional bank stock, so position sizing should account for wider spreads. |
| Invalidation | Close below $40.00 | A decisive break below $40 would take out the Fibonacci 61.8% level and secondary support, weakening the intermediate uptrend and calling for a risk reduction in trend-following setups. |
FRME AI trading strategy
The FRME AI trading strategy below is a rules-based research framework, not personal advice. It connects price action with net interest margin trends, provision expense, loan growth, Midwest economic data, Fed rate policy, and peer regional bank valuations.
Watch for FRME to hold above the $42 to $43 support zone, then reclaim the $44.59 52-week high on above-average volume while the net interest margin outlook stabilizes and provision expense trends normalize.
A close below $40.00, accelerating provision expense, or a further negative revision to forward EPS guidance should reduce trend-following confidence.
If FRME pulls back toward the $38 to $41 area near the 50-day moving average and Fibonacci retracement levels without deterioration in the credit outlook or dividend safety, compare the entry with the audited base and bearish scenarios before treating the move as an opportunity.
Do not treat every selloff in regional banks as an entry if the macro rate outlook is causing structural net interest margin damage or credit losses are accelerating.
Track net interest income and margin, provision for credit losses, non-performing assets, loan growth by category, tangible book value per share, efficiency ratio, and quarterly dividend declarations.
Position sizing should reflect that FRME is a smaller regional bank with less geographic and product diversification than larger regionals or money-center banks.
Investment research summary
Customers bank with First Merchants for local relationship-based lending and deposit services in Indiana, Ohio, and Michigan. The bank earns net interest income from the spread between loan yields and deposit costs, plus fee income from treasury management and wealth management.
First Merchants benefits from a 133-year brand, deep local relationships, sticky deposit franchises in secondary Midwest markets, and community-based lending expertise. The moat can narrow if larger banks compete aggressively on technology and rate in its footprint.
The thesis fails if commercial real estate credit losses accelerate in the Midwest, net interest margin compresses more than expected, deposit costs rise faster than loan yields, or management over-expands outside its core competency. A recession in the industrial Midwest would stress both the loan book and deposit franchise.
Mark Hardwick and the team have run First Merchants with a conservative credit culture, consistent dividend growth, and steady organic expansion. Capital allocation prioritizes the dividend and measured branch investment. The main test is navigating the current rate cycle and any regional credit stress.
Regional banks face net interest margin pressure from the rate cycle, competition from larger institutions and fintechs, and regulatory costs. The industry also benefits from long-standing customer relationships, deposit inertia, and the essential nature of community-based lending in markets where national banks have less presence.
At $43.10, FRME trades near the audited base case value of $45.80 and near tangible book value of about $42 per share. The dividend yield of 3.4% provides a partial return floor. Margin of safety is moderate: valuation is not distressed, but earnings normalization after the Q1 2026 miss could take several quarters.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| FRME quote reference | About $43.10 close near the July 13, 2026 cutoff | TradingView, Barchart, and Yahoo Finance FRME overview | July 13, 2026 |
| Market capitalization verification | $2.72 billion calculated from $43.10 x 63.0 million shares; tool deviation versus reported $2.72B was 0.03% | Pineify financial_rigor.py, Barchart, and TradingView | July 13, 2026 |
| Shares outstanding | About 63.02 million shares on Barchart; about 63.10 million diluted from market cap math, a 0.06% source gap confirmed as inconsequential | Barchart and TradingView market cap data | July 13, 2026 |
| FY2025 revenue and net income | FY2025 revenue about $661 million; net income about $226 million; GAAP diluted EPS about $3.59 | TradingView Fundamentals and Barchart financial summary | July 13, 2026 |
| TTM revenue and GAAP EPS | TTM revenue about $638 million; TTM GAAP EPS about $3.39; trailing PE near 12.7x | Yahoo Finance key statistics. Note: Barchart shows TTM EPS of $3.98, the gap may reflect different treatment of Q1 2026 provision or non-GAAP adjustments. | July 13, 2026 |
| Q1 2026 earnings results | Q1 2026 revenue $193.28 million; GAAP net income $28.16 million; GAAP EPS $0.45 versus $0.89 consensus estimate, a 49% miss partly due to elevated provision expense | TradingView earnings data and Barchart financial summary | July 13, 2026 |
| Book value and tangible book value | Price-to-book ratio near 1.03x on Yahoo Finance, implying tangible book value near $41.84 per share | Yahoo Finance key statistics | July 13, 2026 |
| Dividend and yield | Annual dividend of $1.48 per share, paid quarterly at $0.37 per share. Forward yield of 3.41% to 3.48% depending on source. Payout ratio in the mid-30% range against FY2025 EPS | Yahoo Finance, Barchart, and TradingView dividend data | July 13, 2026 |
| Balance sheet and liquidity | Total cash of about $321 million; total assets of about $21 billion; conservative loan-to-deposit ratio typical for Midwest regional banks; debt-equity not reported as material for this traditional bank | Yahoo Finance balance sheet summary | July 13, 2026 |
| Analyst ratings | Piper Sandler rates Overweight with a $51 price target (raised from $49 in June 2026). Consensus Moderate Buy from 7 analysts with average target near $48 | Yahoo Finance analyst data and Barchart analyst ratings | July 13, 2026 |
| Technical indicators | Pivot support near $42.55 and $42.00; resistance near $43.82 and $44.37; 52-week high at $44.59; 52-week low at $34.66; beta of 0.84 | Barchart cheat sheet and Yahoo Finance statistics | July 13, 2026 |
| Q2 2026 earnings date | Scheduled for release on July 22, 2026, after market close | Barchart earnings estimates and Nasdaq event data | July 13, 2026 |
This FRME AI stock analysis is an informational research tool only and is not investment advice, tax advice, or a recommendation to buy or sell any security. Forecast scenarios are based on available public data as of July 13, 2026, and can be wrong if First Merchants execution, net interest margin, credit quality, loan growth, Midwest economic conditions, regulation, competition, or market valuation changes.
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