First Merchants Corporation (FRME) Stock Price & How to Invest
Last updated July 2026
Short answer
First Merchants Corporation (FRME) is a Muncie, Indiana based regional bank holding company with roughly $21 billion in assets across the Midwest, so its shares are a way to own a community-banking franchise that earns from lending and fees and pays a mid-single-digit dividend yield.
FRME stock price
As of 2026-07-13, First Merchants Corporation (FRME) last closed at $43.30, up 3.8% over the past year. Over the past 52 weeks it has traded between $34.99 and $44.29.
Prices are daily closing prices from Yahoo Finance and may be delayed. For the live quote, check your broker or First Merchants Corporation's investor relations page. Walnut is informational, not investment advice.
What does First Merchants Corporation (FRME) do?
First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana, organized in 1982 and operating through First Merchants Bank, whose roots trace back to 1893. It is the largest financial services holding company headquartered in central Indiana and one of the largest in the state, running community-banking operations across roughly 125 locations in Indiana, Ohio, Michigan, and Illinois. In the first quarter of 2026 it completed the all-stock acquisition of First Savings Financial Group, adding about $2.4 billion in assets and pushing total assets to roughly $21.1 billion, loans to about $15.3 billion, and deposits to about $16.5 billion.
The investment picture is a classic regional-bank story of net interest income plus fee revenue, layered with acquisition-driven growth. First Merchants earns most of its money from the spread between what it charges on commercial and consumer loans and what it pays on deposits, supplemented by wealth management, card, and service-charge fees. Its net interest margin was about 3.35 percent in the first quarter of 2026, and adjusted earnings held up even as one-time items (a large loss on mortgage loans moved to held-for-sale plus First Savings integration costs) depressed reported net income. As with any bank, results swing with credit quality, interest rates, and the health of the Midwest regional economy, and the stock trades at a modest earnings multiple with a dividend yield well above the broad market.
What's driving First Merchants Corporation (FRME)?
1. Indiana-anchored community-banking scale
First Merchants is the dominant community bank in central Indiana and a top financial holding company statewide, with about $21 billion in assets spread across Indiana, Ohio, Michigan, and Illinois. That density in familiar Midwest markets supports stable deposit funding and commercial-lending relationships. Scale also spreads fixed technology and compliance costs across a larger base.
2. Acquisition-driven growth
The company closed its roughly $241 million all-stock purchase of First Savings Financial Group in the first quarter of 2026, adding about $2.4 billion in assets and expanding its branch network toward Louisville and southern Indiana. First Merchants has a long history of bolt-on bank deals, and realizing cost savings while retaining acquired clients is a recurring earnings lever, though integration carries execution and charge risk.
3. Net interest margin and lending mix
Net interest margin was about 3.35 percent in the first quarter of 2026, up roughly 13 basis points year over year, aided by loan repricing and the acquired balance sheet. Commercial and commercial-real-estate lending anchor the loan book. A stable-to-firmer rate environment and disciplined deposit pricing would support the spread that drives most of the bank's revenue.
4. Capital return through dividends
First Merchants pays a quarterly cash dividend, raised to about $0.37 per share in 2026, producing a yield generally around 3.5 percent, above the broad market. A payout ratio around half of earnings and solid capital levels leave room to sustain the dividend and opportunistically repurchase shares, blending income with modest growth.
What are the risks to First Merchants Corporation (FRME)?
As a regional bank, First Merchants' earnings are cyclical and hinge on credit quality, so a Midwest slowdown, rising unemployment, or stress in commercial real estate could lift loan-loss provisions and pressure profit. Its results are sensitive to interest rates and deposit costs, which can compress the net interest margin. Its concentration in Indiana and adjacent states means less geographic diversification than the largest banks. Acquisitions like First Savings add integration, cost, and one-time-charge risk, as seen in the depressed reported earnings during the closing quarter. The bank also operates under heavy regulation and capital requirements that constrain flexibility.
How is First Merchants Corporation (FRME) valued? (approximate, July 2026)
A simple financial snapshot. These are approximations and refresh quarterly; for current figures see First Merchants Corporation's investor relations page or your broker.
- Revenue (net interest income + fees, TTM): ~$850M
- Net income (TTM): ~$210M
- Q1 2026 adjusted EPS: ~$1.03 (GAAP ~$0.45)
- Market cap: ~$2.6B
- P/E (trailing): ~12x
- Dividend yield: ~3.5%
As of July 2026, FRME trades around $42 per share with a market cap near $2.6 billion and a trailing P/E of roughly 12 times, a modest multiple typical of a Midwest regional bank. First-quarter 2026 reported net income fell to about $28 million (diluted EPS near $0.45) because of a mortgage-loan reclassification loss and First Savings integration costs, but adjusted EPS was about $1.03 as core lending and fee income grew. The roughly 3.5 percent dividend yield is well above the broad market.
Who competes with First Merchants Corporation (FRME)?
Indiana and Midwest community banks
Lakeland Financial (Lake City Bank), Horizon Bancorp, and German American Bancorp are Indiana-rooted peers that compete for the same middle-market commercial and community-banking relationships across Indiana and adjacent states, where First Merchants generally holds greater scale.
Larger regional banks
Old National Bancorp, Fifth Third, Huntington Bancshares, and KeyCorp are bigger Midwest regionals that compete for commercial lending, deposits, and wealth clients. They have more scale and broader footprints, but First Merchants competes on local relationships and decision-making in its core markets.
National banks and nonbank lenders
Large national banks such as JPMorgan Chase and PNC, plus credit unions and fintech lenders, compete for deposits and consumer and small-business loans, pressuring pricing and pushing community banks to differentiate on service and local knowledge.
How to invest in First Merchants Corporation (FRME)
There are three common ways to get FRME exposure. Buy shares (or fractional shares) directly at any major broker. Hold an ETF that includes it, which spreads the position across many companies. Or build it into a focused thematic basket, so FRME sits alongside other stocks that express the same thesis.
Walnut takes the basket route. Describe a thesis where FRME fits (for example “AI infrastructure” or “dividend-growth large-caps”) and the AI proposes 5 to 6 constituents with target weights. You review the plan and fund it through your own broker when you're ready.
The bottom line on First Merchants Corporation (FRME)
FRME is a scaled Indiana-anchored Midwest community bank growing through steady lending and acquisitions, trading at a low-double-digit earnings multiple with an above-average dividend yield.
More on First Merchants Corporation (FRME)
Whether FRME is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, what would have to go right, and the risks in is FRME a buy?, and where the stock could go from here in the FRME stock forecast.
For income investors, whether FRME pays a dividend and how the payout looks is covered in does FRME pay a dividend?
Build a basket around FRME with Walnut
Use First Merchants Corporation as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What does First Merchants Corporation do?
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First Merchants is a bank holding company based in Muncie, Indiana, operating through First Merchants Bank. It provides commercial and consumer lending, deposits, wealth management, and related services across roughly 125 locations in Indiana, Ohio, Michigan, and Illinois, earning money from loan interest and fees.
Is FRME a large or small bank?
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First Merchants is a mid-sized regional bank with about $21 billion in total assets after its 2026 First Savings acquisition. That makes it one of the largest banks headquartered in Indiana, though far smaller than national banks like JPMorgan or regional giants like Fifth Third and Huntington.
Why did First Merchants' Q1 2026 profit drop?
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Reported net income fell to about $28 million (diluted EPS near $0.45) because of a roughly $29.8 million loss on mortgage loans reclassified to held-for-sale and about $17 million of costs tied to integrating the First Savings acquisition. Excluding those one-time items, adjusted EPS was about $1.03.
What was the First Savings acquisition?
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First Merchants completed an all-stock purchase of First Savings Financial Group, valued around $241 million, in the first quarter of 2026. It added about $2.4 billion in assets, $1.8 billion in loans, and $1.7 billion in deposits, expanding the branch network toward southern Indiana and Louisville.
Does FRME pay a dividend?
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Yes. First Merchants pays a quarterly cash dividend, raised to about $0.37 per share in 2026, for a yield generally around 3.5 percent, above the broad market. The payout is roughly half of earnings. Walnut is not an investment adviser, so weigh your own goals.
How does First Merchants make most of its money?
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Most profit comes from net interest income, the spread between interest earned on commercial and consumer loans and interest paid on deposits. Its net interest margin was about 3.35 percent in early 2026. Fee income from wealth management, cards, and service charges adds a smaller, more stable revenue stream.
Who competes with First Merchants?
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Indiana and Midwest community banks like Lakeland Financial, Horizon Bancorp, and German American Bancorp, larger regionals such as Old National, Fifth Third, Huntington, and KeyCorp, and national banks and credit unions all compete for the same deposits, loans, and commercial relationships.
What are the main risks of owning FRME?
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As a regional bank, earnings are cyclical and sensitive to credit losses, interest rates, and the Midwest economy, with meaningful commercial-real-estate exposure. Its concentration in Indiana and nearby states limits geographic diversification, and acquisitions add integration and one-time-charge risk, as its early-2026 results showed.
Walnut is informational, not investment advice. Financial figures on this page are approximations; always verify current numbers with First Merchants Corporation's investor relations page or your broker before making investment decisions.