First Merchants Corporation Depository Shares (FRMEP)

FairStock Score: 57/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach First Merchants as a regional bank holding company. The economics of banking are simple but fragile: earn a spread, manage credit, and protect capital. At the 2026-10-13 close of $25.13, FairStock calculates a P/E of 6.60, P/B of 0.59, ROE of 7.37%, and dividend yield of 7.46%. That is a cheap-looking price for a bank, but cheapness without clarity can be a trap. The filed results show why the market may hesitate: in fiscal Q1 2026 (quarter ended 2026-03-31), net income was $28.2M and diluted EPS $0.45, down from fiscal Q1 2025 net income of $55.3M and diluted EPS $0.94. Full-year fiscal 2025 net income was $226.0M and diluted EPS $3.88, after fiscal 2024 net income of $201.4M and diluted EPS $3.41, and fiscal 2023 net income of $223.8M and diluted EPS $3.73. So earnings have not compounded smoothly. The Lynch category is STALWART - steady 8.7% five-year profit growth - but the latest quarter breaks that pattern. A 0.59 price-to-book and 7.37% ROE suggest the market doubts either asset quality, net interest margin, or capital returns. I cannot assess CET1, net interest margin, or credit costs because the data does not include them. FairStock's Piotroski F-Score of 3/9 and a 57/100 FairStock score reinforce caution. The depositary shares offer a 7.46% yield, but a high yield is not a margin of safety if credit deteriorates. I would want evidence that Q1 weakness is temporary and that book value is real before calling this a bargain.

In plain English: These depositary shares represent an interest in First Merchants, a bank holding company that provides checking, savings, loans, mortgages and wealth services. The bank earns money, but profits have been uneven and the latest quarter was much weaker than a year earlier. At $25.13, the shares look inexpensive compared with the bank's profits and accounting value, though the high income payout suggests investors see risks.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · fiscal Q1 2025 10-Q (period ended 2025-03-31) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer