First MerchantsFRME +1.65%60 ROA % is 0.56% as of Mar. 2026, which is 54% below its 10-year median of 1.22. GuruFocus rates FRME with a GF Score™ of 60/100 and a GF Value™ of $39.78 (Fairly Valued). The stock has 5 warning signs investors should review. Among 1,529 Banks companies, First Merchants ranks better than 54.41% on this metric.
ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. First Merchants's annualizedNet Income for the quarter that ended in Mar. 2026 was $112.6 Mil.
First Merchants's average Total Assets over the quarter that ended in Mar. 2026 was $20,048.8 Mil. Therefore, First Merchants's annualized ROA % for the quarter that ended in Mar. 2026 was 0.56%.
The historical rank and industry rank for First Merchants's ROA % or its related term are showing as below:
FRME'
s ROA % Range Over the Past 10 Years
Min: 1.04 Med: 1.22 Max: 1.65
Current: 1.04
During the past 13 years, First Merchants's highest ROA % was 1.65%. The lowest was 1.04%. And the median was 1.22%.
FRME's ROA % is ranked better than 54.41% of 1529
companies
in the Banks industry
Industry Median: 0.98
vs FRME: 1.04
First Merchants (NAS:FRME) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
First Merchants ROA % Related Terms
First Merchants ROA % Historical Data
* Premium members only.
The historical data trend for First Merchants's ROA % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Banks - Regional subindustry, First Merchants's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
First Merchants ROA % vs Banks Industry
For the Banks industry and Financial Services sector, First Merchants's ROA % distribution charts can be found below:
* The bar in red indicates where First Merchants's ROA % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Mar. 2026) net income data.
ROA % is displayed in the 30-year financial page.
First Merchants (FRME) has a ROA % of 0.56% as of Mar. 2026. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on First Merchants and its competitors. This is 54% below median its historical median of 1.22. Over the past decade, First Merchants' ROA % has ranged from 1.04 to 1.65. According to the industry distribution chart, First Merchants ranks #697 out of 1529 companies in the Banks industry, placing it in the top 45.6%.
Is First Merchants' ROA % too high?
First Merchants' current ROA % of 0.56% is 54% below median its 10-year median of 1.22. Over the past 10 years, this metric has ranged from a low of 1.04 to a high of 1.65. The Banks industry median ROA % is 0.98. First Merchants' value of 0.56% is 42.9% below this industry median. Based on the distribution chart, First Merchants ranks #697 out of 1529 companies in the Banks industry, which is above the industry midpoint. Overall, First Merchants has a GF Score™ of 60/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does First Merchants' ROA % compare to CUBI and TRMK?
According to the Banks industry distribution chart, First Merchants ranks #697 out of 1529 companies for ROA %. This puts First Merchants in the upper half of its industry. The industry median ROA % is 0.98. First Merchants' value of 0.56% is 42.9% below this benchmark. Historically, First Merchants' own ROA % has ranged from 1.04 to 1.65 over the past decade. While the company's 10-year median is 1.22 vs. the industry median of 0.98, First Merchants has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for a Banks company?
The median ROA % among Banks companies is 0.98, based on 1,529 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. First Merchants's current ROA % of 0.56% is 42.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on First Merchants and its competitors. For the Banks industry, the median ROA % is 0.98 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. First Merchants's current ROA % is 0.56%, which is 54% below median its own 10-year median of 1.22. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is First Merchants stock overvalued right now?
Based on GuruFocus' analysis, First Merchants (FRME) is currently considered Fairly Valued. The stock's GF Value™ is $39.78, compared to a current price of $42.60 — trading 7.1% above its estimated fair value. The current ROA % is 0.56%, which is 54% below median its 10-year median of 1.22 and 42.9% below the Banks industry median of 0.98. First Merchants' overall GF Score™ is 60/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For First Merchants (FRME), the current ROA % is 0.56% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is First Merchants (FRME) Overvalued in 2026?
Based on GuruFocus' analysis, First Merchants stock appears to be overvalued.
The current stock price of $42.60 is trading 7.1% above its estimated GF Value™ of $39.78.
GuruFocus considers First Merchants to be Fairly Valued.
Key valuation signals for FRME:
ROA %: 0.56% (54% below median its 10-year median of 1.22)
GF Value™: $39.78 vs. price of $42.60 (7.1% above fair value)
Industry Position: 42.9% below the Banks median (#697 of 1529)
No single metric tells the full story. See the FRME stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
First Merchants Corp, through its subsidiaries, provides its customers with financial services delivered locally by bankers. It offers personal banking, business banking, real estate mortgage lending, cash management services, brokerage, wealth management, and insurance. The company reports in only one segment, which is community banking.
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