First MerchantsFRME +1.96%60 ROE % is 4.38% as of Mar. 2026, which is 56% below its 10-year median of 9.89. 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 1,524 Banks companies, First Merchants ranks worse than 64.63% on this metric.
The historical rank and industry rank for First Merchants's ROE % or its related term are showing as below:
FRME'
s ROE % Range Over the Past 10 Years
Min: 8.12 Med: 9.89 Max: 11.74
Current: 8.13
During the past 13 years, First Merchants's highest ROE % was 11.74%. The lowest was 8.12%. And the median was 9.89%.
FRME's ROE % is ranked worse than 64.63% of 1524
companies
in the Banks industry
Industry Median: 10.22
vs FRME: 8.13
First Merchants (NAS:FRME) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
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. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
First Merchants ROE % Related Terms
First Merchants ROE % Historical Data
* Premium members only.
The historical data trend for First Merchants's ROE % 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 ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Banks Industry
For the Banks industry and Financial Services sector, First Merchants's ROE % distribution charts can be found below:
* The bar in red indicates where First Merchants's ROE % 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 ROE %, the net income of the last fiscal year and the average total shareholder equity 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.
ROE % is displayed in the 30-year financial page.
First Merchants (FRME) has a ROE % of 4.38% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on First Merchants and its competitors. This is 56% below median its historical median of 9.89. Over the past decade, First Merchants' ROE % has ranged from 8.12 to 11.74. According to the industry distribution chart, First Merchants ranks #985 out of 1524 companies in the Banks industry, placing it in the top 64.6%.
Is First Merchants' ROE % too high?
First Merchants' current ROE % of 4.38% is 56% below median its 10-year median of 9.89. Over the past 10 years, this metric has ranged from a low of 8.12 to a high of 11.74. The Banks industry median ROE % is 10.22. First Merchants' value of 4.38% is 57.1% below this industry median. Based on the distribution chart, First Merchants ranks #985 out of 1524 companies in the Banks industry, which is below 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' ROE % compare to CUBI and TRMK?
According to the Banks industry distribution chart, First Merchants ranks #985 out of 1524 companies for ROE %. This places First Merchants in the lower half of its industry. The industry median ROE % is 10.22. First Merchants' value of 4.38% is 57.1% below this benchmark. Historically, First Merchants' own ROE % has ranged from 8.12 to 11.74 over the past decade. While the company's 10-year median is 9.89 vs. the industry median of 10.22, 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 ROE % for a Banks company?
The median ROE % among Banks companies is 10.22, based on 1,524 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. First Merchants's current ROE % of 4.38% is 57.1% 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on First Merchants and its competitors. For the Banks industry, the median ROE % is 10.22 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. First Merchants's current ROE % is 4.38%, which is 56% below median its own 10-year median of 9.89. 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 $42.73 — trading 7.4% above its estimated fair value. The current ROE % is 4.38%, which is 56% below median its 10-year median of 9.89 and 57.1% below the Banks industry median of 10.22. 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 ROE % calculated?
ROE % is calculated from a company's financial statements. For First Merchants (FRME), the current ROE % is 4.38% 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 $42.73 is trading 7.4% above its estimated GF Value™ of $39.78.
GuruFocus considers First Merchants to be Fairly Valued.
Key valuation signals for FRME:
ROE %: 4.38% (56% below median its 10-year median of 9.89)
GF Value™: $39.78 vs. price of $42.73 (7.4% above fair value)
Industry Position: 57.1% below the Banks median (#985 of 1524)
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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