How does this dividend payout compare to those of peer regional banks and financial institutions?

First Merchants’ $0.36 cash dividend (paid Sept 19) translates to a $0.72 annualized payout if the company continues its current quarterly rhythm. At FRME’s current share price (≈ $55‑$58) this works out to an FY 2025 dividend yield of roughly 1.2 %–1.4 %, well below the 2 %–3 % yields posted by most peer regional banks such as Regions (RVLV, ≈ $0.31 per share quarterly, ~2.5 % yield), Fifth Third (FITB, $0.40 quarterly, ~2.8 % yield) and PNC (PNC, $0.31 quarterly, ~2.3 % yield). In absolute per‑share terms FRME’s payout sits near the median of the peer set—its $0.36 is only a few cents higher than the $0.30‑$0.35 range typical for mid‑size community banks—but the lower stock price drags the overall yield down relative to the sector.

From a trading perspective the modest yield suggests the dividend is more of a stabilising signal than a primary income driver. The payout ratio remains comfortably below 50 % of earnings, indicating ample cash‑flow headroom and reducing the risk of a cut in a tightening credit environment. Investors seeking yield may still favor higher‑yielding peers, but FRME’s dividend could act as a floor for price support in a sideways or mildly bullish market. A practical play would be to buy on pull‑backs toward the $52‑$53 support zone, targeting the $58‑$60 resistance where the dividend‑adjusted total return begins to look more attractive versus peers, while keeping an eye on quarterly earnings guidance and any sector‑wide pressure on loan‑loss provisions.