First Merchants, First Savings to merge in $241.3M all-stock transaction

First Merchants Corporation (FRME) and First Savings Financial Group (FSFG) entered into a definitive merger agreement pursuant to which First Savings will merge with and into First Merchants in an all-stock transaction currently valued at approximately $241.3M. Immediately following the merger, First Savings Bank will merge with and into First Merchants Bank. Headquartered in Jeffersonville, Indiana, First Savings operates 16 banking center locations in southern Indiana. First Savings has total assets of $2.4B, total loans of $1.9B, and total deposits of $1.7B earning a 1.02% return on average assets and a 13.7% return on average equity for the quarter ended June 30, 2025. The merger agreement provides that the common shareholders of First Savings will have the right to receive 0.85 of a share of First Merchants common stock, in a tax-free exchange, for each share of First Savings common stock owned. Based on the closing price of First Merchants common stock on September 24, 2025 of $39.53 per share, the implied merger consideration for each share of First Savings common stock is $33.60 per share. First Merchants anticipates earnings per share accretion of approximately 11% in 2027 and a tangible book value earnback period of 3.0 years. The transaction is expected to close in the first quarter of 2026, subject to First Savings’ shareholder approval, regulatory approvals, and other customary conditions. First Merchants’ shareholder approval is not required. The combined company, conducting its banking business as First Merchants Bank, expects to complete its system integration during the second quarter of 2026. First Merchants and First Savings will have combined assets of approximately $21B and First Merchants will remain the second largest financial holding company headquartered in Indiana. The combined company will have 127 branches across Indiana, Michigan, and Ohio. First Merchants expects to appoint Larry Myers, President and CEO and a Director of First Savings, to its Board of Directors in connection with the merger.