First Merchants Corporation, holding company of First Merchants Bank, Muncie, and First Savings Financial Group, Inc., parent company of First Savings Bank, Jeffersonville, announced Sept. 25 they had entered into a definitive merger agreement pursuant to which First Savings will merge with and into First Merchants in an all-stock transaction valued at approximately $241.3 million.
First Savings operates 16 banking center locations in southern Indiana with total assets of $2.4 billion, total loans of $1.9 billion and total deposits of $1.7 billion earning a 1.02% return on average assets (annualized) and a 13.7% return on average equity (annualized) for the quarter ended June 30.
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 Sept. 24 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 (the first full year of combined operations) and a tangible book value earnback period of 3.0 years.
“We view First Savings Bank as a meaningful addition to our Indiana deposit network,” said Mark Hardwick, CEO of First Merchants. “Its presence strengthens our southern Indiana growth potential. We are also excited about the opportunities the triple net lease financing, first lien HELOCs and SBA lending verticals will offer by supporting steady, diversified loan growth across economic cycles.”
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 $21.0 billion 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 W. Myers, president & CEO and a director of First Savings, to its Board of Directors in connection with the merger.
“For nearly 90 years, First Savings Bank has combined strong performance for our shareholders with a deep commitment to our community and the development of innovative business lines,” Myers said. “By joining with First Merchants, we are ensuring that these values endure while opening the door to exciting new opportunities for customers, employees and investors.”
