First Merchants and First Savings to Combine in $241.3 Million All-Stock Deal
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 25 2025
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Merger Agreement: First Merchants Corporation and First Savings Financial Group have entered into a definitive merger agreement, with First Savings merging into First Merchants in an all-stock transaction valued at approximately $241.3 million.
Financial Details: First Savings has total assets of $2.4 billion and will provide its shareholders with 0.85 shares of First Merchants common stock for each share they own, with an implied value of $33.60 per share based on recent stock prices.
Future Projections: The merger is expected to result in an 11% earnings per share accretion for First Merchants by 2027, with a tangible book value earnback period of 3.0 years, and is anticipated to close in the first quarter of 2026.
Combined Operations: Post-merger, the combined entity will operate as First Merchants Bank with approximately $21 billion in assets and 127 branches across Indiana, Michigan, and Ohio, with plans for system integration by the second quarter of 2026.
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Analyst Views on FRME
Wall Street analysts forecast FRME stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FRME is 48.00 USD with a low forecast of 46.00 USD and a high forecast of 50.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 38.920
Low
46.00
Averages
48.00
High
50.00
Current: 38.920
Low
46.00
Averages
48.00
High
50.00
About FRME
First Merchants Corporation is a financial holding company. The Company has one full-service bank charter, First Merchants Bank (the Bank). The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank). Through the Bank, the Company offers a broad range of commercial and consumer banking services to meet the diverse needs of its customers. Its commercial banking team offers a full spectrum of debt capital, treasury management services and depository products. The consumer banking group offers a variety of consumer deposit and lending products. The mortgage banking team offers consumer mortgage solutions to assist with the purchase, refinance, construction or renovation of residential properties. Private Wealth Advisors offers personal wealth management services with expertise in investment management, private banking, fiduciary estate and financial planning. The Bank includes about 110 banking locations in Indiana, Ohio, and Michigan.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
First Merchants Corporation Q4 2025 Earnings Call Highlights
- Asset and Income Innovation: First Merchants Corporation reported a net income of $56.6 million and earnings per share of $0.99 in Q4 2025, with an annual return on assets of 1.21%, demonstrating sustained growth in asset management and profitability, further solidifying its market position.
- Loan and Deposit Growth: The company reported a loan growth of $197 million for the quarter, achieving a 7.3% annual growth rate, while deposits increased by $424.9 million, with an annualized growth rate of 11.4%, indicating strong performance in the credit market and enhanced customer trust.
- M&A Integration Confidence: CEO Mark Hardwick confirmed the imminent closing of the First Savings Group acquisition, expected to add approximately $2.4 billion in assets and enhance the company's market share in Southern Indiana and the Louisville area, reflecting confidence in future growth.
- Expense and Revenue Outlook: CFO Kawiecki projected a 3% to 5% increase in noninterest expenses for 2026 while planning for a 10% growth in noninterest income, indicating a strategic focus on cost control while actively seeking revenue diversification.
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First Merchants Reports Decline in Q4 Earnings
- Earnings Decline: First Merchants Corporation reported a net income of $56.60 million for Q4, translating to an EPS of $0.99, which is a decrease from $63.88 million and $1.10 per share last year, indicating a weakening in profitability.
- Adjusted Earnings: Excluding items, adjusted earnings stood at $56.43 million or $0.98 per share, suggesting ongoing pressure on the company's core business performance, which may impact investor confidence.
- Revenue Growth: Despite the earnings decline, the company achieved a 3.5% year-over-year revenue increase to $139.06 million, up from $134.37 million last year, indicating potential for sales growth.
- Market Reaction: The earnings drop may raise concerns in the market regarding First Merchants' future performance, especially amid increasing economic uncertainty, prompting investors to reassess their strategies.
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