First Merchants in Muncie, Ind., has agreed to buy First Savings Financial Group in Jeffersonville, Ind.
The $18.6 billion-asset First Merchants said in a press release that it will pay $241.3 million in stock for the $2.4 billion-asset First Savings. The deal, which is expected to close in the first quarter, priced First Savings at 135% of its tangible book value.
First Savings has 16 branches, $1.9 billion of loans, and $1.7 billion of deposits.
The deal should be 11% accretive to First Merchants’ 2027 earnings per share. It should take three years for First Merchants to earn back an estimated 4.8% dilution to its tangible book value.
First Merchants plans to cut 27.5% of First Savings’ annual noninterest expense. The company expects to incur $24.5 million of merger-related expenses.
“We view First Savings Bank as a meaningful addition to our Indiana deposit network,” Mark Hardwick, First Merchants’ CEO, said in the release. “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.”
Larry Myers, First Savings’ president and CEO, is expected to join First Merchants’ board.
Stephens and Dentons advised First Merchants. Piper Sandler and Luse Gorman advised First Savings.