Core Insights - First Merchants Corp. has agreed to acquire First Savings Financial Group for $241 million in stock, expanding its presence into the Louisville, Kentucky banking market [1][10] - The acquisition is strategically significant as it enhances First Merchants' southern Indiana growth potential and adds exposure to specialty lending verticals [2][5] Company Overview - First Merchants is the second-largest Indiana-based bank with assets of $18.6 billion, while First Savings has assets of $2.4 billion [3][4] - The deal will create a combined institution with $21 billion in assets, 127 branches, $15.3 billion in loans, and $16.6 billion in deposits [10] Strategic Rationale - The acquisition allows First Merchants to enter the competitive Louisville market, where it previously had no presence, and capitalize on commercial lending opportunities [5][9] - First Savings holds a 3% share of Louisville's $45 billion deposit market, with a significant number of branches located in the metropolitan area [5] Financial Implications - The deal is expected to result in 11% earnings accretion for First Merchants in the last nine months of 2026, along with cost savings equal to 27.5% of First Savings' operating expense base [10][11] - First Savings has shown a recovery in its SBA lending, with $111 million in 7(a) loans closed in the current fiscal year, compared to just under $8 million for First Merchants [6][7] Market Reaction - Investor reaction to the acquisition news was mixed, with First Merchants' shares trading down approximately 1.3% following the announcement [11]