On February 1, 2026 (the "Effective Time"), the Corporation completed the acquisition of First Savings Financial Group, Inc., an Indiana corporation ("First Savings"), pursuant to the Agreement and Plan of Merger, dated September 24, 2025, by and between the Corporation and First Savings (the "Merger Agreement"). Immediately following the Merger, First Savings Bank, a wholly-owned subsidiary of First Savings, merged with and into the Bank, with the Bank surviving the merger and continuing its corporate existence.

First Savings was headquartered in Jeffersonville, Indiana and had 16 banking centers serving the southern Indiana market. The acquisition expanded the Corporation’s presence in southern Indiana and added markets with demographic characteristics consistent with the Corporation’s existing Midwest markets. As of the Effective Time, each share of outstanding First Savings common stock was converted into the right to receive 0.85 of a share (the "Exchange Ratio") of First Merchants common stock, in a tax-free exchange, plus cash-in-lieu of any fractional share created by the Exchange Ratio.

Immediately prior to the Effective Time, each outstanding First Savings restricted stock award held by certain directors, executive officers and employees of First Savings, whether unvested or vested, was exchanged for shares of First Merchants common stock based on the Exchange Ratio according to their respective award agreement terms.

In addition, on the day immediately preceding the Effective Time, each outstanding option to acquire a share of First Savings common stock was cancelled in exchange for the right to receive a cash payment, which was paid by First Savings, equal to (i) $32.59 per share, which is equal to the Exchange Ratio multiplied by the volume-weighted average price of First Merchants common stock over the ten (10) consecutive trading days ending on January 27, 2026, less (ii) the option exercise price per share, and less (iii) any applicable withholding taxes.

The total purchase price of approximately $243.2 million consists primarily of equity consideration issued by the Corporation and is measured at fair value based on the Corporation’s common stock price as of the acquisition date. The purchase price also includes cash paid in lieu of fractional shares. The purchase price represents the fair value of consideration transferred in accordance with Accounting Standards Codification ("ASC") 805.

Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which remain subject to adjustment during the measurement period, the purchase price for the First Savings acquisition is detailed in the following table. If, prior to the end of the one-year measurement period for finalizing the purchase price allocation, information becomes available about facts and circumstances that existed as of the acquisition date, which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively.


	Fair Value
Cash and due from banks	$	29,929
Interest-bearing deposits	24,144
Investment securities	251,341
Loans held for sale	62,537
Loans	1,840,524
Allowance for credit losses - loans	(22,280)
Premises and equipment	23,465
Federal Home Loan Bank stock	23,630
Other real estate owned	856
Interest receivable	11,002
Cash surrender value of life insurance	63,626
Tax asset, deferred and receivable	22,862
Other assets	26,488
Deposits	(1,690,130)
Federal Home Loan Bank advances	(482,729)
Subordinated notes	(28,712)
Interest payable	(5,930)
Other liabilities	(13,766)
Net tangible assets acquired	136,857
Other intangibles	30,180
Goodwill	76,184
Purchase price	$	243,221

Investment securities: The acquisition-date fair values of the First Savings investment securities were primarily based on actual transaction prices from the subsequent sale of the acquired securities, which occurred shortly after legal close. Securities not included in the sale were separately identified and valued using available market information.

Loans and allowance for credit losses - loans: The Corporation early adopted ASU 2025‑08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans, for the First Savings acquisition. Under this guidance, acquired loans were initially recognized using the acquisition‑date gross‑up method. At the acquisition date, the Corporation established an acquisition-date allowance for credit losses of $22.3 million, consisting of $15.2 million related to purchased seasoned loans and $7.1 million related to loans that had experienced more-than-insignificant deterioration in credit quality since origination. The acquisition-date allowance was added to the initial amortized cost basis of the acquired loans rather than recognized as a credit-related fair value discount.

The Corporation also recorded a non-credit fair value discount of $53.1 million on acquired loans. The acquisition-date fair values were determined using a discounted cash flow methodology. Loans with similar characteristics were pooled, and projected contractual cash flows, adjusted for estimated prepayments, were discounted using current market rates for comparable loans, including applicable liquidity and marketability adjustments. The resulting non-credit fair value discount primarily reflected differences between the contractual interest rates on the acquired loans and current market rates for comparable loans as of the acquisition date. The non-credit fair value discount is being accreted into interest income over the estimated lives of the related loans.

For acquired loans that exhibited more‑than‑insignificant deterioration in credit quality since origination, the Corporation identified acquisition‑date expected credit losses, representing the present value of expected credit-related losses over the life of the loans, which were recognized as an allowance for credit losses at acquisition with a corresponding increase to the loans’ amortized cost basis. Subsequent changes in expected credit losses on acquired loans are recognized through the provision for credit losses in accordance with ASC 326. Additional information regarding the acquired loan portfolio and allowance for credit losses is provided in NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES.

Deposits: The fair value of transaction and savings accounts were equal to their carrying values. The fair value of time deposits and brokered certificates of deposit were calculated using a discounted cash flow analysis that calculated the present value of the projected cash flows from the portfolio. The portfolio of time deposits and brokered certificates of deposit were valued at a pre-tax discount of $0.9 million. The discount is being amortized as an increase in interest expense over the remaining life of the time deposits and brokered certificates of deposit.

FHLB advances: The estimated fair values were based on discounted cash flows using current market rates for FHLB advances with similar remaining maturities and contractual terms. The portfolio of FHLB advances were valued at a pre-tax premium of $0.7 million. The premium is being amortized as a decrease in interest expense over the remaining life of the FHLB advances.

Other intangibles: Of the total purchase price, $30.2 million was allocated to identifiable intangible assets. Approximately $29.4 million was allocated to a core deposit intangible, which is being amortized over an estimated useful life of 10 years, and approximately $0.8 million was allocated to a non-compete intangible, which is being amortized over an estimated useful life of one year. The remaining purchase price was allocated to goodwill, which is not deductible for tax purposes. The core deposit intangible valuation employed a discounted cash flow analysis to determine the market value of the acquired core deposits that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds, and the interest costs associated with customer deposits.

Goodwill primarily represents the expected synergies from combining First Savings’ operations with the Corporation’s existing franchise, including anticipated cost savings, revenue enhancement opportunities, and the value of the assembled workforce, none of which qualify for separate recognition under GAAP. Additional factors contributing to goodwill include the expansion of the Corporation’s geographic footprint in southern Indiana and the acquired core customer relationships.

During the three and nine months ended September 30, 2026, the Corporation recorded $0.9 million and $21.7 million, respectively, of integration and transaction‑related expenses. During the three months ended September 30, 2026, these expenses comprised $0.6 million of contract termination and similar charges, $0.2 million of other integration-related expenditures, and $0.1 million of salaries and benefits. During the nine months ended September 30, 2026, these costs consisted primarily of $11.2 million of contract termination and similar charges, $5.9 million of salaries and benefits, and $3.0 million of acquisition-related professional and advisory services. Acquisition‑related professional and advisory services primarily related to investment banking, legal, and valuation services incurred to effect the acquisition. Contract termination and similar charges primarily related to the early termination of vendor and service agreements and core systems and software arrangements as part of post‑acquisition integration activities. Salaries and benefits primarily related to employee retention and severance arrangements associated with post‑acquisition integration activities.

The Corporation's results of operations for the three and nine months ended September 30, 2026 include the operating results of the acquired assets and assumed liabilities of First Savings subsequent to the acquisition on February 1, 2026. Due to the integration of certain processes and the conversion of operational systems during the second quarter of 2026, the Corporation determined that separately identifying the revenue and earnings attributable solely to legacy First Savings subsequent to the acquisition date is impracticable.

The results of operations of First Savings have been included in the Corporation's consolidated financial statements since the acquisition date. The following schedule presents unaudited pro forma results for the nine months ended September 30, 2026 and the year ended December 31, 2025, as if the First Savings acquisition had occurred at the beginning of the periods presented.

The unaudited pro forma financial information includes adjustments for interest income on loans, interest expense on deposits and borrowings, premises expense related to the acquired real estate, amortization of intangible assets arising from the transaction and the related income tax effects.

The pro forma financial information for the nine months ended September 30, 2026 excludes certain non‑recurring charges recognized by First Savings during January 2026, prior to the February 1, 2026 acquisition date. These charges primarily relate to the write‑off of assets and the settlement or extinguishment of liabilities determined to have no continuing economic benefit to the combined company, as well as other transaction‑related items, including change‑in‑control payments, severance costs, legal and investment banking fees, and accelerated equity compensation expense associated with restricted stock awards and stock options.

In addition, the pro forma financial information excludes $21.7 million of non‑recurring integration‑related costs incurred by the Corporation during the nine months ended September 30, 2026 in connection with the acquisition. These costs primarily consist of employee retention bonuses and severance arrangements associated with post‑acquisition integration activities, contract termination charges, core system conversion expenses and transaction advisory services.

The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future operating results.