First Merchants’ $2B Pledge: A New Standard for Midwest Community Banking

MUNCIE, IN – June 25, 2026 – First Merchants Bank, in a landmark move solidifying its role as a key community anchor, has announced a new $2.02 billion Community Benefits Agreement (CBA) in partnership with the National Community Reinvestment Coalition (NCRC). The five-year pact, running from 2026 through 2030, is designed to inject transformative capital into low- to moderate-income (LMI) and rural communities across Indiana, Michigan, and Ohio. This isn't just another corporate check-writing exercise; it's the latest evolution in a decade-spanning collaboration that is setting a new standard for how regional banks can drive sustainable economic prosperity.

This agreement represents a significant financial escalation, but more importantly, it signals a deepening of a strategy that intertwines the bank's growth with the financial health of the communities it serves. The commitment follows the bank's recent acquisition of First Savings Financial Group and builds on a foundation of prior agreements, demonstrating a consistent, proactive approach to community reinvestment that goes far beyond regulatory compliance.

An Evolving Blueprint for Reinvestment

The roots of this $2.02 billion agreement trace back to 2019, when First Merchants and the NCRC first forged their partnership. This led to an initial $1.4 billion CBA announced in June 2020. As the bank grew, so did its commitment. Following the acquisition of Level One Bank, the agreement was expanded to $1.97 billion in 2022. This history illustrates a core principle at work: as First Merchants expands its footprint and asset base—now approximately $21 billion—it proportionally scales its community investment, creating a powerful feedback loop between corporate success and public good.

“First Merchants Bank has been one of our most committed and proactive partners since the very beginning of our relationship,” said Jesse Van Tol, President and CEO of NCRC. “First Merchants sets the standard for what community-centered banking can look like and continues to demonstrate that genuine community reinvestment is not a compliance exercise — it is a core part of who they are.”

This sentiment is echoed within the bank’s leadership. “This agreement reflects our unwavering commitment to listen first and act with purpose,” said Mark Hardwick, Chief Executive Officer of First Merchants. His statement points to a corporate culture that views these large-scale investments not as obligations, but as strategic imperatives for fostering the long-term vitality of its regional markets.

Powering Local Economies with Targeted Capital

Deconstructing the $2.02 billion figure reveals a meticulously planned allocation strategy aimed at addressing the Midwest's most pressing economic challenges. The funds are earmarked for maximum impact across several key sectors:

• $650 million in mortgage lending for LMI borrowers and communities. This directly confronts the affordable housing crisis, building on the bank's proven track record. In 2022 alone, First Merchants provided approximately $150 million in loans that helped create over 2,300 affordable housing units and assisted nearly 900 LMI borrowers in achieving homeownership, many through its specialized “Next Horizon” loan program.

• $464 million in small business lending in LMI and rural communities. This allocation is designed to fuel the primary engine of local economies. Critically, the bank has committed to a 10% increase in lending to businesses with less than $1 million in revenue, ensuring capital reaches the smallest enterprises that often face the highest barriers to funding.

• $900 million in community development. This is broken down into $700 million for lending and $200 million for direct investments. This capital will support a wide range of initiatives, from large-scale affordable housing projects to funding for Community Development Financial Institutions (CDFIs) and organizations that provide fair alternatives to predatory payday lending.

• $6 million in philanthropy. While the smallest portion, this direct grantmaking provides flexible and critical support for the nonprofit partners on the front lines of community service.

“Strategic investments in housing stability, financial capability, and community development create lasting change and expand opportunities for those who need them most,” said Lakesha Hancock, Executive Director of Foundation for Pops, one of the NCRC member organizations that signed on to the plan. Her perspective underscores the tangible outcomes expected from these financial commitments.

The Architecture of Accountability

A commitment of this magnitude is only as good as the mechanisms that ensure its promises are kept. What distinguishes this CBA is its collaborative architecture, built on a foundation of community input and transparent oversight. The agreement was not drafted in a boardroom vacuum; it was shaped through extensive listening sessions with NCRC and its member organizations across the bank's markets.

“NCRC and its members value partnerships that lead to meaningful, measurable impact,” said Michele Perez, Chief of Community Engagement and Institutional Accountability at NCRC. “This agreement demonstrates how thoughtful collaboration can direct critical resources to strengthen neighborhoods, increase homeownership opportunities and support long-term economic growth.”

To ensure follow-through, the agreement will be monitored by an advisory board composed of community leaders. This governance structure, a continuation from the previous CBA, provides a formal channel for accountability and strategic guidance, ensuring the bank’s efforts remain aligned with evolving community needs throughout the five-year term. This model of co-creation and shared oversight represents a significant evolution from the traditional, often adversarial, relationship between banks and community advocates.

Setting a Regional Precedent

While First Merchants is not the largest bank to sign a multi-billion-dollar CBA—NCRC has facilitated agreements with giants like US Bank and PNC totaling over $600 billion since 2016—the scale of its commitment relative to its asset size is significant. It positions the Muncie-based institution as a leader among regional banks, demonstrating that impactful community reinvestment is a viable and sustainable strategy, not just the domain of national money-center banks.

The bank’s strong financial footing, including a recently announced $100 million share repurchase program and a forecast for significant earnings growth, suggests that these community investments are being made from a position of strength. This is not philanthropy at the expense of shareholder value; it is a long-term strategy predicated on the belief that the bank can only prosper if its communities prosper too.

As the financial landscape continues to evolve, this partnership between First Merchants and NCRC offers a compelling blueprint for the future of responsible banking. It is a model where growth and social impact are not competing interests, but two sides of the same coin. “As we look ahead, this agreement provides a clear roadmap for how we will continue to invest in the success of our communities,” said Scott McKee, the bank’s Chief Corporate Social Responsibility Officer. “Together with our partners, we are committed to creating opportunities that empower individuals, strengthen businesses and build vibrant communities.”