Monitor upcoming quarterly filings for updated Tier 2 capital ratios and any deployment of the ~$98.75M net proceeds. The 6.750% coupon is a fixed cost that will increase interest expense; watch for any impact on net interest margin in future earnings reports.
Price Chart
Executive Summary
First Merchants Corporation issued $100 million aggregate principal amount of 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036, entering into an Indenture and First Supplemental Indenture with U.S. Bank Trust Company as trustee. The notes are subordinated, qualify as Tier 2 regulatory capital, and were issued concurrently with a 424B5 offering closed September 25, 2026. This is a routine capital management transaction — the company raised subordinated debt to bolster its capital position, with net proceeds of approximately $98.75 million after underwriting discount.
Key Financial Metrics
Key Facts
- $100,000,000 aggregate principal amount of 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 issued
- Notes bear interest at 6.750% fixed through September 30, 2031, then float at Three-Month Term SOFR + 202 bps
- Maturity date: October 1, 2036; redeemable at par at issuer's option on or after October 1, 2031
- Net proceeds to issuer: approximately $98,750,000 after 1.25% underwriting discount
- Notes are unsecured, subordinated obligations ranking pari passu with existing subordinated debt and junior to senior debt
- Notes intended to qualify as Tier 2 capital for regulatory purposes; acceleration rights limited (no acceleration for interest/ covenant defaults)
- Indenture and First Supplemental Indenture dated September 25, 2026 with U.S. Bank Trust Company as trustee
- Offering made under effective shelf registration (File No. 333-298983); Piper Sandler sole bookrunner
Financial Impact
$100 million subordinated note issuance; net proceeds ~$98.75 million after 1.25% underwriting discount
Risk Factors
- Higher interest expense from $100M at 6.750% could pressure net interest margin in a stable or declining rate environment
- Subordinated structure means noteholders rank behind senior creditors in liquidation
- No acceleration rights for interest/covenant defaults limits holder remedies
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001193125-26-402604 |
| Document: d154643dex42.htm | 0001193125-26-402604 |
| Document: d154643d8k.htm | 0001193125-26-402604 |
| Document: d154643dex51.htm | 0001193125-26-402604 |
| Document: 0001193125-26-402604-index-headers.html | 0001193125-26-402604 |
| Document: 0001193125-26-402604-index.html | 0001193125-26-402604 |
| Document: 0001193125-26-402604.txt | 0001193125-26-402604 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 21, 2026 5d ago | 8-K | $40.83 $40.68 | ▼ −0.37% | ▲ +0.15% | $41.09 (+0.64%) |
Oct 21, 2026 5d ago | Press Release | $40.83 $40.68 | ▼ −0.37% | ▲ +0.15% | $41.09 (+0.64%) |
Oct 15, 2026 11d ago | 8-K | $39.48 $39.60 | ▲ +0.30% | ▲ +1.41% | $41.09 (+4.08%) |
Oct 15, 2026 11d ago | Press Release | $39.48 $39.60 | ▲ +0.30% | ▲ +1.41% | $41.09 (+4.08%) |
Oct 1, 2026 25d ago | 8-K | $39.58 $40.15 | ▲ +1.44% | ▲ +0.70% | $41.09 (+3.82%) |
Oct 1, 2026 25d ago | Press Release | $39.58 $40.15 | ▲ +1.44% | ▲ +0.70% | $41.09 (+3.82%) |
Sep 30, 2026 26d ago | Press Release | $39.78 | awaiting T+1 | — | $41.09 (+3.29%) |
Sep 25, 2026 4w ago | 8-K | $40.71 $40.37 | ▼ −0.84% | ▼ −0.09% | $41.09 (+0.93%) |
Sep 24, 2026 4w ago | 424B5 | $40.71 $40.37 | ▼ −0.84% | ▼ −0.09% | $41.09 (+0.93%) |
Sep 23, 2026 4w ago | Press Release | $40.49 $40.71 | ▲ +0.56% | ▲ +0.01% | $41.09 (+1.49%) |
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