N/E/W/S  R/E/L/E/A/S/E

September 3, 2008
                                Filed by First Merchants Corporation pursuant to
                                Rule 425 under the Securities Act of 1933
                                Subject Company: First Merchants Corporation
                                Corporation Commission File No.: 0-17071


For immediate release

For further information, contact:
Mark Hardwick, Executive VP and Chief Financial Officer
First Merchants Corporation                                        765-751-1857

Jerry R. Engle, President and CEO
Lincoln Bancorp                                                    317-839-6539

First Merchants  Corporation  Announces the Signing of a Definitive Agreement to
Acquire Lincoln Bancorp

(Muncie,  Ind.  and  Plainfield,   Ind.,  September  3,  2008)  First  Merchants
Corporation  (NASDAQ:  FRME) and Lincoln Bancorp (NASDAQ:  LNCB) today announced
they have executed a definitive  agreement for First  Merchants  Corporation  to
acquire Lincoln Bancorp through a merger of Lincoln into First Merchants.

First  Merchants  ($3.8  billion) and Lincoln ($890  million) will have combined
assets of $4.7 billion and create the largest financial holding company based in
Central Indiana.  The combined  company will have eighty-two  banking offices in
twenty-three  Indiana and three Ohio counties, a trust company with assets under
management in excess of $1.7 billion, and a multi-line insurance agency.

Mike Rechin,  President and Chief Executive  Officer of First  Merchants,  said,
"Lincoln  Bancorp has a long  history of  deep-rooted  commitment  to  community
banking,  and will become the newest member of the First Merchants  family. As a
company that has been in business  since 1884,  its success has been tied to the
high  value it places  on  relationships  with its  customers  and  communities.
Lincoln's  franchise  fits well with First  Merchants'  strategic  direction and
specifically  its presence in Johnson and Hendricks  counties,  two of Indiana's
fastest growing markets.  With convenience as an intended benefit,  customers in
the Indianapolis  market area may now enjoy access to 30 First Merchants Banking
Centers.  The partnership  between Lincoln and First Merchants  provides Indiana
business  owners  and  consumers  with the  opportunity  to bank with an Indiana
company."

"Our expectation is that this  combination will be mutually  beneficial to First
Merchants and Lincoln  shareholders.  We anticipate  modest dilution to Earnings
Per  Share in 2009,  with  accretive  EPS  growth  in 2010 and  beyond,  through
identified transaction synergies," Rechin stated.
<page>
"First Merchants shares our deep commitment to community  banking.  Our combined
strength will provide the opportunity to offer enhanced products and services to
our customers," stated Jerry R. Engle,  President and Chief Executive Officer of
Lincoln Bancorp.

The merger agreement  provides that  shareholders of Lincoln will have the right
to elect to receive  cash in the  approximate  amount of $15.76  per  share,  or
0.7004 shares of First  Merchants  common stock for each share of Lincoln common
stock owned by them,  subject to proration as a result of a maximum limit on the
aggregate  number of shares  issued  or cash paid to all  Lincoln  shareholders.
Based on First Merchants' September 2, 2008 closing price, the transaction value
is estimated  between $74 million and $77 million  depending on the elections of
shareholders.

The  transaction  is expected  to be  completed  in the fourth  quarter of 2008,
subject to the affirmative vote of Lincoln  shareholders,  regulatory approvals,
and other customary conditions.

The  corporation  further  announced  that Michael J. Stewart,  First  Merchants
Corporation's  Chief Banking Officer,  will also serve as President of the newly
consolidated First Merchants Bank of Central Indiana. Mike Baker and Jerry Engle
will serve as regional  presidents,  with continued  commitment to strengthening
their local market impact.

Sandler O'Neill & Partners,  L.P. served as financial advisor to Lincoln Bancorp
and  rendered a fairness  opinion to the  company's  board of  directors in this
transaction.  Lincoln  Bancorp's  legal  advisor was Bose  McKinney & Evans LLP.
First Merchants Corporation's legal advisor was Bingham McHale LLP.

First Merchants  Corporation is a financial  services holding company focused on
building deep lifelong client  relationships and providing  maximum  shareholder
value.

First Merchants  Corporation  operates four bank subsidiaries  including,  First
Merchants Bank, First Merchants Bank of Central Indiana,  Lafayette Bank & Trust
Company,  and Commerce  National Bank in Columbus,  Ohio.  First Merchants Trust
Company unites the trust and asset  management  services of all affiliate  banks
and is one of Indiana's  largest trust companies.  The Corporation also includes
First  Merchants  Insurance  Services  and is  majority  owner of Indiana  Title
Insurance Company.

Lincoln Bancorp and Lincoln Bank are  headquartered in Plainfield,  Indiana with
additional offices in Avon, Bargersville, Brownsburg, Crawfordsville, Frankfort,
Franklin, Greenwood, Mooresville, Morgantown, Nashville and Trafalgar.  The Bank
also has 2 loan production offices located in Carmel and Greenwood, Indiana.
<page>
Forward-Looking Statements

This  document  contains   forward-looking   statements  about  First  Merchants
Corporation,  Lincoln Bancorp,  the combined  company,  and the proposed merger,
which are within  the safe  harbor  provisions  for  forward-looking  statements
contained  in the  Private  Securities  Litigation  Reform  Act of  1995.  These
forward-looking  statements  include  statements  with  respect to the  expected
timing,  completion  and  effects  of the  proposed  merger  and  the  financial
condition,  results of operations,  plans,  objectives,  future  performance and
business  of  First  Merchants,  Lincoln  and the  combined  company,  including
statements  preceded  by,  followed  by or that  include  the words  "believes,"
"expects,"   "anticipates"  or  similar   expressions.   These   forward-looking
statements  involve  certain  risks  and  uncertainties.  There  are a number of
important  factors  which could  cause First  Merchants'  and  Lincoln's  actual
results  or the  circumstances  and  timing  of the  proposed  merger  to differ
materially  from those  anticipated  by the  forward-looking  statements.  These
factors  include,  but are not  limited  to:  (1)  competitive  pressures  among
depository  institutions increasing  significantly;  (2) changes in the interest
rate environment reducing interest margins;  (3) prepayment activity,  loan sale
volumes,  charge-offs and loan loss provisions; (4) general economic conditions,
either  nationally  or in the states in which  First  Merchants  and  Lincoln do
business,  become less favorable than expected;  (5) expected synergies and cost
savings  are not  achieved  or  achieved  at a slower  pace than  expected;  (6)
integration  problems or delays;  (7)  legislative  or regulatory  changes which
adversely  affect the  businesses  in which  First  Merchants  and  Lincoln  are
engaged;  (8) changes in the  securities  markets;  (9) the  economic  impact of
terrorist  attacks and similar or related  events;  (10)  receipt of  regulatory
approvals without  unexpected delays or conditions;  (11) retention of customers
and critical  employees;  (12) unanticipated  changes in laws,  regulations,  or
other  industry  standards;  and (13)  those  risk  factors  described  in First
Merchants' and Lincoln's Annual Reports on Form 10-K for the year ended December
31, 2007.

                                      * * *

First  Merchants will be filing a Registration  Statement on Form S-4 concerning
the merger with the  Securities  and  Exchange  Commission  ("SEC"),  which will
include the proxy  statement that will be mailed to Lincoln's  shareholders.  WE
URGE  INVESTORS  TO  READ  THESE  DOCUMENTS   BECAUSE  THEY  CONTAIN   IMPORTANT
INFORMATION. Investors will be able to obtain the documents free of charge, when
filed, at the SEC's website,  www.sec.gov. In addition, documents filed with the
SEC by First  Merchants  will be available  free of charge from the Secretary of
First  Merchants at 200 E. Jackson  Street,  Muncie,  IN 47305,  telephone (765)
747-1500.  Documents  filed with the SEC by Lincoln  will be  available  free of
charge from the Secretary of Lincoln at 905  Southfield  Drive,  Plainfield,  IN
46168,  telephone  (317)  839-6539.  INVESTORS  SHOULD READ THE PROXY  STATEMENT
CAREFULLY BEFORE MAKING A DECISION  CONCERNING THE MERGER.  Copies of all recent
proxy  statements  and annual reports are also available free of charge from the
respective companies by contacting the company secretary.

First  Merchants  and  Lincoln  and their  respective  directors  and  executive
officers  may be deemed to be  participants  in the  solicitation  of proxies to
approve the Merger.  Information  about the participants may be obtained through
the SEC's  website from the  definitive  proxy  statement  filed with the SEC on
March 19,  2008,  with  respect  to First  Merchants  and the  definitive  proxy
statement filed with the SEC on March 13, 2008, with respect to Lincoln.