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

                          [Lincoln Bancorp Letterhead]

September 8, 2008

Dear Shareholder:

In case you missed our recent press release  regarding  our pending  merger with
First Merchants  Corporation,  we wanted to provide some information directly to
you. We are very  excited  about this  strategic  decision  and believe it holds
benefits for you, our shareholders,  as well as our employees and our customers.
In exchange for your Lincoln  common  shares,  you will have the  opportunity to
choose either 0.7004  shares of First  Merchants  common stock or $15.76 in cash
for each Lincoln common share you own. However, no more than 3,576,417 shares of
First  Merchants'  common stock and no more than $16,800,000 in cash may be paid
to all Lincoln  shareholders in the merger,  and there may be  re-allocations of
cash and stock to certain Lincoln  shareholders if either threshold is exceeded.
Your election will likely be made in the fourth quarter of 2008 at approximately
the same time we seek approval of the merger by Lincoln's shareholders,.

First  Merchants is a multi-bank  financial  holding  company  headquartered  in
Muncie,  Indiana.  First  Merchants has $3.8 billion in assets,  including  four
independently-managed  affiliate banks, a trust company and insurance  brokerage
companies.  First  Merchants  Corporation  common  stock is listed on the NASDAQ
Global  Select  Market  under the symbol  "FRME."  The press  release  about the
proposed merger can be accessed from our website, lincolnbankonline.com.

Because of the  significance of this  transaction,  we can only provide detailed
written  information about the merger through documents that will be reviewed by
the Securities and Exchange  Commission prior to mailing to you. These documents
will likely be mailed to shareholders in the fourth quarter of this year.

First  Merchants  will be filing a document  with the SEC called a  Registration
Statement   concerning   the  merger,   which  will  include  the  merger  proxy
statement/prospectus  that  will be  mailed  to you.  WE URGE YOU TO READ  THESE
DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. You 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 East  Jackson  Street,
Muncie, Indiana 47305-2814,  telephone (765) 747-1522.  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. YOU SHOULD
READ THE MERGER PROXY  STATEMENT/PROSPECTUS  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.

Lincoln  and  First  Merchants  and their  respective  directors  and  executive
officers  may be deemed to be  participants  in the  solicitation  of proxies to
approve the merger.  INFORMATION  ABOUT SUCH PERSONS 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.

Please call us at 317-839-6539 if you have any questions or concerns.

Sincerely,
/s/ Jerry R. Engle
Jerry R. Engle
President and CEO