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


The  following is the text of a joint press  release  issued by First  Merchants
Corporation and Lafayette Bancorporation on October 15, 2001.


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


October 15, 2001


FOR IMMEDIATE RELEASE

LAFAYETTE BANCORPORATION AND FIRST MERCHANTS CORPORATION AGREE TO MERGE

Robert  J.  Weeder,   President  and  Chief   Executive   Officer  of  Lafayette
Bancorporation ("Lafayette"),  Lafayette, Indiana, and Michael L. Cox, President
and Chief Executive Officer of First Merchants  Corporation ("First Merchants"),
Muncie, Indiana, today jointly announced the execution of a Definitive Agreement
to merge their two companies.

The merger will be  accomplished  through  the  exchange of 1.11 shares of First
Merchants common stock (valued at $26.01 based on First  Merchants'  October 12,
2001  closing  price of  $23.43  per  share),  or $30.00 in cash for each of the
outstanding  shares of Lafayette.  However,  no more than $50,329,248  aggregate
cash may be paid in the merger and there may be  allocations of stock to certain
shareholders  if this  threshold  is exceeded.  At current  market  prices,  the
transaction will have an approximate  value of $115.8 million.  This transaction
will be a tax-free stock exchange for Lafayette  shareholders.  The transaction,
which is subject to  shareholder  and  regulatory  approval,  is  expected to be
completed in early 2002.

First  Merchants  ($1.9 billion) and Lafayette ($750 million) will have combined
assets of $2.7 billion and create the 4th largest banking company  headquartered
in Indiana. It will have sixty-six banking offices in nineteen Indiana counties.
Additionally,  the combined  company will have two trust  departments  with $1.8
billion in assets under management for clients. First Merchants is characterized
by  its  multi-charter   structure   comprising  eight  separate  banks  managed
independently by local CEOs and boards of directors.

Upon the completion of the merger,  Lafayette Bank & Trust Company,  Lafayette's
subsidiary,  will continue to operate as the largest community banking entity in
the greater  Lafayette area.  Robert Weeder will continue as its Chief Executive
Officer and its nine-member Board of Directors will remain intact. Additionally,
Mr.  Weeder will be named a Senior Vice  President  of First  Merchants  and two
directors  from Lafayette  will be elected to the Board of First  Merchants.  In
commenting on the transaction,  Mr. Weeder stated that,  "First Merchants shares
our deep commitment to community banking, and has compiled an enviable record of
earnings  growth  spanning 25 years.  Our  combined  strength  will  provide the
opportunity to further expand our growth initiatives  throughout Indiana. We are
extremely  pleased to announce this  transaction for our  shareholders  who will
have the opportunity to take cash or stock in First Merchants."

Mr. Cox said,  "Lafayette Bank & Trust Company is the largest  community banking
organization  in its attractive  growth market area. They have a long history of
excellent  operating  performance  and  truly  exemplify  the best in  community
banking. We have known Bob Weeder and his management team for many years and are
excited with the prospect of merging our organizations."

First Merchants is currently an East Central Indiana  Financial Holding Company.
Its subsidiaries include First Merchants Bank in Delaware and Hamilton Counties,
the Madison Community Bank in Madison County, First United Bank in Henry County,
Union County National Bank, The Randolph County Bank, the First National Bank of
Portland  in Jay  County,  Decatur  Bank & Trust  Company in Adams  County,  and
Frances  Slocum Bank in Wabash  County.  The  Corporation  also  operates  First
Merchants Insurance Services, a full-service  property casualty,  personal lines
and healthcare insurer, headquartered in Muncie, Indiana.

First Merchants common stock is traded  over-the-counter  on the NASDAQ National
Market  System  under the  symbol  FRME and is rated A+ by  Standard  and Poor's
Corporation.  Quotations are carried in daily newspapers and can be found on the
company's Internet Web page.  (http://firstmerchants.com).  Nine brokerage firms
make a market in First Merchants Corporation stock: Robert W. Baird & Co., Inc.;
Herzog,  Heine,  Geduld,  Inc.; Howe Barnes & Johnson,  Inc.; Keefe,  Bruyette &
Woods,  Inc.; Knight  Securities,  L.P.;  McDonald  Investments,  Inc.;  NatCity
Investments, Inc.; Sherwood Securities Corp.; and Spear, Leads and Kellog.

Lafayette Bancorporation common stock is traded Over-The-Counter  Bulletin Board
of the National  Association of Securities Dealers,  Inc. under the symbol LAYB.
The   following   brokerage   firms  have   transacted   business  in  Lafayette
Bancorporation  common stock during the past year: City Securities  Corporation;
Herzog, Herne, Geduld, Inc.; Hill Thompson Madig, L.P.; Howe Barnes Investments,
Inc.; JJP Hilliard, WY Lyons, Inc.; McDonald & Company Securities, Inc.; Merrill
Lynch; Monroe Securities, Inc.; MPI Financial; Raymond James Financial Services,
Inc.,  located at Lafayette  Bank and Trust  Company;  and Salomon Smith Barney,
Inc.

Statements  contained in this press  release that are not  historical  facts may
constitute  forward-looking statements (within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended) which involve significant risks and
uncertainties.  The  companies  intend  such  forward-looking  statements  to be
covered  in the  Private  Securities  Litigation  Reform  Act of  1995,  and are
including this statement for purposes of invoking these safe harbor  provisions.
The companies'  ability to predict  results or the actual effect of future plans
or  strategies  is  inherently  uncertain  and  involves  a number  of risks and
uncertainties,  some of which have been set forth in the companies'  most recent
annual reports on Form 10-K,  which  disclosures  are  incorporated by reference
herein.  The fact that  there are  various  risks  and  uncertainties  should be
considered in evaluating  forward-looking  statements and undue reliance  should
not be placed on such statements.

         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 joint merger proxy  statement / prospectus  that will be mailed
to 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 East  Jackson  Street,  Muncie,  Indiana
47305-2814,  telephone (765) 747-1530. Documents filed with the SEC by Lafayette
will be  available  free of charge from the  Secretary of Lafayette at 133 North
Fourth Street, P.O. Box 1130, Lafayette,  Indiana,  47902-1130,  telephone (765)
423-7296.  INVESTORS  SHOULD READ THE JOINT  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.

         Lafayette  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 THE  PARTICIPANTS  MAY BE
OBTAINED  THROUGH THE SEC'S WEBSITE FROM THE DEFINITIVE  PROXY  STATEMENT  FILED
WITH THE SEC ON FEBRUARY  23,  2001,  WITH  RESPECT TO FIRST  MERCHANTS  AND THE
DEFINITIVE  PROXY STATEMENT FILED WITH THE SEC ON MARCH 2, 2001, WITH RESPECT TO
LAFAYETTE.

CONTACTS:        First Merchants Corporation
                 James L. Thrash
                 Senior Vice President/Chief Financial Officer
                 Phone: (765) 747-1390

                 Lafayette Bancorporation
                 Robert J. Weeder
                 President & Chief Executive Officer
                 Phone: (765) 423-7289