Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 80

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 80
---
 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATANOTES TO CONSOLIDATED FINANCIAL STATEMENTS(table dollar amounts in thousands, except share data)

NONRECURRING MEASUREMENTSFollowing is a description of valuation methodologies used for instruments measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy at December 31, 2024 and 2023.Fair Value Measurements UsingDecember 31, 2024Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)SignificantUnobservable Inputs (Level 3)Collateral dependent loans$46,810 — — $46,810   Fair Value Measurements UsingDecember 31, 2023Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)SignificantUnobservable Inputs (Level 3)Collateral dependent loans$55,020 — — $55,020 Collateral Dependent LoansDetermining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value.  The fair value of real estate is generally based on appraisals by qualified licensed appraisers.  The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach.  If an appraisal is not available, the fair value may be determined by using a cash flow analysis.  Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and or customer financial statements.  Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions.UNOBSERVABLE (LEVEL 3) INPUTSThe following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill, at December 31, 2024 and 2023.December 31, 2024Fair ValueValuation TechniqueUnobservable InputsRange                  (Weighted-Average)State and municipal securities$2,381 Discounted cash flowMaturity/Call date1 month to 6 yearsUS Muni B