Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 148

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 8
Chunk 148
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. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS(table dollar amounts in thousands, except share data)(Unaudited)

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 March 31, 2025, and December 31, 2024. Fair Value Measurements UsingMarch 31, 2025Fair ValueQuoted Prices inActive Markets forIdentical Assets(Level 1)Significant OtherObservableInputs(Level 2)Significant UnobservableInputs(Level 3)Collateral dependent loans$49,700 $— $— $49,700 Fair Value Measurements UsingDecember 31, 2024Fair ValueQuoted Prices inActive Markets forIdentical Assets(Level 1)Significant OtherObservable Inputs(Level 2)Significant UnobservableInputs(Level 3)Collateral dependent loans$46,810 $— $— $46,810 Collateral Dependent Loans Determining 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 March 31, 2025 and December 31, 2024. March 31, 2025Fair ValueValuation TechniqueUnobservable InputsRange                  (Weighted-Average)State and municipal securities$2,152 Discounted cash flowMaturity/Call date1 month to 6 years   US Muni BQ curveBBB