Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 18

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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 statements at an amount less than their historical cost as indicated in the table below.June 30, 2025December 31, 2024Investments available for sale reported at less than historical cost:  Historical cost$1,527,184 $1,592,597 Fair value1,285,896 1,353,744 Gross unrealized losses$241,288 $238,853 Percentage of the Corporation's investment securities available for sale in an unrealized loss position94.7 %97.6 %In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy.  The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs.  From these discussions, the Corporation’s management is comfortable that the classifications are proper.  The Corporation has gained trust in the data for two reasons:  (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or losses resulting from the sale of certain securities has proven the data to be accurate over time.  Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.The amortized cost and fair value of investment securities available for sale and held to maturity at June 30, 2025 and December 31, 2024, by contractual maturity are shown below.  Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.  Securities not due at a single maturity are shown separately.Available for SaleHeld to MaturityAmortized CostFair ValueAmortized CostFair ValueMaturity Distribution at June 30, 2025Due in one year or less$— $— $4,878 $4,877 Due after one through five years12,965 12,580 121,851 117,859 Due after five through ten years205,079 185,363 196,082 175,327 Due after ten years876,744 730,726