Company: FRME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000712534-25-000197
Chunk: 236

Company: FIRST MERCHANTS CORP
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 2
Chunk 236
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2024.  The ACL - Loans increased $1.7 million from December 31, 2024.  During the three and nine months ended September 30, 2025, the Corporation recorded net charge-offs of $5.1 million and $12.4 million, respectively, and $4.3 million and $14.1 million of provision for credit losses - loans, for the same periods respectively.  During the three and nine months ended September 30, 2024, the Corporation recorded net charge-offs of $6.7 million and $48.6 million, respectively, and $5.0 million and $31.5 million of provision for credit losses - loans, for the same periods respectively.  Nonaccrual loans at September 30, 2025 were $65.7 million and decreased $8.0 million from December 31, 2024 primarily due to declines in nonaccrual balances of $11.7 million in construction and $5.4 million in commercial real estate, non-owner occupied.  The decreases were partially offset by increases in nonaccrual balances within the commercial real estate, owner occupied portfolio of $4.2 million and residential of $4.0 million.  The Corporation's reserve for unfunded commitments was $18.0 million at September 30, 2025 and December 31, 2024, and is recorded in Other Liabilities.  Additional details of the Corporation's allowance methodology and asset quality are discussed within NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES of the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q and within the “LOAN QUALITY AND PROVISION FOR CREDIT LOSSES ON LOANS” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.  

The Corporation's other assets decreased $17.7 million from December 31, 2024 and was driven by a $26.4 million decline in the fair value of derivatives included in other assets from $77.1 million at December 31, 2024 to $50.7 million at September 30, 2025.  The decrease in derivatives is due primarily to a decline in market interest rates. This decrease was partially offset by an increase of $7.6 million related to the Corporation's continual investment in community redevelopment funds. Additional details of the Corporation's investments in community redevelopment funds are