Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 15

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 indicated in the table below.March 31, 2025December 31, 2024Investments available for sale reported at less than historical cost:  Historical cost$1,553,790 $1,592,597 Fair value1,312,244 1,353,744 Gross unrealized losses$241,546 $238,853 Percentage of the Corporation's investment securities available for sale in an unrealized loss position95.2 %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.

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PART I. FINANCIAL INFORMATION ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS(table dollar amounts in thousands, except share data)(Unaudited)

The amortized cost and fair value of investment securities available for sale and held to maturity at March 31, 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 March 31, 2025Due in one year or less$1,317 $1,316 $5,268 $5,264 Due after one through five years12,995 12,608 119,035 114,