Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 76

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 76
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 Standard & Poor’s at or above investment grade.  The Corporation’s mitigation of such risk is through quarterly financial reviews, comparing mark-to-market values with policy limitations, credit ratings and collateral pledging.Credit-risk-related Contingent FeaturesThe Corporation has agreements with certain of its derivative counterparties that contain a provision where if the Corporation fails to maintain its status as a well or adequately capitalized institution, then the Corporation could be required to terminate or fully collateralize all outstanding derivative contracts.  Additionally, the Corporation has agreements with certain of its derivative counterparties that contain a provision where if the Corporation defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Corporation could also be declared in default on its derivative obligations.  As of December 31, 2024, the termination value of derivatives in a net liability position related to these agreements was $3.9 million, which resulted in no collateral pledged to counterparties as of December 31, 2024.  While the Corporation did not breach any of these provisions as of December 31, 2024, if it had, the Corporation could have been required to settle its obligations under the agreements at their termination value.

89

PART II: ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATANOTES TO CONSOLIDATED FINANCIAL STATEMENTS(table dollar amounts in thousands, except share data)

NOTE 13

FAIR VALUES OF FINANCIAL INSTRUMENTSThe Corporation used fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  The accounting guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  ASC 820 applies only when other guidance requires or permits assets or liabilities to be measured at fair value; it does not expand the use of fair value in any new circumstances.As defined in ASC 820, fair value is the price to sell an asset or transfer a liability in an orderly transaction between market participants.  It represents an exit price at the measurement date.  Market participants are buyers and sellers, who are independent, knowledgeable, and willing and able to transact in the principal (or most advantageous) market for the asset or liability being measured.  Current market conditions, including imbalances between supply and demand, are considered in determining fair value.  The Corporation values its assets and liabilities in the principal market where it sells the particular asset or transfers the liability with the