Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 133

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 8
Chunk 133
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 recognized on nonaccrual loans for the three months ended March 31, 2025 or 2024. 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.The tables below present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses.  The total collateral dependent loan balance decreased $2.2 million, primarily related to a decrease of $5.3 million in the commercial and industrial loan class, partially offset by increases of $1.3 million and $1.9 million in commercial real estate, non-owner occupied, and commercial real estate, owner occupied loan classes, respectively, for the three months ended March 31, 2025.  The total related allowance balance increased $5.6 million, primarily related to increases of $2.4 million, $1.6 million, and $1.4 million in construction, commercial real estate, owner occupied, and commercial and industrial loan classes, respectively, for the three months ended March 31, 2025. March 31, 2025Commercial Real EstateResidential Real EstateOtherTotal Allowance on Collateral Dependent LoansCommercial and industrial loans$— $— $18,173 $18,173 $9,243 Real estate loans:Construction— 22,606 — 22,606 2,432 Commercial real estate, non-owner occupied28,919 — — 28,919 4,435 Commercial real estate, owner occupied11,609 — — 11,609 1,606 Residential— 1,150