Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 31

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 31
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 outstanding Level One Series B preferred stock.  Likewise, each outstanding Level One depositary share representing a 1/100th interest in a share of the Level One Series B preferred stock was converted into a depositary share of the Corporation representing a 1/100th interest in a share of its newly issued preferred stock (Nasdaq: FRMEP).The Corporation engaged in this transaction with the expectation that it would be accretive to income and add to the existing market area in Michigan that has a demographic profile consistent with many of the current Midwest markets served by the Bank.  Goodwill resulted from this transaction due to the expected synergies and economies of scale.

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

Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition.  Based on valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change based on the timing of the transaction, the purchase price for the Level One acquisition is detailed in the following table.  Fair ValueCash and due from banks$217,104 Investment securities available for sale370,071 Investment securities held to maturity587 Loans held for sale7,951 Loans1,627,423 Allowance for credit losses - loans(16,599)Premises and equipment11,848 Federal Home Loan Bank stock11,688 Interest receivable7,188 Cash surrender value of life insurance30,143 Tax asset, deferred and receivable16,223 Other assets41,690 Deposits(1,930,790)Securities sold under repurchase agreements(1,521)Federal Home Loan Bank advances(160,043)Subordinated debentures(32,631)Interest payable(1,065)Other liabilities(42,813)Net tangible assets acquired156,454 Other intangibles18,642 Goodwill166,617 Purchase price$341,713 The Corporation performed an evaluation of the loan portfolio in which there were loans that, at acquisition, had more than an insignificant amount of credit quality deterioration and were classified as purchased credit deteriorated (“PCD”).  Details of the PCD loans are included in NOTE