Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 27

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 condition of the borrower do not justify accruing interest.  At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings.  Interest income accrued in prior years, if any, is charged to the allowance for credit losses.  Payments subsequently received on nonaccrual loans are applied to principal.  A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance. The following table summarizes the Corporation’s nonaccrual loans by loan class as of the dates indicated.March 31, 2025December 31, 2024Nonaccrual LoansNonaccrual Loans with no Allowance for Credit LossesNonaccrual LoansNonaccrual Loans with no Allowance for Credit LossesCommercial and industrial loans$6,136 $736 $8,090 $4,937 Agricultural land, production and other loans to farmers70 — 75 — Real estate loans:Construction24,520 604 24,629 22,650 Commercial real estate, non-owner occupied13,403 10,976 12,118 10,153 Commercial real estate, owner occupied9,208 4,709 2,440 1,904 Residential23,347 — 21,491 — Home equity5,238 — 4,924 — Individuals' loans for household and other personal expenditures— — 6 — Loans$81,922 $17,025 $73,773 $39,644 

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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)

Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due.  There was no interest income 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