Company: FRME
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000712534-25-000117
Chunk: 39

Company: FIRST MERCHANTS CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 39
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 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 March 31, 2025, the termination value of derivatives in a net liability position related to these agreements was $8.0 million, which resulted in no collateral pledged to counterparties as of March 31, 2025.  While the Corporation did not breach any of these provisions as of March 31, 2025, if it had, the Corporation could have been required to settle its obligations under the agreements at their termination value.

25

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

NOTE 6

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 greatest volume and level of activity.  In the absence of a principal market, the valuation is based on the most advantageous market for the asset or liability (i.e., the market where the asset could be sold or the liability transferred at a price that maximizes the amount to be received for the asset or minimizes the amount to be paid to transfer the liability).Valuation inputs refer to the assumptions market participants would use in pricing a given asset or liability.  Inputs can be observable or unobservable.  Observable inputs are those assumptions which market participants would