Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 262

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 2
Chunk 262
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,Six Months Ended June 30, (Dollars in Thousands)2025202420252024Net charge-offs (recoveries):Commercial and industrial loans$592 $39,644 $4,521 $40,924 Real estate loans:Construction63 — 63 — Commercial real estate, non-owner occupied(20)(150)172 192 Commercial real estate, owner occupied(4)(11)200 (55)Residential210 129 580 495 Home equity1,125 (174)1,060 (124)Individuals' loans for household and other personal expenditures349 206 645 465 Total net charge-offs (recoveries)$2,315 $39,644 $7,241 $41,897 

Management continually evaluates the commercial loan portfolio by including consideration of specific borrower cash flow analysis and estimated collateral values, types and amounts on nonperforming loans, past and anticipated credit loss experience, changes in the composition of the loan portfolio, and the current condition and amount of loans outstanding.  The determination of the provision for credit losses in any period is based on management’s continuing review and evaluation of the loan portfolio, and its judgment as to the impact of current economic conditions on the portfolio.  The Corporation continues to monitor economic forecast changes, loan growth and credit quality to determine provision needs in the future.

LIQUIDITY

Liquidity management is the process by which the Corporation ensures that adequate liquid funds are available for the holding company and its subsidiaries.  These funds are necessary in order to meet financial commitments on a timely basis.  These commitments include withdrawals by depositors, funding credit obligations to borrowers, paying dividends to stockholders, paying operating expenses, funding capital expenditures, and maintaining deposit reserve requirements.  Liquidity is monitored and closely managed by the asset/liability committee.

The Corporation’s liquidity is dependent upon the receipt of dividends from the Bank, which is subject to certain regulatory limitations and access to other funding sources.  Liquidity of the Bank is derived primarily from core deposit growth, principal payments received on loans, the sale and maturity of investment securities, net cash provided by operating activities, and access to other funding sources.

The principal source of asset-funded liquidity is investment securities classified as available for sale, the market values of which totaled $1.4 billion at June 30, 2025, a decrease of $28.3 million, or 2.0 percent,