Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 130

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1
Chunk 130
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,133 Certificates and other time deposits19,927 17,906 37,833 14,157 49,301 63,458 508 2,013 2,521 Borrowings(4,215)2,586 (1,629)6,437 14,093 20,530 5,649 3,582 9,231 Totals20,784 57,622 78,406 21,207 242,476 263,683 8,740 40,111 48,851 Change in net interest income (fully taxable equivalent basis)$(6,223)$(18,680)(24,903)$36,035 $(11,485)24,550 $90,122 $23,406 113,528 Tax equivalent adjustment using marginal rate of 21% for 2024, 2023 and 2022  617 647 (4,005)Change in net interest income  $(24,286)$25,197 $109,523 

INVESTMENT SECURITIES

In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy.  The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs.  From these discussions, the Corporation’s management is comfortable that the classifications are proper.  The Corporation has gained trust in the data for two reasons:  (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or losses resulting from the sale of certain securities has proven the data to be accurate over time.  Fair value of securities classified as Level 3 in the valuation hierarchy were determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.

The following table summarizes the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale at the dates indicated. 

AmortizedCostGross Unrealized GainsGross Unrealized LossesFairValueAvailable for sale at December 31, 2024U.S. Government-sponsored agency securities$95,462 $— $