Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 158

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 8
Chunk 158
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,793 1,603 (10,463)567 26,500 Recoveries on loans1,087 214 — 856 2,157 Loans charged off(42,011)(351)— (1,692)(44,054)Balances, June 30, 2024$91,217 $45,514 $14,360 $38,446 $189,537 Off-Balance Sheet Arrangements, Commitments And ContingenciesIn the normal course of business, the Corporation has entered into off-balance sheet financial instruments which include commitments to extend credit and standby letters of credit.  Commitments to extend credit are usually the result of lines of credit granted to existing borrowers under agreements that the total outstanding indebtedness will not exceed a specific amount during the term of the indebtedness.  Typical borrowers are commercial customers that use lines of credit to supplement their treasury management functions, and thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing for their cash flows.  Other typical lines of credit are related to home equity loans granted to customers.  Commitments to extend credit generally have fixed expiration dates or other termination clauses that may require a fee.  Standby letters of credit are generally issued on behalf of an applicant (the Corporation’s customer) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary.  Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit.  The standby letter of credit would permit the beneficiary to obtain payment from the Corporation under certain prescribed circumstances.  Subsequently, the Corporation would seek reimbursement from the applicant pursuant to the terms of the standby letter of credit.  The Corporation typically follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments.  Each customer’s creditworthiness is typically evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management’s credit evaluation of the customer. Collateral held varies but may include cash, real estate, marketable securities, accounts receivable, inventory, equipment and personal property. The contractual amounts of these commitments are not reflected in the consolidated financial statements and only amounts drawn upon would be reflected in the future.  Since many of the commitments are expected to expire