Company: FRME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000712534-25-000197
Chunk: 150

Company: FIRST MERCHANTS CORP
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 150
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Nonaccrual Loans with no Allowance for Credit LossesCommercial and industrial loans$9,399 $2,713 $8,090 $4,937 Agricultural land, production and other loans to farmers254 — 75 — Real estate loans:Construction12,922 12,889 24,629 22,650 Commercial real estate, non-owner occupied6,693 5,823 12,118 10,153 Commercial real estate, owner occupied6,622 4,973 2,440 1,904 Residential25,487 — 21,491 — Home equity4,346 — 4,924 — Individuals' loans for household and other personal expenditures17 — 6 — Loans$65,740 $26,398 $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 and nine months ended September 30, 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 income or market valuation approach.  If an appraisal is not available, the fair value may be determined by using a cash flow analysis.  Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and or customer financial statements.  Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions.The tables below present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses.  The total collateral dependent loan balance decreased $3.4 million for the nine months