Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 13

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 13
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 Ohio and southeast Michigan counties.  The Bank’s loans are generally secured by specific items of collateral, including real property, consumer assets and business assets.A brief description of current accounting practices and current valuation methodologies are presented below.CONSOLIDATIONThe consolidation of the Corporation’s financial statements include the accounts of the Corporation and all its subsidiaries, after elimination of all material intercompany transactions.  BUSINESS COMBINATIONS Business combinations are accounted for under the acquisition method of accounting.  Under the acquisition method, assets and liabilities of the business acquired are recorded at their estimated fair values as of the date of acquisition with any excess of the cost of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill.  Results of operations of the acquired business are included in the income statement from the date of acquisition.  Details of the Corporation’s acquisitions are included in NOTE 2. ACQUISITIONS AND DIVESTITURES of these Notes to Consolidated Financial Statements.CASH AND CASH EQUIVALENTSCash on hand, cash items in process of collection and noninterest bearing cash held at various banks are included in cash and cash equivalents and have a maturity of less than three months.  The Corporation maintains deposits with other financial institutions in amounts that exceed federal deposit insurance coverage.  Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes there is not significant credit risk on cash and cash equivalents.INTEREST-BEARING DEPOSITSInterest-bearing cash held at other banks, the Federal Reserve Bank and federal funds sold are included in interest-bearing deposits and have a maturity of less than three months.  The Corporation maintains deposits with other financial institutions in amounts that exceed federal deposit insurance coverage.  Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes there is not significant credit risk on interest-bearing deposits.INVESTMENT SECURITIESHeld to maturity securities are carried at amortized cost when the Corporation has the positive intent and ability to hold them until maturity.  Available for sale securities are recorded at fair value on a recurring basis with the unrealized gains and losses, net of applicable income taxes, recorded in other comprehensive income (loss).  Realized gains and losses are recorded in earnings and the prior fair value adjustments are reclassified within stockholders’ equity. Gains and losses on sales of securities are determined on the specific-identification method.  Amortization of premiums are amortized to their earliest call date and accretion of discounts are amortized to the maturity date.  The