Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 140

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1
Chunk 140
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 and Repossessions4,948 4,831 6,431 558 940 Nonperforming assets (NPA)78,721 58,411 48,979 43,949 65,651 Loans 90-days or more delinquent and still accruing5,902 172 1,737 963 746 NPAs and loans 90-days or more delinquent$84,623 $58,583 $50,716 $44,912 $66,397 

(1) As a result of the adoption of ASU 2022-02 on January 1, 2023, the renegotiated classification is no longer applicable. 

19

PART I: ITEM 1. BUSINESS

Loans are reclassified to a non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest.  At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in the prior year, if any, is charged to the allowance for credit losses (“ACL - Loans”).  Payments subsequently received on non-accrual loans are applied to principal.  A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance.

At December 31, 2024, non-accrual loans totaled $73.8 million, an increase of $20.2 million from December 31, 2023.  The increase was primarily due to a $24.1 million increase in non-accrual balances within the construction loan class.  The increase was offset by a $3.6 million decrease in non-accrual balances within the residential loan class.  At December 31, 2024, 2023, 2022, 2021, and 2020, non-accrual loans include assets acquired of $3.6 million, $5.2 million, $8.2 million, $3.2 million, and $7.9 million, respectively.

Other real estate owned (“OREO”) at December 31, 2024 increased $0.1 million from the December 31, 2023 balance of $4.8 million.  At December 31, 2024, 2023, 2022,