Company: FRME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000712534-25-000197
Chunk: 169

Company: FIRST MERCHANTS CORP
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 169
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 Value Measurements UsingSeptember 30, 2025Fair ValueQuoted Prices inActive Markets forIdentical Assets(Level 1)Significant OtherObservableInputs(Level 2)Significant UnobservableInputs(Level 3)Collateral dependent loans$66,708 $— $— $66,708 Fair Value Measurements UsingDecember 31, 2024Fair ValueQuoted Prices inActive Markets forIdentical Assets(Level 1)Significant OtherObservable Inputs(Level 2)Significant UnobservableInputs(Level 3)Collateral dependent loans$46,810 $— $— $46,810 Collateral Dependent Loans 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.Unobservable (Level 3) InputsThe following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill, at September 30, 2025 and December 31, 2024. September 30, 2025Fair ValueValuation TechniqueUnobservable InputsRange                  (Weighted-Average)State and municipal securities$1,963 Discounted cash flowMaturity/Call date1 month to 5 years   US Muni BQ curveBBB   Discount rate3.4% - 5.7%Weighted-average coupon3.6%Corporate obligations $31 Discounted cash flowRisk free rate3 month CME Term SOFR plus 26bps   plus premium for illiquidity (basis points)plus 200bpsWeighted-average coupon0%Collateral dependent loans$66,708 Collateral based measurementsDiscount to reflect current market conditions and ultimate collectability1% -