Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 216

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 216
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 to the five year phase-out. 

Management believes the disclosed capital ratios are meaningful measurements for evaluating the safety and soundness of the Corporation. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations.  The Federal Reserve focuses its assessment of capital adequacy on a component of tier 1 capital known as CET1.  Because the Federal Reserve has long indicated that voting common stockholders’ equity (essentially tier 1 risk-based capital less preferred stock and non-controlling interest in subsidiaries) generally should be the dominant element in tier 1 risk-based capital, this focus on CET1 is consistent with existing capital adequacy categories.  Tier I regulatory capital consists primarily of total common stockholders’ equity and subordinated debentures issued to business trusts categorized as qualifying borrowings, less non-qualifying intangible assets and unrealized net securities gains or losses.

45

PART II: ITEM 7. AND ITEM 7A. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

A reconciliation of GAAP measures to regulatory measures (non-GAAP) are detailed in the following table for the periods indicated.

December 31, 2024December 31, 2023(Dollars in Thousands)First Merchants CorporationFirst Merchants BankFirst Merchants CorporationFirst Merchants BankTotal Risk-Based CapitalTotal Stockholders' Equity (GAAP)$2,304,983 $2,315,701 $2,247,713 $2,291,788 Adjust for Accumulated Other Comprehensive (Income) Loss (1)188,685 186,808 175,970 174,103 Less:  Preferred Stock(25,125)(125)(25,125)(125)Add:  Qualifying Capital Securities25,000 — 25,000 — Less:  Disallowed Goodwill and Intangible Assets(725,504)(725,056)(731,315)(730,867)Add: Modified CECL Transition Amount— — 11,514 11,514 Less:  Disallowed Deferred Tax Assets(571)(590)(131)(114)Total Tier 1 Capital (Regulatory)1,767,468 1,776,738 1,703,626 1,746,299 Qualifying Subordinated Debentures72,040 — 132