Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 65

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 65
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 lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Corporation’s leases are generally for periods of five to twenty years with various renewal options.  The exercise of such lease renewal options is not included in the present value of lease obligations unless it is reasonably certain that the option will be exercised.  The Corporation has lease agreements which contain both lease and non-lease components such as common area maintenance charges, real estate taxes, and insurance.  Non-lease components are not included in the measurement of the lease liability and are recognized in expense when incurred.  The Corporation has elected not to recognize short-term leases, with original lease terms of twelve months or less, on the Corporation’s balance sheet.  Certain of the Corporation’s lease agreements include rental payments adjusted periodically for inflation.  The Corporation’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.Supplemental balance sheet information related to leases is presented in the table below as of December 31, 2024 and 2023:20242023Operating lease assets$21,085 $18,912 Total lease assets$21,085 $18,912 Operating lease liabilities$23,873 $22,335 Total lease liabilities$23,873 $22,335 Weighted average remaining lease term (years)Operating leases6.56.3Weighted average discount rateOperating leases3.8 %3.2 %The table below presents the components of lease expense for the years ended December 31, 2024, 2023, and 2022:202420232022Lease Cost:Operating lease cost$5,514 $7,696 $5,233 Short-term lease cost566 478 470 Variable lease cost1,298 1,534 1,073 Sublease income$(5)$(16)$(23)Total lease cost$7,373 $9,692 $6,753 The Corporation performs impairment assessments for ROU assets when events or changes in circumstances indicate their carrying values may not be recoverable.  The year ended December 31, 2023 operating lease cost includes $2.1 million related to the abandonment of a leased office building.  The recognized loss was recorded in net occupancy expense in the Consolidated Statements of Income.

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PART II: ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATANOTES TO CONSOLIDATED FINANC