Company: FRME
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000712534-25-000171
Chunk: 31

Company: FIRST MERCHANTS CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 household and other personal expenditures43 — 6 — Loans$67,358 $27,515 $73,773 $39,644 

19

PART I. FINANCIAL INFORMATION ITEM 1. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS(table dollar amounts in thousands, except share data)(Unaudited)

Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due.  There was no interest income recognized on nonaccrual loans for the three and six months ended June 30, 2025 or 2024. 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.The tables below present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses.  The total collateral dependent loan balance increased $1.5 million, primarily related to an increase of $11.3 million in the commercial and industrial loan class, partially offset by a decrease of $9.2 million in the construction loan class, for the six months ended June 30, 2025. June 30, 2025Commercial Real EstateResidential Real EstateOtherTotal Allowance on Collateral Dependent LoansCommercial and industrial loans$— $— $34,778 $34,778 $7,148 Real estate loans:Construction— 13,447 — 13,447 — Commercial real estate, non-owner occupied25,521 — — 25,521 4,156 Commercial real estate, owner occupied11,310 — — 11