Company: FRME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000712534-25-000197
Chunk: 44

Company: FIRST MERCHANTS CORP
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 44
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 lines of credit to supplement their treasury management functions, and thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing for their cash flows.  Other typical lines of credit are related to home equity loans granted to customers.  Commitments to extend credit generally have fixed expiration dates or other termination clauses that may require a fee.  Standby letters of credit are generally issued on behalf of an applicant (the Corporation’s customer) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary.  Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit.  The standby letter of credit would permit the beneficiary to obtain payment from the Corporation under certain prescribed circumstances.  Subsequently, the Corporation would seek reimbursement from the applicant pursuant to the terms of the standby letter of credit.  The Corporation typically follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments.  Each customer’s creditworthiness is typically evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management’s credit evaluation of the customer. Collateral held varies but may include cash, real estate, marketable securities, accounts receivable, inventory, equipment and personal property. The contractual amounts of these commitments are not reflected in the consolidated financial statements and only amounts drawn upon would be reflected in the future.  Since many of the commitments are expected to expire without being drawn upon, the contractual amounts do not necessarily represent future cash requirements.  However, should the commitments be drawn upon and should the Corporation’s customers default on their resulting obligation to the Corporation, the maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those commitments.  Financial instruments with off-balance sheet risk were as follows:September 30, 2025December 31, 2024Amounts of commitments:Loan commitments to extend credit$5,552,327 $5,006,085 Standby letters of credit$72,972 $71,271 

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

The Corporation maintains an accrual for credit losses on off-balance sheet commitments