Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 221

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 221
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7. AND ITEM 7A. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Corporation’s total loan balance, excluding loans held for sale, increased $368.3 million, ending December 31, 2024 at $12.9 billion. At December 31, 2024, the ACL - Loans totaled $192.8 million, which represents a decrease of $12.2 million from December 31, 2023.  The allowance decreased primarily due to $49.4 million of net charge-offs during the year ended December 31, 2024.  As a percentage of loans, the ACL - Loans was 1.50 percent at December 31, 2024, compared to 1.64 percent at December 31, 2023 and 1.86 percent at December 31, 2022.  The Corporation deems the current estimate for loan portfolio credit exposure as appropriate.

The Corporation’s credit loss experience is presented in the table below for the years indicated. 

(Dollars in Thousands)202420232022Allowance for credit losses - loans:   Balances, December 31$204,934 $223,277 $195,397 Loans charged off(54,243)(28,039)(6,601)Recoveries on loans4,866 2,396 3,927 Net charge-offs(49,377)(25,643)(2,674)Provision for credit losses - loans37,200 7,300 — CECL Day 1 non-PCD provision for credit losses - loans— — 13,955 CECL Day 1 PCD ACL - loans— — 16,599 Ending balance, December 31$192,757 $204,934 $223,277 Ratio of net charge-offs during the period to average loans outstanding during the period0.39 %0.21 %0.02 %Ratio of allowance for credit losses - loans to nonaccrual loans261.3 %382.5 %527.5 %Ratio of allowance for credit losses - loans to total loans outstanding 1.50 %1.64 %1.86 %

In 2024, the Corporation recorded $37.2 million in provision for credit losses - loans, which was offset by a release in reserve of $