Company: FRME
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000712534-25-000058
Chunk: 39

Company: FIRST MERCHANTS CORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 39
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70

PART II: ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATANOTES TO CONSOLIDATED FINANCIAL STATEMENTS(table dollar amounts in thousands, except share data)

In determining the fair value of the investment securities portfolio, the Corporation utilizes a third party for portfolio accounting services, including market value input, for those securities classified as Level 1 and Level 2 in the fair value hierarchy.  The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs.  From these discussions, the Corporation’s management is comfortable that the classifications are proper.  The Corporation has gained trust in the data for two reasons:  (a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis; and (b) actual gains or losses resulting from the sale of certain securities has proven the data to be accurate over time.  Fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.The amortized cost and fair value of investment securities available for sale and held to maturity at December 31, 2024 and December 31, 2023, by contractual maturity are shown below.  Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.  Securities not due at a single maturity are shown separately.  Available for SaleHeld to Maturity Amortized CostFair ValueAmortized CostFair ValueMaturity Distribution at December 31, 2024    Due in one year or less$1,800 $1,795 $5,268 $5,254 Due after one through five years12,189 11,857 124,004 117,999 Due after five through ten years168,338 151,467 174,533 154,533 Due after ten years922,636 789,734 1,129,147 906,564  1,104,963 954,853 1,432,952 1,184,350 U.S. Government-sponsored mortgage-backed securities519,943 431,622 641,513 539,170 Total Investment Securities$1,624,906