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CLOSED · 05:30 ET
Market ClerkRecap
Sat Oct 31 · markets closed3 signals on Oct 30129 insider buys this week · $10BCIRO short report next: Nov 15The week ahead

FRMEP

FIRST MERCHANTS CORP
NASDAQ · FINANCIALS · NATIONAL COMMERCIAL BANKS
25.17
+0.00 +0.00%
USD · close Oct 30
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Work order
0
FLAG · shorts 0
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $1.6BP/E 7.4DIV YIELD 5.72%FCF YIELD —REV TTM —NET INCOME $198.8M −4.8%NET CASH —52W 24.89 – 26.79SEC XBRL · TTM TO Invalid Date

How FRMEP rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
76%
of sentences unchanged
Added
40
new sentences
Dropped
29
sentences removed
Length
+290
words, now 7,717

New in FY2025

  • RISK FACTORS RISK FACTORS There are a number of factors, including those specified below, that may adversely affect the Corporation’s business, financial results or stock price.
  • Moreover, governmental and regulatory actions taken in response to an epidemic, a pandemic or another PART I: ITEM 1A., ITEM 1B., AND ITEM 1C. infectious disease outbreak may include decreased interest rates, which could adversely impact the Corporation’s interest margins and may lead to decreases in the Corporation’s net interest income.
  • The Corporation adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments as amended, on January 1, 2021, which replaced the previous “incurred loss” model for measuring credit losses with an “expected life of loan loss” model, referred to as the CECL model.
  • Sources also include brokered certificates of deposit, repurchase agreements, federal funds purchased and Federal Home Loan Bank (“FHLB”) advances.
  • Although the Corporation adheres to industry standard practices in conducting thorough due diligence of vendors and contract management, should a vendor experience a breach, the Bank could still suffer reputational harm, and potentially financial losses.
  • The Corporation’s Third-Party Risk Management Program helps to mitigate risks posed by reliance on third and fourth parties.
  • The Committee reports its activities, key conclusions and recommendations to the Enterprise Risk Management Committee and the Board’s Risk and Credit Policy Committee on a quarterly basis.
  • It assesses the experience of management personnel responsible for preventing, mitigating, detecting and remediating any cyber incidents, including the Chief Information Security Officer (“CISO”).
  • If the Corporation cannot effectively manage these service providers, the service parties fail to materially perform, or the Corporation was to falter in any of the other noted areas, its business or performance could be negatively impacted. • The Corporation is subject to risks and challenges related to its development and use of artificial intelligence.
  • The Corporation and its third-party vendors, clients, counterparties, and other market participants use and develop artificial intelligence technologies, including machine-learning and generative artificial intelligence tools, and generative artificial intelligence models.
  • This use may expose the Corporation to various risks and potential liabilities, including: enhanced governmental or regulatory scrutiny; litigation; ethical concerns; confidentiality and security risks; intellectual property concerns over data rights and protection; heightened susceptibility to, and increased frequency and severity of, cyberattacks; inaccurate or biased algorithms or underlying datasets; and misuse or misappropriation.
  • These factors could adversely affect our business, reputation, and financial results.
  • In addition, poor implementation of artificial intelligence by the Corporation or its third-party service providers could subject the Corporation to additional risks that we may not adequately predict or mitigate.
  • Failure to strategically embrace artificial intelligence or to achieve expected effectiveness, productivity, or cost reductions from artificial intelligence adoption may result in a competitive disadvantage.
  • We could experience a material adverse effect on our operating results, customer relationships, and growth opportunities if: we cannot offer new artificial intelligence-facilitated technologies as quickly as our competitors; our competitors develop more cost-effective solutions or product offerings; our employees do not adopt such technologies expediently; or we are unable to source necessary components, including reliable third-party technology solutions and service providers.
  • The use of artificial intelligence solutions may also introduce operational and control risks, including potential errors in outputs, challenges in oversight and accountability, increased vulnerability to system failures or cyber incidents, and the risk that these technologies may not perform as intended under complex or unforeseen circumstances.
  • These risks could materially disrupt our business operations and adversely affect our financial condition and reputation.
  • The evolving legal, regulatory, and compliance framework for artificial intelligence, both in the U.S. and internationally, may impact our ability to protect our data and intellectual property against infringing use, require changes to our artificial intelligence implementation, and increase our compliance costs and the risk of non-compliance.
  • Although the Corporation has established governance, risk management, and control frameworks intended to oversee the use of artificial intelligence, these frameworks may not identify or mitigate all current or emerging risks associated with rapidly evolving technologies.
  • Additionally, we may not be able to control how third-party artificial intelligence solutions we use are developed or maintained, including the source and quality of training data or the frequency and nature of model updates.
  • We may also be unable to govern or protect the integrity of the data we input into such tools, specifically how that data is retained, reused, co-mingled with other data, or disclosed, even where we have sought protections with respect to these matters. • The Corporation is subject to environmental liability risk associated with our Bank branches and any real estate collateral we acquire upon foreclosure.
  • The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our business, financial condition or results of operations.
  • PART I: ITEM 1A., ITEM 1B., AND ITEM 1C. • Significant legal actions could subject the Corporation to substantial uninsured liabilities.
  • As a result, the Corporation may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk, which could have a material adverse effect on our results of operations and financial condition. • The Corporation’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates.
  • At December 31, 2025, the Corporation had goodwill of $712.0 million recorded on its Consolidated Balance Sheet.
  • Although the Corporation takes steps to minimize reputation risk in dealing with customers and other constituencies, the Corporation is inherently exposed to this risk.
  • PART I: ITEM 1A., ITEM 1B., AND ITEM 1C. • Evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Corporation’s environmental, social and governance practices may impose additional costs on the Corporation or expose it to new or additional risks.
  • The expectations of customers, regulators, investors, and other stakeholders related to the Corporation’s environmental, social and governance (“ESG”) practices and disclosure continue to evolve.
  • New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. • Climate change and related legislative and regulatory initiatives may materially affect the Corporation’s business and results of operations.
  • The global business community has continued its political and social awareness surrounding the state of the global environment and the issue of climate change.
  • Further, state legislatures and federal and state regulatory agencies continue to propose numerous initiatives related to climate change.
  • At the same time, some policymakers have adopted or are considering adopting, requirements that constrain climate change initiatives.
  • The lack of legislative or regulatory certainty surrounding climate risk management and practices make it impossible to predict how specifically climate change may impact our financial condition and results of operations.
  • Rapid changes in interest rates make it challenging for the Bank to balance its loan and deposit portfolios, which may adversely affect the Corporation’s results of operations by reducing asset yields or spreads or having other adverse impacts on our business.
  • In response to easing inflation pressures, the Federal Reserve decreased the target federal funds rate in 2024 and 2025, but uncertainty remains concerning inflation and interest rates.
  • See a description of recent legislation in the “REGULATION AND SUPERVISION OF FIRST MERCHANTS CORPORATION AND SUBSIDIARIES” section of Item 1.
  • Business of this Annual Report on Form 10-K.
  • See the “Deposit Insurance” section of “REGULATION AND SUPERVISION OF FIRST MERCHANTS CORPORATION AND SUBSIDIARIES” in Item 1.
  • Business of this Annual Report on Form 10-K for additional information. • The banking and financial services industry is highly competitive, and competitive pressures could intensify and adversely affect the Corporation’s financial results.
  • In addition, the elevated interest rate environment has continued to increase competition for liquidity and the premium at which liquidity is available to meet funding needs.

Gone since FY2024

  • RISK FACTORS There are a number of factors, including those specified below, that may adversely affect the Corporation’s business, financial results or stock price.
  • Moreover, governmental and regulatory actions taken in response to an epidemic, a pandemic or another infectious disease outbreak may include decreased interest rates, which could adversely impact the Corporation’s interest margins and may lead to decreases in the Corporation’s net interest income.
  • The Corporation adopted Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments as amended, on January 1, 2021, which replaced the previous “incurred loss” model for measuring credit losses with an “expected life of loan loss” model described above, referred to as the CECL model.
  • Sources also include brokered certificates of deposit, repurchase agreements, federal funds purchased and FHLB advances.
  • Although the Corporation adheres to industry standard practices in conducting thorough due diligence of vendors and contract management, should a vendor experience a breach, similar to the MOVEit breach in 2023 which impacted a vendor utilized by the Bank, the Bank could still suffer reputational harm, and potentially financial losses.
  • The Corporation’s third-party management program helps to mitigate risks posed by reliance on third and fourth parties.
  • The Committee reports its activities, key conclusions and recommendations to the Enterprise Risk Management Committee and the Board’s Risk and Credit Policy Committee of the Board on a quarterly basis.
  • It assesses the experience of management personnel responsible for preventing, mitigating, detecting and remediating any cyber incidents, including the Chief Information Security Officer.
  • If the Corporation cannot effectively manage these service providers, the service parties fail to materially perform, or the Corporation was to falter in any of the other noted areas, its business or performance could be negatively impacted. • The Corporation is subject to environmental liability risk associated with our Bank branches and any real estate collateral we acquire upon foreclosure.
  • The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our business, financial condition or results of operations. • Significant legal actions could subject the Corporation to substantial uninsured liabilities.
  • As a result, the Corporation may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk, which could have a material adverse effect on our results of operations and financial condition.
  • PART I: ITEM 1A., ITEM 1B., AND ITEM 1C. • The Corporation’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates.
  • At December 31, 2024, the Corporation had goodwill of $712.0 million recorded on its consolidated balance sheet.
  • Although the Corporation takes steps to minimize reputation risk in dealing with customers and other constituencies, the Corporation is inherently exposed to this risk. • Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Corporation’s environmental, social and governance practices may impose additional costs on the Corporation or expose it to new or additional risks.
  • Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosure.
  • Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.
  • Increased ESG-related compliance costs for the Corporation as well as among our suppliers, vendors and various other parties within our supply chain could result in increases to our overall operational costs.
  • New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.
  • PART I: ITEM 1A., ITEM 1B., AND ITEM 1C. • Climate change and related legislative and regulatory initiatives may materially affect the Corporation’s business and results of operations.
  • The global business community has increased its political and social awareness surrounding the state of the global environment and the issue of climate change.
  • Congress, state legislatures and federal and state regulatory agencies continue to propose numerous initiatives related to climate change.
  • Similar and even more expansive initiatives are expected under the current administration, including potentially increasing supervisory expectations with respect to banks’ risk management practices, accounting for the effects of climate change in stress testing scenarios and systemic risk assessments, revising expectations for credit portfolio concentrations based on climate-related factors and encouraging investment by banks in climate-related initiatives and lending to communities disproportionately impacted by the effects of climate change.
  • The lack of empirical data surrounding the credit and other financial risks posed by climate change make it impossible to predict how specifically climate change may impact our financial condition and results of operations.
  • For example, changes in reference rates linked to financial instruments, such as the Secured Overnight Financing Rate (“SOFR”), may adversely affect the value of financial instruments the Corporation holds or issues and related net interest income.
  • Rapid changes in interest rates makes it challenging for the Bank to balance its loan and deposit portfolios, which may adversely affect the Corporation’s results of operations by reducing asset yields or spreads or having other adverse impacts on our business.
  • In response to easing inflation pressures, the Federal Reserve is expected to decrease the target federal funds rate in 2025.
  • See a description of recent legislation in the “REGULATION AND SUPERVISION OF FIRST MERCHANTS CORPORATION AND SUBSIDIARIES” section of Item 1: Business of this Annual Report on Form 10-K.
  • See the “Deposit Insurance” section of “REGULATION AND SUPERVISION OF FIRST MERCHANTS CORPORATION AND SUBSIDIARIES” in Item 1: Business of this Annual Report on Form 10-K for additional information. • The banking and financial services industry is highly competitive, and competitive pressures could intensify and adversely affect the Corporation’s financial results.
  • In addition, the rising interest rate environment has continued to increase competition for liquidity and the premium at which liquidity is available to meet funding needs.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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