SEC Filing | First Merchants Corporation

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frme-20210726

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): July 26, 2021

Commission File Number 0-17071

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)


Indiana			35-1544218
(State or other jurisdiction of incorporation)			(IRS Employer Identification No.)

200 East Jackson Street

P.O. Box 792

Muncie, IN 47305-2814

(Address of principal executive offices, including zip code)

(765) 747-1500

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	Nasdaq Global Select Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 26, 2021, First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit No. 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) Not applicable.

(b) Not applicable.

(d) Exhibits.

Exhibit 99.1 Press Release, dated July 26 , 2021, issued by First Merchants Corporation

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


									First Merchants Corporation
									(Registrant)

									By: /s/ Michele M. Kawiecki Michele M. Kawiecki Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)
Dated: July 26, 2021

EXHIBIT INDEX

Exhibit No. Description

99.1 Press Release, dated July 26 , 2021, issued by First Merchants Corporation

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

Document

N / E / W / S R / E / L / E / A / S / E

July 26, 2021

FOR IMMEDIATE RELEASE

For more information, contact:

Nicole M. Weaver, Vice President and Director of Corporate Administration

765-521-7619

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES SECOND QUARTER 2021 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2021 net income of $55.6 million compared to $33 million during the same period in 2020. Earnings per share for the period totaled $1.03 per share compared to the second quarter of 2020 result of $.62 per share. Year-to-date net income totaled $105 million compared to $67.3 million during the six months ended June 30, 2020. Year-to-date earnings per share totaled $1.94 compared to $1.24 during the same period in 2020.

Total assets equaled $14.9 billion as of the quarter-ended June 30, 2021 and loans totaled $9.1 billion. The Corporation experienced organic loan growth of $289.6 million, or 3.4 percent during the last twelve months, offset by the forgiveness of Paycheck Protection Program (“PPP”) loans which accounted for a decline of $466.9 million. As a result, the loan portfolio decreased by $177.3 million, or 1.9 percent, during that period. Organic loan growth, on an annualized basis, was 6.7 percent in the second quarter 2021. Investments increased $1.4 billion, or 48.7 percent, during the last twelve months and now total $4.1 billion. Total deposits equaled $12.2 billion as of quarter-end and increased by $1.2 billion, or 11.3 percent, from the same period in 2020.

The Corporation’s Allowance for Credit Losses – Loans totaled $199.8 million as of quarter-end, or 2.19% of total loans. Net charge-offs for the quarter totaled $1.3 million and no provision expense was recorded. Provision expense taken during the three and six months ended June 30, 2020 of $21.9 million and $41.6 million, respectively, reflected our view of increased credit risk related to the COVID-19 pandemic. Non-accrual loans as of quarter-end totaled $57.6 million.

Mark Hardwick, Chief Executive Officer, stated, “Our management team is pleased with our record setting second quarter net income. It’s very satisfying to achieve great financial results while serving our clients and communities. Our healthy levels of loan growth, earning asset growth, credit quality, capital levels and efficiency will lead us into the future. I am proud of our teammates for staying focused on our goals and continuously finding ways to win for our stakeholders.”

Net-interest income for the quarter totaled $104.3 million, an increase of $11.2 million from the second quarter of 2020, or 12.1 percent. Net interest margin, on a tax equivalent basis, totaling 3.22 percent, increased by 3 basis points compared to the second quarter of 2020. Yields on earning assets for the second quarter totaled 3.49 percent and cost of supporting liabilities totaled 27 basis points. Fair value accretion contributed less to margin as it accounted for 7 basis points in the second quarter of 2021, compared to 12 basis points in the second quarter of 2020. PPP loans contributed 15 basis points to margin during the second quarter of 2021, but subtracted 6 basis points from margin in the same quarter of 2020.

Non-interest income totaled $30.9 million for the quarter, a $4.4 million increase over the second quarter of 2020. Gains from the sale of mortgage loans were exceptionally strong and enhanced by a large portfolio mortgage loan sale contributing a gain of $2.9 million during the quarter. Fiduciary and wealth management fees increased $1.9 million over the second quarter of 2020, which was offset by a decline in card payment fees due to the adoption of the Durbin Amendment. Non-interest expense totaled $69.3 million for the quarter compared to $60 million in the second quarter of 2020 and $66.1 million in the first quarter of 2021. Total expenses in the second quarter of 2020 were unusually low and reflected a $2.3 million deferral of salary expense related to PPP loan originations, a $1.1 million reduction in bonus accruals and a $1.6 million decrease in processing fees related to termination of a debit card rewards program. Total expenses increased on a linked quarter basis primarily due to increased salaries and incentives.

The loan to deposit ratio now totals 74.9 percent and loan to asset ratio totals 61.3 percent. As of June 30, 2021, the Corporation’s total risk-based capital ratio equaled 14.23 percent, the common equity tier 1 capital ratio equaled 11.94 percent, and the tangible common equity ratio totaled 9.04 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Monday, July 26, 2021.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's second quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until August 26, 2021. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10157361.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme210726.html during the time of the call. A replay of the web cast will be available until July 26, 2022.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements of First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.

* * * *


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,
	2021		2020
ASSETS
Cash and cash equivalents	$	167,596	$	229,759
Interest-bearing deposits	438,863		380,021
Investment securities, net of allowance for credit losses of $245,000 and $0	4,148,314		2,789,379
Loans held for sale	18,582		901
Loans	9,121,250		9,298,541
Less: Allowance for credit losses - loans	(199,775)		(121,119)
Net loans	8,921,475		9,177,422
Premises and equipment	103,822		112,548
Federal Home Loan Bank stock	28,736		28,736
Interest receivable	54,173		57,063
Goodwill and other intangibles	573,786		575,855
Cash surrender value of life insurance	294,462		290,715
Other real estate owned	601		7,367
Tax asset, deferred and receivable	36,924		13,126
Other assets	135,763		156,486
TOTAL ASSETS	$	14,923,097	$	13,819,378
LIABILITIES
Deposits:
Noninterest-bearing	$	2,479,853	$	2,260,351
Interest-bearing	9,723,547		8,705,637
Total Deposits	12,203,400		10,965,988
Borrowings:

Securities sold under repurchase agreements	146,904		181,150
Federal Home Loan Bank advances	334,243		400,817
Subordinated debentures and other borrowings	118,498		285,197
Total Borrowings	599,645		867,164
Interest payable	2,929		5,587
Other liabilities	245,323		171,544
Total Liabilities	13,051,297		12,010,283
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares	125		125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 53,972,386 and 53,795,500 shares	6,747		6,724
Additional paid-in capital	1,009,182		1,002,962
Retained earnings	795,666		735,439
Accumulated other comprehensive income	60,080		63,845
Total Stockholders' Equity	1,871,800		1,809,095
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,923,097	$	13,819,378


CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,				June 30,
	2021		2020		2021		2020
INTEREST INCOME
Loans receivable:
Taxable	$	87,002	$	87,312	$	172,107	$	183,964
Tax-exempt	5,545		5,359		10,884		10,674
Investment securities:
Taxable	7,440		6,147		14,135		13,778
Tax-exempt	13,071		10,019		25,456		19,354

Deposits with financial institutions	129		134		243		709
Federal Home Loan Bank stock	88		281		266		580
Total Interest Income	113,275		109,252		223,091		229,059
INTEREST EXPENSE
Deposits	5,823		12,707		12,023		34,455
Federal funds purchased	2		2		4		113
Securities sold under repurchase agreements	75		92		162		444
Federal Home Loan Bank advances	1,452		1,794		2,894		3,568
Subordinated debentures and other borrowings	1,659		1,639		3,316		3,584
Total Interest Expense	9,011		16,234		18,399		42,164
NET INTEREST INCOME	104,264		93,018		204,692		186,895
Provision for credit losses - loans	—		21,895		—		41,647
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	104,264		71,123		204,692		145,248
OTHER INCOME
Service charges on deposit accounts	5,596		4,312		10,860		10,282
Fiduciary and wealth management fees	7,510		5,601		13,932		11,586
Card payment fees	4,159		6,097		8,526		12,004
Net gains and fees on sales of loans	8,325		3,674		12,311		7,037
Derivative hedge fees	943		1,042		1,260		2,981
Other customer fees	368		333		736		731
Earnings on cash surrender value of life insurance	1,205		1,326		2,541		2,686
Net realized gains on sales of available for sale securities	1,761		3,068		3,560		7,680
Other income	1,017		1,028		1,249		1,293
Total Other Income	30,884		26,481		54,975		56,280
OTHER EXPENSES
Salaries and employee benefits	42,438		35,698		81,249		74,941
Net occupancy	5,615		5,447		12,106		11,248
Equipment	4,848		4,489		9,878		8,833
Marketing	1,122		2,092		2,246		3,535
Outside data processing fees	4,698		2,618		8,942		6,817
Printing and office supplies	313		279		596		666
Intangible asset amortization	1,464		1,511		2,821		3,025
FDIC assessments	1,461		1,472		2,829		2,995
Other real estate owned and foreclosure expenses	178		684		912		1,189
Professional and other outside services	2,976		1,553		5,519		3,811
Other expenses	4,182		4,146		8,295		9,100
Total Other Expenses	69,295		59,989		135,393		126,160
INCOME BEFORE INCOME TAX	65,853		37,615		124,274		75,368
Income tax expense	10,294		4,623		19,246		8,113
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	55,559	$	32,992	$	105,028	$	67,255


Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.03	$	0.62	$	1.95	$	1.24
Diluted Net Income Available to Common Stockholders	$	1.03	$	0.62	$	1.94	$	1.24
Cash Dividends Paid	$	0.29	$	0.26	$	0.55	$	0.52
Average Diluted Shares Outstanding (in thousands)	54,184		53,943		54,159		54,430


FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
NET CHARGE-OFFS	$	1,307		$	230		$	4,928		$	812

AVERAGE BALANCES:
Total Assets	$	14,758,597		$	13,655,322		$	14,503,087		$	13,114,280
Total Loans	9,282,524			9,180,610			9,259,600			8,853,591
Total Earning Assets	13,558,956			12,187,442			13,292,617			11,739,936
Total Deposits	12,125,153			10,789,909			11,848,075			10,338,091
Total Stockholders' Equity	1,846,037			1,795,509			1,843,250			1,805,963

FINANCIAL RATIOS:
Return on Average Assets	1.51		%	0.97		%	1.45		%	1.03		%
Return on Average Stockholders' Equity	12.04			7.35			11.40			7.45
Return on Average Common Stockholders' Equity	12.04			7.35			11.40			7.45
Average Earning Assets to Average Assets	91.87			89.25			91.65			89.52
Allowance for Credit Losses - Loans as % of Total Loans	2.19			1.30			2.19			1.30
Net Charge-offs as % of Average Loans (Annualized)	0.06			0.01			0.11			0.02
Average Stockholders' Equity to Average Assets	12.51			13.15			12.71			13.77
Tax Equivalent Yield on Average Earning Assets	3.49			3.72			3.51			4.04
Interest Expense/Average Earning Assets	0.27			0.53			0.28			0.72
Net Interest Margin (FTE) on Average Earning Assets	3.22			3.19			3.23			3.32
Efficiency Ratio	48.91			47.95			49.54			50.09
Tangible Common Book Value Per Share	$	24.15		$	23.04		$	24.15		$	23.04


NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2021			2021			2020			2020			2020
Non-Accrual Loans	$	57,556		$	57,923		$	61,471		$	56,739		$	50,102
Renegotiated Loans	629			655			3,240			2,677			1,086
Non-Performing Loans (NPL)	58,185			58,578			64,711			59,416			51,188
Other Real Estate Owned and Repossessions	601			604			940			6,984			7,409
Non-Performing Assets (NPA)	58,786			59,182			65,651			66,400			58,597
90+ Days Delinquent	183			1,093			746			1,330			4,981
NPAs & 90 Day Delinquent	$	58,969		$	60,275		$	66,397		$	67,730		$	63,578

Allowance for Credit Losses - Loans	$	199,775		$	201,082		$	130,648		$	126,726		$	121,119
Quarterly Net Charge-offs	1,307			3,621			560			6,937			230
NPAs / Actual Assets %	0.39		%	0.40		%	0.47		%	0.48		%	0.42		%
NPAs & 90 Day / Actual Assets %	0.40		%	0.41		%	0.47		%	0.49		%	0.46		%
NPAs / Actual Loans and OREO %	0.64		%	0.63		%	0.71		%	0.72		%	0.63		%
Allowance for Credit Losses - Loans / Actual Loans (%)	2.19		%	2.16		%	1.41		%	1.37		%	1.30		%
Net Charge-offs as % of Average Loans (Annualized)	0.06		%	0.16		%	0.02		%	0.30		%	0.01		%


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2021		2021		2020		2020		2020
ASSETS
Cash and cash equivalents	$	167,596	$	187,901	$	192,896	$	164,632	$	229,759
Interest-bearing deposits	438,863		392,806		392,305		273,936		380,021
Investment securities, net of allowance for credit losses	4,148,314		3,700,857		3,146,787		2,933,286		2,789,379
Loans held for sale	18,582		4,430		3,966		3,183		901
Loans	9,121,250		9,318,228		9,243,174		9,243,833		9,298,541
Less: Allowance for credit losses - loans	(199,775)		(201,082)		(130,648)		(126,726)		(121,119)
Net loans	8,921,475		9,117,146		9,112,526		9,117,107		9,177,422
Premises and equipment	103,822		109,432		111,062		112,959		112,548
Federal Home Loan Bank stock	28,736		28,736		28,736		28,736		28,736
Interest receivable	54,173		54,662		53,948		52,992		57,063
Goodwill and other intangibles	573,786		571,536		572,893		574,369		575,855
Cash surrender value of life insurance	294,462		293,766		292,745		291,543		290,715
Other real estate owned	601		604		940		6,942		7,367
Tax asset, deferred and receivable	36,924		40,163		12,340		21,762		13,126
Other assets	135,763		127,027		146,066		155,903		156,486
TOTAL ASSETS	$	14,923,097	$	14,629,066	$	14,067,210	$	13,737,350	$	13,819,378
LIABILITIES
Deposits:
Noninterest-bearing	$	2,479,853	$	2,494,891	$	2,298,138	$	2,187,607	$	2,260,351
Interest-bearing	9,723,547		9,456,889		9,063,472		8,718,546		8,705,637
Total Deposits	12,203,400		11,951,780		11,361,610		10,906,153		10,965,988
Borrowings:
Federal funds purchased	—		—		—		80,000		—
Securities sold under repurchase agreements	146,904		185,721		177,102		187,732		181,150
Federal Home Loan Bank advances	334,243		359,337		389,430		399,522		400,817
Subordinated debentures and other borrowings	118,498		118,439		118,380		118,320		285,197
Total Borrowings	599,645		663,497		684,912		785,574		867,164
Interest payable	2,929		4,020		3,287		5,038		5,587
Other liabilities	245,323		203,913		141,756		206,929		171,544
Total Liabilities	13,051,297		12,823,210		12,191,565		11,903,694		12,010,283
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding	125		125		125		125		125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	6,747		6,744		6,740		6,736		6,724
Additional paid-in capital	1,009,182		1,007,300		1,005,366		1,003,777		1,002,962
Retained earnings	795,666		755,877		788,578		757,550		735,439
Accumulated other comprehensive income	60,080		35,810		74,836		65,468		63,845
Total Stockholders' Equity	1,871,800		1,805,856		1,875,645		1,833,656		1,809,095
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,923,097	$	14,629,066	$	14,067,210	$	13,737,350	$	13,819,378


CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30			March 31,			December 31,			September 30,			June 30,
	2021			2021			2020			2020			2020
INTEREST INCOME
Loans receivable:
Taxable	$	87,002		$	85,105		$	90,138		$	84,162		$	87,312
Tax-exempt	5,545			5,339			5,414			5,395			5,359
Investment securities:
Taxable	7,440			6,695			5,263			5,399			6,147
Tax-exempt	13,071			12,385			12,056			10,931			10,019

Deposits with financial institutions	129			114			139			90			134
Federal Home Loan Bank stock	88			178			214			248			281
Total Interest Income	113,275			109,816			113,224			106,225			109,252
INTEREST EXPENSE
Deposits	5,823			6,200			7,509			9,776			12,707
Federal funds purchased	2			2			2			5			2
Securities sold under repurchase agreements	75			87			77			83			92
Federal Home Loan Bank advances	1,452			1,442			1,656			1,749			1,794
Subordinated debentures and other borrowings	1,659			1,657			1,669			1,691			1,639
Total Interest Expense	9,011			9,388			10,913			13,304			16,234
NET INTEREST INCOME	104,264			100,428			102,311			92,921			93,018
Provision for credit losses - loans	—			—			4,482			12,544			21,895
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	104,264			100,428			97,829			80,377			71,123
OTHER INCOME
Service charges on deposit accounts	5,596			5,264			5,508			5,209			4,312
Fiduciary and wealth management fees	7,510			6,422			6,251			5,910			5,601
Card payment fees	4,159			4,367			3,502			3,996			6,097
Net gains and fees on sales of loans	8,325			3,986			5,393			5,841			3,674
Derivative hedge fees	943			317			2,281			1,715			1,042
Other customer fees	368			368			394			372			333
Earnings on cash surrender value of life insurance	1,205			1,336			1,283			1,171			1,326
Net realized gains on sales of available for sale securities	1,761			1,799			2,398			1,817			3,068
Other income	1,017			232			473			132			1,028
Total Other Income	30,884			24,091			27,483			26,163			26,481
OTHER EXPENSES
Salaries and employee benefits	42,438			38,811			41,809			39,187			35,698
Net occupancy	5,615			6,491			9,653			5,855			5,447
Equipment	4,848			5,030			5,555			4,956			4,489
Marketing	1,122			1,124			1,763			1,311			2,092
Outside data processing fees	4,698			4,244			3,839			3,776			2,618
Printing and office supplies	313			283			307			331			279
Intangible asset amortization	1,464			1,357			1,476			1,486			1,511
FDIC assessments	1,461			1,368			1,560			1,249			1,472
Other real estate owned and foreclosure expenses	178			734			(1,576)			717			684
Professional and other outside services	2,976			2,543			2,836			2,254			1,553
Other expenses	4,182			4,113			5,314			3,587			4,146
Total Other Expenses	69,295			66,098			72,536			64,709			59,989
INCOME BEFORE INCOME TAX	65,853			58,421			52,776			41,831			37,615
Income tax expense	10,294			8,952			7,641			5,621			4,623
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	55,559		$	49,469		$	45,135		$	36,210		$	32,992

Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.03		$	0.92		$	0.83		$	0.67		$	0.62
Diluted Net Income Available to Common Stockholders	$	1.03		$	0.91		$	0.83		$	0.67		$	0.62
Cash Dividends Paid	$	0.29		$	0.26		$	0.26		$	0.26		$	0.26
Average Diluted Shares Outstanding (in thousands)	54,184			54,134			54,050			53,971			53,943
FINANCIAL RATIOS:
Return on Average Assets	1.51		%	1.39		%	1.29		%	1.06		%	0.97		%
Return on Average Stockholders' Equity	12.04			10.75			9.72			7.91			7.35
Return on Average Common Stockholders' Equity	12.04			10.75			9.72			7.91			7.35
Average Earning Assets to Average Assets	91.87			91.43			90.66			90.34			89.25
Allowance for Credit Losses - Loans as % of Total Loans	2.19			2.16			1.41			1.37			1.30
Net Charge-offs as % of Average Loans (Annualized)	0.06			0.16			0.02			0.30			0.01
Average Stockholders' Equity to Average Assets	12.51			12.92			13.29			13.41			13.15
Tax Equivalent Yield on Average Earning Assets	3.49			3.52			3.72			3.58			3.72
Interest Expense/Average Earning Assets	0.27			0.29			0.34			0.43			0.53
Net Interest Margin (FTE) on Average Earning Assets	3.22			3.23			3.38			3.15			3.19
Efficiency Ratio	48.91			50.23			55.01			51.40			47.95
Tangible Common Book Value Per Share	$	24.15		$	22.98		$	24.27		$	23.48		$	23.04


LOANS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2021		2021		2020		2020		2020
Commercial and industrial loans	$	2,671,076	$	2,876,212	$	2,776,699	$	2,875,331	$	2,898,329
Agricultural land, production and other loans to farmers	235,020		245,631		281,884		301,192		316,815
Real estate loans:
Construction	491,200		541,224		484,723		622,084		640,560
Commercial real estate, non-owner occupied	2,263,497		2,178,832		2,220,949		2,098,589		2,097,767
Commercial real estate, owner occupied	953,501		950,038		958,501		931,815		919,254
Residential	1,127,442		1,239,925		1,234,741		1,146,406		1,145,187
Home equity	489,997		482,229		508,259		527,458		532,314
Individuals' loans for household and other personal expenditures	130,819		126,387		129,479		125,411		123,611
Public finance and other commercial loans	758,698		677,750		647,939		615,547		624,704
Loans	9,121,250		9,318,228		9,243,174		9,243,833		9,298,541
Allowance for credit losses - loans	(199,775)		(201,082)		(130,648)		(126,726)		(121,119)
NET LOANS	$	8,921,475	$	9,117,146	$	9,112,526	$	9,117,107	$	9,177,422


DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2021		2021		2020		2020		2020
Demand deposits	$	7,261,603	$	7,245,850	$	6,821,152	$	6,279,554	$	6,288,360
Savings deposits	4,157,552		3,857,624		3,661,713		3,518,286		3,278,156
Certificates and other time deposits of $100,000 or more	304,394		332,745		346,194		467,610		607,474
Other certificates and time deposits	423,922		449,655		459,168		542,919		669,119
Brokered deposits	55,929		65,906		73,383		97,784		122,879
TOTAL DEPOSITS	$	12,203,400	$	11,951,780	$	11,361,610	$	10,906,153	$	10,965,988


CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2021						June 30, 2020
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	545,752	$	129	0.09	%	$	378,489	$	134	0.14	%
Federal Home Loan Bank stock	28,736		88		1.22		28,736		281		3.91
Investment Securities: (1)
Taxable	1,732,367		7,440		1.72		1,282,080		6,147		1.92
Tax-Exempt (2)	1,969,577		16,546		3.36		1,317,527		12,682		3.85
Total Investment Securities	3,701,944		23,986		2.59		2,599,607		18,829		2.90
Loans held for sale	25,039		237		3.79		12,630		131		4.15
Loans: (3)
Commercial	6,953,227		70,886		4.08		6,890,010		69,463		4.03
Real Estate Mortgage	912,662		9,488		4.16		887,257		10,122		4.56
Installment	659,515		6,391		3.88		724,165		7,596		4.20
Tax-Exempt (2)	732,081		7,019		3.84		666,548		6,784		4.07
Total Loans	9,282,524		94,021		4.05		9,180,610		94,096		4.10
Total Earning Assets	13,558,956		118,224		3.49	%	12,187,442		113,340		3.72	%
Net unrealized gain (loss) on securities available for sale	44,250						56,807
Allowance for credit losses	(201,051)						(106,858)
Cash and cash equivalents	171,489						303,491
Premises and equipment	107,369						113,528
Other assets	1,077,584						1,100,912
Total Assets	$	14,758,597					$	13,655,322
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	4,745,181	$	3,560	0.30	%	$	3,951,819	$	4,186	0.42	%
Money market deposits	2,337,143		796		0.14		1,673,104		1,696		0.41
Savings deposits	1,740,233		462		0.11		1,521,312		596		0.16
Certificates and other time deposits	812,370		1,005		0.49		1,498,002		6,229		1.66
Total Interest-bearing Deposits	9,634,927		5,823		0.24		8,644,237		12,707		0.59
Borrowings	644,702		3,188		1.98		909,258		3,527		1.55
Total Interest-bearing Liabilities	10,279,629		9,011		0.35		9,553,495		16,234		0.68
Noninterest-bearing deposits	2,490,226						2,145,672
Other liabilities	142,705						160,646
Total Liabilities	12,912,560						11,859,813
Stockholders' Equity	1,846,037						1,795,509
Total Liabilities and Stockholders' Equity	$	14,758,597	9,011				$	13,655,322	16,234
Net Interest Income (FTE)			$	109,213					$	97,106
Net Interest Spread (FTE) (4)					3.14	%					3.04	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.49	%					3.72	%
Interest Expense / Average Earning Assets					0.27	%					0.53	%
Net Interest Margin (FTE) (5)					3.22	%					3.19	%

(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2021 and 2020. These totals equal $4,949 and $4,088 for the three months ended June 30, 2021 and 2020, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.



CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Six Months Ended
	June 30, 2021						June 30, 2020
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	493,791	$	243	0.10	%	$	269,174	$	709	0.53	%
Federal Home Loan Bank stock	28,736		266		1.85		28,736		580		4.04
Investment Securities: (1)
Taxable	1,613,847		14,135		1.75		1,325,313		13,778		2.08
Tax-Exempt (2)	1,896,643		32,223		3.40		1,263,122		24,499		3.88
Total Investment Securities	3,510,490		46,358		2.64		2,588,435		38,277		2.96
Loans held for sale	20,572		393		3.82		14,924		324		4.34
Loans: (3)
Commercial	6,915,234		140,060		4.05		6,562,673		146,415		4.46
Real Estate Mortgage	943,830		18,774		3.98		878,956		20,524		4.67
Installment	666,870		12,880		3.86		741,889		16,701		4.50
Tax-Exempt (2)	713,094		13,777		3.86		655,149		13,511		4.12
Total Loans	9,259,600		185,884		4.01		8,853,591		197,475		4.46
Total Earning Assets	13,292,617		232,751		3.51	%	11,739,936		237,041		4.04	%
Net unrealized gain on securities available for sale	49,922						52,732
Allowance for credit losses	(202,693)						(94,009)
Cash and cash equivalents	168,647						231,624
Premises and equipment	109,170						113,670
Other assets	1,085,424						1,070,327
Total Assets	$	14,503,087					$	13,114,280
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	4,681,439	$	7,269	0.31	%	$	3,770,530	$	12,461	0.66	%
Money market deposits	2,212,425		1,631		0.15		1,604,474		5,479		0.68
Savings deposits	1,700,601		938		0.11		1,473,183		2,424		0.33
Certificates and other time deposits	835,722		2,185		0.52		1,582,322		14,091		1.78
Total Interest-bearing Deposits	9,430,187		12,023		0.25		8,430,509		34,455		0.82
Borrowings	659,826		6,376		1.93		828,721		7,709		1.86
Total Interest-bearing Liabilities	10,090,013		18,399		0.36		9,259,230		42,164		0.91
Noninterest-bearing deposits	2,417,888						1,907,582
Other liabilities	151,936						141,505
Total Liabilities	12,659,837						11,308,317
Stockholders' Equity	1,843,250						1,805,963
Total Liabilities and Stockholders' Equity	$	14,503,087	18,399				$	13,114,280	42,164
Net Interest Income (FTE)			$	214,352					$	194,877
Net Interest Spread (FTE) (4)					3.15	%					3.13	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.51	%					4.04	%
Interest Expense / Average Earning Assets					0.28	%					0.72	%
Net Interest Margin (FTE) (5)					3.23	%					3.32	%

(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2021 and 2020. These totals equal $9,660 and $7,982 for the six months ended June 30, 2021 and 2020, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.