SEC Filing | First Merchants Corporation

View:

Download DOC

Download PDF

Download XLS

f8k2ndqtr2013earningsrelease

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 25, 2013

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)

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:

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

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

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

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

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 25, 2013 First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2013. 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.

Exhibit 99.1 Press Release, dated July 25, 2013, issued by First Merchants Corporation

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/ Mark K. Hardwick

Mark K. Hardwick

Executive Vice President and Chief Financial Officer

(Principal Financial and Principal Accounting Officer)

Dated: July 25, 2013

EXHIBIT INDEX

Exhibit No. Description


99.1	Press Release, dated July 25, 2013, issued by First Merchants Corporation

2nd Quarter 2013 Earnings Release

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

July 25, 2013

FOR IMMEDIATE RELEASE

For more information, contact:

David L. Ortega, First Vice President/Director of Investor Relations

765-378-8937

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES IMPROVED SECOND QUARTER 2013 EARNINGS

First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2013 earnings per share of $0.34 compared to $0.28 during the same period in 2012. Net income available to common stockholders increased by $1.9 million totaling $10.0 million compared to $8.1 million during the same period in 2012. Year-to-date earnings per share totaled $0.72 compared to core earnings of $0.53 in the first half of 2012. Reported earnings for the first half of 2012 totaled $0.74 as the Corporation recorded a gain on its FDIC purchase of SCB Bank in Shelbyville, Indiana of $0.21 per share in the first quarter of 2012.

Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants continues to maintain earnings momentum despite modest margin compression. Loan volume growth is steady, all credit related metrics, including non-accrual assets, continue to show improvement and core net income is progressively better quarter-after-quarter. The quality of First Merchants credit statistics when combined with our earnings strength has allowed us to improve our capital structure as evidenced by the July redemption of $34.0 million in SBLF preferred stock.”

Total assets equaled $4.3 billion as of quarter-end and loans were $2.9 billion, an increase of $122.4 million or 4.4 percent over the same period in 2012. The Corporation's commercial and industrial loans and commercial real estate loans increased by $105.4 million and $53.6 million, respectively. Residential real estate loans declined by $20.8 million during the same period as the Corporation continues to focus this line of business on fee for service mortgage loans. The Corporation's loan-to-deposit ratio is 87.6 percent and the loan-to-asset ratio is 67.3 percent.

Net-interest income totaled $36.7 million for the quarter as net-interest margin totaled 3.88 percent. Yields on earning assets totaled 4.29 percent and the cost of supporting liabilities totaled 0.41 percent. Net-interest income totaled $38.1 million during the same quarter in 2012 as net interest margin totaled 4.11 percent. Of the $1.4 million reduction in net interest income, $314,000 was related to a reduction in fair value accounting in 2013. Year-to-date net-interest income totaled $76.1 million compared to $74.2 million during the first half of 2012. The $2.5 million interest recapture recognized in the first quarter of 2013 accounted for all of the increase.

Provision expense totaled $2.0 million for the second quarter of 2013, compared to $4.5 million in 2012. Net charge-offs totaled $2.3 million for the second quarter, down from $4.8 million in the second quarter of 2012. Due to the adequacy of the allowance for loan losses, year-to-date provision expense totaled $4.1 million versus $5.3 million of net charge-off's. The allowance for loan losses totaled $68.2 million, or 2.32 percent of total loans and 175 percent of non-accrual loans. Non-performing assets declined by $26.1 million, or 32.1 percent year-over-year, and now total $55.1 million.

Non-interest income totaled $14.1 million for the quarter, an increase over the second quarter 2012 total of $13.2 million. Year-to-date non-interest income totaled $27.9 million compared to $35.8 in 2012, which included a $9.1 million gain on the FDIC modified whole bank transaction in the first quarter of 2012. Non-interest expense totaled $33.7 million for the quarter, down $438,000 from the second quarter of 2012. Year-to-date non-interest expense totaled $68.4 million up just one third of a percent from the first half of 2012.

As of June 30, 2013, the Corporation's total risk-based capital equaled 15.69 percent, Tier 1 common risk-based capital equaled 10.13 percent, and tangible common equity ratio totaled 7.74 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, July 25, 2013.

To participate, dial (Toll Free) 888-317-6016 and reference First Merchants Corporation's second quarter earnings release. International callers please call +1 412-317-6016. A replay of the call will be available until July 25, 2014. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 10030162.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme130725.html during the time of the call.

During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

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 is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, Commerce National Bank, and First Merchants Trust Company as divisions of First Merchants Bank, N.A. First Merchants Corporation also operates First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.

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).

* * * *



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,
	2013			2012
ASSETS
Cash and cash equivalents	$	69,404		$	68,493
Interest-bearing time deposits	59,898			41,760
Investment securities	908,992			944,321
Mortgage loans held for sale	14,531			15,278
Loans	2,920,080			2,797,634
Less: Allowance for loan losses	(68,202		)	(70,143		)
Net loans	2,851,878			2,727,491
Premises and equipment	54,165			51,335
Federal Reserve and Federal Home Loan Bank stock	32,790			33,033
Interest receivable	15,186			16,506
Core deposit intangibles and goodwill	148,759			150,006
Cash surrender value of life insurance	126,710			124,018
Other real estate owned	11,765			14,183
Tax asset, deferred and receivable	30,959			32,003
Other assets	13,227			13,996
TOTAL ASSETS	$	4,338,264		$	4,232,423
LIABILITIES
Deposits:
Noninterest-bearing	$	741,095		$	684,101
Interest-bearing	2,591,698			2,604,797
Total Deposits	3,332,793			3,288,898
Borrowings:
Federal funds purchased	57,085			652
Securities sold under repurchase agreements	161,779			160,127
Federal Home Loan Bank advances	92,743			96,847
Subordinated debentures and term loans	111,778			115,951
Total Borrowings	423,385			373,577
Interest payable	1,150			2,168
Other liabilities	41,643			32,104
Total Liabilities	3,798,971			3,696,747
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding - 68,087 and 90,782.94 shares	68,087			90,783
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 -- 50,000,000 shares
Issued and outstanding - 28,801,848 and 28,643,264 shares	3,600			3,580
Additional paid-in capital	257,626			255,632
Retained earnings	225,034			188,863
Accumulated other comprehensive loss	(15,179		)	(3,307		)
Total Stockholders' Equity	539,293			535,676
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,338,264		$	4,232,423



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended						Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,						June 30,
	2013			2012			2013			2012
INTEREST INCOME
Loans receivable:
Taxable	$	34,018		$	36,652		$	71,177		$	72,500
Tax-exempt	113			123			230			240
Investment securities:
Taxable	3,577			4,468			7,195			9,042
Tax-exempt	2,515			2,551			4,969			5,113
Deposits with financial institutions	62			28			81			53
Federal Reserve and Federal Home Loan Bank stock	368			347			739			690
Total Interest Income	40,653			44,169			84,391			87,638
INTEREST EXPENSE
Deposits	2,599			3,939			5,490			8,049
Federal funds purchased	1			12			12			24
Securities sold under repurchase agreements	208			197			402			492
Federal Home Loan Bank advances	462			637			921			1,631
Subordinated debentures and term loans	733			1,331			1,458			3,273
Total Interest Expense	4,003			6,116			8,283			13,469
NET INTEREST INCOME	36,650			38,053			76,108			74,169
Provision for loan losses	1,997			4,545			4,099			9,420
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	34,653			33,508			72,009			64,749
OTHER INCOME
Service charges on deposit accounts	2,912			2,893			5,641			5,712
Fiduciary activities	2,264			1,938			4,371			3,921
Other customer fees	2,816			3,150			5,596			5,736
Commission income	1,748			1,485			3,920			3,152
Earnings on cash surrender value of life insurance	610			662			1,310			2,040
Net gains and fees on sales of loans	2,457			2,314			4,835			4,266
Net realized gains on sales of available for sale securities	239			502			487			1,291
Gain on FDIC modified whole bank transaction										9,124
Other income	1,013			221			1,776			581
Total Other Income	14,059			13,165			27,936			35,823
OTHER EXPENSES
Salaries and employee benefits	20,536			19,641			41,327			38,995
Net occupancy	2,267			2,473			4,869			5,124
Equipment	1,742			1,656			3,516			3,461
Marketing	535			564			1,002			1,006
Outside data processing fees	1,391			1,506			2,871			2,882
Printing and office supplies	311			294			642			561
Core deposit amortization	383			480			770			949
FDIC assessments	674			862			1,418			1,979
Other real estate owned and credit-related expenses	1,479			2,122			3,345			4,308
Other expenses	4,424			4,582			8,682			8,943
Total Other Expenses	33,742			34,180			68,442			68,208
INCOME BEFORE INCOME TAX	14,970			12,493			31,503			32,364
Income tax expense	4,155			3,288			8,823			8,788
NET INCOME	10,815			9,205			22,680			23,576
Preferred stock dividends	(852		)	(1,135		)	(1,709		)	(2,270		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	9,963		$	8,070		$	20,971		$	21,306
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.35		$	0.28		$	0.73		$	0.74
Diluted Net Income Available to Common Stockholders	$	0.34		$	0.28		$	0.72		$	0.74
Cash Dividends Paid	$	0.05		$	0.03		$	0.08		$	0.04
Average Diluted Shares Outstanding (in thousands)	29,024			28,815			28,997			28,782



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
NET CHARGE OFF'S	$	2,332		$	4,771		$	5,263		$	10,175

AVERAGE BALANCES:
Total Assets	$	4,329,579		$	4,249,931		$	4,289,490		$	4,226,443
Total Loans	2,909,688			2,801,375			2,909,901			2,782,631
Total Earning Assets	3,922,303			3,837,738			3,883,239			3,813,587
Total Deposits	3,385,922			3,318,065			3,351,508			3,240,748
Total Stockholders' Equity	542,921			531,578			538,384			524,676

FINANCIAL RATIOS:
Return on Average Assets	0.92		%	0.76		%	0.98		%	1.01		%
Return on Average Stockholders' Equity	7.34			6.07			7.79			8.12
Return on Average Common Stockholders' Equity	8.40			7.32			8.93			9.82
Average Earning Assets to Average Assets	90.59			90.30			90.53			90.23
Allowance for Loan Losses as % of Total Loans	2.32			2.49			2.32			2.49
Net Charge Off's as % of Average Loans (Annualized)	0.32			0.68			0.36			0.73
Average Stockholders' Equity to Average Assets	12.54			12.51			12.55			12.41
Tax Equivalent Yield on Earning Assets	4.29			4.75			4.49			4.75
Cost of Supporting Liabilities	0.41			0.64			0.43			0.71
Net Interest Margin (FTE) on Earning Assets	3.88			4.11			4.06			4.04



NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2013			2013			2012			2012			2012
Non-Accrual Loans	$	38,971		$	46,761		$	53,399		$	56,999		$	63,127
Renegotiated Loans	4,407			5,445			12,681			6,871			3,921
Non-Performing Loans (NPL)	43,378			52,206			66,080			63,870			67,048
Other Real Estate Owned	11,765			13,130			13,263			13,780			14,183
Non-Performing Assets (NPA)	55,143			65,336			79,343			77,650			81,231
90+ Days Delinquent	1,072			959			2,037			1,974			665
NPAS & 90 Day Delinquent	$	56,215		$	66,295		$	81,380		$	79,624		$	81,896

Loan Loss Reserve	$	68,202		$	68,537		$	69,366		$	69,493		$	70,143
Quarterly Net Charge-offs	2,332			2,931			4,632			5,259			4,771
NPAs / Actual Assets %	1.27		%	1.54		%	1.84		%	1.83		%	1.92		%
NPAs & 90 Day / Actual Assets %	1.30		%	1.56		%	1.89		%	1.87		%	1.93		%
NPAs / Actual Loans and REO %	1.87		%	2.24		%	2.70		%	2.70		%	2.87		%
Loan Loss Reserves / Actual Loans (%)	2.32		%	2.36		%	2.37		%	2.43		%	2.49		%
Net Charge Off's as % of Average Loans (Annualized)	0.32		%	0.40		%	0.65		%	0.74		%	0.68		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2013			2013			2012			2012			2012
ASSETS
Cash and cash equivalents	$	69,404		$	51,592		$	101,460		$	57,027		$	68,493
Interest-bearing time deposits	59,898			60,407			38,443			35,324			41,760
Investment securities	908,992			869,563			874,363			928,716			944,321
Mortgage loans held for sale	14,531			26,555			22,300			27,711			15,278
Loans	2,920,080			2,879,542			2,902,209			2,836,324			2,797,634
Less: Allowance for loan losses	(68,202		)	(68,537		)	(69,366		)	(69,493		)	(70,143		)
Net loans	2,851,878			2,811,005			2,832,843			2,766,831			2,727,491
Premises and equipment	54,165			53,762			52,749			51,373			51,335
Federal Reserve and Federal Home Loan Bank stock	32,790			32,777			32,785			32,824			33,033
Interest receivable	15,186			15,346			16,367			17,519			16,506
Core deposit intangibles and goodwill	148,759			149,142			149,529			150,019			150,006
Cash surrender value of life insurance	126,710			126,098			125,397			124,702			124,018
Other real estate owned	11,765			13,130			13,263			13,780			14,183
Tax asset, deferred and receivable	30,959			27,597			30,867			29,344			32,003
Other assets	13,227			15,856			14,455			14,998			13,996
TOTAL ASSETS	$	4,338,264		$	4,252,830		$	4,304,821		$	4,250,168		$	4,232,423
LIABILITIES
Deposits:
Noninterest-bearing	741,095			763,965			$	801,597		$	679,818		$	684,101
Interest-bearing	2,591,698			2,546,843			2,544,786			2,514,933			2,604,797
Total Deposits	3,332,793			3,310,808			3,346,383			3,194,751			3,288,898
Borrowings:
Federal funds purchased	57,085						18,862			57,024			652
Securities sold under repurchase agreements	161,779			161,813			141,828			153,454			160,127
Federal Home Loan Bank advances	92,743			93,169			94,238			145,467			96,847
Subordinated debentures and term loans	111,778			111,778			112,161			112,169			115,951
Total Borrowings	423,385			366,760			367,089			468,114			373,577
Interest payable	1,150			1,348			1,841			1,591			2,168
Other liabilities	41,643			35,356			37,272			38,857			32,104
Total Liabilities	3,798,971			3,714,272			3,752,585			3,703,313			3,696,747
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding	68,087			68,087			90,783			90,783			90,783
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 -- 50,000,000 shares
Issued and outstanding	3,600			3,598			3,587			3,584			3,580
Additional paid-in capital	257,626			256,966			256,843			256,290			255,632
Retained earnings	225,034			216,530			206,397			198,094			188,863
Accumulated other comprehensive loss	(15,179		)	(6,748		)	(5,499		)	(2,021		)	(3,307		)
Total Stockholders' Equity	539,293			538,558			552,236			546,855			535,676
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,338,264		$	4,252,830		$	4,304,821		$	4,250,168		$	4,232,423



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2013			2013			2012			2012			2012
INTEREST INCOME
Loans receivable:
Taxable	$	34,018		$	37,159		$	36,085		$	38,160		$	36,652
Tax-exempt	113			117			122			118			123
Investment securities:
Taxable	3,577			3,618			3,809			4,176			4,468
Tax-exempt	2,515			2,454			2,544			2,532			2,551
Deposits with financial institutions	62			19			31			16			28
Federal Reserve and Federal Home Loan Bank stock	368			371			373			345			347
Total Interest Income	40,653			43,738			42,964			45,347			44,169
INTEREST EXPENSE
Deposits	2,599			2,891			3,234			3,517			3,939
Federal funds purchased	1			11			7			38			12
Securities sold under repurchase agreements	208			194			204			211			197
Federal Home Loan Bank advances	462			459			501			492			637
Subordinated debentures and term loans	733			725			753			1,187			1,331
Total Interest Expense	4,003			4,280			4,699			5,445			6,116
NET INTEREST INCOME	36,650			39,458			38,265			39,902			38,053
Provision for loan losses	1,997			2,102			4,505			4,609			4,545
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	34,653			37,356			33,760			35,293			33,508
OTHER INCOME
Service charges on deposit accounts	2,912			2,729			2,962			2,913			2,893
Fiduciary activities	2,264			2,107			1,984			1,986			1,938
Other customer fees	2,816			2,780			2,757			2,740			3,150
Commission income	1,748			2,172			1,454			1,618			1,485
Earnings on cash surrender value of life insurance	610			700			693			685			662
Net gains and fees on sales of loans	2,457			2,378			3,513			2,849			2,314
Net realized gains on sales of available for sale securities	239			248			255			843			502
Other income	1,013			763			588			639			221
Total Other Income	14,059			13,877			14,206			14,273			13,165
OTHER EXPENSES
Salaries and employee benefits	20,536			20,791			20,320			20,083			19,641
Net occupancy	2,267			2,602			2,494			2,568			2,473
Equipment	1,742			1,774			1,942			1,798			1,656
Marketing	535			467			616			536			564
Outside data processing fees	1,391			1,480			1,361			1,413			1,506
Printing and office supplies	311			331			321			287			294
Core deposit amortization	383			387			489			489			480
FDIC assessments	674			744			738			792			862
Other real estate owned and credit-related expenses	1,479			1,866			1,766			2,104			2,122
Other expenses	4,424			4,258			4,456			4,334			4,582
Total Other Expenses	33,742			34,700			34,503			34,404			34,180
INCOME BEFORE INCOME TAX	14,970			16,533			13,463			15,162			12,493
Income tax expense	4,155			4,668			3,153			3,926			3,288
NET INCOME	10,815			11,865			10,310			11,236			9,205
Preferred stock dividends	(852		)	(857		)	(1,135		)	(1,134		)	(1,135		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	9,963		$	11,008		$	9,175		$	10,102		$	8,070

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.35		$	0.38		$	0.32		$	0.35		$	0.29
Diluted Net Income Available to Common Stockholders	$	0.34		$	0.38		$	0.32		$	0.35		$	0.28
Cash Dividends Paid	$	0.05		$	0.03		$	0.03		$	0.03		$	0.03
Average Diluted Shares Outstanding (in thousands)	29,024			28,971			28,930			28,888			28,815
FINANCIAL RATIOS:
Return on Average Assets	0.92		%	1.04		%	0.85		%	0.95		%	0.76		%
Return on Average Stockholders' Equity	7.34			8.25			6.66			7.47			6.07
Return on Average Common Stockholders' Equity	8.40			9.47			7.97			8.98			7.32
Average Earning Assets to Average Assets	90.59			90.46			90.28			90.36			90.30
Allowance for Loan Losses as % of Total Loans	2.32			2.36			2.37			2.43			2.49
Net Charge Off's as % of Average Loans (Annualized)	0.32			0.40			0.65			0.74			0.68
Average Stockholders' Equity to Average Assets	12.54			12.56			12.84			12.77			12.51
Tax Equivalent Yield on Earning Assets	4.29			4.70			4.58			4.89			4.75
Cost of Supporting Liabilities	0.41			0.45			0.48			0.57			0.64
Net Interest Margin (FTE) on Earning Assets	3.88			4.25			4.10			4.32			4.11



LOANS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2013			2013			2012			2012			2012
Commercial and industrial loans	$	657,764		$	637,952		$	622,579		$	592,517		$	552,353
Agricultural production financing and other loans to farmers	105,175			104,284			112,527			107,166			106,135
Real estate loans:
Construction	101,909			75,877			98,639			93,610			99,588
Commercial and farmland	1,272,761			1,280,611			1,266,682			1,241,054			1,219,114
Residential	460,108			467,629			473,537			475,272			480,917
Home Equity	203,788			201,767			203,406			204,888			207,250
Individuals' loans for household and other personal expenditures	79,258			73,314			75,748			77,171			83,933
Lease financing receivables, net of unearned income	1,828			2,013			2,590			2,970			2,976
Other loans	37,489			36,095			46,501			41,676			45,368
Loans	2,920,080			2,879,542			2,902,209			2,836,324			2,797,634
Allowance for loan losses	(68,202		)	(68,537		)	(69,366		)	(69,493		)	(70,143		)
NET LOANS	$	2,851,878		$	2,811,005		$	2,832,843		$	2,766,831		$	2,727,491



DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2013		2013		2012		2012		2012
Demand deposits	$	1,648,712	$	1,590,709	$	1,646,756	$	1,455,568	$	1,521,194
Savings deposits	916,481		891,061		831,952		837,409		822,299
Certificates and other time deposits of $100,000 or more	205,467		224,505		236,470		256,077		261,156
Other certificates and time deposits	448,885		481,446		502,927		527,304		546,182
Brokered deposits	113,248		123,087		128,278		118,393		138,067
TOTAL DEPOSITS	$	3,332,793	$	3,310,808	$	3,346,383	$	3,194,751	$	3,288,898