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f8k2ndqtr2014earningsrelease

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 24, 2014

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 24, 2014 First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2014. 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 24, 2014, 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 24, 2014

EXHIBIT INDEX


Exhibit No.	Description


99.1	Press Release, dated July 24, 2014, issued by First Merchants Corporation

2nd Quarter 2014 Earnings Release

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

July 24, 2014

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 SECOND QUARTER 2014 EARNINGS PER SHARE INCREASE OF NEARLY 21 PERCENT AS RETURN ON ASSETS TOTALED 1.10 PERCENT

First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2014 net income of $15.2 million, compared to $10 million during the same period in 2013. Earnings per share for the period totaled $.41 per share an increase of nearly 21 percent over $.34 per share earned in the second quarter of 2013. Year-to-date net income totaled $28.8 million, compared to $21 million in 2013. Earnings per share totaled $.79 per share through six months of 2014 compared to $.72 in 2013.

Total assets equaled $5.6 billion as of quarter-end and loans were $3.7 billion. The Corporation’s loan portfolio increased, by $803 million, over the past twelve months. Of the increase, $206 million was the result of organic growth and $597 million resulted from the acquisition of CFS Bancorp in November of 2013. The Corporation’s loan-to-deposit ratio is 86 percent and the loan-to-asset ratio is 66 percent.

Michael C. Rechin, President and Chief Executive Officer, stated, “Second quarter 2014 results were in line with our expectations and include the successful realization of our projected cost savings related to our Citizens integration.” Rechin also added, “Management was pleased by organic loan growth throughout our franchise and optimistic about the acceleration the recently announced Community Bank of Noblesville merger will add to our Hamilton county business and the greater Indianapolis MSA .”

Net-interest income totaled $46.1 million for the quarter, and net-interest margin remained strong during the quarter totaling 3.89 percent, as yields on earning assets totaled 4.33 percent and the cost of supporting liabilities totaled .44 percent.

Non-interest income totaled $15.9 million for the quarter, an increase from the second quarter of 2013 total of $14.1 million. Gains on sale of mortgage loans, during the quarter, declined by $1.3 million from the second quarter of 2013. Non-interest expense totaled $41.3 million for the quarter an improvement over the first quarter of 2014 of $1.8 million. When adjusted for other real estate owned expenses, core expenses declined on a linked quarter-over-quarter basis by $2.7 million.

The Corporation did not make a provision to the allowance for loan losses during the quarter due to improvements in non-accrual loan totals as well as criticized and classified loans. The allowance for loan losses totaled $68.4 million, or 1.83 percent of total loans and 133 percent of non-accrual loans. Non-performing assets have declined by $10.4 million since the close of our Citizens acquisition at year-end and now total $71.3 million.

As of June 30, 2014, the Corporation’s total risk-based capital equaled 15.11 percent, Tier 1 common risk-based capital equaled 11.00 percent, and tangible common equity ratio totaled 8.74 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 24, 2014.

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 July 24, 2015. 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 10048248.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme140724.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).

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

* * * *



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,
	2014			2013
ASSETS
Cash and cash equivalents	$	115,891		$	69,404
Interest-bearing time deposits	27,856			59,898
Investment securities	1,214,087			908,992
Mortgage loans held for sale	7,370			14,531
Loans	3,722,733			2,920,080
Less: Allowance for loan losses	(68,367		)	(68,202		)
Net loans	3,654,366			2,851,878
Premises and equipment	74,856			54,165
Federal Reserve and Federal Home Loan Bank stock	43,127			32,790
Interest receivable	18,341			15,186
Core deposit intangibles and goodwill	201,583			148,759
Cash surrender value of life insurance	165,974			126,710
Other real estate owned	18,621			11,765
Tax asset, deferred and receivable	44,622			30,959
Other assets	28,426			13,227
TOTAL ASSETS	$	5,615,120		$	4,338,264
LIABILITIES
Deposits:
Noninterest-bearing	$	917,825		$	741,095
Interest-bearing	3,411,785			2,591,698
Total Deposits	4,329,610			3,332,793
Borrowings:
Federal funds purchased	100,000			57,085
Securities sold under repurchase agreements	133,137			161,779
Federal Home Loan Bank advances	220,765			92,743
Subordinated debentures and term loans	126,874			111,778
Total Borrowings	580,776			423,385
Interest payable	2,489			1,150
Other liabilities	31,649			41,643
Total Liabilities	4,944,524			3,798,971
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 - 0 and 68,087 shares				68,087
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 - 36,052,209 and 28,801,848 shares	4,507			3,600
Additional paid-in capital	394,774			257,626
Retained earnings	266,980			225,034
Accumulated other comprehensive income (loss)	4,210			(15,179		)
Total Stockholders' Equity	670,596			539,293
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,615,120		$	4,338,264



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended					Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,					June 30,
	2014		2013			2014		2013
INTEREST INCOME
Loans receivable:
Taxable	$	42,323	$	34,018		$	84,348	$	71,177
Tax-exempt	58		113			119		230
Investment securities:
Taxable	5,046		3,577			9,856		7,195
Tax-exempt	3,570		2,515			7,008		4,969
Deposits with financial institutions	35		62			58		81
Federal Reserve and Federal Home Loan Bank stock	495		368			1,147		739
Total Interest Income	51,527		40,653			102,536		84,391
INTEREST EXPENSE
Deposits	2,874		2,599			5,423		5,490
Federal funds purchased	23		1			72		12
Securities sold under repurchase agreements	187		208			383		402
Federal Home Loan Bank advances	676		462			1,358		921
Subordinated debentures and term loans	1,648		733			3,289		1,458
Total Interest Expense	5,408		4,003			10,525		8,283
NET INTEREST INCOME	46,119		36,650			92,011		76,108
Provision for loan losses			1,997					4,099
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	46,119		34,653			92,011		72,009
OTHER INCOME
Service charges on deposit accounts	4,098		2,912			7,649		5,641
Fiduciary activities	2,360		2,264			4,572		4,371
Other customer fees	4,049		2,816			7,782		5,596
Commission income	1,886		1,748			4,154		3,920
Earnings on cash surrender value of life insurance	653		610			1,401		1,310
Net gains and fees on sales of loans	1,159		2,457			1,882		4,835
Net realized gains on sales of available for sale securities	844		239			1,425		487
Other income	884		1,013			2,254		1,776
Total Other Income	15,933		14,059			31,119		27,936
OTHER EXPENSES
Salaries and employee benefits	23,430		20,536			48,731		41,327
Net occupancy	3,204		2,267			7,142		4,869
Equipment	2,096		1,742			4,835		3,516
Marketing	789		535			1,558		1,002
Outside data processing fees	2,039		1,391			3,870		2,871
Printing and office supplies	393		311			851		642
Core deposit amortization	592		383			1,184		770
FDIC assessments	863		674			1,923		1,418
Other real estate owned and credit-related expenses	2,613		1,479			4,370		3,345
Professional and other outside services	1,531		1,833			2,910		3,492
Other expenses	3,700		2,591			6,965		5,190
Total Other Expenses	41,250		33,742			84,339		68,442
INCOME BEFORE INCOME TAX	20,802		14,970			38,791		31,503
Income tax expense	5,642		4,155			10,011		8,823
NET INCOME	15,160		10,815			28,780		22,680
Preferred stock dividends			(852		)			(1,709		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	15,160	$	9,963		$	28,780	$	20,971
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.42	$	0.35		$	0.80	$	0.73
Diluted Net Income Available to Common Stockholders	$	0.41	$	0.34		$	0.79	$	0.72
Cash Dividends Paid	$	0.08	$	0.05		$	0.13	$	0.08
Average Diluted Shares Outstanding (in thousands)	36,294		29,024			36,278		28,997



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
NET CHARGE OFF'S	$	1,216		$	2,332		$	(497	)	$	5,263

AVERAGE BALANCES:
Total Assets	$	5,520,483		$	4,329,579		$	5,460,419		$	4,289,490
Total Loans	3,680,521			2,909,688			3,648,480			2,909,901
Total Earning Assets	4,944,516			3,922,303			4,875,474			3,883,239
Total Deposits	4,365,199			3,385,922			4,290,853			3,351,508
Total Stockholders' Equity	662,643			542,921			653,820			538,384

FINANCIAL RATIOS:
Return on Average Assets	1.10		%	0.92		%	1.05		%	0.98		%
Return on Average Stockholders' Equity	9.15			7.34			8.80			7.79
Return on Average Common Stockholders' Equity	9.15			8.40			8.81			8.93
Average Earning Assets to Average Assets	89.57			90.59			89.29			90.53
Allowance for Loan Losses as % of Total Loans	1.83			2.32			1.83			2.32
Net Charge Off's as % of Average Loans (Annualized)	0.13			0.32			(0.03		)	0.36
Average Stockholders' Equity to Average Assets	12.00			12.54			11.97			12.55
Tax Equivalent Yield on Earning Assets	4.33			4.29			4.36			4.49
Cost of Supporting Liabilities	0.44			0.41			0.43			0.43
Net Interest Margin (FTE) on Earning Assets	3.89			3.88			3.93			4.06
Tangible Book Value Per Share	$	13.14		$	11.27		$	13.14		$	11.27



NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
Non-Accrual Loans	$	51,289		$	55,686		$	56,402		$	34,992		$	38,971
Renegotiated Loans	1,359			378			3,048			3,269			4,407
Non-Performing Loans (NPL)	52,648			56,064			59,450			38,261			43,378
Other Real Estate Owned	18,621			21,077			22,246			12,052			11,765
Non-Performing Assets (NPA)	71,269			77,141			81,696			50,313			55,143
90+ Days Delinquent	1,135			1,709			1,350			837			1,072
NPAS & 90 Day Delinquent	$	72,404		$	78,850		$	83,046		$	51,150		$	56,215

Loan Loss Reserve	$	68,367		$	69,583		$	67,870		$	66,224		$	68,202
Quarterly Net Charge-offs	1,216			(1,713		)	(630		)	3,511			2,332
NPAs / Actual Assets %	1.27		%	1.41		%	1.50		%	1.16		%	1.27		%
NPAs & 90 Day / Actual Assets %	1.29		%	1.45		%	1.53		%	1.18		%	1.30		%
NPAs / Actual Loans and OREO %	1.90		%	2.12		%	2.23		%	1.71		%	1.87		%
Loan Loss Reserves / Actual Loans (%)	1.83		%	1.92		%	1.87		%	2.26		%	2.32		%
Net Charge Off's as % of Average Loans (Annualized)	0.13		%	(0.19		)%	(0.08		)%	0.48		%	0.32		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
ASSETS
Cash and cash equivalents	$	115,891		$	112,920		$	109,434		$	92,341		$	69,404
Interest-bearing time deposits	27,856			37,078			55,069			18,875			59,898
Investment securities	1,214,087			1,149,977			1,095,579			914,135			908,992
Mortgage loans held for sale	7,370			6,586			5,331			5,312			14,531
Loans	3,722,733			3,616,627			3,632,409			2,925,457			2,920,080
Less: Allowance for loan losses	(68,367		)	(69,583		)	(67,870		)	(66,224		)	(68,202		)
Net loans	3,654,366			3,547,044			3,564,539			2,859,233			2,851,878
Premises and equipment	74,856			74,847			74,454			54,386			54,165
Federal Reserve and Federal Home Loan Bank stock	43,127			38,990			38,990			32,790			32,790
Interest receivable	18,341			18,001			18,672			16,171			15,186
Core deposit intangibles and goodwill	201,583			202,175			202,766			148,376			148,759
Cash surrender value of life insurance	165,974			165,320			164,571			127,322			126,710
Other real estate owned	18,621			21,077			22,246			12,052			11,765
Tax asset, deferred and receivable	44,622			50,684			56,614			31,385			30,959
Other assets	28,426			28,237			28,997			13,533			13,227
TOTAL ASSETS	$	5,615,120		$	5,452,936		$	5,437,262		$	4,325,911		$	4,338,264
LIABILITIES
Deposits:
Noninterest-bearing	917,825			936,741			930,772			790,174			741,095
Interest-bearing	3,411,785			3,346,438			3,300,696			2,465,672			2,591,698
Total Deposits	4,329,610			4,283,179			4,231,468			3,255,846			3,332,793
Borrowings:
Federal funds purchased	100,000			48,357			125,645			115,938			57,085
Securities sold under repurchase agreements	133,137			137,381			148,672			123,935			161,779
Federal Home Loan Bank advances	220,765			170,887			122,140			172,292			92,743
Subordinated debentures and term loans	126,874			127,172			126,807			111,849			111,778
Total Borrowings	580,776			483,797			523,264			524,014			423,385
Interest payable	2,489			3,192			1,771			1,155			1,150
Other liabilities	31,649			30,657			45,836			31,427			41,643
Total Liabilities	4,944,524			4,800,825			4,802,339			3,812,442			3,798,971
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										34,043			68,087
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	4,507			4,502			4,490			3,603			3,600
Additional paid-in capital	394,774			393,765			393,783			258,350			257,626
Retained earnings	266,980			254,735			242,935			233,546			225,034
Accumulated other comprehensive income (loss)	4,210			(1,016		)	(6,410		)	(16,198		)	(15,179		)
Total Stockholders' Equity	670,596			652,111			634,923			513,469			539,293
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,615,120		$	5,452,936		$	5,437,262		$	4,325,911		$	4,338,264



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
INTEREST INCOME
Loans receivable:
Taxable	$	42,323		$	42,025		$	38,027		$	33,548		$	34,018
Tax-exempt	58			61			78			85			113
Investment securities:
Taxable	5,046			4,810			4,143			3,876			3,577
Tax-exempt	3,570			3,438			3,020			2,840			2,515
Deposits with financial institutions	35			23			59			18			62
Federal Reserve and Federal Home Loan Bank stock	495			652			380			369			368
Total Interest Income	51,527			51,009			45,707			40,736			40,653
INTEREST EXPENSE
Deposits	2,874			2,549			2,350			2,213			2,599
Federal funds purchased	23			49			18			72			1
Securities sold under repurchase agreements	187			196			193			192			208
Federal Home Loan Bank advances	676			682			669			506			462
Subordinated debentures and term loans	1,648			1,641			1,342			731			733
Total Interest Expense	5,408			5,117			4,572			3,714			4,003
NET INTEREST INCOME	46,119			45,892			41,135			37,022			36,650
Provision for loan losses							1,016			1,533			1,997
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	46,119			45,892			40,119			35,489			34,653
OTHER INCOME
Service charges on deposit accounts	4,098			3,551			3,639			3,120			2,912
Fiduciary activities	2,360			2,212			2,237			1,986			2,264
Other customer fees	4,049			3,733			3,371			2,899			2,816
Commission income	1,886			2,268			1,585			1,636			1,748
Earnings on cash surrender value of life insurance	653			748			692			611			610
Net gains and fees on sales of loans	1,159			723			1,003			1,673			2,457
Net realized gains on sales of available for sale securities	844			581									239
Other income	884			1,370			2,546			(125		)	1,013
Total Other Income	15,933			15,186			15,073			11,800			14,059
OTHER EXPENSES
Salaries and employee benefits	23,430			25,301			23,470			20,616			20,536
Net occupancy	3,204			3,938			2,992			2,430			2,267
Equipment	2,096			2,739			2,369			1,852			1,742
Marketing	789			769			675			559			535
Outside data processing fees	2,039			1,831			1,205			1,515			1,391
Printing and office supplies	393			458			378			320			311
Core deposit amortization	592			592			496			383			383
FDIC assessments	863			1,060			767			677			674
Other real estate owned and credit-related expenses	2,613			1,757			1,668			1,648			1,479
Professional and other outside services	1,531			1,379			3,361			1,444			1,833
Other expenses	3,700			3,265			3,177			2,775			2,591
Total Other Expenses	41,250			43,089			40,558			34,219			33,742
INCOME BEFORE INCOME TAX	20,802			17,989			14,634			13,070			14,970
Income tax expense	5,642			4,369			3,187			2,667			4,155
NET INCOME	15,160			13,620			11,447			10,403			10,815
Preferred stock dividends							(241		)	(430		)	(852		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	15,160		$	13,620		$	11,206		$	9,973		$	9,963

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.42		$	0.38		$	0.34		$	0.35		$	0.35
Diluted Net Income Available to Common Stockholders	$	0.41		$	0.38		$	0.34		$	0.35		$	0.34
Cash Dividends Paid	$	0.08		$	0.05		$	0.05		$	0.05		$	0.05
Average Diluted Shares Outstanding (in thousands)	36,294			36,261			32,913			29,081			29,024
FINANCIAL RATIOS:
Return on Average Assets	1.10		%	1.01		%	0.91		%	0.93		%	0.92		%
Return on Average Stockholders' Equity	9.15			8.45			7.78			7.85			7.34
Return on Average Common Stockholders' Equity	9.15			8.45			8.05			8.42			8.40
Average Earning Assets to Average Assets	89.57			89.00			89.08			90.71			90.59
Allowance for Loan Losses as % of Total Loans	1.83			1.92			1.87			2.26			2.32
Net Charge Off's as % of Average Loans (Annualized)	0.13			(0.19		)	(0.08		)	0.48			0.32
Average Stockholders' Equity to Average Assets	12.00			11.94			11.64			11.85			12.54
Tax Equivalent Yield on Earning Assets	4.33			4.40			4.30			4.35			4.29
Cost of Supporting Liabilities	0.44			0.43			0.41			0.38			0.41
Net Interest Margin (FTE) on Earning Assets	3.89			3.97			3.89			3.97			3.88
Tangible Book Value Per Share	$	13.14		$	12.63		$	12.17		$	11.56		$	11.27



LOANS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
Commercial and industrial loans	$	857,844		$	787,390		$	761,705		$	652,356		$	657,764
Agricultural production financing and other loans to farmers	102,270			99,226			114,348			98,489			105,175
Real estate loans:
Construction	165,388			155,117			177,082			149,875			101,909
Commercial and farmland	1,621,436			1,606,735			1,611,809			1,264,180			1,272,761
Residential	629,162			626,202			616,385			452,277			460,108
Home Equity	261,811			256,790			255,223			206,816			203,788
Individuals' loans for household and other personal expenditures	61,533			61,742			69,783			70,380			79,258
Lease financing receivables, net of unearned income	1,231			1,378			1,545			1,815			1,828
Other loans	22,058			22,047			24,529			29,269			37,489
Loans	3,722,733			3,616,627			3,632,409			2,925,457			2,920,080
Allowance for loan losses	(68,367		)	(69,583		)	(67,870		)	(66,224		)	(68,202		)
NET LOANS	$	3,654,366		$	3,547,044		$	3,564,539		$	2,859,233		$	2,851,878



DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2014		2014		2013		2013		2013
Demand deposits	$	2,041,183	$	1,966,895	$	2,018,650	$	1,610,662	$	1,648,712
Savings deposits	1,251,277		1,282,702		1,257,994		937,521		916,481
Certificates and other time deposits of $100,000 or more	251,585		265,683		272,660		190,866		205,467
Other certificates and time deposits	534,344		568,160		595,110		422,151		448,885
Brokered deposits	251,221		199,739		87,054		94,646		113,248
TOTAL DEPOSITS	$	4,329,610	$	4,283,179	$	4,231,468	$	3,255,846	$	3,332,793



CONSOLIDATED BALANCE SHEETS (AVERAGE)
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
ASSETS
Cash and cash equivalents	$	79,974		$	95,255		$	91,121		$	69,974		$	69,045
Interest-bearing time deposits	59,030			44,313			116,839			24,497			109,522
Investment securities	1,170,976			1,109,914			963,478			908,419			880,241
Mortgage loans held for sale	5,583			4,936			5,069			11,063			17,489
Loans	3,674,938			3,611,148			3,287,924			2,907,144			2,892,199
Less: Allowance for loan losses	(69,188		)	(68,806		)	(66,949		)	(69,117		)	(69,296		)
Net loans	3,605,750			3,542,342			3,220,975			2,838,027			2,822,903
Premises and equipment	74,869			74,631			66,383			54,757			53,896
Federal Reserve and Federal Home Loan Bank stock	42,809			38,990			36,095			32,790			32,789
Interest receivable	17,919			17,118			17,359			14,026			13,864
Core deposit intangibles and goodwill	201,864			202,528			177,518			148,571			148,954
Cash surrender value of life insurance	165,545			164,842			152,972			126,922			126,315
Other real estate owned	19,539			21,867			16,557			11,669			12,202
Tax asset, deferred and receivable	48,296			54,753			49,525			32,484			27,676
Other assets	28,329			28,199			36,383			13,783			14,683
TOTAL ASSETS	$	5,520,483		$	5,399,688		$	4,950,274		$	4,286,982		$	4,329,579
LIABILITIES
Deposits:
Noninterest-bearing	927,238			915,635			883,044			775,545			753,695
Interest-bearing	3,437,961			3,300,046			2,977,408			2,519,824			2,632,227
Total Deposits	4,365,199			4,215,681			3,860,452			3,295,369			3,385,922
Borrowings:
Federal funds purchased	28,628			49,140			21,367			68,236			2,267
Securities sold under repurchase agreements	132,433			147,492			135,697			126,938			158,377
Federal Home Loan Bank advances	171,372			170,125			149,278			139,941			93,014
Subordinated debentures and term loans	127,169			126,820			121,795			111,779			111,778
Total Borrowings	459,602			493,577			428,137			446,894			365,436
Interest payable	2,984			3,047			1,811			1,592			1,808
Other liabilities	30,055			42,484			83,717			35,093			33,492
Total Liabilities	4,857,840			4,754,789			4,374,117			3,778,948			3,786,658
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							19,242			34,413			68,087
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	4,503			4,495			4,075			3,601			3,598
Additional paid-in capital	394,121			393,590			323,196			257,847			257,147
Retained earnings	261,742			249,978			245,083			230,077			221,606
Accumulated other comprehensive income (loss)	2,152			(3,289		)	(15,564		)	(18,029		)	(7,642		)
Total Stockholders' Equity	662,643			644,899			576,157			508,034			542,921
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,520,483		$	5,399,688		$	4,950,274		$	4,286,982		$	4,329,579