SEC Filing | First Merchants Corporation

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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): January 26, 2017

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 January 26, 2017 First Merchants Corporation issued a press release to report its financial results for the fourth quarter ended December 31, 2016. 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 January 26, 2017, 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,

Chief Financial Officer and Chief Operating Officer

Dated: January 26, 2017

EXHIBIT INDEX


Exhibit No.	Description

99.1 Press Release, dated January 26, 2017, issued by First Merchants Corporation

Exhibit

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

January 26, 2017

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 RECORD FOURTH QUARTER AND FULL YEAR 2016 RESULTS

First Merchants Corporation (NASDAQ - FRME) reported record 4th quarter 2016 net income of $22.3 million, compared to $14.2 million during the 4th quarter of 2015. Earnings per share for the period totaled a record $.55 per share, an increase of $.18 per share, or 48.6 percent, over the same period in 2015.

Year-to-date net income totaled a record $81.1 million, compared to $65.4 million during the same period in 2015. Earnings per share for the full year of 2016 totaled a record $1.98 per share, an increase of $.26 per share, or 15.1 percent over the same period in 2015.

Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants’ 2016 results included record performance throughout nearly every category of the balance sheet and income statement which resulted in successful achievement of our year’s high performance targets. Crisp execution, the economic and interest rate outlook, combined with our recently announced Columbus, Ohio expansion, position us to deliver sustained value through 2017 and beyond.”

Total assets and total loans reached new heights totaling $7.2 billion and $5.1 billion, respectively, as of December 31, 2016; compared to $6.8 billion and $4.7 billion, as of year-end 2015. The organic growth equaled $451 million, or 6.7 percent in total assets and $446 million, or 9.5 percent in total loans. Total deposits also increased during the year by $267 million, or 5 percent totaling $5.6 billion and tangible common equity increased to record levels totaling $643 million and $15.85 per share.

Net-interest income totaled a record $226.5 million for the full year of 2016, an increase of $30.1 million over the $196.4 million total from 2015. The increase can be attributed to several factors including the closing of our Ameriana Bancorp acquisition on December 31, 2015, organic earning asset growth and the expansion of our net-interest margin of 9 basis points. Net-interest margin for 2016 totaled 3.89 percent as yields on earning assets totaled 4.32 percent and the cost of supporting liabilities totaled .43 percent. When adjusted for fair value accretion, net-interest margin totaled 3.69 percent for the year, 4 basis points more than the full year 2015 of 3.65.

Non-interest income totaled $65.2 million for the full year of 2016. When normalized for insurance commission income, the gains on the sale of First Merchants Insurance Group, the cancellation of trust preferred debt, and sales of securities, non-interest income increased by 15.1 percent.

Non-interest expense totaled $177.4 million for the full year 2016, an increase of $2.6 million or 1.5 percent from 2015. The increase includes a full year of expenses from our 2015 acquisitions, off-set by the elimination of operating expenses related to the First Merchants Insurance Group.

The Corporation’s provision expense totaled $5.7 million during the full year 2016 as net charge-offs totaled $2.1 million resulting in growth in the allowance for loan losses of $3.6 million to cover loan growth during the year. Non-accrual loans now total $30.0 million, down from the 2015 total of $31.4 million. The allowance for loan losses increased $4 million and now totals $66 million. The allowance is 1.28 percent of total loans and 1.47 percent of non-purchased loans.

As of December 31, 2016, the Corporation’s total risk-based capital ratio equaled 14.21 percent, common equity tier 1 capital ratio equaled 11.10 percent and the tangible common equity ratio totaled 9.24 percent.

The previous reference to our expansion in Columbus, Ohio relates to our proposed merger with The Arlington Bank which was announced in an 8-K filed yesterday, January 25, 2017.

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, January 26, 2017.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's fourth quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until February 26, 2017. 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 10098245.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme170126.html during the time of the call. A replay of the web cast will be available until January 26, 2018.

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, which also operates as Lafayette Bank & Trust, and First Merchants Private Wealth Advisors which operates 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)	December 31,
	2016			2015
ASSETS
Cash and cash equivalents	$	127,927		$	102,170
Interest-bearing time deposits	24,459			32,315
Investment securities	1,304,505			1,276,999
Loans held for sale	2,929			9,894
Loans	5,139,645			4,693,822
Less: Allowance for loan losses	(66,037		)	(62,453		)
Net loans	5,073,608			4,631,369
Premises and equipment	94,432			97,648
Federal Reserve and Federal Home Loan Bank stock	17,964			37,633
Interest receivable	26,194			24,415
Core deposit intangibles and goodwill	258,866			259,764
Cash surrender value of life insurance	201,671			200,539
Other real estate owned	8,966			17,257
Tax asset, deferred and receivable	39,384			46,977
Other assets	30,706			24,023
TOTAL ASSETS	$	7,211,611		$	6,761,003
LIABILITIES
Deposits:
Noninterest-bearing	$	1,348,267		$	1,266,027
Interest-bearing	4,208,231			4,023,620
Total Deposits	5,556,498			5,289,647
Borrowings:
Federal funds purchased	120,349			49,721
Securities sold under repurchase agreements	146,480			155,325
Federal Home Loan Bank advances	298,923			235,652
Subordinated debentures and term loans	128,445			127,846
Total Borrowings	694,197			568,544
Interest payable	3,110			3,092
Other liabilities	56,149			49,211
Total Liabilities	6,309,954			5,910,494
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 -- 50,000,000 shares
Issued and outstanding - 40,912,697 and 40,664,259 shares	5,114			5,083
Additional paid-in capital	509,018			504,530
Retained earnings	400,981			342,133
Accumulated other comprehensive loss	(13,581		)	(1,362		)
Total Stockholders' Equity	901,657			850,509
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	7,211,611		$	6,761,003



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts)	December 31,				December 31,
	2016		2015		2016		2015
INTEREST INCOME
Loans receivable:
Taxable	$	53,895	$	45,897	$	210,302	$	180,805
Tax-exempt	2,096		1,285		6,525		3,459
Investment securities:
Taxable	3,893		4,363		16,415		17,885
Tax-exempt	4,862		4,444		18,622		16,922
Deposits with financial institutions	67		67		350		160
Federal Reserve and Federal Home Loan Bank stock	192		458		1,098		1,967
Total Interest Income	65,005		56,514		253,312		221,198
INTEREST EXPENSE
Deposits	3,886		3,938		15,914		14,855
Federal funds purchased	40		5		102		74
Securities sold under repurchase agreements	91		104		374		368
Federal Home Loan Bank advances	797		728		3,264		2,836
Subordinated debentures and term loans	1,817		1,665		7,185		6,661
Total Interest Expense	6,631		6,440		26,839		24,794
NET INTEREST INCOME	58,374		50,074		226,473		196,404
Provision for loan losses	2,417				5,657		417
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	55,957		50,074		220,816		195,987
OTHER INCOME
Service charges on deposit accounts	4,534		4,118		17,762		16,201
Fiduciary activities	2,500		2,138		9,818		9,196
Other customer fees	4,784		4,534		19,315		16,959
Commission income							4,147
Earnings on cash surrender value of life insurance	886		822		4,273		2,919
Net gains and fees on sales of loans	1,886		1,308		7,052		6,483
Net realized gains on sales of available for sale securities	847		623		3,389		2,670
Gain on sale of insurance subsidiary							8,265
Other income	683		488		3,594		3,028
Total Other Income	16,120		14,031		65,203		69,868
OTHER EXPENSES
Salaries and employee benefits	22,994		25,796		102,552		101,908
Net occupancy	4,568		3,649		16,997		14,668
Equipment	3,069		2,683		12,497		10,787
Marketing	790		915		3,008		3,493
Outside data processing fees	2,672		1,632		9,148		7,109
Printing and office supplies	301		343		1,348		1,353
Core deposit amortization	977		692		3,910		2,835
FDIC assessments	550		939		3,036		3,655
Other real estate owned and foreclosure expenses	574		1,040		2,877		3,956
Professional and other outside services	1,634		3,544		6,516		9,855
Other expenses	3,805		4,277		15,470		15,187
Total Other Expenses	41,934		45,510		177,359		174,806
INCOME BEFORE INCOME TAX	30,143		18,595		108,660		91,049
Income tax expense	7,850		4,418		27,609		25,665
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	22,293	$	14,177	$	81,051	$	65,384
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.55	$	0.37	$	1.99	$	1.73
Diluted Net Income Available to Common Stockholders	$	0.55	$	0.37	$	1.98	$	1.72
Cash Dividends Paid	$	0.15	$	0.11	$	0.54	$	0.41
Average Diluted Shares Outstanding (in thousands)	41,124		38,191		41,013		38,088



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2016			2015			2016			2015
NET CHARGE OFF'S	$	(164	)	$	408		$	2,073		$	1,928

AVERAGE BALANCES:
Total Assets	$	7,086,456		$	6,301,222		$	6,899,265		$	6,085,687
Total Loans	5,008,066			4,351,621			4,814,005			4,179,839
Total Earning Assets	6,367,973			5,678,050			6,180,050			5,464,829
Total Deposits	5,585,468			4,994,624			5,438,217			4,806,503
Total Stockholders' Equity	903,610			774,560			884,664			753,724

FINANCIAL RATIOS:
Return on Average Assets	1.26		%	0.90		%	1.17		%	1.07		%
Return on Average Stockholders' Equity	9.87			7.32			9.16			8.67
Return on Average Common Stockholders' Equity	9.87			7.32			9.16			8.68
Average Earning Assets to Average Assets	89.86			90.11			89.58			89.80
Allowance for Loan Losses as % of Total Loans	1.28			1.33			1.28			1.33
Net Charge Off's as % of Average Loans (Annualized)	(0.01		)	0.04			0.04			0.05
Average Stockholders' Equity to Average Assets	12.75			12.29			12.82			12.39
Tax Equivalent Yield on Earning Assets	4.32			4.20			4.32			4.25
Cost of Supporting Liabilities	0.42			0.45			0.43			0.45
Net Interest Margin (FTE) on Earning Assets	3.90			3.75			3.89			3.80
Efficiency Ratio	52.18			65.77			56.51			61.19
Tangible Common Book Value Per Share	$	15.85		$	14.68		$	15.85		$	14.68



NON-PERFORMING ASSETS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2016			2016			2016			2016			2015
Non-Accrual Loans	$	29,998		$	34,105		$	33,565		$	36,719		$	31,389
Renegotiated Loans	4,747			3,940			4,299			1,015			1,923
Non-Performing Loans (NPL)	34,745			38,045			37,864			37,734			33,312
Other Real Estate Owned	8,966			10,242			13,219			15,626			17,257
Non-Performing Assets (NPA)	43,711			48,287			51,083			53,360			50,569
90+ Days Delinquent	112			1,625			362			963			907
NPAs & 90 Day Delinquent	$	43,823		$	49,912		$	51,445		$	54,323		$	51,476

Loan Loss Reserve	$	66,037		$	63,456		$	62,186		$	62,086		$	62,453
Quarterly Net Charge-off's	(164		)	630			690			917			408
NPAs / Actual Assets %	0.61		%	0.69		%	0.74		%	0.78		%	0.75		%
NPAs & 90 Day / Actual Assets %	0.61		%	0.71		%	0.74		%	0.80		%	0.76		%
NPAs / Actual Loans and OREO %	0.85		%	0.97		%	1.06		%	1.13		%	1.07		%
Loan Loss Reserves / Actual Loans (%)	1.28		%	1.28		%	1.29		%	1.32		%	1.33		%
Net Charge Off's as % of Average Loans (Annualized)	(0.01		)%	0.05		%	0.06		%	0.08		%	0.04		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2016			2016			2016			2016			2015
ASSETS
Cash and cash equivalents	$	127,927		$	99,602		$	120,471		$	85,738		$	102,170
Interest-bearing time deposits	24,459			33,803			62,533			77,453			32,315
Investment securities	1,304,505			1,300,428			1,297,801			1,270,777			1,276,999
Loans held for sale	2,929			1,482			18,854			3,628			9,894
Loans	5,139,645			4,973,844			4,791,429			4,709,907			4,693,822
Less: Allowance for loan losses	(66,037		)	(63,456		)	(62,186		)	(62,086		)	(62,453		)
Net loans	5,073,608			4,910,388			4,729,243			4,647,821			4,631,369
Premises and equipment	94,432			95,540			95,170			96,494			97,648
Federal Reserve and Federal Home Loan Bank stock	17,964			18,044			18,096			37,553			37,633
Interest receivable	26,194			23,652			23,351			22,836			24,415
Core deposit intangibles and goodwill	258,866			259,844			260,821			261,799			259,764
Cash surrender value of life insurance	201,671			201,856			201,417			200,549			200,539
Other real estate owned	8,966			10,242			13,219			15,626			17,257
Tax asset, deferred and receivable	39,384			31,779			32,547			47,982			46,977
Other assets	30,706			35,692			32,895			30,283			24,023
TOTAL ASSETS	$	7,211,611		$	7,022,352		$	6,906,418		$	6,798,539		$	6,761,003
LIABILITIES
Deposits:
Noninterest-bearing	$	1,348,267		$	1,307,886		$	1,253,747		$	1,282,462		$	1,266,027
Interest-bearing	4,208,231			4,136,354			4,153,807			4,028,608			4,023,620
Total Deposits	5,556,498			5,444,240			5,407,554			5,311,070			5,289,647
Borrowings:
Federal funds purchased	120,349			58,358			20,000			602			49,721
Securities sold under repurchase agreements	146,480			138,671			140,777			150,134			155,325
Federal Home Loan Bank advances	298,923			297,022			268,579			263,588			235,652
Subordinated debentures and term loans	128,445			128,288			127,678			127,523			127,846
Total Borrowings	694,197			622,339			557,034			541,847			568,544
Interest payable	3,110			3,733			3,051			3,910			3,092
Other liabilities	56,149			51,175			51,229			74,449			49,211
Total Liabilities	6,309,954			6,121,487			6,018,868			5,931,276			5,910,494
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 -- 50,000,000 shares
Issued and outstanding	5,114			5,100			5,097			5,094			5,083
Additional paid-in capital	509,018			506,848			505,725			504,661			504,530
Retained earnings	400,981			384,868			369,568			355,317			342,133
Accumulated other comprehensive income (loss)	(13,581		)	3,924			7,035			2,066			(1,362		)
Total Stockholders' Equity	901,657			900,865			887,550			867,263			850,509
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	7,211,611		$	7,022,352		$	6,906,418		$	6,798,539		$	6,761,003



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	December 31,			September 30,			June 30,			March 31,			December 31,
	2016			2016			2016			2016			2015
INTEREST INCOME
Loans receivable:
Taxable	$	53,895		$	53,819		$	52,099		$	50,489		$	45,897
Tax-exempt	2,096			1,649			1,465			1,315			1,285
Investment securities:
Taxable	3,893			3,992			4,202			4,328			4,363
Tax-exempt	4,862			4,668			4,583			4,509			4,444
Deposits with financial institutions	67			55			122			106			67
Federal Reserve and Federal Home Loan Bank stock	192			193			233			480			458
Total Interest Income	65,005			64,376			62,704			61,227			56,514
INTEREST EXPENSE
Deposits	3,886			3,926			4,039			4,063			3,938
Federal funds purchased	40			27			7			28			5
Securities sold under repurchase agreements	91			91			92			100			104
Federal Home Loan Bank advances	797			853			818			796			728
Subordinated debentures and term loans	1,817			1,797			1,786			1,785			1,665
Total Interest Expense	6,631			6,694			6,742			6,772			6,440
NET INTEREST INCOME	58,374			57,682			55,962			54,455			50,074
Provision for loan losses	2,417			1,900			790			550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	55,957			55,782			55,172			53,905			50,074
OTHER INCOME
Service charges on deposit accounts	4,534			4,667			4,416			4,145			4,118
Fiduciary activities	2,500			2,448			2,376			2,494			2,138
Other customer fees	4,784			4,777			4,695			5,059			4,534
Earnings on cash surrender value of life insurance	886			614			1,297			1,476			822
Net gains and fees on sales of loans	1,886			1,989			1,717			1,460			1,308
Net realized gains on sales of available for sale securities	847			839			706			997			623
Other income	683			1,527			1,178			206			488
Total Other Income	16,120			16,861			16,385			15,837			14,031
OTHER EXPENSES
Salaries and employee benefits	22,994			26,651			25,570			27,337			25,796
Net occupancy	4,568			4,348			4,059			4,022			3,649
Equipment	3,069			2,947			3,243			3,238			2,683
Marketing	790			630			851			737			915
Outside data processing fees	2,672			2,382			2,025			2,069			1,632
Printing and office supplies	301			314			369			364			343
Core deposit amortization	977			978			977			978			692
FDIC assessments	550			534			1,002			950			939
Other real estate owned and foreclosure expenses	574			637			915			751			1,040
Professional and other outside services	1,634			1,242			1,478			2,162			3,544
Other expenses	3,805			3,452			4,346			3,867			4,277
Total Other Expenses	41,934			44,115			44,835			46,475			45,510
INCOME BEFORE INCOME TAX	30,143			28,528			26,722			23,267			18,595
Income tax expense	7,850			7,469			6,716			5,574			4,418
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	22,293		$	21,059		$	20,006		$	17,693		$	14,177

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.55		$	0.51		$	0.50		$	0.43		$	0.37
Diluted Net Income Available to Common Stockholders	$	0.55		$	0.51		$	0.49		$	0.43		$	0.37
Cash Dividends Paid	$	0.15		$	0.14		$	0.14		$	0.11		$	0.11
Average Diluted Shares Outstanding (in thousands)	41,124			41,026			40,969			40,917			38,191
FINANCIAL RATIOS:
Return on Average Assets	1.26		%	1.22		%	1.17		%	1.05		%	0.90		%
Return on Average Stockholders' Equity	9.87			9.39			9.13			8.21			7.32
Return on Average Common Stockholders' Equity	9.87			9.39			9.14			8.21			7.32
Average Earning Assets to Average Assets	89.86			89.73			89.41			89.28			90.11
Allowance for Loan Losses as % of Total Loans	1.28			1.28			1.29			1.32			1.33
Net Charge Off's as % of Average Loans (Annualized)	(0.01		)	0.05			0.06			0.08			0.04
Average Stockholders' Equity to Average Assets	12.75			12.99			12.78			12.78			12.29
Tax Equivalent Yield on Earning Assets	4.32			4.37			4.30			4.28			4.20
Cost of Supporting Liabilities	0.42			0.43			0.44			0.45			0.45
Net Interest Margin (FTE) on Earning Assets	3.90			3.94			3.86			3.83			3.75
Efficiency Ratio	52.18			55.12			57.33			61.78			65.77
Tangible Common Book Value Per Share	$	15.85		$	15.86		$	15.53		$	15.02		$	14.68



LOANS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2016			2016			2016			2016			2015
Commercial and industrial loans	$	1,194,646		$	1,146,538		$	1,084,890		$	1,060,559		$	1,057,075
Agricultural production financing and other loans to farmers	79,689			93,169			95,131			92,137			97,711
Real estate loans:
Construction	418,703			368,241			352,980			391,621			366,704
Commercial and farmland	1,953,062			1,941,739			1,869,703			1,806,395			1,802,921
Residential	739,169			739,855			758,870			769,592			786,105
Home Equity	418,525			398,837			374,159			353,946			348,613
Individuals' loans for household and other personal expenditures	77,479			76,497			75,205			73,622			74,717
Lease financing receivables, net of unearned income	311			380			388			461			588
Other commercial loans	258,061			208,588			180,103			161,574			159,388
Loans	5,139,645			4,973,844			4,791,429			4,709,907			4,693,822
Allowance for loan losses	(66,037		)	(63,456		)	(62,186		)	(62,086		)	(62,453		)
NET LOANS	$	5,073,608		$	4,910,388		$	4,729,243		$	4,647,821		$	4,631,369



DEPOSITS
(Dollars In Thousands)	December 31,		September 30,		June 30,		March 31,		December 31,
	2016		2016		2016		2016		2015
Demand deposits	$	2,866,853	$	2,745,028	$	2,717,500	$	2,590,603	$	2,576,283
Savings deposits	1,560,752		1,545,372		1,551,210		1,549,304		1,518,722
Certificates and other time deposits of $100,000 or more	276,274		296,838		301,695		304,559		323,698
Other certificates and time deposits	471,247		498,203		517,720		536,120		556,476
Brokered deposits	381,372		358,799		319,429		330,484		314,468
TOTAL DEPOSITS	$	5,556,498	$	5,444,240	$	5,407,554	$	5,311,070	$	5,289,647



NET INTEREST INCOME
(Dollars in Thousands)	For the Three Months Ended
	December 31, 2016							December 31, 2015
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	49,835		$	66	0.53	%	$	94,150		$	67	0.28	%
Federal Reserve and Federal Home Loan Bank stock	18,041			193		4.28		34,909			458		5.25
Investment Securities: ⁽¹⁾
Taxable	710,902			3,893		2.19		687,265			4,363		2.54
Tax-Exempt ⁽²⁾	581,129			7,480		5.15		510,105			6,837		5.36
Total Investment Securities	1,292,031			11,373		3.52		1,197,370			11,200		3.74
Loans held for sale	1,611			81		20.11		1,829			93		20.34
Loans: ⁽³⁾
Commercial	3,655,414			41,830		4.58		3,263,959			36,284		4.45
Real Estate Mortgage	557,259			6,125		4.40		465,097			4,844		4.17
Installment	519,257			5,859		4.51		430,440			4,675		4.34
Tax-Exempt ⁽²⁾	274,525			3,225		4.70		190,296			1,978		4.16
Total Loans	5,008,066			57,120		4.56		4,351,621			47,874		4.40
Total Earning Assets	6,367,973			68,752		4.32		5,678,050			59,599		4.20
Net unrealized gain on securities available for sale	7,221							9,832
Allowance for loan losses	(63,999		)					(63,077		)
Cash and cash equivalents	113,414							102,144
Premises and equipment	95,245							83,800
Other assets	566,602							490,473
Total Assets	$	7,086,456						$	6,301,222
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,524,324		$	730	0.19	%	$	1,205,874		$	481	0.16	%
Money market deposits	795,045			328		0.17		844,629			463		0.22
Savings deposits	766,232			164		0.09		645,057			191		0.12
Certificates and other time deposits	1,132,962			2,664		0.94		1,089,465			2,803		1.03
Total Interest-bearing Deposits	4,218,563			3,886		0.37		3,785,025			3,938		0.42
Borrowings	531,059			2,745		2.07		488,997			2,502		2.05
Total Interest-bearing Liabilities	4,749,622			6,631		0.56		4,274,022			6,440		0.60
Noninterest-bearing deposits	1,366,905							1,209,599
Other liabilities	66,319							43,041
Total Liabilities	6,182,846							5,526,662
Stockholders' Equity	903,610							774,560
Total Liabilities and Stockholders' Equity	$	7,086,456		6,631		0.42		$	6,301,222		6,440		0.45
Net Interest Income				$	62,121						$	53,159
Net Interest Margin						3.90	%						3.75	%


⁽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.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2016 and 2015. These totals equal $3,747 and $3,085 for the three months ended December 31, 2016 and 2015, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.



NET INTEREST INCOME
(Dollars in Thousands)	For the Years Ended
	December 31, 2016							December 31, 2015
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	69,753		$	350	0.50	%	$	61,373		$	160	0.26	%
Federal Reserve and Federal Home Loan Bank stock	24,268			1,098		4.52		37,495			1,967		5.25
Investment Securities: ⁽¹⁾
Taxable	721,689			16,415		2.27		703,019			17,885		2.54
Tax-Exempt ⁽²⁾	550,335			28,649		5.21		483,103			26,034		5.39
Total Investment Securities	1,272,024			45,064		3.54		1,186,122			43,919		3.70
Loans held for sale	4,050			372		9.19		3,725			475		12.75
Loans: ⁽³⁾
Commercial	3,541,098			162,848		4.60		3,187,239			142,696		4.48
Real Estate Mortgage	566,050			25,156		4.44		457,013			19,457		4.26
Installment	485,111			21,926		4.52		406,163			18,177		4.48
Tax-Exempt ⁽²⁾	217,696			10,039		4.61		125,699			5,322		4.23
Total Loans	4,814,005			220,341		4.58		4,179,839			186,127		4.45
Total Earning Assets	6,180,050			266,853		4.32	%	5,464,829			232,173		4.25	%
Net unrealized gain on securities available for sale	9,969							11,800
Allowance for loan losses	(62,976		)					(62,975		)
Cash and cash equivalents	105,443							98,051
Premises and equipment	96,023							82,710
Other assets	570,756							491,272
Total Assets	$	6,899,265						$	6,085,687
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,427,535		$	2,579	0.18	%	$	1,109,829		$	1,374	0.12	%
Money market deposits	825,681			1,705		0.21		840,084			1,768		0.21
Savings deposits	731,902			618		0.08		614,675			672		0.11
Certificates and other time deposits	1,151,700			11,012		0.96		1,121,651			11,041		0.98
Total Interest-bearing Deposits	4,136,818			15,914		0.38		3,686,239			14,855		0.40
Borrowings	512,356			10,925		2.13		480,794			9,939		2.07
Total Interest-bearing Liabilities	4,649,174			26,839		0.58		4,167,033			24,794		0.60
Noninterest-bearing deposits	1,301,399							1,120,264
Other liabilities	64,028							44,666
Total Liabilities	6,014,601							5,331,963
Stockholders' Equity	884,664							753,724
Total Liabilities and Stockholders' Equity	$	6,899,265		26,839		0.43		$	6,085,687		24,794		0.45
Net Interest Income				$	240,014						$	207,379
Net Interest Margin						3.89	%						3.80	%


⁽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.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2016 and 2015. These totals equal $13,541 and $10,975 for the years ended December 31, 2016 and 2015, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.