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): April 27, 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))

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 o

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. o

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 27, 2017 First Merchants Corporation issued a press release to report its financial results for the first quarter ended March 31, 2017. 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 April 27, 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: April 27, 2017

EXHIBIT INDEX


Exhibit No.	Description

99.1 Press Release, dated April 27, 2017, issued by First Merchants Corporation

Exhibit

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

April 27, 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 30 PERCENT INCREASE IN FIRST QUARTER 2017 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) reported first quarter 2017 net income of $23.2 million, an increase of 31 percent, compared to $17.7 million during the same period in 2016. Earnings per share for the period totaled $.56 per share, an increase of 30 percent, compared to the first quarter of 2016 result of $.43 per share.

Total assets grew to $7.3 billion as of quarter-end and loans totaled $5.3 billion. The Corporation’s loan portfolio increased by $565 million or 12 percent, during the past twelve months. Total deposits equaled $5.6 billion as of quarter-end and increased by $324 million, or 6 percent, during the same twelve-month period.

Michael C. Rechin, President and Chief Executive Officer, stated, “The first quarter of 2017 is our fourth consecutive quarter without any meaningful merger and acquisition expense, providing a clean review of our high performance results. Our management team is pleased with our execution in driving organic loan and deposit growth, earnings growth and operating leverage. We are also enthusiastic about our pending acquisitions of The Arlington Bank in Columbus, Ohio and iAB Bank in Ft. Wayne, Indiana which are expected to close in the second and third quarters of 2017, respectively. The acquisitions bring additional franchise value in terms of their historical earnings performance, market attractiveness and management leadership.”

Net-interest income totaled $61 million for the quarter, an increase of $6.5 million, or 12 percent. Net-interest margin improved over last year by 15 basis points totaling 3.98 percent, as yields on earning assets totaled 4.42 percent and the cost of supporting liabilities totaled .44 percent. When adjusted for fair value accretion, core net-interest margin also increased over last year by 6 basis points totaling 3.72 percent.

Non-interest income totaled $14.8 million for the quarter, a $1 million decline from the first quarter of 2016. The decline in non-interest income was more than offset by a $3.4 million decrease in non-interest expense as the Corporation continues its focus on efficiency. Total non-interest expense was $43.1 million for the first quarter of 2017 compared to $46.5 million in 2016.

Tax expense for the first quarter of 2017 totaled $7.2 million, or 23.6 percent of pre-tax net income. Due to the required adoption of FASB Accounting Standards Update (ASU) 2016-09, the Corporation’s tax expense was reduced by $772,000. The first quarter ASU 2016-09 impact improved earnings per share by $.02.

The Corporation’s provision expense totaled $2.4 million primarily due to loan growth as net charge-offs totaled just $197,000. The allowance for loan losses totaled $68.2 million as of March 31, 2017, up from $62.1 million as of March 31, 2016. Non-accrual loans totaled $27.9 million as of quarter-end, down from $36.7 million a year ago. The allowance is 1.29 percent of total loans and 1.46 percent of non-purchased loans.

As of March 31, 2017, the Corporation’s total risk-based capital equaled 14.24 percent, common equity tier 1 risk-based capital equaled 11.16 percent, and tangible common equity ratio totaled 9.5 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a first quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, April 27, 2017.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's first quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until May 27, 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 10104098.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme170427.html during the time of the call. A replay of the web cast will be available until April 27, 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)	March 31,
	2017			2016
ASSETS
Cash and cash equivalents	$	104,247		$	85,738
Interest-bearing time deposits	20,439			77,453
Investment securities	1,327,217			1,270,777
Loans held for sale	1,262			3,628
Loans	5,274,909			4,709,907
Less: Allowance for loan losses	(68,225		)	(62,086		)
Net loans	5,206,684			4,647,821
Premises and equipment	91,311			96,494
Federal Reserve and Federal Home Loan Bank stock	17,964			37,553
Interest receivable	25,174			22,836
Core deposit intangibles and goodwill	257,963			261,799
Cash surrender value of life insurance	202,574			200,549
Other real estate owned	8,293			15,626
Tax asset, deferred and receivable	32,074			47,982
Other assets	30,991			30,283
TOTAL ASSETS	$	7,326,193		$	6,798,539
LIABILITIES
Deposits:
Noninterest-bearing	$	1,373,778		$	1,282,462
Interest-bearing	4,261,531			4,028,608
Total Deposits	5,635,309			5,311,070
Borrowings:
Federal funds purchased	102,000			602
Securities sold under repurchase agreements	139,007			150,134
Federal Home Loan Bank advances	338,919			263,588
Subordinated debentures and term loans	128,862			127,523
Total Borrowings	708,788			541,847
Interest payable	3,875			3,910
Other liabilities	48,751			74,449
Total Liabilities	6,396,723			5,931,276
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 - 41,047,543 and 40,749,340 shares	5,131			5,094
Additional paid-in capital	509,953			504,661
Retained earnings	417,983			355,317
Accumulated other comprehensive loss	(3,722		)	2,066
Total Stockholders' Equity	929,470			867,263
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	7,326,193		$	6,798,539



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended
(Dollars In Thousands, Except Per Share Amounts)	March 31,
	2017		2016
INTEREST INCOME
Loans receivable:
Taxable	$	56,357	$	50,489
Tax-exempt	2,333		1,315
Investment securities:
Taxable	4,308		4,328
Tax-exempt	5,003		4,509
Deposits with financial institutions	44		106
Federal Reserve and Federal Home Loan Bank stock	189		480
Total Interest Income	68,234		61,227
INTEREST EXPENSE
Deposits	4,124		4,063
Federal funds purchased	228		28
Securities sold under repurchase agreements	88		100
Federal Home Loan Bank advances	978		796
Subordinated debentures and term loans	1,817		1,785
Total Interest Expense	7,235		6,772
NET INTEREST INCOME	60,999		54,455
Provision for loan losses	2,385		550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	58,614		53,905
OTHER INCOME
Service charges on deposit accounts	4,174		4,145
Fiduciary activities	2,640		2,494
Other customer fees	4,863		5,059
Earnings on cash surrender value of life insurance	898		1,476
Net gains and fees on sales of loans	1,275		1,460
Net realized gains on sales of available for sale securities	598		997
Other income	398		206
Total Other Income	14,846		15,837
OTHER EXPENSES
Salaries and employee benefits	25,732		27,337
Net occupancy	4,216		4,022
Equipment	2,807		3,238
Marketing	565		737
Outside data processing fees	2,616		2,069
Printing and office supplies	264		364
Core deposit amortization	903		978
FDIC assessments	570		950
Other real estate owned and foreclosure expenses	531		751
Professional and other outside services	1,734		2,162
Other expenses	3,161		3,867
Total Other Expenses	43,099		46,475
INCOME BEFORE INCOME TAX	30,361		23,267
Income tax expense	7,168		5,574
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	23,193	$	17,693
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.57	$	0.43
Diluted Net Income Available to Common Stockholders	$	0.56	$	0.43
Cash Dividends Paid	$	0.15	$	0.11
Average Diluted Shares Outstanding (in thousands)	41,221		40,917



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended
	March 31,
	2017			2016
NET CHARGE-OFFS	$	197		$	917

AVERAGE BALANCES:
Total Assets	$	7,217,151		$	6,743,315
Total Loans	5,180,243			4,669,568
Total Earning Assets	6,526,685			6,020,317
Total Deposits	5,590,357			5,297,289
Total Stockholders' Equity	914,062			861,652

FINANCIAL RATIOS:
Return on Average Assets	1.29		%	1.05		%
Return on Average Stockholders' Equity	10.15			8.21
Return on Average Common Stockholders' Equity	10.15			8.21
Average Earning Assets to Average Assets	90.43			89.28
Allowance for Loan Losses as % of Total Loans	1.29			1.32
Net Charge-offs as % of Average Loans (Annualized)	0.02			0.08
Average Stockholders' Equity to Average Assets	12.67			12.78
Tax Equivalent Yield on Earning Assets	4.42			4.28
Cost of Supporting Liabilities	0.44			0.45
Net Interest Margin (FTE) on Earning Assets	3.98			3.83
Efficiency Ratio	52.61			61.78
Tangible Common Book Value Per Share	$	16.49		$	15.02



NON-PERFORMING ASSETS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
Non-Accrual Loans	$	27,920		$	29,998		$	34,105		$	33,565		$	36,719
Renegotiated Loans	876			4,747			3,940			4,299			1,015
Non-Performing Loans (NPL)	28,796			34,745			38,045			37,864			37,734
Other Real Estate Owned	8,293			8,966			10,242			13,219			15,626
Non-Performing Assets (NPA)	37,089			43,711			48,287			51,083			53,360
90+ Days Delinquent	123			112			1,625			362			963
NPAs & 90 Day Delinquent	$	37,212		$	43,823		$	49,912		$	51,445		$	54,323

Allowance for Loan Losses	$	68,225		$	66,037		$	63,456		$	62,186		$	62,086
Quarterly Net Charge-offs	197			(164		)	630			690			917
NPAs / Actual Assets %	0.51		%	0.61		%	0.69		%	0.74		%	0.78		%
NPAs & 90 Day / Actual Assets %	0.51		%	0.61		%	0.71		%	0.74		%	0.80		%
NPAs / Actual Loans and OREO %	0.70		%	0.85		%	0.97		%	1.06		%	1.13		%
Allowance for Loan Losses / Actual Loans (%)	1.29		%	1.28		%	1.28		%	1.29		%	1.32		%
Net Charge-offs as % of Average Loans (Annualized)	0.02		%	(0.01		)%	0.05		%	0.06		%	0.08		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
ASSETS
Cash and cash equivalents	$	104,247		$	127,927		$	99,602		$	120,471		$	85,738
Interest-bearing time deposits	20,439			24,459			33,803			62,533			77,453
Investment securities	1,327,217			1,304,505			1,300,428			1,297,801			1,270,777
Loans held for sale	1,262			2,929			1,482			18,854			3,628
Loans	5,274,909			5,139,645			4,973,844			4,791,429			4,709,907
Less: Allowance for loan losses	(68,225		)	(66,037		)	(63,456		)	(62,186		)	(62,086		)
Net loans	5,206,684			5,073,608			4,910,388			4,729,243			4,647,821
Premises and equipment	91,311			94,432			95,540			95,170			96,494
Federal Reserve and Federal Home Loan Bank stock	17,964			17,964			18,044			18,096			37,553
Interest receivable	25,174			26,194			23,652			23,351			22,836
Core deposit intangibles and goodwill	257,963			258,866			259,844			260,821			261,799
Cash surrender value of life insurance	202,574			201,671			201,856			201,417			200,549
Other real estate owned	8,293			8,966			10,242			13,219			15,626
Tax asset, deferred and receivable	32,074			39,384			31,779			32,547			47,982
Other assets	30,991			30,706			35,692			32,895			30,283
TOTAL ASSETS	$	7,326,193		$	7,211,611		$	7,022,352		$	6,906,418		$	6,798,539
LIABILITIES
Deposits:
Noninterest-bearing	$	1,373,778		$	1,348,267		$	1,307,886		$	1,253,747		$	1,282,462
Interest-bearing	4,261,531			4,208,231			4,136,354			4,153,807			4,028,608
Total Deposits	5,635,309			5,556,498			5,444,240			5,407,554			5,311,070
Borrowings:
Federal funds purchased	102,000			120,349			58,358			20,000			602
Securities sold under repurchase agreements	139,007			146,480			138,671			140,777			150,134
Federal Home Loan Bank advances	338,919			298,923			297,022			268,579			263,588
Subordinated debentures and term loans	128,862			128,445			128,288			127,678			127,523
Total Borrowings	708,788			694,197			622,339			557,034			541,847
Interest payable	3,875			3,110			3,733			3,051			3,910
Other liabilities	48,751			56,149			51,175			51,229			74,449
Total Liabilities	6,396,723			6,309,954			6,121,487			6,018,868			5,931,276
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	5,131			5,114			5,100			5,097			5,094
Additional paid-in capital	509,953			509,018			506,848			505,725			504,661
Retained earnings	417,983			400,981			384,868			369,568			355,317
Accumulated other comprehensive income (loss)	(3,722		)	(13,581		)	3,924			7,035			2,066
Total Stockholders' Equity	929,470			901,657			900,865			887,550			867,263
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	7,326,193		$	7,211,611		$	7,022,352		$	6,906,418		$	6,798,539



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
INTEREST INCOME
Loans receivable:
Taxable	$	56,357		$	53,895		$	53,819		$	52,099		$	50,489
Tax-exempt	2,333			2,096			1,649			1,465			1,315
Investment securities:
Taxable	4,308			3,893			3,992			4,202			4,328
Tax-exempt	5,003			4,862			4,668			4,583			4,509
Deposits with financial institutions	44			67			55			122			106
Federal Reserve and Federal Home Loan Bank stock	189			192			193			233			480
Total Interest Income	68,234			65,005			64,376			62,704			61,227
INTEREST EXPENSE
Deposits	4,124			3,886			3,926			4,039			4,063
Federal funds purchased	228			40			27			7			28
Securities sold under repurchase agreements	88			91			91			92			100
Federal Home Loan Bank advances	978			797			853			818			796
Subordinated debentures and term loans	1,817			1,817			1,797			1,786			1,785
Total Interest Expense	7,235			6,631			6,694			6,742			6,772
NET INTEREST INCOME	60,999			58,374			57,682			55,962			54,455
Provision for loan losses	2,385			2,417			1,900			790			550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	58,614			55,957			55,782			55,172			53,905
OTHER INCOME
Service charges on deposit accounts	4,174			4,534			4,667			4,416			4,145
Fiduciary activities	2,640			2,500			2,448			2,376			2,494
Other customer fees	4,863			4,784			4,777			4,695			5,059
Earnings on cash surrender value of life insurance	898			886			614			1,297			1,476
Net gains and fees on sales of loans	1,275			1,886			1,989			1,717			1,460
Net realized gains on sales of available for sale securities	598			847			839			706			997
Other income	398			683			1,527			1,178			206
Total Other Income	14,846			16,120			16,861			16,385			15,837
OTHER EXPENSES
Salaries and employee benefits	25,732			22,994			26,651			25,570			27,337
Net occupancy	4,216			4,568			4,348			4,059			4,022
Equipment	2,807			3,069			2,947			3,243			3,238
Marketing	565			790			630			851			737
Outside data processing fees	2,616			2,672			2,382			2,025			2,069
Printing and office supplies	264			301			314			369			364
Core deposit amortization	903			977			978			977			978
FDIC assessments	570			550			534			1,002			950
Other real estate owned and foreclosure expenses	531			574			637			915			751
Professional and other outside services	1,734			1,634			1,242			1,478			2,162
Other expenses	3,161			3,805			3,452			4,346			3,867
Total Other Expenses	43,099			41,934			44,115			44,835			46,475
INCOME BEFORE INCOME TAX	30,361			30,143			28,528			26,722			23,267
Income tax expense	7,168			7,850			7,469			6,716			5,574
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	23,193		$	22,293		$	21,059		$	20,006		$	17,693

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.57		$	0.55		$	0.51		$	0.50		$	0.43
Diluted Net Income Available to Common Stockholders	$	0.56		$	0.55		$	0.51		$	0.49		$	0.43
Cash Dividends Paid	$	0.15		$	0.15		$	0.14		$	0.14		$	0.11
Average Diluted Shares Outstanding (in thousands)	41,221			41,124			41,026			40,969			40,917
FINANCIAL RATIOS:
Return on Average Assets	1.29		%	1.26		%	1.22		%	1.17		%	1.05		%
Return on Average Stockholders' Equity	10.15			9.87			9.39			9.13			8.21
Return on Average Common Stockholders' Equity	10.15			9.87			9.39			9.14			8.21
Average Earning Assets to Average Assets	90.43			89.86			89.73			89.41			89.28
Allowance for Loan Losses as % of Total Loans	1.29			1.28			1.28			1.29			1.32
Net Charge-offs as % of Average Loans (Annualized)	0.02			(0.01		)	0.05			0.06			0.08
Average Stockholders' Equity to Average Assets	12.67			12.75			12.99			12.78			12.78
Tax Equivalent Yield on Earning Assets	4.42			4.32			4.37			4.30			4.28
Cost of Supporting Liabilities	0.44			0.42			0.43			0.44			0.45
Net Interest Margin (FTE) on Earning Assets	3.98			3.90			3.94			3.86			3.83
Efficiency Ratio	52.61			52.18			55.12			57.33			61.78
Tangible Common Book Value Per Share	$	16.49		$	15.85		$	15.86		$	15.53		$	15.02



LOANS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
Commercial and industrial loans	$	1,258,840		$	1,194,646		$	1,146,538		$	1,084,890		$	1,060,559
Agricultural production financing and other loans to farmers	77,021			79,689			93,169			95,131			92,137
Real estate loans:
Construction	336,931			418,703			368,241			352,980			391,621
Commercial and farmland	2,118,431			1,953,062			1,941,739			1,869,703			1,806,395
Residential	737,918			739,169			739,855			758,870			769,592
Home equity	423,708			418,525			398,837			374,159			353,946
Individuals' loans for household and other personal expenditures	77,590			77,479			76,497			75,205			73,622
Lease financing receivables, net of unearned income	261			311			380			388			461
Other commercial loans	244,209			258,061			208,588			180,103			161,574
Loans	5,274,909			5,139,645			4,973,844			4,791,429			4,709,907
Allowance for loan losses	(68,225		)	(66,037		)	(63,456		)	(62,186		)	(62,086		)
NET LOANS	$	5,206,684		$	5,073,608		$	4,910,388		$	4,729,243		$	4,647,821



DEPOSITS
(Dollars In Thousands)	March 31,		December 31,		September 30,		June 30,		March 31,
	2017		2016		2016		2016		2016
Demand deposits	$	2,861,384	$	2,866,853	$	2,745,028	$	2,717,500	$	2,590,603
Savings deposits	1,565,174		1,560,752		1,545,372		1,551,210		1,549,304
Certificates and other time deposits of $100,000 or more	312,327		276,274		296,838		301,695		304,559
Other certificates and time deposits	476,741		471,247		498,203		517,720		536,120
Brokered deposits	419,683		381,372		358,799		319,429		330,484
TOTAL DEPOSITS	$	5,635,309	$	5,556,498	$	5,444,240	$	5,407,554	$	5,311,070



NET INTEREST INCOME
(Dollars in Thousands)	For the Three Months Ended
	March 31, 2017							March 31, 2016
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	30,463		$	45	0.59	%	$	75,709		$	106	0.56	%
Federal Reserve and Federal Home Loan Bank stock	17,964			189		4.21		37,632			480		5.10
Investment Securities: ⁽¹⁾
Taxable	711,490			4,308		2.42		716,486			4,328		2.42
Tax-Exempt ⁽²⁾	586,525			7,697		5.25		520,922			6,937		5.33
Total Investment Securities	1,298,015			12,005		3.70		1,237,408			11,265		3.64
Loans held for sale	840			45		21.43		6,247			122		7.81
Loans: ⁽³⁾
Commercial	3,781,045			44,092		4.66		3,449,451			38,864		4.51
Real Estate Mortgage	548,148			6,121		4.47		575,266			6,394		4.45
Installment	532,128			6,098		4.58		456,654			5,109		4.48
Tax-Exempt ⁽²⁾	318,082			3,589		4.51		181,950			2,023		4.45
Total Loans	5,180,243			59,945		4.63		4,669,568			52,512		4.50
Total Earning Assets	6,526,685			72,184		4.42		6,020,317			64,363		4.28
Net unrealized gain on securities available for sale	593							10,005
Allowance for loan losses	(66,933		)					(63,213		)
Cash and cash equivalents	104,017							101,913
Premises and equipment	93,018							96,698
Other assets	559,771							577,595
Total Assets	$	7,217,151						$	6,743,315
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,512,839		$	838	0.22	%	$	1,300,266		$	544	0.17	%
Money market deposits	789,378			341		0.17		865,932			491		0.23
Savings deposits	776,519			156		0.08		689,305			135		0.08
Certificates and other time deposits	1,165,079			2,789		0.96		1,186,458			2,893		0.98
Total Interest-bearing Deposits	4,243,815			4,124		0.39		4,041,961			4,063		0.40
Borrowings	664,921			3,111		1.87		520,087			2,709		2.08
Total Interest-bearing Liabilities	4,908,736			7,235		0.59		4,562,048			6,772		0.59
Noninterest-bearing deposits	1,346,542							1,255,328
Other liabilities	47,811							64,287
Total Liabilities	6,303,089							5,881,663
Stockholders' Equity	914,062							861,652
Total Liabilities and Stockholders' Equity	$	7,217,151		7,235		0.44		$	6,743,315		6,772		0.45
Net Interest Income				$	64,949						$	57,591
Net Interest Margin						3.98	%						3.83	%


⁽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 2017 and 2016. These totals equal $3,950 and $3,136 for the three months ended March 31, 2017 and 2016, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.