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): October 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))

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 October 26, 2017, First Merchants Corporation issued a press release to report its financial results for the third quarter ended September 30, 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 October 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: October 26, 2017

EXHIBIT INDEX


Exhibit No.	Description

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

Exhibit

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

October 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 THIRD QUARTER 2017 RESULTS

First Merchants Corporation (NASDAQ - FRME) reported record third quarter 2017 net income of $24.4 million, compared to $21.1 million during the third quarter of 2016. Earnings per share for the period totaled $.50 per share, which included $.11 per share of acquisition expenses, compared to $.51 during the same period in 2016. The acquisition expenses in the quarter totaled $7.9 million and were primarily related to the July 14, 2017 acquisition of Independent Alliance Banks, Inc.

Year-to-date net income totaled a record $71.7 million, compared to $58.8 million during the same period in 2016. Earnings per share for the nine months ended September 30, 2017 totaled $1.63 per share, an increase of $.20 per share, or 14 percent, over the same period in 2016. In the first nine months of 2017, acquisition expenses related to the completion of The Arlington Bank and Independent Alliance Bank acquisitions, totaled $10.8 million, or $.16 per share.

Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants achieved outstanding financial results in a special quarter for our clients, teammates and shareholders. We had several accomplishments to include building the First Merchants franchise, adding capital strength and growing earnings power. The addition of Independent Alliance Bank into First Merchants establishes a significant presence in the Fort Wayne market led by strong local management. Our organic balance sheet growth throughout the company demonstrates our commitment in vibrant and growing communities. When coupled with a wider net interest margin, the company produced record net interest income.”

Total assets reached a record $9.0 billion as of quarter-end and loans totaled a record $6.5 billion, compared to $7.0 billion and $5.0 billion, as of September 30, 2016 representing increases of 28.9 and 30.4 percent, respectively. Total deposits reached record levels as well, totaling $6.9 billion as of September 30, 2017, representing a 26.9 percent increase. Of the increase in total loans and total deposits, the acquisitions represent 19.3 percent and 20.5 percent, respectively. Tangible common equity also increased to record levels for the quarter totaling $817 million, or $16.62 per share, compared to $647 million, or $15.86 per share, as of September 30, 2016.

Net-interest income totaled a record $74.4 million for the quarter and net-interest margin increased by 9 basis points over the third quarter of 2016, totaling 4.03 percent. Yields on earning assets totaled 4.56 percent and the cost of supporting liabilities totaled .53 percent. Fair value accretion added 17 basis points to net-interest margin this quarter, compared to 24 basis points in the third quarter of 2016.

Non-interest income totaled $18.7 million for the quarter, up $1.8 million from the third quarter 2016 total of $16.9 million. Non-interest expense totaled $58.7 million for the quarter, up from $44.1 million during the third quarter of 2016. Of the increase, $7.9 million was the result of acquisition-related expenses.

The Corporation’s provision expense totaled $2.1 million compared to $1.9 million during the same period in 2016. The increase in provision expense, along with net recoveries of $800,000, provided allowance coverage for organic loan growth of 9.2 percent annualized. The allowance for loan losses totals $73.4 million as of September 30, 2017, up from $63.5 million as of September 30, 2016. Non-accrual loans totaled $32.3 million as of quarter-end and the allowance is 1.13 percent of total loans and 1.44 percent of non-purchased loans.

As of September 30, 2017, the Corporation’s total risk-based capital ratio equaled 13.76 percent, common equity tier 1 capital ratio equaled 11.03 percent, and the tangible common equity ratio totaled 9.39 percent.

CONFERENCE CALL

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

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until November 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 10112760.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme171026.html during the time of the call. A replay of the web cast will be available until October 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 has one full-service bank charter, First Merchants Bank. The Bank also operates as Lafayette Bank & Trust; iAB Financial Bank; and First Merchants Private Wealth Advisors (each 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)	September 30,
	2017			2016
ASSETS
Cash and cash equivalents	$	146,607		$	99,602
Interest-bearing time deposits	72,950			33,803
Investment securities	1,468,887			1,300,428
Loans held for sale	4,514			1,482
Loans	6,483,448			4,973,844
Less: Allowance for loan losses	(73,354		)	(63,456		)
Net loans	6,410,094			4,910,388
Premises and equipment	102,485			95,540
Federal Home Loan Bank stock	23,825			18,044
Interest receivable	32,366			23,652
Goodwill and other intangibles	478,558			259,844
Cash surrender value of life insurance	222,437			201,856
Other real estate owned	11,912			10,242
Tax asset, deferred and receivable	36,024			31,779
Other assets	38,744			35,692
TOTAL ASSETS	$	9,049,403		$	7,022,352
LIABILITIES
Deposits:
Noninterest-bearing	$	1,662,814		$	1,307,886
Interest-bearing	5,248,205			4,136,354
Total Deposits	6,911,019			5,444,240
Borrowings:
Federal funds purchased	100,000			58,358
Securities sold under repurchase agreements	142,107			138,671
Federal Home Loan Bank advances	406,820			297,022
Subordinated debentures and term loans	139,686			128,288
Total Borrowings	788,613			622,339
Interest payable	4,956			3,733
Other liabilities	61,695			51,175
Total Liabilities	7,766,283			6,121,487
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares	125			125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 and 50,000,000 shares ⁽¹⁾
Issued and outstanding - 49,140,594 and 40,799,025 shares	6,143			5,100
Additional paid-in capital	833,451			506,848
Retained earnings	449,759			384,868
Accumulated other comprehensive income (loss)	(6,358		)	3,924
Total Stockholders' Equity	1,283,120			900,865
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	9,049,403		$	7,022,352

⁽¹⁾On May 1, 2017, the shareholders of First Merchants Corporation approved an amendment to the Articles of Incorporation to increase the number of shares of common stock authorized to issue from 50,000,000 to 100,000,000 shares.



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts)	September 30,				September 30,
	2017		2016		2017		2016
INTEREST INCOME
Loans receivable:
Taxable	$	71,491	$	53,819	$	187,234	$	156,407
Tax-exempt	2,851		1,649		7,676		4,429
Investment securities:
Taxable	4,524		3,992		13,012		12,522
Tax-exempt	5,455		4,668		15,549		13,760
Deposits with financial institutions	284		55		442		283
Federal Reserve and Federal Home Loan Bank stock	242		193		635		906
Total Interest Income	84,847		64,376		224,548		188,307
INTEREST EXPENSE
Deposits	6,710		3,926		15,971		12,028
Federal funds purchased	175		27		506		62
Securities sold under repurchase agreements	133		91		331		283
Federal Home Loan Bank advances	1,464		853		3,619		2,467
Subordinated debentures and term loans	1,945		1,797		5,602		5,368
Total Interest Expense	10,427		6,694		26,029		20,208
NET INTEREST INCOME	74,420		57,682		198,519		168,099
Provision for loan losses	2,083		1,900		7,343		3,240
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	72,337		55,782		191,176		164,859
OTHER INCOME
Service charges on deposit accounts	5,044		4,667		13,656		13,228
Fiduciary activities	2,995		2,448		8,244		7,318
Other customer fees	5,341		4,777		15,610		14,531
Earnings on cash surrender value of life insurance	1,575		614		5,444		3,387
Net gains and fees on sales of loans	2,317		1,989		5,209		5,166
Net realized gains on sales of available for sale securities	332		839		1,497		2,542
Other income	1,064		1,527		2,288		2,911
Total Other Income	18,668		16,861		51,948		49,083
OTHER EXPENSES
Salaries and employee benefits	33,244		26,651		86,052		79,558
Net occupancy	4,371		4,348		12,552		12,429
Equipment	3,478		2,947		9,192		9,428
Marketing	1,021		630		2,378		2,218
Outside data processing fees	3,162		2,382		8,864		6,476
Printing and office supplies	366		314		905		1,047
Intangible asset amortization	1,698		978		3,592		2,933
FDIC assessments	704		534		1,853		2,486
Other real estate owned and foreclosure expenses	330		637		1,592		2,303
Professional and other outside services	5,843		1,242		10,843		4,882
Other expenses	4,491		3,452		11,300		11,665
Total Other Expenses	58,708		44,115		149,123		135,425
INCOME BEFORE INCOME TAX	32,297		28,528		94,001		78,517
Income tax expense	7,939		7,469		22,314		19,759
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	24,358	$	21,059	$	71,687	$	58,758
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.50	$	0.51	$	1.64	$	1.44
Diluted Net Income Available to Common Stockholders	$	0.50	$	0.51	$	1.63	$	1.43
Cash Dividends Paid	$	0.18	$	0.14	$	0.51	$	0.39
Average Diluted Shares Outstanding (in thousands)	48,644		41,026		44,063		40,970



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
NET CHARGE-OFFS	$	(800	)	$	630		$	26		$	2,237

AVERAGE BALANCES:
Total Assets	$	8,793,666		$	6,907,303		$	7,866,643		$	6,836,412
Total Loans	6,312,810			4,836,923			5,647,486			4,748,846
Total Earning Assets	7,840,403			6,198,206			7,064,659			6,116,952
Total Deposits	6,790,053			5,428,453			6,108,042			5,388,775
Total Stockholders' Equity	1,244,472			896,934			1,048,420			878,302

FINANCIAL RATIOS:
Return on Average Assets	1.11		%	1.22		%	1.22		%	1.15		%
Return on Average Stockholders' Equity	7.83			9.39			9.12			8.92
Return on Average Common Stockholders' Equity	7.83			9.39			9.12			8.92
Average Earning Assets to Average Assets	89.16			89.73			89.81			89.48
Allowance for Loan Losses as % of Total Loans	1.13			1.28			1.13			1.28
Net Charge-offs as % of Average Loans (Annualized)	(0.05		)	0.05			—			0.06
Average Stockholders' Equity to Average Assets	14.15			12.99			13.33			12.85
Tax Equivalent Yield on Earning Assets	4.56			4.37			4.47			4.32
Cost of Supporting Liabilities	0.53			0.43			0.49			0.44
Net Interest Margin (FTE) on Earning Assets	4.03			3.94			3.98			3.88
Efficiency Ratio	58.30			55.12			55.05			58.01
Tangible Common Book Value Per Share	$	16.62		$	15.86		$	16.62		$	15.86



NON-PERFORMING ASSETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2017			2017			2017			2016			2016
Non-Accrual Loans	$	32,253		$	27,347		$	27,920		$	29,998		$	34,105
Renegotiated Loans	626			384			876			4,747			3,940
Non-Performing Loans (NPL)	32,879			27,731			28,796			34,745			38,045
Other Real Estate Owned	11,912			11,893			8,293			8,966			10,242
Non-Performing Assets (NPA)	44,791			39,624			37,089			43,711			48,287
90+ Days Delinquent	425			634			123			112			1,625
NPAs & 90 Day Delinquent	$	45,216		$	40,258		$	37,212		$	43,823		$	49,912

Allowance for Loan Losses	$	73,354		$	70,471		$	68,225		$	66,037		$	63,456
Quarterly Net Charge-offs	(800		)	629			197			(164		)	630
NPAs / Actual Assets %	0.49		%	0.51		%	0.51		%	0.61		%	0.69		%
NPAs & 90 Day / Actual Assets %	0.50		%	0.52		%	0.51		%	0.61		%	0.71		%
NPAs / Actual Loans and OREO %	0.69		%	0.70		%	0.70		%	0.85		%	0.97		%
Allowance for Loan Losses / Actual Loans (%)	1.13		%	1.25		%	1.29		%	1.28		%	1.28		%
Net Charge-offs as % of Average Loans (Annualized)	(0.05		)%	0.05		%	0.02		%	(0.01		)%	0.05		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2017			2017			2017			2016			2016
ASSETS
Cash and cash equivalents	$	146,607		$	142,650		$	104,247		$	127,927		$	99,602
Interest-bearing time deposits	72,950			48,305			20,439			24,459			33,803
Investment securities	1,468,887			1,343,323			1,327,217			1,304,505			1,300,428
Loans held for sale	4,514			4,036			1,262			2,929			1,482
Loans	6,483,448			5,613,144			5,274,909			5,139,645			4,973,844
Less: Allowance for loan losses	(73,354		)	(70,471		)	(68,225		)	(66,037		)	(63,456		)
Net loans	6,410,094			5,542,673			5,206,684			5,073,608			4,910,388
Premises and equipment	102,485			92,637			91,311			94,432			95,540
Federal Home Loan Bank stock	23,825			19,015			17,964			17,964			18,044
Interest receivable	32,366			27,597			25,174			26,194			23,652
Goodwill and other intangibles	478,558			309,686			257,963			258,866			259,844
Cash surrender value of life insurance	222,437			200,125			202,574			201,671			201,856
Other real estate owned	11,912			11,893			8,293			8,966			10,242
Tax asset, deferred and receivable	36,024			27,331			32,074			39,384			31,779
Other assets	38,744			35,758			30,991			30,706			35,692
TOTAL ASSETS	$	9,049,403		$	7,805,029		$	7,326,193		$	7,211,611		$	7,022,352
LIABILITIES
Deposits:
Noninterest-bearing	$	1,662,814		$	1,398,237		$	1,373,778		$	1,348,267		$	1,307,886
Interest-bearing	5,248,205			4,618,867			4,261,531			4,208,231			4,136,354
Total Deposits	6,911,019			6,017,104			5,635,309			5,556,498			5,444,240
Borrowings:
Federal funds purchased	100,000			134,608			102,000			120,349			58,358
Securities sold under repurchase agreements	142,107			127,884			139,007			146,480			138,671
Federal Home Loan Bank advances	406,820			312,715			338,919			298,923			297,022
Subordinated debentures and term loans	139,686			128,742			128,862			128,445			128,288
Total Borrowings	788,613			703,949			708,788			694,197			622,339
Interest payable	4,956			3,477			3,875			3,110			3,733
Other liabilities	61,695			45,383			48,751			56,149			51,175
Total Liabilities	7,766,283			6,769,913			6,396,723			6,309,954			6,121,487
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding	125			125			125			125			125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 and 50,000,000 shares ⁽¹⁾
Issued and outstanding	6,143			5,394			5,131			5,114			5,100
Additional paid-in capital	833,451			593,904			509,953			509,018			506,848
Retained earnings	449,759			434,309			417,983			400,981			384,868
Accumulated other comprehensive income (loss)	(6,358		)	1,384			(3,722		)	(13,581		)	3,924
Total Stockholders' Equity	1,283,120			1,035,116			929,470			901,657			900,865
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	9,049,403		$	7,805,029		$	7,326,193		$	7,211,611		$	7,022,352



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	September 30,			June 30,			March 31,			December 31,			September 30,
	2017			2017			2017			2016			2016
INTEREST INCOME
Loans receivable:
Taxable	$	71,491		$	59,386		$	56,357		$	53,895		$	53,819
Tax-exempt	2,851			2,492			2,333			2,096			1,649
Investment securities:
Taxable	4,524			4,180			4,308			3,893			3,992
Tax-exempt	5,455			5,091			5,003			4,862			4,668
Deposits with financial institutions	284			114			44			67			55
Federal Reserve and Federal Home Loan Bank stock	242			204			189			192			193
Total Interest Income	84,847			71,467			68,234			65,005			64,376
INTEREST EXPENSE
Deposits	6,710			5,137			4,124			3,886			3,926
Federal funds purchased	175			103			228			40			27
Securities sold under repurchase agreements	133			110			88			91			91
Federal Home Loan Bank advances	1,464			1,177			978			797			853
Subordinated debentures and term loans	1,945			1,840			1,817			1,817			1,797
Total Interest Expense	10,427			8,367			7,235			6,631			6,694
NET INTEREST INCOME	74,420			63,100			60,999			58,374			57,682
Provision for loan losses	2,083			2,875			2,385			2,417			1,900
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	72,337			60,225			58,614			55,957			55,782
OTHER INCOME
Service charges on deposit accounts	5,044			4,438			4,174			4,534			4,667
Fiduciary activities	2,995			2,609			2,640			2,500			2,448
Other customer fees	5,341			5,406			4,863			4,784			4,777
Earnings on cash surrender value of life insurance	1,575			2,971			898			886			614
Net gains and fees on sales of loans	2,317			1,617			1,275			1,886			1,989
Net realized gains on sales of available for sale securities	332			567			598			847			839
Other income	1,064			826			398			683			1,527
Total Other Income	18,668			18,434			14,846			16,120			16,861
OTHER EXPENSES
Salaries and employee benefits	33,244			27,076			25,732			22,994			26,651
Net occupancy	4,371			3,965			4,216			4,568			4,348
Equipment	3,478			2,907			2,807			3,069			2,947
Marketing	1,021			792			565			790			630
Outside data processing fees	3,162			3,086			2,616			2,672			2,382
Printing and office supplies	366			275			264			301			314
Intangible asset amortization	1,698			991			903			977			978
FDIC assessments	704			579			570			550			534
Other real estate owned and foreclosure expenses	330			731			531			574			637
Professional and other outside services	5,843			3,266			1,734			1,634			1,242
Other expenses	4,491			3,648			3,161			3,805			3,452
Total Other Expenses	58,708			47,316			43,099			41,934			44,115
INCOME BEFORE INCOME TAX	32,297			31,343			30,361			30,143			28,528
Income tax expense	7,939			7,207			7,168			7,850			7,469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	24,358		$	24,136		$	23,193		$	22,293		$	21,059

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.50		$	0.57		$	0.57		$	0.55		$	0.51
Diluted Net Income Available to Common Stockholders	$	0.50		$	0.57		$	0.56		$	0.55		$	0.51
Cash Dividends Paid	$	0.18		$	0.18		$	0.15		$	0.15		$	0.14
Average Diluted Shares Outstanding (in thousands)	48,644			42,244			41,221			41,124			41,026
FINANCIAL RATIOS:
Return on Average Assets	1.11		%	1.28		%	1.29		%	1.26		%	1.22		%
Return on Average Stockholders' Equity	7.83			9.82			10.15			9.87			9.39
Return on Average Common Stockholders' Equity	7.83			9.82			10.15			9.87			9.39
Average Earning Assets to Average Assets	89.16			89.97			90.43			89.86			89.73
Allowance for Loan Losses as % of Total Loans	1.13			1.25			1.29			1.28			1.28
Net Charge-offs as % of Average Loans (Annualized)	(0.05		)	0.05			0.02			(0.01		)	0.05
Average Stockholders' Equity to Average Assets	14.15			12.98			12.67			12.75			12.99
Tax Equivalent Yield on Earning Assets	4.56			4.44			4.42			4.32			4.37
Cost of Supporting Liabilities	0.53			0.49			0.44			0.42			0.43
Net Interest Margin (FTE) on Earning Assets	4.03			3.95			3.98			3.90			3.94
Efficiency Ratio	58.30			53.61			52.61			52.18			55.12
Tangible Common Book Value Per Share	$	16.62		$	16.97		$	16.49		$	15.85		$	15.86



LOANS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2017			2017			2017			2016			2016
Commercial and industrial loans	$	1,436,092		$	1,289,884		$	1,258,840		$	1,194,646		$	1,146,538
Agricultural production financing and other loans to farmers	117,751			75,746			77,021			79,689			93,169
Real estate loans:
Construction	498,862			442,389			336,931			418,703			368,241
Commercial and farmland	2,571,253			2,167,729			2,118,431			1,953,062			1,941,739
Residential	938,437			847,580			737,918			739,169			739,855
Home equity	502,240			436,038			423,708			418,525			398,837
Individuals' loans for household and other personal expenditures	86,406			79,887			77,590			77,479			76,497
Lease financing receivables, net of unearned income	3,877			232			261			311			380
Other commercial loans	328,530			273,659			244,209			258,061			208,588
Loans	6,483,448			5,613,144			5,274,909			5,139,645			4,973,844
Allowance for loan losses	(73,354		)	(70,471		)	(68,225		)	(66,037		)	(63,456		)
NET LOANS	$	6,410,094		$	5,542,673		$	5,206,684		$	5,073,608		$	4,910,388



DEPOSITS
(Dollars In Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2017		2017		2017		2016		2016
Demand deposits	$	3,562,718	$	3,015,846	$	2,861,384	$	2,866,853	$	2,745,028
Savings deposits	1,884,705		1,708,478		1,565,174		1,560,752		1,545,372
Certificates and other time deposits of $100,000 or more	503,668		362,589		312,327		276,274		296,838
Other certificates and time deposits	585,042		511,935		476,741		471,247		498,203
Brokered deposits	374,886		418,256		419,683		381,372		358,799
TOTAL DEPOSITS	$	6,911,019	$	6,017,104	$	5,635,309	$	5,556,498	$	5,444,240



NET INTEREST INCOME
(Dollars in Thousands)	For the Three Months Ended
	September 30, 2017							September 30, 2016
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	139,905		$	284	0.81	%	$	54,120		$	55	0.40	%
Federal Reserve and Federal Home Loan Bank stock	23,146			242		4.18		18,095			193		4.24
Investment Securities: ⁽¹⁾
Taxable	718,965			4,524		2.52		729,223			3,992		2.18
Tax-Exempt ⁽²⁾	645,577			8,392		5.20		559,845			7,182		5.10
Total Investment Securities	1,364,542			12,916		3.79		1,289,068			11,174		3.45
Loans held for sale	8,117			136		6.70		742			73		39.14
Loans: ⁽³⁾
Commercial	4,556,653			55,266		4.85		3,556,187			41,653		4.66
Real Estate Mortgage	785,317			8,596		4.38		567,015			6,521		4.58
Installment	595,164			7,494		5.04		493,807			5,572		4.49
Tax-Exempt ⁽²⁾	367,559			4,385		4.77		219,172			2,537		4.60
Total Loans	6,312,810			75,877		4.81		4,836,923			56,356		4.64
Total Earning Assets	7,840,403			89,319		4.56		6,198,206			67,778		4.37
Net unrealized gain on securities available for sale	7,733							11,738
Allowance for loan losses	(71,753		)					(62,453		)
Cash and cash equivalents	129,058							102,023
Premises and equipment	101,979							95,541
Other assets	786,246							562,248
Total Assets	$	8,793,666						$	6,907,303
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,834,965		$	1,706	0.37	%	$	1,454,992		$	669	0.18	%
Money market deposits	990,682			747		0.30		793,173			384		0.19
Savings deposits	887,201			203		0.09		754,401			171		0.09
Certificates and other time deposits	1,450,448			4,054		1.12		1,128,595			2,702		0.95
Total Interest-bearing Deposits	5,163,296			6,710		0.52		4,131,161			3,926		0.38
Borrowings	694,203			3,717		2.14		521,125			2,768		2.11
Total Interest-bearing Liabilities	5,857,499			10,427		0.71		4,652,286			6,694		0.57
Noninterest-bearing deposits	1,626,757							1,297,292
Other liabilities	64,938							60,791
Total Liabilities	7,549,194							6,010,369
Stockholders' Equity	1,244,472							896,934
Total Liabilities and Stockholders' Equity	$	8,793,666		10,427		0.53		$	6,907,303		6,694		0.43
Net Interest Income				$	78,892						$	61,084
Net Interest Margin						4.03	%						3.94	%


⁽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 $4,472 and $3,402 for the three months ended September 30, 2017 and 2016, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.



NET INTEREST INCOME
(Dollars in Thousands)	For the Nine Months Ended
	September 30, 2017							September 30, 2016
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	71,456		$	442	0.82	%	$	76,440		$	283	0.49	%
Federal Reserve and Federal Home Loan Bank stock	19,941			635		4.25		26,359			906		4.59
Investment Securities: ⁽¹⁾
Taxable	716,118			13,012		2.42		725,311			12,522		2.31
Tax-Exempt ⁽²⁾	609,658			23,922		5.23		539,996			21,169		5.24
Total Investment Securities	1,325,776			36,934		3.71		1,265,307			33,691		3.56
Loans held for sale	4,875			245		6.70		3,541			291		10.98
Loans: ⁽³⁾
Commercial	4,085,901			144,759		4.72		3,502,715			121,017		4.62
Real Estate Mortgage	660,435			21,946		4.43		570,330			19,032		4.46
Installment	558,106			20,284		4.85		473,645			16,067		4.53
Tax-Exempt ⁽²⁾	338,169			11,809		4.66		198,615			6,814		4.58
Total Loans	5,647,486			199,043		4.70		4,748,846			163,221		4.59
Total Earning Assets	7,064,659			237,054		4.47	%	6,116,952			198,101		4.32	%
Net unrealized gain on securities available for sale	4,437							10,892
Allowance for loan losses	(69,269		)					(62,633		)
Cash and cash equivalents	128,866							102,767
Premises and equipment	95,707							96,284
Other assets	642,243							572,150
Total Assets	$	7,866,643						$	6,836,412
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,649,175		$	3,632	0.29	%	$	1,395,036		$	1,850	0.18	%
Money market deposits	894,450			1,688		0.25		835,968			1,377		0.22
Savings deposits	818,800			520		0.08		720,375			455		0.08
Certificates and other time deposits	1,299,932			10,131		1.04		1,157,992			8,346		0.96
Total Interest-bearing Deposits	4,662,357			15,971		0.46		4,109,371			12,028		0.39
Borrowings	659,260			10,058		2.03		506,077			8,180		2.16
Total Interest-bearing Liabilities	5,321,617			26,029		0.65		4,615,448			20,208		0.58
Noninterest-bearing deposits	1,445,685							1,279,404
Other liabilities	50,921							63,258
Total Liabilities	6,818,223							5,958,110
Stockholders' Equity	1,048,420							878,302
Total Liabilities and Stockholders' Equity	$	7,866,643		26,029		0.49		$	6,836,412		20,208		0.44
Net Interest Income				$	211,025						$	177,893
Net Interest Margin						3.98	%						3.88	%


⁽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 $12,506 and $9,794 for the nine months ended September 30, 2017 and 2016, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.