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frme-20220726

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): July 26, 2022

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)


Indiana
(State or other jurisdiction of incorporation)
001-41342			35-1544218
(Commission File Number)			(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)


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A	FRMEP	The Nasdaq Stock Market LLC

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:

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

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

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

☐ 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 ☐

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. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 26, 2022, First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2022. 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 July 26, 2022, issued by First Merchants Corporation

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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/ Michele M. Kawiecki Michele M. Kawiecki Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)
Dated: July 26, 2022

EXHIBIT INDEX

Exhibit No. Description

99.1 Press Release, dated July 26, 2022, issued by First Merchants Corporation

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

Document

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

July 26, 2022

FOR IMMEDIATE RELEASE

For more information, contact:

Nicole M. Weaver, Vice President and Director of Corporate Administration

765-521-7619

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES SECOND QUARTER 2022 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME)

Second Quarter 2022 Highlights:

•Net income available to common stockholders was $38.5 million and diluted earnings per common share totaled $.63, compared to $55.6 million and $1.03 in the second quarter of 2021, and $48.6 million and $.91 in the first quarter of 2022.

•Completed legal closing on the acquisition of Level One Bancorp, Inc. (“Level One”) on April 1, 2022.

•Adjusted net income1 was $60.0 million and adjusted diluted earnings per share1 totaled $1.01, compared to $48.2 million and $.89 in the second quarter of 2021, and $47.3 million and $.88 in the first quarter of 2022.

•Total loans grew $2.0 billion during the second quarter which included $1.6 billion from the acquisition of Level One. Excluding the forgiveness of $59.2 million in Paycheck Protection Program (“PPP”) loans, organic loan growth totaled $468.3 million or 20.1% annualized on a linked quarter basis.

•Total deposits grew $1.7 billion during the second quarter which included $1.9 billion from the acquisition of Level One reflecting a decline in deposit balances of $265.9 million or 8.2% annualized on a linked quarter basis.

•Nonaccrual loans totaled $46.0 million compared to $42.7 million on a linked quarter basis

•Net interest income totaled $128.7 million, an increase of $26.4 million or 25.8% on a linked quarter basis

Mark Hardwick, Chief Executive Officer, stated, “First Merchants is encouraged by second quarter annualized organic loan growth of 20 percent combined with core margin expansion of 22 basis points. The legal close of Level One was a key accomplishment of our second quarter improving our prospects for future growth.”

Second Quarter Financial Results

First Merchants Corporation (the “Corporation) has reported second quarter 2022 net income available to common stockholders of $38.5 million compared to $55.6 million during the same period in 2021. Diluted earnings per common share for the period totaled $.63 per share compared to the second quarter of 2021 result of $1.03 per share. Current quarter results included acquisition costs of $29.3 million resulting in a reduction of $.38 of diluted earnings per common share. The acquisition costs primarily consist of employee retention bonuses and severance, contract termination charges, professional fees, and current expected credit losses (“CECL”) Day 1 provision expense.

Total assets equaled $17.8 billion as of quarter-end and loans totaled $11.4 billion. Total loans increased $2.3 billion during the past twelve months. The acquisition of Level One contributed $1.6 billion of loans. Excluding acquired loans, the Corporation experienced organic loan growth of $1.1 billion, or 12.1 percent, during the past twelve months. This was offset by the forgiveness of PPP loans of $426.4 million. PPP loans accounted for $32.9 million of the period end loan portfolio balance. Investments increased $481.7 million, or 11.6 percent, during the last twelve months and now total $4.6 billion.

Total deposits equaled $14.6 billion as of quarter-end and increased by $2.4 billion over the past twelve months. The acquisition of Level One contributed $1.9 billion in deposits resulting in $436.7 million or 3.6% in organic deposit growth. The balance sheet growth mix resulted in an increase in the loan to deposit ratio of 3.4% over the past twelve months with the current quarter ratio ending at 78.3 percent.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $226.3 million as of quarter-end, or 1.98 percent of total loans, an increase of $30.3 million over prior quarter due to the acquisition of Level One. The ACL increased $16.6 million for CECL Day 1 purchased credit deteriorated (PCD) loans and provision expense of $14.0 million was recorded for CECL Day 1 non-PCD loans. Additionally, provision expense of $2.8 million was recorded for CECL Day 1 unfunded commitments, which increased other liabilities. Net loan charge-offs for the quarter totaled $0.3 million. No provision expense was recorded during the quarter or during the last twelve months other than CECL Day 1 expense. Non-performing assets to total assets were 0.30% for the second quarter of 2022, a decrease of nine basis points compared to 0.39% in the second quarter of 2021.

Net-interest income totaling $128.7 million for the quarter, continued to grow with an increase of $26.4 million, or 25.8 percent, over prior quarter, and an increase of $24.4 million, or 23.4 percent compared to the second quarter of 2021. Stated net-interest margin on a tax equivalent basis, totaling 3.28 percent, increased by 25 basis points compared to the first quarter of 2022 and six basis points compared to the second quarter of 2021. Net-interest margin excluding the impact of fair value accretion and PPP loans totaled 3.19%, an increase of 22 basis points compared to 2.97% for the first quarter of 2022 and an increase of 19 basis points from the second quarter of 2021. During the quarter, net-interest margin expanded 35 basis points from growth in the loan portfolio and higher loan and investment portfolio yields offset by a 10 basis point increase in funding costs.

Non-interest income, totaling $28.3 million for the quarter, increased $2.4 million or 9.2% compared to the first quarter of 2022. The increase was driven by higher services charges on deposits, gains on the sales of loans and derivative hedge fees. Non-interest income declined $2.6 million from the second quarter of 2021 due primarily to a decline on gains on the sale of loans driven by lower origination volume.

Non-interest expense totaled $97.3 million for the quarter, an increase of $25.0 million from the first quarter of 2022, and an increase of $28.0 million over the second quarter of 2021. Acquisition costs totaling $12.5 million were incurred during the quarter of which $10.0 million were one-time charges, $3.0 million reflected in salaries and benefits and $7.0 million in professional and other outside services.

The Corporation’s total risk-based capital ratio equaled 12.73 percent, common equity tier 1 capital ratio equaled 10.27 percent, and the tangible common equity ratio totaled 7.04 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

1 See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 10:30 a.m. (ET) on Tuesday, July 26, 2022.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register.vevent.com/register/BI36331b98cb7441deb05fe5de007c8125)

In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/944s4zom) during the time of the call. A replay of the webcast will be available until July 26, 2023.

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 First Merchants Private Wealth Advisors and Level One Bank (as divisions 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)	June 30,
	2022		2021
ASSETS
Cash and due from banks	$	212,559	$	167,596
Interest-bearing deposits	136,702		438,863
Investment securities, net of allowance for credit losses of $245,000 and $245,000	4,630,030		4,148,314
Loans held for sale	9,060		18,582
Loans	11,397,417		9,121,250
Less: Allowance for credit losses - loans	(226,275)		(199,775)
Net loans	11,171,142		8,921,475
Premises and equipment	117,757		103,822
Federal Home Loan Bank stock	38,111		28,736
Interest receivable	68,728		54,173
Goodwill and other intangibles	753,649		573,786
Cash surrender value of life insurance	323,013		294,462
Other real estate owned	6,521		601
Tax asset, deferred and receivable	114,965		36,924
Other assets	198,255		135,763
TOTAL ASSETS	$	17,780,492	$	14,923,097
LIABILITIES
Deposits:
Noninterest-bearing	$	3,435,331	$	2,479,853
Interest-bearing	11,135,538		9,723,547
Total Deposits	14,570,869		12,203,400
Borrowings:
Federal funds purchased	100,000		—
Securities sold under repurchase agreements	186,468		146,904
Federal Home Loan Bank advances	598,865		334,243
Subordinated debentures and other borrowings	151,299		118,498
Total Borrowings	1,036,632		599,645
Interest payable	2,978		2,929
Other liabilities	192,372		245,323
Total Liabilities	15,802,851		13,051,297
STOCKHOLDERS' EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 cumulative shares
Issued and outstanding - 125 cumulative shares	125		125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized -- 10,000 non-cumulative perpetual shares
Issued and outstanding - 10,000 non-cumulative perpetual shares	25,000		—
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 59,059,866 and 53,972,386 shares	7,383		6,747
Additional paid-in capital	1,226,378		1,009,182
Retained earnings	917,311		795,666
Accumulated other comprehensive income	(198,556)		60,080
Total Stockholders' Equity	1,977,641		1,871,800
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,780,492	$	14,923,097


CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,				June 30,
	2022		2021		2022		2021
INTEREST INCOME
Loans receivable:
Taxable	$	106,787	$	87,002	$	185,862	$	172,107
Tax-exempt	5,990		5,545		11,694		10,884
Investment securities:
Taxable	10,372		7,440		18,882		14,135
Tax-exempt	17,212		13,071		33,087		25,456

Deposits with financial institutions	610		129		840		243
Federal Home Loan Bank stock	175		88		321		266
Total Interest Income	141,146		113,275		250,686		223,091
INTEREST EXPENSE
Deposits	8,485		5,823		12,779		12,023
Federal funds purchased	76		2		76		4
Securities sold under repurchase agreements	134		75		223		162
Federal Home Loan Bank advances	1,774		1,452		2,992		2,894
Subordinated debentures and other borrowings	2,016		1,659		3,675		3,316
Total Interest Expense	12,485		9,011		19,745		18,399
NET INTEREST INCOME	128,661		104,264		230,941		204,692
Provision for credit losses - loans	16,755		—		16,755		—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	111,906		104,264		214,186		204,692
OTHER INCOME
Service charges on deposit accounts	7,690		5,596		14,109		10,860
Fiduciary and wealth management fees	7,634		7,510		14,966		13,932
Card payment fees	5,175		4,159		10,898		8,526
Net gains and fees on sales of loans	3,226		8,325		5,425		12,311
Derivative hedge fees	1,444		943		2,362		1,260
Other customer fees	662		368		1,072		736
Earnings on cash surrender value of life insurance	1,308		1,205		3,004		2,541
Net realized gains on sales of available for sale securities	90		1,761		656		3,560
Other income	1,048		1,017		1,682		1,249
Total Other Income	28,277		30,884		54,174		54,975
OTHER EXPENSES
Salaries and employee benefits	56,041		42,438		98,560		81,249
Net occupancy	6,648		5,615		12,835		12,106
Equipment	6,720		4,848		11,800		9,878
Marketing	1,414		1,122		2,150		2,246
Outside data processing fees	4,881		4,698		9,244		8,942
Printing and office supplies	381		313		726		596
Intangible asset amortization	2,303		1,464		3,669		2,821
FDIC assessments	2,924		1,461		5,116		2,829
Other real estate owned and foreclosure expenses	(266)		178		298		912
Professional and other outside services	10,267		2,976		13,220		5,519
Other expenses	6,000		4,182		12,020		8,295
Total Other Expenses	97,313		69,295		169,638		135,393
INCOME BEFORE INCOME TAX	42,870		65,853		98,722		124,274
Income tax expense	3,879		10,294		11,145		19,246
NET INCOME	38,991		55,559		87,577		105,028
Preferred stock dividends	469		—		469		—
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	38,522	$	55,559	$	87,108	$	105,028
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.64	$	1.03	$	1.55	$	1.95
Diluted Net Income Available to Common Stockholders	$	0.63	$	1.03	$	1.54	$	1.94
Cash Dividends Paid to Common Stockholders	$	0.32	$	0.29	$	0.61	$	0.55
Average Diluted Common Shares Outstanding (in thousands)	59,308		54,184		56,516		54,159


FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
NET CHARGE-OFFS (RECOVERIES)	$	263		$	1,307		$	(324)		$	4,928

AVERAGE BALANCES:
Total Assets	$	17,778,221		$	14,758,597		$	16,627,804		$	14,503,087
Total Loans	11,175,188			9,282,524			10,220,860			9,259,600
Total Earning Assets	16,435,747			13,558,956			15,355,265			13,292,617
Total Deposits	14,809,528			12,125,153			13,819,111			11,848,075
Total Stockholders' Equity	2,021,123			1,846,037			1,956,532			1,843,250

FINANCIAL RATIOS:
Return on Average Assets	0.88		%	1.51		%	1.05		%	1.45		%
Return on Average Stockholders' Equity	7.62			12.04			8.90			11.40
Return on Average Common Stockholders' Equity	7.72			12.04			8.96			11.40
Average Earning Assets to Average Assets	92.45			91.87			92.35			91.65
Allowance for Credit Losses - Loans as % of Total Loans	1.98			2.19			1.98			2.19
Net Charge-offs as % of Average Loans (Annualized)	0.01			0.06			(0.01)			0.11
Average Stockholders' Equity to Average Assets	11.37			12.51			11.77			12.71
Tax Equivalent Yield on Average Earning Assets	3.58			3.49			3.42			3.51
Interest Expense/Average Earning Assets	0.30			0.27			0.26			0.28
Net Interest Margin (FTE) on Average Earning Assets	3.28			3.22			3.16			3.23
Efficiency Ratio	58.45			48.91			55.90			49.54
Tangible Common Book Value Per Share	$	20.45		$	24.15		$	20.45		$	24.15


NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2022			2022			2021			2021			2021
Non-Accrual Loans	$	45,970		$	42,698		$	43,062		$	51,502		$	57,556
Renegotiated Loans	233			141			329			439			629
Non-Performing Loans (NPL)	46,203			42,839			43,391			51,941			58,185
Other Real Estate Owned and Repossessions	6,521			6,271			558			698			601
Non-Performing Assets (NPA)	52,724			49,110			43,949			52,639			58,786
90+ Days Delinquent	592			2,085			963			157			183
NPAs & 90 Day Delinquent	$	53,316		$	51,195		$	44,912		$	52,796		$	58,969

Allowance for Credit Losses - Loans	$	226,275		$	195,984		$	195,397		$	199,972		$	199,775
Quarterly Net Charge-offs (Recoveries)	263			(587)			4,575			(197)			1,307
NPAs / Actual Assets %	0.30		%	0.32		%	0.28		%	0.35		%	0.39		%
NPAs & 90 Day / Actual Assets %	0.30		%	0.33		%	0.29		%	0.35		%	0.40		%
NPAs / Actual Loans and OREO %	0.46		%	0.52		%	0.47		%	0.58		%	0.64		%
Allowance for Credit Losses - Loans / Actual Loans (%)	1.98		%	2.09		%	2.11		%	2.21		%	2.19		%
Net Charge-offs as % of Average Loans (Annualized)	0.01		%	(0.03)		%	0.20		%	(0.01)		%	0.06		%


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2022		2022		2021		2021		2021
ASSETS
Cash and due from banks	$	212,559	$	148,277	$	167,146	$	169,261	$	167,596
Interest-bearing deposits	136,702		395,262		474,154		369,447		438,863
Investment securities, net of allowance for credit losses	4,630,030		4,489,263		4,524,353		4,445,516		4,148,314
Loans held for sale	9,060		3,938		11,187		5,990		18,582
Loans	11,397,417		9,356,241		9,241,861		9,041,576		9,121,250
Less: Allowance for credit losses - loans	(226,275)		(195,984)		(195,397)		(199,972)		(199,775)
Net loans	11,171,142		9,160,257		9,046,464		8,841,604		8,921,475
Premises and equipment	117,757		105,883		105,655		104,814		103,822
Federal Home Loan Bank stock	38,111		26,422		28,736		28,736		28,736
Interest receivable	68,728		56,081		57,187		53,079		54,173
Goodwill and other intangibles	753,649		569,494		570,860		572,323		573,786
Cash surrender value of life insurance	323,013		291,881		291,041		291,825		294,462
Other real estate owned	6,521		6,271		558		698		601
Tax asset, deferred and receivable	114,965		73,422		35,641		39,504		36,924
Other assets	198,255		138,807		140,167		137,928		135,763
TOTAL ASSETS	$	17,780,492	$	15,465,258	$	15,453,149	$	15,060,725	$	14,923,097
LIABILITIES
Deposits:
Noninterest-bearing	$	3,435,331	$	2,745,235	$	2,709,646	$	2,554,323	$	2,479,853
Interest-bearing	11,135,538		10,160,718		10,022,931		9,794,366		9,723,547
Total Deposits	14,570,869		12,905,953		12,732,577		12,348,689		12,203,400
Borrowings:
Federal funds purchased	100,000		—		—		—		—
Securities sold under repurchase agreements	186,468		169,697		181,577		183,589		146,904
Federal Home Loan Bank advances	598,865		308,960		334,055		334,149		334,243
Subordinated debentures and other borrowings	151,299		118,677		118,618		118,558		118,498
Total Borrowings	1,036,632		597,334		634,250		636,296		599,645
Interest payable	2,978		3,589		2,762		3,736		2,929
Other liabilities	192,372		150,749		170,989		203,914		245,323
Total Liabilities	15,802,851		13,657,625		13,540,578		13,192,635		13,051,297
STOCKHOLDERS' EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 cumulative shares
Issued and outstanding - 125 cumulative shares	125		125		125		125		125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized -- 10,000 non-cumulative perpetual shares
Issued and outstanding - 10,000 non-cumulative perpetual shares	25,000		—		—		—		—
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	7,383		6,678		6,676		6,689		6,747
Additional paid-in capital	1,226,378		987,404		985,818		988,659		1,009,182
Retained earnings	917,311		897,818		864,839		832,728		795,666
Accumulated other comprehensive income	(198,556)		(84,392)		55,113		39,889		60,080
Total Stockholders' Equity	1,977,641		1,807,633		1,912,571		1,868,090		1,871,800
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,780,492	$	15,465,258	$	15,453,149	$	15,060,725	$	14,923,097


CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2022			2022			2021			2021			2021
INTEREST INCOME
Loans receivable:
Taxable	$	106,787		$	79,075		$	80,583		$	85,319		$	87,002
Tax-exempt	5,990			5,704			5,635			5,591			5,545
Investment securities:
Taxable	10,372			8,510			8,028			7,788			7,440
Tax-exempt	17,212			15,875			15,411			14,464			13,071

Deposits with financial institutions	610			230			173			218			129
Federal Home Loan Bank stock	175			146			163			168			88
Total Interest Income	141,146			109,540			109,993			113,548			113,275
INTEREST EXPENSE
Deposits	8,485			4,294			5,589			5,707			5,823
Federal funds purchased	76			—			1			—			2
Securities sold under repurchase agreements	134			89			75			77			75
Federal Home Loan Bank advances	1,774			1,218			1,389			1,389			1,452
Subordinated debentures and other borrowings	2,016			1,659			1,666			1,660			1,659
Total Interest Expense	12,485			7,260			8,720			8,833			9,011
NET INTEREST INCOME	128,661			102,280			101,273			104,715			104,264
Provision for credit losses - loans	16,755			—			—			—			—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	111,906			102,280			101,273			104,715			104,264
OTHER INCOME
Service charges on deposit accounts	7,690			6,419			6,462			6,249			5,596
Fiduciary and wealth management fees	7,634			7,332			7,078			7,352			7,510
Card payment fees	5,175			5,723			3,937			4,156			4,159
Net gains and fees on sales of loans	3,226			2,199			3,423			3,955			8,325
Derivative hedge fees	1,444			918			1,562			1,028			943
Other customer fees	662			410			361			393			368
Earnings on cash surrender value of life insurance	1,308			1,696			2,051			2,468			1,205
Net realized gains on sales of available for sale securities	90			566			358			1,756			1,761
Other income	1,048			634			615			1,144			1,017
Total Other Income	28,277			25,897			25,847			28,501			30,884
OTHER EXPENSES
Salaries and employee benefits	56,041			42,519			42,432			43,314			42,438
Net occupancy	6,648			6,187			5,644			5,576			5,615
Equipment	6,720			5,080			4,994			4,529			4,848
Marketing	1,414			736			1,840			1,676			1,122
Outside data processing fees	4,881			4,363			4,581			4,794			4,698
Printing and office supplies	381			345			356			265			313
Intangible asset amortization	2,303			1,366			1,463			1,463			1,464
FDIC assessments	2,924			2,192			1,862			1,552			1,461
Other real estate owned and foreclosure expenses	(266)			564			171			(91)			178
Professional and other outside services	10,267			2,953			3,627			2,767			2,976
Other expenses	6,000			6,020			5,466			5,539			4,182
Total Other Expenses	97,313			72,325			72,436			71,384			69,295
INCOME BEFORE INCOME TAX	42,870			55,852			54,684			61,832			65,853
Income tax expense	3,879			7,266			6,951			9,062			10,294
NET INCOME	38,991			48,586			47,733			52,770			55,559
Preferred stock dividends	469			—			—			—			—
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	38,522		$	48,586		$	47,733		$	52,770		$	55,559
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.64		$	0.91		$	0.89		$	0.98		$	1.03
Diluted Net Income Available to Common Stockholders	$	0.63		$	0.91		$	0.89		$	0.98		$	1.03
Cash Dividends Paid to Common Stockholders	$	0.32		$	0.29		$	0.29		$	0.29		$	0.29
Average Diluted Common Shares Outstanding (in thousands)	59,308			53,616			53,660			53,960			54,184
FINANCIAL RATIOS:
Return on Average Assets	0.88		%	1.26		%	1.25		%	1.41		%	1.51		%
Return on Average Stockholders' Equity	7.62			10.28			10.10			11.17			12.04
Return on Average Common Stockholders' Equity	7.72			10.28			10.10			11.17			12.04
Average Earning Assets to Average Assets	92.45			92.23			91.86			91.57			91.87
Allowance for Credit Losses - Loans as % of Total Loans	1.98			2.09			2.11			2.21			2.19
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)	0.01			(0.03)			0.20			(0.01)			0.06
Average Stockholders' Equity to Average Assets	11.37			12.23			12.36			12.59			12.51
Tax Equivalent Yield on Average Earning Assets	3.58			3.23			3.29			3.46			3.49
Interest Expense/Average Earning Assets	0.30			0.20			0.25			0.26			0.27
Net Interest Margin (FTE) on Average Earning Assets	3.28			3.03			3.04			3.20			3.22
Efficiency Ratio	58.45			52.79			53.49			51.18			48.91
Tangible Common Book Value Per Share	$	20.45		$	23.26		$	25.21		$	24.31		$	24.15


LOANS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2022		2022		2021		2021		2021
Commercial and industrial loans	$	3,297,477	$	2,826,660	$	2,714,565	$	2,573,615	$	2,671,076
Agricultural land, production and other loans to farmers	214,904		209,077		246,442		240,686		235,020
Real estate loans:
Construction	745,983		552,975		523,066		521,889		491,200
Commercial real estate, non-owner occupied	2,423,185		2,073,197		2,135,459		2,150,387		2,263,497
Commercial real estate, owner occupied	1,264,563		974,521		986,720		952,441		953,501
Residential	1,813,297		1,226,695		1,159,127		1,154,373		1,127,442
Home equity	586,108		512,641		523,754		531,307		489,997
Individuals' loans for household and other personal expenditures	157,264		147,593		146,092		135,093		130,819
Public finance and other commercial loans	894,636		832,882		806,636		781,785		758,698
Loans	11,397,417		9,356,241		9,241,861		9,041,576		9,121,250
Allowance for credit losses - loans	(226,275)		(195,984)		(195,397)		(199,972)		(199,775)
NET LOANS	$	11,171,142	$	9,160,257	$	9,046,464	$	8,841,604	$	8,921,475


DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2022		2022		2021		2021		2021
Demand deposits	$	8,785,889	$	7,806,033	$	7,704,190	$	7,317,399	$	7,261,603
Savings deposits	4,875,880		4,444,417		4,334,802		4,301,483		4,157,552
Certificates and other time deposits of $100,000 or more	436,942		252,033		273,379		283,396		304,394
Other certificates and time deposits	446,973		380,293		389,752		404,010		423,922
Brokered deposits	25,185		23,177		30,454		42,401		55,929
TOTAL DEPOSITS	$	14,570,869	$	12,905,953	$	12,732,577	$	12,348,689	$	12,203,400


CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2022						June 30, 2021
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	329,626	$	610	0.74	%	$	545,752	$	129	0.09	%
Federal Home Loan Bank stock	38,111		175		1.84		28,736		88		1.22
Investment Securities: (1)
Taxable	2,189,193		10,372		1.90		1,732,367		7,440		1.72
Tax-Exempt (2)	2,703,629		21,788		3.22		1,969,577		16,546		3.36
Total Investment Securities	4,892,822		32,160		2.63		3,701,944		23,986		2.59
Loans held for sale	28,491		315		4.42		25,039		237		3.79
Loans: (3)
Commercial	8,134,050		85,867		4.22		6,953,227		70,886		4.08
Real Estate Mortgage	1,458,317		12,657		3.47		912,662		9,488		4.16
Installment	772,610		7,948		4.11		659,515		6,391		3.88
Tax-Exempt (2)	781,720		7,582		3.88		732,081		7,019		3.84
Total Loans	11,175,188		114,369		4.09		9,282,524		94,021		4.05
Total Earning Assets	16,435,747		147,314		3.58	%	13,558,956		118,224		3.49	%
Total Non-Earning Assets	1,342,474						1,199,641
Total Assets	$	17,778,221					$	14,758,597
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	5,372,474	$	4,569	0.34	%	$	4,745,181	$	3,560	0.30	%
Money market deposits	3,024,560		2,130		0.28		2,337,143		796		0.14
Savings deposits	1,966,054		916		0.19		1,740,233		462		0.11
Certificates and other time deposits	948,799		870		0.37		812,370		1,005		0.49
Total Interest-bearing Deposits	11,311,887		8,485		0.30		9,634,927		5,823		0.24
Borrowings	818,851		4,000		1.95		644,702		3,188		1.98
Total Interest-bearing Liabilities	12,130,738		12,485		0.41		10,279,629		9,011		0.35
Noninterest-bearing deposits	3,497,641						2,490,226
Other liabilities	128,719						142,705
Total Liabilities	15,757,098						12,912,560
Stockholders' Equity	2,021,123						1,846,037
Total Liabilities and Stockholders' Equity	$	17,778,221	12,485				$	14,758,597	9,011
Net Interest Income (FTE)			$	134,829					$	109,213
Net Interest Spread (FTE) (4)					3.17	%					3.14	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.58	%					3.49	%
Interest Expense / Average Earning Assets					0.30	%					0.27	%
Net Interest Margin (FTE) (5)					3.28	%					3.22	%

(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. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $6,168 and $4,949 for the three months ended June 30, 2022 and 2021, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.



CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Six Months Ended
	June 30, 2022						June 30, 2021
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	406,698	$	840	0.41	%	$	493,791	$	243	0.10	%
Federal Home Loan Bank stock	33,040		321		1.94		28,736		266		1.85
Investment Securities: (1)
Taxable	2,074,074		18,882		1.82		1,613,847		14,135		1.75
Tax-Exempt (2)	2,620,593		41,882		3.20		1,896,643		32,223		3.40
Total Investment Securities	4,694,667		60,764		2.59		3,510,490		46,358		2.64
Loans held for sale	18,181		355		3.91		20,572		393		3.82
Loans: (3)
Commercial	7,504,740		150,545		4.01		6,915,234		140,060		4.05
Real Estate Mortgage	1,191,075		20,497		3.44		943,830		18,774		3.98
Installment	741,994		14,465		3.90		666,870		12,880		3.86
Tax-Exempt (2)	764,870		14,803		3.87		713,094		13,777		3.86
Total Loans	10,220,860		200,665		3.93		9,259,600		185,884		4.01
Total Earning Assets	15,355,265		262,590		3.42	%	13,292,617		232,751		3.51	%
Total Non-Earning Assets	1,272,539						1,210,470
Total Assets	$	16,627,804					$	14,503,087
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	5,200,923	$	6,977	0.27	%	$	4,681,439	$	7,269	0.31	%
Money market deposits	2,770,904		3,002		0.22		2,212,425		1,631		0.15
Savings deposits	1,917,005		1,357		0.14		1,700,601		938		0.11
Certificates and other time deposits	813,482		1,443		0.35		835,722		2,185		0.52
Total Interest-bearing Deposits	10,702,314		12,779		0.24		9,430,187		12,023		0.25
Borrowings	718,270		6,966		1.94		659,826		6,376		1.93
Total Interest-bearing Liabilities	11,420,584		19,745		0.35		10,090,013		18,399		0.36
Noninterest-bearing deposits	3,116,797						2,417,888
Other liabilities	133,891						151,936
Total Liabilities	14,671,272						12,659,837
Stockholders' Equity	1,956,532						1,843,250
Total Liabilities and Stockholders' Equity	$	16,627,804	19,745				$	14,503,087	18,399
Net Interest Income (FTE)			$	242,845					$	214,352
Net Interest Spread (FTE) (4)					3.07	%					3.15	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.42	%					3.51	%
Interest Expense / Average Earning Assets					0.26	%					0.28	%
Net Interest Margin (FTE) (5)					3.16	%					3.23	%

(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. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2022 and 2021. These totals equal $11,904 and $9,660 for the six months ended June 30, 2022 and 2021, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.


ADJUSTED EPS EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") AND ACQUISITION-RELATED EXPENSES - NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)	Three Months Ended										Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
	2022		2022		2021		2021		2021		2022		2021
Net Income Available to Common Shareholders - GAAP	$	38,522	$	48,586	$	47,733	$	52,770	$	55,559	$	87,108	$	105,028
Adjustments:
PPP loan income	(891)		(1,884)		(3,721)		(8,211)		(9,725)		(2,775)		(18,968)
Acquisition-related expenses	12,549		152		—		—		—		12,701		—
Acquisition-related provision expense	16,755		—		—		—		—		16,755		—
Tax on adjustment	(6,967)		425		912		2,013		2,385		(6,542)		4,651
Adjusted Net Income Available to Common Stockholders - Non-GAAP	$	59,968	$	47,279	$	44,924	$	46,572	$	48,219	$	107,247	$	90,711

Average Diluted Common Shares Outstanding (in thousands)	59,308		53,616		53,660		53,960		54,184		56,516		54,159

Diluted Earnings Per Common Share - GAAP	$	0.63	$	0.91	$	0.89	$	0.98	$	1.03	$	1.54	$	1.94
Adjustments:
PPP loan income	(0.01)		(0.04)		(0.07)		(0.15)		(0.18)		(0.05)		(0.35)
Acquisition-related expenses	0.22		—		—		—		—		0.22		—
Acquisition-related provision expense	0.30		—		—		—		—		0.30		—
Tax on adjustment	(0.13)		0.01		0.02		0.04		0.04		(0.12)		0.08
Adjusted Diluted Earnings Per Common Share - Non-GAAP	$	1.01	$	0.88	$	0.84	$	0.87	$	0.89	$	1.89	$	1.67