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, 2023
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | |||||
| (Commission File Number) | (IRS Employer Identification No.) | ||||
(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 | ||||||
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:
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 Thursday October 26, 2023, First Merchants Corporation will conduct a third quarter 2023 earnings conference call and web cast at 11:30 a.m. (ET). A copy of the slide presentation utilized on the conference call is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
| Exhibit 99.1 | |||||
| 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: October 26, 2023 | |||||||||||
EXHIBIT INDEX
| Exhibit | Description | ||||
| Exhibit 99.1 | |||||
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
INVESTOR UPDATE Third Quarter 2023
Forward Looking Statement This presentation 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 forward-looking statements include, but are not limited to, statements relating to 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 economic and business conditions; the existence or exacerbation of general geopolitical instability and uncertainty; the effects of a pandemic or other unforeseeable event; the ability of First Merchants to integrate recent acquisitions and attract new customers; 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 (including the ability to grow and maintain core deposits and retain large, uninsured deposits), 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 undertakes no obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this presentation or press release. In addition, the company’s past results of operations do not necessarily indicate its anticipated future results. NON-GAAP FINANCIAL MEASURES These slides contain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, First Merchants Corporation has provided reconciliations within the slides, as necessary, of the non-GAAP financial measure to the most directly comparable GAAP financial measure.
Executive Management Team 3 Mark Hardwick Chief Executive Officer Mark K. Hardwick currently serves as the Chief Executive Officer of First Merchants Corporation and First Merchants Bank. Mark joined First Merchants in November of 1997 as Corporate Controller and was promoted to Chief Financial Officer in April of 2002. In 2016, Mark’s title expanded to include Chief Operating Officer, overseeing the leadership responsibilities for finance, operations, technology, risk, legal, and facilities for the corporation. Prior to joining First Merchants Corporation, Mark served as a senior accountant with BKD, LLP in Indianapolis. Mark is a graduate of Ball State University with a Master of Business Administration and Bachelor’s degree in Accounting. He is also a certified public accountant and a graduate of the Stonier School of Banking. FMB: 25 Yrs Banking: 25 Yrs FMB: 8 Yrs Banking: 20 Yrs Michele Kawiecki Chief Financial Officer Michele Kawiecki currently serves as Executive Vice President and Chief Financial Officer for First Merchants Corporation and First Merchants Bank. Michele joined First Merchants in 2015 as Director of Finance. Prior to joining First Merchants, Michele spent 12 years with UMB Financial Corporation in Kansas City, Missouri having served as Senior Vice President of Capital Management and Assistant Treasurer; Director of Corporate Development and the Enterprise Project Management Office; and Chief Risk Officer. Prior to UMB, she worked for PriceWaterhouseCoopers LLP as an Audit Manager. Michele earned both a Master of Science in Accounting and an Executive Master of Business Administration from the University of Missouri-Kansas City and a Bachelor’s degree in Accounting from Dakota Wesleyan University. FMB: 16 Yrs Banking: 36 Yrs Mike Stewart President Mike Stewart currently serves as President for First Merchants Corporation and First Merchants Bank overseeing the Commercial, Private Wealth, and Consumer Lines of Business for the Bank. Mike joined the bank in 2008 as Chief Banking Officer. Prior to joining First Merchants, Mike spent 18 years with National City Bank in various commercial sales and credit roles. Mike has a Master of Business Administration from Butler University and a Bachelor’s degree in Finance from Millikin University. FMB: 15 Yrs Banking: 33 Yrs John Martin Chief Credit Officer John Martin currently serves as Executive Vice President and Chief Credit Officer of First Merchants Corporation overseeing the Commercial, Small Business and Consumer Credit functions, as well as the Mortgage Line of Business. Prior to joining First Merchants, John spent 18 years with National City Bank in various sales and senior credit roles. John is a graduate of Indiana University where he earned a Bachelor of Arts in Economics. He also holds a Master of Business Administration in Finance from Case Western Reserve University.
First Merchants Corporation (NASDAQ: FRME) Financial Highlights as of 9/30/2023 $18.0 Billion $12.3 Billion $14.6 Billion $8.0 Billion Assets Under Advisement* Total Assets Total Loans Total Deposits TCE/TA: YTD Return on TCE YTD ROAA: Dividend Yield: Price / Tangible Book: Price / LTM EPS: 1.33% 7.69% 18.10% 4.74% 1.24x 6.6x Moody’s a3 Baseline Credit Assessment1 Market Cap $1.7B Largest financial services holding company headquartered in Central Indiana 118 Banking Centers 4 *Assets Under Management - $3.4 Billion 1Moody’s Credit Opinion – First Merchants Corporation, October 25, 2022, baseline Credit Assessment (BCA) reflects a bank’s standalone credit strength
Highlights 5 ▪ Total deposits increased $65.4 million or 1.8% annualized on a linked quarter basis ▪ Loan yields remain strong at 6.58% with new/renewed loan yields averaging 7.88% for the quarter ▪ Maintained a low 50’s Efficiency Ratio, while managing increasing deposit betas ▪ Maintained strong credit quality and a robust allowance for credit losses ▪ Reported EPS of $0.94 compared to $1.08 in 3Q22. Excluding PPP income and expenses related to the Level One acquisition, current EPS was $0.94 compared to $1.12 in 3Q221,2 10.38% ROE 16.54% ROTCE2 ROE & ROTCE (Annualized) $55.9 Million $0.94 Per Share Net Income & EPS1 1.24% ROA 1.48% PTPP ROA2 ROA (Annualized) 1Net Income and EPS reported on a diluted basis and for common stockholders 2See “Non-GAAP Financial Information” for reconciliation Third Quarter Year-to-Date 11.28% ROE 18.10% ROTCE2 ROE & ROTCE (Annualized) $179.9 Million $3.03 Per Share Net Income & EPS1 1.33% ROA 1.58% PTPP ROA2 ROA (Annualized) ▪ Reported EPS of $3.03 compared to $2.62 in 2022. Excluding PPP income and expenses related to the Level One acquisition, current YTD EPS was $3.03 compared to $3.01 in 20221,2 ▪ Commercial & Consumer deposits increased $327.8 million ▪ Brokered deposits declined $133.6 million ▪ Municipal deposits declined $128.8 million due to seasonality
Business Strategy 6 Full Spectrum of Debt Capital and Treasury Service Offerings Located in Prime Growth Markets Small Business & SBA Middle Market C&I Investment Real Estate Public Finance Sponsor Finance Full Spectrum of Consumer Deposit and Lending Offerings Supported by: Talented, Customer Service Oriented Banking Center and Call Center Professionals Competitive Digital Solutions ▪ Deposit and CRM ▪ Online Banking ▪ Mobile Banking Diverse Locations in Stable Rural and Growth Metro Markets Comprehensive and coordinated approach to personal wealth management Expertise in: Investment Management Private Banking Fiduciary Estate Financial Planning Strengthen commercial relationships with personal services for executives/owners and retirement plan services for companies Partner with consumer to offer personal investment advice through First Merchants Investment Services Offering a full suite of mortgage solutions to assist with purchase, construction, renovation, and home finance Strengthen existing Commercial, Consumer and Private Wealth relationships Create new household relationships Support underserved borrowers and neighborhoods Deliver solutions through a personalized, efficient, and scalable model Commercial Banking Private Wealth Advisors Consumer Banking Mortgage Banking Asset Based Lending Syndications Treasury Management Services Merchant Processing Services
Loan Growth Annualized1 Deposit Growth Annualized1 Business Highlights 7 Indianapolis Indianapolis MSA Rank: 8 Deposits: $3.4B Loans: $4.2B Columbus Columbus MSA Rank: 14 Deposits: $0.6B Loans: $1.5B Northwest Indiana Lake County Rank: 4 Lafayette MSA Rank: 2 Deposits: $3.4B Loans: $2.1B Northeast Indiana Muncie MSA Rank: 1 Ft Wayne MSA Rank: 3 Deposits: $4.4B Loans: $1.9B Michigan Monroe MSA Rank: 1 Detroit MSA Rank: 9 Deposits: $2.8B Loans: $2.6B MSA and County ranking data per FDIC 1Commercial includes Municipal deposits and Consumer includes Private Wealth and Mortgage ▪ Commercial loans declined in large part to continued client focus on working capital management and continued evaluation of new capital projects given the current interest rate environment. ▪ The total Commercial pipeline improved at quarter end with regional C&I, IRE, Sponsor and Syndications all increasing to prior year levels. ▪ The Consumer increase was attributed to increases in Installment, Private Banking and Residential Mortgage. *During the second quarter, the non-relational, term loan B portfolio of $116 million was sold with a gain. ▪ Strong deposit growth continued for the quarter and year to date. ▪ As noted on slide 5, the Municipal deposits decline was the driver for the Commercial deposit decline of 1.9% noted above. Adjusting for the seasonal decline in Municipal deposits, Commercial deposits grew at a 5.1% annualized rate. ▪ Consumer line of business showed strong growth in both the branch network and private client relationships. 3Q23 Balance ($B) Growth Commercial $7.3 (1.9)% Consumer $6.3 9.5% Total Deposit Growth QTD 1.8% Total Deposit Growth YTD 2.4% 3Q23 Balance ($B) Growth Commercial $9.3 (1.7)% Consumer $2.9 7.3% Total Loan Growth QTD 0.2% Total Loan Growth YTD 3.2% *Adjusted Total Loan Growth YTD 4.6%
Third Quarter Financial Results 8 ▪ 53.91% Efficiency Ratio reflecting strong operating leverage ▪ Net interest income, decreased $4.5 million due to higher funding cost and mix change which offset higher earning asset income ▪ Pre-Tax, Pre-Provision (PTPP) Earnings totaled $67.4 million PTPP ROA was 1.48% and PTPP ROE was 12.51%1 ▪ TCE Ratio decreased 0.30% to 7.69% due to the impact of AOCI ▪ Tangible Book Value per share totaled $22.43, a decrease of $0.91 from prior quarter 3Q23 Highlights 1See “Non-GAAP Financial Information” for reconciliation ($M except per share data) 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 Variance Linked Quarter % Variance Linked QTR- Annualized Balance Sheet & Asset Quality 1. Total Assets $17,719.0 $17,938.3 $18,178.9 $17,968.4 $17,996.6 $28.2 0.6% 2. Total Loans 11,675.4 12,013.0 12,250.9 12,297.5 12,302.4 4.9 0.2% 3. Investments 4,294.8 4,263.8 4,057.4 3,891.5 3,713.7 (177.8) -18.3% 4. Deposits 14,434.8 14,382.7 14,703.3 14,581.2 14,646.6 65.4 1.8% 5. Total Equity 1,906.7 2,034.8 2,122.4 2,145.6 2,092.6 (52.9) -9.9% 6. TCE Ratio 6.66% 7.34% 7.75% 7.99% 7.69% -0.30% 7. Total RBC Ratio 12.84 13.08 13.23 13.48 13.66% 0.18 8. ACL / Loans 1.94 1.86 1.82 1.80 1.67 -0.13 9. NCOs / Avg Loans -0.01 0.12 0.01 0.06 0.66 0.60 10. NPAs + 90PD / Assets 0.29 0.28 0.34 0.43 0.33 -0.10 Summary Income Statement 11. Net Interest Income $140.3 $149.0 $144.1 $137.9 $133.4 ($4.5) -3.3% 12. Provision for Loan Losses 0.0 0.0 0.0 0.0 2.0 2.0 13. Noninterest Income 29.6 24.1 25.0 26.3 27.8 1.5 5.7% 14. Noninterest Expense 96.4 89.7 93.7 92.6 93.8 1.2 1.3% 15. Pre-tax Income 73.5 83.4 75.4 71.6 65.4 (6.2) -8.7% 16. Provision for Taxes 9.8 12.6 11.3 10.7 9.0 (1.7) -15.9% 17. Net Income 63.7 70.8 64.1 60.9 56.4 (4.5) -7.4% 18. Preferred Stock Dividends 0.5 0.5 0.5 0.5 0.5 0.0 19. Net Income Available to Common Stockholders 63.3 70.3 63.6 60.4 55.9 (4.5) -7.4% 20. ROAA 1.43% 1.59% 1.42% 1.34% 1.24% -0.10% 21. ROAE 12.54 14.36 12.21 11.29 10.38 -0.91 22. ROTCE 20.85 24.21 19.82 18.04 16.54 -1.50 23. Net Interest Margin 3.55 3.72 3.58 3.39 3.29 -0.10 24. Efficiency Ratio 53.34 48.60 51.72 52.21 53.91 1.70 Per Share 25. Earnings per Diluted Share $1.08 $1.19 $1.07 $1.02 $0.94 ($0.08) 26. Tangible Book Value per Share 19.26 21.45 22.93 23.34 22.43 (0.91) 27. Dividend per Share 0.32 0.32 0.32 0.34 0.34 0.00 28. Dividend Payout Ratio 29.6% 26.9% 29.9% 33.3% 36.2% 2.8% For the Three Months Ended,
Year-to-Date Financial Results 9 ▪ 52.60% Efficiency Ratio reflecting strong operating leverage ▪ Net interest income, increased $44.1 million primarily due to the addition of Level One in 2Q22 ▪ Pre-Tax, Pre-Provision (PTPP) Earnings totaled $214.3 million PTPP ROA was 1.58% and PTPP ROE was 13.44%1 ▪ TCE Ratio increased 1.03% to 7.69% over prior year ▪ Tangible Book Value per share totaled $22.43, an increase of $3.17 over prior year Year-to-Date Highlights 1See “Non-GAAP Financial Information” for reconciliation ($M except per share data) 2021 2022 2023 Variance YOY % Variance YOY Balance Sheet & Asset Quality 1. Total Assets $15,060.7 $17,719.0 $17,996.6 $277.7 1.6% 2. Total Loans 9,047.6 11,675.4 12,302.4 627.0 5.4% 3. Investments 4,445.5 4,294.8 3,713.7 (581.0) -13.5% 4. Deposits 12,348.7 14,434.8 14,646.6 211.8 1.5% 5. Total Equity 1,868.1 1,906.7 2,092.6 186.0 9.8% 6. TCE Ratio 8.94% 6.66% 7.69% 1.03% 7. Total RBC Ratio 14.02 12.84 13.66% 0.82 8. ALLL / Loans 2.21 1.94 1.67 -0.27 9. NCOs / Avg Loans 0.07 -0.01 0.24 0.25 10. NPAs + 90PD / Assets 0.35 0.29 0.33 0.04 Summary Income Statement 11. Net Interest Income $309.4 $371.2 $415.3 $44.1 11.9% 12. Provision for Loan Losses 0.0 16.8 2.0 (14.8) 13. Noninterest Income 83.5 83.8 79.2 (4.6) -5.5% 14. Noninterest Expense 206.8 266.0 280.2 14.2 5.3% 15. Pre-tax Income 186.1 172.3 212.3 40.1 23.3% 16. Provision for Taxes 28.3 20.9 31.0 10.1 48.2% 17. Net Income 157.8 151.3 181.3 30.0 19.8% 18. Preferred Stock Dividends 0.0 0.9 1.4 0.5 19. Net Income Available to Common Stockholders 157.8 150.4 179.9 29.5 19.6% 20. ROAA 1.43% 1.19% 1.33% 0.14% 21. ROAE 11.32 10.14 11.28 1.14 22. ROTCE 16.65 16.22 18.10 1.88 23. Net Interest Margin 3.22 3.30 3.42 0.12 24. Efficiency Ratio 50.10 54.95 52.60 -2.35 Per Share 25. Earnings per Diluted Share $2.92 $2.62 $3.03 $0.41 26. Tangible Book Value per Share 24.31 19.26 22.43 3.17 27. Dividend per Share 0.84 0.93 1.00 0.07 28. Dividend Payout Ratio 28.8% 35.5% 33.0% -2.5% For the Nine Months Ended September 30,
Municipal Bonds 56% Mortgage- Backed Securities 25% Collateralized Mortgage Obligations 6% U.S. Agencies 12% Corporate Obligations 1% ▪ Net unrealized AFS Loss of $382.8 million ($269.8 M prior Q) ▪ Net unrealized HTM Loss of $472.6 million ($ 359.7 M prior Q) Investment Portfolio Highlights 10 3Q23 Investment Portfolio Composition Yield on Investments (%) / Total Investments ($B) $3.7B Total Investment Portfolio Gains / LossesHighlights Realized Gains/Losses ▪ 3Q 2022 $0.4 million gain ▪ 4Q 2022 $0.1 million gain ▪ 1Q 2023 $1.6 million loss ▪ 2Q 2023 $1.4 million loss ▪ 3Q 2023 $1.7 million loss Unrealized Losses▪ Quarterly bond sales of $33 million / $347 million YTD ▪ Effective duration of 6.6 years ▪ Cash flow of $335 million through the end of 2024 / ~2.12% yield ▪ AA rated municipal bond portfolio ▪ ~53% of portfolio classified as Held-to-Maturity ▪ Allowance for Credit Losses for Investments of $245,000 $4.3 $4.3 $4.1 $3.9 $3.7 2.66% 2.66% 2.63% 2.56% 2.55% 3Q22 4Q22 1Q23 2Q23 3Q23 Investments ($B) Yield on Investments (%)
Loan Portfolio Highlights 11 3Q23 Loan Composition Yield on Loans (%) / Total Loans ($B) $12.3B Total 3Q23 Portfolio by Yield Type Highlights Total loan rate mix as of 3Q23 • $8.1 billion variable rate • $4.2 billion fixed rate ▪ Portfolio composition is ~75% Commercial oriented ▪ Loan yields remained strong at 6.58% ▪ New/renewed loan yields averaged 7.88% for the quarter compared to 7.30% in 2Q23 $0.9 $0.7 $0.7$0.4$0.7$0.7 Fixed Rate 34% Prime-Based 12% Other Variable Rates 15% SOFR-Based 39% Commercial & Industrial 28.4% Commercial Real Estate Owner-Occupied 9.4% Commercial Real Estate Non-Owner Occupied 19.2% Construction Land & Land Development 8.3% Agricultural Land & Production 1.9% Public Finance/Other Commercial 7.8% Residential Mortgage 18.6% Home Equity 5.0% Other Consumer 1.4% $11.7 $12.0 $12.3 $12.3 $12.3 4.76% 5.58% 6.00% 6.34% 6.58% 3Q22 4Q22 1Q23 2Q23 3Q23 Total Loans ($B) Yield on Loans (%)
Allowance for Credit Losses - Loans 12 3Q23 Allowance for Credit Losses - Loans Highlights ▪ $2.0 million Q3 provision expense ▪ $5.0 million provision exp. recorded for ACL – Loans ▪ $3.0 million reserve reduction for unfunded commitments ▪ The reserve for unfunded commitments totals $20.3 million, a reduction of $3.0 million in Q3, and is recorded in Other Liabilities ▪ The remaining fair value accretion on acquired loans is $24.9 million inclusive of credit and interest rate marks Change in ACL – Loans 1Reflects $14 million for CECL Day 1 non-PCD loans. Total provision expense for 2022 of $16.8 million also includes $2.8 million for Level One’s unfunded commitments. $226.7 $223.3 $223.1 $221.1 $205.8 1.94% 1.86% 1.82% 1.80% 1.67% 3Q22 4Q22 1Q23 2Q23 3Q23 Allowance Allowance to Loans $195,397 $223,277 $205,782 $16,599 $13,955 $5,000 $2,674 $22,495 ACL - Loans 12/31/2021 Level One - PCD Credit Mark Net Charge- offs 2022 Provision Exp. 2022 ACL - Loans 12/31/2022 Net Charge- offs YTD Provision Exp. 2023 YTD ACL - Loans 9/30/2023 Increase Decrease 1
Demand Deposits 54%Savings Deposits 31% Certificates & Time Deposits > $100k 9% Certificates & Time Deposits < $100k 5% Brokered Certificates of Deposits 1% Deposit Portfolio Highlights 13 3Q23 Deposit Composition Highlights $14.6B Total 1Total brokered deposits of $734 million, which includes brokered CDs of $81 million 2Defined as total deposits less time deposits > $100k Cost of Total Deposits (%) / Total Deposits ($B) ▪ Strong core deposit base • 91% core deposits2 • 17% noninterest bearing • 41% yield 5 bps or less ▪ Total deposit costs increased to 2.32% ▪ 51% cumulative interest-bearing deposit beta, 47% prior quarter ▪ Insured 71.5% / Uninsured 28.5% ▪ Average deposit account balance of $34,000 1 $14.4 $14.4 $14.7 $14.6 $14.6 0.46% 0.92% 1.41% 1.99% 2.32% 3Q22 4Q22 1Q23 2Q23 3Q23 Total Deposits ($B) Cost of Total Deposits (%)
Net Interest Margin 14 $105.1$97.1 $97.3 $105.1 $107.0$97.8 $107.0 $97.3 $105.1 $110.0$109.2 $107.0 $105.1 $109.2 $110.0 $106.9 1Adjusted for Fair Value Accretion and PPP Loan Income 3Q22 4Q22 1Q23 2Q23 3Q23 1. Net Interest Income - FTE ($millions) 146.6$ 155.3$ 150.4$ 143.7$ 139.3$ 2. Fair Value Accretion 3.2$ 2.7$ 2.4$ 2.0$ 2.0$ 3. PPP Loan Income 0.3$ 0.1$ -$ -$ -$ 4. Adjusted Net Interest Income - FTE1 143.1$ 152.5$ 148.0$ 141.7$ 137.3$ 5. Tax Equivalent Yield on Earning Assets 4.11% 4.73% 5.06% 5.36% 5.55% 6. Interest Expense/Average Earning Assets 0.56% 1.01% 1.48% 1.97% 2.26% 7. Net Interest Margin 3.55% 3.72% 3.58% 3.39% 3.29% 8. Fair Value Accretion Effect 0.08% 0.07% 0.06% 0.05% 0.05% 9. Impact of PPP Loans 0.00% 0.00% 0.00% 0.00% 0.00% 10. Adjusted Net Interest Margin1 3.47% 3.65% 3.52% 3.34% 3.24% 1 Adjusted for Fair Value Accret ion and PPP Loan Income $146.6 $155.3 $150.4 $143.7 $139.3 3.55% 3.72% 3.58% 3.39% 3.29% 3Q22 4Q22 1Q23 2Q23 3Q23 Net Interest Income - FTE ($millions) Net Interest Margin
Wealth Management $7.4 24% Gain on Sale of Loans $5.5 18% Service Charges $8.0 26% Card Payment Fees $4.7 15% Gain (Loss) on Sale of Securities ($1.7) -5% Derivative Hedge Fees $0.5 1%BOLI $1.8 6% Other Customer Fees $0.4 1%Other $1.2 4% Noninterest Income Highlights 15 3Q23 Noninterest Income Detail ($M) $27.8M Total Noninterest Income Trends ($M) Fee Income / Revenue Highlights ▪ Customer-related fees totaling $26.5 million for 3Q23, increased $1.7 million from 2Q23 driven primarily by higher gains on the sales of mortgage loans ▪ Losses of $1.7 million recognized on the sale of $33 million of available-for-sale securities 16.8% 13.4% 14.2% 15.5% 16.6% $7.2 $7.5 $7.9 $7.4 $7.4 $2.5 $2.1 $2.4 $3.6 $5.5 $7.2 $7.1 $7.4 $7.8 $8.0 $4.8 $4.5 $5.2 $4.5 $4.7 $7.9 $2.9 $2.1 $3.0 $2.2 $29.6M $24.1M $25.0M $26.3M $27.8M 3Q22 4Q22 1Q23 2Q23 3Q23 Wealth Management Gain on Sale of Loans Service Charges Card Payment Fees Other
53.34% 48.60% 51.72% 52.21% 53.91% Salary & Benefits $55.6 59% Premises & Equipment $12.5 13% Outside Data Processing $6.6 7% Professional & Other Outside Services $3.8 4% Intangible Asset Amortization $2.2 3%Marketing $2.4 3% FDIC Expense $3.0 3% Other $7.8 8% Noninterest Expense Highlights 16 3Q23 Noninterest Expense Detail $93.9M Total Noninterest Expense Trends ($M) Efficiency Ratio Highlights ▪ Increase in Other expenses reflects $1.3 million in increased marketing costs somewhat offset by a decline in professional fees. 13Q22, and 4Q22 Efficiency Ratio excluding acquisition costs, see “Non-GAAP Financial Information” for reconciliation 51.39%1 48.37%1 $56.0 $52.3 $57.5 $54.8 $55.6 $12.7 $12.8 $13.4 $12.9 $12.5 $6.8 $5.6 $6.1 $6.6 $6.6 $20.9 $19.0 $16.7 $18.3 $19.2 $96.4M $89.7M $93.7M $92.6M $93.9M 3Q22 4Q22 1Q23 2Q23 3Q23 Salary & Benefits Premises & Equipment Outside Data Processing Other
Capital Ratios 17 Tangible Common Equity Ratio Common Equity Tier 1 Ratio Total Risk-Based Capital Ratio 9.31% 9.31% 9.57% 9.31% 9.65%9.57%9.31% 9.57% 9.65% 9.04% ▪ TCE Ratio including marks on held-to-maturity securities portfolio is 5.64% ▪ CET1 including net unrealized loss in AOCI on available-for-sale securities is 9.39% Highlights 6.66% 7.34% 7.75% 7.99% 7.69% 3Q22 4Q22 1Q23 2Q23 3Q23 TCE Ratio Target TCE (8.00%) 10.40% 10.65% 10.82% 11.07% 11.26% 3Q22 4Q22 1Q23 2Q23 3Q23 CET 1 Ratio Target CET1 Ratio (10.00%) 12.84% 13.08% 13.23% 13.48% 13.66% 3Q22 4Q22 1Q23 2Q23 3Q23 TRBC Ratio Target TRBC Ratio (12.50%)
3Q23 Highlights Loan Portfolio 18 Geography Loan Portfolio Trends ($M) 84.6% of borrowers within four state Midwest geography ▪ C&I - Sponsor Finance up $31 million ▪ Construction/Land/Land Dev. up $72 million Year Over Year Highlights Loan growth of $744 million or 6.4%1 ▪ Balanced commercial loan growth - $481 million1 • C&I - Regional Banking - $76 million1 • C&I - Sponsor Finance - $199 million • CRE/Constr/Land/Land Dev. - $193 million • CRE NOO - $61 million ▪ Total Resi Mtg & Cons. - $263 million • Mortgage growth of $272 million, primarily from portfolio ARM strategy 3Q22 4Q22 1Q23 2Q23 3Q23 1. C&I - Regional Banking 2,703$ 2,827$ 2,831$ 2,733$ 2,662$ 2. C&I - Sponsor Finance 630 612 674 798 829 3. CRE Owner Occupied 1,266 1,244 1,242 1,180 1,154 4. Construction/Land/Land Dev. 829 836 961 950 1,022 5. CRE Non-Owner Occupied 2,299 2,407 2,375 2,380 2,360 6. Agricultural 222 242 220 230 234 7. Public Finance/Other Commercial 915 933 959 964 967 8. Total Commercial Loans 8,864 9,101 9,262 9,235 9,228 9. Residential Mortgage 2,014 2,103 2,195 2,276 2,286 10. Home Equity 622 631 621 614 609 11. Other Consumer 175 178 173 173 179 12. Total Resi Mortgage & Consumer 2,811 2,912 2,989 3,063 3,074 13. Total Loans 11,675$ 12,013$ 12,251$ 12,298$ 12,302$ 1Adjusted for the sale of non-relational, term loan B loans of $116 million during the 2nd quarter.
C&I Includes commercial and industrial, sponsor and owner- occupied real estate loans C&I - Sponsor Finance ▪ Line utilization Q3’23 40.9% from 41.7% Q2’23 ▪ $644 million in Shared National Credits ▪ $60.7 million of SBA guaranteed loans 1Reclassed ~$200 million from RE leasing to F&I in 3Q Loan Portfolio Insights 19 C&I ▪ $185 million Resi Real Estate Construction ▪ $837 million CRE Construction & Land Construction Finance Home Equity / Other Consumer Residential Mortgage ▪ > 95% of $679 million in consumer loans had a credit score exceeding 669 at origination2 ▪ $263 million residential mortgage secured, related to commercial loan relationships ▪ $2.0 billion residential mortgage loans • > 90% of $1.8 billion in residential portfolio loans had a credit score at origination exceeding 6693 Commercial Mortgage & Consumer 2Excludes ~14% of loans where origination data is unavailable 3Excludes ~13% of residential loans where origination data is unavailable ▪ $829 million to 86 companies ▪ Senior Debt/Adj. EBITDA < 3.0X ~ 68% ▪ Total Debt/Adj. EBITDA < 4.0X ~ 80% ▪ FCCR > 1.50X ~ 60% ▪ ~2.7% Classified ($M) Balance Commit. Multi-Family $508 $820 60.7% Industrial 90 113 10.8% Self Storage 72 78 8.6% Office - Medical 23 27 2.7% Office - General 10 29 1.2% % CRE Constr/Land 1
Office - Maturities Loan Portfolio Insights (continued) 20 Total Loans $12.3 Billion Commercial Real Estate (Non-Owner Occupied) ($M) Multi- Family Industrial Retail Office Warehouse / Storage Hotel Other Total CRE (NOO) Balance: $678.6 $388.0 $374.5 $259.8 $240.8 $153.6 $265.3 $2,360.6 Commitment: $717.6 $400.4 $380.8 $265.8 $255.9 $154.1 $298.0 $2,472.6 # of loans: 468 492 324 219 101 32 132 1,768 % of Total Loans: 5.6% 3.1% 3.0% 2.1% 2.0% 1.2% 2.2% 19.2% Average Loan Balance: $1.5 $0.8 $1.2 $1.2 $2.4 $4.8 $2.0 $1.3 Top 10 - Avg. Loan Com: $18.2 $8.6 $9.9 $11.2 $14.8 $12.2 $16.3 $23.4 Office (Non-Owner Occupied) ($M) ▪ Top 10 loans are 41% of total office with WALTV of ~60% at origination ▪ Largest NOO Office $25 million, medical office, 39% LTV ▪ 2nd largest $19 million, 40% owner occupied Office Maturities $259.8 Million General Office $124.9 Medical 71.6 Mixed 26.7 Government 21.1 Other 15.5 Multi Tenant 157.9 Single Tenant 101.9 Michigan 90.5 Indiana 66.6 Ohio 36.6 Oklahoma 25.0 Illinois 24.0 Other 17.1 Office Type Office Tenant Classification Office Geographic Office % Total Loans
Asset Quality 21 Asset Quality Trends ($M) Highlights ▪ Top three nonaccruals declined from $34.6 million to $17.1 million • Senior Living • Rental and sale of machinery equipment • Material Handling ▪ NPAs + 90PD declined $17.6 million or 14 bps to 0.49% of loans and ORE ▪ Classified Loans declined $24.8 million. A decline of 20 bps as a % of loans ▪ Q3 Net Charge-offs of $20.4 million • $19.1 million related to charge-off of two non-accruals from Q2 2023 3Q22 4Q22 1Q23 2Q23 3Q23 1. Non-Accrual Loans 43.5$ 42.3$ 46.6$ 69.2$ 53.1$ 2. Other Real Estate 6.5 6.5 7.8 7.7 6.5 3. 90PD Loans 0.7 1.7 7.0 0.4 0.1 4. Renegotiated Loans 0.2 0.2 - - - 5. NPAs + 90PD 50.9$ 50.7$ 61.4$ 77.3$ 59.7$ 6. NPAs + 90PD/Loans and ORE 0.44% 0.42% 0.50% 0.63% 0.49% 7. Classified Loans 207.1$ 215.2$ 250.5$ 257.0$ 232.2$ 8. Classified Loans/Loans 1.77% 1.79% 2.04% 2.09% 1.89% 9. Net Charge-offs (QTD) (0.4)$ 3.4$ 0.2$ 1.9$ 20.4$ 10. QTD NCO/Avg. Loans (Annualized) -0.01% 0.12% 0.01% 0.06% 0.66%
Nonperforming Assets 22 Nonperforming Assets Roll Forward ($M) Nonaccrual Migration: ▪ $17.6 million reduction in NPAs and 90 day past due • $7.5 million in new nonaccruals. Largest loan was a $1.2 million automotive parts manufacturer • $1.1 million OREO property sold this quarter • 90 days PD reduced $0.3 million Highlights 3Q22 4Q22 1Q23 2Q23 3Q23 1. Beginning Balance NPAs + 90PD 53.3$ 50.9$ 50.7$ 61.4$ 77.3$ Nonaccrual 2. Add: New Nonaccruals 9.0 7.3 15.4 33.2 7.5 3. Less: To Accrual or Payoff (10.7) (4.8) (8.6) (8.3) (2.5) 4. Less: To OREO 0.1 0.1 (1.4) - (0.2) 5. Less: Charge-offs (0.9) (3.8) (1.1) (2.3) (20.9) 6. Nonaccrual Loans Change (2.5) (1.2) 4.3 22.6 (16.1) Other Real Estate Owned (ORE) 7. Add: New ORE Properties 0.1 0.1 1.4 - 0.2 8. Less: ORE Sold (0.1) (0.1) (0.1) (0.1) (1.4) 9. Less: ORE Losses (write-downs) - - - - - 10. ORE Change - - 1.3 (0.1) (1.2) 11. 90PD Change 0.1 1.0 5.3 (6.6) (0.3) 12. Renegotiated Loans Change - - (0.2) - - 13. NPAs + 90PD Change (2.4) (0.2) 10.7 15.9 (17.6) 14. Ending Balance NPAs + 90PD 50.9$ 50.7$ 61.4$ 77.3$ 59.7$
$10.95 $12.17 $13.65 $14.68 $15.85 $16.96 $19.12 $21.94 $24.27 $25.21 $21.45 $22.43 $10.44 $12.12 $13.27 $14.38 $15.83 $16.78 $19.24 $21.24 $22.64 $24.09 $25.42 $27.53 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD'23 TBVPS TBVPS Without AFS OCI 242.2% 165.4% FRME S&P BMI US Bank Track Record of Shareholder Value 23 10-Year Total Return (2012-2022) Earnings per Share Tangible Book Value per Share Dividends per Share CAGR 2012-2022: 10.5% CAGR 2012-2022: 7.0% Adjusted CAGR1 9.3% Return on Tangible Common Equity 1Tangible book value per share excluding unrealized gain/loss in available for sale securities. CAGR 2012-2022: 28.7% 1 $1.41 $1.41 $1.65 $1.72 $1.98 $2.12 $3.22 $3.19 $2.74 $3.81 $3.81 $3.03 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD'23 $0.10 $0.18 $0.29 $0.41 $0.54 $0.69 $0.84 $1.00 $1.04 $1.13 $1.25 $1.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD'23 14.04% 12.69% 12.94% 12.47% 13.26%13.29% 18.77% 15.81% 12.21% 16.17% 18.12% 18.10% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD'23
$4.3 $5.4 $5.8 $6.8 $7.2 $9.4 $9.9 $12.5 $14.1 $15.5 $17.9 $18.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q23 History of Organic and Whole Bank Acquisition Growth 24 Total Assets ($B) Growth Through Acquisition ✓ Experienced Acquirer ✓ Expanded in Current High-Growth Markets ✓ Extended into Additional High-Growth Markets ✓ Added to Franchise with Stable Deposit Gathering Markets 2000 Decatur Bank & Trust 2001 Frances Slocum Bank & Trust 2002 Lafayette Bank & Trust 2003 Commerce National Bank 2008 Lincoln Bank 2012 Shelby County Bank 2013 Citizens Financial Bank 2014 Community Bank 2015 Cooper State Bank Ameriana Bank 2017 Arlington Bank iAB Financial Bank 2019 Monroe Bank & Trust 2022 (Closed April 1, 2022)
Vision for the Future 25 Our Vision: To enhance the financial wellness of the diverse communities we serve. To be the most attentive, knowledgeable, and high-performing bank for our clients, teammates, and shareholders. We are a collection of dynamic colleagues with diverse experiences and perspectives who share a passion for positively impacting lives. We are genuinely committed to attracting and engaging teammates of diverse backgrounds. We believe in the power of inclusion and belonging. ▪ Lead a brand-focused cultural transformation through inclusivity, teamwork, performance management, career development, rewards, and work-life balance ▪ Produce organic growth across all lines of business and markets through focused, data- driven, industry-leading client acquisition, expansion, and retention activities ▪ Invest in the digital transformation of our delivery channels to simplify the client experience ▪ Maintain top-quartile financial results supported by industry-leading governance, risk, and compliance practices to ensure long-term sustainability ▪ Continue to leverage our core competency in acquisitions to enhance growth, efficiency, and high performance ▪ Cultivate a high-quality shareholder base that values environmental, social, and governance initiatives inspired by our stakeholder-centric business model Strategic Imperatives: Our Mission: Our Team:
26 APPENDIX
Non-GAAP 27 ADJUSTED EPS EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") AND ACQUISITION-RELATED EXPENSES 3Q22 4Q22 1Q23 2Q23 3Q23 9/30/21 YTD 9/30/22 YTD 9/30/23 YTD (Dollars in Thousands, Except Per Share Amounts) Net Income Available to Common Stockholders - GAAP 63,283$ 70,292$ 63,610$ 60,393$ 55,898$ 157,798$ 150,391$ 179,901$ Adjustments: PPP loan income (323) (109) (25) (9) (8) (27,179) (3,098) (42) Acquisition-related expenses 3,417 413 - - - - 16,118 - Acquisition-related provision expense - - - - - - 16,755 - Tax on adjustment (759) (75) 6 2 2 6,664 (7,301) 10 Adjusted Net Income Available to Common Stockholders - NON-GAAP 65,618$ 70,521$ 63,591$ 60,386$ 55,892$ 137,283$ 172,865$ 179,869$ Average Diluted Common Shares Outstanding 59,339 59,384 59,441 59,448 59,503 54,093 57,468 59,465 Diluted Earnings Per Common Share - GAAP 1.08$ 1.19$ 1.07$ 1.02$ 0.94$ 2.92$ 2.62$ 3.03$ Adjustments: PPP loan income - (0.01) - - - (0.50) (0.05) - Acquisition-related expenses 0.05 0.01 - - - - 0.27 - Acquisition-related provision expense - - - - - - 0.30 - Tax on adjustment (0.01) - - - - 0.12 (0.13) - Adjusted Diluted Earnings Per Common Share - NON-GAAP 1.12$ 1.19$ 1.07$ 1.02$ 0.94$ 2.54$ 3.01$ 3.03$ PRE-TAX, PRE-PROVISION ("PTPP") EARNINGS EXCLUDING ACQUISITION-RELATED EXPENSES 3Q22 4Q22 1Q23 2Q23 3Q23 9/30/21 YTD 9/30/22 YTD 9/30/23 YTD (Dollars in Thousands, Except Per Share Amounts) Net Interest Income (GAAP) 140,307$ 148,956$ 144,119$ 137,835$ 133,383$ 309,407$ 371,247$ 415,337$ Other Income (GAAP) 29,616 24,151 24,997 26,319 27,842 83,476 83,790 79,158 Total Revenue 169,923 173,107 169,116 164,154 161,225 392,883 455,037 494,495 Less: Other Expenses (GAAP) (96,378) (89,699) (93,720) (92,593) (93,854) (206,777) (266,016) (280,167) Add: Acquisition-Related Expenses (GAAP) 3,417 413 - - - - 16,118 - Pre-Tax, Pre-Provision Earnings (non-GAAP) 76,962$ 83,821$ 75,396$ 71,561$ 67,371$ 186,106$ 205,139$ 214,328$ Average Assets (GAAP) 17,770,623$ 17,834,468$ 18,022,195$ 18,170,649$ 18,152,239$ 14,672,596$ 17,012,930$ 18,115,504$ Average Equity (GAAP) 2,018,156$ 1,958,041$ 2,083,125$ 2,139,877$ 2,154,232$ 1,858,680$ 1,977,299$ 2,126,005$ Average Diluted Common Shares 59,339 59,384 59,441 59,448 59,503 54,093 57,468 59,465 PTPP/Average Assets (PTPP ROA) 1.73% 1.88% 1.67% 1.58% 1.48% 1.69% 1.61% 1.58% PTPP/Average Equity (PTPP ROE) 15.25% 17.12% 14.48% 13.38% 12.51% 13.35% 13.83% 13.44% PTPP/Average Diluted Common Shares 1.30$ 1.41$ 1.27$ 1.20$ 1.13$ 3.44$ 3.57$ 3.60$
Non-GAAP 28 EFFICIENCY RATIO (dollars in thousands): 3Q22 4Q22 1Q23 2Q23 3Q23 3Q21 YTD 3Q22 YTD 3Q23 YTD EFFICIENCY RATIO (dollars in thousands): Non Interest Expense (GAAP) 96,378$ 89,699$ 93,720$ 92,593$ 93,854$ 206,777$ 266,016$ 280,167$ Less: Intangible Asset Amortization (2,303) (2,303) (2,197) (2,182) (2,182) (4,284) (5,972) (6,561)$ Less: OREO and Foreclosure Expenses (328) (197) 18 (916) (677) (821) (626) (1,575)$ Adjusted Non Interest Expense (non-GAAP) 93,747 87,199 91,541 89,495 90,995 201,672 259,418 272,031 Net Interest Income (GAAP) 140,306 148,956 144,119 137,835 133,383 309,407 371,247 415,337 Plus: Fully Taxable Equivalent Adjustment 6,316 6,370 6,321 5,858 5,911 14,991 18,220 18,090 Net Interest Income on a Fully Taxable Equivalent Basis (non-GAAP) 146,622 155,326 150,440 143,693 139,294 324,398 389,467 433,427 Non Interest Income (GAAP) 29,617 24,150 24,997 26,319 27,842 83,476 83,791 79,158 Less: Investment Securities Gains (Losses) (481) (57) 1,571 1,392 1,650 (5,316) (1,137) 4,613 Adjusted Non Interest Income (non-GAAP) 29,136 24,093 26,568 27,711 29,492 78,160 82,654 83,771 Adjusted Revenue (non-GAAP) 175,758 179,419 177,008 171,404 168,786 402,558 472,121 517,198 Efficiency Ratio (non-GAAP) 53.34% 48.60% 51.72% 52.21% 53.91% 50.10% 54.95% 52.60%
Non-GAAP 29 1 Includes net unrealized gains or losses on securities available for sale, net gains or losses on cash flow hedges, and amounts resulting from the application of the applicable accounting guidance for the defined benefit and other postretirement plans. CAPITAL RATIOS (dollars in thousands): 3Q21 3Q22 4Q22 1Q23 2Q23 3Q23 Total Risk-Based Capital Ratio (dollars in thousands) Total Stockholders' Equity (GAAP) 1,868,090 1,906,666 2,034,770 2,122,448 2,145,565 2,092,644 Adjust for Accumulated Other Comprehensive (Income) Loss 1 (39,889) 314,089 239,151 198,914 217,964 307,270 Less: Preferred Stock (125) (25,125) (25,125) (25,125) (25,125) (25,125) Add: Qualifying Capital Securities 46,546 25,000 25,000 25,000 25,000 25,000 Less: Tier 1 Capital Deductions - - - - - - Less: Disallowed Goodwill and Intangible Assets (565,221) (740,780) (738,206) (736,429) (734,666) (732,903) Less: Disallowed Deferred Tax Assets (1,005) (1,267) (337) (351) (258) (192) Add: Modified CECL Transition Amount 34,542 23,028 23,028 11,514 11,514 11,514 Total Tier 1 Capital (Regulatory) 1,342,938$ 1,501,611$ 1,558,281$ 1,595,971$ 1,639,994$ 1,678,208$ Qualifying Subordinated Debentures 65,000 143,089 143,103 143,118 143,132 143,147 Allowance for Loan Losses includible in Tier 2 Capital 139,200 178,490 180,870 182,308 183,106 184,046 Total Risk-Based Capital (Regulatory) 1,547,138$ 1,823,190$ 1,882,254$ 1,921,397$ 1,966,232$ 2,005,401$ Net Risk-Weighted Assets (Regulatory) 11,037,663$ 14,196,430$ 14,392,671$ 14,524,959$ 14,590,561$ 14,683,329$ Total Risk-Based Capital Ratio (Regulatory) 14.02% 12.84% 13.08% 13.23% 13.48% 13.66% Common Equity Tier 1 Capital Ratio Total Tier 1 Capital (Regulatory) 1,342,938$ 1,501,611$ 1,558,281$ 1,595,971$ 1,639,994$ 1,678,208$ Less: Qualified Capital Securities (46,546) (25,000) (25,000) (25,000) (25,000) (25,000) Add: Additional Tier 1 Capital Deductions - - - - - - Common Equity Tier 1 Capital (Regulatory) 1,296,392$ 1,476,611$ 1,533,281$ 1,570,971$ 1,614,994$ 1,653,208$ Net Risk-Weighted Assets (Regulatory) 11,037,663$ 14,196,430$ 14,392,671$ 14,524,959$ 14,590,561$ 14,683,329$ Common Equity Tier 1 Capital Ratio (Regulatory) 11.75% 10.40% 10.65% 10.82% 11.07% 11.26%
Non-GAAP 30 TANGIBLE COMMON EQUITY RATIO (dollars in thousands): 3Q21 3Q22 4Q22 1Q23 2Q23 3Q23 Tangible Common Equity Ratio (dollars in thousands) Total Stockholders' Equity (GAAP) 1,868,090$ 1,906,666$ 2,034,770$ 2,122,448$ 2,145,565$ 2,092,644$ Less: Preferred Stock (125) (25,125) (25,125) (25,125) (25,125) (25,125) Less: Intangible Assets (572,323) (750,713) (747,844) (745,647) (743,465) (741,283) Tangible Common Equity (non-GAAP) 1,295,642$ 1,130,828$ 1,261,801$ 1,351,676$ 1,376,975$ 1,326,236$ Total Assets (GAAP) 15,060,725$ 17,718,985$ 17,938,306$ 18,178,908$ 17,968,412$ 17,996,648$ Less: Intangible Assets (572,323) (750,713) (747,844) (745,647) (743,465) (741,283) Tangible Assets (non-GAAP) 14,488,402$ 16,968,272$ 17,190,462$ 17,433,261$ 17,224,947$ 17,255,365$ Tangible Common Equity Ratio (non-GAAP) 8.94% 6.66% 7.34% 7.75% 7.99% 7.69% TANGIBLE COMMON EQUITY PER SHARE (dollars in thousands): 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19 Tangible Common Equity Per Share Total Stockholders' Equity (GAAP) 552,236$ 634,923$ 726,827$ 850,509$ 901,657$ 1,303,463$ 1,408,260$ 1,786,437$ Less: Preferred Stock (90,908) (125) (125) (125) (125) (125) (125) (125) Less: Intangible Assets (149,529) (202,767) (218,755) (259,764) (258,866) (476,503) (469,784) (578,881) Tax Benefit 2,249 4,973 6,085 6,278 5,930 6,788 5,017 7,257 Tangible Common Equity, Net of Tax (non-GAAP) 314,048$ 437,004$ 514,032$ 596,898$ 648,596$ 833,623$ 943,368$ 1,214,688$ Common Shares Outstanding 28,692,616 35,921,761 37,669,948 40,664,258 40,912,697 49,158,238 49,349,800 55,368,482 Tangible Common Equity per Share (non-GAAP) 10.95$ 12.17$ 13.65$ 14.68$ 15.85$ 16.96$ 19.12$ 21.94$ 4Q20 3Q21 4Q21 3Q22 4Q22 1Q23 2Q23 3Q23 Tangible Common Equity Per Share Total Stockholders' Equity (GAAP) 1,875,645$ 1,868,090$ 1,912,571$ 1,906,666$ 2,034,770$ 2,122,448$ 2,145,565$ 2,092,644$ Less: Preferred Stock (125) (125) (125) (25,125) (25,125) (25,125) (25,125) (25,125) Less: Intangible Assets (572,893) (572,323) (570,860) (750,713) (747,844) (745,647) (743,465) (741,283) Tax Benefit 5,989 5,153 4,875 8,197 7,702 7,231 6,760 6,290 Tangible Common Equity, Net of Tax (non-GAAP) 1,308,616$ 1,300,795$ 1,346,461$ 1,139,025$ 1,269,503$ 1,358,907$ 1,383,735$ 1,332,526$ Common Shares Outstanding 53,922,359 53,510,745 53,410,411 59,145,414 59,170,583 59,257,051 59,297,148 59,398,022 Tangible Common Equity per Share (non-GAAP) 24.27$ 24.31$ 25.21$ 19.26$ 21.45$ 22.93$ 23.34$ 22.43$
Non-GAAP 31 RETURN ON TANGIBLE COMMON EQUITY (dollars in thousands): 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD Return on Tangible Common Equity Total Average Stockholders' Equity (GAAP) 535,506$ 540,255$ 675,295$ 753,724$ 884,664$ 1,110,524$ 1,343,861$ 1,569,615$ 1,825,135$ 1,858,680$ Less: Average Preferred Stock (90,908) (47,537) (125) (125) (125) (125) (125) (125) (125) (125) Less: Average Intangible Assets, Net of Tax (147,889) (153,519) (199,354) (215,281) (254,332) (360,005) (467,421) (499,622) (569,377) (567,815) Average Tangible Common Equity, Net of Tax (non-GAAP) 296,709$ 339,199$ 475,816$ 538,318$ 630,207$ 750,394$ 876,315$ 1,069,868$ 1,255,633$ 1,290,740$ Net Income Available to Common Stockholders (GAAP) 40,583$ 42,150$ 60,162$ 65,384$ 81,051$ 96,070$ 159,139$ 164,460$ 148,600$ 157,798$ Plus: Intangible Asset Amortization, Net of Tax 1,081 892 1,395 1,720 2,542 3,670 5,307 4,736 4,730 3,384 Tangible Net Income (non-GAAP) 41,664$ 43,042$ 61,557$ 67,104$ 83,593$ 99,740$ 164,446$ 169,196$ 153,330$ 161,182$ Return on Tangible Common Equity (non-GAAP) 14.04% 12.69% 12.94% 12.47% 13.26% 13.29% 18.77% 15.81% 12.21% 16.65% 2021 3Q22 2022 YTD 4Q22 2022 1Q23 2Q23 3Q23 2023 YTD Return on Tangible Common Equity Total Average Stockholders' Equity (GAAP) 1,866,632$ 2,018,156$ 1,977,299$ 1,958,041$ 1,972,445$ 2,083,125$ 2,139,877$ 2,154,232$ 2,126,005$ Less: Average Preferred Stock (125) (25,125) (16,792) (25,125) (18,875) (25,125) (25,125) (25,125) (25,125) Less: Average Intangible Assets, Net of Tax (567,512) (744,069) (685,707) (741,632) (699,803) (739,190) (737,489) (735,787) (737,476) Average Tangible Common Equity, Net of Tax (non-GAAP) 1,298,995$ 1,248,962$ 1,274,800$ 1,191,284$ 1,253,767$ 1,318,810$ 1,377,263$ 1,393,320$ 1,363,404$ Net Income Available to Common Stockholders (GAAP) 205,531$ 63,283$ 150,391$ 70,292$ 220,683$ 63,610$ 60,393$ 55,898$ 179,901$ Plus: Intangible Asset Amortization, Net of Tax 4,540 1,819 4,718 1,819 6,537 1,734 1,724 1,724 5,182 Tangible Net Income (non-GAAP) 210,071$ 65,102$ 155,109$ 72,111$ 227,220$ 65,344$ 62,117$ 57,622$ 185,083$ Return on Tangible Common Equity (non-GAAP) 16.17% 20.85% 16.22% 24.21% 18.12% 19.82% 18.04% 16.54% 18.10%