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): July 25, 2019

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)



Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 state value per share	FRME	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:

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 July 25, 2019, First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2019. 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 25, 2019, 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: July 25, 2019

EXHIBIT INDEX


Exhibit No.	Description

99.1 Press Release, dated July 25, 2019, issued by First Merchants Corporation

Exhibit

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

July 25, 2019

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 3.8 PERCENT INCREASE IN SECOND QUARTER 2019 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2019 net income of $41.1 million, an increase of 3.6 percent, compared to $39.6 million during the same period in 2018. Earnings per share for the period totaled $.83 per share, an increase of 3.8 percent, compared to the second quarter of 2018 result of $.80 per share.

Total assets equaled $10.7 billion as of quarter-end and loans totaled $7.5 billion. The Corporation’s loan portfolio increased, by $434 million, or 6.1 percent, during the past twelve months. Investments increased $473 million, or 29.2 percent, during the same period and now total $2.1 billion. Total deposits equaled $8.3 billion as of quarter-end and increased by $816 million, or 10.9 percent, while borrowings, totaling $793 million, declined during the period by $46 million, or 5.5 percent. As a result, the loan-to-deposit ratio now totals 90.4 percent and loan-to-asset ratio totals 70 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 14.56 percent, common equity tier 1 capital ratio equaled 12.05 percent, and the tangible common equity ratio totaled 10.07 percent.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our second quarter of 2019 results continued to reflect effective market coverage by our bankers coupled with healthy levels of activity from our commercial and consumer clients throughout our franchise. We are pleased with our execution producing second quarter organic loan growth of 11.8% and deposit growth of 13.5% on an annualized basis. Net Income and earnings per share improved during the quarter despite margin pressure and legal and settlement expenses of $1.3 million reflected in our marketing line item. We continue to anticipate closing our acquisition with Monroe Bank & Trust during the third quarter of 2019 and completing the integration in the fourth quarter of 2019.”

Net interest income for the quarter totaled $85.3 million, an increase of $707,000, even as net interest margin totaling 3.71 percent declined from the same period in 2018 by 28 basis points. Yields on earning assets increased by 12 basis points totaling 4.86 percent and the cost of supporting liabilities increased by 40 basis points and totaled 1.15 percent. Fair value accretion negatively impacted yields as it declined from 18 basis points in second quarter of 2018 to 9 basis points in 2019. Additionally, strong growth in institutional deposits and deployment into the bond portfolio produced earnings per share of $.01 for the quarter but negatively impacted net interest margin by 10 basis points.

Non-interest income totaled $21.6 million for the quarter, a $3.4 million, or 18.8 percent increase from the second quarter of 2018. Customer-specific line items accounted for $2.4 million of the increase while being fueled by derivative hedge income growth of $1.3 million. Non-interest expense totaled $57.6 million up from the 2018 total of $53.5 million. Of the $4.1 million increase, $1.3 million was related to the fair lending legal and settlement expenses, with the remaining in professional services - $587,000, equipment - $561,000, other real estate expense - $541,000, and salary and benefits - $517,000.

The Corporation’s provision expense totaled $500,000 and net charge-offs were just $128,000. The allowance for loan losses reached $81.3 million as of June 30, 2019, up from $77.5 million as of June 30, 2018. Non-accrual loans declined to $25.6 million as of quarter-end and the allowance was 1.08 percent of total loans and 1.19 percent of non-purchased loans.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, July 25, 2019.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's second quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until August 25, 2019. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10132272.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme190725.html during the time of the call. A replay of the web cast will be available until July 25, 2020.

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 (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)	June 30,
	2019			2018
ASSETS
Cash and cash equivalents	$	128,185		$	133,893
Interest-bearing time deposits	129,614			36,599
Investment securities	2,092,924			1,619,683
Loans held for sale	5,854			2,046
Loans	7,511,370			7,081,059
Less: Allowance for loan losses	(81,274		)	(77,543		)
Net loans	7,430,096			7,003,516
Premises and equipment	91,767			94,397
Federal Home Loan Bank stock	24,588			24,588
Interest receivable	45,150			38,530
Goodwill and other intangibles	466,736			473,059
Cash surrender value of life insurance	226,241			222,905
Other real estate owned	1,131			9,071
Tax asset, deferred and receivable	12,340			24,619
Other assets	83,231			51,809
TOTAL ASSETS	$	10,737,857		$	9,734,715
LIABILITIES
Deposits:
Noninterest-bearing	$	1,353,165		$	1,571,194
Interest-bearing	6,966,163			5,932,621
Total Deposits	8,319,328			7,503,815
Borrowings:
Federal funds purchased	75,000			109,000
Securities sold under repurchase agreements	119,674			122,513
Federal Home Loan Bank advances	460,042			469,261
Subordinated debentures and term loans	138,574			138,352
Total Borrowings	793,290			839,126
Interest payable	6,740			4,807
Other liabilities	116,863			46,639
Total Liabilities	9,236,221			8,394,387
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 shares
Issued and outstanding - 49,456,594 and 49,280,188 shares	6,182			6,160
Additional paid-in capital	841,365			836,549
Retained earnings	639,362			522,362
Accumulated other comprehensive income (loss)	14,602			(24,868		)
Total Stockholders' Equity	1,501,636			1,340,328
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	10,737,857		$	9,734,715



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,				June 30,
	2019		2018		2019		2018
INTEREST INCOME
Loans receivable:
Taxable	$	92,824	$	84,663	$	183,305	$	162,930
Tax-exempt	4,244		3,632		8,397		7,228
Investment securities:
Taxable	6,998		5,434		13,093		10,530
Tax-exempt	7,454		6,246		14,325		12,372
Deposits with financial institutions	784		633		1,659		764
Federal Home Loan Bank stock	335		263		673		667
Total Interest Income	112,639		100,871		221,452		194,491
INTEREST EXPENSE
Deposits	23,087		12,165		42,681		21,167
Federal funds purchased	117		61		210		441
Securities sold under repurchase agreements	342		172		672		345
Federal Home Loan Bank advances	1,692		1,845		3,506		4,004
Subordinated debentures and term loans	2,123		2,057		4,239		4,047
Total Interest Expense	27,361		16,300		51,308		30,004
NET INTEREST INCOME	85,278		84,571		170,144		164,487
Provision for loan losses	500		1,663		1,700		4,163
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	84,778		82,908		168,444		160,324
OTHER INCOME
Service charges on deposit accounts	5,437		5,038		10,532		9,815
Fiduciary and wealth management fees	3,931		3,595		7,749		7,391
Card payment fees	4,829		4,462		9,655		9,056
Net gains and fees on sales of loans	1,736		1,600		3,031		3,421
Derivative hedge fees	1,487		231		2,268		1,073
Other customer fees	341		455		780		897
Earnings on cash surrender value of life insurance	946		1,007		1,935		2,183
Net realized gains on sales of available for sale securities	1,843		1,122		2,983		2,731
Other income	1,064		681		1,394		1,185
Total Other Income	21,614		18,191		40,327		37,752
OTHER EXPENSES
Salaries and employee benefits	32,709		32,192		65,737		64,418
Net occupancy	4,469		4,348		9,496		9,018
Equipment	4,117		3,556		7,759		7,224
Marketing	2,752		1,474		3,826		2,358
Outside data processing fees	3,929		3,462		7,613		6,426
Printing and office supplies	334		324		649		658
Intangible asset amortization	1,520		1,718		3,048		3,444
FDIC assessments	678		711		1,385		1,430
Other real estate owned and foreclosure expenses	903		362		2,068		764
Professional and other outside services	2,376		1,789		4,260		3,330
Other expenses	3,800		3,568		8,367		8,121
Total Other Expenses	57,587		53,504		114,208		107,191
INCOME BEFORE INCOME TAX	48,805		47,595		94,563		90,885
Income tax expense	7,749		7,961		14,690		14,572
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	41,056	$	39,634	$	79,873	$	76,313
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.83	$	0.80	$	1.62	$	1.55
Diluted Net Income Available to Common Stockholders	$	0.83	$	0.80	$	1.61	$	1.54
Cash Dividends Paid	$	0.26	$	0.22	$	0.48	$	0.40
Average Diluted Shares Outstanding (in thousands)	49,550		49,451		49,545		49,440



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
NET CHARGE-OFFS	$	128		$	540		$	978		$	1,652

AVERAGE BALANCES:
Total Assets	$	10,499,948		$	9,697,020		$	10,291,205		$	9,535,774
Total Loans	7,385,315			6,975,737			7,308,146			6,893,867
Total Earning Assets	9,518,892			8,741,173			9,326,579			8,579,076
Total Deposits	8,321,459			7,636,821			8,130,120			7,396,328
Total Stockholders' Equity	1,479,254			1,327,341			1,454,633			1,318,124

FINANCIAL RATIOS:
Return on Average Assets	1.56		%	1.63		%	1.55		%	1.60		%
Return on Average Stockholders' Equity	11.10			11.94			10.98			11.58
Return on Average Common Stockholders' Equity	11.10			11.95			10.98			11.58
Average Earning Assets to Average Assets	90.66			90.14			90.63			89.97
Allowance for Loan Losses as % of Total Loans	1.08			1.09			1.08			1.09
Net Charge-offs as % of Average Loans (Annualized)	0.01			0.03			0.03			0.05
Average Stockholders' Equity to Average Assets	14.09			13.69			14.13			13.82
Tax Equivalent Yield on Average Earning Assets	4.86			4.74			4.88			4.66
Interest Expense/Average Earning Assets	1.15			0.75			1.10			0.70
Net Interest Margin (FTE) on Average Earning Assets	3.71			3.99			3.78			3.96
Efficiency Ratio	51.00			49.32			51.09			50.30
Tangible Common Book Value Per Share	$	21.01		$	17.71		$	21.01		$	17.71



NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
Non-Accrual Loans	$	25,635		$	27,949		$	26,148		$	20,421		$	20,143
Renegotiated Loans	640			709			1,103			968			544
Non-Performing Loans (NPL)	26,275			28,658			27,251			21,389			20,687
Other Real Estate Owned	1,131			1,877			2,179			8,859			9,071
Non-Performing Assets (NPA)	27,406			30,535			29,430			30,248			29,758
90+ Days Delinquent	209			134			1,855			50			184
NPAs & 90 Day Delinquent	$	27,615		$	30,669		$	31,285		$	30,298		$	29,942

Allowance for Loan Losses	$	81,274		$	80,902		$	80,552		$	78,406		$	77,543
Quarterly Net Charge-offs	128			850			(482		)	537			540
NPAs / Actual Assets %	0.26		%	0.30		%	0.30		%	0.31		%	0.31		%
NPAs & 90 Day / Actual Assets %	0.26		%	0.30		%	0.32		%	0.31		%	0.31		%
NPAs / Actual Loans and OREO %	0.36		%	0.42		%	0.41		%	0.43		%	0.42		%
Allowance for Loan Losses / Actual Loans (%)	1.08		%	1.11		%	1.11		%	1.11		%	1.09		%
Net Charge-offs as % of Average Loans (Annualized)	0.01		%	0.05		%	(0.03		)%	0.03		%	0.03		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
ASSETS
Cash and cash equivalents	$	128,185		$	115,878		$	139,247		$	142,501		$	133,893
Interest-bearing time deposits	129,614			70,672			36,963			66,763			36,599
Investment securities	2,092,924			1,862,659			1,632,582			1,625,251			1,619,683
Loans held for sale	5,854			3,330			4,778			3,022			2,046
Loans	7,511,370			7,299,320			7,224,467			7,088,071			7,081,059
Less: Allowance for loan losses	(81,274		)	(80,902		)	(80,552		)	(78,406		)	(77,543		)
Net loans	7,430,096			7,218,418			7,143,915			7,009,665			7,003,516
Premises and equipment	91,767			91,863			93,420			93,728			94,397
Federal Home Loan Bank stock	24,588			24,588			24,588			24,588			24,588
Interest receivable	45,150			40,931			40,881			38,531			38,530
Goodwill and other intangibles	466,736			468,256			469,784			471,409			473,059
Cash surrender value of life insurance	226,241			225,928			224,939			223,865			222,905
Other real estate owned	1,131			1,877			2,179			8,859			9,071
Tax asset, deferred and receivable	12,340			16,094			23,668			25,933			24,619
Other assets	83,231			70,431			47,772			53,167			51,809
TOTAL ASSETS	$	10,737,857		$	10,210,925		$	9,884,716		$	9,787,282		$	9,734,715
LIABILITIES
Deposits:
Noninterest-bearing	$	1,353,165		$	1,381,183		$	1,447,907		$	1,464,190		$	1,571,194
Interest-bearing	6,966,163			6,666,615			6,306,686			6,168,962			5,932,621
Total Deposits	8,319,328			8,047,798			7,754,593			7,633,152			7,503,815
Borrowings:
Federal funds purchased	75,000			20,000			104,000			90,000			109,000
Securities sold under repurchase agreements	119,674			111,783			113,512			118,824			122,513
Federal Home Loan Bank advances	460,042			345,013			314,986			385,458			469,261
Subordinated debentures and term loans	138,574			138,519			138,463			138,408			138,352
Total Borrowings	793,290			615,315			670,961			732,690			839,126
Interest payable	6,740			7,313			5,607			5,920			4,807
Other liabilities	116,863			84,651			45,295			54,094			46,639
Total Liabilities	9,236,221			8,755,077			8,476,456			8,425,856			8,394,387
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 shares
Issued and outstanding	6,182			6,179			6,169			6,163			6,160
Additional paid-in capital	841,365			839,919			840,052			837,996			836,549
Retained earnings	639,362			611,220			583,336			552,551			522,362
Accumulated other comprehensive income (loss)	14,602			(1,595		)	(21,422		)	(35,409		)	(24,868		)
Total Stockholders' Equity	1,501,636			1,455,848			1,408,260			1,361,426			1,340,328
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	10,737,857		$	10,210,925		$	9,884,716		$	9,787,282		$	9,734,715



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
INTEREST INCOME
Loans receivable:
Taxable	$	92,824		$	90,481		$	91,092		$	88,479		$	84,663
Tax-exempt	4,244			4,153			3,873			3,761			3,632
Investment securities:
Taxable	6,998			6,095			5,553			5,514			5,434
Tax-exempt	7,454			6,871			6,644			6,493			6,246
Deposits with financial institutions	784			875			1,207			270			633
Federal Home Loan Bank stock	335			338			284			283			263
Total Interest Income	112,639			108,813			108,653			104,800			100,871
INTEREST EXPENSE
Deposits	23,087			19,594			16,690			13,685			12,165
Federal funds purchased	117			93			48			229			61
Securities sold under repurchase agreements	342			330			243			174			172
Federal Home Loan Bank advances	1,692			1,814			1,691			2,137			1,845
Subordinated debentures and term loans	2,123			2,116			2,097			2,089			2,057
Total Interest Expense	27,361			23,947			20,769			18,314			16,300
NET INTEREST INCOME	85,278			84,866			87,884			86,486			84,571
Provision for loan losses	500			1,200			1,664			1,400			1,663
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	84,778			83,666			86,220			85,086			82,908
OTHER INCOME
Service charges on deposit accounts	5,437			5,095			5,516			5,619			5,038
Fiduciary and wealth management fees	3,931			3,818			3,842			3,673			3,595
Card payment fees	4,829			4,826			4,393			4,586			4,462
Net gains and fees on sales of loans	1,736			1,295			1,767			1,841			1,600
Derivative hedge fees	1,487			781			645			775			231
Other customer fees	341			439			511			452			455
Earnings on cash surrender value of life insurance	946			989			1,074			961			1,007
Net realized gains on sales of available for sale securities	1,843			1,140			253			1,285			1,122
Other income	1,064			330			1,179			335			681
Total Other Income	21,614			18,713			19,180			19,527			18,191
OTHER EXPENSES
Salaries and employee benefits	32,709			33,028			34,350			32,936			32,192
Net occupancy	4,469			5,027			4,737			4,586			4,348
Equipment	4,117			3,642			3,627			3,483			3,556
Marketing	2,752			1,074			1,107			1,216			1,474
Outside data processing fees	3,929			3,684			3,367			3,422			3,462
Printing and office supplies	334			315			433			334			324
Intangible asset amortization	1,520			1,528			1,625			1,650			1,718
FDIC assessments	678			707			634			856			711
Other real estate owned and foreclosure expenses	903			1,165			251			455			362
Professional and other outside services	2,376			1,884			3,002			1,844			1,789
Other expenses	3,800			4,567			4,605			4,240			3,568
Total Other Expenses	57,587			56,621			57,738			55,022			53,504
INCOME BEFORE INCOME TAX	48,805			45,758			47,662			49,591			47,595
Income tax expense	7,749			6,941			5,949			8,478			7,961
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	41,056		$	38,817		$	41,713		$	41,113		$	39,634

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.83		$	0.79		$	0.85		$	0.83		$	0.80
Diluted Net Income Available to Common Stockholders	$	0.83		$	0.78		$	0.85		$	0.83		$	0.80
Cash Dividends Paid	$	0.26		$	0.22		$	0.22		$	0.22		$	0.22
Average Diluted Shares Outstanding (in thousands)	49,550			49,541			49,511			49,492			49,451
FINANCIAL RATIOS:
Return on Average Assets	1.56		%	1.54		%	1.68		%	1.69		%	1.63		%
Return on Average Stockholders' Equity	11.10			10.86			12.10			12.10			11.94
Return on Average Common Stockholders' Equity	11.10			10.86			12.10			12.10			11.95
Average Earning Assets to Average Assets	90.66			90.60			90.41			90.30			90.14
Allowance for Loan Losses as % of Total Loans	1.08			1.11			1.11			1.11			1.09
Net Charge-offs as % of Average Loans (Annualized)	0.01			0.05			(0.03		)	0.03			0.03
Average Stockholders' Equity to Average Assets	14.09			14.18			13.90			13.93			13.69
Tax Equivalent Yield on Average Earning Assets	4.86			4.89			4.97			4.88			4.74
Interest Expense/Average Earning Assets	1.15			1.05			0.93			0.83			0.75
Net Interest Margin (FTE) on Average Earning Assets	3.71			3.84			4.04			4.05			3.99
Efficiency Ratio	51.00			51.18			50.97			49.25			49.32
Tangible Common Book Value Per Share	$	21.01		$	20.07		$	19.12		$	18.16		$	17.71



LOANS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
Commercial and industrial loans	$	1,877,042		$	1,788,628		$	1,726,664		$	1,655,569		$	1,657,591
Agricultural production financing and other loans to farmers	83,452			80,357			92,404			88,504			89,093
Real estate loans:
Construction	624,548			542,501			545,729			668,608			714,866
Commercial and farmland	2,821,689			2,838,798			2,832,102			2,699,629			2,652,782
Residential	993,802			976,668			966,421			965,893			965,720
Home equity	548,006			536,208			528,157			517,303			518,699
Individuals' loans for household and other personal expenditures	98,384			108,216			99,788			98,709			92,809
Public finance and other commercial loans	464,447			427,944			433,202			393,856			389,499
Loans	7,511,370			7,299,320			7,224,467			7,088,071			7,081,059
Allowance for loan losses	(81,274		)	(80,902		)	(80,552		)	(78,406		)	(77,543		)
NET LOANS	$	7,430,096		$	7,218,418		$	7,143,915		$	7,009,665		$	7,003,516



DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2019		2019		2018		2018		2018
Demand deposits	$	4,309,473	$	4,101,156	$	3,985,178	$	3,870,816	$	3,933,233
Savings deposits	2,358,720		2,338,266		2,282,701		2,212,675		2,099,771
Certificates and other time deposits of $100,000 or more	720,536		670,199		593,592		602,002		555,910
Other certificates and time deposits	729,392		704,527		646,682		625,341		602,239
Brokered deposits	201,207		233,650		246,440		322,318		312,662
TOTAL DEPOSITS	$	8,319,328	$	8,047,798	$	7,754,593	$	7,633,152	$	7,503,815



CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2019							June 30, 2018
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	144,626		$	784	2.17	%	$	142,385		$	633	1.78	%
Federal Home Loan Bank stock	24,588			335		5.45		24,588			263		4.28
Investment Securities: ⁽¹⁾
Taxable	1,054,068			6,998		2.66		852,865			5,434		2.55
Tax-Exempt ⁽²⁾	910,295			9,435		4.15		745,598			7,906		4.24
Total Investment Securities	1,964,363			16,433		3.35		1,598,463			13,340		3.34
Loans held for sale	11,430			127		4.44		6,408			83		5.18
Loans: ⁽³⁾
Commercial	5,419,169			74,638		5.51		5,142,093			67,510		5.25
Real Estate Mortgage	766,528			8,686		4.53		729,681			8,792		4.82
Installment	677,133			9,373		5.54		631,897			8,278		5.24
Tax-Exempt ⁽²⁾	511,055			5,372		4.20		465,658			4,597		3.95
Total Loans	7,385,315			98,196		5.32		6,975,737			89,260		5.12
Total Earning Assets	9,518,892			115,748		4.86	%	8,741,173			103,496		4.74	%
Net unrealized gain (loss) on securities available for sale	12,841							(13,068		)
Allowance for loan losses	(81,691		)					(77,197		)
Cash and cash equivalents	130,987							132,481
Premises and equipment	91,563							94,757
Other assets	827,356							818,874
Total Assets	$	10,499,948						$	9,697,020
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	2,935,925		$	8,541	1.16	%	$	2,325,705		$	4,276	0.74	%
Money market deposits	1,220,020			3,509		1.15		1,081,830			1,583		0.59
Savings deposits	1,164,901			2,525		0.87		1,096,003			1,332		0.49
Certificates and other time deposits	1,652,203			8,512		2.06		1,491,207			4,974		1.33
Total Interest-bearing Deposits	6,973,049			23,087		1.32		5,994,745			12,165		0.81
Borrowings	613,446			4,274		2.79		674,040			4,135		2.45
Total Interest-bearing Liabilities	7,586,495			27,361		1.44		6,668,785			16,300		0.98
Noninterest-bearing deposits	1,348,410							1,642,076
Other liabilities	85,789							58,818
Total Liabilities	9,020,694							8,369,679
Stockholders' Equity	1,479,254							1,327,341
Total Liabilities and Stockholders' Equity	$	10,499,948		27,361				$	9,697,020		16,300
Net Interest Income (FTE)				$	88,387						$	87,196
Net Interest Spread (FTE) ⁽⁴⁾						3.42	%						3.76	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets						4.86	%						4.74	%
Interest Expense / Average Earning Assets						1.15	%						0.75	%
Net Interest Margin (FTE) ⁽⁵⁾						3.71	%						3.99	%

⁽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 21 percent for 2019 and 2018. These totals equal $3,109 and $2,625 for the three months ended June 30, 2019 and 2018, 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, 2019							June 30, 2018
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	145,277		$	1,659	2.28	%	$	87,883		$	764	1.74	%
Federal Home Loan Bank stock	24,588			673		5.47		24,487			667		5.45
Investment Securities: ⁽¹⁾
Taxable	978,654			13,093		2.68		831,743			10,530		2.53
Tax-Exempt ⁽²⁾	869,914			18,133		4.17		741,096			15,661		4.23
Total Investment Securities	1,848,568			31,226		3.38		1,572,839			26,191		3.33
Loans held for sale	10,697			239		4.47		8,515			221		5.19
Loans: ⁽³⁾
Commercial	5,364,884			147,394		5.49		5,061,717			129,663		5.12
Real Estate Mortgage	755,070			17,008		4.51		729,202			16,791		4.61
Installment	671,125			18,664		5.56		627,686			16,255		5.18
Tax-Exempt ⁽²⁾	506,370			10,629		4.20		466,747			9,149		3.92
Total Loans	7,308,146			193,934		5.31		6,893,867			172,079		4.99
Total Earning Assets	9,326,579			227,492		4.88	%	8,579,076			199,701		4.66	%
Net unrealized gain on securities available for sale	3,963							(9,772		)
Allowance for loan losses	(81,301		)					(76,528		)
Cash and cash equivalents	124,143							129,499
Premises and equipment	92,395							95,139
Other assets	825,426							818,360
Total Assets	$	10,291,205						$	9,535,774
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	2,813,541		$	15,560	1.11	%	$	2,153,878		$	6,965	0.65	%
Money market deposits	1,179,765			6,291		1.07		1,085,740			2,858		0.53
Savings deposits	1,157,852			4,792		0.83		1,021,386			1,714		0.34
Certificates and other time deposits	1,609,130			16,038		1.99		1,488,664			9,630		1.29
Total Interest-bearing Deposits	6,760,288			42,681		1.26		5,749,668			21,167		0.74
Borrowings	624,192			8,627		2.76		760,643			8,837		2.32
Total Interest-bearing Liabilities	7,384,480			51,308		1.39		6,510,311			30,004		0.92
Noninterest-bearing deposits	1,369,832							1,646,660
Other liabilities	82,260							60,679
Total Liabilities	8,836,572							8,217,650
Stockholders' Equity	1,454,633							1,318,124
Total Liabilities and Stockholders' Equity	$	10,291,205		51,308				$	9,535,774		30,004
Net Interest Income (FTE)				$	176,184						$	169,697
Net Interest Spread (FTE) ⁽⁴⁾						3.49	%						3.74	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets						4.88	%						4.66	%
Interest Expense / Average Earning Assets						1.10	%						0.70	%
Net Interest Margin (FTE) ⁽⁵⁾						3.78	%						3.96	%

⁽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 21 percent for 2019 and 2018. These totals equal $6,040 and $5,210 for the six months ended June 30, 2019 and 2018, 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.