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): January 30, 2020

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	NASDAQ

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 January 30, 2020, First Merchants Corporation issued a press release to report its financial results for the fourth quarter ended December 31, 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 January 30, 2020, 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: January 30, 2020

EXHIBIT INDEX


Exhibit No.	Description

99.1 Press Release, dated January 30, 2020, issued by First Merchants Corporation

Exhibit

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

January 30, 2020

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 2019 RESULTS

First Merchants Corporation (NASDAQ - FRME) has reported fourth quarter 2019 net income of $47.8 million compared to $41.7 million during the same period in 2018. Earnings per share for the period totaled $.87 per share compared to fourth quarter 2018 result of $.85 per share. Included in the fourth quarter results are $1.9 million, or $.03 per share, of one-time charges related to the closing of our acquisition with Monroe Bank & Trust on September 1, 2019. Net income for the year ended December 31, 2019 totaled $164.5 million, compared to $159.1 million during the same period in 2018. Year-to-date earnings per share totaled $3.19 compared to $3.22 in 2018. Included in the year-to-date results are $13.7 million, or $.21 per share, of one-time charges related to the acquisition of Monroe Bank & Trust.

Total assets equaled $12.5 billion as of year-end and loans totaled $8.5 billion. The Corporation’s loan portfolio increased by $1.2 billion, or 17.1 percent, during 2019. Investments increased $963 million, or 59 percent, during the year and now total $2.6 billion. Total deposits equaled $9.8 billion as of year-end and increased by $2.1 billion, or 26.9 percent, during 2019. Of the 2019 increases, Monroe Bank & Trust accounted for $733 million of loan growth and $1.1 billion of deposit growth.

The Corporation’s loan-to-deposit ratio now totals 86 percent and loan-to-asset ratio totals 68 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 14.29 percent, common equity tier 1 capital ratio equaled 12.13 percent, and the tangible common equity ratio totaled 10.16 percent.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our team completed 2019 producing strong financial results that reflect aggressive market coverage as well as entry into the state of Michigan through the acquisition and integration of Monroe Bank & Trust. Our balance sheet grew organically by 7 percent in loans and 12.6 percent in deposits. Our loan portfolio continues to exhibit stellar credit quality which improved throughout the year. Despite net-interest margin pressure during the year, the balance sheet growth fueled record net-interest income and earnings. We are eager to accelerate into 2020 with a high-performing team that’s motivated to serve our marketplace with skilled advisory and growth solutions.”

Net-interest income totaled $356.7 million for the year, an increase of $17.8 million, or 5.3 percent, in the face of a net-interest margin decline of 31 basis points to 3.69 percent. Yield on earning assets declined by 1 basis point totaling 4.78 percent and the cost of supporting liabilities increased by 30 basis points and totaled 1.09 percent. The impact of fair value accretion on margin declined from 16 basis points in 2018 to 12 basis points in 2019.

Non-interest income totaled $86.7 million for the year, a $10.2 million, or 13.4 percent, increase from 2018. Customer specific line items accounted for $10.4 million of increase in total non-interest income. Customer specific line items driving the improved revenue included growth in derivative hedge fees of $2.9 million, fiduciary and wealth management fees of $2.7 million, card payment fees of $2.2 million and service charges of $2 million. Non-interest expense totaled $246.8 million for the year ended 2019, a $26.8 million increase from 2018. Of the increase, merger-related expenses totaled $13.7 million.

The Corporation’s provision expense totaled $2.8 million for 2019 as net charge-offs were $3.1 million. The allowance for loan losses totaled $80.3 million as of December 31, 2019, declining slightly from 2018 as delinquent, impaired, and non-accrual loans declined during 2019.

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, January 30, 2020.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's fourth quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until February 29, 2020. 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 10137476.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme200130.html during the time of the call. A replay of the web cast will be available until January 30, 2021.

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)	December 31,
	2019			2018
ASSETS
Cash and cash equivalents	$	177,201		$	139,247
Interest-bearing time deposits	118,263			36,963
Investment securities	2,596,063			1,632,582
Loans held for sale	9,037			4,778
Loans	8,459,310			7,224,467
Less: Allowance for loan losses	(80,284		)	(80,552		)
Net loans	8,379,026			7,143,915
Premises and equipment	113,055			93,420
Federal Home Loan Bank stock	28,736			24,588
Interest receivable	48,901			40,881
Goodwill and other intangibles	578,880			469,784
Cash surrender value of life insurance	288,206			224,939
Other real estate owned	7,527			2,179
Tax asset, deferred and receivable	12,165			23,668
Other assets	100,194			47,772
TOTAL ASSETS	$	12,457,254		$	9,884,716
LIABILITIES
Deposits:
Noninterest-bearing	$	1,736,396		$	1,447,907
Interest-bearing	8,103,560			6,306,686
Total Deposits	9,839,956			7,754,593
Borrowings:
Federal funds purchased	55,000			104,000
Securities sold under repurchase agreements	187,946			113,512
Federal Home Loan Bank advances	351,072			314,986
Subordinated debentures and term loans	138,685			138,463
Total Borrowings	732,703			670,961
Interest payable	6,754			5,607
Other liabilities	91,404			45,295
Total Liabilities	10,670,817			8,476,456
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 - 55,368,482 and 49,349,800 shares	6,921			6,169
Additional paid-in capital	1,054,997			840,052
Retained earnings	696,520			583,336
Accumulated other comprehensive income (loss)	27,874			(21,422		)
Total Stockholders' Equity	1,786,437			1,408,260
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	12,457,254		$	9,884,716



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts)	December 31,				December 31,
	2019		2018		2019		2018
INTEREST INCOME
Loans receivable:
Taxable	$	102,617	$	91,092	$	382,772	$	342,501
Tax-exempt	4,671		3,873		17,568		14,862
Investment securities:
Taxable	7,993		5,553		27,815		21,597
Tax-exempt	8,995		6,644		31,655		25,509
Deposits with financial institutions	1,203		1,207		4,225		2,241
Federal Home Loan Bank stock	342		284		1,370		1,234
Total Interest Income	125,821		108,653		465,405		407,944
INTEREST EXPENSE
Deposits	24,074		16,690		91,585		51,542
Federal funds purchased	26		48		251		718
Securities sold under repurchase agreements	367		243		1,424		762
Federal Home Loan Bank advances	1,776		1,691		7,176		7,832
Subordinated debentures and term loans	1,994		2,097		8,309		8,233
Total Interest Expense	28,237		20,769		108,745		69,087
NET INTEREST INCOME	97,584		87,884		356,660		338,857
Provision for loan losses	500		1,664		2,800		7,227
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	97,084		86,220		353,860		331,630
OTHER INCOME
Service charges on deposit accounts	6,312		5,516		22,951		20,950
Fiduciary and wealth management fees	5,384		3,842		17,562		14,906
Card payment fees	5,430		4,393		20,243		18,035
Net gains and fees on sales of loans	2,633		1,767		7,891		7,029
Derivative hedge fees	1,405		645		5,357		2,493
Other customer fees	434		511		1,664		1,860
Earnings on cash surrender value of life insurance	1,458		1,074		4,537		4,218
Net realized gains on sales of available for sale securities	1,039		253		4,415		4,269
Other income	150		1,179		2,068		2,699
Total Other Income	24,245		19,180		86,688		76,459
OTHER EXPENSES
Salaries and employee benefits	39,358		34,350		144,037		131,704
Net occupancy	5,311		4,737		19,584		18,341
Equipment	4,429		3,627		16,218		14,334
Marketing	1,492		1,107		6,650		4,681
Outside data processing fees	4,428		3,367		16,476		13,215
Printing and office supplies	484		433		1,445		1,425
Intangible asset amortization	1,590		1,625		5,994		6,719
FDIC assessments	—		634		717		2,920
Other real estate owned and foreclosure expenses	66		251		2,428		1,470
Professional and other outside services	2,899		3,002		15,410		8,176
Other expenses	5,144		4,605		17,804		16,966
Total Other Expenses	65,201		57,738		246,763		219,951
INCOME BEFORE INCOME TAX	56,128		47,662		193,785		188,138
Income tax expense	8,298		5,949		29,325		28,999
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	47,830	$	41,713	$	164,460	$	159,139
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.87	$	0.85	$	3.20	$	3.23
Diluted Net Income Available to Common Stockholders	$	0.87	$	0.85	$	3.19	$	3.22
Cash Dividends Paid	$	0.26	$	0.22	$	1.00	$	0.84
Average Diluted Shares Outstanding (in thousands)	55,520		49,511		51,561		49,471



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2019			2018			2019			2018
NET CHARGE-OFFS	$	787		$	(482	)	$	3,068		$	1,707

AVERAGE BALANCES:
Total Assets	$	12,479,039		$	9,923,001		$	11,091,320		$	9,689,057
Total Loans	8,358,683			7,102,552			7,690,190			6,997,771
Total Earning Assets	11,194,954			8,971,432			10,015,771			8,736,367
Total Deposits	9,926,794			7,875,998			8,782,634			7,569,482
Total Stockholders' Equity	1,768,848			1,379,453			1,569,615			1,343,861

FINANCIAL RATIOS:
Return on Average Assets	1.53		%	1.68		%	1.48		%	1.64		%
Return on Average Stockholders' Equity	10.82			12.10			10.48			11.84
Return on Average Common Stockholders' Equity	10.82			12.10			10.48			11.84
Average Earning Assets to Average Assets	89.71			90.41			90.30			90.17
Allowance for Loan Losses as % of Total Loans	0.95			1.11			0.95			1.11
Net Charge-offs as % of Average Loans (Annualized)	0.04			(0.03		)	0.04			0.02
Average Stockholders' Equity to Average Assets	14.17			13.90			14.15			13.87
Tax Equivalent Yield on Average Earning Assets	4.63			4.97			4.78			4.79
Interest Expense/Average Earning Assets	1.01			0.93			1.09			0.79
Net Interest Margin (FTE) on Average Earning Assets	3.62			4.04			3.69			4.00
Efficiency Ratio	51.07			50.97			52.73			50.21
Tangible Common Book Value Per Share	$	21.94		$	19.12		$	21.94		$	19.12



NON-PERFORMING ASSETS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2019			2019			2019			2019			2018
Non-Accrual Loans	$	15,949		$	22,728		$	25,635		$	27,949		$	26,148
Renegotiated Loans	841			576			640			709			1,103
Non-Performing Loans (NPL)	16,790			23,304			26,275			28,658			27,251
Other Real Estate Owned	7,527			7,156			1,131			1,877			2,179
Non-Performing Assets (NPA)	24,317			30,460			27,406			30,535			29,430
90+ Days Delinquent	69			82			209			134			1,855
NPAs & 90 Day Delinquent	$	24,386		$	30,542		$	27,615		$	30,669		$	31,285

Allowance for Loan Losses	$	80,284		$	80,571		$	81,274		$	80,902		$	80,552
Quarterly Net Charge-offs	787			1,303			128			850			(482		)
NPAs / Actual Assets %	0.20		%	0.25		%	0.26		%	0.30		%	0.30		%
NPAs & 90 Day / Actual Assets %	0.20		%	0.25		%	0.26		%	0.30		%	0.32		%
NPAs / Actual Loans and OREO %	0.29		%	0.37		%	0.36		%	0.42		%	0.41		%
Allowance for Loan Losses / Actual Loans (%)	0.95		%	0.97		%	1.08		%	1.11		%	1.11		%
Net Charge-offs as % of Average Loans (Annualized)	0.04		%	0.07		%	0.01		%	0.05		%	(0.03		)%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2019			2019			2019			2019			2018
ASSETS
Cash and cash equivalents	$	177,201		$	202,383		$	128,185		$	115,878		$	139,247
Interest-bearing time deposits	118,263			230,101			129,614			70,672			36,963
Investment securities	2,596,063			2,489,420			2,092,924			1,862,659			1,632,582
Loans held for sale	9,037			7,910			5,854			3,330			4,778
Loans	8,459,310			8,299,260			7,511,370			7,299,320			7,224,467
Less: Allowance for loan losses	(80,284		)	(80,571		)	(81,274		)	(80,902		)	(80,552		)
Net loans	8,379,026			8,218,689			7,430,096			7,218,418			7,143,915
Premises and equipment	113,055			113,446			91,767			91,863			93,420
Federal Home Loan Bank stock	28,736			28,736			24,588			24,588			24,588
Interest receivable	48,901			45,923			45,150			40,931			40,881
Goodwill and other intangibles	578,880			579,751			466,736			468,256			469,784
Cash surrender value of life insurance	288,206			286,747			226,241			225,928			224,939
Other real estate owned	7,527			7,156			1,131			1,877			2,179
Tax asset, deferred and receivable	12,165			15,187			12,340			16,094			23,668
Other assets	100,194			99,612			83,231			70,431			47,772
TOTAL ASSETS	$	12,457,254		$	12,325,061		$	10,737,857		$	10,210,925		$	9,884,716
LIABILITIES
Deposits:
Noninterest-bearing	$	1,736,396		$	1,777,365		$	1,353,165		$	1,381,183		$	1,447,907
Interest-bearing	8,103,560			7,988,086			6,966,163			6,666,615			6,306,686
Total Deposits	9,839,956			9,765,451			8,319,328			8,047,798			7,754,593
Borrowings:
Federal funds purchased	55,000			—			75,000			20,000			104,000
Securities sold under repurchase agreements	187,946			191,603			119,674			111,783			113,512
Federal Home Loan Bank advances	351,072			354,609			460,042			345,013			314,986
Subordinated debentures and term loans	138,685			138,630			138,574			138,519			138,463
Total Borrowings	732,703			684,842			793,290			615,315			670,961
Interest payable	6,754			7,855			6,740			7,313			5,607
Other liabilities	91,404			117,901			116,863			84,651			45,295
Total Liabilities	10,670,817			10,576,049			9,236,221			8,755,077			8,476,456
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	6,921			6,918			6,182			6,179			6,169
Additional paid-in capital	1,054,997			1,053,148			841,365			839,919			840,052
Retained earnings	696,520			663,173			639,362			611,220			583,336
Accumulated other comprehensive income (loss)	27,874			25,648			14,602			(1,595		)	(21,422		)
Total Stockholders' Equity	1,786,437			1,749,012			1,501,636			1,455,848			1,408,260
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	12,457,254		$	12,325,061		$	10,737,857		$	10,210,925		$	9,884,716



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	December 31,			September 30,			June 30,			March 31,			December 31,
	2019			2019			2019			2019			2018
INTEREST INCOME
Loans receivable:
Taxable	$	102,617		$	96,850		$	92,824		$	90,481		$	91,092
Tax-exempt	4,671			4,500			4,244			4,153			3,873
Investment securities:
Taxable	7,993			6,729			6,998			6,095			5,553
Tax-exempt	8,995			8,335			7,454			6,871			6,644
Deposits with financial institutions	1,203			1,363			784			875			1,207
Federal Home Loan Bank stock	342			355			335			338			284
Total Interest Income	125,821			118,132			112,639			108,813			108,653
INTEREST EXPENSE
Deposits	24,074			24,830			23,087			19,594			16,690
Federal funds purchased	26			15			117			93			48
Securities sold under repurchase agreements	367			385			342			330			243
Federal Home Loan Bank advances	1,776			1,894			1,692			1,814			1,691
Subordinated debentures and term loans	1,994			2,076			2,123			2,116			2,097
Total Interest Expense	28,237			29,200			27,361			23,947			20,769
NET INTEREST INCOME	97,584			88,932			85,278			84,866			87,884
Provision for loan losses	500			600			500			1,200			1,664
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	97,084			88,332			84,778			83,666			86,220
OTHER INCOME
Service charges on deposit accounts	6,312			6,107			5,437			5,095			5,516
Fiduciary and wealth management fees	5,384			4,429			3,931			3,818			3,842
Card payment fees	5,430			5,158			4,829			4,826			4,393
Net gains and fees on sales of loans	2,633			2,227			1,736			1,295			1,767
Derivative hedge fees	1,405			1,684			1,487			781			645
Other customer fees	434			450			341			439			511
Earnings on cash surrender value of life insurance	1,458			1,144			946			989			1,074
Net realized gains on sales of available for sale securities	1,039			393			1,843			1,140			253
Other income	150			524			1,064			330			1,179
Total Other Income	24,245			22,116			21,614			18,713			19,180
OTHER EXPENSES
Salaries and employee benefits	39,358			38,942			32,709			33,028			34,350
Net occupancy	5,311			4,777			4,469			5,027			4,737
Equipment	4,429			4,030			4,117			3,642			3,627
Marketing	1,492			1,332			2,752			1,074			1,107
Outside data processing fees	4,428			4,435			3,929			3,684			3,367
Printing and office supplies	484			312			334			315			433
Intangible asset amortization	1,590			1,356			1,520			1,528			1,625
FDIC assessments	—			(668		)	678			707			634
Other real estate owned and foreclosure expenses	66			294			903			1,165			251
Professional and other outside services	2,899			8,251			2,376			1,884			3,002
Other expenses	5,144			4,293			3,800			4,567			4,605
Total Other Expenses	65,201			67,354			57,587			56,621			57,738
INCOME BEFORE INCOME TAX	56,128			43,094			48,805			45,758			47,662
Income tax expense	8,298			6,337			7,749			6,941			5,949
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	47,830		$	36,757		$	41,056		$	38,817		$	41,713

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.87		$	0.71		$	0.83		$	0.79		$	0.85
Diluted Net Income Available to Common Stockholders	$	0.87		$	0.71		$	0.83		$	0.78		$	0.85
Cash Dividends Paid	$	0.26		$	0.26		$	0.26		$	0.22		$	0.22
Average Diluted Shares Outstanding (in thousands)	55,520			51,570			49,550			49,541			49,511
FINANCIAL RATIOS:
Return on Average Assets	1.53		%	1.30		%	1.56		%	1.54		%	1.68		%
Return on Average Stockholders' Equity	10.82			9.21			11.10			10.86			12.10
Return on Average Common Stockholders' Equity	10.82			9.21			11.10			10.86			12.10
Average Earning Assets to Average Assets	89.71			90.37			90.66			90.60			90.41
Allowance for Loan Losses as % of Total Loans	0.95			0.97			1.08			1.11			1.11
Net Charge-offs as % of Average Loans (Annualized)	0.04			0.07			0.01			0.05			(0.03		)
Average Stockholders' Equity to Average Assets	14.17			14.16			14.09			14.18			13.90
Tax Equivalent Yield on Average Earning Assets	4.63			4.77			4.86			4.89			4.97
Interest Expense/Average Earning Assets	1.01			1.15			1.15			1.05			0.93
Net Interest Margin (FTE) on Average Earning Assets	3.62			3.62			3.71			3.84			4.04
Efficiency Ratio	51.07			57.60			51.00			51.18			50.97
Tangible Common Book Value Per Share	$	21.94		$	21.26		$	21.01		$	20.07		$	19.12



LOANS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2019			2019			2019			2019			2018
Commercial and industrial loans	$	2,109,879		$	2,034,311		$	1,877,042		$	1,788,628		$	1,726,664
Agricultural production financing and other loans to farmers	93,861			90,462			83,452			80,357			92,404
Real estate loans:
Construction	787,568			670,138			624,548			542,501			545,729
Commercial and farmland	3,052,698			3,144,649			2,821,689			2,838,798			2,832,102
Residential	1,143,217			1,155,403			993,802			976,668			966,421
Home equity	588,984			601,335			548,006			536,208			528,157
Individuals' loans for household and other personal expenditures	135,989			131,246			98,384			108,216			99,788
Public finance and other commercial loans	547,114			471,716			464,447			427,944			433,202
Loans	8,459,310			8,299,260			7,511,370			7,299,320			7,224,467
Allowance for loan losses	(80,284		)	(80,571		)	(81,274		)	(80,902		)	(80,552		)
NET LOANS	$	8,379,026		$	8,218,689		$	7,430,096		$	7,218,418		$	7,143,915



DEPOSITS
(Dollars In Thousands)	December 31,		September 30,		June 30,		March 31,		December 31,
	2019		2019		2019		2019		2018
Demand deposits	$	5,250,568	$	5,183,971	$	4,309,473	$	4,101,156	$	3,985,178
Savings deposits	2,896,177		2,808,745		2,358,720		2,338,266		2,282,701
Certificates and other time deposits of $100,000 or more	736,843		731,693		720,536		670,199		593,592
Other certificates and time deposits	741,759		811,780		729,392		704,527		646,682
Brokered deposits	214,609		229,262		201,207		233,650		246,440
TOTAL DEPOSITS	$	9,839,956	$	9,765,451	$	8,319,328	$	8,047,798	$	7,754,593



CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	December 31, 2019							December 31, 2018
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	291,616		$	1,203	1.65	%	$	210,121		$	1,207	2.30	%
Federal Home Loan Bank stock	28,736			342		4.76		24,588			284		4.62
Investment Securities: ⁽¹⁾
Taxable	1,339,068			7,993		2.39		843,514			5,553		2.63
Tax-Exempt ⁽²⁾	1,176,851			11,386		3.87		790,657			8,410		4.25
Total Investment Securities	2,515,919			19,379		3.08		1,634,171			13,963		3.42
Loans held for sale	23,712			267		4.50		15,142			177		4.68
Loans: ⁽³⁾
Commercial	6,111,179			81,374		5.33		5,224,202			73,416		5.62
Real Estate Mortgage	916,247			11,256		4.91		739,325			8,375		4.53
Installment	747,166			9,720		5.20		649,717			9,124		5.62
Tax-Exempt ⁽²⁾	560,379			5,913		4.22		474,166			4,903		4.14
Total Loans	8,358,683			108,530		5.19		7,102,552			95,995		5.41
Total Earning Assets	11,194,954			129,454		4.63	%	8,971,432			111,449		4.97	%
Net unrealized gain (loss) on securities available for sale	31,979							(24,206		)
Allowance for loan losses	(80,491		)					(78,926		)
Cash and cash equivalents	179,582							140,065
Premises and equipment	113,333							93,589
Other assets	1,039,682							821,047
Total Assets	$	12,479,039						$	9,923,001
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	3,513,297		$	9,077	1.03	%	$	2,563,703		$	5,565	0.87	%
Money market deposits	1,529,156			4,054		1.06		1,157,022			2,450		0.85
Savings deposits	1,406,548			2,149		0.61		1,134,559			2,016		0.71
Certificates and other time deposits	1,736,058			8,794		2.03		1,542,222			6,659		1.73
Total Interest-bearing Deposits	8,185,059			24,074		1.18		6,397,506			16,690		1.04
Borrowings	669,756			4,163		2.49		611,255			4,079		2.67
Total Interest-bearing Liabilities	8,854,815			28,237		1.28		7,008,761			20,769		1.19
Noninterest-bearing deposits	1,741,735							1,478,492
Other liabilities	113,641							56,295
Total Liabilities	10,710,191							8,543,548
Stockholders' Equity	1,768,848							1,379,453
Total Liabilities and Stockholders' Equity	$	12,479,039		28,237				$	9,923,001		20,769
Net Interest Income (FTE)				$	101,217						$	90,680
Net Interest Spread (FTE) ⁽⁴⁾						3.35	%						3.78	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets						4.63	%						4.97	%
Interest Expense / Average Earning Assets						1.01	%						0.93	%
Net Interest Margin (FTE) ⁽⁵⁾						3.62	%						4.04	%

⁽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 $3,633 and $2,796 for the three months ended December 31, 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 Twelve Months Ended
	December 31, 2019							December 31, 2018
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	211,683		$	4,225	2.00	%	$	110,232		$	2,241	2.03	%
Federal Home Loan Bank stock	25,645			1,370		5.34		24,538			1,234		5.03
Investment Securities: ⁽¹⁾
Taxable	1,101,247			27,815		2.53		841,203			21,597		2.57
Tax-Exempt ⁽²⁾	987,006			40,070		4.06		762,623			32,290		4.23
Total Investment Securities	2,088,253			67,885		3.25		1,603,826			53,887		3.36
Loans held for sale	18,402			780		4.24		11,425			540		4.73
Loans: ⁽³⁾
Commercial	5,631,146			306,139		5.44		5,143,576			274,302		5.33
Real Estate Mortgage	811,188			37,782		4.66		733,709			33,549		4.57
Installment	701,459			38,071		5.43		640,310			34,110		5.33
Tax-Exempt ⁽²⁾	527,995			22,238		4.21		468,751			18,813		4.01
Total Loans	7,690,190			405,010		5.27		6,997,771			361,314		5.16
Total Earning Assets	10,015,771			478,490		4.78	%	8,736,367			418,676		4.79	%
Net unrealized gain on securities available for sale	17,676							(14,790		)
Allowance for loan losses	(81,000		)					(77,444		)
Cash and cash equivalents	142,857							131,925
Premises and equipment	99,343							94,567
Other assets	896,673							818,432
Total Assets	$	11,091,320						$	9,689,057
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	3,070,861		$	33,921	1.10	%	$	2,319,081		$	17,577	0.76	%
Money market deposits	1,300,064			14,111		1.09		1,097,762			6,721		0.61
Savings deposits	1,242,468			9,464		0.76		1,065,031			5,230		0.49
Certificates and other time deposits	1,673,292			34,089		2.04		1,514,271			22,014		1.45
Total Interest-bearing Deposits	7,286,685			91,585		1.26		5,996,145			51,542		0.86
Borrowings	644,729			17,160		2.66		718,061			17,545		2.44
Total Interest-bearing Liabilities	7,931,414			108,745		1.37		6,714,206			69,087		1.03
Noninterest-bearing deposits	1,495,949							1,573,337
Other liabilities	94,342							57,653
Total Liabilities	9,521,705							8,345,196
Stockholders' Equity	1,569,615							1,343,861
Total Liabilities and Stockholders' Equity	$	11,091,320		108,745				$	9,689,057		69,087
Net Interest Income (FTE)				$	369,745						$	349,589
Net Interest Spread (FTE) ⁽⁴⁾						3.41	%						3.76	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets						4.78	%						4.79	%
Interest Expense / Average Earning Assets						1.09	%						0.79	%
Net Interest Margin (FTE) ⁽⁵⁾						3.69	%						4.00	%

⁽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 $13,085 and $10,732 for the twelve months ended December 31, 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.