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frme-20201028
0000712534false00007125342020-10-282020-10-28


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 28, 2020

 Commission File Number 0-17071
FIRST MERCHANTS CORPORATION
(Exact name of registrant as specified in its charter)
Indiana35-1544218
(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 ClassTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.125 stated value per shareFRMENasdaq Global Select Market

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 October 28, 2020, First Merchants Corporation issued a press release to report its financial results for the third quarter ended September 30, 2020. 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.

(c)    Not applicable.

(d)    Exhibits.

Exhibit 99.1 Press Release, dated October 28, 2020, issued by First Merchants Corporation

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




SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
First Merchants Corporation
(Registrant)

By: /s/ Mark K. Hardwick
Mark K. Hardwick
Executive Vice President,
Chief Financial Officer and Chief Operating Officer



Dated: October 28, 2020



EXHIBIT INDEX

Exhibit No.    Description


99.1            Press Release, dated October 28, 2020, issued by First Merchants Corporation

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


N / E / W / S R / E / L / E / A / S / E
    
October 28, 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 THIRD QUARTER 2020 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported third quarter 2020 net income of $36.2 million compared to $36.8 million during the same period in 2019. Earnings per share for the period totaled $.67 per share compared to the third quarter of 2019 result of $.71 per share. Year-to-date net income totaled $103.5 million compared to $116.6 million during the nine months ended September 30, 2019. Year-to-date earnings per share totaled $1.91 compared to $2.32 during the same period in 2019.

Total assets equaled $13.7 billion as of September 30, 2020 and loans totaled $9.2 billion. The Corporation’s loan portfolio increased by $940 million, or 11.3 percent, during the past twelve months. Payroll Protection Program (PPP) loans accounted for $901 million of the period’s loan growth. Investments increased $444 million, or 17.8 percent, during the same period and now total $2.9 billion. Total deposits equaled $10.9 billion as of quarter-end and increased by $1.1 billion, or 11.7 percent.

The loan to deposit ratio now totals 84.8 percent and the loan to asset ratio totals 67.3 percent. As of September 30, 2020, the Corporation’s total risk-based capital ratio equaled 14.38 percent, the common equity tier 1 capital ratio equaled 12.02 percent, and the tangible common equity ratio totaled 9.57 percent. Excluding PPP loans, our tangible common equity ratio totaled 10.19 percent.
The Corporation’s provision expense totaled $12.5 million and net charge-offs for the quarter totaled $6.9 million. The allowance for loan losses totaled $126.7 million as of September 30, 2020, up from $80.6 million as of September 30, 2019. The Corporation chose to defer the adoption of the current expected credit loss (“CECL”) model; therefore, the allowance for loan losses was calculated under the incurred loss method. Allowance for loan losses was 1.37% of total loans, 1.65% including remaining fair value marks with allowance, and 1.83% excluding PPP loans from total loans. The $51.9 million increase in year-to-date provision expense primarily reflects our view of increased credit risk related to the COVID-19 pandemic.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our third quarter results highlight increased earnings power as our net interest margin stabilizes while our fee levels reflect increasing activity in customer spending and treasury technology use. Our clients and businesses remain healthy and resilient. Their determination and results mirror the First Merchants’ employee base and the Bank’s performance. Our earnings also increased due to a reduced provision level. The provision level and resultant loan loss reserve reflect a loan portfolio which is granular, diversified and actively reviewed. First Merchants’ exposure to higher risk industries is modest in any peer comparison and is borne out by the low level of customers (2%) utilizing the deferrals and modifications provided through the CARES Act. Capital preservation and capital composition are strengths that will serve us well as we assess the recessionary climate that likely remains through 2021.”

“My confidence regarding 2021 and our longer term future also reflects the executive succession plan announced September 29, 2020. Our Board of Directors’ decision to choose internal candidates to lead First Merchants augers well for high performance and cultural continuity. Mark Hardwick, who will become CEO on January 1, 2021, in tandem with Mike Stewart as President and Michele Kawiecki as Chief Financial Officer, form a trio who are experienced, skilled, and trusted. I am excited about First Merchants’ future and the opportunity to expertly serve our communities, shareholders and teammates.”





Net-interest income for the quarter totaled $92.9 million, up nearly $4 million from the third quarter of 2019 despite margin compression year-over-year of 47 basis points. Linked quarter net-interest margin stabilized as the decline totaled just 4 basis points, two basis points due to fair value accretion and one basis point due to the impact of PPP loans. Yields on earning assets totaled 3.58 percent and the cost of supporting liabilities totaled 43 basis points resulting in quarterly net interest margin of 3.15 percent.

Non-interest income totaled $26.2 million for the quarter, a $4 million increase over the third quarter of 2019. Gains from the sale of mortgage loans reached record levels totaling $5.8 million for the quarter. Non-interest expense totaled $64.7 million for the quarter compared to $67.4 million in the third quarter of 2019, which included $11.2 million of acquisition related expense.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Wednesday, October 28, 2020.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until November 26, 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 10147757.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme201026.html during the time of the call. A replay of the web cast will be available until October 28, 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)September 30,
20202019
ASSETS
Cash and cash equivalents$164,632 $202,383 
Interest-bearing deposits273,936 230,101 
Investment securities2,933,286 2,489,420 
Loans held for sale3,183 7,910 
Loans9,243,833 8,299,260 
Less: Allowance for loan losses(126,726)(80,571)
Net loans9,117,107 8,218,689 
Premises and equipment112,959 113,446 
Federal Home Loan Bank stock28,736 28,736 
Interest receivable52,992 45,923 
Goodwill and other intangibles574,369 579,751 
Cash surrender value of life insurance291,543 286,747 
Other real estate owned6,942 7,156 
Tax asset, deferred and receivable21,762 15,187 
Other assets155,903 99,612 
TOTAL ASSETS$13,737,350 $12,325,061 
LIABILITIES
Deposits:
Noninterest-bearing$2,187,607 $1,777,365 
Interest-bearing8,718,546 7,988,086 
Total Deposits10,906,153 9,765,451 
Borrowings:
Federal funds purchased80,000 —
Securities sold under repurchase agreements187,732 191,603 
Federal Home Loan Bank advances399,522 354,609 
Subordinated debentures and other borrowings118,320 138,630 
Total Borrowings785,574 684,842 
Interest payable5,038 7,855 
Other liabilities206,929 117,901 
Total Liabilities11,903,694 10,576,049 
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares125 125 
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 53,891,733 and 55,345,672 shares6,736 6,918 
Additional paid-in capital1,003,777 1,053,148 
Retained earnings757,550 663,173 
Accumulated other comprehensive income (loss)65,468 25,648 
Total Stockholders' Equity1,833,656 1,749,012 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$13,737,350 $12,325,061 






CONSOLIDATED STATEMENTS OF INCOMEThree Months EndedNine Months Ended
(Dollars In Thousands, Except Per Share Amounts)September 30,September 30,
2020201920202019
INTEREST INCOME
Loans receivable:
Taxable$84,162 $96,850 $268,126 $280,155 
Tax-exempt5,395 4,500 16,069 12,897 
Investment securities:
Taxable5,399 6,729 19,177 19,822 
Tax-exempt10,931 8,335 30,285 22,660 
Deposits with financial institutions90 1,363 799 3,022 
Federal Home Loan Bank stock248 355 828 1,028 
Total Interest Income106,225 118,132 335,284 339,584 
INTEREST EXPENSE
Deposits9,776 24,830 44,231 67,511 
Federal funds purchased5 15 118 225 
Securities sold under repurchase agreements83 385 527 1,057 
Federal Home Loan Bank advances1,749 1,894 5,317 5,400 
Subordinated debentures and other borrowings1,691 2,076 5,275 6,315 
Total Interest Expense13,304 29,200 55,468 80,508 
NET INTEREST INCOME92,921 88,932 279,816 259,076 
Provision for loan losses12,544 600 54,191 2,300 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES80,377 88,332 225,625 256,776 
OTHER INCOME
Service charges on deposit accounts5,209 6,107 15,491 16,639 
Fiduciary and wealth management fees5,910 4,429 17,496 12,178 
Card payment fees3,996 5,158 16,000 14,813 
Net gains and fees on sales of loans5,841 2,227 12,878 5,258 
Derivative hedge fees1,715 1,684 4,696 3,952 
Other customer fees372 450 1,103 1,230 
Earnings on cash surrender value of life insurance1,171 1,144 3,857 3,079 
Net realized gains on sales of available for sale securities1,817 393 9,497 3,376 
Other income132 524 1,425 1,918 
Total Other Income26,163 22,116 82,443 62,443 
OTHER EXPENSES
Salaries and employee benefits39,187 38,942 114,128 104,679 
Net occupancy5,855 4,777 17,103 14,273 
Equipment4,956 4,030 13,789 11,789 
Marketing1,311 1,332 4,846 5,158 
Outside data processing fees3,776 4,435 10,593 12,048 
Printing and office supplies331 312 997 961 
Intangible asset amortization1,486 1,356 4,511 4,404 
FDIC assessments1,249 (668)4,244 717 
Other real estate owned and foreclosure expenses717 294 1,906 2,362 
Professional and other outside services2,254 8,251 6,065 12,511 
Other expenses3,587 4,293 12,687 12,660 
Total Other Expenses64,709 67,354 190,869 181,562 
INCOME BEFORE INCOME TAX41,831 43,094 117,199 137,657 
Income tax expense5,621 6,337 13,734 21,027 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$36,210 $36,757 $103,465 $116,630 
Per Share Data:
Basic Net Income Available to Common Stockholders$0.67 $0.71 $1.91 $2.33 
Diluted Net Income Available to Common Stockholders$0.67 $0.71 $1.91 $2.32 
Cash Dividends Paid$0.26 $0.26 $0.78 $0.74 
Average Diluted Shares Outstanding (in thousands)53,971 51,570 54,278 50,227 



FINANCIAL HIGHLIGHTS
(Dollars in thousands)Three Months EndedNine Months Ended
September 30,September 30,
2020201920202019
NET CHARGE-OFFS$6,937 $1,303 $7,749 $2,281 
AVERAGE BALANCES:
Total Assets$13,660,818 $11,277,742 $13,297,789 $10,623,664 
Total Loans9,252,839 7,773,328 8,987,645 7,464,910 
Total Earning Assets12,341,257 10,192,183 11,941,839 9,618,285 
Total Deposits10,944,721 8,922,222 10,541,777 8,397,056 
Total Stockholders' Equity1,831,300 1,596,595 1,814,471 1,502,474 
FINANCIAL RATIOS:
Return on Average Assets1.06 %1.30 %1.04 %1.46 %
Return on Average Stockholders' Equity7.91 9.21 7.60 10.35 
Return on Average Common Stockholders' Equity7.91 9.21 7.60 10.35 
Average Earning Assets to Average Assets90.34 90.37 89.80 90.54 
Allowance for Loan Losses as % of Total Loans1.37 0.97 1.37 0.97 
Net Charge-offs as % of Average Loans (Annualized)0.30 0.07 0.11 0.04 
Average Stockholders' Equity to Average Assets13.41 14.16 13.64 14.14 
Tax Equivalent Yield on Average Earning Assets3.58 4.77 3.88 4.84 
Interest Expense/Average Earning Assets0.43 1.15 0.62 1.12 
Net Interest Margin (FTE) on Average Earning Assets3.15 3.62 3.26 3.72 
Efficiency Ratio51.40 57.60 50.52 53.36 
Tangible Common Book Value Per Share$23.48 $21.26 $23.48 $21.26 

NON-PERFORMING ASSETS
(Dollars In Thousands)September 30,June 30,March 31,December 31,September 30,
20202020202020192019
Non-Accrual Loans$56,739 $50,102 $15,649 $15,949 $22,728 
Renegotiated Loans2,677 1,086 665 841 576 
Non-Performing Loans (NPL)59,416 51,188 16,314 16,790 23,304 
Other Real Estate Owned and Repossessions6,984 7,409 8,017 7,527 7,156 
Non-Performing Assets (NPA)66,400 58,597 24,331 24,317 30,460 
90+ Days Delinquent1,330 4,981 312 69 82 
NPAs & 90 Day Delinquent$67,730 $63,578 $24,643 $24,386 $30,542 
Allowance for Loan Losses$126,726 $121,119 $99,454 $80,284 $80,571 
Quarterly Net Charge-offs6,937 230 582 787 1,303 
NPAs / Actual Assets %0.48 %0.42 %0.19 %0.20 %0.25 %
NPAs & 90 Day / Actual Assets %0.49 %0.46 %0.19 %0.20 %0.25 %
NPAs / Actual Loans and OREO %0.72 %0.63 %0.28 %0.29 %0.37 %
Allowance for Loan Losses / Actual Loans (%)1.37 %1.30 %1.15 %0.95 %0.97 %
Net Charge-offs as % of Average Loans (Annualized)0.30 %0.01 %0.03 %0.04 %0.07 %



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)September 30,June 30,March 31,December 31,September 30,
20202020202020192019
ASSETS
Cash and cash equivalents$164,632 $229,759 $127,731 $177,201 $202,383 
Interest-bearing deposits273,936 380,021 132,944 118,263 230,101 
Investment securities2,933,286 2,789,379 2,697,954 2,596,063 2,489,420 
Loans held for sale3,183 901 5,039 9,037 7,910 
Loans9,243,833 9,298,541 8,606,849 8,459,310 8,299,260 
Less: Allowance for loan losses(126,726)(121,119)(99,454)(80,284)(80,571)
Net loans9,117,107 9,177,422 8,507,395 8,379,026 8,218,689 
Premises and equipment112,959 112,548 114,045 113,055 113,446 
Federal Home Loan Bank stock28,736 28,736 28,736 28,736 28,736 
Interest receivable52,992 57,063 47,489 48,901 45,923 
Goodwill and other intangibles574,369 575,855 577,366 578,880 579,751 
Cash surrender value of life insurance291,543 290,715 289,574 288,206 286,747 
Other real estate owned6,942 7,367 7,972 7,527 7,156 
Tax asset, deferred and receivable21,762 13,126 9,497 12,165 15,187 
Other assets155,903 156,486 147,776 100,194 99,612 
TOTAL ASSETS$13,737,350 $13,819,378 $12,693,518 $12,457,254 $12,325,061 
LIABILITIES
Deposits:
Noninterest-bearing$2,187,607 $2,260,351 $1,688,205 $1,736,396 $1,777,365 
Interest-bearing8,718,546 8,705,637 8,182,279 8,103,560 7,988,086 
Total Deposits10,906,153 10,965,988 9,870,484 9,839,956 9,765,451 
Borrowings:
Federal funds purchased80,000 — 47,000 55,000 — 
Securities sold under repurchase agreements187,732 181,150 183,317 187,946 191,603 
Federal Home Loan Bank advances399,522 400,817 480,995 351,072 354,609 
Subordinated debentures and other borrowings118,320 285,197 128,741 138,685 138,630 
Total Borrowings785,574 867,164 840,053 732,703 684,842 
Interest payable5,038 5,587 7,746 6,754 7,855 
Other liabilities206,929 171,544 197,275 91,404 117,901 
Total Liabilities11,903,694 12,010,283 10,915,558 10,670,817 10,576,049 
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding125 125 125 125 125 
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding6,736 6,724 6,719 6,921 6,918 
Additional paid-in capital1,003,777 1,002,962 1,000,942 1,054,997 1,053,148 
Retained earnings757,550 735,439 716,518 696,520 663,173 
Accumulated other comprehensive income (loss)65,468 63,845 53,656 27,874 25,648 
Total Stockholders' Equity1,833,656 1,809,095 1,777,960 1,786,437 1,749,012 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$13,737,350 $13,819,378 $12,693,518 $12,457,254 $12,325,061 







CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)September 30,June 30,March 31,December 31,September 30,
20202020202020192019
INTEREST INCOME
Loans receivable:
Taxable$84,162 $87,312 $96,652 $102,617 $96,850 
Tax-exempt5,395 5,359 5,315 4,671 4,500 
Investment securities:
Taxable5,399 6,147 7,631 7,993 6,729 
Tax-exempt10,931 10,019 9,335 8,995 8,335 
Deposits with financial institutions90 134 575 1,203 1,363 
Federal Home Loan Bank stock248 281 299 342 355 
Total Interest Income106,225 109,252 119,807 125,821 118,132 
INTEREST EXPENSE
Deposits9,776 12,707 21,748 24,074 24,830 
Federal funds purchased5 2 111 26 15 
Securities sold under repurchase agreements83 92 352 367 385 
Federal Home Loan Bank advances1,749 1,794 1,774 1,776 1,894 
Subordinated debentures and other borrowings1,691 1,639 1,945 1,994 2,076 
Total Interest Expense13,304 16,234 25,930 28,237 29,200 
NET INTEREST INCOME92,921 93,018 93,877 97,584 88,932 
Provision for loan losses12,544 21,895 19,752 500 600 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES80,377 71,123 74,125 97,084 88,332 
OTHER INCOME
Service charges on deposit accounts5,209 4,312 5,970 6,312 6,107 
Fiduciary and wealth management fees5,910 5,601 5,985 5,384 4,429 
Card payment fees3,996 6,097 5,907 5,430 5,158 
Net gains and fees on sales of loans5,841 3,674 3,363 2,633 2,227 
Derivative hedge fees1,715 1,042 1,939 1,405 1,684 
Other customer fees372 333 398 434 450 
Earnings on cash surrender value of life insurance1,171 1,326 1,360 1,458 1,144 
Net realized gains on sales of available for sale securities1,817 3,068 4,612 1,039 393 
Other income132 1,028 265 150 524 
Total Other Income26,163 26,481 29,799 24,245 22,116 
OTHER EXPENSES
Salaries and employee benefits39,187 35,698 39,243 39,358 38,942 
Net occupancy5,855 5,447 5,801 5,311 4,777 
Equipment4,956 4,489 4,344 4,429 4,030 
Marketing1,311 2,092 1,443 1,492 1,332 
Outside data processing fees3,776 2,618 4,199 4,428 4,435 
Printing and office supplies331 279 387 484 312 
Intangible asset amortization1,486 1,511 1,514 1,590 1,356 
FDIC assessments1,249 1,472 1,523 — (668)
Other real estate owned and foreclosure expenses717 684 505 66 294 
Professional and other outside services2,254 1,553 2,258 2,899 8,251 
Other expenses3,587 4,146 4,954 5,144 4,293 
Total Other Expenses64,709 59,989 66,171 65,201 67,354 
INCOME BEFORE INCOME TAX41,831 37,615 37,753 56,128 43,094 
Income tax expense5,621 4,623 3,490 8,298 6,337 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$36,210 $32,992 $34,263 $47,830 $36,757 
Per Share Data:
Basic Net Income Available to Common Stockholders$0.67 $0.62 $0.63 $0.87 $0.71 
Diluted Net Income Available to Common Stockholders$0.67 $0.62 $0.62 $0.87 $0.71 
Cash Dividends Paid$0.26 $0.26 $0.26 $0.26 $0.26 
Average Diluted Shares Outstanding (in thousands)53,971 53,943 54,918 55,520 51,570 
FINANCIAL RATIOS:
Return on Average Assets1.06 %0.97 %1.09 %1.53 %1.30 %
Return on Average Stockholders' Equity7.91 7.35 7.55 10.82 9.21 
Return on Average Common Stockholders' Equity7.91 7.35 7.55 10.82 9.21 
Average Earning Assets to Average Assets90.34 89.25 89.81 89.71 90.37 
Allowance for Loan Losses as % of Total Loans1.37 1.30 1.15 0.95 0.97 
Net Charge-offs as % of Average Loans (Annualized)0.30 0.01 0.03 0.04 0.07 
Average Stockholders' Equity to Average Assets13.41 13.15 14.45 14.17 14.16 
Tax Equivalent Yield on Average Earning Assets3.58 3.72 4.38 4.63 4.77 
Interest Expense/Average Earning Assets0.43 0.53 0.92 1.01 1.15 
Net Interest Margin (FTE) on Average Earning Assets3.15 3.19 3.46 3.62 3.62 
Efficiency Ratio51.40 47.95 52.17 51.07 57.60 
Tangible Common Book Value Per Share$23.48 $23.04 $22.46 $21.94 $21.26 



LOANS
(Dollars In Thousands)September 30,June 30,March 31,December 31,September 30,
20202020202020192019
Commercial and industrial loans$2,875,331 $2,898,329 $2,199,226 $2,109,879 $2,034,311 
Agricultural production financing and other loans to farmers83,090 93,838 87,421 93,861 90,462 
Real estate loans:
Construction622,084 640,560 643,674 787,568 670,138 
Commercial and farmland3,248,506 3,239,998 3,268,168 3,052,698 3,144,649 
Residential1,146,406 1,145,187 1,121,556 1,143,217 1,155,403 
Home equity527,458 532,314 570,398 588,984 601,335 
Individuals' loans for household and other personal expenditures125,411 123,611 129,765 135,989 131,246 
Public finance and other commercial loans615,547 624,704 586,641 547,114 471,716 
Loans9,243,833 9,298,541 8,606,849 8,459,310 8,299,260 
Allowance for loan losses(126,726)(121,119)(99,454)(80,284)(80,571)
NET LOANS$9,117,107 $9,177,422 $8,507,395 $8,379,026 $8,218,689 

DEPOSITS
(Dollars In Thousands)September 30,June 30,March 31,December 31,September 30,
20202020202020192019
Demand deposits$6,279,554 $6,288,360 $5,293,200 $5,250,568 $5,183,971 
Savings deposits3,518,286 3,278,156 2,962,821 2,896,177 2,808,745 
Certificates and other time deposits of $100,000 or more467,610 607,474 694,062 736,843 731,693 
Other certificates and time deposits542,919 669,119 717,723 741,759 811,780 
Brokered deposits97,784 122,879 202,678 214,609 229,262 
TOTAL DEPOSITS$10,906,153 $10,965,988 $9,870,484 $9,839,956 $9,765,451 




CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
For the Three Months Ended
September 30, 2020September 30, 2019
Average BalanceInterest
 Income /
Expense		Average
Rate		Average BalanceInterest
 Income /
Expense		Average
Rate
Assets: 
Interest-bearing deposits$301,529 $90 0.12 %$262,082 $1,363 2.06 %
Federal Home Loan Bank stock28,736 248 3.45 24,633 355 5.76 
Investment Securities: (1)
 
Taxable1,258,690 5,399 1.72 1,104,612 6,729 2.44 
Tax-Exempt (2)
1,499,463 13,837 3.69 1,027,528 10,551 4.11 
Total Investment Securities2,758,153 19,236 2.79 2,132,140 17,280 3.24 
Loans held for sale24,705 257 4.16 21,913 274 5.00 
Loans: (3)
Commercial6,965,837 66,826 3.84 5,674,956 77,370 5.45 
Real Estate Mortgage887,661 9,996 4.50 822,874 9,518 4.63 
Installment693,363 7,083 4.09 715,428 9,688 5.42 
Tax-Exempt (2)
681,273 6,829 4.01 538,157 5,696 4.23 
Total Loans9,252,839 90,991 3.93 7,773,328 102,546 5.28 
Total Earning Assets12,341,257 110,565 3.58 %10,192,183 121,544 4.77 %
Net unrealized gain (loss) on securities available for sale70,277 30,353 
Allowance for loan losses(125,150)(80,918)
Cash and cash equivalents169,539 143,266 
Premises and equipment113,216 99,021 
Other assets1,091,679 893,837 
Total Assets$13,660,818 $11,277,742  
Liabilities:  
Interest-bearing deposits:  
Interest-bearing deposits$4,098,017 $3,890 0.38 %$3,134,675 $9,285 1.18 %
Money market deposits1,813,392 1,167 0.26 1,307,647 3,766 1.14 
Savings deposits1,574,700 583 0.15 1,244,859 2,523 0.80 
Certificates and other time deposits1,267,152 4,136 1.31 1,736,759 9,256 2.11 
Total Interest-bearing Deposits8,753,261 9,776 0.45 7,423,940 24,830 1.33 
Borrowings733,757 3,528 1.92 660,107 4,370 2.59 
Total Interest-bearing Liabilities9,487,018 13,304 0.56 8,084,047 29,200 1.43 
Noninterest-bearing deposits2,191,460 1,498,282  
Other liabilities151,040 98,818  
Total Liabilities11,829,518 9,681,147  
Stockholders' Equity1,831,300 1,596,595  
Total Liabilities and Stockholders' Equity$13,660,818 13,304 $11,277,742 29,200 
Net Interest Income (FTE)$97,261  $92,344 
Net Interest Spread (FTE) (4)
3.02 %  3.34 %
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets3.58 %4.77 %
Interest Expense / Average Earning Assets0.43 %1.15 %
Net Interest Margin (FTE) (5)
3.15 %3.62 %
(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2020 and 2019. These totals equal $4,340 and $3,412 for the three months ended September 30, 2020 and 2019, 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 Nine Months Ended
September 30, 2020September 30, 2019
Average BalanceInterest
 Income /
Expense		Average
Rate		Average BalanceInterest
 Income /
Expense		Average
Rate
Assets:
Federal Funds Sold
Interest-bearing deposits$280,038 $799 0.38 %$184,640 $3,022 2.18 %
Federal Home Loan Bank stock28,736 828 3.84 24,603 1,028 5.57 
Investment Securities: (1)
Taxable1,302,943 19,177 1.96 1,021,102 19,822 2.59 
Tax-Exempt (2)
1,342,477 38,335 3.81 923,030 28,684 4.14 
Total Investment Securities2,645,420 57,512 2.90 1,944,132 48,506 3.33 
Loans held for sale17,175 581 4.51 13,618 512 5.01 
Loans: (3)
Commercial6,698,042 213,241 4.24 5,469,377 224,766 5.48 
Real Estate Mortgage882,911 30,520 4.61 778,778 26,526 4.54 
Installment725,596 23,784 4.37 686,055 28,351 5.51 
Tax-Exempt (2)
663,921 20,341 4.09 517,082 16,325 4.21 
Total Loans8,987,645 288,467 4.28 7,464,910 296,480 5.30 
Total Earning Assets11,941,839 347,606 3.88 %9,618,285 349,036 4.84 %
Net unrealized gain on securities available for sale58,623 12,856 
Allowance for loan losses(104,465)(81,172)
Cash and cash equivalents210,778 130,587 
Premises and equipment113,517 94,628 
Other assets1,077,497 848,480 
Total Assets$13,297,789 $10,623,664 
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits$3,880,489 $16,351 0.56 %$2,921,762 $24,844 1.13 %
Money market deposits1,674,622 6,647 0.53 1,222,860 10,057 1.10 
Savings deposits1,507,269 3,007 0.27 1,187,173 7,315 0.82 
Certificates and other time deposits1,476,499 18,226 1.65 1,652,141 25,295 2.04 
Total Interest-bearing Deposits8,538,879 44,231 0.69 6,983,936 67,511 1.29 
Borrowings796,836 11,237 1.88 636,295 12,997 2.72 
Total Interest-bearing Liabilities9,335,715 55,468 0.79 7,620,231 80,508 1.41 
Noninterest-bearing deposits2,002,898 1,413,120 
Other liabilities144,705 87,839 
Total Liabilities11,483,318 9,121,190 
Stockholders' Equity1,814,471 1,502,474 
Total Liabilities and Stockholders' Equity$13,297,789 55,468 $10,623,664 80,508 
Net Interest Income (FTE)$292,138 $268,528 
Net Interest Spread (FTE) (4)
3.09 %3.43 %
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets3.88 %4.84 %
Interest Expense / Average Earning Assets0.62 %1.12 %
Net Interest Margin (FTE) (5)
3.26 %3.72 %
(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2020 and 2019. These totals equal $12,322 and $9,452 for the nine months ended September 30, 2020 and 2019, 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.