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frme-20210128
0000712534false00007125342021-01-282021-01-28


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): January 28, 2021

 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 January 28, 2021, First Merchants Corporation issued a press release to report its financial results for the fourth quarter ended December 31, 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 January 28, 2021, issued by First Merchants Corporation

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




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


First Merchants Corporation
(Registrant)
By: /s/ Michele M. Kawiecki
                        Michele M. Kawiecki
                        Chief Financial Officer
Dated: January 28, 2021



EXHIBIT INDEX

Exhibit No.    Description


99.1            Press Release, dated January 28, 2021, 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
    
January 28, 2021

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 FOURTH QUARTER 2020 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported fourth quarter 2020 net income of $45.1 million compared to $47.8 million during the same period in 2019. Earnings per share for the period totaled $.83 per share compared to fourth quarter 2019 result of $.87 per share. Net income for the year ended December 31, 2020 totaled $148.6 million, compared to $164.5 million during the same period in 2019. Year-to-date earnings per share totaled $2.74 compared to $3.19 in 2019.

Total assets equaled $14.1 billion as of year-end and loans totaled $9.2 billion. The Corporation’s loan portfolio increased by $789 million, or 9.2 percent, during 2020. Paycheck Protection Program (“PPP”) loans accounted for $667 million of the year’s loan growth. Investments increased $551 million, or 21.2 percent, during the year and now total $3.1 billion. Total deposits equaled $11.4 billion as of year-end and increased by $1.5 billion, or 15.5 percent, during 2020.

Mark Hardwick, Chief Executive Officer, stated, “We are proud of our 2020 results given the significant headwinds of the past year. The global pandemic quickly turned 2020 into a year filled with economic, political, medical and logistical challenges. However, our employees demonstrated courage and a can-do attitude for the benefit of all stakeholders. We guided over 5,200 customers through the Paycheck Protection Program while maintaining branch and back-office operations with as many as 1,000 employees working remotely. We grew loans by 9.2 percent, deposits by 15.5 percent, processed over 2,700 loan modifications and donated an additional $1 million to COVID relief efforts in our communities. Despite providing $58.7 million to the allowance for loan losses and managing through 40 basis points of margin compression we still delivered $149 million of net income to shareholders.” Hardwick also added, “Executive management expects 2021 to be a year of increasing momentum as the vaccine helps reopen our lobbies and allows us to repopulate our offices while growing our customer base.”

At the beginning of 2020, the Corporation chose to defer the adoption of the current expected credit loss (“CECL”) model. The passing of the 2021 Consolidated Appropriations Act in December of 2020 prompted the SEC to allow for the adoption of CECL on January 1, 2021 with a Day 1 measurement date of January 1, 2021. As such, the allowance for loan losses was calculated under the incurred loss method in the fourth quarter. The Corporation’s provision expense totaled $4.5 million for the fourth quarter and $58.7 million for the year ended December 31, 2020. Net charge-offs totaled $0.6 million for the quarter and $8.3 million for the year. The allowance for loan losses totaled $130.6 million at year end, which increased $3.9 million in the fourth quarter. Allowance for loan losses is 1.41 percent of total loans and 1.52 percent excluding PPP loans from total loans. The Corporation also has $23 million in remaining fair value marks.

Net-interest income totaled $382.1 million for the year, an increase of $25.5 million, or 7.1 percent, in the face of a net-interest margin decline of 40 basis points to 3.29 percent. Yield on earning assets declined by 94 basis points totaling 3.84 percent and the cost of supporting liabilities decreased by 54 basis points and totaled 0.55 percent. Fair value accretion contributed one basis point less in margin as it accounted for 12 basis points in 2019 and 11 basis points in 2020. Yield on earning assets for the fourth quarter totaled 3.72 percent with cost of supporting liabilities totaling 0.34 percent resulting in a margin of 3.38 percent. PPP loans contributed 16 basis points to margin during the fourth quarter as unamortized SBA fees were recognized upon loan forgiveness.

Non-interest income totaled $109.9 million for the year, a $23.2 million, or 26.8 percent increase from 2019. Customer specific line items accounted for $15.3 million of increase in total non-interest income. Gains on sales of mortgage loans increased $10.4 million over 2019 and hit a record high of $18.3 million for 2020 which offset the headwinds of lower service charges on deposits and the impact of the Durbin Amendment adoption on card payment fees. Fiduciary and wealth management fees also contributed to the increase with growth of $6.2 million over 2019.



Non-interest expense totaled $263.4 million for the year ended 2020, a $16.6 million increase from 2019. The fourth quarter of 2020 includes charges of $4.5 million related to the announcement of the consolidation of 17 banking centers. Additionally, FDIC expense increased $5.1 million year over year due to the use of FDIC credits in 2019. Merger related expenses of $13.7 million were also included in the 2019 totals.

The Corporation’s loan to deposit ratio now totals 81 percent and loan to asset ratio totals 66 percent. Additionally, the Corporation’s total risk-based capital ratio equaled 14.36 percent, common equity tier 1 capital ratio equaled 12.02 percent, and the tangible common equity ratio totaled 9.65 percent. Excluding PPP loans, the tangible common equity ratio totaled 9.99 percent.

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 28, 2021.

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 28, 2021. 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 10150572.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme210128.html during the time of the call. A replay of the web cast will be available until January 28, 2022.

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,
20202019
ASSETS
Cash and cash equivalents$192,896 $177,201 
Interest-bearing deposits392,305 118,263 
Investment securities3,146,787 2,596,063 
Loans held for sale3,966 9,037 
Loans9,243,174 8,459,310 
Less: Allowance for loan losses(130,648)(80,284)
Net loans9,112,526 8,379,026 
Premises and equipment111,062 113,055 
Federal Home Loan Bank stock28,736 28,736 
Interest receivable53,948 48,901 
Goodwill and other intangibles572,893 578,880 
Cash surrender value of life insurance292,745 288,206 
Other real estate owned940 7,527 
Tax asset, deferred and receivable12,340 12,165 
Other assets146,066 100,194 
TOTAL ASSETS$14,067,210 $12,457,254 
LIABILITIES
Deposits:
Noninterest-bearing$2,298,138 $1,736,396 
Interest-bearing9,063,472 8,103,560 
Total Deposits11,361,610 9,839,956 
Borrowings:
Federal funds purchased— 55,000 
Securities sold under repurchase agreements177,102 187,946 
Federal Home Loan Bank advances389,430 351,072 
Subordinated debentures and other borrowings118,380 138,685 
Total Borrowings684,912 732,703 
Interest payable3,287 6,754 
Other liabilities141,756 91,404 
Total Liabilities12,191,565 10,670,817 
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 - 53,922,359 and 55,368,482 shares6,740 6,921 
Additional paid-in capital1,005,366 1,054,997 
Retained earnings788,578 696,520 
Accumulated other comprehensive income74,836 27,874 
Total Stockholders' Equity1,875,645 1,786,437 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$14,067,210 $12,457,254 






CONSOLIDATED STATEMENTS OF INCOMEThree Months EndedTwelve Months Ended
(Dollars In Thousands, Except Per Share Amounts)December 31,December 31,
2020201920202019
INTEREST INCOME
Loans receivable:
Taxable$90,138 $102,617 $358,264 $382,772 
Tax-exempt5,414 4,671 21,483 17,568 
Investment securities:
Taxable5,263 7,993 24,440 27,815 
Tax-exempt12,056 8,995 42,341 31,655 
Deposits with financial institutions139 1,203 938 4,225 
Federal Home Loan Bank stock214 342 1,042 1,370 
Total Interest Income113,224 125,821 448,508 465,405 
INTEREST EXPENSE
Deposits7,509 24,074 51,740 91,585 
Federal funds purchased2 26 120 251 
Securities sold under repurchase agreements77 367 604 1,424 
Federal Home Loan Bank advances1,656 1,776 6,973 7,176 
Subordinated debentures and other borrowings1,669 1,994 6,944 8,309 
Total Interest Expense10,913 28,237 66,381 108,745 
NET INTEREST INCOME102,311 97,584 382,127 356,660 
Provision for loan losses4,482 500 58,673 2,800 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES97,829 97,084 323,454 353,860 
OTHER INCOME
Service charges on deposit accounts5,508 6,312 20,999 22,951 
Fiduciary and wealth management fees6,251 5,384 23,747 17,562 
Card payment fees3,502 5,430 19,502 20,243 
Net gains and fees on sales of loans5,393 2,633 18,271 7,891 
Derivative hedge fees2,281 1,405 6,977 5,357 
Other customer fees394 434 1,497 1,664 
Earnings on cash surrender value of life insurance1,283 1,458 5,140 4,537 
Net realized gains on sales of available for sale securities2,398 1,039 11,895 4,415 
Other income473 150 1,898 2,068 
Total Other Income27,483 24,245 109,926 86,688 
OTHER EXPENSES
Salaries and employee benefits41,809 39,358 155,937 144,037 
Net occupancy9,653 5,311 26,756 19,584 
Equipment5,555 4,429 19,344 16,218 
Marketing1,763 1,492 6,609 6,650 
Outside data processing fees3,839 4,428 14,432 16,476 
Printing and office supplies307 484 1,304 1,445 
Intangible asset amortization1,476 1,590 5,987 5,994 
FDIC assessments1,560 — 5,804 717 
Other real estate owned and foreclosure expenses(1,576)66 330 2,428 
Professional and other outside services2,836 2,899 8,901 15,410 
Other expenses5,314 5,144 18,001 17,804 
Total Other Expenses72,536 65,201 263,405 246,763 
INCOME BEFORE INCOME TAX52,776 56,128 169,975 193,785 
Income tax expense7,641 8,298 21,375 29,325 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$45,135 $47,830 $148,600 $164,460 
Per Share Data:
Basic Net Income Available to Common Stockholders$0.83 $0.87 $2.75 $3.20 
Diluted Net Income Available to Common Stockholders$0.83 $0.87 $2.74 $3.19 
Cash Dividends Paid$0.26 $0.26 $1.04 $1.00 
Average Diluted Shares Outstanding (in thousands)54,050 55,520 54,220 51,561 



FINANCIAL HIGHLIGHTS
(Dollars in thousands)Three Months EndedTwelve Months Ended
December 31,December 31,
2020201920202019
NET CHARGE-OFFS$560 $787 $8,309 $3,068 
AVERAGE BALANCES:
Total Assets$13,968,047 $12,479,039 $13,466,269 $11,091,320 
Total Loans9,240,304 8,358,683 9,051,155 7,690,190 
Total Earning Assets12,663,803 11,194,954 12,123,317 10,015,771 
Total Deposits11,283,040 9,926,794 10,728,106 8,782,634 
Total Stockholders' Equity1,856,896 1,768,848 1,825,135 1,569,615 
FINANCIAL RATIOS:
Return on Average Assets1.29 %1.53 %1.10 %1.48 %
Return on Average Stockholders' Equity9.72 10.82 8.14 10.48 
Return on Average Common Stockholders' Equity9.72 10.82 8.14 10.48 
Average Earning Assets to Average Assets90.66 89.71 90.03 90.30 
Allowance for Loan Losses as % of Total Loans1.41 0.95 1.41 0.95 
Net Charge-offs as % of Average Loans (Annualized)0.02 0.04 0.09 0.04 
Average Stockholders' Equity to Average Assets13.29 14.17 13.55 14.15 
Tax Equivalent Yield on Average Earning Assets3.72 4.63 3.84 4.78 
Interest Expense/Average Earning Assets0.34 1.01 0.55 1.09 
Net Interest Margin (FTE) on Average Earning Assets3.38 3.62 3.29 3.69 
Efficiency Ratio55.01 51.07 51.71 52.73 
Tangible Common Book Value Per Share$24.27 $21.94 $24.27 $21.94 

NON-PERFORMING ASSETS
(Dollars In Thousands)December 31,September 30,June 30,March 31,December 31,
20202020202020202019
Non-Accrual Loans$61,471 $56,739 $50,102 $15,649 $15,949 
Renegotiated Loans3,240 2,677 1,086 665 841 
Non-Performing Loans (NPL)64,711 59,416 51,188 16,314 16,790 
Other Real Estate Owned and Repossessions940 6,984 7,409 8,017 7,527 
Non-Performing Assets (NPA)65,651 66,400 58,597 24,331 24,317 
90+ Days Delinquent746 1,330 4,981 312 69 
NPAs & 90 Day Delinquent$66,397 $67,730 $63,578 $24,643 $24,386 
Allowance for Loan Losses$130,648 $126,726 $121,119 $99,454 $80,284 
Quarterly Net Charge-offs560 6,937 230 582 787 
NPAs / Actual Assets %0.47 %0.48 %0.42 %0.19 %0.20 %
NPAs & 90 Day / Actual Assets %0.47 %0.49 %0.46 %0.19 %0.20 %
NPAs / Actual Loans and OREO %0.71 %0.72 %0.63 %0.28 %0.29 %
Allowance for Loan Losses / Actual Loans (%)1.41 %1.37 %1.30 %1.15 %0.95 %
Net Charge-offs as % of Average Loans (Annualized)0.02 %0.30 %0.01 %0.03 %0.04 %



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)December 31,September 30,June 30,March 31,December 31,
20202020202020202019
ASSETS
Cash and cash equivalents$192,896 $164,632 $229,759 $127,731 $177,201 
Interest-bearing deposits392,305 273,936 380,021 132,944 118,263 
Investment securities3,146,787 2,933,286 2,789,379 2,697,954 2,596,063 
Loans held for sale3,966 3,183 901 5,039 9,037 
Loans9,243,174 9,243,833 9,298,541 8,606,849 8,459,310 
Less: Allowance for loan losses(130,648)(126,726)(121,119)(99,454)(80,284)
Net loans9,112,526 9,117,107 9,177,422 8,507,395 8,379,026 
Premises and equipment111,062 112,959 112,548 114,045 113,055 
Federal Home Loan Bank stock28,736 28,736 28,736 28,736 28,736 
Interest receivable53,948 52,992 57,063 47,489 48,901 
Goodwill and other intangibles572,893 574,369 575,855 577,366 578,880 
Cash surrender value of life insurance292,745 291,543 290,715 289,574 288,206 
Other real estate owned940 6,942 7,367 7,972 7,527 
Tax asset, deferred and receivable12,340 21,762 13,126 9,497 12,165 
Other assets146,066 155,903 156,486 147,776 100,194 
TOTAL ASSETS$14,067,210 $13,737,350 $13,819,378 $12,693,518 $12,457,254 
LIABILITIES
Deposits:
Noninterest-bearing$2,298,138 $2,187,607 $2,260,351 $1,688,205 $1,736,396 
Interest-bearing9,063,472 8,718,546 8,705,637 8,182,279 8,103,560 
Total Deposits11,361,610 10,906,153 10,965,988 9,870,484 9,839,956 
Borrowings:
Federal funds purchased— 80,000 — 47,000 55,000 
Securities sold under repurchase agreements177,102 187,732 181,150 183,317 187,946 
Federal Home Loan Bank advances389,430 399,522 400,817 480,995 351,072 
Subordinated debentures and other borrowings118,380 118,320 285,197 128,741 138,685 
Total Borrowings684,912 785,574 867,164 840,053 732,703 
Interest payable3,287 5,038 5,587 7,746 6,754 
Other liabilities141,756 206,929 171,544 197,275 91,404 
Total Liabilities12,191,565 11,903,694 12,010,283 10,915,558 10,670,817 
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 outstanding6,740 6,736 6,724 6,719 6,921 
Additional paid-in capital1,005,366 1,003,777 1,002,962 1,000,942 1,054,997 
Retained earnings788,578 757,550 735,439 716,518 696,520 
Accumulated other comprehensive income74,836 65,468 63,845 53,656 27,874 
Total Stockholders' Equity1,875,645 1,833,656 1,809,095 1,777,960 1,786,437 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$14,067,210 $13,737,350 $13,819,378 $12,693,518 $12,457,254 







CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)December 31,September 30,June 30,March 31,December 31,
20202020202020202019
INTEREST INCOME
Loans receivable:
Taxable$90,138 $84,162 $87,312 $96,652 $102,617 
Tax-exempt5,414 5,395 5,359 5,315 4,671 
Investment securities:
Taxable5,263 5,399 6,147 7,631 7,993 
Tax-exempt12,056 10,931 10,019 9,335 8,995 
Deposits with financial institutions139 90 134 575 1,203 
Federal Home Loan Bank stock214 248 281 299 342 
Total Interest Income113,224 106,225 109,252 119,807 125,821 
INTEREST EXPENSE
Deposits7,509 9,776 12,707 21,748 24,074 
Federal funds purchased2 5 2 111 26 
Securities sold under repurchase agreements77 83 92 352 367 
Federal Home Loan Bank advances1,656 1,749 1,794 1,774 1,776 
Subordinated debentures and other borrowings1,669 1,691 1,639 1,945 1,994 
Total Interest Expense10,913 13,304 16,234 25,930 28,237 
NET INTEREST INCOME102,311 92,921 93,018 93,877 97,584 
Provision for loan losses4,482 12,544 21,895 19,752 500 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES97,829 80,377 71,123 74,125 97,084 
OTHER INCOME
Service charges on deposit accounts5,508 5,209 4,312 5,970 6,312 
Fiduciary and wealth management fees6,251 5,910 5,601 5,985 5,384 
Card payment fees3,502 3,996 6,097 5,907 5,430 
Net gains and fees on sales of loans5,393 5,841 3,674 3,363 2,633 
Derivative hedge fees2,281 1,715 1,042 1,939 1,405 
Other customer fees394 372 333 398 434 
Earnings on cash surrender value of life insurance1,283 1,171 1,326 1,360 1,458 
Net realized gains on sales of available for sale securities2,398 1,817 3,068 4,612 1,039 
Other income473 132 1,028 265 150 
Total Other Income27,483 26,163 26,481 29,799 24,245 
OTHER EXPENSES
Salaries and employee benefits41,809 39,187 35,698 39,243 39,358 
Net occupancy9,653 5,855 5,447 5,801 5,311 
Equipment5,555 4,956 4,489 4,344 4,429 
Marketing1,763 1,311 2,092 1,443 1,492 
Outside data processing fees3,839 3,776 2,618 4,199 4,428 
Printing and office supplies307 331 279 387 484 
Intangible asset amortization1,476 1,486 1,511 1,514 1,590 
FDIC assessments1,560 1,249 1,472 1,523 — 
Other real estate owned and foreclosure expenses(1,576)717 684 505 66 
Professional and other outside services2,836 2,254 1,553 2,258 2,899 
Other expenses5,314 3,587 4,146 4,954 5,144 
Total Other Expenses72,536 64,709 59,989 66,171 65,201 
INCOME BEFORE INCOME TAX52,776 41,831 37,615 37,753 56,128 
Income tax expense7,641 5,621 4,623 3,490 8,298 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$45,135 $36,210 $32,992 $34,263 $47,830 
Per Share Data:
Basic Net Income Available to Common Stockholders$0.83 $0.67 $0.62 $0.63 $0.87 
Diluted Net Income Available to Common Stockholders$0.83 $0.67 $0.62 $0.62 $0.87 
Cash Dividends Paid$0.26 $0.26 $0.26 $0.26 $0.26 
Average Diluted Shares Outstanding (in thousands)54,050 53,971 53,943 54,918 55,520 
FINANCIAL RATIOS:
Return on Average Assets1.29 %1.06 %0.97 %1.09 %1.53 %
Return on Average Stockholders' Equity9.72 7.91 7.35 7.55 10.82 
Return on Average Common Stockholders' Equity9.72 7.91 7.35 7.55 10.82 
Average Earning Assets to Average Assets90.66 90.34 89.25 89.81 89.71 
Allowance for Loan Losses as % of Total Loans1.41 1.37 1.30 1.15 0.95 
Net Charge-offs as % of Average Loans (Annualized)0.02 0.30 0.01 0.03 0.04 
Average Stockholders' Equity to Average Assets13.29 13.41 13.15 14.45 14.17 
Tax Equivalent Yield on Average Earning Assets3.72 3.58 3.72 4.38 4.63 
Interest Expense/Average Earning Assets0.34 0.43 0.53 0.92 1.01 
Net Interest Margin (FTE) on Average Earning Assets3.38 3.15 3.19 3.46 3.62 
Efficiency Ratio55.01 51.40 47.95 52.17 51.07 
Tangible Common Book Value Per Share$24.27 $23.48 $23.04 $22.46 $21.94 



LOANS
(Dollars In Thousands)December 31,September 30,June 30,March 31,December 31,
20202020202020202019
Commercial and industrial loans$2,776,699 $2,875,331 $2,898,329 $2,199,226 $2,109,879 
Agricultural land, production and other loans to farmers281,884 301,192 316,815 315,950 334,172 
Real estate loans:
Construction484,723 622,084 640,560 643,674 787,568 
Commercial real estate, non-owner occupied2,220,949 2,098,589 2,097,767 2,118,148 1,902,692 
Commercial real estate, owner occupied958,501 931,815 919,254 921,491 909,695 
Residential1,234,741 1,146,406 1,145,187 1,121,556 1,143,217 
Home equity508,259 527,458 532,314 570,398 588,984 
Individuals' loans for household and other personal expenditures129,479 125,411 123,611 129,765 135,989 
Public finance and other commercial loans647,939 615,547 624,704 586,641 547,114 
Loans9,243,174 9,243,833 9,298,541 8,606,849 8,459,310 
Allowance for loan losses(130,648)(126,726)(121,119)(99,454)(80,284)
NET LOANS$9,112,526 $9,117,107 $9,177,422 $8,507,395 $8,379,026 

DEPOSITS
(Dollars In Thousands)December 31,September 30,June 30,March 31,December 31,
20202020202020202019
Demand deposits$6,821,152 $6,279,554 $6,288,360 $5,293,200 $5,250,568 
Savings deposits3,661,713 3,518,286 3,278,156 2,962,821 2,896,177 
Certificates and other time deposits of $100,000 or more346,194 467,610 607,474 694,062 736,843 
Other certificates and time deposits459,168 542,919 669,119 717,723 741,759 
Brokered deposits73,383 97,784 122,879 202,678 214,609 
TOTAL DEPOSITS$11,361,610 $10,906,153 $10,965,988 $9,870,484 $9,839,956 




CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
For the Three Months Ended
December 31, 2020December 31, 2019
Average BalanceInterest
 Income /
Expense		Average
Rate		Average BalanceInterest
 Income /
Expense		Average
Rate
Assets: 
Interest-bearing deposits$437,766 $139 0.13 %$291,616 $1,203 1.65 %
Federal Home Loan Bank stock28,736 214 2.98 28,736 342 4.76 
Investment Securities: (1)
 
Taxable1,222,916 5,263 1.72 1,339,068 7,993 2.39 
Tax-Exempt (2)
1,734,081 15,261 3.52 1,176,851 11,386 3.87 
Total Investment Securities2,956,997 20,524 2.78 2,515,919 19,379 3.08 
Loans held for sale19,103 200 4.19 23,712 267 4.50 
Loans: (3)
Commercial6,925,491 73,530 4.25 6,111,179 81,374 5.33 
Real Estate Mortgage911,042 9,482 4.16 916,247 11,256 4.91 
Installment698,619 6,925 3.96 747,166 9,720 5.20 
Tax-Exempt (2)
686,049 6,854 4.00 560,379 5,913 4.22 
Total Loans9,240,304 96,991 4.20 8,358,683 108,530 5.19 
Total Earning Assets12,663,803 117,868 3.72 %11,194,954 129,454 4.63 %
Net unrealized gain (loss) on securities available for sale62,666 31,979 
Allowance for loan losses(130,317)(80,491)
Cash and cash equivalents169,358 179,582 
Premises and equipment114,013 113,333 
Other assets1,088,524 1,039,682 
Total Assets$13,968,047 $12,479,039  
Liabilities:  
Interest-bearing deposits:  
Interest-bearing deposits$4,393,991 $3,888 0.35 %$3,513,297 $9,077 1.03 %
Money market deposits2,051,985 1,164 0.23 1,529,156 4,054 1.06 
Savings deposits1,613,886 634 0.16 1,406,548 2,149 0.61 
Certificates and other time deposits961,187 1,823 0.76 1,736,058 8,794 2.03 
Total Interest-bearing Deposits9,021,049 7,509 0.33 8,185,059 24,074 1.18 
Borrowings683,068 3,404 1.99 669,756 4,163 2.49 
Total Interest-bearing Liabilities9,704,117 10,913 0.45 8,854,815 28,237 1.28 
Noninterest-bearing deposits2,261,991 1,741,735  
Other liabilities145,043 113,641  
Total Liabilities12,111,151 10,710,191  
Stockholders' Equity1,856,896 1,768,848  
Total Liabilities and Stockholders' Equity$13,968,047 10,913 $12,479,039 28,237 
Net Interest Income (FTE)$106,955  $101,217 
Net Interest Spread (FTE) (4)
3.27 %  3.35 %
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets3.72 %4.63 %
Interest Expense / Average Earning Assets0.34 %1.01 %
Net Interest Margin (FTE) (5)
3.38 %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 $4,644 and $3,633 for the three months ended December 31, 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 Twelve Months Ended
December 31, 2020December 31, 2019
Average BalanceInterest
 Income /
Expense		Average
Rate		Average BalanceInterest
 Income /
Expense		Average
Rate
Assets:
Federal Funds Sold
Interest-bearing deposits$319,686 $938 0.29 %$211,683 $4,225 2.00 %
Federal Home Loan Bank stock28,736 1,042 3.63 25,645 1,370 5.34 
Investment Securities: (1)
Taxable1,282,827 24,440 1.91 1,101,247 27,815 2.53 
Tax-Exempt (2)
1,440,913 53,596 3.72 987,006 40,070 4.06 
Total Investment Securities2,723,740 78,036 2.87 2,088,253 67,885 3.25 
Loans held for sale18,559 781 4.21 18,402 780 4.24 
Loans: (3)
Commercial6,755,215 286,773 4.25 5,631,146 306,139 5.44 
Real Estate Mortgage889,083 40,002 4.50 811,188 37,782 4.66 
Installment718,815 30,708 4.27 701,459 38,071 5.43 
Tax-Exempt (2)
669,483 27,194 4.06 527,995 22,238 4.21 
Total Loans9,051,155 385,458 4.26 7,690,190 405,010 5.27 
Total Earning Assets12,123,317 465,474 3.84 %10,015,771 478,490 4.78 %
Net unrealized gain on securities available for sale59,639 17,676 
Allowance for loan losses(110,963)(81,000)
Cash and cash equivalents200,366 142,857 
Premises and equipment113,642 99,343 
Other assets1,080,268 896,673 
Total Assets$13,466,269 $11,091,320 
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits$4,009,566 $20,239 0.50 %$3,070,861 $33,921 1.10 %
Money market deposits1,769,478 7,810 0.44 1,300,064 14,111 1.09 
Savings deposits1,534,069 3,641 0.24 1,242,468 9,464 0.76 
Certificates and other time deposits1,346,967 20,050 1.49 1,673,292 34,089 2.04 
Total Interest-bearing Deposits8,660,080 51,740 0.60 7,286,685 91,585 1.26 
Borrowings768,238 14,641 1.91 644,729 17,160 2.66 
Total Interest-bearing Liabilities9,428,318 66,381 0.70 7,931,414 108,745 1.37 
Noninterest-bearing deposits2,068,026 1,495,949 
Other liabilities144,790 94,342 
Total Liabilities11,641,134 9,521,705 
Stockholders' Equity1,825,135 1,569,615 
Total Liabilities and Stockholders' Equity$13,466,269 66,381 $11,091,320 108,745 
Net Interest Income (FTE)$399,093 $369,745 
Net Interest Spread (FTE) (4)
3.14 %3.41 %
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets3.84 %4.78 %
Interest Expense / Average Earning Assets0.55 %1.09 %
Net Interest Margin (FTE) (5)
3.29 %3.69 %
(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 $16,966 and $13,085 for the twelve months ended December 31, 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.