FIRST MERCHANTS CORP - FORM 8-K - EX-99.1

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8-K - 8-K - FIRST MERCHANTS CORP	frme-20210128.htm

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,
	2020		2019
ASSETS
Cash and cash equivalents	$	192,896	$	177,201
Interest-bearing deposits	392,305		118,263
Investment securities	3,146,787		2,596,063
Loans held for sale	3,966		9,037
Loans	9,243,174		8,459,310
Less: Allowance for loan losses	(130,648)		(80,284)
Net loans	9,112,526		8,379,026
Premises and equipment	111,062		113,055
Federal Home Loan Bank stock	28,736		28,736
Interest receivable	53,948		48,901
Goodwill and other intangibles	572,893		578,880
Cash surrender value of life insurance	292,745		288,206
Other real estate owned	940		7,527
Tax asset, deferred and receivable	12,340		12,165
Other assets	146,066		100,194
TOTAL ASSETS	$	14,067,210	$	12,457,254
LIABILITIES
Deposits:
Noninterest-bearing	$	2,298,138	$	1,736,396
Interest-bearing	9,063,472		8,103,560
Total Deposits	11,361,610		9,839,956
Borrowings:
Federal funds purchased	—		55,000
Securities sold under repurchase agreements	177,102		187,946
Federal Home Loan Bank advances	389,430		351,072
Subordinated debentures and other borrowings	118,380		138,685
Total Borrowings	684,912		732,703
Interest payable	3,287		6,754
Other liabilities	141,756		91,404
Total Liabilities	12,191,565		10,670,817
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares	125		125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 53,922,359 and 55,368,482 shares	6,740		6,921
Additional paid-in capital	1,005,366		1,054,997
Retained earnings	788,578		696,520
Accumulated other comprehensive income	74,836		27,874
Total Stockholders' Equity	1,875,645		1,786,437
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,067,210	$	12,457,254


CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts)	December 31,				December 31,
	2020		2019		2020		2019
INTEREST INCOME
Loans receivable:
Taxable	$	90,138	$	102,617	$	358,264	$	382,772
Tax-exempt	5,414		4,671		21,483		17,568
Investment securities:
Taxable	5,263		7,993		24,440		27,815
Tax-exempt	12,056		8,995		42,341		31,655

Deposits with financial institutions	139		1,203		938		4,225
Federal Home Loan Bank stock	214		342		1,042		1,370
Total Interest Income	113,224		125,821		448,508		465,405
INTEREST EXPENSE
Deposits	7,509		24,074		51,740		91,585
Federal funds purchased	2		26		120		251
Securities sold under repurchase agreements	77		367		604		1,424
Federal Home Loan Bank advances	1,656		1,776		6,973		7,176
Subordinated debentures and other borrowings	1,669		1,994		6,944		8,309
Total Interest Expense	10,913		28,237		66,381		108,745
NET INTEREST INCOME	102,311		97,584		382,127		356,660
Provision for loan losses	4,482		500		58,673		2,800
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	97,829		97,084		323,454		353,860
OTHER INCOME
Service charges on deposit accounts	5,508		6,312		20,999		22,951
Fiduciary and wealth management fees	6,251		5,384		23,747		17,562
Card payment fees	3,502		5,430		19,502		20,243
Net gains and fees on sales of loans	5,393		2,633		18,271		7,891
Derivative hedge fees	2,281		1,405		6,977		5,357
Other customer fees	394		434		1,497		1,664
Earnings on cash surrender value of life insurance	1,283		1,458		5,140		4,537
Net realized gains on sales of available for sale securities	2,398		1,039		11,895		4,415
Other income	473		150		1,898		2,068
Total Other Income	27,483		24,245		109,926		86,688
OTHER EXPENSES
Salaries and employee benefits	41,809		39,358		155,937		144,037
Net occupancy	9,653		5,311		26,756		19,584
Equipment	5,555		4,429		19,344		16,218
Marketing	1,763		1,492		6,609		6,650
Outside data processing fees	3,839		4,428		14,432		16,476
Printing and office supplies	307		484		1,304		1,445
Intangible asset amortization	1,476		1,590		5,987		5,994
FDIC assessments	1,560		—		5,804		717
Other real estate owned and foreclosure expenses	(1,576)		66		330		2,428
Professional and other outside services	2,836		2,899		8,901		15,410
Other expenses	5,314		5,144		18,001		17,804
Total Other Expenses	72,536		65,201		263,405		246,763
INCOME BEFORE INCOME TAX	52,776		56,128		169,975		193,785
Income tax expense	7,641		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 Ended						Twelve Months Ended
	December 31,						December 31,
	2020			2019			2020			2019
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 Loans	9,240,304			8,358,683			9,051,155			7,690,190
Total Earning Assets	12,663,803			11,194,954			12,123,317			10,015,771
Total Deposits	11,283,040			9,926,794			10,728,106			8,782,634
Total Stockholders' Equity	1,856,896			1,768,848			1,825,135			1,569,615

FINANCIAL RATIOS:
Return on Average Assets	1.29		%	1.53		%	1.10		%	1.48		%
Return on Average Stockholders' Equity	9.72			10.82			8.14			10.48
Return on Average Common Stockholders' Equity	9.72			10.82			8.14			10.48
Average Earning Assets to Average Assets	90.66			89.71			90.03			90.30
Allowance for Loan Losses as % of Total Loans	1.41			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 Assets	13.29			14.17			13.55			14.15
Tax Equivalent Yield on Average Earning Assets	3.72			4.63			3.84			4.78
Interest Expense/Average Earning Assets	0.34			1.01			0.55			1.09
Net Interest Margin (FTE) on Average Earning Assets	3.38			3.62			3.29			3.69
Efficiency Ratio	55.01			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,
	2020			2020			2020			2020			2019
Non-Accrual Loans	$	61,471		$	56,739		$	50,102		$	15,649		$	15,949
Renegotiated Loans	3,240			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 Repossessions	940			6,984			7,409			8,017			7,527
Non-Performing Assets (NPA)	65,651			66,400			58,597			24,331			24,317
90+ Days Delinquent	746			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-offs	560			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,
	2020		2020		2020		2020		2019
ASSETS
Cash and cash equivalents	$	192,896	$	164,632	$	229,759	$	127,731	$	177,201
Interest-bearing deposits	392,305		273,936		380,021		132,944		118,263
Investment securities	3,146,787		2,933,286		2,789,379		2,697,954		2,596,063
Loans held for sale	3,966		3,183		901		5,039		9,037
Loans	9,243,174		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 loans	9,112,526		9,117,107		9,177,422		8,507,395		8,379,026
Premises and equipment	111,062		112,959		112,548		114,045		113,055
Federal Home Loan Bank stock	28,736		28,736		28,736		28,736		28,736
Interest receivable	53,948		52,992		57,063		47,489		48,901
Goodwill and other intangibles	572,893		574,369		575,855		577,366		578,880
Cash surrender value of life insurance	292,745		291,543		290,715		289,574		288,206
Other real estate owned	940		6,942		7,367		7,972		7,527
Tax asset, deferred and receivable	12,340		21,762		13,126		9,497		12,165
Other assets	146,066		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-bearing	9,063,472		8,718,546		8,705,637		8,182,279		8,103,560
Total Deposits	11,361,610		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 agreements	177,102		187,732		181,150		183,317		187,946
Federal Home Loan Bank advances	389,430		399,522		400,817		480,995		351,072
Subordinated debentures and other borrowings	118,380		118,320		285,197		128,741		138,685
Total Borrowings	684,912		785,574		867,164		840,053		732,703
Interest payable	3,287		5,038		5,587		7,746		6,754
Other liabilities	141,756		206,929		171,544		197,275		91,404
Total Liabilities	12,191,565		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 outstanding	125		125		125		125		125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	6,740		6,736		6,724		6,719		6,921
Additional paid-in capital	1,005,366		1,003,777		1,002,962		1,000,942		1,054,997
Retained earnings	788,578		757,550		735,439		716,518		696,520
Accumulated other comprehensive income	74,836		65,468		63,845		53,656		27,874
Total Stockholders' Equity	1,875,645		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,
	2020			2020			2020			2020			2019
INTEREST INCOME
Loans receivable:
Taxable	$	90,138		$	84,162		$	87,312		$	96,652		$	102,617
Tax-exempt	5,414			5,395			5,359			5,315			4,671
Investment securities:
Taxable	5,263			5,399			6,147			7,631			7,993
Tax-exempt	12,056			10,931			10,019			9,335			8,995

Deposits with financial institutions	139			90			134			575			1,203
Federal Home Loan Bank stock	214			248			281			299			342
Total Interest Income	113,224			106,225			109,252			119,807			125,821
INTEREST EXPENSE
Deposits	7,509			9,776			12,707			21,748			24,074
Federal funds purchased	2			5			2			111			26
Securities sold under repurchase agreements	77			83			92			352			367
Federal Home Loan Bank advances	1,656			1,749			1,794			1,774			1,776
Subordinated debentures and other borrowings	1,669			1,691			1,639			1,945			1,994
Total Interest Expense	10,913			13,304			16,234			25,930			28,237
NET INTEREST INCOME	102,311			92,921			93,018			93,877			97,584
Provision for loan losses	4,482			12,544			21,895			19,752			500
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	97,829			80,377			71,123			74,125			97,084
OTHER INCOME
Service charges on deposit accounts	5,508			5,209			4,312			5,970			6,312
Fiduciary and wealth management fees	6,251			5,910			5,601			5,985			5,384
Card payment fees	3,502			3,996			6,097			5,907			5,430
Net gains and fees on sales of loans	5,393			5,841			3,674			3,363			2,633
Derivative hedge fees	2,281			1,715			1,042			1,939			1,405
Other customer fees	394			372			333			398			434
Earnings on cash surrender value of life insurance	1,283			1,171			1,326			1,360			1,458
Net realized gains on sales of available for sale securities	2,398			1,817			3,068			4,612			1,039
Other income	473			132			1,028			265			150
Total Other Income	27,483			26,163			26,481			29,799			24,245
OTHER EXPENSES
Salaries and employee benefits	41,809			39,187			35,698			39,243			39,358
Net occupancy	9,653			5,855			5,447			5,801			5,311
Equipment	5,555			4,956			4,489			4,344			4,429
Marketing	1,763			1,311			2,092			1,443			1,492
Outside data processing fees	3,839			3,776			2,618			4,199			4,428
Printing and office supplies	307			331			279			387			484
Intangible asset amortization	1,476			1,486			1,511			1,514			1,590
FDIC assessments	1,560			1,249			1,472			1,523			—
Other real estate owned and foreclosure expenses	(1,576)			717			684			505			66
Professional and other outside services	2,836			2,254			1,553			2,258			2,899
Other expenses	5,314			3,587			4,146			4,954			5,144
Total Other Expenses	72,536			64,709			59,989			66,171			65,201
INCOME BEFORE INCOME TAX	52,776			41,831			37,615			37,753			56,128
Income tax expense	7,641			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 Assets	1.29		%	1.06		%	0.97		%	1.09		%	1.53		%
Return on Average Stockholders' Equity	9.72			7.91			7.35			7.55			10.82
Return on Average Common Stockholders' Equity	9.72			7.91			7.35			7.55			10.82
Average Earning Assets to Average Assets	90.66			90.34			89.25			89.81			89.71
Allowance for Loan Losses as % of Total 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
Average Stockholders' Equity to Average Assets	13.29			13.41			13.15			14.45			14.17
Tax Equivalent Yield on Average Earning Assets	3.72			3.58			3.72			4.38			4.63
Interest Expense/Average Earning Assets	0.34			0.43			0.53			0.92			1.01
Net Interest Margin (FTE) on Average Earning Assets	3.38			3.15			3.19			3.46			3.62
Efficiency Ratio	55.01			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,
	2020		2020		2020		2020		2019
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 farmers	281,884		301,192		316,815		315,950		334,172
Real estate loans:
Construction	484,723		622,084		640,560		643,674		787,568
Commercial real estate, non-owner occupied	2,220,949		2,098,589		2,097,767		2,118,148		1,902,692
Commercial real estate, owner occupied	958,501		931,815		919,254		921,491		909,695
Residential	1,234,741		1,146,406		1,145,187		1,121,556		1,143,217
Home equity	508,259		527,458		532,314		570,398		588,984
Individuals' loans for household and other personal expenditures	129,479		125,411		123,611		129,765		135,989
Public finance and other commercial loans	647,939		615,547		624,704		586,641		547,114
Loans	9,243,174		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,
	2020		2020		2020		2020		2019
Demand deposits	$	6,821,152	$	6,279,554	$	6,288,360	$	5,293,200	$	5,250,568
Savings deposits	3,661,713		3,518,286		3,278,156		2,962,821		2,896,177
Certificates and other time deposits of $100,000 or more	346,194		467,610		607,474		694,062		736,843
Other certificates and time deposits	459,168		542,919		669,119		717,723		741,759
Brokered deposits	73,383		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, 2020						December 31, 2019
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:

Interest-bearing deposits	$	437,766	$	139	0.13	%	$	291,616	$	1,203	1.65	%
Federal Home Loan Bank stock	28,736		214		2.98		28,736		342		4.76
Investment Securities: (1)
Taxable	1,222,916		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 Securities	2,956,997		20,524		2.78		2,515,919		19,379		3.08
Loans held for sale	19,103		200		4.19		23,712		267		4.50
Loans: (3)
Commercial	6,925,491		73,530		4.25		6,111,179		81,374		5.33
Real Estate Mortgage	911,042		9,482		4.16		916,247		11,256		4.91
Installment	698,619		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 Loans	9,240,304		96,991		4.20		8,358,683		108,530		5.19
Total Earning Assets	12,663,803		117,868		3.72	%	11,194,954		129,454		4.63	%
Net unrealized gain (loss) on securities available for sale	62,666						31,979
Allowance for loan losses	(130,317)						(80,491)
Cash and cash equivalents	169,358						179,582
Premises and equipment	114,013						113,333
Other assets	1,088,524						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 deposits	2,051,985		1,164		0.23		1,529,156		4,054		1.06
Savings deposits	1,613,886		634		0.16		1,406,548		2,149		0.61
Certificates and other time deposits	961,187		1,823		0.76		1,736,058		8,794		2.03
Total Interest-bearing Deposits	9,021,049		7,509		0.33		8,185,059		24,074		1.18
Borrowings	683,068		3,404		1.99		669,756		4,163		2.49
Total Interest-bearing Liabilities	9,704,117		10,913		0.45		8,854,815		28,237		1.28
Noninterest-bearing deposits	2,261,991						1,741,735
Other liabilities	145,043						113,641
Total Liabilities	12,111,151						10,710,191
Stockholders' Equity	1,856,896						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 Assets					3.72	%					4.63	%
Interest Expense / Average Earning Assets					0.34	%					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, 2020						December 31, 2019
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest 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 stock	28,736		1,042		3.63		25,645		1,370		5.34
Investment Securities: (1)
Taxable	1,282,827		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 Securities	2,723,740		78,036		2.87		2,088,253		67,885		3.25
Loans held for sale	18,559		781		4.21		18,402		780		4.24
Loans: (3)
Commercial	6,755,215		286,773		4.25		5,631,146		306,139		5.44
Real Estate Mortgage	889,083		40,002		4.50		811,188		37,782		4.66
Installment	718,815		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 Loans	9,051,155		385,458		4.26		7,690,190		405,010		5.27
Total Earning Assets	12,123,317		465,474		3.84	%	10,015,771		478,490		4.78	%
Net unrealized gain on securities available for sale	59,639						17,676
Allowance for loan losses	(110,963)						(81,000)
Cash and cash equivalents	200,366						142,857
Premises and equipment	113,642						99,343
Other assets	1,080,268						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 deposits	1,769,478		7,810		0.44		1,300,064		14,111		1.09
Savings deposits	1,534,069		3,641		0.24		1,242,468		9,464		0.76
Certificates and other time deposits	1,346,967		20,050		1.49		1,673,292		34,089		2.04
Total Interest-bearing Deposits	8,660,080		51,740		0.60		7,286,685		91,585		1.26
Borrowings	768,238		14,641		1.91		644,729		17,160		2.66
Total Interest-bearing Liabilities	9,428,318		66,381		0.70		7,931,414		108,745		1.37
Noninterest-bearing deposits	2,068,026						1,495,949
Other liabilities	144,790						94,342
Total Liabilities	11,641,134						9,521,705
Stockholders' Equity	1,825,135						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 Assets					3.84	%					4.78	%
Interest Expense / Average Earning Assets					0.55	%					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.

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