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First Merchants Corporation Announces Third Quarter 2023 Earnings Per Share
Press Releases

First Merchants Corporation Announces Third Quarter 2023 Earnings Per Share

MUNCIE, Ind., Oct. 26, 2023 (GLOBE NEWSWIRE) — First Merchants Corporation (NASDAQ – FRME)

Third Quarter 2023 Highlights:

  • Net income available to common stockholders was $55.9 million and diluted earnings per common share totaled $0.94, compared to $63.3 million and $1.08 in the third quarter of 2022, and $60.4 million and $1.02 in the second quarter of 2023.
  • Strong capital position with Common Equity Tier 1 Capital Ratio of 11.26 percent.
  • Total loans grew $4.9 million, or 0.2 percent annualized on a linked quarter basis, and $743.6 million, or 6.4 percent during the last twelve months when excluding the impact of non-relationship based commercial loan sales that occurred during the prior quarter of $116.6 million.
  • Total deposits increased $65.4 million, or 1.8 percent annualized on a linked quarter basis, and $211.8 million, or 1.5 percent during the last twelve months.
  • Nonaccrual loans totaled $53.1 million compared to $69.2 million on a linked quarter basis.
  • The efficiency ratio totaled 53.91 percent for the quarter.

Mark Hardwick, Chief Executive Officer, stated, “First Merchants continued to deliver top quartile operating returns while tactically managing the inflationary interest rate environment. Our teams are focused on meeting the demands of our customer base while planning for continued 2024 growth and performance.”

Third Quarter Financial Results:

First Merchants Corporation (the “Corporation”) has reported third quarter 2023 net income available to common stockholders of $55.9 million compared to $63.3 million during the same period in 2022. Diluted earnings per common share for the period totaled $0.94 per share compared to the third quarter of 2022 result of $1.08 per share.

Total assets equaled $18.0 billion as of quarter-end and loans totaled $12.3 billion. During the past twelve months, total loans grew by $743.6 million, or 6.4 percent and were offset by the non-relationship based commercial loan sale of $116.6 million. On a linked quarter basis, loans grew $4.9 million, or 0.2 percent.

Investments, totaling $3.7 billion, decreased $581.0 million, or 13.5 percent, during the last twelve months and decreased $177.8 million, or 18.3 percent annualized on a linked quarter basis. The decline during the quarter was due to $33.2 million of bond sales, $38.2 million of security paydowns and maturities, and the remainder was due to a decline in valuation of available for sale securities.

Total deposits equaled $14.6 billion as of quarter-end and increased by $211.8 million, or 1.5 percent, over the past twelve months. Total deposits increased $65.4 million, or 1.8 percent annualized on a linked quarter basis. During the quarter, commercial and consumer deposits increased $327.8 million which was offset by a reduction in brokered deposits of $133.6 million and municipal deposits of $128.8 million due to seasonality. The loan to deposit ratio declined slightly to 84.0 percent at period end from 84.3 percent in the prior quarter.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $205.8 million as of quarter-end, or 1.67 percent of total loans, a decrease of $15.4 million from prior quarter. Loan charge-offs, net of recoveries, for the quarter totaled $20.4 million primarily due to the charge-off of a previously reported nonaccrual loan to a syndicated specialty finance company resulting from an apparent fraud that impacted our borrower’s ability to repay. Net charge-offs were offset with provision expense for loans recorded during the quarter of $5.0 million. Reserves for unfunded commitments were reduced by $3.0 million during the quarter and now total $20.3 million. Net provision expense for the quarter totaled $2.0 million. Nonperforming assets to total assets were 0.33 percent for the third quarter of 2023, a decrease of 10 basis points compared to 0.43 percent in the prior quarter.

Net interest income, totaling $133.4 million for the quarter, declined $4.5 million, or 3.2 percent, compared to prior quarter and decreased $6.9 million, or 4.9 percent, compared to the third quarter of 2022. Stated net interest margin on a tax equivalent basis totaling 3.29 percent, declined by 10 basis points compared to the second quarter of 2023 and decreased 26 basis points compared to the third quarter of 2022. During the quarter, increased deposit costs and a continued change in deposit mix offset the increase in earning asset yields reducing net interest margin.

Noninterest income, totaling $27.8 million for the quarter, increased $1.5 million, or 5.8 percent, compared to the second quarter of 2023 but decreased $1.8 million from the third quarter of 2022. The increase over second quarter of 2023 was driven primarily by higher gains on the sales of loans.

Noninterest expense totaled $93.9 million for the quarter, an increase of $1.3 million from the second quarter of 2023. The increase was from higher marketing costs and salaries and employee benefits, partially offset by a decline in professional and other outside service fees.

The Corporation’s total risk-based capital ratio equaled 13.66 percent, common equity tier 1 capital ratio equaled 11.26 percent, and the tangible common equity ratio totaled 7.69 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, October 26, 2023.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register.vevent.com/register/BIf859606184ad4e98a66ef43d61469d2c)

In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/t8uajbb8) during the time of the call. A replay of the webcast will be available until October 26, 2024.

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.

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

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 (including the ability to grow and maintain core deposits and retain large, uninsured deposits), 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,
    2023       2022  
ASSETS      
Cash and due from banks $ 125,173     $ 119,532  
Interest-bearing deposits   348,639       179,593  
Investment securities, net of allowance for credit losses of $245,000 and $245,000   3,713,724       4,294,768  
Loans held for sale   30,972       25,394  
Loans   12,271,422       11,650,002  
Less: Allowance for credit losses – loans   (205,782 )     (226,702 )
Net loans   12,065,640       11,423,300  
Premises and equipment   132,441       116,306  
Federal Home Loan Bank stock   41,797       38,056  
Interest receivable   90,011       71,605  
Goodwill and other intangibles   741,283       750,713  
Cash surrender value of life insurance   306,106       306,932  
Other real estate owned   6,480       6,454  
Tax asset, deferred and receivable   135,521       142,110  
Other assets   258,861       244,222  
TOTAL ASSETS $ 17,996,648     $ 17,718,985  
LIABILITIES      
Deposits:      
Noninterest-bearing $ 2,554,984     $ 3,356,651  
Interest-bearing   12,091,592       11,078,174  
Total Deposits   14,646,576       14,434,825  
Borrowings:      
Federal funds purchased         185,000  
Securities sold under repurchase agreements   152,537       194,482  
Federal Home Loan Bank advances   713,384       643,769  
Subordinated debentures and other borrowings   158,665       151,301  
Total Borrowings   1,024,586       1,174,552  
Interest payable   16,473       4,971  
Other liabilities   216,369       197,971  
Total Liabilities   15,904,004       15,812,319  
STOCKHOLDERS’ EQUITY      
Preferred Stock, $1,000 par value, $1,000 liquidation value:      
Authorized — 600 cumulative shares      
Issued and outstanding – 125 cumulative shares   125       125  
Preferred Stock, Series A, no par value, $2,500 liquidation preference:      
Authorized — 10,000 non-cumulative perpetual shares      
Issued and outstanding – 10,000 non-cumulative perpetual shares   25,000       25,000  
Common Stock, $.125 stated value:      
Authorized — 100,000,000 shares      
Issued and outstanding – 59,398,022 and 59,145,414 shares   7,425       7,393  
Additional paid-in capital   1,234,402       1,226,695  
Retained earnings   1,132,962       961,542  
Accumulated other comprehensive loss   (307,270 )     (314,089 )
Total Stockholders’ Equity   2,092,644       1,906,666  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 17,996,648     $ 17,718,985  

CONSOLIDATED STATEMENTS OF INCOME Three Months Ended   Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts) September 30,   September 30,
    2023       2022       2023       2022  
INTEREST INCOME              
Loans receivable:              
Taxable $ 191,705     $ 128,504     $ 550,314     $ 314,366  
Tax-exempt   8,288       6,500       23,757       18,194  
Investment securities:              
Taxable   8,590       10,055       26,563       28,937  
Tax-exempt   13,947       17,261       44,296       50,348  
Deposits with financial institutions   5,884       704       9,685       1,544  
Federal Home Loan Bank stock   719       314       2,281       635  
Total Interest Income   229,133       163,338       656,896       414,024  
INTEREST EXPENSE              
Deposits   85,551       16,644       209,437       29,423  
Federal funds purchased         418       1,420       494  
Securities sold under repurchase agreements   797       372       2,624       595  
Federal Home Loan Bank advances   6,896       3,493       20,775       6,485  
Subordinated debentures and other borrowings   2,506       2,105       7,303       5,780  
Total Interest Expense   95,750       23,032       241,559       42,777  
NET INTEREST INCOME   133,383       140,306       415,337       371,247  
Provision for credit losses   2,000             2,000       16,755  
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES   131,383       140,306       413,337       354,492  
NONINTEREST INCOME              
Service charges on deposit accounts   7,975       7,165       23,147       21,274  
Fiduciary and wealth management fees   7,394       7,221       22,653       22,187  
Card payment fees   4,716       4,776       14,425       15,674  
Net gains and fees on sales of loans   5,517       2,543       11,548       7,968  
Derivative hedge fees   516       700       2,336       3,062  
Other customer fees   384       501       1,643       1,573  
Earnings on cash surrender value of life insurance   1,761       6,655       5,145       9,659  
Net realized gains (losses) on sales of available for sale securities   (1,650 )     481       (4,613 )     1,137  
Other income (loss)   1,229       (425 )     2,874       1,257  
Total Noninterest Income   27,842       29,617       79,158       83,791  
NONINTEREST EXPENSES              
Salaries and employee benefits   55,566       56,002       167,778       154,562  
Net occupancy   6,837       6,738       20,770       19,573  
Equipment   5,698       5,997       18,005       17,797  
Marketing   2,369       2,401       4,780       4,551  
Outside data processing fees   6,573       6,827       19,290       16,071  
Printing and office supplies   333       472       1,150       1,198  
Intangible asset amortization   2,182       2,303       6,561       5,972  
FDIC assessments   2,981       2,824       7,117       7,940  
Other real estate owned and foreclosure expenses   677       328       1,575       626  
Professional and other outside services   3,833       4,461       12,191       17,681  
Other expenses   6,805       8,025       20,950       20,045  
Total Noninterest Expenses   93,854       96,378       280,167       266,016  
INCOME BEFORE INCOME TAX   65,371       73,545       212,328       172,267  
Income tax expense   9,005       9,793       31,021       20,938  
NET INCOME   56,366       63,752       181,307       151,329  
Preferred stock dividends   468       469       1,406       938  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 55,898     $ 63,283     $ 179,901     $ 150,391  
Per Share Data:              
Basic Net Income Available to Common Stockholders $ 0.95     $ 1.08     $ 3.04     $ 2.63  
Diluted Net Income Available to Common Stockholders $ 0.94     $ 1.08     $ 3.03     $ 2.62  
Cash Dividends Paid to Common Stockholders $ 0.34     $ 0.32     $ 1.00     $ 0.93  
Average Diluted Common Shares Outstanding (in thousands)   59,503       59,339       59,465       57,468  

FINANCIAL HIGHLIGHTS              
(Dollars in thousands) Three Months Ended   Nine Months Ended
  September 30,   September 30,
    2023       2022       2023       2022  
NET CHARGE-OFFS (RECOVERIES) $ 20,365     $ (427 )   $ 22,495     $ (751 )
               
AVERAGE BALANCES:              
Total Assets $ 18,152,239     $ 17,770,623     $ 18,115,504     $ 17,012,930  
Total Loans   12,287,632       11,488,203       12,264,787       10,647,950  
Total Earning Assets   16,947,669       16,508,914       16,913,965       15,744,040  
Total Deposits   14,735,592       14,577,532       14,627,448       14,074,696  
Total Stockholders’ Equity   2,154,232       2,018,156       2,126,005       1,977,299  
               
FINANCIAL RATIOS:              
Return on Average Assets   1.24 %     1.43 %     1.33 %     1.19 %
Return on Average Stockholders’ Equity   10.38       12.54       11.28       10.14  
Return on Tangible Common Stockholders’ Equity   16.54       20.85       18.10       16.22  
Average Earning Assets to Average Assets   93.36       92.90       93.37       92.54  
Allowance for Credit Losses – Loans as % of Total Loans   1.67       1.94       1.67       1.94  
Net Charge-offs as % of Average Loans (Annualized)   0.66       (0.01 )     0.24       (0.01 )
Average Stockholders’ Equity to Average Assets   11.87       11.36       11.74       11.62  
Tax Equivalent Yield on Average Earning Assets   5.55       4.11       5.32       3.66  
Interest Expense/Average Earning Assets   2.26       0.56       1.90       0.36  
Net Interest Margin (FTE) on Average Earning Assets   3.29       3.55       3.42       3.30  
Efficiency Ratio   53.91       53.34       52.60       54.95  
Tangible Common Book Value Per Share $ 22.43     $ 19.26     $ 22.43     $ 19.26  

NONPERFORMING ASSETS                  
(Dollars In Thousands) September 30,   June 30,   March 31,   December 31,   September 30,
    2023       2023       2023       2022       2022  
Nonaccrual Loans $ 53,102     $ 69,240     $ 46,576     $ 42,324     $ 43,508  
Troubled Debt Restructures (TDR)                     224       195  
Nonperforming Loans (NPL)   53,102       69,240       46,576       42,548       43,703  
Other Real Estate Owned and Repossessions   6,480       7,685       7,777       6,431       6,454  
Nonperforming Assets (NPA)   59,582       76,925       54,353       48,979       50,157  
90+ Days Delinquent   89       428       7,032       1,737       764  
NPAs & 90 Day Delinquent $ 59,671     $ 77,353     $ 61,385     $ 50,716     $ 50,921  
                   
Allowance for Credit Losses – Loans $ 205,782     $ 221,147     $ 223,052     $ 223,277     $ 226,702  
Quarterly Net Charge-offs (Recoveries)   20,365       1,905       225       2,674       (427 )
NPAs / Actual Assets %   0.33 %     0.43 %     0.30 %     0.27 %     0.28 %
NPAs & 90 Day / Actual Assets %   0.33 %     0.43 %     0.34 %     0.28 %     0.29 %
NPAs / Actual Loans and OREO %   0.48 %     0.63 %     0.44 %     0.41 %     0.43 %
Allowance for Credit Losses – Loans / Actual Loans (%)   1.67 %     1.80 %     1.82 %     1.86 %     1.94 %
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)   0.66 %     0.06 %     0.01 %     0.12 %     (0.01) %

CONSOLIDATED BALANCE SHEETS                  
(Dollars In Thousands) September 30,   June 30,   March 31,   December 31,   September 30,
    2023       2023       2023       2022       2022  
ASSETS                  
Cash and due from banks $ 125,173     $ 108,975     $ 125,818     $ 122,594     $ 119,532  
Interest-bearing deposits   348,639       219,480       352,695       126,061       179,593  
Investment securities, net of allowance for credit losses   3,713,724       3,891,491       4,057,389       4,263,788       4,294,768  
Loans held for sale   30,972       27,297       9,408       9,094       25,394  
Loans   12,271,422       12,270,233       12,241,461       12,003,894       11,650,002  
Less: Allowance for credit losses – loans   (205,782 )     (221,147 )     (223,052 )     (223,277 )     (226,702 )
Net loans   12,065,640       12,049,086       12,018,409       11,780,617       11,423,300  
Premises and equipment   132,441       114,402       115,857       117,118       116,306  
Federal Home Loan Bank stock   41,797       41,842       41,878       38,525       38,056  
Interest receivable   90,011       89,784       85,515       85,070       71,605  
Goodwill and other intangibles   741,283       743,465       745,647       747,844       750,713  
Cash surrender value of life insurance   306,106       307,020       309,090       308,311       306,932  
Other real estate owned   6,480       7,685       7,777       6,431       6,454  
Tax asset, deferred and receivable   135,521       113,724       103,070       111,222       142,110  
Other assets   258,861       254,161       206,355       221,631       244,222  
TOTAL ASSETS $ 17,996,648     $ 17,968,412     $ 18,178,908     $ 17,938,306     $ 17,718,985  
LIABILITIES                  
Deposits:                  
Noninterest-bearing $ 2,554,984     $ 2,636,017     $ 2,964,355     $ 3,173,417     $ 3,356,651  
Interest-bearing   12,091,592       11,945,138       11,738,932       11,209,328       11,078,174  
Total Deposits   14,646,576       14,581,155       14,703,287       14,382,745       14,434,825  
Borrowings:                  
Federal funds purchased               20       171,560       185,000  
Securities sold under repurchase agreements   152,537       152,472       179,067       167,413       194,482  
Federal Home Loan Bank advances   713,384       723,480       823,577       823,674       643,769  
Subordinated debentures and other borrowings   158,665       151,325       151,312       151,298       151,301  
Total Borrowings   1,024,586       1,027,277       1,153,976       1,313,945       1,174,552  
Interest payable   16,473       13,595       11,979       7,530       4,971  
Other liabilities   216,369       200,820       187,218       199,316       197,971  
Total Liabilities   15,904,004       15,822,847       16,056,460       15,903,536       15,812,319  
STOCKHOLDERS’ EQUITY                  
Preferred Stock, $1,000 par value, $1,000 liquidation value:                  
Authorized — 600 cumulative shares                  
Issued and outstanding – 125 cumulative shares   125       125       125       125       125  
Preferred Stock, Series A, no par value, $2,500 liquidation preference:                  
Authorized — 10,000 non-cumulative perpetual shares                  
Issued and outstanding – 10,000 non-cumulative perpetual shares   25,000       25,000       25,000       25,000       25,000  
Common Stock, $.125 stated value:                  
Authorized — 100,000,000 shares                  
Issued and outstanding   7,425       7,412       7,407       7,396       7,393  
Additional paid-in capital   1,234,402       1,233,593       1,231,532       1,228,626       1,226,695  
Retained earnings   1,132,962       1,097,399       1,057,298       1,012,774       961,542  
Accumulated other comprehensive loss   (307,270 )     (217,964 )     (198,914 )     (239,151 )     (314,089 )
Total Stockholders’ Equity   2,092,644       2,145,565       2,122,448       2,034,770       1,906,666  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 17,996,648     $ 17,968,412     $ 18,178,908     $ 17,938,306     $ 17,718,985  
                   

CONSOLIDATED STATEMENTS OF INCOME                  
(Dollars In Thousands, Except Per Share Amounts) September 30,   June 30,   March 31,   December 31,   September 30,
    2023       2023       2023       2022       2022  
INTEREST INCOME                  
Loans receivable:                  
Taxable $ 191,705     $ 186,256     $ 172,353     $ 156,102     $ 128,504  
Tax-exempt   8,288       7,760       7,709       6,930       6,500  
Investment securities:                  
Taxable   8,590       8,886       9,087       9,417       10,055  
Tax-exempt   13,947       14,279       16,070       17,033       17,261  
Deposits with financial institutions   5,884       3,164       637       959       704  
Federal Home Loan Bank stock   719       1,020       542       541       314  
Total Interest Income   229,133       221,365       206,398       190,982       163,338  
INTEREST EXPENSE                  
Deposits   85,551       73,201       50,685       33,516       16,644  
Federal funds purchased         123       1,297       808       418  
Securities sold under repurchase agreements   797       979       848       541       372  
Federal Home Loan Bank advances   6,896       6,815       7,064       4,932       3,493  
Subordinated debentures and other borrowings   2,506       2,412       2,385       2,229       2,105  
Total Interest Expense   95,750       83,530       62,279       42,026       23,032  
NET INTEREST INCOME   133,383       137,835       144,119       148,956       140,306  
Provision for credit losses   2,000                          
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES   131,383       137,835       144,119       148,956       140,306  
NONINTEREST INCOME                  
Service charges on deposit accounts   7,975       7,813       7,359       7,097       7,165  
Fiduciary and wealth management fees   7,394       7,397       7,862       7,501       7,221  
Card payment fees   4,716       4,537       5,172       4,533       4,776  
Net gains and fees on sales of loans   5,517       3,632       2,399       2,087       2,543  
Derivative hedge fees   516       672       1,148       326       700  
Other customer fees   384       742       517       362       501  
Earnings on cash surrender value of life insurance   1,761       2,096       1,288       1,515       6,655  
Net realized gains (losses) on sales of available for sale securities   (1,650 )     (1,392 )     (1,571 )     57       481  
Other income (loss)   1,229       822       823       672       (425 )
Total Noninterest Income   27,842       26,319       24,997       24,150       29,617  
NONINTEREST EXPENSES                  
Salaries and employee benefits   55,566       54,753       57,459       52,331       56,002  
Net occupancy   6,837       6,674       7,259       6,638       6,738  
Equipment   5,698       6,181       6,126       6,148       5,997  
Marketing   2,369       1,102       1,309       3,157       2,401  
Outside data processing fees   6,573       6,604       6,113       5,611       6,827  
Printing and office supplies   333       434       383       390       472  
Intangible asset amortization   2,182       2,182       2,197       2,303       2,303  
FDIC assessments   2,981       2,740       1,396       2,295       2,824  
Other real estate owned and foreclosure expenses   677       916       (18 )     197       328  
Professional and other outside services   3,833       4,660       3,698       3,961       4,461  
Other expenses   6,805       6,347       7,798       6,668       8,025  
Total Noninterest Expenses   93,854       92,593       93,720       89,699       96,378  
INCOME BEFORE INCOME TAX   65,371       71,561       75,396       83,407       73,545  
Income tax expense   9,005       10,699       11,317       12,647       9,793  
NET INCOME   56,366       60,862       64,079       70,760       63,752  
Preferred stock dividends   468       469       469       468       469  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 55,898     $ 60,393     $ 63,610     $ 70,292     $ 63,283  
Per Share Data:                  
Basic Net Income Available to Common Stockholders $ 0.95     $ 1.02     $ 1.07     $ 1.20     $ 1.08  
Diluted Net Income Available to Common Stockholders $ 0.94     $ 1.02     $ 1.07     $ 1.19     $ 1.08  
Cash Dividends Paid to Common Stockholders $ 0.34     $ 0.34     $ 0.32     $ 0.32     $ 0.32  
Average Diluted Common Shares Outstanding (in thousands)   59,503       59,448       59,441       59,384       59,339  
FINANCIAL RATIOS:                  
Return on Average Assets   1.24 %     1.34 %     1.42 %     1.59 %     1.43 %
Return on Average Stockholders’ Equity   10.38       11.29       12.21       14.36       12.54  
Return on Tangible Common Stockholders’ Equity   16.54       18.04       19.82       24.21       20.85  
Average Earning Assets to Average Assets   93.36       93.38       93.35       93.66       92.90  
Allowance for Credit Losses – Loans as % of Total Loans   1.67       1.80       1.82       1.86       1.94  
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)   0.66       0.06       0.01       0.12       (0.01 )
Average Stockholders’ Equity to Average Assets   11.87       11.78       11.56       10.98       11.36  
Tax Equivalent Yield on Average Earning Assets   5.55       5.36       5.06       4.73       4.11  
Interest Expense/Average Earning Assets   2.26       1.97       1.48       1.01       0.56  
Net Interest Margin (FTE) on Average Earning Assets   3.29       3.39       3.58       3.72       3.55  
Efficiency Ratio   53.91       52.21       51.72       48.60       53.34  
Tangible Common Book Value Per Share $ 22.43     $ 23.34     $ 22.93     $ 21.45     $ 19.26  

LOANS                  
(Dollars In Thousands) September 30,   June 30,   March 31,   December 31,   September 30,
    2023       2023       2023       2022       2022  
Commercial and industrial loans $ 3,490,953     $ 3,531,395     $ 3,502,204     $ 3,437,126     $ 3,330,529  
Agricultural land, production and other loans to farmers   233,838       230,003       219,598       241,793       221,954  
Real estate loans:                  
Construction   1,022,261       949,918       960,979       835,582       828,923  
Commercial real estate, non-owner occupied   2,360,596       2,379,819       2,375,410       2,407,475       2,299,272  
Commercial real estate, owner occupied   1,153,707       1,179,739       1,244,117       1,246,528       1,268,567  
Residential   2,257,385       2,248,473       2,185,943       2,096,655       1,990,668  
Home equity   609,352       614,366       621,354       630,632       621,619  
Individuals’ loans for household and other personal expenditures   176,523       172,896       172,389       175,211       173,225  
Public finance and other commercial loans   966,807       963,624       959,467       932,892       915,245  
Loans   12,271,422       12,270,233       12,241,461       12,003,894       11,650,002  
Allowance for credit losses – loans   (205,782 )     (221,147 )     (223,052 )     (223,277 )     (226,702 )
NET LOANS $ 12,065,640     $ 12,049,086     $ 12,018,409     $ 11,780,617     $ 11,423,300  

DEPOSITS                  
(Dollars In Thousands) September 30,   June 30,   March 31,   December 31,   September 30,
    2023       2023       2023       2022       2022  
Demand deposits $ 7,952,040     $ 8,045,455     $ 8,422,387     $ 8,448,797     $ 8,534,950  
Savings deposits   4,572,162       4,530,255       4,499,487       4,657,140       5,054,490  
Certificates and other time deposits of $100,000 or more   1,280,607       1,160,303       1,040,379       742,539       443,588  
Other certificates and time deposits   761,196       680,965       574,886       468,712       381,365  
Brokered certificates of deposits   80,571       164,177       166,148       65,557       20,432  
TOTAL DEPOSITS $ 14,646,576     $ 14,581,155     $ 14,703,287     $ 14,382,745     $ 14,434,825  

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS            
(Dollars in Thousands)                      
  For the Three Months Ended
  September 30, 2023   September 30, 2022
  Average Balance   Interest
 Income /
Expense
  Average
Rate
  Average Balance   Interest
 Income /
Expense
  Average
Rate
ASSETS                      
Interest-bearing deposits $ 502,967     $ 5,884     4.68 %   $ 190,434     $ 704     1.48 %
Federal Home Loan Bank stock   41,826       719     6.88       38,089       314     3.30  
Investment Securities: (1)                      
Taxable   1,817,219       8,590     1.89       2,091,608       10,055     1.92  
Tax-exempt (2)   2,298,025       17,655     3.07       2,700,580       21,849     3.24  
Total Investment Securities   4,115,244       26,245     2.55       4,792,188       31,904     2.66  
Loans held for sale   24,227       386     6.37       20,039       266     5.74  
Loans: (3)                      
Commercial   8,456,527       153,993     7.28       8,177,895       103,227     5.05  
Real estate mortgage   2,079,067       21,618     4.16       1,666,173       14,701     3.53  
Installment   827,318       15,708     7.59       813,112       10,310     5.07  
Tax-exempt (2)   900,493       10,491     4.66       810,984       8,228     4.06  
Total Loans   12,287,632       202,196     6.58       11,488,203       136,732     4.76  
Total Earning Assets   16,947,669       235,044     5.55 %     16,508,914       169,654     4.11 %
Total Non-Earning Assets   1,204,570               1,261,709          
TOTAL ASSETS $ 18,152,239             $ 17,770,623          
LIABILITIES                      
Interest-Bearing Deposits:                      
Interest-bearing deposits $ 5,425,829     $ 37,780     2.79 %   $ 5,184,087     $ 8,723     0.67 %
Money market deposits   2,923,798       23,607     3.23       3,096,423       5,390     0.70  
Savings deposits   1,641,338       3,844     0.94       1,978,596       1,538     0.31  
Certificates and other time deposits   2,106,910       20,320     3.86       857,033       993     0.46  
Total Interest-Bearing Deposits   12,097,875       85,551     2.83       11,116,139       16,644     0.60  
Borrowings   1,032,180       10,199     3.95       1,013,893       6,388     2.52  
Total Interest-Bearing Liabilities   13,130,055       95,750     2.92       12,130,032       23,032     0.76  
Noninterest-bearing deposits   2,637,717               3,461,393          
Other liabilities   230,235               161,042          
Total Liabilities   15,998,007               15,752,467          
STOCKHOLDERS’ EQUITY   2,154,232               2,018,156          
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 18,152,239       95,750         $ 17,770,623       23,032      
Net Interest Income (FTE)     $ 139,294             $ 146,622      
Net Interest Spread (FTE) (4)         2.63 %           3.35 %
                       
Net Interest Margin (FTE):                      
Interest Income (FTE) / Average Earning Assets         5.55 %           4.11 %
Interest Expense / Average Earning Assets         2.26 %           0.56 %
Net Interest Margin (FTE) (5)         3.29 %           3.55 %
                       
(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 2023 and 2022. These totals equal $5,911 and $6.316 for the three months ended September 30, 2023 and 2022, 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, 2023   September 30, 2022
  Average Balance   Interest
 Income /
Expense
  Average
Rate
  Average Balance   Interest
 Income /
Expense
  Average
Rate
Assets:                      
Interest-bearing deposits $ 340,887     $ 9,685     3.79 %   $ 333,818     $ 1,544     0.62 %
Federal Home Loan Bank stock   41,160       2,281     7.39       34,742       635     2.44  
Investment Securities: (1)                      
Taxable   1,872,267       26,563     1.89       2,079,983       28,937     1.85  
Tax-exempt (2)   2,394,864       56,071     3.12       2,647,547       63,732     3.21  
Total Investment Securities   4,267,131       82,634     2.58       4,727,530       92,669     2.61  
Loans held for sale   22,398       1,046     6.23       19,020       622     4.36  
Loans: (3)                      
Commercial   8,515,148       444,422     6.96       7,731,591       253,770     4.38  
Real estate mortgage   2,008,852       60,354     4.01       1,350,969       35,199     3.47  
Installment   833,133       44,492     7.12       765,960       24,775     4.31  
Tax-exempt (2)   885,256       30,072     4.53       780,410       23,030     3.93  
Total Loans   12,264,787       580,386     6.31       10,647,950       337,396     4.22  
Total Earning Assets   16,913,965       674,986     5.32 %     15,744,040       432,244     3.66 %
Total Non-Earning Assets   1,201,539               1,268,890          
Total Assets $ 18,115,504             $ 17,012,930          
Liabilities:                      
Interest-Bearing deposits:                      
Interest-bearing deposits $ 5,412,482     $ 97,016     2.39 %   $ 5,195,249     $ 15,699     0.40 %
Money market deposits   2,812,891       55,868     2.65       2,880,603       8,392     0.39  
Savings deposits   1,730,110       10,693     0.82       1,937,761       2,895     0.20  
Certificates and other time deposits   1,821,408       45,860     3.36       828,158       2,437     0.39  
Total Interest-Bearing Deposits   11,776,891       209,437     2.37       10,841,771       29,423     0.36  
Borrowings   1,144,368       32,122     3.74       817,894       13,354     2.18  
Total Interest-Bearing Liabilities   12,921,259       241,559     2.49       11,659,665       42,777     0.49  
Noninterest-bearing deposits   2,850,557               3,232,925          
Other liabilities   217,683               143,041          
Total Liabilities   15,989,499               15,035,631          
Stockholders’ Equity   2,126,005               1,977,299          
Total Liabilities and Stockholders’ Equity $ 18,115,504       241,559         $ 17,012,930       42,777      
Net Interest Income (FTE)     $ 433,427             $ 389,467      
Net Interest Spread (FTE) (4)         2.83 %           3.17 %
                       
Net Interest Margin (FTE):                      
Interest Income (FTE) / Average Earning Assets         5.32 %           3.66 %
Interest Expense / Average Earning Assets         1.90 %           0.36 %
Net Interest Margin (FTE) (5)         3.42 %           3.30 %
                       
(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 2023 and 2022. These totals equal $18,090 and $18,220 for the nine months ended September 30, 2023 and 2022, 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.

ADJUSTED EPS EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") AND ACQUISITION-RELATED EXPENSES – NON-GAAP
(Dollars In Thousands, Except Per Share Amounts) Three Months Ended   Nine Months Ended
  September 30,   June 30,   March 31,   December 31,   September 30,   September 30,   September 30,
    2023       2023       2023       2022       2022       2023       2022  
Net Income Available to Common Stockholders – GAAP $ 55,898     $ 60,393     $ 63,610     $ 70,292     $ 63,283     $ 179,901     $ 150,391  
Adjustments:                          
PPP loan income   (8 )     (9 )     (25 )     (109 )     (323 )     (42 )     (3,098 )
Acquisition-related expenses                     413       3,417             16,118  
Acquisition-related provision expense                                       16,755  
Tax on adjustment   2       2       6       (75 )     (759 )     10       (7,301 )
Adjusted Net Income Available to Common Stockholders – Non-GAAP $ 55,892     $ 60,386     $ 63,591     $ 70,521     $ 65,618     $ 179,869     $ 172,865  
                           
Average Diluted Common Shares Outstanding (in thousands)   59,503       59,448       59,441       59,384       59,339       59,465       57,468  
                           
Diluted Earnings Per Common Share – GAAP $ 0.94     $ 1.02     $ 1.07     $ 1.19     $ 1.08     $ 3.03     $ 2.62  
Adjustments:                          
PPP loan income                     (0.01 )                 (0.05 )
Acquisition-related expenses                     0.01       0.05             0.27  
Acquisition-related provision expense                                       0.30  
Tax on adjustment                           (0.01 )           (0.13 )
Adjusted Diluted Earnings Per Common Share – Non-GAAP $ 0.94     $ 1.02     $ 1.07     $ 1.19     $ 1.12     $ 3.03     $ 3.01  

RETURN ON TANGIBLE COMMON EQUITY – NON-GAAP
(Dollars In Thousands) Three Months Ended   Nine Months Ended
  September 30,   June 30,   March 31,   December 31,   September 30,   September 30,   September 30,
    2023       2023       2023       2022       2022       2023       2022  
Total Average Stockholders’ Equity (GAAP) $ 2,154,232     $ 2,139,877     $ 2,083,125     $ 1,958,041     $ 2,018,156     $ 2,126,005     $ 1,977,299  
Less: Average Preferred Stock   (25,125 )     (25,125 )     (25,125 )     (25,125 )     (25,125 )     (25,125 )     (16,792 )
Less: Average Intangible Assets, Net of Tax   (735,787 )     (737,489 )     (739,190 )     (741,632 )     (744,069 )     (737,476 )     (685,707 )
Average Tangible Common Equity, Net of Tax (Non-GAAP) $ 1,393,320     $ 1,377,263     $ 1,318,810     $ 1,191,284     $ 1,248,962     $ 1,363,404     $ 1,274,800  
                           
Net Income Available to Common Stockholders (GAAP) $ 55,898     $ 60,393     $ 63,610     $ 70,292     $ 63,283     $ 179,901     $ 150,391  
Plus: Intangible Asset Amortization, Net of Tax   1,724       1,724       1,734       1,819       1,819       5,182       4,718  
Tangible Net Income (Non-GAAP) $ 57,622     $ 62,117     $ 65,344     $ 72,111     $ 65,102     $ 185,083     $ 155,109  
                           
Return on Tangible Common Equity (Non-GAAP)   16.54 %     18.04 %     19.82 %     24.21 %     20.85 %     18.10 %     16.22 %

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