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First Merchants Corporation Announces Third Quarter 2023 Earnings Per Share

Thursday, October 26, 2023

Third Quarter 2023 Highlights:

  • 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.

     

    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 %