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News Details

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 %
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