First Merchants Corporation Announces Second Quarter 2024 Earnings Per Share

First Merchants Corporation

Thu, Jul 25, 2024, 5:00 AM

Net income available to common stockholders was $39.5 million and diluted earnings per common share totaled $.68 in the second quarter of 2024, compared to $60.4 million and $1.02 in the second quarter of 2023, and $47.5 million and $.80 in the first quarter of 2024.
Strong capital position with Common Equity Tier 1 Capital Ratio of 11.02 percent.
Net interest margin totaled 3.16 percent compared to 3.10 percent on a linked quarter basis.
Total loans grew $191.2 million, or 6.1 percent annualized on a linked quarter basis, and $374.4 million, or 3.0 percent during the last twelve months.
Total deposits declined $315.5 million, or 8.5 percent annualized on a linked quarter basis.
Nonperforming assets to total assets were 36 basis points compared to 37 basis points on a linked quarter basis.
The efficiency ratio totaled 53.84 percent for the quarter.

Mark Hardwick, Chief Executive Officer, stated, "We are pleased that net interest margin improved by 6 basis points over the first quarter of 2024 and that net interest income increased by $1.5 million over the same period. Non-interest income and non-interest expense also compared favorably helping the company produce an efficiency ratio better than our stated key performance indicator of less than 55 percent." Hardwick added, "The elevated provision expense driven by higher than normal net charge-off’s was the singular item that weakened our performance in the quarter."

Second Quarter Financial Results:

First Merchants Corporation (the “Corporation”) has reported second quarter 2024 net income available to common stockholders of $39.5 million compared to $60.4 million during the same period in 2023. Diluted earnings per common share for the period totaled $.68 per share compared to the second quarter of 2023 result of $1.02 per share.

Total assets equaled $18.3 billion as of quarter-end and loans totaled $12.7 billion. During the past twelve months, total loans grew by $374.4 million, or 3.0 percent. On a linked quarter basis, loans grew $191.2 million, or 6.1 percent with growth primarily in Commercial & Industrial loans.

Investments, totaling $3.8 billion, decreased $138.4 million, or 3.6 percent, during the last twelve months and decreased $30.5 million, or 3.2 percent annualized on a linked quarter basis.

Total deposits equaled $14.6 billion as of quarter-end and decreased by $12.1 million over the past twelve months. Total deposits declined $315.5 million, or 8.5 percent annualized on a linked quarter basis with noninterest-bearing deposits remaining stable. The loan to deposit ratio for the current quarter ended at 87.0 percent.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $189.5 million as of quarter-end, or 1.50 percent of total loans. Loan charge-offs, net of recoveries, for the quarter totaled $39.6 million and provision expense of $24.5 million was recorded during the quarter. Reserves for unfunded commitments totaling $19.5 million remain unchanged from prior quarter. Non-performing assets to total assets were 0.36 percent for the second quarter of 2024, a decrease of one basis point compared to 0.37 percent in the prior quarter.

Net interest income, totaling $128.6 million for the quarter, increased $1.5 million, or 1.2 percent, compared to prior quarter but decreased $9.3 million, or 6.7 percent compared to the second quarter of 2023. Stated net-interest margin on a tax equivalent basis, totaling 3.16 percent, increased by six basis points compared to the first quarter of 2024 but decreased 23 basis points compared to the second quarter of 2023. During the quarter, higher yields on earnings assets and lower yields on interest bearing liabilities both contributed to the increase in net-interest margin over last quarter.

Noninterest income, totaling $31.3 million for the quarter, increased $4.7 million, or 17.6 percent, compared to the first quarter of 2024 and increased $5.0 million from the second quarter of 2023. The increase over first quarter of 2024 was driven primarily by higher gains on the sales of loans, private wealth fees, and an increase in CRA investment valuations recorded through Other Income on the Income Statement.

Noninterest expense totaled $91.4 million for the quarter, a decline of $5.5 million from the first quarter of 2024. The decrease was from lower salaries and employee benefits and lower FDIC assessments, offset by the inclusion of $0.7 million of gains on the sale of properties in the prior quarter which were recorded in Other Expenses.

The Corporation’s total risk-based capital ratio equaled 12.95 percent, common equity tier 1 capital ratio equaled 11.02 percent, and the tangible common equity ratio totaled 8.27 percent. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, July 25, 2024.

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/BId0844162db694c8f80a4e6caa546f714)

In order to view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/d6tnudnp) during the time of the call. A replay of the webcast will be available until July 25, 2025.

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 (https://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.

For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
https://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,
		2024			2023
ASSETS
Cash and due from banks	$	105,372		$	108,975
Interest-bearing deposits		168,528			219,480
Investment securities, net of allowance for credit losses of $245,000 and $245,000		3,753,088			3,891,491
Loans held for sale		32,292			27,297
Loans		12,639,650			12,270,233
Less: Allowance for credit losses - loans		(189,537	)		(221,147	)
Net loans		12,450,113			12,049,086
Premises and equipment		133,245			114,402
Federal Home Loan Bank stock		41,738			41,842
Interest receivable		97,546			89,784
Goodwill and other intangibles		735,373			743,465
Cash surrender value of life insurance		306,379			307,020
Other real estate owned		4,824			7,685
Tax asset, deferred and receivable		107,080			113,724
Other assets		367,845			318,005
TOTAL ASSETS	$	18,303,423		$	18,032,256
LIABILITIES
Deposits:
Noninterest-bearing	$	2,303,313		$	2,636,017
Interest-bearing		12,265,757			11,945,138
Total Deposits		14,569,070			14,581,155
Borrowings:
Federal funds purchased		147,229			—
Securities sold under repurchase agreements		100,451			152,472
Federal Home Loan Bank advances		832,703			723,480
Subordinated debentures and other borrowings		93,589			151,325
Total Borrowings		1,173,972			1,027,277
Interest payable		18,554			13,595
Other liabilities		329,302			264,664
Total Liabilities		16,090,898			15,886,691
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 - 58,045,653 and 59,297,148 shares		7,256			7,412
Additional paid-in capital		1,191,193			1,233,593
Retained earnings		1,200,930			1,097,399
Accumulated other comprehensive loss		(211,979	)		(217,964	)
Total Stockholders' Equity		2,212,525			2,145,565
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,303,423		$	18,032,256

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended						Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,						June 30,
		2024			2023			2024			2023
INTEREST INCOME
Loans receivable:
Taxable	$	201,413		$	186,256		$	399,436		$	358,609
Tax-exempt		8,430			7,760			16,620			15,469
Investment securities:
Taxable		9,051			8,886			17,799			17,973
Tax-exempt		13,613			14,279			27,224			30,349
Deposits with financial institutions		2,995			3,164			9,488			3,801
Federal Home Loan Bank stock		879			1,020			1,714			1,562
Total Interest Income		236,381			221,365			472,281			427,763
INTEREST EXPENSE
Deposits		99,151			73,201			197,436			123,886
Federal funds purchased		126			123			126			1,420
Securities sold under repurchase agreements		645			979			1,677			1,827
Federal Home Loan Bank advances		6,398			6,815			13,171			13,879
Subordinated debentures and other borrowings		1,490			2,412			4,237			4,797
Total Interest Expense		107,810			83,530			216,647			145,809
NET INTEREST INCOME		128,571			137,835			255,634			281,954
Provision for credit losses		24,500			—			26,500			—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		104,071			137,835			229,134			281,954
NONINTEREST INCOME
Service charges on deposit accounts		8,214			7,813			16,121			15,172
Fiduciary and wealth management fees		8,825			7,397			17,025			15,259
Card payment fees		4,739			4,537			9,239			9,709
Net gains and fees on sales of loans		5,141			3,632			8,395			6,031
Derivative hedge fees		489			672			752			1,820
Other customer fees		460			742			887			1,259
Earnings on cash surrender value of life insurance		1,929			2,096			3,521			3,384
Net realized losses on sales of available for sale securities		(49	)		(1,392	)		(51	)		(2,963	)
Other income		1,586			822			2,083			1,645
Total Noninterest Income		31,334			26,319			57,972			51,316
NONINTEREST EXPENSES
Salaries and employee benefits		52,214			54,753			110,507			112,212
Net occupancy		6,746			6,674			14,058			13,933
Equipment		6,599			6,181			12,825			12,307
Marketing		1,773			1,102			2,971			2,411
Outside data processing fees		7,072			6,604			13,961			12,717
Printing and office supplies		354			434			707			817
Intangible asset amortization		1,771			2,182			3,728			4,379
FDIC assessments		3,278			2,740			7,565			4,136
Other real estate owned and foreclosure expenses		373			916			907			898
Professional and other outside services		3,822			4,660			7,774			8,358
Other expenses		7,411			6,347			13,345			14,145
Total Noninterest Expenses		91,413			92,593			188,348			186,313
INCOME BEFORE INCOME TAX		43,992			71,561			98,758			146,957
Income tax expense		4,067			10,699			10,892			22,016
NET INCOME		39,925			60,862			87,866			124,941
Preferred stock dividends		469			469			938			938
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	39,456		$	60,393		$	86,928		$	124,003

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.68		$	1.02		$	1.48		$	2.09
Diluted Net Income Available to Common Stockholders	$	0.68		$	1.02		$	1.48		$	2.09
Cash Dividends Paid to Common Stockholders	$	0.35		$	0.34		$	0.69		$	0.66
Average Diluted Common Shares Outstanding (in thousands)		58,328			59,448			58,800			59,446

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2024			2023			2024			2023
NET CHARGE-OFFS	$	39,644		$	1,905		$	41,897		$	2,130

AVERAGE BALANCES:
Total Assets	$	18,332,159		$	18,170,649		$	18,381,340		$	18,096,832
Total Loans		12,620,530			12,369,673			12,548,798			12,253,176
Total Earning Assets		17,013,984			16,968,465			17,068,917			16,896,834
Total Deposits		14,895,867			14,719,913			14,888,536			14,572,480
Total Stockholders' Equity		2,203,361			2,139,877			2,222,750			2,111,658

FINANCIAL RATIOS:
Return on Average Assets		0.87	%		1.34	%		0.96	%		1.38	%
Return on Average Stockholders' Equity		7.16			11.29			7.82			11.74
Return on Tangible Common Stockholders' Equity		11.29			18.04			12.26			18.91
Average Earning Assets to Average Assets		92.81			93.38			92.86			93.37
Allowance for Credit Losses - Loans as % of Total Loans		1.50			1.80			1.50			1.80
Net Charge-offs as % of Average Loans (Annualized)		1.26			0.06			0.67			0.03
Average Stockholders' Equity to Average Assets		12.02			11.78			12.09			11.67
Tax Equivalent Yield on Average Earning Assets		5.69			5.36			5.67			5.21
Interest Expense/Average Earning Assets		2.53			1.97			2.54			1.73
Net Interest Margin (FTE) on Average Earning Assets		3.16			3.39			3.13			3.48
Efficiency Ratio		53.84			52.21			56.47			51.96
Tangible Common Book Value Per Share	$	25.10		$	23.34		$	25.10		$	23.34

NONPERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
		2024			2024			2023			2023			2023
Nonaccrual Loans	$	61,906		$	62,478		$	53,580		$	53,102		$	69,240
Other Real Estate Owned and Repossessions		4,824			4,886			4,831			6,480			7,685
Nonperforming Assets (NPA)		66,730			67,364			58,411			59,582			76,925
90+ Days Delinquent		1,686			2,838			172			89			428
NPAs & 90 Day Delinquent	$	68,416		$	70,202		$	58,583		$	59,671		$	77,353

Allowance for Credit Losses - Loans	$	189,537		$	204,681		$	204,934		$	205,782		$	221,147
Quarterly Net Charge-offs		39,644			2,253			3,148			20,365			1,905
NPAs / Actual Assets %		0.36	%		0.37	%		0.32	%		0.33	%		0.43	%
NPAs & 90 Day / Actual Assets %		0.37	%		0.38	%		0.32	%		0.33	%		0.43	%
NPAs / Actual Loans and OREO %		0.53	%		0.54	%		0.47	%		0.48	%		0.63	%
Allowance for Credit Losses - Loans / Actual Loans (%)		1.50	%		1.64	%		1.64	%		1.67	%		1.80	%
Net Charge-offs (Recoveries) as % of Average Loans (Annualized)		1.26	%		0.07	%		0.10	%		0.66	%		0.06	%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
		2024			2024			2023			2023			2023
ASSETS
Cash and due from banks	$	105,372		$	100,514		$	112,649		$	125,173		$	108,975
Interest-bearing deposits		168,528			410,497			436,080			348,639			219,480
Investment securities, net of allowance for credit losses		3,753,088			3,783,574			3,811,364			3,713,724			3,891,491
Loans held for sale		32,292			15,118			18,934			30,972			27,297
Loans		12,639,650			12,465,582			12,486,027			12,271,422			12,270,233
Less: Allowance for credit losses - loans		(189,537	)		(204,681	)		(204,934	)		(205,782	)		(221,147	)
Net loans		12,450,113			12,260,901			12,281,093			12,065,640			12,049,086
Premises and equipment		133,245			132,706			133,896			132,441			114,402
Federal Home Loan Bank stock		41,738			41,758			41,769			41,797			41,842
Interest receivable		97,546			92,550			97,664			90,011			89,784
Goodwill and other intangibles		735,373			737,144			739,101			741,283			743,465
Cash surrender value of life insurance		306,379			306,028			306,301			306,106			307,020
Other real estate owned		4,824			4,886			4,831			6,480			7,685
Tax asset, deferred and receivable		107,080			101,121			99,883			135,521			113,724
Other assets		367,845			331,006			322,322			340,476			318,005
TOTAL ASSETS	$	18,303,423		$	18,317,803		$	18,405,887		$	18,078,263		$	18,032,256
LIABILITIES
Deposits:
Noninterest-bearing	$	2,303,313		$	2,338,364		$	2,500,062		$	2,554,984		$	2,636,017
Interest-bearing		12,265,757			12,546,220			12,321,391			12,091,592			11,945,138
Total Deposits		14,569,070			14,884,584			14,821,453			14,646,576			14,581,155
Borrowings:
Federal funds purchased		147,229			—			—			—			—
Securities sold under repurchase agreements		100,451			130,264			157,280			152,537			152,472
Federal Home Loan Bank advances		832,703			612,778			712,852			713,384			723,480
Subordinated debentures and other borrowings		93,589			118,612			158,644			158,665			151,325
Total Borrowings		1,173,972			861,654			1,028,776			1,024,586			1,027,277
Interest payable		18,554			19,262			18,912			16,473			13,595
Other liabilities		329,302			327,500			289,033			297,984			264,664
Total Liabilities		16,090,898			16,093,000			16,158,174			15,985,619			15,886,691
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		7,256			7,321			7,428			7,425			7,412
Additional paid-in capital		1,191,193			1,208,447			1,236,506			1,234,402			1,233,593
Retained earnings		1,200,930			1,181,939			1,154,624			1,132,962			1,097,399
Accumulated other comprehensive loss		(211,979	)		(198,029	)		(175,970	)		(307,270	)		(217,964	)
Total Stockholders' Equity		2,212,525			2,224,803			2,247,713			2,092,644			2,145,565
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,303,423		$	18,317,803		$	18,405,887		$	18,078,263		$	18,032,256

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,				December 31,			September 30,			June 30,
		2024			2024				2023			2023			2023
INTEREST INCOME
Loans receivable:
Taxable	$	201,413		$	198,023			$	197,523		$	191,705		$	186,256
Tax-exempt		8,430			8,190				8,197			8,288			7,760
Investment securities:
Taxable		9,051			8,748				8,644			8,590			8,886
Tax-exempt		13,613			13,611				13,821			13,947			14,279
Deposits with financial institutions		2,995			6,493				8,034			5,884			3,164
Federal Home Loan Bank stock		879			835				771			719			1,020
Total Interest Income		236,381			235,900				236,990			229,133			221,365
INTEREST EXPENSE
Deposits		99,151			98,285				96,655			85,551			73,201
Federal funds purchased		126			—				1			—			123
Securities sold under repurchase agreements		645			1,032				827			797			979
Federal Home Loan Bank advances		6,398			6,773				6,431			6,896			6,815
Subordinated debentures and other borrowings		1,490			2,747				3,013			2,506			2,412
Total Interest Expense		107,810			108,837				106,927			95,750			83,530
NET INTEREST INCOME		128,571			127,063				130,063			133,383			137,835
Provision for credit losses		24,500			2,000				1,500			2,000			—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		104,071			125,063				128,563			131,383			137,835
NONINTEREST INCOME
Service charges on deposit accounts		8,214			7,907				7,690			7,975			7,813
Fiduciary and wealth management fees		8,825			8,200				8,187			7,394			7,397
Card payment fees		4,739			4,500				4,437			4,716			4,537
Net gains and fees on sales of loans		5,141			3,254				4,111			5,517			3,632
Derivative hedge fees		489			263				1,049			516			672
Other customer fees		460			427				237			384			742
Earnings on cash surrender value of life insurance		1,929			1,592				3,202			1,761			2,096
Net realized losses on sales of available for sale securities		(49	)		(2	)			(2,317	)		(1,650	)		(1,392	)
Other income (loss)		1,586			497		&...nbsp;		(152	)		1,229			822
Total Noninterest Income		31,334			26,638				26,444			27,842			26,319
NONINTEREST EXPENSES
Salaries and employee benefits		52,214			58,293				60,967			55,566			54,753
Net occupancy		6,746			7,312				9,089			6,837			6,674
Equipment		6,599			6,226				6,108			5,698			6,181
Marketing		1,773			1,198				2,647			2,369			1,102
Outside data processing fees		7,072			6,889				5,875			6,573			6,604
Printing and office supplies		354			353				402			333			434
Intangible asset amortization		1,771			1,957				2,182			2,182			2,182
FDIC assessments		3,278			4,287				7,557			2,981			2,740
Other real estate owned and foreclosure expenses		373			534				1,743			677			916
Professional and other outside services		3,822			3,952				3,981			3,833			4,660
Other expenses		7,411			5,934				7,552			6,805			6,347
Total Noninterest Expenses		91,413			96,935				108,103			93,854			92,593
INCOME BEFORE INCOME TAX		43,992			54,766				46,904			65,371			71,561
Income tax expense		4,067			6,825				4,425			9,005			10,699
NET INCOME		39,925			47,941				42,479			56,366			60,862
Preferred stock dividends		469			469				469			468			469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	39,456		$	47,472			$	42,010		$	55,898		$	60,393
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.68		$	0.80			$	0.71		$	0.95		$	1.02
Diluted Net Income Available to Common Stockholders	$	0.68		$	0.80			$	0.71		$	0.94		$	1.02
Cash Dividends Paid to Common Stockholders	$	0.35		$	0.34			$	0.34		$	0.34		$	0.34
Average Diluted Common Shares Outstanding (in thousands)		58,328			59,273				59,556			59,503			59,448
FINANCIAL RATIOS:
Return on Average Assets		0.87	%		1.04	%			0.92	%		1.24	%		1.34	%
Return on Average Stockholders' Equity		7.16			8.47				7.89			10.38			11.29
Return on Tangible Common Stockholders' Equity		11.29			13.21				12.75			16.54			18.04
Average Earning Assets to Average Assets		92.81			92.91				93.62			93.36			93.38
Allowance for Credit Losses - Loans as % of Total Loans		1.50			1.64				1.64			1.67			1.80
Net Charge-offs as % of Average Loans (Annualized)		1.26			0.07				0.10			0.66			0.06
Average Stockholders' Equity to Average Assets		12.02			12.17				11.58			11.87			11.78
Tax Equivalent Yield on Average Earning Assets		5.69			5.65				5.64			5.55			5.36
Interest Expense/Average Earning Assets		2.53			2.55				2.48			2.26			1.97
Net Interest Margin (FTE) on Average Earning Assets		3.16			3.10				3.16			3.29			3.39
Efficiency Ratio		53.84			59.21				63.26			53.91			52.21
Tangible Common Book Value Per Share	$	25.10		$	25.07			$	25.06		$	22.43		$	23.34

LOANS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
		2024			2024			2023			2023			2023
Commercial and industrial loans	$	3,949,817		$	3,722,365		$	3,670,948		$	3,490,953		$	3,531,395
Agricultural land, production and other loans to farmers		239,926			234,431			263,414			233,838			230,003
Real estate loans:
Construction		823,267			941,726			957,545			1,022,261			949,918
Commercial real estate, non-owner occupied		2,323,533			2,368,360			2,400,839			2,360,596			2,379,819
Commercial real estate, owner occupied		1,174,195			1,137,894			1,162,083			1,153,707			1,179,739
Residential		2,370,905			2,316,490			2,288,921			2,257,385			2,248,473
Home equity		631,104			618,258			617,571			609,352			614,366
Individuals' loans for household and other personal expenditures		162,089			161,459			168,388			176,523			172,896
Public finance and other commercial loans		964,814			964,599			956,318			966,807			963,624
Loans		12,639,650			12,465,582			12,486,027			12,271,422			12,270,233
Allowance for credit losses - loans		(189,537	)		(204,681	)		(204,934	)		(205,782	)		(221,147	)
NET LOANS	$	12,450,113		$	12,260,901		$	12,281,093		$	12,065,640		$	12,049,086

DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
		2024		2024		2023		2023		2023
Demand deposits	$	7,757,679	$	7,771,976	$	7,965,862	$	7,952,040	$	8,045,455
Savings deposits		4,339,161		4,679,593		4,516,433		4,572,162		4,530,255
Certificates and other time deposits of $100,000 or more		1,415,131		1,451,443		1,408,985		1,280,607		1,160,303
Other certificates and time deposits		889,949		901,280		849,906		761,196		680,965
Brokered certificates of deposits		167,150		80,292		80,267		80,571		164,177
TOTAL DEPOSITS	$	14,569,070	$	14,884,584	$	14,821,453	$	14,646,576	$	14,581,155

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2024						June 30, 2023
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
ASSETS
Interest-bearing deposits	$	322,647	$	2,995	3.71	%	$	343,253	$	3,164	3.69	%
Federal Home Loan Bank stock		41,749		879	8.42			41,873		1,020	9.74
Investment Securities:⁽¹⁾
Taxable		1,788,749		9,051	2.02			1,876,676		8,886	1.89
Tax-exempt⁽²⁾		2,240,309		17,232	3.08			2,336,990		18,075	3.09
Total Investment Securities		4,029,058		26,283	2.61			4,213,666		26,961	2.56
Loans held for sale		28,585		431	6.03			19,328		300	6.21
Loans:⁽³⁾
Commercial		8,691,746		160,848	7.40			8,605,339		150,766	7.01
Real estate mortgage		2,150,591		23,799	4.43			2,031,136		20,345	4.01
Installment		823,417		16,335	7.94			831,775		14,844	7.14
Tax-exempt⁽²⁾		926,191		10,670	4.61			882,095		9,823	4.45
Total Loans		12,620,530		212,083	6.72			12,369,673		196,078	6.34
Total Earning Assets		17,013,984		242,240	5.69	%		16,968,465		227,223	5.36	%
Total Non-Earning Assets		1,318,175						1,202,184
TOTAL ASSETS	$	18,332,159					$	18,170,649
LIABILITIES
Interest-Bearing Deposits:
Interest-bearing deposits	$	5,586,549	$	40,994	2.94	%	$	5,546,232	$	34,574	2.49	%
Money market deposits		3,036,398		27,230	3.59			2,766,876		18,684	2.70
Savings deposits		1,508,734		3,476	0.92			1,724,816		3,884	0.90
Certificates and other time deposits		2,414,967		27,451	4.55			1,883,998		16,059	3.41
Total Interest-Bearing Deposits		12,546,648		99,151	3.16			11,921,922		73,201	2.46
Borrowings		885,919		8,659	3.91			1,110,486		10,329	3.72
Total Interest-Bearing Liabilities		13,432,567		107,810	3.21			13,032,408		83,530	2.56
Noninterest-bearing deposits		2,349,219						2,797,991
Other liabilities		347,012						200,373
Total Liabilities		16,128,798						16,030,772
STOCKHOLDERS' EQUITY		2,203,361						2,139,877
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,332,159		107,810			$	18,170,649		83,530
Net Interest Income (FTE)			$	134,430					$	143,693
Net Interest Spread (FTE)⁽⁴⁾					2.48	%					2.80	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.69	%					5.36	%
Interest Expense / Average Earning Assets					2.53	%					1.97	%
Net Interest Margin (FTE)⁽⁵⁾					3.16	%					3.39	%

⁽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 2024 and 2023. These totals equal $5,859 and $5,858 for the three months ended June 30, 2024 and 2023, 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 Six Months Ended
	June 30, 2024						June 30, 2023
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
Assets:
Federal Funds Sold
Interest-bearing deposits	$	449,173	$	9,488	4.22	%	$	258,504	$	3,801	2.94	%
Federal Home Loan Bank stock		41,757		1,714	8.21			40,821		1,562	7.65
Investment Securities:⁽¹⁾
Taxable		1,785,903		17,799	1.99			1,900,247		17,973	1.89
Tax-exempt⁽²⁾		2,243,286		34,461	3.07			2,444,086		38,416	3.14
Total Investment Securities		4,029,189		52,260	2.59			4,344,333		56,389	2.60
Loans held for sale		25,184		759	6.03			21,952		660	6.01
Loans:⁽³⁾
Commercial		8,644,927		320,057	7.40			8,544,945		290,428	6.80
Real estate mortgage		2,140,769		46,156	4.31			1,972,680		38,736	3.93
Installment		822,616		32,464	7.89			836,088		28,785	6.89
Tax-exempt⁽²⁾		915,302		21,038	4.60			877,511		19,581	4.46
Total Loans		12,548,798		420,474	6.70			12,253,176		378,190	6.17
Total Earning Assets		17,068,917		483,936	5.67	%		16,896,834		439,942	5.21	%
Total Non-Earning Assets		1,312,423						1,199,998
Total Assets	$	18,381,340					$	18,096,832
Liabilities:
Interest-Bearing deposits:
Interest-bearing deposits	$	5,503,185	$	80,484	2.92	%	$	5,405,696	$	59,237	2.19	%
Money market deposits		3,040,938		54,613	3.59			2,756,519		32,261	2.34
Savings deposits		1,534,305		7,277	0.95			1,775,233		6,849	0.77
Certificates and other time deposits		2,421,413		55,062	4.55			1,676,291		25,539	3.05
Total Interest-Bearing Deposits		12,499,841		197,436	3.16			11,613,739		123,886	2.13
Borrowings		948,866		19,211	4.05			1,201,392		21,923	3.65
Total Interest-Bearing Liabilities		13,448,707		216,647	3.22			12,815,131		145,809	2.28
Noninterest-bearing deposits		2,388,695						2,958,741
Other liabilities		321,188						211,302
Total Liabilities		16,158,590						15,985,174
Stockholders' Equity		2,222,750						2,111,658
Total Liabilities and Stockholders' Equity	$	18,381,340		216,647			$	18,096,832		145,809
Net Interest Income (FTE)			$	267,289					$	294,133
Net Interest Spread (FTE)⁽⁴⁾					2.45	%					2.93	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.67	%					5.21	%
Interest Expense / Average Earning Assets					2.54	%					1.73	%
Net Interest Margin (FTE)⁽⁵⁾					3.13	%					3.48	%

⁽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 2024 and 2023. These totals equal $11,655 and $12,179 for the six months ended June 30, 2024 and 2023, 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 NET INCOME AND DILUTED EARNINGS PER COMMON SHARE - NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)	Three Months Ended														Six Months Ended
	June 30,		March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2024		2024			2023			2023			2023			2024			2023
Net Income Available to Common Stockholders - GAAP	$	39,456	$	47,472		$	42,010		$	55,898		$	60,393		$	86,928		$	124,003
Adjustments:
PPP loan income		—		—			(7	)		(8	)		(9	)		—			(34	)
Non-core expenses^1,2		—		3,481			12,682			—			—			3,481			—
Tax on adjustments		—		(848	)		(3,088	)		2			2			(848	)		8
Adjusted Net Income Available to Common Stockholders - Non-GAAP	$	39,456	$	50,105		$	51,597		$	55,892		$	60,386		$	89,561		$	123,977

Average Diluted Common Shares Outstanding (in thousands)		58,328		59,273			59,556			59,503			59,448			58,800			59,446

Diluted Earnings Per Common Share - GAAP	$	0.68	$	0.80		$	0.71		$	0.94		$	1.02		$	1.48		$	2.09
Adjustments:
PPP loan income		—		—			—			—			—			—			—
Non-core expenses^1,2		—		0.06			0.21			—			—			0.06			—
Tax on adjustments		—		(0.01	)		(0.05	)		—			—			(0.01	)		—
Adjusted Diluted Earnings Per Common Share - Non-GAAP	$	0.68	$	0.85		$	0.87		$	0.94		$	1.02		$	1.53		$	2.09

¹ - Non-core expenses in 4Q23 included $6.3 million from early retirement and severance costs, $4.3 million from the FDIC special assessment, and $2.1 million from a lease termination.
² - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.


NET INTEREST MARGIN ("NIM"), ADJUSTED
(Dollars in Thousands, Except Per Share Amounts)
	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2024			2024			2023			2023			2023			2024			2023
Net Interest Income (GAAP)	$	128,571		$	127,063		$	130,063		$	133,383		$	137,835		$	255,634		$	281,954
Fully Taxable Equivalent ("FTE") Adjustment		5,859			5,795			5,853			5,911			5,858			11,655			12,179
Net Interest Income (FTE) (non-GAAP)	$	134,430		$	132,858		$	135,916		$	139,294		$	143,693		$	267,289		$	294,133

Average Earning Assets (GAAP)	$	17,013,984		$	17,123,851		$	17,222,714		$	16,947,669		$	16,968,465		$	17,068,917		$	16,896,834
Net Interest Margin (GAAP)		3.02	%		2.97	%		3.02	%		3.15	%		3.25	%		3.00	%		3.34	%
Net Interest Margin (FTE) (non-GAAP)		3.16	%		3.10	%		3.16	%		3.29	%		3.39	%		3.13	%		3.48	%

RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP
(Dollars In Thousands)	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2024			2024			2023			2023			2023			2024			2023
Total Average Stockholders' Equity (GAAP)	$	2,203,361		$	2,242,139		$	2,130,993		$	2,154,232		$	2,139,877		$	2,222,750		$	2,111,658
Less: Average Preferred Stock		(25,125	)		(25,125	)		(25,125	)		(25,125	)		(25,125	)		(25,125	)		(25,125	)
Less: Average Intangible Assets, Net of Tax		(730,980	)		(732,432	)		(734,007	)		(735,787	)		(737,489	)		(731,706	)		(738,334	)
Average Tangible Common Equity, Net of Tax (Non-GAAP)	$	1,447,256		$	1,484,582		$	1,371,861		$	1,393,320		$	1,377,263		$	1,465,919		$	1,348,199

Net Income Available to Common Stockholders (GAAP)	$	39,456		$	47,472		$	42,010		$	55,898		$	60,393		$	86,928		$	124,003
Plus: Intangible Asset Amortization, Net of Tax		1,399			1,546			1,724			1,724			1,724			2,945			3,458
Tangible Net Income (Non-GAAP)	$	40,855		$	49,018		$	43,734		$	57,622		$	62,117		$	89,873		$	127,461

Return on Tangible Common Equity (Non-GAAP)		11.29	%		13.21	%		12.75	%		16.54	%		18.04	%		12.26	%		18.91	%

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