frme-20240725

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): July 25, 2024

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)


Indiana
(State or other jurisdiction of incorporation)
001-41342			35-1544218
(Commission File Number)			(IRS Employer Identification No.)

200 East Jackson Street

P.O. Box 792

Muncie, IN 47305-2814

(Address of principal executive offices, including zip code)

(765) 747-1500

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/100th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A	FRMEP	The Nasdaq Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 25, 2024, First Merchants Corporation issued a press release to report its financial results for the second quarter ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit No. 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) Not applicable.

(b) Not applicable.

(d) Exhibits.

Exhibit 99.1 Press Release, dated July 25, 2024, issued by First Merchants Corporation

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


									First Merchants Corporation
									(Registrant)

									By: /s/ Michele M. Kawiecki Michele M. Kawiecki Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)
Dated: July 25, 2024

EXHIBIT INDEX

Exhibit No. Description

99.1 Press Release, dated July 25, 2024, issued by First Merchants Corporation

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

Document

N / E / W / S R / E / L / E / A / S / E

July 25, 2024

FOR IMMEDIATE RELEASE

For more information, contact:

Nicole M. Weaver, Vice President and Director of Corporate Administration

765-521-7619

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES SECOND QUARTER 2024 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME)

Second Quarter 2024 Highlights:

• 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 (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)	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			(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 expenses1,2	—		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 expenses1,2	—		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		%