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

July 23, 2020

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 2020 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2020 net income of $33 million compared to $41.1 million during the same period in 2019. Earnings per share for the period totaled $.62 per share compared to the second quarter of 2019 result of $.83 per share. Year-to-date net income totaled $67.3 million compared to $79.9 million during the six months ended June 30, 2019. Year-to-date earnings per share totaled $1.24 compared to $1.61 during the same period in 2019.

Total assets equaled $13.8 billion as of the quarter-ended June 30, 2020 and loans totaled $9.3 billion. The Corporation’s loan portfolio increased by $1.8 billion, or 23.7 percent, during the past twelve months. Investments increased $696 million, or 33.3 percent, during the same period and now totals $2.8 billion. Total deposits equaled $11 billion as of quarter-end and increased by $2.6 billion, or 31.8 percent, from the same period in 2019. Our acquisition of Monroe Bank & Trust (“MBT”), which closed on September 1, 2019, accounted for $733 million of loan growth and $1.1 billion of deposit growth. Additionally, Payroll Protection Program (“PPP”) loans accounted for $883 million of the period’s loan growth.

The loan to deposit ratio now totals 84.8 percent and loan to asset ratio totals 67.3 percent. As of June 30, 2020, the Corporation’s total risk-based capital ratio equaled 14.2 percent, the common equity tier 1 capital ratio equaled 11.8 percent, and the tangible common equity ratio totaled 9.31 percent. Excluding PPP loans, our tangible common equity ratio totaled 9.93 percent.

The Corporation’s provision expense totaled $21.9 million and net charge-offs for the quarter totaled just $230,000. The allowance for loan losses totaled $121.1 million as of June 30, 2020, up from $81.3 million as of June 30, 2019. The Corporation chose to defer the adoption of the current expected credit loss (“CECL”) model so allowance for loan losses were calculated under the incurred loss method. Allowance for loan losses is 1.30% of total loans, 1.62% including remaining fair value marks with allowance, and 1.79% excluding PPP loans from total loans. The increased year-to-date provision expense of $41.6 million primarily reflects our view of increased credit risk related to the COVID-19 pandemic. Remaining fair value marks on purchased loans is $29.3 million.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our financial results for the second quarter 2020 combine stressed economic conditions and net interest margin pressure with the opportunity to provide our clients access to the SBA’s Payroll Protection Program. Our bankers really leaned into the PPP offering on behalf of businesses throughout our markets because it fits our culture and strategy as a largely commercial bank. Several thousand borrowers looked to the bank to assist their efforts in employee retention in a most challenging time. In the near-term, the magnitude of our participation grew our balance sheet substantially in loans and deposits. The funding affords borrowers time to weather the COVID-19 initiated recession.” Rechin also added, “Despite the reopening of Midwest economies and reducing unemployment, we recorded a $22 million provision reflecting our uncertain economic environment. With stay at home orders in place through much of the quarter, our technology proved to be a key point of service delivery for our clients. The results we achieved in pre-tax, pre-provision earnings, capital growth and efficiency remain at top quartile performance levels.”

Net-interest income for the quarter totaled $93 million, down $859,000 from the first quarter of 2020, as linked quarterly net interest margin declined by 27 basis points totaling 3.19 percent. Yields on earning assets decreased by 66 basis points totaling 3.72 percent and the cost of supporting liabilities decreased by 39 basis points and totaled 53 basis points. The addition of $883 million of PPP loans negatively impacted margin by 6 basis points, but the major driver was the decline in LIBOR from 99 basis points as of March 31, 2020 to just 16 basis points on June 30, 2020.

Non-interest income totaled $26.5 million for the quarter, a $4.9 million increase over the second quarter of 2019, but a $3.3 million decrease from the first quarter of 2020. Gains from the sale of mortgage loans remain strong given the rate environment, while service charges on deposit accounts were less than planned due to higher than normal average balances per account. Non-interest expense totaled $60 million for the quarter compared to $57.6 million in the second quarter of 2019 and $66.2 million in the first quarter of 2020. The primary drivers of the linked quarterly results were a $2.3 million deferral of salary expense related to PPP loan originations, a $1.1 million reduction in bonus accruals and a $1.6 million decrease in processing fees related to termination of a debit card rewards program.

CONFERENCE CALL

First Merchants Corporation will conduct a second quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, July 23, 2020.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's second quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until August 21, 2020. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10144066.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme200723.html during the time of the call. A replay of the web cast will be available until July 23, 2021.

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, 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,
	2020		2019
ASSETS
Cash and cash equivalents	$	229,759	$	128,185
Interest-bearing time deposits	380,021		129,614
Investment securities	2,789,379		2,092,924
Loans held for sale	901		5,854
Loans	9,298,541		7,511,370
Less: Allowance for loan losses	(121,119)		(81,274)
Net loans	9,177,422		7,430,096
Premises and equipment	112,548		91,767
Federal Home Loan Bank stock	28,736		24,588
Interest receivable	57,063		45,150
Goodwill and other intangibles	575,855		466,736
Cash surrender value of life insurance	290,715		226,241
Other real estate owned	7,367		1,131
Tax asset, deferred and receivable	13,126		12,340
Other assets	156,486		83,231
TOTAL ASSETS	$	13,819,378	$	10,737,857
LIABILITIES
Deposits:
Noninterest-bearing	$	2,260,351	$	1,353,165
Interest-bearing	8,705,637		6,966,163
Total Deposits	10,965,988		8,319,328
Borrowings:
Federal funds purchased	—		75,000
Securities sold under repurchase agreements	181,150		119,674
Federal Home Loan Bank advances	400,817		460,042
Subordinated debentures and other borrowings	285,197		138,574
Total Borrowings	867,164		793,290
Interest payable	5,587		6,740
Other liabilities	171,544		116,863
Total Liabilities	12,010,283		9,236,221
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares	125		125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 53,795,500 and 49,456,594 shares	6,724		6,182
Additional paid-in capital	1,002,962		841,365
Retained earnings	735,439		639,362
Accumulated other comprehensive income (loss)	63,845		14,602
Total Stockholders' Equity	1,809,095		1,501,636
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,819,378	$	10,737,857

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,				June 30,
	2020		2019		2020		2019
INTEREST INCOME
Loans receivable:
Taxable	$	87,312	$	92,824	$	183,964	$	183,305
Tax-exempt	5,359		4,244		10,674		8,397
Investment securities:
Taxable	6,147		6,998		13,778		13,093
Tax-exempt	10,019		7,454		19,354		14,325
Deposits with financial institutions	134		784		709		1,659
Federal Home Loan Bank stock	281		335		580		673
Total Interest Income	109,252		112,639		229,059		221,452
INTEREST EXPENSE
Deposits	12,707		23,087		34,455		42,681
Federal funds purchased	2		117		113		210
Securities sold under repurchase agreements	92		342		444		672
Federal Home Loan Bank advances	1,794		1,692		3,568		3,506
Subordinated debentures and other borrowings	1,639		2,123		3,584		4,239
Total Interest Expense	16,234		27,361		42,164		51,308
NET INTEREST INCOME	93,018		85,278		186,895		170,144
Provision for loan losses	21,895		500		41,647		1,700
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	71,123		84,778		145,248		168,444
OTHER INCOME
Service charges on deposit accounts	4,312		5,437		10,282		10,532
Fiduciary and wealth management fees	5,601		3,931		11,586		7,749
Card payment fees	6,097		4,829		12,004		9,655
Net gains and fees on sales of loans	3,674		1,736		7,037		3,031
Derivative hedge fees	1,042		1,487		2,981		2,268
Other customer fees	333		341		731		780
Earnings on cash surrender value of life insurance	1,326		946		2,686		1,935
Net realized gains on sales of available for sale securities	3,068		1,843		7,680		2,983
Other income	1,028		1,064		1,293		1,394
Total Other Income	26,481		21,614		56,280		40,327
OTHER EXPENSES
Salaries and employee benefits	35,698		32,709		74,941		65,737
Net occupancy	5,447		4,469		11,248		9,496
Equipment	4,489		4,117		8,833		7,759
Marketing	2,092		2,752		3,535		3,826
Outside data processing fees	2,618		3,929		6,817		7,613
Printing and office supplies	279		334		666		649
Intangible asset amortization	1,511		1,520		3,025		3,048
FDIC assessments	1,472		678		2,995		1,385
Other real estate owned and foreclosure expenses	684		903		1,189		2,068
Professional and other outside services	1,553		2,376		3,811		4,260
Other expenses	4,146		3,800		9,100		8,367
Total Other Expenses	59,989		57,587		126,160		114,208
INCOME BEFORE INCOME TAX	37,615		48,805		75,368		94,563
Income tax expense	4,623		7,749		8,113		14,690
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	32,992	$	41,056	$	67,255	$	79,873
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.62	$	0.83	$	1.24	$	1.62
Diluted Net Income Available to Common Stockholders	$	0.62	$	0.83	$	1.24	$	1.61
Cash Dividends Paid	$	0.26	$	0.26	$	0.52	$	0.48
Average Diluted Shares Outstanding (in thousands)	53,943		49,550		54,430		49,545

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
NET CHARGE-OFFS	$	230		$	128		$	812		$	978
AVERAGE BALANCES:
Total Assets	$	13,655,322		$	10,499,948		$	13,114,280		$	10,291,205
Total Loans	9,180,610			7,385,315			8,853,591			7,308,146
Total Earning Assets	12,187,442			9,518,892			11,739,936			9,326,579
Total Deposits	10,789,909			8,321,459			10,338,091			8,130,120
Total Stockholders' Equity	1,795,509			1,479,254			1,805,963			1,454,633
FINANCIAL RATIOS:
Return on Average Assets	0.97		%	1.56		%	1.03		%	1.55		%
Return on Average Stockholders' Equity	7.35			11.10			7.45			10.98
Return on Average Common Stockholders' Equity	7.35			11.10			7.45			10.98
Average Earning Assets to Average Assets	89.25			90.66			89.52			90.63
Allowance for Loan Losses as % of Total Loans	1.30			1.08			1.30			1.08
Net Charge-offs as % of Average Loans (Annualized)	0.01			0.01			0.02			0.03
Average Stockholders' Equity to Average Assets	13.15			14.09			13.77			14.13
Tax Equivalent Yield on Average Earning Assets	3.72			4.86			4.04			4.88
Interest Expense/Average Earning Assets	0.53			1.15			0.72			1.10
Net Interest Margin (FTE) on Average Earning Assets	3.19			3.71			3.32			3.78
Efficiency Ratio	47.95			51.00			50.09			51.09
Tangible Common Book Value Per Share	$	23.04		$	21.01		$	23.04		$	21.01

NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2020			2020			2019			2019			2019
Non-Accrual Loans	$	50,102		$	15,649		$	15,949		$	22,728		$	25,635
Renegotiated Loans	1,086			665			841			576			640
Non-Performing Loans (NPL)	51,188			16,314			16,790			23,304			26,275
Other Real Estate Owned and Repossessions	7,409			8,017			7,527			7,156			1,131
Non-Performing Assets (NPA)	58,597			24,331			24,317			30,460			27,406
90+ Days Delinquent	4,981			312			69			82			209
NPAs & 90 Day Delinquent	$	63,578		$	24,643		$	24,386		$	30,542		$	27,615
Allowance for Loan Losses	$	121,119		$	99,454		$	80,284		$	80,571		$	81,274
Quarterly Net Charge-offs	230			582			787			1,303			128
NPAs / Actual Assets %	0.42		%	0.19		%	0.20		%	0.25		%	0.26		%
NPAs & 90 Day / Actual Assets %	0.46		%	0.19		%	0.20		%	0.25		%	0.26		%
NPAs / Actual Loans and OREO %	0.63		%	0.28		%	0.29		%	0.37		%	0.36		%
Allowance for Loan Losses / Actual Loans (%)	1.30		%	1.15		%	0.95		%	0.97		%	1.08		%
Net Charge-offs as % of Average Loans (Annualized)	0.01		%	0.03		%	0.04		%	0.07		%	0.01		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2020		2020		2019		2019		2019
ASSETS
Cash and cash equivalents	$	229,759	$	127,731	$	177,201	$	202,383	$	128,185
Interest-bearing time deposits	380,021		132,944		118,263		230,101		129,614
Investment securities	2,789,379		2,697,954		2,596,063		2,489,420		2,092,924
Loans held for sale	901		5,039		9,037		7,910		5,854
Loans	9,298,541		8,606,849		8,459,310		8,299,260		7,511,370
Less: Allowance for loan losses	(121,119)		(99,454)		(80,284)		(80,571)		(81,274)
Net loans	9,177,422		8,507,395		8,379,026		8,218,689		7,430,096
Premises and equipment	112,548		114,045		113,055		113,446		91,767
Federal Home Loan Bank stock	28,736		28,736		28,736		28,736		24,588
Interest receivable	57,063		47,489		48,901		45,923		45,150
Goodwill and other intangibles	575,855		577,366		578,880		579,751		466,736
Cash surrender value of life insurance	290,715		289,574		288,206		286,747		226,241
Other real estate owned	7,367		7,972		7,527		7,156		1,131
Tax asset, deferred and receivable	13,126		9,497		12,165		15,187		12,340
Other assets	156,486		147,776		100,194		99,612		83,231
TOTAL ASSETS	$	13,819,378	$	12,693,518	$	12,457,254	$	12,325,061	$	10,737,857
LIABILITIES
Deposits:
Noninterest-bearing	$	2,260,351	$	1,688,205	$	1,736,396	$	1,777,365	$	1,353,165
Interest-bearing	8,705,637		8,182,279		8,103,560		7,988,086		6,966,163
Total Deposits	10,965,988		9,870,484		9,839,956		9,765,451		8,319,328
Borrowings:
Federal funds purchased	—		47,000		55,000		—		75,000
Securities sold under repurchase agreements	181,150		183,317		187,946		191,603		119,674
Federal Home Loan Bank advances	400,817		480,995		351,072		354,609		460,042
Subordinated debentures and other borrowings	285,197		128,741		138,685		138,630		138,574
Total Borrowings	867,164		840,053		732,703		684,842		793,290
Interest payable	5,587		7,746		6,754		7,855		6,740
Other liabilities	171,544		197,275		91,404		117,901		116,863
Total Liabilities	12,010,283		10,915,558		10,670,817		10,576,049		9,236,221
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding	125		125		125		125		125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	6,724		6,719		6,921		6,918		6,182
Additional paid-in capital	1,002,962		1,000,942		1,054,997		1,053,148		841,365
Retained earnings	735,439		716,518		696,520		663,173		639,362
Accumulated other comprehensive income (loss)	63,845		53,656		27,874		25,648		14,602
Total Stockholders' Equity	1,809,095		1,777,960		1,786,437		1,749,012		1,501,636
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,819,378	$	12,693,518	$	12,457,254	$	12,325,061	$	10,737,857

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2020			2020			2019			2019			2019
INTEREST INCOME
Loans receivable:
Taxable	$	87,312		$	96,652		$	102,617		$	96,850		$	92,824
Tax-exempt	5,359			5,315			4,671			4,500			4,244
Investment securities:
Taxable	6,147			7,631			7,993			6,729			6,998
Tax-exempt	10,019			9,335			8,995			8,335			7,454
Deposits with financial institutions	134			575			1,203			1,363			784
Federal Home Loan Bank stock	281			299			342			355			335
Total Interest Income	109,252			119,807			125,821			118,132			112,639
INTEREST EXPENSE
Deposits	12,707			21,748			24,074			24,830			23,087
Federal funds purchased	2			111			26			15			117
Securities sold under repurchase agreements	92			352			367			385			342
Federal Home Loan Bank advances	1,794			1,774			1,776			1,894			1,692
Subordinated debentures and other borrowings	1,639			1,945			1,994			2,076			2,123
Total Interest Expense	16,234			25,930			28,237			29,200			27,361
NET INTEREST INCOME	93,018			93,877			97,584			88,932			85,278
Provision for loan losses	21,895			19,752			500			600			500
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	71,123			74,125			97,084			88,332			84,778
OTHER INCOME
Service charges on deposit accounts	4,312			5,970			6,312			6,107			5,437
Fiduciary and wealth management fees	5,601			5,985			5,384			4,429			3,931
Card payment fees	6,097			5,907			5,430			5,158			4,829
Net gains and fees on sales of loans	3,674			3,363			2,633			2,227			1,736
Derivative hedge fees	1,042			1,939			1,405			1,684			1,487
Other customer fees	333			398			434			450			341
Earnings on cash surrender value of life insurance	1,326			1,360			1,458			1,144			946
Net realized gains on sales of available for sale securities	3,068			4,612			1,039			393			1,843
Other income	1,028			265			150			524			1,064
Total Other Income	26,481			29,799			24,245			22,116			21,614
OTHER EXPENSES
Salaries and employee benefits	35,698			39,243			39,358			38,942			32,709
Net occupancy	5,447			5,801			5,311			4,777			4,469
Equipment	4,489			4,344			4,429			4,030			4,117
Marketing	2,092			1,443			1,492			1,332			2,752
Outside data processing fees	2,618			4,199			4,428			4,435			3,929
Printing and office supplies	279			387			484			312			334
Intangible asset amortization	1,511			1,514			1,590			1,356			1,520
FDIC assessments	1,472			1,523			—			(668)			678
Other real estate owned and foreclosure expenses	684			505			66			294			903
Professional and other outside services	1,553			2,258			2,899			8,251			2,376
Other expenses	4,146			4,954			5,144			4,293			3,800
Total Other Expenses	59,989			66,171			65,201			67,354			57,587
INCOME BEFORE INCOME TAX	37,615			37,753			56,128			43,094			48,805
Income tax expense	4,623			3,490			8,298			6,337			7,749
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	32,992		$	34,263		$	47,830		$	36,757		$	41,056
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.62		$	0.63		$	0.87		$	0.71		$	0.83
Diluted Net Income Available to Common Stockholders	$	0.62		$	0.62		$	0.87		$	0.71		$	0.83
Cash Dividends Paid	$	0.26		$	0.26		$	0.26		$	0.26		$	0.26
Average Diluted Shares Outstanding (in thousands)	53,943			54,918			55,520			51,570			49,550
FINANCIAL RATIOS:
Return on Average Assets	0.97		%	1.09		%	1.53		%	1.30		%	1.56		%
Return on Average Stockholders' Equity	7.35			7.55			10.82			9.21			11.10
Return on Average Common Stockholders' Equity	7.35			7.55			10.82			9.21			11.10
Average Earning Assets to Average Assets	89.25			89.81			89.71			90.37			90.66
Allowance for Loan Losses as % of Total Loans	1.30			1.15			0.95			0.97			1.08
Net Charge-offs as % of Average Loans (Annualized)	0.01			0.03			0.04			0.07			0.01
Average Stockholders' Equity to Average Assets	13.15			14.45			14.17			14.16			14.09
Tax Equivalent Yield on Average Earning Assets	3.72			4.38			4.63			4.77			4.86
Interest Expense/Average Earning Assets	0.53			0.92			1.01			1.15			1.15
Net Interest Margin (FTE) on Average Earning Assets	3.19			3.46			3.62			3.62			3.71
Efficiency Ratio	47.95			52.17			51.07			57.60			51.00
Tangible Common Book Value Per Share	$	23.04		$	22.46		$	21.94		$	21.26		$	21.01

LOANS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2020		2020		2019		2019		2019
Commercial and industrial loans	$	2,898,329	$	2,199,226	$	2,109,879	$	2,034,311	$	1,877,042
Agricultural production financing and other loans to farmers	93,838		87,421		93,861		90,462		83,452
Real estate loans:
Construction	640,560		643,674		787,568		670,138		624,548
Commercial and farmland	3,239,998		3,268,168		3,052,698		3,144,649		2,821,689
Residential	1,145,187		1,121,556		1,143,217		1,155,403		993,802
Home equity	532,314		570,398		588,984		601,335		548,006
Individuals' loans for household and other personal expenditures	123,611		129,765		135,989		131,246		98,384
Public finance and other commercial loans	624,704		586,641		547,114		471,716		464,447
Loans	9,298,541		8,606,849		8,459,310		8,299,260		7,511,370
Allowance for loan losses	(121,119)		(99,454)		(80,284)		(80,571)		(81,274)
NET LOANS	$	9,177,422	$	8,507,395	$	8,379,026	$	8,218,689	$	7,430,096

DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2020		2020		2019		2019		2019
Demand deposits	$	6,288,360	$	5,293,200	$	5,250,568	$	5,183,971	$	4,309,473
Savings deposits	3,278,156		2,962,821		2,896,177		2,808,745		2,358,720
Certificates and other time deposits of $100,000 or more	607,474		694,062		736,843		731,693		720,536
Other certificates and time deposits	669,119		717,723		741,759		811,780		729,392
Brokered deposits	122,879		202,678		214,609		229,262		201,207
TOTAL DEPOSITS	$	10,965,988	$	9,870,484	$	9,839,956	$	9,765,451	$	8,319,328

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	June 30, 2020						June 30, 2019
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	378,489	$	134	0.14	%	$	144,626	$	784	2.17	%
Federal Home Loan Bank stock	28,736		281		3.91		24,588		335		5.45
Investment Securities: (1)
Taxable	1,282,080		6,147		1.92		1,054,068		6,998		2.66
Tax-Exempt (2)	1,317,527		12,682		3.85		910,295		9,435		4.15
Total Investment Securities	2,599,607		18,829		2.90		1,964,363		16,433		3.35
Loans held for sale	12,630		131		4.15		11,430		127		4.44
Loans: (3)
Commercial	6,890,010		69,463		4.03		5,419,169		74,638		5.51
Real Estate Mortgage	887,257		10,122		4.56		766,528		8,686		4.53
Installment	724,165		7,596		4.20		677,133		9,373		5.54
Tax-Exempt (2)	666,548		6,784		4.07		511,055		5,372		4.20
Total Loans	9,180,610		94,096		4.10		7,385,315		98,196		5.32
Total Earning Assets	12,187,442		113,340		3.72	%	9,518,892		115,748		4.86	%
Net unrealized gain (loss) on securities available for sale	56,807						12,841
Allowance for loan losses	(106,858)						(81,691)
Cash and cash equivalents	303,491						130,987
Premises and equipment	113,528						91,563
Other assets	1,100,912						827,356
Total Assets	$	13,655,322					$	10,499,948
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	3,951,819	$	4,186	0.42	%	$	2,935,925	$	8,541	1.16	%
Money market deposits	1,673,104		1,696		0.41		1,220,020		3,509		1.15
Savings deposits	1,521,312		596		0.16		1,164,901		2,525		0.87
Certificates and other time deposits	1,498,002		6,229		1.66		1,652,203		8,512		2.06
Total Interest-bearing Deposits	8,644,237		12,707		0.59		6,973,049		23,087		1.32
Borrowings	909,258		3,527		1.55		613,446		4,274		2.79
Total Interest-bearing Liabilities	9,553,495		16,234		0.68		7,586,495		27,361		1.44
Noninterest-bearing deposits	2,145,672						1,348,410
Other liabilities	160,646						85,789
Total Liabilities	11,859,813						9,020,694
Stockholders' Equity	1,795,509						1,479,254
Total Liabilities and Stockholders' Equity	$	13,655,322	16,234				$	10,499,948	27,361
Net Interest Income (FTE)			$	97,106					$	88,387
Net Interest Spread (FTE) (4)					3.04	%					3.42	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					3.72	%					4.86	%
Interest Expense / Average Earning Assets					0.53	%					1.15	%
Net Interest Margin (FTE) (5)					3.19	%					3.71	%
(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 2020 and 2019. These totals equal $4,088 and $3,109 for the three months ended June 30, 2020 and 2019, 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, 2020						June 30, 2019
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
Assets:
Federal Funds Sold
Interest-bearing time deposits	$	269,174	$	709	0.53	%	$	145,277	$	1,659	2.28	%
Federal Home Loan Bank stock	28,736		580		4.04		24,588		673		5.47
Investment Securities: (1)
Taxable	1,325,313		13,778		2.08		978,654		13,093		2.68
Tax-Exempt (2)	1,263,122		24,499		3.88		869,914		18,133		4.17
Total Investment Securities	2,588,435		38,277		2.96		1,848,568		31,226		3.38
Loans held for sale	14,924		324		4.34		10,697		239		4.47
Loans: (3)
Commercial	6,562,673		146,415		4.46		5,364,884		147,394		5.49
Real Estate Mortgage	878,956		20,524		4.67		755,070		17,008		4.51
Installment	741,889		16,701		4.50		671,125		18,664		5.56
Tax-Exempt (2)	655,149		13,511		4.12		506,370		10,629		4.20
Total Loans	8,853,591		197,475		4.46		7,308,146		193,934		5.31
Total Earning Assets	11,739,936		237,041		4.04	%	9,326,579		227,492		4.88	%
Net unrealized gain on securities available for sale	52,732						3,963
Allowance for loan losses	(94,009)						(81,301)
Cash and cash equivalents	231,624						124,143
Premises and equipment	113,670						92,395
Other assets	1,070,327						825,426
Total Assets	$	13,114,280					$	10,291,205
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits	$	3,770,530	$	12,461	0.66	%	$	2,813,541	$	15,560	1.11	%
Money market deposits	1,604,474		5,479		0.68		1,179,765		6,291		1.07
Savings deposits	1,473,183		2,424		0.33		1,157,852		4,792		0.83
Certificates and other time deposits	1,582,322		14,091		1.78		1,609,130		16,038		1.99
Total Interest-bearing Deposits	8,430,509		34,455		0.82		6,760,288		42,681		1.26
Borrowings	828,721		7,709		1.86		624,192		8,627		2.76
Total Interest-bearing Liabilities	9,259,230		42,164		0.91		7,384,480		51,308		1.39
Noninterest-bearing deposits	1,907,582						1,369,832
Other liabilities	141,505						82,260
Total Liabilities	11,308,317						8,836,572
Stockholders' Equity	1,805,963						1,454,633
Total Liabilities and Stockholders' Equity	$	13,114,280	42,164				$	10,291,205	51,308
Net Interest Income (FTE)			$	194,877					$	176,184
Net Interest Spread (FTE) (4)					3.13	%					3.49	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					4.04	%					4.88	%
Interest Expense / Average Earning Assets					0.72	%					1.10	%
Net Interest Margin (FTE) (5)					3.32	%					3.78	%
(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 2020 and 2019. These totals equal $7,982 and $6,040 for the six months ended June 30, 2020 and 2019, 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.