FIRST MERCHANTS CORP - FORM 8-K/A - EX-99.1 - FIRST MERCHANTS CORP - 3RD QTR 2014 PRESS RELEASE

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8-K/A - FIRST MERCHANTS CORP - 3RD QTR 2014 EARNINGS RELEASE - FIRST MERCHANTS CORP	f8k3rdqtr2014earningsrelea.htm

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

October 23, 2014

FOR IMMEDIATE RELEASE

For more information, contact:

David L. Ortega, First Vice President/Director of Investor Relations

765-378-8937

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES RECORD THIRD QUARTER 2014 EARNINGS

First Merchants Corporation (NASDAQ - FRME) has reported third quarter 2014 earnings per share of $.45, compared to $.35 during the same period in 2013, a 29 percent increase. Net income available to common stockholders totaled a record $16.1 million, during the quarter, compared to $10 million in 2013. Year-to-date earnings per share totaled $1.24 in 2014, compared to $1.07 in 2013, nearly a 16 percent increase. Year-to-date 2014 net income totaled $44.9 million, compared to $30.9 million in 2013.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our return on assets improved to 1.16 percent during the quarter and virtually every key metric improved on a quarter-over-quarter basis. Loans increased, asset quality improved and the efficiency ratio improved driven by balance sheet growth, stabilized margins, strong fee income and controlled expenses.” Rechin also added, “Our momentum continues as our teams are executing on 2014 initiatives, and executive management is focused on refining our plans for 2015 and 2016.”

Total assets equaled $5.6 billion as of quarter-end and total loans were $3.8 billion, an increase of $847 million, or 29 percent over the same period in 2013. Our CFS Bancorp acquisition in November 2013 accounted for $597 million of growth and $250 million was the result of organic growth. On a linked basis, loans increased by $50 million, as commercial and industrial loans increased by $43 million.

Net interest income totaled $47.9 million for the quarter and net-interest margin totaled 3.98 percent as yields on earning assets totaled 4.41 percent and the cost of supporting liabilities totaled .43 percent. Fair value accretion of $3.5 million was included in the quarterly results. When normalized for fair value accretion, net interest margin totaled 3.71 percent. Year-to-date net interest income totaled $139.9 million, compared to $113.1 million in 2013, as net interest margin totaled 3.95 percent. When adjusted for year-to-date fair market value accretion of $7.4 million, net interest margin totaled 3.75 percent.

Our CFS Bancorp acquisition resulted in significant variances in both non-interest income and non-interest expenses. Non-interest income totaled $18.3 million during the quarter, compared to $11.8 million in 2013. Year-to-date non-interest income totaled $49.4 million, compared to $39.7 million in 2013. Non-interest expense totaled $42.6 million during the quarter, up from $34.2 million in the third quarter of 2013. Year-to-date non-interest expense totaled $126.9 million, compared to $102.7 million in 2013. On a linked basis, non-interest income improved by $2.4 million due to increased cash surrender value of life insurance gains of $871,000, increased derivative income of $656,000 and increased gains from the sale of mortgages totaling $299,000. On a linked basis, non-interest expense increased by $1.3 million due primarily to incentive and benefit accruals of $743,000, fixed asset write downs of $305,000 and increased marketing expense of $281,000.

Non-performing assets declined to $64.8 million, or 1.16 percent of assets. Provision expense totaled $1.6 million for the third quarter of 2014, compared to $1.5 million in 2013. Net charge-offs totaled $4.4 million for the third quarter, up from $3.5 million in the third quarter of 2013. Year-to-date provision expense totaled $1.6 million versus $3.9 million of net charge-offs. The allowance for loan losses totaled $65.6 million and our remaining fair value mark totaled $35.5 million.

As of September 30, 2014, the Corporation's total risk-based capital equaled 15.21 percent, Tier 1 common risk-based capital equaled 11.16 percent and tangible common equity ratio totaled 9.05 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, October 23, 2014.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until October 23, 2015. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 10053524.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme141023.html during the time of the call.

During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

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 is comprised of First Merchants Bank, N.A., which also operates as Lafayette Bank & Trust, Commerce National Bank, and First Merchants Trust Company as divisions of First Merchants Bank, N.A. First Merchants Corporation also operates First Merchants Insurance Group, a full-service property casualty, personal lines, and healthcare insurance agency.

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.

* * * *



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,
	2014			2013
ASSETS
Cash and cash equivalents	$	74,237		$	92,341
Interest-bearing time deposits	24,171			18,875
Investment securities	1,189,814			914,135
Loans held for sale	6,423			5,312
Loans	3,772,467			2,925,457
Less: Allowance for loan losses	(65,596		)	(66,224		)
Net loans	3,706,871			2,859,233
Premises and equipment	74,105			54,386
Federal Reserve and Federal Home Loan Bank stock	43,127			32,790
Interest receivable	19,455			16,171
Core deposit intangibles and goodwill	200,991			148,376
Cash surrender value of life insurance	165,423			127,322
Other real estate owned	14,540			12,052
Tax asset, deferred and receivable	41,131			31,385
Other assets	31,095			13,533
TOTAL ASSETS	$	5,591,383		$	4,325,911
LIABILITIES
Deposits:
Noninterest-bearing	$	939,540		$	790,174
Interest-bearing	3,370,583			2,465,672
Total Deposits	4,310,123			3,255,846
Borrowings:
Federal funds purchased	61,428			115,938
Securities sold under repurchase agreements	117,892			123,935
Federal Home Loan Bank advances	255,423			172,292
Subordinated debentures and term loans	126,874			111,849
Total Borrowings	561,617			524,014
Interest payable	3,819			1,155
Other liabilities	31,271			31,427
Total Liabilities	4,906,830			3,812,442
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding - 0 and 34,043 shares				34,043
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 -- 50,000,000 shares
Issued and outstanding - 36,074,246 and 28,825,465 shares	4,509			3,603
Additional paid-in capital	395,582			258,350
Retained earnings	280,187			233,546
Accumulated other comprehensive income (loss)	4,150			(16,198		)
Total Stockholders' Equity	684,553			513,469
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,591,383		$	4,325,911



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended					Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts)	September 30,					September 30,
	2014		2013			2014		2013
INTEREST INCOME
Loans receivable:
Taxable	$	43,981	$	33,548		$	128,329	$	104,725
Tax-exempt	61		85			180		315
Investment securities:
Taxable	5,046		3,876			14,902		11,071
Tax-exempt	3,683		2,840			10,691		7,809
Deposits with financial institutions	18		18			76		99
Federal Reserve and Federal Home Loan Bank stock	501		369			1,648		1,108
Total Interest Income	53,290		40,736			155,826		125,127
INTEREST EXPENSE
Deposits	2,853		2,213			8,276		7,703
Federal funds purchased	102		72			174		84
Securities sold under repurchase agreements	74		192			457		594
Federal Home Loan Bank advances	734		506			2,092		1,427
Subordinated debentures and term loans	1,661		731			4,950		2,189
Total Interest Expense	5,424		3,714			15,949		11,997
NET INTEREST INCOME	47,866		37,022			139,877		113,130
Provision for loan losses	1,600		1,533			1,600		5,632
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	46,266		35,489			138,277		107,498
OTHER INCOME
Service charges on deposit accounts	4,119		3,120			11,768		8,761
Fiduciary activities	2,152		1,986			6,724		6,357
Other customer fees	3,991		2,899			11,773		8,495
Commission income	1,723		1,636			5,877		5,556
Earnings on cash surrender value of life insurance	1,524		611			2,925		1,921
Net gains and fees on sales of loans	1,458		1,673			3,340		6,508
Net realized gains on sales of available for sale securities	910					2,335		487
Other income	2,417		(125		)	4,671		1,651
Total Other Income	18,294		11,800			49,413		39,736
OTHER EXPENSES
Salaries and employee benefits	24,173		20,616			72,904		61,943
Net occupancy	3,401		2,430			10,543		7,299
Equipment	2,187		1,852			7,022		5,368
Marketing	1,070		559			2,628		1,561
Outside data processing fees	1,853		1,515			5,723		4,386
Printing and office supplies	350		320			1,201		962
Core deposit amortization	592		383			1,776		1,153
FDIC assessments	920		677			2,843		2,095
Other real estate owned and credit-related expenses	2,618		1,648			6,988		4,993
Professional and other outside services	1,573		1,444			4,483		4,936
Other expenses	3,839		2,775			10,804		7,965
Total Other Expenses	42,576		34,219			126,915		102,661
INCOME BEFORE INCOME TAX	21,984		13,070			60,775		44,573
Income tax expense	5,862		2,667			15,873		11,490
NET INCOME	16,122		10,403			44,902		33,083
Preferred stock dividends			(430		)			(2,139		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	16,122	$	9,973		$	44,902	$	30,944
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.45	$	0.35		$	1.25	$	1.08
Diluted Net Income Available to Common Stockholders	$	0.45	$	0.35		$	1.24	$	1.07
Cash Dividends Paid	$	0.08	$	0.05		$	0.21	$	0.13
Average Diluted Shares Outstanding (in thousands)	36,329		29,081			36,295		29,026



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
NET CHARGE OFF'S	$	4,371		$	3,511		$	3,874		$	8,774

AVERAGE BALANCES:
Total Assets	$	5,578,704		$	4,286,982		$	5,500,281		$	4,288,645
Total Loans	3,753,690			2,918,207			3,683,936			2,912,700
Total Earning Assets	5,010,877			3,888,646			4,921,105			3,885,061
Total Deposits	4,288,788			3,295,369			4,290,157			3,332,589
Total Stockholders' Equity	679,306			508,034			662,408			528,156

FINANCIAL RATIOS:
Return on Average Assets	1.16		%	0.93		%	1.09		%	0.96		%
Return on Average Stockholders' Equity	9.49			7.85			9.04			7.81
Return on Average Common Stockholders' Equity	9.50			8.42			9.04			8.76
Average Earning Assets to Average Assets	89.82			90.71			89.47			90.59
Allowance for Loan Losses as % of Total Loans	1.74			2.26			1.74			2.26
Net Charge Off's as % of Average Loans (Annualized)	0.47			0.48			0.14			0.4
Average Stockholders' Equity to Average Assets	12.18			11.85			12.04			12.32
Tax Equivalent Yield on Earning Assets	4.41			4.35			4.38			4.44
Cost of Supporting Liabilities	0.43			0.38			0.43			0.41
Net Interest Margin (FTE) on Earning Assets	3.98			3.97			3.95			4.03
Tangible Book Value Per Share	$	13.53		$	11.56		$	13.53		$	11.56



NON-PERFORMING ASSETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Non-Accrual Loans	$	49,104		$	51,289		$	55,686		$	56,402		$	34,992
Renegotiated Loans	1,171			1,359			378			3,048			3,269
Non-Performing Loans (NPL)	50,275			52,648			56,064			59,450			38,261
Other Real Estate Owned	14,540			18,621			21,077			22,246			12,052
Non-Performing Assets (NPA)	64,815			71,269			77,141			81,696			50,313
90+ Days Delinquent	831			1,135			1,709			1,350			837
NPAS & 90 Day Delinquent	$	65,646		$	72,404		$	78,850		$	83,046		$	51,150

Loan Loss Reserve	$	65,596		$	68,367		$	69,583		$	67,870		$	66,224
Quarterly Net Charge-offs	4,371			1,216			(1,713		)	(630		)	3,511
NPAs / Actual Assets %	1.16		%	1.27		%	1.41		%	1.50		%	1.16		%
NPAs & 90 Day / Actual Assets %	1.17		%	1.29		%	1.45		%	1.53		%	1.18		%
NPAs / Actual Loans and OREO %	1.71		%	1.90		%	2.12		%	2.23		%	1.71		%
Loan Loss Reserves / Actual Loans (%)	1.74		%	1.83		%	1.92		%	1.87		%	2.26		%
Net Charge Off's as % of Average Loans (Annualized)	0.47		%	0.13		%	(0.19		)%	(0.08		)%	0.48		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
ASSETS
Cash and cash equivalents	$	74,237		$	115,891		$	112,920		$	109,434		$	92,341
Interest-bearing time deposits	24,171			27,856			37,078			55,069			18,875
Investment securities	1,189,814			1,214,087			1,149,977			1,095,579			914,135
Loans held for sale	6,423			7,370			6,586			5,331			5,312
Loans	3,772,467			3,722,733			3,616,627			3,632,409			2,925,457
Less: Allowance for loan losses	(65,596		)	(68,367		)	(69,583		)	(67,870		)	(66,224		)
Net loans	3,706,871			3,654,366			3,547,044			3,564,539			2,859,233
Premises and equipment	74,105			74,856			74,847			74,454			54,386
Federal Reserve and Federal Home Loan Bank stock	43,127			43,127			38,990			38,990			32,790
Interest receivable	19,455			18,341			18,001			18,672			16,171
Core deposit intangibles and goodwill	200,991			201,583			202,175			202,766			148,376
Cash surrender value of life insurance	165,423			165,974			165,320			164,571			127,322
Other real estate owned	14,540			18,621			21,077			22,246			12,052
Tax asset, deferred and receivable	41,131			44,622			50,684			56,614			31,385
Other assets	31,095			28,426			28,237			28,997			13,533
TOTAL ASSETS	$	5,591,383		$	5,615,120		$	5,452,936		$	5,437,262		$	4,325,911
LIABILITIES
Deposits:
Noninterest-bearing	939,540			917,825			936,741			930,772			790,174
Interest-bearing	3,370,583			3,411,785			3,346,438			3,300,696			2,465,672
Total Deposits	4,310,123			4,329,610			4,283,179			4,231,468			3,255,846
Borrowings:
Federal funds purchased	61,428			100,000			48,357			125,645			115,938
Securities sold under repurchase agreements	117,892			133,137			137,381			148,672			123,935
Federal Home Loan Bank advances	255,423			220,765			170,887			122,140			172,292
Subordinated debentures and term loans	126,874			126,874			127,172			126,807			111,849
Total Borrowings	561,617			580,776			483,797			523,264			524,014
Interest payable	3,819			2,489			3,192			1,771			1,155
Other liabilities	31,271			31,649			30,657			45,836			31,427
Total Liabilities	4,906,830			4,944,524			4,800,825			4,802,339			3,812,442
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value, $1,000 liquidation value:
Authorized -- 500,000 shares
Senior Non-Cumulative Perpetual Preferred Stock, Series B
Issued and outstanding													34,043
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 -- 50,000,000 shares
Issued and outstanding	4,509			4,507			4,502			4,490			3,603
Additional paid-in capital	395,582			394,774			393,765			393,783			258,350
Retained earnings	280,187			266,980			254,735			242,935			233,546
Accumulated other comprehensive income (loss)	4,150			4,210			(1,016		)	(6,410		)	(16,198		)
Total Stockholders' Equity	684,553			670,596			652,111			634,923			513,469
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,591,383		$	5,615,120		$	5,452,936		$	5,437,262		$	4,325,911



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
INTEREST INCOME
Loans receivable:
Taxable	$	43,981		$	42,323		$	42,025		$	38,027		$	33,548
Tax-exempt	61			58			61			78			85
Investment securities:
Taxable	5,046			5,046			4,810			4,143			3,876
Tax-exempt	3,683			3,570			3,438			3,020			2,840
Deposits with financial institutions	18			35			23			59			18
Federal Reserve and Federal Home Loan Bank stock	501			495			652			380			369
Total Interest Income	53,290			51,527			51,009			45,707			40,736
INTEREST EXPENSE
Deposits	2,853			2,874			2,549			2,350			2,213
Federal funds purchased	102			23			49			18			72
Securities sold under repurchase agreements	74			187			196			193			192
Federal Home Loan Bank advances	734			676			682			669			506
Subordinated debentures and term loans	1,661			1,648			1,641			1,342			731
Total Interest Expense	5,424			5,408			5,117			4,572			3,714
NET INTEREST INCOME	47,866			46,119			45,892			41,135			37,022
Provision for loan losses	1,600									1,016			1,533
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	46,266			46,119			45,892			40,119			35,489
OTHER INCOME
Service charges on deposit accounts	4,119			4,098			3,551			3,639			3,120
Fiduciary activities	2,152			2,360			2,212			2,237			1,986
Other customer fees	3,991			4,049			3,733			3,371			2,899
Commission income	1,723			1,886			2,268			1,585			1,636
Earnings on cash surrender value of life insurance	1,524			653			748			692			611
Net gains and fees on sales of loans	1,458			1,159			723			1,003			1,673
Net realized gains on sales of available for sale securities	910			844			581
Other income	2,417			884			1,370			2,546			(125		)
Total Other Income	18,294			15,933			15,186			15,073			11,800
OTHER EXPENSES
Salaries and employee benefits	24,173			23,430			25,301			23,470			20,616
Net occupancy	3,401			3,204			3,938			2,992			2,430
Equipment	2,187			2,096			2,739			2,369			1,852
Marketing	1,070			789			769			675			559
Outside data processing fees	1,853			2,039			1,831			1,205			1,515
Printing and office supplies	350			393			458			378			320
Core deposit amortization	592			592			592			496			383
FDIC assessments	920			863			1,060			767			677
Other real estate owned and credit-related expenses	2,618			2,613			1,757			1,668			1,648
Professional and other outside services	1,573			1,531			1,379			3,361			1,444
Other expenses	3,839			3,700			3,265			3,177			2,775
Total Other Expenses	42,576			41,250			43,089			40,558			34,219
INCOME BEFORE INCOME TAX	21,984			20,802			17,989			14,634			13,070
Income tax expense	5,862			5,642			4,369			3,187			2,667
NET INCOME	16,122			15,160			13,620			11,447			10,403
Preferred stock dividends										(241		)	(430		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	16,122		$	15,160		$	13,620		$	11,206		$	9,973

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.45		$	0.42		$	0.38		$	0.34		$	0.35
Diluted Net Income Available to Common Stockholders	$	0.45		$	0.41		$	0.38		$	0.34		$	0.35
Cash Dividends Paid	$	0.08		$	0.08		$	0.05		$	0.05		$	0.05
Average Diluted Shares Outstanding (in thousands)	36,329			36,294			36,261			32,913			29,081
FINANCIAL RATIOS:
Return on Average Assets	1.16		%	1.10		%	1.01		%	0.91		%	0.93		%
Return on Average Stockholders' Equity	9.49			9.15			8.45			7.78			7.85
Return on Average Common Stockholders' Equity	9.50			9.15			8.45			8.05			8.42
Average Earning Assets to Average Assets	89.82			89.57			89.00			89.08			90.71
Allowance for Loan Losses as % of Total Loans	1.74			1.83			1.92			1.87			2.26
Net Charge Off's as % of Average Loans (Annualized)	0.47			0.13			(0.19		)	(0.08		)	0.48
Average Stockholders' Equity to Average Assets	12.18			12.00			11.94			11.64			11.85
Tax Equivalent Yield on Earning Assets	4.41			4.33			4.40			4.30			4.35
Cost of Supporting Liabilities	0.43			0.44			0.43			0.41			0.38
Net Interest Margin (FTE) on Earning Assets	3.98			3.89			3.97			3.89			3.97
Tangible Book Value Per Share	$	13.53		$	13.14		$	12.63		$	12.17		$	11.56



LOANS
(Dollars In Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Commercial and industrial loans	$	900,970		$	857,844		$	787,390		$	761,705		$	652,356
Agricultural production financing and other loans to farmers	99,649			102,270			99,226			114,348			98,489
Real estate loans:
Construction	178,213			165,388			155,117			177,082			149,875
Commercial and farmland	1,603,698			1,621,436			1,606,735			1,611,809			1,264,180
Residential	625,609			629,162			626,202			616,385			452,277
Home Equity	269,952			261,811			256,790			255,223			206,816
Individuals' loans for household and other personal expenditures	66,832			61,533			61,742			69,783			70,380
Lease financing receivables, net of unearned income	1,208			1,231			1,378			1,545			1,815
Other loans	26,336			22,058			22,047			24,529			29,269
Loans	3,772,467			3,722,733			3,616,627			3,632,409			2,925,457
Allowance for loan losses	(65,596		)	(68,367		)	(69,583		)	(67,870		)	(66,224		)
NET LOANS	$	3,706,871		$	3,654,366		$	3,547,044		$	3,564,539		$	2,859,233



DEPOSITS
(Dollars In Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2014		2014		2014		2013		2013
Demand deposits	$	1,947,040	$	2,041,183	$	1,966,895	$	2,018,650	$	1,610,662
Savings deposits	1,281,994		1,251,277		1,282,702		1,257,994		937,521
Certificates and other time deposits of $100,000 or more	241,163		251,585		265,683		272,660		190,866
Other certificates and time deposits	502,965		534,344		568,160		595,110		422,151
Brokered deposits	336,961		251,221		199,739		87,054		94,646
TOTAL DEPOSITS	$	4,310,123	$	4,329,610	$	4,283,179	$	4,231,468	$	3,255,846



NET INTEREST INCOME
(Dollars in Thousands)	For the Three Months Ended
	September 30, 2014							September 30, 2013
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	28,549		$	18	0.3	%	$	24,497		$	18	0.3	%
Federal Reserve and Federal Home Loan Bank stock	43,127			501		4.6		32,790			369		4.5
Investment Securities: ⁽¹⁾
Taxable	776,270			5,046		2.6		615,878			3,876		2.5
Tax-Exempt ⁽²⁾	409,241			5,665		5.5		297,274			4,368		5.9
Total Investment Securities	1,185,511			10,711		3.6		913,152			8,244		3.6
Loans held for sale	9,393			152		6.5		11,063			158		5.7
Loans: ⁽³⁾
Commercial	2,905,920			34,344		4.7		2,309,226			26,417		4.6
Real Estate Mortgage	455,714			5,025		4.4		274,345			3,049		4.4
Installment	369,797			4,460		4.8		308,520			3,924		5.1
Tax-Exempt ⁽²⁾	12,866			94		2.9		15,053			131		3.5
Total Loans	3,753,690			44,075		4.7		2,918,207			33,679		4.6
Total Earning Assets	5,010,877			55,305		4.4	%	3,888,646			42,310		4.4	%
Net unrealized gain on securities available for sale	11,247							(4,733		)
Allowance for loan losses	(68,123		)					(69,117		)
Cash and cash equivalents	74,773							69,974
Premises and equipment	74,696							54,757
Other assets	475,234							347,455
Total Assets	$	5,578,704						$	4,286,982
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,059,163		$	279	0.1	%	$	847,009		$	224	0.1	%
Money market deposits	736,339			372		0.2		576,135			290		0.2
Savings deposits	528,746			154		0.1		357,267			93		0.1
Certificates and other time deposits	1,032,274			2,048		0.8		739,413			1,606		0.9
Total Interest-bearing Deposits	3,356,522			2,853		0.3		2,519,824			2,213		0.4
Borrowings	572,923			2,571		1.8		446,894			1,501		1.3
Total Interest-bearing Liabilities	3,929,445			5,424		0.6		2,966,718			3,714		0.5
Noninterest-bearing deposits	932,266							775,545
Other liabilities	37,687							36,685
Total Liabilities	4,899,398							3,778,948
Stockholders' Equity	679,306							508,034
Total Liabilities and Stockholders' Equity	$	5,578,704		5,424		0.4		$	4,286,982		3,714		0.4
Net Interest Income				$	49,881						$	38,596
Net Interest Margin						4.0	%						4.0	%


⁽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.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2014 and 2013. These totals equal $2,015 and $1,574 for the three months ended September 30, 2014 and 2013, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.



NET INTEREST INCOME
(Dollars in Thousands)	For the Nine Months Ended
	September 30, 2014							September 30, 2013
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	43,906		$	76	0.2	%	$	60,853		$	99	0.2	%
Federal Reserve and Federal Home Loan Bank stock	41,657			1,648		5.3		32,787			1,108		4.5
Investment Securities: ⁽¹⁾
Taxable	761,924			14,902		2.6		608,343			11,071		2.4
Tax-Exempt ⁽²⁾	389,682			16,447		5.6		270,378			12,013		5.9
Total Investment Securities	1,151,606			31,349		3.6		878,721			23,084		3.5
Loans held for sale	6,653			322		6.5		19,866			691		4.6
Loans: ⁽³⁾
Commercial	2,893,922			99,685		4.6		2,290,938			82,691		4.8
Real Estate Mortgage	417,899			14,650		4.7		277,666			9,259		4.4
Installment	353,134			13,672		5.2		308,240			12,084		5.2
Tax-Exempt ⁽²⁾	12,328			277		3.0		15,990			484		4.0
Total Loans	3,683,936			128,606		4.7		2,912,700			105,209		4.8
Total Earning Assets	4,921,105			161,679		4.4	%	3,885,061			129,500		4.4	%
Net unrealized gain on securities available for sale	7,929							6,076
Allowance for loan losses	(68,703		)					(69,432		)
Cash and cash equivalents	83,259							67,109
Premises and equipment	74,732							54,142
Other assets	481,959							345,689
Total Assets	$	5,500,281						$	4,288,645
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,061,762		$	827	0.1	%	$	850,125		$	683	0.1	%
Money market deposits	755,097			1,136		0.2		563,863			911		0.2
Savings deposits	527,147			461		0.1		354,941			292		0.1
Certificates and other time deposits	1,021,044			5,852		0.8		795,074			5,817		1.0
Total Interest-bearing Deposits	3,365,050			8,276		0.3		2,564,003			7,703		0.4
Borrowings	508,992			7,673		2.0		391,294			4,294		1.5
Total Interest-bearing Liabilities	3,874,042			15,949		0.5		2,955,297			11,997		0.5
Noninterest-bearing deposits	925,107							768,586
Other liabilities	38,724							36,606
Total Liabilities	4,837,873							3,760,489
Stockholders' Equity	662,408							528,156
Total Liabilities and Stockholders' Equity	$	5,500,281		15,949		0.4		$	4,288,645		11,997		0.4
Net Interest Income				$	145,730						$	117,503
Net Interest Margin						4.0	%						4.0	%


⁽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.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 35 percent for 2014 and 2013. These totals equal $5,853 and $4,373 for the nine months ended September 30, 2014 and 2013, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.

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