FIRST MERCHANTS CORP - FORM 8-K - EX-99.1 - FIRST MERCHANTS CORP-2ND QUARTER 2015 PRESS RELEASE

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8-K - FIRST MERCHANTS CORP-2ND QUARTER 2015 EARNINGS RELEASE - FIRST MERCHANTS CORP	f8k2q2015earningsrelease.htm

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

July 23, 2015

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 SECOND QUARTER 2015 EARNINGS PER SHARE INCREASE OF 15 PERCENT

First Merchants Corporation (NASDAQ - FRME) has reported second quarter 2015 net income of $18 million, compared to $15.2 million during the second quarter of 2014. Earnings per share for the period totaled $.47 per share, an increase of $.06 per share or 15 percent over the same period in 2014. Year-to-date net income totaled $34.1 million, compared to $28.8 million during the same period in 2014. Earnings per share for the six months ended June 30, 2015 totaled $.90 per share, an increase of $.11 per share or 14 percent over same period in 2014.

Total assets reached $6.1 billion as of quarter-end and loans totaled $4.2 billion. The Corporation’s loan portfolio increased, by $516 million, during the past twelve months. Of the increase, $260 million or 7 percent was the result of organic growth, $145 million resulted from the acquisition of Community Bank of Noblesville in November of 2014 and $111 million resulted from the acquisition of Cooper State Bank in Columbus, Ohio in April of 2015.

Michael C. Rechin, President and Chief Executive Officer, stated, “The second quarter of 2015 was active and exciting including the full integration of Community Bank, the legal closing of Cooper State Bank, the sale of First Merchants Insurance Group and the recently announced acquisition of Ameriana Bank. Our organic or core results include $164 million of loan growth, margin expansion, and improving credit quality, which are very satisfying.” Rechin also added, “Management is very pleased with our first half 2015 activities, results and stock performance.”

Net-interest income totaled $49 million for the quarter as reported net-interest margin increased by 3 basis points over the first quarter of 2015, totaling 3.81 percent, as yields on earning assets totaled 4.26 percent and the cost of supporting liabilities totaled .45 percent. When adjusted for fair value accretion, net-interest margin totaled 3.65 for the quarter, 4 basis points more than the first quarter of 2015 total of 3.61 percent. When compared to the second quarter of 2014 reported net-interest margin and core margin declined by 8 and 6 basis points respectively.

Non-interest income totaled $24.6 million for the quarter, an $8.4 million increase from the second quarter of 2014 total of $16.2 million. The gain on the sale of our insurance subsidiary, First Merchants Insurance Group, accounted for $8.3 million of the increase. Net gains and fees related to the sale of newly originated mortgage loans also improved by $622,000 during the quarter and were offset by a $937,000 negative swing in bond sale activities for the quarter.

Non-interest expense totaled $46.4 million for the quarter, an increase of $5.2 million over the second quarter of 2014. Of the increase, $4.4 million is related to non-recurring expenses. Of the $4.4 million, $1.3 million is related to bank integration expense, $2.3 million is related to the sale of First Merchants Insurance Group and $824,000 is related to other one-time operating expenses taken in the quarter.

The Corporation’s provision expense totaled $417,000 during the quarter as net charge-off’s totaled $668,000. Non-performing loans now total $38.6 million and the allowance for loan losses totaled $62.6 million, or 1.47 percent of total loans and 1.76 percent of non-purchased loans. Non-performing assets declined by $13.4 million from the second quarter of 2014 and now total $57.8 million.

As of June 30, 2015, the Corporation’s total risk-based capital equaled 14.92 percent, common equity tier 1 risk-based capital equaled 11.22 percent, and tangible common equity ratio totaled 9.03 percent.

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, 2015.

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 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 10068128.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme150723.html during the time of the call. A replay of the web cast will be available until July 23, 2016.

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’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)	June 30,
	2015			2014
ASSETS
Cash and cash equivalents	$	105,928		$	115,891
Interest-bearing time deposits	26,669			27,856
Investment securities	1,212,516			1,214,087
Loans held for sale	8,295			7,370
Loans	4,238,205			3,722,733
Less: Allowance for loan losses	(62,550		)	(68,367		)
Net loans	4,175,655			3,654,366
Premises and equipment	84,841			74,856
Federal Reserve and Federal Home Loan Bank stock	34,630			43,127
Interest receivable	19,880			18,341
Core deposit intangibles and goodwill	220,196			201,583
Cash surrender value of life insurance	170,813			165,974
Other real estate owned	19,242			18,621
Tax asset, deferred and receivable	39,622			44,622
Other assets	22,021			28,426
TOTAL ASSETS	$	6,140,308		$	5,615,120
LIABILITIES
Deposits:
Noninterest-bearing	$	1,122,688		$	917,825
Interest-bearing	3,666,889			3,411,785
Total Deposits	4,789,577			4,329,610
Borrowings:
Federal funds purchased	40,748			100,000
Securities sold under repurchase agreements	137,240			133,137
Federal Home Loan Bank advances	247,687			220,765
Subordinated debentures and term loans	126,882			126,874
Total Borrowings	552,557			580,776
Interest payable	3,211			2,489
Other liabilities	45,008			31,649
Total Liabilities	5,390,353			4,944,524
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 -- 50,000,000 shares
Issued and outstanding - 37,824,649 and 36,052,209 shares	4,728			4,507
Additional paid-in capital	432,294			394,774
Retained earnings	319,298			266,980
Accumulated other comprehensive loss	(6,490		)	4,210
Total Stockholders' Equity	749,955			670,596
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,140,308		$	5,615,120



CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended					Six Months Ended
(Dollars In Thousands, Except Per Share Amounts)	June 30,					June 30,
	2015			2014		2015		2014
INTEREST INCOME
Loans receivable:
Taxable	$	45,320		$	42,323	$	88,871	$	84,348
Tax-exempt	736			58		984		119
Investment securities:
Taxable	4,425			5,046		9,148		9,856
Tax-exempt	4,231			3,570		8,066		7,008
Deposits with financial institutions	31			35		68		58
Federal Reserve and Federal Home Loan Bank stock	459			495		1,009		1,147
Total Interest Income	55,202			51,527		108,146		102,536
INTEREST EXPENSE
Deposits	3,686			2,874		7,202		5,423
Federal funds purchased	19			23		42		72
Securities sold under repurchase agreements	90			187		168		383
Federal Home Loan Bank advances	706			676		1,397		1,358
Subordinated debentures and term loans	1,670			1,648		3,330		3,289
Total Interest Expense	6,171			5,408		12,139		10,525
NET INTEREST INCOME	49,031			46,119		96,007		92,011
Provision for loan losses	417					417
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	48,614			46,119		95,590		92,011
OTHER INCOME
Service charges on deposit accounts	4,090			4,098		7,638		7,649
Fiduciary activities	2,309			2,360		4,816		4,572
Other customer fees	4,602			4,049		8,269		7,782
Commission income	1,815			1,886		4,143		4,154
Earnings on cash surrender value of life insurance	640			653		1,387		1,401
Net gains and fees on sales of loans	1,781			1,159		3,270		1,882
Net realized gains (losses) on sales of available for sale securities	(93		)	844		932		1,425
Gain on sale of insurance subsidiary	8,265					8,265
Other income	1,224			1,130		2,145		2,748
Total Other Income	24,633			16,179		40,865		31,613
OTHER EXPENSES
Salaries and employee benefits	26,434			23,430		50,975		48,731
Net occupancy	3,503			3,204		7,293		7,142
Equipment	2,840			2,096		5,406		4,835
Marketing	951			789		1,731		1,558
Outside data processing fees	1,768			2,039		3,485		3,870
Printing and office supplies	303			393		667		851
Core deposit amortization	729			592		1,450		1,184
FDIC assessments	895			863		1,758		1,923
Other real estate owned and foreclosure expenses	1,372			2,613		2,601		4,370
Professional and other outside services	3,134			1,531		4,625		2,910
Other expenses	4,494			3,700		7,634		6,965
Total Other Expenses	46,423			41,250		87,625		84,339
INCOME BEFORE INCOME TAX	26,824			21,048		48,830		39,285
Income tax expense	8,856			5,888		14,690		10,505
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	17,968		$	15,160	$	34,140	$	28,780
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.47		$	0.42	$	0.90	$	0.80
Diluted Net Income Available to Common Stockholders	$	0.47		$	0.41	$	0.90	$	0.79
Cash Dividends Paid	$	0.11		$	0.08	$	0.19	$	0.13
Average Diluted Shares Outstanding (in thousands)	38,043			36,294		38,022		36,278



FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
NET CHARGE OFF'S	$	668		$	1,216		$	1,831		$	(497	)

AVERAGE BALANCES:
Total Assets	$	6,060,477		$	5,520,483		$	5,941,437		$	5,460,419
Total Loans	4,151,860			3,680,521			4,044,931			3,648,480
Total Earning Assets	5,432,080			4,944,516			5,319,158			4,875,474
Total Deposits	4,797,086			4,365,199			4,701,642			4,290,853
Total Stockholders' Equity	746,181			662,643			740,378			653,820

FINANCIAL RATIOS:
Return on Average Assets	1.19		%	1.10		%	1.15		%	1.05		%
Return on Average Stockholders' Equity	9.63			9.15			9.22			8.80
Return on Average Common Stockholders' Equity	9.63			9.15			9.22			8.81
Average Earning Assets to Average Assets	89.63			89.57			89.53			89.29
Allowance for Loan Losses as % of Total Loans	1.47			1.83			1.47			1.83
Net Charge Off's as % of Average Loans (Annualized)	0.06			0.13			0.09			(0.03		)
Average Stockholders' Equity to Average Assets	12.31			12.00			12.46			11.97
Tax Equivalent Yield on Earning Assets	4.26			4.33			4.25			4.36
Cost of Supporting Liabilities	0.45			0.44			0.46			0.43
Net Interest Margin (FTE) on Earning Assets	3.81			3.89			3.79			3.93
Tangible Book Value Per Share	$	14.15		$	13.14		$	14.15		$	13.14



NON-PERFORMING ASSETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2015			2015			2014			2014			2014
Non-Accrual Loans	$	37,713		$	44,321		$	48,789		$	49,104		$	51,289
Renegotiated Loans	885			1,326			1,992			1,171			1,359
Non-Performing Loans (NPL)	38,598			45,647			50,781			50,275			52,648
Other Real Estate Owned	19,242			19,073			19,293			14,540			18,621
Non-Performing Assets (NPA)	57,840			64,720			70,074			64,815			71,269
90+ Days Delinquent	632			1,655			4,663			831			1,135
NPAs & 90 Day Delinquent	$	58,472		$	66,375		$	74,737		$	65,646		$	72,404

Loan Loss Reserve	$	62,550		$	62,801		$	63,964		$	65,596		$	68,367
Quarterly Net Charge-off's	668			1,163			2,592			4,371			1,216
NPAs / Actual Assets %	0.94		%	1.10		%	1.20		%	1.16		%	1.27		%
NPAs & 90 Day / Actual Assets %	0.95		%	1.13		%	1.28		%	1.17		%	1.29		%
NPAs / Actual Loans and OREO %	1.36		%	1.62		%	1.77		%	1.71		%	1.90		%
Loan Loss Reserves / Actual Loans (%)	1.47		%	1.58		%	1.63		%	1.74		%	1.83		%
Net Charge Off's as % of Average Loans (Annualized)	0.06		%	0.12		%	0.27		%	0.47		%	0.13		%



CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2015			2015			2014			2014			2014
ASSETS
Cash and cash equivalents	$	105,928		$	89,243		$	118,616		$	74,237		$	115,891
Interest-bearing time deposits	26,669			83,228			47,520			24,171			27,856
Investment securities	1,212,516			1,189,473			1,180,631			1,189,814			1,214,087
Loans held for sale	8,295			6,392			7,235			6,423			7,370
Loans	4,238,205			3,965,532			3,924,865			3,772,467			3,722,733
Less: Allowance for loan losses	(62,550		)	(62,801		)	(63,964		)	(65,596		)	(68,367		)
Net loans	4,175,655			3,902,731			3,860,901			3,706,871			3,654,366
Premises and equipment	84,841			77,468			77,691			74,105			74,856
Federal Reserve and Federal Home Loan Bank stock	34,630			41,273			41,353			43,127			43,127
Interest receivable	19,880			19,557			19,984			19,455			18,341
Core deposit intangibles and goodwill	220,196			218,034			218,755			200,991			201,583
Cash surrender value of life insurance	170,813			170,172			169,424			165,423			165,974
Other real estate owned	19,242			19,073			19,293			14,540			18,621
Tax asset, deferred and receivable	39,622			38,695			41,960			41,131			44,622
Other assets	22,021			22,182			20,764			31,095			28,426
TOTAL ASSETS	$	6,140,308		$	5,877,521		$	5,824,127		$	5,591,383		$	5,615,120
LIABILITIES
Deposits:
Noninterest-bearing	1,122,688			1,100,397			1,070,859			939,540			917,825
Interest-bearing	3,666,889			3,547,678			3,569,835			3,370,583			3,411,785
Total Deposits	4,789,577			4,648,075			4,640,694			4,310,123			4,329,610
Borrowings:
Federal funds purchased	40,748						15,381			61,428			100,000
Securities sold under repurchase agreements	137,240			134,023			124,539			117,892			133,137
Federal Home Loan Bank advances	247,687			166,326			145,264			255,423			220,765
Subordinated debentures and term loans	126,882			126,875			126,810			126,874			126,874
Total Borrowings	552,557			427,224			411,994			561,617			580,776
Interest payable	3,211			3,685			3,201			3,819			2,489
Other liabilities	45,008			58,879			41,411			31,271			31,649
Total Liabilities	5,390,353			5,137,863			5,097,300			4,906,830			4,944,524
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 -- 50,000,000 shares
Issued and outstanding	4,728			4,723			4,709			4,509			4,507
Additional paid-in capital	432,294			431,199			431,220			395,582			394,774
Retained earnings	319,298			305,526			292,403			280,187			266,980
Accumulated other comprehensive income (loss)	(6,490		)	(1,915		)	(1,630		)	4,150			4,210
Total Stockholders' Equity	749,955			739,658			726,827			684,553			670,596
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,140,308		$	5,877,521		$	5,824,127		$	5,591,383		$	5,615,120



CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	June 30,			March 31,			December 31,			September 30,			June 30,
	2015			2015			2014			2014			2014
INTEREST INCOME
Loans receivable:
Taxable	$	45,320		$	43,551		$	43,710		$	43,981		$	42,323
Tax-exempt	736			248			147			61			58
Investment securities:
Taxable	4,425			4,723			4,980			5,046			5,046
Tax-exempt	4,231			3,835			3,692			3,683			3,570
Deposits with financial institutions	31			37			48			18			35
Federal Reserve and Federal Home Loan Bank stock	459			550			476			501			495
Total Interest Income	55,202			52,944			53,053			53,290			51,527
INTEREST EXPENSE
Deposits	3,686			3,516			3,402			2,853			2,874
Federal funds purchased	19			23			3			102			23
Securities sold under repurchase agreements	90			78			72			74			187
Federal Home Loan Bank advances	706			691			750			734			676
Subordinated debentures and term loans	1,670			1,660			1,666			1,661			1,648
Total Interest Expense	6,171			5,968			5,893			5,424			5,408
NET INTEREST INCOME	49,031			46,976			47,160			47,866			46,119
Provision for loan losses	417						960			1,600
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	48,614			46,976			46,200			46,266			46,119
OTHER INCOME
Service charges on deposit accounts	4,090			3,548			3,979			4,119			4,098
Fiduciary activities	2,309			2,507			2,242			2,152			2,360
Other customer fees	4,602			3,667			3,926			3,991			4,049
Commission income	1,815			2,328			1,534			1,723			1,886
Earnings on cash surrender value of life insurance	640			747			734			1,524			653
Net gains and fees on sales of loans	1,781			1,489			1,559			1,458			1,159
Net realized gains (losses) on sales of available for sale securities	(93		)	1,025			1,246			910			844
Gain on sale of insurance subsidiary	8,265
Other income	1,224			921			1,155			2,535			1,130
Total Other Income	24,633			16,232			16,375			18,412			16,179
OTHER EXPENSES
Salaries and employee benefits	26,434			24,541			23,595			24,173			23,430
Net occupancy	3,503			3,790			3,288			3,401			3,204
Equipment	2,840			2,566			2,315			2,187			2,096
Marketing	951			780			836			1,070			789
Outside data processing fees	1,768			1,717			1,592			1,853			2,039
Printing and office supplies	303			364			364			350			393
Core deposit amortization	729			721			669			592			592
FDIC assessments	895			863			895			920			863
Other real estate owned and foreclosure expenses	1,372			1,229			1,055			2,618			2,613
Professional and other outside services	3,134			1,491			3,633			1,573			1,531
Other expenses	4,494			3,140			3,435			3,839			3,700
Total Other Expenses	46,423			41,202			41,677			42,576			41,250
INCOME BEFORE INCOME TAX	26,824			22,006			20,898			22,102			21,048
Income tax expense	8,856			5,834			5,638			5,980			5,888
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	17,968		$	16,172		$	15,260		$	16,122		$	15,160

Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.47		$	0.43		$	0.41		$	0.45		$	0.42
Diluted Net Income Available to Common Stockholders	$	0.47		$	0.43		$	0.41		$	0.45		$	0.41
Cash Dividends Paid	$	0.11		$	0.08		$	0.08		$	0.08		$	0.08
Average Diluted Shares Outstanding (in thousands)	38,043			38,000			37,323			36,329			36,294
FINANCIAL RATIOS:
Return on Average Assets	1.19		%	1.11		%	1.06		%	1.16		%	1.10		%
Return on Average Stockholders' Equity	9.63			8.81			8.55			9.49			9.15
Return on Average Common Stockholders' Equity	9.63			8.81			8.56			9.50			9.15
Average Earning Assets to Average Assets	89.63			89.42			89.51			89.82			89.57
Allowance for Loan Losses as % of Total Loans	1.47			1.58			1.63			1.74			1.83
Net Charge Off's as % of Average Loans (Annualized)	0.06			0.12			0.27			0.47			0.13
Average Stockholders' Equity to Average Assets	12.31			12.62			12.34			12.18			12.00
Tax Equivalent Yield on Earning Assets	4.26			4.24			4.26			4.41			4.33
Cost of Supporting Liabilities	0.45			0.46			0.46			0.43			0.44
Net Interest Margin (FTE) on Earning Assets	3.81			3.78			3.80			3.98			3.89
Tangible Book Value Per Share	$	14.15		$	13.96		$	13.65		$	13.53		$	13.14



LOANS
(Dollars In Thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
	2015			2015			2014			2014			2014
Commercial and industrial loans	$	984,223		$	938,937		$	896,688		$	900,970		$	857,844
Agricultural production financing and other loans to farmers	93,695			95,652			104,927			99,649			102,270
Real estate loans:
Construction	256,082			237,036			207,221			178,213			165,388
Commercial and farmland	1,705,647			1,646,418			1,672,661			1,603,698			1,621,436
Residential	689,621			640,451			647,315			625,609			629,162
Home Equity	302,403			286,914			286,529			269,952			261,811
Individuals' loans for household and other personal expenditures	62,785			70,223			73,400			66,832			61,533
Lease financing receivables, net of unearned income	742			853			1,106			1,208			1,231
Other commercial loans	143,007			49,048			35,018			26,336			22,058
Loans	4,238,205			3,965,532			3,924,865			3,772,467			3,722,733
Allowance for loan losses	(62,550		)	(62,801		)	(63,964		)	(65,596		)	(68,367		)
NET LOANS	$	4,175,655		$	3,902,731		$	3,860,901		$	3,706,871		$	3,654,366



DEPOSITS
(Dollars In Thousands)	June 30,		March 31,		December 31,		September 30,		June 30,
	2015		2015		2014		2014		2014
Demand deposits	$	2,211,154	$	2,116,135	$	2,146,492	$	1,947,040	$	2,041,183
Savings deposits	1,439,255		1,402,421		1,376,707		1,281,994		1,251,277
Certificates and other time deposits of $100,000 or more	295,159		283,313		260,685		241,163		251,585
Other certificates and time deposits	517,153		516,500		523,010		502,965		534,344
Brokered deposits	326,856		329,706		333,800		336,961		251,221
TOTAL DEPOSITS	$	4,789,577	$	4,648,075	$	4,640,694	$	4,310,123	$	4,329,610



NET INTEREST INCOME
(Dollars in Thousands)	For the Three Months Ended
	June 30, 2015							June 30, 2014
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	59,979		$	31	0.21	%	$	59,030		$	35	0.24	%
Federal Reserve and Federal Home Loan Bank stock	39,195			459		4.68		42,809			495		4.63
Investment Securities: ⁽¹⁾
Taxable	696,505			4,425		2.54		772,384			5,046		2.61
Tax-Exempt ⁽²⁾	484,541			6,510		5.37		389,772			5,492		5.64
Total Investment Securities	1,181,046			10,935		3.70		1,162,156			10,538		3.63
Loans held for sale	6,033			146		9.68		5,775			108		7.48
Loans: ⁽³⁾
Commercial	3,193,314			35,661		4.47		2,850,068			31,730		4.45
Real Estate Mortgage	455,470			4,962		4.36		450,462			5,636		5.00
Installment	396,378			4,552		4.59		362,455			4,849		5.35
Tax-Exempt ⁽²⁾	100,665			1,131		4.49		11,761			89		3.03
Total Loans	4,151,860			46,452		4.48		3,680,521			42,412		4.61
Total Earning Assets	5,432,080			57,877		4.26		4,944,516			53,480		4.33
Net unrealized gain on securities available for sale	12,575							8,820
Allowance for loan losses	(62,881		)					(69,188		)
Cash and cash equivalents	97,738							79,974
Premises and equipment	84,359							74,869
Other assets	496,606							481,492
Total Assets	$	6,060,477						$	5,520,483
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,088,896		$	283	0.10	%	$	1,081,709		$	282	0.10	%
Money market deposits	853,776			446		0.21		776,396			397		0.20
Savings deposits	612,920			166		0.11		528,261			153		0.12
Certificates and other time deposits	1,148,463			2,791		0.97		1,051,596			2,042		0.78
Total Interest-bearing Deposits	3,704,055			3,686		0.40		3,437,962			2,874		0.33
Borrowings	471,467			2,485		2.11		459,602			2,534		2.21
Total Interest-bearing Liabilities	4,175,522			6,171		0.59		3,897,564			5,408		0.56
Noninterest-bearing deposits	1,093,031							927,237
Other liabilities	45,743							33,039
Total Liabilities	5,314,296							4,857,840
Stockholders' Equity	746,181							662,643
Total Liabilities and Stockholders' Equity	$	6,060,477		6,171		0.45		$	5,520,483		5,408		0.44
Net Interest Income				$	51,706						$	48,072
Net Interest Margin						3.81	%						3.89	%


(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 2015 and 2014. These totals equal $2,675 and $1,953 for the three months ended June 30, 2015 and 2014, respectively.
(3) Non accruing loans have been included in the average balances.



NET INTEREST INCOME
(Dollars in Thousands)	For the Six Months Ended
	June 30, 2015							June 30, 2014
	Average Balance			Interest Income / Expense		Average Rate		Average Balance			Interest Income / Expense		Average Rate
Assets:
Interest-bearing time deposits	$	58,452		$	68	0.23	%	$	51,713		$	58	0.22	%
Federal Reserve and Federal Home Loan Bank stock	40,267			1,009		5.01		40,910			1,147		5.61
Investment Securities: ⁽¹⁾
Taxable	716,331			9,148		2.55		754,631			9,856		2.61
Tax-Exempt ⁽²⁾	459,177			12,409		5.40		379,740			10,782		5.68
Total Investment Securities	1,175,508			21,557		3.67		1,134,371			20,638		3.64
Loans held for sale	5,483			256		9.34		5,419			180		6.64
Loans: ⁽³⁾
Commercial	3,117,698			69,830		4.48		2,887,823			65,341		4.53
Real Estate Mortgage	457,620			9,811		4.29		398,677			9,625		4.83
Installment	395,227			8,975		4.54		344,506			9,202		5.34
Tax-Exempt ⁽²⁾	68,903			1,513		4.39		12,055			183		3.04
Total Loans	4,044,931			90,385		4.47		3,648,480			84,531		4.63
Total Earning Assets	5,319,158			113,019		4.25	%	4,875,474			106,374		4.36	%
Net unrealized gain on securities available for sale	13,522							6,242
Allowance for loan losses	(63,154		)					(68,998		)
Cash and cash equivalents	98,262							87,572
Premises and equipment	81,052							74,751
Other assets	492,597							485,378
Total Assets	$	5,941,437						$	5,460,419
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits	$	1,059,826		$	534	0.10	%	$	1,063,084		$	549	0.10	%
Money market deposits	838,852			858		0.20		764,632			764		0.20
Savings deposits	592,449			326		0.11		526,333			306		0.12
Certificates and other time deposits	1,137,342			5,484		0.96		1,015,335			3,804		0.75
Total Interest-bearing Deposits	3,628,469			7,202		0.40		3,369,384			5,423		0.32
Borrowings	454,758			4,937		2.17		476,496			5,102		2.14
Total Interest-bearing Liabilities	4,083,227			12,139		0.59		3,845,880			10,525		0.55
Noninterest-bearing deposits	1,073,173							921,469
Other liabilities	44,659							39,250
Total Liabilities	5,201,059							4,806,599
Stockholders' Equity	740,378							653,820
Total Liabilities and Stockholders' Equity	$	5,941,437		12,139		0.46		$	5,460,419		10,525		0.43
Net Interest Income				$	100,880						$	95,849
Net Interest Margin						3.79	%						3.93	%


⁽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 2015 and 2014. These totals equal $4,873 and $3,838 for the six months ended June 30, 2015 and 2014, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.

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