Title of Each Class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.125 state value per share
|
FRME
|
The NASDAQ Stock Market LLC
|
Large accelerated filer [X]
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
Emerging growth company [ ]
|
|
|
|
Page No.
|
|
|
|
|
||
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
ASC
|
Accounting Standards Codification
|
Bank
|
First Merchants Bank, a wholly-owned subsidiary of the Corporation
|
CET1
|
Common Equity Tier 1
|
CMT
|
Constant Maturity Treasury
|
Corporation
|
First Merchants Corporation
|
ESPP
|
Employee Stock Purchase Plan
|
FDIC
|
Federal Deposit Insurance Corporation
|
FHLB
|
Federal Home Loan Bank
|
FTE
|
Fully taxable equivalent
|
GAAP
|
Generally Accepted Accounting Principles
|
OREO
|
Other real estate owned
|
RSA
|
Restricted Stock Awards
|
TEFRA
|
Tax Equity and Fiscal Responsibility Act
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(Unaudited)
|
|
|||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
115,878
|
|
|
$
|
139,247
|
|
Interest-bearing time deposits
|
70,672
|
|
|
36,963
|
|
||
Investment securities available for sale
|
1,247,632
|
|
|
1,142,195
|
|
||
Investment securities held to maturity (fair value of $622,635 and $489,217)
|
615,027
|
|
|
490,387
|
|
||
Loans held for sale
|
3,330
|
|
|
4,778
|
|
||
Loans, net of allowance for loan losses of $80,902 and $80,552
|
7,218,418
|
|
|
7,143,915
|
|
||
Premises and equipment
|
91,863
|
|
|
93,420
|
|
||
Federal Home Loan Bank stock
|
24,588
|
|
|
24,588
|
|
||
Interest receivable
|
40,931
|
|
|
40,881
|
|
||
Goodwill
|
445,355
|
|
|
445,355
|
|
||
Other intangibles
|
22,901
|
|
|
24,429
|
|
||
Cash surrender value of life insurance
|
225,928
|
|
|
224,939
|
|
||
Other real estate owned
|
1,877
|
|
|
2,179
|
|
||
Tax asset, deferred and receivable
|
16,094
|
|
|
23,668
|
|
||
Other assets
|
70,431
|
|
|
47,772
|
|
||
TOTAL ASSETS
|
$
|
10,210,925
|
|
|
$
|
9,884,716
|
|
LIABILITIES
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Noninterest-bearing
|
$
|
1,381,183
|
|
|
$
|
1,447,907
|
|
Interest-bearing
|
6,666,615
|
|
|
6,306,686
|
|
||
Total Deposits
|
8,047,798
|
|
|
7,754,593
|
|
||
Borrowings:
|
|
|
|
||||
Federal funds purchased
|
20,000
|
|
|
104,000
|
|
||
Securities sold under repurchase agreements
|
111,783
|
|
|
113,512
|
|
||
Federal Home Loan Bank advances
|
345,013
|
|
|
314,986
|
|
||
Subordinated debentures and term loans
|
138,519
|
|
|
138,463
|
|
||
Total Borrowings
|
615,315
|
|
|
670,961
|
|
||
Interest payable
|
7,313
|
|
|
5,607
|
|
||
Other liabilities
|
84,651
|
|
|
45,295
|
|
||
Total Liabilities
|
8,755,077
|
|
|
8,476,456
|
|
||
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
|
|
|
|
||
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 - 49,428,468 and 49,349,800 shares
|
6,179
|
|
|
6,169
|
|
||
Additional paid-in capital
|
839,919
|
|
|
840,052
|
|
||
Retained earnings
|
611,220
|
|
|
583,336
|
|
||
Accumulated other comprehensive loss
|
(1,595
|
)
|
|
(21,422
|
)
|
||
Total Stockholders' Equity
|
1,455,848
|
|
|
1,408,260
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
10,210,925
|
|
|
$
|
9,884,716
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
INTEREST INCOME
|
|
|
|
||||
Loans receivable:
|
|
|
|
||||
Taxable
|
$
|
90,481
|
|
|
$
|
78,267
|
|
Tax exempt
|
4,153
|
|
|
3,596
|
|
||
Investment securities:
|
|
|
|
||||
Taxable
|
6,095
|
|
|
5,096
|
|
||
Tax exempt
|
6,871
|
|
|
6,126
|
|
||
Deposits with financial institutions
|
875
|
|
|
131
|
|
||
Federal Home Loan Bank stock
|
338
|
|
|
404
|
|
||
Total Interest Income
|
108,813
|
|
|
93,620
|
|
||
INTEREST EXPENSE
|
|
|
|
||||
Deposits
|
19,594
|
|
|
9,002
|
|
||
Federal funds purchased
|
93
|
|
|
380
|
|
||
Securities sold under repurchase agreements
|
330
|
|
|
173
|
|
||
Federal Home Loan Bank advances
|
1,814
|
|
|
2,159
|
|
||
Subordinated debentures and term loans
|
2,116
|
|
|
1,990
|
|
||
Total Interest Expense
|
23,947
|
|
|
13,704
|
|
||
NET INTEREST INCOME
|
84,866
|
|
|
79,916
|
|
||
Provision for loan losses
|
1,200
|
|
|
2,500
|
|
||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
83,666
|
|
|
77,416
|
|
||
OTHER INCOME
|
|
|
|
||||
Service charges on deposit accounts
|
5,095
|
|
|
4,777
|
|
||
Fiduciary and wealth management fees
|
3,818
|
|
|
3,796
|
|
||
Card payment fees
|
4,826
|
|
|
4,594
|
|
||
Other customer fees
|
439
|
|
|
442
|
|
||
Increase in cash surrender value of life insurance
|
989
|
|
|
1,078
|
|
||
Gains on life insurance benefits
|
—
|
|
|
98
|
|
||
Net gains and fees on sales of loans
|
1,295
|
|
|
1,821
|
|
||
Net realized gains on sales of available for sale securities
|
1,140
|
|
|
1,609
|
|
||
Derivative hedge income
|
781
|
|
|
842
|
|
||
Other income
|
330
|
|
|
504
|
|
||
Total Other Income
|
18,713
|
|
|
19,561
|
|
||
OTHER EXPENSES
|
|
|
|
||||
Salaries and employee benefits
|
33,028
|
|
|
32,226
|
|
||
Net occupancy
|
5,027
|
|
|
4,670
|
|
||
Equipment
|
3,642
|
|
|
3,668
|
|
||
Marketing
|
1,074
|
|
|
884
|
|
||
Outside data processing fees
|
3,684
|
|
|
2,964
|
|
||
Printing and office supplies
|
315
|
|
|
334
|
|
||
Intangible asset amortization
|
1,528
|
|
|
1,726
|
|
||
FDIC assessments
|
707
|
|
|
719
|
|
||
Other real estate owned and foreclosure expenses
|
1,165
|
|
|
402
|
|
||
Professional and other outside services
|
1,884
|
|
|
1,541
|
|
||
Other expenses
|
4,567
|
|
|
4,553
|
|
||
Total Other Expenses
|
56,621
|
|
|
53,687
|
|
||
INCOME BEFORE INCOME TAX
|
45,758
|
|
|
43,290
|
|
||
Income tax expense
|
6,941
|
|
|
6,611
|
|
||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$
|
38,817
|
|
|
$
|
36,679
|
|
Per Share Data:
|
|
|
|
||||
Basic Net Income Available to Common Stockholders
|
$
|
0.79
|
|
|
$
|
0.75
|
|
Diluted Net Income Available to Common Stockholders
|
$
|
0.78
|
|
|
$
|
0.74
|
|
Cash Dividends Paid
|
$
|
0.22
|
|
|
$
|
0.18
|
|
Average Diluted Shares Outstanding (in thousands)
|
49,541
|
|
|
49,428
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
38,817
|
|
|
$
|
36,679
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized holding gain (loss) on securities available for sale arising during the period, net of tax of $5,580 and $4,191
|
20,990
|
|
|
(17,698
|
)
|
||
Unrealized gain (loss) on cash flow hedges arising during the period, net of tax of $82 and $106
|
(309
|
)
|
|
644
|
|
||
Reclassification adjustment for net gains included in net income, net of tax of $227 and $302
|
(854
|
)
|
|
(1,137
|
)
|
||
Total other comprehensive income (loss), net of tax
|
19,827
|
|
|
(18,191
|
)
|
||
Comprehensive income
|
$
|
58,644
|
|
|
$
|
18,488
|
|
|
Preferred
|
|
Common Stock
|
|
Additional
|
|
|
|
Accumulated
Other |
|
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid in
Capital |
|
Retained
Earnings |
|
Comprehensive
Loss |
|
Total
|
||||||||||||||
Balances, December 31, 2018
|
125
|
|
|
$
|
125
|
|
|
49,349,800
|
|
|
$
|
6,169
|
|
|
$
|
840,052
|
|
|
$
|
583,336
|
|
|
$
|
(21,422
|
)
|
|
$
|
1,408,260
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,817
|
|
|
—
|
|
|
38,817
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,827
|
|
|
19,827
|
|
||||||
Cash dividends on common stock ($.22 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,933
|
)
|
|
—
|
|
|
(10,933
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
103,660
|
|
|
13
|
|
|
968
|
|
|
—
|
|
|
—
|
|
|
981
|
|
||||||
Stock issued under employee benefit plans
|
—
|
|
|
—
|
|
|
5,339
|
|
|
1
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
174
|
|
||||||
Stock issued under dividend reinvestment and
stock purchase plan |
—
|
|
|
—
|
|
|
8,508
|
|
|
1
|
|
|
339
|
|
|
—
|
|
|
—
|
|
|
340
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
3,700
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Stock redeemed
|
—
|
|
|
—
|
|
|
(42,539
|
)
|
|
(5
|
)
|
|
(1,653
|
)
|
|
—
|
|
|
—
|
|
|
(1,658
|
)
|
||||||
Balances, March 31, 2019
|
125
|
|
|
$
|
125
|
|
|
49,428,468
|
|
|
$
|
6,179
|
|
|
$
|
839,919
|
|
|
$
|
611,220
|
|
|
$
|
(1,595
|
)
|
|
$
|
1,455,848
|
|
|
Preferred
|
|
Common Stock
|
|
Additional
|
|
|
|
Accumulated
Other |
|
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid in
Capital |
|
Retained
Earnings |
|
Comprehensive
Loss |
|
Total
|
||||||||||||||
Balances, December 31, 2017
|
125
|
|
|
$
|
125
|
|
|
49,158,238
|
|
|
$
|
6,145
|
|
|
$
|
834,870
|
|
|
$
|
465,231
|
|
|
$
|
(2,908
|
)
|
|
$
|
1,303,463
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,679
|
|
|
—
|
|
|
36,679
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,191
|
)
|
|
(18,191
|
)
|
||||||
Cash dividends on common stock ($.18 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,912
|
)
|
|
—
|
|
|
(8,912
|
)
|
||||||
Reclassification adjustment under ASU 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
626
|
|
(626
|
)
|
|
—
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
93,076
|
|
|
12
|
|
|
863
|
|
|
—
|
|
|
—
|
|
|
875
|
|
||||||
Stock issued under employee benefit plans
|
—
|
|
|
—
|
|
|
4,363
|
|
|
1
|
|
|
158
|
|
|
—
|
|
|
—
|
|
|
159
|
|
||||||
Stock issued under dividend reinvestment and
stock purchase plan |
—
|
|
|
—
|
|
|
5,614
|
|
|
1
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
250
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
23,557
|
|
|
3
|
|
|
532
|
|
|
—
|
|
|
—
|
|
|
535
|
|
||||||
Stock redeemed
|
—
|
|
|
—
|
|
|
(41,752
|
)
|
|
(7
|
)
|
|
(1,778
|
)
|
|
—
|
|
|
—
|
|
|
(1,785
|
)
|
||||||
Balances, March 31, 2018
|
125
|
|
|
$
|
125
|
|
|
49,243,096
|
|
|
$
|
6,155
|
|
|
$
|
834,894
|
|
|
$
|
493,624
|
|
|
$
|
(21,725
|
)
|
|
$
|
1,313,073
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Cash Flow From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
38,817
|
|
|
$
|
36,679
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for loan losses
|
1,200
|
|
|
2,500
|
|
||
Depreciation and amortization
|
2,209
|
|
|
2,213
|
|
||
Change in deferred taxes
|
740
|
|
|
957
|
|
||
Share-based compensation
|
981
|
|
|
875
|
|
||
Loans originated for sale
|
(67,596
|
)
|
|
(92,887
|
)
|
||
Proceeds from sales of loans held for sale
|
69,940
|
|
|
96,973
|
|
||
Gains on sales of loans held for sale
|
(896
|
)
|
|
(1,339
|
)
|
||
Gains on sales of securities available for sale
|
(1,140
|
)
|
|
(1,609
|
)
|
||
Increase in cash surrender of life insurance
|
(989
|
)
|
|
(1,078
|
)
|
||
Gains on life insurance benefits
|
—
|
|
|
(98
|
)
|
||
Change in interest receivable
|
(50
|
)
|
|
1,907
|
|
||
Change in interest payable
|
1,706
|
|
|
986
|
|
||
Other adjustments
|
7,019
|
|
|
(15,082
|
)
|
||
Net cash provided by operating activities
|
51,941
|
|
|
30,997
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Net change in interest-bearing deposits
|
(33,709
|
)
|
|
10,794
|
|
||
Purchases of:
|
|
|
|
||||
Securities available for sale
|
(125,523
|
)
|
|
(98,113
|
)
|
||
Securities held to maturity
|
(138,857
|
)
|
|
—
|
|
||
Proceeds from sales of securities available for sale
|
34,107
|
|
|
55,695
|
|
||
Proceeds from maturities of:
|
|
|
|
||||
Securities available for sale
|
25,904
|
|
|
15,764
|
|
||
Securities held to maturity
|
13,879
|
|
|
20,092
|
|
||
Change in Federal Home Loan Bank stock
|
—
|
|
|
(763
|
)
|
||
Net change in loans
|
(75,963
|
)
|
|
(153,893
|
)
|
||
Proceeds from the sale of other real estate owned
|
288
|
|
|
820
|
|
||
Proceeds from life insurance benefits
|
—
|
|
|
2,784
|
|
||
Other adjustments
|
(954
|
)
|
|
1,051
|
|
||
Net cash used in investing activities
|
(300,828
|
)
|
|
(145,769
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Net change in :
|
|
|
|
||||
Demand and savings deposits
|
171,543
|
|
|
108,446
|
|
||
Certificates of deposit and other time deposits
|
121,662
|
|
|
46,659
|
|
||
Borrowings
|
295,060
|
|
|
737,347
|
|
||
Repayment of borrowings
|
(350,710
|
)
|
|
(794,004
|
)
|
||
Cash dividends on common stock
|
(10,933
|
)
|
|
(8,912
|
)
|
||
Stock issued under employee benefit plans
|
174
|
|
|
159
|
|
||
Stock issued under dividend reinvestment and stock purchase plans
|
340
|
|
|
250
|
|
||
Stock options exercised
|
40
|
|
|
535
|
|
||
Stock redeemed
|
(1,658
|
)
|
|
(1,785
|
)
|
||
Net cash provided by financing activities
|
225,518
|
|
|
88,695
|
|
||
Net Change in Cash and Cash Equivalents
|
(23,369
|
)
|
|
(26,077
|
)
|
||
Cash and Cash Equivalents, January 1
|
139,247
|
|
|
154,905
|
|
||
Cash and Cash Equivalents, March 31
|
$
|
115,878
|
|
|
$
|
128,828
|
|
Additional cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
22,241
|
|
|
$
|
12,718
|
|
Income tax paid (refunded)
|
—
|
|
|
(257
|
)
|
||
Loans transferred to other real estate owned
|
260
|
|
|
131
|
|
||
Fixed assets transferred to other real estate owned
|
302
|
|
|
—
|
|
||
Non-cash investing activities using trade date accounting
|
14,579
|
|
|
601
|
|
||
ROU assets obtained in exchange for new operating lease liabilities
|
23,324
|
|
|
—
|
|
*
|
The timing and pattern of transfer of the non-lease component(s) and associated lease component are the same.
|
*
|
The lease component, if accounted for separately, would be classified as an operating lease.
|
•
|
A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and
|
•
|
A right-of-use ("ROU") asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
|
*
|
The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year.
|
*
|
The amount and timing of plan assets expected to be returned to the employer.
|
*
|
Related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan.
|
*
|
For public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits.
|
*
|
An explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.
|
*
|
The projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets.
|
*
|
The accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets.
|
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||
Available for sale at March 31, 2019
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agency securities
|
$
|
33,494
|
|
|
$
|
210
|
|
|
$
|
1
|
|
|
$
|
33,703
|
|
State and municipal
|
633,617
|
|
|
18,773
|
|
|
532
|
|
|
651,858
|
|
||||
U.S. Government-sponsored mortgage-backed securities
|
562,587
|
|
|
2,592
|
|
|
3,139
|
|
|
562,040
|
|
||||
Corporate obligations
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Total available for sale
|
1,229,729
|
|
|
21,575
|
|
|
3,672
|
|
|
1,247,632
|
|
||||
Held to maturity at March 31, 2019
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agency securities
|
22,619
|
|
|
—
|
|
|
350
|
|
|
22,269
|
|
||||
State and municipal
|
254,520
|
|
|
6,682
|
|
|
117
|
|
|
261,085
|
|
||||
U.S. Government-sponsored mortgage-backed securities
|
336,888
|
|
|
2,630
|
|
|
1,237
|
|
|
338,281
|
|
||||
Foreign investment
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
||||
Total held to maturity
|
615,027
|
|
|
9,312
|
|
|
1,704
|
|
|
622,635
|
|
||||
Total Investment Securities
|
$
|
1,844,756
|
|
|
$
|
30,887
|
|
|
$
|
5,376
|
|
|
$
|
1,870,267
|
|
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||
Available for sale at December 31, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agency securities
|
$
|
13,493
|
|
|
$
|
92
|
|
|
$
|
3
|
|
|
$
|
13,582
|
|
State and municipal
|
605,994
|
|
|
5,995
|
|
|
5,854
|
|
|
606,135
|
|
||||
U.S. Government-sponsored mortgage-backed securities
|
530,209
|
|
|
634
|
|
|
8,396
|
|
|
522,447
|
|
||||
Corporate obligations
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Total available for sale
|
1,149,727
|
|
|
6,721
|
|
|
14,253
|
|
|
1,142,195
|
|
||||
Held to maturity at December 31, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agency securities
|
22,618
|
|
|
—
|
|
|
545
|
|
|
22,073
|
|
||||
State and municipal
|
197,909
|
|
|
2,858
|
|
|
872
|
|
|
199,895
|
|
||||
U.S. Government-sponsored mortgage-backed securities
|
268,860
|
|
|
713
|
|
|
3,323
|
|
|
266,250
|
|
||||
Foreign investment
|
1,000
|
|
|
—
|
|
|
1
|
|
|
999
|
|
||||
Total held to maturity
|
490,387
|
|
|
3,571
|
|
|
4,741
|
|
|
489,217
|
|
||||
Total Investment Securities
|
$
|
1,640,114
|
|
|
$
|
10,292
|
|
|
$
|
18,994
|
|
|
$
|
1,631,412
|
|
|
Available for Sale
|
|
Held to Maturity
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Maturity Distribution at March 31, 2019:
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
4,746
|
|
|
$
|
4,764
|
|
|
$
|
3,502
|
|
|
$
|
3,501
|
|
Due after one through five years
|
3,750
|
|
|
3,835
|
|
|
49,060
|
|
|
48,717
|
|
||||
Due after five through ten years
|
79,533
|
|
|
81,458
|
|
|
65,990
|
|
|
68,332
|
|
||||
Due after ten years
|
579,113
|
|
|
595,535
|
|
|
159,587
|
|
|
163,804
|
|
||||
|
667,142
|
|
|
685,592
|
|
|
278,139
|
|
|
284,354
|
|
||||
U.S. Government-sponsored mortgage-backed securities
|
562,587
|
|
|
562,040
|
|
|
336,888
|
|
|
338,281
|
|
||||
Total Investment Securities
|
$
|
1,229,729
|
|
|
$
|
1,247,632
|
|
|
$
|
615,027
|
|
|
$
|
622,635
|
|
|
Available for Sale
|
|
Held to Maturity
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Maturity Distribution at December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
13,092
|
|
|
$
|
13,144
|
|
|
$
|
4,732
|
|
|
$
|
4,730
|
|
Due after one through five years
|
5,311
|
|
|
5,378
|
|
|
49,054
|
|
|
48,473
|
|
||||
Due after five through ten years
|
73,280
|
|
|
74,411
|
|
|
62,873
|
|
|
64,163
|
|
||||
Due after ten years
|
527,835
|
|
|
526,815
|
|
|
104,868
|
|
|
105,601
|
|
||||
|
619,518
|
|
|
619,748
|
|
|
221,527
|
|
|
222,967
|
|
||||
U.S. Government-sponsored mortgage-backed securities
|
530,209
|
|
|
522,447
|
|
|
268,860
|
|
|
266,250
|
|
||||
Total Investment Securities
|
$
|
1,149,727
|
|
|
$
|
1,142,195
|
|
|
$
|
490,387
|
|
|
$
|
489,217
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Sales and Redemptions of Available for Sale Securities:
|
|
|
|
||||
Gross gains
|
$
|
1,140
|
|
|
$
|
1,609
|
|
Gross losses
|
—
|
|
|
—
|
|
|
Less than
12 Months |
|
12 Months
or Longer |
|
Total
|
||||||||||||||||||
|
Fair
Value |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Gross
Unrealized Losses |
||||||||||||
Temporarily Impaired Available for Sale Securities at March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agency securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
373
|
|
|
$
|
1
|
|
|
$
|
373
|
|
|
$
|
1
|
|
State and municipal
|
—
|
|
|
—
|
|
|
31,483
|
|
|
532
|
|
|
31,483
|
|
|
532
|
|
||||||
U.S. Government-sponsored mortgage-backed securities
|
3,761
|
|
|
2
|
|
|
310,455
|
|
|
3,137
|
|
|
314,216
|
|
|
3,139
|
|
||||||
Total Temporarily Impaired Available for Sale Securities
|
3,761
|
|
|
2
|
|
|
342,311
|
|
|
3,670
|
|
|
346,072
|
|
|
3,672
|
|
||||||
Temporarily Impaired Held to Maturity Securities at March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agency securities
|
—
|
|
|
—
|
|
|
22,269
|
|
|
350
|
|
|
22,269
|
|
|
350
|
|
||||||
State and municipal
|
310
|
|
|
—
|
|
|
13,200
|
|
|
117
|
|
|
13,510
|
|
|
117
|
|
||||||
U.S. Government-sponsored mortgage-backed securities
|
479
|
|
|
—
|
|
|
105,396
|
|
|
1,237
|
|
|
105,875
|
|
|
1,237
|
|
||||||
Foreign investment
|
—
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
||||||
Total Temporarily Impaired Held to Maturity Securities
|
789
|
|
|
—
|
|
|
141,865
|
|
|
1,704
|
|
|
142,654
|
|
|
1,704
|
|
||||||
Total Temporarily Impaired Investment Securities
|
$
|
4,550
|
|
|
$
|
2
|
|
|
$
|
484,176
|
|
|
$
|
5,374
|
|
|
$
|
488,726
|
|
|
$
|
5,376
|
|
|
Less than
12 Months |
|
12 Months
or Longer |
|
Total
|
||||||||||||||||||
|
Fair
Value |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Gross
Unrealized Losses |
||||||||||||
Temporarily Impaired Available for Sale Securities at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agency securities
|
$
|
1,490
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,490
|
|
|
$
|
3
|
|
State and municipal
|
234,431
|
|
|
3,958
|
|
|
38,028
|
|
|
1,896
|
|
|
272,459
|
|
|
5,854
|
|
||||||
U.S. Government-sponsored mortgage-backed securities
|
196,601
|
|
|
2,400
|
|
|
217,121
|
|
|
5,996
|
|
|
413,722
|
|
|
8,396
|
|
||||||
Total Temporarily Impaired Available for Sale Securities
|
432,522
|
|
|
6,361
|
|
|
255,149
|
|
|
7,892
|
|
|
687,671
|
|
|
14,253
|
|
||||||
Temporarily Impaired Held to Maturity Securities at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agency securities
|
—
|
|
|
—
|
|
|
22,073
|
|
|
545
|
|
|
22,073
|
|
|
545
|
|
||||||
State and municipal
|
14,952
|
|
|
369
|
|
|
16,786
|
|
|
503
|
|
|
31,738
|
|
|
872
|
|
||||||
U.S. Government-sponsored mortgage-backed securities
|
102,828
|
|
|
876
|
|
|
87,268
|
|
|
2,447
|
|
|
190,096
|
|
|
3,323
|
|
||||||
Foreign investment
|
—
|
|
|
—
|
|
|
999
|
|
|
1
|
|
|
999
|
|
|
1
|
|
||||||
Total Temporarily Impaired Held to Maturity Securities
|
117,780
|
|
|
1,245
|
|
|
127,126
|
|
|
3,496
|
|
|
244,906
|
|
|
4,741
|
|
||||||
Total Temporarily Impaired Investment Securities
|
$
|
550,302
|
|
|
$
|
7,606
|
|
|
$
|
382,275
|
|
|
$
|
11,388
|
|
|
$
|
932,577
|
|
|
$
|
18,994
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Investments reported at less than historical cost:
|
|
|
|
||||
Historical cost
|
$
|
494,102
|
|
|
$
|
951,571
|
|
Fair value
|
488,726
|
|
|
932,577
|
|
||
Gross unrealized losses
|
$
|
5,376
|
|
|
$
|
18,994
|
|
Percent of the Corporation's investment portfolio
|
26.2
|
%
|
|
57.1
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Commercial and industrial loans
|
$
|
1,788,628
|
|
|
$
|
1,726,664
|
|
Agricultural production financing and other loans to farmers
|
80,357
|
|
|
92,404
|
|
||
Real estate loans:
|
|
|
|
||||
Construction
|
542,501
|
|
|
545,729
|
|
||
Commercial and farmland
|
2,838,798
|
|
|
2,832,102
|
|
||
Residential
|
976,668
|
|
|
966,421
|
|
||
Home equity
|
536,208
|
|
|
528,157
|
|
||
Individuals' loans for household and other personal expenditures
|
108,216
|
|
|
99,788
|
|
||
Public finance and other commercial loans
|
427,944
|
|
|
433,202
|
|
||
Loans
|
$
|
7,299,320
|
|
|
$
|
7,224,467
|
|
Allowance for loan losses
|
(80,902
|
)
|
|
(80,552
|
)
|
||
Net Loans
|
$
|
7,218,418
|
|
|
$
|
7,143,915
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
|
Commercial
|
|
Commercial
Real Estate |
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances, December 31, 2018
|
$
|
32,657
|
|
|
$
|
29,609
|
|
|
$
|
3,964
|
|
|
$
|
14,322
|
|
|
$
|
80,552
|
|
Provision for losses
|
236
|
|
|
769
|
|
|
105
|
|
|
90
|
|
|
1,200
|
|
|||||
Recoveries on loans
|
542
|
|
|
245
|
|
|
118
|
|
|
100
|
|
|
1,005
|
|
|||||
Loans charged off
|
(366
|
)
|
|
(1,189
|
)
|
|
(161
|
)
|
|
(139
|
)
|
|
(1,855
|
)
|
|||||
Balances, March 31, 2019
|
$
|
33,069
|
|
|
$
|
29,434
|
|
|
$
|
4,026
|
|
|
$
|
14,373
|
|
|
$
|
80,902
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Commercial
|
|
Commercial
Real Estate |
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances, December 31, 2017
|
$
|
30,420
|
|
|
$
|
27,343
|
|
|
$
|
3,732
|
|
|
$
|
13,537
|
|
|
$
|
75,032
|
|
Provision for losses
|
840
|
|
|
84
|
|
|
274
|
|
|
1,302
|
|
|
2,500
|
|
|||||
Recoveries on loans
|
119
|
|
|
339
|
|
|
89
|
|
|
154
|
|
|
701
|
|
|||||
Loans charged off
|
(609
|
)
|
|
(61
|
)
|
|
(199
|
)
|
|
(944
|
)
|
|
(1,813
|
)
|
|||||
Balances, March 31, 2018
|
$
|
30,770
|
|
|
$
|
27,705
|
|
|
$
|
3,896
|
|
|
$
|
14,049
|
|
|
$
|
76,420
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019
|
||||||||||||||||||
|
Commercial
|
|
Commercial
Real Estate |
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
Allowance Balances:
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
$
|
1,172
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
420
|
|
|
$
|
1,599
|
|
Collectively evaluated for impairment
|
31,897
|
|
|
29,428
|
|
|
4,025
|
|
|
13,953
|
|
|
79,303
|
|
|||||
Total Allowance for Loan Losses
|
$
|
33,069
|
|
|
$
|
29,434
|
|
|
$
|
4,026
|
|
|
$
|
14,373
|
|
|
$
|
80,902
|
|
Loan Balances:
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
$
|
4,889
|
|
|
$
|
16,667
|
|
|
$
|
15
|
|
|
$
|
2,316
|
|
|
$
|
23,887
|
|
Collectively evaluated for impairment
|
2,289,661
|
|
|
3,352,381
|
|
|
108,201
|
|
|
1,509,622
|
|
|
7,259,865
|
|
|||||
Loans acquired with deteriorated credit quality
|
2,379
|
|
|
12,251
|
|
|
—
|
|
|
938
|
|
|
15,568
|
|
|||||
Loans
|
$
|
2,296,929
|
|
|
$
|
3,381,299
|
|
|
$
|
108,216
|
|
|
$
|
1,512,876
|
|
|
$
|
7,299,320
|
|
|
December 31, 2018
|
||||||||||||||||||
|
Commercial
|
|
Commercial
Real Estate |
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
Allowance Balances:
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
1,435
|
|
|
$
|
1
|
|
|
$
|
436
|
|
|
$
|
1,872
|
|
Collectively evaluated for impairment
|
32,657
|
|
|
28,174
|
|
|
3,963
|
|
|
13,886
|
|
|
78,680
|
|
|||||
Total Allowance for Loan Losses
|
$
|
32,657
|
|
|
$
|
29,609
|
|
|
$
|
3,964
|
|
|
$
|
14,322
|
|
|
$
|
80,552
|
|
Loan Balances:
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
$
|
1,838
|
|
|
$
|
17,756
|
|
|
$
|
18
|
|
|
$
|
2,413
|
|
|
$
|
22,025
|
|
Collectively evaluated for impairment
|
2,248,330
|
|
|
3,347,686
|
|
|
99,770
|
|
|
1,490,872
|
|
|
7,186,658
|
|
|||||
Loans acquired with deteriorated credit quality
|
2,102
|
|
|
12,389
|
|
|
—
|
|
|
1,293
|
|
|
15,784
|
|
|||||
Loans
|
$
|
2,252,270
|
|
|
$
|
3,377,831
|
|
|
$
|
99,788
|
|
|
$
|
1,494,578
|
|
|
$
|
7,224,467
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Commercial and industrial loans
|
$
|
2,498
|
|
|
$
|
1,803
|
|
Agriculture production financing and other loans to farmers
|
2,910
|
|
|
679
|
|
||
Real estate loans:
|
|
|
|
||||
Construction
|
7,533
|
|
|
8,667
|
|
||
Commercial and farmland
|
8,201
|
|
|
8,156
|
|
||
Residential
|
4,473
|
|
|
4,966
|
|
||
Home equity
|
1,963
|
|
|
1,481
|
|
||
Individuals' loans for household and other personal expenditures
|
18
|
|
|
42
|
|
||
Public finance and other commercial loans
|
353
|
|
|
354
|
|
||
Total
|
$
|
27,949
|
|
|
$
|
26,148
|
|
|
March 31, 2019
|
||||||||||
|
Unpaid
Principal Balance |
|
Recorded
Investment |
|
Related
Allowance |
||||||
Impaired loans with no related allowance:
|
|
|
|
|
|
||||||
Commercial and industrial loans
|
$
|
1,920
|
|
|
$
|
1,626
|
|
|
$
|
—
|
|
Agriculture production financing and other loans to farmers
|
807
|
|
|
792
|
|
|
—
|
|
|||
Real estate Loans:
|
|
|
|
|
|
||||||
Construction
|
9,330
|
|
|
7,524
|
|
|
—
|
|
|||
Commercial and farmland
|
10,838
|
|
|
8,973
|
|
|
—
|
|
|||
Residential
|
118
|
|
|
99
|
|
|
—
|
|
|||
Home equity
|
48
|
|
|
48
|
|
|
—
|
|
|||
Public finance and other commercial loans
|
353
|
|
|
353
|
|
|
—
|
|
|||
Total
|
$
|
23,414
|
|
|
$
|
19,415
|
|
|
$
|
—
|
|
Impaired loans with related allowance:
|
|
|
|
|
|
||||||
Agriculture production financing and other loans to farmers
|
$
|
2,167
|
|
|
$
|
2,117
|
|
|
$
|
1,172
|
|
Real estate Loans:
|
|
|
|
|
|
||||||
Commercial and farmland
|
171
|
|
|
171
|
|
|
6
|
|
|||
Residential
|
1,843
|
|
|
1,815
|
|
|
348
|
|
|||
Home equity
|
371
|
|
|
354
|
|
|
72
|
|
|||
Individuals' loans for household and other personal expenditures
|
15
|
|
|
15
|
|
|
1
|
|
|||
Total
|
$
|
4,567
|
|
|
$
|
4,472
|
|
|
$
|
1,599
|
|
Total Impaired Loans
|
$
|
27,981
|
|
|
$
|
23,887
|
|
|
$
|
1,599
|
|
|
December 31, 2018
|
||||||||||
|
Unpaid
Principal Balance |
|
Recorded
Investment |
|
Related
Allowance |
||||||
Impaired loans with no related allowance:
|
|
|
|
|
|
||||||
Commercial and industrial loans
|
$
|
828
|
|
|
$
|
806
|
|
|
$
|
—
|
|
Agriculture production financing and other loans to farmers
|
679
|
|
|
679
|
|
|
—
|
|
|||
Real estate Loans:
|
|
|
|
|
|
||||||
Construction
|
1,352
|
|
|
614
|
|
|
—
|
|
|||
Commercial and farmland
|
11,176
|
|
|
8,994
|
|
|
—
|
|
|||
Residential
|
118
|
|
|
100
|
|
|
—
|
|
|||
Home equity
|
49
|
|
|
48
|
|
|
—
|
|
|||
Public finance and other commercial loans
|
353
|
|
|
353
|
|
|
—
|
|
|||
Total
|
$
|
14,555
|
|
|
$
|
11,594
|
|
|
$
|
—
|
|
Impaired loans with related allowance:
|
|
|
|
|
|
||||||
Real estate Loans:
|
|
|
|
|
|
||||||
Construction
|
$
|
7,978
|
|
|
$
|
7,977
|
|
|
$
|
1,429
|
|
Commercial and farmland
|
171
|
|
|
171
|
|
|
6
|
|
|||
Residential
|
1,958
|
|
|
1,907
|
|
|
362
|
|
|||
Home equity
|
376
|
|
|
358
|
|
|
74
|
|
|||
Individuals' loans for household and other personal expenditures
|
18
|
|
|
18
|
|
|
1
|
|
|||
Total
|
$
|
10,501
|
|
|
$
|
10,431
|
|
|
$
|
1,872
|
|
Total Impaired Loans
|
$
|
25,056
|
|
|
$
|
22,025
|
|
|
$
|
1,872
|
|
|
Three Months Ended March 31, 2019
|
|
Three Months Ended March 31, 2018
|
||||||||||||
|
Average
Recorded Investment |
|
Interest
Income Recognized |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
||||||||
Impaired loans with no related allowance:
|
|
|
|
|
|
|
|
|
|||||||
Commercial and industrial loans
|
$
|
1,641
|
|
|
$
|
—
|
|
|
$
|
1,845
|
|
|
$
|
—
|
|
Agriculture production financing and other loans to farmers
|
799
|
|
|
—
|
|
|
640
|
|
|
—
|
|
||||
Real estate Loans:
|
|
|
|
|
|
|
|
||||||||
Construction
|
8,270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial and farmland
|
8,999
|
|
|
39
|
|
|
14,450
|
|
|
48
|
|
||||
Residential
|
38
|
|
|
1
|
|
|
759
|
|
|
6
|
|
||||
Home equity
|
48
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Individuals' loans for household and other personal expenditures
|
1
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Public finance and other commercial loans
|
353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
20,149
|
|
|
$
|
40
|
|
|
$
|
17,714
|
|
|
$
|
54
|
|
Impaired loans with related allowance:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
465
|
|
|
$
|
—
|
|
Agriculture production financing and other loans to farmers
|
2,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Real estate Loans:
|
|
|
|
|
|
|
|
||||||||
Construction
|
—
|
|
|
—
|
|
|
1,352
|
|
|
—
|
|
||||
Commercial and farmland
|
171
|
|
|
—
|
|
|
767
|
|
|
—
|
|
||||
Residential
|
1,884
|
|
|
15
|
|
|
1,709
|
|
|
12
|
|
||||
Home equity
|
356
|
|
|
3
|
|
|
305
|
|
|
2
|
|
||||
Individuals' loans for household and other personal expenditures
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
4,576
|
|
|
$
|
18
|
|
|
$
|
4,598
|
|
|
$
|
14
|
|
Total Impaired Loans
|
$
|
24,725
|
|
|
$
|
58
|
|
|
$
|
22,312
|
|
|
$
|
68
|
|
|
|
|
|
|
|
|
|
•
|
Pass - Loans that are considered to be of acceptable credit quality.
|
•
|
Special Mention - Loans which possess some credit deficiency or potential weakness, which deserves close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Corporation's credit position at some future date. Special mention assets are not adversely classified and do not expose the Corporation to sufficient risk to warrant adverse classification. The key distinctions of this category's classification are that it is indicative of an unwarranted level of risk; and weaknesses are considered “potential”, not “defined”, impairments to the primary source of repayment. Examples include businesses that may be suffering from inadequate management, loss of key personnel or significant customer or litigation.
|
•
|
Substandard - A substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Other characteristics may include:
|
|
o
|
the likelihood that a loan will be paid from the primary source of repayment is uncertain or financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss,
|
|
o
|
the primary source of repayment is gone, and the Corporation is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees,
|
|
o
|
loans have a distinct possibility that the Corporation will sustain some loss if deficiencies are not corrected,
|
|
o
|
unusual courses of action are needed to maintain a high probability of repayment,
|
|
o
|
the borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments,
|
|
o
|
the Corporation is forced into a subordinated or unsecured position due to flaws in documentation,
|
|
o
|
loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms,
|
|
o
|
the Corporation is seriously contemplating foreclosure or legal action due to the apparent deterioration of the loan, and
|
|
o
|
there is significant deterioration in market conditions to which the borrower is highly vulnerable.
|
•
|
Doubtful - Loans that have all of the weaknesses of those classified as Substandard. However, based on currently existing facts, conditions and values, these weaknesses make full collection of principal highly questionable and improbable. Other credit characteristics may include considerable doubt as to the quality of the secondary sources of repayment. The possibility of loss is high, but because of certain important pending factors that may strengthen the loan, loss classification is deferred until the exact status of repayment is known.
|
•
|
Loss – Loans that are considered uncollectable and of such little value that continuing to carry them as an asset is not warranted. Loans will be classified as Loss when it is neither practical not desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.
|
|
March 31, 2019
|
||||||||||||||||||||||||||||||
|
Commercial
Pass |
|
Commercial
Special Mention |
|
Commercial Substandard
|
|
Commercial
Doubtful |
|
Commercial Loss
|
|
Consumer Performing
|
|
Consumer
Non-Performing |
|
Total
|
||||||||||||||||
Commercial and industrial loans
|
$
|
1,692,964
|
|
|
$
|
59,119
|
|
|
$
|
36,545
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,788,628
|
|
Agriculture production financing and other loans to farmers
|
64,022
|
|
|
6,304
|
|
|
10,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,357
|
|
||||||||
Real estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Construction
|
507,086
|
|
|
949
|
|
|
9,063
|
|
|
—
|
|
|
—
|
|
|
25,403
|
|
|
—
|
|
|
542,501
|
|
||||||||
Commercial and farmland
|
2,640,736
|
|
|
96,353
|
|
|
99,363
|
|
|
—
|
|
|
—
|
|
|
2,346
|
|
|
—
|
|
|
2,838,798
|
|
||||||||
Residential
|
167,197
|
|
|
4,747
|
|
|
2,992
|
|
|
—
|
|
|
—
|
|
|
797,420
|
|
|
4,312
|
|
|
976,668
|
|
||||||||
Home equity
|
24,534
|
|
|
489
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|
508,969
|
|
|
1,814
|
|
|
536,208
|
|
||||||||
Individuals' loans for household and other personal expenditures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108,186
|
|
|
30
|
|
|
108,216
|
|
||||||||
Public finance and other commercial loans
|
427,591
|
|
|
—
|
|
|
353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
427,944
|
|
||||||||
Loans
|
$
|
5,524,130
|
|
|
$
|
167,961
|
|
|
$
|
158,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,442,324
|
|
|
$
|
6,156
|
|
|
$
|
7,299,320
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
Commercial
Pass |
|
Commercial
Special Mention |
|
Commercial Substandard
|
|
Commercial
Doubtful |
|
Commercial Loss
|
|
Consumer Performing
|
|
Consumer
Non-Performing |
|
Total
|
||||||||||||||||
Commercial and industrial loans
|
$
|
1,660,879
|
|
|
$
|
23,246
|
|
|
$
|
42,539
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,726,664
|
|
Agriculture production financing and other loans to farmers
|
78,446
|
|
|
5,966
|
|
|
7,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,404
|
|
||||||||
Real estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Construction
|
492,358
|
|
|
2,185
|
|
|
24,224
|
|
|
—
|
|
|
—
|
|
|
25,419
|
|
|
1,543
|
|
|
545,729
|
|
||||||||
Commercial and farmland
|
2,669,491
|
|
|
76,037
|
|
|
84,288
|
|
|
—
|
|
|
—
|
|
|
2,285
|
|
|
1
|
|
|
2,832,102
|
|
||||||||
Residential
|
170,075
|
|
|
7,373
|
|
|
2,076
|
|
|
—
|
|
|
—
|
|
|
782,080
|
|
|
4,817
|
|
|
966,421
|
|
||||||||
Home equity
|
24,653
|
|
|
535
|
|
|
457
|
|
|
—
|
|
|
—
|
|
|
500,996
|
|
|
1,516
|
|
|
528,157
|
|
||||||||
Individuals' loans for household and other personal expenditures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99,741
|
|
|
47
|
|
|
99,788
|
|
||||||||
Public finance and other commercial loans
|
432,849
|
|
|
—
|
|
|
353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
433,202
|
|
||||||||
Loans
|
$
|
5,528,751
|
|
|
$
|
115,342
|
|
|
$
|
161,929
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,410,521
|
|
|
$
|
7,924
|
|
|
$
|
7,224,467
|
|
|
March 31, 2019
|
||||||||||||||||||||||||||
|
Current
|
|
30-59 Days
Past Due |
|
60-89 Days
Past Due |
|
Loans 90 Days or More Past Due And Accruing
|
|
Non-Accrual
|
|
Total Past Due
& Non-Accrual |
|
Total
|
||||||||||||||
Commercial and industrial loans
|
$
|
1,784,771
|
|
|
$
|
977
|
|
|
$
|
382
|
|
|
$
|
—
|
|
|
$
|
2,498
|
|
|
$
|
3,857
|
|
|
$
|
1,788,628
|
|
Agriculture production financing and other loans to farmers
|
77,435
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
2,910
|
|
|
2,922
|
|
|
80,357
|
|
|||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction
|
534,904
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
7,533
|
|
|
7,597
|
|
|
542,501
|
|
|||||||
Commercial and farmland
|
2,818,380
|
|
|
12,095
|
|
|
—
|
|
|
122
|
|
|
8,201
|
|
|
20,418
|
|
|
2,838,798
|
|
|||||||
Residential
|
965,990
|
|
|
5,666
|
|
|
539
|
|
|
—
|
|
|
4,473
|
|
|
10,678
|
|
|
976,668
|
|
|||||||
Home equity
|
531,874
|
|
|
1,646
|
|
|
725
|
|
|
—
|
|
|
1,963
|
|
|
4,334
|
|
|
536,208
|
|
|||||||
Individuals' loans for household and other personal expenditures
|
107,792
|
|
|
324
|
|
|
70
|
|
|
12
|
|
|
18
|
|
|
424
|
|
|
108,216
|
|
|||||||
Public finance and other commercial loans
|
427,462
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
353
|
|
|
482
|
|
|
427,944
|
|
|||||||
Loans
|
$
|
7,248,608
|
|
|
$
|
20,913
|
|
|
$
|
1,716
|
|
|
$
|
134
|
|
|
$
|
27,949
|
|
|
$
|
50,712
|
|
|
$
|
7,299,320
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
|
Current
|
|
30-59 Days
Past Due |
|
60-89 Days
Past Due |
|
Loans 90 Days or More Past Due And Accruing
|
|
Non-Accrual
|
|
Total Past Due
& Non-Accrual |
|
Total
|
||||||||||||||
Commercial and industrial loans
|
$
|
1,723,337
|
|
|
$
|
1,093
|
|
|
$
|
182
|
|
|
$
|
249
|
|
|
$
|
1,803
|
|
|
$
|
3,327
|
|
|
$
|
1,726,664
|
|
Agriculture production financing and other loans to farmers
|
89,440
|
|
|
2,285
|
|
|
—
|
|
|
—
|
|
|
679
|
|
|
2,964
|
|
|
92,404
|
|
|||||||
Real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction
|
535,520
|
|
|
64
|
|
|
—
|
|
|
1,478
|
|
|
8,667
|
|
|
10,209
|
|
|
545,729
|
|
|||||||
Commercial and farmland
|
2,822,515
|
|
|
1,253
|
|
|
178
|
|
|
—
|
|
|
8,156
|
|
|
9,587
|
|
|
2,832,102
|
|
|||||||
Residential
|
959,252
|
|
|
1,756
|
|
|
430
|
|
|
17
|
|
|
4,966
|
|
|
7,169
|
|
|
966,421
|
|
|||||||
Home equity
|
524,198
|
|
|
2,164
|
|
|
207
|
|
|
107
|
|
|
1,481
|
|
|
3,959
|
|
|
528,157
|
|
|||||||
Individuals' loans for household and other personal expenditures
|
99,499
|
|
|
179
|
|
|
64
|
|
|
4
|
|
|
42
|
|
|
289
|
|
|
99,788
|
|
|||||||
Public finance and other commercial loans
|
432,848
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
354
|
|
|
354
|
|
|
433,202
|
|
|||||||
Loans
|
$
|
7,186,609
|
|
|
$
|
8,794
|
|
|
$
|
1,061
|
|
|
$
|
1,855
|
|
|
$
|
26,148
|
|
|
$
|
37,858
|
|
|
$
|
7,224,467
|
|
|
Three Months Ended March 31, 2019
|
|||||||||
|
Pre-Modification
Recorded Balance |
|
Post-Modification
Recorded Balance |
|
Number
of Loans |
|||||
Real estate loans:
|
|
|
|
|
|
|||||
Residential
|
$
|
90
|
|
|
$
|
90
|
|
|
1
|
|
Total
|
$
|
90
|
|
|
$
|
90
|
|
|
1
|
|
|
Three Months Ended March 31, 2018
|
|||||||||
|
Pre-Modification
Recorded Balance |
|
Post-Modification
Recorded Balance |
|
Number
of Loans |
|||||
Real estate loans:
|
|
|
|
|
|
|||||
Residential
|
$
|
214
|
|
|
$
|
222
|
|
|
5
|
|
Home equity
|
16
|
|
|
16
|
|
|
2
|
|
||
Individuals' loans for household and other personal expenditures
|
7
|
|
|
8
|
|
|
1
|
|
||
Total
|
$
|
237
|
|
|
$
|
246
|
|
|
8
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
Term
Modification |
|
Rate
Modification |
|
Combination
|
|
Total
Modification |
||||||||
Real estate loans:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
90
|
|
Total
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
90
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
|
Term
Modification |
|
Rate
Modification |
|
Combination
|
|
Total
Modification |
||||||||
Real estate loans:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
38
|
|
|
$
|
74
|
|
|
$
|
106
|
|
|
$
|
218
|
|
Home equity
|
16
|
|
|
10
|
|
|
—
|
|
|
26
|
|
||||
Individuals loans for household and other personal expenditures
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Total
|
$
|
54
|
|
|
$
|
91
|
|
|
$
|
106
|
|
|
$
|
251
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
|||||
|
Number of Loans
|
|
Recorded Balance
|
|||
Real estate loans:
|
|
|
|
|||
Residential
|
1
|
|
|
$
|
63
|
|
Total
|
1
|
|
|
$
|
63
|
|
|
Three Months Ended March 31, 2018
|
||||
|
Number of Loans
|
|
Recorded Balance
|
||
Real estate loans:
|
|
|
|
||
Commercial and farmland
|
1
|
|
$
|
324
|
|
Residential
|
3
|
|
108
|
|
|
Total
|
4
|
|
$
|
432
|
|
|
Three Months Ended March 31, 2019
|
|
Three Months Ended March 31, 2018
|
||||
Beginning balance
|
$
|
2,143
|
|
|
$
|
2,890
|
|
Additions
|
—
|
|
|
—
|
|
||
Accretion
|
(580
|
)
|
|
(510
|
)
|
||
Reclassification from nonaccretable
|
501
|
|
|
295
|
|
||
Disposals
|
—
|
|
|
—
|
|
||
Ending balance
|
$
|
2,064
|
|
|
$
|
2,675
|
|
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Gross carrying amount
|
$
|
85,869
|
|
|
$
|
85,869
|
|
Accumulated amortization
|
(62,968
|
)
|
|
(61,440
|
)
|
||
Total other intangibles
|
$
|
22,901
|
|
|
$
|
24,429
|
|
|
Amortization Expense
|
||
2019
|
$
|
3,641
|
|
2020
|
3,632
|
|
|
2021
|
3,427
|
|
|
2022
|
3,325
|
|
|
2023
|
3,175
|
|
|
After 2023
|
5,701
|
|
|
|
$
|
22,901
|
|
|
March 31, 2019
|
||
Operating lease assets
|
$
|
22,576
|
|
Total lease assets
|
$
|
22,576
|
|
|
|
|
|
Operating lease liabilities
|
$
|
23,175
|
|
Total Lease liabilities
|
$
|
23,175
|
|
|
|
||
Weighted average remaining lease term (years)
|
|||
Operating leases
|
9.4
|
|
|
Weighted average discount rate
|
|
||
Operating leases
|
3.39
|
%
|
|
Three Months Ended
March 31, |
||
|
2019
|
||
Lease Cost:
|
|
||
Operating lease cost
|
$
|
892
|
|
Short-term lease cost
|
43
|
|
|
Variable lease cost
|
262
|
|
|
Total lease cost
|
$
|
1,197
|
|
Maturity of lease liabilities
|
Operating Leases
|
||
Remaining 2019
|
$
|
2,601
|
|
2020
|
3,343
|
|
|
2021
|
3,097
|
|
|
2022
|
2,982
|
|
|
2023
|
2,611
|
|
|
2024 and after
|
12,706
|
|
|
Total lease payments
|
$
|
27,340
|
|
Less: Present value discount
|
4,165
|
|
|
Present value of lease liabilities
|
$
|
23,175
|
|
|
|
||
Other Information
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows from operating leases
|
$
|
753
|
|
ROU assets obtained in exchange for new operating lease liabilities
|
$
|
23,324
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||||||
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||
|
Balance
Sheet Location |
|
Fair
Value |
|
Balance
Sheet Location |
|
Fair
Value |
|
Balance
Sheet Location |
|
Fair
Value |
|
Balance
Sheet Location |
|
Fair
Value |
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
Other Assets
|
|
$
|
35
|
|
|
Other Assets
|
|
$
|
135
|
|
|
Other Liabilities
|
|
$
|
972
|
|
|
Other Liabilities
|
|
$
|
688
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
Other Assets
|
|
$
|
14,194
|
|
|
Other Assets
|
|
$
|
11,948
|
|
|
Other Liabilities
|
|
$
|
14,194
|
|
|
Other Liabilities
|
|
$
|
11,948
|
|
Derivatives in Cash Flow Hedging Relationships
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative
(Effective Portion) |
||||||
Three Months Ended
|
|||||||
March 31, 2019
|
|
March 31, 2018
|
|||||
Interest Rate Products
|
$
|
(391
|
)
|
|
$
|
508
|
|
Derivatives Designated as
Hedging Instruments under FASB ASC 815-10 |
|
Location of Gain (Loss)
Recognized Income on Derivative |
|
Amount of Gain (Loss) Reclassed from Other Comprehensive Income into Income (Effective Portion)
|
||||||
|
|
Three Months Ended
March 31, 2019 |
|
Three Months Ended
March 31, 2018 |
||||||
Interest rate contracts
|
|
Interest Expense
|
|
$
|
(59
|
)
|
|
$
|
(170
|
)
|
|
|
|
|
|
|
|
|
Available for Sale Securities
|
||||||
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Balance at beginning of the period
|
$
|
3,328
|
|
|
$
|
3,978
|
|
Included in other comprehensive income
|
43
|
|
|
(25
|
)
|
||
Principal payments
|
(435
|
)
|
|
13
|
|
||
Ending balance
|
$
|
2,936
|
|
|
$
|
3,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
March 31, 2019
|
|
Fair Value
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant Unobservable
Inputs (Level 3) |
||||||||
Impaired loans (collateral dependent)
|
|
$
|
11,728
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,728
|
|
Other real estate owned
|
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
December 31, 2018
|
|
Fair Value
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant Unobservable
Inputs (Level 3) |
||||||||
Impaired loans (collateral dependent)
|
|
$
|
11,866
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,866
|
|
Other real estate owned
|
|
657
|
|
|
—
|
|
|
—
|
|
|
657
|
|
March 31, 2019
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Range (Weighted-Average)
|
||
State and municipal securities
|
$
|
2,901
|
|
|
Discounted cash flow
|
|
Maturity/Call date
|
|
1 month to 15 yrs
|
|
|
|
|
|
US Muni BQ curve
|
|
A- to BBB-
|
||
|
|
|
|
|
Discount rate
|
|
2% - 5%
|
||
|
|
|
|
|
|
|
|
||
Corporate obligations and U.S. Government-sponsored mortgage backed securities
|
$
|
35
|
|
|
Discounted cash flow
|
|
Risk free rate
|
|
3 month LIBOR
|
|
|
|
|
|
plus premium for illiquidity
|
|
plus 200bps
|
||
|
|
|
|
|
|
|
|
||
Impaired loans (collateral dependent)
|
$
|
11,728
|
|
|
Collateral based measurements
|
|
Discount to reflect current market conditions and ultimate collectability
|
|
0% - 10% (5%)
|
|
|
|
|
|
|
|
|
||
Other real estate owned
|
$
|
112
|
|
|
Appraisals
|
|
Discount to reflect current market conditions
|
|
0% - 51% (51%)
|
December 31, 2018
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Range (Weighted-Average)
|
||
State and municipal securities
|
$
|
3,293
|
|
|
Discounted cash flow
|
|
Maturity/Call date
|
|
1 month to 20 yrs
|
|
|
|
|
|
US Muni BQ curve
|
|
A- to BBB-
|
||
|
|
|
|
|
Discount rate
|
|
.69% - 5%
|
||
|
|
|
|
|
|
|
|
||
Corporate obligations and equity securities
|
$
|
35
|
|
|
Discounted cash flow
|
|
Risk free rate
|
|
3 month LIBOR
|
|
|
|
|
|
plus premium for illiquidity
|
|
plus 200bps
|
||
|
|
|
|
|
|
|
|
||
Impaired loans (collateral dependent)
|
$
|
11,866
|
|
|
Collateral based measurements
|
|
Discount to reflect current market conditions and ultimate collectability
|
|
0% - 10% (6%)
|
|
|
|
|
|
|
|
|
||
Other real estate owned
|
$
|
657
|
|
|
Appraisals
|
|
Discount to reflect current market conditions
|
|
0% - 10% (4%)
|
|
|
|
March 31, 2019
|
|
|
||||||||||
|
|
|
Quoted Prices in Active Markets
for Identical Assets |
|
Significant
Other Observable Inputs |
|
Significant Unobservable
Inputs |
||||||||
|
Carrying Amount
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
115,878
|
|
|
$
|
115,878
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing time deposits
|
70,672
|
|
|
70,672
|
|
|
—
|
|
|
—
|
|
||||
Investment securities available for sale
|
1,247,632
|
|
|
—
|
|
|
1,244,697
|
|
|
2,936
|
|
||||
Investment securities held to maturity
|
615,027
|
|
|
—
|
|
|
615,182
|
|
|
7,453
|
|
||||
Loans held for sale
|
3,330
|
|
|
—
|
|
|
3,330
|
|
|
—
|
|
||||
Loans
|
7,218,418
|
|
|
—
|
|
|
—
|
|
|
7,140,432
|
|
||||
Federal Home Loan Bank stock
|
24,588
|
|
|
—
|
|
|
24,588
|
|
|
—
|
|
||||
Interest rate swap and cap asset
|
14,229
|
|
|
—
|
|
|
14,229
|
|
|
—
|
|
||||
Interest receivable
|
40,931
|
|
|
—
|
|
|
40,931
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
$
|
8,047,798
|
|
|
$
|
6,439,422
|
|
|
$
|
1,576,603
|
|
|
$
|
—
|
|
Borrowings:
|
|
|
|
|
|
|
|
||||||||
Federal funds purchased
|
20,000
|
|
|
—
|
|
|
20,000
|
|
|
—
|
|
||||
Securities sold under repurchase agreements
|
111,783
|
|
|
—
|
|
|
111,742
|
|
|
—
|
|
||||
Federal Home Loan Bank advances
|
345,013
|
|
|
—
|
|
|
342,283
|
|
|
—
|
|
||||
Subordinated debentures and term loans
|
138,519
|
|
|
—
|
|
|
129,020
|
|
|
—
|
|
||||
Interest rate swap liability
|
15,166
|
|
|
—
|
|
|
15,166
|
|
|
—
|
|
||||
Interest payable
|
7,313
|
|
|
—
|
|
|
7,313
|
|
|
—
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||
|
|
|
Quoted Prices in Active Markets
for Identical Assets |
|
Significant
Other Observable Inputs |
|
Significant Unobservable
Inputs |
||||||||
|
Carrying Amount
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
139,247
|
|
|
$
|
139,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing time deposits
|
36,963
|
|
|
36,963
|
|
|
—
|
|
|
—
|
|
||||
Investment securities available for sale
|
1,142,195
|
|
|
—
|
|
|
1,138,867
|
|
|
3,328
|
|
||||
Investment securities held to maturity
|
490,387
|
|
|
—
|
|
|
481,377
|
|
|
7,840
|
|
||||
Loans held for sale
|
4,778
|
|
|
—
|
|
|
4,778
|
|
|
—
|
|
||||
Loans
|
7,143,915
|
|
|
—
|
|
|
—
|
|
|
7,004,193
|
|
||||
Federal Home Loan Bank stock
|
24,588
|
|
|
—
|
|
|
24,588
|
|
|
—
|
|
||||
Interest rate swap and cap asset
|
12,083
|
|
|
—
|
|
|
12,083
|
|
|
—
|
|
||||
Interest receivable
|
40,881
|
|
|
—
|
|
|
40,881
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
$
|
7,754,593
|
|
|
$
|
6,267,879
|
|
|
$
|
1,464,129
|
|
|
$
|
—
|
|
Borrowings:
|
|
|
|
|
|
|
|
||||||||
Federal funds purchased
|
104,000
|
|
|
—
|
|
|
104,000
|
|
|
—
|
|
||||
Securities sold under repurchase agreements
|
113,512
|
|
|
—
|
|
|
113,437
|
|
|
—
|
|
||||
Federal Home Loan Bank advances
|
314,986
|
|
|
—
|
|
|
318,728
|
|
|
—
|
|
||||
Subordinated debentures and term loans
|
138,463
|
|
|
—
|
|
|
127,298
|
|
|
—
|
|
||||
Interest rate swap liability
|
12,636
|
|
|
—
|
|
|
12,636
|
|
|
—
|
|
||||
Interest payable
|
5,607
|
|
|
—
|
|
|
5,607
|
|
|
—
|
|
|
March 31, 2019
|
||||||||||||||||||
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
30-90 Days
|
|
Greater Than 90 Days
|
|
Total
|
||||||||||
U.S. Government-sponsored mortgage-backed securities
|
$
|
110,760
|
|
|
$
|
—
|
|
|
$
|
1,023
|
|
|
$
|
—
|
|
|
$
|
111,783
|
|
|
December 31, 2018
|
||||||||||||||||||
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
30-90 Days
|
|
Greater Than 90 Days
|
|
Total
|
||||||||||
U.S. Government-sponsored mortgage-backed securities
|
$
|
104,883
|
|
|
$
|
1,014
|
|
|
$
|
7,615
|
|
|
$
|
—
|
|
|
$
|
113,512
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||
|
Unrealized Gains (Losses) on Securities Available for Sale
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Defined Benefit Plans
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(6,343
|
)
|
|
$
|
(559
|
)
|
|
$
|
(14,520
|
)
|
|
$
|
(21,422
|
)
|
Other comprehensive income before reclassifications
|
20,990
|
|
|
(309
|
)
|
|
—
|
|
|
20,681
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(901
|
)
|
|
47
|
|
|
—
|
|
|
(854
|
)
|
||||
Period change
|
20,089
|
|
|
(262
|
)
|
|
—
|
|
|
19,827
|
|
||||
Balance at March 31, 2019
|
$
|
13,746
|
|
|
$
|
(821
|
)
|
|
$
|
(14,520
|
)
|
|
$
|
(1,595
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2017
|
$
|
8,970
|
|
|
$
|
(1,125
|
)
|
|
$
|
(10,753
|
)
|
|
$
|
(2,908
|
)
|
Other comprehensive income before reclassifications
|
(17,698
|
)
|
|
644
|
|
|
—
|
|
|
(17,054
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(1,271
|
)
|
|
134
|
|
|
—
|
|
|
(1,137
|
)
|
||||
Period change
|
(18,969
|
)
|
|
778
|
|
|
—
|
|
|
(18,191
|
)
|
||||
Reclassification adjustment under ASU 2018-02
|
1,932
|
|
|
(242
|
)
|
|
(2,316
|
)
|
|
(626
|
)
|
||||
Balance at March 31, 2018
|
$
|
(8,067
|
)
|
|
$
|
(589
|
)
|
|
$
|
(13,069
|
)
|
|
$
|
(21,725
|
)
|
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) For the Three Months Ended March 31,
|
|
|
||||||
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
2019
|
|
2018
|
|
Affected Line Item in the Statements of Income
|
||||
Unrealized gains (losses) on available for sale securities (1)
|
|
|
|
|
|
|
||||
Realized securities gains reclassified into income
|
|
$
|
1,140
|
|
|
$
|
1,609
|
|
|
Other income - net realized gains on sales of available for sale securities
|
Related income tax expense
|
|
(239
|
)
|
|
(338
|
)
|
|
Income tax expense
|
||
|
|
$
|
901
|
|
|
$
|
1,271
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains (losses) on cash flow hedges (2)
|
|
|
|
|
|
|
||||
Interest rate contracts
|
|
$
|
(59
|
)
|
|
$
|
(170
|
)
|
|
Interest expense - subordinated debentures and term loans
|
Related income tax benefit
|
|
12
|
|
|
36
|
|
|
Income tax expense
|
||
|
|
$
|
(47
|
)
|
|
$
|
(134
|
)
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
|
$
|
854
|
|
|
$
|
1,137
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Stock and ESPP Options
|
|
|
|
||||
Pre-tax compensation expense
|
$
|
11
|
|
|
$
|
24
|
|
Income tax benefit
|
(16
|
)
|
|
(59
|
)
|
||
Stock and ESPP option expense, net of income taxes
|
$
|
(5
|
)
|
|
$
|
(35
|
)
|
Restricted Stock Awards
|
|
|
|
||||
Pre-tax compensation expense
|
$
|
970
|
|
|
$
|
851
|
|
Income tax benefit
|
(540
|
)
|
|
(566
|
)
|
||
Restricted stock awards expense, net of income taxes
|
$
|
430
|
|
|
$
|
285
|
|
Total Share-Based Compensation
|
|
|
|
||||
Pre-tax compensation expense
|
$
|
981
|
|
|
$
|
875
|
|
Income tax benefit
|
(556
|
)
|
|
(625
|
)
|
||
Total share-based compensation expense, net of income taxes
|
$
|
425
|
|
|
$
|
250
|
|
|
Number of
Shares |
|
Weighted-Average Exercise Price
|
|
Weighted Average Remaining
Contractual Term (in Years) |
|
Aggregate
Intrinsic Value |
|||||
Outstanding at January 1, 2019
|
76,300
|
|
|
$
|
12.40
|
|
|
|
|
|
||
Exercised
|
(3,700
|
)
|
|
$
|
10.88
|
|
|
|
|
|
||
Cancelled
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding March 31, 2019
|
72,600
|
|
|
$
|
12.48
|
|
|
2.73
|
|
$
|
1,769,628
|
|
Vested and Expected to Vest at March 31, 2019
|
72,600
|
|
|
$
|
12.48
|
|
|
2.73
|
|
$
|
1,769,628
|
|
Exercisable at March 31, 2019
|
72,600
|
|
|
$
|
12.48
|
|
|
2.73
|
|
$
|
1,769,628
|
|
|
Number of Shares
|
|
Weighted-Average
Grant Date Fair Value |
|||
Unvested RSAs at January 1, 2019
|
344,362
|
|
|
$
|
36.80
|
|
Granted
|
700
|
|
|
$
|
37.44
|
|
Vested
|
(103,660
|
)
|
|
$
|
23.41
|
|
Forfeited
|
(600
|
)
|
|
$
|
35.62
|
|
Unvested RSAs at March 31, 2019
|
240,802
|
|
|
$
|
42.57
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Reconciliation of Federal Statutory to Actual Tax Expense:
|
|
|
|
||||
Federal statutory income tax at 21%
|
$
|
9,609
|
|
|
$
|
9,091
|
|
Tax-exempt interest income
|
(2,267
|
)
|
|
(2,015
|
)
|
||
Share-based compensation
|
(350
|
)
|
|
(441
|
)
|
||
Tax-exempt earnings and gains on life insurance
|
(207
|
)
|
|
(247
|
)
|
||
Tax credits
|
(78
|
)
|
|
39
|
|
||
Other
|
234
|
|
|
184
|
|
||
Actual Tax Expense
|
$
|
6,941
|
|
|
$
|
6,611
|
|
|
|
|
|
|
|
||
Effective Tax Rate
|
15.2
|
%
|
|
15.3
|
%
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Net Income
|
|
Weighted-Average Shares
|
|
Per Share
Amount |
|
Net Income
|
|
Weighted-Average Shares
|
|
Per Share
Amount |
||||||||||
Net income available to common stockholders
|
$
|
38,817
|
|
|
49,369,024
|
|
|
$
|
0.79
|
|
|
$
|
36,679
|
|
|
49,192,647
|
|
|
$
|
0.75
|
|
Effect of potentially dilutive stock options and restricted stock awards
|
|
|
171,820
|
|
|
|
|
|
|
235,325
|
|
|
|
||||||||
Diluted net income per share
|
$
|
38,817
|
|
|
49,540,844
|
|
|
$
|
0.78
|
|
|
$
|
36,679
|
|
|
49,427,972
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
statements of our goals, intentions and expectations;
|
•
|
statements regarding our business plan and growth strategies;
|
•
|
statements regarding the asset quality of our loan and investment portfolios; and
|
•
|
estimates of our risks and future costs and benefits.
|
•
|
fluctuations in market rates of interest and loan and deposit pricing, which could negatively affect our net interest margin, asset valuations and expense expectations;
|
•
|
adverse changes in the economy, which might affect our business prospects and could cause credit-related losses and expenses;
|
•
|
adverse developments in our loan and investment portfolios;
|
•
|
competitive factors in the banking industry, such as the trend towards consolidation in our market;
|
•
|
changes in the banking legislation or the regulatory requirements of federal and state agencies applicable to bank holding companies and banks like our affiliate bank;
|
•
|
acquisitions of other businesses by us and integration of such acquired businesses;
|
•
|
changes in market, economic, operational, liquidity, credit and interest rate risks associated with our business; and
|
•
|
the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends.
|
•
|
calculate the FDIC deposit assessment base using a performance score and a loss-severity scoring system; and
|
•
|
be examined for compliance with federal consumer protection laws primarily by the Consumer Financial Protection Bureau.
|
•
|
increases to the cost of the Corporation’s operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, including higher deposit insurance premiums;
|
•
|
limitations on the Corporation’s ability to raise additional capital through the use of trust preferred securities, as new issuances of these securities may no longer be included as Tier 1 capital;
|
•
|
reduced flexibility for the Corporation to generate or originate certain revenue-producing assets based on increased regulatory capital standards; and
|
•
|
limitations on the Corporation’s ability to expand consumer product and service offerings due to stricter consumer protection laws and regulations.
|
•
|
as the Corporation's assets have now exceeded $10 billion, compliance with the Durbin Amendment will result in a material reduction of interchange fee income paid by merchants when debit cards are used as payment.
|
(Dollars in Thousands)
|
Three Months Ended
|
||||||||||||||||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||||||||
|
Average Balance
|
|
Interest
Income / Expense |
|
Average
Rate |
|
Average Balance
|
|
Interest
Income / Expense |
|
Average
Rate |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing time deposits
|
$
|
145,935
|
|
|
$
|
875
|
|
|
2.40
|
%
|
|
$
|
32,776
|
|
|
$
|
131
|
|
|
1.60
|
%
|
Federal Home Loan Bank stock
|
24,588
|
|
|
338
|
|
|
5.50
|
|
|
24,385
|
|
|
404
|
|
|
6.63
|
|
||||
Investment Securities: (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
902,402
|
|
|
6,095
|
|
|
2.70
|
|
|
810,385
|
|
|
5,096
|
|
|
2.52
|
|
||||
Tax-Exempt (2)
|
829,085
|
|
|
8,697
|
|
|
4.20
|
|
|
736,544
|
|
|
7,754
|
|
|
4.21
|
|
||||
Total Investment Securities
|
1,731,487
|
|
|
14,792
|
|
|
3.42
|
|
|
1,546,929
|
|
|
12,850
|
|
|
3.32
|
|
||||
Loans held for sale
|
9,703
|
|
|
112
|
|
|
4.62
|
|
|
10,636
|
|
|
137
|
|
|
5.15
|
|
||||
Loans: (3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
5,309,998
|
|
|
72,758
|
|
|
5.48
|
|
|
4,980,450
|
|
|
62,154
|
|
|
4.99
|
|
||||
Real Estate Mortgage
|
743,736
|
|
|
8,321
|
|
|
4.48
|
|
|
728,725
|
|
|
7,999
|
|
|
4.39
|
|
||||
Installment
|
665,050
|
|
|
9,290
|
|
|
5.59
|
|
|
623,429
|
|
|
7,977
|
|
|
5.12
|
|
||||
Tax-Exempt (2)
|
501,632
|
|
|
5,257
|
|
|
4.19
|
|
|
467,847
|
|
|
4,552
|
|
|
3.89
|
|
||||
Total Loans
|
7,230,119
|
|
|
95,738
|
|
|
5.30
|
|
|
6,811,087
|
|
|
82,819
|
|
|
4.86
|
|
||||
Total Earning Assets
|
9,132,129
|
|
|
111,743
|
|
|
4.89
|
%
|
|
8,415,177
|
|
|
96,204
|
|
|
4.57
|
%
|
||||
Net unrealized gain (loss) on securities available for sale
|
(5,015
|
)
|
|
|
|
|
|
|
(6,440
|
)
|
|
|
|
|
|||||||
Allowance for loan losses
|
(80,907
|
)
|
|
|
|
|
|
|
(75,851
|
)
|
|
|
|
|
|||||||
Cash and cash equivalents
|
117,224
|
|
|
|
|
|
|
|
126,484
|
|
|
|
|
|
|||||||
Premises and equipment
|
93,236
|
|
|
|
|
|
|
|
95,525
|
|
|
|
|
|
|||||||
Other assets
|
823,475
|
|
|
|
|
|
|
|
817,841
|
|
|
|
|
|
|||||||
Total Assets
|
$
|
10,080,142
|
|
|
|
|
|
|
|
$
|
9,372,736
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing NOW deposits
|
$
|
2,689,797
|
|
|
$
|
7,019
|
|
|
1.04
|
%
|
|
$
|
1,980,141
|
|
|
$
|
2,689
|
|
|
0.54
|
%
|
Money market deposits
|
1,139,062
|
|
|
2,782
|
|
|
0.98
|
|
|
1,089,694
|
|
|
1,275
|
|
|
0.47
|
|
||||
Savings deposits
|
1,150,725
|
|
|
2,267
|
|
|
0.79
|
|
|
945,940
|
|
|
381
|
|
|
0.16
|
|
||||
Certificates and other time deposits
|
1,565,578
|
|
|
7,526
|
|
|
1.92
|
|
|
1,486,093
|
|
|
4,657
|
|
|
1.25
|
|
||||
Total Interest-bearing Deposits
|
6,545,162
|
|
|
19,594
|
|
|
1.20
|
|
|
5,501,868
|
|
|
9,002
|
|
|
0.65
|
|
||||
Borrowings
|
635,058
|
|
|
4,353
|
|
|
2.74
|
|
|
848,208
|
|
|
4,702
|
|
|
2.22
|
|
||||
Total Interest-bearing Liabilities
|
7,180,220
|
|
|
23,947
|
|
|
1.33
|
|
|
6,350,076
|
|
|
13,704
|
|
|
0.86
|
|
||||
Noninterest-bearing deposits
|
1,391,494
|
|
|
|
|
|
|
|
1,651,296
|
|
|
|
|
|
|||||||
Other liabilities
|
78,689
|
|
|
|
|
|
|
|
62,560
|
|
|
|
|
|
|||||||
Total Liabilities
|
8,650,403
|
|
|
|
|
|
|
|
8,063,932
|
|
|
|
|
|
|||||||
Stockholders' Equity
|
1,429,739
|
|
|
|
|
|
|
|
1,308,804
|
|
|
|
|
|
|||||||
Total Liabilities and Stockholders' Equity
|
$
|
10,080,142
|
|
|
23,947
|
|
|
|
|
|
$
|
9,372,736
|
|
|
13,704
|
|
|
|
|
||
Net Interest Income (FTE)
|
|
|
$
|
87,796
|
|
|
|
|
|
|
$
|
82,500
|
|
|
|
||||||
Net Interest Spread (FTE) (4)
|
|
|
|
|
3.56
|
%
|
|
|
|
|
|
3.71
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Interest Margin (FTE):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Income (FTE) / Average Earning Assets
|
|
|
|
|
4.89
|
%
|
|
|
|
|
|
4.57
|
%
|
||||||||
Interest Expense / Average Earning Assets
|
|
|
|
|
1.05
|
%
|
|
|
|
|
|
0.65
|
%
|
||||||||
Net Interest Margin (FTE) (5)
|
|
|
|
|
3.84
|
%
|
|
|
|
|
|
3.92
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(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 utilizing 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 2019 and 2018. These totals equal $2,930 and $2,584 for the three months ended March 31, 2019 and 2018, 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prompt Corrective Action Thresholds
|
|||||||||||||||||
|
Actual
|
|
Adequately Capitalized
|
|
Well Capitalized
|
|||||||||||||||
March 31, 2019
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
Total risk-based capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
First Merchants Corporation
|
$
|
1,203,178
|
|
|
14.71
|
%
|
|
$
|
654,134
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,101,943
|
|
|
13.39
|
|
|
658,485
|
|
|
8.00
|
|
|
$
|
823,106
|
|
|
10.00
|
%
|
||
Tier 1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
First Merchants Corporation
|
$
|
1,057,276
|
|
|
12.93
|
%
|
|
$
|
490,601
|
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,021,041
|
|
|
12.40
|
|
|
493,864
|
|
|
6.00
|
|
|
$
|
658,485
|
|
|
8.00
|
%
|
||
CET1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
First Merchants Corporation
|
$
|
991,079
|
|
|
12.12
|
%
|
|
$
|
367,950
|
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,021,041
|
|
|
12.40
|
|
|
370,398
|
|
|
4.50
|
|
|
$
|
535,019
|
|
|
6.50
|
%
|
||
Tier 1 capital to average assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
First Merchants Corporation
|
$
|
1,057,276
|
|
|
11.00
|
%
|
|
$
|
384,556
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,021,041
|
|
|
10.62
|
|
|
384,571
|
|
|
4.00
|
|
|
$
|
480,713
|
|
|
5.00
|
%
|
|
|
|
Prompt Corrective Action Thresholds
|
|||||||||||||||||
|
Actual
|
|
Adequately Capitalized
|
|
Well Capitalized
|
|||||||||||||||
December 31, 2018
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
Total risk-based capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
First Merchants Corporation
|
$
|
1,177,725
|
|
|
14.61
|
%
|
|
$
|
644,871
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,092,602
|
|
|
13.46
|
|
|
649,531
|
|
|
8.00
|
|
|
$
|
811,914
|
|
|
10.00
|
%
|
||
Tier 1 capital to risk weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
First Merchants Corporation
|
$
|
1,032,173
|
|
|
12.80
|
%
|
|
$
|
483,653
|
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,012,050
|
|
|
12.47
|
|
|
487,148
|
|
|
6.00
|
|
|
$
|
649,531
|
|
|
8.00
|
%
|
||
CET1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
First Merchants Corporation
|
$
|
966,032
|
|
|
11.98
|
%
|
|
$
|
362,740
|
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,012,050
|
|
|
12.47
|
|
|
365,361
|
|
|
4.50
|
|
|
$
|
527,744
|
|
|
6.50
|
%
|
||
Tier 1 capital to average assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
First Merchants Corporation
|
$
|
1,032,173
|
|
|
10.91
|
%
|
|
$
|
378,379
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Merchants Bank
|
1,012,050
|
|
|
10.70
|
|
|
379,397
|
|
|
4.00
|
|
|
$
|
472,996
|
|
|
5.00
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(Dollars in thousands, except per share amounts)
|
First Merchants Corporation
|
|
First Merchants Bank
|
|
First Merchants Corporation
|
|
First Merchants Bank
|
||||||||
Total Risk-Based Capital
|
|
|
|
|
|
|
|
||||||||
Total Stockholders' Equity (GAAP)
|
$
|
1,455,848
|
|
|
$
|
1,487,947
|
|
|
$
|
1,408,260
|
|
|
$
|
1,456,220
|
|
Adjust for Accumulated Other Comprehensive (Income) Loss (1)
|
1,595
|
|
|
(908
|
)
|
|
21,422
|
|
|
19,031
|
|
||||
Less: Preferred Stock
|
(125
|
)
|
|
(125
|
)
|
|
(125
|
)
|
|
(125
|
)
|
||||
Add: Qualifying Capital Securities
|
66,197
|
|
|
—
|
|
|
66,141
|
|
|
—
|
|
||||
Less: Disallowed Goodwill and Intangible Assets
|
(462,202
|
)
|
|
(461,754
|
)
|
|
(463,525
|
)
|
|
(463,076
|
)
|
||||
Less: Disallowed Deferred Tax Assets
|
(4,037
|
)
|
|
(4,119
|
)
|
|
—
|
|
|
—
|
|
||||
Total Tier 1 Capital (Regulatory)
|
1,057,276
|
|
|
1,021,041
|
|
|
1,032,173
|
|
|
1,012,050
|
|
||||
Qualifying Subordinated Debentures
|
65,000
|
|
|
—
|
|
|
65,000
|
|
|
—
|
|
||||
Allowance for Loan Losses Includible in Tier 2 Capital
|
80,902
|
|
|
80,902
|
|
|
80,552
|
|
|
80,552
|
|
||||
Total Risk-Based Capital (Regulatory)
|
$
|
1,203,178
|
|
|
$
|
1,101,943
|
|
|
$
|
1,177,725
|
|
|
$
|
1,092,602
|
|
|
|
|
|
|
|
|
|
||||||||
Net Risk-Weighted Assets (Regulatory)
|
$
|
8,176,677
|
|
|
$
|
8,231,059
|
|
|
$
|
8,060,882
|
|
|
$
|
8,119,141
|
|
Average Assets
|
$
|
9,613,903
|
|
|
$
|
9,614,269
|
|
|
$
|
9,459,477
|
|
|
$
|
9,459,925
|
|
|
|
|
|
|
|
|
|
||||||||
Total Risk-Based Capital Ratio (Regulatory)
|
14.71
|
%
|
|
13.39
|
%
|
|
14.61
|
%
|
|
13.46
|
%
|
||||
Tier 1 Capital to Risk-Weighted Assets
|
12.93
|
%
|
|
12.40
|
%
|
|
12.80
|
%
|
|
12.47
|
%
|
||||
Tier 1 Capital to Average Assets
|
11.00
|
%
|
|
10.62
|
%
|
|
10.91
|
%
|
|
10.70
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
CET1 Capital Ratio
|
|
|
|
|
|
|
|
||||||||
Total Tier 1 Capital (Regulatory)
|
$
|
1,057,276
|
|
|
$
|
1,021,041
|
|
|
$
|
1,032,173
|
|
|
$
|
1,012,050
|
|
Less: Qualified Capital Securities
|
(66,197
|
)
|
|
—
|
|
|
(66,141
|
)
|
|
—
|
|
||||
CET1 Capital (Regulatory)
|
$
|
991,079
|
|
|
$
|
1,021,041
|
|
|
$
|
966,032
|
|
|
$
|
1,012,050
|
|
|
|
|
|
|
|
|
|
||||||||
Net Risk-Weighted Assets (Regulatory)
|
$
|
8,176,677
|
|
|
$
|
8,231,059
|
|
|
$
|
8,060,882
|
|
|
$
|
8,119,141
|
|
CET1 Capital Ratio (Regulatory)
|
12.12
|
%
|
|
12.40
|
%
|
|
11.98
|
%
|
|
12.47
|
%
|
|
Tangible Common Equity to Tangible Assets (non-GAAP)
|
||||||
(Dollars in thousands, except per share amounts)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Total Stockholders' Equity (GAAP)
|
$
|
1,455,848
|
|
|
$
|
1,408,260
|
|
Less: Cumulative preferred stock (GAAP)
|
(125
|
)
|
|
(125
|
)
|
||
Less: Intangible assets (GAAP)
|
(468,256
|
)
|
|
(469,784
|
)
|
||
Tangible common equity (non-GAAP)
|
$
|
987,467
|
|
|
$
|
938,351
|
|
Total assets (GAAP)
|
$
|
10,210,925
|
|
|
$
|
9,884,716
|
|
Less: Intangible assets (GAAP)
|
(468,256
|
)
|
|
(469,784
|
)
|
||
Tangible assets (non-GAAP)
|
$
|
9,742,669
|
|
|
$
|
9,414,932
|
|
Stockholders' Equity to Assets (GAAP)
|
14.26
|
%
|
|
14.25
|
%
|
||
Tangible common equity to tangible assets (non-GAAP)
|
10.14
|
%
|
|
9.97
|
%
|
||
|
|
|
|
||||
|
|
|
|
||||
Tangible common equity (non-GAAP)
|
$
|
987,467
|
|
|
$
|
938,351
|
|
Plus: Tax Benefit of intangibles (non-GAAP)
|
4,703
|
|
|
5,017
|
|
||
Tangible common equity, net of tax (non-GAAP)
|
$
|
992,170
|
|
|
$
|
943,368
|
|
Common Stock outstanding
|
49,428
|
|
|
49,350
|
|
||
Book Value (GAAP)
|
$
|
29.45
|
|
|
$
|
28.54
|
|
Tangible book value - common (non-GAAP)
|
$
|
20.07
|
|
|
$
|
19.12
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in thousands, except per share amounts)
|
2019
|
|
2018
|
||||
Average goodwill (GAAP)
|
$
|
445,354
|
|
|
$
|
445,354
|
|
Average core deposit intangible (GAAP)
|
23,819
|
|
|
30,305
|
|
||
Average deferred tax on CDI (GAAP)
|
(4,891
|
)
|
|
(6,225
|
)
|
||
Intangible adjustment (non-GAAP)
|
$
|
464,282
|
|
|
$
|
469,434
|
|
Average stockholders' equity (GAAP)
|
$
|
1,429,739
|
|
|
$
|
1,308,804
|
|
Average cumulative preferred stock (GAAP)
|
(125
|
)
|
|
(125
|
)
|
||
Intangible adjustment (non-GAAP)
|
(464,282
|
)
|
|
(469,434
|
)
|
||
Average tangible capital (non-GAAP)
|
$
|
965,332
|
|
|
$
|
839,245
|
|
Average assets (GAAP)
|
$
|
10,080,142
|
|
|
$
|
9,372,736
|
|
Intangible adjustment (non-GAAP)
|
(464,282
|
)
|
|
(469,434
|
)
|
||
Average tangible assets (non-GAAP)
|
$
|
9,615,860
|
|
|
$
|
8,903,302
|
|
Net income available to common stockholders (GAAP)
|
$
|
38,817
|
|
|
$
|
36,679
|
|
CDI amortization, net of tax (GAAP)
|
1,207
|
|
|
1,364
|
|
||
Tangible net income available to common stockholders (non-GAAP)
|
$
|
40,024
|
|
|
$
|
38,043
|
|
Per Share Data:
|
|
|
|
||||
Diluted net income available to common stockholders (GAAP)
|
$
|
0.78
|
|
|
$
|
0.74
|
|
Diluted tangible net income available to common stockholders (non-GAAP)
|
$
|
0.81
|
|
|
$
|
0.77
|
|
Ratios:
|
|
|
|
||||
Return on average GAAP capital (ROE)
|
10.86
|
%
|
|
11.21
|
%
|
||
Return on average tangible capital
|
16.58
|
%
|
|
18.13
|
%
|
||
Return on average assets (ROA)
|
1.54
|
%
|
|
1.57
|
%
|
||
Return on average tangible assets
|
1.66
|
%
|
|
1.71
|
%
|
(Dollars in Thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Non-Performing Assets:
|
|
|
|
|
|
|
||
Non-accrual loans
|
|
$
|
27,949
|
|
|
$
|
26,148
|
|
Renegotiated loans
|
|
709
|
|
|
1,103
|
|
||
Non-performing loans (NPL)
|
|
28,658
|
|
|
27,251
|
|
||
Other real estate owned
|
|
1,877
|
|
|
2,179
|
|
||
Non-performing assets (NPA)
|
|
30,535
|
|
|
29,430
|
|
||
Loans 90-days or more delinquent and still accruing
|
|
134
|
|
|
1,855
|
|
||
NPAs and loans 90-days or more delinquent
|
|
$
|
30,669
|
|
|
$
|
31,285
|
|
Impaired Loans
|
|
$
|
23,887
|
|
|
$
|
22,025
|
|
(Dollars in Thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Non-performing assets and loans 90-days or more delinquent:
|
|
|
|
||||
Commercial and industrial loans
|
$
|
2,498
|
|
|
$
|
2,052
|
|
Agricultural production financing and other loans to farmers
|
2,910
|
|
|
679
|
|
||
Real estate loans:
|
|
|
|
||||
Construction
|
8,969
|
|
|
11,606
|
|
||
Commercial and farmland
|
8,574
|
|
|
8,682
|
|
||
Residential
|
5,344
|
|
|
5,987
|
|
||
Home equity
|
1,991
|
|
|
1,815
|
|
||
Individuals' loans for household and other personal expenditures
|
30
|
|
|
110
|
|
||
Public finance and other commercial loans
|
353
|
|
|
354
|
|
||
Non-performing assets and loans 90-days or more delinquent:
|
$
|
30,669
|
|
|
$
|
31,285
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in Thousands)
|
2019
|
|
2018
|
||||
Net charge-offs (Recoveries):
|
|
|
|
||||
Commercial and industrial loans
|
$
|
(123
|
)
|
|
$
|
443
|
|
Agricultural production financing and other loans to farmers
|
19
|
|
|
47
|
|
||
Real estate loans:
|
|
|
|
||||
Construction
|
957
|
|
|
2
|
|
||
Commercial and farmland
|
(13
|
)
|
|
(280
|
)
|
||
Residential
|
80
|
|
|
450
|
|
||
Home equity
|
(41
|
)
|
|
340
|
|
||
Individuals' loans for household and other personal expenditures
|
43
|
|
|
110
|
|
||
Public finance and other commercial loans
|
(72
|
)
|
|
—
|
|
||
Total net charge-offs
|
$
|
850
|
|
|
$
|
1,112
|
|
(Dollars in Thousands)
|
Remaining
2019 |
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and
after |
|
ASC 805 fair value adjustments at acquisition
|
|
Total
|
||||||||||||||||||
Federal funds purchased
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
Securities sold under repurchase agreements
|
111,783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,783
|
|
|||||||||
Federal Home Loan Bank advances
|
113,740
|
|
|
41,273
|
|
|
55,000
|
|
|
45,000
|
|
|
65,000
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
345,013
|
|
|||||||||
Subordinated debentures and term loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142,322
|
|
|
(3,803
|
)
|
|
138,519
|
|
|||||||||
Total
|
$
|
245,523
|
|
|
$
|
41,273
|
|
|
$
|
55,000
|
|
|
$
|
45,000
|
|
|
$
|
65,000
|
|
|
$
|
—
|
|
|
$
|
167,322
|
|
|
$
|
(3,803
|
)
|
|
$
|
615,315
|
|
(Dollars in Thousands)
|
March 31, 2019
|
||
Amounts of commitments:
|
|
||
Loan commitments to extend credit
|
$
|
2,706,418
|
|
Standby and commercial letters of credit
|
33,616
|
|
|
|
$
|
2,740,034
|
|
|
|
March 31, 2019
|
|||
|
|
RISING
|
|
FALLING
|
|
Driver Rates
|
|
(200 Basis Points)
|
|
(100 Basis Points)
|
|
Prime
|
|
200
|
|
(100
|
)
|
Federal funds
|
|
200
|
|
(100
|
)
|
One-year CMT
|
|
200
|
|
(100
|
)
|
Three-year CMT
|
|
200
|
|
(100
|
)
|
Five-year CMT
|
|
200
|
|
(100
|
)
|
CD's
|
|
200
|
|
(25
|
)
|
FHLB advances
|
|
200
|
|
(100
|
)
|
|
|
March 31, 2019
|
||||||||||
|
|
|
|
RISING
|
|
FALLING
|
||||||
(Dollars in Thousands)
|
|
Base
|
|
(200 Basis Points)
|
|
(100 Basis Points)
|
||||||
Net interest income
|
|
$
|
334,718
|
|
|
$
|
366,482
|
|
|
$
|
321,815
|
|
Variance from base
|
|
|
|
$
|
31,764
|
|
|
$
|
(12,903
|
)
|
||
Percent of change from base
|
|
|
|
9.49
|
%
|
|
(3.85
|
)%
|
|
|
December 31, 2018
|
|||
|
|
RISING
|
|
FALLING
|
|
Driver Rates
|
|
(200 Basis Points)
|
|
(100 Basis Points)
|
|
Prime
|
|
200
|
|
(100
|
)
|
Federal funds
|
|
200
|
|
(100
|
)
|
One-year CMT
|
|
200
|
|
(100
|
)
|
Three-year CMT
|
|
200
|
|
(100
|
)
|
Five-year CMT
|
|
200
|
|
(100
|
)
|
CD's
|
|
200
|
|
(25
|
)
|
FHLB advances
|
|
200
|
|
(100
|
)
|
|
|
December 31, 2018
|
||||||||||
|
|
|
|
RISING
|
|
FALLING
|
||||||
(Dollars in Thousands)
|
|
Base
|
|
(200 Basis Points)
|
|
(100 Basis Points)
|
||||||
Net interest income
|
|
$
|
344,064
|
|
|
$
|
371,221
|
|
|
$
|
330,990
|
|
Variance from base
|
|
|
|
$
|
27,157
|
|
|
$
|
(13,074
|
)
|
||
Percent of change from base
|
|
|
|
7.89
|
%
|
|
(3.80
|
)%
|
(Dollars in Thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Interest-bearing time deposits
|
|
$
|
70,672
|
|
|
$
|
36,963
|
|
Investment securities available for sale
|
|
1,247,632
|
|
|
1,142,195
|
|
||
Investment securities held to maturity
|
|
615,027
|
|
|
490,387
|
|
||
Loans held for sale
|
|
3,330
|
|
|
4,778
|
|
||
Loans
|
|
7,299,320
|
|
|
7,224,467
|
|
||
Federal Home Loan Bank stock
|
|
24,588
|
|
|
24,588
|
|
||
Total
|
|
$
|
9,260,569
|
|
|
$
|
8,923,378
|
|
Period
|
|
Total Number
of Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number of Shares
Purchased as part of Publicly announced Plans or Programs |
|
Maximum Number of Shares
that may yet be Purchased Under the Plans or Programs |
|
January, 2019
|
|
173
|
|
|
$36.65
|
|
|
|
|
February, 2019
|
|
250
|
|
|
$38.75
|
|
|
|
|
March, 2019
|
|
42,116
|
|
|
$38.98
|
|
|
|
|
Exhibit No:
|
Description of Exhibits:
|
|
|
2.1
|
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
31.1
|
|
31.2
|
|
32
|
|
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (2)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (2)
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document (2)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (2)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (2)
|
|
|
|
|
|
(1) Filed herewith.
|
|
(2) Furnished herewith.
|
|
First Merchants Corporation
|
|
(Registrant)
|
|
|
|
|
Date: May 10, 2019
|
By: /s/ Michael C. Rechin
|
|
Michael C. Rechin
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
Date: May 10, 2019
|
By: /s/ Mark K. Hardwick
|
|
Mark K. Hardwick
|
|
Executive Vice President,
|
|
Chief Financial Officer and Chief Operating Officer
|
|
(Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of First Merchants Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of First Merchants Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|