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First Merchants Corporation Announces Third Quarter 2017 Results
[October 26, 2017]

First Merchants Corporation Announces Third Quarter 2017 Results


First Merchants Corporation (NASDAQ:FRME) reported record third quarter 2017 net income of $24.4 million, compared to $21.1 million during the third quarter of 2016. Earnings per share for the period totaled $.50 per share, which included $.11 per share of acquisition expenses, compared to $.51 during the same period in 2016. The acquisition expenses in the quarter totaled $7.9 million and were primarily related to the July 14, 2017 acquisition of Independent Alliance Banks, Inc.

Year-to-date net income totaled a record $71.7 million, compared to $58.8 million during the same period in 2016. Earnings per share for the nine months ended September 30, 2017 totaled $1.63 per share, an increase of $.20 per share, or 14 percent, over the same period in 2016. In the first nine months of 2017, acquisition expenses related to the completion of The Arlington Bank and Independent Alliance Bank acquisitions, totaled $10.8 million, or $.16 per share.

Michael C. Rechin, President and Chief Executive Officer, stated, "First Merchants achieved outstanding financial results in a special quarter for our clients, teammates and shareholders. We had several accomplishments to include building the First Merchants franchise, adding capital strength and growing earnings power. The addition of Independent Alliance Bank into First Merchants establishes a significant presence in the Fort Wayne market led by strong local management. Our organic balance sheet growth throughout the company demonstrates our commitment in vibrant and growing communities. When coupled with a wider net interest margin, the company produced record net interest income."

Total assets reached a record $9.0 billion as of quarter-end and loans totaled a record $6.5 billion, compared to $7.0 billion and $5.0 billion, as of September 30, 2016 representing increases of 28.9 and 30.4 percent, respectively. Total deposits reached record levels as well, totaling $6.9 billion as of September 30, 2017, representing a 26.9 percent increase. Of the increase in total loans and total deposits, the acquisitions represent 19.3 percent and 20.5 percent, respectively. Tangible common equity also increased to record levels for the quarter totaling $817 million, or $16.62 per share, compared to $647 million, or $15.86 per share, as of September 30, 2016.

Net-interest income totaled a record $74.4 million for the quarter and net-interest margin increased by 9 basis points over the third quarter of 2016, totaling 4.03 percent. Yields on earning assets totaled 4.56 percent and the cost of supporting liabilities totaled .53 percent. Fair value accretion added 17 basis points to net-interest margin this quarter, compared to 24 basis points in the third quarter of 2016.

Non-interest income totaled $18.7 million for the quarter, up $1.8 million from the third quarter 2016 total of $16.9 million. Non-interest expense totaled $58.7 million for the quarter, up from $44.1 million during the third quarter of 2016. Of the increase, $7.9 million was the result of acquisition-related expenses.

The Corporation's provision expense totaled $2.1 million compared to $1.9 million during the same period in 2016. The increase in provision expense, along with net recoveries of $800,000, provided allowance coverage for organic loan growth of 9.2 percent annualized. The allowance for loan losses totals $73.4 million as of September 30, 2017, up from $63.5 million as of September 30, 2016. Non-accrual loans totaled $32.3 million as of quarter-end and the allowance is 1.13 percent of total loans and 1.44 percent of non-purchased loans.

As of September 30, 2017, the Corporation's total risk-based capital ratio equaled 13.76 percent, common equity tier 1 capital ratio equaled 11.03 percent, and the tangible common equity ratio totaled 9.39 percent.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Thursday, October 26, 2017.

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until November 26, 2017. 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 10112760.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme171026.html during the time of the call. A replay of the web cast will be available until October 26, 2018.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as Lafayette Bank & Trust; iAB Financial Bank; and First Merchants Private Wealth Advisors (each as a division of First Merchants Bank).

First Merchants Corporation's common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company's Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like "believe", "continue", "pattern", "estimate", "project", "intend", "anticipate", "expect" and similar expressions or future or conditional verbs such as "will", would", "should", "could", "might", "can", "may", or similar expressions. These statements include statements of First Merchants' goals, intentions and expectations; statements regarding the First Merchants' business plan and growth strategies; statements regarding the asset quality of First Merchants' loan and investment portfolios; and estimates of First Merchants' risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants' affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with the First Merchants' business; and other risks and factors identified in each of First Merchants' filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants' past results of operations do not necessarily indicate its anticipated future results.



   
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands) September 30,
2017 2016
ASSETS
Cash and cash equivalents $ 146,607 $ 99,602
Interest-bearing time deposits 72,950 33,803
Investment securities 1,468,887 1,300,428
Loans held for sale 4,514 1,482
Loans 6,483,448 4,973,844
Less: Allowance for loan losses (73,354 ) (63,456 )
Net loans 6,410,094 4,910,388
Premises and equipment 102,485 95,540
Federal Home Loan Bank stock 23,825 18,044
Interest receivable 32,366 23,652
Goodwill and other intangibles 478,558 259,844
Cash surrender value of life insurance 222,437 201,856
Other real estate owned 11,912 10,242
Tax asset, deferred and receivable 36,024 31,779
Other assets 38,744   35,692  
TOTAL ASSETS $ 9,049,403   $ 7,022,352  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,662,814 $ 1,307,886
Interest-bearing 5,248,205   4,136,354  
Total Deposits 6,911,019 5,444,240
Borrowings:
Federal funds purchased 100,000 58,358
Securities sold under repurchase agreements 142,107 138,671
Federal Home Loan Bank advances 406,820 297,022
Subordinated debentures and term loans 139,686   128,288  
Total Borrowings 788,613 622,339
Interest payable 4,956 3,733
Other liabilities 61,695   51,175  
Total Liabilities 7,766,283 6,121,487
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 and 50,000,000 shares (1)
Issued and outstanding - 49,140,594 and 40,799,025 shares 6,143 5,100
Additional paid-in capital 833,451 506,848
Retained earnings 449,759 384,868
Accumulated other comprehensive income (loss) (6,358 ) 3,924  
Total Stockholders' Equity 1,283,120   900,865  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,049,403   $ 7,022,352  

(1) On May 1, 2017, the shareholders of First Merchants Corporation approved an amendment to the Articles of Incorporation to increase the number of shares of common stock authorized to issue from 50,000,000 to 100,000,000 shares.

   
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts) September 30, September 30,
2017   2016 2017   2016
INTEREST INCOME
Loans receivable:
Taxable $ 71,491 $ 53,819 $ 187,234 $ 156,407
Tax-exempt 2,851 1,649 7,676 4,429
Investment securities:
Taxable 4,524 3,992 13,012 12,522
Tax-exempt 5,455 4,668 15,549 13,760
Deposits with financial institutions 284 55 442 283
Federal Reserve and Federal Home Loan Bank stock 242   193   635   906
Total Interest Income 84,847   64,376   224,548   188,307
INTEREST EXPENSE
Deposits 6,710 3,926 15,971 12,028
Federal funds purchased 175 27 506 62
Securities sold under repurchase agreements 133 91 331 283
Federal Home Loan Bank advances 1,464 853 3,619 2,467
Subordinated debentures and term loans 1,945   1,797   5,602   5,368
Total Interest Expense 10,427   6,694   26,029   20,208
NET INTEREST INCOME 74,420 57,682 198,519 168,099
Provision for loan losses 2,083   1,900   7,343   3,240
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 72,337   55,782   191,176   164,859
OTHER INCOME
Service charges on deposit accounts 5,044 4,667 13,656 13,228
Fiduciary activities 2,995 2,448 8,244 7,318
Other customer fees 5,341 4,777 15,610 14,531
Earnings on cash surrender value of life insurance 1,575 614 5,444 3,387
Net gains and fees on sales of loans 2,317 1,989 5,209 5,166
Net realized gains on sales of available for sale securities 332 839 1,497 2,542
Other income 1,064   1,527   2,288   2,911
Total Other Income 18,668   16,861   51,948   49,083
OTHER EXPENSES
Salaries and employee benefits 33,244 26,651 86,052 79,558
Net occupancy 4,371 4,348 12,552 12,429
Equipment 3,478 2,947 9,192 9,428
Marketing 1,021 630 2,378 2,218
Outside data processing fees 3,162 2,382 8,864 6,476
Printing and office supplies 366 314 905 1,047
Intangible asset amortization 1,698 978 3,592 2,933
FDIC assessments 704 534 1,853 2,486
Other real estate owned and foreclosure expenses 330 637 1,592 2,303
Professional and other outside services 5,843 1,242 10,843 4,882
Other expenses 4,491   3,452   11,300   11,665
Total Other Expenses 58,708   44,115   149,123   135,425
INCOME BEFORE INCOME TAX 32,297 28,528 94,001 78,517
Income tax expense 7,939   7,469   22,314   19,759
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 24,358   $ 21,059   $ 71,687   $ 58,758
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.50 $ 0.51 $ 1.64 $ 1.44
Diluted Net Income Available to Common Stockholders $ 0.50 $ 0.51 $ 1.63 $ 1.43
Cash Dividends Paid $ 0.18 $ 0.14 $ 0.51 $ 0.39
Average Diluted Shares Outstanding (in thousands) 48,644 41,026 44,063 40,970
 
       
FINANCIAL HIGHLIGHTS
(Dollars in thousands) Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
NET CHARGE-OFFS $ (800 ) $ 630 $ 26 $ 2,237
 
AVERAGE BALANCES:
Total Assets $ 8,793,666 $ 6,907,303 $ 7,866,643 $ 6,836,412
Total Loans 6,312,810 4,836,923 5,647,486 4,748,846
Total Earning Assets 7,840,403 6,198,206 7,064,659 6,116,952
Total Deposits 6,790,053 5,428,453 6,108,042 5,388,775
Total Stockholders' Equity 1,244,472 896,934 1,048,420 878,302
 
FINANCIAL RATIOS:
Return on Average Assets 1.11 % 1.22 % 1.22 % 1.15 %
Return on Average Stockholders' Equity 7.83 9.39 9.12 8.92
Return on Average Common Stockholders' Equity 7.83 9.39 9.12 8.92
Average Earning Assets to Average Assets 89.16 89.73 89.81 89.48
Allowance for Loan Losses as % of Total Loans 1.13 1.28 1.13 1.28
Net Charge-offs as % of Average Loans (Annualized) (0.05 ) 0.05 - 0.06
Average Stockholders' Equity to Average Assets 14.15 12.99 13.33 12.85
Tax Equivalent Yield on Earning Assets 4.56 4.37 4.47 4.32
Cost of Supporting Liabilities 0.53 0.43 0.49 0.44
Net Interest Margin (FTE) on Earning Assets 4.03 3.94 3.98 3.88
Efficiency Ratio 58.30 55.12 55.05 58.01
Tangible Common Book Value Per Share $ 16.62 $ 15.86 $ 16.62 $ 15.86
 
         
NON-PERFORMING ASSETS
(Dollars In Thousands) September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
Non-Accrual Loans $ 32,253 $ 27,347 $ 27,920 $ 29,998 $ 34,105
Renegotiated Loans 626   384   876   4,747   3,940  
Non-Performing Loans (NPL) 32,879 27,731 28,796 34,745 38,045
Other Real Estate Owned 11,912   11,893   8,293   8,966   10,242  
Non-Performing Assets (NPA) 44,791 39,624 37,089 43,711 48,287
90+ Days Delinquent 425   634   123   112   1,625  
NPAs & 90 Day Delinquent $ 45,216   $ 40,258   $ 37,212   $ 43,823   $ 49,912  
 
Allowance for Loan Losses $ 73,354 $ 70,471 $ 68,225 $ 66,037 $ 63,456
Quarterly Net Charge-offs (800 ) 629 197 (164 ) 630
NPAs / Actual Assets % 0.49 % 0.51 % 0.51 % 0.61 % 0.69 %
NPAs & 90 Day / Actual Assets % 0.50 % 0.52 % 0.51 % 0.61 % 0.71 %
NPAs / Actual Loans and OREO % 0.69 % 0.70 % 0.70 % 0.85 % 0.97 %
Allowance for Loan Losses / Actual Loans (%) 1.13 % 1.25 % 1.29 % 1.28 % 1.28 %
Net Charge-offs as % of Average Loans (Annualized) (0.05 )% 0.05 % 0.02 % (0.01 )% 0.05 %
 
         
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands) September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
ASSETS
Cash and cash equivalents $ 146,607 $ 142,650 $ 104,247 $ 127,927 $ 99,602
Interest-bearing time deposits 72,950 48,305 20,439 24,459 33,803
Investment securities 1,468,887 1,343,323 1,327,217 1,304,505 1,300,428
Loans held for sale 4,514 4,036 1,262 2,929 1,482
Loans 6,483,448 5,613,144 5,274,909 5,139,645 4,973,844
Less: Allowance for loan losses (73,354 ) (70,471 ) (68,225 ) (66,037 ) (63,456 )
Net loans 6,410,094 5,542,673 5,206,684 5,073,608 4,910,388
Premises and equipment 102,485 92,637 91,311 94,432 95,540
Federal Home Loan Bank stock 23,825 19,015 17,964 17,964 18,044
Interest receivable 32,366 27,597 25,174 26,194 23,652
Goodwill and other intangibles 478,558 309,686 257,963 258,866 259,844
Cash surrender value of life insurance 222,437 200,125 202,574 201,671 201,856
Other real estate owned 11,912 11,893 8,293 8,966 10,242
Tax asset, deferred and receivable 36,024 27,331 32,074 39,384 31,779
Other assets 38,744   35,758   30,991   30,706   35,692  
TOTAL ASSETS $ 9,049,403   $ 7,805,029   $ 7,326,193   $ 7,211,611   $ 7,022,352  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,662,814 $ 1,398,237 $ 1,373,778 $ 1,348,267 $ 1,307,886
Interest-bearing 5,248,205   4,618,867   4,261,531   4,208,231   4,136,354  
Total Deposits 6,911,019 6,017,104 5,635,309 5,556,498 5,444,240
Borrowings:
Federal funds purchased 100,000 134,608 102,000 120,349 58,358
Securities sold under repurchase agreements 142,107 127,884 139,007 146,480 138,671
Federal Home Loan Bank advances 406,820 312,715 338,919 298,923 297,022
Subordinated debentures and term loans 139,686   128,742   128,862   128,445   128,288  
Total Borrowings 788,613 703,949 708,788 694,197 622,339
Interest payable 4,956 3,477 3,875 3,110 3,733
Other liabilities 61,695   45,383   48,751   56,149   51,175  
Total Liabilities 7,766,283 6,769,913 6,396,723 6,309,954 6,121,487
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding 125 125 125 125 125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 and 50,000,000 shares (1)
Issued and outstanding 6,143 5,394 5,131 5,114 5,100
Additional paid-in capital 833,451 593,904 509,953 509,018 506,848
Retained earnings 449,759 434,309 417,983 400,981 384,868
Accumulated other comprehensive income (loss) (6,358 ) 1,384   (3,722 ) (13,581 ) 3,924  
Total Stockholders' Equity 1,283,120   1,035,116   929,470   901,657   900,865  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,049,403   $ 7,805,029   $ 7,326,193   $ 7,211,611   $ 7,022,352  

(1) On May 1, 2017, the shareholders of First Merchants Corporation approved an amendment to the Articles of Incorporation to increase the number of shares of common stock authorized to issue from 50,000,000 to 100,000,000 shares.

         
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts) September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
INTEREST INCOME
Loans receivable:
Taxable $ 71,491 $ 59,386 $ 56,357 $ 53,895 $ 53,819
Tax-exempt 2,851 2,492 2,333 2,096 1,649
Investment securities:
Taxable 4,524 4,180 4,308 3,893 3,992
Tax-exempt 5,455 5,091 5,003 4,862 4,668
Deposits with financial institutions 284 114 44 67 55
Federal Reserve and Federal Home Loan Bank stock 242   204   189   192   193  
Total Interest Income 84,847   71,467   68,234   65,005   64,376  
INTEREST EXPENSE
Deposits 6,710 5,137 4,124 3,886 3,926
Federal funds purchased 175 103 228 40 27
Securities sold under repurchase agreements 133 110 88 91 91
Federal Home Loan Bank advances 1,464 1,177 978 797 853
Subordinated debentures and term loans 1,945   1,840   1,817   1,817   1,797  
Total Interest Expense 10,427   8,367   7,235   6,631   6,694  
NET INTEREST INCOME 74,420 63,100 60,999 58,374 57,682
Provision for loan losses 2,083   2,875   2,385   2,417   1,900  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 72,337   60,225   58,614   55,957   55,782  
OTHER INCOME
Service charges on deposit accounts 5,044 4,438 4,174 4,534 4,667
Fiduciary activities 2,995 2,609 2,640 2,500 2,448
Other customer fees 5,341 5,406 4,863 4,784 4,777
Earnings on cash surrender value of life insurance 1,575 2,971 898 886 614
Net gains and fees on sales of loans 2,317 1,617 1,275 1,886 1,989
Net realized gains on sales of available for sale securities 332 567 598 847 839
Other income 1,064   826   398   683   1,527  
Total Other Income 18,668   18,434   14,846   16,120   16,861  
OTHER EXPENSES
Salaries and employee benefits 33,244 27,076 25,732 22,994 26,651
Net occupancy 4,371 3,965 4,216 4,568 4,348
Equipment 3,478 2,907 2,807 3,069 2,947
Marketing 1,021 792 565 790 630
Outside data processing fees 3,162 3,086 2,616 2,672 2,382
Printing and office supplies 366 275 264 301 314
Intangible asset amortization 1,698 991 903 977 978
FDIC assessments 704 579 570 550 534
Other real estate owned and foreclosure expenses 330 731 531 574 637
Professional and other outside services 5,843 3,266 1,734 1,634 1,242
Other expenses 4,491   3,648   3,161   3,805   3,452  
Total Other Expenses 58,708   47,316   43,099   41,934   44,115  
INCOME BEFORE INCOME TAX 32,297 31,343 30,361 30,143 28,528
Income tax expense 7,939   7,207   7,168   7,850   7,469  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 24,358   $ 24,136   $ 23,193   $ 22,293   $ 21,059  
 
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.50 $ 0.57 $ 0.57 $ 0.55 $ 0.51
Diluted Net Income Available to Common Stockholders $ 0.50 $ 0.57 $ 0.56 $ 0.55 $ 0.51
Cash Dividends Paid $ 0.18 $ 0.18 $ 0.15 $ 0.15 $ 0.14
Average Diluted Shares Outstanding (in thousands) 48,644 42,244 41,221 41,124 41,026
FINANCIAL RATIOS:
Return on Average Assets 1.11 % 1.28 % 1.29 % 1.26 % 1.22 %
Return on Average Stockholders' Equity 7.83 9.82 10.15 9.87 9.39
Return on Average Common Stockholders' Equity 7.83 9.82 10.15 9.87 9.39
Average Earning Assets to Average Assets 89.16 89.97 90.43 89.86 89.73
Allowance for Loan Losses as % of Total Loans 1.13 1.25 1.29 1.28 1.28
Net Charge-offs as % of Average Loans (Annualized) (0.05 ) 0.05 0.02 (0.01 ) 0.05
Average Stockholders' Equity to Average Assets 14.15 12.98 12.67 12.75 12.99
Tax Equivalent Yield on Earning Assets 4.56 4.44 4.42 4.32 4.37
Cost of Supporting Liabilities 0.53 0.49 0.44 0.42 0.43
Net Interest Margin (FTE) on Earning Assets 4.03 3.95 3.98 3.90 3.94
Efficiency Ratio 58.30 53.61 52.61 52.18 55.12
Tangible Common Book Value Per Share $ 16.62 $ 16.97 $ 16.49 $ 15.85 $ 15.86
 
         
LOANS
(Dollars In Thousands) September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
Commercial and industrial loans $ 1,436,092 $ 1,289,884 $ 1,258,840 $ 1,194,646 $ 1,146,538
Agricultural production financing and other loans to farmers 117,751 75,746 77,021 79,689 93,169
Real estate loans:
Construction 498,862 442,389 336,931 418,703 368,241
Commercial and farmland 2,571,253 2,167,729 2,118,431 1,953,062 1,941,739
Residential 938,437 847,580 737,918 739,169 739,855
Home equity 502,240 436,038 423,708 418,525 398,837
Individuals' loans for household and other personal expenditures 86,406 79,887 77,590 77,479 76,497
Lease financing receivables, net of unearned income 3,877 232 261 311 380
Other commercial loans 328,530   273,659   244,209   258,061   208,588  
Loans 6,483,448 5,613,144 5,274,909 5,139,645 4,973,844
Allowance for loan losses (73,354 ) (70,471 ) (68,225 ) (66,037 ) (63,456 )
NET LOANS $ 6,410,094   $ 5,542,673   $ 5,206,684   $ 5,073,608   $ 4,910,388  
 
         
DEPOSITS
(Dollars In Thousands) September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
Demand deposits $ 3,562,718 $ 3,015,846 $ 2,861,384 $ 2,866,853 $ 2,745,028
Savings deposits 1,884,705 1,708,478 1,565,174 1,560,752 1,545,372
Certificates and other time deposits of $100,000 or more 503,668 362,589 312,327 276,274 296,838
Other certificates and time deposits 585,042 511,935 476,741 471,247 498,203
Brokered deposits 374,886   418,256   419,683   381,372   358,799
TOTAL DEPOSITS $ 6,911,019   $ 6,017,104   $ 5,635,309   $ 5,556,498   $ 5,444,240
 
           
NET INTEREST INCOME
(Dollars in Thousands) For the Three Months Ended
September 30, 2017 September 30, 2016
Interest Interest
Average Income / Average Average Income / Average
Balance Expense Rate Balance Expense Rate
Assets:
Interest-bearing time deposits $ 139,905 $ 284 0.81 % $ 54,120 $ 55 0.40 %
Federal Reserve and Federal Home Loan Bank stock 23,146 242 4.18 18,095 193 4.24
Investment Securities: (1)
Taxable 718,965 4,524 2.52 729,223 3,992 2.18
Tax-Exempt (2) 645,577   8,392   5.20 559,845   7,182   5.10
Total Investment Securities 1,364,542   12,916   3.79 1,289,068   11,174   3.45
Loans held for sale 8,117 136 6.70 742 73 39.14
Loans: (3)
Commercial 4,556,653 55,266 4.85 3,556,187 41,653 4.66
Real Estate Mortgage 785,317 8,596 4.38 567,015 6,521 4.58
Installment 595,164 7,494 5.04 493,807 5,572 4.49
Tax-Exempt (2) 367,559   4,385   4.77 219,172   2,537   4.60
Total Loans 6,312,810   75,877   4.81 4,836,923   56,356   4.64
Total Earning Assets 7,840,403 89,319   4.56 6,198,206 67,778   4.37
Net unrealized gain on securities available for sale 7,733 11,738
Allowance for loan losses (71,753 ) (62,453 )
Cash and cash equivalents 129,058 102,023
Premises and equipment 101,979 95,541
Other assets 786,246   562,248  
Total Assets $ 8,793,666   $ 6,907,303  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,834,965 $ 1,706 0.37 % $ 1,454,992 $ 669 0.18 %
Money market deposits 990,682 747 0.30 793,173 384 0.19
Savings deposits 887,201 203 0.09 754,401 171 0.09
Certificates and other time deposits 1,450,448   4,054   1.12 1,128,595   2,702   0.95
Total Interest-bearing Deposits 5,163,296 6,710 0.52 4,131,161 3,926 0.38
Borrowings 694,203   3,717   2.14 521,125   2,768   2.11
Total Interest-bearing Liabilities 5,857,499 10,427 0.71 4,652,286 6,694 0.57
Noninterest-bearing deposits 1,626,757 1,297,292
Other liabilities 64,938   60,791  
Total Liabilities 7,549,194 6,010,369
Stockholders' Equity 1,244,472     896,934    
Total Liabilities and Stockholders' Equity $ 8,793,666   10,427   0.53 $ 6,907,303   6,694   0.43
Net Interest Income $ 78,892   $ 61,084  
Net Interest Margin 4.03 % 3.94 %
(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 2017 and 2016. These totals equal $4,472 and $3,402 for the three months ended September 30, 2017 and 2016, respectively.
 
(3) Non accruing loans have been included in the average balances.
 
           
NET INTEREST INCOME
(Dollars in Thousands) For the Nine Months Ended
September 30, 2017 September 30, 2016
Interest Interest
Average Income / Average Average Income / Average
Balance Expense Rate Balance Expense Rate
Assets:
Interest-bearing time deposits $ 71,456 $ 442 0.82 % $ 76,440 $ 283 0.49 %
Federal Reserve and Federal Home Loan Bank stock 19,941 635 4.25 26,359 906 4.59
Investment Securities: (1)
Taxable 716,118 13,012 2.42 725,311 12,522 2.31
Tax-Exempt (2) 609,658   23,922   5.23 539,996   21,169   5.24

Total Investment Securities

1,325,776   36,934   3.71 1,265,307   33,691   3.56
Loans held for sale 4,875 245 6.70 3,541 291 10.98
Loans: (3)
Commercial 4,085,901 144,759 4.72 3,502,715 121,017 4.62
Real Estate Mortgage 660,435 21,946 4.43 570,330 19,032 4.46
Installment 558,106 20,284 4.85 473,645 16,067 4.53
Tax-Exempt (2) 338,169   11,809   4.66 198,615   6,814   4.58
Total Loans 5,647,486   199,043   4.70 4,748,846   163,221   4.59
Total Earning Assets 7,064,659 237,054   4.47 % 6,116,952 198,101   4.32 %
Net unrealized gain on securities available for sale 4,437 10,892
Allowance for loan losses (69,269 ) (62,633 )
Cash and cash equivalents 128,866 102,767
Premises and equipment 95,707 96,284
Other assets 642,243   572,150  
Total Assets $ 7,866,643   $ 6,836,412  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,649,175 $ 3,632 0.29 % $ 1,395,036 $ 1,850 0.18 %
Money market deposits 894,450 1,688 0.25 835,968 1,377 0.22
Savings deposits 818,800 520 0.08 720,375 455 0.08
Certificates and other time deposits 1,299,932   10,131   1.04 1,157,992   8,346   0.96
Total Interest-bearing Deposits 4,662,357 15,971 0.46 4,109,371 12,028 0.39
Borrowings 659,260   10,058   2.03 506,077   8,180   2.16
Total Interest-bearing Liabilities 5,321,617 26,029   0.65 4,615,448 20,208 0.58
Noninterest-bearing deposits 1,445,685 1,279,404
Other liabilities 50,921   63,258  
Total Liabilities 6,818,223 5,958,110
Stockholders' Equity 1,048,420     878,302    
Total Liabilities and Stockholders' Equity $ 7,866,643   26,029   0.49 $ 6,836,412   20,208   0.44
Net Interest Income $ 211,025   $ 177,893  
Net Interest Margin 3.98 % 3.88 %
(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 2017 and 2016. These totals equal $12,506 and $9,794 for the nine months ended September 30, 2017 and 2016, respectively.
 
(3) Non accruing loans have been included in the average balances.


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