First Merchants (FRME) 8-K First Merchants Corporation Announces Fourth Quarter 2024 Earnings Per Share

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

January 30, 2025

FOR IMMEDIATE RELEASE

For more information, contact:

Nicole M. Weaver, Vice President and Director of Corporate Administration

765-521-7619

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES FOURTH QUARTER 2024 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME)

Fourth Quarter 2024 Highlights:

•    Net income available to common stockholders was $63.9 million and diluted earnings per common share totaled $1.10, compared to $48.7 million and $0.84 in the third quarter of 2024, and $42.0 million and $0.71 in the fourth quarter of 2023. Excluding the impact of the branch sale and repositioning of the available for sale securities portfolio, adjusted net income available to common stockholders1 was $58.1 million or $1.00 per share for the fourth quarter of 2024.

•    Strong capital position with Common Equity Tier 1 Capital Ratio of 11.43% and Tangible Common Equity to Tangible Assets Ratio of 8.81%.

•    Net interest margin was 3.28% compared to 3.23% on a linked quarter basis and 3.16% in the fourth quarter of 2023.

•    Total loans grew $185.6 million, or 5.9% annualized, on a linked quarter basis, and $368.1 million, or 2.9% during the last twelve months.

•    Total deposits increased $156.5 million, or 4.4% annualized, on a linked quarter basis, and declined $32.4 million, or 0.2%, during the last twelve months after normalizing for deposits sold during the fourth quarter.

•    Nonperforming assets to total assets were 43 basis points compared to 35 basis points on a linked quarter basis.

•Adjusted efficiency ratio totaled 53.60%1 for the quarter.

•Completed the sale of five Illinois branches and certain loans and deposits to Old Second National Bank on December 6, 2024.

"The fourth quarter was a strong finish to the year and showed the momentum we have built with healthy increases in core earnings, NIM and ROA," said Mark Hardwick, Chief Executive Officer of First Merchants Bank. "We restructured a portion of our securities portfolio and completed the Illinois branch sale to help prioritize our core markets. These actions and the completion of multiple technology initiatives in 2024 have positioned First Merchants to deliver strong results in 2025."

Fourth Quarter Financial Results:

First Merchants Corporation (the “Corporation”) reported fourth quarter 2024 net income available to common stockholders of $63.9 million compared to $42.0 million during the same period in 2023. Diluted earnings per common share for the period totaled $1.10 compared to the fourth quarter of 2023 result of $0.71. Excluding non-core income and expenses incurred in each period, adjusted net income available to common stockholders1 for the fourth quarter 2024 was $58.1 million, or $1.00 diluted earnings per common share compared to $53.4 million, or $0.90 in the same period in 2023.

During the quarter, the Corporation completed the sale of five Illinois branches along with loans of $7.4 million and deposits of $267.4 million, generating a gain of $20.0 million recorded in non-interest income. The sale of these branches represents the Corporation’s exit from suburban Chicago markets.

Total assets equaled $18.3 billion and loans totaled $12.9 billion as of quarter-end. During the past twelve months, total loans grew by $368.1 million, or 2.9%. On a linked quarter basis, loans grew $185.6 million, or 5.9% annualized, with growth primarily in commercial loans.

Investments totaling $3.5 billion decreased $350.7 million, or 9.2%, during the last twelve months and decreased $201.5 million on a linked quarter basis. The decline during the quarter was partially due to the sale of $109.6 million of available for sale securities with a weighted average tax-equivalent yield of 2.31%, which resulted in a loss of $11.6 million. The remaining decline for the quarter was due to security paydowns and maturities, as well as a decline in valuation of securities reflecting the movement of interest rates. Sales of available for sale securities in 2024 totaled $268.5 million and resulted in a loss of $20.8 million.

Total deposits were $14.5 billion as of quarter-end and decreased by $299.8 million, or 2.0%, over the past twelve months. The decline was primarily due to the sale of the Illinois branches during the fourth quarter which included $267.4 million of deposits. Excluding this impact, deposits declined by $32.4 million in 2024. On a linked quarter basis, deposits grew by $156.5 million, or 4.4% annualized. The loan to deposit ratio increased slightly to 88.5% at period end from 88.0% in the prior quarter.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $192.8 million as of quarter-end, or 1.50% of total loans, an increase of $4.9 million from prior quarter. Loan charge-offs, net of recoveries totaled $0.8 million and provision for loans of $5.7 million was recorded during the quarter. Reserves for unfunded commitments totaled $18.0 million declining during the quarter due to reserve release of $1.5 million. Net provision for the quarter totaled $4.2 million. Non-performing assets to total assets were 43 basis points for the fourth quarter of 2024, an increase of eight basis points compared to 35 basis points in the prior quarter.

Net interest income totaled $134.4 million for the quarter, an increase of $3.3 million, or 2.5%, compared to the prior quarter and an increase of $4.3 million, or 3.3%, compared to the fourth quarter of 2023. Fully taxable equivalent net interest margin was 3.28%, an increase of five basis points compared to the third quarter of 2024, and an increase of 12 basis points compared to the fourth quarter of 2023. The increase in net interest margin compared to the third quarter was due to lower funding costs and a more favorable earning asset and funding mix.

Noninterest income totaled $42.7 million for the quarter, an increase of $17.9 million compared to the third quarter of 2024 and an increase of $16.3 million compared to the fourth quarter of 2023. When excluding non-core income from each period, noninterest income totaled $34.4 million for the quarter, an increase of $0.4 million compared to third quarter of 2024, and an increase of $5.6 million compared to the fourth quarter of 2023. The increase in core noninterest income over the fourth quarter of 2023 was primarily due to an increase in gains on sales of loans and CRA investment income.

Noninterest expense totaled $96.3 million for the quarter, an increase of $1.7 million from the third quarter of 2024 and a decrease of $11.8 million from the fourth quarter of 2023. The increase in the linked quarter was from higher marketing costs and other one-time operating expenses. The decrease from the fourth quarter of 2023 was due to one-time charges incurred in the prior year which included an FDIC special assessment, early retirement and severance costs, and a lease termination.

The Corporation’s total risk-based capital ratio totaled 13.31%, common equity tier 1 capital ratio totaled 11.43%, and the tangible common equity ratio totaled 8.81%. These ratios continue to reflect the Corporation’s strong liquidity and capital positions.

1 See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, January 30, 2025.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register.vevent.com/register/BIc49ad0293a7844dca2e7171f51e600dd95f36e86b6)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/9t5v76m2) during the time of the call. A replay of the webcast will be available until January 30, 2026.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

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

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

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

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements about 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 (including the ability to grow and maintain core deposits and retain large, uninsured deposits), 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)	December 31,
	2024		2023
ASSETS
Cash and due from banks	$	87,616	$	112,649
Interest-bearing deposits	298,891		436,080
Investment securities, net of allowance for credit losses of $245,000 and $245,000	3,460,695		3,811,364
Loans held for sale	18,663		18,934
Loans	12,854,359		12,486,027
Less: Allowance for credit losses - loans	(192,757)		(204,934)
Net loans	12,661,602		12,281,093
Premises and equipment	129,743		133,896
Federal Home Loan Bank stock	41,690		41,769
Interest receivable	91,829		97,664
Goodwill and other intangibles	731,830		739,101
Cash surrender value of life insurance	304,906		306,301
Other real estate owned	4,948		4,831
Tax asset, deferred and receivable	92,387		99,883
Other assets	387,169		322,322
TOTAL ASSETS	$	18,311,969	$	18,405,887
LIABILITIES
Deposits:
Noninterest-bearing	$	2,325,579	$	2,500,062
Interest-bearing	12,196,047		12,321,391
Total Deposits	14,521,626		14,821,453
Borrowings:
Federal funds purchased	99,226		—
Securities sold under repurchase agreements	142,876		157,280
Federal Home Loan Bank advances	822,554		712,852
Subordinated debentures and other borrowings	93,529		158,644
Total Borrowings	1,158,185		1,028,776
Interest payable	16,102		18,912
Other liabilities	311,073		289,033
Total Liabilities	16,006,986		16,158,174
STOCKHOLDERS' EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 cumulative shares
Issued and outstanding - 125 cumulative shares	125		125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized -- 10,000 non-cumulative perpetual shares
Issued and outstanding - 10,000 non-cumulative perpetual shares	25,000		25,000
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 57,974,535 and 59,424,122 shares	7,247		7,428
Additional paid-in capital	1,188,768		1,236,506
Retained earnings	1,272,528		1,154,624
Accumulated other comprehensive loss	(188,685)		(175,970)
Total Stockholders' Equity	2,304,983		2,247,713
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,311,969	$	18,405,887

CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended				Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts)	December 31,				December 31,
	2024		2023		2024		2023
INTEREST INCOME
Loans:
Taxable	$	197,536	$	197,523	$	803,652	$	747,837
Tax-exempt	9,020		8,197		34,262		31,954
Investment securities:
Taxable	9,024		8,644		36,086		35,207
Tax-exempt	12,754		13,821		53,487		58,117
Deposits with financial institutions	5,350		8,034		16,992		17,719
Federal Home Loan Bank stock	958		771		3,527		3,052
Total Interest Income	234,642		236,990		948,006		893,886
INTEREST EXPENSE
Deposits	89,835		96,655		386,127		306,092
Federal funds purchased	26		1		481		1,421
Securities sold under repurchase agreements	680		827		3,057		3,451
Federal Home Loan Bank advances	8,171		6,431		29,886		27,206
Subordinated debentures and other borrowings	1,560		3,013		7,341		10,316
Total Interest Expense	100,272		106,927		426,892		348,486
NET INTEREST INCOME	134,370		130,063		521,114		545,400
Provision for credit losses	4,200		1,500		35,700		3,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	130,170		128,563		485,414		541,900
NONINTEREST INCOME
Service charges on deposit accounts	8,124		7,690		32,606		30,837
Fiduciary and wealth management fees	8,665		8,187		34,215		30,840
Card payment fees	4,957		4,437		19,317		18,862
Net gains and fees on sales of loans	5,681		4,111		20,840		15,659
Derivative hedge fees	1,594		1,049		3,082		3,385
Other customer fees	316		237		1,547		1,880
Earnings on cash surrender value of life insurance	2,188		3,202		8,464		8,347
Net realized losses on sales of available for sale securities	(11,592)		(2,317)		(20,757)		(6,930)
Gain on branch sale	19,983		—		19,983		—
Other income (loss)	2,826		(152)		6,283		2,722
Total Noninterest Income	42,742		26,444		125,580		105,602
NONINTEREST EXPENSES
Salaries and employee benefits	55,437		60,967		221,167		228,745
Net occupancy	7,335		9,089		28,387		29,859
Equipment	7,028		6,108		26,802		24,113
Marketing	2,582		2,647		7,389		7,427
Outside data processing fees	6,029		5,875		27,140		25,165
Printing and office supplies	377		402		1,462		1,552
Intangible asset amortization	1,771		2,182		7,271		8,743
FDIC assessments	3,744		7,557		15,029		14,674
Other real estate owned and foreclosure expenses	227		1,743		2,076		3,318
Professional and other outside services	3,777		3,981		14,586		16,172
Other expenses	7,982		7,552		27,957		28,502
Total Noninterest Expenses	96,289		108,103		379,266		388,270
INCOME BEFORE INCOME TAX	76,623		46,904		231,728		259,232
Income tax expense	12,274		4,425		30,326		35,446
NET INCOME	64,349		42,479		201,402		223,786
Preferred stock dividends	469		469		1,875		1,875
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	63,880	$	42,010	$	199,527	$	221,911
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.10	$	0.71	$	3.42	$	3.74
Diluted Net Income Available to Common Stockholders	$	1.10	$	0.71	$	3.41	$	3.73
Cash Dividends Paid to Common Stockholders	$	0.35	$	0.34	$	1.39	$	1.34
Average Diluted Common Shares Outstanding (in thousands)	58,247		59,556		58,533		59,489

FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
NET CHARGE-OFFS	$	771		$	3,148		$	49,377		$	25,643
AVERAGE BALANCES:
Total Assets	$	18,478,303		$	18,397,200		$	18,400,495		$	18,186,507
Total Loans	12,757,676			12,396,451			12,634,324			12,297,974
Total Earning Assets	17,089,198			17,222,714			17,054,267			16,991,787
Total Deposits	14,788,294			15,000,580			14,816,564			14,721,498
Total Stockholders' Equity	2,312,270			2,130,993			2,252,491			2,127,262
FINANCIAL RATIOS:
Return on Average Assets	1.39		%	0.92		%	1.09		%	1.23		%
Return on Average Stockholders' Equity	11.05			7.89			8.86			10.43
Return on Tangible Common Stockholders' Equity	16.75			12.75			13.71			16.76
Average Earning Assets to Average Assets	92.48			93.62			92.68			93.43
Allowance for Credit Losses - Loans as % of Total Loans	1.50			1.64			1.50			1.64
Net Charge-offs as % of Average Loans (Annualized)	0.02			0.10			0.39			0.21
Average Stockholders' Equity to Average Assets	12.51			11.58			12.24			11.70
Tax Equivalent Yield on Average Earning Assets	5.63			5.64			5.69			5.40
Interest Expense/Average Earning Assets	2.35			2.48			2.50			2.05
Net Interest Margin (FTE) on Average Earning Assets	3.28			3.16			3.19			3.35
Efficiency Ratio	48.48			63.26			53.55			55.17
Tangible Common Book Value Per Share	$	26.78		$	25.06		$	26.78		$	25.06

NONPERFORMING ASSETS
(Dollars In Thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
	2024			2024			2024			2024			2023
Nonaccrual Loans	$	73,773		$	59,088		$	61,906		$	62,478		$	53,580
Other Real Estate Owned and Repossessions	4,948			5,247			4,824			4,886			4,831
Nonperforming Assets (NPA)	78,721			64,335			66,730			67,364			58,411
90+ Days Delinquent	5,902			14,105			1,686			2,838			172
NPAs & 90 Day Delinquent	$	84,623		$	78,440		$	68,416		$	70,202		$	58,583
Allowance for Credit Losses - Loans	$	192,757		$	187,828		$	189,537		$	204,681		$	204,934
Quarterly Net Charge-offs	771			6,709			39,644			2,253			3,148
NPAs / Actual Assets %	0.43		%	0.35		%	0.36		%	0.37		%	0.32		%
NPAs & 90 Day / Actual Assets %	0.46		%	0.43		%	0.37		%	0.38		%	0.32		%
NPAs / Actual Loans and OREO %	0.61		%	0.51		%	0.53		%	0.54		%	0.47		%
Allowance for Credit Losses - Loans / Actual Loans (%)	1.50		%	1.48		%	1.50		%	1.64		%	1.64		%
Net Charge-offs as % of Average Loans (Annualized)	0.02		%	0.21		%	1.26		%	0.07		%	0.10		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	December 31,		September 30,		June 30,		March 31,		December 31,
	2024		2024		2024		2024		2023
ASSETS
Cash and due from banks	$	87,616	$	84,719	$	105,372	$	100,514	$	112,649
Interest-bearing deposits	298,891		359,126		168,528		410,497		436,080
Investment securities, net of allowance for credit losses	3,460,695		3,662,145		3,753,088		3,783,574		3,811,364
Loans held for sale	18,663		40,652		32,292		15,118		18,934
Loans	12,854,359		12,646,808		12,639,650		12,465,582		12,486,027
Less: Allowance for credit losses - loans	(192,757)		(187,828)		(189,537)		(204,681)		(204,934)
Net loans	12,661,602		12,458,980		12,450,113		12,260,901		12,281,093
Premises and equipment	129,743		129,582		133,245		132,706		133,896
Federal Home Loan Bank stock	41,690		41,716		41,738		41,758		41,769
Interest receivable	91,829		92,055		97,546		92,550		97,664
Goodwill and other intangibles	731,830		733,601		735,373		737,144		739,101
Cash surrender value of life insurance	304,906		304,613		306,379		306,028		306,301
Other real estate owned	4,948		5,247		4,824		4,886		4,831
Tax asset, deferred and receivable	92,387		86,732		107,080		101,121		99,883
Other assets	387,169		348,384		367,845		331,006		322,322
TOTAL ASSETS	$	18,311,969	$	18,347,552	$	18,303,423	$	18,317,803	$	18,405,887
LIABILITIES
Deposits:
Noninterest-bearing	$	2,325,579	$	2,334,197	$	2,303,313	$	2,338,364	$	2,500,062
Interest-bearing	12,196,047		12,030,903		12,265,757		12,546,220		12,321,391
Total Deposits	14,521,626		14,365,100		14,569,070		14,884,584		14,821,453
Borrowings:
Federal funds purchased	99,226		30,000		147,229		—		—
Securities sold under repurchase agreements	142,876		124,894		100,451		130,264		157,280
Federal Home Loan Bank advances	822,554		832,629		832,703		612,778		712,852
Subordinated debentures and other borrowings	93,529		93,562		93,589		118,612		158,644
Total Borrowings	1,158,185		1,081,085		1,173,972		861,654		1,028,776
Deposits and other liabilities held for sale	—		288,476		—		—		—
Interest payable	16,102		18,089		18,554		19,262		18,912
Other liabilities	311,073		292,429		329,302		327,500		289,033
Total Liabilities	16,006,986		16,045,179		16,090,898		16,093,000		16,158,174
STOCKHOLDERS' EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 cumulative shares
Issued and outstanding - 125 cumulative shares	125		125		125		125		125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized -- 10,000 non-cumulative perpetual shares
Issued and outstanding - 10,000 non-cumulative perpetual shares	25,000		25,000		25,000		25,000		25,000
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding	7,247		7,265		7,256		7,321		7,428
Additional paid-in capital	1,188,768		1,192,683		1,191,193		1,208,447		1,236,506
Retained earnings	1,272,528		1,229,125		1,200,930		1,181,939		1,154,624
Accumulated other comprehensive loss	(188,685)		(151,825)		(211,979)		(198,029)		(175,970)
Total Stockholders' Equity	2,304,983		2,302,373		2,212,525		2,224,803		2,247,713
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,311,969	$	18,347,552	$	18,303,423	$	18,317,803	$	18,405,887

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	December 31,			September 30,			June 30,			March 31,			December 31,
	2024			2024			2024			2024			2023
INTEREST INCOME
Loans:
Taxable	$	197,536		$	206,680		$	201,413		$	198,023		$	197,523
Tax-exempt	9,020			8,622			8,430			8,190			8,197
Investment securities:
Taxable	9,024			9,263			9,051			8,748			8,644
Tax-exempt	12,754			13,509			13,613			13,611			13,821
Deposits with financial institutions	5,350			2,154			2,995			6,493			8,034
Federal Home Loan Bank stock	958			855			879			835			771
Total Interest Income	234,642			241,083			236,381			235,900			236,990
INTEREST EXPENSE
Deposits	89,835			98,856			99,151			98,285			96,655
Federal funds purchased	26			329			126			—			1
Securities sold under repurchase agreements	680			700			645			1,032			827
Federal Home Loan Bank advances	8,171			8,544			6,398			6,773			6,431
Subordinated debentures and other borrowings	1,560			1,544			1,490			2,747			3,013
Total Interest Expense	100,272			109,973			107,810			108,837			106,927
NET INTEREST INCOME	134,370			131,110			128,571			127,063			130,063
Provision for credit losses	4,200			5,000			24,500			2,000			1,500
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	130,170			126,110			104,071			125,063			128,563
NONINTEREST INCOME
Service charges on deposit accounts	8,124			8,361			8,214			7,907			7,690
Fiduciary and wealth management fees	8,665			8,525			8,825			8,200			8,187
Card payment fees	4,957			5,121			4,739			4,500			4,437
Net gains and fees on sales of loans	5,681			6,764			5,141			3,254			4,111
Derivative hedge fees	1,594			736			489			263			1,049
Other customer fees	316			344			460			427			237
Earnings on cash surrender value of life insurance	2,188			2,755			1,929			1,592			3,202
Net realized losses on sales of available for sale securities	(11,592)			(9,114)			(49)			(2)			(2,317)
Gain on branch sale	19,983			—			—			—			—
Other income (loss)	2,826			1,374			1,586			497			(152)
Total Noninterest Income	42,742			24,866			31,334			26,638			26,444
NONINTEREST EXPENSES
Salaries and employee benefits	55,437			55,223			52,214			58,293			60,967
Net occupancy	7,335			6,994			6,746			7,312			9,089
Equipment	7,028			6,949			6,599			6,226			6,108
Marketing	2,582			1,836			1,773			1,198			2,647
Outside data processing fees	6,029			7,150			7,072			6,889			5,875
Printing and office supplies	377			378			354			353			402
Intangible asset amortization	1,771			1,772			1,771			1,957			2,182
FDIC assessments	3,744			3,720			3,278			4,287			7,557
Other real estate owned and foreclosure expenses	227			942			373			534			1,743
Professional and other outside services	3,777			3,035			3,822			3,952			3,981
Other expenses	7,982			6,630			7,411			5,934			7,552
Total Noninterest Expenses	96,289			94,629			91,413			96,935			108,103
INCOME BEFORE INCOME TAX	76,623			56,347			43,992			54,766			46,904
Income tax expense	12,274			7,160			4,067			6,825			4,425
NET INCOME	64,349			49,187			39,925			47,941			42,479
Preferred stock dividends	469			468			469			469			469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	63,880		$	48,719		$	39,456		$	47,472		$	42,010
Per Share Data:
Basic Net Income Available to Common Stockholders	$	1.10		$	0.84		$	0.68		$	0.80		$	0.71
Diluted Net Income Available to Common Stockholders	$	1.10		$	0.84		$	0.68		$	0.80		$	0.71
Cash Dividends Paid to Common Stockholders	$	0.35		$	0.35		$	0.35		$	0.34		$	0.34
Average Diluted Common Shares Outstanding (in thousands)	58,247			58,289			58,328			59,273			59,556
FINANCIAL RATIOS:
Return on Average Assets	1.39		%	1.07		%	0.87		%	1.04		%	0.92		%
Return on Average Stockholders' Equity	11.05			8.66			7.16			8.47			7.89
Return on Tangible Common Stockholders' Equity	16.75			13.39			11.29			13.21			12.75
Average Earning Assets to Average Assets	92.48			92.54			92.81			92.91			93.62
Allowance for Credit Losses - Loans as % of Total Loans	1.50			1.48			1.50			1.64			1.64
Net Charge-offs as % of Average Loans (Annualized)	0.02			0.21			1.26			0.07			0.10
Average Stockholders' Equity to Average Assets	12.51			12.26			12.02			12.17			11.58
Tax Equivalent Yield on Average Earning Assets	5.63			5.82			5.69			5.65			5.64
Interest Expense/Average Earning Assets	2.35			2.59			2.53			2.55			2.48
Net Interest Margin (FTE) on Average Earning Assets	3.28			3.23			3.16			3.10			3.16
Efficiency Ratio	48.48			53.76			53.84			59.21			63.26
Tangible Common Book Value Per Share	$	26.78		$	26.64		$	25.10		$	25.07		$	25.06

LOANS
(Dollars In Thousands)	December 31,		September 30,		June 30,		March 31,		December 31,
	2024		2024		2024		2024		2023
Commercial and industrial loans	$	4,114,292	$	4,041,217	$	3,949,817	$	3,722,365	$	3,670,948
Agricultural land, production and other loans to farmers	256,312		238,743		239,926		234,431		263,414
Real estate loans:
Construction	792,144		814,704		823,267		941,726		957,545
Commercial real estate, non-owner occupied	2,274,016		2,251,351		2,323,533		2,368,360		2,400,839
Commercial real estate, owner occupied	1,157,944		1,152,751		1,174,195		1,137,894		1,162,083
Residential	2,374,729		2,366,943		2,370,905		2,316,490		2,288,921
Home equity	659,811		641,188		631,104		618,258		617,571
Individuals' loans for household and other personal expenditures	166,028		158,480		162,089		161,459		168,388
Public finance and other commercial loans	1,059,083		981,431		964,814		964,599		956,318
Loans	12,854,359		12,646,808		12,639,650		12,465,582		12,486,027
Allowance for credit losses - loans	(192,757)		(187,828)		(189,537)		(204,681)		(204,934)
NET LOANS	$	12,661,602	$	12,458,980	$	12,450,113	$	12,260,901	$	12,281,093

DEPOSITS
(Dollars In Thousands)	December 31,		September 30,		June 30,		March 31,		December 31,
	2024		2024		2024		2024		2023
Demand deposits	$	7,980,061	$	7,678,510	$	7,757,679	$	7,771,976	$	7,965,862
Savings deposits	4,522,758		4,302,236		4,339,161		4,679,593		4,516,433
Certificates and other time deposits of $100,000 or more	1,043,068		1,277,833		1,415,131		1,451,443		1,408,985
Other certificates and time deposits	692,068		802,949		889,949		901,280		849,906
Brokered certificates of deposits1	283,671		303,572		167,150		80,292		80,267
TOTAL DEPOSITS2	$	14,521,626	$	14,365,100	$	14,569,070	$	14,884,584	$	14,821,453

1 - Total brokered deposits of $955.7 million, which includes brokered CD's of $283.7 million at December 31, 2024.

2 - Total deposits at September 30, 2024 excluded $287.7 million of deposits reclassified to Deposits and other liabilities held for sale related to the Illinois branch sale. The sale of $267.4 million of deposits associated with the Illinois branch sale was subsequently completed on December 6, 2024.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	December 31, 2024						December 31, 2023
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
ASSETS
Interest-bearing deposits	$	522,868	$	5,350	4.09	%	$	700,705	$	8,034	4.59	%
Federal Home Loan Bank stock	41,703		958		9.19		41,792		771		7.38
Investment Securities: (1)
Taxable	1,677,554		9,024		2.15		1,801,533		8,644		1.92
Tax-exempt (2)	2,089,397		16,144		3.09		2,282,233		17,495		3.07
Total Investment Securities	3,766,951		25,168		2.67		4,083,766		26,139		2.56
Loans held for sale	36,219		550		6.07		16,355		246		6.02
Loans: (3)
Commercial	8,753,723		156,414		7.15		8,533,233		159,190		7.46
Real estate mortgage	2,177,351		24,401		4.48		2,118,060		21,829		4.12
HELOC and installment	841,537		16,171		7.69		820,728		16,258		7.92
Tax-exempt (2)	948,846		11,418		4.81		908,075		10,376		4.57
Total Loans	12,757,676		208,954		6.55		12,396,451		207,899		6.71
Total Earning Assets	17,089,198		240,430		5.63	%	17,222,714		242,843		5.64	%
Total Non-Earning Assets	1,389,105						1,174,486
TOTAL ASSETS	$	18,478,303					$	18,397,200
LIABILITIES
Interest-Bearing Deposits:
Interest-bearing deposits	$	5,564,228	$	37,049	2.66	%	$	5,504,725	$	40,996	2.98	%
Money market deposits	3,189,334		25,463		3.19		3,096,085		27,909		3.61
Savings deposits	1,362,705		3,102		0.91		1,587,758		3,913		0.99
Certificates and other time deposits	2,313,284		24,221		4.19		2,225,528		23,837		4.28
Total Interest-Bearing Deposits	12,429,551		89,835		2.89		12,414,096		96,655		3.11
Borrowings	1,049,677		10,437		3.98		1,013,856		10,272		4.05
Total Interest-Bearing Liabilities	13,479,228		100,272		2.98		13,427,952		106,927		3.19
Noninterest-bearing deposits	2,358,743						2,586,484
Other liabilities	328,062						251,771
Total Liabilities	16,166,033						16,266,207
STOCKHOLDERS' EQUITY	2,312,270						2,130,993
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,478,303	100,272				$	18,397,200	106,927
Net Interest Income (FTE)			$	140,158					$	135,916
Net Interest Spread (FTE) (4)					2.65	%					2.45	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.63	%					5.64	%
Interest Expense / Average Earning Assets					2.35	%					2.48	%
Net Interest Margin (FTE) (5)					3.28	%					3.16	%
(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2024 and 2023. These totals equal $5,788 and $5,853 for the three months ended December 31, 2024 and 2023, respectively.
(3) Non accruing loans have been included in the average balances.
(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
(5) Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Twelve Months Ended
	December 31, 2024						December 31, 2023
	Average Balance		Interest  Income / Expense		Average Rate		Average Balance		Interest  Income / Expense		Average Rate
Assets:
Interest-bearing deposits	$	418,163	$	16,992	4.06	%	$	431,581	$	17,719	4.11	%
Federal Home Loan Bank stock	41,736		3,527		8.45		41,319		3,052		7.39
Investment Securities: (1)
Taxable	1,759,578		36,086		2.05		1,854,438		35,207		1.90
Tax-exempt (2)	2,200,466		67,705		3.08		2,366,475		73,566		3.11
Total Investment Securities	3,960,044		103,791		2.62		4,220,913		108,773		2.58
Loans held for sale	29,650		1,792		6.04		21,766		1,292		5.94
Loans: (3)
Commercial	8,687,638		641,393		7.38		8,519,706		603,611		7.08
Real estate mortgage	2,158,743		94,890		4.40		2,035,488		82,183		4.04
HELOC and installment	830,079		65,577		7.90		830,006		60,751		7.32
Tax-exempt (2)	928,214		43,370		4.67		891,008		40,448		4.54
Total Loans	12,634,324		847,022		6.70		12,297,974		788,285		6.41
Total Earning Assets	17,054,267		971,332		5.69	%	16,991,787		917,829		5.40	%
Total Non-Earning Assets	1,346,228						1,194,720
Total Assets	$	18,400,495					$	18,186,507
Liabilities:
Interest-Bearing deposits:
Interest-bearing deposits	$	5,506,492	$	157,984	2.87	%	$	5,435,733	$	138,012	2.54	%
Money market deposits	3,061,461		106,026		3.46		2,884,271		83,777		2.90
Savings deposits	1,463,707		14,587		1.00		1,694,230		14,606		0.86
Certificates and other time deposits	2,413,900		107,530		4.45		1,923,268		69,697		3.62
Total Interest-Bearing Deposits	12,445,560		386,127		3.10		11,937,502		306,092		2.56
Borrowings	1,005,017		40,765		4.06		1,111,472		42,394		3.81
Total Interest-Bearing Liabilities	13,450,577		426,892		3.17		13,048,974		348,486		2.67
Noninterest-bearing deposits	2,371,004						2,783,996
Other liabilities	326,423						226,275
Total Liabilities	16,148,004						16,059,245
Stockholders' Equity	2,252,491						2,127,262
Total Liabilities and Stockholders' Equity	$	18,400,495	426,892				$	18,186,507	348,486
Net Interest Income (FTE)			$	544,440					$	569,343
Net Interest Spread (FTE) (4)					2.52	%					2.73	%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.69	%					5.40	%
Interest Expense / Average Earning Assets					2.50	%					2.05	%
Net Interest Margin (FTE) (5)					3.19	%					3.35	%
(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2024 and 2023. These totals equal $23,326 and $23,943 for the years ended December 31, 2024 and 2023, 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.

ADJUSTED NET INCOME AND DILUTED EARNINGS PER COMMON SHARE - NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)	Three Months Ended										Twelve Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,		December 31,		December 31,
	2024		2024		2024		2024		2023		2024		2023
Net Income Available to Common Stockholders - GAAP	$	63,880	$	48,719	$	39,456	$	47,472	$	42,010	$	199,527	$	221,911
Adjustments:
PPP loan income	—		—		—		—		(7)		—		(49)
Net realized losses on sales of available for sale securities	11,592		9,114		49		2		2,317		20,757		6,930
Gain on branch sale	(19,983)		—		—		—		—		(19,983)		—
Non-core expenses1,2,3	762		—		—		3,481		12,682		4,243		12,682
Tax on adjustments	1,851		(2,220)		(12)		(848)		(3,652)		(1,229)		(4,767)
Adjusted Net Income Available to Common Stockholders - Non-GAAP	$	58,102	$	55,613	$	39,493	$	50,107	$	53,350	$	203,315	$	236,707
Average Diluted Common Shares Outstanding (in thousands)	58,247		58,289		58,328		59,273		59,556		58,533		59,489
Diluted Earnings Per Common Share - GAAP	$	1.10	$	0.84	$	0.68	$	0.80	$	0.71	$	3.41	$	3.73
Adjustments:
PPP loan income	—		—		—		—		—		—		—
Net realized losses on sales of available for sale securities	0.20		0.15		—		—		0.04		0.35		0.12
Gain on branch sale	(0.34)		—		—		—		—		(0.34)		—
Non-core expenses1,2,3	0.01		—		—		0.06		0.21		0.07		0.21
Tax on adjustments	0.03		(0.04)		—		(0.01)		(0.06)		(0.02)		(0.08)
Adjusted Diluted Earnings Per Common Share - Non-GAAP	$	1.00	$	0.95	$	0.68	$	0.85	$	0.90	$	3.47	$	3.98

1 - Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale.

2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.

3 - Non-core expenses in 4Q23 included $6.3 million from early retirement and severance costs, $4.3 million from the FDIC special assessment, and $2.1 million from a lease termination.

NET INTEREST MARGIN ("NIM"), ADJUSTED
(Dollars in Thousands)
	Three Months Ended															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
	2024			2024			2024			2024			2023			2024			2023
Net Interest Income (GAAP)	$	134,370		$	131,110		$	128,571		$	127,063		$	130,063		$	521,114		$	545,400
Fully Taxable Equivalent ("FTE") Adjustment	5,788			5,883			5,859			5,795			5,853			23,326			23,943
Net Interest Income (FTE) (non-GAAP)	$	140,158		$	136,993		$	134,430		$	132,858		$	135,916		$	544,440		$	569,343
Average Earning Assets (GAAP)	$	17,089,198		$	16,990,358		$	17,013,984		$	17,123,851		$	17,222,714		$	17,054,267		$	16,991,787
Net Interest Margin (GAAP)	3.15		%	3.09		%	3.02		%	2.97		%	3.02		%	3.06		%	3.21		%
Net Interest Margin (FTE) (non-GAAP)	3.28		%	3.23		%	3.16		%	3.10		%	3.16		%	3.19		%	3.35		%

RETURN ON TANGIBLE COMMON EQUITY - NON-GAAP
(Dollars In Thousands)	Three Months Ended															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
	2024			2024			2024			2024			2023			2024			2023
Total Average Stockholders' Equity (GAAP)	$	2,312,270		$	2,251,547		$	2,203,361		$	2,242,139		$	2,130,993		$	2,252,491		$	2,127,262
Less: Average Preferred Stock	(25,125)			(25,125)			(25,125)			(25,125)			(25,125)			(25,125)			(25,125)
Less: Average Intangible Assets, Net of Tax	(728,218)			(729,581)			(730,980)			(732,432)			(734,007)			(730,295)			(736,601)
Average Tangible Common Equity, Net of Tax (Non-GAAP)	$	1,558,927		$	1,496,841		$	1,447,256		$	1,484,582		$	1,371,861		$	1,497,071		$	1,365,536
Net Income Available to Common Stockholders (GAAP)	$	63,880		$	48,719		$	39,456		$	47,472		$	42,010		$	199,527		$	221,911
Plus: Intangible Asset Amortization, Net of Tax	1,399			1,399			1,399			1,546			1,724			5,744			6,906
Tangible Net Income (Non-GAAP)	$	65,279		$	50,118		$	40,855		$	49,018		$	43,734		$	205,271		$	228,817
Return on Tangible Common Equity (Non-GAAP)	16.75		%	13.39		%	11.29		%	13.21		%	12.75		%	13.71		%	16.76		%

EFFICIENCY RATIO - NON-GAAP
(Dollars In Thousands)	Three Months Ended															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
	2024			2024			2024			2024			2023			2024			2023
Non Interest Expense (GAAP)	$	96,289		$	94,629		$	91,413		$	96,935		$	108,103		$	379,266		$	388,270
Less: Intangible Asset Amortization	(1,771)			(1,772)			(1,771)			(1,957)			(2,182)			(7,271)			(8,743)
Less: OREO and Foreclosure Expenses	(227)			(942)			(373)			(534)			(1,743)			(2,076)			(3,318)
Adjusted Non Interest Expense (Non-GAAP)	$	94,291		$	91,915		$	89,269		$	94,444		$	104,178		$	369,919		$	376,209
Net Interest Income (GAAP)	$	134,370		$	131,110		$	128,571		$	127,063		$	130,063		$	521,114		$	545,400
Plus: Fully Taxable Equivalent Adjustment	5,788			5,883			5,859			5,795			5,853			23,326			23,943
Net Interest Income on a Fully Taxable Equivalent Basis (Non-GAAP)	$	140,158		$	136,993		$	134,430		$	132,858		$	135,916		$	544,440		$	569,343
Non Interest Income (GAAP)	$	42,742		$	24,866		$	31,334		$	26,638		$	26,444		$	125,580		$	105,602
Less: Investment Securities (Gains) Losses	11,592			9,114			49			2			2,317			20,757			6,930
Adjusted Non Interest Income (Non-GAAP)	$	54,334		$	33,980		$	31,383		$	26,640		$	28,761		$	146,337		$	112,532
Adjusted Revenue (Non-GAAP)	$	194,492		$	170,973		$	165,813		$	159,498		$	164,677		$	690,777		$	681,875
Efficiency Ratio (Non-GAAP)	48.48		%	53.76		%	53.84		%	59.21		%	63.26		%	53.55		%	55.17		%
Adjusted Non Interest Expense (Non-GAAP)	$	94,291		$	91,915		$	89,269		$	94,444		$	104,178		$	369,919		$	376,209
Less: Acquisition-related Expenses	—			—			—			—			—			—			—
Less: Non-core Expenses1,2,3	(762)			—			—			(3,481)			(12,682)			(4,243)			(12,682)
Adjusted Non Interest Expense Excluding Non-core Expenses (Non-GAAP)	$	93,529		$	91,915		$	89,269		$	90,963		$	91,496		$	365,676		$	363,527
Adjusted Revenue (Non-GAAP)	$	194,492		$	170,973		$	165,813		$	159,498		$	164,677		$	690,777		$	681,875
Less: Gain on Branch Sale	(19,983)			—			—			—			—			(19,983)			—
Adjusted Revenue Excluding Gain on Branch Sale (Non-GAAP)	$	174,509		$	170,973		$	165,813		$	159,498		$	164,677		$	670,794		$	681,875
Adjusted Efficiency Ratio (Non-GAAP)	53.60		%	53.76		%	53.84		%	57.03		%	55.56		%	54.51		%	53.31		%

1 - Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale.

2 - Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.

3 - Non-core expenses in 4Q23 included $6.3 million from early retirement and severance costs, $4.3 million from the FDIC special assessment, and $2.1 million from a lease termination.