First Merchants Corporation (NASDAQ: FRME) reported record 4th quarter 2016 net income of $22.3 million, compared to $14.2 million during the 4th quarter of 2015. Earnings per share for the period totaled a record $.55 per share, an increase of $.18 per share, or 48.6 percent, over the same period in 2015.

Year-to-date net income totaled a record $81.1 million, compared to $65.4 million during the same period in 2015. Earnings per share for the full year of 2016 totaled a record $1.98 per share, an increase of $.26 per share, or 15.1 percent over the same period in 2015.

Michael C. Rechin, President and Chief Executive Officer, stated, “First Merchants’ 2016 results included record performance throughout nearly every category of the balance sheet and income statement which resulted in successful achievement of our year’s high performance targets. Crisp execution, the economic and interest rate outlook, combined with our recently announced Columbus, Ohio expansion, position us to deliver sustained value through 2017 and beyond.”

Total assets and total loans reached new heights totaling $7.2 billion and $5.1 billion, respectively, as of December 31, 2016; compared to $6.8 billion and $4.7 billion, as of year-end 2015. The organic growth equaled $451 million, or 6.7 percent in total assets and $446 million, or 9.5 percent in total loans. Total deposits also increased during the year by $267 million, or 5 percent totaling $5.6 billion and tangible common equity increased to record levels totaling $643 million and $15.85 per share.

Net-interest income totaled a record $226.5 million for the full year of 2016, an increase of $30.1 million over the $196.4 million total from 2015. The increase can be attributed to several factors including the closing of our Ameriana Bancorp acquisition on December 31, 2015, organic earning asset growth and the expansion of our net-interest margin of 9 basis points. Net-interest margin for 2016 totaled 3.89 percent as yields on earning assets totaled 4.32 percent and the cost of supporting liabilities totaled .43 percent. When adjusted for fair value accretion, net-interest margin totaled 3.69 percent for the year, 4 basis points more than the full year 2015 of 3.65.

Non-interest income totaled $65.2 million for the full year of 2016. When normalized for insurance commission income, the gains on the sale of First Merchants Insurance Group, the cancellation of trust preferred debt, and sales of securities, non-interest income increased by 15.1 percent.

Non-interest expense totaled $177.4 million for the full year 2016, an increase of $2.6 million or 1.5 percent from 2015. The increase includes a full year of expenses from our 2015 acquisitions, off-set by the elimination of operating expenses related to the First Merchants Insurance Group.

The Corporation’s provision expense totaled $5.7 million during the full year 2016 as net charge-offs totaled $2.1 million resulting in growth in the allowance for loan losses of $3.6 million to cover loan growth during the year. Non-accrual loans now total $30.0 million, down from the 2015 total of $31.4 million. The allowance for loan losses increased $4 million and now totals $66 million. The allowance is 1.28 percent of total loans and 1.47 percent of non-purchased loans.

As of December 31, 2016, the Corporation’s total risk-based capital ratio equaled 14.21 percent, common equity tier 1 capital ratio equaled 11.10 percent and the tangible common equity ratio totaled 9.24 percent.

The previous reference to our expansion in Columbus, Ohio relates to our proposed merger with The Arlington Bank which was announced in an 8-K filed yesterday, January 25, 2017.

CONFERENCE CALL

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

To participate, dial (Toll Free) 877-507-0578 and reference First Merchants Corporation's fourth quarter earnings release. International callers please call +1 412-317-1073. A replay of the call will be available until February 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 10098245.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme170126.html during the time of the call. A replay of the web cast will be available until January 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 is comprised of First Merchants Bank, which also operates as Lafayette Bank & Trust, and First Merchants Private Wealth Advisors which operates 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) December 31,
2016 2015
ASSETS
Cash and cash equivalents $ 127,927 $ 102,170
Interest-bearing time deposits 24,459 32,315
Investment securities 1,304,505 1,276,999
Loans held for sale 2,929 9,894
Loans 5,139,645 4,693,822
Less: Allowance for loan losses (66,037 ) (62,453 )
Net loans 5,073,608 4,631,369
Premises and equipment 94,432 97,648
Federal Reserve and Federal Home Loan Bank stock 17,964 37,633
Interest receivable 26,194 24,415
Core deposit intangibles and goodwill 258,866 259,764
Cash surrender value of life insurance 201,671 200,539
Other real estate owned 8,966 17,257
Tax asset, deferred and receivable 39,384 46,977
Other assets 30,706   24,023  
TOTAL ASSETS $ 7,211,611   $ 6,761,003  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,348,267 $ 1,266,027
Interest-bearing 4,208,231   4,023,620  
Total Deposits 5,556,498 5,289,647
Borrowings:
Federal funds purchased 120,349 49,721
Securities sold under repurchase agreements 146,480 155,325
Federal Home Loan Bank advances 298,923 235,652
Subordinated debentures and term loans 128,445   127,846  
Total Borrowings 694,197 568,544
Interest payable 3,110 3,092
Other liabilities 56,149   49,211  
Total Liabilities 6,309,954 5,910,494
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares 125 125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding - 40,912,697 and 40,664,259 shares 5,114 5,083
Additional paid-in capital 509,018 504,530
Retained earnings 400,981 342,133
Accumulated other comprehensive loss (13,581 ) (1,362 )
Total Stockholders' Equity 901,657   850,509  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,211,611   $ 6,761,003  
   
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Twelve Months Ended
(Dollars In Thousands, Except Per Share Amounts) December 31, December 31,
2016   2015 2016   2015
INTEREST INCOME
Loans receivable:
Taxable $ 53,895 $ 45,897 $ 210,302 $ 180,805
Tax-exempt 2,096 1,285 6,525 3,459
Investment securities:
Taxable 3,893 4,363 16,415 17,885
Tax-exempt 4,862 4,444 18,622 16,922
Deposits with financial institutions 67 67 350 160
Federal Reserve and Federal Home Loan Bank stock 192   458   1,098   1,967
Total Interest Income 65,005   56,514   253,312   221,198
INTEREST EXPENSE
Deposits 3,886 3,938 15,914 14,855
Federal funds purchased 40 5 102 74
Securities sold under repurchase agreements 91 104 374 368
Federal Home Loan Bank advances 797 728 3,264 2,836
Subordinated debentures and term loans 1,817   1,665   7,185   6,661
Total Interest Expense 6,631   6,440   26,839   24,794
NET INTEREST INCOME 58,374 50,074 226,473 196,404
Provision for loan losses 2,417     5,657   417
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 55,957   50,074   220,816   195,987
OTHER INCOME
Service charges on deposit accounts 4,534 4,118 17,762 16,201
Fiduciary activities 2,500 2,138 9,818 9,196
Other customer fees 4,784 4,534 19,315 16,959
Commission income 4,147
Earnings on cash surrender value of life insurance 886 822 4,273 2,919
Net gains and fees on sales of loans 1,886 1,308 7,052 6,483
Net realized gains on sales of available for sale securities 847 623 3,389 2,670
Gain on sale of insurance subsidiary 8,265
Other income 683   488   3,594   3,028
Total Other Income 16,120   14,031   65,203   69,868
OTHER EXPENSES
Salaries and employee benefits 22,994 25,796 102,552 101,908
Net occupancy 4,568 3,649 16,997 14,668
Equipment 3,069 2,683 12,497 10,787
Marketing 790 915 3,008 3,493
Outside data processing fees 2,672 1,632 9,148 7,109
Printing and office supplies 301 343 1,348 1,353
Core deposit amortization 977 692 3,910 2,835
FDIC assessments 550 939 3,036 3,655
Other real estate owned and foreclosure expenses 574 1,040 2,877 3,956
Professional and other outside services 1,634 3,544 6,516 9,855
Other expenses 3,805   4,277   15,470   15,187
Total Other Expenses 41,934   45,510   177,359   174,806
INCOME BEFORE INCOME TAX 30,143 18,595 108,660 91,049
Income tax expense 7,850   4,418   27,609   25,665
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 22,293   $ 14,177   $ 81,051   $ 65,384
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.55 $ 0.37 $ 1.99 $ 1.73
Diluted Net Income Available to Common Stockholders $ 0.55 $ 0.37 $ 1.98 $ 1.72
Cash Dividends Paid $ 0.15 $ 0.11 $ 0.54 $ 0.41
Average Diluted Shares Outstanding (in thousands) 41,124 38,191 41,013 38,088
         
FINANCIAL HIGHLIGHTS
(Dollars in thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
2016 2015 2016 2015
NET CHARGE OFF'S $ (164 ) $ 408 $ 2,073 $ 1,928
 
AVERAGE BALANCES:
Total Assets $ 7,086,456 $ 6,301,222 $ 6,899,265 $ 6,085,687
Total Loans 5,008,066 4,351,621 4,814,005 4,179,839
Total Earning Assets 6,367,973 5,678,050 6,180,050 5,464,829
Total Deposits 5,585,468 4,994,624 5,438,217 4,806,503
Total Stockholders' Equity 903,610 774,560 884,664 753,724
 
FINANCIAL RATIOS:
Return on Average Assets 1.26 % 0.90 % 1.17 % 1.07 %
Return on Average Stockholders' Equity 9.87 7.32 9.16 8.67
Return on Average Common Stockholders' Equity 9.87 7.32 9.16 8.68
Average Earning Assets to Average Assets 89.86 90.11 89.58 89.80
Allowance for Loan Losses as % of Total Loans 1.28 1.33 1.28 1.33
Net Charge Off's as % of Average Loans (Annualized) (0.01 ) 0.04 0.04 0.05
Average Stockholders' Equity to Average Assets 12.75 12.29 12.82 12.39
Tax Equivalent Yield on Earning Assets 4.32 4.20 4.32 4.25
Cost of Supporting Liabilities 0.42 0.45 0.43 0.45
Net Interest Margin (FTE) on Earning Assets 3.90 3.75 3.89 3.80
Efficiency Ratio 52.18 65.77 56.51 61.19
Tangible Common Book Value Per Share $ 15.85 $ 14.68 $ 15.85 $ 14.68
         
NON-PERFORMING ASSETS
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
Non-Accrual Loans $ 29,998 $ 34,105 $ 33,565 $ 36,719 $ 31,389
Renegotiated Loans 4,747   3,940   4,299   1,015   1,923  
Non-Performing Loans (NPL) 34,745 38,045 37,864 37,734 33,312
Other Real Estate Owned 8,966   10,242   13,219   15,626   17,257  
Non-Performing Assets (NPA) 43,711 48,287 51,083 53,360 50,569
90+ Days Delinquent 112   1,625   362   963   907  
NPAs & 90 Day Delinquent $ 43,823   $ 49,912   $ 51,445   $ 54,323   $ 51,476  
 
Loan Loss Reserve $ 66,037 $ 63,456 $ 62,186 $ 62,086 $ 62,453
Quarterly Net Charge-off's (164

)

630 690 917 408
NPAs / Actual Assets % 0.61

 %

0.69 % 0.74 % 0.78 % 0.75 %
NPAs & 90 Day / Actual Assets % 0.61

 %

0.71 % 0.74 % 0.80 % 0.76 %
NPAs / Actual Loans and OREO % 0.85

 %

0.97 % 1.06 % 1.13 % 1.07 %
Loan Loss Reserves / Actual Loans (%) 1.28

 %

1.28 % 1.29 % 1.32 % 1.33 %
Net Charge Off's as % of Average Loans (Annualized) (0.01

)%

0.05

%

0.06 % 0.08 % 0.04 %
         
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
ASSETS
Cash and cash equivalents $ 127,927 $ 99,602 $ 120,471 $ 85,738 $ 102,170
Interest-bearing time deposits 24,459 33,803 62,533 77,453 32,315
Investment securities 1,304,505 1,300,428 1,297,801 1,270,777 1,276,999
Loans held for sale 2,929 1,482 18,854 3,628 9,894
Loans 5,139,645 4,973,844 4,791,429 4,709,907 4,693,822
Less: Allowance for loan losses (66,037 ) (63,456 ) (62,186 ) (62,086 ) (62,453 )
Net loans 5,073,608 4,910,388 4,729,243 4,647,821 4,631,369
Premises and equipment 94,432 95,540 95,170 96,494 97,648
Federal Reserve and Federal Home Loan Bank stock 17,964 18,044 18,096 37,553 37,633
Interest receivable 26,194 23,652 23,351 22,836 24,415
Core deposit intangibles and goodwill 258,866 259,844 260,821 261,799 259,764
Cash surrender value of life insurance 201,671 201,856 201,417 200,549 200,539
Other real estate owned 8,966 10,242 13,219 15,626 17,257
Tax asset, deferred and receivable 39,384 31,779 32,547 47,982 46,977
Other assets 30,706   35,692   32,895   30,283   24,023  
TOTAL ASSETS $ 7,211,611   $ 7,022,352   $ 6,906,418   $ 6,798,539   $ 6,761,003  
LIABILITIES
Deposits:
Noninterest-bearing $ 1,348,267 $ 1,307,886 $ 1,253,747 $ 1,282,462 $ 1,266,027
Interest-bearing 4,208,231   4,136,354   4,153,807   4,028,608   4,023,620  
Total Deposits 5,556,498 5,444,240 5,407,554 5,311,070 5,289,647
Borrowings:
Federal funds purchased 120,349 58,358 20,000 602 49,721
Securities sold under repurchase agreements 146,480 138,671 140,777 150,134 155,325
Federal Home Loan Bank advances 298,923 297,022 268,579 263,588 235,652
Subordinated debentures and term loans 128,445   128,288   127,678   127,523   127,846  
Total Borrowings 694,197 622,339 557,034 541,847 568,544
Interest payable 3,110 3,733 3,051 3,910 3,092
Other liabilities 56,149   51,175   51,229   74,449   49,211  
Total Liabilities 6,309,954 6,121,487 6,018,868 5,931,276 5,910,494
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding 125 125 125 125 125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding 5,114 5,100 5,097 5,094 5,083
Additional paid-in capital 509,018 506,848 505,725 504,661 504,530
Retained earnings 400,981 384,868 369,568 355,317 342,133
Accumulated other comprehensive income (loss) (13,581 ) 3,924   7,035   2,066   (1,362 )
Total Stockholders' Equity 901,657   900,865   887,550   867,263   850,509  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,211,611   $ 7,022,352   $ 6,906,418   $ 6,798,539   $ 6,761,003  
         
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts) December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
INTEREST INCOME
Loans receivable:
Taxable $ 53,895 $ 53,819 $ 52,099 $ 50,489 $ 45,897
Tax-exempt 2,096 1,649 1,465 1,315 1,285
Investment securities:
Taxable 3,893 3,992 4,202 4,328 4,363
Tax-exempt 4,862 4,668 4,583 4,509 4,444
Deposits with financial institutions 67 55 122 106 67
Federal Reserve and Federal Home Loan Bank stock 192   193   233   480   458  
Total Interest Income 65,005   64,376   62,704   61,227   56,514  
INTEREST EXPENSE
Deposits 3,886 3,926 4,039 4,063 3,938
Federal funds purchased 40 27 7 28 5
Securities sold under repurchase agreements 91 91 92 100 104
Federal Home Loan Bank advances 797 853 818 796 728
Subordinated debentures and term loans 1,817   1,797   1,786   1,785   1,665  
Total Interest Expense 6,631   6,694   6,742   6,772   6,440  
NET INTEREST INCOME 58,374 57,682 55,962 54,455 50,074
Provision for loan losses 2,417   1,900   790   550    
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 55,957   55,782   55,172   53,905   50,074  
OTHER INCOME
Service charges on deposit accounts 4,534 4,667 4,416 4,145 4,118
Fiduciary activities 2,500 2,448 2,376 2,494 2,138
Other customer fees 4,784 4,777 4,695 5,059 4,534
Earnings on cash surrender value of life insurance 886 614 1,297 1,476 822
Net gains and fees on sales of loans 1,886 1,989 1,717 1,460 1,308
Net realized gains on sales of available for sale securities 847 839 706 997 623
Other income 683   1,527   1,178   206   488  
Total Other Income 16,120   16,861   16,385   15,837   14,031  
OTHER EXPENSES
Salaries and employee benefits 22,994 26,651 25,570 27,337 25,796
Net occupancy 4,568 4,348 4,059 4,022 3,649
Equipment 3,069 2,947 3,243 3,238 2,683
Marketing 790 630 851 737 915
Outside data processing fees 2,672 2,382 2,025 2,069 1,632
Printing and office supplies 301 314 369 364 343
Core deposit amortization 977 978 977 978 692
FDIC assessments 550 534 1,002 950 939
Other real estate owned and foreclosure expenses 574 637 915 751 1,040
Professional and other outside services 1,634 1,242 1,478 2,162 3,544
Other expenses 3,805   3,452   4,346   3,867   4,277  
Total Other Expenses 41,934   44,115   44,835   46,475   45,510  
INCOME BEFORE INCOME TAX 30,143 28,528 26,722 23,267 18,595
Income tax expense 7,850   7,469   6,716   5,574   4,418  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 22,293   $ 21,059   $ 20,006   $ 17,693   $ 14,177  
 
Per Share Data:
Basic Net Income Available to Common Stockholders $ 0.55 $ 0.51 $ 0.50 $ 0.43 $ 0.37
Diluted Net Income Available to Common Stockholders $ 0.55 $ 0.51 $ 0.49 $ 0.43 $ 0.37
Cash Dividends Paid $ 0.15 $ 0.14 $ 0.14 $ 0.11 $ 0.11
Average Diluted Shares Outstanding (in thousands) 41,124 41,026 40,969 40,917 38,191
FINANCIAL RATIOS:
Return on Average Assets 1.26 % 1.22 % 1.17 % 1.05 % 0.90 %
Return on Average Stockholders' Equity 9.87 9.39 9.13 8.21 7.32
Return on Average Common Stockholders' Equity 9.87 9.39 9.14 8.21 7.32
Average Earning Assets to Average Assets 89.86 89.73 89.41 89.28 90.11
Allowance for Loan Losses as % of Total Loans 1.28 1.28 1.29 1.32 1.33
Net Charge Off's as % of Average Loans (Annualized) (0.01 ) 0.05 0.06 0.08 0.04
Average Stockholders' Equity to Average Assets 12.75 12.99 12.78 12.78 12.29
Tax Equivalent Yield on Earning Assets 4.32 4.37 4.30 4.28 4.20
Cost of Supporting Liabilities 0.42 0.43 0.44 0.45 0.45
Net Interest Margin (FTE) on Earning Assets 3.90 3.94 3.86 3.83 3.75
Efficiency Ratio 52.18 55.12 57.33 61.78 65.77
Tangible Common Book Value Per Share $ 15.85 $ 15.86 $ 15.53 $ 15.02 $ 14.68
         
LOANS
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
Commercial and industrial loans $ 1,194,646 $ 1,146,538 $ 1,084,890 $ 1,060,559 $ 1,057,075
Agricultural production financing and other loans to farmers 79,689 93,169 95,131 92,137 97,711
Real estate loans:
Construction 418,703 368,241 352,980 391,621 366,704
Commercial and farmland 1,953,062 1,941,739 1,869,703 1,806,395 1,802,921
Residential 739,169 739,855 758,870 769,592 786,105
Home Equity 418,525 398,837 374,159 353,946 348,613
Individuals' loans for household and other personal expenditures 77,479 76,497 75,205 73,622 74,717
Lease financing receivables, net of unearned income 311 380 388 461 588
Other commercial loans 258,061   208,588   180,103   161,574   159,388  
Loans 5,139,645 4,973,844 4,791,429 4,709,907 4,693,822
Allowance for loan losses (66,037 ) (63,456 ) (62,186 ) (62,086 ) (62,453 )
NET LOANS $ 5,073,608   $ 4,910,388   $ 4,729,243   $ 4,647,821   $ 4,631,369  
         
DEPOSITS
(Dollars In Thousands) December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
Demand deposits $ 2,866,853 $ 2,745,028 $ 2,717,500 $ 2,590,603 $ 2,576,283
Savings deposits 1,560,752 1,545,372 1,551,210 1,549,304 1,518,722
Certificates and other time deposits of $100,000 or more 276,274 296,838 301,695 304,559 323,698
Other certificates and time deposits 471,247 498,203 517,720 536,120 556,476
Brokered deposits 381,372   358,799   319,429   330,484   314,468
TOTAL DEPOSITS $ 5,556,498   $ 5,444,240   $ 5,407,554   $ 5,311,070   $ 5,289,647
             
NET INTEREST INCOME
(Dollars in Thousands) For the Three Months Ended
December 31, 2016 December 31, 2015
Interest Interest
Average Income / Average Average Income / Average
Balance Expense Rate Balance Expense Rate
Assets:
Interest-bearing time deposits $ 49,835 $ 66 0.53 % $ 94,150 $ 67 0.28 %
Federal Reserve and Federal Home Loan Bank stock 18,041 193 4.28 34,909 458 5.25
Investment Securities: (1)
Taxable 710,902 3,893 2.19 687,265 4,363 2.54
Tax-Exempt (2) 581,129   7,480   5.15 510,105   6,837   5.36
Total Investment Securities 1,292,031   11,373   3.52 1,197,370   11,200   3.74
Loans held for sale 1,611 81 20.11 1,829 93 20.34
Loans: (3)
Commercial 3,655,414 41,830 4.58 3,263,959 36,284 4.45
Real Estate Mortgage 557,259 6,125 4.40 465,097 4,844 4.17
Installment 519,257 5,859 4.51 430,440 4,675 4.34
Tax-Exempt (2) 274,525   3,225   4.70 190,296   1,978   4.16
Total Loans 5,008,066   57,120   4.56 4,351,621   47,874   4.40
Total Earning Assets 6,367,973 68,752   4.32 5,678,050 59,599   4.20
Net unrealized gain on securities available for sale 7,221 9,832
Allowance for loan losses (63,999 ) (63,077 )
Cash and cash equivalents 113,414 102,144
Premises and equipment 95,245 83,800
Other assets 566,602   490,473  
Total Assets $ 7,086,456   $ 6,301,222  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,524,324 $ 730 0.19 % $ 1,205,874 $ 481 0.16 %
Money market deposits 795,045 328 0.17 844,629 463 0.22
Savings deposits 766,232 164 0.09 645,057 191 0.12
Certificates and other time deposits 1,132,962   2,664   0.94 1,089,465   2,803   1.03
Total Interest-bearing Deposits 4,218,563 3,886 0.37 3,785,025 3,938 0.42
Borrowings 531,059   2,745   2.07 488,997   2,502   2.05
Total Interest-bearing Liabilities 4,749,622 6,631 0.56 4,274,022 6,440 0.60
Noninterest-bearing deposits 1,366,905 1,209,599
Other liabilities 66,319   43,041  
Total Liabilities 6,182,846 5,526,662
Stockholders' Equity 903,610     774,560    
Total Liabilities and Stockholders' Equity $ 7,086,456   6,631   0.42 $ 6,301,222   6,440   0.45
Net Interest Income $ 62,121   $ 53,159  
Net Interest Margin 3.90 % 3.75 %
(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 2016 and 2015. These totals equal $3,747 and $3,085 for the three months ended December 31, 2016 and 2015, respectively.
(3) Non accruing loans have been included in the average balances.
             
NET INTEREST INCOME
(Dollars in Thousands) For the Years Ended
December 31, 2016 December 31, 2015
Interest Interest
Average Income / Average Average Income / Average
Balance Expense Rate Balance Expense Rate
Assets:
Interest-bearing time deposits $ 69,753 $ 350 0.50 % $ 61,373 $ 160 0.26 %
Federal Reserve and Federal Home Loan Bank stock 24,268 1,098 4.52 37,495 1,967 5.25
Investment Securities: (1)
Taxable 721,689 16,415 2.27 703,019 17,885 2.54
Tax-Exempt (2) 550,335   28,649   5.21 483,103   26,034   5.39
Total Investment Securities 1,272,024   45,064   3.54 1,186,122   43,919   3.70
Loans held for sale 4,050 372 9.19 3,725 475 12.75
Loans: (3)
Commercial 3,541,098 162,848 4.60 3,187,239 142,696 4.48
Real Estate Mortgage 566,050 25,156 4.44 457,013 19,457 4.26
Installment 485,111 21,926 4.52 406,163 18,177 4.48
Tax-Exempt (2) 217,696   10,039   4.61 125,699   5,322   4.23
Total Loans 4,814,005   220,341   4.58 4,179,839   186,127   4.45
Total Earning Assets 6,180,050 266,853   4.32 % 5,464,829 232,173   4.25 %
Net unrealized gain on securities available for sale 9,969 11,800
Allowance for loan losses (62,976 ) (62,975 )
Cash and cash equivalents 105,443 98,051
Premises and equipment 96,023 82,710
Other assets 570,756   491,272  
Total Assets $ 6,899,265   $ 6,085,687  
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 1,427,535 $ 2,579 0.18 % $ 1,109,829 $ 1,374 0.12 %
Money market deposits 825,681 1,705 0.21 840,084 1,768 0.21
Savings deposits 731,902 618 0.08 614,675 672 0.11
Certificates and other time deposits 1,151,700   11,012   0.96 1,121,651   11,041   0.98
Total Interest-bearing Deposits 4,136,818 15,914 0.38 3,686,239 14,855 0.40
Borrowings 512,356   10,925   2.13 480,794   9,939   2.07
Total Interest-bearing Liabilities 4,649,174 26,839   0.58 4,167,033 24,794 0.60
Noninterest-bearing deposits 1,301,399 1,120,264
Other liabilities 64,028   44,666  
Total Liabilities 6,014,601 5,331,963
Stockholders' Equity 884,664     753,724    
Total Liabilities and Stockholders' Equity $ 6,899,265   26,839   0.43 $ 6,085,687   24,794   0.45
Net Interest Income $ 240,014   $ 207,379  
Net Interest Margin 3.89 % 3.80 %
(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 2016 and 2015. These totals equal $13,541 and $10,975 for the years ended December 31, 2016 and 2015, respectively.
(3) Non accruing loans have been included in the average balances.