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

October 28, 2020

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 THIRD QUARTER 2020 EARNINGS PER SHARE

First Merchants Corporation (NASDAQ - FRME) has reported third quarter 2020 net income of $36.2 million compared to $36.8 million during the same period in 2019. Earnings per share for the period totaled $.67 per share compared to the third quarter of 2019 result of $.71 per share. Year-to-date net income totaled $103.5 million compared to $116.6 million during the nine months ended September 30, 2019. Year-to-date earnings per share totaled $1.91 compared to $2.32 during the same period in 2019.

Total assets equaled $13.7 billion as of September 30, 2020 and loans totaled $9.2 billion. The Corporation’s loan portfolio increased by $940 million, or 11.3 percent, during the past twelve months. Payroll Protection Program (PPP) loans accounted for $901 million of the period’s loan growth. Investments increased $444 million, or 17.8 percent, during the same period and now total $2.9 billion. Total deposits equaled $10.9 billion as of quarter-end and increased by $1.1 billion, or 11.7 percent.

The loan to deposit ratio now totals 84.8 percent and the loan to asset ratio totals 67.3 percent. As of September 30, 2020, the Corporation’s total risk-based capital ratio equaled 14.38 percent, the common equity tier 1 capital ratio equaled 12.02 percent, and the tangible common equity ratio totaled 9.57 percent. Excluding PPP loans, our tangible common equity ratio totaled 10.19 percent.

The Corporation’s provision expense totaled $12.5 million and net charge-offs for the quarter totaled $6.9 million. The allowance for loan losses totaled $126.7 million as of September 30, 2020, up from $80.6 million as of September 30, 2019. The Corporation chose to defer the adoption of the current expected credit loss (“CECL”) model; therefore, the allowance for loan losses was calculated under the incurred loss method. Allowance for loan losses was 1.37% of total loans, 1.65% including remaining fair value marks with allowance, and 1.83% excluding PPP loans from total loans. The $51.9 million increase in year-to-date provision expense primarily reflects our view of increased credit risk related to the COVID-19 pandemic.

Michael C. Rechin, President and Chief Executive Officer, stated, “Our third quarter results highlight increased earnings power as our net interest margin stabilizes while our fee levels reflect increasing activity in customer spending and treasury technology use. Our clients and businesses remain healthy and resilient. Their determination and results mirror the First Merchants’ employee base and the Bank’s performance. Our earnings also increased due to a reduced provision level. The provision level and resultant loan loss reserve reflect a loan portfolio which is granular, diversified and actively reviewed. First Merchants’ exposure to higher risk industries is modest in any peer comparison and is borne out by the low level of customers (2%) utilizing the deferrals and modifications provided through the CARES Act. Capital preservation and capital composition are strengths that will serve us well as we assess the recessionary climate that likely remains through 2021.”

“My confidence regarding 2021 and our longer term future also reflects the executive succession plan announced September 29, 2020. Our Board of Directors’ decision to choose internal candidates to lead First Merchants augers well for high performance and cultural continuity. Mark Hardwick, who will become CEO on January 1, 2021, in tandem with Mike Stewart as President and Michele Kawiecki as Chief Financial Officer, form a trio who are experienced, skilled, and trusted. I am excited about First Merchants’ future and the opportunity to expertly serve our communities, shareholders and teammates.”

Net-interest income for the quarter totaled $92.9 million, up nearly $4 million from the third quarter of 2019 despite margin compression year-over-year of 47 basis points. Linked quarter net-interest margin stabilized as the decline totaled just 4 basis points, two basis points due to fair value accretion and one basis point due to the impact of PPP loans. Yields on earning assets totaled 3.58 percent and the cost of supporting liabilities totaled 43 basis points resulting in quarterly net interest margin of 3.15 percent.

Non-interest income totaled $26.2 million for the quarter, a $4 million increase over the third quarter of 2019. Gains from the sale of mortgage loans reached record levels totaling $5.8 million for the quarter. Non-interest expense totaled $64.7 million for the quarter compared to $67.4 million in the third quarter of 2019, which included $11.2 million of acquisition related expense.

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Wednesday, October 28, 2020.

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, 2020. To access a replay of the call, US participants should dial (Toll Free) 877-344-7529, Canada participants should dial 855-669-9658, or for International participants, dial +1 412-317-0088. The replay access code is 10147757.

In order to view the web cast and presentation slides, please go to http://services.choruscall.com/links/frme201026.html during the time of the call. A replay of the web cast will be available until October 28, 2021.

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 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,
			2020						2019
ASSETS
Cash and cash equivalents			$	164,632					$	202,383
Interest-bearing deposits			273,936						230,101
Investment securities			2,933,286						2,489,420
Loans held for sale			3,183						7,910
Loans			9,243,833						8,299,260
Less: Allowance for loan losses			(126,726)						(80,571)
Net loans			9,117,107						8,218,689
Premises and equipment			112,959						113,446
Federal Home Loan Bank stock			28,736						28,736
Interest receivable			52,992						45,923
Goodwill and other intangibles			574,369						579,751
Cash surrender value of life insurance			291,543						286,747
Other real estate owned			6,942						7,156
Tax asset, deferred and receivable			21,762						15,187
Other assets			155,903						99,612
TOTAL ASSETS			$	13,737,350					$	12,325,061
LIABILITIES
Deposits:
Noninterest-bearing			$	2,187,607					$	1,777,365
Interest-bearing			8,718,546						7,988,086
Total Deposits			10,906,153						9,765,451
Borrowings:
Federal funds purchased			80,000						—
Securities sold under repurchase agreements			187,732						191,603
Federal Home Loan Bank advances			399,522						354,609
Subordinated debentures and other borrowings			118,320						138,630
Total Borrowings			785,574						684,842
Interest payable			5,038						7,855
Other liabilities			206,929						117,901
Total Liabilities			11,903,694						10,576,049
STOCKHOLDERS' EQUITY
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares			125						125
Common Stock, $.125 stated value:
Authorized -- 100,000,000 shares
Issued and outstanding - 53,891,733 and 55,345,672 shares			6,736						6,918
Additional paid-in capital			1,003,777						1,053,148
Retained earnings			757,550						663,173
Accumulated other comprehensive income (loss)			65,468						25,648
Total Stockholders' Equity			1,833,656						1,749,012
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	13,737,350					$	12,325,061

CONSOLIDATED STATEMENTS OF INCOME			Three Months Ended																		Nine Months Ended
(Dollars In Thousands, Except Per Share Amounts)			September 30,																		September 30,
			2020						2019						2020						2019
INTEREST INCOME
Loans receivable:
Taxable			$	84,162					$	96,850					$	268,126					$	280,155
Tax-exempt			5,395						4,500						16,069						12,897
Investment securities:
Taxable			5,399						6,729						19,177						19,822
Tax-exempt			10,931						8,335						30,285						22,660
Deposits with financial institutions			90						1,363						799						3,022
Federal Home Loan Bank stock			248						355						828						1,028
Total Interest Income			106,225						118,132						335,284						339,584
INTEREST EXPENSE
Deposits			9,776						24,830						44,231						67,511
Federal funds purchased			5						15						118						225
Securities sold under repurchase agreements			83						385						527						1,057
Federal Home Loan Bank advances			1,749						1,894						5,317						5,400
Subordinated debentures and other borrowings			1,691						2,076						5,275						6,315
Total Interest Expense			13,304						29,200						55,468						80,508
NET INTEREST INCOME			92,921						88,932						279,816						259,076
Provision for loan losses			12,544						600						54,191						2,300
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			80,377						88,332						225,625						256,776
OTHER INCOME
Service charges on deposit accounts			5,209						6,107						15,491						16,639
Fiduciary and wealth management fees			5,910						4,429						17,496						12,178
Card payment fees			3,996						5,158						16,000						14,813
Net gains and fees on sales of loans			5,841						2,227						12,878						5,258
Derivative hedge fees			1,715						1,684						4,696						3,952
Other customer fees			372						450						1,103						1,230
Earnings on cash surrender value of life insurance			1,171						1,144						3,857						3,079
Net realized gains on sales of available for sale securities			1,817						393						9,497						3,376
Other income			132						524						1,425						1,918
Total Other Income			26,163						22,116						82,443						62,443
OTHER EXPENSES
Salaries and employee benefits			39,187						38,942						114,128						104,679
Net occupancy			5,855						4,777						17,103						14,273
Equipment			4,956						4,030						13,789						11,789
Marketing			1,311						1,332						4,846						5,158
Outside data processing fees			3,776						4,435						10,593						12,048
Printing and office supplies			331						312						997						961
Intangible asset amortization			1,486						1,356						4,511						4,404
FDIC assessments			1,249						(668)						4,244						717
Other real estate owned and foreclosure expenses			717						294						1,906						2,362
Professional and other outside services			2,254						8,251						6,065						12,511
Other expenses			3,587						4,293						12,687						12,660
Total Other Expenses			64,709						67,354						190,869						181,562
INCOME BEFORE INCOME TAX			41,831						43,094						117,199						137,657
Income tax expense			5,621						6,337						13,734						21,027
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS			$	36,210					$	36,757					$	103,465					$	116,630
Per Share Data:
Basic Net Income Available to Common Stockholders			$	0.67					$	0.71					$	1.91					$	2.33
Diluted Net Income Available to Common Stockholders			$	0.67					$	0.71					$	1.91					$	2.32
Cash Dividends Paid			$	0.26					$	0.26					$	0.78					$	0.74
Average Diluted Shares Outstanding (in thousands)			53,971						51,570						54,278						50,227

FINANCIAL HIGHLIGHTS
(Dollars in thousands)			Three Months Ended																		Nine Months Ended
			September 30,																		September 30,
			2020						2019						2020						2019
NET CHARGE-OFFS			$	6,937					$	1,303					$	7,749					$	2,281
AVERAGE BALANCES:
Total Assets			$	13,660,818					$	11,277,742					$	13,297,789					$	10,623,664
Total Loans			9,252,839						7,773,328						8,987,645						7,464,910
Total Earning Assets			12,341,257						10,192,183						11,941,839						9,618,285
Total Deposits			10,944,721						8,922,222						10,541,777						8,397,056
Total Stockholders' Equity			1,831,300						1,596,595						1,814,471						1,502,474
FINANCIAL RATIOS:
Return on Average Assets			1.06		%				1.30		%				1.04		%				1.46		%
Return on Average Stockholders' Equity			7.91						9.21						7.60						10.35
Return on Average Common Stockholders' Equity			7.91						9.21						7.60						10.35
Average Earning Assets to Average Assets			90.34						90.37						89.80						90.54
Allowance for Loan Losses as % of Total Loans			1.37						0.97						1.37						0.97
Net Charge-offs as % of Average Loans (Annualized)			0.30						0.07						0.11						0.04
Average Stockholders' Equity to Average Assets			13.41						14.16						13.64						14.14
Tax Equivalent Yield on Average Earning Assets			3.58						4.77						3.88						4.84
Interest Expense/Average Earning Assets			0.43						1.15						0.62						1.12
Net Interest Margin (FTE) on Average Earning Assets			3.15						3.62						3.26						3.72
Efficiency Ratio			51.40						57.60						50.52						53.36
Tangible Common Book Value Per Share			$	23.48					$	21.26					$	23.48					$	21.26

NON-PERFORMING ASSETS
(Dollars In Thousands)			September 30,						June 30,						March 31,						December 31,						September 30,
			2020						2020						2020						2019						2019
Non-Accrual Loans			$	56,739					$	50,102					$	15,649					$	15,949					$	22,728
Renegotiated Loans			2,677						1,086						665						841						576
Non-Performing Loans (NPL)			59,416						51,188						16,314						16,790						23,304
Other Real Estate Owned and Repossessions			6,984						7,409						8,017						7,527						7,156
Non-Performing Assets (NPA)			66,400						58,597						24,331						24,317						30,460
90+ Days Delinquent			1,330						4,981						312						69						82
NPAs & 90 Day Delinquent			$	67,730					$	63,578					$	24,643					$	24,386					$	30,542
Allowance for Loan Losses			$	126,726					$	121,119					$	99,454					$	80,284					$	80,571
Quarterly Net Charge-offs			6,937						230						582						787						1,303
NPAs / Actual Assets %			0.48		%				0.42		%				0.19		%				0.20		%				0.25		%
NPAs & 90 Day / Actual Assets %			0.49		%				0.46		%				0.19		%				0.20		%				0.25		%
NPAs / Actual Loans and OREO %			0.72		%				0.63		%				0.28		%				0.29		%				0.37		%
Allowance for Loan Losses / Actual Loans (%)			1.37		%				1.30		%				1.15		%				0.95		%				0.97		%
Net Charge-offs as % of Average Loans (Annualized)			0.30		%				0.01		%				0.03		%				0.04		%				0.07		%

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)			September 30,						June 30,						March 31,						December 31,						September 30,
			2020						2020						2020						2019						2019
ASSETS
Cash and cash equivalents			$	164,632					$	229,759					$	127,731					$	177,201					$	202,383
Interest-bearing deposits			273,936						380,021						132,944						118,263						230,101
Investment securities			2,933,286						2,789,379						2,697,954						2,596,063						2,489,420
Loans held for sale			3,183						901						5,039						9,037						7,910
Loans			9,243,833						9,298,541						8,606,849						8,459,310						8,299,260
Less: Allowance for loan losses			(126,726)						(121,119)						(99,454)						(80,284)						(80,571)
Net loans			9,117,107						9,177,422						8,507,395						8,379,026						8,218,689
Premises and equipment			112,959						112,548						114,045						113,055						113,446
Federal Home Loan Bank stock			28,736						28,736						28,736						28,736						28,736
Interest receivable			52,992						57,063						47,489						48,901						45,923
Goodwill and other intangibles			574,369						575,855						577,366						578,880						579,751
Cash surrender value of life insurance			291,543						290,715						289,574						288,206						286,747
Other real estate owned			6,942						7,367						7,972						7,527						7,156
Tax asset, deferred and receivable			21,762						13,126						9,497						12,165						15,187
Other assets			155,903						156,486						147,776						100,194						99,612
TOTAL ASSETS			$	13,737,350					$	13,819,378					$	12,693,518					$	12,457,254					$	12,325,061
LIABILITIES
Deposits:
Noninterest-bearing			$	2,187,607					$	2,260,351					$	1,688,205					$	1,736,396					$	1,777,365
Interest-bearing			8,718,546						8,705,637						8,182,279						8,103,560						7,988,086
Total Deposits			10,906,153						10,965,988						9,870,484						9,839,956						9,765,451
Borrowings:
Federal funds purchased			80,000						—						47,000						55,000						—
Securities sold under repurchase agreements			187,732						181,150						183,317						187,946						191,603
Federal Home Loan Bank advances			399,522						400,817						480,995						351,072						354,609
Subordinated debentures and other borrowings			118,320						285,197						128,741						138,685						138,630
Total Borrowings			785,574						867,164						840,053						732,703						684,842
Interest payable			5,038						5,587						7,746						6,754						7,855
Other liabilities			206,929						171,544						197,275						91,404						117,901
Total Liabilities			11,903,694						12,010,283						10,915,558						10,670,817						10,576,049
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 shares
Issued and outstanding			6,736						6,724						6,719						6,921						6,918
Additional paid-in capital			1,003,777						1,002,962						1,000,942						1,054,997						1,053,148
Retained earnings			757,550						735,439						716,518						696,520						663,173
Accumulated other comprehensive income (loss)			65,468						63,845						53,656						27,874						25,648
Total Stockholders' Equity			1,833,656						1,809,095						1,777,960						1,786,437						1,749,012
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	13,737,350					$	13,819,378					$	12,693,518					$	12,457,254					$	12,325,061

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)			September 30,						June 30,						March 31,						December 31,						September 30,
			2020						2020						2020						2019						2019
INTEREST INCOME
Loans receivable:
Taxable			$	84,162					$	87,312					$	96,652					$	102,617					$	96,850
Tax-exempt			5,395						5,359						5,315						4,671						4,500
Investment securities:
Taxable			5,399						6,147						7,631						7,993						6,729
Tax-exempt			10,931						10,019						9,335						8,995						8,335
Deposits with financial institutions			90						134						575						1,203						1,363
Federal Home Loan Bank stock			248						281						299						342						355
Total Interest Income			106,225						109,252						119,807						125,821						118,132
INTEREST EXPENSE
Deposits			9,776						12,707						21,748						24,074						24,830
Federal funds purchased			5						2						111						26						15
Securities sold under repurchase agreements			83						92						352						367						385
Federal Home Loan Bank advances			1,749						1,794						1,774						1,776						1,894
Subordinated debentures and other borrowings			1,691						1,639						1,945						1,994						2,076
Total Interest Expense			13,304						16,234						25,930						28,237						29,200
NET INTEREST INCOME			92,921						93,018						93,877						97,584						88,932
Provision for loan losses			12,544						21,895						19,752						500						600
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			80,377						71,123						74,125						97,084						88,332
OTHER INCOME
Service charges on deposit accounts			5,209						4,312						5,970						6,312						6,107
Fiduciary and wealth management fees			5,910						5,601						5,985						5,384						4,429
Card payment fees			3,996						6,097						5,907						5,430						5,158
Net gains and fees on sales of loans			5,841						3,674						3,363						2,633						2,227
Derivative hedge fees			1,715						1,042						1,939						1,405						1,684
Other customer fees			372						333						398						434						450
Earnings on cash surrender value of life insurance			1,171						1,326						1,360						1,458						1,144
Net realized gains on sales of available for sale securities			1,817						3,068						4,612						1,039						393
Other income			132						1,028						265						150						524
Total Other Income			26,163						26,481						29,799						24,245						22,116
OTHER EXPENSES
Salaries and employee benefits			39,187						35,698						39,243						39,358						38,942
Net occupancy			5,855						5,447						5,801						5,311						4,777
Equipment			4,956						4,489						4,344						4,429						4,030
Marketing			1,311						2,092						1,443						1,492						1,332
Outside data processing fees			3,776						2,618						4,199						4,428						4,435
Printing and office supplies			331						279						387						484						312
Intangible asset amortization			1,486						1,511						1,514						1,590						1,356
FDIC assessments			1,249						1,472						1,523						—						(668)
Other real estate owned and foreclosure expenses			717						684						505						66						294
Professional and other outside services			2,254						1,553						2,258						2,899						8,251
Other expenses			3,587						4,146						4,954						5,144						4,293
Total Other Expenses			64,709						59,989						66,171						65,201						67,354
INCOME BEFORE INCOME TAX			41,831						37,615						37,753						56,128						43,094
Income tax expense			5,621						4,623						3,490						8,298						6,337
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS			$	36,210					$	32,992					$	34,263					$	47,830					$	36,757
Per Share Data:
Basic Net Income Available to Common Stockholders			$	0.67					$	0.62					$	0.63					$	0.87					$	0.71
Diluted Net Income Available to Common Stockholders			$	0.67					$	0.62					$	0.62					$	0.87					$	0.71
Cash Dividends Paid			$	0.26					$	0.26					$	0.26					$	0.26					$	0.26
Average Diluted Shares Outstanding (in thousands)			53,971						53,943						54,918						55,520						51,570
FINANCIAL RATIOS:
Return on Average Assets			1.06		%				0.97		%				1.09		%				1.53		%				1.30		%
Return on Average Stockholders' Equity			7.91						7.35						7.55						10.82						9.21
Return on Average Common Stockholders' Equity			7.91						7.35						7.55						10.82						9.21
Average Earning Assets to Average Assets			90.34						89.25						89.81						89.71						90.37
Allowance for Loan Losses as % of Total Loans			1.37						1.30						1.15						0.95						0.97
Net Charge-offs as % of Average Loans (Annualized)			0.30						0.01						0.03						0.04						0.07
Average Stockholders' Equity to Average Assets			13.41						13.15						14.45						14.17						14.16
Tax Equivalent Yield on Average Earning Assets			3.58						3.72						4.38						4.63						4.77
Interest Expense/Average Earning Assets			0.43						0.53						0.92						1.01						1.15
Net Interest Margin (FTE) on Average Earning Assets			3.15						3.19						3.46						3.62						3.62
Efficiency Ratio			51.40						47.95						52.17						51.07						57.60
Tangible Common Book Value Per Share			$	23.48					$	23.04					$	22.46					$	21.94					$	21.26

LOANS
(Dollars In Thousands)			September 30,						June 30,						March 31,						December 31,						September 30,
			2020						2020						2020						2019						2019
Commercial and industrial loans			$	2,875,331					$	2,898,329					$	2,199,226					$	2,109,879					$	2,034,311
Agricultural production financing and other loans to farmers			83,090						93,838						87,421						93,861						90,462
Real estate loans:
Construction			622,084						640,560						643,674						787,568						670,138
Commercial and farmland			3,248,506						3,239,998						3,268,168						3,052,698						3,144,649
Residential			1,146,406						1,145,187						1,121,556						1,143,217						1,155,403
Home equity			527,458						532,314						570,398						588,984						601,335
Individuals' loans for household and other personal expenditures			125,411						123,611						129,765						135,989						131,246
Public finance and other commercial loans			615,547						624,704						586,641						547,114						471,716
Loans			9,243,833						9,298,541						8,606,849						8,459,310						8,299,260
Allowance for loan losses			(126,726)						(121,119)						(99,454)						(80,284)						(80,571)
NET LOANS			$	9,117,107					$	9,177,422					$	8,507,395					$	8,379,026					$	8,218,689

DEPOSITS
(Dollars In Thousands)			September 30,						June 30,						March 31,						December 31,						September 30,
			2020						2020						2020						2019						2019
Demand deposits			$	6,279,554					$	6,288,360					$	5,293,200					$	5,250,568					$	5,183,971
Savings deposits			3,518,286						3,278,156						2,962,821						2,896,177						2,808,745
Certificates and other time deposits of $100,000 or more			467,610						607,474						694,062						736,843						731,693
Other certificates and time deposits			542,919						669,119						717,723						741,759						811,780
Brokered deposits			97,784						122,879						202,678						214,609						229,262
TOTAL DEPOSITS			$	10,906,153					$	10,965,988					$	9,870,484					$	9,839,956					$	9,765,451

CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
			For the Three Months Ended
			September 30, 2020																														September 30, 2019
			Average Balance						Interest  Income / Expense						Average Rate						Average Balance						Interest  Income / Expense						Average Rate
Assets:
Interest-bearing deposits			$	301,529					$	90					0.12		%				$	262,082					$	1,363					2.06		%
Federal Home Loan Bank stock			28,736						248						3.45						24,633						355						5.76
Investment Securities: (1)
Taxable			1,258,690						5,399						1.72						1,104,612						6,729						2.44
Tax-Exempt (2)			1,499,463						13,837						3.69						1,027,528						10,551						4.11
Total Investment Securities			2,758,153						19,236						2.79						2,132,140						17,280						3.24
Loans held for sale			24,705						257						4.16						21,913						274						5.00
Loans: (3)
Commercial			6,965,837						66,826						3.84						5,674,956						77,370						5.45
Real Estate Mortgage			887,661						9,996						4.50						822,874						9,518						4.63
Installment			693,363						7,083						4.09						715,428						9,688						5.42
Tax-Exempt (2)			681,273						6,829						4.01						538,157						5,696						4.23
Total Loans			9,252,839						90,991						3.93						7,773,328						102,546						5.28
Total Earning Assets			12,341,257						110,565						3.58		%				10,192,183						121,544						4.77		%
Net unrealized gain (loss) on securities available for sale			70,277																		30,353
Allowance for loan losses			(125,150)																		(80,918)
Cash and cash equivalents			169,539																		143,266
Premises and equipment			113,216																		99,021
Other assets			1,091,679																		893,837
Total Assets			$	13,660,818																	$	11,277,742
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits			$	4,098,017					$	3,890					0.38		%				$	3,134,675					$	9,285					1.18		%
Money market deposits			1,813,392						1,167						0.26						1,307,647						3,766						1.14
Savings deposits			1,574,700						583						0.15						1,244,859						2,523						0.80
Certificates and other time deposits			1,267,152						4,136						1.31						1,736,759						9,256						2.11
Total Interest-bearing Deposits			8,753,261						9,776						0.45						7,423,940						24,830						1.33
Borrowings			733,757						3,528						1.92						660,107						4,370						2.59
Total Interest-bearing Liabilities			9,487,018						13,304						0.56						8,084,047						29,200						1.43
Noninterest-bearing deposits			2,191,460																		1,498,282
Other liabilities			151,040																		98,818
Total Liabilities			11,829,518																		9,681,147
Stockholders' Equity			1,831,300																		1,596,595
Total Liabilities and Stockholders' Equity			$	13,660,818					13,304												$	11,277,742					29,200
Net Interest Income (FTE)									$	97,261																	$	92,344
Net Interest Spread (FTE) (4)															3.02		%																3.34		%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets															3.58		%																4.77		%
Interest Expense / Average Earning Assets															0.43		%																1.15		%
Net Interest Margin (FTE) (5)															3.15		%																3.62		%
(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 2020 and 2019. These totals equal $4,340 and $3,412 for the three months ended September 30, 2020 and 2019, 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 Nine Months Ended
			September 30, 2020																														September 30, 2019
			Average Balance						Interest  Income / Expense						Average Rate						Average Balance						Interest  Income / Expense						Average Rate
Assets:
Federal Funds Sold
Interest-bearing deposits			$	280,038					$	799					0.38		%				$	184,640					$	3,022					2.18		%
Federal Home Loan Bank stock			28,736						828						3.84						24,603						1,028						5.57
Investment Securities: (1)
Taxable			1,302,943						19,177						1.96						1,021,102						19,822						2.59
Tax-Exempt (2)			1,342,477						38,335						3.81						923,030						28,684						4.14
Total Investment Securities			2,645,420						57,512						2.90						1,944,132						48,506						3.33
Loans held for sale			17,175						581						4.51						13,618						512						5.01
Loans: (3)
Commercial			6,698,042						213,241						4.24						5,469,377						224,766						5.48
Real Estate Mortgage			882,911						30,520						4.61						778,778						26,526						4.54
Installment			725,596						23,784						4.37						686,055						28,351						5.51
Tax-Exempt (2)			663,921						20,341						4.09						517,082						16,325						4.21
Total Loans			8,987,645						288,467						4.28						7,464,910						296,480						5.30
Total Earning Assets			11,941,839						347,606						3.88		%				9,618,285						349,036						4.84		%
Net unrealized gain on securities available for sale			58,623																		12,856
Allowance for loan losses			(104,465)																		(81,172)
Cash and cash equivalents			210,778																		130,587
Premises and equipment			113,517																		94,628
Other assets			1,077,497																		848,480
Total Assets			$	13,297,789																	$	10,623,664
Liabilities:
Interest-bearing deposits:
Interest-bearing deposits			$	3,880,489					$	16,351					0.56		%				$	2,921,762					$	24,844					1.13		%
Money market deposits			1,674,622						6,647						0.53						1,222,860						10,057						1.10
Savings deposits			1,507,269						3,007						0.27						1,187,173						7,315						0.82
Certificates and other time deposits			1,476,499						18,226						1.65						1,652,141						25,295						2.04
Total Interest-bearing Deposits			8,538,879						44,231						0.69						6,983,936						67,511						1.29
Borrowings			796,836						11,237						1.88						636,295						12,997						2.72
Total Interest-bearing Liabilities			9,335,715						55,468						0.79						7,620,231						80,508						1.41
Noninterest-bearing deposits			2,002,898																		1,413,120
Other liabilities			144,705																		87,839
Total Liabilities			11,483,318																		9,121,190
Stockholders' Equity			1,814,471																		1,502,474
Total Liabilities and Stockholders' Equity			$	13,297,789					55,468												$	10,623,664					80,508
Net Interest Income (FTE)									$	292,138																	$	268,528
Net Interest Spread (FTE) (4)															3.09		%																3.43		%
Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets															3.88		%																4.84		%
Interest Expense / Average Earning Assets															0.62		%																1.12		%
Net Interest Margin (FTE) (5)															3.26		%																3.72		%
(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 2020 and 2019. These totals equal $12,322 and $9,452 for the nine months ended September 30, 2020 and 2019, 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.