Edgar Filing: FIRST MERCHANTS CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): November 2, 2009

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)

INDIANA 0-17071 35-1544218

(State or other jurisdiction (Commission File Number)(IRS Employer Identification No.)

of incorporation)

200 East Jackson Street

P.O. Box 792

Muncie, IN 47305-2814

(Address of principal executive offices, including zip code)

(765) 747-1500

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On November 02, 2009 First Merchants Corporation issued a press release to report its financial results for the third quarter ended September 30, 2009. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit No. 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a)	Not applicable.

(b)	Not applicable.

(c)

Exhibits.

Exhibit 99.1

Press Release, dated November 02, 2009, issued by First Merchants Corporation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

First Merchants Corporation

(Registrant)

By: /s/ Mark K. Hardwick

Mark K. Hardwick

Executive Vice President and Chief Financial Officer

(Principal Financial and Principal Accounting Officer)

Dated: November 02, 2009

EXHIBIT INDEX

Exhibit No.

99.1	Description

Press Release, dated November 02, 2009, issued by First Merchants Corporation

N / E / W / S

R / E / L / E / A / S / E

November 2, 2009

FOR IMMEDIATE RELEASE

For more information, contact:

Mark K. Hardwick, Executive Vice President/Chief Financial Officer, 765-751-1857

http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES 3^rd QUARTER EARNINGS PER SHARE

First Merchants Corporation (NASDAQ – FRME) has reported a third quarter 2009 net loss of $6.4 million, or $.30 per fully diluted common share. The Corporation’s third quarter contributed to year-to-date fully diluted common share loss of $1.62, down from the prior year income of $1.13.

The loss for the quarter was primarily due to provision for loan losses of $24 million. While the quarterly provision and charge offs remain elevated, the credit costs are significantly beneath the $59 million provision and $40 million of net charge offs in the second quarter of 2009. The Corporation’s allowance for loan losses, as a percent of total loans, increased to $87 million or 2.54 percent of total loans as of quarter-end from 1.14 percent, as of September 30, 2008, a $52 million increase.

Loan charge-offs were $14.4 million for the quarter. Commercial real estate charge-offs totaled $4.6 million, land and lot development loans totaled $2 million, 1-4 family residential properties totaled $1.5 million, commercial and industrial loans totaled $5.6 million. Non-performing assets plus 90 days delinquent loans were $156 million, or 3.49 percent of total assets at quarter-end.

As of September 30, 2009, the Corporation’s total risk-based capital improved to 13.08 percent, Tier 1 risk-based capital totaled 10.44 percent, Tier 1 leverage ratio totaled 8.47 percent, and tangible common equity ratio totaled 4.75 percent. All regulatory capital ratios exceed the regulatory definitions of “well capitalized”.

Net-Interest margin improved by 19 basis points during the linked quarter to 3.83 percent as net interest income totaled nearly $39 million, reflecting the strength of ongoing operations.

Total non-interest income, linked quarter-over-quarter, increased by $4.2 million. Gains from the sale of securities totaled $5.2 million including other-than-temporary impairment charges related to pooled trust preferred holdings totaled $1.2 million.

Total non-interest expense, linked quarter-over-quarter, increased by $800,000 as the other expense category totaled $10.2 million. The largest items included in the category include expenses related to OREO write-downs of $3.6 million, professional services related to credit losses totaled $.7 million and $1.9 million of prepayment penalties of FHLB advances.

The Corporation’s pre-tax, pre-provision net income totaled $15.5 million for the quarter. When normalized for a fully taxable equivalent net interest income and extraordinary items, the pre-tax, pre-provision net income

totaled $19 million. Extraordinary items include such items as bond gains, OTTI expense, ORE write-downs, professional services related to credit losses and FHLB prepayment penalties.

Michael C. Rechin, President and Chief Executive Officer, stated that, “The continued impact of the recession on our results is disappointing to our management team. The level of credit costs suggests that the bottom of the cycle occurred in the second quarter, although evidence of weakness in our franchise footprint remains.”

Rechin continued, “We are pleased to see our efforts in balance sheet management demonstrate benefit. Our net-interest margin growth reflects the active reduction in higher-cost liabilities accompanying this period of lesser loan demand. Margin strength, coupled with active expense control, will accelerate our return to profitability.”

CONFERENCE CALL

First Merchants Corporation will conduct a third quarter earnings conference call and web cast at 2:30 p.m. (ET) on Tuesday, November 3, 2009. To participate, dial (Toll Free) 800-860-2442 and reference First Merchants Corporation's third quarter earnings release. International callers please call +1 412-858-4600. In order to view the web cast and presentation slides, please go to http://www.talkpoint.com/viewer/starthere.asp?Pres=128214 during the time of the call. A replay of the call will be available until November 9, 2009 at 9:00 a.m. (ET). To access a replay of the call, US/Canada participants should dial (Toll Free) 877-344-7529 or for International participants, dial +1 412-317-0088. The replay passcode is 434332.

During the call, Forward-Looking Statements about the relative business outlook may be made. These Forward-Looking Statements, and all other statements made during the call that do not concern historical facts, are subject to risks and uncertainties that may materially affect actual results.

Specific Forward-Looking Statements include, but are not limited to, any indications regarding the Financial Services industry, the economy and future growth of the balance sheet or income statement.

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, N.A., which also operates as Lafayette Bank & Trust, A Division of First Merchants Bank, N.A., Commerce National Bank, A Division of First Merchants Bank, N.A., as well as First Merchants Trust Company, N.A., and First Merchants Insurance Services, a full-service property casualty, personal lines, and healthcare insurance agency.

First Merchants Corporation’s common stock is traded over-the-counter on the NASDAQ National 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).

* * * *

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
				September 30,
	2009				2008
ASSETS
Cash and due from banks	$	66,887			$	69,846
Federal funds sold		52,828				7,818
Cash and cash equivalents		119,715				77,664
Interest-bearing time deposits		44,312				15,623
Investment securities		489,010				388,808
Mortgage loans held for sale		25,173				2,062
Loans		3,398,722				3,078,768
Less: Allowance for loan losses		(86,918	)			(34,985	)
Net loans		3,311,804				3,043,783
Premises and equipment		58,482				44,402
Federal Reserve and Federal Home Loan Bank stock		38,576				25,494
Interest receivable		22,359				21,569
Core deposit intangibles and goodwill		160,017				135,701
Cash surrender value of life insurance		94,267				73,448
Other real estate owned		21,778				16,916
Other assets		90,991				18,604
TOTAL ASSETS	$	4,476,484			$	3,864,074
LIABILITIES
Deposits:
Noninterest-bearing	$	477,040			$	384,928
Interest-bearing		3,035,455				2,529,355
Total Deposits		3,512,495				2,914,283
Borrowings:
Federal funds purchased						57,600
Securities sold under repurchase agreements		125,045				100,227
Federal Home Loan Bank advances		130,024				237,225
Subordinated debentures, revolving credit lines and term loans		194,787				176,256
Total Borrowings		449,856				571,308
Interest payable		5,722				6,529
Other liabilities		32,511				19,861
Total Liabilities		4,000,584				3,511,981
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value:
Authorized -- 500,000 shares
Series A, Issued and outstanding - 116,000 shares		112,190
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 - 21,185,851 and 18,125,090 shares		2,648				2,266
Additional paid-in capital		205,759				141,777
Retained earnings		164,419				210,605
Accumulated other comprehensive loss		(9,241	)			(2,680	)
Total Stockholders' Equity		475,900				352,093
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,476,484			$	3,864,074

CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended						Nine Months Ended
(Dollars in thousands, except per share amounts)	September 30,						September 30,
	2009			2008			2009			2008
INTEREST INCOME
Loans receivable:
Taxable	$	50,683		$	49,828		$	157,319		$	149,952
Tax exempt		280			321			742			664
Investment securities:
Taxable		2,963			2,943			9,987			9,139
Tax exempt		2,788			1,379			6,919			4,344
Federal funds sold		27			10			81			21
Deposits with financial institutions		73			146			291			561
Federal Reserve and Federal Home Loan Bank stock		359			351			1,031			1,056
Total Interest Income		57,173			54,978			176,370			165,737
INTEREST EXPENSE
Deposits		13,666			16,213			45,946			51,943
Federal funds purchased		6			502			28			1,748
Securities sold under repurchase agreements		512			650			1,486			2,098
Federal Home Loan Bank advances		2,209			2,724			7,605			8,585
Subordinated debentures, revolving credit lines and term loans		1,932			1,635			5,524			5,127
Total Interest Expense		18,325			21,724			60,589			69,501
NET INTEREST INCOME		38,848			33,254			115,781			96,236
Provision for loan losses		24,240			7,094			96,156			17,987
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		14,608			26,160			19,625			78,249
OTHER INCOME
Service charges on deposit accounts		3,963			3,568			11,393			9,656
Fiduciary activities		1,844			1,932			5,583			6,200
Other customer fees		2,004			1,696			5,953			5,142
Commission income		1,459			1,457			5,216			4,553
Earnings on cash surrender value of life insurance		391			519			1,045			1,863
Net gains and fees on sales of loans		1,997			648			5,105			1,959
Net realized and unrealized gains on sales of available for sale securities		5,211			185			9,157			271
Other-than-temporary impairment on available for sale securities		(1,227	)		(1,440	)		(3,750	)		(1,440	)
Other income		41			655			1,942			1,877
Total Other Income		15,683			9,220			41,644			30,081
OTHER EXPENSES
Salaries and employee benefits		17,945			15,330			57,645			47,126
Net occupancy		2,422			1,857			7,434			5,412
Equipment		1,875			1,649			5,660			4,946
Marketing		508			605			1,621			1,701
Outside data processing fees		1,360			1,068			4,698			2,959
Printing and office supplies		300			281			1,060			853
Core deposit amortization		1,277			809			3,832			2,407
FDIC assessments		3,121			262			7,191			531
Other expenses		10,187			5,254			22,760			13857
Total Other Expenses		38,995			27,115			111,901			79,792
INCOME (LOSS) BEFORE INCOME TAX		(8,704	)		8,265			(50,632	)		28,538
Income tax expense (benefit)		(3,774	)		2,516			(20,090	)		8,121
NET INCOME (LOSS)		(4,930	)		5,749			(30,542	)		20,417
Preferred stock dividends and discount accretion		1,450						3,528
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS	$	(6,380	)	$	5,749		$	(34,070	)	$	20,417
Per Share Data:
Basic Net Income (Loss) Available to Common Stockholders	$	(0.30	)	$	0.32		$	(1.62	)	$	1.13
Diluted Net Income (Loss) Available to Common Stockholders	$	(0.30	)	$	0.32		$	(1.62	)	$	1.13
Cash Dividends Paid	$	0.08		$	0.23		$	0.39		$	0.69
Average Diluted Shares Outstanding (in thousands)		21,170			18,196			21,085			18,129

FINANCIAL HIGHLIGHTS
	Three Months End						Nine Months Ended
(Dollars in thousands)	September 30,						September 30,
	2009			2008			2009			2008
NET CHARGE OFF'S	$	14,441		$	3,706		$	60,821		$	11,230

AVERAGE BALANCES:
Total Assets	$	4,664,010		$	3,844,905		$	4,732,389		$	3,791,362
Total Loans		3,512,101			3,045,672			3,614,129			2,975,957
Total Deposits		3,564,502			2,929,774			3,623,485			2,867,237
Total Stockholders' Equity		477,196			349,652			478,542			348,396

FINANCIAL RATIOS:
Return on Average Assets		(0.55	)%		0.60	%		(0.96	)%		0.72	%
Return on Average Stockholders' Equity		(5.35	)		6.58			(9.49	)		7.81
Average Earning Assets to Average Assets		90.82			91.02			90.98			90.78
Allowance for Loan Losses as % of Total Loans		2.54			1.14			2.54			1.14
Net Charge Off's as % of Average Loans (Annualized)		1.64			0.49			2.24			0.50
Dividend Payout Ratio		(26.67	)		72.80			(24.07	)		61.27
Average Stockholders' Equity to Average Assets		10.23			9.09			10.11			9.19
Tax Equivalent Yield on Earning Assets		5.56			6.39			5.59			6.52
Cost of Supporting Liabilities		1.73			2.48			1.88			2.69
Net Interest Margin (FTE) on Earning Assets		3.83			3.91			3.71			3.83

NON-PERFORMING ASSETS

(Dollars in thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2009			2009			2009			2008			2008

Non-Accrual Loans	$	123,290		$	112,220		$	108,546		$	87,546		$	37,879
Renegotiated Loans		5,595			4,216						130			135
Non-Performing Loans (NPL)		128,885			116,436			108,546			87,676			38,014
Real Estate Owned and Repossessed Assets		21,778			20,227			22,077			18,458			16,916
Non-Performing Assets (NPA)		150,663			136,663			130,623			106,134			54,930
90+ Days Delinquent		5,422			3,596			7,732			5,982			8,056
NPAS & 90 Day Delinquent	$	156,085		$	140,259		$	138,355		$	112,116		$	62,986
Loan Loss Reserve	$	86,918		$	77,119		$	58,502		$	49,543		$	34,985
YTD Charge-offs		60,821			46,380			6,002			15,602			11,230
NPAs / Actual Assets %		3.37	%		2.90	%		2.67	%		2.22	%		1.42	%
NPAs & 90 Day / Actual Assets %		3.49	%		2.97	%		2.83	%		2.34	%		1.63	%
NPAs / Actual Loans and REO %		4.37	%		3.80	%		3.54	%		2.83	%		1.77	%
Loan Loss Reserves / Actual Loans (%)		2.54	%		2.16	%		1.60	%		1.33	%		1.14	%
NCOs / YTD Average Loans (%)		1.68	%		1.27	%		0.16	%		0.52	%		0.38	%

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2009			2009			2009			2008			2008
ASSETS
Cash and due from banks	$	66,887		$	73,668		$	96,606		$	84,249		$	69,846
Federal funds sold		52,828						89,282			66,237			7,818
Cash and cash equivalents		119,715			73,668			185,888			150,486			77,664
Interest-bearing time deposits		44,312			44,595			158,295			38,823			15,623
Investment securities		489,010			630,958			446,316			481,984			388,808
Mortgage loans held for sale		25,173			23,070			8,659			4,295			2,062
Loans		3,398,722			3,554,229			3,654,074			3,721,952			3,078,768
Less: Allowance for loan losses		(86,918	)		(77,119	)		(58,502	)		(49,543	)		(34,985	)
Net loans		3,311,804			3,477,110			3,595,572			3,672,409			3,043,783
Premises and equipment		58,482			58,692			58,948			59,641			44,402
Federal Reserve and Federal Home Loan Bank stock		38,576			34,441			34,420			34,319			25,494
Interest receivable		22,359			20,778			20,783			23,976			21,569
Core deposit intangibles and goodwill		160,017			161,294			162,571			165,974			135,701
Cash surrender value of life insurance		94,267			93,876			93,544			93,222			73,448
Other real estate owned		21,778			20,227			22,077			18,458			16,916
Other assets		90,991			78,336			99,824			40,568			18,604
TOTAL ASSETS	$	4,476,484		$	4,717,045		$	4,886,897		$	4,784,155		$	3,864,074
LIABILITIES
Deposits:
Noninterest-bearing	$	477,040		$	512,368		$	462,167		$	460,519		$	384,928
Interest-bearing		3,035,455			3,078,555			3,222,797			3,258,292			2,529,355
Total Deposits		3,512,495			3,590,923			3,684,964			3,718,811			2,914,283
Borrowings:
Federal funds purchased					15,042									57,600
Securities sold under repurchase agreements		125,045			115,011			113,106			122,311			100,227
Federal Home Loan Bank advances		130,024			268,938			278,583			360,217			237,225
Subordinated debentures, revolving credit lines and term loans		194,787			194,783			204,779			135,826			176,256
Total Borrowings		449,856			593,774			596,468			618,354			571,308
Interest payable		5,722			7,351			8,278			8,844			6,529
Other liabilities		32,511			51,619			89,082			42,243			19,861
Total Liabilities		4,000,584			4,243,667			4,378,792			4,388,252			3,511,981
STOCKHOLDERS' EQUITY
Preferred Stock, no-par value:
Authorized -- 500,000 shares
Series A, Issued and outstanding - 116,000 shares		112,190			112,009			111,831
Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized -- 600 shares
Issued and outstanding - 125 shares		125			125			125			125			125
Common Stock, $.125 stated value:
Authorized -- 50,000,000 shares
Issued and outstanding - 21,185,851 and 18,125,090 shares		2,648			2,633			2,632			2,647			2,266
Additional paid-in capital		205,759			204,403			203,889			202,299			141,777
Retained earnings		164,419			172,688			205,616			206,496			210,605
Accumulated other comprehensive loss		(9,241	)		(18,480	)		(15,988	)		(15,664	)		(2,680	)
Total Stockholders' Equity		475,900			473,378			508,105			395,903			352,093
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,476,484		$	4,717,045		$	4,886,897		$	4,784,155		$	3,864,074

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)	September 30,			June 30,			March 31,			December 31,			September 30,
	2009			2009			2009			2008			2008
INTEREST INCOME
Loans receivable:
Taxable	$	50,683		$	52,843		$	53,793		$	48,433		$	49,828
Tax exempt		280			247			215			349			321
Investment securities:
Taxable		2,963			3,261			3,763			2,907			2,943
Tax exempt		2,788			2,362			1,769			1,511			1,379
Federal funds sold		27			42			12			7			10
Deposits with financial institutions		73			116			102			194			146
Federal Reserve and Federal Home Loan Bank stock		359			199			473			335			351
Total Interest Income		57,173			59,070			60,127			53,736			54,978
INTEREST EXPENSE
Deposits		13,666			15,569			16,711			15,638			16,213
Federal funds purchased		6						22			108			502
Securities sold under repurchase agreements		512			507			467			502			650
Federal Home Loan Bank advances		2,209			2,447			2,949			2,583			2,724
Subordinated debentures, revolving credit lines and term loans		1,932			2,113			1,479			1,757			1,635
Total Interest Expense		18,325			20,636			21,628			20,588			21,724
NET INTEREST INCOME		38,848			38,434			38,499			33,148			33,254
Provision for loan losses		24,240			58,995			12,921			10,251			7,094
NET INTEREST INCOME (LOSS) AFTER PROVISION FOR LOAN LOSSES		14,608			(20,561	)		25,578			22,897			26,160
OTHER INCOME
Service charges on deposit accounts		3,963			3,888			3,542			3,346			3,568
Fiduciary activities		1,844			1,680			2,059			1,831			1,932
Other customer fees		2,004			1,946			2,003			1,634			1,696
Commission income		1,459			1,698			2,059			1,271			1,457
Earnings on cash surrender value of life insurance		391			331			323			(2,130	)		519
Net gains and fees on sales of loans		1,997			1,678			1,430			531			648
Net realized and unrealized gains on sales of available for sale securities		5,211			1,154			2,792			328			185
Other-than-temporary impairment on available for sale securities		(1,227	)		(2,045	)		(478	)		(1,242	)		(1,440	)
Other income		41			1,160			741			717			655
Total Other Income		15,683			11,490			14,471			6,286			9,220
OTHER EXPENSES
Salaries and employee benefits		17,945			19,685			20,015			15,880			15,330
Net occupancy		2,422			2,443			2,569			2,299			1,857
Equipment		1,875			1,909			1,876			1,713			1,649
Marketing		508			564			549			610			605
Outside data processing fees		1,360			1,405			1,933			1,128			1,068
Printing and office supplies		300			397			363			361			281
Core deposit amortization		1,277			1,278			1,277			809			809
FDIC assessments		3,121			3,494			576			530			262
Other expenses		10,187			7,017			5,556			5,670			5,254
Total Other Expenses		38,995			38,192			34,714			29,000			27,115
INCOME (LOSS) BEFORE INCOME TAX		(8,704	)		(47,263	)		5,335			183			8,265
Income tax expense (benefit)		(3,774	)		(17,534	)		1,218			(38	)		2,516
NET INCOME (LOSS)		(4,930	)		(29,729	)		4,117			221			5,749
Preferred stock dividends and discount accretion		1,450			1,450			628
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS	$	(6,380	)	$	(31,179	)	$	3,489		$	221		$	5,749
PER SHARE:
Basic Net Income (Loss) Available to Common Stockholders	$	(0.30	)	$	(1.49	)	$	0.17		$	0.01		$	0.32
Diluted Net Income (Loss) Available to Common Stockholders	$	(0.30	)	$	(1.49	)	$	0.17		$	0.01		$	0.32
Cash Dividends Paid	$	0.08		$	0.08		$	0.23		$	0.23		$	0.23
Average Diluted Shares Outstanding (in thousands)		21,170			21,120			21,093			18,257			18,196
FINANCIAL RATIOS:
Return on Average Assets		(0.55	)%		(2.59	)%		0.30	%		0.02	%		0.60	%
Return on Average Stockholders' Equity		(5.35	)		(24.58	)		3.10			0.25			6.58
Average Earning Assets to Average Assets		90.82			91.07			91.07			91.15			91.02
Allowance for Loan Losses as % of Total Loans		2.54			2.16			1.60			1.33			1.14
Net Charge Off's as % of Average Loans (Annualized)		1.64			4.44			0.65			0.57			0.49
Dividend Payout Ratio		(26.67	)		(5.41	)		135.29			2,300.00			71.88
Average Stockholders' Equity to Average Assets		10.23			10.54			9.55			9.13			9.09
Tax Equivalent Yield on Earning Assets		5.56			5.52			5.69			6.21			6.39
Cost of Supporting Liabilities		1.73			1.88			2.01			2.33			2.48
Net Interest Margin (FTE) on Earning Assets		3.83			3.64			3.68			3.88			3.91

LOANS
(Dollars in thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
	2009			2009			2009			2008			2008
Commercial and industrial loans	$	806,289		$	874,671		$	891,393		$	904,646		$	851,233
Agricultural production financing and other loans to farmers		124,601			121,361			120,462			135,099			136,176
Real estate loans:
Construction		147,343			162,765			208,145			252,487			167,512
Commercial and farmland		1,228,983			1,231,986			1,246,450			1,202,372			966,259
Residential		855,931			930,714			949,259			956,245			731,065
Individuals' loans for household and other personal expenditures		177,338			174,363			193,109			201,632			145,345
Tax exempt loans		23,846			23,596			18,121			28,070			34,010
Lease financing receivables, net of unearned income		7,797			8,095			8,178			8,996			9,262
Other loans		26,594			26,678			18,957			32,405			37,906
		3,398,722			3,554,229			3,654,074			3,721,952			3,078,768
Allowance for loan losses		(86,918	)		(77,119	)		(58,502	)		(49,543	)		(34,985	)
TOTAL LOANS	$	3,311,804		$	3,477,110		$	3,595,572		$	3,672,409		$	3,043,783

DEPOSITS
(Dollars in thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2009		2009		2009		2008		2008
Demand deposits	$	1,178,372	$	1,197,646	$	1,166,205	$	1,136,267	$	921,034
Savings deposits		726,894		740,340		743,812		721,387		540,596
Certificates and other time deposits of $100,000 or more		492,875		503,971		511,873		509,730		469,426
Other certificates and time deposits		803,173		835,899		853,149		874,144		636,495
Brokered deposits		311,181		313,067		409,925		477,283		346,732
TOTAL DEPOSITS	$	3,512,495	$	3,590,923	$	3,684,964	$	3,718,811	$	2,914,283