First Financial Corporation reports 2nd Quarter results

TERRE HAUTE, Ind., July 24, 2018 (GLOBE NEWSWIRE) -- First Financial Corporation THFF today announced results for the second quarter of 2018. Net income increased 82.72% to $15.3 million compared to $8.4 million for the same period of 2017. The increase included a recovery of a security previously written down for other-than-temporary impairment, which contributed $2.4 million pre-tax to interest income and $4.5 million pre-tax to other income. Diluted net income per common share increased 83.82% to $1.25 from $0.68 for the comparable period of 2017.

The Corporation further reported net income of $24.2 million for the six months ended June 30, 2018 versus $17.7 million for the comparable period of 2017. Diluted net income per common share for the six months ended June 30, 2018 was $1.98 versus $1.45 for the comparable period of 2017. The first quarter of 2017 included a similar pre-tax recovery of $3.1 million. Return on assets for the six months ended June 30, 2018 was 1.63% compared to 1.19% for the six months ended June 30, 2017.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our second quarter 2018 results as we experienced another quarter of loan growth which contributed to our increased interest income. Excluding the recovery on the security, our core fee income increased as well. It was a very solid quarter."

Book value per share was $34.25 at June 30, 2018 compared to $35.54 at June 30, 2017. Shareholders' equity was $419.7 million compared to $434.5 million on June 30, 2017.

Average total loans for the second quarter of 2018 were $1.92 billion versus $1.85 billion for the comparable period in 2017, an increase of $68.0 million or 3.68%. Total loans outstanding increased $71.5 million, or 3.85% to $1.93 billion as of June 30, 2018 from $1.86 billion as of June 30, 2017. On a linked quarter basis, average total loans increased $7.4 million, from $1.91 billion for the quarter ending March 31, 2018.

Average total deposits for the quarter ended June 30, 2018 were $2.47 billion versus $2.44 billion as of June 30, 2017. Total deposits increased $26.6 million or 1.10% to $2.45 billion as of June 30, 2018 from $2.43 billion as of June 30, 2017. On a linked quarter basis, average deposits increased $17.5 million from $2.45 billion for the quarter ending March 31, 2018.

The company's tangible common equity to tangible asset ratio was 14.05% at June 30, 2018, compared to 13.73% at June 30, 2017.

Net interest income for the second quarter of 2018 was $30.7 million compared to the $26.6 million reported for the same period of 2017. The net interest margin for the six months ended June 30, 2018 increased to 4.32% compared to 4.05% for the same period ending June 30, 2017.

The provision for loan losses for the three months ended June 30, 2018 was $1.4 million compared to $1.0 million for the second quarter of 2017. Net charge-offs were $1.5 million for the second quarter of 2018 compared to $755 thousand in the same period of 2017. The Corporation's allowance for loan losses as of June 30, 2018 was $20.1 million compared to $19.7 million as of June 30, 2017. The allowance for loan losses as a percent of total loans was 1.04% as of June 30, 2018 compared to 1.06% as of June 30, 2017.

Nonperforming loans decreased 7.3% to $18.9 million as of June 30, 2018 versus $20.4 million as of June 30, 2017. The ratio of nonperforming loans to total loans and leases was .98% as of June 30, 2018 versus 1.10% as of June 30, 2017.

Non-interest income for the three months ended June 30, 2018 was $13.0 compared to $8.1 million as of June 30, 2017. The $4.8 million increase included a $4.5 million recovery on a security discussed earlier.

Non-interest expense for the three months ended June 30, 2018 was $22.7 million compared to $22.1 million in 2017. The Corporation's efficiency ratio was 50.80% for the quarter ending June 30, 2018 versus 60.93% for the same period in 2017.

               

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, and The Morris Plan Company of Terre Haute.

  Three Months EndedSix Months Ended
  June 30,March 31,June 30,June 30,June 30,
  20182018201720182017
END OF PERIOD BALANCES      
Assets $2,968,048 $2,956,654 $2,974,688 $2,968,048 $2,974,688 
Deposits $2,454,335 $2,457,189 $2,427,723 $2,454,335 $2,427,723 
Loans, including net deferred loan costs $1,928,572 $1,907,445 $1,857,030 $1,928,572 $1,857,030 
Allowance for Loan Losses $20,071 $20,241 $19,680 $20,071 $19,680 
Total Equity $419,695 $414,901 $434,454 $419,695 $434,454 
Tangible Common Equity (a) $383,916 $379,019 $398,242 $383,916 $398,242 
       
AVERAGE BALANCES      
Total Assets $2,973,295 $2,979,601 $2,974,260 $2,976,448 $2,978,687 
Earning Assets $2,784,128 $2,800,498 $2,779,361 $2,787,091 $2,773,176 
Investments $865,694 $876,764 $920,453 $871,229 $920,026 
Loans $1,915,532 $1,908,118 $1,847,484 $1,911,825 $1,844,438 
Total Deposits $2,467,426 $2,449,888 $2,436,440 $2,458,657 $2,440,301 
Interest-Bearing Deposits $2,041,391 $2,028,581 $2,009,932 $2,034,986 $1,990,890 
Interest-Bearing Liabilities $34,539 $54,475 $51,752 $44,507 $50,958 
Total Equity $420,092 $414,340 $430,975 $417,216 $428,824 
       
INCOME STATEMENT DATA      
Net Interest Income $30,684 $27,473 $26,560 $58,157 $53,067 
Net Interest Income Fully Tax Equivalent (b) $31,694 $28,453 $28,137 $60,147 $56,168 
Provision for Loan Losses $1,355 $1,473 $1,040 $2,828 $2,636 
Non-interest Income $12,961 $8,103 $8,113 $21,064 $19,162 
Non-interest Expense $22,683 $23,210 $22,088 $45,894 $44,665 
Net Income $15,261 $8,954 $8,352 $24,214 $17,721 
       
PER SHARE DATA      
Basic and Diluted Net Income Per Common Share $1.25 $0.73 $0.68 $1.98 $1.45 
Cash Dividends Declared Per Common Share $0.51 $ $0.50 $0.51 $0.50 
Book Value Per Common Share $34.25 $33.86 $35.54 $34.25 $35.54 
Tangible Book Value Per Common Share (c) $31.12 $30.93 $32.12 $31.33 $32.58 
Basic Weighted Average Common Shares Outstanding 12,255 12,248 12,224 12,252 12,221 

(a)  Tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholder's equity.

(b)  Net interest income fully tax equivalent is a non-GAAP financial measure derived from GAAP-based amounts. We calculate net interest income fully tax equivalent by adding back the tax equivalent factor of tax exempt income to net interest income. We calculate the tax equivalent factor of tax exempt income by dividing tax exempt income by the net of tax rate of 75% for 2018 and 65% for prior years.

(c)  Tangible book value per common share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the factor by dividing average tangible common equity by average shares outstanding. We calculate average tangible common equity by excluding average intangible assets from average shareholder's equity.

Key Ratios Three Months EndedSix Months Ended
  June 30,March 31,June 30,June 30,June 30,
  20182018201720182017
Return on average assets 2.05%1.20%1.12%1.63%1.19%
Return on average common shareholder's equity 14.53%8.64%7.75%11.61%8.26%
Efficiency ratio 50.80%63.49%60.93%56.51%59.29%
Average equity to average assets 14.13%13.91%14.49%14.02%14.40%
Net interest margin (a) 4.58%4.06%4.05%4.32%4.05%
Net charge-offs to average loans and leases 0.32%0.24%0.19%0.28%0.19%
Loan and lease loss reserve to loans and leases 1.04%1.06%1.06%1.04%1.06%
Loan and lease loss reserve to nonperforming loans 106.39%97.66%89.05%106.39%89.05%
Nonperforming loans to loans and leases 0.98%1.09%1.10%0.98%1.10%
Tier 1 leverage 14.05%13.71%13.73%14.05%13.73%
Risk-based capital - Tier 1 18.09%17.57%17.80%18.09%17.80%

(a) Net interest margin is calculated on a tax equivalent basis.

Asset Quality Three Months EndedSix Months Ended
  June 30,March 31,June 30,June 30,June 30,
  20182018201720182017
Accruing loans and leases past due 30-89 days $7,741 $9,758 $8,846 $7,741 $8,846 
Accruing loans and leases past due 90 days or more $1,273 $602 $1,117 $1,273 $1,117 
Nonaccrual loans and leases $10,773 $13,206 $11,255 $10,773 $11,255 
Total troubled debt restructuring $6,819 $6,919 $7,984 $6,819 $7,984 
Other real estate owned $497 $1,923 $2,384 $497 $2,384 
Nonperforming loans and other real estate owned $19,362 $22,650 $22,740 $19,362 $22,740 
Total nonperforming assets $22,812 $38,179 $35,024 $22,812 $35,024 
Gross charge-offs $2,270 $2,074 $2,090 $4,344 $4,364 
Recoveries $745 $933 $1,335 $1,678 $2,635 
Net charge-offs/(recoveries) $1,525 $1,141 $755 $2,666 $1,729 



CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data) 
 
 June 30,

 2018
 December 31,

 2017
 (unaudited)
ASSETS       
Cash and due from banks$50,081  $74,107 
Securities available-for-sale 782,609   814,931 
Loans:       
Commercial 1,138,255   1,139,490 
Residential 442,163   436,143 
Consumer 345,404   327,976 
  1,925,822   1,903,609 
(Less) plus:       
Net deferred loan costs 2,750   3,152 
Allowance for loan losses (20,071)  (19,909)
  1,908,501   1,886,852 
Restricted stock 10,390   10,379 
Accrued interest receivable 12,345   12,913 
Premises and equipment, net 47,372   48,272 
Bank-owned life insurance 85,606   85,016 
Goodwill 34,355   34,355 
Other intangible assets 1,424   1,630 
Other real estate owned 497   1,880 
Other assets 34,868   30,333 
TOTAL ASSETS$2,968,048  $3,000,668 
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Deposits:       
Non-interest-bearing$430,382  $425,001 
Interest-bearing:       
Certificates of deposit exceeding the FDIC insurance limits 40,279   43,178 
Other interest-bearing deposits 1,983,674   1,990,474 
  2,454,335   2,458,653 
Short-term borrowings 32,589   57,686 
FHLB advances 1,400    
Other liabilities 60,029   70,760 
TOTAL LIABILITIES 2,548,353   2,587,099 
        
Shareholders' equity       
Common stock, $.125 stated value per share;       
Authorized shares-40,000,000       
Issued shares-14,612,540 in 2018 and 14,595,320 in 2017       
Outstanding shares-12,255,045 in 2018 and 12,246,464 in 2017 1,823   1,822 
Additional paid-in capital 75,995   75,624 
Retained earnings 440,605   420,275 
Accumulated other comprehensive loss (28,889)  (14,704)
Less: Treasury shares at cost-2,357,495 in 2018 and 2,348,856 in 2017 (69,839)  (69,448)
TOTAL SHAREHOLDERS' EQUITY 419,695   413,569 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$2,968,048  $3,000,668 



CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
 Three Months Ended

June 30,
 Six Months Ended

June 30,
 2018 2017 2018 2017
 (unaudited) (unaudited)
INTEREST INCOME:       
Loans, including related fees$24,778  $22,325  $48,401  $44,266 
Securities:       
Taxable5,947  3,630  9,540  7,387 
Tax-exempt1,860  1,843  3,700  3,670 
Other318  330  639  651 
TOTAL INTEREST INCOME32,903  28,128  62,280  55,974 
INTEREST EXPENSE:       
Deposits2,125  1,471  3,889  2,746 
Short-term borrowings88  73  187  117 
Other borrowings6  24  47  44 
TOTAL INTEREST EXPENSE2,219  1,568  4,123  2,907 
NET INTEREST INCOME30,684  26,560  58,157  53,067 
Provision for loan losses1,355  1,040  2,828  2,636 
NET INTEREST INCOME AFTER PROVISION       
FOR LOAN LOSSES29,329  25,520  55,329  50,431 
NON-INTEREST INCOME:       
Trust and financial services1,340  1,149  2,755  2,466 
Service charges and fees on deposit accounts2,846  3,004  5,731  5,781 
Other service charges and fees3,347  3,114  6,491  6,299 
Securities gains/(losses), net2  15  2  17 
Gain on sales of mortgage loans500  393  840  720 
Other4,926  438  5,245  3,879 
TOTAL NON-INTEREST INCOME12,961  8,113  21,064  19,162 
NON-INTEREST EXPENSE:       
Salaries and employee benefits12,578  12,218  25,543  25,293 
Occupancy expense1,633  1,761  3,414  3,529 
Equipment expense1,650  1,835  3,343  3,632 
FDIC Expense223  228  450  461 
Other6,599  6,046  13,144  11,750 
TOTAL NON-INTEREST EXPENSE22,683  22,088  45,894  44,665 
INCOME BEFORE INCOME TAXES19,607  11,545  30,499  24,928 
Provision for income taxes4,346  3,193  6,285  7,207 
NET INCOME15,261  8,352  24,214  17,721 
OTHER COMPREHENSIVE INCOME       
Change in unrealized gains/losses on securities, net of reclassifications and taxes(4,682) 5,045  (11,883) 8,233 
Change in funded status of post retirement benefits, net of taxes281  184  (2,302) 367 
COMPREHENSIVE INCOME$10,860  $13,581  $10,029  $26,321 
PER SHARE DATA       
Basic and Diluted Earnings per Share$1.25  $0.68  $1.98  $1.45 
Weighted average number of shares outstanding (in thousands)12,255  12,224  12,252  12,221 

For more information contact:

Rodger A. McHargue at (812) 238-6334

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