Market Overview

First Financial Corporation reports 1st Quarter results

Share:

TERRE HAUTE, Ind., April 24, 2018 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2018. Net income for the three months ending March 31, 2018 was $8.95 million compared to $9.37 million for the same period of 2017, which included a $1.99 million, after-tax cash recovery of previous other-than-temporary impairment. Diluted net income per common share for the quarter was $0.73 compared to $0.77 for the same period of 2017. Return on assets for the three months ended March 31, 2018 was 1.20% compared to 1.26% for the three months ended March 31, 2017.

Average total loans for the first quarter of 2018 were $1.91 billion versus $1.84 billion for the comparable period in 2017, an increase of $66.7 million or 3.64%. Total loans outstanding increased $72.5 million, or 3.95%, from $1.83 billion as of March 31, 2017 to $1.91 billion as of March 31, 2018. On a linked quarter basis, average total loans increased $33.4 million, or 1.78%, from $1.87 billion for the quarter ending December 31, 2017.

Average total deposits for the quarter ended March 31, 2018 were $2.45 billion versus $2.44 billion as of March 31, 2017. Total deposits increased $19.2 million from $2.44 billion as of March 31, 2017 to $2.46 billion as of March 31, 2018.

Book value per share was $33.86 at March 31, 2018 compared to $34.92 at March 31, 2017. Shareholders' equity at March 31, 2018 was $414.9 million compared to $426.8 million on March 31, 2017. The company's tangible common equity to tangible asset ratio was 12.98% at March 31, 2018, compared to 13.37% at March 31, 2017. The change in equity was a result of the $1.50 special dividend paid in December 2017 and the re-measurement of the deferred tax assets as a result of the Tax Cuts and Jobs Act signed into law on December 22, 2017.

Net interest income for the first quarter of 2018 was $27.5 million, an increase of 3.64% over the $26.5 million reported for the same period of 2017. The net interest margin for the quarter ended March 31, 2018 increased to 4.06% from the 4.05% reported at March 31, 2017.

Nonperforming loans as of March 31, 2018 were $20.7 million as of March 31, 2018 versus $19.7 million as of March 31, 2017. The ratio of nonperforming loans to total loans and leases was 1.09% as of March 31, 2018 versus 1.07% as of March 31, 2017.

The provision for loan losses for the three months ended March 31, 2018 was $1.47 million compared to the $1.60 million provision for the first quarter of 2017. Net charge-offs were $1.14 million for the first quarter of 2018 compared to $974 thousand in the same period of 2017. The Corporation's allowance for loan losses as of March 31, 2018 was $20.2 million compared to $19.4 million as of March 31, 2017. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2018 the same as March 31, 2017.

Non-interest income for the three months ended March 31, 2018 and 2017 was $8.10 and $11.0 million, respectively. The 2017 first quarter non-interest income included a $3.06 million cash recovery of previous other-than-temporary impairment.

Non-interest expense for the three months ended March 31, 2018 increased $633 thousand to $23.2 million compared to $22.6 million in 2017. The Corporation's efficiency ratio was 63.49% for the quarter ending March 31, 2018 versus 57.77% for the same period in 2017.

Income tax expense for the three months ended March 31, 2018 was $1.94 million versus $4.01 million for the same period in 2017. The effective tax rate for 2018 was 17.80% compared to 29.99% for 2017.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our first quarter 2018 results. We continue to grow loans, which when coupled with our asset-sensitive balance sheet, contributed to our strong net-interest income growth."

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 in Indiana.

     
    Three Months Ended
    March 31, December 31, March 31,
    2018 2017 2017
END OF PERIOD BALANCES        
Assets   $ 2,956,654   $ 3,000,668   $ 2,957,285  
Deposits   $ 2,457,189   $ 2,458,653   $ 2,438,012  
Loans, including net deferred loan costs   $ 1,907,445   $ 1,906,761   $ 1,834,893  
Allowance for Loan Losses   $ 20,241   $ 19,909   $ 19,395  
Total Equity   $ 414,901   $ 413,569   $ 426,808  
Tangible Common Equity (a)   $ 379,019   $ 377,584   $ 390,470  
         
AVERAGE BALANCES        
Total Assets   $ 2,979,601   $ 3,006,198   $ 2,983,114  
Earning Assets   $ 2,800,498   $ 2,797,194   $ 2,766,991  
Investments   $ 876,764   $ 895,401   $ 919,599  
Loans   $ 1,908,118   $ 1,874,766   $ 1,841,392  
Total Deposits   $ 2,449,888   $ 2,473,385   $ 2,444,162  
Interest-Bearing Deposits   $ 2,028,581   $ 2,039,993   $ 1,971,848  
Interest-Bearing Liabilities   $ 54,475   $ 27,357   $ 50,164  
Total Equity   $ 414,340   $ 442,418   $ 426,673  
         
INCOME STATEMENT DATA        
Net Interest Income   $ 27,473   $ 27,682   $ 26,507  
Net Interest Income Fully Tax Equivalent (b)   $ 28,453   $ 29,316   $ 28,031  
Provision for Loan Losses   $ 1,473   $ 1,474   $ 1,596  
Non-interest Income   $ 8,103   $ 8,236   $ 11,049  
Non-interest Expense   $ 23,210   $ 21,798   $ 22,577  
Net Income   $ 8,954   $ 2,616   $ 9,369  
         
PER SHARE DATA        
Basic and Diluted Net Income Per Common Share   $ 0.73   $ 0.21   $ 0.77  
Cash Dividends Declared Per Common Share   $   $ 2.01   $  
Book Value Per Common Share   $ 33.86   $ 33.77   $ 34.92  
Tangible Book Value Per Common Share (c)   $ 30.93   $ 30.83   $ 31.94  
Basic Weighted Average Common Shares Outstanding   12,248   12,234     12,217  

(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 Ended
    March 31, December 31, March 31,  
    2018 2017 2017  
Return on average assets   1.20%   0.35%   1.26%  
Return on average common shareholder's equity   8.64%   2.37%   8.78%  
Efficiency ratio   63.49%   58.05%   57.77%  
Average equity to average assets   13.91%   14.72%   14.31%  
Net interest margin (a)   4.06%   4.20%   4.05%  
Net charge-offs to average loans and leases   0.24%   0.29%   0.21%  
Loan and lease loss reserve to loans and leases   1.06%   1.04%   1.06%  
Loan and lease loss reserve to nonperforming loans and other real estate   97.66%   84.50%   98.37%  
Nonperforming loans to loans and leases   1.09%   1.14%   1.07%  
Tier 1 leverage   13.71%   13.31%   13.63%  
Risk-based capital - Tier 1   17.57%   17.01%   17.78%  

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

     
Asset Quality   Three Months Ended
    March 31, December 31, March 31,
    2018 2017 2017
Accruing loans and leases past due 30-89 days   $ 9,758   $ 13,358   $ 7,713  
Accruing loans and leases past due 90 days or more   $ 602   $ 1,403   $ 453  
Nonaccrual loans and leases   $ 13,206   $ 13,245   $ 11,106  
Total troubled debt restructuring   $ 6,919   $ 7,034   $ 8,158  
Other real estate owned   $ 1,923   $ 1,880   $ 2,294  
Nonperforming loans and other real estate owned   $ 22,650   $ 23,562   $ 22,011  
Total nonperforming assets   $ 38,179   $ 38,167   $ 34,004  
Gross charge-offs   $ 2,074   $ 2,434   $ 2,274  
Recoveries   $ 933   $ 1,067   $ 1,300  
Net charge-offs/(recoveries)   $ 1,141   $ 1,367   $ 974  


CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
    March 31,
 2018
  December 31,
 2017
    (unaudited)
ASSETS        
Cash and due from banks   $ 41,156     $ 74,107  
Federal funds sold   1,500      
Securities available-for-sale   805,558     814,931  
Loans:        
Commercial   1,135,927     1,139,490  
Residential   436,119     436,143  
Consumer   332,115     327,976  
    1,904,161     1,903,609  
(Less) plus:        
Net deferred loan costs   3,284     3,152  
Allowance for loan losses   (20,241 )   (19,909 )
    1,887,204     1,886,852  
Restricted stock   10,390     10,379  
Accrued interest receivable   12,983     12,913  
Premises and equipment, net   47,771     48,272  
Bank-owned life insurance   85,306     85,016  
Goodwill   34,355     34,355  
Other intangible assets   1,527     1,630  
Other real estate owned   1,923     1,880  
Other assets   26,981     30,333  
TOTAL ASSETS   $ 2,956,654     $ 3,000,668  
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Deposits:        
Non-interest-bearing   $ 415,694     $ 425,001  
Interest-bearing:        
Certificates of deposit exceeding the FDIC insurance limits   42,056     43,178  
Other interest-bearing deposits   1,999,439     1,990,474  
    2,457,189     2,458,653  
Short-term borrowings   29,078     57,686  
FHLB advances        
Other liabilities   55,486     70,760  
TOTAL LIABILITIES   2,541,753     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   75,810     75,624  
Retained earnings   431,595     420,275  
Accumulated other comprehensive loss   (24,488 )   (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   414,901     413,569  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,956,654     $ 3,000,668  


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
  Three Months Ended March 31,
  2018   2017
  (unaudited)
INTEREST INCOME:      
Loans, including related fees $ 23,623     $ 21,941  
Securities:      
Taxable 3,593     3,757  
Tax-exempt 1,840     1,827  
Other 321     321  
TOTAL INTEREST INCOME 29,377     27,846  
INTEREST EXPENSE:      
Deposits 1,764     1,275  
Short-term borrowings 99     44  
Other borrowings 41     20  
TOTAL INTEREST EXPENSE 1,904     1,339  
NET INTEREST INCOME 27,473     26,507  
Provision for loan losses 1,473     1,596  
NET INTEREST INCOME AFTER PROVISION      
FOR LOAN LOSSES 26,000     24,911  
NON-INTEREST INCOME:      
Trust and financial services 1,415     1,317  
Service charges and fees on deposit accounts 2,885     2,777  
Other service charges and fees 3,144     3,185  
Securities gains/(losses), net     2  
Insurance commissions 32     22  
Gain on sales of mortgage loans 340     327  
Other 287     3,419  
TOTAL NON-INTEREST INCOME 8,103     11,049  
NON-INTEREST EXPENSE:      
Salaries and employee benefits 12,965     13,376  
Occupancy expense 1,781     1,768  
Equipment expense 1,693     1,797  
FDIC Expense 227     233  
Other 6,544     5,403  
TOTAL NON-INTEREST EXPENSE 23,210     22,577  
INCOME BEFORE INCOME TAXES 10,893     13,383  
Provision for income taxes 1,939     4,014  
NET INCOME 8,954     9,369  
OTHER COMPREHENSIVE INCOME      
           
Change in unrealized gains/losses on securities, net of reclassifications and taxes (7,201 )   3,188  
Change in funded status of post retirement benefits, net of taxes (2,583 )   183  
COMPREHENSIVE INCOME (LOSS) $ (830 )   $ 12,740  
PER SHARE DATA      
Basic and Diluted Earnings per Share $ 0.73     $ 0.77  
Weighted average number of shares outstanding (in thousands) 12,248     12,217  
           

For more information contact:
Rodger A. McHargue at (812) 238-6334

Primary Logo

View Comments and Join the Discussion!