Market Overview

First Financial Corporation reports 2nd Quarter results

Share:

TERRE HAUTE, Ind., July 24, 2018 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ: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 Ended Six Months Ended
    June 30, March 31, June 30, June 30, June 30,
    2018 2018 2017 2018 2017
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 Ended Six Months Ended
    June 30, March 31, June 30, June 30, June 30,
    2018 2018 2017 2018 2017
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 Ended Six Months Ended
    June 30, March 31, June 30, June 30, June 30,
    2018 2018 2017 2018 2017
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:              
Taxable 5,947     3,630     9,540     7,387  
Tax-exempt 1,860     1,843     3,700     3,670  
Other 318     330     639     651  
TOTAL INTEREST INCOME 32,903     28,128     62,280     55,974  
INTEREST EXPENSE:              
Deposits 2,125     1,471     3,889     2,746  
Short-term borrowings 88     73     187     117  
Other borrowings 6     24     47     44  
TOTAL INTEREST EXPENSE 2,219     1,568     4,123     2,907  
NET INTEREST INCOME 30,684     26,560     58,157     53,067  
Provision for loan losses 1,355     1,040     2,828     2,636  
NET INTEREST INCOME AFTER PROVISION              
FOR LOAN LOSSES 29,329     25,520     55,329     50,431  
NON-INTEREST INCOME:              
Trust and financial services 1,340     1,149     2,755     2,466  
Service charges and fees on deposit accounts 2,846     3,004     5,731     5,781  
Other service charges and fees 3,347     3,114     6,491     6,299  
Securities gains/(losses), net 2     15     2     17  
Gain on sales of mortgage loans 500     393     840     720  
Other 4,926     438     5,245     3,879  
TOTAL NON-INTEREST INCOME 12,961     8,113     21,064     19,162  
NON-INTEREST EXPENSE:              
Salaries and employee benefits 12,578     12,218     25,543     25,293  
Occupancy expense 1,633     1,761     3,414     3,529  
Equipment expense 1,650     1,835     3,343     3,632  
FDIC Expense 223     228     450     461  
Other 6,599     6,046     13,144     11,750  
TOTAL NON-INTEREST EXPENSE 22,683     22,088     45,894     44,665  
INCOME BEFORE INCOME TAXES 19,607     11,545     30,499     24,928  
Provision for income taxes 4,346     3,193     6,285     7,207  
NET INCOME 15,261     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 taxes 281     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

Primary Logo

View Comments and Join the Discussion!