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First Financial Corporation reports 3rd Quarter results

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TERRE HAUTE, Ind., Oct. 23, 2018 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2018. Net income increased 28.64% to $11.3 million compared to $8.8 million for the same period of 2017. Diluted net income per common share increased 27.78% to $0.92 from $0.72 for the comparable period of 2017.

The Corporation also reported net income of $35.5 million for the nine months ended September 30, 2018 versus $26.5 million for the comparable period of 2017. Diluted net income per common share for the nine months ended September 30, 2018 was $2.90 versus $2.17 for the comparable 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. The first quarter of 2017 included a similar pre-tax recovery of $3.1 million. Return on assets for the nine months ended September 30, 2018 was 1.59% compared to 1.18% for the nine months ended September 30, 2017.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our third quarter 2018 results. This makes our sixth consecutive quarter of reported loan growth, which contributed to the increase in our third quarter net interest income compared to the same period last year."

Book value per share was $34.91 at September 30, 2018 compared to $36.29 at September 30, 2017. Shareholders' equity was $427.8 million compared to $443.6 million on September 30, 2017.

Average total loans for the third quarter of 2018 were $1.93 billion versus $1.86 billion for the comparable period in 2017, an increase of $69.3 million or 3.73%. Total loans outstanding were $1.94 billion as of September 30, 2018 compared to $1.87 billion as of September 30, 2017, a $75.2 million or 4.03% increase.

Average total deposits for the quarter ended September 30, 2018 were $2.44 billion versus $2.41 billion as of September 30, 2017. Total deposits were $2.41 billion as of September 30, 2018 compared to $2.45 billion as of September 30, 2017.

The company's tangible common equity to tangible asset ratio was 13.31% at September 30, 2018, compared to 13.83% at September 30, 2017.

Net interest income for the third quarter of 2018 was $28.8 million compared to the $27.1 million reported for the same period of 2017. The net interest margin for the nine months ended September 30, 2018 increased to 4.31% compared to 4.08% for the same period ending September 30, 2017.

The provision for loan losses for the three months ended September 30, 2018 was $1.5 million compared to $1.2 million for the third quarter of 2017. Net charge-offs were $1.2 million for the third quarter of 2018 compared to $1.1 million in the same period of 2017. The Corporation's allowance for loan losses as of September 30, 2018 was $20.3 million compared to $19.8 million as of September 30, 2017. The allowance for loan losses as a percent of total loans was 1.05% as of September 30, 2018 compared to 1.06% as of September 30, 2017.

Nonperforming loans decreased 29.0% to $16.2 million as of September 30, 2018 versus $22.8 million as of September 30, 2017. The ratio of nonperforming loans to total loans and leases was .83% as of September 30, 2018 versus 1.22% as of September 30, 2017.

Non-interest income for the three months ended September 30, 2018 was $8.9 million compared to $8.5 million as of September 30, 2017.

Non-interest expense for the three months ended September 30, 2018 was $22.3 million compared to $22.3 million in 2017. The Corporation's efficiency ratio was 57.54% for the quarter ending September 30, 2018 versus 59.85% 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 Nine Months Ended
    September 30, June 30, September 30, September 30, September 30,
    2018 2018 2017 2018 2017
END OF PERIOD BALANCES            
  Assets   $ 2,980,935   $ 2,968,048   $ 2,982,342   $ 2,980,935   $ 2,982,342  
  Deposits   $ 2,407,061   $ 2,454,335   $ 2,453,411   $ 2,407,061   $ 2,453,411  
  Loans, including net deferred loan costs   $ 1,941,780   $ 1,928,572   $ 1,866,564   $ 1,941,780   $ 1,866,564  
  Allowance for Loan Losses   $ 20,301   $ 20,071   $ 19,802   $ 20,301   $ 19,802  
  Total Equity   $ 427,774   $ 419,695   $ 443,558   $ 427,774   $ 443,558  
  Tangible Common Equity (a)   $ 392,109   $ 383,916   $ 407,459   $ 392,109   $ 407,459  
             
AVERAGE BALANCES            
  Total Assets   $ 2,965,825   $ 2,973,295   $ 2,974,616   $ 2,972,907   $ 2,977,330  
  Earning Assets   $ 2,785,582   $ 2,784,128   $ 2,775,366   $ 2,786,588   $ 2,773,906  
  Investments   $ 857,624   $ 865,694   $ 912,439   $ 866,694   $ 917,497  
  Loans   $ 1,926,051   $ 1,915,532   $ 1,856,726   $ 1,916,567   $ 1,848,534  
  Total Deposits   $ 2,435,281   $ 2,467,426   $ 2,414,561   $ 2,450,865   $ 2,431,721  
  Interest-Bearing Deposits   $ 2,010,467   $ 2,041,391   $ 1,993,839   $ 2,026,813   $ 1,991,873  
  Interest-Bearing Liabilities   $ 49,808   $ 34,539   $ 58,755   $ 46,274   $ 53,557  
  Total Equity   $ 427,530   $ 420,092   $ 440,998   $ 420,654   $ 432,882  
             
INCOME STATEMENT DATA            
  Net Interest Income   $ 28,827   $ 30,684   $ 27,108   $ 86,984   $ 80,175  
  Net Interest Income Fully Tax Equivalent (b)   $ 29,841   $ 31,694   $ 28,691   $ 89,988   $ 84,859  
  Provision for Loan Losses   $ 1,470   $ 1,355   $ 1,185   $ 4,298   $ 3,821  
  Non-interest Income   $ 8,909   $ 12,961   $ 8,540   $ 29,973   $ 27,702  
  Non-interest Expense   $ 22,297   $ 22,683   $ 22,284   $ 68,191   $ 66,949  
  Net Income   $ 11,313   $ 15,261   $ 8,794   $ 35,527   $ 26,515  
             
PER SHARE DATA            
  Basic and Diluted Net Income Per Common Share   $ 0.92   $ 1.25   $ 0.72   $ 2.90   $ 2.17  
  Cash Dividends Declared Per Common Share   $   $ 0.51   $   $ 0.51   $ 0.50  
  Book Value Per Common Share   $ 34.91   $ 34.25   $ 36.29   $ 34.91   $ 36.29  
  Tangible Book Value Per Common Share (c)   $ 31.98   $ 31.12   $ 33.12   $ 32.00   $ 33.33  
  Basic Weighted Average Common Shares Outstanding   12,255   12,255   12,224   12,253   12,222  

(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 Nine Months Ended
    September 30, June 30, September 30, September 30, September 30,
    2018 2018 2017 2018 2017
Return on average assets   1.53 % 2.05 % 1.18 % 1.59 % 1.18 %
Return on average common shareholder's equity   10.58 % 14.53 % 7.98 % 11.23 % 8.15 %
Efficiency ratio   57.54 % 50.80 % 59.85 % 56.84 % 59.48 %
Average equity to average assets   14.42 % 14.13 % 14.83 % 14.15 % 14.54 %
Net interest margin (a)   4.29 % 4.58 % 4.14 % 4.31 % 4.08 %
Net charge-offs to average loans and leases   0.26 % 0.32 % 0.23 % 0.27 % 0.20 %
Loan and lease loss reserve to loans and leases   1.05 % 1.04 % 1.06 % 1.05 % 1.06 %
Loan and lease loss reserve to nonperforming loans   125.35 % 106.39 % 86.93 % 125.35 % 86.93 %
Nonperforming loans to loans and leases   0.83 % 0.98 % 1.22 % 0.83 % 1.22 %
Tier 1 leverage   14.45 % 14.05 % 14.05 % 14.45 % 14.05 %
Risk-based capital - Tier 1   18.36 % 18.09 % 18.04 % 18.36 % 18.04 %

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

       
Asset Quality   Three Months Ended Nine Months Ended
    September 30, June 30, September 30, September 30, September 30,
    2018 2018 2017 2018 2017
Accruing loans and leases past due 30-89 days   $ 8,413   $ 7,741   $ 6,864   $ 8,413   $ 6,864  
Accruing loans and leases past due 90 days or more   $ 1,314   $ 1,273   $ 1,389   $ 1,314   $ 1,389  
Nonaccrual loans and leases   $ 10,035   $ 10,773   $ 13,965   $ 10,035   $ 13,965  
Total troubled debt restructuring   $ 4,847   $ 6,819   $ 7,424   $ 4,847   $ 7,424  
Other real estate owned   $ 520   $ 497   $ 1,866   $ 520   $ 1,866  
Nonperforming loans and other real estate owned   $ 16,716   $ 19,362   $ 24,644   $ 16,716   $ 24,644  
Total nonperforming assets   $ 20,139   $ 22,812   $ 38,336   $ 20,139   $ 38,336  
Gross charge-offs   $ 2,348   $ 2,270   $ 1,964   $ 6,692   $ 6,328  
Recoveries   $ 1,108   $ 745   $ 901   $ 2,786   $ 3,536  
Net charge-offs/(recoveries)   $ 1,240   $ 1,525   $ 1,063   $ 3,906   $ 2,792  


 
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data) 
 
  September 30,
 2018
  December 31,
 2017
       
    (unaudited)
       
ASSETS      
Cash and due from banks $ 50,018     $ 74,107  
Federal funds sold 7,600      
Securities available-for-sale 785,693     814,931  
Loans:      
Commercial 1,150,536     1,139,490  
Residential 443,264     436,143  
Consumer 345,132     327,976  
  1,938,932     1,903,609  
(Less) plus:      
Net deferred loan costs 2,848     3,152  
Allowance for loan losses (20,301 )   (19,909 )
  1,921,479     1,886,852  
Restricted stock 10,390     10,379  
Accrued interest receivable 14,630     12,913  
Premises and equipment, net 46,985     48,272  
Bank-owned life insurance 85,901     85,016  
Goodwill 34,355     34,355  
Other intangible assets 1,310     1,630  
Other real estate owned 520     1,880  
Other assets 22,054     30,333  
TOTAL ASSETS $ 2,980,935     $ 3,000,668  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Deposits:      
Non-interest-bearing $ 420,337     $ 425,001  
Interest-bearing:      
Certificates of deposit exceeding the FDIC insurance limits 40,904     43,178  
Other interest-bearing deposits 1,945,820     1,990,474  
  2,407,061     2,458,653  
Short-term borrowings 58,680     57,686  
FHLB advances 35,000      
Other liabilities 52,420     70,760  
TOTAL LIABILITIES 2,553,161     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 1,824     1,822  
Additional paid-in capital 76,181     75,624  
Retained earnings 451,918     420,275  
Accumulated other comprehensive loss (32,310 )   (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 427,774     413,569  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,980,935     $ 3,000,668  


 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
  Three Months Ended 
September 30,
  Nine Months Ended 
September 30,
  2018   2017   2018   2017
               
               
  (unaudited)   (unaudited)
INTEREST INCOME:              
Loans, including related fees $ 25,581     $ 23,119     $ 73,982     $ 67,385  
Securities:              
Taxable 3,601     3,500     13,141     10,887  
Tax-exempt 1,873     1,859     5,573     5,529  
Other 320     327     959     978  
TOTAL INTEREST INCOME 31,375     28,805     93,655     84,779  
INTEREST EXPENSE:              
Deposits 2,365     1,561     6,254     4,307  
Short-term borrowings 167     98     354     215  
Other borrowings 16     38     63     82  
TOTAL INTEREST EXPENSE 2,548     1,697     6,671     4,604  
NET INTEREST INCOME 28,827     27,108     86,984     80,175  
Provision for loan losses 1,470     1,185     4,298     3,821  
NET INTEREST INCOME AFTER PROVISION              
FOR LOAN LOSSES 27,357     25,923     82,686     76,354  
NON-INTEREST INCOME:              
Trust and financial services 1,133     1,194     3,888     3,660  
Service charges and fees on deposit accounts 3,002     3,048     8,733     8,829  
Other service charges and fees 3,256     3,070     9,747     9,369  
Securities gains/(losses), net 3     27     5     44  
Gain on sales of mortgage loans 618     535     1,458     1,255  
Other 897     666     6,142     4,545  
TOTAL NON-INTEREST INCOME 8,909     8,540     29,973     27,702  
NON-INTEREST EXPENSE:              
Salaries and employee benefits 12,485     12,489     38,028     37,780  
Occupancy expense 1,894     1,769     5,308     5,298  
Equipment expense 1,673     1,792     5,016     5,424  
FDIC Expense 223     228     673     689  
Other 6,022     6,006     19,166     17,758  
TOTAL NON-INTEREST EXPENSE 22,297     22,284     68,191     66,949  
INCOME BEFORE INCOME TAXES 13,969     12,179     44,468     37,107  
Provision for income taxes 2,656     3,385     8,941     10,592  
NET INCOME 11,313     8,794     35,527     26,515  
OTHER COMPREHENSIVE INCOME              
Change in unrealized gains/losses on securities, net of reclassifications and taxes (3,702 )   (51 )   (15,585 )   8,182  
Change in funded status of post retirement benefits, net of taxes 281     184     (2,021 )   551  
COMPREHENSIVE INCOME $ 7,892     $ 8,927     $ 17,921     $ 35,248  
PER SHARE DATA              
Basic and Diluted Earnings per Share $ 0.92     $ 0.72     $ 2.90     $ 2.17  
Weighted average number of shares outstanding (in thousands) 12,255     12,224     12,253     12,222  
                       

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

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