First Financial Corporation reports 1st Quarter results

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News Desk 2018

Apr 26, 2017 at 11:00 AM 124

TERRE HAUTE, IN--(Marketwired - April 26, 2017) - First Financial Corporation (NASDAQ: THFF) today announced results for the first quarter of 2017. Net income for the three months ending March 31, 2017 was $9.37 million compared to $13.68 million for the same period of 2016, which included an after-tax gain on the sale of the Corporation's insurance subsidiary of $5.8 million. Diluted net income per common share was $0.77 compared to $1.08 for the same period of 2016. Return on assets for the three months ended March 31, 2017 was 1.26% compared to 1.85% for the three months ended March 31, 2016.

Average total loans for the first quarter of 2017 were $1.84 billion versus $1.76 billion for the comparable period in 2016, an increase of $83.6 million or 4.75%. Total loans outstanding increased $70.9 million, or 4.03%, from $1.76 billion as of March 31, 2016 to $1.83 billion as of March 31, 2017. On a linked quarter basis, average total loans increased $10.8 million, or 0.59%, from $1.83 billion for the quarter ending December 31, 2016.

Average total deposits for the quarter ended March 31, 2017 were $2.44 billion versus $2.42 billion as of March 31, 2016, an increase of 1.05%. Total deposits increased $37.4 million or 1.56% from $2.40 billion as of March 31, 2016 to $2.44 billion as of March 31, 2017.

The company's tangible common equity to tangible asset ratio was 13.63% at March 31, 2017, compared to 13.05% at March 31, 2016.

Net interest income for the first quarter of 2017 was $26.5 million, an increase of 1.34% over the $26.2 million reported for the same period of 2016. The net interest margin for the quarter ended March 31, 2017 decreased to 4.05% from the 4.06% reported at March 31, 2016.

Asset quality remains strong with nonperforming loans decreasing 19.77% to $19.7 million as of March 31, 2017 versus $23.6 million as of March 31, 2016. The ratio of nonperforming loans to total loans also decreased to 1.20% as of March 31, 2017 versus 1.50% as of March 31, 2016.

The provision for loan losses for the three months ended March 31, 2017 was $1.60 million compared to the $835 thousand provision for the first quarter of 2016. Net charge-offs were $974 thousand for the first quarter of 2017 compared to $855 thousand in the same period of 2016. The Corporation's allowance for loan losses as of March 31, 2017 was $19.4 million compared to $19.9 million as of March 31, 2016. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2017 compared to 1.13% as of March 31, 2016.

Non-interest income for the three months ended March 31, 2017 and 2016 was $11.0 and $21.5 million, respectively. The 2016 first quarter non-interest income included a $13.0 million gain on sale of the Corporation's insurance subsidiary. A first quarter 2017 cash recovery of previous other-than-temporary impairment increased non-interest income $3.1 million. Service charges on deposits increased $273 thousand over the same period in 2016 and other service charges and fees increased $185 thousand.

Non-interest expense for the three months ended March 31, 2017 increased $112 thousand to $22.6 million compared to $22.5 million in 2016. On a linked quarter basis, non-interest expense increased $382 thousand from $22.2 million for the quarter ended December 31, 2016. On a year-over-year basis, salaries and employee benefits decreased $219 thousand. The Corporation's efficiency ratio was 57.77% for the quarter ending March 31, 2017 versus 45.68% for the same period in 2016.

Book value per share was $34.92 at March 31, 2017, a 3.99% increase from the $33.58 at March 31, 2016. Shareholders' equity increased 3.62% to $426.8 million from $411.9 million on March 31, 2016.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our first quarter 2017 results. Our average loan balances continue to increase and we continue to grow our interest income and net interest income. Asset quality also remains healthy. It was another good quarter for First Financial."

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,
		2017		2016		2016
END OF PERIOD BALANCES
	Assets	$	2,957,285	$	2,988,527	$	2,939,240
	Deposits	$	2,438,012	$	2,428,526	$	2,400,655
	Loans	$	1,834,893	$	1,839,180	$	1,763,659
	Allowance for Loan Losses	$	19,395	$	18,773	$	19,926
	Total Equity	$	426,808	$	414,395	$	411,912
	Tangible Common Equity	$	390,470	$	377,931	$	375,000

AVERAGE BALANCES
	Total Assets	$	2,983,114	$	2,970,031	$	2,959,007
	Earning Assets	$	2,766,991	$	2,778,369	$	2,724,926
	Investments	$	919,599	$	923,957	$	955,996
	Loans	$	1,841,392	$	1,830,628	$	1,757,811
	Total Deposits	$	2,444,162	$	2,464,246	$	2,418,668
	Interest-Bearing Deposits	$	1,971,848	$	1,895,665	$	1,873,070
	Interest-Bearing Borrowings	$	50,164	$	35,531	$	46,026
	Total Equity	$	426,673	$	405,261	$	414,974

INCOME STATEMENT DATA
	Net Interest Income	$	26,507	$	26,406	$	26,157
	Net Interest Income Fully Tax Equivalent	$	28,031	$	27,956	$	27,692
	Provision for Loan Losses	$	1,596	$	939	$	835
	Non-interest Income	$	11,049	$	8,428	$	21,484
	Non-interest Expense	$	22,577	$	22,195	$	22,465
	Net Income	$	9,369	$	8,344	$	13,675

PER SHARE DATA
	Basic and Diluted Net Income Per Common Share	$	0.77	$	0.68	$	1.08
	Cash Dividends Declared Per Common Share	$	-	$	0.50	$	-
	Book Value Per Common Share	$	34.92	$	33.92	$	33.58
	Tangible Book Value Per Common Share	$	31.94	$	30.94	$	30.57
	Basic Weighted Average Common Shares Outstanding		12,217		12,201		12,646


Key Ratios	Three Months Ended
	March 31,		December 31,		March 31,
	2017		2016		2016
Return on average assets	1.26	%	1.12	%	1.85	%
Return on average common shareholder's equity	8.78	%	8.24	%	13.28	%
Efficiency ratio	57.77	%	61.00	%	45.68	%
Average equity to average assets	14.31	%	13.65	%	13.92	%
Net interest margin	4.05	%	4.01	%	4.06	%
Net charge-offs to average loans and leases	0.21	%	0.27	%	0.19	%
Loan and lease loss reserve to loans and leases	1.06	%	1.02	%	1.13	%
Loan and lease loss reserve to nonperforming loans and other real estate	98.37	%	74.50	%	84.38	%
Nonperforming loans to loans	1.20	%	1.43	%	1.50	%
Tier 1 leverage	13.63	%	13.39	%	13.05	%
Risk-based capital - Tier 1	17.78	%	17.43	%	17.81	%


Asset Quality	Three Months Ended
	March 31,		December 31,		March 31,
	2017		2016		2016
Accruing loans and leases past due 30-89 days	$	7,713	$	10,757	$	7,292
Accruing loans and leases past due 90 days or more	$	453	$	610	$	858
Nonaccrual loans and leases	$	11,106	$	13,492	$	13,248
Nonperforming loans and other real estate	$	22,011	$	25,198	$	26,465
Other real estate owned	$	2,294	$	2,531	$	2,850
Total nonperforming assets	$	34,004	$	37,567	$	39,617
Total troubled debt restructurings	$	8,158	$	8,565	$	9,509
Gross charge-offs	$	2,274	$	2,743	$	1,640
Recoveries	$	1,300	$	1,500	$	785
Net charge-offs/(recoveries)	$	974	$	1,243	$	855


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

	March 31, 2017			December 31, 2016
	(unaudited)
ASSETS
Cash and due from banks	$	50,522		$	75,012
Federal funds sold		5,000			6,952
Securities available-for-sale		855,681			853,725
Loans:
Commercial		1,102,672			1,106,182
Residential		420,963			423,911
Consumer		308,196			305,881
		1,831,831			1,835,974
(Less) plus:
Net deferred loan costs		3,062			3,206
Allowance for loan losses		(19,395	)		(18,773	)
		1,815,498			1,820,407
Restricted stock		10,369			10,359
Accrued interest receivable		12,099			12,311
Premises and equipment, net		48,566			49,240
Bank-owned life insurance		84,040			83,737
Goodwill		34,355			34,355
Other intangible assets		1,983			2,109
Other real estate owned		2,294			2,531
Other assets		36,878			37,789
TOTAL ASSETS	$	2,957,285		$	2,988,527

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing	$	429,963		$	564,092
Interest-bearing:
Certificates of deposit exceeding the FDIC insurance limits		45,193			43,759
Other interest-bearing deposits		1,962,856			1,820,675
		2,438,012			2,428,526
Short-term borrowings		35,821			80,989
FHLB advances		132			132
Other liabilities		56,512			64,485
TOTAL LIABILITIES		2,530,477			2,574,132

Shareholders' equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-14,595,320 in 2017 and 14,578,758 in 2016
Outstanding shares-12,223,750 in 2017 and 12,216,712 in 2016		1,820			1,820
Additional paid-in capital		74,701			74,525
Retained earnings		431,195			421,826
Accumulated other comprehensive loss		(10,793	)		(14,164	)
Less: Treasury shares at cost-2,371,570 in 2017 and 2,362,026 in 2016		(70,115	)		(69,612	)
TOTAL SHAREHOLDERS' EQUITY		426,808			414,395
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,957,285		$	2,988,527


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

	Three Months Ended March 31,
	2017		2016
	(unaudited)
INTEREST INCOME:
Loans, including related fees	$	21,941	$	21,184
Securities:
Taxable		3,757		3,831
Tax-exempt		1,827		1,822
Other		321		364
TOTAL INTEREST INCOME		27,846		27,201
INTEREST EXPENSE:
Deposits		1,275		987
Short-term borrowings		44		23
Other borrowings		20		34
TOTAL INTEREST EXPENSE		1,339		1,044
NET INTEREST INCOME		26,507		26,157
Provision for loan losses		1,596		835
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		24,911		25,322
NON-INTEREST INCOME:
Trust and financial services		1,317		1,334
Service charges and fees on deposit accounts		2,777		2,504
Other service charges and fees		3,185		3,000
Securities gains/(losses), net		2		3
Gain on sale of certain assets and liabilities of insurance brokerage		-		13,021
Insurance commissions		22		2,272
Gain on sales of mortgage loans		327		404
Other		3,419		(172	)
TOTAL NON-INTEREST INCOME		11,049		22,366
NON-INTEREST EXPENSE:
Salaries and employee benefits		13,376		13,595
Occupancy expense		1,768		1,731
Equipment expense		1,797		1,837
FDIC Expense		233		451
Other		5,403		5,733
TOTAL NON-INTEREST EXPENSE		22,577		23,347
INCOME BEFORE INCOME TAXES		13,383		24,341
Provision for income taxes		4,014		10,666
NET INCOME		9,369		13,675
OTHER COMPREHENSIVE INCOME
Change in unrealized gains/losses on securities, net of reclassifications and taxes		3,188		4,039
Change in funded status of post retirement benefits, net of taxes		183		304
COMPREHENSIVE INCOME	$	12,740	$	18,018
PER SHARE DATA
Basic and Diluted Earnings per Share	$	0.77	$	1.08
Weighted average number of shares outstanding (in thousands)		12,217		12,646

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

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