First Financial Corporation reports 2nd Quarter results

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News Desk 2018

Jul 25, 2017 at 6:00 PM 54

TERRE HAUTE, IN--(Marketwired - July 25, 2017) - First Financial Corporation (NASDAQ: THFF) today announced results for the second quarter of 2017. Net income increased 1.46% to $8.4 million compared to $8.2 million for the same period of 2016. Diluted net income per common share was unchanged at $0.68 compared to the same period in 2016.

The Corporation further reported net income of $17.7 million for the six months ended June 30, 2017 versus $21.9 million for the comparable 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 $1.45 for the six months ended June 30, 2017 versus $1.76 for the comparable period of 2016. Return on assets for the six months ended June 30, 2017 was 1.19% compared to 1.48% for the six months ended June 30, 2016.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our second quarter 2017 results. We have experienced continued loan growth, which is driving increases in our interest income."

Book value per share was $35.54 at June 30, 2017, a 4.9% increase from the $33.89 at June 30, 2016. Shareholders' equity increased 5.1% to $434.5 million from $413.2 million on June 30, 2016.

Average total loans for the second quarter of 2017 were $1.85 billion, an increase of $66.3 million or 3.72%, versus the $1.78 billion for the comparable period in 2016. Total loans outstanding increased $54.2 million, or 3.01% to $1.86 billion as of June 30, 2017 from $1.80 billion as of June 30, 2016.

Average total deposits for the quarter ended June 30, 2017 were $2.44 billion versus $2.42 billion as of June 30, 2016.

The company's tangible common equity to tangible asset ratio was 13.55% at June 30, 2017, compared to 12.89% at June 30, 2016.

Net interest income for the second quarter of 2017 was $26.6 million compared to the $26.1 million reported for the same period of 2016. The net interest margin for the six months ended June 30, 2017 was unchanged at 4.05% compared to the same period at June 30, 2016.

The provision for loan losses for the three months ended June 30, 2017 was $1.0 million compared to $435 thousand for the second quarter of 2016. Net charge-offs were $755 thousand for the second quarter of 2017 compared to $856 thousand in the same period of 2016. The Corporation's allowance for loan losses as of June 30, 2017 was $19.7 million compared to $19.5 million as of June 30, 2016. The allowance for loan losses as a percent of total loans was 1.06% as of June 30, 2017 compared to 1.08% as of June 30, 2016.

Nonperforming loans decreased 17.5% to $22.7 million as of June 30, 2017 versus $27.6 million as of June 30, 2016. The ratio of nonperforming loans to total loans and leases was 1.22% as of June 30, 2017 versus 1.53% as of June 30, 2016.

Non-interest income for the three months ended June 30, 2017 was $8.1 million compared to $8.2 million as of June 30, 2016. On a year-over-year basis, service charges and fees on deposit accounts increased $403 thousand to $3.0 million.

Non-interest expense for the three months ended June 30, 2017 decreased $672 thousand to $22.1 million compared to $22.8 million in 2016. On a year-over-year basis, salaries and employee benefits decreased $623 thousand driven by lower pension expense. The Corporation's efficiency ratio was 60.93% for the quarter ending June 30, 2017 versus 63.55% for the same period in 2016.

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,
			2017		2017		2016		2017		2016
END OF PERIOD BALANCES
	Assets	$	2,974,688	$	2,957,285	$	2,958,016	$	2,974,688	$	2,958,016
	Deposits	$	2,427,723	$	2,438,012	$	2,394,334	$	2,427,723	$	2,394,334
	Loans, including net deferred loan costs	$	1,857,030	$	1,834,893	$	1,802,810	$	1,857,030	$	1,802,810
	Allowance for Loan Losses	$	19,680	$	19,395	$	19,504	$	19,680	$	19,504
	Total Equity	$	434,454	$	426,808	$	413,224	$	434,454	$	413,224
	Tangible Common Equity	$	398,242	$	390,470	$	376,472	$	398,242	$	376,472

AVERAGE BALANCES
	Total Assets	$	2,974,260	$	2,983,114	$	2,947,153	$	2,978,687	$	2,953,080
	Earning Assets	$	2,779,361	$	2,766,991	$	2,747,214	$	2,773,176	$	2,736,070
	Investments	$	920,453	$	919,599	$	945,948	$	920,026	$	950,972
	Loans	$	1,847,484	$	1,841,392	$	1,781,201	$	1,844,438	$	1,769,506
	Total Deposits	$	2,436,440	$	2,444,162	$	2,422,302	$	2,440,301	$	2,420,485
	Interest-Bearing Deposits	$	2,009,932	$	1,971,848	$	1,877,092	$	1,990,890	$	1,875,081
	Interest-Bearing Liabilities	$	51,752	$	50,164	$	44,852	$	50,958	$	45,439
	Total Equity	$	430,975	$	426,673	$	406,382	$	428,824	$	410,678

INCOME STATEMENT DATA
	Net Interest Income	$	26,560	$	26,507	$	26,059	$	53,067	$	52,216
	Net Interest Income Fully Tax Equivalent	$	28,137	$	28,031	$	27,602	$	56,168	$	55,293
	Provision for Loan Losses	$	1,040	$	1,596	$	435	$	2,636	$	1,270
	Non-interest Income	$	8,113	$	11,049	$	8,214	$	19,162	$	30,580
	Non-interest Expense	$	22,088	$	22,577	$	22,760	$	44,665	$	46,107
	Net Income	$	8,352	$	9,369	$	8,232	$	17,721	$	21,907

PER SHARE DATA
	Basic and Diluted Net Income Per Common Share	$	0.68	$	0.77	$	0.68	$	1.45	$	1.76
	Cash Dividends Declared Per Common Share	$	0.50	$	-	$	0.50	$	0.50	$	0.50
	Book Value Per Common Share	$	35.54	$	34.92	$	33.89	$	35.54	$	33.89
	Tangible Book Value Per Common Share	$	32.12	$	31.94	$	30.91	$	32.58	$	30.88
	Basic Weighted Average Common Shares Outstanding		12,224		12,217		12,236		12,221		12,441

Key Ratios	Three Months Ended						Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2017		2017		2016		2017		2016
Return on average assets	1.12	%	1.26	%	1.12	%	1.19	%	1.48	%
Return on average common shareholder's equity	7.75	%	8.78	%	8.04	%	8.26	%	10.67	%
Efficiency ratio	60.93	%	57.77	%	63.55	%	59.29	%	53.69	%
Average equity to average assets	14.49	%	14.31	%	13.89	%	14.40	%	13.91	%
Net interest margin	4.05	%	4.05	%	4.04	%	4.05	%	4.05	%
Net charge-offs to average loans and leases	0.19	%	0.21	%	0.19	%	0.19	%	0.19	%
Loan and lease loss reserve to loans and leases	1.06	%	1.06	%	1.08	%	1.06	%	1.08	%
Loan and lease loss reserve to nonperforming loans and other real estate	89.05	%	98.37	%	70.76	%	89.05	%	70.76	%
Nonperforming loans to loans and leases	1.22	%	1.20	%	1.53	%	1.22	%	1.53	%
Tier 1 leverage	13.73	%	13.63	%	13.08	%	13.73	%	13.08	%
Risk-based capital - Tier 1	17.80	%	17.78	%	17.46	%	17.80	%	17.46	%

Asset Quality		Three Months Ended						Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2017		2017		2016		2017		2016
Accruing loans and leases past due 30-89 days	$	8,846	$	7,713	$	7,435	$	8,846	$	7,435
Accruing loans and leases past due 90 days or more	$	1,117	$	453	$	1,044	$	1,117	$	1,044
Nonaccrual loans and leases	$	11,255	$	11,106	$	14,526	$	11,255	$	14,526
Nonperforming loans	$	22,740	$	22,011	$	27,562	$	22,740	$	27,562
Other real estate owned	$	2,384	$	2,294	$	2,837	$	2,384	$	2,837
Total nonperforming assets	$	35,024	$	34,004	$	38,998	$	35,024	$	38,998
Total troubled debt restructurings	$	7,984	$	8,158	$	9,155	$	7,984	$	9,155
Gross charge-offs	$	2,090	$	2,274	$	1,842	$	4,364	$	3,482
Recoveries	$	1,335	$	1,300	$	986	$	2,635	$	1,771
Net charge-offs/(recoveries)	$	755	$	974	$	856	$	1,729	$	1,711

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

		June 30, 2017			December 31, 2016
		(unaudited)
ASSETS
Cash and due from banks	$	55,379		$	75,012
Federal funds sold		-			6,952
Securities available-for-sale		851,577			853,725
Loans:
Commercial		1,107,658			1,106,182
Residential		429,827			423,911
Consumer		316,542			305,881
		1,854,027			1,835,974
(Less) plus:
Net deferred loan costs		3,003			3,206
Allowance for loan losses		(19,680	)		(18,773	)
		1,837,350			1,820,407
Restricted stock		10,369			10,359
Accrued interest receivable		11,564			12,311
Premises and equipment, net		48,296			49,240
Bank-owned life insurance		84,343			83,737
Goodwill		34,355			34,355
Other intangible assets		1,857			2,109
Other real estate owned		2,384			2,531
Other assets		37,214			37,789
TOTAL ASSETS	$	2,974,688		$	2,988,527

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing	$	415,945		$	564,092
Interest-bearing:
Certificates of deposit exceeding the FDIC insurance limits		42,820			43,759
Other interest-bearing deposits		1,968,958			1,820,675
		2,427,723			2,428,526
Short-term borrowings		51,880			80,989
FHLB advances		132			132
Other liabilities		60,499			64,485
TOTAL LIABILITIES		2,540,234			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		1,821			1,820
Additional paid-in capital		74,877			74,525
Retained earnings		433,435			421,826
Accumulated other comprehensive loss		(5,564	)		(14,164	)
Less: Treasury shares at cost-2,371,570 in 2017 and 2,362,046 in 2016		(70,115	)		(69,612	)
TOTAL SHAREHOLDERS' EQUITY		434,454			414,395
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,974,688		$	2,988,527

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,
		2017		2016		2017		2016
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
INTEREST INCOME:
Loans, including related fees	$	22,325	$	21,271	$	44,266	$	42,455
Securities:
Taxable		3,630		3,694		7,387		7,525
Tax-exempt		1,843		1,818		3,670		3,640
Other		330		367		651		731
TOTAL INTEREST INCOME		28,128		27,150		55,974		54,351
INTEREST EXPENSE:
Deposits		1,471		1,030		2,746		2,017
Short-term borrowings		73		26		117		49
Other borrowings		24		35		44		69
TOTAL INTEREST EXPENSE		1,568		1,091		2,907		2,135
NET INTEREST INCOME		26,560		26,059		53,067		52,216
Provision for loan losses		1,040		435		2,636		1,270
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		25,520		25,624		50,431		50,946
NON-INTEREST INCOME:
Trust and financial services		1,149		1,292		2,466		2,626
Service charges and fees on deposit accounts		3,004		2,601		5,781		5,105
Other service charges and fees		3,114		3,149		6,299		6,149
Securities gains/(losses), net		15		10		17		13
Insurance commissions		36		33		58		2,305
Gain on sale of certain assets and liabilities of insurance brokerage operation		-		-		-		13,021
Gain on sales of mortgage loans		393		481		720		885
Other		402		648		3,821		476
TOTAL NON-INTEREST INCOME		8,113		8,214		19,162		30,580
NON-INTEREST EXPENSE:
Salaries and employee benefits		12,519		13,142		25,895		26,737
Occupancy expense		1,761		1,722		3,529		3,453
Equipment expense		1,835		1,808		3,632		3,645
FDIC Expense		228		403		461		854
Other		5,745		5,685		11,148		11,418
TOTAL NON-INTEREST EXPENSE		22,088		22,760		44,665		46,107
INCOME BEFORE INCOME TAXES		11,545		11,078		24,928		35,419
Provision for income taxes		3,193		2,846		7,207		13,512
NET INCOME		8,352		8,232		17,721		21,907
OTHER COMPREHENSIVE INCOME
Change in unrealized gains/losses on securities, net of reclassifications and taxes		5,045		1,262		8,233		5,300
Change in funded status of post retirement benefits, net of taxes		184		304		367		608
COMPREHENSIVE INCOME	$	13,581	$	9,798	$	26,321	$	27,815
PER SHARE DATA
Basic and Diluted Earnings per Share	$	0.68	$	0.68	$	1.45	$	1.76
Weighted average number of shares outstanding (in thousands)		12,224		12,236		12,221		12,441

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

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