First Financial Corporation reports 2nd Quarter results

7/23, 4:30 PM (Source: GlobeNewswire)

TERRE HAUTE, Ind., July 23, 2019 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2019. Net income for the three months ending June 30, 2019 was $12.6 million compared to $15.3 million for the same period of 2018. Diluted net income per common share of $1.02 compared to $1.25 for the same period of 2018. The Corporation's 2018 results included a recovery of a security previously written down for other than temporary impairment which contributed $6.9 million to pre-tax income. Return on assets for the three months ended June 30, 2019 was 1.66% compared to 2.05% for the three months ended June 30, 2018.

The Corporation further reported net income of $22.3 million for the six months ended June 30, 2019 versus $24.2 million for the comparable period of 2018. Diluted net income per common share for the six months ended June 30, 2019 was $1.81 versus $1.98 for the comparable period of 2018. Return on assets for the six months ended June 30, 2019 was 1.47% compared to 1.63% for the six months ended June 30, 2018.

Average total loans for the second quarter of 2019 were $1.98 billion versus $1.92 billion for the comparable period in 2018, an increase of $63.5 million or 3.31%. Total loans outstanding increased $81.6 million, or 4.23%, from $1.93 billion as of June 30, 2018 to $2.01 billion as of June 30, 2019. On a linked quarter basis, average total loans increased $6.7 million from $1.97 billion for the quarter ending March 31, 2019.

Average total deposits for the quarter ended June 30, 2019 were $2.46 billion versus $2.47 billion as of June 30, 2018. Total deposits were $2.46 billion as of June 30, 2019 compared to $2.45 billion as of June 30, 2018.

Book Value per share was $38.88 at June 30, 2019 compared to $34.25 at June 30, 2018. Shareholders equity at June 30, 2019 was $477.8 million compared to $419.7 million on June 30, 2018. The company’s tangible common equity to tangible asset ratio was 14.97% at June 30, 2019, compared to 14.05% at June 30, 2018.

Net interest income for the second quarter of 2019 was $29.8 million compared to $30.7 million reported for the same period of 2018, which included $2.4 million of pre-tax interest income from the previously mentioned recovery. The net interest margin for the quarter ended June 30, 2019 was 4.33% compared to 4.58% reported at June 30, 2018.

Nonperforming loans as of June 30, 2019 were $15.2 million versus $18.9 million as of June 30, 2018. The ratio of nonperforming loans to total loans and leases was 0.76% as of June 30, 2019 versus 0.98% as of June 30, 2018.

Net charge-offs were $940 thousand for the second quarter of 2019 compared to $1.5 million in the same period of 2018. The Corporation’s allowance for loan losses as of June 30, 2019 was $20.3 million compared to $20.1 million as of June 30, 2018. The allowance for loan losses as a percent of total loans was 1.01% as of June 30, 2019 compared to 1.04% at June 30, 2018.

Non-interest income for the three months ended June 30, 2019 and 2018 was $9.7 million and $13.0 million, respectively. Non-interest income included $4.5 million from the previously mentioned recovery.

Non-interest expense for the three months ended June 30, 2019 was $23.5 million compared to $22.7 million in 2018, which includes $276 thousand of expenses related to the acquisition of HopFed Bancorp. The Corporation’s efficiency ratio was 58.06% for the quarter ending June 30, 2019 versus 50.80% for the same period in 2018.

Income tax expense for the three months ended June 30, 2019 was $3.20 million versus $4.35 million for the same period in 2018. The effective tax rate for 2019 was 19.59% compared to 20.61% for 2018.
               
Norman L. Lowery, President and Chief Executive Officer, commented, “We experienced a solid second quarter, which provided continued loan growth, an increase in net interest income, and improvement in asset quality.”

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 EndedSix Months Ended
 June 30,March 31,June 30,June 30,June 30,
 20192019201820192018
END OF PERIOD BALANCES     
  Assets $3,064,212 $3,025,565 $2,968,048 $3,064,212 $2,968,048 
  Deposits $2,463,018 $2,419,556 $2,454,335 $2,463,018 $2,454,335 
  Loans, including net deferred loan costs $2,010,198 $1,984,053 $1,928,572 $2,010,198 $1,928,572 
  Allowance for Loan Losses $20,250 $20,960 $20,071 $20,250 $20,071 
  Total Equity $477,820 $462,796 $419,695 $477,820 $419,695 
  Tangible Common Equity (a) $442,496 $427,358 $383,916 $442,496 $383,916 
       
AVERAGE BALANCES      
  Total Assets $3,033,788 $3,004,056 $2,973,295 $3,018,922 $2,976,448 
  Earning Assets $2,836,110 $2,824,524 $2,784,128 $2,830,317 $2,787,091 
  Investments $851,723 $850,749 $865,694 $851,236 $871,229 
  Loans $1,978,991 $1,972,333 $1,915,532 $1,975,662 $1,911,825 
  Total Deposits $2,464,212 $2,428,164 $2,467,426 $2,446,188 $2,458,657 
  Interest-Bearing Deposits $2,032,886 $1,999,272 $2,041,391 $2,016,079 $2,034,986 
  Interest-Bearing Liabilities $39,269 $71,923 $34,539 $55,596 $44,507 
  Total Equity $471,156 $450,666 $420,092 $460,911 $417,216 
       
INCOME STATEMENT DATA      
  Net Interest Income $29,752 $29,426 $30,684 $59,178 $58,157 
  Net Interest Income Fully Tax Equivalent (b) $30,721 $30,401 $31,694 $61,122 $60,147 
  Provision for Loan Losses $230 $1,470 $1,355 $1,700 $2,828 
  Non-interest Income $9,743 $7,636 $12,961 $17,379 $21,064 
  Non-interest Expense $23,492 $23,693 $22,683 $47,185 $45,894 
  Net Income $12,569 $9,682 $15,261 $22,251 $24,214 
       
PER SHARE DATA      
  Basic and Diluted Net Income Per Common Share $1.02 $0.79 $1.25 $1.81 $1.98 
  Cash Dividends Declared Per Common Share $0.52 $ $0.51 $0.52 $0.51 
  Book Value Per Common Share $38.88 $37.66 $34.25 $38.88 $34.25 
  Tangible Book Value Per Common Share (c) $35.46 $34.77 $31.12 $36.00 $31.33 
  Basic Weighted Average Common Shares Outstanding 12,290 12,282 12,255 12,286 12,252 

(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%.
(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 EndedSix Months Ended
  June 30,March 31,June 30,June 30,June 30,
  20192019201820192018
Return on average assets 1.66%1.29%2.05%1.47%1.63%
Return on average common shareholder's equity 10.67%8.59%14.53%9.66%11.61%
Efficiency ratio 58.06%62.29%50.80%60.11%56.51%
Average equity to average assets 15.53%15.00%14.13%15.27%14.02%
Net interest margin (a) 4.33%4.31%4.58%4.32%4.32%
Net charge-offs to average loans and leases 0.49%0.19%0.32%0.19%0.28%
Loan and lease loss reserve to loans and leases 1.01%1.06%1.04%1.01%1.04%
Loan and lease loss reserve to nonperforming loans 133.14%130.28%106.39%133.14%106.39%
Nonperforming loans to loans and leases 0.76%0.81%0.98%0.76%0.98%
Tier 1 leverage 14.83%14.83%14.05%14.83%14.05%
Risk-based capital - Tier 1 18.65%18.65%18.09%18.65%18.09%

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

   
Asset QualityThree Months EndedSix Months Ended
 June 30,March 31,June 30,June 30,June 30,
 20192019201820192018
Accruing loans and leases past due 30-89 days $ 8,296 $
 11,402 $ 7,741 $ 8,296 $ 7,741
Accruing loans and leases past due 90 days or more $683 $507 $1,273 $683 $1,273 
Nonaccrual loans and leases $9,985 $10,808 $10,773 $9,985 $10,773 
Total troubled debt restructuring $4,541 $4,774 $6,819 $4,541 $6,819 
Other real estate owned $498 $857 $497 $498 $497 
Nonperforming loans and other real estate owned $15,707 $16,946 $19,362 $15,707 $19,362 
Total nonperforming assets $19,040 $20,240 $22,812 $19,040 $22,812 
Gross charge-offs $1,906 $2,109 $2,270 $4,015 $4,344 
Recoveries $966 $1,163 $745 $2,129 $1,678 
Net charge-offs/(recoveries) $940 $946 $1,525 $1,886 $2,666 


           
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data) 
 
 June 30,
 2019
 December 31,
 2018
  
 (unaudited)
  
 ASSETS    
Cash and due from banks$60,884  $74,388 
Federal funds sold2,200   
Securities available-for-sale791,537  784,916 
Loans:   
Commercial1,188,283  1,166,352 
Residential461,616  443,670 
Consumer357,012  341,041 
 2,006,911  1,951,063 
(Less) plus:   
Net deferred loan costs3,287  2,925 
Allowance for loan losses(20,250) (20,436)
 1,989,948  1,933,552 
Restricted stock10,412  10,390 
Accrued interest receivable13,877  13,970 
Premises and equipment, net45,662  46,554 
Bank-owned life insurance86,757  86,186 
Goodwill34,355  34,355 
Other intangible assets969  1,197 
Other real estate owned498  603 
Other assets27,113  22,607 
TOTAL ASSETS$3,064,212  $3,008,718 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Deposits:   
Non-interest-bearing$436,472  $431,923 
Interest-bearing:   
Certificates of deposit exceeding the FDIC insurance limits57,470  42,284 
Other interest-bearing deposits1,969,076  1,962,520 
 2,463,018  2,436,727 
Short-term borrowings60,492  69,656 
Other liabilities62,882  59,634 
TOTAL LIABILITIES2,586,392  2,566,017 
    
Shareholders’ equity   
Common stock, $.125 stated value per share;   
Authorized shares-40,000,000   
Issued shares-14,632,323 in 2019 and 14,612,540 in 2018   
Outstanding shares-12,290,212 in 2019 and 12,278,295 in 20181,826  1,824 
Additional paid-in capital77,173  76,774 
Retained earnings472,577  456,716 
Accumulated other comprehensive loss(4,282) (23,454)
Less: Treasury shares at cost-2,342,111 in 2019 and 2,334,245 in 2018(69,474) (69,159)
TOTAL SHAREHOLDERS’ EQUITY477,820  442,701 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$3,064,212  $3,008,718 


    
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,
 2019 2018 2019 2018
        
 (unaudited)
  
INTEREST INCOME:   
Loans, including related fees$27,533  $24,778  $54,287  $48,401 
Securities:       
Taxable3,516  5,947  7,197  9,540 
Tax-exempt1,873  1,860  3,740  3,700 
Other337  318  651  639 
TOTAL INTEREST INCOME33,259  32,903  65,875  62,280 
INTEREST EXPENSE:       
Deposits3,316  2,125  6,133  3,889 
Short-term borrowings158  88  481  187 
Other borrowings33  6  83  47 
TOTAL INTEREST EXPENSE3,507  2,219  6,697  4,123 
NET INTEREST INCOME29,752  30,684  59,178  58,157 
Provision for loan losses230  1,355  1,700  2,828 
NET INTEREST INCOME AFTER PROVISION       
FOR LOAN LOSSES29,522  29,329  57,478  55,329 
NON-INTEREST INCOME:       
Trust and financial services1,124  1,340  2,328  2,755 
Service charges and fees on deposit accounts2,735  2,846  5,359  5,731 
Other service charges and fees3,408  3,347  6,522  6,491 
Securities gains, net16  2  12  2 
Gain on sales of mortgage loans496  500  916  840 
Other1,964  4,926  2,242  5,245 
TOTAL NON-INTEREST INCOME9,743  12,961  17,379  21,064 
NON-INTEREST EXPENSE:       
Salaries and employee benefits12,546  12,578  25,301  25,543 
Occupancy expense1,813  1,633  3,628  3,414 
Equipment expense1,751  1,650  3,568  3,343 
FDIC Expense199  223  339  450 
Other7,183  6,599  14,349  13,144 
TOTAL NON-INTEREST EXPENSE23,492  22,683  47,185  45,894 
INCOME BEFORE INCOME TAXES15,773  19,607  27,672  30,499 
Provision for income taxes3,204  4,346  5,421  6,285 
NET INCOME12,569  15,261  22,251  24,214 
OTHER COMPREHENSIVE INCOME       
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes8,341  (4,682) 18,565  (11,883)
Change in funded status of post retirement benefits, net of taxes304  281  607  (2,302)
COMPREHENSIVE INCOME$21,214  $10,860  $41,423  $10,029 
PER SHARE DATA       
Basic and Diluted Earnings per Share$1.02  $1.25  $1.81  $1.98 
Weighted average number of shares outstanding (in thousands)12,290  12,255  12,286  12,252 


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

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