THFF - First Financial Corporation reports 1st Quarter results

April, 23 2019 10:40 AM First Financial Corporation Indiana

TERRE HAUTE, Ind., April 23, 2019 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2019. Net income for the three months ending March 31, 2019 was $9.68 million compared to $8.95 million for the same period of 2018. Diluted net income per common share was $0.79 compared to $0.73 for the same period of 2018. Return on assets for the three months ended March 31, 2019 was 1.29% compared to 1.20% for the three months ended March 31, 2018.

Average total loans for the first quarter of 2019 were $1.97 billion versus $1.91 billion for the comparable period in 2018, an increase of $64.2 million or 3.37%. Total loans outstanding increased $76.6 million, or 4.02%, from $1.91 billion as of March 31, 2018 to $1.98 billion as of March 31, 2019. On a linked quarter basis, average total loans increased $31.7 million, or 1.63%, from $1.94 billion for the quarter ending December 31, 2018.

Average total deposits for the quarter ended March 31, 2019 were $2.43 billion versus $2.45 billion as of March 31, 2018. Total deposits were $2.42 billion as of March 31, 2019 compared to $2.46 billion as of March 31, 2018.

Book value per share was $37.66 at March 31, 2019 compared to $33.86 at March 31, 2018. Shareholders equity at March 31, 2019 was $462.8 million compared to $414.9 million on March 31, 2018. The company’s tangible common equity to tangible asset ratio was 14.29% at March 31, 2019, compared to 12.98% at March 31, 2018.

Net interest income for the first quarter of 2019 was $29.4 million, an increase of 7.11% over the $27.5 million reported for the same period of 2018. The net interest margin for the quarter ended March 31, 2019 increased to 4.31% from the 4.06% reported at March 31, 2018.

Nonperforming loans as of March 31, 2019 were $16.1 million versus $20.7 million as of March 31, 2018. The ratio of nonperforming loans to total loans and leases was 0.81% as of March 31, 2019 versus 1.09% as of March 31, 2018.

The provision for loan losses for the three months ended March 31, 2019 was $1.47 million, equal to the $1.47 million provision for the first quarter of 2018. Net charge-offs were $946 thousand for the first quarter of 2019 compared to $1.1 million in the same period of 2018. The Corporation’s allowance for loan losses as of March 31, 2019 was $21.0 million compared to $20.2 million as of March 31, 2018. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2019, the same as March 31, 2018.

Non-interest income for the three months ended March 31, 2019 and 2018 was $7.6 and $8.1 million, respectively.
Non-interest expense for the three months ended March 31, 2019 was $23.7 million, which included $416 thousand of merger related expenses, compared to $23.2 million in 2018. The Corporation’s efficiency ratio was 62.29% for the quarter ending March 31, 2019 versus 63.49% for the same period in 2018.

Income tax expense for the three months ended March 31, 2019 was $2.22 million versus $1.94 million for the same period in 2018. The effective tax rate for 2019 was 18.63% compared to 17.80% for 2018.

Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our first quarter 2019 results. We continue to have good growth in loans and our net interest income. We are looking forward to closing our acquisition of HopFed Bancorp and excited about the opportunities presented with our expansion into new markets.”

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,
END OF PERIOD BALANCES


2019


2018


2018
Assets

$
3,025,565

$
3,008,718

$
2,956,654
Deposits

$
2,419,556

$
2,436,727

$
2,457,189
Loans, including net deferred loan costs

$
1,984,053

$
1,953,988

$
1,907,445
Allowance for Loan Losses

$
20,960

$
20,436

$
20,241
Total Equity

$
462,796

$
442,697

$
414,901
Tangible Common Equity ^(a)

$
427,358

$
407,145

$
379,019





AVERAGE BALANCES




Total Assets

$
3,004,056

$
2,976,724

$
2,979,601
Earning Assets

$
2,824,524

$
2,795,260

$
2,800,498
Investments

$
850,749

$
849,818

$
876,764
Loans

$
1,972,333

$
1,940,651

$
1,908,118
Total Deposits

$
2,428,164

$
2,448,301

$
2,449,888
Interest-Bearing Deposits

$
1,999,272

$
2,017,901

$
2,028,581
Interest-Bearing Liabilities

$
71,923

$
49,362

$
54,475
Total Equity

$
450,666

$
435,134

$
414,340





INCOME STATEMENT DATA




Net Interest Income

$
29,426

$
29,595

$
27,473
Net Interest Income Fully Tax Equivalent ^(b)

$
30,401

$
30,591

$
28,453
Provision for Loan Losses

$
1,470

$
1,470

$
1,473
Non-interest Income

$
7,636

$
8,233

$
8,103
Non-interest Expense

$
23,693

$
23,098

$
23,210
Net Income

$
9,682

$
11,056

$
8,954





PER SHARE DATA




Basic and Diluted Net Income Per Common Share

$
0.79

$
0.90

$
0.73
Cash Dividends Declared Per Common Share

$
—

$
0.51

$
—
Book Value Per Common Share

$
37.66

$
36.06

$
33.86
Tangible Book Value Per Common Share ^(c)

$
34.77

$
32.58

$
30.93
Basic Weighted Average Common Shares Outstanding

12,282

12,265

12,248







(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 Ended


March 31,
December 31,
March 31,


2019
2018
2018
Return on average assets

1.29
%
1.49
%
1.20
%
Return on average common shareholder's equity

8.59
%
9.93
%
8.64
%
Efficiency ratio

62.29
%
59.49
%
63.49
%
Average equity to average assets

15.00
%
14.96
%
13.91
%
Net interest margin ^(a)

4.31
%
4.35
%
4.06
%
Net charge-offs to average loans and leases

0.19
%
0.28
%
0.24
%
Loan and lease loss reserve to loans and leases

1.06
%
1.05
%
1.06
%
Loan and lease loss reserve to nonperforming loans

130.28
%
123.27
%
97.66
%
Nonperforming loans to loans and leases

0.81
%
0.85
%
1.09
%
Tier 1 leverage

14.83
%
14.59
%
13.71
%
Risk-based capital - Tier 1

18.65
%
18.48
%
17.57
%
(a) Net interest margin is calculated on a tax equivalent basis.

Asset Quality

Three Months Ended



March 31,


December 31,


March 31,




2019


2018


2018

Accruing loans and leases past due 30-89 days

$
11,402

$
11,388

$
9,758

Accruing loans and leases past due 90 days or more

$
507

$
798

$
602

Nonaccrual loans and leases

$
10,808

$
10,974

$
13,206

Total troubled debt restructuring

$
4,774

$
4,806

$
6,919

Other real estate owned

$
857

$
603

$
1,923

Nonperforming loans and other real estate owned

$
16,946

$
17,181

$
22,650

Total nonperforming assets

$
20,240

$
20,439

$
38,179

Gross charge-offs

$
2,109

$
2,139

$
2,074

Recoveries

$
1,163

$
804

$
933

Net charge-offs/(recoveries)

$
946

$
1,335

$
1,141

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


March 31, 2019

December 31, 2018













(unaudited)
































ASSETS







Cash and due from banks
$
54,627


$
74,388

Federal funds sold
2,000


—

Securities available-for-sale
786,211


784,916

Loans:



Commercial
1,180,347


1,166,352

Residential
452,384


443,670

Consumer
348,193


341,041


1,980,924


1,951,063

(Less) plus:



Net deferred loan costs
3,129


2,925

Allowance for loan losses
(20,960
)

(20,436
)

1,963,093


1,933,552

Restricted stock
10,412


10,390

Accrued interest receivable
14,379


13,970

Premises and equipment, net
45,977


46,554

Bank-owned life insurance
86,471


86,186

Goodwill
34,355


34,355

Other intangible assets
1,083


1,197

Other real estate owned
857


603

Other assets
26,100


22,607

TOTAL ASSETS
$
3,025,565


$
3,008,718





LIABILITIES AND SHAREHOLDERS’ EQUITY



Deposits:



Non-interest-bearing
$
440,738


$
431,923

Interest-bearing:



Certificates of deposit exceeding the FDIC insurance limits
50,973


42,284

Other interest-bearing deposits
1,927,845


1,962,520


2,419,556


2,436,727

Short-term borrowings
56,648


69,656

FHLB advances
25,000


—

Other liabilities
61,565


59,634

TOTAL LIABILITIES
2,562,769


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 2018
1,825


1,824

Additional paid-in capital
76,974


76,774

Retained earnings
466,398


456,716

Accumulated other comprehensive loss
(12,927
)

(23,454
)
Less: Treasury shares at cost-2,342,111 in 2019 and 2,334,245 in 2018
(69,474
)

(69,159
)
TOTAL SHAREHOLDERS’ EQUITY
462,796


442,701

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
3,025,565


$
3,008,718

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


Three Months Ended March 31,

2019

2018









(unaudited)
INTEREST INCOME:







Loans, including related fees
$
26,754


$
23,623

Securities:



Taxable
3,681


3,593

Tax-exempt
1,867


1,840

Other
314


321

TOTAL INTEREST INCOME
32,616


29,377

INTEREST EXPENSE:



Deposits
2,817


1,764

Short-term borrowings
323


99

Other borrowings
50


41

TOTAL INTEREST EXPENSE
3,190


1,904

NET INTEREST INCOME
29,426


27,473

Provision for loan losses
1,470


1,473

NET INTEREST INCOME AFTER PROVISION



FOR LOAN LOSSES
27,956


26,000

NON-INTEREST INCOME:



Trust and financial services
1,204


1,415

Service charges and fees on deposit accounts
2,624


2,885

Other service charges and fees
3,114


3,144

Securities gains, net
(4
)

—

Insurance commissions
23


32

Gain on sales of mortgage loans
420


340

Other
255


287

TOTAL NON-INTEREST INCOME
7,636


8,103

NON-INTEREST EXPENSE:



Salaries and employee benefits
12,755


12,965

Occupancy expense
1,815


1,781

Equipment expense
1,817


1,693

FDIC Expense
140


227

Other
7,166


6,545

TOTAL NON-INTEREST EXPENSE
23,693


23,211

INCOME BEFORE INCOME TAXES
11,899


10,892

Provision for income taxes
2,217


1,939

NET INCOME
9,682


8,953

OTHER COMPREHENSIVE INCOME



Change in unrealized gains/(losses) on securities, net of reclassifications and taxes
10,224


(7,699
)
Change in funded status of post retirement benefits, net of taxes
303


281

COMPREHENSIVE INCOME
$
20,209


$
1,535

PER SHARE DATA



Basic and Diluted Earnings per Share
$
0.79


$
0.73

Weighted average number of shares outstanding (in thousands)
12,282


12,248

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

Company Name:	First Financial Corporation Indiana
Stock Symbol:	THFF
Market:	NASDAQ
Website:	first-online.com

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