THFF - First Financial Corporation reports 2nd Quarter results

July, 24 2018 10:30 AM First Financial Corporation Indiana

TERRE HAUTE, Ind., July 24, 2018 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2018. Net income increased 82.72% to $15.3 million compared to $8.4 million for the same 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. Diluted net income per common share increased 83.82% to $1.25 from $0.68 for the comparable period of 2017.

The Corporation further reported net income of $24.2 million for the six months ended June 30, 2018 versus $17.7 million for the comparable period of 2017. Diluted net income per common share for the six months ended June 30, 2018 was $1.98 versus $1.45 for the comparable period of 2017. The first quarter of 2017 included a similar pre-tax recovery of $3.1 million. Return on assets for the six months ended June 30, 2018 was 1.63% compared to 1.19% for the six months ended June 30, 2017.

Norman L. Lowery, President and Chief Executive Officer, commented, “We are pleased with our second quarter 2018 results as we experienced another quarter of loan growth which contributed to our increased interest income. Excluding the recovery on the security, our core fee income increased as well. It was a very solid quarter.”

Book value per share was $34.25 at June 30, 2018 compared to $35.54 at June 30, 2017. Shareholders’ equity was $419.7 million compared to $434.5 million on June 30, 2017.

Average total loans for the second quarter of 2018 were $1.92 billion versus $1.85 billion for the comparable period in 2017, an increase of $68.0 million or 3.68%. Total loans outstanding increased $71.5 million, or 3.85% to $1.93 billion as of June 30, 2018 from $1.86 billion as of June 30, 2017. On a linked quarter basis, average total loans increased $7.4 million, from $1.91 billion for the quarter ending March 31, 2018.

Average total deposits for the quarter ended June 30, 2018 were $2.47 billion versus $2.44 billion as of June 30, 2017. Total deposits increased $26.6 million or 1.10% to $2.45 billion as of June 30, 2018 from $2.43 billion as of June 30, 2017. On a linked quarter basis, average deposits increased $17.5 million from $2.45 billion for the quarter ending March 31, 2018.

The company’s tangible common equity to tangible asset ratio was 14.05% at June 30, 2018, compared to 13.73% at June 30, 2017.

Net interest income for the second quarter of 2018 was $30.7 million compared to the $26.6 million reported for the same period of 2017. The net interest margin for the six months ended June 30, 2018 increased to 4.32% compared to 4.05% for the same period ending June 30, 2017.

The provision for loan losses for the three months ended June 30, 2018 was $1.4 million compared to $1.0 million for the second quarter of 2017. Net charge-offs were $1.5 million for the second quarter of 2018 compared to $755 thousand in the same period of 2017. The Corporation’s allowance for loan losses as of June 30, 2018 was $20.1 million compared to $19.7 million as of June 30, 2017. The allowance for loan losses as a percent of total loans was 1.04% as of June 30, 2018 compared to 1.06% as of June 30, 2017.

Nonperforming loans decreased 7.3% to $18.9 million as of June 30, 2018 versus $20.4 million as of June 30, 2017. The ratio of nonperforming loans to total loans and leases was .98% as of June 30, 2018 versus 1.10% as of June 30, 2017.

Non-interest income for the three months ended June 30, 2018 was $13.0 compared to $8.1 million as of June 30, 2017. The $4.8 million increase included a $4.5 million recovery on a security discussed earlier.

Non-interest expense for the three months ended June 30, 2018 was $22.7 million compared to $22.1 million in 2017. The Corporation’s efficiency ratio was 50.80% for the quarter ending June 30, 2018 versus 60.93% 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
Six Months Ended


June 30,
March 31,
June 30,
June 30,
June 30,


2018
2018
2017
2018
2017
END OF PERIOD BALANCES






Assets

$
2,968,048

$
2,956,654

$
2,974,688

$
2,968,048

$
2,974,688

Deposits

$
2,454,335

$
2,457,189

$
2,427,723

$
2,454,335

$
2,427,723

Loans, including net deferred loan costs

$
1,928,572

$
1,907,445

$
1,857,030

$
1,928,572

$
1,857,030

Allowance for Loan Losses

$
20,071

$
20,241

$
19,680

$
20,071

$
19,680

Total Equity

$
419,695

$
414,901

$
434,454

$
419,695

$
434,454

Tangible Common Equity ^(a)

$
383,916

$
379,019

$
398,242

$
383,916

$
398,242








AVERAGE BALANCES






Total Assets

$
2,973,295

$
2,979,601

$
2,974,260

$
2,976,448

$
2,978,687

Earning Assets

$
2,784,128

$
2,800,498

$
2,779,361

$
2,787,091

$
2,773,176

Investments

$
865,694

$
876,764

$
920,453

$
871,229

$
920,026

Loans

$
1,915,532

$
1,908,118

$
1,847,484

$
1,911,825

$
1,844,438

Total Deposits

$
2,467,426

$
2,449,888

$
2,436,440

$
2,458,657

$
2,440,301

Interest-Bearing Deposits

$
2,041,391

$
2,028,581

$
2,009,932

$
2,034,986

$
1,990,890

Interest-Bearing Liabilities

$
34,539

$
54,475

$
51,752

$
44,507

$
50,958

Total Equity

$
420,092

$
414,340

$
430,975

$
417,216

$
428,824








INCOME STATEMENT DATA






Net Interest Income

$
30,684

$
27,473

$
26,560

$
58,157

$
53,067

Net Interest Income Fully Tax Equivalent ^(b)

$
31,694

$
28,453

$
28,137

$
60,147

$
56,168

Provision for Loan Losses

$
1,355

$
1,473

$
1,040

$
2,828

$
2,636

Non-interest Income

$
12,961

$
8,103

$
8,113

$
21,064

$
19,162

Non-interest Expense

$
22,683

$
23,210

$
22,088

$
45,894

$
44,665

Net Income

$
15,261

$
8,954

$
8,352

$
24,214

$
17,721








PER SHARE DATA






Basic and Diluted Net Income Per Common Share

$
1.25

$
0.73

$
0.68

$
1.98

$
1.45

Cash Dividends Declared Per Common Share

$
0.51

$
–

$
0.50

$
0.51

$
0.50

Book Value Per Common Share

$
34.25

$
33.86

$
35.54

$
34.25

$
35.54

Tangible Book Value Per Common Share ^(c)

$
31.12

$
30.93

$
32.12

$
31.33

$
32.58

Basic Weighted Average Common Shares Outstanding

12,255

12,248

12,224

12,252

12,221

(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
Six Months Ended


June 30,
March 31,
June 30,
June 30,
June 30,


2018
2018
2017
2018
2017
Return on average assets

2.05
%
1.20
%
1.12
%
1.63
%
1.19
%
Return on average common shareholder's equity

14.53
%
8.64
%
7.75
%
11.61
%
8.26
%
Efficiency ratio

50.80
%
63.49
%
60.93
%
56.51
%
59.29
%
Average equity to average assets

14.13
%
13.91
%
14.49
%
14.02
%
14.40
%
Net interest margin ^(a)

4.58
%
4.06
%
4.05
%
4.32
%
4.05
%
Net charge-offs to average loans and leases

0.32
%
0.24
%
0.19
%
0.28
%
0.19
%
Loan and lease loss reserve to loans and leases

1.04
%
1.06
%
1.06
%
1.04
%
1.06
%
Loan and lease loss reserve to nonperforming loans

106.39
%
97.66
%
89.05
%
106.39
%
89.05
%
Nonperforming loans to loans and leases

0.98
%
1.09
%
1.10
%
0.98
%
1.10
%
Tier 1 leverage

14.05
%
13.71
%
13.73
%
14.05
%
13.73
%
Risk-based capital - Tier 1

18.09
%
17.57
%
17.80
%
18.09
%
17.80
%

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

Asset Quality

Three Months Ended
Six Months Ended


June 30,
March 31,
June 30,
June 30,
June 30,


2018
2018
2017
2018
2017
Accruing loans and leases past due 30-89 days

$
7,741

$
9,758

$
8,846

$
7,741

$
8,846

Accruing loans and leases past due 90 days or more

$
1,273

$
602

$
1,117

$
1,273

$
1,117

Nonaccrual loans and leases

$
10,773

$
13,206

$
11,255

$
10,773

$
11,255

Total troubled debt restructuring

$
6,819

$
6,919

$
7,984

$
6,819

$
7,984

Other real estate owned

$
497

$
1,923

$
2,384

$
497

$
2,384

Nonperforming loans and other real estate owned

$
19,362

$
22,650

$
22,740

$
19,362

$
22,740

Total nonperforming assets

$
22,812

$
38,179

$
35,024

$
22,812

$
35,024

Gross charge-offs

$
2,270

$
2,074

$
2,090

$
4,344

$
4,364

Recoveries

$
745

$
933

$
1,335

$
1,678

$
2,635

Net charge-offs/(recoveries)

$
1,525

$
1,141

$
755

$
2,666

$
1,729

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


June 30, 2018

December 31, 2017

(unaudited)
ASSETS







Cash and due from banks
$
50,081


$
74,107

Securities available-for-sale

782,609



814,931

Loans:







Commercial

1,138,255



1,139,490

Residential

442,163



436,143

Consumer

345,404



327,976



1,925,822



1,903,609

(Less) plus:







Net deferred loan costs

2,750



3,152

Allowance for loan losses

(20,071
)


(19,909
)


1,908,501



1,886,852

Restricted stock

10,390



10,379

Accrued interest receivable

12,345



12,913

Premises and equipment, net

47,372



48,272

Bank-owned life insurance

85,606



85,016

Goodwill

34,355



34,355

Other intangible assets

1,424



1,630

Other real estate owned

497



1,880

Other assets

34,868



30,333

TOTAL ASSETS
$
2,968,048


$
3,000,668









LIABILITIES AND SHAREHOLDERS’ EQUITY







Deposits:







Non-interest-bearing
$
430,382


$
425,001

Interest-bearing:







Certificates of deposit exceeding the FDIC insurance limits

40,279



43,178

Other interest-bearing deposits

1,983,674



1,990,474



2,454,335



2,458,653

Short-term borrowings

32,589



57,686

FHLB advances

1,400



–

Other liabilities

60,029



70,760

TOTAL LIABILITIES

2,548,353



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

1,823



1,822

Additional paid-in capital

75,995



75,624

Retained earnings

440,605



420,275

Accumulated other comprehensive loss

(28,889
)


(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

419,695



413,569

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
2,968,048


$
3,000,668

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,

2018

2017

2018

2017

(unaudited)

(unaudited)
INTEREST INCOME:







Loans, including related fees
$
24,778


$
22,325


$
48,401


$
44,266

Securities:







Taxable
5,947


3,630


9,540


7,387

Tax-exempt
1,860


1,843


3,700


3,670

Other
318


330


639


651

TOTAL INTEREST INCOME
32,903


28,128


62,280


55,974

INTEREST EXPENSE:







Deposits
2,125


1,471


3,889


2,746

Short-term borrowings
88


73


187


117

Other borrowings
6


24


47


44

TOTAL INTEREST EXPENSE
2,219


1,568


4,123


2,907

NET INTEREST INCOME
30,684


26,560


58,157


53,067

Provision for loan losses
1,355


1,040


2,828


2,636

NET INTEREST INCOME AFTER PROVISION







FOR LOAN LOSSES
29,329


25,520


55,329


50,431

NON-INTEREST INCOME:







Trust and financial services
1,340


1,149


2,755


2,466

Service charges and fees on deposit accounts
2,846


3,004


5,731


5,781

Other service charges and fees
3,347


3,114


6,491


6,299

Securities gains/(losses), net
2


15


2


17

Gain on sales of mortgage loans
500


393


840


720

Other
4,926


438


5,245


3,879

TOTAL NON-INTEREST INCOME
12,961


8,113


21,064


19,162

NON-INTEREST EXPENSE:







Salaries and employee benefits
12,578


12,218


25,543


25,293

Occupancy expense
1,633


1,761


3,414


3,529

Equipment expense
1,650


1,835


3,343


3,632

FDIC Expense
223


228


450


461

Other
6,599


6,046


13,144


11,750

TOTAL NON-INTEREST EXPENSE
22,683


22,088


45,894


44,665

INCOME BEFORE INCOME TAXES
19,607


11,545


30,499


24,928

Provision for income taxes
4,346


3,193


6,285


7,207

NET INCOME
15,261


8,352


24,214


17,721

OTHER COMPREHENSIVE INCOME







Change in unrealized gains/losses on securities, net of reclassifications and taxes
(4,682
)

5,045


(11,883
)

8,233

Change in funded status of post retirement benefits, net of taxes
281


184


(2,302
)

367

COMPREHENSIVE INCOME
$
10,860


$
13,581


$
10,029


$
26,321

PER SHARE DATA







Basic and Diluted Earnings per Share
$
1.25


$
0.68


$
1.98


$
1.45

Weighted average number of shares outstanding (in thousands)
12,255


12,224


12,252


12,221

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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