First Financial Corporation Reports 1st Quarter 2014 Results

TERRE HAUTE, IN--(Marketwired - Apr 29, 2014) - First Financial Corporation (NASDAQ: THFF) today announced results for the three months ended March 31, 2014. Net income of $7.8 million increased 1.8% compared to $7.7 million for the same period of 2013. Return on assets for the first quarter of 2014 was 1.03% compared to 1.05% for the three months ended March 31, 2013.

Net interest income for the first quarter of 2014 was $27.1 million, a 3.7% increase, from the $26.2 million reported for the same period of 2013. The net interest margin at March 31, 2014 was 4.10%, compared to 4.09% reported at March 31, 2013.

The provision for loan losses for the three months ended March 31, 2014 was $1.96 million compared to the $3.02 million provision for the first quarter of 2013. Net charge-offs were $1.39 million for the first quarter of 2014 compared to a net recovery in 2013 of $1.04 million.

Non-interest income for the three months ended March 31, 2014 and 2013 was $10.1 million and $9.9 million, respectively. Gain on sale of loans decreased $587 thousand while the income from service charges on deposits and other service fees increased by virtually the same amount.

Non-interest expense for the three months ended March 31, 2014 was $23.7 million compared to $22.1 million in 2013. The expansion of the branch network in the last half of 2013 resulted in increased occupancy and equipment expense as well as a 4% increase in full-time equivalent employees when comparing the first quarters of 2014 and 2013.

Total loans at March 31, 2014 stood at $1.78 billion compared to the $1.82 billion reported the same time a year ago. Deposits increased by $157.2 million to $2.5 billion at March 31, 2014 from March 31, 2013. Reduced demand for loans allowed for the reduction of Federal Home Loan Bank borrowings by $76.4 million during this period.

Book value per share for the first quarter of 2014 was $29.90, a 5.16% increase from $28.43 at March 31, 2013. Shareholders' equity increased 5.54% to $399.3 million from $378.4 million on March 31, 2013.

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana.

CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
		March 31,  2014				December 31,  2013
		(unaudited)
ASSETS
Cash and due from banks		$	83,988			$	71,033
Federal funds sold			9,791				4,276
Securities available-for-sale			921,165				914,560
Loans:
Commercial			1,037,518				1,042,138
Residential			481,663				482,377
Consumer			265,428				268,033
			1,784,609				1,792,548
Less:
Unearned Income			(635	)			(1,120	)
Allowance for loan losses			(20,408	)			(20,068	)
			1,763,566				1,771,360
Restricted Stock			21,057				21,057
Accrued interest receivable			11,451				11,554
Premises and equipment, net			50,655				51,449
Bank-owned life insurance			79,444				79,035
Goodwill			39,489				39,489
Other intangible assets			4,656				4,935
Other real estate owned			4,806				5,291
FDIC Indemnification Asset			754				1,055
Other assets			41,720				43,624
TOTAL ASSETS		$	3,032,542			$	3,018,718
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing		$	535,333			$	506,815
Interest-bearing:
Certificates of deposit of $100 or more			171,165				179,177
Other interest-bearing deposits			1,800,516				1,772,799
			2,507,014				2,458,791
Short-term borrowings			35,710				59,592
Other borrowings			38,214				58,288
Other liabilities			52,275				55,852
TOTAL LIABILITIES			2,633,213				2,632,523
Shareholders' equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-14,538,132 in 2014 and 14,516,113 in 2013
Outstanding shares-13,355,272 in 2014 and 13,343,029 in 2013			1,812				1,811
Additional paid-in capital			71,315				71,074
Retained earnings			364,914				357,083
Accumulated other comprehensive income (loss)			(8,551	)			(13,969	)
Less: Treasury shares at cost-1,182,860 in 2014 and 1,173,084 in 2013			(30,161	)			(29,804	)
TOTAL SHAREHOLDERS' EQUITY			399,329				386,195
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	3,032,542			$	3,018,718

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
		Three Months Ended  March 31,
		2014			2013
		(unaudited)			(unaudited)
INTEREST INCOME:
Loans, including related fees		$	22,218		$	23,454
Securities:
Taxable			4,444			3,214
Tax-exempt			1,746			1,770
Other			416			504
TOTAL INTEREST INCOME			28,824			28,942
INTEREST EXPENSE:
Deposits			1,290			1,742
Short-term borrowings			14			20
Other borrowings			378			1,007
TOTAL INTEREST EXPENSE			1,682			2,769
NET INTEREST INCOME			27,142			26,173
Provision for loan losses			1,960			3,021
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES			25,182			23,152
NON-INTEREST INCOME:
Trust and financial services			1,489			1,526
Service charges and fees on deposit accounts			2,484			2,254
Other service charges and fees			2,839			2,500
Securities gains/(losses), net			--			4
Insurance commissions			1,913			1,963
Gain on sales of mortgage loans			376			963
Other			1,010			667
TOTAL NON-INTEREST INCOME			10,111			9,877
NON-INTEREST EXPENSE:
Salaries and employee benefits			14,096			13,596
Occupancy expense			1,925			1,522
Equipment expense			1,658			1,501
FDIC Expense			487			557
Other			5,539			5,023
TOTAL NON-INTEREST EXPENSE			23,705			22,199
INCOME BEFORE INCOME TAXES			11,588			10,830
Provision for income taxes			3,757			3,137
NET INCOME			7,831			7,693
OTHER COMPREHENSIVE INCOME (LOSS)
Change in unrealized gains/losses on securities, net of reclassifications and taxes			5,303			(1,667	)
Change in funded status of post retirement benefits, net of taxes			115			214
COMPREHENSIVE INCOME (LOSS)		$	13,249		$	6,240
PER SHARE DATA
Basic and Diluted Earnings per Share		$	0.59		$	0.58
Weighted average number of shares outstanding (in thousands)			13,349			13,300

Key Ratios		For the Three Months Ended
		March 31,				March 31,
		2014				2013
Return on average assets			1.03	%			1.05	%
Return on average common shareholder's equity			7.90	%			8.21	%
Average common shareholder's equity to average assets			13.08	%			12.79	%
End of period tangible common equity to tangible assets			11.89	%			11.53	%
Book value per share		$	29.90			$	28.43
Tangible book value per share		$	26.60			$	25.34
Risk-based capital - Tier 1			16.63	%			15.82	%
Risk-based capital - Total			17.56	%			16.97	%
Net interest margin			4.10	%			4.09	%
Efficiency Ratio			62.30	%			59.25	%
Net charge-offs to average loans and leases			0.31	%			(0.23	)%
Loan and lease loss reserve to loans and leases			1.14	%			1.39	%
Nonperforming assets to loans and leases			1.44	%			2.63	%
Asset Quality		For the Three Months Ended
		March 31,				March 31,
		2014				2013
Accruing loans and leases past due 90 days or more		$	1,153			$	1,262
Nonaccrual loans and leases			19,798				38,132
Other real estate owned			4,806				7,752
Total nonperforming assets		$	25,757			$	47,146