First Financial Corporation Reports 2013 Results

TERRE HAUTE, IN--(Marketwired - Feb 5, 2014) -  First Financial Corporation (NASDAQ: THFF) today announced results for the fourth quarter and the year ended December 31, 2013. Net income of $31.5 and $8.9 million for the twelve and three months, respectively, compares to $32.8 and $8.6 million for the same periods of 2012. Return on assets for the twelve and three months ended December 31, 2013 was 1.06% and 1.16%, respectively, compared to 1.13% and 1.14% for the twelve and three months ended December 31, 2012.

Net interest income for the fourth quarter of 2013 was $27.6 million, an increase of 3.27% over the $26.7 million reported for the same period of 2012. Net interest income for the year ended December 31, 2013 was $107.3 million compared to the $108.9 million reported 2012. The net interest margin at December 31, 2013 was 4.13%, compared to 4.30% reported at December 31, 2012.

The provision for loan losses for the three months ended December 31, 2013 was $1.4 million compared to the $1.5 million provision for the fourth quarter of 2012. For the year ended December 31, 2013 and 2012, the provision expense was $7.9 and $8.8 million, respectively.

Non-interest income for the three months ended December 31, 2013 was $11.3 million, a 6.5% increase over the $10.6 million reported for the fourth quarter of 2012. For the year ended December 31, 2013, non-interest income increased 2.3% to $40.5 million from the $39.5 million reported for the same period of 2012.

Non-interest expense for the three months ended December 31, 2013 was $24.2 million compared to $23.6 million in 2012. For the year ended December 31, 2013, non-interest expense increased 1.6% to $94.6 million compared to $93.1 for the year ended December 31, 2012.

Total loans at December 31, 2013 of $1.79 billion compare to the $1.85 billion reported during the same period a year ago. Deposits increased by $182.7 million to $2.46 billion. Book value per share was $28.94 at year end 2013, a 3.35% increase from the $28.01 at December 31, 2012. Shareholders' equity increased 3.8% to $386.2 million from $372.1 million on December 31, 2012.

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)
		December 31,
(Dollar amounts in thousands, except per share data)		2013				2012
ASSETS
Cash and due from banks		$	71,033			$	87,230
Federal funds sold			4,276				20,800
Securities available-for-sale			914,560				691,000
Loans, net of allowance of $20,068 in 2013 and $21,958 in 2012			1,771,360				1,829,978
Restricted Stock			21,057				21,292
Accrued interest receivable			11,554				12,024
Premises and equipment, net			51,449				47,308
Bank-owned life insurance			79,035				77,295
Goodwill			39,489				37,612
Other intangible assets			4,935				3,893
Other real estate owned			5,291				7,722
FDIC Indemnification Asset			1,055				2,632
Other assets			43,624				56,622
TOTAL ASSETS		$	3,018,718			$	2,895,408
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing		$	506,815			$	465,954
Interest-bearing:
Certificates of deposit of $100 or more			179,177				213,610
Other interest-bearing deposits			1,772,799				1,596,570
			2,458,791				2,276,134
Short-term borrowings			59,592				40,551
Other borrowings			58,288				119,705
Other liabilities			55,852				86,896
TOTAL LIABILITIES			2,632,523				2,523,286
Shareholders' equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-14,516,113 in 2013 and 14,490,609 in 2012
Outstanding shares-13,343,029 in 2013 and 13,287,348 in 2012			1,811				1,808
Additional paid-in capital			71,074				69,989
Retained earnings			357,083				338,342
Accumulated other comprehensive income (loss)			(13,969	)			(7,472	)
Less: Treasury shares at cost-1,173,084 in 2013 and 1,203,261 in 2012			(29,804	)			(30,545	)
TOTAL SHAREHOLDERS' EQUITY			386,195				372,122
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	3,018,718			$	2,895,408

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
		Years Ended December 31,
(Dollar amounts in thousands, except per share data)		2013				2012				2011
INTEREST AND DIVIDEND INCOME:
Loans, including related fees		$	91,242			$	99,196			$	91,392
Securities:
Taxable			16,157				13,542				16,161
Tax-exempt			7,046				7,246				6,779
Other			1,776				2,321				2,009
TOTAL INTEREST AND DIVIDEND INCOME			116,221				122,305				116,341
INTEREST EXPENSE:
Deposits			5,886				8,520				12,127
Short-term borrowings			78				140				187
Other borrowings			2,997				4,733				4,833
TOTAL INTEREST EXPENSE			8,961				13,393				17,147
NET INTEREST INCOME			107,260				108,912				99,194
Net Provision for loan losses			7,860				8,773				5,755
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			99,400				100,139				93,439
NON-INTEREST INCOME:
Trust and financial services			6,035				5,804				4,544
Service charges and fees on deposit accounts			10,162				9,742				8,995
Other service charges and fees			11,081				9,710				8,289
Securities gain, net			423				886				6
Other-than-temporary loss
Total impairment loss			--				(11	)			(110	)
Loss recognized in other comprehensive income
Net impairment loss recognized in earnings			--				(11	)			(110	)
Insurance commissions			7,750				7,422				7,347
Gain on sale of mortgage loans			3,052				4,590				1,957
Other			1,952				1,404				2,312
TOTAL NON-INTEREST INCOME			40,455				39,547				33,340
NON-INTEREST EXPENSES:
Salaries and employee benefits			55,097				56,211				45,362
Occupancy expense			6,102				5,746				4,777
Equipment expense			6,348				5,489				4,352
Federal Deposit Insurance			2,052				1,949				1,804
Other			24,955				23,661				18,892
TOTAL NON-INTEREST EXPENSE			94,554				93,056				75,187
INCOME BEFORE INCOME TAXES			45,301				46,630				51,592
Provision for income taxes			13,767				13,818				14,397
NET INCOME		$	31,534			$	32,812			$	37,195
OTHER COMPREHENSIVE INCOME
Change in unrealized gains/losses on securities, net of reclassifications and taxes		$	(17,066	)		$	691			$	8,857
Change in funded status of post retirement benefits, net of taxes		$	10,569			$	2,331			$	(9,982	)
COMPREHENSIVE INCOME		$	25,037			$	35,834			$	36,070
EARNINGS PER SHARE:
BASIC AND DILUTED		$	2.37			$	2.48			$	2.83
Weighted average number of shares outstanding (in thousands)			13,310				13,240				13,163

Key Ratios		For the Year Ended
		December 31,				December 31,
		2013				2012
Return on average assets			1.06	%			1.13	%
Return on average common shareholder's equity			8.35	%			9.02	%
Average common shareholder's equity to average assets			12.69	%			12.55	%
End of period tangible common equity to tangible assets			11.49	%			11.58	%
Book value per share		$	28.94			$	28.01
Tangible book value per share		$	25.61			$	24.88
Risk-based capital - Tier 1			16.22	%			15.38	%
Risk-based capital - Total			17.13	%			16.37	%
Net interest margin			4.13	%			4.30	%
Efficiency Ratio			62.02	%			60.24	%
Net charge-offs to average loans and leases			0.47	%			0.45	%
Loan and lease loss reserve to loans and leases			1.12	%			1.19	%
Nonperforming assets to loans and leases			1.19	%			2.59	%

Asset Quality		For the Year Ended
		December 31,			December 31,
		2013			2012
Accruing loans and leases past due 90 days or more		$	2,073		$	3,362
Nonaccrual loans and leases			19,779			36,794
Other real estate owned			5,291			7,722
Total nonperforming assets		$	27,143		$	47,878