SOURCE: First Financial Corporation

First Financial Corporation

February 03, 2015 12:37 ET

First Financial Corporation Reports 2014 Results

TERRE HAUTE, IN--(Marketwired - Feb 3, 2015) - First Financial Corporation (NASDAQ: THFF) today announced results for the fourth quarter of 2014 and the year ended December 31, 2014. Net income for the three months ending December 31, 2014 increased 2.89% to $9.2 million compared to $8.9 million for the same period of 2013. Diluted net income per common share increased 5.97% to $0.71 from $0.67 for the comparable period of 2013.

The Corporation further reported net income of $33.8 million for the twelve months ended December 31, 2014 versus $31.5 million for the comparable period of 2013, an increase of 7.10%. Diluted net income per common share also increased 7.59% to $2.55 for the twelve months ended December 31, 2014 versus $2.37 for the comparable period of 2013. Return on assets for the twelve months ended December 31, 2014 was 1.12% compared to 1.06% for the twelve months ended December 31, 2013.

Earnings for the twelve-month period ended December 31, 2014 were negatively impacted by a non-cash provision for state income tax expense of $607,541, which resulted from the revaluation of the Corporation's state deferred tax items. The tax rate, currently 8.0%, is scheduled to drop to 6.5% for 2017. The new legislation further reduces the rate to 4.9%, beginning in 2019. The lower tax rate going forward reduces the benefit provided by the Corporation's existing deferred tax items.

Average total loans for the fourth quarter of 2014 were $1.80 billion versus $1.79 billion for the comparable period in 2013, an increase of $6.7 million or .37%. Total loans outstanding however decreased $10.0 million, or .56%, from $1.79 billion as of December 31, 2013 to $1.78 billion as of December 31, 2014 primarily due to payoffs in the 4th quarter related to the sale of businesses. On a linked quarter basis, average total loans decreased $9.0 million, or .50%, from $1.81 billion for the quarter ending September 30, 2014.

Average total deposits for the quarter ended December 31, 2014 were $2.47 billion versus $2.54 billion as of December 31, 2013, a decrease of 2.73%. Non-interest bearing deposits, however, increased 7.50% while interest earning deposits decreased 2.02%.

The company's tangible common equity to tangible asset ratio was 12.40% at December 31, 2014, compared to 11.49% at December 31, 2013, a 7.92% increase.

Due to the prolonged low interest rate environment net interest income for the fourth quarter of 2014 was $26.9 million, a decrease of 2.22% over the $27.6 million reported for the same period of 2013. The net interest margin for the quarter ended December 31, 2014 decreased to 3.99% from the 4.04% reported at December 31, 2013.

Asset quality remains strong with nonperforming loans decreasing 20.1% to $31.29 million as of December 31, 2014 versus $39.15 million as of December 31, 2013. The ratio of nonperforming loans to total loans and leases also decreased to 1.76% as of December 31, 2014 versus 2.19% as of December 31, 2013.

The provision for loan losses for the three months ended December 31, 2014 was $1.96 million compared to the $1.38 million provision for the fourth quarter of 2013. Net charge-offs were $618 thousand for the fourth quarter of 2014 compared to $3.14 million in the same period of 2013. The Corporation's allowance for loan losses as of December 31, 2014 was $18.8 million compared to $20.1 million as of December 31, 2013. The allowance for loan losses as a percent of total loans was 1.06% as of December 31, 2014 compared to 1.12% as of December 31, 2013.

Non-interest income for the three months ended December 31, 2014 and 2013 was $10.6 and $11.3 million, respectively, a 5.88% decrease. Non-interest income for the years ended December 31, 2014 and 2013 was $40.8 and $40.5 million. Increased income from electronic banking fees and deposit account charges effectively offset the reduced gains from the sale of mortgage loans.

Non-interest expense for the three months ended December 31, 2014 decreased $1.03 million to $23.1 million compared to $24.2 million in 2013. On a linked quarter basis, non-interest expense decreased $1.58 million from $24.7 million for the quarter ended September 30, 2014. On a year-over-year basis, salaries and employee benefits increased $839 thousand driven by the branch expansion and normal merit increases. Occupancy expenses increased $1.1million due to the branch expansion and weather-related expenses. The Corporation's efficiency ratio was 59.11% for the quarter ending December 31, 2014 versus 61.39% for the same period in 2013.

Book value per share was $31.61 at December 31, 2014, a 9.22% increase from the $28.94 at December 31, 2013. Shareholders' equity increased 2.08% to $394.2 million from $386.2 million on December 31, 2013.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our 2014 results as First Financial delivered another year of solid performance. 2014 net income was the second highest in the history of the Corporation and allowed us to increase our dividend for the 26th consecutive year."

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.

         
         
    Three Months Ended   Year Ended
    December 31,   September 30,   December 31,   December 31,
    2014   2014   2013   2014   2013
END OF PERIOD BALANCES                              
  Assets   $ 3,002,485   $ 3,056,767   $ 3,018,718   $ 3,002,485   $ 3,018,718
  Deposits     2,457,197     2,451,952     2,458,791     2,457,197     2,458,791
  Loans     1,781,428     1,811,325     1,791,428     1,781,428     1,791,428
  Allowance for Loan Losses     18,839     17,507     20,068     18,839     20,068
  Total Equity     394,214     403,873     386,195     394,214     386,195
  Tangible Common Equity     350,824     360,239     341,771     350,824     341,771
                               
AVERAGE BALANCES                              
  Total Assets     3,027,478     3,004,862     3,085,186     3,020,068     2,976,100
  Earning Assets     2,792,506     2,794,572     2,793,686     2,793,424     2,733,926
  Investments     992,441     978,435     962,785     998,189     926,327
  Loans     1,800,065     1,809,077     1,793,349     1,795,235     1,807,599
  Total Deposits     2,469,170     2,403,368     2,538,492     2,461,253     2,381,322
  Interest-Bearing Deposits     1,917,728     1,886,628     2,029,229     1,934,597     1,901,663
  Interest-Bearing Liabilities     83,577     148,997     85,748     100,512     143,129
  Total Equity     412,296     400,142     384,022     403,413     377,686
                               
INCOME STATEMENT DATA                              
  Net Interest Income     26,939     27,145     27,551     107,832     107,260
  Net Interest Income Fully Tax Equivalent     27,279     29,880     29,034     114,039     112,958
  Provision for Loan Losses     1,962     1,506     1,384     5,072     7,860
  Non-interest Income     10,615     10,494     11,278     40,785     40,455
  Non-interest Expense     23,125     24,705     24,153     95,584     94,554
  Net Income     9,181     8,272     8,923     33,772     31,534
                               
PER SHARE DATA                              
  Basic and Diluted Net Income Per Common Share     0.71     0.62     0.67     2.55     2.37
  Cash Dividends Declared Per Common Share     0.49     -     0.48     0.98     0.96
  Book Value Per Common Share     31.61     31.16     28.94     30.46     28.94
  Tangible Book Value Per Common Share     27.11     27.79     25.61     27.11     25.61
  Basic Weighted Average Common Shares Outstanding     12,932,240     13,269,826     13,323,719     13,225,846     13,309,726
                               
                               
Key Ratios Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,
  2014     2014     2013     2014     2013  
Return on average assets 1.21 %   1.10 %   1.16 %   1.12 %   1.06 %
Return on average common shareholder's equity 8.91 %   8.27 %   9.29 %   8.37 %   8.35 %
Efficiency ratio 59.11 %   63.00 %   61.39 %   61.74 %   62.02 %
Average equity to average assets 13.62 %   13.32 %   12.45 %   13.36 %   12.69 %
Net interest margin 3.99 %   4.15 %   4.04 %   4.08 %   4.13 %
Net charge-offs to average loans and leases 0.14 %   0.50 %   0.70 %   0.31 %   0.46 %
Loan and lease loss reserve to loans and leases 1.06 %   0.97 %   1.12 %   1.06 %   1.12 %
Loan and lease loss reserve to nonperforming loans 0.60 %   0.51 %   0.51 %   0.60 %   0.51 %
Nonperforming loans to loans 1.76 %   1.89 %   2.19 %   1.76 %   2.19 %
Tier 1 leverage 12.33 %   12.19 %   11.69 %   12.33 %   11.69 %
Risk-based capital - Tier 1 16.99 %   16.53 %   16.22 %   16.99 %   16.22 %
                             
                             
Asset Quality   Three Months Ended   Year Ended
    December 31,   September 30,   December 31,   December 31,
    2014   2014   2013   2014   2013
Accruing loans and leases past due 30-89 days   $ 13,444   $ 8,597   $ 12,756   $ 13,444   $ 12,756
Accruing loans and leases past due 90 days or more   $ 780   $ 787   $ 2,073,000   $ 780   $ 2,073
Nonaccrual loans and leases   $ 15,754   $ 18,673   $ 19,779   $ 15,754   $ 19,779
Nonperforming loans   $ 31,292   $ 34,218   $ 39,153   $ 31,292   $ 39,153
Other real estate owned   $ 3,965   $ 4,012   $ 5,291   $ 3,965   $ 5,291
Total nonperforming assets   $ 46,394   $ 50,102   $ 47,649   $ 46,394   $ 47,649
Total troubled debt restructurings   $ 14,758   $ 14,758   $ 17,301   $ 14,758   $ 17,301
Gross charge-offs   $ 2,308   $ 2,656   $ 3,754   $ 9,450   $ 13,387
Recoveries   $ 1,690   $ 378   $ 618   $ 3,836   $ 5,022
Net charge-offs/(recoveries)   $ 618   $ 2,278   $ 3,136   $ 5,614   $ 8,365
                               
                               
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
     
    December 31,
(Dollar amounts in thousands, except per share data)   2014   2013
    (unaudited)      
ASSETS                
Cash and due from banks   $ 78,102     $ 71,033  
Federal funds sold     8,000       4,276  
Securities available-for-sale     897,053       914,560  
Loans, net of allowance of $18,839 in 2014 and $20,068 in 2013     1,762,589       1,771,360  
Restricted stock     16,404       21,057  
Accrued interest receivable     11,593       11,554  
Premises and equipment, net     51,802       51,449  
Bank-owned life insurance     80,730       79,035  
Goodwill     39,489       39,489  
Other intangible assets     3,901       4,935  
Other real estate owned     3,965       5,291  
FDIC indemnification asset     (74 )     1,055  
Other assets     48,931       43,624  
TOTAL ASSETS   $ 3,002,485     $ 3,018,718  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
Non-interest-bearing   $ 556,389     $ 506,815  
Interest-bearing:                
Certificates of deposit of $100 or more     155,274       179,177  
Other interest-bearing deposits     1,745,534       1,772,799  
      2,457,197       2,458,791  
Short-term borrowings     48,015       59,592  
Other borrowings     12,886       58,288  
Other liabilities     90,173       55,852  
TOTAL LIABILITIES     2,608,271       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-12,942,175 in 2014 and 13,343,029 in 2013     1,815       1,811  
Additional paid-in capital     72,405       71,074  
Retained earnings     377,970       357,083  
Accumulated other comprehensive income (loss)     (14,529 )     (13,969 )
Less: Treasury shares at cost-1,595,957 in 2014 and 1,173,084 in 2013     (43,447 )     (29,804 )
TOTAL SHAREHOLDERS' EQUITY     394,214       386,195  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 3,002,485     $ 3,018,718  
 
 
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)   2014   2013   2012
    (unaudited)            
INTEREST AND DIVIDEND INCOME:                        
Loans, including related fees   $ 87,530     $ 91,242     $ 99,196  
Securities:                        
Taxable     17,015       16,157       13,542  
Tax-exempt     7,084       7,046       7,246  
Other     1,729       1,776       2,321  
TOTAL INTEREST AND DIVIDEND INCOME     113,358       116,221       122,305  
INTEREST EXPENSE:                        
Deposits     4,624       5,886       8,520  
Short-term borrowings     99       78       140  
Other borrowings     803       2,997       4,733  
TOTAL INTEREST EXPENSE     5,526       8,961       13,393  
NET INTEREST INCOME     107,832       107,260       108,912  
Net provision for loan losses     5,072       7,860       8,773  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     102,760       99,400       100,139  
NON-INTEREST INCOME:                        
Trust and financial services     5,860       6,035       5,804  
Service charges and fees on deposit accounts     10,772       10,162       9,742  
Other service charges and fees     11,697       11,081       9,710  
Securities gain, net     (3 )     423       886  
Other-than-temporary loss                        
Total impairment loss     -       -       (11 )
Loss recognized in other comprehensive income     -       -       -  
  Net impairment loss recognized in earnings     -       -       (11 )
Insurance commissions     7,646       7,750       7,422  
Gain on sale of mortgage loans     1,849       3,052       4,590  
Other     2,964       1,952       1,404  
TOTAL NON-INTEREST INCOME     40,785       40,455       39,547  
NON-INTEREST EXPENSES:                        
Salaries and employee benefits     55,936       55,097       56,211  
Occupancy expense     7,218       6,102       5,746  
Equipment expense     7,269       6,348       5,489  
Federal Deposit Insurance     1,931       2,052       1,949  
Other     23,230       24,955       23,661  
TOTAL NON-INTEREST EXPENSE     95,584       94,554       93,056  
INCOME BEFORE INCOME TAXES     47,961       45,301       46,630  
Provision for income taxes     14,189       13,767       13,818  
NET INCOME   $ 33,772     $ 31,534     $ 32,812  
OTHER COMPREHENSIVE INCOME                        
Change in unrealized gains/losses on securities, net of reclassifications and taxes   $ 13,913     $ (17,066 )   $ 691  
Change in funded status of post-retirement benefits, net of taxes   $ (14,473 )   $ 10,569     $ 2,331  
COMPREHENSIVE INCOME   $ 33,212     $ 25,037     $ 35,834  
EARNINGS PER SHARE:                        
BASIC AND DILUTED   $ 2.55     $ 2.37     $ 2.48  
Weighted average number of shares outstanding (in thousands)     13,226       13,310       13,240  
                         
                         

Contact Information

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