SOURCE: First Financial Corp.

First Financial Corp.

February 08, 2016 10:30 ET

First Financial Corporation Reports 2015 Results

TERRE HAUTE, IN--(Marketwired - February 08, 2016) - First Financial Corporation (NASDAQ: THFF) today announced results for the fourth quarter of 2015 and the year ended December 31, 2015. Net income for the three months ending December 31, 2015 was $7.1 million compared to $9.2 million for the same period of 2014. The variance in income was, in part, driven by higher pension expense partially due to increased benefit plan cost from the use of a lower discount rate and the use of the updated mortality tables. Diluted net income per common share for the three month period ended December 31, 2015 was $0.56 compared to $0.71 for the comparable period of 2014.

The Corporation further reported net income of $30.2 million for the twelve months ended December 31, 2015 versus $33.8 million for the comparable period of 2014. The full year variance was also impacted by the pension expense discussed previously. Diluted net income per common share reported was $2.35 for the twelve months ended December 31, 2015 versus $2.55 for the comparable period of 2014. Return on assets for the twelve months ended December 31, 2015 was 1.01% compared to 1.12% for the twelve months ended December 31, 2014.

Book value per share was $32.21 at December 31, 2015, a 5.75% increase from the $30.46 at December 31, 2014. Shareholders' equity increased $16.1 million or 4.08% to $410.3 million from $394.2 million on December 31, 2014.

During 2015 the Corporation completed the announced stock repurchase plan to acquire 5% of the Corporation's outstanding common stock. Total shares repurchased under the plan were 667,700 valued at $21.6 million.

Average total loans for the fourth quarter of 2015 were $1.75 billion versus $1.80 billion for the comparable period in 2014 Total loans outstanding decreased $19.0 million from $1.78 billion as of December 31, 2014 to $1.76 billion as of December 31, 2015. On a linked quarter basis, average total loans decreased $19.7 million from $1.77 billion for the quarter ending September 30, 2015.

Average total deposits for the quarter ended December 31, 2015 were $2.44 billion versus $2.47 billion as of December 31, 2014. Non-interest bearing deposits, however, increased 4.87% while interest earning deposits decreased 1.48%. Higher cost time deposits decreased $95.6 million during 2015.

The company's tangible common equity to tangible asset ratio was 12.51% at December 31, 2015, compared to 11.86% at December 31, 2014, a 5.48% increase.

Net interest income for the fourth quarter of 2015 was $26.0 million compared to $26.9 million reported for the same period of 2014. The net interest margin for the quarter ended December 31, 2015 was 4.04% compared to 3.99% reported at December 31, 2014.

Asset quality remains strong with nonperforming loans and Oreo decreasing 16.3% to $28.9 million as of December 31, 2015 versus $34.5 million as of December 31, 2014. The ratio of nonperforming loans to total loans and leases also decreased to 1.64% as of December 31, 2015 versus 1.94% as of December 31, 2014.

The provision for loan losses for the three months ended December 31, 2015 was $1.1 million compared to the $2.0 million provision for the fourth quarter of 2014. Net charge-offs were $1.0 million for the fourth quarter of 2015 compared to $618 thousand in the same period of 2014. The Corporation's allowance for loan losses as of December 31, 2015 was $19.9 million compared to $18.8 million as of December 31, 2014. The allowance for loan losses as a percent of total loans was 1.13% as of December 31, 2015 compared to 1.06% as of December 31, 2014.

Non-interest income for the three months ended December 31, 2015 was $9.4 compared to $10.6 million in 2014. Non-interest income for the years ended December 31, 2015 and 2014 was $39.2 and $40.8 million, respectively. Increased income from interchange income and sale of mortgages effectively offset the reduced investment service income and income from the Corporation's insurance agency for 2015.

Non-interest expense for the three months ended December 31, 2015 increased $1.8 million to $24.9 million compared to $23.1 million in 2014. On a linked quarter basis, non-interest expense increased $791 thousand from $24.2 million for the quarter ended September 30, 2015. On a year-over-year basis, employee benefits increased $4.3 million due to the lower discount rate and the use of the updated mortality table previously discussed. The pension plan was frozen for the majority of employees as of December 31, 2012. Occupancy expenses decreased $240 thousand and equipment expense decreased $278 thousand for the year ended 2015. The Corporation's efficiency ratio was 67.51% for the quarter ending December 31, 2015 versus 59.11% for the same period in 2014.

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,
   2015  2015  2014   2015   2014
END OF PERIOD BALANCES                    
  Assets $ 2,979,585 $ 2,942,833 $ 3,002,485 $ 2,979,585 $ 3,002,485
  Deposits   2,442,369   2,418,589   2,457,197   2,442,369   2,457,197
  Loans   1,763,808   1,766,667   1,781,428   1,763,808   1,781,428
  Allowance for Loan Losses   19,946   19,925   18,839   19.946   18,839
  Total Equity   410,316   408,591   394,214   410,316   394,214
  Tangible Common Equity   367,649   365,727   350,824   367,649   350,824
 
AVERAGE BALANCES                    
  Total Assets   2,974,567   2,954,983   3,027,478   2,976,931   3,020,068
  Earning Assets   2,735,328   2,733,630   2,792,506   2,744,469   2,793,424
  Investments   950,245   960,139   992,441   964,309   998,189
  Loans   1,749,261   1,769,009   1,800,065   1,761,888   1,795,235
  Total Deposits   2,443,478   2,418,162   2,469,170   2,446,331   2,461,253
  Interest-Bearing Deposits   1,889,350   1,884,420   1,917,728   1,901,623   1,934,597
  Interest-Bearing Borrowings   41,269   58,957   83,577   47,107   100,512
  Total Equity   408,730   401,840   412,296   404,845   403,413
 
INCOME STATEMENT DATA                    
  Net Interest Income   26,012   26,576   26,939   104,507   107,832
  Net Interest Income Fully Tax Equivalent   27,561   28,134   28,504   110,744   114,039
  Provision for Loan Losses   1,050   1,050   1,962   4,700   5,072
  Non-interest Income   9,389   9,951   10,615   39,179   40,785
  Non-interest Expense   24,943   24,152   23,125   98,398   95,584
  Net Income   7,114   8,398   9,181   30,196   33,772
 
PER SHARE DATA                    
  Basic and Diluted Net Income Per Common Share   0.56   0.65   0.71   2.35   2.55
  Cash Dividends Declared Per Common Share   0.49   -   0.49   0.98   0.98
  Book Value Per Common Share   32.21   32.16   30.46   32.21   30.46
  Tangible Book Value Per Common Share   28.86   28.79   27.11   28.86   27.11
  Basic Weighted Average Common Shares Outstanding   12,722   12,773   12,932   12,836   13,226
                       
Key Ratios Three Months Ended Year Ended
  December 31, September 30, December 31, December 31,
  2015 2015 2014 2015 2014
Return on average assets 96 % 1.14 % 1.21 % 1.01 % 1.12 %
Return on average common shareholder's equity 6.96 % 8.36 % 8.91 % 7.46 % 8.37 %
Efficiency ratio 67.51 % 63.42 % 59.11 % 65.63 % 61.74 %
Average equity to average assets 13.74 % 13.6 % 13.62 % 13.6 % 13.36 %
Net interest margin 4.04 % 4.12 % 3.99 % 4.04 % 4.08 %
Net charge-offs to average loans and leases 0.20 % 0.22 % 0.14 % 0.14 % 0.31 %
Loan and lease loss reserve to loans and leases 1.13 % 1.13 % 1.06 % 1.13 % 1.06 %
Loan and lease loss reserve to nonperforming loans 0.78 % 0.72 % 0.06 % 0.78 % 0.60 %
Nonperforming loans to loans 1.46 % 1.75 % 1.76 % 1.44 % 1.76 %
Tier 1 leverage 12.92 % 12.92 % 12.33 % 12.92 % 12.33 %
Risk-based capital - Tier 1 17.69 % 17.30 % 16.99 % 17.69 % 16.99 %
                     
 
Asset Quality Three Months Ended Year Ended
  December 31, September 30, December 31, December 31,
  2015 2015   2014 2015 2014
Accruing loans and leases past due 30-89 days $ 12,294 $ 6,778 $ 13,444 $ 12,294 $ 13,444
Accruing loans and leases past due 90 days or more $ 964 $ 1,632 $ 780 $ 964 $ 780
Nonaccrual loans and leases $ 14,634 $ 16,112 $ 15,034 $ 14,634 $ 15,034
Nonperforming loans $ 25,458 $ 30,954 $ 30,572 $ 25,458 $ 30,572
Other real estate owned $ 3,466 $ 3,382 $ 3,965 $ 3,466 $ 3,965
Total nonperforming assets $ 43,799 $ 46,072 $ 49,639 $ 43,799 $ 49,639
Total troubled debt restructurings $ 9,860 $ 9,828 $ 14,758 $ 9,860 $ 14,758
Gross charge-offs $ 1,931 $ 3,295 $ 2,308 $ 8,528 $ 9,450
Recoveries $ 902 $ 2,309 $ 1,690 $ 4,935 $ 3,836
Net charge-offs/(recoveries) $ 1,029 $ 986 $ 618 $ 3,593 $ 5,614
                     

CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
    December 31,
(Dollar amounts in thousands, except per share data)   2015     2014  
    (unaudited)          
ASSETS                
Cash and due from banks   $ 88,695     $ 78,102  
Federal funds sold     9,815       8,000  
Securities available-for-sale     891,082       897,053  
Loans, net of allowance of $19,946 in 2015 and $18,839 in 2014     1,743,862       1,762,589  
Restricted stock     10,838       16,404  
Accrued interest receivable     11,733       11,593  
Premises and equipment, net     50,531       51,802  
Bank-owned life insurance     82,323       80,730  
Goodwill     39,489       39,489  
Other intangible assets     3,178       3,901  
Other real estate owned     3,466       3,965  
Other assets     44,573       48,857  
TOTAL ASSETS   $ 2,979,585     $ 3,002,485  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
Non-interest-bearing   $ 563,302     $ 556,389  
Interest-bearing:                
Certificates of deposit of $100 or more     46,753       53,733  
Other interest-bearing deposits     1,832,314       1,847,075  
      2,442,369       2,457,197  
Short-term borrowings     33,831       48,015  
Other borrowings     12,677       12,886  
Other liabilities     80,392       90,173  
TOTAL LIABILITIES     2,569,269       2,608,271  
Shareholders' equity                
Common stock, $.125 stated value per share;                
Authorized shares-40,000,000                
Issued shares-14,557,815 in 2015 and 14,538,132 in 2014                
Outstanding shares-12,740,018 in 2015 and 12,942,175 in 2014     1,817       1,815  
Additional paid-in capital     73,396       72,405  
Retained earnings     395,633       377,970  
Accumulated other comprehensive income (loss)     (9,401 )     (14,529 )
Less: Treasury shares at cost-1,817,797 in 2015 and 1,595,957 in 2014     (51,129 )     (43,447 )
TOTAL SHAREHOLDERS' EQUITY     410,316       394,214  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,979,585     $ 3,002,485  
                 
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)   2015   2014   2013  
    (unaudited)              
INTEREST AND DIVIDEND INCOME:                    
Loans, including related fees   $ 84,022   $ 87,530   $ 91,242  
Securities:                    
Taxable     15,815     17,015     16,157  
Tax-exempt     7,194     7,084     7,046  
Other     1,645     1,729     1,776  
TOTAL INTEREST AND DIVIDEND INCOME     108,676     113,358     116,221  
INTEREST EXPENSE:                    
Deposits     3,934     4,624     5,886  
Short-term borrowings     70     99     78  
Other borrowings     165     803     2,997  
TOTAL INTEREST EXPENSE     4,169     5,526     8,961  
NET INTEREST INCOME     104,507     107,832     107,260  
Net provision for loan losses     4,700     5,072     7,860  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     99,807     102,760     99,400  
NON-INTEREST INCOME:                    
Trust and financial services     5,586     5,860     6,035  
Service charges and fees on deposit accounts     10,145     10,772     10,162  
Other service charges and fees     11,798     11,697     11,081  
Securities gain, net     17     (3 )   423  
Insurance commissions     6,945     7,646     7,750  
Gain on sale of mortgage loans     1,998     1,849     3,052  
Other     2,690     2,964     1,952  
TOTAL NON-INTEREST INCOME     39,179     40,785     40,455  
NON-INTEREST EXPENSES:                    
Salaries and employee benefits     60,109     55,936     55,097  
Occupancy expense     6,978     7,218     6,102  
Equipment expense     6,991     7,269     6,348  
Federal Deposit Insurance     1,769     1,931     2,052  
Other     22,551     23,230     24,955  
TOTAL NON-INTEREST EXPENSE     98,398     95,584     94,554  
INCOME BEFORE INCOME TAXES     40,588     47,961     45,301  
Provision for income taxes     10,392     14,189     13,767  
NET INCOME   $ 30,196   $ 33,772   $ 31,534  
OTHER COMPREHENSIVE INCOME                    
Change in unrealized gains/losses on securities, net of reclassifications and taxes   $ (1,225 ) $ 13,913   $ (17,066 )
Change in funded status of post-retirement benefits, net of taxes   $ 6,353   $ (14,473 ) $ 10,569  
COMPREHENSIVE INCOME   $ 35,324   $ 33,212   $ 25,037  
EARNINGS PER SHARE:                    
BASIC AND DILUTED   $ 2.35   $ 2.55   $ 2.37  
Weighted average number of shares outstanding (in thousands)     12,836     13,226     13,310  

Contact Information

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