SOURCE: First Financial Corp.

First Financial Corp.

February 07, 2017 10:30 ET

First Financial Corporation reports 2016 results

TERRE HAUTE, IN--(Marketwired - February 07, 2017) - First Financial Corporation (NASDAQ: THFF) today announced results for the fourth quarter of 2016. Net income increased 17.29% to $8.3 million compared to $7.1 million for the same period of 2015. Diluted net income per common share increased 21.43% to $0.68 from $0.56 for the comparable period of 2015.

The Corporation further reported net income of $38.4 million for the twelve months ended December 31, 2016 versus $30.2 million for the comparable period of 2015, an increase of 27.21%. Diluted net income per common share also increased 32.77% to $3.12 for the twelve months ended December 31, 2016 versus $2.35 for the comparable period of 2015. This increase included an after-tax gain on the sale of the Corporation's insurance subsidiary of $5.8 million. Return on assets for the twelve months ended December 31, 2016 was 1.30% compared to 1.01% for the twelve months ended December 31, 2015.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our 2016 results. Net income was the highest in the history of the company and we had another solid quarter of loan growth."

Book value per share was $33.92 at December 31, 2016, a 5.32% increase from the $32.21 at December 31, 2015. Shareholders' equity increased to $414.4 million on December 31, 2016 from $410.3 million on December 31, 2015.

On February 3, 2016 the Corporation announced a stock repurchase plan to acquire 5% of the Corporation's outstanding common stock. The Corporation has repurchased a total of 565,618 shares under the plan.

Average total loans for the fourth quarter of 2016 were $1.83 billion, an increase of $81.0 million or 4.63%, versus the $1.75 billion for the comparable period in 2015. Total loans outstanding were $1.84 billion as of December 31, 2016, an increase from $1.76 billion as of December 31, 2015. On a linked quarter basis, average total loans increased $29.8 million for the quarter ended December 31, 2016, or 1.66%, from $1.80 billion for the quarter ending September 30, 2016.

Average total deposits for the quarter ended December 31, 2016 were $2.46 billion versus $2.44 billion for the quarter ended December 31, 2015. On a linked quarter basis, average deposits increased $64.65 million for the quarter ended December 31, 2016 from the $2.40 billion for the quarter ending September 30, 2016.

The company's tangible common equity to tangible asset ratio was 12.80% at December 31, 2016, compared to 12.51% at December 31, 2015.

Net interest income for the fourth quarter of 2016 was $26.4 million compared to the $26.0 million reported for the same period of 2015. The net interest margin for the twelve months ended December 31, 2016 was unchanged at 4.04% compared to December 31, 2015.

The provision for loan losses for the three months ended December 31, 2016 was $939 thousand compared to $1.05 million for the fourth quarter of 2015. Net charge-offs were $1.2 million for the fourth quarter of 2016 compared to $1.0 million in the same period of 2015. The Corporation's allowance for loan losses as of December 31, 2016 was $18.8 million compared to $19.9 million as of December 31, 2015. The allowance for loan losses as a percent of total loans was 1.02% as of December 31, 2016 compared to 1.13% as of December 31, 2015.

Nonperforming loans decreased 10.96% to $22.7 million as of December 31, 2016 versus $25.5 million as of December 31, 2015. The ratio of nonperforming loans to total loans and leases was 1.42% as of December 31, 2016 versus 1.44% as of December 31, 2015.

Non-interest income for the three months ended December 31, 2016 was $8.4 compared to $9.4 million as of December 31, 2015. The decline was primarily related to the sale of the Corporation's insurance subsidiary, which reduced insurance commissions by $1.7 million quarter-over-quarter.

Non-interest expense for the three months ended December 31, 2016 decreased $2.8 million to $22.2 million compared to $24.9 million in 2015. On a quarter-over-quarter basis, salaries and employee benefits decreased $1.9 million driven by lower health insurance and pension expense. The Corporation's efficiency ratio was 57.13% for the year ending December 31, 2016 versus 65.63% for the same period in 2015.

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  Year Ended
   December 31,  September 30,  December 31,  December 31,  December 31,
   2016  2016  2015  2016  2015
END OF PERIOD BALANCES                    
 Assets  $ 2,988,527  $ 3,019,323  $ 2,979,585  $ 2,988,527  $ 2,979,585
 Deposits  $ 2,428,526  $ 2,479,241  $ 2,442,369  $ 2,428,526  $ 2,442,369
 Loans  $ 1,839,180  $ 1,821,525  $ 1,763,808  $ 1,839,180  $ 1,763,808
 Allowance for Loan Losses  $ 18,773  $ 19,074  $ 19,946  $ 18,773  $ 19,946
 Total Equity  $ 414,395  $ 422,374  $ 410,316  $ 414,395  $ 410,316
 Tangible Common Equity  $ 377,931  $ 385,766  $ 367,649  $ 377,931  $ 367,649
                     
AVERAGE BALANCES                    
 Total Assets  $ 2,970,031  $ 2,977,329  $ 2,974,567  $ 2,963,380  $ 2,976,931
 Earning Assets  $ 2,778,369  $ 2,742,151  $ 2,735,328  $ 2,748,165  $ 2,744,469
 Investments  $ 923,957  $ 936,059  $ 950,245  $ 940,490  $ 964,309
 Loans  $ 1,830,628  $ 1,800,796  $ 1,749,261  $ 1,792,609  $ 1,761,888
 Total Deposits  $ 2,464,246  $ 2,399,596  $ 2,443,478  $ 2,426,203  $ 2,446,331
 Interest-Bearing Deposits  $ 1,895,665  $ 1,855,077  $ 1,889,350  $ 1,875,226  $ 1,901,623
 Interest-Bearing Borrowings  $ 35,531  $ 59,815  $ 41,269  $ 46,556  $ 47,107
 Total Equity  $ 405,261  $ 433,511  $ 408,730  $ 415,032  $ 404,845
                     
INCOME STATEMENT DATA                    
 Net Interest Income  $ 26,406  $ 26,351  $ 26,012  $ 104,973  $ 104,507
 Net Interest Income Fully Tax Equivalent  $ 27,956  $ 27,907  $ 27,561  $ 111,156  $ 110,744
 Provision for Loan Losses  $ 939  $ 1,091  $ 1,050  $ 3,300  $ 4,700
 Non-interest Income  $ 8,428  $ 7,923  $ 9,389  $ 46,931  $ 39,179
 Non-interest Expense  $ 22,195  $ 22,006  $ 24,943  $ 90,308  $ 98,398
 Net Income  $ 8,344  $ 8,162  $ 7,114  $ 38,413  $ 30,196
                     
PER SHARE DATA                    
 Basic and Diluted Net Income Per Common Share  $ 0.68  $ 0.68  $ 0.56  $ 3.12  $ 2.35
 Cash Dividends Declared Per Common Share  $ 0.50  $ 0.50  $ 0.49  $ 0.50  $ 0.98
 Book Value Per Common Share  $ 33.92  $ 33.89  $ 32.21  $ 33.92  $ 32.21
 Tangible Book Value Per Common Share  $ 30.94  $ 30.88  $ 28.86  $ 30.94  $ 28.86
 Basic Weighted Average Common Shares Outstanding   12,201   12,236   12,722   12,317   12,836
                 
     
Key Ratios  Three Months Ended  Year Ended
   December 31,  September 30,  December 31,  December 31,  December 31,
   2016  2016  2015  2016  2015
Return on average assets  1.12 %  1.10 %  0.96 %  1.30 %  1.01 %
Return on average common shareholder's equity  8.24 %  7.23 %  6.96 %  9.26 %  7.46 %
Efficiency ratio  61.00 %  61.42 %  67.51 %  57.13 %  65.63 %
Average equity to average assets  13.65 %  14.56 %  13.74 %  14.01 %  13.60 %
Net interest margin  4.01 %  4.05 %  4.04 %  4.04 %  4.04 %
Net charge-offs to average loans and leases  0.27 %  0.34 %  0.20 %  0.25 %  0.14 %
Loan and lease loss reserve to loans and leases  1.02 %  1.05 %  1.13 %  1.02 %  1.13 %
Loan and lease loss reserve to nonperforming loans and other real estate  74.50 %  65.69 %  68.96 %  74.50 %  68.96 %
Nonperforming loans to loans  1.43 %  1.61 %  1.46 %  1.43 %  1.46 %
Tier 1 leverage  13.39 %  13.23 %  12.92 %  13.39 %  12.92 %
Risk-based capital - Tier 1  17.43 %  17.46 %  17.69 %  17.43 %  17.69 %
                
     
Asset Quality  Three Months Ended  Year Ended
   December 31,  September 30,  December 31,  December 31,  December 31,
   2016  2016  2015  2016  2015
Accruing loans and leases past due 30-89 days  $ 10,757  $ 6,983  $ 12,294  $ 10,757  $ 12,294
Accruing loans and leases past due 90 days or more  $ 610  $ 1,144  $ 964  $ 610  $ 964
Nonaccrual loans and leases  $ 13,492  $ 16,235  $ 14,634  $ 13,492  $ 14,634
Nonperforming loans and other real estate  $ 25,198  $ 29,037  $ 28,924  $ 25,198  $ 28,924
Other real estate owned  $ 2,531  $ 2,772  $ 3,466  $ 2,531  $ 3,466
Total nonperforming assets  $ 37,567  $ 40,548  $ 43,799  $ 37,567  $ 43,799
Total troubled debt restructurings  $ 8,565  $ 8,886  $ 9,860  $ 8,565  $ 9,860
Gross charge-offs  $ 2,743  $ 2,724  $ 1,931  $ 8,949  $ 8,528
Recoveries  $ 1,500  $ 1,202  $ 902  $ 4,473  $ 4,935
Net charge-offs/(recoveries)  $ 1,243  $ 1,522  $ 1,029  $ 4,476  $ 3,593
                
 
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
   December 31,
 2016
  December 31,
 2015
 
   (unaudited)  
ASSETS           
Cash and due from banks  $75,012   $88,695  
Federal funds sold   6,952    9,815  
Securities available-for-sale   853,725    891,082  
Loans:           
Commercial   1,106,182    1,043,980  
Residential   423,911    444,447  
Consumer   305,881    272,896  
    1,835,974    1,761,323  
(Less) plus:           
Net deferred loan costs   3,206    2,485  
Allowance for loan losses   (18,773 )  (19,946 )
    1,820,407    1,743,862  
Restricted stock   10,359    10,838  
Accrued interest receivable   12,311    11,733  
Premises and equipment, net   49,240    50,531  
Bank-owned life insurance   83,737    82,323  
Goodwill   34,355    39,489  
Other intangible assets   2,109    3,178  
Other real estate owned   2,531    3,466  
Other assets   37,789    44,573  
TOTAL ASSETS  $2,988,527   $2,979,585  
            
LIABILITIES AND SHAREHOLDERS' EQUITY           
Deposits:           
Non-interest-bearing  $564,092   $563,302  
Interest-bearing:           
Certificates of deposit exceeding the FDIC insurance limits   43,759    46,753  
Other interest-bearing deposits   1,820,675    1,832,314  
    2,428,526    2,442,369  
Short-term borrowings   80,989    33,831  
FHLB advances   132    12,677  
Other liabilities   64,485    80,392  
TOTAL LIABILITIES   2,574,132    2,569,269  
            
Shareholders' equity           
Common stock, $.125 stated value per share;           
Authorized shares-40,000,000           
Issued shares-14,578,758 in 2016 and 14,557,815 in 2015           
Outstanding shares-12,185,737 in 2016 and 12,740,018 in 2015   1,820    1,817  
Additional paid-in capital   74,525    73,396  
Retained earnings   421,826    395,633  
Accumulated other comprehensive loss   (14,164 )  (9,401 )
Less: Treasury shares at cost-2,393,021 in 2016 and 1,817,797 in 2015   (69,612 )  (51,129 )
TOTAL SHAREHOLDERS' EQUITY   414,395    410,316  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $2,988,527   $2,979,585  
         
 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
   Years Ended December 31,  
   2016   2015   2014  
   (unaudited)  
INTEREST INCOME:                
Loans, including related fees  $86,128   $84,022   $87,530  
Securities:                
Taxable   14,506    15,815    17,015  
Tax-exempt   7,269    7,194    7,084  
Other   1,477    1,645    1,729  
TOTAL INTEREST INCOME   109,380    108,676    113,358  
INTEREST EXPENSE:                
Deposits   4,159    3,934    4,624  
Short-term borrowings   134    70    99  
Other borrowings   114    165    803  
TOTAL INTEREST EXPENSE   4,407    4,169    5,526  
NET INTEREST INCOME   104,973    104,507    107,832  
Provision for loan losses   3,300    4,700    5,072  
NET INTEREST INCOME AFTER PROVISION                
FOR LOAN LOSSES   101,673    99,807    102,760  
NON-INTEREST INCOME:                
Trust and financial services   5,208    5,586    5,860  
Service charges and fees on deposit accounts   10,530    10,145    10,772  
Other service charges and fees   12,307    11,798    11,697  
Securities gains/(losses), net   34    17    (3 )
Gain on sale of certain assets and liabilities of insurance brokerage   12,822    -    -  
Insurance commissions   2,346    6,945    7,646  
Gain on sales of mortgage loans   1,842    1,998    1,849  
Other   1,842    2,690    2,964  
TOTAL NON-INTEREST INCOME   46,931    39,179    40,785  
NON-INTEREST EXPENSE:                
Salaries and employee benefits   52,730    60,109    55,936  
Occupancy expense   6,865    6,978    7,218  
Equipment expense   7,300    6,991    7,269  
FDIC Expense   1,300    1,769    1,931  
Other   22,113    22,551    23,230  
TOTAL NON-INTEREST EXPENSE   90,308    98,398    95,584  
INCOME BEFORE INCOME TAXES   58,296    40,588    47,961  
Provision for income taxes   19,883    10,392    14,189  
NET INCOME   38,413    30,196    33,772  
OTHER COMPREHENSIVE INCOME                
Change in unrealized gains/losses on securities, net of reclassifications and taxes   (10,130 )  (1,225 )  13,913  
Change in funded status of post retirement benefits, net of taxes   5,367    6,353    (14,473 )
COMPREHENSIVE INCOME  $33,650   $35,324   $33,212  
PER SHARE DATA                
Basic and Diluted Earnings per Share  $3.12   $2.35   $2.55  
Weighted average number of shares outstanding (in thousands)   12,317    12,836    13,226  
             

Contact Information

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