SOURCE: First Financial Corporation

First Financial Corporation

July 28, 2015 10:12 ET

First Financial Corporation Reports 2nd Quarter Results

TERRE HAUTE, IN--(Marketwired - Jul 28, 2015) - First Financial Corporation (NASDAQ: THFF) today announced results for the second quarter of 2015. Net income was $6.9 million compared to $8.5 million for the same period of 2014. The variance in income was primarily driven by negative provisioning in 2014 and higher pension expense partially due to increased benefit plan cost from the use of a lower discount rate and the use of the new RP-2014 Mortality Table. Diluted net income per common share decreased to $0.54 from $0.63 for the comparable period of 2014.

The Corporation further reported net income of $14.7 million for the six months ended June 30, 2015 versus $16.3 million for the comparable period of 2014. Diluted net income per common share was $1.14 for the six months ended June 30, 2015 versus $1.22 for the comparable period of 2014. Return on assets for the six months ended June 30, 2015 was 0.98% compared to 1.08% for the six months ended June 30, 2014.

Book value per share was $31.09 at June 30, 2015, a 2.35% increase from the $30.38 at June 30, 2014. Shareholders' equity was $399.1 million compared to $405.7 million on June 30, 2014 due in part to an $11.4 million increase in the unrealized pension expense as a result of the factors discussed above as well as the increased amount of treasury shares as a result of the stock repurchase plan.

On August 25, 2014 the Corporation announced a stock repurchase plan to acquire 5% of the Corporation's outstanding common stock. During the second quarter of 2015 the Corporation repurchased 118,053 shares as part of the repurchase plan, bringing the total shares repurchased to date to 563,193.

Average total loans for the second quarter of 2015 were $1.77 billion, a decrease of $19.5 million versus the $1.79 billion for the comparable period in 2014. At June 30, 2015, total loans outstanding were $1.78 billion, a decrease from $1.79 billion at of June 30, 2014. On a linked quarter basis, average total loans increased $8.2 million, or .47%, from $1.76 billion for the quarter ending March 31, 2015.

Average total deposits for the quarter ended June 30, 2015 were $2.46 billion versus $2.48 billion as of June 30, 2014. Higher cost time deposits decreased to $451.4 million from $540 million for the same period of 2014. Lower cost demand and savings deposits increased to $2.0 billion from $1.9 billion for the same period of 2014. The cost of funds for deposits was .21% versus .26% for the same period of 2014.

The company's tangible common equity to tangible asset ratio was 12.15% at June 30, 2015, compared to 12.10% at June 30, 2014.

Net interest income for the second quarter of 2015 was $25.9 million compared to the $26.6 million reported for the same period of 2014. The net interest margin for the six months ended June 30, 2015 was 4.00% compared to the 4.09% reported at June 30, 2014. The net interest margin has been impacted by the effects of the continued low interest rate environment on loans and investments.

The provision for loan losses for the three months ended June 30, 2015 was $1.15 million compared to a negative $356 thousand provision for the second quarter of 2014. Net charge-offs were $640 thousand for the second quarter of 2015 compared to $2.03 million in the same period of 2014. The Corporation's allowance for loan losses as of June 30, 2015 was $19.9 million compared to $18.3 million as of June 30, 2014. The allowance for loan losses as a percent of total loans was 1.11% as of June 30, 2015 compared to 1.02% as of June 30, 2014.

Nonperforming loans decreased 8.49% to $35.8 million as of June 30, 2015 versus $39.1 million as of June 30, 2014. The ratio of nonperforming loans to total loans and leases was 2.01% as of June 30, 2015 versus 2.18% as of June 30, 2014.

Non-interest income for the three months ended June 30, 2015 was $9.8 million compared to $9.6 million in 2014, a 2.23% increase.

Non-interest expense for the three months ended June 30, 2015 increased $1.26 million to $25.3 million compared to $24.0 million in 2014. Employee benefits increased $1.22 million partially due to increased benefit plan cost from the use of a lower discount rate and the use of the new RP-2014 Mortality Table. The pension plan was frozen for the majority of employees as of December 31, 2012. The Corporation's efficiency ratio was 65.84% for the quarter ending June 30, 2015 versus 62.43% 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     Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2015   2015   2014     2015   2014
END OF PERIOD BALANCES                      
  Assets   $ 2,973,821   $ 2,995,836   $ 3,033,923     $ 2,973,821   $ 3,033,923
  Deposits   $ 2,398,574   $ 2,463,949   $ 2,433,083     $ 2,398,574   $ 2,433,083
  Loans   $ 1,783,788   $ 1,756,604   $ 1,792,662     $ 1,783,788   $ 1,792,662
  Allowance for Loan Losses   $ 19,861   $ 19,351   $ 18,255     $ 19,861   $ 18,255
  Total Equity   $ 399,058   $ 409,027   $ 405,746     $ 399,058   $ 405,746
  Tangible Common Equity   $ 355,997   $ 365,853   $ 361,869     $ 355,997   $ 361,869
                                 
AVERAGE BALANCES                                
  Total Assets   $ 2,990,020   $ 2,988,154   $ 3,016,643     $ 2,989,087   $ 3,023,966
  Earning Assets   $ 2,760,188   $ 2,748,730   $ 2,791,787     $ 2,754,459   $ 2,793,309
  Investments   $ 977,537   $ 969,315   $ 997,719     $ 973,426   $ 995,310
  Loans   $ 1,768,758   $ 1,760,524   $ 1,788,260     $ 1,764,641   $ 1,785,549
  Total Deposits   $ 2,462,284   $ 2,461,400   $ 2,480,304     $ 2,461,842   $ 2,486,237
  Interest-Bearing Deposits   $ 1,915,213   $ 1,917,509   $ 1,959,944     $ 1,916,361   $ 1,967,016
  Interest-Bearing Liabilities   $ 43,413   $ 44,789   $ 78,317     $ 44,101   $ 84,737
  Total Equity   $ 407,387   $ 401,423   $ 404,755     $ 404,405   $ 400,607
                                 
INCOME STATEMENT DATA                                
  Net Interest Income   $ 25,924   $ 25,995   $ 26,606     $ 51,919   $ 53,748
  Net Interest Income Fully Tax Equivalent   $ 27,491   $ 27,559   $ 28,152     $ 55,050   $ 56,817
  Provision for Loan Losses   $ 1,150   $ 1,450   $ (356 )   $ 2,600   $ 1,604
  Non-interest Income   $ 9,778   $ 10,061   $ 9,565     $ 19,839   $ 19,676
  Non-interest Expense   $ 25,310   $ 23,993   $ 24,049     $ 49,303   $ 47,754
  Net Income   $ 6,923   $ 7,761   $ 8,488     $ 14,684   $ 16,319
                                 
PER SHARE DATA                                
  Basic and Diluted Net Income Per Common Share   $ 0.54   $ 0.60   $ 0.63     $ 1.14   $ 1.22
  Cash Dividends Declared Per Common Share   $ 0.49   $ --   $ 0.49     $ 0.49   $ 0.49
  Book Value Per Common Share   $ 31.09   $ 31.58   $ 30.38     $ 31.09   $ 30.38
  Tangible Book Value Per Common Share   $ 28.23   $ 28.27   $ 26.62     $ 27.74   $ 27.10
  Basic Weighted Average Common Shares Outstanding     12,903     12,948     13,355       12,925     13,352
                                   
                                   
                                   
Key Ratios   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
    2015     2015     2014     2015     2014  
Return on average assets   0.93 %   1.04 %   1.13 %   0.98 %   1.08 %
Return on average common shareholder's equity   6.80 %   7.73 %   8.39 %   7.26 %   8.15 %
Efficiency ratio   67.91 %   63.78 %   63.76 %   65.84 %   62.43 %
Average equity to average assets   13.62 %   13.43 %   13.42 %   13.53 %   13.25 %
Net interest margin   3.99 %   4.01 %   4.08 %   4.00 %   4.09 %
Net charge-offs to average loans and leases   0.14 %   0.21 %   0.30 %   0.18 %   0.30 %
Loan and lease loss reserve to loans and leases   1.11 %   1.10 %   1.02 %   1.11 %   1.02 %
Loan and lease loss reserve to nonperforming loans and other real estate   55.45 %   56.31 %   46.64 %   55.45 %   46.64 %
Nonperforming loans to loans   2.01 %   1.96 %   2.18 %   2.01 %   2.18 %
Tier 1 leverage   12.62 %   12.74 %   16.75 %   12.62 %   16.75 %
Risk-based capital - Tier 1   17.30 %   17.66 %   17.58 %   17.30 %   17.58 %
         
         
         
Asset Quality   Three Months Ended   Six Months Ended
    June 30,   March 31,   June 30,   June 30,   June 30,
    2015   2015   2014   2015   2014
Accruing loans and leases past due 30-89 days   $ 5,193   $ 7,159   $ 8,511   $ 5,193   $ 8,511
Accruing loans and leases past due 90 days or more   $ 690   $ 640   $ 824   $ 690   $ 824
Nonaccrual loans and leases   $ 16,553   $ 14,868   $ 18,406   $ 16,553   $ 18,406
Nonperforming loans and other real estate   $ 35,819   $ 34,366   $ 39,141   $ 35,819   $ 39,141
Other real estate owned   $ 3,625   $ 3,830   $ 5,190   $ 3,625   $ 5,190
Total nonperforming assets   $ 50,630   $ 49,617   $ 53,395   $ 50,630   $ 53,395
Total troubled debt restructurings   $ 14,951   $ 15,028   $ 14,721   $ 14,951   $ 14,721
Gross charge-offs   $ 1,823   $ 1,823   $ 4,486   $ 3,302   $ 4,486
Recoveries   $ 885   $ 885   $ 1,768   $ 1,724   $ 1,768
Net charge-offs/(recoveries)   $ 938   $ 938   $ 2,718   $ 1,578   $ 2,718
   
   
   
CONSOLIDATED BALANCE SHEETS  
(Dollar amounts in thousands, except per share data)  
   
    June 30,
 2015
    December 31,
 2014
 
    (unaudited)  
ASSETS            
Cash and due from banks   $ 60,613     $ 78,102  
Federal funds sold     2,000       8,000  
Securities available-for-sale     901,550       897,053  
Loans:                
Commercial     1,068,832       1,044,522  
Residential     445,107       469,172  
Consumer     267,884       266,656  
      1,781,823       1,780,350  
(Less) plus:                
Net deferred loan costs     1,965       1,078  
Allowance for loan losses     (19,861 )     (18,839 )
      1,763,927       1,762,589  
Restricted stock     10,828       16,404  
Accrued interest receivable     11,116       11,593  
Premises and equipment, net     50,348       51,802  
Bank-owned life insurance     81,568       80,730  
Goodwill     39,489       39,489  
Other intangible assets     3,572       3,901  
Other real estate owned     3,625       3,965  
Other assets     45,185       48,857  
TOTAL ASSETS   $ 2,973,821     $ 3,002,485  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
Non-interest-bearing   $ 525,851     $ 556,389  
Interest-bearing:                
Certificates of deposit exceeding the FDIC insurance limits     48,893       53,733  
Other interest-bearing deposits     1,823,830       1,847,075  
      2,398,574       2,457,197  
Short-term borrowings     84,819       48,015  
FHLB advances     10,738       12,886  
Other liabilities     80,632       90,173  
TOTAL LIABILITIES     2,574,763       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-12,834,116 in 2015 and 12,942,175 in 2014     1,816       1,815  
Additional paid-in capital     72,746       72,405  
Retained earnings     386,363       377,970  
Accumulated other comprehensive loss     (14,048 )     (14,529 )
Less: Treasury shares at cost-1,723,699 in 2015 and 1,595,957 in 2014     (47,819 )     (43,447 )
TOTAL SHAREHOLDERS' EQUITY     399,058       394,214  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,973,821     $ 3,002,485  
   
   
   
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME  
(Dollar amounts in thousands, except per share data)  
   
    Three Months Ended
 June 30,
    Six Months Ended
 June 30,
 
    2015     2014     2015     2014  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
INTEREST INCOME:                                
Loans, including related fees   $ 20,763     $ 21,625     $ 41,570     $ 43,843  
Securities:                                
Taxable     3,991       4,298       8,052       8,742  
Tax-exempt     1,790       1,766       3,569       3,512  
Other     433       426       864       842  
TOTAL INTEREST INCOME     26,977       28,115       54,055       56,939  
INTEREST EXPENSE:                                
Deposits     997       1,233       2,017       2,523  
Short-term borrowings     19       22       32       36  
Other borrowings     37       254       87       632  
TOTAL INTEREST EXPENSE     1,053       1,509       2,136       3,191  
NET INTEREST INCOME     25,924       26,606       51,919       53,748  
Provision for loan losses     1,150       (356 )     2,600       1,604  
NET INTEREST INCOME AFTER PROVISION                                
FOR LOAN LOSSES     24,774       26,962       49,319       52,144  
NON-INTEREST INCOME:                                
Trust and financial services     1,253       1,414       2,745       2,903  
Service charges and fees on deposit accounts     2,543       2,761       4,869       5,245  
Other service charges and fees     3,000       2,989       5,838       5,828  
Securities gains/(losses), net     10       (1 )     14       (1 )
Insurance commissions     1,956       1,852       3,509       3,765  
Gain on sales of mortgage loans     542       457       901       833  
Other     474       93       1,963       1,103  
TOTAL NON-INTEREST INCOME     9,778       9,565       19,839       19,676  
NON-INTEREST EXPENSE:                                
Salaries and employee benefits     15,084       13,887       30,142       27,983  
Occupancy expense     1,702       1,789       3,566       3,714  
Equipment expense     1,702       1,904       3,474       3,562  
FDIC Expense     450       473       880       960  
Other     6,372       5,996       11,241       11,535  
TOTAL NON-INTEREST EXPENSE     25,310       24,049       49,303       47,754  
INCOME BEFORE INCOME TAXES     9,242       12,478       19,855       24,066  
Provision for income taxes     2,319       3,990       5,171       7,747  
NET INCOME     6,923       8,488       14,684       16,319  
OTHER COMPREHENSIVE INCOME                                
Change in unrealized gains/losses on securities, net of reclassifications and taxes     (7,564 )     4,116       (2,802 )     9,419  
Change in funded status of post retirement benefits, net of taxes     819       115       3,283       230  
COMPREHENSIVE INCOME   $ 178     $ 12,719     $ 15,165     $ 25,968  
PER SHARE DATA                                
Basic and Diluted Earnings per Share   $ 0.54     $ 0.63     $ 1.14     $ 1.22  
Weighted average number of shares outstanding (in thousands)     12,903       13,355       12,925       13,352  

Contact Information

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