SOURCE: First Financial Corp.

First Financial Corp.

July 25, 2016 15:15 ET

First Financial Corporation Reports 2nd Quarter Results

TERRE HAUTE, IN --(Marketwired - July 25, 2016) - First Financial Corporation (NASDAQ: THFF) today announced results for the second quarter of 2016. Net income increased 18.9% to $8.2 million compared to $6.9 million for the same period of 2015. The increase was primarily driven by lower loan loss provisioning and lower benefits expense. Diluted net income per common share increased 25.9% to $0.68 from $0.54 for the comparable period of 2015.

The Corporation further reported net income of $21.9 million for the six months ended June 30, 2016 versus $14.7 million for the comparable period of 2015, an increase of 49.2%. Diluted net income per common share also increased 54.4% to $1.76 for the six months ended June 30, 2016 versus $1.14 for the comparable period of 2015. This increase included an after-tax gain on the sale of the Corporation's insurance subsidiary of $5.84 million during the first quarter of 2016. Return on assets for the six months ended June 30, 2016 was 1.48% compared to .98% for the six months ended June 30, 2015.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our second quarter 2016 results. We continue to see increases in our interest income, have lower credit costs, and increases in most areas of our non-interest income. It was a very well-rounded quarter."

Book value per share was $33.89 at June 30, 2016, a 9.0% increase from the $31.09 at June 30, 2016. Shareholders' equity increased 3.6% to $413.2 million from $399.1 million on June 30, 2015.

On February 3, 2016 the Corporation announced a stock repurchase plan to acquire 5% of the Corporation's outstanding common stock. During the second quarter of 2016 the corporation repurchased 72,174 shares as part of the repurchase plan, bringing the total shares repurchased to date to 558,174.

Average total loans for the second quarter of 2016 were $1.78 billion, an increase of $13.0 million or .7%, versus the $1.77 billion for the comparable period in 2015. Total loans outstanding were $1.80 billion, an increase from $1.78 billion as of June 30, 2015. On a linked quarter basis, average total loans increased $24.0 million, or 1.37%, from $1.76 billion for the quarter ending March 31, 2016.

Average total deposits for the quarter ended June 30, 2016 were $2.42 billion versus $2.46 billion as of June 30, 2015. On a linked quarter basis, average deposits increased $4 million to $2.42 billion for the quarter ending June 30, 2016.

The company's tangible common equity to tangible asset ratio was 12.89% at June 30, 2016, compared to 12.15% at June 30, 2015.

Net interest income for the second quarter of 2016 was $26.1 million compared to the $25.9 million reported for the same period of 2015. The net interest margin for the six months ended June 30, 2016 increased to 4.05% compared to the 4.00% reported at June 30, 2015.

The provision for loan losses for the three months ended June 30, 2016 was $435 thousand compared to $1.15 million for the second quarter of 2015. Net charge-offs were $856 thousand for the second quarter of 2016 compared to $938 thousand in the same period of 2015. The Corporation's allowance for loan losses as of June 30, 2016 was $19.5 million compared to $19.9 million as of June 30, 2015. The allowance for loan losses as a percent of total loans was 1.08% as of June 30, 2016 compared to 1.11% as of June 30, 2015.

Nonperforming loans decreased 23.1% to $27.6 million as of June 30, 2016 versus $35.8 million as of June 30, 2015. The ratio of nonperforming loans to total loans and leases was 1.53% as of June 30, 2016 versus 2.01% as of June 30, 2015.

Non-interest income for the three months ended June 30, 2016 was $8.2 million compared to $9.8 million as of June 30, 2015. The decline was primarily related to the sale of the Corporation's insurance subsidiary, which reduced insurance commissions by $1.9 million quarter-over-quarter.

Non-interest expense for the three months ended June 30, 2016 decreased $2.6 million to $22.8 million compared to $25.3 million in 2015. On a year-over-year basis, salaries and employee benefits decreased $3.4 million, driven by lower health insurance and pension expense. The Corporation's efficiency ratio was 53.69% for the six months ending June 30, 2016 versus 65.84% 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  Six Months Ended
   June 30,  March 31,  June 30,  June 30,  June 30,
   2016  2016  2015  2016  2015
END OF PERIOD BALANCES               
 Assets  $2,958,016  $2,939,240  $2,973,821  $2,958,016  $2,973,821
 Deposits  $2,394,334  $2,400,655  $2,398,574  $2,394,334  $2,398,574
 Loans  $1,802,810  $1,763,659  $1,783,788  $1,802,810  $1,783,788
 Allowance for Loan Losses  $19,504  $19,926  $19,861  $19,504  $19,861
 Total Equity  $413,224  $411,912  $399,058  $413,224  $399,058
 Tangible Common Equity  $376,472  $375,000  $355,997  $376,472  $355,997
                     
AVERAGE BALANCES                    
 Total Assets  $2,947,153  $2,959,007  $2,990,020  $2,953,080  $2,989,087
 Earning Assets  $2,747,214  $2,724,926  $2,760,188  $2,736,070  $2,754,459
 Investments  $945,948  $955,996  $977,537  $950,972  $973,426
 Loans  $1,781,201  $1,757,811  $1,768,758  $1,769,506  $1,764,641
 Total Deposits  $2,422,302  $2,418,668  $2,462,284  $2,420,485  $2,461,842
 Interest-Bearing Deposits  $1,877,092  $1,873,070  $1,915,213  $1,875,081  $1,916,361
 Interest-Bearing Liabilities  $44,852  $46,026  $43,413  $45,439  $44,101
 Total Equity  $406,382  $414,974  $407,387  $410,678  $404,405
                     
INCOME STATEMENT DATA                    
 Net Interest Income  $26,059  $26,157  $25,924  $52,216  $51,919
 Net Interest Income Fully Tax Equivalent  $27,602  $27,692  $27,491  $55,293  $55,050
 Provision for Loan Losses  $435  $835  $1,150  $1,270  $2,600
 Non-interest Income  $8,214  $21,484  $9,778  $30,580  $19,839
 Non-interest Expense  $22,760  $22,465  $25,310  $46,107  $49,303
 Net Income  $8,232  $13,675  $6,923  $21,907  $14,684
                     
PER SHARE DATA                    
 Basic and Diluted Net Income Per Common Share  $0.68  $1.08  $0.54  $1.76  $1.14
 Cash Dividends Declared Per Common Share  $0.50  $-  $0.49  $0.50  $0.49
 Book Value Per Common Share  $33.89  $33.58  $31.09  $33.89  $31.09
 Tangible Book Value Per Common Share  $30.88  $30.57  $28.23  $30.91  $27.74
 Basic Weighted Average Common Shares Outstanding   12,236   12,646   12,903   12,441   12,925
       
Key Ratios  Three Months Ended   Six Months Ended  
   June 30,   March 31,   June 30,   June 30,   June 30,  
   2016   2016   2015   2016   2015  
Return on average assets  1.12 % 1.85 % 0.93 % 1.48 % 0.98 %
Return on average common shareholder's equity  8.04 % 13.28 % 6.80 % 10.67 % 7.26 %
Efficiency ratio  63.55 % 45.68 % 67.91 % 53.69 % 65.84 %
Average equity to average assets  13.89 % 13.92 % 13.62 % 13.91 % 13.53 %
Net interest margin  4.04 % 4.06 % 3.99 % 4.05 % 4.00 %
Net charge-offs to average loans and leases  0.19 % 0.19 % 0.14 % 0.19 % 0.18 %
Loan and lease loss reserve to loans and leases  1.08 % 1.13 % 1.11 % 1.08 % 1.11 %
Loan and lease loss reserve to nonperforming loans and other real estate  70.76 % 84.38 % 55.45 % 70.76 % 55.45 %
Nonperforming loans to loans  1.53 % 1.50 % 2.01 % 1.53 % 2.01 %
Tier 1 leverage  13.08 % 13.05 % 12.62 % 13.08 % 12.62 %
Risk-based capital - Tier 1  17.46 % 17.81 % 17.30 % 17.46 % 17.30%
     
Asset Quality  Three Months Ended  Six Months Ended
   June 30,  March 31,  June 30,  March 31,  June 30,
   2016  2016  2015  2016  2015
Accruing loans and leases past due 30-89 days  $7,435  $7,292  $5,193  $7,435  $5,193
Accruing loans and leases past due 90 days or more  $1,044  $858  $690  $1,044  $690
Nonaccrual loans and leases  $14,526  $13,248  $16,553  $14,526  $16,553
Nonperforming loans  $27,562  $23,615  $35,819  $27,562  $35,819
Other real estate owned  $2,837  $2,850  $3,625  $2,837  $3,625
Total nonperforming assets  $38,998  $39,617  $50,630  $38,998  $50,630
Total troubled debt restructurings  $9,155  $9,509  $14,951  $9,155  $14,951
Gross charge-offs  $1,842  $1,640  $1,823  $3,482  $3,302
Recoveries  $986  $785  $885  $1,771  $1,724
Net charge-offs/(recoveries)  $856  $855  $938  $1,711  $1,578
 
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
   June 30,
 2016
  December 31,
 2015
 
  (unaudited)
ASSETS      
Cash and due from banks  $55,438   $88,695  
Federal funds sold   5,500    9,815  
Securities available-for-sale   876,538    891,082  
Loans:           
Commercial   1,082,461    1,043,980  
Residential   430,082    444,447  
Consumer   287,308    272,896  
    1,799,851    1,761,323  
(Less) plus:           
Net deferred loan costs   2,959    2,485  
Allowance for loan losses   (19,504 )  (19,946 )
    1,783,306    1,743,862  
Restricted stock   10,848    10,838  
Accrued interest receivable   10,869    11,733  
Premises and equipment, net   49,353    50,531  
Bank-owned life insurance   83,023    82,323  
Goodwill   34,355    39,489  
Other intangible assets   2,397    3,178  
Other real estate owned   2,837    3,466  
Other assets   43,552    44,573  
TOTAL ASSETS  $2,958,016   $2,979,585  
            
LIABILITIES AND SHAREHOLDERS' EQUITY           
Deposits:           
Non-interest-bearing  $527,461   $563,302  
Interest-bearing:           
Certificates of deposit exceeding the FDIC insurance limits   44,664    46,753  
Other interest-bearing deposits   1,822,209    1,832,314  
    2,394,334    2,442,369  
Short-term borrowings   62,247    33,831  
FHLB advances   10,828    12,677  
Other liabilities   77,383    80,392  
TOTAL LIABILITIES   2,544,792    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-12,193,181 in 2016 and 12,740,018 in 2015   1,818    1,817  
Additional paid-in capital   73,737    73,396  
Retained earnings   411,423    395,633  
Accumulated other comprehensive loss   (3,493 )  (9,401 )
Less: Treasury shares at cost-2,385,577 in 2016 and 1,817,797 in 2015   (70,261 )  (51,129 )
TOTAL SHAREHOLDERS' EQUITY   413,224    410,316  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $2,958,016   $2,979,585  
  
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, 
  2016 2015  2016 2015 
  (unaudited) (unaudited)  (unaudited) (unaudited) 
INTEREST INCOME:              
Loans, including related fees $21,271 $20,763  $42,455 $41,570 
Securities:              
Taxable  3,694  3,991   7,525  8,052 
Tax-exempt  1,818  1,790   3,640  3,569 
Other  367  433   731  864 
TOTAL INTEREST INCOME  27,150  26,977   54,351  54,055 
INTEREST EXPENSE:              
Deposits  1,030  997   2,017  2,017 
Short-term borrowings  26  19   49  32 
Other borrowings  35  37   69  87 
TOTAL INTEREST EXPENSE  1,091  1,053   2,135  2,136 
NET INTEREST INCOME  26,059  25,924   52,216  51,919 
Provision for loan losses  435  1,150   1,270  2,600 
NET INTEREST INCOME AFTER PROVISION              
FOR LOAN LOSSES  25,624  24,774   50,946  49,319 
NON-INTEREST INCOME:              
Trust and financial services  1,292  1,253   2,626  2,745 
Service charges and fees on deposit accounts  2,601  2,543   5,105  4,869 
Other service charges and fees  3,149  3,000   6,149  5,838 
Securities gains/(losses), net  10  10   13  14 
Insurance commissions  33  1,956   2,305  3,509 
Gain on sale of certain assets and liabilities of insurance brokerage operation  -  -   13,021  - 
Gain on sales of mortgage loans  481  542   885  901 
Other  648  474   476  1,963 
TOTAL NON-INTEREST INCOME  8,214  9,778   30,580  19,839 
NON-INTEREST EXPENSE:              
Salaries and employee benefits  13,142  15,084   26,737  30,142 
Occupancy expense  1,722  1,702   3,453  3,566 
Equipment expense  1,808  1,702   3,645  3,474 
FDIC Expense  403  450   854  880 
Other  5,685  6,372   11,418  11,241 
TOTAL NON-INTEREST EXPENSE  22,760  25,310   46,107  49,303 
INCOME BEFORE INCOME TAXES  11,078  9,242   35,419  19,855 
Provision for income taxes  2,846  2,319   13,512  5,171 
NET INCOME  8,232  6,923   21,907  14,684 
OTHER COMPREHENSIVE INCOME              
Change in unrealized gains/losses on securities, net of reclassifications and taxes  1,262  (7,564)  5,300  (2,802)
Change in funded status of post retirement benefits, net of taxes  304  819   608  3,283 
COMPREHENSIVE INCOME $9,798 $178  $27,815 $15,165 
PER SHARE DATA              
Basic and Diluted Earnings per Share $0.68 $0.54  $1.76 $1.14 
Weighted average number of shares outstanding (in thousands)  12,236  12,903   12,441  12,925 

Contact Information

  • FIRST FINANCIAL CORPORATION
    One First Financial Plaza
    Terre Haute, Indiana 47807
    (812) 238-6000


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