First Financial Corporation Reports 3rd Quarter 2013 Results

TERRE HAUTE, IN--(Marketwired - Oct 29, 2013) -  First Financial Corporation (NASDAQ: THFF) today announced results for the three and nine months ended September 30, 2013. Net income of $8.5 million and $22.6 million for the three and nine months, respectively, compared to $8.1 million and $24.2 million for the same periods of 2012. Return on assets for the nine and three months ended September 30, 2013 was 1.02% and 1.15%, respectively, compared to 1.12% and 1.16% for the nine and three months ended September 30, 2012.

Net interest income for the third quarter of 2013 was $27.8 million, compared to the $27.4 million reported for the same period of 2012. Net interest income for the nine months ended September 30, 2013 was $79.7 million compared to the $82.2 million reported for the same period of 2012. The net interest margin at September 30, 2013 was 4.16%, compared to 4.41% reported at September 30, 2012.

The provision for loan losses for the three months ended September 30, 2013 was $495 thousand compared to the $2.6 million provision for the third quarter of 2012. For the nine months ended September 30, 2013 and 2012, the provision expense was $6.5 million and $7.3 million, respectively.

Non-interest income for the three months ended September 30, 2013 and 2012 was $9.6 million and $9.7 million, respectively. For the nine months ended September 30, 2013, non-interest income of $29.2 million increased over the $29.0 million for the same period of 2012.

Non-interest expense for the three months ended September 30, 2013 was $24.8 million compared to $23.0 million in 2012. For the nine months ended September 30, 2013, non-interest expense increased 1.3% to $70.4 million compared to $69.5 million for the nine months ended September 30, 2012. Full time equivalent employees have increased by 4% since September 30, 2012 as a result of the expansion of the branch network.

Total loans at September 30, 2013 stood at $1.81 billion compared to the $1.86 billion reported the same time a year ago. Deposits increased by $227.4 million to $2.5 billion.

Book value per share was $28.19, a 1.18% increase from $27.86 at September 30, 2012. Shareholders' equity increased 2.8% to $375.1 million from $368.8 million on September 30, 2012.

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.

CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
		September 30, 2013				December 31, 2012
		(unaudited)
ASSETS
Cash and due from banks		$	80,899			$	87,230
Federal funds sold			3,420				20,800
Securities available-for-sale			872,675				691,000
Loans:
Commercial			1,057,823				1,088,144
Residential			482,477				496,237
Consumer			269,282				268,507
			1,809,582				1,852,888
Less:
Unearned Income			(977	)			(952	)
Allowance for loan losses			(22,004	)			(21,958	)
			1,786,601				1,829,978
Restricted Stock			21,050				21,292
Accrued interest receivable			11,767				12,024
Premises and equipment, net			51,875				47,308
Bank-owned life insurance			78,679				77,295
Goodwill			39,489				37,612
Other intangible assets			5,253				3,893
Other real estate owned			9,249				7,722
FDIC Indemnification Asset			1,171				2,632
Other assets			55,341				56,622
TOTAL ASSETS		$	3,017,469			$	2,895,408
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing		$	491,826			$	465,954
Interest-bearing:
Certificates of deposit of $100 or more			187,305				213,610
Other interest-bearing deposits			1,807,897				1,596,570
			2,487,028				2,276,134
Short-term borrowings			27,929				40,551
Other borrowings			58,362				119,705
Other liabilities			69,073				86,896
TOTAL LIABILITIES			2,642,392				2,523,286
Shareholders' equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-14,516,113 in 2013 and 14,490,609 in 2012
Outstanding shares-13,307,498 in 2013 and 13,287,348 in 2012			1,810				1,808
Additional paid-in capital			70,537				69,989
Retained earnings			354,565				338,342
Accumulated other comprehensive income (loss)			(21,128	)			(7,472	)
Less: Treasury shares at cost-1,208,615 in 2013 and 1,203,261 in 2012			(30,707	)			(30,545	)
TOTAL SHAREHOLDERS' EQUITY			375,077				372,122
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	3,017,469			$	2,895,408

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
INTEREST INCOME:
Loans, including related fees		$	22,510			$	24,725			$	68,540			$	75,149
Securities:
Taxable			5,038				3,308				11,732				10,339
Tax-exempt			1,750				1,827				5,281				5,442
Other			421				568				1,413				1,781
TOTAL INTEREST INCOME			29,719				30,428				86,966				92,711
INTEREST EXPENSE:
Deposits			1,349				1,881				4,625				6,714
Short-term borrowings			23				33				62				116
Other borrowings			549				1,108				2,570				3,648
TOTAL INTEREST EXPENSE			1,921				3,022				7,257				10,478
NET INTEREST INCOME			27,798				27,406				79,709				82,233
Provision for loan losses			495				2,559				6,476				7,304
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES			27,303				24,847				73,233				74,929
NON-INTEREST INCOME:
Trust and financial services			1,402				1,413				4,331				4,332
Service charges and fees on deposit accounts			2,693				2,560				7,341				7,166
Other service charges and fees			2,818				2,506				8,044				7,237
Securities gains/(losses), net			--				17				7				677
Total impairment losses			--				--				--				(11	)
Loss recognized in other comprehensive loss			--				--				--				--
Net impairment loss recognized in earnings			--				--				--				(11	)
Insurance commissions			1,896				1,736				5,800				5,426
Gain on sales of mortgage loans			583				1,253				2,489				2,970
Other			245				203				1,165				1,159
TOTAL NON-INTEREST INCOME			9,637				9,688				29,177				28,956
NON-INTEREST EXPENSE:
Salaries and employee benefits			13,773				13,695				41,082				42,005
Occupancy expense			1,544				1,465				4,642				4,370
Equipment expense			1,686				1,335				4,724				4,016
FDIC Expense			500				494				1,559				1,449
Other			7,316				5,975				18,394				17,646
TOTAL NON-INTEREST EXPENSE			24,819				22,964				70,401				69,486
INCOME BEFORE INCOME TAXES			12,121				11,571				32,009				34,399
Provision for income taxes			3,649				3,480				9,398				10,160
NET INCOME			8,472				8,091				22,611				24,239
OTHER COMPREHENSIVE INCOME (LOSS)
Change in unrealized gains/losses on securities, net of reclassifications			(3,793	)			3,123				(24,665	)			3,763
Tax effect			2,582				(1,249	)			10,117				(1,505	)
			(1,211	)			1,874				(14,548	)			2,258
Change in funded status of post retirement benefits			566				645				1,486				1,932
Tax effect			(226	)			(258	)			(594	)			(773	)
			340				387				892				1,159
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)			(871	)			2,261				(13,656	)			3,417
COMPREHENSIVE INCOME (LOSS)		$	7,601			$	10,352			$	8,955			$	27,656
PER SHARE DATA
Basic and Diluted Earnings per Share		$	0.64			$	0.61			$	1.70			$	1.83
Dividends per Share		$	--			$	--			$	0.48			$	0.47
Weighted average number of shares outstanding (in thousands)			13,307				13,238				13,305				13,233

Key Ratios		For the Nine Months Ended
		September 30,				September 30,
		2013				2012
Return on average assets			1.02	%			1.12	%
Return on average common shareholder's equity			8.01	%			9.06	%
Average common shareholder's equity to average assets			12.78	%			12.86	%
End of period tangible common equity to tangible assets			11.11	%			11.52	%
Book value per share		$	28.19			$	27.86
Tangible book value per share		$	24.82			$	24.70
Risk-based capital - Tier 1			15.94	%			15.15	%
Risk-based capital - Total			16.94	%			16.12	%
Net interest margin			4.16	%			4.41	%
Efficiency Ratio			62.25	%			60.04	%
Net charge-offs to average loans and leases			0.38	%			0.44	%
Loan and lease loss reserve to loans and leases			1.22	%			1.15	%
Nonperforming assets to loans and leases			1.77	%			2.93	%

Asset Quality		For the Nine Months Ended
		September 30,			September 30,
		2013			2012
Accruing loans and leases past due 90 days or more		$	1,025		$	3,772
Nonaccrual loans and leases			21,800			41,913
Other real estate owned			9,249			8,670
Total nonperforming assets		$	32,074		$	54,355