SOURCE: First Financial Corporation

First Financial Corporation

October 30, 2014 15:54 ET

First Financial Corporation Reports 3rd Quarter Results

TERRE HAUTE, IN--(Marketwired - Oct 30, 2014) - First Financial Corporation (NASDAQ: THFF) today reported net income of $24.6 million for the nine months ended September 30, 2014 compared to $22.6 million for the comparable period of 2013, an increase of 8.76%. Diluted net income per common share also increased 8.82% to $1.85 for the nine months ended September 30, 2014 versus $1.70 for the comparable period of 2013. Return on assets for the nine months ended September 30, 2014 was 1.08% compared to 1.02% for the nine months ended September 30, 2013. The Corporation further reported that net income for the third quarter of 2014 decreased 2.36% to $8.3 million compared to $8.5 million for the same period of 2013. Diluted net income per common share decreased 3.13% to $0.62 from $0.64 for the comparable period of 2013.

Earnings for the nine month period ended September 30, 2014 were impacted by a non-cash provision for state income tax expense. The tax rate, currently 8.0%, is scheduled to drop to 6.5% for 2017. The new legislation further reduces the rate to 4.9%, beginning in 2019. The lower tax rate going forward reduces the benefit provided by the Corporation's existing deferred tax items. The revaluation of the Corporation's state deferred tax items resulted in a one-time expense of $608 thousand.

Average total loans for the third quarter of 2014 were $1.81 billion in 2013, an increase of $138 million, versus the $1.80 billion for the comparable period in 2013. Total loans outstanding increased $7.2 million, to $1.79 billion as of September 30, 2014. On a linked quarter basis, average total loans increased $8.1 million, from $1.78 billion for the quarter ending June 30, 2014.

Average total deposits for the quarter ended September 30, 2014 were $2.40 billion versus $2.35 billion as of September 30, 2013, an increase of 2.36%.

The company's tangible common equity to tangible asset ratio was 11.96% at September 30, 2014, compared to 11.11% at September 30, 2013.

Net interest income for the third quarter of 2014 was $27.1 million, a decrease of 2.35% over the $27.8 million reported for the same period of 2013. The net interest margin for the nine months ended September 30, 2014 was 4.11%, a decrease compared to the 4.16% reported for the same period of 2013. The net interest margin has been impacted by the effects of the low interest rate environment on loans and investments.

Nonperforming assets decreased 25.4% to $38.2 million as of September 30, 2014 versus $51.6 million as of September 30, 2013. The ratio of nonperforming assets to total loans and leases was 2.18% as of September 30, 2014 versus 2.85% as of September 30, 2013.

The provision for loan losses for the three months ended September 30, 2014 was $1.5 million compared to the $495 thousand provision for the third quarter of 2013. Net charge-offs were $2.3 million for the third quarter of 2014 compared to $429 thousand in the same period of 2013. The Corporation's allowance for loan losses as of September 30, 2014 was $17.5 million compared to $20.1 million as of September 30, 2013. The allowance for loan losses as a percent of total loans was .97% as of September 30, 2014 compared to 1.22% as of September 30, 2013.

Non-interest income for the three months ended September 30, 2014 increased 9.38% to $10.5 million compared to the $9.6 million for the same period of 2013. Service charges and fees on deposit accounts increased by $120 thousand, while other service fees increased by $294 thousand, and insurance commissions increased by $195 thousand.

Non-interest expense for the three months ended September 30, 2014 decreased $114 thousand to $24.7 million compared to $24.8 million in 2013. On a linked quarter basis, non-interest expense increased $656 thousand from $24.0 million for the quarter ended June 30, 2014. On a year-over-year basis, salaries and employee benefits increased $982 thousand driven by the acquisition of nine branches in the third quarter 2013 and normal merit increases. Occupancy expenses increased $848 thousand due to the branch acquisition and this winter's uncharacteristic weather related expenses. The Corporation's efficiency ratio was 62.55% for the quarter ending September 30, 2014 versus 62.43% for the same period in 2013.

Book value per share was $31.16 at September 30, 2014, a 10.54% increase from $28.19 at September 30, 2013. Shareholders' equity increased 7.68% to $403.9 million from $375.1 million on September 30, 2013.

On August 25, 2014 the Corporation announced a stock repurchase plan to acquire 5% of the Corporation's outstanding common stock. During the third quarter of 2014 the Corporation repurchased 388,340 shares as part of the repurchase plan. The Corporation has since acquired an additional 56,800 shares as part of the repurchase plan.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our third quarter results. Our net interest income and non-interest income both increased on a quarter over quarter basis."

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, 2014   December 31, 2013
    (unaudited)
ASSETS                
Cash and due from banks   $ 96,998     $ 71,033  
Federal funds sold     14,980       4,276  
Securities available-for-sale     900,110       914,560  
Loans:                
Commercial     1,064,375       1,042,138  
Residential     477,021       482,377  
Consumer     269,291       268,033  
      1,810,687       1,792,548  
Less:                
Unearned Income     638       (1,120 )
Allowance for loan losses     (17,507 )     (20,068 )
      1,793,818       1,771,360  
Restricted Stock     21,075       21,057  
Accrued interest receivable     12,100       11,554  
Premises and equipment, net     52,573       51,449  
Bank-owned life insurance     80,311       79,035  
Goodwill     39,489       39,489  
Other intangible assets     4,145       4,935  
Other real estate owned     4,012       5,291  
FDIC Indemnification Asset     375       1,055  
Other assets     36,781       43,624  
TOTAL ASSETS   $ 3,056,767     $ 3,018,718  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
Non-interest-bearing   $ 539,322     $ 506,815  
Interest-bearing:                
Certificates of deposit of $100 or more     166,544       179,177  
Other interest-bearing deposits     1,746,086       1,772,799  
      2,451,952       2,458,791  
Short-term borrowings     59,031       59,592  
Other borrowings     87,961       58,288  
Other liabilities     53,950       55,852  
TOTAL LIABILITIES     2,652,894       2,632,523  
                 
Shareholders' equity                
Common stock, $.125 stated value per share;                
Authorized shares-40,000,000                
Issued shares-14,538,132 in 2014 and 14,516,113 in 2013                
Outstanding shares-12,962,207 in 2014 and 13,343,029 in 2013     1,814       1,811  
Additional paid-in capital     71,914       71,074  
Retained earnings     375,130       357,083  
Accumulated other comprehensive loss     (2,325 )     (13,969 )
Less: Treasury shares at cost-1,575,525 in 2014 and 1,173,084 in 2013     (42,660 )     (29,804 )
TOTAL SHAREHOLDERS' EQUITY     403,873       386,195  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 3,056,767     $ 3,018,718  
                 
                 
 
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,
    2014   2013   2014   2013
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
INTEREST INCOME:                              
Loans, including related fees   $ 21,939   $ 22,510     $ 65,782     $ 68,540  
Securities:                              
Taxable     4,196     5,038       12,938       11,732  
Tax-exempt     1,782     1,750       5,294       5,281  
Other     459     421       1,301       1,413  
TOTAL INTEREST INCOME     28,376     29,719       85,315       86,966  
INTEREST EXPENSE:                              
Deposits     1,088     1,349       3,611       4,625  
Short-term borrowings     49     23       85       62  
Other borrowings     94     549       726       2,570  
TOTAL INTEREST EXPENSE     1,231     1,921       4,422       7,257  
NET INTEREST INCOME     27,145     27,798       80,893       79,709  
Provision for loan losses     1,506     495       3,110       6,476  
NET INTEREST INCOME AFTER PROVISION                              
FOR LOAN LOSSES     25,639     27,303       77,783       73,233  
NON-INTEREST INCOME:                              
Trust and financial services     1,386     1,402       4,289       4,331  
Service charges and fees on deposit accounts     2,813     2,693       8,058       7,341  
Other service charges and fees     3,112     2,818       8,940       8,044  
Securities gains/(losses), net     --     --       (1 )     7  
Insurance commissions     2,091     1,896       5,620       5,800  
Gain on sales of mortgage loans     519     583       1,352       2,489  
Other     573     245       1,676       1,165  
TOTAL NON-INTEREST INCOME     10,494     9,637       29,934       29,177  
NON-INTEREST EXPENSE:                              
Salaries and employee benefits     14,081     13,773       42,064       41,082  
Occupancy expense     1,776     1,544       5,490       4,642  
Equipment expense     1,905     1,686       5,467       4,724  
FDIC Expense     536     500       1,496       1,559  
Other     6,407     7,316       17,706       18,394  
TOTAL NON-INTEREST EXPENSE     24,705     24,819       72,223       70,401  
INCOME BEFORE INCOME TAXES     11,428     12,121       35,494       32,009  
Provision for income taxes     3,156     3,649       10,903       9,398  
NET INCOME     8,272     8,472       24,591       22,611  
OTHER COMPREHENSIVE INCOME                              
Change in unrealized gains/losses on securities, net of reclassifications and taxes     1,879     (2,322 )     11,298       (14,548 )
Change in funded status of post retirement benefits, net of taxes     116     340       346       892  
COMPREHENSIVE INCOME   $ 10,267   $ 6,490     $ 36,235     $ 8,955  
PER SHARE DATA                              
Basic and Diluted Earnings per Share   $ 0.62   $ 0.64     $ 1.85     $ 1.70  
Dividends per Share   $ --   $ --     $ 0.49     $ 0.48  
Weighted average number of shares outstanding (in thousands)     13,269     13,307       13,325       13,305  
                               
                               
       
Key Ratios   For the Nine Months Ended  
    September 30,     September 30,  
    2014     2013  
Return on average assets     1.08 %     1.02 %
Return on average common shareholder's equity     8.17 %     8.01 %
Average common shareholder's equity to average assets     13.27 %     12.78 %
End of period tangible common equity to tangible assets     11.96 %     11.11 %
Book value per share   $ 31.16     $ 28.19  
Tangible book value per share   $ 27.79     $ 24.82  
Risk-based capital - Tier 1     16.53 %     15.94 %
Risk-based capital - Total     17.33 %     16.94 %
Net interest margin     4.11 %     4.16 %
Efficiency Ratio     62.55 %     62.25 %
Net charge-offs to average loans and leases     0.42 %     0.38 %
Loan and lease loss reserve to loans and leases     0.97 %     1.22 %
Nonperforming assets to loans and leases     2.18 %     2.85 %
         
         
Asset Quality   For the Nine Months Ended  
    September 30,     September 30,  
    2014     2013  
Accruing loans and leases past due 90 days or more   $ 787     $ 1,025  
Nonaccrual loans and leases     18,673       21,800  
Other real estate owned     4,012       9,249  
Troubled debt restructurings     14,758       19,500  
Total nonperforming assets   $ 38,230     $ 51,574  
                 
                 

Contact Information

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