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First Financial Corporation reports 2016 results

/EINPresswire.com/ -- 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  
                         

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

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