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First Financial Corporation reports 2nd Quarter results

/EINPresswire.com/ -- TERRE HAUTE, IN--(Marketwired - July 25, 2017) - First Financial Corporation (NASDAQ: THFF) today announced results for the second quarter of 2017. Net income increased 1.46% to $8.4 million compared to $8.2 million for the same period of 2016. Diluted net income per common share was unchanged at $0.68 compared to the same period in 2016.

The Corporation further reported net income of $17.7 million for the six months ended June 30, 2017 versus $21.9 million for the comparable period of 2016, which included an after-tax gain on the sale of the Corporation's insurance subsidiary of $5.8 million. Diluted net income per common share was $1.45 for the six months ended June 30, 2017 versus $1.76 for the comparable period of 2016. Return on assets for the six months ended June 30, 2017 was 1.19% compared to 1.48% for the six months ended June 30, 2016.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our second quarter 2017 results. We have experienced continued loan growth, which is driving increases in our interest income."

Book value per share was $35.54 at June 30, 2017, a 4.9% increase from the $33.89 at June 30, 2016. Shareholders' equity increased 5.1% to $434.5 million from $413.2 million on June 30, 2016.

Average total loans for the second quarter of 2017 were $1.85 billion, an increase of $66.3 million or 3.72%, versus the $1.78 billion for the comparable period in 2016. Total loans outstanding increased $54.2 million, or 3.01% to $1.86 billion as of June 30, 2017 from $1.80 billion as of June 30, 2016.

Average total deposits for the quarter ended June 30, 2017 were $2.44 billion versus $2.42 billion as of June 30, 2016.

The company's tangible common equity to tangible asset ratio was 13.55% at June 30, 2017, compared to 12.89% at June 30, 2016.

Net interest income for the second quarter of 2017 was $26.6 million compared to the $26.1 million reported for the same period of 2016. The net interest margin for the six months ended June 30, 2017 was unchanged at 4.05% compared to the same period at June 30, 2016.

The provision for loan losses for the three months ended June 30, 2017 was $1.0 million compared to $435 thousand for the second quarter of 2016. Net charge-offs were $755 thousand for the second quarter of 2017 compared to $856 thousand in the same period of 2016. The Corporation's allowance for loan losses as of June 30, 2017 was $19.7 million compared to $19.5 million as of June 30, 2016. The allowance for loan losses as a percent of total loans was 1.06% as of June 30, 2017 compared to 1.08% as of June 30, 2016.

Nonperforming loans decreased 17.5% to $22.7 million as of June 30, 2017 versus $27.6 million as of June 30, 2016. The ratio of nonperforming loans to total loans and leases was 1.22% as of June 30, 2017 versus 1.53% as of June 30, 2016.

Non-interest income for the three months ended June 30, 2017 was $8.1 million compared to $8.2 million as of June 30, 2016. On a year-over-year basis, service charges and fees on deposit accounts increased $403 thousand to $3.0 million.

Non-interest expense for the three months ended June 30, 2017 decreased $672 thousand to $22.1 million compared to $22.8 million in 2016. On a year-over-year basis, salaries and employee benefits decreased $623 thousand driven by lower pension expense. The Corporation's efficiency ratio was 60.93% for the quarter ending June 30, 2017 versus 63.55% for the same period in 2016.

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,
    2017   2017   2016   2017   2016
END OF PERIOD BALANCES                    
  Assets $ 2,974,688 $ 2,957,285 $ 2,958,016 $ 2,974,688 $ 2,958,016
  Deposits $ 2,427,723 $ 2,438,012 $ 2,394,334 $ 2,427,723 $ 2,394,334
  Loans, including net deferred loan costs $ 1,857,030 $ 1,834,893 $ 1,802,810 $ 1,857,030 $ 1,802,810
  Allowance for Loan Losses $ 19,680 $ 19,395 $ 19,504 $ 19,680 $ 19,504
  Total Equity $ 434,454 $ 426,808 $ 413,224 $ 434,454 $ 413,224
  Tangible Common Equity $ 398,242 $ 390,470 $ 376,472 $ 398,242 $ 376,472
                     
AVERAGE BALANCES                    
  Total Assets $ 2,974,260 $ 2,983,114 $ 2,947,153 $ 2,978,687 $ 2,953,080
  Earning Assets $ 2,779,361 $ 2,766,991 $ 2,747,214 $ 2,773,176 $ 2,736,070
  Investments $ 920,453 $ 919,599 $ 945,948 $ 920,026 $ 950,972
  Loans $ 1,847,484 $ 1,841,392 $ 1,781,201 $ 1,844,438 $ 1,769,506
  Total Deposits $ 2,436,440 $ 2,444,162 $ 2,422,302 $ 2,440,301 $ 2,420,485
  Interest-Bearing Deposits $ 2,009,932 $ 1,971,848 $ 1,877,092 $ 1,990,890 $ 1,875,081
  Interest-Bearing Liabilities $ 51,752 $ 50,164 $ 44,852 $ 50,958 $ 45,439
  Total Equity $ 430,975 $ 426,673 $ 406,382 $ 428,824 $ 410,678
                     
INCOME STATEMENT DATA                    
  Net Interest Income $ 26,560 $ 26,507 $ 26,059 $ 53,067 $ 52,216
  Net Interest Income Fully Tax Equivalent $ 28,137 $ 28,031 $ 27,602 $ 56,168 $ 55,293
  Provision for Loan Losses $ 1,040 $ 1,596 $ 435 $ 2,636 $ 1,270
  Non-interest Income $ 8,113 $ 11,049 $ 8,214 $ 19,162 $ 30,580
  Non-interest Expense $ 22,088 $ 22,577 $ 22,760 $ 44,665 $ 46,107
  Net Income $ 8,352 $ 9,369 $ 8,232 $ 17,721 $ 21,907
                     
PER SHARE DATA                    
  Basic and Diluted Net Income Per Common Share $ 0.68 $ 0.77 $ 0.68 $ 1.45 $ 1.76
  Cash Dividends Declared Per Common Share $ 0.50 $ - $ 0.50 $ 0.50 $ 0.50
  Book Value Per Common Share $ 35.54 $ 34.92 $ 33.89 $ 35.54 $ 33.89
  Tangible Book Value Per Common Share $ 32.12 $ 31.94 $ 30.91 $ 32.58 $ 30.88
  Basic Weighted Average Common Shares Outstanding   12,224   12,217   12,236   12,221   12,441
                       
                       
Key Ratios Three Months Ended Six Months Ended
  June 30, March 31, June 30, June 30, June 30,
  2017 2017 2016 2017 2016
Return on average assets 1.12 % 1.26 % 1.12 % 1.19 % 1.48 %
Return on average common shareholder's equity 7.75 % 8.78 % 8.04 % 8.26 % 10.67 %
Efficiency ratio 60.93 % 57.77 % 63.55 % 59.29 % 53.69 %
Average equity to average assets 14.49 % 14.31 % 13.89 % 14.40 % 13.91 %
Net interest margin 4.05 % 4.05 % 4.04 % 4.05 % 4.05 %
Net charge-offs to average loans and leases 0.19 % 0.21 % 0.19 % 0.19 % 0.19 %
Loan and lease loss reserve to loans and leases 1.06 % 1.06 % 1.08 % 1.06 % 1.08 %
Loan and lease loss reserve to nonperforming loans and other real estate 89.05 % 98.37 % 70.76 % 89.05 % 70.76 %
Nonperforming loans to loans and leases 1.22 % 1.20 % 1.53 % 1.22 % 1.53 %
Tier 1 leverage 13.73 % 13.63 % 13.08 % 13.73 % 13.08 %
Risk-based capital - Tier 1 17.80 % 17.78 % 17.46 % 17.80 % 17.46 %
                     
                     
Asset Quality   Three Months Ended   Six Months Ended
    June 30,   March 31,   June 30,   June 30,   June 30,
    2017   2017   2016   2017   2016
Accruing loans and leases past due 30-89 days $ 8,846 $ 7,713 $ 7,435 $ 8,846 $ 7,435
Accruing loans and leases past due 90 days or more $ 1,117 $ 453 $ 1,044 $ 1,117 $ 1,044
Nonaccrual loans and leases $ 11,255 $ 11,106 $ 14,526 $ 11,255 $ 14,526
Nonperforming loans $ 22,740 $ 22,011 $ 27,562 $ 22,740 $ 27,562
Other real estate owned $ 2,384 $ 2,294 $ 2,837 $ 2,384 $ 2,837
Total nonperforming assets $ 35,024 $ 34,004 $ 38,998 $ 35,024 $ 38,998
Total troubled debt restructurings $ 7,984 $ 8,158 $ 9,155 $ 7,984 $ 9,155
Gross charge-offs $ 2,090 $ 2,274 $ 1,842 $ 4,364 $ 3,482
Recoveries $ 1,335 $ 1,300 $ 986 $ 2,635 $ 1,771
Net charge-offs/(recoveries) $ 755 $ 974 $ 856 $ 1,729 $ 1,711
                     
                     
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
    June 30,
 2017
    December 31,
 2016
    (unaudited)
ASSETS          
Cash and due from banks $ 55,379     $ 75,012  
Federal funds sold   -       6,952  
Securities available-for-sale   851,577       853,725  
Loans:          
Commercial   1,107,658       1,106,182  
Residential   429,827       423,911  
Consumer   316,542       305,881  
    1,854,027       1,835,974  
(Less) plus:          
Net deferred loan costs   3,003       3,206  
Allowance for loan losses   (19,680 )     (18,773 )
    1,837,350       1,820,407  
Restricted stock   10,369       10,359  
Accrued interest receivable   11,564       12,311  
Premises and equipment, net   48,296       49,240  
Bank-owned life insurance   84,343       83,737  
Goodwill   34,355       34,355  
Other intangible assets   1,857       2,109  
Other real estate owned   2,384       2,531  
Other assets   37,214       37,789  
TOTAL ASSETS $ 2,974,688     $ 2,988,527  
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits:          
Non-interest-bearing $ 415,945     $ 564,092  
Interest-bearing:          
Certificates of deposit exceeding the FDIC insurance limits   42,820       43,759  
Other interest-bearing deposits   1,968,958       1,820,675  
    2,427,723       2,428,526  
Short-term borrowings   51,880       80,989  
FHLB advances   132       132  
Other liabilities   60,499       64,485  
TOTAL LIABILITIES   2,540,234       2,574,132  
           
Shareholders' equity          
Common stock, $.125 stated value per share;          
Authorized shares-40,000,000          
Issued shares-14,595,320 in 2017 and 14,578,758 in 2016          
Outstanding shares-12,223,750 in 2017 and 12,216,712 in 2016   1,821       1,820  
Additional paid-in capital   74,877       74,525  
Retained earnings   433,435       421,826  
Accumulated other comprehensive loss   (5,564 )     (14,164 )
Less: Treasury shares at cost-2,371,570 in 2017 and 2,362,046 in 2016   (70,115 )     (69,612 )
TOTAL SHAREHOLDERS' EQUITY   434,454       414,395  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,974,688     $ 2,988,527  
               
               
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,
    2017     2016     2017     2016
    (unaudited)     (unaudited)     (unaudited)     (unaudited)
INTEREST INCOME:                      
Loans, including related fees $ 22,325   $ 21,271   $ 44,266   $ 42,455
Securities:                      
Taxable   3,630     3,694     7,387     7,525
Tax-exempt   1,843     1,818     3,670     3,640
Other   330     367     651     731
TOTAL INTEREST INCOME   28,128     27,150     55,974     54,351
INTEREST EXPENSE:                      
Deposits   1,471     1,030     2,746     2,017
Short-term borrowings   73     26     117     49
Other borrowings   24     35     44     69
TOTAL INTEREST EXPENSE   1,568     1,091     2,907     2,135
NET INTEREST INCOME   26,560     26,059     53,067     52,216
Provision for loan losses   1,040     435     2,636     1,270
NET INTEREST INCOME AFTER PROVISION                      
FOR LOAN LOSSES   25,520     25,624     50,431     50,946
NON-INTEREST INCOME:                      
Trust and financial services   1,149     1,292     2,466     2,626
Service charges and fees on deposit accounts   3,004     2,601     5,781     5,105
Other service charges and fees   3,114     3,149     6,299     6,149
Securities gains/(losses), net   15     10     17     13
Insurance commissions   36     33     58     2,305
Gain on sale of certain assets and liabilities of insurance brokerage operation   -     -     -     13,021
Gain on sales of mortgage loans   393     481     720     885
Other   402     648     3,821     476
TOTAL NON-INTEREST INCOME   8,113     8,214     19,162     30,580
NON-INTEREST EXPENSE:                      
Salaries and employee benefits   12,519     13,142     25,895     26,737
Occupancy expense   1,761     1,722     3,529     3,453
Equipment expense   1,835     1,808     3,632     3,645
FDIC Expense   228     403     461     854
Other   5,745     5,685     11,148     11,418
TOTAL NON-INTEREST EXPENSE   22,088     22,760     44,665     46,107
INCOME BEFORE INCOME TAXES   11,545     11,078     24,928     35,419
Provision for income taxes   3,193     2,846     7,207     13,512
NET INCOME   8,352     8,232     17,721     21,907
OTHER COMPREHENSIVE INCOME                      
Change in unrealized gains/losses on securities, net of reclassifications and taxes   5,045     1,262     8,233     5,300
Change in funded status of post retirement benefits, net of taxes   184     304     367     608
COMPREHENSIVE INCOME $ 13,581   $ 9,798   $ 26,321   $ 27,815
PER SHARE DATA                      
Basic and Diluted Earnings per Share $ 0.68   $ 0.68   $ 1.45   $ 1.76
Weighted average number of shares outstanding (in thousands)   12,224     12,236     12,221     12,441
                       
                       

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

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