• First Financial Corporation Reports Third Quarter Results

    Source: Nasdaq GlobeNewswire / 26 Oct 2021 09:30:00   America/Chicago

    TERRE HAUTE, Ind., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the period ending September 30, 2021:

    For the quarter:

    • Net income was $16.1 million compared to $14.0 million for the same period of 2020;
    • Diluted net income per common share of $1.24 compared to $1.02 for the same period of 2020; and
    • Return on average assets was 1.34% compared to 1.28% for the three months ended September 30, 2020.

    The Corporation further reported results for the nine months ending September 30, 2021:

    • Net income was $45.6 million compared to $38.1 million for the same period of 2020;
    • Diluted net income per common share of $3.42 compared to $2.78 for the same period of 2020; and
    • Return on average assets was 1.28% compared to 1.20% for the nine months ended September 30, 2020.

    “We are pleased with our third quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Asset quality continues to be good which has allowed us to release additional credit loss reserves which were established during the pandemic. We continue to focus on our customers and assisting them as needed as they navigate the many challenges of the ongoing pandemic.”

    Average Total Loans
    Average total loans for the third quarter of 2021 were $2.52 billion versus $2.77 billion for the comparable period in 2020.

    Total Loans Outstanding
    Total loans outstanding as of September 30, 2021 were $2.48 billion compared to $2.75 billion as of September 30, 2020. Total Paycheck Protection Program ("PPP") loans as of September 30, 2021 were $40.9 million compared to $169.6 million for the same period of 2020.

    Average Total Deposits
    Average total deposits for the quarter ended September 30, 2021, were $4.04 billion versus $3.59 billion as of September 30, 2020, an increase of $449 million or 12.49%.

    Total Deposits
    Total deposits were $4.03 billion as of September 30, 2021, compared to $3.60 billion as of September 30, 2020, an increase of $424 million or 11.77%. On a linked quarter basis, total deposits increased $40 million from $3.99 billion for the quarter ending June 30, 2021.

    Book Value Per Share
    Book Value per share was $46.22 at September 30, 2021, compared to $44.27 at September 30, 2020 an increase of 4.41%.

    Shareholder Equity
    Shareholder equity at September 30, 2021, was $594.9 million compared to $607.1 million on September 30, 2020. In the quarter the Corporation repurchased 176,293 shares of its common stock.

    Tangible Common Equity to Tangible Asset Ratio
    The Corporation’s tangible common equity to tangible asset ratio was 10.79% at September 30, 2021, compared to 12.07% at September 30, 2020.

    Net Interest Income
    Net interest income for the third quarter of 2021 was $36.0 million, compared to $36.5 million reported for the same period of 2020.

    Net Interest Margin
    The net interest margin for the quarter ended September 30, 2021, was 3.22% compared to the 3.99% reported at September 30, 2020.

    Nonperforming Loans
    Nonperforming loans as of September 30, 2021, were $19.5 million versus $23.7 million as of September 30, 2020. The ratio of nonperforming loans to total loans and leases was 0.79% as of September 30, 2021, versus 0.86% as of September 30, 2020.

    Credit Loss Provision
    The provision for credit losses for the three months ended September 30, 2021, was $(1.50) million compared to the $4.43 million provision for the third quarter of 2020. In the first three quarters of 2020 the provision was calculated using the incurred loss basis. Beginning in the fourth quarter 2020, the provision was calculated using the current expected credit loss accounting standard.

    Net Charge-Offs/Recoveries
    In the third quarter of 2021 net charge-offs were $270 thousand compared to $750 thousand in the same period of 2020.

    Allowance for Credit Losses
    In March 2020 due to the uncertainty surrounding the global pandemic and as provided by the Coronavirus Aid Relief and Economic Security Act the Corporation elected to delay the implementation of the Current Expected Credit Loss accounting standard. On December 31, 2020 the Corporation adopted ASU 2016-13 (topic 326), “Measurement of Credit Losses on Financial Instruments” commonly referenced as the Current Expected Credit Loss (“CECL”) model. CECL was retrospectively adopted on January 1, 2020.

    The Corporation’s allowance for credit losses as of September 30, 2021, was $43.0 million compared to $27.0 million as of September 30, 2020. The increase is primarily related to the adoption of CECL. The allowance for credit losses as a percent of total loans was 1.73% as of September 30, 2021, compared to 0.98% as of September 30, 2020. The allowance as of September 30, 2021 was calculated using CECL. The allowance as of September 30, 2020 was calculated using the incurred loss method.

    Non-Interest Income
    Non-interest income for the three months ended September 30, 2021 and 2020 was $11.1 million and $11.7 million, respectively.

    Non-Interest Expense
    Non-interest expense for the three months ended September 30, 2021, was $28.5 million compared to $27.1 million in 2020.

    Efficiency Ratio
    The Corporation’s efficiency ratio was 59.01% for the quarter ending September 30, 2021, versus 54.97% for the same period in 2020.

    Income Taxes
    Income tax expense for the nine months ended September 30, 2021, was $11.4 million versus $8.6 million for the same period in 2020. The effective tax rate for 2021 was 20.07% compared to 18.47% for 2020.

    About First Financial Corporation
    First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A. and The Morris Plan Company of Terre Haute, Inc. First Financial Bank N.A. is the fifth oldest national bank in the United States, operating 80 banking centers in Illinois, Indiana, Kentucky and Tennessee. The Morris Plan Company of Terre Haute, Inc. is a state industrial chartered financial institution operating one office in Terre Haute, Indiana. Additional information is available at www.first-online.bank.

    Investor Contact:
    Rodger A. McHargue
    Chief Financial Officer
    P: 812-238-6334
    E: rmchargue@first-online.com


                         
      Three Months Ended
    		 Nine Months Ended
      September 30,
    		 June 30,
    		 September 30,
    		 September 30,
    		 September 30,
      2021
    		 2021
    		 2020
    		 2021
    		 2020
    END OF PERIOD BALANCES      
    Assets $4,801,093  $4,753,308  $4,389,996  $4,801,093  $4,389,996 
    Deposits $4,028,636  $3,988,751  $3,604,353  $4,028,636  $3,604,353 
    Loans, including net deferred loan costs $2,479,910  $2,568,713  $2,753,493  $2,479,910  $2,753,493 
    Allowance for Credit Losses $42,962  $44,732  $26,960  $42,962  $26,960 
    Total Equity $594,935  $588,163  $607,095  $594,935  $607,095 
    Tangible Common Equity (a) $508,618  $501,459  $519,098  $508,618  $519,098 
           
    AVERAGE BALANCES      
    Total Assets $4,818,880  $4,751,068  $4,379,798  $4,723,566  $4,239,866 
    Earning Assets $4,615,235  $4,552,581  $3,776,803  $4,523,975  $3,707,653 
    Investments $1,325,651  $1,244,551  $1,008,303  $1,234,547  $995,457 
    Loans $2,515,639  $2,619,887  $2,768,003  $2,591,939  $2,710,953 
    Total Deposits $4,041,441  $3,981,243  $3,592,633  $3,946,463  $3,463,263 
    Interest-Bearing Deposits $3,223,948  $3,173,782  $2,887,575  $3,152,340  $2,828,521 
    Interest-Bearing Liabilities $106,936  $101,594  $108,236  $106,326  $112,290 
    Total Equity $599,011  $600,599  $603,067  $600,093  $588,095 
           
    INCOME STATEMENT DATA      
    Net Interest Income $36,028  $35,628  $36,531  $106,569  $108,776 
    Net Interest Income Fully Tax Equivalent (b) $37,134  $36,719  $37,612  $109,812  $111,983 
    Provision for Credit Losses $(1,500) $(2,196) $4,425  $(3,244) $10,080 
    Non-interest Income $11,092  $10,931  $11,739  $31,317  $29,610 
    Non-interest Expense $28,459  $27,996  $27,130  $84,094  $81,567 
    Net Income $16,098  $16,614  $14,000  $45,589  $38,105 
           
    PER SHARE DATA      
    Basic and Diluted Net Income Per Common Share $1.24  $1.24  $1.02  $3.42  $2.78 
    Cash Dividends Declared Per Common Share $—  $0.53  $—  $0.53  $0.52 
    Book Value Per Common Share $46.22  $45.08  $44.27  $46.22  $44.27 
    Tangible Book Value Per Common Share (c) $39.38  $38.31  $37.56  $39.51  $37.85 
    Basic Weighted Average Common Shares Outstanding 13,019  13,414   13,715  13,320  13,723 

    (a) Tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholder's equity.
    (b) Net interest income fully tax equivalent is a non-GAAP financial measure derived from GAAP-based amounts. We calculate net interest income fully tax equivalent by adding back the tax equivalent factor of tax exempt income to net interest income. We calculate the tax equivalent factor of tax exempt income by dividing tax exempt income by the net of tax rate of 75%.
    (c) Tangible book value per common share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the factor by dividing average tangible common equity by average shares outstanding. We calculate average tangible common equity by excluding average intangible assets from average shareholder's equity.


                         
    Key Ratios Three Months Ended
    		 Nine Months Ended
      September 30,
    		 June 30,
    		 September 30,
    		 September 30,
    		 September 30,
      2021
    		 2021
    		 2020
    		 2021
    		 2020
    Return on average assets 1.34 % 1.40 % 1.28 % 1.28 % 1.20 %
    Return on average common shareholder's equity 10.75 % 11.06 % 9.29 % 10.10 % 8.62 %
    Efficiency ratio 59.01 % 58.75 % 54.97 % 59.59 % 57.61 %
    Average equity to average assets 12.43 % 12.64 % 13.77 % 12.70 % 13.87 %
    Net interest margin (a) 3.22 % 3.23 % 3.99 % 3.24 % 4.03 %
    Net charge-offs to average loans and leases 0.04 % (0.02)% 0.11 % 0.04 % 0.15 %
    Credit loss reserve to loans and leases 1.73 % 1.74 % 0.98 % 1.73 % 0.98 %
    Credit loss reserve to nonperforming loans 220.39 % 223.46 % 113.89 % 220.39 % 113.89 %
    Nonperforming loans to loans and leases 0.79 % 0.78 % 0.86 % 0.79 % 0.86 %
    Tier 1 leverage 10.77 % 10.72 % 11.81 % 10.77 % 11.81 %
    Risk-based capital - Tier 1 16.63 % 17.15 % 15.70 % 16.63 % 15.70 %

    (a) Net interest margin is calculated on a tax equivalent basis.

    Asset Quality Three Months Ended
    		 Nine Months Ended
      September 30,
    		 June 30,
    		 September 30,
    		 September 30,
    		 September 30,
      2021
    		 2021
    		 2020
    		 2021
    		 2020
    Accruing loans and leases past due 30-89 days $10,765  $9,430  $13,490  $10,765  $13,490 
    Accruing loans and leases past due 90 days or more $1,355  $1,202  $2,948  $1,355  $2,948 
    Nonaccrual loans and leases $13,650  $14,356  $16,628  $13,650  $16,628 
    Total troubled debt restructuring $4,489  $4,460  $4,097  $4,489  $4,097 
    Other real estate owned $884  $989  $3,465  $884  $3,465 
    Nonperforming loans and other real estate owned $20,378  $21,007  $27,138  $20,378  $27,138 
    Total nonperforming assets $23,622  $24,272  $30,174  $23,622  $30,174 
    Gross charge-offs $1,614  $1,151  $1,998  $5,103  $6,442 
    Recoveries $1,344  $1,303  $1,248  $4,257  $3,379 
    Net charge-offs/(recoveries) $270  $(152) $750  $846  $3,063 
                         


    CONSOLIDATED BALANCE SHEETS
    (Dollar amounts in thousands, except per share data)

     September 30,
    2021    		 December 31,
    2020
     (unaudited)
    ASSETS   
    Cash and due from banks$758,120  $657,470 
    Federal funds sold6,183  301 
    Securities available-for-sale1,270,820  1,020,744 
    Loans:   
    Commercial1,457,984  1,521,711 
    Residential535,855  604,652 
    Consumer482,115  479,750 
     2,475,954  2,606,113 
    (Less) plus:   
    Net deferred loan costs3,956  4,181 
    Allowance for credit losses(42,962) (47,052)
     2,436,948  2,563,242 
    Restricted stock14,837  14,812 
    Accrued interest receivable15,963  16,957 
    Premises and equipment, net63,187  62,063 
    Bank-owned life insurance106,895  95,849 
    Goodwill78,592  78,592 
    Other intangible assets7,725  8,972 
    Other real estate owned884  1,012 
    Other assets40,939  37,530 
    TOTAL ASSETS$4,801,093  $4,557,544 
        
    LIABILITIES AND SHAREHOLDERS’ EQUITY   
    Deposits:   
    Non-interest-bearing$814,902  $732,694 
    Interest-bearing:   
    Certificates of deposit exceeding the FDIC insurance limits68,920  107,764 
    Other interest-bearing deposits3,144,814  2,915,487 
     4,028,636  3,755,945 
    Short-term borrowings101,051  116,061 
    FHLB advances5,902  5,859 
    Other liabilities70,569  82,687 
    TOTAL LIABILITIES4,206,158  3,960,552 
        
    Shareholders’ equity   
    Common stock, $.125 stated value per share;   
    Authorized shares-40,000,000   
    Issued shares-16,096,313 in 2021 and 16,075,154 in 2020   
    Outstanding shares-12,871,936 in 2021 and 13,558,511 in 20202,009  2,007 
    Additional paid-in capital141,456  140,820 
    Retained earnings559,693  521,103 
    Accumulated other comprehensive income/(loss)(1,102) 9,764 
    Less: Treasury shares at cost-3,224,377 in 2021 and 2,516,643 in 2020(107,121) (76,702)
    TOTAL SHAREHOLDERS’ EQUITY594,935  596,992 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,801,093  $4,557,544 
            


    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,
     2021 2020 2021 2020
      
     (unaudited)
    INTEREST INCOME:       
    Loans, including related fees$31,937  $34,077  $95,760  $102,335 
    Securities:       
    Taxable3,627  3,005  10,061  10,658 
    Tax-exempt2,234  1,994  6,471  5,940 
    Other347  463  1,080  1,265 
    TOTAL INTEREST INCOME38,145  39,539  113,372  120,198 
    INTEREST EXPENSE:       
    Deposits1,959  2,689  6,335  10,238 
    Short-term borrowings99  107  291  475 
    Other borrowings59  212  177  709 
    TOTAL INTEREST EXPENSE2,117  3,008  6,803  11,422 
    NET INTEREST INCOME36,028  36,531  106,569  108,776 
    Provision for credit losses(1,500) 4,425  (3,244) 10,080 
    NET INTEREST INCOME AFTER PROVISION       
    FOR LOAN LOSSES37,528  32,106  109,813  98,696 
    NON-INTEREST INCOME:       
    Trust and financial services1,156  1,210  3,774  4,032 
    Service charges and fees on deposit accounts2,697  2,516  7,267  7,616 
    Other service charges and fees4,466  4,269  13,747  11,468 
    Securities gains (losses), net5  5  111  230 
    Gain on sales of mortgage loans1,425  2,910  4,268  4,813 
    Other1,343  829  2,150  1,451 
    TOTAL NON-INTEREST INCOME11,092  11,739  31,317  29,610 
    NON-INTEREST EXPENSE:       
    Salaries and employee benefits15,770  15,474  47,478  45,769 
    Occupancy expense2,151  2,003  6,302  6,094 
    Equipment expense2,177  2,739  7,195  7,873 
    FDIC Expense313  135  898  (46)
    Other8,048  6,779  22,221  21,877 
    TOTAL NON-INTEREST EXPENSE28,459  27,130  84,094  81,567 
    INCOME BEFORE INCOME TAXES20,161  16,715  57,036  46,739 
    Provision for income taxes4,063  2,715  11,447  8,634 
    NET INCOME16,098  14,000  45,589  38,105 
    OTHER COMPREHENSIVE INCOME       
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes(2,985) 2,223  (12,281) 18,451 
    Change in funded status of post retirement benefits, net of taxes471  383  1,415  1,171 
    COMPREHENSIVE INCOME$13,584  $16,606  $34,723  $57,727 
    PER SHARE DATA       
    Basic and Diluted Earnings per Share$1.24  $1.02  $3.42  $2.78 
    Weighted average number of shares outstanding (in thousands)13,019  13,715  13,320  13,723 


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