• First Financial Corporation Reports Second Quarter Results

    Source: Nasdaq GlobeNewswire / 26 Jul 2022 10:00:01   America/New_York

    TERRE HAUTE, Ind., July 26, 2022 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2022.

    • Net income was $15.6 million compared to $16.6 million for the same period of 2021;
    • Diluted net income per common share of $1.27 compared to $1.24 for the same period of 2021;
    • Return on average assets was 1.24% compared to 1.40% for the three months ended June 30, 2021;
    • Credit loss provision was $750 thousand compared to negative provision for credit losses of $2.3 million for the second quarter 2021; and
    • Pre-tax, pre-provision net income was $19.7 million compared to $18.6 million for the same period in 2021.1

    The Corporation further reported results for the six months ending June 30, 2022:

    • Net income was $36.5 million compared to $29.5 million for the same period of 2021;
    • Diluted net income per common share of $2.95 compared to $2.19 for the same period of 2021;
    • Return on average assets was 1.43% compared to 1.26% for the six months ended June 30, 2021;
    • Negative provision for credit losses was $5.8 million compared to negative provision for credit losses of $1.7 million for the six months ended June 30, 2021; and
    • Pre-tax, pre-provision net income was $39.4 million compared to $35.1 million for the same period in 2021.1

    1 Non-GAAP financial measure that Management believes is useful for investors and management to understand pre-tax profitability before giving effect to credit loss expense and to provide additional perspective on the Corporation’s performance over time as well as comparison to the Corporation’s peers and evaluating the financial results of the Corporation – please refer to the Non GAAP reconciliations contained in this release.

    “We are pleased with our second quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Loan growth continues to be strong which contributed to our fifth straight quarter of net interest income growth.”

    Average Total Loans
    Average total loans for the second quarter of 2022 were $2.83 billion versus $2.62 billion for the comparable period in 2021, an increase of $206 million or 7.86%.

    Total Loans Outstanding
    Total loans outstanding as of June 30, 2022 were $2.89 billion compared to $2.57 billion as of June 30, 2021, an increase of $319 million or 12.41%. On a linked quarter basis, total loans increased $82.9 million or 2.95% from $2.80 billion as of March 31, 2022.

    Average Total Deposits
    Average total deposits for the quarter ended June 30, 2022, were $4.42 billion versus $3.98 billion as of June 30, 2021, an increase of $436 million or 10.93%.

    Total Deposits
    Total deposits were $4.38 billion as of June 30, 2022, compared to $3.99 billion as of June 30, 2021, an increase of $395 million or 9.89%.

    Book Value Per Share
    Book Value per share was $38.36 at June 30, 2022, compared to $45.08 at June 30, 2021. The decrease was partially driven by the repurchase of 1,056,597 shares of the Corporation's common stock.

    Shareholder Equity
    Shareholder equity at June 30, 2022, was $461.5 million compared to $588.2 million on June 30, 2021. In the quarter the Corporation repurchased 404,186 shares of its common stock.

    Tangible Common Equity to Tangible Asset Ratio
    The Corporation’s tangible common equity to tangible asset ratio was 7.48% at June 30, 2022, compared to 10.75% at June 30, 2021. The decrease was partially driven by the aforementioned share repurchases.

    Net Interest Income
    Net interest income for the second quarter of 2022 was $40.5 million, compared to $35.6 million reported for the same period of 2021, an increase of $4.8 million or 13.59%.

    Net Interest Margin
    The net interest margin for the quarter ended June 30, 2022, was 3.46% compared to the 3.23% reported at June 30, 2021. On a linked quarter basis, the net interest margin increased 30 basis points from 3.16% as of March 31, 2022.

    Nonperforming Loans
    Nonperforming loans as of June 30, 2022, were $13.5 million versus $20.0 million as of June 30, 2021. The ratio of nonperforming loans to total loans and leases was 0.47% as of June 30, 2022, versus 0.78% as of June 30, 2021.

    Credit Loss Provision
    The provision for credit losses for the three months ended June 30, 2022 was $750 thousand, compared to a negative provision for credit losses of $2.2 million for the second quarter 2021.

    Net Charge-Offs
    In the second quarter of 2022 net recoveries were $202 thousand compared to $152 thousand in the same period of 2021.

    Allowance for Credit Losses
    The Corporation’s allowance for credit losses as of June 30, 2022, was $41.5 million compared to $44.7 million as of June 30, 2021. The allowance for credit losses as a percent of total loans was 1.44% as of June 30, 2022, compared to 1.74% as of June 30, 2021.

    Non-Interest Income
    Non-interest income for the three months ended June 30, 2022 and 2021 was $10.3 million and $10.9 million, respectively.

    Non-Interest Expense
    Non-interest expense for the three months ended June 30, 2022, was $30.7 million compared to $28.0 million in 2021. The year-over-year change is, in part, impacted by the acquisition of Hancock Bancorp in the third quarter of 2021.

    Efficiency Ratio
    The Corporation’s efficiency ratio was 59.06% for the quarter ending June 30, 2022, versus 58.75% for the same period in 2021.

    Income Taxes
    Income tax expense for the three months ended June 30, 2022, was $3.7 million versus $4.1 million for the same period in 2021. The effective tax rate for 2022 was 19.17% compared to 19.97% for 2021.

    About First Financial Corporation
    First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A. First Financial Bank N.A., the fifth oldest national bank in the United States, operates 78 banking centers in Illinois, Indiana, Kentucky and Tennessee. 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 EndedSix Months Ended
      June 30,March 31,June 30,June 30,June 30,
       2022 2022  2021  2022  2021 
    END OF PERIOD BALANCES      
    Assets $5,006,648$5,081,794 $4,756,284 $5,006,648 $4,756,284 
    Deposits $4,383,257$4,395,190 $3,988,751 $4,383,257 $3,988,751 
    Loans, including net deferred loan costs $2,887,527$2,804,650 $2,568,713 $2,887,527 $2,568,713 
    Allowance for Credit Losses $41,468$40,516 $41,756 $41,468 $41,756 
    Total Equity $461,531$525,444 $588,163 $461,531 $588,163 
    Tangible Common Equity(a) $367,210$431,629 $501,459 $367,210 $501,459 
           
    AVERAGE BALANCES      
    Total Assets $5,046,846$5,149,642 $4,751,068 $5,098,244 $4,675,909 
    Earning Assets $4,809,570$4,927,680 $4,552,581 $4,868,625 $4,478,345 
    Investments $1,432,321$1,468,471 $1,244,551 $1,450,396 $1,188,995 
    Loans $2,825,684$2,777,168 $2,619,887 $2,801,426 $2,630,089 
    Total Deposits $4,416,542$4,427,806 $3,981,243 $4,422,174 $3,898,974 
    Interest-Bearing Deposits $3,519,122$3,525,766 $3,173,782 $3,522,444 $3,116,536 
    Interest-Bearing Liabilities $103,223$106,005 $101,594 $104,614 $106,021 
    Total Equity $494,233$565,123 $600,599 $529,678 $600,634 
           
    INCOME STATEMENT DATA      
    Net Interest Income $40,469$37,811 $35,628 $78,280 $70,541 
    Net Interest Income Fully Tax Equivalent(b) $41,665$38,908 $36,719 $80,573 $72,678 
    Provision for Credit Losses $750$(6,550)$(2,196)$(5,800)$(1,744)
    Non-interest Income $10,270$13,738 $10,931 $24,008 $20,225 
    Non-interest Expense $30,674$31,344 $27,996 $62,018 $55,635 
    Net Income $15,613$20,924 $16,614 $36,537 $29,491 
           
    PER SHARE DATA      
    Basic and Diluted Net Income Per Common Share $1.27$1.67 $1.24 $2.95 $2.19 
    Cash Dividends Declared Per Common Share $0.54$— $0.53 $0.54 $0.53 
    Book Value Per Common Share $38.36$42.25 $45.08 $38.36 $45.08 
    Tangible Book Value Per Common Share(c) $32.65$34.71 $38.31 $30.52 $38.43 
    Basic Weighted Average Common Shares Outstanding  12,248 12,538  13,414  12,393  13,473 

    (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 EndedSix Months Ended
      June 30,March 31,June 30,June 30,June 30,
      2022 2022 2021 2022 2021 
    Return on average assets 1.24%1.63%1.40%1.43%1.26%
    Return on average common shareholder's equity 12.64%14.81%11.06%13.80%9.82%
    Efficiency ratio 59.06%59.54%58.75%59.30%59.89%
    Average equity to average assets 9.79%10.97%12.64%10.39%12.85%
    Net interest margin(a) 3.46%3.16%3.23%3.31%3.25%
    Net charge-offs to average loans and leases (0.03)%0.18%(0.02)%0.07%0.04%
    Credit loss reserve to loans and leases 1.44%1.44%1.74%1.44%1.74%
    Credit loss reserve to nonperforming loans 306.97%312.60%223.46%306.97%223.46%
    Nonperforming loans to loans and leases 0.47%0.46%0.78%0.47%0.78%
    Tier 1 leverage 9.97%9.94%10.72%9.97%10.72%
    Risk-based capital - Tier 1 13.51%14.46%17.15%13.51%17.15%

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

    Asset Quality Three Months EndedSix Months Ended
      June 30,March 31,June 30,June 30,June 30,
       2022  2022 2021  2022 2021
    Accruing loans and leases past due 30-89 days $20,273 $13,698$9,430 $20,273$9,430
    Accruing loans and leases past due 90 days or more $980 $707$1,202 $980$1,202
    Nonaccrual loans and leases $8,383 $7,712$14,356 $8,383$14,356
    Total troubled debt restructuring $4,146 $4,542$4,460 $4,146$4,460
    Other real estate owned $170 $236$989 $170$989
    Nonperforming loans and other real estate owned $13,679 $13,197$21,007 $13,679$21,007
    Total nonperforming assets $16,766 $16,728$24,272 $16,766$24,272
    Gross charge-offs $2,411 $3,254$1,151 $5,665$3,489
    Recoveries $2,613 $2,015$1,303 $4,628$2,913
    Net charge-offs/(recoveries) $(202)$1,239$(152)$1,037$576


    Non-GAAP ReconciliationsThree Months Ended June 30,
      2022   2021 
    ($ in thousands, except EPS)   
    Income before Income Taxes$19,315  $20,759 
    Provision for credit losses 750   (2,196)
    Provision for unfunded commitments (350)  — 
    Pre-tax, Pre-provision Income$19,715  $18,563 


    Non-GAAP ReconciliationsSix Months Ended June 30,
      2022   2021 
    ($ in thousands, except EPS)   
    Income before Income Taxes$46,070  $36,875 
    Provision for credit losses (5,800)  (1,744)
    Provision for unfunded commitments (850)  — 
    Pre-tax, Pre-provision Income$39,420  $35,131 

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

     June 30,
    2022    		 December 31,
    2021
      
     (unaudited)
    ASSETS   
    Cash and due from banks$412,136  $682,807 
    Federal funds sold 11,133   308 
    Securities available-for-sale 1,338,452   1,364,734 
    Loans:   
    Commercial 1,707,105   1,674,066 
    Residential 670,641   664,509 
    Consumer 509,781   474,026 
      2,887,527   2,812,601 
    (Less) plus:   
    Net deferred loan costs 4,961   3,294 
    Allowance for credit losses         (41,468)          (48,305)
      2,851,020   2,767,590 
    Restricted stock 15,620   16,200 
    Accrued interest receivable 16,701   16,946 
    Premises and equipment, net 69,022   69,522 
    Bank-owned life insurance 117,695   116,997 
    Goodwill 86,985   86,135 
    Other intangible assets 7,336   8,024 
    Other real estate owned 170   108 
    Other assets 80,378   45,728 
    TOTAL ASSETS$5,006,648  $5,175,099 
        
    LIABILITIES AND SHAREHOLDERS’ EQUITY   
    Deposits:   
    Non-interest-bearing$886,204  $914,933 
    Interest-bearing:   
    Certificates of deposit exceeding the FDIC insurance limits 60,311   74,015 
    Other interest-bearing deposits 3,436,742   3,420,621 
      4,383,257   4,409,569 
    Short-term borrowings 84,232   93,374 
    FHLB advances 15,912   15,937 
    Other liabilities 61,716   73,643 
    TOTAL LIABILITIES 4,545,117   4,592,523 
        
    Shareholders’ equity   
    Common stock, $.125 stated value per share;   
    Authorized shares-40,000,000   
    Issued shares-16,114,992 in 2022 and 16,096,313 in 2021   
    Outstanding shares-12,031,123 in 2022 and 12,629,893 in 2021 2,011   2,009 
    Additional paid-in capital 142,390   141,979 
    Retained earnings 589,169   559,139 
    Accumulated other comprehensive income/(loss) (126,630)  (2,426)
    Less: Treasury shares at cost-4,083,869 in 2022 and 3,466,420 in 2021 (145,409)  (118,125)
    TOTAL SHAREHOLDERS’ EQUITY 461,531   582,576 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$5,006,648  $5,175,099 

    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,
      2022   2021   2022   2021 
      
     (unaudited)
    INTEREST INCOME:       
    Loans, including related fees$34,305  $31,966  $66,662  $63,823 
    Securities:       
    Taxable 6,048   3,355   10,631   6,434 
    Tax-exempt 2,492   2,163   4,840   4,237 
    Other 358   387   723   733 
    TOTAL INTEREST INCOME 43,203   37,871   82,856   75,227 
    INTEREST EXPENSE:       
    Deposits 2,473   2,090   4,149   4,376 
    Short-term borrowings 176   94   258   192 
    Other borrowings 85   59   169   118 
    TOTAL INTEREST EXPENSE 2,734   2,243   4,576   4,686 
    NET INTEREST INCOME 40,469   35,628   78,280   70,541 
    Provision for credit losses 750   (2,196)  (5,800)  (1,744)
    NET INTEREST INCOME AFTER PROVISION       
    FOR LOAN LOSSES 39,719   37,824   84,080   72,285 
    NON-INTEREST INCOME:       
    Trust and financial services 1,300   1,313   2,672   2,618 
    Service charges and fees on deposit accounts 2,886   2,327   5,736   4,570 
    Other service charges and fees 4,997   5,039   9,396   9,281 
    Securities gains (losses), net —   258   5   106 
    Gain on sales of mortgage loans 603   1,450   1,265   2,843 
    Other 484   544   4,934   807 
    TOTAL NON-INTEREST INCOME 10,270   10,931   24,008   20,225 
    NON-INTEREST EXPENSE:       
    Salaries and employee benefits 15,668   16,031   33,010   31,708 
    Occupancy expense 2,372   2,002   4,894   4,151 
    Equipment expense 2,959   2,440   5,866   5,018 
    FDIC Expense 542   287   970   585 
    Other 9,133   7,236   17,278   14,173 
    TOTAL NON-INTEREST EXPENSE 30,674   27,996   62,018   55,635 
    INCOME BEFORE INCOME TAXES 19,315   20,759   46,070   36,875 
    Provision for income taxes 3,702   4,145   9,533   7,384 
    NET INCOME 15,613   16,614   36,537   29,491 
    OTHER COMPREHENSIVE INCOME (LOSS)       
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes (55,919)  1,772   (124,833)  (9,296)
    Change in funded status of post retirement benefits, net of taxes 314   472   629   944 
    COMPREHENSIVE INCOME (LOSS)$(39,992) $18,858  $(87,667) $21,139 
    PER SHARE DATA       
    Basic and Diluted Earnings per Share$1.27  $1.24  $2.95  $2.19 
    Weighted average number of shares outstanding (in thousands) 12,248   13,414   12,393   13,473 

     


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