• First Financial Corporation Reports Third Quarter Results

    Source: Nasdaq GlobeNewswire / 25 Oct 2022 09:00:00   America/Chicago

    TERRE HAUTE, Ind., Oct. 25, 2022 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2022.

    • Net income was $18.1 million compared to $16.1 million for the same period of 2021;
    • Diluted net income per common share of $1.50 compared to $1.24 for the same period of 2021;
    • Return on average assets was 1.43% compared to 1.34% for the three months ended September 30, 2021;
    • Credit loss provision was $1.1 million compared to negative provision for credit losses of $1.5 million for the third quarter 2021; and
    • Pre-tax, pre-provision net income was $23.7 million compared to $18.7 million for the same period in 2021.1

    The Corporation further reported results for the nine months ending September 30, 2022:

    • Net income was $54.6 million compared to $45.6 million for the same period of 2021;
    • Diluted net income per common share of $4.45 compared to $3.42 for the same period of 2021;
    • Return on average assets was 1.43% compared to 1.28% for the nine months ended September 30, 2021;
    • Negative provision for credit losses was $4.8 million compared to negative provision for credit losses of $3.2 million for the nine months ended September 30, 2021; and
    • Pre-tax, pre-provision net income was $63.2 million compared to $53.8 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 third quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Loan growth continues to be strong which contributed to our sixth straight quarter of net interest income growth.”

    Average Total Loans

    Average total loans for the third quarter of 2022 were $2.92 billion versus $2.52 billion for the comparable period in 2021, an increase of $402 million or 16.0%.

    Total Loans Outstanding

    Total loans outstanding as of September 30, 2022 were $2.97 billion compared to $2.48 billion as of September 30, 2021, an increase of $491 million or 19.8%. On a linked quarter basis, total loans increased $82.9 million or 2.9% from $2.89 billion as of June 30, 2022.

    Average Total Deposits

    Average total deposits for the quarter ended September 30, 2022, were $4.41 billion versus $4.04 billion as of September 30, 2021, an increase of $365 million or 9.0%.

    Total Deposits

    Total deposits were $4.41 billion as of September 30, 2022, compared to $4.03 billion as of September 30, 2021, an increase of $379 million or 9.4%.

    Book Value Per Share

    Book Value per share was $36.49 at September 30, 2022, compared to $46.22 at September 30, 2021. The decrease was partially driven by the repurchase of 889,429 shares of the Corporation’s common stock.

    Shareholder Equity

    Shareholder equity at September 30, 2022, was $438.6 million compared to $594.9 million on September 30, 2021. In the quarter the Corporation repurchased 9,125 shares of its common stock. The decrease in shareholder’s equity is reflective of the downturn in the markets which affected the accumulated other comprehensive income/(loss) (“AOCI”) on investments available for sale. AOCI has decreased $172 million in comparison to September 30, 2021.

    Tangible Common Equity to Tangible Asset Ratio

    The Corporation’s tangible common equity to tangible asset ratio was 7.01% at September 30, 2022, compared to 10.79% at September 30, 2021. The decrease was partially driven by the aforementioned share repurchases.

    Net Interest Income

    Net interest income for the third quarter of 2022 was $43.1 million, compared to $36.0 million reported for the same period of 2021, an increase of $7.1 million or 19.64%.

    Net Interest Margin

    The net interest margin for the quarter ended September 30, 2022, was 3.71% compared to the 3.22% reported at September 30, 2021. On a linked quarter basis, the net interest margin increased 25 basis points from 3.46% as of June 30, 2022.

    Nonperforming Loans

    Nonperforming loans as of September 30, 2022, were $14.3 million versus $19.5 million as of September 30, 2021. The ratio of nonperforming loans to total loans and leases was 0.48% as of September 30, 2022, versus 0.79% as of September 30, 2021.

    Credit Loss Provision

    The provision for credit losses for the three months ended September 30, 2022 was $1.05 million, compared to a negative provision for credit losses of $1.50 million for the third quarter 2021.

    Net Charge-Offs

    In the third quarter of 2022 net charge-offs were $3.02 million compared to $270 thousand in the same period of 2021. On July 12, 2022, the Corporation sold seven classified non farm non residential commercial loans, which were acquired in the two acquisitions in 2019 and 2021, with a total principal balance of $14.9 million. The net recovery on the sale of $361,000 was a result of the charge-off of the seven loans of $2.1 million, netted by the reserve on those loans and the unamortized discount remaining from the acquisitions.

    Allowance for Credit Losses

    The Corporation’s allowance for credit losses as of September 30, 2022, was $39.5 million compared to $40.0 million as of September 30, 2021. The allowance for credit losses as a percent of total loans was 1.33% as of September 30, 2022, compared to 1.61% as of September 30, 2021.

    Non-Interest Income

    Non-interest income for the three months ended September 30, 2022 and 2021 was $12.1 million and $11.1 million, respectively.

    Non-Interest Expense

    Non-interest expense for the three months ended September 30, 2022, was $31.5 million compared to $28.5 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 55.72% for the quarter ending September 30, 2022, versus 59.01% for the same period in 2021.

    Income Taxes

    Income tax expense for the three months ended September 30, 2022, was $4.6 million versus $4.1 million for the same period in 2021. The effective tax rate for 2022 was 20.61% compared to 20.07% 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 Ended Nine Months Ended
     September 30, June 30, September 30, September 30, September 30,
      2022   2022   2021   2022   2021 
    END OF PERIOD BALANCES                
    Assets$5,009,339  $5,006,648  $4,801,093  $5,009,339  $4,801,093 
    Deposits$4,407,506  $4,383,257  $4,028,636  $4,407,506  $4,028,636 
    Loans, including net deferred loan costs$2,970,475  $2,887,527  $2,479,910  $2,970,475  $2,479,910 
    Allowance for Credit Losses$39,495  $41,468  $39,986  $39,495  $39,986 
    Total Equity$438,626  $461,531  $594,935  $438,626  $594,935 
    Tangible Common Equity(a)$344,617  $367,210  $508,618  $344,617  $508,618 
                     
    AVERAGE BALANCES                
    Total Assets$5,048,849  $5,046,846  $4,818,880  $5,081,779  $4,723,566 
    Earning Assets$4,774,080  $4,809,570  $4,615,235  $4,837,110  $4,523,975 
    Investments$1,436,179  $1,432,321  $1,325,651  $1,445,657  $1,234,547 
    Loans$2,917,457  $2,825,684  $2,515,639  $2,840,103  $2,591,939 
    Total Deposits$4,406,187  $4,416,542  $4,041,441  $4,416,845  $3,946,463 
    Interest-Bearing Deposits$3,515,568  $3,519,122  $3,223,948  $3,520,152  $3,152,340 
    Interest-Bearing Liabilities$95,098  $103,223  $106,936  $101,442  $106,326 
    Total Equity$481,225  $494,233  $599,011  $513,527  $600,093 
                     
    INCOME STATEMENT DATA                
    Net Interest Income$43,104  $40,469  $36,028  $121,384  $106,569 
    Net Interest Income Fully Tax Equivalent(b)$44,402  $41,665  $37,134  $124,975  $109,812 
    Provision for Credit Losses$1,050  $750  $(1,500) $(4,750) $(3,244)
    Non-interest Income$12,140  $10,270  $11,092  $36,148  $31,317 
    Non-interest Expense$31,504  $30,674  $28,459  $93,522  $84,094 
    Net Income$18,051  $15,613  $16,098  $54,588  $45,589 
                     
    PER SHARE DATA                
    Basic and Diluted Net Income Per Common Share$1.50  $1.27  $1.24  $4.45  $3.42 
    Cash Dividends Declared Per Common Share$—  $0.54  $—  $0.54  $0.53 
    Book Value Per Common Share$36.49  $38.36  $46.22  $36.49  $46.22 
    Tangible Book Value Per Common Share(c)$33.27  $32.65  $39.38  $28.67  $39.51 
    Basic Weighted Average Common Shares Outstanding 12,029   12,248   13,019   12,270   13,320 

    (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 RatiosThree Months Ended Nine Months Ended
      September 30,  June 30,  September 30,   September 30,   September 30, 
      2022   2022   2021   2022   2021 
    Return on average assets 1.43 %  1.24 %  1.34 %  1.43 %  1.28 %
    Return on average common shareholder's equity 15.00 %  12.64 %  10.75 %  14.14 %  10.10 %
    Efficiency ratio 55.72 %  59.06 %  59.01 %  58.04 %  59.59 %
    Average equity to average assets 9.53 %  9.79 %  12.43 %  10.11 %  12.70 %
    Net interest margin(a) 3.71 %  3.46 %  3.22 %  3.44 %  3.24 %
    Net charge-offs to average loans and leases 0.19 %  (0.03)%  0.04 %  0.19 %  0.04 %
    Credit loss reserve to loans and leases 1.33 %  1.44 %  1.61 %  1.33 %  1.61 %
    Credit loss reserve to nonperforming loans 276.59 %  306.97 %  205.12 %  276.59 %  205.12 %
    Nonperforming loans to loans and leases 0.48 %  0.47 %  0.79 %  0.48 %  0.79 %
    Tier 1 leverage 10.33 %  9.97 %  10.77 %  10.33 %  10.77 %
    Risk-based capital - Tier 1 13.69 %  13.51 %  16.63 %  13.69 %  16.63 %

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



                       
    Asset QualityThree Months Ended Nine Months Ended
     September 30, June 30, September 30, September 30, September 30,
      2022   2022   2021   2022   2021 
    Accruing loans and leases past due 30-89 days$18,626  $20,273  $10,765  $18,626  $10,765 
    Accruing loans and leases past due 90 days or more$1,185  $980  $1,355  $1,185  $1,355 
    Nonaccrual loans and leases$9,147  $8,383  $13,650  $9,147  $13,650 
    Total troubled debt restructuring$3,947  $4,146  $4,489  $3,947  $4,489 
    Other real estate owned$214  $170  $884  $214  $884 
    Nonperforming loans and other real estate owned$14,493  $13,679  $20,378  $14,493  $20,378 
    Total nonperforming assets$17,604  $16,766  $23,622  $17,604  $23,622 
    Gross charge-offs$5,653  $2,411  $1,614  $11,318  $5,103 
    Recoveries$2,630  $2,613  $1,344  $7,258  $4,257 
    Net charge-offs/(recoveries)$3,023  $(202) $270  $4,060  $846 



           
    Non-GAAP ReconciliationsThree Months Ended September 30, 
      2022      2021 
    ($in thousands, except EPS)      
    Income before Income Taxes$22,690  $20,161 
    Provision for credit losses 1,050   (1,500)
    Provision for unfunded commitments —   — 
    Pre-tax, Pre-provision Income$23,740  $18,661 



          
    Non-GAAP ReconciliationsNine Months Ended September 30,
      2022   2021 
    ($ in thousands, except EPS)     
    Income before Income Taxes$68,760  $57,036 
    Provision for credit losses (4,750)  (3,244)
    Provision for unfunded commitments (850)  — 
    Pre-tax, Pre-provision Income$63,160  $53,792 



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

          
     September 30, December 31,
      2022   2021 
     (unaudited)
    ASSETS     
    Cash and due from banks$328,222  $682,807 
    Federal funds sold 8,223   308 
    Securities available-for-sale 1,331,985   1,364,734 
    Loans:     
    Commercial 1,717,265   1,674,066 
    Residential 676,400   664,509 
    Consumer 570,245   474,026 
      2,963,910   2,812,601 
    (Less) plus:     
    Net deferred loan costs 6,565   3,294 
    Allowance for credit losses (39,495)  (48,305)
      2,930,980   2,767,590 
    Restricted stock 15,372   16,200 
    Accrued interest receivable 19,128   16,946 
    Premises and equipment, net 68,113   69,522 
    Bank-owned life insurance 116,034   116,997 
    Goodwill 86,985   86,135 
    Other intangible assets 7,024   8,024 
    Other real estate owned 214   108 
    Other assets 97,059   45,728 
    TOTAL ASSETS$5,009,339  $5,175,099 
          
    LIABILITIES AND SHAREHOLDERS’ EQUITY     
    Deposits:     
    Non-interest-bearing$894,348  $914,933 
    Interest-bearing:     
    Certificates of deposit exceeding the FDIC insurance limits 56,596   74,015 
    Other interest-bearing deposits 3,456,562   3,420,621 
      4,407,506   4,409,569 
    Short-term borrowings 89,321   93,374 
    FHLB advances 9,593   15,937 
    Other liabilities 64,293   73,643 
    TOTAL LIABILITIES 4,570,713   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-12,021,998 in 2022 and 12,629,893 in 2021 2,011   2,009 
    Additional paid-in capital 142,596   141,979 
    Retained earnings 607,220   559,139 
    Accumulated other comprehensive income/(loss) (167,375)  (2,426)
    Less: Treasury shares at cost-4,092,994 in 2022 and 3,466,420 in 2021 (145,826)  (118,125)
    TOTAL SHAREHOLDERS’ EQUITY 438,626   582,576 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$5,009,339  $5,175,099 



    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
    (Dollar amounts in thousands, except per share data)

                
     Three Months Ended Nine Months Ended
     September 30, September 30,
      2022   2021   2022   2021 
     (unaudited)
    INTEREST INCOME:           
    Loans, including related fees$38,021  $31,937  $104,683  $95,760 
    Securities:           
    Taxable 7,327   3,627   17,958   10,061 
    Tax-exempt 2,562   2,234   7,402   6,471 
    Other 336   347   1,059   1,080 
    TOTAL INTEREST INCOME 48,246   38,145   131,102   113,372 
    INTEREST EXPENSE:           
    Deposits 4,644   1,959   8,793   6,335 
    Short-term borrowings 418   99   676   291 
    Other borrowings 80   59   249   177 
    TOTAL INTEREST EXPENSE 5,142   2,117   9,718   6,803 
    NET INTEREST INCOME 43,104   36,028   121,384   106,569 
    Provision for credit losses 1,050   (1,500)  (4,750)  (3,244)
    NET INTEREST INCOME AFTER PROVISION           
    FOR LOAN LOSSES 42,054   37,528   126,134   109,813 
    NON-INTEREST INCOME:           
    Trust and financial services 1,015   1,156   3,687   3,774 
    Service charges and fees on deposit accounts 3,109   2,697   8,845   7,267 
    Other service charges and fees 4,656   4,466   14,052   13,747 
    Securities gains (losses), net —   5   5   111 
    Gain on sales of mortgage loans 440   1,425   1,705   4,268 
    Other 2,920   1,343   7,854   2,150 
    TOTAL NON-INTEREST INCOME 12,140   11,092   36,148   31,317 
    NON-INTEREST EXPENSE:           
    Salaries and employee benefits 15,943   15,770   48,953   47,478 
    Occupancy expense 2,525   2,151   7,419   6,302 
    Equipment expense 3,311   2,177   9,177   7,195 
    FDIC Expense 556   313   1,526   898 
    Other 9,169   8,048   26,447   22,221 
    TOTAL NON-INTEREST EXPENSE 31,504   28,459   93,522   84,094 
    INCOME BEFORE INCOME TAXES 22,690   20,161   68,760   57,036 
    Provision for income taxes 4,639   4,063   14,172   11,447 
    NET INCOME 18,051   16,098   54,588   45,589 
    OTHER COMPREHENSIVE INCOME (LOSS)           
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes (41,060)  (2,985)  (165,893)  (12,281)
    Change in funded status of post retirement benefits, net of taxes 315   471   944   1,415 
    COMPREHENSIVE INCOME (LOSS)$(22,694) $13,584  $(110,361) $34,723 
    PER SHARE DATA           
    Basic and Diluted Earnings per Share$1.50  $1.24  $4.45  $3.42 
    Weighted average number of shares outstanding (in thousands) 12,029   13,019   12,270   13,320 


    Primary Logo

Share on,