First Financial Corporation Reports 2nd Quarter 2013 Results

Marketwired

TERRE HAUTE, IN--(Marketwired - Jul 29, 2013) -  First Financial Corporation (NASDAQ: THFF) today announced results for the six and three months ended June 30, 2013. Net income of $14.1 and $6.4 million for the six and three months, respectively, compares to $16.1 and $8.7 million for the same periods of 2012. Return on assets for the six and three months ended June 30, 2013 was 0.96% and 0.88%, respectively, compared to 1.11% and 1.20% for the six and three months ended June 30, 2012.

Net interest income for the second quarter of 2013 was $25.7 million, compared to the $27.7 million reported for the same period of 2012. Net interest income for the six months ended June 30, 2013 was $51.9 million compared to the $54.8 million reported for the same period of 2012. The net interest margin at June 30, 2013 was 4.09%, compared to 4.34% reported at June 30, 2012.

The provision for loan losses for the three months ended June 30, 2013 was $3.0 million compared to the $1.8 million provision for the second quarter of 2012. For the six months ended June 30, 2013 and 2012, the provision expense was $6.0 and $4.7 million, respectively. 

Non-interest income for the three months ended June 30, 2013 and 2012 was $9.7 and $9.8 million, respectively. A decrease in securities gains in the second quarter of 2013 compared to 2012 offset increases in other components of non-interest income. For the six months ended June 30, 2013, non-interest income of $19.5 million slightly increased over the $19.3 million for the same period of 2012.

Non-interest expense for the three months ended June 30, 2013 was $23.4 million compared to $23.1 million in 2012. For the six months ended June 30, 2012, non-interest expense was $45.6 million compared to $46.5 for the six months ended June 30, 2012. Efficiencies realized from the consolidation of the operations of the former Freestar Bank acquired on December 30, 2011 contributed to the reduced non-interest expense in the first half of 2013.

Total loans at June 30, 2013 of $1.80 billion compare to the $1.88 billion reported the same time a year ago. Deposits increased by $26.3 million to $2.28 billion. 

Book value per share was $27.68, a 2.3% increase from the $27.07 at June 30, 2012. Shareholders' equity increased 2.8% to $368.4 million from $358.3 million on June 30, 2012. During the second quarter of 2013 the Corporation declared a $0.48 per share dividend. This marked the 25th consecutive year of dividend increases to shareholders.

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana.

   
   
CONSOLIDATED BALANCE SHEETS  
(Dollar amounts in thousands, except per share data)  
   
    June 30,     December 31,  
    2013     2012  
    (unaudited)  
ASSETS                
Cash and due from banks   $ 73,720     $ 87,230  
Federal funds sold     10,215       20,800  
Securities available-for-sale     837,047       691,000  
Loans:                
    Commercial     1,046,681       1,088,144  
    Residential     486,016       496,237  
    Consumer     267,632       268,507  
      1,800,329       1,852,888  
Less:                
    Unearned Income     (1,010 )     (952 )
    Allowance for loan losses     (22,133 )     (21,958 )
      1,777,186       1,829,978  
Restricted Stock     21,050       21,292  
Accrued interest receivable     11,046       12,024  
Premises and equipment, net     46,468       47,308  
Bank-owned life insurance     78,267       77,295  
Goodwill     37,612       37,612  
Other intangible assets     3,308       3,893  
Other real estate owned     9,336       7,722  
FDIC Indemnification Asset     1,515       2,632  
Other assets     53,747       56,622  
    TOTAL ASSETS   $ 2,960,517     $ 2,895,408  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
  Non-interest-bearing   $ 449,231     $ 465,954  
  Interest-bearing:                
    Certificates of deposit of $100 or more     211,529       213,610  
    Other interest-bearing deposits     1,618,745       1,596,570  
      2,279,505       2,276,134  
Short-term borrowings     29,194       40,551  
Other borrowings     209,534       119,705  
Other liabilities     73,882       86,896  
    TOTAL LIABILITIES     2,592,115       2,523,286  
                 
Shareholders' equity                
    Common stock, $.125 stated value per share;                
    Authorized shares-40,000,000                
    Issued shares-14,516,113 in 2013 and 14,490,609 in 2012                
Outstanding shares-13,307,498 in 2013 and 13,287,348 in 2012     1,809       1,808  
Additional paid-in capital     70,354       69,989  
Retained earnings     346,092       338,342  
Accumulated other comprehensive income (loss)     (19,146 )     (7,472 )
Less: Treasury shares at cost-1,208,615 in 2013 and 1,203,261 in 2012     (30,707 )     (30,545 )
                 
    TOTAL SHAREHOLDERS' EQUITY     368,402       372,122  
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,960,517     $ 2,895,408  
                 
                 
                 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME  
(Dollar amounts in thousands, except per share data)  
   
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2013     2012     2013     2012  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
INTEREST INCOME:                                
  Loans, including related fees   $ 22,576     $ 25,226     $ 46,030     $ 50,424  
  Securities:                                
    Taxable     3,479       3,508       6,694       7,031  
    Tax-exempt     1,761       1,810       3,531       3,615  
  Other     489       590       992       1,213  
TOTAL INTEREST INCOME     28,305       31,134       57,247       62,283  
                                 
INTEREST EXPENSE:                                
Deposits     1,534       2,169       3,276       4,833  
Short-term borrowings     19       37       39       83  
Other borrowings     1,014       1,266       2,021       2,540  
TOTAL INTEREST EXPENSE     2,567       3,472       5,336       7,456  
                                 
NET INTEREST INCOME     25,738       27,662       51,911       54,827  
                                 
Provision for loan losses     2,960       1,789       5,981       4,745  
NET INTEREST INCOME AFTER PROVISION                                
FOR LOAN LOSSES     22,778       25,873       45,930       50,082  
                                 
NON-INTEREST INCOME:                                
Trust and financial services     1,403       1,439       2,929       2,919  
Service charges and fees on deposit accounts     2,394       2,402       4,648       4,606  
Other service charges and fees     2,726       2,276       5,226       4,731  
Securities gains/(losses), net     3       664       7       660  
Total impairment losses     -       (11 )     -       (11 )
    Loss recognized in other comprehensive loss                                
    Net impairment loss recognized in earnings     -       (11 )     -       (11 )
Insurance commissions     1,941       1,799       3,904       3,690  
Gain on sales of mortgage loans     943       792       1,906       1,717  
Other     253       396       920       956  
TOTAL NON-INTEREST INCOME     9,663       9,757       19,540       19,268  
                                 
NON-INTEREST EXPENSE:                                
Salaries and employee benefits     13,713       13,891       27,309       28,310  
Occupancy expense     1,576       1,488       3,098       2,905  
Equipment expense     1,537       1,399       3,038       2,681  
FDIC Expense     502       527       1,059       955  
Other     6,055       5,797       11,078       11,671  
TOTAL NON-INTEREST EXPENSE     23,383       23,102       45,582       46,522  
INCOME BEFORE INCOME TAXES     9,058       12,528       19,888       22,828  
Provision for income taxes     2,612       3,823       5,749       6,680  
NET INCOME     6,446       8,705       14,139       16,148  
OTHER COMPREHENSIVE INCOME (LOSS)                                
Change in unrealized gains/losses on securities, net of reclassifications     (18,094 )     570       (20,872 )     640  
Tax effect     7,535       (228 )     8,646       (256 )
      (10,559 )     342       (12,226 )     384  
Change in funded status of post retirement benefits     563       670       920       1,287  
Tax effect     (225 )     (268 )     (368 )     (515 )
      338       402       552       772  
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)     (10,221 )     744       (11,674 )     1,156  
COMPREHENSIVE INCOME (LOSS)   $ (3,775 )   $ 9,449     $ 2,465     $ 17,304  
PER SHARE DATA                                
Basic and Diluted Earnings per Share     0.48       0.66       1.06       1.22  
Dividends per Share     0.48       0.47       0.48       0.47  
Weighted average number of shares outstanding (in thousands)     13,307       13,238       13,304       13,230  
                                 
                                 
                                 
Key Ratios   For the six months ended  
    June 30,     June 30,  
    2013     2012  
Return on average assets     0.96 %     1.11 %
Return on average common shareholder's equity     7.49 %     8.96 %
Average common shareholder's equity to average assets     12.86 %     12.40 %
End of period tangible common equity to tangible assets     11.19 %     11.09 %
Book value per share   $ 27.68     $ 27.07  
Tangible book value per share   $ 24.54     $ 23.88  
Risk-based capital - Tier 1     15.90 %     14.45 %
Risk-based capital - Total     16.92 %     15.35 %
Net interest margin     4.09 %     4.34 %
Efficiency Ratio     61.37 %     60.32 %
Net charge-offs to average loans and leases     0.53 %     0.51 %
Loan and lease loss reserve to loans and leases     1.23 %     1.07 %
Nonperforming assets to loans and leases     1.66 %     2.76 %
                 
                 
Asset Quality                
    June 30,     June 30,  
    2013     2012  
Accruing loans and leases past due 90 days or more   $ 980     $ 7,995  
Nonaccrual loans and leases     27,554       36,066  
Other real estate owned     9,336       7,722  
Total nonperforming assets   $ 37,870     $ 51,783  
                 
Contact:
For more information contact:
Rodger A. McHargue
(812) 238-6334
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