First Financial Corporation Reports 3rd Quarter 2012 Results

Marketwired

TERRE HAUTE, IN--(Marketwire - Oct 30, 2012) -  First Financial Corporation (NASDAQ: THFF) today announced results for the nine and three months ended September 30, 2012. Net income of $24.2 and $8.1 million for the nine and three months, respectively, compares to $27.0 and $9.8 million for the same periods of 2011. Return on assets for the nine and three months ended September 30, 2012 was 1.12% and 1.16%, respectively, compared to 1.44% and 1.57% for the nine and three months ended September 30, 2011. Results for the first nine months of 2012 include income and expenses associated with the purchase of Freestar Bank on December 30, 2011 and were not reflected in the results for the first nine months of 2011.

Net interest income for the third quarter of 2012 was $27.4 million, an increase of 10.0% over the $24.9 million reported for the same period of 2011. Net interest income for the nine months ended September 30, 2012 was $82.2 million compared to the $74.8 million reported for the same period of 2011, an increase of $7.4 million. The net interest margin at September 30, 2012 was 4.41%, compared to the 4.52% reported at September 30, 2011.

The provision for loan losses for the three months ended September 30, 2012 was $2.6 million compared to the $1.4 million provision for the third quarter of 2011. For the nine months ended September 30, 2012 and 2011, the provision expense was $7.3 and $3.9 million, respectively. 

Non-interest income for the three months ended September 30, 2012 and 2011 was $9.7 and $8.9 million, respectively, an 8.7% increase. Gains from the sale of mortgage loans comprised $0.9 million of the increase. For the nine months ended September 30, 2012, non-interest income increased $3.9 million to $29.0 million from the $25.1 million reported for the same period of 2011.

Non-interest expense for the three months ended September 30, 2012 was $23.0 million compared to $18.6 million in 2011. For the nine months ended September 30, 2012, non-interest expense was $69.5 million compared to $56.9 for the nine months ended September 30, 2011. 2012 non-interest expense contains salary, benefits and one-time expenses related to the acquisition of Freestar Bank. In addition, costs related to the opening of four banking centers by First Financial Bank during the quarter resulted in expenses that did not exist during the same quarter of 2011.

Total loans at September 30, 2012 of $1.86 billion compare to the $1.66 billion reported during the same period a year ago. Deposits increased by $332.7 million to $2.26 billion. These increases were primarily driven by the Freestar Bank acquisition. 

Book value per share was $27.86, a 2.77% increase from the $27.11 at September 30, 2011. Shareholders' equity increased 3.42% to $368.8 million from $356.6 million on September 30, 2011.

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)   September 30,     December 31,  
    2012     2011  
    (Unaudited)  
ASSETS                
Cash and due from banks   $ 63,638     $ 134,280  
Federal funds sold and short-term investments     55,773       11,725  
Securities available-for-sale     656,506       666,287  
Loans:     -       -  
  Commercial     1,078,449       1,099,324  
  Residential     507,446       505,600  
  Consumer     273,196       289,717  
      1,859,091       1,894,641  
Less:                
  Unearned Income     (930 )     (962 )
  Allowance for loan losses     (21,457 )     (19,241 )
      1,836,704       1,874,438  
                 
Restricted Stock     21,296       22,282  
Accrued interest receivable     12,785       12,947  
Premises and equipment, net     44,722       40,105  
Bank-owned life insurance     76,280       82,646  
Goodwill     37,612       37,612  
Other intangible assets     4,216       5,142  
Other real estate owned     8,670       4,964  
FDIC Indemnification asset     1,602       2,384  
Other assets     59,437       59,964  
TOTAL ASSETS   $ 2,879,241     $ 2,954,776  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
  Noninterest-bearing   $ 430,619     $ 435,236  
  Interest-bearing:     -       -  
    Certificates of deposit of $100 or more     233,814       242,001  
    Other interest-bearing deposits     1,595,237       1,597,262  
      2,259,670       2,274,499  
Short-term borrowings     43,997       100,022  
Other borrowings     125,863       146,427  
Other liabilities     80,950       86,867  
TOTAL LIABILITIES     2,510,480       2,607,815  
Shareholders' equity                
  Common stock, $.125 stated value per share;                
    Authorized shares-40,000,000                
    Issued shares-14,490,609 in 2012 and 14,450,966 in 2011                
    Outstanding shares-13,237,523 in 2012 and 13,197,880 in 2011     1,808       1,806  
  Additional paid-in capital     69,692       69,328  
  Retained earnings     336,147       318,130  
  Accumulated other comprehensive income (loss)     (7,077 )     (10,494 )
Treasury shares at cost-1,253,086 in 2012 and 2011     (31,809 )     (31,809 )
TOTAL SHAREHOLDERS' EQUITY     368,761       346,961  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,879,241     $ 2,954,776  
                 
                 
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,  
    2012     2011     2012     2011  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
INTEREST INCOME:                                
  Loans, including related fees   $ 24,725     $ 22,943     $ 75,149     $ 68,903  
  Securities:                                
    Taxable     3,308       4,016       10,339       12,532  
    Tax-exempt     1,827       1,712       5,442       5,075  
  Other     568       479       1,781       1,426  
TOTAL INTEREST INCOME     30,428       29,150       92,711       87,936  
                                 
INTEREST EXPENSE:                                
Deposits     1,881       2,974       6,714       9,339  
Short-term borrowings     33       56       116       151  
Other borrowings     1,108       1,216       3,648       3,628  
TOTAL INTEREST EXPENSE     3,022       4,246       10,478       13,118  
                                 
NET INTEREST INCOME     27,406       24,904       82,233       74,818  
                                 
Provision for loan losses     2,559       1,360       7,304       3,894  
NET INTEREST INCOME AFTER PROVISION                                
  FOR LOAN LOSSES     24,847       23,544       74,929       70,924  
                                 
NON-INTEREST INCOME:                                
Trust and financial services     1,413       1,002       4,332       3,530  
Service charges and fees on deposit accounts     2,560       2,305       7,166       6,808  
Other service charges and fees     2,506       2,142       7,237       6,223  
Securities gains/(losses), net     17       -       677       7  
Total impairment losses     -       (13 )     (11 )     (110 )
    Loss recognized in other comprehensive loss                                
    Net impairment loss recognized in earnings     -       (13 )     (11 )     (110 )
Insurance commissions     1,736       1,935       5,426       5,328  
Gain on sales of mortgage loans     1,253       406       2,970       1,144  
Other     203       1,133       1,159       2,168  
TOTAL NON-INTEREST INCOME     9,688       8,910       28,956       25,098  
                                 
NON-INTEREST EXPENSE:                                
Salaries and employee benefits     13,695       11,475       42,005       34,430  
Occupancy expense     1,465       1,171       4,370       3,624  
Equipment expense     1,335       1,079       4,016       3,308  
FDIC Expense     494       161       1,449       1,440  
Other     5,975       4,667       17,646       14,113  
TOTAL NON-INTEREST EXPENSE     22,964       18,553       69,486       56,915  
INCOME BEFORE INCOME TAXES     11,571       13,901       34,399       39,107  
Provision for income taxes     3,480       4,087       10,160       12,073  
NET INCOME     8,091       9,814       24,239       27,034  
OTHER COMPREHENSIVE INCOME                                
Change in unrealized gains/losses on securities, net of reclassifications     3,123       6,322       3,763       21,828  
Tax effect     (1,249 )     (2,529 )     (1,505 )     (8,731 )
      1,874       3,793       2,258       13,097  
Change in funded status of post retirement benefits     645       505       1,932       1,513  
Tax effect     (258 )     (202 )     (773 )     (605 )
      387       303       1,159       908  
TOTAL OTHER COMPREHENSIVE INCOME     2,261       4,096       3,417       14,005  
COMPREHENSIVE INCOME   $ 10,352     $ 13,910     $ 27,656     $ 41,039  
PER SHARE DATA                                
Basic and Diluted     0.61       0.75       1.83       2.06  
Dividends per Share     -       -       0.47       0.47  
Weighted average number of shares outstanding (in thousands)     13,238       13,152       13,233       13,152  
                                 
                                 
Key Ratios   For the nine months ended  
    September 30,     September 30,  
    2012     2011  
Return on average assets     1.12 %     1.44 %
Return on average common shareholder's equity     9.06 %     10.65 %
Average common shareholder's equity to average assets     12.86 %     13.89 %
End of period tangible common equity to tangible assets     11.52 %     10.45 %
Book value per share   $ 27.86     $ 27.11  
Tangible book value per share   $ 24.70     $ 23.86  
Risk-based capital - Tier 1     15.15 %     17.77 %
Risk-based capital - Total     16.12 %     18.92 %
Net interest margin     4.41 %     4.52 %
Efficiency Ratio     60.04 %     54.74 %
Net charge-offs to average loans and leases     0.33 %     0.18 %
Loan and lease loss reserve to loans and leases     1.15 %     0.99 %
Nonperforming assets to loans and leases     2.93 %     3.10 %
                 
         
Asset Quality   For the nine months ended
    September 30,   September 30,
    2012   2011
Accruing loans and leases past due 90 days or more   $ 3,772   $ 2,992
Nonaccrual loans and leases     41,913     43,389
Other real estate owned     8,670     4,964
Total nonperforming assets   $ 54,355   $ 51,345
             
Contact:
For more information contact:
Rodger A. McHargue
(812) 238-6334

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