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First Financial Corporation reports 1st Quarter results

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TERRE HAUTE, Ind., April 23, 2019 (GLOBE NEWSWIRE) -- First Financial Corporation (THFF) today announced results for the first quarter of 2019. Net income for the three months ending March 31, 2019 was $9.68 million compared to $8.95 million for the same period of 2018. Diluted net income per common share was $0.79 compared to $0.73 for the same period of 2018. Return on assets for the three months ended March 31, 2019 was 1.29% compared to 1.20% for the three months ended March 31, 2018.

Average total loans for the first quarter of 2019 were $1.97 billion versus $1.91 billion for the comparable period in 2018, an increase of $64.2 million or 3.37%. Total loans outstanding increased $76.6 million, or 4.02%, from $1.91 billion as of March 31, 2018 to $1.98 billion as of March 31, 2019. On a linked quarter basis, average total loans increased $31.7 million, or 1.63%, from $1.94 billion for the quarter ending December 31, 2018.

Average total deposits for the quarter ended March 31, 2019 were $2.43 billion versus $2.45 billion as of March 31, 2018. Total deposits were $2.42 billion as of March 31, 2019 compared to $2.46 billion as of March 31, 2018.

Book value per share was $37.66 at March 31, 2019 compared to $33.86 at March 31, 2018. Shareholders equity at March 31, 2019 was $462.8 million compared to $414.9 million on March 31, 2018. The company’s tangible common equity to tangible asset ratio was 14.29% at March 31, 2019, compared to 12.98% at March 31, 2018.

Net interest income for the first quarter of 2019 was $29.4 million, an increase of 7.11% over the $27.5 million reported for the same period of 2018. The net interest margin for the quarter ended March 31, 2019 increased to 4.31% from the 4.06% reported at March 31, 2018.

Nonperforming loans as of March 31, 2019 were $16.1 million versus $20.7 million as of March 31, 2018. The ratio of nonperforming loans to total loans and leases was 0.81% as of March 31, 2019 versus 1.09% as of March 31, 2018.

The provision for loan losses for the three months ended March 31, 2019 was $1.47 million, equal to the $1.47 million provision for the first quarter of 2018. Net charge-offs were $946 thousand for the first quarter of 2019 compared to $1.1 million in the same period of 2018. The Corporation’s allowance for loan losses as of March 31, 2019 was $21.0 million compared to $20.2 million as of March 31, 2018. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2019, the same as March 31, 2018.

Non-interest income for the three months ended March 31, 2019 and 2018 was $7.6 and $8.1 million, respectively.
Non-interest expense for the three months ended March 31, 2019 was $23.7 million, which included $416 thousand of merger related expenses, compared to $23.2 million in 2018. The Corporation’s efficiency ratio was 62.29% for the quarter ending March 31, 2019 versus 63.49% for the same period in 2018.

Income tax expense for the three months ended March 31, 2019 was $2.22 million versus $1.94 million for the same period in 2018. The effective tax rate for 2019 was 18.63% compared to 17.80% for 2018.

Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our first quarter 2019 results. We continue to have good growth in loans and our net interest income. We are looking forward to closing our acquisition of HopFed Bancorp and excited about the opportunities presented with our expansion into new markets.”

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

Three Months Ended

March 31,

December 31,

March 31,

END OF PERIOD BALANCES

2019

2018

2018

Assets

$

3,025,565

$

3,008,718

$

2,956,654

Deposits

$

2,419,556

$

2,436,727

$

2,457,189

Loans, including net deferred loan costs

$

1,984,053

$

1,953,988

$

1,907,445

Allowance for Loan Losses

$

20,960

$

20,436

$

20,241

Total Equity

$

462,796

$

442,697

$

414,901

Tangible Common Equity (a)

$

427,358

$

407,145

$

379,019

AVERAGE BALANCES

Total Assets

$

3,004,056

$

2,976,724

$

2,979,601

Earning Assets

$

2,824,524

$

2,795,260

$

2,800,498

Investments

$

850,749

$

849,818

$

876,764

Loans

$

1,972,333

$

1,940,651

$

1,908,118

Total Deposits

$

2,428,164

$

2,448,301

$

2,449,888

Interest-Bearing Deposits

$

1,999,272

$

2,017,901

$

2,028,581

Interest-Bearing Liabilities

$

71,923

$

49,362

$

54,475

Total Equity

$

450,666

$

435,134

$

414,340

INCOME STATEMENT DATA

Net Interest Income

$

29,426

$

29,595

$

27,473

Net Interest Income Fully Tax Equivalent (b)

$

30,401

$

30,591

$

28,453

Provision for Loan Losses

$

1,470

$

1,470

$

1,473

Non-interest Income

$

7,636

$

8,233

$

8,103

Non-interest Expense

$

23,693

$

23,098

$

23,210

Net Income

$

9,682

$

11,056

$

8,954

PER SHARE DATA

Basic and Diluted Net Income Per Common Share

$

0.79

$

0.90

$

0.73

Cash Dividends Declared Per Common Share

$

$

0.51

$

Book Value Per Common Share

$

37.66

$

36.06

$

33.86

Tangible Book Value Per Common Share (c)

$

34.77

$

32.58

$

30.93

Basic Weighted Average Common Shares Outstanding

12,282

12,265

12,248

(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

March 31,

December 31,

March 31,

2019

2018

2018

Return on average assets

1.29

%

1.49

%

1.20

%

Return on average common shareholder's equity

8.59

%

9.93

%

8.64

%

Efficiency ratio

62.29

%

59.49

%

63.49

%

Average equity to average assets

15.00

%

14.96

%

13.91

%

Net interest margin (a)

4.31

%

4.35

%

4.06

%

Net charge-offs to average loans and leases

0.19

%

0.28

%

0.24

%

Loan and lease loss reserve to loans and leases

1.06

%

1.05

%

1.06

%

Loan and lease loss reserve to nonperforming loans

130.28

%

123.27

%

97.66

%

Nonperforming loans to loans and leases

0.81

%

0.85

%

1.09

%

Tier 1 leverage

14.83

%

14.59

%

13.71

%

Risk-based capital - Tier 1

18.65

%

18.48

%

17.57

%

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


Asset Quality

Three Months Ended

March 31,

December 31,

March 31,

2019

2018

2018

Accruing loans and leases past due 30-89 days

$

11,402

$

11,388

$

9,758

Accruing loans and leases past due 90 days or more

$

507

$

798

$

602

Nonaccrual loans and leases

$

10,808

$

10,974

$

13,206

Total troubled debt restructuring

$

4,774

$

4,806

$

6,919

Other real estate owned

$

857

$

603

$

1,923

Nonperforming loans and other real estate owned

$

16,946

$

17,181

$

22,650

Total nonperforming assets

$

20,240

$

20,439

$

38,179

Gross charge-offs

$

2,109

$

2,139

$

2,074

Recoveries

$

1,163

$

804

$

933

Net charge-offs/(recoveries)

$

946

$

1,335

$

1,141

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

March 31,
2019

December 31,
2018

(unaudited)

ASSETS

Cash and due from banks

$

54,627

$

74,388

Federal funds sold

2,000

Securities available-for-sale

786,211

784,916

Loans:

Commercial

1,180,347

1,166,352

Residential

452,384

443,670

Consumer

348,193

341,041

1,980,924

1,951,063

(Less) plus:

Net deferred loan costs

3,129

2,925

Allowance for loan losses

(20,960

)

(20,436

)

1,963,093

1,933,552

Restricted stock

10,412

10,390

Accrued interest receivable

14,379

13,970

Premises and equipment, net

45,977

46,554

Bank-owned life insurance

86,471

86,186

Goodwill

34,355

34,355

Other intangible assets

1,083

1,197

Other real estate owned

857

603

Other assets

26,100

22,607

TOTAL ASSETS

$

3,025,565

$

3,008,718

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits:

Non-interest-bearing

$

440,738

$

431,923

Interest-bearing:

Certificates of deposit exceeding the FDIC insurance limits

50,973

42,284

Other interest-bearing deposits

1,927,845

1,962,520

2,419,556

2,436,727

Short-term borrowings

56,648

69,656

FHLB advances

25,000

Other liabilities

61,565

59,634

TOTAL LIABILITIES

2,562,769

2,566,017

Shareholders’ equity

Common stock, $.125 stated value per share;

Authorized shares-40,000,000

Issued shares-14,632,323 in 2019 and 14,612,540 in 2018

Outstanding shares-12,290,212 in 2019 and 12,278,295 in 2018

1,825

1,824

Additional paid-in capital

76,974

76,774

Retained earnings

466,398

456,716

Accumulated other comprehensive loss

(12,927

)

(23,454

)

Less: Treasury shares at cost-2,342,111 in 2019 and 2,334,245 in 2018

(69,474

)

(69,159

)

TOTAL SHAREHOLDERS’ EQUITY

462,796

442,701

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

3,025,565

$

3,008,718

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

Three Months Ended
March 31,

2019

2018

(unaudited)

INTEREST INCOME:

Loans, including related fees

$

26,754

$

23,623

Securities:

Taxable

3,681

3,593

Tax-exempt

1,867

1,840

Other

314

321

TOTAL INTEREST INCOME

32,616

29,377

INTEREST EXPENSE:

Deposits

2,817

1,764

Short-term borrowings

323

99

Other borrowings

50

41

TOTAL INTEREST EXPENSE

3,190

1,904

NET INTEREST INCOME

29,426

27,473

Provision for loan losses

1,470

1,473

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

27,956

26,000

NON-INTEREST INCOME:

Trust and financial services

1,204

1,415

Service charges and fees on deposit accounts

2,624

2,885

Other service charges and fees

3,114

3,144

Securities gains, net

(4

)

Insurance commissions

23

32

Gain on sales of mortgage loans

420

340

Other

255

287

TOTAL NON-INTEREST INCOME

7,636

8,103

NON-INTEREST EXPENSE:

Salaries and employee benefits

12,755

12,965

Occupancy expense

1,815

1,781

Equipment expense

1,817

1,693

FDIC Expense

140

227

Other

7,166

6,545

TOTAL NON-INTEREST EXPENSE

23,693

23,211

INCOME BEFORE INCOME TAXES

11,899

10,892

Provision for income taxes

2,217

1,939

NET INCOME

9,682

8,953

OTHER COMPREHENSIVE INCOME

Change in unrealized gains/(losses) on securities, net of reclassifications and taxes

10,224

(7,699

)

Change in funded status of post retirement benefits, net of taxes

303

281

COMPREHENSIVE INCOME

$

20,209

$

1,535

PER SHARE DATA

Basic and Diluted Earnings per Share

$

0.79

$

0.73

Weighted average number of shares outstanding (in thousands)

12,282

12,248

For more information contact:
Rodger A. McHargue at (812) 238-6334