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First Financial Corporation reports 3rd Quarter results

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TERRE HAUTE, Ind., Oct. 23, 2018 (GLOBE NEWSWIRE) -- First Financial Corporation (THFF) today announced results for the third quarter of 2018. Net income increased 28.64% to $11.3 million compared to $8.8 million for the same period of 2017. Diluted net income per common share increased 27.78% to $0.92 from $0.72 for the comparable period of 2017.

The Corporation also reported net income of $35.5 million for the nine months ended September 30, 2018 versus $26.5 million for the comparable period of 2017. Diluted net income per common share for the nine months ended September 30, 2018 was $2.90 versus $2.17 for the comparable period of 2017. The increase included a recovery of a security previously written down for other-than-temporary impairment, which contributed $2.4 million pre-tax to interest income and $4.5 million pre-tax to other income. The first quarter of 2017 included a similar pre-tax recovery of $3.1 million. Return on assets for the nine months ended September 30, 2018 was 1.59% compared to 1.18% for the nine months ended September 30, 2017.

Norman L. Lowery, President and Chief Executive Officer, commented, “We are pleased with our third quarter 2018 results. This makes our sixth consecutive quarter of reported loan growth, which contributed to the increase in our third quarter net interest income compared to the same period last year.”

Book value per share was $34.91 at September 30, 2018 compared to $36.29 at September 30, 2017. Shareholders’ equity was $427.8 million compared to $443.6 million on September 30, 2017.

Average total loans for the third quarter of 2018 were $1.93 billion versus $1.86 billion for the comparable period in 2017, an increase of $69.3 million or 3.73%. Total loans outstanding were $1.94 billion as of September 30, 2018 compared to $1.87 billion as of September 30, 2017, a $75.2 million or 4.03% increase.

Average total deposits for the quarter ended September 30, 2018 were $2.44 billion versus $2.41 billion as of September 30, 2017. Total deposits were $2.41 billion as of September 30, 2018 compared to $2.45 billion as of September 30, 2017.

The company’s tangible common equity to tangible asset ratio was 13.31% at September 30, 2018, compared to 13.83% at September 30, 2017.

Net interest income for the third quarter of 2018 was $28.8 million compared to the $27.1 million reported for the same period of 2017. The net interest margin for the nine months ended September 30, 2018 increased to 4.31% compared to 4.08% for the same period ending September 30, 2017.

The provision for loan losses for the three months ended September 30, 2018 was $1.5 million compared to $1.2 million for the third quarter of 2017. Net charge-offs were $1.2 million for the third quarter of 2018 compared to $1.1 million in the same period of 2017. The Corporation’s allowance for loan losses as of September 30, 2018 was $20.3 million compared to $19.8 million as of September 30, 2017. The allowance for loan losses as a percent of total loans was 1.05% as of September 30, 2018 compared to 1.06% as of September 30, 2017.

Nonperforming loans decreased 29.0% to $16.2 million as of September 30, 2018 versus $22.8 million as of September 30, 2017. The ratio of nonperforming loans to total loans and leases was .83% as of September 30, 2018 versus 1.22% as of September 30, 2017.

Non-interest income for the three months ended September 30, 2018 was $8.9 million compared to $8.5 million as of September 30, 2017.

Non-interest expense for the three months ended September 30, 2018 was $22.3 million compared to $22.3 million in 2017. The Corporation’s efficiency ratio was 57.54% for the quarter ending September 30, 2018 versus 59.85% for the same period in 2017.

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.

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2018

2018

2017

2018

2017

END OF PERIOD BALANCES

Assets

$

2,980,935

$

2,968,048

$

2,982,342

$

2,980,935

$

2,982,342

Deposits

$

2,407,061

$

2,454,335

$

2,453,411

$

2,407,061

$

2,453,411

Loans, including net deferred loan costs

$

1,941,780

$

1,928,572

$

1,866,564

$

1,941,780

$

1,866,564

Allowance for Loan Losses

$

20,301

$

20,071

$

19,802

$

20,301

$

19,802

Total Equity

$

427,774

$

419,695

$

443,558

$

427,774

$

443,558

Tangible Common Equity (a)

$

392,109

$

383,916

$

407,459

$

392,109

$

407,459

AVERAGE BALANCES

Total Assets

$

2,965,825

$

2,973,295

$

2,974,616

$

2,972,907

$

2,977,330

Earning Assets

$

2,785,582

$

2,784,128

$

2,775,366

$

2,786,588

$

2,773,906

Investments

$

857,624

$

865,694

$

912,439

$

866,694

$

917,497

Loans

$

1,926,051

$

1,915,532

$

1,856,726

$

1,916,567

$

1,848,534

Total Deposits

$

2,435,281

$

2,467,426

$

2,414,561

$

2,450,865

$

2,431,721

Interest-Bearing Deposits

$

2,010,467

$

2,041,391

$

1,993,839

$

2,026,813

$

1,991,873

Interest-Bearing Liabilities

$

49,808

$

34,539

$

58,755

$

46,274

$

53,557

Total Equity

$

427,530

$

420,092

$

440,998

$

420,654

$

432,882

INCOME STATEMENT DATA

Net Interest Income

$

28,827

$

30,684

$

27,108

$

86,984

$

80,175

Net Interest Income Fully Tax Equivalent (b)

$

29,841

$

31,694

$

28,691

$

89,988

$

84,859

Provision for Loan Losses

$

1,470

$

1,355

$

1,185

$

4,298

$

3,821

Non-interest Income

$

8,909

$

12,961

$

8,540

$

29,973

$

27,702

Non-interest Expense

$

22,297

$

22,683

$

22,284

$

68,191

$

66,949

Net Income

$

11,313

$

15,261

$

8,794

$

35,527

$

26,515

PER SHARE DATA

Basic and Diluted Net Income Per Common Share

$

0.92

$

1.25

$

0.72

$

2.90

$

2.17

Cash Dividends Declared Per Common Share

$

$

0.51

$

$

0.51

$

0.50

Book Value Per Common Share

$

34.91

$

34.25

$

36.29

$

34.91

$

36.29

Tangible Book Value Per Common Share (c)

$

31.98

$

31.12

$

33.12

$

32.00

$

33.33

Basic Weighted Average Common Shares Outstanding

12,255

12,255

12,224

12,253

12,222

(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% for 2018 and 65% for prior years.
(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

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2018

2018

2017

2018

2017

Return on average assets

1.53

%

2.05

%

1.18

%

1.59

%

1.18

%

Return on average common shareholder's equity

10.58

%

14.53

%

7.98

%

11.23

%

8.15

%

Efficiency ratio

57.54

%

50.80

%

59.85

%

56.84

%

59.48

%

Average equity to average assets

14.42

%

14.13

%

14.83

%

14.15

%

14.54

%

Net interest margin (a)

4.29

%

4.58

%

4.14

%

4.31

%

4.08

%

Net charge-offs to average loans and leases

0.26

%

0.32

%

0.23

%

0.27

%

0.20

%

Loan and lease loss reserve to loans and leases

1.05

%

1.04

%

1.06

%

1.05

%

1.06

%

Loan and lease loss reserve to nonperforming loans

125.35

%

106.39

%

86.93

%

125.35

%

86.93

%

Nonperforming loans to loans and leases

0.83

%

0.98

%

1.22

%

0.83

%

1.22

%

Tier 1 leverage

14.45

%

14.05

%

14.05

%

14.45

%

14.05

%

Risk-based capital - Tier 1

18.36

%

18.09

%

18.04

%

18.36

%

18.04

%

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

Asset Quality

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2018

2018

2017

2018

2017

Accruing loans and leases past due 30-89 days

$

8,413

$

7,741

$

6,864

$

8,413

$

6,864

Accruing loans and leases past due 90 days or more

$

1,314

$

1,273

$

1,389

$

1,314

$

1,389

Nonaccrual loans and leases

$

10,035

$

10,773

$

13,965

$

10,035

$

13,965

Total troubled debt restructuring

$

4,847

$

6,819

$

7,424

$

4,847

$

7,424

Other real estate owned

$

520

$

497

$

1,866

$

520

$

1,866

Nonperforming loans and other real estate owned

$

16,716

$

19,362

$

24,644

$

16,716

$

24,644

Total nonperforming assets

$

20,139

$

22,812

$

38,336

$

20,139

$

38,336

Gross charge-offs

$

2,348

$

2,270

$

1,964

$

6,692

$

6,328

Recoveries

$

1,108

$

745

$

901

$

2,786

$

3,536

Net charge-offs/(recoveries)

$

1,240

$

1,525

$

1,063

$

3,906

$

2,792


CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share data)

September 30,
2018

December 31,
2017

(unaudited)

ASSETS

Cash and due from banks

$

50,018

$

74,107

Federal funds sold

7,600

Securities available-for-sale

785,693

814,931

Loans:

Commercial

1,150,536

1,139,490

Residential

443,264

436,143

Consumer

345,132

327,976

1,938,932

1,903,609

(Less) plus:

Net deferred loan costs

2,848

3,152

Allowance for loan losses

(20,301

)

(19,909

)

1,921,479

1,886,852

Restricted stock

10,390

10,379

Accrued interest receivable

14,630

12,913

Premises and equipment, net

46,985

48,272

Bank-owned life insurance

85,901

85,016

Goodwill

34,355

34,355

Other intangible assets

1,310

1,630

Other real estate owned

520

1,880

Other assets

22,054

30,333

TOTAL ASSETS

$

2,980,935

$

3,000,668

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits:

Non-interest-bearing

$

420,337

$

425,001

Interest-bearing:

Certificates of deposit exceeding the FDIC insurance limits

40,904

43,178

Other interest-bearing deposits

1,945,820

1,990,474

2,407,061

2,458,653

Short-term borrowings

58,680

57,686

FHLB advances

35,000

Other liabilities

52,420

70,760

TOTAL LIABILITIES

2,553,161

2,587,099

Shareholders’ equity

Common stock, $.125 stated value per share;

Authorized shares-40,000,000

Issued shares-14,612,540 in 2018 and 14,595,320 in 2017

Outstanding shares-12,255,045 in 2018 and 12,246,464 in 2017

1,824

1,822

Additional paid-in capital

76,181

75,624

Retained earnings

451,918

420,275

Accumulated other comprehensive loss

(32,310

)

(14,704

)

Less: Treasury shares at cost-2,357,495 in 2018 and 2,348,856 in 2017

(69,839

)

(69,448

)

TOTAL SHAREHOLDERS’ EQUITY

427,774

413,569

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

2,980,935

$

3,000,668


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Dollar amounts in thousands, except per share data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018

2017

2018

2017

(unaudited)

(unaudited)

INTEREST INCOME:

Loans, including related fees

$

25,581

$

23,119

$

73,982

$

67,385

Securities:

Taxable

3,601

3,500

13,141

10,887

Tax-exempt

1,873

1,859

5,573

5,529

Other

320

327

959

978

TOTAL INTEREST INCOME

31,375

28,805

93,655

84,779

INTEREST EXPENSE:

Deposits

2,365

1,561

6,254

4,307

Short-term borrowings

167

98

354

215

Other borrowings

16

38

63

82

TOTAL INTEREST EXPENSE

2,548

1,697

6,671

4,604

NET INTEREST INCOME

28,827

27,108

86,984

80,175

Provision for loan losses

1,470

1,185

4,298

3,821

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

27,357

25,923

82,686

76,354

NON-INTEREST INCOME:

Trust and financial services

1,133

1,194

3,888

3,660

Service charges and fees on deposit accounts

3,002

3,048

8,733

8,829

Other service charges and fees

3,256

3,070

9,747

9,369

Securities gains/(losses), net

3

27

5

44

Gain on sales of mortgage loans

618

535

1,458

1,255

Other

897

666

6,142

4,545

TOTAL NON-INTEREST INCOME

8,909

8,540

29,973

27,702

NON-INTEREST EXPENSE:

Salaries and employee benefits

12,485

12,489

38,028

37,780

Occupancy expense

1,894

1,769

5,308

5,298

Equipment expense

1,673

1,792

5,016

5,424

FDIC Expense

223

228

673

689

Other

6,022

6,006

19,166

17,758

TOTAL NON-INTEREST EXPENSE

22,297

22,284

68,191

66,949

INCOME BEFORE INCOME TAXES

13,969

12,179

44,468

37,107

Provision for income taxes

2,656

3,385

8,941

10,592

NET INCOME

11,313

8,794

35,527

26,515

OTHER COMPREHENSIVE INCOME

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

(3,702

)

(51

)

(15,585

)

8,182

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

281

184

(2,021

)

551

COMPREHENSIVE INCOME

$

7,892

$

8,927

$

17,921

$

35,248

PER SHARE DATA

Basic and Diluted Earnings per Share

$

0.92

$

0.72

$

2.90

$

2.17

Weighted average number of shares outstanding (in thousands)

12,255

12,224

12,253

12,222

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