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First Financial Corporation reports First Quarter results

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TERRE HAUTE, Ind., April 29, 2020 (GLOBE NEWSWIRE) -- First Financial Corporation (THFF) today announced results for the first quarter of 2020. For the three months ending March 31, 2020:

  • Net income was $12.2 million compared to $9.68 million for the same period of 2019;

  • Diluted net income per common share was $0.89 compared to $0.79 for the same period of 2019; and

  • Return on average assets was 1.21% compared to 1.29% for the three months ended March 31, 2019.

“We came off of a record year in 2019 and we were able to sustain our momentum through the first quarter.” said Norman L. Lowery, Chairman and Chief Executive Officer. “We are now faced with challenges unlike those we have ever seen before. In response to the spread of COVID-19, we implemented our pandemic response plan. In doing so, we have, among other things, shifted to drive-up and appointment only banking, restricted travel, facilitated remote working arrangements when possible, practiced social distancing and encouraged all of our associates to follow the Center for Disease Control guidelines. Protecting the health and safety of our associates, customers, their families and the communities we serve is our priority.”

Average Total Loans
Average total loans for the first quarter of 2020 were $2.64 billion versus $1.97 billion for the comparable period in 2019, an increase of $664.7 million or 33.70%.

Total Loans Outstanding
Total loans outstanding increased $638.6 million, or 32.19%, from $1.98 billion as of March 31, 2019 to $2.62 billion as of March 31, 2020.

“Each of the four states in which we do business have restricted the activities of non-essential businesses. These necessary restrictions have led to wide-spread furloughs, layoffs and reduced spending across our footprint.” stated Lowery. “In response, First Financial has sought to meet the needs of our customers by working tirelessly to implement the Small Business Administration’s Paycheck Protection Program enacted by the Coronavirus Aid, Relief and Economic Security (CARES) Act and by assisting our customers with reasonable loan accommodations. To date, we have approved and processed loan modifications totaling $246 million across all portfolios. Commercial loan requests have totaled $233 million with an additional $13 million to assist consumers.

Average Total Deposits
Average total deposits for the quarter ended March 31, 2020, were $3.27 billion versus $2.43 billion as of March 31, 2019.

Total Deposits
Total deposits were $3.29 billion as of March 31, 2020, compared to $2.42 billion as of March 31, 2019, an increase of $871.7 million or 36.03%.

Book Value Per Share
Book Value per share was $42.42 at March 31, 2020, compared to $37.66 at March 31, 2019.

Shareholder Equity
Shareholder equity at March 31, 2020, was $581.8 million compared to $462.8 million on March 31, 2019.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 12.41% at March 31, 2020, compared to 14.29% at March 31, 2019.

Net Interest Income
Net interest income for the first quarter of 2020 was $36.4 million, an increase of 23.53% over the $29.4 million reported for the same period of 2019.

Net Interest Margin
The tax-equivalent net interest margin for the quarter ended March 31, 2020, was 4.13% compared to the 4.31% reported at March 31, 2019.

Nonperforming Loans
Nonperforming loans as of March 31, 2020, were $17.6 million versus $16.1 million as of March 31, 2019. The ratio of nonperforming loans to total loans and leases was 0.67% as of March 31, 2020, versus 0.81% as of March 31, 2019.

Loan Loss Provision
The provision for loan losses for the three months ended March 31, 2020, was $2.69 million compared to the $1.47 million provision for the first quarter of 2019. The Corporation established a $1.0 million allowance for loan and lease losses in the first quarter of 2020 directly related to the initial estimate of losses resulting from the COVID-19 pandemic.

Net Charge-Offs
Net charge-offs were $1.57 million for the first quarter of 2020 compared to $946 thousand in the same period of 2019.

Allowance for Loan Losses
The Corporation’s allowance for loan losses as of March 31, 2020, was $21.1 million compared to $21.0 million as of March 31, 2019. The allowance for loan losses as a percent of total loans was 0.80% as of March 31, 2020, compared to 1.06% as of March 31, 2019.

Current Expected Credit Losses
As provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act the Corporation has elected to defer the implementation of the Current Expected Credit Loss accounting standard.

Non-Interest Income
Non-interest income for the three months ended March 31, 2020 and 2019 was $9.1 million and $7.6 million, respectively.

Non-Interest Expense
Non-interest expense for the three months ended March 31, 2020, was $27.6 million compared to $23.7 million in 2019.

Efficiency Ratio
The Corporation’s efficiency ratio was 59.25% for the quarter ending March 31, 2020, versus 62.29% for the same period in 2019.

Income Taxes
Income tax expense for the three months ended March 31, 2020, was $3.02 million versus $2.22 million for the same period in 2019. The effective tax rate for 2020 was 19.87% compared to 18.63% for 2019.

“For the last 186 years, First Financial has strived to meet the financial needs of our customers,” Lowery stated. “I am particularly proud of our associates’ resilience and steadfast commitment during these unprecedented times. No matter what the circumstance, the First team always rises to the challenge”.

About First Financial Corporation
First Financial Corporation (THFF) is the holding company for First Financial Bank N.A. and The Morris Plan Company of Terre Haute, Inc. First Financial Bank N.A. is the fifth oldest national bank in the United States, operating 81 banking centers in Illinois, Indiana, Kentucky and Tennessee. The Morris Plan Company of Terre Haute, Inc. is a state industrial chartered financial institution operating one office in Terre Haute, Indiana. 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

March 31,

December 31,

March 31,

2020

2019

2019

END OF PERIOD BALANCES

Assets

$

4,062,414

$

4,023,250

$

3,025,565

Deposits

$

3,291,231

$

3,275,357

$

2,419,556

Loans, including net deferred loan costs

$

2,622,637

$

2,656,390

$

1,984,053

Allowance for Loan Losses

$

21,063

$

19,943

$

20,960

Total Equity

$

581,771

$

557,608

$

462,796

Tangible Common Equity (a)

$

492,943

$

468,373

$

427,358

AVERAGE BALANCES

Total Assets

$

4,022,789

$

4,041,287

$

3,004,056

Earning Assets

$

3,625,679

$

3,662,390

$

2,824,524

Investments

$

988,523

$

1,000,488

$

850,749

Loans

$

2,637,036

$

2,658,582

$

1,972,333

Total Deposits

$

3,270,627

$

3,279,859

$

2,428,164

Interest-Bearing Deposits

$

2,739,394

$

3,072,566

$

1,999,272

Interest-Bearing Liabilities

$

106,843

$

118,605

$

71,923

Total Equity

$

569,696

$

575,908

$

450,666

INCOME STATEMENT DATA

Net Interest Income

$

36,350

$

38,475

$

29,426

Net Interest Income Fully Tax Equivalent (b)

$

37,409

$

39,594

$

30,401

Provision for Loan Losses

$

2,690

$

1,500

$

1,470

Non-interest Income

$

9,095

$

11,327

$

7,636

Non-interest Expense

$

27,554

$

29,754

$

23,693

Net Income

$

12,181

$

14,364

$

9,682

PER SHARE DATA

Basic and Diluted Net Income Per Common Share

$

0.89

$

1.05

$

0.79

Cash Dividends Declared Per Common Share

$

$

0.52

$

Book Value Per Common Share

$

42.42

$

40.58

$

37.66

Tangible Book Value Per Common Share (c)

$

35.94

$

35.46

$

34.77

Basic Weighted Average Common Shares Outstanding

13,740

13,726

12,282

(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,

2020

2019

2019

Return on average assets

1.21

%

1.42

%

1.29

%

Return on average common shareholder's equity

8.55

%

9.98

%

8.59

%

Efficiency ratio

59.25

%

58.43

%

62.29

%

Average equity to average assets

14.16

%

14.25

%

15.00

%

Net interest margin (a)

4.13

%

4.37

%

4.31

%

Net charge-offs to average loans and leases

0.24

%

0.20

%

0.19

%

Loan and lease loss reserve to loans and leases

0.80

%

0.75

%

1.06

%

Loan and lease loss reserve to nonperforming loans

119.70

%

130.01

%

130.28

%

Nonperforming loans to loans and leases

0.67

%

0.58

%

0.81

%

Tier 1 leverage

12.38

%

12.04

%

14.83

%

Risk-based capital - Tier 1

16.19

%

15.51

%

18.65

%

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

Asset Quality

Three Months Ended

March 31,

December 31,

March 31,

2020

2019

2019

Accruing loans and leases past due 30-89 days

$

27,037

$

24,040

$

11,402

Accruing loans and leases past due 90 days or more

$

1,430

$

1,610

$

507

Nonaccrual loans and leases

$

12,011

$

9,535

$

10,808

Total troubled debt restructuring

$

4,156

$

4,194

$

4,774

Other real estate owned

$

3,894

$

3,625

$

857

Nonperforming loans and other real estate owned

$

21,491

$

18,964

$

16,946

Total nonperforming assets

$

24,724

$

22,583

$

20,240

Gross charge-offs

$

2,904

$

3,456

$

2,109

Recoveries

$

1,334

$

2,100

$

1,163

Net charge-offs/(recoveries)

$

1,570

$

1,356

$

946


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

March 31,
2020

December 31,
2019

(unaudited)

ASSETS

Cash and due from banks

$

211,034

$

127,426

Federal funds sold

1

7,500

Securities available-for-sale

932,041

926,717

Loans:

Commercial

1,567,340

1,584,447

Residential

663,060

682,077

Consumer

387,980

386,006

2,618,380

2,652,530

(Less) plus:

Net deferred loan costs

4,257

3,860

Allowance for loan losses

(21,063

)

(19,943

)

2,601,574

2,636,447

Restricted stock

15,400

15,394

Accrued interest receivable

17,098

18,523

Premises and equipment, net

63,140

62,576

Bank-owned life insurance

94,633

94,251

Goodwill

78,592

78,592

Other intangible assets

10,236

10,643

Other real estate owned

3,894

3,625

Other assets

34,771

41,556

TOTAL ASSETS

$

4,062,414

$

4,023,250

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits:

Non-interest-bearing

$

531,758

$

547,189

Interest-bearing:

Certificates of deposit exceeding the FDIC insurance limits

118,162

126,738

Other interest-bearing deposits

2,641,311

2,601,430

3,291,231

3,275,357

Short-term borrowings

83,784

80,119

Other liabilities

78,134

79,193

TOTAL LIABILITIES

3,480,643

3,465,642

Shareholders’ equity

Common stock, $.125 stated value per share;

Authorized shares-40,000,000

Issued shares-16,075,154 in 2020 and 16,055,466 in 2019

Outstanding shares-13,714,524 in 2020 and 13,741,825 in 2019

2,005

2,005

Additional paid-in capital

139,898

139,694

Retained earnings

504,236

492,055

Accumulated other comprehensive income/(loss)

6,001

(7,501

)

Less: Treasury shares at cost-2,360,630 in 2020 and 2,313,641 in 2019

(70,369

)

(68,645

)

TOTAL SHAREHOLDERS’ EQUITY

581,771

557,608

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

4,062,414

$

4,023,250


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

Three Months Ended March 31,

2020

2019

(unaudited)

INTEREST INCOME:

Loans, including related fees

$

35,034

$

26,754

Securities:

Taxable

4,029

3,681

Tax-exempt

1,938

1,867

Other

402

314

TOTAL INTEREST INCOME

41,403

32,616

INTEREST EXPENSE:

Deposits

4,530

2,817

Short-term borrowings

267

323

Other borrowings

256

50

TOTAL INTEREST EXPENSE

5,053

3,190

NET INTEREST INCOME

36,350

29,426

Provision for loan losses

2,690

1,470

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

33,660

27,956

NON-INTEREST INCOME:

Trust and financial services

1,534

1,204

Service charges and fees on deposit accounts

2,998

2,624

Other service charges and fees

3,330

3,114

Securities gains (losses), net

194

(4

)

Gain on sales of mortgage loans

698

420

Other

341

278

TOTAL NON-INTEREST INCOME

9,095

7,636

NON-INTEREST EXPENSE:

Salaries and employee benefits

15,972

12,755

Occupancy expense

1,929

1,815

Equipment expense

2,461

1,817

FDIC Expense

(230

)

140

Other

7,422

7,166

TOTAL NON-INTEREST EXPENSE

27,554

23,693

INCOME BEFORE INCOME TAXES

15,201

11,899

Provision for income taxes

3,020

2,217

NET INCOME

12,181

9,682

OTHER COMPREHENSIVE INCOME

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

13,098

10,224

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

404

303

COMPREHENSIVE INCOME

$

25,683

$

20,209

PER SHARE DATA

Basic and Diluted Earnings per Share

$

0.89

$

0.79

Weighted average number of shares outstanding (in thousands)

13,740

12,282