U.S. markets closed
  • S&P 500

    4,232.60
    +30.98 (+0.74%)
     
  • Dow 30

    34,777.76
    +229.23 (+0.66%)
     
  • Nasdaq

    13,752.24
    +119.39 (+0.88%)
     
  • Russell 2000

    2,271.63
    +30.21 (+1.35%)
     
  • Crude Oil

    64.82
    +0.11 (+0.17%)
     
  • Gold

    1,832.00
    +16.30 (+0.90%)
     
  • Silver

    27.57
    +0.09 (+0.32%)
     
  • EUR/USD

    1.2167
    +0.0098 (+0.82%)
     
  • 10-Yr Bond

    1.5770
    +0.0160 (+1.02%)
     
  • GBP/USD

    1.3990
    +0.0098 (+0.70%)
     
  • USD/JPY

    108.5400
    -0.5450 (-0.50%)
     
  • BTC-USD

    58,877.39
    +1,524.62 (+2.66%)
     
  • CMC Crypto 200

    1,480.07
    +44.28 (+3.08%)
     
  • FTSE 100

    7,129.71
    +53.54 (+0.76%)
     
  • Nikkei 225

    29,357.82
    +26.45 (+0.09%)
     

First Financial Corporation Reports Third Quarter Results

  • Oops!
    Something went wrong.
    Please try again later.
First Financial Corporation Indiana
·14 min read
  • Oops!
    Something went wrong.
    Please try again later.

TERRE HAUTE, Ind., Oct. 28, 2020 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2020. For the three months ending September 30, 2020:

  • Net income was $14.0 million compared to $12.3 million for the same period of 2019;

  • Diluted net income per common share of $1.02 compared to $0.93 for the same period of 2019; and

  • Return on average assets was 1.28% compared to 1.33% for the three months ended September 30, 2019.

The Corporation further reported results for the nine months ending September 30, 2020:

  • Net income was $38.1 million compared to $34.5 million for the same period of 2019;

  • Diluted net income per common share of $2.78 compared to $2.74 for the same period of 2019; and

  • Return on average assets was 1.20% compared to 1.42% for the nine months ended September 30, 2019.

“We are pleased with our third quarter results,” said Norman L. Lowery, Chairman and Chief Executive Officer. “In light of COVID-19 and the continuing restrictions in the four states in which we operate, we had a very solid quarter. During the quarter we focused on helping our clients who participated in the Small Business Administration’s Paycheck Protection Program enacted by the Coronavirus Aid, Relief and Economic Security (CARES) Act apply for loan forgiveness.” Separately, we approved and processed loan modifications totaling $351 million across all portfolios. As of September 30, 2020 all but $122.4 million have returned to principal and interest payments.

Average Total Loans
Average total loans for the third quarter of 2020 were $2.77 billion versus $2.47 billion for the comparable period in 2019, an increase of $297.0 million or 12.00%.

Total Loans Outstanding
Total loans outstanding increased $85.0 million, or 3.19%, from $2.67 billion as of September 30, 2019 to $2.75 billion as of September 30, 2020.

Mr. Lowery added “We also devoted considerable effort to assisting customers refinance their existing mortgages or obtain new mortgages. This resulted in a very successful quarter for our mortgage banking department.”

Average Total Deposits
Average total deposits for the quarter ended September 30, 2020, were $3.59 billion versus $3.02 billion as of September 30, 2019, an increase of $576 million or 19.08%.

Total Deposits
Total deposits were $3.60 billion as of September 30, 2020, compared to $3.22 billion as of September 30, 2019, an increase of $384 million or 11.93%. On a linked quarter basis, total deposits increased $34.5 million from $3.57 billion for the quarter ending June 30, 2020.

Book Value Per Share
Book Value per share was $44.27 at September 30, 2020, compared to $40.59 at September 30, 2019.

Shareholder Equity
Shareholder equity at September 30, 2020, was $607.1 million compared to $556.6 million on September 30, 2019.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 12.07% at September 30, 2020, compared to 12.04% at September 30, 2019.

Net Interest Income
Net interest income for the third quarter of 2020 was $36.5 million, an increase of 7.45% over the $34.0 million reported for the same period of 2019.

Net Interest Margin
The net interest margin for the quarter ended September 30, 2020, was 3.99% compared to the 4.00% reported at September 30, 2019.

Nonperforming Loans
Nonperforming loans as of September 30, 2020, were $23.7 million versus $14.4 million as of September 30, 2019. The ratio of nonperforming loans to total loans and leases was 0.86% as of September 30, 2020, versus 0.54% as of September 30, 2019.

Loan Loss Provision
The provision for loan losses for the three months ended September 30, 2020, was $4.43 million compared to the $1.50 million provision for the third quarter of 2019. The Corporation provided $1.0 million for loan and lease losses in the third quarter of 2020, increasing the year-to-date total to $3.0 million directly related to the estimate of losses resulting from the COVID-19 pandemic.

“Each of the four states in which we do business continue to restrict activities affecting both our business and that of our customers, which may in turn affect loan performance,” stated Lowery.

Net Charge-Offs
Net charge-offs were $750 thousand for the third quarter of 2020 compared to $1.95 million in the same period of 2019.

Allowance for Loan Losses
The Corporation’s allowance for loan losses as of September 30, 2020, was $27.0 million compared to $19.8 million as of September 30, 2019. The allowance for loan losses as a percent of total loans was 0.98% as of September 30, 2020, compared to 0.74% as of September 30, 2019. The Corporation's fair value adjustment due to purchase credit impaired loans was $5.6 million as of September 30, 2020.

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 September 30, 2020 and 2019 was $11.7 million and $9.7 million, respectively.

Non-Interest Expense
Non-interest expense for the three months ended September 30, 2020, was $27.1 million compared to $27.4 million in 2019.

Efficiency Ratio
The Corporation’s efficiency ratio was 54.97% for the quarter ending September 30, 2020, versus 61.18% for the same period in 2019.

Income Taxes
Income tax expense for the nine months ended September 30, 2020, was $8.6 million versus $8.0 million for the same period in 2019. The effective tax rate for 2020 was 18.47% compared to 18.82% for 2019.

“Despite the challenges presented by the pandemic, First Financial has continued to meet the financial needs of our customers,” Lowery stated. “I am very proud of our associates and of their unwavering commitment to serve our customers in these challenging times.”

About First Financial Corporation
First Financial Corporation (NASDAQ: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

Year Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2020

2020

2019

2020

2019

END OF PERIOD BALANCES

Assets

$

4,389,996

$

4,368,112

$

3,988,119

$

4,389,996

$

3,988,119

Deposits

$

3,604,353

$

3,569,893

$

3,220,122

$

3,604,353

$

3,220,122

Loans, including net deferred loan costs

$

2,753,493

$

2,777,083

$

2,668,476

$

2,753,493

$

2,668,476

Allowance for Loan Losses

$

26,960

$

23,285

$

19,799

$

26,960

$

19,799

Total Equity

$

607,095

$

590,284

$

556,582

$

607,095

$

556,582

Tangible Common Equity (a)

$

519,098

$

501,863

$

469,904

$

519,098

$

469,904

AVERAGE BALANCES

Total Assets

$

4,379,798

$

4,317,011

$

3,680,041

$

4,239,866

$

3,239,295

Earning Assets

$

3,776,803

$

3,720,477

$

3,468,396

$

3,707,653

$

3,043,010

Investments

$

1,008,303

$

989,545

$

995,092

$

995,457

$

899,188

Loans

$

2,768,003

$

2,727,820

$

2,471,346

$

2,710,953

$

2,140,890

Total Deposits

$

3,592,633

$

3,526,529

$

3,017,085

$

3,463,263

$

2,636,487

Interest-Bearing Deposits

$

2,887,575

$

2,858,594

$

2,914,816

$

2,828,521

$

2,315,658

Interest-Bearing Liabilities

$

108,236

$

121,791

$

113,019

$

112,290

$

74,737

Total Equity

$

603,067

$

591,522

$

491,586

$

588,095

$

471,136

INCOME STATEMENT DATA

Net Interest Income

$

36,531

$

35,895

$

33,999

$

108,776

$

93,177

Net Interest Income Fully Tax Equivalent (b)

$

37,612

$

36,962

$

35,054

$

111,983

$

96,176

Provision for Loan Losses

$

4,425

$

2,965

$

1,500

$

10,080

$

3,200

Non-interest Income

$

11,739

$

8,776

$

9,746

$

29,610

$

27,125

Non-interest Expense

$

27,130

$

26,883

$

27,409

$

81,567

$

74,594

Net Income

$

14,000

$

11,924

$

12,257

$

38,105

$

34,508

PER SHARE DATA

Basic and Diluted Net Income Per Common Share

$

1.02

$

0.87

$

0.93

$

2.78

$

2.74

Cash Dividends Declared Per Common Share

$

$

0.52

$

$

0.52

$

0.52

Book Value Per Common Share

$

44.27

$

43.04

$

40.59

$

44.27

$

40.59

Tangible Book Value Per Common Share (c)

$

37.56

$

36.68

$

30.81

$

37.85

$

34.27

Basic Weighted Average Common Shares Outstanding

13,715

13,715

13,141

13,723

12,574

(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

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2020

2020

2019

2020

2019

Return on average assets

1.28

%

1.10

%

1.33

%

1.20

%

1.42

%

Return on average common shareholder's equity

9.29

%

8.06

%

9.97

%

8.62

%

9.74

%

Efficiency ratio

54.97

%

58.78

%

61.18

%

57.61

%

60.50

%

Average equity to average assets

13.77

%

13.70

%

13.36

%

13.87

%

14.54

%

Net interest margin (a)

3.99

%

3.97

%

4.00

%

4.03

%

4.21

%

Net charge-offs to average loans and leases

0.11

%

0.11

%

0.32

%

0.15

%

0.24

%

Loan and lease loss reserve to loans and leases

0.98

%

0.84

%

0.74

%

0.98

%

0.74

%

Loan and lease loss reserve to nonperforming loans

113.89

%

101.12

%

137.45

%

113.89

%

137.45

%

Nonperforming loans to loans and leases

0.86

%

0.83

%

0.54

%

0.86

%

0.54

%

Tier 1 leverage

11.81

%

11.64

%

13.07

%

11.81

%

13.07

%

Risk-based capital - Tier 1

15.70

%

15.44

%

15.09

%

15.70

%

15.09

%

(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,

2020

2020

2019

2020

2019

Accruing loans and leases past due 30-89 days

$

13,490

$

15,358

$

10,462

$

13,490

$

10,462

Accruing loans and leases past due 90 days or more

$

2,948

$

4,438

$

744

$

2,948

$

744

Nonaccrual loans and leases

$

16,628

$

14,634

$

9,533

$

16,628

$

9,533

Total troubled debt restructuring

$

4,097

$

3,899

$

4,127

$

4,097

$

4,127

Other real estate owned

$

3,577

$

3,577

$

3,717

$

3,577

$

3,717

Nonperforming loans and other real estate owned

$

27,138

$

26,548

$

18,121

$

27,138

$

18,121

Total nonperforming assets

$

30,174

$

29,493

$

21,725

$

30,174

$

21,725

Gross charge-offs

$

1,998

$

1,540

$

2,926

$

6,442

$

6,941

Recoveries

$

1,248

$

797

$

975

$

3,379

$

3,104

Net charge-offs/(recoveries)

$

750

$

743

$

1,951

$

3,063

$

3,837

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

September 30,
2020

December 31,
2019

(unaudited)

ASSETS

Cash and due from banks

$

388,440

$

127,426

Federal funds sold

659

7,500

Securities available-for-sale

956,239

926,717

Loans:

Commercial

1,657,083

1,584,447

Residential

626,441

682,077

Consumer

468,684

386,006

2,752,208

2,652,530

(Less) plus:

Net deferred loan costs

1,285

3,860

Allowance for loan losses

(26,960

)

(19,943

)

2,726,533

2,636,447

Restricted stock

15,012

15,394

Accrued interest receivable

18,482

18,523

Premises and equipment, net

62,968

62,576

Bank-owned life insurance

95,459

94,251

Goodwill

78,592

78,592

Other intangible assets

9,405

10,643

Other real estate owned

3,465

3,625

Other assets

34,742

41,556

TOTAL ASSETS

$

4,389,996

$

4,023,250

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits:

Non-interest-bearing

$

709,591

$

547,189

Interest-bearing:

Certificates of deposit exceeding the FDIC insurance limits

109,830

126,738

Other interest-bearing deposits

2,784,932

2,601,430

3,604,353

3,275,357

Short-term borrowings

95,249

80,119

Other liabilities

72,454

79,193

TOTAL LIABILITIES

3,782,901

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

2,006

2,005

Additional paid-in capital

140,308

139,694

Retained earnings

523,029

492,055

Accumulated other comprehensive income/(loss)

12,121

(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

607,095

557,608

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

4,389,996

$

4,023,250

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,

2020

2019

2020

2019

(unaudited)

INTEREST INCOME:

Loans, including related fees

$

34,077

$

33,363

$

102,335

$

87,650

Securities:

Taxable

3,005

3,907

10,658

11,104

Tax-exempt

1,994

1,959

5,940

5,699

Other

463

366

1,265

1,017

TOTAL INTEREST INCOME

39,539

39,595

120,198

105,470

INTEREST EXPENSE:

Deposits

2,689

5,069

10,238

11,202

Short-term borrowings

107

305

475

786

Other borrowings

212

222

709

305

TOTAL INTEREST EXPENSE

3,008

5,596

11,422

12,293

NET INTEREST INCOME

36,531

33,999

108,776

93,177

Provision for loan losses

4,425

1,500

10,080

3,200

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

32,106

32,499

98,696

89,977

NON-INTEREST INCOME:

Trust and financial services

1,210

1,329

4,032

3,657

Service charges and fees on deposit accounts

2,516

3,227

7,616

8,586

Other service charges and fees

4,269

3,720

11,468

10,242

Securities gains (losses), net

5

6

230

18

Gain on sales of mortgage loans

2,910

865

4,813

1,781

Other

829

599

1,451

2,841

TOTAL NON-INTEREST INCOME

11,739

9,746

29,610

27,125

NON-INTEREST EXPENSE:

Salaries and employee benefits

15,474

14,031

45,769

39,332

Occupancy expense

2,003

1,804

6,094

5,432

Equipment expense

2,739

2,117

7,873

5,685

FDIC Expense

135

155

(46

)

494

Other

6,779

9,302

21,877

23,651

TOTAL NON-INTEREST EXPENSE

27,130

27,409

81,567

74,594

INCOME BEFORE INCOME TAXES

16,715

14,836

46,739

42,508

Provision for income taxes

2,715

2,579

8,634

8,000

NET INCOME

14,000

12,257

38,105

34,508

OTHER COMPREHENSIVE INCOME

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

2,223

4,124

18,451

22,689

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

383

303

1,171

910

COMPREHENSIVE INCOME

$

16,606

$

16,684

$

57,727

$

58,107

PER SHARE DATA

Basic and Diluted Earnings per Share

$

1.02

$

0.93

$

2.78

$

2.74

Weighted average number of shares outstanding (in thousands)

13,715

13,141

13,723

12,574