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CST: 21/05/2019 20:36:54   

First Financial Corporation reports 2018 results

109 Days ago

TERRE HAUTE, Ind., Feb. 01, 2019 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today reported record net income of $46.6 million for the twelve months ended December 31, 2018 versus $29.1 million for the comparable period of 2017. Diluted net income per common share for the twelve months ended December 31, 2018 was $3.80 versus $2.38 for the comparable period of 2017. The increase in 2018 net income includes the 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. Return on assets for the twelve months ended December 31, 2018 was 1.57% compared to 0.98% for the twelve months ended December 31, 2017.

The Corporation also reported results for the fourth quarter of 2018. Net income increased to $11.1 million compared to $2.6 million for the same period of 2017. Diluted net income per common share increased to $0.90 from $0.21 for the comparable period of 2017 as 2017 results were impacted by the revaluation of the Corporation’s deferred tax assets resulting from the passage of the Tax Cuts and Jobs Act.

Average total loans for the fourth quarter of 2018 were $1.94 billion versus $1.87 billion for the comparable period in 2017, an increase of $65.9 million or 3.51%. Total loans outstanding were $1.95 billion as of December 31, 2018 compared to $1.91 billion as of December 31, 2017, a $47.2 million or 2.48% increase.

Average total deposits for the quarter ended December 31, 2018 were $2.45 billion versus $2.47 billion as of December 31, 2017. Total deposits were $2.44 billion as of December 31, 2018 compared to $2.46 billion as of December 31, 2017.

Net interest income for the fourth quarter of 2018 was $29.6 million compared to the $27.7 million reported for the same period of 2017. The net interest margin for the twelve months ended December 31, 2018 increased to 4.32% compared to 4.11% for the same period ending December 31, 2017.

The provision for loan losses for the three months ended December 31, 2018 was $1.5 million compared to $1.5 million for the fourth quarter of 2017. Net charge-offs were $1.3 million for the fourth quarter of 2018 compared to $1.4 million in the same period of 2017. The Corporation’s allowance for loan losses as of December 31, 2018 was $20.4 million compared to $19.9 million as of December 31, 2017. The allowance for loan losses as a percent of total loans was 1.05% as of December 31, 2018 compared to 1.04% as of December 31, 2017.

Nonperforming loans decreased 23.5% to $16.6 million as of December 31, 2018 versus $21.7 million as of December 31, 2017. The ratio of nonperforming loans to total loans and leases was 0.85% as of December 31, 2018 versus 1.14% as of December 31, 2017.

Non-interest income for the three months ended December 31, 2018 was $8.2 compared to $8.2 million for the period ending December 31, 2017. Non-interest income for the twelve months ending December 31, 2018 increased $2.3 million, or 6.31% to $38.2 million from $35.9 million for the same period of 2017.

Non-interest expense for the three months ended December 31, 2018 was $23.1 million compared to $21.8 million in 2017. The Corporation’s efficiency ratio was 59.49% for the quarter ending December 31, 2018 versus 58.05% for the same period in 2017. Non-interest expense for the twelve months ended December 31, 2018 was $91.3 million versus $88.7 million for the same period of 2017. The Corporation’s efficiency ratio for the twelve months ended December 31, 2018 was 57.49% versus 59.12% for same period 2017.

Book value per share was $36.06 at December 31, 2018 compared to $33.77 at December 31, 2017. Shareholders’ equity was $442.7 million compared to $413.6 million on December 31, 2017.

The company’s tangible common equity to tangible asset ratio was 13.69% at December 31, 2018, compared to 12.74% at December 31, 2017.

Norman L. Lowery, President and Chief Executive Officer, commented, “We are pleased with our record 2018 results. Our loan growth continues as has the growth in our net interest income. Asset quality remains strong.”
           
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 Year Ended
    December 31, September 30, December 31, December 31, December 31,
    2018 2018 2017 2018 2017
END OF PERIOD BALANCES            
  Assets   $ 3,008,718   $ 2,980,935   $ 3,000,668   $ 3,008,718   $ 3,000,668  
  Deposits   $ 2,436,727   $ 2,407,061   $ 2,458,653   $ 2,436,727   $ 2,458,653  
  Loans, including net deferred loan costs   $ 1,953,988   $ 1,941,780   $ 1,906,761   $ 1,953,988   $ 1,906,761  
  Allowance for Loan Losses   $ 20,436   $ 20,301   $ 19,909   $ 20,436   $ 19,909  
  Total Equity   $ 442,697   $ 427,774   $ 413,569   $ 442,697   $ 413,569  
  Tangible Common Equity (a)   $ 407,145   $ 392,109   $ 377,584   $ 407,145   $ 377,584  
             
AVERAGE BALANCES            
  Total Assets   $ 2,976,724   $ 2,965,825   $ 3,006,198   $ 2,976,517   $ 2,984,547  
  Earning Assets   $ 2,795,260   $ 2,785,582   $ 2,797,194   $ 2,788,756   $ 2,779,728  
  Investments   $ 849,818   $ 857,624   $ 895,401   $ 862,475   $ 911,973  
  Loans   $ 1,940,651   $ 1,926,051   $ 1,874,766   $ 1,922,588   $ 1,855,092  
  Total Deposits   $ 2,448,301   $ 2,435,281   $ 2,473,385   $ 2,450,224   $ 2,442,137  
  Interest-Bearing Deposits   $ 2,017,901   $ 2,010,467   $ 2,039,993   $ 2,024,585   $ 2,003,903  
  Interest-Bearing Liabilities   $ 49,362   $ 49,808   $ 27,357   $ 47,046   $ 47,007  
  Total Equity   $ 435,134   $ 427,530   $ 442,418   $ 424,274   $ 435,266  
             
INCOME STATEMENT DATA            
  Net Interest Income   $ 29,595   $ 28,827   $ 27,682   $ 116,579   $ 107,857  
  Net Interest Income Fully Tax Equivalent (b)   $ 30,591   $ 29,841   $ 29,316   $ 120,579   $ 114,175  
  Provision for Loan Losses   $ 1,470   $ 1,470   $ 1,474   $ 5,768   $ 5,295  
  Non-interest Income   $ 8,233   $ 8,909   $ 8,236   $ 38,206   $ 35,938  
  Non-interest Expense   $ 23,098   $ 22,297   $ 21,798   $ 91,289   $ 88,747  
  Net Income   $ 11,056   $ 11,313   $ 2,616   $ 46,583   $ 29,131  
             
PER SHARE DATA            
  Basic and Diluted Net Income Per Common Share   $ 0.90   $ 0.92   $ 0.21   $ 3.80   $ 2.38  
  Cash Dividends Declared Per Common Share   $ 0.51   $   $ 2.01   $ 1.02   $ 2.51  
  Book Value Per Common Share   $ 36.06   $ 34.91   $ 33.77   $ 36.06   $ 33.77  
  Tangible Book Value Per Common Share (c)   $ 32.58   $ 31.98   $ 30.83   $ 33.16   $ 30.83  
  Basic Weighted Average Common Shares Outstanding   12,265   12,255   12,234   12,256   12,225  

(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 Year Ended
    December 31, September 30, December 31, December 31, December 31,
    2018 2018 2017 2018 2017
Return on average assets   1.49 % 1.53 % 0.35 % 1.57 % 0.98 %
Return on average common shareholder's equity   9.93 % 10.58 % 2.37 % 10.98 % 6.69 %
Efficiency ratio   59.49 % 57.54 % 58.05 % 57.49 % 59.12 %
Average equity to average assets   14.96 % 14.42 % 14.72 % 14.25 % 14.58 %
Net interest margin (a)   4.35 % 4.29 % 4.20 % 4.32 % 4.11 %
Net charge-offs to average loans and leases   0.28 % 0.26 % 0.29 % 0.27 % 0.22 %
Loan and lease loss reserve to loans and leases   1.05 % 1.05 % 1.04 % 1.05 % 1.04 %
Loan and lease loss reserve to nonperforming loans   123.27 % 125.35 % 84.50 % 123.27 % 84.50 %
Nonperforming loans to loans and leases   0.85 % 0.83 % 1.14 % 0.85 % 1.14 %
Tier 1 leverage   14.59 % 14.45 % 13.31 % 14.59 % 13.31 %
Risk-based capital - Tier 1   18.48 % 18.36 % 17.01 % 18.48 % 17.01 %

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

Asset Quality   Three Months Ended Year Ended
    December 31, September 30, December 31, December 31, December 31,
    2018 2018 2017 2018 2017
Accruing loans and leases past due 30-89 days   $ 11,388   $ 8,413   $ 13,358   $ 11,388   $ 13,358  
Accruing loans and leases past due 90 days or more   $ 798   $ 1,314   $ 1,403   $ 798   $ 1,403  
Nonaccrual loans and leases   $ 10,974   $ 10,035   $ 13,245   $ 10,974   $ 13,245  
Total troubled debt restructuring   $ 4,806   $ 4,847   $ 7,034   $ 4,806   $ 7,034  
Other real estate owned   $ 603   $ 520   $ 1,880   $ 603   $ 1,880  
Nonperforming loans and other real estate owned   $ 17,181   $ 16,716   $ 23,562   $ 17,181   $ 23,562  
Total nonperforming assets   $ 20,439   $ 20,139   $ 38,167   $ 20,439   $ 38,167  
Gross charge-offs   $ 2,139   $ 2,348   $ 2,434   $ 8,831   $ 8,762  
Recoveries   $ 804   $ 1,108   $ 1,067   $ 3,590   $ 4,603  
Net charge-offs/(recoveries)   $ 1,335   $ 1,240   $ 1,367   $ 5,241   $ 4,159  


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

  December 31,
 2018
  December 31,
 2017
       
    (unaudited)
   
   
ASSETS      
Cash and due from banks $ 74,388     $ 74,107  
Federal funds sold      
Securities available-for-sale 784,916     814,931  
Loans:      
Commercial 1,166,352     1,139,490  
Residential 443,670     436,143  
Consumer 341,041     327,976  
  1,951,063     1,903,609  
(Less) plus:      
Net deferred loan costs 2,925     3,152  
Allowance for loan losses (20,436 )   (19,909 )
  1,933,552     1,886,852  
Restricted stock 10,390     10,379  
Accrued interest receivable 13,970     12,913  
Premises and equipment, net 46,554     48,272  
Bank-owned life insurance 86,186     85,016  
Goodwill 34,355     34,355  
Other intangible assets 1,197     1,630  
Other real estate owned 603     1,880  
Other assets 22,607     30,333  
TOTAL ASSETS $ 3,008,718     $ 3,000,668  
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Deposits:      
Non-interest-bearing $ 431,923     $ 425,001  
Interest-bearing:      
Certificates of deposit exceeding the FDIC insurance limits 42,284     43,178  
Other interest-bearing deposits 1,962,520     1,990,474  
  2,436,727     2,458,653  
Short-term borrowings 69,656     57,686  
FHLB advances      
Other liabilities 59,638     70,760  
TOTAL LIABILITIES 2,566,021     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-12,278,295 in 2018 and 12,246,464 in 2017 1,824     1,822  
Additional paid-in capital 76,774     75,624  
Retained earnings 456,712     420,275  
Accumulated other comprehensive loss (23,454 )   (14,704 )
Less: Treasury shares at cost-2,334,245 in 2018 and 2,348,856 in 2017 (69,159 )   (69,448 )
TOTAL SHAREHOLDERS’ EQUITY 442,697     413,569  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 3,008,718     $ 3,000,668  


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

  Years Ended December 31,
  2018   2017   2016
           
  (unaudited)
INTEREST INCOME:          
Loans, including related fees $ 100,541     $ 91,100     $ 86,128  
Securities:          
Taxable 16,942     14,325     14,506  
Tax-exempt 7,455     7,391     7,269  
Other 1,286     1,379     1,477  
TOTAL INTEREST INCOME 126,224     114,195     109,380  
INTEREST EXPENSE:          
Deposits 9,032     6,011     4,159  
Short-term borrowings 501     245     134  
Other borrowings 112     82     114  
TOTAL INTEREST EXPENSE 9,645     6,338     4,407  
NET INTEREST INCOME 116,579     107,857     104,973  
Provision for loan losses 5,768     5,295     3,300  
NET INTEREST INCOME AFTER PROVISION          
FOR LOAN LOSSES 110,811     102,562     101,673  
NON-INTEREST INCOME:          
Trust and financial services 5,286     5,001     5,208  
Service charges and fees on deposit accounts 11,733     11,895     10,530  
Other service charges and fees 13,012     12,499     12,307  
Securities gains, net 2     59     34  
Insurance commissions 144     74     2,346  
Gain on sale of certain assets and liabilities of insurance brokerage operation         12,822  
Gain on sales of mortgage loans 1,829     1,688     1,842  
Other 6,200     4,722     1,842  
TOTAL NON-INTEREST INCOME 38,206     35,938     46,931  
NON-INTEREST EXPENSE:          
Salaries and employee benefits 50,658     50,116     50,091  
Occupancy expense 7,030     6,897     6,865  
Equipment expense 6,827     7,186     7,300  
FDIC Expense 929     915     1,300  
Other 25,845     23,633     24,752  
TOTAL NON-INTEREST EXPENSE 91,289     88,747     90,308  
INCOME BEFORE INCOME TAXES 57,728     49,753     58,296  
Provision for income taxes 11,145     20,622     19,883  
NET INCOME 46,583     29,131     38,413  
OTHER COMPREHENSIVE INCOME          
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes (8,363 )   3,335     (10,130 )
Change in funded status of post retirement benefits, net of taxes (387 )   (3,875 )   5,367  
COMPREHENSIVE INCOME $ 37,833     $ 28,591     $ 33,650  
PER SHARE DATA          
Basic and Diluted Earnings per Share $ 3.80     $ 2.38     $ 3.12  
Weighted average number of shares outstanding (in thousands) 12,256     12,225     12,317  


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