FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
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| | For more information contact: |
| July 28, 2015 | Rodger A. McHargue at (812) 238-6334 |
First Financial Corporation reports 2nd Quarter results
TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2015. Net income was $6.9 million compared to $8.5 million for the same period of 2014. The variance in income was primarily driven by negative provisioning in 2014 and higher pension expense partially due to increased benefit plan cost from the use of a lower discount rate and the use of the new RP-2014 Mortality Table. Diluted net income per common share decreased to $0.54 from $0.63 for the comparable period of 2014.
The Corporation further reported net income of $14.7 million for the six months ended June 30, 2015 versus $16.3 million for the comparable period of 2014. Diluted net income per common share was $1.14 for the six months ended June 30, 2015 versus $1.22 for the comparable period of 2014. Return on assets for the six months ended June 30, 2015 was 0.98% compared to 1.08% for the six months ended June 30, 2014.
Book value per share was $31.09 at June 30, 2015, a 2.35% increase from the $30.38 at June 30, 2014. Shareholders’ equity was $399.1 million compared to $405.7 million on June 30, 2014 due in part to an $11.4 million increase in the unrealized pension expense as a result of the factors discussed above as well as the increased amount of treasury shares as a result of the stock repurchase plan.
On August 25, 2014 the Corporation announced a stock repurchase plan to acquire 5% of the Corporation’s outstanding common stock. During the second quarter of 2015 the Corporation repurchased 118,053 shares as part of the repurchase plan, bringing the total shares repurchased to date to 563,193.
Average total loans for the second quarter of 2015 were $1.77 billion, a decrease of $19.5 million versus the $1.79 billion for the comparable period in 2014. At June 30, 2015, total loans outstanding were $1.78 billion, a decrease from $1.79 billion at of June 30, 2014. On a linked quarter basis, average total loans increased $8.2 million, or .47%, from $1.76 billion for the quarter ending March 31, 2015.
Average total deposits for the quarter ended June 30, 2015 were $2.46 billion versus $2.48 billion as of June 30, 2014. Higher cost time deposits decreased to $451.4 million from $540 million for the same period of 2014. Lower cost demand and savings deposits increased to $2.0 billion from $1.9 billion for the same period of 2014. The cost of funds for deposits was .21% versus .26% for the same period of 2014.
The company’s tangible common equity to tangible asset ratio was 12.15% at June 30, 2015, compared to 12.10% at June 30, 2014.
Net interest income for the second quarter of 2015 was $25.9 million compared to the $26.6 million reported for the same period of 2014. The net interest margin for the six months ended June 30, 2015 was 4.00% compared to the 4.09% reported at June 30, 2014. The net interest margin has been impacted by the effects of the continued low interest rate environment on loans and investments.
The provision for loan losses for the three months ended June 30, 2015 was $1.15 million compared to a negative $356 thousand provision for the second quarter of 2014. Net charge-offs were $640 thousand for the second quarter of 2015 compared to $2.03 million in the same period of 2014. The Corporation’s allowance for loan losses as of June 30, 2015 was $19.9 million compared to $18.3 million as of June 30, 2014. The allowance for loan losses as a percent of total loans was 1.11% as of June 30, 2015 compared to 1.02% as of June 30, 2014.
Nonperforming loans decreased 8.49% to $35.8 million as of June 30, 2015 versus $39.1 million as of June 30, 2014. The ratio of nonperforming loans to total loans and leases was 2.01% as of June 30, 2015 versus 2.18% as of June 30, 2014.
Non-interest income for the three months ended June 30, 2015 and 2014 was $9.8 compared to $9.6 million in 2014, a 2.23% increase.
Non-interest expense for the three months ended June 30, 2015 increased $1.26 million to $25.3 million compared to $24.0 million in 2014. Employee benefits increased $1.22 million partially due to increased benefit plan cost from the use of a lower discount rate and the use of the new RP-2014 Mortality Table. The pension plan was frozen for the majority of employees as of December 31, 2012. The Corporation’s efficiency ratio was 65.84% for the quarter ending June 30, 2015 versus 62.43% for the same period in 2014.
First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana.
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| | | | | | | | | | | | | | | | |
| | | Three Months Ended | Six Months Ended |
| | | June 30, | March 31, | June 30, | June 30, | June 30, |
| | | 2015 | 2015 | 2014 | 2015 | 2014 |
| END OF PERIOD BALANCES | | | | | | |
| Assets | | $ | 2,973,821 |
| $ | 2,995,836 |
| $ | 3,033,923 |
| $ | 2,973,821 |
| $ | 3,033,923 |
|
| Deposits | | $ | 2,398,574 |
| $ | 2,463,949 |
| $ | 2,433,083 |
| $ | 2,398,574 |
| $ | 2,433,083 |
|
| Loans | | $ | 1,783,788 |
| $ | 1,756,604 |
| $ | 1,792,662 |
| $ | 1,783,788 |
| $ | 1,792,662 |
|
| Allowance for Loan Losses | | $ | 19,861 |
| $ | 19,351 |
| $ | 18,255 |
| $ | 19,861 |
| $ | 18,255 |
|
| Total Equity | | $ | 399,058 |
| $ | 409,027 |
| $ | 405,746 |
| $ | 399,058 |
| $ | 405,746 |
|
| Tangible Common Equity | | $ | 355,997 |
| $ | 365,853 |
| $ | 361,869 |
| $ | 355,997 |
| $ | 361,869 |
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| | | | | | | |
| AVERAGE BALANCES | | | | | | |
| Total Assets | | $ | 2,990,020 |
| $ | 2,988,154 |
| $ | 3,016,643 |
| $ | 2,989,087 |
| $ | 3,023,966 |
|
| Earning Assets | | $ | 2,760,188 |
| $ | 2,748,730 |
| $ | 2,791,787 |
| $ | 2,754,459 |
| $ | 2,793,309 |
|
| Investments | | $ | 977,537 |
| $ | 969,315 |
| $ | 997,719 |
| $ | 973,426 |
| $ | 995,310 |
|
| Loans | | $ | 1,768,758 |
| $ | 1,760,524 |
| $ | 1,788,260 |
| $ | 1,764,641 |
| $ | 1,785,549 |
|
| Total Deposits | | $ | 2,462,284 |
| $ | 2,461,400 |
| $ | 2,480,304 |
| $ | 2,461,842 |
| $ | 2,486,237 |
|
| Interest-Bearing Deposits | | $ | 1,915,213 |
| $ | 1,917,509 |
| $ | 1,959,944 |
| $ | 1,916,361 |
| $ | 1,967,016 |
|
| Interest-Bearing Liabilities | | $ | 43,413 |
| $ | 44,789 |
| $ | 78,317 |
| $ | 44,101 |
| $ | 84,737 |
|
| Total Equity | | $ | 407,387 |
| $ | 401,423 |
| $ | 404,755 |
| $ | 404,405 |
| $ | 400,607 |
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| | | | | | | |
| INCOME STATEMENT DATA | | | | | | |
| Net Interest Income | | $ | 25,924 |
| $ | 25,995 |
| $ | 26,606 |
| $ | 51,919 |
| $ | 53,748 |
|
| Net Interest Income Fully Tax Equivalent | | $ | 27,491 |
| $ | 27,559 |
| $ | 28,152 |
| $ | 55,050 |
| $ | 56,817 |
|
| Provision for Loan Losses | | $ | 1,150 |
| $ | 1,450 |
| $ | (356 | ) | $ | 2,600 |
| $ | 1,604 |
|
| Non-interest Income | | $ | 9,778 |
| $ | 10,061 |
| $ | 9,565 |
| $ | 19,839 |
| $ | 19,676 |
|
| Non-interest Expense | | $ | 25,310 |
| $ | 23,993 |
| $ | 24,049 |
| $ | 49,303 |
| $ | 47,754 |
|
| Net Income | | $ | 6,923 |
| $ | 7,761 |
| $ | 8,488 |
| $ | 14,684 |
| $ | 16,319 |
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| | | | | | | |
| PER SHARE DATA | | | | | | |
| Basic and Diluted Net Income Per Common Share | | $ | 0.54 |
| $ | 0.60 |
| $ | 0.63 |
| $ | 1.14 |
| $ | 1.22 |
|
| Cash Dividends Declared Per Common Share | | $ | 0.49 |
| $ | — |
| $ | 0.49 |
| $ | 0.49 |
| $ | 0.49 |
|
| Book Value Per Common Share | | $ | 31.09 |
| $ | 31.58 |
| $ | 30.38 |
| $ | 31.09 |
| $ | 30.38 |
|
| Tangible Book Value Per Common Share | | $ | 28.23 |
| $ | 28.27 |
| $ | 26.62 |
| $ | 27.74 |
| $ | 27.10 |
|
| Basic Weighted Average Common Shares Outstanding | | 12,903 |
| 12,948 |
| 13,355 |
| 12,925 |
| 13,352 |
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| | | | | | | | | | | |
| Key Ratios | | Three Months Ended | Six Months Ended |
| | | June 30, | March 31, | June 30, | June 30, | June 30, |
| | | 2015 | 2015 | 2014 | 2015 | 2014 |
| Return on average assets | | 0.93 | % | 1.04 | % | 1.13 | % | 0.98 | % | 1.08 | % |
| Return on average common shareholder's equity | | 6.80 | % | 7.73 | % | 8.39 | % | 7.26 | % | 8.15 | % |
| Efficiency ratio | | 67.91 | % | 63.78 | % | 63.76 | % | 65.84 | % | 62.43 | % |
| Average equity to average assets | | 13.62 | % | 13.43 | % | 13.42 | % | 13.53 | % | 13.25 | % |
| Net interest margin | | 3.99 | % | 4.01 | % | 4.08 | % | 4.00 | % | 4.09 | % |
| Net charge-offs to average loans and leases | | 0.14 | % | 0.21 | % | 0.30 | % | 0.18 | % | 0.30 | % |
| Loan and lease loss reserve to loans and leases | | 1.11 | % | 1.10 | % | 1.02 | % | 1.11 | % | 1.02 | % |
| Loan and lease loss reserve to nonperforming loans and other real estate | | 55.45 | % | 56.31 | % | 46.64 | % | 55.45 | % | 46.64 | % |
| Nonperforming loans to loans | | 2.01 | % | 1.96 | % | 2.18 | % | 2.01 | % | 2.18 | % |
| Tier 1 leverage | | 12.62 | % | 12.74 | % | 16.75 | % | 12.62 | % | 16.75 | % |
| Risk-based capital - Tier 1 | | 17.30 | % | 17.66 | % | 17.58 | % | 17.30 | % | 17.58 | % |
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| | | | | | | | | | | | | | | | |
| Asset Quality | | Three Months Ended | Six Months Ended |
| | | June 30, | March 31, | June 30, | June 30, | June 30, |
| | | 2015 | 2015 | 2014 | 2015 | 2014 |
| Accruing loans and leases past due 30-89 days | | $ | 5,193 |
| $ | 7,159 |
| $ | 8,511 |
| $ | 5,193 |
| $ | 8,511 |
|
| Accruing loans and leases past due 90 days or more | | $ | 690 |
| $ | 640 |
| $ | 824 |
| $ | 690 |
| $ | 824 |
|
| Nonaccrual loans and leases | | $ | 16,553 |
| $ | 14,868 |
| $ | 18,406 |
| $ | 16,553 |
| $ | 18,406 |
|
| Nonperforming loans and other real estate | | $ | 35,819 |
| $ | 34,366 |
| $ | 39,141 |
| $ | 35,819 |
| $ | 39,141 |
|
| Other real estate owned | | $ | 3,625 |
| $ | 3,830 |
| $ | 5,190 |
| $ | 3,625 |
| $ | 5,190 |
|
| Total nonperforming assets | | $ | 50,630 |
| $ | 49,617 |
| $ | 53,395 |
| $ | 50,630 |
| $ | 53,395 |
|
| Total troubled debt restructurings | | $ | 14,951 |
| $ | 15,028 |
| $ | 14,721 |
| $ | 14,951 |
| $ | 14,721 |
|
| Gross charge-offs | | $ | 1,823 |
| $ | 1,823 |
| $ | 4,486 |
| $ | 3,302 |
| $ | 4,486 |
|
| Recoveries | | $ | 885 |
| $ | 885 |
| $ | 1,768 |
| $ | 1,724 |
| $ | 1,768 |
|
| Net charge-offs/(recoveries) | | $ | 938 |
| $ | 938 |
| $ | 2,718 |
| $ | 1,578 |
| $ | 2,718 |
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CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data) |
| | | | | | | |
| | June 30,
2015 | | December 31,
2014 |
| | (unaudited) |
| ASSETS | |
| | |
|
| Cash and due from banks | $ | 60,613 |
| | $ | 78,102 |
|
| Federal funds sold | 2,000 |
| | 8,000 |
|
| Securities available-for-sale | 901,550 |
| | 897,053 |
|
| Loans: | |
| | |
|
| Commercial | 1,068,832 |
| | 1,044,522 |
|
| Residential | 445,107 |
| | 469,172 |
|
| Consumer | 267,884 |
| | 266,656 |
|
| | 1,781,823 |
| | 1,780,350 |
|
| (Less) plus: | |
| | |
|
| Net deferred loan costs | 1,965 |
| | 1,078 |
|
| Allowance for loan losses | (19,861 | ) | | (18,839 | ) |
| | 1,763,927 |
| | 1,762,589 |
|
| Restricted stock | 10,828 |
| | 16,404 |
|
| Accrued interest receivable | 11,116 |
| | 11,593 |
|
| Premises and equipment, net | 50,348 |
| | 51,802 |
|
| Bank-owned life insurance | 81,568 |
| | 80,730 |
|
| Goodwill | 39,489 |
| | 39,489 |
|
| Other intangible assets | 3,572 |
| | 3,901 |
|
| Other real estate owned | 3,625 |
| | 3,965 |
|
| Other assets | 45,185 |
| | 48,857 |
|
| TOTAL ASSETS | $ | 2,973,821 |
| | $ | 3,002,485 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | |
|
| Deposits: | |
| | |
|
| Non-interest-bearing | $ | 525,851 |
| | $ | 556,389 |
|
| Interest-bearing: | |
| | |
|
| Certificates of deposit exceeding the FDIC insurance limits | 48,893 |
| | 53,733 |
|
| Other interest-bearing deposits | 1,823,830 |
| | 1,847,075 |
|
| | 2,398,574 |
| | 2,457,197 |
|
| Short-term borrowings | 84,819 |
| | 48,015 |
|
| FHLB advances | 10,738 |
| | 12,886 |
|
| Other liabilities | 80,632 |
| | 90,173 |
|
| TOTAL LIABILITIES | 2,574,763 |
| | 2,608,271 |
|
| | | | |
| Shareholders’ equity | |
| | |
|
| Common stock, $.125 stated value per share; | | | |
| Authorized shares-40,000,000 | | | |
| Issued shares-14,557,815 in 2015 and 14,538,132 in 2014 | | | |
| Outstanding shares-12,834,116 in 2015 and 12,942,175 in 2014 | 1,816 |
| | 1,815 |
|
| Additional paid-in capital | 72,746 |
| | 72,405 |
|
| Retained earnings | 386,363 |
| | 377,970 |
|
| Accumulated other comprehensive loss | (14,048 | ) | | (14,529 | ) |
| Less: Treasury shares at cost-1,723,699 in 2015 and 1,595,957 in 2014 | (47,819 | ) | | (43,447 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 399,058 |
| | 394,214 |
|
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,973,821 |
| | $ | 3,002,485 |
|
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
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| | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) |
| INTEREST INCOME: | |
| | |
| | | | |
| Loans, including related fees | $ | 20,763 |
| | $ | 21,625 |
| | $ | 41,570 |
| | $ | 43,843 |
|
| Securities: | |
| | |
| | | | |
| Taxable | 3,991 |
| | 4,298 |
| | 8,052 |
| | 8,742 |
|
| Tax-exempt | 1,790 |
| | 1,766 |
| | 3,569 |
| | 3,512 |
|
| Other | 433 |
| | 426 |
| | 864 |
| | 842 |
|
| TOTAL INTEREST INCOME | 26,977 |
| | 28,115 |
| | 54,055 |
| | 56,939 |
|
| INTEREST EXPENSE: | |
| | |
| | |
| | |
|
| Deposits | 997 |
| | 1,233 |
| | 2,017 |
| | 2,523 |
|
| Short-term borrowings | 19 |
| | 22 |
| | 32 |
| | 36 |
|
| Other borrowings | 37 |
| | 254 |
| | 87 |
| | 632 |
|
| TOTAL INTEREST EXPENSE | 1,053 |
| | 1,509 |
| | 2,136 |
| | 3,191 |
|
| NET INTEREST INCOME | 25,924 |
| | 26,606 |
| | 51,919 |
| | 53,748 |
|
| Provision for loan losses | 1,150 |
| | (356 | ) | | 2,600 |
| | 1,604 |
|
| NET INTEREST INCOME AFTER PROVISION | |
| | |
| | |
| | |
|
| FOR LOAN LOSSES | 24,774 |
| | 26,962 |
| | 49,319 |
| | 52,144 |
|
| NON-INTEREST INCOME: | |
| | |
| | |
| | |
|
| Trust and financial services | 1,253 |
| | 1,414 |
| | 2,745 |
| | 2,903 |
|
| Service charges and fees on deposit accounts | 2,543 |
| | 2,761 |
| | 4,869 |
| | 5,245 |
|
| Other service charges and fees | 3,000 |
| | 2,989 |
| | 5,838 |
| | 5,828 |
|
| Securities gains/(losses), net | 10 |
| | (1 | ) | | 14 |
| | (1 | ) |
| Insurance commissions | 1,956 |
| | 1,852 |
| | 3,509 |
| | 3,765 |
|
| Gain on sales of mortgage loans | 542 |
| | 457 |
| | 901 |
| | 833 |
|
| Other | 474 |
| | 93 |
| | 1,963 |
| | 1,103 |
|
| TOTAL NON-INTEREST INCOME | 9,778 |
| | 9,565 |
| | 19,839 |
| | 19,676 |
|
| NON-INTEREST EXPENSE: | |
| | |
| | | | |
| Salaries and employee benefits | 15,084 |
| | 13,887 |
| | 30,142 |
| | 27,983 |
|
| Occupancy expense | 1,702 |
| | 1,789 |
| | 3,566 |
| | 3,714 |
|
| Equipment expense | 1,702 |
| | 1,904 |
| | 3,474 |
| | 3,562 |
|
| FDIC Expense | 450 |
| | 473 |
| | 880 |
| | 960 |
|
| Other | 6,372 |
| | 5,996 |
| | 11,241 |
| | 11,535 |
|
| TOTAL NON-INTEREST EXPENSE | 25,310 |
| | 24,049 |
| | 49,303 |
| | 47,754 |
|
| INCOME BEFORE INCOME TAXES | 9,242 |
| | 12,478 |
| | 19,855 |
| | 24,066 |
|
| Provision for income taxes | 2,319 |
| | 3,990 |
| | 5,171 |
| | 7,747 |
|
| NET INCOME | 6,923 |
| | 8,488 |
| | 14,684 |
| | 16,319 |
|
| OTHER COMPREHENSIVE INCOME | |
| | |
| | |
| | |
|
| Change in unrealized gains/losses on securities, net of reclassifications and taxes | (7,564 | ) | | 4,116 |
| | (2,802 | ) | | 9,419 |
|
| Change in funded status of post retirement benefits, net of taxes | 819 |
| | 115 |
| | 3,283 |
| | 230 |
|
| COMPREHENSIVE INCOME | $ | 178 |
| | $ | 12,719 |
| | $ | 15,165 |
| | $ | 25,968 |
|
| PER SHARE DATA | |
| | |
| | | | |
| Basic and Diluted Earnings per Share | $ | 0.54 |
| | $ | 0.63 |
| | $ | 1.14 |
| | $ | 1.22 |
|
| Weighted average number of shares outstanding (in thousands) | 12,903 |
| | 13,355 |
| | 12,925 |
| | 13,352 |
|
