FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
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| | For more information contact: |
| April 27, 2016 | Rodger A. McHargue at (812) 238-6334 |
First Financial Corporation reports 1st Quarter results
TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2016. Net income for the three months ending March 31, 2016 increased 76.2% to $13.68 million compared to $7.76 million for the same period of 2015. The increase included an after-tax gain on the sale of the Corporation’s insurance subsidiary of $5.84 million. Diluted net income per common share increased 80.0% to $1.08 from $0.60 for the comparable period of 2015.
Return on assets for the three months ended March 31, 2016 was 1.85% compared to 1.04% for the three months ended March 31, 2015.
Total loans outstanding increased $7.1 million, or .40%, from $1.76 billion as of March 31, 2015 to $1.76 billion as of March 31, 2016. On a linked quarter basis, average total loans increased $8.6 million, or .49%, from $1.75 billion for the quarter ending December 31, 2015.
Total deposits decreased $63.4 million or 2.57% from $2.46 billion as of March 31, 2015 to $2.40 billion as of March 31, 2016.
The company’s tangible common equity to tangible asset ratio was 12.92% at March 31, 2016, compared to 12.39% at March 31, 2015.
Net interest income for the first quarter of 2016 was $26.2 million, an increase of .62% over the $26.0 million reported for the same period of 2015. The net interest margin for the quarter ended March 31, 2016 increased to 4.06% from the 4.01% reported at March 31, 2015.
Asset quality remains strong with nonperforming loans decreasing 22.67% to $23.6 million as of March 31, 2016 versus $30.5 million as of March 31, 2015. The ratio of nonperforming loans to total loans and leases also decreased to 1.50% as of March 31, 2016 versus 1.97% as of March 31, 2015.
The provision for loan losses for the three months ended March 31, 2016 was $835 thousand compared to the $1.45 million provision for the first quarter of 2015. Net charge-offs were $855 thousand for the first quarter of 2016 compared to $938 thousand in the same period of 2015. The Corporation’s allowance for loan losses as of March 31, 2016 was $19.9 million compared to $19.4 million as of March 31, 2015. The allowance for loan losses as a percent of total loans was 1.13% as of March 31, 2016 compared to 1.10% as of March 31, 2015.
Non-interest income for the three months ended March 31, 2016 and 2015 was $21.5 and $10.1 million, respectively, a 113.54% increase. The gain on the sale of the Corporation’s insurance subsidiary increased non-interest income $13.0 million. Other income without this gain is down primarily due to the recognition of unrealized loss on other real estate written down to updated appraised values.
Service charges on deposits increased $178 thousand over the same period in 2015 and other service charges and fees increased $162 thousand.
Non-interest expense for the three months ended March 31, 2016 decreased $1.53 million to $22.5 million compared to $24.0 million in 2015. On a linked quarter basis, non-interest expense decreased $2.48 million from $24.9 million for the quarter ended December 31, 2015. On a year-over-year basis, salaries and employee benefits decreased $1.46 million driven by lower health insurance and pension expense. The Corporation’s efficiency ratio was 45.68% for the quarter ending March 31, 2016 versus 63.78% for the same period in 2015.
Book value per share was $33.58 at March 31, 2016, a 6.33% increase from the $31.58 at March 31, 2015. Average shareholders’ equity increased 3.38% to $415.0 million from $401.4 million on March 31, 2015.
Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our first quarter of 2016 results. We saw improvement in our interest income, interest expense, lower credit costs, most areas of non-interest income, and reduced non-interest expense. It was a solid quarter for First Financial.”
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 in Indiana.
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| | | | | | | | | | |
| | | Three Months Ended |
| | | March 31, | December 31, | March 31, |
| | | 2016 | 2015 | 2015 |
| END OF PERIOD BALANCES | | | | |
| Assets | | $ | 2,939,240 |
| $ | 2,979,585 |
| $ | 2,995.836 |
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| Deposits | | 2,400,655 |
| 2,442,369 |
| 2,463.949 |
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| Loans | | 1,763,659 |
| 1,763,808 |
| 1,756,604 |
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| Allowance for Loan Losses | | 19,926 |
| 19,946 |
| 19,351 |
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| Total Equity | | 411,912 |
| 410,316 |
| 409,027 |
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| Tangible Common Equity | | 375,000 |
| 367,649 |
| 365,853 |
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| | | | | |
| AVERAGE BALANCES | |
| | |
| Total Assets | | 2,959,007 |
| 2,974,567 |
| 2,988,154 |
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| Earning Assets | | 2,724,926 |
| 2,735,328 |
| 2,748,730 |
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| Investments | | 955,996 |
| 950,245 |
| 969,315 |
|
| Loans | | 1,757,811 |
| 1,749,261 |
| 1,760,524 |
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| Total Deposits | | 2,418,668 |
| 2,443,478 |
| 2,461,400 |
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| Interest-Bearing Deposits | | 1,873,070 |
| 1,889,350 |
| 1,917,509 |
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| Interest-Bearing Borrowings | | 46,026 |
| 41,269 |
| 44,789 |
|
| Total Equity | | 414,974 |
| 408,730 |
| 401,423 |
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| | | | | |
| INCOME STATEMENT DATA | | | | |
| Net Interest Income | | 26,157 |
| 26,012 |
| 25,995 |
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| Net Interest Income Fully Tax Equivalent | | 27,692 |
| 27,561 |
| 27,559 |
|
| Provision for Loan Losses | | 835 |
| 1,050 |
| 1,450 |
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| Non-interest Income | | 21,484 |
| 9,389 |
| 10,061 |
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| Non-interest Expense | | 22,465 |
| 24,943 |
| 23,993 |
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| Net Income | | 13,675 |
| 7,114 |
| 7,761 |
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| | | | | |
| PER SHARE DATA | | | | |
| Basic and Diluted Net Income Per Common Share | | 1.08 |
| 0.56 |
| 0.60 |
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| Cash Dividends Declared Per Common Share | | — |
| 0.49 |
| — |
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| Book Value Per Common Share | | 33.58 |
| 32.21 |
| 31.58 |
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| Tangible Book Value Per Common Share | | 30.57 |
| 28.86 |
| 28.27 |
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| Basic Weighted Average Common Shares Outstanding | | 12,646 |
| 12,722 |
| 12,948 |
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| Key Ratios | | Three Months Ended |
| | | March 31, | December 31, | March 31, |
| | | 2016 | 2015 | 2015 |
| Return on average assets | | 1.85 | % | 0.96 | % | 1.04 | % |
| Return on average common shareholder's equity | | 13.28 | % | 6.96 | % | 7.73 | % |
| Efficiency ratio | | 45.68 | % | 67.51 | % | 63.78 | % |
| Average equity to average assets | | 13.92 | % | 13.74 | % | 13.43 | % |
| Net interest margin | | 4.06 | % | 4.04 | % | 4.01 | % |
| Net charge-offs to average loans and leases | | 0.19 | % | 0.20 | % | 0.21 | % |
| Loan and lease loss reserve to loans and leases | | 1.13 | % | 1.13 | % | 1.10 | % |
| Loan and lease loss reserve to nonperforming loans | | 84.38 | % | 78.35 | % | 63.37 | % |
| Nonperforming loans to loans | | 1.50 | % | 1.46 | % | 1.97 | % |
| Tier 1 leverage | | 13.05 | % | 12.92 | % | 12.74 | % |
| Risk-based capital - Tier 1 | | 17.81 | % | 17.69 | % | 17.64 | % |
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| | | | | | | | | | |
| Asset Quality | | Three Months Ended |
| | | March 31, | December 31, | March 31, |
| | | 2016 | 2015 | 2015 |
| Accruing loans and leases past due 30-89 days | | $ | 7,292 |
| $ | 12,294 |
| $ | 7,159 |
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| Accruing loans and leases past due 90 days or more | | $ | 858 |
| $ | 964 |
| $ | 640 |
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| Nonaccrual loans and leases | | $ | 13,248 |
| $ | 14,634 |
| $ | 14,868 |
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| Nonperforming loans | | $ | 23,615 |
| $ | 25,458 |
| $ | 30,536 |
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| Other real estate owned | | $ | 2,850 |
| $ | 3,466 |
| $ | 3,830 |
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| Total nonperforming assets | | $ | 39,617 |
| $ | 43,799 |
| $ | 49,353 |
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| Total troubled debt restructurings | | $ | 9,509 |
| $ | 9,860 |
| $ | 15,027 |
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| Gross charge-offs | | $ | 1,640 |
| $ | 1,931 |
| $ | 1,823 |
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| Recoveries | | $ | 785 |
| $ | 902 |
| $ | 885 |
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| Net charge-offs/(recoveries) | | $ | 855 |
| $ | 1,029 |
| $ | 938 |
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CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
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| | | | | | | |
| | March 31,
2016 | | December 31,
2015 |
| | (unaudited) |
| ASSETS | |
| | |
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| Cash and due from banks | $ | 66,125 |
| | $ | 88,695 |
|
| Federal funds sold | 6,444 |
| | 9,815 |
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| Securities available-for-sale | 884,176 |
| | 891,082 |
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| Loans: | |
| | |
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| Commercial | 1,047,599 |
| | 1,043,980 |
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| Residential | 436,873 |
| | 444,447 |
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| Consumer | 276,471 |
| | 272,896 |
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| | 1,760,943 |
| | 1,761,323 |
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| (Less) plus: | |
| | |
|
| Net deferred loan costs | 2,716 |
| | 2,485 |
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| Allowance for loan losses | (19,926 | ) | | (19,946 | ) |
| | 1,743,733 |
| | 1,743,862 |
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| Restricted stock | 10,838 |
| | 10,838 |
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| Accrued interest receivable | 11,907 |
| | 11,733 |
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| Premises and equipment, net | 50,394 |
| | 50,531 |
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| Bank-owned life insurance | 82,673 |
| | 82,323 |
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| Goodwill | 34,355 |
| | 39,489 |
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| Other intangible assets | 2,557 |
| | 3,178 |
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| Other real estate owned | 2,850 |
| | 3,466 |
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| Other assets | 43,188 |
| | 44,573 |
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| TOTAL ASSETS | $ | 2,939,240 |
| | $ | 2,979,585 |
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| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | |
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| Deposits: | |
| | |
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| Non-interest-bearing | $ | 512,961 |
| | $ | 563,302 |
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| Interest-bearing: | |
| | |
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| Certificates of deposit exceeding the FDIC insurance limits | 46,817 |
| | 46,753 |
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| Other interest-bearing deposits | 1,840,877 |
| | 1,832,314 |
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| | 2,400,655 |
| | 2,442,369 |
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| Short-term borrowings | 31,116 |
| | 33,831 |
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| FHLB advances | 12,252 |
| | 12,677 |
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| Other liabilities | 83,305 |
| | 80,392 |
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| TOTAL LIABILITIES | 2,527,328 |
| | 2,569,269 |
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| | | | |
| Shareholders’ equity | |
| | |
|
| Common stock, $.125 stated value per share; | | | |
| Authorized shares-40,000,000 | | | |
| Issued shares-14,578,758 in 2016 and 14,557,815 in 2015 | | | |
| Outstanding shares-12,265,355 in 2016 and 12,740,018 in 2015 | 1,818 |
| | 1,817 |
|
| Additional paid-in capital | 73,566 |
| | 73,396 |
|
| Retained earnings | 409,308 |
| | 395,633 |
|
| Accumulated other comprehensive loss | (5,059 | ) | | (9,401 | ) |
| Less: Treasury shares at cost-2,313,403 in 2016 and 1,817,797 in 2015 | (67,721 | ) | | (51,129 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 411,912 |
| | 410,316 |
|
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,939,240 |
| | $ | 2,979,585 |
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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
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| | | | | | | |
| | Three Months Ended
March 31, |
| | 2016 | | 2015 |
| | (unaudited) | | (unaudited) |
| INTEREST INCOME: | |
| | |
|
| Loans, including related fees | $ | 21,184 |
| | $ | 20,807 |
|
| Securities: | |
| | |
|
| Taxable | 3,831 |
| | 4,061 |
|
| Tax-exempt | 1,822 |
| | 1,779 |
|
| Other | 364 |
| | 431 |
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| TOTAL INTEREST INCOME | 27,201 |
| | 27,078 |
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| INTEREST EXPENSE: | |
| | |
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| Deposits | 987 |
| | 1,020 |
|
| Short-term borrowings | 23 |
| | 13 |
|
| Other borrowings | 34 |
| | 50 |
|
| TOTAL INTEREST EXPENSE | 1,044 |
| | 1,083 |
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| NET INTEREST INCOME | 26,157 |
| | 25,995 |
|
| Provision for loan losses | 835 |
| | 1,450 |
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| NET INTEREST INCOME AFTER PROVISION | |
| | |
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| FOR LOAN LOSSES | 25,322 |
| | 24,545 |
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| NON-INTEREST INCOME: | |
| | |
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| Trust and financial services | 1,334 |
| | 1,492 |
|
| Service charges and fees on deposit accounts | 2,504 |
| | 2,326 |
|
| Other service charges and fees | 3,000 |
| | 2,838 |
|
| Securities gains/(losses), net | 3 |
| | 4 |
|
| Insurance commissions | 1,390 |
| | 1,553 |
|
| Gain on sales of mortgage loans | 404 |
| | 359 |
|
| Gain on sale of certain assets and liabilities of insurance brokerage operation | 13,021 |
| | — |
|
| Other | (172 | ) | | 1,489 |
|
| TOTAL NON-INTEREST INCOME | 8,463 |
| | 10,061 |
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| NON-INTEREST EXPENSE: | |
| | |
|
| Salaries and employee benefits | 13,595 |
| | 15,058 |
|
| Occupancy expense | 1,731 |
| | 1,864 |
|
| Equipment expense | 1,837 |
| | 1,772 |
|
| FDIC Expense | 451 |
| | 430 |
|
| Other | 4,851 |
| | 4,869 |
|
| TOTAL NON-INTEREST EXPENSE | 22,465 |
| | 23,993 |
|
| INCOME BEFORE INCOME TAXES | 24,341 |
| | 10,613 |
|
| Provision for income taxes | 10,666 |
| | 2,852 |
|
| NET INCOME | 13,675 |
| | 7,761 |
|
| OTHER COMPREHENSIVE INCOME | |
| | |
|
| Change in unrealized gains/losses on securities, net of reclassifications and taxes | 4,039 |
| | 4,762 |
|
| Change in funded status of post retirement benefits, net of taxes | 304 |
| | 2,464 |
|
| COMPREHENSIVE INCOME | $ | 18,018 |
| | $ | 14,987 |
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| PER SHARE DATA | |
| | |
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| Basic and Diluted Earnings per Share | $ | 1.08 |
| | $ | 0.60 |
|
| Weighted average number of shares outstanding (in thousands) | 12,646 |
| | 12,948 |
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