FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
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| | For more information contact: |
| October 25, 2016 | Rodger A. McHargue at (812) 238-6334 |
First Financial Corporation reports 3rd Quarter results
TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2016. Net income for the quarter was $8.2 million compared to $8.4 million for the same period of 2015. Diluted net income per common share increased 3.08% to $0.67 from $0.65 for the comparable period of 2015.
The Corporation further reported net income of $30.1 million for the nine months ended September 30, 2016 versus $23.1 million for the comparable period of 2015, an increase of 30.30%. Diluted net income per common share also increased 35.75% to $2.43 for the nine months ended September 30, 2016 versus $1.79 for the comparable period of 2015. This increase included an after-tax gain on the sale of the Corporation’s insurance subsidiary of $5.75 million. Return on assets for the nine months ended September 30, 2016 was 1.35% compared to 1.03% for the nine months ended September 30, 2015.
Norman L. Lowery, President and Chief Executive Officer, commented, “We are pleased with our third quarter 2016 results. We had another solid quarter of loan growth and our asset quality remains excellent.”
Book value per share was $34.66 at September 30, 2016, a 7.77% increase from the $32.16 at September 30, 2015. Shareholders’ equity increased 3.38% to $422.4 million from $408.6 million on September 30, 2015.
On February 3, 2016 the Corporation announced a stock repurchase plan to acquire 5% of the Corporation’s outstanding common stock. The Corporation has repurchased a total of 565,618 shares under the plan.
Average total loans for the third quarter of 2016 were $1.80 billion, an increase of $31.8 million or 1.80%, versus the $1.77 billion for the comparable period in 2015. Total loans outstanding were $1.82 billion, an increase from $1.77 billion as of September 30, 2015. On a linked quarter basis, average total loans increased $19.6 million, or 1.10%, from $1.78 billion for the quarter ending June 30, 2016.
Average total deposits at September 30, 2016 were $2.41 billion versus $2.45 billion as of September 30, 2015. On a linked quarter basis, average deposits were $2.40 billion compared to $2.42 billion on June 30, 2016.
The company’s tangible common equity to tangible asset ratio was 12.93% at September 30, 2016, compared to 12.61% at September 30, 2015.
Net interest income for the third quarter of 2016 was $26.4 million compared to the $26.6 million reported for the same period of 2015. The net interest margin for the nine months ended September 30, 2016 increased to 4.05% compared to the 4.04% reported at September 30, 2015.
The provision for loan losses for the three months ended September 30, 2016 was $1.09 million compared to $1.05 million for the third quarter of 2015. Net charge-offs were $1.5 million for the third quarter of 2016 compared to $986 thousand in the same period of 2015. The Corporation’s allowance for loan losses as of September 30, 2016 was $19.1 million compared to $19.9 million as of September 30, 2015. The allowance for loan losses as a percent of total loans was 1.05% as of September 30, 2016 compared to 1.13% as of September 30, 2015.
Nonperforming loans decreased 6.19% to $29.0 million as of September 30, 2016 versus $31.0 million as of September 30, 2015. The ratio of nonperforming loans to total loans and leases was 1.59% as of September 30, 2016 versus 1.75% as of September 30, 2015.
Non-interest income for the three months ended September 30, 2016 was $7.92 million compared to $9.95 million as of September 30, 2015. The decline was primarily related to the sale of the Corporation’s insurance subsidiary which reduced insurance commissions by $1.66 million year-over-year.
Non-interest expense for the three months ended September 30, 2016 decreased $2.1 million to $22.0 million compared to $24.2 million in 2015. On a year-over-year basis for the quarter, salaries and employee benefits decreased $2.1 million driven by lower health insurance and pension expense. The Corporation’s efficiency ratio was 55.97% for the quarter ending September 30, 2016 versus 65.02% for the same period in 2015.
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 | Nine Months Ended |
| | | September 30, | June 30, | September 30, | September 30, | September 30, |
| | | 2016 | 2016 | 2015 | 2016 | 2015 |
| END OF PERIOD BALANCES | | | | | | |
| Assets | | $ | 3,019,323 |
| $ | 2,958,016 |
| $ | 2,942,833 |
| $ | 3,019,323 |
| $ | 2,942,833 |
|
| Deposits | | $ | 2,479,241 |
| $ | 2,394,334 |
| $ | 2,418,589 |
| $ | 2,479,241 |
| $ | 2,418,589 |
|
| Loans | | $ | 1,821,525 |
| $ | 1,802,810 |
| $ | 1,766,667 |
| $ | 1,821,525 |
| $ | 1,766,667 |
|
| Allowance for Loan Losses | | $ | 19,074 |
| $ | 19,504 |
| $ | 19,925 |
| $ | 19,074 |
| $ | 19,925 |
|
| Total Equity | | $ | 422,374 |
| $ | 413,224 |
| $ | 408,591 |
| $ | 422,374 |
| $ | 408,591 |
|
| Tangible Common Equity | | $ | 385,766 |
| $ | 376,472 |
| $ | 365,727 |
| $ | 385,766 |
| $ | 365,727 |
|
| | | | | | | |
| AVERAGE BALANCES | | | | | | |
| Total Assets | | $ | 2,977,329 |
| $ | 2,947,153 |
| $ | 2,954,983 |
| $ | 2,961,163 |
| $ | 2,977,719 |
|
| Earning Assets | | $ | 2,742,151 |
| $ | 2,747,214 |
| $ | 2,733,630 |
| $ | 2,738,097 |
| $ | 2,747,516 |
|
| Investments | | $ | 936,059 |
| $ | 945,948 |
| $ | 960,139 |
| $ | 946,001 |
| $ | 968,997 |
|
| Loans | | $ | 1,800,796 |
| $ | 1,781,201 |
| $ | 1,769,009 |
| $ | 1,779,936 |
| $ | 1,766,097 |
|
| Total Deposits | | $ | 2,399,596 |
| $ | 2,422,302 |
| $ | 2,418,162 |
| $ | 2,413,522 |
| $ | 2,447,282 |
|
| Interest-Bearing Deposits | | $ | 1,855,077 |
| $ | 1,877,092 |
| $ | 1,884,420 |
| $ | 1,868,413 |
| $ | 1,905,714 |
|
| Interest-Bearing Liabilities | | $ | 59,815 |
| $ | 44,852 |
| $ | 58,957 |
| $ | 50,231 |
| $ | 49,053 |
|
| Total Equity | | $ | 433,511 |
| $ | 406,382 |
| $ | 401,840 |
| $ | 418,289 |
| $ | 403,550 |
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| | | | | | | |
| INCOME STATEMENT DATA | | | | | | |
| Net Interest Income | | $ | 26,351 |
| $ | 26,059 |
| $ | 26,576 |
| $ | 78,567 |
| $ | 78,495 |
|
| Net Interest Income Fully Tax Equivalent | | $ | 27,907 |
| $ | 27,602 |
| $ | 28,134 |
| $ | 83,200 |
| $ | 83,184 |
|
| Provision for Loan Losses | | $ | 1,091 |
| $ | 435 |
| $ | 1,050 |
| $ | 2,361 |
| $ | 3,650 |
|
| Non-interest Income | | $ | 7,923 |
| $ | 8,214 |
| $ | 9,951 |
| $ | 38,503 |
| $ | 29,790 |
|
| Non-interest Expense | | $ | 22,006 |
| $ | 22,760 |
| $ | 24,152 |
| $ | 68,113 |
| $ | 73,455 |
|
| Net Income | | $ | 8,162 |
| $ | 8,232 |
| $ | 8,398 |
| $ | 30,069 |
| $ | 23,082 |
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| | | | | | | |
| PER SHARE DATA | | | | | | |
| Basic and Diluted Net Income Per Common Share | | $ | 0.67 |
| $ | 0.68 |
| $ | 0.65 |
| $ | 2.43 |
| $ | 1.79 |
|
| Cash Dividends Declared Per Common Share | | $ | — |
| $ | 0.5 |
| $ | — |
| $ | 0.5 |
| $ | 0.49 |
|
| Book Value Per Common Share | | $ | 34.66 |
| $ | 33.89 |
| $ | 32.16 |
| $ | 34.66 |
| $ | 32.16 |
|
| Tangible Book Value Per Common Share | | $ | 31.66 |
| $ | 30.88 |
| $ | 28.79 |
| $ | 31.66 |
| $ | 28.79 |
|
| Basic Weighted Average Common Shares Outstanding | | 12,186 |
| 12,236 |
| 12,773 |
| 12,356 |
| 12,874 |
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| | | | | | | | | | | |
| Key Ratios | | Three Months Ended | Nine Months Ended |
| | | September 30, | June 30, | September 30, | September 30, | September 30, |
| | | 2016 | 2016 | 2015 | 2016 | 2015 |
| Return on average assets | | 1.10 | % | 1.12 | % | 1.14 | % | 1.35 | % | 1.03 | % |
| Return on average common shareholder's equity | | 7.23 | % | 8.04 | % | 8.36 | % | 9.56 | % | 7.61 | % |
| Efficiency ratio | | 61.42 | % | 63.55 | % | 63.42 | % | 55.97 | % | 65.02 | % |
| Average equity to average assets | | 14.56 | % | 13.89 | % | 13.60 | % | 14.13 | % | 13.55 | % |
| Net interest margin | | 4.05 | % | 4.04 | % | 4.12 | % | 4.05 | % | 4.04 | % |
| Net charge-offs to average loans and leases | | 0.34 | % | 0.19 | % | 0.22 | % | 0.24 | % | 0.19 | % |
| Loan and lease loss reserve to loans and leases | | 1.05 | % | 1.08 | % | 1.13 | % | 1.05 | % | 1.13 | % |
| Loan and lease loss reserve to nonperforming loans and other real estate | | 65.69 | % | 70.76 | % | 64.37 | % | 65.69 | % | 64.37 | % |
| Nonperforming loans to loans | | 1.61 | % | 1.53 | % | 1.75 | % | 1.61 | % | 1.75 | % |
| Tier 1 leverage | | 13.23 | % | 13.08 | % | 12.92 | % | 13.23 | % | 12.92 | % |
| Risk-based capital - Tier 1 | | 17.46 | % | 17.46 | % | 17.73 | % | 17.46 | % | 17.73 | % |
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| | | | | | | | | | | | | | | | |
| Asset Quality | | Three Months Ended | Nine Months Ended |
| | | September 30, | June 30, | September 30, | September 30, | September 30, |
| | | 2016 | 2016 | 2015 | 2016 | 2015 |
| Accruing loans and leases past due 30-89 days | | $ | 6,983 |
| $ | 7,435 |
| $ | 6,778 |
| $ | 6,983 |
| $ | 6,778 |
|
| Accruing loans and leases past due 90 days or more | | $ | 1,144 |
| $ | 1,044 |
| $ | 1,632 |
| $ | 1,144 |
| $ | 1,632 |
|
| Nonaccrual loans and leases | | $ | 16,235 |
| $ | 14,526 |
| $ | 16,112 |
| $ | 16,235 |
| $ | 16,112 |
|
| Nonperforming loans and other real estate | | $ | 29,037 |
| $ | 27,562 |
| $ | 30,954 |
| $ | 29,037 |
| $ | 30,954 |
|
| Other real estate owned | | $ | 2,772 |
| $ | 2,837 |
| $ | 3,382 |
| $ | 2,772 |
| $ | 3,382 |
|
| Total nonperforming assets | | $ | 40,548 |
| $ | 38,998 |
| $ | 46,072 |
| $ | 40,548 |
| $ | 46,072 |
|
| Total troubled debt restructurings | | $ | 8,886 |
| $ | 9,155 |
| $ | 9,828 |
| $ | 8,886 |
| $ | 9,828 |
|
| Gross charge-offs | | $ | 2,724 |
| $ | 1,842 |
| $ | 3,295 |
| $ | 6,206 |
| $ | 6,597 |
|
| Recoveries | | $ | 1,202 |
| $ | 986 |
| $ | 2,309 |
| $ | 2,973 |
| $ | 4,033 |
|
| Net charge-offs/(recoveries) | | $ | 1,522 |
| $ | 856 |
| $ | 986 |
| $ | 3,233 |
| $ | 2,564 |
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CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data) |
| | | | | | | |
| | September 30,
2016 | | December 31,
2015 |
| | (unaudited) |
| ASSETS | |
| | |
|
| Cash and due from banks | $ | 67,396 |
| | $ | 88,695 |
|
| Federal funds sold | 44,505 |
| | 9,815 |
|
| Securities available-for-sale | 866,701 |
| | 891,082 |
|
| Loans: | |
| | |
|
| Commercial | 1,083,129 |
| | 1,043,980 |
|
| Residential | 430,346 |
| | 444,447 |
|
| Consumer | 304,840 |
| | 272,896 |
|
| | 1,818,315 |
| | 1,761,323 |
|
| (Less) plus: | |
| | |
|
| Net deferred loan costs | 3,210 |
| | 2,485 |
|
| Allowance for loan losses | (19,074 | ) | | (19,946 | ) |
| | 1,802,451 |
| | 1,743,862 |
|
| Restricted stock | 10,848 |
| | 10,838 |
|
| Accrued interest receivable | 12,846 |
| | 11,733 |
|
| Premises and equipment, net | 49,688 |
| | 50,531 |
|
| Bank-owned life insurance | 83,377 |
| | 82,323 |
|
| Goodwill | 34,355 |
| | 39,489 |
|
| Other intangible assets | 2,253 |
| | 3,178 |
|
| Other real estate owned | 2,772 |
| | 3,466 |
|
| Other assets | 42,131 |
| | 44,573 |
|
| TOTAL ASSETS | $ | 3,019,323 |
| | $ | 2,979,585 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | |
|
| Deposits: | |
| | |
|
| Non-interest-bearing | $ | 557,185 |
| | $ | 563,302 |
|
| Interest-bearing: | |
| | |
|
| Certificates of deposit exceeding the FDIC insurance limits | 44,778 |
| | 46,753 |
|
| Other interest-bearing deposits | 1,877,278 |
| | 1,832,314 |
|
| | 2,479,241 |
| | 2,442,369 |
|
| Short-term borrowings | 31,370 |
| | 33,831 |
|
| FHLB advances | 10,132 |
| | 12,677 |
|
| Other liabilities | 76,206 |
| | 80,392 |
|
| TOTAL LIABILITIES | 2,596,949 |
| | 2,569,269 |
|
| | | | |
| 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-12,185,737 in 2016 and 12,740,018 in 2015 | 1,819 |
| | 1,817 |
|
| Additional paid-in capital | 73,907 |
| | 73,396 |
|
| Retained earnings | 419,585 |
| | 395,633 |
|
| Accumulated other comprehensive loss | (2,412 | ) | | (9,401 | ) |
| Less: Treasury shares at cost-2,393,021 in 2016 and 1,817,797 in 2015 | (70,525 | ) | | (51,129 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 422,374 |
| | 410,316 |
|
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 3,019,323 |
| | $ | 2,979,585 |
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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, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) |
| INTEREST INCOME: | |
| | |
| | | | |
| Loans, including related fees | $ | 21,753 |
| | $ | 21,478 |
| | $ | 64,208 |
| | $ | 63,048 |
|
| Securities: | |
| | |
| | | | |
| Taxable | 3,506 |
| | 3,918 |
| | 11,031 |
| | 11,970 |
|
| Tax-exempt | 1,826 |
| | 1,806 |
| | 5,466 |
| | 5,375 |
|
| Other | 365 |
| | 401 |
| | 1,096 |
| | 1,265 |
|
| TOTAL INTEREST INCOME | 27,450 |
| | 27,603 |
| | 81,801 |
| | 81,658 |
|
| INTEREST EXPENSE: | |
| | |
| | |
| | |
|
| Deposits | 1,016 |
| | 963 |
| | 3,033 |
| | 2,980 |
|
| Short-term borrowings | 51 |
| | 22 |
| | 100 |
| | 54 |
|
| Other borrowings | 32 |
| | 42 |
| | 101 |
| | 129 |
|
| TOTAL INTEREST EXPENSE | 1,099 |
| | 1,027 |
| | 3,234 |
| | 3,163 |
|
| NET INTEREST INCOME | 26,351 |
| | 26,576 |
| | 78,567 |
| | 78,495 |
|
| Provision for loan losses | 1,091 |
| | 1,050 |
| | 2,361 |
| | 3,650 |
|
| NET INTEREST INCOME AFTER PROVISION | |
| | |
| | |
| | |
|
| FOR LOAN LOSSES | 25,260 |
| | 25,526 |
| | 76,206 |
| | 74,845 |
|
| NON-INTEREST INCOME: | |
| | |
| | |
| | |
|
| Trust and financial services | 1,270 |
| | 1,382 |
| | 3,896 |
| | 4,127 |
|
| Service charges and fees on deposit accounts | 2,765 |
| | 2,688 |
| | 7,870 |
| | 7,557 |
|
| Other service charges and fees | 3,062 |
| | 3,080 |
| | 9,211 |
| | 8,918 |
|
| Securities gains/(losses), net | 13 |
| | 9 |
| | 26 |
| | 23 |
|
| Gain on sale of certain assets and liabilities of insurance brokerage | (199 | ) | | — |
| | 12,822 |
| | — |
|
| Insurance commissions | 35 |
| | 1,693 |
| | 2,340 |
| | 5,202 |
|
| Gain on sales of mortgage loans | 522 |
| | 611 |
| | 1,407 |
| | 1,512 |
|
| Other | 455 |
| | 488 |
| | 931 |
| | 2,451 |
|
| TOTAL NON-INTEREST INCOME | 7,923 |
| | 9,951 |
| | 38,503 |
| | 29,790 |
|
| NON-INTEREST EXPENSE: | |
| | |
| | | | |
| Salaries and employee benefits | 12,883 |
| | 14,963 |
| | 39,620 |
| | 45,105 |
|
| Occupancy expense | 1,785 |
| | 1,756 |
| | 5,238 |
| | 5,322 |
|
| Equipment expense | 1,878 |
| | 1,736 |
| | 5,523 |
| | 5,210 |
|
| FDIC Expense | 356 |
| | 468 |
| | 1,210 |
| | 1,348 |
|
| Other | 5,104 |
| | 5,229 |
| | 16,522 |
| | 16,470 |
|
| TOTAL NON-INTEREST EXPENSE | 22,006 |
| | 24,152 |
| | 68,113 |
| | 73,455 |
|
| INCOME BEFORE INCOME TAXES | 11,177 |
| | 11,325 |
| | 46,596 |
| | 31,180 |
|
| Provision for income taxes | 3,015 |
| | 2,927 |
| | 16,527 |
| | 8,098 |
|
| NET INCOME | 8,162 |
| | 8,398 |
| | 30,069 |
| | 23,082 |
|
| OTHER COMPREHENSIVE INCOME | |
| | |
| | |
| | |
|
| Change in unrealized gains/losses on securities, net of reclassifications and taxes | 777 |
| | 4,471 |
| | 6,077 |
| | 1,669 |
|
| Change in funded status of post retirement benefits, net of taxes | 304 |
| | 819 |
| | 912 |
| | 4,102 |
|
| COMPREHENSIVE INCOME | $ | 9,243 |
| | $ | 13,688 |
| | $ | 37,058 |
| | $ | 28,853 |
|
| PER SHARE DATA | |
| | |
| | | | |
| Basic and Diluted Earnings per Share | $ | 0.67 |
| | $ | 0.65 |
| | $ | 2.43 |
| | $ | 1.79 |
|
| Weighted average number of shares outstanding (in thousands) | 12,186 |
| | 12,773 |
| | 12,356 |
| | 12,874 |
|
