April 14, 1994
Ken Csinicsek
715-345-4602
FIRST FINANCIAL CORPORATION NET INCOME UP 29%
Stevens Point, Wisconsin, April 14, 1994... First Financial
Corporation (FFHC-OTC) today reported record first quarter net
income of $12.3 million, or $.49 per share, up 29% from the $9.5
million, or $.40 per share, reported for the first quarter of
1993. Return on average assets (annualized) for the quarter
increased to 1.01%, up from .86% for the first quarter of last
year. Return on average equity (annualized) for the quarter rose
to 19.55%, up from the 19.24% reported at this time last year.
The company attributes its improved financial results to
increasing net interest income, a decreased contribution to
provisions for losses on loans, increasing non-interest income
and cost savings due to the consolidation of operations following
acquisitions in 1993.
"This was a very profitable quarter for our company and we are
well positioned to have another outstanding year in 1994," said
John C. Seramur, president and chief executive officer of First
Financial.
Net interest income for the quarter rose to $38.9 million, up
from $35.0 million for the first quarter of last year. The
company's net interest margin of 3.30% for the first quarter of
1994 was the same as reported for the first quarter of last year.
Because of the high quality of its loan portfolio, the continued
low loan charge-off experience and certain large recoveries, the
company was able to reduce its contribution to provisions for
losses on loans to $1.4 million, down 51% from the $2.8 million
it set aside for the first quarter of 1993.
Non-interest income increased to $9.7 million, up from $8.7
million for the first quarter of last year. The increase can be
largely attributed to higher levels of insurance and brokerage
sales and increased account service fees.
Non-interest expense as a percentage of total assets continued
its steady decline in the first quarter of 1994. For the
quarter, the ratio was 2.26%, down from 2.31% for the first
quarter of last year. In addition, the company's efficiency
ratio, which compares controllable expenses as a percentage of
recurring income before expenses, decreased to 54.71%, down from
55.37% for the first quarter of 1993.
The company's sensitivity to fluctuating interest rates, or
"gap", stood at a positive 5% at the end of the first quarter of
1994. A positive "gap" normally indicates that a company's
earning assets will reprice faster than its interest bearing
liabilities and that interest income should increase in a rising
interest-rate environment. Management believes that this
positive "gap" position will help the company maintain its
profitability in the current economic climate.
Stockholder's equity increased to $254.2 million, or 5.23% of
total assets, up from $234.7 million, or 4.92% of total assets at
the end of 1993. Book value per share increased to $10.33, up
from $8.62 at this time last year and $9.95 at year-end 1993.
During the first quarter, First Financial completed the
acquisition of NorthLand Bank of Wisconsin, SSB, based in
Ashland, Wisconsin. The acquisition added approximately $125
million in assets and seven new banking offices to First
Financial. The new offices now operate as branches of First
Financial's major subsidiary, First Financial Bank, FSB.
First Financial Corporation operates 124 full service consumer
banking offices in Wisconsin and Illinois and has assets of
approximately $4.9 billion. First Financial has filed with the
Securities Exchange Commission a Form 8-K which includes this
release and other relevant financial information. The
Corporation's shares are traded on the NASDAQ National Market
under the symbol FFHC.
FIRST FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
(Unaudited)
For The Three Months
Ended March 31,
1994 (1)(2) 1993
RESULTS OF OPERATIONS
Interest income $ 84,914 $ 84,384
Interest expense (46,002) (49,338)
Net interest income 38,912 35,046
Provisions for loan losses (1,380) (2,844)
Non-interest income 9,733 8,668
Non-interest expense (27,459) (25,682)
Income before income taxes 19,806 15,188
Income taxes (7,526) (5,639)
Net income $ 12,280 $ 9,549
Earnings per share:
Primary $ 0.49 $ 0.40
Fully Diluted $ 0.49 $ 0.40
Weighted average shares outstanding:
Primary 25,294,000 23,655,000
Fully Diluted 25,299,000 24,051,000
Cash dividend per share $ .10 $ .075
OPERATING INFORMATION
Average assets $4,870,135 $4,449,922
Average interest-earning assets $4,646,024 $4,244,269
Average interest-bearing liabilities $4,542,856 $4,193,510
Average stockholders' equity $ 251,254 $ 198,534
Return on average assets (3) 1.01% .86%
Return on average stockholders'
equity (3) 19.55% 19.24%
Net interest margin (3):
Yield on loans receivable 8.36% 9.14%
Yield on mortgage-related securities 5.49% 6.41%
Yield on investments 4.84% 4.92%
Yield on interest-earning assets 7.31% 7.95%
Cost of deposits 4.01% 4.70%
Cost of borrowings 5.13% 5.55%
Cost of funds 4.11% 4.77%
Interest spread 3.20% 3.18%
Net interest margin 3.30% 3.30%
See Notes to Financial Highlights
/TABLE
FIRST FINANCIAL CORPORATION
For The Three Months Ended
March 31,
1994 (1)(2) 1993
OPERATING INFORMATION (Continued)
Non-interest expense to average
total assets (3) 2.26% 2.31%
Controllable expense (total non-
interest expense less foreclo-
sure expense and amortization
of intangible assets) to average
total assets (3) 2.12% 2.11%
Efficiency ratio (controllable
expense as % of recurring income
before expenses)(3) 54.71% 55.37%
Loan originations, including refinan-
ced loans repurchased from investors $ 290,886 $ 227,887
Loan originations, excluding re-finan-
ced loans repurchased from investors $ 290,359 $ 168,562
Loan loss allowance activity:
Balance at beginning of period $ 23,266 $ 17,067
From acquired banks 816 4,885
Provision for loan losses 1,380 2,844
Loan charge-offs (net) (1,499) (2,174)
Balance at end of period $ 23,963 $ 22,622
Net charge-offs to average loans (3) .20% .34%
Average loans receivable $3,019,371 $2,531,398
See Notes to Financial Highlights.
/TABLE
FIRST FINANCIAL CORPORATION
At At At
March 31, December 31, March 31,
1994 (1) 1993 (2) 1993
FINANCIAL CONDITION
Total assets $4,863,036 $4,774,633 $4,467,769
Investment securities 185,215 275,696 187,066
Mortgage-related securities (MBS) 1,393,121 1,326,253 1,496,407
Loans receivable, including loans
held for sale 3,036,383 2,922,504 2,565,096
Cost in excess of fair value of
net assets of acquired businesses 3,613 3,070 3,485
Core deposit intangibles 27,134 28,322 23,905
Deposits 4,157,793 4,050,520 3,817,730
Borrowings 380,490 438,598 384,478
Stockholders' equity $ 254,233 $ 234,685 $ 202,208
Stockholders' equity to total assets 5.23% 4.92% 4.53%
Tangible stockholders' equity $ 223,486 $ 203,293 $ 174,818
Shares outstanding 24,602,752 23,586,827 23,457,036
Book value per share $ 10.33 $ 9.95 $ 8.62
Tangible book value per share $ 9.08 $ 8.62 $ 7.45
Market price per share at end of period $ 15.75 $ 16.75 $ 13.75
Net interest margin at end of period 3.30% 3.36% 3.37%
Number of branch offices 124 117 113
Number of employees 1,650(Est.) 1,657 1,673
ASSET QUALITY DATA
Non-performing assets
Non-accrual loans:
Residential mortgage $ 6,036 $ 5,144 $ 5,494
Commercial real estate mortgage 682 -- 3,427
Commercial business 1,210 -- --
Manufactured housing 883 1,063 1,085
Consumer and other 2,104 2,033 1,861
Total non-accrual loans 10,915 8,240 11,867
Non-accrual MBSs 21,199 -- --
Foreclosed real estate properties 6,002 6,653 12,775
Other repossessed assets 318 164 563
Total non-performing assets $ 38,434 $ 15,057 $ 25,205
Non-accrual loans to loans receivable .36% .28% .56%
Non-performing assets to total assets .79% .32% .46%
Summary of loan loss allowances:
Credit cards $ 6,775 $ 6,502 $ 5,619
Residential mortgage 5,910 5,877 5,363
Manufactured housing 4,724 4,668 4,986
Commercial real estate mortgage 3,698 4,010 4,400
Commercial business 309 -- --
Consumer and other 2,547 2,209 2,254
Total allowances $ 23,963 $ 23,266 $ 22,622
Allowances to loans receivable .79% .80% .88%
Allowances as percent of non-
accrual loans 219.54% 282.35% 190.63%
REGULATORY CAPITAL RATIOS (FULLY PHASED-IN)
First Financial Bank, FSB (Estimate for 1994)
Tangible capital 5.47% 5.21% 4.78%
Core leverage capital 6.01 5.78 5.30
Risk-based capital 13.04 12.56 12.16
First Financial-Port Savings Bank, FSB
Tangible capital 7.73% 7.38% 9.18%
Core leverage capital 7.73 7.38 9.18
Risk-based capital 15.00 14.55 17.77
See Notes to Financial Highlights
FIRST FINANCIAL CORPORATION
NOTES TO FINANCIAL HIGHLIGHTS
Quarter Ended March 31, 1994
(1) On February 26, 1994, the Corporation completed the
acquisition of NorthLand Bank of Wisconsin, SSB
("NorthLand") of Ashland, Wisconsin. The Corporation
issued approximately 938,000 shares of common stock,
valued at $14.2 million, at the time of the acquisition.
The acquisition of NorthLand has been accounted for as a
pooling-of-interests. NorthLand is not material to the
balance sheet or operating results of the Corporation;
therefore, balances for prior years have not been
restated. However, 1994 amounts were adjusted to reflect
the transaction as if it had occurred on January 1, 1994.
Upon closing, NorthLand was merged into the Corporation's
major subsidiary, First Financial Bank, FSB ("First
Financial"). As of December 31, 1993, NorthLand reported
total assets and stockholders' equity of $127.4 million
and $11.4 million, respectively.
(2) On August 20, 1993, First Financial completed the
assumption of deposits (approximately $268.0 million) and
the purchase of the branch facilities of the four Quincy,
Illinois-area branches of Citizens Federal, a Federal
Savings Bank ("Citizens") of Miami, Florida. The
acquisition of Citizens' four Quincy, Illinois-area
offices was accounted for as a purchase.
(3) Annualized data, as applicable.
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
ASSETS
March 31, December 31,
1994 1993
(In thousands)
Cash $ 55,445 $ 63,241
Federal funds sold 11,348 21,873
Interest-earning deposits 8,141 25,768
Cash and cash equivalents 74,934 110,882
Securities available-for-sale
(at fair value):
Investment securities 30,763 84,487
Mortgage-related securities 143,783 178,362
Securities held-to-maturity (at
amortized cost):
Investment securities 134,963 143,568
Mortgage-related securities 1,249,338 1,147,891
Loans receivable:
Held for sale 43,973 73,919
Held for investment 2,992,410 2,848,585
Foreclosed properties and repossessed
assets 6,320 6,817
Real estate held for investment or sale 17,028 16,810
Office properties and equipment 50,371 50,120
Intangible assets, less accumulated
amortization 30,747 31,392
Other assets 88,406 81,800
$4,863,036 $4,774,633
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $4,157,793 $4,050,520
Borrowings 380,490 438,598
Advance payments by borrowers for
taxes and insurance 29,964 13,805
Other liabilities 40,556 37,025
Total liabilities 4,608,803 4,539,948
Stockholders' equity:
Serial preferred stock, $1 par value,
3,000,000 shares authorized; none
outstanding
Common stock, $1 par value, 30,000,000
shares authorized; shares issued and
outstanding: 24,602,752-1994;
23,586,827-1993 24,603 23,587
Additional paid-in capital 31,483 27,340
Net unrealized holding gain on
securities available for sale 735 2,701
Retained earnings (substantially
restricted) 197,412 181,057
Total stockholders' equity 254,233 234,685
$4,863,036 $4,774,633
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
1994 1993
(In thousands, except
per share amounts)
Interest income:
Mortgage loans $ 40,215 $ 38,303
Other loans 22,872 19,548
Mortgage-related securities 18,553 23,609
Investments 3,274 2,924
Total interest income 84,914 84,384
Interest expense:
Deposits 41,171 44,576
Borrowings 4,831 4,762
Total interest expense 46,002 49,338
Net interest income 38,912 35,046
Provision for losses on loans 1,380 2,844
37,532 32,202
Non-interest income:
Loan fees and service charges 2,010 1,930
Insurance and brokerage sales
commissions 1,843 1,715
Deposit account service fees 1,840 1,619
Service fees on loans sold 1,316 1,647
Net gain on sale of mortgage
loans (net of market valua-
tion allowance of $249,000--
1994) 417 1,165
Net gain on sale of securities
available-for-sale 1,119 --
Other 1,188 592
Total non-interest income 9,733 8,668
Operating income 47,265 40,870
Non-interest expense:
Compensation, payroll taxes
and benefits 11,712 11,350
Federal deposit insurance
premiums 2,403 1,423
Occupancy 2,140 1,895
Data processing 1,815 2,187
Loan expenses 1,437 1,149
Telephone and postage 1,409 1,269
Amortization of intangible
assets 1,344 1,155
Furniture and equipment 1,307 1,271
Marketing 1,042 774
Net cost of operations of
foreclosed properties 343 1,063
Other 2,507 2,146
Total non-interest expense 27,459 25,682
Income before income taxes 19,806 15,188
Income taxes 7,526 5,639
Net income $ 12,280 $ 9,549
Earnings per share:
Primary $ 0.49 $ 0.40
Fully Diluted $ 0.49 $ 0.40
Cash dividend per share $ 0.10 $ 0.075
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Net
Unrealized
Common Stock Holding
And Gain On
Additional Securities Total
Paid-In Retained Available- Stockholders'
Capital Earnings For-Sale (1) Equity
(In thousands)
Balance, December 31, 1993 $50,927 $181,057 $2,701 $234,685
Net income - three months
ended March 31, 1994 12,280 12,280
Cash dividend ($0.10 per share) (2,538) (2,538)
Issuance of 938,000 shares
of common stock in con-
junction with the acqui-
sition of NorthLand
Savings Bank of Wisconsin,
SSB (2) 4,788 6,613 -- 11,401
Issuance of common stock upon
exercises of stock options 371 371
Net change in unrealized
holding gain on securities
available-for-sale (1,966) (1,966)
BALANCE, MARCH 31, 1994 $56,086 $197,412 $ 735 $254,233
<FN>
(1) Net of related tax effect.
(2) Accounted for as a pooling-of-interests. Prior year's
balances have not been restated due to immateriality of the
acquired bank's relative to the Corporation.