NEWS RELEASE
[FIRST FINANCIAL CORPORATION LOGO]
One First Financial Plaza, Terre Haute, IN 47807 o (812) 238-6000
FOR IMMEDIATE RELEASE For more information contact:
August 11, 2004 Michael A. Carty at (812) 238-6264
FIRST FINANCIAL CORPORATION REPORTS RESULTS
TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ: THFF) today
announced that earnings per share for the second quarter increased 4.4% to $0.47
per share compared to $0.45 for the second quarter of 2003. This represents an
improvement in earnings of 2.5% or $155,000 higher than the same period of 2003.
The year-to-date net income of $17.0 million, or $1.26 per share, is also an
improvement compared to the $13.2 million and $0.97 per share earned through the
second quarter of 2003.
Although the year-to-date net interest income for 2004 declined $1.9 million, or
5.1% compared to the same period of 2003, non-interest expense reduced by
non-interest income was $4.7 million less for 2004 compared to the same period
of 2003. Life insurance proceeds are a major contributor to this reduction;
however, expense control and increases in other non-interest income resulted in
a $600,000 decrease in net non-interest expense for the Corporation.
The net interest margin on average assets declined 25 basis points from 4.02% at
June 30, 2003 to 3.77% at June 30, 2004. The margin continues to compress as
borrowers take advantage of the historical low level of interest rates resulting
from an accommodative Federal Reserve policy. The Corporation has also resisted
extension of the investment portfolio duration which has resulted in lower short
term yields in anticipation of improved future opportunities.
Loans of the Corporation increased $41.6 million or 2.9% over balances at the
end of 2003 while deposits fell 3.9% or $57.0 million. A major component of the
decline in deposits was a $22.2 million decrease in state and local government
deposits. The increase in loans and decrease in deposits were funded by an
increase in other borrowings.
During the quarter ended June 30, 2004, First Financial Corporation declared a
dividend to shareholders of $0.39 per share, an increase of 14.7% over the
dividend of $0.34 declared during the same time period of 2003. This is the 16th
consecutive year the Corporation has increased its annual dividend.
Statements in this press release that relate to future results and events
(including statements about future financial and operating performance) are
based on the Corporation's current expectations. Actual results in future
periods may differ materially from those currently expected or desired because
of a number of risks and uncertainties, including general economic and business
conditions; changes in interest rates; loss of deposits and loan demand to other
financial
institutions; substantial changes in financial markets; changes in real estate
values and the real estate market; or regulatory changes. Additional discussion
of these and other factors affecting the Corporation's business and prospects is
contained in the Corporation's periodic filings with the Securities and Exchange
Commission.
First Financial Corporation is the holding company for First Financial Bank N.A.
in Indiana and Illinois; First Farmers State Bank, The Morris Plan Company of
Terre Haute and Forrest Sherer, Inc. in Indiana; and First Crawford State Bank,
and First Community Bank N.A. in Illinois.
FIRST FINANCIAL CORPORATION
FOR THE QUARTER AND THE SIX MONTHS ENDING JUNE 30, 2004
(Dollar amounts in thousands except per share data)
06/30/04 06/30/03 CHANGE % CHANGE
YEAR TO DATE INFORMATION:
Net Income $17,014 $13,207 $3,807 28.83%
Earnings Per Average Share $1.26 $0.97 $0.29 29.90%
Return on Assets 1.53% 1.21% 0.32% 26.45%
Return on Equity 12.96% 10.65% 2.31% 21.69%
Net Interest Margin 3.77% 4.02% -0.25% -6.22%
Net Interest Income $35,686 $37,607 ($1,921) -5.11%
Non-Interest Income $20,898 $15,589 $5,309 34.06%
Non-Interest Expense $31,404 $30,798 $606 1.97%
Loss Provision $3,846 $4,530 ($684) -15.10%
Net Charge Offs $3,270 $4,076 ($806) -19.77%
Efficiency Ratio 56.74% 54.62% 2.12% 3.89%
QUARTER TO DATE INFORMATION:
Net Income $6,329 $6,174 $155 2.51%
Earnings Per Average Share $0.47 $0.45 $0.02 4.44%
Return on Assets 1.11% 1.13% -0.02% -1.77%
Return on Equity 9.78% 9.87% -0.09% -0.91%
Net Interest Margin 3.76% 4.02% -0.26% -6.47%
Net Interest Income $17,753 $18,678 ($925) -4.95%
Non-Interest Income $8,321 $7,510 $811 10.80%
Non Interest Expense $15,872 $15,373 $499 3.25%
Loss Provision $1,923 $2,303 ($380) -16.50%
Net Charge Offs $1,505 $2,414 ($1,067) -44.20%
Efficiency Ratio 57.81% 55.28% 2.52% 4.56%
BALANCE SHEET:
Assets $2,211,921 $2,154,419 $34,931 1.62%
Deposits $1,430,048 $1,464,500 ($57,023) -3.89%
Loans $1,459,481 $1,417,873 $41,608 2.93%
Shareholders' Equity $259,876 $249,964 $9,912 3.97%
Book Value Per Share $19.25 $18.43 $0.82 4.46%
Average Assets 2,220,750 2,182,873 $37,877 1.74%