NEWS RELEASE
[FIRST FINANCIAL CORPORATION LOGO] FIRST FINANCIAL
CORPORATION
One First Financial Plaza, Terre Haute, IN 47807 o (812) 238-6000
FOR IMMEDIATE RELEASE For more information contact:
August 1, 2005 Michael A. Carty at (812) 238-6264
FIRST FINANCIAL CORPORATION REPORTS SECOND QUARTER EARNINGS OF $.37 PER SHARE
TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced
the results for the second quarter of 2005 with net income for the three-month
period ended June 30, 2005 of $5.0 million or $.37 per share. Earnings for the
six-months ended June 30, 2005 are $11.3 million. Loans at June 30, 2005
increased $1.7 million to $1.46 billion and deposits increased $59.6 million to
$1.49 billion from the previous year quarter end.
Rising interest rates have had a positive impact on the Corporation's net
interest income, which for the first six months of 2005 increased by $935
thousand or 2.62% over the same period in 2004. The net interest margin
increased to 3.95% for the six-months ended June 30, 2005 from 3.77% for the
same period in 2004. This 4.8% increase was driven by growth in the yield on
earning assets which outpaced the average cost of funds.
The modest amount of loan growth for the year has allowed the Corporation to
direct attention to aggressively addressing some potential asset quality
concerns during the second quarter. Letters of intent to sell several
non-performing loans were entered into during the period. This has resulted in
larger than normal net charge-offs for the quarter, as these loans will be sold
at a discount. This will allow the Corporation to reinvest the proceeds into
performing assets to improve future results. A $1.5 million addition to the
allowance for loan and leases losses was made to recognize the additional losses
resulting from this decision. At period end the allowance was 1.2% of loans
outstanding.
Non-interest income for the second quarter of 2005 was $7.8 million compared to
$8.3 million for the same period in 2004. This reduction of approximately $500
thousand primarily resulted from $391 thousand less gain on the sale of
investment securities for the 3 months ended June 30, 2005 compared to the same
period of 2004. The year-to-date non-interest income is $5.4 million less than
last year's performance largely as a result of the previously reported
non-taxable gain on life insurance realized in the first quarter of 2004.
Benefits continue to be realized from the consolidation of affiliate banks into
one bank as second quarter non-interest expense was lower than the same period
in 2004. Non-interest expense for the second quarter and the six-months ended
June 30, 2005 is $95 thousand and $286 thousand less, respectively, than the
same periods in 2004. Seven of the eight subsidiary banks have completed the
consolidation process and now operate as First Financial Bank.
A $59.6 million or 4.2% increase in deposits from June 30, 2004 to June 30, 2005
was used to fund loans and reduce borrowings. Average assets decreased $70.7
million, or 3.19%. The decrease primarily resulted from the Corporation's use of
maturing investments to retire debt. Shareholder's equity increased $8.7
million, or 3.3%, and book value per share rose by $.79 to $20.04, or 4.1%.
First Financial Corporation is the holding company for First Financial Bank NA
in Indiana and Illinois; The Morris Plan Company of Terre Haute and Forrest
Sherer Inc. in Indiana; and First Community Bank NA in Illinois.
This document contains forward-looking statements. Forward-looking statements
provide current expectations or forecasts of future events and are not
guarantees of future performance, nor should they be relied upon as representing
management's views as of any subsequent date. The forward-looking statements are
based on management's expectations and are subject to a number of risks and
uncertainties. Although management believes that the expectations reflected in
such forward-looking statements are reasonable, actual results may differ
materially from those expressed or implied in such statements. Risks and
uncertainties that could cause actual results to differ materially include,
without limitation, the Corporation's ability to effectively execute its
business plans; changes in general economic and financial market conditions;
changes in interest rates; changes in the competitive environment; continuing
consolidation in the financial services industry; new litigation or changes in
existing litigation; losses, customer bankruptcy, claims and assessments;
changes in banking regulations or other regulatory or legislative requirements
affecting the Corporation's business; and changes in accounting policies or
procedures as may be required by the Financial Accounting Standards Board or
other regulatory agencies. Additional information concerning factors that could
cause actual results to differ materially from those expressed or implied in the
forward-looking statements is available in the Corporation's Annual Report on
Form 10-K for the year ended December 31, 2004, and subsequent filings with the
United States Securities and Exchange Commission (SEC). Copies of these filings
are available at no cost on the SEC's Web site at WWW.SEC.GOV or on the
Corporation's Web site AT WWW.FIRST-ONLINE.COM. Management may elect to update
forward-looking statements at some future point; however, it specifically
disclaims any obligation to do so.
FIRST FINANCIAL CORPORATION
FOR THE QUARTER AND THE SIX MONTHS ENDING JUNE 30, 2005
(Dollar amounts in thousands except per share data)
06/30/05 06/30/04 CHANGE % CHANGE
YEAR TO DATE INFORMATION:
Net Income $ 11,303 $ 17,014 $ (5,711) -33.57%
Earnings Per Average Share $ 0.84 $ 1.26 $ (0.42) -33.33%
Return on Assets 1.05% 1.52% -0.47% -30.97%
Return on Equity 8.30% 12.96% -4.66% -35.96%
Net Interest Margin 3.95% 3.77% 0.18% 4.77%
Net Interest Income $ 36,621 $ 35,686 $ 935 2.62%
Non-Interest Income $ 15,539 $ 20,898 $ (5,359) -25.64%
Non-Interest Expense $ 31,118 $ 31,404 $ (286) -0.91%
Loan Loss Provision $ 6,006 $ 3,846 $ 2,160 56.16%
Net Charge Offs $ 8,360 $ 3,270 $ 5,090 155.66%
Efficiency Ratio 56.94% 56.74% 0.20% 0.35%
QUARTER TO DATE INFORMATION:
Net Income $ 4,992 $ 6,329 $ (1,337) -21.12%
Earnings Per Average Share $ 0.37 $ 0.47 $ (0.10) -21.28%
Return on Assets 0.93% 1.11% -0.18% -16.22%
Return on Equity 7.34% 9.78% -2.44% -24.95%
Net Interest Margin 3.98% 3.76% 0.22% 5.85%
Net Interest Income $ 18,278 $ 17,753 $ 525 2.96%
Non-Interest Income $ 7,807 $ 8,321 $ (514) -6.18%
Non Interest Expense $ 15,777 $ 15,872 $ (95) -0.60%
Loan Loss Provision $ 3,783 $ 1,923 $ 1,860 96.72%
Net Charge Offs $ 6,137 $ 1,505 $ 4,632 307.77%
Efficiency Ratio 57.99% 57.81% 0.18% 0.31%
BALANCE SHEET:
Assets $2,157,759 $2,211,921 $ (54,162) 2.45%
Deposits $1,489,608 $1,430,048 $ 59,560 4.16%
Loans $1,461,131 $1,459,481 $ 1,650 0.11%
Shareholders' Equity $ 268,545 $ 259,876 $ 8,669 3.34%
Book Value Per Share $ 20.04 $ 19.25 $ 0.79 4.09%
Average Assets $2,150,014 $2,220,750 $ (70,736) -3.19%