TERRE HAUTE, IN--(Marketwire - August 3, 2009) - First Financial Corporation (
NASDAQ:
THFF)
today announced the results for the second quarter of 2009. Total loans
increased by $85.5 million or 5.86% over the same period in 2008.
Commercial, financial and agriculture lending increased by $21.8 million or
4.4%, and consumer loans increased by $44.5 million or 15.9%. Total
deposits at June 30, 2009 were $1.585 billion. Average deposits for the
quarter were $14.4 million higher than in the same quarter of 2008.
Net income of $4.6 million, $.35 per share, for the three months ended June
30, 2009 is $2.5 million less than that reported in the same period of
2008. Although the Corporation continues to enjoy a strong net interest
margin, which provided an additional $616 thousand of net interest income
for the quarter ended June 30th from the prior year, quarterly and
year-to-date earnings were negatively impacted by three factors for the
period.
A one-time assessment by the Federal Deposit Insurance Corporation of five
basis points of total assets, less Tier 1 capital, in the amount of $1.8
million, provided the total increase in non-interest expense for the
quarter. This assessment decreased earnings per share, net of tax, by $.08.
Our markets continue to feel the effects of a slowing economy. Although our
classified loans remained at approximately the same level as the prior
period and our specific allocation for loan losses related to those credits
actually decreased, we continue to see deterioration in non-performing
credits. We believe that prudent management practices require continued
strengthening of the Allowance for Loan and Lease Losses during this
economic cycle. As such an additional $1.1 million was added to the
quarterly provision for loan losses during the quarter when compared to the
previous quarter to recognize the risk associated with the significant
increase in total loans outstanding during the period and the continued
weakness in the economy. This increase reduced the period earnings per
share by $.05 after tax.
During the current quarter the Corporation was required to adopt various
accounting standards changing the methodology for reporting losses on
securities that have been determined to be "Other Than Temporarily
Impaired" (OTTI). As a result some losses on securities that have been
recognized in prior periods were added back to retained earnings at the
beginning of the period to reflect only credit losses associated with the
investments as OTTI and to account for the remaining differences between
book value and market value as adjustments through other comprehensive
income, consistent with these new accounting rules. Upon analyzing the
present value of expected cash flows as of the end of the quarter compared
to the beginning of the quarter, we determined OTTI related to expected
credit loss to have occurred on these same investments and our estimate of
this loss is included in the current period results. In addition, two
additional collateralized debt obligations were determined to be other than
temporarily impaired and corresponding credit losses were calculated to
comply with the adoption of the new standards. The net result to income of
these adjustments was a $1.6 million loss recorded in non-interest income
or $.07 per share after tax.
Although there are signs of an improving economy, the Corporation believes
a conservative approach to loss recognition is appropriate. Recovery of
recognized losses is expected should the economic cycle improve; however,
there can be no assurance that such recoveries, if any, will occur or, if
such recoveries occur, any assurance as to the timing of such recoveries.
First Financial Corporation believes its strong capital base, which
increased during the first six months of 2009 by $10.9 million, positions
the Corporation to weather the current economic downturn. On May 20, 2009
the Corporation declared a dividend of 45 cents per share which makes 21
the number of years dividends paid have increased.
On July 2nd the Corporation assumed the deposits and acquired a majority of
the assets of The First National Bank of Danville in Vermilion County, Ill.
The Corporation purchased approximately $90 million of loans and$145
million of deposits.
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.
FORWARD-LOOKING STATEMENTS
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,
2008, 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 Ending June 30, 2009
(Dollar amounts in thousands except per share data)
06/30/09 06/30/08 Change % Change
Year to Date Information:
Net Income $ 9,151 $ 14,093 ($ 4,942) -35.07%
Earnings Per Average Share $ 0.70 $ 1.07 ($ 0.37) -34.58%
Return on Assets 0.79% 1.24% -0.45% -36.29%
Return on Equity 6.18% 9.68% -3.50% -36.16%
Net Interest Margin 4.02% 3.93% 0.09% 2.29%
Net Interest Income $ 41,039 $ 38,916 $ 2,123 5.46%
Non-Interest Income $ 10,875 $ 16,290 ($ 5,415) -33.24%
Non-Interest Expense $ 34,699 $ 32,654 $ 2,045 6.26%
Loss Provision $ 5,690 $ 3,660 $ 2,030 55.46%
Net Charge Offs $ 4,933 $ 3,458 $ 1,475 42.65%
Efficiency Ratio 63.53% 56.96% 6.57% 11.54%
Quarter to Date Information:
Net Income $ 4,621 $ 7,143 ($ 2,522) -35.31%
Earnings Per Average Share $ 0.35 $ 0.55 ($ 0.20) -36.36%
Return on Assets 0.79% 1.26% -0.47% -37.30%
Return on Equity 6.19% 9.74% -3.55% -36.45%
Net Interest Margin 4.01% 4.01% 0.00% 0.00%
Net Interest Income $ 20,576 $ 19,960 $ 616 3.09%
Non-Interest Income $ 6,129 $ 7,641 ($ 1,512) -19.79%
Non-Interest Expense $ 18,002 $ 16,230 $ 1,772 10.92%
Loan Loss Provision $ 2,860 $ 1,735 $ 1,125 64.84%
Net Charge Offs $ 2,852 $ 1,625 $ 1,227 75.51%
Efficiency Ratio 64.14% 56.63% 7.51% 13.26%
Balance Sheet:
Assets $2,351,853 $2,303,425 $ 48,428 2.10%
Deposits $1,584,626 $1,610,835 ($ 26,209) -1.63%
Loans $1,545,072 $1,459,582 $ 85,490 5.86%
Shareholders' Equity $ 292,657 $ 281,717 $ 10,940 3.88%
Book Value Per Share $ 22.31 $ 21.51 $ 0.80 3.73%
Average Assets $2,315,509 $2,271,771 $ 43,738 1.93%
Asset Quality:
Loans Past Due 90 Days or More
and Still Accruing $ 5,426 $ 2,758 $ 2,668 96.74%
Non-Accrual Loans $ 31,114 $ 9,345 $ 21,769 232.95%
Other Real Estate Owned $ 2,920 $ 2,269 $ 651 28.69%
Total Nonperforming Assets $ 39,460 $ 14,372 $ 25,088 174.56%
Contact Information: For more information contact:
Michael A. Carty
(812) 238-6264
FIRST FINANCIAL CORPORATION
One First Financial Plaza
Terre Haute, Indiana 47807
(812) 238-6000