Source: First Financial Corp.

First Financial Corporation reports 1st Quarter results

TERRE HAUTE, IN--(Marketwired - April 26, 2017) - First Financial Corporation (NASDAQ: THFF) today announced results for the first quarter of 2017. Net income for the three months ending March 31, 2017 was $9.37 million compared to $13.68 million for the same period of 2016, which included an after-tax gain on the sale of the Corporation's insurance subsidiary of $5.8 million. Diluted net income per common share was $0.77 compared to $1.08 for the same period of 2016. Return on assets for the three months ended March 31, 2017 was 1.26% compared to 1.85% for the three months ended March 31, 2016.

Average total loans for the first quarter of 2017 were $1.84 billion versus $1.76 billion for the comparable period in 2016, an increase of $83.6 million or 4.75%. Total loans outstanding increased $70.9 million, or 4.03%, from $1.76 billion as of March 31, 2016 to $1.83 billion as of March 31, 2017. On a linked quarter basis, average total loans increased $10.8 million, or 0.59%, from $1.83 billion for the quarter ending December 31, 2016.

Average total deposits for the quarter ended March 31, 2017 were $2.44 billion versus $2.42 billion as of March 31, 2016, an increase of 1.05%. Total deposits increased $37.4 million or 1.56% from $2.40 billion as of March 31, 2016 to $2.44 billion as of March 31, 2017.

The company's tangible common equity to tangible asset ratio was 13.63% at March 31, 2017, compared to 13.05% at March 31, 2016.

Net interest income for the first quarter of 2017 was $26.5 million, an increase of 1.34% over the $26.2 million reported for the same period of 2016. The net interest margin for the quarter ended March 31, 2017 decreased to 4.05% from the 4.06% reported at March 31, 2016.

Asset quality remains strong with nonperforming loans decreasing 19.77% to $19.7 million as of March 31, 2017 versus $23.6 million as of March 31, 2016. The ratio of nonperforming loans to total loans also decreased to 1.20% as of March 31, 2017 versus 1.50% as of March 31, 2016.

The provision for loan losses for the three months ended March 31, 2017 was $1.60 million compared to the $835 thousand provision for the first quarter of 2016. Net charge-offs were $974 thousand for the first quarter of 2017 compared to $855 thousand in the same period of 2016. The Corporation's allowance for loan losses as of March 31, 2017 was $19.4 million compared to $19.9 million as of March 31, 2016. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2017 compared to 1.13% as of March 31, 2016.

Non-interest income for the three months ended March 31, 2017 and 2016 was $11.0 and $21.5 million, respectively. The 2016 first quarter non-interest income included a $13.0 million gain on sale of the Corporation's insurance subsidiary. A first quarter 2017 cash recovery of previous other-than-temporary impairment increased non-interest income $3.1 million. Service charges on deposits increased $273 thousand over the same period in 2016 and other service charges and fees increased $185 thousand.

Non-interest expense for the three months ended March 31, 2017 increased $112 thousand to $22.6 million compared to $22.5 million in 2016. On a linked quarter basis, non-interest expense increased $382 thousand from $22.2 million for the quarter ended December 31, 2016. On a year-over-year basis, salaries and employee benefits decreased $219 thousand. The Corporation's efficiency ratio was 57.77% for the quarter ending March 31, 2017 versus 45.68% for the same period in 2016.

Book value per share was $34.92 at March 31, 2017, a 3.99% increase from the $33.58 at March 31, 2016. Shareholders' equity increased 3.62% to $426.8 million from $411.9 million on March 31, 2016.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our first quarter 2017 results. Our average loan balances continue to increase and we continue to grow our interest income and net interest income. Asset quality also remains healthy. It was another good quarter for First Financial."

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.

    
   Three Months Ended
   March 31,  December 31,  March 31,
   2017  2016  2016
END OF PERIOD BALANCES            
 Assets  $2,957,285  $2,988,527  $2,939,240
 Deposits  $2,438,012  $2,428,526  $2,400,655
 Loans  $1,834,893  $1,839,180  $1,763,659
 Allowance for Loan Losses  $19,395  $18,773  $19,926
 Total Equity  $426,808  $414,395  $411,912
 Tangible Common Equity  $390,470  $377,931  $375,000
             
AVERAGE BALANCES            
 Total Assets  $2,983,114  $2,970,031  $2,959,007
 Earning Assets  $2,766,991  $2,778,369  $2,724,926
 Investments  $919,599  $923,957  $955,996
 Loans  $1,841,392  $1,830,628  $1,757,811
 Total Deposits  $2,444,162  $2,464,246  $2,418,668
 Interest-Bearing Deposits  $1,971,848  $1,895,665  $1,873,070
 Interest-Bearing Borrowings  $50,164  $35,531  $46,026
 Total Equity  $426,673  $405,261  $414,974
             
INCOME STATEMENT DATA            
 Net Interest Income  $26,507  $26,406  $26,157
 Net Interest Income Fully Tax Equivalent  $28,031  $27,956  $27,692
 Provision for Loan Losses  $1,596  $939  $835
 Non-interest Income  $11,049  $8,428  $21,484
 Non-interest Expense  $22,577  $22,195  $22,465
 Net Income  $9,369  $8,344  $13,675
             
PER SHARE DATA            
 Basic and Diluted Net Income Per Common Share  $0.77  $0.68  $1.08
 Cash Dividends Declared Per Common Share  $-  $0.50  $-
 Book Value Per Common Share  $34.92  $33.92  $33.58
 Tangible Book Value Per Common Share  $31.94  $30.94  $30.57
 Basic Weighted Average Common Shares Outstanding   12,217   12,201   12,646
          
          
      
Key Ratios  Three Months Ended  
   March 31,   December 31,   March 31,  
   2017   2016   2016  
Return on average assets  1.26 % 1.12 % 1.85 %
Return on average common shareholder's equity  8.78 % 8.24 % 13.28 %
Efficiency ratio  57.77 % 61.00 % 45.68 %
Average equity to average assets  14.31 % 13.65 % 13.92 %
Net interest margin  4.05 % 4.01 % 4.06 %
Net charge-offs to average loans and leases  0.21 % 0.27 % 0.19 %
Loan and lease loss reserve to loans and leases  1.06 % 1.02 % 1.13 %
Loan and lease loss reserve to nonperforming loans and other real estate  98.37 % 74.50 % 84.38 %
Nonperforming loans to loans  1.20 % 1.43 % 1.50 %
Tier 1 leverage  13.63 % 13.39 % 13.05 %
Risk-based capital - Tier 1  17.78 % 17.43 % 17.81 %
          
          
    
Asset Quality  Three Months Ended
   March 31,  December 31,  March 31,
   2017  2016  2016
Accruing loans and leases past due 30-89 days  $7,713  $10,757  $7,292
Accruing loans and leases past due 90 days or more  $453  $610  $858
Nonaccrual loans and leases  $11,106  $13,492  $13,248
Nonperforming loans and other real estate  $22,011  $25,198  $26,465
Other real estate owned  $2,294  $2,531  $2,850
Total nonperforming assets  $34,004  $37,567  $39,617
Total troubled debt restructurings  $8,158  $8,565  $9,509
Gross charge-offs  $2,274  $2,743  $1,640
Recoveries  $1,300  $1,500  $785
Net charge-offs/(recoveries)  $974  $1,243  $855
          
          
  
CONSOLIDATED BALANCE SHEETS 
(Dollar amounts in thousands, except per share data) 
  
   March 31,
 2017		   December 31,
 2016		  
   (unaudited)  
ASSETS           
Cash and due from banks  $50,522   $75,012  
Federal funds sold   5,000    6,952  
Securities available-for-sale   855,681    853,725  
Loans:           
Commercial   1,102,672    1,106,182  
Residential   420,963    423,911  
Consumer   308,196    305,881  
    1,831,831    1,835,974  
(Less) plus:           
Net deferred loan costs   3,062    3,206  
Allowance for loan losses   (19,395 )  (18,773 )
    1,815,498    1,820,407  
Restricted stock   10,369    10,359  
Accrued interest receivable   12,099    12,311  
Premises and equipment, net   48,566    49,240  
Bank-owned life insurance   84,040    83,737  
Goodwill   34,355    34,355  
Other intangible assets   1,983    2,109  
Other real estate owned   2,294    2,531  
Other assets   36,878    37,789  
TOTAL ASSETS  $2,957,285   $2,988,527  
            
LIABILITIES AND SHAREHOLDERS' EQUITY           
Deposits:           
Non-interest-bearing  $429,963   $564,092  
Interest-bearing:           
Certificates of deposit exceeding the FDIC insurance limits   45,193    43,759  
Other interest-bearing deposits   1,962,856    1,820,675  
    2,438,012    2,428,526  
Short-term borrowings   35,821    80,989  
FHLB advances   132    132  
Other liabilities   56,512    64,485  
TOTAL LIABILITIES   2,530,477    2,574,132  
            
Shareholders' equity           
Common stock, $.125 stated value per share;           
Authorized shares-40,000,000           
Issued shares-14,595,320 in 2017 and 14,578,758 in 2016           
Outstanding shares-12,223,750 in 2017 and 12,216,712 in 2016   1,820    1,820  
Additional paid-in capital   74,701    74,525  
Retained earnings   431,195    421,826  
Accumulated other comprehensive loss   (10,793 )  (14,164 )
Less: Treasury shares at cost-2,371,570 in 2017 and 2,362,026 in 2016   (70,115 )  (69,612 )
TOTAL SHAREHOLDERS' EQUITY   426,808    414,395  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $2,957,285   $2,988,527  
         
         
  
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 
(Dollar amounts in thousands, except per share data) 
  
   Three Months Ended March 31,  
   2017  2016  
   (unaudited)  
INTEREST INCOME:          
Loans, including related fees  $21,941  $21,184  
Securities:          
Taxable   3,757   3,831  
Tax-exempt   1,827   1,822  
Other   321   364  
TOTAL INTEREST INCOME   27,846   27,201  
INTEREST EXPENSE:          
Deposits   1,275   987  
Short-term borrowings   44   23  
Other borrowings   20   34  
TOTAL INTEREST EXPENSE   1,339   1,044  
NET INTEREST INCOME   26,507   26,157  
Provision for loan losses   1,596   835  
NET INTEREST INCOME AFTER PROVISION          
FOR LOAN LOSSES   24,911   25,322  
NON-INTEREST INCOME:          
Trust and financial services   1,317   1,334  
Service charges and fees on deposit accounts   2,777   2,504  
Other service charges and fees   3,185   3,000  
Securities gains/(losses), net   2   3  
Gain on sale of certain assets and liabilities of insurance brokerage   -   13,021  
Insurance commissions   22   2,272  
Gain on sales of mortgage loans   327   404  
Other   3,419   (172 )
TOTAL NON-INTEREST INCOME   11,049   22,366  
NON-INTEREST EXPENSE:          
Salaries and employee benefits   13,376   13,595  
Occupancy expense   1,768   1,731  
Equipment expense   1,797   1,837  
FDIC Expense   233   451  
Other   5,403   5,733  
TOTAL NON-INTEREST EXPENSE   22,577   23,347  
INCOME BEFORE INCOME TAXES   13,383   24,341  
Provision for income taxes   4,014   10,666  
NET INCOME   9,369   13,675  
OTHER COMPREHENSIVE INCOME          
Change in unrealized gains/losses on securities, net of reclassifications and taxes   3,188   4,039  
Change in funded status of post retirement benefits, net of taxes   183   304  
COMPREHENSIVE INCOME  $12,740  $18,018  
PER SHARE DATA          
Basic and Diluted Earnings per Share  $0.77  $1.08  
Weighted average number of shares outstanding (in thousands)   12,217   12,646  
        

Contact Information:

For more information contact:
Rodger A. McHargue
(812) 238-6334