• First Financial Corporation Reports Second Quarter Results

    Source: Nasdaq GlobeNewswire / 27 Jul 2021 10:30:00   America/New_York

    TERRE HAUTE, Ind., July 27, 2021 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2021. For the three months ending June 30, 2021:

    For the quarter:

    • Net income was $16.6 million compared to $11.9 million for the same period of 2020;
    • Diluted net income per common share of $1.24 compared to $0.87 for the same period of 2020; and
    • Return on average assets was 1.40% compared to 1.10% for the three months ended June 30, 2020.

    The Corporation further reported results for the six months ending June 30, 2021:

    • Net income was $29.5 million compared to $24.1 million for the same period of 2020;
    • Diluted net income per common share of $2.19 compared to $1.76 for the same period of 2020; and
    • Return on average assets was 1.26% compared to 1.16% for the six months ended June 30, 2020.

    “We are pleased with our second quarter results,” said Norman L. Lowery, Chairman and Chief Executive Officer. “Our asset quality remains strong which allows us to release some of the credit loss reserves established during the pandemic. Our focus continues to be on our customers and assisting them as they navigate these unusual times.”

    Average Total Loans
    Average total loans for the second quarter of 2021 were $2.62 billion versus $2.73 billion for the comparable period in 2020.

    Total Loans Outstanding
    Total loans outstanding as of June 30, 2021 were $2.57 billion compared to $2.78 billion as of June 30, 2020.

    Average Total Deposits
    Average total deposits for the quarter ended June 30, 2021, were $3.98 billion versus $3.53 billion as of June 30, 2020, an increase of $455 million or 12.90%.

    Total Deposits
    Total deposits were $3.99 billion as of June 30, 2021, compared to $3.57 billion as of June 30, 2020, an increase of $419 million or 11.73%. On a linked quarter basis, total deposits increased $83 million from $3.91 billion for the quarter ending March 31, 2021.

    Book Value Per Share
    Book Value per share was $45.08 at June 30, 2021, compared to $43.04 at June 30, 2020 an increase of 4.73%.

    Shareholder Equity
    Shareholder equity at June 30, 2021, was $588.2 million compared to $590.3 million on June 30, 2020. In the quarter the Corporation repurchased 497,000 shares of its common stock.

    Tangible Common Equity to Tangible Asset Ratio
    The Corporation’s tangible common equity to tangible asset ratio was 10.75% at June 30, 2021, compared to 11.73% at June 30, 2020.

    Net Interest Income
    Net interest income for the second quarter of 2021 was $35.6 million, compared to $35.9 million reported for the same period of 2020.

    Net Interest Margin
    The net interest margin for the quarter ended June 30, 2021, was 3.23% compared to the 3.97% reported at June 30, 2020.

    Nonperforming Loans
    Nonperforming loans as of June 30, 2021, were $20.0 million versus $23.0 million as of June 30, 2020. The ratio of nonperforming loans to total loans and leases was 0.78% as of June 30, 2021, versus 0.83% as of June 30, 2020.

    Credit Loss Provision
    The provision for credit losses for the three months ended June 30, 2021, was $(2.20) million compared to the $2.97 million provision for the second quarter of 2020. In the first three quarters of 2020 the provision was calculated using the incurred loss basis. Beginning in the fourth quarter 2020, the provision was calculated using the current expected credit loss accounting standard.

    Net Charge-Offs/Recoveries
    In the second quarter of 2021 net recoveries were $152 thousand compared to net charge-offs of $743 thousand in the same period of 2020.

    Allowance for Credit Losses
    In March 2020 due to the uncertainty surrounding the global pandemic and as provided by the Coronavirus Aid Relief and Economic Security Act the Corporation elected to delay the implementation of the Current Expected Credit Loss accounting standard. On December 31, 2020 the Corporation adopted ASU 2016-13 (topic 326), “Measurement of Credit Losses on Financial Instruments” commonly referenced as the Current Expected Credit Loss (“CECL”) model. CECL was retrospectively adopted on January 1, 2020.

    The Corporation’s allowance for credit losses as of June 30, 2021, was $44.7 million compared to $23.3 million as of June 30, 2020. The increase is primarily related to the adoption of CECL. The allowance for credit losses as a percent of total loans was 1.74% as of June 30, 2021, compared to 0.84% as of June 30, 2020. The allowance as of June 30, 2021 was calculated using CECL. The allowance as of June 30, 2020 was calculated using the incurred loss method.

    Non-Interest Income
    Non-interest income for the three months ended June 30, 2021 and 2020 was $10.9 and $8.8 million, respectively.

    Non-Interest Expense
    Non-interest expense for the three months ended June 30, 2021, was $28.0 million compared to $26.9 million in 2020.

    Efficiency Ratio
    The Corporation’s efficiency ratio was 58.75% for the quarter ending June 30, 2021, versus 58.78% for the same period in 2020.

    Income Taxes
    Income tax expense for the six months ended June 30, 2021, was $7.38 million versus $5.92 million for the same period in 2020. The effective tax rate for the second quarter of 2021 was 20.02% compared to 19.71% for same period of 2020.

    “I am proud of the dedication of our associates in providing sound advice and financial solutions to our customers, as we continue to navigate through COVID-19 and its related issues,” Lowery stated.

    About First Financial Corporation
    First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A. and The Morris Plan Company of Terre Haute, Inc. First Financial Bank N.A. is the fifth oldest national bank in the United States, operating 80 banking centers in Illinois, Indiana, Kentucky and Tennessee. The Morris Plan Company of Terre Haute, Inc. is a state industrial chartered financial institution operating one office in Terre Haute, Indiana. Additional information is available at www.first-online.bank.

    Investor Contact:
    Rodger A. McHargue
    Chief Financial Officer
    P: 812-238-6334
    E: rmchargue@first-online.com


     Three Months EndedSix Months Ended
     June 30,March 31,June 30,June 30,June 30,
     20212021202020212020
    END OF PERIOD BALANCES     
    Assets$4,753,308 $4,681,216 $4,368,112 $4,753,308 $4,368,112 
    Deposits$3,988,751 $3,905,348 $3,569,893 $3,988,751 $3,569,893 
    Loans, including net deferred loan costs$2,568,713 $2,646,937 $2,777,083 $2,568,713 $2,777,083 
    Allowance for Credit Losses$44,732 $46,776 $23,285 $44,732 $23,285 
    Total Equity$588,163 $598,112 $590,284 $588,163 $590,284 
    Tangible Common Equity (a)$501,459 $510,981 $501,863 $501,459 $501,863 
          
    AVERAGE BALANCES     
    Total Assets$4,751,068 $4,600,750 $4,317,011 $4,675,909 $4,169,900 
    Earning Assets$4,552,581 $4,404,109 $3,720,477 $4,478,345 $3,673,078 
    Investments$1,244,551 $1,133,439 $989,545 $1,188,995 $989,034 
    Loans$2,619,887 $2,640,291 $2,727,820 $2,630,089 $2,682,428 
    Total Deposits$3,981,243 $3,816,705 $3,526,529 $3,898,974 $3,398,578 
    Interest-Bearing Deposits$3,173,782 $3,059,290 $2,858,594 $3,116,536 $2,798,994 
    Interest-Bearing Liabilities$101,594 $110,448 $121,791 $106,021 $114,317 
    Total Equity$600,599 $600,669 $591,522 $600,634 $580,609 
          
    INCOME STATEMENT DATA     
    Net Interest Income$35,628 $34,913 $35,895 $70,541 $72,245 
    Net Interest Income Fully Tax Equivalent (b)$36,719 $35,959 $36,962 $72,678 $74,371 
    Provision for Credit Losses$(2,196)$452 $2,965 $(1,744)$5,655 
    Non-interest Income$10,931 $9,294 $8,776 $20,225 $17,871 
    Non-interest Expense$27,996 $27,639 $26,883 $55,635 $54,437 
    Net Income$16,614 $12,877 $11,924 $29,491 $24,105 
          
    PER SHARE DATA     
    Basic and Diluted Net Income Per Common Share$1.24 $0.95 $0.87 $2.19 $1.76 
    Cash Dividends Declared Per Common Share$0.53 $— $0.52 $0.53 $0.52 
    Book Value Per Common Share$45.08 $44.2 $43.04 $45.08 $43.04 
    Tangible Book Value Per Common Share (c)$38.31 $37.76 $36.68 $38.43 $36.59 
    Basic Weighted Average Common Shares Outstanding13,414 13,533 13,715 13,473 13,727 

    (a) Tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholder's equity.
    (b) Net interest income fully tax equivalent is a non-GAAP financial measure derived from GAAP-based amounts. We calculate net interest income fully tax equivalent by adding back the tax equivalent factor of tax exempt income to net interest income. We calculate the tax equivalent factor of tax exempt income by dividing tax exempt income by the net of tax rate of 75%.
    (c) Tangible book value per common share is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the factor by dividing average tangible common equity by average shares outstanding. We calculate average tangible common equity by excluding average intangible assets from average shareholder's equity.


    Key RatiosThree Months EndedSix Months Ended
     June 30,March 31,June 30,June 30,June 30,
     20212021202020212020
    Return on average assets1.40 %1.12%1.10%1.26%1.16%
    Return on average common shareholder's equity11.06 %8.58%8.06%9.82%8.30%
    Efficiency ratio58.75 %61.08%58.78%59.89%59.02%
    Average equity to average assets12.64 %13.06%13.70%12.85%13.92%
    Net interest margin (a)3.23 %3.27%3.97%3.25%4.05%
    Net charge-offs to average loans and leases(0.02)%0.11%0.11%0.04%0.17%
    Credit loss reserve to loans and leases1.74 %1.77%0.84%1.74%0.84%
    Credit loss reserve to nonperforming loans223.46 %222.64%101.12%223.46%101.12%
    Nonperforming loans to loans and leases0.78 %0.79%0.83%0.78%0.83%
    Tier 1 leverage10.72 %11.34%11.64%10.72%11.64%
    Risk-based capital - Tier 117.15 %16.17%15.44%17.15%15.44%

    (a) Net interest margin is calculated on a tax equivalent basis.


    Asset QualityThree Months EndedSix Months Ended
     June 30,March 31,June 30,June 30,June 30,
     20212021202020212020
    Accruing loans and leases past due 30-89 days$9,430  $8,373 $15,358 $9,430 $15,358 
    Accruing loans and leases past due 90 days or more$1,202  $2,001 $4,438 $1,202 $4,438 
    Nonaccrual loans and leases$14,356  $14,545 $14,634 $14,356 $14,634 
    Total troubled debt restructuring$4,460  $4,464 $3,899 $4,460 $3,899 
    Other real estate owned$989  $942 $3,577 $989 $3,577 
    Nonperforming loans and other real estate owned$21,007  $21,952 $26,548 $21,007 $26,548 
    Total nonperforming assets$24,272  $25,280 $29,493 $24,272 $29,493 
    Gross charge-offs$1,151  $2,338 $1,540 $3,489 $4,444 
    Recoveries$1,303  $1,610 $797 $2,913 $2,131 
    Net charge-offs/(recoveries)$(152) $728 $743 $576 $2,313 


    CONSOLIDATED BALANCE SHEETS
    (Dollar amounts in thousands, except per share data)

     June 30,
    2021    		 December 31,
    2020
     (unaudited)
    ASSETS   
    Cash and due from banks$677,862  $657,470 
    Federal funds sold516  301 
    Securities available-for-sale1,219,625  1,020,744 
    Loans:   
    Commercial1,521,707  1,521,711 
    Residential564,859  604,652 
    Consumer482,147  479,750 
     2,568,713  2,606,113 
    (Less) plus:   
    Net deferred loan costs2,241  4,181 
    Allowance for credit losses(44,732) (47,052)
     2,526,222  2,563,242 
    Restricted stock14,825  14,812 
    Accrued interest receivable15,103  16,957 
    Premises and equipment, net63,895  62,063 
    Bank-owned life insurance106,560  95,849 
    Goodwill78,592  78,592 
    Other intangible assets8,112  8,972 
    Other real estate owned989  1,012 
    Other assets41,007  37,530 
    TOTAL ASSETS$4,753,308  $4,557,544 
        
    LIABILITIES AND SHAREHOLDERS’ EQUITY   
    Deposits:   
    Non-interest-bearing$780,528  $732,694 
    Interest-bearing:   
    Certificates of deposit exceeding the FDIC insurance limits77,647  107,764 
    Other interest-bearing deposits3,130,576  2,915,487 
     3,988,751  3,755,945 
    Short-term borrowings98,525  116,061 
    FHLB advances5,888  5,859 
    Other liabilities71,981  82,687 
    TOTAL LIABILITIES4,165,145  3,960,552 
        
    Shareholders’ equity   
    Common stock, $.125 stated value per share;   
    Authorized shares-40,000,000   
    Issued shares-16,096,313 in 2021 and 16,075,154 in 2020   
    Outstanding shares-13,048,229 in 2021 and 13,558,511 in 20202,008  2,007 
    Additional paid-in capital141,240  140,820 
    Retained earnings543,595  521,103 
    Accumulated other comprehensive income/(loss)1,412  9,764 
    Less: Treasury shares at cost-3,048,084 in 2021 and 2,516,643 in 2020(100,092) (76,702)
    TOTAL SHAREHOLDERS’ EQUITY588,163  596,992 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,753,308  $4,557,544 


    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
    (Dollar amounts in thousands, except per share data)

     Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
     2021 2020 2021 2020
     (unaudited)
    INTEREST INCOME:       
    Loans, including related fees$31,966  $33,224  $63,823  $68,258 
    Securities:       
    Taxable3,355  3,624  6,434  7,653 
    Tax-exempt2,163  2,008  4,237  3,946 
    Other387  400  733  802 
    TOTAL INTEREST INCOME37,871  39,256  75,227  80,659 
    INTEREST EXPENSE:       
    Deposits2,090  3,019  4,376  7,549 
    Short-term borrowings94  101  192  368 
    Other borrowings59  241  118  497 
    TOTAL INTEREST EXPENSE2,243  3,361  4,686  8,414 
    NET INTEREST INCOME35,628  35,895  70,541  72,245 
    Provision for credit losses(2,196) 2,965  (1,744) 5,655 
    NET INTEREST INCOME AFTER PROVISION       
    FOR LOAN LOSSES37,824  32,930  72,285  66,590 
    NON-INTEREST INCOME:       
    Trust and financial services1,313  1,288  2,618  2,822 
    Service charges and fees on deposit accounts2,327  2,102  4,570  5,100 
    Other service charges and fees5,039  3,869  9,281  7,199 
    Securities gains (losses), net258  31  106  225 
    Gain on sales of mortgage loans1,450  1,205  2,843  1,903 
    Other544  281  807  622 
    TOTAL NON-INTEREST INCOME10,931  8,776  20,225  17,871 
    NON-INTEREST EXPENSE:       
    Salaries and employee benefits16,031  14,323  31,708  30,295 
    Occupancy expense2,002  2,162  4,151  4,091 
    Equipment expense2,440  2,673  5,018  5,134 
    FDIC Expense287  49  585  (181)
    Other7,236  7,676  14,173  15,098 
    TOTAL NON-INTEREST EXPENSE27,996  26,883  55,635  54,437 
    INCOME BEFORE INCOME TAXES20,759  14,823  36,875  30,024 
    Provision for income taxes4,145  2,899  7,384  5,919 
    NET INCOME16,614  11,924  29,491  24,105 
    OTHER COMPREHENSIVE INCOME       
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes1,772  3,130  (9,296) 16,228 
    Change in funded status of post retirement benefits, net of taxes472  384  944  788 
    COMPREHENSIVE INCOME$18,858  $15,438  $21,139  $41,121 
    PER SHARE DATA       
    Basic and Diluted Earnings per Share$1.24  $0.87  $2.19  $1.76 
    Weighted average number of shares outstanding (in thousands)13,414  13,715  13,473  13,727 


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