First Financial Corporation Reports 1st Quarter Results

First Financial Corporation Reports 1st Quarter Results

TERRE HAUTE, IN --(Marketwired - April 27, 2016) - First Financial Corporation (NASDAQ: THFF) today announced results for the first quarter of 2016. Net income for the three months ending March 31, 2016 increased 76.2% to $13.68 million compared to $7.76 million for the same period of 2015. The increase included an after-tax gain on the sale of the Corporation's insurance subsidiary of $5.84 million. Diluted net income per common share increased 80.0% to $1.08 from $0.60 for the comparable period of 2015.

Return on assets for the three months ended March 31, 2016 was 1.85% compared to 1.04% for the three months ended March 31, 2015.

Total loans outstanding increased $7.1 million, or .40%, from $1.76 billion as of March 31, 2015 to $1.76 billion as of March 31, 2016. On a linked quarter basis, average total loans increased $8.6 million, or .49%, from $1.75 billion for the quarter ending December 31, 2015.

Total deposits decreased $63.4 million or 2.57% from $2.46 billion as of March 31, 2015 to $2.40 billion as of March 31, 2016.

The company's tangible common equity to tangible asset ratio was 12.92% at March 31, 2016, compared to 12.39% at March 31, 2015.

Net interest income for the first quarter of 2016 was $26.2 million, an increase of .62% over the $26.0 million reported for the same period of 2015. The net interest margin for the quarter ended March 31, 2016 increased to 4.06% from the 4.01% reported at March 31, 2015.

Asset quality remains strong with nonperforming loans decreasing 22.67% to $23.6 million as of March 31, 2016 versus $30.5 million as of March 31, 2015. The ratio of nonperforming loans to total loans and leases also decreased to 1.50% as of March 31, 2016 versus 1.97% as of March 31, 2015.

The provision for loan losses for the three months ended March 31, 2016 was $835 thousand compared to the $1.45 million provision for the first quarter of 2015. Net charge-offs were $855 thousand for the first quarter of 2016 compared to $938 thousand in the same period of 2015. The Corporation's allowance for loan losses as of March 31, 2016 was $19.9 million compared to $19.4 million as of March 31, 2015. The allowance for loan losses as a percent of total loans was 1.13% as of March 31, 2016 compared to 1.10% as of March 31, 2015.

Non-interest income for the three months ended March 31, 2016 and 2015 was $21.5 and $10.1 million, respectively, a 113.54% increase. The gain on the sale of the Corporation's insurance subsidiary increased non-interest income $13.0 million. Other income without this gain is down primarily due to the recognition of unrealized loss on other real estate written down to updated appraised values.

Service charges on deposits increased $178 thousand over the same period in 2015 and other service charges and fees increased $162 thousand.

Non-interest expense for the three months ended March 31, 2016 decreased $1.53 million to $22.5 million compared to $24.0 million in 2015. On a linked quarter basis, non-interest expense decreased $2.48 million from $24.9 million for the quarter ended December 31, 2015. On a year-over-year basis, salaries and employee benefits decreased $1.46 million driven by lower health insurance and pension expense. The Corporation's efficiency ratio was 45.68% for the quarter ending March 31, 2016 versus 63.78% for the same period in 2015.

Book value per share was $33.58 at March 31, 2016, a 6.33% increase from the $31.58 at March 31, 2015. Average shareholders' equity increased 3.38% to $415.0 million from $401.4 million on March 31, 2015.

Norman L. Lowery, President and Chief Executive Officer, commented, "We are pleased with our first quarter of 2016 results. We saw improvement in our interest income, interest expense, lower credit costs, most areas of non-interest income, and reduced non-interest expense. It was a solid 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,
  2016   2015   2015
END OF PERIOD BALANCES                
  Assets $ 2,939,240   $ 2,979,585   $ 2,995.836
  Deposits   2,400,655     2,442,369     2,463.949
  Loans   1,763,659     1,763,808     1,756,604
  Allowance for Loan Losses   19,926     19,946     19,351
  Total Equity   411,912     410,316     409,027
  Tangible Common Equity   375,000     367,649     365,853
                 
AVERAGE BALANCES                
  Total Assets   2,959,007     2,974,567     2,988,154
  Earning Assets   2,724,926     2,735,328     2,748,730
  Investments   955,996     950,245     969,315
  Loans   1,757,811     1,749,261     1,760,524
  Total Deposits   2,418,668     2,443,478     2,461,400
  Interest-Bearing Deposits   1,873,070     1,889,350     1,917,509
  Interest-Bearing Borrowings   46,026     41,269     44,789
  Total Equity   414,974     408,730     401,423
                 
INCOME STATEMENT DATA                
  Net Interest Income   26,157     26,012     25,995
  Net Interest Income Fully Tax Equivalent   27,692     27,561     27,559
  Provision for Loan Losses   835     1,050     1,450
  Non-interest Income   21,484     9,389     10,061
  Non-interest Expense   22,465     24,943     23,993
  Net Income   13,675     7,114     7,761
                 
PER SHARE DATA                
  Basic and Diluted Net Income Per Common Share   1.08     0.56     0.60
  Cash Dividends Declared Per Common Share   -     0.49     -
  Book Value Per Common Share   33.58     32.21     31.58
  Tangible Book Value Per Common Share   30.57     28.86     28.27
  Basic Weighted Average Common Shares Outstanding   12,646     12,722     12,948
                 
     
Key Ratios   Three Months Ended
    March 31,   December 31,   March 31,
    2016   2015   2015
Return on average assets   1.85%   0.96%   1.04%
Return on average common shareholder's equity   13.28%   6.96%   7.73%
Efficiency ratio   45.68%   67.51%   63.78%
Average equity to average assets   13.92%   13.74%   13.43%
Net interest margin   4.06%   4.04%   4.01%
Net charge-offs to average loans and leases   0.19%   0.20%   0.21%
Loan and lease loss reserve to loans and leases   1.13%   1.13%   1.10%
Loan and lease loss reserve to nonperforming loans   84.38%   78.35%   63.37%
Nonperforming loans to loans   1.50%   1.46%   1.97%
Tier 1 leverage   13.05%   12.92%   12.74%
Risk-based capital - Tier 1   17.81%   17.69%   17.64%
             
     
Asset Quality   Three Months Ended
    March 31,   December 31,   March 31,
    2016   2015   2015
Accruing loans and leases past due 30-89 days   $ 7,292   $ 12,294   $ 7,159
Accruing loans and leases past due 90 days or more   $ 858   $ 964   $ 640
Nonaccrual loans and leases   $ 13,248   $ 14,634   $ 14,868
Nonperforming loans   $ 23,615   $ 25,458   $ 30,536
Other real estate owned   $ 2,850   $ 3,466   $ 3,830
Total nonperforming assets   $ 39,617   $ 43,799   $ 49,353
Total troubled debt restructurings   $ 9,509   $ 9,860   $ 15,027
Gross charge-offs   $ 1,640   $ 1,931   $ 1,823
Recoveries   $ 785   $ 902   $ 885
Net charge-offs/(recoveries)   $ 855   $ 1,029   $ 938
 
 
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
         
    March 31,
 2016		   December 31,
 2015
    (unaudited)
ASSETS            
Cash and due from banks   $ 66,125     $ 88,695  
Federal funds sold     6,444       9,815  
Securities available-for-sale     884,176       891,082  
Loans:            
Commercial     1,047,599       1,043,980  
Residential     436,873       444,447  
Consumer     276,471       272,896  
      1,760,943       1,761,323  
(Less) plus:            
Net deferred loan costs     2,716       2,485  
Allowance for loan losses     (19,926 )     (19,946 )
      1,743,733       1,743,862  
Restricted stock     10,838       10,838  
Accrued interest receivable     11,907       11,733  
Premises and equipment, net     50,394       50,531  
Bank-owned life insurance     82,673       82,323  
Goodwill     34,355       39,489  
Other intangible assets     2,557       3,178  
Other real estate owned     2,850       3,466  
Other assets     43,188       44,573  
TOTAL ASSETS   $ 2,939,240     $ 2,979,585  
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Deposits:            
Non-interest-bearing   $ 512,961     $ 563,302  
Interest-bearing:            
Certificates of deposit exceeding the FDIC insurance limits     46,817       46,753  
Other interest-bearing deposits     1,840,877       1,832,314  
      2,400,655       2,442,369  
Short-term borrowings     31,116       33,831  
FHLB advances     12,252       12,677  
Other liabilities     83,305       80,392  
TOTAL LIABILITIES     2,527,328       2,569,269  
             
Shareholders' equity            
Common stock, $.125 stated value per share;            
Authorized shares-40,000,000            
Issued shares-14,578,758 in 2016 and 14,557,815 in 2015            
Outstanding shares-12,265,355 in 2016 and 12,740,018 in 2015     1,818       1,817  
Additional paid-in capital     73,566       73,396  
Retained earnings     409,308       395,633  
Accumulated other comprehensive loss     (5,059 )     (9,401 )
Less: Treasury shares at cost-2,313,403 in 2016 and 1,817,797 in 2015     (67,721 )     (51,129 )
TOTAL SHAREHOLDERS' EQUITY     411,912       410,316  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 2,939,240     $ 2,979,585  
                 
 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
     
    Three Months Ended
 March 31,
    2016   2015
    (unaudited)   (unaudited)
INTEREST INCOME:            
Loans, including related fees   $ 21,184   $ 20,807
Securities:            
Taxable     3,831     4,061
Tax-exempt     1,822     1,779
Other     364     431
TOTAL INTEREST INCOME     27,201     27,078
INTEREST EXPENSE:            
Deposits     987     1,020
Short-term borrowings     23     13
Other borrowings     34     50
TOTAL INTEREST EXPENSE     1,044     1,083
NET INTEREST INCOME     26,157     25,995
Provision for loan losses     835     1,450
NET INTEREST INCOME AFTER PROVISION            
FOR LOAN LOSSES     25,322     24,545
NON-INTEREST INCOME:            
Trust and financial services     1,334     1,492
Service charges and fees on deposit accounts     2,504     2,326
Other service charges and fees     3,000     2,838
Securities gains/(losses), net     3     4
Insurance commissions     1,390     1,553
Gain on sales of mortgage loans     404     359
Gain on sale of certain assets and liabilities of insurance brokerage operation     13,021     -
Other     (172     1,489
TOTAL NON-INTEREST INCOME     8,463     10,061
NON-INTEREST EXPENSE:            
Salaries and employee benefits     13,595     15,058
Occupancy expense     1,731     1,864
Equipment expense     1,837     1,772
FDIC Expense     451     430
Other     4,851     4,869
TOTAL NON-INTEREST EXPENSE     22,465     23,993
INCOME BEFORE INCOME TAXES     24,341     10,613
Provision for income taxes     10,666     2,852
NET INCOME     13,675     7,761
OTHER COMPREHENSIVE INCOME            
Change in unrealized gains/losses on securities, net of reclassifications and taxes     4,039     4,762
Change in funded status of post retirement benefits, net of taxes     304     2,464
COMPREHENSIVE INCOME   $ 18,018   $ 14,987
PER SHARE DATA            
Basic and Diluted Earnings per Share   $ 1.08   $ 0.60
Weighted average number of shares outstanding (in thousands)     12,646     12,948
             

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