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First Financial Corporation reports First Quarter results

Company Release - 4/29/2020 1:30 PM ET

TERRE HAUTE, Ind., April 29, 2020 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2020. For the three months ending March 31, 2020:

  • Net income was $12.2 million compared to $9.68 million for the same period of 2019;
     
  • Diluted net income per common share was $0.89 compared to $0.79 for the same period of 2019; and
     
  • Return on average assets was 1.21% compared to 1.29% for the three months ended March 31, 2019.

“We came off of a record year in 2019 and we were able to sustain our momentum through the first quarter.” said Norman L. Lowery, Chairman and Chief Executive Officer. “We are now faced with challenges unlike those we have ever seen before. In response to the spread of COVID-19, we implemented our pandemic response plan. In doing so, we have, among other things, shifted to drive-up and appointment only banking, restricted travel, facilitated remote working arrangements when possible, practiced social distancing and encouraged all of our associates to follow the Center for Disease Control guidelines. Protecting the health and safety of our associates, customers, their families and the communities we serve is our priority.”

Average Total Loans
Average total loans for the first quarter of 2020 were $2.64 billion versus $1.97 billion for the comparable period in 2019, an increase of $664.7 million or 33.70%.

Total Loans Outstanding
Total loans outstanding increased $638.6 million, or 32.19%, from $1.98 billion as of March 31, 2019 to $2.62 billion as of March 31, 2020.

“Each of the four states in which we do business have restricted the activities of non-essential businesses. These necessary restrictions have led to wide-spread furloughs, layoffs and reduced spending across our footprint.” stated Lowery. “In response, First Financial has sought to meet the needs of our customers by working tirelessly to implement the Small Business Administration’s Paycheck Protection Program enacted by the Coronavirus Aid, Relief and Economic Security (CARES) Act and by assisting our customers with reasonable loan accommodations. To date, we have approved and processed loan modifications totaling $246 million across all portfolios. Commercial loan requests have totaled $233 million with an additional $13 million to assist consumers.

Average Total Deposits
Average total deposits for the quarter ended March 31, 2020, were $3.27 billion versus $2.43 billion as of March 31, 2019.

Total Deposits
Total deposits were $3.29 billion as of March 31, 2020, compared to $2.42 billion as of March 31, 2019, an increase of $871.7 million or 36.03%.

Book Value Per Share
Book Value per share was $42.42 at March 31, 2020, compared to $37.66 at March 31, 2019.

Shareholder Equity
Shareholder equity at March 31, 2020, was $581.8 million compared to $462.8 million on March 31, 2019.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 12.41% at March 31, 2020, compared to 14.29% at March 31, 2019.

Net Interest Income
Net interest income for the first quarter of 2020 was $36.4 million, an increase of 23.53% over the $29.4 million reported for the same period of 2019.

Net Interest Margin
The tax-equivalent net interest margin for the quarter ended March 31, 2020, was 4.13% compared to the 4.31% reported at March 31, 2019.

Nonperforming Loans
Nonperforming loans as of March 31, 2020, were $17.6 million versus $16.1 million as of March 31, 2019. The ratio of nonperforming loans to total loans and leases was 0.67% as of March 31, 2020, versus 0.81% as of March 31, 2019.

Loan Loss Provision
The provision for loan losses for the three months ended March 31, 2020, was $2.69 million compared to the $1.47 million provision for the first quarter of 2019. The Corporation established a $1.0 million allowance for loan and lease losses in the first quarter of 2020 directly related to the initial estimate of losses resulting from the COVID-19 pandemic.

Net Charge-Offs
Net charge-offs were $1.57 million for the first quarter of 2020 compared to $946 thousand in the same period of 2019.

Allowance for Loan Losses
The Corporation’s allowance for loan losses as of March 31, 2020, was $21.1 million compared to $21.0 million as of March 31, 2019. The allowance for loan losses as a percent of total loans was 0.80% as of March 31, 2020, compared to 1.06% as of March 31, 2019.

Current Expected Credit Losses
As provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act the Corporation has elected to defer the implementation of the Current Expected Credit Loss accounting standard.

Non-Interest Income
Non-interest income for the three months ended March 31, 2020 and 2019 was $9.1 million and $7.6 million, respectively.

Non-Interest Expense
Non-interest expense for the three months ended March 31, 2020, was $27.6 million compared to $23.7 million in 2019.

Efficiency Ratio
The Corporation’s efficiency ratio was 59.25% for the quarter ending March 31, 2020, versus 62.29% for the same period in 2019.

Income Taxes
Income tax expense for the three months ended March 31, 2020, was $3.02 million versus $2.22 million for the same period in 2019. The effective tax rate for 2020 was 19.87% compared to 18.63% for 2019.

“For the last 186 years, First Financial has strived to meet the financial needs of our customers,” Lowery stated. “I am particularly proud of our associates’ resilience and steadfast commitment during these unprecedented times. No matter what the circumstance, the First team always rises to the challenge”.
           
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 81 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 Ended
   
  March 31, December 31, March 31,
  2020 2019 2019
END OF PERIOD BALANCES          
  Assets $4,062,414 $4,023,250 $3,025,565 
  Deposits $3,291,231 $3,275,357 $2,419,556 
  Loans, including net deferred loan costs $2,622,637 $2,656,390 $1,984,053 
  Allowance for Loan Losses $21,063 $19,943 $20,960 
  Total Equity $581,771 $557,608 $462,796 
  Tangible Common Equity (a) $492,943 $468,373 $427,358 
     
AVERAGE BALANCES    
  Total Assets $4,022,789 $4,041,287 $3,004,056 
  Earning Assets $3,625,679 $3,662,390 $2,824,524 
  Investments $988,523 $1,000,488 $850,749 
  Loans $2,637,036 $2,658,582 $1,972,333 
  Total Deposits $3,270,627 $3,279,859 $2,428,164 
  Interest-Bearing Deposits $2,739,394 $3,072,566 $1,999,272 
  Interest-Bearing Liabilities $106,843 $118,605 $71,923 
  Total Equity $569,696 $575,908 $450,666 
     
INCOME STATEMENT DATA    
  Net Interest Income $36,350 $38,475 $29,426 
  Net Interest Income Fully Tax Equivalent (b) $37,409 $39,594 $30,401 
  Provision for Loan Losses $2,690 $1,500 $1,470 
  Non-interest Income $9,095 $11,327 $7,636 
  Non-interest Expense $27,554 $29,754 $23,693 
  Net Income $12,181 $14,364 $9,682 
     
PER SHARE DATA    
  Basic and Diluted Net Income Per Common Share $0.89 $1.05 $0.79 
  Cash Dividends Declared Per Common Share $ $0.52 $ 
  Book Value Per Common Share $42.42 $40.58 $37.66 
  Tangible Book Value Per Common Share (c) $35.94 $35.46 $34.77 
  Basic Weighted Average Common Shares Outstanding 13,740 13,726 12,282 

(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 Ratios Three Months Ended
   
  March 31,December 31,March 31,
  202020192019
Return on average assets 1.21%1.42%1.29%
Return on average common shareholder's equity 8.55%9.98%8.59%
Efficiency ratio 59.25%58.43%62.29%
Average equity to average assets 14.16%14.25%15.00%
Net interest margin (a) 4.13%4.37%4.31%
Net charge-offs to average loans and leases 0.24%0.20%0.19%
Loan and lease loss reserve to loans and leases 0.80%0.75%1.06%
Loan and lease loss reserve to nonperforming loans 119.70%130.01%130.28%
Nonperforming loans to loans and leases 0.67%0.58%0.81%
Tier 1 leverage 12.38%12.04%14.83%
Risk-based capital - Tier 1 16.19%15.51%18.65%
(a) Net interest margin is calculated on a tax equivalent basis.
 

 

Asset Quality Three Months Ended
   
  March 31, December 31, March 31,
  2020 2019 2019
Accruing loans and leases past due 30-89 days $27,037 $24,040 $11,402
Accruing loans and leases past due 90 days or more $1,430 $1,610 $507
Nonaccrual loans and leases $12,011 $9,535 $10,808
Total troubled debt restructuring $4,156 $4,194 $4,774
Other real estate owned $3,894 $3,625 $857
Nonperforming loans and other real estate owned $21,491 $18,964 $16,946
Total nonperforming assets $24,724 $22,583 $20,240
Gross charge-offs $2,904 $3,456 $2,109
Recoveries $1,334 $2,100 $1,163
Net charge-offs/(recoveries) $1,570 $1,356 $946
          


CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
 March 31,
 2020
  December 31,
 2019
                
 (unaudited)
                
     
ASSETS       
Cash and due from banks$211,034  $127,426 
Federal funds sold1  7,500 
Securities available-for-sale932,041  926,717 
Loans:   
Commercial1,567,340  1,584,447 
Residential663,060  682,077 
Consumer387,980  386,006 
 2,618,380  2,652,530 
(Less) plus:   
Net deferred loan costs4,257  3,860 
Allowance for loan losses(21,063) (19,943)
 2,601,574  2,636,447 
Restricted stock15,400  15,394 
Accrued interest receivable17,098  18,523 
Premises and equipment, net63,140  62,576 
Bank-owned life insurance94,633  94,251 
Goodwill78,592  78,592 
Other intangible assets10,236  10,643 
Other real estate owned3,894  3,625 
Other assets34,771  41,556 
TOTAL ASSETS$4,062,414  $4,023,250 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Deposits:   
Non-interest-bearing$531,758  $547,189 
Interest-bearing:   
Certificates of deposit exceeding the FDIC insurance limits118,162  126,738 
Other interest-bearing deposits2,641,311  2,601,430 
 3,291,231  3,275,357 
Short-term borrowings83,784  80,119 
Other liabilities78,134  79,193 
TOTAL LIABILITIES3,480,643  3,465,642 
    
Shareholders’ equity   
Common stock, $.125 stated value per share;   
Authorized shares-40,000,000   
Issued shares-16,075,154 in 2020 and 16,055,466 in 2019   
Outstanding shares-13,714,524 in 2020 and 13,741,825 in 20192,005  2,005 
Additional paid-in capital139,898  139,694 
Retained earnings504,236  492,055 
Accumulated other comprehensive income/(loss)6,001  (7,501)
Less: Treasury shares at cost-2,360,630 in 2020 and 2,313,641 in 2019(70,369) (68,645)
TOTAL SHAREHOLDERS’ EQUITY581,771  557,608 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,062,414  $4,023,250 
        
 


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
 Three Months Ended March 31,
 2020 2019
        
 (unaudited)
INTEREST INCOME: 
Loans, including related fees$35,034  $26,754 
Securities:   
Taxable4,029  3,681 
Tax-exempt1,938  1,867 
Other402  314 
TOTAL INTEREST INCOME41,403  32,616 
INTEREST EXPENSE:   
Deposits4,530  2,817 
Short-term borrowings267  323 
Other borrowings256  50 
TOTAL INTEREST EXPENSE5,053  3,190 
NET INTEREST INCOME36,350  29,426 
Provision for loan losses2,690  1,470 
NET INTEREST INCOME AFTER PROVISION   
FOR LOAN LOSSES33,660  27,956 
NON-INTEREST INCOME:   
Trust and financial services1,534  1,204 
Service charges and fees on deposit accounts2,998  2,624 
Other service charges and fees3,330  3,114 
Securities gains (losses), net194  (4)
Gain on sales of mortgage loans698  420 
Other341  278 
TOTAL NON-INTEREST INCOME9,095  7,636 
NON-INTEREST EXPENSE:   
Salaries and employee benefits15,972  12,755 
Occupancy expense1,929  1,815 
Equipment expense2,461  1,817 
FDIC Expense(230) 140 
Other7,422  7,166 
TOTAL NON-INTEREST EXPENSE27,554  23,693 
INCOME BEFORE INCOME TAXES15,201  11,899 
Provision for income taxes3,020  2,217 
NET INCOME12,181  9,682 
OTHER COMPREHENSIVE INCOME   
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes13,098  10,224 
Change in funded status of post retirement benefits, net of taxes404  303 
COMPREHENSIVE INCOME$25,683  $20,209 
PER SHARE DATA   
Basic and Diluted Earnings per Share$0.89  $0.79 
Weighted average number of shares outstanding (in thousands)13,740  12,282 

 

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Source: First Financial Corporation Indiana
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