• First Financial Corporation Reports First Quarter Results

    Source: Nasdaq GlobeNewswire / 27 Apr 2021 10:00:00   America/New_York

    TERRE HAUTE, Ind., April 27, 2021 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the three months ending March 31, 2021:

    For the quarter:

    • Net income was $12.9 million compared to $12.2 million for the same period of 2020;
    • Diluted net income per common share of $0.95 compared to $0.89 for the same period of 2020; and
    • Return on average assets was 1.12% compared to 1.21% for the three months ended March 31, 2020.

    “Despite the continued headwinds of the global pandemic and the varied restrictions of the four states in which we do business, we were able to deliver solid performance in the first quarter,” said Norman L. Lowery, Chairman and Chief Executive Officer. “During the first quarter we reopened our branch office lobbies and we were able to assist many of our clients to participate in the second round of the Paycheck Protection Program.”

    Average Total Loans
    Average total loans for the first quarter of 2021 were $2.64 billion versus $2.64 billion for the comparable period in 2020.

    Total Loans Outstanding
    Total loans outstanding increased $24.3 million, from $2.62 billion as of March 31, 2020 to $2.65 billion as of March 31, 2021.

    Average Total Deposits
    Average total deposits for the quarter ended March 31, 2021, were $3.82 billion versus $3.27 billion as of March 31, 2020, an increase of $546 million or 16.70%.

    Total Deposits
    Total deposits were $3.91 billion as of March 31, 2021, compared to $3.29 billion as of March 31, 2020, an increase of $614 million or 18.66%. On a linked quarter basis, total deposits increased $149.4 million from $3.76 billion for the quarter ending December 31, 2020.

    Book Value Per Share
    Book Value per share was $44.20 at March 31, 2021, compared to $42.42 at March 31, 2020, a 4.21% increase.

    Shareholder Equity
    Shareholder equity at March 31, 2021, was $598.1 million compared to $581.8 million on March 31, 2020. During the quarter the Corporation repurchased 26,300 shares of its common stock.

    Tangible Common Equity to Tangible Asset Ratio
    The Corporation’s tangible common equity to tangible asset ratio was 11.12% at March 31, 2021, compared to 12.41% at March 31, 2020.

    Net Interest Income
    Net interest income for the first quarter of 2021 was $34.9 million, compared to $36.4 million reported for the same period of 2020. The decrease was primarily driven by the 150 basis point interest rate reduction by the Federal Reserve in response to the COVID-19 pandemic.

    Net Interest Margin
    The net interest margin for the quarter ended March 31, 2021, was 3.27% compared to the 4.13% reported at March 31, 2020.

    Nonperforming Loans
    Nonperforming loans as of March 31, 2021, were $21.0 million versus $17.6 million as of March 31, 2020. The ratio of nonperforming loans to total loans and leases was 0.79% as of March 31, 2021, versus 0.67% as of March 31, 2020.

    Credit Loss Provision
    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. The provision for credit losses for the three months ended March 31 2021, was $452 thousand compared to the $2.69 million provision for the first quarter of 2020.

    Net Charge-Offs
    Net charge-offs were $728 thousand for the first quarter of 2021 compared to $1.57 million 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 March 31, 2021, was $46.8 million compared to $21.1 million as of March 31, 2020. The increase is primarily related to the adoption of CECL. The allowance for credit losses as a percent of total loans was 1.77% as of March 31, 2021, compared to 0.80% as of March 31, 2020. The allowance as of March 31, 2021 was calculated using CECL. The allowance as of March 31, 2020 was calculated using the incurred loss method.

    Non-Interest Income
    Non-interest income for the three months ended March 31, 2021 and 2020 was $9.3 and $9.1 million, respectively.

    Non-Interest Expense
    Non-interest expense for the three months ended March 31, 2021, was $27.6 million compared to $27.6 million in 2020.

    Efficiency Ratio
    The Corporation’s efficiency ratio was 61.08% for the quarter ending March 31, 2021, versus 59.25% for the same period in 2020.

    Income Taxes
    Income tax expense for the three months ended March 31, 2021, was $3.2 million versus $3.0 million for the same period in 2020. The effective tax rate for the first quarter of 2021 was 20.10% compared to 19.87% for same period of 2020.

    “First Financial continues to meet the financial needs of our customers,” Lowery stated. “I am very proud of our associates' and of their unwavering commitment to serve our customers in these challenging times.”

    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 Ended 
      March 31,
    		 December 31,
    		 March 31,
    		 
      2021
    		 2020
    		 2020
    		 
    END OF PERIOD BALANCES          
    Assets $4,681,216 $4,557,544 $4,062,414 
    Deposits $3,905,348 $3,755,945 $3,291,231 
    Loans, including net deferred loan costs $2,646,937 $2,610,294 $2,622,637 
    Allowance for Credit Losses $46,776 $47,052 $21,063 
    Total Equity $598,112 $596,992 $581,771 
    Tangible Common Equity (a) $510,981 $509,428 $492,943 
         
    AVERAGE BALANCES    
    Total Assets $4,600,750 $4,532,078 $4,022,789 
    Earning Assets $4,404,109 $3,736,217 $3,625,679 
    Investments $1,133,439 $1,058,925 $988,523 
    Loans $2,640,291 $2,676,041 $2,637,036 
    Total Deposits $3,816,705 $3,741,155 $3,270,627 
    Interest-Bearing Deposits $3,059,290 $3,005,337 $2,739,394 
    Interest-Bearing Liabilities $110,448 $98,922 $106,843 
    Total Equity $600,669 $610,879 $569,696 
         
    INCOME STATEMENT DATA    
    Net Interest Income $34,913 $37,570 $36,350 
    Net Interest Income Fully Tax Equivalent (b) $35,959 $38,606 $37,409 
    Provision for Credit Losses $452 $448 $2,690 
    Non-interest Income $9,294 $12,866 $9,095 
    Non-interest Expense $27,639 $31,191 $27,554 
    Net Income $12,877 $15,739 $12,181 
         
    PER SHARE DATA    
    Basic and Diluted Net Income Per Common Share $0.95 $1.15 $0.89 
    Cash Dividends Declared Per Common Share $— $0.53 $— 
    Book Value Per Common Share $44.20 $44.03 $42.42 
    Tangible Book Value Per Common Share (c) $37.76 $37.64 $35.94 
    Basic Weighted Average Common Shares Outstanding 13,533 13,695  13,740 

    (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,
      202120202020
    Return on average assets 1.12%1.39%1.21%
    Return on average common shareholder's equity 8.58%10.31%8.55%
    Efficiency ratio 61.08%60.60%59.25%
    Average equity to average assets 13.06%13.48%14.16%
    Net interest margin (a) 3.27%4.11%4.13%
    Net charge-offs to average loans and leases 0.11%0.05%0.24%
    Credit loss reserve to loans and leases 1.77%1.80%0.80%
    Credit loss reserve to nonperforming loans 222.64%214.88%119.70%
    Nonperforming loans to loans and leases 0.79%0.84%0.67%
    Tier 1 leverage 11.34%11.24%12.38%
    Risk-based capital - Tier 1 16.17%16.11%16.19%

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

       
    Asset Quality Three Months Ended
      March 31,December 31,March 31,
      202120202020
    Accruing loans and leases past due 30-89 days $8,373 $17,309 $27,037 
    Accruing loans and leases past due 90 days or more $2,001 $2,324 $1,430 
    Nonaccrual loans and leases $14,545 $15,367 $12,011 
    Total troubled debt restructuring $4,464 $4,206 $4,156 
    Other real estate owned $942 $1,012 $3,894 
    Nonperforming loans and other real estate owned $21,952 $22,909 $21,491 
    Total nonperforming assets $25,280 $26,045 $24,724 
    Gross charge-offs $2,338 $1,954 $2,904 
    Recoveries $1,610 $1,538 $1,334 
    Net charge-offs/(recoveries) $728 $416 $1,570 


     
    CONSOLIDATED BALANCE SHEETS
    (Dollar amounts in thousands, except per share data)
     
     March 31,
    2021    		 December 31,
    2020
      
     (unaudited)
      
    ASSETS   
    Cash and due from banks$666,846  $657,470 
    Federal funds sold585  301 
    Securities available-for-sale1,097,093  1,020,744 
    Loans:   
    Commercial1,571,142  1,521,711 
    Residential592,053  604,652 
    Consumer477,633  479,750 
     2,640,828  2,606,113 
    (Less) plus:   
    Net deferred loan costs6,109  4,181 
    Allowance for credit losses(46,776) (47,052)
     2,600,161  2,563,242 
    Restricted stock14,825  14,812 
    Accrued interest receivable15,465  16,957 
    Premises and equipment, net62,584  62,063 
    Bank-owned life insurance96,184  95,849 
    Goodwill78,592  78,592 
    Other intangible assets8,539  8,972 
    Other real estate owned942  1,012 
    Other assets39,400  37,530 
    TOTAL ASSETS$4,681,216  $4,557,544 
        
    LIABILITIES AND SHAREHOLDERS’ EQUITY   
    Deposits:   
    Non-interest-bearing$805,645  $732,694 
    Interest-bearing:   
    Certificates of deposit exceeding the FDIC insurance limits118,162  107,764 
    Other interest-bearing deposits2,981,541  2,915,487 
     3,905,348  3,755,945 
    Short-term borrowings98,775  116,061 
    FHLB advances5,874  5,859 
    Other liabilities73,107  82,687 
    TOTAL LIABILITIES4,083,104  3,960,552 
        
    Shareholders’ equity   
    Common stock, $.125 stated value per share;   
    Authorized shares-40,000,000   
    Issued shares-16,075,154 in 2021 and 16,075,154 in 2020   
    Outstanding shares-13,530,570 in 2021 and 13,558,511 in 20202,008  2,007 
    Additional paid-in capital141,024  140,820 
    Retained earnings533,980  521,103 
    Accumulated other comprehensive income/(loss)(832) 9,764 
    Less: Treasury shares at cost-2,551,084 in 2021 and 2,516,643 in 2020(78,068) (76,702)
    TOTAL SHAREHOLDERS’ EQUITY598,112  596,992 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,681,216  $4,557,544 


      
    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
    (Dollar amounts in thousands, except per share data)
      
     Three Months Ended March 31,
     2021 2020
      
     (unaudited)
      
      
    INTEREST INCOME:   
    Loans, including related fees$31,857  $35,034 
    Securities:   
    Taxable3,079  4,029 
    Tax-exempt2,074  1,938 
    Other346  402 
    TOTAL INTEREST INCOME37,356  41,403 
    INTEREST EXPENSE:   
    Deposits2,286  4,530 
    Short-term borrowings98  267 
    Other borrowings59  256 
    TOTAL INTEREST EXPENSE2,443  5,053 
    NET INTEREST INCOME34,913  36,350 
    Provision for credit losses452  2,690 
    NET INTEREST INCOME AFTER PROVISION   
    FOR LOAN LOSSES34,461  33,660 
    NON-INTEREST INCOME:   
    Trust and financial services1,305  1,534 
    Service charges and fees on deposit accounts2,243  2,998 
    Other service charges and fees4,242  3,330 
    Securities gains (losses), net(152) 194 
    Gain on sales of mortgage loans1,393  698 
    Other263  341 
    TOTAL NON-INTEREST INCOME9,294  9,095 
    NON-INTEREST EXPENSE:   
    Salaries and employee benefits15,677  15,972 
    Occupancy expense2,149  1,929 
    Equipment expense2,578  2,461 
    FDIC Expense298  (230)
    Other6,937  7,422 
    TOTAL NON-INTEREST EXPENSE27,639  27,554 
    INCOME BEFORE INCOME TAXES16,116  15,201 
    Provision for income taxes3,239  3,020 
    NET INCOME12,877  12,181 
    OTHER COMPREHENSIVE INCOME   
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes(11,068) 13,098 
    Change in funded status of post retirement benefits, net of taxes472  404 
    COMPREHENSIVE INCOME$2,281  $25,683 
    PER SHARE DATA   
    Basic and Diluted Earnings per Share$0.95  $0.89 
    Weighted average number of shares outstanding (in thousands)13,533  13,740 

     


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