• First Financial Corporation Reports 2022 Results

    Source: Nasdaq GlobeNewswire / 07 Feb 2023 10:00:00   America/New_York

    TERRE HAUTE, Ind., Feb. 07, 2023 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the fourth quarter of 2022.

    • Net income was $16.5 million compared to $7.4 million for the same period of 2021;
    • Diluted net income per common share of $1.37 compared to $0.58 for the same period of 2021;
    • Return on average assets was 1.34% compared to 0.58% for the three months ended December 31, 2021;
    • Credit loss provision was $2.7 million compared to $5.7 million for the fourth quarter 2021; and
    • Pre-tax, pre-provision net income was $21.7 million compared to $14.3 million for the same period in 2021.1

    The Corporation further reported results for the year ended December 31, 2022:

    • Net income was $71.1 million compared to $53.0 million for the same period of 2021;
    • Diluted net income per common share of $5.82 compared to $4.02 for the same period of 2021;
    • Return on average assets was 1.41% compared to 1.10% for the twelve months ended December 31, 2021;
    • Negative provision for credit losses was $2.0 million compared to provision for credit losses of $2.5 million for the twelve months ended December 31, 2021; and
    • Pre-tax, pre-provision net income was $84.9 million compared to $68.1 million for the same period in 2021.1

    1 Non-GAAP financial measure that Management believes is useful for investors and management to understand pre-tax profitability before giving effect to credit loss expense and to provide additional perspective on the Corporation’s performance over time as well as comparison to the Corporation’s peers and evaluating the financial results of the Corporation – please refer to the Non GAAP reconciliations contained in this release.

    “We are pleased with our fourth quarter and full year results” said Norman L. Lowery, Chairman and Chief Executive Officer. “2022 was a record year for net income. Loan growth continues to be strong which contributed to our seventh straight quarter of net interest income growth.”

    Average Total Loans

    Average total loans for the fourth quarter of 2022 were $3.02 billion versus $2.63 billion for the comparable period in 2021, an increase of $382 million or 14.5%.

    Total Loans Outstanding

    Total loans outstanding as of December 31, 2022, were $3.07 billion compared to $2.82 billion as of December 31, 2021, an increase of $252 million or 8.93%. On a linked quarter basis, total loans increased $97.0 million or 3.26% from $2.97 billion as of September 30, 2022.

    Average Total Deposits

    Average total deposits for the quarter ended December 31, 2022, were $4.38 billion versus $4.31 billion as of December 31, 2021, an increase of $71 million or 1.7%.

    Total Deposits

    Total deposits were $4.37 billion as of December 31, 2022, compared to $4.41 billion as of December 31, 2021.

    Book Value Per Share

    Book Value per share was $39.44 at December 31, 2022, compared to $46.13 at December 31, 2021. The decrease was partially driven by the repurchase of 618,263 shares of the Corporation’s common stock.

    Shareholder Equity

    Shareholder equity at December 31, 2022, was $475.3 million compared to $582.6 million on December 31, 2021. The decrease in shareholder’s equity is reflective of the downturn in the markets which affected the accumulated other comprehensive income/(loss) (“AOCI”) on investments available for sale. AOCI has decreased $138 million in comparison to December 31, 2021.

    Tangible Common Equity to Tangible Asset Ratio

    The Corporation’s tangible common equity to tangible asset ratio was 7.79% at December 31, 2022, compared to 9.62% at December 31, 2021. The decrease was partially driven by the aforementioned share repurchases.

    Net Interest Income

    Net interest income for the fourth quarter of 2022 was $43.7 million, compared to $36.8 million reported for the same period of 2021, an increase of $6.8 million or 18.53%.

    Net Interest Margin

    The net interest margin for the quarter ended December 31, 2022, was 3.81% compared to the 3.08% reported at December 31, 2021. On a linked quarter basis, the net interest margin increased 10 basis points from 3.71% as of September 30, 2022.

    Nonperforming Loans

    Nonperforming loans as of December 31, 2022, were $13.4 million versus $14.9 million as of December 31, 2021. The ratio of nonperforming loans to total loans and leases was 0.44% as of December 31, 2022, versus 0.53% as of December 31, 2021.

    Credit Loss Provision

    The provision for credit losses for the three months ended December 31, 2022 was $2.73 million, compared to $5.71 million for the fourth quarter 2021.

    Net Charge-Offs

    In the fourth quarter of 2022 net charge-offs were $2.4 million compared to $1.8 million in the same period of 2021.

    Allowance for Credit Losses

    The Corporation’s allowance for credit losses as of December 31, 2022, was $39.8 million compared to $48.3 million as of December 31, 2021. The allowance for credit losses as a percent of total loans was 1.30% as of December 31, 2022, compared to 1.72% as of December 31, 2021.

    Non-Interest Income

    Non-interest income for the three months ended December 31, 2022 and 2021 was $10.6 million and $10.8 million, respectively.

    Non-Interest Expense

    Non-interest expense for the three months ended December 31, 2022, was $32.5 million compared to $33.3 million in 2021.

    Efficiency Ratio

    The Corporation’s efficiency ratio was 58.78% for the quarter ending December 31, 2022, versus 68.37% for the same period in 2021.

    Income Taxes

    Income tax expense for the three months ended December 31, 2022, was $2.5 million versus $1.2 million for the same period in 2021. The effective tax rate for 2022 was 19.0% compared to 19.2% for 2021.

    About First Financial Corporation

    First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A. First Financial Bank N.A., the fifth oldest national bank in the United States, operates 78 banking centers in Illinois, Indiana, Kentucky and Tennessee. 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 Year Ended
      December 31, September 30, December 31, December 31, December 31,
      2022 2022 2021 2022
    		 2021
    END OF PERIOD BALANCES               
    Assets $4,989,281 $5,009,339 $5,175,099 $4,989,281  $5,175,099
    Deposits $4,368,871 $4,407,506 $4,409,569 $4,368,871  $4,409,569
    Loans, including net deferred loan costs $3,067,438 $2,970,475 $2,815,895 $3,067,438  $2,815,895
    Allowance for Credit Losses $39,779 $39,495 $48,305 $39,779  $48,305
    Total Equity $475,284 $438,626 $582,576 $475,284  $582,576
    Tangible Common Equity(a) $381,585 $344,617 $488,417 $381,585  $488,417
                    
    AVERAGE BALANCES               
    Total Assets $4,930,611 $5,048,849 $5,086,702 $5,043,987  $4,814,350
    Earning Assets $4,690,594 $4,774,080 $4,875,039 $4,800,481  $4,611,741
    Investments $1,393,753 $1,436,179 $1,410,351 $1,432,681  $1,278,498
    Loans $3,015,903 $2,917,457 $2,633,559 $2,884,053  $2,602,344
    Total Deposits $4,383,505 $4,406,187 $4,312,115 $4,408,510  $4,037,876
    Interest-Bearing Deposits $3,509,416 $3,515,568 $3,823,428 $3,517,468  $3,320,112
    Interest-Bearing Liabilities $84,210 $95,098 $110,490 $97,134  $107,367
    Total Equity $438,767 $481,225 $589,197 $494,837  $597,369
                    
    INCOME STATEMENT DATA               
    Net Interest Income $43,658 $43,104 $36,832 $165,042  $143,401
    Net Interest Income Fully Tax Equivalent(b) $44,724 $44,402 $37,953 $169,699  $147,765
    Provision for Credit Losses $2,725 $1,050 $5,710 $(2,025) $2,466
    Non-interest Income $10,568 $12,140 $10,767 $46,716  $42,084
    Non-interest Expense $32,501 $31,504 $33,312 $126,023  $117,406
    Net Income $16,521 $18,051 $7,398 $71,109  $52,987
                    
    PER SHARE DATA               
    Basic and Diluted Net Income Per Common Share $1.37 $1.50 $0.58 $5.82  $4.02
    Cash Dividends Declared Per Common Share $0.74 $— $0.63 $1.28  $1.16
    Book Value Per Common Share $39.44 $36.49 $46.13 $39.44  $46.13
    Tangible Book Value Per Common Share(c) $28.67 $33.27 $38.66 $31.66  $38.67
    Basic Weighted Average Common Shares Outstanding  12,037  12,029  12,804  12,211   13,190

     

    (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 Year Ended 
      December 31, September 30, December 31, December 31, December 31, 
      2022 2022 2021 2022 2021 
    Return on average assets 1.34%1.43%0.58%1.41%1.10%
    Return on average common shareholder's equity 15.06%15.00%5.02%14.37%8.87%
    Efficiency ratio 58.78%55.72%68.37%58.23%61.84%
    Average equity to average assets 8.90%9.53%11.58%9.81%12.41%
    Net interest margin(a) 3.81%3.71%3.08%3.54%3.20%
    Net charge-offs to average loans and leases 0.32%0.19%0.27%0.23%0.10%
    Credit loss reserve to loans and leases 1.30%1.33%1.72%1.30%1.72%
    Credit loss reserve to nonperforming loans 289.51%276.59%321.78%296.79%324.11%
    Nonperforming loans to loans and leases 0.44%0.48%0.53%0.44%0.53%
    Tier 1 leverage 10.78%10.33%9.83%10.78%9.83%
    Risk-based capital - Tier 1 13.58%13.69%14.37%13.58%14.37%

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


                    
    Asset Quality Three Months Ended  Year Ended
         December 31,     September 30,    December 31,     December 31,     December 31, 
      2022 2022 2021 2022 2021
    Accruing loans and leases past due 30-89 days $28,875 $18,626 $17,096 $28,875 $17,096
    Accruing loans and leases past due 90 days or more $1,119 $1,185 $515 $1,119 $515
    Nonaccrual loans and leases $8,481 $9,147 $9,590 $8,481 $9,590
    Total troubled debt restructuring $3,803 $3,947 $4,799 $3,803 $4,799
    Other real estate owned $337 $214 $108 $337 $108
    Nonperforming loans and other real estate owned $13,740 $14,493 $15,012 $13,740 $15,012
    Total nonperforming assets $16,726 $17,604 $18,371 $16,726 $18,371
    Gross charge-offs $4,388 $5,653 $3,113 $15,706 $8,216
    Recoveries $1,947 $2,630 $1,312 $9,205 $5,569
    Net charge-offs/(recoveries) $2,441 $3,023 $1,801 $6,501 $2,647


           
    Non-GAAP Reconciliations Three Months Ended December 31,
         2022 2021
    ($in thousands, except EPS)      
    Income before Income Taxes $19,000 $8,577
    Provision for credit losses  2,725  5,710
    Provision for unfunded commitments  —  —
    Pre-tax, Pre-provision Income $21,725 $14,287


           
    Non-GAAP Reconciliations Year Ended December 31,
         2022 2021
    ($ in thousands, except EPS)      
    Income before Income Taxes $87,760  $65,613
    Provision for credit losses  (2,025)  2,466
    Provision for unfunded commitments  (850)  —
    Pre-tax, Pre-provision Income $84,885  $68,079



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

           
      December 31, December 31,
      2022 2021
      (unaudited)
    ASSETS      
    Cash and due from banks $220,039  $682,807 
    Federal funds sold  9,374   308 
    Securities available-for-sale  1,332,947   1,364,734 
    Loans:      
    Commercial  1,798,260   1,674,066 
    Residential  673,464   664,509 
    Consumer  588,539   474,026 
       3,060,263   2,812,601 
    (Less) plus:      
    Net deferred loan costs  7,175   3,294 
    Allowance for credit losses  (39,779)  (48,305)
       3,027,659   2,767,590 
    Restricted stock  15,378   16,200 
    Accrued interest receivable  21,288   16,946 
    Premises and equipment, net  66,147   69,522 
    Bank-owned life insurance  115,704   116,997 
    Goodwill  86,985   86,135 
    Other intangible assets  6,714   8,024 
    Other real estate owned  337   108 
    Other assets  86,709   45,728 
    TOTAL ASSETS $4,989,281  $5,175,099 
           
    LIABILITIES AND SHAREHOLDERS’ EQUITY      
    Deposits:      
    Non-interest-bearing $857,920  $914,933 
    Interest-bearing:      
    Certificates of deposit exceeding the FDIC insurance limits  50,608   74,015 
    Other interest-bearing deposits  3,460,343   3,420,621 
       4,368,871   4,409,569 
    Short-term borrowings  70,875   93,374 
    FHLB advances  9,589   15,937 
    Other liabilities  64,662   73,643 
    TOTAL LIABILITIES  4,513,997   4,592,523 
           
    Shareholders’ equity      
    Common stock, $.125 stated value per share;      
    Authorized shares-40,000,000      
    Issued shares-16,114,992 in 2022 and 16,096,313 in 2021      
    Outstanding shares-12,051,964 in 2022 and 12,629,893 in 2021  2,012   2,009 
    Additional paid-in capital  143,185   141,979 
    Retained earnings  614,829   559,139 
    Accumulated other comprehensive income/(loss)  (139,983)  (2,426)
    Less: Treasury shares at cost-4,063,028 in 2022 and 3,466,420 in 2021  (144,759)  (118,125)
    TOTAL SHAREHOLDERS’ EQUITY  475,284   582,576 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $4,989,281  $5,175,099 



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

              
              
      Year Ended December 31,
      2022 2021 2020
      (unaudited)
    INTEREST INCOME:         
    Loans, including related fees $146,295  $128,000  $137,241 
    Securities:         
    Taxable  21,014   13,110   12,979 
    Tax-exempt  9,974   8,762   7,952 
    Other  6,018   2,326   2,313 
    TOTAL INTEREST INCOME  183,301   152,198   160,485 
    INTEREST EXPENSE:         
    Deposits  16,743   8,158   12,801 
    Short-term borrowings  1,243   387   568 
    Other borrowings  273   252   770 
    TOTAL INTEREST EXPENSE  18,259   8,797   14,139 
    NET INTEREST INCOME  165,042   143,401   146,346 
    Provision for credit losses  (2,025)  2,466   10,528 
    NET INTEREST INCOME AFTER PROVISION         
    FOR LOAN LOSSES  167,067   140,935   135,818 
    NON-INTEREST INCOME:         
    Trust and financial services  5,155   5,255   5,423 
    Service charges and fees on deposit accounts  11,842   10,089   10,256 
    Other service charges and fees  18,604   18,212   15,644 
    Securities gains (losses), net  3   114   233 
    Gain on sales of mortgage loans  1,994   5,003   6,626 
    Other  9,118   3,411   4,294 
    TOTAL NON-INTEREST INCOME  46,716   42,084   42,476 
    NON-INTEREST EXPENSE:         
    Salaries and employee benefits  65,555   64,474   61,931 
    Occupancy expense  9,764   8,774   8,202 
    Equipment expense  12,391   10,174   10,568 
    FDIC Expense  2,327   1,294   316 
    Other  35,986   32,690   31,741 
    TOTAL NON-INTEREST EXPENSE  126,023   117,406   112,758 
    INCOME BEFORE INCOME TAXES  87,760   65,613   65,536 
    Provision for income taxes  16,651   12,626   11,692 
    NET INCOME  71,109   52,987   53,844 
    OTHER COMPREHENSIVE INCOME (LOSS)         
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes  (144,579)  (18,148)  19,269 
    Change in funded status of post retirement benefits, net of taxes  7,022   6,298   (2,004)
    COMPREHENSIVE INCOME (LOSS) $(66,448) $41,137  $71,109 
    PER SHARE DATA         
    Basic and Diluted Earnings per Share $5.82  $4.02  $3.93 
    Weighted average number of shares outstanding (in thousands)  12,211   13,190   13,716 

     


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