First Financial Corporation reports 1st Quarter results
April 24 2018 - 10:30AM
First Financial Corporation (NASDAQ:THFF) today announced results
for the first quarter of 2018. Net income for the three months
ending March 31, 2018 was $8.95 million compared to $9.37 million
for the same period of 2017, which included a $1.99 million,
after-tax cash recovery of previous other-than-temporary
impairment. Diluted net income per common share for the quarter was
$0.73 compared to $0.77 for the same period of 2017. Return on
assets for the three months ended March 31, 2018 was 1.20% compared
to 1.26% for the three months ended March 31, 2017.
Average total loans for the first quarter of 2018 were $1.91
billion versus $1.84 billion for the comparable period in 2017, an
increase of $66.7 million or 3.64%. Total loans outstanding
increased $72.5 million, or 3.95%, from $1.83 billion as of March
31, 2017 to $1.91 billion as of March 31, 2018. On a linked quarter
basis, average total loans increased $33.4 million, or 1.78%, from
$1.87 billion for the quarter ending December 31, 2017.
Average total deposits for the quarter ended March 31, 2018 were
$2.45 billion versus $2.44 billion as of March 31, 2017. Total
deposits increased $19.2 million from $2.44 billion as of March 31,
2017 to $2.46 billion as of March 31, 2018.
Book value per share was $33.86 at March 31, 2018 compared to
$34.92 at March 31, 2017. Shareholders’ equity at March 31, 2018
was $414.9 million compared to $426.8 million on March 31, 2017.
The company’s tangible common equity to tangible asset ratio was
12.98% at March 31, 2018, compared to 13.37% at March 31, 2017. The
change in equity was a result of the $1.50 special dividend paid in
December 2017 and the re-measurement of the deferred tax assets as
a result of the Tax Cuts and Jobs Act signed into law on December
22, 2017.
Net interest income for the first quarter of 2018 was $27.5
million, an increase of 3.64% over the $26.5 million reported for
the same period of 2017. The net interest margin for the quarter
ended March 31, 2018 increased to 4.06% from the 4.05% reported at
March 31, 2017.
Nonperforming loans as of March 31, 2018 were $20.7 million as
of March 31, 2018 versus $19.7 million as of March 31, 2017. The
ratio of nonperforming loans to total loans and leases was 1.09% as
of March 31, 2018 versus 1.07% as of March 31, 2017.
The provision for loan losses for the three months ended March
31, 2018 was $1.47 million compared to the $1.60 million provision
for the first quarter of 2017. Net charge-offs were $1.14 million
for the first quarter of 2018 compared to $974 thousand in the same
period of 2017. The Corporation’s allowance for loan losses as of
March 31, 2018 was $20.2 million compared to $19.4 million as of
March 31, 2017. The allowance for loan losses as a percent of total
loans was 1.06% as of March 31, 2018 the same as March 31,
2017.
Non-interest income for the three months ended March 31, 2018
and 2017 was $8.10 and $11.0 million, respectively. The 2017 first
quarter non-interest income included a $3.06 million cash recovery
of previous other-than-temporary impairment.
Non-interest expense for the three months ended March 31, 2018
increased $633 thousand to $23.2 million compared to $22.6 million
in 2017. The Corporation’s efficiency ratio was 63.49% for the
quarter ending March 31, 2018 versus 57.77% for the same period in
2017.
Income tax expense for the three months ended March 31, 2018 was
$1.94 million versus $4.01 million for the same period in 2017. The
effective tax rate for 2018 was 17.80% compared to 29.99% for
2017.Norman L. Lowery, President and Chief Executive Officer,
commented, “We are pleased with our first quarter 2018 results. We
continue to grow loans, which when coupled with our asset-sensitive
balance sheet, contributed to our strong net-interest income
growth.”
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, |
|
|
2018 |
2017 |
2017 |
END OF PERIOD
BALANCES |
|
|
|
|
Assets |
|
$ |
2,956,654 |
|
$ |
3,000,668 |
|
$ |
2,957,285 |
|
Deposits |
|
$ |
2,457,189 |
|
$ |
2,458,653 |
|
$ |
2,438,012 |
|
Loans,
including net deferred loan costs |
|
$ |
1,907,445 |
|
$ |
1,906,761 |
|
$ |
1,834,893 |
|
Allowance
for Loan Losses |
|
$ |
20,241 |
|
$ |
19,909 |
|
$ |
19,395 |
|
Total
Equity |
|
$ |
414,901 |
|
$ |
413,569 |
|
$ |
426,808 |
|
Tangible
Common Equity (a) |
|
$ |
379,019 |
|
$ |
377,584 |
|
$ |
390,470 |
|
|
|
|
|
|
AVERAGE
BALANCES |
|
|
|
|
Total
Assets |
|
$ |
2,979,601 |
|
$ |
3,006,198 |
|
$ |
2,983,114 |
|
Earning
Assets |
|
$ |
2,800,498 |
|
$ |
2,797,194 |
|
$ |
2,766,991 |
|
Investments |
|
$ |
876,764 |
|
$ |
895,401 |
|
$ |
919,599 |
|
Loans |
|
$ |
1,908,118 |
|
$ |
1,874,766 |
|
$ |
1,841,392 |
|
Total
Deposits |
|
$ |
2,449,888 |
|
$ |
2,473,385 |
|
$ |
2,444,162 |
|
Interest-Bearing Deposits |
|
$ |
2,028,581 |
|
$ |
2,039,993 |
|
$ |
1,971,848 |
|
Interest-Bearing Liabilities |
|
$ |
54,475 |
|
$ |
27,357 |
|
$ |
50,164 |
|
Total
Equity |
|
$ |
414,340 |
|
$ |
442,418 |
|
$ |
426,673 |
|
|
|
|
|
|
INCOME
STATEMENT DATA |
|
|
|
|
Net
Interest Income |
|
$ |
27,473 |
|
$ |
27,682 |
|
$ |
26,507 |
|
Net
Interest Income Fully Tax Equivalent (b) |
|
$ |
28,453 |
|
$ |
29,316 |
|
$ |
28,031 |
|
Provision
for Loan Losses |
|
$ |
1,473 |
|
$ |
1,474 |
|
$ |
1,596 |
|
Non-interest Income |
|
$ |
8,103 |
|
$ |
8,236 |
|
$ |
11,049 |
|
Non-interest Expense |
|
$ |
23,210 |
|
$ |
21,798 |
|
$ |
22,577 |
|
Net
Income |
|
$ |
8,954 |
|
$ |
2,616 |
|
$ |
9,369 |
|
|
|
|
|
|
PER SHARE
DATA |
|
|
|
|
Basic and
Diluted Net Income Per Common Share |
|
$ |
0.73 |
|
$ |
0.21 |
|
$ |
0.77 |
|
Cash
Dividends Declared Per Common Share |
|
$ |
— |
|
$ |
2.01 |
|
$ |
— |
|
Book
Value Per Common Share |
|
$ |
33.86 |
|
$ |
33.77 |
|
$ |
34.92 |
|
Tangible
Book Value Per Common Share (c) |
|
$ |
30.93 |
|
$ |
30.83 |
|
$ |
31.94 |
|
Basic
Weighted Average Common Shares Outstanding |
|
12,248 |
|
12,234 |
|
|
12,217 |
|
(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% for
2018 and 65% for prior years.(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, |
|
|
|
2018 |
2017 |
2017 |
|
Return on average
assets |
|
1.20% |
|
0.35% |
|
1.26% |
|
Return on average
common shareholder's equity |
|
8.64% |
|
2.37% |
|
8.78% |
|
Efficiency ratio |
|
63.49% |
|
58.05% |
|
57.77% |
|
Average equity to
average assets |
|
13.91% |
|
14.72% |
|
14.31% |
|
Net interest margin
(a) |
|
4.06% |
|
4.20% |
|
4.05% |
|
Net charge-offs to
average loans and leases |
|
0.24% |
|
0.29% |
|
0.21% |
|
Loan and lease loss
reserve to loans and leases |
|
1.06% |
|
1.04% |
|
1.06% |
|
Loan and lease loss
reserve to nonperforming loans and other real estate |
|
97.66% |
|
84.50% |
|
98.37% |
|
Nonperforming loans to
loans and leases |
|
1.09% |
|
1.14% |
|
1.07% |
|
Tier 1 leverage |
|
13.71% |
|
13.31% |
|
13.63% |
|
Risk-based capital -
Tier 1 |
|
17.57% |
|
17.01% |
|
17.78% |
|
(a) Net interest margin is calculated on a tax equivalent
basis.
|
|
|
Asset
Quality |
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2018 |
2017 |
2017 |
Accruing loans and
leases past due 30-89 days |
|
$ |
9,758 |
|
$ |
13,358 |
|
$ |
7,713 |
|
Accruing loans and
leases past due 90 days or more |
|
$ |
602 |
|
$ |
1,403 |
|
$ |
453 |
|
Nonaccrual loans and
leases |
|
$ |
13,206 |
|
$ |
13,245 |
|
$ |
11,106 |
|
Total troubled debt
restructuring |
|
$ |
6,919 |
|
$ |
7,034 |
|
$ |
8,158 |
|
Other real estate
owned |
|
$ |
1,923 |
|
$ |
1,880 |
|
$ |
2,294 |
|
Nonperforming loans and
other real estate owned |
|
$ |
22,650 |
|
$ |
23,562 |
|
$ |
22,011 |
|
Total nonperforming
assets |
|
$ |
38,179 |
|
$ |
38,167 |
|
$ |
34,004 |
|
Gross charge-offs |
|
$ |
2,074 |
|
$ |
2,434 |
|
$ |
2,274 |
|
Recoveries |
|
$ |
933 |
|
$ |
1,067 |
|
$ |
1,300 |
|
Net
charge-offs/(recoveries) |
|
$ |
1,141 |
|
$ |
1,367 |
|
$ |
974 |
|
CONSOLIDATED BALANCE SHEETS |
(Dollar amounts in thousands, except per share
data) |
|
|
|
March 31, 2018 |
|
December 31, 2017 |
|
|
(unaudited) |
ASSETS |
|
|
|
|
Cash and due from
banks |
|
$ |
41,156 |
|
|
$ |
74,107 |
|
Federal funds sold |
|
1,500 |
|
|
— |
|
Securities
available-for-sale |
|
805,558 |
|
|
814,931 |
|
Loans: |
|
|
|
|
Commercial |
|
1,135,927 |
|
|
1,139,490 |
|
Residential |
|
436,119 |
|
|
436,143 |
|
Consumer |
|
332,115 |
|
|
327,976 |
|
|
|
1,904,161 |
|
|
1,903,609 |
|
(Less) plus: |
|
|
|
|
Net deferred loan
costs |
|
3,284 |
|
|
3,152 |
|
Allowance for loan
losses |
|
(20,241 |
) |
|
(19,909 |
) |
|
|
1,887,204 |
|
|
1,886,852 |
|
Restricted stock |
|
10,390 |
|
|
10,379 |
|
Accrued interest
receivable |
|
12,983 |
|
|
12,913 |
|
Premises and equipment,
net |
|
47,771 |
|
|
48,272 |
|
Bank-owned life
insurance |
|
85,306 |
|
|
85,016 |
|
Goodwill |
|
34,355 |
|
|
34,355 |
|
Other intangible
assets |
|
1,527 |
|
|
1,630 |
|
Other real estate
owned |
|
1,923 |
|
|
1,880 |
|
Other assets |
|
26,981 |
|
|
30,333 |
|
TOTAL ASSETS |
|
$ |
2,956,654 |
|
|
$ |
3,000,668 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Deposits: |
|
|
|
|
Non-interest-bearing |
|
$ |
415,694 |
|
|
$ |
425,001 |
|
Interest-bearing: |
|
|
|
|
Certificates of deposit
exceeding the FDIC insurance limits |
|
42,056 |
|
|
43,178 |
|
Other interest-bearing
deposits |
|
1,999,439 |
|
|
1,990,474 |
|
|
|
2,457,189 |
|
|
2,458,653 |
|
Short-term
borrowings |
|
29,078 |
|
|
57,686 |
|
FHLB advances |
|
— |
|
|
— |
|
Other liabilities |
|
55,486 |
|
|
70,760 |
|
TOTAL LIABILITIES |
|
2,541,753 |
|
|
2,587,099 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
Common stock, $.125
stated value per share; |
|
|
|
|
Authorized
shares-40,000,000 |
|
|
|
|
Issued
shares-14,612,540 in 2018 and 14,595,320 in 2017 |
|
|
|
|
Outstanding
shares-12,255,045 in 2018 and 12,246,464 in 2017 |
|
1,823 |
|
|
1,822 |
|
Additional paid-in
capital |
|
75,810 |
|
|
75,624 |
|
Retained earnings |
|
431,595 |
|
|
420,275 |
|
Accumulated other
comprehensive loss |
|
(24,488 |
) |
|
(14,704 |
) |
Less: Treasury shares
at cost-2,357,495 in 2018 and 2,348,856 in 2017 |
|
(69,839 |
) |
|
(69,448 |
) |
TOTAL SHAREHOLDERS’
EQUITY |
|
414,901 |
|
|
413,569 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
2,956,654 |
|
|
$ |
3,000,668 |
|
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME |
(Dollar amounts in thousands, except per share
data) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
|
(unaudited) |
INTEREST INCOME: |
|
|
|
Loans, including
related fees |
$ |
23,623 |
|
|
$ |
21,941 |
|
Securities: |
|
|
|
Taxable |
3,593 |
|
|
3,757 |
|
Tax-exempt |
1,840 |
|
|
1,827 |
|
Other |
321 |
|
|
321 |
|
TOTAL INTEREST
INCOME |
29,377 |
|
|
27,846 |
|
INTEREST EXPENSE: |
|
|
|
Deposits |
1,764 |
|
|
1,275 |
|
Short-term
borrowings |
99 |
|
|
44 |
|
Other borrowings |
41 |
|
|
20 |
|
TOTAL INTEREST
EXPENSE |
1,904 |
|
|
1,339 |
|
NET INTEREST
INCOME |
27,473 |
|
|
26,507 |
|
Provision for loan
losses |
1,473 |
|
|
1,596 |
|
NET INTEREST INCOME
AFTER PROVISION |
|
|
|
FOR LOAN LOSSES |
26,000 |
|
|
24,911 |
|
NON-INTEREST
INCOME: |
|
|
|
Trust and financial
services |
1,415 |
|
|
1,317 |
|
Service charges and
fees on deposit accounts |
2,885 |
|
|
2,777 |
|
Other service charges
and fees |
3,144 |
|
|
3,185 |
|
Securities
gains/(losses), net |
— |
|
|
2 |
|
Insurance
commissions |
32 |
|
|
22 |
|
Gain on sales of
mortgage loans |
340 |
|
|
327 |
|
Other |
287 |
|
|
3,419 |
|
TOTAL NON-INTEREST
INCOME |
8,103 |
|
|
11,049 |
|
NON-INTEREST
EXPENSE: |
|
|
|
Salaries and employee
benefits |
12,965 |
|
|
13,376 |
|
Occupancy expense |
1,781 |
|
|
1,768 |
|
Equipment expense |
1,693 |
|
|
1,797 |
|
FDIC Expense |
227 |
|
|
233 |
|
Other |
6,544 |
|
|
5,403 |
|
TOTAL NON-INTEREST
EXPENSE |
23,210 |
|
|
22,577 |
|
INCOME BEFORE INCOME
TAXES |
10,893 |
|
|
13,383 |
|
Provision for income
taxes |
1,939 |
|
|
4,014 |
|
NET INCOME |
8,954 |
|
|
9,369 |
|
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
Change in unrealized
gains/losses on securities, net of reclassifications and taxes |
(7,201 |
) |
|
3,188 |
|
Change in funded status
of post retirement benefits, net of taxes |
(2,583 |
) |
|
183 |
|
COMPREHENSIVE INCOME
(LOSS) |
$ |
(830 |
) |
|
$ |
12,740 |
|
PER SHARE DATA |
|
|
|
Basic and Diluted
Earnings per Share |
$ |
0.73 |
|
|
$ |
0.77 |
|
Weighted average number
of shares outstanding (in thousands) |
12,248 |
|
|
12,217 |
|
|
|
|
|
|
|
For more information contact:Rodger A. McHargue at (812)
238-6334
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