• First Financial Corporation Reports Second Quarter Results

    Source: Nasdaq GlobeNewswire / 23 Jul 2024 09:00:00   America/Chicago

    TERRE HAUTE, Ind., July 23, 2024 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2024.

    • Net income was $11.4 million compared to the $16.0 million reported for the same period of 2023;
    • Diluted net income per common share of $0.96 compared to $1.33 for the same period of 2023;
    • Return on average assets was 0.94% compared to 1.34% for the three months ended June 30, 2023;
    • Credit loss provision was $3.0 million compared to provision of $1.8 million for the second quarter 2023; and
    • Pre-tax, pre-provision net income was $16.2 million compared to $21.2 million for the same period in 2023.1

    The Corporation further reported results for the six months ended June 30, 2024:

    • Net income was $22.3 million compared to the $32.0 million reported for the same period of 2023;
    • Diluted net income per common share of $1.89 compared to $2.66 for the same period of 2023;
    • Return on average assets was 0.93% compared to 1.33% for the six months ended June 30, 2023;
    • Credit loss provision was $4.8 million compared to provision of $3.6 million for the six months ended June 30, 2023; and
    • Pre-tax, pre-provision net income was $31.2 million compared to $42.6 million for the same period in 2023.1

    _________________________
    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.


    Average Total Loans

    Average total loans for the second quarter of 2024 were $3.20 billion versus $3.10 billion for the comparable period in 2023, an increase of $100 million or 3.22%. On a linked quarter basis, average loans increased $18 million or 0.55% from $3.18 billion as of March 31, 2024.

    Total Loans Outstanding

    Total loans outstanding as of June 30, 2024, were $3.20 billion compared to $3.13 billion as of June 30, 2023, an increase of $69 million or 2.21%, primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans. On a linked quarter basis, total loans increased $12.0 million or 0.38% from $3.19 billion as of March 31, 2024.

    Norman D. Lowery, President and Chief Executive Officer, commented “We are pleased with our second quarter results, as we experienced another quarter of loan growth. We also saw our net interest margin expand during the quarter as cost of funds pressure moderated. We expect continued improvement in coming quarters. Additionally on July 1st we closed our acquisition of SimplyBank expanding our footprint into attractive southeastern Tennessee markets.”

    Average Total Deposits

    Average total deposits for the quarter ended June 30, 2024, were $4.11 billion versus $4.12 billion as of June 30, 2023.

    Total Deposits

    Total deposits were $4.13 billion as of June 30, 2024, compared to $4.06 billion as of June 30, 2023, a $69 million increase, or 1.70%. On a linked quarter basis, total deposits increased $27.2 million, or 0.66%. Non-interest bearing deposits were $748.5 million and time deposits were $585.8 million as of June 30, 2024, compared to $817.4 million and $414.2 million, respectively for the same period of 2023.

    Shareholders’ Equity

    Shareholders’ equity at June 30, 2024, was $530.7 million compared to $496.9 million on June 30, 2023. During the last twelve months, the Corporation has repurchased 228,457 shares of its common stock. There were no shares repurchased during the quarter. 518,860 shares remain available for repurchase under the current repurchase authorization. During the quarter, the Corporation paid a $0.45 per share quarterly dividend in April, and declared a $0.45 quarterly dividend paid on July 15, 2024.

    Book Value Per Share

    Book Value per share was $44.92 as of June 30, 2024, compared to $41.47 as of June 30, 2023, an increase of 8.33%. Tangible Book Value per share was $37.12 as of June 30, 2024, compared to $33.70 as of June 30, 2023, an increase of $3.42 per share or 10.15%.

    Tangible Common Equity to Tangible Asset Ratio

    The Corporation’s tangible common equity to tangible asset ratio was 9.14% at June 30, 2024, compared to 8.44% at June 30, 2023.

    Net Interest Income

    Net interest income for the second quarter of 2024 was $39.3 million, compared to $42.2 million reported for the same period of 2023, a decrease of $2.9 million, or 6.86%, driven primarily by higher interest expense. Interest income increased $4.5 million and interest expense increased $7.4 million year-over-year.

    Net Interest Margin

    The net interest margin for the quarter ended June 30, 2024, was 3.57% compared to the 3.81% reported at June 30, 2023. On a linked quarterly basis, the net interest margin increased 4 basis points from 3.53% at March 31, 2024.

    Nonperforming Loans

    Nonperforming loans as of June 30, 2024, were $15.9 million versus $13.3 million as of June 30, 2023. The ratio of nonperforming loans to total loans and leases was 0.50% as of June 30, 2024, versus 0.43% as of June 30, 2023.

    Credit Loss Provision

    The provision for credit losses for the three months ended June 30, 2024, was $3.0 million, compared to $1.8 million for the second quarter 2023. The increase in provision as well as charge-offs discussed below were related to one previously identified credit, reflecting further deterioration in collateral values in the quarter.

    Net Charge-Offs

    In the second quarter of 2024 net charge-offs were $4.7 million compared to $1.5 million in the same period of 2023.

    Allowance for Credit Losses

    The Corporation’s allowance for credit losses as of June 30, 2024, was $38.3 million compared to $39.9 million as of June 30, 2023. The allowance for credit losses as a percent of total loans was 1.20% as of June 30, 2024, compared to 1.28% as of June 30, 2023. On a linked quarter basis, the allowance for credit losses as a percent of total loans decreased 5 basis points from 1.25% as of March 31, 2024.

    Non-Interest Income

    Non-interest income for the three months ended June 30, 2024 and 2023 was $9.9 million and $10.5 million, respectively. The 2023 amount included a $760 thousand gain on the sale of a branch which had been closed.

    Non-Interest Expense

    Non-interest expense for the three months ended June 30, 2024, was $32.7 million compared to $31.3 million in 2023. This included $654 thousand of acquisition related expenses during the quarter.

    Efficiency Ratio

    The Corporation’s efficiency ratio was 64.56% for the quarter ending June 30, 2024, versus 58.01% for the same period in 2023.

    Income Taxes

    Income tax expense for the three months ended June 30, 2024, was $2.2 million versus $3.5 million for the same period in 2023. The effective tax rate for 2024 was 16.29% compared to 17.99% for 2023.

    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 70 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  Six Months Ended
     June 30,  March 31, June 30,  June 30,  June 30, 
     2024    2024    2023    2024    2023
    END OF PERIOD BALANCES                   
    Assets$4,891,068  $4,852,615  $4,877,231  $4,891,068  $4,877,231 
    Deposits$4,132,327  $4,105,103  $4,063,155  $4,132,327  $4,063,155 
    Loans, including net deferred loan costs$3,204,009  $3,191,983  $3,134,638  $3,204,009  $3,134,638 
    Allowance for Credit Losses$38,334  $40,045  $39,907  $38,334  $39,907 
    Total Equity$530,670  $520,766  $496,888  $530,670  $496,888 
    Tangible Common Equity (a)$438,569  $428,430  $403,824  $438,569  $403,824 
                        
    AVERAGE BALANCES                        
    Total Assets$4,813,308  $4,804,364  $4,818,760  $4,808,836  $4,835,122 
    Earning Assets$4,556,839  $4,566,461  $4,581,652  $4,561,650  $4,597,389 
    Investments$1,279,278  $1,308,322  $1,395,446  $1,293,800  $1,401,695 
    Loans$3,197,695  $3,180,147  $3,097,836  $3,188,921  $3,083,276 
    Total Deposits$4,113,826  $4,045,838  $4,121,097  $4,079,832  $4,186,629 
    Interest-Bearing Deposits$3,413,752  $3,326,090  $3,297,110  $3,369,921  $3,352,350 
    Interest-Bearing Liabilities$152,303  $221,425  $185,318  $186,864  $140,739 
    Total Equity$517,890  $522,720  $501,686  $520,305  $494,760 
                        
    INCOME STATEMENT DATA                        
    Net Interest Income$39,294  $38,920  $42,187  $78,214  $86,522 
    Net Interest Income Fully Tax Equivalent (b)$40,673  $40,297  $43,581  $80,970  $89,235 
    Provision for Credit Losses$2,966  $1,800  $1,800  $4,766  $3,600 
    Non-interest Income$9,905  $9,431  $10,453  $19,336  $19,828 
    Non-interest Expense$32,651  $33,422  $31,346  $66,073  $63,667 
    Net Income$11,369  $10,924  $15,987  $22,293  $31,967 
                        
    PER SHARE DATA                        
    Basic and Diluted Net Income Per Common Share$0.96  $0.93  $1.33  $1.89  $2.66 
    Cash Dividends Declared Per Common Share$0.45  $0.45  $0.54  $0.90  $0.54 
    Book Value Per Common Share$44.92  $44.08  $41.47  $44.92  $41.47 
    Tangible Book Value Per Common Share (c)$36.04  $36.26  $33.99  $37.12  $33.70 
    Basic Weighted Average Common Shares Outstanding 11,814   11,803   12,022   11,809   12,040 

    _________________________
    (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 RatiosThree Months Ended  Six Months Ended  
     June 30,
    		    March 31,
    		    June 30,
    		    June 30,
    		    June 30,
    		 
     2024
    		       2024
    		       2023
    		       2024
    		       2023
    		 
    Return on average assets0.94 %0.91 %1.34 %0.93 %1.33 %
    Return on average common shareholder's equity8.78 %8.36 %12.75 %8.57 %12.92 %
    Efficiency ratio64.56 %67.21 %58.01 %65.87 %58.38 %
    Average equity to average assets10.76 %10.88 %10.48 %10.82 %10.27 %
    Net interest margin (a)3.57 %3.53 %3.81 %3.55 %3.88 %
    Net charge-offs to average loans and leases0.59 %0.19 %0.20 %0.39 %0.23 %
    Credit loss reserve to loans and leases1.20 %1.25 %1.28 %1.20 %1.28 %
    Credit loss reserve to nonperforming loans240.85 %165.12 %300.10 %240.85 %300.10 %
    Nonperforming loans to loans and leases0.50 %0.76 %0.43 %0.50 %0.43 %
    Tier 1 leverage12.14 %12.02 %11.49 %12.14 %11.49 %
    Risk-based capital - Tier 114.82 %14.69 %14.44 %14.82 %14.44 %

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

                        
    Asset QualityThree Months Ended  Six Months Ended
     June 30,     March 31,    June 30,     June 30,     June 30, 
     2024 2024 2023 2024 2023
    Accruing loans and leases past due 30-89 days$14,913  $17,937  $15,583  $14,913  $15,583 
    Accruing loans and leases past due 90 days or more$1,353  $1,395  $682  $1,353  $682 
    Nonaccrual loans and leases$14,563  $22,857  $12,616  $14,563  $12,616 
    Other real estate owned$170  $167  $90  $170  $90 
    Nonperforming loans and other real estate owned$16,086  $24,419  $13,388  $16,086  $13,388 
    Total nonperforming assets$18,978  $27,307  $16,302  $18,978  $16,302 
    Gross charge-offs$6,091  $3,192  $3,543  $9,283  $7,919 
    Recoveries$1,414  $1,670  $2,030  $3,084  $4,447 
    Net charge-offs/(recoveries)$4,677  $1,522  $1,513  $6,199  $3,472 


          
    Non-GAAP ReconciliationsThree Months Ended June 30, 
     2024    2023
    ($in thousands, except EPS)     
    Income before Income Taxes$13,582  $19,494 
    Provision for credit losses 2,966   1,800 
    Provision for unfunded commitments (300)  (100)
    Pre-tax, Pre-provision Income$16,248  $21,194 


          
    Non-GAAP ReconciliationsSix Months Ended June 30, 
     2024    2023
    ($ in thousands, except EPS)     
    Income before Income Taxes$26,711  $39,083 
    Provision for credit losses 4,766   3,600 
    Provision for unfunded commitments (300)  (100)
    Pre-tax, Pre-provision Income$31,177  $42,583 


     
    CONSOLIDATED BALANCE SHEETS
    (Dollar amounts in thousands, except per share data)
          
     June 30,     December 31, 
     2024 2023
     (unaudited)
    ASSETS     
    Cash and due from banks$75,073  $76,759 
    Federal funds sold 24,000   282 
    Securities available-for-sale 1,205,751   1,259,137 
    Loans:     
    Commercial 1,782,646   1,817,526 
    Residential 748,044   695,788 
    Consumer 666,130   646,758 
      3,196,820   3,160,072 
    (Less) plus:       
    Net deferred loan costs 7,189   7,749 
    Allowance for credit losses (38,334)  (39,767)
      3,165,675   3,128,054 
    Restricted stock 15,378   15,364 
    Accrued interest receivable 23,733   24,877 
    Premises and equipment, net 65,750   67,286 
    Bank-owned life insurance 114,767   114,122 
    Goodwill 86,985   86,985 
    Other intangible assets 5,116   5,586 
    Other real estate owned 170   107 
    Other assets 108,670   72,587 
    TOTAL ASSETS$4,891,068  $4,851,146 
          
    LIABILITIES AND SHAREHOLDERS’ EQUITY       
    Deposits:       
    Non-interest-bearing$748,495  $750,335 
    Interest-bearing:     
    Certificates of deposit exceeding the FDIC insurance limits 112,679   92,921 
    Other interest-bearing deposits 3,271,153   3,246,812 
      4,132,327   4,090,068 
    Short-term borrowings 38,211   67,221 
    FHLB advances 108,575   108,577 
    Other liabilities 81,285   57,304 
    TOTAL LIABILITIES 4,360,398   4,323,170 
          
    Shareholders’ equity       
    Common stock, $.125 stated value per share;       
    Authorized shares-40,000,000       
    Issued shares-16,165,023 in 2024 and 16,137,220 in 2023       
    Outstanding shares-11,814,093 in 2024 and 11,795,024 in 2023 2,016   2,014 
    Additional paid-in capital 144,632   144,152 
    Retained earnings 673,728   663,726 
    Accumulated other comprehensive income/(loss) (134,501)  (127,087)
    Less: Treasury shares at cost-4,350,930 in 2024 and 4,342,196 in 2023 (155,205)  (154,829)
    TOTAL SHAREHOLDERS’ EQUITY 530,670   527,976 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,891,068  $4,851,146 


     
    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
    (Dollar amounts in thousands, except per share data)
                 
     Three Months Ended  Six Months Ended
     June 30,  June 30, 
     2024    2023    2024    2023
            (unaudited)
    INTEREST INCOME:            
    Loans, including related fees$51,459  $46,479  $101,511  $91,074 
    Securities:              
    Taxable 5,833   6,231   11,764   12,467 
    Tax-exempt 2,601   2,678   5,204   5,276 
    Other 878   841   1,695   2,112 
    TOTAL INTEREST INCOME 60,771   56,229   120,174   110,929 
    INTEREST EXPENSE:                
    Deposits 19,694   11,957   37,425   21,484 
    Short-term borrowings 959   1,294   1,935   2,102 
    Other borrowings 824   791   2,600   821 
    TOTAL INTEREST EXPENSE 21,477   14,042   41,960   24,407 
    NET INTEREST INCOME 39,294   42,187   78,214   86,522 
    Provision for credit losses 2,966   1,800   4,766   3,600 
    NET INTEREST INCOME AFTER PROVISION                
    FOR LOAN LOSSES 36,328   40,387   73,448   82,922 
    NON-INTEREST INCOME:               
    Trust and financial services 1,318   1,185   2,652   2,502 
    Service charges and fees on deposit accounts 6,730   7,054   13,437   13,872 
    Other service charges and fees 286   196   509   400 
    Securities gains (losses), net —   —   —   — 
    Interchange income 135   —   314   47 
    Loan servicing fees 414   264   683   549 
    Gain on sales of mortgage loans 299   311   475   490 
    Other 723   1,443   1,266   1,968 
    TOTAL NON-INTEREST INCOME 9,905   10,453   19,336   19,828 
    NON-INTEREST EXPENSE:                
    Salaries and employee benefits 17,380   16,946   34,710   34,104 
    Occupancy expense 2,201   2,132   4,560   4,731 
    Equipment expense 4,312   3,525   8,456   6,824 
    FDIC Expense 501   577   1,163   1,364 
    Other 8,257   8,166   17,184   16,644 
    TOTAL NON-INTEREST EXPENSE 32,651   31,346   66,073   63,667 
    INCOME BEFORE INCOME TAXES 13,582   19,494   26,711   39,083 
    Provision for income taxes 2,213   3,507   4,418   7,116 
    NET INCOME 11,369   15,987   22,293   31,967 
    OTHER COMPREHENSIVE INCOME (LOSS)                
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes 3,535   (15,808)  (7,561)  (1,570)
    Change in funded status of post retirement benefits, net of taxes 74   147   147   294 
    COMPREHENSIVE INCOME (LOSS)$14,978  $326  $14,879  $30,691 
    PER SHARE DATA                
    Basic and Diluted Earnings per Share$0.96  $1.33  $1.89  $2.66 
    Weighted average number of shares outstanding (in thousands) 11,814   12,022   11,809   12,040 

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