• First Financial Corporation Reports Third Quarter Results

    ソース: Nasdaq GlobeNewswire / 24 10 2023 09:00:00   America/Chicago

    TERRE HAUTE, Ind., Oct. 24, 2023 (GLOBE NEWSWIRE) --  First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2023.

    • Net income was $16.3 million compared to the $18.1 million reported for the same period of 2022;
    • Diluted net income per common share of $1.37 compared to $1.50 for the same period of 2022;
    • Return on average assets was 1.35% compared to 1.43% for the three months ended September 30, 2022;
    • Credit loss provision was $1.2 million compared to provision of $1.1 million for the third quarter 2022; and
    • Pre-tax, pre-provision net income was $20.5 million compared to $23.7 million for the same period in 2022.1

    The Corporation further reported results for the nine months ending September 30, 2023:

    • Net income was $48.3 million compared to the $54.6 million reported for the same period of 2022, which included the proceeds of a legal settlement and pandemic related reserve releases, both of which were non-recurring events;
    • Diluted net income per common share of $4.02 compared to $4.45 for the same period of 2022;
    • Return on average assets was 1.33% compared to 1.43% for the nine months ended September 30, 2022;
    • Credit loss provision was $4.8 million compared to negative provision of $4.8 million for the nine months ended September 30, 2022; and
    • Pre-tax, pre-provision net income was $63.1 million compared to $63.2 million for the same period in 2022.1

    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 third quarter of 2023 were $3.15 billion versus $2.92 billion for the comparable period in 2022, an increase of $230 million or 7.88%. On a linked quarter basis, average loans increased $49 million or 1.60% from $3.10 billion as of June 30, 2023.

    Total Loans Outstanding

    Total loans outstanding as of September 30, 2023, were $3.12 billion compared to $2.97 billion as of September 30, 2022, an increase of $147 million or 4.95%, primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans. On a linked quarter basis, total loans decreased $9.1 million or 0.29% from $3.13 billion as of June 30, 2023.

    “We are pleased with our third quarter results, in spite of an increasingly challenging environment. Credit quality remains stable and our disciplined approach to expense management is constant,” said Norman L. Lowery, Chairman and Chief Executive Officer. “Our liquidity is stable and our balance sheet and capital levels remain strong.”

    Average Total Deposits

    Average total deposits for the quarter ended September 30, 2023, were $4.00 billion versus $4.41 billion as of September 30, 2022.

    Total Deposits

    Total deposits were $4.04 billion as of September 30, 2023, compared to $4.41 billion as of September 30, 2022.

    Shareholder Equity

    Shareholder equity at September 30, 2023, was $470.2 million compared to $438.6 million on September 30, 2022. During the quarter, the Corporation repurchased 228,457 shares of its common stock. An additional 518,860 shares remains under the current authorization. Shareholder’s equity was impacted by the downturn in the markets which affected the accumulated other comprehensive income/(loss) (“AOCI”) on investments available for sale. AOCI decreased $8.7 million in comparison to September 30, 2022, and decreased $34.8 million in comparison to June 30, 2023.

    Book Value Per Share

    Book Value per share was $40.00 as of September 30, 2023, compared to $36.49 as of September 30, 2022, an increase of 9.63%.

    Tangible Common Equity to Tangible Asset Ratio

    The Corporation’s tangible common equity to tangible asset ratio was 8.04% at September 30, 2023, compared to 7.01% at September 30, 2022, partially driven by the aforementioned share repurchases.

    Net Interest Income

    Net interest income for the third quarter of 2023 was $41.2 million, compared to $43.1 million reported for the same period of 2022, a decrease of $2.0 million or 4.53%.

    Net Interest Margin

    The net interest margin for the quarter ended September 30, 2023, was 3.74% compared to the 3.71% reported at September 30, 2022, an increase of 3 basis points or 0.69%.

    Nonperforming Loans

    Nonperforming loans as of September 30, 2023, were $12.6 million versus $10.3 million as of September 30, 2022. The ratio of nonperforming loans to total loans and leases was 0.40% as of September 30, 2023, versus 0.35% as of September 30, 2022.

    Credit Loss Provision

    The provision for credit losses for the three months ended September 30, 2023, was $1.20 million, compared to $1.05 million for the third quarter 2022.

    Net Charge-Offs

    In the third quarter of 2023 net charge-offs were $2.07 million compared to $3.02 million in the same period of 2022. On July 12, 2022, the Corporation sold seven classified non farm non residential commercial loans, which were acquired in the two acquisitions in 2019 and 2021, with a total principal balance of $14.9 million. The net recovery on the sale of $361 thousand was a result of the charge-off of the seven loans of $2.1 million, netted by the reserve on those loans and the unamortized discount remaining from the acquisitions.

    Allowance for Credit Losses

    The Corporation’s allowance for credit losses as of September 30, 2023, was $39.0 million compared to $39.5 million as of September 30, 2022. The allowance for credit losses as a percent of total loans was 1.25% as of September 30, 2023, compared to 1.33% as of September 30, 2022. On a linked quarter basis, the allowance for credit losses as a percent of total loans decreased 3 basis points from 1.28% as of June 30, 2023.

    Non-Interest Income

    Non-interest income for the three months ended September 30, 2023 and 2022 was $11.6 million and $12.1 million, respectively. Both periods reflect Bank Owned Life Insurance (“BOLI”) proceeds of $1.4 million in 2023 and $2.5 million in 2022.

    Non-Interest Expense

    Non-interest expense for the three months ended September 30, 2023, was $32.3 million compared to $31.5 million in 2022.

    Efficiency Ratio

    The Corporation’s efficiency ratio was 59.57% for the quarter ending September 30, 2023, versus 55.72% for the same period in 2022.

    Income Taxes

    Income tax expense for the three months ended September 30, 2023, was $3.0 million versus $4.6 million for the same period in 2022. The effective tax rate for 2023 was 17.37% compared to 20.61% for 2022. The decrease in tax expense is due to a non-taxable gain on BOLI claim proceeds and an adjustment to tax credit investments.

    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  Nine Months Ended
      September 30,  June 30, September 30,  September 30,  September 30, 
         2023    2023    2022    2023    2022 
    END OF PERIOD BALANCES               
    Assets $4,784,806 $4,877,231 $5,009,339 $4,784,806 $5,009,339 
    Deposits $4,040,995 $4,063,155 $4,407,506 $4,040,995 $4,407,506 
    Loans, including net deferred loan costs $3,117,626 $3,126,676 $2,970,475 $3,117,626 $2,970,475 
    Allowance for Credit Losses $39,034 $39,907 $39,495 $39,034 $39,495 
    Total Equity $470,168 $496,888 $438,626 $470,168 $438,626 
    Tangible Common Equity (a) $377,367 $403,824 $344,617 $377,367 $344,617 
                    
    AVERAGE BALANCES                    
    Total Assets $4,814,251 $4,818,760 $5,048,849 $4,828,165 $5,081,779 
    Earning Assets $4,575,996 $4,581,652 $4,774,080 $4,590,258 $4,837,110 
    Investments $1,351,433 $1,395,446 $1,436,179 $1,384,941 $1,445,657 
    Loans $3,147,317 $3,097,836 $2,917,457 $3,104,623 $2,840,103 
    Total Deposits $4,000,302 $4,121,097 $4,406,187 $4,124,520 $4,416,845 
    Interest-Bearing Deposits $3,222,633 $3,297,110 $3,515,568 $3,309,111 $3,520,152 
    Interest-Bearing Liabilities $309,948 $185,318 $95,098 $197,142 $101,442 
    Total Equity $493,764 $501,686 $481,225 $494,428 $513,527 
                    
    INCOME STATEMENT DATA                    
    Net Interest Income $41,150 $42,187 $43,104 $127,672 $121,384 
    Net Interest Income Fully Tax Equivalent (b) $42,539 $43,581 $44,402 $131,774 $124,975 
    Provision for Credit Losses $1,200 $1,800 $1,050 $4,800 $(4,750)
    Non-interest Income $11,627 $10,453 $12,140 $31,455 $36,148 
    Non-interest Expense $32,265 $31,346 $31,504 $95,932 $93,522 
    Net Income $16,285 $15,987 $18,051 $48,252 $54,588 
                    
    PER SHARE DATA                    
    Basic and Diluted Net Income Per Common Share $1.37 $1.33 $1.50 $4.02 $4.45 
    Cash Dividends Declared Per Common Share $— $0.54 $— $0.54 $0.54 
    Book Value Per Common Share $40.00 $41.47 $36.49 $40.00 $36.49 
    Tangible Book Value Per Common Share (c) $33.69 $33.99 $33.27 $32.10 $28.67 
    Basic Weighted Average Common Shares Outstanding  11,901  12,022  12,029  11,993  12,270 


    (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  Nine Months Ended  
      September 30,     June 30,    September 30,     September 30,     September 30,  
      2023       2023       2022       2023       2022 
    Return on average assets 1.35%1.34%1.43%1.33%1.43%
    Return on average common shareholder's equity 13.19%12.75%15.00%12.98%14.14%
    Efficiency ratio 59.57%58.01%55.72%58.77%58.04%
    Average equity to average assets 10.26%10.48%9.53%10.24%10.11%
    Net interest margin (a) 3.74%3.81%3.71%3.83%3.44%
    Net charge-offs to average loans and leases 0.24%0.20%0.19%0.24%0.19%
    Credit loss reserve to loans and leases 1.25%1.28%1.33%1.25%1.33%
    Credit loss reserve to nonperforming loans 310.19%300.10%382.26%310.19%382.26%
    Nonperforming loans to loans and leases 0.40%0.43%0.35%0.40%0.35%
    Tier 1 leverage 11.72%11.49%10.33%11.72%10.33%
    Risk-based capital - Tier 1 14.61%14.44%13.69%14.61%13.69%


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

                    
    Asset Quality Three Months Ended  Nine Months Ended
         September 30,     June 30,    September 30,     September 30,     September 30, 
      2023 2023 2022 2023 2022
    Accruing loans and leases past due 30-89 days $15,961 $15,583 $18,626 $15,961 $18,626
    Accruing loans and leases past due 90 days or more $1,370 $682 $1,185 $1,370 $1,185
    Nonaccrual loans and leases $11,214 $12,616 $9,147 $11,214 $9,147
    Other real estate owned $63 $90 $214 $63 $214
    Nonperforming loans and other real estate owned $12,647 $13,388 $10,546 $12,647 $10,546
    Total nonperforming assets $15,671 $16,302 $13,657 $15,671 $13,657
    Gross charge-offs $3,601 $3,543 $5,653 $11,520 $11,318
    Recoveries $1,528 $2,030 $2,630 $5,975 $7,258
    Net charge-offs/(recoveries) $2,073 $1,513 $3,023 $5,545 $4,060


           
    Non-GAAP Reconciliations Three Months Ended September 30, 
         2023    2022
    ($in thousands, except EPS)      
    Income before Income Taxes $19,312 $22,690
    Provision for credit losses  1,200  1,050
    Provision for unfunded commitments  —  —
    Pre-tax, Pre-provision Income $20,512 $23,740


           
    Non-GAAP Reconciliations Nine Months Ended September 30, 
         2023     2022 
    ($ in thousands, except EPS)      
    Income before Income Taxes $58,395  $68,760 
    Provision for credit losses  4,800   (4,750)
    Provision for unfunded commitments  (100)  (850)
    Pre-tax, Pre-provision Income $63,095  $63,160 

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

           
         September 30,     December 31, 
      2023  2022 
      (unaudited)
    ASSETS      
    Cash and due from banks $74,668  $222,517 
    Federal funds sold  688   9,374 
    Securities available-for-sale  1,225,219   1,330,481 
    Loans:       
    Commercial  1,775,004   1,798,260 
    Residential  687,069   673,464 
    Consumer  647,658   588,539 
       3,109,731   3,060,263 
    (Less) plus:        
    Net deferred loan costs  7,895   7,175 
    Allowance for credit losses  (39,034)  (39,779)
       3,078,592   3,027,659 
    Restricted stock  15,398   15,378 
    Accrued interest receivable  22,546   21,288 
    Premises and equipment, net  67,424   66,147 
    Bank-owned life insurance  113,684   115,704 
    Goodwill  86,985   86,985 
    Other intangible assets  5,816   6,714 
    Other real estate owned  63   337 
    Other assets  93,723   86,697 
    TOTAL ASSETS $4,784,806  $4,989,281 
           
    LIABILITIES AND SHAREHOLDERS’ EQUITY        
    Deposits:        
    Non-interest-bearing $770,511  $857,920 
    Interest-bearing:       
    Certificates of deposit exceeding the FDIC insurance limits  82,741   50,608 
    Other interest-bearing deposits  3,187,743   3,460,343 
       4,040,995   4,368,871 
    Short-term borrowings  132,734   70,875 
    FHLB advances  84,578   9,589 
    Other liabilities  56,331   64,653 
    TOTAL LIABILITIES  4,314,638   4,513,988 
           
    Shareholders’ equity        
    Common stock, $.125 stated value per share;        
    Authorized shares-40,000,000        
    Issued shares-16,137,220 in 2023 and 16,114,992 in 2022        
    Outstanding shares-11,754,528 in 2023 and 12,051,964 in 2022  2,014   2,012 
    Additional paid-in capital  143,855   143,185 
    Retained earnings  656,610   614,829 
    Accumulated other comprehensive income/(loss)  (176,038)  (139,974)
    Less: Treasury shares at cost-4,382,692 in 2023 and 4,063,028 in 2022  (156,273)  (144,759)
    TOTAL SHAREHOLDERS’ EQUITY  470,168   475,293 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $4,784,806  $4,989,281 

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

                 
      Three Months Ended  Nine Months Ended
      September 30,  September 30, 
         2023     2022     2023     2022 
            (unaudited)
    INTEREST INCOME:            
    Loans, including related fees $49,146  $38,021  $140,220  $104,683 
    Securities:              
    Taxable  6,164   7,327   18,631   17,958 
    Tax-exempt  2,661   2,562   7,937   7,402 
    Other  752   336   2,864   1,059 
    TOTAL INTEREST INCOME  58,723   48,246   169,652   131,102 
    INTEREST EXPENSE:                
    Deposits  13,627   4,644   35,111   8,793 
    Short-term borrowings  1,923   418   4,025   676 
    Other borrowings  2,023   80   2,844   249 
    TOTAL INTEREST EXPENSE  17,573   5,142   41,980   9,718 
    NET INTEREST INCOME  41,150   43,104   127,672   121,384 
    Provision for credit losses  1,200   1,050   4,800   (4,750)
    NET INTEREST INCOME AFTER PROVISION                
    FOR LOAN LOSSES  39,950   42,054   122,872   126,134 
    NON-INTEREST INCOME:               
    Trust and financial services  1,140   1,015   3,642   3,687 
    Service charges and fees on deposit accounts  7,099   6,965   20,971   20,698 
    Other service charges and fees  213   160   613   488 
    Securities gains (losses), net  —   —   —   5 
    Interchange income  —   149   47   418 
    Loan servicing fees  447   457   997   1,184 
    Gain on sales of mortgage loans  321   440   811   1,705 
    Other  2,407   2,954   4,374   7,963 
    TOTAL NON-INTEREST INCOME  11,627   12,140   31,455   36,148 
    NON-INTEREST EXPENSE:                
    Salaries and employee benefits  17,159   15,943   51,263   48,953 
    Occupancy expense  2,389   2,525   7,120   7,419 
    Equipment expense  3,580   3,311   10,404   9,177 
    FDIC Expense  613   556   1,977   1,526 
    Other  8,524   9,169   25,168   26,447 
    TOTAL NON-INTEREST EXPENSE  32,265   31,504   95,932   93,522 
    INCOME BEFORE INCOME TAXES  19,312   22,690   58,395   68,760 
    Provision for income taxes  3,027   4,639   10,143   14,172 
    NET INCOME  16,285   18,051   48,252   54,588 
    OTHER COMPREHENSIVE INCOME (LOSS)                
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes  (34,934)  (41,060)  (36,504)  (165,893)
    Change in funded status of post retirement benefits, net of taxes  146   315   440   944 
    COMPREHENSIVE INCOME (LOSS) $(18,503) $(22,694) $12,188  $(110,361)
    PER SHARE DATA                
    Basic and Diluted Earnings per Share $1.37  $1.50  $4.02  $4.45 
    Weighted average number of shares outstanding (in thousands)  11,901   12,029   11,993   12,270 

     


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