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| 8-K - 8-K - FIRST FINANCIAL CORP /IN/ | thff2015-3x31er8xk.htm |
News Release | |
FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
For more information contact: | |
April 29, 2015 | Rodger A. McHargue at (812) 238-6334 |
First Financial Corporation reports 1st Quarter results
TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2015. Net income for the three months ending March 31, 2015 was $7.76 million compared to $7.83 million for the same period of 2014. Diluted net income per common share increased 1.69% to $0.60 from $0.59 for the comparable period of 2014.
Return on assets for the three months ended March 31, 2015 was 1.04% compared to 1.03% for the three months ended March 31, 2014.
Average total loans for the first quarter of 2015 were $1.76 billion versus the $1.78 billion for the comparable period in 2014, a decrease of $22.3 million or 1.25%. Total loans outstanding decreased $29.5 million, or 1.66%, from $1.78 billion as of March 31, 2014 to $1.76 billion as of March 31, 2015. On a linked quarter basis, average total loans decreased $34.7 million, or 1.93%, from $1.80 billion for the quarter ending December 31, 2014 primarily due to payoffs in the 4th quarter related to the sale of businesses.
Average total deposits for the quarter ended March 31, 2015 were $2.46 billion versus $2.49 billion as of March 31, 2014, a decrease of 1.23%. Non-interest bearing deposits, however, increased 4.98% while interest-bearing deposits decreased 2.87%.
The company’s tangible common equity to tangible asset ratio was 12.39% at March 31, 2015, compared to 11.89% at March 31, 2014.
Due to the prolonged low interest rate environment, net interest income for the first quarter of 2015 was $26.0 million, a decrease of 4.23% over the $27.1 million reported for the same period of 2014. The net interest margin for the quarter ended March 31, 2015 decreased to 4.01% from the 4.10% reported at March 31, 2014.
Asset quality remains strong with nonperforming loans decreasing 13.59% to $34.7 million as of March 31, 2015 versus $40.1 million as of March 31, 2014. The ratio of nonperforming loans to total loans and leases also decreased to 1.97% as of March 31, 2015 versus 2.25% as of March 31, 2014.
The provision for loan losses for the three months ended March 31, 2015 was $1.45 million compared to the $1.96 million provision for the first quarter of 2014. Net charge-offs were $938 thousand for the first quarter of 2015 compared to $1.39 million in the same period of 2014. The Corporation’s allowance for loan losses as of March 31, 2015 was $19.4 million compared to $20.8 million as of March 31, 2014. The allowance for loan losses as a percent of total loans was 1.10% as of March 31, 2015 compared to 1.14% as of March 31, 2014.
Non-interest income for the three months ended March 31, 2015 and 2014 was $10.06 and $10.11 million, respectively. An increase in other non-interest income offset declines in service charges and fees on deposit accounts and insurance commissions.
Non-interest expense for the three months ended March 31, 2015 increased $288 thousand to $24.0 million compared to $23.7 million in 2014. On a linked quarter basis, non-interest expense increased $868 thousand from $23.1 million for the quarter ended December 31, 2014. On a year-over-year basis, salaries and employee benefits increased $962 thousand driven by normal merit increases and increased pension expense due in part to lower discount rates used in determining the liability as well as the use of the new RP-2014 Mortality Table. The pension plan was frozen for the majority of employees as of December 31, 2013. The Corporation’s efficiency ratio was 63.78% for the quarter ending March 31, 2015 versus 62.30% for the same period in 2014.
Book value per share was $31.58 at March 31, 2015, a 5.62% increase from the $29.90 at March 31, 2014. Shareholders’ equity increased 2.43% to $409.0 million from $399.3 million on March 31, 2014.
Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our performance in the first quarter of 2015. The continued improvement in our asset quality is a primary contributor to our success”.
First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana.
Three Months Ended | ||||||||||
March 31, | December 31, | March 31, | ||||||||
2015 | 2014 | 2014 | ||||||||
END OF PERIOD BALANCES | ||||||||||
Assets | $ | 2,995,836 | $ | 3,002,485 | $ | 3,032,542 | ||||
Deposits | $ | 2,463,949 | $ | 2,457,197 | $ | 2,507,014 | ||||
Loans | $ | 1,756,604 | $ | 1,781,428 | $ | 1,783,974 | ||||
Allowance for Loan Losses | $ | 19,351 | $ | 18,839 | $ | 20,408 | ||||
Total Equity | $ | 409,027 | $ | 394,214 | $ | 399,329 | ||||
Tangible Common Equity | $ | 365,853 | $ | 350,824 | $ | 326,493 | ||||
AVERAGE BALANCES | ||||||||||
Total Assets | $ | 2,988,154 | $ | 3,020,068 | $ | 3,031,289 | ||||
Earning Assets | $ | 2,748,730 | $ | 2,793,424 | $ | 2,794,831 | ||||
Investments | $ | 969,315 | $ | 986,606 | $ | 992,901 | ||||
Loans | $ | 1,760,524 | $ | 1,795,235 | $ | 1,782,838 | ||||
Total Deposits | $ | 2,461,400 | $ | 2,461,253 | $ | 2,492,170 | ||||
Interest-Bearing Deposits | $ | 1,917,509 | $ | 1,934,597 | $ | 1,974,088 | ||||
Interest-Bearing Liabilities | $ | 44,789 | $ | 100,512 | $ | 91,157 | ||||
Total Equity | $ | 401,423 | $ | 403,413 | $ | 396,459 | ||||
INCOME STATEMENT DATA | ||||||||||
Net Interest Income | $ | 25,995 | $ | 26,939 | $ | 27,142 | ||||
Net Interest Income Fully Tax Equivalent | $ | 27,559 | $ | 28,503 | $ | 28,665 | ||||
Provision for Loan Losses | $ | 1,450 | $ | 1,962 | $ | 1,960 | ||||
Non-interest Income | $ | 10,061 | $ | 10,615 | $ | 10,111 | ||||
Non-interest Expense | $ | 23,993 | $ | 23,125 | $ | 23,705 | ||||
Net Income | $ | 7,761 | $ | 9,181 | $ | 7,831 | ||||
PER SHARE DATA | ||||||||||
Basic and Diluted Net Income Per Common Share | $ | 0.60 | $ | 0.70 | $ | 0.59 | ||||
Cash Dividends Declared Per Common Share | $ | — | $ | 0.49 | $ | — | ||||
Book Value Per Common Share | $ | 31.58 | $ | 30.46 | $ | 29.90 | ||||
Tangible Book Value Per Common Share | $ | 28.27 | $ | 27.11 | $ | 26.60 | ||||
Basic Weighted Average Common Shares Outstanding | 12,948 | 12,932 | 13,349 | |||||||
Key Ratios | Three Months Ended | ||||||
March 31, | December 31, | March 31, | |||||
2015 | 2014 | 2014 | |||||
Return on average assets | 1.04 | % | 1.21 | % | 1.03 | % | |
Return on average common shareholder's equity | 7.73 | % | 8.91 | % | 7.90 | % | |
Efficiency ratio | 63.78 | % | 59.11 | % | 62.30 | % | |
Average equity to average assets | 13.43 | % | 13.62 | % | 13.08 | % | |
Net interest margin | 4.01 | % | 3.99 | % | 4.10 | % | |
Net charge-offs to average loans and leases | 0.21 | % | 0.35 | % | 0.31 | % | |
Loan and lease loss reserve to loans and leases | 1.10 | % | 1.01 | % | 1.14 | % | |
Loan and lease loss reserve to nonperforming loans and other real estate | 55.82 | % | 54.55 | % | 52.42 | % | |
Nonperforming loans to loans | 1.97 | % | 1.94 | % | 2.25 | % | |
Tier 1 leverage | 12.74 | % | 12.33 | % | 12.17 | % | |
Risk-based capital - Tier 1 | 17.64 | % | 16.99 | % | 16.63 | % | |
Asset Quality | Three Months Ended | |||||||||
March 31, | December 31, | March 31, | ||||||||
2015 | 2014 | 2014 | ||||||||
Accruing loans and leases past due 30-89 days | $ | 7,159 | $ | 13,444 | $ | 9,388 | ||||
Accruing loans and leases past due 90 days or more | $ | 640 | $ | 780 | $ | 1,153 | ||||
Nonaccrual loans and leases | $ | 14,868 | $ | 15,034 | $ | 19,798 | ||||
Nonperforming loans and other real estate | $ | 34,666 | $ | 34,537 | $ | 40,082 | ||||
Other real estate owned | $ | 3,830 | $ | 3,965 | $ | 4,806 | ||||
Total nonperforming assets | $ | 49,353 | $ | 49,639 | $ | 52,239 | ||||
Total troubled debt restructurings | $ | 15,028 | $ | 14,758 | $ | 14,325 | ||||
Gross charge-offs | $ | 1,823 | $ | 2,308 | $ | 2,161 | ||||
Recoveries | $ | 885 | $ | 1,690 | $ | 776 | ||||
Net charge-offs/(recoveries) | $ | 938 | $ | 618 | $ | 1,385 | ||||
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
March 31, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and due from banks | $ | 88,492 | $ | 78,102 | |||
Federal funds sold | 12,688 | 8,000 | |||||
Securities available-for-sale | 906,341 | 897,053 | |||||
Loans: | |||||||
Commercial | 1,041,694 | 1,044,522 | |||||
Residential | 448,842 | 469,172 | |||||
Consumer | 264,529 | 266,656 | |||||
1,755,065 | 1,780,350 | ||||||
(Less) plus: | |||||||
Net deferred loan costs | 1,539 | 1,078 | |||||
Allowance for loan losses | (19,351 | ) | (18,839 | ) | |||
1,737,253 | 1,762,589 | ||||||
Restricted Stock | 16,404 | 16,404 | |||||
Accrued interest receivable | 11,381 | 11,593 | |||||
Premises and equipment, net | 50,970 | 51,802 | |||||
Bank-owned life insurance | 81,149 | 80,730 | |||||
Goodwill | 39,489 | 39,489 | |||||
Other intangible assets | 3,685 | 3,901 | |||||
Other real estate owned | 3,830 | 3,965 | |||||
Other assets | 44,154 | 48,857 | |||||
TOTAL ASSETS | $ | 2,995,836 | $ | 3,002,485 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Deposits: | |||||||
Non-interest-bearing | $ | 537,686 | $ | 556,389 | |||
Interest-bearing: | |||||||
Certificates of deposit exceeding the FDIC insurance limits | 48,074 | 53,733 | |||||
Other interest-bearing deposits | 1,878,189 | 1,847,075 | |||||
2,463,949 | 2,457,197 | ||||||
Short-term borrowings | 28,462 | 48,015 | |||||
FHLB advances | 12,812 | 12,886 | |||||
Other liabilities | 81,586 | 90,173 | |||||
TOTAL LIABILITIES | 2,586,809 | 2,608,271 | |||||
Shareholders’ equity | |||||||
Common stock, $.125 stated value per share; | |||||||
Authorized shares-40,000,000 | |||||||
Issued shares-14,557,815 in 2015 and 14,538,132 in 2014 | |||||||
Outstanding shares-12,952,169 in 2015 and 12,942,175 in 2014 | 1,815 | 1,815 | |||||
Additional paid-in capital | 72,576 | 72,405 | |||||
Retained earnings | 385,731 | 377,970 | |||||
Accumulated other comprehensive loss | (7,303 | ) | (14,529 | ) | |||
Less: Treasury shares at cost-1,605,646 in 2015 and 1,595,957 in 2014 | (43,792 | ) | (43,447 | ) | |||
TOTAL SHAREHOLDERS’ EQUITY | 409,027 | 394,214 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,995,836 | $ | 3,002,485 | |||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(unaudited) | (unaudited) | ||||||
INTEREST INCOME: | |||||||
Loans, including related fees | $ | 20,807 | $ | 22,218 | |||
Securities: | |||||||
Taxable | 4,061 | 4,444 | |||||
Tax-exempt | 1,779 | 1,746 | |||||
Other | 431 | 416 | |||||
TOTAL INTEREST INCOME | 27,078 | 28,824 | |||||
INTEREST EXPENSE: | |||||||
Deposits | 1,020 | 1,290 | |||||
Short-term borrowings | 13 | 14 | |||||
Other borrowings | 50 | 378 | |||||
TOTAL INTEREST EXPENSE | 1,083 | 1,682 | |||||
NET INTEREST INCOME | 25,995 | 27,142 | |||||
Provision for loan losses | 1,450 | 1,960 | |||||
NET INTEREST INCOME AFTER PROVISION | |||||||
FOR LOAN LOSSES | 24,545 | 25,182 | |||||
NON-INTEREST INCOME: | |||||||
Trust and financial services | 1,492 | 1,489 | |||||
Service charges and fees on deposit accounts | 2,326 | 2,484 | |||||
Other service charges and fees | 2,838 | 2,839 | |||||
Securities gains/(losses), net | 4 | — | |||||
Insurance commissions | 1,553 | 1,913 | |||||
Gain on sales of mortgage loans | 359 | 376 | |||||
Other | 1,489 | 1,010 | |||||
TOTAL NON-INTEREST INCOME | 10,061 | 10,111 | |||||
NON-INTEREST EXPENSE: | |||||||
Salaries and employee benefits | 15,058 | 14,096 | |||||
Occupancy expense | 1,864 | 1,925 | |||||
Equipment expense | 1,772 | 1,658 | |||||
FDIC Expense | 430 | 487 | |||||
Other | 4,869 | 5,539 | |||||
TOTAL NON-INTEREST EXPENSE | 23,993 | 23,705 | |||||
INCOME BEFORE INCOME TAXES | 10,613 | 11,588 | |||||
Provision for income taxes | 2,852 | 3,757 | |||||
NET INCOME | 7,761 | 7,831 | |||||
OTHER COMPREHENSIVE INCOME | |||||||
Change in unrealized gains/losses on securities, net of reclassifications and taxes | 4,762 | 5,303 | |||||
Change in funded status of post retirement benefits, net of taxes | 2,464 | 115 | |||||
COMPREHENSIVE INCOME | $ | 14,987 | $ | 13,249 | |||
PER SHARE DATA | |||||||
Basic and Diluted Earnings per Share | $ | 0.60 | $ | 0.59 | |||
Weighted average number of shares outstanding (in thousands) | 12,948 | 13,349 | |||||