FIRST FINANCIAL CORP /IN/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 27, 2016

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News Release
 
FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
 
 
For more information contact:
April 27, 2016
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 2016. Net income for the three months ending March 31, 2016 increased 76.2% to $13.68 million compared to $7.76 million for the same period of 2015. The increase included an after-tax gain on the sale of the Corporation’s insurance subsidiary of $5.84 million. Diluted net income per common share increased 80.0% to $1.08 from $0.60 for the comparable period of 2015.

Return on assets for the three months ended March 31, 2016 was 1.85% compared to 1.04% for the three months ended March 31, 2015.

Total loans outstanding increased $7.1 million, or .40%, from $1.76 billion as of March 31, 2015 to $1.76 billion as of March 31, 2016. On a linked quarter basis, average total loans increased $8.6 million, or .49%, from $1.75 billion for the quarter ending December 31, 2015.

Total deposits decreased $63.4 million or 2.57% from $2.46 billion as of March 31, 2015 to $2.40 billion as of March 31, 2016.

The company’s tangible common equity to tangible asset ratio was 12.92% at March 31, 2016, compared to 12.39% at March 31, 2015.

Net interest income for the first quarter of 2016 was $26.2 million, an increase of .62% over the $26.0 million reported for the same period of 2015. The net interest margin for the quarter ended March 31, 2016 increased to 4.06% from the 4.01% reported at March 31, 2015.

Asset quality remains strong with nonperforming loans decreasing 22.67% to $23.6 million as of March 31, 2016 versus $30.5 million as of March 31, 2015. The ratio of nonperforming loans to total loans and leases also decreased to 1.50% as of March 31, 2016 versus 1.97% as of March 31, 2015.

The provision for loan losses for the three months ended March 31, 2016 was $835 thousand compared to the $1.45 million provision for the first quarter of 2015. Net charge-offs were $855 thousand for the first quarter of 2016 compared to $938 thousand in the same period of 2015. The Corporation’s allowance for loan losses as of March 31, 2016 was $19.9 million compared to $19.4 million as of March 31, 2015. The allowance for loan losses as a percent of total loans was 1.13% as of March 31, 2016 compared to 1.10% as of March 31, 2015.

Non-interest income for the three months ended March 31, 2016 and 2015 was $21.5 and $10.1 million, respectively, a 113.54% increase. The gain on the sale of the Corporation’s insurance subsidiary increased non-interest income $13.0 million. Other income without this gain is down primarily due to the recognition of unrealized loss on other real estate written down to updated appraised values.

Service charges on deposits increased $178 thousand over the same period in 2015 and other service charges and fees increased $162 thousand.

Non-interest expense for the three months ended March 31, 2016 decreased $1.53 million to $22.5 million compared to $24.0 million in 2015. On a linked quarter basis, non-interest expense decreased $2.48 million from $24.9 million for the quarter ended December 31, 2015. On a year-over-year basis, salaries and employee benefits decreased $1.46 million driven by lower health insurance and pension expense. The Corporation’s efficiency ratio was 45.68% for the quarter ending March 31, 2016 versus 63.78% for the same period in 2015.
    




Book value per share was $33.58 at March 31, 2016, a 6.33% increase from the $31.58 at March 31, 2015. Average shareholders’ equity increased 3.38% to $415.0 million from $401.4 million on March 31, 2015.

Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our first quarter of 2016 results. We saw improvement in our interest income, interest expense, lower credit costs, most areas of non-interest income, and reduced non-interest expense. It was a solid quarter for First Financial.”
    
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,
 
 
2016
2015
2015
END OF PERIOD BALANCES
 
 
 
 
    Assets
 
$
2,939,240

$
2,979,585

$
2,995.836

    Deposits
 
2,400,655

2,442,369

2,463.949

    Loans
 
1,763,659

1,763,808

1,756,604

    Allowance for Loan Losses
 
19,926

19,946

19,351

    Total Equity
 
411,912

410,316

409,027

    Tangible Common Equity
 
375,000

367,649

365,853

 
 
 
 
 
AVERAGE BALANCES
 

 
 
    Total Assets
 
2,959,007

2,974,567

2,988,154

    Earning Assets
 
2,724,926

2,735,328

2,748,730

    Investments
 
955,996

950,245

969,315

    Loans
 
1,757,811

1,749,261

1,760,524

    Total Deposits
 
2,418,668

2,443,478

2,461,400

    Interest-Bearing Deposits
 
1,873,070

1,889,350

1,917,509

    Interest-Bearing Borrowings
 
46,026

41,269

44,789

    Total Equity
 
414,974

408,730

401,423

 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
    Net Interest Income
 
26,157

26,012

25,995

    Net Interest Income Fully Tax Equivalent
 
27,692

27,561

27,559

    Provision for Loan Losses
 
835

1,050

1,450

    Non-interest Income
 
21,484

9,389

10,061

    Non-interest Expense
 
22,465

24,943

23,993

    Net Income
 
13,675

7,114

7,761

 
 
 
 
 
PER SHARE DATA
 
 
 
 
    Basic and Diluted Net Income Per Common Share
 
1.08

0.56

0.60

    Cash Dividends Declared Per Common Share
 
—

0.49

—

    Book Value Per Common Share
 
33.58

32.21

31.58

    Tangible Book Value Per Common Share
 
30.57

28.86

28.27

    Basic Weighted Average Common Shares Outstanding
 
12,646

12,722

12,948

 
 
 
 
 






















Key Ratios
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2016
2015
2015
Return on average assets
 
1.85
%
0.96
%
1.04
%
Return on average common shareholder's equity
 
13.28
%
6.96
%
7.73
%
Efficiency ratio
 
45.68
%
67.51
%
63.78
%
Average equity to average assets
 
13.92
%
13.74
%
13.43
%
Net interest margin
 
4.06
%
4.04
%
4.01
%
Net charge-offs to average loans and leases
 
0.19
%
0.20
%
0.21
%
Loan and lease loss reserve to loans and leases
 
1.13
%
1.13
%
1.10
%
Loan and lease loss reserve to nonperforming loans
 
84.38
%
78.35
%
63.37
%
Nonperforming loans to loans
 
1.50
%
1.46
%
1.97
%
Tier 1 leverage
 
13.05
%
12.92
%
12.74
%
Risk-based capital - Tier 1
 
17.81
%
17.69
%
17.64
%


Asset Quality
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2016
2015
2015
Accruing loans and leases past due 30-89 days
 
$
7,292

$
12,294

$
7,159

Accruing loans and leases past due 90 days or more
 
$
858

$
964

$
640

Nonaccrual loans and leases
 
$
13,248

$
14,634

$
14,868

Nonperforming loans
 
$
23,615

$
25,458

$
30,536

Other real estate owned
 
$
2,850

$
3,466

$
3,830

Total nonperforming assets
 
$
39,617

$
43,799

$
49,353

Total troubled debt restructurings
 
$
9,509

$
9,860

$
15,027

Gross charge-offs
 
$
1,640

$
1,931

$
1,823

Recoveries
 
$
785

$
902

$
885

Net charge-offs/(recoveries)
 
$
855

$
1,029

$
938





















CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
 
March 31,
2016
 
December 31,
2015
 
   (unaudited)
ASSETS
 

 
 

Cash and due from banks
$
66,125

 
$
88,695

Federal funds sold
6,444

 
9,815

Securities available-for-sale
884,176

 
891,082

Loans:
 

 
 

Commercial
1,047,599

 
1,043,980

Residential
436,873

 
444,447

Consumer
276,471

 
272,896

 
1,760,943

 
1,761,323

(Less) plus:
 

 
 

Net deferred loan costs
2,716

 
2,485

Allowance for loan losses
(19,926
)
 
(19,946
)
 
1,743,733

 
1,743,862

Restricted stock
10,838

 
10,838

Accrued interest receivable
11,907

 
11,733

Premises and equipment, net
50,394

 
50,531

Bank-owned life insurance
82,673

 
82,323

Goodwill
34,355

 
39,489

Other intangible assets
2,557

 
3,178

Other real estate owned
2,850

 
3,466

Other assets
43,188

 
44,573

TOTAL ASSETS
$
2,939,240

 
$
2,979,585

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 

 
 

Deposits:
 

 
 

Non-interest-bearing
$
512,961

 
$
563,302

Interest-bearing:
 

 
 

Certificates of deposit exceeding the FDIC insurance limits
46,817

 
46,753

Other interest-bearing deposits
1,840,877

 
1,832,314

 
2,400,655

 
2,442,369

Short-term borrowings
31,116

 
33,831

FHLB advances
12,252

 
12,677

Other liabilities
83,305

 
80,392

TOTAL LIABILITIES
2,527,328

 
2,569,269

 
 
 
 
Shareholders’ equity
 

 
 

Common stock, $.125 stated value per share;
 
 
 
Authorized shares-40,000,000
 
 
 
Issued shares-14,578,758 in 2016 and 14,557,815 in 2015
 
 
 
Outstanding shares-12,265,355 in 2016 and 12,740,018 in 2015
1,818

 
1,817

Additional paid-in capital
73,566

 
73,396

Retained earnings
409,308

 
395,633

Accumulated other comprehensive loss
(5,059
)
 
(9,401
)
Less: Treasury shares at cost-2,313,403 in 2016 and 1,817,797 in 2015
(67,721
)
 
(51,129
)
TOTAL SHAREHOLDERS’ EQUITY
411,912

 
410,316

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
2,939,240

 
$
2,979,585










CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
Three Months Ended 
 March 31,
 
2016
 
2015
 
(unaudited)
 
(unaudited)
INTEREST INCOME:
 

 
 

Loans, including related fees
$
21,184

 
$
20,807

Securities:
 

 
 

Taxable
3,831

 
4,061

Tax-exempt
1,822

 
1,779

Other
364

 
431

TOTAL INTEREST INCOME
27,201

 
27,078

INTEREST EXPENSE:
 

 
 

Deposits
987

 
1,020

Short-term borrowings
23

 
13

Other borrowings
34

 
50

TOTAL INTEREST EXPENSE
1,044

 
1,083

NET INTEREST INCOME
26,157

 
25,995

Provision for loan losses
835

 
1,450

NET INTEREST INCOME AFTER PROVISION
 

 
 

FOR LOAN LOSSES
25,322

 
24,545

NON-INTEREST INCOME:
 

 
 

Trust and financial services
1,334

 
1,492

Service charges and fees on deposit accounts
2,504

 
2,326

Other service charges and fees
3,000

 
2,838

Securities gains/(losses), net
3

 
4

Insurance commissions
1,390

 
1,553

Gain on sales of mortgage loans
404

 
359

Gain on sale of certain assets and liabilities of insurance brokerage operation
13,021

 
—

Other
(172
)
 
1,489

TOTAL NON-INTEREST INCOME
8,463

 
10,061

NON-INTEREST EXPENSE:
 

 
 

Salaries and employee benefits
13,595

 
15,058

Occupancy expense
1,731

 
1,864

Equipment expense
1,837

 
1,772

FDIC Expense
451

 
430

Other
4,851

 
4,869

TOTAL NON-INTEREST EXPENSE
22,465

 
23,993

INCOME BEFORE INCOME TAXES
24,341

 
10,613

Provision for income taxes
10,666

 
2,852

NET INCOME
13,675

 
7,761

OTHER COMPREHENSIVE INCOME
 

 
 

Change in unrealized gains/losses on securities, net of reclassifications and taxes
4,039

 
4,762

Change in funded status of post retirement benefits, net of taxes
304

 
2,464

COMPREHENSIVE INCOME
$
18,018

 
$
14,987

PER SHARE DATA
 

 
 

Basic and Diluted Earnings per Share
$
1.08

 
$
0.60

Weighted average number of shares outstanding (in thousands)
12,646

 
12,948



FIRST FINANCIAL CORP /IN/ Reports