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| 8-K - 8-K - FIRST FINANCIAL CORP /IN/ | thff-20210427.htm |
| News Release | |||||
FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
First Financial Corporation Reports First Quarter Results
Terre Haute, Indiana, April 27, 2021 – First Financial Corporation (NASDAQ:THFF) today announced results for the three months ending March 31, 2021:
For the quarter:
•Net income was $12.9 million compared to $12.2 million for the same period of 2020;
•Diluted net income per common share of $0.95 compared to $0.89 for the same period of 2020; and
•Return on average assets was 1.12% compared to 1.21% for the three months ended March 31, 2020.
“Despite the continued headwinds of the global pandemic and the varied restrictions of the four states in which we do business, we were able to deliver solid performance in the first quarter” said Norman L. Lowery, Chairman and Chief Executive Officer. “During the first quarter we reopened our branch office lobbies and we were able to assist many of our clients to participate in the second round of the Paycheck Protection Program.”
Average Total Loans
Average total loans for the first quarter of 2021 were $2.64 billion versus $2.64 billion for the comparable period in 2020.
Total Loans Outstanding
Total loans outstanding increased $24.3 million, from $2.62 billion as of March 31, 2020 to $2.65 billion as of March 31, 2021.
Average Total Deposits
Average total deposits for the quarter ended March 31, 2021, were $3.82 billion versus $3.27 billion as of March 31, 2020, an increase of $546 million or 16.70%.
Total Deposits
Total deposits were $3.91 billion as of March 31, 2021, compared to $3.29 billion as of March 31, 2020, an increase of $614 million or 18.66%. On a linked quarter basis, total deposits increased $149.4 million from $3.76 billion for the quarter ending December 31, 2020.
Book Value Per Share
Book Value per share was $44.20 at March 31, 2021, compared to $42.42 at March 31, 2020 a 4.21% increase.
Shareholder Equity
Shareholder equity at March 31, 2021, was $598.1 million compared to $581.8 million on March 31, 2020. During the quarter the Corporation repurchased 26,300 shares of its common stock.
Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 11.12% at March 31, 2021, compared to 12.41% at March 31, 2020.
Net Interest Income
Net interest income for the first quarter of 2021 was $34.9 million, compared to $36.4 million reported for the same period of 2020. The decrease was primarily driven by the 150 basis point interest rate reduction by the Federal Reserve in response to the COVID-19 pandemic.
Net Interest Margin
The net interest margin for the quarter ended March 31, 2021, was 3.27% compared to the 4.13% reported at March 31, 2020.
Nonperforming Loans
Nonperforming loans as of March 31, 2021, were $21.0 million versus $17.6 million as of March 31, 2020. The ratio of nonperforming loans to total loans and leases was 0.79% as of March 31, 2021, versus 0.67% as of March 31, 2020.
Credit Loss Provision
In the first three quarters of 2020 the provision was calculated using the incurred loss basis. Beginning in the fourth quarter 2020, the provision was calculated using the current expected credit loss accounting standard. The provision for credit losses for the three months ended March 31 2021, was $452 thousand compared to the $2.69 million provision for the first quarter of 2020.
Net Charge-Offs
Net charge-offs were $728 thousand for the first quarter of 2021 compared to $1.57 million in the same period of 2020.
Allowance for Credit Losses
In March 2020 due to the uncertainty surrounding the global pandemic and as provided by the Coronavirus Aid Relief and Economic Security Act the Corporation elected to delay the implementation of the Current Expected Credit Loss accounting standard. On December 31, 2020 the Corporation adopted ASU 2016-13 (topic 326), “Measurement of Credit Losses on Financial Instruments” commonly referenced as the Current Expected Credit Loss (“CECL”) model. CECL was retrospectively adopted on January 1, 2020.
The Corporation’s allowance for credit losses as of March 31, 2021, was $46.8 million compared to $21.1 million as of March 31, 2020. The increase is primarily related to the adoption of CECL. The allowance for credit losses as a percent of total loans was 1.77% as of March 31, 2021, compared to 0.80% as of March 31, 2020. The allowance as of March 31, 2021 was calculated using CECL. The allowance as of March 31, 2020 was calculated using the incurred loss method.
Non-Interest Income
Non-interest income for the three months ended March 31, 2021 and 2020 was $9.3 and $9.1 million, respectively.
Non-Interest Expense
Non-interest expense for the three months ended March 31, 2021, was $27.6 million compared to $27.6 million in 2020.
Efficiency Ratio
The Corporation’s efficiency ratio was 61.08% for the quarter ending March 31, 2021, versus 59.25% for the same period in 2020.
Income Taxes
Income tax expense for the three months ended March 31, 2021, was $3.2 million versus $3.0 million for the same period in 2020. The effective tax rate for the first quarter of 2021 was 20.10% compared to 19.87% for same period of 2020.
“First Financial continues to meet the financial needs of our customers,” Lowery stated. “I am very proud of our associates' and of their unwavering commitment to serve our customers in these challenging times.”
About First Financial Corporation
First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A. and The Morris Plan Company of Terre Haute, Inc. First Financial Bank N.A. is the fifth oldest national bank in the United States, operating 80 banking centers in Illinois, Indiana, Kentucky and Tennessee. The Morris Plan Company of Terre Haute, Inc. is a state industrial chartered financial institution operating one office in Terre Haute, Indiana. 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 | ||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| 2021 | 2020 | 2020 | ||||||||||||
| END OF PERIOD BALANCES | ||||||||||||||
| Assets | $ | 4,681,216 | $ | 4,557,544 | $ | 4,062,414 | ||||||||
| Deposits | $ | 3,905,348 | $ | 3,755,945 | $ | 3,291,231 | ||||||||
| Loans, including net deferred loan costs | $ | 2,646,937 | $ | 2,610,294 | $ | 2,622,637 | ||||||||
| Allowance for Credit Losses | $ | 46,776 | $ | 47,052 | $ | 21,063 | ||||||||
| Total Equity | $ | 598,112 | $ | 596,992 | $ | 581,771 | ||||||||
Tangible Common Equity (a) | $ | 510,981 | $ | 509,428 | $ | 492,943 | ||||||||
| AVERAGE BALANCES | ||||||||||||||
| Total Assets | $ | 4,600,750 | $ | 4,532,078 | $ | 4,022,789 | ||||||||
| Earning Assets | $ | 4,404,109 | $ | 3,736,217 | $ | 3,625,679 | ||||||||
| Investments | $ | 1,133,439 | $ | 1,058,925 | $ | 988,523 | ||||||||
| Loans | $ | 2,640,291 | $ | 2,676,041 | $ | 2,637,036 | ||||||||
| Total Deposits | $ | 3,816,705 | $ | 3,741,155 | $ | 3,270,627 | ||||||||
| Interest-Bearing Deposits | $ | 3,059,290 | $ | 3,005,337 | $ | 2,739,394 | ||||||||
| Interest-Bearing Liabilities | $ | 110,448 | $ | 98,922 | $ | 106,843 | ||||||||
| Total Equity | $ | 600,669 | $ | 610,879 | $ | 569,696 | ||||||||
| INCOME STATEMENT DATA | ||||||||||||||
| Net Interest Income | $ | 34,913 | $ | 37,570 | $ | 36,350 | ||||||||
Net Interest Income Fully Tax Equivalent (b) | $ | 35,959 | $ | 38,606 | $ | 37,409 | ||||||||
| Provision for Credit Losses | $ | 452 | $ | 448 | $ | 2,690 | ||||||||
| Non-interest Income | $ | 9,294 | $ | 12,866 | $ | 9,095 | ||||||||
| Non-interest Expense | $ | 27,639 | $ | 31,191 | $ | 27,554 | ||||||||
| Net Income | $ | 12,877 | $ | 15,739 | $ | 12,181 | ||||||||
| PER SHARE DATA | ||||||||||||||
| Basic and Diluted Net Income Per Common Share | $ | 0.95 | $ | 1.15 | $ | 0.89 | ||||||||
| Cash Dividends Declared Per Common Share | $ | — | $ | 0.53 | $ | — | ||||||||
| Book Value Per Common Share | $ | 44.20 | $ | 44.03 | $ | 42.42 | ||||||||
Tangible Book Value Per Common Share (c) | $ | 37.76 | $ | 37.64 | $ | 35.94 | ||||||||
| Basic Weighted Average Common Shares Outstanding | 13,533 | 13,695 | 13,740 | |||||||||||
(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 | |||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| 2021 | 2020 | 2020 | ||||||||||||
| Return on average assets | 1.12 | % | 1.39 | % | 1.21 | % | ||||||||
| Return on average common shareholder's equity | 8.58 | % | 10.31 | % | 8.55 | % | ||||||||
| Efficiency ratio | 61.08 | % | 60.60 | % | 59.25 | % | ||||||||
| Average equity to average assets | 13.06 | % | 13.48 | % | 14.16 | % | ||||||||
Net interest margin (a) | 3.27 | % | 4.11 | % | 4.13 | % | ||||||||
| Net charge-offs to average loans and leases | 0.11 | % | 0.05 | % | 0.24 | % | ||||||||
| Credit loss reserve to loans and leases | 1.77 | % | 1.80 | % | 0.80 | % | ||||||||
| Credit loss reserve to nonperforming loans | 222.64 | % | 214.88 | % | 119.70 | % | ||||||||
| Nonperforming loans to loans and leases | 0.79 | % | 0.84 | % | 0.67 | % | ||||||||
| Tier 1 leverage | 11.34 | % | 11.24 | % | 12.38 | % | ||||||||
| Risk-based capital - Tier 1 | 16.17 | % | 16.11 | % | 16.19 | % | ||||||||
(a) Net interest margin is calculated on a tax equivalent basis.
| Asset Quality | Three Months Ended | |||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| 2021 | 2020 | 2020 | ||||||||||||
| Accruing loans and leases past due 30-89 days | $ | 8,373 | $ | 17,309 | $ | 27,037 | ||||||||
| Accruing loans and leases past due 90 days or more | $ | 2,001 | $ | 2,324 | $ | 1,430 | ||||||||
| Nonaccrual loans and leases | $ | 14,545 | $ | 15,367 | $ | 12,011 | ||||||||
| Total troubled debt restructuring | $ | 4,464 | $ | 4,206 | $ | 4,156 | ||||||||
| Other real estate owned | $ | 942 | $ | 1,012 | $ | 3,894 | ||||||||
| Nonperforming loans and other real estate owned | $ | 21,952 | $ | 22,909 | $ | 21,491 | ||||||||
| Total nonperforming assets | $ | 25,280 | $ | 26,045 | $ | 24,724 | ||||||||
| Gross charge-offs | $ | 2,338 | $ | 1,954 | $ | 2,904 | ||||||||
| Recoveries | $ | 1,610 | $ | 1,538 | $ | 1,334 | ||||||||
| Net charge-offs/(recoveries) | $ | 728 | $ | 416 | $ | 1,570 | ||||||||
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
| March 31, 2021 | December 31, 2020 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 666,846 | $ | 657,470 | |||||||
| Federal funds sold | 585 | 301 | |||||||||
| Securities available-for-sale | 1,097,093 | 1,020,744 | |||||||||
| Loans: | |||||||||||
| Commercial | 1,571,142 | 1,521,711 | |||||||||
| Residential | 592,053 | 604,652 | |||||||||
| Consumer | 477,633 | 479,750 | |||||||||
| 2,640,828 | 2,606,113 | ||||||||||
| (Less) plus: | |||||||||||
| Net deferred loan costs | 6,109 | 4,181 | |||||||||
| Allowance for credit losses | (46,776) | (47,052) | |||||||||
| 2,600,161 | 2,563,242 | ||||||||||
| Restricted stock | 14,825 | 14,812 | |||||||||
| Accrued interest receivable | 15,465 | 16,957 | |||||||||
| Premises and equipment, net | 62,584 | 62,063 | |||||||||
| Bank-owned life insurance | 96,184 | 95,849 | |||||||||
| Goodwill | 78,592 | 78,592 | |||||||||
| Other intangible assets | 8,539 | 8,972 | |||||||||
| Other real estate owned | 942 | 1,012 | |||||||||
| Other assets | 39,400 | 37,530 | |||||||||
| TOTAL ASSETS | $ | 4,681,216 | $ | 4,557,544 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Deposits: | |||||||||||
| Non-interest-bearing | $ | 805,645 | $ | 732,694 | |||||||
| Interest-bearing: | |||||||||||
| Certificates of deposit exceeding the FDIC insurance limits | 118,162 | 107,764 | |||||||||
| Other interest-bearing deposits | 2,981,541 | 2,915,487 | |||||||||
| 3,905,348 | 3,755,945 | ||||||||||
| Short-term borrowings | 98,775 | 116,061 | |||||||||
| FHLB advances | 5,874 | 5,859 | |||||||||
| Other liabilities | 73,107 | 82,687 | |||||||||
| TOTAL LIABILITIES | 4,083,104 | 3,960,552 | |||||||||
| Shareholders’ equity | |||||||||||
| Common stock, $.125 stated value per share; | |||||||||||
| Authorized shares-40,000,000 | |||||||||||
| Issued shares-16,075,154 in 2021 and 16,075,154 in 2020 | |||||||||||
| Outstanding shares-13,530,570 in 2021 and 13,558,511 in 2020 | 2,008 | 2,007 | |||||||||
| Additional paid-in capital | 141,024 | 140,820 | |||||||||
| Retained earnings | 533,980 | 521,103 | |||||||||
| Accumulated other comprehensive income/(loss) | (832) | 9,764 | |||||||||
| Less: Treasury shares at cost-2,551,084 in 2021 and 2,516,643 in 2020 | (78,068) | (76,702) | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 598,112 | 596,992 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 4,681,216 | $ | 4,557,544 | |||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| (unaudited) | |||||||||||
| INTEREST INCOME: | |||||||||||
| Loans, including related fees | $ | 31,857 | $ | 35,034 | |||||||
| Securities: | |||||||||||
| Taxable | 3,079 | 4,029 | |||||||||
| Tax-exempt | 2,074 | 1,938 | |||||||||
| Other | 346 | 402 | |||||||||
| TOTAL INTEREST INCOME | 37,356 | 41,403 | |||||||||
| INTEREST EXPENSE: | |||||||||||
| Deposits | 2,286 | 4,530 | |||||||||
| Short-term borrowings | 98 | 267 | |||||||||
| Other borrowings | 59 | 256 | |||||||||
| TOTAL INTEREST EXPENSE | 2,443 | 5,053 | |||||||||
| NET INTEREST INCOME | 34,913 | 36,350 | |||||||||
| Provision for credit losses | 452 | 2,690 | |||||||||
| NET INTEREST INCOME AFTER PROVISION | |||||||||||
| FOR LOAN LOSSES | 34,461 | 33,660 | |||||||||
| NON-INTEREST INCOME: | |||||||||||
| Trust and financial services | 1,305 | 1,534 | |||||||||
| Service charges and fees on deposit accounts | 2,243 | 2,998 | |||||||||
| Other service charges and fees | 4,242 | 3,330 | |||||||||
| Securities gains (losses), net | (152) | 194 | |||||||||
| Gain on sales of mortgage loans | 1,393 | 698 | |||||||||
| Other | 263 | 341 | |||||||||
| TOTAL NON-INTEREST INCOME | 9,294 | 9,095 | |||||||||
| NON-INTEREST EXPENSE: | |||||||||||
| Salaries and employee benefits | 15,677 | 15,972 | |||||||||
| Occupancy expense | 2,149 | 1,929 | |||||||||
| Equipment expense | 2,578 | 2,461 | |||||||||
| FDIC Expense | 298 | (230) | |||||||||
| Other | 6,937 | 7,422 | |||||||||
| TOTAL NON-INTEREST EXPENSE | 27,639 | 27,554 | |||||||||
| INCOME BEFORE INCOME TAXES | 16,116 | 15,201 | |||||||||
| Provision for income taxes | 3,239 | 3,020 | |||||||||
| NET INCOME | 12,877 | 12,181 | |||||||||
| OTHER COMPREHENSIVE INCOME | |||||||||||
| Change in unrealized gains/(losses) on securities, net of reclassifications and taxes | (11,068) | 13,098 | |||||||||
| Change in funded status of post retirement benefits, net of taxes | 472 | 404 | |||||||||
| COMPREHENSIVE INCOME | $ | 2,281 | $ | 25,683 | |||||||
| PER SHARE DATA | |||||||||||
| Basic and Diluted Earnings per Share | $ | 0.95 | $ | 0.89 | |||||||
| Weighted average number of shares outstanding (in thousands) | 13,533 | 13,740 | |||||||||