TERRE HAUTE, Ind., Oct. 25, 2019 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2019. Net income for the three months ending September 30, 2019 was $12.3 million compared to $11.3 million for the same period of 2018. Diluted net income per common share of $0.93 compared to $0.92 for the same period of 2018. Return on assets for the three months ended September 30, 2019 was 1.33% compared to 1.53% for the three months ended September 30, 2018. These quarterly comparisons include the Corporation's acquisition of HopFed Bancorp, Hopkinsville, Kentucky on July 27, 2019. Total assets acquired were $926 million, including $675 million in loans. The acquisition also included $736 million in deposits. Acquisition related expenses from the transaction are also included in the expenses in each quarterly comparison.

The Corporation further reported net income of $34.5 million for the nine months ended September 30, 2019 versus $35.5 million for the comparable period of 2018. The Corporation's 2018 results included a recovery of a security previously written down for other than temporary impairment which contributed $6.9 million to pre-tax income. Diluted net income per common share for the nine months ended September 30, 2019 was $2.74 versus $2.90 for the comparable period of 2018. Return on assets for the nine months ended September 30, 2019 was 1.42% compared to 1.59% for the nine months ended September 30, 2018.

Average total loans for the third quarter of 2019 were $2.47 billion versus $1.93 billion for the comparable period in 2018, an increase of $545.3 million or 28.3%, primarily due to the acquisition. Total loans outstanding increased $726.7 million, or 37.42%, from $1.94 billion as of September 30, 2018 to $2.67 billion as of September 30, 2019. On a linked quarter basis, average total loans increased $492.4 million from $1.98 billion for the quarter ending June 30, 2019.

Average total deposits for the quarter ended September 30, 2019 were $3.02 billion versus $2.44 billion as of September 30, 2018, primarily due to the acquisition. Total deposits were $3.22 billion as of September 30, 2019 compared to $2.41 billion as of September 30, 2018. On a linked quarter basis, average total deposits increased $552.9 million from $2.46 billion for the quarter ending June 30, 2019.

Book Value per share was $40.59 at September 30, 2019 compared to $34.91 at September 30, 2018. Shareholders equity at September 30, 2019 was $556.6 million compared to $427.8 million on September 30, 2018. The corporation’s tangible common equity to tangible asset ratio was 12.08% at September 30, 2019, compared to 13.31% at September 30, 2018.

Net interest income for the third quarter of 2019 was $34.0 million compared to $28.8 million reported for the same period of 2018. The net interest margin for the quarter ended September 30, 2019 was 4.04% compared to 4.29% reported at September 30, 2018.

Nonperforming loans as of September 30, 2019 were $14.4 million versus $16.2 million as of September 30, 2018. The ratio of nonperforming loans to total loans and leases was 0.54% as of September 30, 2019 versus 0.83% as of September 30, 2018.

Net charge-offs were $2.0 million for the third quarter of 2019 compared to $1.2 million in the same period of 2018. The Corporation’s allowance for loan losses as of September 30, 2019 was $19.8 million compared to $20.3 million as of September 30, 2018. The allowance for loan losses as a percent of total loans was 0.74% as of September 30, 2019 compared to 1.05% at September 30, 2018. Loans acquired from HopFed are recorded at fair value and therefore do not have an allowance recorded.

Non-interest income for the three months ended September 30, 2019 and 2018 was $9.7 million and $8.9 million, respectively. This included a $268 thousand increase in service charges on deposits, a $318 thousand increase in other service fees, and a $247 thousand increase in gains on the sale of mortgages.

Non-interest expense for the three months ended September 30, 2019 was $27.4 million compared to $22.3 million in 2018, which includes $1.6 million of expenses related to the acquisition of HopFed Bancorp. Also included is a $1.9 million increase in salaries, which is primarily attributed to the acquisition. The Corporation’s efficiency ratio was 61.18% for the quarter ending September 30, 2019 versus 57.54% for the same period in 2018.

Income tax expense for the three months ended September 30, 2019 was $2.6 million versus $2.7 million for the same period in 2018. The effective tax rate for 2019 was 18.82% compared to 20.11% for 2018.
               
Norman L. Lowery, President and Chief Executive Officer, commented, “During the third quarter, we completed our acquisition of HopFed Bancorp and Heritage Bank. We are extremely excited about the potential growth opportunities provided by these new markets.”

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana, Illinois, Kentucky, and Tennessee, and The Morris Plan Company of Terre Haute in Indiana.

 Three Months EndedSix Months Ended
 September 30,June 30,September 30,September 30,September 30,
 20192019201820192018
END OF PERIOD BALANCES     
Assets$3,988,119 $3,064,212 $2,980,935 $3,988,119 $2,980,935 
Deposits$3,220,122 $2,463,018 $2,407,061 $3,220,122 $2,407,061 
Loans, including net deferred loan costs$2,668,476 $2,010,198 $1,941,780 $2,668,476 $1,941,780 
Allowance for Loan Losses$19,799 $20,250 $20,301 $19,799 $20,301 
Total Equity$556,582 $477,820 $427,774 $556,582 $427,774 
Tangible Common Equity (a)$469,904 $442,496 $392,109 $469,904 $392,109 
      
AVERAGE BALANCES     
Total Assets$3,680,041 $3,033,788 $2,965,825 $3,239,295 $2,972,907 
Earning Assets$3,468,396 $2,836,110 $2,785,582 $3,043,010 $2,786,588 
Investments$995,092 $851,723 $857,624 $899,188 $866,694 
Loans$2,471,346 $1,978,991 $1,926,051 $2,140,890 $1,916,567 
Total Deposits$3,017,085 $2,464,212 $2,435,281 $2,636,487 $2,450,865 
Interest-Bearing Deposits$2,914,816 $2,032,886 $2,010,467 $2,315,658 $2,026,813 
Interest-Bearing Liabilities$113,019 $39,269 $49,808 $74,737 $46,274 
Total Equity$491,586 $471,156 $427,530 $471,136 $420,654 
      
INCOME STATEMENT DATA     
Net Interest Income$33,999 $29,752 $28,827 $93,177 $86,984 
Net Interest Income Fully Tax Equivalent (b)$35,054 $30,721 $29,841 $96,176 $89,988 
Provision for Loan Losses$1,500 $230 $1,470 $3,200 $4,298 
Non-interest Income$9,746 $9,743 $8,909 $27,125 $29,973 
Non-interest Expense$27,409 $23,492 $22,297 $74,594 $68,191 
Net Income$12,257 $12,569 $11,313 $34,508 $35,527 
      
PER SHARE DATA     
Basic and Diluted Net Income Per Common Share$0.93 $1.02 $0.92 $2.74 $2.9 
Cash Dividends Declared Per Common Share$— $0.52 $— $0.52 $0.51 
Book Value Per Common Share$40.59 $38.88 $34.91 $40.59 $34.91 
Tangible Book Value Per Common Share (c)$30.81 $35.46 $31.98 $34.27 $32.00 
Basic Weighted Average Common Shares Outstanding13,141 12,290 12,255 12,574 12,253 

(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 EndedSix Months Ended
 September 30,June 30,September 30,September 30,September 30,
 20192019201820192018
Return on average assets1.33%1.66%1.53%1.42%1.59%
Return on average common shareholder's equity9.97%10.67%10.58%9.74%11.23%
Efficiency ratio61.18%58.06%57.54%60.50%56.84%
Average equity to average assets13.36%15.53%14.42%14.54%14.15%
Net interest margin (a)4.04%4.33%4.29%4.21%4.31%
Net charge-offs to average loans and leases0.32%0.49%0.26%0.24%0.27%
Loan and lease loss reserve to loans and leases0.74%1.01%1.05%0.74%1.05%
Loan and lease loss reserve to nonperforming loans137.45%133.14%125.35%137.45%125.35%
Nonperforming loans to loans and leases0.54%0.76%0.83%0.54%0.83%
Tier 1 leverage13.07%14.83%14.45%13.07%14.45%
Risk-based capital - Tier 115.09%18.65%18.36%15.09%18.36%
(a) Net interest margin is calculated on a tax equivalent basis.


   
Asset QualityThree Months EndedSix Months Ended
 September 30,June 30,September 30,September 30,September 30,
 20192019201820192018
Accruing loans and leases past due 30-89 days$10,462 $8,296 $8,413 $10,462 $8,413 
Accruing loans and leases past due 90 days or more$744 $683 $1,314 $744 $1,314 
Nonaccrual loans and leases$9,533 $9,985 $10,035 $9,533 $10,035 
Total troubled debt restructuring$4,127 $4,541 $4,847 $4,127 $4,847 
Other real estate owned$3,717 $498 $520 $3,717 $520 
Nonperforming loans and other real estate owned$18,121 $15,707 $16,716 $18,121 $16,716 
Total nonperforming assets$21,725 $19,040 $20,139 $21,725 $20,139 
Gross charge-offs$2,926 $1,906 $2,348 $6,941 $6,692 
Recoveries$975 $966 $1,108 $3,104 $2,786 
Net charge-offs/(recoveries)$1,951 $940 $1,240 $3,837 $3,906 
                
                

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

 September 30,
 2019		 December 31,
 2018
    
 (unaudited)
ASSETS   
Cash and due from banks$80,193  $74,388 
Securities available-for-sale939,944  784,916 
Loans:   
Commercial1,583,002  1,166,352 
Residential708,056  443,670 
Consumer373,747  341,041 
 2,664,805  1,951,063 
(Less) plus:   
Net deferred loan costs3,671  2,925 
Allowance for loan losses(19,799) (20,436)
 2,648,677  1,933,552 
Restricted stock13,624  10,390 
Accrued interest receivable18,735  13,970 
Premises and equipment, net70,592  46,554 
Bank-owned life insurance97,810  86,186 
Goodwill75,417  34,355 
Other intangible assets11,261  1,197 
Other real estate owned3,717  603 
Other assets28,149  22,607 
TOTAL ASSETS$3,988,119  $3,008,718 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Deposits:   
Non-interest-bearing$560,537  $431,923 
Interest-bearing:   
Certificates of deposit exceeding the FDIC insurance limits130,270  42,284 
Other interest-bearing deposits2,529,315  1,962,520 
 3,220,122  2,436,727 
Short-term borrowings90,852  69,656 
Other liabilities74,788  59,634 
TOTAL LIABILITIES3,431,537  2,566,017 
    
Shareholders’ equity   
Common stock, $.125 stated value per share;   
Authorized shares-40,000,000   
Issued shares-16,055,466 in 2019 and 14,612,540 in 2018   
Outstanding shares-13,713,355 in 2019 and 12,278,295 in 20182,004  1,824 
Additional paid-in capital139,073  76,774 
Retained earnings484,834  456,716 
Accumulated other comprehensive income/(loss)145  (23,454)
Less: Treasury shares at cost-2,342,111 in 2019 and 2,334,245 in 2018(69,474) (69,159)
TOTAL SHAREHOLDERS’ EQUITY556,582  442,701 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$3,988,119  $3,008,718 
 
 

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

 Three Months Ended
September 30,		 Nine Months Ended
September 30,
 2019 2018 2019 2018
        
 (unaudited)
INTEREST INCOME:               
Loans, including related fees$33,363  $25,581  $87,650  $73,982 
Securities:       
Taxable3,907  3,601  11,104  13,141 
Tax-exempt1,959  1,873  5,699  5,573 
Other366  320  1,017  959 
TOTAL INTEREST INCOME39,595  31,375  105,470  93,655 
INTEREST EXPENSE:       
Deposits5,069  2,365  11,202  6,254 
Short-term borrowings305  167  786  354 
Other borrowings222  16  305  63 
TOTAL INTEREST EXPENSE5,596  2,548  12,293  6,671 
NET INTEREST INCOME33,999  28,827  93,177  86,984 
Provision for loan losses1,500  1,470  3,200  4,298 
NET INTEREST INCOME AFTER PROVISION       
FOR LOAN LOSSES32,499  27,357  89,977  82,686 
NON-INTEREST INCOME:       
Trust and financial services1,329  1,133  3,657  3,888 
Service charges and fees on deposit accounts3,227  3,002  8,586  8,733 
Other service charges and fees3,720  3,256  10,242  9,747 
Securities gains, net6  3  18  5 
Gain on sales of mortgage loans865  618  1,781  1,458 
Other599  897  2,841  6,142 
TOTAL NON-INTEREST INCOME9,746  8,909  27,125  29,973 
NON-INTEREST EXPENSE:       
Salaries and employee benefits14,031  12,485  39,332  38,028 
Occupancy expense1,804  1,894  5,432  5,308 
Equipment expense2,117  1,673  5,685  5,016 
FDIC Expense155  223  494  673 
Other9,302  6,022  23,651  19,166 
TOTAL NON-INTEREST EXPENSE27,409  22,297  74,594  68,191 
INCOME BEFORE INCOME TAXES14,836  13,969  42,508  44,468 
Provision for income taxes2,579  2,656  8,000  8,941 
NET INCOME12,257  11,313  34,508  35,527 
OTHER COMPREHENSIVE INCOME       
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes4,124  (3,702) 22,689  (15,585)
Change in funded status of post retirement benefits, net of taxes303  281  910  (2,021)
COMPREHENSIVE INCOME$16,684  $7,892  $58,107  $17,921 
PER SHARE DATA       
Basic and Diluted Earnings per Share$0.93  $0.92  $2.74  $2.90 
Weighted average number of shares outstanding (in thousands)13,141  12,255  12,574  12,253 


 
 
For more information contact:
Rodger A. McHargue at (812) 238-6334

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