EX-99.1 2 thff8k20220331ex-99x1.htm EX-99.1 Document

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 26, 2022 – First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2022.

•Net income was $20.9 million compared to $12.9 million for the same period of 2021;

•Diluted net income per common share of $1.67 compared to $0.95 for the same period of 2021;

•Return on average assets was 1.63% compared to 1.12% for the three months ended March 31, 2021; and

•Pre-tax, pre-provision net income was $19.7 million compared to $16.6 million for the same period in 2021.1

“We are pleased with our first quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Profitability measures remain strong with four consecutive quarters of growth in our net interest income and muted credit related costs. Credit quality continues to be very good.”

Average Total Loans
Average total loans for the fourth quarter of 2022 were $2.78 billion versus $2.64 billion for the comparable period in 2021.

Total Loans Outstanding
Total loans outstanding as of March 31, 2022 were $2.80 billion compared to $2.65 billion as of March 31, 2021, an increase of $158 million or 5.96%.

Average Total Deposits
Average total deposits for the quarter ended March 31, 2022, were $4.43 billion versus $3.82 billion as of March 31, 2021, an increase of $611 million or 16.01%.

Total Deposits
Total deposits were $4.40 billion as of March 31, 2022, compared to $3.91 billion as of March 31, 2021, an increase of $490 million or 12.54%.

Book Value Per Share
Book Value per share was $42.25 at March 31, 2022, compared to $44.20 at March 31, 2021.
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.





Shareholder Equity
Shareholder equity at March 31, 2022, was $525.4 million compared to $598.1 million on March 31, 2021. In the quarter the Corporation repurchased 204,952 shares of its common stock and a total of 980,900 shares in 2021.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 8.65% at March 31, 2022, compared to 11.12% at March 31, 2021.

Net Interest Income
Net interest income for the first quarter of 2022 was $37.8 million, compared to $34.9 million reported for the same period of 2021, an increase of $2.9 million or 8.30%.

Net Interest Margin
The net interest margin for the quarter ended March 31, 2022, was 3.16% compared to the 3.27% reported at March 31, 2021. On a linked quarter basis, the net interest margin increased eight basis points from 3.08% as of December 31, 2021.

Nonperforming Loans
Nonperforming loans as of March 31, 2022, were $13.0 million versus $21.0 million as of March 31, 2021. The ratio of nonperforming loans to total loans and leases was 0.46% as of March 31, 2022, versus 0.79% as of March 31, 2021.

Credit Loss Provision
The Corporation recorded a negative provision for credit losses for the three months ended March 31, 2022 of $6.6 million, compared to the $452 thousand provision for the first quarter 2021.

Net Charge-Offs
In the first quarter of 2022 net charge-offs were $1.2 million compared to $728 thousand in the same period of 2021.

Allowance for Credit Losses
The Corporation’s allowance for credit losses as of March 31, 2022, was $40.5 million compared to $46.8 million as of March 31, 2022. The allowance for credit losses as a percent of total loans was 1.44% as of March 31, 2022, compared to 1.77% as of March 31, 2021.

Non-Interest Income
Non-interest income for the three months ended March 31, 2022 and 2021 was $13.7 million and $9.3 million, respectively. During the quarter, the Corporation received a $4.0 million legal settlement.

Non-Interest Expense
Non-interest expense for the three months ended March 31, 2022, was $31.3 million compared to $27.6 million in 2021. The year-over-year change is, in part, impacted by the acquisition of Hancock Bancorp in the third quarter of 2021.






Efficiency Ratio
The Corporation’s efficiency ratio was 59.54% for the quarter ending March 31, 2022, versus 61.08% for the same period in 2021.

Income Taxes
Income tax expense for the three months ended March 31, 2022, was $5.8 million versus $3.2 million for the same period in 2021. The effective tax rate for 2022 was 21.79% compared to 20.10% for 2021.


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 78 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
March 31,December 31,March 31,
202220212021
END OF PERIOD BALANCES
    Assets$5,081,794 $5,175,099 $4,684,192 
    Deposits$4,395,190 $4,409,569 $3,905,348 
    Loans, including net deferred loan costs$2,804,650 $2,815,895 $2,646,937 
    Allowance for Credit Losses$40,516 $48,305 $43,800 
    Total Equity$525,444 $582,576 $598,112 
    Tangible Common Equity (a)
$431,629 $488,417 $510,981 
AVERAGE BALANCES
    Total Assets$5,149,642 $5,086,702 $4,600,750 
    Earning Assets$4,927,680 $4,875,039 $4,404,109 
    Investments$1,468,471 $1,410,351 $1,133,439 
    Loans$2,777,168 $2,633,559 $2,640,291 
    Total Deposits$4,427,806 $4,312,115 $3,816,705 
    Interest-Bearing Deposits$3,525,766 $3,823,428 $3,059,290 
    Interest-Bearing Liabilities$106,005 $110,490 $110,448 
    Total Equity$565,123 $589,197 $600,669 
INCOME STATEMENT DATA
    Net Interest Income$37,811 $36,832 $34,913 
    Net Interest Income Fully Tax Equivalent (b)
$38,908 $37,953 $35,959 
    Provision for Credit Losses$(6,550)$5,710 $452 
    Non-interest Income$13,738 $10,767 $9,294 
    Non-interest Expense$31,344 $33,312 $27,639 
    Net Income$20,924 $7,398 $12,877 
PER SHARE DATA
    Basic and Diluted Net Income Per Common Share$1.67 $0.58 $0.95 
    Cash Dividends Declared Per Common Share$— $0.63 $— 
    Book Value Per Common Share$42.25 $46.13 $44.20 
    Tangible Book Value Per Common Share (c)
$34.71 $38.66 $37.76 
    Basic Weighted Average Common Shares Outstanding12,538 12,804 13,533 
(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 Ended
 March 31,December 31,March 31,
 202220212021
Return on average assets1.63 %0.58 %1.12 %
Return on average common shareholder's equity14.81 %5.02 %8.58 %
Efficiency ratio59.54 %68.37 %61.08 %
Average equity to average assets10.97 %11.58 %13.06 %
Net interest margin (a)
3.16 %3.08 %3.27 %
Net charge-offs to average loans and leases0.18 %0.27 %0.11 %
Credit loss reserve to loans and leases1.44 %1.72 %1.65 %
Credit loss reserve to nonperforming loans312.60 %321.78 %208.47 %
Nonperforming loans to loans and leases0.46 %0.53 %0.79 %
Tier 1 leverage 9.94 %9.83 %11.34 %
Risk-based capital - Tier 114.46 %14.37 %16.17 %
(a) Net interest margin is calculated on a tax equivalent basis.


Asset QualityThree Months Ended
 March 31,December 31,March 31,
 202220212021
Accruing loans and leases past due 30-89 days$13,698 $17,096 $8,373 
Accruing loans and leases past due 90 days or more$707 $515 $2,001 
Nonaccrual loans and leases$7,712 $9,590 $14,545 
Total troubled debt restructuring$4,542 $4,799 $4,464 
Other real estate owned$236 $108 $942 
Nonperforming loans and other real estate owned$13,197 $15,012 $21,952 
Total nonperforming assets$16,728 $18,371 $25,280 
Gross charge-offs$3,254 $3,113 $2,338 
Recoveries$2,015 $1,312 $1,610 
Net charge-offs/(recoveries)$1,239 $1,801 $728 




Non-GAAP ReconciliationsThree Months Ended March 31,
20222021
($ in thousands, except EPS)
Income before Income Taxes$26,755 $16,116 
Provision for credit losses(6,550)452 
Provision for unfunded commitments(500)— 
Pre-tax, Pre-provision Income$19,705 $16,568 


CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
March 31,
2022		December 31,
2021
    (unaudited)
ASSETS  
Cash and due from banks$598,175 $682,807 
Federal funds sold736 308 
Securities available-for-sale1,359,483 1,364,734 
Loans:  
Commercial1,701,507 1,674,066 
Residential635,264 664,509 
Consumer464,035 474,026 
 2,800,806 2,812,601 
(Less) plus:  
Net deferred loan costs3,844 3,294 
Allowance for credit losses(40,516)(48,305)
 2,764,134 2,767,590 
Restricted stock15,547 16,200 
Accrued interest receivable15,633 16,946 
Premises and equipment, net69,978 69,522 
Bank-owned life insurance117,354 116,997 
Goodwill86,135 86,135 
Other intangible assets7,680 8,024 
Other real estate owned236 108 
Other assets46,703 45,728 
TOTAL ASSETS$5,081,794 $5,175,099 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Deposits:  
Non-interest-bearing$893,375 $914,933 
Interest-bearing:  
Certificates of deposit exceeding the FDIC insurance limits62,899 74,015 
Other interest-bearing deposits3,438,916 3,420,621 
 4,395,190 4,409,569 
Short-term borrowings96,672 93,374 
FHLB advances15,924 15,937 
Other liabilities48,564 73,643 
TOTAL LIABILITIES4,556,350 4,592,523 
Shareholders’ equity  
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-16,114,992 in 2022 and 16,096,313 in 2021
Outstanding shares-12,435,309 in 2022 and 12,629,893 in 20212,010 2,009 
Additional paid-in capital142,185 141,979 
Retained earnings580,063 559,139 
Accumulated other comprehensive income/(loss)(71,025)(2,426)
Less: Treasury shares at cost-3,679,683 in 2022 and 3,466,420 in 2021(127,789)(118,125)
TOTAL SHAREHOLDERS’ EQUITY525,444 582,576 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$5,081,794 $5,175,099 

 


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
Three Months Ended March 31,
 20222021
 (unaudited)
INTEREST INCOME:  
Loans, including related fees$32,357 $31,857 
Securities:  
Taxable4,583 3,079 
Tax-exempt2,348 2,074 
Other365 346 
TOTAL INTEREST INCOME39,653 37,356 
INTEREST EXPENSE:  
Deposits1,676 2,286 
Short-term borrowings82 98 
Other borrowings84 59 
TOTAL INTEREST EXPENSE1,842 2,443 
NET INTEREST INCOME37,811 34,913 
Provision for credit losses(6,550)452 
NET INTEREST INCOME AFTER PROVISION  
FOR LOAN LOSSES44,361 34,461 
NON-INTEREST INCOME:  
Trust and financial services1,372 1,305 
Service charges and fees on deposit accounts2,850 2,243 
Other service charges and fees4,399 4,242 
Securities gains (losses), net5 (152)
Gain on sales of mortgage loans662 1,393 
Other4,450 263 
TOTAL NON-INTEREST INCOME13,738 9,294 
NON-INTEREST EXPENSE:  
Salaries and employee benefits17,342 15,677 
Occupancy expense2,522 2,149 
Equipment expense2,907 2,578 
FDIC Expense428 298 
Other8,145 6,937 
TOTAL NON-INTEREST EXPENSE31,344 27,639 
INCOME BEFORE INCOME TAXES26,755 16,116 
Provision for income taxes5,831 3,239 
NET INCOME20,924 12,877 
OTHER COMPREHENSIVE INCOME  
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes(68,914)(11,068)
Change in funded status of post retirement benefits, net of taxes315 472 
COMPREHENSIVE INCOME$(47,675)$2,281 
PER SHARE DATA  
Basic and Diluted Earnings per Share$1.67 $0.95 
Weighted average number of shares outstanding (in thousands)12,538 13,533