EX-99.1 2 thff8k20220630ex-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 Second Quarter Results

Terre Haute, Indiana, July 26, 2022 – First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2022.

•Net income was $15.6 million compared to $16.6 million for the same period of 2021;

•Diluted net income per common share of $1.27 compared to $1.24 for the same period of 2021;

•Return on average assets was 1.24% compared to 1.40% for the three months ended June 30, 2021;

•Credit loss provision was $750 thousand compared to negative provision for credit losses of $2.3 million for the second quarter 2021; and

•Pre-tax, pre-provision net income was $19.7 million compared to $18.6 million for the same period in 2021.1

The Corporation further reported results for the six months ending June 30, 2022:

•Net income was $36.5 million compared to $29.5 million for the same period of 2021;

•Diluted net income per common share of $2.95 compared to $2.19 for the same period of 2021;

•Return on average assets was 1.43% compared to 1.26% for the six months ended June 30, 2021;

•Negative provision for credit losses was $5.8 million compared to negative provision for credit losses of $1.7 million for the six months ended June 30, 2021; and

•Pre-tax, pre-provision net income was $39.4 million compared to $35.1 million for the same period in 2021.1
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.


“We are pleased with our second quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Loan growth continues to be strong which contributed to our fifth straight quarter of net interest income growth.”




Average Total Loans
Average total loans for the second quarter of 2022 were $2.83 billion versus $2.62 billion for the comparable period in 2021, an increase of $206 million or 7.86%.

Total Loans Outstanding
Total loans outstanding as of June 30, 2022 were $2.89 billion compared to $2.57 billion as of June 30, 2021, an increase of $319 million or 12.41%. On a linked quarter basis, total loans increased $82.9 million or 2.95% from $2.80 billion as of March 31, 2022.

Average Total Deposits
Average total deposits for the quarter ended June 30, 2022, were $4.42 billion versus $3.98 billion as of June 30, 2021, an increase of $436 million or 10.93%.

Total Deposits
Total deposits were $4.38 billion as of June 30, 2022, compared to $3.99 billion as of June 30, 2021, an increase of $395 million or 9.89%.

Book Value Per Share
Book Value per share was $38.36 at June 30, 2022, compared to $45.08 at June 30, 2021. The decrease was partially driven by the repurchase of 1,056,597 shares of the Corporation's common stock.

Shareholder Equity
Shareholder equity at June 30, 2022, was $461.5 million compared to $588.2 million on June 30, 2021. In the quarter the Corporation repurchased 404,186 shares of its common stock.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 7.48% at June 30, 2022, compared to 10.75% at June 30, 2021. The decrease was partially driven by the aforementioned share repurchases.

Net Interest Income
Net interest income for the second quarter of 2022 was $40.5 million, compared to $35.6 million reported for the same period of 2021, an increase of $4.8 million or 13.59%.

Net Interest Margin
The net interest margin for the quarter ended June 30, 2022, was 3.46% compared to the 3.23% reported at June 30, 2021. On a linked quarter basis, the net interest margin increased 30 basis points from 3.16% as of March 31, 2022.

Nonperforming Loans
Nonperforming loans as of June 30, 2022, were $13.5 million versus $20.0 million as of June 30, 2021. The ratio of nonperforming loans to total loans and leases was 0.47% as of June 30, 2022, versus 0.78% as of June 30, 2021.

Credit Loss Provision
The provision for credit losses for the three months ended June 30, 2022 was $750 thousand, compared to a negative provision for credit losses of $2.2 million for the second quarter 2021.



Net Charge-Offs
In the second quarter of 2022 net recoveries were $202 thousand compared to $152 thousand in the same period of 2021.

Allowance for Credit Losses
The Corporation’s allowance for credit losses as of June 30, 2022, was $41.5 million compared to $44.7 million as of June 30, 2021. The allowance for credit losses as a percent of total loans was 1.44% as of June 30, 2022, compared to 1.74% as of June 30, 2021.

Non-Interest Income
Non-interest income for the three months ended June 30, 2022 and 2021 was $10.3 million and $10.9 million, respectively.

Non-Interest Expense
Non-interest expense for the three months ended June 30, 2022, was $30.7 million compared to $28.0 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 59.06% for the quarter ending June 30, 2022, versus 58.75% for the same period in 2021.

Income Taxes
Income tax expense for the three months ended June 30, 2022, was $3.7 million versus $4.1 million for the same period in 2021. The effective tax rate for 2022 was 19.17% compared to 19.97% 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 EndedSix Months Ended
June 30,March 31,June 30,June 30,June 30,
20222022202120222021
END OF PERIOD BALANCES
    Assets$5,006,648 $5,081,794 $4,756,284 $5,006,648 $4,756,284 
    Deposits$4,383,257 $4,395,190 $3,988,751 $4,383,257 $3,988,751 
    Loans, including net deferred loan costs$2,887,527 $2,804,650 $2,568,713 $2,887,527 $2,568,713 
    Allowance for Credit Losses$41,468 $40,516 $41,756 $41,468 $41,756 
    Total Equity$461,531 $525,444 $588,163 $461,531 $588,163 
    Tangible Common Equity (a)
$367,210 $431,629 $501,459 $367,210 $501,459 
AVERAGE BALANCES
    Total Assets$5,046,846 $5,149,642 $4,751,068 $5,098,244 $4,675,909 
    Earning Assets$4,809,570 $4,927,680 $4,552,581 $4,868,625 $4,478,345 
    Investments$1,432,321 $1,468,471 $1,244,551 $1,450,396 $1,188,995 
    Loans$2,825,684 $2,777,168 $2,619,887 $2,801,426 $2,630,089 
    Total Deposits$4,416,542 $4,427,806 $3,981,243 $4,422,174 $3,898,974 
    Interest-Bearing Deposits$3,519,122 $3,525,766 $3,173,782 $3,522,444 $3,116,536 
    Interest-Bearing Liabilities$103,223 $106,005 $101,594 $104,614 $106,021 
    Total Equity$494,233 $565,123 $600,599 $529,678 $600,634 
INCOME STATEMENT DATA
    Net Interest Income$40,469 $37,811 $35,628 $78,280 $70,541 
    Net Interest Income Fully Tax Equivalent (b)
$41,665 $38,908 $36,719 $80,573 $72,678 
    Provision for Credit Losses$750 $(6,550)$(2,196)$(5,800)$(1,744)
    Non-interest Income$10,270 $13,738 $10,931 $24,008 $20,225 
    Non-interest Expense$30,674 $31,344 $27,996 $62,018 $55,635 
    Net Income$15,613 $20,924 $16,614 $36,537 $29,491 
PER SHARE DATA
    Basic and Diluted Net Income Per Common Share$1.27 $1.67 $1.24 $2.95 $2.19 
    Cash Dividends Declared Per Common Share$0.54 $— $0.53 $0.54 $0.53 
    Book Value Per Common Share$38.36 $42.25 $45.08 $38.36 $45.08 
    Tangible Book Value Per Common Share (c)
$32.65 $34.71 $38.31 $30.52 $38.43 
    Basic Weighted Average Common Shares Outstanding12,248 12,538 13,414 12,393 13,473 
(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
 June 30,March 31,June 30,June 30,June 30,
 20222022202120222021
Return on average assets1.24 %1.63 %1.40 %1.43 %1.26 %
Return on average common shareholder's equity12.64 %14.81 %11.06 %13.80 %9.82 %
Efficiency ratio59.06 %59.54 %58.75 %59.30 %59.89 %
Average equity to average assets9.79 %10.97 %12.64 %10.39 %12.85 %
Net interest margin (a)
3.46 %3.16 %3.23 %3.31 %3.25 %
Net charge-offs to average loans and leases(0.03)%0.18 %(0.02)%0.07 %0.04 %
Credit loss reserve to loans and leases1.44 %1.44 %1.74 %1.44 %1.74 %
Credit loss reserve to nonperforming loans306.97 %312.60 %223.46 %306.97 %223.46 %
Nonperforming loans to loans and leases0.47 %0.46 %0.78 %0.47 %0.78 %
Tier 1 leverage 9.97 %9.94 %10.72 %9.97 %10.72 %
Risk-based capital - Tier 113.51 %14.46 %17.15 %13.51 %17.15 %
(a) Net interest margin is calculated on a tax equivalent basis.


Asset QualityThree Months EndedSix Months Ended
 June 30,March 31,June 30,June 30,June 30,
 20222022202120222021
Accruing loans and leases past due 30-89 days$20,273 $13,698 $9,430 $20,273 $9,430 
Accruing loans and leases past due 90 days or more$980 $707 $1,202 $980 $1,202 
Nonaccrual loans and leases$8,383 $7,712 $14,356 $8,383 $14,356 
Total troubled debt restructuring$4,146 $4,542 $4,460 $4,146 $4,460 
Other real estate owned$170 $236 $989 $170 $989 
Nonperforming loans and other real estate owned$13,679 $13,197 $21,007 $13,679 $21,007 
Total nonperforming assets$16,766 $16,728 $24,272 $16,766 $24,272 
Gross charge-offs$2,411 $3,254 $1,151 $5,665 $3,489 
Recoveries$2,613 $2,015 $1,303 $4,628 $2,913 
Net charge-offs/(recoveries)$(202)$1,239 $(152)$1,037 $576 


Non-GAAP ReconciliationsThree Months Ended June 30,
20222021
($ in thousands, except EPS)
Income before Income Taxes$19,315 $20,759 
Provision for credit losses750 (2,196)
Provision for unfunded commitments(350)— 
Pre-tax, Pre-provision Income$19,715 $18,563 

Non-GAAP ReconciliationsSix Months Ended June 30,
20222021
($ in thousands, except EPS)
Income before Income Taxes$46,070 $36,875 
Provision for credit losses(5,800)(1,744)
Provision for unfunded commitments(850)— 
Pre-tax, Pre-provision Income$39,420 $35,131 


CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
June 30,
2022		December 31,
2021
    (unaudited)
ASSETS  
Cash and due from banks$412,136 $682,807 
Federal funds sold11,133 308 
Securities available-for-sale1,338,452 1,364,734 
Loans:  
Commercial1,707,105 1,674,066 
Residential670,641 664,509 
Consumer509,781 474,026 
 2,887,527 2,812,601 
(Less) plus:  
Net deferred loan costs4,961 3,294 
Allowance for credit losses(41,468)(48,305)
 2,851,020 2,767,590 
Restricted stock15,620 16,200 
Accrued interest receivable16,701 16,946 
Premises and equipment, net69,022 69,522 
Bank-owned life insurance117,695 116,997 
Goodwill86,985 86,135 
Other intangible assets7,336 8,024 
Other real estate owned170 108 
Other assets80,378 45,728 
TOTAL ASSETS$5,006,648 $5,175,099 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Deposits:  
Non-interest-bearing$886,204 $914,933 
Interest-bearing:  
Certificates of deposit exceeding the FDIC insurance limits60,311 74,015 
Other interest-bearing deposits3,436,742 3,420,621 
 4,383,257 4,409,569 
Short-term borrowings84,232 93,374 
FHLB advances15,912 15,937 
Other liabilities61,716 73,643 
TOTAL LIABILITIES4,545,117 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-12,031,123 in 2022 and 12,629,893 in 20212,011 2,009 
Additional paid-in capital142,390 141,979 
Retained earnings589,169 559,139 
Accumulated other comprehensive income/(loss)(126,630)(2,426)
Less: Treasury shares at cost-4,083,869 in 2022 and 3,466,420 in 2021(145,409)(118,125)
TOTAL SHAREHOLDERS’ EQUITY461,531 582,576 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$5,006,648 $5,175,099 

 


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
 (unaudited)
INTEREST INCOME:    
Loans, including related fees$34,305 $31,966 $66,662 $63,823 
Securities:    
Taxable6,048 3,355 10,631 6,434 
Tax-exempt2,492 2,163 4,840 4,237 
Other358 387 723 733 
TOTAL INTEREST INCOME43,203 37,871 82,856 75,227 
INTEREST EXPENSE:    
Deposits2,473 2,090 4,149 4,376 
Short-term borrowings176 94 258 192 
Other borrowings85 59 169 118 
TOTAL INTEREST EXPENSE2,734 2,243 4,576 4,686 
NET INTEREST INCOME40,469 35,628 78,280 70,541 
Provision for credit losses750 (2,196)(5,800)(1,744)
NET INTEREST INCOME AFTER PROVISION    
FOR LOAN LOSSES39,719 37,824 84,080 72,285 
NON-INTEREST INCOME:    
Trust and financial services1,300 1,313 2,672 2,618 
Service charges and fees on deposit accounts2,886 2,327 5,736 4,570 
Other service charges and fees4,997 5,039 9,396 9,281 
Securities gains (losses), net— 258 5 106 
Gain on sales of mortgage loans603 1,450 1,265 2,843 
Other484 544 4,934 807 
TOTAL NON-INTEREST INCOME10,270 10,931 24,008 20,225 
NON-INTEREST EXPENSE:    
Salaries and employee benefits15,668 16,031 33,010 31,708 
Occupancy expense2,372 2,002 4,894 4,151 
Equipment expense2,959 2,440 5,866 5,018 
FDIC Expense542 287 970 585 
Other9,133 7,236 17,278 14,173 
TOTAL NON-INTEREST EXPENSE30,674 27,996 62,018 55,635 
INCOME BEFORE INCOME TAXES19,315 20,759 46,070 36,875 
Provision for income taxes3,702 4,145 9,533 7,384 
NET INCOME15,613 16,614 36,537 29,491 
OTHER COMPREHENSIVE INCOME (LOSS)    
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes(55,919)1,772 (124,833)(9,296)
Change in funded status of post retirement benefits, net of taxes314 472 629 944 
COMPREHENSIVE INCOME (LOSS)$(39,992)$18,858 $(87,667)$21,139 
PER SHARE DATA    
Basic and Diluted Earnings per Share$1.27 $1.24 $2.95 $2.19 
Weighted average number of shares outstanding (in thousands)12,248 13,414 12,393 13,473