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    First Financial Corporation Reports Third Quarter Results

    TERRE HAUTE, Ind., Oct. 24, 2023 (GLOBE NEWSWIRE) --  First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2023.

    • Net income was $16.3 million compared to the $18.1 million reported for the same period of 2022;
    • Diluted net income per common share of $1.37 compared to $1.50 for the same period of 2022;
    • Return on average assets was 1.35% compared to 1.43% for the three months ended September 30, 2022;
    • Credit loss provision was $1.2 million compared to provision of $1.1 million for the third quarter 2022; and
    • Pre-tax, pre-provision net income was $20.5 million compared to $23.7 million for the same period in 2022.1

    The Corporation further reported results for the nine months ending September 30, 2023:

    • Net income was $48.3 million compared to the $54.6 million reported for the same period of 2022, which included the proceeds of a legal settlement and pandemic related reserve releases, both of which were non-recurring events;
    • Diluted net income per common share of $4.02 compared to $4.45 for the same period of 2022;
    • Return on average assets was 1.33% compared to 1.43% for the nine months ended September 30, 2022;
    • Credit loss provision was $4.8 million compared to negative provision of $4.8 million for the nine months ended September 30, 2022; and
    • Pre-tax, pre-provision net income was $63.1 million compared to $63.2 million for the same period in 2022.1

    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 Corporations performance over time as well as comparison to the Corporations peers and evaluating the financial results of the Corporation – please refer to the Non GAAP reconciliations contained in this release.

    Average Total Loans

    Average total loans for the third quarter of 2023 were $3.15 billion versus $2.92 billion for the comparable period in 2022, an increase of $230 million or 7.88%. On a linked quarter basis, average loans increased $49 million or 1.60% from $3.10 billion as of June 30, 2023.

    Total Loans Outstanding

    Total loans outstanding as of September 30, 2023, were $3.12 billion compared to $2.97 billion as of September 30, 2022, an increase of $147 million or 4.95%, primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans. On a linked quarter basis, total loans decreased $9.1 million or 0.29% from $3.13 billion as of June 30, 2023.

    “We are pleased with our third quarter results, in spite of an increasingly challenging environment. Credit quality remains stable and our disciplined approach to expense management is constant,” said Norman L. Lowery, Chairman and Chief Executive Officer. “Our liquidity is stable and our balance sheet and capital levels remain strong.”

    Average Total Deposits

    Average total deposits for the quarter ended September 30, 2023, were $4.00 billion versus $4.41 billion as of September 30, 2022.

    Total Deposits

    Total deposits were $4.04 billion as of September 30, 2023, compared to $4.41 billion as of September 30, 2022.

    Shareholder Equity

    Shareholder equity at September 30, 2023, was $470.2 million compared to $438.6 million on September 30, 2022. During the quarter, the Corporation repurchased 228,457 shares of its common stock. An additional 518,860 shares remains under the current authorization. Shareholder’s equity was impacted by the downturn in the markets which affected the accumulated other comprehensive income/(loss) (“AOCI”) on investments available for sale. AOCI decreased $8.7 million in comparison to September 30, 2022, and decreased $34.8 million in comparison to June 30, 2023.

    Book Value Per Share

    Book Value per share was $40.00 as of September 30, 2023, compared to $36.49 as of September 30, 2022, an increase of 9.63%.

    Tangible Common Equity to Tangible Asset Ratio

    The Corporation’s tangible common equity to tangible asset ratio was 8.04% at September 30, 2023, compared to 7.01% at September 30, 2022, partially driven by the aforementioned share repurchases.

    Net Interest Income

    Net interest income for the third quarter of 2023 was $41.2 million, compared to $43.1 million reported for the same period of 2022, a decrease of $2.0 million or 4.53%.

    Net Interest Margin

    The net interest margin for the quarter ended September 30, 2023, was 3.74% compared to the 3.71% reported at September 30, 2022, an increase of 3 basis points or 0.69%.

    Nonperforming Loans

    Nonperforming loans as of September 30, 2023, were $12.6 million versus $10.3 million as of September 30, 2022. The ratio of nonperforming loans to total loans and leases was 0.40% as of September 30, 2023, versus 0.35% as of September 30, 2022.

    Credit Loss Provision

    The provision for credit losses for the three months ended September 30, 2023, was $1.20 million, compared to $1.05 million for the third quarter 2022.

    Net Charge-Offs

    In the third quarter of 2023 net charge-offs were $2.07 million compared to $3.02 million in the same period of 2022. On July 12, 2022, the Corporation sold seven classified non farm non residential commercial loans, which were acquired in the two acquisitions in 2019 and 2021, with a total principal balance of $14.9 million. The net recovery on the sale of $361 thousand was a result of the charge-off of the seven loans of $2.1 million, netted by the reserve on those loans and the unamortized discount remaining from the acquisitions.

    Allowance for Credit Losses

    The Corporation’s allowance for credit losses as of September 30, 2023, was $39.0 million compared to $39.5 million as of September 30, 2022. The allowance for credit losses as a percent of total loans was 1.25% as of September 30, 2023, compared to 1.33% as of September 30, 2022. On a linked quarter basis, the allowance for credit losses as a percent of total loans decreased 3 basis points from 1.28% as of June 30, 2023.

    Non-Interest Income

    Non-interest income for the three months ended September 30, 2023 and 2022 was $11.6 million and $12.1 million, respectively. Both periods reflect Bank Owned Life Insurance (“BOLI”) proceeds of $1.4 million in 2023 and $2.5 million in 2022.

    Non-Interest Expense

    Non-interest expense for the three months ended September 30, 2023, was $32.3 million compared to $31.5 million in 2022.

    Efficiency Ratio

    The Corporation’s efficiency ratio was 59.57% for the quarter ending September 30, 2023, versus 55.72% for the same period in 2022.

    Income Taxes

    Income tax expense for the three months ended September 30, 2023, was $3.0 million versus $4.6 million for the same period in 2022. The effective tax rate for 2023 was 17.37% compared to 20.61% for 2022. The decrease in tax expense is due to a non-taxable gain on BOLI claim proceeds and an adjustment to tax credit investments.

    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 70 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   Nine Months Ended
        September 30,    June 30,   September 30,    September 30,    September 30, 
           2023      2023      2022      2023      2022  
    END OF PERIOD BALANCES                              
    Assets   $ 4,784,806   $ 4,877,231   $ 5,009,339   $ 4,784,806   $ 5,009,339  
    Deposits   $ 4,040,995   $ 4,063,155   $ 4,407,506   $ 4,040,995   $ 4,407,506  
    Loans, including net deferred loan costs   $ 3,117,626   $ 3,126,676   $ 2,970,475   $ 3,117,626   $ 2,970,475  
    Allowance for Credit Losses   $ 39,034   $ 39,907   $ 39,495   $ 39,034   $ 39,495  
    Total Equity   $ 470,168   $ 496,888   $ 438,626   $ 470,168   $ 438,626  
    Tangible Common Equity (a)   $ 377,367   $ 403,824   $ 344,617   $ 377,367   $ 344,617  
                                   
    AVERAGE BALANCES                                   
    Total Assets   $ 4,814,251   $ 4,818,760   $ 5,048,849   $ 4,828,165   $ 5,081,779  
    Earning Assets   $ 4,575,996   $ 4,581,652   $ 4,774,080   $ 4,590,258   $ 4,837,110  
    Investments   $ 1,351,433   $ 1,395,446   $ 1,436,179   $ 1,384,941   $ 1,445,657  
    Loans   $ 3,147,317   $ 3,097,836   $ 2,917,457   $ 3,104,623   $ 2,840,103  
    Total Deposits   $ 4,000,302   $ 4,121,097   $ 4,406,187   $ 4,124,520   $ 4,416,845  
    Interest-Bearing Deposits   $ 3,222,633   $ 3,297,110   $ 3,515,568   $ 3,309,111   $ 3,520,152  
    Interest-Bearing Liabilities   $ 309,948   $ 185,318   $ 95,098   $ 197,142   $ 101,442  
    Total Equity   $ 493,764   $ 501,686   $ 481,225   $ 494,428   $ 513,527  
                                   
    INCOME STATEMENT DATA                                   
    Net Interest Income   $ 41,150   $ 42,187   $ 43,104   $ 127,672   $ 121,384  
    Net Interest Income Fully Tax Equivalent (b)   $ 42,539   $ 43,581   $ 44,402   $ 131,774   $ 124,975  
    Provision for Credit Losses   $ 1,200   $ 1,800   $ 1,050   $ 4,800   $ (4,750 )
    Non-interest Income   $ 11,627   $ 10,453   $ 12,140   $ 31,455   $ 36,148  
    Non-interest Expense   $ 32,265   $ 31,346   $ 31,504   $ 95,932   $ 93,522  
    Net Income   $ 16,285   $ 15,987   $ 18,051   $ 48,252   $ 54,588  
                                   
    PER SHARE DATA                                   
    Basic and Diluted Net Income Per Common Share   $ 1.37   $ 1.33   $ 1.50   $ 4.02   $ 4.45  
    Cash Dividends Declared Per Common Share   $   $ 0.54   $   $ 0.54   $ 0.54  
    Book Value Per Common Share   $ 40.00   $ 41.47   $ 36.49   $ 40.00   $ 36.49  
    Tangible Book Value Per Common Share (c)   $ 33.69   $ 33.99   $ 33.27   $ 32.10   $ 28.67  
    Basic Weighted Average Common Shares Outstanding     11,901     12,022     12,029     11,993     12,270  



    (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   Nine Months Ended  
        September 30,       June 30,      September 30,       September 30,       September 30,   
        2023         2023         2022         2023         2022  
    Return on average assets   1.35 % 1.34 % 1.43 % 1.33 % 1.43 %
    Return on average common shareholder's equity   13.19 % 12.75 % 15.00 % 12.98 % 14.14 %
    Efficiency ratio   59.57 % 58.01 % 55.72 % 58.77 % 58.04 %
    Average equity to average assets   10.26 % 10.48 % 9.53 % 10.24 % 10.11 %
    Net interest margin (a)   3.74 % 3.81 % 3.71 % 3.83 % 3.44 %
    Net charge-offs to average loans and leases   0.24 % 0.20 % 0.19 % 0.24 % 0.19 %
    Credit loss reserve to loans and leases   1.25 % 1.28 % 1.33 % 1.25 % 1.33 %
    Credit loss reserve to nonperforming loans   310.19 % 300.10 % 382.26 % 310.19 % 382.26 %
    Nonperforming loans to loans and leases   0.40 % 0.43 % 0.35 % 0.40 % 0.35 %
    Tier 1 leverage   11.72 % 11.49 % 10.33 % 11.72 % 10.33 %
    Risk-based capital - Tier 1   14.61 % 14.44 % 13.69 % 14.61 % 13.69 %



          (a)   Net interest margin is calculated on a tax equivalent basis.

                                   
    Asset Quality   Three Months Ended   Nine Months Ended
           September 30,       June 30,      September 30,       September 30,       September 30, 
        2023   2023   2022   2023   2022
    Accruing loans and leases past due 30-89 days   $ 15,961   $ 15,583   $ 18,626   $ 15,961   $ 18,626
    Accruing loans and leases past due 90 days or more   $ 1,370   $ 682   $ 1,185   $ 1,370   $ 1,185
    Nonaccrual loans and leases   $ 11,214   $ 12,616   $ 9,147   $ 11,214   $ 9,147
    Other real estate owned   $ 63   $ 90   $ 214   $ 63   $ 214
    Nonperforming loans and other real estate owned   $ 12,647   $ 13,388   $ 10,546   $ 12,647   $ 10,546
    Total nonperforming assets   $ 15,671   $ 16,302   $ 13,657   $ 15,671   $ 13,657
    Gross charge-offs   $ 3,601   $ 3,543   $ 5,653   $ 11,520   $ 11,318
    Recoveries   $ 1,528   $ 2,030   $ 2,630   $ 5,975   $ 7,258
    Net charge-offs/(recoveries)   $ 2,073   $ 1,513   $ 3,023   $ 5,545   $ 4,060


                 
    Non-GAAP Reconciliations   Three Months Ended September 30, 
           2023      2022
    ($in thousands, except EPS)            
    Income before Income Taxes   $ 19,312   $ 22,690
    Provision for credit losses     1,200     1,050
    Provision for unfunded commitments        
    Pre-tax, Pre-provision Income   $ 20,512   $ 23,740


                 
    Non-GAAP Reconciliations   Nine Months Ended September 30, 
           2023        2022  
    ($ in thousands, except EPS)            
    Income before Income Taxes   $ 58,395     $ 68,760  
    Provision for credit losses     4,800       (4,750 )
    Provision for unfunded commitments     (100 )     (850 )
    Pre-tax, Pre-provision Income   $ 63,095     $ 63,160  

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

                 
           September 30,       December 31, 
        2023     2022  
        (unaudited)
    ASSETS            
    Cash and due from banks   $ 74,668     $ 222,517  
    Federal funds sold     688       9,374  
    Securities available-for-sale     1,225,219       1,330,481  
    Loans:             
    Commercial     1,775,004       1,798,260  
    Residential     687,069       673,464  
    Consumer     647,658       588,539  
          3,109,731       3,060,263  
    (Less) plus:              
    Net deferred loan costs     7,895       7,175  
    Allowance for credit losses     (39,034 )     (39,779 )
          3,078,592       3,027,659  
    Restricted stock     15,398       15,378  
    Accrued interest receivable     22,546       21,288  
    Premises and equipment, net     67,424       66,147  
    Bank-owned life insurance     113,684       115,704  
    Goodwill     86,985       86,985  
    Other intangible assets     5,816       6,714  
    Other real estate owned     63       337  
    Other assets     93,723       86,697  
    TOTAL ASSETS   $ 4,784,806     $ 4,989,281  
                 
    LIABILITIES AND SHAREHOLDERS’ EQUITY              
    Deposits:              
    Non-interest-bearing   $ 770,511     $ 857,920  
    Interest-bearing:             
    Certificates of deposit exceeding the FDIC insurance limits     82,741       50,608  
    Other interest-bearing deposits     3,187,743       3,460,343  
          4,040,995       4,368,871  
    Short-term borrowings     132,734       70,875  
    FHLB advances     84,578       9,589  
    Other liabilities     56,331       64,653  
    TOTAL LIABILITIES     4,314,638       4,513,988  
                 
    Shareholders’ equity              
    Common stock, $.125 stated value per share;              
    Authorized shares-40,000,000              
    Issued shares-16,137,220 in 2023 and 16,114,992 in 2022              
    Outstanding shares-11,754,528 in 2023 and 12,051,964 in 2022     2,014       2,012  
    Additional paid-in capital     143,855       143,185  
    Retained earnings     656,610       614,829  
    Accumulated other comprehensive income/(loss)     (176,038 )     (139,974 )
    Less: Treasury shares at cost-4,382,692 in 2023 and 4,063,028 in 2022     (156,273 )     (144,759 )
    TOTAL SHAREHOLDERS’ EQUITY     470,168       475,293  
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 4,784,806     $ 4,989,281  

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

                             
        Three Months Ended   Nine Months Ended
        September 30,    September 30, 
           2023        2022        2023        2022  
                    (unaudited)
    INTEREST INCOME:                        
    Loans, including related fees   $ 49,146     $ 38,021     $ 140,220     $ 104,683  
    Securities:                          
    Taxable     6,164       7,327       18,631       17,958  
    Tax-exempt     2,661       2,562       7,937       7,402  
    Other     752       336       2,864       1,059  
    TOTAL INTEREST INCOME     58,723       48,246       169,652       131,102  
    INTEREST EXPENSE:                            
    Deposits     13,627       4,644       35,111       8,793  
    Short-term borrowings     1,923       418       4,025       676  
    Other borrowings     2,023       80       2,844       249  
    TOTAL INTEREST EXPENSE     17,573       5,142       41,980       9,718  
    NET INTEREST INCOME     41,150       43,104       127,672       121,384  
    Provision for credit losses     1,200       1,050       4,800       (4,750 )
    NET INTEREST INCOME AFTER PROVISION                            
    FOR LOAN LOSSES     39,950       42,054       122,872       126,134  
    NON-INTEREST INCOME:                           
    Trust and financial services     1,140       1,015       3,642       3,687  
    Service charges and fees on deposit accounts     7,099       6,965       20,971       20,698  
    Other service charges and fees     213       160       613       488  
    Securities gains (losses), net                       5  
    Interchange income           149       47       418  
    Loan servicing fees     447       457       997       1,184  
    Gain on sales of mortgage loans     321       440       811       1,705  
    Other     2,407       2,954       4,374       7,963  
    TOTAL NON-INTEREST INCOME     11,627       12,140       31,455       36,148  
    NON-INTEREST EXPENSE:                            
    Salaries and employee benefits     17,159       15,943       51,263       48,953  
    Occupancy expense     2,389       2,525       7,120       7,419  
    Equipment expense     3,580       3,311       10,404       9,177  
    FDIC Expense     613       556       1,977       1,526  
    Other     8,524       9,169       25,168       26,447  
    TOTAL NON-INTEREST EXPENSE     32,265       31,504       95,932       93,522  
    INCOME BEFORE INCOME TAXES     19,312       22,690       58,395       68,760  
    Provision for income taxes     3,027       4,639       10,143       14,172  
    NET INCOME     16,285       18,051       48,252       54,588  
    OTHER COMPREHENSIVE INCOME (LOSS)                            
    Change in unrealized gains/(losses) on securities, net of reclassifications and taxes     (34,934 )     (41,060 )     (36,504 )     (165,893 )
    Change in funded status of post retirement benefits, net of taxes     146       315       440       944  
    COMPREHENSIVE INCOME (LOSS)   $ (18,503 )   $ (22,694 )   $ 12,188     $ (110,361 )
    PER SHARE DATA                            
    Basic and Diluted Earnings per Share   $ 1.37     $ 1.50     $ 4.02     $ 4.45  
    Weighted average number of shares outstanding (in thousands)     11,901       12,029       11,993       12,270  

     





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    First Financial Corporation Reports Third Quarter Results TERRE HAUTE, Ind., Oct. 24, 2023 (GLOBE NEWSWIRE) -  First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2023. Net income was $16.3 million compared to the $18.1 million reported for the same period of …