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 27, 2021 – First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2021. For the three months ending June 30, 2021:

For the quarter:

•Net income was $16.6 million compared to $11.9 million for the same period of 2020;

•Diluted net income per common share of $1.24 compared to $0.87 for the same period of 2020; and

•Return on average assets was 1.40% compared to 1.10% for the three months ended June 30, 2020.

The Corporation further reported results for the six months ending June 30, 2021:

•Net income was $29.5 million compared to $24.1 million for the same period of 2020;

•Diluted net income per common share of $2.19 compared to $1.76 for the same period of 2020; and

•Return on average assets was 1.26% compared to 1.16% for the six months ended June 30, 2020.

“We are pleased with our second quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Our asset quality remains strong which allows us to release some of the credit loss reserves established during the pandemic. Our focus continues to be on our customers and assisting them as they navigate these unusual times.”

Average Total Loans
Average total loans for the second quarter of 2021 were $2.62 billion versus $2.73 billion for the comparable period in 2020.

Total Loans Outstanding
Total loans outstanding as of June 30, 2021 were $2.57 billion compared to $2.78 billion as of June 30, 2020.

Average Total Deposits
Average total deposits for the quarter ended June 30, 2021, were $3.98 billion versus $3.53 billion as of June 30, 2020, an increase of $455 million or 12.90%.





Total Deposits
Total deposits were $3.99 billion as of June 30, 2021, compared to $3.57 billion as of June 30, 2020, an increase of $419 million or 11.73%. On a linked quarter basis, total deposits increased $83 million from $3.91 billion for the quarter ending March 31, 2021.

Book Value Per Share
Book Value per share was $45.08 at June 30, 2021, compared to $43.04 at June 30, 2020 an increase of 4.73%.

Shareholder Equity
Shareholder equity at June 30, 2021, was $588.2 million compared to $590.3 million on June 30, 2020. In the quarter the Corporation repurchased 497,000 shares of its common stock.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 10.75% at June 30, 2021, compared to 11.73% at June 30, 2020.

Net Interest Income
Net interest income for the second quarter of 2021 was $35.6 million, compared to $35.9 million reported for the same period of 2020.

Net Interest Margin
The net interest margin for the quarter ended June 30, 2021, was 3.23% compared to the 3.97% reported at June 30, 2020.

Nonperforming Loans
Nonperforming loans as of June 30, 2021, were $20.0 million versus $23.0 million as of June 30, 2020. The ratio of nonperforming loans to total loans and leases was 0.78% as of June 30, 2021, versus 0.83% as of June 30, 2020.

Credit Loss Provision
The provision for credit losses for the three months ended June 30, 2021, was $(2.20) million compared to the $2.97 million provision for the second quarter of 2020. 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.

Net Charge-Offs/Recoveries
In the second quarter of 2021 net recoveries were $152 thousand compared to net charge-offs of $743 thousand 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 June 30, 2021, was $44.7 million compared to $23.3 million as of June 30, 2020. The increase is primarily related to the adoption of CECL. The allowance for credit losses as a percent of total loans was 1.74% as of June 30, 2021, compared to 0.84% as of June 30, 2020. The allowance as of June 30, 2021 was calculated using CECL. The allowance as of June 30, 2020 was calculated using the incurred loss method.

Non-Interest Income
Non-interest income for the three months ended June 30, 2021 and 2020 was $10.9 and $8.8 million, respectively.

Non-Interest Expense
Non-interest expense for the three months ended June 30, 2021, was $28.0 million compared to $26.9 million in 2020.

Efficiency Ratio
The Corporation’s efficiency ratio was 58.75% for the quarter ending June 30, 2021, versus 58.78% for the same period in 2020.

Income Taxes
Income tax expense for the six months ended June 30, 2021, was $7.38 million versus $5.92 million for the same period in 2020. The effective tax rate for the second quarter of 2021 was 20.02% compared to 19.71% for same period of 2020.

“I am proud of the dedication of our associates in providing sound advice and financial solutions to our customers, as we continue to navigate through COVID-19 and its related issues,” Lowery stated.




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 EndedSix Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
END OF PERIOD BALANCES
    Assets$4,753,308 $4,681,216 $4,368,112 $4,753,308 $4,368,112 
    Deposits$3,988,751 $3,905,348 $3,569,893 $3,988,751 $3,569,893 
    Loans, including net deferred loan costs$2,568,713 $2,646,937 $2,777,083 $2,568,713 $2,777,083 
    Allowance for Credit Losses$44,732 $46,776 $23,285 $44,732 $23,285 
    Total Equity$588,163 $598,112 $590,284 $588,163 $590,284 
    Tangible Common Equity (a)
$501,459 $510,981 $501,863 $501,459 $501,863 
AVERAGE BALANCES
    Total Assets$4,751,068 $4,600,750 $4,317,011 $4,675,909 $4,169,900 
    Earning Assets$4,552,581 $4,404,109 $3,720,477 $4,478,345 $3,673,078 
    Investments$1,244,551 $1,133,439 $989,545 $1,188,995 $989,034 
    Loans$2,619,887 $2,640,291 $2,727,820 $2,630,089 $2,682,428 
    Total Deposits$3,981,243 $3,816,705 $3,526,529 $3,898,974 $3,398,578 
    Interest-Bearing Deposits$3,173,782 $3,059,290 $2,858,594 $3,116,536 $2,798,994 
    Interest-Bearing Liabilities$101,594 $110,448 $121,791 $106,021 $114,317 
    Total Equity$600,599 $600,669 $591,522 $600,634 $580,609 
INCOME STATEMENT DATA
    Net Interest Income$35,628 $34,913 $35,895 $70,541 $72,245 
    Net Interest Income Fully Tax Equivalent (b)
$36,719 $35,959 $36,962 $72,678 $74,371 
    Provision for Credit Losses$(2,196)$452 $2,965 $(1,744)$5,655 
    Non-interest Income$10,931 $9,294 $8,776 $20,225 $17,871 
    Non-interest Expense$27,996 $27,639 $26,883 $55,635 $54,437 
    Net Income$16,614 $12,877 $11,924 $29,491 $24,105 
PER SHARE DATA
    Basic and Diluted Net Income Per Common Share$1.24 $0.95 $0.87 $2.19 $1.76 
    Cash Dividends Declared Per Common Share$0.53 $— $0.52 $0.53 $0.52 
    Book Value Per Common Share$45.08 $44.2 $43.04 $45.08 $43.04 
    Tangible Book Value Per Common Share (c)
$38.31 $37.76 $36.68 $38.43 $36.59 
    Basic Weighted Average Common Shares Outstanding13,414 13,533 13,715 13,473 13,727 
(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,
 20212021202020212020
Return on average assets1.40 %1.12 %1.10 %1.26 %1.16 %
Return on average common shareholder's equity11.06 %8.58 %8.06 %9.82 %8.30 %
Efficiency ratio58.75 %61.08 %58.78 %59.89 %59.02 %
Average equity to average assets12.64 %13.06 %13.70 %12.85 %13.92 %
Net interest margin (a)
3.23 %3.27 %3.97 %3.25 %4.05 %
Net charge-offs to average loans and leases(0.02)%0.11 %0.11 %0.04 %0.17 %
Credit loss reserve to loans and leases1.74 %1.77 %0.84 %1.74 %0.84 %
Credit loss reserve to nonperforming loans223.46 %222.64 %101.12 %223.46 %101.12 %
Nonperforming loans to loans and leases0.78 %0.79 %0.83 %0.78 %0.83 %
Tier 1 leverage 10.72 %11.34 %11.64 %10.72 %11.64 %
Risk-based capital - Tier 117.15 %16.17 %15.44 %17.15 %15.44 %
(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,
 20212021202020212020
Accruing loans and leases past due 30-89 days$9,430 $8,373 $15,358 $9,430 $15,358 
Accruing loans and leases past due 90 days or more$1,202 $2,001 $4,438 $1,202 $4,438 
Nonaccrual loans and leases$14,356 $14,545 $14,634 $14,356 $14,634 
Total troubled debt restructuring$4,460 $4,464 $3,899 $4,460 $3,899 
Other real estate owned$989 $942 $3,577 $989 $3,577 
Nonperforming loans and other real estate owned$21,007 $21,952 $26,548 $21,007 $26,548 
Total nonperforming assets$24,272 $25,280 $29,493 $24,272 $29,493 
Gross charge-offs$1,151 $2,338 $1,540 $3,489 $4,444 
Recoveries$1,303 $1,610 $797 $2,913 $2,131 
Net charge-offs/(recoveries)$(152)$728 $743 $576 $2,313 















CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
June 30,
2021		December 31,
2020
    (unaudited)
ASSETS  
Cash and due from banks$677,862 $657,470 
Federal funds sold516 301 
Securities available-for-sale1,219,625 1,020,744 
Loans:  
Commercial1,521,707 1,521,711 
Residential564,859 604,652 
Consumer482,147 479,750 
 2,568,713 2,606,113 
(Less) plus:  
Net deferred loan costs2,241 4,181 
Allowance for credit losses(44,732)(47,052)
 2,526,222 2,563,242 
Restricted stock14,825 14,812 
Accrued interest receivable15,103 16,957 
Premises and equipment, net63,895 62,063 
Bank-owned life insurance106,560 95,849 
Goodwill78,592 78,592 
Other intangible assets8,112 8,972 
Other real estate owned989 1,012 
Other assets41,007 37,530 
TOTAL ASSETS$4,753,308 $4,557,544 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Deposits:  
Non-interest-bearing$780,528 $732,694 
Interest-bearing:  
Certificates of deposit exceeding the FDIC insurance limits77,647 107,764 
Other interest-bearing deposits3,130,576 2,915,487 
 3,988,751 3,755,945 
Short-term borrowings98,525 116,061 
FHLB advances5,888 5,859 
Other liabilities71,981 82,687 
TOTAL LIABILITIES4,165,145 3,960,552 
Shareholders’ equity  
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-16,096,313 in 2021 and 16,075,154 in 2020
Outstanding shares-13,048,229 in 2021 and 13,558,511 in 20202,008 2,007 
Additional paid-in capital141,240 140,820 
Retained earnings543,595 521,103 
Accumulated other comprehensive income/(loss)1,412 9,764 
Less: Treasury shares at cost-3,048,084 in 2021 and 2,516,643 in 2020(100,092)(76,702)
TOTAL SHAREHOLDERS’ EQUITY588,163 596,992 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,753,308 $4,557,544 

 


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,
 2021202020212020
 (unaudited)
INTEREST INCOME:    
Loans, including related fees$31,966 $33,224 $63,823 $68,258 
Securities:    
Taxable3,355 3,624 6,434 7,653 
Tax-exempt2,163 2,008 4,237 3,946 
Other387 400 733 802 
TOTAL INTEREST INCOME37,871 39,256 75,227 80,659 
INTEREST EXPENSE:    
Deposits2,090 3,019 4,376 7,549 
Short-term borrowings94 101 192 368 
Other borrowings59 241 118 497 
TOTAL INTEREST EXPENSE2,243 3,361 4,686 8,414 
NET INTEREST INCOME35,628 35,895 70,541 72,245 
Provision for credit losses(2,196)2,965 (1,744)5,655 
NET INTEREST INCOME AFTER PROVISION    
FOR LOAN LOSSES37,824 32,930 72,285 66,590 
NON-INTEREST INCOME:    
Trust and financial services1,313 1,288 2,618 2,822 
Service charges and fees on deposit accounts2,327 2,102 4,570 5,100 
Other service charges and fees5,039 3,869 9,281 7,199 
Securities gains (losses), net258 31 106 225 
Gain on sales of mortgage loans1,450 1,205 2,843 1,903 
Other544 281 807 622 
TOTAL NON-INTEREST INCOME10,931 8,776 20,225 17,871 
NON-INTEREST EXPENSE:    
Salaries and employee benefits16,031 14,323 31,708 30,295 
Occupancy expense2,002 2,162 4,151 4,091 
Equipment expense2,440 2,673 5,018 5,134 
FDIC Expense287 49 585 (181)
Other7,236 7,676 14,173 15,098 
TOTAL NON-INTEREST EXPENSE27,996 26,883 55,635 54,437 
INCOME BEFORE INCOME TAXES20,759 14,823 36,875 30,024 
Provision for income taxes4,145 2,899 7,384 5,919 
NET INCOME16,614 11,924 29,491 24,105 
OTHER COMPREHENSIVE INCOME    
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes1,772 3,130 (9,296)16,228 
Change in funded status of post retirement benefits, net of taxes472 384 944 788 
COMPREHENSIVE INCOME$18,858 $15,438 $21,139 $41,121 
PER SHARE DATA    
Basic and Diluted Earnings per Share$1.24 $0.87 $2.19 $1.76 
Weighted average number of shares outstanding (in thousands)13,414 13,715 13,473 13,727