First Financial Corporation Reports Third Quarter Results
TERRE HAUTE, Ind., Oct. 22, 2024 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2024. During the quarter, the Corporation closed its acquisition of SimplyBank, Dayton, Tennessee. The quarter was impacted by purchase accounting adjustments and charges, which are reflected in the results.
- Net income was $8.7 million compared to $16.3 million reported for the same period of 2023;
- Diluted net income per common share of $0.74 compared to $1.37 for the same period of 2023;
- Return on average assets was 0.64% compared to 1.35% for the three months ended September 30, 2023;
- Credit loss provision was $9.4 million compared to provision of $1.2 million for the third quarter 2023; and
- Pre-tax, pre-provision net income was $19.9 million compared to $20.5 million for the same period in 2023.1
The Corporation further reported results for the nine months ended September 30, 2024:
- Net income was $31.0 million compared to $48.3 million reported for the same period of 2023;
- Diluted net income per common share of $2.63 compared to $4.02 for the same period of 2023;
- Return on average assets was 0.82% compared to 1.33% for the nine months ended September 30, 2023;
- Credit loss provision was $14.2 million compared to provision of $4.8 million for the nine months ended September 30, 2023; and
- Pre-tax, pre-provision net income was $51.1 million compared to $63.1 million for the same period in 2023.1
________________
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.
Average Total Loans
Average total loans for the third quarter of 2024 were $3.71 billion versus $3.15 billion for the comparable period in 2023, an increase of $558 million or 17.74%. On a linked quarter basis, average loans increased $508 million or 15.89% from $3.20 billion as of June 30, 2024. Increases in average loans over both periods were mostly a result of the acquisition of SimplyBank as further detailed in Total Loans Outstanding section below.
Total Loans Outstanding
Total loans outstanding as of September 30, 2024, were $3.72 billion compared to $3.12 billion as of September 30, 2023, an increase of $598 million or 19.17%. On a linked quarter basis, total loans increased $511 million or 15.96% from $3.20 billion as of June 30, 2024. The main driver of the increase was $467 million in loans acquired in the SimplyBank acquisition. Organic growth was primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans.
Norman D. Lowery, President and Chief Executive Officer, commented, “During the quarter, we closed the acquisition of SimplyBank, which gives us access to very attractive markets in Southeast Tennessee and Northwest Georgia. We also experienced another sound quarter of loan and net interest income growth. During the quarter our net interest margin expanded, and we expect continued improvement in coming quarters.”
Average Total Deposits
Average total deposits for the quarter ended September 30, 2024, were $4.71 billion versus $4.00 billion as of September 30, 2023, an increase of $705 million or 17.63%. Increases in average deposits over both periods were mostly a result of the acquisition of SimplyBank as further detailed in Total Deposits section below.
Total Deposits
Total deposits were $4.72 billion as of September 30, 2024, compared to $4.04 billion as of September 30, 2023, a $676 million increase, or 16.74%. On a linked quarter basis, total deposits increased $585.2 million, or 14.16%. $622 million in deposits were acquired in the SimplyBank acquisition. Non-interest bearing deposits were $831.6 million, and time deposits were $791.1 million as of September 30, 2024, compared to $770.5 million and $471.6 million, respectively for the same period of 2023.
Shareholders’ Equity
Shareholders’ equity at September 30, 2024, was $566.0 million compared to $470.2 million on September 30, 2023. During the last twelve months, the Corporation has not repurchased any shares of its common stock. 518,860 shares remain available for repurchase under the current repurchase authorization. The Corporation paid a $0.45 per share quarterly dividend in July and declared a $0.45 quarterly dividend, which was paid on October 15, 2024.
Book Value Per Share
Book Value per share was $47.93 as of September 30, 2024, compared to $40.00 as of September 30, 2023, an increase of $7.93 per share, or 19.82%. Tangible Book Value per share was $37.84 as of September 30, 2024, compared to $32.10 as of September 30, 2023, an increase of $5.74 per share, or 17.88%.
Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 8.33% at September 30, 2024, compared to 8.04% at September 30, 2023.
Net Interest Income
Net interest income for the third quarter of 2024 was $47.2 million, compared to $41.2 million reported for the same period of 2023, an increase of $6.0 million, or 14.63%.
Net Interest Margin
The net interest margin for the quarter ended September 30, 2024, was 3.78% compared to the 3.74% reported at September 30, 2023. On a linked quarterly basis, the net interest margin increased 21 basis points from 3.57% at June 30, 2024.
Nonperforming Loans
Nonperforming loans as of September 30, 2024, were $14.1 million versus $12.6 million as of September 30, 2023. The increase was due primarily to the SimplyBank acquisition. The ratio of nonperforming loans to total loans and leases was 0.38% as of September 30, 2024, versus 0.40% as of September 30, 2023.
Credit Loss Provision
The provision for credit losses for the three months ended September 30, 2024, was $9.4 million, compared to $1.2 million for the third quarter 2023. The Corporation recorded $5.5 million in provision for the acquisition of SimplyBank. The increase in provision was also related to one previously identified credit, reflecting further deterioration in collateral values during the quarter.
Net Charge-Offs
Third quarter net charge-offs were $4.6 million compared to $2.1 million in the same period of 2023.
Allowance for Credit Losses
The Corporation’s allowance for credit losses as of September 30, 2024, was $46.2 million compared to $39.0 million as of September 30, 2023. The allowance for credit losses as a percent of total loans was 1.24% as of September 30, 2024, compared to 1.25% as of September 30, 2023. On a linked quarter basis, the allowance for credit losses as a percent of total loans increased 4 basis points from 1.20% as of June 30, 2024. The Corporation recorded $8.5 million in allowance for the acquisition of SimplyBank, which included $3 million to record purchased credit deteriorated (“PCD”) reserves.
Non-Interest Income
Non-interest income for the three months ended September 30, 2024 and 2023 was $11.2 million and $11.6 million, respectively.
Non-Interest Expense
Non-interest expense for the three months ended September 30, 2024, was $38.6 million compared to $32.3 million in 2023. This includes $844 thousand of acquisition-related expenses during the quarter, as well as an overall increase in operating expenses as a result of the acquisition.
Efficiency Ratio
The Corporation’s efficiency ratio was 64.43% for the quarter ending September 30, 2024, versus 59.57% for the same period in 2023.
Income Taxes
Income tax expense for the three months ended September 30, 2024, was $1.7 million versus $3.0 million for the same period in 2023. The effective tax rate for 2024 was 16.44% compared to 17.37% for 2023.
About First Financial Corporation
First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A., which is the fifth oldest national bank in the United States, operating 83 banking centers in Illinois, Indiana, Kentucky, Tennessee, and Georgia. 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, | |||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||
| END OF PERIOD BALANCES | |||||||||||||||
| Assets | $ | 5,483,351 | $ | 4,891,068 | $ | 4,784,806 | $ | 5,483,351 | $ | 4,784,806 | |||||
| Deposits | $ | 4,717,489 | $ | 4,132,327 | $ | 4,040,995 | $ | 4,717,489 | $ | 4,040,995 | |||||
| Loans, including net deferred loan costs | $ | 3,715,235 | $ | 3,204,009 | $ | 3,117,626 | $ | 3,715,235 | $ | 3,117,626 | |||||
| Allowance for Credit Losses | $ | 46,169 | $ | 38,334 | $ | 39,034 | $ | 46,169 | $ | 39,034 | |||||
| Total Equity | $ | 565,951 | $ | 530,670 | $ | 470,168 | $ | 565,951 | $ | 470,168 | |||||
| Tangible Common Equity (a) | $ | 446,786 | $ | 438,569 | $ | 377,367 | $ | 446,786 | $ | 377,367 | |||||
| AVERAGE BALANCES | |||||||||||||||
| Total Assets | $ | 5,483,572 | $ | 4,813,308 | $ | 4,814,251 | $ | 5,033,748 | $ | 4,828,165 | |||||
| Earning Assets | $ | 5,165,520 | $ | 4,556,839 | $ | 4,575,996 | $ | 4,762,940 | $ | 4,590,258 | |||||
| Investments | $ | 1,342,037 | $ | 1,279,278 | $ | 1,351,433 | $ | 1,309,879 | $ | 1,384,941 | |||||
| Loans | $ | 3,705,779 | $ | 3,197,695 | $ | 3,147,317 | $ | 3,361,207 | $ | 3,104,623 | |||||
| Total Deposits | $ | 4,705,614 | $ | 4,113,826 | $ | 4,000,302 | $ | 4,288,426 | $ | 4,124,520 | |||||
| Interest-Bearing Deposits | $ | 4,403,454 | $ | 3,413,752 | $ | 3,222,633 | $ | 3,714,432 | $ | 3,309,111 | |||||
| Interest-Bearing Liabilities | $ | 157,227 | $ | 152,303 | $ | 309,948 | $ | 176,985 | $ | 197,142 | |||||
| Total Equity | $ | 546,912 | $ | 517,890 | $ | 493,764 | $ | 529,174 | $ | 494,428 | |||||
| INCOME STATEMENT DATA | |||||||||||||||
| Net Interest Income | $ | 47,170 | $ | 39,294 | $ | 41,150 | $ | 125,384 | $ | 127,672 | |||||
| Net Interest Income Fully Tax Equivalent (b) | $ | 48,630 | $ | 40,673 | $ | 42,539 | $ | 129,600 | $ | 131,774 | |||||
| Provision for Credit Losses | $ | 9,400 | $ | 2,966 | $ | 1,200 | $ | 14,166 | $ | 4,800 | |||||
| Non-interest Income | $ | 11,223 | $ | 9,905 | $ | 11,627 | $ | 30,559 | $ | 31,455 | |||||
| Non-interest Expense | $ | 38,564 | $ | 32,651 | $ | 32,265 | $ | 104,637 | $ | 95,932 | |||||
| Net Income | $ | 8,741 | $ | 11,369 | $ | 16,285 | $ | 31,034 | $ | 48,252 | |||||
| PER SHARE DATA | |||||||||||||||
| Basic and Diluted Net Income Per Common Share | $ | 0.74 | $ | 0.96 | $ | 1.37 | $ | 2.63 | $ | 4.02 | |||||
| Cash Dividends Declared Per Common Share | $ | 0.45 | $ | 0.45 | $ | — | $ | 1.35 | $ | 0.54 | |||||
| Book Value Per Common Share | $ | 47.93 | $ | 44.92 | $ | 40.00 | $ | 47.93 | $ | 40.00 | |||||
| Tangible Book Value Per Common Share (c) | $ | 36.22 | $ | 36.04 | $ | 33.69 | $ | 37.84 | $ | 32.10 | |||||
| Basic Weighted Average Common Shares Outstanding | 11,808 | 11,814 | 11,901 | 11,809 | 11,993 | ||||||||||
________________
(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, | |||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||
| Return on average assets | 0.64 | % | 0.94 | % | 1.35 | % | 0.82 | % | 1.33 | % | |
| Return on average common shareholder's equity | 6.39 | % | 8.78 | % | 13.19 | % | 7.80 | % | 12.98 | % | |
| Efficiency ratio | 64.43 | % | 64.56 | % | 59.57 | % | 65.33 | % | 58.77 | % | |
| Average equity to average assets | 9.97 | % | 10.76 | % | 10.26 | % | 10.51 | % | 10.24 | % | |
| Net interest margin (a) | 3.78 | % | 3.57 | % | 3.74 | % | 3.63 | % | 3.83 | % | |
| Net charge-offs to average loans and leases | 0.49 | % | 0.59 | % | 0.24 | % | 0.43 | % | 0.24 | % | |
| Credit loss reserve to loans and leases | 1.24 | % | 1.20 | % | 1.25 | % | 1.24 | % | 1.25 | % | |
| Credit loss reserve to nonperforming loans | 326.65 | % | 240.85 | % | 310.19 | % | 326.65 | % | 310.19 | % | |
| Nonperforming loans to loans and leases | 0.38 | % | 0.50 | % | 0.40 | % | 0.38 | % | 0.40 | % | |
| Tier 1 leverage | 10.25 | % | 12.14 | % | 11.72 | % | 10.25 | % | 11.72 | % | |
| Risk-based capital - Tier 1 | 13.63 | % | 14.82 | % | 14.61 | % | 13.63 | % | 14.61 | % | |
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(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, | |||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Accruing loans and leases past due 30-89 days | $ | 16,391 | $ | 14,913 | $ | 15,961 | $ | 16,391 | $ | 15,961 | |||||
| Accruing loans and leases past due 90 days or more | $ | 1,517 | $ | 1,353 | $ | 1,370 | $ | 1,517 | $ | 1,370 | |||||
| Nonaccrual loans and leases | $ | 12,617 | $ | 14,563 | $ | 11,214 | $ | 12,617 | $ | 11,214 | |||||
| Other real estate owned | $ | 169 | $ | 170 | $ | 63 | $ | 169 | $ | 63 | |||||
| Nonperforming loans and other real estate owned | $ | 14,303 | $ | 16,086 | $ | 12,647 | $ | 14,303 | $ | 12,647 | |||||
| Total nonperforming assets | $ | 17,179 | $ | 18,978 | $ | 15,671 | $ | 17,179 | $ | 15,671 | |||||
| Gross charge-offs | $ | 6,936 | $ | 6,091 | $ | 3,601 | $ | 16,219 | $ | 11,520 | |||||
| Recoveries | $ | 2,365 | $ | 1,414 | $ | 1,528 | $ | 5,449 | $ | 5,975 | |||||
| Net charge-offs/(recoveries) | $ | 4,571 | $ | 4,677 | $ | 2,073 | $ | 10,770 | $ | 5,545 | |||||
| Non-GAAP Reconciliations | Three Months Ended September 30, | |||||||
| 2024 | 2023 | |||||||
| ($in thousands, except EPS) | ||||||||
| Income before Income Taxes | $ | 10,429 | $ | 19,312 | ||||
| Provision for credit losses | 9,400 | 1,200 | ||||||
| Provision for unfunded commitments | 100 | — | ||||||
| Pre-tax, Pre-provision Income | $ | 19,929 | $ | 20,512 | ||||
| Non-GAAP Reconciliations | Nine Months Ended September 30, | |||||||
| 2024 | 2023 | |||||||
| ($ in thousands, except EPS) | ||||||||
| Income before Income Taxes | $ | 37,140 | $ | 58,395 | ||||
| Provision for credit losses | 14,166 | 4,800 | ||||||
| Provision for unfunded commitments | (200 | ) | (100 | ) | ||||
| Pre-tax, Pre-provision Income | $ | 51,106 | $ | 63,095 | ||||
| CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except per share data) | ||||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 77,312 | $ | 76,759 | ||||
| Federal funds sold | 1,356 | 282 | ||||||
| Securities available-for-sale | 1,271,992 | 1,259,137 | ||||||
| Loans: | ||||||||
| Commercial | 2,112,738 | 1,817,526 | ||||||
| Residential | 924,276 | 695,788 | ||||||
| Consumer | 671,353 | 646,758 | ||||||
| 3,708,367 | 3,160,072 | |||||||
| (Less) plus: | ||||||||
| Net deferred loan costs | 6,868 | 7,749 | ||||||
| Allowance for credit losses | (46,169 | ) | (39,767 | ) | ||||
| 3,669,066 | 3,128,054 | |||||||
| Restricted stock | 15,366 | 15,364 | ||||||
| Accrued interest receivable | 25,386 | 24,877 | ||||||
| Premises and equipment, net | 82,213 | 67,286 | ||||||
| Bank-owned life insurance | 128,242 | 114,122 | ||||||
| Goodwill | 93,363 | 86,985 | ||||||
| Other intangible assets | 25,802 | 5,586 | ||||||
| Other real estate owned | 169 | 107 | ||||||
| Other assets | 93,084 | 72,587 | ||||||
| TOTAL ASSETS | $ | 5,483,351 | $ | 4,851,146 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Deposits: | ||||||||
| Non-interest-bearing | $ | 831,575 | $ | 750,335 | ||||
| Interest-bearing: | ||||||||
| Certificates of deposit exceeding the FDIC insurance limits | 159,618 | 92,921 | ||||||
| Other interest-bearing deposits | 3,726,296 | 3,246,812 | ||||||
| 4,717,489 | 4,090,068 | |||||||
| Short-term borrowings | 84,363 | 67,221 | ||||||
| FHLB advances | 30,456 | 108,577 | ||||||
| Other liabilities | 85,092 | 57,304 | ||||||
| TOTAL LIABILITIES | 4,917,400 | 4,323,170 | ||||||
| Shareholders’ equity | ||||||||
| Common stock, $.125 stated value per share; | ||||||||
| Authorized shares-40,000,000 | ||||||||
| Issued shares-16,165,023 in 2024 and 16,137,220 in 2023 | ||||||||
| Outstanding shares-11,808,304 in 2024 and 11,795,024 in 2023 | 2,016 | 2,014 | ||||||
| Additional paid-in capital | 144,785 | 144,152 | ||||||
| Retained earnings | 677,155 | 663,726 | ||||||
| Accumulated other comprehensive income/(loss) | (102,800 | ) | (127,087 | ) | ||||
| Less: Treasury shares at cost-4,356,719 in 2024 and 4,342,196 in 2023 | (155,205 | ) | (154,829 | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 565,951 | 527,976 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 5,483,351 | $ | 4,851,146 | ||||
| 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, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| (unaudited) | ||||||||||||||
| INTEREST INCOME: | ||||||||||||||
| Loans, including related fees | $ | 61,367 | $ | 49,146 | $ | 162,878 | $ | 140,220 | ||||||
| Securities: | ||||||||||||||
| Taxable | 6,319 | 6,164 | 18,083 | 18,631 | ||||||||||
| Tax-exempt | 2,715 | 2,661 | 7,919 | 7,937 | ||||||||||
| Other | 1,294 | 752 | 2,989 | 2,864 | ||||||||||
| TOTAL INTEREST INCOME | 71,695 | 58,723 | 191,869 | 169,652 | ||||||||||
| INTEREST EXPENSE: | ||||||||||||||
| Deposits | 22,197 | 13,627 | 59,622 | 35,111 | ||||||||||
| Short-term borrowings | 993 | 1,923 | 2,928 | 4,025 | ||||||||||
| Other borrowings | 1,335 | 2,023 | 3,935 | 2,844 | ||||||||||
| TOTAL INTEREST EXPENSE | 24,525 | 17,573 | 66,485 | 41,980 | ||||||||||
| NET INTEREST INCOME | 47,170 | 41,150 | 125,384 | 127,672 | ||||||||||
| Provision for credit losses | 9,400 | 1,200 | 14,166 | 4,800 | ||||||||||
| NET INTEREST INCOME AFTER PROVISION | ||||||||||||||
| FOR LOAN LOSSES | 37,770 | 39,950 | 111,218 | 122,872 | ||||||||||
| NON-INTEREST INCOME: | ||||||||||||||
| Trust and financial services | 1,251 | 1,140 | 3,903 | 3,642 | ||||||||||
| Service charges and fees on deposit accounts | 8,139 | 7,099 | 21,576 | 20,971 | ||||||||||
| Other service charges and fees | 191 | 213 | 700 | 613 | ||||||||||
| Securities gains (losses), net | 103 | — | 104 | — | ||||||||||
| Interchange income | 177 | — | 490 | 47 | ||||||||||
| Loan servicing fees | 274 | 447 | 957 | 997 | ||||||||||
| Gain on sales of mortgage loans | 411 | 321 | 886 | 811 | ||||||||||
| Other | 677 | 2,407 | 1,943 | 4,374 | ||||||||||
| TOTAL NON-INTEREST INCOME | 11,223 | 11,627 | 30,559 | 31,455 | ||||||||||
| NON-INTEREST EXPENSE: | ||||||||||||||
| Salaries and employee benefits | 18,521 | 17,159 | 53,231 | 51,263 | ||||||||||
| Occupancy expense | 2,556 | 2,389 | 7,116 | 7,120 | ||||||||||
| Equipment expense | 4,280 | 3,580 | 12,736 | 10,404 | ||||||||||
| FDIC Expense | 558 | 613 | 1,721 | 1,977 | ||||||||||
| Other | 12,649 | 8,524 | 29,833 | 25,168 | ||||||||||
| TOTAL NON-INTEREST EXPENSE | 38,564 | 32,265 | 104,637 | 95,932 | ||||||||||
| INCOME BEFORE INCOME TAXES | 10,429 | 19,312 | 37,140 | 58,395 | ||||||||||
| Provision for income taxes | 1,688 | 3,027 | 6,106 | 10,143 | ||||||||||
| NET INCOME | 8,741 | 16,285 | 31,034 | 48,252 | ||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||
| Change in unrealized gains/(losses) on securities, net of reclassifications and taxes | 31,628 | (34,934 | ) | 24,067 | (36,504 | ) | ||||||||
| Change in funded status of post retirement benefits, net of taxes | 73 | 146 | 220 | 440 | ||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 40,442 | $ | (18,503 | ) | $ | 55,321 | $ | 12,188 | |||||
| PER SHARE DATA | ||||||||||||||
| Basic and Diluted Earnings per Share | $ | 0.74 | $ | 1.37 | $ | 2.63 | $ | 4.02 | ||||||
| Weighted average number of shares outstanding (in thousands) | 11,808 | 11,901 | 11,809 | 11,993 | ||||||||||
