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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.

The Corporation further reported results for the nine months ended September 30, 2024:

________________
1Non-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 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  


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