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First Financial Corporation Reports 2012 Results


February 8, 2013 - Terre Haute, IN

First Financial Corporation (NASDAQ: THFF) today announced results for the three months and year ended December 31, 2012. Net income of $32.8 and $8.6 million for the twelve and three months, respectively, compares to $37.2 and $10.2 million for the same periods of 2011. Return on assets for the twelve and three months ended December 31, 2012 was 1.13% and 1.14%, respectively, compared to 1.49% and 1.61% for the twelve and three months ended December 31, 2011. Results for 2012 include income and expenses incurred in 2012 associated with the purchase of Freestar Bank on December 30, 2011.

Net interest income for the last quarter of 2012 was $26.7 million, an increase of 9.45% over the $24.4 million reported for the same period of 2011. Net interest income for the year ended December 31, 2012 was $108.9 million compared to the $99.2 million reported for the same period of 2011, an increase of $9.7 million. The net interest margin at December 31, 2012 was 4.30%, compared to 4.50% reported at December 31, 2011.

The provision for loan losses for the three months ended December 31, 2012 was $1.5 million compared to the $1.9 million provision for the fourth quarter of 2011. For the year ended December 31, 2012 and 2011, the provision expense was $8.8 and $5.8 million, respectively.

Non-interest income for the three months ended December 31, 2012 and 2011 was $10.6 and $8.2 million, respectively, a 28.5% increase. Gains from the sale of mortgage loans comprised $0.8 million of the increase. For the year ended December 31, 2012, non-interest income increased $6.2 million to $39.5 million from the $33.3 million reported for the same period of 2011.

Non-interest expense for the three months ended December 31, 2012 was $23.6 million compared to $18.3 million in 2011. For the year ended December 31, 2012, non-interest expense was $93.1 million compared to $75.2 for the year ended December 31, 2011. 2012 non-interest expense contains the additional salary, benefits and one-time expenses related to the acquisition of Freestar Bank and the opening of four banking centers by First Financial Bank which did not exist during 2011.

Total loans at December 31, 2012 of $1.86 billion compare to the $1.89 billion reported during the same period a year ago. Deposits increased by $1.6 million to $2.27 billion. The allowance for loan losses increased 14.1% to $22.0 million from the $19.2 million at December 31, 2011. Net charge-offs for 2012 were down $0.7 million from 2011.

Book value per share was $27.93 at year end 2012, a 5.9% increase from the $26.38 at December 31, 2011. Shareholders' equity increased 7.3% to $372.1 million from $347.0 million on December 31, 2011.

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana.




CONSOLIDATED BALANCE SHEETS
December 31,
----------------------
(Dollar amounts in thousands, except per share data) 2012 2011
---------- ----------
ASSETS
Cash and due from banks $ 87,230 $ 134,280
Federal funds sold 20,800 11,725
Securities available-for-sale 691,000 666,287
Loans, net of allowance of $21,958 in 2012 and
$19,241 in 2011 1,829,978 1,874,438
Restricted Stock 21,292 22,282
Accrued interest receivable 12,024 12,947
Premises and equipment, net 47,308 40,105
Bank-owned life insurance 77,295 82,646
Goodwill 37,612 36,897
Other intangible assets 3,893 5,142
Other real estate owned 7,722 4,964
FDIC Indemnification Asset 2,632 2,384
Other assets 56,622 59,964
---------- ----------
TOTAL ASSETS $2,895,408 $2,954,061
========== ==========


LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing $ 465,954 $ 435,236
Interest-bearing:
Certificates of deposit of $100 or more 213,610 242,001
Other interest-bearing deposits 1,596,570 1,597,262
---------- ----------
2,276,134 2,274,499
Short-term borrowings 40,551 100,022
Other borrowings 119,705 146,427
Other liabilities 86,896 86,152
---------- ----------
TOTAL LIABILITIES 2,523,286 2,607,100

Shareholders' equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-14,490,609 in 2012 and 14,450,966 in
2011.
Outstanding shares-13,287,348 in 2012 and
13,197,880 in 2011 1,808 1,806
Additional paid-in capital 69,989 69,328
Retained earnings 338,342 318,130
Accumulated other comprehensive income (loss) (7,472) (10,494)
Less: Treasury shares at cost-1,203,261 in 2012 and
1,253,086 in 2011 (30,545) (31,809)
---------- ----------

TOTAL SHAREHOLDERS' EQUITY 372,122 346,961
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,895,408 $2,954,061
========== ==========


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended
December 31,
----------------------
(Dollar amounts in thousands, except per share data) 2012 2011
---------- ----------
INTEREST AND DIVIDEND INCOME:
Loans, including related fees $ 99,196 $ 91,392
Securities:
Taxable 13,542 16,161
Tax-exempt 7,246 6,779
Other 2,321 2,009
---------- ----------
TOTAL INTEREST AND DIVIDEND INCOME 122,305 116,341

INTEREST EXPENSE:
Deposits 8,520 12,127
Short-term borrowings 140 187
Other borrowings 4,733 4,833
---------- ----------
TOTAL INTEREST EXPENSE 13,393 17,147
---------- ----------

NET INTEREST INCOME 108,912 99,194

Net Provision for loan losses 8,773 5,755
---------- ----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES 100,139 93,439

NON-INTEREST INCOME:
Trust and financial services 5,804 4,544
Service charges and fees on deposit accounts 9,742 8,995
Other service charges and fees 9,710 8,289
Securities gain, net 886 6
Other-than-temporary loss
Total impairment loss (11) (110)
Loss recognized in other comprehensive income - -
---------- ----------
Net impairment loss recognized in earnings (11) (110)
insurance commissions 7,422 7,347
Gain on sale of mortgage loans 4,590 1,957
Other 1,404 2,312
---------- ----------
TOTAL NON-INTEREST INCOME 39,547 33,340
NON-INTEREST EXPENSES:
Salaries and employee benefits 56,211 45,362
Occupancy expense 5,746 4,777
Equipment expense 5,489 4,352
Federal Deposit insurance 1,949 1,804
Other 23,661 18,892
---------- ----------
TOTAL NON-INTEREST EXPENSE 93,056 75,187
---------- ----------
INCOME BEFORE INCOME TAXES 46,630 51,592

Provision for income taxes 13,818 14,397
---------- ----------
NET INCOME $ 32,812 $ 37,195
OTHER COMPREHENSIVE INCOME
Change in unrealized gains/losses on securities,
net of reclassifications and taxes $ 691 $ 8,857
Change in funded status of post retirement
benefits, net of taxes $ 2,331 $ (9,982)
---------- ----------
COMPREHENSIVE INCOME $ 35,834 $ 36,070
========== ==========
EARNINGS PER SHARE:
BASIC AND DILUTED $ 2.48 $ 2.83
========== ==========
Weighted average number of shares outstanding (in
thousands) 13,240 13,163
========== ==========


Key Ratios For the year ended
December 31, December 31,
2012 2011
------------- -------------
Return on average assets 1.13% 1.49%
Return on average common shareholder's equity 9.02% 10.90%
Average common shareholder's equity to average
assets 12.84% 12.32%
End of period tangible common equity to
tangible assets 11.58% 10.47%
Book value per share $ 28.01 $ 26.38
Tangible book value per share $ 24.88 $ 23.19
Risk-based capital - Tier 1 14.78% 13.96%
Risk-based capital - Total 15.67% 14.71%
Net interest margin 4.30% 4.50%
Efficiency Ratio 60.24% 54.47%
Net charge-offs to average loans and leases 0.45% 0.33%
Loan and lease loss reserve to loans and
leases 1.19% 1.15%
Nonperforming assets to loans and leases 2.53% 2.38%

Asset Quality For the year ended
December 31, December 31,
2012 2011
------------- -------------
Accruing loans and leases past due 90 days or
more $ 3,362 $ 2,047
Nonaccrual loans and leases 35,794 38,102
Other real estate owned 7,722 4,964
------------- -------------
Total nonperforming assets $ 46,878 $ 45,113
============= =============

For more information contact:
Rodger A. McHargue
(812) 238-6334

MarketWire

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