First Financial Corporation Reports Second Quarter Results

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First Financial Corporation (NASDAQ:THFF) reported Q2 2022 net income of $15.6 million, down from $16.6 million in Q2 2021. However, diluted earnings per share rose to $1.27 from $1.24, driven by a strong loan growth of 7.86% year-over-year. Total loans reached $2.89 billion, showing a 12.41% increase. Average total deposits rose by 10.93% to $4.42 billion. Despite the positives, return on average assets declined to 1.24%. The corporation also reported a credit loss provision of $750,000 compared to a negative provision of $2.3 million last year.

Positive

• Net income for six months was $36.5 million, up from $29.5 million in 2021.
• Diluted net income per share increased to $2.95 from $2.19 year-over-year.
• Net interest income grew by 13.59% to $40.5 million in Q2 2022.
• Total loans outstanding increased by 12.41% to $2.89 billion.

Negative

• Net income decreased in Q2 2022 compared to Q2 2021.
• Return on average assets declined to 1.24% from 1.40% in the previous year.
• Credit loss provision of $750,000 compared to a negative provision of $2.3 million last year.
• Book value per share decreased to $38.36 from $45.08 year-over-year.

TERRE HAUTE, Ind., July 26, 2022 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2022.

• Net income was $15.6 million compared to $16.6 million for the same period of 2021;

• Diluted net income per common share of $1.27 compared to $1.24 for the same period of 2021;

• Return on average assets was 1.24% compared to 1.40% for the three months ended June 30, 2021;

• Credit loss provision was $750 thousand compared to negative provision for credit losses of $2.3 million for the second quarter 2021; and

• Pre-tax, pre-provision net income was $19.7 million compared to $18.6 million for the same period in 2021.¹

The Corporation further reported results for the six months ending June 30, 2022:

• Net income was $36.5 million compared to $29.5 million for the same period of 2021;

• Diluted net income per common share of $2.95 compared to $2.19 for the same period of 2021;

• Return on average assets was 1.43% compared to 1.26% for the six months ended June 30, 2021;

• Negative provision for credit losses was $5.8 million compared to negative provision for credit losses of $1.7 million for the six months ended June 30, 2021; and

• Pre-tax, pre-provision net income was $39.4 million compared to $35.1 million for the same period in 2021.¹

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.

“We are pleased with our second quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “Loan growth continues to be strong which contributed to our fifth straight quarter of net interest income growth.”

Average Total Loans
Average total loans for the second quarter of 2022 were $2.83 billion versus $2.62 billion for the comparable period in 2021, an increase of $206 million or 7.86%.

Total Loans Outstanding
Total loans outstanding as of June 30, 2022 were $2.89 billion compared to $2.57 billion as of June 30, 2021, an increase of $319 million or 12.41%. On a linked quarter basis, total loans increased $82.9 million or 2.95% from $2.80 billion as of March 31, 2022.

Average Total Deposits
Average total deposits for the quarter ended June 30, 2022, were $4.42 billion versus $3.98 billion as of June 30, 2021, an increase of $436 million or 10.93%.

Total Deposits
Total deposits were $4.38 billion as of June 30, 2022, compared to $3.99 billion as of June 30, 2021, an increase of $395 million or 9.89%.

Book Value Per Share
Book Value per share was $38.36 at June 30, 2022, compared to $45.08 at June 30, 2021. The decrease was partially driven by the repurchase of 1,056,597 shares of the Corporation's common stock.

Shareholder Equity
Shareholder equity at June 30, 2022, was $461.5 million compared to $588.2 million on June 30, 2021. In the quarter the Corporation repurchased 404,186 shares of its common stock.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 7.48% at June 30, 2022, compared to 10.75% at June 30, 2021. The decrease was partially driven by the aforementioned share repurchases.

Net Interest Income
Net interest income for the second quarter of 2022 was $40.5 million, compared to $35.6 million reported for the same period of 2021, an increase of $4.8 million or 13.59%.

Net Interest Margin
The net interest margin for the quarter ended June 30, 2022, was 3.46% compared to the 3.23% reported at June 30, 2021. On a linked quarter basis, the net interest margin increased 30 basis points from 3.16% as of March 31, 2022.

Nonperforming Loans
Nonperforming loans as of June 30, 2022, were $13.5 million versus $20.0 million as of June 30, 2021. The ratio of nonperforming loans to total loans and leases was 0.47% as of June 30, 2022, versus 0.78% as of June 30, 2021.

Credit Loss Provision
The provision for credit losses for the three months ended June 30, 2022 was $750 thousand, compared to a negative provision for credit losses of $2.2 million for the second quarter 2021.

Net Charge-Offs
In the second quarter of 2022 net recoveries were $202 thousand compared to $152 thousand in the same period of 2021.

Allowance for Credit Losses
The Corporation’s allowance for credit losses as of June 30, 2022, was $41.5 million compared to $44.7 million as of June 30, 2021. The allowance for credit losses as a percent of total loans was 1.44% as of June 30, 2022, compared to 1.74% as of June 30, 2021.

Non-Interest Income
Non-interest income for the three months ended June 30, 2022 and 2021 was $10.3 million and $10.9 million, respectively.

Non-Interest Expense
Non-interest expense for the three months ended June 30, 2022, was $30.7 million compared to $28.0 million in 2021. The year-over-year change is, in part, impacted by the acquisition of Hancock Bancorp in the third quarter of 2021.

Efficiency Ratio
The Corporation’s efficiency ratio was 59.06% for the quarter ending June 30, 2022, versus 58.75% for the same period in 2021.

Income Taxes
Income tax expense for the three months ended June 30, 2022, was $3.7 million versus $4.1 million for the same period in 2021. The effective tax rate for 2022 was 19.17% compared to 19.97% for 2021.

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 78 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								Six Months Ended
		June 30,		March 31,			June 30,			June 30,			June 30,
			2022		2022			2021			2022			2021
END OF PERIOD BALANCES
Assets		$	5,006,648	$	5,081,794		$	4,756,284		$	5,006,648		$	4,756,284
Deposits		$	4,383,257	$	4,395,190		$	3,988,751		$	4,383,257		$	3,988,751
Loans, including net deferred loan costs		$	2,887,527	$	2,804,650		$	2,568,713		$	2,887,527		$	2,568,713
Allowance for Credit Losses		$	41,468	$	40,516		$	41,756		$	41,468		$	41,756
Total Equity		$	461,531	$	525,444		$	588,163		$	461,531		$	588,163
Tangible Common Equity(a)		$	367,210	$	431,629		$	501,459		$	367,210		$	501,459
AVERAGE BALANCES
Total Assets		$	5,046,846	$	5,149,642		$	4,751,068		$	5,098,244		$	4,675,909
Earning Assets		$	4,809,570	$	4,927,680		$	4,552,581		$	4,868,625		$	4,478,345
Investments		$	1,432,321	$	1,468,471		$	1,244,551		$	1,450,396		$	1,188,995
Loans		$	2,825,684	$	2,777,168		$	2,619,887		$	2,801,426		$	2,630,089
Total Deposits		$	4,416,542	$	4,427,806		$	3,981,243		$	4,422,174		$	3,898,974
Interest-Bearing Deposits		$	3,519,122	$	3,525,766		$	3,173,782		$	3,522,444		$	3,116,536
Interest-Bearing Liabilities		$	103,223	$	106,005		$	101,594		$	104,614		$	106,021
Total Equity		$	494,233	$	565,123		$	600,599		$	529,678		$	600,634
INCOME STATEMENT DATA
Net Interest Income		$	40,469	$	37,811		$	35,628		$	78,280		$	70,541
Net Interest Income Fully Tax Equivalent(b)		$	41,665	$	38,908		$	36,719		$	80,573		$	72,678
Provision for Credit Losses		$	750	$	(6,550	)	$	(2,196	)	$	(5,800	)	$	(1,744	)
Non-interest Income		$	10,270	$	13,738		$	10,931		$	24,008		$	20,225
Non-interest Expense		$	30,674	$	31,344		$	27,996		$	62,018		$	55,635
Net Income		$	15,613	$	20,924		$	16,614		$	36,537		$	29,491
PER SHARE DATA
Basic and Diluted Net Income Per Common Share		$	1.27	$	1.67		$	1.24		$	2.95		$	2.19
Cash Dividends Declared Per Common Share		$	0.54	$	—		$	0.53		$	0.54		$	0.53
Book Value Per Common Share		$	38.36	$	42.25		$	45.08		$	38.36		$	45.08
Tangible Book Value Per Common Share(c)		$	32.65	$	34.71		$	38.31		$	30.52		$	38.43
Basic Weighted Average Common Shares Outstanding			12,248		12,538			13,414			12,393			13,473

(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						Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2022		2022		2021		2022		2021
Return on average assets		1.24	%	1.63	%	1.40	%	1.43	%	1.26	%
Return on average common shareholder's equity		12.64	%	14.81	%	11.06	%	13.80	%	9.82	%
Efficiency ratio		59.06	%	59.54	%	58.75	%	59.30	%	59.89	%
Average equity to average assets		9.79	%	10.97	%	12.64	%	10.39	%	12.85	%
Net interest margin(a)		3.46	%	3.16	%	3.23	%	3.31	%	3.25	%
Net charge-offs to average loans and leases		(0.03	)%	0.18	%	(0.02	)%	0.07	%	0.04	%
Credit loss reserve to loans and leases		1.44	%	1.44	%	1.74	%	1.44	%	1.74	%
Credit loss reserve to nonperforming loans		306.97	%	312.60	%	223.46	%	306.97	%	223.46	%
Nonperforming loans to loans and leases		0.47	%	0.46	%	0.78	%	0.47	%	0.78	%
Tier 1 leverage		9.97	%	9.94	%	10.72	%	9.97	%	10.72	%
Risk-based capital - Tier 1		13.51	%	14.46	%	17.15	%	13.51	%	17.15	%

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

Asset Quality		Three Months Ended								Six Months Ended
		June 30,			March 31,		June 30,			June 30,		June 30,
			2022			2022		2021			2022		2021
Accruing loans and leases past due 30-89 days		$	20,273		$	13,698	$	9,430		$	20,273	$	9,430
Accruing loans and leases past due 90 days or more		$	980		$	707	$	1,202		$	980	$	1,202
Nonaccrual loans and leases		$	8,383		$	7,712	$	14,356		$	8,383	$	14,356
Total troubled debt restructuring		$	4,146		$	4,542	$	4,460		$	4,146	$	4,460
Other real estate owned		$	170		$	236	$	989		$	170	$	989
Nonperforming loans and other real estate owned		$	13,679		$	13,197	$	21,007		$	13,679	$	21,007
Total nonperforming assets		$	16,766		$	16,728	$	24,272		$	16,766	$	24,272
Gross charge-offs		$	2,411		$	3,254	$	1,151		$	5,665	$	3,489
Recoveries		$	2,613		$	2,015	$	1,303		$	4,628	$	2,913
Net charge-offs/(recoveries)		$	(202	)	$	1,239	$	(152	)	$	1,037	$	576

Non-GAAP Reconciliations	Three Months Ended June 30,
		2022				2021
($ in thousands, except EPS)
Income before Income Taxes	$	19,315			$	20,759
Provision for credit losses		750				(2,196	)
Provision for unfunded commitments		(350	)			—
Pre-tax, Pre-provision Income	$	19,715			$	18,563

Non-GAAP Reconciliations	Six Months Ended June 30,
		2022				2021
($ in thousands, except EPS)
Income before Income Taxes	$	46,070			$	36,875
Provision for credit losses		(5,800	)			(1,744	)
Provision for unfunded commitments		(850	)			—
Pre-tax, Pre-provision Income	$	39,420			$	35,131

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

	June 30, 2022				December 31, 2021
	(unaudited)
ASSETS
Cash and due from banks	$	412,136			$	682,807
Federal funds sold		11,133				308
Securities available-for-sale		1,338,452				1,364,734
Loans:
Commercial		1,707,105				1,674,066
Residential		670,641				664,509
Consumer		509,781				474,026
		2,887,527				2,812,601
(Less) plus:
Net deferred loan costs		4,961				3,294
Allowance for credit losses		(41,468	)			(48,305	)
		2,851,020				2,767,590
Restricted stock		15,620				16,200
Accrued interest receivable		16,701				16,946
Premises and equipment, net		69,022				69,522
Bank-owned life insurance		117,695				116,997
Goodwill		86,985				86,135
Other intangible assets		7,336				8,024
Other real estate owned		170				108
Other assets		80,378				45,728
TOTAL ASSETS	$	5,006,648			$	5,175,099
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing	$	886,204			$	914,933
Interest-bearing:
Certificates of deposit exceeding the FDIC insurance limits		60,311				74,015
Other interest-bearing deposits		3,436,742				3,420,621
		4,383,257				4,409,569
Short-term borrowings		84,232				93,374
FHLB advances		15,912				15,937
Other liabilities		61,716				73,643
TOTAL LIABILITIES		4,545,117				4,592,523
Shareholders’ equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-16,114,992 in 2022 and 16,096,313 in 2021
Outstanding shares-12,031,123 in 2022 and 12,629,893 in 2021		2,011				2,009
Additional paid-in capital		142,390				141,979
Retained earnings		589,169				559,139
Accumulated other comprehensive income/(loss)		(126,630	)			(2,426	)
Less: Treasury shares at cost-4,083,869 in 2022 and 3,466,420 in 2021		(145,409	)			(118,125	)
TOTAL SHAREHOLDERS’ EQUITY		461,531				582,576
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,006,648			$	5,175,099

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,
		2022				2021				2022				2021
	(unaudited)
INTEREST INCOME:
Loans, including related fees	$	34,305			$	31,966			$	66,662			$	63,823
Securities:
Taxable		6,048				3,355				10,631				6,434
Tax-exempt		2,492				2,163				4,840				4,237
Other		358				387				723				733
TOTAL INTEREST INCOME		43,203				37,871				82,856				75,227
INTEREST EXPENSE:
Deposits		2,473				2,090				4,149				4,376
Short-term borrowings		176				94				258				192
Other borrowings		85				59				169				118
TOTAL INTEREST EXPENSE		2,734				2,243				4,576				4,686
NET INTEREST INCOME		40,469				35,628				78,280				70,541
Provision for credit losses		750				(2,196	)			(5,800	)			(1,744	)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		39,719				37,824				84,080				72,285
NON-INTEREST INCOME:
Trust and financial services		1,300				1,313				2,672				2,618
Service charges and fees on deposit accounts		2,886				2,327				5,736				4,570
Other service charges and fees		4,997				5,039				9,396				9,281
Securities gains (losses), net		—				258				5				106
Gain on sales of mortgage loans		603				1,450				1,265				2,843
Other		484				544				4,934				807
TOTAL NON-INTEREST INCOME		10,270				10,931				24,008				20,225
NON-INTEREST EXPENSE:
Salaries and employee benefits		15,668				16,031				33,010				31,708
Occupancy expense		2,372				2,002				4,894				4,151
Equipment expense		2,959				2,440				5,866				5,018
FDIC Expense		542				287				970				585
Other		9,133				7,236				17,278				14,173
TOTAL NON-INTEREST EXPENSE		30,674				27,996				62,018				55,635
INCOME BEFORE INCOME TAXES		19,315				20,759				46,070				36,875
Provision for income taxes		3,702				4,145				9,533				7,384
NET INCOME		15,613				16,614				36,537				29,491
OTHER COMPREHENSIVE INCOME (LOSS)
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes		(55,919	)			1,772				(124,833	)			(9,296	)
Change in funded status of post retirement benefits, net of taxes		314				472				629				944
COMPREHENSIVE INCOME (LOSS)	$	(39,992	)		$	18,858			$	(87,667	)		$	21,139
PER SHARE DATA
Basic and Diluted Earnings per Share	$	1.27			$	1.24			$	2.95			$	2.19
Weighted average number of shares outstanding (in thousands)		12,248				13,414				12,393				13,473

 

FAQ

What are the Q2 2022 results for First Financial Corporation (THFF)?

First Financial Corporation reported a Q2 2022 net income of $15.6 million, with diluted earnings per share at $1.27.

How did net interest income perform in Q2 2022 for THFF?

Net interest income increased by 13.59% to $40.5 million in Q2 2022 compared to the prior year.

What was the total loan growth for THFF in Q2 2022?

Total loans increased by 12.41% to $2.89 billion as of June 30, 2022.

How did First Financial Corporation's return on average assets change in Q2 2022?

The return on average assets declined to 1.24% in Q2 2022 from 1.40% in Q2 2021.