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

First Financial Corporation Reports Second Quarter Results