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Section 1: 8-K (8-K)

Document


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported) April 23, 2019
 
First Financial Corporation

(Exact name of registrant as specified in its charter)
 
 
Indiana
(State or other Jurisdiction
of Incorporation)
 
000-16759
(Commission
File Number)
 
35-1546989
(IRS Employer
Identification No.)
 
 
P. O. Box 540, Terre Haute, Indiana
(Address of Principal Executive Offices)
 
47808
(Zip Code)
 
Registrant's telephone number, including area code 812-238-6334
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 

¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Item 2.02. Results of Operations and Financial Condition
 
On April 23, 2019, the Registrant issued a press release reporting its financial results for the three months ended March 31, 2019. A copy of the press release is being furnished as an exhibit to this report and is incorporated herein by reference in its entirety.
 
The foregoing information, including the information contained in the press release, is being furnished pursuant to this Item 2.02 and shall not be deemed to be “filed” for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In





addition, this information shall not be deemed to be incorporated by reference into any of the Registrant’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.
 
Item 9.01. Financial Statements and Exhibits
 
The exhibit to this report is as follows:
Exhibit Number
 
 
 
 
 
 
Press Release, April 23, 2019 issued by First Financial Corporation
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
First Financial Corporation
 
 
 
Dated   April 23, 2019
 
 
 
 
/s/Rodger A. McHargue
 
 
Rodger A. McHargue
 
 
Secretary/Treasurer and Chief Financial Officer
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


 
News Release
 
FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
 
 
For more information contact:
April 23, 2019
Rodger A. McHargue at (812) 238-6334
 
First Financial Corporation reports 1st Quarter results

TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2019. Net income for the three months ending March 31, 2019 was $9.68 million compared to $8.95 million for the same period of 2018. Diluted net income per common share was $0.79 compared to $0.73 for the same period of 2018. Return on assets for the three months ended March 31, 2019 was 1.29% compared to 1.20% for the three months ended March 31, 2018.

Average total loans for the first quarter of 2019 were $1.97 billion versus $1.91 billion for the comparable period in 2018, an increase of $64.2 million or 3.37%. Total loans outstanding increased $76.6 million, or 4.02%, from $1.91 billion as of March 31, 2018 to $1.98 billion as of March 31, 2019. On a linked quarter basis, average total loans increased $31.7 million, or 1.63%, from $1.94 billion for the quarter ending December 31, 2018.

Average total deposits for the quarter ended March 31, 2019 were $2.43 billion versus $2.45 billion as of March 31, 2018. Total deposits were $2.42 billion as of March 31, 2019 compared to $2.46 billion as of March 31, 2018.

Book value per share was $37.66 at March 31, 2019 compared to $33.86 at March 31, 2018. Shareholders equity at March 31, 2019 was $462.8 million compared to $414.9 million on March 31, 2018. The company’s tangible common equity to tangible asset ratio was 14.29% at March 31, 2019, compared to 12.98% at March 31, 2018.

Net interest income for the first quarter of 2019 was $29.4 million, an increase of 7.11% over the $27.5 million reported for the same period of 2018. The net interest margin for the quarter ended March 31, 2019 increased to 4.31% from the 4.06% reported at March 31, 2018.

Nonperforming loans as of March 31, 2019 were $16.1 million versus $20.7 million as of March 31, 2018. The ratio of nonperforming loans to total loans and leases was 0.81% as of March 31, 2019 versus 1.09% as of March 31, 2018.

The provision for loan losses for the three months ended March 31, 2019 was $1.47 million, equal to the $1.47 million provision for the first quarter of 2018. Net charge-offs were $946 thousand for the first quarter of 2019 compared to $1.1 million in the same period of 2018. The Corporation’s allowance for loan losses as of March 31, 2019 was $21.0 million compared to $20.2 million as of March 31, 2018. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2019, the same as March 31, 2018.

Non-interest income for the three months ended March 31, 2019 and 2018 was $7.6 and $8.1 million, respectively.





Non-interest expense for the three months ended March 31, 2019 was $23.7 million, which included $416 thousand of merger related expenses, compared to $23.2 million in 2018. The Corporation’s efficiency ratio was 62.29% for the quarter ending March 31, 2019 versus 63.49% for the same period in 2018.

Income tax expense for the three months ended March 31, 2019 was $2.22 million versus $1.94 million for the same period in 2018. The effective tax rate for 2019 was 18.63% compared to 17.80% for 2018.
    
Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our first quarter 2019 results. We continue to have good growth in loans and our net interest income. We are looking forward to closing our acquisition of HopFed Bancorp and excited about the opportunities presented with our expansion into new markets.”

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






























 
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2019
2018
2018
END OF PERIOD BALANCES
 
 
 
 
    Assets
 
$
3,025,565

$
3,008,718

$
2,956,654

    Deposits
 
$
2,419,556

$
2,436,727

$
2,457,189

    Loans, including net deferred loan costs
 
$
1,984,053

$
1,953,988

$
1,907,445

    Allowance for Loan Losses
 
$
20,960

$
20,436

$
20,241

    Total Equity
 
$
462,796

$
442,697

$
414,901

    Tangible Common Equity (a)
 
$
427,358

$
407,145

$
379,019

 
 
 
 
 
AVERAGE BALANCES
 
 
 
 
    Total Assets
 
$
3,004,056

$
2,976,724

$
2,979,601

    Earning Assets
 
$
2,824,524

$
2,795,260

$
2,800,498

    Investments
 
$
850,749

$
849,818

$
876,764

    Loans
 
$
1,972,333

$
1,940,651

$
1,908,118

    Total Deposits
 
$
2,428,164

$
2,448,301

$
2,449,888

    Interest-Bearing Deposits
 
$
1,999,272

$
2,017,901

$
2,028,581

    Interest-Bearing Liabilities
 
$
71,923

$
49,362

$
54,475

    Total Equity
 
$
450,666

$
435,134

$
414,340

 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
    Net Interest Income
 
$
29,426

$
29,595

$
27,473

    Net Interest Income Fully Tax Equivalent (b)
 
$
30,401

$
30,591

$
28,453

    Provision for Loan Losses
 
$
1,470

$
1,470

$
1,473

    Non-interest Income
 
$
7,636

$
8,233

$
8,103

    Non-interest Expense
 
$
23,693

$
23,098

$
23,210

    Net Income
 
$
9,682

$
11,056

$
8,954

 
 
 
 
 
PER SHARE DATA
 
 
 
 
    Basic and Diluted Net Income Per Common Share
 
$
0.79

$
0.90

$
0.73

    Cash Dividends Declared Per Common Share
 
$

$
0.51

$

    Book Value Per Common Share
 
$
37.66

$
36.06

$
33.86

    Tangible Book Value Per Common Share (c)
 
$
34.77

$
32.58

$
30.93

    Basic Weighted Average Common Shares Outstanding
 
12,282

12,265

12,248


(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
 
 
March 31,
December 31,
March 31,
 
 
2019
2018
2018
Return on average assets
 
1.29
%
1.49
%
1.20
%
Return on average common shareholder's equity
 
8.59
%
9.93
%
8.64
%
Efficiency ratio
 
62.29
%
59.49
%
63.49
%
Average equity to average assets
 
15.00
%
14.96
%
13.91
%
Net interest margin (a)
 
4.31
%
4.35
%
4.06
%
Net charge-offs to average loans and leases
 
0.19
%
0.28
%
0.24
%
Loan and lease loss reserve to loans and leases
 
1.06
%
1.05
%
1.06
%
Loan and lease loss reserve to nonperforming loans
 
130.28
%
123.27
%
97.66
%
Nonperforming loans to loans and leases
 
0.81
%
0.85
%
1.09
%
Tier 1 leverage
 
14.83
%
14.59
%
13.71
%
Risk-based capital - Tier 1
 
18.65
%
18.48
%
17.57
%
(a) Net interest margin is calculated on a tax equivalent basis.



Asset Quality
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2019
2018
2018
Accruing loans and leases past due 30-89 days
 
$
11,402

$
11,388

$
9,758

Accruing loans and leases past due 90 days or more
 
$
507

$
798

$
602

Nonaccrual loans and leases
 
$
10,808

$
10,974

$
13,206

Total troubled debt restructuring
 
$
4,774

$
4,806

$
6,919

Other real estate owned
 
$
857

$
603

$
1,923

Nonperforming loans and other real estate owned
 
$
16,946

$
17,181

$
22,650

Total nonperforming assets
 
$
20,240

$
20,439

$
38,179

Gross charge-offs
 
$
2,109

$
2,139

$
2,074

Recoveries
 
$
1,163

$
804

$
933

Net charge-offs/(recoveries)
 
$
946

$
1,335

$
1,141





















CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
March 31,
2019
 
December 31,
2018
 
   (unaudited)
ASSETS
 

 
 

Cash and due from banks
$
54,627

 
$
74,388

Federal funds sold
2,000

 

Securities available-for-sale
786,211

 
784,916

Loans:
 

 
 

Commercial
1,180,347

 
1,166,352

Residential
452,384

 
443,670

Consumer
348,193

 
341,041

 
1,980,924

 
1,951,063

(Less) plus:
 

 
 

Net deferred loan costs
3,129

 
2,925

Allowance for loan losses
(20,960
)
 
(20,436
)
 
1,963,093

 
1,933,552

Restricted stock
10,412

 
10,390

Accrued interest receivable
14,379

 
13,970

Premises and equipment, net
45,977

 
46,554

Bank-owned life insurance
86,471

 
86,186

Goodwill
34,355

 
34,355

Other intangible assets
1,083

 
1,197

Other real estate owned
857

 
603

Other assets
26,100

 
22,607

TOTAL ASSETS
$
3,025,565

 
$
3,008,718

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 

 
 

Deposits:
 

 
 

Non-interest-bearing
$
440,738

 
$
431,923

Interest-bearing:
 

 
 

Certificates of deposit exceeding the FDIC insurance limits
50,973

 
42,284

Other interest-bearing deposits
1,927,845

 
1,962,520

 
2,419,556

 
2,436,727

Short-term borrowings
56,648

 
69,656

FHLB advances
25,000

 

Other liabilities
61,565

 
59,634

TOTAL LIABILITIES
2,562,769

 
2,566,017

 
 
 
 
Shareholders’ equity
 

 
 

Common stock, $.125 stated value per share;
 
 
 
Authorized shares-40,000,000
 
 
 
Issued shares-14,632,323 in 2019 and 14,612,540 in 2018
 
 
 
Outstanding shares-12,290,212 in 2019 and 12,278,295 in 2018
1,825

 
1,824

Additional paid-in capital
76,974

 
76,774

Retained earnings
466,398

 
456,716

Accumulated other comprehensive loss
(12,927
)
 
(23,454
)
Less: Treasury shares at cost-2,342,111 in 2019 and 2,334,245 in 2018
(69,474
)
 
(69,159
)
TOTAL SHAREHOLDERS’ EQUITY
462,796

 
442,701

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
3,025,565

 
$
3,008,718



 





CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
 
Three Months Ended March 31,
 
2019
 
2018
 
(unaudited)
INTEREST INCOME:
 

 
 

Loans, including related fees
$
26,754

 
$
23,623

Securities:
 

 
 

Taxable
3,681

 
3,593

Tax-exempt
1,867

 
1,840

Other
314

 
321

TOTAL INTEREST INCOME
32,616

 
29,377

INTEREST EXPENSE:
 

 
 

Deposits
2,817

 
1,764

Short-term borrowings
323

 
99

Other borrowings
50

 
41

TOTAL INTEREST EXPENSE
3,190

 
1,904

NET INTEREST INCOME
29,426

 
27,473

Provision for loan losses
1,470

 
1,473

NET INTEREST INCOME AFTER PROVISION
 

 
 

FOR LOAN LOSSES
27,956

 
26,000

NON-INTEREST INCOME:
 

 
 

Trust and financial services
1,204

 
1,415

Service charges and fees on deposit accounts
2,624

 
2,885

Other service charges and fees
3,114

 
3,144

Securities gains, net
(4
)
 

Insurance commissions
23

 
32

Gain on sales of mortgage loans
420

 
340

Other
255

 
287

TOTAL NON-INTEREST INCOME
7,636

 
8,103

NON-INTEREST EXPENSE:
 

 
 

Salaries and employee benefits
12,755

 
12,965

Occupancy expense
1,815

 
1,781

Equipment expense
1,817

 
1,693

FDIC Expense
140

 
227

Other
7,166

 
6,545

TOTAL NON-INTEREST EXPENSE
23,693

 
23,211

INCOME BEFORE INCOME TAXES
11,899

 
10,892

Provision for income taxes
2,217

 
1,939

NET INCOME
9,682

 
8,953

OTHER COMPREHENSIVE INCOME
 

 
 

Change in unrealized gains/(losses) on securities, net of reclassifications and taxes
10,224

 
(7,699
)
Change in funded status of post retirement benefits, net of taxes
303

 
281

COMPREHENSIVE INCOME
$
20,209

 
$
1,535

PER SHARE DATA
 

 
 

Basic and Diluted Earnings per Share
$
0.79

 
$
0.73

Weighted average number of shares outstanding (in thousands)
12,282

 
12,248



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