thff-20200731
00007145622020Q2FALSEOne First Financial PlazaTerre HauteIN00007145622020-07-292020-07-2900007145622020-04-292020-04-29

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) July 31, 2020
 
FIRST FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Commission File Number: 0-16759
  
Indiana35-1546989
(State or other jurisdiction(I.R.S. Employer
incorporation or organization)Identification No.)
One First Financial Plaza, Terre Haute, IN
47807
(Address of principal executive office)(Zip Code)
(812)238-6000
(Registrant's telephone number, including area code)
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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.125 per shareTHFFThe NASDAQ Stock Market LLC

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 July 31, 2020, the Registrant issued a press release reporting its financial results for the three months ended June 30, 2020. 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, July 31, 2020 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   July 31, 2020 
 /s/Rodger A. McHargue
 Rodger A. McHargue
 Secretary/Treasurer and Chief Financial Officer
 


 Document

News Release
 
FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
 
 
First Financial Corporation Reports Second Quarter Results

Terre Haute, Indiana, July 31, 2020 – First Financial Corporation (NASDAQ:THFF) today announced results for the second quarter of 2020. For the three months ending June 30, 2020:

•Net income was $11.9 million compared to $12.6 million for the same period of 2019;

•Diluted net income per common share of $0.87 compared to $1.02 for the same period of 2019; and

•Return on average assets was 1.10% compared to 1.66% for the three months ended June 30, 2019.

The Corporation further reported results for the six months ending June 30, 2020:

•Net income was $24.1 million compared to $22.3 million for the same period of 2019;

•Diluted net income per common share of $1.76 compared to $1.81 for the same period of 2019; and

•Return on average assets was 1.16% compared to 1.47% for the six months ended June 30, 2019.

“In light of COVID-19 and the stay at home orders in the four states we do business in we are pleased with our second quarter results” said Norman L. Lowery, Chairman and Chief Executive Officer. “While eager to get back to normal operations, we have been cautious in the steps we have taken as the number of COVID 19 cases continue to increase across our footprint. Protecting the health of our associates, customers and their families has been, and will continue to be, our number one priority. During the second quarter much of our attention was devoted to the Small Business Administration’s Paycheck Protection Program enacted by the Coronavirus Aid, Relief and Economics Security Act (CARES). We are pleased we were able to fund 1,734 loans totaling $170 million to secure twenty-four thousand jobs which are so important to our customers, their families and the economy of the communities we serve. We are also pleased that during this challenging quarter we were able to assist many of our customers to take advantage of the current low interest rates by refinancing their home mortgages, lowering their payments or allowing them to purchase a new home.”

Average Total Loans
Average total loans for the second quarter of 2020 were $2.73 billion versus $1.98 billion for the comparable period in 2019, an increase of $748.8 million or 37.84%.




Total Loans Outstanding
Total loans outstanding increased $770.7 million, or 38.40%, from $2.01 billion as of June 30, 2019 to $2.78 billion as of June 30, 2020. On a linked quarter basis, total loans increased $159.3 million from $2.62 billion for the quarter ending March 31, 2020.

“Because of COVID 19 each of the four states in which we do business have imposed restrictions which affect our operations and the business of our customers” stated Lowery. “While we have not experienced a significant increase in charge-offs, we have continued to increase reserves in response to the effect of the pandemic on asset quality. We have also sought to meet the needs of our customers by assisting them with reasonable loan accommodations. To date, we have approved and processed requests totaling $343 million across all portfolios. Commercial loan requests comprise $321 million of this total."

Average Total Deposits
Average total deposits for the quarter ended June 30, 2020, were $3.53 billion versus $2.46 billion as of June 30, 2019, an increase of $1.06 billion or 43.11%.

Total Deposits
Total deposits were $3.57 billion as of June 30, 2020, compared to $2.46 billion as of June 30, 2019, an increase of $1.11 billion or 44.94%. On a linked quarter basis, total deposits increased $278.7 million from $3.29 billion for the quarter ending March 31, 2020.

Book Value Per Share
Book Value per share was $43.04 at June 30, 2020, compared to $38.88 at June 30, 2019.

Shareholder Equity
Shareholder equity at June 30, 2020, was $590.3 million compared to $477.8 million on June 30, 2019.

Tangible Common Equity to Tangible Asset Ratio
The Corporation’s tangible common equity to tangible asset ratio was 11.73% at June 30, 2020, compared to 14.61% at June 30, 2019.

Net Interest Income
Net interest income for the second quarter of 2020 was $35.9 million, an increase of 20.65% over the $29.8 million reported for the same period of 2019.

Net Interest Margin
The net interest margin for the quarter ended June 30, 2020, was 3.97% compared to the 4.33% reported at June 30, 2019.

Nonperforming Loans
Nonperforming loans as of June 30, 2020, were $23.0 million versus $15.2 million as of June 30, 2019. The ratio of nonperforming loans to total loans and leases was 0.83% as of June 30, 2020, versus 0.76% as of June 30, 2019.

Loan Loss Provision
The provision for loan losses for the three months ended June 30, 2020, was $2.97 million compared to the $230 thousand provision for the second quarter of 2019. The Corporation increased the allowance for loan and lease losses by $1.0 million in the second quarter of 2020 directly related to the estimate of losses resulting from the COVID-19 pandemic.



Net Charge-Offs
Net charge-offs were $743 thousand for the second quarter of 2020 compared to $940 thousand in the same period of 2019.

Allowance for Loan Losses
The Corporation’s allowance for loan losses as of June 30, 2020, was $23.3 million compared to $20.3 million as of June 30, 2019. The allowance for loan losses as a percent of total loans was 0.84% as of June 30, 2020, compared to 1.01% as of June 30, 2019. The decrease is primarily due to acquired loans being recorded at fair value. The Corporation's fair value adjustment due to purchased credit impaired loans was $5.9 million as of June 30, 2020.

Current Expected Credit Losses
As provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES) the Corporation has elected to defer the implementation of the Current Expected Credit Loss accounting standard.

Non-Interest Income
Non-interest income for the three months ended June 30, 2020 and 2019 was $8.8 and $9.7 million, respectively. In the second quarter 2019, we recorded a $1.5 million incentive received from a third-party vendor.

Non-Interest Expense
Non-interest expense for the three months ended June 30, 2020, was $26.9 million compared to $23.5 million in 2019.

Efficiency Ratio
The Corporation’s efficiency ratio was 58.78% for the quarter ending June 30, 2020, versus 58.06% for the same period in 2019.

Income Taxes
Income tax expense for the six months ended June 30, 2020, was $5.92 million versus $5.42 million for the same period in 2019. The effective tax rate for 2020 was 19.71% compared to 19.59% for 2019.

“In these unprecedented times, we are proud we continue to meet the financial needs of our customers and the communities we serve. I am proud of our associates and their unwavering commitment.” Lowery stated.




About First Financial Corporation
First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A. and The Morris Plan Company of Terre Haute, Inc. First Financial Bank N.A. is the fifth oldest national bank in the United States, operating 81 banking centers in Illinois, Indiana, Kentucky and Tennessee. The Morris Plan Company of Terre Haute, Inc. is a state industrial chartered financial institution operating one office in Terre Haute, Indiana. 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 EndedYear Ended
June 30,March 31,June 30,June 30,June 30,
20202020201920202019
END OF PERIOD BALANCES
    Assets$4,368,112  $4,062,414  $3,064,212  $4,368,112  $3,064,212  
    Deposits$3,569,893  $3,291,231  $2,463,018  $3,569,893  $2,463,018  
    Loans, including net deferred loan costs$2,777,083  $2,622,637  $2,010,198  $2,777,083  $2,010,198  
    Allowance for Loan Losses$23,285  $21,063  $20,250  $23,285  $20,250  
    Total Equity$590,284  $581,771  $477,820  $590,284  $477,820  
    Tangible Common Equity (a)
$501,863  $492,943  $442,496  $501,863  $442,496  
AVERAGE BALANCES
    Total Assets$4,317,011  $4,022,789  $3,033,788  $4,169,900  $3,018,922  
    Earning Assets$3,720,477  $3,625,679  $2,836,110  $3,673,078  $2,830,317  
    Investments$989,545  $988,523  $851,723  $989,034  $851,236  
    Loans$2,727,820  $2,637,036  $1,978,991  $2,682,428  $1,975,662  
    Total Deposits$3,526,529  $3,270,627  $2,464,212  $3,398,578  $2,446,188  
    Interest-Bearing Deposits$2,858,594  $2,739,394  $2,032,886  $2,798,994  $2,016,079  
    Interest-Bearing Liabilities$121,791  $106,843  $39,269  $114,317  $55,596  
    Total Equity$591,522  $569,696  $471,156  $580,609  $460,911  
INCOME STATEMENT DATA
    Net Interest Income$35,895  $36,350  $29,752  $72,245  $59,178  
    Net Interest Income Fully Tax Equivalent (b)
$36,962  $37,409  $30,721  $74,371  $61,122  
    Provision for Loan Losses$2,965  $2,690  $230  $5,655  $1,700  
    Non-interest Income$8,776  $9,095  $9,743  $17,871  $17,379  
    Non-interest Expense$26,883  $27,554  $23,492  $54,437  $47,185  
    Net Income$11,924  $12,181  $12,569  $24,105  $22,251  
PER SHARE DATA
    Basic and Diluted Net Income Per Common Share$0.87  $0.89  $1.02  $1.76  $1.81  
    Cash Dividends Declared Per Common Share$0.52  $—  $0.52  $0.52  $0.52  
    Book Value Per Common Share$43.04  $42.42  $38.88  $43.04  $38.88  
    Tangible Book Value Per Common Share (c)
$36.68  $35.94  $35.46  $36.59  $36.00  
    Basic Weighted Average Common Shares Outstanding13,715  13,740  12,290  13,727  12,286  
(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 RatiosThree Months EndedSix Months Ended
 June 30,March 31,June 30,June 30,June 30,
 20202020201920202019
Return on average assets1.10 %1.21 %1.66 %1.16 %1.47 %
Return on average common shareholder's equity8.06 %8.55 %10.67 %8.30 %9.66 %
Efficiency ratio58.78 %59.25 %58.06 %59.02 %60.11 %
Average equity to average assets13.70 %14.16 %15.53 %13.92 %15.27 %
Net interest margin (a)
3.97 %4.13 %4.33 %4.05 %4.32 %
Net charge-offs to average loans and leases0.11 %0.24 %0.49 %0.17 %0.19 %
Loan and lease loss reserve to loans and leases0.84 %0.80 %1.01 %0.84 %1.01 %
Loan and lease loss reserve to nonperforming loans101.12 %119.70 %133.14 %101.12 %133.14 %
Nonperforming loans to loans and leases0.83 %0.67 %0.76 %0.83 %0.76 %
Tier 1 leverage 11.64 %12.38 %14.83 %11.64 %14.83 %
Risk-based capital - Tier 115.44 %16.19 %18.65 %15.44 %18.65 %
(a) Net interest margin is calculated on a tax equivalent basis.


Asset QualityThree Months EndedSix Months Ended
 June 30,March 31,June 30,June 30,June 30,
 20202020201920202019
Accruing loans and leases past due 30-89 days$15,358  $27,037  $8,296  $15,358  $8,296  
Accruing loans and leases past due 90 days or more$4,438  $1,430  $683  $4,438  $683  
Nonaccrual loans and leases$14,634  $12,011  $9,985  $14,634  $9,985  
Total troubled debt restructuring$3,899  $4,156  $4,541  $3,899  $4,541  
Other real estate owned$3,577  $3,894  $498  $3,577  $498  
Nonperforming loans and other real estate owned$26,548  $21,491  $15,707  $26,548  $15,707  
Total nonperforming assets$29,493  $24,724  $19,040  $29,493  $19,040  
Gross charge-offs$1,540  $2,904  $1,906  $4,444  $4,015  
Recoveries$797  $1,334  $966  $2,131  $2,129  
Net charge-offs/(recoveries)$743  $1,570  $940  $2,313  $1,886  















CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
June 30,
2020		December 31,
2019
    (unaudited)
ASSETS  
Cash and due from banks$386,507  $127,426  
Federal funds sold—  7,500  
Securities available-for-sale907,433  926,717  
Loans:  
Commercial1,694,376  1,584,447  
Residential657,657  682,077  
Consumer425,601  386,006  
 2,777,634  2,652,530  
(Less) plus:  
Net deferred loan costs(551) 3,860  
Allowance for loan losses(23,285) (19,943) 
 2,753,798  2,636,447  
Restricted stock15,200  15,394  
Accrued interest receivable17,205  18,523  
Premises and equipment, net63,270  62,576  
Bank-owned life insurance95,013  94,251  
Goodwill78,592  78,592  
Other intangible assets9,829  10,643  
Other real estate owned3,577  3,625  
Other assets37,688  41,556  
TOTAL ASSETS$4,368,112  $4,023,250  
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Deposits:  
Non-interest-bearing$681,155  $547,189  
Interest-bearing:  
Certificates of deposit exceeding the FDIC insurance limits109,548  126,738  
Other interest-bearing deposits2,779,190  2,601,430  
 3,569,893  3,275,357  
Short-term borrowings100,096  80,119  
Other liabilities79,722  79,193  
TOTAL LIABILITIES3,777,828  3,465,642  
Shareholders’ equity  
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-16,075,154 in 2020 and 16,055,466 in 2019
Outstanding shares-13,714,524 in 2020 and 13,741,825 in 20192,006  2,005  
Additional paid-in capital140,103  139,694  
Retained earnings509,029  492,055  
Accumulated other comprehensive income/(loss)9,515  (7,501) 
Less: Treasury shares at cost-2,360,630 in 2020 and 2,313,641 in 2019(70,369) (68,645) 
TOTAL SHAREHOLDERS’ EQUITY590,284  557,608  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$4,368,112  $4,023,250  

 


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,
 2020201920202019
 (unaudited)
INTEREST INCOME:    
Loans, including related fees$33,224  $27,533  $68,258  $54,287  
Securities:    
Taxable3,624  3,516  7,653  7,197  
Tax-exempt2,008  1,873  3,946  3,740  
Other400  337  802  651  
TOTAL INTEREST INCOME39,256  33,259  80,659  65,875  
INTEREST EXPENSE:    
Deposits3,019  3,316  7,549  6,133  
Short-term borrowings101  158  368  481  
Other borrowings241  33  497  83  
TOTAL INTEREST EXPENSE3,361  3,507  8,414  6,697  
NET INTEREST INCOME35,895  29,752  72,245  59,178  
Provision for loan losses2,965  230  5,655  1,700  
NET INTEREST INCOME AFTER PROVISION    
FOR LOAN LOSSES32,930  29,522  66,590  57,478  
NON-INTEREST INCOME:    
Trust and financial services1,288  1,124  2,822  2,328  
Service charges and fees on deposit accounts2,102  2,735  5,100  5,359  
Other service charges and fees3,869  3,408  7,199  6,522  
Securities gains (losses), net31  16  225  12  
Gain on sales of mortgage loans1,205  496  1,903  916  
Other281  1,964  622  2,242  
TOTAL NON-INTEREST INCOME8,776  9,743  17,871  17,379  
NON-INTEREST EXPENSE:    
Salaries and employee benefits14,323  12,546  30,295  25,301  
Occupancy expense2,162  1,813  4,091  3,628  
Equipment expense2,673  1,751  5,134  3,568  
FDIC Expense49  199  (181) 339  
Other7,676  7,183  15,098  14,349  
TOTAL NON-INTEREST EXPENSE26,883  23,492  54,437  47,185  
INCOME BEFORE INCOME TAXES14,823  15,773  30,024  27,672  
Provision for income taxes2,899  3,204  5,919  5,421  
NET INCOME11,924  12,569  24,105  22,251  
OTHER COMPREHENSIVE INCOME    
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes3,130  8,341  16,228  18,565  
Change in funded status of post retirement benefits, net of taxes384  304  788  607  
COMPREHENSIVE INCOME$15,438  $21,214  $41,121  $41,423  
PER SHARE DATA    
Basic and Diluted Earnings per Share$0.87  $1.02  $1.76  $1.81  
Weighted average number of shares outstanding (in thousands)13,715  12,290  13,727  12,286  

v3.20.2
Cover
Jul. 29, 2020
Apr. 29, 2020
Cover [Abstract]    
Document Type 8-K  
Document Period End Date Jul. 31, 2020  
Entity File Number 0-16759  
Entity Registrant Name FIRST FINANCIAL CORPORATION  
Entity Incorporation, State or Country Code IN  
Entity Tax Identification Number 35-1546989  
Entity Address, Address Line One One First Financial Plaza  
Entity Address, City or Town Terre Haute  
Entity Address, State or Province IN  
Entity Address, Postal Zip Code 47807  
City Area Code (812)  
Local Phone Number 238-6000  
Written Communications   false
Soliciting Material   false
Pre-commencement Tender Offer   false
Pre-commencement Issuer Tender Offer   false
Entity Emerging Growth Company false  
Entity Central Index Key 0000714562  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Amendment Flag false  
Trading Symbol THFF  
Title of 12(b) Security Common Stock, par value $0.125 per share  
Security Exchange Name NASDAQ