First Financial Corporation Reports Third Quarter Results

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First Financial (NASDAQ:THFF) reported its third quarter 2024 results, including the closure of its SimplyBank acquisition. Key highlights:

- Net income of $8.7 million, down from $16.3 million in Q3 2023
- Diluted EPS of $0.74, compared to $1.37 in Q3 2023
- Return on average assets of 0.64%, down from 1.35% in Q3 2023
- Credit loss provision increased to $9.4 million from $1.2 million in Q3 2023
- Average total loans increased 17.74% year-over-year to $3.71 billion
- Total deposits grew 16.74% year-over-year to $4.72 billion
- Net interest margin expanded to 3.78% from 3.74% in Q3 2023

The acquisition of SimplyBank added $467 million in loans and $622 million in deposits. The company expects continued net interest margin improvement in coming quarters.

Positive

Acquisition of SimplyBank closed, expanding into Southeast Tennessee and Northwest Georgia markets
Average total loans increased 17.74% year-over-year to $3.71 billion
Total deposits grew 16.74% year-over-year to $4.72 billion
Net interest margin expanded to 3.78% from 3.74% in Q3 2023
Book value per share increased 19.82% year-over-year to $47.93

Negative

Net income decreased to $8.7 million from $16.3 million in Q3 2023
Diluted EPS declined to $0.74 from $1.37 in Q3 2023
Return on average assets fell to 0.64% from 1.35% in Q3 2023
Credit loss provision increased significantly to $9.4 million from $1.2 million in Q3 2023
Efficiency ratio worsened to 64.43% from 59.57% in Q3 2023

News Market Reaction 1 Alert

+0.80% News Effect

On the day this news was published, THFF gained 0.80%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

10/22/2024 - 10:00 AM

TERRE HAUTE, Ind., Oct. 22, 2024 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2024. During the quarter, the Corporation closed its acquisition of SimplyBank, Dayton, Tennessee. The quarter was impacted by purchase accounting adjustments and charges, which are reflected in the results.

Net income was $8.7 million compared to $16.3 million reported for the same period of 2023;
Diluted net income per common share of $0.74 compared to $1.37 for the same period of 2023;
Return on average assets was 0.64% compared to 1.35% for the three months ended September 30, 2023;
Credit loss provision was $9.4 million compared to provision of $1.2 million for the third quarter 2023; and
Pre-tax, pre-provision net income was $19.9 million compared to $20.5 million for the same period in 2023.¹

The Corporation further reported results for the nine months ended September 30, 2024:

Net income was $31.0 million compared to $48.3 million reported for the same period of 2023;
Diluted net income per common share of $2.63 compared to $4.02 for the same period of 2023;
Return on average assets was 0.82% compared to 1.33% for the nine months ended September 30, 2023;
Credit loss provision was $14.2 million compared to provision of $4.8 million for the nine months ended September 30, 2023; and
Pre-tax, pre-provision net income was $51.1 million compared to $63.1 million for the same period in 2023.¹

________________
¹Non-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.

Average Total Loans

Average total loans for the third quarter of 2024 were $3.71 billion versus $3.15 billion for the comparable period in 2023, an increase of $558 million or 17.74%. On a linked quarter basis, average loans increased $508 million or 15.89% from $3.20 billion as of June 30, 2024. Increases in average loans over both periods were mostly a result of the acquisition of SimplyBank as further detailed in Total Loans Outstanding section below.

Total Loans Outstanding

Total loans outstanding as of September 30, 2024, were $3.72 billion compared to $3.12 billion as of September 30, 2023, an increase of $598 million or 19.17%. On a linked quarter basis, total loans increased $511 million or 15.96% from $3.20 billion as of June 30, 2024. The main driver of the increase was $467 million in loans acquired in the SimplyBank acquisition. Organic growth was primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans.

Norman D. Lowery, President and Chief Executive Officer, commented, “During the quarter, we closed the acquisition of SimplyBank, which gives us access to very attractive markets in Southeast Tennessee and Northwest Georgia. We also experienced another sound quarter of loan and net interest income growth. During the quarter our net interest margin expanded, and we expect continued improvement in coming quarters.”

Average Total Deposits

Average total deposits for the quarter ended September 30, 2024, were $4.71 billion versus $4.00 billion as of September 30, 2023, an increase of $705 million or 17.63%. Increases in average deposits over both periods were mostly a result of the acquisition of SimplyBank as further detailed in Total Deposits section below.

Total Deposits

Total deposits were $4.72 billion as of September 30, 2024, compared to $4.04 billion as of September 30, 2023, a $676 million increase, or 16.74%. On a linked quarter basis, total deposits increased $585.2 million, or 14.16%. $622 million in deposits were acquired in the SimplyBank acquisition. Non-interest bearing deposits were $831.6 million, and time deposits were $791.1 million as of September 30, 2024, compared to $770.5 million and $471.6 million, respectively for the same period of 2023.

Shareholders’ Equity

Shareholders’ equity at September 30, 2024, was $566.0 million compared to $470.2 million on September 30, 2023. During the last twelve months, the Corporation has not repurchased any shares of its common stock. 518,860 shares remain available for repurchase under the current repurchase authorization. The Corporation paid a $0.45 per share quarterly dividend in July and declared a $0.45 quarterly dividend, which was paid on October 15, 2024.

Book Value Per Share

Book Value per share was $47.93 as of September 30, 2024, compared to $40.00 as of September 30, 2023, an increase of $7.93 per share, or 19.82%. Tangible Book Value per share was $37.84 as of September 30, 2024, compared to $32.10 as of September 30, 2023, an increase of $5.74 per share, or 17.88%.

Tangible Common Equity to Tangible Asset Ratio

The Corporation’s tangible common equity to tangible asset ratio was 8.33% at September 30, 2024, compared to 8.04% at September 30, 2023.

Net Interest Income

Net interest income for the third quarter of 2024 was $47.2 million, compared to $41.2 million reported for the same period of 2023, an increase of $6.0 million, or 14.63%.

Net Interest Margin

The net interest margin for the quarter ended September 30, 2024, was 3.78% compared to the 3.74% reported at September 30, 2023. On a linked quarterly basis, the net interest margin increased 21 basis points from 3.57% at June 30, 2024.

Nonperforming Loans

Nonperforming loans as of September 30, 2024, were $14.1 million versus $12.6 million as of September 30, 2023. The increase was due primarily to the SimplyBank acquisition. The ratio of nonperforming loans to total loans and leases was 0.38% as of September 30, 2024, versus 0.40% as of September 30, 2023.

Credit Loss Provision

The provision for credit losses for the three months ended September 30, 2024, was $9.4 million, compared to $1.2 million for the third quarter 2023. The Corporation recorded $5.5 million in provision for the acquisition of SimplyBank. The increase in provision was also related to one previously identified credit, reflecting further deterioration in collateral values during the quarter.

Net Charge-Offs

Third quarter net charge-offs were $4.6 million compared to $2.1 million in the same period of 2023.

Allowance for Credit Losses

The Corporation’s allowance for credit losses as of September 30, 2024, was $46.2 million compared to $39.0 million as of September 30, 2023. The allowance for credit losses as a percent of total loans was 1.24% as of September 30, 2024, compared to 1.25% as of September 30, 2023. On a linked quarter basis, the allowance for credit losses as a percent of total loans increased 4 basis points from 1.20% as of June 30, 2024. The Corporation recorded $8.5 million in allowance for the acquisition of SimplyBank, which included $3 million to record purchased credit deteriorated (“PCD”) reserves.

Non-Interest Income

Non-interest income for the three months ended September 30, 2024 and 2023 was $11.2 million and $11.6 million, respectively.

Non-Interest Expense

Non-interest expense for the three months ended September 30, 2024, was $38.6 million compared to $32.3 million in 2023. This includes $844 thousand of acquisition-related expenses during the quarter, as well as an overall increase in operating expenses as a result of the acquisition.

Efficiency Ratio

The Corporation’s efficiency ratio was 64.43% for the quarter ending September 30, 2024, versus 59.57% for the same period in 2023.

Income Taxes

Income tax expense for the three months ended September 30, 2024, was $1.7 million versus $3.0 million for the same period in 2023. The effective tax rate for 2024 was 16.44% compared to 17.37% for 2023.

About First Financial Corporation

First Financial Corporation (NASDAQ:THFF) is the holding company for First Financial Bank N.A., which is the fifth oldest national bank in the United States, operating 83 banking centers in Illinois, Indiana, Kentucky, Tennessee, and Georgia. 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						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2024		2024		2023		2024		2023
END OF PERIOD BALANCES
Assets	$	5,483,351	$	4,891,068	$	4,784,806	$	5,483,351	$	4,784,806
Deposits	$	4,717,489	$	4,132,327	$	4,040,995	$	4,717,489	$	4,040,995
Loans, including net deferred loan costs	$	3,715,235	$	3,204,009	$	3,117,626	$	3,715,235	$	3,117,626
Allowance for Credit Losses	$	46,169	$	38,334	$	39,034	$	46,169	$	39,034
Total Equity	$	565,951	$	530,670	$	470,168	$	565,951	$	470,168
Tangible Common Equity ^(a)	$	446,786	$	438,569	$	377,367	$	446,786	$	377,367

AVERAGE BALANCES
Total Assets	$	5,483,572	$	4,813,308	$	4,814,251	$	5,033,748	$	4,828,165
Earning Assets	$	5,165,520	$	4,556,839	$	4,575,996	$	4,762,940	$	4,590,258
Investments	$	1,342,037	$	1,279,278	$	1,351,433	$	1,309,879	$	1,384,941
Loans	$	3,705,779	$	3,197,695	$	3,147,317	$	3,361,207	$	3,104,623
Total Deposits	$	4,705,614	$	4,113,826	$	4,000,302	$	4,288,426	$	4,124,520
Interest-Bearing Deposits	$	4,403,454	$	3,413,752	$	3,222,633	$	3,714,432	$	3,309,111
Interest-Bearing Liabilities	$	157,227	$	152,303	$	309,948	$	176,985	$	197,142
Total Equity	$	546,912	$	517,890	$	493,764	$	529,174	$	494,428

INCOME STATEMENT DATA
Net Interest Income	$	47,170	$	39,294	$	41,150	$	125,384	$	127,672
Net Interest Income Fully Tax Equivalent ^(b)	$	48,630	$	40,673	$	42,539	$	129,600	$	131,774
Provision for Credit Losses	$	9,400	$	2,966	$	1,200	$	14,166	$	4,800
Non-interest Income	$	11,223	$	9,905	$	11,627	$	30,559	$	31,455
Non-interest Expense	$	38,564	$	32,651	$	32,265	$	104,637	$	95,932
Net Income	$	8,741	$	11,369	$	16,285	$	31,034	$	48,252

PER SHARE DATA
Basic and Diluted Net Income Per Common Share	$	0.74	$	0.96	$	1.37	$	2.63	$	4.02
Cash Dividends Declared Per Common Share	$	0.45	$	0.45	$	—	$	1.35	$	0.54
Book Value Per Common Share	$	47.93	$	44.92	$	40.00	$	47.93	$	40.00
Tangible Book Value Per Common Share ^(c)	$	36.22	$	36.04	$	33.69	$	37.84	$	32.10
Basic Weighted Average Common Shares Outstanding		11,808		11,814		11,901		11,809		11,993

________________
(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						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2024		2024		2023		2024		2023
Return on average assets	0.64	%	0.94	%	1.35	%	0.82	%	1.33	%
Return on average common shareholder's equity	6.39	%	8.78	%	13.19	%	7.80	%	12.98	%
Efficiency ratio	64.43	%	64.56	%	59.57	%	65.33	%	58.77	%
Average equity to average assets	9.97	%	10.76	%	10.26	%	10.51	%	10.24	%
Net interest margin ^(a)	3.78	%	3.57	%	3.74	%	3.63	%	3.83	%
Net charge-offs to average loans and leases	0.49	%	0.59	%	0.24	%	0.43	%	0.24	%
Credit loss reserve to loans and leases	1.24	%	1.20	%	1.25	%	1.24	%	1.25	%
Credit loss reserve to nonperforming loans	326.65	%	240.85	%	310.19	%	326.65	%	310.19	%
Nonperforming loans to loans and leases	0.38	%	0.50	%	0.40	%	0.38	%	0.40	%
Tier 1 leverage	10.25	%	12.14	%	11.72	%	10.25	%	11.72	%
Risk-based capital - Tier 1	13.63	%	14.82	%	14.61	%	13.63	%	14.61	%

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



Asset Quality	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2024		2024		2023		2024		2023
Accruing loans and leases past due 30-89 days	$	16,391	$	14,913	$	15,961	$	16,391	$	15,961
Accruing loans and leases past due 90 days or more	$	1,517	$	1,353	$	1,370	$	1,517	$	1,370
Nonaccrual loans and leases	$	12,617	$	14,563	$	11,214	$	12,617	$	11,214
Other real estate owned	$	169	$	170	$	63	$	169	$	63
Nonperforming loans and other real estate owned	$	14,303	$	16,086	$	12,647	$	14,303	$	12,647
Total nonperforming assets	$	17,179	$	18,978	$	15,671	$	17,179	$	15,671
Gross charge-offs	$	6,936	$	6,091	$	3,601	$	16,219	$	11,520
Recoveries	$	2,365	$	1,414	$	1,528	$	5,449	$	5,975
Net charge-offs/(recoveries)	$	4,571	$	4,677	$	2,073	$	10,770	$	5,545


Non-GAAP Reconciliations	Three Months Ended September 30,
	2024		2023
($in thousands, except EPS)
Income before Income Taxes	$	10,429	$	19,312
Provision for credit losses		9,400		1,200
Provision for unfunded commitments		100		—
Pre-tax, Pre-provision Income	$	19,929	$	20,512


Non-GAAP Reconciliations	Nine Months Ended September 30,
	2024			2023
($ in thousands, except EPS)
Income before Income Taxes	$	37,140		$	58,395
Provision for credit losses		14,166			4,800
Provision for unfunded commitments		(200	)		(100	)
Pre-tax, Pre-provision Income	$	51,106		$	63,095


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

	September 30,			December 31,
	2024			2023
	(unaudited)
ASSETS
Cash and due from banks	$	77,312		$	76,759
Federal funds sold		1,356			282
Securities available-for-sale		1,271,992			1,259,137
Loans:
Commercial		2,112,738			1,817,526
Residential		924,276			695,788
Consumer		671,353			646,758
		3,708,367			3,160,072
(Less) plus:
Net deferred loan costs		6,868			7,749
Allowance for credit losses		(46,169	)		(39,767	)
		3,669,066			3,128,054
Restricted stock		15,366			15,364
Accrued interest receivable		25,386			24,877
Premises and equipment, net		82,213			67,286
Bank-owned life insurance		128,242			114,122
Goodwill		93,363			86,985
Other intangible assets		25,802			5,586
Other real estate owned		169			107
Other assets		93,084			72,587
TOTAL ASSETS	$	5,483,351		$	4,851,146

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing	$	831,575		$	750,335
Interest-bearing:
Certificates of deposit exceeding the FDIC insurance limits		159,618			92,921
Other interest-bearing deposits		3,726,296			3,246,812
		4,717,489			4,090,068
Short-term borrowings		84,363			67,221
FHLB advances		30,456			108,577
Other liabilities		85,092			57,304
TOTAL LIABILITIES		4,917,400			4,323,170

Shareholders’ equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-16,165,023 in 2024 and 16,137,220 in 2023
Outstanding shares-11,808,304 in 2024 and 11,795,024 in 2023		2,016			2,014
Additional paid-in capital		144,785			144,152
Retained earnings		677,155			663,726
Accumulated other comprehensive income/(loss)		(102,800	)		(127,087	)
Less: Treasury shares at cost-4,356,719 in 2024 and 4,342,196 in 2023		(155,205	)		(154,829	)
TOTAL SHAREHOLDERS’ EQUITY		565,951			527,976
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,483,351		$	4,851,146


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Dollar amounts in thousands, except per share data)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2024		2023			2024		2023
						(unaudited)
INTEREST INCOME:
Loans, including related fees	$	61,367	$	49,146		$	162,878	$	140,220
Securities:
Taxable		6,319		6,164			18,083		18,631
Tax-exempt		2,715		2,661			7,919		7,937
Other		1,294		752			2,989		2,864
TOTAL INTEREST INCOME		71,695		58,723			191,869		169,652
INTEREST EXPENSE:
Deposits		22,197		13,627			59,622		35,111
Short-term borrowings		993		1,923			2,928		4,025
Other borrowings		1,335		2,023			3,935		2,844
TOTAL INTEREST EXPENSE		24,525		17,573			66,485		41,980
NET INTEREST INCOME		47,170		41,150			125,384		127,672
Provision for credit losses		9,400		1,200			14,166		4,800
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		37,770		39,950			111,218		122,872
NON-INTEREST INCOME:
Trust and financial services		1,251		1,140			3,903		3,642
Service charges and fees on deposit accounts		8,139		7,099			21,576		20,971
Other service charges and fees		191		213			700		613
Securities gains (losses), net		103		—			104		—
Interchange income		177		—			490		47
Loan servicing fees		274		447			957		997
Gain on sales of mortgage loans		411		321			886		811
Other		677		2,407			1,943		4,374
TOTAL NON-INTEREST INCOME		11,223		11,627			30,559		31,455
NON-INTEREST EXPENSE:
Salaries and employee benefits		18,521		17,159			53,231		51,263
Occupancy expense		2,556		2,389			7,116		7,120
Equipment expense		4,280		3,580			12,736		10,404
FDIC Expense		558		613			1,721		1,977
Other		12,649		8,524			29,833		25,168
TOTAL NON-INTEREST EXPENSE		38,564		32,265			104,637		95,932
INCOME BEFORE INCOME TAXES		10,429		19,312			37,140		58,395
Provision for income taxes		1,688		3,027			6,106		10,143
NET INCOME		8,741		16,285			31,034		48,252
OTHER COMPREHENSIVE INCOME (LOSS)
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes		31,628		(34,934	)		24,067		(36,504	)
Change in funded status of post retirement benefits, net of taxes		73		146			220		440
COMPREHENSIVE INCOME (LOSS)	$	40,442	$	(18,503	)	$	55,321	$	12,188
PER SHARE DATA
Basic and Diluted Earnings per Share	$	0.74	$	1.37		$	2.63	$	4.02
Weighted average number of shares outstanding (in thousands)		11,808		11,901			11,809		11,993

FAQ

What was First Financial 's (THFF) net income for Q3 2024?

First Financial (THFF) reported net income of $8.7 million for the third quarter of 2024.

How did First Financial 's (THFF) Q3 2024 EPS compare to the previous year?

First Financial 's (THFF) diluted earnings per share for Q3 2024 was $0.74, compared to $1.37 for the same period in 2023.

What was the impact of the SimplyBank acquisition on First Financial 's (THFF) loan portfolio?

The SimplyBank acquisition added $467 million in loans to First Financial 's (THFF) portfolio in Q3 2024.

How did First Financial 's (THFF) net interest margin change in Q3 2024?

First Financial 's (THFF) net interest margin expanded to 3.78% in Q3 2024 from 3.74% in Q3 2023.

What was First Financial 's (THFF) provision for credit losses in Q3 2024?

First Financial (THFF) reported a provision for credit losses of $9.4 million in Q3 2024, compared to $1.2 million in Q3 2023.

First Financial Corporation Reports Third Quarter Results