GlobeNewswire Inc | Oct 26, 2021 10:30AM EDT

October 26, 2021

TERRE HAUTE, Ind., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the period ending September 30, 2021:

For the quarter:

-- Net income was $16.1 million compared to $14.0 million for the same period of 2020;

-- Diluted net income per common share of $1.24 compared to $1.02 for the same period of 2020; and

-- Return on average assets was 1.34% compared to 1.28% for the three months ended September 30, 2020.

The Corporation further reported results for the nine months ending September 30, 2021:

-- Net income was $45.6 million compared to $38.1 million for the same period of 2020;

-- Diluted net income per common share of $3.42 compared to $2.78 for the same period of 2020; and

-- Return on average assets was 1.28% compared to 1.20% for the nine months ended September 30, 2020.

We are pleased with our third quarter results said Norman L. Lowery, Chairman and Chief Executive Officer. Asset quality continues to be good which has allowed us to release additional credit loss reserves which were established during the pandemic. We continue to focus on our customers and assisting them as needed as they navigate the many challenges of the ongoing pandemic.

Average Total LoansAverage total loans for the third quarter of 2021 were $2.52 billion versus $2.77 billion for the comparable period in 2020.

Total Loans OutstandingTotal loans outstanding as of September 30, 2021 were $2.48 billion compared to $2.75 billion as of September 30, 2020. Total Paycheck Protection Program ("PPP") loans as of September 30, 2021 were $40.9 million compared to $169.6 million for the same period of 2020.

Average Total DepositsAverage total deposits for the quarter ended September 30, 2021, were $4.04 billion versus $3.59 billion as of September 30, 2020, an increase of $449 million or 12.49%.

Total DepositsTotal deposits were $4.03 billion as of September 30, 2021, compared to $3.60 billion as of September 30, 2020, an increase of $424 million or 11.77%. On a linked quarter basis, total deposits increased $40 million from $3.99 billion for the quarter ending June 30, 2021.

Book Value Per ShareBook Value per share was $46.22 at September 30, 2021, compared to $44.27 at September 30, 2020 an increase of 4.41%.

Shareholder EquityShareholder equity at September 30, 2021, was $594.9 million compared to $607.1 million on September 30, 2020. In the quarter the Corporation repurchased 176,293 shares of its common stock.

Tangible Common Equity to Tangible Asset RatioThe Corporations tangible common equity to tangible asset ratio was 10.79% at September 30, 2021, compared to 12.07% at September 30, 2020.

Net Interest IncomeNet interest income for the third quarter of 2021 was $36.0 million, compared to $36.5 million reported for the same period of 2020.

Net Interest MarginThe net interest margin for the quarter ended September 30, 2021, was 3.22% compared to the 3.99% reported at September 30, 2020.

Nonperforming LoansNonperforming loans as of September 30, 2021, were $19.5 million versus $23.7 million as of September 30, 2020. The ratio of nonperforming loans to total loans and leases was 0.79% as of September 30, 2021, versus 0.86% as of September 30, 2020.

Credit Loss ProvisionThe provision for credit losses for the three months ended September 30, 2021, was $(1.50) million compared to the $4.43 million provision for the third quarter of 2020. In the first three quarters of 2020 the provision was calculated using the incurred loss basis. Beginning in the fourth quarter 2020, the provision was calculated using the current expected credit loss accounting standard.

Net Charge-Offs/RecoveriesIn the third quarter of 2021 net charge-offs were $270 thousand compared to $750 thousand in the same period of 2020.

Allowance for Credit LossesIn March 2020 due to the uncertainty surrounding the global pandemic and as provided by the Coronavirus Aid Relief and Economic Security Act the Corporation elected to delay the implementation of the Current Expected Credit Loss accounting standard. On December 31, 2020 the Corporation adopted ASU 2016-13 (topic 326), Measurement of Credit Losses on Financial Instruments commonly referenced as the Current Expected Credit Loss (CECL) model. CECL was retrospectively adopted on January 1, 2020.

The Corporations allowance for credit losses as of September 30, 2021, was $43.0 million compared to $27.0 million as of September 30, 2020. The increase is primarily related to the adoption of CECL. The allowance for credit losses as a percent of total loans was 1.73% as of September 30, 2021, compared to 0.98% as of September 30, 2020. The allowance as of September 30, 2021 was calculated using CECL. The allowance as of September 30, 2020 was calculated using the incurred loss method.

Non-Interest IncomeNon-interest income for the three months ended September 30, 2021 and 2020 was $11.1 million and $11.7 million, respectively.

Non-Interest ExpenseNon-interest expense for the three months ended September 30, 2021, was $28.5 million compared to $27.1 million in 2020.

Efficiency RatioThe Corporations efficiency ratio was 59.01% for the quarter ending September 30, 2021, versus 54.97% for the same period in 2020.

Income TaxesIncome tax expense for the nine months ended September 30, 2021, was $11.4 million versus $8.6 million for the same period in 2020. The effective tax rate for 2021 was 20.07% compared to 18.47% for 2020.

About First Financial CorporationFirst 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 80 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. McHargueChief Financial OfficerP: 812-238-6334 E: rmchargue@first-online.com

Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020END OF PERIOD BALANCESAssets $ 4,801,093 $ 4,753,308 $ 4,389,996 $ 4,801,093 $ 4,389,996 Deposits $ 4,028,636 $ 3,988,751 $ 3,604,353 $ 4,028,636 $ 3,604,353 Loans, includingnet deferred $ 2,479,910 $ 2,568,713 $ 2,753,493 $ 2,479,910 $ 2,753,493 loan costsAllowance for $ 42,962 $ 44,732 $ 26,960 $ 42,962 $ 26,960 Credit LossesTotal Equity $ 594,935 $ 588,163 $ 607,095 $ 594,935 $ 607,095 Tangible Common $ 508,618 $ 501,459 $ 519,098 $ 508,618 $ 519,098 Equity ^(a) AVERAGE BALANCES Total Assets $ 4,818,880 $ 4,751,068 $ 4,379,798 $ 4,723,566 $ 4,239,866 Earning Assets $ 4,615,235 $ 4,552,581 $ 3,776,803 $ 4,523,975 $ 3,707,653 Investments $ 1,325,651 $ 1,244,551 $ 1,008,303 $ 1,234,547 $ 995,457 Loans $ 2,515,639 $ 2,619,887 $ 2,768,003 $ 2,591,939 $ 2,710,953 Total Deposits $ 4,041,441 $ 3,981,243 $ 3,592,633 $ 3,946,463 $ 3,463,263 Interest-Bearing $ 3,223,948 $ 3,173,782 $ 2,887,575 $ 3,152,340 $ 2,828,521 DepositsInterest-Bearing $ 106,936 $ 101,594 $ 108,236 $ 106,326 $ 112,290 LiabilitiesTotal Equity $ 599,011 $ 600,599 $ 603,067 $ 600,093 $ 588,095 INCOME STATEMENT DATANet Interest $ 36,028 $ 35,628 $ 36,531 $ 106,569 $ 108,776 IncomeNet InterestIncome Fully Tax $ 37,134 $ 36,719 $ 37,612 $ 109,812 $ 111,983 Equivalent ^(b)Provision for $ (1,500 ) $ (2,196 ) $ 4,425 $ (3,244 ) $ 10,080 Credit LossesNon-interest $ 11,092 $ 10,931 $ 11,739 $ 31,317 $ 29,610 IncomeNon-interest $ 28,459 $ 27,996 $ 27,130 $ 84,094 $ 81,567 ExpenseNet Income $ 16,098 $ 16,614 $ 14,000 $ 45,589 $ 38,105 PER SHARE DATA Basic andDiluted Net $ 1.24 $ 1.24 $ 1.02 $ 3.42 $ 2.78 Income PerCommon ShareCash DividendsDeclared Per $ ? $ 0.53 $ ? $ 0.53 $ 0.52 Common ShareBook Value Per $ 46.22 $ 45.08 $ 44.27 $ 46.22 $ 44.27 Common ShareTangible BookValue Per Common $ 39.38 $ 38.31 $ 37.56 $ 39.51 $ 37.85 Share ^(c)Basic WeightedAverage Common 13,019 13,414 13,715 13,320 13,723 SharesOutstanding

(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 June 30, September September September 30, 30, 30, 30, 2021 2021 2020 2021 2020Return onaverage 1.34 % 1.40 % 1.28 % 1.28 % 1.20 %assetsReturn onaveragecommon 10.75 % 11.06 % 9.29 % 10.10 % 8.62 %shareholder'sequityEfficiency 59.01 % 58.75 % 54.97 % 59.59 % 57.61 %ratioAverageequity to 12.43 % 12.64 % 13.77 % 12.70 % 13.87 %averageassetsNet interest 3.22 % 3.23 % 3.99 % 3.24 % 4.03 %margin ^(a)Netcharge-offsto average 0.04 % (0.02 ) % 0.11 % 0.04 % 0.15 %loans andleasesCredit lossreserve to 1.73 % 1.74 % 0.98 % 1.73 % 0.98 %loans andleasesCredit lossreserve to 220.39 % 223.46 % 113.89 % 220.39 % 113.89 %nonperformingloansNonperformingloans to 0.79 % 0.78 % 0.86 % 0.79 % 0.86 %loans andleasesTier 1 10.77 % 10.72 % 11.81 % 10.77 % 11.81 %leverageRisk-basedcapital - 16.63 % 17.15 % 15.70 % 16.63 % 15.70 %Tier 1

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

Asset Quality Three Months Ended Nine Months Ended September June 30, September September September 30, 30, 30, 30, 2021 2021 2020 2021 2020Accruingloans andleases past $ 10,765 $ 9,430 $ 13,490 $ 10,765 $ 13,490 due 30-89daysAccruingloans andleases past $ 1,355 $ 1,202 $ 2,948 $ 1,355 $ 2,948 due 90 daysor moreNonaccrualloans and $ 13,650 $ 14,356 $ 16,628 $ 13,650 $ 16,628 leasesTotaltroubled debt $ 4,489 $ 4,460 $ 4,097 $ 4,489 $ 4,097 restructuringOther real $ 884 $ 989 $ 3,465 $ 884 $ 3,465 estate ownedNonperformingloans and $ 20,378 $ 21,007 $ 27,138 $ 20,378 $ 27,138 other realestate ownedTotalnonperforming $ 23,622 $ 24,272 $ 30,174 $ 23,622 $ 30,174 assetsGross $ 1,614 $ 1,151 $ 1,998 $ 5,103 $ 6,442 charge-offsRecoveries $ 1,344 $ 1,303 $ 1,248 $ 4,257 $ 3,379 Netcharge-offs/ $ 270 $ (152 ) $ 750 $ 846 $ 3,063 (recoveries)

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

September 30, December 31, 2021 2020 (unaudited)ASSETS Cash and due from banks $ 758,120 $ 657,470 Federal funds sold 6,183 301 Securities available-for-sale 1,270,820 1,020,744 Loans: Commercial 1,457,984 1,521,711 Residential 535,855 604,652 Consumer 482,115 479,750 2,475,954 2,606,113 (Less) plus: Net deferred loan costs 3,956 4,181 Allowance for credit losses (42,962 ) (47,052 ) 2,436,948 2,563,242 Restricted stock 14,837 14,812 Accrued interest receivable 15,963 16,957 Premises and equipment, net 63,187 62,063 Bank-owned life insurance 106,895 95,849 Goodwill 78,592 78,592 Other intangible assets 7,725 8,972 Other real estate owned 884 1,012 Other assets 40,939 37,530 TOTAL ASSETS $ 4,801,093 $ 4,557,544 LIABILITIES AND SHAREHOLDERS? EQUITY Deposits: Non-interest-bearing $ 814,902 $ 732,694 Interest-bearing: Certificates of deposit exceeding the FDIC 68,920 107,764 insurance limitsOther interest-bearing deposits 3,144,814 2,915,487 4,028,636 3,755,945 Short-term borrowings 101,051 116,061 FHLB advances 5,902 5,859 Other liabilities 70,569 82,687 TOTAL LIABILITIES 4,206,158 3,960,552 Shareholders? equity Common stock, $.125 stated value per share; Authorized shares-40,000,000 Issued shares-16,096,313 in 2021 and 16,075,154 in 2020Outstanding shares-12,871,936 in 2021 and 2,009 2,007 13,558,511 in 2020Additional paid-in capital 141,456 140,820 Retained earnings 559,693 521,103 Accumulated other comprehensive income/(loss) (1,102 ) 9,764 Less: Treasury shares at cost-3,224,377 in 2021 and (107,121 ) (76,702 )2,516,643 in 2020TOTAL SHAREHOLDERS? EQUITY 594,935 596,992 TOTAL LIABILITIES AND SHAREHOLDERS? EQUITY $ 4,801,093 $ 4,557,544

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, 2021 2020 2021 2020 (unaudited)INTEREST INCOME: Loans, including $ 31,937 $ 34,077 $ 95,760 $ 102,335 related feesSecurities: Taxable 3,627 3,005 10,061 10,658 Tax-exempt 2,234 1,994 6,471 5,940 Other 347 463 1,080 1,265 TOTAL INTEREST INCOME 38,145 39,539 113,372 120,198 INTEREST EXPENSE: Deposits 1,959 2,689 6,335 10,238 Short-term borrowings 99 107 291 475 Other borrowings 59 212 177 709 TOTAL INTEREST 2,117 3,008 6,803 11,422 EXPENSENET INTEREST INCOME 36,028 36,531 106,569 108,776 Provision for credit (1,500 ) 4,425 (3,244 ) 10,080 lossesNET INTEREST INCOME AFTER PROVISIONFOR LOAN LOSSES 37,528 32,106 109,813 98,696 NON-INTEREST INCOME: Trust and financial 1,156 1,210 3,774 4,032 servicesService charges andfees on deposit 2,697 2,516 7,267 7,616 accountsOther service charges 4,466 4,269 13,747 11,468 and feesSecurities gains 5 5 111 230 (losses), netGain on sales of 1,425 2,910 4,268 4,813 mortgage loansOther 1,343 829 2,150 1,451 TOTAL NON-INTEREST 11,092 11,739 31,317 29,610 INCOMENON-INTEREST EXPENSE: Salaries and employee 15,770 15,474 47,478 45,769 benefitsOccupancy expense 2,151 2,003 6,302 6,094 Equipment expense 2,177 2,739 7,195 7,873 FDIC Expense 313 135 898 (46 )Other 8,048 6,779 22,221 21,877 TOTAL NON-INTEREST 28,459 27,130 84,094 81,567 EXPENSEINCOME BEFORE INCOME 20,161 16,715 57,036 46,739 TAXESProvision for income 4,063 2,715 11,447 8,634 taxesNET INCOME 16,098 14,000 45,589 38,105 OTHER COMPREHENSIVE INCOMEChange in unrealizedgains/(losses) onsecurities, net of (2,985 ) 2,223 (12,281 ) 18,451 reclassifications andtaxesChange in fundedstatus of post 471 383 1,415 1,171 retirement benefits,net of taxesCOMPREHENSIVE INCOME $ 13,584 $ 16,606 $ 34,723 $ 57,727 PER SHARE DATA Basic and Diluted $ 1.24 $ 1.02 $ 3.42 $ 2.78 Earnings per ShareWeighted averagenumber of shares 13,019 13,715 13,320 13,723 outstanding (inthousands)