First Financial Corporation Reports Third Quarter Results

TERRE HAUTE, Ind., Oct. 27, 2026 (GLOBE NEWSWIRE) -- First Financial Corporation (NASDAQ:THFF) today announced results for the third quarter of 2026. Net income was $27.4 million compared to $20.8 million reported for the same period of 2025; Diluted net income per common share of $2.31 compared to $1.75 for the same period of 2025; Return on average assets was 1.79% compared to 1.48% for the three months ended September 30, 2025; Benefit from credit losses was $750 thousand compared to provision expense of $2.0 million for the third quarter 2025; and Pre-tax, pre-provision net income was $33.7 million compared to $27.7 million for the same period in 2025. 1 The Corporation further reported results for the nine months ended September 30, 2026: Net income was $70.0 million compared to $57.8 million reported for the same period of 2025; Diluted net income per common share of $5.89 compared to $4.87 for the same period of 2025; Return on average assets was 1.54% compared to 1.39% for the nine months ended September 30, 2025; Provision for credit losses was $3.1 million compared to provision of $6.0 million for the nine months ended September 30, 2025; and Pre-tax, pre-provision net income was $90.3 million compared to $78.3 million for the same period in 2025. 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. Acquisitions On March 1, 2026, First Financial Corporation completed the acquisition of CedarStone Financial, Inc. As a result of the acquisition, loans acquired were $292 million, and deposits acquired were $313 million. Although we initially recognized a bargain purchase gain of $716 thousand in the first quarter 2026, measurement period adjustments recorded in the second quarter revised the preliminary purchase accounting. The cumulative resulting year-to-date bargain purchase gain was $33 thousand. On August 26, 2026, First Financial Corporation, Terre Haute, Indiana (“FFC” or the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First Illinois Corporation, Decatur, Illinois (“First Illinois”). Under the terms of the Merger Agreement, subject to the allocation and election procedures set forth therein, each outstanding share of First Illinois common stock will be converted into the right to receive either 0.5727 shares of FFC common stock or $44.35 in cash, with 70% of First Illinois common stock to be exchanged for FFC common stock and 30% to be exchanged for cash, in each case subject to the terms of the Merger Agreement. Cash will be paid in lieu of fractional shares. The merger is expected to close in the first quarter of 2027. Norman D. Lowery, President and Chief Executive Officer, commented, “We are pleased with our third quarter results. The quarter marked another quarter of record net income and record net interest income. Our net interest margin and profitability remain strong with a 4.36% net interest margin and a 1.54% return on assets year-to-date. Loan pipelines remain strong and credit quality remains stable.” Average Total Loans Average total loans for the third quarter of 2026 were $4.45 billion versus $3.93 billion for the comparable period in 2025, an increase of $520 million or 13.23%. On a linked quarter basis, average loans decreased $3.5 million or 0.08% from $4.45 billion as of June 30, 2026. Total Loans Outstanding Total loans outstanding as of September 30, 2026, were $4.41 billion compared to $3.97 billion as of September 30, 2025, an increase of $444 million or 11.20%. On a linked quarter basis, total loans decreased $56.1 million or 1.26% from $4.47 billion as of June 30, 2026. Organic growth of $191 million year-over-year was primarily driven by increases in Commercial Construction and Development, Commercial Real Estate, and Consumer Auto loans. Average Total Deposits Average total deposits for the quarter ended September 30, 2026, were $4.85 billion versus $4.59 billion as of September 30, 2025, an increase of $260 million, or 5.66%. On a linked quarter basis, average deposits decreased $17 million or 0.36% from $4.87 billion as of June 30, 2026. Total Deposits Total deposits were $4.87 billion as of September 30, 2026, compared to $4.62 billion as of September 30, 2025. On a linked quarter basis, total deposits increased $31.9 million or 0.66% from $4.83 billion as of June 30, 2026. Non-interest bearing deposits were $991 million, and time deposits were $824 million as of September 30, 2026, compared to $850 million and $703 million, respectively for the same period of 2025. Shareholders’ Equity Shareholders’ equity at September 30, 2026, was $660.4 million compared to $622.2 million on September 30, 2025. 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 $0.56 per share quarterly dividend in July and declared a $0.56 quarterly dividend, which was paid on October 15, 2026. Book Value Per Share Book Value per share was $55.54 as of September 30, 2026, compared to $52.50 as of September 30, 2025, an increase of $3.04 per share, or 5.79%. Tangible Book Value per share was $45.79 as of September 30, 2026, compared to $42.75 as of September 30, 2025, an increase of $3.04 per share or 7.11%. Tangible Common Equity to Tangible Asset Ratio The Corporation’s tangible common equity to tangible asset ratio was 9.16% at September 30, 2026, compared to 9.12% at September 30, 2025. Net Interest Income Net interest income for the third quarter of 2026 was a record $63.5 million, compared to $54.6 million reported for the same period of 2025, an increase of $8.9 million, or 16.3%. Interest income increased $10.3 million and interest expense increased $1.4 million year over year. Net Interest Margin The net interest margin for the quarter ended September 30, 2026, was 4.51% compared to the 4.25% reported at September 30, 2025. Nonperforming Loans Nonperforming loans as of September 30, 2026, were $21.1 million versus $19.3 million as of September 30, 2025. The ratio of nonperforming loans to total loans and leases was 0.48% as of September 30, 2026, versus 0.49% as of September 30, 2025. On a linked quarter basis, nonperforming loans were $27.1 million, and the ratio of nonperforming loans to total loans and leases was 0.61% as of June 30, 2026. Credit Loss Provision Benefit from credit losses for the three months ended September 30, 2026, was $750 thousand, compared to a provision expense of $2.0 million for the same period 2025. The benefit from credit losses was primarily due to an individually evaluated loan from a prior acquisition that was fully recovered during the current quarter. Net Charge-Offs In the third quarter of 2026 net charge-offs were $1.0 million compared to $1.6 million in the same period of 2025. Allowance for Credit Losses The Corporation’s allowance for credit losses as of September 30, 2026, was $49.7 million compared to $47.4 million as of September 30, 2025. The allowance for credit losses as a percent of total loans was 1.13% as of September 30, 2026, compared to 1.20% as of September 30, 2025. On a linked quarter basis, the allowance for credit losses as a percent of total loans decreased one basis point from 1.14% as of June 30, 2026. Non-Interest Income Non-interest income for the three months ended September 30, 2026, and 2025 was $11.4 million and $11.1 million, respectively. Non-Interest Expense Non-interest expense for the three months ended September 30, 2026, was $41.3 million compared to $38.0 million in 2025. Efficiency Ratio The Corporation’s efficiency ratio was 53.96% for the quarter ended September 30, 2026, versus 56.63% for the same period in 2025. Income Taxes Income tax expense for the three months ended September 30, 2026, was $7.0 million versus $5.0 million for the same period in 2025. The effective tax rate for 2026 was 19.73% compared to 20.18% for 2025. 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 81 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, 2026 2026 2025 2026 2025 END OF PERIOD BALANCES Assets $ 6,060,947 $ 6,178,309 $ 5,669,686 $ 6,060,947 $ 5,669,686 Deposits $ 4,865,297 $ 4,833,399 $ 4,615,305 $ 4,865,297 $ 4,615,305 Loans, including net deferred loan costs $ 4,411,800 $ 4,467,897 $ 3,967,401 $ 4,411,800 $ 3,967,401 Allowance for Credit Losses $ 49,717 $ 50,938 $ 47,411 $ 49,717 $ 47,411 Total Equity $ 660,446 $ 675,785 $ 622,218 $ 660,446 $ 622,218 Tangible Common Equity (a) $ 544,588 $ 558,687 $ 506,604 $ 544,588 $ 506,604 AVERAGE BALANCES Total Assets $ 6,117,294 $ 6,126,618 $ 5,593,870 $ 6,031,334 $ 5,543,954 Earning Assets $ 5,778,756 $ 5,799,062 $ 5,270,173 $ 5,700,596 $ 5,225,957 Investments $ 1,234,919 $ 1,256,470 $ 1,248,519 $ 1,251,701 $ 1,253,009 Loans $ 4,448,907 $ 4,452,394 $ 3,928,817 $ 4,353,889 $ 3,882,605 Total Deposits $ 4,851,598 $ 4,868,890 $ 4,591,531 $ 4,794,756 $ 4,631,155 Interest-Bearing Deposits $ 3,893,407 $ 3,987,492 $ 3,783,393 $ 3,866,323 $ 3,821,405 Interest-Bearing Liabilities $ 540,655 $ 554,935 $ 359,579 $ 525,221 $ 296,667 Total Equity $ 680,345 $ 663,602 $ 601,034 $ 669,281 $ 580,688 INCOME STATEMENT DATA Net Interest Income $ 63,526 $ 61,222 $ 54,603 $ 181,681 $ 159,249 Net Interest Income Fully Tax Equivalent (b) $ 65,064 $ 62,739 $ 56,033 $ 186,200 $ 163,497 Provision for (Benefit from) Credit Losses $ (750 ) $ 1,300 $ 1,950 $ 3,100 $ 5,950 Non-interest Income $ 11,434 $ 10,646 $ 11,149 $ 33,297 $ 32,041 Non-interest Expense $ 41,279 $ 42,529 $ 38,048 $ 124,687 $ 112,983 Net Income $ 27,441 $ 22,743 $ 20,762 $ 69,988 $ 57,754 PER SHARE DATA Basic and Diluted Net Income Per Common Share $ 2.31 $ 1.91 $ 1.75 $ 5.89 $ 4.87 Cash Dividends Declared Per Common Share $ 0.56 $ 0.56 $ 0.51 $ 1.68 $ 1.53 Book Value Per Common Share $ 55.54 $ 56.83 $ 52.50 $ 55.54 $ 52.50 Tangible Book Value Per Common Share (c) $ 47.47 $ 45.96 $ 40.96 $ 45.79 $ 42.75 Basic Weighted Average Common Shares Outstanding 11,892 11,892 11,851 11,889 11,848 ________________________________ (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 shareholders’ 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 shareholders’ equity. Key Ratios Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2026 2026 2025 2026 2025 Return on average assets 1.79 % 1.48 % 1.48 % 1.54 % 1.39 % Return on average common shareholders' equity 16.13 % 13.71 % 13.82 % 13.91 % 13.23 % Efficiency ratio 53.96 % 57.95 % 56.63 % 56.81 % 57.83 % Average equity to average assets 11.12 % 10.83 % 10.74 % 11.10 % 10.47 % Net interest margin (a) 4.51 % 4.33 % 4.25 % 4.36 % 4.17 % Net charge-offs to average loans and leases 0.09 % 0.24 % 0.17 % 0.16 % 0.18 % Credit loss reserve to loans and leases 1.13 % 1.14 % 1.20 % 1.13 % 1.20 % Credit loss reserve to nonperforming loans 235.97 % 188.21 % 246.14 % 235.97 % 246.14 % Nonperforming loans to loans and leases 0.48 % 0.61 % 0.49 % 0.48 % 0.49 % Tier 1 leverage 11.20 % 10.81 % 11.05 % 11.20 % 11.05 % Risk-based capital - Tier 1 13.34 % 12.78 % 13.12 % 13.34 % 13.12 % ________________________________ (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, 2026 2026 2025 2026 2025 Accruing loans and leases past due 30-89 days $ 15,299 $ 12,726 $ 14,388 $ 15,299 $ 14,388 Accruing loans and leases past due 90 days or more $ 1,294 $ 3,030 $ 1,792 $ 1,294 $ 1,792 Nonaccrual loans and leases $ 19,775 $ 24,035 $ 17,470 $ 19,775 $ 17,470 Other real estate owned $ 1,418 $ 1,039 $ 138 $ 1,418 $ 138 Nonperforming loans and other real estate owned $ 22,487 $ 28,104 $ 19,400 $ 22,487 $ 19,400 Total nonperforming assets $ 25,148 $ 30,755 $ 22,243 $ 25,148 $ 22,243 Gross charge-offs $ 3,049 $ 4,084 $ 3,226 $ 10,078 $ 9,395 Recoveries $ 2,078 $ 1,384 $ 1,600 $ 4,880 $ 4,224 Net charge-offs/(recoveries) $ 971 $ 2,700 $ 1,626 $ 5,198 $ 5,171 Non-GAAP Reconciliations Three Months Ended September 30, 2026 2025 ($in thousands, except EPS) Income before Income Taxes $ 34,431 $ 25,754 Provision for (benefit from) credit losses (250 ) 1,950 Provision for (benefit from) unfunded commitments (500 ) — Pre-tax, Pre-provision Income $ 33,681 $ 27,704 Non-GAAP Reconciliations Nine Months Ended September 30, 2026 2025 ($ in thousands, except EPS) Income before Income Taxes $ 87,191 $ 72,357 Provision for (benefit from) credit losses 3,600 5,850 Provision for (benefit from) unfunded commitments (500 ) 100 Pre-tax, Pre-provision Income $ 90,291 $ 78,307 CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except per share data) September 30, December 31, 2026 2025 (unaudited) ASSETS Cash and due from banks $ 92,497 $ 130,369 Federal funds sold 667 475 Securities available-for-sale 1,104,628 1,149,526 Loans: Commercial 2,371,255 2,375,344 Residential 1,308,869 986,955 Consumer 725,268 688,135 4,405,392 4,050,434 (Less) plus: Net deferred loan costs 6,408 4,869 Allowance for credit losses (49,717 ) (47,995 ) 4,362,083 4,007,308 Restricted stock 23,579 18,536 Accrued interest receivable 28,797 27,762 Premises and equipment, net 87,697 78,582 Bank-owned life insurance 137,867 131,286 Goodwill 98,229 98,229 Other intangible assets 17,629 16,234 Other real estate owned 1,418 94 Other assets 105,856 97,725 TOTAL ASSETS $ 6,060,947 $ 5,756,126 LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits: Non-interest-bearing $ 990,989 $ 916,473 Interest-bearing: Certificates of deposit exceeding the FDIC insurance limits 218,702 135,605 Other interest-bearing deposits 3,655,606 3,499,033 4,865,297 4,551,111 Short-term borrowings 203,472 292,468 FHLB advances 262,348 188,208 Other liabilities 69,384 73,470 TOTAL LIABILITIES 5,400,501 5,105,257 Shareholders’ equity Common stock, $.125 stated value per share; Authorized shares-40,000,000 Issued shares-16,206,804 in 2026 and 16,190,157 in 2025 Outstanding shares-11,891,896 in 2026 and 11,880,759 in 2025 2,022 2,021 Additional paid-in capital 148,046 147,442 Retained earnings 791,803 741,793 Accumulated other comprehensive income/(loss) (127,387 ) (86,681 ) Less: Treasury shares at cost-4,314,908 in 2026 and 4,309,398 in 2025 (154,038 ) (153,706 ) TOTAL SHAREHOLDERS’ EQUITY 660,446 650,869 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,060,947 $ 5,756,126 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, 2026 2025 2026 2025 (unaudited) INTEREST INCOME: Loans, including related fees $ 76,585 $ 67,070 $ 218,092 $ 195,457 Securities: Taxable 6,367 5,985 19,257 17,902 Tax-exempt 3,019 2,689 8,897 7,915 Other 958 900 2,848 2,579 TOTAL INTEREST INCOME 86,929 76,644 249,094 223,853 INTEREST EXPENSE: Deposits 18,117 18,002 52,496 54,696 Short-term borrowings 2,303 1,916 7,275 5,007 Other borrowings 2,983 2,123 7,642 4,901 TOTAL INTEREST EXPENSE 23,403 22,041 67,413 64,604 NET INTEREST INCOME 63,526 54,603 181,681 159,249 Provision for (benefit from) credit losses - loans (250 ) 1,950 3,600 5,850 Provision for (benefit from) credit losses - unfunded commitments (500 ) — (500 ) 100 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 64,276 52,653 178,581 153,299 NON-INTEREST INCOME: Trust and financial services 1,394 1,278 4,388 4,161 Service charges and fees on deposit accounts 8,407 8,104 24,006 23,243 Other service charges and fees 259 251 978 823 Securities gains/(losses), net — 24 (109 ) 21 Interchange income 232 176 632 570 Loan servicing fees 338 338 997 830 Gain on sales of mortgage loans 335 494 1,122 1,149 Bargain purchase gain — — 33 — Other 469 484 1,250 1,244 TOTAL NON-INTEREST INCOME 11,434 11,149 33,297 32,041 NON-INTEREST EXPENSE: Salaries and employee benefits 20,809 19,788 63,442 58,725 Occupancy expense 2,730 2,738 8,402 7,886 Equipment expense 5,836 4,811 16,473 13,903 FDIC expense 665 690 2,045 2,235 Other 11,239 10,021 34,325 30,234 TOTAL NON-INTEREST EXPENSE 41,279 38,048 124,687 112,983 INCOME BEFORE INCOME TAXES 34,431 25,754 87,191 72,357 Provision for income taxes 6,990 4,992 17,203 14,603 NET INCOME 27,441 20,762 69,988 57,754 OTHER COMPREHENSIVE INCOME (LOSS) Change in unrealized gains/(losses) on securities, net of reclassifications and taxes (36,401 ) 19,596 (40,943 ) 33,642 Change in funded status of post retirement benefits, net of taxes 79 3 237 8 COMPREHENSIVE INCOME (LOSS) $ (8,881 ) $ 40,361 $ 29,282 $ 91,404 PER SHARE DATA Basic and Diluted Earnings per Share $ 2.31 $ 1.75 $ 5.89 $ 4.87 Weighted average number of shares outstanding (in thousands) 11,892 11,851 11,889 11,848 Source: First Financial Corporation Indiana