Core Viewpoint - The article emphasizes the importance of "years of consecutive dividend growth" as a measure of safety in the search for high-quality bank stocks, specifically highlighting First Financial Corporation based in Terre Haute, Indiana [1]. Group 1 - The investment strategy focuses on a long-term, buy-and-hold approach, favoring stocks that can consistently deliver high-quality earnings, particularly in the dividend and income sector [1]. - The author engages in blogging about various US and Canadian stocks, as well as predominantly UK names, indicating a broad interest in dividend-paying investments [1].

Core Viewpoint - First Financial Corp. (THFF) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system focuses on the consensus measure of EPS estimates from sell-side analysts, which is crucial for understanding a company's earnings trajectory [2]. - Recent trends show that First Financial Corp. is expected to earn $5.56 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 39% [9]. - Over the past three months, the Zacks Consensus Estimate for First Financial Corp. has risen by 7.2%, indicating a positive shift in earnings expectations [9]. Impact on Stock Price - Changes in earnings estimates are strongly correlated with near-term stock price movements, primarily due to institutional investors adjusting their valuations based on these estimates [5]. - The upgrade to Zacks Rank 1 suggests an improvement in First Financial Corp.'s underlying business, which is likely to drive the stock price higher as investors respond to this trend [6][11]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions and potential for market-beating returns [10][11].

Employment and Operations - First Financial Corporation had 937 full-time equivalent employees as of the end of 2024[16]. - The Corporation operates in a highly competitive environment, facing competition from commercial banks, credit unions, and other financial institutions[22]. - The Corporation's business activities are primarily centered in west-central Indiana, east-central Illinois, western Kentucky, eastern and central Tennessee, and northern Georgia[22]. - The Corporation operates 83 branches across multiple states, indicating a strong regional presence[301]. Risk Management and Compliance - The Corporation's risk management includes established underwriting standards for commercial loans, which are primarily secured by borrower cash flows and collateral[17]. - The Corporation's consumer loan portfolio includes home equity loans, secured loans, and unsecured loans, with risks mitigated by a diverse mix of products[20]. - The Corporation's commercial real estate loans are underwritten based on cash flows and collateral value, with specific risks associated with construction loans[18]. - The Corporation is subject to regulation by several agencies, including the Federal Reserve and the FDIC, which may impact its business and prospects[23]. - The Corporation's banking subsidiaries currently meet capital, management, and CRA requirements[42]. - The Bank is subject to limitations on the amount of loans or extensions of credit to affiliates and insiders, ensuring compliance with regulatory standards[54]. - The bank must adhere to guidelines established by federal banking agencies regarding internal controls, loan documentation, and management compensation[81]. - The Corporation's internal controls and risk management systems may not be fully effective, potentially leading to unmitigated risks in various market environments[127]. - The Corporation is subject to increased scrutiny regarding compliance with anti-money laundering regulations, which could result in significant penalties[150]. Financial Performance and Capital Ratios - The Corporation's CET1 ratio is 12.76% to risk-weighted assets, exceeding the minimum requirement of 7.00%[8]. - The Tier 1 capital ratio stands at 12.76% to risk-weighted assets, above the minimum requirement of 8.50%[8]. - The Total capital ratio is 13.81% to risk-weighted assets, surpassing the minimum requirement of 10.50%[8]. - The leverage ratio is reported at 10.26%, exceeding the minimum requirement of 4%[8]. - The Corporation's common equity Tier 1 risk-weighted capital ratio is required to be at least 7% under Basel III regulations, with a total risk-based capital ratio requirement of 10.5%[149]. - The Corporation's ability to pay dividends is subject to legal and regulatory restrictions, and future payments will depend on earnings and capital requirements[155]. - The Corporation's reliance on dividends from subsidiaries for revenue may be impacted by regulatory limitations on dividend payments, affecting its ability to service debt and pay obligations[141]. Economic Conditions and Market Risks - The Corporation's financial performance is highly dependent on economic conditions, with potential adverse effects from economic downturns, high unemployment, and inflation impacting borrowers' ability to repay loans[89]. - A collection of bank failures in March 2023, including Silvergate Bank and Silicon Valley Bank, has negatively impacted depositor confidence and could affect the Corporation's stock price and financial condition[91]. - Continued elevated levels of inflation and the Federal Reserve's monetary policy changes, including a 100 basis point cut in the target fed funds rate in 2024, may adversely impact the Corporation's results of operations[95]. - Changes in interest rates significantly affect the Corporation's net interest income, which is crucial for earnings, with potential adverse effects if interest rates on loans decrease faster than those on deposits[96][98]. - Geographic concentration in markets such as west central Indiana and eastern Tennessee makes the Corporation susceptible to local economic downturns, potentially leading to increased loan delinquencies and reduced demand for products[102][103]. - Economic conditions in local markets may differ from national trends, increasing the risk of financial instability for the Corporation[102]. Credit Losses and Allowance for Credit Losses - The provision for credit loss expense for the year ending December 31, 2024, was $16.2 million, with an allowance for credit losses at $46.7 million[287]. - The allowance for credit losses methodology includes tracking losses from loan cohorts based on economic indicators such as unemployment rates and GDP[288]. - The allowance for credit losses is influenced by loan volumes, quality rating migration, delinquency status, and economic forecasts[319]. - Credit quality is continuously monitored, and the allowance for credit losses is adjusted based on expected losses inherent in the loan portfolio[316]. - The methodology for estimating expected credit losses includes specific and pooled components, with historical loss experience since 2008 being a key factor[320]. Technological and Operational Risks - The Corporation's operational systems are increasingly at risk of cybersecurity threats, which could lead to financial liability and damage to reputation[117]. - The reliance on external vendors for day-to-day operations exposes the Corporation to operational risks if these vendors fail to perform as contracted[122]. - The Corporation implemented an AI digital assistant, Gabby, which may expose it to increased operational risks and regulatory scrutiny[126]. - New lines of business or products may introduce additional risks, and failure to manage these effectively could adversely affect the Corporation's financial condition[123]. - The financial services industry is characterized by rapid technological change, and failure to keep pace may negatively impact the Corporation's growth and revenue[124]. Financial Results and Trends - Total assets increased to $5.56 billion in 2024 from $4.85 billion in 2023, representing a growth of approximately 14.6%[292]. - Net interest income for 2024 was $174.986 million, compared to $167.262 million in 2023, reflecting an increase of about 4.3%[293]. - Total interest income rose to $264.742 million in 2024, up from $228.397 million in 2023, marking an increase of approximately 15.9%[293]. - Non-interest income remained stable at $42.772 million in 2024, slightly up from $42.702 million in 2023[293]. - Net income for 2024 was $47.275 million, a decrease from $60.672 million in 2023, representing a decline of about 22%[293]. - Basic and diluted earnings per share for 2024 were $4.00, down from $5.08 in 2023, indicating a decrease of about 21.3%[293]. - The company reported a comprehensive income of $42.077 million in 2024, compared to $73.559 million in 2023, reflecting a significant decrease[293]. - Net cash from operating activities decreased to $60.366 million in 2024 from $86.090 million in 2023, reflecting a decline of 30%[297]. - Cash flows from investing activities showed a net outflow of $66.119 million in 2024, compared to an outflow of $22.098 million in 2023[297]. - Interest paid for the year increased to $88.545 million in 2024 from $59.031 million in 2023, marking a rise of 50%[297]. Regulatory Environment and Future Outlook - Regulatory scrutiny and potential new legislation following bank failures may require the Corporation to adjust its strategy and operations, impacting operating expenses and results[94]. - Future changes in federal and state laws and regulations could significantly increase the Corporation's costs and impact its financial condition[148]. - The Corporation may face increased FDIC insurance premiums due to market developments affecting the insurance fund[152]. - The Corporation's stock price may be volatile, influenced by various factors including market conditions and regulatory changes[156]. - The Corporation's access to funding sources may be impaired by adverse market conditions or regulatory actions, affecting its ability to finance activities[105].

Company Overview - First Financial Corp. (THFF) is headquartered in Terre Haute and operates in the Finance sector [3] - The stock has experienced a price change of 8.66% since the beginning of the year [3] - The company currently pays a dividend of $0.51 per share, resulting in a dividend yield of 4.06%, which is significantly higher than the Banks - Midwest industry's yield of 2.96% and the S&P 500's yield of 1.56% [3] Dividend Performance - The current annualized dividend of First Financial Corp. is $2.04, reflecting a 51.1% increase from the previous year [4] - Over the past five years, the company has increased its dividend three times on a year-over-year basis, averaging an annual increase of 13.25% [4] - The current payout ratio is 45%, indicating that the company paid out 45% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - First Financial Corp. is expected to see earnings expansion in the current fiscal year, with the Zacks Consensus Estimate for 2025 projected at $5.41 per share, representing a year-over-year earnings growth rate of 35.25% [5] Investment Appeal - The company is viewed as an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 1 (Strong Buy) [7]

Group 1: Company Overview - First Financial Corp. (THFF) is based in Terre Haute and operates in the Finance sector, with a year-to-date share price change of 12.58% [3] - The company currently pays a dividend of $0.51 per share, resulting in a dividend yield of 3.92%, which is significantly higher than the Banks - Midwest industry's yield of 2.77% and the S&P 500's yield of 1.49% [3] Group 2: Dividend Performance - The current annualized dividend of First Financial Corp. is $2.04, reflecting a 51.1% increase from the previous year [4] - Over the past five years, the company has increased its dividend three times on a year-over-year basis, averaging an annual increase of 13.25% [4] - The company's payout ratio stands at 49%, indicating that it distributes 49% of its trailing 12-month earnings per share as dividends [4] Group 3: Earnings Growth Expectations - For the fiscal year, First Financial Corp. anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 projected at $5.41 per share, representing a year-over-year growth rate of 35.25% [5] Group 4: Investment Appeal - First Financial Corp. is viewed as an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 1 (Strong Buy) [7]

Core Insights - First Financial Corp. reported revenue of $61.82 million for the quarter ended December 2024, marking a year-over-year increase of 21.6% and exceeding the Zacks Consensus Estimate by 6.76% [1] - The company's EPS for the same period was $1.37, up from $1.06 a year ago, with an EPS surprise of 6.20% compared to the consensus estimate of $1.29 [1] Financial Performance Metrics - Net Interest Margin was reported at 3.9%, slightly above the two-analyst average estimate of 3.8% [4] - The Efficiency Ratio stood at 63%, compared to the two-analyst average estimate of 61.9% [4] - Total Non-Interest Income was $12.21 million, exceeding the two-analyst average estimate of $10.80 million [4] - Gain on sale of mortgage loans was $0.27 million, slightly below the average estimate of $0.30 million based on two analysts [4] Stock Performance - Shares of First Financial Corp. have returned +6.9% over the past month, outperforming the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - First Financial Corp. reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.29 per share, and showing an increase from $1.06 per share a year ago, indicating a positive earnings surprise of 6.20% [1] Financial Performance - The company posted revenues of $61.82 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.76%, compared to $50.84 million in the same quarter last year [2] - Over the last four quarters, First Financial Corp. has exceeded consensus revenue estimates two times [2] Stock Performance - First Financial Corp. shares have increased approximately 4% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] Future Outlook - The company's earnings outlook will be crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $1.18 on revenues of $56.7 million, and for the current fiscal year, it is $5.19 on revenues of $235 million [7] Industry Context - The Banks - Midwest industry, to which First Financial Corp. belongs, is currently ranked in the top 5% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Loan Performance - Average total loans for Q4 2024 were $3.79 billion, an increase of $657 million or 20.98% year-over-year[5] - Total loans outstanding as of December 31, 2024, were $3.84 billion, up $669 million or 21.13% from the previous year[6] - Nonperforming loans decreased to $13.3 million, down from $24.6 million year-over-year, resulting in a nonperforming loan ratio of 0.35%[15] - Nonperforming loans to loans and leases decreased to 0.35% as of December 31, 2024, down from 0.78% a year earlier[28] - Total nonperforming assets decreased to $16,719 thousand as of December 31, 2024, from $27,665 thousand a year earlier[29] Financial Performance - Net income for Q4 2024 was $16.2 million, compared to $12.4 million for the same period in 2023, representing a 30.65% increase[7] - Net income for the year ended December 31, 2024, was $47,275 thousand, compared to $60,672 thousand in 2023[32] - Basic and diluted earnings per share for the year ended December 31, 2024, were $4.00, down from $5.08 in 2023[32] Deposits and Assets - Average total deposits for Q4 2024 were $4.76 billion, an increase of $706 million or 17.44% year-over-year[8] - Total assets reached $5,560,348 thousand as of December 31, 2024, an increase from $4,851,146 thousand in 2023[31] Income and Expenses - Net interest income for Q4 2024 reached a record $49.6 million, an increase of $10.0 million or 25.29% from Q4 2023[13] - Total non-interest expense increased to $144,438 thousand for the year ended December 31, 2024, compared to $130,176 thousand in 2023[32] Efficiency and Ratios - The efficiency ratio improved to 62.98% for Q4 2024, compared to 65.62% for the same period in 2023[21] - Return on average assets increased to 1.18% for the three months ended December 31, 2024, compared to 0.64% in the previous quarter[28] - Net interest margin improved to 3.94% for the three months ended December 31, 2024, up from 3.78% in the previous quarter[28] - Average equity to average assets increased to 10.09% for the three months ended December 31, 2024, compared to 9.97% in the previous quarter[28] Shareholder Equity - Shareholders' equity increased to $549.0 million as of December 31, 2024, compared to $528.0 million a year earlier[10] - Book value per share rose to $46.36 as of December 31, 2024, an increase of $1.60 or 3.57% from the previous year[11] Credit Loss Provision - The provision for credit losses for Q4 2024 was $2.0 million, down from $2.5 million in Q4 2023[16] - Provision for credit losses increased to $16,166 thousand for the year ended December 31, 2024, from $7,295 thousand in 2023[32]

Core Viewpoint - First Financial Corporation reported strong financial results for the fourth quarter and the year ended December 31, 2024, highlighting significant growth in loans and deposits, record net interest income, and improved net interest margin. Financial Performance - Net income for Q4 2024 was $16.2 million, up from $12.4 million in Q4 2023, with diluted net income per share increasing to $1.37 from $1.06 [6] - For the full year 2024, net income was $47.3 million, down from $60.7 million in 2023, with diluted net income per share at $4.00 compared to $5.08 [6] Loan and Deposit Growth - Average total loans for Q4 2024 were $3.79 billion, a 20.98% increase from $3.13 billion in Q4 2023, primarily due to the acquisition of SimplyBank [3] - Total loans outstanding as of December 31, 2024, were $3.84 billion, up 21.13% from $3.17 billion a year earlier [4] - Average total deposits for Q4 2024 were $4.76 billion, a 17.44% increase from $4.05 billion in Q4 2023 [7] - Total deposits as of December 31, 2024, were $4.72 billion, a 15.37% increase from $4.09 billion a year earlier [8] Net Interest Income and Margin - Record net interest income for Q4 2024 was $49.6 million, an increase of 25.29% from $39.6 million in Q4 2023 [12] - The net interest margin for Q4 2024 was 3.94%, up from 3.63% in Q4 2023 [13] Asset Quality - Nonperforming loans decreased to $13.3 million as of December 31, 2024, from $24.6 million a year earlier, with a nonperforming loans to total loans ratio of 0.35% compared to 0.78% [14] - The allowance for credit losses was $46.7 million as of December 31, 2024, compared to $39.8 million a year earlier, representing 1.22% of total loans [18] Shareholder Equity and Dividends - Shareholders' equity at December 31, 2024, was $549.0 million, up from $528.0 million a year earlier [9] - The book value per share increased to $46.36 as of December 31, 2024, from $44.76 a year earlier [10] - The corporation declared a quarterly dividend of $0.51 per share, paid on January 15, 2025 [9]

Group 1 - The stock of First Financial Corporation (THFF) is experiencing significant attention due to high implied volatility in the options market, particularly for the Dec 20, 2024 $60.00 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in the stock's price, potentially due to an upcoming event [2] - First Financial Corporation Indiana holds a Zacks Rank 3 (Hold) in the Banks-Midwest industry, which is in the top 19% of the Zacks Industry Rank, with recent analyst estimates for the current quarter increasing from $1.20 to $1.29 per share [3] Group 2 - The high implied volatility for First Financial Corporation may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay, hoping the stock does not move as much as expected at expiration [4]