First Financial (THFF) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for Q1 2025 was $18.4 million, up from $10.9 million in Q1 2024, with basic earnings per share increasing to $1.55 from $0.93[111] - Non-interest income for Q1 2025 was $10.5 million, an increase from $9.4 million in Q1 2024[116] - Non-interest expenses for Q1 2025 were $36.8 million, up from $33.4 million in Q1 2023, reflecting an increase due to acquisition-related operating expenses[117] Interest Income and Margin - Net interest income rose by $13.1 million to $52.0 million in Q1 2025, with a net interest margin of 4.11%, a 16.44% increase from 3.53% in Q1 2024[114] - Net interest income rose by $13.1 million to $52.0 million in Q1 2025, compared to $38.9 million in Q1 2024, reflecting a net interest margin increase to 4.11% from 3.53%[114] - Given a 100 basis point increase in interest rates, net interest income is projected to decrease by 1.41% over the next 12 months[127] Credit Quality - Non-performing loans decreased to $10.2 million at March 31, 2025, down 58.0% from $24.3 million in Q1 2024[120] - The allowance for credit losses was $46.8 million as of March 31, 2025, compared to $46.7 million at December 31, 2024, with a qualitative reserve increase of $363 thousand[108] - The provision for credit losses for Q1 2025 was $2.0 million, compared to $1.8 million in Q1 2024, with net charge-offs of $1.8 million versus $1.5 million in the same period[118] - The non-performing asset ratio was 0.25% of total assets as of March 31, 2025, with net charge-offs at 0.19% of average loans and leases[112] - The ratio of the allowance for credit losses to non-performing loans was 460.6% as of March 31, 2025, compared to 351.4% at December 31, 2024[121] Liquidity and Capital - Liquidity remains strong, with cash and available-for-sale securities representing approximately 22.9% of total assets as of March 31, 2025[112] - The Corporation anticipates $35.8 million in securities to be called within the next 12 months, contributing to liquidity management[130] - The Corporation anticipates $114.2 million in principal payments from mortgage-backed and other securities over the next 12 months, ensuring adequate liquidity[130] - The Corporation's common equity tier 1 capital ratio was 12.70% as of March 31, 2025, up from 12.43% at December 31, 2024, exceeding regulatory requirements[137] - The Corporation's Tier 1 capital ratio was 12.70% as of March 31, 2025, up from 12.43% at December 31, 2024, exceeding regulatory requirements[137] Taxation - The effective income tax rate for Q1 2025 was 22.59%, up from 16.79% in Q1 2024, driven by significantly higher pretax income[119] - The effective income tax rate rose to 22.59% in Q1 2025 compared to 16.79% in Q1 2024, driven by significantly higher pretax income[119] Loan and Deposit Trends - Total loans increased by $17 million to $3.9 billion as of March 31, 2025, while deposits decreased by 1.7% to $4.6 billion[131] - Total loans net of deferred loan costs increased by $17 million to $3.9 billion compared to December 31, 2024, while deposits decreased by 1.7% to $4.6 billion[131] - Shareholders' equity increased by 4.17% or $22.9 million, raising book value per share to $48.26 from $46.36[131] Management Commentary - Management believes the allowance for credit losses is adequate based on current portfolio analysis and economic conditions[109]