First Financial Corporation Reports Strong First Quarter 2026 Results, Surpasses \$6 Billion in Assets

Key Financial Highlights

• Net income: \$19.8 million, up from \$18.4 million in Q1 2025
• Diluted EPS: \$1.67, up from \$1.55 in Q1 2025
• Return on Average Assets (ROAA): 1.35% (Q1 2025: 1.34%)
• Pre-tax, pre-provision income (non-GAAP): \$27.3 million (Q1 2025: \$25.7 million)
• Net interest income: Record \$56.9 million (+9.5% YoY)
• Net interest margin: 4.23% (Q1 2025: 4.11%)
• Total assets: \$6.13 billion, passing the \$6 billion mark for the first time
• Total loans outstanding: \$4.42 billion, up 14.79% YoY
• Total deposits: \$4.84 billion, up 4.35% YoY
• Book value per share: \$55.10, up 14.17% YoY
• Tangible book value per share: \$45.13, up 18.36% YoY
• Efficiency ratio: 58.72% (Q1 2025: 57.54%)
• Dividend: \$0.56 per share declared and paid in April 2026

Strategic Developments and Price Sensitive Events

Acquisition of CedarStone Financial, Inc.

• On March 1, 2026, First Financial completed the acquisition of CedarStone Financial, Inc.
• Loans acquired: \$292 million
• Deposits acquired: \$313 million
• Bargain purchase gain: \$716 thousand recognized
• This acquisition contributed to the strong loan and deposit growth and will likely have ongoing implications for scale and regional presence.

Loan and Deposit Growth

Average total loans for Q1 2026 were \$4.16 billion, up 8.29% year-over-year. Total loans outstanding at the end of Q1 2026 were \$4.42 billion, an increase of \$570 million (14.79%) over Q1 2025. Organic growth of \$77 million was primarily attributed to increases in commercial construction, development, commercial real estate, and consumer auto loans.

Deposits also saw a meaningful increase, with total deposits reaching \$4.84 billion at quarter-end, up from \$4.64 billion a year earlier. On a linked quarter basis, deposits grew by \$291.3 million (6.40%). Non-interest bearing deposits stood at \$1.1 billion, and time deposits at \$812.2 million as of December 31, 2025, compared to \$856.1 million and \$726 million, respectively, a year earlier.

Asset Growth and Capital Position

First Financial’s total assets reached \$6.13 billion as of March 31, 2026, a significant milestone for the company. Shareholders’ equity also increased to \$655.3 million, up from \$571.9 million a year ago. The tangible common equity to tangible asset ratio stood at 8.93%, improved from 8.32% a year earlier, reflecting a stronger balance sheet and capital position.

Operational Performance

Net Interest Income and Margin

Net interest income reached a record \$56.9 million, reflecting a \$5.0 million (9.5%) increase over Q1 2025. Notably, net interest margin improved to 4.23%, up from 4.11% a year ago, underscoring effective asset-liability management and a favorable lending environment.

Non-Interest Income and Expenses

• Non-interest income: \$11.2 million (Q1 2025: \$10.5 million)
• Non-interest expense: \$40.9 million (Q1 2025: \$36.8 million)
• Efficiency ratio increased slightly to 58.72%. Management will need to monitor cost controls, but the increase is in line with growth and acquisition activity.

Credit Quality and Risk Metrics

• Nonperforming loans: \$28.5 million, up from \$10.2 million a year ago (ratio to total loans and leases rose to 0.64% from 0.26%)
• Allowance for credit losses: \$52.3 million (1.18% of total loans), up from \$46.8 million (1.22%)
• Net charge-offs: \$1.5 million, down from \$1.8 million in Q1 2025
• Provision for credit losses: \$2.6 million, up from \$2.0 million a year ago
• The increase in nonperforming loans is notable and should be monitored by shareholders, though the coverage ratio remains solid and net charge-offs have decreased.

Shareholder Returns

• No shares repurchased in the past 12 months; 518,860 shares remain authorized for repurchase
• Quarterly dividend of \$0.56 per share was paid in January and April 2026, up from \$0.51 a year ago
• Book value per share: \$55.10 (up 14.17% YoY)
• Tangible book value per share: \$45.13 (up 18.36% YoY)

Other Noteworthy Points

• Income tax expense: \$4.9 million, with an effective tax rate of 19.89% (down from 22.59%)
• Comprehensive income: \$11.2 million, impacted by a \$8.7 million unrealized loss on securities
• First Financial Bank N.A. now operates 79 banking centers across five states (Illinois, Indiana, Kentucky, Tennessee, Georgia)

Management Commentary

“We are pleased with our first quarter results. In the first quarter, we surpassed \$6 billion in total assets for the first time, and it marked the tenth consecutive quarter of loan growth, which surpassed \$4 billion in loans for the first time last quarter. Our margin remains strong at 4.23% and credit quality remains stable.” – Norman D. Lowery, President and CEO

Implications for Shareholders and Potential Share Price Impact

• The company’s continued loan and asset growth, record net interest income, and improved book values are all positive signals for future profitability and shareholder value.
• The successful integration of CedarStone Financial, Inc. and the recognition of a bargain purchase gain indicate strong execution on M&A strategy, potentially increasing scale and future earnings power.
• The rise in nonperforming loans is a risk to monitor, though it is currently well-managed with increased reserves and a stable net charge-off rate.
• Sustained dividend growth and a strong capital position enhance the investment case for long-term shareholders.
• Passing the \$6 billion asset threshold could increase market visibility and potentially attract new institutional investors.

Investor Contact Information

Rodger A. McHargue
Chief Financial Officer
Phone: 812-238-6334
Email: [email protected]

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions. All data are sourced from First Financial Corporation’s official Q1 2026 report, and while best efforts are made to ensure accuracy, no liability is accepted for any errors or omissions.

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