First Financial Corporation Reports Record Second Quarter 2026 Results
Strong Earnings, Continued Loan Growth, and Strategic Acquisition Highlight Performance
Terre Haute, Indiana, July 28, 2026 – First Financial Corporation (NASDAQ: THFF), the holding company for First Financial Bank N.A., has announced robust financial results for the second quarter ended June 30, 2026. The quarter was marked by record net income, significant loan growth, a strategic acquisition, and increases in both book value and equity, all of which could have material impacts on shareholder value.
Key Financial Highlights
- Net Income: Q2 2026 net income rose to \$22.7 million, up from \$18.6 million in the prior year period. For the first half of 2026, net income was \$42.5 million, compared to \$37.0 million for the same period in 2025.
- Earnings Per Share: Diluted net income per share increased to \$1.91 for the quarter (vs. \$1.57 in Q2 2025) and \$3.58 for the six months (vs. \$3.12 in 2025).
- Return on Average Assets: 1.48% for the quarter (1.34% in Q2 2025) and 1.42% for the six months (1.34% in 2025).
- Net Interest Income: Record net interest income of \$61.2 million in Q2 2026, up 16.2% year-over-year, driven by a \$10 million increase in interest income.
- Net Interest Margin: Improved to 4.33% from 4.15% a year ago.
- Pre-tax, Pre-provision Income: \$29.3 million for the quarter, up from \$24.9 million in Q2 2025.
- Efficiency Ratio: 57.95% in Q2 2026 (improved from 59.37% in Q2 2025).
Loan and Deposit Growth
- Total Loans: \$4.47 billion as of June 30, 2026, up \$571 million (14.66%) from a year ago. Organic loan growth contributed \$300 million, primarily from Commercial Construction & Development, Commercial Real Estate, and Consumer Auto loans.
- Average Loans: \$4.45 billion in Q2 2026, up 14.83% year-over-year.
- Total Deposits: Ended the quarter at \$4.83 billion, a \$170 million increase from June 2025. Average deposits rose 4.68% year-over-year to \$4.87 billion.
- Deposit Mix: Non-interest bearing deposits were \$999 million, while time deposits rose to \$802 million (from \$860 million and \$710 million, respectively, in 2025).
Strategic Acquisition
On March 1, 2026, First Financial completed the acquisition of CedarStone Financial, Inc., bringing in \$292 million in loans and \$313 million in deposits. Initially, a bargain purchase gain of \$716,000 was recognized, but after measurement period adjustments, the cumulative gain settled at \$33,000. This acquisition is expected to bolster the company’s long-term growth and regional market position.
Balance Sheet and Capital Strength
- Total Assets: \$6.18 billion at quarter-end, up from \$5.60 billion a year earlier.
- Shareholders’ Equity: Increased to \$675.8 million from \$587.7 million at June 30, 2025.
- Book Value Per Share: Rose 14.6% to \$56.83 (from \$49.59).
- Tangible Book Value Per Share: Jumped 18.2% to \$46.98 (from \$39.74).
- Tangible Common Equity to Tangible Asset Ratio: Strengthened to 9.22% (from 8.58%).
- No Share Repurchases: No shares were repurchased in the past year; 518,860 shares remain available for buyback.
- Dividend: Quarterly dividend declared at \$0.56 per share, consistent with the prior quarter.
Credit Quality and Risk Management
- Nonperforming Loans: Increased to \$27.1 million (0.61% of total loans), up from \$9.8 million (0.25%) a year ago. On a linked quarter basis, NPLs fell slightly from \$28.5 million.
- Allowance for Credit Losses: \$50.9 million (1.14% of loans), up from \$47.1 million (1.21% of loans) in 2025.
- Net Charge-Offs: Rose to \$2.7 million (0.24% of average loans) in Q2 2026, compared to \$1.7 million in Q2 2025.
- Provision for Credit Losses: Decreased to \$1.3 million for the quarter (\$3.9 million for the half), compared to \$2.0 million (\$3.9 million for the half) in 2025.
Other Performance Metrics
- Non-Interest Income: \$10.6 million in Q2 2026 (vs. \$10.4 million in Q2 2025), with growth in service charges, trust and financial services, and gains on mortgage sales.
- Non-Interest Expense: Increased to \$42.5 million (from \$38.3 million in 2025), with higher salaries, equipment, and occupancy costs, partly reflecting the CedarStone acquisition.
- Income Tax Expense: \$5.3 million for the quarter (effective tax rate 18.89%).
Management Commentary
Norman D. Lowery, President and CEO: “We are pleased with our second quarter results. The quarter marked the eleventh consecutive quarter of loan growth, contributing to another quarter of record net income. Our net interest margin and profitability remain strong with a 4.33% net interest margin and a 1.48% return on assets.”
Potentially Price-Sensitive Developments
- Record Net Income and Margins: The bank’s profitability continues to improve, which may positively impact share valuations.
- Acquisition of CedarStone Financial: While the bargain purchase gain was adjusted downward, the addition of loans and deposits is expected to enhance the company’s market position, potentially supporting further growth and shareholder value.
- Rising Nonperforming Loans: The increase in NPLs could be a concern, though coverage ratios remain strong and credit loss reserves are robust.
- Capital Strength and Dividend Consistency: Book value and tangible book value per share growth, paired with no share repurchases, may reflect management’s focus on organic and acquisitive expansion.
Conclusion
First Financial Corporation’s second quarter 2026 report presents a strong story of growth, profitability, and strategic execution. The ongoing loan and deposit growth, record earnings, and successful integration of CedarStone Financial position the company well for continued expansion. Investors should monitor the uptick in nonperforming loans, but overall asset quality and capital ratios remain solid.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a professional advisor before making investment decisions. Past performance is not indicative of future results.
