First Financial - Annual Report in Brief

First Financial Corporation has recently released its 10-K report, providing a comprehensive overview of its financial performance and operations. The company, founded in 1834 and headquartered in Terre Haute, Indiana, offers a range of financial services including non-interest-bearing demand, interest-bearing demand, savings, time deposits, commercial loans, residential real estate loans, home equity loans, lease financing, trust account, depositor, and insurance services.

The Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 10-K report highlights critical accounting policies and estimates. First Financial Corporation's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, requiring the company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Notably, the report discusses the allowance for credit losses, securities valuation, and goodwill as critical accounting estimates.

The 10-K report also provides a detailed analysis of the company's financial results for the year 2023. It states that net income for 2023 was $60.7 million, or $5.08 per share, compared to $71.1 million, or $5.82 per share for 2022. The decrease in net income is primarily attributed to increased provision for credit losses, decreased non-interest income, and increased non-interest expenses.

The report further delves into the company's net interest income, which represents the difference between interest earned on loans and investments and the interest cost associated with deposits and other sources of funding. In 2023, net interest income increased to $167.3 million compared to $165.0 million in 2022. The net interest margin also increased from 3.54% in 2022 to 3.78% in 2023, with earning asset yields increasing by 120 basis points while the rate on interest-bearing liabilities increased by 123 basis points.

Additionally, the 10-K report discusses the provision for credit losses, which was $7.3 million for the year ended December 31, 2023, representing a significant increase compared to the previous year. The increase in the provision for credit losses is attributed to the impact of the COVID-19 pandemic and the company's detailed analysis estimating an appropriate and adequate allowance for credit losses.

As a result of these announcements, the company's shares have moved 0.3% on the market, and are now trading at a price of $37.81. For more information, read the company's full 10-K submission here.

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