Published: November 23, 2008 10:42 pm            

First Financial continues to grow

TERRE HAUTE — Despite tough times for the banking industry in general, First Financial Corp., with headquarters in Vigo County, continues to pay higher dividends and enjoy positive growth, according to a corporate news release.

Early next year, First Financial, which trades on the NASDAQ stock exchange, will pay a semiannual dividend of 45 cents per share, the company announced last week. That brings the total 2008 dividend to 89 cents per share, an increase of 2.3 percent over 2007.

“We’re real proud of our performance and our ability to raise dividends now for 20 consecutive years,” said Norm Lowery, president and CEO of First Financial. Very few companies can make that claim, he said.

In the wake of the sub-prime mortgage meltdown, financial analysts expect big job losses in the banking industry in the next year. The CEO of Citigroup announced this week his bank will cut 52,000 jobs and some analysts expect the worldwide financial services industry to shed 20 percent of its jobs by mid-2009, according to Bloomberg.com.

Yet First Financial is having one of its best years ever, Lowery noted.

“All of our results this year have been outstanding,” he said. “It’s remarkable to me with what’s going on.”

One way First Financial has remained strong is by avoiding some of the subprime mortgage and other mortgage-backed investments that recently turned sour, Lowery noted.

“We didn’t get involved in the subprime lending that everyone’s heard about,” Lowery said. “We didn’t get involved in some of the risky derivative-type investments that some of the larger banks in the country did. … By nature, I guess, we’re somewhat conservative … we just didn’t stick our neck out there like some of them did. That’s now proving to be a good decision.”

First Financial also did not take part in the federal government’s multibillion-dollar bailout of the financial services and banking industry, Lowery said. “We didn’t need to and we’re proud of that,” he said.

An accounting write-down of some securities held by First Financial has had a negative impact on some of its earnings reports; however, even that is not really a problem because the bank has no intention of selling its illiquid securities in the present market conditions, Lowery noted. “We have no plans to sell it, and it’s paying us just like it’s supposed to,” he said. “We think by 2010, we’ll be paid every bit of the value of that security.”

In addition to its dividend, First Financial’s stock price is also higher this year. The corporation’s stock price started 2008 around $27 per share. It closed trading Friday at around $35 per share. The stock traded around $50 per share earlier this fall.

“We’ve been riding that roller coaster up and down with the market,” Lowery said.

In addition to declaring a higher dividend, First Financial announced in late October its total assets for the third quarter this year were up more than 4 percent over the third quarter in 2007. Loans were also greater by more than 4 percent and deposits were also up, according to a corporation news release.

While First Financial, which is the only publicly traded financial firm based in Vigo County, is doing well, Lowery said he remains concerned about the global, national and local economy. Longtime local companies such as Bemis have recently announced job cuts, he noted.

“The national and global economy affects everybody eventually,” he said. “Going forward, I think everyone, not just banks, is concerned about when the economy is going to straighten out.”

Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.

        

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