Non-GAAP Financial Information
This press release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). These measures include pre-tax, pre-provision earnings; tangible common equity to tangible assets ratio; tangible common book value; and efficiency ratio. Management uses these non-GAAP measures in its analysis of First Financial's performance. Management also believes these non-GAAP financial measures provide additional information that is useful to investors in understanding the underlying performance of the Company, its business, and performance trends and such measures help facilitate additional performance comparisons with others in the banking industry. Non-GAAP financial measures have inherent limitations. Such measures are not uniformly applied by the Company or calculated by other companies in the same manner and are not audited. Readers should be aware of these limitations and should be cautious as to their use of such measures. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP.
The Company believes that pre-tax, pre-provision earnings are a useful measure in assessing First Financial's core operating performance, particularly during times of economic stress. This measurement, as defined by management, represents total revenue, defined as net interest income plus noninterest income, less noninterest expense.
First Financial believes that the exclusion of goodwill and other intangible assets facilitates the comparison of results for ongoing business operations. The tangible common equity ("TCE") ratio and tangible common book value ("TBV") has become a focus of some investors, analysts and banking regulators. Management believes these measures may assist in analyzing the Company's capital position absent the effects of intangible assets and preferred stock. Because TCE and TBV are not formally defined by GAAP or codified in the federal banking regulations, these measures are considered to be non-GAAP financial measures. However, analysts and banking regulators may assess the Company's capital adequacy using TCE or TBV, therefore, management believes that it is useful to provide investors the ability to assess its capital adequacy on the same basis.