Press Release

First Financial Bancorp Announces First Quarter 2019 Results

Company Release - 4/25/2019 4:15 PM ET

CINCINNATI, April 25, 2019 /PRNewswire/ -- First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the first quarter 2019 and a quarterly dividend of $0.22 per share, payable on June 17, 2019 to shareholders of record as of June 3, 2019.

For the three months ended March 31, 2019, the Company reported net income of $45.8 million, or $0.47 per diluted common share.  These results compare to net income of $55.0 million, or $0.56 per diluted common share, for the fourth quarter of 2018 and $30.5 million, or $0.49 per diluted common share, for the first quarter of 2018.   Income before taxes was negatively impacted by a $10.0 million charge-off related to a $16.8 million franchise lending relationship, as well as recognition of $1.8 million of primarily merger-related costs, the combination reducing earnings per diluted common share by $0.09 on a net basis.

Return on average assets for the first quarter of 2019 was 1.33% while return on average tangible common equity was 15.95%.  These compare to a return on average assets of 1.59% and return on average tangible common equity of 19.63% in the fourth quarter of 2018 and a return on average assets of 1.40% and a return on average tangible common equity of 17.18% in the first quarter of 2018.

First quarter 2019 highlights include:

  • After adjustments(1) for merger-related and nonrecurring items:
    • Net income of $0.48 per diluted common share
    • 1.38% return on average assets
    • 16.45% return on average tangible common equity
  • Net interest margin of 4.10% on a fully tax-equivalent basis(1)
    • 11 basis point reduction from the linked quarter driven by lower loan fees and moderated purchase accounting impact
  • Noninterest expenses of $78.5 million, or $76.7 million as adjusted(1)
    • Efficiency ratio of 52.9% for the first quarter; 51.7% as adjusted(1)
  • Stable loan  balances
    • 8% linked quarter increase in loan origination activity offset by prepayments 
    • Average loan balances increased $11.0 million compared to the linked quarter
  • Modest average deposit growth as an increase in time deposits offset seasonal declines in public funds and business demand deposit accounts
  • Annualized net charge-offs increased to 64 basis points as a percentage of average loans for the quarter driven by the previously mentioned $10.0 million charge-off resulting in provision expense of $14.1 million
  • Continued capital expansion
    • Total capital of 14.24%; Tier 1 common equity of 12.03%; Tangible common equity of 9.15%
    • Tangible book value increased to $12.19

 

1) Financial information in this release that is described as "adjusted" or that is presented on a fully tax equivalent basis is non-GAAP.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Archie Brown, President and Chief Executive Officer, commented, "One year into operating as a combined company, we are encouraged that our core banking fundamentals and earnings power have met our initial expectations.  We are disappointed that a single credit loss muted what would have otherwise been a very profitable first quarter.  Aside from the $0.08 per share impact from the franchise loss, adjusted(1) earnings per share totaled $0.48 and our return on assets and average tangible common equity remained strong."

Mr. Brown continued, "We remain optimistic about the sustainability of our overall performance.  Our net interest margin was strong, despite expected declines in purchase accounting accretion and loan fee volatility.  Loan origination activity increased to its highest level post-merger, but we continue to face prepayment headwinds that are muting the impact of new production.  We are also pleased with modest deposit growth as higher time deposit balances offset expected seasonal declines in business DDA and public funds.  Our efficiency ratio continues to reflect disciplined expense management and we will look to maximize fee income opportunities going forward."

Mr. Brown concluded, "The Board announced a quarterly dividend of $0.22, which equates to an attractive 3.7% yield. Our strong and growing capital ratios reflect the Company's high level performance and give us flexibility to evaluate additional capital deployment opportunities such as executing on our share repurchase plan or making strategic acquisitions that enhance fee income or strengthen our market position."

Full detail of the Company's first quarter 2019 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, April 26, 2019 at 8:30 a.m. Eastern Time.  Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 (Canada toll free) or +1 (412) 380-2003 (International) (no passcode required).  The number should be dialed five to ten minutes prior to the start of the conference call.  The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com.  A replay of the conference call will be available beginning one hour after the completion of the live call at (877) 344-7529 (U.S. toll free), (855) 669-9658 (Canada toll free) and +1 (412) 317-0088 (International); conference number 10130234.  The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

Press Release and Additional Information on Website
This press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com.

Use of Non-GAAP Financial Measures
This earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company's results of operations or financial position.  Where Non-GAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Forward-Looking Statement
Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as ''believes,'' ''anticipates,'' "likely," "expected," "estimated," ''intends'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements.  Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements.  Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation: (i) economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business; (ii) the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; (iii) management's ability to effectively execute its business plans; (iv) mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; (v) the possibility that any of the anticipated benefits of the Company's merger with MainSource Financial Group, Inc. will not be realized or will not be realized within the expected time period; (vi) the effect of changes in accounting policies and practices; (vii) changes in consumer spending, borrowing and saving and changes in unemployment; (viii) changes in customers' performance and creditworthiness; and (ix) the costs and effects of litigation and of unexpected or adverse outcomes in such litigation.  Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2018, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov.

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing.  Except as required by law, the Company does not assume any obligation to update any forward-looking statement.

About First Financial Bancorp.
First Financial Bancorp. is a Cincinnati, Ohio based bank holding company.  As of March 31, 2019, the Company had $14.1 billion in assets, $8.8 billion in loans, $10.1 billion in deposits and $2.1 billion in shareholders' equity.  The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management.  These business units provide traditional banking services to business and retail clients.  Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.6 billion in assets under management as of March 31, 2019.  The Company operated 159 banking centers as of March 31, 2019, primarily in Ohio, Indiana and Kentucky, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis.  Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.

FIRST FINANCIAL BANCORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)

(Unaudited)












Three Months Ended,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


2019


2018


2018


2018


2018

RESULTS OF OPERATIONS










Net income

$

45,839



$

55,014



$

50,657



$

36,418



$

30,506


Net earnings per share - basic

$

0.47



$

0.56



$

0.52



$

0.37



$

0.49


Net earnings per share - diluted

$

0.47



$

0.56



$

0.51



$

0.37



$

0.49


Dividends declared per share

$

0.22



$

0.20



$

0.20



$

0.19



$

0.19












KEY FINANCIAL RATIOS










Return on average assets

1.33

%


1.59

%


1.45

%


1.05

%


1.40

%

Return on average shareholders' equity

8.88

%


10.68

%


9.94

%


7.36

%


13.31

%

Return on average tangible shareholders' equity

15.95

%


19.63

%


18.52

%


13.75

%


17.18

%











Net interest margin

4.05

%


4.16

%


4.06

%


4.10

%


3.80

%

Net interest margin (fully tax equivalent) (1)

4.10

%


4.21

%


4.12

%


4.15

%


3.84

%











Ending shareholders' equity as a percent of ending assets

15.14

%


14.86

%


14.70

%


14.46

%


10.56

%

Ending tangible shareholders' equity as a percent of:










Ending tangible assets

9.15

%


8.79

%


8.53

%


8.30

%


8.41

%

Risk-weighted assets

11.61

%


11.20

%


10.77

%


10.52

%


10.09

%











Average shareholders' equity as a percent of average assets

15.01

%


14.84

%


14.62

%


14.33

%


10.53

%

Average tangible shareholders' equity as a percent of










    average tangible assets

8.95

%


8.66

%


8.42

%


8.16

%


8.35

%











Book value per share

$

21.60



$

21.23



$

20.79



$

20.56



$

15.11


Tangible book value per share

$

12.19



$

11.72



$

11.25



$

11.01



$

11.75












Common equity tier 1 ratio (2)

12.03

%


11.87

%


11.52

%


11.15

%


10.77

%

Tier 1 ratio (2)

12.43

%


12.28

%


11.93

%


11.55

%


10.77

%

Total capital ratio (2)

14.24

%


14.10

%


13.77

%


13.36

%


13.17

%

Leverage ratio (2)

9.84

%


9.71

%


9.41

%


9.06

%


9.00

%











AVERAGE BALANCE SHEET ITEMS










Loans (3)

$

8,773,310



$

8,766,302



$

8,848,710



$

8,933,400



$

6,016,492


FDIC indemnification asset









1,502


Investment securities

3,355,732



3,204,758



3,168,044



3,157,339



2,042,781


Interest-bearing deposits with other banks

34,709



32,013



39,873



29,261



27,073


  Total earning assets

$

12,163,751



$

12,003,073



$

12,056,627



$

12,120,000



$

8,087,848


Total assets

$

13,952,551



$

13,768,958



$

13,822,675



$

13,956,360



$

8,830,176


Noninterest-bearing deposits

$

2,457,587



$

2,476,773



$

2,388,976



$

2,421,230



$

1,570,572


Interest-bearing deposits

7,610,092



7,573,069



7,499,112



7,961,405



5,332,740


  Total deposits

$

10,067,679



$

10,049,842



$

9,888,088



$

10,382,635



$

6,903,312


Borrowings

$

1,587,068



$

1,509,642



$

1,748,415



$

1,408,024



$

866,848


Shareholders' equity

$

2,094,234



$

2,042,884



$

2,021,400



$

2,000,093



$

929,474












CREDIT QUALITY RATIOS









Allowance to ending loans

0.64

%


0.64

%


0.65

%


0.61

%


0.89

%

Allowance to nonaccrual loans

95.40

%


79.97

%


136.22

%


133.65

%


179.57

%

Allowance to nonperforming loans

68.94

%


65.13

%


92.08

%


86.80

%


120.24

%

Nonperforming loans to total loans

0.93

%


0.98

%


0.71

%


0.70

%


0.74

%

Nonperforming assets to ending loans, plus OREO

0.95

%


1.00

%


0.73

%


0.72

%


0.76

%

Nonperforming assets to total assets

0.60

%


0.63

%


0.47

%


0.46

%


0.52

%

Classified assets to total assets

1.01

%


0.94

%


1.00

%


1.00

%


0.98

%

Net charge-offs to average loans (annualized)

0.64

%


0.29

%


(0.02)

%


0.18

%


0.13

%


(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis.  Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.

(2) March 31, 2019 regulatory capital ratios are preliminary.

(3) Includes loans held for sale.

 

 


FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)














2019


2018


First


Fourth


Third


Second


First


Full


Quarter


Quarter


Quarter


Quarter


Quarter


Year

Interest income












  Loans and leases, including fees

$

123,056



$

126,580



$

123,397



$

122,290



$

74,920



$

447,187


  Investment securities












     Taxable

24,235



22,761



21,801



20,844



13,670



79,076


     Tax-exempt

4,258



3,896



3,807



4,068



1,657



13,428


        Total investment securities interest

28,493



26,657



25,608



24,912



15,327



92,504


  Other earning assets

210



192



215



177



107



691


       Total interest income

151,759



153,429



149,220



147,379



90,354



540,382














Interest expense












  Deposits

19,243



17,198



14,672



14,794



10,298



56,962


  Short-term borrowings

5,960



5,186



6,052



4,132



2,663



18,033


  Long-term borrowings

5,041



5,086



5,011



4,474



1,581



16,152


      Total interest expense

30,244



27,470



25,735



23,400



14,542



91,147


      Net interest income

121,515



125,959



123,485



123,979



75,812



449,235


  Provision for loan and lease losses

14,083



5,310



3,238



3,735



2,303



14,586


      Net interest income after provision for loan and lease losses

107,432



120,649



120,247



120,244



73,509



434,649














Noninterest income












  Service charges on deposit accounts

8,903



10,185



10,316



9,568



5,039



35,108


  Trust and wealth management fees

4,070



3,703



3,728



3,697



3,954



15,082


  Bankcard income

5,586



6,247



5,261



5,343



3,394



20,245


  Client derivative fees

1,704



1,433



3,029



1,463



1,757



7,682


  Net gains from sales of loans

1,890



1,428



1,739



2,316



588



6,071


  Net gains on sale of investment securities

(178)



36



(167)



(30)



0



(161)


  Other

4,852



6,472



4,778



5,899



2,206



19,355


      Total noninterest income

26,827



29,504



28,684



28,256



16,938



103,382














Noninterest expenses












  Salaries and employee benefits

47,912



51,505



50,852



55,531



31,102



188,990


  Net occupancy

6,630



6,322



6,765



6,631



4,497



24,215


  Furniture and equipment

3,416



3,498



4,072



5,298



2,040



14,908


  Data processing

5,127



5,599



4,502



14,304



3,672



28,077


  Marketing

1,606



1,651



2,502



2,644



801



7,598


  Communication

728



805



785



1,118



459



3,167


  Professional services

2,252



1,794



2,621



5,659



2,198



12,272


  State intangible tax

1,310



1,086



1,223



1,078



765



4,152


  FDIC assessments

950



1,018



734



1,323



894



3,969


  Loss (gain) - other real estate owned

70



41



538



(283)



77



373


  Intangible amortization

2,045



2,229



2,486



2,364



280



7,359


  Other

6,453



7,804



8,335



7,088



5,503



28,730


      Total noninterest expenses

78,499



83,352



85,415



102,755



52,288



323,810


Income before income taxes

55,760



66,801



63,516



45,745



38,159



214,221


Income tax expense (benefit)

9,921



11,787



12,859



9,327



7,653



41,626


      Net income

$

45,839



$

55,014



$

50,657



$

36,418



$

30,506



$

172,595














ADDITIONAL DATA












Net earnings per share - basic

$

0.47



$

0.56



$

0.52



$

0.37



$

0.49



$

1.95


Net earnings per share - diluted

$

0.47



$

0.56



$

0.51



$

0.37



$

0.49



$

1.93


Dividends declared per share

$

0.22



$

0.20



$

0.20



$

0.19



$

0.19



$

0.78














Return on average assets

1.33

%


1.59

%


1.45

%


1.05

%


1.40

%


1.37

%

Return on average shareholders' equity

8.88

%


10.68

%


9.94

%


7.36

%


13.31

%


9.85

%













Interest income

$

151,759



$

153,429



$

149,220



$

147,379



$

90,354



$

540,382


Tax equivalent adjustment

1,523



1,442



1,567



1,420



718



5,147


   Interest income - tax equivalent

153,282



154,871



150,787



148,799



91,072



545,529


Interest expense

30,244



27,470



25,735



23,400



14,542



91,147


   Net interest income - tax equivalent

$

123,038



$

127,401



$

125,052



$

125,399



$

76,530



$

454,382














Net interest margin

4.05

%


4.16

%


4.06

%


4.10

%


3.80

%


4.05

%

Net interest margin (fully tax equivalent) (1)

4.10

%


4.21

%


4.12

%


4.15

%


3.84

%


4.10

%













Full-time equivalent employees

2,087



2,073



2,028



2,118



1,289
















(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that
it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis.  Therefore, management believes, these measures provide useful information to
investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.


 

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)
















Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


% Change


% Change


2019


2018


2018


2018


2018


Linked Qtr.


Comparable Qtr.

ASSETS














     Cash and due from banks

$

169,004



$

236,221



$

193,288



$

216,667



$

116,581



(28.5)

%


45.0

%

     Interest-bearing deposits with other banks

50,224



37,738



28,989



37,915



10,200



33.1

%


392.4

%

     Investment securities available-for-sale

3,113,811



2,779,255



2,626,726



2,654,909



1,359,381



12.0

%


129.1

%

     Investment securities held-to-maturity

158,305



429,328



434,369



443,957



633,722



(63.1)

%


(75.0)

%

     Other investments

115,731



115,660



115,757



95,004



53,070



0.1

%


118.1

%

     Loans held for sale

8,217



4,372



13,277



15,821



8,048



87.9

%


2.1

%

     Loans and leases














       Commercial and industrial

2,543,427



2,514,661



2,426,590



2,440,596



1,943,741



1.1

%


30.9

%

       Lease financing

95,573



93,415



95,317



96,198



81,617



2.3

%


17.1

%

       Construction real estate

458,113



548,935



565,077



555,468



494,665



(16.5)

%


(7.4)

%

       Commercial real estate

3,802,179



3,754,681



3,868,143



3,888,993



2,544,051



1.3

%


49.5

%

       Residential real estate

975,120



955,646



932,962



918,904



468,584



2.0

%


108.1

%

       Home equity

797,118



817,282



816,133



835,031



483,643



(2.5)

%


64.8

%

       Installment

90,689



93,212



97,413



100,726



39,248



(2.7)

%


131.1

%

       Credit card

46,982



46,382



45,741



48,665



46,472



1.3

%


1.1

%

          Total loans

8,809,201



8,824,214



8,847,376



8,884,581



6,102,021



(0.2)

%


44.4

%

       Less:














          Allowance for loan and lease losses

56,722



56,542



57,715



54,076



54,380



0.3

%


4.3

%

                Net loans

8,752,479



8,767,672



8,789,661



8,830,505



6,047,641



(0.2)

%


44.7

%

     Premises and equipment

210,676



215,652



219,940



223,950



127,046



(2.3)

%


65.8

%

     Goodwill

879,727



880,251



881,033



883,025



204,083



(0.1)

%


331.1

%

     Other intangibles

38,571



40,805



43,356



42,891



3,506



(5.5)

%


N/M


     Accrued interest and other assets

577,518



479,706



496,271



475,523



335,151



20.4

%


72.3

%

       Total Assets

$

14,074,263



$

13,986,660



$

13,842,667



$

13,920,167



$

8,898,429



0.6

%


58.2

%















LIABILITIES














     Deposits














       Interest-bearing demand

$

2,235,036



$

2,307,071



$

2,284,271



$

2,440,088



$

1,442,399



(3.1)

%


55.0

%

       Savings

3,100,894



3,167,325



3,134,944



3,087,683



2,450,196



(2.1)

%


26.6

%

       Time

2,309,810



2,173,564



1,957,574



2,104,044



1,545,273



6.3

%


49.5

%

          Total interest-bearing deposits

7,645,740



7,647,960



7,376,789



7,631,815



5,437,868



0.0

%


40.6

%

       Noninterest-bearing

2,488,157



2,492,434



2,375,845



2,471,932



1,572,636



(0.2)

%


58.2

%

          Total deposits

10,133,897



10,140,394



9,752,634



10,103,747



7,010,504



(0.1)

%


44.6

%

     Federal funds purchased and securities sold














         under agreements to repurchase

95,015



183,591



123,452



88,070



56,732



(48.2)

%


67.5

%

     FHLB short-term borrowings

952,400



857,100



1,170,800



1,100,233



601,600



11.1

%


58.3

%

          Total short-term borrowings

1,047,415



1,040,691



1,294,252



1,188,303



658,332



0.6

%


59.1

%

     Long-term debt

546,423



570,739



570,037



469,423



169,695



(4.3)

%


222.0

%

          Total borrowed funds

1,593,838



1,611,430



1,864,289



1,657,726



828,027



(1.1)

%


92.5

%

     Accrued interest and other liabilities

216,109



156,587



190,224



145,757



119,913



38.0

%


80.2

%

       Total Liabilities

11,943,844



11,908,411



11,807,147



11,907,230



7,958,444



0.3

%


50.1

%















SHAREHOLDERS' EQUITY














     Common stock

1,622,554



1,633,256



1,633,828



1,632,572



571,457



(0.7)

%


183.9

%

     Retained earnings

626,408



600,014



564,545



533,319



515,649



4.4

%


21.5

%

     Accumulated other comprehensive loss

(19,635)



(44,408)



(52,897)



(43,008)



(34,834)



(55.8)

%


(43.6)

%

     Treasury stock, at cost

(98,908)



(110,613)



(109,956)



(109,946)



(112,287)



(10.6)

%


(11.9)

%

       Total Shareholders' Equity

2,130,419



2,078,249



2,035,520



2,012,937



939,985



2.5

%


126.6

%

       Total Liabilities and Shareholders' Equity

$

14,074,263



$

13,986,660



$

13,842,667



$

13,920,167



$

8,898,429



0.6

%


58.2

%
















 

 

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)




Quarterly Averages


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


2019


2018


2018


2018


2018

ASSETS










     Cash and due from banks

$

181,695



$

213,927



$

199,843



$

224,824



$

116,095


     Federal funds sold

0



0



0



786



0


     Interest-bearing deposits with other banks

34,709



32,013



39,873



28,475



27,073


     Investment securities

3,355,732



3,204,758



3,168,044



3,157,339



2,042,781


     Loans held for sale

6,392



10,411



15,270



14,462



9,171


     Loans and leases










       Commercial and industrial

2,509,274



2,402,296



2,392,229



2,421,244



1,897,726


       Lease financing

91,043



94,111



94,030



94,431



86,755


       Construction real estate

496,153



567,086



570,125



577,883



483,930


       Commercial real estate

3,762,314



3,793,376



3,887,748



3,923,784



2,495,604


       Residential real estate

961,584



941,047



918,361



929,667



468,855


       Home equity

807,768



813,779



822,834



825,236



487,073


       Installment

91,270



95,779



99,907



99,896



40,409


       Credit card

47,512



48,417



48,206



46,797



46,969


          Total loans

8,766,918



8,755,891



8,833,440



8,918,938



6,007,321


       Less:










          Allowance for loan and lease losses

57,088



58,216



55,877



55,318



55,016


                Net loans

8,709,830



8,697,675



8,777,563



8,863,620



5,952,305


     Premises and equipment

213,208



218,430



222,718



230,475



126,016


     Goodwill

878,541



878,669



882,917



883,179



204,083


     Other intangibles

39,900



42,305



43,830



44,383



3,674


     Accrued interest and other assets

532,544



470,770



472,617



508,817



348,978


       Total Assets

$

13,952,551



$

13,768,958



$

13,822,675



$

13,956,360



$

8,830,176












LIABILITIES










     Deposits










       Interest-bearing demand

$

2,269,948



$

2,342,528



$

2,334,305



$

2,573,150



$

1,415,603


       Savings

3,115,557



3,156,789



3,149,871



3,196,059



2,450,697


       Time

2,224,587



2,073,752



2,014,936



2,192,196



1,466,440


          Total interest-bearing deposits

7,610,092



7,573,069



7,499,112



7,961,405



5,332,740


       Noninterest-bearing

2,457,587



2,476,773



2,388,976



2,421,230



1,570,572


          Total deposits

10,067,679



10,049,842



9,888,088



10,382,635



6,903,312


     Federal funds purchased and securities sold










          under agreements to repurchase

103,147



65,805



112,308



97,708



72,865


     FHLB short-term borrowings

913,974



873,533



1,076,106



818,909



667,641


          Total short-term borrowings

1,017,121



939,338



1,188,414



916,617



740,506


     Long-term debt

569,947



570,304



560,001



491,407



126,342


       Total borrowed funds

1,587,068



1,509,642



1,748,415



1,408,024



866,848


     Accrued interest and other liabilities

203,570



166,590



164,772



165,608



130,542


       Total Liabilities

11,858,317



11,726,074



11,801,275



11,956,267



7,900,702












SHAREHOLDERS' EQUITY










     Common stock

1,625,228



1,632,361



1,633,129



1,632,569



572,915


     Retained earnings

610,737



576,145



542,835



517,548



503,140


     Accumulated other comprehensive loss

(39,796)



(55,161)



(44,505)



(39,117)



(33,285)


     Treasury stock, at cost

(101,935)



(110,461)



(110,059)



(110,907)



(113,296)


       Total Shareholders' Equity

2,094,234



2,042,884



2,021,400



2,000,093



929,474


       Total Liabilities and Shareholders' Equity

$

13,952,551



$

13,768,958



$

13,822,675



$

13,956,360



$

8,830,176













 

 

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)


















 Quarterly Averages















March 31, 2019


December 31, 2018


March 31, 2018


 Linked Qtr. Income Variance


 Comparable Qtr. Income Variance



Balance


Yield


Balance


Yield


Balance


Yield


Rate


Volume


Total


Rate


Volume


Total

Earning assets

























    Investments:

























      Investment securities


$

3,355,732



3.44

%


$

3,204,758



3.30

%


$

2,042,781



3.04

%


$

1,159



$

677



$

1,836



$

2,018



$

11,148



$

13,166


      Interest-bearing deposits with other banks


34,709



2.45

%


32,013



2.38

%


27,073



1.60

%


6



12



18



57



46



103


    Gross loans (1)


8,773,310



5.69

%


8,766,302



5.73

%


6,017,994



5.05

%


(890)



(2,634)



(3,524)



9,489



38,647



48,136


       Total earning assets


12,163,751



5.06

%


12,003,073



5.07

%


8,087,848



4.53

%


275



(1,945)



(1,670)



11,564



49,841



61,405



























Nonearning assets

























    Allowance for loan and lease losses


(57,088)





(58,216)





(55,016)
















    Cash and due from banks


181,695





213,927





116,095
















    Accrued interest and other assets


1,664,193





1,610,174





681,249
















       Total assets


$

13,952,551





$

13,768,958





$

8,830,176









































Interest-bearing liabilities

























    Deposits:

























      Interest-bearing demand


$

2,269,948



0.50

%


$

2,342,528



0.48

%


$

1,415,603



0.37

%













      Savings


3,115,557



0.76

%


3,156,789



0.66

%


2,450,697



0.64

%













      Time


2,224,587



1.94

%


2,073,752



1.75

%


1,466,440



1.41

%













    Total interest-bearing deposits


7,610,092



1.03

%


7,573,069



0.90

%


5,332,740



0.78

%


$

2,377



$

(332)



$

2,045



$

3,186



$

5,759



$

8,945


    Borrowed funds

























      Short-term borrowings


1,017,121



2.38

%


939,338



2.19

%


740,506



1.46

%


441



333



774



1,676



1,621



3,297


      Long-term debt


569,947



3.59

%


570,304



3.54

%


126,342



5.07

%


70



(115)



(45)



(464)



3,924



3,460


        Total borrowed funds


1,587,068



2.81

%


1,509,642



2.70

%


866,848



1.99

%


511



218



729



1,212



5,545



6,757


       Total interest-bearing liabilities


9,197,160



1.33

%


9,082,711



1.20

%


6,199,588



0.95

%


2,888



(114)



2,774



4,398



11,304



15,702



























Noninterest-bearing liabilities

























    Noninterest-bearing demand deposits


2,457,587





2,476,773





1,570,572
















    Other liabilities


203,570





166,590





130,542
















    Shareholders' equity


2,094,234





2,042,884





929,474
















       Total liabilities & shareholders' equity


$

13,952,551





$

13,768,958





$

8,830,176









































Net interest income


$

121,515





$

125,959





$

75,812





$

(2,613)



$

(1,831)



$

(4,444)



$

7,166



$

38,537



$

45,703


Net interest spread




3.73

%




3.87

%




3.58

%













Net interest margin




4.05

%




4.16

%




3.80

%






































Tax equivalent adjustment




0.05

%




0.05

%




0.04

%













Net interest margin (fully tax equivalent)




4.10

%




4.21

%




3.84

%































































(1) Loans held for sale and nonaccrual loans are included in gross loans.

 

FIRST FINANCIAL BANCORP.

CREDIT QUALITY

(Dollars in thousands)

(Unaudited)






















Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


2019


2018


2018


2018


2018

ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY







Balance at beginning of period

$

56,542



$

57,715



$

54,076



$

54,380



$

54,021


  Provision for loan and lease losses

14,083



5,310



3,238



3,735



2,303


  Gross charge-offs










    Commercial and industrial

12,328



6,060



232



4,356



885


    Lease financing

100



0



0



0



0


    Construction real estate

0



0



0



0



0


    Commercial real estate

1,214



1,679



902



78



2,176


    Residential real estate

82



80



145



101



96


    Home equity

468



747



351



385



242


    Installment

49



158



43



218



16


    Credit card

341



392



390



684



254


      Total gross charge-offs

14,582



9,116



2,063



5,822



3,669


  Recoveries










    Commercial and industrial

240



485



627



518



436


    Lease financing

0



0



0



1



0


    Construction real estate

63



0



146



0



0


    Commercial real estate

73



1,681



786



887



752


    Residential real estate

36



44



71



70



26


    Home equity

185



274



419



187



429


    Installment

48



94



351



82



48


    Credit card

34



55



64



38



34


      Total recoveries

679



2,633



2,464



1,783



1,725


  Total net charge-offs

13,903



6,483



(401)



4,039



1,944


Ending allowance for loan and lease losses

$

56,722



$

56,542



$

57,715



$

54,076



$

54,380












NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)







  Commercial and industrial

1.95

%


0.92

%


(0.07)

%


0.64

%


0.10

%

  Lease financing

0.45

%


0.00

%


0.00

%


0.00

%


0.00

%

  Construction real estate

(0.05)

%


0.00

%


(0.10)

%


0.00

%


0.00

%

  Commercial real estate

0.12

%


0.00

%


0.01

%


(0.08)

%


0.23

%

  Residential real estate

0.02

%


0.02

%


0.03

%


0.01

%


0.06

%

  Home equity

0.14

%


0.23

%


(0.03)

%


0.10

%


(0.16)

%

  Installment

0.00

%


0.27

%


(1.22)

%


0.55

%


(0.32)

%

  Credit card

2.62

%


2.76

%


2.68

%


5.54

%


1.90

%

     Total net charge-offs

0.64

%


0.29

%


(0.02)

%


0.18

%


0.13

%











COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS

  Nonaccrual loans (1)










    Commercial and industrial

$

19,263



$

30,925



$

4,310



$

3,448



$

6,275


    Lease financing

301



22



0



0



0


    Construction real estate

7



9



10



24



26


    Commercial real estate

21,082



20,500



20,338



21,593



16,878


    Residential real estate

13,052



13,495



11,365



9,278



3,324


    Home equity

5,581



5,580



6,018



5,820



3,484


    Installment

170



169



327



299



296


      Nonaccrual loans

59,456



70,700



42,368



40,462



30,283


  Accruing troubled debt restructurings (TDRs)

22,817



16,109



20,313



21,839



14,943


     Total nonperforming loans

82,273



86,809



62,681



62,301



45,226


  Other real estate owned (OREO)

1,665



1,401



1,918



1,853



1,065


     Total nonperforming assets

83,938



88,210



64,599



64,154



46,291


  Accruing loans past due 90 days or more

178



63



144



327



529


     Total underperforming assets

$

84,116



$

88,273



$

64,743



$

64,481



$

46,820


Total classified assets

$

142,014



$

131,668



$

138,868



$

139,317



$

87,577












CREDIT QUALITY RATIOS







Allowance for loan and lease losses to










     Nonaccrual loans

95.40

%


79.97

%


136.22

%


133.65

%


179.57

%

     Nonperforming loans

68.94

%


65.13

%


92.08

%


86.80

%


120.24

%

     Total ending loans

0.64

%


0.64

%


0.65

%


0.61

%


0.89

%

Nonperforming loans to total loans

0.93

%


0.98

%


0.71

%


0.70

%


0.74

%

Nonperforming assets to










     Ending loans, plus OREO

0.95

%


1.00

%


0.73

%


0.72

%