First Financial Bancorp Announces Fourth Quarter and Full Year 2018 Results and 10% Dividend Increase

CINCINNATI, Jan. 23, 2019 /PRNewswire/ -- First Financial Bancorp. FFBC ("First Financial" or the "Company") announced financial results for the fourth quarter and full year 2018.

For the three months ended December 31, 2018, the Company reported net income of $55.0 million, or $0.56 per diluted common share. These results compare to net income of $50.7 million, or $0.51 per diluted common share, for the third quarter of 2018 and $24.8 million, or $0.40 per diluted common share, for the fourth quarter of 2017. Net income was negatively impacted by the recognition of $7.5 million of efficiency and merger related costs, which more than offset $1.6 million of gains from the redemption of off balance sheet securitizations, reducing earnings per diluted common share by $0.05 on a net basis. For the twelve months ended December 31, 2018, First Financial had earnings per diluted common share of $1.93 compared to $1.56 for the same period in 2017.

Return on average assets for the fourth quarter of 2018 was 1.59% while return on average tangible common equity was 19.63%. These compare to a return on average assets of 1.45% and return on average tangible common equity of 18.52% in the third quarter of 2018 and a return on average assets of 1.13% and a return on average tangible common equity of 13.85% in the fourth quarter of 2017.

Fourth quarter 2018 highlights include:

After adjustments⁽¹⁾ for merger related and nonrecurring items:

Net income of $0.61 per diluted common share
1.72% return on average assets
21.29% return on average tangible common equity

Net interest margin of 4.21% on a fully tax equivalent basis⁽¹⁾

9 basis point expansion from the linked quarter driven by higher asset yields and loan fees which outpaced increased funding costs

Noninterest expenses of $83.4 million, or $75.9 million as adjusted⁽¹⁾

Efficiency ratio of 53.6% for the fourth quarter; 49.3% as adjusted⁽¹⁾

Stable loan balances

Strongest origination quarter of 2018
10% linked quarter increase in loan origination activity offset by elevated ICRE payoffs

Annualized quarterly increase in average deposit balances of 16%

Deposit growth driven by higher noninterest bearing deposits, money market accounts and brokered CD's

Classified assets declined 5%; annualized net charge-offs increased to 29 basis points as a percentage of average loans for the quarter and were 15 basis points for the full year 2018

⁽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, "Fourth quarter results were very strong, and we remain pleased with the operational performance of the Company. Revenue growth and increased operating leverage led to adjusted⁽¹⁾ earnings per share of $0.61 and substantial returns on assets and average tangible common equity while net interest margin increased 9 basis points."

Mr. Brown continued, "Fourth quarter core banking trends were positive and loan originations were stronger than they have been all year, however elevated payoffs, particularly in ICRE (investment commercial real estate), led to a slight decline in overall loan balances. In addition to positive loan origination trends, we were particularly pleased with our ability to grow deposits during the the quarter while maintaining a pricing discipline that benefits both our clients and our shareholders."

Mr. Brown concluded, "2018 was a year of significant change for First Financial. We are highly encouraged by the way in which the Company has come together culturally and performed financially. Successfully completing a transformational merger while producing high level returns reflects the hard work of our associates and dedication to serving the needs of our clients and shareholders. We remain confident in our ability to sustain these results and our outlook for the future continues to be very optimistic."

First Financial's Board of Directors also approved a 10% increase in the quarterly dividend to $0.22 per share, payable on March 15, 2019 to shareholders of record as of March 1, 2019.

Full detail of the Company's fourth quarter and full year 2018 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 Thursday, January 24, 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 10127430. 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 recent 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, 2017, 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 December 31, 2018, the Company had $14.0 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 December 31, 2018. The Company's primary operating markets are located in Ohio, Indiana and Kentucky where it operated 159 banking centers as of December 31, 2018, 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,															Twelve months ended,
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,
	2018			2018			2018			2018			2017			2018			2017
RESULTS OF OPERATIONS
Net income	$	55,014		$	50,657		$	36,418		$	30,506		$	24,811		$	172,595		$	96,787
Net earnings per share - basic	$	0.56		$	0.52		$	0.37		$	0.49		$	0.40		$	1.95		$	1.57
Net earnings per share - diluted	$	0.56		$	0.51		$	0.37		$	0.49		$	0.40		$	1.93		$	1.56
Dividends declared per share	$	0.20		$	0.20		$	0.19		$	0.19		$	0.17		$	0.78		$	0.68

KEY FINANCIAL RATIOS
Return on average assets	1.59		%	1.45		%	1.05		%	1.40		%	1.13		%	1.37		%	1.12		%
Return on average shareholders' equity	10.68		%	9.94		%	7.36		%	13.31		%	10.70		%	9.85		%	10.78		%
Return on average tangible shareholders' equity	19.63		%	18.52		%	13.75		%	17.18		%	13.85		%	17.32		%	14.08		%

Net interest margin	4.16		%	4.06		%	4.10		%	3.80		%	3.75		%	4.05		%	3.59		%
Net interest margin (fully tax equivalent) ⁽¹⁾	4.21		%	4.12		%	4.15		%	3.84		%	3.82		%	4.10		%	3.66		%

Ending shareholders' equity as a percent of ending assets	14.86		%	14.70		%	14.46		%	10.56		%	10.46		%	14.86		%	10.46		%
Ending tangible shareholders' equity as a percent of:
Ending tangible assets	8.79		%	8.53		%	8.30		%	8.41		%	8.30		%	8.79		%	8.30		%
Risk-weighted assets	11.20		%	10.77		%	10.52		%	10.09		%	10.15		%	11.20		%	10.15		%

Average shareholders' equity as a percent of average assets	14.84		%	14.62		%	14.33		%	10.53		%	10.54		%	13.89		%	10.42		%
Average tangible shareholders' equity as a percent of
average tangible assets	8.66		%	8.42		%	8.16		%	8.35		%	8.34		%	8.40		%	8.18		%

Book value per share	$	21.23		$	20.79		$	20.56		$	15.11		$	14.99		$	21.23		$	14.99
Tangible book value per share	$	11.72		$	11.25		$	11.01		$	11.75		$	11.62		$	11.72		$	11.62

Common equity tier 1 ratio ⁽²⁾	11.87		%	11.52		%	11.15		%	10.77		%	10.63		%	11.87		%	10.63		%
Tier 1 ratio ⁽²⁾	12.28		%	11.93		%	11.55		%	10.77		%	10.63		%	12.28		%	10.63		%
Total capital ratio ⁽²⁾	14.10		%	13.77		%	13.36		%	13.17		%	13.07		%	14.10		%	13.07		%
Leverage ratio ⁽²⁾	9.71		%	9.41		%	9.06		%	9.00		%	8.84		%	9.71		%	8.84		%

AVERAGE BALANCE SHEET ITEMS
Loans ⁽³⁾	$	8,766,302		$	8,848,710		$	8,933,400		$	6,016,492		$	5,952,290		$	8,150,698		$	5,845,863
FDIC indemnification asset	—			—			—			1,502			7,413			370			9,535
Investment securities	3,204,758			3,168,044			3,157,339			2,042,781			2,020,040			2,897,167			2,001,387
Interest-bearing deposits with other banks	32,013			39,873			29,261			27,073			25,357			32,090			30,933
Total earning assets	$	12,003,073		$	12,056,627		$	12,120,000		$	8,087,848		$	8,005,100		$	11,080,325		$	7,887,718
Total assets	$	13,768,958		$	13,822,675		$	13,956,360		$	8,830,176		$	8,731,956		$	12,611,438		$	8,611,403
Noninterest-bearing deposits	$	2,476,773		$	2,388,976		$	2,421,230		$	1,570,572		$	1,637,228		$	2,217,349		$	1,540,384
Interest-bearing deposits	7,573,069			7,499,112			7,961,405			5,332,740			5,202,412			7,098,836			5,093,865
Total deposits	$	10,049,842		$	9,888,088		$	10,382,635		$	6,903,312		$	6,839,640		$	9,316,185		$	6,634,249
Borrowings	$	1,509,642		$	1,748,415		$	1,408,024		$	866,848		$	842,211		$	1,385,994		$	951,159
Shareholders' equity	$	2,042,884		$	2,021,400		$	2,000,093		$	929,474		$	920,194		$	1,752,261		$	897,431

CREDIT QUALITY RATIOS
Allowance to ending loans	0.64		%	0.65		%	0.61		%	0.89		%	0.90		%	0.64		%	0.90		%
Allowance to nonaccrual loans	79.97		%	136.22		%	133.65		%	179.57		%	224.32		%	79.97		%	224.32		%
Allowance to nonperforming loans	65.13		%	92.08		%	86.80		%	120.24		%	129.77		%	65.13		%	129.77		%
Nonperforming loans to total loans	0.98		%	0.71		%	0.70		%	0.74		%	0.69		%	0.98		%	0.69		%
Nonperforming assets to ending loans, plus OREO	1.00		%	0.73		%	0.72		%	0.76		%	0.74		%	1.00		%	0.74		%
Nonperforming assets to total assets	0.63		%	0.47		%	0.46		%	0.52		%	0.50		%	0.63		%	0.50		%
Classified assets to total assets	0.94		%	1.00		%	1.00		%	0.98		%	0.98		%	0.94		%	0.98		%
Net charge-offs to average loans (annualized)	0.29		%	(0.02)%			0.18		%	0.13		%	0.02		%	0.15		%	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 for 2018 and a 35% tax rate for 2017. 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) December 31, 2018 regulatory capital ratios are preliminary.
(3) Includes loans held for sale.

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)

	Three months ended,								Twelve months ended,
	Dec. 31,								Dec. 31,
	2018			2017			% Change		2018			2017			% Change
Interest income
Loans and leases, including fees	$	126,580		$	74,347		70.3	%	$	447,187		$	280,111		59.6	%
Investment securities
Taxable	22,761			13,212			72.3	%	79,076			50,568			56.4	%
Tax-exempt	3,896			1,571			148.0	%	13,428			5,918			126.9	%
Total investment securities interest	26,657			14,783			80.3	%	92,504			56,486			63.8	%
Other earning assets	192			(592)			132.4	%	691			(3,524)			119.6	%
Total interest income	153,429			88,538			73.3	%	540,382			333,073			62.2	%

Interest expense
Deposits	17,198			9,243			86.1	%	56,962			35,182			61.9	%
Short-term borrowings	5,186			2,144			141.9	%	18,033			8,193			120.1	%
Long-term borrowings	5,086			1,537			230.9	%	16,152			6,153			162.5	%
Total interest expense	27,470			12,924			112.6	%	91,147			49,528			84.0	%
Net interest income	125,959			75,614			66.6	%	449,235			283,545			58.4	%
Provision for loan and lease losses	5,310			(205)			N/M		14,586			3,582			307.2	%
Net interest income after provision for loan and lease losses	120,649			75,819			59.1	%	434,649			279,963			55.3	%

Noninterest income
Service charges on deposit accounts	10,185			5,190			96.2	%	35,108			19,775			77.5	%
Trust and wealth management fees	3,703			3,597			2.9	%	15,082			14,073			7.2	%
Bankcard income	6,247			3,390			84.3	%	20,245			13,298			52.2	%
Client derivative fees	1,433			2,047			(30.0)	%	7,682			6,418			19.7	%
Net gains from sales of loans	1,428			1,171			21.9	%	6,071			5,169			17.5	%
Net gains (losses) on sale of investment securities	36			19			89.5	%	(161)			1,649			(109.8)	%
Other	6,472			2,968			118.1	%	19,355			15,760			22.8	%
Total noninterest income	29,504			18,382			60.5	%	103,382			76,142			35.8	%

Noninterest expenses
Salaries and employee benefits	51,505			35,439			45.3	%	188,990			132,560			42.6	%
Net occupancy	6,322			4,252			48.7	%	24,215			17,397			39.2	%
Furniture and equipment	3,498			1,969			77.7	%	14,908			8,443			76.6	%
Data processing	5,599			3,768			48.6	%	28,077			14,022			100.2	%
Marketing	1,651			1,060			55.8	%	7,598			3,201			137.4	%
Communication	805			474			69.8	%	3,167			1,819			74.1	%
Professional services	1,794			9,766			(81.6)	%	12,272			15,023			(18.3)	%
State intangible tax	1,086			492			120.7	%	4,152			2,655			56.4	%
FDIC assessments	1,018			943			8.0	%	3,969			3,944			0.6	%
Loss (gain) - other real estate owned	41			219			(81.3)	%	373			642			(41.9)	%
Other	10,033			24,516			(59.1)	%	36,089			40,236			(10.3)	%
Total noninterest expenses	83,352			82,898			0.5	%	323,810			239,942			35.0	%
Income before income taxes	66,801			11,303			491.0	%	214,221			116,163			84.4	%
Income tax expense	11,787			(13,508)			(187.3)	%	41,626			19,376			114.8	%
Net income	$	55,014		$	24,811		121.7	%	$	172,595		$	96,787		78.3	%

ADDITIONAL DATA
Net earnings per share - basic	$	0.56		$	0.40				$	1.95		$	1.57
Net earnings per share - diluted	$	0.56		$	0.40				$	1.93		$	1.56
Dividends declared per share	$	0.20		$	0.17				$	0.78		$	0.68

Return on average assets	1.59		%	1.13		%			1.37		%	1.12		%
Return on average shareholders' equity	10.68		%	10.70		%			9.85		%	10.78		%

Interest income	$	153,429		$	88,538		73.3	%	$	540,382		$	333,073		62.2	%
Tax equivalent adjustment	1,442			1,387			4.0	%	5,147			5,259			(2.1)	%
Interest income - tax equivalent	154,871			89,925			72.2	%	545,529			338,332			61.2	%
Interest expense	27,470			12,924			112.6	%	91,147			49,528			84.0	%
Net interest income - tax equivalent	$	127,401		$	77,001		65.5	%	$	454,382		$	288,804		57.3	%

Net interest margin	4.16		%	3.75		%			4.05		%	3.59		%
Net interest margin (fully tax equivalent) ⁽¹⁾	4.21		%	3.82		%			4.10		%	3.66		%

Full-time equivalent employees	2,073			1,304

(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 for 2018 and a 35% tax rate for 2017. 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.
N/M = Not meaningful.

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)

	2018
	Fourth			Third			Second			First			Full			% Change
	Quarter			Quarter			Quarter			Quarter			Year			Linked Qtr.
Interest income
Loans and leases, including fees	$	126,580		$	123,397		$	122,290		$	74,920		$	447,187		2.6	%
Investment securities
Taxable	22,761			21,801			20,844			13,670			79,076			4.4	%
Tax-exempt	3,896			3,807			4,068			1,657			13,428			2.3	%
Total investment securities interest	26,657			25,608			24,912			15,327			92,504			4.1	%
Other earning assets	192			215			177			107			691			(10.7)	%
Total interest income	153,429			149,220			147,379			90,354			540,382			2.8	%

Interest expense
Deposits	17,198			14,672			14,794			10,298			56,962			17.2	%
Short-term borrowings	5,186			6,052			4,132			2,663			18,033			(14.3)	%
Long-term borrowings	5,086			5,011			4,474			1,581			16,152			1.5	%
Total interest expense	27,470			25,735			23,400			14,542			91,147			6.7	%
Net interest income	125,959			123,485			123,979			75,812			449,235			2.0	%
Provision for loan and lease losses	5,310			3,238			3,735			2,303			14,586			64.0	%
Net interest income after provision for loan and lease losses	120,649			120,247			120,244			73,509			434,649			0.3	%

Noninterest income
Service charges on deposit accounts	10,185			10,316			9,568			5,039			35,108			(1.3)	%
Trust and wealth management fees	3,703			3,728			3,697			3,954			15,082			(0.7)	%
Bankcard income	6,247			5,261			5,343			3,394			20,245			18.7	%
Client derivative fees	1,433			3,029			1,463			1,757			7,682			(52.7)	%
Net gains from sales of loans	1,428			1,739			2,316			588			6,071			(17.9)	%
Net gains (losses) on sale of investment securities	36			(167)			(30)			0			(161)			121.6	%
Other	6,472			4,778			5,899			2,206			19,355			35.5	%
Total noninterest income	29,504			28,684			28,256			16,938			103,382			2.9	%

Noninterest expenses
Salaries and employee benefits	51,505			50,852			55,531			31,102			188,990			1.3	%
Net occupancy	6,322			6,765			6,631			4,497			24,215			(6.5)	%
Furniture and equipment	3,498			4,072			5,298			2,040			14,908			(14.1)	%
Data processing	5,599			4,502			14,304			3,672			28,077			24.4	%
Marketing	1,651			2,502			2,644			801			7,598			(34.0)	%
Communication	805			785			1,118			459			3,167			2.5	%
Professional services	1,794			2,621			5,659			2,198			12,272			(31.6)	%
State intangible tax	1,086			1,223			1,078			765			4,152			(11.2)	%
FDIC assessments	1,018			734			1,323			894			3,969			38.7	%
Loss (gain) - other real estate owned	41			538			(283)			77			373			(92.4)	%
Other	10,033			10,821			9,452			5,783			36,089			(7.3)	%
Total noninterest expenses	83,352			85,415			102,755			52,288			323,810			(2.4)	%
Income before income taxes	66,801			63,516			45,745			38,159			214,221			5.2	%
Income tax expense	11,787			12,859			9,327			7,653			41,626			(8.3)	%
Net income	$	55,014		$	50,657		$	36,418		$	30,506		$	172,595		8.6	%

ADDITIONAL DATA
Net earnings per share - basic	$	0.56		$	0.52		$	0.37		$	0.49		$	1.95
Net earnings per share - diluted	$	0.56		$	0.51		$	0.37		$	0.49		$	1.93
Dividends declared per share	$	0.20		$	0.20		$	0.19		$	0.19		$	0.78

Return on average assets	1.59		%	1.45		%	1.05		%	1.40		%	1.37		%
Return on average shareholders' equity	10.68		%	9.94		%	7.36		%	13.31		%	9.85		%

Interest income	$	153,429		$	149,220		$	147,379		$	90,354		$	540,382		2.8	%
Tax equivalent adjustment	1,442			1,567			1,420			718			5,147			(8.0)	%
Interest income - tax equivalent	154,871			150,787			148,799			91,072			545,529			2.7	%
Interest expense	27,470			25,735			23,400			14,542			91,147			6.7	%
Net interest income - tax equivalent	$	127,401		$	125,052		$	125,399		$	76,530		$	454,382		1.9	%

Net interest margin	4.16		%	4.06		%	4.10		%	3.80		%	4.05		%
Net interest margin (fully tax equivalent)⁽¹⁾	4.21		%	4.12		%	4.15		%	3.84		%	4.10		%

Full-time equivalent employees	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 for 2018 and a 35% tax rate for 2017. 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.
N/M = Not meaningful.

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)

	2017
	Fourth			Third			Second			First			Full
	Quarter			Quarter			Quarter			Quarter			Year
Interest income
Loans and leases, including fees	$	74,347		$	71,148		$	67,748		$	66,868		$	280,111
Investment securities
Taxable	13,212			13,150			12,598			11,608			50,568
Tax-exempt	1,571			1,537			1,457			1,353			5,918
Total investment securities interest	14,783			14,687			14,055			12,961			56,486
Other earning assets	(592)			(917)			(1,014)			(1,001)			(3,524)
Total interest income	88,538			84,918			80,789			78,828			333,073

Interest expense
Deposits	9,243			10,335			8,679			6,925			35,182
Short-term borrowings	2,144			2,566			2,051			1,432			8,193
Long-term borrowings	1,537			1,538			1,539			1,539			6,153
Total interest expense	12,924			14,439			12,269			9,896			49,528
Net interest income	75,614			70,479			68,520			68,932			283,545
Provision for loan and lease losses	(205)			2,953			467			367			3,582
Net interest income after provision for loan and lease losses	75,819			67,526			68,053			68,565			279,963

Noninterest income
Service charges on deposit accounts	5,190			5,169			4,772			4,644			19,775
Trust and wealth management fees	3,597			3,324			3,405			3,747			14,073
Bankcard income	3,390			3,272			3,501			3,135			13,298
Client derivative fees	2,047			1,779			1,489			1,103			6,418
Net gains from sales of loans	1,171			1,455			1,327			1,216			5,169
Net gains on sale of investment securities	19			276			838			516			1,649
Other	2,968			7,667			2,122			3,003			15,760
Total noninterest income	18,382			22,942			17,454			17,364			76,142

Noninterest expenses
Salaries and employee benefits	35,439			33,827			31,544			31,750			132,560
Net occupancy	4,252			4,328			4,302			4,515			17,397
Furniture and equipment	1,969			2,161			2,136			2,177			8,443
Data processing	3,768			3,455			3,501			3,298			14,022
Marketing	1,060			649			982			510			3,201
Communication	474			430			468			447			1,819
Professional services	9,766			2,030			1,469			1,758			15,023
State intangible tax	492			721			721			721			2,655
FDIC assessments	943			1,051			1,018			932			3,944
Loss (gain) - other real estate owned	219			237			162			24			642
Other	24,516			5,554			5,253			4,913			40,236
Total noninterest expenses	82,898			54,443			51,556			51,045			239,942
Income before income taxes	11,303			36,025			33,951			34,884			116,163
Income tax expense (benefit)	(13,508)			11,199			11,215			10,470			19,376
Net income	$	24,811		$	24,826		$	22,736		$	24,414		$	96,787

ADDITIONAL DATA
Net earnings per share - basic	$	0.40		$	0.40		$	0.37		$	0.40		$	1.57
Net earnings per share - diluted	$	0.40		$	0.40		$	0.37		$	0.39		$	1.56
Dividends declared per share	$	0.17		$	0.17		$	0.17		$	0.17		$	0.68

Return on average assets	1.13		%	1.13		%	1.06		%	1.18		%	1.12		%
Return on average shareholders' equity	10.70		%	10.85		%	10.25		%	11.36		%	10.78		%

Interest income	$	88,538		$	84,918		$	80,789		$	78,828		$	333,073
Tax equivalent adjustment	1,387			1,353			1,294			1,225			5,259
Interest income - tax equivalent	89,925			86,271			82,083			80,053			338,332
Interest expense	12,924			14,439			12,269			9,896			49,528
Net interest income - tax equivalent	$	77,001		$	71,832		$	69,814		$	70,157		$	288,804

Net interest margin	3.75		%	3.50		%	3.50		%	3.63		%	3.59		%
Net interest margin (fully tax equivalent)⁽¹⁾	3.82		%	3.57		%	3.56		%	3.70		%	3.66		%

Full-time equivalent employees	1,304			1,363			1,429			1,424

(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 for 2018 and a 35% tax rate for 2017. 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)

	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		% Change		% Change
	2018		2018		2018		2018		2017		Linked Qtr.		Comparable Qtr.
ASSETS
Cash and due from banks	$	236,221	$	193,288	$	216,667	$	116,581	$	150,650	22.2	%	56.8	%
Interest-bearing deposits with other banks	37,738		28,989		37,915		10,200		33,974		30.2	%	11.1	%
Investment securities available-for-sale	2,779,255		2,626,726		2,654,909		1,359,381		1,349,408		5.8	%	106.0	%
Investment securities held-to-maturity	429,328		434,369		443,957		633,722		654,008		(1.2)	%	(34.4)	%
Other investments	115,660		115,757		95,004		53,070		53,140		(0.1)	%	117.7	%
Loans held for sale	4,372		13,277		15,821		8,048		11,502		(67.1)	%	(62.0)	%
Loans and leases
Commercial and industrial	2,514,661		2,426,590		2,440,596		1,943,741		1,912,743		3.6	%	31.5	%
Lease financing	93,415		95,317		96,198		81,617		89,347		(2.0)	%	4.6	%
Construction real estate	548,935		565,077		555,468		494,665		467,730		(2.9)	%	17.4	%
Commercial real estate	3,754,681		3,868,143		3,888,993		2,544,051		2,490,091		(2.9)	%	50.8	%
Residential real estate	955,646		932,962		918,904		468,584		471,391		2.4	%	102.7	%
Home equity	817,282		816,133		835,031		483,643		493,604		0.1	%	65.6	%
Installment	93,212		97,413		100,726		39,248		41,586		(4.3)	%	124.1	%
Credit card	46,382		45,741		48,665		46,472		46,691		1.4	%	(0.7)	%
Total loans	8,824,214		8,847,376		8,884,581		6,102,021		6,013,183		(0.3)	%	46.7	%
Less:
Allowance for loan and lease losses	56,542		57,715		54,076		54,380		54,021		(2.0)	%	4.7	%
Net loans	8,767,672		8,789,661		8,830,505		6,047,641		5,959,162		(0.3)	%	47.1	%
Premises and equipment	215,652		219,940		223,950		127,046		125,036		(1.9)	%	72.5	%
Goodwill	880,251		881,033		883,025		204,083		204,084		(0.1)	%	331.3	%
Other intangibles	50,779		53,327		51,631		4,970		5,295		(4.8)	%	859.0	%
Accrued interest and other assets	469,732		486,300		466,783		333,687		350,664		(3.4)	%	34.0	%
Total Assets	$	13,986,660	$	13,842,667	$	13,920,167	$	8,898,429	$	8,896,923	1.0	%	57.2	%

LIABILITIES
Deposits
Interest-bearing demand	$	2,307,071	$	2,284,271	$	2,440,088	$	1,442,399	$	1,453,463	1.0	%	58.7	%
Savings	3,167,325		3,134,944		3,087,683		2,450,196		2,462,420		1.0	%	28.6	%
Time	2,173,564		1,957,574		2,104,044		1,545,273		1,317,105		11.0	%	65.0	%
Total interest-bearing deposits	7,647,960		7,376,789		7,631,815		5,437,868		5,232,988		3.7	%	46.1	%
Noninterest-bearing	2,492,434		2,375,845		2,471,932		1,572,636		1,662,058		4.9	%	50.0	%
Total deposits	10,140,394		9,752,634		10,103,747		7,010,504		6,895,046		4.0	%	47.1	%
Federal funds purchased and securities sold
under agreements to repurchase	183,591		123,452		88,070		56,732		72,265		48.7	%	154.1	%
FHLB short-term borrowings	857,100		1,170,800		1,100,233		601,600		742,300		(26.8)	%	15.5	%
Total short-term borrowings	1,040,691		1,294,252		1,188,303		658,332		814,565		(19.6)	%	27.8	%
Long-term debt	570,739		570,037		469,423		169,695		119,654		0.1	%	377.0	%
Total borrowed funds	1,611,430		1,864,289		1,657,726		828,027		934,219		(13.6)	%	72.5	%
Accrued interest and other liabilities	156,587		190,224		145,757		119,913		136,994		(17.7)	%	14.3	%
Total Liabilities	11,908,411		11,807,147		11,907,230		7,958,444		7,966,259		0.9	%	49.5	%

SHAREHOLDERS' EQUITY
Common stock	1,633,256		1,633,828		1,632,572		571,457		573,109		0.0	%	185.0	%
Retained earnings	600,014		564,545		533,319		515,498		491,847		6.3	%	22.0	%
Accumulated other comprehensive loss	(44,408)		(52,897)		(43,008)		(34,683)		(20,390)		(16.0)	%	117.8	%
Treasury stock, at cost	(110,613)		(109,956)		(109,946)		(112,287)		(113,902)		0.6	%	(2.9)	%
Total Shareholders' Equity	2,078,249		2,035,520		2,012,937		939,985		930,664		2.1	%	123.3	%
Total Liabilities and Shareholders' Equity	$	13,986,660	$	13,842,667	$	13,920,167	$	8,898,429	$	8,896,923	1.0	%	57.2	%

FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)

	Quarterly Averages										Year-to-Date Averages
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		December 31,
	2018		2018		2018		2018		2017		2018		2017
ASSETS
Cash and due from banks	$	213,927	$	199,843	$	224,824	$	116,095	$	121,792	$	188,971	$	116,409
Federal funds sold	0		0		786		0		0		196		0
Interest-bearing deposits with other banks	32,013		39,873		28,475		27,073		25,357		31,894		30,933
Investment securities	3,204,758		3,168,044		3,157,339		2,042,781		2,020,040		2,897,167		2,001,387
Loans held for sale	10,411		15,270		14,462		9,171		12,572		12,340		10,679
Loans and leases
Commercial and industrial	2,402,296		2,392,229		2,421,244		1,897,726		1,857,546		2,518,333		1,815,925
Lease financing	94,111		94,030		94,431		86,755		84,635		91,476		86,662
Construction real estate	567,086		570,125		577,883		483,930		449,195		540,014		429,868
Commercial real estate	3,793,376		3,887,748		3,923,784		2,495,604		2,487,149		3,310,697		2,448,570
Residential real estate	941,047		918,361		929,667		468,855		477,454		809,114		488,718
Home equity	813,779		822,834		825,236		487,073		494,804		724,926		472,860
Installment	95,779		99,907		99,896		40,409		42,283		95,847		47,520
Credit card	48,417		48,206		46,797		46,969		46,652		47,951		45,061
Total loans	8,755,891		8,833,440		8,918,938		6,007,321		5,939,718		8,138,358		5,835,184
Less:
Allowance for loan and lease losses	58,216		55,877		55,318		55,016		55,279		56,115		56,599
Net loans	8,697,675		8,777,563		8,863,620		5,952,305		5,884,439		8,082,243		5,778,585
Premises and equipment	218,430		222,718		230,475		126,016		126,310		199,727		129,702
Goodwill	878,669		882,917		883,179		204,083		204,084		714,528		204,084
Other intangibles	52,291		53,013		54,278		5,161		5,487		41,347		5,971
Accrued interest and other assets	460,784		463,434		498,922		347,491		331,875		443,025		333,653
Total Assets	$	13,768,958	$	13,822,675	$	13,956,360	$	8,830,176	$	8,731,956	$	12,611,438	$	8,611,403

LIABILITIES
Deposits
Interest-bearing demand	$	2,342,528	$	2,334,305	$	2,573,150	$	1,415,603	$	1,502,245	$	2,169,396	$	1,491,114
Savings	3,156,789		3,149,871		3,196,059		2,450,697		2,518,771		2,990,731		2,412,788
Time	2,073,752		2,014,936		2,192,196		1,466,440		1,181,396		1,938,709		1,189,963
Total interest-bearing deposits	7,573,069		7,499,112		7,961,405		5,332,740		5,202,412		7,098,836		5,093,865
Noninterest-bearing	2,476,773		2,388,976		2,421,230		1,570,572		1,637,228		2,217,349		1,540,384
Total deposits	10,049,842		9,888,088		10,382,635		6,903,312		6,839,640		9,316,185		6,634,249
Federal funds purchased and securities sold
under agreements to repurchase	65,805		112,308		97,708		72,865		57,131		87,221		69,766
FHLB short-term borrowings	873,533		1,076,106		818,909		667,641		660,859		860,206		760,599
Total short-term borrowings	939,338		1,188,414		916,617		740,506		717,990		947,427		830,365
Long-term debt	570,304		560,001		491,407		126,342		124,221		438,567		120,794
Total borrowed funds	1,509,642		1,748,415		1,408,024		866,848		842,211		1,385,994		951,159
Accrued interest and other liabilities	166,590		164,772		165,608		130,542		129,911		156,998		128,564
Total Liabilities	11,726,074		11,801,275		11,956,267		7,900,702		7,811,762		10,859,177		7,713,972

SHAREHOLDERS' EQUITY
Common stock	1,632,361		1,633,129		1,632,569		572,915		572,392		1,371,373		570,336
Retained earnings	576,145		542,835		517,548		503,140		483,554		535,139		463,358
Accumulated other comprehensive loss	(55,161)		(44,505)		(39,117)		(33,285)		(21,740)		(43,081)		(23,141)
Treasury stock, at cost	(110,461)		(110,059)		(110,907)		(113,296)		(114,012)		(111,170)		(113,122)
Total Shareholders' Equity	2,042,884		2,021,400		2,000,093		929,474		920,194		1,752,261		897,431
Total Liabilities and Shareholders' Equity	$	13,768,958	$	13,822,675	$	13,956,360	$	8,830,176	$	8,731,956	$	12,611,438	$	8,611,403

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)

	Quarterly Averages												Year-to-Date Averages
	December 31, 2018				September 30, 2018				December 31, 2017				December 31, 2018				December 31, 2017
	Balance		Yield		Balance		Yield		Balance		Yield		Balance		Yield		Balance		Yield
Earning assets
Investments:
Investment securities	$	3,204,758	3.30	%	$	3,168,044	3.21	%	$	2,020,040	2.90	%	$	2,897,167	3.19	%	$	2,001,387	2.82	%
Interest-bearing deposits with other banks	32,013		2.38	%	39,873		2.14	%	25,357		1.41	%	32,090		2.15	%	30,933		1.12	%
Gross loans ⁽¹⁾	8,766,302		5.73	%	8,848,710		5.53	%	5,959,703		4.90	%	8,151,068		5.49	%	5,855,398		4.72	%
Total earning assets	12,003,073		5.07	%	12,056,627		4.91	%	8,005,100		4.39	%	11,080,325		4.88	%	7,887,718		4.22	%

Nonearning assets
Allowance for loan and lease losses	(58,216)				(55,877)				(55,279)				(56,115)				(56,599)
Cash and due from banks	213,927				199,843				121,792				188,971				116,409
Accrued interest and other assets	1,610,174				1,622,082				660,343				1,398,257				663,875
Total assets	$	13,768,958			$	13,822,675			$	8,731,956			$	12,611,438			$	8,611,403

Interest-bearing liabilities
Deposits:
Interest-bearing demand	$	2,342,528	0.48	%	$	2,334,305	0.34	%	$	1,502,245	0.34	%	$	2,169,396	0.39	%	$	1,491,114	0.28	%
Savings	3,156,789		0.66	%	3,149,871		0.59	%	2,518,771		0.63	%	2,990,731		0.60	%	2,412,788		0.66	%
Time	2,073,752		1.75	%	2,014,936		1.58	%	1,181,396		1.33	%	1,938,709		1.57	%	1,189,963		1.26	%
Total interest-bearing deposits	7,573,069		0.90	%	7,499,112		0.78	%	5,202,412		0.70	%	7,098,836		0.80	%	5,093,865		0.69	%
Borrowed funds
Short-term borrowings	939,338		2.19	%	1,188,414		2.02	%	717,990		1.18	%	947,427		1.90	%	830,365		0.99	%
Long-term debt	570,304		3.54	%	560,001		3.55	%	124,221		4.91	%	438,567		3.68	%	120,794		5.09	%
Total borrowed funds	1,509,642		2.70	%	1,748,415		2.51	%	842,211		1.73	%	1,385,994		2.47	%	951,159		1.51	%
Total interest-bearing liabilities	9,082,711		1.20	%	9,247,527		1.10	%	6,044,623		0.85	%	8,484,830		1.07	%	6,045,024		0.82	%

Noninterest-bearing liabilities
Noninterest-bearing demand deposits	2,476,773				2,388,976				1,637,228				2,217,349				1,540,384
Other liabilities	166,590				164,772				129,911				156,998				128,564
Shareholders' equity	2,042,884				2,021,400				920,194				1,752,261				897,431
Total liabilities & shareholders' equity	$	13,768,958			$	13,822,675			$	8,731,956			$	12,611,438			$	8,611,403

Net interest income	$	125,959			$	123,485			$	75,614			$	449,235			$	283,545
Net interest spread			3.87	%			3.81	%			3.54	%			3.81	%			3.40	%
Net interest margin			4.16	%			4.06	%			3.75	%			4.05	%			3.59	%

Tax equivalent adjustment			0.05	%			0.06	%			0.07	%			0.05	%			0.07	%
Net interest margin (fully tax equivalent)			4.21	%			4.12	%			3.82	%			4.10	%			3.66	%


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

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS ⁽¹⁾
(Dollars in thousands)
(Unaudited)


	Linked Qtr. Income Variance						Comparable Qtr. Income Variance						Year-to-Date Income Variance
	Rate		Volume		Total		Rate		Volume		Total		Rate		Volume		Total
Earning assets
Investment securities	$	744	$	305	$	1,049	$	2,020	$	9,854	$	11,874	$	7,417	$	28,601	$	36,018
Interest-bearing deposits with other banks	24		(47)		(23)		62		40		102		319		25		344
Gross loans ⁽²⁾	4,373		(1,190)		3,183		12,389		40,526		52,915		45,001		125,946		170,947
Total earning assets	5,141		(932)		4,209		14,471		50,420		64,891		52,737		154,572		207,309

Interest-bearing liabilities
Total interest-bearing deposits	$	2,358	$	168	$	2,526	$	2,571	$	5,384	$	7,955	$	5,692	$	16,088	$	21,780
Borrowed funds
Short-term borrowings	509		(1,375)		(866)		1,820		1,222		3,042		7,612		2,228		9,840
Long-term debt	(17)		92		75		(429)		3,978		3,549		(1,704)		11,703		9,999
Total borrowed funds	492		(1,283)		(791)		1,391		5,200		6,591		5,908		13,931		19,839
Total interest-bearing liabilities	2,850		(1,115)		1,735		3,962		10,584		14,546		11,600		30,019		41,619
Net interest income ⁽¹⁾	$	2,291	$	183	$	2,474	$	10,509	$	39,836	$	50,345	$	41,137	$	124,553	$	165,690


⁽¹⁾ Not tax equivalent.
⁽²⁾ Loans held for sale, nonaccrual loans, and indemnification asset are included in gross loans.

FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)


	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Full Year			Full Year
	2018			2018			2018			2018			2017			2018			2017
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY
Balance at beginning of period	$	57,715		$	54,076		$	54,380		$	54,021		$	54,534		$	54,021		$	57,961
Provision for loan and lease losses	5,310			3,238			3,735			2,303			(205)			14,586			3,582
Gross charge-offs
Commercial and industrial	6,060			232			4,356			885			1,264			11,533			10,194
Construction real estate	0			0			0			0			1			0			1
Commercial real estate	1,679			902			78			2,176			10			4,835			1,038
Residential real estate	80			145			101			96			128			422			435
Home equity	747			351			385			242			278			1,725			913
Installment	158			43			218			16			26			435			225
Credit card	392			390			684			254			209			1,720			857
Total gross charge-offs	9,116			2,063			5,822			3,669			1,916			20,670			13,663
Recoveries
Commercial and industrial	485			627			518			436			370			2,066			1,650
Lease financing	0			0			1			0			0			1			1
Construction real estate	0			146			0			0			0			146			89
Commercial real estate	1,681			786			887			752			480			4,106			2,719
Residential real estate	44			71			70			26			77			211			215
Home equity	274			419			187			429			589			1,309			1,027
Installment	94			351			82			48			46			575			234
Credit card	55			64			38			34			46			191			206
Total recoveries	2,633			2,464			1,783			1,725			1,608			8,605			6,141
Total net charge-offs	6,483			(401)			4,039			1,944			308			12,065			7,522
Ending allowance for loan and lease losses	$	56,542		$	57,715		$	54,076		$	54,380		$	54,021		$	56,542		$	54,021

NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial and industrial	0.92		%	(0.07)%			0.64		%	0.10		%	0.19		%	0.38		%	0.47		%
Lease financing	0.00		%	0.00		%	0.00		%	0.00		%	0.00		%	0.00		%	0.00		%
Construction real estate	0.00		%	(0.10)%			0.00		%	0.00		%	0.00		%	(0.03)%			(0.02)		%
Commercial real estate	0.00		%	0.01		%	(0.08)%			0.23		%	(0.07)%			0.02		%	(0.07)		%
Residential real estate	0.02		%	0.03		%	0.01		%	0.06		%	0.04		%	0.03		%	0.05		%
Home equity	0.23		%	(0.03)%			0.10		%	(0.16)%			(0.25)%			0.06		%	(0.02)		%
Installment	0.27		%	(1.22)%			0.55		%	(0.32)%			(0.19)%			(0.15)		%	(0.02)		%
Credit card	2.76		%	2.68		%	5.54		%	1.90		%	1.39		%	3.19		%	1.44		%
Total net charge-offs	0.29		%	(0.02)%			0.18		%	0.13		%	0.02		%	0.15		%	0.13		%

COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans ⁽¹⁾
Commercial and industrial	$	30,925		$	4,310		$	3,448		$	6,275		$	5,229		$	30,925		$	5,229
Lease financing	22			0			0			0			82			22			82
Construction real estate	9			10			24			26			29			9			29
Commercial real estate	20,500			20,338			21,593			16,878			10,616			20,500			10,616
Residential real estate	13,495			11,365			9,278			3,324			4,140			13,495			4,140
Home equity	5,580			6,018			5,820			3,484			3,743			5,580			3,743
Installment	169			327			299			296			243			169			243
Nonaccrual loans	70,700			42,368			40,462			30,283			24,082			70,700			24,082
Accruing troubled debt restructurings (TDRs)	16,109			20,313			21,839			14,943			17,545			16,109			17,545
Total nonperforming loans	86,809			62,681			62,301			45,226			41,627			86,809			41,627
Other real estate owned (OREO)	1,401			1,918			1,853			1,065			2,781			1,401			2,781
Total nonperforming assets	88,210			64,599			64,154			46,291			44,408			88,210			44,408
Accruing loans past due 90 days or more	63			144			327			529			61			63			61
Total underperforming assets	$	88,273		$	64,743		$	64,481		$	46,820		$	44,469		$	88,273		$	44,469
Total classified assets	$	131,668		$	138,868		$	139,317		$	87,577		$	87,293		$	131,668		$	87,293

CREDIT QUALITY RATIOS
Allowance for loan and lease losses to
Nonaccrual loans	79.97		%	136.22		%	133.65		%	179.57		%	224.32		%	79.97		%	224.32		%
Nonperforming loans	65.13		%	92.08		%	86.80		%	120.24		%	129.77		%	65.13		%	129.77		%
Total ending loans	0.64		%	0.65		%	0.61		%	0.89		%	0.90		%	0.64		%	0.90		%
Nonperforming loans to total loans	0.98		%	0.71		%	0.70		%	0.74		%	0.69		%	0.98		%	0.69		%
Nonperforming assets to
Ending loans, plus OREO	1.00		%	0.73		%	0.72		%	0.76		%	0.74		%	1.00		%	0.74		%
Total assets	0.63		%	0.47		%	0.46		%	0.52		%	0.50		%	0.63		%	0.50		%
Nonperforming assets, excluding accruing TDRs to
Ending loans, plus OREO	0.82		%	0.50		%	0.48		%	0.51		%	0.45		%	0.82		%	0.45		%
Total assets	0.52		%	0.32		%	0.30		%	0.35		%	0.30		%	0.52		%	0.30		%
Classified assets to total assets	0.94		%	1.00		%	1.00		%	0.98		%	0.98		%	0.94		%	0.98		%

(1) Nonaccrual loans include nonaccrual TDRs of $22.4 million, $4.7 million, $5.9 million, $6.0 million, and $6.4 million, as of December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively.

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)
																Twelve months ended,
	Dec. 31,			Sep. 30,			June 30,			Mar. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2018			2018			2018			2018			2017			2018			2017
PER COMMON SHARE
Market Price
High	$	29.58		$	32.35		$	33.55		$	29.35		$	29.15		$	33.55		$	29.15
Low	$	22.40		$	29.40		$	28.10		$	26.40		$	25.30		$	22.40		$	23.10
Close	$	23.72		$	29.70		$	30.65		$	29.35		$	26.35		$	23.72		$	26.35

Average shares outstanding - basic	97,424,839			97,411,201			97,347,533			61,654,686			61,595,629			88,582,090			61,529,460
Average shares outstanding - diluted	98,468,237			98,484,228			98,432,072			62,180,744			62,131,840			89,614,205			62,171,590
Ending shares outstanding	97,894,286			97,914,526			97,904,897			62,213,823			62,069,087			97,894,286			62,069,087

Total shareholders' equity	$	2,078,249		$	2,035,520		$	2,012,937		$	939,985		$	930,664		$	2,078,249		$	930,664

REGULATORY CAPITAL	Preliminary															Preliminary
Common equity tier 1 capital	$	1,215,613		$	1,177,630		$	1,142,718		$	779,491		$	755,735		$	1,215,613		$	755,735
Common equity tier 1 capital ratio	11.87		%	11.52		%	11.15		%	10.77		%	10.63		%	11.87		%	10.63		%
Tier 1 capital	$	1,257,366		$	1,219,383		$	1,184,471		$	779,595		$	755,839		$	1,257,366		$	755,839
Tier 1 ratio	12.28		%	11.93		%	11.55		%	10.77		%	10.63		%	12.28		%	10.63		%
Total capital	$	1,444,146		$	1,407,252		$	1,369,231		$	953,243		$	929,148		$	1,444,146		$	929,148
Total capital ratio	14.10		%	13.77		%	13.36		%	13.17		%	13.07		%	14.10		%	13.07		%
Total capital in excess of minimum
requirement	$	432,832		$	397,783		$	356,930		$	238,221		$	271,600		$	432,832		$	271,600
Total risk-weighted assets	$	10,241,159		$	10,222,466		$	10,251,147		$	7,240,731		$	7,108,629		$	10,241,159		$	7,108,629
Leverage ratio	9.71		%	9.41		%	9.06		%	9.00		%	8.84		%	9.71		%	8.84		%

OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets	14.86		%	14.70		%	14.46		%	10.56		%	10.46		%	14.86		%	10.46		%
Ending tangible shareholders' equity to ending tangible assets	8.79		%	8.53		%	8.30		%	8.41		%	8.30		%	8.79		%	8.30		%
Average shareholders' equity to average assets	14.84		%	14.62		%	14.33		%	10.53		%	10.54		%	13.89		%	10.42		%
Average tangible shareholders' equity to average tangible assets	8.66		%	8.42		%	8.16		%	8.35		%	8.34		%	8.40		%	8.18		%

View original content:http://www.prnewswire.com/news-releases/first-financial-bancorp-announces-fourth-quarter-and-full-year-2018-results-and-10-dividend-increase-300783170.html

SOURCE First Financial Bancorp.

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