Market Overview

First Financial Bancorp Announces Second Quarter 2018 Results

Share:

First Financial Bancorp Announces Second Quarter 2018 Results

Merger Completed Creating High Performing Midwestern Community Bank

PR Newswire

CINCINNATI, July 19, 2018 /PRNewswire/ -- First Financial Bancorp. (NASDAQ:FFBC) ("First Financial" or the "Company") announced financial results for the second quarter of 2018.

For the three months ended June 30, 2018, the Company reported net income of $36.4 million, or $0.37 per diluted common share.  These results compare to net income of $30.5 million, or $0.49 per diluted common share, for the first quarter of 2018 and $22.7 million, or $0.37 per diluted common share, for the second quarter of 2017.  During the quarter the Company incurred $24.3 million in merger related expenses, which reduced earnings per diluted common share by $0.20.  For the six months ended June 30, 2018, First Financial had earnings per diluted common share of $0.83 compared to $0.76 for the same period in 2017.

Return on average assets for the second quarter of 2018 was 1.05% while return on average tangible common equity was 13.71%.  These compare to a return on average assets of 1.40% and return on average tangible common equity of 17.17% in the first quarter of 2018 and a return on average assets of 1.06% and a return on average tangible common equity of 13.42% in the second quarter of 2017.  On an adjusted(1) basis, second quarter return on average assets was 1.60% and return on tangible common equity was 20.94%.

Archie Brown, President and Chief Executive Officer, commented, "We are very pleased with our performance in the second quarter, which reflects our emerging potential as a combined company.  After taking into account adjustments(1) for merger related items, our 111th consecutive quarter of profitability was highlighted by strong earnings, in addition to top quartile return on assets and return on tangible common equity."

Second quarter 2018 highlights include:

  • After adjustments(1) for merger related items:
    • Net income of $0.57 per diluted common share
    • 1.60% return on average assets
    • 20.94% return on average tangible common equity

  • Net interest income of $124.0 million
    • Net interest margin increased 30 basis points from the linked quarter to 4.10% on a GAAP basis; 4.15% on a fully tax equivalent basis(1)

  • Noninterest expenses of $102.8 million, or $78.8 million as adjusted(1)
    • Efficiency ratio of 67.50% for the second quarter; 51.66% as adjusted(1)

  • Stable credit performance with provision expense of $3.7 million; annualized net charge-offs of 18 basis points as a percentage of average loans

Archie Brown further commented, "The second quarter was also highlighted by margin expansion, improved adjusted efficiency and stable credit quality. Loan growth fell short of our initial expectations as a result of lower loan originations combined with higher prepayment activity, however we anticipate our loan growth trends will gradually improve in the second half of this year."

Mr. Brown concluded, "We believe we are well positioned to capitalize on the earnings momentum generated during the second quarter and close the year on a strong note. With the majority of merger-related activity behind us, our focus is on maximizing remaining synergies and implementing strategic roduce top quartile returns, while continuing to deliver the value and service that our clients, communities and shareholders have come to expect."

Full detail of the Company's second quarter and year to date performance is provided in the accompanying financial statements and slide presentation.

(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.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, July 20, 2018 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 10121859.  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 the Form 10-K for the year ended December 31, 2017, as well as its 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 June 30, 2018, the Company had $13.9 billion in assets, $8.9 billion in loans, $10.1 billion in deposits and $2.0 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 $2.7 billion in assets under management as of June 30, 2018.  The Company's primary operating markets are located in Ohio, Indiana and Kentucky where it operated 158 banking centers as of June 30, 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,


Six months ended,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Jun. 30,


2018


2018


2017


2017


2017


2018


2017

RESULTS OF OPERATIONS














Net income

$

36,418



$

30,506



$

24,811



$

24,826



$

22,736



$

66,924



$

47,150


Net earnings per share - basic

$

0.37



$

0.49



$

0.40



$

0.40



$

0.37



$

0.84



$

0.77


Net earnings per share - diluted

$

0.37



$

0.49



$

0.40



$

0.40



$

0.37



$

0.83



$

0.76


Dividends declared per share

$

0.19



$

0.19



$

0.17



$

0.17



$

0.17



$

0.38



$

0.34
















KEY FINANCIAL RATIOS














Return on average assets

1.05

%


1.40

%


1.13

%


1.13

%


1.06

%


1.18

%


1.12

%

Return on average shareholders' equity

7.36

%


13.31

%


10.70

%


10.85

%


10.25

%


9.25

%


10.80

%

Return on average tangible shareholders' equity

13.71

%


17.17

%


13.85

%


14.10

%


13.42

%


24.94

%


14.18

%















Net interest margin

4.10

%


3.80

%


3.75

%


3.50

%


3.50

%


3.98

%


3.56

%

Net interest margin (fully tax equivalent) (1)

4.15

%


3.84

%


3.82

%


3.57

%


3.56

%


4.03

%


3.63

%















Ending shareholders' equity as a percent of ending assets

14.36

%


10.56

%


10.46

%


10.44

%


10.31

%


14.36

%


10.31

%

Ending tangible shareholders' equity as a percent of:














Ending tangible assets

8.30

%


8.41

%


8.30

%


8.25

%


8.09

%


8.30

%


8.09

%

Risk-weighted assets

10.52

%


10.09

%


10.15

%


9.95

%


9.92

%


10.52

%


9.92

%















Average shareholders' equity as a percent of average
assets

14.23

%


10.53

%


10.54

%


10.42

%


10.36

%


12.80

%


10.36

%

Average tangible shareholders' equity as a percent of














    average tangible assets

8.18

%


8.36

%


8.34

%


8.21

%


8.12

%


5.16

%


8.09

%















Book value per share

$

20.40



$

15.11



$

14.99



$

14.74



$

14.45



$

20.40



$

14.45


Tangible book value per share

$

11.01



$

11.75



$

11.62



$

11.36



$

11.07



$

11.01



$

11.07
















Common equity tier 1 ratio (2)

11.15

%


10.77

%


10.63

%


10.53

%


10.54

%


11.15

%


10.54

%

Tier 1 ratio (2)

11.55

%


10.77

%


10.63

%


10.53

%


10.54

%


11.55

%


10.54

%

Total capital ratio (2)

13.36

%


13.17

%


13.07

%


12.98

%


13.05

%


13.36

%


13.05

%

Leverage ratio (2)

9.05

%


9.00

%


8.84

%


8.74

%


8.69

%


9.05

%


8.69

%















AVERAGE BALANCE SHEET ITEMS














Loans (3)

$

8,933,400



$

6,016,492



$

5,952,290



$

5,902,053



$

5,789,610



$

7,483,004



$

5,763,208


FDIC indemnification asset



1,502



7,413



8,932



10,327



747



10,920


Investment securities

3,157,339



2,042,781



2,020,040



2,041,785



2,035,334



2,603,139



1,971,372


Interest-bearing deposits with other banks

29,261



27,073



25,357



37,199



20,293



28,173



30,582


  Total earning assets

$

12,120,000



$

8,087,848



$

8,005,100



$

7,989,969



$

7,855,564



$

10,115,063



$

7,776,082


Total assets

$

13,940,322



$

8,830,176



$

8,731,956



$

8,716,917



$

8,582,961



$

11,399,366



$

8,496,496


Noninterest-bearing deposits

$

2,421,230



$

1,570,572



$

1,637,228



$

1,510,032



$

1,513,995



$

1,998,251



$

1,506,587


Interest-bearing deposits

7,961,405



5,332,740



5,202,412



5,170,365



5,056,223



6,654,334



4,999,808


  Total deposits

$

10,382,635



$

6,903,312



$

6,839,640



$

6,680,397



$

6,570,218



$

8,652,585



$

6,506,395


Borrowings

$

1,408,024



$

866,848



$

842,211



$

999,818



$

995,132



$

1,138,931



$

981,803


Shareholders' equity

$

1,984,055



$

929,474



$

920,194



$

908,057



$

889,604



$

1,459,678



$

880,460
















CREDIT QUALITY RATIOS













Allowance to ending loans

0.61

%


0.89

%


0.90

%


0.91

%


0.93

%


0.61

%


0.93

%

Allowance to nonaccrual loans

133.65

%


179.57

%


224.32

%


181.07

%


150.05

%


133.65

%


150.05

%

Allowance to nonperforming loans

86.80

%


120.24

%


129.77

%


109.48

%


96.77

%


86.80

%


96.77

%

Nonperforming loans to total loans

0.70

%


0.74

%


0.69

%


0.83

%


0.97

%


0.70

%


0.97

%

Nonperforming assets to ending loans, plus OREO

0.72

%


0.76

%


0.74

%


0.89

%


1.07

%


0.72

%


1.07

%

Nonperforming assets to total assets

0.46

%


0.52

%


0.50

%


0.60

%


0.72

%


0.46

%


0.72

%

Classified assets to total assets

1.00

%


0.98

%


0.98

%


1.08

%


1.13

%


1.00

%


1.13

%

Net charge-offs to average loans (annualized)

0.18

%


0.13

%


0.02

%


0.22

%


0.13

%


0.16

%


0.14

%






















(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) June 30, 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,


Six months ended,


Jun. 30,


Jun. 30,


2018


2017


% Change


2018


2017


% Change

Interest income












  Loans and leases, including fees

$

122,290



$

67,748



80.5

%


$

197,210



$

134,616



46.5

%

  Investment securities












     Taxable

20,844



12,598



65.5

%


34,514



24,206



42.6

%

     Tax-exempt

4,068



1,457



179.2

%


5,725



2,810



103.7

%

        Total investment securities interest

24,912



14,055



77.2

%


40,239



27,016



48.9

%

  Other earning assets

177



(1,014)



117.5

%


284



(2,015)



114.1

%

       Total interest income

147,379



80,789



82.4

%


237,733



159,617



48.9

%













Interest expense












  Deposits

14,794



8,679



70.5

%


25,092



15,604



60.8

%

  Short-term borrowings

4,132



2,051



101.5

%


6,795



3,483



95.1

%

  Long-term borrowings

4,474



1,539



190.7

%


6,055



3,078



96.7

%

      Total interest expense

23,400



12,269



90.7

%


37,942



22,165



71.2

%

      Net interest income

123,979



68,520



80.9

%


199,791



137,452



45.4

%

  Provision for loan and lease losses

3,735



467



699.8

%


6,038



834



624.0

%

      Net interest income after provision for loan and lease losses

120,244



68,053



76.7

%


193,753



136,618



41.8

%













Noninterest income












  Service charges on deposit accounts

9,568



4,772



100.5

%


14,607



9,416



55.1

%

  Trust and wealth management fees

3,697



3,405



8.6

%


7,651



7,152



7.0

%

  Bankcard income

5,343



3,501



52.6

%


8,737



6,636



31.7

%

  Client derivative fees

1,463



1,489



(1.7)

%


3,220



2,592



24.2

%

  Net gains from sales of loans

2,316



1,327



74.5

%


2,904



2,543



14.2

%

  Net gains (losses) on sale of investment securities

(30)



838



(103.6)

%


(30)



1,354



(102.2)

%

  Other

5,899



2,122



178.0

%


8,105



5,125



58.1

%

      Total noninterest income

28,256



17,454



61.9

%


45,194



34,818



29.8

%













Noninterest expenses












  Salaries and employee benefits

55,531



31,544



76.0

%


86,633



63,294



36.9

%

  Net occupancy

6,631



4,302



54.1

%


11,128



8,817



26.2

%

  Furniture and equipment

5,298



2,136



148.0

%


7,338



4,313



70.1

%

  Data processing

14,304



3,501



308.6

%


17,976



6,799



164.4

%

  Marketing

2,644



982



169.2

%


3,445



1,492



130.9

%

  Communication

1,118



468



138.9

%


1,577



915



72.3

%

  Professional services

5,659



1,469



285.2

%


7,857



3,227



143.5

%

  State intangible tax

1,078



721



49.5

%


1,843



1,442



27.8

%

  FDIC assessments

1,323



1,018



30.0

%


2,217



1,950



13.7

%

  Loss (gain) - other real estate owned

(283)



162



(274.7)

%


(206)



186



(210.8)

%

  Other

9,452



5,253



79.9

%


15,235



10,166



49.9

%

      Total noninterest expenses

102,755



51,556



99.3

%


155,043



102,601



51.1

%

Income before income taxes

45,745



33,951



34.7

%


83,904



68,835



21.9

%

Income tax expense

9,327



11,215



(16.8)

%


16,980



21,685



(21.7)

%

      Net income

$

36,418



$

22,736



60.2

%


$

66,924



$

47,150



41.9

%













ADDITIONAL DATA












Net earnings per share - basic

$

0.37



$

0.37





$

0.84



$

0.77




Net earnings per share - diluted

$

0.37



$

0.37





$

0.83



$

0.76




Dividends declared per share

$

0.19



$

0.17





$

0.38



$

0.34
















Return on average assets

1.05

%


1.06

%




1.18

%


1.12

%



Return on average shareholders' equity

7.36

%


10.25

%




9.25

%


10.80

%















Interest income

$

147,379



$

80,789



82.4

%


$

237,733



$

159,617



48.9

%

Tax equivalent adjustment

1,420



1,294



9.7

%


2,138



2,519



(15.1)

%

   Interest income - tax equivalent

148,799



82,083



81.3

%


239,871



162,136



47.9

%

Interest expense

23,400



12,269



90.7

%


37,942



22,165



71.2

%

   Net interest income - tax equivalent

$

125,399



$

69,814



79.6

%


$

201,929



$

139,971



44.3

%













Net interest margin

4.10

%


3.50

%




3.98

%


3.56

%



Net interest margin (fully tax equivalent) (1)

4.15

%


3.56

%




4.03

%


3.63

%















Full-time equivalent employees

2,118



1,429






















(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% 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.

N/M  = Not meaningful.












 

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)










2018


Second


First


Full


% Change


Quarter


Quarter


Year


Linked Qtr.

Interest income








  Loans and leases, including fees

$

122,290



$

74,920



$

197,210



63.2

%

  Investment securities








     Taxable

20,844



13,670



34,514



52.5

%

     Tax-exempt

4,068



1,657



5,725



145.5

%

        Total investment securities interest

24,912



15,327



40,239



62.5

%

  Other earning assets

177



107



284



65.4

%

       Total interest income

147,379



90,354



237,733



63.1

%









Interest expense








  Deposits

14,794



10,298



25,092



43.7

%

  Short-term borrowings

4,132



2,663



6,795



55.2

%

  Long-term borrowings

4,474



1,581



6,055



183.0

%

      Total interest expense

23,400



14,542



37,942



60.9

%

      Net interest income

123,979



75,812



199,791



63.5

%

  Provision for loan and lease losses

3,735



2,303



6,038



62.2

%

      Net interest income after provision for loan and lease losses

120,244



73,509



193,753



63.6

%









Noninterest income








  Service charges on deposit accounts

9,568



5,039



14,607



89.9

%

  Trust and wealth management fees

3,697



3,954



7,651



(6.5)

%

  Bankcard income

5,343



3,394



8,737



57.4

%

  Client derivative fees

1,463



1,757



3,220



(16.7)

%

  Net gains from sales of loans

2,316



588



2,904



293.9

%

  Net gains (losses) on sale of investment securities

(30)



0



(30)



N/M


  Other

5,899



2,206



8,105



167.4

%

      Total noninterest income

28,256



16,938



45,194



66.8

%









Noninterest expenses








  Salaries and employee benefits

55,531



31,102



86,633



78.5

%

  Net occupancy

6,631



4,497



11,128



47.5

%

  Furniture and equipment

5,298



2,040



7,338



159.7

%

  Data processing

14,304



3,672



17,976



289.5

%

  Marketing

2,644



801



3,445



230.1

%

  Communication

1,118



459



1,577



143.6

%

  Professional services

5,659



2,198



7,857



157.5

%

  State intangible tax

1,078



765



1,843



40.9

%

  FDIC assessments

1,323



894



2,217



48.0

%

  Loss (gain) - other real estate owned

(283)



77



(206)



(467.5)

%

  Other

9,452



5,783



15,235



63.4

%

      Total noninterest expenses

102,755



52,288



155,043



96.5

%

Income before income taxes

45,745



38,159



83,904



19.9

%

Income tax expense

9,327



7,653



16,980



21.9

%

      Net income

$

36,418



$

30,506



$

66,924



19.4

%









ADDITIONAL DATA








Net earnings per share - basic

$

0.37



$

0.49



$

0.84




Net earnings per share - diluted

$

0.37



$

0.49



$

0.83




Dividends declared per share

$

0.19



$

0.19



$

0.38












Return on average assets

1.05

%


1.40

%


1.18

%



Return on average shareholders' equity

7.36

%


13.31

%


9.25

%











Interest income

$

147,379



$

90,354



$

237,733



63.1

%

Tax equivalent adjustment

1,420



718



2,138



97.8

%

   Interest income - tax equivalent

148,799



91,072



239,871



63.4

%

Interest expense

23,400



14,542



37,942



60.9

%

   Net interest income - tax equivalent

$

125,399



$

76,530



$

201,929



63.9

%









Net interest margin

4.10

%


3.80

%


3.98

%



Net interest margin (fully tax equivalent) (1)

4.15

%


3.84

%


4.03

%











Full-time equivalent employees

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 35% 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.

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

(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)
















Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


% Change


% Change


2018


2018


2017


2017


2017


Linked Qtr.


Comparable Qtr.

ASSETS














     Cash and due from banks

$

216,667



$

116,581



$

150,650



$

117,840



$

117,478



85.9

%


84.4

%

     Interest-bearing deposits with other banks

37,915



10,200



33,974



34,787



29,839



271.7

%


27.1

%

     Investment securities available-for-sale

2,654,909



1,359,381



1,349,408



1,286,770



1,298,578



95.3

%


104.4

%

     Investment securities held-to-maturity

443,957



633,722



654,008



669,816



696,269



(29.9)

%


(36.2)

%

     Other investments

95,004



53,070



53,140



53,198



53,285



79.0

%


78.3

%

     Loans held for sale

15,821



8,048



11,502



16,466



11,939



96.6

%


32.5

%

     Loans and leases














       Commercial and industrial

2,440,596



1,943,741



1,912,743



1,886,093



1,824,589



25.6

%


33.8

%

       Lease financing

96,198



81,617



89,347



86,014



88,152



17.9

%


9.1

%

       Construction real estate

555,468



494,665



467,730



420,941



443,112



12.3

%


25.4

%

       Commercial real estate

3,888,993



2,544,051



2,490,091



2,523,387



2,471,655



52.9

%


57.3

%

       Residential real estate

918,904



468,584



471,391



477,964



490,398



96.1

%


87.4

%

       Home equity

835,031



483,643



493,604



494,342



464,066



72.7

%


79.9

%

       Installment

100,726



39,248



41,586



43,650



47,654



156.6

%


111.4

%

       Credit card

48,665



46,472



46,691



44,646



44,139



4.7

%


10.3

%

          Total loans

8,884,581



6,102,021



6,013,183



5,977,037



5,873,765



45.6

%


51.3

%

       Less:














          Allowance for loan and lease losses

54,076



54,380



54,021



54,534



54,873



(0.6)

%


(1.5)

%

                Net loans

8,830,505



6,047,641



5,959,162



5,922,503



5,818,892



46.0

%


51.8

%

     Premises and equipment

223,950



127,046



125,036



126,790



128,956



76.3

%


73.7

%

     Goodwill and other intangibles

918,618



209,053



209,379



209,730



210,045



339.4

%


337.3

%

     Accrued interest and other assets

466,783



333,687



350,664



323,789



344,761



39.9

%


35.4

%

       Total Assets

$

13,904,129



$

8,898,429



$

8,896,923



$

8,761,689



$

8,710,042



56.3

%


59.6

%















LIABILITIES














     Deposits














       Interest-bearing demand

$

2,440,088



$

1,442,399



$

1,453,463



$

1,518,011



$

1,496,173



69.2

%


63.1

%

       Savings

3,087,683



2,450,196



2,462,420



2,434,086



2,398,262



26.0

%


28.7

%

       Time

2,104,044



1,545,273



1,317,105



1,188,597



1,097,911



36.2

%


91.6

%

          Total interest-bearing deposits

7,631,815



5,437,868



5,232,988



5,140,694



4,992,346



40.3

%


52.9

%

       Noninterest-bearing

2,471,932



1,572,636



1,662,058



1,585,396



1,476,563



57.2

%


67.4

%

          Total deposits

10,103,747



7,010,504



6,895,046



6,726,090



6,468,909



44.1

%


56.2

%

     Federal funds purchased and securities sold














         under agreements to repurchase

88,070



56,732



72,265



45,532



130,633



55.2

%


(32.6)

%

     FHLB short-term borrowings

1,100,233



601,600



742,300



818,200



957,700



82.9

%


14.9

%

          Total short-term borrowings

1,188,303



658,332



814,565



863,732



1,088,333



80.5

%


9.2

%

     Long-term debt

469,423



169,695



119,654



119,615



119,669



176.6

%


292.3

%

          Total borrowed funds

1,657,726



828,027



934,219



983,347



1,208,002



100.2

%


37.2

%

     Accrued interest and other liabilities

145,757



119,913



136,994



137,298



135,014



21.6

%


8.0

%

       Total Liabilities

11,907,230



7,958,444



7,966,259



7,846,735



7,811,925



49.6

%


52.4

%















SHAREHOLDERS' EQUITY














     Common stock

1,616,534



571,457



573,109



571,750



569,302



182.9

%


184.0

%

     Retained earnings

533,319



515,498



491,847



477,588



463,250



3.5

%


15.1

%

     Accumulated other comprehensive loss

(43,008)



(34,683)



(20,390)



(20,379)



(22,222)



24.0

%


93.5

%

     Treasury stock, at cost

(109,946)



(112,287)



(113,902)



(114,005)



(112,213)



(2.1)

%


(2.0)

%

       Total Shareholders' Equity

1,996,899



939,985



930,664



914,954



898,117



112.4

%


122.3

%

       Total Liabilities and Shareholders' Equity

$

13,904,129



$

8,898,429



$

8,896,923



$

8,761,689



$

8,710,042



56.3

%


59.6

%















 

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)








Quarterly Averages


Year-to-Date Averages


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


June 30,


2018


2018


2017


2017


2017


2018


2017

ASSETS














     Cash and due from banks

$

224,824



$

116,095



$

121,792



$

111,984



$

116,123



$

170,760



$

115,922


     Federal funds sold

786



0



0



0



0



395



0


     Interest-bearing deposits with other banks

28,475



27,073



25,357



37,199



20,293



27,778



30,582


     Investment securities

3,157,339



2,042,781



2,020,040



2,041,785



2,035,334



2,603,139



1,971,372


     Loans held for sale

14,462



9,171



12,572



12,705



9,243



11,831



8,687


     Loans and leases














       Commercial and industrial

3,376,922



1,897,726



1,857,546



1,843,677



1,778,523



2,641,410



1,780,664


       Lease financing

90,896



86,755



84,635



85,649



86,880



88,837



88,207


       Construction real estate

537,671



483,930



449,195



408,373



447,716



510,949



430,970


       Commercial real estate

3,045,458



2,495,604



2,487,149



2,497,170



2,418,355



2,772,050



2,404,258


       Residential real estate

901,803



468,855



477,454



489,508



490,709



686,525



494,042


       Home equity

771,352



487,073



494,804



473,988



462,431



629,998



461,133


       Installment

146,640



40,409



42,283



45,911



51,275



93,818



51,000


       Credit card

48,196



46,969



46,652



45,072



44,478



47,586



44,247


          Total loans

8,918,938



6,007,321



5,939,718



5,889,348



5,780,367



7,471,173



5,754,521


       Less:














          Allowance for loan and lease losses

55,318



55,016



55,279



55,326



57,379



55,168



57,917


                Net loans

8,863,620



5,952,305



5,884,439



5,834,022



5,722,988



7,416,005



5,696,604


     Premises and equipment

230,475



126,016



126,310



128,539



131,654



178,534



132,017


     Goodwill and other intangibles

921,419



209,244



209,571



209,933



210,215



567,299



210,363


     Accrued interest and other assets

498,922



347,491



331,875



340,750



337,111



423,625



330,949


       Total Assets

$

13,940,322



$

8,830,176



$

8,731,956



$

8,716,917



$

8,582,961



$

11,399,366



$

8,496,496
















LIABILITIES














     Deposits














       Interest-bearing demand

$

2,573,150



$

1,415,603



$

1,502,245



$

1,494,367



$

1,483,186



$

1,997,574



$

1,483,803


       Savings

3,196,059



2,450,697



2,518,771



2,494,592



2,408,950



2,825,437



2,317,338


       Time

2,192,196



1,466,440



1,181,396



1,181,406



1,164,087



1,831,323



1,198,667


          Total interest-bearing deposits

7,961,405



5,332,740



5,202,412



5,170,365



5,056,223



6,654,334



4,999,808


       Noninterest-bearing

2,421,230



1,570,572



1,637,228



1,510,032



1,513,995



1,998,251



1,506,587


          Total deposits

10,382,635



6,903,312



6,839,640



6,680,397



6,570,218



8,652,585



6,506,395


     Federal funds purchased and securities sold














          under agreements to repurchase

97,708



72,865



57,131



71,315



62,893



85,355



75,401


     FHLB short-term borrowings

818,909



667,641



660,859



808,842



812,588



743,693



786,774


          Total short-term borrowings

916,617



740,506



717,990



880,157



875,481



829,048



862,175


     Long-term debt

491,407



126,342



124,221



119,661



119,651



309,883



119,628


       Total borrowed funds

1,408,024



866,848



842,211



999,818



995,132



1,138,931



981,803