First Financial Bancorp Reports Fourth Quarter and Full Year 2014 Financial Results

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Jan 29, 2015, 04:15 ET

CINCINNATI, Jan. 29, 2015 /PRNewswire/ -- First Financial Bancorp (Nasdaq: FFBC) ("First Financial" or the "Company") announced today financial and operational results for the fourth quarter 2014 and for the twelve month period ended December 31, 2014.

Fourth quarter net income was $18.6 million and earnings per diluted common share were $0.30. This compares with third quarter net income of $15.3 million and earnings per diluted common share of $0.26 and fourth quarter 2013 net income of $3.8 million and earnings per diluted common share of $0.07.

For the twelve month period ended December 31, 2014, net income was $65.0 million and earnings per diluted common share were $1.09 as compared to net income of $48.3 million and earnings per diluted common share of $0.83 for the twelve month period ended December 31, 2013.

Continued solid quarterly performance
- Quarterly results included several acquisition-related items and other items not expected to recur which reduced pre-tax income by $1.5 million or approximately $0.02 per diluted share
- Return on average assets of 1.02%; 1.07% as adjusted for acquisition-related and other items
- Return on average tangible common equity of 11.63%; 12.24% as adjusted for acquisition-related and other items
Columbus, Ohio market integration complete
- Data platform conversions are now complete for all three banks acquired by the Company during 2014
- Merger-related costs have largely been recognized and were in line with expectations
- Majority of identified efficiency opportunities have been fully implemented
- Loan and deposit growth in line with expectations
Fourth quarter average total loans increased $358.4 million, or 8.2%, and average total deposits increased by $442.8 million, or 8.5%, compared to third quarter averages largely related to the acquisitions in the Columbus, Ohio market and strong third quarter organic loan and deposit growth

The board of directors has authorized a quarterly dividend of $0.16 per common share for the next regularly scheduled dividend, payable on April 1, 2015 to shareholders of record as of February 27, 2015.

Claude Davis, Chief Executive Officer, commented, "We are extremely pleased with our solid earnings for the fourth quarter and for the full year 2014 in light of the prolonged low interest rate environment and continued runoff of higher yielding loans acquired under FDIC Shared Loss Agreements.

"Our loan production remains strong across our core product sets and we have been able to successfully grow low-cost deposits. We continue to take advantage of strategic pricing opportunities and to introduce new products to better meet the financial needs of our clients. Likewise, our disciplined approach to expense management provides a distinct advantage as we compete for new business.

"Although the benefit of commercial loss share coverage that we have enjoyed for the past five years from the FDIC-assisted transactions has now expired, we are confident in our ability to manage the limited exposure associated with the remaining portfolio.

"With the introduction of the First Financial brand into the Columbus, Ohio market through the acquisitions and successful integrations during 2014, we are excited about the future. Our expansion into Columbus complements our metro-centric footprint of Cincinnati, Dayton, Indianapolis and Ft. Wayne. We believe these markets provide the platform to generate solid organic loan, deposit and fee income growth.

"As we look forward to 2015, our focus remains centered on serving the financial needs of our commercial, small business, consumer and wealth management clients. We will continue to listen to our clients, be responsive to their needs and will be innovative in our approach to serving them."

NET INTEREST INCOME AND NET INTEREST MARGIN
Net interest income for the fourth quarter was $61.1 million as compared to $58.4 million for the third quarter 2014 and $55.8 million for the fourth quarter 2013. Compared to the linked quarter, total interest income increased $3.4 million, or 5.3%, while total interest expense increased $0.6 million, or 11.7%. Net interest margin was 3.67% for the fourth quarter, compared to 3.66% for the third quarter 2014 and 3.90% for the fourth quarter 2013. Excluding $0.4 million of higher interest income related to loans that returned to accrual status during the period, net interest margin was 3.64% for the fourth quarter.

Interest income earned on loans increased $3.4 million, or 6.3%, compared to the prior quarter. This increase was driven by a $358.4 million, or 8.2%, increase in average loan balances as a result of the Columbus acquisitions, higher loan fee income and strong, organic loan growth during the period, partially offset by continued runoff of the covered and formerly covered loan portfolio.

Interest income earned from investment securities decreased by $0.2 million compared to the prior quarter as average balances declined $53.3 million, or 2.9%. The decline in investment securities balances was partially offset by a 3 bps increase in the yield earned on the portfolio to 2.40%.

The increase in total interest expense was due to a $331.3 million, or 8.2%, increase in average interest-bearing deposits as well as a 4 bps increase in the related cost of funds. This increase, bringing the cost of interest-bearing deposits to 45 bps, is a result of longer term funding strategies and the full quarterly impact of the Columbus acquisitions. Average borrowed funds decreased $162.6 million, or 18.1%, compared to the linked quarter and the related cost of funds decreased by 4 bps from 36 bps to 32 bps.

NONINTEREST INCOME
The following table presents noninterest income for the three months ended December 31, 2014 and for the trailing four quarters, adjusted to exclude the impact of covered and formerly covered loan activity and other select items.


Table I
	For the Three Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(Dollars in thousands)	2014		2014		2014		2014		2013

Total noninterest income	$	16,942	$	16,511	$	16,337	$	14,175	$	13,043
Selected components of noninterest income
Accelerated discount on covered / formerly covered loans¹	1,759		789		621		1,015		1,572
FDIC loss sharing income	(43)		(192)		1,108		(508)		(3,385)
Gain on sale of investment securities	20		—		—		50		—
Other items not expected to recur	—		97		—		—		—
Total noninterest income excluding items noted above	$	15,206	$	15,817	$	14,608	$	13,618	$	14,856

¹ Net of the related valuation adjustment on the FDIC indemnification asset

Excluding the items highlighted in Table I, noninterest income earned in the fourth quarter was $15.2 million compared to $15.8 million in the third quarter 2014 and $14.9 million in the fourth quarter 2013. The $0.6 million decrease compared to the linked quarter was driven primarily by a $0.3 million decrease in fee income related to the Company's client derivative program, a $0.2 million decrease in deposit service charges and a $0.2 million decrease in bankcard income, partially offset by a $0.2 million increase in fees related to the Company's trust & wealth management business.

NONINTEREST EXPENSE
The following table presents noninterest expense for the three months ended December 31, 2014 and for the trailing four quarters, adjusted to exclude the impact of covered and formerly covered asset activity and other select items.


Table II
	For the Three Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(Dollars in thousands)	2014		2014		2014		2014		2013

Total noninterest expense	$	49,662	$	51,419	$	47,111	$	47,842	$	70,285
Selected components of noninterest expense
Loss (gain) - covered / formerly covered REO	(35)		(1,433)		398		33		946
Loss sharing expense	650		1,002		1,465		1,569		1,495
Pension settlement charges	—		—		—		—		462
Expenses associated with efficiency initiative	123		309		(59)		350		1,450
FDIC indemnification asset valuation adjustment	—		—		—		—		22,417
Acquisition-related expenses	1,315		4,182		517		620		284
Other items not expected to recur	41		728		—		465		—
Total noninterest expense excluding items noted above	$	47,568	$	46,631	$	44,790	$	44,805	$	43,231

Excluding the items highlighted in Table II, noninterest expense was $47.6 million in the fourth quarter of 2014, $46.6 million in the third quarter of 2014 and $43.2 million in the fourth quarter 2013. The $0.9 million increase compared to the linked quarter was primarily due to a $0.3 million increase in incentive compensation during the period, $0.3 million related to a banking center relocation and a $0.1 million increase in marketing expenses during the quarter. Acquisition-related expenses during the period of $1.3 million included $0.8 million of personnel costs, $0.3 million of data processing related expenses and $0.2 million of other miscellaneous expenses.

INCOME TAXES
For the fourth quarter, income tax expense was $7.8 million, resulting in an effective tax rate of 29.5%, compared with income tax expense of $7.2 million and an effective tax rate of 32.0% during the third quarter 2014 and income tax benefit of $1.2 million and an effective tax rate of -47.4% during the fourth quarter 2013. For the full year 2014, the Company's effective tax rate was 31.6%. While the effective tax rate may fluctuate from quarter to quarter due to tax jurisdiction changes and the level of tax-enhanced assets, the normalized effective tax rate in future periods is expected to be in the range of 32.0% - 34.0%.

CREDIT QUALITY
Table III below and the paragraphs that follow present certain credit quality metrics related to the Company's loan portfolio. Effective October 1, 2014, the five-year loss sharing coverage period for non-single family assets expired and the majority of the Company's formerly covered assets were no longer subject to FDIC loss sharing protection. As a result, credit quality metrics for the three months ended December 31, 2014 have been updated to include those formerly covered assets, as well as the remaining covered assets that are subject to FDIC loss sharing protection for five more years. This reclassification resulted in the addition of $11.5 million of allowance for loan and lease losses, $3.9 million of nonaccrual loans, $2.5 million of net charge-offs, $12.0 million of OREO, $45.7 million of classified assets and $4.7 million of delinquent loans during the fourth quarter. Credit quality metrics for the preceding four quarters exclude covered assets due to the associated FDIC loss sharing protection in effect during those periods.


Table III				Excludes covered assets*
	As of or for the Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2014			2014			2014			2014			2013

Total nonaccrual loans ¹	$	48,469		$	41,646		$	32,418		$	35,334		$	37,605
Troubled debt restructurings - accruing	15,928			13,369			12,607			13,400			15,094
Total nonperforming loans	64,397			55,015			45,025			48,734			52,699
Total nonperforming assets	87,071			66,331			58,395			61,477			72,505
Nonperforming assets as a % of:
Period-end loans plus OREO	1.81		%	1.49		%	1.59		%	1.70		%	2.06		%
Total assets	1.21		%	0.90		%	0.89		%	0.95		%	1.13		%
Nonperforming assets ex. accruing TDRs as a % of:
Period-end loans plus OREO	1.48		%	1.19		%	1.25		%	1.33		%	1.63		%
Total assets	0.99		%	0.72		%	0.70		%	0.74		%	0.89		%
Nonperforming loans as a % of total loans	1.35		%	1.24		%	1.23		%	1.35		%	1.50		%
Provision for loan and lease losses	$	1,088		$	1,093		$	29		$	1,159		$	1,851
Provision for covered / formerly covered loan and lease losses	964			*			*			*			*
Total provision for loan and lease losses	$	2,052		$	1,093		$	29		$	1,159		$	1,851
Allowance for uncovered loan & lease losses	$	52,858		$	42,454		$	42,027		$	43,023		$	43,829
Allowance for loan & lease losses as a % of:
Total loans	1.11		%	0.95		%	1.15		%	1.19		%	1.25		%
Nonaccrual loans	109.1		%	101.9		%	129.6		%	121.8		%	116.6		%
Nonperforming loans	82.1		%	77.2		%	93.3		%	88.3		%	83.2		%
Allowance and loan marks, net of indemnification asset, as a % of total loans	1.51		%	*			*			*			*
Total net charge-offs	$	3,183		$	666		$	1,025		$	1,965		$	3,536
Annualized net-charge-offs as a % of average
loans & leases	0.27		%	0.07		%	0.11		%	0.23		%	0.41		%

¹ Includes nonaccrual troubled debt restructurings
* Amounts reclassified in the fourth quarter of 2014 due to the expiration of FDIC loss sharing coverage on non-single family assets effective October 1, 2014.

Net Charge-offs
For the fourth quarter, net charge-offs totaled $3.2 million, an increase of $2.5 million, or 377.9% compared to the linked quarter. Excluding the impact from covered / formerly covered loans during the period, net charge-offs increased $0.1 million during the quarter to $0.7 million, or 6 bps as a percentage of loans on an annualized basis, as a $0.4 million decline in charge-offs was largely offset by a similar decline in recoveries during the period.

Nonperforming Assets
Nonaccrual loans, including nonaccrual troubled debt restructurings, increased $6.8 million, or 16.4%, to $48.5 million as of December 31, 2014 from $41.6 million as of September 30, 2014. Excluding the impact from covered / formerly covered loans, the increase in nonaccrual loans was primarily related to the addition of a single commercial real estate relationship totaling $1.4 million during the period.

Accruing troubled debt restructurings increased $2.6 million, or 19.1%, to $15.9 million as of December 31, 2014 from $13.4 million as of September 30, 2014. The increase in accruing troubled debt restructurings during the fourth quarter was primarily related to the addition of a $1.7 million commercial real estate credit.

OREO increased $11.4 million, or 100.4%, to $22.7 million during the fourth quarter due to the addition of covered / formerly covered OREO during the period. In addition to covered and previously covered OREO included during the quarter, $0.5 million of other additions were offset by $0.7 million of sales and $0.5 million of valuation adjustments during the period.

Total classified assets increased $48.9 million, or 46.2%, to $154.8 million as of December 31, 2014 from $105.9 million as of September 30, 2014. Excluding the impact from covered / formerly covered assets, classified assets increased $3.2 million, or 3.0% during the period. Classified assets are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse.

Delinquent Loans
As of December 31, 2014, loans 30-to-89 days past due totaled $17.1 million, or 0.36% of period-end loans, compared to $12.1 million, or 0.27%, as of September 30, 2014 and $13.6 million, or 0.39%, as of December 31, 2013. The increase in loans 30-to-89 days past due was driven primarily by the addition of covered / formerly covered loans during the period.

Provision for Loan & Lease Losses
Fourth quarter provision expense was $2.1 million. Excluding the impact from covered / formerly covered loans, provision expense was unchanged from the third quarter.

The total allowance for loan and lease losses as of December 31, 2014 was $52.9 million, or 1.11% as a percentage of period-end loans, compared to 0.95% as of September 30, 2014. Excluding the impact from covered / formerly covered loans, the allowance for loan and lease losses as of December 31, 2014 was $42.8 million, or 0.96% as a percentage of period-end loans.

Given the applications of acquisition accounting and the resulting estimated fair value marks embedded in the carrying value of loans acquired in the Columbus transactions during the third quarter, First Financial has experienced an increase in loan balances, without a corresponding increase in the allowance. As such, the Company considers the total allowance for loan and lease losses and the remaining net fair value marks on all acquired loans, less the remaining indemnification asset balance, to be a relevant measure of the Company's loan loss protection. The balance of the Company's total allowance and loan marks, net of the indemnification asset, was 1.51% of total loans and leases as of December 31, 2014.

LOANS
The following table presents the loan portfolio as of December 31, 2014, September 30, 2014 and December 31, 2013.


Table IV
	As of
	December 31, 2014				September 30, 2014				December 31, 2013
			Percent				Percent				Percent
(Dollars in thousands)	Balance		of Total		Balance		of Total		Balance		of Total

Commercial	$	1,315,114	27.5	%	$	1,328,526	27.8	%	$	1,077,984	27.2	%
Real estate - construction	197,571		4.1	%	195,524		4.1	%	89,297		2.3	%
Real estate - commercial	2,140,667		44.8	%	2,135,968		44.7	%	1,765,620		44.5	%
Real estate - residential	501,894		10.5	%	498,873		10.4	%	433,664		10.9	%
Installment	47,320		1.0	%	51,131		1.1	%	52,774		1.3	%
Home equity	458,627		9.6	%	460,957		9.6	%	426,078		10.8	%
Credit card	38,475		0.8	%	38,042		0.8	%	37,962		1.0	%
Lease financing	77,567		1.6	%	73,216		1.5	%	80,135		2.0	%
Total loans	$	4,777,235	100.0	%	$	4,782,237	100.0	%	$	3,963,514	100.0	%

Total loans were $4.8 billion as of December 31, 2014, decreasing $5.0 million, or 0.1%, compared to the linked quarter and increasing $813.7 million, or 20.5%, compared to December 31, 2013. Average total loans for the fourth quarter increased by $358.4 million, or 8.2%, compared to the third quarter due to originated loan volume during the third quarter combined with the full quarterly impact of the Columbus acquisitions. Total loans decreased modestly during the quarter due primarily to continued runoff of the covered and formerly covered loan portfolio and late quarter payoff activity in the uncovered portfolio, partially offset by growth in the commercial real estate and lease financing portfolios.

INVESTMENTS
The following table presents a summary of the total investment portfolio at December 31, 2014.


Table V
	As of December 31, 2014
	Held-to-		Available-for-						Percent
(Dollars in thousands)	Maturity		Sale		Other		Total		of Portfolio

Debt obligations of the U.S. Government	$	—	$	19,714	$	—	$	19,714	1.1	%
Debt obligations of U.S. Government Agency	17,570		11,881		—		29,451		1.7	%
Residential Mortgage Backed Securities
Pass-through securities:
Agency fixed rate	73,932		79,573		—		153,505		8.7	%
Agency adjustable rate	140,268		13,635		—		153,903		8.7	%
Non-Agency fixed rate	—		8,240		—		8,240		0.5	%
Collateralized mortgage obligations:
Agency fixed rate	308,874		236,696		—		545,570		31.0	%
Agency variable rate	—		90,549		—		90,549		5.1	%
Agency collateralized and insured municipal securities	82,280		99,728		—		182,008		10.3	%
Commercial mortgage backed securities	237,870		121,145		—		359,015		20.4	%
Municipal bond securities	2,405		26,766		—		29,171		1.7	%
Corporate securities	4,797		69,278		—		74,075		4.2	%
Asset-backed securities	—		54,840		—		54,840		3.1	%
Regulatory stock	—		—		47,227		47,227		2.7	%
Other	—		8,423		5,399		13,822		0.8	%
	$	867,996	$	840,468	$	52,626	$	1,761,090	100.0	%

The investment portfolio decreased $119.0 million, or 6.3%, to $1.8 billion during the fourth quarter as $7.7 million of purchases were offset by sales of $73.8 million, amortization and other portfolio reductions. As of December 31, 2014, the overall duration of the investment portfolio decreased to 3.4 years from 3.7 years as of September 30, 2014. The yield earned on the portfolio during the quarter increased 3 bps to 2.40% from 2.37% for the linked quarter, driven by the sale of lower yielding assets and a decline in prepayment speeds. The net unrealized loss included in accumulated other comprehensive loss related to the investment portfolio decreased from $6.2 million as of September 30, 2014 to $2.5 million as of December 31, 2014 due primarily to lower rates.

DEPOSITS
Total deposits were $5.7 billion as of December 31, 2014, increasing $122.7 million, or 2.2%, compared to the linked quarter. Average total deposits were $5.7 billion as of December 31, 2014, increasing $442.8 million, or 8.5%, compared to the linked quarter due primarily to the full quarterly impact of the Columbus acquisitions. The increase in period-end balances was driven by a $42.2 million, or 13.5% annualized increase in non-interest bearing deposits and an $80.6 million increase, or 7.5% annualized increase in interest bearing deposits.

Non-time deposit balances totaled $4.4 billion as of December 31, 2014, increasing $114.7 million, or 2.7%, compared to the linked quarter. The average balance of non-time deposits totaled $4.4 billion as of December 31, 2014, increasing $316.4 million, or 7.7%, compared to the linked quarter.

Time deposit balances increased $8.0 million, or 0.6%, to $1.3 billion as of December 31, 2014. Average time deposit balances totaled $1.3 billion as of December 31, 2014, increasing $126.5 million, or 11.3%, compared to the linked quarter.

The Company's total cost of deposit funding, inclusive of noninterest-bearing balances, was 35 bps for the quarter, representing an increase of 3 bps compared to the prior quarter and 8 bps compared to the fourth quarter 2013. The higher cost of deposit funding during the quarter is primarily the result of the modestly higher cost of acquired deposits in the Columbus, Ohio market, hedging strategies and the Company's efforts to attract longer-term fixed rate deposits.

CAPITAL MANAGEMENT
The following table presents First Financial's regulatory and other capital ratios as of December 31, 2014, September 30, 2014 and December 31, 2013.


Table VI
	As of
	December 31,			September 30,			December 31,
	2014			2014			2013

Leverage Ratio	9.44		%	9.70		%	10.11		%
Tier 1 Capital Ratio	12.69		%	12.74		%	14.61		%
Total Risk-Based Capital Ratio	13.71		%	13.80		%	15.88		%
Ending tangible shareholders' equity
to ending tangible assets	9.02		%	8.71		%	9.20		%
Ending tangible common shareholders'
equity to ending tangible assets	9.02		%	8.71		%	9.20		%

Tangible book value per share	$	10.38		$	10.23		$	10.10

Shareholders' equity increased $10.2 million during the quarter due primarily to net income for the quarter which was partially offset by declared dividends.

The Company's Tier I and total risk-based capital ratios declined during the quarter due primarily to an increase in risk-weighted assets resulting from the expiration of loss share coverage on the previously covered non-single family loan portfolio as well as an increase in originated loan balances. The Company's tangible common equity ratio increased during the quarter due to higher tangible common equity and lower tangible assets. The Company's leverage ratio decreased primarily as a result of the overall growth in the average balance sheet during the quarter.

Regulatory capital ratios as of December 31, 2014 are considered preliminary pending the filing of the Company's regulatory reports.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, January 30, 2015 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 10059329. The webcast will be archived on the Investor Relations section of the Company's website through January 30, 2016.

Press Release and Additional Information on Website
This press release as well as supplemental information and any non-GAAP reconciliations related to this release is available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com/investor.

About First Financial Bancorp
First Financial Bancorp is a Cincinnati, Ohio based bank holding company. As of December 31, 2014, the Company had $7.2 billion in assets, $4.8 billion in loans, $5.7 billion in deposits and $784 million in shareholders' equity. The Company's subsidiary, First Financial Bank, N.A., founded in 1863, provides banking and financial services products through its four lines of business: commercial, consumer, wealth management and mortgage. The commercial, consumer and mortgage units provide traditional banking services to business and retail clients. First Financial Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.4 billion in assets under management as of December 31, 2014. The Company's strategic operating markets are located in Ohio, Indiana and Kentucky where it operates 106 banking centers. Additional information about the Company, including its products, services and banking locations is available at www.bankatfirst.com.

Forward-Looking Statement
Certain statements contained in this release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure and other financial items, statements of plans and objectives of First Financial or its management or board of directors and statements of future economic performances and statements of assumptions underlying such statements. Words such as ''believes,'' ''anticipates,'' "likely," "expected," ''intends,'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Management's analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to: economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business; the effect of and changes in policies and laws or regulatory agencies (notably the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act); management's ability to effectively execute its business plan; mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; the Company's ability to comply with the terms of loss sharing agreements with the FDIC; the effect of changes in accounting policies and practices; and the costs and effects of litigation and of unexpected or adverse outcomes in such litigation. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, as well as its other filings with the SEC, for a more detailed discussion of these risks, uncertainties and other factors that could cause actual results to differ from those discussed in the forward-looking statements. Such forward-looking statements are meaningful only on the date when such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made to reflect the occurrence of unanticipated events.

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

	Three Months Ended,															Twelve months ended,
	Dec. 31,			Sep. 30,			June 30,			Mar. 31,			Dec. 31,			Dec. 31,
	2014			2014			2014			2014			2013			2014			2013
RESULTS OF OPERATIONS
Net income	$	18,599		$	15,344		$	15,953		$	15,104		$	3,785		$	65,000		$	48,349
Net earnings per share - basic	$	0.31		$	0.26		$	0.28		$	0.26		$	0.07		$	1.11		$	0.84
Net earnings per share - diluted	$	0.30		$	0.26		$	0.28		$	0.26		$	0.07		$	1.09		$	0.83
Dividends declared per share	$	0.16		$	0.15		$	0.15		$	0.15		$	0.15		$	0.61		$	0.94

KEY FINANCIAL RATIOS
Return on average assets	1.02		%	0.88		%	0.99		%	0.96		%	0.24		%	0.96		%	0.77		%
Return on average shareholders' equity	9.46		%	8.16		%	9.19		%	8.95		%	2.15		%	8.94		%	6.89		%
Return on average tangible shareholders' equity	11.63		%	10.15		%	10.73		%	10.49		%	2.51		%	11.18		%	8.05		%

Net interest margin	3.67		%	3.66		%	3.70		%	3.82		%	3.90		%	3.71		%	3.97		%
Net interest margin (fully tax equivalent) ⁽¹⁾	3.72		%	3.71		%	3.76		%	3.87		%	3.94		%	3.76		%	4.01		%

Ending shareholders' equity as a percent of ending assets	10.86		%	10.52		%	10.78		%	10.64		%	10.63		%	10.86		%	10.63		%
Ending tangible shareholders' equity as a percent of:
Ending tangible assets	9.02		%	8.71		%	9.39		%	9.23		%	9.20		%	9.02		%	9.20		%
Risk-weighted assets	12.02		%	12.07		%	13.56		%	13.50		%	13.59		%	12.02		%	13.59		%

Average shareholders' equity as a percent of average assets	10.77		%	10.75		%	10.79		%	10.69		%	11.23		%	10.75		%	11.17		%
Average tangible shareholders' equity as a percent of
average tangible assets	8.94		%	8.83		%	9.38		%	9.27		%	9.77		%	8.79		%	9.72		%

Book value per share	$	12.76		$12.61			$12.23			$11.98			$11.86			$12.76			$11.86
Tangible book value per share	$	10.38		$10.23			$10.49			$10.24			$10.10			$10.38			$10.10

Tier 1 Ratio ⁽²⁾	12.69		%	12.74		%	14.34		%	14.42		%	14.61		%	12.69		%	14.61		%
Total Capital Ratio ⁽²⁾	13.71		%	13.80		%	15.59		%	15.67		%	15.88		%	13.71		%	15.88		%
Leverage Ratio ⁽²⁾	9.44		%	9.70		%	9.99		%	9.94		%	10.11		%	9.44		%	10.11		%

AVERAGE BALANCE SHEET ITEMS
Loans ⁽³⁾	$	4,758,374		$	4,403,591		$	4,025,074		$	3,966,838		$	3,940,141		$	4,290,953		$	3,955,536
FDIC indemnification asset	24,172			28,050			33,987			43,799			78,313			32,436			95,126
Investment securities	1,811,941			1,865,241			1,811,175			1,807,571			1,654,374			1,824,107			1,696,211
Interest-bearing deposits with other banks	22,617			29,433			10,697			2,922			4,906			16,507			6,464
Total earning assets	$	6,617,104		$	6,326,315		$	5,880,933		$	5,821,130		$	5,677,734		$	6,164,003		$	5,753,337
Total assets	$	7,241,869		$	6,937,283		$	6,454,252		$	6,399,235		$	6,232,971		$	6,760,959		$	6,281,411
Noninterest-bearing deposits	$	1,290,754		$	1,179,207		$	1,110,697		$	1,096,509		$	1,129,097		$	1,169,851		$	1,078,800
Interest-bearing deposits	4,372,529			4,041,255			3,832,295			3,695,177			3,720,809			3,987,323			3,737,946
Total deposits	$	5,663,283		$	5,220,462		$	4,942,992		$	4,791,686		$	4,849,906		$	5,157,174		$	4,816,746
Borrowings	$	733,726		$	896,328		$	745,990		$	842,479		$	583,522		$	804,584		$	657,265
Shareholders' equity	$	780,131		$	745,729		$	696,609		$	684,332		$	700,063		$	727,015		$	701,425

CREDIT QUALITY RATIOS ⁽⁴⁾
Allowance to ending loans	1.11		%	0.95		%	1.15		%	1.19		%	1.25		%	1.11		%	1.25		%
Allowance to nonaccrual loans	109.06		%	101.94		%	129.64		%	121.76		%	116.55		%	109.06		%	116.55		%
Allowance to nonperforming loans	82.08		%	77.17		%	93.34		%	88.28		%	83.17		%	82.08		%	83.17		%
Nonperforming loans to total loans	1.35		%	1.24		%	1.23		%	1.35		%	1.50		%	1.35		%	1.50		%
Nonperforming assets to ending loans, plus OREO	1.81		%	1.49		%	1.59		%	1.70		%	2.06		%	1.81		%	2.06		%
Nonperforming assets to total assets	1.21		%	0.90		%	0.89		%	0.95		%	1.13		%	1.21		%	1.13		%
Net charge-offs to average loans (annualized)	0.27		%	0.07		%	0.11		%	0.23		%	0.41		%	0.63		%	0.38		%


	(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 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, 2014 regulatory capital ratios are preliminary.
	(3) Includes loans held for sale.
	(4) Credit quality ratios for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013 and for the twelve months ended December 31, 2013 exclude covered assets.

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,
	2014		2013		% Change	2014		2013		% Change
Interest income
Loans, including fees	$	57,087	$	52,351	9.0%	$	208,836	$	216,306	(3.5)%
Investment securities
Taxable	9,905		9,209		7.6%	40,924		34,147		19.8%
Tax-exempt	1,060		719		47.4%	3,560		2,400		48.3%
Total investment securities interest	10,965		9,928		10.4%	44,484		36,547		21.7%
Other earning assets	(1,299)		(2,432)		(46.6)%	(5,461)		(7,645)		(28.6)%
Total interest income	66,753		59,847		11.5%	247,859		245,208		1.1%

Interest expense
Deposits	5,013		3,247		54.4%	16,153		13,247		21.9%
Short-term borrowings	293		257		14.0%	1,268		1,177		7.7%
Long-term borrowings	308		539		(42.9)%	1,813		2,464		(26.4)%
Total interest expense	5,614		4,043		38.9%	19,234		16,888		13.9%
Net interest income	61,139		55,804		9.6%	228,625		228,320		0.1%
Provision for loan and lease losses	2,052		(4,006)		(151.2)%	1,528		8,909		(82.8)%
Net interest income after provision for loan and lease losses	59,087		59,810		(1.2)%	227,097		219,411		3.5%

Noninterest income
Service charges on deposit accounts	5,102		5,226		(2.4)%	20,274		20,595		(1.6)%
Trust and wealth management fees	3,376		3,506		(3.7)%	13,634		14,319		(4.8)%
Bankcard income	2,639		2,699		(2.2)%	10,740		10,914		(1.6)%
Net gains from sales of loans	1,571		604		160.1%	4,364		3,150		38.5%
Gain on sale of investment securities	20		0		N/M	70		1,724		(95.9)%
FDIC loss sharing income	(43)		(3,385)		98.7%	365		3,720		(90.2)%
Accelerated discount on covered/formerly covered loans	1,759		1,572		11.9%	4,184		7,153		(41.5)%
Other	2,518		2,821		(10.7)%	10,334		12,072		(14.4)%
Total noninterest income	16,942		13,043		29.9%	63,965		73,647		(13.1)%

Noninterest expenses
Salaries and employee benefits	28,140		24,023		17.1%	107,702		101,402		6.2%
Pension settlement charges	0		462		(100.0)%	0		6,174		(100.0)%
Net occupancy	4,806		4,557		5.5%	19,187		21,207		(9.5)%
Furniture and equipment	2,229		2,136		4.4%	8,554		8,970		(4.6)%
Data processing	2,942		2,617		12.4%	12,963		10,229		26.7%
Marketing	1,048		999		4.9%	3,603		4,270		(15.6)%
Communication	551		728		(24.3)%	2,277		3,207		(29.0)%
Professional services	1,429		1,781		(19.8)%	6,170		6,876		(10.3)%
State intangible tax	175		901		(80.6)%	2,111		3,929		(46.3)%
FDIC assessments	1,128		1,121		0.6%	4,462		4,501		(0.9)%
Loss (gain) - other real estate owned	289		1,294		(77.7)%	862		31		2,680.6%
Loss sharing expense	650		1,495		(56.5)%	4,686		7,083		(33.8)%
FDIC indemnification impairment	—		22,417		(100.0)%	0		22,417		(100.0)%
Other	6,275		5,754		9.1%	23,457		25,179		(6.8)%
Total noninterest expenses	49,662		70,285		(29.3)%	196,034		225,475		(13.1)%
Income before income taxes	26,367		2,568		926.8%	95,028		67,583		40.6%
Income tax expense	7,768		(1,217)		(738.3)%	30,028		19,234		56.1%
Net income	$	18,599	$	3,785	391.4%	$	65,000	$	48,349	34.4%

ADDITIONAL DATA
Net earnings per share - basic	$	0.31	$	0.07		$	1.11	$	0.84
Net earnings per share - diluted	$	0.30	$	0.07		$	1.09	$	0.83
Dividends declared per share	$	0.16	$	0.15		$	0.61	$	0.94

Return on average assets	1.02%		0.24%			0.96%		0.77%
Return on average shareholders' equity	9.46%		2.15%			8.94%		6.89%

Interest income	$	66,753	$	59,847	11.5%	$	247,859	$	245,208	1.1%
Tax equivalent adjustment	946		635		49.0%	3,224		2,142		50.5%
Interest income - tax equivalent	67,699		60,482		11.9%	251,083		247,350		1.5%
Interest expense	5,614		4,043		38.9%	19,234		16,888		13.9%
Net interest income - tax equivalent	$	62,085	$	56,439	10.0%	$	231,849	$	230,462	0.6%

Net interest margin	3.67%		3.90%			3.71%		3.97%
Net interest margin (fully tax equivalent) ⁽¹⁾	3.72%		3.94%			3.76%		4.01%

Full-time equivalent employees	1,369		1,306

(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 provided 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)

	2014
	Fourth		Third		Second		First				% Change
	Quarter		Quarter		Quarter		Quarter		YTD		Linked Qtr.
Interest income
Loans, including fees	$	57,087	$	53,725	$	48,877	$	49,147	$	208,836	6.3%
Investment securities
Taxable	9,905		10,227		10,355		10,437		40,924		(3.1)%
Tax-exempt	1,060		894		796		810		3,560		18.6%
Total investment securities interest	10,965		11,121		11,151		11,247		44,484		(1.4)%
Other earning assets	(1,299)		(1,455)		(1,301)		(1,406)		(5,461)		(10.7)%
Total interest income	66,753		63,391		58,727		58,988		247,859		5.3%

Interest expense
Deposits	5,013		4,218		3,606		3,316		16,153		18.8%
Short-term borrowings	293		354		292		329		1,268		(17.2)%
Long-term borrowings	308		456		525		524		1,813		(32.5)%
Total interest expense	5,614		5,028		4,423		4,169		19,234		11.7%
Net interest income	61,139		58,363		54,304		54,819		228,625		4.8%
Provision for loan and lease losses	2,052		893		(384)		(1,033)		1,528		129.8%
Net interest income after provision for loan and lease losses	59,087		57,470		54,688		55,852		227,097		2.8%

Noninterest income
Service charges on deposit accounts	5,102		5,263		5,137		4,772		20,274		(3.1)%
Trust and wealth management fees	3,376		3,207		3,305		3,746		13,634		5.3%
Bankcard income	2,639		2,859		2,809		2,433		10,740		(7.7)%
Net gains from sales of loans	1,571		1,660		737		396		4,364		(5.4)%
Gain on sale of investment securities	20		0		0		50		70		N/M
FDIC loss sharing income	(43)		(192)		1,108		(508)		365		(77.6)%
Accelerated discount on covered/formerly covered loans	1,759		789		621		1,015		4,184		122.9%
Other	2,518		2,925		2,620		2,271		10,334		(13.9)%
Total noninterest income	16,942		16,511		16,337		14,175		63,965		2.6%

Noninterest expenses
Salaries and employee benefits	28,140		28,686		25,615		25,261		107,702		(1.9)%
Net occupancy	4,806		4,577		4,505		5,299		19,187		5.0%
Furniture and equipment	2,229		2,265		1,983		2,077		8,554		(1.6)%
Data processing	2,942		4,393		2,770		2,858		12,963		(33.0)%
Marketing	1,048		939		830		786		3,603		11.6%
Communication	551		541		562		623		2,277		1.8%
Professional services	1,429		1,568		1,449		1,724		6,170		(8.9)%
State intangible tax	175		648		644		644		2,111		(73.0)%
FDIC assessments	1,128		1,126		1,074		1,134		4,462		0.2%
Loss (gain) - other real estate owned	289		(589)		711		451		862		(149.1)%
Loss sharing expense	650		1,002		1,465		1,569		4,686		(35.1)%
Other	6,275		6,263		5,503		5,416		23,457		0.2%
Total noninterest expenses	49,662		51,419		47,111		47,842		196,034		(3.4)%
Income before income taxes	26,367		22,562		23,914		22,185		95,028		16.9%
Income tax expense	7,768		7,218		7,961		7,081		30,028		7.6%
Net income	$	18,599	$	15,344	$	15,953	$	15,104	$	65,000	21.2%

ADDITIONAL DATA
Net earnings per share - basic	$	0.31	$	0.26	$	0.28	$	0.26	$	1.11
Net earnings per share - diluted	$	0.30	$	0.26	$	0.28	$	0.26	$	1.09
Dividends declared per share	$	0.16	$	0.15	$	0.15	$	0.15	$	0.61

Return on average assets	1.02%		0.88%		0.99%		0.96%		0.96%
Return on average shareholders' equity	9.46%		8.16%		9.19%		8.95%		8.94%

Interest income	$	66,753	$	63,391	$	58,727	$	58,988	$	247,859	5.3%
Tax equivalent adjustment	946		818		758		702		3,224		15.6%
Interest income - tax equivalent	67,699		64,209		59,485		59,690		251,083		5.4%
Interest expense	5,614		5,028		4,423		4,169		19,234		11.7%
Net interest income - tax equivalent	$	62,085	$	59,181	$	55,062	$	55,521	$	231,849	4.9%

Net interest margin	3.67%		3.66%		3.70%		3.82%		3.71%
Net interest margin (fully tax equivalent)⁽¹⁾	3.72%		3.71%		3.76%		3.87%		3.76%

Full-time equivalent employees	1,369		1,395		1,296		1,286

(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 provided 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)

	2013
	Fourth			Third			Second			First			Full
	Quarter			Quarter			Quarter			Quarter			Year
Interest income
Loans, including fees	$	52,351		$	52,908		$	55,022		$	56,025		$	216,306
Investment securities
Taxable	9,209			8,267			8,295			8,376			34,147
Tax-exempt	719			541			560			580			2,400
Total investment securities interest	9,928			8,808			8,855			8,956			36,547
Other earning assets	(2,432)			(2,185)			(1,556)			(1,472)			(7,645)
Total interest income	59,847			59,531			62,321			63,509			245,208

Interest expense
Deposits	3,247			2,856			3,284			3,860			13,247
Short-term borrowings	257			286			305			329			1,177
Long-term borrowings	539			617			654			654			2,464
Total interest expense	4,043			3,759			4,243			4,843			16,888
Net interest income	55,804			55,772			58,078			58,666			228,320
Provision for loan and lease losses	(4,006)			6,706			(5,874)			12,083			8,909
Net interest income after provision for loan and lease losses	59,810			49,066			63,952			46,583			219,411

Noninterest income
Service charges on deposit accounts	5,226			5,447			5,205			4,717			20,595
Trust and wealth management fees	3,506			3,366			3,497			3,950			14,319
Bankcard income	2,699			2,637			3,145			2,433			10,914
Net gains from sales of loans	604			751			1,089			706			3,150
Gain on sale of investment securities	0			0			188			1,536			1,724
FDIC loss sharing income	(3,385)			5,555			(7,384)			8,934			3,720
Accelerated discount on covered/formerly covered loans	1,572			1,711			1,935			1,935			7,153
Other	2,821			2,824			3,940			2,487			12,072
Total noninterest income	13,043			22,291			11,615			26,698			73,647

Noninterest expenses
Salaries and employee benefits	24,023			23,834			26,216			27,329			101,402
Pension settlement charges	462			1,396			4,316			0			6,174
Net occupancy	4,557			5,101			5,384			6,165			21,207
Furniture and equipment	2,136			2,213			2,250			2,371			8,970
Data processing	2,617			2,584			2,559			2,469			10,229
Marketing	999			1,192			1,182			897			4,270
Communication	728			865			781			833			3,207
Professional services	1,781			1,528			1,764			1,803			6,876
State intangible tax	901			1,010			1,004			1,014			3,929
FDIC assessments	1,121			1,107			1,148			1,125			4,501
Loss (gain) - other real estate owned	1,294			388			(1,996)			345			31
Loss sharing expense	1,495			1,724			1,578			2,286			7,083
FDIC indemnification impairment	22,417			0			0			0			22,417
Other	5,754			5,859			7,097			6,469			25,179
Total noninterest expenses	70,285			48,801			53,283			53,106			225,475
Income before income taxes	2,568			22,556			22,284			20,175			67,583
Income tax expense	(1,217)			7,645			6,455			6,351			19,234
Net income	$	3,785		$	14,911		$	15,829		$	13,824		$	48,349

ADDITIONAL DATA
Net earnings per share - basic	$	0.07		$	0.26		$	0.28		$	0.24		$	0.84
Net earnings per share - diluted	$	0.07		$	0.26		$	0.27		$	0.24		$	0.83
Dividends declared per share	$	0.15		$	0.27		$	0.24		$	0.28		$	0.94

Return on average assets	0.24		%	0.96		%	1.01		%	0.88		%	0.77		%
Return on average shareholders' equity	2.15		%	8.53		%	9.02		%	7.91		%	6.89		%

Interest income	$	59,847		$	59,531		$	62,321		$	63,509		$	245,208
Tax equivalent adjustment	635			516			514			477			2,142
Interest income - tax equivalent	60,482			60,047			62,835			63,986			247,350
Interest expense	4,043			3,759			4,243			4,843			16,888
Net interest income - tax equivalent	$	56,439		$	56,288		$	58,592		$	59,143		$	230,462

Net interest margin	3.90		%	3.91		%	4.02		%	4.04		%	3.97		%
Net interest margin (fully tax equivalent)⁽¹⁾	3.94		%	3.95		%	4.06		%	4.07		%	4.01		%

Full-time equivalent employees	1,306			1,292			1,338			1,385

(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 provided 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
	2014		2014		2014		2014		2013		Linked Qtr.	Comparable Qtr.
ASSETS
Cash and due from banks	$	110,122	$	121,360	$	123,160	$	161,515	$	117,620	(9.3)%	(6.4)%
Interest-bearing deposits with other banks	22,630		22,365		39,237		9,681		25,830		1.2%	(12.4)%
Investment securities available-for-sale	840,468		929,594		897,715		862,526		913,601		(9.6)%	(8.0)%
Investment securities held-to-maturity	867,996		900,521		899,502		890,806		837,272		(3.6)%	3.7%
Other investments	52,626		49,986		47,640		47,659		47,427		5.3%	11.0%
Loans held for sale	11,005		16,816		13,108		6,171		8,114		(34.6)%	35.6%
Loans ⁽¹⁾
Commercial	1,315,114		1,328,526		1,171,181		1,152,442		1,077,984		(1.0)%	22.0%
Real estate - construction	197,571		195,524		115,703		96,476		89,297		1.0%	121.3%
Real estate - commercial	2,140,667		2,135,968		1,700,069		1,748,688		1,765,620		0.2%	21.2%
Real estate - residential	501,894		498,873		447,561		438,439		433,664		0.6%	15.7%
Installment	47,320		51,131		47,753		50,017		52,774		(7.5)%	(10.3)%
Home equity	458,627		460,957		426,846		420,746		426,078		(0.5)%	7.6%
Credit card	38,475		38,042		37,937		37,008		37,962		1.1%	1.4%
Lease financing	77,567		73,216		81,212		79,792		80,135		5.9%	(3.2)%
Total loans	4,777,235		4,782,237		4,028,262		4,023,608		3,963,514		(0.1)%	20.5%
Less
Allowance for loan and lease losses⁽²⁾	52,858		53,989		54,452		53,596		62,730		(2.1)%	(15.7)%
Net loans	4,724,377		4,728,248		3,973,810		3,970,012		3,900,784		(0.1)%	21.1%
Premises and equipment	141,381		141,851		133,418		135,105		137,110		(0.3)%	3.1%
Goodwill	137,739		137,458		95,050		95,050		95,050		0.2%	44.9%
Other intangibles	8,114		8,542		5,344		5,566		5,924		(5.0)%	37.0%
FDIC indemnification asset	22,666		24,160		30,420		39,003		45,091		(6.2)%	(49.7)%
Accrued interest and other assets	278,697		272,568		287,340		275,995		283,390		2.2%	(1.7)%
Total Assets	$	7,217,821	$	7,353,469	$	6,545,744	$	6,499,089	$	6,417,213	(1.8)%	12.5%

LIABILITIES
Deposits
Interest-bearing demand	$	1,225,378	$	1,214,726	$	1,105,031	$	1,102,029	$	1,125,723	0.9%	8.9%
Savings	1,889,473		1,827,590		1,656,798		1,639,495		1,612,005		3.4%	17.2%
Time	1,255,364		1,247,334		973,100		956,049		952,327		0.6%	31.8%
Total interest-bearing deposits	4,370,215		4,289,650		3,734,929		3,697,573		3,690,055		1.9%	18.4%
Noninterest-bearing	1,285,527		1,243,367		1,140,198		1,122,816		1,147,452		3.4%	12.0%
Total deposits	5,655,742		5,533,017		4,875,127		4,820,389		4,837,507		2.2%	16.9%
Federal funds purchased and securities sold
under agreements to repurchase	103,192		113,303		128,013		112,293		94,749		(8.9)%	8.9%
FHLB short-term borrowings	558,200		806,000		686,300		722,800		654,000		(30.7)%	(14.6)%
Total short-term borrowings	661,392		919,303		814,313		835,093		748,749		(28.1)%	(11.7)%
Long-term debt	48,241		52,656		59,693		60,163		60,780		(8.4)%	(20.6)%
Total borrowed funds	709,633		971,959		874,006		895,256		809,529		(27.0)%	(12.3)%
Accrued interest and other liabilities	68,369		74,581		90,780		92,097		88,016		(8.3)%	(22.3)%
Total Liabilities	6,433,744		6,579,557		5,839,913		5,807,742		5,735,052		(2.2)%	12.2%

SHAREHOLDERS' EQUITY
Common stock	574,643		574,209		574,206		573,243		577,076		0.1%	(0.4)%
Retained earnings	352,893		344,118		337,971		330,672		324,192		2.5%	8.9%
Accumulated other comprehensive loss	(21,409)		(20,888)		(21,569)		(27,648)		(31,281)		2.5%	(31.6)%
Treasury stock, at cost	(122,050)		(123,527)		(184,777)		(184,920)		(187,826)		(1.2)%	(35.0)%
Total Shareholders' Equity	784,077		773,912		705,831		691,347		682,161		1.3%	14.9%
Total Liabilities and Shareholders' Equity	$	7,217,821	$	7,353,469	$	6,545,744	$	6,499,089	$	6,417,213	(1.8)%	12.5%

(1) Covered loans of $135.7 million, $332.3 million, $365.6 million, $409.4 million, and $457.9 million as of December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013, respectively, have been reclassified into Loans due to the expiration of loss sharing coverage on non-single family assets effective October 1, 2014.

(2) Allowance for loan and lease losses covered and formerly covered under loss sharing agreements with the FDIC of $10.0 million, $11.5 million, $12.4 million, $10.6 million, and $18.9 million as of December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013, respectively, have been reclassified into allowance for loan and lease losses due to the expiration of loss sharing coverage on non-single family assets effective October 1, 2014.

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,		Dec. 31,
	2014		2014		2014		2014		2013		2014		2013
ASSETS
Cash and due from banks	$	124,216	$	125,528	$	118,947	$	123,583	$	110,246	$	123,077	$	115,486
Federal funds sold	0		8,795		0		0		0		2,217		0
Interest-bearing deposits with other banks	22,617		20,638		10,697		2,922		4,906		14,290		6,464
Investment securities	1,811,941		1,865,241		1,811,175		1,807,571		1,654,374		1,824,107		1,696,211
Loans held for sale	11,774		15,357		8,464		4,924		7,990		10,163		15,497
Loans ⁽¹⁾
Commercial	1,282,752		1,221,637		1,147,876		1,100,904		1,033,780		1,188,882		994,361
Real estate - construction	192,626		154,515		103,033		91,570		87,742		135,765		96,104
Real estate - commercial	2,158,336		1,927,003		1,733,739		1,743,976		1,783,654		1,891,998		1,835,806
Real estate - residential	493,895		475,510		441,383		434,595		434,476		461,547		429,601
Installment	49,356		49,958		48,538		51,048		53,601		49,721		58,159
Home equity	456,494		444,745		423,937		422,656		425,236		437,072		423,153
Credit card	38,966		38,381		37,649		37,068		37,327		38,022		36,538
Lease financing	74,175		76,485		80,455		80,097		76,335		77,783		66,317
Total loans	4,746,600		4,388,234		4,016,610		3,961,914		3,932,151		4,280,790		3,940,039
Less
Allowance for loan and lease losses⁽²⁾	54,656		55,697		55,149		61,902		68,264		56,828		84,033
Net loans	4,691,944		4,332,537		3,961,461		3,900,012		3,863,887		4,223,962		3,856,006
Premises and equipment	141,871		136,956		134,522		136,624		138,644		137,506		143,036
Goodwill	137,551		118,756		95,050		95,050		95,050		111,738		95,050
Other intangibles	8,321		7,138		5,445		5,723		6,075		6,665		6,666
FDIC indemnification asset	24,172		28,050		33,987		43,799		78,313		32,436		95,126
Accrued interest and other assets	267,462		278,287		274,504		279,027		273,486		274,798		251,869
Total Assets	$	7,241,869	$	6,937,283	$	6,454,252	$	6,399,235	$	6,232,971	$	6,760,959	$	6,281,411

LIABILITIES
Deposits
Interest-bearing demand	$	1,217,852	$	1,135,126	$	1,169,350	$	1,107,844	$	1,150,275	$	1,157,783	$	1,125,836
Savings	1,904,568		1,782,472		1,702,521		1,633,910		1,637,657		1,756,682		1,626,025
Time	1,250,109		1,123,657		960,424		953,423		932,877		1,072,858		986,085
Total interest-bearing deposits	4,372,529		4,041,255		3,832,295		3,695,177		3,720,809		3,987,323		3,737,946
Noninterest-bearing	1,290,754		1,179,207		1,110,697		1,096,509		1,129,097		1,169,851		1,078,800
Total deposits	5,663,283		5,220,462		4,942,992		4,791,686		4,849,906		5,157,174		4,816,746
Federal funds purchased and securities sold
under agreements to repurchase	119,712		125,094		123,682		110,533		107,738		119,795		115,486
FHLB short-term borrowings	564,062		710,879		562,466		671,579		414,892		627,181		472,062
Total short-term borrowings	683,774		835,973		686,148		782,112		522,630		746,976		587,548
Long-term debt	49,952		60,355		59,842		60,367		60,892		57,608		69,717
Total borrowed funds	733,726		896,328		745,990		842,479		583,522		804,584		657,265
Accrued interest and other liabilities	64,729		74,764		68,661		80,738		99,480		72,186		105,975
Total Liabilities	6,461,738		6,191,554		5,757,643		5,714,903		5,532,908		6,033,944		5,579,986

SHAREHOLDERS' EQUITY
Common stock	574,588		574,187		573,716		575,828		577,851		574,576		577,409
Retained earnings	347,435		340,680		332,944		324,875		337,034		336,557		331,817
Accumulated other comprehensive loss	(18,841)		(20,966)		(25,189)		(29,251)		(28,380)		(23,527)		(23,884)
Treasury stock, at cost	(123,051)		(148,172)		(184,862)		(187,120)		(186,442)		(160,591)		(183,917)
Total Shareholders' Equity	780,131		745,729		696,609		684,332		700,063		727,015		701,425
Total Liabilities and Shareholders' Equity	$	7,241,869	$	6,937,283	$	6,454,252	$	6,399,235	$	6,232,971	$	6,760,959	$	6,281,411

(1) Covered loans of $319.6 million, $350.9 million, $387.6 million, $434.5 million and $490.1 million for the three months ending December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013, respectively and $372.8 million and $609.8 million for the twelve months ended December 31, 2014 and December 31, 2013, respectively, have been reclassified into Loans due to the expiration of loss sharing coverage on non-single family assets effective October 1, 2014.

(2) Allowance for loan and lease losses covered and formerly covered under loss sharing agreements with the FDIC of $11.9 million, $13.1 million, $11.6 million, $17.6 million, and $21.7 million for the three months ending December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013, respectively and $13.5 and $35.1 for the twelve months ending December 31, 2014 and December 31, 2013, respectively, have been reclassified into allowance for loan and lease losses due to the expiration of loss sharing coverage on non-single family assets effective October 1, 2014.

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

	Quarterly Averages												Year-to-Date Averages
	Dec. 31, 2014				Sep. 30, 2014				Dec. 31, 2013				Dec. 31, 2014				Dec. 31, 2013
	Balance		Yield		Balance		Yield		Balance		Yield		Balance		Yield		Balance		Yield
Earning assets
Investments:
Investment securities	$	1,811,941	2.40	%	$	1,865,241	2.37	%	$	1,654,374	2.38	%	$	1,824,107	2.44	%	$	1,696,211	2.15	%
Interest-bearing deposits with other banks	22,617		0.30	%	29,433		0.42	%	4,906		0.57	%	16,507		0.42	%	6,464		0.42	%
Gross loans ⁽²⁾	4,782,546		4.63	%	4,431,641		4.68	%	4,018,454		4.93	%	4,323,389		4.70	%	4,050,662		5.15	%
Total earning assets	6,617,104		4.00	%	6,326,315		3.98	%	5,677,734		4.18	%	6,164,003		4.02	%	5,753,337		4.26	%

Nonearning assets
Allowance for loan and lease losses	(54,656)				(55,697)				(68,264)				(56,828)				(84,033)
Cash and due from banks	124,216				125,528				110,246				123,077				115,486
Accrued interest and other assets	555,205				541,137				513,255				530,707				496,621
Total assets	$	7,241,869			$	6,937,283			$	6,232,971			$	6,760,959			$	6,281,411

Interest-bearing liabilities
Deposits:
Interest-bearing demand	$	1,217,852	0.10	%	$	1,135,126	0.11	%	$	1,150,275	0.19	%	$	1,157,783	0.11	%	$	1,125,836	0.13	%
Savings	1,904,568		0.31	%	1,782,472		0.26	%	1,637,657		0.15	%	1,756,682		0.25	%	1,626,025		0.11	%
Time	1,250,109		1.02	%	1,123,657		0.97	%	932,877		0.90	%	1,072,858		0.98	%	986,085		1.01	%
Total interest-bearing deposits	4,372,529		0.45	%	4,041,255		0.41	%	3,720,809		0.35	%	3,987,323		0.41	%	3,737,946		0.35	%
Borrowed funds
Short-term borrowings	683,774		0.17	%	835,973		0.17	%	522,630		0.20	%	746,976		0.17	%	587,548		0.20	%
Long-term debt	49,952		2.45	%	60,355		3.00	%	60,892		3.51	%	57,608		3.15	%	69,717		3.53	%
Total borrowed funds	733,726		0.32	%	896,328		0.36	%	583,522		0.54	%	804,584		0.38	%	657,265		0.55	%
Total interest-bearing liabilities	5,106,255		0.44	%	4,937,583		0.40	%	4,304,331		0.37	%	4,791,907		0.40	%	4,395,211		0.38	%

Noninterest-bearing liabilities
Noninterest-bearing demand deposits	1,290,754				1,179,207				1,129,097				1,169,851				1,078,800
Other liabilities	64,729				74,764				99,480				72,186				105,975
Shareholders' equity	780,131				745,729				700,063				727,015				701,425
Total liabilities & shareholders' equity	$	7,241,869			$	6,937,283			$	6,232,971			$	6,760,959			$	6,281,411

Net interest income ⁽¹⁾	$	61,139			$	58,363			$	55,804			$	228,625			$	228,320
Net interest spread ⁽¹⁾			3.56	%			3.58	%			3.81	%			3.62	%			3.88	%
Net interest margin ⁽¹⁾			3.67	%			3.66	%			3.90	%			3.71	%			3.97	%


⁽¹⁾ Not tax equivalent.
⁽²⁾ Loans held for sale, nonaccrual loans, covered 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	$	167	$	(323)	$	(156)	$	83	$	954	$	1,037	$	4,818	$	3,119	$	7,937
Interest-bearing deposits with other banks	(9)		(5)		(14)		(3)		13		10		0		43		43
Gross loans ⁽²⁾	(560)		4,092		3,532		(3,051)		8,910		5,859		(18,154)		12,825		(5,329)
Total earning assets	(402)		3,764		3,362		(2,971)		9,877		6,906		(13,336)		15,987		2,651

Interest-bearing liabilities
Total interest-bearing deposits	$	415	$	380	$	795	$	1,019	$	747	$	1,766	$	1,896	$	1,010	$	2,906
Borrowed funds
Short-term borrowings	4		(65)		(61)		(33)		69		36		(180)		271		91
Long-term debt	(84)		(64)		(148)		(164)		(67)		(231)		(270)		(381)		(651)
Total borrowed funds	(80)		(129)		(209)		(197)		2		(195)		(450)		(110)		(560)
Total interest-bearing liabilities	335		251		586		822		749		1,571		1,446		900		2,346
Net interest income ⁽¹⁾	$	(737)	$	3,513	$	2,776	$	(3,793)	$	9,128	$	5,335	$	(14,782)	$	15,087	$	305


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

FIRST FINANCIAL BANCORP.
CREDIT QUALITY

(Dollars in thousands)
(Unaudited)

			Excluding covered assets*
	Dec. 31,		Sep. 30,		Jun. 30,		Mar 31,		Dec. 31,		Full Year		Full Year
	2014⁽²⁾		2014		2014		2014		2013		2014 ⁽²⁾		2013 ⁽³⁾
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY
Balance at beginning of period	$	42,454	$	42,027	$	43,023	$	43,829	$	45,514	$	43,829	$	47,777
Allowance for covered / formerly covered loans	11,535		*		*		*		*		11,535		*
Provision for uncovered loan and lease losses	1,088		1,093		29		1,159		1,851		3,369		8,714
Provision for covered / formerly covered loan and lease losses	964		*		*		*		*		964		*
Gross charge-offs
Commercial	130		83		571		656		293		1,440		3,415
Real estate - construction	0		0		0		0		1		0		1
Real estate - commercial	385		702		699		543		3,113		2,329		8,326
Real estate - residential	221		161		283		257		218		922		1,016
Installment	78		63		14		128		39		283		335
Home equity	349		469		383		544		706		1,745		2,409
Other	287		338		237		296		398		1,158		1,781
Covered / formerly covered loans	4,318		*		*		*		*		4,318		*
Total gross charge-offs	5,768		1,816		2,187		2,424		4,768		12,195		17,283
Recoveries
Commercial	75		566		580		39		194		1,260		672
Real estate - construction	0		0		0		0		46		0		672
Real estate - commercial	423		323		334		114		634		1,194		1,994
Real estate - residential	29		34		100		27		96		190		203
Installment	45		46		50		77		66		218		310
Home equity	45		46		37		103		136		231		508
Other	111		135		61		99		60		406		262
Covered / formerly covered loans	1,857		*		*		*		*		1,857		*
Total recoveries	2,585		1,150		1,162		459		1,232		5,356		4,621
Total net charge-offs	3,183		666		1,025		1,965		3,536		6,839		12,662
Ending allowance for loan and lease losses	$	52,858	$	42,454	$	42,027	$	43,023	$	43,829	$	52,858	$	43,829

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First Financial Bancorp Reports Fourth Quarter and Full Year 2014 Financial Results