First Financial Bancorp Reports Second Quarter 2015 Financial Results

Oak Street Acquisition Expected to be Immediately Accretive

Jul 30, 2015, 16:15 ET from First Financial Bancorp

CINCINNATI, July 30, 2015 /PRNewswire/ --

  • Net Income of $18.9 million
  • Earnings per Share of $0.31
  • Return on Average Assets of 1.05%
  • Return on Average Tangible Common Equity of 11.60%

First Financial Bancorp (Nasdaq: FFBC) ("First Financial" or the "Company") announced today financial and operational results for the second quarter 2015.  For the three months ended June 30, 2015, the Company recorded net income of $18.9 million, or $0.31 per diluted common share, compared to net income of $17.6 million, or $0.29 per diluted common share, in the first quarter of 2015 and $16.0 million, or $0.28 per diluted common share, in the second quarter of 2014.

Additionally, the Company announced that its board of directors has authorized a quarterly dividend of $0.16 per common share for the next regularly scheduled dividend, payable on October 1, 2015 to shareholders of record as of August 28, 2015.

The Company announced its pending acquisition of Indianapolis, Indiana based Oak Street Holdings Corporation ("Oak Street") for $110 million in cash on July 23, 2015.  A specialty lender providing commission-based financing to insurance agencies, Oak Street had total loans of $238 million as of June 30, 2015.  The acquisition of Oak Street is expected to close within 30 days and is expected to deliver operating earnings accretion of $0.16 - $0.20 per diluted common share and net interest margin expansion of more than 20 basis points in its first full year of operation as a subsidiary of First Financial Bank.

Claude Davis, Chief Executive Officer, commented, "I am very pleased with our second quarter results.  Our net income was 8% higher than the first quarter and 19% higher than the second quarter last year. Although net interest margin continues to be constrained by the prolonged low interest rate environment we are excited about the growth opportunities throughout our footprint.  We are especially encouraged by the growth of our loan portfolio which increased by 7.5%, on an annualized basis, during the second quarter."

"Demand for construction lending is especially strong in our markets.  We have funded approximately $48 million of the $156 million committed for new projects so far this year and expect to continue to see opportunities to finance high quality projects."

"Likewise, we are very excited about our recently announced acquisition of Oak Street and expect it to be immediately accretive to operating earnings.  The team at Oak Street has developed a very successful, high growth specialty lending platform that will be a nice strategic complement to our commercial and nationwide franchise lending businesses."

"Our ability to successfully grow low-cost deposits continues to provide competitive advantage as we compete for new business and will be especially advantageous to us with the addition and expansion of Oak Street's high-yielding loan portfolio."

"As we look forward to the rest of 2015 and beyond, our focus remains centered on serving the financial needs of our commercial, small business, consumer and wealth management clients."

NET INTEREST INCOME AND NET INTEREST MARGIN

Net interest income for the second quarter was $58.7 million as compared to $58.6 million for the first quarter 2015 and $54.3 million for the second quarter 2014.  Compared to the linked quarter, total interest income decreased $0.2 million, or 0.3%, while total interest expense decreased $0.3 million, or 4.6%.  Net interest margin was 3.62%, on a fully tax equivalent basis, for the second quarter compared to 3.67% for the first quarter 2015 and 3.76% for the second quarter 2014.

Interest income earned on loans increased $0.1 million compared to the prior quarter, as average loan balances increased $22.1 million during the period, which included one additional day.  The effective yield earned on the loan portfolio declined by 6 bps to 4.45% as the Company continued to originate predominately floating-rate loans which have a lower initial yield than comparable fixed-rate loans.

Interest income earned on investment securities decreased by $0.3 million compared to the prior quarter while average balances increased $20.2 million.  The effective yield earned on the investment portfolio decreased 13 bps to 2.34% as the Company continued to implement strategies in preparation for a rising interest rate environment and realized elevated prepayment activity during the quarter.

The decrease in total interest expense was due primarily to a $103.8 million decrease in average borrowed funds and a $39.4 million increase in average non-interest bearing deposits, partially offset by an $84.7 million increase in average interest-bearing deposits.  The effective cost of borrowed funds increased by 2 bps to 37 bps and the cost of interest-bearing deposits decreased 3 bps to 42 bps.

NON-INTEREST INCOME

The Company's non-interest income was $21.4 million for the second quarter of 2015 compared to $17.6 million for the first quarter of 2015 and $16.3 million for the second quarter of 2014.  The increase over the linked quarter was primarily related to a $2.0 million increase in accelerated discount related to covered / formerly covered loans, a $1.1 million increase in gain on sale of investment securities, a $0.7 million increase in FDIC loss sharing income and a $0.5 million increase in gain on sale of mortgage loans.  The increase in non-interest income related to covered / formerly covered loans was partially offset by a related $1.0 million increase in provision expense.

NON-INTEREST EXPENSE

The Company's non-interest expense was $48.8 million for the second quarter of 2015 compared to $48.1 million for the first quarter of 2015 and $47.1 million for the second quarter of 2014.  The $0.7 million increase over the linked quarter was primarily related to a $0.5 million increase in salaries & benefits and a $0.8 million increase in other expenses, partially offset by a $0.6 million decrease in occupancy related expenses.  Non-interest expenses for the quarter included $0.3 million related to a legal settlement.

BALANCE SHEET & CAPITAL

Total assets were $7.4 billion, total loans were $4.9 billion and investment securities were $1.8 billion as of June 30, 2015.  Total assets increased by $137.6 million, or 7.6% annualized, from the prior quarter and by $837.6 million, or 12.8%, over the prior year.  Total loans increased by $89.2 million, or 7.5% annualized, from the prior quarter and by $824.5 million, or 20.5%, over the prior year.  Investment securities increased by $16.0 million, or 3.6% annualized, from the prior quarter and decreased by $43.7 million, or 2.4%, over the prior year.

Total deposits were $5.7 billion as of June 30, 2015, essentially unchanged from the prior quarter and $840.7 million, or 17.2%, higher than a year ago.  Borrowed funds were $757.1 million as of June 30, 2015, compared to $639.2 million as of March 31, 2015 and $874.0 million as of June 30, 2014.

As of June 30, 2015, the Company had total shareholders' equity of $802.4 million, an increase of $6.6 million, or 3.3% annualized, over the prior quarter and $96.6 million, or 13.7%, over the prior year.

The Company's regulatory capital ratios remain strong and, as of June 30, 2015, were as follows:  leverage ratio of 9.77%, total capital ratio of 13.31%, tier 1 capital ratio of 12.35% and tangible common equity ratio of 9.08%.  The Company's tangible book value per share was $10.65 as of June 30, 2015.

ASSET QUALITY

Second quarter provision expense was $3.1 million and the total allowance for loan and lease losses as of June 30, 2015 was $52.9 million.  The allowance as a percentage of period-end loans was 1.09% at the end of the second quarter.  The balance of the Company's total allowance and loan marks, net of the indemnification asset, was 1.27% of total loans and leases as of June 30, 2015 which represents a 16 bps decline from 1.43% as of March 31, 2015 as the decrease in loan marks was coupled with the recognition of a higher level of accelerated discount due to payoffs in the covered / formerly covered portfolio, as well as higher loan balances during the period.

For the second quarter, net charge-offs totaled $3.3 million, an increase of $1.4 million, or 77.5% compared to the linked quarter, and were 27 bps as a percentage of loans on an annualized basis.  The increase in net charge-offs was due primarily to a single non-owner occupied commercial real estate charge-off of $1.7 million during the period related to a debt restructuring.  Nonaccrual loans decreased $9.5 million, or 19.3%, to $39.7 million as of June 30, 2015.  Total classified assets decreased $13.9 million, or 9.0%, to $139.9 million as of June 30, 2015, primarily due to a decrease in both commercial real estate and retail classified assets.

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 31, 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 10069484.  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 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.

About First Financial Bancorp

First Financial Bancorp is a Cincinnati, Ohio based bank holding company.  As of June 30, 2015, the Company had $7.4 billion in assets, $4.9 billion in loans, $5.7 billion in deposits and $802 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 June 30, 2015.  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, 2014, 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,

Six months ended,

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

June 30,

2015

2015

2014

2014

2014

2015

2014

RESULTS OF OPERATIONS

Net income

$

18,949

$

17,621

$

18,599

$

15,344

$

15,953

$

36,570

$

31,057

Net earnings per share - basic

$

0.31

$

0.29

$

0.31

$

0.26

$

0.28

$

0.60

$

0.54

Net earnings per share - diluted

$

0.31

$

0.29

$

0.30

$

0.26

$

0.28

$

0.59

$

0.54

Dividends declared per share

$

0.16

$

0.16

$

0.16

$

0.32

$

0.15

$

0.32

$

0.30

KEY FINANCIAL RATIOS

Return on average assets

1.05

%

0.99

%

1.02

%

0.88

%

0.99

%

1.02

%

0.97

%

Return on average shareholders' equity

9.49

%

9.06

%

9.46

%

8.16

%

9.19

%

9.28

%

9.07

%

Return on average tangible shareholders' equity

11.60

%

11.12

%

11.63

%

10.15

%

10.73

%

11.36

%

10.61

%

Net interest margin

3.56

%

3.61

%

3.67

%

3.66

%

3.70

%

3.58

%

3.76

%

Net interest margin (fully tax equivalent) (1)

3.62

%

3.67

%

3.72

%

3.71

%

3.76

%

3.64

%

3.81

%

Ending shareholders' equity as a percent of ending assets

10.87

%

10.98

%

10.86

%

10.52

%

10.78

%

10.87

%

10.78

%

Ending tangible shareholders' equity as a percent of:

Ending tangible assets

9.08

%

9.16

%

9.02

%

8.71

%

9.39

%

9.08

%

9.39

%

Risk-weighted assets

11.63

%

11.64

%

12.02

%

12.07

%

13.56

%

11.63

%

13.56

%

Average shareholders' equity as a percent of average assets

11.05

%

10.95

%

10.77

%

10.75

%

10.79

%

11.00

%

10.74

%

Average tangible shareholders' equity as a percent of

    average tangible assets

9.23

%

9.11

%

8.94

%

8.83

%

9.38

%

9.17

%

9.33

%

Book value per share

$

13.00

$

12.90

$

12.76

$

12.61

$

12.23

$13.00

$12.23

Tangible book value per share

$

10.65

$

10.54

$

10.38

$

10.23

$

10.49

$10.65

$10.49

Common equity tier 1 ratio (2)

12.34

%

12.29

%

12.69

%

12.74

%

14.34

%

12.34

%

14.34

%

Tier 1 ratio (2)

12.35

%

12.29

%

12.69

%

12.74

%

14.34

%

12.35

%

14.34

%

Total capital ratio (2)

13.31

%

13.27

%

13.71

%

13.80

%

15.59

%

13.31

%

15.59

%

Leverage ratio (2)

9.77

%

9.67

%

9.44

%

9.70

%

9.99

%

9.77

%

9.99

%

AVERAGE BALANCE SHEET ITEMS

Loans (3)

$

4,793,471

$

4,770,671

$

4,758,374

$

4,403,591

$

4,025,074

4,782,134

3,996,117

FDIC indemnification asset

20,744

22,112

24,172

28,050

33,987

21,424

38,866

Investment securities

1,782,785

1,762,622

1,811,941

1,865,241

1,811,175

1,772,759

1,809,383

Interest-bearing deposits with other banks

19,960

21,255

22,617

29,433

10,697

20,604

6,831

  Total earning assets

$

6,616,960

$

6,576,660

$

6,617,104

$

6,326,315

$

5,880,933

$

6,596,921

$

5,851,197

Total assets

$

7,243,886

$

7,201,313

$

7,241,869

$

6,937,283

$

6,454,252

$

7,222,717

$

6,426,895

Noninterest-bearing deposits

$

1,325,485

$

1,286,067

$

1,290,754

$

1,179,207

$

1,110,697

$

1,305,885

$

1,103,642

Interest-bearing deposits

4,446,248

4,361,525

4,372,529

4,041,255

3,832,295

4,404,121

3,764,115

  Total deposits

$

5,771,733

$

5,647,592

$

5,663,283

$

5,220,462

$

4,942,992

$

5,710,006

$

4,867,757

Borrowings

$

587,225

$

691,012

$

733,726

$

896,328

$

745,990

$

638,832

$

793,968

Shareholders' equity

$

800,598

$

788,511

$

780,131

$

745,729

$

696,609

$

794,588

$

690,504

CREDIT QUALITY RATIOS (4)

Allowance to ending loans

1.09

%

1.11

%

1.11

%

0.95

%

1.15

%

1.09

%

1.15

%

Allowance to nonaccrual loans

133.28

%

107.98

%

109.06

%

101.94

%

129.64

%

133.28

%

129.64

%

Allowance to nonperforming loans

88.49

%

82.18

%

82.08

%

77.17

%

93.34

%

88.49

%

93.34

%

Nonperforming loans to total loans

1.23

%

1.36

%

1.35

%

1.24

%

1.23

%

1.23

%

1.23

%

Nonperforming assets to ending loans, plus OREO

1.56

%

1.79

%

1.81

%

1.49

%

1.59

%

1.56

%

1.59

%

Nonperforming assets to total assets

1.03

%

1.18

%

1.21

%

0.90

%

0.89

%

1.03

%

0.89

%

Net charge-offs to average loans (annualized)

0.27

%

0.16

%

0.27

%

0.07

%

0.11

%

0.22

%

0.17

%

(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)

June 30, 2015 regulatory capital ratios are preliminary.

(3)

Includes loans held for sale.

(4)

Includes covered and previously covered assets for the three months ended June 30, 2015, March 31, 2015, and December 31, 2014 as FDIC loss sharing coverage expired for the majority of these assets effective October 1, 2014.

 

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,

2015

2014

% Change

2015

2014

% Change

Interest income

  Loans, including fees

$

54,586

$

48,877

11.7

%

$

109,050

$

98,024

11.2

%

  Investment securities

     Taxable

9,281

10,355

(10.4)

%

18,889

20,792

(9.2)

%

     Tax-exempt

1,139

796

43.1

%

2,256

1,606

40.5

%

        Total investment securities interest

10,420

11,151

(6.6)

%

21,145

22,398

(5.6)

%

  Other earning assets

(1,162)

(1,301)

(10.7)

%

(2,343)

(2,707)

(13.4)

%

       Total interest income

63,844

58,727

8.7

%

127,852

117,715

8.6

%

Interest expense

  Deposits

4,621

3,606

28.1

%

9,441

6,922

36.4

%

  Short-term borrowings

253

292

(13.4)

%

556

621

(10.5)

%

  Long-term borrowings

296

525

(43.6)

%

595

1,049

(43.3)

%

      Total interest expense

5,170

4,423

16.9

%

10,592

8,592

23.3

%

      Net interest income

58,674

54,304

8.0

%

117,260

109,123

7.5

%

  Provision for loan and lease losses

3,070

(384)

(899.5)

%

5,130

(1,417)

(462.0)

%

      Net interest income after provision for loan and lease losses

55,604

54,688

1.7

%

112,130

110,540

1.4

%

Noninterest income

  Service charges on deposit accounts

4,803

5,137

(6.5)

%

9,326

9,909

(5.9)

%

  Trust and wealth management fees

3,274

3,305

(0.9)

%

6,908

7,051

(2.0)

%

  Bankcard income

2,972

2,809

5.8

%

5,592

5,242

6.7

%

  Net gains from sales of loans

1,924

737

161.1

%

3,388

1,133

199.0

%

  Gain on sale of investment securities

1,094

0

100.0

%

1,094

50

2,088.0

%

  FDIC loss sharing income

(304)

1,108

127.4

%

(1,350)

600

(325.0)

%

  Accelerated discount on covered/formerly covered loans

4,094

621

559.3

%

6,186

1,636

278.1

%

  Other

3,558

2,620

35.8

%

7,884

4,891

61.2

%

      Total noninterest income

21,415

16,337

31.1

%

39,028

30,512

27.9

%

Noninterest expenses

  Salaries and employee benefits

27,451

25,615

7.2

%

54,392

50,876

6.9

%

  Net occupancy

4,380

4,505

(2.8)

%

9,385

9,804

(4.3)

%

  Furniture and equipment

2,219

1,983

11.9

%

4,372

4,060

7.7

%

  Data processing

2,657

2,770

(4.1)

%

5,429

5,628

(3.5)

%

  Marketing

973

830

17.2

%

1,861

1,616

15.2

%

  Communication

558

562

(0.7)

%

1,128

1,185

(4.8)

%

  Professional services

1,727

1,449

19.2

%

3,697

3,173

16.5

%

  State intangible tax

577

644

(10.4)

%

1,154

1,288

(10.4)

%

  FDIC assessments

1,114

1,074

3.7

%

2,204

2,208

(0.2)

%

  Loss (gain) - other real estate owned

419

711

(41.1)

%

893

1,162

(23.1)

%

  Loss sharing expense

576

1,465

(60.7)

%

877

3,034

(71.1)

%

  Other

6,135

5,503

11.5

%

11,462

10,919

5.0

%

      Total noninterest expenses

48,786

47,111

3.6

%

96,854

94,953

2.0

%

Income before income taxes

28,233

23,914

18.1

%

54,304

46,099

17.8

%

Income tax expense

9,284

7,961

16.6

%

17,734

15,042

17.9

%

      Net income

$

18,949

$

15,953

18.8

%

$

36,570

$

31,057

17.8

%

ADDITIONAL DATA

Net earnings per share - basic

$

0.31

$

0.28

$

0.60

$

0.54

Net earnings per share - diluted

$

0.31

$

0.28

$

0.59

$

0.54

Dividends declared per share

$

0.16

$

0.15

$

0.32

$

0.30

Return on average assets

1.05

%

0.99

%

1.02

%

0.97

%

Return on average shareholders' equity

9.49

%

9.19

%

9.28

%

9.07

%

Interest income

$

63,844

$

58,727

8.7

%

$

127,852

$

117,715

8.6

%

Tax equivalent adjustment

988

758

30.3

%

1,971

1,460

35.0

%

   Interest income - tax equivalent

64,832

59,485

9.0

%

129,823

119,175

8.9

%

Interest expense

5,170

4,423

16.9

%

10,592

8,592

23.3

%

   Net interest income - tax equivalent

$

59,662

$

55,062

8.4

%

$

119,231

$

110,583

7.8

%

Net interest margin

3.56

%

3.70

%

3.58

%

3.76

%

Net interest margin (fully tax equivalent) (1)

3.62

%

3.76

%

3.64

%

3.81

%

Full-time equivalent employees

1,366

1,296

(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)

2015

Second

First

% Change

Quarter

Quarter

YTD

Linked Qtr.

Interest income

  Loans, including fees

$

54,586

$

54,464

$

109,050

0.2

%

  Investment securities

     Taxable

9,281

9,608

18,889

(3.4)

%

     Tax-exempt

1,139

1,117

2,256

2.0

%

        Total investment securities interest

10,420

10,725

21,145

(2.8)

%

  Other earning assets

(1,162)

(1,181)

(2,343)

(1.6)

%

       Total interest income

63,844

64,008

127,852

(0.3)

%

Interest expense

  Deposits

4,621

4,820

9,441

(4.1)

%

  Short-term borrowings

253

303

556

(16.5)

%

  Long-term borrowings

296

299

595

(1.0)

%

      Total interest expense

5,170

5,422

10,592

(4.6)

%

      Net interest income

58,674

58,586

117,260

0.2

%

  Provision for loan and lease losses

3,070

2,060

5,130

49.0

%

      Net interest income after provision for loan and lease losses

55,604

56,526

112,130

(1.6)

%

Noninterest income

  Service charges on deposit accounts

4,803

4,523

9,326

6.2

%

  Trust and wealth management fees

3,274

3,634

6,908

(9.9)

%

  Bankcard income

2,972

2,620

5,592

13.4

%

  Net gains from sales of loans

1,924

1,464

3,388

31.4

%

  Gain on sale of investment securities

1,094

0

1,094

100.0

%

  FDIC loss sharing income

(304)

(1,046)

(1,350)

(70.9)

%

  Accelerated discount on covered/formerly covered loans

4,094

2,092

6,186

95.7

%

  Other

3,558

4,326

7,884

(17.8)

%

      Total noninterest income

21,415

17,613

39,028

21.6

%

Noninterest expenses

  Salaries and employee benefits

27,451

26,941

54,392

1.9

%

  Net occupancy

4,380

5,005

9,385

(12.5)

%

  Furniture and equipment

2,219

2,153

4,372

3.1

%

  Data processing

2,657

2,772

5,429

(4.1)

%

  Marketing

973

888

1,861

9.6

%

  Communication

558

570

1,128

(2.1)

%

  Professional services

1,727

1,970

3,697

(12.3)

%

  State intangible tax

577

577

1,154

0.0

%

  FDIC assessments

1,114

1,090

2,204

2.2

%

  Loss (gain) - other real estate owned

419

474

893

(11.6)

%

  Loss sharing expense

576

301

877

91.4

%

  Other

6,135

5,327

11,462

15.2

%

      Total noninterest expenses

48,786

48,068

96,854

1.5

%

Income before income taxes

28,233

26,071

54,304

8.3

%

Income tax expense

9,284

8,450

17,734

9.9

%

      Net income

$

18,949

$

17,621

$

36,570

7.5

%

ADDITIONAL DATA

Net earnings per share - basic

$

0.31

$

0.29

0.60

Net earnings per share - diluted

$

0.31

$

0.29

0.59

Dividends declared per share

$

0.16

$

0.16

$

0.32

Return on average assets

1.05

%

0.99

%

1.02

%

Return on average shareholders' equity

9.49

%

9.06

%

9.28

%

Interest income

$

63,844

$

64,008

$

127,852

(0.3)

%

Tax equivalent adjustment

988

983

1,971

0.5

%

   Interest income - tax equivalent

64,832

64,991

129,823

(0.2)

%

Interest expense

5,170

5,422

10,592

(4.6)

%

   Net interest income - tax equivalent

$

59,662

$

59,569

$

119,231

0.2

%

Net interest margin

3.56

%

3.61

%

3.58

%

Net interest margin (fully tax equivalent) (1)

3.62

%

3.67

%

3.64

%

Full-time equivalent employees

1.366

1,353

(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

Full

Quarter

Quarter

Quarter

Quarter

Year

Interest income

  Loans, including fees

$

57,087

$

53,725

$

48,877

$

49,147

$

208,836

  Investment securities

     Taxable

9,905

10,227

10,355

10,437

40,924

     Tax-exempt

1,060

894

796

810

3,560

        Total investment securities interest

10,965

11,121

11,151

11,247

44,484

  Other earning assets

(1,299)

(1,455)

(1,301)

(1,406)

(5,461)

       Total interest income

66,753

63,391

58,727

58,988

247,859

Interest expense

  Deposits

5,013

4,218

3,606

3,316

16,153

  Short-term borrowings

293

354

292

329

1,268

  Long-term borrowings

308

456

525

524

1,813

      Total interest expense

5,614

5,028

4,423

4,169

19,234

      Net interest income

61,139

58,363

54,304

54,819

228,625

  Provision for loan and lease losses

2,052

893

(384)

(1,033)

1,528

      Net interest income after provision for loan and lease losses

59,087

57,470

54,688

55,852

227,097

Noninterest income

  Service charges on deposit accounts

5,102

5,263

5,137

4,772

20,274

  Trust and wealth management fees

3,376

3,207

3,305

3,746

13,634

  Bankcard income

2,639

2,859

2,809

2,433

10,740

  Net gains from sales of loans

1,571

1,660

737

396

4,364

  Gain on sale of investment securities

20

0

0

50

70

  FDIC loss sharing income

(43)

(192)

1,108

(508)

365

  Accelerated discount on covered/formerly covered loans

1,759

789

621

1,015

4,184

  Other

2,518

2,925

2,620

2,271

10,334

      Total noninterest income

16,942

16,511

16,337

14,175

63,965

Noninterest expenses

  Salaries and employee benefits

28,140

28,686

25,615

25,261

107,702

  Net occupancy

4,806

4,577

4,505

5,299

19,187

  Furniture and equipment

2,229

2,265

1,983

2,077

8,554

  Data processing

2,942

4,393

2,770

2,858

12,963

  Marketing

1,048

939

830

786

3,603

  Communication

551

541

562

623

2,277

  Professional services

1,429

1,568

1,449

1,724

6,170

  State intangible tax

175

648

644

644

2,111

  FDIC assessments

1,128

1,126

1,074

1,134

4,462

  Loss (gain) - other real estate owned

289

(589)

711

451

862

  Loss sharing expense

650

1,002

1,465

1,569

4,686

  Other

6,275

6,263

5,503

5,416

23,457

      Total noninterest expenses

49,662

51,419

47,111

47,842

196,034

Income before income taxes

26,367

22,562

23,914

22,185

95,028

Income tax expense

7,768

7,218

7,961

7,081

30,028

      Net income

$

18,599

$

15,344

$

15,953

$

15,104

$

65,000

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

Tax equivalent adjustment

946

818

758

702

3,224

   Interest income - tax equivalent

67,699

64,209

59,485

59,690

251,083

Interest expense

5,614

5,028

4,423

4,169

19,234

   Net interest income - tax equivalent

$

62,085

$

59,181

$

55,062

$

55,521

$

231,849

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.

 

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

% Change

% Change

2015

2015

2014

2014

2014

Linked Qtr.

Comparable Qtr.

ASSETS

     Cash and due from banks

$

116,318

$

111,011

$

110,122

$

121,360

$

123,160

4.8

%

(5.6)

%

     Interest-bearing deposits with other banks

41,027

25,350

22,630

22,365

39,237

61.8

%

4.6

%

     Investment securities available-for-sale

955,764

892,169

840,468

929,594

897,715

7.1

%

6.5

%

     Investment securities held-to-maturity

791,839

839,666

867,996

900,521

899,502

(5.7)

%

(12.0)

%

     Other investments

53,585

53,393

52,626

49,986

47,640

0.4

%

12.5

%

     Loans held for sale

21,151

14,937

11,005

16,816

13,108

41.6

%

61.4

%

     Loans

       Commercial

1,315,087

1,298,874

1,315,114

1,328,526

1,171,181

1.2

%

12.3

%

       Real estate - construction

229,256

227,969

197,571

195,524

115,703

0.6

%

98.1

%

       Real estate - commercial

2,171,806

2,120,084

2,140,667

2,135,968

1,700,069

2.4

%

27.7

%

       Real estate - residential

506,391

496,852

501,894

498,873

447,561

1.9

%

13.1

%

       Installment

43,073

43,798

47,320

51,131

47,753

(1.7)

%

(9.8)

%

       Home equity

463,222

456,278

458,627

460,957

426,846

1.5

%

8.5

%

       Credit card

39,216

37,886

38,475

38,042

37,937

3.5

%

3.4

%

       Lease financing

84,723

81,796

77,567

73,216

81,212

3.6

%

4.3

%

          Total loans

4,852,774

4,763,537

4,777,235

4,782,237

4,028,262

1.9

%

20.5

%

       Less

          Allowance for loan and lease losses

52,876

53,076

52,858

53,989

54,452

(0.4)

%

(2.9)

%

                Net loans

4,799,898

4,710,461

4,724,377

4,728,248

3,973,810

1.9

%

20.8

%

     Premises and equipment

139,170

140,477

141,381

141,851

133,418

(0.9)

%

4.3

%

     Goodwill

137,739

137,739

137,739

137,458

95,050

0.0

%

44.9

%

     Other intangibles

7,726

7,847

8,114

8,542

5,344

(1.5)

%

44.6

%

     FDIC indemnification asset

20,338

20,397

22,666

24,160

30,420

(0.3)

%

(33.1)

%

     Accrued interest and other assets

298,817

292,349

278,697

272,568

287,340

2.2

%

4.0

%

       Total Assets

$

7,383,372

$

7,245,796

$

7,217,821

$

7,353,469

$

6,545,744

1.9

%

12.8

%

LIABILITIES

     Deposits

       Interest-bearing demand

$

1,175,219

$

1,214,882

$

1,225,378

$

1,214,726

$

1,105,031

(3.3)

%

6.4

%

       Savings

1,947,566

1,922,815

1,889,473

1,827,590

1,656,798

1.3

%

17.5

%

       Time

1,262,881

1,277,291

1,255,364

1,247,334

973,100

(1.1)

%

29.8

%

          Total interest-bearing deposits

4,385,666

4,414,988

4,370,215

4,289,650

3,734,929

(0.7)

%

17.4

%

       Noninterest-bearing

1,330,149

1,299,602

1,285,527

1,243,367

1,140,198

2.4

%

16.7

%

          Total deposits

5,715,815

5,714,590

5,655,742

5,533,017

4,875,127

0.0

%

17.2

%

     Federal funds purchased and securities sold

         under agreements to repurchase

68,349

68,142

103,192

113,303

128,013

0.3

%

(46.6)

%

     FHLB short-term borrowings

641,700

523,500

558,200

806,000

686,300

22.6

%

(6.5)

%

          Total short-term borrowings

710,049

591,642

661,392

919,303

814,313

20.0

%

(12.8)

%

     Long-term debt

47,084

47,598

48,241

52,656

59,693

(1.1)

%

(21.1)

%

          Total borrowed funds

757,133

639,240

709,633

971,959

874,006

18.4

%

(13.4)

%

     Accrued interest and other liabilities

108,041

96,224

68,369

74,581

90,780

12.3

%

19.0

%

       Total Liabilities

6,580,989

6,450,054

6,433,744

6,579,557

5,839,913

2.0

%

12.7

%

SHAREHOLDERS' EQUITY

     Common stock

571,501

570,623

574,643

574,209

574,206

0.2

%

(0.5)

%

     Retained earnings

369,462

360,390

352,893

344,118

337,971

2.5

%

9.3

%

     Accumulated other comprehensive loss

(20,715)

(17,054)

(21,409)

(20,888)

(21,569)

21.5

%

(4.0)

%

     Treasury stock, at cost

(117,865)

(118,217)

(122,050)

(123,527)

(184,777)

(0.3)

%

(36.2)

%

       Total Shareholders' Equity

802,383

795,742

784,077

773,912

705,831

0.8

%

13.7

%

       Total Liabilities and Shareholders' Equity

$

7,383,372

$

7,245,796

$

7,217,821

$

7,353,469

$

6,545,744

1.9

%

12.8

%

 

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,

2015

2015

2014

2014

2014

2015

2014

ASSETS

     Cash and due from banks

$

114,024

$

112,841

$

124,216

$

125,528

$

118,947

$

113,436

$

121,252

     Federal funds sold

0

0

0

8,795

0

0

0

     Interest-bearing deposits with other banks

19,960

21,255

22,617

20,638

10,697

20,604

6,831

     Investment securities

1,782,785

1,762,622

1,811,941

1,865,241

1,811,175

1,772,759

1,809,383

     Loans held for sale

9,292

8,606

11,774

15,357

8,464

8,951

6,704

     Loans

       Commercial

1,318,408

1,300,869

1,282,752

1,221,637

1,147,876

1,309,687

1,124,520

       Real estate - construction

226,314

215,380

192,626

154,515

103,033

220,877

97,333

       Real estate - commercial

2,117,450

2,129,434

2,158,336

1,927,003

1,733,739

2,123,409

1,738,829

       Real estate - residential

497,350

496,451

493,895

475,510

441,383

496,903

438,008

       Installment

43,393

45,376

49,356

49,958

48,538

44,379

49,786

       Home equity

459,414

458,083

456,494

444,745

423,937

458,752

423,300

       Credit card

39,272

38,409

38,966

38,381

37,649

38,843

37,360

       Lease financing

82,578

78,063

74,175

76,485

80,455

80,333

80,277

          Total loans

4,784,179

4,762,065

4,746,600

4,388,234

4,016,610

4,773,183

3,989,413

       Less

          Allowance for loan and lease losses

54,662

53,648

54,656

55,697

55,149

54,158

58,507

                Net loans

4,729,517

4,708,417

4,691,944

4,332,537

3,961,461

4,719,025

3,930,906

     Premises and equipment

140,117

141,153

141,871

136,956

134,522

140,632

135,567

     Goodwill

137,739

137,739

137,551

118,756

95,050

137,739

95,050

     Other intangibles

7,761

7,950

8,321

7,138

5,445

7,855

5,583

     FDIC indemnification asset

20,744

22,112

24,172

28,050

33,987

21,424

38,866

     Accrued interest and other assets

281,947

278,618

267,462

278,287

274,504

280,292

276,753

       Total Assets

$

7,243,886

$

7,201,313

$

7,241,869

$

6,937,283

$

6,454,252

$

7,222,717

$

6,426,895

LIABILITIES

     Deposits

       Interest-bearing demand

$

1,220,391

$

1,176,263

$

1,217,852

$

1,135,126

$

1,169,350

$

1,198,449

$

1,138,767

       Savings

1,950,127

1,914,723

1,904,568

1,782,472

1,702,521

1,932,523

1,668,405

       Time

1,275,730

1,270,539

1,250,109

1,123,657

960,424

1,273,149

956,943

          Total interest-bearing deposits

4,446,248

4,361,525

4,372,529

4,041,255

3,832,295

4,404,121

3,764,115

       Noninterest-bearing

1,325,485

1,286,067

1,290,754

1,179,207

1,110,697

1,305,885

1,103,642

          Total deposits

5,771,733

5,647,592

5,663,283

5,220,462

4,942,992

5,710,006

4,867,757

     Federal funds purchased and securities sold

          under agreements to repurchase

67,664

77,269

119,712

125,094

123,682

72,440

117,144

     FHLB short-term borrowings

472,295

565,918

564,062

710,879

562,466

518,848

616,721

          Total short-term borrowings

539,959

643,187

683,774

835,973

686,148

591,288

733,865

     Long-term debt

47,266

47,825

49,952

60,355

59,842

47,544

60,103

       Total borrowed funds

587,225

691,012

733,726

896,328

745,990

638,832

793,968

     Accrued interest and other liabilities

84,330

74,198

64,729

74,764

68,661

79,291

74,666

       Total Liabilities

6,443,288

6,412,802

6,461,738

6,191,554

5,757,643

6,428,129

5,736,391

SHAREHOLDERS' EQUITY

     Common stock

571,078

573,932

574,588

574,190

573,716

572,497

574,766

     Retained earnings

365,847

355,848

347,435

340,680

332,944

360,875

328,932

     Accumulated other comprehensive loss

(18,242)

(20,163)

(18,841)

(20,969)

(25,189)

(19,197)

(27,209)

     Treasury stock, at cost

(118,085)

(121,106)

(123,051)

(148,172)

(184,862)

(119,587)

(185,985)

       Total Shareholders' Equity

800,598

788,511

780,131

745,729

696,609

794,588

690,504

       Total Liabilities and Shareholders' Equity

$

7,243,886

$

7,201,313

$

7,241,869

$

6,937,283

$

6,454,252

$

7,222,717

$

6,426,895

 

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS (1)

(Dollars in thousands)

(Unaudited)

 Quarterly Averages

Year-to-Date Averages

June 30, 2015

March 31, 2015

June 30, 2014

June 30, 2015

June 30, 2014

Balance

Yield

Balance

Yield

Balance

Yield

Balance

Yield

Balance

Yield

Earning assets

    Investments:

      Investment securities

$

1,782,785

2.34

%

$

1,762,622

2.47

%

$

1,811,175

2.47

%

$

1,772,759

2.41

%

$

1,809,383

2.50

%

      Interest-bearing deposits with other banks

19,960

0.26

%

21,255

0.27

%

10,697

0.45

%

20,604

0.26

%

6,831

0.65

%

    Gross loans (2)

4,814,215

4.45

%

4,792,783

4.51

%

4,059,061

4.70

%

4,803,558

4.48

%

4,034,983

4.76

%

       Total earning assets

6,616,960

3.87

%

6,576,660

3.95

%

5,880,933

4.01

%

6,596,921

3.91

%

5,851,197

4.06

%

Nonearning assets

    Allowance for loan and lease losses

(54,662)

(53,648)

(55,149)

(54,158)

(58,507)

    Cash and due from banks

114,024

112,841

118,947

113,436

121,252

    Accrued interest and other assets

567,564

565,460

509,521

566,518

512,953

       Total assets

$

7,243,886

$

7,201,313

$

6,454,252

$

7,222,717

$

6,426,895

Interest-bearing liabilities

    Deposits:

      Interest-bearing demand

$

1,220,391

0.08

%

$

1,176,263

0.08

%

$

1,169,350

0.11

%

$

1,198,449

0.08

%

$

1,138,767

0.11

%

      Savings

1,950,127

0.19

%

1,914,723

0.27

%

1,702,521

0.23

%

1,932,523

0.23

%

1,668,405

0.21

%

      Time

1,275,730

1.08

%

1,270,539

1.07

%

960,424

0.98

%

1,273,149

1.08

%

956,943

0.96

%

    Total interest-bearing deposits

4,446,248

0.42

%

4,361,525

0.45

%

3,832,295

0.38

%

4,404,121

0.43

%

3,764,115

0.37

%

    Borrowed funds

      Short-term borrowings

539,959

0.19

%

643,187

0.19

%

686,148

0.17

%

591,288

0.19

%

733,865

0.17

%

      Long-term debt

47,266

2.51

%

47,825

2.54

%

59,842

3.52

%

47,544

2.52

%

60,103

3.52

%

        Total borrowed funds

587,225

0.37

%

691,012

0.35

%

745,990

0.44

%

638,832

0.36

%

793,968

0.42

%

       Total interest-bearing liabilities

5,033,473

0.41

%

5,052,537

0.44

%

4,578,285

0.39

%

5,042,953

0.42

%

4,558,083

0.38

%

Noninterest-bearing liabilities

    Noninterest-bearing demand deposits

1,325,485

1,286,067

1,110,697

1,305,885

1,103,642

    Other liabilities

84,330

74,198

68,661

79,291

74,666

    Shareholders' equity

800,598

788,511

696,609

794,588

690,504

       Total liabilities & shareholders' equity

$

7,243,886

$

7,201,313

$

6,454,252

$

7,222,717

$

6,426,895

Net interest income (1)

$

58,674

$

58,586

$

54,304

$

117,260

$

109,123

Net interest spread (1)

3.46

%

3.51

%

3.62

%

3.49

%

3.68

%

Net interest margin (1)

3.56

%

3.61

%

3.70

%

3.58

%

3.76

%

(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

$

(536)

$

231

$

(305)

$

(565)

$

(166)

$

(731)

$

(1,646)

$

(881)

$

(2,527)

    Interest-bearing deposits with other banks

0

(1)

(1)

(5)

6

1

(26)

36

10

    Gross loans (2)

(680)

822

142

(2,531)

8,378

5,847

(11,462)

34,421

22,959

       Total earning assets

(1,216)

1,052

(164)

(3,101)

8,218

5,117

(13,134)

33,576

20,442

Interest-bearing liabilities

    Total interest-bearing deposits

$

(337)

$

138

$

(199)

$

377

$

638

$

1,015

$

2,313

$

2,767

$

5,080

    Borrowed funds

    Short-term borrowings

(5)

(45)

(50)

29

(68)

(39)

139

(270)

(131)

    Long-term debt

(3)

0

(3)

(150)

(79)

(229)

(599)

(317)

(916)

       Total borrowed funds

(8)

(45)

(53)

(121)

(147)

(268)

(460)

(587)

(1,047)

       Total interest-bearing liabilities

(345)

93

(252)

256

491

747

1,853

2,180

4,033

          Net interest income (1)

$

(871)

$

959

$

88

$

(3,357)

$

7,727

$

4,370

$

(14,987)

$

31,396

$

16,409

(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)

Excludes covered

assets*

Six months ended

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Jun. 30,

Jun. 30,

2015 (2)

2015 (2)

2014 (2)

2014

2014

2015 (2)

2014 (3)

ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY

Balance at beginning of period

$

53,076

$

52,858

$

53,989

$

42,027

$

43,023

$

52,858

$

43,829

  Provision for loan and lease losses

3,070

2,060

2,052

1,093

29

5,130

1,188

  Gross charge-offs

    Commercial

510

1,481

130

83

571

1,991

1,227

    Real estate - construction

0

0

0

0

0

0

0

    Real estate - commercial

2,515

208

385

702

699

2,723

1,242

    Real estate - residential

250

314

221

161

283

564

540

    Installment

12

131

78

63

14

143

142

    Home equity

163

700

349

469

383

863

927

    Other

237

294

287

338

237

531

533

    Covered / formerly covered loans

1,585

1,916

4,318

*

*

3,501

*

      Total gross charge-offs

5,272

5,044

5,768

1,816

2,187

10,316

4,611

  Recoveries

    Commercial

185

44

75

566

580

229

619

    Real estate - construction

10

29

0

0

0

39

0

    Real estate - commercial

179

354

423

323

334

533

448

    Real estate - residential

23

64

29

34

100

87

127

    Installment

44

60

45

46

50

104

127

    Home equity

129

154

45

46

37

283

140

    Other

71

45

111

135

61

116

160

    Covered / formerly covered loans

1,361

2,452

1,857

*

*

3,813

*

      Total recoveries

2,002

3,202

2,585

1,150

1,162

5,204

1,621

  Total net charge-offs

3,270

1,842

3,183

666

1,025

5,112

2,990

Ending allowance for loan and lease losses

$

52,876

$

53,076

$

52,858

$

42,454

$

42,027

$

52,876

$

42,027

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

  Commercial

0.10

%

0.45

%

0.02

%

(0.16)%

0.00

%

0.27

%

0.11

%

  Real estate - construction

(0.02)%

(0.05)%

0.00

%

0.00

%

0.00

%

(0.04)%

0.00

%

  Real estate - commercial

0.48

%

(0.03)%

(0.01)%

0.09

%

0.10

%

0.22

%

0.11

%

  Real estate - residential

0.21

%

0.24

%

0.18

%

0.13

%

0.20

%

0.22

%

0.23

%

  Installment

(0.32)%

0.68

%

0.28

%

0.15

%

(0.33)%

0.19

%

0.07

%

  Home equity

0.03

%

0.53

%

0.29

%

0.42

%

0.37

%

0.28

%

0.42

%

  Other

0.55

%

0.88

%

0.63

%

0.72

%

0.61

%

0.71

%

0.65

%

  Covered/formerly covered loans

0.33

%

(0.74)%

3.06

%

*

*

(0.22)%

*

     Total net charge-offs

0.27

%

0.16

%

0.27

%

0.07

%

0.11

%

0.22

%

0.17

%

COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS

  Nonaccrual loans (1)

    Commercial

$

6,683

$

6,926

$

5,817

$

6,486

$

7,077

$

6,683

$

7,077

    Real estate - construction

223

223

223

223

223

223

223

    Real estate - commercial

21,186

29,925

27,752

25,262

15,288

21,186

15,288

    Real estate - residential

5,257

6,100

7,241

6,696

6,806

5,257

6,806

    Installment

305

278

443

398

459

305

459

    Home equity

2,735

2,462

3,064

2,581

2,565

2,735

2,565

    Lease financing

0

0

0

0

0

0

0

   Covered /formerly covered loans

3,284

3,239

3,929

*

*

3,284

*

      Nonaccrual loans

39,673

49,153

48,469

41,646

32,418

39,673

32,418

  Accruing troubled debt restructurings (TDRs)

20,084

15,429

15,928

13,369

12,607

20,084

12,607

     Total nonperforming loans

59,757

64,582

64,397

55,015

45,025

59,757

45,025

  Other real estate owned (OREO)

16,401

20,906

22,674

11,316

13,370

16,401

13,370

     Total nonperforming assets

76,158

85,488

87,071

66,331

58,395

76,158

58,395

  Accruing loans past due 90 days or more

70

85

216

249

256

70

256

     Total underperforming assets

$

76,228

$

85,573

$

87,287

$

66,580

$

58,651

$

76,228

$

58,651

  Classified assets

$

106,280

$

109,090

$

109,122

$

105,914

$

103,799

$

106,280

$

103,799

  Covered/formerly covered classified assets

33,651

44,727

45,682

*

*

33,651

*

Total classified assets

$

139,931

$

153,817

$

154,804

$

105,914

$

103,799

$

139,931

$

103,799

CREDIT QUALITY RATIOS

Allowance for loan and lease losses to

     Nonaccrual loans

133.28

%

107.98

%

109.06

%

101.94

%

129.64

%

133.28

%

129.64

%

     Nonperforming loans

88.49

%

82.18

%

82.08

%

77.17

%

93.34

%

88.49

%

93.34

%

     Total ending loans

1.09

%

1.11

%

1.11

%

0.95

%

1.15

%

1.09

%

1.15

%

Allowance and loan marks, net of indemnification asset, to total loans

1.27

%

1.43

%

1.51

%

*

*

1.27

%

*

Nonperforming loans to total loans

1.23

%

1.36

%

1.35

%

1.24

%

1.23

%

1.23

%

1.23

%

Nonperforming assets to

     Ending loans, plus OREO

1.56

%

1.79

%

1.81

%

1.49

%

1.59

%

1.56

%

1.59

%

     Total assets

1.03

%

1.18

%

1.21

%

0.90

%

0.89

%

1.03

%

0.89

%

Nonperforming assets, excluding accruing TDRs to

     Ending loans, plus OREO

1.15

%

1.46

%

1.48

%

1.19

%

1.25

%

1.15

%

1.25

%

     Total assets

0.76

%

0.97

%

0.99

%

0.72

%

0.70

%

0.76

%

0.70

%

(1) Nonaccrual loans include nonaccrual TDRs of $14.3 million, $20.3 million, $12.3 million, $13.2 million, and $11.0 million, as of June 30. 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.

(2) Includes covered and previously covered assets for the three months ended June 30, 2015, March 31, 2015 and December 31, 2014 as FDIC loss sharing coverage expired for the majority of these assets effective October 1, 2014.

(3) Excludes covered assets.

* 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.

 

FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands, except per share data)

(Unaudited)

Six months ended,

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Jun. 30,

Jun. 30,

2015

2015

2014

2014

2014

2015

2014

PER COMMON SHARE

Market Price

  High

$

18.55

$

18.30

$

19.00

$

17.66

$

18.43

$

18.55

$

18.43

  Low

$

16.68

$

16.52

$

15.34

$

15.83

$

15.51

$

16.52

$

15.51

  Close

$

17.94

$

17.81

$

18.59

$

15.83

$

17.21

$

17.94

$

17.21

Average shares outstanding - basic

61,115,802

61,013,489

60,905,095

59,403,109

57,201,494

61,064,928

57,146,853

Average shares outstanding - diluted

61,915,294

61,731,844

61,627,518

60,112,932

57,951,636

61,824,106

57,890,268

Ending shares outstanding

61,707,847

61,686,887

61,456,547

61,368,473

57,718,317

61,707,847

57,718,317

Total shareholders' equity

$

802,383

$

795,742

$

784,077

$

773,912

$

705,831

$

802,383

$

705,831

REGULATORY CAPITAL (1)

Preliminary

Preliminary

Common equity tier 1 capital

$

697,139

$

686,191

$

673,851

$

662,504

$

640,133

$

697,139

$

640,133

Common equity tier 1 capital ratio

12.34

%

12.29

%

12.69

%

12.74

%

14.34

%

12.34

%

14.34

%

Tier 1 capital

$

697,243

$

686,295

$

673,955

$

662,608

$

640,237

$

697,243

$

640,237

Tier 1 ratio

12.35

%

12.29

%

12.69

%

12.74

%

14.34

%

12.35

%

14.34

%

Total capital

$

751,818

$

740,967

$

728,284

$

717,823

$

696,014

$

751,818

$

696,014

Total capital ratio

13.31

%

13.27

%

13.71

%

13.80

%

15.59

%

13.31

%

15.59

%

Total capital in excess of minimum

  requirement

$

300,006

$

294,290

$

303,358

$

301,653

$

338,848

$

300,006

$

338,848

Total risk-weighted assets

$

5,647,658

$

5,583,461

$

5,311,573

$

5,202,123

$

4,464,578

$

5,647,658

$

4,464,578

Leverage ratio

9.77

%

9.67

%

9.44

%

9.70

%

9.99

%

9.77

%

9.99

%

OTHER CAPITAL RATIOS

Ending shareholders' equity to ending assets

10.87

%

10.98

%

10.86

%

10.52

%

10.78

%

10.87

%

10.78

%

Ending tangible shareholders' equity to ending tangible assets

9.08

%

9.16

%

9.02

%

8.71

%

9.39

%

9.08

%

9.39

%

Average shareholders' equity to average assets

11.05

%

10.95

%

10.77

%

10.75

%

10.79

%

11.00

%

10.74

%

Average tangible shareholders' equity to average tangible assets

9.23

%

9.11

%

8.94

%

8.83

%

9.38

%

9.17

%

9.33

%

REPURCHASE PROGRAM (2)

Shares repurchased

0

0

0

0

0

0

40,255

Average share repurchase price

N/A

N/A

N/A

N/A

N/A

N/A

$

17.32

Total cost of shares repurchased

N/A

N/A

N/A

N/A

N/A

N/A

$

697

(1) 2015 amounts and ratios are calculated under the Basel III standardized approach

(2) Represents share repurchases as part of publicly announced plans.

N/A = Not applicable

 

SOURCE First Financial Bancorp



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