First Financial Bancorp Announces Fourth Quarter and Full Year 2020 Financial Results and Quarterly Dividend

Rhea-AI Summary

First Financial Bancorp (FFBC) reported net income of $48.3 million, or $0.49 per diluted share, for Q4 2020, up from $41.5 million in Q3 2020. Adjusted earnings were $0.51 per share. The return on average assets was 1.20%, with a net interest margin of 3.49%. Noninterest income reached $61.5 million, bolstered by foreign exchange fees and mortgage production. The company announced a quarterly dividend of $0.23 per share. However, full-year earnings per share decreased from $2.00 in 2019 to $1.59 in 2020, reflecting challenges posed by the pandemic.

Positive

• Net income of $48.3 million for Q4 2020, up from $41.5 million in Q3 2020.
• Adjusted earnings per diluted share of $0.51.
• Strong noninterest income driven by foreign exchange fees ($12.3 million) and mortgage production.
• Return on average tangible common equity of 15.94% (adjusted).
• Quarterly dividend of $0.23 per share.
• Record foreign exchange income, 16.9% increase from prior quarter.

Negative

• Full-year EPS dropped to $1.59 from $2.00 in 2019.
• Provision expense of $11.5 million due to COVID-19 uncertainty, increasing allowance for credit losses to 1.89% of total loans.

CINCINNATI, Jan. 28, 2021 /PRNewswire/ --  

• Earnings per diluted share of $0.49; $0.51 on an adjusted⁽¹⁾ basis
• Return on average assets of 1.20%; 1.23% as adjusted⁽¹⁾
• Net interest margin FTE⁽¹⁾ of 3.49%; 13 basis point increase from linked quarter
• Strong noninterest income driven by foreign exchange fees and mortgage production
• Announces $0.23 per share Quarterly Dividend 

First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and twelve months ended December 31, 2020. 

For the three months ended December 31, 2020, the Company reported net income of $48.3 million, or $0.49 per diluted common share.  These results compare to net income of $41.5 million, or $0.42 per diluted common share, for the third quarter of 2020 and $48.7 million, or $0.49 per diluted common share, for the fourth quarter of 2019.  For the twelve months ended December 31,  2020, First Financial had earnings per diluted common share of $1.59 compared to $2.00 for the same period in 2019.

Return on average assets for the fourth quarter of 2020 was 1.20% while return on average tangible common equity was 15.50%.  These compare to returns on average assets of 1.04% and 1.34%, and returns on average tangible common equity of 13.61% and 15.84%, in the third quarter of 2020 and the fourth quarter of 2019, respectively.

Fourth quarter 2020 highlights include:

• After adjustments⁽¹⁾ for certain nonrecurring and certain COVID-19 related items:
• Net income of $0.51 per diluted common share
• 1.23% return on average assets
• 15.94% return on average tangible common equity
• Net interest margin of 3.49% on a fully tax-equivalent basis⁽¹⁾
• 13 basis point increase driven by loan fees, which includes PPP forgiveness, and lower deposit costs
• Noninterest income of $61.5 million, or $48.1 million as adjusted⁽¹⁾
• Adjustments⁽¹⁾ include $13.4 million in gain recognized on class B Visa shares
• Record foreign exchange income of $12.3 million; 16.9% increase from linked quarter
• Mortgage income remains strong, despite decline from record third quarter production
• Noninterest expenses of $114.8 million, or $94.6 million as adjusted⁽¹⁾
• Adjustments⁽¹⁾ include:
• $7.3 million of debt extinguishment costs
• $5.1 million write down of a tax credit investment
• $5.0 million contribution to First Financial Foundation
• $2.9 million of costs directly related to COVID-19 and other nonrecurring costs such as merger-related and branch consolidation costs
• Efficiency ratio of 63.8%; 56.8% as adjusted⁽¹⁾

_________________________________________________________________________________________

(1)

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

• Non-PPP loan balances were flat during the quarter
• Average transactional deposit balances grew $533.8 million compared to the linked quarter; 22.2% on an annualized basis
• Total Allowance for Credit Losses of $188.2 million; Total quarterly provision for credit losses of $11.5 million
• Loans and leases - ACL of $175.7 million, 1.77% of total loans; 1.89% of loans excluding PPP
• Unfunded Commitments - ACL of $12.5 million
• Fourth quarter provision expense driven by COVID-19 uncertainty, partially offset by improvements in economic forecast, resulting in expected peak ACL as a percentage of loans
• Strong capital ratios
• Total capital of 15.55%
• Tier 1 common equity of 11.82%
• Tangible common equity of 8.47%; 8.83% excluding PPP loans 
• Tangible book value per share of $12.93; $0.37 increase compared to linked quarter

Additionally, First Financial's board of directors has authorized a quarterly dividend of $0.23 per common share for the next regularly scheduled dividend, payable on March 15, 2021 to shareholders of record as of March 1, 2021.

Archie Brown, President and Chief Executive Officer, remarked, "When considering a year in which we encountered a global pandemic, experienced widespread government mandated business shutdowns and stay-at-home orders, and a reduction in the Fed Funds rate of 150 basis points, I am very pleased with our response to these challenges and our overall management of the company.  On an adjusted⁽¹⁾ basis, we earned $1.66 per diluted share, achieved a 1.05% return on average assets, strengthened Tier 1 Common Equity and Total Capital, significantly bolstered our allowance for credit losses from 0.63% of loans to 1.77%, and experienced low levels of charge-offs."

Mr. Brown continued, "Business conditions remained difficult in the fourth quarter; however, our core quarterly financial metrics were strong with adjusted⁽¹⁾ earnings per share of $0.51, adjusted⁽¹⁾ return on assets of 1.23%, and an adjusted⁽¹⁾ efficiency ratio of 56.8%.  An increase in interest income, which includes PPP loan forgiveness fees, strong mortgage banking and record foreign exchange income drove our solid quarterly results.  Our sub-60% efficiency ratio reflected our diligent expense management despite adapting to a remote working environment and continued investment in processes and technologies that position the Company for long-term success.  Credit trends remain relatively stable; however, with COVID-19 cases in the Midwest remaining at peak levels, a slower than anticipated vaccine rollout and general economic uncertainty, we recorded $11.5 million of provision expense, resulting in an increase in our allowance for credit losses to 1.89% of total loans, excluding PPP.  We believe the increase in our allowance has positioned us to absorb future losses anticipated by the pandemic or otherwise." 

Mr. Brown concluded, "I am most pleased by the response of our associates and their commitment to our clients and communities.  They demonstrated amazing flexibility and resilience in pivoting from normal business activities and processes to working remotely or with significant changes to their in-office routines.  From the beginning of the pandemic, we prioritized keeping our associates safe and engaged, which enabled them to support our clients in one of the most stressful and uncertain periods in our history.  Our associates were constant stewards, embodying our organizational belief that banking is an essential function in the lives of consumers, businesses and our communities and were focused on ensuring that we remained faithful to our mission.  Notably, our corporate-wide effort in granting approximately 7,000 PPP loans totaling over $900 million in a matter of months was something to remember.  I am very proud of the effort and commitment of our First Financial Team."

Full detail of the Company's fourth quarter and full year 2020 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, January 29, 2021 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 10151308.  The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

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

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

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

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements.  Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements.  Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:

• economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business;
• future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses
• the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry;
• Management's ability to effectively execute its business plans;
• mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;
• the possibility that any of the anticipated benefits of the Company's acquisitions will not be realized or will not be realized within the expected time period;
• the effect of changes in accounting policies and practices;
• changes in consumer spending, borrowing and saving and changes in unemployment;
• changes in customers' performance and creditworthiness;
• the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
• current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth;
• the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impact of a slowing U.S. economy and increased unemployment on the performance of our loan and lease portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products;
• our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
• financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
• the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
• the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses;
• a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;
• the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and
• our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2019, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov. 

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

About First Financial Bancorp.

First Financial Bancorp. is a Cincinnati, Ohio based bank holding company.  As of December 31, 2020, the Company had $16.0 billion in assets, $9.9 billion in loans, $12.2 billion in deposits and $2.3 billion in shareholders' equity.  The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management.  These business units provide traditional banking services to business and retail clients.  Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.0 billion in assets under management as of December 31, 2020.  The Company operated 143 full service banking centers as of December 31, 2020, primarily in Ohio, Indiana and Kentucky, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis.  Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.

 

FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)
	Three Months Ended,																				Twelve months ended,
	Dec. 31,				Sep. 30,				June 30,				Mar. 31,				Dec. 31,				December 31,
	2020				2020				2020				2020				2019				2020				2019
RESULTS OF OPERATIONS
Net income	$	48,312			$	41,477			$	37,393			$	28,628			$	48,677			$	155,810			$	198,075
Net earnings per share - basic	$	0.50			$	0.43			$	0.38			$	0.29			$	0.49			$	1.60			$	2.01
Net earnings per share - diluted	$	0.49			$	0.42			$	0.38			$	0.29			$	0.49			$	1.59			$	2.00
Dividends declared per share	$	0.23			$	0.23			$	0.23			$	0.23			$	0.23			$	0.92			$	0.90
KEY FINANCIAL RATIOS
Return on average assets	1.20		%		1.04		%		0.96		%		0.79		%		1.34		%		1.00		%		1.39		%
Return on average shareholders' equity	8.52		%		7.40		%		6.88		%		5.21		%		8.60		%		7.02		%		9.11		%
Return on average tangible shareholders' equity	15.50		%		13.61		%		12.90		%		9.71		%		15.84		%		12.97		%		16.32		%
Net interest margin	3.45		%		3.32		%		3.38		%		3.71		%		3.84		%		3.46		%		3.95		%
Net interest margin (fully tax equivalent) (1)	3.49		%		3.36		%		3.44		%		3.77		%		3.89		%		3.51		%		4.00		%
Ending shareholders' equity as a percent of ending assets	14.29		%		14.11		%		13.99		%		14.47		%		15.49		%		14.29		%		15.49		%
Ending tangible shareholders' equity as a percent of:
Ending tangible assets	8.47		%		8.25		%		8.09		%		8.25		%		9.07		%		8.47		%		9.07		%
Risk-weighted assets	11.29		%		11.07		%		10.89		%		10.50		%		11.09		%		11.29		%		11.09		%
Average shareholders' equity as a percent of average assets	14.07		%		14.08		%		13.91		%		15.21		%		15.53		%		14.30		%		15.30		%
Average tangible shareholders' equity as a percent of
average tangible assets	8.26		%		8.18		%		7.94		%		8.79		%		9.07		%		8.28		%		9.16		%
Book value per share	$	23.28			$	22.94			$	22.66			$	22.25			$	22.82			$	23.28			$	22.82
Tangible book value per share	$	12.93			$	12.56			$	12.26			$	11.82			$	12.42			$	12.93			$	12.42
Common equity tier 1 ratio (2)	11.82		%		11.63		%		11.49		%		11.27		%		11.30		%		11.82		%		11.30		%
Tier 1 ratio (2)	12.20		%		12.02		%		11.87		%		11.66		%		11.69		%		12.20		%		11.69		%
Total capital ratio (2)	15.55		%		15.37		%		15.19		%		13.54		%		13.39		%		15.55		%		13.39		%
Leverage ratio (2)	9.55		%		9.55		%		8.98		%		9.49		%		9.58		%		9.55		%		9.58		%
AVERAGE BALANCE SHEET ITEMS
Loans (3)	$	10,127,881			$	10,253,392			$	10,002,379			$	9,220,643			$	9,149,222			$	9,902,656			$	8,948,535
Investment securities	3,403,839				3,162,832				3,164,243				3,115,723				3,102,867				3,212,051				3,288,875
Interest-bearing deposits with other banks	143,884				40,277				91,990				39,332				36,672				78,943				35,814
Total earning assets	$	13,675,604			$	13,456,501			$	13,258,612			$	12,375,698			$	12,288,761			$	13,193,650			$	12,273,224
Total assets	$	16,030,986			$	15,842,010			$	15,710,204			$	14,524,422			$	14,460,288			$	15,529,144			$	14,210,719
Noninterest-bearing deposits	$	3,720,417			$	3,535,432			$	3,335,866			$	2,643,240			$	2,638,908			$	3,310,483			$	2,524,011
Interest-bearing deposits	8,204,306				8,027,082				8,395,229				7,590,791				7,583,531				8,054,687				7,577,347
Total deposits	$	11,924,723			$	11,562,514			$	11,731,095			$	10,234,031			$	10,222,439			$	11,365,170			$	10,101,358
Borrowings	$	1,307,461			$	1,519,748			$	1,272,819			$	1,735,767			$	1,613,696			$	1,458,701			$	1,669,059
Shareholders' equity	$	2,256,062			$	2,230,422			$	2,185,865			$	2,209,733			$	2,245,107			$	2,220,645			$	2,174,679
CREDIT QUALITY RATIOS
Allowance to ending loans	1.77		%		1.65		%		1.56		%		1.55		%		0.63		%		1.77		%		0.63		%
Allowance to nonaccrual loans	217.55		%		216.28		%		233.74		%		296.51		%		119.69		%		217.55		%		119.69		%
Allowance to nonperforming loans	199.97		%		196.69		%		208.06		%		203.42		%		96.73		%		199.97		%		96.73		%
Nonperforming loans to total loans	0.89		%		0.84		%		0.75		%		0.76		%		0.65		%		0.89		%		0.65		%
Nonperforming assets to ending loans, plus OREO	0.90		%		0.86		%		0.77		%		0.78		%		0.67		%		0.90		%		0.67		%
Nonperforming assets to total assets	0.56		%		0.55		%		0.49		%		0.48		%		0.42		%		0.56		%		0.42		%
Classified assets to total assets	0.89		%		0.84		%		0.79		%		0.83		%		0.62		%		0.89		%		0.62		%
Net charge-offs to average loans (annualized)	0.26		%		0.21		%		0.12		%		(0.04)		%		0.15		%		0.14		%		0.33		%

(1)	The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis.  Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.
(2)	December 31, 2020 regulatory capital ratios are preliminary.
(3)	Includes loans held for sale.

 

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
	Three months ended,											Twelve months ended,
	December 31,											December 31,
	2020				2019				% Change			2020				2019				% Change
Interest income
Loans and leases, including fees	$	106,733			$	122,802			(13.1)	%		$	431,657			$	499,009			(13.5)	%
Investment securities
Taxable	18,402				20,137				(8.6)	%		73,789				90,168				(18.2)	%
Tax-exempt	4,839				4,545				6.5	%		19,242				17,596				9.4	%
Total investment securities interest	23,241				24,682				(5.8)	%		93,031				107,764				(13.7)	%
Other earning assets	55				167				(67.1)	%		275				805				(65.8)	%
Total interest income	130,029				147,651				(11.9)	%		524,963				607,578				(13.6)	%
Interest expense
Deposits	5,920				19,026				(68.9)	%		41,922				79,032				(47.0)	%
Short-term borrowings	30				5,430				(99.4)	%		6,442				25,235				(74.5)	%
Long-term borrowings	5,606				4,293				30.6	%		20,088				19,057				5.4	%
Total interest expense	11,556				28,749				(59.8)	%		68,452				123,324				(44.5)	%
Net interest income	118,473				118,902				(0.4)	%		456,511				484,254				(5.7)	%
Provision for credit losses-loans and leases (1)	13,758				4,629				197.2	%		70,796				30,598				131.4	%
Provision for credit losses-unfunded commitments (1)	(2,250)				177				N/M			(237)				(165)				43.6	%
Net interest income after provision for credit losses	106,965				114,096				(6.3)	%		385,952				453,821				(15.0)	%
Noninterest income
Service charges on deposit accounts	7,654				9,343				(18.1)	%		29,446				37,939				(22.4)	%
Trust and wealth management fees	4,093				3,913				4.6	%		16,531				15,644				5.7	%
Bankcard income	3,060				3,405				(10.1)	%		11,726				18,804				(37.6)	%
Client derivative fees	2,021				4,194				(51.8)	%		10,313				15,662				(34.2)	%
Foreign exchange income	12,305				6,014				104.6	%		39,377				7,739				408.8	%
Net gains from sales of loans	13,089				4,723				177.1	%		51,176				14,851				244.6	%
Net gains (losses) on sale of investment securities	4,618				(296)				N/M			4,563				(406)				N/M
Other	14,675				5,472				168.2	%		25,991				21,140				22.9	%
Total noninterest income	61,515				36,768				67.3	%		189,123				131,373				44.0	%
Noninterest expenses
Salaries and employee benefits	62,263				53,952				15.4	%		236,779				209,061				13.3	%
Net occupancy	6,159				6,334				(2.8)	%		23,266				24,069				(3.3)	%
Furniture and equipment	3,596				4,145				(13.2)	%		14,968				15,903				(5.9)	%
Data processing	7,269				5,996				21.2	%		27,514				21,881				25.7	%
Marketing	1,999				1,980				1.0	%		6,414				6,908				(7.2)	%
Communication	840				882				(4.8)	%		3,492				3,267				6.9	%
Professional services	3,038				2,192				38.6	%		9,961				11,254				(11.5)	%
Debt extinguishment	7,257				0				N/M			7,257				0				N/M
State intangible tax	1,514				1,767				(14.3)	%		6,058				5,829				3.9	%
FDIC assessments	1,065				1,055				0.9	%		5,110				1,973				159.0	%
Intangible amortization	2,764				3,150				(12.3)	%		11,126				9,671				15.0	%
Other	17,034				11,434				49.0	%		38,719				32,516				19.1	%
Total noninterest expenses	114,798				92,887				23.6	%		390,664				342,332				14.1	%
Income before income taxes	53,682				57,977				(7.4)	%		184,411				242,862				(24.1)	%
Income tax expense	5,370				9,300				(42.3)	%		28,601				44,787				(36.1)	%
Net income	$	48,312			$	48,677			(0.7)	%		$	155,810			$	198,075			(21.3)	%
ADDITIONAL DATA
Net earnings per share - basic	$	0.50			$	0.49						$	1.60			$	2.01
Net earnings per share - diluted	$	0.49			$	0.49						$	1.59			$	2.00
Dividends declared per share	$	0.23			$	0.23						$	0.92			$	0.90
Return on average assets	1.20		%		1.34		%					1.00		%		1.39		%
Return on average shareholders' equity	8.52		%		8.60		%					7.02		%		9.11		%
Interest income	$	130,029			$	147,651			(11.9)	%		$	524,963			$	607,578			(13.6)	%
Tax equivalent adjustment	1,613				1,630				(1.0)	%		6,529				6,328				3.2	%
Interest income - tax equivalent	131,642				149,281				(11.8)	%		531,492				613,906				(13.4)	%
Interest expense	11,556				28,749				(59.8)	%		68,452				123,324				(44.5)	%
Net interest income - tax equivalent	$	120,086			$	120,532			(0.4)	%		$	463,040			$	490,582			(5.6)	%
Net interest margin	3.45		%		3.84		%					3.46		%		3.95		%
Net interest margin (fully tax equivalent) (2)	3.49		%		3.89		%					3.51		%		4.00		%
Full-time equivalent employees	2,075				2,065

(1)

Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

(2)

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

 

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
	2020
	Fourth				Third				Second				First				Year to				% Change
	Quarter				Quarter				Quarter				Quarter				Date				Linked Qtr.
Interest income
Loans and leases, including fees	$	106,733			$	103,249			$	105,900			$	115,775			$	431,657			3.4	%
Investment securities
Taxable	18,402				17,906				18,476				19,005				73,789				2.8	%
Tax-exempt	4,839				4,884				4,937				4,582				19,242				(0.9)	%
Total investment securities interest	23,241				22,790				23,413				23,587				93,031				2.0	%
Other earning assets	55				31				47				142				275				77.4	%
Total interest income	130,029				126,070				129,360				139,504				524,963				3.1	%
Interest expense
Deposits	5,920				7,886				11,751				16,365				41,922				(24.9)	%
Short-term borrowings	30				51				1,274				5,087				6,442				(41.2)	%
Long-term borrowings	5,606				5,953				4,759				3,770				20,088				(5.8)	%
Total interest expense	11,556				13,890				17,784				25,222				68,452				(16.8)	%
Net interest income	118,473				112,180				111,576				114,282				456,511				5.6	%
Provision for credit losses-loans and leases (1)	13,758				15,299				17,859				23,880				70,796				(10.1)	%
Provision for credit losses-unfunded commitments (1)	(2,250)				(1,925)				2,370				1,568				(237)				16.9	%
Net interest income after provision for credit losses	106,965				98,806				91,347				88,834				385,952				8.3	%
Noninterest income
Service charges on deposit accounts	7,654				7,356				6,001				8,435				29,446				4.1	%
Trust and wealth management fees	4,093				3,855				4,114				4,469				16,531				6.2	%
Bankcard income	3,060				3,124				2,844				2,698				11,726				(2.0)	%
Client derivative fees	2,021				2,203				2,984				3,105				10,313				(8.3)	%
Foreign exchange income	12,305				10,530				6,576				9,966				39,377				16.9	%
Net gains from sales of loans	13,089				18,594				16,662				2,831				51,176				(29.6)	%
Net gains (losses) on sale of investment securities	4,618				2				2				(59)				4,563				N/M
Other	14,675				3,835				3,542				3,939				25,991				282.7	%
Total noninterest income	61,515				49,499				42,725				35,384				189,123				24.3	%
Noninterest expenses
Salaries and employee benefits	62,263				63,769				55,925				54,822				236,779				(2.4)	%
Net occupancy	6,159				5,625				5,378				6,104				23,266				9.5	%
Furniture and equipment	3,596				3,638				3,681				4,053				14,968				(1.2)	%
Data processing	7,269				6,837				7,019				6,389				27,514				6.3	%
Marketing	1,999				1,856				1,339				1,220				6,414				7.7	%
Communication	840				855				907				890				3,492				(1.8)	%
Professional services	3,038				2,443				2,205				2,275				9,961				24.4	%
Debt extinguishment	7,257				0				0				0				7,257				N/M
State intangible tax	1,514				1,514				1,514				1,516				6,058				0.0	%
FDIC assessments	1,065				1,350				1,290				1,405				5,110				(21.1)	%
Intangible amortization	2,764				2,779				2,791				2,792				11,126				(0.5)	%
Other	17,034				6,845				6,640				8,200				38,719				148.9	%
Total noninterest expenses	114,798				97,511				88,689				89,666				390,664				17.7	%
Income before income taxes	53,682				50,794				45,383				34,552				184,411				5.7	%
Income tax expense	5,370				9,317				7,990				5,924				28,601				(42.4)	%
Net income	$	48,312			$	41,477			$	37,393			$	28,628			$	155,810			16.5	%
ADDITIONAL DATA
Net earnings per share - basic	$	0.50			$	0.43			$	0.38			$	0.29			$	1.60
Net earnings per share - diluted	$	0.49			$	0.42			$	0.38			$	0.29			$	1.59
Dividends declared per share	$	0.23			$	0.23			$	0.23			$	0.23			$	0.92
Return on average assets	1.20		%		1.04		%		0.96		%		0.79		%		1.00		%
Return on average shareholders' equity	8.52		%		7.40		%		6.88		%		5.21		%		7.02		%
Interest income	$	130,029			$	126,070			$	129,360			$	139,504			$	524,963			3.1	%
Tax equivalent adjustment	1,613				1,628				1,664				1,624				6,529				(0.9)	%
Interest income - tax equivalent	131,642				127,698				131,024				141,128				531,492				3.1	%
Interest expense	11,556				13,890				17,784				25,222				68,452				(16.8)	%
Net interest income - tax equivalent	$	120,086			$	113,808			$	113,240			$	115,906			$	463,040			5.5	%
Net interest margin	3.45		%		3.32		%		3.38		%		3.71		%		3.46		%
Net interest margin (fully tax equivalent) (2)	3.49		%		3.36		%		3.44		%		3.77		%		3.51		%
Full-time equivalent employees	2,075				2,065				2,076				2,067

(1)

Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

(2)

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

 

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
	2019
	Fourth				Third				Second				First				Full
	Quarter				Quarter				Quarter				Quarter				Year
Interest income
Loans and leases, including fees	$	122,802			$	126,786			$	126,365			$	123,056			$	499,009
Investment securities
Taxable	20,137				22,180				23,616				24,235				90,168
Tax-exempt	4,545				4,457				4,336				4,258				17,596
Total investment securities interest	24,682				26,637				27,952				28,493				107,764
Other earning assets	167				222				206				210				805
Total interest income	147,651				153,645				154,523				151,759				607,578
Interest expense
Deposits	19,026				20,151				20,612				19,243				79,032
Short-term borrowings	5,430				7,199				6,646				5,960				25,235
Long-term borrowings	4,293				4,760				4,963				5,041				19,057
Total interest expense	28,749				32,110				32,221				30,244				123,324
Net interest income	118,902				121,535				122,302				121,515				484,254
Provision for credit losses-loans and leases (1)	4,629				5,228				6,658				14,083				30,598
Provision for credit losses-unfunded commitments (1)	177				(216)				(132)				6				(165)
Net interest income after provision for credit losses	114,096				116,523				115,776				107,426				453,821
Noninterest income
Service charges on deposit accounts	9,343				9,874				9,819				8,903				37,939
Trust and wealth management fees	3,913				3,718				3,943				4,070				15,644
Bankcard income	3,405				3,316				6,497				5,586				18,804
Client derivative fees	4,194				4,859				4,905				1,704				15,662
Foreign exchange income	6,014				1,708				17				0				7,739
Net gains from sales of loans	4,723				4,806				3,432				1,890				14,851
Net gains on sale of investment securities	(296)				105				(37)				(178)				(406)
Other	5,472				4,754				6,062				4,852				21,140
Total noninterest income	36,768				33,140				34,638				26,827				131,373
Noninterest expenses
Salaries and employee benefits	53,952				53,212				53,985				47,912				209,061
Net occupancy	6,334				5,509				5,596				6,630				24,069
Furniture and equipment	4,145				4,120				4,222				3,416				15,903
Data processing	5,996				5,774				4,984				5,127				21,881
Marketing	1,980				1,346				1,976				1,606				6,908
Communication	882				910				747				728				3,267
Professional services	2,192				4,771				2,039				2,252				11,254
State intangible tax	1,767				1,445				1,307				1,310				5,829
FDIC assessments	1,055				(1,097)				1,065				950				1,973
Intangible amortization	3,150				2,432				2,044				2,045				9,671
Other	11,434				8,020				6,545				6,517				32,516
Total noninterest expenses	92,887				86,442				84,510				78,493				342,332
Income before income taxes	57,977				63,221				65,904				55,760				242,862
Income tax expense (benefit)	9,300				12,365				13,201				9,921				44,787
Net income	$	48,677			$	50,856			$	52,703			$	45,839			$	198,075
ADDITIONAL DATA
Net earnings per share - basic	$	0.49			$	0.52			$	0.54			$	0.47			$	2.01
Net earnings per share - diluted	$	0.49			$	0.51			$	0.53			$	0.47			$	2.00
Dividends declared per share	$	0.23			$	0.23			$	0.22			$	0.22			$	0.90
Return on average assets	1.34		%		1.41		%		1.50		%		1.33		%		1.39		%
Return on average shareholders' equity	8.60		%		9.13		%		9.85		%		8.88		%		9.11		%
Interest income	$	147,651			$	153,645			$	154,523			$	151,759			$	607,578
Tax equivalent adjustment	1,630				1,759				1,416				1,523				6,328
Interest income - tax equivalent	149,281				155,404				155,939				153,282				613,906
Interest expense	28,749				32,110				32,221				30,244				123,324
Net interest income - tax equivalent	$	120,532			$	123,294			$	123,718			$	123,038			$	490,582
Net interest margin	3.84		%		3.91		%		3.99		%		4.05		%		3.95		%
Net interest margin (fully tax equivalent) (2)	3.89		%		3.96		%		4.04		%		4.10		%		4.00		%
Full-time equivalent employees	2,065				2,064				2,076				2,087

(1)

Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

(2)

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

 

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
	Dec. 31,				Sep. 30,				June 30,				Mar. 31,				Dec. 31,				% Change			% Change
	2020				2020				2020				2020				2019				Linked Qtr.			Comp Qtr.
ASSETS
Cash and due from banks	$	231,054			$	207,128			$	283,639			$	261,892			$	200,691			11.6	%		15.1	%
Interest-bearing deposits with other banks	20,305				38,806				38,845				71,071				56,948				(47.7)	%		(64.3)	%
Investment securities available-for-sale	3,424,580				3,004,963				2,897,413				2,908,688				2,852,084				14.0	%		20.1	%
Investment securities held-to-maturity	131,687				118,072				127,347				136,744				142,862				11.5	%		(7.8)	%
Other investments	133,198				118,292				132,366				143,581				125,020				12.6	%		6.5	%
Loans held for sale	41,103				69,008				43,950				27,334				13,680				(40.4)	%		200.5	%
Loans and leases
Commercial and industrial	3,007,509				3,292,313				3,322,374				2,477,773				2,465,877				(8.7)	%		22.0	%
Lease financing	72,987				74,742				80,087				82,602				88,364				(2.3)	%		(17.4)	%
Construction real estate	636,096				575,648				506,085				500,311				493,182				10.5	%		29.0	%
Commercial real estate	4,307,858				4,347,125				4,343,702				4,278,257				4,194,651				(0.9)	%		2.7	%
Residential real estate	1,003,086				1,027,702				1,043,745				1,061,792				1,055,949				(2.4)	%		(5.0)	%
Home equity	743,099				754,743				764,171				781,243				771,869				(1.5)	%		(3.7)	%
Installment	81,850				84,629				79,150				80,085				82,589				(3.3)	%		(0.9)	%
Credit card	48,485				43,907				42,397				45,756				49,184				10.4	%		(1.4)	%
Total loans	9,900,970				10,200,809				10,181,711				9,307,819				9,201,665				(2.9)	%		7.6	%
Less:
Allowance for credit losses (1)	175,679				168,544				158,661				143,885				57,650				4.2	%		204.7	%
Net loans	9,725,291				10,032,265				10,023,050				9,163,934				9,144,015				(3.1)	%		6.4	%
Premises and equipment	207,211				209,474				211,164				212,787				214,506				(1.1)	%		(3.4)	%
Goodwill	937,771				937,771				937,771				937,771				937,771				0.0	%		0.0	%
Other intangibles	64,552				67,419				70,325				73,258				76,201				(4.3)	%		(15.3)	%
Accrued interest and other assets	1,056,382				1,122,449				1,105,020				1,120,507				747,847				(5.9)	%		41.3	%
Total Assets	$	15,973,134			$	15,925,647			$	15,870,890			$	15,057,567			$	14,511,625			0.3	%		10.1	%
LIABILITIES
Deposits
Interest-bearing demand	$	2,914,787			$	2,632,467			$	2,657,841			$	2,498,109			$	2,364,881			10.7	%		23.3	%
Savings	3,680,774				3,446,678				3,287,314				2,978,250				2,960,979				6.8	%		24.3	%
Time	1,872,733				1,935,392				2,241,212				2,435,858				2,240,441				(3.2)	%		(16.4)	%
Total interest-bearing deposits	8,468,294				8,014,537				8,186,367				7,912,217				7,566,301				5.7	%		11.9	%
Noninterest-bearing	3,763,709				3,552,893				3,515,048				2,723,341				2,643,928				5.9	%		42.4	%
Total deposits	12,232,003				11,567,430				11,701,415				10,635,558				10,210,229				5.7	%		19.8	%
Federal funds purchased and securities sold
under agreements to repurchase	166,594				247,658				154,347				215,824				165,181				(32.7)	%		0.9	%
FHLB short-term borrowings	0				0				0				1,181,900				1,151,000				0.0	%		(100.0)	%
Total short-term borrowings	166,594				247,658				154,347				1,397,724				1,316,181				(32.7)	%		(87.3)	%
Long-term debt	776,202				1,341,164				1,285,767				325,566				414,376				(42.1)	%		87.3	%
Total borrowed funds	942,796				1,588,822				1,440,114				1,723,290				1,730,557				(40.7)	%		(45.5)	%
Accrued interest and other liabilities	516,265				521,580				508,342				519,336				323,134				(1.0)	%		59.8	%
Total Liabilities	13,691,064				13,677,832				13,649,871				12,878,184				12,263,920				0.1	%		11.6	%
SHAREHOLDERS' EQUITY
Common stock	1,638,947				1,637,489				1,635,070				1,633,950				1,640,771				0.1	%		(0.1)	%
Retained earnings	720,429				694,484				675,532				660,653				711,249				3.7	%		1.3	%
Accumulated other comprehensive income (loss)	48,664				42,266				36,431				11,788				13,323				15.1	%		265.3	%
Treasury stock, at cost	(125,970)				(126,424)				(126,014)				(127,008)				(117,638)				(0.4)	%		7.1	%
Total Shareholders' Equity	2,282,070				2,247,815				2,221,019				2,179,383				2,247,705				1.5	%		1.5	%
Total Liabilities and Shareholders' Equity	$	15,973,134			$	15,925,647			$	15,870,890			$	15,057,567			$	14,511,625			0.3	%		10.1	%
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

 

FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
	Quarterly Averages																				Year-to-Date Averages
	Dec. 31,				Sep. 30,				June 30,				Mar. 31,				Dec. 31,				Dec. 31,
	2020				2020				2020				2020				2019				2020				2019
ASSETS
Cash and due from banks	$	228,427			$	233,216			$	284,726			$	235,696			$	221,060			$	245,436			$	191,864
Interest-bearing deposits with other banks	143,884				40,277				91,990				39,332				36,672				78,943				35,814
Investment securities	3,403,839				3,162,832				3,164,243				3,115,723				3,102,867				3,212,051				3,288,875
Loans held for sale	42,402				45,186				36,592				13,174				21,050				34,390				14,774
Loans and leases
Commercial and industrial	3,182,749				3,299,259				3,058,677				2,450,893				2,469,810				2,999,223				2,505,615
Lease financing	74,107				78,500				81,218				85,782				91,225				79,882				92,902
Construction real estate	608,401				536,870				495,407				501,471				501,892				535,740				491,503
Commercial real estate	4,313,408				4,364,708				4,381,647				4,209,345				4,102,288				4,317,396				3,906,992
Residential real estate	1,022,701				1,041,250				1,052,996				1,055,456				1,053,707				1,043,040				1,010,620
Home equity	752,425				759,994				772,424				773,082				773,119				764,436				787,716
Installment	83,509				82,016				79,016				81,234				85,515				81,451				88,815
Credit card	48,179				45,609				44,402				50,206				50,616				47,098				49,598
Total loans	10,085,479				10,208,206				9,965,787				9,207,469				9,128,172				9,868,266				8,933,761
Less:
Allowance for credit losses (1)	172,201				165,270				155,454				121,126				56,649				153,596				58,504
Net loans	9,913,278				10,042,936				9,810,333				9,086,343				9,071,523				9,714,670				8,875,257
Premises and equipment	208,800				211,454				213,903				215,545				215,171				212,413				213,951
Goodwill	937,771				937,771				937,771				937,771				937,710				937,771				899,131
Other intangibles	66,195				69,169				72,086				75,014				78,190				70,600				51,884
Accrued interest and other assets	1,086,390				1,099,169				1,098,560				805,824				776,045				1,022,870				639,169
Total Assets	$	16,030,986			$	15,842,010			$	15,710,204			$	14,524,422			$	14,460,288			$	15,529,144			$	14,210,719
LIABILITIES
Deposits
Interest-bearing demand	$	2,812,748			$	2,668,635			$	2,602,917			$	2,418,193			$	2,373,962			$	2,626,252			$	2,326,193
Savings	3,547,179				3,342,514				3,173,274				2,976,518				2,995,395				3,260,882				3,027,725
Time	1,844,379				2,015,933				2,619,038				2,196,080				2,214,174				2,167,553				2,223,429
Total interest-bearing deposits	8,204,306				8,027,082				8,395,229				7,590,791				7,583,531				8,054,687				7,577,347
Noninterest-bearing	3,720,417				3,535,432				3,335,866				2,643,240				2,638,908				3,310,483				2,524,011
Total deposits	11,924,723				11,562,514				11,731,095				10,234,031				10,222,439				11,365,170				10,101,358
Federal funds purchased and securities sold
under agreements to repurchase	136,795				150,088				145,291				164,093				206,800				149,036				155,859
FHLB short-term borrowings	7,937				30,868				548,183				1,189,765				952,625				441,867				990,860
Total short-term borrowings	144,732				180,956				693,474				1,353,858				1,159,425				590,903				1,146,719
Long-term debt	1,162,729				1,338,792				579,345				381,909				454,271				867,798				522,340
Total borrowed funds	1,307,461				1,519,748				1,272,819				1,735,767				1,613,696				1,458,701				1,669,059
Accrued interest and other liabilities	542,740				529,326				520,425				344,891				379,046				484,628				265,623
Total Liabilities	13,774,924				13,611,588				13,524,339				12,314,689				12,215,181				13,308,499				12,036,040
SHAREHOLDERS' EQUITY
Common stock	1,638,032				1,636,107				1,634,405				1,638,851				1,640,066				1,636,850				1,629,434
Retained earnings	703,257				679,980				658,312				660,108				691,236				675,503				650,381
Accumulated other comprehensive loss	40,960				40,697				19,888				31,200				13,986				33,228				(6,480)
Treasury stock, at cost	(126,187)				(126,362)				(126,740)				(120,426)				(100,181)				(124,936)				(98,656)
Total Shareholders' Equity	2,256,062				2,230,422				2,185,865				2,209,733				2,245,107				2,220,645				2,174,679
Total Liabilities and Shareholders' Equity	$	16,030,986			$	15,842,010			$	15,710,204			$	14,524,422			$	14,460,288			$	15,529,144			$	14,210,719
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

 

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)
		Quarterly Averages																					Year-to-Date Averages
		December 31, 2020							September 30, 2020							December 31, 2019							December 31, 2020							December 31, 2019
		Balance				Yield			Balance				Yield			Balance				Yield			Balance				Yield			Balance				Yield
Earning assets
Investments:
Investment securities		$	3,403,839			2.71	%		$	3,162,832			2.86	%		$	3,102,867			3.16	%		$	3,212,051			2.90	%		$	3,288,875			3.28	%
Interest-bearing deposits with other banks		143,884				0.15	%		40,277				0.31	%		36,672				1.81	%		78,943				0.35	%		35,814				2.25	%
Gross loans (1)		10,127,881				4.18	%		10,253,392				4.00	%		9,149,222				5.33	%		9,902,656				4.36	%		8,948,535				5.58	%
Total earning assets		13,675,604				3.77	%		13,456,501				3.72	%		12,288,761				4.77	%		13,193,650				3.98	%		12,273,224				4.95	%
Nonearning assets
Allowance for credit losses		(172,201)							(165,270)							(56,649)							(153,596)							(58,504)
Cash and due from banks		228,427							233,216							221,060							245,436							191,864
Accrued interest and other assets		2,299,156							2,317,563							2,007,116							2,243,654							1,804,135
Total assets		$	16,030,986						$	15,842,010						$	14,460,288						$	15,529,144						$	14,210,719
Interest-bearing liabilities
Deposits:
Interest-bearing demand		$	2,812,748			0.08	%		$	2,668,635			0.08	%		$	2,373,962			0.53	%		$	2,626,252			0.17	%		$	2,326,193			0.55	%
Savings		3,547,179				0.15	%		3,342,514				0.14	%		2,995,395				0.60	%		3,260,882				0.22	%		3,027,725				0.71	%
Time		1,844,379				0.86	%		2,015,933				1.20	%		2,214,174				2.03	%		2,167,553				1.39	%		2,223,429				2.02	%
Total interest-bearing deposits		8,204,306				0.29	%		8,027,082				0.39	%		7,583,531				1.00	%		8,054,687				0.52	%		7,577,347				1.04	%
Borrowed funds
Short-term borrowings		144,732				0.08	%		180,956				0.11	%		1,159,425				1.86	%		590,903				1.09	%		1,146,719				2.20	%
Long-term debt		1,162,729				1.91	%		1,338,792				1.76	%		454,271				3.75	%		867,798				2.31	%		522,340				3.65	%
Total borrowed funds		1,307,461				1.71	%		1,519,748				1.57	%		1,613,696				2.39	%		1,458,701				1.82	%		1,669,059				2.65	%
Total interest-bearing liabilities		9,511,767				0.48	%		9,546,830				0.58	%		9,197,227				1.24	%		9,513,388				0.72	%		9,246,406				1.33	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits		3,720,417							3,535,432							2,638,908							3,310,483							2,524,011
Other liabilities		542,740							529,326							379,046							484,628							265,623
Shareholders' equity		2,256,062							2,230,422							2,245,107							2,220,645							2,174,679
Total liabilities & shareholders' equity		$	16,030,986						$	15,842,010						$	14,460,288						$	15,529,144						$	14,210,719
Net interest income		$	118,473						$	112,180						$	118,902						$	456,511						$	484,254
Net interest spread						3.29	%						3.14	%						3.53	%						3.26	%						3.62	%
Net interest margin						3.45	%						3.32	%						3.84	%						3.46	%						3.95	%
Tax equivalent adjustment						0.04	%						0.04	%						0.05	%						0.05	%						0.05	%
Net interest margin (fully tax equivalent)						3.49	%						3.36	%						3.89	%						3.51	%						4.00	%
(1) Loans held for sale and nonaccrual loans 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		$	(1,195)			$	1,646			$	451			$	(3,496)			$	2,055			$	(1,441)			$	(12,508)			$	(2,225)			$	(14,733)
Interest-bearing deposits with other banks		(16)				40				24				(153)				41				(112)				(680)				150				(530)
Gross loans (2)		4,807				(1,323)				3,484				(26,383)				10,314				(16,069)				(108,942)				41,590				(67,352)
Total earning assets		3,596				363				3,959				(30,032)				12,410				(17,622)				(122,130)				39,515				(82,615)
Interest-bearing liabilities
Total interest-bearing deposits		$	(2,094)			$	128			$	(1,966)			$	(13,554)			$	448			$	(13,106)			$	(39,594)			$	2,484			$	(37,110)
Borrowed funds
Short-term borrowings		(13)				(8)				(21)				(5,190)				(210)				(5,400)				(12,734)				(6,059)				(18,793)
Long-term debt		502				(849)				(347)				(2,103)				3,416				1,313				(6,966)				7,997				1,031
Total borrowed funds		489				(857)				(368)				(7,293)				3,206				(4,087)				(19,700)				1,938				(17,762)
Total interest-bearing liabilities		(1,605)				(729)				(2,334)				(20,847)				3,654				(17,193)				(59,294)				4,422				(54,872)
Net interest income (1)		$	5,201			$	1,092			$	6,293			$	(9,185)			$	8,756			$	(429)			$	(62,836)			$	35,093			$	(27,743)
(1) Not tax equivalent.
(2) Loans held for sale and nonaccrual loans are included in gross loans.

 

FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)
	Dec. 31,				Sep. 30,				June 30,				Mar. 31,				Dec. 31,				Full Year				Full Year
	2020				2020				2020				2020				2019				2020				2019
ALLOWANCE FOR CREDIT LOSS ACTIVITY
Balance at beginning of period	$	168,544			$	158,661			$	143,885			$	57,650			$	56,552			$	57,650			$	56,542
Day one adoption impact of ASC 326	0				0				0				61,505				0				61,505				0
Provision for credit losses	13,758				15,299				17,859				23,880				4,629				70,796				30,598
Gross charge-offs
Commercial and industrial	1,505				1,467				1,282				1,091				2,919				5,345				26,676
Lease financing	0				852				0				0				62				852				162
Construction real estate	0				0				0				0				0				0				0
Commercial real estate	6,270				3,789				2,037				4				1,854				12,100				3,689
Residential real estate	203				22				148				115				167				488				677
Home equity	386				460				428				267				807				1,541				2,591
Installment	21				59				7				61				31				148				223
Credit card	169				171				234				311				319				885				1,547
Total gross charge-offs	8,554				6,820				4,136				1,849				6,159				21,359				35,565
Recoveries
Commercial and industrial	367				265				275				2,000				1,796				2,907				2,883
Lease financing	(6)				6				0				0				0				0				0
Construction real estate	3				0				14				0				0				17				68
Commercial real estate	844				760				424				234				439				2,262				1,113
Residential real estate	145				91				93				52				72				381				273
Home equity	428				209				156				339				243				1,132				1,335
Installment	65				35				27				31				49				158				251
Credit card	85				38				64				43				29				230				152
Total recoveries	1,931				1,404				1,053				2,699				2,628				7,087				6,075
Total net charge-offs	6,623				5,416				3,083				(850)				3,531				14,272				29,490
Ending allowance for credit losses	$	175,679			$	168,544			$	158,661			$	143,885			$	57,650			$	175,679			$	57,650
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial and industrial	0.14		%		0.14		%		0.13		%		(0.15)		%		0.18		%		0.08		%		0.95		%
Lease financing	0.03		%		4.29		%		0.00		%		0.00		%		0.27		%		1.07		%		0.17		%
Construction real estate	0.00		%		0.00		%		(0.01)		%		0.00		%		0.00		%		0.00		%		(0.01)		%
Commercial real estate	0.50		%		0.28		%		0.15		%		(0.02)		%		0.14		%		0.23		%		0.07		%
Residential real estate	0.02		%		(0.03)		%		0.02		%		0.02		%		0.04		%		0.01		%		0.04		%
Home equity	(0.02)		%		0.13		%		0.14		%		(0.04)		%		0.29		%		0.05		%		0.16		%
Installment	(0.21)		%		0.12		%		(0.10)		%		0.15		%		(0.08)		%		(0.01)		%		(0.03)		%
Credit card	0.69		%		1.16		%		1.54		%		2.15		%		2.27		%		1.39		%		2.81		%
Total net charge-offs	0.26		%		0.21		%		0.12		%		(0.04)		%		0.15		%		0.14		%		0.33		%
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans (1)
Commercial and industrial	$	29,230			$	34,686			$	33,906			$	21,126			$	24,346			$	29,230			$	24,346
Lease financing	0				1,092				1,353				222				223				0				223
Construction real estate	0				0				0				0				0				0				0
Commercial real estate	34,682				24,521				14,002				10,050				7,295				34,682				7,295
Residential real estate	11,601				12,104				12,813				11,163				10,892				11,601				10,892
Home equity	5,076				5,374				5,604				5,821				5,242				5,076				5,242
Installment	163				153				201				145				167				163				167
Nonaccrual loans	80,752				77,930				67,879				48,527				48,165				80,752				48,165
Accruing troubled debt restructurings (TDRs)	7,099				7,759				8,377				22,206				11,435				7,099				11,435
Total nonperforming loans	87,851				85,689				76,256				70,733				59,600				87,851				59,600
Other real estate owned (OREO)	1,287				1,643				1,872				1,467				2,033				1,287				2,033
Total nonperforming assets	89,138				87,332				78,128				72,200				61,633				89,138				61,633
Accruing loans past due 90 days or more	169				79				124				120				201				169				201
Total underperforming assets	$	89,307			$	87,411			$	78,252			$	72,320			$	61,834			$	89,307			$	61,834
Total classified assets	$	142,021			$	134,002			$	125,543			$	124,510			$	89,250			$	142,021			$	89,250
CREDIT QUALITY RATIOS
Allowance for credit losses to
Nonaccrual loans	217.55		%		216.28		%		233.74		%		296.51		%		119.69		%		217.55		%		119.69		%
Nonperforming loans	199.97		%		196.69		%		208.06		%		203.42		%		96.73		%		199.97		%		96.73		%
Total ending loans	1.77		%		1.65		%		1.56		%		1.55		%		0.63		%		1.77		%		0.63		%
Nonperforming loans to total loans	0.89		%		0.84		%		0.75		%		0.76		%		0.65		%		0.89		%		0.65		%
Nonperforming assets to
Ending loans, plus OREO	0.90		%		0.86		%		0.77		%		0.78		%		0.67		%		0.90		%		0.67		%
Total assets	0.56		%		0.55		%		0.49		%		0.48		%		0.42		%		0.56		%		0.42		%
Nonperforming assets, excluding accruing TDRs to
Ending loans, plus OREO	0.83		%		0.78		%		0.68		%		0.54		%		0.55		%		0.83		%		0.55		%
Total assets	0.51		%		0.50		%		0.44		%		0.33		%		0.35		%		0.51		%		0.35		%
Classified assets to total assets	0.89		%		0.84		%		0.79		%		0.83		%		0.62		%		0.89		%		0.62		%
(1)  Nonaccrual loans include nonaccrual TDRs of $14.7 million, $29.3 million, $32.7 million, $18.4 million, and $18.5 million, as of December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019,, respectively.

 

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)
																					Twelve months ended,
	Dec. 31,				Sep. 30,				June 30,				Mar. 31,				Dec. 31,				Dec. 31,				Dec. 31,
	2020				2020				2020				2020				2019				2020				2019
PER COMMON SHARE
Market Price
High	$	17.77			$	15.15			$	16.38			$	25.52			$	26.04			$	25.52			$	28.56
Low	$	12.07			$	11.40			$	11.52			$	12.67			$	23.24			$	11.40			$	22.16
Close	$	17.53			$	12.01			$	13.89			$	14.91			$	25.44			$	17.53			$	25.44
Average shares outstanding - basic	97,253,787				97,247,080				97,220,748				97,736,690				98,684,706				97,363,952				98,305,570
Average shares outstanding - diluted	98,020,534				98,008,733				97,988,600				98,356,214				99,232,167				98,093,098				98,851,471
Ending shares outstanding	98,021,929				97,999,763				98,018,858				97,968,958				98,490,998				98,021,929				98,490,998
Total shareholders' equity	$	2,282,070			$	2,247,815			$	2,221,019			$	2,179,383			$	2,247,705			$	2,282,070			$	2,247,705
REGULATORY CAPITAL	Preliminary																				Preliminary
Common equity tier 1 capital	$	1,325,922			$	1,293,716			$	1,267,609			$	1,243,152			$	1,245,746			$	1,325,922			$	1,245,746
Common equity tier 1 capital ratio	11.82		%		11.63		%		11.49		%		11.27		%		11.30		%		11.82		%		11.30		%
Tier 1 capital	$	1,368,818			$	1,336,497			$	1,310,276			$	1,285,705			$	1,288,185			$	1,368,818			$	1,288,185
Tier 1 ratio	12.20		%		12.02		%		11.87		%		11.66		%		11.69		%		12.20		%		11.69		%
Total capital	$	1,744,802			$	1,708,817			$	1,676,532			$	1,493,100			$	1,475,813			$	1,744,802			$	1,475,813
Total capital ratio	15.55		%		15.37		%		15.19		%		13.54		%		13.39		%		15.55		%		13.39		%
Total capital in excess of minimum requirement	$	566,795			$	541,263			$	517,902			$	335,229			$	318,315			$	566,795			$	318,315
Total risk-weighted assets	$	11,219,114			$	11,119,560			$	11,034,570			$	11,027,347			$	11,023,795			$	11,219,114			$	11,023,795
Leverage ratio	9.55		%		9.55		%		8.98		%		9.49		%		9.58		%		9.55		%		9.58		%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets	14.29		%		14.11		%		13.99		%		14.47		%		15.49		%		14.29		%		15.49		%
Ending tangible shareholders' equity to ending tangible assets	8.47		%		8.25		%		8.09		%		8.25		%		9.07		%		8.47		%		9.07		%
Average shareholders' equity to average assets	14.07		%		14.08		%		13.91		%		15.21		%		15.53		%		14.30		%		15.30		%
Average tangible shareholders' equity to average tangible assets	8.26		%		8.18		%		7.94		%		8.79		%		9.07		%		8.28		%		9.16		%
REPURCHASE PROGRAM (1)
Shares repurchased	0				0				0				880,000				1,609,778				880,000				2,753,272
Average share repurchase price	N/A				N/A				N/A				$	18.96			$	24.13			$	18.96			$	24.05
Total cost of shares repurchased	N/A				N/A				N/A				$	16,686			$	38,846			$	16,686			$	66,218
(1) Represents share repurchases as part of publicly announced plans.
N/A = Not applicable

 

 

View original content:http://www.prnewswire.com/news-releases/first-financial-bancorp-announces-fourth-quarter-and-full-year-2020-financial-results-and-quarterly-dividend-301217678.html

SOURCE First Financial Bancorp.

FAQ

What were the earnings results for First Financial Bancorp (FFBC) in Q4 2020?

First Financial Bancorp reported net income of $48.3 million, or $0.49 per diluted share, for Q4 2020.

How did First Financial Bancorp (FFBC) perform financially in 2020?

In 2020, FFBC's earnings per diluted share decreased to $1.59 from $2.00 in 2019.

What was the quarterly dividend declared by First Financial Bancorp (FFBC)?

FFBC declared a quarterly dividend of $0.23 per share.

What was the return on average assets for First Financial Bancorp (FFBC) in Q4 2020?

The return on average assets for Q4 2020 was 1.20%.

What factors contributed to First Financial Bancorp's (FFBC) noninterest income growth?

Noninterest income growth was driven by foreign exchange fees and strong mortgage production.