First Financial Bancorp Announces Second Quarter 2020 Financial Results

Rhea-AI Summary

First Financial Bancorp (FFBC) reported a Q2 2020 net income of $37.4 million, or $0.38 per diluted share, showing growth from Q1 2020's $28.6 million ($0.29 per share), but a decline from Q2 2019’s $52.7 million ($0.53 per share). Adjusted earnings per share were $0.40. The company announced a total provision for credit losses of $20.2 million, influenced by COVID-19. However, mortgage banking income surged to $16.7 million, marking a 488.6% increase. Return on average assets was 0.96%, with a strong capital ratio of 15.13%.

Positive

• Record core fee income of $16.7 million from mortgage banking, up 488.6%.
• Adjusted net income of $0.40 per diluted share.
• Return on average assets increased to 1.00% when adjusted.
• Loan balances grew by $873.9 million, or 37.8% annualized.

Negative

• Net income decreased from $52.7 million in Q2 2019 to $37.4 million in Q2 2020.
• Provision for credit losses increased by $20.2 million due to expected COVID-19 impacts.
• Net interest margin declined by 33 basis points compared to the prior quarter.

CINCINNATI, July 23, 2020 /PRNewswire/ --

• Earnings per diluted share of $0.38; $0.40 on an adjusted⁽¹⁾ basis
• Return on average assets of 0.96%; 1.00% as adjusted⁽¹⁾
• 57.5% efficiency ratio; 56.1% as adjusted⁽¹⁾
• Record core fee income driven by $16.7 million of mortgage banking income
• $20.2 million total provision for credit losses

First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and six months ended June 30, 2020. 

For the three months ended June 30, 2020, the Company reported net income of $37.4 million, or $0.38 per diluted common share.  These results compare to net income of $28.6 million, or $0.29 per diluted common share, for the first quarter of 2020 and $52.7 million, or $0.53 per diluted common share, for the second quarter of 2019.  For the six months ended June 30, 2020, First Financial had earnings per diluted common share of $0.67 compared to $1.00 for the same period in 2019.

Return on average assets for the second quarter of 2020 was 0.96% while return on average tangible common equity was 12.90%.  These compare to returns on average assets of 0.79% and 1.50%, and returns on average tangible common equity of 9.71% and 17.33%, in the first quarter of 2020 and the second quarter of 2019, respectively.

Second quarter 2020 highlights include:

• After adjustments⁽¹⁾ for certain nonrecurring and certain COVID-19 related items:
• Net income of $0.40 per diluted common share
• 1.00% return on average assets
• 13.47% return on average tangible common equity

• Adjustments⁽¹⁾ to net income include:
• $0.7 million of costs directly related to COVID-19
• $1.5 million of other nonrecurring costs such as branch consolidation costs

• Total Allowance for Credit Losses of $175.3 million; Total quarterly provision for credit losses of $20.2 million
• Loans and leases - ACL of $158.7 million, 1.56% of total loans; 1.71% of loans excluding PPP
• Unfunded Commitments - ACL of $16.7 million; $2.4 million provision expense
• Similar to first quarter, substantially all second quarter provision expense related to expected economic impact from COVID-19

• Strong noninterest income of $42.7 million, an increase of 20.7% from the linked quarter
• Mortgage banking revenue increased $13.8 million, or 488.6%
• Continued strong client derivative fee income
• Foreign exchange income of $6.6 million despite COVID-19 headwinds
• Service charges on deposits, including overdrafts, declined $2.4 million, or 28.9%

• Noninterest expenses of $88.7 million, or $86.5 million as adjusted⁽¹⁾
• Efficiency ratio of 57.5%; 56.1% 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.

• Loan balances grew $873.9 million, or 37.8% on an annualized basis
• Loan growth driven by $885.3 million of PPP loans, net of unearned fees

• Net interest margin of 3.44% on a fully tax-equivalent basis⁽¹⁾
• 33 basis point decline compared to the linked quarter; 62 basis point decline due to loan yields
• 3 basis points of dilution from PPP
• Impact of downward movement in short term rates, including the normalization of LIBOR, partially offset by funding cost reductions, higher loan fees, and elevated purchase accounting accretion

• Strong capital ratios
• Total capital of 15.13%; bolstered by $150 million sub-debt issuance in early second quarter
• Tier 1 common equity of 11.44%
• Tangible common equity of 8.09%; 8.62% excluding PPP loans 
• Tangible book value per share of $12.26

In response to COVID-19, the Company has:

• Introduced hardship relief programs that include payment deferrals, fee-waivers and suspension of foreclosures
• Processed over $2.0 billion of commercial modifications
• Modified over $126 million of consumer loans including $103 million in residential mortgages

• Participated in CARES Act SBA Paycheck Protection Program
• Received in excess of 8,200 PPP applications; over $1.2 billion in requests
• Approximately 6,800 PPP requests, or 83% of applicants, approved by SBA
• $912.9 million in PPP balances as of June 30; to date forgiveness has not been requested on any loan

• Continued implementation of new processes and technologies to improve customer access to banking services

• Updated existing internal processes and systems to react to high customer demand for relief

• Donated $1.0 million to fund COVID-19 related relief in our geographic footprint in the first quarter

Archie Brown, President and Chief Executive Officer, remarked, "We are very pleased with our second quarter performance, especially when considering the unique circumstances in which we were operating due to COVID-19.  While second quarter earnings were negatively impacted by pandemic-related events, we posted solid results as reflected in our adjusted⁽¹⁾ earnings per share of $0.40, adjusted⁽¹⁾ return on assets of 1.00% and adjusted⁽¹⁾ efficiency ratio of 56.1%.  Additionally, credit trends remained stable while our allowance for credit losses increased to 1.71% of total loans, excluding PPP, and we recorded $20.2 million of provision expense in anticipation of credit deterioration in the latter part of the year and into 2021."

Mr. Brown continued, "The second quarter was our highest core fee income quarter on record and was the primary driver of our excellent performance.  Our mortgage team had a sensational quarter as the hard work of our team combined with the historic low interest rate environment to drive an almost 500% increase in total mortgage banking revenue to $16.7 million.  In addition, client derivative income remained steady during the quarter and Bannockburn revenue, while lower than the first quarter, was in line with our expectations given the challenges caused by business shutdowns.  Additionally, total expenses declined during the quarter as we limited discretionary spending and implemented additional controls on hiring."

Mr. Brown further commented, "We are pleased with and appreciative of the incredible work performed by our associates during the quarter.  We successfully implemented our pandemic management plan, which resulted in over 50% of our associates working remotely and our branches operating with closed lobbies for most of the quarter.  This required a prompt evaluation of our client service model and a shift to leveraging technology in new and innovative ways.  Our associates met the challenge, and went above and beyond to originate and fund over $900 million in PPP loans, provide customer deferrals for over $2 billion of loans, and process historic numbers of fee waivers and mortgage applications.  By the second half of the quarter, sales activity returned to near pre-pandemic levels which led to increases in new households with checking accounts, strong consumer loan originations and robust wealth production."

Mr. Brown continued, "At this time, approximately 60% of our banking center lobbies are fully open with the remainder servicing clients by appointment.  Physical staffing levels in our office buildings is currently limited to 25% of normal capacity, mostly on a volunteer basis, with the remainder of the staff continuing to work remotely.  We continually monitor conditions in our markets and banking centers, in addition to guidance provided by local and state governments with regard to safely returning to the workplace and opening our branch locations to customers."

Mr. Brown concluded, "The second quarter was historic and challenging, however it illuminated what we are capable of as a company and positioned us to build on the lessons learned in a meaningful way.  We continue to better leverage technology and are reevaluating our distribution model to better serve the needs of our customers.  The broader economic environment remains uncertain and our clients continue to face serious challenges.  We are committed to be a stabilizing presence in our communities and remain steadfast in our promise to manage the Company in a manner that prioritizes the physical and financial well-being of our associates and clients while delivering long-term value to our shareholders."

Full detail of the Company's second quarter 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, July 24, 2020 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 10145789.  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; (iv) 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 June 30, 2020, the Company had $15.9 billion in assets, $10.2 billion in loans, $11.7 billion in deposits and $2.2 billion in shareholders' equity.  The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management.  These business units provide traditional banking services to business and retail clients.  Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.8 billion in assets under management as of June 30, 2020.  The Company operated 141 full service banking centers as of June 30, 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,		Six months ended,
	June 30,		Mar. 31,		Dec. 31,		Sep. 30,		June 30,		June 30,
	2020		2020		2019		2019		2019		2020		2019
RESULTS OF OPERATIONS
Net income	$	37,393			$	28,628			$	48,677			$	50,856			$	52,703			$	66,021			$	98,542
Net earnings per share - basic	$	0.38			$	0.29			$	0.49			$	0.52			$	0.54			$	0.68			$	1.01
Net earnings per share - diluted	$	0.38			$	0.29			$	0.49			$	0.51			$	0.53			$	0.67			$	1.00
Dividends declared per share	$	0.23			$	0.23			$	0.23			$	0.23			$	0.22			$	0.46			$	0.44
KEY FINANCIAL RATIOS
Return on average assets	0.96	%		0.79	%		1.34	%		1.41	%		1.50	%		0.88	%		1.42	%
Return on average shareholders' equity	6.88	%		5.21	%		8.60	%		9.13	%		9.85	%		6.04	%		9.37	%
Return on average tangible shareholders' equity	12.90	%		9.71	%		15.84	%		16.15	%		17.33	%		11.29	%		16.66	%
Net interest margin	3.38	%		3.71	%		3.84	%		3.91	%		3.99	%		3.54	%		4.02	%
Net interest margin (fully tax equivalent) (1)	3.44	%		3.77	%		3.89	%		3.96	%		4.04	%		3.60	%		4.07	%
Ending shareholders' equity as a percent of ending assets	13.99	%		14.47	%		15.49	%		15.62	%		15.16	%		13.99	%		15.16	%
Ending tangible shareholders' equity as a percent of:
Ending tangible assets	8.09	%		8.25	%		9.07	%		9.17	%		9.34	%		8.09	%		9.34	%
Risk-weighted assets	10.85	%		10.50	%		11.09	%		11.34	%		11.82	%		10.85	%		11.82	%
Average shareholders' equity as a percent of average assets	13.91	%		15.21	%		15.53	%		15.43	%		15.22	%		14.54	%		15.12	%
Average tangible shareholders' equity as a percent of
average tangible assets	7.94	%		8.79	%		9.07	%		9.35	%		9.26	%		8.34	%		9.11	%
Book value per share	$	22.66			$	22.25			$	22.82			$	22.59			$	22.18			$	22.66			$	22.18
Tangible book value per share	$	12.26			$	11.82			$	12.42			$	12.33			$	12.79			$	12.26			$	12.79
Common equity tier 1 ratio (2)	11.44	%		11.27	%		11.30	%		11.52	%		12.00	%		11.44	%		12.00	%
Tier 1 ratio (2)	11.83	%		11.66	%		11.69	%		11.91	%		12.40	%		11.83	%		12.40	%
Total capital ratio (2)	15.13	%		13.54	%		13.39	%		13.62	%		14.20	%		15.13	%		14.20	%
Leverage ratio (2)	8.98	%		9.49	%		9.58	%		9.75	%		10.02	%		8.98	%		10.02	%
AVERAGE BALANCE SHEET ITEMS
Loans (3)	$	10,002,379			$	9,220,643			$	9,149,222			$	9,014,092			$	8,852,662			$	9,611,511			$	8,813,206
Investment securities	3,164,243			3,115,723			3,102,867			3,290,666			3,408,994			3,139,983			3,382,510
Interest-bearing deposits with other banks	91,990			39,332			36,672			38,569			33,255			65,661			33,978
Total earning assets	$	13,258,612			$	12,375,698			$	12,288,761			$	12,343,327			$	12,294,911			$	12,817,155			$	12,229,694
Total assets	$	15,710,204			$	14,524,422			$	14,460,288			$	14,320,514			$	14,102,733			$	15,117,313			$	14,028,058
Noninterest-bearing deposits	$	3,335,866			$	2,643,240			$	2,638,908			$	2,513,458			$	2,484,214			$	2,989,553			$	2,470,974
Interest-bearing deposits	8,395,229			7,590,791			7,583,531			7,504,708			7,612,146			7,993,010			7,611,125
Total deposits	$	11,731,095			$	10,234,031			$	10,222,439			$	10,018,166			$	10,096,360			$	10,982,563			$	10,082,099
Borrowings	$	1,272,819			$	1,735,767			$	1,613,696			$	1,816,983			$	1,656,570			$	1,504,293			$	1,622,011
Shareholders' equity	$	2,185,865			$	2,209,733			$	2,245,107			$	2,210,327			$	2,146,997			$	2,197,799			$	2,120,762
CREDIT QUALITY RATIOS
Allowance to ending loans	1.56	%		1.55	%		0.63	%		0.62	%		0.69	%		1.56	%		0.69	%
Allowance to nonaccrual loans	233.74	%		296.51	%		119.69	%		93.18	%		119.86	%		233.74	%		119.86	%
Allowance to nonperforming loans	208.06	%		203.42	%		96.73	%		71.46	%		69.33	%		208.06	%		69.33	%
Nonperforming loans to total loans	0.75	%		0.76	%		0.65	%		0.87	%		0.99	%		0.75	%		0.99	%
Nonperforming assets to ending loans, plus OREO	0.77	%		0.78	%		0.67	%		0.89	%		1.00	%		0.77	%		1.00	%
Nonperforming assets to total assets	0.49	%		0.48	%		0.42	%		0.56	%		0.62	%		0.49	%		0.62	%
Classified assets to total assets	0.79	%		0.83	%		0.62	%		0.92	%		1.02	%		0.79	%		1.02	%
Net charge-offs to average loans (annualized)	0.12	%		(0.04)	%		0.15	%		0.45	%		0.08	%		0.05	%		0.36	%
(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) June 30, 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,		Six months ended,
	June 30,		June 30,
	2020		2019		% Change		2020		2019		% Change
Interest income
Loans and leases, including fees	$	105,900			$	126,365			(16.2)	%		$	221,675			$	249,421			(11.1)	%
Investment securities
Taxable	18,476			23,616			(21.8)	%		37,481			47,851			(21.7)	%
Tax-exempt	4,937			4,336			13.9	%		9,519			8,594			10.8	%
Total investment securities interest	23,413			27,952			(16.2)	%		47,000			56,445			(16.7)	%
Other earning assets	47			206			(77.2)	%		189			416			(54.6)	%
Total interest income	129,360			154,523			(16.3)	%		268,864			306,282			(12.2)	%
Interest expense
Deposits	11,751			20,612			(43.0)	%		28,116			39,855			(29.5)	%
Short-term borrowings	1,274			6,646			(80.8)	%		6,361			12,606			(49.5)	%
Long-term borrowings	4,759			4,963			(4.1)	%		8,529			10,004			(14.7)	%
Total interest expense	17,784			32,221			(44.8)	%		43,006			62,465			(31.2)	%
Net interest income	111,576			122,302			(8.8)	%		225,858			243,817			(7.4)	%
Provision for credit losses-loans and leases (1)	17,859			6,658			168.2	%		41,739			20,741			101.2	%
Provision for credit losses-unfunded commitments (1)	2,370			(132)			N/M		3,938			(126)			N/M
Net interest income after provision for credit losses	91,347			115,776			(21.1)	%		180,181			223,202			(19.3)	%
Noninterest income
Service charges on deposit accounts	6,001			9,819			(38.9)	%		14,436			18,722			(22.9)	%
Trust and wealth management fees	4,114			3,943			4.3	%		8,583			8,013			7.1	%
Bankcard income	2,844			6,497			(56.2)	%		5,542			12,083			(54.1)	%
Client derivative fees	2,984			4,905			(39.2)	%		6,089			6,609			(7.9)	%
Foreign exchange income	6,576			17			N/M		16,542			17			N/M
Net gains from sales of loans	16,662			3,432			385.5	%		19,493			5,322			266.3	%
Net gains (losses) on sale of investment securities	2			(37)			105.4	%		(57)			(215)			73.5	%
Other	3,542			6,062			(41.6)	%		7,481			10,914			(31.5)	%
Total noninterest income	42,725			34,638			23.3	%		78,109			61,465			27.1	%
Noninterest expenses
Salaries and employee benefits	55,925			53,985			3.6	%		110,747			101,897			8.7	%
Net occupancy	5,378			5,596			(3.9)	%		11,482			12,226			(6.1)	%
Furniture and equipment	3,681			4,222			(12.8)	%		7,734			7,638			1.3	%
Data processing	7,019			4,984			40.8	%		13,408			10,111			32.6	%
Marketing	1,339			1,976			(32.2)	%		2,559			3,582			(28.6)	%
Communication	907			747			21.4	%		1,797			1,475			21.8	%
Professional services	2,205			2,039			8.1	%		4,480			4,291			4.4	%
State intangible tax	1,514			1,307			15.8	%		3,030			2,617			15.8	%
FDIC assessments	1,290			1,065			21.1	%		2,695			2,015			33.7	%
Intangible amortization	2,791			2,044			36.5	%		5,583			4,089			36.5	%
Other	6,640			6,545			1.5	%		14,840			13,062			13.6	%
Total noninterest expenses	88,689			84,510			4.9	%		178,355			163,003			9.4	%
Income before income taxes	45,383			65,904			(31.1)	%		79,935			121,664			(34.3)	%
Income tax expense	7,990			13,201			(39.5)	%		13,914			23,122			(39.8)	%
Net income	$	37,393			$	52,703			(29.0)	%		$	66,021			$	98,542			(33.0)	%
ADDITIONAL DATA
Net earnings per share - basic	$	0.38			$	0.54					$	0.68			$	1.01
Net earnings per share - diluted	$	0.38			$	0.53					$	0.67			$	1.00
Dividends declared per share	$	0.23			$	0.22					$	0.46			$	0.44
Return on average assets	0.96	%		1.50	%				0.88	%		1.42	%
Return on average shareholders' equity	6.88	%		9.85	%				6.04	%		9.37	%
Interest income	$	129,360			$	154,523			(16.3)	%		$	268,864			$	306,282			(12.2)	%
Tax equivalent adjustment	1,664			1,416			17.5	%		3,288			2,939			11.9	%
Interest income - tax equivalent	131,024			155,939			(16.0)	%		272,152			309,221			(12.0)	%
Interest expense	17,784			32,221			(44.8)	%		43,006			62,465			(31.2)	%
Net interest income - tax equivalent	$	113,240			$	123,718			(8.5)	%		$	229,146			$	246,756			(7.1)	%
Net interest margin	3.38	%		3.99	%				3.54	%		4.02	%
Net interest margin (fully tax equivalent) (2)	3.44	%		4.04	%				3.60	%		4.07	%
Full-time equivalent employees	2,076			2,076
(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
	Second		First		Full		% Change
	Quarter		Quarter		Year		Linked Qtr.
Interest income
Loans and leases, including fees	$	105,900			$	115,775			$	221,675			(8.5)	%
Investment securities
Taxable	18,476			19,005			37,481			(2.8)	%
Tax-exempt	4,937			4,582			9,519			7.7	%
Total investment securities interest	23,413			23,587			47,000			(0.7)	%
Other earning assets	47			142			189			(66.9)	%
Total interest income	129,360			139,504			268,864			(7.3)	%
Interest expense
Deposits	11,751			16,365			28,116			(28.2)	%
Short-term borrowings	1,274			5,087			6,361			(75.0)	%
Long-term borrowings	4,759			3,770			8,529			26.2	%
Total interest expense	17,784			25,222			43,006			(29.5)	%
Net interest income	111,576			114,282			225,858			(2.4)	%
Provision for credit losses-loans and leases (1)	17,859			23,880			41,739			(25.2)	%
Provision for credit losses-unfunded commitments (1)	2,370			1,568			3,938			51.1	%
Net interest income after provision for credit losses	91,347			88,834			180,181			2.8	%
Noninterest income
Service charges on deposit accounts	6,001			8,435			14,436			(28.9)	%
Trust and wealth management fees	4,114			4,469			8,583			(7.9)	%
Bankcard income	2,844			2,698			5,542			5.4	%
Client derivative fees	2,984			3,105			6,089			(3.9)	%
Foreign exchange income	6,576			9,966			16,542			(34.0)	%
Net gains from sales of loans	16,662			2,831			19,493			488.6	%
Net gains (losses) on sale of investment securities	2			(59)			(57)			103.4	%
Other	3,542			3,939			7,481			(10.1)	%
Total noninterest income	42,725			35,384			78,109			20.7	%
Noninterest expenses
Salaries and employee benefits	55,925			54,822			110,747			2.0	%
Net occupancy	5,378			6,104			11,482			(11.9)	%
Furniture and equipment	3,681			4,053			7,734			(9.2)	%
Data processing	7,019			6,389			13,408			9.9	%
Marketing	1,339			1,220			2,559			9.8	%
Communication	907			890			1,797			1.9	%
Professional services	2,205			2,275			4,480			(3.1)	%
State intangible tax	1,514			1,516			3,030			(0.1)	%
FDIC assessments	1,290			1,405			2,695			(8.2)	%
Intangible amortization	2,791			2,792			5,583			0.0	%
Other	6,640			8,200			14,840			(19.0)	%
Total noninterest expenses	88,689			89,666			178,355			(1.1)	%
Income before income taxes	45,383			34,552			79,935			31.3	%
Income tax expense	7,990			5,924			13,914			34.9	%
Net income	$	37,393			$	28,628			$	66,021			30.6	%
ADDITIONAL DATA
Net earnings per share - basic	$	0.38			$	0.29			$	0.68
Net earnings per share - diluted	$	0.38			$	0.29			$	0.67
Dividends declared per share	$	0.23			$	0.23			$	0.46
Return on average assets	0.96	%		0.79	%		0.88	%
Return on average shareholders' equity	6.88	%		5.21	%		6.04	%
Interest income	$	129,360			$	139,504			$	268,864			(7.3)	%
Tax equivalent adjustment	1,664			1,624			3,288			2.5	%
Interest income - tax equivalent	131,024			141,128			272,152			(7.2)	%
Interest expense	17,784			25,222			43,006			(29.5)	%
Net interest income - tax equivalent	$	113,240			$	115,906			$	229,146			(2.3)	%
Net interest margin	3.38	%		3.71	%		3.54	%
Net interest margin (fully tax equivalent) (2)	3.44	%		3.77	%		3.60	%
Full-time equivalent employees	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)
	June 30,		Mar. 31,		Dec. 31,		Sep. 30,		June 30,		% Change		% Change
	2020		2020		2019		2019		2019		Linked Qtr.		Comp Qtr.
ASSETS
Cash and due from banks	$	283,639			$	261,892			$	200,691			$	242,482			$	169,694			8.3	%		67.1	%
Interest-bearing deposits with other banks	38,845			71,071			56,948			39,669			101,668			(45.3)	%		(61.8)	%
Investment securities available-for-sale	2,897,413			2,908,688			2,852,084			2,850,502			3,152,970			(0.4)	%		(8.1)	%
Investment securities held-to-maturity	127,347			136,744			142,862			148,778			154,327			(6.9)	%		(17.5)	%
Other investments	132,366			143,581			125,020			124,965			127,439			(7.8)	%		3.9	%
Loans held for sale	43,950			27,334			13,680			23,528			20,244			60.8	%		117.1	%
Loans and leases
Commercial and industrial	3,322,374			2,477,773			2,465,877			2,470,017			2,547,997			34.1	%		30.4	%
Lease financing	80,087			82,602			88,364			92,616			90,638			(3.0)	%		(11.6)	%
Construction real estate	506,085			500,311			493,182			515,960			497,683			1.2	%		1.7	%
Commercial real estate	4,343,702			4,278,257			4,194,651			4,015,908			3,903,654			1.5	%		11.3	%
Residential real estate	1,043,745			1,061,792			1,055,949			1,055,007			1,015,820			(1.7)	%		2.7	%
Home equity	764,171			781,243			771,869			776,885			787,139			(2.2)	%		(2.9)	%
Installment	79,150			80,085			82,589			88,275			89,149			(1.2)	%		(11.2)	%
Credit card	42,397			45,756			49,184			49,010			48,706			(7.3)	%		(13.0)	%
Total loans	10,181,711			9,307,819			9,201,665			9,063,678			8,980,786			9.4	%		13.4	%
Less:
Allowance for credit losses (1)	158,661			143,885			57,650			56,552			61,549			10.3	%		157.8	%
Net loans	10,023,050			9,163,934			9,144,015			9,007,126			8,919,237			9.4	%		12.4	%
Premises and equipment	211,164			212,787			214,506			213,681			211,313			(0.8)	%		(0.1)	%
Goodwill	937,771			937,771			937,771			937,689			879,727			0.0	%		6.6	%
Other intangibles	70,325			73,258			76,201			79,506			36,349			(4.0)	%		93.5	%
Accrued interest and other assets	1,105,020			1,120,507			747,847			812,519			664,695			(1.4)	%		66.2	%
Total Assets	$	15,870,890			$	15,057,567			$	14,511,625			$	14,480,445			$	14,437,663			5.4	%		9.9	%
LIABILITIES
Deposits
Interest-bearing demand	$	2,657,841			$	2,498,109			$	2,364,881			$	2,316,301			$	2,332,692			6.4	%		13.9	%
Savings	3,287,314			2,978,250			2,960,979			2,924,200			2,953,114			10.4	%		11.3	%
Time	2,241,212			2,435,858			2,240,441			2,308,617			2,321,908			(8.0)	%		(3.5)	%
Total interest-bearing deposits	8,186,367			7,912,217			7,566,301			7,549,118			7,607,714			3.5	%		7.6	%
Noninterest-bearing	3,515,048			2,723,341			2,643,928			2,534,739			2,501,290			29.1	%		40.5	%
Total deposits	11,701,415			10,635,558			10,210,229			10,083,857			10,109,004			10.0	%		15.8	%
Federal funds purchased and securities sold
under agreements to repurchase	154,347			215,824			165,181			85,286			260,621			(28.5)	%		(40.8)	%
FHLB short-term borrowings	0			1,181,900			1,151,000			1,128,900			1,052,700			(100.0)	%		(100.0)	%
Total short-term borrowings	154,347			1,397,724			1,316,181			1,214,186			1,313,321			(89.0)	%		(88.2)	%
Long-term debt	1,285,767			325,566			414,376			498,778			547,042			294.9	%		135.0	%
Total borrowed funds	1,440,114			1,723,290			1,730,557			1,712,964			1,860,363			(16.4)	%		(22.6)	%
Accrued interest and other liabilities	508,342			519,336			323,134			422,311			280,107			(2.1)	%		81.5	%
Total Liabilities	13,649,871			12,878,184			12,263,920			12,219,132			12,249,474			6.0	%		11.4	%
SHAREHOLDERS' EQUITY
Common stock	1,635,070			1,633,950			1,640,771			1,639,333			1,623,699			0.1	%		0.7	%
Retained earnings	675,532			660,653			711,249			685,368			657,730			2.3	%		2.7	%
Accumulated other comprehensive income (loss)	36,431			11,788			13,323			15,450			5,193			209.1	%		601.5	%
Treasury stock, at cost	(126,014)			(127,008)			(117,638)			(78,838)			(98,433)			(0.8)	%		28.0	%
Total Shareholders' Equity	2,221,019			2,179,383			2,247,705			2,261,313			2,188,189			1.9	%		1.5	%
Total Liabilities and Shareholders' Equity	$	15,870,890			$	15,057,567			$	14,511,625			$	14,480,445			$	14,437,663			5.4	%		9.9	%
(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
	June 30,		Mar. 31,		Dec. 31,		Sep. 30,		June 30,		June 30,
	2020		2020		2019		2019		2019		2020		2019
ASSETS
Cash and due from banks	$	284,726			$	235,696			$	221,060			$	191,000			$	173,278			$	260,211			$	177,463
Interest-bearing deposits with other banks	91,990			39,332			36,672			38,569			33,255			65,661			33,978
Investment securities	3,164,243			3,115,723			3,102,867			3,290,666			3,408,994			3,139,983			3,382,510
Loans held for sale	36,592			13,174			21,050			18,197			13,258			24,883			9,844
Loans and leases
Commercial and industrial	3,058,677			2,450,893			2,469,810			2,509,782			2,533,981			2,754,785			2,521,696
Lease financing	81,218			85,782			91,225			94,858			94,458			83,500			92,760
Construction real estate	495,407			501,471			501,892			509,742			457,962			498,439			476,952
Commercial real estate	4,381,647			4,209,345			4,102,288			3,925,028			3,834,404			4,295,496			3,798,558
Residential real estate	1,052,996			1,055,456			1,053,707			1,035,975			989,923			1,054,226			975,832
Home equity	772,424			773,082			773,119			781,340			789,087			772,753			798,376
Installment	79,016			81,234			85,515			88,760			89,778			80,125			90,520
Credit card	44,402			50,206			50,616			50,410			49,811			47,304			48,668
Total loans	9,965,787			9,207,469			9,128,172			8,995,895			8,839,404			9,586,628			8,803,362
Less:
Allowance for credit losses (1)	155,454			121,126			56,649			61,911			58,335			138,290			57,715
Net loans	9,810,333			9,086,343			9,071,523			8,933,984			8,781,069			9,448,338			8,745,647
Premises and equipment	213,903			215,545			215,171			215,671			211,714			214,724			212,457
Goodwill	937,771			937,771			937,710			899,888			879,726			937,771			879,137
Other intangibles	72,086			75,014			78,190			51,365			37,666			73,550			38,777
Accrued interest and other assets	1,098,560			805,824			776,045			681,174			563,773			952,192			548,245
Total Assets	$	15,710,204			$	14,524,422			$	14,460,288			$	14,320,514			$	14,102,733			$	15,117,313			$	14,028,058
LIABILITIES
Deposits
Interest-bearing demand	$	2,602,917			$	2,418,193			$	2,373,962			$	2,325,405			$	2,334,322			$	2,510,555			$	2,302,313
Savings	3,173,274			2,976,518			2,995,395			2,945,076			3,057,100			3,074,896			3,086,167
Time	2,619,038			2,196,080			2,214,174			2,234,227			2,220,724			2,407,559			2,222,645
Total interest-bearing deposits	8,395,229			7,590,791			7,583,531			7,504,708			7,612,146			7,993,010			7,611,125
Noninterest-bearing	3,335,866			2,643,240			2,638,908			2,513,458			2,484,214			2,989,553			2,470,974
Total deposits	11,731,095			10,234,031			10,222,439			10,018,166			10,096,360			10,982,563			10,082,099
Federal funds purchased and securities sold
under agreements to repurchase	145,291			164,093			206,800			185,156			126,872			154,692			115,075
FHLB short-term borrowings	548,183			1,189,765			952,625			1,112,091			982,993			868,974			948,674
Total short-term borrowings	693,474			1,353,858			1,159,425			1,297,247			1,109,865			1,023,666			1,063,749
Long-term debt	579,345			381,909			454,271			519,736			546,705			480,627			558,262
Total borrowed funds	1,272,819			1,735,767			1,613,696			1,816,983			1,656,570			1,504,293			1,622,011
Accrued interest and other liabilities	520,425			344,891			379,046			275,038			202,806			432,658			203,186
Total Liabilities	13,524,339			12,314,689			12,215,181			12,110,187			11,955,736			12,919,514			11,907,296
SHAREHOLDERS' EQUITY
Common stock	1,634,405			1,638,851			1,640,066			1,629,286			1,622,994			1,636,628			1,624,105
Retained earnings	658,312			660,108			691,236			662,899			635,629			659,210			623,252
Accumulated other comprehensive loss	19,888			31,200			13,986			11,985			(12,889)			25,544			(26,268)
Treasury stock, at cost	(126,740)			(120,426)			(100,181)			(93,843)			(98,737)			(123,583)			(100,327)
Total Shareholders' Equity	2,185,865			2,209,733			2,245,107			2,210,327			2,146,997			2,197,799			2,120,762
Total Liabilities and Shareholders' Equity	$	15,710,204			$	14,524,422			$	14,460,288			$	14,320,514			$	14,102,733			$	15,117,313			$	14,028,058
(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
		June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
		Balance		Yield		Balance		Yield		Balance		Yield		Balance		Yield		Balance		Yield
Earning assets
Investments:
Investment securities		$	3,164,243			2.97	%		$	3,115,723			3.04	%		$	3,408,994			3.29	%		$	3,139,983			3.02	%		$	3,382,510			3.37	%
Interest-bearing deposits with other banks		91,990			0.20	%		39,332			1.45	%		33,255			2.48	%		65,661			0.58	%		33,978			2.47	%
Gross loans (1)		10,002,379			4.25	%		9,220,643			5.04	%		8,852,662			5.73	%		9,611,511			4.65	%		8,813,206			5.71	%
Total earning assets		13,258,612			3.91	%		12,375,698			4.52	%		12,294,911			5.04	%		12,817,155			4.23	%		12,229,694			5.05	%
Nonearning assets
Allowance for credit losses		(155,454)					(121,126)					(58,335)					(138,290)					(57,715)
Cash and due from banks		284,726					235,696					173,278					260,211					177,463
Accrued interest and other assets		2,322,320					2,034,154					1,692,879					2,178,237					1,678,616
Total assets		$	15,710,204					$	14,524,422					$	14,102,733					$	15,117,313					$	14,028,058
Interest-bearing liabilities
Deposits:
Interest-bearing demand		$	2,602,917			0.11	%		$	2,418,193			0.45	%		$	2,334,322			0.60	%		$	2,510,555			0.27	%		$	2,302,313			0.55	%
Savings		3,173,274			0.17	%		2,976,518			0.45	%		3,057,100			0.78	%		3,074,896			0.31	%		3,086,167			0.77	%
Time		2,619,038			1.49	%		2,196,080			1.88	%		2,220,724			2.02	%		2,407,559			1.68	%		2,222,645			1.98	%
Total interest-bearing deposits		8,395,229			0.56	%		7,590,791			0.86	%		7,612,146			1.09	%		7,993,010			0.71	%		7,611,125			1.06	%
Borrowed funds
Short-term borrowings		693,474			0.74	%		1,353,858			1.51	%		1,109,865			2.40	%		1,023,666			1.25	%		1,063,749			2.39	%
Long-term debt		579,345			3.29	%		381,909			3.96	%		546,705			3.64	%		480,627			3.58	%		558,262			3.61	%
Total borrowed funds		1,272,819			1.90	%		1,735,767			2.05	%		1,656,570			2.81	%		1,504,293			2.00	%		1,622,011			2.81	%
Total interest-bearing liabilities		9,668,048			0.74	%		9,326,558			1.08	%		9,268,716			1.39	%		9,497,303			0.91	%		9,233,136			1.36	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits		3,335,866					2,643,240					2,484,214					2,989,553					2,470,974
Other liabilities		520,425					344,891					202,806					432,658					203,186
Shareholders' equity		2,185,865					2,209,733					2,146,997					2,197,799					2,120,762
Total liabilities & shareholders' equity		$	15,710,204					$	14,524,422					$	14,102,733					$	15,117,313					$	14,028,058
Net interest income		$	111,576					$	114,282					$	122,302					$	225,858					$	243,817
Net interest spread				3.17	%				3.44	%				3.65	%				3.32	%				3.69	%
Net interest margin				3.38	%				3.71	%				3.99	%				3.54	%				4.02	%
Tax equivalent adjustment				0.06	%				0.06	%				0.05	%				0.06	%				0.05	%
Net interest margin (fully tax equivalent)				3.44	%				3.77	%				4.04	%				3.60	%				4.07	%
(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		$	(533)			$	359			$	(174)			$	(2,728)			$	(1,811)			$	(4,539)			$	(5,815)			$	(3,630)			$	(9,445)
Interest-bearing deposits with other banks		(122)			27			(95)			(189)			30			(159)			(318)			91			(227)
Gross loans (2)		(18,152)			8,277			(9,875)			(32,638)			12,173			(20,465)			(46,158)			18,412			(27,746)
Total earning assets		(18,807)			8,663			(10,144)			(35,555)			10,392			(25,163)			(52,291)			14,873			(37,418)
Interest-bearing liabilities
Total interest-bearing deposits		$	(5,740)			$	1,126			$	(4,614)			$	(9,957)			$	1,096			$	(8,861)			$	(13,082)			$	1,343			$	(11,739)
Borrowed funds
Short-term borrowings		(2,600)			(1,213)			(3,813)			(4,607)			(765)			(5,372)			(5,996)			(249)			(6,245)
Long-term debt		(633)			1,622			989			(472)			268			(204)			(97)			(1,378)			(1,475)
Total borrowed funds		(3,233)			409			(2,824)			(5,079)			(497)			(5,576)			(6,093)			(1,627)			(7,720)
Total interest-bearing liabilities		(8,973)			1,535			(7,438)			(15,036)			599			(14,437)			(19,175)			(284)			(19,459)
Net interest income (1)		$	(9,834)			$	7,128			$	(2,706)			$	(20,519)			$	9,793			$	(10,726)			$	(33,116)			$	15,157			$	(17,959)
(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)
											Six months ended
	June 30,		Mar. 31,		Dec. 31,		Sep. 30,		June 30,		June 30,		June 30,
	2020		2020		2019		2019		2019		2020		2019
ALLOWANCE FOR CREDIT LOSS ACTIVITY
Balance at beginning of period	$	143,885			$	57,650			$	56,552			$	61,549			$	56,722			$	57,650			$	56,542
Day one adoption impact of ASC 326	0			61,505			0			0			0			61,505			0
Provision for credit losses	17,859			23,880			4,629			5,228			6,658			41,739			20,741
Gross charge-offs
Commercial and industrial	1,282			1,091			2,919			9,556			1,873			2,373			14,201
Lease financing	0			0			62			0			0			0			100
Construction real estate	0			0			0			0			0			0			0
Commercial real estate	2,037			4			1,854			535			86			2,041			1,300
Residential real estate	148			115			167			278			150			263			232
Home equity	428			267			807			627			689			695			1,157
Installment	7			61			31			65			78			68			127
Credit card	234			311			319			598			289			545			630
Total gross charge-offs	4,136			1,849			6,159			11,659			3,165			5,985			17,747
Recoveries
Commercial and industrial	275			2,000			1,796			556			291			2,275			531
Lease financing	0			0			0			0			0			0			0
Construction real estate	14			0			0			0			5			14			68
Commercial real estate	424			234			439			347			254			658			327
Residential real estate	93			52			72			64			101			145			137
Home equity	156			339			243			335			572			495			757
Installment	27			31			49			93			61			58			109
Credit card	64			43			29			39			50			107			84
Total recoveries	1,053			2,699			2,628			1,434			1,334			3,752			2,013
Total net charge-offs	3,083			(850)			3,531			10,225			1,831			2,233			15,734
Ending allowance for credit losses	$	158,661			$	143,885			$	57,650			$	56,552			$	61,549			$	158,661			$	61,549
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial and industrial	0.13	%		(0.15)	%		0.18	%		1.42	%		0.25	%		0.01	%		1.09	%
Lease financing	0.00	%		0.00	%		0.27	%		0.00	%		0.00	%		0.00	%		0.22	%
Construction real estate	(0.01)	%		0.00	%		0.00	%		0.00	%		0.00	%		(0.01)	%		(0.03)	%
Commercial real estate	0.15	%		(0.02)	%		0.14	%		0.02	%		(0.02)	%		0.06	%		0.05	%
Residential real estate	0.02	%		0.02	%		0.04	%		0.08	%		0.02	%		0.02	%		0.02	%
Home equity	0.14	%		(0.04)	%		0.29	%		0.15	%		0.06	%		0.05	%		0.10	%
Installment	(0.10)	%		0.15	%		(0.08)	%		(0.13)	%		0.08	%		0.03	%		0.04	%
Credit card	1.54	%		2.15	%		2.27	%		4.40	%		1.92	%		1.86	%		2.26	%
Total net charge-offs	0.12	%		(0.04)	%		0.15	%		0.45	%		0.08	%		0.05	%		0.36	%
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans (1)
Commercial and industrial	$	33,906			$	21,126			$	24,346			$	28,358			$	18,502			$	33,906			$	18,502
Lease financing	1,353			222			223			284			295			1,353			295
Construction real estate	0			0			0			5			6			0			6
Commercial real estate	14,002			10,050			7,295			14,889			15,981			14,002			15,981
Residential real estate	12,813			11,163			10,892			11,655			11,627			12,813			11,627
Home equity	5,604			5,821			5,242			5,427			4,745			5,604			4,745
Installment	201			145			167			75			195			201			195
Nonaccrual loans	67,879			48,527			48,165			60,693			51,351			67,879			51,351
Accruing troubled debt restructurings (TDRs)	8,377			22,206			11,435			18,450			37,420			8,377			37,420
Total nonperforming loans	76,256			70,733			59,600			79,143			88,771			76,256			88,771
Other real estate owned (OREO)	1,872			1,467			2,033			1,613			1,421			1,872			1,421
Total nonperforming assets	78,128			72,200			61,633			80,756			90,192			78,128			90,192
Accruing loans past due 90 days or more	124			120			201			287			107			124			107
Total underperforming assets	$	78,252			$	72,320			$	61,834			$	81,043			$	90,299			$	78,252			$	90,299
Total classified assets	$	125,543			$	124,510			$	89,250			$	132,500			$	147,753			$	125,543			$	147,753
CREDIT QUALITY RATIOS
Allowance for credit losses to
Nonaccrual loans	233.74	%		296.51	%		119.69	%		93.18	%		119.86	%		233.74	%		119.86	%
Nonperforming loans	208.06	%		203.42	%		96.73	%		71.46	%		69.33	%		208.06	%		69.33	%
Total ending loans	1.56	%		1.55	%		0.63	%		0.62	%		0.69	%		1.56	%		0.69	%
Nonperforming loans to total loans	0.75	%		0.76	%		0.65	%		0.87	%		0.99	%		0.75	%		0.99	%
Nonperforming assets to
Ending loans, plus OREO	0.77	%		0.78	%		0.67	%		0.89	%		1.00	%		0.77	%		1.00	%
Total assets	0.49	%		0.48	%		0.42	%		0.56	%		0.62	%		0.49	%		0.62	%
Nonperforming assets, excluding accruing TDRs to
Ending loans, plus OREO	0.68	%		0.54	%		0.55	%		0.69	%		0.59	%		0.68	%		0.59	%
Total assets	0.44	%		0.33	%		0.35	%		0.43	%		0.37	%		0.44	%		0.37	%
Classified assets to total assets	0.79	%		0.83	%		0.62	%		0.92	%		1.02	%		0.79	%		1.02	%
(1)  Nonaccrual loans include nonaccrual TDRs of $32.7 million, $18.4 million, $18.5 million, $21.5 million, and $11.0 million, as of June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, respectively.

 

 

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)
											Six months ended,
	June 30,		Mar. 31,		Dec. 31,		Sep. 30,		June 30,		June 30,		June 30,
	2020		2020		2019		2019		2019		2020		2019
PER COMMON SHARE
Market Price
High	$	16.38			$	25.52			$	26.04			$	25.49			$	25.80			$	25.52			$	28.56
Low	$	11.52			$	12.67			$	23.24			$	22.37			$	22.16			$	11.52			$	22.16
Close	$	13.89			$	14.91			$	25.44			$	24.48			$	24.22			$	13.89			$	24.22
Average shares outstanding - basic	97,220,748			97,736,690			98,684,706			98,517,025			98,083,799			97,478,719			98,005,379
Average shares outstanding - diluted	97,988,600			98,356,214			99,232,167			99,077,723			98,648,384			98,172,408			98,542,947
Ending shares outstanding	98,018,858			97,968,958			98,490,998			100,094,819			98,647,690			98,018,858			98,647,690
Total shareholders' equity	$	2,221,019			$	2,179,383			$	2,247,705			$	2,261,313			$	2,188,189			$	2,221,019			$	2,188,189
REGULATORY CAPITAL	Preliminary										Preliminary
Common equity tier 1 capital	$	1,267,609			$	1,243,152			$	1,245,746			$	1,253,803			$	1,281,406			$	1,267,609			$	1,281,406
Common equity tier 1 capital ratio	11.44	%		11.27	%		11.30	%		11.52	%		12.00	%		11.44	%		12.00	%
Tier 1 capital	$	1,310,276			$	1,285,705			$	1,288,185			$	1,296,399			$	1,323,905			$	1,310,276			$	1,323,905
Tier 1 ratio	11.83	%		11.66	%		11.69	%		11.91	%		12.40	%		11.83	%		12.40	%
Total capital	$	1,676,532			$	1,493,100			$	1,475,813			$	1,482,708			$	1,515,382			$	1,676,532			$	1,515,382
Total capital ratio	15.13	%		13.54	%		13.39	%		13.62	%		14.20	%		15.13	%		14.20	%
Total capital in excess of minimum requirement	$	513,267			$	335,229			$	318,315			$	339,935			$	394,571			$	513,267			$	394,571
Total risk-weighted assets	$	11,078,714			$	11,027,347			$	11,023,795			$	10,883,554			$	10,674,393			$	11,078,714			$	10,674,393
Leverage ratio	8.98	%		9.49	%		9.58	%		9.75	%		10.02	%		8.98	%		10.02	%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets	13.99	%		14.47	%		15.49	%		15.62	%		15.16	%		13.99	%		15.16	%
Ending tangible shareholders' equity to ending tangible assets	8.09	%		8.25	%		9.07	%		9.17	%		9.34	%		8.09	%		9.34	%
Average shareholders' equity to average assets	13.91	%		15.21	%		15.53	%		15.43	%		15.22	%		14.54	%		15.12	%
Average tangible shareholders' equity to average tangible assets	7.94	%		8.79	%		9.07	%		9.35	%		9.26	%		8.34	%		9.11	%
REPURCHASE PROGRAM (1)
Shares repurchased	0			880,000			1,609,778			1,143,494			0			880,000			0
Average share repurchase price	N/A		$	18.96			$	24.13			$	23.94			N/A		$	18.96			N/A
Total cost of shares repurchased	N/A		$	16,686			$	38,846			$	27,372			N/A		$	16,686			N/A
(1) Represents share repurchases as part of publicly announced plans.
N/A = Not applicable

 

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SOURCE First Financial Bancorp.

FAQ

What were First Financial Bancorp's earnings per share for Q2 2020?

First Financial Bancorp reported earnings per diluted share of $0.38 for Q2 2020.

How did First Financial's net income in Q2 2020 compare to Q1 2020?

Net income increased from $28.6 million in Q1 2020 to $37.4 million in Q2 2020.

What impact did COVID-19 have on First Financial Bancorp's financial results?

COVID-19 led to a provision for credit losses of $20.2 million and affected net income compared to previous periods.

What was the loan growth reported by First Financial Bancorp?

First Financial Bancorp reported a loan growth of $873.9 million, or 37.8% annualized.

What was the efficiency ratio for First Financial in Q2 2020?

The efficiency ratio for Q2 2020 was reported at 57.5%.