First Financial Bancorp Announces Second Quarter 2021 Financial Results

Rhea-AI Summary

First Financial Bancorp (FFBC) reported a net income of $50.9 million for Q2 2021, translating to earnings per diluted share of $0.52, compared to $47.3 million in Q1 2021. Adjusted earnings stood at $0.58 per diluted share. The institution showcased a return on average assets of 1.26% and a net interest margin of 3.31%. Notably, the bank repurchased over 1.3 million shares and experienced a provision recapture of $4.2 million, reflecting improved credit conditions. Average transactional deposits rose 17.8% year-over-year, although loan balances declined due to PPP forgiveness.

Positive

• Q2 2021 net income increased to $50.9 million from $47.3 million in Q1 2021.
• Adjusted earnings per diluted share rose to $0.58.
• Return on average tangible common equity at 16.31%.
• Record foreign exchange income of $12 million, up 11.9% from the previous quarter.
• 23% increase in loan originations in Q2 2021.

Negative

• Loan balances declined primarily due to $288.8 million in PPP forgiveness.
• Noninterest expenses rose to $99.6 million.

CINCINNATI, July 22, 2021 /PRNewswire/ --

• Earnings per diluted share of $0.52; $0.58 on an adjusted⁽¹⁾ basis
• Return on average assets of 1.26%; 1.39% as adjusted⁽¹⁾
• Net interest margin FTE⁽¹⁾ of 3.31%
• Provision recapture of $4.2 million
• Repurchased 1,308,945 shares during the quarter

First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and six months ended June 30, 2021. 

For the three months ended June 30, 2021, the Company reported net income of $50.9 million, or $0.52 per diluted common share.  These results compare to net income of $47.3 million, or $0.48 per diluted common share, for the first quarter of 2021 and $37.4 million, or $0.38 per diluted common share, for the second quarter of 2020.  For the six months ended June 30, 2021, First Financial had earnings per diluted common share of $1.01 compared to $0.67 for the same period in 2020.

Return on average assets for the second quarter of 2021 was 1.26% while return on average tangible common equity was 16.31%⁽¹⁾.  These compare to returns on average assets of 1.20% and 0.96%, and returns on average tangible common equity of 15.24%⁽¹⁾ and 12.90%⁽¹⁾, in the first quarter of 2021 and the second quarter of 2020, respectively.

Second quarter 2021 highlights include:

• After adjustments⁽¹⁾ for certain nonrecurring items:
• Net income of $0.58 per diluted common share
• 1.39% return on average assets
• 18.03% return on average tangible common equity
                         
• Net interest margin of 3.31% on a fully tax-equivalent basis⁽¹⁾ in line with expectations
• 9 basis point reduction from linked quarter driven by lower yields on earning assets and additional days during the second quarter
                    
• Noninterest income of $43.0 million, or $43.1 million as adjusted⁽¹⁾
• Record foreign exchange income of $12.0 million; increased $1.3 million, or 11.9%, compared to linked quarter
• Record wealth management fees of $6.2 million; increased $0.6 million, or 10.4%, compared to the linked quarter
                            
• Noninterest expenses of $99.6 million, or $91.8 million as adjusted⁽¹⁾
• Adjustments⁽¹⁾ include:
• $3.8 million of legal settlement costs
• $2.8 million of branch consolidation costs
• $1.2 million of tax credit investment write-downs
• Efficiency ratio of 63.5%; 58.4% as adjusted⁽¹⁾
                                 
• Loan balances declined during the quarter driven by $288.8 million of PPP forgiveness and elevated prepayments

⁽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.

• Average transactional deposit balances grew $469.6 million compared to the linked quarter; 17.8% on an annualized basis
                               
• Total Allowance for Credit Losses of $173.1 million; Total quarterly provision recapture of $4.2 million
• Loans and leases - ACL of $159.6 million, 1.68% of total loans; 1.75% of loans excluding PPP
• Unfunded Commitments - ACL of $13.6 million
• Provision recapture driven by improvements in economic conditions and classified asset balances, coupled with lower net charge-offs
                                  
• Strong capital ratios
• Total capital of 15.31%
• Tier 1 common equity of 11.78%
• Tangible common equity of 8.37%⁽¹⁾; 8.61%⁽¹⁾ excluding PPP loans
• Tangible book value per share of $13.08⁽¹⁾; $0.30 increase compared to linked quarter
• Repurchased 1,308,945 shares during second quarter; 2,149,060 shares repurchased in 2021

Archie Brown, President and Chief Executive Officer, commented, "We are very pleased to announce second quarter results that are highlighted by robust earnings, higher fee income, lower credit costs and improving credit trends."

Mr. Brown continued, "Our core quarterly financial metrics reflected the strong quarter with an adjusted⁽¹⁾ earnings per share of $0.58, adjusted⁽¹⁾ return on assets of 1.39%, and an adjusted⁽¹⁾ efficiency ratio of 58.4%.  The quarterly performance was bolstered by higher fee revenue in interchange, and record revenue in Wealth Management and Bannockburn.  Additionally, provision recapture during the period positively impacted our results, driven by improved credit quality trends, which included declines in net charge-offs and classified asset balances.  We are optimistic about the economic environment and expect further reductions in credit costs in the coming periods."

Mr. Brown added, "We were pleased with a 23% increase in loan originations for the quarter, driven primarily by our core commercial markets, in addition to consumer and mortgage banking.  Loan payoffs accelerated during the quarter in almost all commercial banking areas, with larger payoff amounts in Commercial Finance and ICRE driving an overall reduction in core loan balances for the quarter.  Given the state of our loan pipeline, we expect originations to remain strong in the second half of the year, however we also anticipate higher payoffs to continue due to the amount of liquidity in the market.  Average transactional deposits increased 18% on an annualized basis, as clients continued to build liquidity from recent government stimulus actions, however we believe these balances may have peaked as we began to experience some outflows late in the quarter.  Our capital ratios remained strong and in excess of both internal and external targets.  We also remained active in our share buyback program, repurchasing over 1 million shares during the quarter.  When combined with the common dividend, the share repurchases approximate a return to shareholders of 98% of adjusted⁽¹⁾ quarterly earnings.  We anticipate further share buyback activity in the third quarter, absent higher priority capital deployment alternatives."

Mr. Brown concluded, "Throughout the summer, the number of associates working in our offices has increased steadily in anticipation of a broader return, and we are very much looking forward to welcoming all of our associates back in the beginning of August.  We have learned a great deal from the remote environment during the last 16 months and are excited to incorporate the best practices derived from that experience into our culture moving forward, including greater associate flexibility."

Full detail of the Company's second quarter 2021 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 23, 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 10158382.  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, 2020, 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, 2021, the Company had $16.0 billion in assets, $9.5 billion in loans, $12.5 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 $3.2 billion in assets under management as of June 30, 2021.  The Company operated 139 full service banking centers as of June 30, 2021, primarily in Ohio, Indiana, Kentucky and Illinois, 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,
	2021				2021				2020				2020				2020				2021				2020
RESULTS OF OPERATIONS
Net income	$	50,888			$	47,315			$	48,312			$	41,477			$	37,393			$	98,203			$	66,021
Net earnings per share - basic	$	0.53			$	0.49			$	0.50			$	0.43			$	0.38			$	1.02			$	0.68
Net earnings per share - diluted	$	0.52			$	0.48			$	0.49			$	0.42			$	0.38			$	1.01			$	0.67
Dividends declared per share	$	0.23			$	0.23			$	0.23			$	0.23			$	0.23			$	0.46			$	0.46
KEY FINANCIAL RATIOS
Return on average assets	1.26		%		1.20		%		1.20		%		1.04		%		0.96		%		1.23		%		0.88		%
Return on average shareholders' equity	9.02		%		8.44		%		8.52		%		7.40		%		6.88		%		8.73		%		6.04		%
Return on average tangible shareholders' equity (1)	16.31		%		15.24		%		15.50		%		13.61		%		12.90		%		15.78		%		11.29		%
Net interest margin	3.27		%		3.35		%		3.45		%		3.32		%		3.38		%		3.31		%		3.54		%
Net interest margin (fully tax equivalent) (1)(2)	3.31		%		3.40		%		3.49		%		3.36		%		3.44		%		3.35		%		3.60		%
Ending shareholders' equity as a percent of ending assets	14.15		%		13.97		%		14.29		%		14.11		%		13.99		%		14.15		%		13.99		%
Ending tangible shareholders' equity as a percent of:
Ending tangible assets (1)	8.37		%		8.22		%		8.47		%		8.25		%		8.09		%		8.37		%		8.09		%
Risk-weighted assets (1)	11.12		%		11.02		%		11.29		%		11.07		%		10.89		%		11.12		%		10.89		%
Average shareholders' equity as a percent of average assets	13.96		%		14.17		%		14.07		%		14.08		%		13.91		%		14.06		%		14.54		%
Average tangible shareholders' equity as a percent of
average tangible assets (1)	8.23		%		8.38		%		8.26		%		8.18		%		7.94		%		8.30		%		8.34		%
Book value per share	$	23.59			$	23.16			$	23.28			$	22.94			$	22.66			$	23.59			$	22.66
Tangible book value per share (1)	$	13.08			$	12.78			$	12.93			$	12.56			$	12.26			$	13.08			$	12.26
Common equity tier 1 ratio (3)	11.78		%		11.81		%		11.82		%		11.63		%		11.49		%		11.78		%		11.49		%
Tier 1 ratio (3)	12.16		%		12.19		%		12.20		%		12.02		%		11.87		%		12.16		%		11.87		%
Total capital ratio (3)	15.31		%		15.41		%		15.55		%		15.37		%		15.19		%		15.31		%		15.19		%
Leverage ratio (3)	9.14		%		9.34		%		9.55		%		9.55		%		8.98		%		9.14		%		8.98		%
AVERAGE BALANCE SHEET ITEMS
Loans (4)	$	9,831,965			$	9,951,855			$	10,127,881			$	10,253,392			$	10,002,379			$	9,891,579			$	9,611,511
Investment securities	4,130,207				3,782,993				3,403,839				3,162,832				3,164,243				3,957,559				3,139,983
Interest-bearing deposits with other banks	45,593				46,912				143,884				40,277				91,990				46,249				65,661
Total earning assets	$	14,007,765			$	13,781,760			$	13,675,604			$	13,456,501			$	13,258,612			$	13,895,387			$	12,817,155
Total assets	$	16,215,469			$	16,042,654			$	16,030,986			$	15,842,010			$	15,710,204			$	16,129,539			$	15,117,313
Noninterest-bearing deposits	$	4,003,626			$	3,840,046			$	3,720,417			$	3,535,432			$	3,335,866			$	3,922,288			$	2,989,553
Interest-bearing deposits	8,707,553				8,531,822				8,204,306				8,027,082				8,395,229				8,620,173				7,993,010
Total deposits	$	12,711,179			$	12,371,868			$	11,924,723			$	11,562,514			$	11,731,095			$	12,542,461			$	10,982,563
Borrowings	$	749,114			$	886,379			$	1,307,461			$	1,519,748			$	1,272,819			$	817,367			$	1,504,293
Shareholders' equity	$	2,263,687			$	2,272,749			$	2,256,062			$	2,230,422			$	2,185,865			$	2,268,193			$	2,197,799
CREDIT QUALITY RATIOS
Allowance to ending loans	1.68		%		1.71		%		1.77		%		1.65		%		1.56		%		1.68		%		1.56		%
Allowance to nonaccrual loans	184.77		%		199.33		%		217.55		%		216.28		%		233.74		%		184.77		%		233.74		%
Allowance to nonperforming loans	162.12		%		175.44		%		199.97		%		196.69		%		208.06		%		162.12		%		208.06		%
Nonperforming loans to total loans	1.03		%		0.97		%		0.89		%		0.84		%		0.75		%		1.03		%		0.75		%
Nonperforming assets to ending loans, plus OREO	1.04		%		0.98		%		0.90		%		0.86		%		0.77		%		1.04		%		0.77		%
Nonperforming assets to total assets	0.62		%		0.60		%		0.56		%		0.55		%		0.49		%		0.62		%		0.49		%
Classified assets to total assets	1.14		%		1.22		%		0.89		%		0.84		%		0.79		%		1.14		%		0.79		%
Net charge-offs to average loans (annualized)	0.23		%		0.38		%		0.26		%		0.21		%		0.12		%		0.30		%		0.05		%

(1) Non-GAAP measure.  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.

(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 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.

(3) June 30, 2021 regulatory capital ratios are preliminary.

(4) 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,
	2021				2020				% Change			2021				2020				% Change
Interest income
Loans and leases, including fees	$	97,494			$	105,900			(7.9)	%		$	196,425			$	221,675			(11.4)	%
Investment securities
Taxable	19,524				18,476				5.7	%		38,131				37,481				1.7	%
Tax-exempt	4,871				4,937				(1.3)	%		9,914				9,519				4.1	%
Total investment securities interest	24,395				23,413				4.2	%		48,045				47,000				2.2	%
Other earning assets	25				47				(46.8)	%		53				189				(72.0)	%
Total interest income	121,914				129,360				(5.8)	%		244,523				268,864				(9.1)	%
Interest expense
Deposits	3,693				11,751				(68.6)	%		8,026				28,116				(71.5)	%
Short-term borrowings	53				1,274				(95.8)	%		120				6,361				(98.1)	%
Long-term borrowings	4,142				4,759				(13.0)	%		8,475				8,529				(0.6)	%
Total interest expense	7,888				17,784				(55.6)	%		16,621				43,006				(61.4)	%
Net interest income	114,026				111,576				2.2	%		227,902				225,858				0.9	%
Provision for credit losses-loans and leases	(4,756)				17,859				(126.6)	%		(1,306)				41,739				(103.1)	%
Provision for credit losses-unfunded commitments	517				2,370				(78.2)	%		1,055				3,938				(73.2)	%
Net interest income after provision for credit losses	118,265				91,347				29.5	%		228,153				180,181				26.6	%
Noninterest income
Service charges on deposit accounts	7,537				6,001				25.6	%		14,683				14,436				1.7	%
Trust and wealth management fees	6,216				5,254				18.3	%		11,846				10,951				8.2	%
Bankcard income	3,732				2,844				31.2	%		6,860				5,542				23.8	%
Client derivative fees	1,795				2,984				(39.8)	%		3,351				6,089				(45.0)	%
Foreign exchange income	12,037				6,576				83.0	%		22,794				16,542				37.8	%
Net gains from sales of loans	8,489				16,662				(49.1)	%		17,943				19,493				(8.0)	%
Net gains (losses) on sale of investment securities	(265)				2				N/M			(431)				(57)				N/M
Unrealized  gain (loss) on equity  securities	161				150				7.3	%		273				52				N/M
Other	3,285				2,252				45.9	%		5,990				5,061				18.4	%
Total noninterest income	42,987				42,725				0.6	%		83,309				78,109				6.7	%
Noninterest expenses
Salaries and employee benefits	60,784				55,925				8.7	%		122,037				110,747				10.2	%
Net occupancy	5,535				5,378				2.9	%		11,239				11,482				(2.1)	%
Furniture and equipment	3,371				3,681				(8.4)	%		7,340				7,734				(5.1)	%
Data processing	7,864				7,019				12.0	%		15,151				13,408				13.0	%
Marketing	2,035				1,339				52.0	%		3,396				2,559				32.7	%
Communication	746				907				(17.8)	%		1,584				1,797				(11.9)	%
Professional services	2,029				2,205				(8.0)	%		3,479				4,480				(22.3)	%
State intangible tax	1,201				1,514				(20.7)	%		2,403				3,030				(20.7)	%
FDIC assessments	1,362				1,290				5.6	%		2,711				2,695				0.6	%
Intangible amortization	2,480				2,791				(11.1)	%		4,959				5,583				(11.2)	%
Other	12,236				6,640				84.3	%		17,850				14,840				20.3	%
Total noninterest expenses	99,643				88,689				12.4	%		192,149				178,355				7.7	%
Income before income taxes	61,609				45,383				35.8	%		119,313				79,935				49.3	%
Income tax expense	10,721				7,990				34.2	%		21,110				13,914				51.7	%
Net income	$	50,888			$	37,393			36.1	%		$	98,203			$	66,021			48.7	%
ADDITIONAL DATA
Net earnings per share - basic	$	0.53			$	0.38						$	1.02			$	0.68
Net earnings per share - diluted	$	0.52			$	0.38						$	1.01			$	0.67
Dividends declared per share	$	0.23			$	0.23						$	0.46			$	0.46
Return on average assets	1.26		%		0.96		%					1.23		%		0.88		%
Return on average shareholders' equity	9.02		%		6.88		%					8.73		%		6.04		%
Interest income	$	121,914			$	129,360			(5.8)	%		$	244,523			$	268,864			(9.1)	%
Tax equivalent adjustment	1,619				1,664				(2.7)	%		3,271				3,288				(0.5)	%
Interest income - tax equivalent	123,533				131,024				(5.7)	%		247,794				272,152				(9.0)	%
Interest expense	7,888				17,784				(55.6)	%		16,621				43,006				(61.4)	%
Net interest income - tax equivalent	$	115,645			$	113,240			2.1	%		$	231,173			$	229,146			0.9	%
Net interest margin	3.27		%		3.38		%					3.31		%		3.54		%
Net interest margin (fully tax equivalent) (1)	3.31		%		3.44		%					3.35		%		3.60		%
Full-time equivalent employees	2,053				2,076

(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 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)
	2021
	Second				First				Year to				% Change
	Quarter				Quarter				Date				Linked Qtr.
Interest income
Loans and leases, including fees	$	97,494			$	98,931			$	196,425			(1.5)	%
Investment securities
Taxable	19,524				18,607				38,131				4.9	%
Tax-exempt	4,871				5,043				9,914				(3.4)	%
Total investment securities interest	24,395				23,650				48,045				3.2	%
Other earning assets	25				28				53				(10.7)	%
Total interest income	121,914				122,609				244,523				(0.6)	%
Interest expense
Deposits	3,693				4,333				8,026				(14.8)	%
Short-term borrowings	53				67				120				(20.9)	%
Long-term borrowings	4,142				4,333				8,475				(4.4)	%
Total interest expense	7,888				8,733				16,621				(9.7)	%
Net interest income	114,026				113,876				227,902				0.1	%
Provision for credit losses-loans and leases	(4,756)				3,450				(1,306)				(237.9)	%
Provision for credit losses-unfunded commitments	517				538				1,055				(3.9)	%
Net interest income after provision for credit losses	118,265				109,888				228,153				7.6	%
Noninterest income
Service charges on deposit accounts	7,537				7,146				14,683				5.5	%
Trust and wealth management fees	6,216				5,630				11,846				10.4	%
Bankcard income	3,732				3,128				6,860				19.3	%
Client derivative fees	1,795				1,556				3,351				15.4	%
Foreign exchange income	12,037				10,757				22,794				11.9	%
Net gains from sales of loans	8,489				9,454				17,943				(10.2)	%
Net gains (losses) on sale of investment securities	(265)				(166)				(431)				59.6	%
Unrealized  gain (loss) on equity  securities	161				112				273				43.8	%
Other	3,285				2,705				5,990				21.4	%
Total noninterest income	42,987				40,322				83,309				6.6	%
Noninterest expenses
Salaries and employee benefits	60,784				61,253				122,037				(0.8)	%
Net occupancy	5,535				5,704				11,239				(3.0)	%
Furniture and equipment	3,371				3,969				7,340				(15.1)	%
Data processing	7,864				7,287				15,151				7.9	%
Marketing	2,035				1,361				3,396				49.5	%
Communication	746				838				1,584				(11.0)	%
Professional services	2,029				1,450				3,479				39.9	%
State intangible tax	1,201				1,202				2,403				(0.1)	%
FDIC assessments	1,362				1,349				2,711				1.0	%
Intangible amortization	2,480				2,479				4,959				0.0	%
Other	12,236				5,614				17,850				118.0	%
Total noninterest expenses	99,643				92,506				192,149				7.7	%
Income before income taxes	61,609				57,704				119,313				6.8	%
Income tax expense	10,721				10,389				21,110				3.2	%
Net income	$	50,888			$	47,315			$	98,203			7.6	%
ADDITIONAL DATA
Net earnings per share - basic	$	0.53			$	0.49			$	1.02
Net earnings per share - diluted	$	0.52			$	0.48			$	1.01
Dividends declared per share	$	0.23			$	0.23			$	0.46
Return on average assets	1.26		%		1.20		%		1.23		%
Return on average shareholders' equity	9.02		%		8.44		%		8.73		%
Interest income	$	121,914			$	122,609			$	244,523			(0.6)	%
Tax equivalent adjustment	1,619				1,652				3,271				(2.0)	%
Interest income - tax equivalent	123,533				124,261				247,794				(0.6)	%
Interest expense	7,888				8,733				16,621				(9.7)	%
Net interest income - tax equivalent	$	115,645			$	115,528			$	231,173			0.1	%
Net interest margin	3.27		%		3.35		%		3.31		%
Net interest margin (fully tax equivalent) (1)	3.31		%		3.40		%		3.35		%
Full-time equivalent employees	2,053				2,063

(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 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				Full
	Quarter				Quarter				Quarter				Quarter				Year
Interest income
Loans and leases, including fees	$	106,733			$	103,249			$	105,900			$	115,775			$	431,657
Investment securities
Taxable	18,402				17,906				18,476				19,005				73,789
Tax-exempt	4,839				4,884				4,937				4,582				19,242
Total investment securities interest	23,241				22,790				23,413				23,587				93,031
Other earning assets	55				31				47				142				275
Total interest income	130,029				126,070				129,360				139,504				524,963
Interest expense
Deposits	5,920				7,886				11,751				16,365				41,922
Short-term borrowings	30				51				1,274				5,087				6,442
Long-term borrowings	5,606				5,953				4,759				3,770				20,088
Total interest expense	11,556				13,890				17,784				25,222				68,452
Net interest income	118,473				112,180				111,576				114,282				456,511
Provision for credit losses-loans and leases	13,758				15,299				17,859				23,880				70,796
Provision for credit losses-unfunded commitments	(2,250)				(1,925)				2,370				1,568				(237)
Net interest income after provision for credit losses	106,965				98,806				91,347				88,834				385,952
Noninterest income
Service charges on deposit accounts	7,654				7,356				6,001				8,435				29,446
Trust and wealth management fees	5,395				4,940				5,254				5,697				21,286
Bankcard income	3,060				3,124				2,844				2,698				11,726
Client derivative fees	2,021				2,203				2,984				3,105				10,313
Foreign exchange income	12,305				10,530				6,576				9,966				39,377
Net gains from sales of loans	13,089				18,594				16,662				2,831				51,176
Net gains (losses) on sale of investment securities	4,618				2				2				(59)				4,563
Unrealized  gain (loss) on equity  securities	8,975				18				150				(98)				9,045
Other	4,398				2,732				2,252				2,809				12,191
Total noninterest income	61,515				49,499				42,725				35,384				189,123
Noninterest expenses
Salaries and employee benefits	62,263				63,769				55,925				54,822				236,779
Net occupancy	6,159				5,625				5,378				6,104				23,266
Furniture and equipment	3,596				3,638				3,681				4,053				14,968
Data processing	7,269				6,837				7,019				6,389				27,514
Marketing	1,999				1,856				1,339				1,220				6,414
Communication	840				855				907				890				3,492
Professional services	3,038				2,443				2,205				2,275				9,961
Debt extinguishment	7,257				0				0				0				7,257
State intangible tax	1,514				1,514				1,514				1,516				6,058
FDIC assessments	1,065				1,350				1,290				1,405				5,110
Intangible amortization	2,764				2,779				2,791				2,792				11,126
Other	17,034				6,845				6,640				8,200				38,719
Total noninterest expenses	114,798				97,511				88,689				89,666				390,664
Income before income taxes	53,682				50,794				45,383				34,552				184,411
Income tax expense (benefit)	5,370				9,317				7,990				5,924				28,601
Net income	$	48,312			$	41,477			$	37,393			$	28,628			$	155,810
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
Tax equivalent adjustment	1,613				1,628				1,664				1,624				6,529
Interest income - tax equivalent	131,642				127,698				131,024				141,128				531,492
Interest expense	11,556				13,890				17,784				25,222				68,452
Net interest income - tax equivalent	$	120,086			$	113,808			$	113,240			$	115,906			$	463,040
Net interest margin	3.45		%		3.32		%		3.38		%		3.71		%		3.46		%
Net interest margin (fully tax equivalent) (1)	3.49		%		3.36		%		3.44		%		3.77		%		3.51		%
Full-time equivalent employees	2,075				2,065				2,076				2,067

(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 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
	2021				2021				2020				2020				2020				Linked Qtr.			Comp Qtr.
ASSETS
Cash and due from banks	$	206,918			$	210,191			$	231,054			$	207,128			$	283,639			(1.6)	%		(27.0)	%
Interest-bearing deposits with other banks	38,610				19,180				20,305				38,806				38,845				101.3	%		(0.6)	%
Investment securities available-for-sale	3,955,839				3,753,763				3,424,580				3,004,963				2,897,413				5.4	%		36.5	%
Investment securities held-to-maturity	112,456				121,945				131,687				118,072				127,347				(7.8)	%		(11.7)	%
Other investments	129,432				131,814				133,198				118,292				132,366				(1.8)	%		(2.2)	%
Loans held for sale	31,546				34,590				41,103				69,008				43,950				(8.8)	%		(28.2)	%
Loans and leases
Commercial and industrial	2,701,203				3,044,825				3,007,509				3,292,313				3,322,374				(11.3)	%		(18.7)	%
Lease financing	68,229				66,574				72,987				74,742				80,087				2.5	%		(14.8)	%
Construction real estate	630,329				642,709				636,096				575,648				506,085				(1.9)	%		24.6	%
Commercial real estate	4,332,561				4,396,582				4,307,858				4,347,125				4,343,702				(1.5)	%		(0.3)	%
Residential real estate	932,112				946,522				1,003,086				1,027,702				1,043,745				(1.5)	%		(10.7)	%
Home equity	711,756				709,667				743,099				754,743				764,171				0.3	%		(6.9)	%
Installment	89,143				82,421				81,850				84,629				79,150				8.2	%		12.6	%
Credit card	46,177				44,669				48,485				43,907				42,397				3.4	%		8.9	%
Total loans	9,511,510				9,933,969				9,900,970				10,200,809				10,181,711				(4.3)	%		(6.6)	%
Less:
Allowance for credit losses	159,590				169,923				175,679				168,544				158,661				(6.1)	%		0.6	%
Net loans	9,351,920				9,764,046				9,725,291				10,032,265				10,023,050				(4.2)	%		(6.7)	%
Premises and equipment	192,238				204,537				207,211				209,474				211,164				(6.0)	%		(9.0)	%
Goodwill	937,771				937,771				937,771				937,771				937,771				0.0	%		0.0	%
Other intangibles	59,391				61,984				64,552				67,419				70,325				(4.2)	%		(15.5)	%
Accrued interest and other assets	1,021,798				935,250				1,056,382				1,122,449				1,105,020				9.3	%		(7.5)	%
Total Assets	$	16,037,919			$	16,175,071			$	15,973,134			$	15,925,647			$	15,870,890			(0.8)	%		1.1	%
LIABILITIES
Deposits
Interest-bearing demand	$	2,963,151			$	2,914,761			$	2,914,787			$	2,632,467			$	2,657,841			1.7	%		11.5	%
Savings	4,093,229				4,006,181				3,680,774				3,446,678				3,287,314				2.2	%		24.5	%
Time	1,548,109				1,731,757				1,872,733				1,935,392				2,241,212				(10.6)	%		(30.9)	%
Total interest-bearing deposits	8,604,489				8,652,699				8,468,294				8,014,537				8,186,367				(0.6)	%		5.1	%
Noninterest-bearing	3,901,691				3,995,370				3,763,709				3,552,893				3,515,048				(2.3)	%		11.0	%
Total deposits	12,506,180				12,648,069				12,232,003				11,567,430				11,701,415				(1.1)	%		6.9	%
Federal funds purchased and securities sold
under agreements to repurchase	255,791				181,387				166,594				247,658				154,347				41.0	%		65.7	%
FHLB short-term borrowings	217,000				0				0				0				0				100.0	%		100.0	%
Total short-term borrowings	472,791				181,387				166,594				247,658				154,347				160.7	%		206.3	%
Long-term debt	313,039				583,722				776,202				1,341,164				1,285,767				(46.4)	%		(75.7)	%
Total borrowed funds	785,830				765,109				942,796				1,588,822				1,440,114				2.7	%		(45.4)	%
Accrued interest and other liabilities	476,402				502,951				516,265				521,580				508,342				(5.3)	%		(6.3)	%
Total Liabilities	13,768,412				13,916,129				13,691,064				13,677,832				13,649,871				(1.1)	%		0.9	%
SHAREHOLDERS' EQUITY
Common stock	1,635,470				1,633,137				1,638,947				1,637,489				1,635,070				0.1	%		0.0	%
Retained earnings	773,857				745,220				720,429				694,484				675,532				3.8	%		14.6	%
Accumulated other comprehensive income (loss)	30,735				18,101				48,664				42,266				36,431				69.8	%		(15.6)	%
Treasury stock, at cost	(170,555)				(137,516)				(125,970)				(126,424)				(126,014)				24.0	%		35.3	%
Total Shareholders' Equity	2,269,507				2,258,942				2,282,070				2,247,815				2,221,019				0.5	%		2.2	%
Total Liabilities and Shareholders' Equity	$	16,037,919			$	16,175,071			$	15,973,134			$	15,925,647			$	15,870,890			(0.8)	%		1.1	%

 

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,
	2021				2021				2020				2020				2020				2021				2020
ASSETS
Cash and due from banks	$	237,964			$	232,275			$	228,427			$	233,216			$	284,726			$	235,135			$	260,211
Interest-bearing deposits with other banks	45,593				46,912				143,884				40,277				91,990				46,249				65,661
Investment securities	4,130,207				3,782,993				3,403,839				3,162,832				3,164,243				3,957,559				3,139,983
Loans held for sale	28,348				29,689				42,402				45,186				36,592				29,015				24,883
Loans and leases
Commercial and industrial	2,953,185				3,029,716				3,182,749				3,299,259				3,058,677				2,991,239				2,754,785
Lease financing	66,124				70,508				74,107				78,500				81,218				68,304				83,500
Construction real estate	630,351				647,655				608,401				536,870				495,407				638,955				498,439
Commercial real estate	4,372,679				4,339,349				4,313,408				4,364,708				4,381,647				4,356,106				4,295,496
Residential real estate	940,600				980,718				1,022,701				1,041,250				1,052,996				960,548				1,054,226
Home equity	707,409				726,134				752,425				759,994				772,424				716,720				772,753
Installment	84,768				81,377				83,509				82,016				79,016				83,082				80,125
Credit card	48,501				46,709				48,179				45,609				44,402				47,610				47,304
Total loans	9,803,617				9,922,166				10,085,479				10,208,206				9,965,787				9,862,564				9,586,628
Less:
Allowance for credit losses	169,979				177,863				172,201				165,270				155,454				173,899				138,290
Net loans	9,633,638				9,744,303				9,913,278				10,042,936				9,810,333				9,688,665				9,448,338
Premises and equipment	200,558				206,628				208,800				211,454				213,903				203,576				214,724
Goodwill	937,771				937,771				937,771				937,771				937,771				937,771				937,771
Other intangibles	60,929				63,529				66,195				69,169				72,086				62,222				73,550
Accrued interest and other assets	940,461				998,554				1,086,390				1,099,169				1,098,560				969,347				952,192
Total Assets	$	16,215,469			$	16,042,654			$	16,030,986			$	15,842,010			$	15,710,204			$	16,129,539			$	15,117,313
LIABILITIES
Deposits
Interest-bearing demand	$	2,973,930			$	2,948,682			$	2,812,748			$	2,668,635			$	2,602,917			$	2,961,376			$	2,510,555
Savings	4,096,077				3,815,314				3,547,179				3,342,514				3,173,274				3,956,471				3,074,896
Time	1,637,546				1,767,826				1,844,379				2,015,933				2,619,038				1,702,326				2,407,559
Total interest-bearing deposits	8,707,553				8,531,822				8,204,306				8,027,082				8,395,229				8,620,173				7,993,010
Noninterest-bearing	4,003,626				3,840,046				3,720,417				3,535,432				3,335,866				3,922,288				2,989,553
Total deposits	12,711,179				12,371,868				11,924,723				11,562,514				11,731,095				12,542,461				10,982,563
Federal funds purchased and securities sold
under agreements to repurchase	194,478				184,483				136,795				150,088				145,291				189,508				154,692
FHLB short-term borrowings	40,846				67,222				7,937				30,868				548,183				53,961				868,974
Total short-term borrowings	235,324				251,705				144,732				180,956				693,474				243,469				1,023,666
Long-term debt	513,790				634,674				1,162,729				1,338,792				579,345				573,898				480,627
Total borrowed funds	749,114				886,379				1,307,461				1,519,748				1,272,819				817,367				1,504,293
Accrued interest and other liabilities	491,489				511,658				542,740				529,326				520,425				501,518				432,658
Total Liabilities	13,951,782				13,769,905				13,774,924				13,611,588				13,524,339				13,861,346				12,919,514
SHAREHOLDERS' EQUITY
Common stock	1,633,950				1,636,884				1,638,032				1,636,107				1,634,405				1,635,409				1,636,628
Retained earnings	754,456				726,351				703,257				679,980				658,312				740,481				659,210
Accumulated other comprehensive loss	25,832				42,253				40,960				40,697				19,888				33,997				25,544
Treasury stock, at cost	(150,551)				(132,739)				(126,187)				(126,362)				(126,740)				(141,694)				(123,583)
Total Shareholders' Equity	2,263,687				2,272,749				2,256,062				2,230,422				2,185,865				2,268,193				2,197,799
Total Liabilities and Shareholders' Equity	$	16,215,469			$	16,042,654			$	16,030,986			$	15,842,010			$	15,710,204			$	16,129,539			$	15,117,313

 

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)
		Quarterly Averages																					Year-to-Date Averages
		June 30, 2021							March 31, 2021							June 30, 2020							June 30, 2021							June 30, 2020
		Balance				Yield			Balance				Yield			Balance				Yield			Balance				Yield			Balance				Yield
Earning assets
Investments:
Investment securities		$	4,130,207			2.37	%		$	3,782,993			2.54	%		$	3,164,243			2.97	%		$	3,957,559			2.45	%		$	3,139,983			3.02	%
Interest-bearing deposits with other banks		45,593				0.22	%		46,912				0.24	%		91,990				0.20	%		46,249				0.23	%		65,661				0.58	%
Gross loans (1)		9,831,965				3.98	%		9,951,855				4.03	%		10,002,379				4.25	%		9,891,579				4.00	%		9,611,511				4.65	%
Total earning assets		14,007,765				3.49	%		13,781,760				3.61	%		13,258,612				3.91	%		13,895,387				3.55	%		12,817,155				4.23	%
Nonearning assets
Allowance for credit losses		(169,979)							(177,863)							(155,454)							(173,899)							(138,290)
Cash and due from banks		237,964							232,275							284,726							235,135							260,211
Accrued interest and other assets		2,139,719							2,206,482							2,322,320							2,172,916							2,178,237
Total assets		$	16,215,469						$	16,042,654						$	15,710,204						$	16,129,539						$	15,117,313
Interest-bearing liabilities
Deposits:
Interest-bearing demand		$	2,973,930			0.07	%		$	2,948,682			0.07	%		$	2,602,917			0.11	%		$	2,961,376			0.07	%		$	2,510,555			0.27	%
Savings		4,096,077				0.11	%		3,815,314				0.13	%		3,173,274				0.17	%		3,956,471				0.12	%		3,074,896				0.31	%
Time		1,637,546				0.51	%		1,767,826				0.60	%		2,619,038				1.49	%		1,702,326				0.56	%		2,407,559				1.68	%
Total interest-bearing deposits		8,707,553				0.17	%		8,531,822				0.21	%		8,395,229				0.56	%		8,620,173				0.19	%		7,993,010				0.71	%
Borrowed funds
Short-term borrowings		235,324				0.09	%		251,705				0.11	%		693,474				0.74	%		243,469				0.10	%		1,023,666				1.25	%
Long-term debt		513,790				3.23	%		634,674				2.77	%		579,345				3.29	%		573,898				2.98	%		480,627				3.58	%
Total borrowed funds		749,114				2.25	%		886,379				2.01	%		1,272,819				1.90	%		817,367				2.12	%		1,504,293				2.00	%
Total interest-bearing liabilities		9,456,667				0.33	%		9,418,201				0.38	%		9,668,048				0.74	%		9,437,540				0.36	%		9,497,303				0.91	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits		4,003,626							3,840,046							3,335,866							3,922,288							2,989,553
Other liabilities		491,489							511,658							520,425							501,518							432,658
Shareholders' equity		2,263,687							2,272,749							2,185,865							2,268,193							2,197,799
Total liabilities & shareholders' equity		$	16,215,469						$	16,042,654						$	15,710,204						$	16,129,539						$	15,117,313
Net interest income		$	114,026						$	113,876						$	111,576						$	227,902						$	225,858
Net interest spread						3.16	%						3.23	%						3.17	%						3.19	%						3.32	%
Net interest margin						3.27	%						3.35	%						3.38	%						3.31	%						3.54	%
Tax equivalent adjustment						0.04	%						0.05	%						0.06	%						0.04	%						0.06	%
Net interest margin (fully tax equivalent)						3.31	%						3.40	%						3.44	%						3.35	%						3.60	%
(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		$	(1,551)			$	2,296			$	745			$	(4,723)			$	5,705			$	982			$	(8,880)			$	9,925			$	1,045
Interest-bearing deposits with other banks		(3)				0				(3)				3				(25)				(22)				(114)				(22)				(136)
Gross loans (2)		(1,333)				(104)				(1,437)				(6,716)				(1,690)				(8,406)				(30,812)				5,562				(25,250)
Total earning assets		(2,887)				2,192				(695)				(11,436)				3,990				(7,446)				(39,806)				15,465				(24,341)
Interest-bearing liabilities
Total interest-bearing deposits		$	(754)			$	114			$	(640)			$	(8,190)			$	132			$	(8,058)			$	(20,674)			$	584			$	(20,090)
Borrowed funds
Short-term borrowings		(11)				(3)				(14)				(1,118)				(103)				(1,221)				(5,856)				(385)				(6,241)
Long-term debt		727				(918)				(191)				(89)				(528)				(617)				(1,431)				1,377				(54)
Total borrowed funds		716				(921)				(205)				(1,207)				(631)				(1,838)				(7,287)				992				(6,295)
Total interest-bearing liabilities		(38)				(807)				(845)				(9,397)				(499)				(9,896)				(27,961)				1,576				(26,385)
Net interest income (1)		$	(2,849)			$	2,999			$	150			$	(2,039)			$	4,489			$	2,450			$	(11,845)			$	13,889			$	2,044
(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,
	2021				2021				2020				2020				2020				2021				2020
ALLOWANCE FOR CREDIT LOSS ACTIVITY
Balance at beginning of period	$	169,923			$	175,679			$	168,544			$	158,661			$	143,885			$	175,679			$	57,650
Day one adoption impact of ASC 326	0				0				0				0				0				0				61,505
Provision for credit losses	(4,756)				3,450				13,758				15,299				17,859				(1,306)				41,739
Gross charge-offs
Commercial and industrial	3,729				7,910				1,505				1,467				1,282				11,639				2,373
Lease financing	0				0				0				852				0				0				0
Construction real estate	0				2				0				0				0				2				0
Commercial real estate	2,041				1,250				6,270				3,789				2,037				3,291				2,041
Residential real estate	46				1				203				22				148				47				263
Home equity	240				611				386				460				428				851				695
Installment	77				36				21				59				7				113				68
Credit card	179				222				169				171				234				401				545
Total gross charge-offs	6,312				10,032				8,554				6,820				4,136				16,344				5,985
Recoveries
Commercial and industrial	205				337				367				265				275				542				2,275
Lease financing	0				0				(6)				6				0				0				0
Construction real estate	3				0				3				0				14				3				14
Commercial real estate	75				195				844				760				424				270				658
Residential real estate	54				44				145				91				93				98				145
Home equity	317				177				428				209				156				494				495
Installment	37				34				65				35				27				71				58
Credit card	44				39				85				38				64				83				107
Total recoveries	735				826				1,931				1,404				1,053				1,561				3,752
Total net charge-offs	5,577				9,206				6,623				5,416				3,083				14,783				2,233
Ending allowance for credit losses	$	159,590			$	169,923			$	175,679			$	168,544			$	158,661			$	159,590			$	158,661
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial and industrial	0.48		%		1.01		%		0.14		%		0.14		%		0.13		%		0.75		%		0.01		%
Lease financing	0.00		%		0.00		%		0.03		%		4.29		%		0.00		%		0.00		%		0.00		%
Construction real estate	0.00		%		0.00		%		0.00		%		0.00		%		(0.01)		%		0.00		%		(0.01)		%
Commercial real estate	0.18		%		0.10		%		0.50		%		0.28		%		0.15		%		0.14		%		0.06		%
Residential real estate	0.00		%		(0.02)		%		0.02		%		(0.03)		%		0.02		%		(0.01)		%		0.02		%
Home equity	(0.04)		%		0.24		%		(0.02)		%		0.13		%		0.14		%		0.10		%		0.05		%
Installment	0.19		%		0.01		%		(0.21)		%		0.12		%		(0.10)		%		0.10		%		0.03		%
Credit card	1.12		%		1.59		%		0.69		%		1.16		%		1.54		%		1.35		%		1.86		%
Total net charge-offs	0.23		%		0.38		%		0.26		%		0.21		%		0.12		%		0.30		%		0.05		%
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans (1)
Commercial and industrial	$	27,426			$	24,941			$	29,230			$	34,686			$	33,906			$	27,426			$	33,906
Lease financing	16				0				0				1,092				1,353				16				1,353
Construction real estate	0				0				0				0				0				0				0
Commercial real estate	45,957				44,514				34,682				24,521				14,002				45,957				14,002
Residential real estate	9,480				11,359				11,601				12,104				12,813				9,480				12,813
Home equity	3,376				4,286				5,076				5,374				5,604				3,376				5,604
Installment	115				146				163				153				201				115				201
Nonaccrual loans	86,370				85,246				80,752				77,930				67,879				86,370				67,879
Accruing troubled debt restructurings (TDRs)	12,070				11,608				7,099				7,759				8,377				12,070				8,377
Total nonperforming loans	98,440				96,854				87,851				85,689				76,256				98,440				76,256
Other real estate owned (OREO)	340				854				1,287				1,643				1,872				340				1,872
Total nonperforming assets	98,780				97,708				89,138				87,332				78,128				98,780				78,128
Accruing loans past due 90 days or more	155				92				169				79				124				155				124
Total underperforming assets	$	98,935			$	97,800			$	89,307			$	87,411			$	78,252			$	98,935			$	78,252
Total classified assets	$	182,516			$	196,782			$	142,021			$	134,002			$	125,543			$	182,516			$	125,543
CREDIT QUALITY RATIOS
Allowance for credit losses to
Nonaccrual loans	184.77		%		199.33		%		217.55		%		216.28		%		233.74		%		184.77		%		233.74		%
Nonperforming loans	162.12		%		175.44		%		199.97		%		196.69		%		208.06		%		162.12		%		208.06		%
Total ending loans	1.68		%		1.71		%		1.77		%		1.65		%		1.56		%		1.68		%		1.56		%
Nonperforming loans to total loans	1.03		%		0.97		%		0.89		%		0.84		%		0.75		%		1.03		%		0.75		%
Nonperforming assets to
Ending loans, plus OREO	1.04		%		0.98		%		0.90		%		0.86		%		0.77		%		1.04		%		0.77		%
Total assets	0.62		%		0.60		%		0.56		%		0.55		%		0.49		%		0.62		%		0.49		%
Nonperforming assets, excluding accruing TDRs to
Ending loans, plus OREO	0.91		%		0.87		%		0.83		%		0.78		%		0.68		%		0.91		%		0.68		%
Total assets	0.54		%		0.53		%		0.51		%		0.50		%		0.44		%		0.54		%		0.44		%
Classified assets to total assets	1.14		%		1.22		%		0.89		%		0.84		%		0.79		%		1.14		%		0.79		%

(1)  Nonaccrual loans include nonaccrual TDRs of $21.5  million, $20.9 million, $14.7 million, $29.3 million, and $32.7 million, as of June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020,  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,
	2021				2021				2020				2020				2020				2021				2020
PER COMMON SHARE
Market Price
High	$	26.02			$	26.40			$	17.77			$	15.15			$	16.38			$	26.40			$	25.52
Low	$	23.35			$	17.62			$	12.07			$	11.40			$	11.52			$	17.62			$	11.52
Close	$	23.63			$	24.00			$	17.53			$	12.01			$	13.89			$	23.63			$	13.89
Average shares outstanding - basic	96,123,645				96,873,940				97,253,787				97,247,080				97,220,748				96,496,720				97,478,719
Average shares outstanding - diluted	97,009,712				97,727,527				98,020,534				98,008,733				97,988,600				97,366,640				98,172,408
Ending shares outstanding	96,199,509				97,517,693				98,021,929				97,999,763				98,018,858				96,199,509				98,018,858
Total shareholders' equity	$	2,269,507			$	2,258,942			$	2,282,070			$	2,247,815			$	2,221,019			$	2,269,507			$	2,221,019
REGULATORY CAPITAL	Preliminary																				Preliminary
Common equity tier 1 capital	$	1,333,209			$	1,334,882			$	1,325,922			$	1,293,716			$	1,267,609			$	1,333,209			$	1,267,609
Common equity tier 1 capital ratio	11.78		%		11.81		%		11.82		%		11.63		%		11.49		%		11.78		%		11.49		%
Tier 1 capital	$	1,376,333			$	1,377,892			$	1,368,818			$	1,336,497			$	1,310,276			$	1,376,333			$	1,310,276
Tier 1 ratio	12.16		%		12.19		%		12.20		%		12.02		%		11.87		%		12.16		%		11.87		%
Total capital	$	1,732,930			$	1,741,755			$	1,744,802			$	1,708,817			$	1,676,532			$	1,732,930			$	1,676,532
Total capital ratio	15.31		%		15.41		%		15.55		%		15.37		%		15.19		%		15.31		%		15.19		%
Total capital in excess of minimum requirement	$	544,478			$	554,834			$	566,795			$	541,263			$	517,902			$	544,478			$	517,902
Total risk-weighted assets	$	11,318,590			$	11,304,012			$	11,219,114			$	11,119,560			$	11,034,570			$	11,318,590			$	11,034,570
Leverage ratio	9.14		%		9.34		%		9.55		%		9.55		%		8.98		%		9.14		%		8.98		%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets	14.15		%		13.97		%		14.29		%		14.11		%		13.99		%		14.15		%		13.99		%
Ending tangible shareholders' equity to ending tangible assets (1)	8.37		%		8.22		%		8.47		%		8.25		%		8.09		%		8.37		%		8.09		%
Average shareholders' equity to average assets	13.96		%		14.17		%		14.07		%		14.08		%		13.91		%		14.06		%		14.54		%
Average tangible shareholders' equity to average tangible assets (1)	8.23		%		8.38		%		8.26		%		8.18		%		7.94		%		8.30		%		8.34		%
REPURCHASE PROGRAM (2)
Shares repurchased	1,308,945				840,115				0				0				0				2,149,060				880,000
Average share repurchase price	$	25.11			$	21.40			N/A				N/A				N/A				$	23.66			$	18.96
Total cost of shares repurchased	$	32,864			$	17.982			N/A				N/A				N/A				$	50,846			$	16,686

(1) Non-GAAP measure.  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.

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

N/A = Not applicable

 

View original content:https://www.prnewswire.com/news-releases/first-financial-bancorp-announces-second-quarter-2021-financial-results-301339819.html

SOURCE First Financial Bancorp.

FAQ

What were First Financial Bancorp's Q2 2021 earnings?

First Financial Bancorp reported net income of $50.9 million for Q2 2021, with earnings per diluted share at $0.52.

How did FFBC's earnings compare to the previous quarter?

Earnings for Q2 2021 of $0.52 per diluted share improved from $0.48 in Q1 2021.

What was the return on average assets for FFBC in Q2 2021?

The return on average assets was 1.26% for the second quarter of 2021.

Did FFBC engage in share repurchases during Q2 2021?

Yes, FFBC repurchased 1,308,945 shares during the second quarter.

What is the outlook for FFBC's loan originations?

FFBC expects strong loan originations to continue in the second half of the year, despite higher payoffs.