First Financial Bancorp Announces Second Quarter 2022

  • Earnings per diluted share of $0.55; $0.56 on an adjusted(1) basis
  • Return on average assets of 1.28%; 1.31% on an adjusted(1) basis
  • Net interest margin on FTE basis(1) of 3.47%; 30 bp increase from linked quarter
  • Loan growth of $191.4 million, excluding PPP; 8.3% on an annualized basis
  • Noninterest income of $49.8 million increased 20.6% from the linked quarter

CINCINNATI, July 21, 2022 /PRNewswire/ — First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the three and six months ended June 30, 2022. 

For the three months ended June 30, 2022, the Company reported net income of $51.5 million, or $0.55 per diluted common share.  These results compare to net income of $41.3 million, or $0.44 per diluted common share, for the first quarter of 2022.  For the six months ended June 30, 2022, First Financial had earnings per diluted share of $0.98 compared to $1.01 for the same period in 2021.

Return on average assets for the second quarter of 2022 was 1.28% while return on average tangible common equity was 20.68%(1).  These compare to returns on average assets of 1.03% and return on average tangible common equity of 14.93%(1) in the first quarter of 2022.

Second quarter 2022 highlights include:

  • Strong loan growth when compared to linked quarter(2)
    • Loan balances increased $178.8 million compared to the first quarter; $191.4 million excluding PPP
    • Growth of 7.8% on an annualized basis; 8.3% on an annualized basis excluding PPP
    • Broad based portfolio growth, with large increases in C&I and residential real estate portfolios
  • Net interest margin of 3.43%, or 3.47% on a fully tax-equivalent basis(1), exceeded expectations
    • 30 bp increase to 3.47% from 3.17% in the first quarter due to higher asset yields resulting from higher interest rates
    • 34 bp increase in loan yields offset modest 2 basis point increase in cost of interest bearing deposits
  • Noninterest income of $49.8 million, or $50.8 million as adjusted(1)
    • Record foreign exchange income of $13.5 million; 32.7% increase from the linked quarter
    • Leasing business income of $7.2 million; 19.3% increase from the linked quarter
    • Wealth management fees remained strong at $6.3 million
    • Mortgage banking revenue increased $1.4 million; 35.4% increase from the linked quarter
    • Other noninterest income increased $2.3 million; 65.9% increase from the linked quarter driven by investments in limited partnerships
    • Adjusted(1) for $1.1 million loss on investment securities

(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 consolidated balance sheets at June 30, 2022, March 31, 2022 and December 31, 2021 include assets
acquired and liabilities assumed in the Summit Financial transaction.  The fair value measurements of assets
acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition
as additional information relative to closing date fair values becomes available. 

  • Noninterest expenses of $103.2 million, or $102.4 million as adjusted(1)
    • Adjustments(1) include $0.1 million of acquisition related costs and $0.7 million of other costs not expected to recur such as severance and branch consolidation costs
    • Slight increase in expenses driven by higher salaries and benefits tied to elevated fee income
    • Efficiency ratio of 61.8%; 60.9% as adjusted(1)
  • Total Allowance for Credit Losses of $134.5 million; Total quarterly provision recapture of $0.8 million
    • Loans and leases – ACL of $117.9 million, 1.25% of total loans
    • Unfunded Commitments – ACL of $16.7 million
    • Provision recapture driven by stable credit quality
    • Net charge-offs declined to 8 bps of average loans and leases
  • Regulatory capital ratios remain in excess of internal targets
    • Total capital ratio of 13.94%
    • Tier 1 common equity increased 4 basis points to 10.91%
    • Tangible common equity of 6.40%(1); decrease from linked quarter driven by decline in AOCI
    • Tangible book value per share of $10.27(1)

Archie Brown, President and CEO, commented on the quarter, “I am extremely pleased with our performance in the second quarter.  Earnings improved from the first quarter as our asset sensitive balance sheet was positively impacted by recent rate increases.  In addition, credit quality was stable with lower net charge-offs and nonaccrual loan balances.  This led to a small provision recapture for the quarter.” 

Mr. Brown continued, “We were encouraged by our strong fee income performance for the quarter.  Total fee income surpassed our expectations due to record foreign exchange income, strong income from limited partnership investments and growing leasing business income.  While second quarter mortgage banking income increased 35% from the linked quarter, we continue to experience headwinds due to the rapid rise in interest rates.  In addition, recent overdraft program changes led to a modest reduction in deposit account service charges during the second quarter and we expect further decline due to these program changes in the coming periods.”

Mr. Brown commented on loan growth, “We were very pleased with loan growth in the second quarter.  Loans (excluding PPP) increased by $191 million, or 8.3%, on an annualized basis.  Loan growth was broad based, with increases in the C&I, retail mortgage and consumer portfolios.  This more than offset a decline in the ICRE portfolio, which was driven by elevated prepayments.  In addition, we were also pleased with Summit’s growth in the quarter, including operating leases, which increased $21 million, or 33.5%, during the period.  Loan origination activity remains strong as we head into the third quarter.”

Mr. Brown concluded, “I want to thank our associates for their excellent performance so far this year.  As we head into the back half of the year, we are optimistic that our balance sheet is positioned to further benefit from additional rate increases and loan activity remains strong.  We remain diligent in our credit monitoring and are prepared to manage a downturn in the economy should it occur later in the interest rate cycle.”

Full detail of the Company’s second quarter 2022 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 22, 2022 at 8:30 a.m. Eastern Time.  Members of the public who would like to listen to the conference call should dial (844) 200-6205 (U.S. toll free), (646) 904-5544 (U.S. local) or +1 (929) 526-1599 (International), access code 099625.  The number should be dialed five to ten minutes prior to the start of the conference call.  A replay of the conference call will be available beginning one hour after the completion of the live call at (866) 813-9403 (U.S. toll free), (929) 458-6194 (U.S. local) and +44 204 525-0658 (all other locations), access code 049791.  The recording will be available until August 5, 2022.  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.  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 Statements
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 changes in housing prices, fluctuations in 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  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, 2021, 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, 2022, the Company had $16.2 billion in assets, $9.4 billion in loans, $12.3 billion in deposits and $2.1 billion in shareholders’ equity.  The Company’s subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management.  These business units provide traditional banking services to business and retail clients.  Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.0 billion in assets under management as of June 30, 2022.  The Company operated 135 full service banking centers as of June 30, 2022, 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,


2022


2022


2021


2021


2021


2022


2021

RESULTS OF OPERATIONS














Net income

$         51,520


$        41,301


$         46,945


$          60,012


$          50,888


$        92,821


$        98,203

Net earnings per share – basic

$             0.55


$            0.44


$             0.51


$              0.64


$              0.53


$            0.99


$            1.02

Net earnings per share – diluted

$             0.55


$            0.44


$             0.50


$              0.63


$              0.52


$            0.98


$            1.01

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

1.28 %


1.03 %


1.16 %


1.49 %


1.26 %


1.16 %


1.23 %

Return on average shareholders’ equity

9.84 %


7.53 %


8.31 %


10.53 %


9.02 %


8.66 %


8.73 %

Return on average tangible shareholders’ equity (1)

20.68 %


14.93 %


15.11 %


19.03 %


16.31 %


17.65 %


15.78 %















Net interest margin

3.43 %


3.12 %


3.19 %


3.28 %


3.27 %


3.27 %


3.31 %

Net interest margin (fully tax equivalent) (1)(2)

3.47 %


3.17 %


3.23 %


3.32 %


3.31 %


3.32 %


3.35 %















Ending shareholders’ equity as a percent of ending assets

12.74 %


13.35 %


13.83 %


14.01 %


14.15 %


12.74 %


14.15 %

Ending tangible shareholders’ equity as a percent of:














Ending tangible assets (1)

6.40 %


6.95 %


7.58 %


8.21 %


8.37 %


6.40 %


8.37 %

Risk-weighted assets (1)

8.09 %


8.85 %


9.91 %


10.76 %


11.12 %


8.09 %


11.12 %















Average shareholders’ equity as a percent of average assets

12.97 %


13.75 %


13.98 %


14.14 %


13.96 %


13.36 %


14.06 %

Average tangible shareholders’ equity as a percent of














    average tangible assets (1)

6.62 %


7.44 %


8.20 %


8.35 %


8.23 %


7.03 %


8.30 %















Book value per share

$           21.90


$          22.63


$          23.99


$           23.85


$            23.59


$          21.90


$          23.59

Tangible book value per share (1)

$           10.27


$          10.97


$          12.26


$           13.09


$            13.08


$          10.27


$          13.08















Common equity tier 1 ratio (3)

10.91 %


10.87 %


10.84 %


11.54 %


11.78 %


10.91 %


11.78 %

Tier 1 ratio (3)

11.28 %


11.24 %


11.22 %


11.92 %


12.16 %


11.28 %


12.16 %

Total capital ratio (3)

13.94 %


13.97 %


14.10 %


14.97 %


15.31 %


13.94 %


15.31 %

Leverage ratio (3)

8.76 %


8.64 %


8.70 %


9.05 %


9.14 %


8.76 %


9.14 %















AVERAGE BALANCE SHEET ITEMS














Loans (4)

$    9,367,820


$     ,266,774


$    9,283,227


$    9,502,750


$     9,831,965


$    9,317,576


$    9,891,579

Investment securities

4,118,287


4,308,059


4,343,513


4,189,253


4,130,207


4,212,649


3,957,559

Interest-bearing deposits with other banks

236,797


234,687


166,904


32,400


45,593


235,748


46,249

  Total earning assets

$  13,722,904


$  13,809,520


$  13,793,644


$  13,724,403


$   14,007,765


$  13,765,973


$  13,895,387

Total assets

$  16,185,978


$  16,184,919


$  16,036,417


$  15,995,808


$   16,215,469


$  16,185,451


$  16,129,539

Noninterest-bearing deposits

$    4,224,842


$    4,160,175


$    4,191,457


$    3,981,404


$     4,003,626


$    4,192,687


$    3,922,288

Interest-bearing deposits

8,312,876


8,623,800


8,693,792


8,685,949


8,707,553


8,467,479


8,620,173

  Total deposits

$  12,537,718


$  12,783,975


$  12,885,249


$  12,667,353


$   12,711,179


$  12,660,166


$  12,542,461

Borrowings

$       970,243


$       701,287


$       396,743


$       562,964


$        749,114


$       836,508


$       817,367

Shareholders’ equity

$    2,099,670


$    2,225,495


$    2,241,820


$    2,261,293


$     2,263,687


$    2,162,235


$    2,268,193















CREDIT QUALITY RATIOS













Allowance to ending loans

1.25 %


1.34 %


1.42 %


1.59 %


1.68 %


1.25 %


1.68 %

Allowance to nonaccrual loans

302.87 %


273.09 %


272.76 %


225.73 %


184.77 %


302.87 %


184.77 %

Allowance to nonperforming loans

235.08 %


231.98 %


219.96 %


192.35 %


162.12 %


235.08 %


162.12 %

Nonperforming loans to total loans

0.53 %


0.58 %


0.65 %


0.83 %


1.03 %


0.53 %


1.03 %

Nonaccrual loans to total loans

0.41 %


0.49 %


0.52 %


0.70 %


0.91 %


0.41 %


0.91 %

Nonperforming assets to ending loans, plus OREO

0.53 %


0.58 %


0.65 %


0.83 %


1.04 %


0.53 %


1.04 %

Nonperforming assets to total assets

0.31 %


0.33 %


0.37 %


0.49 %


0.62 %


0.31 %


0.62 %

Classified assets to total assets

0.74 %


0.67 %


0.64 %


1.04 %


1.14 %


0.74 %


1.14 %

Net charge-offs to average loans (annualized)

0.08 %


0.10 %


0.32 %


0.10 %


0.23 %


0.09 %


0.30 %



(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, 2022 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,


2022


2021


% Change


2022


2021


% Change

Interest income












  Loans and leases, including fees

$       97,091


$       97,494


(0.4) %


$     184,273


$     196,425


(6.2) %

  Investment securities












     Taxable

23,639


19,524


21.1 %


45,735


38,131


19.9 %

     Tax-exempt

4,916


4,871


0.9 %


9,347


9,914


(5.7) %

        Total investment securities interest

28,555


24,395


17.1 %


55,082


48,045


14.6 %

  Other earning assets

497


25


N/M


618


53


N/M

       Total interest income

126,143


121,914


3.5 %


239,973


244,523


(1.9) %













Interest expense












  Deposits

2,963


3,693


(19.8) %


5,586


8,026


(30.4) %

  Short-term borrowings

1,373


53


N/M


1,690


120


N/M

  Long-term borrowings

4,612


4,142


11.3 %


9,156


8,475


8.0 %

      Total interest expense

8,948


7,888


13.4 %


16,432


16,621


(1.1) %

      Net interest income

117,195


114,026


2.8 %


223,541


227,902


(1.9) %

  Provision for credit losses-loans and leases

(4,267)


(4,756)


(10.3) %


(9,856)


(1,306)


N/M

  Provision for credit losses-unfunded commitments

3,481


517


N/M


3,255


1,055


208.5 %

      Net interest income after provision for credit losses

117,981


118,265


(0.2) %


230,142


228,153


0.9 %













Noninterest income












  Service charges on deposit accounts

7,648


7,537


1.5 %


15,377


14,683


4.7 %

  Trust and wealth management fees

6,311


6,216


1.5 %


12,371


11,846


4.4 %

  Bankcard income

3,823


3,732


2.4 %


7,160


6,860


4.4 %

  Client derivative fees

1,353


1,795


(24.6) %


2,152


3,351


(35.8) %

  Foreign exchange income

13,470


12,037


11.9 %


23,621


22,794


3.6 %

  Leasing business income

7,247


0


100.0 %


13,323


0


100.0 %

  Net gains from sales of loans

5,241


8,489


(38.3) %


9,113


17,943


(49.2) %

  Net gain (loss) on sale of investment securities

0


(265)


(100.0) %


3


(431)


(100.7) %

  Net gain (loss) on equity  securities

(1,054)


161


N/M


(1,253)


273


N/M

  Other

5,747


3,285


74.9 %


9,212


5,990


53.8 %

      Total noninterest income

49,786


42,987


15.8 %


91,079


83,309


9.3 %













Noninterest expenses












  Salaries and employee benefits

64,992


60,784


6.9 %


128,939


122,037


5.7 %

  Net occupancy

5,359


5,535


(3.2) %


11,105


11,239


(1.2) %

  Furniture and equipment

3,201


3,371


(5.0) %


6,768


7,340


(7.8) %

  Data processing

8,334


7,864


6.0 %


16,598


15,151


9.6 %

  Marketing

2,323


2,035


14.2 %


4,023


3,396


18.5 %

  Communication

670


746


(10.2) %


1,336


1,584


(15.7) %

  Professional services

2,214


2,029


9.1 %


4,373


3,479


25.7 %

  State intangible tax

1,090


1,201


(9.2) %


2,221


2,403


(7.6) %

  FDIC assessments

1,677


1,362


23.1 %


3,136


2,711


15.7 %

  Intangible amortization

2,915


2,480


17.5 %


5,829


4,959


17.5 %

  Leasing business expense

4,687


0


100.0 %


8,556


0


100.0 %

  Other

5,765


12,236


(52.9) %


13,148


17,850


(26.3) %

      Total noninterest expenses

103,227


99,643


3.6 %


206,032


192,149


7.2 %

Income before income taxes

64,540


61,609


4.8 %


115,189


119,313


(3.5) %

Income tax expense

13,020


10,721


21.4 %


22,368


21,110


6.0 %

      Net income

$       51,520


$       50,888


1.2 %


$       92,821


$       98,203


(5.5) %













ADDITIONAL DATA












Net earnings per share – basic

$          0.55


$          0.53




$          0.99


$          1.02



Net earnings per share – diluted

$          0.55


$          0.52




$          0.98


$          1.01



Dividends declared per share

$          0.23


$          0.23




$          0.46


$          0.46















Return on average assets

1.28 %


1.26 %




1.16 %


1.23 %



Return on average shareholders’ equity

9.84 %


9.02 %




8.66 %


8.73 %















Interest income

$     126,143


$     121,914


3.5 %


$     239,973


$     244,523


(1.9) %

Tax equivalent adjustment

1,625


1,619


0.4 %


3,092


3,271


(5.5) %

   Interest income – tax equivalent

127,768


123,533


3.4 %


243,065


247,794


(1.9) %

Interest expense

8,948


7,888


13.4 %


16,432


16,621


(1.1) %

   Net interest income – tax equivalent

$     118,820


$     115,645


2.7 %


$     226,633


$     231,173


(2.0) %













Net interest margin

3.43 %


3.27 %




3.27 %


3.31 %



Net interest margin (fully tax equivalent) (1)

3.47 %


3.31 %




3.32 %


3.35 %















Full-time equivalent employees

2,096


2,053






















(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)











2022



Second


First


Year to


% Change



Quarter


Quarter


Date


Linked Qtr.

Interest income









  Loans and leases, including fees


$   97,091


$   87,182


$ 184,273


11.4 %

  Investment securities









     Taxable


23,639


22,096


45,735


7.0 %

     Tax-exempt


4,916


4,431


9,347


10.9 %

        Total investment securities interest


28,555


26,527


55,082


7.6 %

  Other earning assets


497


121


618


310.7 %

       Total interest income


126,143


113,830


239,973


10.8 %










Interest expense









  Deposits


2,963


2,623


5,586


13.0 %

  Short-term borrowings


1,373


317


1,690


333.1 %

  Long-term borrowings


4,612


4,544


9,156


1.5 %

      Total interest expense


8,948


7,484


16,432


19.6 %

      Net interest income


117,195


106,346


223,541


10.2 %

  Provision for credit losses-loans and leases


(4,267)


(5,589)


(9,856)


(23.7) %

  Provision for credit losses-unfunded commitments


3,481


(226)


3,255


N/M

      Net interest income after provision for credit losses


117,981


112,161


230,142


5.2 %










Noninterest income









  Service charges on deposit accounts


7,648


7,729


15,377


(1.0) %

  Trust and wealth management fees


6,311


6,060


12,371


4.1 %

  Bankcard income


3,823


3,337


7,160


14.6 %

  Client derivative fees


1,353


799


2,152


69.3 %

  Foreign exchange income


13,470


10,151


23,621


32.7 %

  Leasing business income


7,247


6,076


13,323


19.3 %

  Net gains from sales of loans


5,241


3,872


9,113


35.4 %

  Net gain (loss) on sale of investment securities


0


3


3


(100.0) %

  Net  gain (loss) on equity  securities


(1,054)


(199)


(1,253)


429.6 %

  Other


5,747


3,465


9,212


65.9 %

      Total noninterest income


49,786


41,293


91,079


20.6 %










Noninterest expenses









  Salaries and employee benefits


64,992


63,947


128,939


1.6 %

  Net occupancy


5,359


5,746


11,105


(6.7) %

  Furniture and equipment


3,201


3,567


6,768


(10.3) %

  Data processing


8,334


8,264


16,598


0.8 %

  Marketing


2,323


1,700


4,023


36.6 %

  Communication


670


666


1,336


0.6 %

  Professional services


2,214


2,159


4,373


2.5 %

  State intangible tax


1,090


1,131


2,221


(3.6) %

  FDIC assessments


1,677


1,459


3,136


14.9 %

  Intangible amortization


2,915


2,914


5,829


0.0 %

  Leasing business expense


4,687


3,869


8,556


21.1 %

  Other


5,765


7,383


13,148


(21.9) %

      Total noninterest expenses


103,227


102,805


206,032


0.4 %

Income before income taxes


64,540


50,649


115,189


27.4 %

Income tax expense


13,020


9,348


22,368


39.3 %

      Net income


$   51,520


$   41,301


$   92,821


24.7 %










ADDITIONAL DATA









Net earnings per share – basic


$      0.55


$      0.44


$      0.99



Net earnings per share – diluted


$      0.55


$      0.44


$      0.98



Dividends declared per share


$      0.23


$      0.23


$      0.46












Return on average assets


1.28 %


1.03 %


1.16 %



Return on average shareholders’ equity


9.84 %


7.53 %


8.66 %












Interest income


$ 126,143


$ 113,830


$ 239,973


10.8 %

Tax equivalent adjustment


1,625


1,467


3,092


10.8 %

   Interest income – tax equivalent


127,768


115,297


243,065


10.8 %

Interest expense


8,948


7,484


16,432


19.6 %

   Net interest income – tax equivalent


$ 118,820


$ 107,813


$ 226,633


10.2 %










Net interest margin


3.43 %


3.12 %


3.27 %



Net interest margin (fully tax equivalent) (1)


3.47 %


3.17 %


3.32 %












Full-time equivalent employees


2,096


2,050 (2)















(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.

(2) Includes 65 FTE from Summit acquisition.









FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)












2021


Fourth


Third


Second


First


Full


Quarter


Quarter


Quarter


Quarter


Year

Interest income










  Loans and leases, including fees

$  92,682


$  96,428


$  97,494


$  98,931


$ 385,535

  Investment securities










     Taxable

20,993


20,088


19,524


18,607


79,212

     Tax-exempt

4,127


4,282


4,871


5,043


18,323

        Total investment securities interest

25,120


24,370


24,395


23,650


97,535

  Other earning assets

71


23


25


28


147

       Total interest income

117,873


120,821


121,914


122,609


483,217











Interest expense










  Deposits

3,089


3,320


3,693


4,333


14,435

  Short-term borrowings

10


68


53


67


198

  Long-term borrowings

3,968


4,023


4,142


4,333


16,466

      Total interest expense

7,067


7,411


7,888


8,733


31,099

      Net interest income

110,806


113,410


114,026


113,876


452,118

  Provision for credit losses-loans and leases

(9,525)


(8,193)


(4,756)


3,450


(19,024)

  Provision for credit losses-unfunded commitments

1,799


(1,951)


517


538


903

      Net interest income after provision for credit losses

118,532


123,554


118,265


109,888


470,239











Noninterest income










  Service charges on deposit accounts

8,645


8,548


7,537


7,146


31,876

  Trust and wealth management fees

6,038


5,896


6,216


5,630


23,780

  Bankcard income

3,602


3,838


3,732


3,128


14,300

  Client derivative fees

2,303


2,273


1,795


1,556


7,927

  Foreign exchange income

12,808


9,191


12,037


10,757


44,793

  Leasing business income

0


0


0


0


0

  Net gains from sales of loans

6,492


8,586


8,489


9,454


33,021

  Net gain (loss) on sale of investment securities

(14)


(314)


(265)


(166)


(759)

  Net  gain (loss) on equity  securities

321


108


161


112


702

  Other

5,465


4,411


3,285


2,705


15,866

      Total noninterest income

45,660


42,537


42,987


40,322


171,506











Noninterest expenses










  Salaries and employee benefits

62,170


61,717


60,784


61,253


245,924

  Net occupancy

5,332


5,571


5,535


5,704


22,142

  Furniture and equipment

3,161


3,318


3,371


3,969


13,819

  Data processing

8,261


7,951


7,864


7,287


31,363

  Marketing

2,152


2,435


2,035


1,361


7,983

  Communication

677


669


746


838


2,930

  Professional services

5,998


2,199


2,029


1,450


11,676

  State intangible tax

651


1,202


1,201


1,202


4,256

  FDIC assessments

1,453


1,466


1,362


1,349


5,630

  Intangible amortization

2,401


2,479


2,480


2,479


9,839

  Leasing business expense

0


0


0


0


0

  Other

17,349


10,051


12,236


5,614


45,250

      Total noninterest expenses

109,605


99,058


99,643


92,506


400,812

Income before income taxes

54,587


67,033


61,609


57,704


240,933

Income tax expense (benefit)

7,642


7,021


10,721


10,389


35,773

      Net income

$  46,945


$  60,012


$  50,888


$  47,315


$ 205,160











ADDITIONAL DATA










Net earnings per share – basic

$     0.51


$      0.64


$      0.53


$      0.49


$      2.16

Net earnings per share – diluted

$     0.50


$      0.63


$      0.52


$      0.48


$      2.14

Dividends declared per share

$     0.23


$      0.23


$      0.23


$      0.23


$      0.92











Return on average assets

1.16 %


1.49 %


1.26 %


1.20 %


1.28 %

Return on average shareholders’ equity

8.31 %


10.53 %


9.02 %


8.44 %


9.08 %











Interest income

$  117,873


$ 120,821


$ 121,914


$ 122,609


$ 483,217

Tax equivalent adjustment

1,386


1,434


1,619


1,652


6,091

   Interest income – tax equivalent

119,259


122,255


123,533


124,261


489,308

Interest expense

7,067


7,411


7,888


8,733


31,099

   Net interest income – tax equivalent

$  112,192


$ 114,844


$ 115,645


$ 115,528


$ 458,209











Net interest margin

3.19 %


3.28 %


3.27 %


3.35 %


3.27 %

Net interest margin (fully tax equivalent) (1)

3.23 %


3.32 %


3.31 %


3.40 %


3.31 %











Full-time equivalent employees

1,994


2,026


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 STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)
















June 30,


Mar. 31,


Dec. 31,


Sep. 30,


June 30,


% Change


% Change


2022


2022


2021


2021


2021


Linked Qtr.


Comp Qtr.

ASSETS














     Cash and due from banks

$      302,549


$      230,428


$      220,031


$      209,748


$      206,918


31.3 %


46.2 %

     Interest-bearing deposits with other banks

184,974


227,147


214,811


29,799


38,610


(18.6) %


379.1 %

     Investment securities available-for-sale

3,843,580


3,957,882


4,207,846


4,114,094


3,955,839


(2.9) %


(2.8) %

     Investment securities held-to-maturity

88,057


92,597


98,420


103,886


112,456


(4.9) %


(21.7) %

     Other investments

132,151


114,563


102,971


97,831


129,432


15.4 %


2.1 %

     Loans held for sale

22,044


12,670


29,482


33,835


31,546


74.0 %


(30.1) %

     Loans and leases














       Commercial and industrial

2,927,175


2,800,209


2,720,028


2,602,848


2,701,203


4.5 %


8.4 %

       Lease financing

146,639


125,867


109,624


67,855


68,229


16.5 %


114.9 %

       Construction real estate

449,734


479,744


455,894


477,004


630,329


(6.3) %


(28.7) %

       Commercial real estate

4,007,037


4,031,484


4,226,614


4,438,374


4,332,561


(0.6) %


(7.5) %

       Residential real estate

965,387


913,838


896,069


922,492


932,112


5.6 %


3.6 %

       Home equity

725,700


707,973


708,399


709,050


711,756


2.5 %


2.0 %

       Installment

146,680


132,197


119,454


96,077


89,143


11.0 %


64.5 %

       Credit card

52,065


50,305


52,217


47,231


46,177


3.5 %


12.8 %

          Total loans

9,420,417


9,241,617


9,288,299


9,360,931


9,511,510


1.9 %


(1.0) %

       Less:














          Allowance for credit losses

(117,885)


(124,130)


(131,992)


(148,903)


(159,590)


(5.0) %


(26.1) %

                Net loans

9,302,532


9,117,487


9,156,307


9,212,028


9,351,920


2.0 %


(0.5) %

     Premises and equipment

191,099


190,975


193,040


192,580


192,238


0.1 %


(0.6) %

     Operating leases

82,659


61,927


60,811


0


0


33.5 %


100.0 %

     Goodwill

999,959


999,959


1,000,749


937,771


937,771


0.0 %


6.6 %

     Other intangibles

82,889


85,891


88,898


56,811


59,391


(3.5) %


39.6 %

     Accrued interest and other assets

1,011,221


917,624


955,775


968,210


1,021,798


10.2 %


(1.0) %

       Total Assets

$  16,243,714


$ 16,009,150


$  16,329,141


$ 15,956,593


$  16,037,919


1.5 %


1.3 %















LIABILITIES














     Deposits














       Interest-bearing demand

$   3,096,365


$   3,246,646


$   3,198,745


$   2,916,860


$   2,963,151


(4.6) %


4.5 %

       Savings

4,029,717


4,188,867


4,157,374


4,223,905


4,093,229


(3.8) %


(1.6) %

       Time

1,026,918


1,121,966


1,330,263


1,517,419


1,548,109


(8.5) %


(33.7) %

          Total interest-bearing deposits

8,153,000


8,557,479


8,686,382


8,658,184


8,604,489


(4.7) %


(5.2) %

       Noninterest-bearing

4,124,111


4,261,429


4,185,572


4,019,197


3,901,691


(3.2) %


5.7 %

          Total deposits

12,277,111


12,818,908


12,871,954


12,677,381


12,506,180


(4.2) %


(1.8) %

     Federal funds purchased and securities sold














         under agreements to repurchase

0


0


51,203


81,850


255,791


0.0 %


(100.0) %

     FHLB short-term borrowings

896,000


185,000


225,000


107,000


217,000


384.3 %


312.9 %

     Other

0


0


20,000


0


0


0.0 %


0.0 %

          Total short-term borrowings

896,000


185,000


296,203


188,850


472,791


384.3 %


89.5 %

     Long-term debt

358,578


379,840


409,832


313,230


313,039


(5.6) %


14.5 %

          Total borrowed funds

1,254,578


564,840


706,035


502,080


785,830


122.1 %


59.7 %

     Accrued interest and other liabilities

643,355


487,957


492,210


540,962


476,402


31.8 %


35.0 %

       Total Liabilities

14,175,044


13,871,705


14,070,199


13,720,423


13,768,412


2.2 %


3.0 %















SHAREHOLDERS’ EQUITY














     Common stock

1,637,237


1,634,903


1,640,358


1,637,065


1,635,470


0.1 %


0.1 %

     Retained earnings

887,006


857,178


837,473


812,082


773,857


3.5 %


14.6 %

     Accumulated other comprehensive income (loss)

(243,328)


(142,477)


(433)


14,230


30,735


70.8 %


N/M

     Treasury stock, at cost

(212,245)


(212,159)


(218,456)


(227,207)


(170,555)


0.0 %


24.4 %

       Total Shareholders’ Equity

2,068,670


2,137,445


2,258,942


2,236,170


2,269,507


(3.2) %


(8.8) %

       Total Liabilities and Shareholders’ Equity

$  16,243,714


$ 16,009,150


$  16,329,141


$ 15,956,593


$  16,037,919


1.5 %


1.3 %


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,


2022


2022


2021


2021


2021


2022


2021

ASSETS














     Cash and due from banks

$      305,803


$      248,517


$      253,091


$      245,212


$      237,964


$       277,318


$       235,135

     Interest-bearing deposits with other banks

236,797


234,687


166,904


32,400


45,593


235,748


46,249

     Investment securities

4,118,287


4,308,059


4,343,513


4,189,253


4,130,207


4,212,649


3,957,559

     Loans held for sale

15,446


15,589


24,491


28,365


28,348


15,517


29,015

     Loans and leases














       Commercial and industrial

2,884,373


2,736,613


2,552,686


2,634,306


2,953,185


2,810,901


2,991,239

       Lease financing

134,334


115,703


67,537


67,159


66,124


125,070


68,304

       Construction real estate

460,609


474,278


460,588


567,091


630,351


467,406


638,955

       Commercial real estate

4,025,493


4,139,072


4,391,328


4,413,003


4,372,679


4,081,969


4,356,106

       Residential real estate

936,165


903,567


917,399


937,969


940,600


919,956


960,548

       Home equity

716,219


703,714


709,954


710,794


707,409


710,001


716,720

       Installment

140,145


125,579


106,188


93,937


84,768


132,902


83,082

       Credit card

55,036


52,659


53,056


50,126


48,501


53,854


47,610

          Total loans

9,352,374


9,251,185


9,258,736


9,474,385


9,803,617


9,302,059


9,862,564

       Less:














          Allowance for credit losses

(123,950)


(129,601)


(144,756)


(157,727)


(169,979)


(126,760)


(173,899)

                Net loans

9,228,424


9,121,584


9,113,980


9,316,658


9,633,638


9,175,299


9,688,665

     Premises and equipment

191,895


192,832


192,941


193,775


200,558


192,361


203,576

     Operating leases

73,862


61,297


659


0


0


67,614


0

     Goodwill

999,958


1,000,238


938,453


937,771


937,771


1,000,097


937,771

     Other intangibles

84,577


87,602


56,120


58,314


60,929


86,081


62,222

     Accrued interest and other assets

930,929


914,514


946,265


994,060


940,461


922,767


969,347

       Total Assets

$  16,185,978


$ 16,184,919


$  16,036,417


$  15,995,808


$  16,215,469


$  16,185,451


$  16,129,539















LIABILITIES














     Deposits














       Interest-bearing demand

$    3,180,846


$   3,246,919


$    3,069,416


$   2,960,388


$    2,973,930


$   3,213,700


$    2,961,376

       Savings

4,076,380


4,145,615


4,195,504


4,150,610


4,096,077


4,110,806


3,956,471

       Time

1,055,650


1,231,266


1,428,872


1,574,951


1,637,546


1,142,973


1,702,326

          Total interest-bearing deposits

8,312,876


8,623,800


8,693,792


8,685,949


8,707,553


8,467,479


8,620,173

       Noninterest-bearing

4,224,842


4,160,175


4,191,457


3,981,404


4,003,626


4,192,687


3,922,288

          Total deposits

12,537,718


12,783,975


12,885,249


12,667,353


12,711,179


12,660,166


12,542,461

     Federal funds purchased and securities sold














          under agreements to repurchase

24,229


45,358


79,382


186,401


194,478


34,735


189,508

     FHLB short-term borrowings

586,846


257,800


2,445


63,463


40,846


423,232


53,961

     Other

0


12,889


654


0


0


6,409


0

          Total short-term borrowings

611,075


316,047


82,481


249,864


235,324


464,376


243,469

     Long-term debt

359,168


385,240


314,262


313,100


513,790


372,132


573,898

       Total borrowed funds

970,243


701,287


396,743


562,964


749,114


836,508


817,367

     Accrued interest and other liabilities

578,347


474,162


512,605


504,198


491,489


526,542


501,518

       Total Liabilities

14,086,308


13,959,424


13,794,597


13,734,515


13,951,782


14,023,216


13,861,346















SHAREHOLDERS’ EQUITY














     Common stock

1,635,990


1,638,321


1,637,828


1,635,833


1,633,950


1,637,149


1,635,409

     Retained earnings

866,910


841,652


822,500


783,760


754,456


854,351


740,481

     Accumulated other comprehensive loss

(190,949)


(38,448)


8,542


36,917


25,832


(115,120)


33,997

     Treasury stock, at cost

(212,281)


(216,030)


(227,050)


(195,217)


(150,551)


(214,145)


(141,694)

       Total Shareholders’ Equity

2,099,670


2,225,495


2,241,820


2,261,293


2,263,687


2,162,235


2,268,193

       Total Liabilities and Shareholders’ Equity

$  16,185,978


$ 16,184,919


$  16,036,417


$  15,995,808


$  16,215,469


$  16,185,451


$  16,129,539
















FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)








 Quarterly Averages


Year-to-Date Averages



June 30, 2022


March 31, 2022


June 30, 2021


June 30, 2022


June 30, 2021



Balance


Interest


Yield


Balance


Interest


Yield


Balance


Interest


Yield


Balance


Yield


Balance


Yield

Earning assets



























    Investments:



























      Investment securities


$      4,118,287


$       28,555


2.78 %


$  4,308,059


$      26,527


2.50 %


$  4,130,207


$      24,395


2.37 %


$  4,212,649


2.64 %


$  3,957,559


2.45 %

      Interest-bearing deposits with other banks


236,797


497


0.84 %


234,687


121


0.21 %


45,593


25


0.22 %


235,748


0.53 %


46,249


0.23 %

    Gross loans (1)


9,367,820


97,091


4.16 %


9,266,774


87,182


3.82 %


9,831,965


97,494


3.98 %


9,317,576


3.99 %


9,891,579


4.00 %

       Total earning assets


13,722,904


126,143


3.69 %


13,809,520


113,830


3.34 %


14,007,765


121,914


3.49 %


13,765,973


3.52 %


13,895,387


3.55 %




























Nonearning assets



























    Allowance for credit losses


(123,950)






(129,601)






(169,979)






(126,760)




(173,899)



    Cash and due from banks


305,803






248,517






237,964






277,318




235,135



    Accrued interest and other assets


2,281,221






2,256,483






2,139,719






2,268,920




2,172,916



       Total assets


$    16,185,978






$ 16,184,919






$ 16,215,469






$ 16,185,451




$ 16,129,539






























Interest-bearing liabilities



























    Deposits:



























      Interest-bearing demand


$      3,180,846


$           842


0.11 %


$  3,246,919


$           492


0.06 %


$  2,973,930


$           489


0.07 %


$  3,213,700


0.08 %


$  2,961,376


0.07 %

      Savings


4,076,380


1,003


0.10 %


4,145,615


850


0.08 %


4,096,077


1,106


0.11 %


4,110,806


0.09 %


3,956,471


0.12 %

      Time


1,055,650


1,118


0.42 %


1,231,266


1,281


0.42 %


1,637,546


2,098


0.51 %


1,142,973


0.42 %


1,702,326


0.56 %

    Total interest-bearing deposits


8,312,876


2,963


0.14 %


8,623,800


2,623


0.12 %


8,707,553


3,693


0.17 %


8,467,479


0.13 %


8,620,173


0.19 %

    Borrowed funds



























      Short-term borrowings


611,075


1,373


0.90 %


316,047


317


0.41 %


235,324


53


0.09 %


464,376


0.73 %


243,469


0.10 %

      Long-term debt


359,168


4,612


5.15 %


385,240


4,544


4.78 %


513,790


4,142


3.23 %


372,132


4.96 %


573,898


2.98 %

        Total borrowed funds


970,243


5,985


2.47 %


701,287


4,861


2.81 %


749,114


4,195


2.25 %


836,508


2.61 %


817,367


2.12 %

       Total interest-bearing liabilities


9,283,119


8,948


0.39 %


9,325,087


7,484


0.33 %


9,456,667


7,888


0.33 %


9,303,987


0.36 %


9,437,540


0.36 %




























Noninterest-bearing liabilities



























    Noninterest-bearing demand deposits


4,224,842






4,160,175






4,003,626






4,192,687




3,922,288



    Other liabilities


578,347






474,162






491,489






526,542




501,518



    Shareholders’ equity


2,099,670






2,225,495






2,263,687






2,162,235




2,268,193



       Total liabilities & shareholders’ equity


$    16,185,978






$ 16,184,919






$ 16,215,469






$ 16,185,451




$ 16,129,539






























Net interest income


$         117,195






$      106,346






$      114,026






$      223,541




$      227,902



Net interest spread






3.30 %






3.01 %






3.16 %




3.16 %




3.19 %

Net interest margin






3.43 %






3.12 %






3.27 %




3.27 %




3.31 %




























Tax equivalent adjustment






0.04 %






0.05 %






0.04 %




0.05 %




0.04 %

Net interest margin (fully tax equivalent)






3.47 %






3.17 %






3.31 %




3.32 %




3.35 %























































(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


$     3,016


$       (988)


$     2,028


$     4,243


$         (83)


$      4,160


$     3,702


$     3,335


$      7,037

    Interest-bearing deposits with other banks


366


10


376


71


401


472


68


497


565

    Gross loans (2)


7,806


2,103


9,909


4,408


(4,811)


(403)


(800)


(11,352)


(12,152)

       Total earning assets


11,188


1,125


12,313


8,722


(4,493)


4,229


2,970


(7,520)


(4,550)




















Interest-bearing liabilities



















    Total interest-bearing deposits


$        417


$         (77)


$        340


$       (589)


$       (141)


$       (730)


$    (2,339)


$       (101)


$     (2,440)

    Borrowed funds



















    Short-term borrowings


385


671


1,056


476


844


1,320


766


804


1,570

    Long-term debt


348


(280)


68


2,455


(1,985)


470


5,645


(4,964)


681

       Total borrowed funds


733


391


1,124


2,931


(1,141)


1,790


6,411


(4,160)


2,251

       Total interest-bearing liabilities


1,150


314


1,464


2,342


(1,282)


1,060


4,072


(4,261)


(189)

          Net interest income (1)


$    10,038


$        811


$    10,849


$     6,380


$    (3,211)


$      3,169


$    (1,102)


$    (3,259)


$     (4,361)




















(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,


2022


2022


2021


2021


2021


2022


2021

ALLOWANCE FOR CREDIT LOSS ACTIVITY











Balance at beginning of period

$  124,130


$  131,992


$  148,903


$  159,590


$  169,923


$  131,992


$  175,679

 Purchase accounting  ACL for PCD

0


0


17


0


0


0


0

  Provision for credit losses

(4,267)


(5,589)


(9,525)


(8,193)


(4,756)


(9,856)


(1,306)

  Gross charge-offs














    Commercial and industrial

773


2,845


1,364


2,617


3,729


3,618


11,639

    Lease financing

8


131


0


0


0


139


0

    Construction real estate

0


0


1,496


0


0


0


2

    Commercial real estate

3,419


0


9,150


1,030


2,041


3,419


3,291

    Residential real estate

4


22


6


74


46


26


47

    Home equity

22


21


22


200


240


43


851

    Installment

361


177


184


37


77


538


113

    Credit card

212


246


149


230


179


458


401

      Total gross charge-offs

4,799


3,442


12,371


4,188


6,312


8,241


16,344

  Recoveries














    Commercial and industrial

177


379


201


869


205


556


542

    Lease financing

3


33


0


0


0


36


0

    Construction real estate

0


0


0


0


3


0


3

    Commercial real estate

2,194


222


4,292


223


75


2,416


270

    Residential real estate

34


90


74


56


54


124


98

    Home equity

360


265


303


426


317


625


494

    Installment

47


21


27


53


37


68


71

    Credit card

6


159


71


67


44


165


83

      Total recoveries

2,821


1,169


4,968


1,694


735


3,990


1,561

  Total net charge-offs

1,978


2,273


7,403


2,494


5,577


4,251


14,783

Ending allowance for credit losses

$  117,885


$  124,130


$  131,992


$  148,903


$  159,590


$  117,885


$  159,590















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











  Commercial and industrial

0.08 %


0.37 %


0.18 %


0.26 %


0.48 %


0.22 %


0.75 %

  Lease financing

0.01 %


0.34 %


0.00 %


0.00 %


0.00 %


0.17 %


0.00 %

  Construction real estate

0.00 %


0.00 %


1.29 %


0.00 %


0.00 %


0.00 %


0.00 %

  Commercial real estate

0.12 %


(0.02) %


0.44 %


0.07 %


0.18 %


0.05 %


0.14 %

  Residential real estate

(0.01) %


(0.03) %


(0.03) %


0.01 %


0.00 %


(0.02) %


(0.01) %

  Home equity

(0.19) %


(0.14) %


(0.16) %


(0.13) %


(0.04) %


(0.17) %


0.10 %

  Installment

0.90 %


0.50 %


0.59 %


(0.07) %


0.19 %


0.71 %


0.10 %

  Credit card

1.50 %


0.67 %


0.58 %


1.29 %


1.12 %


1.10 %


1.35 %

     Total net charge-offs

0.08 %


0.10 %


0.32 %


0.10 %


0.23 %


0.09 %


0.30 %















COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS



  Nonaccrual loans (1)














    Commercial and industrial

$    11,675


$    14,390


$    17,362


$    15,160


$    27,426


$ 11,675


$ 27,426

    Lease financing

217


249


203


0


16


217


16

    Construction real estate

0


0


0


0


0


0


0

    Commercial real estate

14,650


19,843


19,512


38,564


45,957


14,650


45,957

    Residential real estate

8,879


7,432


8,305


9,416


9,480


8,879


9,480

    Home equity

3,331


3,377


2,922


2,735


3,376


3,331


3,376

    Installment

170


163


88


91


115


170


115

      Nonaccrual loans

38,922


45,454


48,392


65,966


86,370


38,922


86,370

  Accruing troubled debt restructurings (TDRs)

11,225


8,055


11,616


11,448


12,070


11,225


12,070

     Total nonperforming loans

50,147


53,509


60,008


77,414


98,440


50,147


98,440

  Other real estate owned (OREO)

22


72


98


340


340


22


340

     Total nonperforming assets

50,169


53,581


60,106


77,754


98,780


50,169


98,780

  Accruing loans past due 90 days or more

142


180


137


104


155


142


155

     Total underperforming assets

$    50,311


$    53,761


$    60,243


$    77,858


$    98,935


$ 50,311


$ 98,935

Total classified assets

$  119,769


$  106,839


$  104,815


$  165,462


$  182,516


$  119,769


$  182,516















CREDIT QUALITY RATIOS











Allowance for credit losses to














     Nonaccrual loans

302.87 %


273.09 %


272.76 %


225.73 %


184.77 %


302.87 %


184.77 %

     Nonperforming loans

235.08 %


231.98 %


219.96 %


192.35 %


162.12 %


235.08 %


162.12 %

     Total ending loans

1.25 %


1.34 %


1.42 %


1.59 %


1.68 %


1.25 %


1.68 %

Nonperforming loans to total loans

0.53 %


0.58 %


0.65 %


0.83 %


1.03 %


0.53 %


1.03 %

Nonaccrual loans to total loans

0.41 %


0.49 %


0.52 %


0.70 %


0.91 %


0.41 %


0.91 %

Nonperforming assets to














     Ending loans, plus OREO

0.53 %


0.58 %


0.65 %


0.83 %


1.04 %


0.53 %


1.04 %

     Total assets

0.31 %


0.33 %


0.37 %


0.49 %


0.62 %


0.31 %


0.62 %

Nonperforming assets, excluding accruing TDRs to














     Ending loans, plus OREO

0.41 %


0.49 %


0.52 %


0.71 %


0.91 %


0.41 %


0.91 %

     Total assets

0.24 %


0.28 %


0.30 %


0.42 %


0.54 %


0.24 %


0.54 %

Classified assets to total assets

0.74 %


0.67 %


0.64 %


1.04 %


1.14 %


0.74 %


1.14 %















(1)  Nonaccrual loans include nonaccrual TDRs of $9.5  million,  $16.2  million,  $16.0  million, $20.3 million,  and $21.5  million, as of June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and  June 30, 2021,  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,


2022


2022


2021


2021


2021


2022


2021

PER COMMON SHARE














Market Price














  High

$          23.03


$          26.73


$          25.79


$          24.06


$           26.02


$                        26.73


$                         26.40

  Low

$          19.09


$          22.92


$          22.89


$          21.48


$           23.35


$                        19.09


$                         17.62

  Close

$          19.40


$          23.05


$          24.38


$          23.41


$           23.63


$                        19.40


$                         23.63















Average shares outstanding – basic

93,555,131


93,383,932


92,903,900


94,289,097


96,123,645


93,470,005


96,496,720

Average shares outstanding – diluted

94,449,817


94,263,925


93,761,909


95,143,930


97,009,712


94,357,392


97,366,640

Ending shares outstanding

94,448,792


94,451,496


94,149,240


93,742,797


96,199,509


94,448,792


96,199,509















Total shareholders’ equity

$    2,068,670


$     ,137,445


$    2,258,942


$    2,236,170


$    2,269,507


$                  2,068,670


$                  2,269,507















REGULATORY CAPITAL

Preliminary










Preliminary



Common equity tier 1 capital

$    1,307,259


$    1,272,115


$    1,262,789


$    1,316,059


$    1,333,209


$                  1,307,259


$                  1,333,209

Common equity tier 1 capital ratio

10.91 %


10.87 %


10.84 %


11.54 %


11.78 %


10.91 %


11.78 %

Tier 1 capital

$    1,351,287


$    1,316,020


$    1,306,571


$    1,359,297


$    1,376,333


$                  1,351,287


$                  1,376,333

Tier 1 ratio

11.28 %


11.24 %


11.22 %


11.92 %


12.16 %


11.28 %


12.16 %

Total capital

$    1,670,367


$    1,635,003


$    1,642,549


$    1,706,513


$    1,732,930


$                  1,670,367


$                  1,732,930

Total capital ratio

13.94 %


13.97 %


14.10 %


14.97 %


15.31 %


13.94 %


15.31 %

Total capital in excess of minimum requirement

$       412,432


$       406,011


$       419,754


$       509,536


$       544,478


$  412,432


$ 544,478

Total risk-weighted assets

$  11,980,331


$  11,704,681


$  11,645,666


$  11,399,782


$  11,318,590


$  11,980,331


$  11,318,590

Leverage ratio

8.76 %


8.64 %


8.70 %


9.05 %


9.14 %


8.76 %


9.14 %















OTHER CAPITAL RATIOS














Ending shareholders’ equity to ending assets

12.74 %


13.35 %


13.83 %


14.01 %


14.15 %


12.74 %


14.15 %

Ending tangible shareholders’ equity to ending tangible assets (1)

6.40 %


6.95 %


7.58 %


8.21 %


8.37 %


6.40 %


8.37 %

Average shareholders’ equity to average assets

12.97 %


13.75 %


13.98 %


14.14 %


13.96 %


13.36 %


14.06 %

Average tangible shareholders’ equity to average tangible assets (1)

6.62 %


7.44 %


8.20 %


8.35 %


8.23 %


7.03 %


8.30 %















REPURCHASE PROGRAM (2)














Shares repurchased

0


0


0


2,484,295


1,308,945


0


2,149,060

Average share repurchase price

N/A


N/A


N/A


$         23.04


$          25.11


N/A


$                        23.66

Total cost of shares repurchased

N/A


N/A


N/A


$       57,231


$        32,864


N/A


$                      50,846
















(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

SOURCE First Financial Bancorp.

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