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Section 1: 8-K (8-K)

Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): July 18, 2019
 
FIRST FINANCIAL BANCORP.
(Exact name of registrant as specified in its charter)
 
Ohio
 
31-1042001
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification number)
 
Commission file number: 001-34762
 
255 East Fifth Street, Suite 700, Cincinnati, Ohio 45202
(Address of principal executive offices and zip code)
 
Registrant's telephone number, including area code: (877) 322-9530
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 
Trading symbol
 
Name of exchange on which registered
Common stock, No par value
 
FFBC
 
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨





Item 2.02    Results of Operations and Financial Condition.

On July 18, 2019, First Financial Bancorp. (the "Company") issued its earnings press release that included its results of operations and financial condition for the first six months and second quarter of 2019. A copy of the earnings press release is attached as Exhibit 99.1.

The Company also provided electronic presentation slides that will be used in connection with the earnings conference call. A copy of the electronic presentation slides is included in this Report as Exhibit 99.2 and will be available on the Company's website, www.bankatfirst.com.

The information set forth in this Current Report on Form 8-K (including the information in Exhibits 99.1 and 99.2 attached hereto) is being furnished to the Securities and Exchange Commission and is not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")    , or otherwise subject to the liabilities under the Exchange Act. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


 

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits:
        
The following exhibits shall not be deemed to be "filed" for purposes of the Exchange Act:
Exhibit No.    Description

99.1 First Financial Bancorp. Press Release dated July 18, 2019
99.2 First Financial Bancorp. presentation materials








SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FIRST FINANCIAL BANCORP.


 
 
By: /s/ James M. Anderson
 
 
James M. Anderson
 
 
Executive Vice President and Chief Financial Officer
 
 
 
Date:
July 18, 2019
 

                    




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Document
Exhibit 99.1
398795837_yellowbara08.jpg398795837_bancorplogo.jpg                                        
First Financial Bancorp Announces Second Quarter Financial Results

Second Quarter 2019 Earnings per Diluted Share Increased 13% from First Quarter 2019
7.8% Loan Growth on an Annualized Basis
Board Approves Dividend Increase

Cincinnati, Ohio - July 18, 2019 - First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the second quarter 2019 and an increase in the quarterly dividend from $0.22 to $0.23 per share, payable on September 16, 2019 to shareholders of record as of September 2, 2019.

For the three months ended June 30, 2019, the Company reported net income of $52.7 million, or $0.53 per diluted common share. These results compare to net income of $45.8 million, or $0.47 per diluted common share, for the first quarter of 2019 and $36.4 million, or $0.37 per diluted common share, for the second quarter of 2018. Second quarter 2019 income before taxes was negatively impacted by $5.2 million of severance and merger related costs. For the six months ended June 30, 2019, First Financial had earnings per diluted common share of $1.00 compared to $0.83 for the same period in 2018.

Return on average assets for the second quarter of 2019 was 1.50% while return on average tangible common equity was 17.33%. These compare to returns on average assets of 1.33% and 1.05%, and returns on average tangible common equity of 15.95% and 13.75%, in the first quarter of 2019 and the second quarter of 2018, respectively.

Second quarter 2019 highlights include:

After adjustments(1) for merger-related and nonrecurring items:
Net income of $0.58 per diluted common share
1.63% return on average assets
18.87% return on average tangible common equity

Loan balances grew 7.8% on an annualized basis
$171.6 million increase compared to the linked quarter

Net interest margin of 4.04% on a fully tax-equivalent basis(1) 
6 basis point reduction from the linked quarter driven by higher funding costs and day count

Noninterest income increased 29.1% compared to the linked quarter
Driven by record client derivative fees and solid mortgage banking activity combined with higher bankcard and service charge income

Noninterest expenses of $84.4 million, or $78.9 million as adjusted(1)
Efficiency ratio of 53.8% for the second quarter; 50.3% as adjusted(1) 
    
Provision expense of $6.7 million; primarily impacted by additional reserves required for the franchise relationship discussed in the first quarter

Strong capital ratios
Total capital of 14.21%; Tier 1 common equity of 12.02%; Tangible common equity of 9.34%
Tangible book value increased to $12.79
____________________________________________________________________________________________(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.

1


Archie Brown, President and Chief Executive Officer, commented, “The second quarter of 2019 was another highly successful one for First Financial, and further demonstrates the consistency and capabilities of the Company. Loan growth, net interest margin, fee income and efficiency all met or surpassed our expectations resulting in adjusted(1) earnings per share of $0.58 and a top quartile adjusted(1) return on assets of 1.63%.”
Mr. Brown continued, “We remain optimistic about the prospect of sustained success in the near term. We were particularly pleased with the level of loan growth during the quarter, in addition to record fee income and prudent expense management. While we face some pressure on the margin given the expected rate environment, we are working to mitigate the potential impact through disciplined deposit pricing initiatives. Aside from additional provision related to the workout of the franchise credit disclosed last quarter, credit costs were better than expectations and overall credit remains stable."

Mr. Brown concluded, "We were excited to announce the acquisition of Bannockburn Global Forex, LLC, which will enhance our capabilities to serve middle market clients, broaden our customer base and drive higher fee income. Additionally, we are pleased to announce an increase in the quarterly dividend to $0.23, reflecting our commitment to deploying capital in a way that sustains financial and operating success in addition to directly rewarding shareholders. While the announced acquisition impacted potential share repurchase activity during the quarter, our strong capital levels provide the flexibility for further additional capital deployment opportunities in the future."
Full detail of the Company’s second quarter and year to date 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 19, 2019 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 10133133. 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.




2


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: (i) economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company’s business; (ii) 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; (iii) management’s ability to effectively execute its business plans; (iv) mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; (v) the possibility that any of the anticipated benefits of the Company’s merger with MainSource Financial Group, Inc. will not be realized or will not be realized within the expected time period; (vi) the effect of changes in accounting policies and practices; (vii) changes in consumer spending, borrowing and saving and changes in unemployment; (viii) changes in customers’ performance and creditworthiness; and (ix) the costs and effects of litigation and of unexpected or adverse outcomes in such litigation. 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, 2018, 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, 2019, the Company had $14.4 billion in assets, $9.0 billion in loans, $10.1 billion in deposits and $2.2 billion in shareholders’ equity. The Company’s subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.8 billion in assets under management as of June 30, 2019. The Company operated 159 banking centers as of June 30, 2019, primarily in Ohio, Indiana and Kentucky, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.


Contact Information
Investors/Analysts                    Media
Jamie Anderson                        Lauren Ponti-Zins
Chief Financial Officer                    Marketing Specialist
(513) 887-5400                        (513) 246-2137
[email protected]            [email protected]    

3



398795837_contentsheader0215a19.jpg
Selected Financial Information
June 30, 2019
(unaudited)


Contents
Page
Consolidated Financial Highlights
2
Consolidated Statements of Income
3
Consolidated Quarterly Statements of Income
4-5
Consolidated Statements of Condition
6
Average Consolidated Statements of Condition
7
Net Interest Margin Rate / Volume Analysis
8-9
Credit Quality
10
Capital Adequacy
11




    
FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended,
 
Six months ended,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
June 30,
 
2019
 
2019
 
2018
 
2018
 
2018
 
2019
 
2018
RESULTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
52,703

 
$
45,839

 
$
55,014

 
$
50,657

 
$
36,418

 
$
98,542

 
$
66,924

Net earnings per share - basic
$
0.54

 
$
0.47

 
$
0.56

 
$
0.52

 
$
0.37

 
$
1.01

 
$
0.84

Net earnings per share - diluted
$
0.53

 
$
0.47

 
$
0.56

 
$
0.51

 
$
0.37

 
$
1.00

 
$
0.83

Dividends declared per share
$
0.22

 
$
0.22

 
$
0.20

 
$
0.20

 
$
0.19

 
$
0.44

 
$
0.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
KEY FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.50
%
 
1.33
%
 
1.59
%
 
1.45
 %
 
1.05
%
 
1.42
%
 
1.18
%
Return on average shareholders' equity
9.85
%
 
8.88
%
 
10.68
%
 
9.94
 %
 
7.36
%
 
9.37
%
 
9.19
%
Return on average tangible shareholders' equity
17.33
%
 
15.95
%
 
19.63
%
 
18.52
 %
 
13.75
%
 
16.66
%
 
15.12
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
3.99
%
 
4.05
%
 
4.16
%
 
4.06
 %
 
4.10
%
 
4.02
%
 
3.98
%
Net interest margin (fully tax equivalent) (1)
4.04
%
 
4.10
%
 
4.21
%
 
4.12
 %
 
4.15
%
 
4.07
%
 
4.03
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending shareholders' equity as a percent of ending assets
15.16
%
 
15.14
%
 
14.86
%
 
14.70
 %
 
14.46
%
 
15.16
%
 
14.46
%
Ending tangible shareholders' equity as a percent of:
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending tangible assets
9.34
%
 
9.15
%
 
8.79
%
 
8.53
 %
 
8.30
%
 
9.34
%
 
8.30
%
Risk-weighted assets
11.84
%
 
11.61
%
 
11.20
%
 
10.77
 %
 
10.52
%
 
11.84
%
 
10.52
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity as a percent of average assets
15.22
%
 
15.01
%
 
14.84
%
 
14.62
 %
 
14.33
%
 
15.12
%
 
12.87
%
Average tangible shareholders' equity as a percent of
 
 
 
 
 
 
 
 
 
 
 
 
 
    average tangible assets
9.26
%
 
8.95
%
 
8.66
%
 
8.42
 %
 
8.16
%
 
9.11
%
 
8.24
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per share
$
22.18

 
$
21.60

 
$
21.23

 
$
20.79

 
$
20.56

 
$
22.18

 
$
20.56

Tangible book value per share
$
12.79

 
$
12.19

 
$
11.72

 
$
11.25

 
$
11.01

 
$
12.79

 
$
11.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 ratio (2)
12.02
%
 
12.03
%
 
11.87
%
 
11.52
 %
 
11.15
%
 
12.02
%
 
11.15
%
Tier 1 ratio (2)
12.42
%
 
12.43
%
 
12.28
%
 
11.93
 %
 
11.55
%
 
12.42
%
 
11.55
%
Total capital ratio (2)
14.21
%
 
14.24
%
 
14.10
%
 
13.77
 %
 
13.36
%
 
14.21
%
 
13.36
%
Leverage ratio (2)
10.02
%
 
9.84
%
 
9.71
%
 
9.41
 %
 
9.06
%
 
10.02
%
 
9.06
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCE SHEET ITEMS
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans (3)
$
8,852,662

 
$
8,773,310

 
$
8,766,302

 
$
8,848,710

 
$
8,933,400

 
$
8,813,206

 
$
7,483,004

FDIC indemnification asset

 

 

 

 

 

 
747

Investment securities
3,408,994

 
3,355,732

 
3,204,758

 
3,168,044

 
3,157,339

 
3,382,510

 
2,603,139

Interest-bearing deposits with other banks
33,255

 
34,709

 
32,013

 
39,873

 
29,261

 
33,978

 
28,173

  Total earning assets
$
12,294,911

 
$
12,163,751

 
$
12,003,073

 
$
12,056,627

 
$
12,120,000

 
$
12,229,694

 
$
10,115,063

Total assets
$
14,102,733

 
$
13,952,551

 
$
13,768,958

 
$
13,822,675

 
$
13,956,360

 
$
14,028,058

 
$
11,407,429

Noninterest-bearing deposits
$
2,484,214

 
$
2,457,587

 
$
2,476,773

 
$
2,388,976

 
$
2,421,230

 
$
2,470,974

 
$
1,998,251

Interest-bearing deposits
7,612,146

 
7,610,092

 
7,573,069

 
7,499,112

 
7,961,405

 
7,611,125

 
6,654,334

  Total deposits
$
10,096,360

 
$
10,067,679

 
$
10,049,842

 
$
9,888,088

 
$
10,382,635

 
$
10,082,099

 
$
8,652,585

Borrowings
$
1,656,570

 
$
1,587,068

 
$
1,509,642

 
$
1,748,415

 
$
1,408,024

 
$
1,622,011

 
$
1,138,931

Shareholders' equity
$
2,146,997

 
$
2,094,234

 
$
2,042,884

 
$
2,021,400

 
$
2,000,093

 
$
2,120,762

 
$
1,467,741

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
Allowance to ending loans
0.69
%
 
0.64
%
 
0.64
%
 
0.65
 %
 
0.61
%
 
0.69
%
 
0.61
%
Allowance to nonaccrual loans
119.86
%
 
95.40
%
 
79.97
%
 
136.22
 %
 
133.65
%
 
119.86
%
 
133.65
%
Allowance to nonperforming loans
69.33
%
 
68.94
%
 
65.13
%
 
92.08
 %
 
86.80
%
 
69.33
%
 
86.80
%
Nonperforming loans to total loans
0.99
%
 
0.93
%
 
0.98
%
 
0.71
 %
 
0.70
%
 
0.99
%
 
0.70
%
Nonperforming assets to ending loans, plus OREO
1.00
%
 
0.95
%
 
1.00
%
 
0.73
 %
 
0.72
%
 
1.00
%
 
0.72
%
Nonperforming assets to total assets
0.62
%
 
0.60
%
 
0.63
%
 
0.47
 %
 
0.46
%
 
0.62
%
 
0.46
%
Classified assets to total assets
1.02
%
 
1.01
%
 
0.94
%
 
1.00
 %
 
1.00
%
 
1.02
%
 
1.00
%
Net charge-offs to average loans (annualized)
0.08
%
 
0.64
%
 
0.29
%
 
(0.02
)%
 
0.18
%
 
0.36
%
 
0.16
%

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.
(2) June 30, 2019 regulatory capital ratios are preliminary.
(3) Includes loans held for sale.


2



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,
 
2019
 
2018
 
% Change
 
2019
 
2018
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
  Loans and leases, including fees
$
126,365

 
$
122,290

 
3.3
 %
 
$
249,421

 
$
197,210

 
26.5
 %
  Investment securities

 
 
 
 
 
 
 
 
 
 
     Taxable
23,616

 
20,844

 
13.3
 %
 
47,851

 
34,514

 
38.6
 %
     Tax-exempt
4,336

 
4,068

 
6.6
 %
 
8,594

 
5,725

 
50.1
 %
        Total investment securities interest
27,952

 
24,912

 
12.2
 %
 
56,445

 
40,239

 
40.3
 %
  Other earning assets
206

 
177

 
16.4
 %
 
416

 
284

 
46.5
 %
       Total interest income
154,523

 
147,379

 
4.8
 %
 
306,282

 
237,733

 
28.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
 
 
 
  Deposits
20,612

 
14,794

 
39.3
 %
 
39,855

 
25,092

 
58.8
 %
  Short-term borrowings
6,646

 
4,132

 
60.8
 %
 
12,606

 
6,795

 
85.5
 %
  Long-term borrowings
4,963

 
4,474

 
10.9
 %
 
10,004

 
6,055

 
65.2
 %
      Total interest expense
32,221

 
23,400

 
37.7
 %
 
62,465

 
37,942

 
64.6
 %
      Net interest income
122,302

 
123,979

 
(1.4
)%
 
243,817

 
199,791

 
22.0
 %
  Provision for loan and lease losses
6,658

 
3,735

 
78.3
 %
 
20,741

 
6,038

 
243.5
 %
      Net interest income after provision for loan and lease losses
115,644

 
120,244

 
(3.8
)%
 
223,076

 
193,753

 
15.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
  Service charges on deposit accounts
9,819

 
9,568

 
2.6
 %
 
18,722

 
14,607

 
28.2
 %
  Trust and wealth management fees
3,943

 
3,697

 
6.7
 %
 
8,013

 
7,651

 
4.7
 %
  Bankcard income
6,497

 
5,343

 
21.6
 %
 
12,083

 
8,737

 
38.3
 %
  Client derivative fees
4,905

 
1,463

 
235.3
 %
 
6,609

 
3,220

 
105.2
 %
  Net gains from sales of loans
3,432

 
2,316

 
48.2
 %
 
5,322

 
2,904

 
83.3
 %
  Net gains (losses) on sale of investment securities
(37
)
 
(30
)
 
23.3
 %
 
(215
)
 
(30
)
 
616.7
 %
  Other
6,079

 
5,899

 
3.1
 %
 
10,931

 
8,105

 
34.9
 %
      Total noninterest income
34,638

 
28,256

 
22.6
 %
 
61,465

 
45,194

 
36.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expenses
 
 
 
 
 
 
 
 
 
 
 
  Salaries and employee benefits
53,985

 
55,531

 
(2.8
)%
 
101,897

 
86,633

 
17.6
 %
  Net occupancy
5,596

 
6,631

 
(15.6
)%
 
12,226

 
11,128

 
9.9
 %
  Furniture and equipment
4,222

 
5,298

 
(20.3
)%
 
7,638

 
7,338

 
4.1
 %
  Data processing
4,984

 
14,304

 
(65.2
)%
 
10,111

 
17,976

 
(43.8
)%
  Marketing
1,976

 
2,644

 
(25.3
)%
 
3,582

 
3,445

 
4.0
 %
  Communication
747

 
1,118

 
(33.2
)%
 
1,475

 
1,577

 
(6.5
)%
  Professional services
2,039

 
5,659

 
(64.0
)%
 
4,291

 
7,857

 
(45.4
)%
  State intangible tax
1,307

 
1,078

 
21.2
 %
 
2,617

 
1,843

 
42.0
 %
  FDIC assessments
1,065

 
1,323

 
(19.5
)%
 
2,015

 
2,217

 
(9.1
)%
  Intangible amortization
2,044

 
2,364

 
(13.5
)%
 
4,089

 
2,644

 
54.7
 %
  Other
6,413

 
6,805

 
(5.8
)%
 
12,936

 
12,385

 
4.4
 %
      Total noninterest expenses
84,378

 
102,755

 
(17.9
)%
 
162,877

 
155,043

 
5.1
 %
Income before income taxes
65,904

 
45,745

 
44.1
 %
 
121,664

 
83,904

 
45.0
 %
Income tax expense
13,201

 
9,327

 
41.5
 %
 
23,122

 
16,980

 
36.2
 %
      Net income
$
52,703

 
$
36,418

 
44.7
 %
 
$
98,542

 
$
66,924

 
47.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
ADDITIONAL DATA
 
 
 
 
 
 
 
 
 
 
 
Net earnings per share - basic
$
0.54

 
$
0.37

 
 
 
$
1.01

 
$
0.84

 
 
Net earnings per share - diluted
$
0.53

 
$
0.37

 
 
 
$
1.00

 
$
0.83

 
 
Dividends declared per share
$
0.22

 
$
0.19

 
 
 
$
0.44

 
$
0.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.50
%
 
1.05
%
 
 
 
1.42
%
 
1.18
%
 
 
Return on average shareholders' equity
9.85
%
 
7.36
%
 
 
 
9.37
%
 
9.19
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
154,523

 
$
147,379

 
4.8
 %
 
$
306,282

 
$
237,733

 
28.8
 %
Tax equivalent adjustment
1,416

 
1,420

 
(0.3
)%
 
2,939

 
2,138

 
37.5
 %
   Interest income - tax equivalent
155,939

 
148,799

 
4.8
 %
 
309,221

 
239,871

 
28.9
 %
Interest expense
32,221

 
23,400

 
37.7
 %
 
62,465

 
37,942

 
64.6
 %
   Net interest income - tax equivalent
$
123,718

 
$
125,399

 
(1.3
)%
 
$
246,756

 
$
201,929

 
22.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
3.99
%
 
4.10
%
 
 
 
4.02
%
 
3.98
%
 
 
Net interest margin (fully tax equivalent) (1)
4.04
%
 
4.15
%
 
 
 
4.07
%
 
4.03
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Full-time equivalent employees
2,076

 
2,118

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 
 
 
 
 
 

3


FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
2019
 
Second
 
First
 
Full
 
% Change
 
Quarter
 
Quarter
 
Year
 
Linked Qtr.
Interest income
 
 
 
 
 
 
 
  Loans and leases, including fees
$
126,365

 
$
123,056

 
$
249,421

 
2.7
 %
  Investment securities
 
 
 
 
 
 
 
     Taxable
23,616

 
24,235

 
47,851

 
(2.6
)%
     Tax-exempt
4,336

 
4,258

 
8,594

 
1.8
 %
        Total investment securities interest
27,952

 
28,493

 
56,445

 
(1.9
)%
  Other earning assets
206

 
210

 
416

 
(1.9
)%
       Total interest income
154,523

 
151,759

 
306,282

 
1.8
 %
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
  Deposits
20,612

 
19,243

 
39,855

 
7.1
 %
  Short-term borrowings
6,646

 
5,960

 
12,606

 
11.5
 %
  Long-term borrowings
4,963

 
5,041

 
10,004

 
(1.5
)%
      Total interest expense
32,221

 
30,244

 
62,465

 
6.5
 %
      Net interest income
122,302

 
121,515

 
243,817

 
0.6
 %
  Provision for loan and lease losses
6,658

 
14,083

 
20,741

 
(52.7
)%
      Net interest income after provision for loan and lease losses
115,644

 
107,432

 
223,076

 
7.6
 %
 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
  Service charges on deposit accounts
9,819

 
8,903

 
18,722

 
10.3
 %
  Trust and wealth management fees
3,943

 
4,070

 
8,013

 
(3.1
)%
  Bankcard income
6,497

 
5,586

 
12,083

 
16.3
 %
  Client derivative fees
4,905

 
1,704

 
6,609

 
187.9
 %
  Net gains from sales of loans
3,432

 
1,890

 
5,322

 
81.6
 %
  Net gains (losses) on sale of investment securities
(37
)
 
(178
)
 
(215
)
 
79.2
 %
  Other
6,079

 
4,852

 
10,931

 
25.3
 %
      Total noninterest income
34,638

 
26,827

 
61,465

 
29.1
 %
 
 
 
 
 
 
 
 
Noninterest expenses
 
 
 
 
 
 
 
  Salaries and employee benefits
53,985

 
47,912

 
101,897

 
12.7
 %
  Net occupancy
5,596

 
6,630

 
12,226

 
(15.6
)%
  Furniture and equipment
4,222

 
3,416

 
7,638

 
23.6
 %
  Data processing
4,984

 
5,127

 
10,111

 
(2.8
)%
  Marketing
1,976

 
1,606

 
3,582

 
23.0
 %
  Communication
747

 
728

 
1,475

 
2.6
 %
  Professional services
2,039

 
2,252

 
4,291

 
(9.5
)%
  State intangible tax
1,307

 
1,310

 
2,617

 
(0.2
)%
  FDIC assessments
1,065

 
950

 
2,015

 
12.1
 %
  Intangible amortization
2,044

 
2,045

 
4,089

 
0.0
 %
  Other
6,413

 
6,523

 
12,936

 
(1.7
)%
      Total noninterest expenses
84,378

 
78,499

 
162,877

 
7.5
 %
Income before income taxes
65,904

 
55,760

 
121,664

 
18.2
 %
Income tax expense
13,201

 
9,921

 
23,122

 
33.1
 %
      Net income
$
52,703

 
$
45,839

 
$
98,542

 
15.0
 %
 
 
 
 
 
 
 
 
ADDITIONAL DATA
 
 
 
 
 
 
 
Net earnings per share - basic
$
0.54

 
$
0.47

 
$
1.01

 
 
Net earnings per share - diluted
$
0.53

 
$
0.47

 
$
1.00

 
 
Dividends declared per share
$
0.22

 
$
0.22

 
$
0.44

 
 
 
 
 
 
 
 
 
 
Return on average assets
1.50
%
 
1.33
%
 
1.42
%
 
 
Return on average shareholders' equity
9.85
%
 
8.88
%
 
9.37
%
 
 
 
 
 
 
 
 
 
 
Interest income
$
154,523

 
$
151,759

 
$
306,282

 
1.8
 %
Tax equivalent adjustment
1,416

 
1,523

 
2,939

 
(7.0
)%
   Interest income - tax equivalent
155,939

 
153,282

 
309,221

 
1.7
 %
Interest expense
32,221

 
30,244

 
62,465

 
6.5
 %
   Net interest income - tax equivalent
$
123,718

 
$
123,038

 
$
246,756

 
0.6
 %
 
 
 
 
 
 
 
 
Net interest margin
3.99
%
 
4.05
%
 
4.02
%
 
 
Net interest margin (fully tax equivalent) (1)
4.04
%
 
4.10
%
 
4.07
%
 
 
 
 
 
 
 
 
 
 
Full-time equivalent employees
2,076

 
2,087

 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 
 

4


FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
2018
 
Fourth
 
Third
 
Second
 
First
 
Full
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Year
Interest income
 
 
 
 
 
 
 
 
 
  Loans and leases, including fees
$
126,580

 
$
123,397

 
$
122,290

 
$
74,920

 
$
447,187

  Investment securities
 
 
 
 
 
 
 
 
 
     Taxable
22,761

 
21,801

 
20,844

 
13,670

 
79,076

     Tax-exempt
3,896

 
3,807

 
4,068

 
1,657

 
13,428

        Total investment securities interest
26,657

 
25,608

 
24,912

 
15,327

 
92,504

  Other earning assets
192

 
215

 
177

 
107

 
691

       Total interest income
153,429

 
149,220

 
147,379

 
90,354

 
540,382

 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
 
  Deposits
17,198

 
14,672

 
14,794

 
10,298

 
56,962

  Short-term borrowings
5,186

 
6,052

 
4,132

 
2,663

 
18,033

  Long-term borrowings
5,086

 
5,011

 
4,474

 
1,581

 
16,152

      Total interest expense
27,470

 
25,735

 
23,400

 
14,542

 
91,147

      Net interest income
125,959

 
123,485

 
123,979

 
75,812

 
449,235

  Provision for loan and lease losses
5,310

 
3,238

 
3,735

 
2,303

 
14,586

      Net interest income after provision for loan and lease losses
120,649

 
120,247

 
120,244

 
73,509

 
434,649

 
 
 
 
 
 
 
 
 


Noninterest income
 
 
 
 
 
 
 
 
 
  Service charges on deposit accounts
10,185

 
10,316

 
9,568

 
5,039

 
35,108

  Trust and wealth management fees
3,703

 
3,728

 
3,697

 
3,954

 
15,082

  Bankcard income
6,247

 
5,261

 
5,343

 
3,394

 
20,245

  Client derivative fees
1,433

 
3,029

 
1,463

 
1,757

 
7,682

  Net gains from sales of loans
1,428

 
1,739

 
2,316

 
588

 
6,071

  Net gains on sale of investment securities
36

 
(167
)
 
(30
)
 
0

 
(161
)
  Other
6,472

 
4,778

 
5,899

 
2,206

 
19,355

      Total noninterest income
29,504

 
28,684

 
28,256

 
16,938

 
103,382

 
 
 
 
 
 
 
 
 
 
Noninterest expenses
 
 
 
 
 
 
 
 
 
  Salaries and employee benefits
51,505

 
50,852

 
55,531

 
31,102

 
188,990

  Net occupancy
6,322

 
6,765

 
6,631

 
4,497

 
24,215

  Furniture and equipment
3,498

 
4,072

 
5,298

 
2,040

 
14,908

  Data processing
5,599

 
4,502

 
14,304

 
3,672

 
28,077

  Marketing
1,651

 
2,502

 
2,644

 
801

 
7,598

  Communication
805

 
785

 
1,118

 
459

 
3,167

  Professional services
1,794

 
2,621

 
5,659

 
2,198

 
12,272

  State intangible tax
1,086

 
1,223

 
1,078

 
765

 
4,152

  FDIC assessments
1,018

 
734

 
1,323

 
894

 
3,969

  Intangible amortization
2,229

 
2,486

 
2,364

 
280

 
7,359

  Other
7,845

 
8,873

 
6,805

 
5,580

 
29,103

      Total noninterest expenses
83,352

 
85,415

 
102,755

 
52,288

 
323,810

Income before income taxes
66,801

 
63,516

 
45,745

 
38,159

 
214,221

Income tax expense (benefit)
11,787

 
12,859

 
9,327

 
7,653

 
41,626

      Net income
$
55,014

 
$
50,657

 
$
36,418

 
$
30,506

 
$
172,595

 
 
 
 
 
 
 
 
 


ADDITIONAL DATA
 
 
 
 
 
 
 
 
 
Net earnings per share - basic
$
0.56

 
$
0.52

 
$
0.37

 
$
0.49

 
$
1.95

Net earnings per share - diluted
$
0.56

 
$
0.51

 
$
0.37

 
$
0.49

 
$
1.93

Dividends declared per share
$
0.20

 
$
0.20

 
$
0.19

 
$
0.19

 
$
0.78

 
 
 
 
 
 
 
 
 
 
Return on average assets
1.59
%
 
1.45
%
 
1.05
%
 
1.40
%
 
1.37
%
Return on average shareholders' equity
10.68
%
 
9.94
%
 
7.36
%
 
13.31
%
 
9.85
%
 
 
 
 
 
 
 
 
 
 
Interest income
$
153,429

 
$
149,220

 
$
147,379

 
$
90,354

 
$
540,382

Tax equivalent adjustment
1,442

 
1,567

 
1,420

 
718

 
5,147

   Interest income - tax equivalent
154,871

 
150,787

 
148,799

 
91,072

 
545,529

Interest expense
27,470

 
25,735

 
23,400

 
14,542

 
91,147

   Net interest income - tax equivalent
$
127,401

 
$
125,052

 
$
125,399

 
$
76,530

 
$
454,382

 
 
 
 
 
 
 
 
 
 
Net interest margin
4.16
%
 
4.06
%
 
4.10
%
 
3.80
%
 
4.05
%
Net interest margin (fully tax equivalent) (1)
4.21
%
 
4.12
%
 
4.15
%
 
3.84
%
 
4.10
%
 
 
 
 
 
 
 
 
 
 
Full-time equivalent employees
2,073

 
2,028

 
2,118

 
1,289

 
 
 
 
 
 
 
 
 
 
 
 
(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.

5



FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
% Change
 
% Change
 
2019
 
2019
 
2018
 
2018
 
2018
 
Linked Qtr.
 
Comp Qtr.
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
     Cash and due from banks
$
169,694

 
$
169,004

 
$
236,221

 
$
193,288

 
$
216,667

 
0.4
 %
 
(21.7
)%
     Interest-bearing deposits with other banks
101,668

 
50,224

 
37,738

 
28,989

 
37,915

 
102.4
 %
 
168.1
 %
     Investment securities available-for-sale
3,152,970

 
3,113,811

 
2,779,255

 
2,626,726

 
2,654,909

 
1.3
 %
 
18.8
 %
     Investment securities held-to-maturity
154,327

 
158,305

 
429,328

 
434,369

 
443,957

 
(2.5
)%
 
(65.2
)%
     Other investments
127,439

 
115,731

 
115,660

 
115,757

 
95,004

 
10.1
 %
 
34.1
 %
     Loans held for sale
20,244

 
8,217

 
4,372

 
13,277

 
15,821

 
146.4
 %
 
28.0
 %
     Loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
 
       Commercial and industrial
2,547,997

 
2,543,427

 
2,514,661

 
2,426,590

 
2,440,596

 
0.2
 %
 
4.4
 %
       Lease financing
90,638

 
95,573

 
93,415

 
95,317

 
96,198

 
(5.2
)%
 
(5.8
)%
       Construction real estate
497,683

 
458,113

 
548,935

 
565,077

 
555,468

 
8.6
 %
 
(10.4