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Section 1: 8-K (8-K)

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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): October 17, 2019
 
FIRST FINANCIAL BANCORP.
(Exact name of registrant as specified in its charter)
 
Ohio
 
001-34762
 
31-1042001
(State or other jurisdiction of
incorporation or organization)
 
(Commission File Number)
 
(I.R.S. employer
identification number)
 
 
 
 
 
 
255 East Fifth Street, Suite 800
 
Cincinnati,
Ohio
 
45202
(Address of principal executive offices)
 
(Zip Code)
 
Registrant's telephone number, including area code: (877322-9530
 
 
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 October 17, 2019, First Financial Bancorp. (the "Company") issued its earnings press release that included its results of operations and financial condition for the first nine months and third 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 October 17, 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:
October 17, 2019
 

                    




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Section 2: EX-99.1 (EXHIBIT 99.1)

Document
                                                Exhibit 99.1
400428900_yellowbara10.jpg400428900_bancorplogoa02.jpg                                        
First Financial Bancorp Announces Third Quarter Financial Results
Third Quarter 2019 Earnings per Diluted Share of $0.51
3.7% Loan Growth on an Annualized Basis
3.96% fully tax equivalent net interest margin
Strong noninterest income of $33.1 million
Successful closing of Bannockburn acquisition

Cincinnati, Ohio - October 17, 2019 - First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the third quarter 2019.

For the three months ended September 30, 2019, the Company reported net income of $50.9 million, or $0.51 per diluted common share. These results compare to net income of $52.7 million, or $0.53 per diluted common share, for the second quarter of 2019 and $50.7 million, or $0.51 per diluted common share, for the third quarter of 2018. Income before taxes was negatively impacted by $5.2 million of severance and merger-related items and $0.7 million of branch consolidation costs, which combined to reduce earnings per diluted common share by $0.05 after income taxes. For the nine months ended September 30, 2019, First Financial had earnings per diluted common share of $1.51 compared to $1.36 for the same period in 2018.

Return on average assets for the third quarter of 2019 was 1.41% while return on average tangible common equity was 16.15%. These compare to returns on average assets of 1.50% and 1.45%, and returns on average tangible common equity of 17.33% and 18.52%, in the second quarter of 2019 and the third quarter of 2018, respectively.

Third quarter 2019 highlights include:

After adjustments(1) for merger-related and nonrecurring items:
Net income of $0.56 per diluted common share
1.54% return on average assets; 17.63% return on average tangible common equity

Loan balances grew 3.7% on an annualized basis
$82.9 million increase compared to the linked quarter

Net interest margin of 3.96% on a fully tax-equivalent basis(1) 
8 basis point reduction from the linked quarter driven by lower asset yields

Noninterest income of $33.1 million
Positively impacted by acquisition of Bannockburn, strong mortgage banking income, and sustained client derivative and service charge income; combined to largely offset the impact from Durbin

Noninterest expenses of $86.2 million, or $80.3 million as adjusted(1)
Efficiency ratio of 55.7%; 52.0% as adjusted(1) 
    
ALLL declined to $56.6 million, or 0.62% of loans; Improvement in nonperforming and classified asset levels; elevated net charge-offs related to previously discussed franchise relationships

Strong capital ratios
Total capital of 13.64%; Tier 1 common equity of 11.53%; Tangible common equity of 9.17%
Tangible book value decreased to $12.33
____________________________________________________________________________________________(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, remarked, “We are pleased to announce strong third quarter performance buoyed by consistent earnings, strong fee income and our ability to maintain a solid net interest margin. Annualized loan growth, fee income and net interest margin met or surpassed our expectations, and resulted in adjusted(1) earnings per share of $0.56 and an adjusted(1) return on assets of 1.54%.”
Mr. Brown continued, “Record loan originations were more than enough to offset a spike in payoffs, resulting in annualized loan growth of 3.7% for the quarter. Despite interest rate headwinds, net interest margin was at the high end of our expectations as we were able to proactively reduce deposit costs. Our focus will remain on disciplined deposit pricing to help mitigate the impact of further fed rate reductions. Credit trends are improving as both nonperforming and classified asset balances declined during the period; however we were disappointed in elevated net charge-offs, which were driven by three large franchise relationships discussed in prior periods. Overall, we remain satisfied with our strong operating performance in the midst of a challenging interest rate environment."

Mr Brown further noted, "We were also excited to complete the purchase of Bannockburn at the end of August. This strategic acquisition broadens our product offerings to middle market clients, expands our customer base and increases fee income, consistent with our stated objectives."
Mr. Brown concluded, "We repurchased 1.1 million shares during the quarter, which reflects our intention to maximize shareholder value while maintaining strong capital levels. The share repurchases and the acquisition of Bannockburn modestly impacted our capital ratios. We believe that our strong capital position provides the flexibility for additional capital deployment opportunities in the future."
Full detail of the Company’s third 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, October 18, 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 10135470. 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 September 30, 2019, the Company had $14.5 billion in assets, $9.1 billion in loans, $10.1 billion in deposits and $2.3 billion in shareholders’ equity. The Company’s subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.9 billion in assets under management as of September 30, 2019. The Company operated 145 full service banking centers as of September 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                        Tim Condron
Chief Financial Officer                    Marketing Communications Manager
(513) 887-5400                        (513) 979-5796
InvestorRela[email protected]            [email protected]    

3



400428900_contentsheader0215a20.jpg
Selected Financial Information
September 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,
 
Nine months ended,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Sep. 30,
 
2019
 
2019
 
2019
 
2018
 
2018
 
2019
 
2018
RESULTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
50,856

 
$
52,703

 
$
45,839

 
$
55,014

 
$
50,657

 
$
149,398

 
$
117,581

Net earnings per share - basic
$
0.52

 
$
0.54

 
$
0.47

 
$
0.56

 
$
0.52

 
$
1.52

 
$
1.37

Net earnings per share - diluted
$
0.51

 
$
0.53

 
$
0.47

 
$
0.56

 
$
0.51

 
$
1.51

 
$
1.36

Dividends declared per share
$
0.23

 
$
0.22

 
$
0.22

 
$
0.20

 
$
0.20

 
$
0.67

 
$
0.58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
KEY FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.41
%
 
1.50
%
 
1.33
%
 
1.59
%
 
1.45
 %
 
1.41
%
 
1.29
%
Return on average shareholders' equity
9.13
%
 
9.85
%
 
8.88
%
 
10.68
%
 
9.94
 %
 
9.29
%
 
9.50
%
Return on average tangible shareholders' equity
16.15
%
 
17.33
%
 
15.95
%
 
19.63
%
 
18.52
 %
 
16.48
%
 
16.42
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
3.91
%
 
3.99
%
 
4.05
%
 
4.16
%
 
4.06
 %
 
3.98
%
 
4.01
%
Net interest margin (fully tax equivalent) (1)
3.96
%
 
4.04
%
 
4.10
%
 
4.21
%
 
4.12
 %
 
4.03
%
 
4.06
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending shareholders' equity as a percent of ending assets
15.62
%
 
15.16
%
 
15.14
%
 
14.86
%
 
14.70
 %
 
15.62
%
 
14.70
%
Ending tangible shareholders' equity as a percent of:
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending tangible assets
9.17
%
 
9.34
%
 
9.15
%
 
8.79
%
 
8.53
 %
 
9.17
%
 
8.53
%
Risk-weighted assets
11.35
%
 
11.82
%
 
11.61
%
 
11.20
%
 
10.77
 %
 
11.35
%
 
10.77
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity as a percent of average assets
15.43
%
 
15.22
%
 
15.01
%
 
14.84
%
 
14.62
 %
 
15.23
%
 
13.54
%
Average tangible shareholders' equity as a percent of
 
 
 
 
 
 
 
 
 
 
 
 
 
    average tangible assets
9.35
%
 
9.26
%
 
8.95
%
 
8.66
%
 
8.42
 %
 
9.19
%
 
8.31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per share
$
22.59

 
$
22.18

 
$
21.60

 
$
21.23

 
$
20.79

 
$
22.59

 
$
20.79

Tangible book value per share
$
12.33

 
$
12.79

 
$
12.19

 
$
11.72

 
$
11.25

 
$
12.33

 
$
11.25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 ratio (2)
11.53
%
 
12.00
%
 
12.03
%
 
11.87
%
 
11.52
 %
 
11.53
%
 
11.52
%
Tier 1 ratio (2)
11.93
%
 
12.40
%
 
12.43
%
 
12.28
%
 
11.93
 %
 
11.93
%
 
11.93
%
Total capital ratio (2)
13.64
%
 
14.20
%
 
14.24
%
 
14.10
%
 
13.77
 %
 
13.64
%
 
13.77
%
Leverage ratio (2)
9.75
%
 
10.02
%
 
9.84
%
 
9.71
%
 
9.41
 %
 
9.75
%
 
9.41
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCE SHEET ITEMS
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans (3)
$
9,014,092

 
$
8,852,662

 
$
8,773,310

 
$
8,766,302

 
$
8,848,710

 
$
8,880,904

 
$
7,943,737

Investment securities
3,290,666

 
3,408,994

 
3,355,732

 
3,204,758

 
3,168,044

 
3,351,559

 
2,793,510

Interest-bearing deposits with other banks
38,569

 
33,255

 
34,709

 
32,013

 
39,873

 
35,525

 
32,116

  Total earning assets
$
12,343,327

 
$
12,294,911

 
$
12,163,751

 
$
12,003,073

 
$
12,056,627

 
$
12,267,988

 
$
10,769,363

Total assets
$
14,320,514

 
$
14,102,733

 
$
13,952,551

 
$
13,768,958

 
$
13,822,675

 
$
14,126,615

 
$
12,221,358

Noninterest-bearing deposits
$
2,513,458

 
$
2,484,214

 
$
2,457,587

 
$
2,476,773

 
$
2,388,976

 
$
2,485,291

 
$
2,129,924

Interest-bearing deposits
7,504,708

 
7,612,146

 
7,610,092

 
7,573,069

 
7,499,112

 
7,575,263

 
6,939,021

  Total deposits
$
10,018,166

 
$
10,096,360

 
$
10,067,679

 
$
10,049,842

 
$
9,888,088

 
$
10,060,554

 
$
9,068,945

Borrowings
$
1,816,983

 
$
1,656,570

 
$
1,587,068

 
$
1,509,642

 
$
1,748,415

 
$
1,687,716

 
$
1,344,325

Shareholders' equity
$
2,210,327

 
$
2,146,997

 
$
2,094,234

 
$
2,042,884

 
$
2,021,400

 
$
2,150,945

 
$
1,654,322

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
Allowance to ending loans
0.62
%
 
0.69
%
 
0.64
%
 
0.64
%
 
0.65
 %
 
0.62
%
 
0.65
%
Allowance to nonaccrual loans
93.18
%
 
119.86
%
 
95.40
%
 
79.97
%
 
136.22
 %
 
93.18
%
 
136.22
%
Allowance to nonperforming loans
71.46
%
 
69.33
%
 
68.94
%
 
65.13
%
 
92.08
 %
 
71.46
%
 
92.08
%
Nonperforming loans to total loans
0.87
%
 
0.99
%
 
0.93
%
 
0.98
%
 
0.71
 %
 
0.87
%
 
0.71
%
Nonperforming assets to ending loans, plus OREO
0.89
%
 
1.00
%
 
0.95
%
 
1.00
%
 
0.73
 %
 
0.89
%
 
0.73
%
Nonperforming assets to total assets
0.56
%
 
0.62
%
 
0.60
%
 
0.63
%
 
0.47
 %
 
0.56
%
 
0.47
%
Classified assets to total assets
0.92
%
 
1.02
%
 
1.01
%
 
0.94
%
 
1.00
 %
 
0.92
%
 
1.00
%
Net charge-offs to average loans (annualized)
0.45
%
 
0.08
%
 
0.64
%
 
0.29
%
 
(0.02
)%
 
0.39
%
 
0.09
%

(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) September 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,
 
Nine months ended,
 
Sep. 30,
 
Sep. 30,
 
2019
 
2018
 
% Change
 
2019
 
2018
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
  Loans and leases, including fees
$
126,786

 
$
123,397

 
2.7
 %
 
$
376,207

 
$
320,607

 
17.3
 %
  Investment securities

 
 
 
 
 
 
 
 
 
 
     Taxable
22,180

 
21,801

 
1.7
 %
 
70,031

 
56,315

 
24.4
 %
     Tax-exempt
4,457

 
3,807

 
17.1
 %
 
13,051

 
9,532

 
36.9
 %
        Total investment securities interest
26,637

 
25,608

 
4.0
 %
 
83,082

 
65,847

 
26.2
 %
  Other earning assets
222

 
215

 
3.3
 %
 
638

 
499

 
27.9
 %
       Total interest income
153,645

 
149,220

 
3.0
 %
 
459,927

 
386,953

 
18.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
 
 
 
  Deposits
20,151

 
14,672

 
37.3
 %
 
60,006

 
39,764

 
50.9
 %
  Short-term borrowings
7,199

 
6,052

 
19.0
 %
 
19,805

 
12,847

 
54.2
 %
  Long-term borrowings
4,760

 
5,011

 
(5.0
)%
 
14,764

 
11,066

 
33.4
 %
      Total interest expense
32,110

 
25,735

 
24.8
 %
 
94,575

 
63,677

 
48.5
 %
      Net interest income
121,535

 
123,485

 
(1.6
)%
 
365,352

 
323,276

 
13.0
 %
  Provision for loan and lease losses
5,228

 
3,238

 
61.5
 %
 
25,969

 
9,276

 
180.0
 %
      Net interest income after provision for loan and lease losses
116,307

 
120,247

 
(3.3
)%
 
339,383

 
314,000

 
8.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
  Service charges on deposit accounts
9,874

 
10,316

 
(4.3
)%
 
28,596

 
24,923

 
14.7
 %
  Trust and wealth management fees
3,718

 
3,728

 
(0.3
)%
 
11,731

 
11,379

 
3.1
 %
  Bankcard income
3,316

 
5,261

 
(37.0
)%
 
15,399

 
13,998

 
10.0
 %
  Client derivative fees
4,859

 
3,029

 
60.4
 %
 
11,468

 
6,249

 
83.5
 %
  Foreign exchange income
1,708

 
0

 
N/M

 
1,725

 
0

 
N/M

  Net gains from sales of loans
4,806

 
1,739

 
176.4
 %
 
10,128

 
4,643

 
118.1
 %
  Net gains (losses) on sale of investment securities
105

 
(167
)
 
162.9
 %
 
(110
)
 
(197
)
 
(44.2
)%
  Other
4,754

 
4,778

 
(0.5
)%
 
15,668

 
12,883

 
21.6
 %
      Total noninterest income
33,140

 
28,684

 
15.5
 %
 
94,605

 
73,878

 
28.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expenses
 
 
 
 
 
 
 
 
 
 
 
  Salaries and employee benefits
53,212

 
50,852

 
4.6
 %
 
155,109

 
137,485

 
12.8
 %
  Net occupancy
5,509

 
6,765

 
(18.6
)%
 
17,735

 
17,893

 
(0.9
)%
  Furniture and equipment
4,120

 
4,072

 
1.2
 %
 
11,758

 
11,410

 
3.0
 %
  Data processing
5,774

 
4,502

 
28.3
 %
 
15,885

 
22,478

 
(29.3
)%
  Marketing
1,346

 
2,502

 
(46.2
)%
 
4,928

 
5,947

 
(17.1
)%
  Communication
910

 
785

 
15.9
 %
 
2,385

 
2,362

 
1.0
 %
  Professional services
4,771

 
2,621

 
82.0
 %
 
9,062

 
10,478

 
(13.5
)%
  State intangible tax
1,445

 
1,223

 
18.2
 %
 
4,062

 
3,066

 
32.5
 %
  FDIC assessments
(1,097
)
 
734

 
(249.5
)%
 
918

 
2,951

 
(68.9
)%
  Intangible amortization
2,432

 
2,486

 
(2.2
)%
 
6,521

 
5,130

 
27.1
 %
  Other
7,804

 
8,873

 
(12.0
)%
 
20,740

 
21,258

 
(2.4
)%
      Total noninterest expenses
86,226

 
85,415

 
0.9
 %
 
249,103

 
240,458

 
3.6
 %
Income before income taxes
63,221

 
63,516

 
(0.5
)%
 
184,885

 
147,420

 
25.4
 %
Income tax expense
12,365

 
12,859

 
(3.8
)%
 
35,487

 
29,839

 
18.9
 %
      Net income
$
50,856

 
$
50,657

 
0.4
 %
 
$
149,398

 
$
117,581

 
27.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
ADDITIONAL DATA
 
 
 
 
 
 
 
 
 
 
 
Net earnings per share - basic
$
0.52

 
$
0.52

 
 
 
$
1.52

 
$
1.37

 
 
Net earnings per share - diluted
$
0.51

 
$
0.51

 
 
 
$
1.51

 
$
1.36

 
 
Dividends declared per share
$
0.23

 
$
0.20

 
 
 
$
0.67

 
$
0.58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.41
%
 
1.45
%
 
 
 
1.41
%
 
1.29
%
 
 
Return on average shareholders' equity
9.13
%
 
9.94
%
 
 
 
9.29
%
 
9.50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
153,645

 
$
149,220

 
3.0
 %
 
$
459,927

 
$
386,953

 
18.9
 %
Tax equivalent adjustment
1,759

 
1,567

 
12.3
 %
 
4,698

 
3,705

 
26.8
 %
   Interest income - tax equivalent
155,404

 
150,787

 
3.1
 %
 
464,625

 
390,658

 
18.9
 %
Interest expense
32,110

 
25,735

 
24.8
 %
 
94,575

 
63,677

 
48.5
 %
   Net interest income - tax equivalent
$
123,294

 
$
125,052

 
(1.4
)%
 
$
370,050

 
$
326,981

 
13.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
3.91
%
 
4.06
%
 
 
 
3.98
%
 
4.01
%
 
 
Net interest margin (fully tax equivalent) (1)
3.96
%
 
4.12
%
 
 
 
4.03
%
 
4.06
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Full-time equivalent employees
2,064

 
2,028

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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
 
Third
 
Second
 
First
 
Full
 
% Change
 
Quarter
 
Quarter
 
Quarter
 
Year
 
Linked Qtr.
Interest income
 
 
 
 
 
 
 
 
 
  Loans and leases, including fees
$
126,786

 
$
126,365

 
$
123,056

 
$
376,207

 
0.3
 %
  Investment securities
 
 
 
 
 
 
 
 
 
     Taxable
22,180

 
23,616

 
24,235

 
70,031

 
(6.1
)%
     Tax-exempt
4,457

 
4,336

 
4,258

 
13,051

 
2.8
 %
        Total investment securities interest
26,637

 
27,952

 
28,493

 
83,082

 
(4.7
)%
  Other earning assets
222

 
206

 
210

 
638

 
7.8
 %
       Total interest income
153,645

 
154,523

 
151,759

 
459,927

 
(0.6
)%
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
 
  Deposits
20,151

 
20,612

 
19,243

 
60,006

 
(2.2
)%
  Short-term borrowings
7,199

 
6,646

 
5,960

 
19,805

 
8.3
 %
  Long-term borrowings
4,760

 
4,963

 
5,041

 
14,764

 
(4.1
)%
      Total interest expense
32,110

 
32,221

 
30,244

 
94,575

 
(0.3
)%
      Net interest income
121,535

 
122,302

 
121,515

 
365,352

 
(0.6
)%
  Provision for loan and lease losses
5,228

 
6,658

 
14,083

 
25,969

 
(21.5
)%
      Net interest income after provision for loan and lease losses
116,307

 
115,644

 
107,432

 
339,383

 
0.6
 %
 
 
 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
 
 
  Service charges on deposit accounts
9,874

 
9,819

 
8,903

 
28,596

 
0.6
 %
  Trust and wealth management fees
3,718

 
3,943

 
4,070

 
11,731

 
(5.7
)%
  Bankcard income
3,316

 
6,497

 
5,586

 
15,399

 
(49.0
)%
  Client derivative fees
4,859

 
4,905

 
1,704

 
11,468

 
(0.9
)%
  Foreign exchange income
1,708

 
17

 
0

 
1,725

 
N/M

  Net gains from sales of loans
4,806

 
3,432

 
1,890

 
10,128

 
40.0
 %
  Net gains (losses) on sale of investment securities
105

 
(37
)
 
(178
)
 
(110
)
 
383.8
 %
  Other
4,754

 
6,062

 
4,852

 
15,668

 
(21.6
)%
      Total noninterest income
33,140

 
34,638

 
26,827

 
94,605

 
(4.3
)%
 
 
 
 
 
 
 
 
 
 
Noninterest expenses
 
 
 
 
 
 
 
 
 
  Salaries and employee benefits
53,212

 
53,985

 
47,912

 
155,109

 
(1.4
)%
  Net occupancy
5,509

 
5,596

 
6,630

 
17,735

 
(1.6
)%
  Furniture and equipment
4,120

 
4,222

 
3,416

 
11,758

 
(2.4
)%
  Data processing
5,774

 
4,984

 
5,127

 
15,885

 
15.9
 %
  Marketing
1,346

 
1,976

 
1,606

 
4,928

 
(31.9
)%
  Communication
910

 
747

 
728

 
2,385

 
21.8
 %
  Professional services
4,771

 
2,039

 
2,252

 
9,062

 
134.0
 %
  State intangible tax
1,445

 
1,307

 
1,310

 
4,062

 
10.6
 %
  FDIC assessments
(1,097
)
 
1,065

 
950

 
918

 
(203.0
)%
  Intangible amortization
2,432

 
2,044

 
2,045

 
6,521

 
19.0
 %
  Other
7,804

 
6,413

 
6,523

 
20,740

 
21.7
 %
      Total noninterest expenses
86,226

 
84,378

 
78,499

 
249,103

 
2.2
 %
Income before income taxes
63,221

 
65,904

 
55,760

 
184,885

 
(4.1
)%
Income tax expense
12,365

 
13,201

 
9,921

 
35,487

 
(6.3
)%
      Net income
$
50,856

 
$
52,703

 
$
45,839

 
$
149,398

 
(3.5
)%
 
 
 
 
 
 
 
 
 
 
ADDITIONAL DATA
 
 
 
 
 
 
 
 
 
Net earnings per share - basic
$
0.52

 
$
0.54

 
$
0.47

 
$
1.52

 
 
Net earnings per share - diluted
$
0.51

 
$
0.53

 
$
0.47

 
$
1.51

 
 
Dividends declared per share
$
0.23

 
$
0.22

 
$
0.22

 
$
0.67

 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.41
%
 
1.50
%
 
1.33
%
 
1.41
%
 
 
Return on average shareholders' equity
9.13
%
 
9.85
%
 
8.88
%
 
9.29
%
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
153,645

 
$
154.523

 
$
151,759

 
$
459,927

 
(0.6
)%
Tax equivalent adjustment
1,759

 
1.416

 
1,523

 
4,698

 
24.2
 %
   Interest income - tax equivalent
155,404

 
155.939

 
153,282

 
464,625

 
(0.3
)%
Interest expense
32,110

 
32.221

 
30,244

 
94,575

 
(0.3
)%
   Net interest income - tax equivalent
$
123,294

 
$
123.718

 
$
123,038

 
$
370,050

 
(0.3
)%
 
 
 
 
 
 
 
 
 
 
Net interest margin
3.91
%
 
3.99
%
 
4.05
%
 
3.98
%
 
 
Net interest margin (fully tax equivalent) (1)
3.96
%
 
4.04
%
 
4.10
%
 
4.03
%
 
 
 
 
 
 
 
 
 
 
 
 
Full-time equivalent employees
2,064

 
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
%