FFBC - First Financial Bancorp Announces First Quarter 2021 Financial Results

April, 22 2021 04:15 PM First Financial Bancorp.

PR Newswire

CINCINNATI , April 22, 2021 /PRNewswire/ --

Earnings per diluted share of $0.48 ; $0.50 on an adjusted ⁽¹⁾ basis
Return on average assets of 1.20%; 1.24% as adjusted ⁽¹⁾
Net interest margin FTE ⁽¹⁾ of 3.40%
Provision for credit losses of $4.0 million ; $7.5 million decline from linked quarter
Repurchased 840,115 shares during the quarter

First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three months ended March 31 , 2021.

For the three months ended March 31, 2021, the Company reported net income of $47.3 million , or $0.48 per diluted common share. These results compare to net income of $48.3 million , or $0.49 per diluted common share, for the fourth quarter of 2020 and $28.6 million , or $0.29 per diluted common share, for the first quarter of 2020.

Return on average assets for the first quarter of 2021 was 1.20% while return on average tangible common equity was 15.24%. These compare to returns on average assets of 1.20% and 0.79%, and returns on average tangible common equity of 15.50% and 9.71%, in the fourth quarter of 2020 and the first quarter of 2020, respectively.

First quarter 2021 highlights include:

After adjustments ⁽¹⁾ for certain nonrecurring items:

Net income of $0.50 per diluted common share
1.24% return on average assets
15.80% return on average tangible common equity

Net interest margin of 3.40% on a fully tax-equivalent basis ⁽¹⁾ in line with expectations

9 basis point reduction from linked quarter driven by fewer fees related to loan prepayments, and lower volume of PPP forgiveness

Noninterest income of $40.3 million , or $40.2 million as adjusted ⁽¹⁾

Foreign exchange income of $10.8 million remains strong despite decline from record fourth quarter
Mortgage income of $9.5 million in line with expectations given expected seasonal declines and lower premiums

Noninterest expenses of $92.5 million , or $90.0 million as adjusted ⁽¹⁾

Adjustments ⁽¹⁾ include:

$1.3 million of severance related costs
$1.3 million of other nonrecurring costs such as branch consolidation costs

Efficiency ratio of 60.0%; 58.4% as adjusted ⁽¹⁾

Excluding PPP growth, loan balances declined slightly during the quarter driven primarily by a decline in consumer and mortgage loans
Average transactional deposit balances grew $523.7 million compared to the linked quarter; 21.1% on an annualized basis

⁽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.

Total Allowance for Credit Losses of $183.0 million ; Total quarterly provision for credit losses of $4.0 million

Loans and leases - ACL of $169.9 million , 1.71% of total loans; 1.84% of loans excluding PPP
Unfunded Commitments - ACL of $13.0 million
First quarter provision expense driven by net charge-offs, partially offset by improvements in economic conditions

Strong capital ratios

Total capital of 15.41%
Tier 1 common equity of 11.81%
Tangible common equity of 8.22%; 8.62% excluding PPP loans
Tangible book value per share of $12.78 ; $0.15 decrease compared to linked quarter
Repurchased 840,115 shares during first quarter

Archie Brown , President and Chief Executive Officer, remarked, "While uncertainty remains due to the ongoing pandemic, the accelerated COVID-19 vaccine distribution, unprecedented fiscal stimulus, and an accommodative Federal Reserve have led to widespread optimism for our economy, which is in stark contrast to our sentiment at this time last year. Our first quarter operating performance reflects this change in sentiment and we have renewed optimism as a result of the improved business climate, despite an operating environment that presents challenges due to very low interest rates and muted loan demand."

Mr. Brown continued, "Our first quarter financial results once again reflect our earnings power and our consistent ability to deliver value to our shareholders. Our core quarterly financial metrics remained strong with adjusted ⁽¹⁾ earnings per share of $0.50 , adjusted ⁽¹⁾ return on assets of 1.24%, and an adjusted ⁽¹⁾ efficiency ratio of 58.4%. Net income was bolstered by lower expenses and significantly lower credit costs. Despite expected seasonal declines, noninterest income was strong due to healthy mortgage demand, robust foreign exchange activity and higher wealth management fees. In addition, adjusted ⁽¹⁾ noninterest expenses declined $4.6 million from the linked quarter and resulted in a sub-60% efficiency ratio. As I mentioned, credit costs were low with $4.0 million of provision expense during the quarter, and resulted in an allowance for credit losses of 1.84% of total loans, excluding PPP. Classified assets increased during the quarter, however our overall credit outlook has improved significantly and our borrowers are seeing benefits from the various stimulus actions. While first quarter net charge-offs increased slightly from previous quarters, this was driven by a single customer relationship. Given our overall credit outlook, we expect the allowance for credit losses to continue to decline over the course of 2021."

Mr. Brown commented on balance sheet trends and capital utilization, "Excluding PPP activity, loan balances declined slightly for the quarter due to accelerated mortgage and HELOC payoffs, increased borrower liquidity, and muted business loan demand. As a result of these trends, we anticipate slower growth in the near-term, with some acceleration in the second half of the year. As of March 31 , consumers and businesses were holding record levels of deposits, with average balances increasing during the quarter as a result of the stimulus package approved by Congress last December. We anticipate further deposit balance growth in the second quarter after the passage of the most recent stimulus bill. This anticipated growth will likely suppress loan demand and service charge income in the near-term. From a capital standpoint, our ratios remained strong through the first quarter. The combination of our current capital levels and our improved credit outlook, prompted us to repurchase 840,115 shares during the quarter. Absent higher priority capital deployment alternatives, we anticipate additional buyback activity in the second quarter."

Mr. Brown concluded, "We are pleased with our improved performance and outlook from this time last year. We have started to transition associates back into their physical office locations, and we look forward to implementing the lessons learned over the past year to create an efficient, safe, and collaborative workplace. As our local and national economies continue to improve, we believe we are well positioned to deliver industry leading services to our clients and returns to our shareholders."

Full detail of the Company's first quarter 2021 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, April 23, 2021 at 8:30 a.m. Eastern Time . Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 ( Canada toll free) or +1 (412) 380-2003 (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com . A replay of the conference call will be available beginning one hour after the completion of the live call at (877) 344-7529 (U.S. toll free), (855) 669-9658 ( Canada toll free) and +1 (412) 317-0088 (International); conference number 10154329. The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

Press Release and Additional Information on Website
This press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com .

Use of Non-GAAP Financial Measures
This earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company's results of operations or financial position. Where Non-GAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Forward-Looking Statement

Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ''believes,'' ''anticipates,'' "likely," "expected," "estimated," ''intends'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements. Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:

economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business;
future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses
the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry;
Management's ability to effectively execute its business plans;
mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;
the possibility that any of the anticipated benefits of the Company's acquisitions will not be realized or will not be realized within the expected time period;
the effect of changes in accounting policies and practices;
changes in consumer spending, borrowing and saving and changes in unemployment;
changes in customers' performance and creditworthiness;
the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth;
the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impact of a slowing U.S. economy and increased unemployment on the performance of our loan and lease portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products;
our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses;
a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;
the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and
our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2020 , as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov .

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, the Company does not assume any obligation to update any forward-looking statement.

About First Financial Bancorp.
First Financial Bancorp. is a Cincinnati, Ohio based bank holding company. As of March 31, 2021, the Company had $16.2 billion in assets, $9.9 billion in loans, $12.6 billion in deposits and $2.3 billion in shareholders' equity. The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.1 billion in assets under management as of March 31, 2021. The Company operated 143 full service banking centers as of March 31, 2021, primarily in Ohio , Indiana , Kentucky and Illinois , while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com .

FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)











Three Months Ended,

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2021

2020

2020

2020

2020
RESULTS OF OPERATIONS









Net income
$
47,315


$
48,312


$
41,477


$
37,393


$
28,628

Net earnings per share - basic
$
0.49


$
0.50


$
0.43


$
0.38


$
0.29

Net earnings per share - diluted
$
0.48


$
0.49


$
0.42


$
0.38


$
0.29

Dividends declared per share
$
0.23


$
0.23


$
0.23


$
0.23


$
0.23











KEY FINANCIAL RATIOS









Return on average assets
1.20
%

1.20
%

1.04
%

0.96
%

0.79
%
Return on average shareholders' equity
8.44
%

8.52
%

7.40
%

6.88
%

5.21
%
Return on average tangible shareholders' equity
15.24
%

15.50
%

13.61
%

12.90
%

9.71
%










Net interest margin
3.35
%

3.45
%

3.32
%

3.38
%

3.71
%
Net interest margin (fully tax equivalent) ⁽¹⁾
3.40
%

3.49
%

3.36
%

3.44
%

3.77
%










Ending shareholders' equity as a percent of ending assets
13.97
%

14.29
%

14.11
%

13.99
%

14.47
%
Ending tangible shareholders' equity as a percent of:









Ending tangible assets
8.22
%

8.47
%

8.25
%

8.09
%

8.25
%
Risk-weighted assets
11.02
%

11.29
%

11.07
%

10.89
%

10.50
%










Average shareholders' equity as a percent of average assets
14.17
%

14.07
%

14.08
%

13.91
%

15.21
%
Average tangible shareholders' equity as a percent of









average tangible assets
8.38
%

8.26
%

8.18
%

7.94
%

8.79
%










Book value per share
$
23.16


$
23.28


$
22.94


$
22.66


$
22.25

Tangible book value per share
$
12.78


$
12.93


$
12.56


$
12.26


$
11.82











Common equity tier 1 ratio ⁽²⁾
11.81
%

11.82
%

11.63
%

11.49
%

11.27
%
Tier 1 ratio ⁽²⁾
12.19
%

12.20
%

12.02
%

11.87
%

11.66
%
Total capital ratio ⁽²⁾
15.41
%

15.55
%

15.37
%

15.19
%

13.54
%
Leverage ratio ⁽²⁾
9.34
%

9.55
%

9.55
%

8.98
%

9.49
%










AVERAGE BALANCE SHEET ITEMS









Loans ⁽³⁾
$
9,951,855


$
10,127,881


$
10,253,392


$
10,002,379


$
9,220,643

Investment securities
3,782,993


3,403,839


3,162,832


3,164,243


3,115,723

Interest-bearing deposits with other banks
46,912


143,884


40,277


91,990


39,332

Total earning assets
$
13,781,760


$
13,675,604


$
13,456,501


$
13,258,612


$
12,375,698

Total assets
$
16,042,654


$
16,030,986


$
15,842,010


$
15,710,204


$
14,524,422

Noninterest-bearing deposits
$
3,840,046


$
3,720,417


$
3,535,432


$
3,335,866


$
2,643,240

Interest-bearing deposits
8,531,822


8,204,306


8,027,082


8,395,229


7,590,791

Total deposits
$
12,371,868


$
11,924,723


$
11,562,514


$
11,731,095


$
10,234,031

Borrowings
$
886,379


$
1,307,461


$
1,519,748


$
1,272,819


$
1,735,767

Shareholders' equity
$
2,272,749


$
2,256,062


$
2,230,422


$
2,185,865


$
2,209,733











CREDIT QUALITY RATIOS








Allowance to ending loans
1.71
%

1.77
%

1.65
%

1.56
%

1.55
%
Allowance to nonaccrual loans
199.33
%

217.55
%

216.28
%

233.74
%

296.51
%
Allowance to nonperforming loans
175.44
%

199.97
%

196.69
%

208.06
%

203.42
%
Nonperforming loans to total loans
0.97
%

0.89
%

0.84
%

0.75
%

0.76
%
Nonperforming assets to ending loans, plus OREO
0.98
%

0.90
%

0.86
%

0.77
%

0.78
%
Nonperforming assets to total assets
0.60
%

0.56
%

0.55
%

0.49
%

0.48
%
Classified assets to total assets
1.22
%

0.89
%

0.84
%

0.79
%

0.83
%
Net charge-offs to average loans (annualized)
0.38
%

0.26
%

0.21
%

0.12
%

(0.04)
%

⁽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⁾ March 31, 2021 regulatory capital ratios are preliminary.

⁽³⁾ Includes loans held for sale.

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)













2021

2020

First

Fourth

Third

Second

First

Full

Quarter

Quarter

Quarter

Quarter

Quarter

Year
Interest income











Loans and leases, including fees
$
98,931


$
106,733


$
103,249


$
105,900


$
115,775


$
431,657

Investment securities











Taxable
18,607


18,402


17,906


18,476


19,005


73,789

Tax-exempt
5,043


4,839


4,884


4,937


4,582


19,242

Total investment securities interest
23,650


23,241


22,790


23,413


23,587


93,031

Other earning assets
28


55


31


47


142


275

Total interest income
122,609


130,029


126,070


129,360


139,504


524,963













Interest expense











Deposits
4,333


5,920


7,886


11,751


16,365


41,922

Short-term borrowings
67


30


51


1,274


5,087


6,442

Long-term borrowings
4,333


5,606


5,953


4,759


3,770


20,088

Total interest expense
8,733


11,556


13,890


17,784


25,222


68,452

Net interest income
113,876


118,473


112,180


111,576


114,282


456,511

Provision for credit losses-loans and leases
3,450


13,758


15,299


17,859


23,880


70,796

Provision for credit losses-unfunded commitments
538


(2,250)


(1,925)


2,370


1,568


(237)

Net interest income after provision for credit losses
109,888


106,965


98,806


91,347


88,834


385,952













Noninterest income











Service charges on deposit accounts
7,146


7,654


7,356


6,001


8,435


29,446

Trust and wealth management fees
4,398


4,093


3,855


4,114


4,469


16,531

Bankcard income
3,128


3,060


3,124


2,844


2,698


11,726

Client derivative fees
1,556


2,021


2,203


2,984


3,105


10,313

Foreign exchange income
10,757


12,305


10,530


6,576


9,966


39,377

Net gains from sales of loans
9,454


13,089


18,594


16,662


2,831


51,176

Net gains (losses) on sale of investment securities
(166)


4,618


2


2


(59)


4,563

Unrealized gain (loss) on equity securities
112


8,975


18


150


(98)


9,045

Other
3,937


5,700


3,817


3,392


4,037


16,946

Total noninterest income
40,322


61,515


49,499


42,725


35,384


189,123













Noninterest expenses











Salaries and employee benefits
61,253


62,263


63,769


55,925


54,822


236,779

Net occupancy
5,704


6,159


5,625


5,378


6,104


23,266

Furniture and equipment
3,969


3,596


3,638


3,681


4,053


14,968

Data processing
7,287


7,269


6,837


7,019


6,389


27,514

Marketing
1,361


1,999


1,856


1,339


1,220


6,414

Communication
838


840


855


907


890


3,492

Professional services
1,450


3,038


2,443


2,205


2,275


9,961

Debt extinguishment
0


7,257


0


0


0


7,257

State intangible tax
1,202


1,514


1,514


1,514


1,516


6,058

FDIC assessments
1,349


1,065


1,350


1,290


1,405


5,110

Intangible amortization
2,479


2,764


2,779


2,791


2,792


11,126

Other
5,614


17,034


6,845


6,640


8,200


38,719

Total noninterest expenses
92,506


114,798


97,511


88,689


89,666


390,664

Income before income taxes
57,704


53,682


50,794


45,383


34,552


184,411

Income tax expense (benefit)
10,389


5,370


9,317


7,990


5,924


28,601

Net income
$
47,315


$
48,312


$
41,477


$
37,393


$
28,628


$
155,810













ADDITIONAL DATA











Net earnings per share - basic
$
0.49


$
0.50


$
0.43


$
0.38


$
0.29


$
1.60

Net earnings per share - diluted
$
0.48


$
0.49


$
0.42


$
0.38


$
0.29


$
1.59

Dividends declared per share
$
0.23


$
0.23


$
0.23


$
0.23


$
0.23


$
0.92













Return on average assets
1.20
%

1.20
%

1.04
%

0.96
%

0.79
%

1.00
%
Return on average shareholders' equity
8.44
%

8.52
%

7.40
%

6.88
%

5.21
%

7.02
%












Interest income
$
122,609


$
130,029


$
126,070


$
129,360


$
139,504


$
524,963

Tax equivalent adjustment
1,652


1,613


1,628


1,664


1,624


6,529

Interest income - tax equivalent
124,261


131,642


127,698


131,024


141,128


531,492

Interest expense
8,733


11,556


13,890


17,784


25,222


68,452

Net interest income - tax equivalent
$
115,528


$
120,086


$
113,808


$
113,240


$
115,906


$
463,040













Net interest margin
3.35
%

3.45
%

3.32
%

3.38
%

3.71
%

3.46
%
Net interest margin (fully tax equivalent) ⁽¹⁾
3.40
%

3.49
%

3.36
%

3.44
%

3.77
%

3.51
%












Full-time equivalent employees
2,063


2,075


2,065


2,076


2,067

⁽¹⁾ The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)















Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

% Change

% Change

2021

2020

2020

2020

2020

Linked Qtr.

Comp Qtr.
ASSETS













Cash and due from banks
$
210,191


$
231,054


$
207,128


$
283,639


$
261,892


(9.0)
%

(19.7)
%
Interest-bearing deposits with other banks
19,180


20,305


38,806


38,845


71,071


(5.5)
%

(73.0)
%
Investment securities available-for-sale
3,753,763


3,424,580


3,004,963


2,897,413


2,908,688


9.6
%

29.1
%
Investment securities held-to-maturity
121,945


131,687


118,072


127,347


136,744


(7.4)
%

(10.8)
%
Other investments
131,814


133,198


118,292


132,366


143,581


(1.0)
%

(8.2)
%
Loans held for sale
34,590


41,103


69,008


43,950


27,334


(15.8)
%

26.5
%
Loans and leases













Commercial and industrial
3,044,825


3,007,509


3,292,313


3,322,374


2,477,773


1.2
%

22.9
%
Lease financing
66,574


72,987


74,742


80,087


82,602


(8.8)
%

(19.4)
%
Construction real estate
642,709


636,096


575,648


506,085


500,311


1.0
%

28.5
%
Commercial real estate
4,396,582


4,307,858


4,347,125


4,343,702


4,278,257


2.1
%

2.8
%
Residential real estate
946,522


1,003,086


1,027,702


1,043,745


1,061,792


(5.6)
%

(10.9)
%
Home equity
709,667


743,099


754,743


764,171


781,243


(4.5)
%

(9.2)
%
Installment
82,421


81,850


84,629


79,150


80,085


0.7
%

2.9
%
Credit card
44,669


48,485


43,907


42,397


45,756


(7.9)
%

(2.4)
%
Total loans
9,933,969


9,900,970


10,200,809


10,181,711


9,307,819


0.3
%

6.7
%
Less:













Allowance for credit losses
169,923


175,679


168,544


158,661


143,885


(3.3)
%

18.1
%
Net loans
9,764,046


9,725,291


10,032,265


10,023,050


9,163,934


0.4
%

6.5
%
Premises and equipment
204,537


207,211


209,474


211,164


212,787


(1.3)
%

(3.9)
%
Goodwill
937,771


937,771


937,771


937,771


937,771


0.0
%

0.0
%
Other intangibles
61,984


64,552


67,419


70,325


73,258


(4.0)
%

(15.4)
%
Accrued interest and other assets
935,250


1,056,382


1,122,449


1,105,020


1,120,507


(11.5)
%

(16.5)
%
Total Assets
$
16,175,071


$
15,973,134


$
15,925,647


$
15,870,890


$
15,057,567


1.3
%

7.4
%














LIABILITIES













Deposits













Interest-bearing demand
$
2,914,761


$
2,914,787


$
2,632,467


$
2,657,841


$
2,498,109


0.0
%

16.7
%
Savings
4,006,181


3,680,774


3,446,678


3,287,314


2,978,250


8.8
%

34.5
%
Time
1,731,757


1,872,733


1,935,392


2,241,212


2,435,858


(7.5)
%

(28.9)
%
Total interest-bearing deposits
8,652,699


8,468,294


8,014,537


8,186,367


7,912,217


2.2
%

9.4
%
Noninterest-bearing
3,995,370


3,763,709


3,552,893


3,515,048


2,723,341


6.2
%

46.7
%
Total deposits
12,648,069


12,232,003


11,567,430


11,701,415


10,635,558


3.4
%

18.9
%
Federal funds purchased and securities sold













under agreements to repurchase
181,387


166,594


247,658


154,347


215,824


8.9
%

(16.0)
%
FHLB short-term borrowings
0


0


0


0


1,181,900


0.0
%

(100.0)
%
Total short-term borrowings
181,387


166,594


247,658


154,347


1,397,724


8.9
%

(87.0)
%
Long-term debt
583,722


776,202


1,341,164


1,285,767


325,566


(24.8)
%

79.3
%
Total borrowed funds
765,109


942,796


1,588,822


1,440,114


1,723,290


(18.8)
%

(55.6)
%
Accrued interest and other liabilities
502,951


516,265


521,580


508,342


519,336


(2.6)
%

(3.2)
%
Total Liabilities
13,916,129


13,691,064


13,677,832


13,649,871


12,878,184


1.6
%

8.1
%














SHAREHOLDERS' EQUITY













Common stock
1,633,137


1,638,947


1,637,489


1,635,070


1,633,950


(0.4)
%

0.0
%
Retained earnings
745,220


720,429


694,484


675,532


660,653


3.4
%

12.8
%
Accumulated other comprehensive income (loss)
18,101


48,664


42,266


36,431


11,788


(62.8)
%

53.6
%
Treasury stock, at cost
(137,516)


(125,970)


(126,424)


(126,014)


(127,008)


9.2
%

8.3
%
Total Shareholders' Equity
2,258,942


2,282,070


2,247,815


2,221,019


2,179,383


(1.0)
%

3.7
%
Total Liabilities and Shareholders' Equity
$
16,175,071


$
15,973,134


$
15,925,647


$
15,870,890


$
15,057,567


1.3
%

7.4
%

FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)



Quarterly Averages

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2021

2020

2020

2020

2020
ASSETS









Cash and due from banks
$
232,275


$
228,427


$
233,216


$
284,726


$
235,696

Interest-bearing deposits with other banks
46,912


143,884


40,277


91,990


39,332

Investment securities
3,782,993


3,403,839


3,162,832


3,164,243


3,115,723

Loans held for sale
29,689


42,402


45,186


36,592


13,174

Loans and leases









Commercial and industrial
3,029,716


3,182,749


3,299,259


3,058,677


2,450,893

Lease financing
70,508


74,107


78,500


81,218


85,782

Construction real estate
647,655


608,401


536,870


495,407


501,471

Commercial real estate
4,339,349


4,313,408


4,364,708


4,381,647


4,209,345

Residential real estate
980,718


1,022,701


1,041,250


1,052,996


1,055,456

Home equity
726,134


752,425


759,994


772,424


773,082

Installment
81,377


83,509


82,016


79,016


81,234

Credit card
46,709


48,179


45,609


44,402


50,206

Total loans
9,922,166


10,085,479


10,208,206


9,965,787


9,207,469

Less:









Allowance for credit losses
177,863


172,201


165,270


155,454


121,126

Net loans
9,744,303


9,913,278


10,042,936


9,810,333


9,086,343

Premises and equipment
206,628


208,800


211,454


213,903


215,545

Goodwill
937,771


937,771


937,771


937,771


937,771

Other intangibles
63,529


66,195


69,169


72,086


75,014

Accrued interest and other assets
998,554


1,086,390


1,099,169


1,098,560


805,824

Total Assets
$
16,042,654


$
16,030,986


$
15,842,010


$
15,710,204


$
14,524,422











LIABILITIES









Deposits









Interest-bearing demand
$
2,948,682


$
2,812,748


$
2,668,635


$
2,602,917


$
2,418,193

Savings
3,815,314


3,547,179


3,342,514


3,173,274


2,976,518

Time
1,767,826


1,844,379


2,015,933


2,619,038


2,196,080

Total interest-bearing deposits
8,531,822


8,204,306


8,027,082


8,395,229


7,590,791

Noninterest-bearing
3,840,046


3,720,417


3,535,432


3,335,866


2,643,240

Total deposits
12,371,868


11,924,723


11,562,514


11,731,095


10,234,031

Federal funds purchased and securities sold









under agreements to repurchase
184,483


136,795


150,088


145,291


164,093

FHLB short-term borrowings
67,222


7,937


30,868


548,183


1,189,765

Total short-term borrowings
251,705


144,732


180,956


693,474


1,353,858

Long-term debt
634,674


1,162,729


1,338,792


579,345


381,909

Total borrowed funds
886,379


1,307,461


1,519,748


1,272,819


1,735,767

Accrued interest and other liabilities
511,658


542,740


529,326


520,425


344,891

Total Liabilities
13,769,905


13,774,924


13,611,588


13,524,339


12,314,689











SHAREHOLDERS' EQUITY









Common stock
1,636,884


1,638,032


1,636,107


1,634,405


1,638,851

Retained earnings
726,351


703,257


679,980


658,312


660,108

Accumulated other comprehensive loss
42,253


40,960


40,697


19,888


31,200

Treasury stock, at cost
(132,739)


(126,187)


(126,362)


(126,740)


(120,426)

Total Shareholders' Equity
2,272,749


2,256,062


2,230,422


2,185,865


2,209,733

Total Liabilities and Shareholders' Equity
$
16,042,654


$
16,030,986


$
15,842,010


$
15,710,204


$
14,524,422

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)

















Quarterly Averages














March 31, 2021

December 31, 2020

March 31, 2020

Linked Qtr. Income Variance

Comparable Qtr. Income Variance


Balance

Yield

Balance

Yield

Balance

Yield

Rate

Volume

Total

Rate

Volume

Total
Earning assets
























Investments:
























Investment securities

$
3,782,993


2.54
%

$
3,403,839


2.71
%

$
3,115,723


3.04
%

$
(1,488)


$
1,897


$
409


$
(3,892)


$
3,955


$
63

Interest-bearing deposits with other banks

46,912


0.24
%

143,884


0.15
%

39,332


1.45
%

33


(60)


(27)


(118)


4


(114)

Gross loans ⁽¹⁾

9,951,855


4.03
%

10,127,881


4.18
%

9,220,643


5.04
%

(3,815)


(3,987)


(7,802)


(23,094)


6,250


(16,844)

Total earning assets

13,781,760


3.61
%

13,675,604


3.77
%

12,375,698


4.52
%

(5,270)


(2,150)


(7,420)


(27,104)


10,209


(16,895)


























Nonearning assets
























Allowance for credit losses

(177,863)




(172,201)




(121,126)















Cash and due from banks

232,275




228,427




235,696















Accrued interest and other assets

2,206,482




2,299,156




2,034,154















Total assets

$
16,042,654




$
16,030,986




$
14,524,422








































Interest-bearing liabilities
























Deposits:
























Interest-bearing demand

$
2,948,682


0.07
%

$
2,812,748


0.08
%

$
2,418,193


0.45
%












Savings

3,815,314


0.13
%

3,547,179


0.15
%

2,976,518


0.45
%












Time

1,767,826


0.60
%

1,844,379


0.86
%

2,196,080


1.88
%












Total interest-bearing deposits

8,531,822


0.21
%

8,204,306


0.29
%

7,590,791


0.86
%

$
(1,661)


$
74


$
(1,587)


$
(12,467)


$
435


$
(12,032)

Borrowed funds
























Short-term borrowings

251,705


0.11
%

144,732


0.08
%

1,353,858


1.51
%

9


28


37


(4,723)


(297)


(5,020)

Long-term debt

634,674


2.77
%

1,162,729


1.91
%

381,909


3.96
%

2,509


(3,782)


(1,273)


(1,134)


1,697


563

Total borrowed funds

886,379


2.01
%

1,307,461


1.71
%

1,735,767


2.05
%

2,518


(3,754)


(1,236)


(5,857)


1,400


(4,457)

Total interest-bearing liabilities

9,418,201


0.38
%

9,511,767


0.48
%

9,326,558


1.08
%

857


(3,680)


(2,823)


(18,324)


1,835


(16,489)


























Noninterest-bearing liabilities
























Noninterest-bearing demand deposits

3,840,046




3,720,417




2,643,240















Other liabilities

511,658




542,740




344,891















Shareholders' equity

2,272,749




2,256,062




2,209,733















Total liabilities & shareholders' equity

$
16,042,654




$
16,030,986




$
14,524,422








































Net interest income

$
113,876




$
118,473




$
114,282




$
(6,127)


$
1,530


$
(4,597)


$
(8,780)


$
8,374


$
(406)

Net interest spread



3.23
%



3.29
%



3.44
%












Net interest margin



3.35
%



3.45
%



3.71
%





































Tax equivalent adjustment



0.05
%



0.04
%



0.06
%












Net interest margin (fully tax equivalent)



3.40
%



3.49
%



3.77
%






























































⁽¹⁾ Loans held for sale and nonaccrual loans are included in gross loans.

FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)











Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2021

2020

2020

2020

2020
ALLOWANCE FOR CREDIT LOSS ACTIVITY






Balance at beginning of period
$
175,679


$
168,544


$
158,661


$
143,885


$
57,650

Day one adoption impact of ASC 326
0


0


0


0


61,505

Provision for credit losses
3,450


13,758


15,299


17,859


23,880

Gross charge-offs









Commercial and industrial
7,910


1,505


1,467


1,282


1,091

Lease financing
0


0


852


0


0

Construction real estate
2


0


0


0


0

Commercial real estate
1,250


6,270


3,789


2,037


4

Residential real estate
1


203


22


148


115

Home equity
611


386


460


428


267

Installment
36


21


59


7


61

Credit card
222


169


171


234


311

Total gross charge-offs
10,032


8,554


6,820


4,136


1,849

Recoveries









Commercial and industrial
337


367


265


275


2,000

Lease financing
0


(6)


6


0


0

Construction real estate
0


3


0


14


0

Commercial real estate
195


844


760


424


234

Residential real estate
44


145


91


93


52

Home equity
177


428


209


156


339

Installment
34


65


35


27


31

Credit card
39


85


38


64


43

Total recoveries
826


1,931


1,404


1,053


2,699

Total net charge-offs
9,206


6,623


5,416


3,083


(850)

Ending allowance for credit losses
$
169,923


$
175,679


$
168,544


$
158,661


$
143,885











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






Commercial and industrial
1.01
%

0.14
%

0.14
%

0.13
%

(0.15)
%
Lease financing
0.00
%

0.03
%

4.29
%

0.00
%

0.00
%
Construction real estate
0.00
%

0.00
%

0.00
%

(0.01)
%

0.00
%
Commercial real estate
0.10
%

0.50
%

0.28
%

0.15
%

(0.02)
%
Residential real estate
(0.02)
%

0.02
%

(0.03)
%

0.02
%

0.02
%
Home equity
0.24
%

(0.02)
%

0.13
%

0.14
%

(0.04)
%
Installment
0.01
%

(0.21)
%

0.12
%

(0.10)
%

0.15
%
Credit card
1.59
%

0.69
%

1.16
%

1.54
%

2.15
%
Total net charge-offs
0.38
%

0.26
%

0.21
%

0.12
%

(0.04)
%










COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans ⁽¹⁾









Commercial and industrial
$
24,941


$
29,230


$
34,686


$
33,906


$
21,126

Lease financing
0


0


1,092


1,353


222

Construction real estate
0


0


0


0


0

Commercial real estate
44,514


34,682


24,521


14,002


10,050

Residential real estate
11,359


11,601


12,104


12,813


11,163

Home equity
4,286


5,076


5,374


5,604


5,821

Installment
146


163


153


201


145

Nonaccrual loans
85,246


80,752


77,930


67,879


48,527

Accruing troubled debt restructurings (TDRs)
11,608


7,099


7,759


8,377


22,206

Total nonperforming loans
96,854


87,851


85,689


76,256


70,733

Other real estate owned (OREO)
854


1,287


1,643


1,872


1,467

Total nonperforming assets
97,708


89,138


87,332


78,128


72,200

Accruing loans past due 90 days or more
92


169


79


124


120

Total underperforming assets
$
97,800


$
89,307


$
87,411


$
78,252


$
72,320

Total classified assets
$
196,782


$
142,021


$
134,002


$
125,543


$
124,510











CREDIT QUALITY RATIOS






Allowance for credit losses to









Nonaccrual loans
199.33
%

217.55
%

216.28
%

233.74
%

296.51
%
Nonperforming loans
175.44
%

199.97
%

196.69
%

208.06
%

203.42
%
Total ending loans
1.71
%

1.77
%

1.65
%

1.56
%

1.55
%
Nonperforming loans to total loans
0.97
%

0.89
%

0.84
%

0.75
%

0.76
%
Nonperforming assets to









Ending loans, plus OREO
0.98
%

0.90
%

0.86
%

0.77
%

0.78
%
Total assets
0.60
%

0.56
%

0.55
%

0.49
%

0.48
%
Nonperforming assets, excluding accruing TDRs to









Ending loans, plus OREO
0.87
%

0.83
%

0.78
%

0.68
%

0.54
%
Total assets
0.53
%

0.51
%

0.50
%

0.44
%

0.33
%
Classified assets to total assets
1.22
%

0.89
%

0.84
%

0.79
%

0.83
%

⁽¹⁾ Nonaccrual loans include nonaccrual TDRs of $20.9 million, $14.7 million, $29.3 million, $32.7 million, and $18.4 million, as of March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)











Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2021

2020

2020

2020

2020
PER COMMON SHARE









Market Price









High
$
26.40


$
17.77


$
15.15


$
16.38


$
25.52

Low
$
17.62


$
12.07


$
11.40


$
11.52


$
12.67

Close
$
24.00


$
17.53


$
12.01


$
13.89


$
14.91











Average shares outstanding - basic
96,873,940


97,253,787


97,247,080


97,220,748


97,736,690

Average shares outstanding - diluted
97,727,527


98,020,534


98,008,733


97,988,600


98,356,214

Ending shares outstanding
97,517,693


98,021,929


97,999,763


98,018,858


97,968,958











Total shareholders' equity
$
2,258,942


$
2,282,070


$
2,247,815


$
2,221,019


$
2,179,383











REGULATORY CAPITAL
Preliminary









Common equity tier 1 capital
$
1,334,882


$
1,325,922


$
1,293,716


$
1,267,609


$
1,243,152

Common equity tier 1 capital ratio
11.81
%

11.82
%

11.63
%

11.49
%

11.27
%
Tier 1 capital
$
1,377,892


$
1,368,818


$
1,336,497


$
1,310,276


$
1,285,705

Tier 1 ratio
12.19
%

12.20
%

12.02
%

11.87
%

11.66
%
Total capital
$
1,741,755


$
1,744,802


$
1,708,817


$
1,676,532


$
1,493,100

Total capital ratio
15.41
%

15.55
%

15.37
%

15.19
%

13.54
%
Total capital in excess of minimum requirement
$
554,834


$
566,795


$
541,263


$
517,902


$
335,229

Total risk-weighted assets
$
11,304,012


$
11,219,114


$
11,119,560


$
11,034,570


$
11,027,347

Leverage ratio
9.34
%

9.55
%

9.55
%

8.98
%

9.49
%










OTHER CAPITAL RATIOS









Ending shareholders' equity to ending assets
13.97
%

14.29
%

14.11
%

13.99
%

14.47
%
Ending tangible shareholders' equity to ending tangible assets
8.22
%

8.47
%

8.25
%

8.09
%

8.25
%
Average shareholders' equity to average assets
14.17
%

14.07
%

14.08
%

13.91
%

15.21
%
Average tangible shareholders' equity to average tangible assets
8.38
%

8.26
%

8.18
%

7.94
%

8.79
%










REPURCHASE PROGRAM ⁽¹⁾









Shares repurchased
840,115


0


0


0


880,000

Average share repurchase price
$
21.40


N/A


N/A


N/A


$
18.96

Total cost of shares repurchased
$
17,982


N/A


N/A


N/A


$
16,686











⁽¹⁾ Represents share repurchases as part of publicly announced plans.













N/A = Not applicable

SOURCE First Financial Bancorp.

Company Name:	First Financial Bancorp.
Stock Symbol:	FFBC
Market:	NASDAQ
Website:	bankatfirst.com

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