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First Financial Bancorp.
First Financial Bancorp Announces First Quarter 2023 Financial Results
Business
Apr 20 2023
4 min read

First Financial Bancorp Announces First Quarter 2023 Financial Results

  • Earnings per diluted share of $0.74; $0.76 on an adjusted(1) basis, 65% increase YoY
  • Return on average assets of 1.69%; 1.72% on an adjusted(1) basis
  • Record quarterly revenue of $214.9 million
  • Net interest margin on FTE basis(1) of 4.55%; 8 bp increase from linked quarter
  • Loan growth of $134.4 million; 5.3% on an annualized basis
  • Record adjusted(1) fee income driven by foreign exchange, leasing, and wealth management
  • Stable credit quality with de minimis net charge-offs
  • Regulatory capital ratios increased and remain in excess of targets

CINCINNATI, April 20, 2023 /PRNewswire/ -- First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three months ended March 31, 2023.

For the three months ended March 31, 2023, the Company reported net income of $70.4 million, or $0.74 per diluted common share. These results compare to net income of $69.1 million, or $0.73 per diluted common share, for the fourth quarter of 2022. 

Return on average assets for the first quarter of 2023 was 1.69% while return on average tangible common equity was 29.02%(1). These compare to return on average assets of 1.63% and return on average tangible common equity of 29.93%(1) in the fourth quarter of 2022. 

First quarter 2023 highlights include:

  • Net interest margin of 4.51%, or 4.55% on a fully tax-equivalent basis(1)
    • 8 bp increase to 4.55% from 4.47% in the fourth quarter due to higher asset yields
    • Higher loan balances and 62 bp increase in loan yields offset 49 bp increase in cost of deposits
    • Average deposit balances increased $179.8 million with growth in brokered and retail CDs offsettingdeclines in public funds and business balances
  • Noninterest income of $55.5 million, or $55.4 million as adjusted(1)
    • Record leasing business income of $13.7 million; 22.8% increase from fourth quarter
    • Foreign exchange income of $16.9 million reflected continued strong demand
    • Record trust and wealth management fees of $6.3 million; 12.1% increase from fourth quarter
    • Adjusted(1) for $0.1 million gain on investment securities 
  • Noninterest expenses of $116.7 million, or $114.6 million as adjusted(1)
    • Adjustments(1) include $0.5 million of contract termination costs as well as $1.6 million of other costsnot expected to recur such as acquisition, severance and branch consolidation costs
    • $7.7 million decline from fourth quarter driven by lower professional services, tax credit investmentwrite-downs, charitable contributions, and incentive costs
    • Efficiency ratio of 54.3%; 53.3% as adjusted(1)

(1) Non-GAAP measure. For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

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

  • Moderate loan growth during the quarter
    • Loan balances increased $134.4 million compared to the fourth quarter
    • Growth of 5.3% on an annualized basis
    • Residential mortgage, C&I, and equipment leases drove quarterly growth
  • Total Allowance for Credit Losses of $161.8 million; Total quarterly provision expense of $10.5 million
    • Loans and leases - ACL of $141.6 million; increased 7 bps to 1.36% of total loans
    • Unfunded Commitments - ACL of $20.2 million
    • Provision expense driven by loan growth, slower prepayment speeds and economic forecasts
    • De minimis net charge-offs during the quarter
  • Capital ratios remain solid
    • Total capital ratio of 13.66%
    • Tier 1 common equity increased 17 bps to 11.00%
    • Tangible common equity increased 52 bps to 6.47%(1); 8.54%(1) excluding impact from AOCI
    • Tangible book value per share of $10.76(1)

Mr. Brown, President and CEO, commented on the quarter, "The first quarter was a really strong quarter for First Financial and I am very pleased with our operating performance. The Company achieved record revenue of $215 million. Net income and total revenue increased 70% and 46%, respectively, from the same quarter last year, with both increasing slightly compared to the linked quarter. Our quarterly results were driven by strong net interest income, moderate loan growth, an 8 bp increase in our net interest margin, record leasing business income, another great quarter from Bannockburn and strong performance from our Yellow Cardinal Wealth Division."

Mr. Brown continued, "We continue to manage the significant increase in short term rates effectively, and during the first quarter, the increase in our asset yields exceeded the increase in total funding costs by 4 bps. Average deposit balances increased slightly from the linked quarter as increases in brokered and retail CDs offset outflows in public funds and business deposits, which were primarily seasonal. The majority of these outflows occurred in the first two months of the quarter. The deposit beta from the first quarter of 2022 through the first quarter of 2023 was 21%. From a liquidity standpoint, our loan to deposit ratio was 82%, and we also maintain flexibility through our investment portfolio, 98% of which was classified as available-for-sale as of March 31."

Mr. Brown discussed asset quality, "Credit quality remained stable in the first quarter. Net charge-offs were de minimis and nonperforming assets declined slightly as a percentage of total assets from the linked quarter. Additionally, the ACL increased $8.6 million during the quarter, driven by loan growth, slower prepayments and changes in economic forecasts. As a result, the ACL was 1.36% as a percentage of total loan balances, which was a 7 basis point increase from the coverage ratio at year-end."

Mr. Brown concluded, "We are very pleased with the strengthening of our capital ratios this quarter. Our strong profitability and recent decline in market rates led to a 52-basis point increase in our tangible common equity ratio. In addition, tangible book value per share increased 8% to $10.76. The quarter had its challenges for the industry and there is nearterm uncertainty regarding the economy. We are extremely pleased with our results and how we have managed the challenges to date. We believe we remain well positioned to manage future uncertainty due to our profitability, net interest margin, ample liquidity, and strong levels of capital."

Full detail of the Company's first quarter 2023 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast InformationFirst Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, April 21, 2023 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (833) 470-1428 (U.S. toll free) or (404) 975-4839 (U.S. local), access code 842558. The number should be dialed five to ten minutes prior to the start of the conference call. A replay of the conference call will be available beginning one hour after the completion of the live call at (866) 813-9403 (U.S. toll free), (929) 458-6194 (U.S. local) and +44 204 525-0658 (all other locations), access code 342184. The recording will be available until May 25, 2023. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com. The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

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

Use of Non-GAAP Financial MeasuresThis 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 NonGAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Forward-Looking Statements

Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ''believes,'' ''anticipates,'' "likely," "expected," "estimated," ''intends'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forwardlooking 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 forwardlooking 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 ourallowance for credit losses
  • the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall StreetReform 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 willnot be realized within the expected time period;
  • the effect of changes in accounting policies and practices;
  • changes in consumer spending, borrowing and saving and changes in unemployment;
  • changes in customers' performance and creditworthiness;
  • the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
  • current and future economic and market conditions, including the effects of changes in housing prices,fluctuations in unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and anyslowdown in global economic growth;
  • the adverse impact on the U.S. economy, including the markets in which we operate, of the novelcoronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impacton the performance of our loan and lease portfolio, the market value of our investment securities, theavailability of sources of funding and the demand for our products;
  • our capital and liquidity requirements (including under regulatory capital standards, such as the Basel IIIcapital 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 anegative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation andregulation relating to bank products and services;
  • the effect of the current interest rate environment or changes in interest rates or in the level or compositionof 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-partyvendors 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 netinterest 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, 2022, 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, 2023, the Company had $16.9 billion in assets, $10.4 billion in loans, $12.7 billion in deposits and $2.1 billion in shareholders' equity. The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.3 billion in assets under management as of March 31, 2023. The Company operated 130 full service banking centers as of March 31, 2023, located 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,

2023

2022

2022

2022

2022

RESULTS OF OPERATIONS

Net income

$      70,403

$      69,086

$      55,705

$      51,520

$      41,301

Net earnings per share - basic

$         0.75

$         0.74

$         0.60

$         0.55

$         0.44

Net earnings per share - diluted

$         0.74

$         0.73

$         0.59

$         0.55

$         0.44

Dividends declared per share

$         0.23

$         0.23

$         0.23

$         0.23

$         0.23

KEY FINANCIAL RATIOS

Return on average assets

1.69 %

1.63 %

1.35 %

1.28 %

1.03 %

Return on average shareholders' equity

13.71 %

13.64 %

10.58 %

9.84 %

7.53 %

Return on average tangible shareholders' equity (1)

29.02 %

29.93 %

22.29 %

20.68 %

14.93 %

Net interest margin

4.51 %

4.43 %

3.93 %

3.41 %

3.11 %

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

4.55 %

4.47 %

3.98 %

3.45 %

3.16 %

Ending shareholders' equity as a percent of ending assets

12.53 %

12.01 %

12.00 %

12.74 %

13.35 %

Ending tangible shareholders' equity as a percent of:

Ending tangible assets (1)

6.47 %

5.95 %

5.79 %

6.40 %

6.95 %

Risk-weighted assets (1)

7.87 %

7.32 %

7.21 %

8.09 %

8.85 %

Average shareholders' equity as a percent of average assets

12.29 %

11.98 %

12.75 %

12.97 %

13.75 %

Average tangible shareholders' equity as a percent of

    average tangible assets (1)

6.21 %

5.84 %

6.49 %

6.62 %

7.44 %

Book value per share

$        22.29

$        21.51

$        21.03

$        21.90

$        22.63

Tangible book value per share (1)

$        10.76

$         9.97

$         9.48

$        10.27

$        10.97

Common equity tier 1 ratio (3)

11.00 %

10.83 %

10.82 %

10.91 %

10.87 %

Tier 1 ratio (3)

11.34 %

11.17 %

11.17 %

11.28 %

11.24 %

Total capital ratio (3)

13.66 %

13.64 %

13.73 %

13.94 %

13.97 %

Leverage ratio (3)

9.03 %

8.89 %

8.88 %

8.76 %

8.64 %

AVERAGE BALANCE SHEET ITEMS

Loans (4)

$  10,373,302

$  10,059,119

$  9,597,197

$  9,367,820

$  9,266,774

Investment securities

3,635,317

3,705,304

4,003,472

4,118,287

4,308,059

Interest-bearing deposits with other banks

318,026

372,054

317,146

294,136

273,763

  Total earning assets

$  14,326,645

$  14,136,477

$  13,917,815

$  13,780,243

$  13,848,596

Total assets

$  16,942,999

$  16,767,598

$  16,385,989

$  16,185,978

$  16,184,919

Noninterest-bearing deposits

$  3,954,915

$  4,225,192

$  4,176,242

$  4,224,842

$  4,160,175

Interest-bearing deposits

8,857,226

8,407,114

8,194,781

8,312,876

8,623,800

  Total deposits

$  12,812,141

$  12,632,306

$  12,371,023

$  12,537,718

$  12,783,975

Borrowings

$  1,434,338

$  1,489,088

$  1,406,718

$  1,079,596

$    721,695

Shareholders' equity

$  2,082,210

$  2,009,564

$  2,089,179

$  2,099,670

$  2,225,495

CREDIT QUALITY RATIOS

Allowance to ending loans

1.36 %

1.29 %

1.27 %

1.25 %

1.34 %

Allowance to nonaccrual loans

409.46 %

464.58 %

341.61 %

302.87 %

273.09 %

Allowance to nonperforming loans

409.46 %

335.94 %

262.09 %

235.08 %

231.98 %

Nonperforming loans to total loans

0.33 %

0.38 %

0.48 %

0.53 %

0.58 %

Nonaccrual loans to total loans

0.33 %

0.28 %

0.37 %

0.41 %

0.49 %

Nonperforming assets to ending loans, plus OREO

0.33 %

0.39 %

0.48 %

0.53 %

0.58 %

Nonperforming assets to total assets

0.21 %

0.23 %

0.28 %

0.31 %

0.33 %

Classified assets to total assets

0.94 %

0.75 %

0.69 %

0.74 %

0.67 %

Net charge-offs to average loans (annualized)

0.00 %

(0.01) %

0.07 %

0.08 %

0.10 %

(1) Non-GAAP measure.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

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

(3) March 31, 2023 regulatory capital ratios are preliminary.

(4) Includes loans held for sale.

 

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

2023

2022

First

Fourth

Third

Second

First

Full

Quarter

Quarter

Quarter

Quarter

Quarter

Year

Interest income

  Loans and leases, including fees

$ 169,706

$ 152,299

$  122,170

$   97,091

$   87,182

$  458,742

  Investment securities

     Taxable

31,867

30,248

26,331

23,639

22,096

102,314

     Tax-exempt

3,464

4,105

5,014

4,916

4,431

18,466

        Total investment securities interest

35,331

34,353

31,345

28,555

26,527

120,780

  Other earning assets

3,544

3,262

1,597

505

120

5,484

       Total interest income

208,581

189,914

155,112

126,151

113,829

585,006

Interest expense

  Deposits

31,456

16,168

6,386

2,963

2,623

28,140

  Short-term borrowings

12,950

11,091

6,158

1,566

317

19,132

  Long-term borrowings

4,857

4,759

4,676

4,612

4,544

18,591

      Total interest expense

49,263

32,018

17,220

9,141

7,484

65,863

      Net interest income

159,318

157,896

137,892

117,010

106,345

519,143

  Provision for credit losses-loans and leases

8,644

8,689

7,898

(4,267)

(5,589)

6,731

  Provision for credit losses-unfunded commitments

1,835

1,341

386

3,481

(226)

4,982

      Net interest income after provision for credit losses

148,839

147,866

129,608

117,796

112,160

507,430

Noninterest income

  Service charges on deposit accounts

6,514

6,406

6,279

7,648

7,729

28,062

  Trust and wealth management fees

6,334

5,648

5,487

6,311

6,060

23,506

  Bankcard income

3,592

3,736

3,484

3,823

3,337

14,380

  Client derivative fees

1,005

1,822

1,447

1,369

803

5,441

  Foreign exchange income

16,898

19,592

11,752

13,470

10,151

54,965

  Leasing business income

13,664

11,124

7,127

7,247

6,076

31,574

  Net gains from sales of loans

2,335

2,206

3,729

5,241

3,872

15,048

  Net gain (loss) on sale of investment securities

(519)

(393)

(179)

0

3

(569)

  Net  gain (loss) on equity securities

640

1,315

(701)

(1,054)

(199)

(639)

  Other

5,080

4,579

4,109

5,723

3,462

17,873

      Total noninterest income

55,543

56,035

42,534

49,778

41,294

189,641

Noninterest expenses

  Salaries and employee benefits

72,254

73,621

66,808

64,992

63,947

269,368

  Net occupancy

5,685

5,434

5,669

5,359

5,746

22,208

  Furniture and equipment

3,317

3,234

3,222

3,201

3,567

13,224

  Data processing

9,020

8,567

8,497

8,334

8,264

33,662

  Marketing

2,160

2,198

2,523

2,323

1,700

8,744

  Communication

634

690

657

670

666

2,683

  Professional services

1,946

3,015

2,346

2,214

2,159

9,734

  State intangible tax

985

974

1,090

1,090

1,131

4,285

  FDIC assessments

2,826

2,173

1,885

1,677

1,459

7,194

  Intangible amortization

2,600

2,573

2,783

2,915

2,914

11,185

  Leasing business expense

7,938

6,061

5,746

4,687

3,869

20,363

  Other

7,328

15,902

23,842

5,572

7,383

52,699

      Total noninterest expenses

116,693

124,442

125,068

103,034

102,805

455,349

Income before income taxes

87,689

79,459

47,074

64,540

50,649

241,722

Income tax expense (benefit)

17,286

10,373

(8,631)

13,020

9,348

24,110

      Net income

$   70,403

$   69,086

$   55,705

$   51,520

$   41,301

$  217,612

ADDITIONAL DATA

Net earnings per share - basic

$      0.75

$      0.74

$      0.60

$      0.55

$      0.44

$       2.33

Net earnings per share - diluted

$      0.74

$      0.73

$      0.59

$      0.55

$      0.44

$       2.30

Dividends declared per share

$      0.23

$      0.23

$      0.23

$      0.23

$      0.23

$       0.92

Return on average assets

1.69 %

1.63 %

1.35 %

1.28 %

1.03 %

1.33 %

Return on average shareholders' equity

13.71 %

13.64 %

10.58 %

9.84 %

7.53 %

10.34 %

Interest income

$ 208,581

$ 189,914

$  155,112

$  126,151

$  113,829

$  585,006

Tax equivalent adjustment

1,424

1,553

1,712

1,625

1,467

6,357

   Interest income - tax equivalent

210,005

191,467

156,824

127,776

115,296

591,363

Interest expense

49,263

32,018

17,220

9,141

7,484

65,863

   Net interest income - tax equivalent

$ 160,742

$ 159,449

$  139,604

$  118,635

$  107,812

$  525,500

Net interest margin

4.51 %

4.43 %

3.93 %

3.41 %

3.11 %

3.73 %

Net interest margin (fully tax equivalent) (1)

4.55 %

4.47 %

3.98 %

3.45 %

3.16 %

3.77 %

Full-time equivalent employees

2,066

2,070

2,072

2,096

2,050

(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

2023

2022

2022

2022

2022

Linked Qtr.

Comp Qtr.

ASSETS

     Cash and due from banks

$      199,835

$      207,501

$      195,553

$      217,481

$      214,571

(3.7) %

(6.9) %

     Interest-bearing deposits with other banks

305,465

388,182

338,978

270,042

243,004

(21.3) %

25.7 %

     Investment securities available-for-sale

3,384,949

3,409,648

3,531,353

3,843,580

3,957,882

(0.7) %

(14.5) %

     Investment securities held-to-maturity

83,070

84,021

85,823

88,057

92,597

(1.1) %

(10.3) %

     Other investments

143,606

143,160

138,767

132,151

114,563

0.3 %

25.4 %

     Loans held for sale

9,280

7,918

10,684

22,044

12,670

17.2 %

(26.8) %

     Loans and leases

       Commercial and industrial

3,449,289

3,410,272

3,139,219

2,927,175

2,800,209

1.1 %

23.2 %

       Lease financing

273,898

236,124

176,072

146,639

125,867

16.0 %

117.6 %

       Construction real estate

525,906

512,050

489,446

449,734

479,744

2.7 %

9.6 %

       Commercial real estate

4,056,627

4,052,759

3,976,345

4,007,037

4,031,484

0.1 %

0.6 %

       Residential real estate

1,145,069

1,092,265

1,024,596

965,387

913,838

4.8 %

25.3 %

       Home equity

724,672

733,791

737,318

725,700

707,973

(1.2) %

2.4 %

       Installment

204,372

209,895

202,267

146,680

132,197

(2.6) %

54.6 %

       Credit card

53,552

51,815

52,173

52,065

50,305

3.4 %

6.5 %

          Total loans

10,433,385

10,298,971

9,797,436

9,420,417

9,241,617

1.3 %

12.9 %

       Less:

          Allowance for credit losses

(141,591)

(132,977)

(124,096)

(117,885)

(124,130)

6.5 %

14.1 %

                Net loans

10,291,794

10,165,994

9,673,340

9,302,532

9,117,487

1.2 %

12.9 %

     Premises and equipment

188,959

189,080

189,067

191,099

190,975

(0.1) %

(1.1) %

     Operating leases

153,986

91,738

84,851

82,659

61,927

67.9 %

148.7 %

     Goodwill

1,005,738

1,001,507

998,422

999,959

999,959

0.4 %

0.6 %

     Other intangibles

91,169

93,919

96,528

99,019

101,673

(2.9) %

(10.3) %

     Accrued interest and other assets

1,076,033

1,220,648

1,280,427

995,091

901,842

(11.8) %

19.3 %

       Total Assets

$  16,933,884

$ 17,003,316

$  16,623,793

$ 16,243,714

$  16,009,150

(0.4) %

5.8 %

LIABILITIES

     Deposits

       Interest-bearing demand

$   2,761,811

$   3,037,153

$   2,980,465

$   3,096,365

$   3,246,646

(9.1) %

(14.9) %

       Savings

3,746,403

3,828,139

3,980,020

4,029,717

4,188,867

(2.1) %

(10.6) %

       Time

2,336,368

1,700,705

1,242,412

1,026,918

1,121,966

37.4 %

108.2 %

          Total interest-bearing deposits

8,844,582

8,565,997

8,202,897

8,153,000

8,557,479

3.3 %

3.4 %

       Noninterest-bearing

3,830,102

4,135,180

4,137,038

4,124,111

4,261,429

(7.4) %

(10.1) %

          Total deposits

12,674,684

12,701,177

12,339,935

12,277,111

12,818,908

(0.2) %

(1.1) %

     Federal funds purchased and securities sold

         under agreements to repurchase

0

0

3,535

0

0

0.0 %

0.0 %

     FHLB short-term borrowings

1,089,400

1,130,000

972,600

896,000

185,000

(3.6) %

488.9 %

     Other

128,160

157,156

184,912

152,226

57,247

(18.5) %

123.9 %

          Total short-term borrowings

1,217,560

1,287,156

1,161,047

1,048,226

242,247

(5.4) %

402.6 %

     Long-term debt

342,647

346,672

355,116

358,578

379,840

(1.2) %

(9.8) %

          Total borrowed funds

1,560,207

1,633,828

1,516,163

1,406,804

622,087

(4.5) %

150.8 %

     Accrued interest and other liabilities

577,497

626,938

773,563

491,129

430,710

(7.9) %

34.1 %

       Total Liabilities

14,812,388

14,961,943

14,629,661

14,175,044

13,871,705

(1.0) %

6.8 %

SHAREHOLDERS' EQUITY

     Common stock

1,629,428

1,634,605

1,631,696

1,637,237

1,634,903

(0.3) %

(0.3) %

     Retained earnings

1,016,893

968,237

920,943

887,006

857,178

5.0 %

18.6 %

     Accumulated other comprehensive income (loss)

(328,059)

(358,663)

(354,570)

(243,328)

(142,477)

(8.5) %

130.3 %

     Treasury stock, at cost

(196,766)

(202,806)

(203,937)

(212,245)

(212,159)

(3.0) %

(7.3) %

       Total Shareholders' Equity

2,121,496

2,041,373

1,994,132

2,068,670

2,137,445

3.9 %

(0.7) %

       Total Liabilities and Shareholders' Equity

$  16,933,884

$ 17,003,316

$  16,623,793

$ 16,243,714

$  16,009,150

(0.4) %

5.8 %

 

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

Quarterly Averages

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2023

2022

2022

2022

2022

ASSETS

     Cash and due from banks

$      218,724

$      218,216

$      228,068

$      248,463

$      241,271

     Interest-bearing deposits with other banks

318,026

372,054

317,146

294,136

273,763

     Investment securities

3,635,317

3,705,304

4,003,472

4,118,287

4,308,059

     Loans held for sale

5,531

8,639

12,283

15,446

15,589

     Loans and leases

       Commercial and industrial

3,456,681

3,249,252

3,040,547

2,884,373

2,736,613

       Lease financing

252,219

203,790

158,667

134,334

115,703

       Construction real estate

536,294

501,787

469,489

460,609

474,278

       Commercial real estate

4,017,021

4,028,944

3,969,935

4,025,493

4,139,072

       Residential real estate

1,115,889

1,066,859

998,476

936,165

903,567

       Home equity

728,185

735,039

728,791

716,219

703,714

       Installment

205,934

208,484

164,063

140,145

125,579

       Credit card

55,548

56,325

54,946

55,036

52,659

          Total loans

10,367,771

10,050,480

9,584,914

9,352,374

9,251,185

       Less:

          Allowance for credit losses

(136,419)

(127,541)

(119,000)

(123,950)

(129,601)

                Net loans

10,231,352

9,922,939

9,465,914

9,228,424

9,121,584

     Premises and equipment

190,346

189,342

190,738

191,895

192,832

     Operating leases

107,092

88,365

83,970

73,862

61,297

     Goodwill

1,005,713

998,575

999,690

999,958

1,000,238

     Other intangibles

92,587

95,256

97,781

100,354

103,033

     Accrued interest and other assets

1,138,311

1,168,908

986,927

915,153

867,253

       Total Assets

$  16,942,999

$ 16,767,598

$  16,385,989

$  16,185,978

$  16,184,919

LIABILITIES

     Deposits

       Interest-bearing demand

$   2,906,712

$   3,103,091

$   3,105,547

$   3,180,846

$   3,246,919

       Savings

3,818,807

3,943,342

4,036,565

4,076,380

4,145,615

       Time

2,131,707

1,360,681

1,052,669

1,055,650

1,231,266

          Total interest-bearing deposits

8,857,226

8,407,114

8,194,781

8,312,876

8,623,800

       Noninterest-bearing

3,954,915

4,225,192

4,176,242

4,224,842

4,160,175

          Total deposits

12,812,141

12,632,306

12,371,023

12,537,718

12,783,975

     Federal funds purchased and securities sold

          under agreements to repurchase

26,380

16,167

32,637

24,229

45,358

     FHLB short-term borrowings

925,144

944,320

892,786

586,846

257,800

     Other

139,195

184,439

131,237

109,353

33,297

          Total short-term borrowings

1,090,719

1,144,926

1,056,660

720,428

336,455

     Long-term debt

343,619

344,162

350,058

359,168

385,240

       Total borrowed funds

1,434,338

1,489,088

1,406,718

1,079,596

721,695

     Accrued interest and other liabilities

614,310

636,640

519,069

468,994

453,754

       Total Liabilities

14,860,789

14,758,034

14,296,810

14,086,308

13,959,424

SHAREHOLDERS' EQUITY

     Common stock

1,633,396

1,632,941

1,631,078

1,635,990

1,638,321

     Retained earnings

989,777

941,987

899,524

866,910

841,652

     Accumulated other comprehensive loss

(339,450)

(361,284)

(236,566)

(190,949)

(38,448)

     Treasury stock, at cost

(201,513)

(204,080)

(204,857)

(212,281)

(216,030)

       Total Shareholders' Equity

2,082,210

2,009,564

2,089,179

2,099,670

2,225,495

       Total Liabilities and Shareholders' Equity

$  16,942,999

$ 16,767,598

$  16,385,989

$  16,185,978

$  16,184,919

 

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)

 Quarterly Averages

March 31, 2023

December 31, 2022

March 31, 2022

Balance

Interest

Yield

Balance

Interest

Yield

Balance

Interest

Yield

Earning assets

    Investments:

      Investment securities

$      3,635,317

$       35,331

3.94 %

$  3,705,304

$      34,353

3.68 %

$  4,308,059

$      26,527

2.50 %

      Interest-bearing deposits with other banks

318,026

3,544

4.52 %

372,054

3,262

3.48 %

273,763

120

0.18 %

    Gross loans (1)

10,373,302

169,706

6.63 %

10,059,119

152,299

6.01 %

9,266,774

87,182

3.82 %

       Total earning assets

14,326,645

208,581

5.90 %

14,136,477

189,914

5.33 %

13,848,596

113,829

3.33 %

Nonearning assets

    Allowance for credit losses

(136,419)

(127,541)

(129,601)

    Cash and due from banks

218,724

218,216

241,271

    Accrued interest and other assets

2,534,049

2,540,446

2,224,653

       Total assets

$    16,942,999

$ 16,767,598

$ 16,184,919

Interest-bearing liabilities

    Deposits:

      Interest-bearing demand

$      2,906,712

$        6,604

0.92 %

$  3,103,091

$        5,195

0.66 %

$  3,246,919

$           492

0.06 %

      Savings

3,818,807

7,628

0.81 %

3,943,342

4,819

0.48 %

4,145,615

850

0.08 %

      Time

2,131,707

17,224

3.28 %

1,360,681

6,154

1.79 %

1,231,266

1,281

0.42 %

    Total interest-bearing deposits

8,857,226

31,456

1.44 %

8,407,114

16,168

0.76 %

8,623,800

2,623

0.12 %

    Borrowed funds

      Short-term borrowings

1,090,719

12,950

4.82 %

1,144,926

11,091

3.84 %

336,455

317

0.38 %

      Long-term debt

343,619

4,857

5.73 %

344,162

4,759

5.49 %

385,240

4,544

4.78 %

        Total borrowed funds

1,434,338

17,807

5.03 %

1,489,088

15,850

4.22 %

721,695

4,861

2.73 %

       Total interest-bearing liabilities

10,291,564

49,263

1.94 %

9,896,202

32,018

1.28 %

9,345,495

7,484

0.32 %

Noninterest-bearing liabilities

    Noninterest-bearing demand deposits

3,954,915

4,225,192

4,160,175

    Other liabilities

614,310

636,640

453,754

    Shareholders' equity

2,082,210

2,009,564

2,225,495

       Total liabilities & shareholders' equity

$    16,942,999

$ 16,767,598

$ 16,184,919

Net interest income

$        159,318

$     157,896

$     106,345

Net interest spread

3.96 %

4.05 %

3.01 %

Net interest margin

4.51 %

4.43 %

3.11 %

Tax equivalent adjustment

0.04 %

0.04 %

0.05 %

Net interest margin (fully tax equivalent)

4.55 %

4.47 %

3.16 %

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

 

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS  (1)

(Dollars in thousands)

(Unaudited)

 Linked Qtr. Income Variance

 Comparable Qtr. Income Variance

Rate

Volume

Total

Rate

Volume

Total

Earning assets

    Investment securities

$     2,458

$    (1,480)

$        978

$    15,342

$    (6,538)

$      8,804

    Interest-bearing deposits with other banks

976

(694)

282

2,931

493

3,424

    Gross loans (2)

15,924

1,483

17,407

64,421

18,103

82,524

       Total earning assets

19,358

(691)

18,667

82,694

12,058

94,752

Interest-bearing liabilities

    Total interest-bearing deposits

$    14,353

$        935

$    15,288

$    28,004

$        829

$    28,833

    Borrowed funds

    Short-term borrowings

2,805

(946)

1,859

3,678

8,955

12,633

    Long-term debt

214

(116)

98

901

(588)

313

       Total borrowed funds

3,019

(1,062)

1,957

4,579

8,367

12,946

       Total interest-bearing liabilities

17,372

(127)

17,245

32,583

9,196

41,779

          Net interest income (1)

$     1,986

$       (564)

$     1,422

$    50,111

$     2,862

$    52,973

(1) Not tax equivalent.

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

 

FIRST FINANCIAL BANCORP.

CREDIT QUALITY

(Dollars in thousands)

(Unaudited)

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2023

2022

2022

2022

2022

ALLOWANCE FOR CREDIT LOSS ACTIVITY

Balance at beginning of period

$  132,977

$  124,096

$  117,885

$  124,130

$  131,992

  Provision for credit losses

8,644

8,689

7,898

(4,267)

(5,589)

  Gross charge-offs

    Commercial and industrial

730

334

1,947

773

2,845

    Lease financing

13

0

13

8

131

    Construction real estate

0

0

0

0

0

    Commercial real estate

66

245

3

3,419

0

    Residential real estate

0

79

119

4

22

    Home equity

91

72

45

22

21

    Installment

1,524

717

294

361

177

    Credit card

217

212

237

212

246

      Total gross charge-offs

2,641

1,659

2,658

4,799

3,442

  Recoveries

    Commercial and industrial

109

293

90

177

379

    Lease financing

1

0

13

3

33

    Construction real estate

0

0

0

0

0

    Commercial real estate

2,238

1,327

561

2,194

222

    Residential real estate

66

15

35

34

90

    Home equity

80

88

185

360

265

    Installment

54

68

29

47

21

    Credit card

63

60

58

6

159

      Total recoveries

2,611

1,851

971

2,821

1,169

  Total net charge-offs

30

(192)

1,687

1,978

2,273

Ending allowance for credit losses

$  141,591

$  132,977

$  124,096

$  117,885

$  124,130

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

  Commercial and industrial

0.07 %

0.01 %

0.24 %

0.08 %

0.37 %

  Lease financing

0.02 %

0.00 %

0.00 %

0.01 %

0.34 %

  Construction real estate

0.00 %

0.00 %

0.00 %

0.00 %

0.00 %

  Commercial real estate

(0.22) %

(0.11) %

(0.06) %

0.12 %

(0.02) %

  Residential real estate

(0.02) %

0.02 %

0.03 %

(0.01) %

(0.03) %

  Home equity

0.01 %

(0.01) %

(0.08) %

(0.19) %

(0.14) %

  Installment

2.89 %

1.24 %

0.64 %

0.90 %

0.50 %

  Credit card

1.12 %

1.07 %

1.29 %

1.50 %

0.67 %

     Total net charge-offs

0.00 %

(0.01) %

0.07 %

0.08 %

0.10 %

COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS

  Nonaccrual loans (1)

    Commercial and industrial

$    13,971

$     8,242

$     8,719

$    11,675

$    14,390

    Lease financing

175

178

199

217

249

    Construction real estate

0

0

0

0

0

    Commercial real estate

5,362

5,786

13,435

14,650

19,843

    Residential real estate

11,129

10,691

10,250

8,879

7,432

    Home equity

3,399

3,123

3,445

3,331

3,377

    Installment

544

603

279

170

163

      Nonaccrual loans

34,580

28,623

36,327

38,922

45,454

  Accruing troubled debt restructurings (TDRs) (2)

N/A

10,960

11,022

11,225

8,055

     Total nonperforming loans (2)

34,580

39,583

47,349

50,147

53,509

  Other real estate owned (OREO)

191

191

22

22

72

     Total nonperforming assets (2)

34,771

39,774

47,371

50,169

53,581

  Accruing loans past due 90 days or more

159

857

139

142

180

     Total underperforming assets (2)

$    34,930

$    40,631

$    47,510

$    50,311

$    53,761

Total classified assets (2)

$  158,984

$  128,137

$  114,956

$  119,769

$  106,839

CREDIT QUALITY RATIOS

Allowance for credit losses to

     Nonaccrual loans

409.46 %

464.58 %

341.61 %

302.87 %

273.09 %

     Nonperforming loans

409.46 %

335.94 %

262.09 %

235.08 %

231.98 %

     Total ending loans

1.36 %

1.29 %

1.27 %

1.25 %

1.34 %

Nonperforming loans to total loans

0.33 %

0.38 %

0.48 %

0.53 %

0.58 %

Nonaccrual loans to total loans

0.33 %

0.28 %

0.37 %

0.41 %

0.49 %

Nonperforming assets to

     Ending loans, plus OREO

0.33 %

0.39 %

0.48 %

0.53 %

0.58 %

     Total assets

0.21 %

0.23 %

0.28 %

0.31 %

0.33 %

Nonperforming assets, excluding accruing TDRs to

     Ending loans, plus OREO

0.33 %

0.28 %

0.37 %

0.41 %

0.49 %

     Total assets

0.21 %

0.17 %

0.22 %

0.24 %

0.28 %

Classified assets to total assets

0.94 %

0.75 %

0.69 %

0.74 %

0.67 %

(1) Nonaccrual loans include nonaccrual TDRs of $10.0 million, $12.8 million, $9.5 million, and $16.2 million, as of December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.

(2) Upon adoption of ASU 2022-02 as of January 1, 2023, the TDR model was eliminated.  Prospectively, disclosures will include modifcations of loans to borrowers experiencing financial difficulty (FDM).  FDMs are excluded from nonperforming, underperforming  and classified assets. 

 

FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands, except per share data)

(Unaudited)

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

Mar. 31,

2023

2022

2022

2022

2022

PER COMMON SHARE

Market Price

  High

$        26.24

$        26.68

$        23.75

$        23.03

$        26.73

  Low

$        21.30

$        21.56

$        19.02

$        19.09

$        22.92

  Close

$        21.77

$        24.23

$        21.08

$        19.40

$        23.05

Average shares outstanding - basic

93,732,532

93,590,674

93,582,250

93,555,131

93,383,932

Average shares outstanding - diluted

94,960,158

94,831,788

94,793,766

94,449,817

94,263,925

Ending shares outstanding

95,190,406

94,891,099

94,833,964

94,448,792

94,451,496

Total shareholders' equity

$  2,121,496

$  2,041,373

$  1,994,132

$  2,068,670

$  2,137,445

REGULATORY CAPITAL

Preliminary

Common equity tier 1 capital

$  1,432,332

$  1,399,420

$  1,348,413

$  1,307,259

$  1,272,115

Common equity tier 1 capital ratio

11.00 %

10.83 %

10.82 %

10.91 %

10.87 %

Tier 1 capital

$  1,476,734

$  1,443,698

$  1,392,565

$  1,351,287

$  1,316,020

Tier 1 ratio

11.34 %

11.17 %

11.17 %

11.28 %

11.24 %

Total capital

$  1,778,917

$  1,762,971

$  1,711,741

$  1,670,367

$  1,635,003

Total capital ratio

13.66 %

13.64 %

13.73 %

13.94 %

13.97 %

Total capital in excess of minimum requirement

$    411,234

$    406,032

$    402,662

$    412,167

$    405,931

Total risk-weighted assets

$  13,025,552

$  12,923,233

$  12,467,422

$  11,982,860

$  11,705,447

Leverage ratio

9.03 %

8.89 %

8.88 %

8.76 %

8.64 %

OTHER CAPITAL RATIOS

Ending shareholders' equity to ending assets

12.53 %

12.01 %

12.00 %

12.74 %

13.35 %

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

6.47 %

5.95 %

5.79 %

6.40 %

6.95 %

Average shareholders' equity to average assets

12.29 %

11.98 %

12.75 %

12.97 %

13.75 %

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

6.21 %

5.84 %

6.49 %

6.62 %

7.44 %

REPURCHASE PROGRAM (2)

Shares repurchased

0

0

0

0

0

Average share repurchase price

N/A

N/A

N/A

N/A

N/A

Total cost of shares repurchased

N/A

N/A

N/A

N/A

N/A

(1) Non-GAAP measure.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

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

N/A = Not applicable

 

Cision View original content:https://www.prnewswire.com/news-releases/first-financial-bancorp-announces-first-quarter-2023-financial-results-301803569.html

SOURCE First Financial Bancorp.