First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Presentation (December 2009)
53 slides from First Financial Bancorp's investor presentation, Dec 8, 2009
Slide 1: First Financial Bancorp Investor Presentation
First Financial Bancorp Investor Presentation December 8, 2009 Exhibit 99.1
Slide 2: Forward-Looking Statement Disclosure
2 Forward-Looking Statement Disclosure This presentation should be read in conjunction with the consolidated financial statements, notes and tables in First Financial Bancorp’s most recent Annual Report on Form 10-K for the year ended December 31, 2008. Management’s analysis contains forward-looking
Slide 3: Investment Highlights
3 Issued 13.8 million shares of common stock resulting in net proceeds of $98 million Overall credit quality remained relatively strong throughout most of the economic downturn 2009 results impacted by higher credit costs reflecting the continued adverse impact of the prolonged downturn Stress prima
Slide 4: History
4 First Financial Bank was founded in 1863 16 bank/thrift acquisitions from 1989 through 1999 resulted in multiple bank charters and brand identities Established Strategic (Rebuilding & Reorganization) Plan in March 2005 History Consolidated and streamlined company to establish one charter and one b
Slide 5: Recent Acquisitions
Recent Acquisitions Purchased $145 mm in select performing commercial and consumer loans Purchased 19 banking centers, $521 mm in deposits and $336 mm in loans from Peoples in FDIC-assisted transaction 1 Purchased 3 banking centers in Indiana from Irwin, $85 mm in deposits and $41 mm in select perfo
Slide 6: Acquisition Highlights
Consistent with the company’s stated conservative strategy Acquisitions are compelling relative to cost and time to build profitable de novo banking centers Adds banking centers in key areas that will leverage the First Financial brand to increase market share Compliments existing locations and prov
Slide 7: Market Expansion
7 Market Expansion Acquisitions provided market expansion opportunities in key locations Added 39 banking centers in strategic operating markets Solidifies position in key markets and accelerates market expansion strategy by several years largest banking center network in Cincinnati MSA 1 nd 1 Based
Slide 8: Transaction Overview: Peoples
Further solidifies position in this very attractive market Accelerates growth-market expansion strategy by several years Acquisition is compelling relative to cost and time to build 19 profitable de novo banking centers Assets, at estimated fair value Including cash received from the FDIC, acquired
Slide 9: Loss Share Covered Assets
Loss Share Covered Assets Loss Share Covered Assets million in fair value Loss Share Agreement million, no first loss position and million million Uncovered Assets Cash (at book value), securities (at fair market value) and other tangible assets 9
Slide 10: Transaction Overview: Irwin
10 Transaction Overview Includes 17 banking centers in strategic operating markets Indiana (12), Kentucky (1) and Michigan (4) nd 1 Assets, at estimated fair value Including cash received from the FDIC, acquired $3.3 billion in assets, including $1.8 billion in loans Loans acquired under a modified
Slide 11: Schedule of Earning Assets Acquired
11 Transaction Overview Earning Assets Book Balance Fair Value Average Months to Maturity Effective Interest Rate Interest bearing deposits in other banks, the Federal Reserve and federal funds sold 133.2 $ 133.2 $ - 0.24% Investment securities 65.6 1 65.6 1 19.8 3.04% Loans Single family residentia
Slide 12: Loss Share Covered Assets: Irwin
Loss Share Covered Assets Loss Share Covered Assets billion in fair value Purchase excluded ORE, acquisition, development and construction loans (“ADC”), residential and commercial land loans Loss Share Agreement million, no first loss position and million million million) is significantly less than
Slide 13: Transactions Overview
13 Transactions Overview Purchased $145.1 million in select performing commercial and consumer loans, as well as strategic client relationships in a separate and unrelated transaction Purchased 3 banking centers in Indiana in another separate and unrelated transaction 84.6 million in deposits $41.1
Slide 14: Business Units
14 Business Units Retail Banking Commercial Banking Wealth Management
Slide 15: Corporate Goals
15 Corporate Goals Top-quartile performance for all stakeholders Sustained and consistent excellence Commitment to growth Effective management of all risks
Slide 16: Business Strategy
16 Business Strategy Client “Intimate” Strategy Strategic Focus: build long-term relationships with clients by identifying and meeting their financial needs Target clients Individuals and small / mid-size private businesses located within the regional markets we serve Ohio, Indiana, Kentucky, Michig
Slide 17: Credit Quality Trends
17 September 30, 2009 Credit quality trends remained relatively stable and within expected range throughout most of the economic downturn Reflects discipline of originating loans within existing footprint, strong underwriting policies, and proactive management of resolution strategies for problem cr
Slide 18: Texas Ratio vs Peers
18 Peer Group I is comprised of approximately 99 bank holding companies located throughout the United States with total asset size ranging from $3 - $10 billion Peer Group II is comprised of approximately 30 bank holding companies conducting business primarily in Ohio, Kentucky and Indiana; 3Q-09 in
Slide 19: Net Charge-offs to Average Loans & Leases
19 Net Charge-offs to Average Loans & Leases 1 0.20% 2Q-09: includes higher charge-offs related to one commercial real estate construction relationship (20 basis points) and two separate and unrelated floor plan relationships (55 basis points); 3Q-09: includes a charge-off related to the sale of the
Slide 20: Allowance for Loans & Leases to Nonperforming Loans
20 Allowance for Loans & Leases to Nonperforming Loans Credit Quality (excludes covered assets) Peer Group I is comprised of approximately 99 bank holding companies located throughout the United States with total asset size ranging from $3 - $10 billion Peer Group II is comprised of approximately 30
Slide 21: Nonperforming Loans to Total Loans
21 Nonperforming Loans to Total Loans Credit Quality (excludes covered assets) Peer Group I is comprised of approximately 99 bank holding companies located throughout the United States with total asset size ranging from $3 - $10 billion Peer Group II is comprised of approximately 30 bank holding com
Slide 22: Nonperforming Assets to Total Assets
22 Nonperforming Assets to Total Assets Credit Quality (excludes covered assets) Peer Group I is comprised of approximately 99 bank holding companies located throughout the United States with total asset size ranging from $3 - $10 billion Peer Group II is comprised of approximately 30 bank holding c
Slide 23: Capital
23 Capital Excess consolidated capital of $380.5 million over regulatory minimum required level Based on “well-capitalized” requirements, can support bank-level asset growth up to $2.4 billion Announced dividend reduction to common shareholders in January 2009 Further improved already strong capital
Slide 24: Capital Raise
Capital Raise 24 Common Share Offering Completed a public offering of 13.8 million shares at $7.50 per share Net proceeds of approximately $98 million after deducting underwriting discounts, commissions and estimated offering expenses Positively impacted already strong capital levels Additional capi
Slide 25: Participation in the U.S. Treasury Capital Purchase Program
Participation in the U.S. Treasury Capital Purchase Program 25 1 Board of directors continues to evaluate capital plan and structure Including the merits of continued participation in the program after having successfully raised $98 million in common equity and the additional capital generated from
Slide 26: Capital Scenario – CPP Redemption & Runoff Comparisons
26 Capital Scenario – CPP Redemption & Runoff Comparisons
Slide 27: Growth Plan
27 Growth Plan Primary focus and value creation is through organic growth in key regional markets 2008 expansion included a commercial lending team in Indianapolis (IN), a new business office and banking center in Kettering (OH) and a new banking center in Crown Point (IN) Year-to-date 2009 plans in
Slide 28: Well-Positioned Franchise
Well-Positioned Franchise Strong operating fundamentals have produced positive results throughout the recessionary period Strong market share in strategic operating markets Low risk balance sheet Capital and liquidity significantly exceed amounts necessary to be classified as well-capitalized Solid
Slide 29: Financial Information
fiRST first financial bancorp Financial Information
Slide 30: Third Quarter 2009 Results
30 Third Quarter 2009 Results Reported net income available to common shareholders of $225.2 million or $4.38 per diluted common share Results were impacted by the following significant items Irwin transaction: the estimated fair value of assets acquired exceeded the estimated fair value of liabilit
Slide 31: Outlook
31 Expanding margin Declining earning assets near-term due to strategic runoff Service charge pricing similar to legacy First Financial Efficiency ratio between 55 and 60 percent after integration Outlook
Slide 32: Earnings Per Diluted Common Share
32 Earnings Per Diluted Common Share Reflects the impact of certain non-recurring items. 1 $0.22 $0.21 $0.22 $0.29 $0.20 $0.21 $0.15 $0.06 $0.14 $0.01 $0.20 $0.21 $0.21 $0.24 $0.17 $0.23 $0.21 $0.19 $0.14 $0.08 1Q-07 2Q-07 3Q-07 4Q-07 1Q-08 2Q-08 3Q-08 4Q-08 1Q-09 2Q-09 GAAP Earnings Per Share Earni
Slide 33: Net Interest Margin
33 Net Interest Margin 1 Represents the Fed Funds Target Rate at the end of the quarter 4.12% 3.97% 3.88% 3.79% 3.78% 3.72% 3.68% 3.67% 3.61% 3.60% 3.59% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 1Q-07 2Q-07 3Q-07 4Q-07 1Q-08 2Q-08 3Q-08 4Q-08 1Q-09 2Q-09 3Q-09 Earning Asset Yield Liability Co
Slide 34: Earning Assets & Yield, Loan Portfolio Composition
Investments Consumer Loans Residential Mortgages Commercial Loans & Leases YTD-2009 FY-2008 FY-2007 FY-2006 12% 14% 14% 20% 17% 15% 13% 24% 20% 16% 45% 53% 57% 58% 12% 10% 34 YTD-2009 = January 1, 2009 – September 30, 2009 Yield presented is not tax-equivalent Excludes covered loans acquired under l
Slide 35: Average Total Loans
35 1 Loan balances include $41.1 million in loans purchased on 08/28/09, but exclude covered loans acquired in 3Q-09 under loss share agreements Linked-quarter percentage growth is annualized Average total loans increased $179.1 million or 6.6% from third quarter 2008, and $148.5 million or 21.7% fr
Slide 36: Loan Portfolio Strategy
36 Gross loan CAGR = 2.0% due to planned runoff in indirect loans and residential mortgages 60% (50%) (95%) December 31, 2005 through September 30, 2009; excludes covered loans 1 Loan Portfolio Strategy (450,000) (350,000) (250,000) (150,000) (50,000) 50,000 150,000 250,000 350,000 450,000 550,000 6
Slide 37: Loan Composition
4% 11% 12% 43% 30% (at estimated fair value) 3% 9% 16% 44% 28% Loan Composition 37 June 30, 2009 - $2.9 billion September 30, 2009 - $4.9 billion Covered Loans - $2.1 billion Uncovered Loans - $2.9 billion 4% 11% 12% 45% 28% 28% 43% 22% 6% 1%
Slide 38: Investment Portfolio Summary
38 Investment Portfolio Summary September 30, 2009 On-going review of various strategies to increase the size of the investment portfolio and its absolute level of earnings, while balancing capital and liquidity targets Represents approximately 8.7% of total assets Portfolio selection criteria avoid
Slide 39: Third Quarter 2009 Progression of Investment Portfolio
39 September 30, 2009 Increases in the investment portfolio during the third quarter was the result of acquired investment securities from the Peoples and Irwin transactions All acquired securities are conforming investments as outlined in First Financial’s investment policy The investment securitie
Slide 40: Investment Portfolio Sector Allocation and Credit Quality
40 September 30, 2009 * Other includes regulatory stock 10% CMOs (Agency) 0% CMOs (Private) 9% Agencies 15% Other * 4% Municipal 0.0% Preferred Agency 62% MBSs (Agency) Sector Allocation Credit Quality Investment Grade = A-rated securities Other Investment Grade = B-rated securities Not Rated 4% Inv
Slide 41: Liability Mix & Deposit Composition
41 YTD-2009 = January 1, 2009 – September 30, 2009 1.6% Borrowed Funds Time Deposits Interest-Bearing Deposits Noninterest-Bearing Deposits* YTD-2009 FY-2008 FY-2007 FY-2006 9% 10% 6% 7% 37% 40% 41% 38% 40% 40% 40% 39% 14% 13% 13% 13% 3.0% 3.4% 2.5% * Not included in yield calculation Average Liabil
Slide 42: Deposit Strategy
42 Deposit Strategy 3Q-09 2Q-09 1Q-09 4Q-08 3Q-08 2Q-08 1Q-08 $1,484 $1,132 $1,142 $1,152 $1,158 $1,193 $1,219 ($ in millions) Average Time Deposits 3Q-09 2Q-09 1Q-09 4Q-08 3Q-08 2Q-08 1Q-08 $3,609 $2,833 $2,822 $2,780 $2,783 $2,795 $2,832 ($ in millions) Average Total Deposits Average Transaction &
Slide 43: Deposit Composition
$5.8 billion in deposits WAR = 1.26% $2.8 billion in deposits WAR = 1.29% September 30, 2009 June 30, 2009 43 46% 14% 23% 17% Deposit Composition 15% 21% 24% 40%
Slide 44: Borrowed Funds
44 Borrowed Funds First Financial assumed additional Federal Home Loan Bank debt with the Peoples and Irwin acquisitions Approximately $83.7 million in short-term advances from Irwin matured prior to the end of the third quarter of 2009 At September 30, 2009, First Financial had available overnight
Slide 45: Noninterest Income
45 Noninterest Income YTD-2009 = January 1, 2009 – September 30, 2009 Excludes $383.3 million 3Q-09 gain on acquisition Year-to-Date 2009 1 ($ in millions) ($ in millions) Service Charges on Deposits 09 3Q- 09 2Q- 09 1Q- 08 4Q- 08 3Q- 08 2Q- 08 1Q- 07 4Q- 07 3Q- 07 2Q- 07 1Q- $6.0 $5.0 $4.0 $3.0 $2.
Slide 46: Efficiency
46 Efficiency Efficiency Ratio 01/01/09 – 06/30/09 Long-Term Target = 55% to 60% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% FY-2004 FY-2005 FY-2006 FY-2007 FY-2008 YTD-2009
Slide 47: Staffing Level
47 Staffing Level Full-Time Equivalent Personnel Does not include associates from acquisitions who are currently in a temporary hire status 1 0 200 400 600 800 1,000 1,200 1,400 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09
Slide 48: Leadership
fiRST first financial I bancorp Leadership
Slide 49: Claude E. Davis, President & Chief Executive Officer
49 Claude E. Davis President & Chief Executive Officer Claude E. Davis joined First Financial in 2004 as President, Chief Executive Officer, and a member of the Board of Directors. Mr. Davis also serves as Chairman of the Board of Directors of First Financial Bank. Prior to joining the company, he s
Slide 50: Al Roszczyk, Indiana Regional President
50 Al Roszczyk Indiana Regional President Al Roszczyk joined First Financial in June 2009. Mr. Roszczyk oversees the company’s Indiana markets. He has 26 years of banking experience with a strong background in executive management and leadership as well as extensive experience in commercial lending,
Slide 51: John Sabath, Senior Vice President & Chief Risk Officer
51 John Sabath Senior Vice President & Chief Risk Officer John Sabath joined First Financial in 2005 as Regulatory Risk Manager. Mr. Sabbath was then promoted to Senior Risk Officer and First Vice President, and assumed his current position in 2008. He is responsible for management of the company’s
Slide 52: About First Financial Bancorp
Financial data at September 30, 2009 Banking Centers at December 8, 2009 About First Financial Bancorp First Financial Bancorp is a Cincinnati, Ohio based bank holding company with $7.3 billion in assets. Its banking subsidiary, First Financial Bank, N.A., founded in 1863, provides retail and commer
Slide 53: Another step on the path to success
Another step on the path to success
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