First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q4 2021 Earnings Presentation
43 slides from First Financial Bancorp's earnings presentation, Feb 15, 2022
Slide 1: Investor Presentation Fourth Quarter 2021
investor presentation • Fourth Quarter 2021 Exhibit 99.1
Slide 2: Forward looking statements disclosure
forward looking statements disclosure 2 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,” “ex
Slide 3: Forward looking statements disclosure
forward looking statements disclosure 3 • 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
Slide 4: Presentation contents
About First Financial Bancorp Financial Performance Appendix 4 presentation contents
Slide 5: Our footprint
our footprint 5 Commercial C&I, O-CRE, ABL, Equipment Finance, Treasury, Bannockburn Global Forex Retail Banking Consumer, Small Business Mortgage Banking NASDAQ: FFBC Headquarters: Cincinnati, Ohio Founded: 1863 Banking Centers: 139 Employees: 1,994 Market Cap (12/31/21): $2.3B Dividend Yield (12/3
Slide 6: Key investment highlights
key investment highlights Proven & sustainable business model spanning 150+ years • Well managed through past credit cycles • Conservative operating philosophy • Consistent profitability – 125 consecutive quarters Premier Midwest franchise with top quartile performance High quality balance sheet & r
Slide 7: Complementary market centric strategies
complementary market centric strategies Loans $2.8B / Deposits $3.3B Loans $1.5B / Deposits $5.2B Loans $3.9B / Deposits $4.1B 7 Note: Headquarters loan and deposit balances include special assets, loan marks, and other out of market and corporately held balances. Loan balances exclude PPP balances.
Slide 8: Diversified lines of business
The number of Trust & Investments and RPS relationships are updated as of 9/30/21. All other data as of 12/31/21. 8 diversified lines of business
Slide 9: Revenue growth strategies
9 revenue growth strategies Distribution Technology Talent Product & Pricing • Regional pricing strategy • Treasury Management product investments • Investments in Product Management DefinedModels • Community • Metro • Headquarters • National • Digital Enterprise Data Management • Investment in data
Slide 10: Digital + technology investments
10 digital + technology investments enabling simple, consistent & seamless customer experience across channels & making it easy for associates to provide best-in-class customer service. “
Slide 11: Digital + technology investments timeline
11 Enterprise workflow platform – bank operations 1Q 2019 Digital mortgage origination 3Q 2019 Office of Intelligent Automation 1Q 2020 Commercial online banking upgrade 3Q 2021 2Q 2019 Formed Enterprise Digital Solutions, hired Chief Digital Officer 4Q 2019 Digital commercial loan origination 1Q 20
Slide 12: Bank transformation
12 bank transformation All dollars shown in millions Tech Spend consists of data processing, communications, software / equipment depreciation & departmental expenses (primarily salaries & benefits) for the Technology, Digital & Info Security teams. Tech Spend / Total Expense $59.0 $55.5 $48.6 $40.8
Slide 13: Digital + technology highlights
• engagement • digital engagement1 across core customers increased 9.3% vs. 4Q 2020 • consumer online banking logins increased 22.6% vs. 4Q 2020 • self service • consumer remote deposits increased 15.6% vs. 4Q 2020 • consumer online/mobile transactions increased 17.2% vs. 4Q 2020 • customer satisfac
Slide 14: Presentation contents
About First Financial Bancorp Financial Performance Appendix 14 presentation contents
Slide 15: 4Q 2021 results
4Q 2021 results 125th Consecutive Quarter of Profitability 15 • EOP assets increased $372.5 million compared to the linked quarter to $16.3 billion • EOP loans decreased $72.6 million compared to the linked quarter to $9.3 billion • Average deposits increased $217.9 million compared to the linked qu
Slide 16: 4Q 2021 highlights
4Q 2021 highlights • Quarterly earnings driven by strong fee income and lower credit costs • Adjusted1 earnings per share - $0.58 • Adjusted1 return on assets - 1.34% • Adjusted1 pre-tax, pre-provision return on assets - 1.54% • Adjusted1 return on average tangible common equity - 17.43% • Loan bala
Slide 17: 4Q 2021 highlights
4Q 2021 highlights • Acquired Summit Funding Group on December 31, 20212 • $116.2 million in leases acquired; $42.3 million financing leases, $73.9 million operating • $63.0 million of goodwill and $34.6 million of other intangible assets created • $143.6 million of CRE loans sold during quarter • $
Slide 18: Adjusted net income
adjusted net income1 18 The table below lists certain adjustments that the Company believes are significant to understanding its quarterly performance. As Reported Adjusted 1 As Reported Adjusted 1 Net interest income 110,806$ 110,806$ 113,410$ 113,410$ Provision for credit losses-loans and leases (
Slide 19: Profitability
profitability 19 Return on Average Assets Return on Avg Tangible Common Equity Diluted EPS 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition. See Appendix for Non-GAAP reconciliation. Efficiency Ratio $0.50 $0.63 $0.52$0.48
Slide 20: Net interest income & margin
net interest income & margin 20 Net Interest Margin (FTE) 4Q21 NIM (FTE) Progression Net Interest Income All dollars shown in millions $6.5$3.9$3.4$3.2$5.5 $2.3$3.0$3.5$3.4$3.9 $5.6$9.3$9.2$10.0 $110.8 $113.4$114.0$113.9 $118.5 4Q213Q212Q211Q214Q20 Loan Fees Loan Accretion PPP Interest/Fees 2.82%2.8
Slide 21: Asset sensitive balance sheet positioning
Variable ≤12m 56% Variable ≤12m - Out of the Money Floors 9% Hybrid >12m 9% Fixed 26% 21 1NII – Year 1 impact, represents percentage change for immediate parallel changes in rates. Data as of 12/31/21. 2Reflects percentage of loans classified as variable rate and repricing in ≤12m, variable rate and
Slide 22: Liquid balance sheet presents opportunity
liquid balance sheet presents opportunity 22 1Historical data adjusted for the combination with MainSource Financial Group, Inc. using the sum of the individual components. 2”Prior Fed Cycle” begins 3Q15 and ends 2Q19. The “Current Fed Cycle” begins 3Q19 to present. Historical Deposit and Loan Betas
Slide 23: Diverse and growing fee revenues
diverse and growing fee revenues 23 Noninterest Income 4Q21 Highlights All dollars shown in thousands • Total fee income 29.2% of net revenue • Foreign exchange income of $12.8 million; increased $3.6 million, or 39.4%, from linked quarter • Trust and wealth management fees of $6.0 million; increase
Slide 24: Well managed expenses
well managed expenses 24 Noninterest Expense 4Q21 Highlights All dollars shown in thousands • Core expenses increased $0.5 million from the linked quarter, driven by incentive compensation tied to overall Company performance • Adjustments include: • $6.1 million tax credit investment write-down • $3
Slide 25: Average balance sheet
average balance sheet 25 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $9,283$9,503$9,832$9,952$10,128 3.96% 4.03%3.98%4.03% 4.18% 4Q213Q212Q211Q214Q20 Gross Loans Loan Yield (Gross) 1 $12,885$12,667$12,711$12,372$11,925 0.10
Slide 26: Attractive deposit portfolio
attractive deposit portfolio 26 Deposit Product Mix (Avg) 4Q21 Average Deposit Progression All dollars shown in millions Total growth/(decline): $217.9 million Interest-bearing demand $1,808 14% Noninterest- bearing $3,946 31% Savings $1,295 10% Money Markets $2,371 18% Retail CDs $974 8% Brokered C
Slide 27: Loan portfolio
loan portfolio 27 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) 1 Net of unearned fees of $2.6 million All dollars shown in millions Total growth/(decline): ($72.6 million) ICRE $3,861 42% Commercial & Small Business Banking $2,660 29% Consumer $852 9% Mortgage $969 10% Oak Street $528 6%
Slide 28: Loan concentrations
Finance & Insurance 23% Manufacturing 16% Real Estate 14% Accommodation & Food Services 8% Health Care 6% Professional & Tech 6% Construction 6% Wholesale Trade 4% Retail Trade 3% Transportation & Warehousing 3% Other 11% C&I Loans: $2.9B Residential, Multi Family 5+ 19% Office 18% Retail 14% Hotel/
Slide 29: Current expected credit losses - loans and leases
current expected credit losses - loans and leases 29 ACL / Total Loans 4Q21 Highlights All dollars shown in thousands • $145.4 million combined ACL; $7.7 million combined provision recapture • $132.0 million ACL – loans and leases, or 1.42% of loan balances; 1.43% excluding PPP • $9.5 million of pro
Slide 30: Asset quality
asset quality 30 Nonperforming Assets / Total AssetsClassified Assets / Total Assets Net Charge Offs & Provision Expense1 . 1 Provision includes both loans & leases and unfunded commitments All dollars shown in millions $104.8 $165.5 $182.5 $196.8 $142.0 0.64% 1.04% 1.14% 1.22% 0.89% 4Q213Q212Q211Q2
Slide 31: Hotel loan portfolio
hotel loan portfolio 31 • Sold 13 hotel loans totaling $133.9 million of balances • All loans were rated Watch, Special Mention, or Classified (including two nonaccrual credits under bankruptcy plans) • $9.2 million of net charge-offs recorded as a result of the sale • Reduces portfolio’s hotel conc
Slide 32: Summit acquisition
Summit acquisition 32 • $116.2 million in leases acquired; $42.3 million financing leases, $73.9 million operating • $63.0 million of goodwill and $34.6 million of other intangible assets created • Summit is a full-service equipment finance company operating throughout the U.S. and Canada • Long his
Slide 33: Investment portfolio and liquidity
33 Investment Portfolio Composition Investment Portfolio Quality Total: $4.4B Duration: 3.8 Yrs Liquidity Sources • In addition to deposits, First Financial has approximately $7.8 billion of readily available funding sources to meet customer needs through the following sources: • Fed funds • FHLB fu
Slide 34: Capital
capital 34 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 12/31 Risk Weighted Assets = $11,645,769 All capital numbers are considered preliminary. Tier 1 Capital Ratio 10.84% 11.54%11.78%11.81%11.82% 7.00% 4Q213Q212Q211Q214Q20 Tier 1 Common Equity Ratio Basel III minimum
Slide 35: Capital strategy
capital strategy 35 Strategy & Deployment Tangible Book Value Per Share • 3.8% annualized dividend yield • 45.9% of 4Q21 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Commo
Slide 36: Outlook commentary
outlook commentary1 • Loan balances expected to grow mid single digits in near term, excluding PPP and Summit • Securities balances expected to come down slightly over the near-term • Deposit balances expected to be consistent over near-term with no significant outflows 36 • Expected to be $91-93 mi
Slide 37: Presentation contents
About First Financial Bancorp Financial Performance Appendix 37 presentation contents
Slide 38: Appendix: our markets
appendix: our markets 38 • Greater Cincinnati/Dayton • Loans $4.3 billion • Deposits $5.3 billion • Deposit Market Share T-4 (3.0%) • Banking Centers 52 • Fortune 500 Companies 8 • Indianapolis • Loans $0.9 billion • Deposits $0.8 billion • Deposit Market Share #14 (1.3%) • Banking Centers 10 • Fort
Slide 39: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 40: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 40 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, 2021 2021 2021 2021 2020 Net interest income 110,806$ 113,410$ 114,026$ 113,876$ 118,473$ Tax equivalent adjustm
Slide 41: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 41 All dollars shown in thousands Additional non-GAAP ratios Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, (Dollars in thousands, except per share data) 2021 2021 2021 2021 2020 Net income (a) 46,945$ 60,012$ 50,888$ 47,315$ 48,312$ Average total shareholders
Slide 42: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 42 Additional non-GAAP measures 2Q21 1Q21 4Q20 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 110,806$ 110,806$ 113,410$ 113,410$ 114,026$ 114,026$ 113,876$ 113,876$ 118,473$ 1
Slide 43: First Financial Bancorp
43 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
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