Slide 1: Investor Presentation First Quarter 2012
Another step on the path to success 1 Investor Presentation First Quarter 2012 EXHIBIT 99.1
Slide 2: Forward-looking statements
Another step on the path to success 2 Certain statements contained in this presentation which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the ‘‘Act’’). In addition, certain statements in future filing
Slide 3: Focused Business Strategy
Another step on the path to success 3 Focused Business Strategy Client intimate strategy focused on long-term, profitable relationships with clients Strong sales culture that is aggressive in attracting business with the appropriate risk and return Lines of business – Commercial – Retail – Wea
Slide 4: Strategy and Execution – Recent History
Another step on the path to success 4 Strategy and Execution – Recent History Franchise Repositioning 2005 – 2008 FDIC Acquisitions 2009 Integration / Operational Execution 2010 Capital Mgmt. / Redeployment 2011 – 2012 While the industry was pursuing growth via high-priced acquisitions and real esta
Slide 5: Franchise Summary Comparison
Another step on the path to success Franchise Summary Comparison Consistent and solid profitability – LTM ROAA of 1.05% compared to peer median of 0.90% – LTM ROAE of 9.30% compared to peer median of 7.82% – LTM net interest margin of 4.50% compared to peer median of 3.78% Capital levels extreme
Slide 6: First Quarter 2012 Financial Highlights
Another step on the path to success 6 First Quarter 2012 Financial Highlights Quarterly net income of $17.0 million, or $0.29 per diluted common share Adjusted pre-tax, pre-provision income remained strong, totaling $31.2 million, or 1.94% of average assets Continued strong profitability – Ret
Slide 7: Pre-Tax, Pre-Provision Income Trend
Another step on the path to success 7 Pre-Tax, Pre-Provision Income Trend Adjusted pre-tax, pre-provision income represents income before taxes plus provision for all loans less FDIC loss share income and accelerated discount adjusted for significant nonrecurring items First quarter 2012 adjuste
Slide 8: Components of Net Interest Margin
Another step on the path to success 8 Components of Net Interest Margin Net interest margin increased 19 bps during the first quarter 2012 to 4.51% Cash proceeds from 2011 branch acquisitions were fully deployed, driving a 32.4% increase in the average balance in investments Yield on investmen
Slide 9: Capitalization
Another step on the path to success 9 Capitalization Primary component of capital is common equity Capital ratios varied slightly from prior quarter due to decrease in total tangible assets but increase in risk-weighted assets Capitalization levels still remain among industry leaders and provi
Slide 10: Variable Dividend / 100% Payout Ratio
Another step on the path to success 10 Variable Dividend / 100% Payout Ratio 100% dividend payout ratio comprised of two components: – Regular dividend based on stated payout of between 40% - 60% of quarterly earnings; increased 25% to $0.15 per share – Variable dividend based on the remainder of
Slide 11: Low Risk Balance Sheet
Another step on the path to success 11 Low Risk Balance Sheet Total Assets by Risk Weighting % As of March 31, 2012 (Dollars in millions) Return on Average Risk Weighted Assets = 1.86% (Peer Median(1) = 1.22%) Risk Weighted Assets / Total Assets = 57.8% (Peer Median(1) = 67.34%) (1) Peer Group c
Slide 12: Credit Quality Review Excluding Covered Assets
Another step on the path to success 12 Credit Quality Review Excluding Covered Assets Classified assets totaled $154.7 million as of March 31, 2012, declining 4.7% compared to the linked quarter and 16.7% compared to March 31, 2011 Increase in NPLs during the quarter were impacted by an increase
Slide 13: Selective Acquisitions
Another step on the path to success 13 Selective Acquisitions Supplements organic growth strategy through expansion in strategic markets Transactions met all internal criteria for acquisitions Loss sharing arrangements provide significant protection on acquired loans Developed scalable cover
Slide 14: Franchise Highlights
Another step on the path to success 14 Franchise Highlights 1. Strong operating fundamentals – 86 consecutive quarters of profitability 2. Strong capital levels 3. Dividend yield in excess of 7.0% 4. Low risk balance sheet 5. Credit metrics have remained strong throughout the economic downturn 6. So
Slide 15: Appendix
Another step on the path to success 15 Appendix
Slide 16: Pre-Tax, Pre-Provision Income
Another step on the path to success 16 Pre-Tax, Pre-Provision Income For the three months ended March 31, December 31, September 30, June 30, March 31, Dollars in thousands 2012 2011 2011 2011 2011 Pre-tax, pre-provision income 1 30,020$ 33,015$ 31,814$ 32,845$ 29,768$ Less: accelerated discount on
Slide 17: Revenue by Source
Another step on the path to success 17 Revenue by Source Strategic – Elements of the business that either existed prior to the acquisitions or were acquired with the intent to retain and grow. On a reported basis, approximately 76% of total revenue is derived from strategic businesses. Not includi
Slide 18: Noninterest Income and Expense
Another step on the path to success 18 Noninterest Income and Expense Components of Noninterest Expense For the Three Months Ended March 31, 2012 (Dollars in millions) Components of Noninterest Income For the Three Months Ended March 31, 2012 (Dollars in millions) $15.3 48% $12.8 40% $0.2 1% $3.6 11
Slide 19: Deposit and Loan Composition
Another step on the path to success 19 Deposit and Loan Composition Total Deposits = $5.4 billion As of March 31, 2012 (Dollars in millions) Gross Loans = $4.0 billion As of March 31, 2012 (Dollars in millions) Market exits are complete; acquired-non-strategic deposits consist primarily of time de
Slide 20: Loan Composition
Another step on the path to success 20 Loan Composition Covered Loans - $1.0 billion Uncovered Loans - $3.0 billion Total Loan Portfolio – March 31, 2012 $4.0 billion In-house lending limit of $15 million – significantly below legal limit 25.0% of total loans covered under FDIC loss share agreem
Slide 21: Uncovered Loans – RE Collateral
Another step on the path to success 21 Uncovered Loans – RE Collateral Total Uncovered Loan Portfolio 1 – March 31, 2012 $3.0 Billion 1 Excludes loans covered by FDIC loss sharing agreements Construction and acquisition and land development loans represent small portion of overall portfolio Comm
Slide 22: Deposit Composition
Another step on the path to success 22 Deposit Composition Non-time deposit balances declined $78.4 million during the first quarter 2012, driven by a $149.9 million decrease in balances, primarily repriced public fund savings accounts, associated with the Flagstar acquisition. Offsetting the de
Slide 23: Funding Structure and Cost of Funds
Another step on the path to success 23 1.04% 0.93% 0.79% * Not included in cost of funds calculation Average Balances – Total Interest Bearing Liability Composition Average Balances – Deposit Composition 0.29% 1.99% Co s t of F u n d s Total Cost of Funds Funding Structure and Cost of Funds 0.00% 0.
Slide 24: Investment Portfolio
Another step on the path to success 24 Investment Portfolio Investment portfolio represents 26.9% of total assets Average balance of investments increased $407.1 million during the first quarter 2012 as cash proceeds from 2011 branch acquisitions have been fully deployed Yield earned on portfo
Slide 25: Covered Loan Balances
Another step on the path to success 25 Covered Loan Balances During the first quarter 2012, the total balance of covered loans decreased $66.6 million, 6.3%, as compared to December 31, 2011 Covered Loan Activity - First Quarter 2012 Reduction in Recorded Investment Due to: December 31, Contractua
Slide 26: Covered Loan Activity
Another step on the path to success 26 Covered Loan Activity The majority of the loans acquired as part of the FDIC-assisted transactions are accounted for under ASC Topic 310-30 which requires the Company to periodically update its forecast of expected cash flows from these loans. As of March 3
Slide 27: Covered Loan Performance
Another step on the path to success 27 Covered Loan Performance While covered loans continue to decline, better than expected performance has resulted in a consistently high yield on the portfolio Improvement and impairment result from quarterly re-estimation of cash flows expectations; net pres
Slide 28: Components of Credit Losses Covered Assets
Another step on the path to success Components of Credit Losses Covered Assets 28 $4,873 $2,638 $1,998 $3,178 2Q11 3Q11 4Q11 1Q12 Actual Covered Asset Credit Losses For the three months ended March 31, Dollars in thousands 2012 Description Net incremental impairment for period $3,321 Reduction in ex
Slide 29: Reinvestment of Covered Loan Proceeds: Bear vs. Bull Case
Another step on the path to success 29 Reinvestment of Covered Loan Proceeds “Bear Case” vs. “Bull Case” Scenarios The “Bear Case” assumes cash proceeds from repayment of covered loans are used to purchase investment securities. The “Bull Case” assumes proceeds are used to fund loan growth. What h
Slide 30: Comparison of Financial Impact Extreme Cases
Another step on the path to success 30 Comparison of Financial Impact 1 Extreme Cases If all acquired loans were to prepay immediately, diluted EPS would benefit by $0.84 per share as of the first quarter 2012 The absolute worst case scenario – a 100% loss on all acquired loans – would negativel
Slide 31: Accounting for Covered Loans
Another step on the path to success 31 Accounting for Covered Loans Impact on Profitability Metrics of Accounting Treatment Covered Loan Portfolio Accounting Treatment: ASC Topic 310 - 30 Accounting Unit Consideration: Accounting Pools Prospective Yield Adjustment on Pool Recognize Accelerated Disco
Slide 32: Liberty Savings Bank Branch Acquisition
Another step on the path to success 32 Liberty Savings Bank Branch Acquisition Branch Map and Deposit Market Share Significantly enhances presence in key market of Dayton Deposit composition and cost of funds similar to existing First Financial deposit base Strong growth potential in all busin
Slide 33: Flagstar Bank Branch Acquisition
Another step on the path to success 33 Flagstar Bank Branch Acquisition Branch Map and Deposit Market Share Indiana Pro Forma Deposit Market Share Indianapolis, IN MSA FDIC Deposit Data as of June 30, 2011 - Holding Company Level Number Total Market 2011 of Deposits Share Rank Name City, State Branc
Slide 34: Another step on the path to success 34 Another step on the path to success
Another step on the path to success 34 Another step on the path to success