First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q2 2023 Earnings Presentation
42 slides from First Financial Bancorp's earnings presentation, Aug 15, 2023
Slide 1: Investor Presentation Second Quarter 2023
investor presentation • Second Quarter 2023 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: Overview
overview 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: 130 Employees: 2,193 Market Cap (6/30/23): $1.9B Dividend Yield (6/30/23):
Slide 6: Key investment highlights
key investment highlights Proven & sustainable business model spanning 160 years • Well managed through past credit cycles • Conservative operating philosophy • Consistent profitability – 131 consecutive quarters Premier Midwest franchise with top quartile performance High quality balance sheet & ro
Slide 7: Complementary market centric strategies
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. complementary market centric strategies Loans $3.0B / Deposits $2.8B Loans $1.7B / Deposits $4.9B Loans $4.0B / Deposits $5.0B 7
Slide 8: Key business lines
8 key business lines Full suite of diversified financial products for individuals and businesses $17.1 Billion Assets $12.8 Billion Deposits 26.46% Adjusted MRQ ROATCE Diversified financial holding company with comprehensive and innovative solutions for individuals and businesses Wealth & asset mana
Slide 9: Diversified lines of business
The number of Trust & Investments and RPS relationships are updated as of 9/30/22. All other data as of 12/31/22. diversified lines of business 9
Slide 10: Revenue growth strategies
10 revenue growth strategies Distribution Technology Talent Product & Pricing • Regional pricing strategy • Treasury Management product investments • Investments in Product Management Defined Models • Community • Metro • Headquarters • National Enterprise Data Management • Investment in data warehou
Slide 11: Presentation contents
About First Financial Bancorp Financial Performance Appendix 11 presentation contents
Slide 12: 2Q 2023 results
2Q 2023 results 131st Consecutive Quarter of Profitability 12 • EOP assets increased $156.3 million compared to the linked quarter to $17.1 billion • EOP loans increased $116.8 million compared to the linked quarter to $10.6 billion • Average deposits decreased $98.3 million compared to the linked q
Slide 13: 2Q 2023 highlights
2Q 2023 highlights • Quarterly earnings driven by strong net interest margin and robust fee income • Adjusted1 earnings per share – $0.72 • Adjusted1 return on assets – 1.62% • Adjusted1 pre-tax, pre-provision return on assets – 2.27% • Adjusted1 return on average tangible common equity – 26.46% • E
Slide 14: 2Q 2023 highlights
2Q 2023 highlights • Adjusted1 noninterest expense of $116.9 million, a 2.0% increase from first quarter • Adjustments1 include $1.0 million tax credit investment writedown, $1.7 million of costs related to online banking conversion and $1.0 million of other costs not expected to recur such as acqui
Slide 15: Adjusted net income
adjusted net income1 15 The table below lists certain adjustments that the Company believes are significant to understanding its quarterly performance. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition. See Appendix for Non
Slide 16: Profitability
profitability 16 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 $0.69$0.74$0.73 $0.59$
Slide 17: Net interest income & margin
net interest income & margin 17 Net Interest Margin (FTE) 2Q23 NIM (FTE) Progression Net Interest Income All dollars shown in millions 1Q23 4.55% Asset yields/mix 0.34% Deposit & funding costs/mix -0.40% Accretion/other -0.01% 2Q23 4.48% $5.0$4.3 $5.0 $4.2 $3.9 $1.1$1.1$1.2 $2.3 $2.6 $159.2$159.3$15
Slide 18: Liquidity and beta profile
liquidity and beta profile 18 1Historical data adjusted for the merger with MainSource Financial Group, Inc. using the sum of the individual components. Historical Deposit and Loan Betas1 Total Deposit Beta Loan Beta Liquidity Trends 29% 30% 29% 28% 26% 25% 24% 24% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 19: Noninterest income
noninterest income 19 Noninterest Income 2Q23 Highlights All dollars shown in thousands • Total fee income 25.1% of net revenue • Foreign exchange income of $15.0 million; decreased $1.9 million, or 11.0%, from the linked quarter • Leasing business income of $10.3 million; decreased $3.4 million, or
Slide 20: Noninterest expense
noninterest expense 20 Noninterest Expense 2Q23 Highlights All dollars shown in thousands • Core expenses increased $2.3 million, or 2%, primarily due to annual merit increases and higher marketing expenses; partially offset by lower fraud and leasing business expenses • Adjustments include: • $1.0
Slide 21: Average balance sheet
average balance sheet 21 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $10,514$10,373$10,059$9,597$9,368 7.03% 6.63%6.01% 5.05% 4.16% 2Q231Q234Q223Q222Q22 Gross Loans Loan Yield (Gross) 1 $3,560$3,635$3,705$4,003$4,118 4.01%3
Slide 22: Deposits
deposits 22 Deposit Product Mix (Avg) 2Q23 Average Deposit Progression All dollars shown in millions Total growth/(decline): ($98.3) million -$287.2 -$56.4 -$102.0 $57.2 $95.1 $214.0 -$19.0 Noninterest-bearing Interest-bearing demand Savings Money Markets Retail CDs Brokered Deposits Public Funds No
Slide 23: Average deposit trends
average deposit trends 23 All dollars shown in millions, except for uninsured deposits, which are shown in billions Business Public Funds Personal Uninsured Deposits Uninsured deposits (per call report instructions) 4,581$ Less: Public funds 1,658 Less: Intercompany deposits 391 Adjusted uninsured d
Slide 24: Average deposit trends - continued
average deposit trends-continued 24 All dollars shown in billions 2023 Average deposits by month $5.91 $5.90 $5.90 $5.89 $5.78 $5.79 $3.98 $3.88 $3.79 $3.69 $3.65 $3.65 $1.91 $1.85 $1.77 $1.74 $1.84 $1.88 $11.80 $11.63 $11.45 $11.32 $11.28 $11.32 January February March April May June Personal Busine
Slide 25: Deposit concentrations
deposit concentrations 25 Business Deposits by Sector All dollars shown in millions NAICS Sector 6/30/23 % of Total Deposits Manufacturing $567.3 4.4% Real Estate and Rental and Leasing 453.5 3.6% Finance and Insurance 446.5 3.5% Construction 319.0 2.5% Professional, Scientific, and Technical Servic
Slide 26: Borrowing capacity & cash/investment liquidity
26 Borrowing Capacity • Interest-bearing deposits with other banks of $485 million • Investment securities portfolio: • 98% of investment portfolio classified as available-for-sale • $626 million of expected cash flow from securities portfolio in next 12 months • $171 million of securities available
Slide 27: Loan portfolio
loan portfolio 27 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) All dollars shown in millions Total growth/(decline): $116.8 million $5.0 -$22.8 -$8.3 -$5.6 $94.2 -$32.4 $87.4 -$0.7 ICRE Commercial & Small Business Banking Oak Street Franchise Summit Consumer Mortgage Other ICRE $3,547 34%
Slide 28: Loan concentrations
loan concentrations 28 C&I and Owner Occupied CRE Loans by Sector1 Investor CRE Loans by Property Type All dollars shown in millions 1 Excludes Summit Funding Group Property Type 6/30/23 % of Total Loans Residential Multi Family 5+ $1,020.3 9.7% Retail Property 792.1 7.5% Office 485.3 4.6% Industria
Slide 29: Area of focus - office portfolio (non-owner occupied)
area of focus - office portfolio (non-owner occupied)1 29 Office Property Type 1 all graphs depicted on this slide only include office loans greater than $2.5 million All dollars shown in millions • $485 million balance represents 4.6% of total loan portfolio • $76 million are less than $2.5 million
Slide 30: Current expected credit losses - loans and leases
current expected credit losses - loans and leases 30 ACL / Total Loans 2Q23 Highlights All dollars shown in thousands • $166.9 million combined ACL; $10.7 million combined provision expense • $148.6 million ACL – loans and leases; increase driven by slower prepayment rates, net charge-offs and loan
Slide 31: Asset quality
asset quality 31 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 $2.0 $1.7 $(0.2) $0.0 $5.7 -$0.8 $8.3 $10.0 $10.5 $10.7 0.22% 0.00% -0.01% 0.07%
Slide 32: Capital
capital 32 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 6/30 Risk Weighted Assets = $13,118,477 All capital numbers are considered preliminary. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial conditio
Slide 33: Capital ratios including all unrealized losses
capital ratios including all unrealized losses1 33 Tier 1 Common Equity Ratio Total Capital Ratio 6/30 Risk Weighted Assets = $13,118,477 All capital numbers are considered preliminary. 1 Assumes Company holds cash proceeds of securities sales Tier 1 Capital Ratio 9.48%9.37%8.93%8.83% 9.90% 7.00% 2Q
Slide 34: Capital strategy
capital strategy 34 Strategy & DeploymentTangible Book Value Per Share • 4.5% annualized dividend yield • 33.3% of 2Q23 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Common
Slide 35: Outlook commentary
outlook commentary1 • Loan balances expected to grow mid single digits in near-term • Deposit balances expected to increase modestly in near-term • Investment portfolio expected to decline as cash flows fund loan growth 35 • Total noninterest expense expected to be $117 - 119 million • Expected to b
Slide 36: Presentation contents
About First Financial Bancorp Financial Performance Appendix 36 presentation contents
Slide 37: Appendix: our markets
appendix: our markets 37 • Greater Cincinnati/Dayton • Loans $4.4 billion • Deposits $6.1 billion • Deposit Market Share T- #4 (2.7%) • Banking Centers 50 • Fortune 500 Companies 8 • Indianapolis • Loans $1.0 billion • Deposits $0.7 billion • Deposit Market Share #14 (1.2%) • Banking Centers 9 • For
Slide 38: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 39: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 39 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent June 30, Mar. 31, Dec. 31, Sep. 30, June 30, 2023 2023 2022 2022 2022 Net interest income 159,232$ 159,318$ 157,896$ 137,892$ 117,010$ Tax equivalent adjustm
Slide 40: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 40 All dollars shown in thousands Additional non-GAAP ratios June 30, Mar. 31, Dec. 31, Sep. 30, June 30, (Dollars in thousands, except per share data) 2023 2023 2022 2022 2022 Net income (a) 65,667$ 70,403$ 69,086$ 55,705$ 51,520$ Average total shareholders
Slide 41: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 41 All dollars shown in thousands Additional non-GAAP measures 4Q22 3Q22 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 159,232$ 159,232$ 159,318$ 159,318$ 157,896$ 157,896$ 137,892$ 137,892$ Provi
Slide 42: First Financial Bancorp
First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
First Financial Bancorp — Q2 2023 Earnings Presentation on 6ix