First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q4 2014 Earnings Presentation
26 slides from First Financial Bancorp's earnings presentation, Feb 25, 2015
Slide 1: First Financial Bancorp Investor Presentation Fourth Quarter 2014
First Financial Bancorp Investor Presentation Fourth Quarter 2014 EXHIBIT 99.1
Slide 2: Forward-Looking Statements
2 Certain statements contained in this release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income
Slide 3: Company Overview
3 Company Overview Founded in 1863 Headquarters: Cincinnati, OH Primary Footprint: Ohio, Indiana and Kentucky 106 banking centers Nationwide franchise lending business Lines of business: commercial, consumer, wealth management, mortgage Target clients – individuals and small- / mid-sized businesses
Slide 4: Franchise Highlights
4 Franchise Highlights $7.2 billion, leading community bank with 106 banking centers in Ohio, Indiana & Kentucky: #3 in Ohio and #5 in Indiana1 Well-positioned as local alternative to “big banks” in metropolitan and non-metropolitan markets Personalized service, creative marketing and employee invol
Slide 5: Entrance to the Columbus, Ohio Market
5 Entrance to the Columbus, Ohio Market Third fastest growing metropolitan market in the Midwest Population of 1.9 million with projected growth of 4.3% through 2017 – highest in Ohio Diverse economy anchored by 15 Fortune 1000 companies Columbus MSA Market Highlights1 1 Source: the Columbus Chamber
Slide 6: 2015 Strategic Priorities
6 2015 Strategic Priorities Achieve growth through deepening relationships with and retaining current clients as well as redefining our approach in our metropolitan markets Develop standard and repeatable processes to ensure consistent delivery of our client service experience and improved operation
Slide 7: Fourth Quarter & Full Year 2014 Financial Highlights
7 Fourth Quarter & Full Year 2014 Financial Highlights Fourth quarter net income of $18.6 million, or $0.30 per diluted common share; $0.32 per diluted common share adjusted for the impact of non-operating items YTD net income of $65.0 million, or $1.09 per diluted common share; $1.18 adjusted for n
Slide 8: Adjusted Pre-Tax, Pre-Provision Income Trend
8 Adjusted Pre-Tax, Pre-Provision Income Trend Adjusted pre-tax, pre-provision (“PTPP”) income represents income before taxes plus provision for all loans less FDIC loss sharing income and accelerated discount adjusted for significant non-operating and non-recurring items Fourth quarter adjusted PTP
Slide 9: Components of Net Interest Income
9 Components of Net Interest Income Net interest margin increased 1 bp during the fourth quarter to 3.67% Quarterly average balance of loans increased 7.9% while the portfolio yield declined 5 bps to 4.63% (1) Quarterly average investment balances decreased 2.9% while the portfolio yield increased 3
Slide 10: Credit Product Diversity
10 Credit Product Diversity During the fourth quarter, the Company’s comprehensive set of credit products produced solid loan growth driven though multiple channels led by specialty finance, commercial, commercial real estate, franchise finance lending and residential mortgage lending Category As of
Slide 11: Loan Composition
11 Loan Composition Total loans essentially unchanged compared to linked quarter. Solid growth in CRE and lease financing portfolios offset by continued runoff of the covered & formerly covered loan portfolios. Strong quarter over quarter growth in average balances related to full quarter impact of
Slide 12: Commercial Lending
12 Commercial Lending C&I / Owner Occupied CRE Investment Real Estate Target loan size is $1 million to $15 million, with flexibility to increase based on relationship criteria Increased focus on middle market business clients (generally up to $30 million of revenue) Specialty finance designed to ex
Slide 13: Specialty Banking Overview
Specialty Banking Overview Three Specialty Lines of Business First Franchise Capital First Financial Business Capital First Financial Equipment Finance Primary Product Offerings Restaurant Franchises - Equipment & Real Estate Asset Based Lending, Cash Flow & Mezzanine Lending Equipment Finance Contr
Slide 14: Consumer Lending
14 Consumer Lending Consumer lending focused primarily on residential mortgage, home equity and credit cards Serving consumer households in Ohio, Indiana and Kentucky markets Mortgage loan originators located across footprint with concentrations in Cincinnati, Columbus, Dayton, Fort Wayne and Indian
Slide 15: Deposit Composition
15 Deposit Composition Total deposits increased $122.7 million, or 2.2%, during the quarter Average total deposits increased $442.8 million, or 8.5%, during the quarter Increases primarily driven by $569 million of deposits from acquisitions The total cost of deposit funding during the quarter remai
Slide 16: Delivery Channels and Product Innovation
16 Delivery Channels and Product Innovation Deliver a consistent brand experience in a cost-effective manner Upgrades to all on-line & mobile banking platforms in 2015 Enhancements to Small Business Analyzer tool coming soon Project to re-design public website is currently under way Client usage of
Slide 17: Wealth Management Business Overview
17 Wealth Management Business Overview 2014 WM Revenue as a % of Total Noninterest Income* 2014 Revenue by Primary Unit $2.4 billion of assets under management at December 31, 2014 Fee income generated through our three main business units represented 28% of First Financial’s 2014 noninterest income
Slide 18: Capital Management
18 Capital Management Long-term capital return target to shareholders of 60% - 80% of earnings through combination of dividends and share repurchases Quarterly dividend of $0.16 per share Translates into yield of 3.4% compared to current peer median dividend yield of 2.4% Announced a share repurchas
Slide 19: Capitalization
19 Capitalization Primary component of capital is common equity Capitalization levels have declined as company deployed capital through organic growth and recent acquisitions in addition to the strong return of capital to shareholders Long-term goal is to deploy capital above target levels though gr
Slide 20: Credit Quality
20 Credit Quality Credit quality metrics updated during fourth quarter to reflect the expiration of FDIC loss sharing coverage on non-single family assets effective October 1, 2014. Allowance and loan marks both provide protection against credit-related losses The ratio of ALLL + Loan Marks – Indemn
Slide 21: Appendix Fourth Quarter 2014
Appendix Investor Presentation Fourth Quarter 2014
Slide 22: Financial Highlights
22 Financial Highlights Balance Sheet Income Statement Profitability 1 2009 adjusted to exclude bargain purchase gain related to FDIC-assisted acquisition of Irwin Union Bank. For the periods starting in 2013, adjusted for acquisition related expenses, expenses related to efficiency initiatives, gai
Slide 23: Adjusted Pre-Tax, Pre-Provision Income
23 Adjusted Pre-Tax, Pre-Provision Income December 31, September 30, June 30, March 31, December 31, (Dollars in thousands) 2014 2014 2014 2014 2013 Pre-tax, pre-provision income 1 28,462$ 23,647$ 22,422$ 21,660$ 1,947$ Less: accelerated discount on covered loans 3 1,759 789 621 1,015 1,572 Plus: lo
Slide 24: Investment Portfolio
24 Investment Portfolio Investment portfolio represents 24.4% of total assets Yield earned on portfolio increased by 3 bps to 2.40% from 2.37% for the linked quarter Overall duration of the portfolio declined to 3.4 years from 3.7 years at the end of the third quarter As of December 31, 2014 Categor
Slide 25: Funding Structure and Cost of Funds
25 Funding Structure and Cost of Funds Average Balances – Total Interest Bearing Liability Composition Average Balances – Deposit Composition Total Cost of Funds (1) Not included in cost of funds calculation Total Cost of Deposits Co s t of F u n d s 0.37% 0.39% 0.40% 0.44% 0.28% 0.29% 0.32% 0.35% 0
Slide 26: First Financial Bancorp Fourth Quarter 2014
First Financial Bancorp Investor Presentation Fourth Quarter 2014
First Financial Bancorp — Q4 2014 Earnings Presentation on 6ix