First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q2 2022 Earnings Presentation
40 slides from First Financial Bancorp's earnings presentation, Sep 6, 2022
Slide 1: Investor Presentation Second Quarter 2022
investor presentation • Second Quarter 2022 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
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: 135 Employees: 2,096 Market Cap (06/30/22): $1.8B Dividend Yield (06/3
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 – 127 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 $3.1B Loans $1.5B / Deposits $5.2B Loans $3.9B / Deposits $3.8B 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 03/31/22.8 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: Bank transformation
11 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 $60.3 $59.0 $55.5 $48.6
Slide 12: Digital + technology highlights
• engagement • digital engagement across core customers increased 4.1% vs. Q2 2021 • consumer online banking logins increased 13.4% vs. Q2 2021 • self service • consumer remote deposit volume increased 3.9% vs. Q2 2021 • consumer online banking transaction volume increased 11.5% vs. Q2 2021 • custom
Slide 13: Presentation contents: Financial Performance
About First Financial Bancorp Financial Performance Appendix 13 presentation contents
Slide 14: 2Q 2022 results
2Q 2022 results 127th Consecutive Quarter of Profitability 14 • EOP assets increased $234.6 million compared to the linked quarter to $16.2 billion • EOP loans increased $178.8 million compared to the linked quarter to $9.4 billion • Average deposits decreased $246.3 million compared to the linked q
Slide 15: 2Q 2022 highlights
2Q 2022 highlights • Quarterly earnings driven by net interest margin, strong fee income generation and diligent expense management • Adjusted1 earnings per share - $0.56 • Adjusted1 return on assets - 1.31% • Adjusted1 pre-tax, pre-provision return on assets - 1.63% • Adjusted1 return on average ta
Slide 16: 2Q 2022 highlights
2Q 2022 highlights • Noninterest expenses in line with expectations • Adjusted1 noninterest expense of $102.4 million; Adjusted1 for $0.1 million in Summit acquisition costs and $0.7 million of other costs not expected to recur such as severance and branch consolidation costs • $9.9 million of Summi
Slide 17: Adjusted net income
adjusted net income1 17 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 18: Profitability
profitability 18 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 $0.55 $0.44 $0.50 $0.6
Slide 19: Net interest income & margin
net interest income & margin 19 Net Interest Margin (FTE) 2Q22 NIM (FTE) Progression Net Interest Income All dollars shown in millions $3.9 $3.7 $6.5$3.9$3.4 $2.6 $2.2$2.3 $3.0$3.5 $0.6 $1.7 $5.6$9.3$9.2 $117.2 $106.3 $110.8 $113.4$114.0 2Q221Q224Q213Q212Q21 Loan Fees Loan Accretion PPP Interest/Fee
Slide 20: Asset sensitive balance sheet positioning
20 1NII – Year 1 impact, represents percentage change for immediate parallel changes in rates 2Reflects percentage of loans classified as variable rate and repricing in ≤ 1yr, hybrid variable rate repricing in > 1yr, or fixed rate, including loans held for sale 3Schedule reflects remaining maturity
Slide 21: Liquid balance sheet presents opportunity
liquid balance sheet presents opportunity 21 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 Excess Liquidity Provides Significant Tailwind 24% 31% 3Q15-2Q19 Fed
Slide 22: Diverse and growing fee revenues
diverse and growing fee revenues 22 Noninterest Income 2Q22 Highlights All dollars shown in thousands • Total fee income 29.8% of net revenue • Record Foreign exchange income of $13.5 million; increased $3.3 million, or 32.7%, from linked quarter • Trust and wealth management fees of $6.3 million re
Slide 23: Well managed expenses
well managed expenses 23 Noninterest Expense 2Q22 Highlights All dollars shown in thousands • Core expenses increased due to annual merit increases, leasing business expenses and elevated incentive compensation tied to fee income • Adjustments include: • $0.1 million of acquisition related costs • $
Slide 24: Average balance sheet
average balance sheet 24 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $9,368$9,267$9,283$9,503$9,832 4.16% 3.82% 3.96%4.03% 3.98% 2Q221Q224Q213Q212Q21 Gross Loans Loan Yield (Gross) 1 $12,538$12,784$12,885$12,667$12,711 0.09
Slide 25: Attractive deposit portfolio
attractive deposit portfolio 25 Deposit Product Mix (Avg) 2Q22 Average Deposit Progression All dollars shown in millions Total growth/(decline): ($246.3) million -$1.7 $35.9 $31.2 -$103.8 -$33.3 -$135.6 -$39.0 Interest-bearing demand Noninterest-bearing Savings Money Markets Retail CDs Brokered CDs
Slide 26: Loan portfolio
loan portfolio 26 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) All dollars shown in millions Total growth/(decline): $178.8 million ICRE $3,736 40% Commercial & Small Business Banking $2,756 29% Consumer $898 10% Mortgage $1,056 11% Oak Street $586 6% Franchise $294 3% Summit $85 1% Total
Slide 27: Loan concentrations
loan concentrations 27 C&I Loans by Industry CRE Loans by Collateral 1 Industry types included in Other representing greater than 1% of total C&I loans include Public Administration, Waste Management, Agriculture, Other Services, Arts & Recreation, and Information. Includes owner-occupied CRE. 2 Col
Slide 28: Current expected credit losses - loans and leases
current expected credit losses - loans and leases 28 ACL / Total Loans 2Q22 Highlights All dollars shown in thousands • $134.5 million combined ACL; $0.8 million combined provision recapture • $117.9 million ACL – loans and leases, or 1.25% of loan balances; driven by strong credit quality • Utilize
Slide 29: Asset quality
asset quality 29 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 $119.8 $106.8$104.8 $165.5 $182.5 0.74%0.67%0.64% 1.04% 1.14% 2Q221Q224Q213Q212Q
Slide 30: Investment portfolio and liquidity
30 Investment Portfolio Composition Investment Portfolio Quality Total: $4.1B Duration: 4.2 Yrs Liquidity Sources • In addition to deposits, First Financial has approximately $7.2 billion of readily available funding sources to meet customer needs through the following sources: • Fed funds • FHLB fu
Slide 31: Capital
capital 31 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 6/30 Risk Weighted Assets = $11,980,331 All capital numbers are considered preliminary. 1Decline in 2Q22 due to $100.9 million decline in AOCI Tier 1 Capital Ratio 13.94%13.97%14.10% 14.97%15.31% 10.50% 2Q221Q224Q
Slide 32: Capital strategy
capital strategy 32 Strategy & Deployment Tangible Book Value Per Share • 4.7% annualized dividend yield • 42.1% of 2Q22 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Commo
Slide 33: Outlook commentary
outlook commentary1 • Loan balances expected to grow mid-high single digits in near term • Transaction deposit balances expected to decline modestly over near-term 33 • Expected to be $102-104 million • Will fluctuate with fee incomeNoninterest Expense Net Interest Margin Balance Sheet Credit • Cont
Slide 34: Presentation contents: Appendix
About First Financial Bancorp Financial Performance Appendix 34 presentation contents
Slide 35: Appendix: our markets
appendix: our markets 35 • Greater Cincinnati/Dayton • Loans $4.3 billion • Deposits $5.0 billion • Deposit Market Share T-4 (3.0%) • Banking Centers 52 • Fortune 500 Companies 8 • Indianapolis • Loans $0.9 billion • Deposits $0.8 billion • Deposit Market Share #14 (1.3%) • Banking Centers 10 • Fort
Slide 36: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 37: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 37 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent June 30, Mar. 31, Dec. 31, Sep. 30, June 30, 2022 2022 2021 2021 2021 Net interest income 117,195$ 106,346$ 110,806$ 113,410$ 114,026$ Tax equivalent adjustm
Slide 38: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 38 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) 2022 2022 2021 2021 2021 Net income (a) 51,520$ 41,301$ 46,945$ 60,012$ 50,888$ Average total shareholders
Slide 39: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 39 Additional non-GAAP measures As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 117,195$ 117,195$ 106,346$ 106,346$ 110,806$ 110,806$ 113,410$ 113,410$ 114,026$ 114,026$ Provisi
Slide 40: First Financial Bancorp
40 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
First Financial Bancorp — Q2 2022 Earnings Presentation on 6ix