First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q3 2023 Earnings Presentation
42 slides from First Financial Bancorp's earnings presentation, Nov 13, 2023
Slide 1: Investor Presentation Third Quarter 2023
investor presentation • Third Quarter 2023 Exhibit 99.1
Slide 2: Forward Looking Statements Disclosure
forward looking statements disclosure 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,” “expe
Slide 3: Forward Looking Statements Disclosure
forward looking statements disclosure • 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 presentation contents 4
Slide 5: Overview
overview 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: 2,121 Market Cap (9/30/23): $1.9B Dividend Yield (9/30/23): 4.
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 – 132 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 $3.1B / Deposits $2.9B Loans $1.8B / Deposits $4.8B Loans $3.9B / Deposits $5.0B L
Slide 8: Key Business Lines
key business lines Full suite of diversified financial products for individuals and businesses $17.1 Billion Assets $12.9 Billion Deposits 23.76% Adjusted MRQ ROATCE Diversified financial holding company with comprehensive and innovative solutions for individuals and businesses Wealth & asset manage
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
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 warehouse
Slide 11: Presentation Contents
About First Financial Bancorp Financial Performance Appendix presentation contents 11
Slide 12: 3Q 2023 Results
3Q 2023 results 132nd Consecutive Quarter of Profitability • EOP assets decreased $35.3 million compared to the linked quarter to $17.1 billion • EOP loans increased $96.6 million compared to the linked quarter to $10.6 billion • Average deposits increased $73.3 million compared to the linked quarte
Slide 13: 3Q 2023 Highlights
3Q 2023 highlights • Quarterly earnings driven by strong net interest margin and robust fee income • Adjusted1 earnings per share – $0.67 • Adjusted1 return on assets – 1.49% • Adjusted1 pre-tax, pre-provision return on assets – 2.12% • Adjusted1 return on average tangible common equity – 23.76% • E
Slide 14: 3Q 2023 Highlights
3Q 2023 highlights • Adjusted1 noninterest expense of $121.5 million, a 4.0% increase from second quarter • Adjustments1 include costs related to our online banking conversion as well as other costs not expected to recur such as acquisition, severance and branch consolidation costs • Increase driven
Slide 15: Adjusted Net Income
adjusted net income1 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-GA
Slide 16: Profitability
profitability 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 $0.66$0.69$0.74$0.73 $0.5
Slide 17: Net Interest Income & Margin
net interest income & margin Net Interest Margin (FTE) 3Q23 NIM (FTE) Progression Net Interest Income All dollars shown in millions 4.21% 4.34%4.43%4.32% 3.85% 0.12% 0.14% 0.12% 0.15% 0.12% 4.33% 4.48% 4.55% 4.47% 3.98% 3Q232Q231Q234Q223Q22 Basic Margin (FTE) Loan Fees 2Q23 4.48% Asset yields/mix 0.
Slide 18: Liquidity and Beta Profile
liquidity and beta profile 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 72% 72% 77% 79% 81% 82% 82% 82% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q
Slide 19: Noninterest Income
noninterest income Noninterest Income 3Q23 Highlights All dollars shown in thousands • Total fee income 26.7% of net revenue • Foreign exchange income of $13.4 million; decreased $1.7 million, or 11.0%, from the linked quarter • Leasing business income of $14.5 million; increased $4.3 million, or 41
Slide 20: Noninterest Expense
noninterest expense Noninterest Expense 3Q23 Highlights All dollars shown in thousands • Core expenses increased $4.7 million, or 4%, primarily due to higher employee costs, elevated fraud losses and a $2.1 million increase in leasing business expenses • $0.5 million of adjustments include: • Costs
Slide 21: Average Balance Sheet
average balance sheet Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $10,624$10,514$10,373$10,059$9,597 7.18%7.03%6.63%6.01% 5.05% 3Q232Q231Q234Q223Q22 Loans Loan Yield 1 $12,787$12,714$12,812$12,632$12,371 1.77% 1.40% 1.00% 0
Slide 22: Deposits
deposits Deposit Product Mix (Avg) 3Q23 Average Deposit Progression All dollars shown in millions Total growth/(decline): $73.3 million Noninterest- bearing $3,376 26% Interest-bearing demand $1,600 13% Savings $1,171 9% Money Markets $2,384 19% Retail CDs $1,164 9% Brokered Deposits $1,287 10% Publ
Slide 23: Average Deposit Trends
average deposit trends All dollars shown in millions Business Public Funds Personal Uninsured Deposits $5,824$5,821$5,903$5,910$6,095$6,232 3Q232Q231Q234Q223Q222Q22 $3,789$3,664$3,881$4,133$4,052$4,051 3Q232Q231Q234Q223Q222Q22 Uninsured deposits (per call report instructions) 5,250$ Less: Public fun
Slide 24: Average Deposit Trends - Continued
average deposit trends-continued All dollars shown in billions 2023 Average deposits by month $5.91 $5.90 $5.90 $5.89 $5.78 $5.79 $5.80 $5.83 $5.85 $3.98 $3.88 $3.79 $3.69 $3.65 $3.65 $3.74 $3.80 $3.83 $1.91 $1.85 $1.77 $1.74 $1.84 $1.88 $1.81 $1.83 $1.78 $11.80 $11.63 $11.45 $11.32 $11.28 $11.32 $1
Slide 25: Deposit Concentrations
deposit concentrations Business Deposits by Sector All dollars shown in millions 25 NAICS Sector 9/30/23 % of Total Deposits Manufacturing $567.7 4.4% Real Estate and Rental and Leasing 469.9 3.7% Finance and Insurance 463.3 3.6% Construction 357.4 2.8% Professional, Scientific, and Technical Servic
Slide 26: Borrowing Capacity & Cash/Investment Liquidity
Borrowing Capacity • Interest-bearing deposits with other banks of $453 million • Investment securities portfolio: • 97% of investment portfolio classified as available-for-sale • $662.5 million of expected cash flow from securities portfolio in next 12 months • $624.4 million of floating rate secur
Slide 27: Loan Portfolio
loan portfolio Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) All dollars shown in millions Total growth/(decline): $96.6 million ICRE $3,519 33% Commercial & Small Business Banking $3,315 31% Oak Street $682 7% Franchise $241 2% Summit $543 5% Consumer $940 9% Mortgage $1,406 13% Other $1
Slide 28: Loan Concentrations
loan concentrations 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 NAICS Sector 9/30/23 % of Total Loans Finance and Insurance $821.6 7.7% Real Estate and Rental and Leasing 785.3 7.4% Manufacturing 561.1
Slide 29: Area of Focus - Office Portfolio
area of focus - office portfolio (non-owner occupied) Office Property Type All dollars shown in millions Office Property Market Office Risk Classification • $475 million balance represents 4.5% of total loan portfolio • 67% of portfolio is suburban • Average LTV of 62% • Majority of exposure is in o
Slide 30: Current Expected Credit Losses - Loans and Leases
current expected credit losses - loans and leases ACL / Total Loans 3Q23 Highlights All dollars shown in millions • $162.2 million combined ACL; $11.7 million combined provision expense • $145.2 million ACL – loans and leases; increase driven by net charge-offs; 1.36% of loan balances • Utilized Moo
Slide 31: Asset Quality
asset quality 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 $1.7 $(0.2) $0.0 $5.7 $16.4 $8.3 $10.0 $10.5 $10.7 $11.7 0.61% 0.22% 0.00%-0.01% 0.
Slide 32: Capital
capital Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 9/30 Risk Weighted Assets = $13,170,574 All capital numbers are considered preliminary. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition.
Slide 33: Capital Ratios, Reflecting All Unrealized Losses
capital ratios, reflecting all unrealized losses1 Tier 1 Common Equity Ratio Total Capital Ratio 9/30 Risk Weighted Assets = $13,170,574 All capital numbers are considered preliminary. 1 Assumes Company holds cash proceeds of securities sales Tier 1 Capital Ratio 9.62%9.48%9.37%8.93%8.83% 7.00% 3Q23
Slide 34: Capital Strategy
capital strategy Strategy & DeploymentTangible Book Value Per Share • 4.7% annualized dividend yield • 34.7% of 3Q23 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Common di
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 modestly decline as cash flows fund loan growth • Total noninterest expense expected to be $121 - 123 million • Expecte
Slide 36: Presentation Contents
About First Financial Bancorp Financial Performance Appendix presentation contents 36
Slide 37: Appendix: Our Markets
appendix: our markets • Greater Cincinnati/Dayton • Loans $4.3 billion • Deposits $6.1 billion • Deposit Market Share #4 (2.9%) • Banking Centers 50 • Fortune 500 Companies 5 • Indianapolis • Loans $1.0 billion • Deposits $0.7 billion • Deposit Market Share #14 (1.2%) • Banking Centers 9 • Fortune 5
Slide 38: Non-GAAP Financial Information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 39: Appendix: Non-GAAP to GAAP Reconciliation
appendix: non-GAAP to GAAP reconciliation All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, 2023 2023 2023 2022 2022 Net interest income 155,455$ 159,232$ 159,318$ 157,896$ 137,892$ Tax equivalent adjustment
Slide 40: Appendix: Non-GAAP to GAAP Reconciliation
appendix: non-GAAP to GAAP reconciliation All dollars shown in thousands Additional non-GAAP ratios Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, (Dollars in thousands, except per share data) 2023 2023 2023 2022 2022 Net income (a) 63,061$ 65,667$ 70,403$ 69,086$ 55,705$ Average total shareholders' e
Slide 41: Appendix: Non-GAAP to GAAP Reconciliation
appendix: non-GAAP to GAAP reconciliation All dollars shown in thousands Additional non-GAAP measures 1Q23 4Q22 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 155,455$ 155,455$ 159,232$ 159,232$ 159,318$ 159,318$ 157,896$ 157,896$ Provisio
Slide 42: First Financial Bancorp
First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202 42
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