First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q3 2022 Earnings Presentation
39 slides from First Financial Bancorp's earnings presentation, Nov 7, 2022
Slide 1: Investor Presentation Third Quarter 2022
investor presentation • Third 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: 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: 134 Employees: 2,072 Market Cap (09/30/22): $2.0B Dividend Yield (09/30/22)
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 – 128 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 $3.0B Loans $1.6B / Deposits $5.1B Loans $4.0B / Deposits $4.0B 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 6/30/22. All other data as of 09/30/22. 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 1 – Tech Spend consists of data processing, communications, software / equipment depreciation & departmental expenses (primarily salaries & benefits) for the Technology, Digital & Info Security teams. 2 – Total Expense excludes Leasing Business Ex
Slide 12: Digital + technology highlights
• engagement • digital engagement across core customers increased 4.2% vs. Q3 2021 • consumer online banking logins increased 10.7% vs. Q3 2021 • self service • consumer remote deposit volume increased 0.6% vs. Q3 2021 • consumer online banking transaction volume increased 9.9% vs. Q3 2021 • custome
Slide 13: Presentation contents: Financial Performance
About First Financial Bancorp Financial Performance Appendix 13 presentation contents
Slide 14: 3Q 2022 results
3Q 2022 results 128th Consecutive Quarter of Profitability 14 • EOP assets increased $380.1 million compared to the linked quarter to $16.6 billion • EOP loans increased $377.0 million compared to the linked quarter to $9.8 billion • Average deposits decreased $166.7 million compared to the linked q
Slide 15: 3Q 2022 highlights
3Q 2022 highlights • Quarterly earnings driven by net interest margin • Adjusted1 earnings per share - $0.61 • Adjusted1 return on assets - 1.40% • Adjusted1 pre-tax, pre-provision return on assets - 1.82% • Adjusted1 return on average tangible common equity – 23.12% • End of period loan balances in
Slide 16: 3Q 2022 highlights
3Q 2022 highlights • Adjusted1 noninterest expense of $106.1 million • Adjusted1 for $17.2 million in tax credit investments and $1.7 million of other costs not expected to recur such as acquisition, severance and branch consolidation costs • $11.3 million of Summit operating expenses during the qua
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 $0.59$0.55 $0.44 $0.50
Slide 19: Net interest income & margin
net interest income & margin 19 Net Interest Margin (FTE) 3Q22 NIM (FTE) Progression Net Interest Income All dollars shown in millions 3.78% 3.24% 2.93% 2.82%2.87% 0.12% 0.11% 0.11% 0.18%0.11% 0.07% 0.08% 0.07%0.07%0.09% 0.16%0.25% 3.98% 3.45% 3.16% 3.23% 3.32% 3Q222Q221Q224Q213Q21 Basic Margin (FTE
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 25% 26% 28% 29% 30% 2
Slide 22: Liquidity and borrowing capacity
22 Liquidity Sources Available Borrowing Capacity Liquidity Sources • In addition to deposits, First Financial has approximately $6.8 billion of readily available funding sources to meet customer needs through the following sources: • Interest-bearing deposits with other banks • Fed funds • FHLB fun
Slide 23: Diverse and growing fee revenues
diverse and growing fee revenues 23 Noninterest Income 3Q22 Highlights All dollars shown in thousands • Total fee income 23.6% of net revenue • Foreign exchange income of $11.8 million; decreased $1.7 million, or 12.8%, from record linked quarter • Trust and wealth management fees of $5.5 million de
Slide 24: Well managed expenses
well managed expenses 24 Noninterest Expense 3Q22 Highlights All dollars shown in thousands • Core expenses increased due to elevated incentive compensation tied to the Company’s performance and higher leasing business expenses • Adjustments include: • $17.2 million of tax credit investment writedow
Slide 25: Average balance sheet
average balance sheet 25 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $12,371$12,538$12,784$12,885$12,667 0.20% 0.09%0.08%0.10%0.10% 3Q222Q221Q224Q213Q21 Total Deposits Cost of Deposits $4,003$4,118$4,308$4,344$4,189 3.11% 2
Slide 26: Attractive deposit portfolio
attractive deposit portfolio 26 Deposit Product Mix (Avg) 3Q22 Average Deposit Progression All dollars shown in millions Total growth/(decline): ($166.7) million $1.4 -$48.6 $15.0 -$48.8 -$58.1 $47.6 -$75.2 Interest-bearing demand Noninterest-bearing Savings Money Markets Retail CDs Brokered CDs Pub
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): $377.0 million $44.3 $140.0 $23.6 $0.8 $42.1 $69.3 $61.5 -$4.6 ICRE Commercial & Small Business Banking Oak Street Franchise Summit Consumer Mortgage PPP ICRE $3,503 36% Co
Slide 28: Current expected credit losses - loans and leases
current expected credit losses - loans and leases 28 ACL / Total Loans 3Q22 Highlights All dollars shown in thousands • $141.1 million combined ACL; $8.3 million combined provision expense • $124.1 million ACL – loans and leases, or 1.27% of loan balances; slight increase driven by strong loan growt
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 $2.5 $7.4 $2.3 $2.0 $1.7 -$10.1 -$7.7 -$5.8 -$0.8 $8.3 0.07% 0.08%0.10% 0.32% 0.
Slide 30: Capital
capital 30 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 9/30 Risk Weighted Assets = $12,467,422 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 31: Capital strategy
capital strategy 31 Strategy & Deployment Tangible Book Value Per Share • 4.4% annualized dividend yield • 39.1% of 3Q22 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Commo
Slide 32: Outlook commentary
outlook commentary1 • Loan balances expected to grow high single digits in near term • Total deposit balances to remain flat or decline slightly over near term 32 • Expected to be $105-107 million • Growth in leasing business expense of ~$1 million per quarter as portfolio grows • Incentive expense
Slide 33: Presentation contents: Appendix
About First Financial Bancorp Financial Performance Appendix 33 presentation contents
Slide 34: Appendix: our markets
appendix: our markets 34 • Greater Cincinnati/Dayton • Loans $4.4 billion • Deposits $5.2 billion • Deposit Market Share #5 (2.7%) • Banking Centers 52 • Fortune 500 Companies 8 • Indianapolis • Loans $0.9 billion • Deposits $0.9 billion • Deposit Market Share #14 (1.2%) • Banking Centers 10 • Fortu
Slide 35: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 36: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 36 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, 2022 2022 2022 2021 2021 Net interest income 137,892$ 117,010$ 106,345$ 110,806$ 113,410$ Tax equivalent adjustm
Slide 37: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 37 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) 2022 2022 2022 2021 2021 Net income (a) 55,705$ 51,520$ 41,301$ 46,945$ 60,012$ Average total shareholders
Slide 38: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 38 Additional non-GAAP measures 1Q22 4Q21 3Q21 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 137,892$ 137,892$ 117,010$ 117,010$ 106,345$ 106,345$ 110,806$ 110,806$ 113,410$ 1
Slide 39: First Financial Bancorp
39 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
First Financial Bancorp — Q3 2022 Earnings Presentation on 6ix