First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Presentation (November 2008)
42 slides from First Financial Bancorp's investor presentation, Nov 13, 2008
Slide 1: First Financial Bancorp Investor Presentation
First Financial Bancorp Investor Presentation November 13, 2008
Slide 2: Forward-Looking Statement Disclosure
Forward-Looking Statement Disclosure Certain statements that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the Act). In addition, certain statements in future filings by First Financial with the Securit
Slide 3: Investment Highlights
Investment Highlights Corporate Overview (09/30/08) Total Assets: $3.5 billion Successfully executing strategic plan Total Loans: $2.7 billion Total Deposits: $2.7 billion Stable and strong credit quality 80 retail branch locations serving 9 regional markets in 53 communities in 3 states 1,052 FTEs
Slide 4: Investor Presentation
Investor Presentation Our History . . . . . . . . . . . . . . . 5 Our Business . . . . . . . . . . . . . . 8. . . . . Our Operating Model . . . . . . . . 13 . Financial Information . . . . . . . . 19 .... Credit . . . . . . . . . . . . . . . . . . . . 29 . Building on Results . . . . . . . . . 32 .
Slide 5: Our History
fiRST first financial bancorp Our History
Slide 6: History
History First Financial Bank was founded in 1863 16 bank/thrift acquisitions from 1989 through 1999 resulted in multiple bank charters and brand identities Established Strategic (Rebuilding & Reorganization) Plan in March 2005 Consolidated and streamlined company to establish one charter and one bra
Slide 7: Reorganization Plan - Timeline
Reorganization Plan - Timeline January 2005 October 2008 Another step on the path to success 7
Slide 8: Our Business
fiRST first financial bancorp Our Business
Slide 9: Business Strategy
Business Strategy Client “Intimate” Strategy – Strategic Focus: build long-term relationships with clients by identifying and meeting their financial needs Target clients – Individuals and small / mid-size private businesses located within the regional markets we serve Ohio, Indiana, Kentucky – Serv
Slide 10: Markets
Markets Northwest Indiana North Central Indiana Indianapolis - Indiana South Central Indiana Northern Ohio Dayton / Middletown - Ohio Butler / Warren County - Ohio Cincinnati - Ohio Northern Kentucky Another step on the path to success 10
Slide 11: Growth Plan
Growth Plan Primary focus and value creation is through organic growth in our key regional markets Acquisitions can advance market position and accelerate the timing of market share compared with an organic growth only strategy – Pricing must be disciplined and favorable compared with the longer-ter
Slide 12: Corporate Goals
Corporate Goals Top-quartile performance for all stakeholders Sustained and consistent excellence Commitment to growth Effective management of all risks Another step on the path to success 12
Slide 13: Our Operating Model
fiRST first financial bancorp Our Operating Model
Slide 14: Business Units
Business Units Retail Banking Commercial Banking Wealth Management Another step on the path to success 14
Slide 15: Retail Banking
Retail Banking Strategic Focus – Retail consumer clients – Deposits – Select consumer lending activities 80 retail branch locations Serving 9 regional markets in 53 communities in 3 states Managed locally by experienced local bankers Supported centrally Another step on the path to success 15
Slide 16: Demographic Profile
Demographic Profile Demographic Profile (First Financial Bancorp) Data as of December 31, 2007 Projected Projected HH FFBC Population Population HH Income Income Number of Total FFBC Deposit 2007 Total Change Change Median HH Change Change FFBC Deposits in Deposits in Market Population 2000 - 2007 2
Slide 17: Commercial Banking
Commercial Banking Strategic Focus – Small / mid-size private businesses located within our regional markets – Commercial & Industrial – Commercial Real Estate – Deposits / Cash Management Sales Force – 9 Market Presidents – 44 Commercial Lenders – 11 Treasury Management Representatives Another step
Slide 18: Wealth Management
Wealth Management First Financial Wealth Resource Group Strategic Focus – Target client has assets available for investment exceeding $750,000 – Maintain existing client base – Increase share of wallet of existing client base – Integration with retail and commercial banking clients – Generate referr
Slide 19: Financial Information
fiRST first financial bancorp Financial Information
Slide 20: Earning Assets
Earning Assets Yield 6.59% Yield 6.86% Yield 5.98% 100% 18% 15% 13% 17% 75% 20% 23% 13% 15% 50% 16% 57% 51% 25% 43% 0% Average FY-2006 Average FY-2007 Average YTD-2008 Commercial Loans & Leases Consumer Loans Residential Mortgages Investments Yield presented is not tax-equivalent YTD-2008 = January
Slide 21: Loan Portfolio Strategy
Loan Portfolio Strategy Growth Since 2005* Indirect Installments (83%) Residential Mortgages (45%) Commercial Lending 40% (400,000) (300,000) (200,000) (100,000) 100,000 200,000 300,000 400,000 500,000 600,000 ($000s) Gross loan CAGR* = 0.46% due to planned runoff in indirect loans and residential m
Slide 22: Liability Mix
Liability Mix Yield 2.59% Yield 2.92% Yield 2.30% 100% 6% 7% 9% 75% 40% 41% 39% 50% 40% 40% 40% 25% 13% 13% 13% 0% Average FY-2006 Average FY-2007 Average YTD-2008 Noninterest-Bearing Deposits Interest-Bearing Deposits Time Deposits Borrowed Funds YTD-2008 = January 1, 2008 – September 30, 2008 Anot
Slide 23: Noninterest Income
Noninterest Income YTD-2008 Total Noninterest Income = $39.1 million (excluding non-operating items) 23% Trust & I/A fees 35% Total Service Charges on Deposits Gain on Mortgage Loan Sales Bankcard Interchange Income -9% FHLMC Loss Other Misc. Income 11% 2% 38% YTD-2008 = January 1, 2008 – September
Slide 24: Efficiency
Efficiency Efficiency Ratio 80.0% 75.0% 70.0% 65.0% 60.0% Long Term Target = 55 to 60% 55.0% 50.0% 45.0% 40.0% FY-2004 FY-2005 FY-2006 FY-2007 YTD-2008 YTD-2008 = January 1, 2008 – September 30, 2008 Another step on the path to success 24
Slide 25: Staff Expense
Staff Expense Full-Time Equivalent Personnel 1,400 1,200 1,000 800 600 400 200 0 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Another step on the path to success 25
Slide 26: Capital
Capital Regulatory 3Q-08 pro forma for Ratio 3Q-08 Target "well-capitalized" $80 million CPP minimum Tangible Equity to Tangible Assets 7.13% 9.22% 6.75% - 7.25% N/A Leverge Ratio 7.95% 10.03% 8.00% - 8.50% 5% Total Risk-based Capital Ratio 10.89% 13.66% 11.50% - 12.00% 10% Excess capital of $80.8 m
Slide 27: Investment Portfolio
Investment Portfolio September 30, 2008 On-going review of various strategies to increase the size of the investment portfolio and its absolute level of earnings, while balancing capital and liquidity targets. – Increased the size of the portfolio by approximately $68 million since June 30, 2008 – P
Slide 28: Investment Portfolio
Investment Portfolio September 30, 2008 Sector Allocation Credit Quality MBS's (Agency) Investm ent Grade 65.9% 95.6% CM O's (Private) Agency CM O's Preferred 0.0% Municipal (Agency) Agency's Other * Not Rated Other Investm ent 0.8% 6.0% 12.3% 8.4% 4.3% Non-Investm ent Grade 7.4% Grade 0.0% 0.1% * O
Slide 29: Credit
fiRST first financial bancorp Credit
Slide 30: Current Credit Management System
Current Credit Management System Market-based Centralized First Financial Bancorp Market level First Financial Bank Chief Credit Executive Vice Officer President Markets Central Regional Credit Market Documentation/ Officers (2) Presidents Filing Commercial Real Special Assets Commercial Estate Spec
Slide 31: Credit Quality
Credit Quality Credit quality metrics are within estimated range and remain stable Highlights the success of the restructured credit organization – Reflects discipline of originating loans within existing footprint, strong underwriting policies, and proactive management of resolution strategies for
Slide 32: Building on Results
fiRST first financial bancorp Building on Results
Slide 33: Building on Results
Building on Results Credit quality metrics consistent with expectations and within forecasted ranges Capital exceeds regulatory “well-capitalized” levels – Reduced credit risk on the balance sheet with the securitization of $58.5 million in residential mortgage loans into agency guaranteed, mortgage
Slide 34: Building on Results
Building on Results Noninterest Income – Recorded YTD-2008 loss of $3.6 million related to FHLMC preferred stock holdings – Wealth Management • Investment advisory and trust fees, including assets under management impacted by lower equity market values related to overall market declines Noninterest
Slide 35: Keys to Success / Challenges
Keys to Success / Challenges Keys to Success – Continued success in commercial lending – Continued management of credit quality – Continued focus on efficiency and expense management – Faster revenue growth Challenges – Managing the current interest rate environment – Margin ~ asset sensitive balanc
Slide 36: Full-Year 2008 Expectations
Full-Year 2008 Expectations Loans – Low single-digit growth Deposits – Mid-single-digit decline in total balances with transaction deposits increasing at a low, single-digit rate, and time deposits declining at a faster pace Net interest income is expected to stabilize Net interest margin between 3.
Slide 37: Investment Highlights
Investment Highlights Corporate Overview (09/30/08) Total Assets: $3.5 billion Successfully executing strategic plan Total Loans: $2.7 billion Total Deposits: $2.7 billion Stable and strong credit quality 80 retail branch locations serving 9 regional markets in 53 communities in 3 states 1,052 FTEs
Slide 38: Leadership
fiRST first financial bancorp Leadership Another step on the path to success
Slide 39: Leadership
Leadership Claude E. Davis President & Chief Executive Officer Claude E. Davis joined the company as President, Chief Executive Officer, and a member of the Board of Directors in October 2004. Mr. Davis also serves as Chairman on the Board of Directors of First Financial Bank. Prior to joining the c
Slide 40: Leadership
Leadership Gregory A. Gehlmann Senior Vice President, General Counsel Gregory A. Gehlmann joined the company in June 2005 as Senior Vice President and General Counsel. Mr. Gehlmann also served as Chief Risk Officer for the company from July 2006 to July 2008. Prior to joining the company, he practic
Slide 41: Leadership
Leadership John Sabath Senior Vice President & Chief Risk Officer John Sabath joined the company in 2005 as Regulatory Risk Manager and was later promoted to Senior Risk Officer and First Vice President. In August 2008, Mr. Sabbath was appointed Senior Vice President and Chief Risk Officer with resp
Slide 42: About First Financial Bancorp
About First Financial Bancorp First Financial Bancorp is a Cincinnati, Ohio based bank holding company with $3.5 billion in assets. Its banking subsidiary, First Financial Bank, N.A., founded in 1863, provides retail and commercial banking products and services, and investment and insurance products
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