First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q3 2018 Earnings Presentation
34 slides from First Financial Bancorp's earnings presentation, Oct 30, 2018
Slide 1: Investor Presentation Third Quarter 2018
Exhibit 99.1 Investor Presentation Third Quarter 2018
Slide 2: Forward Looking Statement Disclosure
Forward Looking Statement 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,” “expec
Slide 3: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 3
Slide 4: Company Overview
Company Overview Overview Lines of Business Founded: 1863 Commercial Headquarters: Cincinnati, Ohio C&I, O-CRE, ABL, Equipment Finance, Treasury Retail Banking Banking Centers: 159 Consumer, Business Banking, Small Business Assets: $13.8 billion Mortgage Banking Loans: $8.8 billion Wealth Management
Slide 5: Target ions current Petit
Target ions current Petit Danae ep 300 Retort Sinica Ses Revere 38 Gomes ‘Sine 36 Porson vate pote Fp ee ceon ger peer as he pred usiness Line Gola ean Gow 1 Depot wth rehome Siio-$4s0c came SBocSinatmaln Hoh et Wort: $5000 Hs nme sinae Sout AM PlanSpensrs:§1-S20MM Pan Sze 100s Panipat: Curent Portf
Slide 6: Market Centric Strategies
Market Centric Strategies METRO MARKETS COMMUNITY MARKETS HEADQUARTERS NATIONAL Louisville, KY Southeastern IN Columbus, OH South Central IN Greater Cincinnati Industry Specific Indianapolis, IN Northwest IN Northern KY Dayton, OH Northern OH th Low brand awareness High brand awareness 4 in market s
Slide 7: Product & Pricing
Product & Pricing ‘* Regional pricing strategy + Increased Commercial lending limits + New Consumer product line-up « Treasury Management product investments Talent Expansion © Up-Market Commercial talent acquisition New business line leadership in Mortgage — focused on building out capabilities and
Slide 8: Current Priorities
Current Priorities . Successful integration of the two companies . Build out sales teams in key market areas . Successfully complete trailing integration projects . Achieve expense savings and deliver the financial returns we communicated to our shareholders by 1Q 2019 . Achieve targeted income and
Slide 9: Invest with First Financial
Invest with First Financial . Experienced and proven management team . Increased scale to invest in franchise . Proven & sustainable business model . Well managed through the cycle . Conservative operating philosophy . Consistent profitability – 112 consecutive quarters . Top quartile performer – RO
Slide 10: Invest with First Financial: Total Shareholder Return
Invest with First Financial Total Shareholder Return1,2,3,4 89.2% 84.3% 54.6% 47.4% 41.7% 33.2% 0.5% -3.0% -4.3% -2.2% -10.7% -10.6% 5 Year 3 Year 1 Year YTD 2018 FFBC KBW Peer Median KBW Peer Top Quartile 1 Includes dividend reinvestment 2 Peer group includes KBW regional bank index peers 3 Based o
Slide 11: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 11
Slide 12: 3Q 2018 Results
3Q 2018 Results 112th Consecutive Quarter of Profitability . Net income = $50.7 million or $0.51 per diluted share. Adjusted net income = $57.0 million or $0.58 per diluted share1,2 . Return on average assets = 1.45%. Adjusted return on average assets = 1.64%1 . Profitability Return on average share
Slide 13: 3Q 2018 Highlights
3Q 2018 Highlights Strong quarterly earnings Adjusted1 earnings per share - $0.58 Adjusted1 return on assets – 1.64% Adjusted1 return on average tangible common equity – 20.83% Expansion in capital ratios Stable net interest margin Slight decline driven by lower loan fees and day count Higher asset
Slide 14: Adjusted Net Income
Adjusted Net Income 1 The table below lists certain adjustments that we believe are significant to understanding our quarterly performance. 3Q 2018 2Q 2018 As Reported Adjusted As Reported Adjusted Net interest income $ 123,485 $ 123,485 $ 123,979 $ 123,979 Provision for loan and lease losses $ 3,23
Slide 15: Profitability
Profitability Diluted EPS Return on Average Assets $0.57 $0.58 1.60% 1.64% $0.52 1.49% $0.45 1.26% $0.39 1.11% 1.45% $0.49 $0.51 1.40% $0.40 $0.40 1.13% 1.13% $0.37 1.05% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 1 DilutedEPS Adjusted EPS 1 ROA Adjusted ROA Return on Avg Tangible Common Equi
Slide 16: Net Interest Margin
Net Interest Margin Net Interest Margin (FTE) 3Q18 NIM (FTE) Progression 4.15% 4.12% 2Q18 4.15% Asset yields 0.09% 0.29% 0.29% 3.82% 3.84% Asset mix -0.01% 0.15% 0.15% 0.13% Loan fees -0.02% 0.24% 3.57% Funding costs -0.02% 0.14% Funding mix -0.05% 3.69% 3.71% 3.70% 3.58% Purchase accounting 0.00% 3
Slide 17: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Portfolio – Floating Loan Mix (1) . Asset sensitive position 63% 65% 67% . 55% 55% Majority of loans are variable rate: . $4,916 $4,910 $4,099 55% reprice <=3 months $3,783 $3,908 . Securities portfolio duration – 3.5 years . +100 scenario 3.8 years 3Q17 4Q17 1Q18 2Q18
Slide 18: Average Balance Sheet
Average Balance Sheet Average Loans Average Deposits 5.49% 5.53% 0.61% 0.60% 0.59% 5.05% 0.54% 0.57% 4.90% 4.71% $8,933 $8,849 $5,911 $5,960 $6,018 $10,383 $9,888 $6,680 $6,840 $6,903 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Gross Loans Loan Yield (Gross) Total Deposits Cost of Deposits Ave
Slide 19: Loan Portfolio
Loan Portfolio Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) Total $8.8 billion ICRE $36.6 $1,074 Commercial -$13.1 12% $2,747 Small Business Banking -$75.2 $971 31% 11% Consumer -$19.8 $921 11% Mortgage $13.5 Commercial Finance $40.7 $1,360 $1,774 15% 20% 1 Other -$19.9 ICRE Commercial Sm
Slide 20: Loan Portfolio
Loan Portfolio C&I Loans by Industry 1 CRE Loans by Collateral 2 C&I Loans: $3.7B CRE Loans: $3.2B Real Estate 7% Wholesale Trade Office Manufacturing 6% Hotel/Motel 13% 12% 10% Agriculture 6% Retail Strip Center Finance and 15% 8% Nursing/Assisted Insurance Living 15% Health Care 6% 6% Professional
Slide 21: Deposits
Deposits Deposit Product Mix (Avg) 3Q18 Average Deposit Progression Total $9.9 billion Balance as of June 30 $ 10,382,635 $ 1,408 14% $ 2,389 Impact from: 24% $ 1,245 Branch divestiture (86,335) 13% $ 576 Brokered CD's (155,326) 6% $ 906 $ 1,058 9% Public funds (163,126) 11% $ 381 $ 1,925 Total (404
Slide 22: Investment Portfolio
Investment Portfolio . Total EOP investments of approximately $3.2 billion . Investment portfolio / total assets = approximately 23% . Portfolio duration = estimated 3.5 years Portfolio Composition Portfolio Quality Corporate Debt obligations of U.S. securities Government Agency AA+ Regulatory stock
Slide 23: Noninterest Income and Noninterest Expense
Noninterest Income and Noninterest Expense Noninterest Income Noninterest Expense 1 Total $28.7 million Total $85.4 million $4,611 $19,224 16% 22% $1,739 6% $10,316 36% $4,502 $3,029 5% $50,852 11% $10,837 60% 13% $5,261 $3,728 18% 13% Salaries and benefits Occupancy and equipment Service Charges We
Slide 24: Asset Quality
Asset Quality Classified Assets / Total Assets Nonperforming Assets / Total Assets 1.08% 0.98% 0.98% 1.00% 1.00% 0.60% 0.50% 0.52% 0.46% 0.47% $139.3 $138.9 $64.2 $64.6 $52.9 $44.4 $46.3 $94.3 $87.3 $87.6 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Classified Assets Classified Assets / Total A
Slide 25: Capital
Capital Tangible Book Value Per Share Total Capital Ratio $11.75 $11.62 $11.36 $11.25 13.77% $11.01 13.36% 13.17% 12.50% 12.98% 13.07% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Tangible Book Value per Share Total Capital Ratio Target Tier 1 Common Equity Ratio Tangible Common Equity Ratio 11
Slide 26: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 26
Slide 27: Appendix: Executive Chairman & CEO Roles
Appendix: Executive Chairman & CEO Roles . Claude Davis has assumed the role of Executive Chairman of the board . Three-year term, then transitions to Non-executive Chairman . Chairman & Archie Brown, Jr. serving as President & CEO, member of the board CEO Roles . Jointly leading the company, partne
Slide 28: Appendix: Company Overview Executive Team
Appendix: Company Overview Executive Team Line of Business Leaders . . Commercial Finance – Rick Dennen Chief Banking Officer – Anthony Stollings . . Commercial – Brad Ringwald Chief Financial Officer – Jamie Anderson . . Investment Commercial Real Estate – Paul Silva Chief Administrative Officer –
Slide 29: Appendix: Our Markets
Appendix: Our Markets . . Greater Cincinnati Indianapolis . . Loans $2.9 billion Loans $1.1 billion . . Deposits $3.0 billion Deposits $0.7 billion . . Deposit Market Share #4 (3.2%) Deposit Market Share #14 (1.6%) . . Banking Centers 54 Banking Centers 10 . . Fortune 500 Companies 9 Fortune 500 Com
Slide 30: Appendix: Non-GAAP Measures
Appendix: Non-GAAP Measures The Company’s earnings release and accompanying presentation contain 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 consi
Slide 31: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Net interest income and net interest margin - fully tax equivalent Three months ended Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, 2018 2018 2018 2017 2017 Net interest income $ 123,485 $ 123,979 $ 75,812 $ 75,614 $ 70,479 Tax equivalent adjustment 1,567 1,4
Slide 32: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Additional non-GAAP ratios Three months ended YTD Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30, (Dollars in thousands, except per share data) 2018 2018 2018 2017 2017 2018 2017 Net income (a) $ 50,657 $ 36,418 $ 30,506 $ 24,811 $ 24,826 $ 11
Slide 33: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Additional non-GAAP measures 3Q18 2Q18 1Q18 4Q17 3Q17 (Dollars in thousands, except per share data) As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) $ 123,485 $ 123,485 $ 123,979
Slide 34: ST repre tena FF oe (3 FOC
ST repre tena FF oe (3 FOC
First Financial Bancorp — Q3 2018 Earnings Presentation on 6ix