First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Debt Investor Presentation (April 2020)
35 slides from First Financial Bancorp's debt investor presentation, Apr 24, 2020
Slide 1: Investor Presentation 1st Quarter 2020
Income Investor PresentationQuarter 2020
Slide 2: Forward Looking Statement Disclosure
Forward Looking Statement DisclosureCertain 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,” “expect
Slide 3: Forward Looking Statement Disclosure
Forward Looking Statement 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: Preliminary Term Sheet
Preliminary Term SheetIssuerFirst Financial Bancorp. (NASDAQ: FFBC)Security OfferedHolding Company Subordinated Debt Due 2030Security Rating(1)BBB by Kroll Bond Rating AgencyStructureFixed-to-Floating RateIssuance TypeSEC RegisteredTerm10 YearsCall Date5 YearsUse of ProceedsGeneral Corporate Purpose
Slide 5: Presentation Contents
Presentation ContentsAbout First Financial BancorpFinancial PerformanceAppendix5
Slide 6: Our Franchise
Our Franchise$15.1B in assets$9.3B/$10.6B loans / deposits$3.9B wealth management1.73% Adj. PTPP ROAA(1)NASDAQ: FFBCHeadquarters: Cincinnati, OhioFounded: 1863Banking Centers: 145Employees: 2,067Market Cap (3/31/20): $1.5B Dividend Yield (3/31/20): 6.2% TCE Ratio: 8.25%Lines of BusinessCommercial C&
Slide 7: Key Investment Highlights
Key Investment HighlightsProven & sustainable business model spanning 150+ years• Well managed through past credit cycles• Conservative operating philosophy• Consistent profitability – 118 consecutive quartersPremier Midwest franchise with top quartile performanceHigh quality balance sheet & robust
Slide 8: Complementary Market Centric Strategies
Complementary Market Centric StrategiesLoans $3.0B / Deposits $1.6B Loans $1.8B / Deposits $4.2B Loans $2.9B / Deposits $3.4B Loans $1.1B8Note: Loan and deposit balances exclude special assets, loan marks, other out of market and corporately held balances.
Slide 9: Go-to-Market Strategies
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Slide 10: COVID-19 Response: Associates and Consumers
Associates• More than half our associates are working from home.Up to four weeks of pandemic pay is available for associates who cannot work on-site or at home.Protocols have been implemented for cleaning and distancing at all worksites.Financialassistance,like payment deferrals,line of credit incre
Slide 11: Presentation Contents
Presentation ContentsAbout First Financial BancorpFinancial PerformanceAppendix11
Slide 12: 1Q 2020 Highlights
1Q 2020 Highlights118th Consecutive Quarter of ProfitabilityNet income = $28.6 million or $0.29 per diluted share. Adjusted1 net income = $30.7 million or $0.31 per diluted share1. 1ProfitabilityReturn on average assets = 0.79%. Adjustedreturn on average assets = 0.85%.Return on average shareholders
Slide 13: Consistent Profitability
Consistent ProfitabilityDiluted EPSReturn on Average Assets$0.48$0.58$0.56$0.521.38%1.63%1.54%1.41%$0.47$0.53$0.51$0.49$0.31$0.291.33%1.50%1.41%1.34%0.85%0.79%1Q192Q193Q194Q191Q201Q192Q193Q194Q19 11Q20Diluted EPS Adjusted EPS 1ROA Adjusted ROAReturn on Avg Tangible Common EquityEfficiency Ratio16.45
Slide 14: Diverse and Growing Fee Revenues
Diverse and Growing Fee RevenuesNoninterest Income 1Q20 HighlightsGains from sales of loans $2,831 8%Total $35.4 million $10.0 million of foreign exchange income; a $4.0 million, or 65.7%, increase from 4Q19Continued momentum with $3.1 million of client derivative feesRecord trust and wealth managem
Slide 15: Net Interest Margin
Net Interest MarginNet Interest Margin (FTE) Average Loans5.69%5.73%5.58%5.33%5.04%4.10%0.23%0.11%4.04%0.23%0.12%3.96%0.21%0.15%3.89%0.21%0.14%3.77%0.16%$8,7731Q19$8,8532Q19$9,0143Q19$9,1494Q19$9,2211Q203.76%1Q193.69%2Q193.60%3Q193.54%4Q190.10%3.51%1Q200.78%Gross Loans Loan Yield (Gross)1Average Dep
Slide 16: Attractive Deposit Portfolio
Attractive Deposit PortfolioDeposit Product Mix (Avg) 1Q20 Average Deposit ProgressionTotal $10.2 billionInterest‐bearing demandNoninterest‐bearing$26.9$22.0Brokered CDs $703 7%Savings Money Markets Retail CDs Brokered CDs‐$37.4‐$11.4$12.4$20.6Money Markets $1,744 17%Savings $893 9%Public Funds‐$21.
Slide 17: High Quality Loan Portfolio
High Quality Loan PortfolioLoan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter)Small Business Banking $1,063 11%Total $9.3 BillionFranchise $457 5%ICRE Commercial Small Business Banking Consumer Mortgage Oak Street Franchise Other‐$25.2‐$11.0‐$3.7$4.7$3.1$8.8$14.4$115.1Total growth/(decline): $10
Slide 18: Diversified & Granular Commercial Portfolios
Diversified & Granular Commercial PortfoliosC&I Loans by Industry 1 CRE Loans by Collateral 2C&I Loans: $3.6BCRE Loans: $3.7BAccommodation & Food Services 13%InsuranceOther 16%Real Estate 12%Manufacturing 12%Health Care 6% Retail TradeAgriculture 5%Other Services 5%Retail 23%Office 14%Residential, M
Slide 19: Sectors with Escalated Monitoring: Franchise Portfolio
Sectors with Escalated Monitoring: Franchise Portfolio$455 million in balances or 5% of total loans69% or $312 million of the portfolio has secured either a payment deferral through the FFB COVID-19 relief program or a PPP loan approval93% of portfolio was pass rated at 3/31 (pre- COVID-19)9 of top
Slide 20: Sectors with Escalated Monitoring: Hotel Portfolio
Sectors with Escalated Monitoring: Hotel Portfolio$401 million in balances or 4% of total loans96% or $387 million of the portfolio has secured either a payment deferral through the FFB COVID-19 relief program or a PPP loan approvalMajority concentrated in Midwest Metro markets reliant on business t
Slide 21: Sectors with Escalated Monitoring: Retail CRE Portfolio
Sectors with Escalated Monitoring: Retail CRE PortfolioState$846 million in balances or 9% of total loans$250$20030%25%52% or $437 million of the portfolio has secured either a payment deferral through the FFB COVID-19 relief program or a PPP loan approval$150$100$5020%15%10%5%100% of portfolio was
Slide 22: Strong Credit Quality & Disciplined Credit Risk Management
Strong Credit Quality & Highly Disciplined Credit Risk ManagementClassified Assets / Total AssetsNonperforming Assets / Total Assets1.01%01.02%$147.80.92%0.62%$89.30.83%50.60%$83.90.62%$90.20.56%$80.80.42%$61.60.48%$72.21Q192Q193Q194Q191Q201Q192Q193Q194Q191Q20Classified Assets Classified Assets / To
Slide 23: Current Expected Credit Losses (CECL) - Loans and Leases
Current Expected Credit Losses (CECL) - Loans and LeasesACL / Total Loans 1Q20 Highlights0.64%$56.71Q190.69%$61.52Q190.62%$56.63Q190.63%$57.74Q191.29%$119.21/1/20201.55%$143.91 1 1Q20Adoption impact$119.2 million, an increase of $61.5 million from 12/31/19Day 1 increase driven by acquired loans and
Slide 24: Ample Sources of Additional Liquidity
Ample Sources of Additional Liquidity Aided by Strong Risk ManagementInvestment Portfolio CompositionLiquidity SourcesNon‐Agency pass‐ through securities 3% Regulatory stock 5% Non‐Agency CMOsCorporate securities 2%Total: $3.2B Duration: ~3.1 YrsIn addition to deposits, First Financial has approxima
Slide 25: Solid Capital Base
Solid Capital BaseTier 1 Common Equity Ratio Tier 1 Capital Ratio12.03%12.00%11.52%11.30%11.27%12.43%12.40%11.91%11.69%11.66%7.00%8.50%1Q192Q193Q194Q191Q201Q192Q193Q194Q191Q20Tier 1 Common Equity Ratio Basel III minimumTier 1 Capital Ratio Basel III minimumTotal Capital Ratio Tangible Common Equity
Slide 26: Presentation Contents
Presentation ContentsAbout First Financial BancorpFinancial PerformanceAppendix26
Slide 27: Consolidated Financial Highlights
Consolidated Financial HighlightsYear Ended December 31, Quarter Ended, ($000 except per share data) 2015 2016 2017 2018 2019 3/31/20 Summary Balance Sheet: Total Assets $8,147,411 $8,437,967 $8,896,923 $13,986,660 $14,511,625 $15,057,567 Loans Held for Investment 5,388,760 5,757,482 6,013,183 8,824
Slide 28: Markets of Operation
Markets of Operation50% of deposits in Ohio / 44% in Indiana / 5% in Kentucky / 1% in IllinoisFFBC's Top 10 MSAsFFBC RankFFBC BranchesFFBC Deposits in Mkt. ($M)FFBC Mkt. Share (%)Mkt. Active BranchesMkt. Total Deposits ($M)Proj. Pop. Growth '20 - '25Current Median HHI ($)Proj. HHI Growth '20 - '25Ci
Slide 29: Kroll Ratings as of April 20, 2020
Kroll Ratings as of April 20, 2020FFBC’s Kroll ratings reflect an overall strong credit profileEntity Type Rating(1) OutlookFirst Financial Bancorp.Senior Unsecured Debt BBB+ Stable Subordinated Debt BBB Stable Short-Term Debt K2 N/AFirst Financial BankDeposit A- Stable Senior Unsecured Debt A- Stab
Slide 30: Historical Interest Coverage
Historical Interest Coverage(dollars in thousands) For the Twelve Months Ended Three Months Ended 12/31/16 12/31/17 12/31/18 12/31/19 3/31/20 3/31/20 PFDouble Leverage Investment in Bank Subsidiary $909,798 $970,290 $2,078,655 $2,272,991 $2,196,276 $2,196,276 Consolidated Equity 865,224 930,664 2,07
Slide 31: Non-GAAP Measures
Non-GAAP MeasuresThe 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 considered suppl
Slide 32: Net interest income and net interest margin - full tax equivalent
Net interest income and net interest mar in- full tax e uivalentThree months ended Mar. 31, Dec. 31, Sep. 30, June 30, Mar. 31, 2020 2019 2019 2019 2019Net interest income $ 114,282 $ 118,902 $ 121,535 $ 122,302 $ 121,515 Tax equivalent adjustment 1, 624 1,630 1,759 1,416 1, 523Net interest income -
Slide 33: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP ReconciliationAdditional non-GAAP ratiosThre e m onths ended Mar. 31, Dec. 31, Se p. 30, June 30, Mar. 31, (Dollars in thousands, ex ce pt per share data) 2020 2019 2019 2019 2019Net income (a)$ 28,628 $48,677 $50,856 $52,703 $45,839Average total shareholders' equity 2,209,733 2,245
Slide 34: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP ReconciliationAdditional non-GAAP measures1Q20 4Q193Q19 2Q19 1Q19(Dollars in thousands, except per share data)As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported AdjustedNet interest income (f)$ 114,282$ 114,282$ 118,902$ 118,902$ 121,535$
Slide 35: First Financial Bancorp contact details
first finandal bancorpF1rst Financial Bank First Financial CEonter 255 East Fifth Strli?et Suite 800 Clncinnati 0H 45202-4248
First Financial Bancorp — Debt Investor Presentation (April 2020) on 6ix