First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Day (August 2012)
12 slides from First Financial Bancorp's investor day presentation, Aug 15, 2012
Slide 1: Credit Management
Credit Management Richard Barbercheck EVP & Chief Credit Officer Investor Day August 15, 2012
Slide 2: Strategic Portfolio Management
Strategic Portfolio Management Credit management has responsibility for the Company’s entire portfolio Special asset officers directly manage assigned strategic loans as well as the covered – non-strategic portfolio Focus of metrics in this presentation are uncovered – strategic and credit managed p
Slide 3: Strong Credit Culture
Strong Credit Culture Credit culture established at the top Strategic approach to target client selection Well-defined, centralized credit policies Credit-inclusive product team structure New loan product assessments Sound underwriting practices Risk appropriate underwriting standards Responsive und
Slide 4: Strong Credit Culture
Strong Credit Culture Portfolio performance monitoring Segmented portfolio quality Concentration and stress testing Credit risk management reviews Regulatory and audit examinations Key Performance Indicators (“KPIs”) and Service Level Agreements (“SLA”) reviewed on a monthly basis Portfolio analysis
Slide 5: Client Focused Delivery System
Client Focused Delivery System Commercial Lending (>$1 million) Commercial Lending Centrally Market/LOB Client focused product design Origination Underwriting Specialized product teams Decisioning Hands-on relationship managers Management Collections Relationship-based client management
Slide 6: Credit Quality – Asset Quality Rating ("AQR")
Credit Quality – Asset Quality Rating (“AQR”) AQR as a % of Portfolio Risk Ratings 100% Monitored on all portfolios 80% 411 409 Model supported decisions 60% 406 402 Periodic reviews and refreshes applied 40% 401 Strong performance at 20% AQR <550 (88%) 0% SBSS >165 (90%) 2Q11 3Q11 4Q11 1Q12 2Q12 0-
Slide 7: Delinquency Trends
Delinquency Trends Delinquency trends and management Commercial – generally stable but subject to large dollar volatility Retail – stable with situational quarterly variances Business Banking – gradual and continued improvement; solid historical performance Franchise – significant improvement Busine
Slide 8: Classified Asset Trends
Classified Asset Trends Classified asset trends are positive Balance has declined for seven consecutive quarters Increasing reserve coverage Improvement in commercial product segments Classified Asset Ratios Classified Loans / Total Loans by Product 30% 25% 20% 32% 31% 30% 27% 27% 27% 15% 26% 26% 25
Slide 9: Nonperforming Asset Trends
Nonperforming Asset Trends Nonperforming assets Balance of nonaccrual loans relatively consistent over the last eight quarters Increase in TDRs driven by corrective actions and change in accounting guidance 50% of TDRs are accruing NPA Formation NPA Ratios Dollars in millions $213 $202 $202 2.9% 2.8
Slide 10: Net Charge-offs and Allowance for Loan Losses
Net Charge-offs and Allowance for Loan Losses Net charge-offs Allowance for loan losses Least loss analysis Reduction in allowance supports Large dollar volatility portfolio quality improvement Specific and general reserve levels provide appropriate coverage Net Charge-offs Allowance for Loan Losses
Slide 11: Credit Outlook
Credit Outlook What are the strategic credit targets for the Company? Long-Term Metrics Trendline 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 Target Average AQR 411 409 406 402 401 < 410 Total Delinquency % 0.96% 0.67% 0.68% 0.68% 0.85% < 0.55% Classified Assets (in millions) $184.8 $172.6 $162.4 $154.7 $145.6 NA
Slide 12: Biography
Biography Richard S. Barbercheck Executive Vice President & Chief Credit Officer Mr. Barbercheck joined First Financial in 2005 as Senior Vice President and Chief Risk Officer and was appointed to his current position in 2006. Mr. Barbercheck is responsible for the administration of the Company’s le