First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q1 2014 Earnings Presentation
27 slides from First Financial Bancorp's earnings presentation, May 14, 2014
Slide 1: First Financial Bancorp Investor Presentation First Quarter 2014
First Financial Bancorp Investor Presentation First Quarter 2014 EXHIBIT 99.1
Slide 2: Forward-looking statements
2 Certain statements contained in this release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income
Slide 3: Focused Business Strategy
3 Focused Business Strategy Client-intimate strategy focused on long-term, profitable relationships with clients Strong sales culture across all business lines Lines of business Commercial Consumer Wealth Management Mortgage Target clients – individuals and small / mid-size businesses located in-mar
Slide 4: Credit Product Diversity
4 Credit Product Diversity During the first quarter, the Company’s comprehensive set of credit products produced solid loan growth driven though multiple channels led by C&I / owner-occupied CRE lending, franchise finance and investment CRE Category As of Percent As of Percent As of Percent (Dollars
Slide 5: First Quarter 2014 Financial Highlights
5 First Quarter 2014 Financial Highlights Quarterly net income of $15.1 million, or $0.26 per diluted common share Diluted earnings per share of $0.28 adjusted for the impact of non-operating items Continued solid performance Return on average assets of 1.02% adjusted for non-operating items Return
Slide 6: Adjusted Pre-Tax, Pre-Provision Income Trend
6 Adjusted Pre-Tax, Pre-Provision Income Trend Adjusted pre-tax, pre-provision (“PTPP”) income represents income before taxes plus provision for all loans less FDIC loss sharing income and accelerated discount adjusted for significant non- operating and non-recurring items First quarter adjusted PTP
Slide 7: Components of Net Interest Income
7 Components of Net Interest Income Net interest margin decreased 4 bps during the first quarter to 3.82% (1) Quarterly average balance of covered loans declined 11.3% and average balance of uncovered loans increased 2.5% Quarterly average investment balances increased 9.3% and the portfolio yield i
Slide 8: Loan Composition
8 Loan Composition Total Gross Loans – $4.0 billion As of March 31, 2014 (Dollars in millions) Covered loans likely to retain – performing credits both in- and out-of-market Expected to retain past the expiration of applicable loss sharing agreements with the FDIC Covered loans likely to exit – prim
Slide 9: Loan Composition
9 Loan Composition Total uncovered loans increased $108.6 million, or 12.6% on an annualized basis, compared to the linked quarter Growth driven by performance in the C&I / owner-occupied CRE, franchise and investment CRE Uncovered loan growth has exceeded covered loan decline for five of the past s
Slide 10: Commercial Lending
10 Commercial Lending C&I / Owner Occupied CRE Investment Real Estate Target loan size is $1 million to $15 million, with flexibility to increase based on relationship criteria Increased focus on middle market business clients (generally up to $30 million of revenue) Specialty finance designed to ex
Slide 11: Consumer Lending
11 Consumer Lending Consumer lending focused primarily on residential mortgage, home equity and credit cards Serving consumer households in Ohio, Indiana and Kentucky markets Mortgage loan originators located across footprint with concentrations in Cincinnati, Dayton, Fort Wayne and Indianapolis Tot
Slide 12: Delivery Channels and Product Innovation
12 Delivery Channels and Product Innovation Launched new online banking platform in 2012 Added mobile apps to accommodate client preferences with further enhancements such as Snap Deposit Client usage of mobile and online channels has increased significantly Deployed image-capture ATMs Sales centers
Slide 13: Capital Management
13 Capital Management Long-term capital return target to shareholders of 60% - 80% of earnings through combination of dividends and share repurchases Quarterly dividend of $0.15 per share Translates into yield of 3.8% compared to current peer median dividend yield of 2.5% Announced a share repurchas
Slide 14: Capitalization
14 Capitalization Primary component of capital is common equity Capitalization levels still remain high despite the strong return of capital to shareholders Long-term goal is to deploy capital above target levels though growth initiatives, including organic growth and acquisitions 10.38% 10.33% 10.4
Slide 15: Credit Quality (Excluding Covered Assets)
15 Credit Quality (Excluding Covered Assets) Classified assets have declined $27.0 million, or 20.7%, since the first quarter 2013 Continued problem asset resolution activity during the quarter Total nonperforming assets declined $11.0 million, 15.2% Total nonperforming loans declined $4.0 million,
Slide 16: Recent Transaction Summary
16 Recent Transaction Summary Since December 2013, First Financial announced the acquisitions of The First Bexley Bank, Insight Bank, and Guernsey Bancorp, all headquartered in the Columbus, OH market Entering the growth-oriented Columbus market through the acquisition of three highly successful and
Slide 17: Entrance to the Columbus, Ohio Market
17 Entrance to the Columbus, Ohio Market Third fastest growing metropolitan market in the Midwest Population of 1.9 million with projected growth of 4.3% through 2017 – highest in Ohio Diverse economy anchored by 15 Fortune 1000 companies Columbus MSA Market Highlights1 1 Source: the Columbus Chambe
Slide 18: Prior Acquisition History
18 Prior Acquisition History Supplements organic growth strategy through expansion in strategic markets Transactions met all internal criteria for acquisitions Loss sharing agreements provide significant protection on covered loans Peoples (FDIC) July 31, 2009 19 banking centers $521mm deposits $331
Slide 19: Franchise Highlights
19 Franchise Highlights 1. Strong operating fundamentals – 94 consecutive quarters of profitability 2. Investments to create long-term growth are producing results 3. Strong loan growth momentum driven by comprehensive portfolio of credit products 4. Well positioned in current markets and executing
Slide 20: Appendix First Quarter 2014
Appendix Investor Presentation First Quarter 2014
Slide 21: Adjusted Pre-Tax, Pre-Provision Income
21 Adjusted Pre-Tax, Pre-Provision Income For the three months ended March 31, December 31, September 30, June 30, March 31, (Dollars in thousands) 2014 2013 2013 2013 2013 Pre-tax, pre-provision income 1 21,660$ 1,947$ 23,707$ 23,794$ 23,324$ Less: accelerated discount on covered loans 1,015 1,572
Slide 22: Investment Portfolio
22 Investment Portfolio Investment portfolio represents 27.7% of total assets Yield earned on portfolio increased to 2.52% from 2.38% for the linked quarter As of March 31, 2014 Category Held-to- Available-for- Other Percent (Dollars in thousands) Maturity Sale Investments Total of Portfolio Debt ob
Slide 23: Deposit Composition
23 Deposit Composition Total deposits declined $17.1 million, or 0.4%, during the quarter Seasonal declines in commercial and public fund transaction balances were partially offset by increases in consumer balances The total cost of deposit funding during the quarter remained low at 28 bps Non-time
Slide 24: Funding Structure and Cost of Funds
24 Funding Structure and Cost of Funds Average Balances – Total Interest Bearing Liability Composition Average Balances – Deposit Composition Total Cost of Funds (1) Not included in cost of funds calculation Total Cost of Deposits Co s t of F u n d s 0.38% 0.35% 0.37% 0.37% 0.27% 0.24% 0.27% 0.28% 0
Slide 25: Covered Loan Activity
25 Covered Loan Activity Covered loans declined $48.5 million, or 10.6%, during the quarter The FDIC indemnification asset declined $6.1 million, or 13.5%, during the quarter to $39.0 million, or 9.5% of the balance of covered loans outstanding Successful execution of resolution strategies related t
Slide 26: Components of Covered Asset Credit Losses
26 Components of Covered Asset Credit Losses For the three months ended March 31, (Dollars in thousands) 2014 Description Net incremental impairment / (relief) for period ($8,328) Reduction / (increase) in expected cash flows related to certain loan pools net of prior period impairment relief / reca
Slide 27: First Financial Bancorp First Quarter 2014
First Financial Bancorp Investor Presentation First Quarter 2014
First Financial Bancorp — Q1 2014 Earnings Presentation on 6ix