First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Presentation (September 2016)
33 slides from First Financial Bancorp's investor presentation, Sep 6, 2016
Slide 1: First Financial
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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: Presentation Contents
3 About First Financial Bancorp Strategic Direction Recent Financial Results Presentation Contents
Slide 4: Company Overview
4 Company Overview NASDAQ: FFBC Overview Founded: 1863 Headquarters: Cincinnati, Ohio Banking Centers: 101 Assets: $8.3 billion Loans: $5.7 billion Deposits: $6.1 billion Wealth Mgmt: $2.4 billion AUM Lines of Business Commercial / Private Banking C&I, I-CRE, ABL, Equipment Finance, Treasury, Wealth
Slide 5: Our Markets
Central OH Loans $0.9 billion Loan Growth (Y-o-Y) 32.7% Deposits $0.4 billion Deposit Market Share #14 (0.9%) Banking Centers 6 Fortune 500 Companies 4 5 Our Markets Indianapolis Loans $0.5 billion Loan Growth (Y-o-Y) 34.9% Deposits $0.5 billion Deposit Market Share #13 (1.2%) Banking Centers 8 Fort
Slide 6: Through the Cycle
Proven Acquirer Two FDIC-assisted acquisitions totaling $2.5 billion in assets (2009) Two branch acquisitions of 38 offices in Indiana and Ohio (2011) Three banks in Columbus, Ohio totaling $727 million in assets (2014) Oak Street Funding, specialty lender focused on the insurance industry, $243 mil
Slide 7: Investments in our Business
Product expansions Specialty lending (~ $1 billion, excluding Oak Street) Mobile banking & other technology enhancements for clients Re-entry into mortgage business (2010) 2015 originations of $320 million Wealth infrastructure improvements Investment model Real estate management, tax & insurance ou
Slide 8: Invest with First Financial
Proven & sustainable business model Well managed through the cycle Conservative operating philosophy Consistent profitability Robust capital management Prudent steward of shareholders’ capital Strong asset quality Well defined M&A strategy Selective markets, products & asset diversification Direct l
Slide 9: Total Shareholder Return
9 1 – includes dividend reinvestment 2 – simple average - assumes equal weight 3 – 2016 YTD through 08/29/2016 Total Shareholder Return 1 Company Ticker 2008-2Q16 2015 2016 YTD (3) First Financial FFBC 151.34% 0.68% 23.01% KBW Regional Bank Index KRX 29.21% 5.99% 8.10% NASDAQ Composite CCMP 102.01%
Slide 10: Strategic Direction
10 About First Financial Bancorp Strategic Direction Recent Financial Results
Slide 11: Strategic Overview
11 Operational Excellence • Focus on cost, efficiency & volume Client Intimacy • Strong client focus • Relationship driven Product Leadership • Develop new products, new markets & new techniques What does First Financial stand for? Strategic Overview
Slide 12: Our Strategy
Our strategy is to be the Premier Business Bank in the markets we serve “Bank the business, bank the owner & bank the employees.” Rationale: Our value proposition – relationship banking & sophisticated solutions – resonates with and is desired by small / mid-size businesses Alignment with our compet
Slide 13: Connecting Strategy to Execution
13 Connecting Strategy to Execution 13
Slide 14: Strategic Priorities
14 Strategic Priorities Deliver top quartile shareholder returns Continue to invest in innovative solutions that enable our clients to bank with us on their terms Promote leadership & development within our communities Achieve best-in-class compliance & risk management programs Remain vigilant in ou
Slide 15: Recent Financial Results
15 About First Financial Bancorp Strategic Direction Recent Financial Results
Slide 16: 2Q 2016 Highlights
16 2Q 2016 Highlights – 103rd Consecutive Quarter of Profitability Total assets increased $116.5 million, to $8.3 billion, compared to the linked quarter. EOP loans increased $196.6 million, or 14.4% annualized, compared to the linked quarter. EOP deposits decreased $57.2 million, or 3.7% annualized
Slide 17: Strategy & Outlook
17 Strategy & Outlook Focus remains on organic growth and executing our core strategy: 1. Growing loans at risk-appropriate returns Strong organic growth opportunities resulting from the mix of markets, products & businesses built over the last five years Full year 2016 loan growth trending toward h
Slide 18: Profitability
18 Profitability Net Income & EPS Return on Average Assets Return on Tangible Common Equity $22.6 $19.8 $19.8 $18.7 $18.9 $0.36 $0.32 $0.32 $0.30 $0.31 2Q161Q164Q153Q152Q15 Net Income (GAAP) EPS (GAAP) All dollars shown in millions $8,204 $8,119 $7,950 $7,611 $7,244 1.11% 0.98% 0.99% 0.97% 1.05% 2Q1
Slide 19: Net Income
19 Net Income Reflects impact to net income from items that do not occur on a regular basis Earnings per Earnings per (Dollars in thousands) Earnings share - diluted Earnings share - diluted GAAP net income 22,568$ 0.36$ 19,814$ 0.32$ Less: noninterest income adjustments 1 (2,164) (24) Plus: noninte
Slide 20: Loan Portfolio
20 Loan Portfolio Loan Product Mix (EOP) Net Loan Change (Linked Quarter) $48.9 $9.6 $92.0 $33.5 $6.8 $5.8 C&I - Commercial & Leasing C&I - Owner Occupied CRE Investor CRE Construction Installment and Credit Card Resi. Mtg. and Home Equity 33% 34% 33% 33% 29% 14% 14% 15% 15% 16% 28% 27% 27% 27% 28%
Slide 21: Loan Portfolio by Geography
21 Loan Portfolio Loan Portfolio By Geography 1 Average Loan Size & Rate 2 Nationwide Lending Platforms 1 Includes loans held for sale. Excludes purchase accounting loan marks. 2 Average loan balances in $000s. 3 Includes Oak Street, Franchise, shared national credits & other loans outside Ohio, Ind
Slide 22: C&I and CRE Loans
22 Loan Portfolio C&I Loans By Industry 1 CRE Loans By Collateral 2 1 Industry types included in Other representing greater than 1% of total C&I loans include Retail Trade, Health Care, Public Administration, Waste Management, and Education. 2 Collateral types included in Other representing greater
Slide 23: Investment Portfolio
23 Investment Portfolio Total EOP investments of $1.84 billion Investment Portfolio / Total Assets = 22.1% Effective yield earned during second quarter = 2.54% Portfolio duration = 2.5 years Portfolio Composition Portfolio Quality Agency, 67.7% AAA, 14.5% AA+, 2.5% AA, 2.5% AA-, 1.7% BBB+, 1.1% BBB,
Slide 24: Asset Quality
24 Asset Quality Non-Performing Assets / Total Assets Classified Assets / Total Assets Allowance / Total Loans Net Charge Offs & Provision Expense $59.6 $64.1 $70.1 $71.1 $76.2 0.72% 0.78% 0.86% 0.90% 1.03% 2Q161Q164Q153Q152Q15 NPAs NPAs / Total Assets $56.7 $53.7 $53.4 $53.3 $52.9 0.99% 0.98% 0.99%
Slide 25: Net Interest Income / Net Interest Margin
25 Net Interest Income / Net Interest Margin Gross loans include loans held for sale and FDIC indemnification asset All dollars shown in millions Average Deposits Net Interest Income Average Securities Average Loans $1,441 $1,387 $1,402 $1,344 $1,325 $1,483 $1,392 $1,424 $1,231 $1,220 $2,042 $1,938
Slide 26: Interest Rate Sensitivity
26 Interest Rate Sensitivity Loan Portfolio – Floating Loan Growth (1) Sensitivity Trend (Up100, Up200) (3) 48% Y-o-Y growth in floating rate lending (1) 34% Y-o-Y growth in client derivatives (2) % of loans repricing: <=3 months 56% <1 year 59% Securities portfolio duration – 2.5 years Non-maturity
Slide 27: Non-Interest Income
27 Non-Interest Income Non-Interest Income 2Q16 Highlights * Includes net gain on sale of investment securities and other noninterest income. All dollars shown in millions Total non-interest income increased $4.7 million, or 30.2% Bankcard income increased $0.2 million or 8.6% Client derivative inco
Slide 28: Non-Interest Expense
28 Non-Interest Expense Noninterest Expense 2Q16 Highlights Efficiency Ratio $49.4 $50.7 $51.3 $53.0 $48.8 56.6% 61.8% 62.6% 63.5% 60.9% 2Q161Q164Q153Q152Q15 NIE (GAAP) Efficiency Ratio (GAAP) 60% 58% 58% 52% 56% 40% 42% 42% 48% 44% $49.4 $50.7 $51.3 $53.0 $48.8 1,403 1,390 1,400 1,394 1,366 2Q161Q1
Slide 29: Capital
29 Capital Tier 1 Common Equity Tangible Book Value Total Capital Tangible Common Equity All capital numbers are considered preliminary All dollars shown in millions $635.5 $615.1 $597.5 $601.3 $656.9 $10.26 $9.94 $9.69 $9.74 $10.65 2Q161Q164Q153Q152Q15 Tangible Book Value Tangible Book Value per Sh
Slide 30: Appendix: Non-GAAP to GAAP Reconciliation
30 Appendix: Non-GAAP to GAAP Reconciliation Net interest income and net interest margin - fully tax equivalent June 30, Mar. 31, Dec. 31, Sep. 30, June 30, June 30, June 30, 2016 2016 2015 2015 2015 2016 2015 Net interest income $67,132 $66,555 $66,083 $63,159 $58,674 $133,687 $117,260 Tax equivale
Slide 31: Appendix: Non-GAAP to GAAP Reconciliation
31 Appendix: Non-GAAP to GAAP Reconciliation Allowance and loan marks, net of the indemnification asset as a % of loans June 30, Mar. 31, Dec. 31, Sep. 30, June 30, 2016 2016 2015 2015 2015 ALLL $56,708 $53,732 $53,398 $53,332 $52,876 Loan Marks 18,644 22,022 24,258 26,948 29,428 ALLL + Marks 75,352
Slide 32: Appendix: Non-GAAP to GAAP Reconciliation
32 Appendix: Non-GAAP to GAAP Reconciliation Additional non-GAAP ratios June 30, Mar. 31, Dec. 31, Sep. 30, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2016 2016 2015 2015 2015 2016 2015 Net income (a) $22,568 $19,814 $19,820 $18,673 $18,949 $42,382 $36,570 Average total
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