First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Presentation (February 2006)
57 slides from First Financial Bancorp's investor presentation, Feb 28, 2006
Slide 1: First Financial Bancorp
EXHIBIT 99.1 First Financial Bancorp
Slide 2: Forward Looking Statement
Forward Looking Statement Certain statements which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the Act). In addition, certain statements in future filings by First Financial with the Securities and Ex
Slide 3: Corporate Overview
Corporate Overview Ticker - FFBC (Nasdaq) Market Value - $663 million (as of 2/24/05) Total Assets $3.6 billion
Slide 4: Background
Background
Slide 5: Corporate Overview
Corporate Overview Headquartered in Hamilton, Ohio, First Financial Bancorp is a $3.6 billion publicly owned bank holding company. Founded in 1983, First Financial now operates 2 lines of business with 105 retail banking centers in Ohio, Indiana, Michigan, and Kentucky. The Bancorp serves some 500,0
Slide 6: Lines of Business
Lines of Business Banking Segment Single Charter - First Financial Bank, N.A. First Financial Bank Sand Ridge Bank Community First Bank & Trust Wealth Management Segment Trust and investment management services $2.2 billion in assets under management Insurance brokerage $3 million in revenue
Slide 7: Market Overview
Market Overview
Slide 8: Strategy Update
Strategy Update
Slide 9: Strategic Plan
Strategic Plan New CEO in October 2004 / New Plan announced in March 2005 Focus Community Banking People led sales culture Growth in Banking, Wealth Management Commitment to superior performance - better, faster, more efficient 2005 and 2006 years of transition
Slide 10: Strategic Accomplishments
Strategic Accomplishments Restructuring Organization Charter consolidation Sale of Fidelity Federal Savings Bank New markets - Cincinnati, Dayton Branch network Leadership New, focused management team in place Actively recruiting market leaders Balance Sheet Indirect lending - exit Mortgage lending
Slide 11: Strategic Plan - Timeline
Strategic Plan - Timeline September ons December 208 Fit sale March 2005 duly 2008 February 2008 Novembor 206 statogiePlan—_hndect Nowambar2005/ alae sheet Data Processing ‘Announced Announcement ‘Mortgage Sale Restructuring Contract Expiration SS! Branding, Branch Plan, and Tender Offer Performance
Slide 12: Strategic Plan - Operations
Strategic Plan - Operations One-time charges associated with consolidation - $3.8 million $2.2 million for staff reductions $0.6 million for consulting and professional services $1.0 million in other Charges as of 2005 - $3.2 million $1,623,000 for staff reductions $920,000 for consulting and profes
Slide 13: Branch Plan
Branch Plan
Slide 14: Branch Deposits (FDIC June 2004)
Branch Deposits (FDIC June 2004) Branch Plan will take into account both financial performance and strategic fit.
Slide 15: 2006 Goals
2006 Goals
Slide 16: Goals
Goals Top-quartile performance for all stakeholders in the long term Sustained and consistent excellence Commitment to growth Effective management of all risks
Slide 17: Goals
Goals Target ratios are long-term objectives and approximate top- quartile peer performance.
Slide 18: Capital Ratios
Capital Ratios 2005 Target Tangible Equity to Assets 7.36% 6.75% - 7.25% Leverage 812% 8.00% - 850% Total Risk-based Capital 12.78% 12.75% - 13.25% 18
Slide 19: Balance Sheet & Margin
Balance Sheet & Margin
Slide 20: Balance Sheet Restructure
Balance Sheet Restructure Investments - sold $179 million yielding 3.36% OTTI portfolio of $200 million as of 12/31/2005 Impairment charge in 4Q 2005 of $6.5 million or $0.10 per share Additional loss in 1Q 2006 of $0.5 million or $0.01 per share FHLB Borrowings - paid off $184 million at 5.45% Prep
Slide 21: Balance Sheet Restructure
Balance Sheet Restructure Annualized EPS improvement $0.06 per share
Slide 22: Balance Sheet Restructure - Earning Assets Overview
Balance Sheet Restructure COMMERCIAL COMMERCIAL 631651 REAL ESTATE - CONSTRUCTION 87576 REAL ESTATE - MORTGAGE 1534656 INSTALLMENT 589817 CREDIT CARD 20353 LEASE FINANCING 4305 Commercial Loans Consumer Loans Leasing Retail Mortgages Investments FFBC 41.5 17.45 0.012 24.62 16.31 Commercial Loans Con
Slide 23: Balance Sheet Restructure - Liability Overview
Balance Sheet Restructure COMMERCIAL COMMERCIAL 631651 REAL ESTATE - CONSTRUCTION 87576 REAL ESTATE - MORTGAGE 1534656 INSTALLMENT 589817 CREDIT CARD 20353 LEASE FINANCING 4305 Non-Interest Bearing Deposits Interest Bearing Deposit Time Deposits Short-term Debt FHLB Advances Trust Preferred FFBC 13.
Slide 24: Interest Rate Sensitivity
Interest Rate Sensitivity Assumptions: Sensitivity as of 12/31/05 Prepayment speeds applied to fixed investment securities, loans and retail mortgage ARMS Prepaid cash flows are reinvested into like product Deposit rate sensitivity assumptions from a third party deposit study
Slide 25: Loan Mix (Regulatory)
Loan Mix (Regulatory) COMMERCIAL COMMERCIAL 631651 REAL ESTATE - CONSTRUCTION 87576 REAL ESTATE - MORTGAGE 1534656 INSTALLMENT 589817 CREDIT CARD 20353 LEASE FINANCING 4305 1-4 Family RE Commercial RE Farmland RE Commercial & Industrial Loans to individuals Agriculture Other East 25 42 1 17 5 1 10 R
Slide 26: Mortgage Loan Strategy
Mortgage Loan Strategy Assumes current rates and prepayment speeds with no change in interest rates or prepay speeds. Assuming the current rate of runoff and no change in loan portfolio total the peer target is reached in 2010. 1-4 Family (excluding HELOCs)
Slide 27: Proforma Indirect Installment Loans
Proforma Indirect Installment Loans As of Q4-05: Weighted Avg Coupon: 6.33% Amortization of Dealer Reserve: -0.68% Net Yield: 5.65% Assumes current rates and prepayment speeds with no change in interest rates or prepay speeds
Slide 28: Shares Repurchased
Shares Repurchased (000's) 2000 2001 2002 2003 2004 2005 FFBC 987.6 1847.5 1839.7 1230.7 408.6 4166 Modified Dutch Tender Offer repurchase of 3,250,000 shares in December 2005 7,373,105 shares available for repurchase under pre-approved plans 9.5% of total shares outstanding
Slide 29: Dividend History (1Q95 - 4Q05)
Dividend History (1Q95 - 4Q05) 1Q95 2Q95 3Q95 4Q95 1Q96 2Q96 3Q96 4Q96 1Q97 2Q97 3Q97 4Q97 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 FFBC 0.0846 0.0846 0.0846 0.0976 0.0976 0.0976 0.
Slide 30: Efficiency
Efficiency
Slide 31: Efficiency Ratio
Efficiency 2000 2001 2002 2003 2004 2005 Long-term Target FFBC 0.5179 0.5305 0.5875 0.6263 0.6534 0.7369 0.55 PEER 0.5636 0.5736 0.5833 0.5816 0.5979 0.6892 14% change equals an opportunity of $27 million or $0.44 per share Plans to address both revenue and expense components Peer median = 59% Peer
Slide 32: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 Y 2005 Y GAAP 0.6558 0.6564 0.659 0.7009 0.6764 0.689 0.7367 0.8655 0.6679 0.7369 Adjusted - Excludes Non-recurring Items 0.6606 0.6623 0.6675 0.6705 0.679 0.6812 0.6923 0.707 0.6652 0.6897
Slide 33: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 Y 2005 Y GAAP 0.0362 0.0359 0.036 0.0356 0.0353 0.0353 0.0346 0.0344 0.0359 0.0349 Peer Median 0.035 0.0341 0.0354 0.0355 0.035 0.035 0.0347 0.035
Slide 34: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 Y 2005 Y GAAP 0.0147 0.0151 0.0162 0.015 0.0156 0.0154 0.0146 0.0101 0.0153 0.014 Adjusted - Excludes Non-recurring Items 0.0144 0.0147 0.0152 0.0147 0.0154 0.015 0.0161 0.0161 0.0147 0.0156 Peer Median 0.0118 0.0127 0.0114 0.0116 0.011
Slide 35: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 Y 2005 Y GAAP 0.0334 0.0335 0.0344 0.0354 0.0344 0.0349 0.0363 0.0385 0.0342 0.036 Adjusted - Excludes Non-recurring Items 0.0334 0.0335 0.0341 0.0337 0.0344 0.0342 0.0351 0.0357 0.0337 0.0349 Peer Median 0.0296 0.0291 0.0286 0.0294 0.0
Slide 36: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 FFBC 12758 12913 13284 13260 13225 12948 13337 13265 Hiring of Market Presidents and Commercial Lenders 16 commercial bankers 7 wealth management
Slide 37: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 FFBC 1610 1614 1578 1571 1548 1519 1434 1460
Slide 38: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 Y 2005 Y FFBC 31.7 32 33.67 33.76 34.17 34.1 37.2 36.34 33.24 36.15 8.8% increase Heritage Merger Staff Reductions Consolidation Staff Reductions & Hiring of Sales Staff
Slide 39: Efficiency Performance Improvement Plan
Efficiency Performance Improvement Plan Sales performance and growth Increased sales staff Key to long-term success Cost reduction plan Right-size processes to match our needs All functional areas will be reviewed Dedicated senior manager to lead project
Slide 40: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 Y 2005 Y GAAP 0.2896 0.2965 0.3104 0.297 0.3067 0.3044 0.2971 0.227 0.2985 0.286 Adjusted - Excludes Non-recurring Items 0.2844 0.2902 0.2965 0.2923 0.3041 0.2983 0.3173 0.3192 0.2909 0.3097 Peer average approximately 25% over comparabl
Slide 41: Financial Overview
Financial Overview 4
Slide 42: Financial Performance
Financial Performance GAAP As Reported 2004 2005 ROE 11.21% 10.40% ROA 1.05% 1.00% Bficiency Ratio 6.79% 73.69% 42
Slide 43: Financial Performance
Financial Performance Adjusted for non-recurring items: restructuring, effects of asset and affiliate sales, effects of bankruptcy law change Adjustments made assuming a 35% tax rate
Slide 44: Financial Performance
Financial Performance 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 EPS GAAP 0.23 0.24 0.25 0.23 0.25 0.23 0.33 0.07 EPS - Adjusted to Exclude Non-Recurring Items 0.22 0.23 0.24 0.25 0.24 0.23 0.22 0.21 Proforma DTO 0.23
Slide 45: Credit Quality
Credit Quality Remains within a range of acceptability Will continue to actively manage New processes to ensure quality of new loans and manage existing problem credits
Slide 46: Management Team
Management Team 46
Slide 47: Management Team - Claude E. Davis
Management Team Claude E. Davis, President & CEO - 45 Claude E. Davis joined First Financial as president, chief executive officer, and a member of the board of directors on October 1, 2004. Mr. Davis also serves on the board of directors of First Financial Bank, where he is also chairman of the boa
Slide 48: Management Team - C. Douglas Lefferson
Management Team C. Douglas Lefferson, Executive Vice President & COO - 41 C. Douglas Lefferson became executive vice president and chief operating officer of First Financial effective April 1, 2005. Prior to that, he was executive vice president and chief financial officer, since December 13, 2004,
Slide 49: Management Team - J. Franklin Hall
Management Team J. Franklin Hall, Senior Vice President & CFO - 37 J. Franklin Hall became Senior Vice President and Chief Financial Officer of First Financial effective April 1, 2005. Prior to that, he had served as First Vice President, Controller, and Director of Finance for First Financial effec
Slide 50: Management Team - Gregory A. Gehlmann
Management Team Gregory A. Gehlmann, Senior Vice President & General Counsel - 44 Gregory A. Gehlmann joined First Financial in June of 2005 as senior vice president and general counsel. Prior to joining First Financial, Gehlmann practiced law for 16 years in Washington, D.C. From March 2000 to June
Slide 51: Management Team - Sam Munafo
Management Team Sam Munafo, Executive Vice President of Banking Markets - 55 Sam Munafo was named executive vice president with responsibility for all banking markets in December of 2005. He served as president and chief executive officer of Community First Bank & Trust from 2001 until March of 2005
Slide 52: Management Team - Mark W. Immelt
Management Team Mark W. Immelt, Executive Vice President of Wealth Management - 60 Mark W. Immelt became Executive Vice President of Wealth-Management of First Financial on March 14, 2005. Previously, he had served as president and chief executive officer of First Financial Bank since December of 19
Slide 53: Management Team - David S. Harvey
Management Team David S. Harvey, Executive Vice President & Chief Credit Officer - 44 David S. Harvey was named executive vice president and chief credit officer for First Financial in December of 2005. Previously, he was president of Sand Ridge Bank, a post he took in 2001. Harvey joined Sand Ridge
Slide 54: Management Team - John Hoying
Management Team John Hoying, Senior Vice President of Retail Credit and Product Management - 57 John Hoying took on the responsibility of senior vice president, retail credit and product management for First Financial in 2006. He joined Community First Bank and Trust in July of 2001. He was an execu
Slide 55: Management Team - Jill Wyman
Management Team Jill Wyman, Senior Vice President and Director of Sales - 44 Jill Wyman became First Financial's senior vice president and director of sales in 2005. She joined the company in 2003 as vice president and sales director. Prior to joining First Financial, she was general manager of the
Slide 56: Management Team - Richard Barbercheck
Management Team Richard Barbercheck, Senior Vice President & Chief Risk Officer - 47 Richard Barbercheck joined First Financial in 2005 and took on responsibility for the risk management function which includes commercial and consumer credit, regulatory and compliance, operational and market risk. B
Slide 57: First Financial Bancorp
First Financial Bancorp
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