First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q3 2021 Earnings Presentation
38 slides from First Financial Bancorp's earnings presentation, Nov 9, 2021
Slide 1: Investor Presentation Third Quarter 2021
Investor Presentation Third Quarter 2021 Exhibit 99.1
Slide 2: Forward Looking Statements Disclosure
Forward Looking Statements Disclosure 2 Certain 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,” “ex
Slide 3: Forward Looking Statements Disclosure
Forward Looking Statements Disclosure 3 • 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: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 4
Slide 5: Our Franchise
Our Franchise 5 Commercial C&I, O-CRE, ABL, Equipment Finance, Treasury, Bannockburn Global Forex Retail Banking Consumer, Small Business Mortgage Banking NASDAQ: FFBC Headquarters: Cincinnati, Ohio Founded: 1863 Banking Centers: 139 Employees: 2,026 Market Cap (09/30/21): $2.2B Dividend Yield (09/3
Slide 6: Key Investment Highlights
Key Investment Highlights Proven & sustainable business model spanning 150+ years • Well managed through past credit cycles • Conservative operating philosophy • Consistent profitability – 124 consecutive quarters Premier Midwest franchise with top quartile performance High quality balance sheet & r
Slide 7: Complementary Market Centric Strategies
Complementary Market Centric Strategies Loans $3.1B / Deposits $4.9B Loans $1.4B / Deposits $4.3B Loans $3.6B / Deposits $3.2B 7 Note: Headquarters loan and deposit balances include special assets, loan marks, and other out of market and corporately held balances. Loan balances exclude PPP balances.
Slide 8: Diversified Lines of Business
The number of Trust & Investments and RPS relationships are updated as of 12/31/20. All other data as of 6/30/21. 8 Diversified Lines of Business
Slide 9: Revenue Growth Strategies
9 Revenue Growth Strategies Distribution Technology Talent Product & Pricing • Regional pricing strategy • Treasury Management product investments • Investments in Product Management DefinedModels • Community • Metro • Headquarters • National • Digital Enterprise Data Management • Investment in data
Slide 10: Digital + Technology Investments
10 Digital + Technology Investments enabling simple, consistent & seamless customer experience across channels & making it easy for associates to provide best-in-class customer service. “
Slide 11: Digital + Technology Investments
11 Enterprise workflow platform – bank operations 1Q 2019 Digital mortgage origination 3Q 2019 Office of Intelligent Automation 1Q 2020 Commercial online banking upgrade 3Q 2021 2Q 2019 Formed Enterprise Digital Solutions, hired Chief Digital Officer 4Q 2019 Digital commercial loan origination 1Q 20
Slide 12: Bank Transformation
12 Bank Transformation All dollars shown in millions Tech Spend consists of Data Processing, Communications & Equipment Depreciation expenses & departmental expenses (primarily salaries & benefits) for the Technology, Digital & Info Security teams. Tech Spend / Total Expense $59.2 $55.5 $48.6 $40.8
Slide 13: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 13
Slide 14: 3Q 2021 Results
3Q 2021 Results 124th Consecutive Quarter of Profitability 14 EOP assets decreased $81.3 million compared to the linked quarter to $16.0 billion EOP loans decreased $150.6 million compared to the linked quarter to $9.4 billion Average deposits decreased $43.8 million compared to the linked quarter t
Slide 15: 3Q 2021 Highlights
3Q 2021 Highlights Quarterly earnings driven by strong fee income and lower credit costs Adjusted1 earnings per share - $0.63 Adjusted1 return on assets - 1.49% Adjusted1 pre-tax, pre-provision return on assets - 1.54% Adjusted1 return on average tangible common equity - 19.00% Loan balances decline
Slide 16: Adjusted Net Income
Adjusted Net Income1 16 The table below lists certain adjustments that the Company believes are significant to understanding its quarterly performance. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition. See Appendix for Non
Slide 17: Profitability
Profitability 17 Return on Average Assets Return on Avg Tangible Common Equity Diluted EPS 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition. See Appendix for Non-GAAP reconciliation. Efficiency Ratio $0.63 $0.52$0.48$0.49
Slide 18: Net Interest Income & Margin
Net Interest Income & Margin 18 Net Interest Margin (FTE) 3Q21 NIM (FTE) Progression Net Interest Income All dollars shown in millions 2Q21 3.31% PPP and other loan fees 0.04% Asset yields/mix -0.02% Deposit/funding costs/mix 0.01% Day count -0.02% 3Q21 3.32% 2.87%2.89%2.96%2.91%2.97% 0.11%0.10% 0.0
Slide 19: Diverse and Growing Fee Revenues
Diverse and Growing Fee Revenues 19 Noninterest Income 3Q21 Highlights All dollars shown in thousands Total fee income 27.3% of net revenue Mortgage banking income of $8.6 million; increased $0.1 million, or 1.1%, from the linked quarter Foreign exchange income of $9.2 million; decreased $2.8 millio
Slide 20: Well Managed Expenses
Well Managed Expenses 20 Noninterest Expense 3Q21 Highlights All dollars shown in thousands Core expenses increased $1.8 million from the linked quarter, driven by incentive compensation tied to overall Company performance, marketing costs and professional services Operating adjustments include: $5.
Slide 21: Average Balance Sheet
Average Balance Sheet 21 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $9,503$9,832$9,952$10,128$10,253 4.03%3.98% 4.03% 4.18% 4.00% 3Q212Q211Q214Q203Q20 Gross Loans Loan Yield (Gross) 1 $12,667$12,711$12,372$11,925$11,563 0.
Slide 22: Attractive Deposit Portfolio
Attractive Deposit Portfolio 22 Deposit Product Mix (Avg) 3Q21 Average Deposit Progression All dollars shown in millions Total growth/(decline): ($43.8) million Interest-bearing demand $1,782 14% Noninterest- bearing $3,766 30% Savings $1,269 10% Money Markets $2,322 18% Retail CDs $1,002 8% Brokere
Slide 23: Loan Portfolio
Loan Portfolio 23 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) 1 Net of unearned fees of $7.8 million All dollars shown in millions Total growth/(decline): ($150.6 million) -$3.6 $96.9 $7.6 -$9.4 $12.7 -$29.4 -$225.4 ICRE Commercial & Small Business Banking Consumer Mortgage Oak Street Fr
Slide 24: Loan Concentrations
Loan Concentrations 24 C&I Loans by Industry CRE Loans by Collateral 1 Industry types included in Other representing greater than 1% of total C&I loans include Public Administration, Other Services, Agriculture, Arts & Recreation, and Waste Management. Includes owner-occupied CRE. 2 Collateral types
Slide 25: CARES Act Modifications as of 9/30/21
CARES Act Modifications as of 9/30/21 $101 million of total active modifications; 1% of total loans 100% of loan modifications making interest only payments $67 million, or 66%, of total deferrals are hotel loans All deferrals expected to expire by end of year No material credit issues among loans t
Slide 26: Current Expected Credit Losses - Loans and Leases
Current Expected Credit Losses - Loans and Leases 26 ACL / Total Loans 3Q21 Highlights All dollars shown in thousands $148.9 million ACL – loans and leases, or 1.59% of loan balances; 1.62% excluding PPP $8.2 million provision recapture; decline driven by improved credit outlook, lower net charge-of
Slide 27: Asset Quality
Asset Quality 27 Nonperforming Assets / Total AssetsClassified Assets / Total Assets Net Charge Offs & Provision Expense1 . 1 Provision includes both loans & leases and unfunded commitments All dollars shown in millions 1 1 $5.4 $6.6 $9.2 $5.6 $2.5 $13.4 $11.5 $4.0 -$4.2 -$10.1 0.10% 0.23% 0.38% 0.2
Slide 28: Investment Portfolio and Liquidity
28 Investment Portfolio Composition Investment Portfolio Quality Total: $4.3B Duration: ~3.8 Yrs Liquidity Sources In addition to deposits, First Financial has approximately $7.2 billion of readily available funding sources to meet customer needs through the following sources: Fed funds FHLB funding
Slide 29: Capital
Capital 29 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 9/30 Risk Weighted Assets = $11,399,782 All capital numbers are considered preliminary. Tier 1 Capital Ratio 8.21% 8.37%8.22% 8.47% 8.25% 3Q212Q211Q214Q203Q20 Tangible Common Equity Ratio 11.54%11.78%11.81%11.82%1
Slide 30: Capital Strategy
Capital Strategy 30 Strategy & DeploymentTangible Book Value Per Share 3.9% annualized dividend yield 2,484,295 shares repurchased in 3Q21 at an average price of $23.04 131.7% of 3Q21 earnings returned to shareholders through common dividend and share repurchases Most recent internal stress testing
Slide 31: Outlook Commentary
Outlook Commentary1 Loan balances expected to grow low to mid-single digits, excluding impact of PPP, over the remainder of the year Securities balances expected to remain consistent with 9/30/21 balances Modest seasonal increase in deposit balances expected in the near-term 31 Expected to be $91-93
Slide 32: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 32
Slide 33: Appendix: Our Markets
Appendix: Our Markets 33 Greater Cincinnati/Dayton Loans $4.1 billion Deposits $5.1 billion Deposit Market Share #5 (3.0%) Banking Centers 50 Fortune 500 Companies 8 Indianapolis Loans $1.1 billion Deposits $1.9 billion Deposit Market Share #14 (1.3%) Banking Centers 10 Fortune 500 Companies 2 Colum
Slide 34: Non-GAAP financial information note
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 35: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 35 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, 2021 2021 2021 2020 2020 Net interest income 113,410$ 114,026$ 113,876$ 118,473$ 112,180$ Tax equivalent adjustm
Slide 36: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 36 All dollars shown in thousands Additional non-GAAP ratios Sep. 30, June 30, Mar. 31, Dec. 31, Sep. 30, (Dollars in thousands, except per share data) 2021 2021 2021 2020 2020 Net income (a) 60,012$ 50,888$ 47,315$ 48,312$ 41,477$ Average total shareholders
Slide 37: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 37 Additional non-GAAP measures 1Q21 4Q20 3Q20 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 113,410$ 113,410$ 114,026$ 114,026$ 113,876$ 113,876$ 118,473$ 118,473$ 112,180$ 1
Slide 38: First Financial Bancorp
38 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
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