First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q2 2021 Earnings Presentation
40 slides from First Financial Bancorp's earnings presentation, Aug 16, 2021
Slide 1: Investor Presentation Second Quarter 2021
Investor Presentation Second Quarter 2021 Exhibit 99.1
Slide 2: Forward Looking Statement Disclosure
Forward Looking Statement 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,” “exp
Slide 3: Forward Looking Statement Disclosure
Forward Looking Statement 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: 2,053 Market Cap (06/30/21): $2.3B Dividend Yield (06/3
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 – 123 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 $5.0B Loans $1.4B / Deposits $4.3B Loans $3.6B / Deposits $3.0B 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
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.
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 Expanded Salesforce CRM across enterprise 1Q 2019 Enterprise Digital Solutions formed, led by new Chief Digital Officer 2Q 2019 Digital commercial loan origination 4Q 2019 Commercial online banking upgrade 3Q 2021 1Q 2019 Enterprise workflow platform across bank operations 3Q 2019 Digital mortgag
Slide 12: Bank Transformation
12 Bank Transformation All dollars shown in millions Tech Spend consists of Data Processing, Communications & Equipment Depreciation expenses, plus departmental expenses (primarily salaries & benefits) for the Technology, Digital & Info Security teams. Tech Spend / Total Expense $57.7 $55.5 $48.6 $4
Slide 13: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 13
Slide 14: 2Q 2021 Results
2Q 2021 Results 123rd Consecutive Quarter of Profitability 14 EOP assets decreased $137.2 million compared to the linked quarter to $16.0 billion EOP loans decreased $422.5 million compared to the linked quarter to $9.5 billion Average deposits increased $339.3 million compared to the linked quarter
Slide 15: 2Q 2021 Highlights
2Q 2021 Highlights Quarterly earnings driven by strong fee income and lower credit costs Adjusted1 earnings per share - $0.58 Adjusted1 return on assets - 1.39% Adjusted1 pre-tax, pre-provision return on assets - 1.62% Adjusted1 return on average tangible common equity - 18.03% 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 $0.52$0.48$0.49 $0.42$
Slide 18: Net Interest Income & Margin
Net Interest Income & Margin 18 Net Interest Margin (FTE) 2Q21 NIM (FTE) Progression Net Interest Income All dollars shown in millions $3.4$3.2$5.5$3.8$3.3 $3.5$3.4$3.9$5.4$5.8 $9.2$10.0 $12.5 $6.2$4.5 $114.0$113.9 $118.5 $112.2$111.6 2Q211Q214Q203Q202Q20 Loan Fees Loan Accretion PPP Interest/Fees 2
Slide 19: Diverse and Growing Fee Revenues
Diverse and Growing Fee Revenues 19 Noninterest Income 2Q21 Highlights All dollars shown in thousands Total fee income 27.4% of net revenue Record foreign exchange income of $12.0 million; increased $1.3 million, or 11.9%, from the linked quarter Record trust and wealth management fees of $6.2 milli
Slide 20: Well Managed Expenses
Well Managed Expenses 20 Noninterest Expense 2Q21 Highlights All dollars shown in thousands Core expenses increased $1.8 million from the linked quarter, driven by higher employee costs, marketing costs and professional services Operating adjustments include: $3.8 million legal settlement $2.8 milli
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 $12,711$12,372$11,925$11,563$11,731 0.12%0.14% 0.20% 0.27% 0.40% 2Q211Q214Q203Q202Q20 Total Deposits Cost of Deposits $4,130$3,783$3,404$3,163$3,164 2.37%
Slide 22: Attractive Deposit Portfolio
Attractive Deposit Portfolio 22 Deposit Product Mix (Avg) 2Q21 Average Deposit Progression All dollars shown in millions Total growth/(decline): $339.3 million Interest-bearing demand $1,789 14% Noninterest- bearing $3,790 30% Savings $1,251 10% Money Markets $2,294 18% Retail CDs $1,020 8% Brokered
Slide 23: Loan Portfolio
Loan Portfolio 23 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) 1 Net of unearned fees of $16.6 million All dollars shown in millions Total growth/(decline): ($422.5 million) -$44.9 -$27.4 $14.5 -$16.3 -$40.2 -$19.4 -$288.8 ICRE Commercial & Small Business Banking Consumer Mortgage Oak Str
Slide 24: Loan Concentrations
Loan Concentrations 24 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 Agriculture, Transportation & Warehousing, Public Administration, Arts & Recreation, and Waste Management. Includes owner-occupied CRE.
Slide 25: CARES Act Modifications as of 6/30/21
CARES Act Modifications as of 6/30/21 $182 million of total active modifications; 2% of total loans $181 million of loan modifications making interest only payments $0.6 million, or 0.3% full payment deferrals 100% of active commercial deferrals are interest only payments $118 million, or 65% of tot
Slide 26: Area of Focus - Hotel Portfolio
Area of Focus - Hotel Portfolio $450 million balance represents 4.7% of the total loan portfolio $118 million, or 100% of total hotel deferrals, making interest only payments as of 6/30/21 Continued improvement in hotel performance, trending toward pre-pandemic levels Limited deterioration in averag
Slide 27: Area of Focus - Franchise Portfolio
Area of Focus - Franchise Portfolio $387 million in balances or 4% of total loans Drive thru and delivery continue to provide strong performance while a portion of our sit- down book navigates pandemic related headwinds $35 million, or 9% of total franchise loans are in deferral as of 6/30/2021; all
Slide 28: Current Expected Credit Losses - Loans and Leases
Current Expected Credit Losses - Loans and Leases 28 ACL / Total Loans 2Q21 Highlights All dollars shown in thousands $159.6 million ACL – loans and leases, or 1.68% of loan balances; 1.75% excluding PPP $4.8 million provision recapture; decline driven by improved credit outlook, lower net charge-of
Slide 29: Asset Quality
Asset Quality 29 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 $182.5 $196.8 $142.0$134.0$125.5 1.14% 1.22% 0.89%0.84% 0.79% 2Q211Q214Q203Q
Slide 30: Investment Portfolio and Liquidity
30 Investment Portfolio Composition Investment Portfolio Quality Total: $4.2B Duration: ~3.6 Yrs Liquidity Sources In addition to deposits, First Financial has approximately $7.0 billion of readily available funding sources to meet customer needs through the following sources: Fed funds FHLB funding
Slide 31: Capital
Capital 31 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 6/30 Risk Weighted Assets = $11,318,590 All capital numbers are considered preliminary. Tier 1 Capital Ratio 8.37% 8.22% 8.47% 8.25% 8.09% 2Q211Q214Q203Q202Q20 Tangible Common Equity Ratio 11.78%11.81%11.82%11.63%
Slide 32: Capital Strategy
Capital Strategy 32 Strategy & DeploymentTangible Book Value Per Share 3.9% annualized dividend yield 1,308,945 shares repurchased in second quarter at an average price of $25.11 98% of adjusted(1) earnings returned to shareholders in 2Q21 through common dividend and share repurchases Most recent in
Slide 33: Outlook Commentary
Outlook Commentary1 Loan balance growth expected to be in low single digits, excluding impact of PPP, over the remainder of the year Securities balances expected to remain consistent with 6/30/21 balances Deposit balances expected to remain stable over the near-term 33 Expected to be $91-93 million,
Slide 34: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 34
Slide 35: Appendix: Our Markets
Appendix: Our Markets 35 Greater Cincinnati/Dayton Loans $4.1 billion Deposits $5.0 billion Deposit Market Share #4 (3.0%) Banking Centers 50 Fortune 500 Companies 8 Indianapolis Loans $1.1 billion Deposits $1.9 billion Deposit Market Share #14 (1.4%) Banking Centers 10 Fortune 500 Companies 2 Colum
Slide 36: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 37: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 37 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent June 30, Mar. 31, Dec. 31, Sep. 30, June 30, 2021 2021 2020 2020 2020 Net interest income 114,026$ 113,876$ 118,473$ 112,180$ 111,576$ Tax equivalent adjustm
Slide 38: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 38 All dollars shown in thousands Additional non-GAAP ratios June 30, Mar. 31, Dec. 31, Sep. 30, June 30, (Dollars in thousands, except per share data) 2021 2021 2020 2020 2020 Net income (a) 50,888$ 47,315$ 48,312$ 41,477$ 37,393$ Average total shareholders
Slide 39: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 39 Additional non-GAAP measures 4Q20 3Q20 2Q20 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 114,026$ 114,026$ 113,876$ 113,876$ 118,473$ 118,473$ 112,180$ 112,180$ 111,576$ 1
Slide 40: First Financial Bancorp
40 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
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