First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Day (August 2012)
16 slides from First Financial Bancorp's investor day presentation, Aug 15, 2012
Slide 1: Risk Management
Risk Management Tony Stollings EVP & Chief Risk Officer Investor Day August 15, 2012
Slide 2: The Role of Corporate Risk
The Role of Corporate Risk High level of involvement in risk-taking activities, providing credible challenge Provides an enterprise wide view of risk to management and the Board of Directors, including the Board’s Risk Committee Leads discussion regarding development of the Company’s risk appetite,
Slide 3: Structurally Sound Risk Management
Structurally Sound Risk Management First Financial’s Risk Management includes enterprise oversight of credit, operational, market, technology, legal, strategic, regulatory and reputational risks Historically, risk management has been strong with appropriate “tone-at-the- top” CRO role has existed si
Slide 4: Enhanced and Strengthened Risk Management
Enhanced and Strengthened Risk Management Established Board Risk Committee in 2010; previously combined with the Audit Committee Developed comprehensive playbook for enterprise risk management (“ERM”) clearly defining roles and responsibilities Risk appetite statement and metrics integrated into com
Slide 5: Integrated Committee Structure
Integrated Committee Structure Board of Directors Risk Committee Enterprise Risk Management Committee Commercial Talent Mgmt. / Info Security / ALCO ALLL Wealth Mgmt. Retail Banking Banking Inc. Comp CIS Insurance Acquisition IT SOX Vendor Mgmt. CRA Oversight Oversight Disclosure 5
Slide 6: Less Risk than Peers
Less Risk than Peers Liquidity GAAP Capital Regulatory Capital Total avg deposits / Total avg liabilities Avg tangible equity / Avg tangible assets Total capital / Risk-weighted assets Peer 92.72% Peer 9.20% Peer 16.16% FFBC 93.53% FFBC 9.84% FFBC 18.42% Balance Sheet Risk & Return Risk-weighted ass
Slide 7: Current Environment
Current Environment Significantly expanded laws, rules and regulations Dodd-Frank Wall Street Reform Consumer Financial Protection Bureau Basel III Strengthened regulatory risk functions through hiring of experienced compliance staff Compliance is factored into all risk assessments Heightened regula
Slide 8: Risk Management Evolution
Risk Management Evolution First Financial • Leverage Risk • Adjust from “cost / Committee to benefit” to “risk / review risks and reward” decision the effectiveness process of risk migration • Assign responsibility for • Evaluate risk • Leverage risk respective risks tolerances and management to pol
Slide 9: Applying the Governance
Applying the Governance • Review risk policy, risk management structure, establish risk appetite and tolerances Board of • Understand and oversee overall risk profile and risk management structure Directors • Approve risk strategies • Oversight / assessment of risk monitoring • Approve / oversee ris
Slide 10: Risk Committees
Risk Committees Covers all major business functions and are made up of front line and senior business line managers Identify and document significant area risks Oversee the design, implementation and documentation of internal control structures Train employees on maintaining effective internal contr
Slide 11: Key Risk Indicators ("KRIs")
Key Risk Indicators (“KRIs”) Help monitor identified risks and provide early warning as risk levels increase Risk committees have identified various KRIs used to monitor the execution of strategic initiatives Management has pre-determined certain acceptable ranges or thresholds for each KRI that wil
Slide 12: Risk Assessment
Risk Assessment Inherent Risk Assessment Residual Risk Assessment Risk Metrics Risk Residual Risk (Event) Risk Effectiveness Risk Strategic Discipline Description Impact Likelihood Aggregate Response of Response Rating Direction Performance Target Actual Losses? Issue? Objective (1) (2) (3) (4) Rati
Slide 13: New Initiative Risk Assessment ("NIRA")
New Initiative Risk Assessment (“NIRA”) ERM helps ensure that First Financial continues to grow and prosper by appropriately managing emerging or increasing risk from: New customers New products, modified products or processes Changing markets New and changing systems New lines of business Changing
Slide 14: Comprehensive ERM Roles
Comprehensive ERM Roles Risk / Control Ownership Execute risk assessments and identification of emerging risks Business Lines Implement actions to manage and treat risk Comply with risk management process Risk / Control Process Monitoring Provide guidance and coordination among business line
Slide 15: Building on a Core Competency
Building on a Core Competency Demonstrated performance in managing risk Uniform approach to risk across all lines of business Risk Management striving to become a competitive advantage Continuing to adjust based on the Company’s priorities Evolving as more history is developed and relying on more gr
Slide 16: Biography
Biography Anthony M. Stollings Executive Vice President & Chief Risk Officer Mr. Stollings joined First Financial in 2006 as its Senior Vice President, Chief Accounting Officer and Controller. In 2011, Mr. Stollings became the Chief Risk Officer and is responsible for the Company’s enterprise risk m
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