First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q4 2023 Earnings Presentation
43 slides from First Financial Bancorp's earnings presentation, Feb 13, 2024
Slide 1: Investor Presentation Fourth Quarter 2023
investor presentation • Fourth Quarter 2023 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
About First Financial Bancorp Financial Performance Appendix presentation contents 4
Slide 5: Overview
overview 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: 130 Employees: 2,129 Market Cap (12/31/23): $2.3B Dividend Yield (12/31/23):
Slide 6: Key investment highlights
key investment highlights • Proven & sustainable business model spanning 160 years • Premier Midwest franchise with top quartile performance • Consistent profitability – 133 consecutive quarters • High quality balance sheet & robust capital position (11.73% CET1) • Prudent risk management & credit c
Slide 7: Consistent best-in-class earnings
consistent best-in-class earnings 7 Return on Average Assets 1-Year 3-Year 2Q18-4Q23 (since merger) 77% Percentile Rank KRX Top Quartile1 1.51% 88% Percentile Rank 1.21% 1.37% 1.30% 83% Percentile Rank 1.31% 1.29% 1 KRX calculated as the top quartile of the current 50 KRX constituents. Source: S&P C
Slide 8: Consistent better than market earnings growth
consistent better than market earnings growth 8 Earnings Per Share Growth 1 KRX calculated as the median of the current 50 KRX constituents. Source: S&P Capital IQ Pro 1-Year 3-Year 5-Year 10-Year 20-Year 19% 9% KRX Median1 17% -12% 81% Percentile Rank 75% Percentile Rank 7% 4% 84% Percentile Rank 6
Slide 9: Complementary market centric strategies
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. complementary market centric strategies Loans $3.2B / Deposits $2.9B Loans $1.7B / Deposits $5.0B Loans $4.0B / Deposits $5.2B L
Slide 10: Key business lines
key business lines Full suite of diversified financial products for individuals and businesses $17.5 Billion Assets $13.4 Billion Deposits 22.21% Adjusted MRQ ROATCE Diversified financial holding company with comprehensive and innovative solutions for individuals and businesses Wealth & asset manage
Slide 11: Diversified lines of business
The number of Trust & Investments and RPS relationships are updated as of 9/30/22. All other data as of 12/31/22. diversified lines of business 11
Slide 12: Revenue growth strategies
revenue growth strategies Distribution Technology Talent Product & Pricing • Regional pricing strategy • Treasury Management product investments • Investments in Product Management Defined Models • Community • Metro • Headquarters • National Enterprise Data Management • Investment in data warehouse
Slide 13: Presentation contents
About First Financial Bancorp Financial Performance Appendix presentation contents 13
Slide 14: 4Q 2023 results
4Q 2023 results 133rd Consecutive Quarter of Profitability 14 • EOP assets increased $478.0 million compared to the linked quarter to $17.5 billion • EOP loans increased $286.4 million compared to the linked quarter to $10.9 billion • Average deposits increased $415.7 million compared to the linked
Slide 15: 4Q 2023 highlights
4Q 2023 highlights • Quarterly earnings driven by strong net interest margin • Adjusted1 earnings per share – $0.62 • Adjusted1 return on assets – 1.37% • Adjusted1 pre-tax, pre-provision return on assets – 1.96% • Adjusted1 return on average tangible common equity – 22.21% • Loan growth accelerated
Slide 16: 4Q 2023 highlights
4Q 2023 highlights • Adjusted1 noninterest expense of $116.8 million, a 3.9% decrease from third quarter • Adjustments1 include $0.9 million FDIC special assessment and other costs not expected to recur such as acquisition, severance and branch consolidation costs • Decrease driven by lower employee
Slide 17: Adjusted net income
adjusted net income1 17 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 18: Profitability
profitability 18 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 $0.60$0.66$0.69$0.74$0
Slide 19: Net interest income & margin
net interest income & margin 19 Net Interest Margin (FTE) 4Q23 NIM (FTE) Progression Net Interest Income All dollars shown in millions $147.7$150.9 $154.2$155.0$152.9 $5.2 $4.5 $5.0$4.3 $5.0 $153.8 $155.5 $159.2$159.3$157.9 4Q233Q232Q231Q234Q22 Basic NII Loan Fees 4.12%4.21% 4.34%4.43% 4.32% 0.14% 0
Slide 20: Liquidity and beta profile
liquidity and beta profile 20 1Historical data adjusted for the merger with MainSource Financial Group, Inc. using the sum of the individual components. Historical Deposit and Loan Betas1 Total Deposit Beta Loan Beta Liquidity Trends 72% 77% 79% 81% 82% 82% 82% 82% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 21: Noninterest income
noninterest income 21 Noninterest Income 4Q23 Highlights All dollars shown in thousands • Total fee income 23.4% of net revenue • Foreign exchange income of $8.7 million; decreased $4.7 million, or 34.8%, from the linked quarter due to $4.6 million loss on a trade • Leasing business income of $12.9
Slide 22: Noninterest expense
noninterest expense 22 Noninterest Expense 4Q23 Highlights All dollars shown in thousands • Core expenses decreased $4.7 million, or 3.9%, primarily due to lower employee costs and marketing expenses • $2.3 million of adjustments include: • $0.9 million FDIC special assessment • Other costs not expe
Slide 23: Average balance sheet
average balance sheet 23 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $10,751$10,624$10,514$10,373$10,059 7.29%7.18%7.03% 6.63% 6.01% 4Q233Q232Q231Q234Q22 Loans Loan Yield 1 $13,203$12,787$12,714$12,812$12,632 2.08% 1.77% 1.
Slide 24: Deposits
deposits 24 Deposit Product Mix (Avg) 4Q23 Average Deposit Progression All dollars shown in millions Total growth/(decline): $415.7 million Noninterest- bearing $3,260 25% Interest-bearing demand $1,635 12% Savings $1,103 8% Money Markets $2,668 20% Retail CDs $1,253 10% Brokered Deposits $1,356 10%
Slide 25: Average deposit trends
average deposit trends 25 All dollars shown in millions Business Public Funds Personal Uninsured Deposits $5,921$5,824$5,821$5,903$5,910$6,095 4Q233Q232Q231Q234Q223Q22 $3,913$3,789$3,664$3,881$4,133$4,052 4Q233Q232Q231Q234Q223Q22 $1,928$1,805$1,823$1,842 $2,026$2,005 4Q233Q232Q231Q234Q223Q22 Uninsur
Slide 26: Deposit concentrations
deposit concentrations Business Deposits by Sector All dollars shown in millions 26 NAICS Sector 12/31/23 % of Total Deposits Manufacturing $636.8 4.8% Real Estate and Rental and Leasing 455.3 3.4% Finance and Insurance 468.9 3.5% Construction 380.1 2.8% Professional, Scientific, and Technical Servi
Slide 27: Borrowing capacity & cash/investment liquidity
27 Borrowing Capacity • Interest-bearing deposits with other banks of $793 million • Investment securities portfolio: • 97.4% of investment portfolio classified as available-for-sale • $622.9 million of expected cash flow from securities portfolio in next 12 months • $533.3 million of floating rate
Slide 28: Loan portfolio
loan portfolio 28 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) All dollars shown in millions Total growth/(decline): $286.4 million $70.1 -$28.2 $56.7 $11.3 $109.8 $13.6 $53.2 -$0.1 ICRE Commercial & Small Business Banking Oak Street Franchise Summit Consumer Mortgage Other ICRE $3,589 33
Slide 29: Loan concentrations
loan concentrations 29 C&I and Owner Occupied CRE Loans by Sector1 Investor CRE Loans by Property Type All dollars shown in millions 1 Excludes Summit Funding Group NAICS Sector 12/31/23 % of Total Loans Finance and Insurance $834.6 7.6% Real Estate and Rental and Leasing 763.5 7.0% Manufacturing 55
Slide 30: Area of focus - office portfolio (non-owner occupied)
area of focus - office portfolio (non-owner occupied) 30 Office Property Type All dollars shown in millions Office Property Market Office Risk Classification • $462 million balance represents 4.2% of total loan portfolio • 68% of portfolio is suburban • Average LTV of 61% • Majority of exposure is i
Slide 31: Allowance for credit losses
allowance for credit losses 31 ACL / Total Loans 4Q23 Highlights All dollars shown in millions • $159.9 million combined ACL; $10.2 million combined provision expense • $141.4 million ACL – loans and leases; increase driven by net charge-offs; 1.29% of loan balances • Utilized Moody’s December basel
Slide 32: Asset quality
asset quality 32 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 $141.0$140.6$138.9 $159.0 $128.1 0.80%0.82%0.81% 0.94% 0.75% 4Q233Q232Q231Q234Q2
Slide 33: Capital
capital 33 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 12/31 Risk Weighted Assets = $13,374,177 All capital numbers are considered preliminary. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial conditi
Slide 34: Capital ratios, reflecting all unrealized losses
capital ratios, reflecting all unrealized losses1 34 Tier 1 Common Equity Ratio Total Capital Ratio 12/31 Risk Weighted Assets = $13,374,177 All capital numbers are considered preliminary. 1 Assumes Company holds cash proceeds of securities sales Tier 1 Capital Ratio 10.35% 9.62%9.48%9.37%8.93% 7.00
Slide 35: Capital strategy
capital strategy 35 Strategy & DeploymentTangible Book Value Per Share • 3.9% annualized dividend yield • 38.6% of 4Q23 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Common
Slide 36: Outlook commentary
outlook commentary1 • Loan balances expected to grow mid single digits in near-term • Average deposit balances expected to be stable to slightly down in near-term due to seasonality • Investment portfolio expected to decline as cash flows fund loan growth 36 • Total noninterest expense expected to b
Slide 37: Presentation contents
About First Financial Bancorp Financial Performance Appendix presentation contents 37
Slide 38: Appendix: our markets
appendix: our markets • Greater Cincinnati/Dayton • Loans $4.4 billion • Deposits $6.3 billion • Deposit Market Share #4 (2.9%) • Banking Centers 50 • Fortune 500 Companies 5 • Indianapolis • Loans $1.0 billion • Deposits $0.7 billion • Deposit Market Share #14 (1.2%) • Banking Centers 9 • Fortune 5
Slide 39: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 40: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 40 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, 2023 2023 2023 2023 2022 Net interest income 153,765$ 155,455$ 159,232$ 159,318$ 157,896$ Tax equivalent adjustm
Slide 41: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 41 All dollars shown in thousands Additional non-GAAP ratios Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, (Dollars in thousands, except per share data) 2023 2023 2023 2023 2022 Net income (a) 56,732$ 63,061$ 65,667$ 70,403$ 69,086$ Average total shareholders
Slide 42: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 42 All dollars shown in thousands Additional non-GAAP measures 2Q23 1Q23 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 153,765$ 153,765$ 155,455$ 155,455$ 159,232$ 159,232$ 159,318$ 159,318$ Provi
Slide 43: First Financial Bancorp
43 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
First Financial Bancorp — Q4 2023 Earnings Presentation on 6ix