First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — KBW Investor Presentation (August 2006)
68 slides from First Financial Bancorp's conference presentation, Aug 1, 2006
Slide 1: First Financial Bancorp KBW Investor Presentation
First Financial Bancorp KBW Investor Presentation August 1, 2006 EXHIBIT 99.1
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: Background
fiRST Background ‘Another step on the path to success
Slide 4: Corporate Overview
Corporate Overview Ticker - FFBC (Nasdaq) Market Value - $591 million (as of 7/25/06) Total Assets $3.5 billion
Slide 5: Corporate Overview
Corporate Overview Headquartered in Hamilton, Ohio, First Financial Bancorp is a $3.5 billion publicly owned bank holding company. Founded in 1983, First Financial now operates 2 lines of business with 104 retail banking centers in Ohio, Indiana, Michigan, and Kentucky. First Financial serves some 5
Slide 6: Lines of Business
Lines of Business Banking Single Charter - First Financial Bank, N.A. Wealth Resources Group Trust and investment management services $2.2 billion in assets under management Insurance brokerage $3 million in revenue
Slide 7: Market Overview
Market Overview Market Overview
Slide 8: Strategic and Financial Goals
Strategic and Financial Goals
Slide 9: 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 10: Goals
Goals Target ratios are long-term objectives and approximate top- quartile peer performance.
Slide 11: Strategic Transition
fiRST first financial bancorp Strategic Transition ‘Another step on the path to success
Slide 12: Strategic Transition
Strategic Transition New CEO in October 2004 New strategic plan announced in March 2005 Focus Commercial Banking, Retail Banking, Wealth Management Indiana, Ohio and Kentucky metropolitan and non-metropolitan markets People led sales culture and local market management Growth in metropolitan markets
Slide 13: Strategic Transition: Restructuring Organization and Growth
Strategic Transition Restructuring Organization and Growth New brand Charter consolidation Sale of Fidelity Federal Savings Bank New metropolitan markets - Cincinnati, Dayton Branch network rationalization Expansion of sales force Leadership New, focused management team in place Actively recruiting
Slide 14: Transition timeline
April 2008 December 2005 September 2005 Branch Plan March 2005 ‘Fidelity Sale Deston Market ‘Announced October 2006 November 2005 February 2006 Systom Conversion Balance Sheet August 2006 Branch Sales Strategic Plan Mortgage Sale ‘Announced Restructuring 2131/2006 August 2006 Brand Launch tion Cinci
Slide 15: Annualized Effect of Plans
Annualized Effect of Plans Analysis includes the impact from the following plans: Performance Improvement Plan, Branch Plan, Balance Sheet Restructuring and Information Technology Plan.
Slide 16: Branding Plan
fiRST first financial bancorp Branding Plan ‘Another step on the path to success
Slide 17: Brand
Brand One Brand, One Name - First Financial Bank Client brand promises New logo and color schemes Consistent marketing message
Slide 18: Brand Promises
Brand Promises We promise to always be looking ahead. We promise to keep things simple. We promise to make doing business with us easy for our clients. We promise to be a leader - to constantly innovate and improve our systems and responsive abilities so as to serve the needs of our clients better.
Slide 19: New Corporate Logo
fiRST first financial bancorp New Corporate Logo fiRST first financial bank ‘Another step on the patho success a \ E I ii ‘irst COMMUNITY FIRST [F Einar Fi ial (san Rigg ‘A Division of Fst Financial Bank NA ‘A vison it Franc Bak @
Slide 20: "Life's Big Firsts" Advertising Campaign Samples
"Life's Big Firsts" Advertising Campaign Samples
Slide 21: "Life's Big Firsts" Print Ads
"Life's Big Firsts" Print Ads
Slide 22: "Life's Big First" Outdoor Ad
"Life's Big First" Outdoor Ad
Slide 23: Branch Plan
fiRST first financial bancorp Branch Plan ‘Another step on the path to success
Slide 24: Market Overview
Market Overview Market Overview Focus on Ohio, Indiana and Kentucky Average branch size of $32 million versus peer average of $52 million Focus on strategic and geographic fit Size and growth potential to achieve target financial returns Decision to sell 10 and close 7 offices
Slide 25: New Market Areas of Focus
New Market Areas of Focus Hamilton County Montgomery County Northern Kentucky Other Banks 28662 6291 4203 FFBC 38 0 90 0.00% Share 1 Branch 2.11% Share 3 Branches 0.13% Share 4 Branches $28.7B Total Deposits $6.3B Total Deposits $4.2B Total Deposits (Cincinnati, OH) (Dayton, OH) (Greater Cincinnati)
Slide 26: Branch Deposits
Branch Deposits Data Source: FDIC June 2004
Slide 27: Efficiency
fiRST Efficiency ‘Another step on the path to success
Slide 28: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 2004 Y 2005 Y GAAP 0.6558 0.6564 0.659 0.7009 0.6764 0.689 0.7367 0.8655 0.866 0.8516 0.6679 0.7369 Adjusted - Excludes Unusual Items 0.6606 0.6623 0.6675 0.6705 0.679 0.6812 0.6923 0.707 0.74 0.7543 0.6652 0.6897 Target = 55 to
Slide 29: Net interest margin vs peer median
1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 2004 Y 2005 Y GAAP 0.038 0.0367 0.0367 0.0364 0.0361 0.036 0.0354 0.0351 0.0371 0.0381 0.0359 0.0349 Peer Median 0.035 0.0341 0.0354 0.0355 0.035 0.035 0.0347 0.0358 0.036 0.035 0.0358 Efficiency
Slide 30: Efficiency
Efficiency 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 2004 Y 2005 Y GAAP 0.0148 0.0151 0.0162 0.015 0.0156 0.0154 0.0146 0.0171 0.0172 0.0185 0.0153 0.014 Adjusted - Excludes Unusual Items 0.0144 0.0147 0.0152 0.0147 0.0154 0.015 0.0161 0.0161 0.018 0.0174 0.0147 0.0156 Peer Median
Slide 31: Efficiency
1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 2004 Y 2005 Y GAAP 0.0341 0.0335 0.0343 0.0354 0.0344 0.0349 0.0363 0.0385 0.0465 0.0476 0.0342 0.036 Adjusted - Excludes Unusual Items 0.0341 0.0335 0.0341 0.0337 0.0344 0.0342 0.0351 0.0357 0.0402 0.0416 0.0337 0.0349 Peer Median 0.0296 0
Slide 32: Efficiency
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
Slide 33: Efficiency
fiRST first financial bancorp Efficiency storing meiner wring Ey
Slide 34: Expansion - Sales Force
Expansion - Sale Force Commercial Lender Wealth Management Market Presidents Cash Management East 23 17 7 4
Slide 35: Balance Sheet & Margin
fiRST first financial bancorp Balance Sheet & Margin ‘Another step on the path to success
Slide 36: Earning Assets
Earning Assets COMMERCIAL COMMERCIAL 631651 REAL ESTATE - CONSTRUCTION 87576 REAL ESTATE - MORTGAGE 1534656 INSTALLMENT 589817 CREDIT CARD 20353 LEASE FINANCING 4305 Commercial Loans Consumer Loans Retail Mortgages Leasing Investments FFBC 0.432 0.166 0.239 0.001 0.162 Total $3.1 Billion 6/30/06 Yie
Slide 37: Liability Mix
Liability Mix 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 13.7 40 38.8 2.
Slide 38: Interest Rate Sensitivity
Interest Rate Sensitivity Assumptions: Sensitivity as of 6/30/06 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 Assumes an immediate, pa
Slide 39: tap
0.02% tap ‘esermepreng Lebny Peprcng Woreage Acct Lae Fee Feceme 2006 MetRE Ret tap Ey
Slide 40: Loan Mix (Regulatory)
1-4 Family RE Commercial RE Farmland RE Commercial & Industrial Loans to individuals Agriculture Other East 42 29.15 3.45 12.14 11.45 1.12 1.01 Loan Mix (Regulatory) COMMERCIAL COMMERCIAL 631651 REAL ESTATE - CONSTRUCTION 87576 REAL ESTATE - MORTGAGE 1534656 INSTALLMENT 589817 CREDIT CARD 20353 LEAS
Slide 41: Mortgage Loan Strategy
Mortgage Loan Strategy 1-4 Family (excluding HELOCs) Assumes current rates and prepayment speeds with no change in interest rates or prepay speeds.
Slide 42: Proforma Indirect Installment Loans
Proforma Indirect Installment Loans As of Q2-06: Weighted Avg Coupon: 6.22% Amortization of Dealer Reserve: -1.28% Net Yield: 4.94% Assumes current rates and prepayment speeds with no change in interest rates or prepay speeds
Slide 43: 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 44: Capital Management
Capital Management December 2005 repurchased 3,250,000 shares or 7.5% Total repurchase in 2005 of 9.6% Plans for 2006/2007 of 750,000 - 1,250,000
Slide 45: Shares Repurchased
Shares Repurchased (000's) 2000 2001 2002 2003 2004 2005 2006/2007 FFBC 987.6 1847.5 1839.7 1230.7 408.6 4166 750 1250 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 46: Credit Quality
fiRST first financial bancorp Credit Quality ‘Another step on the path to success
Slide 47: 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 48: Problem Loan Sale
Problem Loan Sale Sale of $39 million in primarily substandard loans including $14 million in non-performing
Slide 49: Summary
fiRST first financial bancorp Summary ‘Another step on the path to success
Slide 50: Leverage Points
Leverage Points New metropolitan markets Sales forces expansion Efficiency Loan mix shift to commercial Wealth Management expansion Strong capital position
Slide 51: Summary
Summary In late stages of transition to new strategy 2005 and 2006 financial performance significantly affected by transition Strong financial position and early signs of growth from new strategy 2007 = New, First Financial Bank
Slide 52: Supplemental Information
fiRST first financial bancorp Supplemental Information ‘Another step on the path to success
Slide 53: GAAP As Reported: ROE, ROA, Efficiency Ratio
financial bancorp GAAP As Reported ROE ROA Efficiency Ratio 2004 2005 2Q 06 11.21% 10.40% 5.90% 1.05% 1.00% 0.51% 66.79% 73.69% 85.16% Ey
Slide 54: Financial Performance
Financial Performance Adjusted for unusual items: restructuring, effects of asset and affiliate sales, effects of bankruptcy law change Adjustments made assuming a 35% tax rate
Slide 55: Financial Performance
Financial Performance 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 EPS GAAP 0.23 0.24 0.25 0.23 0.25 0.23 0.33 0.07 0.1 0.11 EPS - Adjusted to Exclude Unusual Items 0.22 0.23 0.24 0.25 0.24 0.23 0.22 0.21 0.19 0.19
Slide 56: Daas inthowands exceptper share
Daas inthowands exceptper share Maras 31,2006 Toulsseete 5400 593 Teulbae 12995 Touldeposis 930408 Nonieaestepase w0p60 Net iterest margin 406% Eaming asset yd 635% Costof itenet bearing Iibity 260% Average branch size s29p09 Number of offices 10s Eqiytoassas 4am Eamings per share” soo FE 1467 Net i
Slide 57: Estimates to date of strategy impacts
first financial bancorp Dollats in thousands, except per share Edlimatesto-date Strategy Timing One-Time ‘Annual Chatter consalition 3005 (93,200) $5,000 Fidelty sale 3005 10,386 a Indirect sale 3005 849) 73) Indirect ext 3005, 0 er) Mortgage sale 4005, 18 288) Mortgage strategy 4005, 0 as) Tender o
Slide 58: Revenue Mix
Revenue Mix 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 2004 Y 2005 Y GAAP 0.2896 0.2965 0.3104 0.297 0.3067 0.3044 0.2971 0.227 0.3194 0.334 0.2985 0.286 Adjusted - Excludes Unusual Items 0.2844 0.2902 0.2965 0.2923 0.3041 0.2983 0.3173 0.3192 0.3266 0.3293 0.2909 0.3097
Slide 59: Dividend History (1Q95-2Q06)
Dividend History (1Q95-2Q06) 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 1Q06 2Q06 FFBC 0.0846 0.0846 0.0846 0.0976 0.0976 0
Slide 60: Management Team
fiRST first financial bancorp Management Team ‘Another step on the path to success
Slide 61: Management Team
Management Team Claude E. Davis, President & CEO 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 board. A
Slide 62: Management Team
Management Team C. Douglas Lefferson, Executive Vice President & COO 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, after
Slide 63: Management Team
Management Team J. Franklin Hall, Senior Vice President & CFO 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. He joined
Slide 64: Management Team
Management Team Gregory A. Gehlmann, Senior Vice President, General Counsel & CRO 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 65: Management Team
Management Team Sam Munafo, Executive Vice President of Banking Markets 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, whe
Slide 66: Management Team
Management Team John Hoying, Senior Vice President of Retail Credit and Product Management 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 executive
Slide 67: Management Team
Management Team Jill Wyman, Senior Vice President and Director of Sales 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 Tri-C
Slide 68: Management Team
Management Team Richard Barbercheck, Senior Vice President & Chief Credit Officer 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. Befo
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