First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Investor Presentation (May 2023)
45 slides from First Financial Bancorp's investor presentation, May 30, 2023
Slide 1: Investor Presentation First Quarter 2023
investor presentation • First 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 4 presentation contents
Slide 5: Overview
overview 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: 130 Employees: 2,066 Market Cap (3/31/23): $2.1B Dividend Yield (3/31/23):
Slide 6: Key investment highlights
key investment highlights Proven & sustainable business model spanning 160 years • Well managed through past credit cycles • Conservative operating philosophy • Consistent profitability – 130 consecutive quarters Premier Midwest franchise with top quartile performance High quality balance sheet & ro
Slide 7: 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 $3.0B / Deposits $2.8B Loans $1.7B / Deposits $4.8B Loans $4.1B / Deposits $4.9B 7
Slide 8: Key business lines
8 key business lines Full suite of diversified financial products for individuals and businesses $16.9 Billion Assets $12.7 Billion Deposits 29.64% Adjusted MRQ ROATCE Diversified financial holding company with comprehensive and innovative solutions for individuals and businesses Wealth & asset mana
Slide 9: 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 9
Slide 10: Revenue growth strategies
10 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 dat
Slide 11: Digital + technology investments
digital + technology investments enabling simple, consistent & seamless customer experience across channels & making it easy for associates to provide best-in-class customer service. “ 11
Slide 12: Digital + technology investments
digital + technology investments All dollars shown in millions 1 – Tech Spend consists of data processing, communications, software / equipment depreciation & departmental expenses (primarily salaries & benefits) for the Technology, Digital & Info Security teams. 2 – Total Expense excludes Leasing B
Slide 13: Digital + technology highlights
• engagement • digital engagement across core customers increased 3.4% vs. Q1 2022 • consumer online banking logins increased 11.2% vs. Q1 2022 • self service • consumer online banking transaction volume increased 7.0% vs. Q1 2022 • customer satisfaction • Q1 2023 consumer mobile app rating: 4.571 d
Slide 14: Presentation contents
About First Financial Bancorp Financial Performance Appendix 14 presentation contents
Slide 15: 1Q 2023 results
1Q 2023 results 130th Consecutive Quarter of Profitability 15 • EOP assets decreased $69.4 million compared to the linked quarter to $16.9 billion • EOP loans increased $134.4 million compared to the linked quarter to $10.4 billion • Average deposits increased $179.8 million compared to the linked q
Slide 16: 1Q 2023 highlights
1Q 2023 highlights • Quarterly earnings driven by strong net interest margin and record fee income • Adjusted1 earnings per share - $0.76 • Adjusted1 return on assets - 1.72% • Adjusted1 pre-tax, pre-provision return on assets – 2.40% • Adjusted1 return on average tangible common equity – 29.64% • E
Slide 17: 1Q 2023 highlights
1Q 2023 highlights • Adjusted1 noninterest expense of $114.6 million, a 2.4% decline from fourth quarter • Adjusted1 for $0.5 million of contract termination costs as well as $1.6 million of other costs not expected to recur such as acquisition, severance and branch consolidation costs • $7.7 millio
Slide 18: Adjusted net income
adjusted net income1 18 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 19: Profitability
profitability 19 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 $0.74$0.73 $0.59$0.55
Slide 20: Net interest income & margin
net interest income & margin 20 Net Interest Margin (FTE) 1Q23 NIM (FTE) Progression Net Interest Income All dollars shown in millions 4Q22 4.47% Asset yields/mix 0.55% Deposit & funding costs/mix -0.51% Accretion/other 0.04% 1Q23 4.55% 4.39%4.28% 3.78% 3.24% 2.93% 0.12% 0.15% 0.12% 0.11% 0.11% 0.04
Slide 21: Asset sensitive balance sheet position
21 1NII – Year 1 impact, represents percentage change for immediate parallel changes in rates. 2Reflects percentage of loans classified as variable rate and repricing in ≤ 1yr, hybrid variable rate repricing in > 1yr, or fixed rate, including loans held for sale. 3Schedule reflects remaining maturit
Slide 22: Liquidity and beta profile
liquidity and beta profile 22 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 24% 33% 21% 3Q15-2Q19 Fed Cycle (+225bps) 3Q19-4Q21 Fed Cycle (-22
Slide 23: Noninterest income
noninterest income 23 Noninterest Income 1Q23 Highlights All dollars shown in thousands • Total fee income 25.9% of net revenue • Foreign exchange income of $16.9 million; decreased $2.7 million, or 13.8%, from record fourth quarter • Record leasing business income of $13.7 million; increased $2.5 m
Slide 24: Noninterest expense
noninterest expense 24 Noninterest Expense 1Q23 Highlights All dollars shown in thousands • Core expenses decreased due to fewer professional services expenses in the current period as well as elevated incentive costs and charitable donations in the fourth quarter • Adjustments include: • $0.5 milli
Slide 25: Average balance sheet
average balance sheet 25 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion. $3,635$3,705$4,003$4,118$4,308 3.94%3.68% 3.11% 2.78% 2.50% 1Q234Q223Q222Q221Q22 Average Investment Securities Investment Securities Yield $10,373$10,059
Slide 26: Deposits
deposits 26 Deposit Product Mix (Avg) 1Q23 Average Deposit Progression All dollars shown in millions Total growth/(decline): $179.8 million -$227.7 -$99.7 -$39.6 -$39.1 $108.7 $661.5 -$184.3 Noninterest-bearing Interest-bearing demand Savings Money Markets Retail CDs Brokered CDs Public Funds Nonint
Slide 27: Average deposit trends
average deposit trends 27 All dollars shown in millions, except for uninsured deposits, which are shown in billions Business Public Funds Personal Uninsured Deposits $5,903$5,910 $6,095 $6,232$6,171 $5,986 1Q234Q223Q222Q221Q224Q21 $3,881 $4,133$4,052$4,051 $4,192 $4,300 1Q234Q223Q222Q221Q224Q21 $1,8
Slide 28: Deposit concentrations
deposit concentrations 28 Business Deposits by Sector All dollars shown in millions NAICS Sector 3/31/23 % of Total Deposits Manufacturing $534.8 4.2% Real Estate and Rental and Leasing 457.0 3.6% Finance and Insurance 421.9 3.3% Construction 321.6 2.5% Other Services (except Public Administration)
Slide 29: Borrowing capacity & cash/investment liquidity
29 Borrowing Capacity • Interest-bearing deposits with other banks of $306 million • Investment securities portfolio: • 98% of investment portfolio classified as available-for-sale • $704 million of expected cash flow from securities portfolio in next 12 months • $278 million of securities available
Slide 30: Loan portfolio
loan portfolio 30 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) All dollars shown in millions Total growth/(decline): $134.4 million ICRE $3,542 34% Commercial & Small Business Banking $3,367 32% Oak Street $666 6% Franchise $259 3% Summit $391 4% Consumer $959 9% Mortgage $1,246 12% Other
Slide 31: Loan concentrations
loan concentrations 31 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 3/31/23 % of Total Loans Real Estate and Rental and Leasing $784.8 7.5% Finance and Insurance 771.9 7.4% Manufacturing 592
Slide 32: Area of focus - office portfolio
area of focus - office portfolio (non-owner occupied)1 32 Office Property Type 1 All graphs depicted on this slide only include office loans greater than $2.5 million. All dollars shown in millions • $499 million balance represents 4.8% of total loan portfolio • $100 million are less than $2.5 milli
Slide 33: Current expected credit losses - loans and leases
current expected credit losses - loans and leases 33 ACL / Total Loans 1Q23 Highlights All dollars shown in thousands • $161.8 million combined ACL; $10.5 million combined provision expense • $141.6 million ACL – loans and leases; increase driven by loan growth, slower prepayment rates and economic
Slide 34: Asset quality
asset quality 34 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 $159.0 $128.1 $115.0$119.8 $106.8 0.94% 0.75% 0.69% 0.74% 0.67% 1Q234Q223Q222Q221
Slide 35: Capital
capital 35 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 3/31 Risk Weighted Assets = $13,025,552 All capital numbers are considered preliminary. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial conditio
Slide 36: Capital ratios including all unrealized losses
capital ratios including all unrealized losses1 36 Tier 1 Common Equity Ratio Total Capital Ratio 3/31 Risk Weighted Assets = $13,025,552 All capital numbers are considered preliminary. 1 Assumes Company holds cash proceeds of securities sales. Tier 1 Capital Ratio 9.37%8.93%8.83% 9.90% 10.78% 7.00%
Slide 37: Capital strategy
capital strategy 37 Strategy & Deployment Tangible Book Value Per Share • 4.2% annualized dividend yield • 30.9% of 1Q23 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Commo
Slide 38: Outlook commentary
outlook commentary1 • Loan balances to grow mid single digits in near-term • Deposit balances to stabilize in near-term • Investment portfolio to decline as loan portfolio grows 38 • Expected to be $118 - 120 million • Stable excluding growth in leasing business expense • Incentive expense will fluc
Slide 39: Presentation contents
About First Financial Bancorp Financial Performance Appendix 39 presentation contents
Slide 40: Appendix: our markets
appendix: our markets 40 • Greater Cincinnati/Dayton • Loans $4.5 billion • Deposits $6.0 billion • Deposit Market Share T- #4 (2.7%) • Banking Centers 50 • Fortune 500 Companies 8 • Indianapolis • Loans $1.0 billion • Deposits $0.7 billion • Deposit Market Share #14 (1.2%) • Banking Centers 9 • For
Slide 41: Non-GAAP financial information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 42: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 42 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Mar. 31, Dec. 31, Sep. 30, June 30, Mar. 31, 2023 2022 2022 2022 2022 Net interest income 159,318$ 157,896$ 137,892$ 117,010$ 106,345$ Tax equivalent adjustm
Slide 43: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 43 All dollars shown in thousands Additional non-GAAP ratios Mar. 31, Dec. 31, Sep. 30, June 30, Mar. 31, (Dollars in thousands, except per share data) 2023 2022 2022 2022 2022 Net income (a) 70,403$ 69,086$ 55,705$ 51,520$ 41,301$ Average total shareholders
Slide 44: Appendix: non-GAAP to GAAP reconciliation
appendix: non-GAAP to GAAP reconciliation 44 All dollars shown in thousands Additional non-GAAP measures 3Q22 2Q22 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 159,318$ 159,318$ 157,896$ 157,896$ 137,892$ 137,892$ 117,010$ 117,010$ Provi
Slide 45: First Financial Bancorp
45 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
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