First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q1 2021 Earnings Presentation
40 slides from First Financial Bancorp's earnings presentation, May 14, 2021
Slide 1: Investor Presentation First Quarter 2021
Investor Presentation First 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: 143 Employees: 2,063 Market Cap (03/31/21): $2.3B Dividend Yield (03/3
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 – 122 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 $4.9B Loans $1.4B / Deposits $4.3B Loans $3.6B / Deposits $3.3B 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 3/31/21.
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 enabling simple, consistent & seamless customer experience across channels & making it easy for associates to provide best-in-class customer service. “ Digital + Technology Investments
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 Digital consumer lending upgrade 2Q 2021 1Q 2019 Enterprise workflow platform across bank operations 3Q 2019 Digital mortgage
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 $57.5 $55.5 $48.6 $4
Slide 13: Presentation Contents
Presentation Contents About First Financial Bancorp Financial Performance Appendix 13
Slide 14: 1Q 2021 Results
1Q 2021 Results 122nd Consecutive Quarter of Profitability 14 EOP assets increased $201.9 million compared to the linked quarter to $16.2 billion EOP loans increased $33.0 million compared to the linked quarter to $9.9 billion Average deposits increased $447.1 million compared to the linked quarter
Slide 15: 1Q 2021 Highlights
1Q 2021 Highlights Quarterly earnings driven by strong fee income, lower expenses and lower credit costs Adjusted1 earnings per share - $0.50 Adjusted1 return on assets – 1.24% Adjusted1 pre-tax, pre-provision return on assets – 1.62% Adjusted1 return on average tangible common equity – 15.80% Loan
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 $0.48$0.49 $0.42$0.38
Slide 18: Net Interest Income & Margin
Net Interest Income & Margin 18 Net Interest Margin (FTE) 1Q21 NIM (FTE) Progression Net Interest Income All dollars shown in millions 4Q20 3.49% Asset yields/mix -0.05% Loan fees -0.06% PPP fees -0.06% Deposit costs 0.05% Funding mix 0.03% 1Q21 3.40% $3.2$5.5$3.8$3.3 $3.1 $3.4 $3.9$5.4$5.8 $4.9 $10
Slide 19: Diverse and Growing Fee Revenues
Diverse and Growing Fee Revenues 19 Noninterest Income 1Q21 Highlights All dollars shown in thousands Total fee income 26.1% of net revenue $9.5 million of mortgage banking income $10.8 million of foreign exchange income Trust and wealth management fees increased 7.5% from the linked quarter to $4.4
Slide 20: Well Managed Expenses
Well Managed Expenses 20 Noninterest Expense 1Q21 Highlights All dollars shown in thousands Core expenses declined $4.6 million from the linked quarter, driven by decline in incentive compensation and professional services $1.3 million of severance costs $0.2 million tax credit investment write-down
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 $9,952$10,128$10,253$10,002$9,221 4.03%4.18%4.00% 4.25% 5.04% 1Q214Q203Q202Q201Q20 Gross Loans Loan Yield (Gross) 1 $12,372$11,925$11,563$11,731$10,234 0.
Slide 22: Attractive Deposit Portfolio
Attractive Deposit Portfolio 22 Deposit Product Mix (Avg) 1Q21 Average Deposit Progression All dollars shown in millions Total growth/(decline): $447.1 million $76.3 $137.2 $70.0 $202.1 -$73.6 $4.1 $31.0 Interest-bearing demand Noninterest-bearing Savings Money Markets Retail CDs Brokered CDs Public
Slide 23: Loan Portfolio
Loan Portfolio 23 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) 1 Net of unearned fees of $21.9 million All dollars shown in millions Total growth/(decline): $33.0 million ICRE & Other $4,005 40% Commercial & Small Business Banking $2,429 25% Consumer $804 8% Mortgage $1,015 10% Oak Street
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 Transportation & Warehousing, Agriculture, Public Administration, Arts & Recreation, Educational Services, and Waste Management. Include
Slide 25: CARES Act Modifications as of 3/31/21
CARES Act Modifications as of 3/31/21 $226 million of loan modifications making interest only payments $251 million of total active modifications; 2.5% of total loans $153 million, or 61% of total deferrals are hotel loans Expected to steadily decline through 3Q21 No material credit issues among loa
Slide 26: Area of Focus - Hotel Portfolio
Area of Focus - Hotel Portfolio $442 million balance represents 4.4% of the total loan portfolio $143 million, or 93% of total hotel deferrals, making interest only payments as of 3/31/21 Significant improvement in hotel occupancy and rates for 2021; in excess of 50% occupancy and $120/night The ove
Slide 27: Area of Focus - Franchise Portfolio
Area of Focus - Franchise Portfolio $406 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 $44 million, or 11% of total franchise loans are in deferral as of 3/31/2021; al
Slide 28: Current Expected Credit Losses - Loans and Leases
Current Expected Credit Losses - Loans and Leases 28 ACL / Total Loans 1Q21 Highlights All dollars shown in thousands $169.9 million, or 1.71% of loan balances; 1.84% excluding PPP $3.5 million provision expense; decline driven by improved credit outlook, partially offset by a large charge-off on a
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 $196.8 $142.0 $134.0 $125.5$124.5 1.22% 0.89% 0.84% 0.79%0.83% 1Q214Q203Q202
Slide 30: Investment Portfolio and Liquidity
30 Investment Portfolio Composition Investment Portfolio Quality Total: $4.0B Duration: ~3.8 Yrs Liquidity Sources In addition to deposits, First Financial has approximately $6.9 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 3/31 Risk Weighted Assets = $11,304,012 1 Increased 165 basis points due to sub-debt issuance in beginning of second quarter All capital numbers are considered preliminary. Tier 1 Capital Ratio 2 2 1 8.22% 8.47% 8
Slide 32: Capital Strategy
Capital Strategy 32 Strategy & DeploymentTangible Book Value Per Share 3.8% annualized dividend yield Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios Dividend payout ratio to remain elevated in near-term, but is subject to change based
Slide 33: Outlook Commentary
Outlook Commentary1 Loan balances expected to remain flat in near term, excluding impact of PPP; low single digit growth expected in back half of the year Average securities balances expected to increase approximately $250 million in second quarter Deposit balances expected to stabilize 33 Relativel
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 $5.2 billion Deposit Market Share #4 (3.0%) Banking Centers 51 Fortune 500 Companies 8 Indianapolis Loans $1.2 billion Deposits $1.9 billion Deposit Market Share #14 (1.4%) Banking Centers 10 Fortune 500 Companies 2 Colum
Slide 36: The Company’s contains certain financial information determined by methods other than in accordance with
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 37: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 37 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Mar. 31, Dec. 31, Sep. 30, June 30, Mar. 31, 2021 2020 2020 2020 2020 Net interest income 113,876$ 118,473$ 112,180$ 111,576$ 114,282$ 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 Mar. 31, Dec. 31, Sep. 30, June 30, Mar. 31, (Dollars in thousands, except per share data) 2021 2020 2020 2020 2020 Net income (a) 47,315$ 48,312$ 41,477$ 37,393$ 28,628$ Average total shareholders
Slide 39: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation 39 Additional non-GAAP measures 3Q20 2Q20 1Q20 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 113,876$ 113,876$ 118,473$ 118,473$ 112,180$ 112,180$ 111,576$ 111,576$ 114,282$ 1
Slide 40: First Financial Bancorp
40 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
First Financial Bancorp — Q1 2021 Earnings Presentation on 6ix