First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q4 2010 Earnings Presentation
38 slides from First Financial Bancorp's earnings presentation, Feb 7, 2011
Slide 1: Investor Presentation Fourth Quarter 2010
ExHierT 99.1 fiRST first financial bancorp Investor Presentation Fourth Quarter 2010
Slide 2: Forward-Looking Statement Disclosure
fiIRST first financial bancorp Forward-Looking Statement Disclosure “Another step on the path to success
Slide 3: Business & Strategy Review
fiRST first financial bancorp Business & Strategy Review
Slide 4: Strong operating fundamentals and prudent management have resulted in solid performance
Strong operating fundamentas and prudent management have resulted in solid tability iod = 2010 ROAA oro 0.91% and ROAE of 8.68% — 81 consecutive quarters of profitability Capital levels remain among industry leaders and provide ability to take advantage of strategic opportunities in core strategic m
Slide 5: Opportunities to Build Shareholder Value
Opportunities to Build Shareholder Value Risks (0 be aoed ™ Elen! an punt use of apa! = Regulatory and financial services reform — Higher costs of compliance ~ sie rake growth in core, — Pressure on consumer fee revenue = pmsea poe — Regulatory capital requirements — Acquisitions that meet internal
Slide 6: Focused Business Strategy
fiRST first financial bancorp = Client intimate strategy focused on long-term, profitable relationships with clients = Strong sales culture that is aggressive in attracting business with the appropriate risk and return = Lines of business ercial = Retail — Wealth Management — Franchise Finance = Tar
Slide 7: Selective Acquisitions
fiRST Selective Acquisitions first financial bancorp Future Transactions met all internal criteria for acquisitions Irwin Continue to evaluate In-market locations improves operating leverage (F0IC) September 18, 2008 (on acquired loans. 27 banking conters Developed scalable covered asset and $25bn d
Slide 8: Low Risk Balance Sheet
fiIRST ceases Low Risk Balance Sheet Leanubaae Total Assets by Risk’ bypetiall % eee rates pena ea ‘Docomes ot 20 ‘Tangle Common Equty to Tanabe Assts 1+ an cn Rak Wea Asset = 154% (Per Mason? = 109%) + ak Wet ests Aste = 58.60% (Peer Median” = 739%) “another step on the path to success
Slide 9: 34.5% of total loans covered under FDIC loss share agreement
= 34.5% of total loans covered under FDIC loss share agreement = Seeing isolated areas of improvement but overall weakness still exists in Company's strategic mar = Stress remains primarily in commercial, construction and CRE portfolios Net chaye-ofs average loans & leases "Nonpetming loans / loans
Slide 10: Financial Review
fiRST first financial bancorp Financial Review
Slide 11: Quarterly net income of $14.3 million, or $0.24 per diluted common share
Quarterly net income of $14.3 million, or $0.24 per diluted common share Full year 2010 net income available to shareholders’ of $57.4 million, or $0.99 per diluted ‘common share Continued strong profitability — Quarterly and annual return on average assets of 0.90% and 0.91%, respectively — Quarter
Slide 12: Primary component of capital is common equity
Primary component of capital is common equity; continues to grow as a result of earings power Announced 20% increase in the quarterly dividend to $0.12 per share leaders and provid to take advantage of strategic opportunities Long-term targeted dividend payout range is between 40% and 60% of earning
Slide 13: Net interest margin
= Net interest margin continues to be positively impacted by the lower cost of funds related to the expected runoff of retail and brokered certifi posit, Net Interest Margin 455% 48% sano 028% 028% = 0H% OHHH funds was the full quarter impact ae ee ee ee) of the prepayment of $232 trillion of FHLB a
Slide 14: Deposit and Loan Composition
fiIRST Deposi first financial bancorp and Loan Composi Total Deposits = $5.1 billion Gross Loans = $4.3 billion As As 2010 (Cotas in mtons) (ota in mons) 1, statege AcqUed Non Strategie Michigan and Louisvile market deposits and brokered CDs. “Another step on the path to success ory
Slide 15: Total Loan Portfolio - December 31, 2010
fiRST first financi I bancorp . no geography In-house lending limit of $15 million — significantly below legal limit growth in of 4.8%; and renewals totaled approximately $350 million during the fourth quarter 2010 Total Loan Portfolio - December 31, 2010 $4.3 lio Covered Loans - $1.5 lion “Another
Slide 16: Uncovered Loans - RE Collateral
fiRST first financi I bancorp Uncovered Loans — RE Collateral Construction and acquisition and land development loans represent small portion of overall portfolio ‘Commercial real estate and constructions loans located primarily in Ohio and Indiana markets Total Uncovered Los December 31, 2010 —> “
Slide 17: ‘Another
‘Another step on the path to success 7
Slide 18: Funding Structure and Cost of Funds
fiRST Funding Structure and Cost of Funds first financial bancorp Average Interest Bearing Liability Balances End of Period Deposit Composition ‘Another step on the path to success ry
Slide 19: Deposit composition table
ep (Collars in thousands) = = = = ‘Transaction and savings accounts $$ 3.120611 $ 8 $3,351,406 Time deposits 1,742,059 Brokered deposits 188,503 Total deposits 5,051, 55146209 . ion and savir over $212 ‘$80 million of = Higher cost retail time and brokered certificates of deposit continue to runoff
Slide 20: Revenue by Source
fiIRST first finan I bancorp "= Strategic — Elements ofthe business that ethe tstod prior oho aoqustons or were scmuied wih Revenue by Source approximately 73% of total revenue is derived fom strategic businesses. Not including the FDIC loss sharing income, strategic operations represents 82% of tot
Slide 21: Noninterest Income and Expense
fiIRST est | and Exp first financial bancorp ‘Components of Noninterest Income ‘Components of Noninterest Expense Forthe Three Months Ended December 31, 2010 For the Three Months Ended December 31, 2010 sons) (Dots tins) siz trate se Accelerated Discount on Pld in Full Loans ‘oter Non tratoe “Anothe
Slide 22: Acquisition-Related Items
fiRST first financial bancorp Acquisition-Related Items
Slide 23: Acquired loan accounting under ASC
under ASC these loans. ‘quarter 2010, the Company experienced lated to certain it an loan pools. revaluation. This improvement was recorded during the quarter as a recapture of prior period impairment partially in the “loans with, improvement’ listed below. “Another step on the path to success
Slide 24: Accelerated discount and prepayments
pry 33631 72 Prepayments “Total accelerated discount ens oats 7408 6.098 ais Less gain on sales of on-mortgage Toone Pls: FHLB prepayment penaly : 8028 : : : Zt * Represents gin onsale fans egnated by franchise fiance business ‘Another step on the path to success em
Slide 25: Comparison of Financial Impact
fiRST Comparison of Financial Impact first financial bancorp Various Scenarios Related to Acquired Loans Extreme Cases Best Estimate Hal acqued loans wore propay immedi, atectaxsevmnue per dite share onic ASC Top 21090 ans were to pay as ‘woud bene by $1.25 er chare expetied te Bnet o tesa Det : 88,
Slide 26: Higher reinvestment balances
= Higher reinvestment balances — Book value of acquired loans is less than the unpaid principal balance — Full payoff = increase in earning assets + Interest income is not fully offset by lower reinvestment yield = Additional capital to leverage vom discount accretion : repayment scenario= $74.2 asu
Slide 27: Appendix
fiRST first financial bancorp Appendix
Slide 28: Credit Quality Comparison
fiRST first financial bancorp Credit Quality Comparison * NPLs /Loans NCOs / Average Loans & Leases Reserves /NPLs
Slide 29: Investment portfolio
Us.Tressuynotes $134 7 v8 108888 s04% 27% © 10000 tot a Chios apen<p) ; 3% ist 003810078 1385 1 “ 00% os ‘00: 1 MBSE (agone) 0% 35 mate 048s ETE we 285 028) 14216 Mcp 7479 17% 130 10152 “01 . 914 20% 30823710207 608 T6395 TO 3750s 0288 To Soe 00 Zia or Ss ‘Wet Uneazed Ganon) S18: anegate Gans ‘arega
Slide 30: Sector Allocation as of December 31, 2010
As of December 31, 2010 Sector Allocation assay) cs Passes i Grade = Arata seurties * ote consists primary of equator stock seurtes wha nonsnvesinent grade ring “Another step on the path to success @
Slide 31: ‘Anather Ey
‘Anather step on the path to success Ey
Slide 32: Income and Expense
Income Expense ‘Another step on the path to success
Slide 33: Leadership
fiRST first financial bancorp Leadership
Slide 34: Executive Management
Presiden & ch Chit executive Ofte os os Charman of ba Board of Dracis of fee anc Sark ror jonny te company. fe seve so Sori’ Ure Prostata tn anal Caporaton and Chiman cn nan Bak ard Tut companys ead bar, postions ha hel sce 200, Eater inion Bank a ‘Davis Bogan his career as a Gertned Put mm Coopers
Slide 35: Executive Management (continued)
fiRST Executive Management (continued) first financial bancorp Michae! Cassani Execulv Vee Presiden, Fst Financial Wealth Management s Snes Vee Managemen nd contng rm he cofaunded 286, Ear nhs caret. served as Mua Funds Proaiel Manoge "ean tubonal Investment Oc ‘A. Gehimann Brae ie Pa sident, Corpor
Slide 36: Executive Management (continued)
fiRST first financial bancorp Executive Management (continued) si Besa Vice President, Co-Chiel Retail Banking Otfewr franca n 2 Ms sofort Spon operating markets. She aso response for market servces and comperate marking, Piorooning the compary, she Spent 10 "suntan gnoval manager ané regional moreh
Slide 37: Executive Management (continued)
Since President, Chet Risk Oficer Ir Saba joned Fs Franca in 2005 as Regt Risk Manager. Mr, Sabat was hen promoted to Sei Risk fice and Fist rake ‘Company, ne wasn the Enterprise Risk Group at Pith Thed Bank, Earierin is carser Mr Sabath hel postions atthe Federal ‘Natonal City Us Bancorp). ‘Anthony
Slide 38: ‘Another
fiRST first financial bancorp ‘Another step on the path to success
First Financial Bancorp — Q4 2010 Earnings Presentation on 6ix