First Financial Bancorp Announces First Quarter 2023 Financial Results

About this update from First Financial Bancorp.

Earnings per diluted share of $0.74 ; $0.76 on an adjusted(1) basis, 65% increase YoY Return on average assets of 1.69%; 1.72% on an adjusted(1) basis Record quarterly revenue of $214.9 million Net interest margin on FTE basis(1) of 4.55%; 8 bp increase from linked quarter Loan growth of $134.4 million ; 5.3% on an annualized basis Record adjusted(1) fee income driven by foreign exchange, leasing, and wealth management Stable credit quality with de minimis net charge-offs Regulatory capital ratios increased and remain in excess of targets CINCINNATI , April 20, 2023 /PRNewswire/ -- First Financial Bancorp . (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three months ended March 31, 2023 . For the three months ended March 31, 2023 , the Company reported net income of $70.4 million , or $0.74 per diluted common share. These results compare to net income of $69.1 million , or $0.73 per diluted common share, for the fourth quarter of 2022. Return on average assets for the first quarter of 2023 was 1.69% while return on average tangible common equity was 29.02%(1). These compare to return on average assets of 1.63% and return on average tangible common equity of 29.93%(1) in the fourth quarter of 2022. First quarter 2023 highlights include: Net interest margin of 4.51%, or 4.55% on a fully tax-equivalent basis(1) 8 bp increase to 4.55% from 4.47% in the fourth quarter due to higher asset yields Higher loan balances and 62 bp increase in loan yields offset 49 bp increase in cost of deposits Average deposit balances increased $179.8 million with growth in brokered and retail CDs offsettingdeclines in public funds and business balances Noninterest income of $55.5 million , or $55.4 million as adjusted(1) Record leasing business income of $13.7 million ; 22.8% increase from fourth quarter Foreign exchange income of $16.9 million reflected continued strong demand Record trust and wealth management fees of $6.3 million ; 12.1% increase from fourth quarter Adjusted(1) for $0.1 million gain on investment securities Noninterest expenses of $116.7 million , or $114.6 million as adjusted(1) Adjustments(1) include $0.5 million of contract termination costs as well as $1.6 million of other costsnot expected to recur such as acquisition, severance and branch consolidation costs $7.7 million decline from fourth quarter driven by lower professional services, tax credit investmentwrite-downs, charitable contributions, and incentive costs Efficiency ratio of 54.3%; 53.3% as adjusted(1) (1) Non-GAAP measure. For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation. (2) The consolidated balance sheets at December 31, 2022 , September 30, 2022 , June 30, 2022 , and March 31, 2022 include assets acquired and liabilities assumed in the Summit Financial transaction. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. These fair value measurements were considered final as of December 31, 2022 . Moderate loan growth during the quarter Loan balances increased $134.4 million compared to the fourth quarter Growth of 5.3% on an annualized basis Residential mortgage, C&I, and equipment leases drove quarterly growth Total Allowance for Credit Losses of $161.8 million ; Total quarterly provision expense of $10.5 million Loans and leases - ACL of $141.6 million ; increased 7 bps to 1.36% of total loans Unfunded Commitments - ACL of $20.2 million Provision expense driven by loan growth, slower prepayment speeds and economic forecasts De minimis net charge-offs during the quarter Capital ratios remain solid Total capital ratio of 13.66% Tier 1 common equity increased 17 bps to 11.00% Tangible common equity increased 52 bps to 6.47%(1); 8.54%(1) excluding impact from AOCI Tangible book value per share of $10.76 (1) Mr. Brown , President and CEO, commented on the quarter, "The first quarter was a really strong quarter for First Financial and I am very pleased with our operating performance. The Company achieved record revenue of $215 million . Net income and total revenue increased 70% and 46%, respectively, from the same quarter last year, with both increasing slightly compared to the linked quarter. Our quarterly results were driven by strong net interest income, moderate loan growth, an 8 bp increase in our net interest margin, record leasing business income, another great quarter from Bannockburn and strong performance from our Yellow Cardinal Wealth Division." Mr. Brown continued, "We continue to manage the significant increase in short term rates effectively, and during the first quarter, the increase in our asset yields exceeded the increase in total funding costs by 4 bps. Average deposit balances increased slightly from the linked quarter as increases in brokered and retail CDs offset outflows in public funds and business deposits, which were primarily seasonal. The majority of these outflows occurred in the first two months of the quarter. The deposit beta from the first quarter of 2022 through the first quarter of 2023 was 21%. From a liquidity standpoint, our loan to deposit ratio was 82%, and we also maintain flexibility through our investment portfolio, 98% of which was classified as available-for-sale as of March 31 ." Mr. Brown discussed asset quality, "Credit quality remained stable in the first quarter. Net charge-offs were de minimis and nonperforming assets declined slightly as a percentage of total assets from the linked quarter. Additionally, the ACL increased $8.6 million during the quarter, driven by loan growth, slower prepayments and changes in economic forecasts. As a result, the ACL was 1.36% as a percentage of total loan balances, which was a 7 basis point increase from the coverage ratio at year-end." Mr. Brown concluded, "We are very pleased with the strengthening of our capital ratios this quarter. Our strong profitability and recent decline in market rates led to a 52-basis point increase in our tangible common equity ratio. In addition, tangible book value per share increased 8% to $10.76 . The quarter had its challenges for the industry and there is nearterm uncertainty regarding the economy. We are extremely pleased with our results and how we have managed the challenges to date. We believe we remain well positioned to manage future uncertainty due to our profitability, net interest margin, ample liquidity, and strong levels of capital." Full detail of the Company's first quarter 2023 performance is provided in the accompanying financial statements and slide presentation. Teleconference / Webcast Information First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, April 21, 2023 at 8:30 a.m. Eastern Time . Members of the public who would like to listen to the conference call should dial (833) 470-1428 ( U.S. toll free) or (404) 975-4839 ( U.S. local), access code 842558. The number should be dialed five to ten minutes prior to the start of the conference call. A replay of the conference call will be available beginning one hour after the completion of the live call at (866) 813-9403 ( U.S. toll free), (929) 458-6194 ( U.S. local) and +44 204 525-0658 (all other locations), access code 342184. The recording will be available until May 25, 2023 . The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com . The webcast will be archived on the Investor Relations section of the Company's website for 12 months. Press Release and Additional Information on Website This press release as well as supplemental information are available to the public through the Investor Relationssection of First Financial's website at www.bankatfirst.com . Use of Non-GAAP Financial Measures This earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company's results of operations or financial position. Where NonGAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation. Forward-Looking Statements 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," "expected," "estimated," ''intends'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forwardlooking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements. As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forwardlooking statements. Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation: economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business; future credit quality and performance, including our expectations regarding future loan losses and ourallowance for credit losses the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; Management's ability to effectively execute its business plans; mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; the possibility that any of the anticipated benefits of the Company's acquisitions will not be realized or willnot be realized within the expected time period; the effect of changes in accounting policies and practices; changes in consumer spending, borrowing and saving and changes in unemployment; changes in customers' performance and creditworthiness; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; current and future economic and market conditions, including the effects of changes in housing prices,fluctuations in unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and anyslowdown in global economic growth; the adverse impact on the U.S. economy, including the markets in which we operate, of the novelcoronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impacton the performance of our loan and lease portfolio, the market value of our investment securities, theavailability of sources of funding and the demand for our products; our capital and liquidity requirements (including under regulatory capital standards, such as the Basel IIIcapital standards) and our ability to generate capital internally or raise capital on favorable terms; financial services reform and other current, pending or future legislation or regulation that could have anegative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation andregulation relating to bank products and services; the effect of the current interest rate environment or changes in interest rates or in the level or compositionof our assets or liabilities on our net interest income, net interest margin and our mortgage originations,mortgage servicing rights and mortgage loans held for sale; the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses; a failure in or breach of our operational or security systems or infrastructure, or those of our third-partyvendors or other service providers, including as a result of cyber attacks; the effect of changes in the level of checking or savings account deposits on our funding costs and netinterest margin; and our ability to develop and execute effective business plans and strategies. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2022 , as well as our other filings with the SEC , which are available on the SEC website at www.sec.gov . All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, the Company does not assume any obligation to update any forward-looking statement. About First Financial Bancorp . First Financial Bancorp . is a Cincinnati, Ohio based bank holding company. As of March 31, 2023 , the Company had $16.9 billion in assets, $10.4 billion in loans, $12.7 billion in deposits and $2.1 billion in shareholders' equity. The Company's subsidiary, First Financial Bank , founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate , Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.3 billion in assets under management as of March 31, 2023 . The Company operated 130 full service banking centers as of March 31, 2023 , located in Ohio , Indiana , Kentucky and Illinois , while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com . FIRST FINANCIAL BANCORP . CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) (Unaudited) Three Months Ended, Mar. 31 , Dec. 31 , Sep. 30 , June 30 , Mar. 31 , 2023 2022 2022 2022 2022 RESULTS OF OPERATIONS Net income $ 70,403 $ 69,086 $ 55,705 $ 51,520 $ 41,301 Net earnings per share - basic $ 0.75 $ 0.74 $ 0.60 $ 0.55 $ 0.44 Net earnings per share - diluted $ 0.74 $ 0.73 $ 0.59 $ 0.55 $ 0.44 Dividends declared per share $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.23 KEY FINANCIAL RATIOS Return on average assets 1.69 % 1.63 % 1.35 % 1.28 % 1.03 % Return on average shareholders' equity 13.71 % 13.64 % 10.58 % 9.84 % 7.53 % Return on average tangible shareholders' equity (1) 29.02 % 29.93 % 22.29 % 20.68 % 14.93 % Net interest margin 4.51 % 4.43 % 3.93 % 3.41 % 3.11 % Net interest margin (fully tax equivalent) (1)(2) 4.55 % 4.47 % 3.98 % 3.45 % 3.16 % Ending shareholders' equity as a percent of ending assets 12.53 % 12.01 % 12.00 % 12.74 % 13.35 % Ending tangible shareholders' equity as a percent of: Ending tangible assets (1) 6.47 % 5.95 % 5.79 % 6.40 % 6.95 % Risk-weighted assets (1) 7.87 % 7.32 % 7.21 % 8.09 % 8.85 % Average shareholders' equity as a percent of average assets 12.29 % 11.98 % 12.75 % 12.97 % 13.75 % Average tangible shareholders' equity as a percent of average tangible assets (1) 6.21 % 5.84 % 6.49 % 6.62 % 7.44 % Book value per share $ 22.29 $ 21.51 $ 21.03 $ 21.90 $ 22.63 Tangible book value per share (1) $ 10.76 $ 9.97 $ 9.48 $ 10.27 $ 10.97 Common equity tier 1 ratio (3) 11.00 % 10.83 % 10.82 % 10.91 % 10.87 % Tier 1 ratio (3) 11.34 % 11.17 % 11.17 % 11.28 % 11.24 % Total capital ratio (3) 13.66 % 13.64 % 13.73 % 13.94 % 13.97 % Leverage ratio (3) 9.03 % 8.89 % 8.88 % 8.76 % 8.64 % AVERAGE BALANCE SHEET ITEMS Loans (4) $ 10,373,302 $ 10,059,119 $ 9,597,197 $ 9,367,820 $ 9,266,774 Investment securities 3,635,317 3,705,304 4,003,472 4,118,287 4,308,059 Interest-bearing deposits with other banks 318,026 372,054 317,146 294,136 273,763 Total earning assets $ 14,326,645 $ 14,136,477 $ 13,917,815 $ 13,780,243 $ 13,848,596 Total assets $ 16,942,999 $ 16,767,598 $ 16,385,989 $ 16,185,978 $ 16,184,919 Noninterest-bearing deposits $ 3,954,915 $ 4,225,192 $ 4,176,242 $ 4,224,842 $ 4,160,175 Interest-bearing deposits 8,857,226 8,407,114 8,194,781 8,312,876 8,623,800 Total deposits $ 12,812,141 $ 12,632,306 $ 12,371,023 $ 12,537,718 $ 12,783,975 Borrowings $ 1,434,338 $ 1,489,088 $ 1,406,718 $ 1,079,596 $ 721,695 Shareholders' equity $ 2,082,210 $ 2,009,564 $ 2,089,179 $ 2,099,670 $ 2,225,495 CREDIT QUALITY RATIOS Allowance to ending loans 1.36 % 1.29 % 1.27 % 1.25 % 1.34 % Allowance to nonaccrual loans 409.46 % 464.58 % 341.61 % 302.87 % 273.09 % Allowance to nonperforming loans 409.46 % 335.94 % 262.09 % 235.08 % 231.98 % Nonperforming loans to total loans 0.33 % 0.38 % 0.48 % 0.53 % 0.58 % Nonaccrual loans to total loans 0.33 % 0.28 % 0.37 % 0.41 % 0.49 % Nonperforming assets to ending loans, plus OREO 0.33 % 0.39 % 0.48 % 0.53 % 0.58 % Nonperforming assets to total assets 0.21 % 0.23 % 0.28 % 0.31 % 0.33 % Classified assets to total assets 0.94 % 0.75 % 0.69 % 0.74 % 0.67 % Net charge-offs to average loans (annualized) 0.00 % (0.01) % 0.07 % 0.08 % 0.10 % (1) Non-GAAP measure. For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation. (2) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. (3) March 31, 2023 regulatory capital ratios are preliminary. (4) Includes loans held for sale. FIRST FINANCIAL BANCORP . CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) 2023 2022 First Fourth Third Second First Full Quarter Quarter Quarter Quarter Quarter Year Interest income Loans and leases, including fees $ 169,706 $ 152,299 $ 122,170 $ 97,091 $ 87,182 $ 458,742 Investment securities Taxable 31,867 30,248 26,331 23,639 22,096 102,314 Tax-exempt 3,464 4,105 5,014 4,916 4,431 18,466 Total investment securities interest 35,331 34,353 31,345 28,555 26,527 120,780 Other earning assets 3,544 3,262 1,597 505 120 5,484 Total interest income 208,581 189,914 155,112 126,151 113,829 585,006 Interest expense Deposits 31,456 16,168 6,386 2,963 2,623 28,140 Short-term borrowings 12,950 11,091 6,158 1,566 317 19,132 Long-term borrowings 4,857 4,759 4,676 4,612 4,544 18,591 Total interest expense 49,263 32,018 17,220 9,141 7,484 65,863 Net interest income 159,318 157,896 137,892 117,010 106,345 519,143 Provision for credit losses-loans and leases 8,644 8,689 7,898 (4,267) (5,589) 6,731 Provision for credit losses-unfunded commitments 1,835 1,341 386 3,481 (226) 4,982 Net interest income after provision for credit losses 148,839 147,866 129,608 117,796 112,160 507,430 Noninterest income Service charges on deposit accounts 6,514 6,406 6,279 7,648 7,729 28,062 Trust and wealth management fees 6,334 5,648 5,487 6,311 6,060 23,506 Bankcard income 3,592 3,736 3,484 3,823 3,337 14,380 Client derivative fees 1,005 1,822 1,447 1,369 803 5,441 Foreign exchange income 16,898 19,592 11,752 13,470 10,151 54,965 Leasing business income 13,664 11,124 7,127 7,247 6,076 31,574 Net gains from sales of loans 2,335 2,206 3,729 5,241 3,872 15,048 Net gain (loss) on sale of investment securities (519) (393) (179) 0 3 (569) Net gain (loss) on equity securities 640 1,315 (701) (1,054) (199) (639) Other 5,080 4,579 4,109 5,723 3,462 17,873 Total noninterest income 55,543 56,035 42,534 49,778 41,294 189,641 Noninterest expenses Salaries and employee benefits 72,254 73,621 66,808 64,992 63,947 269,368 Net occupancy 5,685 5,434 5,669 5,359 5,746 22,208 Furniture and equipment 3,317 3,234 3,222 3,201 3,567 13,224 Data processing 9,020 8,567 8,497 8,334 8,264 33,662 Marketing 2,160 2,198 2,523 2,323 1,700 8,744 Communication 634 690 657 670 666 2,683 Professional services 1,946 3,015 2,346 2,214 2,159 9,734 State intangible tax 985 974 1,090 1,090 1,131 4,285 FDIC assessments 2,826 2,173 1,885 1,677 1,459 7,194 Intangible amortization 2,600 2,573 2,783 2,915 2,914 11,185 Leasing business expense 7,938 6,061 5,746 4,687 3,869 20,363 Other 7,328 15,902 23,842 5,572 7,383 52,699 Total noninterest expenses 116,693 124,442 125,068 103,034 102,805 455,349 Income before income taxes 87,689 79,459 47,074 64,540 50,649 241,722 Income tax expense (benefit) 17,286 10,373 (8,631) 13,020 9,348 24,110 Net income $ 70,403 $ 69,086 $ 55,705 $ 51,520 $ 41,301 $ 217,612 ADDITIONAL DATA Net earnings per share - basic $ 0.75 $ 0.74 $ 0.60 $ 0.55 $ 0.44 $ 2.33 Net earnings per share - diluted $ 0.74 $ 0.73 $ 0.59 $ 0.55 $ 0.44 $ 2.30 Dividends declared per share $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.92 Return on average assets 1.69 % 1.63 % 1.35 % 1.28 % 1.03 % 1.33 % Return on average shareholders' equity 13.71 % 13.64 % 10.58 % 9.84 % 7.53 % 10.34 % Interest income $ 208,581 $ 189,914 $ 155,112 $ 126,151 $ 113,829 $ 585,006 Tax equivalent adjustment 1,424 1,553 1,712 1,625 1,467 6,357 Interest income - tax equivalent 210,005 191,467 156,824 127,776 115,296 591,363 Interest expense 49,263 32,018 17,220 9,141 7,484 65,863 Net interest income - tax equivalent $ 160,742 $ 159,449 $ 139,604 $ 118,635 $ 107,812 $ 525,500 Net interest margin 4.51 % 4.43 % 3.93 % 3.41 % 3.11 % 3.73 % Net interest margin (fully tax equivalent) (1) 4.55 % 4.47 % 3.98 % 3.45 % 3.16 % 3.77 % Full-time equivalent employees 2,066 2,070 2,072 2,096 2,050 (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. FIRST FINANCIAL BANCORP . CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) (Unaudited) Mar. 31 , Dec. 31 , Sep. 30 , June 30 , Mar. 31 , % Change % Change 2023 2022 2022 2022 2022 Linked Qtr. Comp Qtr. ASSETS Cash and due from banks $ 199,835 $ 207,501 $ 195,553 $ 217,481 $ 214,571 (3.7) % (6.9) % Interest-bearing deposits with other banks 305,465 388,182 338,978 270,042 243,004 (21.3) % 25.7 % Investment securities available-for-sale 3,384,949 3,409,648 3,531,353 3,843,580 3,957,882 (0.7) % (14.5) % Investment securities held-to-maturity 83,070 84,021 85,823 88,057 92,597 (1.1) % (10.3) % Other investments 143,606 143,160 138,767 132,151 114,563 0.3 % 25.4 % Loans held for sale 9,280 7,918 10,684 22,044 12,670 17.2 % (26.8) % Loans and leases Commercial and industrial 3,449,289 3,410,272 3,139,219 2,927,175 2,800,209 1.1 % 23.2 % Lease financing 273,898 236,124 176,072 146,639 125,867 16.0 % 117.6 % Construction real estate 525,906 512,050 489,446 449,734 479,744 2.7 % 9.6 % Commercial real estate 4,056,627 4,052,759 3,976,345 4,007,037 4,031,484 0.1 % 0.6 % Residential real estate 1,145,069 1,092,265 1,024,596 965,387 913,838 4.8 % 25.3 % Home equity 724,672 733,791 737,318 725,700 707,973 (1.2) % 2.4 % Installment 204,372 209,895 202,267 146,680 132,197 (2.6) % 54.6 % Credit card 53,552 51,815 52,173 52,065 50,305 3.4 % 6.5 % Total loans 10,433,385 10,298,971 9,797,436 9,420,417 9,241,617 1.3 % 12.9 % Less: Allowance for credit losses (141,591) (132,977) (124,096) (117,885) (124,130) 6.5 % 14.1 % Net loans 10,291,794 10,165,994 9,673,340 9,302,532 9,117,487 1.2 % 12.9 % Premises and equipment 188,959 189,080 189,067 191,099 190,975 (0.1) % (1.1) % Operating leases 153,986 91,738 84,851 82,659 61,927 67.9 % 148.7 % Goodwill 1,005,738 1,001,507 998,422 999,959 999,959 0.4 % 0.6 % Other intangibles 91,169 93,919 96,528 99,019 101,673 (2.9) % (10.3) % Accrued interest and other assets 1,076,033 1,220,648 1,280,427 995,091 901,842 (11.8) % 19.3 % Total Assets $ 16,933,884 $ 17,003,316 $ 16,623,793 $ 16,243,714 $ 16,009,150 (0.4) % 5.8 % LIABILITIES Deposits Interest-bearing demand $ 2,761,811 $ 3,037,153 $ 2,980,465 $ 3,096,365 $ 3,246,646 (9.1) % (14.9) % Savings 3,746,403 3,828,139 3,980,020 4,029,717 4,188,867 (2.1) % (10.6) % Time 2,336,368 1,700,705 1,242,412 1,026,918 1,121,966 37.4 % 108.2 % Total interest-bearing deposits 8,844,582 8,565,997 8,202,897 8,153,000 8,557,479 3.3 % 3.4 % Noninterest-bearing 3,830,102 4,135,180 4,137,038 4,124,111 4,261,429 (7.4) % (10.1) % Total deposits 12,674,684 12,701,177 12,339,935 12,277,111 12,818,908 (0.2) % (1.1) % Federal funds purchased and securities sold under agreements to repurchase 0 0 3,535 0 0 0.0 % 0.0 % FHLB short-term borrowings 1,089,400 1,130,000 972,600 896,000 185,000 (3.6) % 488.9 % Other 128,160 157,156 184,912 152,226 57,247 (18.5) % 123.9 % Total short-term borrowings 1,217,560 1,287,156 1,161,047 1,048,226 242,247 (5.4) % 402.6 % Long-term debt 342,647 346,672 355,116 358,578 379,840 (1.2) % (9.8) % Total borrowed funds 1,560,207 1,633,828 1,516,163 1,406,804 622,087 (4.5) % 150.8 % Accrued interest and other liabilities 577,497 626,938 773,563 491,129 430,710 (7.9) % 34.1 % Total Liabilities 14,812,388 14,961,943 14,629,661 14,175,044 13,871,705 (1.0) % 6.8 % SHAREHOLDERS' EQUITY Common stock 1,629,428 1,634,605 1,631,696 1,637,237 1,634,903 (0.3) % (0.3) % Retained earnings 1,016,893 968,237 920,943 887,006 857,178 5.0 % 18.6 % Accumulated other comprehensive income (loss) (328,059) (358,663) (354,570) (243,328) (142,477) (8.5) % 130.3 % Treasury stock, at cost (196,766) (202,806) (203,937) (212,245) (212,159) (3.0) % (7.3) % Total Shareholders' Equity 2,121,496 2,041,373 1,994,132 2,068,670 2,137,445 3.9 % (0.7) % Total Liabilities and Shareholders' Equity $ 16,933,884 $ 17,003,316 $ 16,623,793 $ 16,243,714 $ 16,009,150 (0.4) % 5.8 % FIRST FINANCIAL BANCORP . AVERAGE CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) (Unaudited) Quarterly Averages Mar. 31 , Dec. 31 , Sep. 30 , June 30 , Mar. 31 , 2023 2022 2022 2022 2022 ASSETS Cash and due from banks $ 218,724 $ 218,216 $ 228,068 $ 248,463 $ 241,271 Interest-bearing deposits with other banks 318,026 372,054 317,146 294,136 273,763 Investment securities 3,635,317 3,705,304 4,003,472 4,118,287 4,308,059 Loans held for sale 5,531 8,639 12,283 15,446 15,589 Loans and leases Commercial and industrial 3,456,681 3,249,252 3,040,547 2,884,373 2,736,613 Lease financing 252,219 203,790 158,667 134,334 115,703 Construction real estate 536,294 501,787 469,489 460,609 474,278 Commercial real estate 4,017,021 4,028,944 3,969,935 4,025,493 4,139,072 Residential real estate 1,115,889 1,066,859 998,476 936,165 903,567 Home equity 728,185 735,039 728,791 716,219 703,714 Installment 205,934 208,484 164,063 140,145 125,579 Credit card 55,548 56,325 54,946 55,036 52,659 Total loans 10,367,771 10,050,480 9,584,914 9,352,374 9,251,185 Less: Allowance for credit losses (136,419) (127,541) (119,000) (123,950) (129,601) Net loans 10,231,352 9,922,939 9,465,914 9,228,424 9,121,584 Premises and equipment 190,346 189,342 190,738 191,895 192,832 Operating leases 107,092 88,365 83,970 73,862 61,297 Goodwill 1,005,713 998,575 999,690 999,958 1,000,238 Other intangibles 92,587 95,256 97,781 100,354 103,033 Accrued interest and other assets 1,138,311 1,168,908 986,927 915,153 867,253 Total Assets $ 16,942,999 $ 16,767,598 $ 16,385,989 $ 16,185,978 $ 16,184,919 LIABILITIES Deposits Interest-bearing demand $ 2,906,712 $ 3,103,091 $ 3,105,547 $ 3,180,846 $ 3,246,919 Savings 3,818,807 3,943,342 4,036,565 4,076,380 4,145,615 Time 2,131,707 1,360,681 1,052,669 1,055,650 1,231,266 Total interest-bearing deposits 8,857,226 8,407,114 8,194,781 8,312,876 8,623,800 Noninterest-bearing 3,954,915 4,225,192 4,176,242 4,224,842 4,160,175 Total deposits 12,812,141 12,632,306 12,371,023 12,537,718 12,783,975 Federal funds purchased and securities sold under agreements to repurchase 26,380 16,167 32,637 24,229 45,358 FHLB short-term borrowings 925,144 944,320 892,786 586,846 257,800 Other 139,195 184,439 131,237 109,353 33,297 Total short-term borrowings 1,090,719 1,144,926 1,056,660 720,428 336,455 Long-term debt 343,619 344,162 350,058 359,168 385,240 Total borrowed funds 1,434,338 1,489,088 1,406,718 1,079,596 721,695 Accrued interest and other liabilities 614,310 636,640 519,069 468,994 453,754 Total Liabilities 14,860,789 14,758,034 14,296,810 14,086,308 13,959,424 SHAREHOLDERS' EQUITY Common stock 1,633,396 1,632,941 1,631,078 1,635,990 1,638,321 Retained earnings 989,777 941,987 899,524 866,910 841,652 Accumulated other comprehensive loss (339,450) (361,284) (236,566) (190,949) (38,448) Treasury stock, at cost (201,513) (204,080) (204,857) (212,281) (216,030) Total Shareholders' Equity 2,082,210 2,009,564 2,089,179 2,099,670 2,225,495 Total Liabilities and Shareholders' Equity $ 16,942,999 $ 16,767,598 $ 16,385,989 $ 16,185,978 $ 16,184,919 FIRST FINANCIAL BANCORP . NET INTEREST MARGIN RATE/VOLUME ANALYSIS (Dollars in thousands) (Unaudited) Quarterly Averages March 31, 2023 December 31, 2022 March 31, 2022 Balance Interest Yield Balance Interest Yield Balance Interest Yield Earning assets Investments: Investment securities $ 3,635,317 $ 35,331 3.94 % $ 3,705,304 $ 34,353 3.68 % $ 4,308,059 $ 26,527 2.50 % Interest-bearing deposits with other banks 318,026 3,544 4.52 % 372,054 3,262 3.48 % 273,763 120 0.18 % Gross loans (1) 10,373,302 169,706 6.63 % 10,059,119 152,299 6.01 % 9,266,774 87,182 3.82 % Total earning assets 14,326,645 208,581 5.90 % 14,136,477 189,914 5.33 % 13,848,596 113,829 3.33 % Nonearning assets Allowance for credit losses (136,419) (127,541) (129,601) Cash and due from banks 218,724 218,216 241,271 Accrued interest and other assets 2,534,049 2,540,446 2,224,653 Total assets $ 16,942,999 $ 16,767,598 $ 16,184,919 Interest-bearing liabilities Deposits: Interest-bearing demand $ 2,906,712 $ 6,604 0.92 % $ 3,103,091 $ 5,195 0.66 % $ 3,246,919 $ 492 0.06 % Savings 3,818,807 7,628 0.81 % 3,943,342 4,819 0.48 % 4,145,615 850 0.08 % Time 2,131,707 17,224 3.28 % 1,360,681 6,154 1.79 % 1,231,266 1,281 0.42 % Total interest-bearing deposits 8,857,226 31,456 1.44 % 8,407,114 16,168 0.76 % 8,623,800 2,623 0.12 % Borrowed funds Short-term borrowings 1,090,719 12,950 4.82 % 1,144,926 11,091 3.84 % 336,455 317 0.38 % Long-term debt 343,619 4,857 5.73 % 344,162 4,759 5.49 % 385,240 4,544 4.78 % Total borrowed funds 1,434,338 17,807 5.03 % 1,489,088 15,850 4.22 % 721,695 4,861 2.73 % Total interest-bearing liabilities 10,291,564 49,263 1.94 % 9,896,202 32,018 1.28 % 9,345,495 7,484 0.32 % Noninterest-bearing liabilities Noninterest-bearing demand deposits 3,954,915 4,225,192 4,160,175 Other liabilities 614,310 636,640 453,754 Shareholders' equity 2,082,210 2,009,564 2,225,495 Total liabilities & shareholders' equity $ 16,942,999 $ 16,767,598 $ 16,184,919 Net interest income $ 159,318 $ 157,896 $ 106,345 Net interest spread 3.96 % 4.05 % 3.01 % Net interest margin 4.51 % 4.43 % 3.11 % Tax equivalent adjustment 0.04 % 0.04 % 0.05 % Net interest margin (fully tax equivalent) 4.55 % 4.47 % 3.16 % (1) Loans held for sale and nonaccrual loans are included in gross loans. FIRST FINANCIAL BANCORP . NET INTEREST MARGIN RATE/VOLUME ANALYSIS (1) (Dollars in thousands) (Unaudited) Linked Qtr. Income Variance Comparable Qtr. Income Variance Rate Volume Total Rate Volume Total Earning assets Investment securities $ 2,458 $ (1,480) $ 978 $ 15,342 $ (6,538) $ 8,804 Interest-bearing deposits with other banks 976 (694) 282 2,931 493 3,424 Gross loans (2) 15,924 1,483 17,407 64,421 18,103 82,524 Total earning assets 19,358 (691) 18,667 82,694 12,058 94,752 Interest-bearing liabilities Total interest-bearing deposits $ 14,353 $ 935 $ 15,288 $ 28,004 $ 829 $ 28,833 Borrowed funds Short-term borrowings 2,805 (946) 1,859 3,678 8,955 12,633 Long-term debt 214 (116) 98 901 (588) 313 Total borrowed funds 3,019 (1,062) 1,957 4,579 8,367 12,946 Total interest-bearing liabilities 17,372 (127) 17,245 32,583 9,196 41,779 Net interest income (1) $ 1,986 $ (564) $ 1,422 $ 50,111 $ 2,862 $ 52,973 (1) Not tax equivalent. (2) Loans held for sale and nonaccrual loans are included in gross loans. FIRST FINANCIAL BANCORP . CREDIT QUALITY (Dollars in thousands) (Unaudited) Mar. 31 , Dec. 31 , Sep. 30 , June 30 , Mar. 31 , 2023 2022 2022 2022 2022 ALLOWANCE FOR CREDIT LOSS ACTIVITY Balance at beginning of period $ 132,977 $ 124,096 $ 117,885 $ 124,130 $ 131,992 Provision for credit losses 8,644 8,689 7,898 (4,267) (5,589) Gross charge-offs Commercial and industrial 730 334 1,947 773 2,845 Lease financing 13 0 13 8 131 Construction real estate 0 0 0 0 0 Commercial real estate 66 245 3 3,419 0 Residential real estate 0 79 119 4 22 Home equity 91 72 45 22 21 Installment 1,524 717 294 361 177 Credit card 217 212 237 212 246 Total gross charge-offs 2,641 1,659 2,658 4,799 3,442 Recoveries Commercial and industrial 109 293 90 177 379 Lease financing 1 0 13 3 33 Construction real estate 0 0 0 0 0 Commercial real estate 2,238 1,327 561 2,194 222 Residential real estate 66 15 35 34 90 Home equity 80 88 185 360 265 Installment 54 68 29 47 21 Credit card 63 60 58 6 159 Total recoveries 2,611 1,851 971 2,821 1,169 Total net charge-offs 30 (192) 1,687 1,978 2,273 Ending allowance for credit losses $ 141,591 $ 132,977 $ 124,096 $ 117,885 $ 124,130 NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) Commercial and industrial 0.07 % 0.01 % 0.24 % 0.08 % 0.37 % Lease financing 0.02 % 0.00 % 0.00 % 0.01 % 0.34 % Construction real estate 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Commercial real estate (0.22) % (0.11) % (0.06) % 0.12 % (0.02) % Residential real estate (0.02) % 0.02 % 0.03 % (0.01) % (0.03) % Home equity 0.01 % (0.01) % (0.08) % (0.19) % (0.14) % Installment 2.89 % 1.24 % 0.64 % 0.90 % 0.50 % Credit card 1.12 % 1.07 % 1.29 % 1.50 % 0.67 % Total net charge-offs 0.00 % (0.01) % 0.07 % 0.08 % 0.10 % COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS Nonaccrual loans (1) Commercial and industrial $ 13,971 $ 8,242 $ 8,719 $ 11,675 $ 14,390 Lease financing 175 178 199 217 249 Construction real estate 0 0 0 0 0 Commercial real estate 5,362 5,786 13,435 14,650 19,843 Residential real estate 11,129 10,691 10,250 8,879 7,432 Home equity 3,399 3,123 3,445 3,331 3,377 Installment 544 603 279 170 163 Nonaccrual loans 34,580 28,623 36,327 38,922 45,454 Accruing troubled debt restructurings (TDRs) (2) N/A 10,960 11,022 11,225 8,055 Total nonperforming loans (2) 34,580 39,583 47,349 50,147 53,509 Other real estate owned (OREO) 191 191 22 22 72 Total nonperforming assets (2) 34,771 39,774 47,371 50,169 53,581 Accruing loans past due 90 days or more 159 857 139 142 180 Total underperforming assets (2) $ 34,930 $ 40,631 $ 47,510 $ 50,311 $ 53,761 Total classified assets (2) $ 158,984 $ 128,137 $ 114,956 $ 119,769 $ 106,839 CREDIT QUALITY RATIOS Allowance for credit losses to Nonaccrual loans 409.46 % 464.58 % 341.61 % 302.87 % 273.09 % Nonperforming loans 409.46 % 335.94 % 262.09 % 235.08 % 231.98 % Total ending loans 1.36 % 1.29 % 1.27 % 1.25 % 1.34 % Nonperforming loans to total loans 0.33 % 0.38 % 0.48 % 0.53 % 0.58 % Nonaccrual loans to total loans 0.33 % 0.28 % 0.37 % 0.41 % 0.49 % Nonperforming assets to Ending loans, plus OREO 0.33 % 0.39 % 0.48 % 0.53 % 0.58 % Total assets 0.21 % 0.23 % 0.28 % 0.31 % 0.33 % Nonperforming assets, excluding accruing TDRs to Ending loans, plus OREO 0.33 % 0.28 % 0.37 % 0.41 % 0.49 % Total assets 0.21 % 0.17 % 0.22 % 0.24 % 0.28 % Classified assets to total assets 0.94 % 0.75 % 0.69 % 0.74 % 0.67 % (1) Nonaccrual loans include nonaccrual TDRs of $10.0 million , $12.8 million , $9.5 million , and $16.2 million , as of December 31, 2022 , September 30, 2022 , June 30, 2022 , and March 31, 2022 , respectively. (2) Upon adoption of ASU 2022-02 as of January 1, 2023 , the TDR model was eliminated. Prospectively, disclosures will include modifcations of loans to borrowers experiencing financial difficulty (FDM). FDMs are excluded from nonperforming, underperforming and classified assets. FIRST FINANCIAL BANCORP . CAPITAL ADEQUACY (Dollars in thousands, except per share data) (Unaudited) Mar. 31 , Dec. 31 , Sep. 30 , June 30 , Mar. 31 , 2023 2022 2022 2022 2022 PER COMMON SHARE Market Price High $ 26.24 $ 26.68 $ 23.75 $ 23.03 $ 26.73 Low $ 21.30 $ 21.56 $ 19.02 $ 19.09 $ 22.92 Close $ 21.77 $ 24.23 $ 21.08 $ 19.40 $ 23.05 Average shares outstanding - basic 93,732,532 93,590,674 93,582,250 93,555,131 93,383,932 Average shares outstanding - diluted 94,960,158 94,831,788 94,793,766 94,449,817 94,263,925 Ending shares outstanding 95,190,406 94,891,099 94,833,964 94,448,792 94,451,496 Total shareholders' equity $ 2,121,496 $ 2,041,373 $ 1,994,132 $ 2,068,670 $ 2,137,445 REGULATORY CAPITAL Preliminary Common equity tier 1 capital $ 1,432,332 $ 1,399,420 $ 1,348,413 $ 1,307,259 $ 1,272,115 Common equity tier 1 capital ratio 11.00 % 10.83 % 10.82 % 10.91 % 10.87 % Tier 1 capital $ 1,476,734 $ 1,443,698 $ 1,392,565 $ 1,351,287 $ 1,316,020 Tier 1 ratio 11.34 % 11.17 % 11.17 % 11.28 % 11.24 % Total capital $ 1,778,917 $ 1,762,971 $ 1,711,741 $ 1,670,367 $ 1,635,003 Total capital ratio 13.66 % 13.64 % 13.73 % 13.94 % 13.97 % Total capital in excess of minimum requirement $ 411,234 $ 406,032 $ 402,662 $ 412,167 $ 405,931 Total risk-weighted assets $ 13,025,552 $ 12,923,233 $ 12,467,422 $ 11,982,860 $ 11,705,447 Leverage ratio 9.03 % 8.89 % 8.88 % 8.76 % 8.64 % OTHER CAPITAL RATIOS Ending shareholders' equity to ending assets 12.53 % 12.01 % 12.00 % 12.74 % 13.35 % Ending tangible shareholders' equity to ending tangible assets (1) 6.47 % 5.95 % 5.79 % 6.40 % 6.95 % Average shareholders' equity to average assets 12.29 % 11.98 % 12.75 % 12.97 % 13.75 % Average tangible shareholders' equity to average tangible assets (1) 6.21 % 5.84 % 6.49 % 6.62 % 7.44 % REPURCHASE PROGRAM (2) Shares repurchased 0 0 0 0 0 Average share repurchase price N/A N/A N/A N/A N/A Total cost of shares repurchased N/A N/A N/A N/A N/A (1) Non-GAAP measure. For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation. (2) Represents share repurchases as part of publicly announced plans. N/A = Not applicable View original content: https://www.prnewswire.com/news-releases/first-financial-bancorp-announces-first-quarter-2023-financial-results-301803569.html SOURCE First Financial Bancorp .

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