First Financial Bancorp Announces Second Quarter 2023 Financial Results

About this update from First Financial Bancorp.

Earnings per diluted share of $0.69 ; $0.72 on an adjusted (1) basis, 29% increase YoY Return on average assets of 1.55%; 1.62% on an adjusted (1) basis Net interest margin on FTE basis (1) of 4.48%; 7 bp decrease from linked quarter Loan growth of $117 million ; 4.5% on an annualized basis Strong adjusted (1) fee income of $53.5 million driven by foreign exchange and wealth management ACL to total loans of 1.41%; Classified assets declined 13% from linked quarter All capital ratios increased from the linked quarter; Regulatory ratios well in excess of targets CINCINNATI , July 20, 2023 /PRNewswire/ -- First Financial Bancorp . (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and six months ended June 30, 2023 . For the three months ended June 30, 2023 , the Company reported net income of $65.7 million , or $0.69 per diluted common share. These results compare to net income of $70.4 million , or $0.74 per diluted common share, for the first quarter of 2023. For the six months ended June 30, 2023 , First Financial had earnings per diluted share of $1.43 compared to $0.98 for the same period in 2022. Return on average assets for the second quarter of 2023 was 1.55% while return on average tangible common equity was 25.27%(1). These compare to return on average assets of 1.69% and return on average tangible common equity of 29.02%(1) in the first quarter of 2023. Second quarter 2023 highlights include: Net interest margin of 4.43%, or 4.48% on a fully tax-equivalent basis(1) 7 bp decrease to 4.48% from 4.55% in the first quarter due to increasing deposit costs Higher asset yields significantly offset 40 bp increase in cost of deposits Average deposit balances decreased $98.3 million with growth in brokered and retail CDs offsetting declines in noninterest bearing checking and savings accounts Noninterest income of $53.3 million , or $53.5 million as adjusted(1) Foreign exchange income of $15.0 million reflected continued strong activity Record wealth management fees of $6.7 million ; 6.0% increase from first quarter Leasing business income of $10.3 million ; 24.9% decline from first quarter due to change in mix Adjusted(1) $0.2 million for losses on investment securities and gain related to the LIBOR cessation Noninterest expenses of $120.6 million , or $116.9 million as adjusted(1) $3.9 million increase from first quarter driven primarily by higher employee costs and online banking conversion Second quarter adjustments(1) include $1.0 million tax credit investment writedown, $1.7 million of costs related to our online banking conversion and $1.0 million of other costs not expected to recur such as acquisition, severance and branch consolidation costs Efficiency ratio of 56.8%; 54.9% 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 , and June 30, 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 $116.8 million compared to the first quarter Growth of 4.5% on an annualized basis Residential mortgage and equipment leases drove quarterly growth Total Allowance for Credit Losses of $166.9 million ; Total quarterly provision expense of $10.7 million Loans and leases - ACL of $148.6 million ; increased 5 bps to 1.41% of total loans Unfunded Commitments - ACL of $18.2 million Provision expense driven by slower prepayment speeds, net charge-offs and loan growth Classified assets declined 12.6% to $138.9 million ; Net charge-offs 22 bps of total loans Capital ratios remain solid Total capital ratio increased 28 bps to 13.94% Tier 1 common equity increased 30 bps to 11.30% Tangible common equity increased 9 bps to 6.56%(1); 8.76%(1) excluding impact from AOCI Tangible book value per share of $11.02 (1) Archie Brown , President and CEO, commented on the quarter, "I continue to be pleased with our performance this year. Earnings in the second quarter were once again very strong as an expected increase in deposit costs was mostly offset by higher asset yields. Adjusted(1) earnings per share were $0.72 , which was a 29% increase compared to the same quarter in 2022, while the adjusted(1) returns on assets and tangible common equity were 1.62% and 26.46%, respectively. Net interest margin exceeded expectations during the period as our asset sensitive balance sheet has enabled the company to successfully navigate the higher interest rate environment. We were encouraged by the stabilization of deposit balances in the last half of the quarter. Personal, business and public fund deposits were stable to increasing from May to June while the mix continued to shift to interest bearing products." Mr. Brown continued, "Our fee income largely exceeded our expectations this quarter, with strong performance from mortgage banking, client swaps and wealth management. Summit Funding Group had another nice quarter in originations although the mix has shifted to a higher level of finance leases and loans. This shift has bolstered our net interest income but resulted in less fee income during the period." Mr. Brown commented on loan growth and quality, "Loan growth was in line with expectations for the period. While loan activity slowed early in the quarter and we experienced higher commercial line pay downs, loan pipelines strengthened in recent weeks. We expect moderate loan growth in the second half of the year. We were pleased that asset quality remained strong during the quarter. Net charge-offs were 22 bps on an annualized basis after being zero last quarter and a net recovery in the fourth quarter of 2022 while classified assets declined 13% from the linked quarter." Mr. Brown concluded, "We are extremely pleased with our results this quarter. The position of our balance sheet, strong net interest margin, consistent loan growth, robust fee income and stable asset quality is expected to sustain our performance in the back half of the year. Additionally, our earnings power, strong and increasing capital levels and high reserve levels provide additional support in the event of a downturn in the economy." Full detail of the Company's second 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, July 21, 2023 at 8:30 a.m. Eastern Time . Members of the public who would like to listen to the conference call should dial (888) 550-5723 ( U.S. toll free) or (646) 960-0471 ( U.S. local), access code 5048068. 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 (800) 770-2030 ( U.S. toll free), (647) 362-9199 ( U.S. local), access code 5048068. The recording will be available until August 5, 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 Relations section 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 Non-GAAP 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 forward-looking 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 forward-looking 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 our allowance 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 will not 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 any slowdown in global economic growth; the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impact on the performance of our loan and lease portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products; our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital 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 a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services; the effect of the current interest rate environment or changes in interest rates or in the level or composition of 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-party vendors 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 net interest 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 June 30, 2023 , the Company had $17.1 billion in assets, $10.6 billion in loans, $12.8 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 June 30, 2023 . The Company operated 130 full service banking centers as of June 30, 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, Six months ended, June 30 , Mar. 31 , Dec. 31 , Sep. 30 , June 30 , June 30 , 2023 2023 2022 2022 2022 2023 2022 RESULTS OF OPERATIONS Net income $ 65,667 $ 70,403 $ 69,086 $ 55,705 $ 51,520 $ 136,070 $ 92,821 Net earnings per share - basic $ 0.70 $ 0.75 $ 0.74 $ 0.60 $ 0.55 $ 1.45 $ 0.99 Net earnings per share - diluted $ 0.69 $ 0.74 $ 0.73 $ 0.59 $ 0.55 $ 1.43 $ 0.98 Dividends declared per share $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.46 $ 0.46 KEY FINANCIAL RATIOS Return on average assets 1.55 % 1.69 % 1.63 % 1.35 % 1.28 % 1.62 % 1.16 % Return on average shareholders' equity 12.32 % 13.71 % 13.64 % 10.58 % 9.84 % 13.00 % 8.66 % Return on average tangible shareholders' equity (1) 25.27 % 29.02 % 29.93 % 22.29 % 20.68 % 27.08 % 17.65 % Net interest margin 4.43 % 4.51 % 4.43 % 3.93 % 3.41 % 4.47 % 3.26 % Net interest margin (fully tax equivalent) (1)(2) 4.48 % 4.55 % 4.47 % 3.98 % 3.45 % 4.51 % 3.31 % Ending shareholders' equity as a percent of ending assets 12.54 % 12.53 % 12.01 % 12.00 % 12.74 % 12.54 % 12.74 % Ending tangible shareholders' equity as a percent of: Ending tangible assets (1) 6.56 % 6.47 % 5.95 % 5.79 % 6.40 % 6.56 % 6.40 % Risk-weighted assets (1) 8.00 % 7.87 % 7.32 % 7.21 % 8.09 % 8.00 % 8.09 % Average shareholders' equity as a percent of average assets 12.60 % 12.29 % 11.98 % 12.75 % 12.97 % 12.45 % 13.36 % Average tangible shareholders' equity as a percent of average tangible assets (1) 6.57 % 6.21 % 5.84 % 6.49 % 6.62 % 6.39 % 7.03 % Book value per share $ 22.52 $ 22.29 $ 21.51 $ 21.03 $ 21.90 $ 22.52 $ 21.90 Tangible book value per share (1) $ 11.02 $ 10.76 $ 9.97 $ 9.48 $ 10.27 $ 11.02 $ 10.27 Common equity tier 1 ratio (3) 11.30 % 11.00 % 10.83 % 10.82 % 10.91 % 11.30 % 10.91 % Tier 1 ratio (3) 11.64 % 11.34 % 11.17 % 11.17 % 11.28 % 11.64 % 11.28 % Total capital ratio (3) 13.94 % 13.66 % 13.64 % 13.73 % 13.94 % 13.94 % 13.94 % Leverage ratio (3) 9.33 % 9.03 % 8.89 % 8.88 % 8.76 % 9.33 % 8.76 % AVERAGE BALANCE SHEET ITEMS Loans (4) $ 10,513,505 $ 10,373,302 $ 10,059,119 $ 9,597,197 $ 9,367,820 $ 10,443,791 $ 9,317,576 Investment securities 3,560,453 3,635,317 3,705,304 4,003,472 4,118,287 3,597,678 4,212,649 Interest-bearing deposits with other banks 329,584 318,026 372,054 317,146 294,136 323,837 284,006 Total earning assets $ 14,403,542 $ 14,326,645 $ 14,136,477 $ 13,917,815 $ 13,780,243 $ 14,365,306 $ 13,814,231 Total assets $ 16,968,055 $ 16,942,999 $ 16,767,598 $ 16,385,989 $ 16,185,978 $ 16,955,596 $ 16,185,451 Noninterest-bearing deposits $ 3,663,419 $ 3,954,915 $ 4,225,192 $ 4,176,242 $ 4,224,842 $ 3,808,362 $ 4,192,687 Interest-bearing deposits 9,050,464 8,857,226 8,407,114 8,194,781 8,312,876 8,954,379 8,467,479 Total deposits $ 12,713,883 $ 12,812,141 $ 12,632,306 $ 12,371,023 $ 12,537,718 $ 12,762,741 $ 12,660,166 Borrowings $ 1,523,699 $ 1,434,338 $ 1,489,088 $ 1,406,718 $ 1,079,596 $ 1,479,265 $ 901,634 Shareholders' equity $ 2,137,765 $ 2,082,210 $ 2,009,564 $ 2,089,179 $ 2,099,670 $ 2,110,141 $ 2,162,235 CREDIT QUALITY RATIOS Allowance to ending loans 1.41 % 1.36 % 1.29 % 1.27 % 1.25 % 1.41 % 1.25 % Allowance to nonaccrual loans 276.70 % 409.46 % 464.58 % 341.61 % 302.87 % 276.70 % 302.87 % Allowance to nonperforming loans 276.70 % 409.46 % 335.94 % 262.09 % 235.08 % 276.70 % 235.08 % Nonperforming loans to total loans 0.51 % 0.33 % 0.38 % 0.48 % 0.53 % 0.51 % 0.53 % Nonaccrual loans to total loans 0.51 % 0.33 % 0.28 % 0.37 % 0.41 % 0.51 % 0.41 % Nonperforming assets to ending loans, plus OREO 0.51 % 0.33 % 0.39 % 0.48 % 0.53 % 0.51 % 0.53 % Nonperforming assets to total assets 0.32 % 0.21 % 0.23 % 0.28 % 0.31 % 0.32 % 0.31 % Classified assets to total assets 0.81 % 0.94 % 0.75 % 0.69 % 0.74 % 0.81 % 0.74 % Net charge-offs to average loans (annualized) 0.22 % 0.00 % (0.01) % 0.07 % 0.08 % 0.11 % 0.09 % (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) June 30, 2023 regulatory capital ratios are preliminary. (4) Includes loans held for sale. FIRST FINANCIAL BANCORP . CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) Three months ended, Six months ended, June 30 , June 30 , 2023 2022 % Change 2023 2022 % Change Interest income Loans and leases, including fees $ 184,387 $ 97,091 89.9 % $ 354,093 $ 184,273 92.2 % Investment securities Taxable 32,062 23,639 35.6 % 63,929 45,735 39.8 % Tax-exempt 3,513 4,916 (28.5) % 6,977 9,347 (25.4) % Total investment securities interest 35,575 28,555 24.6 % 70,906 55,082 28.7 % Other earning assets 3,933 505 678.8 % 7,477 625 1,096.3 % Total interest income 223,895 126,151 77.5 % 432,476 239,980 80.2 % Interest expense Deposits 44,292 2,963 1,394.8 % 75,748 5,586 1,256.0 % Short-term borrowings 15,536 1,566 892.1 % 28,486 1,883 1,412.8 % Long-term borrowings 4,835 4,612 4.8 % 9,692 9,156 5.9 % Total interest expense 64,663 9,141 607.4 % 113,926 16,625 585.3 % Net interest income 159,232 117,010 36.1 % 318,550 223,355 42.6 % Provision for credit losses-loans and leases 12,719 (4,267) (398.1) % 21,363 (9,856) (316.8) % Provision for credit losses-unfunded commitments (1,994) 3,481 (157.3) % (159) 3,255 (104.9) % Net interest income after provision for credit losses 148,507 117,796 26.1 % 297,346 229,956 29.3 % Noninterest income Service charges on deposit accounts 6,972 7,648 (8.8) % 13,486 15,377 (12.3) % Wealth management fees 6,713 6,311 6.4 % 13,047 12,371 5.5 % Bankcard income 3,692 3,823 (3.4) % 7,284 7,160 1.7 % Client derivative fees 1,827 1,369 33.5 % 2,832 2,172 30.4 % Foreign exchange income 15,039 13,470 11.6 % 31,937 23,621 35.2 % Leasing business income 10,265 7,247 41.6 % 23,929 13,323 79.6 % Net gains from sales of loans 3,839 5,241 (26.8) % 6,174 9,113 (32.3) % Net gain (loss) on sale of investment securities (384) 0 N/M (903) 3 N/M Net gain (loss) on equity securities (82) (1,054) (92.2) % 558 (1,253) (144.5) % Other 5,377 5,723 (6.0) % 10,457 9,185 13.8 % Total noninterest income 53,258 49,778 7.0 % 108,801 91,072 19.5 % Noninterest expenses Salaries and employee benefits 74,199 64,992 14.2 % 146,453 128,939 13.6 % Net occupancy 5,606 5,359 4.6 % 11,291 11,105 1.7 % Furniture and equipment 3,362 3,201 5.0 % 6,679 6,768 (1.3) % Data processing 9,871 8,334 18.4 % 18,891 16,598 13.8 % Marketing 2,802 2,323 20.6 % 4,962 4,023 23.3 % Communication 644 670 (3.9) % 1,278 1,336 (4.3) % Professional services 2,308 2,214 4.2 % 4,254 4,373 (2.7) % State intangible tax 964 1,090 (11.6) % 1,949 2,221 (12.2) % FDIC assessments 2,806 1,677 67.3 % 5,632 3,136 79.6 % Intangible amortization 2,601 2,915 (10.8) % 5,201 5,829 (10.8) % Leasing business expense 6,730 4,687 43.6 % 14,668 8,556 71.4 % Other 8,722 5,572 56.5 % 16,050 12,955 23.9 % Total noninterest expenses 120,615 103,034 17.1 % 237,308 205,839 15.3 % Income before income taxes 81,150 64,540 25.7 % 168,839 115,189 46.6 % Income tax expense (benefit) 15,483 13,020 18.9 % 32,769 22,368 46.5 % Net income $ 65,667 $ 51,520 27.5 % $ 136,070 $ 92,821 46.6 % ADDITIONAL DATA Net earnings per share - basic $ 0.70 $ 0.55 $ 1.45 $ 0.99 Net earnings per share - diluted $ 0.69 $ 0.55 $ 1.43 $ 0.98 Dividends declared per share $ 0.23 $ 0.23 $ 0.46 $ 0.46 Return on average assets 1.55 % 1.28 % 1.62 % 1.16 % Return on average shareholders' equity 12.32 % 9.84 % 13.00 % 8.66 % Interest income $ 223,895 $ 126,151 77.5 % $ 432,476 $ 239,980 80.2 % Tax equivalent adjustment 1,601 1,625 (1.5) % 3,025 3,092 (2.2) % Interest income - tax equivalent 225,496 127,776 76.5 % 435,501 243,072 79.2 % Interest expense 64,663 9,141 607.4 % 113,926 16,625 585.3 % Net interest income - tax equivalent $ 160,833 $ 118,635 35.6 % $ 321,575 $ 226,447 42.0 % Net interest margin 4.43 % 3.41 % 4.47 % 3.26 % Net interest margin (fully tax equivalent) (1) 4.48 % 3.45 % 4.51 % 3.31 % Full-time equivalent employees 2,193 2,096 (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 QUARTERLY STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) 2023 Second First Year to % Change Quarter Quarter Date Linked Qtr. Interest income Loans and leases, including fees $ 184,387 $ 169,706 $ 354,093 8.7 % Investment securities Taxable 32,062 31,867 63,929 0.6 % Tax-exempt 3,513 3,464 6,977 1.4 % Total investment securities interest 35,575 35,331 70,906 0.7 % Other earning assets 3,933 3,544 7,477 11.0 % Total interest income 223,895 208,581 432,476 7.3 % Interest expense Deposits 44,292 31,456 75,748 40.8 % Short-term borrowings 15,536 12,950 28,486 20.0 % Long-term borrowings 4,835 4,857 9,692 (0.5) % Total interest expense 64,663 49,263 113,926 31.3 % Net interest income 159,232 159,318 318,550 (0.1) % Provision for credit losses-loans and leases 12,719 8,644 21,363 47.1 % Provision for credit losses-unfunded commitments (1,994) 1,835 (159) (208.7) % Net interest income after provision for credit losses 148,507 148,839 297,346 (0.2) % Noninterest income Service charges on deposit accounts 6,972 6,514 13,486 7.0 % Wealth management fees 6,713 6,334 13,047 6.0 % Bankcard income 3,692 3,592 7,284 2.8 % Client derivative fees 1,827 1,005 2,832 81.8 % Foreign exchange income 15,039 16,898 31,937 (11.0) % Leasing business income 10,265 13,664 23,929 (24.9) % Net gains from sales of loans 3,839 2,335 6,174 64.4 % Net gain (loss) on sale of investment securities (384) (519) (903) (26.0) % Net gain (loss) on equity securities (82) 640 558 112.8 % Other 5,377 5,080 10,457 5.8 % Total noninterest income 53,258 55,543 108,801 (4.1) % Noninterest expenses Salaries and employee benefits 74,199 72,254 146,453 2.7 % Net occupancy 5,606 5,685 11,291 (1.4) % Furniture and equipment 3,362 3,317 6,679 1.4 % Data processing 9,871 9,020 18,891 9.4 % Marketing 2,802 2,160 4,962 29.7 % Communication 644 634 1,278 1.6 % Professional services 2,308 1,946 4,254 18.6 % State intangible tax 964 985 1,949 (2.1) % FDIC assessments 2,806 2,826 5,632 (0.7) % Intangible amortization 2,601 2,600 5,201 0.0 % Leasing business expense 6,730 7,938 14,668 (15.2) % Other 8,722 7,328 16,050 19.0 % Total noninterest expenses 120,615 116,693 237,308 3.4 % Income before income taxes 81,150 87,689 168,839 (7.5) % Income tax expense (benefit) 15,483 17,286 32,769 (10.4) % Net income $ 65,667 $ 70,403 $ 136,070 (6.7) % ADDITIONAL DATA Net earnings per share - basic $ 0.70 $ 0.75 $ 1.45 Net earnings per share - diluted $ 0.69 $ 0.74 $ 1.43 Dividends declared per share $ 0.23 $ 0.23 $ 0.46 Return on average assets 1.55 % 1.69 % 1.62 % Return on average shareholders' equity 12.32 % 13.71 % 13.00 % Interest income $ 223,895 $ 208,581 $ 432,476 7.3 % Tax equivalent adjustment 1,601 1,424 3,025 12.4 % Interest income - tax equivalent 225,496 210,005 435,501 7.4 % Interest expense 64,663 49,263 113,926 31.3 % Net interest income - tax equivalent $ 160,833 $ 160,742 $ 321,575 0.1 % Net interest margin 4.43 % 4.51 % 4.47 % Net interest margin (fully tax equivalent) (1) 4.48 % 4.55 % 4.51 % Full-time equivalent employees 2,193 2,066 (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 QUARTERLY STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) 2022 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income Loans and leases, including fees $ 152,299 $ 122,170 $ 97,091 $ 87,182 $ 458,742 Investment securities Taxable 30,248 26,331 23,639 22,096 102,314 Tax-exempt 4,105 5,014 4,916 4,431 18,466 Total investment securities interest 34,353 31,345 28,555 26,527 120,780 Other earning assets 3,262 1,597 505 120 5,484 Total interest income 189,914 155,112 126,151 113,829 585,006 Interest expense Deposits 16,168 6,386 2,963 2,623 28,140 Short-term borrowings 11,091 6,158 1,566 317 19,132 Long-term borrowings 4,759 4,676 4,612 4,544 18,591 Total interest expense 32,018 17,220 9,141 7,484 65,863 Net interest income 157,896 137,892 117,010 106,345 519,143 Provision for credit losses-loans and leases 8,689 7,898 (4,267) (5,589) 6,731 Provision for credit losses-unfunded commitments 1,341 386 3,481 (226) 4,982 Net interest income after provision for credit losses 147,866 129,608 117,796 112,160 507,430 Noninterest income Service charges on deposit accounts 6,406 6,279 7,648 7,729 28,062 Wealth management fees 5,648 5,487 6,311 6,060 23,506 Bankcard income 3,736 3,484 3,823 3,337 14,380 Client derivative fees 1,822 1,447 1,369 803 5,441 Foreign exchange income 19,592 11,752 13,470 10,151 54,965 Leasing business income 11,124 7,127 7,247 6,076 31,574 Net gains from sales of loans 2,206 3,729 5,241 3,872 15,048 Net gain (loss) on sale of investment securities (393) (179) 0 3 (569) Net gain (loss) on equity securities 1,315 (701) (1,054) (199) (639) Other 4,579 4,109 5,723 3,462 17,873 Total noninterest income 56,035 42,534 49,778 41,294 189,641 Noninterest expenses Salaries and employee benefits 73,621 66,808 64,992 63,947 269,368 Net occupancy 5,434 5,669 5,359 5,746 22,208 Furniture and equipment 3,234 3,222 3,201 3,567 13,224 Data processing 8,567 8,497 8,334 8,264 33,662 Marketing 2,198 2,523 2,323 1,700 8,744 Communication 690 657 670 666 2,683 Professional services 3,015 2,346 2,214 2,159 9,734 State intangible tax 974 1,090 1,090 1,131 4,285 FDIC assessments 2,173 1,885 1,677 1,459 7,194 Intangible amortization 2,573 2,783 2,915 2,914 11,185 Leasing business expense 6,061 5,746 4,687 3,869 20,363 Other 15,902 23,842 5,572 7,383 52,699 Total noninterest expenses 124,442 125,068 103,034 102,805 455,349 Income before income taxes 79,459 47,074 64,540 50,649 241,722 Income tax expense (benefit) 10,373 (8,631) 13,020 9,348 24,110 Net income $ 69,086 $ 55,705 $ 51,520 $ 41,301 $ 217,612 ADDITIONAL DATA Net earnings per share - basic $ 0.74 $ 0.60 $ 0.55 $ 0.44 $ 2.33 Net earnings per share - diluted $ 0.73 $ 0.59 $ 0.55 $ 0.44 $ 2.30 Dividends declared per share $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.92 Return on average assets 1.63 % 1.35 % 1.28 % 1.03 % 1.33 % Return on average shareholders' equity 13.64 % 10.58 % 9.84 % 7.53 % 10.34 % Interest income $ 189,914 $ 155,112 $ 126,151 $ 113,829 $ 585,006 Tax equivalent adjustment 1,553 1,712 1,625 1,467 6,357 Interest income - tax equivalent 191,467 156,824 127,776 115,296 591,363 Interest expense 32,018 17,220 9,141 7,484 65,863 Net interest income - tax equivalent $ 159,449 $ 139,604 $ 118,635 $ 107,812 $ 525,500 Net interest margin 4.43 % 3.93 % 3.41 % 3.11 % 3.73 % Net interest margin (fully tax equivalent) (1) 4.47 % 3.98 % 3.45 % 3.16 % 3.77 % Full-time equivalent employees 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) June 30 , Mar. 31 , Dec. 31 , Sep. 30 , June 30 , % Change % Change 2023 2023 2022 2022 2022 Linked Qtr. Comp Qtr. ASSETS Cash and due from banks $ 217,385 $ 199,835 $ 207,501 $ 195,553 $ 217,481 8.8 % 0.0 % Interest-bearing deposits with other banks 485,241 305,465 388,182 338,978 270,042 58.9 % 79.7 % Investment securities available-for-sale 3,249,404 3,384,949 3,409,648 3,531,353 3,843,580 (4.0) % (15.5) % Investment securities held-to-maturity 82,372 83,070 84,021 85,823 88,057 (0.8) % (6.5) % Other investments 141,892 143,606 143,160 138,767 132,151 (1.2) % 7.4 % Loans held for sale 15,267 9,280 7,918 10,684 22,044 64.5 % (30.7) % Loans and leases Commercial and industrial 3,433,162 3,449,289 3,410,272 3,139,219 2,927,175 (0.5) % 17.3 % Lease financing 360,801 273,898 236,124 176,072 146,639 31.7 % 146.0 % Construction real estate 536,464 525,906 512,050 489,446 449,734 2.0 % 19.3 % Commercial real estate 4,048,460 4,056,627 4,052,759 3,976,345 4,007,037 (0.2) % 1.0 % Residential real estate 1,221,484 1,145,069 1,092,265 1,024,596 965,387 6.7 % 26.5 % Home equity 728,711 724,672 733,791 737,318 725,700 0.6 % 0.4 % Installment 165,216 204,372 209,895 202,267 146,680 (19.2) % 12.6 % Credit card 55,911 53,552 51,815 52,173 52,065 4.4 % 7.4 % Total loans 10,550,209 10,433,385 10,298,971 9,797,436 9,420,417 1.1 % 12.0 % Less: Allowance for credit losses (148,646) (141,591) (132,977) (124,096) (117,885) 5.0 % 26.1 % Net loans 10,401,563 10,291,794 10,165,994 9,673,340 9,302,532 1.1 % 11.8 % Premises and equipment 192,077 188,959 189,080 189,067 191,099 1.7 % 0.5 % Operating leases 132,272 153,986 91,738 84,851 82,659 (14.1) % 60.0 % Goodwill 1,005,828 1,005,738 1,001,507 998,422 999,959 0.0 % 0.6 % Other intangibles 88,662 91,169 93,919 96,528 99,019 (2.7) % (10.5) % Accrued interest and other assets 1,078,186 1,076,033 1,220,648 1,280,427 995,091 0.2 % 8.4 % Total Assets $ 17,090,149 $ 16,933,884 $ 17,003,316 $ 16,623,793 $ 16,243,714 0.9 % 5.2 % LIABILITIES Deposits Interest-bearing demand $ 2,919,472 $ 2,761,811 $ 3,037,153 $ 2,980,465 $ 3,096,365 5.7 % (5.7) % Savings 3,785,445 3,746,403 3,828,139 3,980,020 4,029,717 1.0 % (6.1) % Time 2,484,780 2,336,368 1,700,705 1,242,412 1,026,918 6.4 % 142.0 % Total interest-bearing deposits 9,189,697 8,844,582 8,565,997 8,202,897 8,153,000 3.9 % 12.7 % Noninterest-bearing 3,605,181 3,830,102 4,135,180 4,137,038 4,124,111 (5.9) % (12.6) % Total deposits 12,794,878 12,674,684 12,701,177 12,339,935 12,277,111 0.9 % 4.2 % Federal funds purchased and securities sold under agreements to repurchase 0 0 0 3,535 0 0.0 % 0.0 % FHLB short-term borrowings 1,050,300 1,089,400 1,130,000 972,600 896,000 (3.6) % 17.2 % Other 165,983 128,160 157,156 184,912 152,226 29.5 % 9.0 % Total short-term borrowings 1,216,283 1,217,560 1,287,156 1,161,047 1,048,226 (0.1) % 16.0 % Long-term debt 339,963 342,647 346,672 355,116 358,578 (0.8) % (5.2) % Total borrowed funds 1,556,246 1,560,207 1,633,828 1,516,163 1,406,804 (0.3) % 10.6 % Accrued interest and other liabilities 595,606 577,497 626,938 773,563 491,129 3.1 % 21.3 % Total Liabilities 14,946,730 14,812,388 14,961,943 14,629,661 14,175,044 0.9 % 5.4 % SHAREHOLDERS' EQUITY Common stock 1,632,659 1,629,428 1,634,605 1,631,696 1,637,237 0.2 % (0.3) % Retained earnings 1,060,715 1,016,893 968,237 920,943 887,006 4.3 % 19.6 % Accumulated other comprehensive income (loss) (353,010) (328,059) (358,663) (354,570) (243,328) 7.6 % 45.1 % Treasury stock, at cost (196,945) (196,766) (202,806) (203,937) (212,245) 0.1 % (7.2) % Total Shareholders' Equity 2,143,419 2,121,496 2,041,373 1,994,132 2,068,670 1.0 % 3.6 % Total Liabilities and Shareholders' Equity $ 17,090,149 $ 16,933,884 $ 17,003,316 $ 16,623,793 $ 16,243,714 0.9 % 5.2 % FIRST FINANCIAL BANCORP . AVERAGE CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) (Unaudited) Quarterly Averages Year-to-Date Averages June 30 , Mar. 31 , Dec. 31 , Sep. 30 , June 30 , June 30 , 2023 2023 2022 2022 2022 2023 2022 ASSETS Cash and due from banks $ 221,527 $ 218,724 $ 218,216 $ 228,068 $ 248,463 $ 220,133 $ 244,887 Interest-bearing deposits with other banks 329,584 318,026 372,054 317,146 294,136 323,837 284,006 Investment securities 3,560,453 3,635,317 3,705,304 4,003,472 4,118,287 3,597,678 4,212,649 Loans held for sale 11,856 5,531 8,639 12,283 15,446 8,711 15,517 Loans and leases Commercial and industrial 3,469,683 3,456,681 3,249,252 3,040,547 2,884,373 3,463,218 2,810,901 Lease financing 323,819 252,219 203,790 158,667 134,334 288,217 125,070 Construction real estate 518,190 536,294 501,787 469,489 460,609 527,192 467,406 Commercial real estate 4,050,946 4,017,021 4,028,944 3,969,935 4,025,493 4,034,077 4,081,969 Residential real estate 1,181,053 1,115,889 1,066,859 998,476 936,165 1,148,651 919,956 Home equity 726,333 728,185 735,039 728,791 716,219 727,254 710,001 Installment 172,147 205,934 208,484 164,063 140,145 188,947 132,902 Credit card 59,478 55,548 56,325 54,946 55,036 57,524 53,854 Total loans 10,501,649 10,367,771 10,050,480 9,584,914 9,352,374 10,435,080 9,302,059 Less: Allowance for credit losses (145,578) (136,419) (127,541) (119,000) (123,950) (141,024) (126,760) Net loans 10,356,071 10,231,352 9,922,939 9,465,914 9,228,424 10,294,056 9,175,299 Premises and equipment 190,583 190,346 189,342 190,738 191,895 190,465 192,361 Operating leases 138,725 107,092 88,365 83,970 73,862 122,996 67,614 Goodwill 1,005,791 1,005,713 998,575 999,690 999,958 1,005,752 1,000,097 Other intangibles 89,878 92,587 95,256 97,781 100,354 91,225 101,686 Accrued interest and other assets 1,063,587 1,138,311 1,168,908 986,927 915,153 1,100,743 891,335 Total Assets $ 16,968,055 $ 16,942,999 $ 16,767,598 $ 16,385,989 $ 16,185,978 $ 16,955,596 $ 16,185,451 LIABILITIES Deposits Interest-bearing demand $ 2,906,855 $ 2,906,712 $ 3,103,091 $ 3,105,547 $ 3,180,846 $ 2,906,784 $ 3,213,700 Savings 3,749,902 3,818,807 3,943,342 4,036,565 4,076,380 3,784,164 4,110,806 Time 2,393,707 2,131,707 1,360,681 1,052,669 1,055,650 2,263,431 1,142,973 Total interest-bearing deposits 9,050,464 8,857,226 8,407,114 8,194,781 8,312,876 8,954,379 8,467,479 Noninterest-bearing 3,663,419 3,954,915 4,225,192 4,176,242 4,224,842 3,808,362 4,192,687 Total deposits 12,713,883 12,812,141 12,632,306 12,371,023 12,537,718 12,762,741 12,660,166 Federal funds purchased and securities sold under agreements to repurchase 21,881 26,380 16,167 32,637 24,229 24,118 34,735 FHLB short-term borrowings 1,028,207 925,144 944,320 892,786 586,846 976,960 423,232 Other 132,088 139,195 184,439 131,237 109,353 135,622 71,535 Total short-term borrowings 1,182,176 1,090,719 1,144,926 1,056,660 720,428 1,136,700 529,502 Long-term debt 341,523 343,619 344,162 350,058 359,168 342,565 372,132 Total borrowed funds 1,523,699 1,434,338 1,489,088 1,406,718 1,079,596 1,479,265 901,634 Accrued interest and other liabilities 592,708 614,310 636,640 519,069 468,994 603,449 461,416 Total Liabilities 14,830,290 14,860,789 14,758,034 14,296,810 14,086,308 14,845,455 14,023,216 SHAREHOLDERS' EQUITY Common stock 1,631,230 1,633,396 1,632,941 1,631,078 1,635,990 1,632,307 1,637,149 Retained earnings 1,034,092 989,777 941,987 899,524 866,910 1,012,057 854,351 Accumulated other comprehensive loss (330,263) (339,450) (361,284) (236,566) (190,949) (334,831) (115,120) Treasury stock, at cost (197,294) (201,513) (204,080) (204,857) (212,281) (199,392) (214,145) Total Shareholders' Equity 2,137,765 2,082,210 2,009,564 2,089,179 2,099,670 2,110,141 2,162,235 Total Liabilities and Shareholders' Equity $ 16,968,055 $ 16,942,999 $ 16,767,598 $ 16,385,989 $ 16,185,978 $ 16,955,596 $ 16,185,451 FIRST FINANCIAL BANCORP . NET INTEREST MARGIN RATE/VOLUME ANALYSIS (Dollars in thousands) (Unaudited) Quarterly Averages Year-to-Date Averages June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Balance Interest Yield Balance Interest Yield Balance Interest Yield Balance Yield Balance Yield Earning assets Investments: Investment securities $ 3,560,453 $ 35,575 4.01 % $ 3,635,317 $ 35,331 3.94 % $ 4,118,287 $ 28,555 2.78 % $ 3,597,678 3.97 % $ 4,212,649 2.64 % Interest-bearing deposits with other banks 329,584 3,933 4.79 % 318,026 3,544 4.52 % 294,136 505 0.69 % 323,837 4.66 % 284,006 0.44 % Gross loans (1) 10,513,505 184,387 7.03 % 10,373,302 169,706 6.63 % 9,367,820 97,091 4.16 % 10,443,791 6.84 % 9,317,576 3.99 % Total earning assets 14,403,542 223,895 6.23 % 14,326,645 208,581 5.90 % 13,780,243 126,151 3.67 % 14,365,306 6.07 % 13,814,231 3.50 % Nonearning assets Allowance for credit losses (145,578) (136,419) (123,950) (141,024) (126,760) Cash and due from banks 221,527 218,724 248,463 220,133 244,887 Accrued interest and other assets 2,488,564 2,534,049 2,281,222 2,511,181 2,253,093 Total assets $ 16,968,055 $ 16,942,999 $ 16,185,978 $ 16,955,596 $ 16,185,451 Interest-bearing liabilities Deposits: Interest-bearing demand $ 2,906,855 $ 8,351 1.15 % $ 2,906,712 $ 6,604 0.92 % $ 3,180,846 $ 842 0.11 % $ 2,906,784 1.04 % $ 3,213,700 0.08 % Savings 3,749,902 14,055 1.50 % 3,818,807 7,628 0.81 % 4,076,380 1,003 0.10 % 3,784,164 1.16 % 4,110,806 0.09 % Time 2,393,707 21,886 3.67 % 2,131,707 17,224 3.28 % 1,055,650 1,118 0.42 % 2,263,431 3.48 % 1,142,973 0.42 % Total interest-bearing deposits 9,050,464 44,292 1.96 % 8,857,226 31,456 1.44 % 8,312,876 2,963 0.14 % 8,954,379 1.71 % 8,467,479 0.13 % Borrowed funds Short-term borrowings 1,182,176 15,536 5.27 % 1,090,719 12,950 4.82 % 720,428 1,566 0.87 % 1,136,700 5.05 % 529,502 0.72 % Long-term debt 341,523 4,835 5.68 % 343,619 4,857 5.73 % 359,168 4,612 5.15 % 342,565 5.71 % 372,132 4.96 % Total borrowed funds 1,523,699 20,371 5.36 % 1,434,338 17,807 5.03 % 1,079,596 6,178 2.30 % 1,479,265 5.20 % 901,634 2.47 % Total interest-bearing liabilities 10,574,163 64,663 2.45 % 10,291,564 49,263 1.94 % 9,392,472 9,141 0.39 % 10,433,644 2.20 % 9,369,113 0.36 % Noninterest-bearing liabilities Noninterest-bearing demand deposits 3,663,419 3,954,915 4,224,842 3,808,362 4,192,687 Other liabilities 592,708 614,310 468,994 603,449 461,416 Shareholders' equity 2,137,765 2,082,210 2,099,670 2,110,141 2,162,235 Total liabilities & shareholders' equity $ 16,968,055 $ 16,942,999 $ 16,185,978 $ 16,955,596 $ 16,185,451 Net interest income $ 159,232 $ 159,318 $ 117,010 $ 318,550 $ 223,355 Net interest spread 3.78 % 3.96 % 3.28 % 3.87 % 3.14 % Net interest margin 4.43 % 4.51 % 3.41 % 4.47 % 3.26 % Tax equivalent adjustment 0.05 % 0.04 % 0.04 % 0.04 % 0.05 % Net interest margin (fully tax equivalent) 4.48 % 4.55 % 3.45 % 4.51 % 3.31 % (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 Year-to-Date Income Variance Rate Volume Total Rate Volume Total Rate Volume Total Earning assets Investment securities $ 593 $ (349) $ 244 $ 12,594 $ (5,574) $ 7,020 $ 27,944 $ (12,120) $ 15,824 Interest-bearing deposits with other banks 209 180 389 3,005 423 3,428 5,932 920 6,852 Gross loans (2) 10,223 4,458 14,681 67,203 20,093 87,296 131,636 38,184 169,820 Total earning assets 11,025 4,289 15,314 82,802 14,942 97,744 165,512 26,984 192,496 Interest-bearing liabilities Total interest-bearing deposits $ 11,414 $ 1,422 $ 12,836 $ 37,719 $ 3,610 $ 41,329 $ 66,043 $ 4,119 $ 70,162 Borrowed funds Short-term borrowings 1,227 1,359 2,586 7,902 6,068 13,970 11,386 15,217 26,603 Long-term debt (46) 24 (22) 473 (250) 223 1,373 (837) 536 Total borrowed funds 1,181 1,383 2,564 8,375 5,818 14,193 12,759 14,380 27,139 Total interest-bearing liabilities 12,595 2,805 15,400 46,094 9,428 55,522 78,802 18,499 97,301 Net interest income (1) $ (1,570) $ 1,484 $ (86) $ 36,708 $ 5,514 $ 42,222 $ 86,710 $ 8,485 $ 95,195 (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) Six months ended, June 30 , Mar. 31 , Dec. 31 , Sep. 30 , June 30 , June 30 , June 30 , 2023 2023 2022 2022 2022 2023 2022 ALLOWANCE FOR CREDIT LOSS ACTIVITY Balance at beginning of period $ 141,591 $ 132,977 $ 124,096 $ 117,885 $ 124,130 $ 132,977 $ 131,992 Provision for credit losses 12,719 8,644 8,689 7,898 (4,267) 21,363 (9,856) Gross charge-offs Commercial and industrial 2,372 730 334 1,947 773 3,102 3,618 Lease financing 90 13 0 13 8 103 139 Construction real estate 0 0 0 0 0 0 0 Commercial real estate 2,648 66 245 3 3,419 2,714 3,419 Residential real estate 20 0 79 119 4 20 26 Home equity 21 91 72 45 22 112 43 Installment 1,515 1,524 717 294 361 3,039 538 Credit card 274 217 212 237 212 491 458 Total gross charge-offs 6,940 2,641 1,659 2,658 4,799 9,581 8,241 Recoveries Commercial and industrial 631 109 293 90 177 740 556 Lease financing 1 1 0 13 3 2 36 Construction real estate 0 0 0 0 0 0 0 Commercial real estate 153 2,238 1,327 561 2,194 2,391 2,416 Residential real estate 113 66 15 35 34 179 124 Home equity 232 80 88 185 360 312 625 Installment 90 54 68 29 47 144 68 Credit card 56 63 60 58 6 119 165 Total recoveries 1,276 2,611 1,851 971 2,821 3,887 3,990 Total net charge-offs 5,664 30 (192) 1,687 1,978 5,694 4,251 Ending allowance for credit losses $ 148,646 $ 141,591 $ 132,977 $ 124,096 $ 117,885 $ 148,646 $ 117,885 NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) Commercial and industrial 0.20 % 0.07 % 0.01 % 0.24 % 0.08 % 0.14 % 0.22 % Lease financing 0.11 % 0.02 % 0.00 % 0.00 % 0.01 % 0.07 % 0.17 % Construction real estate 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Commercial real estate 0.25 % (0.22) % (0.11) % (0.06) % 0.12 % 0.02 % 0.05 % Residential real estate (0.03) % (0.02) % 0.02 % 0.03 % (0.01) % (0.03) % (0.02) % Home equity (0.12) % 0.01 % (0.01) % (0.08) % (0.19) % (0.06) % (0.17) % Installment 3.32 % 2.89 % 1.24 % 0.64 % 0.90 % 3.09 % 0.71 % Credit card 1.47 % 1.12 % 1.07 % 1.29 % 1.50 % 1.30 % 1.10 % Total net charge-offs 0.22 % 0.00 % (0.01) % 0.07 % 0.08 % 0.11 % 0.09 % COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS Nonaccrual loans (1) Commercial and industrial $ 21,508 $ 13,971 $ 8,242 $ 8,719 $ 11,675 $ 21,508 $ 11,675 Lease financing 4,833 175 178 199 217 4,833 217 Construction real estate 0 0 0 0 0 0 0 Commercial real estate 11,876 5,362 5,786 13,435 14,650 11,876 14,650 Residential real estate 11,697 11,129 10,691 10,250 8,879 11,697 8,879 Home equity 3,239 3,399 3,123 3,445 3,331 3,239 3,331 Installment 568 544 603 279 170 568 170 Nonaccrual loans 53,721 34,580 28,623 36,327 38,922 53,721 38,922 Accruing troubled debt restructurings (TDRs) (2) N/A N/A 10,960 11,022 11,225 N/A 11,225 Total nonperforming loans (2) 53,721 34,580 39,583 47,349 50,147 53,721 50,147 Other real estate owned (OREO) 281 191 191 22 22 281 22 Total nonperforming assets (2) 54,002 34,771 39,774 47,371 50,169 54,002 50,169 Accruing loans past due 90 days or more 873 159 857 139 142 873 142 Total underperforming assets (2) $ 54,875 $ 34,930 $ 40,631 $ 47,510 $ 50,311 $ 54,875 $ 50,311 Total classified assets (2) $ 138,909 $ 158,984 $ 128,137 $ 114,956 $ 119,769 $ 138,909 $ 119,769 CREDIT QUALITY RATIOS Allowance for credit losses to Nonaccrual loans 276.70 % 409.46 % 464.58 % 341.61 % 302.87 % 276.70 % 302.87 % Nonperforming loans 276.70 % 409.46 % 335.94 % 262.09 % 235.08 % 276.70 % 235.08 % Total ending loans 1.41 % 1.36 % 1.29 % 1.27 % 1.25 % 1.41 % 1.25 % Nonperforming loans to total loans 0.51 % 0.33 % 0.38 % 0.48 % 0.53 % 0.51 % 0.53 % Nonaccrual loans to total loans 0.51 % 0.33 % 0.28 % 0.37 % 0.41 % 0.51 % 0.41 % Nonperforming assets to Ending loans, plus OREO 0.51 % 0.33 % 0.39 % 0.48 % 0.53 % 0.51 % 0.53 % Total assets 0.32 % 0.21 % 0.23 % 0.28 % 0.31 % 0.32 % 0.31 % Nonperforming assets, excluding accruing TDRs to Ending loans, plus OREO 0.51 % 0.33 % 0.28 % 0.37 % 0.41 % 0.51 % 0.41 % Total assets 0.32 % 0.21 % 0.17 % 0.22 % 0.24 % 0.32 % 0.24 % Classified assets to total assets 0.81 % 0.94 % 0.75 % 0.69 % 0.74 % 0.81 % 0.74 % (1) Nonaccrual loans include nonaccrual TDRs of $10.0 million , $12.8 million , and $9.5 million , as of December 31, 2022 , September 30, 2022 , and June 30, 2022 , respectively. (2) Upon adoption of ASU 2022-02 as of January 1, 2023 , the TDR model was eliminated. Prospectively, disclosures will include modifications 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) Six months ended, June 30 , Mar. 31 , Dec. 31 , Sep. 30 , June 30 , June 30 , June 30 , 2023 2023 2022 2022 2022 2023 2022 PER COMMON SHARE Market Price High $ 22.27 $ 26.24 $ 26.68 $ 23.75 $ 23.03 $ 26.24 $ 26.73 Low $ 18.20 $ 21.30 $ 21.56 $ 19.02 $ 19.09 $ 18.20 $ 19.09 Close $ 20.44 $ 21.77 $ 24.23 $ 21.08 $ 19.40 $ 20.44 $ 19.40 Average shares outstanding - basic 93,924,068 93,732,532 93,590,674 93,582,250 93,555,131 93,828,829 93,470,005 Average shares outstanding - diluted 95,169,348 94,960,158 94,831,788 94,793,766 94,449,817 95,065,334 94,357,392 Ending shares outstanding 95,185,483 95,190,406 94,891,099 94,833,964 94,448,792 95,185,483 94,448,792 Total shareholders' equity $ 2,143,419 $ 2,121,496 $ 2,041,373 $ 1,994,132 $ 2,068,670 $ 2,143,419 $ 2,068,670 REGULATORY CAPITAL Preliminary Preliminary Common equity tier 1 capital $ 1,481,913 $ 1,432,332 $ 1,399,420 $ 1,348,413 $ 1,307,259 $ 1,481,913 $ 1,307,259 Common equity tier 1 capital ratio 11.30 % 11.00 % 10.83 % 10.82 % 10.91 % 11.30 % 10.91 % Tier 1 capital $ 1,526,362 $ 1,476,734 $ 1,443,698 $ 1,392,565 $ 1,351,287 $ 1,526,362 $ 1,351,287 Tier 1 ratio 11.64 % 11.34 % 11.17 % 11.17 % 11.28 % 11.64 % 11.28 % Total capital $ 1,828,737 $ 1,778,917 $ 1,762,971 $ 1,711,741 $ 1,670,367 $ 1,828,737 $ 1,670,367 Total capital ratio 13.94 % 13.66 % 13.64 % 13.73 % 13.94 % 13.94 % 13.94 % Total capital in excess of minimum requirement $ 451,297 $ 411,234 $ 406,032 $ 402,662 $ 412,167 $ 451,297 $ 412,167 Total risk-weighted assets $ 13,118,477 $ 13,025,552 $ 12,923,233 $ 12,467,422 $ 11,982,860 $ 13,118,477 $ 11,982,860 Leverage ratio 9.33 % 9.03 % 8.89 % 8.88 % 8.76 % 9.33 % 8.76 % OTHER CAPITAL RATIOS Ending shareholders' equity to ending assets 12.54 % 12.53 % 12.01 % 12.00 % 12.74 % 12.54 % 12.74 % Ending tangible shareholders' equity to ending tangible assets (1) 6.56 % 6.47 % 5.95 % 5.79 % 6.40 % 6.56 % 6.40 % Average shareholders' equity to average assets 12.60 % 12.29 % 11.98 % 12.75 % 12.97 % 12.45 % 13.36 % Average tangible shareholders' equity to average tangible assets (1) 6.57 % 6.21 % 5.84 % 6.49 % 6.62 % 6.39 % 7.03 % REPURCHASE PROGRAM (2) Shares repurchased 0 0 0 0 0 0 0 Average share repurchase price N/A N/A 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 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-second-quarter-2023-financial-results-301882430.html SOURCE First Financial Bancorp .

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