First Financial Bancorp Reports Third Quarter 2014 Financial Results and Announces Dividend Increase
CINCINNATI, Oct. 30, 2014 /PRNewswire/ -- First Financial Bancorp (Nasdaq: FFBC) ("First Financial" or the "Company") announced today financial and operational results for the third quarter 2014.
Third quarter net income was $15.3 million and earnings per diluted common share were $0.26. This compares with second quarter net income of $16.0 million and earnings per diluted common share of $0.28 and third quarter 2013 net income of $14.9 million and earnings per diluted common share of $0.26.
- Continued solid quarterly performance
- Quarterly results included several acquisition-related items and other items not expected to recur which reduced pre-tax income by $5.1 million or approximately $0.05 per diluted share after taxes
- Return on average assets of 0.88%; 1.07% as adjusted for acquisition-related and other items
- Return on average tangible common equity of 10.15%; 12.39% as adjusted for acquisition-related and other items
- Board of directors announces 6.7% increase in the quarterly dividend to $0.16 per share
- Earnings consistency provides capacity to support higher payout
- Robust capital levels still allow ability to take advantage of strategic opportunities
- Begins with next regularly scheduled dividend, payable on January 2, 2015 to shareholders of record as of November 28, 2014
- Entered the attractive Columbus, Ohio market
- Completed acquisitions of The First Bexley Bank, Insight Bank and The Guernsey Bank
- 5 acquired banking centers
- Total acquired loans of $606.3 million, net of estimated fair value marks
- Total acquired deposits of $568.6 million, net of estimated fair value marks
- Annualized total loan growth, excluding loans acquired during the quarter, of 14.6% on a period-end basis
- Strong performance in specialty finance, traditional C&I / owner occupied CRE and franchise lending
- Strong performance in specialty finance, traditional C&I / owner occupied CRE and franchise lending
- Quarterly net interest margin of 3.66%, a decline of 4 bps compared to the linked quarter
- Negative impact of covered loan balance decline partially offset by the positive impact from acquired loans, improved loan yields and fee income
Claude Davis, President and Chief Executive Officer, commented, "It was an exciting quarter for First Financial as we expanded into the attractive Columbus, Ohio market through the completion of The First Bexley Bank, Insight Bank and The Guernsey Bank acquisitions, adding $606.3 million of loans and $568.6 million of deposits to our balance sheet. We were pleased to welcome our new associates and new clients from those institutions during the quarter and we continue to be extremely excited about the opportunity to introduce the First Financial brand of community banking to Central Ohio.
"Our financial results for the third quarter reflect continued solid organic loan growth during the period as well as the benefits of our expansion into the Columbus market. While reported earnings were impacted by acquisition-related expenses as well as costs associated with our ongoing efficiency plans and other items not expected to recur, we continued to execute on our community bank business model and leverage our diversified credit suite to generate consistent earning asset growth.
"We were very pleased with our asset generation this quarter as period-end loans, excluding loans acquired during the period, increased $147.7 million, or 14.6% on an annualized basis, compared to the linked quarter. Almost all lending areas of the Company contributed to the quarterly growth, led by strong performance in our specialty finance and traditional C&I / owner occupied CRE portfolios.
"And finally, the close of the third quarter brought about the expiration of the five-year loss sharing coverage period on commercial assets acquired in our 2009 FDIC-assisted transactions. While loss sharing coverage has certainly provided us with an added layer of loss protection over the past five years, we remain pleased with our covered asset resolution efforts and feel we are well-positioned to manage the risk associated with the remaining commercial assets post loss sharing protection."
NET INTEREST INCOME AND NET INTEREST MARGIN
Net interest income for the third quarter was $58.4 million as compared to $54.3 million for the second quarter 2014 and $55.8 million for the third quarter 2013. Compared to the linked quarter, total interest income increased $4.7 million, or 7.9%, while total interest expense increased $0.6 million, or 13.7%. Net interest margin was 3.66% for the third quarter, compared to 3.70% for the second quarter 2014 and 3.91% for the third quarter 2013.
Interest income earned on loans increased $4.8 million, or 9.9%, compared to the prior quarter. The increase in interest income earned on loans was driven by a $408.3 million, or 11.3%, increase in average uncovered loan balances as a result of the Columbus acquisitions as well as strong, organic loan growth during the period. Additionally, the yield on the uncovered portfolio during the quarter was approximately 4.35%, a 9 bp increase compared to the linked quarter. The impact on net interest income from the growth in average uncovered loans, as well as modestly higher loan fees, was partially offset by a $36.7 million, or 9.5%, decline in average covered loan balances during the quarter.
Interest income earned from investment securities was essentially unchanged compared to the prior quarter as an increase in average balances of $54.1 million, or 3.0%, was offset by a 10 bp decline in the yield earned on the portfolio to 2.37%.
The increase in total interest expense was due to a $209.0 million, or 5.5%, increase in average interest-bearing deposits as well as a 3 bp increase in the related cost of funds on interest-bearing deposits to 41 bps as a result of funding strategies and the Columbus acquisitions during the quarter. Average borrowed funds increased $150.3 million, or 20.2%, compared to the linked quarter and the related cost of funds was 36 bps.
NONINTEREST INCOME
The following table presents noninterest income for the three months ended September 30, 2014 and for the trailing four quarters, adjusted to exclude the impact of covered loan activity and other select items on the Company's reported balance.
| Table I |
|||||||||||||||||||||
| For the Three Months Ended |
|||||||||||||||||||||
| September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||||||||
| (Dollars in thousands) |
2014 |
2014 |
2014 |
2013 |
2013 |
||||||||||||||||
| Total noninterest income |
$ |
16,511 |
$ |
16,337 |
$ |
14,175 |
$ |
13,043 |
$ |
22,291 |
|||||||||||
| Selected components of noninterest income |
|||||||||||||||||||||
| Accelerated discount on covered loans 1 |
789 |
621 |
1,015 |
1,572 |
1,711 |
||||||||||||||||
| FDIC loss sharing income |
(192) |
1,108 |
(508) |
(3,385) |
5,555 |
||||||||||||||||
| Gain on sale of investment securities |
— |
— |
50 |
— |
— |
||||||||||||||||
| Other items not expected to recur |
97 |
— |
— |
— |
— |
||||||||||||||||
| Total noninterest income excluding items noted above |
$ |
15,817 |
$ |
14,608 |
$ |
13,618 |
$ |
14,856 |
$ |
15,025 |
|||||||||||
| 1 Net of the related valuation adjustment on the FDIC indemnification asset |
|||||||||||||||||||||
Excluding the items highlighted in Table I, noninterest income earned in the third quarter was $15.8 million compared to $14.6 million in the second quarter 2014 and $15.0 million in the third quarter 2013. The $1.2 million increase compared to the linked quarter was driven by a $0.9 million, or 125.2%, increase in net gains on sales of loans as well as a $0.2 million increase in other noninterest income during the period. The increase in net gains on sales of loans during the third quarter was driven by a 119.4% increase in the amount of residential mortgage loans sold as compared to the linked quarter, reflecting strong mortgage origination activity as well as the impact of Columbus loan origination and sale activity during the period. The increase in other noninterest income during the third quarter was driven primarily by an increase in fee income related to the Company's client derivative program.
NONINTEREST EXPENSE
The following table presents noninterest expense for the three months ended September 30, 2014 and for the trailing four quarters, adjusted to exclude the impact of covered asset activity and other select items on the Company's reported balance.
| Table II |
|||||||||||||||||||||
| For the Three Months Ended |
|||||||||||||||||||||
| September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||||||||
| (Dollars in thousands) |
2014 |
2014 |
2014 |
2013 |
2013 |
||||||||||||||||
| Total noninterest expense |
$ |
51,419 |
$ |
47,111 |
$ |
47,842 |
$ |
70,285 |
$ |
48,801 |
|||||||||||
| Selected components of noninterest expense |
|||||||||||||||||||||
| Loss (gain) - covered real estate owned |
(1,433) |
398 |
33 |
946 |
204 |
||||||||||||||||
| Loss sharing expense |
1,002 |
1,465 |
1,569 |
1,495 |
1,724 |
||||||||||||||||
| Pension settlement charges |
— |
— |
— |
462 |
1,396 |
||||||||||||||||
| Expenses associated with efficiency initiative |
309 |
(59) |
350 |
1,450 |
1,051 |
||||||||||||||||
| FDIC indemnification asset valuation adjustment |
— |
— |
— |
22,417 |
— |
||||||||||||||||
| Acquisition-related expenses |
4,182 |
517 |
620 |
284 |
— |
||||||||||||||||
| Other items not expected to recur |
728 |
— |
465 |
— |
— |
||||||||||||||||
| Total noninterest expense excluding items noted above |
$ |
46,631 |
$ |
44,790 |
$ |
44,805 |
$ |
43,231 |
$ |
44,426 |
|||||||||||
| FDIC loss share support 1 |
$ |
662 |
$ |
630 |
$ |
862 |
$ |
844 |
$ |
841 |
|||||||||||
| 1 Represents direct expenses associated with credit management and loan administration related to covered assets as well as compliance with FDIC loss sharing agreements; included in total noninterest expense excluding the items noted above and comprised of several noninterest expense line items |
|||||||||||||||||||||
Excluding the items highlighted in Table II, noninterest expense was $46.6 million in the third quarter of 2014, $44.8 million in the second quarter of 2014 and $44.4 million in the third quarter 2013. The $1.8 million increase compared to the linked quarter was primarily due to the addition of the Columbus, Ohio operations during the quarter. Higher compensation and employee benefit costs, as well as OREO-related expenses, were partially offset by lower occupancy costs during the third quarter. OREO-related costs primarily resulted from valuation adjustments during the period. Lower occupancy costs are a result of the Company's ongoing efficiency efforts.
Acquisition-related expenses during the period included $1.8 million of personnel costs, $1.6 million of data processing related expenses, $0.5 million of professional services expenses, $0.2 million of equipment and other miscellaneous expenses. Other items not expected to recur from the third quarter 2014 consist of $0.4 million of office relocation expenses as well as a $0.4 million wealth management settlement.
INCOME TAXES
For the third quarter, income tax expense was $7.2 million, resulting in an effective tax rate of 32.0%, compared with income tax expense of $8.0 million and an effective tax rate of 33.3% during the second quarter 2014 and income tax expense of $7.6 million and an effective tax rate of 33.9% during the third quarter 2013. While the effective tax rate may fluctuate from quarter to quarter due to tax jurisdiction changes and the level of tax-enhanced assets, the overall effective tax rate for the full year is expected to be in the range of approximately 32.0% - 34.0%.
CREDIT QUALITY - EXCLUDING COVERED ASSETS
The following table presents certain credit quality metrics related to the Company's uncovered loan portfolio as of September 30, 2014 and the trailing four quarters.
| Table III |
|||||||||||||||||||||
| As of or for the Three Months Ended |
|||||||||||||||||||||
| September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||||||||
| (Dollars in thousands) |
2014 |
2014 |
2014 |
2013 |
2013 |
||||||||||||||||
| Total nonaccrual loans 1 |
$ |
41,646 |
$ |
32,418 |
$ |
35,334 |
$ |
37,605 |
$ |
57,926 |
|||||||||||
| Troubled debt restructurings - accruing |
13,369 |
12,607 |
13,400 |
15,094 |
16,278 |
||||||||||||||||
| Total nonperforming loans |
55,015 |
45,025 |
48,734 |
52,699 |
74,204 |
||||||||||||||||
| Total nonperforming assets |
66,331 |
58,395 |
61,477 |
72,505 |
86,008 |
||||||||||||||||
| Nonperforming assets as a % of: |
|||||||||||||||||||||
| Period-end loans plus OREO |
1.49 |
% |
1.59 |
% |
1.70 |
% |
2.06 |
% |
2.50 |
% |
|||||||||||
| Total assets |
0.90 |
% |
0.89 |
% |
0.95 |
% |
1.13 |
% |
1.38 |
% |
|||||||||||
| Nonperforming assets ex. accruing TDRs as a % of: |
|||||||||||||||||||||
| Period-end loans plus OREO |
1.19 |
% |
1.25 |
% |
1.33 |
% |
1.63 |
% |
2.03 |
% |
|||||||||||
| Total assets |
0.72 |
% |
0.70 |
% |
0.74 |
% |
0.89 |
% |
1.12 |
% |
|||||||||||
| Nonperforming loans as a % of total loans |
1.24 |
% |
1.23 |
% |
1.35 |
% |
1.50 |
% |
2.16 |
% |
|||||||||||
| Provision for loan and lease losses - uncovered |
$ |
1,093 |
$ |
29 |
$ |
1,159 |
$ |
1,851 |
$ |
1,413 |
|||||||||||
| Allowance for uncovered loan & lease losses |
$ |
42,454 |
$ |
42,027 |
$ |
43,023 |
$ |
43,829 |
$ |
45,514 |
|||||||||||
| Allowance for loan & lease losses as a % of: |
|||||||||||||||||||||
| Total loans |
0.95 |
% |
1.15 |
% |
1.19 |
% |
1.25 |
% |
1.33 |
% |
|||||||||||
| Nonaccrual loans |
101.9 |
% |
129.6 |
% |
121.8 |
% |
116.6 |
% |
78.6 |
% |
|||||||||||
| Nonperforming loans |
77.2 |
% |
93.3 |
% |
88.3 |
% |
83.2 |
% |
61.3 |
% |
|||||||||||
| Total net charge-offs |
$ |
666 |
$ |
1,025 |
$ |
1,965 |
$ |
3,536 |
$ |
2,946 |
|||||||||||
| Annualized net-charge-offs as a % of average |
|||||||||||||||||||||
| loans & leases |
0.07 |
% |
0.11 |
% |
0.23 |
% |
0.41 |
% |
0.34 |
% |
|||||||||||
| 1 Includes nonaccrual troubled debt restructurings |
|||||||||||||||||||||
Net Charge-offs
For the third quarter, net charge-offs totaled $0.7 million, a decline of $0.4 million, or 35.0%, compared to the linked quarter.
Nonperforming Assets
Nonaccrual loans, including nonaccrual troubled debt restructurings, increased $9.2 million, or 28.5%, to $41.6 million as of September 30, 2014 from $32.4 million as of June 30, 2014. Contributing to the increase was a single commercial real estate relationship totaling $6.6 million as well as $4.3 million of nonperforming loans, net of estimated fair value marks, from the Columbus acquisitions during the period.
Accruing troubled debt restructurings increased $0.8 million, or 6.0%, to $13.4 million as of September 30, 2014 from $12.6 million as of June 30, 2014. The increase in accruing troubled debt restructurings during the third quarter was primarily related to the addition of five commercial credits totaling $0.8 million.
OREO declined $2.1 million, or 15.4%, to $11.3 million during the third quarter as $2.3 million of sales and $0.8 million of valuation adjustments were partially offset by $1.1 million of additions during the period, including $0.5 million of additions from the Columbus acquisitions.
Classified assets increased $2.1 million, or 2.0%, to $105.9 million as of September 30, 2014 from $103.8 million as of June 30, 2014 due to $7.8 million of additions from the Columbus acquisitions during the period, net of estimated fair value marks. Classified assets are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse.
Delinquent Loans
As of September 30, 2014, loans 30-to-89 days past due totaled $12.1 million, or 0.27% of period-end loans, compared to $5.7 million, or 0.16%, as of June 30, 2014 and $10.4 million, or 0.30%, as of September 30, 2013. The $6.3 million, or 110.2%, increase during the third quarter was driven primarily by a $5.4 million increase in delinquent commercial and commercial real estate loans during the period, including $0.7 million from the Columbus acquisitions.
Provision for Loan & Lease Losses
Third quarter provision expense related to uncovered loans and leases was $1.1 million as compared to $29 thousand for the linked quarter and $1.4 million for the third quarter 2013. Provision expense is a result of the Company's modeling efforts to estimate the period-end allowance for loan and lease losses. The allowance for loan and lease losses as a percentage of period-end loans was 0.95% as of September 30, 2014, compared to 1.15% as of June 30, 2014. Excluding loans acquired during the period, as those loans are recorded at their estimated fair value through purchase accounting and have no associated allowance, the allowance for loan and lease losses as a percentage of period-end loans would have been more consistent with the linked quarter.
LOANS
The following table presents the loan portfolio as of September 30, 2014, June 30, 2014 and September 30, 2013.
| Table IV |
||||||||||||||||||||||
| As of |
||||||||||||||||||||||
| September 30, 2014 |
June 30, 2014 |
September 30, 2013 |
||||||||||||||||||||
| Percent |
Percent |
Percent |
||||||||||||||||||||
| (Dollars in thousands) |
Balance |
of Total |
Balance |
of Total |
Balance |
of Total |
||||||||||||||||
| Commercial |
$ |
1,304,782 |
29.3 |
% |
$ |
1,143,693 |
31.2 |
% |
$ |
960,016 |
28.0 |
% |
||||||||||
| Real estate - construction |
193,776 |
4.4 |
% |
113,682 |
3.1 |
% |
90,089 |
2.6 |
% |
|||||||||||||
| Real estate - commercial |
1,952,055 |
43.9 |
% |
1,491,731 |
40.7 |
% |
1,493,969 |
43.5 |
% |
|||||||||||||
| Real estate - residential |
426,558 |
9.6 |
% |
372,601 |
10.2 |
% |
352,830 |
10.3 |
% |
|||||||||||||
| Installment |
47,561 |
1.1 |
% |
43,338 |
1.2 |
% |
49,273 |
1.4 |
% |
|||||||||||||
| Home equity |
416,099 |
9.4 |
% |
380,746 |
10.4 |
% |
373,839 |
10.9 |
% |
|||||||||||||
| Credit card |
35,925 |
0.8 |
% |
35,656 |
1.0 |
% |
34,285 |
1.0 |
% |
|||||||||||||
| Lease financing |
73,216 |
1.6 |
% |
81,212 |
2.2 |
% |
76,615 |
2.2 |
% |
|||||||||||||
| Total loans, excluding covered loans |
$ |
4,449,972 |
100.0 |
% |
$ |
3,662,659 |
100.0 |
% |
$ |
3,430,916 |
100.0 |
% |
||||||||||
| Covered Loans |
$ |
332,265 |
$ |
365,603 |
$ |
518,524 |
||||||||||||||||
| Total loans |
$ |
4,782,237 |
$ |
4,028,262 |
$ |
3,949,440 |
||||||||||||||||
Total loans were $4.8 billion as of September 30, 2014, increasing $754.0 million, or 18.7%, compared to the linked quarter and $832.8 million, or 21.1%, compared to September 30, 2013. The increase relative to the linked quarter was driven by the addition of $606.3 million of loan balances, net of estimated fair value marks, from the Columbus acquisitions that closed in August as well as strong loan origination activity during the third quarter. Excluding loans acquired during the quarter, loans balances increased $147.7 million, or 14.6% on an annualized basis, compared to the linked quarter.
Covered loans totaled $332.3 million as of September 30, 2014, declining $33.3 million, or 9.1%, compared to the linked quarter and $186.3 million, or 35.9%, compared to September 30, 2013. The Company's loss sharing indemnification from the FDIC related to non-single-family loans expired effective October 1, 2014 and, as a result, approximately $190.3 million, or 57.3%, of the Company's $332.3 million covered loan portfolio were no longer covered by FDIC loss sharing effective that date. The loss sharing protection related to the remaining single-family portfolio of approximately $142.0 million will expire in the third quarter 2019.
INVESTMENTS
The following table presents a summary of the total investment portfolio at September 30, 2014.
| Table V |
|||||||||||||||||||||
| As of September 30, 2014 |
|||||||||||||||||||||
| Held-to- |
Available-for- |
Percent |
|||||||||||||||||||
| (Dollars in thousands) |
Maturity |
Sale |
Other |
Total |
of Portfolio |
||||||||||||||||
| Debt obligations of the U.S. Government |
$ |
— |
$ |
20,207 |
$ |
— |
$ |
20,207 |
1.1 |
% |
|||||||||||
| Debt obligations of U.S. Government Agency |
17,917 |
12,270 |
— |
30,187 |
1.6 |
% |
|||||||||||||||
| Residential Mortgage Backed Securities |
|||||||||||||||||||||
| Pass-through securities: |
|||||||||||||||||||||
| Agency fixed rate |
77,000 |
95,964 |
— |
172,964 |
9.2 |
% |
|||||||||||||||
| Agency adjustable rate |
146,845 |
38,186 |
— |
185,031 |
9.8 |
% |
|||||||||||||||
| Non-Agency fixed rate |
8,917 |
— |
8,917 |
0.5 |
% |
||||||||||||||||
| Collateralized mortgage obligations: |
|||||||||||||||||||||
| Agency fixed rate |
334,700 |
256,862 |
— |
591,562 |
31.4 |
% |
|||||||||||||||
| Agency variable rate |
110,378 |
— |
110,378 |
5.9 |
% |
||||||||||||||||
| Agency collateralized and insured municipal securities |
84,986 |
108,513 |
— |
193,499 |
10.3 |
% |
|||||||||||||||
| Commercial mortgage backed securities |
231,810 |
121,655 |
— |
353,465 |
18.8 |
% |
|||||||||||||||
| Municipal bond securities |
2,467 |
21,677 |
— |
24,144 |
1.3 |
% |
|||||||||||||||
| Corporate securities |
4,796 |
69,809 |
— |
74,605 |
4.0 |
% |
|||||||||||||||
| Asset-backed securities |
— |
56,882 |
— |
56,882 |
3.0 |
% |
|||||||||||||||
| Regulatory stock |
— |
45,025 |
45,025 |
2.4 |
% |
||||||||||||||||
| Other |
— |
8,274 |
4,961 |
13,235 |
0.7 |
% |
|||||||||||||||
| $ |
900,521 |
$ |
929,594 |
$ |
49,986 |
$ |
1,880,101 |
100.0 |
% |
||||||||||||
The investment portfolio increased $35.2 million, or 1.9%, to $1.9 billion during the third quarter as $61.0 million of purchases and $30.8 million of securities acquired in the Columbus acquisitions were partially offset by amortizations and other portfolio reductions. As of September 30, 2014, the overall duration of the investment portfolio decreased to 3.7 years compared to 3.9 years as of June 30, 2014. The yield earned on the portfolio during the quarter decreased 10 bps to 2.37% from 2.47% for the linked quarter, driven by lower reinvestment rates, higher prepayment speeds on mortgage-related assets and other duration management actions. The net unrealized loss included in accumulated other comprehensive loss related to the investment portfolio was relatively unchanged during the quarter, increasing from $6.0 million as of June 30, 2014 to $6.2 million as of September 30, 2014.
DEPOSITS
Total deposits were $5.5 billion as of September 30, 2014, increasing $657.9 million, or 13.5%, compared to the linked quarter. Average total deposits were $5.2 billion as of September 30, 2014, increasing $277.5 million, or 5.6%, compared to the linked quarter. The increases in period-end and average deposits were driven by $568.6 million of deposits, net of estimated fair value marks, from the Columbus acquisitions as well as strong growth in interest-bearing demand deposits during the quarter.
Non-time deposit balances totaled $4.3 billion as of September 30, 2014, increasing $383.7 million, or 9.8%, compared to the linked quarter. The average balance of non-time deposits totaled $4.1 billion as of September 30, 2014, increasing $114.2 million, or 2.9%, compared to the linked quarter.
Time deposit balances increased $274.2 million, or 28.2%, to $1.2 billion as of September 30, 2014. Average time deposit balances totaled $1.1 billion as of September 30, 2014, increasing $163.2 million, or 17.0%, compared to the linked quarter.
The Company's total cost of deposit funding, inclusive of noninterest-bearing balances, was 32 bps for the quarter, representing an increase of 3 bps compared to the prior quarter and 8 bps compared to the third quarter 2013.
CAPITAL MANAGEMENT
The following table presents First Financial's regulatory and other capital ratios as of September 30, 2014, June 30, 2014 and September 30, 2013.
| Table VI |
|||||||||||||
| As of |
|||||||||||||
| September 30, |
June 30, |
September 30, |
|||||||||||
| 2014 |
2014 |
2013 |
|||||||||||
| Leverage Ratio |
9.70 |
% |
9.99 |
% |
10.29 |
% |
|||||||
| Tier 1 Capital Ratio |
12.74 |
% |
14.34 |
% |
15.26 |
% |
|||||||
| Total Risk-Based Capital Ratio |
13.80 |
% |
15.59 |
% |
16.53 |
% |
|||||||
| Ending tangible shareholders' equity |
|||||||||||||
| to ending tangible assets |
8.71 |
% |
9.39 |
% |
9.60 |
% |
|||||||
| Ending tangible common shareholders' |
|||||||||||||
| equity to ending tangible assets |
8.71 |
% |
9.39 |
% |
9.60 |
% |
|||||||
| Tangible book value per share |
$ |
10.23 |
$ |
10.49 |
$ |
10.24 |
|||||||
Shareholders' equity increased $68.1 million during the quarter as a result of stock issued in conjunction with the Columbus acquisitions and net income for the quarter, partially offset by declared dividends. The Company's Tier I and total risk-based capital ratios declined during the quarter due primarily to an increase in risk-weighted assets resulting from the acquisitions during the period as well as uncovered loan growth. The Company's tangible common equity ratio declined during the quarter due to the impact from acquisitions as the increase in tangible assets outweighed the increase in tangible common equity from the common shares issued in conjunction with the acquisitions. The Company's leverage ratio decreased primarily as a result of the overall growth in the balance sheet during the quarter. Regulatory capital ratios as of September 30, 2014 are considered preliminary pending the filing of the Company's regulatory reports.
Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, October 31, 2014 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 (Canada toll free) or +1 (412) 380-2003 (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. 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. A replay of the conference call will be available beginning one hour after the completion of the live call through November 17, 2014 at (877) 344-7529 (U.S. toll free), (855) 669-9658 (Canada toll free) and +1 (412) 317-0088 (International); conference number 10045038. The webcast will be archived on the Investor Relations section of the Company's website through October 31, 2015.
Press Release and Additional Information on Website This press release as well as supplemental information and any non-GAAP reconciliations related to this release is available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com/investor.
About First Financial Bancorp
First Financial Bancorp is a Cincinnati, Ohio based bank holding company. As of September 30, 2014, the Company had $7.4 billion in assets, $4.8 billion in loans, $5.5 billion in deposits and $774 million in shareholders' equity. The Company's subsidiary, First Financial Bank, N.A., founded in 1863, provides banking and financial services products through its four lines of business: commercial, consumer, wealth management and mortgage. The commercial, consumer and mortgage units provide traditional banking services to business and retail clients. First Financial Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.4 billion in assets under management as of September 30, 2014. The Company's strategic operating markets are located in Ohio, Indiana and Kentucky where it operates 106 banking centers. Additional information about the Company, including its products, services and banking locations is available at www.bankatfirst.com.
Forward-Looking Statement
Certain statements contained in this release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure and other financial items, statements of plans and objectives of First Financial or its management or board of directors and statements of future economic performances and statements of assumptions underlying such statements. Words such as ''believes,'' ''anticipates,'' "likely," "expected," ''intends,'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Management's analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to: economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business; the effect of and changes in policies and laws or regulatory agencies (notably the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act); management's ability to effectively execute its business plan; mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; the Company's ability to comply with the terms of loss sharing agreements with the FDIC; the effect of changes in accounting policies and practices; and the costs and effects of litigation and of unexpected or adverse outcomes in such litigation. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, as well as its other filings with the SEC, for a more detailed discussion of these risks, uncertainties and other factors that could cause actual results to differ from those discussed in the forward-looking statements. Such forward-looking statements are meaningful only on the date when such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made to reflect the occurrence of unanticipated events.
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS |
|||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) |
|||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||
| Three Months Ended, |
Nine months ended, |
||||||||||||||||||||||||||
| Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Sep. 30, |
Sep. 30, |
||||||||||||||||||||||
| 2014 |
2014 |
2014 |
2013 |
2013 |
2014 |
2013 |
|||||||||||||||||||||
| RESULTS OF OPERATIONS |
|||||||||||||||||||||||||||
| Net income |
$ |
15,344 |
$ |
15,953 |
$ |
15,104 |
$ |
3,785 |
$ |
14,911 |
$ |
46,401 |
$ |
44,564 |
|||||||||||||
| Net earnings per share - basic |
$ |
0.26 |
$ |
0.28 |
$ |
0.26 |
$ |
0.07 |
$ |
0.26 |
$ |
0.80 |
$ |
0.78 |
|||||||||||||
| Net earnings per share - diluted |
$ |
0.26 |
$ |
0.28 |
$ |
0.26 |
$ |
0.07 |
$ |
0.26 |
$ |
0.79 |
$ |
0.77 |
|||||||||||||
| Dividends declared per share |
$ |
0.15 |
$ |
0.15 |
$ |
0.15 |
$ |
0.15 |
$ |
0.27 |
$ |
0.45 |
$ |
0.79 |
|||||||||||||
| KEY FINANCIAL RATIOS |
|||||||||||||||||||||||||||
| Return on average assets |
0.88 |
% |
0.99 |
% |
0.96 |
% |
0.24 |
% |
0.96 |
% |
0.94 |
% |
0.95 |
% |
|||||||||||||
| Return on average shareholders' equity |
8.16 |
% |
9.19 |
% |
8.95 |
% |
2.15 |
% |
8.53 |
% |
8.75 |
% |
8.49 |
% |
|||||||||||||
| Return on average tangible shareholders' equity |
10.15 |
% |
10.73 |
% |
10.49 |
% |
2.51 |
% |
10.00 |
% |
11.02 |
% |
9.92 |
% |
|||||||||||||
| Net interest margin |
3.66 |
% |
3.70 |
% |
3.82 |
% |
3.90 |
% |
3.91 |
% |
3.73 |
% |
3.99 |
% |
|||||||||||||
| Net interest margin (fully tax equivalent) (1) |
3.71 |
% |
3.76 |
% |
3.87 |
% |
3.94 |
% |
3.95 |
% |
3.78 |
% |
4.03 |
% |
|||||||||||||
| Ending shareholders' equity as a percent of ending assets |
10.52 |
% |
10.78 |
% |
10.64 |
% |
10.63 |
% |
11.07 |
% |
10.52 |
% |
11.07 |
% |
|||||||||||||
| Ending tangible shareholders' equity as a percent of: |
|||||||||||||||||||||||||||
| Ending tangible assets |
8.71 |
% |
9.39 |
% |
9.23 |
% |
9.20 |
% |
9.60 |
% |
8.71 |
% |
9.60 |
% |
|||||||||||||
| Risk-weighted assets |
12.07 |
% |
13.56 |
% |
13.50 |
% |
13.59 |
% |
14.27 |
% |
12.06 |
% |
14.27 |
% |
|||||||||||||
| Average shareholders' equity as a percent of average assets |
10.75 |
% |
10.79 |
% |
10.69 |
% |
11.23 |
% |
11.19 |
% |
10.75 |
% |
11.15 |
% |
|||||||||||||
| Average tangible shareholders' equity as a percent of |
|||||||||||||||||||||||||||
| average tangible assets |
8.83 |
% |
9.38 |
% |
9.27 |
% |
9.77 |
% |
9.71 |
% |
8.73 |
% |
9.69 |
% |
|||||||||||||
| Book value per share |
$ |
12.61 |
$ |
12.23 |
$ |
11.98 |
$ |
11.86 |
$ |
11.99 |
$ |
12.61 |
$ |
11.99 |
|||||||||||||
| Tangible book value per share |
$ |
10.23 |
$ |
10.49 |
$ |
10.24 |
$ |
10.10 |
$ |
10.24 |
$ |
10.23 |
$ |
10.24 |
|||||||||||||
| Tier 1 Ratio (2) |
12.74 |
% |
14.34 |
% |
14.42 |
% |
14.61 |
% |
15.26 |
% |
12.74 |
% |
15.26 |
% |
|||||||||||||
| Total Capital Ratio (2) |
13.80 |
% |
15.59 |
% |
15.67 |
% |
15.88 |
% |
16.53 |
% |
13.80 |
% |
16.53 |
% |
|||||||||||||
| Leverage Ratio (2) |
9.70 |
% |
9.99 |
% |
9.94 |
% |
10.11 |
% |
10.29 |
% |
9.70 |
% |
10.29 |
% |
|||||||||||||
| AVERAGE BALANCE SHEET ITEMS |
|||||||||||||||||||||||||||
| Loans (3) |
$ |
4,052,697 |
$ |
3,637,458 |
$ |
3,532,311 |
$ |
3,450,069 |
$ |
3,410,102 |
$ |
3,742,728 |
$ |
3,310,619 |
|||||||||||||
| Covered loans and FDIC indemnification asset |
378,944 |
421,603 |
478,326 |
568,385 |
655,654 |
425,927 |
750,897 |
||||||||||||||||||||
| Investment securities |
1,865,241 |
1,811,175 |
1,807,571 |
1,654,374 |
1,589,666 |
1,828,207 |
1,710,310 |
||||||||||||||||||||
| Interest-bearing deposits with other banks |
29,433 |
10,697 |
2,922 |
4,906 |
4,010 |
14,448 |
6,989 |
||||||||||||||||||||
| Total earning assets |
$ |
6,326,315 |
$ |
5,880,933 |
$ |
5,821,130 |
$ |
5,677,734 |
$ |
5,659,432 |
$ |
6,011,310 |
$ |
5,778,815 |
|||||||||||||
| Total assets |
$ |
6,937,283 |
$ |
6,454,252 |
$ |
6,399,235 |
$ |
6,232,971 |
$ |
6,193,722 |
$ |
6,598,894 |
$ |
6,297,735 |
|||||||||||||
| Noninterest-bearing deposits |
$ |
1,179,207 |
$ |
1,110,697 |
$ |
1,096,509 |
$ |
1,129,097 |
$ |
1,072,259 |
$ |
1,129,107 |
$ |
1,061,850 |
|||||||||||||
| Interest-bearing deposits |
4,041,255 |
3,832,295 |
3,695,177 |
3,720,809 |
3,654,311 |
3,857,510 |
3,743,721 |
||||||||||||||||||||
| Total deposits |
$ |
5,220,462 |
$ |
4,942,992 |
$ |
4,791,686 |
$ |
4,849,906 |
$ |
4,726,570 |
$ |
4,986,617 |
$ |
4,805,571 |
|||||||||||||
| Borrowings |
$ |
896,328 |
$ |
745,990 |
$ |
842,479 |
$ |
583,522 |
$ |
667,706 |
$ |
828,463 |
$ |
682,116 |
|||||||||||||
| Shareholders' equity |
$ |
745,729 |
$ |
696,609 |
$ |
684,332 |
$ |
700,063 |
$ |
693,158 |
$ |
709,115 |
$ |
701,884 |
|||||||||||||
| CREDIT QUALITY RATIOS (excluding covered assets) |
|||||||||||||||||||||||||||
| Allowance to ending loans |
0.95 |
% |
1.15 |
% |
1.19 |
% |
1.25 |
% |
1.33 |
% |
0.95 |
% |
1.33 |
% |
|||||||||||||
| Allowance to nonaccrual loans |
101.94 |
% |
129.64 |
% |
121.76 |
% |
116.55 |
% |
78.57 |
% |
101.94 |
% |
78.57 |
% |
|||||||||||||
| Allowance to nonperforming loans |
77.17 |
% |
93.34 |
% |
88.28 |
% |
83.17 |
% |
61.34 |
% |
77.17 |
% |
61.34 |
% |
|||||||||||||
| Nonperforming loans to total loans |
1.24 |
% |
1.23 |
% |
1.35 |
% |
1.50 |
% |
2.16 |
% |
1.24 |
% |
2.16 |
% |
|||||||||||||
| Nonperforming assets to ending loans, plus OREO |
1.49 |
% |
1.59 |
% |
1.70 |
% |
2.06 |
% |
2.50 |
% |
1.49 |
% |
2.50 |
% |
|||||||||||||
| Nonperforming assets to total assets |
0.90 |
% |
0.89 |
% |
0.95 |
% |
1.13 |
% |
1.38 |
% |
0.90 |
% |
1.38 |
% |
|||||||||||||
| Net charge-offs to average loans (annualized) |
0.07 |
% |
0.11 |
% |
0.23 |
% |
0.41 |
% |
0.34 |
% |
0.13 |
% |
0.37 |
% |
|||||||||||||
| (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% 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. |
|||||||||||||||||||||||||||
| (2) September 30, 2014 regulatory capital ratios are preliminary. |
|||||||||||||||||||||||||||
| (3) Includes loans held for sale. |
|||||||||||||||||||||||||||
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||||||||
| (Dollars in thousands, except per share data) |
|||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||
| Three months ended, |
Nine months ended, |
||||||||||||||||||||
| Sep. 30, |
Sep. 30, |
||||||||||||||||||||
| 2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
||||||||||||||||
| Interest income |
|||||||||||||||||||||
| Loans, including fees |
$ |
53,725 |
$ |
52,908 |
1.5 |
% |
$ |
151,749 |
$ |
163,955 |
(7.4) |
% |
|||||||||
| Investment securities |
|||||||||||||||||||||
| Taxable |
10,227 |
8,267 |
23.7 |
% |
31,019 |
24,938 |
24.4 |
% |
|||||||||||||
| Tax-exempt |
894 |
541 |
65.2 |
% |
2,500 |
1,681 |
48.7 |
% |
|||||||||||||
| Total investment securities interest |
11,121 |
8,808 |
26.3 |
% |
33,519 |
26,619 |
25.9 |
% |
|||||||||||||
| Other earning assets |
(1,455) |
(2,185) |
(33.4) |
% |
(4,162) |
(5,213) |
(20.2) |
% |
|||||||||||||
| Total interest income |
63,391 |
59,531 |
6.5 |
% |
181,106 |
185,361 |
(2.3) |
% |
|||||||||||||
| Interest expense |
|||||||||||||||||||||
| Deposits |
4,218 |
2,856 |
47.7 |
% |
11,140 |
10,000 |
11.4 |
% |
|||||||||||||
| Short-term borrowings |
354 |
286 |
23.8 |
% |
975 |
920 |
6.0 |
% |
|||||||||||||
| Long-term borrowings |
456 |
617 |
(26.1) |
% |
1,505 |
1,925 |
(21.8) |
% |
|||||||||||||
| Total interest expense |
5,028 |
3,759 |
33.8 |
% |
13,620 |
12,845 |
6.0 |
% |
|||||||||||||
| Net interest income |
58,363 |
55,772 |
4.6 |
% |
167,486 |
172,516 |
(2.9) |
% |
|||||||||||||
| Provision for loan and lease losses - uncovered |
1,093 |
1,413 |
(22.6) |
% |
2,281 |
6,863 |
(66.8) |
% |
|||||||||||||
| Provision for loan and lease losses - covered |
(200) |
5,293 |
(103.8) |
% |
(2,805) |
6,052 |
(146.3) |
% |
|||||||||||||
| Net interest income after provision for loan and lease losses |
57,470 |
49,066 |
17.1 |
% |
168,010 |
159,601 |
5.3 |
% |
|||||||||||||
| Noninterest income |
|||||||||||||||||||||
| Service charges on deposit accounts |
5,263 |
5,447 |
(3.4) |
% |
15,172 |
15,369 |
(1.3) |
% |
|||||||||||||
| Trust and wealth management fees |
3,207 |
3,366 |
(4.7) |
% |
10,258 |
10,813 |
(5.1) |
% |
|||||||||||||
| Bankcard income |
2,859 |
2,637 |
8.4 |
% |
8,101 |
8,215 |
(1.4) |
% |
|||||||||||||
| Net gains from sales of loans |
1,660 |
751 |
121.0 |
% |
2,793 |
2,546 |
9.7 |
% |
|||||||||||||
| Gain on sale of investment securities |
0 |
0 |
N/M |
50 |
1,724 |
(97.1) |
% |
||||||||||||||
| FDIC loss sharing income |
(192) |
5,555 |
103.5 |
% |
408 |
7,105 |
(94.3) |
% |
|||||||||||||
| Accelerated discount on covered loans |
789 |
1,711 |
(53.9) |
% |
2,425 |
5,581 |
(56.5) |
% |
|||||||||||||
| Other |
2,925 |
2,824 |
3.6 |
% |
7,816 |
9,251 |
(15.5) |
% |
|||||||||||||
| Total noninterest income |
16,511 |
22,291 |
(25.9) |
% |
47,023 |
60,604 |
(22.4) |
% |
|||||||||||||
| Noninterest expenses |
|||||||||||||||||||||
| Salaries and employee benefits |
28,686 |
23,834 |
20.4 |
% |
79,562 |
77,379 |
2.8 |
% |
|||||||||||||
| Pension settlement charges |
0 |
1,396 |
(100.0) |
% |
0 |
5,712 |
(100.0) |
% |
|||||||||||||
| Net occupancy |
4,577 |
5,101 |
(10.3) |
% |
14,381 |
16,650 |
(13.6) |
% |
|||||||||||||
| Furniture and equipment |
2,265 |
2,213 |
2.3 |
% |
6,325 |
6,834 |
(7.4) |
% |
|||||||||||||
| Data processing |
4,393 |
2,584 |
70.0 |
% |
10,021 |
7,612 |
31.6 |
% |
|||||||||||||
| Marketing |
939 |
1,192 |
(21.2) |
% |
2,555 |
3,271 |
(21.9) |
% |
|||||||||||||
| Communication |
541 |
865 |
(37.5) |
% |
1,726 |
2,479 |
(30.4) |
% |
|||||||||||||
| Professional services |
1,568 |
1,528 |
2.6 |
% |
4,741 |
5,095 |
(6.9) |
% |
|||||||||||||
| State intangible tax |
648 |
1,010 |
(35.8) |
% |
1,936 |
3,028 |
(36.1) |
% |
|||||||||||||
| FDIC assessments |
1,126 |
1,107 |
1.7 |
% |
3,334 |
3,380 |
(1.4) |
% |
|||||||||||||
| Loss (gain) - other real estate owned |
844 |
184 |
358.7 |
% |
1,575 |
902 |
74.6 |
% |
|||||||||||||
| Loss (gain) - covered other real estate owned |
(1,433) |
204 |
(802.5) |
% |
(1,002) |
(2,165) |
(53.7) |
% |
|||||||||||||
| Loss sharing expense |
1,002 |
1,724 |
(41.9) |
% |
4,036 |
5,588 |
(27.8) |
% |
|||||||||||||
| Other |
6,263 |
5,859 |
6.9 |
% |
17,182 |
19,425 |
(11.5) |
% |
|||||||||||||
| Total noninterest expenses |
51,419 |
48,801 |
5.4 |
% |
146,372 |
155,190 |
(5.7) |
% |
|||||||||||||
| Income before income taxes |
22,562 |
22,556 |
0.0 |
% |
68,661 |
65,015 |
5.6 |
% |
|||||||||||||
| Income tax expense |
7,218 |
7,645 |
(5.6) |
% |
22,260 |
20,451 |
8.8 |
% |
|||||||||||||
| Net income |
$ |
15,344 |
$ |
14,911 |
2.9 |
% |
$ |
46,401 |
$ |
44,564 |
4.1 |
% |
|||||||||
| ADDITIONAL DATA |
|||||||||||||||||||||
| Net earnings per share - basic |
$ |
0.26 |
$ |
0.26 |
$ |
0.80 |
$ |
0.78 |
|||||||||||||
| Net earnings per share - diluted |
$ |
0.26 |
$ |
0.26 |
$ |
0.79 |
$ |
0.77 |
|||||||||||||
| Dividends declared per share |
$ |
0.15 |
$ |
0.27 |
$ |
0.45 |
$ |
0.79 |
|||||||||||||
| Return on average assets |
0.88 |
% |
0.96 |
% |
0.94 |
% |
0.95 |
% |
|||||||||||||
| Return on average shareholders' equity |
8.16 |
% |
8.53 |
% |
8.75 |
% |
8.49 |
% |
|||||||||||||
| Interest income |
$ |
63,391 |
$ |
59,531 |
6.5 |
% |
$ |
181,106 |
$ |
185,361 |
(2.3) |
% |
|||||||||
| Tax equivalent adjustment |
818 |
516 |
58.5 |
% |
2,278 |
1,507 |
51.2 |
% |
|||||||||||||
| Interest income - tax equivalent |
64,209 |
60,047 |
6.9 |
% |
183,384 |
186,868 |
(1.9) |
% |
|||||||||||||
| Interest expense |
5,028 |
3,759 |
33.8 |
% |
13,620 |
12,845 |
6.0 |
% |
|||||||||||||
| Net interest income - tax equivalent |
$ |
59,181 |
$ |
56,288 |
5.1 |
% |
$ |
169,764 |
$ |
174,023 |
(2.4) |
% |
|||||||||
| Net interest margin |
3.66 |
% |
3.91 |
% |
3.73 |
% |
3.99 |
% |
|||||||||||||
| Net interest margin (fully tax equivalent) (1) |
3.71 |
% |
3.95 |
% |
3.78 |
% |
4.03 |
% |
|||||||||||||
| Full-time equivalent employees |
1,395 |
1,292 |
|||||||||||||||||||
| (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% 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 provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
|||||||||||||||||||||
| N/M = Not meaningful. |
|||||||||||||||||||||
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||
| CONSOLIDATED QUARTERLY STATEMENTS OF INCOME |
|||||||||||||||||||
| (Dollars in thousands, except per share data) |
|||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||
| 2014 |
|||||||||||||||||||
| Third |
Second |
First |
% Change |
||||||||||||||||
| Quarter |
Quarter |
Quarter |
YTD |
Linked Qtr. |
|||||||||||||||
| Interest income |
|||||||||||||||||||
| Loans, including fees |
$ |
53,725 |
$ |
48,877 |
$ |
49,147 |
$ |
151,749 |
9.9 |
% |
|||||||||
| Investment securities |
|||||||||||||||||||
| Taxable |
10,227 |
10,355 |
10,437 |
31,019 |
(1.2) |
% |
|||||||||||||
| Tax-exempt |
894 |
796 |
810 |
2,500 |
12.3 |
% |
|||||||||||||
| Total investment securities interest |
11,121 |
11,151 |
11,247 |
33,519 |
(0.3) |
% |
|||||||||||||
| Other earning assets |
(1,455) |
(1,301) |
(1,406) |
(4,162) |
11.8 |
% |
|||||||||||||
| Total interest income |
63,391 |
58,727 |
58,988 |
181,106 |
7.9 |
% |
|||||||||||||
| Interest expense |
|||||||||||||||||||
| Deposits |
4,218 |
3,606 |
3,316 |
11,140 |
17.0 |
% |
|||||||||||||
| Short-term borrowings |
354 |
292 |
329 |
975 |
21.2 |
% |
|||||||||||||
| Long-term borrowings |
456 |
525 |
524 |
1,505 |
(13.1) |
% |
|||||||||||||
| Total interest expense |
5,028 |
4,423 |
4,169 |
13,620 |
13.7 |
% |
|||||||||||||
| Net interest income |
58,363 |
54,304 |
54,819 |
167,486 |
7.5 |
% |
|||||||||||||
| Provision for loan and lease losses - uncovered |
1,093 |
29 |
1,159 |
2,281 |
3,669.0 |
% |
|||||||||||||
| Provision for loan and lease losses - covered |
(200) |
(413) |
(2,192) |
(2,805) |
(51.6) |
% |
|||||||||||||
| Net interest income after provision for loan and lease losses |
57,470 |
54,688 |
55,852 |
168,010 |
5.1 |
% |
|||||||||||||
| Noninterest income |
|||||||||||||||||||
| Service charges on deposit accounts |
5,263 |
5,137 |
4,772 |
15,172 |
2.5 |
% |
|||||||||||||
| Trust and wealth management fees |
3,207 |
3,305 |
3,746 |
10,258 |
(3.0) |
% |
|||||||||||||
| Bankcard income |
2,859 |
2,809 |
2,433 |
8,101 |
1.8 |
% |
|||||||||||||
| Net gains from sales of loans |
1,660 |
737 |
396 |
2,793 |
125.2 |
% |
|||||||||||||
| Gain on sale of investment securities |
0 |
0 |
50 |
50 |
N/M |
||||||||||||||
| FDIC loss sharing income |
(192) |
1,108 |
(508) |
408 |
(117.3) |
% |
|||||||||||||
| Accelerated discount on covered loans |
789 |
621 |
1,015 |
2,425 |
27.1 |
% |
|||||||||||||
| Other |
2,925 |
2,620 |
2,271 |
7,816 |
11.6 |
% |
|||||||||||||
| Total noninterest income |
16,511 |
16,337 |
14,175 |
47,023 |
1.1 |
% |
|||||||||||||
| Noninterest expenses |
|||||||||||||||||||
| Salaries and employee benefits |
28,686 |
25,615 |
25,261 |
79,562 |
12.0 |
% |
|||||||||||||
| Net occupancy |
4,577 |
4,505 |
5,299 |
14,381 |
1.6 |
% |
|||||||||||||
| Furniture and equipment |
2,265 |
1,983 |
2,077 |
6,325 |
14.2 |
% |
|||||||||||||
| Data processing |
4,393 |
2,770 |
2,858 |
10,021 |
58.6 |
% |
|||||||||||||
| Marketing |
939 |
830 |
786 |
2,555 |
13.1 |
% |
|||||||||||||
| Communication |
541 |
562 |
623 |
1,726 |
(3.7) |
% |
|||||||||||||
| Professional services |
1,568 |
1,449 |
1,724 |
4,741 |
8.2 |
% |
|||||||||||||
| State intangible tax |
648 |
644 |
644 |
1,936 |
0.6 |
% |
|||||||||||||
| FDIC assessments |
1,126 |
1,074 |
1,134 |
3,334 |
4.8 |
% |
|||||||||||||
| Loss (gain) - other real estate owned |
844 |
313 |
418 |
1,575 |
169.6 |
% |
|||||||||||||
| Loss (gain) - covered other real estate owned |
(1,433) |
398 |
33 |
(1,002) |
(460.1) |
% |
|||||||||||||
| Loss sharing expense |
1,002 |
1,465 |
1,569 |
4,036 |
(31.6) |
% |
|||||||||||||
| Other |
6,263 |
5,503 |
5,416 |
17,182 |
13.8 |
% |
|||||||||||||
| Total noninterest expenses |
51,419 |
47,111 |
47,842 |
146,372 |
9.1 |
% |
|||||||||||||
| Income before income taxes |
22,562 |
23,914 |
22,185 |
68,661 |
(5.7) |
% |
|||||||||||||
| Income tax expense |
7,218 |
7,961 |
7,081 |
22,260 |
(9.3) |
% |
|||||||||||||
| Net income |
$ |
15,344 |
$ |
15,953 |
$ |
15,104 |
$ |
46,401 |
(3.8) |
% |
|||||||||
| ADDITIONAL DATA |
|||||||||||||||||||
| Net earnings per share - basic |
$ |
0.26 |
$ |
0.28 |
$ |
0.26 |
$ |
0.80 |
|||||||||||
| Net earnings per share - diluted |
$ |
0.26 |
$ |
0.28 |
$ |
0.26 |
$ |
0.79 |
|||||||||||
| Dividends declared per share |
$ |
0.15 |
$ |
0.15 |
$ |
0.15 |
$ |
0.45 |
|||||||||||
| Return on average assets |
0.88 |
% |
0.99 |
% |
0.96 |
% |
0.94 |
% |
|||||||||||
| Return on average shareholders' equity |
8.16 |
% |
9.19 |
% |
8.95 |
% |
8.75 |
% |
|||||||||||
| Interest income |
$ |
63,391 |
$ |
58,727 |
$ |
58,988 |
$ |
181,106 |
7.9 |
% |
|||||||||
| Tax equivalent adjustment |
818 |
758 |
702 |
2,278 |
7.9 |
% |
|||||||||||||
| Interest income - tax equivalent |
64,209 |
59,485 |
59,690 |
183,384 |
7.9 |
% |
|||||||||||||
| Interest expense |
5,028 |
4,423 |
4,169 |
13,620 |
13.7 |
% |
|||||||||||||
| Net interest income - tax equivalent |
$ |
59,181 |
$ |
55,062 |
$ |
55,521 |
$ |
169,764 |
7.5 |
% |
|||||||||
| Net interest margin |
3.66 |
% |
3.70 |
% |
3.82 |
% |
3.73 |
% |
|||||||||||
| Net interest margin (fully tax equivalent) (1) |
3.71 |
% |
3.76 |
% |
3.87 |
% |
3.78 |
% |
|||||||||||
| Full-time equivalent employees |
1,395 |
1,296 |
1,286 |
||||||||||||||||
| (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% 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 provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
|||||||||||||||||||
| N/M = Not meaningful. |
|||||||||||||||||||
| FIRST FINANCIAL BANCORP. |
||||||||||||||||||||
| CONSOLIDATED QUARTERLY STATEMENTS OF INCOME |
||||||||||||||||||||
| (Dollars in thousands, except per share data) |
||||||||||||||||||||
| (Unaudited) |
||||||||||||||||||||
| 2013 |
||||||||||||||||||||
| Fourth |
Third |
Second |
First |
Full |
||||||||||||||||
| Quarter |
Quarter |
Quarter |
Quarter |
Year |
||||||||||||||||
| Interest income |
||||||||||||||||||||
| Loans, including fees |
$ |
52,351 |
$ |
52,908 |
$ |
55,022 |
$ |
56,025 |
$ |
216,306 |
||||||||||
| Investment securities |
||||||||||||||||||||
| Taxable |
9,209 |
8,267 |
8,295 |
8,376 |
34,147 |
|||||||||||||||
| Tax-exempt |
719 |
541 |
560 |
580 |
2,400 |
|||||||||||||||
| Total investment securities interest |
9,928 |
8,808 |
8,855 |
8,956 |
36,547 |
|||||||||||||||
| Other earning assets |
(2,432) |
(2,185) |
(1,556) |
(1,472) |
(7,645) |
|||||||||||||||
| Total interest income |
59,847 |
59,531 |
62,321 |
63,509 |
245,208 |
|||||||||||||||
| Interest expense |
||||||||||||||||||||
| Deposits |
3,247 |
2,856 |
3,284 |
3,860 |
13,247 |
|||||||||||||||
| Short-term borrowings |
257 |
286 |
305 |
329 |
1,177 |
|||||||||||||||
| Long-term borrowings |
539 |
617 |
654 |
654 |
2,464 |
|||||||||||||||
| Total interest expense |
4,043 |
3,759 |
4,243 |
4,843 |
16,888 |
|||||||||||||||
| Net interest income |
55,804 |
55,772 |
58,078 |
58,666 |
228,320 |
|||||||||||||||
| Provision for loan and lease losses - uncovered |
1,851 |
1,413 |
2,409 |
3,041 |
8,714 |
|||||||||||||||
| Provision for loan and lease losses - covered |
(5,857) |
5,293 |
(8,283) |
9,042 |
195 |
|||||||||||||||
| Net interest income after provision for loan and lease losses |
59,810 |
49,066 |
63,952 |
46,583 |
219,411 |
|||||||||||||||
| Noninterest income |
||||||||||||||||||||
| Service charges on deposit accounts |
5,226 |
5,447 |
5,205 |
4,717 |
20,595 |
|||||||||||||||
| Trust and wealth management fees |
3,506 |
3,366 |
3,497 |
3,950 |
14,319 |
|||||||||||||||
| Bankcard income |
2,699 |
2,637 |
3,145 |
2,433 |
10,914 |
|||||||||||||||
| Net gains from sales of loans |
604 |
751 |
1,089 |
706 |
3,150 |
|||||||||||||||
| Gain on sale of investment securities |
0 |
0 |
188 |
1,536 |
1,724 |
|||||||||||||||
| FDIC loss sharing income |
(3,385) |
5,555 |
(7,384) |
8,934 |
3,720 |
|||||||||||||||
| Accelerated discount on covered loans |
1,572 |
1,711 |
1,935 |
1,935 |
7,153 |
|||||||||||||||
| Other |
2,821 |
2,824 |
3,940 |
2,487 |
12,072 |
|||||||||||||||
| Total noninterest income |
13,043 |
22,291 |
11,615 |
26,698 |
73,647 |
|||||||||||||||
| Noninterest expenses |
||||||||||||||||||||
| Salaries and employee benefits |
24,023 |
23,834 |
26,216 |
27,329 |
101,402 |
|||||||||||||||
| Pension settlement charges |
462 |
1,396 |
4,316 |
0 |
6,174 |
|||||||||||||||
| Net occupancy |
4,557 |
5,101 |
5,384 |
6,165 |
21,207 |
|||||||||||||||
| Furniture and equipment |
2,136 |
2,213 |
2,250 |
2,371 |
8,970 |
|||||||||||||||
| Data processing |
2,617 |
2,584 |
2,559 |
2,469 |
10,229 |
|||||||||||||||
| Marketing |
999 |
1,192 |
1,182 |
897 |
4,270 |
|||||||||||||||
| Communication |
728 |
865 |
781 |
833 |
3,207 |
|||||||||||||||
| Professional services |
1,781 |
1,528 |
1,764 |
1,803 |
6,876 |
|||||||||||||||
| State intangible tax |
901 |
1,010 |
1,004 |
1,014 |
3,929 |
|||||||||||||||
| FDIC assessments |
1,121 |
1,107 |
1,148 |
1,125 |
4,501 |
|||||||||||||||
| Loss (gain) - other real estate owned |
348 |
184 |
216 |
502 |
1,250 |
|||||||||||||||
| Loss (gain) - covered other real estate owned |
946 |
204 |
(2,212) |
(157) |
(1,219) |
|||||||||||||||
| Loss sharing expense |
1,495 |
1,724 |
1,578 |
2,286 |
7,083 |
|||||||||||||||
| FDIC indemnification impairment |
22,417 |
0 |
0 |
0 |
22,417 |
|||||||||||||||
| Other |
5,754 |
5,859 |
7,097 |
6,469 |
25,179 |
|||||||||||||||
| Total noninterest expenses |
70,285 |
48,801 |
53,283 |
53,106 |
225,475 |
|||||||||||||||
| Income before income taxes |
2,568 |
22,556 |
22,284 |
20,175 |
67,583 |
|||||||||||||||
| Income tax expense |
(1,217) |
7,645 |
6,455 |
6,351 |
19,234 |
|||||||||||||||
| Net income |
$ |
3,785 |
$ |
14,911 |
$ |
15,829 |
$ |
13,824 |
$ |
48,349 |
||||||||||
| ADDITIONAL DATA |
||||||||||||||||||||
| Net earnings per share - basic |
$ |
0.07 |
$ |
0.26 |
$ |
0.28 |
$ |
0.24 |
$ |
0.84 |
||||||||||
| Net earnings per share - diluted |
$ |
0.07 |
$ |
0.26 |
$ |
0.27 |
$ |
0.24 |
$ |
0.83 |
||||||||||
| Dividends declared per share |
$ |
0.15 |
$ |
0.27 |
$ |
0.24 |
$ |
0.28 |
$ |
0.94 |
||||||||||
| Return on average assets |
0.24 |
% |
0.96 |
% |
1.01 |
% |
0.88 |
% |
0.77 |
% |
||||||||||
| Return on average shareholders' equity |
2.15 |
% |
8.53 |
% |
9.02 |
% |
7.91 |
% |
6.89 |
% |
||||||||||
| Interest income |
$ |
59,847 |
$ |
59,531 |
$ |
62,321 |
$ |
63,509 |
$ |
245,208 |
||||||||||
| Tax equivalent adjustment |
635 |
516 |
514 |
477 |
2,142 |
|||||||||||||||
| Interest income - tax equivalent |
60,482 |
60,047 |
62,835 |
63,986 |
247,350 |
|||||||||||||||
| Interest expense |
4,043 |
3,759 |
4,243 |
4,843 |
16,888 |
|||||||||||||||
| Net interest income - tax equivalent |
$ |
56,439 |
$ |
56,288 |
$ |
58,592 |
$ |
59,143 |
$ |
230,462 |
||||||||||
| Net interest margin |
3.90 |
% |
3.91 |
% |
4.02 |
% |
4.04 |
% |
3.97 |
% |
||||||||||
| Net interest margin (fully tax equivalent) (1) |
3.94 |
% |
3.95 |
% |
4.06 |
% |
4.07 |
% |
4.01 |
% |
||||||||||
| Full-time equivalent employees |
1,306 |
1,292 |
1,338 |
1,385 |
||||||||||||||||
| (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% 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 provided 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) |
|||||||||||||||||||||||||
| Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Sep. 30, |
% Change |
% Change |
|||||||||||||||||||
| 2014 |
2014 |
2014 |
2013 |
2013 |
Linked Qtr. |
Comparable Qtr. |
|||||||||||||||||||
| ASSETS |
|||||||||||||||||||||||||
| Cash and due from banks |
$ |
121,360 |
$ |
123,160 |
$ |
161,515 |
$ |
117,620 |
$ |
177,698 |
(1.5) |
% |
(31.7) |
% |
|||||||||||
| Interest-bearing deposits with other banks |
22,365 |
39,237 |
9,681 |
25,830 |
10,414 |
(43.0) |
% |
114.8 |
% |
||||||||||||||||
| Investment securities available-for-sale |
929,594 |
897,715 |
862,526 |
913,601 |
854,747 |
3.6 |
% |
8.8 |
% |
||||||||||||||||
| Investment securities held-to-maturity |
900,521 |
899,502 |
890,806 |
837,272 |
669,093 |
0.1 |
% |
34.6 |
% |
||||||||||||||||
| Other investments |
49,986 |
47,640 |
47,659 |
47,427 |
75,945 |
4.9 |
% |
(34.2) |
% |
||||||||||||||||
| Loans held for sale |
16,816 |
13,108 |
6,171 |
8,114 |
10,704 |
28.3 |
% |
57.1 |
% |
||||||||||||||||
| Loans |
|||||||||||||||||||||||||
| Commercial |
1,304,782 |
1,143,693 |
1,118,057 |
1,035,668 |
960,016 |
14.1 |
% |
35.9 |
% |
||||||||||||||||
| Real estate - construction |
193,776 |
113,682 |
87,996 |
80,741 |
90,089 |
70.5 |
% |
115.1 |
% |
||||||||||||||||
| Real estate - commercial |
1,952,055 |
1,491,731 |
1,513,891 |
1,496,987 |
1,493,969 |
30.9 |
% |
30.7 |
% |
||||||||||||||||
| Real estate - residential |
426,558 |
372,601 |
360,671 |
352,931 |
352,830 |
14.5 |
% |
20.9 |
% |
||||||||||||||||
| Installment |
47,561 |
43,338 |
44,911 |
47,133 |
49,273 |
9.7 |
% |
(3.5) |
% |
||||||||||||||||
| Home equity |
416,099 |
380,746 |
374,427 |
376,454 |
373,839 |
9.3 |
% |
11.3 |
% |
||||||||||||||||
| Credit card |
35,925 |
35,656 |
34,458 |
35,592 |
34,285 |
0.8 |
% |
4.8 |
% |
||||||||||||||||
| Lease financing |
73,216 |
81,212 |
79,792 |
80,135 |
76,615 |
(9.8) |
% |
(4.4) |
% |
||||||||||||||||
| Total loans, excluding covered loans |
4,449,972 |
3,662,659 |
3,614,203 |
3,505,641 |
3,430,916 |
21.5 |
% |
29.7 |
% |
||||||||||||||||
| Less |
|||||||||||||||||||||||||
| Allowance for loan and lease losses |
42,454 |
42,027 |
43,023 |
43,829 |
45,514 |
1.0 |
% |
(6.7) |
% |
||||||||||||||||
| Net loans - uncovered |
4,407,518 |
3,620,632 |
3,571,180 |
3,461,812 |
3,385,402 |
21.7 |
% |
30.2 |
% |
||||||||||||||||
| Covered loans |
332,265 |
365,603 |
409,405 |
457,873 |
518,524 |
(9.1) |
% |
(35.9) |
% |
||||||||||||||||
| Less |
|||||||||||||||||||||||||
| Allowance for loan and lease losses |
11,535 |
12,425 |
10,573 |
18,901 |
23,259 |
(7.2) |
% |
(50.4) |
% |
||||||||||||||||
| Net loans - covered |
320,730 |
353,178 |
398,832 |
438,972 |
495,265 |
(9.2) |
% |
(35.2) |
% |
||||||||||||||||
| Net loans |
4,728,248 |
3,973,810 |
3,970,012 |
3,900,784 |
3,880,667 |
19.0 |
% |
21.8 |
% |
||||||||||||||||
| Premises and equipment |
141,851 |
133,418 |
135,105 |
137,110 |
139,125 |
6.3 |
% |
2.0 |
% |
||||||||||||||||
| Goodwill |
137,458 |
95,050 |
95,050 |
95,050 |
95,050 |
44.6 |
% |
44.6 |
% |
||||||||||||||||
| Other intangibles |
8,542 |
5,344 |
5,566 |
5,924 |
6,249 |
59.8 |
% |
36.7 |
% |
||||||||||||||||
| FDIC indemnification asset |
24,160 |
30,420 |
39,003 |
45,091 |
78,132 |
(20.6) |
% |
(69.1) |
% |
||||||||||||||||
| Accrued interest and other assets |
272,568 |
287,340 |
275,995 |
283,390 |
255,617 |
(5.1) |
% |
6.6 |
% |
||||||||||||||||
| Total Assets |
$ |
7,353,469 |
$ |
6,545,744 |
$ |
6,499,089 |
$ |
6,417,213 |
$ |
6,253,441 |
12.3 |
% |
17.6 |
% |
|||||||||||
| LIABILITIES |
|||||||||||||||||||||||||
| Deposits |
|||||||||||||||||||||||||
| Interest-bearing demand |
$ |
1,214,726 |
$ |
1,105,031 |
$ |
1,102,029 |
$ |
1,125,723 |
$ |
1,068,067 |
9.9 |
% |
13.7 |
% |
|||||||||||
| Savings |
1,827,590 |
1,656,798 |
1,639,495 |
1,612,005 |
1,593,895 |
10.3 |
% |
14.7 |
% |
||||||||||||||||
| Time |
1,247,334 |
973,100 |
956,049 |
952,327 |
926,029 |
28.2 |
% |
34.7 |
% |
||||||||||||||||
| Total interest-bearing deposits |
4,289,650 |
3,734,929 |
3,697,573 |
3,690,055 |
3,587,991 |
14.9 |
% |
19.6 |
% |
||||||||||||||||
| Noninterest-bearing |
1,243,367 |
1,140,198 |
1,122,816 |
1,147,452 |
1,141,016 |
9.0 |
% |
9.0 |
% |
||||||||||||||||
| Total deposits |
5,533,017 |
4,875,127 |
4,820,389 |
4,837,507 |
4,729,007 |
13.5 |
% |
17.0 |
% |
||||||||||||||||
| Federal funds purchased and securities sold |
|||||||||||||||||||||||||
| under agreements to repurchase |
113,303 |
128,013 |
112,293 |
94,749 |
105,472 |
(11.5) |
% |
7.4 |
% |
||||||||||||||||
| FHLB short-term borrowings |
806,000 |
686,300 |
722,800 |
654,000 |
518,200 |
17.4 |
% |
55.5 |
% |
||||||||||||||||
| Total short-term borrowings |
919,303 |
814,313 |
835,093 |
748,749 |
623,672 |
12.9 |
% |
47.4 |
% |
||||||||||||||||
| Long-term debt |
52,656 |
59,693 |
60,163 |
60,780 |
61,088 |
(11.8) |
% |
(13.8) |
% |
||||||||||||||||
| Total borrowed funds |
971,959 |
874,006 |
895,256 |
809,529 |
684,760 |
11.2 |
% |
41.9 |
% |
||||||||||||||||
| Accrued interest and other liabilities |
74,581 |
90,780 |
92,097 |
88,016 |
147,635 |
(17.8) |
% |
(49.5) |
% |
||||||||||||||||
| Total Liabilities |
6,579,557 |
5,839,913 |
5,807,742 |
5,735,052 |
5,561,402 |
12.7 |
% |
18.3 |
% |
||||||||||||||||
| SHAREHOLDERS' EQUITY |
|||||||||||||||||||||||||
| Common stock |
574,209 |
574,206 |
573,243 |
577,076 |
577,429 |
0.0 |
% |
(0.6)% |
|||||||||||||||||
| Retained earnings |
344,118 |
337,971 |
330,672 |
324,192 |
328,993 |
1.8 |
% |
4.6 |
% |
||||||||||||||||
| Accumulated other comprehensive loss |
(20,888) |
(21,569) |
(27,648) |
(31,281) |
(29,294) |
(3.2) |
% |
(28.7) |
% |
||||||||||||||||
| Treasury stock, at cost |
(123,527) |
(184,777) |
(184,920) |
(187,826) |
(185,089) |
(33.1) |
% |
(33.3) |
% |
||||||||||||||||
| Total Shareholders' Equity |
773,912 |
705,831 |
691,347 |
682,161 |
692,039 |
9.6 |
% |
11.8 |
% |
||||||||||||||||
| Total Liabilities and Shareholders' Equity |
$ |
7,353,469 |
$ |
6,545,744 |
$ |
6,499,089 |
$ |
6,417,213 |
$ |
6,253,441 |
12.3 |
% |
17.6 |
% |
|||||||||||
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||||||||
| AVERAGE CONSOLIDATED STATEMENTS OF CONDITION |
|||||||||||||||||||||||||||
| (Dollars in thousands) |
|||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||
| Quarterly Averages |
Year-to-Date Averages |
||||||||||||||||||||||||||
| Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Sep. 30, |
Sep. 30, |
||||||||||||||||||||||
| 2014 |
2014 |
2014 |
2013 |
2013 |
2014 |
2013 |
|||||||||||||||||||||
| ASSETS |
|||||||||||||||||||||||||||
| Cash and due from banks |
$ |
125,528 |
$ |
118,947 |
$ |
123,583 |
$ |
110,246 |
$ |
120,154 |
$ |
122,693 |
$ |
117,252 |
|||||||||||||
| Federal funds sold |
8,795 |
0 |
0 |
0 |
0 |
2,964 |
0 |
||||||||||||||||||||
| Interest-bearing deposits with other banks |
20,638 |
10,697 |
2,922 |
4,906 |
4,010 |
11,484 |
6,989 |
||||||||||||||||||||
| Investment securities |
1,865,241 |
1,811,175 |
1,807,571 |
1,654,374 |
1,589,666 |
1,828,207 |
1,710,310 |
||||||||||||||||||||
| Loans held for sale |
15,357 |
8,464 |
4,924 |
7,990 |
13,349 |
9,620 |
18,027 |
||||||||||||||||||||
| Loans |
|||||||||||||||||||||||||||
| Commercial |
1,196,075 |
1,117,483 |
1,062,225 |
986,438 |
937,939 |
1,125,751 |
902,071 |
||||||||||||||||||||
| Real estate - construction |
152,359 |
97,052 |
83,095 |
79,194 |
93,103 |
111,089 |
89,406 |
||||||||||||||||||||
| Real estate - commercial |
1,728,627 |
1,511,769 |
1,491,569 |
1,489,858 |
1,488,047 |
1,578,190 |
1,448,760 |
||||||||||||||||||||
| Real estate - residential |
401,706 |
365,118 |
355,593 |
351,929 |
347,110 |
374,308 |
335,262 |
||||||||||||||||||||
| Installment |
46,015 |
43,786 |
45,642 |
47,733 |
50,130 |
45,149 |
52,359 |
||||||||||||||||||||
| Home equity |
399,922 |
378,010 |
374,503 |
374,919 |
371,072 |
384,238 |
368,036 |
||||||||||||||||||||
| Credit card |
36,151 |
35,321 |
34,663 |
35,673 |
34,176 |
35,384 |
33,757 |
||||||||||||||||||||
| Lease financing |
76,485 |
80,455 |
80,097 |
76,335 |
75,176 |
78,999 |
62,941 |
||||||||||||||||||||
| Total loans, excluding covered loans |
4,037,340 |
3,628,994 |
3,527,387 |
3,442,079 |
3,396,753 |
3,733,108 |
3,292,592 |
||||||||||||||||||||
| Less |
|||||||||||||||||||||||||||
| Allowance for loan and lease losses |
42,611 |
43,559 |
44,273 |
46,531 |
49,451 |
43,475 |
49,677 |
||||||||||||||||||||
| Net loans - uncovered |
3,994,729 |
3,585,435 |
3,483,114 |
3,395,548 |
3,347,302 |
3,689,633 |
3,242,915 |
||||||||||||||||||||
| Covered loans |
350,894 |
387,616 |
434,527 |
490,072 |
573,243 |
390,706 |
650,105 |
||||||||||||||||||||
| Less |
|||||||||||||||||||||||||||
| Allowance for loan and lease losses |
13,086 |
11,590 |
17,629 |
21,733 |
31,208 |
14,085 |
39,670 |
||||||||||||||||||||
| Net loans - covered |
337,808 |
376,026 |
416,898 |
468,339 |
542,035 |
376,621 |
610,435 |
||||||||||||||||||||
| Net loans |
4,332,537 |
3,961,461 |
3,900,012 |
3,863,887 |
3,889,337 |
4,066,254 |
3,853,350 |
||||||||||||||||||||
| Premises and equipment |
136,956 |
134,522 |
136,624 |
138,644 |
141,498 |
136,035 |
144,516 |
||||||||||||||||||||
| Goodwill |
118,756 |
95,050 |
95,050 |
95,050 |
95,050 |
103,039 |
95,050 |
||||||||||||||||||||
| Other intangibles |
7,138 |
5,445 |
5,723 |
6,075 |
6,428 |
6,107 |
6,865 |
||||||||||||||||||||
| FDIC indemnification asset |
28,050 |
33,987 |
43,799 |
78,313 |
82,411 |
35,221 |
100,792 |
||||||||||||||||||||
| Accrued interest and other assets |
278,287 |
274,504 |
279,027 |
273,486 |
251,819 |
277,270 |
244,584 |
||||||||||||||||||||
| Total Assets |
$ |
6,937,283 |
$ |
6,454,252 |
$ |
6,399,235 |
$ |
6,232,971 |
$ |
6,193,722 |
$ |
6,598,894 |
$ |
6,297,735 |
|||||||||||||
| LIABILITIES |
|||||||||||||||||||||||||||
| Deposits |
|||||||||||||||||||||||||||
| Interest-bearing demand |
$ |
1,135,126 |
$ |
1,169,350 |
$ |
1,107,844 |
$ |
1,150,275 |
$ |
1,098,524 |
$ |
1,137,540 |
$ |
1,117,600 |
|||||||||||||
| Savings |
1,782,472 |
1,702,521 |
1,633,910 |
1,637,657 |
1,608,351 |
1,706,845 |
1,622,105 |
||||||||||||||||||||
| Time |
1,123,657 |
960,424 |
953,423 |
932,877 |
947,436 |
1,013,125 |
1,004,016 |
||||||||||||||||||||
| Total interest-bearing deposits |
4,041,255 |
3,832,295 |
3,695,177 |
3,720,809 |
3,654,311 |
3,857,510 |
3,743,721 |
||||||||||||||||||||
| Noninterest-bearing |
1,179,207 |
1,110,697 |
1,096,509 |
1,129,097 |
1,072,259 |
1,129,107 |
1,061,850 |
||||||||||||||||||||
| Total deposits |
5,220,462 |
4,942,992 |
4,791,686 |
4,849,906 |
4,726,570 |
4,986,617 |
4,805,571 |
||||||||||||||||||||
| Federal funds purchased and securities sold |
|||||||||||||||||||||||||||
| under agreements to repurchase |
125,094 |
123,682 |
110,533 |
107,738 |
114,505 |
119,823 |
118,097 |
||||||||||||||||||||
| FHLB short-term borrowings |
710,879 |
562,466 |
671,579 |
414,892 |
483,937 |
648,452 |
491,328 |
||||||||||||||||||||
| Total short-term borrowings |
835,973 |
686,148 |
782,112 |
522,630 |
598,442 |
768,275 |
609,425 |
||||||||||||||||||||
| Long-term debt |
60,355 |
59,842 |
60,367 |
60,892 |
69,264 |
60,188 |
72,691 |
||||||||||||||||||||
| Total borrowed funds |
896,328 |
745,990 |
842,479 |
583,522 |
667,706 |
828,463 |
682,116 |
||||||||||||||||||||
| Accrued interest and other liabilities |
74,764 |
68,661 |
80,738 |
99,480 |
106,288 |
74,699 |
108,164 |
||||||||||||||||||||
| Total Liabilities |
6,191,554 |
5,757,643 |
5,714,903 |
5,532,908 |
5,500,564 |
5,889,779 |
5,595,851 |
||||||||||||||||||||
| SHAREHOLDERS' EQUITY |
|||||||||||||||||||||||||||
| Common stock |
574,187 |
573,716 |
575,828 |
577,851 |
576,953 |
574,572 |
577,260 |
||||||||||||||||||||
| Retained earnings |
340,680 |
332,944 |
324,875 |
337,034 |
329,518 |
332,891 |
330,059 |
||||||||||||||||||||
| Accumulated other comprehensive loss |
(20,966) |
(25,189) |
(29,251) |
(28,380) |
(28,232) |
(25,106) |
(22,369) |
||||||||||||||||||||
| Treasury stock, at cost |
(148,172) |
(184,862) |
(187,120) |
(186,442) |
(185,081) |
(173,242) |
(183,066) |
||||||||||||||||||||
| Total Shareholders' Equity |
745,729 |
696,609 |
684,332 |
700,063 |
693,158 |
709,115 |
701,884 |
||||||||||||||||||||
| Total Liabilities and Shareholders' Equity |
$ |
6,937,283 |
$ |
6,454,252 |
$ |
6,399,235 |
$ |
6,232,971 |
$ |
6,193,722 |
$ |
6,598,894 |
$ |
6,297,735 |
|||||||||||||
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||||||||||||||||
| NET INTEREST MARGIN RATE/VOLUME ANALYSIS (1) |
|||||||||||||||||||||||||||||||||||
| (Dollars in thousands) |
|||||||||||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||||||||||
| Quarterly Averages |
Year-to-Date Averages |
||||||||||||||||||||||||||||||||||
| Sep. 30, 2014 |
Jun. 30, 2014 |
Sep. 30, 2013 |
Sep. 30, 2014 |
Sep. 30, 2013 |
|||||||||||||||||||||||||||||||
| Balance |
Yield |
Balance |
Yield |
Balance |
Yield |
Balance |
Yield |
Balance |
Yield |
||||||||||||||||||||||||||
| Earning assets |
|||||||||||||||||||||||||||||||||||
| Investments: |
|||||||||||||||||||||||||||||||||||
| Investment securities |
$ |
1,865,241 |
2.37 |
% |
$ |
1,811,175 |
2.47 |
% |
$ |
1,589,666 |
2.20 |
% |
$ |
1,828,207 |
2.45 |
% |
$ |
1,710,310 |
2.08 |
% |
|||||||||||||||
| Interest-bearing deposits with other banks |
29,433 |
0.42 |
% |
10,697 |
0.45 |
% |
4,010 |
0.49 |
% |
14,448 |
0.49 |
% |
6,989 |
0.38 |
% |
||||||||||||||||||||
| Gross loans (2) |
4,431,641 |
4.68 |
% |
4,059,061 |
4.70 |
% |
4,065,756 |
4.95 |
% |
4,168,655 |
4.73 |
% |
4,061,516 |
5.22 |
% |
||||||||||||||||||||
| Total earning assets |
6,326,315 |
3.98 |
% |
5,880,933 |
4.01 |
% |
5,659,432 |
4.17 |
% |
6,011,310 |
4.03 |
% |
5,778,815 |
4.29 |
% |
||||||||||||||||||||
| Nonearning assets |
|||||||||||||||||||||||||||||||||||
| Allowance for loan and lease losses |
(55,697) |
(55,149) |
(80,659) |
(57,560) |
(89,347) |
||||||||||||||||||||||||||||||
| Cash and due from banks |
125,528 |
118,947 |
120,154 |
122,693 |
117,252 |
||||||||||||||||||||||||||||||
| Accrued interest and other assets |
541,137 |
509,521 |
494,795 |
522,451 |
491,015 |
||||||||||||||||||||||||||||||
| Total assets |
$ |
6,937,283 |
$ |
6,454,252 |
$ |
6,193,722 |
$ |
6,598,894 |
$ |
6,297,735 |
|||||||||||||||||||||||||
| Interest-bearing liabilities |
|||||||||||||||||||||||||||||||||||
| Deposits: |
|||||||||||||||||||||||||||||||||||
| Interest-bearing demand |
$ |
1,135,126 |
0.11 |
% |
$ |
1,169,350 |
0.11 |
% |
$ |
1,098,524 |
0.12 |
% |
$ |
1,137,540 |
0.11 |
% |
$ |
1,117,600 |
0.11 |
% |
|||||||||||||||
| Savings |
1,782,472 |
0.26 |
% |
1,702,521 |
0.23 |
% |
1,608,351 |
0.09 |
% |
1,706,845 |
0.23 |
% |
1,622,105 |
0.10 |
% |
||||||||||||||||||||
| Time |
1,123,657 |
0.97 |
% |
960,424 |
0.98 |
% |
947,436 |
0.90 |
% |
1,013,125 |
0.96 |
% |
1,004,016 |
1.05 |
% |
||||||||||||||||||||
| Total interest-bearing deposits |
4,041,255 |
0.41 |
% |
3,832,295 |
0.38 |
% |
3,654,311 |
0.31 |
% |
3,857,510 |
0.39 |
% |
3,743,721 |
0.36 |
% |
||||||||||||||||||||
| Borrowed funds |
|||||||||||||||||||||||||||||||||||
| Short-term borrowings |
835,973 |
0.17 |
% |
686,148 |
0.17 |
% |
598,442 |
0.19 |
% |
768,275 |
0.17 |
% |
609,425 |
0.20 |
% |
||||||||||||||||||||
| Long-term debt |
60,355 |
3.00 |
% |
59,842 |
3.52 |
% |
69,264 |
3.53 |
% |
60,188 |
3.34 |
% |
72,691 |
3.54 |
% |
||||||||||||||||||||
| Total borrowed funds |
896,328 |
0.36 |
% |
745,990 |
0.44 |
% |
667,706 |
0.54 |
% |
828,463 |
0.40 |
% |
682,116 |
0.56 |
% |
||||||||||||||||||||
| Total interest-bearing liabilities |
4,937,583 |
0.40 |
% |
4,578,285 |
0.39 |
% |
4,322,017 |
0.35 |
% |
4,685,973 |
0.39 |
% |
4,425,837 |
0.39 |
% |
||||||||||||||||||||
| Noninterest-bearing liabilities |
|||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits |
1,179,207 |
1,110,697 |
1,072,259 |
1,129,107 |
1,061,850 |
||||||||||||||||||||||||||||||
| Other liabilities |
74,764 |
68,661 |
106,288 |
74,699 |
108,164 |
||||||||||||||||||||||||||||||
| Shareholders' equity |
745,729 |
696,609 |
693,158 |
709,115 |
701,884 |
||||||||||||||||||||||||||||||
| Total liabilities & shareholders' equity |
$ |
6,937,283 |
$ |
6,454,252 |
$ |
6,193,722 |
$ |
6,598,894 |
$ |
6,297,735 |
|||||||||||||||||||||||||
| Net interest income (1) |
$ |
58,363 |
$ |
54,304 |
$ |
55,772 |
$ |
167,486 |
$ |
172,516 |
|||||||||||||||||||||||||
| Net interest spread (1) |
3.58 |
% |
3.62 |
% |
3.82 |
% |
3.64 |
% |
3.90 |
% |
|||||||||||||||||||||||||
| Net interest margin (1) |
3.66 |
% |
3.70 |
% |
3.91 |
% |
3.73 |
% |
3.99 |
% |
|||||||||||||||||||||||||
| (1) Not tax equivalent. |
|||||||||||||||||||||||||||||||||||
| (2) Loans held for sale, nonaccrual loans, covered loans, and indemnification asset 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 |
$ |
(470) |
$ |
440 |
$ |
(30) |
$ |
670 |
$ |
1,643 |
$ |
2,313 |
$ |
4,738 |
$ |
2,162 |
$ |
6,900 |
||||||||||||||||||
| Interest-bearing deposits with other banks |
(1) |
20 |
19 |
(1) |
27 |
26 |
6 |
27 |
33 |
|||||||||||||||||||||||||||
| Gross loans (2) |
(237) |
4,912 |
4,675 |
(2,792) |
4,313 |
1,521 |
(14,980) |
3,792 |
(11,188) |
|||||||||||||||||||||||||||
| Total earning assets |
(708) |
5,372 |
4,664 |
(2,123) |
5,983 |
3,860 |
(10,236) |
5,981 |
(4,255) |
|||||||||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits |
$ |
350 |
$ |
262 |
$ |
612 |
$ |
958 |
$ |
404 |
$ |
1,362 |
$ |
811 |
$ |
329 |
$ |
1,140 |
||||||||||||||||||
| Borrowed funds |
||||||||||||||||||||||||||||||||||||
| Short-term borrowings |
(5) |
67 |
62 |
(33) |
101 |
68 |
(147) |
202 |
55 |
|||||||||||||||||||||||||||
| Long-term debt |
(78) |
9 |
(69) |
(94) |
(67) |
(161) |
(107) |
(313) |
(420) |
|||||||||||||||||||||||||||
| Total borrowed funds |
(83) |
76 |
(7) |
(127) |
34 |
(93) |
(254) |
(111) |
(365) |
|||||||||||||||||||||||||||
| Total interest-bearing liabilities |
267 |
338 |
605 |
831 |
438 |
1,269 |
557 |
218 |
775 |
|||||||||||||||||||||||||||
| Net interest income (1) |
$ |
(975) |
$ |
5,034 |
$ |
4,059 |
$ |
(2,954) |
$ |
5,545 |
$ |
2,591 |
$ |
(10,793) |
$ |
5,763 |
$ |
(5,030) |
||||||||||||||||||
| (1) Not tax equivalent. |
||||||||||||||||||||||||||||||||||||
| (2) Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans. |
||||||||||||||||||||||||||||||||||||
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||||||||
| CREDIT QUALITY |
|||||||||||||||||||||||||||
| (excluding covered assets) |
|||||||||||||||||||||||||||
| (Dollars in thousands) |
|||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||
| Nine months ended, |
|||||||||||||||||||||||||||
| Sep. 30, |
Jun. 30, |
Mar 31, |
Dec. 31, |
Sep. 30, |
Sep. 30, |
Sep. 30, |
|||||||||||||||||||||
| 2014 |
2014 |
2014 |
2013 |
2013 |
2014 |
2013 |
|||||||||||||||||||||
| ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY |
|||||||||||||||||||||||||||
| Balance at beginning of period |
$ |
42,027 |
$ |
43,023 |
$ |
43,829 |
$ |
45,514 |
$ |
47,047 |
$ |
43,829 |
$ |
47,777 |
|||||||||||||
| Provision for uncovered loan and lease losses |
1,093 |
29 |
1,159 |
1,851 |
1,413 |
2,281 |
6,863 |
||||||||||||||||||||
| Gross charge-offs |
|||||||||||||||||||||||||||
| Commercial |
83 |
571 |
656 |
293 |
1,482 |
1,310 |
3,122 |
||||||||||||||||||||
| Real estate - construction |
0 |
0 |
0 |
1 |
0 |
0 |
0 |
||||||||||||||||||||
| Real estate - commercial |
702 |
699 |
543 |
3,113 |
2,174 |
1,944 |
5,213 |
||||||||||||||||||||
| Real estate - residential |
161 |
283 |
257 |
218 |
249 |
701 |
798 |
||||||||||||||||||||
| Installment |
63 |
14 |
128 |
39 |
99 |
205 |
296 |
||||||||||||||||||||
| Home equity |
469 |
383 |
544 |
706 |
411 |
1,396 |
1,703 |
||||||||||||||||||||
| Other |
338 |
237 |
296 |
398 |
696 |
871 |
1,383 |
||||||||||||||||||||
| Total gross charge-offs |
1,816 |
2,187 |
2,424 |
4,768 |
5,111 |
6,427 |
12,515 |
||||||||||||||||||||
| Recoveries |
|||||||||||||||||||||||||||
| Commercial |
566 |
580 |
39 |
194 |
92 |
1,185 |
478 |
||||||||||||||||||||
| Real estate - construction |
0 |
0 |
0 |
46 |
490 |
0 |
626 |
||||||||||||||||||||
| Real estate - commercial |
323 |
334 |
114 |
634 |
1,264 |
771 |
1,360 |
||||||||||||||||||||
| Real estate - residential |
34 |
100 |
27 |
96 |
98 |
161 |
107 |
||||||||||||||||||||
| Installment |
46 |
50 |
77 |
66 |
57 |
173 |
244 |
||||||||||||||||||||
| Home equity |
46 |
37 |
103 |
136 |
95 |
186 |
372 |
||||||||||||||||||||
| Other |
135 |
61 |
99 |
60 |
69 |
295 |
202 |
||||||||||||||||||||
| Total recoveries |
1,150 |
1,162 |
459 |
1,232 |
2,165 |
2,771 |
3,389 |
||||||||||||||||||||
| Total net charge-offs |
666 |
1,025 |
1,965 |
3,536 |
2,946 |
3,656 |
9,126 |
||||||||||||||||||||
| Ending allowance for uncovered loan and lease losses |
$ |
42,454 |
$ |
42,027 |
$ |
43,023 |
$ |
43,829 |
$ |
45,514 |
$ |
42,454 |
$ |
45,514 |
|||||||||||||
| NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) |
|||||||||||||||||||||||||||
| Commercial |
(0.16) |
% |
0.00 |
% |
0.24 |
% |
0.04 |
% |
0.59 |
% |
0.01 |
% |
0.39 |
% |
|||||||||||||
| Real estate - construction |
0.00 |
% |
0.00 |
% |
0.00 |
% |
(0.23) |
% |
(2.09) |
% |
0.00 |
% |
(0.94) |
% |
|||||||||||||
| Real estate - commercial |
0.09 |
% |
0.10 |
% |
0.12 |
% |
0.66 |
% |
0.24 |
% |
0.10 |
% |
0.36 |
% |
|||||||||||||
| Real estate - residential |
0.13 |
% |
0.20 |
% |
0.26 |
% |
0.14 |
% |
0.17 |
% |
0.19 |
% |
0.28 |
% |
|||||||||||||
| Installment |
0.15 |
% |
(0.33) |
% |
0.45 |
% |
(0.22) |
% |
0.33 |
% |
0.09 |
% |
0.13 |
% |
|||||||||||||
| Home equity |
0.42 |
% |
0.37 |
% |
0.48 |
% |
0.60 |
% |
0.34 |
% |
0.42 |
% |
0.48 |
% |
|||||||||||||
| Other |
0.72 |
% |
0.61 |
% |
0.70 |
% |
1.20 |
% |
2.27 |
% |
0.67 |
% |
1.63 |
% |
|||||||||||||
| Total net charge-offs |
0.07 |
% |
0.11 |
% |
0.23 |
% |
0.41 |
% |
0.34 |
% |
0.13 |
% |
0.37 |
% |
|||||||||||||
| COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS |
|||||||||||||||||||||||||||
| Nonaccrual loans (1) |
|||||||||||||||||||||||||||
| Commercial |
$ |
6,486 |
$ |
7,077 |
$ |
7,097 |
$ |
7,934 |
$ |
8,554 |
$ |
6,486 |
$ |
8,554 |
|||||||||||||
| Real estate - construction |
223 |
223 |
223 |
223 |
1,099 |
223 |
1,099 |
||||||||||||||||||||
| Real estate - commercial |
25,262 |
15,288 |
16,758 |
17,286 |
35,549 |
25,262 |
35,549 |
||||||||||||||||||||
| Real estate - residential |
6,696 |
6,806 |
8,157 |
8,606 |
9,346 |
6,696 |
9,346 |
||||||||||||||||||||
| Installment |
398 |
459 |
399 |
574 |
421 |
398 |
421 |
||||||||||||||||||||
| Home equity |
2,581 |
2,565 |
2,700 |
2,982 |
2,871 |
2,581 |
2,871 |
||||||||||||||||||||
| Lease financing |
0 |
0 |
0 |
0 |
86 |
0 |
86 |
||||||||||||||||||||
| Nonaccrual loans |
41,646 |
32,418 |
35,334 |
37,605 |
57,926 |
41,646 |
57,926 |
||||||||||||||||||||
| Accruing troubled debt restructurings (TDRs) |
13,369 |
12,607 |
13,400 |
15,094 |
16,278 |
13,369 |
16,278 |
||||||||||||||||||||
| Total nonperforming loans |
55,015 |
45,025 |
48,734 |
52,699 |
74,204 |
55,015 |
74,204 |
||||||||||||||||||||
| Other real estate owned (OREO) |
11,316 |
13,370 |
12,743 |
19,806 |
11,804 |
11,316 |
11,804 |
||||||||||||||||||||
| Total nonperforming assets |
66,331 |
58,395 |
61,477 |
72,505 |
86,008 |
66,331 |
86,008 |
||||||||||||||||||||
| Accruing loans past due 90 days or more |
249 |
256 |
208 |
218 |
265 |
249 |
265 |
||||||||||||||||||||
| Total underperforming assets |
$ |
66,580 |
$ |
58,651 |
$ |
61,685 |
$ |
72,723 |
$ |
86,273 |
$ |
66,580 |
$ |
86,273 |
|||||||||||||
| Total classified assets |
$ |
105,914 |
$ |
103,799 |
$ |
103,471 |
$ |
110,509 |
$ |
120,423 |
$ |
105,914 |
120,423 |
||||||||||||||
| CREDIT QUALITY RATIOS (excluding covered assets) |
|||||||||||||||||||||||||||
| Allowance for loan and lease losses to |
|||||||||||||||||||||||||||
| Nonaccrual loans |
101.94 |
% |
129.64 |
% |
121.76 |
% |
116.55 |
% |
78.57 |
% |
101.94 |
% |
78.57 |
% |
|||||||||||||
| Nonperforming loans |
77.17 |
% |
93.34 |
% |
88.28 |
% |
83.17 |
% |
61.34 |
% |
77.17 |
% |
61.34 |
% |
|||||||||||||
| Total ending loans |
0.95 |
% |
1.15 |
% |
1.19 |
% |
1.25 |
% |
1.33 |
% |
0.95 |
% |
1.33 |
% |
|||||||||||||
| Nonperforming loans to total loans |
1.24 |
% |
1.23 |
% |
1.35 |
% |
1.50 |
% |
2.16 |
% |
1.24 |
% |
2.16 |
% |
|||||||||||||
| Nonperforming assets to |
|||||||||||||||||||||||||||
| Ending loans, plus OREO |
1.49 |
% |
1.59 |
% |
1.70 |
% |
2.06 |
% |
2.50 |
% |
1.49 |
% |
2.50 |
% |
|||||||||||||
| Total assets |
0.90 |
% |
0.89 |
% |
0.95 |
% |
1.13 |
% |
1.38 |
% |
0.90 |
% |
1.38 |
% |
|||||||||||||
| Nonperforming assets, excluding accruing TDRs to |
|||||||||||||||||||||||||||
| Ending loans, plus OREO |
1.19 |
% |
1.25 |
% |
1.33 |
% |
1.63 |
% |
2.03 |
% |
1.19 |
% |
2.03 |
% |
|||||||||||||
| Total assets |
0.72 |
% |
0.70 |
% |
0.74 |
% |
0.89 |
% |
1.12 |
% |
0.72 |
% |
1.12 |
% |
|||||||||||||
| (1) Nonaccrual loans include nonaccrual TDRs of $13.2 million, $11.0 million, $14.6 million, $13.0 million, and $13.0 million, as of September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013, respectively. |
|||||||||||||||||||||||||||
| FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||||||||
| CAPITAL ADEQUACY |
|||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) |
|||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||
| Nine months ended, |
|||||||||||||||||||||||||||
| Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Sep. 30, |
Sep. 30, |
Sep. 30, |
|||||||||||||||||||||
| 2014 |
2014 |
2014 |
2013 |
2013 |
2014 |
2013 |
|||||||||||||||||||||
| PER COMMON SHARE |
|||||||||||||||||||||||||||
| Market Price |
|||||||||||||||||||||||||||
| High |
$ |
17.66 |
$ |
18.43 |
$ |
18.20 |
$ |
17.59 |
$ |
16.47 |
$ |
18.43 |
$ |
16.47 |
|||||||||||||
| Low |
$ |
15.83 |
$ |
15.51 |
$ |
15.98 |
$ |
14.56 |
$ |
14.89 |
$ |
15.51 |
$ |
14.46 |
|||||||||||||
| Close |
$ |
15.83 |
$ |
17.21 |
$ |
17.98 |
$ |
17.43 |
$ |
15.17 |
$ |
15.83 |
$ |
15.17 |
|||||||||||||
| Average shares outstanding - basic |
59,403,109 |
57,201,494 |
57,091,604 |
57,152,425 |
57,201,390 |
57,907,203 |
57,309,934 |
||||||||||||||||||||
| Average shares outstanding - diluted |
60,112,932 |
57,951,636 |
57,828,179 |
57,863,433 |
58,012,588 |
58,639,394 |
58,143,372 |
||||||||||||||||||||
| Ending shares outstanding |
61,368,473 |
57,718,317 |
57,709,937 |
57,533,046 |
57,702,444 |
61,368,473 |
57,702,444 |
||||||||||||||||||||
| REGULATORY CAPITAL |
Preliminary |
Preliminary |
|||||||||||||||||||||||||
| Tier 1 Capital |
$ |
662,608 |
$ |
640,237 |
$ |
631,099 |
$ |
624,850 |
$ |
631,846 |
$ |
662,608 |
$ |
631,846 |
|||||||||||||
| Tier 1 Ratio |
12.74 |
% |
14.34 |
% |
14.42 |
% |
14.61 |
% |
15.26 |
% |
12.74 |
% |
15.26 |
% |
|||||||||||||
| Total Capital |
$ |
717,823 |
$ |
696,014 |
$ |
685,926 |
$ |
679,074 |
$ |
684,363 |
$ |
717,823 |
$ |
684,363 |
|||||||||||||
| Total Capital Ratio |
13.80 |
% |
15.59 |
% |
15.67 |
% |
15.88 |
% |
16.53 |
% |
13.80 |
% |
16.53 |
% |
|||||||||||||
| Total Capital in excess of minimum |
|||||||||||||||||||||||||||
| requirement |
$ |
301,653 |
$ |
338,848 |
$ |
335,806 |
$ |
336,982 |
$ |
353,118 |
$ |
301,653 |
$ |
353,118 |
|||||||||||||
| Total Risk-Weighted Assets |
$ |
5,202,123 |
$ |
4,464,578 |
$ |
4,376,505 |
$ |
4,276,152 |
$ |
4,140,561 |
$ |
5,202,123 |
$ |
4,140,561 |
|||||||||||||
| Leverage Ratio |
9.70 |
% |
9.99 |
% |
9.94 |
% |
10.11 |
% |
10.29 |
% |
9.70 |
% |
10.29 |
% |
|||||||||||||
| OTHER CAPITAL RATIOS |
|||||||||||||||||||||||||||
| Ending shareholders' equity to ending assets |
10.52 |
% |
10.78 |
% |
10.64 |
% |
10.63 |
% |
11.07 |
% |
10.52 |
% |
11.07 |
% |
|||||||||||||
| Ending tangible shareholders' equity to ending tangible assets |
8.71 |
% |
9.39 |
% |
9.23 |
% |
9.20 |
% |
9.60 |
% |
8.71 |
% |
9.60 |
% |
|||||||||||||
| Average shareholders' equity to average assets |
10.75 |
% |
10.79 |
% |
10.69 |
% |
11.23 |
% |
11.19 |
% |
10.75 |
% |
11.15 |
% |
|||||||||||||
| Average tangible shareholders' equity to average tangible assets |
8.83 |
% |
9.38 |
% |
9.27 |
% |
9.77 |
% |
9.71 |
% |
8.73 |
% |
9.69 |
% |
|||||||||||||
| REPURCHASE PROGRAM (1) |
|||||||||||||||||||||||||||
| Shares repurchased |
0 |
0 |
40,255 |
209,745 |
0 |
40,255 |
540,400 |
||||||||||||||||||||
| Average share repurchase price |
N/A |
N/A |
$ |
17.32 |
$ |
16.39 |
N/A |
$ |
17.32 |
$ |
15.43 |
||||||||||||||||
| Total cost of shares repurchased |
N/A |
N/A |
$ |
697 |
$ |
3,438 |
N/A |
$ |
697 |
$ |
8,339 |
||||||||||||||||
| (1) Represents share repurchases as part of publicly announced plans. |
|||||||||||||||||||||||||||
| N/A=Not applicable |
|||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION ON COVERED ASSETS
ACCELERATED DISCOUNT ON LOAN PREPAYMENTS AND DISPOSITIONS
During the third quarter, First Financial recognized approximately $0.8 million in accelerated discount on covered loans, net of the related adjustment on the FDIC indemnification asset. Accelerated discount is recognized when covered loans, which are recorded on the Company's balance sheet at an amount less than the unpaid principal balance, prepay at an amount greater than their recorded book value. Prepayments can occur through either customer payments before the maturity date or loan sales. The amount of discount recognized is generally offset by a related reduction in the FDIC indemnification asset.
NET INTEREST MARGIN IMPACT
Net interest margin is affected by certain activity related to the covered loan portfolio. The majority of these loans are accounted for under FASB ASC Topic 310-30 and, as such, the Company is required to periodically update its forecast of expected cash flows from these loans. Impairment, as a result of a decrease in expected cash flows, is recognized as provision expense in the period it is measured and has no impact on net interest margin. Improvements in expected cash flows, in excess of any prior impairment, are recognized on a prospective basis through an upward adjustment to the yield earned on the portfolio. Impairment and improvement are both partially offset by the impact of changes in the value of the FDIC indemnification asset. Impairment is partially offset by an increase to the FDIC indemnification asset as a result of FDIC loss sharing income. Improvement, which is reflected as a higher yield, is partially offset by a lower yield earned on the FDIC indemnification asset until the next periodic valuation of the loans and the indemnification asset. The weighted average yield of the acquired loan portfolio may also be subject to change as loans with higher yields pay down more quickly or slowly than loans with lower yields.
The following table shows the estimated yield earned by the Company on its covered and uncovered loan portfolios and the FDIC indemnification asset for the three months ended September 30, 2014.
| Table VII |
|||||||
| For the Three Months Ended |
|||||||
| Average |
|||||||
| (Dollars in thousands) |
Balance |
Yield |
|||||
| Loans, excluding covered loans 1 |
$ |
4,052,697 |
4.35% |
||||
| Covered loan portfolio accounted for under ASC Topic 310-30 2 |
298,884 |
10.14% |
|||||
| Covered loan portfolio accounted for under ASC Topic 310-20 3 |
52,010 |
12.83% |
|||||
| FDIC indemnification asset 2 |
28,050 |
(21.00)% |
|||||
| Total |
$ |
4,431,641 |
4.68% |
||||
| Yield earned on total covered loans |
10.54% |
||||||
| Yield earned on total covered loans and FDIC indemnification asset |
8.21% |
||||||
| 1 Includes loans with loss share coverage removed |
|||||||
| 2 Future yield adjustments subject to change based on required, periodic valuation procedures |
|||||||
| 3 Includes loans with revolving privileges which are scoped out of ASC Topic 310-30 and certain loans which the Company elected to treat under the cost recovery method of accounting |
|||||||
COVERED ASSETS
The following table presents the covered loan portfolio as of September 30, 2014, June 30, 2014 and September 30, 2013.
| Table VIII |
||||||||||||||||||||||
| As of |
||||||||||||||||||||||
| September 30, 2014 |
June 30, 2014 |
September 30, 2013 |
||||||||||||||||||||
| Percent |
Percent |
Percent |
||||||||||||||||||||
| (Dollars in thousands) |
Balance |
of Total |
Balance |
of Total |
Balance |
of Total |
||||||||||||||||
| Commercial |
$ |
23,744 |
7.1 |
% |
$ |
27,488 |
7.5 |
% |
$ |
52,276 |
10.1 |
% |
||||||||||
| Real estate - construction |
1,748 |
0.5 |
% |
2,021 |
0.6 |
% |
8,692 |
1.7 |
% |
|||||||||||||
| Real estate - commercial |
183,912 |
55.4 |
% |
208,338 |
57.0 |
% |
312,798 |
60.3 |
% |
|||||||||||||
| Real estate - residential |
72,315 |
21.8 |
% |
74,960 |
20.5 |
% |
84,418 |
16.3 |
% |
|||||||||||||
| Installment |
3,570 |
1.1 |
% |
4,415 |
1.2 |
% |
6,135 |
1.2 |
% |
|||||||||||||
| Home equity |
44,859 |
13.5 |
% |
46,100 |
12.6 |
% |
51,692 |
10.0 |
% |
|||||||||||||
| Other |
2,117 |
0.6 |
% |
2,281 |
0.6 |
% |
2,513 |
0.5 |
% |
|||||||||||||
| Total |
$ |
332,265 |
100.0 |
% |
$ |
365,603 |
100.0 |
% |
$ |
518,524 |
100.0 |
% |
||||||||||
As of September 30, 2014, 6.9% of the Company's total loans were covered loans. During the third quarter, the total balance of covered loans decreased $33.3 million, or 9.1%, compared to the prior quarter. Included in the decrease in covered loan balances during the third quarter was a $16.4 million, or 25.0%, decline in the balance of covered loans classified as likely to exit resulting from the continued successful execution of resolution strategies.
Covered OREO decreased $8.3 million, or 42.5%, during the third quarter to $11.2 million as of September 30, 2014, as additions of $0.1 million were offset by resolutions and valuation adjustments of $8.4 million. The Company recognized a $1.4 million net gain on sales of covered OREO during the quarter, which was offset by a corresponding decrease in FDIC loss sharing income of approximately 80% of the net gain recognized.
As required under the loss sharing agreements, First Financial must file quarterly certifications with the FDIC on all covered loans. The payment of claims is subject to the FDIC's review for compliance with the loss sharing agreements and to date, all certifications have been filed in a timely manner and without significant issues.
ALLOWANCE FOR LOAN AND LEASE LOSSES - COVERED
Under the applicable accounting guidance, the allowance for loan losses related to covered loans is a result of impairment identified in ongoing valuation procedures and is generally recognized in the current period as provision expense. However, if improvement is noted in a loan pool that had previously experienced impairment, the amount of improvement is recognized as a reduction to the applicable period's provision expense. Additional improvement beyond previously recorded impairment is reflected as a yield adjustment on a prospective basis. The timing inherent in this accounting treatment may result in earnings volatility in future periods.
The following table presents activity in the allowance for loan losses related to covered loans for the three months ended September 30, 2014 and for the trailing three quarters.
| Table IX |
|||||||||||||||||
| As of or for the Three Months Ended |
|||||||||||||||||
| September 30, |
June 30, |
March 31, |
December 31, |
||||||||||||||
| (Dollars in thousands) |
2014 |
2014 |
2014 |
2013 |
|||||||||||||
| Balance at beginning of period |
$ |
12,425 |
$ |
10,573 |
$ |
18,901 |
$ |
23,259 |
|||||||||
| Provision for loan and lease losses - covered |
(200) |
(413) |
(2,192) |
(5,857) |
|||||||||||||
| Total gross charge-offs |
(3,053) |
(3,485) |
(7,240) |
(3,850) |
|||||||||||||
| Total recoveries |
2,363 |
5,750 |
1,104 |
5,349 |
|||||||||||||
| Total net (charge-offs) / recoveries |
(690) |
2,265 |
(6,136) |
1,499 |
|||||||||||||
| Ending allowance for loan and lease losses - covered |
$ |
11,535 |
$ |
12,425 |
$ |
10,573 |
$ |
18,901 |
|||||||||
As a percentage of total covered loans, the allowance for loan losses totaled 3.47% as of September 30, 2014 compared to 3.40% as of June 30, 2014.
Net charge offs on covered loans during the third quarter were $0.7 million compared to net recoveries of $2.3 million for the second quarter 2014. During the third quarter, the Company recognized negative provision expense related to covered loans of $0.2 million compared to negative provision expense of $0.4 million for the linked quarter. The difference between provision expense and net charge-offs / recoveries primarily relates to the quarterly re-estimation of cash flow expectations required under FASB ASC Topic 310-30.
In addition to negative covered provision expense, the Company also incurred $1.0 million of loss sharing expense and realized $1.4 million of net gains on dispositions of covered OREO during the third quarter. Loss sharing expense consists primarily of credit and collection-related expenses. The related offset to covered provision expense, loss sharing expenses and net gains on covered OREO for reimbursements due to the FDIC under loss sharing agreements was recorded as negative FDIC loss sharing income of $0.2 million for the quarter.
SOURCE First Financial Bancorp
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