First Financial Bancorp Reports Fourth Quarter and Full Year 2010 Financial Results
CINCINNATI, Jan. 26, 2011 /PRNewswire/ -- First Financial Bancorp (Nasdaq: FFBC) ("First Financial" or the "Company") announced today financial and operational results for the fourth quarter 2010 and for the twelve month period ended December 31, 2010.
Fourth quarter 2010 net income and net income available to common shareholders were $14.3 million and earnings per diluted common share were $0.24. This compares with third quarter 2010 net income and net income available to common shareholders of $15.6 million and earnings per diluted common share of $0.27 and fourth quarter 2009 net income of $13.8 million, net income available to common shareholders of $12.8 million and earnings per diluted common share of $0.25.
For the twelve month period ended December 31, 2010, net income was $59.3 million, net income available to common shareholders was $57.4 million and earnings per diluted common share were $0.99 as compared to net income of $221.3 million, net income available to common shareholders of $217.8 million and earnings per diluted common share of $4.78 for the twelve month period ended December 31, 2009. Included in the financial results for 2009 was a pre-tax bargain purchase gain of $342.5 million recognized during the third quarter 2009 in connection with the Company's FDIC-assisted transactions.
- 81st consecutive quarter of profitability
- Continued strong quarterly performance
- Quarterly return on average assets of 0.90%; full year return on average assets of 0.91%
- Quarterly return on average shareholders' equity of 8.14%; full year return on average shareholders' equity of 8.68%
- Quarterly return on risk-weighted assets of 1.54%; full year return on risk-weighted assets of 1.56%
- Board of directors announces 20% increase in the quarterly dividend to $0.12 per share
- Earnings consistency provides capacity to support higher payout
- Robust capital levels still allow ability to take advantage of strategic opportunities
- Strong focus on sales leads to increases across business lines
- Quarterly growth in commercial loans of 4.8%
- Residential mortgage originations up 61% over third quarter
- Strategic transaction and savings deposits increased 7.1% during the quarter
- Capital ratios remain among industry leaders
- Tangible common equity to tangible assets of 10.33%
- Tier 1 capital ratio of 18.45%
- Total risk-based capital of 19.72%
- Quarterly net interest margin increased to 4.65%
- Continued positive impact from runoff of retail and brokered certificates of deposit and disciplined pricing strategies
- Full quarter impact of prepayment of FHLB advances
- Improved credit quality
- Total NPLs decreased 11.2% from the prior quarter to $70.6 million
- Total NPAs decreased 9.5% from the prior quarter to $88.5 million
- Net loan charge-offs related to uncovered loans increased to $9.8 million from $6.8 million for the linked quarter, but down 13.5% compared to December 31, 2009
- Provision for uncovered loan losses of $9.7 million
- Balance sheet risk continues to remain low
- FDIC loss share coverage on 34.5% of loan portfolio
- 100% risk-weighted assets continue to represent less than 50% of balance sheet
Claude Davis, President and Chief Executive Officer, commented, "We ended the year with solid financial and operational performance. 2010 was a year in which we focused on the successful integration of our 2009 acquisitions and continued executing our strategic plan. Evaluation of both our legacy franchise and the operations we acquired in 2009 is an ongoing process as we remain committed to making prudent decisions that focus on building shareholder value.
"The board of directors is pleased to announce an increase to the quarterly dividend by $0.02 to $0.12 per share. Despite uncertainty related to future regulatory capital requirements, our strong capital levels continue to grow as a result of our earnings power. We believe our capital position will remain at levels allowing us to take full advantage of growth opportunities in our strategic markets.
"During the fourth quarter, we also made progress in improving our level of nonperforming assets as NPAs to total assets decreased to 1.42% from 1.59% at the end of the third quarter. We have seen improvement in the status of some of our previously stressed borrowers and our continued efforts to address problem credits have met with some success as we finalized resolution strategies on several nonperforming loans. However, as the economy is still lagging, we remain vigilant in the monitoring of our portfolio.
"While prudent lending opportunities continue to be limited in our core markets, we were encouraged as new loan originations outpaced amortizations and paydowns for the first time in 2010. Specifically, we saw modest growth in our commercial and commercial real estate portfolios and we remain confident that our client-oriented community bank business model will allow us to take advantage of a greater number of lending opportunities in 2011."
SECTION I – RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income on a fully tax-equivalent basis for the fourth quarter 2010 was $68.1 million as compared to the third quarter 2010 and $73.5 million as compared to the year-over-year period. Despite a lower level of average interest earning assets relative to the linked quarter and a decrease in interest earned on the FDIC indemnification asset, net interest income was impacted by a decrease in interest expense resulting from lower time and brokered deposit balances and the prepayment of FHLB advances during the third quarter 2010. The decrease compared to the year-over-year quarter was driven by a 7.2% decline in average interest earning assets and a decline in the yield on earning assets, including a 154 bp reduction in the yield earned on investment securities.
For the twelve month period ended December 31, 2010, net interest income on a fully tax-equivalent basis was $276.4 million as compared to $177.2 million for the comparable period in 2009. The increase of $99.2 million was driven by higher levels of average interest-earning assets and interest-bearing liabilities resulting from the 2009 acquisitions as well as a significant increase in the net interest margin.
NET INTEREST MARGIN
Net interest margin was 4.65% for the fourth quarter 2010 as compared to 4.59% for the third quarter 2010 and 4.65% for the fourth quarter 2009. As in prior quarters, the net interest margin continued to be negatively impacted by the combination of normal amortization and paydowns in both the legacy and acquired loan portfolios and reduced loan demand in the Company's strategic markets. The Company did realize a full quarter of positive impact, however, related to the third quarter 2010 prepayment of $232 million of FHLB advances. First Financial also used a portion of its liquidity to purchase $364.2 million of agency mortgage backed securities, which, when combined with prior quarters' purchases, helped to offset the net effect of muted loan activity. Additionally, net interest margin was positively impacted by the expected runoff of retail and brokered certificates of deposit and the lower earning asset base during the quarter.
Net interest margin was also affected by certain activity related to the acquired loan portfolio. The majority of these loans are accounted for under ASC Topic 310-30 and, as such, the Company is required to periodically update its forecast of expected cash flows from these loans. The Company recognized an improvement in the cash flow expectations related to certain loan pools, which is reflected as a yield adjustment on a prospective basis. However, this yield improvement will be offset as the Company also recognized a decline in expected cash flows, and, hence, a lower prospective yield, related to the FDIC indemnification asset.
The following table shows the estimated yield earned by the Company on its legacy and originated loan portfolio, acquired loan portfolio and the FDIC indemnification asset for the three months ended December 31, 2010.
Table I |
For the Three Months Ended |
||||
December 31, 2010 |
|||||
Average |
|||||
Balance |
Yield |
||||
Legacy and originated loan portfolio (1) |
$ 2,949,524 |
5.36% |
|||
Acquired loan portfolio accounted for under ASC Topic 310-30 (2) |
1,406,311 |
10.29% |
|||
FDIC indemnification asset (2) |
232,734 |
0.40% |
|||
Total |
$4,588,569 |
6.59% |
|||
(1) Includes acquired revolving loans not accounted for under ASC Topic 310-30; yield estimated at |
|||||
time of origination |
|||||
(2) Future yield adjustments subject to change based on required, periodic valuation procedures |
|||||
As part of its on-going valuation procedures, the Company experienced a $17.3 million net improvement in the cash flow expectations related to certain loan pools during the fourth quarter 2010. As a result, the average yield earned on covered loans increased from 9.75% during the third quarter 2010 to 10.29% during the fourth quarter 2010. On a prospective basis and until its next periodic valuation, the Company expects the yield on covered loans to be 10.41%.
This projected improvement in cash flow expectations on loans is offset by a related $13.6 million decline in cash flow expectations on the FDIC indemnification asset. The net result of improvement and impairment (discussed in more detail in Section II) activity related to covered loans affected the average yield earned on the indemnification asset, decreasing from 3.91% during the third quarter 2010 to 0.40% during the fourth quarter 2010. On a prospective basis and until its next periodic valuation, the Company expects the yield on the indemnification asset to be -0.76%.
Net interest margin for the twelve month period ended December 31, 2010 was 4.66% as compared to 4.05% for the twelve month period ended December 31, 2009.
NONINTEREST INCOME
The following table presents noninterest income for the three months ended December 31, September 30, June 30 and March 31, 2010 as well as for the twelve months ended December 31, 2010 highlighting the estimated impact of covered loan activity and other transition items on the Company's reported balance.
Table II |
||||||||||
For the Twelve |
||||||||||
For the Three Months Ended |
Months Ended |
|||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
(Dollars in thousands) |
2010 |
2010 |
2010 |
2010 |
2010 |
|||||
Total noninterest income |
$ 34,534 |
$ 44,895 |
$ 40,467 |
$ 26,935 |
$ 146,831 |
|||||
Significant components of noninterest income |
||||||||||
Items likely to recur: |
||||||||||
Accelerated discount on loan prepayments and dispositions (1), (2) |
6,113 |
9,448 |
7,408 |
6,098 |
29,067 |
|||||
FDIC loss sharing income |
11,306 |
17,800 |
15,170 |
7,568 |
51,844 |
|||||
Other acquired-non-strategic income |
527 |
44 |
475 |
80 |
1,126 |
|||||
Transition-related items |
- |
- |
- |
366 |
366 |
|||||
Items expected not to recur: |
||||||||||
Gain on sale of insurance business |
- |
1,356 |
- |
- |
1,356 |
|||||
FDIC settlement and other items not expected to recur |
551 |
(132) |
2,930 |
- |
3,349 |
|||||
Total excluding items noted above |
$ 16,037 |
$ 16,379 |
$ 14,484 |
$ 12,823 |
$ 59,723 |
|||||
(1) See Section II for additional information |
||||||||||
(2) Net of the corresponding valuation adjustment on the FDIC indemnification asset |
||||||||||
During the quarterly periods presented above, excluding reimbursements due from the FDIC resulting from loss share agreements, covered loan activity positively impacted noninterest income due to loan prepayments. This activity is discussed in more detail in Section II. There were no sales of covered loans or loans related to the Company's franchise finance business during the fourth quarter 2010. Periodic sales of loans originated by the franchise finance unit may occur in future periods in order to mitigate credit and geographic concentration risk within the franchise portfolio.
Excluding the items highlighted in Table II, estimated noninterest income earned in the fourth quarter 2010 was $16.0 million as compared to $16.4 million in the third quarter 2010 and $14.5 million in the fourth quarter 2009.
For the twelve month period ended December 31, 2010, noninterest income totaled $146.8 million as compared to $404.7 million for the similar year-over-year period. Excluding the items highlighted in Table II, the bargain purchase gain on the acquisitions recognized during the third quarter 2009, gains on sales of investments and the gain on sale of the property & casualty portion of the insurance business which occurred during the first quarter 2009, noninterest income was $59.7 million for the twelve month period ended December 31, 2010 as compared to $48.1 million for the twelve months ended December 31, 2009. The increase in the comparable year-over-year quarter was driven primarily by higher service charges on deposit accounts resulting from an increase in transaction-based deposits and increased bankcard income as a result of the 2009 acquisitions as well as higher gains on sales of loans from increased mortgage origination activity.
NONINTEREST EXPENSE
The following table presents noninterest expense for the three months ended December 31, September 30, June 30 and March 31, 2010 as well as for the twelve months ended December 31, 2010 including the estimated effect of acquired-non-strategic operations, acquisition-related costs and other transition items.
Table III |
||||||||||
For the Twelve |
||||||||||
For the Three Months Ended |
Months Ended |
|||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
(Dollars in thousands) |
2010 |
2010 |
2010 |
2010 |
2010 |
|||||
Total noninterest expense |
$ 56,290 |
$ 61,310 |
$ 55,819 |
$ 60,261 |
$ 233,680 |
|||||
Significant components of noninterest expense |
||||||||||
Items likely to recur: |
||||||||||
Acquired-non-strategic operating expenses (1) |
4,052 |
566 |
1,270 |
2,201 |
8,089 |
|||||
Transition-related items (1) |
684 |
846 |
1,321 |
6,263 |
9,114 |
|||||
FDIC indemnification support |
1,160 |
875 |
938 |
605 |
3,578 |
|||||
Items expected not to recur: |
||||||||||
Acquisition-related costs (1) |
412 |
1,505 |
2,180 |
2,628 |
6,725 |
|||||
FHLB prepayment penalty |
- |
8,029 |
- |
- |
8,029 |
|||||
Other items not expected to recur |
1,787 |
493 |
2,387 |
1,019 |
5,686 |
|||||
Total excluding items noted above |
$ 48,195 |
$ 48,996 |
$ 47,723 |
$ 47,545 |
$ 192,459 |
|||||
(1) See Section II for additional information |
||||||||||
Similar to the first three quarters of 2010, noninterest expense during the fourth quarter 2010 continued to be affected by acquisition-related costs as well as other transition-related items and costs related to the Company's acquired-non-strategic operations. The increase in acquired-non-strategic operating expenses during the fourth quarter was partially attributable to the Company's strategic decision to exit the Michigan and Louisville, KY markets and the reclassification of expenses associated with those locations. Excluding the items highlighted in Table III, estimated noninterest expense in the fourth quarter 2010 was $48.2 million as compared to $49.0 million in the third quarter 2010 and $47.2 million in the fourth quarter 2009.
For the twelve month period ended December 31, 2010, noninterest expense totaled $233.7 million compared to $170.6 million for the comparable year-over-year period. Excluding the items highlighted in Table III, acquisition-related and other non-recurring expenses incurred during the third quarter 2009, the FDIC special assessment and acquisition related expenses incurred during the second quarter 2009 and severance costs related to the first quarter 2009 sale of the property & casualty portion of the insurance business, noninterest expense was $192.5 million for the twelve month period ended December 31, 2010 as compared to $143.0 million for the twelve months ended December 31, 2009. This increase of $49.5 million was primarily driven by higher salaries and employee benefits, occupancy costs, professional service fees, equipment expenses, marketing costs and data processing expenses resulting from the 2009 acquisitions.
While the technology and operational integration of Irwin and Peoples is complete, it is expected that wind-down costs related to acquired subsidiaries will continue through 2011.
INCOME TAXES
For the fourth quarter 2010, income tax expense was $8.1 million, resulting in an effective tax rate of 36.2%, compared with income tax expense of $8.8 million and an effective tax rate of 36.2% during the third quarter 2010 and $7.1 million and an effective tax rate of 34.0% during the comparable year-over-year period.
For the twelve month period ended December 31, 2010, income tax expense was $32.7 million, resulting in an effective tax rate of 35.6%, compared with income tax expense of $132.6 million and an effective tax rate of 37.5% for the twelve months ended December 31, 2009.
CREDIT QUALITY – EXCLUDING COVERED ASSETS
The following table presents certain credit quality metrics related to the Company's uncovered loan portfolio as of December 31, 2010 and for the trailing four quarters.
Table IV |
|||||||||||
As of or for the Three Months Ended |
|||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
|||||||
(Dollars in thousands) |
2010 |
2010 |
2010 |
2010 |
2009 |
||||||
Total nonaccrual loans |
$ 62,302 |
$ 66,157 |
$ 66,671 |
$ 66,869 |
$ 71,657 |
||||||
Restructured loans |
8,336 |
13,365 |
12,752 |
7,584 |
6,125 |
||||||
Total nonperforming loans |
70,638 |
79,522 |
79,423 |
74,453 |
77,782 |
||||||
Total nonperforming assets |
88,545 |
97,827 |
96,241 |
92,540 |
81,927 |
||||||
Nonperforming assets as a % of: |
|||||||||||
Period-end loans plus OREO |
3.12% |
3.51% |
3.42% |
3.27% |
2.83% |
||||||
Total assets |
1.42% |
1.59% |
1.46% |
1.41% |
1.23% |
||||||
Nonperforming loans as a % of total loans |
2.51% |
2.88% |
2.84% |
2.65% |
2.69% |
||||||
Provision for loan and lease losses - uncovered |
$ 9,741 |
$ 6,287 |
$ 6,158 |
$ 11,378 |
$ 14,812 |
||||||
Allowance for uncovered loan & lease losses |
$ 57,235 |
$ 57,249 |
$ 57,811 |
$ 56,642 |
$ 59,311 |
||||||
Allowance for loan & lease losses as a % of: |
|||||||||||
Period-end loans |
2.03% |
2.07% |
2.07% |
2.01% |
2.05% |
||||||
Nonaccrual loans |
91.9% |
86.5% |
86.7% |
84.7% |
82.8% |
||||||
Nonperforming loans |
81.0% |
72.0% |
72.8% |
76.1% |
76.3% |
||||||
Total net charge-offs |
$ 9,755 |
$ 6,849 |
$ 4,989 |
$ 14,047 |
$ 11,271 |
||||||
Annualized net-charge-offs as a % of average |
|||||||||||
loans & leases |
1.39% |
0.97% |
0.71% |
2.00% |
1.53% |
||||||
Net Charge-offs
Fourth quarter 2010 net charge-offs were $9.8 million, or 1.39% of average loans and leases, compared with $6.8 million, or 0.97%, for the linked quarter and $11.3 million, or 1.53%, for the comparable year-over-year quarter. The increase compared to the linked quarter was driven by higher charge-offs in the commercial and home equity portfolios and a lower level of total recoveries, offset by lower charge-offs in the construction portfolio. Included in the $5.1 million of gross charge-offs related to commercial loans was $3.8 million related to the resolution of one relationship which included the sale and charge-off of $7.7 million of previously reported restructured and nonaccrual loans.
For the twelve months ended December 31, 2010, net charge-offs were $35.6 million, or 1.27% of average loans and leases. These amounts were impacted by the alleged fraudulent activity noted during the first quarter 2010 which totaled $8.8 million, representing 31 basis points of average loans and leases for the period. Excluding the alleged fraudulent activity, net charge-offs were $26.8 million, or 0.96%, as compared to $32.6 million, or 1.16%, for the twelve month period ended December 31, 2009.
Nonperforming Assets
Nonperforming loans totaled $70.6 million and nonperforming assets totaled $88.5 million as of December 31, 2010 compared with $79.5 million and $97.8 million, respectively, for the linked quarter and $77.8 million and $81.9 million, respectively, for the comparable year-over-year quarter. The decrease was driven primarily by a reduction in commercial nonaccrual loans of $3.6 million and a decrease of $5.0 million related to restructured loans. As a result of continued efforts in identifying and resolving problem credits, improvements, resolutions and charge-off activity during the quarter outpaced additions to nonperforming assets.
Total classified assets decreased $10.4 million during the fourth quarter 2010 to $202.1 million. Classified assets are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse. The decrease was due to the finalization of resolution strategies on several problem credits. All credits included in classified assets are monitored closely and have workout strategies in place should their status continue to deteriorate.
As mentioned earlier, the Company continues to aggressively identify and resolve problem credits with some signs of effectiveness as the level of nonperforming assets improved during the quarter. However, the deterioration of one or two larger credits could result in nonperforming assets returning to previous levels. As a result, all larger credit relationships are closely monitored in order to mitigate potential losses should increased stress become evident. With regard to consumer-oriented loan portfolios, the Company continues to experience stress given the prolonged depressed economic environment and current unemployment levels.
Delinquent Loans
Loans 30-to-89 days past due totaled $22.3 million, or 0.79% of period end loans, as of December 31, 2010. This compares to $45.1 million, or 1.63%, as of September 30, 2010 and $19.1 million, or 0.66%, as of December 31, 2009. The decrease compared to the linked quarter resulted from the resolution of several large multi-family loans.
Provision for Loan & Lease Losses
Fourth quarter 2010 provision expense related to uncovered loans and leases was $9.7 million as compared to $6.3 million during the linked quarter and $14.8 million during the comparable year-over-year quarter. As a percentage of net charge-offs, fourth quarter 2010 provision expense was 99.9% compared to 91.8% during the third quarter 2010 and 131.4% during the fourth quarter 2009.
Allowance for Loan & Lease Losses
As of the end of the fourth quarter 2010, the allowance for uncovered loan and lease losses was $57.2 million as compared to $57.2 million as of September 30, 2010 and $59.3 million as of December 31, 2009. As a percentage of period-end loans, the allowance for loan and lease losses was 2.03% as of December 31, 2010 as compared to 2.07% as of September 30, 2010 and 2.05% as of December 31, 2009. The allowance for loan and lease losses as of December 31, 2010 reflects management's estimate of credit risk inherent in the Company's uncovered loan portfolio at that time.
LOANS (EXCLUDING COVERED LOANS)
The following table presents the loan portfolio, not including covered loans, as of December 31, 2010, September 30, 2010 and December 31, 2009.
Table V |
||||||||||||
As of |
||||||||||||
December 31, 2010 |
September 30, 2010 |
December 31, 2009 |
||||||||||
Percent |
Percent |
Percent |
||||||||||
(Dollars in thousands) |
Balance |
of Total |
Balance |
of Total |
Balance |
of Total |
||||||
Commercial |
$ 800,253 |
28.4% |
$ 763,449 |
27.6% |
$ 800,261 |
27.6% |
||||||
Real estate - construction |
163,543 |
5.8% |
178,914 |
6.5% |
253,223 |
8.7% |
||||||
Real estate - commercial |
1,139,931 |
40.5% |
1,095,543 |
39.6% |
1,079,628 |
37.3% |
||||||
Real estate - residential |
269,173 |
9.6% |
283,914 |
10.3% |
321,047 |
11.1% |
||||||
Installment |
69,711 |
2.5% |
73,138 |
2.6% |
82,989 |
2.9% |
||||||
Home equity |
341,310 |
12.1% |
341,288 |
12.3% |
328,940 |
11.4% |
||||||
Credit card |
29,563 |
1.0% |
28,825 |
1.0% |
29,027 |
1.0% |
||||||
Lease financing |
2,609 |
0.1% |
138 |
0.0% |
14 |
0.0% |
||||||
Total |
$ 2,816,093 |
100.0% |
$ 2,765,209 |
100.0% |
$ 2,895,129 |
100.0% |
||||||
Loans, excluding covered loans, totaled $2.8 billion at the end of the fourth quarter, representing an increase of $50.9 million, or 1.8%, compared to September 30, 2010 and a decrease of $79.0 million, or 2.7%, compared to December 31, 2009. As compared to the linked quarter, the composition of the loan portfolio remained similar to the linked quarter with net loan growth occurring in the commercial and commercial real estate portfolios offset by decreases in the construction and residential real estate portfolios. While the Company did experience modest growth in the portfolio during the fourth quarter, loan demand continues to remain slow in the Company's strategic operating markets.
INVESTMENTS
The following table presents a summary of the total investment portfolio at December 31, 2010.
Table VI |
|||||||||||||
As of December 31, 2010 |
|||||||||||||
Book |
Percent of |
Book |
Cost |
Market |
Gain/ |
||||||||
(Dollars in thousands) |
Value |
Total |
Yield |
Basis |
Value |
(Loss) |
|||||||
U.S. Treasury notes |
$ 13,959 |
1.4% |
2.03 |
99.71 |
102.37 |
$ 372 |
|||||||
Agencies |
105,985 |
10.4% |
2.76 |
100.00 |
100.91 |
957 |
|||||||
CMOs (agency) |
336,458 |
33.1% |
1.51 |
100.35 |
100.76 |
1,355 |
|||||||
CMOs (private) |
44 |
0.0% |
0.95 |
100.00 |
100.39 |
0 |
|||||||
MBSs (agency) |
452,366 |
44.6% |
3.56 |
102.18 |
104.85 |
11,532 |
|||||||
908,812 |
89.5% |
2.68 |
101.21 |
102.80 |
14,216 |
||||||||
Municipal |
17,479 |
1.7% |
7.19 |
99.22 |
101.52 |
401 |
|||||||
Other (1) |
88,914 |
8.8% |
3.08 |
102.37 |
103.07 |
608 |
|||||||
106,393 |
10.5% |
3.75 |
101.85 |
102.81 |
1,009 |
||||||||
Total investment portfolio |
$ 1,015,205 |
100.0% |
2.79 |
101.28 |
102.80 |
$ 15,225 |
|||||||
Net Unrealized Gain/(Loss) |
$ 15,225 |
||||||||||||
Aggregate Gains |
17,970 |
||||||||||||
Aggregate Losses |
(2,745) |
||||||||||||
Net Unrealized Gain/(Loss) % of Book Value |
1.50% |
||||||||||||
(1) Other includes $78.7 million of regulatory stock |
|||||||||||||
The increase in the investment portfolio relative to the linked quarter was due to the purchase of $364.2 million of GNMA, FNMA and FHLMC mortgage backed securities during the quarter, net of maturities and amortizations. While loan demand remains muted, the Company continues to selectively redeploy a portion of its cash position to purchase investments as market conditions permit. Future purchases will be made utilizing the same discipline and portfolio management philosophy applied in the past, including avoidance of material credit risk and geographic concentration risk within mortgage-backed securities, while also balancing the Company's overall asset / liability management objectives.
DEPOSITS
The following table presents a roll-forward of deposit activity during the fourth quarter 2010, including activity related to deposits acquired through the FDIC-assisted transactions.
Table VII |
|||||||
Deposit Activity - Fourth Quarter 2010 |
|||||||
Balance as of |
Acquired- |
Balance as of |
|||||
September 30, |
Strategic |
Non-Strategic |
December 31, |
||||
(Dollars in thousands) |
2010 |
Portfolio |
Portfolio |
2010 |
|||
Transaction and savings accounts |
$ 3,120,611 |
212,149 |
18,646 |
$ 3,351,406 |
|||
Time deposits |
1,742,059 |
(57,961) |
(21,757) |
1,662,341 |
|||
Brokered deposits |
188,593 |
(3,636) |
(52,455) |
132,502 |
|||
Total deposits |
$ 5,051,263 |
$ 150,552 |
$ (55,566) |
$ 5,146,249 |
|||
During the fourth quarter 2010, the Company announced its intent to exit the Michigan and Louisville, KY markets acquired as part of the Irwin transaction. As such, the deposits associated with these locations are now classified as acquired-non-strategic.
Strategic transaction and savings accounts increased $212.1 million during the fourth quarter 2010, driven by $130.9 million of seasonal growth in public funds accounts and an increase of $80.1 million in retail transactional and savings accounts. Average interest-bearing transaction balances and savings accounts increased 5.6% and 5.5%, respectively, during the fourth quarter 2010 as compared to the linked quarter. Similar to prior quarters', acquired-non-strategic time deposit and brokered deposit balances continued to decline. As of December 31, 2010, brokered deposits had declined to less than 3% of total deposits.
CAPITAL MANAGEMENT
The following table presents First Financial's preliminary regulatory and other capital ratios as of December 31, 2010, September 30, 2010 and December 31, 2009. Prior period amounts have been revised to reflect the purchase accounting adjustments discussed in Acquisitions in Section II below.
Table VIII |
||||||||
As of |
||||||||
December 31, |
September 30, |
December 31, |
"Well-Capitalized" |
|||||
2010 |
2010 |
2009 |
Minimum |
|||||
Leverage Ratio |
10.89% |
10.50% |
9.24% |
5.00% |
||||
Tier 1 Capital Ratio |
18.45% |
18.64% |
16.11% |
6.00% |
||||
Total Risk-Based Capital Ratio |
19.72% |
19.91% |
17.37% |
10.00% |
||||
Ending tangible shareholders' equity |
||||||||
to ending tangible assets |
10.33% |
10.38% |
8.95% |
N/A |
||||
Ending tangible common shareholders' |
||||||||
equity to ending tangible assets |
10.33% |
10.38% |
7.75% |
N/A |
||||
Capital levels remained relatively consistent during the fourth quarter 2010 as compared to the linked quarter. As of December 31, 2010, tangible book value per common share was $11.02 compared to $10.90 as of September 30, 2010 and $9.94 as of December 31, 2009.
SECTION II – SUPPLEMENTAL INFORMATION ON COVERED ASSETS AND ACQUISITION-RELATED ITEMS
To assist in analyzing the effect of the 2009 FDIC assisted transactions on the financial results, supplemental information that segregates the estimated impact on pre-tax earnings of certain acquisition-related items and provides additional detail on the covered loan portfolio follows.
SUMMARY OF SIGNIFICANT ACQUISITION-RELATED ITEMS
The following table illustrates the estimated effect of certain acquisition-related items on the results of operations for the three months ended December 31, September 30, June 30 and March 31, 2010 as well as for the twelve months ended December 31, 2010.
Table IX |
||||||||||
For the Twelve |
||||||||||
For the Three Months Ended |
Months Ended |
|||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
(Dollars in thousands) |
2010 |
2010 |
2010 |
2010 |
2010 |
|||||
Income effect: |
||||||||||
Accelerated discount on loan prepayments and dispositions (1), (2) |
$ 6,113 |
$ 9,448 |
$ 7,408 |
$ 6,098 |
$ 29,067 |
|||||
Acquired-non-strategic net interest income |
9,937 |
10,586 |
10,207 |
10,854 |
41,584 |
|||||
FDIC loss sharing income |
11,306 |
17,800 |
15,170 |
7,568 |
51,844 |
|||||
Service charges on deposit accounts related to |
||||||||||
acquired-non-strategic operations |
196 |
168 |
130 |
230 |
724 |
|||||
Other income related to acquired-non-strategic operations |
331 |
(124) |
346 |
(150) |
403 |
|||||
Income related to the accelerated discount on loan prepayments |
||||||||||
and dispositions and acquired-non-strategic operations |
27,883 |
37,878 |
33,261 |
24,600 |
123,622 |
|||||
Expense effect: |
||||||||||
Provision for loan and lease losses - covered |
13,997 |
20,725 |
18,962 |
9,460 |
63,144 |
|||||
Acquired-non-strategic operating expenses: (3) |
||||||||||
Salaries and employee benefits |
820 |
13 |
29 |
122 |
984 |
|||||
Occupancy |
161 |
91 |
542 |
1,415 |
2,209 |
|||||
Other |
3,071 |
462 |
699 |
664 |
4,896 |
|||||
Total acquired-non-strategic operating expenses |
4,052 |
566 |
1,270 |
2,201 |
8,089 |
|||||
FDIC indemnification support (3) |
1,160 |
875 |
938 |
605 |
3,578 |
|||||
Loss share expense |
616 |
- |
- |
- |
616 |
|||||
Acquisition-related costs: (3) |
||||||||||
Integration-related costs |
9 |
(102) |
720 |
999 |
1,626 |
|||||
Professional services fees |
396 |
1,174 |
1,436 |
1,457 |
4,463 |
|||||
Other |
7 |
433 |
24 |
172 |
636 |
|||||
Total acquisition-related costs |
412 |
1,505 |
2,180 |
2,628 |
6,725 |
|||||
Transition-related items: (3) |
||||||||||
Salaries and benefits |
176 |
796 |
1,843 |
4,776 |
7,591 |
|||||
Occupancy |
172 |
50 |
(522) |
910 |
610 |
|||||
Other |
336 |
- |
- |
577 |
913 |
|||||
Total transition-related items |
684 |
846 |
1,321 |
6,263 |
9,114 |
|||||
Total expense effect |
20,921 |
24,517 |
24,671 |
21,157 |
91,266 |
|||||
Total estimated effect on pre-tax earnings |
$ 6,962 |
$ 13,361 |
$ 8,590 |
$ 3,443 |
$ 32,356 |
|||||
1 Included in noninterest income |
||||||||||
2 Net of the corresponding valuation adjustment on the FDIC indemnification asset |
||||||||||
3 Included in noninterest expense |
||||||||||
ACCELERATED DISCOUNT ON LOAN PREPAYMENTS AND DISPOSITIONS
During the fourth quarter, First Financial recognized approximately $6.1 million in accelerated discount recognition from acquired loans. Accelerated discount is recognized when acquired loans, which are recorded on First Financials balance sheet at an amount less than the unpaid principal balance, prepay at an amount greater than the recorded book value. Prepayments can occur either through customer driven payments before the maturity date or loan sales. The amount of discount attributable to the credit loss content in each loan varies and the recognized amount is offset by a related reduction in the FDIC Indemnification Asset.
The Company did not conduct any material loan sales involving either acquired-non-strategic loans or loans originated by its franchise finance unit during the fourth quarter 2010. All accelerated discount revenue recognized during the fourth quarter pertained to covered loan prepayments.
For the full year 2010, First Financial sold $47.7 million of loans, consisting of $24.5 million of acquired-non-strategic western market covered loans and $23.2 million of loans related to the franchise finance unit. As a result of these loan sales, the Company recognized $2.3 million related to the accelerated discount during 2010. The remaining $26.8 million of accelerated discount resulted from loan prepayments.
When losses are incurred on covered loans that exceed expectations, the Company recognizes the gross credit losses in excess of the valuation mark as provision expense. Reimbursements due from the FDIC under loss share agreements related to these credit losses are recorded as noninterest income. The impact on earnings of this offsetting activity is shown above as the net effect of the gross up of credit losses and FDIC reimbursement, representing the Company's proportionate share of the credit losses realized on covered loans.
COVERED ASSETS & LOSS SHARE AGREEMENTS
As of December 31, 2010, 34.5% of the Company's total loans were covered loans. As required under the loss-share arrangements, First Financial must file monthly certifications with the FDIC on single-family residential loans and quarterly certifications on all other loans. To date, all certifications have been filed in a timely manner and without significant issues.
COVERED LOAN PORTFOLIO
The following table presents estimated activity in the covered loan portfolio by loan type during the fourth quarter 2010.
Table X |
||||||||||||||
Covered Loan Activity - Fourth Quarter 2010 |
||||||||||||||
Reduction in Balance Due to: |
||||||||||||||
September 30, |
Prepayments / |
Contractual |
Loans With |
December 31, |
||||||||||
(Dollars in thousands) |
2010 |
Loan Sales |
Renewals |
Activity (1) |
Charge-Offs (2) |
Coverage Removed |
2010 |
|||||||
Commercial |
$ 386,593 |
$ - |
$ 25,446 |
$ 25,618 |
$ 795 |
$ 695 |
$ 334,039 |
|||||||
Real estate - construction |
59,803 |
- |
255 |
16,150 |
655 |
- |
42,743 |
|||||||
Real estate - commercial |
897,388 |
- |
27,321 |
4,452 |
5,708 |
4,182 |
855,725 |
|||||||
Real estate - residential |
236,292 |
- |
13,341 |
492 |
1,712 |
- |
220,747 |
|||||||
Installment |
21,863 |
- |
1,197 |
(886) |
481 |
- |
21,071 |
|||||||
Other covered loans |
7,645 |
- |
- |
477 |
- |
- |
7,168 |
|||||||
Total covered loans |
$ 1,609,584 |
$ - |
$ 67,560 |
$ 46,303 |
$ 9,351 |
$ 4,877 |
$ 1,481,493 |
|||||||
(1) Includes partial paydowns, accretion of the valuation discount and advances on revolving loans |
||||||||||||||
(2) Indemnified at 80% from the FDIC |
||||||||||||||
During the fourth quarter 2010, the total balance of covered loans decreased $128.1 million, or 8.0%, as compared to the previous quarter. The decrease was driven primarily by prepayments and renewals of $67.6 million, or 4.2% of the quarterly decline, and contractual payments of $46.3 million, or 2.9% of the quarterly decline.
ALLOWANCE FOR LOAN LOSSES
Under the applicable accounting guidance, the allowance for loan losses related to covered loans as a result of impairment identified in on-going valuation procedures is generally recognized in the current period as provision expense. Improvement in the credit outlook is generally not recognized immediately but instead is reflected as an adjustment to the yield earned on the related loan pools on a prospective basis. 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 Company established an allowance for loan losses associated with covered loans during 2010 based on estimated valuation procedures performed during the period. During the fourth quarter 2010, the Company updated its estimated valuation related to these loans. As a result of net impairment identified in certain loan pools of $4.9 million and net charge-offs of $9.1 million, it recognized a provision expense related to covered loans of $14.0 million, resulting in an allowance for covered loan losses of $16.5 million as of December 31, 2010. The related receivable due from the FDIC under loss share agreements related to these loans of $11.3 million was recognized as FDIC loss share income and a corresponding increase to the FDIC indemnification asset.
For the twelve month period ended December 31, 2010, the Company recognized $63.1 million of provision expense related to covered loans and realized net charge-offs of $46.7 million. The related receivable due from the FDIC under loss share agreements for the full year 2010, recognized as FDIC loss share income, totaled $51.8 million.
DETAILS OF RESULTS
The results of the comparable periods in 2010 and 2009 were impacted by a number of acquisition-related items. During the third quarter 2009, through FDIC-assisted transactions, First Financial assumed the banking operations of Peoples Community Bank ("Peoples"), Irwin Union Bank and Trust Company and Irwin Union Bank, F.S.B. (collectively, "Irwin").
In connection with the FDIC-assisted transactions, the Company has loss sharing arrangements with the FDIC. Under the terms of these agreements, the FDIC will reimburse the Company for losses with respect to certain loans ("covered loans") and other real estate owned ("OREO") (collectively, "covered assets").
As a result of the acquisitions, the Company's business and operating markets expanded significantly. To assist readers in understanding the financial and strategic impact of the acquisitions, the combined operations of First Financial's legacy and acquired businesses will be discussed in three categories: "Legacy-Strategic", "Acquired-Strategic" and "Acquired-Non-Strategic". Additional disclosures have been added in a separate section of the earnings release that segregate the effect acquisition-related items have on certain reported income statement and balance sheet amounts, "Section II – Supplemental Information on Covered Assets and Acquisition-Related Items". Definitions of the business categories and other financial items related to the acquisitions can be found below in "Glossary of Terms".
In an effort to simplify and clarify the financial performance of First Financial, a number of significant items are noted separately throughout this release and will address the nature, timing and expected recurrence of each item. Available on the Company's website at www.bankatfirst.com is a presentation providing supplemental information regarding its quarterly results.
Glossary of Terms
To assist readers in understanding the Company's financial results and the effect of the acquisitions on reported amounts, the following terms are used throughout this release to refer to specific acquisition-related items. The first three define the business components referred to above and the remaining items define specific covered loan terminology.
Legacy-strategic – Elements of the business that existed prior to the acquisitions and will continue to be supported.
Acquired-strategic – Elements of the business that the Company intends to retain and will continue to support and build. Legacy-strategic and acquired-strategic are collectively referred to as "strategic."
Acquired-non-strategic – Elements of the business that the Company intends to exit but will continue to support to obtain maximum economic value. No growth or replacement is expected.
Accelerated discount on loan prepayments and dispositions – The acceleration of the unrealized valuation discount. This item will be ongoing but diminishing as covered loan balances decline over time.
UPB – Unpaid principal balance
Carrying value – The unpaid principal balance of a covered loan less any valuation discount.
Unless otherwise noted, all amounts discussed in this earnings release are pre-tax except net income and per-share data which are presented after-tax. Percentage changes are not annualized unless specifically noted. In some instances, financial data may not add up due to rounding.
ACQUISITIONS
Subsequent Events
The Irwin and Peoples acquisitions were considered business combinations and accounted for under FASB Codification Topic 805: Business Combinations, FASB Codification Topic 820: Fair Value Measurements, FASB Codification Topic 310-30: Loans and Debt Securities Acquired with Deteriorated Credit Quality and FASB Codification Topic 310-20: Receivables – Nonrefundable Fees and Costs. All acquired assets and liabilities, including identifiable intangible assets, were recorded at their estimated fair values as of the date of acquisition.
Purchase Accounting Adjustments
When additional information arises subsequent to the acquisition date and within one year, the Company is permitted to record adjustments to the initial purchase entries. The one year period for such adjustments related to the 2009 acquisitions expired at the end of the third quarter 2010. Such items recorded by the Company within the one year period represent the final valuation adjustments allowable under the applicable accounting guidance and impacted reported amounts for 2009 only.
The most significant purchase accounting adjustments pertained to items affecting the gain on acquisitions originally reported during the third quarter 2009. These items, all of which were associated with the Irwin transaction, were related to the valuation of the indemnification asset, valuation of loans acquired and fair value adjustments for other assets primarily related to the establishment of valuation allowances for certain assets of and investments in subsidiaries as well as other community reinvestment related assets. The total impact of these adjustments was a decrease in the originally reported pre-tax gain of $383.3 million to $342.5 million.
Teleconference / Webcast Information
First Financial's senior management will host a conference call to discuss the Company's financial and operating results on Thursday, January 27, 2011 at 9:00 a.m. Members of the public who would like to listen to the conference call should dial (877) 317-6789 (U.S. toll free), (866) 605-3852 (Canada toll free) or +1 (412) 317-6789 (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 February 11, 2011 at (877) 344-7529 (U.S. toll free) and +1 (412) 317-0088 (International); conference number 447697. The webcast will be archived on the Investor Relations section of the Company's website through January 26, 2012.
Press Release and Additional Information on Website
This press release as well as supplemental information related to this release is available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com/investor.
Forward-Looking Statement
Certain statements contained in this news release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the ''Act''). In addition, certain statements in future filings by First Financial with the SEC, in press releases, and in oral and written statements made by or with the approval of First Financial which are not statements of historical fact constitute forward-looking statements within the meaning of the 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. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
- management's ability to effectively execute its business plan;
- the risk that the strength of the United States economy in general and the strength of the local economies in which we conduct operations may continue to deteriorate resulting in, among other things, a further deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio, allowance for loan and lease losses and overall financial performance;
- the ability of financial institutions to access sources of liquidity at a reasonable cost;
- the impact of recent upheaval in the financial markets and the effectiveness of domestic and international governmental actions taken in response, such as the U.S. Treasury's TARP and the FDIC's Temporary Liquidity Guarantee Program, and the effect of such governmental actions on us, our competitors and counterparties, financial markets generally and availability of credit specifically, and the U.S. and international economies, including potentially higher FDIC premiums arising from increased payments from FDIC insurance funds as a result of depository institution failures;
- 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);
- inflation and possible changes in interest rates;
- our ability to keep up with technological changes;
- mergers and acquisitions, including costs or difficulties related to the integration of acquired companies and the wind-down of non-strategic operations that may be greater than expected;
- the risk that exploring merger and acquisition opportunities may detract from management's time and ability to successfully manage our company;
- expected cost savings in connection with the consolidation of recent acquisitions may not be fully realized or realized within the expected time frames, and deposit attrition, customer loss and revenue loss following completed acquisitions may be greater than expected;
- our ability to increase market share and control expenses;
- the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and the SEC;
- adverse changes in the securities and debt markets;
- our success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services;
- monetary and fiscal policies of the Board of Governors of the Federal Reserve System (Federal Reserve) and the U.S. government and other governmental initiatives affecting the financial services industry;
- our ability to manage loan delinquency and charge-off rates and changes in estimation of the adequacy of the allowance for loan losses; and
- the costs and effects of litigation and of unexpected or adverse outcomes in such litigation.
In addition, please refer to our Annual Report on Form 10-K for the year ended December 31, 2009, as well as our other filings with the SEC, for a more detailed discussion of these risks and uncertainties and other factors. Such forward-looking statements are meaningful only on the date when such statements are made, and First Financial 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.
About First Financial Bancorp
First Financial Bancorp is a Cincinnati, Ohio based bank holding company. As of December 31, 2010, the Company had $6.3 billion in assets, $4.3 billion in loans, $5.1 billion in deposits and $697 million in shareholders' equity. The Company's subsidiary, First Financial Bank, N.A., founded in 1863, provides banking and financial services products through its three lines of business: commercial, retail and wealth management. The commercial and retail units provide traditional banking services to business and consumer clients. First Financial Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.3 billion in assets under management as of December 31, 2010. The Company's strategic operating markets are located in Ohio, Indiana and Kentucky where it operates 108 banking centers across 70 communities. Additional information about the Company, including its products, services and banking locations is available at www.bankatfirst.com.
FIRST FINANCIAL BANCORP. |
|||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|||||||||||||||
(Dollars in thousands, except per share) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three months ended, |
Twelve months ended |
||||||||||||||
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Dec. 31, |
||||||||||
2010 |
2010 |
2010 |
2010 |
2009 |
2010 |
2009 |
|||||||||
RESULTS OF OPERATIONS |
|||||||||||||||
Net income |
$14,300 |
$15,579 |
$17,774 |
$11,598 |
$13,795 |
$59,251 |
$221,337 |
||||||||
Net income available to common shareholders |
$14,300 |
$15,579 |
$17,774 |
$9,733 |
$12,795 |
$57,386 |
$217,759 |
||||||||
Net earnings per common share - basic |
$0.25 |
$0.27 |
$0.31 |
$0.18 |
$0.25 |
$1.01 |
$4.84 |
||||||||
Net earnings per common share - diluted |
$0.24 |
$0.27 |
$0.30 |
$0.17 |
$0.25 |
$0.99 |
$4.78 |
||||||||
Dividends declared per common share |
$0.10 |
$0.10 |
$0.10 |
$0.10 |
$0.10 |
$0.40 |
$0.40 |
||||||||
KEY FINANCIAL RATIOS |
|||||||||||||||
Return on average assets |
0.90% |
0.96% |
1.08% |
0.71% |
0.80% |
0.91% |
4.67% |
||||||||
Return on average shareholders' equity |
8.14% |
9.03% |
10.62% |
6.92% |
8.36% |
8.68% |
47.44% |
||||||||
Return on average common shareholders' equity |
8.14% |
9.03% |
10.62% |
6.25% |
8.81% |
8.55% |
56.07% |
||||||||
Return on average tangible common shareholders' equity |
8.87% |
9.87% |
11.64% |
6.89% |
9.82% |
9.35% |
66.17% |
||||||||
Net interest margin |
4.65% |
4.59% |
4.53% |
4.89% |
4.65% |
4.66% |
4.05% |
||||||||
Net interest margin (fully tax equivalent) (1) |
4.67% |
4.60% |
4.54% |
4.91% |
4.67% |
4.68% |
4.08% |
||||||||
Ending equity as a percent of ending assets |
11.16% |
11.23% |
10.35% |
10.20% |
9.76% |
11.16% |
9.76% |
||||||||
Ending common equity as a percent of ending assets |
11.16% |
11.23% |
10.35% |
10.20% |
8.57% |
11.16% |
8.57% |
||||||||
Ending tangible common equity as a percent of: |
|||||||||||||||
Ending tangible assets |
10.33% |
10.38% |
9.55% |
9.38% |
7.75% |
10.33% |
7.75% |
||||||||
Risk-weighted assets |
17.36% |
17.61% |
17.17% |
16.39% |
13.10% |
17.36% |
13.10% |
||||||||
Average equity as a percent of average assets |
11.12% |
10.68% |
10.14% |
10.22% |
9.57% |
10.53% |
9.85% |
||||||||
Average common equity as a percent of average assets |
11.12% |
10.68% |
10.14% |
9.51% |
8.42% |
10.35% |
8.20% |
||||||||
Average tangible common equity as a percent of |
|||||||||||||||
average tangible assets |
10.29% |
9.86% |
9.33% |
8.70% |
7.62% |
9.55% |
7.04% |
||||||||
Book value per common share |
$12.01 |
$11.90 |
$11.74 |
$11.55 |
$11.10 |
$12.01 |
$11.10 |
||||||||
Tangible book value per common share |
$11.02 |
$10.90 |
$10.73 |
$10.53 |
$9.94 |
$11.02 |
$9.94 |
||||||||
Tier 1 Ratio (2) |
18.45% |
18.64% |
18.15% |
17.37% |
16.11% |
18.45% |
16.11% |
||||||||
Total Capital Ratio (2) |
19.72% |
19.91% |
19.42% |
18.64% |
17.37% |
19.72% |
17.37% |
||||||||
Leverage Ratio (2) |
10.89% |
10.50% |
9.99% |
9.76% |
9.24% |
10.89% |
9.24% |
||||||||
AVERAGE BALANCE SHEET ITEMS |
|||||||||||||||
Loans (3) |
$2,804,832 |
$2,805,764 |
$2,806,616 |
$2,849,562 |
$2,929,850 |
$2,816,541 |
$2,820,201 |
||||||||
Covered loans and FDIC indemnification asset |
1,783,737 |
1,886,750 |
2,041,820 |
2,168,407 |
2,254,989 |
1,968,896 |
703,562 |
||||||||
Investment securities |
798,135 |
691,700 |
597,991 |
558,595 |
608,952 |
662,344 |
667,843 |
||||||||
Interest-bearing deposits with other banks |
405,920 |
483,097 |
554,333 |
394,741 |
447,999 |
459,618 |
151,198 |
||||||||
Total earning assets |
$5,792,624 |
$5,867,311 |
$6,000,760 |
$5,971,305 |
$6,241,790 |
$5,907,399 |
$4,342,804 |
||||||||
Total assets |
$6,270,480 |
$6,408,479 |
$6,621,021 |
$6,647,541 |
$6,840,393 |
$6,485,632 |
$4,734,809 |
||||||||
Noninterest-bearing deposits |
$741,343 |
$721,501 |
$740,011 |
$774,393 |
$840,314 |
$744,159 |
$539,336 |
||||||||
Interest-bearing deposits |
4,438,113 |
4,448,929 |
4,570,971 |
4,544,471 |
4,710,167 |
4,500,188 |
3,171,496 |
||||||||
Total deposits |
$5,179,456 |
$5,170,430 |
$5,310,982 |
$5,318,864 |
$5,550,481 |
$5,244,347 |
$3,710,832 |
||||||||
Borrowings |
$213,107 |
$352,370 |
$447,945 |
$458,876 |
$471,916 |
$367,358 |
$489,109 |
||||||||
Shareholders' equity |
$697,016 |
$684,112 |
$671,051 |
$679,567 |
$654,631 |
$682,987 |
$466,610 |
||||||||
CREDIT QUALITY RATIOS (excluding covered assets) |
|||||||||||||||
Allowance to ending loans |
2.03% |
2.07% |
2.07% |
2.01% |
2.05% |
2.03% |
2.05% |
||||||||
Allowance to nonaccrual loans |
91.87% |
86.54% |
86.71% |
84.71% |
82.77% |
91.87% |
82.77% |
||||||||
Allowance to nonperforming loans |
81.03% |
71.99% |
72.79% |
76.08% |
76.25% |
81.03% |
76.25% |
||||||||
Nonperforming loans to total loans |
2.51% |
2.88% |
2.84% |
2.65% |
2.69% |
2.51% |
2.69% |
||||||||
Nonperforming assets to ending loans, plus OREO |
3.12% |
3.51% |
3.42% |
3.27% |
2.83% |
3.12% |
2.83% |
||||||||
Nonperforming assets to total assets |
1.42% |
1.59% |
1.46% |
1.41% |
1.23% |
1.42% |
1.23% |
||||||||
Net charge-offs to average loans (annualized) |
1.39% |
0.97% |
0.71% |
2.00% |
1.53% |
1.27% |
1.16% |
||||||||
(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) December 31, 2010 regulatory capital ratios are preliminary. |
|||||||||||||||
(3) Includes loans held for sale. |
|||||||||||||||
FIRST FINANCIAL BANCORP. |
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||
(Dollars in thousands, except per share) |
||||||||||||
(Unaudited) |
||||||||||||
Three months ended, |
Twelve months ended, |
|||||||||||
Dec. 31, |
Dec. 31, |
|||||||||||
2010 |
2009 |
% Change |
2010 |
2009 |
% Change |
|||||||
Interest income |
||||||||||||
Loans, including fees |
$75,836 |
$81,471 |
(6.9%) |
$306,075 |
$195,917 |
56.2% |
||||||
Investment securities |
||||||||||||
Taxable |
5,522 |
6,422 |
(14.0%) |
21,748 |
29,376 |
(26.0%) |
||||||
Tax-exempt |
214 |
320 |
(33.1%) |
934 |
1,492 |
(37.4%) |
||||||
Total investment securities interest |
5,736 |
6,742 |
(14.9%) |
22,682 |
30,868 |
(26.5%) |
||||||
Other earning assets |
749 |
5,132 |
(85.4%) |
14,745 |
6,443 |
128.9% |
||||||
Total interest income |
82,321 |
93,345 |
(11.8%) |
343,502 |
233,228 |
47.3% |
||||||
Interest expense |
||||||||||||
Deposits |
12,923 |
17,207 |
(24.9%) |
58,336 |
47,580 |
22.6% |
||||||
Short-term borrowings |
33 |
23 |
43.5% |
94 |
1,318 |
(92.9%) |
||||||
Long-term borrowings |
1,194 |
2,611 |
(54.3%) |
8,341 |
7,145 |
16.7% |
||||||
Subordinated debentures and capital securities |
265 |
322 |
(17.7%) |
1,221 |
1,202 |
1.6% |
||||||
Total interest expense |
14,415 |
20,163 |
(28.5%) |
67,992 |
57,245 |
18.8% |
||||||
Net interest income |
67,906 |
73,182 |
(7.2%) |
275,510 |
175,983 |
56.6% |
||||||
Provision for loan and lease losses - uncovered |
9,741 |
14,812 |
(34.2%) |
33,564 |
56,084 |
(40.2%) |
||||||
Provision for loan and lease losses - covered |
13,997 |
0 |
N/M |
63,144 |
0 |
N/M |
||||||
Net interest income after provision for loan and lease losses |
44,168 |
58,370 |
(24.3%) |
178,802 |
119,899 |
49.1% |
||||||
Noninterest income |
||||||||||||
Service charges on deposit accounts |
5,090 |
5,886 |
(13.5%) |
22,188 |
19,662 |
12.8% |
||||||
Trust and wealth management fees |
3,283 |
3,584 |
(8.4%) |
13,862 |
13,465 |
2.9% |
||||||
Bankcard income |
2,255 |
1,869 |
20.7% |
8,518 |
5,961 |
42.9% |
||||||
Net gains from sales of loans |
1,241 |
341 |
263.9% |
4,632 |
1,196 |
287.3% |
||||||
Gains on sales of investment securities |
0 |
0 |
N/M |
0 |
3,349 |
(100.0%) |
||||||
Gain on acquisition |
0 |
0 |
N/M |
0 |
342,494 |
(100.0%) |
||||||
FDIC loss sharing income |
11,306 |
0 |
N/M |
51,844 |
0 |
N/M |
||||||
Accelerated discount on covered loans |
6,113 |
8,215 |
(25.6%) |
29,067 |
8,601 |
237.9% |
||||||
(Loss) Income on preferred securities |
0 |
(138) |
(100.0%) |
(30) |
139 |
(121.6%) |
||||||
Other |
5,246 |
4,392 |
19.4% |
16,750 |
9,848 |
70.1% |
||||||
Total noninterest income |
34,534 |
24,149 |
43.0% |
146,831 |
404,715 |
(63.7%) |
||||||
Noninterest expenses |
||||||||||||
Salaries and employee benefits |
28,819 |
30,141 |
(4.4%) |
117,363 |
86,068 |
36.4% |
||||||
Net occupancy |
4,430 |
7,290 |
(39.2%) |
22,555 |
16,202 |
39.2% |
||||||
Furniture and equipment |
3,022 |
2,527 |
19.6% |
10,299 |
8,054 |
27.9% |
||||||
Data processing |
1,593 |
890 |
79.0% |
5,152 |
3,475 |
48.3% |
||||||
Marketing |
1,453 |
1,283 |
13.3% |
5,357 |
3,494 |
53.3% |
||||||
Communication |
892 |
1,169 |
(23.7%) |
3,908 |
3,246 |
20.4% |
||||||
Professional services |
2,863 |
2,605 |
9.9% |
9,169 |
6,032 |
52.0% |
||||||
Debt extinguishment |
0 |
0 |
N/M |
8,029 |
0 |
N/M |
||||||
State intangible tax |
1,362 |
564 |
141.5% |
4,843 |
2,508 |
93.1% |
||||||
FDIC assessments |
2,272 |
1,529 |
48.6% |
8,312 |
6,847 |
21.4% |
||||||
Other |
9,584 |
13,609 |
(29.6%) |
38,693 |
34,712 |
11.5% |
||||||
Total noninterest expenses |
56,290 |
61,607 |
(8.6%) |
233,680 |
170,638 |
36.9% |
||||||
Income before income taxes |
22,412 |
20,912 |
7.2% |
91,953 |
353,976 |
(74.0%) |
||||||
Income tax expense |
8,112 |
7,117 |
14.0% |
32,702 |
132,639 |
(75.3%) |
||||||
Net income |
14,300 |
13,795 |
3.7% |
59,251 |
221,337 |
(73.2%) |
||||||
Dividends on preferred stock |
0 |
1,000 |
(100.0%) |
1,865 |
3,578 |
(47.9%) |
||||||
Income available to common shareholders |
$14,300 |
$12,795 |
11.8% |
$57,386 |
$217,759 |
(73.6%) |
||||||
ADDITIONAL DATA |
||||||||||||
Net earnings per common share - basic |
$0.25 |
$0.25 |
$1.01 |
$4.84 |
||||||||
Net earnings per common share - diluted |
$0.24 |
$0.25 |
$0.99 |
$4.78 |
||||||||
Dividends declared per common share |
$0.10 |
$0.10 |
$0.40 |
$0.40 |
||||||||
Return on average assets |
0.90% |
0.80% |
0.91% |
4.67% |
||||||||
Return on average shareholders' equity |
8.14% |
8.36% |
8.68% |
47.44% |
||||||||
Interest income |
$82,321 |
$93,345 |
(11.8%) |
$343,502 |
$233,228 |
47.3% |
||||||
Tax equivalent adjustment |
220 |
295 |
(25.4%) |
866 |
1,265 |
(31.5%) |
||||||
Interest income - tax equivalent |
82,541 |
93,640 |
(11.9%) |
344,368 |
234,493 |
46.9% |
||||||
Interest expense |
14,415 |
20,163 |
(28.5%) |
67,992 |
57,245 |
18.8% |
||||||
Net interest income - tax equivalent |
$68,126 |
$73,477 |
(7.3%) |
$276,376 |
$177,248 |
55.9% |
||||||
Net interest margin |
4.65% |
4.65% |
4.66% |
4.05% |
||||||||
Net interest margin (fully tax equivalent) (1) |
4.67% |
4.67% |
4.68% |
4.08% |
||||||||
Full-time equivalent employees (2) |
1,529 |
1,390 |
||||||||||
(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. |
||||||||||||
(2) Does not include associates from acquisitions that are currently in a temporary hire status. |
||||||||||||
N/M = Not meaningful. |
||||||||||||
FIRST FINANCIAL BANCORP. |
||||||||||||
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME |
||||||||||||
(Dollars in thousands, except per share) |
||||||||||||
(Unaudited) |
||||||||||||
2010 |
||||||||||||
Fourth |
Third |
Second |
First |
% Change |
||||||||
Quarter |
Quarter |
Quarter |
Quarter |
YTD |
Linked Qtr. |
|||||||
Interest income |
||||||||||||
Loans, including fees |
$75,836 |
$75,957 |
$74,944 |
$79,338 |
$306,075 |
(0.2%) |
||||||
Investment securities |
||||||||||||
Taxable |
5,522 |
5,386 |
5,444 |
5,396 |
21,748 |
2.5% |
||||||
Tax-exempt |
214 |
240 |
245 |
235 |
934 |
(10.8%) |
||||||
Total investment securities interest |
5,736 |
5,626 |
5,689 |
5,631 |
22,682 |
2.0% |
||||||
Other earning assets |
749 |
3,101 |
5,305 |
5,590 |
14,745 |
(75.8%) |
||||||
Total interest income |
82,321 |
84,684 |
85,938 |
90,559 |
343,502 |
(2.8%) |
||||||
Interest expense |
||||||||||||
Deposits |
12,923 |
14,457 |
15,308 |
15,648 |
58,336 |
(10.6%) |
||||||
Short-term borrowings |
33 |
25 |
17 |
19 |
94 |
32.0% |
||||||
Long-term borrowings |
1,194 |
2,034 |
2,556 |
2,557 |
8,341 |
(41.3%) |
||||||
Subordinated debentures and capital securities |
265 |
322 |
319 |
315 |
1,221 |
(17.7%) |
||||||
Total interest expense |
14,415 |
16,838 |
18,200 |
18,539 |
67,992 |
(14.4%) |
||||||
Net interest income |
67,906 |
67,846 |
67,738 |
72,020 |
275,510 |
0.1% |
||||||
Provision for loan and lease losses - uncovered |
9,741 |
6,287 |
6,158 |
11,378 |
33,564 |
54.9% |
||||||
Provision for loan and lease losses - covered |
13,997 |
20,725 |
18,962 |
9,460 |
63,144 |
(32.5%) |
||||||
Net interest income after provision for loan and lease losses |
44,168 |
40,834 |
42,618 |
51,182 |
178,802 |
8.2% |
||||||
Noninterest income |
||||||||||||
Service charges on deposit accounts |
5,090 |
5,632 |
5,855 |
5,611 |
22,188 |
(9.6%) |
||||||
Trust and wealth management fees |
3,283 |
3,366 |
3,668 |
3,545 |
13,862 |
(2.5%) |
||||||
Bankcard income |
2,255 |
2,193 |
2,102 |
1,968 |
8,518 |
2.8% |
||||||
Net gains from sales of loans |
1,241 |
2,749 |
473 |
169 |
4,632 |
(54.9%) |
||||||
FDIC loss sharing income |
11,306 |
17,800 |
15,170 |
7,568 |
51,844 |
(36.5%) |
||||||
Accelerated discount on covered loans |
6,113 |
9,448 |
7,408 |
6,098 |
29,067 |
(35.3%) |
||||||
(Loss) income on preferred securities |
0 |
0 |
0 |
(30) |
(30) |
N/M |
||||||
Other |
5,246 |
3,707 |
5,791 |
2,006 |
16,750 |
41.5% |
||||||
Total noninterest income |
34,534 |
44,895 |
40,467 |
26,935 |
146,831 |
(23.1%) |
||||||
Noninterest expenses |
||||||||||||
Salaries and employee benefits |
28,819 |
28,790 |
29,513 |
30,241 |
117,363 |
0.1% |
||||||
Net occupancy |
4,430 |
4,663 |
5,340 |
8,122 |
22,555 |
(5.0%) |
||||||
Furniture and equipment |
3,022 |
2,490 |
2,514 |
2,273 |
10,299 |
21.4% |
||||||
Data processing |
1,593 |
1,191 |
1,136 |
1,232 |
5,152 |
33.8% |
||||||
Marketing |
1,453 |
1,230 |
1,600 |
1,074 |
5,357 |
18.1% |
||||||
Communication |
892 |
986 |
822 |
1,208 |
3,908 |
(9.5%) |
||||||
Professional services |
2,863 |
2,117 |
2,446 |
1,743 |
9,169 |
35.2% |
||||||
Debt extinguishment |
0 |
8,029 |
0 |
0 |
8,029 |
(100.0%) |
||||||
State intangible tax |
1,362 |
724 |
1,426 |
1,331 |
4,843 |
88.1% |
||||||
FDIC assessments |
2,272 |
2,123 |
1,907 |
2,010 |
8,312 |
7.0% |
||||||
Other |
9,584 |
8,967 |
9,115 |
11,027 |
38,693 |
6.9% |
||||||
Total noninterest expenses |
56,290 |
61,310 |
55,819 |
60,261 |
233,680 |
(8.2%) |
||||||
Income before income taxes |
22,412 |
24,419 |
27,266 |
17,856 |
91,953 |
(8.2%) |
||||||
Income tax expense |
8,112 |
8,840 |
9,492 |
6,258 |
32,702 |
(8.2%) |
||||||
Net income |
14,300 |
15,579 |
17,774 |
11,598 |
59,251 |
(8.2%) |
||||||
Dividends on preferred stock |
0 |
0 |
0 |
1,865 |
1,865 |
N/M |
||||||
Income available to common shareholders |
$14,300 |
$15,579 |
$17,774 |
$9,733 |
$57,386 |
(8.2%) |
||||||
ADDITIONAL DATA |
||||||||||||
Net earnings per common share - basic |
$0.25 |
$0.27 |
$0.31 |
$0.18 |
$1.01 |
|||||||
Net earnings per common share - diluted |
$0.24 |
$0.27 |
$0.30 |
$0.17 |
$0.99 |
|||||||
Dividends declared per common share |
$0.10 |
$0.10 |
$0.10 |
$0.10 |
$0.40 |
|||||||
Return on average assets |
0.90% |
0.96% |
1.08% |
0.71% |
0.91% |
|||||||
Return on average shareholders' equity |
8.14% |
9.03% |
10.62% |
6.92% |
8.68% |
|||||||
Interest income |
$82,321 |
$84,684 |
$85,938 |
$90,559 |
$343,502 |
(2.8%) |
||||||
Tax equivalent adjustment |
220 |
222 |
212 |
212 |
866 |
(0.9%) |
||||||
Interest income - tax equivalent |
82,541 |
84,906 |
86,150 |
90,771 |
344,368 |
(2.8%) |
||||||
Interest expense |
14,415 |
16,838 |
18,200 |
18,539 |
67,992 |
(14.4%) |
||||||
Net interest income - tax equivalent |
$68,126 |
$68,068 |
$67,950 |
$72,232 |
$276,376 |
0.1% |
||||||
Net interest margin |
4.65% |
4.59% |
4.53% |
4.89% |
4.66% |
|||||||
Net interest margin (fully tax equivalent) (1) |
4.67% |
4.60% |
4.54% |
4.91% |
4.68% |
|||||||
Full-time equivalent employees (2) |
1,529 |
1,535 |
1,511 |
1,466 |
||||||||
(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. |
||||||||||||
(2) Does not include associates from acquisitions that are currently in a temporary hire status. |
||||||||||||
N/M = Not meaningful. |
||||||||||||
FIRST FINANCIAL BANCORP. |
||||||||||
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME |
||||||||||
(Dollars in thousands, except per share) |
||||||||||
(Unaudited) |
||||||||||
2009 |
||||||||||
Fourth |
Third |
Second |
First |
Full |
||||||
Quarter |
Quarter |
Quarter |
Quarter |
Year |
||||||
Interest income |
||||||||||
Loans, including fees |
$81,471 |
$46,811 |
$33,978 |
$33,657 |
$195,917 |
|||||
Investment securities |
||||||||||
Taxable |
6,422 |
6,241 |
8,023 |
8,690 |
29,376 |
|||||
Tax-exempt |
320 |
352 |
386 |
434 |
1,492 |
|||||
Total investment securities interest |
6,742 |
6,593 |
8,409 |
9,124 |
30,868 |
|||||
Other earning assets |
5,132 |
1,311 |
0 |
0 |
6,443 |
|||||
Total interest income |
93,345 |
54,715 |
42,387 |
42,781 |
233,228 |
|||||
Interest expense |
||||||||||
Deposits |
17,207 |
11,490 |
9,080 |
9,803 |
47,580 |
|||||
Short-term borrowings |
23 |
261 |
527 |
507 |
1,318 |
|||||
Long-term borrowings |
2,611 |
1,977 |
1,251 |
1,306 |
7,145 |
|||||
Subordinated debentures and capital securities |
322 |
323 |
320 |
237 |
1,202 |
|||||
Total interest expense |
20,163 |
14,051 |
11,178 |
11,853 |
57,245 |
|||||
Net interest income |
73,182 |
40,664 |
31,209 |
30,928 |
175,983 |
|||||
Provision for loan and lease losses - uncovered |
14,812 |
26,655 |
10,358 |
4,259 |
56,084 |
|||||
Net interest income after provision for loan and lease losses |
58,370 |
14,009 |
20,851 |
26,669 |
119,899 |
|||||
Noninterest income |
||||||||||
Service charges on deposit accounts |
5,886 |
5,408 |
4,289 |
4,079 |
19,662 |
|||||
Trust and wealth management fees |
3,584 |
3,339 |
3,253 |
3,289 |
13,465 |
|||||
Bankcard income |
1,869 |
1,379 |
1,422 |
1,291 |
5,961 |
|||||
Net gains from sales of loans |
341 |
63 |
408 |
384 |
1,196 |
|||||
Gains on sales of investment securities |
0 |
0 |
3,349 |
0 |
3,349 |
|||||
Gain on acquisition |
0 |
342,494 |
0 |
0 |
342,494 |
|||||
Accelerated discount on covered loans |
8,215 |
386 |
0 |
0 |
8,601 |
|||||
(Loss) income on preferred securities |
(138) |
154 |
112 |
11 |
139 |
|||||
Other |
4,392 |
1,213 |
1,264 |
2,979 |
9,848 |
|||||
Total noninterest income |
24,149 |
354,436 |
14,097 |
12,033 |
404,715 |
|||||
Noninterest expenses |
||||||||||
Salaries and employee benefits |
30,141 |
22,051 |
16,223 |
17,653 |
86,068 |
|||||
Net occupancy |
7,290 |
3,442 |
2,653 |
2,817 |
16,202 |
|||||
Furniture and equipment |
2,527 |
1,874 |
1,851 |
1,802 |
8,054 |
|||||
Data processing |
890 |
973 |
794 |
818 |
3,475 |
|||||
Marketing |
1,283 |
871 |
700 |
640 |
3,494 |
|||||
Communication |
1,169 |
737 |
669 |
671 |
3,246 |
|||||
Professional services |
2,605 |
1,220 |
1,254 |
953 |
6,032 |
|||||
State intangible tax |
564 |
628 |
648 |
668 |
2,508 |
|||||
FDIC assessments |
1,529 |
1,612 |
3,424 |
282 |
6,847 |
|||||
Other |
13,609 |
12,893 |
4,580 |
3,630 |
34,712 |
|||||
Total noninterest expenses |
61,607 |
46,301 |
32,796 |
29,934 |
170,638 |
|||||
Income before income taxes |
20,912 |
322,144 |
2,152 |
8,768 |
353,976 |
|||||
Income tax expense |
7,117 |
121,787 |
702 |
3,033 |
132,639 |
|||||
Net income |
13,795 |
200,357 |
1,450 |
5,735 |
221,337 |
|||||
Dividends on preferred stock |
1,000 |
1,000 |
1,000 |
578 |
3,578 |
|||||
Net income available to common shareholders |
$12,795 |
$199,357 |
$450 |
$5,157 |
$217,759 |
|||||
ADDITIONAL DATA |
||||||||||
Net earnings per common share - basic |
$0.25 |
$3.91 |
$0.01 |
$0.14 |
$4.84 |
|||||
Net earnings per common share - diluted |
$0.25 |
$3.87 |
$0.01 |
$0.14 |
$4.78 |
|||||
Dividends declared per common share |
$0.10 |
$0.10 |
$0.10 |
$0.10 |
$0.40 |
|||||
Return on average assets |
0.80% |
17.64% |
0.15% |
0.62% |
4.67% |
|||||
Return on average shareholders' equity |
8.36% |
166.45% |
1.53% |
6.63% |
47.44% |
|||||
Interest income |
$93,345 |
$54,715 |
$42,387 |
$42,781 |
$233,228 |
|||||
Tax equivalent adjustment |
295 |
300 |
307 |
363 |
1,265 |
|||||
Interest income - tax equivalent |
93,640 |
55,015 |
42,694 |
43,144 |
234,493 |
|||||
Interest expense |
20,163 |
14,051 |
11,178 |
11,853 |
57,245 |
|||||
Net interest income - tax equivalent |
$73,477 |
$40,964 |
$31,516 |
$31,291 |
$177,248 |
|||||
Net interest margin |
4.65% |
3.90% |
3.59% |
3.61% |
4.05% |
|||||
Net interest margin (fully tax equivalent) (1) |
4.67% |
3.93% |
3.63% |
3.65% |
4.08% |
|||||
Full-time equivalent employees (2) |
1,390 |
1,150 |
1,048 |
1,063 |
||||||
(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. |
||||||||||
(2) Does not include associates from acquisitions that are currently in a temporary hire status. |
||||||||||
N/M = Not meaningful. |
||||||||||
FIRST FINANCIAL BANCORP. |
||||||||||||||
CONSOLIDATED STATEMENTS OF CONDITION |
||||||||||||||
(Dollars in thousands) |
||||||||||||||
(Unaudited) |
||||||||||||||
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
% Change |
% Change |
||||||||
2010 |
2010 |
2010 |
2010 |
2009 |
Linked Qtr. |
Comparable Qtr. |
||||||||
ASSETS |
||||||||||||||
Cash and due from banks |
$105,981 |
$144,101 |
$166,604 |
$308,330 |
$344,150 |
(26.5%) |
(69.2%) |
|||||||
Interest-bearing deposits with other banks |
176,952 |
280,457 |
675,891 |
416,619 |
262,017 |
(36.9%) |
(32.5%) |
|||||||
Investment securities trading |
0 |
0 |
0 |
0 |
200 |
N/M |
(100.0%) |
|||||||
Investment securities available-for-sale |
919,110 |
616,175 |
503,404 |
430,519 |
471,002 |
49.2% |
95.1% |
|||||||
Investment securities held-to-maturity |
17,406 |
17,842 |
17,601 |
17,903 |
18,115 |
(2.4%) |
(3.9%) |
|||||||
Other investments |
78,689 |
86,509 |
86,509 |
87,029 |
89,830 |
(9.0%) |
(12.4%) |
|||||||
Loans held for sale |
29,292 |
19,075 |
11,946 |
3,243 |
6,413 |
53.6% |
356.8% |
|||||||
Loans |
||||||||||||||
Commercial |
800,253 |
763,449 |
749,522 |
763,084 |
800,261 |
4.8% |
(0.0%) |
|||||||
Real estate - construction |
163,543 |
178,914 |
197,112 |
216,289 |
253,223 |
(8.6%) |
(35.4%) |
|||||||
Real estate - commercial |
1,139,931 |
1,095,543 |
1,113,836 |
1,091,830 |
1,079,628 |
4.1% |
5.6% |
|||||||
Real estate - residential |
269,173 |
283,914 |
296,295 |
306,769 |
321,047 |
(5.2%) |
(16.2%) |
|||||||
Installment |
69,711 |
73,138 |
75,862 |
78,682 |
82,989 |
(4.7%) |
(16.0%) |
|||||||
Home equity |
341,310 |
341,288 |
332,928 |
330,973 |
328,940 |
0.0% |
3.8% |
|||||||
Credit card |
29,563 |
28,825 |
28,567 |
27,960 |
29,027 |
2.6% |
1.8% |
|||||||
Lease financing |
2,609 |
138 |
15 |
15 |
14 |
1790.6% |
18535.7% |
|||||||
Total loans, excluding covered loans |
2,816,093 |
2,765,209 |
2,794,137 |
2,815,602 |
2,895,129 |
1.8% |
(2.7%) |
|||||||
Less |
||||||||||||||
Allowance for loan and lease losses |
57,235 |
57,249 |
57,811 |
56,642 |
59,311 |
(0.0%) |
(3.5%) |
|||||||
Net loans - uncovered |
2,758,858 |
2,707,960 |
2,736,326 |
2,758,960 |
2,835,818 |
1.9% |
(2.7%) |
|||||||
Covered loans |
1,481,493 |
1,609,584 |
1,717,632 |
1,833,349 |
1,934,740 |
(8.0%) |
(23.4%) |
|||||||
Less |
||||||||||||||
Allowance for loan and lease losses |
16,493 |
11,583 |
1,273 |
0 |
0 |
42.4% |
N/M |
|||||||
Net loans - covered |
1,465,000 |
1,598,001 |
1,716,359 |
1,833,349 |
1,934,740 |
(8.3%) |
(24.3%) |
|||||||
Net loans |
4,223,858 |
4,305,961 |
4,452,685 |
4,592,309 |
4,770,558 |
(1.9%) |
(11.5%) |
|||||||
Premises and equipment |
118,477 |
116,959 |
114,630 |
115,836 |
107,351 |
1.3% |
10.4% |
|||||||
Goodwill |
51,820 |
51,820 |
51,820 |
51,820 |
51,820 |
0.0% |
0.0% |
|||||||
Other intangibles |
5,604 |
6,049 |
6,614 |
7,058 |
7,461 |
(7.4%) |
(24.9%) |
|||||||
FDIC indemnification asset |
222,648 |
237,709 |
251,633 |
273,328 |
287,407 |
(6.3%) |
(22.5%) |
|||||||
Accrued interest and other assets |
300,388 |
271,843 |
244,298 |
244,902 |
241,269 |
10.5% |
24.5% |
|||||||
Total Assets |
$6,250,225 |
$6,154,500 |
$6,583,635 |
$6,548,896 |
$6,657,593 |
1.6% |
(6.1%) |
|||||||
LIABILITIES |
||||||||||||||
Deposits |
||||||||||||||
Interest-bearing |
$1,111,877 |
$999,922 |
$1,135,970 |
$1,042,790 |
$1,060,383 |
11.2% |
4.9% |
|||||||
Savings |
1,534,045 |
1,407,332 |
1,350,161 |
1,303,737 |
1,231,081 |
9.0% |
24.6% |
|||||||
Time |
1,794,843 |
1,930,652 |
2,042,824 |
2,135,683 |
2,229,500 |
(7.0%) |
(19.5%) |
|||||||
Total interest-bearing deposits |
4,440,765 |
4,337,906 |
4,528,955 |
4,482,210 |
4,520,964 |
2.4% |
(1.8%) |
|||||||
Noninterest-bearing |
705,484 |
713,357 |
718,381 |
741,476 |
829,676 |
(1.1%) |
(15.0%) |
|||||||
Total deposits |
5,146,249 |
5,051,263 |
5,247,336 |
5,223,686 |
5,350,640 |
1.9% |
(3.8%) |
|||||||
Federal funds purchased and securities sold |
||||||||||||||
under agreements to repurchase |
59,842 |
58,747 |
38,299 |
38,443 |
37,430 |
1.9% |
59.9% |
|||||||
Long-term debt |
128,880 |
129,224 |
384,775 |
394,404 |
404,716 |
(0.3%) |
(68.2%) |
|||||||
Other long-term debt |
20,620 |
20,620 |
20,620 |
20,620 |
20,620 |
0.0% |
0.0% |
|||||||
Accrued interest and other liabilities |
197,240 |
203,715 |
211,049 |
203,984 |
194,229 |
(3.2%) |
1.6% |
|||||||
Total Liabilities |
5,552,831 |
5,463,569 |
5,902,079 |
5,881,137 |
6,007,635 |
1.6% |
(7.6%) |
|||||||
SHAREHOLDERS' EQUITY |
||||||||||||||
Preferred stock |
0 |
0 |
0 |
0 |
79,195 |
N/M |
(100.0%) |
|||||||
Common stock |
580,097 |
579,309 |
578,362 |
581,747 |
490,532 |
0.1% |
18.3% |
|||||||
Retained earnings |
310,271 |
301,777 |
292,004 |
280,030 |
276,119 |
2.8% |
12.4% |
|||||||
Accumulated other comprehensive loss |
(12,044) |
(9,106) |
(7,831) |
(9,091) |
(10,487) |
32.3% |
14.8% |
|||||||
Treasury stock, at cost |
(180,930) |
(181,049) |
(180,979) |
(184,927) |
(185,401) |
(0.1%) |
(2.4%) |
|||||||
Total Shareholders' Equity |
697,394 |
690,931 |
681,556 |
667,759 |
649,958 |
0.9% |
7.3% |
|||||||
Total Liabilities and Shareholders' Equity |
$6,250,225 |
$6,154,500 |
$6,583,635 |
$6,548,896 |
$6,657,593 |
1.6% |
(6.1%) |
|||||||
N/M = Not meaningful. |
||||||||||||||
FIRST FINANCIAL BANCORP. |
||||||||||||||
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION |
||||||||||||||
(Dollars in thousands) |
||||||||||||||
(Unaudited) |
||||||||||||||
Quarterly Averages |
Year-to-Date Averages |
|||||||||||||
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Dec. 31, |
|||||||||
2010 |
2010 |
2010 |
2010 |
2009 |
2010 |
2009 |
||||||||
ASSETS |
||||||||||||||
Cash and due from banks |
$122,167 |
$185,322 |
$273,162 |
$336,333 |
$274,601 |
$228,539 |
$133,611 |
|||||||
Interest-bearing deposits with other banks |
405,920 |
483,097 |
554,333 |
394,741 |
447,999 |
459,618 |
151,198 |
|||||||
Investment securities |
798,135 |
691,700 |
597,991 |
558,595 |
608,952 |
662,344 |
667,843 |
|||||||
Loans held for sale |
21,141 |
14,909 |
7,615 |
2,292 |
2,936 |
11,550 |
4,138 |
|||||||
Loans |
||||||||||||||
Commercial |
739,082 |
735,228 |
746,636 |
785,579 |
839,456 |
751,459 |
841,088 |
|||||||
Real estate - construction |
172,585 |
187,401 |
202,513 |
231,853 |
256,915 |
198,395 |
254,746 |
|||||||
Real estate - commercial |
1,155,896 |
1,135,547 |
1,110,562 |
1,079,577 |
1,048,650 |
1,120,646 |
945,456 |
|||||||
Real estate - residential |
276,166 |
295,917 |
301,880 |
309,104 |
333,858 |
295,677 |
347,238 |
|||||||
Installment |
71,623 |
71,739 |
77,299 |
79,437 |
87,825 |
74,994 |
89,991 |
|||||||
Home equity |
339,192 |
336,288 |
332,044 |
333,275 |
332,169 |
335,219 |
310,375 |
|||||||
Credit card |
28,962 |
28,664 |
28,052 |
28,430 |
28,025 |
28,529 |
27,138 |
|||||||
Lease financing |
185 |
71 |
15 |
15 |
16 |
72 |
31 |
|||||||
Total loans, excluding covered loans |
2,783,691 |
2,790,855 |
2,799,001 |
2,847,270 |
2,926,914 |
2,804,991 |
2,816,063 |
|||||||
Less |
||||||||||||||
Allowance for loan and lease losses |
60,433 |
60,871 |
60,430 |
59,891 |
54,164 |
60,409 |
42,553 |
|||||||
Net loans - uncovered |
2,723,258 |
2,729,984 |
2,738,571 |
2,787,379 |
2,872,750 |
2,744,582 |
2,773,510 |
|||||||
Covered loans |
1,551,003 |
1,648,030 |
1,781,741 |
1,887,608 |
1,973,327 |
1,715,984 |
614,589 |
|||||||
Less |
||||||||||||||
Allowance for loan and lease losses |
16,104 |
882 |
14 |
0 |
0 |
4,285 |
0 |
|||||||
Net loans - covered |
1,534,899 |
1,647,148 |
1,781,727 |
1,887,608 |
1,973,327 |
1,711,699 |
614,589 |
|||||||
Net loans |
4,258,157 |
4,377,132 |
4,520,298 |
4,674,987 |
4,846,077 |
4,456,281 |
3,388,099 |
|||||||
Premises and equipment |
117,659 |
115,518 |
115,587 |
108,608 |
106,999 |
114,371 |
92,212 |
|||||||
Goodwill |
51,820 |
51,820 |
51,820 |
51,820 |
51,820 |
51,820 |
37,712 |
|||||||
Other intangibles |
5,841 |
6,384 |
6,848 |
7,431 |
7,885 |
6,621 |
2,995 |
|||||||
FDIC indemnification asset |
232,734 |
238,720 |
260,079 |
280,799 |
281,662 |
252,912 |
88,973 |
|||||||
Accrued interest and other assets |
256,906 |
243,877 |
233,288 |
231,935 |
211,462 |
241,576 |
168,028 |
|||||||
Total Assets |
$6,270,480 |
$6,408,479 |
$6,621,021 |
$6,647,541 |
$6,840,393 |
$6,485,632 |
$4,734,809 |
|||||||
LIABILITIES |
||||||||||||||
Deposits |
||||||||||||||
Interest-bearing |
$1,086,685 |
$1,029,350 |
$1,139,001 |
$1,050,697 |
$1,093,735 |
$1,076,403 |
$862,730 |
|||||||
Savings |
1,490,132 |
1,412,441 |
1,341,194 |
1,318,374 |
1,233,715 |
1,391,066 |
771,202 |
|||||||
Time |
1,861,296 |
2,007,138 |
2,090,776 |
2,175,400 |
2,382,717 |
2,032,719 |
1,537,564 |
|||||||
Total interest-bearing deposits |
4,438,113 |
4,448,929 |
4,570,971 |
4,544,471 |
4,710,167 |
4,500,188 |
3,171,496 |
|||||||
Noninterest-bearing |
741,343 |
721,501 |
740,011 |
774,393 |
840,314 |
744,159 |
539,336 |
|||||||
Total deposits |
5,179,456 |
5,170,430 |
5,310,982 |
5,318,864 |
5,550,481 |
5,244,347 |
3,710,832 |
|||||||
Short-term borrowings |
||||||||||||||
Federal funds purchased and securities sold |
||||||||||||||
under agreements to repurchase |
63,489 |
50,580 |
37,353 |
38,413 |
41,456 |
47,536 |
99,865 |
|||||||
Federal Home Loan Bank |
0 |
0 |
0 |
0 |
1,096 |
0 |
114,637 |
|||||||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
29,512 |
|||||||
Total short-term borrowings |
63,489 |
50,580 |
37,353 |
38,413 |
42,552 |
47,536 |
244,014 |
|||||||
Long-term debt |
128,998 |
281,170 |
389,972 |
399,843 |
408,744 |
299,202 |
224,475 |
|||||||
Other long-term debt |
20,620 |
20,620 |
20,620 |
20,620 |
20,620 |
20,620 |
20,620 |
|||||||
Total borrowed funds |
213,107 |
352,370 |
447,945 |
458,876 |
471,916 |
367,358 |
489,109 |
|||||||
Accrued interest and other liabilities |
180,901 |
201,567 |
191,043 |
190,234 |
163,365 |
190,940 |
68,258 |
|||||||
Total Liabilities |
5,573,464 |
5,724,367 |
5,949,970 |
5,967,974 |
6,185,762 |
5,802,645 |
4,268,199 |
|||||||
SHAREHOLDERS' EQUITY |
||||||||||||||
Preferred stock |
0 |
0 |
0 |
47,521 |
78,573 |
11,717 |
78,241 |
|||||||
Common stock |
579,701 |
578,810 |
580,299 |
549,428 |
490,889 |
572,161 |
448,897 |
|||||||
Retained earnings |
306,923 |
294,346 |
282,634 |
277,775 |
276,950 |
290,510 |
134,464 |
|||||||
Accumulated other comprehensive loss |
(8,584) |
(8,021) |
(8,320) |
(9,873) |
(6,372) |
(8,694) |
(8,559) |
|||||||
Treasury stock, at cost |
(181,024) |
(181,023) |
(183,562) |
(185,284) |
(185,409) |
(182,707) |
(186,433) |
|||||||
Total Shareholders' Equity |
697,016 |
684,112 |
671,051 |
679,567 |
654,631 |
682,987 |
466,610 |
|||||||
Total Liabilities and Shareholders' Equity |
$6,270,480 |
$6,408,479 |
$6,621,021 |
$6,647,541 |
$6,840,393 |
$6,485,632 |
$4,734,809 |
|||||||
FIRST FINANCIAL BANCORP. |
|||||||||||||||||||||
NET INTEREST MARGIN RATE/VOLUME ANALYSIS |
|||||||||||||||||||||
(Dollars in thousands) |
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
Quarterly Averages |
Year-to-Date Averages |
||||||||||||||||||||
Dec. 31, 2010 |
Sep. 30, 2010 |
Dec. 31, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
|||||||||||||||||
Balance |
Yield |
Balance |
Yield |
Balance |
Yield |
Balance |
Yield |
Balance |
Yield |
||||||||||||
Earning assets |
|||||||||||||||||||||
Investment securities |
$ 798,135 |
2.85% |
$ 691,700 |
3.23% |
$ 608,952 |
4.39% |
$ 662,344 |
3.42% |
$ 667,843 |
4.62% |
|||||||||||
Interest-bearing deposits with other banks |
405,920 |
0.36% |
483,097 |
0.33% |
447,999 |
0.18% |
459,618 |
0.34% |
151,198 |
0.14% |
|||||||||||
Gross loans, including covered loans and indemnification asset (2) |
4,588,569 |
6.59% |
4,692,514 |
6.65% |
5,184,839 |
6.61% |
4,785,437 |
6.67% |
3,523,763 |
5.74% |
|||||||||||
Total earning assets |
5,792,624 |
5.64% |
5,867,311 |
5.73% |
6,241,790 |
5.93% |
5,907,399 |
5.81% |
4,342,804 |
5.37% |
|||||||||||
Nonearning assets |
|||||||||||||||||||||
Allowance for loan and lease losses |
(76,537) |
(61,753) |
(54,164) |
(64,694) |
(42,553) |
||||||||||||||||
Cash and due from banks |
122,167 |
185,322 |
274,601 |
228,539 |
133,611 |
||||||||||||||||
Accrued interest and other assets |
432,226 |
417,599 |
378,166 |
414,388 |
300,947 |
||||||||||||||||
Total assets |
$ 6,270,480 |
$ 6,408,479 |
$ 6,840,393 |
$ 6,485,632 |
$ 4,734,809 |
||||||||||||||||
Interest-bearing liabilities |
|||||||||||||||||||||
Total interest-bearing deposits |
$ 4,438,113 |
1.16% |
$ 4,448,929 |
1.29% |
$ 4,710,167 |
1.45% |
$ 4,500,188 |
1.30% |
$ 3,171,496 |
1.50% |
|||||||||||
Borrowed funds |
|||||||||||||||||||||
Short-term borrowings |
63,489 |
0.21% |
50,580 |
0.20% |
42,552 |
0.21% |
47,536 |
0.20% |
244,014 |
0.54% |
|||||||||||
Long-term debt |
128,998 |
3.67% |
281,170 |
2.87% |
408,744 |
2.53% |
299,202 |
2.79% |
224,475 |
3.18% |
|||||||||||
Other long-term debt |
20,620 |
5.10% |
20,620 |
6.20% |
20,620 |
6.20% |
20,620 |
5.92% |
20,620 |
5.83% |
|||||||||||
Total borrowed funds |
213,107 |
2.78% |
352,370 |
2.68% |
471,916 |
2.49% |
367,358 |
2.63% |
489,109 |
1.98% |
|||||||||||
Total interest-bearing liabilities |
4,651,220 |
1.23% |
4,801,299 |
1.39% |
5,182,083 |
1.54% |
4,867,546 |
1.40% |
3,660,605 |
1.56% |
|||||||||||
Noninterest-bearing liabilities |
|||||||||||||||||||||
Noninterest-bearing demand deposits |
741,343 |
721,501 |
840,314 |
744,159 |
539,336 |
||||||||||||||||
Other liabilities |
180,901 |
201,567 |
163,365 |
190,940 |
68,258 |
||||||||||||||||
Shareholders' equity |
697,016 |
684,112 |
654,631 |
682,987 |
466,610 |
||||||||||||||||
Total liabilities & shareholders' equity |
$ 6,270,480 |
$ 6,408,479 |
$ 6,840,393 |
$ 6,485,632 |
$ 4,734,809 |
||||||||||||||||
Net interest income (1) |
$ 67,906 |
$ 67,846 |
$ 73,182 |
$ 275,510 |
$ 175,983 |
||||||||||||||||
Net interest spread (1) |
4.41% |
4.34% |
4.39% |
4.41% |
3.81% |
||||||||||||||||
Net interest margin (1) |
4.65% |
4.59% |
4.65% |
4.66% |
4.05% |
||||||||||||||||
(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 |
$ (655) |
$ 765 |
$ 110 |
$ (2,366) |
$ 1,360 |
$ (1,006) |
$ (7,998) |
$ (188) |
$ (8,186) |
||||||||||
Interest-bearing deposits with other banks |
47 |
(71) |
(24) |
203 |
(39) |
164 |
308 |
1,052 |
1,360 |
||||||||||
Gross loans, including covered loans and indemnification asset (2) |
(723) |
(1,726) |
(2,449) |
(278) |
(9,904) |
(10,182) |
32,930 |
84,170 |
117,100 |
||||||||||
Total earning assets |
(1,331) |
(1,032) |
(2,363) |
(2,441) |
(8,583) |
(11,024) |
25,240 |
85,034 |
110,274 |
||||||||||
Interest-bearing liabilities |
|||||||||||||||||||
Total interest-bearing deposits |
$ (1,503) |
$ (31) |
$ (1,534) |
$ (3,492) |
$ (792) |
$ (4,284) |
$ (6,468) |
$ 17,224 |
$ 10,756 |
||||||||||
Borrowed funds |
|||||||||||||||||||
Short-term borrowings |
1 |
7 |
8 |
(1) |
11 |
10 |
(835) |
(389) |
(1,224) |
||||||||||
Long-term debt |
568 |
(1,408) |
(840) |
1,172 |
(2,589) |
(1,417) |
(887) |
2,083 |
1,196 |
||||||||||
Other long-term debt |
(57) |
- |
(57) |
(57) |
0 |
(57) |
19 |
0 |
19 |
||||||||||
Total borrowed funds |
512 |
(1,401) |
(889) |
1,114 |
(2,578) |
(1,464) |
(1,703) |
1,694 |
(9) |
||||||||||
Total interest-bearing liabilities |
(991) |
(1,432) |
(2,423) |
(2,378) |
(3,370) |
(5,748) |
(8,171) |
18,918 |
10,747 |
||||||||||
Net interest income (1) |
$ (340) |
$ 400 |
$ 60 |
$ (63) |
$ (5,213) |
$ (5,276) |
$ 33,411 |
$ 66,116 |
$ 99,527 |
||||||||||
(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) |
||||||||||||||
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Full Year |
Full Year |
||||||||
2010 |
2010 |
2010 |
2010 |
2009 |
2010 |
2009 |
||||||||
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY |
||||||||||||||
Balance at beginning of period |
$57,249 |
$57,811 |
$56,642 |
$59,311 |
$55,770 |
$59,311 |
$35,873 |
|||||||
Provision for uncovered loan and lease losses |
9,741 |
6,287 |
6,158 |
11,378 |
14,812 |
33,564 |
56,084 |
|||||||
Gross charge-offs |
||||||||||||||
Commercial |
5,131 |
762 |
1,156 |
6,275 |
1,143 |
13,324 |
11,295 |
|||||||
Real estate - construction |
500 |
3,607 |
2,386 |
2,126 |
6,788 |
8,619 |
12,680 |
|||||||
Real estate - commercial |
1,887 |
2,013 |
359 |
3,932 |
1,854 |
8,191 |
4,514 |
|||||||
Real estate - residential |
196 |
717 |
246 |
534 |
262 |
1,693 |
1,315 |
|||||||
Installment |
231 |
205 |
304 |
414 |
449 |
1,154 |
1,468 |
|||||||
Home equity |
1,846 |
389 |
580 |
684 |
1,105 |
3,499 |
2,037 |
|||||||
All other |
494 |
431 |
426 |
520 |
454 |
1,871 |
1,640 |
|||||||
Total gross charge-offs |
10,285 |
8,124 |
5,457 |
14,485 |
12,055 |
38,351 |
34,949 |
|||||||
Recoveries |
||||||||||||||
Commercial |
57 |
334 |
120 |
109 |
148 |
620 |
632 |
|||||||
Real estate - construction |
0 |
0 |
24 |
0 |
0 |
24 |
0 |
|||||||
Real estate - commercial |
243 |
728 |
99 |
12 |
360 |
1,082 |
557 |
|||||||
Real estate - residential |
6 |
11 |
4 |
3 |
3 |
24 |
27 |
|||||||
Installment |
116 |
116 |
127 |
160 |
195 |
519 |
857 |
|||||||
Home equity |
74 |
21 |
10 |
87 |
6 |
192 |
16 |
|||||||
All other |
34 |
65 |
84 |
67 |
72 |
250 |
214 |
|||||||
Total recoveries |
530 |
1,275 |
468 |
438 |
784 |
2,711 |
2,303 |
|||||||
Total net charge-offs |
9,755 |
6,849 |
4,989 |
14,047 |
11,271 |
35,640 |
32,646 |
|||||||
Ending allowance for uncovered loan and lease losses |
$57,235 |
$57,249 |
$57,811 |
$56,642 |
$59,311 |
$57,235 |
$59,311 |
|||||||
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) |
||||||||||||||
Commercial |
2.72% |
0.23% |
0.56% |
3.18% |
0.47% |
1.69% |
1.27% |
|||||||
Real estate - construction |
1.15% |
7.64% |
4.68% |
3.72% |
10.48% |
4.33% |
4.98% |
|||||||
Real estate - commercial |
0.56% |
0.45% |
0.09% |
1.47% |
0.57% |
0.63% |
0.42% |
|||||||
Real estate - residential |
0.27% |
0.95% |
0.32% |
0.70% |
0.31% |
0.56% |
0.37% |
|||||||
Installment |
0.64% |
0.49% |
0.92% |
1.30% |
1.15% |
0.85% |
0.68% |
|||||||
Home equity |
2.07% |
0.43% |
0.69% |
0.73% |
1.31% |
0.99% |
0.65% |
|||||||
All other |
6.26% |
5.05% |
4.89% |
6.46% |
5.40% |
5.67% |
5.25% |
|||||||
Total net charge-offs |
1.39% |
0.97% |
0.71% |
2.00% |
1.53% |
1.27% |
1.16% |
|||||||
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS |
||||||||||||||
Nonaccrual loans |
||||||||||||||
Commercial |
$13,729 |
$17,320 |
$12,874 |
$21,572 |
$13,798 |
$13,729 |
$13,798 |
|||||||
Real estate - construction |
12,921 |
13,454 |
18,890 |
17,710 |
35,604 |
12,921 |
35,604 |
|||||||
Real estate - commercial |
28,342 |
27,945 |
28,272 |
21,196 |
15,320 |
28,342 |
15,320 |
|||||||
Real estate - residential |
4,607 |
4,801 |
4,571 |
4,116 |
3,993 |
4,607 |
3,993 |
|||||||
Installment |
150 |
279 |
267 |
365 |
618 |
150 |
618 |
|||||||
Home equity |
2,553 |
2,358 |
1,797 |
1,910 |
2,324 |
2,553 |
2,324 |
|||||||
Total nonaccrual loans |
62,302 |
66,157 |
66,671 |
66,869 |
71,657 |
62,302 |
71,657 |
|||||||
Restructured loans |
8,336 |
13,365 |
12,752 |
7,584 |
6,125 |
8,336 |
6,125 |
|||||||
Total nonperforming loans |
70,638 |
79,522 |
79,423 |
74,453 |
77,782 |
70,638 |
77,782 |
|||||||
Other real estate owned (OREO) |
17,907 |
18,305 |
16,818 |
18,087 |
4,145 |
17,907 |
4,145 |
|||||||
Total nonperforming assets |
88,545 |
97,827 |
96,241 |
92,540 |
81,927 |
88,545 |
81,927 |
|||||||
Accruing loans past due 90 days or more |
370 |
233 |
276 |
286 |
417 |
370 |
417 |
|||||||
Total underperforming assets |
$88,915 |
$98,060 |
$96,517 |
$92,826 |
$82,344 |
$88,915 |
$82,344 |
|||||||
Total classified assets |
$202,140 |
$212,552 |
$201,859 |
$171,112 |
$163,451 |
$202,140 |
$163,451 |
|||||||
CREDIT QUALITY RATIOS (excluding covered assets) |
||||||||||||||
Allowance for loan and lease losses to |
||||||||||||||
Nonaccrual loans |
91.87% |
86.54% |
86.71% |
84.71% |
82.77% |
91.87% |
82.77% |
|||||||
Nonperforming loans |
81.03% |
71.99% |
72.79% |
76.08% |
76.25% |
81.03% |
76.25% |
|||||||
Total ending loans |
2.03% |
2.07% |
2.07% |
2.01% |
2.05% |
2.03% |
2.05% |
|||||||
Nonperforming loans to total loans |
2.51% |
2.88% |
2.84% |
2.65% |
2.69% |
2.51% |
2.69% |
|||||||
Nonperforming assets to |
||||||||||||||
Ending loans, plus OREO |
3.12% |
3.51% |
3.42% |
3.27% |
2.83% |
3.12% |
2.83% |
|||||||
Total assets |
1.42% |
1.59% |
1.46% |
1.41% |
1.23% |
1.42% |
1.23% |
|||||||
FIRST FINANCIAL BANCORP. |
||||||||||||||
CAPITAL ADEQUACY |
||||||||||||||
(Dollars in thousands, except per share) |
||||||||||||||
(Unaudited) |
||||||||||||||
Twelve months ended, |
||||||||||||||
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Dec. 31, |
Dec. 31, |
||||||||
2010 |
2010 |
2010 |
2010 |
2009 |
2010 |
2009 |
||||||||
PER COMMON SHARE |
||||||||||||||
Market Price |
||||||||||||||
High |
$19.41 |
$17.10 |
$21.32 |
$19.00 |
$15.48 |
$21.32 |
$15.48 |
|||||||
Low |
$16.21 |
$14.19 |
$14.95 |
$13.89 |
$11.83 |
$13.89 |
$5.58 |
|||||||
Close |
$18.48 |
$16.68 |
$14.95 |
$17.78 |
$14.56 |
$18.48 |
$14.56 |
|||||||
Average common shares outstanding - basic |
57,573,544 |
57,570,709 |
57,539,901 |
55,161,551 |
51,030,661 |
56,969,491 |
45,028,640 |
|||||||
Average common shares outstanding - diluted |
58,688,415 |
58,531,505 |
58,604,039 |
56,114,424 |
51,653,562 |
57,993,078 |
45,556,868 |
|||||||
Ending common shares outstanding |
58,064,977 |
58,057,934 |
58,062,655 |
57,833,969 |
51,433,821 |
58,064,977 |
51,433,821 |
|||||||
REGULATORY CAPITAL |
Preliminary |
Preliminary |
||||||||||||
Tier 1 Capital |
$680,145 |
$670,121 |
$658,623 |
$645,467 |
$628,982 |
$680,145 |
$628,982 |
|||||||
Tier 1 Ratio |
18.45% |
18.64% |
18.15% |
17.37% |
16.11% |
18.45% |
16.11% |
|||||||
Total Capital |
$727,252 |
$715,938 |
$704,752 |
$692,630 |
$678,024 |
$727,252 |
$678,024 |
|||||||
Total Capital Ratio |
19.72% |
19.91% |
19.42% |
18.64% |
17.37% |
19.72% |
17.37% |
|||||||
Total Capital in excess of minimum |
||||||||||||||
requirement |
$432,274 |
$428,314 |
$414,434 |
$395,408 |
$365,739 |
$432,274 |
$365,739 |
|||||||
Total Risk-Weighted Assets |
$3,687,224 |
$3,595,295 |
$3,628,978 |
$3,715,280 |
$3,903,566 |
$3,687,224 |
$3,903,566 |
|||||||
Leverage Ratio |
10.89% |
10.50% |
9.99% |
9.76% |
9.24% |
10.89% |
9.24% |
|||||||
OTHER CAPITAL RATIOS |
||||||||||||||
Ending shareholders' equity to ending |
||||||||||||||
assets |
11.16% |
11.23% |
10.35% |
10.20% |
9.76% |
11.16% |
9.76% |
|||||||
Ending common shareholders' equity |
||||||||||||||
to ending assets |
11.16% |
11.23% |
10.35% |
10.20% |
8.57% |
11.16% |
8.57% |
|||||||
Ending tangible shareholders' equity |
||||||||||||||
to ending tangible assets |
10.33% |
10.38% |
9.55% |
9.38% |
8.95% |
10.33% |
8.95% |
|||||||
Ending tangible common shareholders' |
||||||||||||||
equity to ending tangible assets |
10.33% |
10.38% |
9.55% |
9.38% |
7.75% |
10.33% |
7.75% |
|||||||
Average shareholders' equity to |
||||||||||||||
average assets |
11.12% |
10.68% |
10.14% |
10.22% |
9.57% |
10.53% |
9.85% |
|||||||
Average common shareholders' equity |
||||||||||||||
to average assets |
11.12% |
10.68% |
10.14% |
9.51% |
8.42% |
10.35% |
8.20% |
|||||||
Average tangible shareholders' equity |
||||||||||||||
to average tangible assets |
10.29% |
9.86% |
9.33% |
9.42% |
8.78% |
9.73% |
8.71% |
|||||||
Average tangible common shareholders' |
||||||||||||||
equity to average tangible assets |
10.29% |
9.86% |
9.33% |
8.70% |
7.62% |
9.55% |
7.04% |
|||||||
SOURCE First Financial Bancorp
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