FIRST FINANCIAL BANCORP /OH/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - FIRST FINANCIAL BANCORP /OH/	exh992earningsrelease1q2.htm
8-K - 8-K - FIRST FINANCIAL BANCORP /OH/	a8kearningsrelease1q20.htm

Exhibit 99.1

First Financial Bancorp Announces First Quarter 2020 Financial Results


•	Earnings per Diluted Share of $0.29; $0.31 on an Adjusted Basis


•	4.6% Loan Growth on an Annualized Basis


•	3.77% Fully Tax Equivalent Net Interest Margin


•	$25.4 million total provision for credit losses

Cincinnati, Ohio - April 20, 2020 - First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the first quarter 2020. In addition, the Company has highlighted client and associate outreach initiatives related to the COVID-19 pandemic.

For the three months ended March 31, 2020, the Company reported net income of $28.6 million, or $0.29 per diluted common share. These results compare to net income of $48.7 million, or $0.49 per diluted common share, for the fourth quarter of 2019 and $45.8 million, or $0.47 per diluted common share, for the first quarter of 2019.

Return on average assets for the first quarter of 2020 was 0.79% while return on average tangible common equity was 9.71%. These compare to returns on average assets of 1.34% and 1.33%, and returns on average tangible common equity of 15.84% and 15.95%, in the fourth quarter of 2019 and the first quarter of 2019, respectively.

First quarter 2020 highlights include:


•	After adjustments⁽¹⁾ for merger-related, nonrecurring and certain COVID-19 related items:


◦	Net income of $0.31 per diluted common share


◦	0.85% return on average assets; 10.41% return on average tangible common equity


•	Adjustments⁽¹⁾ to net income include:


◦	$1.0 million contribution to First Financial Foundation for COVID-19 relief


◦	$1.5 million of other nonrecurring costs such as branch consolidation costs


•	Total Allowance for Credit Losses of $158.2 million; Total quarterly provision for credit losses of $25.4 million


◦	Adopted CECL as of January 1


◦	Loans and leases - ACL of $143.9 million, 1.55% of total loans; $23.9 provision expense


◦	Unfunded Commitments - ACL of $14.3 million; $1.6 million provision expense


◦	Substantially all of first quarter provision expense related to expected economic impact from COVID-19


•	Loan balances grew 4.6% on an annualized basis


◦	$106.2 million increase compared to the linked quarter driven by commercial real estate


•	Net interest margin of 3.77% on a fully tax-equivalent basis⁽¹⁾


◦	12 basis point reduction from the linked quarter


◦	Impact of lower interest rates on asset yields, lower loan fees and lower purchase accounting accretion partially offset by funding cost reductions


•	Noninterest income of $35.4 million


◦	$4.0 million, or 65.7% increase in foreign exchange income


◦	Continued strong client derivative fee income


◦	Record trust and wealth management fees; increased $0.6 million, or 14.2%

____________________________________________________________________________________________⁽¹⁾Financial information in this release that is described as “adjusted” or that is presented on a fully tax equivalent basis is non-GAAP. For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled “Use of Non-GAAP Financial Measures” in this release and “Appendix: Non-GAAP to GAAP Reconciliation” in the accompanying slide presentation.


•	Noninterest expenses of $89.7 million, or $87.2 million as adjusted⁽¹⁾


◦	Efficiency ratio of 59.9%; 58.2% as adjusted⁽¹⁾


◦	$1.0 million contribution to First Financial Foundation for COVID-19 relief


◦	Elevated healthcare costs, seasonal increases in payroll taxes and incentive compensation related to the increase in foreign exchange income drove higher salary and benefits expense


•	Strong capital ratios


◦	Total capital of 13.54%; Tier 1 common equity of 11.27%; Tangible common equity of 8.25%


◦	Tangible book value per share of $11.82

To date, the Company has performed the following In response to COVID-19:


•	Introduced hardship relief programs that include payment deferrals, fee-waivers and suspension of foreclosures


◦	Processed modifications for over $950 million, or 10% of total loans


◦	Successfully modified over $45 million in consumer loans


•	Participant in CARES Act SBA Paycheck Protection Program


◦	Received in excess of 5,700 PPP applications; over $1 billion in requests


◦	Approximately 3,600 PPP requests, or 63% of applicants, approved by SBA


•	Accelerated adoption of new processes and technologies to ease customer access to banking services

Archie Brown, President and Chief Executive Officer, commented, “The first quarter of 2020 proved to be one of the most unique and challenging quarters in our industry's history. While the first half of the quarter was marked by strong financial performance, March was characterized by economic, logistical and social upheaval. In a rapidly changing operational and economic landscape, we successfully implemented a comprehensive business continuity plan without sacrificing the performance and service our borrowers and shareholders have come to expect and were pleased that pre-provision financial results exceeded our expectations, despite a 150 basis point drop in interest rates."

Mr. Brown continued, “First quarter earnings were solid, although they were obviously negatively impacted by COVID's influence on our CECL model. To date, credit stress on the loan portfolio has been limited, evidenced by net recoveries during the period, however the quarterly provision expense reflects our expectation for that to change during the remainder of the year. We were pleased with our ability to manage the margin despite strong interest rate headwinds, as we successfully lowered deposit costs to help alleviate the pressure from declining asset yields, fewer loan fees and lower purchase accounting accretion. In addition, a record quarter from Bannockburn combined with a relatively flat expense base to offset expected seasonal declines in noninterest income to result in a sub-60% adjusted efficiency ratio."

Mr. Brown further remarked, "We began monitoring the pandemic early and preparing in the event it affected our markets. As a result, in response to the pandemic, our executive committee was able to immediately shift to crisis management, working to develop plans and products to assist our clients and communities in a meaningful way. This included the development of our Hardship Relief program, which includes various payment deferral options for borrowers, as well as making a $1.0 million contribution to help fund COVID-19 relief efforts in communities throughout our footprint. We are also actively engaged in extending loans under the U.S. Government's Paycheck Protection Program to our loan and deposit customers. We continue to actively monitor the actions of the federal and state governments, and are proactively assisting our clients to ensure they are aware of every program and level of financial assistance available to them."

Mr. Brown concluded, "The end of the first quarter was certainly unprecedented, and one we will never forget. Our agile response to these trying circumstances has truly highlighted our strength as a Company. In the face of a pandemic, we were able to deliver solid financial performance while maintaining focus on our customers and communities. Although certain performance metrics are difficult to forecast for the remainder of the year, we pledge to remain diligent and manage the Company in a way that continues to deliver maximum shareholder value while prioritizing the physical and financial well-being of our clients and associates."

Full detail of the Company’s first quarter performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information

First Financial’s executive management will host a conference call to discuss the Company’s financial and operating results on Tuesday, April 21, 2020 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 (Canada toll free) or +1 (412) 380-2003 (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company’s website at www.bankatfirst.com. A replay of the conference call will be available beginning one hour after the completion of the live call at (877) 344-7529 (U.S. toll free), (855) 669-9658 (Canada toll free) and +1 (412) 317-0088 (International); conference number 10141642. The webcast will be archived on the Investor Relations section of the Company’s website for 12 months.

Press Release and Additional Information on Website

This press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com.

Use of Non-GAAP Financial Measures

This earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company’s results of operations or financial position. Where Non-GAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the

comparable GAAP financial measure, can be found in the section titled “Appendix: Non-GAAP to GAAP Reconciliation” in the accompanying slide presentation.

Forward-Looking Statement

Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ‘‘believes,’’ ‘‘anticipates,’’ “likely,” “expected,” “estimated,” ‘‘intends’’ and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:


•	economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company’s business;


•	future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses


•	the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; (iv) management’s ability to effectively execute its business plans;


•	mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;


•	the possibility that any of the anticipated benefits of the Company’s acquisitions will not be realized or will not be realized within the expected time period;


•	the effect of changes in accounting policies and practices;


•	changes in consumer spending, borrowing and saving and changes in unemployment;


•	changes in customers’ performance and creditworthiness;


•	the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;


•	current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth;

•

the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 (“COVID-19”), global pandemic, and the impact of a slowing U.S. economy and increased unemployment on the performance of our loan and lease portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products;


•	our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;


•	financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;


•	the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;


•	the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses;


•	a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;


•	the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and


•	our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2019, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov.

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, the Company does not assume any obligation to update any forward-looking statement.

About First Financial Bancorp.

First Financial Bancorp. is a Cincinnati, Ohio based bank holding company. As of March 31, 2020, the Company had $15.1 billion in assets, $9.3 billion in loans, $10.6 billion in deposits and $2.2 billion in shareholders’ equity. The Company’s subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.6 billion in assets under management as of March 31, 2020. The Company operated 145 full service banking centers as of March 31, 2020, primarily in Ohio, Indiana and Kentucky, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.

Contact Information

Investors/Analysts Media

Jamie Anderson Tim Condron

Chief Financial Officer Marketing Communications Manager

(513) 887-5400 (513) 979-5796

InvestorRelations@bankatfirst.com media@bankatfirst.com

Selected Financial Information

March 31, 2020

(unaudited)



Contents	Page
Consolidated Financial Highlights	2
Consolidated Quarterly Statements of Income	3
Consolidated Statements of Condition	4
Average Consolidated Statements of Condition	5
Net Interest Margin Rate / Volume Analysis	6
Credit Quality	7
Capital Adequacy	8



FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)

	Three Months Ended,
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2020			2019			2019			2019			2019
RESULTS OF OPERATIONS
Net income	$	28,628		$	48,677		$	50,856		$	52,703		$	45,839
Net earnings per share - basic	$	0.29		$	0.49		$	0.52		$	0.54		$	0.47
Net earnings per share - diluted	$	0.29		$	0.49		$	0.51		$	0.53		$	0.47
Dividends declared per share	$	0.23		$	0.23		$	0.23		$	0.22		$	0.22

KEY FINANCIAL RATIOS
Return on average assets	0.79		%	1.34		%	1.41		%	1.50		%	1.33		%
Return on average shareholders' equity	5.21		%	8.60		%	9.13		%	9.85		%	8.88		%
Return on average tangible shareholders' equity	9.71		%	15.84		%	16.15		%	17.33		%	15.95		%

Net interest margin	3.71		%	3.84		%	3.91		%	3.99		%	4.05		%
Net interest margin (fully tax equivalent) ⁽¹⁾	3.77		%	3.89		%	3.96		%	4.04		%	4.10		%

Ending shareholders' equity as a percent of ending assets	14.47		%	15.49		%	15.62		%	15.16		%	15.14		%
Ending tangible shareholders' equity as a percent of:
Ending tangible assets	8.25		%	9.07		%	9.17		%	9.34		%	9.15		%
Risk-weighted assets	10.50		%	11.09		%	11.34		%	11.82		%	11.61		%

Average shareholders' equity as a percent of average assets	15.21		%	15.53		%	15.43		%	15.22		%	15.01		%
Average tangible shareholders' equity as a percent of
average tangible assets	8.79		%	9.07		%	9.35		%	9.26		%	8.95		%

Book value per share	$	22.25		$	22.82		$	22.59		$	22.18		$	21.60
Tangible book value per share	$	11.82		$	12.42		$	12.33		$	12.79		$	12.19

Common equity tier 1 ratio⁽²⁾	11.27		%	11.30		%	11.52		%	12.00		%	12.03		%
Tier 1 ratio ⁽²⁾	11.66		%	11.69		%	11.91		%	12.40		%	12.43		%
Total capital ratio ⁽²⁾	13.54		%	13.39		%	13.62		%	14.20		%	14.24		%
Leverage ratio ⁽²⁾	9.49		%	9.58		%	9.75		%	10.02		%	9.84		%

AVERAGE BALANCE SHEET ITEMS
Loans ⁽³⁾	$	9,220,643		$	9,149,222		$	9,014,092		$	8,852,662		$	8,773,310
Investment securities	3,115,723			3,102,867			3,290,666			3,408,994			3,355,732
Interest-bearing deposits with other banks	39,332			36,672			38,569			33,255			34,709
Total earning assets	$	12,375,698		$	12,288,761		$	12,343,327		$	12,294,911		$	12,163,751
Total assets	$	14,524,422		$	14,460,288		$	14,320,514		$	14,102,733		$	13,952,551
Noninterest-bearing deposits	$	2,643,240		$	2,638,908		$	2,513,458		$	2,484,214		$	2,457,587
Interest-bearing deposits	7,590,791			7,583,531			7,504,708			7,612,146			7,610,092
Total deposits	$	10,234,031		$	10,222,439		$	10,018,166		$	10,096,360		$	10,067,679
Borrowings	$	1,735,767		$	1,613,696		$	1,816,983		$	1,656,570		$	1,587,068
Shareholders' equity	$	2,209,733		$	2,245,107		$	2,210,327		$	2,146,997		$	2,094,234

CREDIT QUALITY RATIOS
Allowance to ending loans	1.55		%	0.63		%	0.62		%	0.69		%	0.64		%
Allowance to nonaccrual loans	296.51		%	119.69		%	93.18		%	119.86		%	95.40		%
Allowance to nonperforming loans	203.42		%	96.73		%	71.46		%	69.33		%	68.94		%
Nonperforming loans to total loans	0.76		%	0.65		%	0.87		%	0.99		%	0.93		%
Nonperforming assets to ending loans, plus OREO	0.78		%	0.67		%	0.89		%	1.00		%	0.95		%
Nonperforming assets to total assets	0.48		%	0.42		%	0.56		%	0.62		%	0.60		%
Classified assets to total assets	0.83		%	0.62		%	0.92		%	1.02		%	1.01		%
Net charge-offs to average loans (annualized)	(0.04		)%	0.15		%	0.45		%	0.08		%	0.64		%

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest 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) March 31, 2020 regulatory capital ratios are preliminary.

(3) Includes loans held for sale.



FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)

	2020			2019
	First			Fourth			Third			Second			First			Full
	Quarter			Quarter			Quarter			Quarter			Quarter			Year
Interest income
Loans and leases, including fees	$	115,775		$	122,802		$	126,786		$	126,365		$	123,056		$	499,009
Investment securities
Taxable	19,005			20,137			22,180			23,616			24,235			90,168
Tax-exempt	4,582			4,545			4,457			4,336			4,258			17,596
Total investment securities interest	23,587			24,682			26,637			27,952			28,493			107,764
Other earning assets	142			167			222			206			210			805
Total interest income	139,504			147,651			153,645			154,523			151,759			607,578

Interest expense
Deposits	16,365			19,026			20,151			20,612			19,243			79,032
Short-term borrowings	5,087			5,430			7,199			6,646			5,960			25,235
Long-term borrowings	3,770			4,293			4,760			4,963			5,041			19,057
Total interest expense	25,222			28,749			32,110			32,221			30,244			123,324
Net interest income	114,282			118,902			121,535			122,302			121,515			484,254
Provision for credit losses-loans and leases ⁽¹⁾	23,880			4,629			5,228			6,658			14,083			30,598
Provision for credit losses-unfunded commitments ⁽¹⁾	1,568			177			(216		)	(132		)	6			(165		)
Net interest income after provision for credit losses	88,834			114,096			116,523			115,776			107,426			453,821

Noninterest income
Service charges on deposit accounts	8,435			9,343			9,874			9,819			8,903			37,939
Trust and wealth management fees	4,469			3,913			3,718			3,943			4,070			15,644
Bankcard income	2,698			3,405			3,316			6,497			5,586			18,804
Client derivative fees	3,105			4,194			4,859			4,905			1,704			15,662
Foreign exchange income	9,966			6,014			1,708			17			0			7,739
Net gains from sales of loans	2,831			4,723			4,806			3,432			1,890			14,851
Net gains on sale of investment securities	(59		)	(296		)	105			(37		)	(178		)	(406		)
Other	3,939			5,472			4,754			6,062			4,852			21,140
Total noninterest income	35,384			36,768			33,140			34,638			26,827			131,373

Noninterest expenses
Salaries and employee benefits	54,822			53,952			53,212			53,985			47,912			209,061
Net occupancy	6,104			6,334			5,509			5,596			6,630			24,069
Furniture and equipment	4,053			4,145			4,120			4,222			3,416			15,903
Data processing	6,389			5,996			5,774			4,984			5,127			21,881
Marketing	1,220			1,980			1,346			1,976			1,606			6,908
Communication	890			882			910			747			728			3,267
Professional services	2,275			2,192			4,771			2,039			2,252			11,254
State intangible tax	1,516			1,767			1,445			1,307			1,310			5,829
FDIC assessments	1,405			1,055			(1,097		)	1,065			950			1,973
Intangible amortization	2,792			3,150			2,432			2,044			2,045			9,671
Other	8,200			11,434			8,020			6,545			6,517			32,516
Total noninterest expenses	89,666			92,887			86,442			84,510			78,493			342,332
Income before income taxes	34,552			57,977			63,221			65,904			55,760			242,862
Income tax expense (benefit)	5,924			9,300			12,365			13,201			9,921			44,787
Net income	$	28,628		$	48,677		$	50,856		$	52,703		$	45,839		$	198,075

ADDITIONAL DATA
Net earnings per share - basic	$	0.29		$	0.49		$	0.52		$	0.54		$	0.47		$	2.01
Net earnings per share - diluted	$	0.29		$	0.49		$	0.51		$	0.53		$	0.47		$	2.00
Dividends declared per share	$	0.23		$	0.23		$	0.23		$	0.22		$	0.22		$	0.90

Return on average assets	0.79		%	1.34		%	1.41		%	1.50		%	1.33		%	1.39		%
Return on average shareholders' equity	5.21		%	8.60		%	9.13		%	9.85		%	8.88		%	9.11		%

Interest income	$	139,504		$	147,651		$	153,645		$	154,523		$	151,759		$	607,578
Tax equivalent adjustment	1,624			1,630			1,759			1,416			1,523			6,328
Interest income - tax equivalent	141,128			149,281			155,404			155,939			153,282			613,906
Interest expense	25,222			28,749			32,110			32,221			30,244			123,324
Net interest income - tax equivalent	$	115,906		$	120,532		$	123,294		$	123,718		$	123,038		$	490,582

Net interest margin	3.71		%	3.84		%	3.91		%	3.99		%	4.05		%	3.95		%
Net interest margin (fully tax equivalent)⁽²⁾	3.77		%	3.89		%	3.96		%	4.04		%	4.10		%	4.00		%

Full-time equivalent employees	2,067			2,065			2,064			2,076			2,087

(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.
(2) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.



FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)

	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			% Change		% Change
	2020			2019			2019			2019			2019			Linked Qtr.		Comp Qtr.
ASSETS
Cash and due from banks	$	261,892		$	200,691		$	242,482		$	169,694		$	169,004		30.5	%	55.0	%
Interest-bearing deposits with other banks	71,071			56,948			39,669			101,668			50,224			24.8	%	41.5	%
Investment securities available-for-sale	2,908,688			2,852,084			2,850,502			3,152,970			3,113,811			2.0	%	(6.6	)%
Investment securities held-to-maturity	136,744			142,862			148,778			154,327			158,305			(4.3	)%	(13.6	)%
Other investments	143,581			125,020			124,965			127,439			115,731			14.8	%	24.1	%
Loans held for sale	27,334			13,680			23,528			20,244			8,217			99.8	%	232.7	%
Loans and leases
Commercial and industrial	2,477,773			2,465,877			2,470,017			2,547,997			2,543,427			0.5	%	(2.6	)%
Lease financing	82,602			88,364			92,616			90,638			95,573			(6.5	)%	(13.6	)%
Construction real estate	500,311			493,182			515,960			497,683			458,113			1.4	%	9.2	%
Commercial real estate	4,278,257			4,194,651			4,015,908			3,903,654			3,802,179			2.0	%	12.5	%
Residential real estate	1,061,792			1,055,949			1,055,007			1,015,820			975,120			0.6	%	8.9	%
Home equity	781,243			771,869			776,885			787,139			797,118			1.2	%	(2.0	)%
Installment	80,085			82,589			88,275			89,149			90,689			(3.0	)%	(11.7	)%
Credit card	45,756			49,184			49,010			48,706			46,982			(7.0	)%	(2.6	)%
Total loans	9,307,819			9,201,665			9,063,678			8,980,786			8,809,201			1.2	%	5.7	%
Less:
Allowance for credit losses ⁽¹⁾	143,885			57,650			56,552			61,549			56,722			149.6	%	153.7	%
Net loans	9,163,934			9,144,015			9,007,126			8,919,237			8,752,479			0.2	%	4.7	%
Premises and equipment	212,787			214,506			213,681			211,313			210,676			(0.8	)%	1.0	%
Goodwill	937,771			937,771			937,689			879,727			879,727			0.0	%	6.6	%
Other intangibles	73,258			76,201			79,506			36,349			38,571			(3.9	)%	89.9	%
Accrued interest and other assets	1,120,507			747,847			812,519			664,695			577,518			49.8	%	94.0	%
Total Assets	$	15,057,567		$	14,511,625		$	14,480,445		$	14,437,663		$	14,074,263		3.8	%	7.0	%

LIABILITIES
Deposits
Interest-bearing demand	$	2,498,109		$	2,364,881		$	2,316,301		$	2,332,692		$	2,235,036		5.6	%	11.8	%
Savings	2,978,250			2,960,979			2,924,200			2,953,114			3,100,894			0.6	%	(4.0	)%
Time	2,435,858			2,240,441			2,308,617			2,321,908			2,309,810			8.7	%	5.5	%
Total interest-bearing deposits	7,912,217			7,566,301			7,549,118			7,607,714			7,645,740			4.6	%	3.5	%
Noninterest-bearing	2,723,341			2,643,928			2,534,739			2,501,290			2,488,157			3.0	%	9.5	%
Total deposits	10,635,558			10,210,229			10,083,857			10,109,004			10,133,897			4.2	%	5.0	%
Federal funds purchased and securities sold
under agreements to repurchase	215,824			165,181			85,286			260,621			95,015			30.7	%	127.1	%
FHLB short-term borrowings	1,181,900			1,151,000			1,128,900			1,052,700			952,400			2.7	%	24.1	%
Total short-term borrowings	1,397,724			1,316,181			1,214,186			1,313,321			1,047,415			6.2	%	33.4	%
Long-term debt	325,566			414,376			498,778			547,042			546,423			(21.4	)%	(40.4	)%
Total borrowed funds	1,723,290			1,730,557			1,712,964			1,860,363			1,593,838			(0.4	)%	8.1	%
Accrued interest and other liabilities	519,336			323,134			422,311			280,107			216,109			60.7	%	140.3	%
Total Liabilities	12,878,184			12,263,920			12,219,132			12,249,474			11,943,844			5.0	%	7.8	%

SHAREHOLDERS' EQUITY
Common stock	1,633,950			1,640,771			1,639,333			1,623,699			1,622,554			(0.4	)%	0.7	%
Retained earnings	660,653			711,249			685,368			657,730			626,408			(7.1	)%	5.5	%
Accumulated other comprehensive income (loss)	11,788			13,323			15,450			5,193			(19,635		)	(11.5	)%	160.0	%
Treasury stock, at cost	(127,008		)	(117,638		)	(78,838		)	(98,433		)	(98,908		)	8.0	%	28.4	%
Total Shareholders' Equity	2,179,383			2,247,705			2,261,313			2,188,189			2,130,419			(3.0	)%	2.3	%
Total Liabilities and Shareholders' Equity	$	15,057,567		$	14,511,625		$	14,480,445		$	14,437,663		$	14,074,263		3.8	%	7.0	%

(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.



FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)

	Quarterly Averages
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2020			2019			2019			2019			2019
ASSETS
Cash and due from banks	$	235,696		$	221,060		$	191,000		$	173,278		$	181,695
Interest-bearing deposits with other banks	39,332			36,672			38,569			33,255			34,709
Investment securities	3,115,723			3,102,867			3,290,666			3,408,994			3,355,732
Loans held for sale	13,174			21,050			18,197			13,258			6,392
Loans and leases
Commercial and industrial	2,450,893			2,469,810			2,509,782			2,533,981			2,509,274
Lease financing	85,782			91,225			94,858			94,458			91,043
Construction real estate	501,471			501,892			509,742			457,962			496,153
Commercial real estate	4,209,345			4,102,288			3,925,028			3,834,404			3,762,314
Residential real estate	1,055,456			1,053,707			1,035,975			989,923			961,584
Home equity	773,082			773,119			781,340			789,087			807,768
Installment	81,234			85,515			88,760			89,778			91,270
Credit card	50,206			50,616			50,410			49,811			47,512
Total loans	9,207,469			9,128,172			8,995,895			8,839,404			8,766,918
Less:
Allowance for credit losses ⁽¹⁾	121,126			56,649			61,911			58,335			57,088
Net loans	9,086,343			9,071,523			8,933,984			8,781,069			8,709,830
Premises and equipment	215,545			215,171			215,671			211,714			213,208
Goodwill	937,771			937,710			899,888			879,726			878,541
Other intangibles	75,014			78,190			51,365			37,666			39,900
Accrued interest and other assets	805,824			776,045			681,174			563,773			532,544
Total Assets	$	14,524,422		$	14,460,288		$	14,320,514		$	14,102,733		$	13,952,551

LIABILITIES
Deposits
Interest-bearing demand	$	2,418,193		$	2,373,962		$	2,325,405		$	2,334,322		$	2,269,948
Savings	2,976,518			2,995,395			2,945,076			3,057,100			3,115,557
Time	2,196,080			2,214,174			2,234,227			2,220,724			2,224,587
Total interest-bearing deposits	7,590,791			7,583,531			7,504,708			7,612,146			7,610,092
Noninterest-bearing	2,643,240			2,638,908			2,513,458			2,484,214			2,457,587
Total deposits	10,234,031			10,222,439			10,018,166			10,096,360			10,067,679
Federal funds purchased and securities sold
under agreements to repurchase	164,093			206,800			185,156			126,872			103,147
FHLB short-term borrowings	1,189,765			952,625			1,112,091			982,993			913,974
Total short-term borrowings	1,353,858			1,159,425			1,297,247			1,109,865			1,017,121
Long-term debt	381,909			454,271			519,736			546,705			569,947
Total borrowed funds	1,735,767			1,613,696			1,816,983			1,656,570			1,587,068
Accrued interest and other liabilities	344,891			379,046			275,038			202,806			203,570
Total Liabilities	12,314,689			12,215,181			12,110,187			11,955,736			11,858,317

SHAREHOLDERS' EQUITY
Common stock	1,638,851			1,640,066			1,629,286			1,622,994			1,625,228
Retained earnings	660,108			691,236			662,899			635,629			610,737
Accumulated other comprehensive loss	31,200			13,986			11,985			(12,889		)	(39,796		)
Treasury stock, at cost	(120,426		)	(100,181		)	(93,843		)	(98,737		)	(101,935		)
Total Shareholders' Equity	2,209,733			2,245,107			2,210,327			2,146,997			2,094,234
Total Liabilities and Shareholders' Equity	$	14,524,422		$	14,460,288		$	14,320,514		$	14,102,733		$	13,952,551

(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.



FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)

	Quarterly Averages
	March 31, 2020					December 31, 2019					March 31, 2019					Linked Qtr. Income Variance									Comparable Qtr. Income Variance
	Balance			Yield		Balance			Yield		Balance			Yield		Rate			Volume			Total			Rate			Volume			Total
Earning assets
Investments:
Investment securities	$	3,115,723		3.04	%	$	3,102,867		3.16	%	$	3,355,732		3.44	%	$	(934	)	$	(161	)	$	(1,095	)	$	(3,368	)	$	(1,538	)	$	(4,906	)
Interest-bearing deposits with other banks	39,332			1.45	%	36,672			1.81	%	34,709			2.45	%	(33		)	8			(25		)	(86		)	18			(68		)
Gross loans ⁽¹⁾	9,220,643			5.04	%	9,149,222			5.33	%	8,773,310			5.69	%	(6,661		)	(366		)	(7,027		)	(14,108		)	6,827			(7,281		)
Total earning assets	12,375,698			4.52	%	12,288,761			4.77	%	12,163,751			5.06	%	(7,628		)	(519		)	(8,147		)	(17,562		)	5,307			(12,255		)

Nonearning assets
Allowance for credit losses	(121,126		)			(56,649		)			(57,088		)
Cash and due from banks	235,696					221,060					181,695
Accrued interest and other assets	2,034,154					2,007,116					1,664,193
Total assets	$	14,524,422				$	14,460,288				$	13,952,551

Interest-bearing liabilities
Deposits:
Interest-bearing demand	$	2,418,193		0.45	%	$	2,373,962		0.53	%	$	2,269,948		0.50	%
Savings	2,976,518			0.45	%	2,995,395			0.60	%	3,115,557			0.76	%
Time	2,196,080			1.88	%	2,214,174			2.03	%	2,224,587			1.94	%
Total interest-bearing deposits	7,590,791			0.86	%	7,583,531			1.00	%	7,610,092			1.03	%	$	(2,497	)	$	(164	)	$	(2,661	)	$	(3,017	)	$	139		$	(2,878	)
Borrowed funds
Short-term borrowings	1,353,858			1.51	%	1,159,425			1.86	%	1,017,121			2.38	%	(1,026		)	683			(343		)	(2,180		)	1,307			(873		)
Long-term debt	381,909			3.96	%	454,271			3.75	%	569,947			3.59	%	241			(764		)	(523		)	523			(1,794		)	(1,271		)
Total borrowed funds	1,735,767			2.05	%	1,613,696			2.39	%	1,587,068			2.81	%	(785		)	(81		)	(866		)	(1,657		)	(487		)	(2,144		)
Total interest-bearing liabilities	9,326,558			1.08	%	9,197,227			1.24	%	9,197,160			1.33	%	(3,282		)	(245		)	(3,527		)	(4,674		)	(348		)	(5,022		)

Noninterest-bearing liabilities
Noninterest-bearing demand deposits	2,643,240					2,638,908					2,457,587
Other liabilities	344,891					379,046					203,570
Shareholders' equity	2,209,733					2,245,107					2,094,234
Total liabilities & shareholders' equity	$	14,524,422				$	14,460,288				$	13,952,551

Net interest income	$	114,282				$	118,902				$	121,515				$	(4,346	)	$	(274	)	$	(4,620	)	$	(12,888	)	$	5,655		$	(7,233	)
Net interest spread				3.44	%				3.53	%				3.73	%
Net interest margin				3.71	%				3.84	%				4.05	%

Tax equivalent adjustment				0.06	%				0.05	%				0.05	%
Net interest margin (fully tax equivalent)				3.77	%				3.89	%				4.10	%


⁽¹⁾ Loans held for sale and nonaccrual loans are included in gross loans.



FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)


	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2020			2019			2019			2019			2019
ALLOWANCE FOR CREDIT LOSS ACTIVITY
Balance at beginning of period, prior to adoption of ASC 326	$	57,650		$	56,552		$	61,549		$	56,722		$	56,542
Impact of adopting ASC 326	61,505			0			0			0			0
Provision for credit losses	23,880			4,629			5,228			6,658			14,083
Gross charge-offs
Commercial and industrial	1,091			2,919			9,556			1,873			12,328
Lease financing	0			62			0			0			100
Construction real estate	0			0			0			0			0
Commercial real estate	4			1,854			535			86			1,214
Residential real estate	115			167			278			150			82
Home equity	267			807			627			689			468
Installment	61			31			65			78			49
Credit card	311			319			598			289			341
Total gross charge-offs	1,849			6,159			11,659			3,165			14,582
Recoveries
Commercial and industrial	2,000			1,796			556			291			240
Lease financing	0			0			0			0			0
Construction real estate	0			0			0			5			63
Commercial real estate	234			439			347			254			73
Residential real estate	52			72			64			101			36
Home equity	339			243			335			572			185
Installment	31			49			93			61			48
Credit card	43			29			39			50			34
Total recoveries	2,699			2,628			1,434			1,334			679
Total net charge-offs	(850		)	3,531			10,225			1,831			13,903
Ending allowance for credit losses	$	143,885		$	57,650		$	56,552		$	61,549		$	56,722

NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial and industrial	(0.15		)%	0.18		%	1.42		%	0.25		%	1.95		%
Lease financing	0.00		%	0.27		%	0.00		%	0.00		%	0.45		%
Construction real estate	0.00		%	0.00		%	0.00		%	0.00		%	(0.05		)%
Commercial real estate	(0.02		)%	0.14		%	0.02		%	(0.02		)%	0.12		%
Residential real estate	0.02		%	0.04		%	0.08		%	0.02		%	0.02		%
Home equity	(0.04		)%	0.29		%	0.15		%	0.06		%	0.14		%
Installment	0.15		%	(0.08		)%	(0.13		)%	0.08		%	0.00		%
Credit card	2.15		%	2.27		%	4.40		%	1.92		%	2.62		%
Total net charge-offs	(0.04		)%	0.15		%	0.45		%	0.08		%	0.64		%

COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans ⁽¹⁾
Commercial and industrial	$	21,126		$	24,346		$	28,358		$	18,502		$	19,263
Lease financing	222			223			284			295			301
Construction real estate	0			0			5			6			7
Commercial real estate	10,050			7,295			14,889			15,981			21,082
Residential real estate	11,163			10,892			11,655			11,627			13,052
Home equity	5,821			5,242			5,427			4,745			5,581
Installment	145			167			75			195			170
Nonaccrual loans	48,527			48,165			60,693			51,351			59,456
Accruing troubled debt restructurings (TDRs)	22,206			11,435			18,450			37,420			22,817
Total nonperforming loans	70,733			59,600			79,143			88,771			82,273
Other real estate owned (OREO)	1,467			2,033			1,613			1,421			1,665
Total nonperforming assets	72,200			61,633			80,756			90,192			83,938
Accruing loans past due 90 days or more	120			201			287			107			178
Total underperforming assets	$	72,320		$	61,834		$	81,043		$	90,299		$	84,116
Total classified assets	$	124,510		$	89,250		$	132,500		$	147,753		$	142,014

CREDIT QUALITY RATIOS
Allowance for credit losses to
Nonaccrual loans	296.51		%	119.69		%	93.18		%	119.86		%	95.40		%
Nonperforming loans	203.42		%	96.73		%	71.46		%	69.33		%	68.94		%
Total ending loans	1.55		%	0.63		%	0.62		%	0.69		%	0.64		%
Nonperforming loans to total loans	0.76		%	0.65		%	0.87		%	0.99		%	0.93		%
Nonperforming assets to
Ending loans, plus OREO	0.78		%	0.67		%	0.89		%	1.00		%	0.95		%
Total assets	0.48		%	0.42		%	0.56		%	0.62		%	0.60		%
Nonperforming assets, excluding accruing TDRs to
Ending loans, plus OREO	0.54		%	0.55		%	0.69		%	0.59		%	0.69		%
Total assets	0.33		%	0.35		%	0.43		%	0.37		%	0.43		%
Classified assets to total assets	0.83		%	0.62		%	0.92		%	1.02		%	1.01		%

(1) Nonaccrual loans include nonaccrual TDRs of $18.4 million, $18.5 million, $21.5 million, $11.0 million, and $13.1 million, as of March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, respectively.



FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)

	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2020			2019			2019			2019			2019
PER COMMON SHARE
Market Price
High	$	25.52		$	26.04		$	25.49		$	25.80		$	28.56
Low	$	12.67		$	23.24		$	22.37		$	22.16		$	23.02
Close	$	14.91		$	25.44		$	24.48		$	24.22		$	24.06

Average shares outstanding - basic	97,736,690			98,684,706			98,517,025			98,083,799			97,926,088
Average shares outstanding - diluted	98,356,214			99,232,167			99,077,723			98,648,384			98,436,311
Ending shares outstanding	97,968,958			98,490,998			100,094,819			98,647,690			98,613,872

Total shareholders' equity	$	2,179,383		$	2,247,705		$	2,261,313		$	2,188,189		$	2,130,419

REGULATORY CAPITAL	Preliminary
Common equity tier 1 capital	$	1,243,152		$	1,245,746		$	1,253,803		$	1,281,406		$	1,246,004
Common equity tier 1 capital ratio	11.27		%	11.30		%	11.52		%	12.00		%	12.03		%
Tier 1 capital	$	1,285,705		$	1,288,185		$	1,296,399		$	1,323,905		$	1,287,757
Tier 1 ratio	11.66		%	11.69		%	11.91		%	12.40		%	12.43		%
Total capital	$	1,493,100		$	1,475,813		$	1,482,708		$	1,515,382		$	1,474,723
Total capital ratio	13.54		%	13.39		%	13.62		%	14.20		%	14.24		%
Total capital in excess of minimum requirement	$	335,229		$	318,315		$	339,935		$	394,571		$	387,048
Total risk-weighted assets	$	11,027,347		$	11,023,795		$	10,883,554		$	10,674,393		$	10,358,805
Leverage ratio	9.49		%	9.58		%	9.75		%	10.02		%	9.84		%

OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets	14.47		%	15.49		%	15.62		%	15.16		%	15.14		%
Ending tangible shareholders' equity to ending tangible assets	8.25		%	9.07		%	9.17		%	9.34		%	9.15		%
Average shareholders' equity to average assets	15.21		%	15.53		%	15.43		%	15.22		%	15.01		%
Average tangible shareholders' equity to average tangible assets	8.79		%	9.07		%	9.35		%	9.26		%	8.95		%

REPURCHASE PROGRAM ⁽¹⁾
Shares repurchased	880,000			1,609,778			1,143,494			0			0
Average share repurchase price	$	18.96		$	24.13		$	23.94		N/A			N/A
Total cost of shares repurchased	$	16,686		$	38,846		$	27,372		N/A			N/A

⁽¹⁾Represents share repurchases as part of publicly announced plans.

N/A = Not applicable

FIRST FINANCIAL BANCORP /OH/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 20, 2020

Attached files

FIRST FINANCIAL BANCORP /OH/ Reports