First Financial Bancorp. (FFBC) 8-K First Financial Bancorp Reports First-Quarter Earnings

EXHIBIT 99.1

News News News News News News

April 17, 2003

First Financial Bancorp Reports First-Quarter Earnings

HAMILTON, Ohio – First Financial Bancorp (Nasdaq: FFBC) president and chief executive officer, Stanley N. Pontius, today announced first-quarter 2003 earnings of $10,631,000 or 24 cents in diluted earnings per share, compared to $12,401,000 or 27 cents for the same period in 2002. This represents an 11.1 percent decrease in earnings per share from the first quarter of 2002.

Return on assets was 1.16 percent for 2003, compared to 1.32 percent for 2002. Return on average shareholders’ equity was 11.5 percent for the first quarter of 2003, versus 12.9 percent for the comparable period in 2002.

“While our earnings have decreased relative to the first quarter of 2002, we remain cautiously optimistic that the economic factors that contributed to this decrease are stabilizing,” Pontius said. “Bancorp, like its peer banks, continues to be challenged by two fundamental issues — maintaining growth in net interest income in the current interest rate environment and the impact of economic uncertainty on credit quality.”

(The preceding overview of First Financial Bancorp’s earnings is supplemented with the following detail:)

Net Interest Income:

Net interest income for the first quarter of 2003 was $3.8 million or 9.3 percent less than the first quarter of 2002. The major contributing factor to the decline in net interest income was net interest margin compression due to the asset sensitive position of Bancorp’s balance sheet. Bancorp’s net interest margin decreased to 4.37 percent in the first quarter of 2003 from 4.72 percent in the first quarter of 2002. Bancorp also reviews net interest margin on a fully tax equivalent (non-GAAP) basis for peer comparison. Bancorp’s net interest margin on a fully tax equivalent basis decreased to 4.48 percent in the

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first quarter of 2003 compared with a 4.85 percent margin in the first quarter of 2002. This margin compression was due to continued downward repricing of assets without a point-for-point decrease in deposit liability rates. The continued repricing of adjustable and variable rate loans was the primary driver in loan interest in the first quarter of 2003 that was $7.4 million or 13.6 percent lower than the comparable period a year ago. The effect of the 50 basis point (10.5 percent) decrease in the prime lending rate impacted approximately 20 percent of the existing loan portfolio during the first quarter of 2003. Investment income declined by $1.4 million or 16.6 percent from the quarter a year ago. As interest rates declined, cash flows from mortgage-related investment prepayments and called securities accelerated, causing a redeployment of funds at lower yields. In total, interest income declined by $8.9 million. A decline in total interest expense of $5.1 million or 23.4 percent in the first quarter of 2003 versus first quarter of 2002 did not offset the decline in interest income. As a result of strategies to manage interest rate risk, Bancorp also increased the amount of its long-term borrowings, thereby increasing the cost of its funding on a relative basis.

A decrease in loan balances also contributed to lower net interest income through reduced interest income. Average outstanding loan balances for the quarter were 2.1 percent lower than the prior year. Additionally, the margin and net interest income were negatively impacted by fees on loans which were $217 thousand or 11.7 percent lower in the first quarter of 2003 versus 2002. On a linked-quarter basis, the residential real estate portfolio increased $40 million, and that was comprised of both fixed rate and adjustable rate loan growth. That growth plus increases in commercial loans, offset decreases in construction, installment, credit card and leases, for total loan growth since December 2002 of $34 million or 1.2 percent.

Credit Quality:

The provision for loan loss expense for the first quarter of 2003 was $3.2 million compared to $5.6 million for the same period in 2002. Net charge-offs of $3.1 million for the first quarter were $2.4 million less than the $5.5 million in net charge-offs for the first quarter of 2002. The percentage of net charge-offs to average loans was 0.45 percent for the first quarter of 2003 compared with 0.80 percent for the same period in 2002.

Bancorp continued to maintain appropriate reserves with an allowance to ending loans ratio of 1.74 percent at quarter end versus 1.68 percent a year ago. Overall, it is management’s belief that the allowance for loan losses is adequate to absorb estimated probable credit losses.

Total nonperforming assets – which includes nonaccrual loans, restructured loans, and other real estate owned – increased to $33.2 million at the end of the first quarter of 2003 from $28.5 million at March 31, 2002.

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Nonaccrual loans decreased $1.6 million during the same period; however restructured loans increased by $5.8 million accounting for the majority of the increase in nonperforming assets.

On a linked quarter basis – first quarter 2003 compared to fourth quarter 2002 – total nonperforming assets increased $3.6 million or 12.1 percent. Total underperforming assets on a linked quarter basis increased less than one percent as loans delinquent over 90 days decreased by $3.2 million.

Bancorp’s level of nonperforming assets is reflective of the uncertain economy in the corporation’s primary markets in Ohio and Indiana. If the current economic conditions continue or decline, Bancorp could see a continued less-than-favorable impact on credit quality.

Noninterest Income:

First quarter 2003 noninterest income was $13,850,000, a decrease of 6.2 percent from the first quarter of 2002. Service charge income decreased $149,000 or 3.1 percent from the quarter a year ago. Trust revenues for the first quarter of 2003 were $279,000 or 7.0 percent less than the comparable period last year, primarily due to the effect of lower market values indicative of the overall stock market performance. The other category of noninterest income decreased $514,000 or 8.5 percent from a year ago, as gains on the sale of mortgage loans decreased $504,000. Included as a reduction in other income for the first quarter of 2003 were impairment charges of $188,000 against the mortgage-servicing asset in a valuation reserve. There were no such charges in the first quarter of 2002. Additionally, the first quarter of 2002 contained a $223,000 non-recurring life insurance gain.

Noninterest Expense:

Total noninterest expense increased less than 1 percent for the first quarter of 2003 over the first quarter of 2002. The single largest category of increase is salaries and employee benefits, up almost $400,000 due to increased healthcare costs and the addition of staff in support and risk management functions. The increase in salaries and employee benefits was approximately 6 percent, adjusting for Project Renaissance expenses in the first quarter of 2002. Data-processing expense was down $380,000 over 2002 due to the efficiencies gained through Project Renaissance.

Other Items:

Bancorp repurchased 447,400 shares of its common stock during the first quarter of 2003 under a previously approved and ongoing program for general corporate purposes.

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Also during the first quarter of 2003, Flagstone Insurance and Financial Services completed the cash purchase of Wilson Lawson Meyers Insurance Agency in Connersville, Indiana. Flagstone Insurance operates as an affiliate of Heritage Community Bank.

Bancorp has expanded the functionality of the investor-relations portion of its web site at www.ffbcoh.com by partnering with SNL Financial, LC, a leading provider of banking industry data and the IR WebLink product. Information regarding previous SEC filings and press releases, as well as historical stock price information and peer comparisons, can be accessed. Bancorp is committed to providing timely and useful information to the investment community and its shareholders.

A $3.7 billion publicly owned bank holding company with over 4,000 shareholders, First Financial Bancorp currently operates 8 banking affiliates in Ohio, Michigan, Kentucky, and Indiana with a total of 105 retail banking centers as well as an investment-advisor affiliate.

This release should be read in conjunction with the consolidated financial statements, notes, and tables attached and in the First Financial Bancorp Annual Report on Form 10-K for the year ended December 31, 2002. Management’s analysis may contain forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risk 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, the strength of the local economies in which operations are conducted, the effects of and changes in policies and laws of regulatory agencies, inflation, and interest rates. For further discussion of certain factors that may cause such forward-looking statements to differ materially from actual results, refer to the 2002 Form 10-K.

First Financial Bancorp
P.O. Box 476
Hamilton, OH 45012
Analyst Contact: C. Douglas Lefferson
513-867-4993
doug.lefferson@ffbc-oh.com
Media Contact: Cheryl R. Lipp
513-867-4929
cheryl.lipp@comfirst.com

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FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share data)
(Unaudited)

					Three months ended,
					Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
					2003			2002			2002			2002			2002
EARNINGS
Net interest income				��	$	37,236		$	39,447		$	40,583		$	41,681		$	41,046
Net earnings						10,631			11,601			10,802			13,431			12,401
Net earnings per share — basic					$	0.24		$	0.26		$	0.24		$	0.29		$	0.27
Net earnings per share — diluted					$	0.24		$	0.26		$	0.24		$	0.29		$	0.27
KEY RATIOS
Return on average assets						1.16	%		1.25	%		1.16	%		1.44	%		1.32	%
Return on average shareholders’ equity						11.52	%		12.22	%		11.10	%		13.92	%		12.93	%
Average shareholders’ equity to average assets						10.03	%		10.26	%		10.50	%		10.35	%		10.25	%
Net interest margin						4.37	%		4.60	%		4.70	%		4.81	%		4.72	%
Net interest margin (fully tax equivalent)						4.48	%		4.72	%		4.82	%		4.93	%		4.85	%
COMMON STOCK DATA
Average basic shares outstanding						44,893,511			45,217,538			45,686,803			46,129,716			46,504,814
Average diluted shares outstanding						45,048,972			45,369,400			45,812,452			46,214,803			46,678,785
Ending shares outstanding						44,709,604			45,003,923			45,458,525			45,926,107			46,344,961
Market price:
		High			$	17.19		$	18.87		$	20.00		$	20.31		$	17.82
		Low			$	15.26		$	15.99		$	15.90		$	15.80		$	15.65
		Close			$	15.86		$	16.39		$	17.81		$	19.57		$	15.72
Book value					$	8.34		$	8.39		$	8.49		$	8.40		$	8.22
Common dividend declared					$	0.15		$	0.15		$	0.15		$	0.15		$	0.15
AVERAGE BALANCE SHEET ITEMS
Loans less unearned income					$	2,765,970		$	2,751,664		$	2,777,657		$	2,789,773		$	2,824,667
Investment securities						650,619			605,729			634,160			645,240			626,323
Other earning assets						40,751			44,556			15,518			39,025			72,936
	Total earning assets					3,457,340			3,401,949			3,427,335			3,474,038			3,523,926
Total assets						3,730,744			3,670,699			3,678,706			3,736,305			3,796,324
Noninterest-bearing deposits						416,824			410,568			396,230			406,772			413,129
Interest-bearing deposits						2,487,612			2,487,086			2,498,098			2,571,163			2,623,456
	Total deposits					2,904,436			2,897,654			2,894,328			2,977,935			3,036,585
Borrowings						410,100			356,646			367,367			352,609			343,993
Shareholders’ equity						374,236			376,515			386,211			386,892			388,976
CREDIT QUALITY
Ending allowance for loan losses					$	48,305		$	48,177		$	48,890		$	47,709		$	46,876
Nonperforming assets:
	Nonaccrual					24,276			21,456			28,679			23,655			25,926
	Restructured					6,291			5,375			691			39			453
	OREO					2,636			2,792			1,619			2,181			2,112
		Total nonperforming assets				33,203			29,623			30,989			25,875			28,491
Loans delinquent over 90 days						3,575			6,818			7,360			4,752			3,698
Gross charge-offs:
	Commercial real estate					(112	)		(618	)		(56	)		(243	)		(108	)
	Commercial loans and leases					(1,699	)		(1,669	)		(2,479	)		(1,111	)		(3,693	)
	Consumer					(2,354	)		(2,844	)		(2,343	)		(2,009	)		(2,502	)
	All other					0			(13	)		(84	)		(18	)		(83	)
		Total gross charge-offs				(4,165	)		(5,144	)		(4,962	)		(3,381	)		(6,386	)
Recoveries:
	Commercial real estate					5			111			1			7			15
	Commercial loans and leases					432			1,763			438			214			421
	Consumer					642			567			512			545			389
	All other					0			49			3			44			13
		Total recoveries				1,079			2,490			954			810			838
			Total net charge-offs			(3,086	)		(2,654	)		(4,008	)		(2,571	)		(5,548	)
CREDIT QUALITY RATIOS
Allowance to ending loans, net of unearned income						1.74	%		1.75	%		1.76	%		1.71	%		1.68	%
Nonperforming assets to ending loans, net of unearned income plus OREO						1.19	%		1.08	%		1.11	%		0.93	%		1.02	%
90 days past due to loans, net of unearned income						0.13	%		0.25	%		0.26	%		0.17	%		0.13	%
Net charge-offs to average loans, net of unearned income						0.45	%		0.38	%		0.57	%		0.37	%		0.80	%

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands)
(Unaudited)

					Three months ended,
					Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
					2003		2002		2002		2002		2002
Interest income
	Loans, including fees				$	46,704	$	49,827	$	51,459	$	52,768	$	54,077
	Investment securities
		Taxable				5,258		5,505		6,208		6,708		6,450
		Tax-exempt				1,664		1,740		1,769		1,815		1,848
				Total investment securities interest		6,922		7,245		7,977		8,523		8,298
	Interest-bearing deposits with other banks					51		42		64		97		137
	Federal funds sold and securities purchased under agreements to resell					145		163		36		97		198
				Total interest income		53,822		57,277		59,536		61,485		62,710
Interest expense
	Deposits					12,084		13,580		14,826		15,867		17,823
	Short-term borrowings					451		380		539		421		387
	Long-term borrowings					3,931		3,731		3,588		3,516		3,454
	Corporation-obligated mandatorily redeemable capital securities of subsidiary trust					120		139		0		0		0
			Total interest expense			16,586		17,830		18,953		19,804		21,664
			Net interest income			37,236		39,447		40,583		41,681		41,046
	Provision for loan losses					3,214		1,941		5,189		3,404		5,640
		Net interest income after provision for loan losses				34,022		37,506		35,394		38,277		35,406
Noninterest income
	Service charges on deposit accounts					4,598		4,980		4,911		4,927		4,747
	Trust revenues					3,707		3,739		3,792		3,868		3,986
	Investment securities gains					28		80		0		5		4
	Other					5,517		4,788		5,683		5,158		6,031
			Total noninterest income			13,850		13,587		14,386		13,958		14,768
Noninterest expenses
	Salaries and employee benefits					18,191		17,644		18,021		18,159		17,795
	Net occupancy					2,078		2,139		1,901		2,003		1,930
	Furniture and equipment					1,801		2,170		2,029		1,785		1,745
	Data processing					1,487		1,630		2,306		2,014		1,867
	Deposit insurance					100		137		185		142		145
	State taxes					460		431		381		448		487
	Amortization of intangibles					201		201		211		212		223
	Other					7,441		10,013		9,234		7,657		7,267
			Total noninterest expenses			31,759		34,365		34,268		32,420		31,459
Income before income taxes						16,113		16,728		15,512		19,815		18,715
Income tax expense						5,482		5,127		4,710		6,384		6,314
			Net earnings		$	10,631	$	11,601	$	10,802	$	13,431	$	12,401

ADDITIONAL DATA — FULLY TAX EQUIVALENT NET INTEREST INCOME

Interest income		$	53,822	$	57,277	$	59,536	$	61,485	$	62,710
Tax equivalent adjustment			938		984		1,017		1,044		1,063
	Interest income — tax equivalent		54,760		58,261		60,553		62,529		63,773
Interest expense			16,586		17,830		18,953		19,804		21,664
	Net interest income — tax equivalent	$	38,174	$	40,431	$	41,600	$	42,725	$	42,109

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)
(Unaudited)

					Mar. 31,			Dec. 31,			Mar. 31,
					2003			2002			2002
ASSETS
	Cash and due from banks				$	179,317		$	181,839		$	146,113
	Interest-bearing deposits with other banks					6,925			4,474			21,767
	Federal funds sold and securities purchased under agreements to resell					16,416			28,291			26,586
	Investment securities, held-to-maturity					20,620			21,571			22,470
	Investment securities, available-for-sale					673,620			605,345			625,752
	Loans
				Commercial		702,042			690,656*			759,778
				Real estate-construction		85,402			89,674			80,919
				Real estate-mortgage		1,408,345			1,368,207*			1,322,089
				Installment		547,986			556,975			578,626
				Credit card		20,355			22,068			20,772
				Lease financing		18,446			21,031			31,617
				Total loans		2,782,576			2,748,611			2,793,801
				Less
				Unearned income		334			523			1,442
				Allowance for loan losses		48,305			48,177			46,876
				Net loans		2,733,937			2,699,911			2,745,483
	Premises and equipment					56,337			56,348			60,215
	Goodwill					27,379			27,379			27,379
	Other intangibles					8,818			9,147			9,241
	Deferred income taxes receivable					6,386			4,107			1,357
	Other assets					91,233			91,540			84,450
				Total Assets	$	3,820,988		$	3,729,952		$	3,770,813
LIABILITIES
	Deposits
			Noninterest-bearing		$	431,169		$	422,453		$	422,007
			Interest-bearing			2,517,665			2,499,981			2,588,328
				Total deposits		2,948,834			2,922,434			3,010,335
	Short-term borrowings					133,282			95,180			86,017
	Long-term borrowings					318,053			290,051			261,285
	Corporation-obligated mandatorily redeemable capital securities of subsidiary trust					10,000			10,000			0
	Accrued interest and other liabilities					37,729			34,684			32,401
				Total Liabilities		3,447,898			3,352,349			3,390,038
SHAREHOLDERS’ EQUITY
		Common stock				395,946			396,252			396,613
		Retained earnings				42,914			39,005			23,679
		Accumulated comprehensive income				6,407			8,189			2,896
		Restricted stock awards				(5,902	)		(4,022	)		(5,215	)
		Treasury stock, at cost				(66,275	)		(61,821	)		(37,198	)
				Total Shareholders’ Equity		373,090			377,603			380,775
				Total Liabilities and Shareholders’ Equity	$	3,820,988		$	3,729,952		$	3,770,813

ADDITIONAL DATA — RISK BASED CAPITAL

	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2003			2002			2002			2002			2002
Tier 1 Capital	$	341,739		$	344,090		$	350,918		$	345,037		$	346,040
Tier 1 Ratio		12.66	%		12.62	%		12.89	%		12.66	%		12.63	%
Total Capital	$	375,662		$	378,339		$	385,137		$	379,265		$	380,447
Total Capital Ratio		13.92	%		13.88	%		14.14	%		13.92	%		13.88	%
Total Risk-Adjusted Assets	$	2,699,431		$	2,726,025		$	2,722,820		$	2,724,721		$	2,740,088
Leverage Ratio		9.24	%		9.46	%		9.62	%		9.31	%		9.09	%

* Includes reclassification of approximately $70 million from Commercial to Real estate-mortgage during the period.

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

					Quarterly Averages
					Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
					2003			2002			2002			2002			2002
ASSETS
	Cash and due from banks				$	140,351		$	141,484		$	122,045		$	126,820		$	136,624
	Interest-bearing deposits with other banks					9,294			5,605			9,900			16,505			25,058
	Federal funds sold and securities purchased under agreements to resell					31,457			38,951			5,618			22,520			47,878
	Investment securities					650,619			605,729			634,160			645,240			626,323
	Loans
			Commercial			701,288			683,576	*		741,938	*		796,984			774,872
			Real estate-construction			86,466			107,238			71,439			88,092			77,964
			Real estate-mortgage			1,388,330			1,351,743	*		1,342,129	*		1,294,918			1,337,121
			Installment			549,668			565,887			575,502			560,402			580,726
			Credit card			20,692			20,973			21,093			20,893			21,402
			Lease financing			19,911			22,862			26,442			29,725			34,298
				Total loans		2,766,355			2,752,279			2,778,543			2,791,014			2,826,383
			Less
				Unearned income		385			615			886			1,241			1,716
				Allowance for loan losses		48,625			50,101			48,563			47,208			47,461
				Net loans		2,717,345			2,701,563			2,729,094			2,742,565			2,777,206
	Premises and equipment					56,468			56,955			57,927			59,094			60,466
	Deferred income tax					3,958			0			0			0			0
	Other assets					121,252			120,412			119,962			123,561			122,769
		Total Assets			$	3,730,744		$	3,670,699		$	3,678,706		$	3,736,305		$	3,796,324
LIABILITIES
	Deposits
			Interest-bearing		$	298,561		$	262,957		$	273,064		$	312,239		$	327,592
			Savings			850,866			873,547			864,761			843,371			812,203
			Time			1,338,185			1,350,582			1,360,273			1,415,553			1,483,661
				Total interest-bearing deposits		2,487,612			2,487,086			2,498,098			2,571,163			2,623,456
			Noninterest-bearing			416,824			410,568			396,230			406,772			413,129
				Total deposits		2,904,436			2,897,654			2,894,328			2,977,935			3,036,585
	Borrowed funds
			Short-term borrowings			102,310			82,149			107,802			87,757			82,858
			Long-term borrowings			307,790			274,497			259,565			264,852			261,135
				Total borrowed funds		410,100			356,646			367,367			352,609			343,993
			Corporation-obligated mandatorily redeemable capital securities of subsidiary trust			10,000			10,002			543			0			0
	Deferred income tax					0			2,019			2,790			231			633
	Accrued interest and other liabilities					31,972			27,863			27,467			18,638			26,137
	Total Liabilities					3,356,508			3,294,184			3,292,495			3,349,413			3,407,348
SHAREHOLDERS’ EQUITY
	Common stock					396,033			396,257			396,276			396,486			396,655
	Retained earnings					38,881			31,874			33,531			31,133			25,069
	Accumulated comprehensive income					8,379			10,655			10,559			5,648			6,477
	Restricted stock awards					(5,625	)		(4,193	)		(4,545	)		(4,996	)		(4,525	)
	Treasury stock, at cost					(63,432	)		(58,078	)		(49,610	)		(41,379	)		(34,700	)
	Total Shareholders’ Equity					374,236			376,515			386,211			386,892			388,976
	Total Liabilities and Shareholders’ Equity				$	3,730,744		$	3,670,699		$	3,678,706		$	3,736,305		$	3,796,324

* Includes reclassification of approximately $70 million from Commercial to Real estate-mortgage during the third quarter of 2002, which affected the averages for the third and fourth quarters of 2002 by approximately $35 million each.