EXHIBIT 99.1
News News News News News News
January 20, 2005
First Financial Bancorp Reports Fourth-Quarter Earnings
| | • | 2004 earnings per share up 10.6 percent over 2003 |
| |
| | • | Continued improvement in credit quality |
HAMILTON, Ohio — First Financial Bancorp (Nasdaq: FFBC) chairman of the board, Bruce E. Leep, and president and chief executive officer, Claude E. Davis, today announced fourth-quarter 2004 earnings of $10,009,000 or 23 cents in diluted earnings per share, compared to $8,841,000 or 20 cents in diluted earnings per share for the same period in 2003, a 15.00 percent increase.
Bancorp also announced year-to-date earnings of $41,118,000 or 94 cents in diluted earnings per share, compared to $37,906,000 or 85 cents in diluted earnings per share for the same period in 2003. This represents a 10.59 percent increase in year-to-date earnings per share.
Return on average assets for the fourth quarter was 1.03 percent for 2004, compared to 0.90 percent for the same period in 2003. Return on average shareholders’ equity was 10.74 percent for the fourth quarter of 2004, versus 9.62 percent for the comparable period in 2003. Year-to-date return on assets was 1.05 percent, compared to 0.99 percent in 2003, while return on average shareholders’ equity was 11.21 percent versus 10.27 percent. Bancorp continues to maintain strong capital with a fourth-quarter 2004 average equity to assets ratio of 9.55 percent.
Davis, who joined Bancorp in October of 2004, said,“I am encouraged by the improvement in credit quality and the opportunity for continued operational and profitability improvement. At this time, I am working with the board of directors on developing a new strategic plan that will be shared with shareholders and employees later in the first quarter of 2005.
“Our improved results in 2004 are an indication of the validity of the product delivery model of community-bank-like service and local decision making at the point of customer contact — a model that has served First Financial Bancorp well in the past and will continue in the future.”
(The preceding overview of First Financial Bancorp’s earnings is supplemented with the following detail:)
Regionalization Update:
Previously announced plans to merge Citizens First State Bank and Fidelity Federal Savings Bank into Community First Bank & Trust, headquartered in Celina, Ohio, creating a $1.1 billion bank, remain on target for the first quarter of 2005, subject to regulatory approval. Additionally, previously announced plans to merge Heritage Community Bank into First Financial Bank, headquartered in Hamilton, Ohio, creating a $2 billion bank also remain on schedule for the first quarter of 2005, pending regulatory approval.
Net Interest Income:
Net interest income for the fourth quarter of 2004 was $35.4 million, compared to $34.1 million in the fourth quarter of 2003, an increase of 3.80 percent or $1.3 million. Net interest income on a linked-quarter basis (fourth quarter of 2004 compared to third quarter of 2004) decreased $812,000 or 2.24 percent. Net interest income for 2004 on a year-to-date basis decreased $1.1 million or 0.78 percent from the comparable period in 2003. Bancorp has continued its strategic decision to lengthen the maturity of its retail deposits, thus increasing interest expense and reducing net interest income. By adopting this strategy, Bancorp expects to improve and stabilize the impact of deposit costs. Bancorp’s net interest margin increased to 3.91 percent in the fourth quarter of 2004 from 3.74 percent in the fourth quarter of 2003 due primarily to a 16 basis-point effect of the accelerated amortization of premiums associated with a mobile home loan sale in the fourth quarter of 2003. Linked-quarter net interest margin has decreased 2 basis points from 3.93 percent to 3.91 due to the strategic decision to lengthen the maturities of certain retail deposits in a relatively low interest rate environment. Year-to-date net interest margin was 3.96 percent compared to 4.06 percent in 2003.
Average total loans for the fourth quarter of 2004 increased 3.36 percent and year-to-date average total loans net of unearned income increased 2.55 percent from the comparable period a year ago. This increase was achieved even though Bancorp sold approximately $46 million in loan balances through branch sales, a distressed loan portfolio sale, and a mobile home loan portfolio sale since the third quarter of 2003. Primarily, loan growth has been centered in the commercial real estate category as demand improved, primarily in the southwestern Ohio market. On a linked-quarter basis, average outstanding loan balances decreased 0.70 percent, due to the fourth quarter impact of the sale of $28 million of retail real estate mortgage loans.
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Average deposit balances for the fourth quarter decreased $16.7 million or 0.57 percent and year-to-date average deposits decreased $19.3 million or 0.65 from the comparable period a year ago. On a linked quarter basis, average deposits have increased 0.32% marked by modest growth in the non-interest bearing category and the time deposit category. Since the third quarter of 2003, deposit balances have been adversely impacted by the sale of two banking centers that reduced deposit balances by $48 million.
Credit Quality:
The provision for loan loss expense for the fourth quarter of 2004 was $343,000 compared to $7.4 million for the same period in 2003. This is due primarily to the credit quality differences in the two periods and the analysis of the overall risk embedded in the loan portfolio. Net charge-offs of $2.2 million for the fourth quarter were $6.1 million less than the $8.3 million in net charge-offs for the fourth quarter of 2003. Year-to-date provision expense was $7.3 million or $11.7 million less than 2003. Year-to-date net charge-offs were $8.3 million in 2004, down $11.0 million from the $19.3 million recorded in 2003. The fourth quarter of 2004 charge-offs are higher than the linked quarter and mark a return to charge- off levels toward the upper boundary of a normal range, and levels that are consistent with our lending mix. Decreases in commercial and commercial real estate loans charged-off and continued strong recoveries on commercial and consumer loans positively impacted net charge-offs for the year. The percentage of net charge-offs to average loans for the fourth quarter of 2004 was 0.30 percent compared to 1.18 percent for the same period in 2003. The percentage of net charge-offs to average loans was 0.29 percent for year-to-date 2004, compared to 0.69 percent for the same period in 2003.
Bancorp continued to maintain appropriate reserves with an allowance to ending loans ratio of 1.61 percent at quarter end versus 1.71 percent for the same quarter a year ago. It is management’s belief that the allowance for loan losses of $46.7 million is adequate to absorb inherent credit losses.
The nonperforming assets to ending loans ratio decreased to 0.83 percent as of December 31, 2004, from 1.18 percent at the end of the fourth quarter of 2003. Total nonperforming assets — which includes nonaccrual loans, restructured loans, and other real estate owned — decreased 27.47 percent to $23.9 million at the end of the fourth quarter of 2004 from $33.0 million at December 31, 2003. Nonaccrual loans decreased $5.9 million, restructured loans decreased $1.7 million, and other real estate owned decreased $1.5 million. On a linked-quarter basis, total nonperforming assets decreased $3.3 million or 12.23 percent. Bancorp’s level of nonperforming assets has improved over the last five quarters.
Loans delinquent over 90 days increased 9.67 percent to $2.1 million at the end of the fourth quarter of 2004 from $1.9 million at the end of the fourth quarter of 2003.
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This overall improvement in credit quality was positively influenced by signs of economic recovery, strategies such as the fourth-quarter 2003 distressed loan sale, and improved credit risk and risk management disciplines. Given the current economic environment, Bancorp expects continued stable to improving credit quality trends through 2005, although moderate fluctuations could occur as Bancorp continues to work through expected credit issues.
Noninterest Income:
Fourth-quarter 2004 noninterest income was $14.7 million, a decrease of $4.3 million or 22.85 percent from the fourth quarter of 2003 due to the effects of the fourth quarter 2003 sale of the Sunman, Indiana office and a non-recurring life insurance gain of a combined $5.7 million reflected in the other category of noninterest income. Service charge income decreased $397,000 or 8.07 percent from the same quarter a year ago largely due to decreased insufficient funds charges. Trust revenues for the fourth quarter of 2004 increased 15.30 percent or $558,000 more than the comparable period last year as a result of year-over-year market value improvements, improved sales efforts, and service-fee changes on certain accounts. The other category of noninterest income decreased $4,517,000 or 43.19 percent from a year ago. Also, included in other noninterest income for the fourth quarter of 2004 was the recapture of impairment reserve on the mortgage-servicing assets of approximately $325,000 compared to an impairment charge of $24,000 in 2003, a net change of $349,000. Gains on the sale of mortgage loans were $441,000 for the fourth quarter of 2004 versus $681,000 for the comparable period in 2003, a change of $240,000.
Year-to-date noninterest income decreased 3.49 percent to $60.0 million in 2004. This decrease was the result of the gain reported on the sale of two banking centers in 2003, partially offset by an increase in trust fees, additional life insurance income, and increased brokerage fees. Recapture of impairment reserve on the mortgage-servicing assets was $1.3 million in 2004, compared with impairment charges of $1.7 million in 2003, a net change of $3.0 million. This positive change was also offset on a year-to-date basis by a decrease in gains on the sale of mortgage loans from $5.2 million in 2003 to $1.6 million in 2004.
Noninterest Expense:
Total noninterest expense increased $1.6 million or 4.71 percent for the fourth quarter of 2004 from the fourth quarter of 2003. Salaries and employee benefits increased $1.0 million or 5.59 percent due to severance charges of approximately $849,000 in the fourth quarter of 2004 related largely to the departure of one Bancorp executive and severance associated with the Heritage Community Bank merger. Net occupancy expenses for the fourth quarter of 2004 increased $314,000 or 16.77 percent as a result of
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increased building rent, depreciation, and related expenses. Data-processing expense for the quarter decreased $245,000 or 12.03 percent. As previously announced, Bancorp also recognized a charge of $831,000 for the Heritage merger.
Year-to-date noninterest expense for 2004 was $3.3 million or 2.51 percent more than 2003. Other noninterest expense on a year-to-date basis was impacted by costs associated with the mobile home loan sale completed in the first quarter of 2004, direct consulting and increased staffing for Sarbanes-Oxley Section 404 internal control documentation and testing, consolidation activities outside the scope of Project Renaissance, and the search for a new chief executive officer.
Earnings Conference Call and Webcast
On January 20, 2005, Bancorp will host an earnings conference call with stock analysts that will be webcast live at 3:00 p.m. EST. The presenters will be Claude E. Davis, president and chief executive officer, and C. Douglas Lefferson, executive vice president and chief financial officer. Interested parties may listen to the conference call by telephoning 1-877-407-8289 (no passcode needed) or by logging on to the company’s website (http://ffbc-oh.com) for a live audio webcast of the call, clicking on the Investor Information section, and choosing the category of News. Listeners should allow an extra five minutes to be connected to the call or webcast.
The event will also be archived on the company’s website for one year. Anyone who wishes to hear a replay of the event by telephone may dial 1-877-660-6853, account# 1628, conference ID# 135040 between 6:30 p.m. EST on January 20, 2005 and 11:59 p.m. on January 27, 2005.
Other Items:
Bancorp repurchased 26,000 shares of its common stock during the fourth quarter of 2004 under a previously approved and ongoing program for general corporate purposes.
A $3.9 billion publicly owned bank holding company with over 4,000 shareholders, First Financial Bancorp currently operates 6 banking affiliates with a total of 107 retail banking centers in Ohio, Michigan, Kentucky, and Indiana, as well as an investment-advisor affiliate and an operations affiliate. Insurance services are offered through Flagstone Insurance and Financial Services.
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, 2003. 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 2003 Form 10-K.
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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 thousand, except per share)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Twelve months ended | |
| | | Dec. 31, | | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | | | December 31, | |
| | | 2004 | | | 2004 | | | 2004 | | | 2004 | | | 2003 | | | 2004 | | | 2003 | |
EARNINGS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 35,389 | | | $ | 36,201 | | | $ | 36,000 | | | $ | 36,157 | | | $ | 34,093 | | | $ | 143,747 | | | $ | 144,881 | |
| Net earnings | | | 10,009 | | | | 10,824 | | | | 10,337 | | | | 9,948 | | | | 8,841 | | | | 41,118 | | | | 37,906 | |
| Net earnings per share - basic | | $ | 0.23 | | | $ | 0.25 | | | $ | 0.24 | | | $ | 0.23 | | | $ | 0.20 | | | $ | 0.94 | | | $ | 0.85 | |
| Net earnings per share - diluted | | $ | 0.23 | | | $ | 0.25 | | | $ | 0.24 | | | $ | 0.23 | | | $ | 0.20 | | | $ | 0.94 | | | $ | 0.85 | |
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KEY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 1.03 | % | | | 1.09 | % | | | 1.06 | % | | | 1.03 | % | | | 0.90 | % | | | 1.05 | % | | | 0.99 | % |
| Return on average shareholders’ equity | | | 10.74 | % | | | 11.81 | % | | | 11.40 | % | | | 10.88 | % | | | 9.62 | % | | | 11.21 | % | | | 10.27 | % |
| Average shareholders’ equity to average assets | | | 9.55 | % | | | 9.27 | % | | | 9.33 | % | | | 9.44 | % | | | 9.38 | % | | | 9.40 | % | | | 9.62 | % |
| Net interest margin | | | 3.91 | % | | | 3.93 | % | | | 3.98 | % | | | 4.00 | % | | | 3.74 | % | | | 3.96 | % | | | 4.06 | % |
| Net interest margin (fully tax equivalent) | | | 3.99 | % | | | 4.02 | % | | | 4.07 | % | | | 4.10 | % | | | 3.84 | % | | | 4.04 | % | | | 4.16 | % |
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COMMON STOCK DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average basic shares outstanding | | | 43,708,800 | | | | 43,750,598 | | | | 43,868,314 | | | | 43,924,139 | | | | 43,993,558 | | | | 43,818,779 | | | | 44,370,917 | |
| Average diluted shares outstanding | | | 43,762,371 | | | | 43,817,398 | | | | 43,951,016 | | | | 43,967,599 | | | | 44,012,803 | | | | 43,880,412 | | | | 44,422,852 | |
| Ending shares outstanding | | | 43,677,236 | | | | 43,695,439 | | | | 43,810,651 | | | | 43,924,139 | | | | 43,939,018 | | | | 43,677,236 | | | | 43,939,018 | |
| Market price: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 17.90 | | | $ | 18.78 | | | $ | 18.47 | | | $ | 18.82 | | | $ | 16.92 | | | $ | 18.82 | | | $ | 17.19 | |
| Low | | $ | 16.90 | | | $ | 16.71 | | | $ | 15.61 | | | $ | 16.29 | | | $ | 15.14 | | | $ | 15.61 | | | $ | 14.67 | |
| Close | | $ | 17.50 | | | $ | 17.08 | | | $ | 17.72 | | | $ | 18.50 | | | $ | 15.95 | | | $ | 17.50 | | | $ | 15.95 | |
| Book value | | $ | 8.50 | | | $ | 8.50 | | | $ | 8.24 | | | $ | 8.44 | | | $ | 8.34 | | | $ | 8.50 | | | $ | 8.34 | |
| Common dividend declared | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.60 | | | $ | 0.60 | |
| |
AVERAGE BALANCE SHEET ITEMS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans less unearned income | | $ | 2,900,008 | | | $ | 2,920,472 | | | $ | 2,859,043 | | | $ | 2,819,711 | | | $ | 2,805,667 | | | $ | 2,875,002 | | | $ | 2,803,448 | |
| Investment securities | | | 700,235 | | | | 729,627 | | | | 767,667 | | | | 799,823 | | | | 798,727 | | | | 749,150 | | | | 744,201 | |
| Other earning assets | | | 4,926 | | | | 9,818 | | | | 13,827 | | | | 12,279 | | | | 13,559 | | | | 10,197 | | | | 20,855 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total earning assets | | | 3,605,169 | | | | 3,659,917 | | | | 3,640,537 | | | | 3,631,813 | | | | 3,617,953 | | | | 3,634,349 | | | | 3,568,504 | |
| Total assets | | | 3,882,052 | | | | 3,932,743 | | | | 3,907,566 | | | | 3,894,900 | | | | 3,886,012 | | | | 3,904,332 | | | | 3,838,688 | |
| Noninterest-bearing deposits | | | 432,775 | | | | 409,237 | | | | 405,098 | | | | 395,894 | | | | 399,611 | | | | 410,807 | | | | 403,929 | |
| Interest-bearing deposits | | | 2,504,032 | | | | 2,518,080 | | | | 2,514,194 | | | | 2,530,912 | | | | 2,553,934 | | | | 2,516,773 | | | | 2,542,920 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 2,936,807 | | | | 2,927,317 | | | | 2,919,292 | | | | 2,926,806 | | | | 2,953,545 | | | | 2,927,580 | | | | 2,946,849 | |
| Borrowings | | | 517,010 | | | | 585,529 | | | | 564,710 | | | | 542,380 | | | | 516,952 | | | | 552,401 | | | | 474,230 | |
| Shareholders’ equity | | | 370,722 | | | | 364,495 | | | | 364,574 | | | | 367,628 | | | | 364,653 | | | | 366,859 | | | | 369,239 | |
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CREDIT QUALITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ending allowance for loan losses | | $ | 46,718 | | | $ | 48,590 | | | $ | 47,824 | | | $ | 47,672 | | | $ | 47,771 | | | $ | 46,718 | | | $ | 47,771 | |
| Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual | | | 20,102 | | | | 22,203 | | | | 22,723 | | | | 26,586 | | | | 25,980 | | | | 20,102 | | | | 25,980 | |
| Restructured | | | 2,110 | | | | 2,344 | | | | 2,936 | | | | 3,373 | | | | 3,821 | | | | 2,110 | | | | 3,821 | |
| OREO | | | 1,730 | | | | 2,731 | | | | 2,215 | | | | 3,070 | | | | 3,207 | | | | 1,730 | | | | 3,207 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total nonperforming assets | | | 23,942 | | | | 27,278 | | | | 27,874 | | | | 33,029 | | | | 33,008 | | | | 23,942 | | | | 33,008 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans delinquent over 90 days | | | 2,053 | | | | 1,116 | | | | 721 | | | | 1,345 | | | | 1,872 | | | | 2,053 | | | | 1,872 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross charge-offs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate | | | (746 | ) | | | (166 | ) | | | (105 | ) | | | (631 | ) | | | (3,377 | ) | | | (1,648 | ) | | | (4,213 | ) |
| Commercial loans and leases | | | (987 | ) | | | (429 | ) | | | (560 | ) | | | (1,036 | ) | | | (3,650 | ) | | | (3,012 | ) | | | (9,920 | ) |
| Consumer | | | (1,484 | ) | | | (1,507 | ) | | | (2,622 | ) | | | (2,588 | ) | | | (2,447 | ) | | | (8,201 | ) | | | (9,109 | ) |
| All other | | | 38 | | | | (22 | ) | | | (2 | ) | | | (27 | ) | | | (8 | ) | | | (13 | ) | | | (64 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| Total gross charge-offs | | | (3,179 | ) | | | (2,124 | ) | | | (3,289 | ) | | | (4,282 | ) | | | (9,482 | ) | | | (12,874 | ) | | | (23,306 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recoveries: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate | | | 80 | | | | 10 | | | | 0 | | | | 34 | | | | 83 | | | | 124 | | | | 138 | |
| Commercial loans and leases | | | 350 | | | | 213 | | | | 467 | | | | 538 | | | | 561 | | | | 1,568 | | | | 1,538 | |
| Consumer | | | 559 | | | | 553 | | | | 723 | | | | 1,011 | | | | 498 | | | | 2,846 | | | | 2,269 | |
| All other | | | (25 | ) | | | 17 | | | | 8 | | | | 0 | | | | 9 | | | | 0 | | | | 13 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total recoveries | | | 964 | | | | 793 | | | | 1,198 | | | | 1,583 | | | | 1,151 | | | | 4,538 | | | | 3,958 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total net charge-offs | | | (2,215 | ) | | | (1,331 | ) | | | (2,091 | ) | | | (2,699 | ) | | | (8,331 | ) | | | (8,336 | ) | | | (19,348 | ) |
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CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance to ending loans, net of unearned income | | | 1.61 | % | | | 1.66 | % | | | 1.65 | % | | | 1.68 | % | | | 1.71 | % | | | 1.61 | % | | | 1.71 | % |
| Nonperforming assets to ending loans, net of unearned income plus OREO | | | 0.83 | % | | | 0.93 | % | | | 0.96 | % | | | 1.16 | % | | | 1.18 | % | | | 0.83 | % | | | 1.18 | % |
| 90 days past due to loans, net of unearned income | | | 0.07 | % | | | 0.04 | % | | | 0.02 | % | | | 0.05 | % | | | 0.07 | % | | | 0.07 | % | | | 0.07 | % |
| Net charge-offs to average loans, net of unearned income | | | 0.30 | % | | | 0.18 | % | | | 0.29 | % | | | 0.38 | % | | | 1.18 | % | | | 0.29 | % | | | 0.69 | % |
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Three months ended, | | | | | | | | | | Twelve months ended, | |
| | | Dec. 31, | | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | | | December 31, | |
| | | 2004 | | | 2004 | | | 2004 | | | 2004 | | | 2003 | | | 2004 | | | 2003 | |
| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans, including fees | | $ | 43,736 | | | $ | 43,687 | | | $ | 42,461 | | | $ | 42,522 | | | $ | 41,393 | | | $ | 172,406 | | | $ | 179,771 | |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 5,810 | | | | 6,106 | | | | 6,241 | | | | 6,813 | | | | 6,060 | | | | 24,970 | | | | 21,801 | |
| Tax-exempt | | | 1,307 | | | | 1,321 | | | | 1,381 | | | | 1,449 | | | | 1,555 | | | | 5,458 | | | | 6,430 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total investment securities interest | | | 7,117 | | | | 7,427 | | | | 7,622 | | | | 8,262 | | | | 7,615 | | | | 30,428 | | | | 28,231 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits with other banks | | | 16 | | | | 22 | | | | 34 | | | | 28 | | | | 36 | | | | 100 | | | | 141 | |
| Federal funds sold and securities purchased under agreements to resell | | | 8 | | | | 15 | | | | 9 | | | | 11 | | | | 11 | | | | 43 | | | | 146 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest income | | | 50,877 | | | | 51,151 | | | | 50,126 | | | | 50,823 | | | | 49,055 | | | | 202,977 | | | | 208,289 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 10,136 | | | | 9,504 | | | | 9,037 | | | | 9,662 | | | | 10,214 | | | | 38,339 | | | | 44,386 | |
| Short-term borrowings | | | 688 | | | | 793 | | | | 526 | | | | 499 | | | | 471 | | | | 2,506 | | | | 1,824 | |
| Long-term borrowings | | | 4,255 | | | | 4,274 | | | | 4,226 | | | | 4,163 | | | | 4,130 | | | | 16,918 | | | | 16,334 | |
| Subordinated debentures and capital securities | | | 409 | | | | 379 | | | | 337 | | | | 342 | | | | 147 | | | | 1,467 | | | | 864 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest expense | | | 15,488 | | | | 14,950 | | | | 14,126 | | | | 14,666 | | | | 14,962 | | | | 59,230 | | | | 63,408 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 35,389 | | | | 36,201 | | | | 36,000 | | | | 36,157 | | | | 34,093 | | | | 143,747 | | | | 144,881 | |
| Provision for loan losses | | | 343 | | | | 2,097 | | | | 2,243 | | | | 2,600 | | | | 7,422 | | | | 7,283 | | | | 18,942 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 35,046 | | | | 34,104 | | | | 33,757 | | | | 33,557 | | | | 26,671 | | | | 136,464 | | | | 125,939 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 4,520 | | | | 4,920 | | | | 4,794 | | | | 4,613 | | | | 4,917 | | | | 18,847 | | | | 19,422 | |
| Trust revenues | | | 4,206 | | | | 3,774 | | | | 4,030 | | | | 3,892 | | | | 3,648 | | | | 15,902 | | | | 14,500 | |
| Investment securities gains (losses) | | | 13 | | | | (8 | ) | | | (1 | ) | | | (2 | ) | | | 4 | | | | 2 | | | | 24 | |
| Other | | | 5,941 | | | | 7,330 | | | | 6,082 | | | | 5,938 | | | | 10,458 | | | | 25,291 | | | | 28,266 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total noninterest income | | | 14,680 | | | | 16,016 | | | | 14,905 | | | | 14,441 | | | | 19,027 | | | | 60,042 | | | | 62,212 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 19,666 | | | | 19,491 | | | | 19,056 | | | | 18,519 | | | | 18,625 | | | | 76,732 | | | | 76,508 | |
| Net occupancy | | | 2,186 | | | | 2,119 | | | | 1,968 | | | | 2,205 | | | | 1,872 | | | | 8,478 | | | | 7,665 | |
| Furniture and equipment | | | 1,851 | | | | 1,782 | | | | 1,800 | | | | 1,804 | | | | 1,701 | | | | 7,237 | | | | 7,101 | |
| Data processing | | | 1,792 | | | | 1,773 | | | | 1,758 | | | | 1,863 | | | | 2,037 | | | | 7,186 | | | | 6,730 | |
| Deposit insurance | | | 119 | | | | 119 | | | | 166 | | | | 171 | | | | 140 | | | | 575 | | | | 537 | |
| State taxes | | | 409 | | | | 368 | | | | 344 | | | | 344 | | | | 442 | | | | 1,465 | | | | 1,768 | |
| Amortization of intangibles | | | 220 | | | | 220 | | | | 220 | | | | 216 | | | | 205 | | | | 876 | | | | 824 | |
| Other | | | 8,813 | | | | 8,570 | | | | 8,077 | | | | 8,122 | | | | 8,458 | | | | 33,582 | | | | 31,662 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total noninterest expenses | | | 35,056 | | | | 34,442 | | | | 33,389 | | | | 33,244 | | | | 33,480 | | | | 136,131 | | | | 132,795 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 14,670 | | | | 15,678 | | | | 15,273 | | | | 14,754 | | | | 12,218 | | | | 60,375 | | | | 55,356 | |
| Income tax expense | | | 4,661 | | | | 4,854 | | | | 4,936 | | | | 4,806 | | | | 3,377 | | | | 19,257 | | | | 17,450 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net earnings | | $ | 10,009 | | | $ | 10,824 | | | $ | 10,337 | | | $ | 9,948 | | | $ | 8,841 | | | $ | 41,118 | | | $ | 37,906 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADDITIONAL DATA — FULLY TAX EQUIVALENT NET INTEREST INCOME |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 50,877 | | | $ | 51,151 | | | $ | 50,126 | | | $ | 50,823 | | | $ | 49,055 | | | $ | 202,977 | | | $ | 208,289 | |
| Tax equivalent adjustment | | | 773 | | | | 778 | | | | 819 | | | | 860 | | | | 885 | | | | 3,230 | | | | 3,641 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Interest income - tax equivalent | | | 51,650 | | | | 51,929 | | | | 50,945 | | | | 51,683 | | | | 49,940 | | | | 206,207 | | | | 211,930 | |
| Interest expense | | | 15,488 | | | | 14,950 | | | | 14,126 | | | | 14,666 | | | | 14,962 | | | | 59,230 | | | | 63,408 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income - tax equivalent | | $ | 36,162 | | | $ | 36,979 | | | $ | 36,819 | | | $ | 37,017 | | | $ | 34,978 | | | $ | 146,977 | | | $ | 148,522 | |
| | | | | | | | | | | | | | | | | | | | | | |
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| | | | | | | | | |
| | | Dec. 31, | | | Dec. 31, | |
| | | 2004 | | | 2003 | |
ASSETS | | | | | | | | |
| Cash and due from banks | | $ | 155,353 | | | $ | 183,612 | |
| Interest-bearing deposits with other banks | | | 920 | | | | 5,014 | |
| Federal funds sold and securities purchased under agreements to resell | | | 12,049 | | | | 607 | |
| Investment securities, held-to-maturity | | | 12,809 | | | | 18,399 | |
| Investment securities, available-for-sale | | | 669,431 | | | | 794,762 | |
| Loans | | | | | | | | |
| Commercial | | | 644,933 | | | | 666,315 | |
| Real estate-construction | | | 91,475 | | | | 73,260 | |
| Real estate-mortgage | | | 1,539,398 | | | | 1,466,153 | |
| Installment | | | 592,402 | | | | 560,061 | |
| Credit card | | | 21,895 | | | | 21,680 | |
| Lease financing | | | 5,229 | | | | 12,241 | |
| | | | | | | |
| Total loans | | | 2,895,332 | | | | 2,799,710 | |
| Less | | | | | | | | |
| Unearned income | | | 6 | | | | 86 | |
| Allowance for loan losses | | | 46,718 | | | | 47,771 | |
| | | | | | | |
| Net loans | | | 2,848,608 | | | | 2,751,853 | |
| Premises and equipment | | | 66,898 | | | | 59,050 | |
| Goodwill | | | 28,444 | | | | 27,379 | |
| Other intangibles | | | 7,855 | | | | 7,530 | |
| Deferred income taxes receivable | | | 7,816 | | | | 6,227 | |
| Other assets | | | 106,488 | | | | 101,629 | |
| | | | | | | |
Total Assets | | $ | 3,916,671 | | | $ | 3,956,062 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES | | | | | | | | |
| Deposits | | | | | | | | |
| Noninterest-bearing | | $ | 443,902 | | | $ | 414,785 | |
| Interest-bearing | | | 2,541,084 | | | | 2,530,880 | |
| | | | | | | |
| Total deposits | | | 2,984,986 | | | | 2,945,665 | |
| Short-term borrowings | | | 145,144 | | | | 258,909 | |
| Federal Home Loan Bank long-term debt | | | 350,856 | | | | 322,979 | |
| Other long-term debt | | | 30,930 | | | | 30,000 | |
| Accrued interest and other liabilities | | | 33,300 | | | | 32,026 | |
| | | | | | | |
Total Liabilities | | | 3,545,216 | | | | 3,589,579 | |
| | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | |
| Common stock | | | 395,521 | | | | 395,752 | |
| Retained earnings | | | 65,095 | | | | 50,325 | |
| Accumulated comprehensive income | | | (3,123 | ) | | | 2,344 | |
| Restricted stock awards | | | (3,073 | ) | | | (3,397 | ) |
| Treasury stock, at cost | | | (82,965 | ) | | | (78,541 | ) |
| | | | | | | |
Total Shareholders’ Equity | | | 371,455 | | | | 366,483 | |
| | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 3,916,671 | | | $ | 3,956,062 | |
| | | | | | | |
ADDITIONAL DATA — RISK BASED CAPITAL
| | | | | | | | | | | | | | | | | | | | | |
| | | Dec. 31, | | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | |
| | | 2004 | | | 2004 | | | 2004 | | | 2004 | | | 2003 | |
| Tier 1 Capital | | $ | 367,114 | | | $ | 364,529 | | | $ | 361,597 | | | $ | 359,134 | | | $ | 358,616 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 Ratio | | | 13.23 | % | | | 13.24 | % | | | 12.98 | % | | | 13.19 | % | | | 13.20 | % |
| Total Capital | | $ | 401,957 | | | $ | 399,108 | | | $ | 396,580 | | | $ | 393,331 | | | $ | 392,735 | |
| Total Capital Ratio | | | 14.48 | % | | | 14.50 | % | | | 14.24 | % | | | 14.45 | % | | | 14.46 | % |
| Total Risk-Adjusted Assets | | $ | 2,775,584 | | | $ | 2,752,339 | | | $ | 2,785,789 | | | $ | 2,722,261 | | | $ | 2,715,858 | |
| Leverage Ratio | | | 9.54 | % | | | 9.35 | % | | | 9.33 | % | | | 9.30 | % | | | 9.30 | % |
FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarterly Averages | | | Year-to-Date Averages | |
| | | Dec. 31, | | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | | | December 31, | |
| | | 2004 | | | 2004 | | | 2004 | | | 2004 | | | 2003 | | | 2004 | | | 2003 | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 117,450 | | | $ | 120,166 | | | $ | 115,009 | | | $ | 114,977 | | | $ | 117,810 | | | $ | 116,911 | | | $ | 128,582 | |
| Interest-bearing deposits with other banks | | | 3,008 | | | | 5,124 | | | | 10,422 | | | | 7,588 | | | | 9,252 | | | | 6,522 | | | | 7,857 | |
| Federal funds sold and securities purchased under agreements to resell | | | 1,918 | | | | 4,694 | | | | 3,405 | | | | 4,691 | | | | 4,307 | | | | 3,675 | | | | 12,998 | |
| Investment securities | | | 700,235 | | | | 729,627 | | | | 767,667 | | | | 799,823 | | | | 798,727 | | | | 749,150 | | | | 744,201 | |
| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 638,154 | | | | 652,874 | | | | 667,796 | | | | 669,188 | | | | 658,205 | | | | 656,940 | | | | 688,879 | |
| Real estate-construction | | | 99,346 | | | | 88,056 | | | | 77,963 | | | | 76,193 | | | | 68,621 | | | | 85,435 | | | | 75,443 | |
| Real estate-mortgage | | | 1,538,621 | | | | 1,556,555 | | | | 1,520,659 | | | | 1,488,463 | | | | 1,480,587 | | | | 1,526,192 | | | | 1,445,916 | |
| Installment | | | 597,299 | | | | 594,796 | | | | 562,990 | | | | 554,374 | | | | 564,684 | | | | 577,467 | | | | 556,613 | |
| Credit card | | | 20,631 | | | | 20,493 | | | | 20,134 | | | | 20,274 | | | | 20,402 | | | | 20,384 | | | | 20,334 | |
| Lease financing | | | 5,965 | | | | 7,716 | | | | 9,538 | | | | 11,284 | | | | 13,276 | | | | 8,616 | | | | 16,499 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total loans | | | 2,900,016 | | | | 2,920,490 | | | | 2,859,080 | | | | 2,819,776 | | | | 2,805,775 | | | | 2,875,034 | | | | 2,803,684 | |
| Less | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unearned income | | | 8 | | | | 18 | | | | 37 | | | | 65 | | | | 108 | | | | 32 | | | | 236 | |
| Allowance for loan losses | | | 48,815 | | | | 48,220 | | | | 47,873 | | | | 47,877 | | | | 48,754 | | | | 48,198 | | | | 48,600 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net loans | | | 2,851,193 | | | | 2,872,252 | | | | 2,811,170 | | | | 2,771,834 | | | | 2,756,913 | | | | 2,826,804 | | | | 2,754,848 | |
| Premises and equipment | | | 64,765 | | | | 61,750 | | | | 60,155 | | | | 59,271 | | | | 58,863 | | | | 61,495 | | | | 57,465 | |
| Deferred income tax | | | 7,561 | | | | 10,183 | | | | 8,374 | | | | 5,570 | | | | 8,457 | | | | 7,927 | | | | 6,501 | |
| Other assets | | | 135,922 | | | | 128,947 | | | | 131,364 | | | | 131,146 | | | | 131,683 | | | | 131,848 | | | | 126,236 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 3,882,052 | | | $ | 3,932,743 | | | $ | 3,907,566 | | | $ | 3,894,900 | | | $ | 3,886,012 | | | $ | 3,904,332 | | | $ | 3,838,688 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing | | $ | 142,754 | | | $ | 160,728 | | | $ | 167,560 | | | $ | 193,256 | | | $ | 182,501 | | | $ | 165,996 | | | $ | 214,285 | |
| Savings | | | 1,060,305 | | | | 1,072,417 | | | | 1,057,305 | | | | 1,030,709 | | | | 1,046,180 | | | | 1,055,245 | | | | 980,972 | |
| Time | | | 1,300,973 | | | | 1,284,935 | | | | 1,289,329 | | | | 1,306,947 | | | | 1,325,253 | | | | 1,295,532 | | | | 1,347,663 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | | 2,504,032 | | | | 2,518,080 | | | | 2,514,194 | | | | 2,530,912 | | | | 2,553,934 | | | | 2,516,773 | | | | 2,542,920 | |
| Noninterest-bearing | | | 432,775 | | | | 409,237 | | | | 405,098 | | | | 395,894 | | | | 399,611 | | | | 410,807 | | | | 403,929 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 2,936,807 | | | | 2,927,317 | | | | 2,919,292 | | | | 2,926,806 | | | | 2,953,545 | | | | 2,927,580 | | | | 2,946,849 | |
| Borrowed funds | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | 163,936 | | | | 234,622 | | | | 215,124 | | | | 209,166 | | | | 193,390 | | | | 205,677 | | | | 154,123 | |
| Federal Home Loan Bank long-term debt | | | 353,074 | | | | 350,907 | | | | 349,586 | | | | 333,214 | | | | 323,562 | | | | 346,724 | | | | 320,107 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total borrowed funds | | | 517,010 | | | | 585,529 | | | | 564,710 | | | | 542,380 | | | | 516,952 | | | | 552,401 | | | | 474,230 | |
| Other long-term debt | | | 30,930 | | | | 30,930 | | | | 30,930 | | | | 30,930 | | | | 30,000 | | | | 30,930 | | | | 19,315 | |
| Accrued interest and other liabilities | | | 26,583 | | | | 24,472 | | | | 28,060 | | | | 27,156 | | | | 20,862 | | | | 26,562 | | | | 29,055 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 3,511,330 | | | | 3,568,248 | | | | 3,542,992 | | | | 3,527,272 | | | | 3,521,359 | | | | 3,537,473 | | | | 3,469,449 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | 395,533 | | | | 395,581 | | | | 395,586 | | | | 395,648 | | | | 395,808 | | | | 395,587 | | | | 395,912 | |
| Retained earnings | | | 61,389 | | | | 58,598 | | | | 53,999 | | | | 51,165 | | | | 47,534 | | | | 56,308 | | | | 44,463 | |
| Accumulated comprehensive income | | | (322 | ) | | | (4,317 | ) | | | (1,199 | ) | | | 3,311 | | | | 2,587 | | | | (641 | ) | | | 5,516 | |
| Restricted stock awards | | | (3,447 | ) | | | (3,636 | ) | | | (4,124 | ) | | | (4,220 | ) | | | (3,619 | ) | | | (3,855 | ) | | | (4,951 | ) |
| Treasury stock, at cost | | | (82,431 | ) | | | (81,731 | ) | | | (79,688 | ) | | | (78,276 | ) | | | (77,657 | ) | | | (80,540 | ) | | | (71,701 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Shareholders’ Equity | | | 370,722 | | | | 364,495 | | | | 364,574 | | | | 367,628 | | | | 364,653 | | | | 366,859 | | | | 369,239 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 3,882,052 | | | $ | 3,932,743 | | | $ | 3,907,566 | | | $ | 3,894,900 | | | $ | 3,886,012 | | | $ | 3,904,332 | | | $ | 3,838,688 | |
| | | | | | | | | | | | | | | | | | | | | | |
