Exhibit 99.1
FOR IMMEDIATE RELEASE
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Media Contact: | | Cheryl Lipp | | |
| | | (513) 979-5797 | | |
| | | cheryl.lipp@bankatfirst.com | | |
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Analyst Contact: | | J. Franklin Hall | | |
| | | (513) 979-5770 | | |
| | | frank.hall@bankatfirst.com | | |
First Financial Bancorp Reports Third-Quarter 2006 Earnings
| | • | | Third-quarter net earnings of $0.31 per diluted share versus $0.33 in 2005 primarily due to the gain on the sale of branches |
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| | • | | Completion of $38.1 million problem loan sale |
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| | • | | Completion of sale of 10 branches and closure of 7 branches for a gain of $12.5 million or 20 cents in diluted earnings per share |
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| | • | | Growth in commercial and commercial real estate loans of $125.6 million or 13.34 percent, excluding the effects of the branch sales and loan sales |
HAMILTON, Ohio — October 27, 2006 — First Financial Bancorp (Nasdaq: FFBC) president and chief executive officer, Claude E. Davis, today announced third-quarter 2006 earnings of $12,119,000 or 31 cents in diluted earnings per share, compared to $14,484,000 or 33 cents in diluted earnings per share for the same period in 2005. First Financial also announced year-to-date earnings of $20,444,000 or 52 cents in diluted earnings per share, compared to $35,099,000 or 81 cents in diluted earnings per share for the same period in 2005.
Earnings from continuing operations were $12,119,000 or 31 cents per diluted share and $7,819,000 or 18 cents per diluted share for the third quarter of 2006 and 2005, respectively. Year-to-date earnings from continuing operations were $20,444,000 and $27,974,000 for 2006 and 2005, respectively.
Summary of Key Drivers:
Net interest marginfell to 3.93 percent in the third quarter due largely to deposit account migration and a 7 basis point temporary effect of a large public fund deposit account. First Financial is lowering the 2006 margin estimate to between 3.95 percent and 4.00 percent for the full year. The 2007 margin forecast is within a larger range of 3.90 percent to 4.05 percent, dependent largely on the continuation of the asset mix shift and a tapering off of the deposit account migration and planned pricing changes.
Earning asset levels in 2007 are expected to grow modestly as the counterbalancing effects of commercial loan growth and retail mortgage and indirect consumer loan runoff continue. Deposit account growth in 2007 is expected to occur with the introduction of new, competitive commercial deposit products.
Noninterest income, excluding the effects of the branch and loan sale gains, remains relatively stable with strong service charge income growth due largely to the continued benefits of the overdraft protection program introduced in 2005. The expectation for 2007 growth is commensurate with both market value growth expectations for assets under management in the Wealth Resources Group and deposit account growth.
Noninterest expenseremains affected by the transition costs associated with the Strategic Plan execution. Management expects that 2007 expense levels will be more in line with peers with an anticipated efficiency ratio of between 60 and 65 percent, but is committed to the long-term goal of 55 to 60 percent.
Credit qualitydeclined in the third quarter as measured by the nonperforming asset levels due to the addition of eight commercial and commercial real estate credits. However, annualized net charge-offs and delinquencies decreased. Management believes that the increase in nonperforming assets is not indicative of a portfolio-wide degradation of credit quality, but rather slowness in actively managing smaller credits in the nonperforming portfolio to a resolution. Management raised the level of reserves to 1.27 percent from 1.15 percent to accommodate the increase in nonperforming assets. Charge-offs were at an institutional low of 17 basis points.
Capitalmanagement efforts through share repurchase were resumed in the third quarter with the repurchase of 152,000 shares. First Financial expects to repurchase between 600,000 and 1,100,000 shares by the end of 2007.
Unless otherwise noted, all amounts discussed are pre-tax except income or loss from continuing operations, net income, and per-share data which is presented after-tax.
Due to the sale of the Fidelity Federal Savings Bank subsidiary in the third quarter of 2005, there was no 2006 activity from discontinued operations. In the third quarter of 2005, the earnings from discontinued operations were $6,665,000 or 15 cents per diluted share. Year-to-date 2005 earnings from discontinued operations were $7,125,000 or 17 cents per diluted share.
Return on average assets for the third quarter of 2006 was 1.40 percent compared to 1.50 percent for the same period in 2005. Return on average shareholders’ equity was 16.09 percent for the third quarter of 2006, versus 15.64 percent for the comparable period in 2005. Year-to-date return on average assets was 0.79 percent for 2006, compared to 1.22 percent for 2005, while return on equity was 9.18 percent for 2006 versus 12.71 percent for 2005.
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(The preceding overview of First Financial Bancorp’s earnings is supplemented with the following detail:)
Strategic Plan Review & Update:
Branch Plan
The sale of 10 branches and closure of 7 offices was completed in August of 2006. The sale of the 10 offices was completed in three separate transactions. Total net gains on sale were approximately $12.5 million or 20 cents per share. Total deposits of $109 million were assumed and total loans of $101 million were sold. The estimated proforma financial impact of the branch sales and closures, excluding the gain on sales, remains earnings neutral.
A summary of the linked-quarter balance sheet excluding the effects of the branch sales follows:
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| | | 2Q06 As | | | | | | | | | | 3Q06 As | | |
| | | Reported | | Branch Sale | | 3Q Activity | | Reported | | % Change * |
Loans (end of period): | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 646,662 | | | $ | (11,501 | ) | | $ | 28,361 | | | $ | 663,522 | | | | 4.47 | % |
| Real estate — construction | | | 95,603 | | | | (7,460 | ) | | | 4,291 | | | | 92,434 | | | | 4.87 | % |
| Real estate — commercial | | | 640,869 | | | | (18,476 | ) | | | 3,142 | | | | 625,535 | | | | 0.50 | % |
| Real estate — retail | | | 721,383 | | | | (54,169 | ) | | | (13,562 | ) | | | 653,652 | | | | -2.03 | % |
| Installment | | | 251,463 | | | | (9,540 | ) | | | (22,246 | ) | | | 219,677 | | | | -9.20 | % |
| Home equity | | | 226,974 | | | | (268 | ) | | | 5,035 | | | | 231,741 | | | | 2.22 | % |
| Credit card | | | 22,563 | | | | — | | | | 520 | | | | 23,083 | | | | 2.30 | % |
| Lease financing | | | 1,396 | | | | — | | | | (194 | ) | | | 1,202 | | | | -13.90 | % |
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| Total loans | | $ | 2,606,913 | | | $ | (101,414 | ) | | $ | 5,347 | | | $ | 2,510,846 | | | | 0.21 | % |
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| | | 2Q06 | | | | | | | % change | |
| | | Average less | | | 3Q06 | | | over Adjusted | |
| | | Branch Sales | | | Activity | | | 2Q06 | |
Deposits (average balances): | | | | | | | | | | | | |
| Interest-bearing | | $ | 153,607 | | | $ | 67,121 | | | | 43.70 | % |
| Savings | | | 1,041,417 | | | | (28,333 | ) | | | -2.72 | % |
| Time | | | 1,190,988 | | | | 16,535 | | | | 1.39 | % |
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| Total interest-bearing deposits | | | 2,386,012 | | | | 55,323 | | | | 2.32 | % |
| Noninterest-bearing | | | 406,613 | | | | (15,344 | ) | | | -3.77 | % |
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| Total deposits | | $ | 2,792,625 | | | $ | 39,979 | | | | 1.43 | % |
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| * | | % Change calculated as 3Q Activity divided by Q206 As Reported excluding the Branch Sale. |
First Financial will continue to concentrate future growth plans and capital investments in larger metropolitan markets. Smaller markets have historically provided stable, low-cost funding sources to First Financial and are an important part of its funding plan. First Financial’s historical strength in a number of these markets should enable it to retain market share.
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First Financial’s branch strategy is to serve a combination of metropolitan and non-metropolitan markets in Indiana, Ohio, and Kentucky. In addition to geographic fit, each market must have growth potential and the ability to meet profit targets.
Following the completion of the branch plan, First Financial has 87 offices serving 9 distinct markets with an average branch size of approximately $33 million. The operating model for growth includes market presidents managing distinct markets with the authority to make decisions at the point of client contact.
Information Technology Update
First Financial will be converting to the Jack Henry banking system in October of 2006. It is expected that the new operating platform will enhance First Financial’s capability to deliver client services in a better, faster, and more efficient manner.
This decision is consistent with the strategic plan and is an integral component of First Financial’s comprehensive review of the use of technology. This review includes analysis of our data and voice telecommunication usage, on-line and ATM services, and other ancillary services. Expected savings as a result of this comprehensive review remain between $3 million and $4 million per year and should be fully recognized in 2007. Costs associated with this conversion will include the early termination of some existing contracts. To date, $2.6 million in early termination penalties and other one-time charges have been recorded.
Summary of Changes
The prior period estimates of the combined improvements of the strategic initiatives remain between $13.4 million and $16.9 million or 21 cents and 27 cents per share on an annualized basis. The full effect of these changes should be recognized in 2007. Management continues to review all areas for both revenue enhancement and cost savings and remains committed to achieving a 55 to 60 percent efficiency ratio in the long-term.
Current Period Operating Results
Net Interest Income:
Net interest income for the third quarter of 2006 was $30.8 million compared to $33.1 million in the third quarter of 2005, a decrease of $2.3 million or 7.00 percent. This decrease is due primarily to a planned reduction in earning assets through loan sales, exit of the indirect line of business, and the strategic decision to sell conforming mortgage loan production in the secondary market; compounded by the increase in deposit costs. Net interest income on a linked-quarter basis (third quarter of 2006 compared to second quarter of 2006) decreased $1.1 million
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or 3.52 percent. Net interest income on a year-to-date basis declined $6.1 million or 6.00 percent, which is primarily due to the continued effects of increased rates on deposits and account migration to higher yielding products.
First Financial’s net interest margin increased to 3.93 percent in the third quarter of 2006 from 3.83 percent in the third quarter of 2005. Linked-quarter net interest margin decreased 18 basis points from 4.11 percent to 3.93 percent due to the combined effects of:
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| June 30, 2006 | | | 4.11 | % |
| Branch sale impact | | | -0.07 | % |
| CD portfolio repricing | | | -0.12 | % |
| Loan mix shift | | | 0.03 | % |
| Impact of an increased public fund deposit | | | -0.07 | % |
| Commercial loan volume increase | | | 0.03 | % |
| Other | | | 0.02 | % |
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| September 30, 2006 | | | 3.93 | % |
On a year-to-date basis, net interest margin increased 11 basis points from 3.92 percent in 2005, to 4.03 percent. The primary risk to our margin remains unanticipated consumer and competitor behavior in deposit products, specifically the consumer preference for higher-yielding money market accounts rather than more traditional transaction accounts, and the aggressiveness in market pricing for both transaction and certificate of deposit accounts. First Financial is reducing the full year 2006 margin estimate to between 3.95 percent and 4.00 percent from a previous estimate of between 4.05 percent and 4.10 percent. This is due largely to the effect of a product mix shift in the consumer deposit portfolio.
On a tax-equivalent basis, the third quarter 2006, net interest margin was 4.01 percent compared to a linked-quarter 4.20 percent and a third quarter 2005, tax-equivalent margin of 3.92 percent. Year-to-date tax equivalent net interest margin was 4.11 percent compared to 4.01 percent in 2005.
Average loans, net of unearned income, for the third quarter of 2006 decreased $237 million or 8.50 percent from the comparable period a year ago. On a linked-quarter basis, average outstanding loan balances decreased $67 million or 2.58 percent. On a year-to-date basis, average outstanding loan balances decreased $203 million or 7.29 percent. The decrease in the loan portfolio from 2005 was affected by the sale of $42 million in indirect marine and recreational vehicle loans at the end of the third quarter of 2005, the sale in the fourth quarter of 2005 of approximately $64 million in retail mortgage loans that no longer fit the risk profile of the company, as well as the sale in the third quarter of 2006 of $38 million in problem loan credits. Furthermore, indirect installment originations ceased in the third quarter of 2005, resulting in approximately $18 million in quarterly runoff of this portfolio. Since the end of the second quarter of 2005, the indirect loan portfolio has decreased approximately $135 million.
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Additionally, First Financial has made the strategic decision to sell most of the mortgage loan production into the secondary market instead of keeping the loans in its portfolio. In total, First Financial has sold more than $245 million in total loans since announcing the Strategic Plan in 2005.
Securities available for sale were $329.2 million at September 30, 2006, compared to $554.7 million at December 31, 2005. The combined investment portfolio was 11.23 percent and 16.47 percent of total assets at September 30, 2006, and December 31, 2005, respectively. In February of 2006, First Financial sold $179 million in investment securities and paid down $184 million in Federal Home Loan Bank borrowings. Reliance on wholesale borrowings has been greatly reduced as a result of the restructuring and is likely to continue for the next several quarters as the bank continues to use excess liquidity to fund future growth.
Noninterest Income:
Third Quarter 2006 vs. Third Quarter 2005
Third quarter 2006 noninterest income was $30.4 million, an increase of $16.4 million or 117.21 percent from the third quarter of 2005. Third quarter 2006 noninterest income included $12.5 million from the gain on the sale of the branches and $2.2 million from the gain on the problem loan sale. The third quarter of 2005 included a $1.6 million loss associated with the sale of $42 million in indirect loans. Excluding these items, noninterest income remained flat, increasing $26,000 or 0.17 percent, from the third quarter of 2005. First Financial had quarterly increases in service charges on deposit accounts of $728,000 which included the positive effects of its new overdraft program. Bankcard interchange income increased $123,000 due to both increased debit card issuance and usage, while bank-owned life insurance income decreased $155,000, trust fees decreased $218,000, and MSR impairment recapture decreased $255,000.
Third Quarter 2006 vs. Second Quarter 2006
On a linked-quarter basis, total noninterest income increased $14.6 million. This increase was due to the branch and loan sale gains discussed previously. Excluding these, noninterest income would have decreased $157,000. This decrease was primarily due to a $354,000 decrease in bank-owned life insurance income offset by a $241,000 increase in service charges on deposit accounts related to increases in nonsufficient funds charges.
Year-to-date 2006 vs. Year-to-date 2005
Year-to-date noninterest income increased $17.1 million or 39.06 percent from the comparable period in 2005. Excluding previously discussed gains in 2006 and loss in 2005, noninterest income would have increased $747,000 or 1.64 percent. This increase is primarily due to increases in service charges on deposit accounts of $2.5 million and an increase of $493,000 in miscellaneous collection fees offset by an $865,000 decrease in MSR impairment recapture, a $476,000 loss on investment securities sold, a $343,000 decrease in bank-owned life insurance income, a $256,000 decrease in trust fees, and a $246,000 decrease in investment advisory fees.
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Noninterest Expense:
Third Quarter 2006 vs. Third Quarter 2005
Total noninterest expense increased $4.6 million or 13.25 percent for the third quarter of 2006 from the third quarter of 2005. This increase was primarily due to the following items:
| | • | | increases in salaries and benefits of $615,000 due to an increase in severance-related salaries and benefits expense of $503,000 and an increase in production bonuses of $247,000 |
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| | • | | $337,000 in occupancy expense primarily due to maintenance costs |
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| | • | | $1.3 million in data processing expenses primarily related to early termination fees of $500,000 and acceleration of fees of $300,000 for the conversion of various systems as well as $171,000 in software license amortization |
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| | • | | $810,000 in professional services primarily due to charges associated with the upcoming voice and data telecommunication improvements and with recruiting fees |
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| | • | | $603,000 in marketing expense primarily associated with the new branding initiative |
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| | • | | $1.3 million in other noninterest expense. The increase in other noninterest expense consists of increases in various accounts, including $511,000 in losses on fixed assets associated with the branch sale and the disposal of personal computers associated with the technology upgrade, $181,000 in credit card and merchant interchange expense that was more than offset by the increase in interchange income and merchant discount, and approximately $522,000 in conversion-related travel and supplies |
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| | • | | equipment expense decrease of $397,000 due primarily to a decrease in equipment expense rent of $108,000 and service contracts of $156,000 that are not expected to continue |
Third Quarter 2006 vs. Second Quarter 2006
On a linked-quarter basis, noninterest expense was $1.4 million less than the second quarter. This decrease was due to the following items:
| | • | | decreases in salaries and employee benefits of $3.1 million due to decreased severance of $1.9 million, decreased salaries in period payroll of approximately $185,000, decreased healthcare of $395,000, and decreased retirement-related expense of $558,000 |
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| | • | | decreases in data processing of $335,000 due to early termination fees paid in the second quarter offset by early termination fees paid in the third quarter |
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| | • | | increases in marketing of $491,000 primarily due to the branding initiative discussed earlier |
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| | • | | increases in professional services of $606,000 primarily due to the data and voice telecommunication upgrade discussed previously |
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Year-to-date 2006 vs. Year-to-date 2005
Year-to-date noninterest expense increased $19.2 million. Excluding the effects of the $4.3 million prepayment penalty recorded in the first quarter of 2006, noninterest expense would have increased $14.9 million due to the following items:
| | • | | increases in salaries and employee benefits of $5.9 million due to severance charges of $3.5 million, retirement-related expense of $1.0 million, production bonuses of $658,000, and healthcare of $257,000 |
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| | • | | increases in occupancy expense of $1.3 million due to increased maintenance costs, utilities, and new building rent consistent with First Financial’s growth plans |
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| | • | | increases in data processing of $3.3 million primarily due to early termination fees and acceleration of fees discussed previously |
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| | • | | increases in professional services of $873,000 primarily due to the data and voice telecommunication upgrade discussed previously as well as consulting associated with a branch staffing model |
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| | • | | increases in other noninterest expense of $3.9 million are due to increases in various accounts, including $799,000 in travel-related expenses, $706,000 in state intangible tax, and $589,000 in credit and collection expense |
First Financial anticipates additional restructuring-related expenses in the fourth quarter primarily in data processing, professional services, and severance charges. These amounts will be disclosed when quantified and recognized in the period in which they are incurred.
Income Taxes:
Income tax expense related to operating income was $6.9 million and $3.3 million for the three months ended September 30, 2006 and 2005, respectively. Tax expense related to discontinued operations was $3.6 million for the three months ended September 30, 2005. Income tax expense related to operating income for the first nine months of 2006 was $10.9 million versus $12.9 million in 2005. Tax expense related to discontinued operations was $3.8 million for the nine months ended September 30, 2005.
First Financial’s overall effective tax rate for the third quarter of 2006 was 36.32 percent compared to 31.98 percent for the same period in 2005. The effective tax rate for income from continuing operations was 29.36 percent and for income from discontinued operations was 34.82 percent for the third quarter of 2005. The overall effective tax rate for the first nine months of 2006 and 2005 was 34.69 percent and 32.28 percent, respectively. Effective tax rates for income from continuing operations was 31.57 percent and for income from discontinued operations was 34.93 percent for the nine months ended September 30, 2005. The 2006 increase in the effective rate is primarily due to the third quarter recognition
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of $1,032 in income tax expense as a result of an Internal Revenue Service audit of two prior year tax returns. The effect of this tax adjustment was approximately 3 cents per share and is not expected to recur.
Credit Quality:
First Financial completed the final phase of its previously announced sale of 193 problem credits as part of its strategy to reduce overall credit risk in the loan portfolio. The sale involved $38.1 million in primarily substandard commercial, commercial real estate, and retail real estate loans that were transferred to loans held for sale at the lower of cost or estimated fair value of $28.3 million. The loans were purchased by five independent parties for a combined price of $31.2 million. The gain associated with the problem loan sale previously announced was $2.2 million or approximately 4 cents per share resulting from a sale price in excess of the estimated value reported in the second quarter. The ongoing annual impact of the loan sale is estimated to be a reduction of net interest income of $181,000 due to the reduction of certain earning assets and the redeployment of the nonaccrual loans that were nonearning assets.
Net charge-offs of $1.1 million for the third quarter of 2006 were $1.7 million less than the $2.8 million reported as net charge-offs for the third quarter of 2005. Year-to-date net charge-offs, excluding the effect of the loan sale write-down recorded in the second quarter of 2006, were $6.2 million in 2006, up $645,000 from $5.6 million recorded in 2005. Including the write-down, net charge-offs were up $9.0 million.
Total underperforming assets, which includes nonaccrual loans, restructured loans, other real estate owned, and loans 90 days or more past due and still accruing, decreased $6.8 million to $22.9 million at the end of the third quarter of 2006 from $29.7 million at the end of the third quarter of 2005. The decrease in underperforming assets was due to a decrease in nonaccrual loans of $5.9 million primarily attributable to the impact of the loan sale. A large percentage of the underperforming loans are secured by real estate. On a linked-quarter basis, total underperforming assets decreased $7.0 million of which nonaccrual loans decreased $5.3 million primarily attributable to the impact of the loan sale. Excluding loans held for sale, total underperforming assets on a linked-quarter basis increased $7.1 million. The increase in underperforming assets on a linked-quarter basis is due to an increase in nonaccrual loans of $6.5 million primarily attributable to eight commercial and commercial real estate loan client relationships totalling of $4.1 million. First Financial is actively focused on the nonaccrual loans remaining in the portfolio subsequent to the loan sale. Despite the increase in the nonaccrual loans on a linked- quarter basis, First Financial does not believe that this is indicative of an overall degradation in the credit quality of the portfolio. These credits have been appropriately considered in establishing the allowance for loan losses at September 30, 2006.
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Nonperforming assets to ending loans decreased to 0.88 percent as of September 30, 2006, from 1.02 percent as of the end of the third quarter of 2005 and decreased from 1.10 percent on the linked-quarter. Excluding loans held for sale in the third quarter, the nonperforming assets to ending loans ratio as of June 30, 2006, was 0.58 percent.
The provision for loan losses for the third quarter of 2006 was $2,888,000 compared to $1,351,000 for the same period in 2005. The provision is a result of management’s quarterly analysis of the adequacy of the allowance for loan losses. The allowance to ending loans ratio as of September 30, 2006, was 1.27 percent versus 1.54 percent for the same quarter a year ago and 1.15 percent as of June 30, 2006. It is management’s belief that the allowance for loan losses of $31.9 million is adequate to absorb probable credit losses inherent in the portfolio, and the changes in the allowance and the resultant provision are consistent with the internal assessment of the risk in the loan portfolios.
Earnings Conference Call and Webcast
On October 27, 2006, First Financial will host an earnings conference call that will be webcast live at 11:00 a.m. EDT. The presenters will be Claude E. Davis, president and chief executive officer, C. Douglas Lefferson, executive vice president and chief operating officer, and J. Franklin Hall, senior vice president and chief financial officer. Anyone may participate in the conference call by telephoning 1-877-407-8031 (no passcode needed) or by logging on to the company’s website (http://ffbc-oh.com) for a live audio webcast of the call. Click on the Investor Information section and choose 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 number 286, conference ID number 216645 between 5:00 p.m. EDT on October 27, 2006, and 5:00 p.m. EST on November 3, 2006.
First Financial plans to file the SEC Form 10-Q on Tuesday, October 31, 2006.
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, 2005. Management’s analysis contains 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 ability of the company to implement its strategic plan, 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 2005 Form 10-K and other public documents filed with the SEC. These documents are available on our investor relations website at www.ffbc-oh.com and on the SEC’s website at www.sec.gov.
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FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL DATA
(Dollars in thousand, except per share)
(Unaudited)
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| | | | | | | | | | | | | | | | | | | | | | | Nine months ended | |
| | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | | | Sep. 30, | | | Sep. 30, | |
| | | 2006 | | | 2006 | | | 2006 | | | 2005 | | | 2005 | | | 2006 | | | 2005 | |
EARNINGS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 30,823 | | | $ | 31,947 | | | $ | 32,199 | | | $ | 31,939 | | | $ | 33,143 | | | $ | 94,969 | | | $ | 101,028 | |
| Earnings from continuing operations | | | 12,119 | | | | 4,358 | | | | 3,967 | | | | 2,834 | | | | 7,819 | | | | 20,444 | | | | 27,974 | |
| Earnings from discontinued operations | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 6,665 | | | | 0 | | | | 7,125 | |
| Net earnings | | | 12,119 | | | | 4,358 | | | | 3,967 | | | | 2,834 | | | | 14,484 | | | | 20,444 | | | | 35,099 | |
| Earnings per share from continuing operations — basic | | $ | 0.31 | | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.07 | | | $ | 0.18 | | | $ | 0.52 | | | $ | 0.64 | |
| Earnings per share from continuing operations — diluted | | $ | 0.31 | | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.07 | | | $ | 0.18 | | | $ | 0.52 | | | $ | 0.64 | |
| Earnings per share from discontinued operations — basic | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.15 | | | $ | 0.00 | | | $ | 0.17 | |
| Earnings per share from discontinued operations — diluted | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.15 | | | $ | 0.00 | | | $ | 0.17 | |
| Net earnings per share — basic | | $ | 0.31 | | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.07 | | | $ | 0.33 | | | $ | 0.52 | | | $ | 0.81 | |
| Net earnings per share — diluted | | $ | 0.31 | | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.07 | | | $ | 0.33 | | | $ | 0.52 | | | $ | 0.81 | |
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KEY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 1.40 | % | | | 0.51 | % | | | 0.45 | % | | | 0.30 | % | | | 1.50 | % | | | 0.79 | % | | | 1.22 | % |
| Return on average shareholders’ equity | | | 16.09 | % | | | 5.90 | % | | | 5.39 | % | | | 3.20 | % | | | 15.64 | % | | | 9.18 | % | | | 12.71 | % |
| Return on average tangible shareholders’ equity | | | 18.20 | % | | | 6.70 | % | | | 6.12 | % | | | 3.57 | % | | | 17.32 | % | | | 10.39 | % | | | 14.07 | % |
| Average shareholders’ equity to average assets | | | 8.72 | % | | | 8.64 | % | | | 8.42 | % | | | 9.44 | % | | | 9.60 | % | | | 8.59 | % | | | 9.61 | % |
| Net interest margin | | | 3.93 | % | | | 4.11 | % | | | 4.04 | % | | | 3.72 | % | | | 3.83 | % | | | 4.03 | % | | | 3.92 | % |
Net interest margin (fully tax equivalent)(1) | | | 4.01 | % | | | 4.20 | % | | | 4.12 | % | | | 3.80 | % | | | 3.92 | % | | | 4.11 | % | | | 4.01 | % |
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COMMON STOCK DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average basic shares outstanding | | | 39,612,408 | | | | 39,605,631 | | | | 39,560,109 | | | | 42,069,965 | | | | 43,166,270 | | | | 39,592,908 | | | | 43,422,516 | |
| Average diluted shares outstanding | | | 39,619,786 | | | | 39,619,729 | | | | 39,612,496 | | | | 42,180,824 | | | | 43,262,371 | | | | 39,623,911 | | | | 43,503,393 | |
| Ending shares outstanding | | | 39,507,716 | | | | 39,660,341 | | | | 39,562,350 | | | | 39,563,480 | | | | 42,978,981 | | | | 39,507,716 | | | | 42,978,981 | |
| Market price: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | | 16.04 | | | $ | 16.68 | | | $ | 18.32 | | | $ | 19.30 | | | $ | 19.80 | | | $ | 18.32 | | | $ | 19.80 | |
| Low | | | 14.20 | | | $ | 14.63 | | | $ | 15.88 | | | $ | 17.51 | | | $ | 16.99 | | | $ | 14.20 | | | $ | 16.65 | |
| Close | | | 15.91 | | | $ | 14.91 | | | $ | 16.64 | | | $ | 17.52 | | | $ | 18.61 | | | $ | 15.91 | | | $ | 18.61 | |
| Book value | | $ | 7.58 | | | $ | 7.37 | | | $ | 7.50 | | | $ | 7.58 | | | $ | 8.59 | | | $ | 7.58 | | | $ | 8.59 | |
| Common dividend declared | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.48 | | | $ | 0.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AVERAGE BALANCE SHEET ITEMS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans less unearned income(4) | | $ | 2,580,005 | | | $ | 2,614,598 | | | $ | 2,596,755 | | | $ | 2,657,156 | | | $ | 2,783,315 | | | $ | 2,597,057 | | | $ | 2,789,031 | |
| Investment securities | | | 370,095 | | | | 380,532 | | | | 497,528 | | | | 620,868 | | | | 625,418 | | | | 415,585 | | | | 638,729 | |
| Other earning assets | | | 158,940 | | | | 122,413 | | | | 141,513 | | | | 127,701 | | | | 20,938 | | | | 141,019 | | | | 18,766 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total earning assets | | | 3,109,040 | | | | 3,117,543 | | | | 3,235,796 | | | | 3,405,725 | | | | 3,429,671 | | | | 3,153,661 | | | | 3,446,526 | |
| Total assets | | | 3,426,417 | | | | 3,428,839 | | | | 3,545,412 | | | | 3,719,197 | | | | 3,827,395 | | | | 3,466,453 | | | | 3,842,235 | |
| Noninterest-bearing deposits | | | 401,685 | | | | 424,227 | | | | 417,061 | | | | 433,228 | | | | 428,881 | | | | 414,268 | | | | 429,221 | |
| Interest-bearing deposits | | | 2,492,898 | | | | 2,477,026 | | | | 2,486,336 | | | | 2,488,062 | | | | 2,473,697 | | | | 2,485,444 | | | | 2,472,673 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 2,894,583 | | | | 2,901,253 | | | | 2,903,397 | | | | 2,921,290 | | | | 2,902,578 | | | | 2,899,712 | | | | 2,901,894 | |
| Borrowings | | | 200,856 | | | | 202,792 | | | | 313,743 | | | | 418,388 | | | | 446,939 | | | | 238,717 | | | | 452,063 | |
| Shareholders’ equity | | | 298,909 | | | | 296,087 | | | | 298,578 | | | | 350,934 | | | | 367,472 | | | | 297,859 | | | | 369,247 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CREDIT QUALITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ending allowance for loan losses | | | 31,888 | | | $ | 30,085 | | | $ | 40,656 | | | $ | 42,485 | | | $ | 42,036 | | | $ | 31,888 | | | $ | 42,036 | |
| Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual(2) | | | 18,692 | | | | 12,202 | | | | 26,838 | | | | 24,961 | | | | 24,563 | | | | 18,692 | | | | 24,563 | |
Restructured(2) | | | 603 | | | | 610 | | | | 3,293 | | | | 3,408 | | | | 808 | | | | 603 | | | | 808 | |
| OREO | | | 2,859 | | | | 2,277 | | | | 2,675 | | | | 3,162 | | | | 2,595 | | | | 2,859 | | | | 2,595 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets(2) | | | 22,154 | | | | 15,089 | | | | 32,806 | | | | 31,531 | | | | 27,966 | | | | 22,154 | | | | 27,966 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans delinquent over 90 days(2) | | | 788 | | | | 758 | | | | 1,104 | | | | 1,359 | | | | 1,779 | | | | 788 | | | | 1,779 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross charge-offs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | (1,238 | ) | | | (3,521 | ) | | | (1,516 | ) | | | (1,066 | ) | | | (1,839 | ) | | | (6,275 | ) | | | (3,611 | ) |
| Commercial real estate | | | (119 | ) | | | (5,818 | ) | | | (276 | ) | | | (449 | ) | | | (94 | ) | | | (6,213 | ) | | | (301 | ) |
| Retail real estate | | | (111 | ) | | | (1,910 | ) | | | (202 | ) | | | (220 | ) | | | (121 | ) | | | (2,223 | ) | | | (676 | ) |
| All other | | | (689 | ) | | | (762 | ) | | | (1,271 | ) | | | (1,583 | ) | | | (1,279 | ) | | | (2,722 | ) | | | (3,684 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total gross charge-offs (3) | | | (2,157 | ) | | | (12,011 | ) | | | (3,265 | ) | | | (3,318 | ) | | | (3,333 | ) | | | (17,433 | ) | | | (8,272 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recoveries: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 458 | | | | 476 | | | | 188 | | | | 212 | | | | 205 | | | | 1,122 | | | | 936 | |
| Commercial real estate | | | 129 | | | | 57 | | | | 50 | | | | 4 | | | | 4 | | | | 236 | | | | 17 | |
| Retail real estate | | | 130 | | | | 78 | | | | 10 | | | | 141 | | | | 24 | | | | 218 | | | | 96 | |
| All other | | | 355 | | | | 469 | | | | 436 | | | | 395 | | | | 279 | | | | 1,260 | | | | 1,627 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total recoveries | | | 1,072 | | | | 1,080 | | | | 684 | | | | 752 | | | | 512 | | | | 2,836 | | | | 2,676 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total net charge-offs | | | (1,085 | ) | | | (10,931 | ) | | | (2,581 | ) | | | (2,566 | ) | | | (2,821 | ) | | | (14,597 | ) | | | (5,596 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance to ending loans, net of unearned income | | | 1.27 | % | | | 1.15 | % | | | 1.56 | % | | | 1.62 | % | | | 1.54 | % | | | 1.27 | % | | | 1.54 | % |
Nonperforming assets to ending loans, net of unearned income plus OREO(2) | | | 0.88 | % | | | 0.58 | % | | | 1.25 | % | | | 1.20 | % | | | 1.02 | % | | | 0.88 | % | | | 1.02 | % |
90 days past due to loans, net of unearned income(2) | | | 0.03 | % | | | 0.03 | % | | | 0.04 | % | | | 0.05 | % | | | 0.07 | % | | | 0.03 | % | | | 0.07 | % |
Net charge-offs to average loans, net of unearned income (3) | | | 0.17 | % | | | 1.68 | % | | | 0.40 | % | | | 0.38 | % | | | 0.40 | % | | | 0.75 | % | | | 0.27 | % |
| | |
| (1) | | The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
| |
| (2) | | June 30, 2006 amounts and ratios exclude loans held for sale. |
| |
| (3) | | June 30, 2006 charge-offs include $8,356 in loans held for sale write-downs to the lower of cost or estimated fair market value. |
| |
| (4) | | Includes loans held for sale |
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Three months ended, | | | | | | | | | | | Nine months ended, | |
| | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | | | Sep. 30, | | | Sep. 30, | |
| | | 2006 | | | 2006 | | | 2006 | | | 2005 | | | 2005 | | | 2006 | | | 2005 | |
| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans, including fees | | $ | 45,484 | | | $ | 44,386 | | | $ | 42,857 | | | $ | 42,766 | | | $ | 44,122 | | | $ | 132,727 | | | $ | 129,870 | |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 3,728 | | | | 3,798 | | | | 5,141 | | | | 5,481 | | | | 5,219 | | | | 12,667 | | | | 16,016 | |
| Tax-exempt | | | 996 | | | | 1,057 | | | | 1,104 | | | | 1,173 | | | | 1,221 | | | | 3,157 | | | | 3,690 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total investment securities interest | | | 4,724 | | | | 4,855 | | | | 6,245 | | | | 6,654 | | | | 6,440 | | | | 15,824 | | | | 19,706 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits with other banks | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 1 | |
| Federal funds sold and securities purchased under agreements to resell | | | 2,116 | | | | 1,500 | | | | 1,582 | | | | 1,297 | | | | 178 | | | | 5,198 | | | | 403 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest income | | | 52,324 | | | | 50,741 | | | | 50,684 | | | | 50,717 | | | | 50,740 | | | | 153,749 | | | | 149,980 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 19,176 | | | | 16,554 | | | | 14,933 | | | | 14,015 | | | | 12,779 | | | | 50,663 | | | | 34,639 | |
| Short-term borrowings | | | 953 | | | | 892 | | | | 896 | | | | 473 | | | | 520 | | | | 2,741 | | | | 1,488 | |
| Long-term borrowings | | | 686 | | | | 709 | | | | 2,058 | | | | 3,720 | | | | 3,769 | | | | 3,453 | | | | 11,358 | |
| Subordinated debentures and capital securities | | | 686 | | | | 639 | | | | 598 | | | | 570 | | | | 529 | | | | 1,923 | | | | 1,467 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest expense | | | 21,501 | | | | 18,794 | | | | 18,485 | | | | 18,778 | | | | 17,597 | | | | 58,780 | | | | 48,952 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 30,823 | | | | 31,947 | | | | 32,199 | | | | 31,939 | | | | 33,143 | | | | 94,969 | | | | 101,028 | |
| Provision for loan losses | | | 2,888 | | | | 360 | | | | 752 | | | | 3,015 | | | | 1,351 | | | | 4,000 | | | | 2,556 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 27,935 | | | | 31,587 | | | | 31,447 | | | | 28,924 | | | | 31,792 | | | | 90,969 | | | | 98,472 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 5,672 | | | | 5,431 | | | | 5,089 | | | | 5,257 | | | | 4,944 | | | | 16,192 | | | | 13,719 | |
| Trust revenues | | | 3,756 | | | | 3,882 | | | | 4,053 | | | | 4,041 | | | | 3,974 | | | | 11,691 | | | | 11,947 | |
| Bankcard interchange income | | | 1,700 | | | | 1,745 | | | | 1,648 | | | | 1,621 | | | | 1,577 | | | | 5,093 | | | | 4,565 | |
| Investment advisory fees | | | 711 | | | | 801 | | | | 846 | | | | 976 | | | | 936 | | | | 2,358 | | | | 2,604 | |
| Gains (losses) from sales of loans | | | 2,468 | | | | 259 | | | | 245 | | | | 1,239 | | | | (1,280 | ) | | | 2,972 | | | | (336 | ) |
| Gain on sale of branches | | | 12,545 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 12,545 | | | | 0 | |
| (Losses) gains on sales of investment securities | | | 0 | | | | 0 | | | | (476 | ) | | | (6,519 | ) | | | 6 | | | | (476 | ) | | | 0 | |
| Other | | | 3,577 | | | | 3,723 | | | | 3,349 | | | | 2,764 | | | | 3,852 | | | | 10,649 | | | | 11,384 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total noninterest income | | | 30,429 | | | | 15,841 | | | | 14,754 | | | | 9,379 | | | | 14,009 | | | | 61,024 | | | | 43,883 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 19,968 | | | | 23,110 | | | | 20,217 | | | | 20,270 | | | | 19,353 | | | | 63,295 | | | | 57,420 | |
| Net occupancy | | | 2,802 | | | | 2,698 | | | | 2,839 | | | | 2,555 | | | | 2,465 | | | | 8,339 | | | | 7,055 | |
| Furniture and equipment | | | 1,297 | | | | 1,334 | | | | 1,480 | | | | 1,297 | | | | 1,694 | | | | 4,111 | | | | 4,979 | |
| Data processing | | | 3,058 | | | | 3,393 | | | | 1,944 | | | | 1,785 | | | | 1,776 | | | | 8,395 | | | | 5,082 | |
| Marketing | | | 1,138 | | | | 647 | | | | 683 | | | | 704 | | | | 535 | | | | 2,468 | | | | 1,760 | |
| Communication | | | 821 | | | | 642 | | | | 667 | | | | 831 | | | | 758 | | | | 2,130 | | | | 2,254 | |
| Professional services | | | 2,275 | | | | 1,669 | | | | 1,307 | | | | 2,088 | | | | 1,465 | | | | 5,251 | | | | 4,378 | |
| Amortization of intangibles | | | 220 | | | | 224 | | | | 217 | | | | 220 | | | | 220 | | | | 661 | | | | 660 | |
| Debt extinguishment | | | 0 | | | | 0 | | | | 4,295 | | | | 0 | | | | 0 | | | | 4,295 | | | | 0 | |
| Other | | | 7,755 | | | | 6,979 | | | | 7,011 | | | | 6,009 | | | | 6,466 | | | | 21,745 | | | | 17,889 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total noninterest expenses | | | 39,334 | | | | 40,696 | | | | 40,660 | | | | 35,759 | | | | 34,732 | | | | 120,690 | | | | 101,477 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Earnings from continuing operations before income taxes | | | 19,030 | | | | 6,732 | | | | 5,541 | | | | 2,544 | | | | 11,069 | | | | 31,303 | | | | 40,878 | |
| Income tax expense (benefit) | | | 6,911 | | | | 2,374 | | | | 1,574 | | | | (290 | ) | | | 3,250 | | | | 10,859 | | | | 12,904 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Earnings from continuing operations | | | 12,119 | | | | 4,358 | | | | 3,967 | | | | 2,834 | | | | 7,819 | | | | 20,444 | | | | 27,974 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Discontinued operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other operating (loss) income | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | (140 | ) | | | 0 | | | | 583 | |
| Gain on discontinued operations | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 10,366 | | | | 0 | | | | 10,366 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Earnings from discontinued operations before income taxes | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 10,226 | | | | 0 | | | | 10,949 | |
| Income tax expense | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 3,561 | | | | 0 | | | | 3,824 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Earnings from discontinued operations | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 6,665 | | | | 0 | | | | 7,125 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net earnings | | $ | 12,119 | | | $ | 4,358 | | | $ | 3,967 | | | $ | 2,834 | | | $ | 14,484 | | | $ | 20,444 | | | $ | 35,099 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADDITIONAL DATA — FULLY TAX EQUIVALENT NET INTEREST INCOME* | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 52,324 | | | $ | 50,741 | | | $ | 50,684 | | | $ | 50,717 | | | $ | 50,740 | | | $ | 153,749 | | | $ | 149,980 | |
| Tax equivalent adjustment | | | 586 | | | | 696 | | | | 661 | | | | 723 | | | | 746 | | | | 1,943 | | | | 2,260 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Interest income — tax equivalent | | | 52,910 | | | | 51,437 | | | | 51,345 | | | | 51,440 | | | | 51,486 | | | | 155,692 | | | | 152,240 | |
| Interest expense | | | 21,501 | | | | 18,794 | | | | 18,485 | | | | 18,778 | | | | 17,597 | | | | 58,780 | | | | 48,952 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income — tax equivalent | | $ | 31,409 | | | $ | 32,643 | | | $ | 32,860 | | | $ | 32,662 | | | $ | 33,889 | | | $ | 96,912 | | | $ | 103,288 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | |
| * | | The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | |
| | | Sep.30, | | | Dec. 31, | | | Sep. 30, | |
| | | 2006 | | | 2005 | | | 2005 | |
ASSETS | | | | | | | | | | | | |
| Cash and due from banks | | $ | 117,067 | | | $ | 163,281 | | | $ | 156,446 | |
| Federal funds sold and securities purchased under agreements to resell | | | 101,000 | | | | 98,000 | | | | 48,000 | |
| Investment securities, held-to-maturity | | | 8,059 | | | | 12,555 | | | | 14,227 | |
| Investment securities, available-for-sale | | | 329,225 | | | | 554,673 | | | | 564,766 | |
| Other investments | | | 34,137 | | | | 40,755 | | | | 40,420 | |
| Loans | | | | | | | | | | | | |
| Commercial | | | 663,522 | | | | 582,594 | | | | 587,691 | |
| Real estate — construction | | | 92,434 | | | | 86,022 | | | | 103,314 | |
| Real estate — commercial | | | 625,535 | | | | 646,079 | | | | 622,237 | |
| Real estate — retail | | | 653,652 | | | | 772,334 | | | | 857,763 | |
| Installment, net of unearned | | | 219,677 | | | | 300,551 | | | | 324,217 | |
| Home equity | | | 231,741 | | | | 214,649 | | | | 212,335 | |
| Credit card | | | 23,083 | | | | 22,936 | | | | 21,258 | |
| Lease financing | | | 1,202 | | | | 2,258 | | | | 3,002 | |
| | | | | | | | | | |
| Total loans | | | 2,510,846 | | | | 2,627,423 | | | | 2,731,817 | |
| Less | | | | | | | | | | | | |
| Allowance for loan losses | | | 31,888 | | | | 42,485 | | | | 42,036 | |
| | | | | | | | | | |
| Net loans | | | 2,478,958 | | | | 2,584,938 | | | | 2,689,781 | |
| Premises and equipment | | | 78,820 | | | | 73,025 | | | | 72,044 | |
| Goodwill | | | 28,261 | | | | 28,116 | | | | 28,117 | |
| Other intangibles | | | 6,471 | | | | 7,920 | | | | 7,490 | |
| Accrued interest and other assets | | | 125,084 | | | | 127,545 | | | | 120,000 | |
| | | | | | | | | | |
Total Assets | | $ | 3,307,082 | | | $ | 3,690,808 | | | $ | 3,741,291 | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Interest-bearing | | $ | 225,670 | | | $ | 247,187 | | | $ | 264,413 | |
| Savings | | | 971,055 | | | | 989,990 | | | | 981,517 | |
| Time | | | 1,198,059 | | | | 1,247,274 | | | | 1,252,073 | |
| | | | | | | | | | |
| Total interest-bearing deposits | | | 2,394,784 | | | | 2,484,451 | | | | 2,498,003 | |
| Noninterest-bearing | | | 381,937 | | | | 440,988 | | | | 431,736 | |
| | | | | | | | | | |
| Total deposits | | | 2,776,721 | | | | 2,925,439 | | | | 2,929,739 | |
| Short-term borrowings | | | | | | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 54,129 | | | | 66,634 | | | | 58,273 | |
| Other | | | 39,000 | | | | 45,000 | | | | 0 | |
| | | | | | | | | | |
| Total short-term borrowings | | | 93,129 | | | | 111,634 | | | | 58,273 | |
| Federal Home Loan Bank long-term debt | | | 68,197 | | | | 286,655 | | | | 317,660 | |
| Other long-term debt | | | 30,930 | | | | 30,930 | | | | 30,930 | |
| Accrued interest and other liabilities | | | 38,580 | | | | 36,269 | | | | 35,541 | |
| | | | | | | | | | |
Total Liabilities | | | 3,007,557 | | | | 3,390,927 | | | | 3,372,143 | |
| | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
| Common stock | | | 392,156 | | | | 392,607 | | | | 391,962 | |
| Retained earnings | | | 76,783 | | | | 75,357 | | | | 79,375 | |
| Accumulated comprehensive income | | | (8,581 | ) | | | (7,876 | ) | | | (6,695 | ) |
| Treasury stock, at cost | | | (160,833 | ) | | | (160,207 | ) | | | (95,494 | ) |
| | | | | | | | | | |
Total Shareholders’ Equity | | | 299,525 | | | | 299,881 | | | | 369,148 | |
| | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 3,307,082 | | | $ | 3,690,808 | | | $ | 3,741,291 | |
| | | | | | | | | | |
ADDITIONAL DATA — RISK BASED CAPITAL
| | | | | | | | | | | | | | | | | | | | | |
| | | Sep. 30, | | June 30, | | March 31, | | Dec. 31, | | Sep. 30, |
| | | 2006 | | 2006 | | 2006 | | 2005 | | 2005 |
| Tier 1 Capital | | $ | 300,551 | | | $ | 296,334 | | | $ | 297,602 | | | $ | 299,680 | | | $ | 369,735 | |
| Tier 1 Ratio | | | 11.89 | % | | | 11.37 | % | | | 11.58 | % | | | 11.49 | % | | | 13.93 | % |
| Total Capital | | $ | 332,302 | | | $ | 326,464 | | | $ | 329,897 | | | $ | 332,458 | | | $ | 403,044 | |
| Total Capital Ratio | | | 13.14 | % | | | 12.52 | % | | | 12.83 | % | | | 12.75 | % | | | 15.19 | % |
| Total Risk-Adjusted Assets | | $ | 2,528,102 | | | $ | 2,606,871 | | | $ | 2,570,847 | | | $ | 2,608,167 | | | $ | 2,653,795 | |
| Leverage Ratio | | | 8.85 | % | | | 8.72 | % | | | 8.47 | % | | | 8.12 | % | | | 9.74 | % |
FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Quarterly Averages | | | | | | | | | | | Year-to-Date Averages | |
| | | Sep. 30, | | | June 30, | | | March 31, | | | Dec. 31, | | | Sep. 30, | | | Sep. 30, | |
| | | 2006 | | | 2006 | | | 2006 | | | 2005 | | | 2005 | | | 2006 | | | 2005 | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 109,896 | | | $ | 115,406 | | | $ | 123,129 | | | $ | 129,663 | | | $ | 124,833 | | | $ | 116,095 | | | $ | 121,923 | |
| Interest-bearing deposits with other banks | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 49 | |
| Federal funds sold and securities purchased under agreements to resell | | | 158,940 | | | | 122,413 | | | | 141,513 | | | | 127,701 | | | | 20,938 | | | | 141,019 | | | | 18,717 | |
| Investment securities | | | 370,095 | | | | 380,532 | | | | 497,528 | | | | 620,868 | | | | 625,418 | | | | 415,585 | | | | 638,729 | |
| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 642,378 | | | | 626,912 | | | | 580,681 | | | | 577,096 | | | | 595,166 | | | | 616,883 | | | | 613,144 | |
Real
estate-construction | | | 94,135 | | | | 83,719 | | | | 85,672 | | | | 94,508 | | | | 96,845 | | | | 87,873 | | | | 88,771 | |
Real
estate-commercial | | | 611,602 | | | | 651,156 | | | | 642,386 | | | | 629,497 | | | | 623,829 | | | | 634,935 | | | | 620,475 | |
| Real estate-retail | | | 709,539 | | | | 743,948 | | | | 762,353 | | | | 806,516 | | | | 862,600 | | | | 738,420 | | | | 860,846 | |
| Installment, net of unearned | | | 235,492 | | | | 262,019 | | | | 287,182 | | | | 312,215 | | | | 370,194 | | | | 261,375 | | | | 377,623 | |
| Home equity | | | 229,583 | | | | 222,878 | | | | 214,675 | | | | 213,135 | | | | 210,221 | | | | 222,433 | | | | 203,467 | |
| Credit card | | | 22,741 | | | | 22,017 | | | | 21,748 | | | | 21,517 | | | | 21,224 | | | | 22,172 | | | | 20,771 | |
| Lease financing | | | 1,290 | | | | 1,599 | | | | 2,058 | | | | 2,672 | | | | 3,236 | | | | 1,646 | | | | 3,934 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total loans | | | 2,546,760 | | | | 2,614,248 | | | | 2,596,755 | | | | 2,657,156 | | | | 2,783,315 | | | | 2,585,737 | | | | 2,789,031 | |
| Less | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses | | | 30,284 | | | | 40,445 | | | | 42,402 | | | | 41,741 | | | | 42,630 | | | | 37,666 | | | | 43,808 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net loans | | | 2,516,476 | | | | 2,573,803 | | | | 2,554,353 | | | | 2,615,415 | | | | 2,740,685 | | | | 2,548,071 | | | | 2,745,223 | |
| Loans held for sale | | | 33,245 | | | | 350 | | | | 0 | | | | 0 | | | | 0 | | | | 11,320 | | | | 0 | |
| Premises and equipment | | | 78,798 | | | | 76,150 | | | | 73,556 | | | | 72,351 | | | | 71,256 | | | | 76,187 | | | | 69,058 | |
| Goodwill | | | 28,260 | | | | 28,261 | | | | 28,134 | | | | 28,120 | | | | 28,478 | | | | 28,219 | | | | 28,572 | |
| Other intangibles | | | 6,721 | | | | 7,214 | | | | 7,703 | | | | 7,820 | | | | 7,480 | | | | 7,209 | | | | 7,530 | |
| Accrued interest and other assets | | | 123,986 | | | | 124,710 | | | | 119,496 | | | | 117,259 | | | | 123,395 | | | | 122,748 | | | | 114,954 | |
| Assets related to discontinued operations | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 84,912 | | | | 0 | | | | 97,480 | |
| | | | | | �� | | | | | | | | | | | | | | | | |
Total Assets | | $ | 3,426,417 | | | $ | 3,428,839 | | | $ | 3,545,412 | | | $ | 3,719,197 | | | $ | 3,827,395 | | | $ | 3,466,453 | | | $ | 3,842,235 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing | | $ | 235,762 | | | $ | 180,046 | | | $ | 203,363 | | | $ | 180,999 | | | $ | 187,458 | | | $ | 206,509 | | | $ | 169,014 | |
| Savings | | | 1,025,025 | | | | 1,062,334 | | | | 1,040,940 | | | | 1,018,271 | | | | 1,031,441 | | | | 1,042,708 | | | | 1,045,154 | |
| Time | | | 1,232,111 | | | | 1,234,646 | | | | 1,242,033 | | | | 1,288,792 | | | | 1,254,798 | | | | 1,236,227 | | | | 1,258,505 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total
interest-bearing
deposits | | | 2,492,898 | | | | 2,477,026 | | | | 2,486,336 | | | | 2,488,062 | | | | 2,473,697 | | | | 2,485,444 | | | | 2,472,673 | |
| Noninterest-bearing | | | 401,685 | | | | 424,227 | | | | 417,061 | | | | 433,228 | | | | 428,881 | | | | 414,268 | | | | 429,221 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 2,894,583 | | | | 2,901,253 | | | | 2,903,397 | | | | 2,921,290 | | | | 2,902,578 | | | | 2,899,712 | | | | 2,901,894 | |
| Short-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 53,958 | | | | 49,563 | | | | 51,592 | | | | 58,923 | | | | 75,131 | | | | 51,713 | | | | 68,046 | |
| Federal Home Loan Bank short-term borrowings | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 11,618 | | | | 0 | | | | 21,652 | |
| Other | | | 37,673 | | | | 39,819 | | | | 45,822 | | | | 13,209 | | | | 10,155 | | | | 41,075 | | | | 7,619 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total short-term borrowings | | | 91,631 | | | | 89,382 | | | | 97,414 | | | | 72,132 | | | | 96,904 | | | | 92,788 | | | | 97,317 | |
| Federal Home Loan Bank long-term debt | | | 78,295 | | | | 82,480 | | | | 185,399 | | | | 315,326 | | | | 319,105 | | | | 114,999 | | | | 323,816 | |
| Other long-term debt | | | 30,930 | | | | 30,930 | | | | 30,930 | | | | 30,930 | | | | 30,930 | | | | 30,930 | | | | 30,930 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total borrowed funds | | | 200,856 | | | | 202,792 | | | | 313,743 | | | | 418,388 | | | | 446,939 | | | | 238,717 | | | | 452,063 | |
| Accrued interest and other liabilities | | | 32,069 | | | | 28,707 | | | | 29,694 | | | | 28,585 | | | | 32,694 | | | | 30,165 | | | | 29,339 | |
| Liabilities related to discontinued operations | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 77,712 | | | | 0 | | | | 89,692 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 3,127,508 | | | | 3,132,752 | | | | 3,246,834 | | | | 3,368,263 | | | | 3,459,923 | | | | 3,168,594 | | | | 3,472,988 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | 391,325 | | | | 392,354 | | | | 392,666 | | | | 392,253 | | | | 391,773 | | | | 392,110 | | | | 392,090 | |
| Retained earnings | | | 77,487 | | | | 73,237 | | | | 73,710 | | | | 80,135 | | | | 74,114 | | | | 74,825 | | | | 70,280 | |
| Accumulated comprehensive income | | | (10,708 | ) | | | (9,999 | ) | | | (7,538 | ) | | | (8,323 | ) | | | (6,301 | ) | | | (9,427 | ) | | | (5,538 | ) |
| Treasury stock, at cost | | | (159,195 | ) | | | (159,505 | ) | | | (160,260 | ) | | | (113,131 | ) | | | (92,114 | ) | | | (159,649 | ) | | | (87,585 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Shareholders’ Equity | | | 298,909 | | | | 296,087 | | | | 298,578 | | | | 350,934 | | | | 367,472 | | | | 297,859 | | | | 369,247 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 3,426,417 | | | $ | 3,428,839 | | | $ | 3,545,412 | | | $ | 3,719,197 | | | $ | 3,827,395 | | | $ | 3,466,453 | | | $ | 3,842,235 | |
| | | | | | | | | | | | | | | | | | | | | | |
