| | |
 | | EXHIBIT 99.1
|
| | | Another step on the path to success |
FOR IMMEDIATE RELEASE
| | | |
Media Contact: | | Cheryl Lipp |
| | | (513) 979-5797 |
| | | cheryl.lipp@bankatfirst.com |
| | | |
Analyst Contact: | | J. Franklin Hall |
| | | (513) 979-5770 |
| | | frank.hall@bankatfirst.com |
First Financial Bancorp Reports Second Quarter 2008 Financial Results
| | • | | Second quarter 2008 net earnings of $0.21 per diluted share |
| |
| | • | | Continued strong growth in average commercial, commercial real estate, and construction loans of 14.6 percent from second quarter 2007 |
| |
| | • | | Nonperforming loans, as a percent of total loans, have remained stable for five consecutive quarters |
| |
| | • | | Regulatory capital ratios remain strong and significantly exceed regulatory “well-capitalized” classification |
| |
| | • | | Second quarter 2008 return on average assets of 0.93 percent and return on average shareholders’ equity of 11.26 percent |
Cincinnati, Ohio – July 29, 2008 – First Financial Bancorp (Nasdaq: FFBC) president and chief executive officer, Claude E. Davis, today announced second quarter 2008 net income of $7.8 million or 21 cents in diluted earnings per share, compared to $8.2 million or 21 cents in diluted earnings per share for the second quarter 2007 and $7.3 million or 20 cents in diluted earnings per share in the first quarter 2008. First Financial also announced year-to-date 2008 net income of $15.1 million or 40 cents in diluted earnings per share, compared to $16.6 million or 43 cents in diluted earnings per share for the same period in 2007.
Davis said, “We continue to manage the company through this difficult time for the banking sector, and the economy in general, by remaining focused on credit quality, balance sheet management, and capital. Our second quarter performance reflects our success in these efforts. First Financial is well positioned to avoid many of the troublesome areas facing our industry including liquidity, capital and credit as we have built quality and seek to preserve it in these key areas.”
Return on average assets for the second quarter 2008 was 0.93 percent compared to 1.00 percent for the second quarter 2007 and 0.89 percent for the first quarter 2008. Year-to-date return on average assets was 0.91 percent for 2008 compared to 1.02 percent for the same period in 2007. Return on average shareholders’ equity was 11.26 percent for the second quarter 2008 compared to 11.61 percent for the same period in 2007 and 10.66 percent for
the first quarter 2008. Year-to-date return on average shareholders’ equity was 10.96 percent for 2008 compared to 11.78 percent for the same period in 2007.
Unless otherwise noted, all amounts discussed in the earnings release are pre-tax except net income and per-share data which are presented after-tax. Percentage changes are not annualized unless specifically noted.
CREDIT QUALITY
First Financial’s credit quality metrics continue to be favorably impacted by its consistent focus on strong underwriting and the 2005 strategic decision to shift away from certain consumer-based lending. While the performance of certain real estate and consumer-based lending products has continued to decline as a result of the broad economic downturn, First Financial’s overall credit quality remains stable. As the composition of the total loan portfolio migrates from consumer-based lending, the expected effects on First Financial from such economic conditions, relative to the industry, should be less severe. Additionally, the mix of the total loan portfolio has shifted not only in product type, but in the risk profile of the borrowers due to the improvements in both underwriting and in the resolution strategies used for problem credits. However, there always remains the possibility of an unexpected event or a further deterioration in the economy which could lead to higher credit costs.
Total nonperforming assets have remained relatively consistent over the past five quarters with the ratio of non-performing assets to total assets ranging from a low of 51 basis points to a high of 55 basis points. At the end of the second quarter 2008, total nonperforming assets were $19.1 million, an increase of $1.5 million from the end of the first quarter 2008. Compared to the end of the first quarter 2008, the ratio of nonperforming loans to total loans decreased 1 basis point to 57 basis points at the end of the second quarter 2008, and the ratio of nonperforming assets to period-end loans, plus other real estate owned, increased 4 basis points to 71 basis points at the end of the second quarter 2008. Other real estate owned increased $1.4 million during the second quarter 2008 and was equally spilt between commercial and residential categories. A number of the properties are under sale contract and we do not anticipate lengthy holding periods.
Delinquency trends have remained relatively stable over the past five quarters with total loans 30-89 days past due, at June 30, 2008, of $22.1 million or 0.83 percent of period end loans. Since the end of the second quarter of 2008, approximately $3.9 million of these delinquencies have either been paid down or resolved. Management closely monitors these trends and ratios and considers the current level of delinquent loans consistent with our expectations of the total loan portfolio’s behavior.
First Financial’s allowance for loan and lease loss was $29.6 million at June 30, 2008 compared to $29.7 million at March 31, 2008, and $28.1 million at June 30, 2007. The allowance for loan and lease loss at June 30, 2008, was 2.8
• Page 2
times the second quarter annualized net charge-offs, consistent with the 2.9 times at March 31, 2008. The allowance for loan and lease losses to period-end loans ratio was 1.11 percent as of June 30, 2008, compared to the June 30, 2007, and March 31, 2008, ratios of 1.10 percent and 1.14 percent, respectively. Overall credit coverage ratios remain strong at June 30, 2008, with the allowance for loan and lease losses as a percent of nonaccrual loans and as a percent of nonperforming loans at 199.70 percent and 192.50 percent, respectively. The allowance for loan and lease losses to period-end loans ratio is based on our estimate of potential losses inherent in the loan portfolio in today’s economic environment. A large percentage of nonperforming assets are secured by real estate, and this collateral has been appropriately considered in establishing the allowance for loan and lease losses.
At June 30, 2008, the commercial real estate and real estate construction loan portfolio totaled $955.7 million, or 35.7 percent of total loans, including $136.0 million or 5.1 percent of total loans for commercial real estate construction, and $50.2 million or 1.9 percent of total loans, for residential construction, land acquisition, and development. In this challenging environment lenders are closely monitoring the status of all residential construction and land development projects and First Financial is no different. At June 30, 2008, First Financial had one construction and development loan totalling $0.5 million reported as a nonperforming loan. First Financial believes its internal lending policies, comprehensive underwriting standards and aggressive monitoring and frequent communication with borrowers are key to limiting credit exposure from both the residential construction and land acquisition and development segments in any particular project.
First Financial continually evaluates the commercial real estate and real estate construction portfolio for geographic and borrower concentrations, as well as loan-to-value coverage, and believes its credit underwriting processes are producing a prudent and acceptable level of credit exposure.
Shared national credit exposure for First Financial is approximately $37 million or 1.4 percent of total loans, and is dispersed among 40 credits. These loans were acquired over the past 18 months and have no single credit exposure greater than $2 million. These loans are held in the loan portfolio and each has been subjected to the customary commercial loan underwriting process and is routinely monitored for credit deterioration. As of the June 30, 2008, the values and reserves for these loans were deemed appropriate.
Since the second quarter 2007, First Financial has experienced 11.2 percent growth in its total home equity loan portfolio average balances. While this category of loans has proven problematic for some in our industry, First Financial believes its underwriting criteria coupled with the monitoring of a number of metrics including credit scores, loan-to-value ratios, line size, and usage, provides adequate oversight for the growth. The origination methods for our home equity lending also keep both the credit decision and the documentation under the control of First Financial associates. Our recent spike in credit losses for home equity is attributable to a few large credits that
• Page 3
were originated several years ago, prior to the standardization of our underwriting guidelines. The remaining portfolio of loans that have a similar profile have been reviewed and have been appropriately accounted for in the second quarter. At June 30, 2008, approximately 98 percent of the outstanding home equity loans had a credit line size of less than $250 thousand and had an average outstanding balance of $24 thousand. First Financial maintains a strong pricing discipline for its home equity loan product and does not sacrifice loan quality for growth.
In the second quarter 2005, First Financial made the strategic decisions to discontinue the origination of residential real estate loans for retention on its balance sheet and to exit indirect installment lending. As a result, the residential real estate and indirect installment loan portfolios have declined $215 million and $214 million, respectively, excluding the impact of the loan sales, since that time. In the first quarter 2007, First Financial sold the servicing of its remaining residential real estate portfolio and established an agreement to sell substantially all of its future originations to a strategic partner. Prior to this decision, First Financial was not a sub-prime lender, and the company does not originate sub-prime residential real estate loans in the current originate-and-sell model.
It is management’s belief that the $29.6 million allowance for loan and lease losses at June 30, 2008, is adequate to absorb probable credit losses inherent in the portfolio.
Second Quarter 2008 vs. First Quarter 2008
Second quarter 2008 net charge-offs were $2.6 million, an annualized 40 basis points of average loans, consistent with the first quarter 2008 net charge-offs of $2.6 million, an annualized 40 basis points of average loans. Both quarters were adversely impacted by a few large home equity loan charge-offs totalling approximately 7 basis points in the second quarter 2008 and 8 basis points in the first quarter 2008. Based on our current knowledge, we believe this two quarter volatility, in terms of individual loan charge-off size, is unusual and we expect that overall charge-off levels for home equity should return to historical levels.
Total nonperforming assets at the end of the second quarter 2008 were $19.1 million, an increase of $1.5 million from the end of the first quarter 2008. The ratio of nonperforming loans to total loans decreased from 58 basis points at the end of the first quarter 2008 to 57 basis points at the end of the second quarter 2008, and the ratio of nonperforming assets to period-end loans, plus other real estate owned, increased from 67 basis points at the end of the first quarter 2008 to 71 basis points at the end of the second quarter 2008.
Second Quarter 2008 vs. Second Quarter 2007
Second quarter 2008 net charge-offs were $2.6 million, an annualized 40 basis points of average loans, compared to second quarter 2007 net charge-offs of $1.4 million, an annualized 23 basis points of average loans. Approximately $0.5 million or 7 basis points of the increase is due to the impact of two large home equity loan
• Page 4
charge-offs. From an industry perspective, home equity lending may continue to experience stress, as borrowers come under continued pressure in the current economic environment. First Financial’s overall credit quality metrics for its home equity loan portfolio continue to remain stable, as over the past eight quarters both the home equity net charge-off ratio and ratio of nonaccrual home equity loans to total home equity loans have consistently been below 50 basis points, when the previously mentioned first quarter 2008 home equity loan charge-offs are excluded. First Financial has underwritten all home equity loans held in its portfolio and has not utilized the much publicized brokerage channel for originations. First Financial continues to actively monitor its home equity loan portfolio but may experience some volatility in upcoming quarters.
Total nonperforming assets at the end of the second quarter 2008 were $19.1 million, an increase of $2.1 million from the end of the second quarter 2007 primarily due to a higher level of nonaccrual residential loans and other real estate owned, offset by a decline in both commercial and commercial real estate loans. The ratio of nonperforming loans to total loans decreased from 59 basis points at the end of the second quarter 2007 to 57 basis points at the end of the second quarter 2008. The ratio of nonperforming assets to period-end loans, plus other real estate owned, increased from 67 basis points at the end of the second quarter 2007 to 71 basis points at the end of the second quarter 2008.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date 2008 net charge-offs were $5.2 million, an annualized 40 basis points of average loans or 32 basis points of average loans excluding the previously mentioned large home equity loan charge-offs. Year-to-date 2007 net charge-offs were $2.8 million, an annualized 22 basis points of average loans.
For further details on the quarter-over-quarter and year-to-date changes in credit quality, please see the attached Credit Quality schedule.
CAPITAL
Consolidated regulatory capital ratios at June 30, 2008, included the leverage ratio of 8.21 percent, Tier 1 ratio of 9.99 percent, and total capital ratio of 11.06 percent. All regulatory capital ratios exceeded the amounts necessary to be classified as “well capitalized,” and total regulatory capital exceeded the “minimum” requirement by approximately $84.1 million, on a consolidated basis. The tangible capital ratio decreased from 7.55 percent at March 31, 2008, to 7.18 percent at June 30, 2008, primarily as a result of loan and investment portfolio growth.
• Page 5
First Financial Bank, N.A., the subsidiary bank, regulatory capital ratios at June 30, 2008 included the leverage ratio of 9.19 percent, Tier 1 ratio of 11.18 percent, and total capital ratio of 12.53 percent.
Forecasted growth in certain earning asset classes is expected to continue while risk-based capital relief is expected from other balance sheet strategies under consideration for execution in the third and fourth quarters including asset securitizations and non-strategic asset sales, which would likely generate non-recurring gains. First Financial remains vigilant in the management of its capital adequacy and has evaluated its proforma capital under certain stress case scenarios. First Financial has sufficient capital to manage through extreme and extended periods of stress. It is important to note, however, First Financial does not expect to experience these extreme levels of stress and remains comfortable with charge-off estimates of approximately 30 to 40 basis points.
NET INTEREST INCOME AND NET INTEREST MARGIN
Second Quarter 2008 vs. First Quarter 2008
Net interest income on a linked-quarter (second quarter 2008 compared to first quarter 2008) basis increased from $28.2 million in the first quarter 2008 to $28.4 million in the second quarter 2008, a $0.2 million or 2.3 percent annualized increase. The increase in net interest income is primarily due to the growth in the investment portfolio combined with disciplined pricing on deposits, substantially offsetting the impact on loan yields from the decline in market interest rates. Linked-quarter net interest margin decreased 6 basis points from 3.78 percent to 3.72 percent reflecting the impact of the 225 basis point reduction in the federal funds rate during the first half of 2008 and a 3 basis point negative impact from the increase in earning assets related to the investment portfolio. On a tax-equivalent basis, the second quarter 2008 net interest margin was 3.78 percent as compared to 3.85 percent for the first quarter 2008. The pace and magnitude of the recent changes to the federal funds target rate has created a more significant impact on the liability costs for the current reporting period.
Second Quarter 2008 vs. Second Quarter 2007
Net interest income in the second quarter 2008 was $28.4 million compared to $29.6 million in the second quarter 2007, a decrease of $1.2 million or 4.0 percent. Second quarter 2008 net interest margin of 3.72 percent decreased 25 basis points from 3.97 percent for the second quarter 2007. The decline in net interest income and margin is primarily a result of actions by the Federal Reserve to address the current economic conditions, including the consumer mortgage crisis, by lowering the federal funds rate by 325 basis points over the past twelve months, and the resulting impact on our asset sensitive balance sheet. Earning asset growth in the commercial, commercial real estate, and construction loan portfolios, as well as in the investment securities portfolio, partially offset the effects of the decline in market interest rates.
• Page 6
On a tax equivalent basis, the second quarter 2008 net interest margin of 3.78 percent decreased 27 basis points from 4.05 percent for the second quarter 2007.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date net interest income was $56.7 million in 2008 compared to $60.0 million in 2007, a $3.3 million or 5.6 percent decrease. Approximately 5 basis points of the year-to-date 2007 net interest margin was due to the impact of an accrual of income to convert certain consumer loans from a cycle-date basis of income recognition to a calendar-month basis. The year-to-date 2007 adjusted net interest margin, excluding the impact of this accrual, was a 4.00 percent decrease. The remaining decline in net interest income and margin is primarily a result of the previously mentioned decline in market interest rates, partially offset by a slight increase in overall earning asset levels and the continued mix shift in their composition. Year-to-date, the cost of the approximate $512 million of time deposit originations relative to the approximate $598 million in maturities has been approximately 125 basis points lower, with a reduction in overall marginal funding costs of approximately 135 basis points, after accounting for the net runoff of the time deposit portfolio.
Year-to-date net interest margin was 3.75 percent in 2008, compared to 4.00 percent in 2007 when adjusted for the year-to-date impact of the interest accrual noted earlier. On a tax-equivalent year-to-date basis, net interest margin was 3.81 percent in 2008 compared to an adjusted 4.08 percent in 2007.
For further details on the quarter-over-quarter and year-to-date changes in the net interest margin, please see the attached Net Interest Margin Rate / Volume Analysis.
NONINTEREST INCOME
Second Quarter 2008 vs. First Quarter 2008
On a linked-quarter basis, noninterest income decreased $1.1 million or 7.6 percent. Noninterest income in the first quarter 2008 included a $1.6 million gain associated with the partial redemption of Visa Inc. common shares. Excluding this item, second quarter 2008 noninterest income increased $0.5 million or 3.5 percent from the first quarter 2008 primarily due to increases in service charge income on deposits and bankcard related activity, offset by both lower gains on the sale of mortgage loans and lower other income due to valuation adjustments on assets carried at market value.
Second Quarter 2008 vs. Second Quarter 2007
Second quarter 2008 noninterest income of $13.7 million declined 2.7 percent compared to the second quarter 2007, with increases in wealth management fees more than offset by the $0.3 million decline in service charges on deposits and the $0.2 million decrease in other income due to valuation adjustments on assets carried at market value. The decline in deposit service charges is primarily a result of lower fee income on overdraft and non-sufficient funds.
• Page 7
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date noninterest income was $28.6 million in 2008 compared to $28.9 million in 2007, a $0.3 million or 0.9 percent decrease. Noninterest income in the first quarter 2008 included a $1.6 million gain associated with the partial redemption of Visa Inc. common shares, and noninterest income in the first quarter 2007 included a $1.1 million gain on the sale of mortgage servicing rights. Excluding these items, year-to-date 2008 noninterest income decreased $0.8 million or 2.9 percent from the prior year comparable period primarily due to lower earnings from bank-owned life insurance and service charges on deposits, offset by increases in wealth management fees and bankcard income.
NONINTEREST EXPENSE
Second Quarter 2008 vs. First Quarter 2008
On a linked-quarter basis, noninterest expense decreased $1.0 million or 3.6 percent to $28.0 million in the second quarter 2008 from $29.0 million in the first quarter 2008 primarily as a result of a $1.3 million reduction in the liability for retiree medical benefits, which is not expected to be recurring, offset by an increase in professional services and seasonal travel costs. Excluding the effects of the retiree medical benefit liability, noninterest expense increased approximately $0.2 million or 0.8 percent.
Second Quarter 2008 vs. Second Quarter 2007
Noninterest expense was $28.0 million in the second quarter 2008 compared to $29.4 million in the second quarter 2007, a decrease of $1.4 million or 5.0 percent primarily due to the previously mentioned $1.3 million reduction in the liability for retiree medical benefits. Excluding the $1.3 million, the decrease was $0.2 million or 0.6 percent.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date noninterest expense was $57.0 million in 2008 compared to $60.7 million in 2007, a $3.7 million or 6.0 percent decrease. This reduction is primarily the result of a $3.1 million decrease in salary and employee benefits, with an approximate $1.2 million reduction in base salary expense and $1.9 million reduction in associated pension and retiree costs. The remainder of the decrease is a result of lower marketing related expenses as compared to 2007.
INCOME TAXES
Income tax expense was $3.9 million and $4.0 million for the second quarters 2008 and 2007, respectively. The effective tax rates for the second quarters 2008 and 2007 were 33.3 percent and 33.0 percent, respectively. Income tax expense was $7.4 million and $8.2 million for the six months ended June 30, 2008, and 2007, respectively. The effective tax rate
• Page 8
for the six month period ending June 30, 2008 was 32.9 percent and for the six month period ending June 30, 2007 was 33.0 percent.
LOANS
Second Quarter 2008 vs. First Quarter 2008
Loan growth continues to occur primarily in First Financial’s metropolitan markets and is the driving force in the mix shift from lower yielding consumer lending to higher yielding commercial loans. Average total loans for the second quarter 2008 increased $51.9 million or 8.0 percent on an annualized basis from the first quarter 2008; however, average commercial, commercial real estate, and construction loans increased $79.1 million or 19.2 percent on an annualized basis from the first quarter 2008.
Second Quarter 2008 vs. Second Quarter 2007
Average total loans during the second quarter 2008 increased $114.8 million or 4.5 percent from the comparable period a year ago. Average commercial, commercial real estate and construction loans increased $221.0 million or 14.6 percent from the second quarter 2007.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date 2008 average total loans increased $112.2 million or 9.0 percent on an annualized basis from the comparable period in 2007. However, average commercial, commercial real estate, and construction loans increased $224.6 million or 15.3 percent from the comparable period in 2007.
INVESTMENTS
Securities available-for-sale were $421.7 million at June 30, 2008, compared to $313.6 million at June 30, 2007, and $345.1 million at March 31, 2008. The combined investment portfolio was 13.4 percent and 10.8 percent of total assets at June 30, 2008, and 2007, respectively, and 11.7 percent of total assets at March 31, 2008. During the second quarter of 2008, First Financial began to increase the size of its investment portfolio through the purchase of highly rated agency pass-through mortgage-backed securities. Approximately $120 million of securities were purchased during the second quarter of 2008, bringing the total purchases for the year to approximately $170 million. The investment portfolio, as a percentage of total assets, remains low relative to our
• Page 9
peers, and we continue to review various portfolio strategies that may increase the size of our investment portfolio and our absolute level of earnings while balancing our capital and liquidity targets. Among other factors, the portfolio selection criteria avoids securities backed by sub-prime assets and also those containing assets that would give rise to material geographic concentrations. At June 30, 2008, First Financial held approximately 65 percent of its available-for-sale securities in mortgage related instruments, substantially all of which are held in highly rated agency pass-through residential mortgage instruments.
In the first quarter of 2008, First Financial adopted FASB Statement No. 159 (SFAS No. 159), “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115.” First Financial applied the fair value option to its equity securities of government sponsored entities (“GSE”), specifically 200,000 Federal Home Loan Mortgage Corporation perpetual preferred series V shares; and these securities are classified as trading investment securities. During the first quarter, there was minimal change in the carrying and market value of those securities as compared to year end 2007 and therefore no material income statement effect was recognized. During the second quarter of 2008, there was significant volatility in the market value of this GSE and while First Financial still holds the securities, it recorded a loss in market value, through the income statement, of $0.2 million. Since the end of the second quarter, there remains uncertainty surrounding the government’s plans for the GSE which has had an effect on the post-second quarter market value of these securities. The fair value accounting treatment discussed above will require First Financial to recognize in its income statement both the market value increases and decreases in future periods.
DEPOSITS & FUNDING
Total deposit balances, both average and period-end, declined on both a comparative quarter and on a linked-quarter basis. Much of the decline has been the result of the overall level of deposit rates in our markets and the decision not to be a price leader when, in our view, it is not profitable to do so. While we have experienced balance outflow in the time and wholesale categories due to this decision, we have seen net inflows in period end noninterest-bearing deposits on a year-over-year and linked-quarter basis.
Second Quarter 2008 vs. First Quarter 2008
Period-end and average noninterest-bearing deposits increased $14.0 million and $15.1 million, respectively from the first quarter 2008. Average total deposits for the second quarter 2008 decreased $37.0 million or 5.2 percent on an annualized basis from the first quarter 2008. Average total interest-bearing deposits, primarily as a result of runoff in the public funds portfolio, decreased $52.1 million or 8.5 percent, and average noninterest-bearing deposits increased $15.1 million or 15.9 percent, both on an annualized basis from the first quarter 2008. Average
• Page 10
transaction account balances decreased approximately $26.2 million or 8.5 percent, on an annualized basis from the first quarter 2008.
Second Quarter 2008 vs. Second Quarter 2007
Average transaction account balances increased approximately $22.8 million or 1.9 percent from the second quarter 2007. Average total interest-bearing deposits for the second quarter 2008 decreased $3.0 million or 0.1 percent, and average noninterest-bearing deposits decreased $10.8 million or 2.7 percent, both from the second quarter 2007. Average deposits for the second quarter 2008 decreased $13.8 million or 0.5 percent from the comparable period a year ago.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date 2008 average total deposits increased $4.9 million or 0.4 percent, on an annualized basis, from the comparable period in 2007. Growth in transaction accounts has been offset by the runoff of time and wholesale deposits as a result of our decision to maintain rational deposit pricing in a very competitive landscape.
With the recent increase in the size of the investment portfolio, continued strong loan demand and the net deposit outflows we have experienced, several wholesale funding strategies are being evaluated. The execution of any specific strategy would be consistent with our overall interest rate risk and balance sheet management processes.
2008 Outlook
Based on the overall economic outlook for the remainder of 2008, including but not limited to such factors as inflation, unemployment, growth, and forward market interest rates, management’s 2008 outlook remains largely unchanged. We continue to anticipate low single digit growth in total loans, while total deposits are expected to experience a low single digit decline in balances with transaction deposits growing at a low single digit rate and time deposits declining at a similar pace. Total net interest income is expected to stabilize and grow for the remainder of 2008 and our full-year margin expectation remains between 3.67 and 3.75 percent. Net charge-off levels are expected to remain between 30 and 40 basis points of average loans, though likely at the high end of the range. Management does expect modest noninterest income growth and little to no growth in noninterest expense. A material change in economic conditions would have an impact on our expected 2008 performance. Please refer to the forward-looking statement found at the end of this release.
EARNINGS CONFERENCE CALL AND WEBCAST
On July 30, 2008, First Financial will host an earnings conference call that will be webcast live at 9:00 a.m. EDT. The presenters will be Claude E. Davis, president and chief executive officer, and J. Franklin Hall, executive vice president and chief financial officer. Anyone may participate in the conference call by calling 1-800-860-2442 (no
• Page 11
passcode needed) or by logging on to the company’s website (www.bankatfirst.com) for a live audio webcast of the call. Click on the Investor Relations link and then on Webcast. Listeners should allow an extra five minutes to be connected to the call or webcast. The event will be archived on the company’s website for one year. Questions regarding this information should be directed to the Media Contact, Cheryl Lipp, or the Analyst Contact, J. Franklin Hall.
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, 2007. 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, management’s ability to effectively execute its business plan; the risk that the strength of the United States economy in general and the strength of the local economies in which First Financial conducts operations may be different from expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on First Financial’s loan portfolio and allowance for loan and lease losses; 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 2007 Form 10-K and other public documents filed with the SEC. These documents are available on the investor relations section of First Financial’s website at www.bankatfirst.com and on the SEC’s website at www.sec.gov.
• Page 12
FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Three months ended, | | | | | | | | | | | Six months ended | |
| | | Jun. 30, | | | Mar. 31, | | | Dec. 31, | | | Sep. 30, | | | Jun. 30, | | | Jun. 30, | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2008 | | | 2007 | |
RESULTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 28,414 | | | $ | 28,249 | | | $ | 29,079 | | | $ | 29,417 | | | $ | 29,601 | | | $ | 56,663 | | | $ | 60,004 | |
| Net income | | $ | 7,808 | | | $ | 7,338 | | | $ | 10,701 | | | $ | 8,373 | | | $ | 8,172 | | | $ | 15,146 | | | $ | 16,607 | |
| Net earnings per common share — basic | | $ | 0.21 | | | $ | 0.20 | | | $ | 0.29 | | | $ | 0.22 | | | $ | 0.21 | | | $ | 0.41 | | | $ | 0.43 | |
| Net earnings per common share — diluted | | $ | 0.21 | | | $ | 0.20 | | | $ | 0.29 | | | $ | 0.22 | | | $ | 0.21 | | | $ | 0.40 | | | $ | 0.43 | |
| Dividends declared per common share | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.34 | | | $ | 0.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
KEY FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.93 | % | | | 0.89 | % | | | 1.27 | % | | | 1.00 | % | | | 1.00 | % | | | 0.91 | % | | | 1.02 | % |
| Return on average shareholders’ equity | | | 11.26 | % | | | 10.66 | % | | | 15.37 | % | | | 12.03 | % | | | 11.61 | % | | | 10.96 | % | | | 11.78 | % |
| Return on average tangible shareholders’ equity | | | 12.57 | % | | | 11.91 | % | | | 17.17 | % | | | 13.44 | % | | | 12.95 | % | | | 12.24 | % | | | 13.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest margin | | | 3.72 | % | | | 3.78 | % | | | 3.79 | % | | | 3.88 | % | | | 3.97 | % | | | 3.75 | % | | | 4.05 | % |
Net interest margin (fully tax equivalent)(1) | | | 3.78 | % | | | 3.85 | % | | | 3.86 | % | | | 3.95 | % | | | 4.05 | % | | | 3.81 | % | | | 4.12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average shareholders’ equity to average assets | | | 8.29 | % | | | 8.39 | % | | | 8.27 | % | | | 8.34 | % | | | 8.58 | % | | | 8.34 | % | | | 8.63 | % |
Tier 1 Ratio (2) | | | 9.99 | % | | | 10.20 | % | | | 10.29 | % | | | 10.18 | % | | | 11.13 | % | | | 9.99 | % | | | 11.13 | % |
Total Capital Ratio (2) | | | 11.06 | % | | | 11.31 | % | | | 11.38 | % | | | 11.27 | % | | | 12.18 | % | | | 11.06 | % | | | 12.18 | % |
Leverage Ratio (2) | | | 8.21 | % | | | 8.32 | % | | | 8.26 | % | | | 8.21 | % | | | 9.04 | % | | | 8.29 | % | | | 9.04 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AVERAGE BALANCE SHEET ITEMS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans(3) | | $ | 2,648,327 | | | $ | 2,596,483 | | | $ | 2,588,985 | | | $ | 2,576,308 | | | $ | 2,530,638 | | | $ | 2,622,405 | | | $ | 2,510,557 | |
| Investment securities | | | 422,463 | | | | 343,553 | | | | 350,346 | | | | 349,686 | | | | 364,050 | | | | 383,883 | | | | 365,719 | |
| Other earning assets | | | 4,095 | | | | 65,799 | | | | 106,922 | | | | 81,669 | | | | 93,986 | | | | 34,947 | | | | 114,198 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total earning assets | | $ | 3,074,885 | | | $ | 3,005,835 | | | $ | 3,046,253 | | | $ | 3,007,663 | | | $ | 2,988,674 | | | $ | 3,041,235 | | | $ | 2,990,474 | |
| Total assets | | $ | 3,361,649 | | | $ | 3,298,663 | | | $ | 3,338,828 | | | $ | 3,309,800 | | | $ | 3,291,756 | | | $ | 3,330,156 | | | $ | 3,295,530 | |
| Noninterest-bearing deposits | | $ | 394,352 | | | $ | 379,240 | | | $ | 399,304 | | | $ | 385,653 | | | $ | 405,179 | | | $ | 386,796 | | | $ | 403,448 | |
| Interest-bearing deposits | | | 2,400,940 | | | | 2,453,028 | | | | 2,461,464 | | | | 2,450,830 | | | | 2,403,919 | | | | 2,426,984 | | | | 2,405,408 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | $ | 2,795,292 | | | $ | 2,832,268 | | | $ | 2,860,768 | | | $ | 2,836,483 | | | $ | 2,809,098 | | | $ | 2,813,780 | | | $ | 2,808,856 | |
| Borrowings | | $ | 256,409 | | | $ | 157,899 | | | $ | 177,876 | | | $ | 176,528 | | | $ | 177,472 | | | $ | 207,154 | | | $ | 179,531 | |
| Shareholders’ equity | | $ | 278,803 | | | $ | 276,815 | | | $ | 276,269 | | | $ | 276,183 | | | $ | 282,354 | | | $ | 277,809 | | | $ | 284,391 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance to ending loans | | | 1.11 | % | | | 1.14 | % | | | 1.12 | % | | | 1.12 | % | | | 1.10 | % | | | 1.11 | % | | | 1.10 | % |
| Allowance to nonaccrual loans | | | 199.70 | % | | | 202.29 | % | | | 205.89 | % | | | 221.70 | % | | | 194.92 | % | | | 199.70 | % | | | 194.92 | % |
| Allowance to nonperforming loans | | | 192.50 | % | | | 194.83 | % | | | 197.94 | % | | | 212.42 | % | | | 187.35 | % | | | 192.50 | % | | | 187.35 | % |
| Nonperforming loans to total loans | | | 0.57 | % | | | 0.58 | % | | | 0.56 | % | | | 0.53 | % | | | 0.59 | % | | | 0.57 | % | | | 0.59 | % |
| Nonperforming assets to ending loans, plus OREO | | | 0.71 | % | | | 0.67 | % | | | 0.67 | % | | | 0.65 | % | | | 0.67 | % | | | 0.71 | % | | | 0.67 | % |
| Nonperforming assets to total assets | | | 0.55 | % | | | 0.53 | % | | | 0.51 | % | | | 0.51 | % | | | 0.52 | % | | | 0.55 | % | | | 0.52 | % |
Net charge-offs to average loans (annualized) | | | 0.40 | % | | | 0.40 | % | | | 0.26 | % | | | 0.23 | % | | | 0.23 | % | | | 0.40 | % | | | 0.22 | % |
| | |
| (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, 2008 regulatory capital ratios are preliminary. |
| |
| (3) | | Includes loans held for sale. |
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended, | | | Six months ended, | |
| | | Jun. 30, | | | Jun. 30, | |
| | | 2008 | | | 2007 | | | % Change | | | 2008 | | | 2007 | | | % Change | |
| Interest income | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans, including fees | | $ | 39,646 | | | $ | 45,291 | | | | (12.5 | %) | | $ | 82,367 | | | $ | 90,355 | | | | (8.8 | %) |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 4,387 | | | | 3,762 | | | | 16.6 | % | | | 7,908 | | | | 7,653 | | | | 3.3 | % |
| Tax-exempt | | | 792 | | | | 911 | | | | (13.1 | %) | | | 1,583 | | | | 1,820 | | | | (13.0 | %) |
| | | | | | | | | | | | | | | | | | | |
| Total investment securities interest | | | 5,179 | | | | 4,673 | | | | 10.8 | % | | | 9,491 | | | | 9,473 | | | | 0.2 | % |
| Federal funds sold | | | 40 | | | | 1,241 | | | | (96.8 | %) | | | 605 | | | | 2,997 | | | | (79.8 | %) |
| | | | | | | | | | | | | | | | | | | |
| Total interest income | | | 44,865 | | | | 51,205 | | | | (12.4 | %) | | | 92,463 | | | | 102,825 | | | | (10.1 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 14,635 | | | | 19,409 | | | | (24.6 | %) | | | 32,374 | | | | 38,418 | | | | (15.7 | %) |
| Short-term borrowings | | | 1,130 | | | | 984 | | | | 14.8 | % | | | 1,922 | | | | 1,980 | | | | (2.9 | %) |
| Long-term borrowings | | | 384 | | | | 542 | | | | (29.2 | %) | | | 790 | | | | 1,101 | | | | (28.2 | %) |
| Subordinated debentures and capital securities | | | 302 | | | | 669 | | | | (54.9 | %) | | | 714 | | | | 1,322 | | | | (46.0 | %) |
| | | | | | | | | | | | | | | | | | | |
| Total interest expense | | | 16,451 | | | | 21,604 | | | | (23.9 | %) | | | 35,800 | | | | 42,821 | | | | (16.4 | %) |
| | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 28,414 | | | | 29,601 | | | | (4.0 | %) | | | 56,663 | | | | 60,004 | | | | (5.6 | %) |
| Provision for loan and lease losses | | | 2,493 | | | | 2,098 | | | | 18.8 | % | | | 5,716 | | | | 3,454 | | | | 65.5 | % |
| | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan and lease losses | | | 25,921 | | | | 27,503 | | | | (5.8 | %) | | | 50,947 | | | | 56,550 | | | | (9.9 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 4,951 | | | | 5,296 | | | | (6.5 | %) | | | 9,558 | | | | 10,040 | | | | (4.8 | %) |
| Trust and wealth management fees | | | 4,654 | | | | 4,526 | | | | 2.8 | % | | | 9,276 | | | | 8,686 | | | | 6.8 | % |
| Bankcard income | | | 1,493 | | | | 1,424 | | | | 4.8 | % | | | 2,791 | | | | 2,664 | | | | 4.8 | % |
| Net gains from sales of loans | | | 188 | | | | 184 | | | | 2.2 | % | | | 407 | | | | 346 | | | | 17.6 | % |
| Gain on sale of mortgage servicing rights | | | 0 | | | | 0 | | | | N/M | | | | 0 | | | | 1,061 | | | | (100.0 | %) |
| Gains on sales of investment securities | | | 0 | | | | 0 | | | | N/M | | | | 1,585 | | | | 0 | | | | N/M | |
| Other | | | 2,462 | | | | 2,702 | | | | (8.9 | %) | | | 5,006 | | | | 6,079 | | | | (17.7 | %) |
| | | | | | | | | | | | | | | | | | | |
| Total noninterest income | | | 13,748 | | | | 14,132 | | | | (2.7 | %) | | | 28,623 | | | | 28,876 | | | | (0.9 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 15,895 | | | | 17,134 | | | | (7.2 | %) | | | 32,968 | | | | 36,095 | | | | (8.7 | %) |
| Net occupancy | | | 2,510 | | | | 2,484 | | | | 1.0 | % | | | 5,462 | | | | 5,291 | | | | 3.2 | % |
| Furniture and equipment | | | 1,617 | | | | 1,708 | | | | (5.3 | %) | | | 3,270 | | | | 3,335 | | | | (1.9 | %) |
| Data processing | | | 814 | | | | 818 | | | | (0.5 | %) | | | 1,607 | | | | 1,663 | | | | (3.4 | %) |
| Marketing | | | 474 | | | | 642 | | | | (26.2 | %) | | | 991 | | | | 1,511 | | | | (34.4 | %) |
| Communication | | | 749 | | | | 798 | | | | (6.1 | %) | | | 1,554 | | | | 1,663 | | | | (6.6 | %) |
| Professional services | | | 1,061 | | | | 1,063 | | | | (0.2 | %) | | | 1,822 | | | | 2,069 | | | | (11.9 | %) |
| Other | | | 4,849 | | | | 4,793 | | | | 1.2 | % | | | 9,315 | | | | 9,023 | | | | 3.2 | % |
| | | | | | | | | | | | | | | | | | | |
| Total noninterest expenses | | | 27,969 | | | | 29,440 | | | | (5.0 | %) | | | 56,989 | | | | 60,650 | | | | (6.0 | %) |
| | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 11,700 | | | | 12,195 | | | | (4.1 | %) | | | 22,581 | | | | 24,776 | | | | (8.9 | %) |
| Income tax expense | | | 3,892 | | | | 4,023 | | | | (3.3 | %) | | | 7,435 | | | | 8,169 | | | | (9.0 | %) |
| | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 7,808 | | | $ | 8,172 | | | | (4.5 | %) | | $ | 15,146 | | | $ | 16,607 | | | | (8.8 | %) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
ADDITIONAL DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Net earnings per common share — basic | | $ | 0.21 | | | $ | 0.21 | | | | | | | $ | 0.41 | | | $ | 0.43 | | | | | |
| Net earnings per common share — diluted | | $ | 0.21 | | | $ | 0.21 | | | | | | | $ | 0.40 | | | $ | 0.43 | | | | | |
| Dividends declared per common share | | $ | 0.17 | | | $ | 0.16 | | | | | | | $ | 0.34 | | | $ | 0.32 | | | | | |
| Book value per common share | | $ | 7.34 | | | $ | 7.18 | | | | | | | $ | 7.34 | | | $ | 7.18 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.93 | % | | | 1.00 | % | | | | | | | 0.91 | % | | | 1.02 | % | | | | |
| Return on average shareholders’ equity | | | 11.26 | % | | | 11.61 | % | | | | | | | 10.96 | % | | | 11.78 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 44,865 | | | $ | 51,205 | | | | (12.4 | %) | | $ | 92,463 | | | $ | 102,825 | | | | (10.1 | %) |
| Tax equivalent adjustment | | | 510 | | | | 580 | | | | (12.1 | %) | | | 1,024 | | | | 1,156 | | | | (11.4 | %) |
| | | | | | | | | | | | | | | | | | | |
| Interest income — tax equivalent | | | 45,375 | | | | 51,785 | | | | (12.4 | %) | | | 93,487 | | | | 103,981 | | | | (10.1 | %) |
| Interest expense | | | 16,451 | | | | 21,604 | | | | (23.9 | %) | | | 35,800 | | | | 42,821 | | | | (16.4 | %) |
| | | | | | | | | | | | | | | | | | | | |
| Net interest income — tax equivalent | | $ | 28,924 | | | $ | 30,181 | | | | (4.2 | %) | | $ | 57,687 | | | $ | 61,160 | | | | (5.7 | %) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest margin | | | 3.72 | % | | | 3.97 | % | | | | | | | 3.75 | % | | | 4.05 | % | | | | |
Net interest margin (fully tax equivalent)(1) | | | 3.78 | % | | | 4.05 | % | | | | | | | 3.81 | % | | | 4.12 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 1,058 | | | | 1,158 | | | | | | | | 1,058 | | | | 1,158 | | | | | |
| | |
| (1) | | The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | 2008 | |
| | | Second | | | First | | | | | | | % Change | |
| | | Quarter | | | Quarter | | | Year-to-Date | | | Linked Qtr. | |
| Interest income | | | | | | | | | | | | | | | | |
| Loans, including fees | | $ | 39,646 | | | $ | 42,721 | | | $ | 82,367 | | | | (7.2 | %) |
| Investment securities | | | | | | | | | | | | | | | | |
| Taxable | | | 4,387 | | | | 3,521 | | | | 7,908 | | | | 24.6 | % |
| Tax-exempt | | | 792 | | | | 791 | | | | 1,583 | | | | 0.1 | % |
| | | | | | | | | | | | | |
| Total investment securities interest | | | 5,179 | | | | 4,312 | | | | 9,491 | | | | 20.1 | % |
| Federal funds sold | | | 40 | | | | 565 | | | | 605 | | | | (92.9 | %) |
| | | | | | | | | | | | | |
| Total interest income | | | 44,865 | | | | 47,598 | | | | 92,463 | | | | (5.7 | %) |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | |
| Deposits | | | 14,635 | | | | 17,739 | | | | 32,374 | | | | (17.5 | %) |
| Short-term borrowings | | | 1,130 | | | | 792 | | | | 1,922 | | | | 42.7 | % |
| Long-term borrowings | | | 384 | | | | 406 | | | | 790 | | | | (5.4 | %) |
| Subordinated debentures and capital securities | | | 302 | | | | 412 | | | | 714 | | | | (26.7 | %) |
| | | | | | | | | | | | | |
| Total interest expense | | | 16,451 | | | | 19,349 | | | | 35,800 | | | | (15.0 | %) |
| | | | | | | | | | | | | |
| Net interest income | | | 28,414 | | | | 28,249 | | | | 56,663 | | | | 0.6 | % |
| Provision for loan and lease losses | | | 2,493 | | | | 3,223 | | | | 5,716 | | | | (22.6 | %) |
| | | | | | | | | | | | | |
| Net interest income after provision for loan and lease losses | | | 25,921 | | | | 25,026 | | | | 50,947 | | | | 3.6 | % |
| | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 4,951 | | | | 4,607 | | | | 9,558 | | | | 7.5 | % |
| Trust and wealth management fees | | | 4,654 | | | | 4,622 | | | | 9,276 | | | | 0.7 | % |
| Bankcard income | | | 1,493 | | | | 1,298 | | | | 2,791 | | | | 15.0 | % |
| Net gains from sales of loans | | | 188 | | | | 219 | | | | 407 | | | | (14.2 | %) |
| Gains on sales of investment securities | | | 0 | | | | 1,585 | | | | 1,585 | | | | (100.0 | %) |
| Other | | | 2,462 | | | | 2,544 | | | | 5,006 | | | | (3.2 | %) |
| | | | | | | | | | | | | |
| Total noninterest income | | | 13,748 | | | | 14,875 | | | | 28,623 | | | | (7.6 | %) |
| | | | | | | | | | | | | | | | | |
| Noninterest expenses | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 15,895 | | | | 17,073 | | | | 32,968 | | | | (6.9 | %) |
| Net occupancy | | | 2,510 | | | | 2,952 | | | | 5,462 | | | | (15.0 | %) |
| Furniture and equipment | | | 1,617 | | | | 1,653 | | | | 3,270 | | | | (2.2 | %) |
| Data processing | | | 814 | | | | 793 | | | | 1,607 | | | | 2.6 | % |
| Marketing | | | 474 | | | | 517 | | | | 991 | | | | (8.3 | %) |
| Communication | | | 749 | | | | 805 | | | | 1,554 | | | | (7.0 | %) |
| Professional services | | | 1,061 | | | | 761 | | | | 1,822 | | | | 39.4 | % |
| Other | | | 4,849 | | | | 4,466 | | | | 9,315 | | | | 8.6 | % |
| | | | | | | | | | | | | |
| Total noninterest expenses | | | 27,969 | | | | 29,020 | | | | 56,989 | | | | (3.6 | %) |
| | | | | | | | | | | | | |
| Income before income taxes | | | 11,700 | | | | 10,881 | | | | 22,581 | | | | 7.5 | % |
| Income tax expense | | | 3,892 | | | | 3,543 | | | | 7,435 | | | | 9.9 | % |
| | | | | | | | | | | | | |
| Net income | | $ | 7,808 | | | $ | 7,338 | | | $ | 15,146 | | | | 6.4 | % |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
ADDITIONAL DATA | | | | | | | | | | | | | | | | |
| Net earnings per common share — basic | | $ | 0.21 | | | $ | 0.20 | | | $ | 0.41 | | | | | |
| Net earnings per common share — diluted | | $ | 0.21 | | | $ | 0.20 | | | $ | 0.40 | | | | | |
| Dividends declared per common share | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.34 | | | | | |
| Book value per common share | | $ | 7.34 | | | $ | 7.41 | | | $ | 7.34 | | | | | |
| | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.93 | % | | | 0.89 | % | | | 0.91 | % | | | | |
| Return on average shareholders’ equity | | | 11.26 | % | | | 10.66 | % | | | 10.96 | % | | | | |
| | | | | | | | | | | | | | | | | |
| Interest income | | $ | 44,865 | | | $ | 47,598 | | | $ | 92,463 | | | | (5.7 | %) |
| Tax equivalent adjustment | | | 510 | | | | 514 | | | | 1,024 | | | | (0.8 | %) |
| | | | | | | | | | | | | |
| Interest income — tax equivalent | | | 45,375 | | | | 48,112 | | | | 93,487 | | | | (5.7 | %) |
| Interest expense | | | 16,451 | | | | 19,349 | | | | 35,800 | | | | (15.0 | %) |
| | | | | | | | | | | | | |
| Net interest income — tax equivalent | | $ | 28,924 | | | $ | 28,763 | | | $ | 57,687 | | | | 0.6 | % |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net interest margin | | | 3.72 | % | | | 3.78 | % | | | 3.75 | % | | | | |
Net interest margin (fully tax equivalent)(1) | | | 3.78 | % | | | 3.85 | % | | | 3.81 | % | | | | |
| | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 1,058 | | | | 1,056 | | | | 1,058 | | | | | |
| | |
| (1) | | The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | |
| | | Fourth | | | Third | | | Second | | | First | | | Full | |
| | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Year | |
| Interest income | | | | | | | | | | | | | | | | | | | | |
| Loans, including fees | | $ | 45,709 | | | $ | 46,606 | | | $ | 45,291 | | | $ | 45,064 | | | $ | 182,670 | |
| Investment securities | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 3,641 | | | | 3,667 | | | | 3,762 | | | | 3,891 | | | | 14,961 | |
| Tax-exempt | | | 859 | | | | 863 | | | | 911 | | | | 909 | | | | 3,542 | |
| | | | | | | | | | | | | | | | |
| Total investment securities interest | | | 4,500 | | | | 4,530 | | | | 4,673 | | | | 4,800 | | | | 18,503 | |
| Federal funds sold | | | 1,224 | | | | 1,048 | | | | 1,241 | | | | 1,756 | | | | 5,269 | |
| | | | | | | | | | | | | | | | |
| Total interest income | | | 51,433 | | | | 52,184 | | | | 51,205 | | | | 51,620 | | | | 206,442 | |
| | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 20,238 | | | | 20,528 | | | | 19,409 | | | | 19,009 | | | | 79,184 | |
| Short-term borrowings | | | 1,211 | | | | 1,041 | | | | 984 | | | | 996 | | | | 4,232 | |
| Long-term borrowings | | | 466 | | | | 532 | | | | 542 | | | | 559 | | | | 2,099 | |
| Subordinated debentures and capital securities | | | 439 | | | | 666 | | | | 669 | | | | 653 | | | | 2,427 | |
| | | | | | | | | | | | | | | | |
| Total interest expense | | | 22,354 | | | | 22,767 | | | | 21,604 | | | | 21,217 | | | | 87,942 | |
| | | | | | | | | | | | | | | | |
| Net interest income | | | 29,079 | | | | 29,417 | | | | 29,601 | | | | 30,403 | | | | 118,500 | |
| Provision for loan and lease losses | | | 1,640 | | | | 2,558 | | | | 2,098 | | | | 1,356 | | | | 7,652 | |
| | | | | | | | | | | | | | | | |
| Net interest income after provision for loan and lease losses | | | 27,439 | | | | 26,859 | | | | 27,503 | | | | 29,047 | | | | 110,848 | |
| | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 5,330 | | | | 5,396 | | | | 5,296 | | | | 4,744 | | | | 20,766 | |
| Trust and wealth management fees | | | 4,989 | | | | 4,721 | | | | 4,526 | | | | 4,160 | | | | 18,396 | |
| Bankcard income | | | 1,165 | | | | 1,422 | | | | 1,424 | | | | 1,240 | | | | 5,251 | |
| Net gains from sales of loans | | | 295 | | | | 203 | | | | 184 | | | | 162 | | | | 844 | |
| Gain on sale of merchant payment processing portfolio | | | 5,501 | | | | 0 | | | | 0 | | | | 0 | | | | 5,501 | |
| Gain on sale of mortgage servicing rights | | | 0 | | | | 0 | | | | 0 | | | | 1,061 | | | | 1,061 | |
| Gains on sales of investment securities | | | 0 | | | | 367 | | | | 0 | | | | 0 | | | | 367 | |
| Other | | | 2,982 | | | | 2,341 | | | | 2,702 | | | | 3,377 | | | | 11,402 | |
| | | | | | | | | | | | | | | | |
| Total noninterest income | | | 20,262 | | | | 14,450 | | | | 14,132 | | | | 14,744 | | | | 63,588 | |
| | | | | | | | | | | | | | | | | | | | | |
| Noninterest expenses | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 16,508 | | | | 17,288 | | | | 17,134 | | | | 18,961 | | | | 69,891 | |
| Pension settlement charges | | | 2,222 | | | | 0 | | | | 0 | | | | 0 | | | | 2,222 | |
| Net occupancy | | | 2,842 | | | | 2,728 | | | | 2,484 | | | | 2,807 | | | | 10,861 | |
| Furniture and equipment | | | 1,742 | | | | 1,684 | | | | 1,708 | | | | 1,627 | | | | 6,761 | |
| Data processing | | | 825 | | | | 1,010 | | | | 818 | | | | 845 | | | | 3,498 | |
| Marketing | | | 523 | | | | 407 | | | | 642 | | | | 869 | | | | 2,441 | |
| Communication | | | 903 | | | | 664 | | | | 798 | | | | 865 | | | | 3,230 | |
| Professional services | | | 1,109 | | | | 964 | | | | 1,063 | | | | 1,006 | | | | 4,142 | |
| Other | | | 4,698 | | | | 3,980 | | | | 4,793 | | | | 4,230 | | | | 17,701 | |
| | | | | | | | | | | | | | | | |
| Total noninterest expenses | | | 31,372 | | | | 28,725 | | | | 29,440 | | | | 31,210 | | | | 120,747 | |
| | | | | | | | | | | | | | | | |
| Income before income taxes | | | 16,329 | | | | 12,584 | | | | 12,195 | | | | 12,581 | | | | 53,689 | |
| Income tax expense | | | 5,628 | | | | 4,211 | | | | 4,023 | | | | 4,146 | | | | 18,008 | |
| | | | | | | | | | | | | | | | |
| Net income | | $ | 10,701 | | | $ | 8,373 | | | $ | 8,172 | | | $ | 8,435 | | | $ | 35,681 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
ADDITIONAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net earnings per common share — basic | | $ | 0.29 | | | $ | 0.22 | | | $ | 0.21 | | | $ | 0.22 | | | $ | 0.93 | |
| Net earnings per common share — diluted | | $ | 0.29 | | | $ | 0.22 | | | $ | 0.21 | | | $ | 0.22 | | | $ | 0.93 | |
| Dividends declared per common share | | $ | 0.17 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.65 | |
| Book value per common share | | $ | 7.40 | | | $ | 7.26 | | | $ | 7.18 | | | $ | 7.29 | | | $ | 7.40 | |
| | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 1.27 | % | | | 1.00 | % | | | 1.00 | % | | | 1.04 | % | | | 1.08 | % |
| Return on average shareholders’ equity | | | 15.37 | % | | | 12.03 | % | | | 11.61 | % | | | 11.94 | % | | | 12.73 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 51,433 | | | $ | 52,184 | | | $ | 51,205 | | | $ | 51,620 | | | $ | 206,442 | |
| Tax equivalent adjustment | | | 561 | | | | 564 | | | | 580 | | | | 576 | | | | 2,281 | |
| | | | | | | | | | | | | | | | |
| Interest income — tax equivalent | | | 51,994 | | | | 52,748 | | | | 51,785 | | | | 52,196 | | | | 208,723 | |
| Interest expense | | | 22,354 | | | | 22,767 | | | | 21,604 | | | | 21,217 | | | | 87,942 | |
| | | | | | | | | | | | | | | | |
| Net interest income — tax equivalent | | $ | 29,640 | | | $ | 29,981 | | | $ | 30,181 | | | $ | 30,979 | | | $ | 120,781 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Net interest margin | | | 3.79 | % | | | 3.88 | % | | | 3.97 | % | | | 4.12 | % | | | 3.94 | % |
Net interest margin (fully tax equivalent)(1) | | | 3.86 | % | | | 3.95 | % | | | 4.05 | % | | | 4.20 | % | | | 4.01 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 1,057 | | | | 1,078 | | | | 1,158 | | | | 1,166 | | | | 1,057 | |
| | |
| (1) | | The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. |
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENT OF CONDITION
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Jun. 30, | | | Mar. 31, | | | Dec. 31, | | | Sep. 30, | | | Jun. 30, | | | % Change | | | % Change | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | Linked Qtr. | | | Comparable Qtr. | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 106,248 | | | $ | 102,246 | | | $ | 106,224 | | | $ | 92,414 | | | $ | 87,808 | | | | 3.9 | % | | | 21.0 | % |
| Federal funds sold | | | 4,005 | | | | 2,943 | | | | 106,990 | | | | 71,700 | | | | 55,000 | | | | 36.1 | % | | | (92.7 | %) |
| Investment securities trading | | | 3,598 | | | | 3,820 | | | | 0 | | | | 0 | | | | 0 | | | | (5.8 | %) | | | N/M | |
| Investment securities available-for-sale | | | 421,697 | | | | 345,145 | | | | 306,928 | | | | 307,908 | | | | 313,575 | | | | 22.2 | % | | | 34.5 | % |
| Investment securities held-to-maturity | | | 5,316 | | | | 5,414 | | | | 5,639 | | | | 5,467 | | | | 5,711 | | | | (1.8 | %) | | | (6.9 | %) |
| Other investments | | | 34,632 | | | | 34,293 | | | | 33,969 | | | | 33,969 | | | | 33,969 | | | | 1.0 | % | | | 2.0 | % |
| Loans held for sale | | | 2,228 | | | | 4,108 | | | | 1,515 | | | | 5,763 | | | | 0 | | | | (45.8 | %) | | | N/M | |
| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 814,779 | | | | 789,922 | | | | 785,143 | | | | 774,059 | | | | 747,292 | | | | 3.1 | % | | | 9.0 | % |
| Real estate — construction | | | 186,178 | | | | 172,737 | | | | 151,432 | | | | 155,495 | | | | 125,732 | | | | 7.8 | % | | | 48.1 | % |
| Real estate — commercial | | | 769,555 | | | | 726,397 | | | | 706,409 | | | | 684,931 | | | | 676,679 | | | | 5.9 | % | | | 13.7 | % |
| Real estate — residential | | | 499,002 | | | | 519,790 | | | | 539,332 | | | | 556,255 | | | | 580,005 | | | | (4.0 | %) | | | (14.0 | %) |
| Installment | | | 115,575 | | | | 126,623 | | | | 138,895 | | | | 149,881 | | | | 162,506 | | | | (8.7 | %) | | | (28.9 | %) |
| Home equity | | | 263,063 | | | | 254,200 | | | | 250,888 | | | | 245,853 | | | | 235,734 | | | | 3.5 | % | | | 11.6 | % |
| Credit card | | | 26,399 | | | | 25,528 | | | | 26,610 | | | | 24,904 | | | | 24,488 | | | | 3.4 | % | | | 7.8 | % |
| Lease financing | | | 111 | | | | 258 | | | | 378 | | | | 500 | | | | 608 | | | | (57.0 | %) | | | (81.7 | %) |
| | | | | | | | | | | | | | | | | | | | | | |
| Total loans | | | 2,674,662 | | | | 2,615,455 | | | | 2,599,087 | | | | 2,591,878 | | | | 2,553,044 | | | | 2.3 | % | | | 4.8 | % |
| Less | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses | | | 29,580 | | | | 29,718 | | | | 29,057 | | | | 29,136 | | | | 28,060 | | | | (0.5 | %) | | | 5.4 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Net loans | | | 2,645,082 | | | | 2,585,737 | | | | 2,570,030 | | | | 2,562,742 | | | | 2,524,984 | | | | 2.3 | % | | | 4.8 | % |
| Premises and equipment | | | 79,380 | | | | 78,585 | | | | 78,994 | | | | 78,214 | | | | 79,079 | | | | 1.0 | % | | | 0.4 | % |
| Goodwill | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 0.0 | % | | | 0.0 | % |
| Other intangibles | | | 641 | | | | 659 | | | | 698 | | | | 828 | | | | 1,003 | | | | (2.7 | %) | | | (36.1 | %) |
| Accrued interest and other assets | | | 128,874 | | | | 132,054 | | | | 130,068 | | | | 141,890 | | | | 143,277 | | | | (2.4 | %) | | | (10.1 | %) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 3,459,962 | | | $ | 3,323,265 | | | $ | 3,369,316 | | | $ | 3,329,156 | | | $ | 3,272,667 | | | | 4.1 | % | | | 5.7 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing | | $ | 575,236 | | | $ | 610,154 | | | $ | 603,870 | | | $ | 611,764 | | | $ | 594,788 | | | | (5.7 | %) | | | (3.3 | %) |
| Savings | | | 615,613 | | | | 617,059 | | | | 596,636 | | | | 595,664 | | | | 588,229 | | | | (0.2 | %) | | | 4.7 | % |
| Time | | | 1,167,024 | | | | 1,206,750 | | | | 1,227,954 | | | | 1,253,383 | | | | 1,211,182 | | | | (3.3 | %) | | | (3.6 | %) |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | | 2,357,873 | | | | 2,433,963 | | | | 2,428,460 | | | | 2,460,811 | | | | 2,394,199 | | | | (3.1 | %) | | | (1.5 | %) |
| Noninterest-bearing | | | 419,045 | | | | 405,015 | | | | 465,731 | | | | 389,070 | | | | 399,260 | | | | 3.5 | % | | | 5.0 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 2,776,918 | | | | 2,838,978 | | | | 2,894,191 | | | | 2,849,881 | | | | 2,793,459 | | | | (2.2 | %) | | | (0.6 | %) |
| Short-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 25,932 | | | | 27,320 | | | | 26,289 | | | | 26,749 | | | | 31,700 | | | | (5.1 | %) | | | (18.2 | %) |
| Federal Home Loan Bank | | | 237,900 | | | | 6,500 | | | | 0 | | | | 0 | | | | 0 | | | | N/M | | | | N/M | |
| Other | | | 54,000 | | | | 53,000 | | | | 72,000 | | | | 74,500 | | | | 52,500 | | | | 1.9 | % | | | 2.9 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total short-term borrowings | | | 317,832 | | | | 86,820 | | | | 98,289 | | | | 101,249 | | | | 84,200 | | | | 266.1 | % | | | 277.5 | % |
| Federal Home Loan Bank long-term debt | | | 41,263 | | | | 42,380 | | | | 45,896 | | | | 55,317 | | | | 59,021 | | | | (2.6 | %) | | | (30.1 | %) |
| Other long-term debt | | | 20,620 | | | | 20,620 | | | | 20,620 | | | | 20,620 | | | | 30,930 | | | | 0.0 | % | | | (33.3 | %) |
| Accrued interest and other liabilities | | | 28,039 | | | | 56,698 | | | | 33,737 | | | | 30,386 | | | | 25,831 | | | | (50.5 | %) | | | 8.5 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 3,184,672 | | | | 3,045,496 | | | | 3,092,733 | | | | 3,057,453 | | | | 2,993,441 | | | | 4.6 | % | | | 6.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | 390,545 | | | | 389,986 | | | | 391,962 | | | | 391,355 | | | | 390,545 | | | | 0.1 | % | | | 0.0 | % |
| Retained earnings | | | 81,263 | | | | 79,818 | | | | 82,093 | | | | 77,745 | | | | 75,444 | | | | 1.8 | % | | | 7.7 | % |
| Accumulated other comprehensive loss | | | (8,236 | ) | | | (3,800 | ) | | | (7,127 | ) | | | (7,569 | ) | | | (16,168 | ) | | | 116.7 | % | | | (49.1 | %) |
| Treasury stock, at cost | | | (188,282 | ) | | | (188,235 | ) | | | (190,345 | ) | | | (189,828 | ) | | | (170,595 | ) | | | 0.0 | % | | | 10.4 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Shareholders’ Equity | | | 275,290 | | | | 277,769 | | | | 276,583 | | | | 271,703 | | | | 279,226 | | | | (0.9 | %) | | | (1.4 | %) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 3,459,962 | | | $ | 3,323,265 | | | $ | 3,369,316 | | | $ | 3,329,156 | | | $ | 3,272,667 | | | | 4.1 | % | | | 5.7 | % |
| | | | | | | | | | | | | | | | | | | | | | |
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Quarterly Averages | | | | | | | | | | | Year-to-Date Averages | |
| | | Jun. 30, | | | Mar. 31, | | | Dec. 31, | | | Sep. 30, | | | Jun. 30, | | | Jun. 30, | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2008 | | | 2007 | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 81,329 | | | $ | 86,879 | | | $ | 84,771 | | | $ | 85,576 | | | $ | 94,541 | | | $ | 84,104 | | | $ | 94,463 | |
| Federal funds sold | | | 4,095 | | | | 65,799 | | | | 106,922 | | | | 81,669 | | | | 93,986 | | | | 34,947 | | | | 114,198 | |
| Investment securities | | | 422,463 | | | | 345,303 | | | | 350,346 | | | | 349,686 | | | | 364,050 | | | | 383,883 | | | | 365,719 | |
| Loans held for sale | | | 3,034 | | | | 3,122 | | | | 3,689 | | | | 2,245 | | | | 162 | | | | 3,078 | | | | 3,459 | |
| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 805,122 | | | | 781,358 | | | | 776,286 | | | | 766,028 | | | | 733,936 | | | | 793,240 | | | | 706,790 | |
| Real estate — construction | | | 179,078 | | | | 162,008 | | | | 154,208 | | | | 139,291 | | | | 118,425 | | | | 170,543 | | | | 109,359 | |
| Real estate — commercial | | | 747,077 | | | | 708,779 | | | | 693,038 | | | | 681,920 | | | | 657,959 | | | | 727,928 | | | | 650,961 | |
| Real estate — residential | | | 508,837 | | | | 530,567 | | | | 542,204 | | | | 566,618 | | | | 592,811 | | | | 519,702 | | | | 604,785 | |
| Installment | | | 121,000 | | | | 132,876 | | | | 145,787 | | | | 155,478 | | | | 170,748 | | | | 126,938 | | | | 180,021 | �� |
| Home equity | | | 257,954 | | | | 251,706 | | | | 248,071 | | | | 239,585 | | | | 231,982 | | | | 254,830 | | | | 230,555 | |
| Credit card | | | 26,043 | | | | 25,745 | | | | 25,271 | | | | 24,586 | | | | 23,944 | | | | 25,894 | | | | 23,877 | |
| Lease financing | | | 182 | | | | 322 | | | | 431 | | | | 557 | | | | 671 | | | | 252 | | | | 750 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total loans | | | 2,645,293 | | | | 2,593,361 | | | | 2,585,296 | | | | 2,574,063 | | | | 2,530,476 | | | | 2,619,327 | | | | 2,507,098 | |
| Less | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses | | | 29,248 | | | | 28,860 | | | | 29,503 | | | | 28,278 | | | | 27,482 | | | | 29,054 | | | | 27,625 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net loans | | | 2,616,045 | | | | 2,564,501 | | | | 2,555,793 | | | | 2,545,785 | | | | 2,502,994 | | | | 2,590,273 | | | | 2,479,473 | |
| Premises and equipment | | | 78,933 | | | | 78,969 | | | | 78,992 | | | | 79,102 | | | | 79,491 | | | | 78,951 | | | | 79,654 | |
| Goodwill | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 28,261 | | | | 28,261 | |
| Other intangibles | | | 652 | | | | 680 | | | | 749 | | | | 915 | | | | 1,096 | | | | 666 | | | | 3,268 | |
| Accrued interest and other assets | | | 126,837 | | | | 125,149 | | | | 129,305 | | | | 136,561 | | | | 127,175 | | | | 125,993 | | | | 127,035 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 3,361,649 | | | $ | 3,298,663 | | | $ | 3,338,828 | | | $ | 3,309,800 | | | $ | 3,291,756 | | | $ | 3,330,156 | | | $ | 3,295,530 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing | | $ | 590,464 | | | $ | 623,206 | | | $ | 607,009 | | | $ | 632,890 | | | $ | 606,320 | | | $ | 606,835 | | | $ | 626,323 | |
| Savings | | | 617,029 | | | | 610,449 | | | | 604,063 | | | | 586,065 | | | | 578,357 | | | | 613,739 | | | | 561,821 | |
| Time | | | 1,193,447 | | | | 1,219,373 | | | | 1,250,392 | | | | 1,231,875 | | | | 1,219,242 | | | | 1,206,410 | | | | 1,217,264 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | | 2,400,940 | | | | 2,453,028 | | | | 2,461,464 | | | | 2,450,830 | | | | 2,403,919 | | | | 2,426,984 | | | | 2,405,408 | |
| Noninterest-bearing | | | 394,352 | | | | 379,240 | | | | 399,304 | | | | 385,653 | | | | 405,179 | | | | 386,796 | | | | 403,448 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 2,795,292 | | | | 2,832,268 | | | | 2,860,768 | | | | 2,836,483 | | | | 2,809,098 | | | | 2,813,780 | | | | 2,808,856 | |
| Short-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 25,771 | | | | 26,261 | | | | 28,952 | | | | 29,385 | | | | 34,280 | | | | 26,016 | | | | 40,305 | |
| Federal Home Loan Bank | | | 114,654 | | | | 614 | | | | 0 | | | | 0 | | | | 0 | | | | 57,634 | | | | 0 | |
| Other | | | 53,758 | | | | 66,154 | | | | 77,772 | | | | 58,914 | | | | 52,849 | | | | 59,956 | | | | 47,522 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total short-term borrowings | | | 194,183 | | | | 93,029 | | | | 106,724 | | | | 88,299 | | | | 87,129 | | | | 143,606 | | | | 87,827 | |
| Federal Home Loan Bank long-term debt | | | 41,606 | | | | 44,250 | | | | 50,532 | | | | 57,860 | | | | 59,413 | | | | 42,928 | | | | 60,774 | |
| Other long-term debt | | | 20,620 | | | | 20,620 | | | | 20,620 | | | | 30,369 | | | | 30,930 | | | | 20,620 | | | | 30,930 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total borrowed funds | | | 256,409 | | | | 157,899 | | | | 177,876 | | | | 176,528 | | | | 177,472 | | | | 207,154 | | | | 179,531 | |
| Accrued interest and other liabilities | | | 31,145 | | | | 31,681 | | | | 23,915 | | | | 20,606 | | | | 22,832 | | | | 31,413 | | | | 22,752 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 3,082,846 | | | | 3,021,848 | | | | 3,062,559 | | | | 3,033,617 | | | | 3,009,402 | | | | 3,052,347 | | | | 3,011,139 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | 390,237 | | | | 391,079 | | | | 391,606 | | | | 390,898 | | | | 391,536 | | | | 390,658 | | | | 392,218 | |
| Retained earnings | | | 81,045 | | | | 79,951 | | | | 81,615 | | | | 77,428 | | | | 74,049 | | | | 80,498 | | | | 74,271 | |
| Accumulated other comprehensive loss | | | (4,211 | ) | | | (4,977 | ) | | | (6,670 | ) | | | (15,097 | ) | | | (13,739 | ) | | | (4,594 | ) | | | (13,732 | ) |
| Treasury stock, at cost | | | (188,268 | ) | | | (189,238 | ) | | | (190,282 | ) | | | (177,046 | ) | | | (169,492 | ) | | | (188,753 | ) | | | (168,366 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Shareholders’ Equity | | | 278,803 | | | | 276,815 | | | | 276,269 | | | | 276,183 | | | | 282,354 | | | | 277,809 | | | | 284,391 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 3,361,649 | | | $ | 3,298,663 | | | $ | 3,338,828 | | | $ | 3,309,800 | | | $ | 3,291,756 | | | $ | 3,330,156 | | | $ | 3,295,530 | |
| | | | | | | | | | | | | | | | | | | | | | |
FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS(1)
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarterly Averages | | | Year-to-Date Averages | |
| | | Jun. 30, 2008 | | | Mar. 31, 2008 | | | Jun. 30, 2007 | | | Jun. 30, 2008 | | | Jun. 30, 2007 | |
| | | Balance | | | Yield | | | Balance | | | Yield | | | Balance | | | Yield | | | Balance | | | Yield | | | Balance | | | Yield | |
Earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities | | $ | 422,463 | | | | 4.93 | % | | $ | 343,553 | | | | 5.05 | % | | $ | 364,050 | | | | 5.15 | % | | $ | 383,883 | | | | 4.99 | % | | $ | 365,719 | | | | 5.22 | % |
| Interest-bearing deposits with other banks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal funds sold | | | 4,095 | | | | 3.93 | % | | | 65,799 | | | | 3.45 | % | | | 93,986 | | | | 5.30 | % | | | 34,947 | | | | 3.49 | % | | | 114,198 | | | | 5.29 | % |
Gross loans (2) | | | 2,648,327 | | | | 6.02 | % | | | 2,596,483 | | | | 6.62 | % | | | 2,530,638 | | | | 7.18 | % | | | 2,622,405 | | | | 6.33 | % | | | 2,510,557 | | | | 7.26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total earning assets | | | 3,074,885 | | | | 5.87 | % | | | 3,005,835 | | | | 6.37 | % | | | 2,988,674 | | | | 6.87 | % | | | 3,041,235 | | | | 6.13 | % | | | 2,990,474 | | | | 6.93 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonearning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses | | | (29,248 | ) | | | | | | | (28,860 | ) | | | | | | | (27,482 | ) | | | | | | | (29,054 | ) | | | | | | | (27,625 | ) | | | | |
| Cash and due from banks | | | 81,329 | | | | | | | | 86,879 | | | | | | | | 94,541 | | | | | | | | 84,104 | | | | | | | | 94,463 | | | | | |
| Accrued interest and other assets | | | 234,683 | | | | | | | | 234,809 | | | | | | | | 236,023 | | | | | | | | 233,871 | | | | | | | | 238,218 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 3,361,649 | | | | | | | $ | 3,298,663 | | | | | | | $ | 3,291,756 | | | | | | | $ | 3,330,156 | | | | | | | $ | 3,295,530 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | $ | 2,400,940 | | | | 2.45 | % | | $ | 2,453,028 | | | | 2.91 | % | | $ | 2,403,919 | | | | 3.24 | % | | $ | 2,426,984 | | | | 2.69 | % | | $ | 2,405,408 | | | | 3.22 | % |
| Borrowed funds | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | 194,183 | | | | 2.34 | % | | | 93,029 | | | | 3.42 | % | | | 87,129 | | | | 4.53 | % | | | 143,606 | | | | 2.70 | % | | | 87,827 | | | | 4.55 | % |
| Federal Home Loan Bank long-term debt | | | 41,606 | | | | 3.71 | % | | | 44,250 | | | | 3.69 | % | | | 59,413 | | | | 3.66 | % | | | 42,928 | | | | 3.71 | % | | | 60,774 | | | | 3.65 | % |
| Other long-term debt | | | 20,620 | | | | 5.89 | % | | | 20,620 | | | | 8.04 | % | | | 30,930 | | | | 8.68 | % | | | 20,620 | | | | 6.98 | % | | | 30,930 | | | | 8.62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total borrowed funds | | | 256,409 | | | | 2.85 | % | | | 157,899 | | | | 4.10 | % | | | 177,472 | | | | 4.96 | % | | | 207,154 | | | | 3.34 | % | | | 179,531 | | | | 4.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 2,657,349 | | | | 2.49 | % | | | 2,610,927 | | | | 2.98 | % | | | 2,581,391 | | | | 3.36 | % | | | 2,634,138 | | | | 2.74 | % | | | 2,584,939 | | | | 3.34 | % |
| |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 394,352 | | | | | | | | 379,240 | | | | | | | | 405,179 | | | | | | | | 386,796 | | | | | | | | 403,448 | | | | | |
| Other liabilities | | | 31,145 | | | | | | | | 31,681 | | | | | | | | 22,832 | | | | | | | | 31,413 | | | | | | | | 22,752 | | | | | |
| Shareholders’ equity | | | 278,803 | | | | | | | | 276,815 | | | | | | | | 282,354 | | | | | | | | 277,809 | | | | | | | | 284,391 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities & shareholders’ equity | | $ | 3,361,649 | | | | | | | $ | 3,298,663 | | | | | | | $ | 3,291,756 | | | | | | | $ | 3,330,156 | | | | | | | $ | 3,295,530 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Net interest income (1) | | $ | 28,414 | | | | | | | $ | 28,249 | | | | | | | $ | 29,601 | | | | | | | $ | 56,663 | | | | | | | $ | 60,004 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest spread (1) | | | | | | | 3.38 | % | | | | | | | 3.39 | % | | | | | | | 3.51 | % | | | | | | | 3.39 | % | | | | | | | 3.59 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest margin (1) | | | | | | | 3.72 | % | | | | | | | 3.78 | % | | | | | | | 3.97 | % | | | | | | | 3.75 | % | | | | | | | 4.05 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | Not tax equivalent. |
| |
| (2) | | Loans held for sale and nonaccrual loans are both included in gross loans. |
FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS(1)
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Linked Qtr. Income Variance | | | Comparable Qtr. Income Variance | | | Year-to-Date Income Variance | |
| | | Rate | | | Volume | | | Total | | | Rate | | | Volume | | | Total | | | Rate | | | Volume | | | Total | |
Earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities | | $ | (100 | ) | | $ | 967 | | | $ | 867 | | | $ | (210 | ) | | $ | 716 | | | $ | 506 | | | | (431 | ) | | $ | 449 | | | $ | 18 | |
| Federal funds sold | | | 78 | | | | (603 | ) | | | (525 | ) | | | (323 | ) | | | (878 | ) | | | (1,201 | ) | | | (1,020 | ) | | | (1,372 | ) | | | (2,392 | ) |
Gross loans (2) | | | (3,851 | ) | | | 776 | | | | (3,075 | ) | | | (7,407 | ) | | | 1,762 | | | | (5,645 | ) | | | (11,501 | ) | | | 3,513 | | | | (7,988 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total earning assets | | | (3,873 | ) | | | 1,140 | | | | (2,733 | ) | | | (7,940 | ) | | | 1,600 | | | | (6,340 | ) | | | (12,952 | ) | | | 2,590 | | | | (10,362 | ) |
| |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | $ | (2,786 | ) | | $ | (318 | ) | | $ | (3,104 | ) | | $ | (4,756 | ) | | $ | (18 | ) | | $ | (4,774 | ) | | $ | (6,332 | ) | | $ | 288 | | | $ | (6,044 | ) |
| Borrowed funds | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | (251 | ) | | | 589 | | | | 338 | | | | (477 | ) | | | 623 | | | | 146 | | | | (805 | ) | | | 747 | | | | (58 | ) |
| Federal Home Loan Bank long-term debt | | | 2 | | | | (24 | ) | | | (22 | ) | | | 6 | | | | (164 | ) | | | (158 | ) | | | 17 | | | | (328 | ) | | | (311 | ) |
| Other long-term debt | | | (110 | ) | | | — | | | | (110 | ) | | | (216 | ) | | | (151 | ) | | | (367 | ) | | | (251 | ) | | | (357 | ) | | | (608 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total borrowed funds | | | (359 | ) | | | 565 | | | | 206 | | | | (687 | ) | | | 308 | | | | (379 | ) | | | (1,039 | ) | | | 62 | | | | (977 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | (3,145 | ) | | | 247 | | | | (2,898 | ) | | | (5,443 | ) | | | 290 | | | | (5,153 | ) | | | (7,371 | ) | | | 350 | | | | (7,021 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income (1) | | $ | (728 | ) | | $ | 893 | | | $ | 165 | | | $ | (2,497 | ) | | $ | 1,310 | | | $ | (1,187 | ) | | $ | (5,581 | ) | | $ | 2,240 | | | $ | (3,341 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest spread(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest margin(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | Not tax equivalent. |
| |
| (2) | | Loans held for sale and nonaccrual loans are both included in gross loans. |
FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | |
| | | Jun. 30, | | | Mar. 31, | | | Dec. 31, | | | Sep. 30, | | | Jun. 30, | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | |
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 29,718 | | | $ | 29,057 | | | $ | 29,136 | | | $ | 28,060 | | | $ | 27,407 | |
| Provision for loan and lease losses | | | 2,493 | | | | 3,223 | | | | 1,640 | | | | 2,558 | | | | 2,098 | |
| Gross charge-offs | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 946 | | | | 545 | | | | 1,433 | | | | 1,008 | | | | 920 | |
| Real estate — commercial | | | 589 | | | | 806 | | | | 465 | | | | 76 | | | | 176 | |
| Real estate — residential | | | 227 | | | | 39 | | | | 33 | | | | 49 | | | | 57 | |
| Installment | | | 482 | | | | 564 | | | | 522 | | | | 471 | | | | 604 | |
| Home equity | | | 525 | | | | 651 | | | | 285 | | | | 189 | | | | 149 | |
| All other | | | 426 | | | | 498 | | | | 304 | | | | 304 | | | | 224 | |
| | | | | | | | | | | | | | | | |
Total gross charge-offs | | | 3,195 | | | | 3,103 | | | | 3,042 | | | | 2,097 | | | | 2,130 | |
| Recoveries | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 166 | | | | 144 | | | | 342 | | | | 145 | | | | 246 | |
| Real estate — commercial | | | 19 | | | | 3 | | | | 632 | | | | 124 | | | | 48 | |
| Real estate — residential | | | 5 | | | | 11 | | | | 3 | | | | 25 | | | | 10 | |
| Installment | | | 246 | | | | 315 | | | | 242 | | | | 263 | | | | 288 | |
| Home equity | | | 30 | | | | 0 | | | | 19 | | | | 12 | | | | 25 | |
| All other | | | 98 | | | | 68 | | | | 85 | | | | 46 | | | | 68 | |
| | | | | | | | | | | | | | | | |
| Total recoveries | | | 564 | | | | 541 | | | | 1,323 | | | | 615 | | | | 685 | |
| | | | | | | | | | | | | | | | |
| Total net charge-offs | | | 2,631 | | | | 2,562 | | | | 1,719 | | | | 1,482 | | | | 1,445 | |
| | | | | | | | | | | | | | | | |
| Ending allowance for loan and lease losses | | $ | 29,580 | | | $ | 29,718 | | | $ | 29,057 | | | $ | 29,136 | | | $ | 28,060 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) |
| Commercial | | | 0.39 | % | | | 0.21 | % | | | 0.56 | % | | | 0.45 | % | | | 0.37 | % |
| Real estate — commercial | | | 0.31 | % | | | 0.46 | % | | | (0.10 | %) | | | (0.03 | %) | | | 0.08 | % |
| Real estate — residential | | | 0.18 | % | | | 0.02 | % | | | 0.02 | % | | | 0.02 | % | | | 0.03 | % |
| Installment | | | 0.78 | % | | | 0.75 | % | | | 0.76 | % | | | 0.53 | % | | | 0.74 | % |
| Home equity | | | 0.77 | % | | | 1.04 | % | | | 0.43 | % | | | 0.29 | % | | | 0.21 | % |
| All other | | | 0.64 | % | | | 0.92 | % | | | 0.48 | % | | | 0.62 | % | | | 0.44 | % |
| | | | | | | | | | | | | | | | |
Total net charge-offs | | | 0.40 | % | | | 0.40 | % | | | 0.26 | % | | | 0.23 | % | | | 0.23 | % |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS |
| Nonaccrual loans | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 5,447 | | | $ | 3,952 | | | $ | 2,677 | | | $ | 3,782 | | | $ | 6,812 | |
| Real estate — commercial | | | 3,592 | | | | 4,415 | | | | 5,965 | | | | 5,343 | | | | 4,140 | |
| Real estate — residential | | | 4,461 | | | | 4,529 | | | | 3,063 | | | | 2,147 | | | | 1,694 | |
| Installment | | | 438 | | | | 544 | | | | 734 | | | | 745 | | | | 681 | |
| Home equity | | | 866 | | | | 1,221 | | | | 1,662 | | | | 1,117 | | | | 1,048 | |
| All other | | | 8 | | | | 30 | | | | 12 | | | | 8 | | | | 21 | |
| | | | | | | | | | | | | | | | |
| Total nonaccrual loans | | | 14,812 | | | | 14,691 | | | | 14,113 | | | | 13,142 | | | | 14,396 | |
| Restructured loans | | | 554 | | | | 562 | | | | 567 | | | | 574 | | | | 581 | |
| | | | | | | | | | | | | | | | |
| Total nonperforming loans | | | 15,366 | | | | 15,253 | | | | 14,680 | | | | 13,716 | | | | 14,977 | |
| Other real estate owned (OREO) | | | 3,763 | | | | 2,368 | | | | 2,636 | | | | 3,124 | | | | 2,023 | |
| | | | | | | | | | | | | | | | |
| Total nonperforming assets | | | 19,129 | | | | 17,621 | | | | 17,316 | | | | 16,840 | | | | 17,000 | |
| Accruing loans past due 90 days or more | | | 245 | | | | 372 | | | | 313 | | | | 222 | | | | 165 | |
| | | | | | | | | | | | | | | | |
| Total underperforming assets | | $ | 19,374 | | | $ | 17,993 | | | $ | 17,629 | | | $ | 17,062 | | | $ | 17,165 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Total classified assets | | $ | 54,511 | | | $ | 55,302 | | | $ | 49,372 | | | $ | 53,997 | | | $ | 49,263 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses to | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | 199.70 | % | | | 202.29 | % | | | 205.89 | % | | | 221.70 | % | | | 194.92 | % |
| Nonperforming loans | | | 192.50 | % | | | 194.83 | % | | | 197.94 | % | | | 212.42 | % | | | 187.35 | % |
| Total ending loans | | | 1.11 | % | | | 1.14 | % | | | 1.12 | % | | | 1.12 | % | | | 1.10 | % |
| Nonperforming loans to total loans | | | 0.57 | % | | | 0.58 | % | | | 0.56 | % | | | 0.53 | % | | | 0.59 | % |
| Nonperforming assets to | | | | | | | | | | | | | | | | | | | | |
| Ending loans, plus OREO | | | 0.71 | % | | | 0.67 | % | | | 0.67 | % | | | 0.65 | % | | | 0.67 | % |
| Total assets | | | 0.55 | % | | | 0.53 | % | | | 0.51 | % | | | 0.51 | % | | | 0.52 | % |
FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | Six months ended, | |
| | | Jun. 30, | | | Mar. 31, | | | Dec. 31, | | | Sep. 30, | | | Jun. 30, | | | Jun. 30, | | | Jun. 30, | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2008 | | | 2007 | |
PER COMMON SHARE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Market Price | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 13.88 | | | $ | 13.81 | | | $ | 13.89 | | | $ | 15.12 | | | $ | 15.72 | | | $ | 13.88 | | | $ | 16.76 | |
| Low | | $ | 9.20 | | | $ | 10.19 | | | $ | 10.12 | | | $ | 10.76 | | | $ | 14.43 | | | $ | 9.20 | | | $ | 14.43 | |
| Close | | $ | 9.20 | | | $ | 13.45 | | | $ | 11.40 | | | $ | 12.78 | | | $ | 14.99 | | | $ | 9.20 | | | $ | 14.99 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average shares outstanding — basic | | | 37,114,451 | | | | 37,066,754 | | | | 37,370,618 | | | | 38,383,228 | | | | 38,965,409 | | | | 37,090,603 | | | | 39,042,827 | |
| Average shares outstanding — diluted | | | 37,524,789 | | | | 37,431,918 | | | | 37,370,650 | | | | 38,383,228 | | | | 38,967,061 | | | | 37,478,353 | | | | 39,050,919 | |
| Ending shares outstanding | | | 37,483,384 | | | | 37,488,229 | | | | 37,367,808 | | | | 37,405,433 | | | | 38,883,083 | | | | 37,483,384 | | | | 38,883,083 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
REGULATORY CAPITAL | | Preliminary | | | | | | | | | | | | | | | | | | Preliminary | | | | |
| Tier 1 Capital | | $ | 274,372 | | | $ | 272,614 | | | $ | 274,046 | | | $ | 269,961 | | | $ | 295,996 | | | $ | 274,372 | | | $ | 295,996 | |
| Tier 1 Ratio | | | 9.99 | % | | | 10.20 | % | | | 10.29 | % | | | 10.18 | % | | | 11.13 | % | | | 9.99 | % | | | 11.13 | % |
| Total Capital | | $ | 303,952 | | | $ | 302,332 | | | $ | 303,103 | | | $ | 299,097 | | | $ | 324,056 | | | $ | 303,952 | | | $ | 324,056 | |
| Total Capital Ratio | | | 11.06 | % | | | 11.31 | % | | | 11.38 | % | | | 11.27 | % | | | 12.18 | % | | | 11.06 | % | | | 12.18 | % |
| Total Capital in excess of minimum requirement | | $ | 84,147 | | | $ | 88,553 | | | $ | 90,062 | | | $ | 86,857 | | | $ | 111,263 | | | $ | 84,147 | | | $ | 111,263 | |
| Total Risk-Adjusted Assets | | $ | 2,747,559 | | | $ | 2,672,242 | | | $ | 2,663,007 | | | $ | 2,652,999 | | | $ | 2,659,915 | | | $ | 2,747,559 | | | $ | 2,659,915 | |
| Leverage Ratio | | | 8.21 | % | | | 8.32 | % | | | 8.26 | % | | | 8.21 | % | | | 9.04 | % | | | 8.29 | % | | | 9.04 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
OTHER CAPITAL RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ending shareholders’ equity to ending assets | | | 7.96 | % | | | 8.36 | % | | | 8.21 | % | | | 8.16 | % | | | 8.53 | % | | | 7.96 | % | | | 8.53 | % |
| Ending tangible shareholders’ equity to ending tangible assets | | | 7.18 | % | | | 7.55 | % | | | 7.41 | % | | | 7.35 | % | | | 7.71 | % | | | 7.18 | % | | | 7.71 | % |
| Average shareholders’ equity to average assets | | | 8.29 | % | | | 8.39 | % | | | 8.27 | % | | | 8.34 | % | | | 8.58 | % | | | 8.34 | % | | | 8.63 | % |
| Average tangible shareholders’ equity to average tangible assets | | | 7.50 | % | | | 7.58 | % | | | 7.47 | % | | | 7.53 | % | | | 7.76 | % | | | 7.54 | % | | | 7.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
REPURCHASE PROGRAM (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares repurchased | | | 0 | | | | 0 | | | | 34,300 | | | | 1,469,700 | | | | 252,000 | | | | 0 | | | | 496,000 | |
| Average share repurchase price | | $ | 0.00 | | | $ | 0.00 | | | $ | 13.52 | | | $ | 13.00 | | | $ | 15.07 | | | $ | 0.00 | | | $ | 15.58 | |
| Total cost of shares repurchased | | $ | 0 | | | $ | 0 | | | $ | 464 | | | $ | 19,105 | | | $ | 3,797 | | | $ | 0 | | | $ | 7,728,288 | |
| | |
| (1) | | Represents share repurchases as part of publicly announced plans. |
