First Financial Bancorp. (FFBC) 8-K First Financial Bancorp Reports 2008 Financial Results

EXHIBIT 99.1

First Financial Bancorp Reports 2008 Financial Results

§ Full-year 2008 net income of $23.0 million and earnings per diluted share of $0.61

§ Fourth quarter 2008 net income of $2.1 million and earnings per diluted share of $0.06

§ Increased the allowance for loan and lease losses to 1.34% of total loans at December 31, 2008 from 1.14% at September 30, 2008

– Allowance for loan and lease losses was 197% of nonperforming loans at December 31, 2008

§ Capital and liquidity remain strong

– Total regulatory capital exceeded the minimum required by $161.9 million

§ Continued growth in commercial lending

– Fourth quarter 2008 average commercial loans increased 11% on an annualized basis from the third quarter of 2008

– Full-year 2008 average commercial loans increased 15% from the full-year of 2007

§ Quarterly common dividend reduced to $0.10 per share effective in the second quarter of 2009

Cincinnati, Ohio – January 28, 2009 — First Financial Bancorp (Nasdaq: FFBC) announced today results for the full-year and fourth quarter of 2008. For the full-year of 2008, net income was $23.0 million and earnings per diluted share were $0.61, compared with net income of $35.7 million and earnings per diluted share of $0.93 for the full-year of 2007. For the fourth quarter of 2008, net income was $2.1 million and earnings per diluted share were $0.06, compared with net income of $10.7 million and earnings per diluted share of $0.29 for the fourth quarter of 2007, and net income of $5.7 million and earnings per diluted share of $0.15 for the third quarter of 2008.

The following table presents First Financial’s return on average assets and return on average shareholders’ equity for the third and fourth quarters of 2008, the fourth quarter of 2007, and the full-years of 2008 and 2007.

Table I
	Quarter							Year
		4Q-08		3Q-08		4Q-07		2008			2007
Return on Average Assets		0.23	%	0.66	%	1.27	%		0.67	%		1.08	%
Return on Average Shareholders' Equity		2.89	%	8.24	%	15.37	%		8.21	%		12.73	%

Fourth quarter 2008 results, when compared with the third quarter of 2008, were impacted by the previously announced increase in the loan loss reserve and a higher level of net charge-offs due to the rapid deterioration in the overall economic environment. The financial impact of these items was a decrease to fourth quarter 2008 net income and earnings per diluted share on an after-tax basis of $4.9 million, or $0.13 per share, respectively.

The following table presents a summary of significant items impacting results for the third and fourth quarters and full-years of 2008 and 2007.

Table II	($ in thousands, excluding per share data)
	2008									2007
	Full-Year				4Q			3Q		Full-Year				4Q			3Q
Loss on FHLMC shares*	$	(3,738	)	$	(137	)	$	(3,400	)	$	-		$	-		$	-
Increase in Loan Loss Reserve & Higher Charge-offs		(7,539	)		(7,539	)		-			-			-			-
Gain on Sale of Merchant Payment Processing Portfolio		-			-			-			5,501			5,501			-
Pension Settlement Charges		-			-			-			(2,222	)		(2,222	)		-
Gains on Sales of Investment Securities (VISA 2008; MasterCard 2007)		1,585			-			-			367			-			367
Gain on Sale of Mortgage Servicing Rights		-			-			-			1,061			-			-
Visa Member Litigation Charges		-			-			-			(461	)		(461	)		-
Impact to Pre-Tax Net Income	$	(9,692	)	$	(7,676	)	$	(3,400	)	$	4,246		$	2,818		$	367
After-Tax Impact to Earnings Per Diluted Share	$	(0.17	)	$	(0.13	)	$	(0.06	)	$	0.07		$	0.05		$	0.01

* Loss related to the company's investment in 200,000 Federal Home Loan Mortgage Corporation (FHLMC) perpetual preferred series V shares.

Commenting on the company’s results, Claude Davis, First Financial Bancorp’s president and chief executive officer said, “We are taking a number of steps to better position ourselves for these uncertain economic conditions. Throughout 2008, the company grew commercial loans, controlled its expenses, and maintained strong capital and liquidity levels. We are carefully managing the company for continued long-term success and making the appropriate decisions to support continued client growth in a difficult economy. Our associates are to be commended for their dedication and hard work. As a result of their efforts we were able to profitably manage the company during these unprecedented times and deliver to our clients’ products and services from a bank they know they can depend on.”

“Given the ongoing decline in economic conditions, and in a continued effort to further strengthen our capital level, the board of directors has made the decision to reduce the quarterly cash dividend to common shareholders, effective with the next quarterly dividend payment,” added Mr. Davis. “The expected quarterly cash dividend will be reduced to $0.10 per share from the previous $0.17 per share. We believe that this action is consistent with our other capital management strategies and will further boost our already strong capital levels. While it is difficult to predict when stability will return to the U.S. economy, we believe that our excess risk-based capital position will allow the company to successfully weather the economic challenges that lie ahead, and still allow us to take advantage of growth opportunities.”

For additional information on First Financial’s comparable financial results, please refer to the discussions that follow detailing revenue and expense fluctuations.

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DETAILS OF RESULTS

Unless otherwise noted, all amounts discussed in this 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

The following table presents First Financial’s key credit quality metrics.

Table III
	Three Months Ended															Twelve Months Ended
	December 31, 2008			September 30, 2008			June 30, 2008			March 31, 2008			December 31, 2007			December 31, 2008			December 31, 2007
Total Nonperforming Loans	$	18,185		$	14,038		$	15,366		$	15,253		$	14,680		$	18,185		$	14,680
Total Nonperforming Assets	$	22,213		$	18,648		$	19,129		$	17,621		$	17,316		$	22,213		$	17,316
Nonperforming Assets as a % of:
Period-End Loans, Plus Other Real Estate Owned		0.83	%		0.70	%		0.71	%		0.67	%		0.67	%		0.83	%		0.67	%
Total Assets		0.60	%		0.53	%		0.55	%		0.53	%		0.51	%		0.60	%		0.51	%
Nonperforming Loans as a % of Total Loans		0.68	%		0.53	%		0.57	%		0.58	%		0.56	%		0.68	%		0.56	%
Allowance for Loan & Lease Losses	$	35,873		$	30,353		$	29,580		$	29,718		$	29,057		$	35,873		$	29,057
Allowance for Loan & Lease Losses as a % of:
Period-End Loans		1.34	%		1.14	%		1.11	%		1.14	%		1.12	%		1.34	%		1.12	%
Nonaccrual Loans		199.5	%		219.5	%		199.7	%		202.3	%		205.9	%		199.5	%		205.9	%
Nonperforming Loans		197.3	%		216.2	%		192.5	%		194.8	%		197.9	%		197.3	%		197.9	%
Total Net Charge-Offs	$	4,955		$	2,446		$	2,631		$	2,652		$	1,719		$	12,594		$	5,981
Annualized Net-Charge-Offs as a % of Average Loans & Leases		0.73	%		0.36	%		0.40	%		0.40	%		0.26	%		0.47	%		0.24	%

First Financial’s credit quality trends were relatively stable and within their expected range throughout most of 2008. However, toward the end of the year, the company began to experience some deterioration within its commercial lending portfolios as borrowers came under increased stress due to the continued economic downturn, eroding real estate values and increasing levels of unemployment. During the fourth quarter, the company announced its intentions to charge-off two large and previously identified credits from its commercial and commercial real estate lending portfolios.This action resulted in a $2.4 million increase to net charge-offs compared with the third quarter 2008 level. These two credits were 9 basis points of the full-year 2008 net charge-offs to average loans and leases ratio of 47 basis points.

Also consistent with the deteriorating economic conditions, the resolution of problem credits across all lending portfolios has begun to take longer than previously experienced, resulting in nonperforming loans increasing at a faster pace than historical levels. At the end of the fourth quarter of 2008, total nonperforming loans increased $4.1 million to $18.2 million, or 0.68% of total loans, compared with $14.0 million, or 0.53% of total loans at the end of the third quarter of 2008.

Although credit costs trended higher during the fourth quarter of 2008, coverage ratios remained strong. The allowance for loan and lease losses as a percent of nonperforming loans was 197.3% at the end of the fourth quarter of 2008, compared with 216.2% at the end of the third quarter of 2008.

First Financial believes that its fourth quarter and full-year 2008 credit costs, although higher than previous levels, are still favorable relative to industry and peer levels.

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Total loans 30 to 89 days past due at December 31, 2008 were $22.6 million, or 0.84% of period end loans, compared with $22.3 million, or 0.84% at September 30, 2008, and $26.5 million, or 1.02% at December 31, 2007. Management closely monitors these trends and ratios and currently considers the level of delinquent loans consistent with its expectation of the total loan portfolio’s behavior.

The allowance for loan and lease losses grew a net $5.5 million from the third quarter level. This increase reflects the company’s recognition of a continuing decline in economic conditions and the uncertainty surrounding the timing of an economic recovery. The allowance for loan and lease losses as a percent of period-end loans is based on the estimated potential losses inherent in the loan portfolio in today’s economic environment. The company believes that the $35.9 million allowance for loan and lease losses at December 31, 2008 or 1.34% of period end loans is adequate to absorb probable credit losses inherent in its lending portfolio.

Other real estate owned decreased $0.6 million to $4.0 million at December 31, 2008 from $4.6 million at September 30, 2008, and increased $1.4 million from $2.6 million at December 31, 2007. The linked quarter decrease was primarily as a result of net dispositions and valuation adjustments during the quarter, and the year over year increase was primarily a result of net additions of both commercial and residential real estate during the year.

For further details on the quarter-over-quarter and year-to-date changes in credit quality, please see the attached Credit Quality schedule.

CAPITAL MANAGEMENT

All regulatory capital ratios exceeded the amounts necessary to be classified as “well-capitalized” at December 31, 2008. In addition, total regulatory capital exceeded the “minimum” requirement by approximately $161.9 million, on a consolidated basis. The following table presents the regulatory capital ratios for First Financial Bancorp and its subsidiary, First Financial Bank at December 31, 2008.

Table IV	FFBC			Bank			Regulatory "well-capitalized" minimum
Leverage Ratio		10.00	%		8.77	%		5	%
Tier 1 Capital Ratio		12.38	%		10.86	%		6	%
Total Risk-based Capital Ratio		13.62	%		12.37	%		10	%
EOP Tangible Equity / EOP Tangible Assets		8.70	%		N/A			N/A
EOP Tangible Common Equity / EOP Tangible Assets		6.52	%		N/A			N/A
N/A = not applicable

As previously discussed, the board of directors has made the decision to reduce the quarterly cash dividend to common shareholders effective with the next quarterly dividend. The expected quarterly cash dividend will be reduced to $0.10 per share from the previous $0.17 per share. The board has determined that a dividend payout range of between 40% and 60% of earnings available to common shareholders is appropriate as a long-term target.

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U.S. TREASURY CAPITAL PURCHASE PROGRAM

On December 23, 2008, First Financial completed the sale of $80.0 million in perpetual preferred securities to the U.S. Treasury under its Capital Purchase Program (CPP), as a component of its Troubled Asset Relief Program (TARP), representing approximately 3.0% of risk-weighted assets at September 30, 2008. First Financial will begin reporting the use of this capital in both its quarterly earnings releases and quarterly and annual SEC filings.

Use of Capital

First Financial has both a short and long-term plan for utilization of the CPP proceeds. In anticipation of the receipt of the $80.0 million in capital, the company began purchasing agency-guaranteed, mortgage-backed securities. The investment portfolio specifically designated as the CPP Investment Portfolio totaled approximately $121.9 million at December 31, 2008. The ratio of investments to capital, or leverage on the CPP capital, was 1.5 times the proceeds received. The company has established an internal maximum on the CPP Investment Portfolio not to exceed 5 times. Additional information on these investment securities is provided within the Investment section of this news release.

It is expected that as additional lending opportunities become available, the cash flows from the CPP Investment Portfolio will provide sufficient liquidity and capital support for redeployment into loans.

The company expects that earnings from the CPP Investment Portfolio will have a positive effect on net interest income and should exceed the quarterly dividends payable to the U.S. Treasury on its investment in the preferred shares.

Although loan growth remained relatively strong throughout 2008, First Financial is evaluating several ways to increase lending volume consistent with the intent of the CPP program. The company is also working with its third-party servicer for residential mortgage loans to evaluate appropriate foreclosure modification solutions. Additional details on these programs will be disclosed as they are implemented.

Funding

Funding for the CPP Investment Portfolio is being evaluated in order to take advantage of the low interest rate environment. While the goal is to achieve duration-matched funding in the near future, the portfolio was funded with short-term borrowings as of December 31, 2008.

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NET INTEREST INCOME & NET INTEREST MARGIN

Table V	Quarter									Year
		4Q-08			3Q-08			4Q-07		2008			2007
Net Interest Income	$	30,129		$	29,410		$	29,079		$	116,202		$	118,500
Net Interest Margin		3.67	%		3.68	%		3.79	%		3.71	%		3.94	%
Net Interest Margin (fully tax equivalent)		3.71	%		3.73	%		3.86	%		3.77	%		4.01	%

Since September 2007, the Federal Reserve has decreased the targeted federal funds rate 10 times from 5.25% to 0.25%, which has led to a decline in most market interest rates and negatively impacted the company’s asset sensitive balance sheet. The net interest margin began to stabilize in the last half of 2008. However, as a result of further interest rate reductions late in the year, the net interest margin is expected to experience continued downward pressure.

Full-year 2008 net interest income declined $2.3 million from the full-year of 2007, while fourth quarter 2008 net interest income increased $1.1 million from the fourth quarter of 2007, and $0.7 million from the third quarter of 2008. Increases in the end of period and average commercial lending portfolios combined with growth in the investment securities portfolio have partially offset the effects of market interest rate declines on net interest income. Although average total deposits declined throughout the year, a mix shift in deposits from higher-cost certificates of deposits to lower-cost transaction-based accounts has had a positive impact on the net interest margin.

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

§ Full-year 2008 noninterest income was $51.7 million, compared with $63.6 million for the full-year of 2007.

§ Fourth quarter 2008 noninterest income was $12.6 million, compared with $20.3 million in the fourth quarter of 2007, and $10.5 million in the third quarter of 2008.

The following table presents a summary of significant items impacting noninterest income for the periods mentioned above.

Table VI	Quarter								Year
		4Q-08			3Q-08			4Q-07	2008			2007
Loss on FHLMC shares	$	(137	)	$	(3,400	)	$	-	$	(3,738	)	$	-
Gain on Sale of Merchant Payment Processing Portfolio		-			-			5,501		-			5,501
Gain on Sale of Mortgage Servicing Rights		-			-			-		-			1,061
Gains on Sales of Investment Securities (VISA 2008; MasterCard 2007)		-			-			-		1,585			367
Impact to Noninterest Income	$	(137	)	$	(3,400	)	$	5,501	$	(2,153	)	$	6,929

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Full-year 2008 noninterest income declined $11.8 million from 2007’s comparable period. Excluding the significant items mentioned above, full-year 2008 noninterest income declined $2.8 million from the full-year of 2007. This decline was primarily due to $1.1 million in lower service charges on deposit accounts, and $1.0 million in lower trust and wealth management fees, as well as lower earnings on bank-owned life insurance.

Fourth quarter 2008 noninterest income declined $7.6 million from the fourth quarter of 2007, and increased $2.2 million from the third quarter of 2008. Excluding the significant items mentioned above, fourth quarter 2008 noninterest income declined $2.0 million from the fourth quarter of 2007 and $1.1 million from the third quarter of 2008. The declines from both periods were primarily due to lower service charges on deposit accounts, which declined $0.6 million from both the fourth quarter of 2007 and the third quarter of 2008, and lower trust and wealth management fees, which declined $1.2 million from the fourth quarter of 2007, and $0.6 million from the third quarter of 2008.

The company believes that the economic downturn, which has taken its toll on the spending habits of U.S. consumers and negatively impacted U.S. retail sales for six consecutive months, has also negatively affected First Financial’s client transaction volumes and led to lower deposit service charges both on a linked-quarter and year-over-year basis. The declines related to trust and wealth management fees are attributable to decreases in investment advisory and trust fees that are a result of lower asset valuations given overall market declines. Since June 30, 2008, assets under management by the company’s wealth management division have declined by approximately $344.0 million or 17.0% to $1.7 billion at December 31, 2008, primarily as a result of equity market value declines.

NONINTEREST EXPENSE

§ Full-year 2008 noninterest expense was $115.2 million, compared with $120.7 million for the full-year of 2007.

§ Fourth quarter 2008 noninterest expense was $29.8 million, compared with $31.4 million in the fourth quarter of 2007, and $28.3 million in the third quarter of 2008.

The following table presents a summary of significant items impacting noninterest expense for the fourth quarter of 2007 and the full-years of 2007 and 2008. There were no significant items impacting noninterest expense during the third and fourth quarters of 2008.

Table VII	Quarter			Year
		4Q-07		2008			2007
Pension Settlement Charges	$	2,222		$	-		$	2,222
Visa Member Litigation Charges		461			-			461
Liability for Retiree Medical Benefits		-			(1,285	)		-
Severance Costs		-			-			1,620
(Gain) Loss on Properties & Fixed Assets		(227	)		-			(575	)
Impact to Noninterest Expense	$	2,456		$	(1,285	)	$	3,728

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Full-year 2008 noninterest expense declined $5.6 million from the full-year of 2007. Excluding the significant items mentioned above, full-year of 2008 noninterest expense declined $0.6 million from the full-year of 2007. This decline was primarily attributable to lower salaries and benefits, as well as a decrease in incentive-based compensation.

Fourth quarter 2008 noninterest expense declined $1.5 million from the fourth quarter of 2007, and increased $1.5 million from the third quarter of 2008. Excluding the significant items mentioned above, fourth quarter 2008 noninterest expense increased $0.9 million from the fourth quarter of 2007. This increase was attributable to higher marketing costs and retirement plan expenses that were partially offset by lower incentive compensation, communications and professional service expenses during the quarter. The increase from the third quarter was due to higher marketing, and seasonal increases in both healthcare and retirement plan expenses, as well as a loss on the disposition of other real estate.

INCOME TAXES

Income tax expense was $10.4 million and the effective tax rate was 31.2% for the full-year of 2008, compared with income tax expense of $18.0 million and an effective tax rate of 33.5% for the full-year of 2007.  Income tax expense was $0.4 million and the effective tax rate was 15.1% for the fourth quarter of 2008, compared with income tax expense of $5.6 million and an effective tax rate of 34.5% for the fourth quarter of 2007. The lower effective tax rate for the fourth quarter and full-year of 2008 was due to the marginal impact of lower pre-tax earnings.

LOANS

In the third and fourth quarters of 2008, First Financial took steps to further manage the risk profile of its balance sheet by securitizing a total of $89.0 million in residential mortgage loans into agency guaranteed, mortgage-backed securities collateralized by those loans. The fourth quarter securitization consisted of $30.5 million in loans and the third quarter securitization consisted of $58.5 million in loans. These securitizations resulted in a reduction in credit risk on the balance sheet and a lower regulatory risk weighting for those assets. The assets remain on the balance sheet, but are now accounted for as investment securities available-for-sale rather than residential real estate loans.

INVESTMENTS

During the second quarter of 2008, First Financial began to increase the size of its investment portfolio. Since the end of the first quarter, the portfolio has grown approximately $307.8 million on a net basis. Approximately $194.2 million of securities were added during the fourth quarter of 2008, including $30.5 million in residential mortgage loans that were securitized and are now included in the investment securities portfolio. The portfolio selection criteria will continue to avoid securities that are backed by sub-prime assets and also those containing assets that would give rise to material geographic concentrations. At December 31, 2008, First Financial held approximately 82.7% of its available-for-sale securities in residential mortgage related investments, substantially all of which are held in highly-rated, agency-backed pass-through instruments.

Securities available-for-sale at December 31, 2008 were $659.8, compared with $306.9 million at December 31, 2007, and $492.6 million at September 30, 2008. The combined investment portfolio was 18.7% and 10.3% of total assets at December 31, 2008 and 2007, respectively, and 15.2% of total assets at September 30, 2008.

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The company recorded, as a component of equity in accumulated other comprehensive income, an   unrealized after-tax gain in the investment portfolio of approximately $6.9 million at December 31, 2008, compared with an unrealized gain of $0.5 million at September 30, 2008, and an unrealized gain of $0.3 million at December 31, 2007.

The following table presents a summary of the total investment portfolio at December 31, 2008.

Table VIII
													Base
	% of			Book		Book		Book		12/31/2008			Gain/
	Total			Value		Yield		Price		Market Value			(Loss)
Agency's		6.7	%	$	46,681		5.33		99.74		103.58		$	1,731
CMO's (Agency)		19.4	%		134,353		4.96		100.42		101.85			1,882
CMO's (Private)		0.0	%		104		3.36		100.00		99.83	��		-
MBS's (Agency)		63.3	%		438,249		5.10		100.66		102.37			7,292
Subtotal		89.4	%		619,387		5.09		100.54		102.34		$	10,905
Municipal		6.0	%	$	41,638		7.19		99.32		100.14		$	344
Other *		4.6	%		31,673		5.01		100.86		100.32			(169	)
Subtotal		10.6	%	$	73,311		6.25		99.98		100.22		$	175
Total Investment Portfolio		100.0	%	$	692,698		5.21		100.48		102.12		$	11,080

Net Unrealized Gain/(Loss)	$	11,080
Aggregate Gains	$	11,250
Aggregate Losses	$	(170	)
Net Unrealized Gain/(Loss) % of Book Value		1.60	%

* Other includes $28.0 million of regulatory stock

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.” The company applied the fair value option to its equity securities of government sponsored entities (“GSE”), specifically 200,000 FHLMC perpetual preferred series V shares; and these shares are classified as trading assets. For the full-year of 2008, the company recorded a $3.7 million pre-tax loss related to its investment in these securities, with $3.4 million recorded in the third quarter of 2008. This loss was a result of the decline in market value of the shares following the September 7, 2008 announcement by the U.S. Treasury, the Federal Reserve, and the Federal Housing Finance Agency (FHFA), that the FHFA was placing FHLMC under conservatorship and would eliminate the dividends on its common and preferred stock. The fair value accounting treatment discussed above requires First Financial to recognize in its income statement both the market value increases and decreases in future periods. 

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DEPOSITS

Full-Year 2008 versus Full-Year 2007

§ Average total deposits declined $31.5 million, or 1.1%.

§ Average transaction and savings deposits increased $17.2 million, or 1.1%

§ Average time deposits declined $48.7 million or, 4.0%

Fourth Quarter 2008 versus Fourth Quarter 2007

§ Average total deposits declined $81.0 million, or 2.8%.

§ Average transaction and savings deposits increased $17.8 million, or 1.1%

§ Average time deposits declined $98.8 million, or 7.9%

Fourth Quarter 2008 versus Third Quarter 2008

§ Average total deposits declined $2.9 million, or 0.1% on an annualized basis.

§ Average transaction and savings deposits increased $3.8 million, or 0.2% on an annualized basis.

§ Average time deposits declined $6.7 million, or 0.6% on an annualized basis.

Average total deposits declined on a linked-quarter and year-over-year basis. Contributing to these declines was a decrease in average total interest-bearing deposits primarily due to the planned runoff of time deposits. Average transaction and savings deposits increased on a linked-quarter and year-over-year basis primarily due to growth in both business and public fund balances. During 2008, the company initiated a deposit pricing strategy aimed at maximizing the net interest margin in a very competitive deposit gathering landscape. The strategy has been successful as outflows of time deposits have been replaced with less expensive wholesale funding that was used to help fund asset generation.

Toward the end of the third quarter of 2008, First Financial instituted pricing initiatives designed to grow and retain retail deposits as well as to manage its overall asset/liability position. The company also extended the terms of CD offerings with maturities of one year and beyond to secure long-term funding at attractive rates, and continues to evaluate its key customer and market demographics to develop a combination of strategies to help increase core deposits.

Conference Call & Webcast

As previously announced, a conference call and webcast to discuss First Financial’s fourth quarter and full-year 2008 financial and operational results will be held on Thursday, January 29, 2009, at 9:00 a.m. ET, with Claude E. Davis, President and Chief Executive Officer, and J. Franklin Hall, Executive Vice President and Chief Financial Officer. To access the conference call, dial 800-860-2442 (passcode not required). The webcast will be available at the Investor Relations section of First Financial’s website (www.bankatfirst.com). Participants should join the live conference call and webcast 5 to 10 minutes before its scheduled start. A replay of the call and webcast will be available approximately one hour after the live call has ended. To access the replay, dial 877-344-7529 (passcode 427 052).

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Forward-Looking Statements

This news release should be read in conjunction with the consolidated financial statements, notes and tables in First Financial Bancorp’s most recent Form 10-Q filing dated September 30, 2008, and its 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 ability of financial institutions to access sources of liquidity at a reasonable cost; the effects of and changes in policies and laws of regulatory agencies, inflation, and interest rates; technology changes; mergers and acquisitions; the effect of changes in accounting policies and practices; adverse changes in the securities markets; the cost and effects of litigation and of unexpected or adverse outcomes in such litigation; and First Financial’s success at managing the risks involved in the foregoing. 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 Securities and Exchange Commission (SEC). These documents are available at no cost within the investor relations section of First Financial’s website at www.bankatfirst.com and on the SEC's website at www.sec.gov. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 31, 2008, which will be filed with the SEC no later than March 16, 2009.

About First Financial Bancorp

First Financial Bancorp is a Cincinnati, Ohio based bank holding company with $3.7 billion in assets. Its banking subsidiary, First Financial Bank, N.A., founded in 1863, provides retail and commercial banking products and services, and investment and insurance products through its 81 retail banking locations in Ohio, Kentucky and Indiana. The bank’s wealth management division, First Financial Wealth Resource Group, provides investment management, traditional trust, brokerage, private banking, and insurance services, and has approximately $1.7 billion in assets under management. Additional information about the company, including its products, services, and banking locations, is available at www.bankatfirst.com.

Additional Information

Investors/Analysts	Media
Patti Forsythe	Cheryl Lipp
Vice President, Investor Relations	First Vice President, Marketing Director
513-979-5837	513-979-5797
patti.forsythe@bankatfirst.com	cheryl.lipp@bankatfirst.com

- 11 - -

FIRST FINANCIAL BANCORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share)

(Unaudited)

	Three months ended,															Twelve months ended
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,
	2008			2008			2008			2008			2007			2008			2007
RESULTS OF OPERATIONS
Net interest income	$	30,129		$	29,410		$	28,414		$	28,249		$	29,079		$	116,202		$	118,500
Net income	$	2,084		$	5,732		$	7,808		$	7,338		$	10,701		$	22,962		$	35,681
Net earnings per common share - basic	$	0.06		$	0.15		$	0.21		$	0.20		$	0.29		$	0.62		$	0.93
Net earnings per common share - diluted	$	0.06		$	0.15		$	0.21		$	0.20		$	0.29		$	0.61		$	0.93
Dividends declared per common share	$	0.17		$	0.17		$	0.17		$	0.17		$	0.17		$	0.68		$	0.65
KEY FINANCIAL RATIOS
Return on average assets		0.23	%		0.66	%		0.93	%		0.89	%		1.27	%		0.67	%		1.08	%
Return on average shareholders' equity		2.89	%		8.24	%		11.26	%		10.66	%		15.37	%		8.21	%		12.73	%
Return on average tangible shareholders' equity		3.22	%		9.21	%		12.57	%		11.91	%		17.17	%		9.17	%		14.20	%
Net interest margin		3.67	%		3.68	%		3.72	%		3.78	%		3.79	%		3.71	%		3.94	%
Net interest margin (fully tax equivalent) (1)		3.71	%		3.73	%		3.78	%		3.85	%		3.86	%		3.77	%		4.01	%
Average shareholders' equity to average assets		8.04	%		7.96	%		8.29	%		8.39	%		8.27	%		8.16	%		8.47	%
Average common shareholders' equity to average assets		7.82	%		7.96	%		8.29	%		8.39	%		8.27	%		8.11	%		8.47	%
Tier 1 Ratio (2)		12.38	%		9.80	%		9.99	%		10.20	%		10.29	%		12.38	%		10.29	%
Total Capital Ratio (2)		13.62	%		10.89	%		11.06	%		11.31	%		11.38	%		13.62	%		11.38	%
Leverage Ratio (2)		10.00	%		7.95	%		8.21	%		8.32	%		8.26	%		10.00	%		8.33	%
AVERAGE BALANCE SHEET ITEMS
Loans (3)	$	2,690,895		$	2,709,629		$	2,648,327		$	2,596,483		$	2,588,985		$	2,661,546		$	2,546,898
Investment securities		574,893			467,524			422,463			343,553			350,346			452,921			357,803
Other earning assets		1,737			3,137			4,095			65,799			106,922			18,603			104,165
Total earning assets	$	3,267,525		$	3,180,290		$	3,074,885		$	3,005,835		$	3,046,253		$	3,133,070		$	3,008,866
Total assets	$	3,566,051		$	3,476,648		$	3,361,649		$	3,298,663		$	3,338,828		$	3,426,275		$	3,310,040
Noninterest-bearing deposits	$	412,644		$	402,604		$	394,352		$	379,240		$	399,304		$	397,267		$	397,918
Interest-bearing deposits		2,367,121			2,380,037			2,400,940			2,453,028			2,461,464			2,400,136			2,430,986
Total deposits	$	2,779,765		$	2,782,641		$	2,795,292		$	2,832,268		$	2,860,768		$	2,797,403		$	2,828,904
Borrowings	$	474,655		$	394,708		$	256,409		$	157,899		$	177,876		$	321,539		$	178,357
Shareholders' equity	$	286,582		$	276,594		$	278,803		$	276,815		$	276,269		$	279,709		$	280,275
CREDIT QUALITY RATIOS
Allowance to ending loans		1.34	%		1.14	%		1.11	%		1.14	%		1.12	%		1.34	%		1.12	%
Allowance to nonaccrual loans		199.51	%		219.47	%		199.70	%		202.29	%		205.89	%		199.51	%		205.89	%
Allowance to nonperforming loans		197.27	%		216.22	%		192.50	%		194.83	%		197.94	%		197.27	%		197.94	%
Nonperforming loans to total loans		0.68	%		0.53	%		0.57	%		0.58	%		0.56	%		0.68	%		0.56	%
Nonperforming assets to ending loans, plus OREO		0.83	%		0.70	%		0.71	%		0.67	%		0.67	%		0.83	%		0.67	%
Nonperforming assets to total assets		0.60	%		0.53	%		0.55	%		0.53	%		0.51	%		0.60	%		0.51	%
Net charge-offs to average loans (annualized)		0.73	%		0.36	%		0.40	%		0.40	%		0.26	%		0.47	%		0.24	%

(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) December 31, 2008 regulatory capital ratios are preliminary.

(3) Includes loans held for sale.

-12-

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands)

(Unaudited)

	Three months ended,									Twelve months ended,
	Dec. 31,									Dec. 31,
	2008			2007			% Change			2008			2007			% Change
Interest income
Loans, including fees	$	37,864		$	45,709			(17.2	)%	$	159,985		$	182,670			(12.4	)%
Investment securities
Taxable		6,697			3,641			83.9	%		19,954			14,961			33.4	%
Tax-exempt		519			859			(39.6	)%		2,733			3,542			(22.8	)%
Total investment securities interest		7,216			4,500			60.4	%		22,687			18,503			22.6	%
Federal funds sold		6			1,224			(99.5	)%		633			5,269			(88.0	)%
Total interest income		45,086			51,433			(12.3	)%		183,305			206,442			(11.2	)%
Interest expense
Deposits		12,015			20,238			(40.6	)%		57,997			79,184			(26.8	)%
Short-term borrowings		1,186			1,211			(2.1	)%		4,828			4,232			14.1	%
Long-term borrowings		1,395			466			199.4	%		2,892			2,099			37.8	%
Subordinated debentures and capital securities		361			439			(17.8	)%		1,386			2,427			(42.9	)%
Total interest expense		14,957			22,354			(33.1	)%		67,103			87,942			(23.7	)%
Net interest income		30,129			29,079			3.6	%		116,202			118,500			(1.9	)%
Provision for loan and lease losses		10,475			1,640			538.7	%		19,410			7,652			153.7	%
Net interest income after provision for loan and lease losses		19,654			27,439			(28.4	)%		96,792			110,848			(12.7	)%
Noninterest income
Service charges on deposit accounts		4,752			5,330			(10.8	)%		19,658			20,766			(5.3	)%
Trust and wealth management fees		3,745			4,989			(24.9	)%		17,411			18,396			(5.4	)%
Bankcard income		1,457			1,165			25.1	%		5,653			5,251			7.7	%
Net gains from sales of loans		321			295			8.8	%		1,104			844			30.8	%
Gain on sale of merchant payment processing portfolio		0			5,501			(100.0	)%		0			5,501			(100.0	)%
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			367			331.9	%
(Loss) income on preferred securities		(137	)		0			N/M			(3,738	)		0			N/M
Other		2,510			2,982			(15.8	)%		10,076			11,402			(11.6	)%
Total noninterest income		12,648			20,262			(37.6	)%		51,749			63,588			(18.6	)%
Noninterest expenses
Salaries and employee benefits		17,015			16,508			3.1	%		66,862			69,891			(4.3	)%
Pension settlement charges		0			2,222			(100.0	)%		0			2,222			(100.0	)%
Net occupancy		2,635			2,842			(7.3	)%		10,635			10,861			(2.1	)%
Furniture and equipment		1,748			1,742			0.3	%		6,708			6,761			(0.8	)%
Data processing		840			825			1.8	%		3,238			3,498			(7.4	)%
Marketing		935			523			78.8	%		2,548			2,441			4.4	%
Communication		704			903			(22.0	)%		2,859			3,230			(11.5	)%
Professional services		912			1,109			(17.8	)%		3,463			4,142			(16.4	)%
Other		5,058			4,698			7.7	%		18,863			17,701			6.6	%
Total noninterest expenses		29,847			31,372			(4.9	)%		115,176			120,747			(4.6	)%
Income before income taxes		2,455			16,329			(85.0	)%		33,365			53,689			(37.9	)%
Income tax expense		371			5,628			(93.4	)%		10,403			18,008			(42.2	)%
Net income	$	2,084		$	10,701			(80.5	)%	$	22,962		$	35,681			(35.6	)%
ADDITIONAL DATA
Net earnings per common share - basic	$	0.06		$	0.29					$	0.62		$	0.93
Net earnings per common share - diluted	$	0.06		$	0.29					$	0.61		$	0.93
Dividends declared per common share	$	0.17		$	0.17					$	0.68		$	0.65
Book value per common share	$	7.16		$	7.40					$	7.16		$	7.40
Return on average assets		0.23	%		1.27	%					0.67	%		1.08	%
Return on average shareholders' equity		2.89	%		15.37	%					8.21	%		12.73	%
Interest income	$	45,086		$	51,433			(12.3	)%	$	183,305		$	206,442			(11.2	)%
Tax equivalent adjustment		360			561			(35.8	)%		1,808			2,281			(20.7	)%
Interest income - tax equivalent		45,446			51,994			(12.6	)%		185,113			208,723			(11.3	)%
Interest expense		14,957			22,354			(33.1	)%		67,103			87,942			(23.7	)%
Net interest income - tax equivalent	$	30,489		$	29,640			2.9	%	$	118,010		$	120,781			(2.3	)%
Net interest margin		3.67	%		3.79	%					3.71	%		3.94	%
Net interest margin (fully tax equivalent) (1)		3.71	%		3.86	%					3.77	%		4.01	%
Full-time equivalent employees		1,061			1,057						1,061			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.

-13-

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands)

(Unaudited)

	2008
	Fourth			Third			Second			First						% Change
	Quarter			Quarter			Quarter			Quarter			Full Year			Linked Qtr.
Interest income
Loans, including fees	$	37,864		$	39,754		$	39,646		$	42,721		$	159,985			(4.8	)%
Investment securities
Taxable		6,697			5,349			4,387			3,521			19,954			25.2	%
Tax-exempt		519			631			792			791			2,733			(17.7	)%
Total investment securities interest		7,216			5,980			5,179			4,312			22,687			20.7	%
Federal funds sold		6			22			40			565			633			(72.7	)%
Total interest income		45,086			45,756			44,865			47,598			183,305			(1.5	)%
Interest expense
Deposits		12,015			13,608			14,635			17,739			57,997			(11.7	)%
Short-term borrowings		1,186			1,720			1,130			792			4,828			(31.0	)%
Long-term borrowings		1,395			707			384			406			2,892			97.3	%
Subordinated debentures and capital securities		361			311			302			412			1,386			16.1	%
Total interest expense		14,957			16,346			16,451			19,349			67,103			(8.5	)%
Net interest income		30,129			29,410			28,414			28,249			116,202			2.4	%
Provision for loan and lease losses		10,475			3,219			2,493			3,223			19,410			225.4	%
Net interest income after provision for loan and lease losses		19,654			26,191			25,921			25,026			96,792			(25.0	)%
Noninterest income
Service charges on deposit accounts		4,752			5,348			4,951			4,607			19,658			(11.1	)%
Trust and wealth management fees		3,745			4,390			4,654			4,622			17,411			(14.7	)%
Bankcard income		1,457			1,405			1,493			1,298			5,653			3.7	%
Net gains from sales of loans		321			376			188			219			1,104			(14.6	)%
Gains on sales of investment securities		0			0			0			1,585			1,585			N/M
(Loss) income on preferred securities		(137	)		(3,400	)		(221	)		20			(3,738	)		(96.0	)%
Other		2,510			2,359			2,683			2,524			10,076			6.4	%
Total noninterest income		12,648			10,478			13,748			14,875			51,749			20.7	%
Noninterest expenses
Salaries and employee benefits		17,015			16,879			15,895			17,073			66,862			0.8	%
Net occupancy		2,635			2,538			2,510			2,952			10,635			3.8	%
Furniture and equipment		1,748			1,690			1,617			1,653			6,708			3.4	%
Data processing		840			791			814			793			3,238			6.2	%
Marketing		935			622			474			517			2,548			50.3	%
Communication		704			601			749			805			2,859			17.1	%
Professional services		912			729			1,061			761			3,463			25.1	%
Other		5,058			4,490			4,849			4,466			18,863			12.7	%
Total noninterest expenses		29,847			28,340			27,969			29,020			115,176			5.3	%
Income before income taxes		2,455			8,329			11,700			10,881			33,365			(70.5	)%
Income tax expense		371			2,597			3,892			3,543			10,403			(85.7	)%
Net income	$	2,084		$	5,732		$	7,808		$	7,338		$	22,962			(63.6	)%
ADDITIONAL DATA
Net earnings per common share - basic	$	0.06		$	0.15		$	0.21		$	0.20		$	0.62
Net earnings per common share - diluted	$	0.06		$	0.15		$	0.21		$	0.20		$	0.61
Dividends declared per common share	$	0.17		$	0.17		$	0.17		$	0.17		$	0.68
Book value per common share	$	7.16		$	7.40		$	7.34		$	7.41		$	7.16
Return on average assets		0.23	%		0.66	%		0.93	%		0.89	%		0.67	%
Return on average shareholders' equity		2.89	%		8.24	%		11.26	%		10.66	%		8.21	%
Interest income	$	45,086		$	45,756		$	44,865		$	47,598		$	183,305			(1.5	)%
Tax equivalent adjustment		360			424			510			514			1,808			(15.1	)%
Interest income - tax equivalent		45,446			46,180			45,375			48,112			185,113			(1.6	)%
Interest expense		14,957			16,346			16,451			19,349			67,103			(8.5	)%
Net interest income - tax equivalent	$	30,489		$	29,834		$	28,924		$	28,763		$	118,010			2.2	%
Net interest margin		3.67	%		3.68	%		3.72	%		3.78	%		3.71	%
Net interest margin (fully tax equivalent) (1)		3.71	%		3.73	%		3.78	%		3.85	%		3.77	%
Full-time equivalent employees		1,061			1,052			1,058			1,056			1,061

(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.

-14-

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS 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.

-15-

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			% Change			% Change
	2008			2008			2008			2008			2007			Linked Qtr.			Comparable Qtr.
ASSETS
Cash and due from banks	$	100,935		$	90,341		$	106,248		$	102,246		$	106,224			11.7	%		(5.0	)%
Federal funds sold		0			0			4,005			2,943			106,990			N/M			(100.0	)%
Investment securities trading		61			198			3,598			3,820			0			(69.2	)%		N/M
Investment securities available-for-sale		659,756			492,554			421,697			345,145			306,928			33.9	%		115.0	%
Investment securities held-to-maturity		4,966			5,037			5,316			5,414			5,639			(1.4	)%		(11.9	)%
Other investments		27,976			34,976			34,632			34,293			33,969			(20.0	)%		(17.6	)%
Loans held for sale		3,854			2,437			2,228			4,108			1,515			58.1	%		154.4	%
Loans
Commercial		807,720			819,430			814,779			789,922			785,143			(1.4	)%		2.9	%
Real estate - construction		232,989			203,809			186,178			172,737			151,432			14.3	%		53.9	%
Real estate - commercial		846,673			814,578			769,555			726,397			706,409			3.9	%		19.9	%
Real estate - residential		383,599			424,902			499,002			519,790			539,332			(9.7	)%		(28.9	)%
Installment		98,581			106,456			115,575			126,623			138,895			(7.4	)%		(29.0	)%
Home equity		286,110			276,943			263,063			254,200			250,888			3.3	%		14.0	%
Credit card		27,538			27,047			26,399			25,528			26,610			1.8	%		3.5	%
Lease financing		50			92			111			258			378			(45.7	)%		(86.8	)%
Total loans		2,683,260			2,673,257			2,674,662			2,615,455			2,599,087			0.4	%		3.2	%
Less
Allowance for loan and lease losses		35,873			30,353			29,580			29,718			29,057			18.2	%		23.5	%
Net loans		2,647,387			2,642,904			2,645,082			2,585,737			2,570,030			0.2	%		3.0	%
Premises and equipment		84,105			81,989			79,380			78,585			78,994			2.6	%		6.5	%
Goodwill		28,261			28,261			28,261			28,261			28,261			0.0	%		0.0	%
Other intangibles		1,002			872			641			659			698			14.9	%		43.6	%
Accrued interest and other assets		140,839			132,107			128,874			132,054			130,068			6.6	%		8.3	%
Total Assets	$	3,699,142		$	3,511,676		$	3,459,962		$	3,323,265		$	3,369,316			5.3	%		9.8	%
LIABILITIES
Deposits
Interest-bearing	$	636,945		$	580,417		$	575,236		$	610,154		$	603,870			9.7	%		5.5	%
Savings		583,081			608,438			615,613			617,059			596,636			(4.2	)%		(2.3	)%
Time		1,150,208			1,118,511			1,167,024			1,206,750			1,227,954			2.8	%		(6.3	)%
Total interest-bearing deposits		2,370,234			2,307,366			2,357,873			2,433,963			2,428,460			2.7	%		(2.4	)%
Noninterest-bearing		413,283			404,315			419,045			405,015			465,731			2.2	%		(11.3	)%
Total deposits		2,783,517			2,711,681			2,776,918			2,838,978			2,894,191			2.6	%		(3.8	)%
Short-term borrowings
Federal funds purchased and securities sold
under agreements to repurchase		147,533			45,495			25,932			27,320			26,289			224.3	%		461.2	%
Federal Home Loan Bank		150,000			215,000			237,900			6,500			0			(30.2	)%		N/M
Other		57,000			53,000			54,000			53,000			72,000			7.5	%		(20.8	)%
Total short-term borrowings		354,533			313,495			317,832			86,820			98,289			13.1	%		260.7	%
Long-term debt		148,164			152,568			41,263			42,380			45,896			(2.9	)%		222.8	%
Other long-term debt		20,620			20,620			20,620			20,620			20,620			0.0	%		0.0	%
Accrued interest and other liabilities		43,981			36,092			28,039			56,698			33,737			21.9	%		30.4	%
Total Liabilities		3,350,815			3,234,456			3,184,672			3,045,496			3,092,733			3.6	%		8.3	%
SHAREHOLDERS' EQUITY
Preferred stock		80,000			0			0			0			0			N/M			N/M
Common stock		392,188			391,249			390,545			389,986			391,962			0.2	%		0.1	%
Retained earnings		76,339			80,632			81,263			79,818			82,093			(5.3	)%		(7.0	)%
Accumulated other comprehensive loss		(11,905	)		(6,285	)		(8,236	)		(3,800	)		(7,127	)		89.4	%		67.0	%
Treasury stock, at cost		(188,295	)		(188,376	)		(188,282	)		(188,235	)		(190,345	)		(0.0	)%		(1.1	)%
Total Shareholders' Equity		348,327			277,220			275,290			277,769			276,583			25.7	%		25.9	%
Total Liabilities and Shareholders' Equity	$	3,699,142		$	3,511,676		$	3,459,962		$	3,323,265		$	3,369,316			5.3	%		9.8	%

N/M = Not meaningful.

-16-

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

							Quarterly Averages									Year-to-Date Averages
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,
	2008			2008			2008			2008			2007			2008			2007
ASSETS
Cash and due from banks	$	87,307		$	89,498		$	81,329		$	86,879		$	84,771		$	86,265		$	89,780
Federal funds sold		1,737			3,137			4,095			65,799			106,922			18,603			104,165
Investment securities		574,893			467,524			422,463			345,303			350,346			452,921			357,803
Loans held for sale		1,876			2,080			3,034			3,122			3,689			2,525			3,211
Loans
Commercial		809,869			819,199			805,122			781,358			776,286			803,945			739,238
Real estate - construction		220,839			192,731			179,078			162,008			154,208			188,763			128,208
Real estate - commercial		830,121			797,143			747,077			708,779			693,038			771,014			669,370
Real estate - residential		417,499			490,089			508,837			530,567			542,204			486,568			579,391
Installment		102,814			110,933			121,000			132,876			145,787			116,851			165,206
Home equity		280,900			270,659			257,954			251,706			248,071			265,362			237,246
Credit card		26,902			26,692			26,043			25,745			25,271			26,348			24,407
Lease financing		75			103			182			322			431			170			621
Total loans		2,689,019			2,707,549			2,645,293			2,593,361			2,585,296			2,659,021			2,543,687
Less
Allowance for loan and lease losses		29,710			29,739			29,248			28,860			29,503			29,391			28,263
Net loans		2,659,309			2,677,810			2,616,045			2,564,501			2,555,793			2,629,630			2,515,424
Premises and equipment		83,307			81,000			78,933			78,969			78,992			80,561			79,348
Goodwill		28,261			28,261			28,261			28,261			28,261			28,261			28,261
Other intangibles		613			639			652			680			749			646			2,040
Accrued interest and other assets		128,748			126,699			126,837			125,149			129,305			126,863			130,008
Total Assets	$	3,566,051		$	3,476,648		$	3,361,649		$	3,298,663		$	3,338,828		$	3,426,275		$	3,310,040
LIABILITIES
Deposits
Interest-bearing	$	611,129		$	609,992		$	590,464		$	623,206		$	607,009		$	608,708		$	623,110
Savings		604,370			611,713			617,029			610,449			604,063			610,875			578,579
Time		1,151,622			1,158,332			1,193,447			1,219,373			1,250,392			1,180,553			1,229,297
Total interest-bearing deposits		2,367,121			2,380,037			2,400,940			2,453,028			2,461,464			2,400,136			2,430,986
Noninterest-bearing		412,644			402,604			394,352			379,240			399,304			397,267			397,918
Total deposits		2,779,765			2,782,641			2,795,292			2,832,268			2,860,768			2,797,403			2,828,904
Short-term borrowings
Federal funds purchased and securities sold under agreements to repurchase		98,690			36,476			25,771			26,261			28,952			46,913			34,691
Federal Home Loan Bank		150,867			206,741			114,654			614			0			118,550			0
Other		53,044			53,836			53,758			66,154			77,772			56,680			58,018
Total short-term borrowings		302,601			297,053			194,183			93,029			106,724			222,143			92,709
Long-term debt		151,434			77,035			41,606			44,250			50,532			78,776			57,458
Other long-term debt		20,620			20,620			20,620			20,620			20,620			20,620			28,190
Total borrowed funds		474,655			394,708			256,409			157,899			177,876			321,539			178,357
Accrued interest and other liabilities		25,049			22,705			31,145			31,681			23,915			27,624			22,504
Total Liabilities		3,279,469			3,200,054			3,082,846			3,021,848			3,062,559			3,146,566			3,029,765
SHAREHOLDERS' EQUITY
Preferred stock		7,825			0			0			0			0			1,967			0
Common stock		391,581			390,861			390,237			391,079			391,606			390,941			391,731
Retained earnings		81,932			82,636			81,045			79,951			81,615			81,396			76,918
Accumulated other comprehensive loss		(6,462	)		(8,594	)		(4,211	)		(4,977	)		(6,670	)		(6,069	)		(12,296	)
Treasury stock, at cost		(188,294	)		(188,309	)		(188,268	)		(189,238	)		(190,282	)		(188,526	)		(176,078	)
Total Shareholders' Equity		286,582			276,594			278,803			276,815			276,269			279,709			280,275
Total Liabilities and Shareholders' Equity	$	3,566,051		$	3,476,648		$	3,361,649		$	3,298,663		$	3,338,828		$	3,426,275		$	3,310,040

-17-

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE / VOLUME ANALYSIS (1)

(Dollars in thousands)

(Unaudited)

	Quarterly Averages																		Year-to-Date Averages
	Dec. 31, 2008						Sep. 30, 2008						Dec. 31, 2007						Dec. 31, 2008						Dec. 31, 2007
	Balance			Yield			Balance			Yield			Balance			Yield			Balance			Yield			Balance			Yield
Earning assets
Investment securities	$	574,893			4.99	%	$	467,524			5.09	%	$	350,346			5.10	%	$	452,921			5.01	%	$	357,803			5.17	%
Interest-bearing deposits with other banks Federal funds sold		1,737			1.37	%		3,137			2.79	%		106,922			4.54	%		18,603			3.40	%		104,165			5.06	%
Gross loans (2)		2,690,895			5.60	%		2,709,629			5.84	%		2,588,985			7.00	%		2,661,546			6.01	%		2,546,898			7.17	%
Total earning assets		3,267,525			5.49	%		3,180,290			5.72	%		3,046,253			6.70	%		3,133,070			5.85	%		3,008,866			6.86	%
Nonearning assets
Allowance for loan and lease losses		(29,710	)					(29,739	)					(29,503	)					(29,391	)					(28,263	)
Cash and due from banks		87,307						89,498						84,771						86,265						89,780
Accrued interest and other assets		240,929						236,599						237,307						236,331						239,657
Total assets	$	3,566,051					$	3,476,648					$	3,338,828					$	3,426,275					$	3,310,040
Interest-bearing liabilities
Total interest-bearing deposits	$	2,367,121			2.02	%	$	2,380,037			2.27	%	$	2,461,464			3.26	%	$	2,400,136			2.42	%	$	2,430,986			3.26	%
Borrowed funds
Short-term borrowings		302,601			1.56	%		297,053			2.30	%		106,724			4.50	%		222,143			2.17	%		92,709			4.56	%
Long-term debt		151,434			3.66	%		77,035			3.65	%		50,532			3.66	%		78,776			3.67	%		57,458			3.65	%
Other long-term debt		20,620			6.96	%		20,620			6.00	%		20,620			8.45	%		20,620			6.72	%		28,190			8.61	%
Total borrowed funds		474,655			2.47	%		394,708			2.76	%		177,876			4.72	%		321,539			2.83	%		178,357			4.91	%
Total interest-bearing liabilities		2,841,776			2.09	%		2,774,745			2.34	%		2,639,340			3.36	%		2,721,675			2.47	%		2,609,343			3.37	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits		412,644						402,604						399,304						397,267						397,918
Other liabilities		25,049						22,705						23,915						27,624						22,504
Shareholders' equity		286,582						276,594						276,269						279,709						280,275
Total liabilities & shareholders' equity	$	3,566,051					$	3,476,648					$	3,338,828					$	3,426,275					$	3,310,040
Net interest income (1)	$	30,129					$	29,410					$	29,079					$	116,202					$	118,500
Net interest spread (1)					3.40	%					3.38	%					3.34	%					3.39	%					3.49	%
Net interest margin (1)					3.67	%					3.68	%					3.79	%					3.71	%					3.94	%

(1) Not tax equivalent.

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

-18-

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	$	(112	)	$	1,348		$	1,236		$	(102	)	$	2,818		$	2,716			(580	)	$	4,764		$	4,184
Federal funds sold		(11	)		(5	)		(16	)		(855	)		(363	)		(1,218	)		(1,725	)		(2,911	)		(4,636	)
Gross loans (2)		(1,626	)		(264	)		(1,890	)		(9,279	)		1,434			(7,845	)		(29,576	)		6,891			(22,685	)
Total earning assets		(1,749	)		1,079			(670	)		(10,236	)		3,889			(6,347	)		(31,881	)		8,744			(23,137	)
Interest-bearing liabilities
Total interest-bearing deposits	$	(1,527	)	$	(66	)	$	(1,593	)	$	(7,744	)	$	(479	)	$	(8,223	)	$	(20,442	)	$	(745	)	$	(21,187	)
Borrowed funds
Short-term borrowings		(556	)		22			(534	)		(793	)		768			(25	)		(2,217	)		2,813			596
Long-term debt		3			685			688			(1	)		930			929			10			783			793
Other long-term debt		50			-			50			(78	)		-			(78	)		(532	)		(509	)		(1,041	)
Total borrowed funds		(503	)		707			204			(872	)		1,698			826			(2,739	)		3,087			348
Total interest-bearing liabilities		(2,030	)		641			(1,389	)		(8,616	)		1,219			(7,397	)		(23,181	)		2,342			(20,839	)
Net interest income (1)	$	281		$	438		$	719		$	(1,620	)	$	2,670		$	1,050		$	(8,700	)	$	6,402		$	(2,298	)
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.

-19-

FIRST FINANCIAL BANCORP.

CREDIT QUALITY

(Dollars in thousands)

(Unaudited)

	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Full Year			Full Year
	2008			2008			2008			2008			2007			2008			2007
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY
Balance at beginning of period	$	30,353		$	29,580		$	29,718		$	29,057		$	29,136			29,057		$	27,386
Provision for loan and lease losses		10,475			3,219			2,493			3,223			1,640			19,410			7,652
Gross charge-offs
Commercial		2,168			1,568			946			545			1,433			5,227			4,107
Real estate - construction		0			0			0			0			0			0			0
Real estate - commercial		2,083			48			589			806			465			3,526			863
Real estate - residential		47			335			227			39			33			648			255
Installment		493			424			482			564			522			1,963			2,338
Home equity		238			135			525			651			285			1,549			762
All other		374			426			426			498			304			1,724			1,097
Total gross charge-offs		5,403			2,936			3,195			3,103			3,042			14,637			9,422
Recoveries
Commercial		165			179			166			144			342			654			1,002
Real estate - construction		0			0			0			0			0			0			0
Real estate - commercial		40			37			19			3			632			99			862
Real estate - residential		5			4			5			11			3			25			56
Installment		189			225			246			315			242			975			1,139
Home equity		0			0			30			0			19			30			132
All other		49			45			98			68			85			260			250
Total recoveries		448			490			564			541			1,323			2,043			3,441
Total net charge-offs		4,955			2,446			2,631			2,562			1,719			12,594			5,981
Ending allowance for loan and lease losses	$	35,873		$	30,353		$	29,580		$	29,718		$	29,057			35,873		$	29,057
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial		0.98	%		0.67	%		0.39	%		0.21	%		0.56	%		0.57	%		0.42	%
Real estate - construction		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Real estate - commercial		0.98	%		0.01	%		0.31	%		0.46	%		(0.10	)%		0.44	%		0.00	%
Real estate - residential		0.04	%		0.27	%		0.18	%		0.02	%		0.02	%		0.13	%		0.03	%
Installment		1.18	%		0.71	%		0.78	%		0.75	%		0.76	%		0.85	%		0.73	%
Home equity		0.34	%		0.20	%		0.77	%		1.04	%		0.43	%		0.57	%		0.27	%
All other		4.79	%		5.66	%		5.03	%		6.63	%		3.39	%		5.52	%		3.39	%
Total net charge-offs		0.73	%		0.36	%		0.40	%		0.40	%		0.26	%		0.47	%		0.24	%
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans
Commercial	$	6,170		$	5,194		$	5,447		$	3,952		$	2,677		$	6,170		$	2,677
Real estate - commercial		4,779			3,361			3,592			4,415			5,965			4,779			5,965
Real estate - residential		5,363			3,742			4,461			4,529			3,063			5,363			3,063
Installment		459			417			438			544			734			459			734
Home equity		1,204			1,084			866			1,221			1,662			1,204			1,662
All other		6			32			8			30			12			6			12
Total nonaccrual loans		17,981			13,830			14,812			14,691			14,113			17,981			14,113
Restructured loans		204			208			554			562			567			204			567
Total nonperforming loans		18,185			14,038			15,366			15,253			14,680			18,185			14,680
Other real estate owned (OREO)		4,028			4,610			3,763			2,368			2,636			4,028			2,636
Total nonperforming assets		22,213			18,648			19,129			17,621			17,316			22,213			17,316
Accruing loans past due 90 days or more		138			241			245			372			313			138			313
Total underperforming assets	$	22,351		$	18,889		$	19,374		$	17,993		$	17,629		$	22,351		$	17,629
Total classified assets	$	67,393		$	58,284		$	54,511		$	55,302		$	49,372		$	67,393		$	49,372
CREDIT QUALITY RATIOS
Allowance for loan and lease losses to
Nonaccrual loans		199.51	%		219.47	%		199.70	%		202.29	%		205.89	%		199.51	%		205.89	%
Nonperforming loans		197.27	%		216.22	%		192.50	%		194.83	%		197.94	%		197.27	%		197.94	%
Total ending loans		1.34	%		1.14	%		1.11	%		1.14	%		1.12	%		1.34	%		1.12	%
Nonperforming loans to total loans		0.68	%		0.53	%		0.57	%		0.58	%		0.56	%		0.68	%		0.56	%
Nonperforming assets to
Ending loans, plus OREO		0.83	%		0.70	%		0.71	%		0.67	%		0.67	%		0.83	%		0.67	%
Total assets		0.60	%		0.53	%		0.55	%		0.53	%		0.51	%		0.60	%		0.51	%

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FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands)

(Unaudited)

																Twelve months ended,
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2008			2008			2008			2008			2007			2008			2007
PER COMMON SHARE
Market Price
High	$	14.30		$	14.80		$	13.88		$	13.81		$	13.89		$	14.80		$	16.76
Low	$	10.81		$	8.10		$	9.20		$	10.19		$	10.12		$	8.10		$	10.12
Close	$	12.39		$	14.60		$	9.20		$	13.45		$	11.40		$	12.39		$	11.40
Average common shares outstanding - basic		37,133,725			37,132,864			37,114,451			37,066,754			37,370,618			37,112,065			38,455,084
Average common shares outstanding - diluted		37,567,032			37,504,231			37,524,789			37,431,918			37,370,650			37,484,198			38,459,138
Ending common shares outstanding		37,481,201			37,476,607			37,483,384			37,488,229			37,367,808			37,481,201			37,367,808
REGULATORY CAPITAL	Preliminary															Preliminary
Tier 1 Capital	$	356,307		$	274,513		$	274,372		$	272,614		$	274,046		$	356,307		$	274,046
Tier 1 Ratio		12.38	%		9.80	%		9.99	%		10.20	%		10.29	%		12.38	%		10.29	%
Total Capital	$	392,180		$	304,866		$	303,952		$	302,332		$	303,103		$	392,180		$	303,103
Total Capital Ratio		13.62	%		10.89	%		11.06	%		11.31	%		11.38	%		13.62	%		11.38	%
Total Capital in excess of minimum
requirement	$	161,896		$	80,806		$	84,147		$	88,553		$	90,062		$	161,896		$	90,062
Total Risk-Adjusted Assets	$	2,878,548		$	2,800,753		$	2,747,559		$	2,672,242		$	2,663,007		$	2,878,548		$	2,663,007
Leverage Ratio		10.00	%		7.95	%		8.21	%		8.32	%		8.26	%		10.00	%		8.33	%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending
assets		9.42	%		7.89	%		7.96	%		8.36	%		8.21	%		9.42	%		8.21	%
Ending common shareholders' equity
to ending assets		7.25	%		7.89	%		7.96	%		8.36	%		8.21	%		7.25	%		8.21	%
Ending tangible shareholders' equity
to ending tangible assets		8.70	%		7.13	%		7.18	%		7.55	%		7.41	%		8.70	%		7.41	%
Ending tangible common shareholders'
equity to ending tangible assets		6.52	%		7.13	%		7.18	%		7.55	%		7.41	%		6.52	%		7.41	%
Average shareholders' equity to
average assets		8.04	%		7.96	%		8.29	%		8.39	%		8.27	%		8.16	%		8.47	%
Average common shareholders' equity
to average assets		7.82	%		7.96	%		8.29	%		8.39	%		8.27	%		8.11	%		8.47	%
Average tangible shareholders' equity
to average tangible assets		7.28	%		7.18	%		7.50	%		7.58	%		7.47	%		7.37	%		7.66	%
Average tangible common shareholders'
equity to average tangible assets		7.05	%		7.18	%		7.50	%		7.58	%		7.47	%		7.31	%		7.66	%
REPURCHASE PROGRAM (1)
Shares repurchased		0			0			0			0			34,300			0			2,000,000
Average share repurchase price	$	0.00		$	0.00		$	0.00		$	0.00		$	13.52		$	0.00		$	13.65
Total cost of shares repurchased	$	0		$	0		$	0		$	0		$	464		$	0		$	27,297

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

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