PR Newswire | Jan 28, 2021 04:16PM EST

Results and Quarterly Dividend

01/28 15:15 CST

First Financial Bancorp Announces Fourth Quarter and Full Year 2020 Financial Results and Quarterly Dividend CINCINNATI, Jan. 28, 2021

CINCINNATI, Jan. 28, 2021 /PRNewswire/ --

* Earnings per diluted share of $0.49; $0.51 on an adjusted(1) basis * Return on average assets of 1.20%; 1.23% as adjusted(1) * Net interest margin FTE(1) of 3.49%; 13 basis point increase from linked quarter * Strong noninterest income driven by foreign exchange fees and mortgage production * Announces $0.23 per share Quarterly Dividend

First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and twelve months ended December 31, 2020.

For the three months ended December 31, 2020, the Company reported net income of $48.3 million, or $0.49 per diluted common share. These results compare to net income of $41.5 million, or $0.42 per diluted common share, for the third quarter of 2020 and $48.7 million, or $0.49 per diluted common share, for the fourth quarter of 2019. For the twelve months ended December 31, 2020, First Financial had earnings per diluted common share of $1.59 compared to $2.00 for the same period in 2019.

Return on average assets for the fourth quarter of 2020 was 1.20% while return on average tangible common equity was 15.50%. These compare to returns on average assets of 1.04% and 1.34%, and returns on average tangible common equity of 13.61% and 15.84%, in the third quarter of 2020 and the fourth quarter of 2019, respectively.

Fourth quarter 2020 highlights include:

* After adjustments(1) for certain nonrecurring and certain COVID-19 related items: * Net income of $0.51 per diluted common share * 1.23% return on average assets * 15.94% return on average tangible common equity

* Net interest margin of 3.49% on a fully tax-equivalent basis(1) * 13 basis point increase driven by loan fees, which includes PPP forgiveness, and lower deposit costs

* Noninterest income of $61.5 million, or $48.1 million as adjusted(1) * Adjustments(1) include $13.4 million in gain recognized on class B Visa shares * Record foreign exchange income of $12.3 million; 16.9% increase from linked quarter * Mortgage income remains strong, despite decline from record third quarter production

* Noninterest expenses of $114.8 million, or $94.6 million as adjusted(1) * Adjustments(1) include: * $7.3 million of debt extinguishment costs * $5.1 million write down of a tax credit investment * $5.0 million contribution to First Financial Foundation * $2.9 million of costs directly related to COVID-19 and other nonrecurring costs such as merger-related and branch consolidation costs

* Efficiency ratio of 63.8%; 56.8% as adjusted(1)

_________________________________________________________________________________________

^ Financial information in this release that is described as "adjusted" or that is presented on a fully tax equivalent basis is non-GAAP. For details on the^ calculation of these non-GAAP financial measures and a reconciliation to the(1) GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

* Non-PPP loan balances were flat during the quarter * Average transactional deposit balances grew $533.8 million compared to the linked quarter; 22.2% on an annualized basis * Total Allowance for Credit Losses of $188.2 million; Total quarterly provision for credit losses of $11.5 million * Loans and leases - ACL of $175.7 million, 1.77% of total loans; 1.89% of loans excluding PPP * Unfunded Commitments - ACL of $12.5 million * Fourth quarter provision expense driven by COVID-19 uncertainty, partially offset by improvements in economic forecast, resulting in expected peak ACL as a percentage of loans

* Strong capital ratios * Total capital of 15.55% * Tier 1 common equity of 11.82% * Tangible common equity of 8.47%; 8.83% excluding PPP loans * Tangible book value per share of $12.93; $0.37 increase compared to linked quarter

Additionally, First Financial's board of directors has authorized a quarterly dividend of $0.23 per common share for the next regularly scheduled dividend, payable on March 15, 2021 to shareholders of record as of March 1, 2021.

Archie Brown, President and Chief Executive Officer, remarked, "When considering a year in which we encountered a global pandemic, experienced widespread government mandated business shutdowns and stay-at-home orders, and a reduction in the Fed Funds rate of 150 basis points, I am very pleased with our response to these challenges and our overall management of the company. On an adjusted(1) basis, we earned $1.66 per diluted share, achieved a 1.05% return on average assets, strengthened Tier 1 Common Equity and Total Capital, significantly bolstered our allowance for credit losses from 0.63% of loans to 1.77%, and experienced low levels of charge-offs."

Mr. Brown continued, "Business conditions remained difficult in the fourth quarter; however, our core quarterly financial metrics were strong with adjusted(1) earnings per share of $0.51, adjusted(1) return on assets of 1.23%, and an adjusted(1) efficiency ratio of 56.8%. An increase in interest income, which includes PPP loan forgiveness fees, strong mortgage banking and record foreign exchange income drove our solid quarterly results. Our sub-60% efficiency ratio reflected our diligent expense management despite adapting to a remote working environment and continued investment in processes and technologies that position the Company for long-term success. Credit trends remain relatively stable; however, with COVID-19 cases in the Midwest remaining at peak levels, a slower than anticipated vaccine rollout and general economic uncertainty, we recorded $11.5 million of provision expense, resulting in an increase in our allowance for credit losses to 1.89% of total loans, excluding PPP. We believe the increase in our allowance has positioned us to absorb future losses anticipated by the pandemic or otherwise."

Mr. Brown concluded, "I am most pleased by the response of our associates and their commitment to our clients and communities. They demonstrated amazing flexibility and resilience in pivoting from normal business activities and processes to working remotely or with significant changes to their in-office routines. From the beginning of the pandemic, we prioritized keeping our associates safe and engaged, which enabled them to support our clients in one of the most stressful and uncertain periods in our history. Our associates were constant stewards, embodying our organizational belief that banking is an essential function in the lives of consumers, businesses and our communities and were focused on ensuring that we remained faithful to our mission. Notably, our corporate-wide effort in granting approximately 7,000 PPP loans totaling over $900 million in a matter of months was something to remember. I am very proud of the effort and commitment of our First Financial Team."

Full detail of the Company's fourth quarter and full year 2020 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast InformationFirst Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, January 29, 2021 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 (Canada toll free) or +1 (412) 380-2003 (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com. A replay of the conference call will be available beginning one hour after the completion of the live call at (877) 344-7529 (U.S. toll free), (855) 669-9658 (Canada toll free) and +1 (412) 317-0088 (International); conference number 10151308. The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

Press Release and Additional Information on WebsiteThis press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com.

Use of Non-GAAP Financial MeasuresThis earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company's results of operations or financial position. Where Non-GAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Forward-Looking StatementCertain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ''believes,'' ''anticipates,'' "likely," "expected," "estimated," ''intends'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements. Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:

* economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business; * future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses * the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; * Management's ability to effectively execute its business plans; * mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; * the possibility that any of the anticipated benefits of the Company's acquisitions will not be realized or will not be realized within the expected time period; * the effect of changes in accounting policies and practices; * changes in consumer spending, borrowing and saving and changes in unemployment; * changes in customers' performance and creditworthiness; * the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; * current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; * the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impact of a slowing U.S. economy and increased unemployment on the performance of our loan and lease portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products; * our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms; * financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services; * the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale; * the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses; * a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks; * the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and * our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2019, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov.

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, the Company does not assume any obligation to update any forward-looking statement.

About First Financial Bancorp.

First Financial Bancorp. is a Cincinnati, Ohio based bank holding company. As of December 31, 2020, the Company had $16.0 billion in assets, $9.9 billion in loans, $12.2 billion in deposits and $2.3 billion in shareholders' equity. The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.0 billion in assets under management as of December 31, 2020. The Company operated 143 full service banking centers as of December 31, 2020, primarily in Ohio, Indiana and Kentucky, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.

FIRST FINANCIAL BANCORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)

(Unaudited)



Three Months Ended, Twelve months ended,

Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, December 31,

2020 2020 2020 2020 2019 2020 2019

RESULTS OF OPERATIONS

Net income $48,312 $41,477 $37,393 $28,628 $48,677 $155,810 $198,075

Net earnings per share - basic $0.50 $0.43 $0.38 $0.29 $0.49 $1.60 $2.01

Net earnings per share - diluted $0.49 $0.42 $0.38 $0.29 $0.49 $1.59 $2.00

Dividends declared per share $0.23 $0.23 $0.23 $0.23 $0.23 $0.92 $0.90



KEY FINANCIAL RATIOS

Return on average assets 1.20 %1.04 %0.96 %0.79 %1.34 %1.00 %1.39 %

Return on average shareholders' equity 8.52 %7.40 %6.88 %5.21 %8.60 %7.02 %9.11 %

Return on average tangible shareholders' equity 15.50 %13.61 %12.90 %9.71 %15.84 %12.97 %16.32 %



Net interest margin 3.45 %3.32 %3.38 %3.71 %3.84 %3.46 %3.95 %

Net interest margin (fully tax equivalent) ^(1) 3.49 %3.36 %3.44 %3.77 %3.89 %3.51 %4.00 %



Ending shareholders' equity as a percent of ending assets 14.29 %14.11 %13.99 %14.47 %15.49 %14.29 %15.49 %

Ending tangible shareholders' equity as a percent of:

Ending tangible assets 8.47 %8.25 %8.09 %8.25 %9.07 %8.47 %9.07 %

Risk-weighted assets 11.29 %11.07 %10.89 %10.50 %11.09 %11.29 %11.09 %



Average shareholders' equity as a percent of average assets14.07 %14.08 %13.91 %15.21 %15.53 %14.30 %15.30 %

Average tangible shareholders' equity as a percent of

average tangible assets 8.26 %8.18 %7.94 %8.79 %9.07 %8.28 %9.16 %



Book value per share $23.28 $22.94 $22.66 $22.25 $22.82 $23.28 $22.82

Tangible book value per share $12.93 $12.56 $12.26 $11.82 $12.42 $12.93 $12.42



Common equity tier 1 ratio^ (2) 11.82 %11.63 %11.49 %11.27 %11.30 %11.82 %11.30 %

Tier 1 ratio ^(2) 12.20 %12.02 %11.87 %11.66 %11.69 %12.20 %11.69 %

Total capital ratio ^(2) 15.55 %15.37 %15.19 %13.54 %13.39 %15.55 %13.39 %

Leverage ratio ^(2) 9.55 %9.55 %8.98 %9.49 %9.58 %9.55 %9.58 %



AVERAGE BALANCE SHEET ITEMS

Loans ^(3) $10,127,881 $10,253,392 $10,002,379 $9,220,643 $9,149,222 $9,902,656 $8,948,535

Investment securities 3,403,839 3,162,832 3,164,243 3,115,723 3,102,867 3,212,051 3,288,875

Interest-bearing deposits with other banks 143,884 40,277 91,990 39,332 36,672 78,943 35,814

Total earning assets $13,675,604 $13,456,501 $13,258,612 $12,375,698 $12,288,761 $13,193,650 $12,273,224

Total assets $16,030,986 $15,842,010 $15,710,204 $14,524,422 $14,460,288 $15,529,144 $14,210,719

Noninterest-bearing deposits $3,720,417 $3,535,432 $3,335,866 $2,643,240 $2,638,908 $3,310,483 $2,524,011

Interest-bearing deposits 8,204,306 8,027,082 8,395,229 7,590,791 7,583,531 8,054,687 7,577,347

Total deposits $11,924,723 $11,562,514 $11,731,095 $10,234,031 $10,222,439 $11,365,170 $10,101,358

Borrowings $1,307,461 $1,519,748 $1,272,819 $1,735,767 $1,613,696 $1,458,701 $1,669,059

Shareholders' equity $2,256,062 $2,230,422 $2,185,865 $2,209,733 $2,245,107 $2,220,645 $2,174,679



CREDIT QUALITY RATIOS

Allowance to ending loans 1.77 %1.65 %1.56 %1.55 %0.63 %1.77 %0.63 %

Allowance to nonaccrual loans 217.55 %216.28 %233.74 %296.51 %119.69 %217.55 %119.69 %

Allowance to nonperforming loans 199.97 %196.69 %208.06 %203.42 %96.73 %199.97 %96.73 %

Nonperforming loans to total loans 0.89 %0.84 %0.75 %0.76 %0.65 %0.89 %0.65 %

Nonperforming assets to ending loans, plus OREO 0.90 %0.86 %0.77 %0.78 %0.67 %0.90 %0.67 %

Nonperforming assets to total assets 0.56 %0.55 %0.49 %0.48 %0.42 %0.56 %0.42 %

Classified assets to total assets 0.89 %0.84 %0.79 %0.83 %0.62 %0.89 %0.62 %

Net charge-offs to average loans (annualized) 0.26 %0.21 %0.12 %(0.04) %0.15 %0.14 %0.33 %

The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a(1) 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, 2020 regulatory capital ratios are preliminary.

(3) Includes loans held for sale.

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)



Three months ended, Twelve months ended,

December 31, December 31,

2020 2019 % Change2020 2019 % Change

Interest income

Loans and leases, including fees $106,733 $122,802 (13.1)%$431,657 $499,009 (13.5)%

Investment securities

Taxable 18,402 20,137 (8.6) %73,789 90,168 (18.2)%

Tax-exempt 4,839 4,545 6.5 %19,242 17,596 9.4 %

Total investment securities interest 23,241 24,682 (5.8) %93,031 107,764 (13.7)%

Other earning assets 55 167 (67.1)%275 805 (65.8)%

Total interest income 130,029 147,651 (11.9)%524,963 607,578 (13.6)%



Interest expense

Deposits 5,920 19,026 (68.9)%41,922 79,032 (47.0)%

Short-term borrowings 30 5,430 (99.4)%6,442 25,235 (74.5)%

Long-term borrowings 5,606 4,293 30.6 %20,088 19,057 5.4 %

Total interest expense 11,556 28,749 (59.8)%68,452 123,324 (44.5)%

Net interest income 118,473 118,902 (0.4) %456,511 484,254 (5.7) %

Provision for credit losses-loans and leases ^(1) 13,758 4,629 197.2 %70,796 30,598 131.4 %

Provision for credit losses-unfunded commitments ^(1) (2,250) 177 N/M (237) (165) 43.6 %

Net interest income after provision for credit losses106,965 114,096 (6.3) %385,952 453,821 (15.0)%



Noninterest income

Service charges on deposit accounts 7,654 9,343 (18.1)%29,446 37,939 (22.4)%

Trust and wealth management fees 4,093 3,913 4.6 %16,531 15,644 5.7 %

Bankcard income 3,060 3,405 (10.1)%11,726 18,804 (37.6)%

Client derivative fees 2,021 4,194 (51.8)%10,313 15,662 (34.2)%

Foreign exchange income 12,305 6,014 104.6 %39,377 7,739 408.8 %

Net gains from sales of loans 13,089 4,723 177.1 %51,176 14,851 244.6 %

Net gains (losses) on sale of investment securities 4,618 (296) N/M 4,563 (406) N/M

Other 14,675 5,472 168.2 %25,991 21,140 22.9 %

Total noninterest income 61,515 36,768 67.3 %189,123 131,373 44.0 %



Noninterest expenses

Salaries and employee benefits 62,263 53,952 15.4 %236,779 209,061 13.3 %

Net occupancy 6,159 6,334 (2.8) %23,266 24,069 (3.3) %

Furniture and equipment 3,596 4,145 (13.2)%14,968 15,903 (5.9) %

Data processing 7,269 5,996 21.2 %27,514 21,881 25.7 %

Marketing 1,999 1,980 1.0 %6,414 6,908 (7.2) %

Communication 840 882 (4.8) %3,492 3,267 6.9 %

Professional services 3,038 2,192 38.6 %9,961 11,254 (11.5)%

Debt extinguishment 7,257 0 N/M 7,257 0 N/M

State intangible tax 1,514 1,767 (14.3)%6,058 5,829 3.9 %

FDIC assessments 1,065 1,055 0.9 %5,110 1,973 159.0 %

Intangible amortization 2,764 3,150 (12.3)%11,126 9,671 15.0 %

Other 17,034 11,434 49.0 %38,719 32,516 19.1 %

Total noninterest expenses 114,798 92,887 23.6 %390,664 342,332 14.1 %

Income before income taxes 53,682 57,977 (7.4) %184,411 242,862 (24.1)%

Income tax expense 5,370 9,300 (42.3)%28,601 44,787 (36.1)%

Net income $48,312 $48,677 (0.7) %$155,810 $198,075 (21.3)%



ADDITIONAL DATA

Net earnings per share - basic $0.50 $0.49 $1.60 $2.01

Net earnings per share - diluted $0.49 $0.49 $1.59 $2.00

Dividends declared per share $0.23 $0.23 $0.92 $0.90



Return on average assets 1.20 %1.34 % 1.00 %1.39 %

Return on average shareholders' equity 8.52 %8.60 % 7.02 %9.11 %



Interest income $130,029 $147,651 (11.9)%$524,963 $607,578 (13.6)%

Tax equivalent adjustment 1,613 1,630 (1.0) %6,529 6,328 3.2 %

Interest income - tax equivalent 131,642 149,281 (11.8)%531,492 613,906 (13.4)%

Interest expense 11,556 28,749 (59.8)%68,452 123,324 (44.5)%

Net interest income - tax equivalent $120,086 $120,532 (0.4) %$463,040 $490,582 (5.6) %



Net interest margin 3.45 %3.84 % 3.46 %3.95 %

Net interest margin (fully tax equivalent) ^(2) 3.49 %3.89 % 3.51 %4.00 %



Full-time equivalent employees 2,075 2,065



Beginning January 1,2020, calculation is based on current expected loss(1) methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a(2) standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)



2020

Fourth Third Second First Year to % Change

Quarter Quarter Quarter Quarter Date Linked Qtr.

Interest income

Loans and leases, including fees $106,733 $103,249 $105,900 $115,775 $431,657 3.4 %

Investment securities

Taxable 18,402 17,906 18,476 19,005 73,789 2.8 %

Tax-exempt 4,839 4,884 4,937 4,582 19,242 (0.9) %

Total investment securities interest 23,241 22,790 23,413 23,587 93,031 2.0 %

Other earning assets 55 31 47 142 275 77.4 %

Total interest income 130,029 126,070 129,360 139,504 524,963 3.1 %



Interest expense

Deposits 5,920 7,886 11,751 16,365 41,922 (24.9) %

Short-term borrowings 30 51 1,274 5,087 6,442 (41.2) %

Long-term borrowings 5,606 5,953 4,759 3,770 20,088 (5.8) %

Total interest expense 11,556 13,890 17,784 25,222 68,452 (16.8) %

Net interest income 118,473 112,180 111,576 114,282 456,511 5.6 %

Provision for credit losses-loans and leases ^(1) 13,758 15,299 17,859 23,880 70,796 (10.1) %

Provision for credit losses-unfunded commitments ^(1) (2,250) (1,925) 2,370 1,568 (237) 16.9 %

Net interest income after provision for credit losses106,965 98,806 91,347 88,834 385,952 8.3 %



Noninterest income

Service charges on deposit accounts 7,654 7,356 6,001 8,435 29,446 4.1 %

Trust and wealth management fees 4,093 3,855 4,114 4,469 16,531 6.2 %

Bankcard income 3,060 3,124 2,844 2,698 11,726 (2.0) %

Client derivative fees 2,021 2,203 2,984 3,105 10,313 (8.3) %

Foreign exchange income 12,305 10,530 6,576 9,966 39,377 16.9 %

Net gains from sales of loans 13,089 18,594 16,662 2,831 51,176 (29.6) %

Net gains (losses) on sale of investment securities 4,618 2 2 (59) 4,563 N/M

Other 14,675 3,835 3,542 3,939 25,991 282.7 %

Total noninterest income 61,515 49,499 42,725 35,384 189,123 24.3 %



Noninterest expenses

Salaries and employee benefits 62,263 63,769 55,925 54,822 236,779 (2.4) %

Net occupancy 6,159 5,625 5,378 6,104 23,266 9.5 %

Furniture and equipment 3,596 3,638 3,681 4,053 14,968 (1.2) %

Data processing 7,269 6,837 7,019 6,389 27,514 6.3 %

Marketing 1,999 1,856 1,339 1,220 6,414 7.7 %

Communication 840 855 907 890 3,492 (1.8) %

Professional services 3,038 2,443 2,205 2,275 9,961 24.4 %

Debt extinguishment 7,257 0 0 0 7,257 N/M

State intangible tax 1,514 1,514 1,514 1,516 6,058 0.0 %

FDIC assessments 1,065 1,350 1,290 1,405 5,110 (21.1) %

Intangible amortization 2,764 2,779 2,791 2,792 11,126 (0.5) %

Other 17,034 6,845 6,640 8,200 38,719 148.9 %

Total noninterest expenses 114,798 97,511 88,689 89,666 390,664 17.7 %

Income before income taxes 53,682 50,794 45,383 34,552 184,411 5.7 %

Income tax expense 5,370 9,317 7,990 5,924 28,601 (42.4) %

Net income $48,312 $41,477 $37,393 $28,628 $155,810 16.5 %



ADDITIONAL DATA

Net earnings per share - basic $0.50 $0.43 $0.38 $0.29 $1.60

Net earnings per share - diluted $0.49 $0.42 $0.38 $0.29 $1.59

Dividends declared per share $0.23 $0.23 $0.23 $0.23 $0.92



Return on average assets 1.20 %1.04 %0.96 %0.79 %1.00 %

Return on average shareholders' equity 8.52 %7.40 %6.88 %5.21 %7.02 %



Interest income $130,029 $126,070 $129,360 $139,504 $524,963 3.1 %

Tax equivalent adjustment 1,613 1,628 1,664 1,624 6,529 (0.9) %

Interest income - tax equivalent 131,642 127,698 131,024 141,128 531,492 3.1 %

Interest expense 11,556 13,890 17,784 25,222 68,452 (16.8) %

Net interest income - tax equivalent $120,086 $113,808 $113,240 $115,906 $463,040 5.5 %



Net interest margin 3.45 %3.32 %3.38 %3.71 %3.46 %

Net interest margin (fully tax equivalent)^ (2) 3.49 %3.36 %3.44 %3.77 %3.51 %



Full-time equivalent employees 2,075 2,065 2,076 2,067



Beginning January 1,2020, calculation is based on current expected loss(1) methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to(2) present net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)



2019

Fourth Third Second First Full

Quarter Quarter Quarter Quarter Year

Interest income

Loans and leases, including fees $122,802 $126,786 $126,365 $123,056 $499,009

Investment securities

Taxable 20,137 22,180 23,616 24,235 90,168

Tax-exempt 4,545 4,457 4,336 4,258 17,596

Total investment securities interest 24,682 26,637 27,952 28,493 107,764

Other earning assets 167 222 206 210 805

Total interest income 147,651 153,645 154,523 151,759 607,578



Interest expense

Deposits 19,026 20,151 20,612 19,243 79,032

Short-term borrowings 5,430 7,199 6,646 5,960 25,235

Long-term borrowings 4,293 4,760 4,963 5,041 19,057

Total interest expense 28,749 32,110 32,221 30,244 123,324

Net interest income 118,902 121,535 122,302 121,515 484,254

Provision for credit losses-loans and leases ^(1) 4,629 5,228 6,658 14,083 30,598

Provision for credit losses-unfunded commitments ^(1) 177 (216) (132) 6 (165)

Net interest income after provision for credit losses114,096 116,523 115,776 107,426 453,821



Noninterest income

Service charges on deposit accounts 9,343 9,874 9,819 8,903 37,939

Trust and wealth management fees 3,913 3,718 3,943 4,070 15,644

Bankcard income 3,405 3,316 6,497 5,586 18,804

Client derivative fees 4,194 4,859 4,905 1,704 15,662

Foreign exchange income 6,014 1,708 17 0 7,739

Net gains from sales of loans 4,723 4,806 3,432 1,890 14,851

Net gains on sale of investment securities (296) 105 (37) (178) (406)

Other 5,472 4,754 6,062 4,852 21,140

Total noninterest income 36,768 33,140 34,638 26,827 131,373



Noninterest expenses

Salaries and employee benefits 53,952 53,212 53,985 47,912 209,061

Net occupancy 6,334 5,509 5,596 6,630 24,069

Furniture and equipment 4,145 4,120 4,222 3,416 15,903

Data processing 5,996 5,774 4,984 5,127 21,881

Marketing 1,980 1,346 1,976 1,606 6,908

Communication 882 910 747 728 3,267

Professional services 2,192 4,771 2,039 2,252 11,254

State intangible tax 1,767 1,445 1,307 1,310 5,829

FDIC assessments 1,055 (1,097) 1,065 950 1,973

Intangible amortization 3,150 2,432 2,044 2,045 9,671

Other 11,434 8,020 6,545 6,517 32,516

Total noninterest expenses 92,887 86,442 84,510 78,493 342,332

Income before income taxes 57,977 63,221 65,904 55,760 242,862

Income tax expense (benefit) 9,300 12,365 13,201 9,921 44,787

Net income $48,677 $50,856 $52,703 $45,839 $198,075



ADDITIONAL DATA

Net earnings per share - basic $0.49 $0.52 $0.54 $0.47 $2.01

Net earnings per share - diluted $0.49 $0.51 $0.53 $0.47 $2.00

Dividends declared per share $0.23 $0.23 $0.22 $0.22 $0.90



Return on average assets 1.34 %1.41 %1.50 %1.33 %1.39 %

Return on average shareholders' equity 8.60 %9.13 %9.85 %8.88 %9.11 %



Interest income $147,651 $153,645 $154,523 $151,759 $607,578

Tax equivalent adjustment 1,630 1,759 1,416 1,523 6,328

Interest income - tax equivalent 149,281 155,404 155,939 153,282 613,906

Interest expense 28,749 32,110 32,221 30,244 123,324

Net interest income - tax equivalent $120,532 $123,294 $123,718 $123,038 $490,582



Net interest margin 3.84 %3.91 %3.99 %4.05 %3.95 %

Net interest margin (fully tax equivalent)^ (2) 3.89 %3.96 %4.04 %4.10 %4.00 %



Full-time equivalent employees 2,065 2,064 2,076 2,087



Beginning January 1,2020, calculation is based on current expected loss(1) methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is(2) a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)



Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, % Change % Change

2020 2020 2020 2020 2019 Linked Qtr. Comp Qtr.

ASSETS

Cash and due from banks $ 231,054 $ 207,128 $ 283,639 $ 261,892 $ 200,691 11.6 % 15.1 %

Interest-bearing deposits with other banks 20,305 38,806 38,845 71,071 56,948 (47.7) % (64.3) %

Investment securities available-for-sale 3,424,580 3,004,963 2,897,413 2,908,688 2,852,084 14.0 % 20.1 %

Investment securities held-to-maturity 131,687 118,072 127,347 136,744 142,862 11.5 % (7.8) %

Other investments 133,198 118,292 132,366 143,581 125,020 12.6 % 6.5 %

Loans held for sale 41,103 69,008 43,950 27,334 13,680 (40.4) % 200.5 %

Loans and leases

Commercial and industrial 3,007,509 3,292,313 3,322,374 2,477,773 2,465,877 (8.7) % 22.0 %

Lease financing 72,987 74,742 80,087 82,602 88,364 (2.3) % (17.4) %

Construction real estate 636,096 575,648 506,085 500,311 493,182 10.5 % 29.0 %

Commercial real estate 4,307,858 4,347,125 4,343,702 4,278,257 4,194,651 (0.9) % 2.7 %

Residential real estate 1,003,086 1,027,702 1,043,745 1,061,792 1,055,949 (2.4) % (5.0) %

Home equity 743,099 754,743 764,171 781,243 771,869 (1.5) % (3.7) %

Installment 81,850 84,629 79,150 80,085 82,589 (3.3) % (0.9) %

Credit card 48,485 43,907 42,397 45,756 49,184 10.4 % (1.4) %

Total loans 9,900,970 10,200,809 10,181,711 9,307,819 9,201,665 (2.9) % 7.6 %

Less:

Allowance for credit losses ^(1) 175,679 168,544 158,661 143,885 57,650 4.2 % 204.7 %

Net loans 9,725,291 10,032,265 10,023,050 9,163,934 9,144,015 (3.1) % 6.4 %

Premises and equipment 207,211 209,474 211,164 212,787 214,506 (1.1) % (3.4) %

Goodwill 937,771 937,771 937,771 937,771 937,771 0.0 % 0.0 %

Other intangibles 64,552 67,419 70,325 73,258 76,201 (4.3) % (15.3) %

Accrued interest and other assets 1,056,382 1,122,449 1,105,020 1,120,507 747,847 (5.9) % 41.3 %

Total Assets $ 15,973,134 $ 15,925,647 $ 15,870,890 $ 15,057,567 $ 14,511,625 0.3 % 10.1 %



LIABILITIES

Deposits

Interest-bearing demand $ 2,914,787 $ 2,632,467 $ 2,657,841 $ 2,498,109 $ 2,364,881 10.7 % 23.3 %

Savings 3,680,774 3,446,678 3,287,314 2,978,250 2,960,979 6.8 % 24.3 %

Time 1,872,733 1,935,392 2,241,212 2,435,858 2,240,441 (3.2) % (16.4) %

Total interest-bearing deposits 8,468,294 8,014,537 8,186,367 7,912,217 7,566,301 5.7 % 11.9 %

Noninterest-bearing 3,763,709 3,552,893 3,515,048 2,723,341 2,643,928 5.9 % 42.4 %

Total deposits 12,232,003 11,567,430 11,701,415 10,635,558 10,210,229 5.7 % 19.8 %

Federal funds purchased and securities sold

under agreements to repurchase 166,594 247,658 154,347 215,824 165,181 (32.7) % 0.9 %

FHLB short-term borrowings 0 0 0 1,181,900 1,151,000 0.0 % (100.0) %

Total short-term borrowings 166,594 247,658 154,347 1,397,724 1,316,181 (32.7) % (87.3) %

Long-term debt 776,202 1,341,164 1,285,767 325,566 414,376 (42.1) % 87.3 %

Total borrowed funds 942,796 1,588,822 1,440,114 1,723,290 1,730,557 (40.7) % (45.5) %

Accrued interest and other liabilities 516,265 521,580 508,342 519,336 323,134 (1.0) % 59.8 %

Total Liabilities 13,691,064 13,677,832 13,649,871 12,878,184 12,263,920 0.1 % 11.6 %



SHAREHOLDERS' EQUITY

Common stock 1,638,947 1,637,489 1,635,070 1,633,950 1,640,771 0.1 % (0.1) %

Retained earnings 720,429 694,484 675,532 660,653 711,249 3.7 % 1.3 %

Accumulated other comprehensive income (loss) 48,664 42,266 36,431 11,788 13,323 15.1 % 265.3 %

Treasury stock, at cost (125,970) (126,424) (126,014) (127,008) (117,638) (0.4) % 7.1 %

Total Shareholders' Equity 2,282,070 2,247,815 2,221,019 2,179,383 2,247,705 1.5 % 1.5 %

Total Liabilities and Shareholders' Equity $ 15,973,134 $ 15,925,647 $ 15,870,890 $ 15,057,567 $ 14,511,625 0.3 % 10.1 %



(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)



Quarterly Averages Year-to-Date Averages

Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, Dec. 31,

2020 2020 2020 2020 2019 2020 2019

ASSETS

Cash and due from banks $228,427 $233,216 $284,726 $235,696 $221,060 $245,436 $ 191,864

Interest-bearing deposits with other banks 143,884 40,277 91,990 39,332 36,672 78,943 35,814

Investment securities 3,403,839 3,162,832 3,164,243 3,115,723 3,102,867 3,212,051 3,288,875

Loans held for sale 42,402 45,186 36,592 13,174 21,050 34,390 14,774

Loans and leases

Commercial and industrial 3,182,749 3,299,259 3,058,677 2,450,893 2,469,810 2,999,223 2,505,615

Lease financing 74,107 78,500 81,218 85,782 91,225 79,882 92,902

Construction real estate 608,401 536,870 495,407 501,471 501,892 535,740 491,503

Commercial real estate 4,313,408 4,364,708 4,381,647 4,209,345 4,102,288 4,317,396 3,906,992

Residential real estate 1,022,701 1,041,250 1,052,996 1,055,456 1,053,707 1,043,040 1,010,620

Home equity 752,425 759,994 772,424 773,082 773,119 764,436 787,716

Installment 83,509 82,016 79,016 81,234 85,515 81,451 88,815

Credit card 48,179 45,609 44,402 50,206 50,616 47,098 49,598

Total loans 10,085,479 10,208,206 9,965,787 9,207,469 9,128,172 9,868,266 8,933,761

Less:

Allowance for credit losses ^(1) 172,201 165,270 155,454 121,126 56,649 153,596 58,504

Net loans 9,913,278 10,042,936 9,810,333 9,086,343 9,071,523 9,714,670 8,875,257

Premises and equipment 208,800 211,454 213,903 215,545 215,171 212,413 213,951

Goodwill 937,771 937,771 937,771 937,771 937,710 937,771 899,131

Other intangibles 66,195 69,169 72,086 75,014 78,190 70,600 51,884

Accrued interest and other assets 1,086,390 1,099,169 1,098,560 805,824 776,045 1,022,870 639,169

Total Assets $16,030,986 $15,842,010 $15,710,204 $14,524,422 $14,460,288 $15,529,144 $ 14,210,719



LIABILITIES

Deposits

Interest-bearing demand $2,812,748 $2,668,635 $2,602,917 $2,418,193 $2,373,962 $2,626,252 $ 2,326,193

Savings 3,547,179 3,342,514 3,173,274 2,976,518 2,995,395 3,260,882 3,027,725

Time 1,844,379 2,015,933 2,619,038 2,196,080 2,214,174 2,167,553 2,223,429

Total interest-bearing deposits 8,204,306 8,027,082 8,395,229 7,590,791 7,583,531 8,054,687 7,577,347

Noninterest-bearing 3,720,417 3,535,432 3,335,866 2,643,240 2,638,908 3,310,483 2,524,011

Total deposits 11,924,723 11,562,514 11,731,095 10,234,031 10,222,439 11,365,170 10,101,358

Federal funds purchased and securities sold

under agreements to repurchase 136,795 150,088 145,291 164,093 206,800 149,036 155,859

FHLB short-term borrowings 7,937 30,868 548,183 1,189,765 952,625 441,867 990,860

Total short-term borrowings 144,732 180,956 693,474 1,353,858 1,159,425 590,903 1,146,719

Long-term debt 1,162,729 1,338,792 579,345 381,909 454,271 867,798 522,340

Total borrowed funds 1,307,461 1,519,748 1,272,819 1,735,767 1,613,696 1,458,701 1,669,059

Accrued interest and other liabilities 542,740 529,326 520,425 344,891 379,046 484,628 265,623

Total Liabilities 13,774,924 13,611,588 13,524,339 12,314,689 12,215,181 13,308,499 12,036,040



SHAREHOLDERS' EQUITY

Common stock 1,638,032 1,636,107 1,634,405 1,638,851 1,640,066 1,636,850 1,629,434

Retained earnings 703,257 679,980 658,312 660,108 691,236 675,503 650,381

Accumulated other comprehensive loss 40,960 40,697 19,888 31,200 13,986 33,228 (6,480)

Treasury stock, at cost (126,187) (126,362) (126,740) (120,426) (100,181) (124,936) (98,656)

Total Shareholders' Equity 2,256,062 2,230,422 2,185,865 2,209,733 2,245,107 2,220,645 2,174,679

Total Liabilities and Shareholders' Equity $16,030,986 $15,842,010 $15,710,204 $14,524,422 $14,460,288 $15,529,144 $ 14,210,719



(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)



Quarterly Averages Year-to-Date Averages

December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019

Balance Yield Balance Yield Balance Yield Balance Yield Balance Yield

Earning assets

Investments:

Investment securities $3,403,839 2.71%$3,162,832 2.86%$3,102,867 3.16 % $3,212,051 2.90 % $3,288,875 3.28 %

Interest-bearing deposits with other banks143,884 0.15%40,277 0.31%36,672 1.81 % 78,943 0.35 % 35,814 2.25 %

Gross loans ^(1) 10,127,881 4.18%10,253,392 4.00%9,149,222 5.33 % 9,902,656 4.36 % 8,948,535 5.58 %

Total earning assets 13,675,604 3.77%13,456,501 3.72%12,288,761 4.77 % 13,193,650 3.98 % 12,273,224 4.95 %



Nonearning assets

Allowance for credit losses (172,201) (165,270) (56,649) (153,596) (58,504)

Cash and due from banks 228,427 233,216 221,060 245,436 191,864

Accrued interest and other assets 2,299,156 2,317,563 2,007,116 2,243,654 1,804,135

Total assets $16,030,986 $15,842,010 $14,460,288 $15,529,144 $14,210,719



Interest-bearing liabilities

Deposits:

Interest-bearing demand $2,812,748 0.08%$2,668,635 0.08%$2,373,962 0.53 % $2,626,252 0.17 % $2,326,193 0.55 %

Savings 3,547,179 0.15%3,342,514 0.14%2,995,395 0.60 % 3,260,882 0.22 % 3,027,725 0.71 %

Time 1,844,379 0.86%2,015,933 1.20%2,214,174 2.03 % 2,167,553 1.39 % 2,223,429 2.02 %

Total interest-bearing deposits 8,204,306 0.29%8,027,082 0.39%7,583,531 1.00 % 8,054,687 0.52 % 7,577,347 1.04 %

Borrowed funds

Short-term borrowings 144,732 0.08%180,956 0.11%1,159,425 1.86 % 590,903 1.09 % 1,146,719 2.20 %

Long-term debt 1,162,729 1.91%1,338,792 1.76%454,271 3.75 % 867,798 2.31 % 522,340 3.65 %

Total borrowed funds 1,307,461 1.71%1,519,748 1.57%1,613,696 2.39 % 1,458,701 1.82 % 1,669,059 2.65 %

Total interest-bearing liabilities 9,511,767 0.48%9,546,830 0.58%9,197,227 1.24 % 9,513,388 0.72 % 9,246,406 1.33 %



Noninterest-bearing liabilities

Noninterest-bearing demand deposits 3,720,417 3,535,432 2,638,908 3,310,483 2,524,011

Other liabilities 542,740 529,326 379,046 484,628 265,623

Shareholders' equity 2,256,062 2,230,422 2,245,107 2,220,645 2,174,679

Total liabilities & shareholders' equity $16,030,986 $15,842,010 $14,460,288 $15,529,144 $14,210,719



Net interest income $118,473 $112,180 $118,902 $456,511 $484,254

Net interest spread 3.29% 3.14% 3.53 % 3.26 % 3.62 %

Net interest margin 3.45% 3.32% 3.84 % 3.46 % 3.95 %



Tax equivalent adjustment 0.04% 0.04% 0.05 % 0.05 % 0.05 %

Net interest margin (fully tax equivalent) 3.49% 3.36% 3.89 % 3.51 % 4.00 %





^(1) Loans held for sale and nonaccrual loans are 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 $(1,195)$1,646$451 $(3,496) $2,055$(1,441) $(12,508)$(2,225)$(14,733)

Interest-bearing deposits with other banks(16) 40 24 (153) 41 (112) (680) 150 (530)

Gross loans ^(2) 4,807 (1,323)3,484 (26,383) 10,314 (16,069) (108,942) 41,590 (67,352)

Total earning assets 3,596 363 3,959 (30,032) 12,410 (17,622) (122,130) 39,515 (82,615)



Interest-bearing liabilities

Total interest-bearing deposits $(2,094)$128 $(1,966)$(13,554)$448 $(13,106)$(39,594)$2,484 $(37,110)

Borrowed funds

Short-term borrowings (13) (8) (21) (5,190) (210) (5,400) (12,734) (6,059) (18,793)

Long-term debt 502 (849) (347) (2,103) 3,416 1,313 (6,966) 7,997 1,031

Total borrowed funds 489 (857) (368) (7,293) 3,206 (4,087) (19,700) 1,938 (17,762)

Total interest-bearing liabilities (1,605) (729) (2,334) (20,847) 3,654 (17,193) (59,294) 4,422 (54,872)

Net interest income ^(1) $5,201 $1,092$6,293 $(9,185) $8,756$(429) $(62,836)$35,093 $(27,743)





^(1) Not tax equivalent.

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

FIRST FINANCIAL BANCORP.

CREDIT QUALITY

(Dollars in thousands)

(Unaudited)



Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, Full Year Full Year

2020 2020 2020 2020 2019 2020 2019

ALLOWANCE FOR CREDIT LOSS ACTIVITY

Balance at beginning of period $ 168,544 $ 158,661 $ 143,885 $ 57,650 $ 56,552 $ 57,650 $ 56,542

Day one adoption impact of ASC 326 0 0 0 61,505 0 61,505 0

Provision for credit losses 13,758 15,299 17,859 23,880 4,629 70,796 30,598

Gross charge-offs

Commercial and industrial 1,505 1,467 1,282 1,091 2,919 5,345 26,676

Lease financing 0 852 0 0 62 852 162

Construction real estate 0 0 0 0 0 0 0

Commercial real estate 6,270 3,789 2,037 4 1,854 12,100 3,689

Residential real estate 203 22 148 115 167 488 677

Home equity 386 460 428 267 807 1,541 2,591

Installment 21 59 7 61 31 148 223

Credit card 169 171 234 311 319 885 1,547

Total gross charge-offs 8,554 6,820 4,136 1,849 6,159 21,359 35,565

Recoveries

Commercial and industrial 367 265 275 2,000 1,796 2,907 2,883

Lease financing (6) 6 0 0 0 0 0

Construction real estate 3 0 14 0 0 17 68

Commercial real estate 844 760 424 234 439 2,262 1,113

Residential real estate 145 91 93 52 72 381 273

Home equity 428 209 156 339 243 1,132 1,335

Installment 65 35 27 31 49 158 251

Credit card 85 38 64 43 29 230 152

Total recoveries 1,931 1,404 1,053 2,699 2,628 7,087 6,075

Total net charge-offs 6,623 5,416 3,083 (850) 3,531 14,272 29,490

Ending allowance for credit losses $ 175,679 $ 168,544 $ 158,661 $ 143,885 $ 57,650 $ 175,679 $ 57,650



NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)

Commercial and industrial 0.14 % 0.14 % 0.13 % (0.15) % 0.18 % 0.08 % 0.95 %

Lease financing 0.03 % 4.29 % 0.00 % 0.00 % 0.27 % 1.07 % 0.17 %

Construction real estate 0.00 % 0.00 % (0.01) % 0.00 % 0.00 % 0.00 % (0.01) %

Commercial real estate 0.50 % 0.28 % 0.15 % (0.02) % 0.14 % 0.23 % 0.07 %

Residential real estate 0.02 % (0.03) % 0.02 % 0.02 % 0.04 % 0.01 % 0.04 %

Home equity (0.02) % 0.13 % 0.14 % (0.04) % 0.29 % 0.05 % 0.16 %

Installment (0.21) % 0.12 % (0.10) % 0.15 % (0.08) % (0.01) % (0.03) %

Credit card 0.69 % 1.16 % 1.54 % 2.15 % 2.27 % 1.39 % 2.81 %

Total net charge-offs 0.26 % 0.21 % 0.12 % (0.04) % 0.15 % 0.14 % 0.33 %



COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS

Nonaccrual loans ^(1)

Commercial and industrial $ 29,230 $ 34,686 $ 33,906 $ 21,126 $ 24,346 $ 29,230 $ 24,346

Lease financing 0 1,092 1,353 222 223 0 223

Construction real estate 0 0 0 0 0 0 0

Commercial real estate 34,682 24,521 14,002 10,050 7,295 34,682 7,295

Residential real estate 11,601 12,104 12,813 11,163 10,892 11,601 10,892

Home equity 5,076 5,374 5,604 5,821 5,242 5,076 5,242

Installment 163 153 201 145 167 163 167

Nonaccrual loans 80,752 77,930 67,879 48,527 48,165 80,752 48,165

Accruing troubled debt restructurings (TDRs) 7,099 7,759 8,377 22,206 11,435 7,099 11,435

Total nonperforming loans 87,851 85,689 76,256 70,733 59,600 87,851 59,600

Other real estate owned (OREO) 1,287 1,643 1,872 1,467 2,033 1,287 2,033

Total nonperforming assets 89,138 87,332 78,128 72,200 61,633 89,138 61,633

Accruing loans past due 90 days or more 169 79 124 120 201 169 201

Total underperforming assets $ 89,307 $ 87,411 $ 78,252 $ 72,320 $ 61,834 $ 89,307 $ 61,834

Total classified assets $ 142,021 $ 134,002 $ 125,543 $ 124,510 $ 89,250 $ 142,021 $ 89,250



CREDIT QUALITY RATIOS

Allowance for credit losses to

Nonaccrual loans 217.55 % 216.28 % 233.74 % 296.51 % 119.69 % 217.55 % 119.69 %

Nonperforming loans 199.97 % 196.69 % 208.06 % 203.42 % 96.73 % 199.97 % 96.73 %

Total ending loans 1.77 % 1.65 % 1.56 % 1.55 % 0.63 % 1.77 % 0.63 %

Nonperforming loans to total loans 0.89 % 0.84 % 0.75 % 0.76 % 0.65 % 0.89 % 0.65 %

Nonperforming assets to

Ending loans, plus OREO 0.90 % 0.86 % 0.77 % 0.78 % 0.67 % 0.90 % 0.67 %

Total assets 0.56 % 0.55 % 0.49 % 0.48 % 0.42 % 0.56 % 0.42 %

Nonperforming assets, excluding accruing TDRs to

Ending loans, plus OREO 0.83 % 0.78 % 0.68 % 0.54 % 0.55 % 0.83 % 0.55 %

Total assets 0.51 % 0.50 % 0.44 % 0.33 % 0.35 % 0.51 % 0.35 %

Classified assets to total assets 0.89 % 0.84 % 0.79 % 0.83 % 0.62 % 0.89 % 0.62 %



(1) Nonaccrual loans include nonaccrual TDRs of $14.7 million, $29.3 million, $32.7 million, $18.4 million, and $18.5 million, as of December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019,, respectively.

FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands, except per share data)

(Unaudited)

Twelve months ended,

Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,

2020 2020 2020 2020 2019 2020 2019

PER COMMON SHARE

Market Price

High $17.77 $15.15 $16.38 $25.52 $26.04 $25.52 $28.56

Low $12.07 $11.40 $11.52 $12.67 $23.24 $11.40 $22.16

Close $17.53 $12.01 $13.89 $14.91 $25.44 $17.53 $25.44



Average shares outstanding - basic 97,253,787 97,247,080 97,220,748 97,736,690 98,684,706 97,363,952 98,305,570

Average shares outstanding - diluted 98,020,534 98,008,733 97,988,600 98,356,214 99,232,167 98,093,098 98,851,471

Ending shares outstanding 98,021,929 97,999,763 98,018,858 97,968,958 98,490,998 98,021,929 98,490,998



Total shareholders' equity $2,282,070 $2,247,815 $2,221,019 $2,179,383 $2,247,705 $2,282,070 $2,247,705



REGULATORY CAPITAL Preliminary Preliminary

Common equity tier 1 capital $1,325,922 $1,293,716 $1,267,609 $1,243,152 $1,245,746 $1,325,922 $1,245,746

Common equity tier 1 capital ratio 11.82 %11.63 %11.49 %11.27 %11.30 %11.82 %11.30 %

Tier 1 capital $1,368,818 $1,336,497 $1,310,276 $1,285,705 $1,288,185 $1,368,818 $1,288,185

Tier 1 ratio 12.20 %12.02 %11.87 %11.66 %11.69 %12.20 %11.69 %

Total capital $1,744,802 $1,708,817 $1,676,532 $1,493,100 $1,475,813 $1,744,802 $1,475,813

Total capital ratio 15.55 %15.37 %15.19 %13.54 %13.39 %15.55 %13.39 %

Total capital in excess of minimum requirement $566,795 $541,263 $517,902 $335,229 $318,315 $566,795 $318,315

Total risk-weighted assets $11,219,114 $11,119,560 $11,034,570 $11,027,347 $11,023,795 $11,219,114 $11,023,795

Leverage ratio 9.55 %9.55 %8.98 %9.49 %9.58 %9.55 %9.58 %



OTHER CAPITAL RATIOS

Ending shareholders' equity to ending assets 14.29 %14.11 %13.99 %14.47 %15.49 %14.29 %15.49 %

Ending tangible shareholders' equity to ending tangible assets 8.47 %8.25 %8.09 %8.25 %9.07 %8.47 %9.07 %

Average shareholders' equity to average assets 14.07 %14.08 %13.91 %15.21 %15.53 %14.30 %15.30 %

Average tangible shareholders' equity to average tangible assets8.26 %8.18 %7.94 %8.79 %9.07 %8.28 %9.16 %



REPURCHASE PROGRAM ^(1)

Shares repurchased 0 0 0 880,000 1,609,778 880,000 2,753,272

Average share repurchase price N/A N/A N/A $18.96 $24.13 $18.96 $24.05

Total cost of shares repurchased N/A N/A N/A $16,686 $38,846 $16,686 $66,218



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



N/A = Not applicable

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SOURCE First Financial Bancorp.