PR Newswire | Oct 22, 2020 04:16PM EDT

10/22 15:15 CDT

First Financial Bancorp Announces Third Quarter 2020 Financial Results CINCINNATI, Oct. 22, 2020

CINCINNATI, Oct. 22, 2020 /PRNewswire/ --

* Earnings per diluted share of $0.42; $0.44 on an adjusted(1) basis * Return on average assets of 1.04%; 1.09% as adjusted(1) * Record core fee income driven by $18.6 million of mortgage banking and $10.5 million of foreign exchange income * Provision for credit losses of $13.4 million; 34% reduction from second quarter

First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and nine months ended September 30, 2020.

For the three months ended September 30, 2020, the Company reported net income of $41.5 million, or $0.42 per diluted common share. These results compare to net income of $37.4 million, or $0.38 per diluted common share, for the second quarter of 2020 and $50.9 million, or $0.51 per diluted common share, for the third quarter of 2019. For the nine months ended September 30, 2020, First Financial had earnings per diluted common share of $1.10 compared to $1.51 for the same period in 2019.

Return on average assets for the third quarter of 2020 was 1.04% while return on average tangible common equity was 13.61%. These compare to returns on average assets of 0.96% and 1.41%, and returns on average tangible common equity of 12.90% and 16.15%, in the second quarter of 2020 and the third quarter of 2019, respectively.

Third quarter 2020 highlights include:

* After adjustments(1) for certain nonrecurring and certain COVID-19 related items: * Net income of $0.44 per diluted common share * 1.09% return on average assets * 14.18% return on average tangible common equity

* Adjustments(1) to net income include: * $0.1 million of costs directly related to COVID-19 * $2.1 million of other nonrecurring costs such as merger related and branch consolidation costs

* Strong noninterest income of $49.5 million, an increase of 15.9% from the linked quarter * Mortgage banking revenue increased $1.9 million, or 11.6% * Record foreign exchange income of $10.5 million; 60.1% increase from linked quarter * Service charges on deposits, including overdrafts, increased $1.4 million, or 22.6%

* Noninterest expenses of $97.5 million, or $95.3 million as adjusted(1) * Includes $7.0 million of incremental incentive compensation expenses directly related to strong operating results and fee income generation * Includes $0.5 million contribution to First Financial Foundation * Efficiency ratio of 60.3%; 58.9% as adjusted(1)

* Loan balances were relatively unchanged at $10.2 billion * Average transactional deposit balances grew $434.5 million compared to the linked quarter; 19.0% on an annualized basis

_________________________________________________________________________________________

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

* Total Allowance for Credit Losses of $183.3 million; Total quarterly provision for credit losses of $13.4 million * Loans and leases - ACL of $168.5 million, 1.65% of total loans; 1.81% of loans excluding PPP * Unfunded Commitments - ACL of $14.8 million * Third quarter provision expense driven by expected economic impact from COVID-19, partially offset by higher prepayment rates

* Net interest margin of 3.36% on a fully tax-equivalent basis(1) * 8 basis point decline compared to the linked quarter; 19 basis point decline due to loan yields partially offset by 14 basis point impact from reduced funding costs * 3 basis points of incremental dilution from PPP from the linked quarter * Impact of decline in short term rates, partially offset by funding cost reductions and higher loan fees

* Strong capital ratios * Total capital of 15.37% * Tier 1 common equity of 11.63% * Tangible common equity of 8.25%; 8.79% excluding PPP loans * Tangible book value per share of $12.56; $0.30 increase compared to linked quarter

Archie Brown, President and Chief Executive Officer, remarked, "We are pleased with our strong third quarter operating results while maintaining focus on three important pandemic related priorities: maintaining the health and safety of our associates, assisting our clients and communities and strengthening our Company."

Mr. Brown continued, "Despite continued interest rate headwinds and difficult business conditions, we posted strong earnings as reflected in our adjusted earnings per share of $0.44, adjusted return on assets of 1.09%, and an adjusted efficiency ratio of 58.9%. Additionally, we were encouraged that credit trends remained relatively stable for the quarter. Given the backdrop of increasing Covid-19 cases in the Midwest and uncertainty about the timing of vaccines to bring the pandemic under control, we recorded $13.4 million of provision expense in anticipation of credit deterioration in future quarters, leading to an increase in our allowance for credit losses to 1.81% of total loans, excluding PPP."

Mr. Brown further commented, "Third quarter results were primarily driven by exceptional fee income, well exceeding second quarter results, which at the time was our highest core fee income on record. The steadfast diligence of our mortgage team capitalized on the continued historic low interest rate environment to drive another sensational quarter in mortgage banking revenue, and Bannockburn recorded its highest income quarter ever. We were also pleased to see service charges improve as local economies continued to gradually reopen and consumer spending increased. Total expenses increased during the quarter as a direct result of our strong operating performance and fee income generation leading to higher incentive and commission expense."

Mr. Brown concluded, "We are encouraged by our improved operating performance and by the resiliency of our associates. Six months into a global pandemic, we now have 98% of our banking centers fully open to service the needs of our clients, and associates in our corporate offices and operations centers have begun gradually returning, albeit at significantly reduced capacity levels. We continue to provide a bridge for our clients to navigate the environment with approximately $630 million, or 6.2% of total loans, receiving a round two deferral and all capital ratios have improved to equal or surpass pre-pandemic levels. Additionally, this year we have added $125 million to our Allowance for Credit Losses, which brings our total ACL to greater than three times the balance at December 31, 2019. We remain committed to managing pandemic priorities and positioning the Company for even stronger performance when the health crisis subsides."

Full detail of the Company's third quarter 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, October 23, 2020 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 1048538. 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 Statement

Certain 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; (iv) 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 September 30, 2020, the Company had $15.9 billion in assets, $10.2 billion in loans, $11.6 billion in deposits and $2.2 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 $2.8 billion in assets under management as of September 30, 2020. The Company operated 143 full service banking centers as of September 30, 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, Nine months ended,

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

2020 2020 2020 2019 2019 2020 2019

RESULTS OF OPERATIONS

Net income $41,477 $37,393 $28,628 $48,677 $50,856 $107,498 $149,398

Net earnings per share - basic $0.43 $0.38 $0.29 $0.49 $0.52 $1.10 $1.52

Net earnings per share - diluted $0.42 $0.38 $0.29 $0.49 $0.51 $1.10 $1.51

Dividends declared per share $0.23 $0.23 $0.23 $0.23 $0.23 $0.69 $0.67



KEY FINANCIAL RATIOS

Return on average assets 1.04 %0.96 %0.79 %1.34 %1.41 %0.93 %1.41 %

Return on average shareholders' equity 7.40 %6.88 %5.21 %8.60 %9.13 %6.50 %9.29 %

Return on average tangible shareholders' equity 13.61 %12.90 %9.71 %15.84 %16.15 %12.08 %16.48 %



Net interest margin 3.32 %3.38 %3.71 %3.84 %3.91 %3.46 %3.98 %

Net interest margin (fully tax equivalent) ^(1) 3.36 %3.44 %3.77 %3.89 %3.96 %3.52 %4.03 %



Ending shareholders' equity as a percent of ending assets14.11 %13.99 %14.47 %15.49 %15.62 %14.11 %15.62 %

Ending tangible shareholders' equity as a percent of:

Ending tangible assets 8.25 %8.09 %8.25 %9.07 %9.17 %8.25 %9.17 %

Risk-weighted assets 11.07 %10.89 %10.50 %11.09 %11.34 %11.07 %11.34 %



Average shareholders' equity as a percent of average 14.08 %13.91 %15.21 %15.53 %15.43 %14.38 %15.23 %assets

Average tangible shareholders' equity as a percent of

average tangible assets 8.18 %7.94 %8.79 %9.07 %9.35 %8.29 %9.19 %



Book value per share $22.94 $22.66 $22.25 $22.82 $22.59 $22.94 $22.59

Tangible book value per share $12.56 $12.26 $11.82 $12.42 $12.33 $12.56 $12.33



Common equity tier 1 ratio^ (2) 11.63 %11.49 %11.27 %11.30 %11.52 %11.63 %11.52 %

Tier 1 ratio ^(2) 12.02 %11.87 %11.66 %11.69 %11.91 %12.02 %11.91 %

Total capital ratio ^(2) 15.37 %15.19 %13.54 %13.39 %13.62 %15.37 %13.62 %

Leverage ratio ^(2) 9.55 %8.98 %9.49 %9.58 %9.75 %9.55 %9.75 %



AVERAGE BALANCE SHEET ITEMS

Loans ^(3) $10,253,392 $10,002,379 $9,220,643 $9,149,222 $9,014,092 $9,827,033 $8,880,904

Investment securities 3,162,832 3,164,243 3,115,723 3,102,867 3,290,666 3,147,655 3,351,559

Interest-bearing deposits with other banks 40,277 91,990 39,332 36,672 38,569 57,138 35,525

Total earning assets $13,456,501 $13,258,612 $12,375,698 $12,288,761 $12,343,327 $13,031,826 $12,267,988

Total assets $15,842,010 $15,710,204 $14,524,422 $14,460,288 $14,320,514 $15,360,642 $14,126,615

Noninterest-bearing deposits $3,535,432 $3,335,866 $2,643,240 $2,638,908 $2,513,458 $3,172,841 $2,485,291

Interest-bearing deposits 8,027,082 8,395,229 7,590,791 7,583,531 7,504,708 8,004,450 7,575,263

Total deposits $11,562,514 $11,731,095 $10,234,031 $10,222,439 $10,018,166 $11,177,291 $10,060,554

Borrowings $1,519,748 $1,272,819 $1,735,767 $1,613,696 $1,816,983 $1,509,482 $1,687,716

Shareholders' equity $2,230,422 $2,185,865 $2,209,733 $2,245,107 $2,210,327 $2,208,753 $2,150,945



CREDIT QUALITY RATIOS

Allowance to ending loans 1.65 %1.56 %1.55 %0.63 %0.62 %1.65 %0.62 %

Allowance to nonaccrual loans 216.28 %233.74 %296.51 %119.69 %93.18 %216.28 %93.18 %

Allowance to nonperforming loans 196.69 %208.06 %203.42 %96.73 %71.46 %196.69 %71.46 %

Nonperforming loans to total loans 0.84 %0.75 %0.76 %0.65 %0.87 %0.84 %0.87 %

Nonperforming assets to ending loans, plus OREO 0.86 %0.77 %0.78 %0.67 %0.89 %0.86 %0.89 %

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

Classified assets to total assets 0.84 %0.79 %0.83 %0.62 %0.92 %0.84 %0.92 %

Net charge-offs to average loans (annualized) 0.21 %0.12 %(0.04) %0.15 %0.45 %0.10 %0.39 %

(1) 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 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) September 30, 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, Nine months ended,

September 30, September 30,

2020 2019 % Change 2020 2019 % Change

Interest income

Loans and leases, including fees $ 103,249 $ 126,786 (18.6) % $ 324,924 $ 376,207 (13.6) %

Investment securities

Taxable 17,906 22,180 (19.3) % 55,387 70,031 (20.9) %

Tax-exempt 4,884 4,457 9.6 % 14,403 13,051 10.4 %

Total investment securities interest 22,790 26,637 (14.4) % 69,790 83,082 (16.0) %

Other earning assets 31 222 (86.0) % 220 638 (65.5) %

Total interest income 126,070 153,645 (17.9) % 394,934 459,927 (14.1) %



Interest expense

Deposits 7,886 20,151 (60.9) % 36,002 60,006 (40.0) %

Short-term borrowings 51 7,199 (99.3) % 6,412 19,805 (67.6) %

Long-term borrowings 5,953 4,760 25.1 % 14,482 14,764 (1.9) %

Total interest expense 13,890 32,110 (56.7) % 56,896 94,575 (39.8) %

Net interest income 112,180 121,535 (7.7) % 338,038 365,352 (7.5) %

Provision for credit losses-loans and leases ^(1) 15,299 5,228 192.6 % 57,038 25,969 119.6 %

Provision for credit losses-unfunded commitments ^(1) (1,925) (216) N/M 2,013 (342) N/M

Net interest income after provision for credit losses 98,806 116,523 (15.2) % 278,987 339,725 (17.9) %



Noninterest income

Service charges on deposit accounts 7,356 9,874 (25.5) % 21,792 28,596 (23.8) %

Trust and wealth management fees 3,855 3,718 3.7 % 12,438 11,731 6.0 %

Bankcard income 3,124 3,316 (5.8) % 8,666 15,399 (43.7) %

Client derivative fees 2,203 4,859 (54.7) % 8,292 11,468 (27.7) %

Foreign exchange income 10,530 1,708 N/M 27,072 1,725 N/M

Net gains from sales of loans 18,594 4,806 286.9 % 38,087 10,128 276.1 %

Net gains (losses) on sale of investment securities 2 105 (98.1) % (55) (110) 50.0 %

Other 3,835 4,754 (19.3) % 11,316 15,668 (27.8) %

Total noninterest income 49,499 33,140 49.4 % 127,608 94,605 34.9 %



Noninterest expenses

Salaries and employee benefits 63,769 53,212 19.8 % 174,516 155,109 12.5 %

Net occupancy 5,625 5,509 2.1 % 17,107 17,735 (3.5) %

Furniture and equipment 3,638 4,120 (11.7) % 11,372 11,758 (3.3) %

Data processing 6,837 5,774 18.4 % 20,245 15,885 27.4 %

Marketing 1,856 1,346 37.9 % 4,415 4,928 (10.4) %

Communication 855 910 (6.0) % 2,652 2,385 11.2 %

Professional services 2,443 4,771 (48.8) % 6,923 9,062 (23.6) %

State intangible tax 1,514 1,445 4.8 % 4,544 4,062 11.9 %

FDIC assessments 1,350 (1,097) 223.1 % 4,045 918 340.6 %

Intangible amortization 2,779 2,432 14.3 % 8,362 6,521 28.2 %

Other 6,845 8,020 (14.7) % 21,685 21,082 2.9 %

Total noninterest expenses 97,511 86,442 12.8 % 275,866 249,445 10.6 %

Income before income taxes 50,794 63,221 (19.7) % 130,729 184,885 (29.3) %

Income tax expense 9,317 12,365 (24.7) % 23,231 35,487 (34.5) %

Net income $ 41,477 $ 50,856 (18.4) % $ 107,498 $ 149,398 (28.0) %



ADDITIONAL DATA

Net earnings per share - basic $ 0.43 $ 0.52 $ 1.10 $ 1.52

Net earnings per share - diluted $ 0.42 $ 0.51 $ 1.10 $ 1.51

Dividends declared per share $ 0.23 $ 0.23 $ 0.69 $ 0.67



Return on average assets 1.04 % 1.41 % 0.93 % 1.41 %

Return on average shareholders' equity 7.40 % 9.13 % 6.50 % 9.29 %



Interest income $ 126,070 $ 153,645 (17.9) % $ 394,934 $ 459,927 (14.1) %

Tax equivalent adjustment 1,628 1,759 (7.4) % 4,916 4,698 4.6 %

Interest income - tax equivalent 127,698 155,404 (17.8) % 399,850 464,625 (13.9) %

Interest expense 13,890 32,110 (56.7) % 56,896 94,575 (39.8) %

Net interest income - tax equivalent $ 113,808 $ 123,294 (7.7) % $ 342,954 $ 370,050 (7.3) %



Net interest margin 3.32 % 3.91 % 3.46 % 3.98 %

Net interest margin (fully tax equivalent) ^(2) 3.36 % 3.96 % 3.52 % 4.03 %



Full-time equivalent employees 2,065 2,064



(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.

(2) 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 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

Third Second First Year to % Change

Quarter Quarter Quarter Date Linked Qtr.

Interest income

Loans and leases, including fees $ 103,249 $ 105,900 $ 115,775 $ 324,924 (2.5) %

Investment securities

Taxable 17,906 18,476 19,005 55,387 (3.1) %

Tax-exempt 4,884 4,937 4,582 14,403 (1.1) %

Total investment securities interest 22,790 23,413 23,587 69,790 (2.7) %

Other earning assets 31 47 142 220 (34.0) %

Total interest income 126,070 129,360 139,504 394,934 (2.5) %



Interest expense

Deposits 7,886 11,751 16,365 36,002 (32.9) %

Short-term borrowings 51 1,274 5,087 6,412 (96.0) %

Long-term borrowings 5,953 4,759 3,770 14,482 25.1 %

Total interest expense 13,890 17,784 25,222 56,896 (21.9) %

Net interest income 112,180 111,576 114,282 338,038 0.5 %

Provision for credit losses-loans and leases ^(1) 15,299 17,859 23,880 57,038 (14.3) %

Provision for credit losses-unfunded commitments ^(1) (1,925) 2,370 1,568 2,013 (181.2) %

Net interest income after provision for credit losses 98,806 91,347 88,834 278,987 8.2 %



Noninterest income

Service charges on deposit accounts 7,356 6,001 8,435 21,792 22.6 %

Trust and wealth management fees 3,855 4,114 4,469 12,438 (6.3) %

Bankcard income 3,124 2,844 2,698 8,666 9.8 %

Client derivative fees 2,203 2,984 3,105 8,292 (26.2) %

Foreign exchange income 10,530 6,576 9,966 27,072 60.1 %

Net gains from sales of loans 18,594 16,662 2,831 38,087 11.6 %

Net gains (losses) on sale of investment securities 2 2 (59) (55) 0.0 %

Other 3,835 3,542 3,939 11,316 8.3 %

Total noninterest income 49,499 42,725 35,384 127,608 15.9 %



Noninterest expenses

Salaries and employee benefits 63,769 55,925 54,822 174,516 14.0 %

Net occupancy 5,625 5,378 6,104 17,107 4.6 %

Furniture and equipment 3,638 3,681 4,053 11,372 (1.2) %

Data processing 6,837 7,019 6,389 20,245 (2.6) %

Marketing 1,856 1,339 1,220 4,415 38.6 %

Communication 855 907 890 2,652 (5.7) %

Professional services 2,443 2,205 2,275 6,923 10.8 %

State intangible tax 1,514 1,514 1,516 4,544 0.0 %

FDIC assessments 1,350 1,290 1,405 4,045 4.7 %

Intangible amortization 2,779 2,791 2,792 8,362 (0.4) %

Other 6,845 6,640 8,200 21,685 3.1 %

Total noninterest expenses 97,511 88,689 89,666 275,866 9.9 %

Income before income taxes 50,794 45,383 34,552 130,729 11.9 %

Income tax expense 9,317 7,990 5,924 23,231 16.6 %

Net income $ 41,477 $ 37,393 $ 28,628 $ 107,498 10.9 %



ADDITIONAL DATA

Net earnings per share - basic $ 0.43 $ 0.38 $ 0.29 $ 1.10

Net earnings per share - diluted $ 0.42 $ 0.38 $ 0.29 $ 1.10

Dividends declared per share $ 0.23 $ 0.23 $ 0.23 $ 0.69



Return on average assets 1.04 % 0.96 % 0.79 % 0.93 %

Return on average shareholders' equity 7.40 % 6.88 % 5.21 % 6.50 %



Interest income $ 126,070 $ 129,360 $ 139,504 $ 394,934 (2.5) %

Tax equivalent adjustment 1,628 1,664 1,624 4,916 (2.2) %

Interest income - tax equivalent 127,698 131,024 141,128 399,850 (2.5) %

Interest expense 13,890 17,784 25,222 56,896 (21.9) %

Net interest income - tax equivalent $ 113,808 $ 113,240 $ 115,906 $ 342,954 0.5 %



Net interest margin 3.32 % 3.38 % 3.71 % 3.46 %

Net interest margin (fully tax equivalent)^ (2) 3.36 % 3.44 % 3.77 % 3.52 %



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



(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.

(2) 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 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 losses 114,096 116,523 115,776 107,426 453,821



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



(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.

(2) 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 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)



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

2020 2020 2020 2019 2019 Linked Qtr.Comp Qtr.

ASSETS

Cash and due from banks $207,128 $283,639 $261,892 $200,691 $242,482 (27.0) % (14.6) %

Interest-bearing deposits with other banks 38,806 38,845 71,071 56,948 39,669 (0.1) % (2.2) %

Investment securities available-for-sale 3,004,963 2,897,413 2,908,688 2,852,084 2,850,502 3.7 % 5.4 %

Investment securities held-to-maturity 118,072 127,347 136,744 142,862 148,778 (7.3) % (20.6) %

Other investments 118,292 132,366 143,581 125,020 124,965 (10.6) % (5.3) %

Loans held for sale 69,008 43,950 27,334 13,680 23,528 57.0 % 193.3 %

Loans and leases

Commercial and industrial 3,292,313 3,322,374 2,477,773 2,465,877 2,470,017 (0.9) % 33.3 %

Lease financing 74,742 80,087 82,602 88,364 92,616 (6.7) % (19.3) %

Construction real estate 575,648 506,085 500,311 493,182 515,960 13.7 % 11.6 %

Commercial real estate 4,347,125 4,343,702 4,278,257 4,194,651 4,015,908 0.1 % 8.2 %

Residential real estate 1,027,702 1,043,745 1,061,792 1,055,949 1,055,007 (1.5) % (2.6) %

Home equity 754,743 764,171 781,243 771,869 776,885 (1.2) % (2.9) %

Installment 84,629 79,150 80,085 82,589 88,275 6.9 % (4.1) %

Credit card 43,907 42,397 45,756 49,184 49,010 3.6 % (10.4) %

Total loans 10,200,809 10,181,711 9,307,819 9,201,665 9,063,678 0.2 % 12.5 %

Less:

Allowance for credit losses ^(1) 168,544 158,661 143,885 57,650 56,552 6.2 % 198.0 %

Net loans 10,032,265 10,023,050 9,163,934 9,144,015 9,007,126 0.1 % 11.4 %

Premises and equipment 209,474 211,164 212,787 214,506 213,681 (0.8) % (2.0) %

Goodwill 937,771 937,771 937,771 937,771 937,689 0.0 % 0.0 %

Other intangibles 67,419 70,325 73,258 76,201 79,506 (4.1) % (15.2) %

Accrued interest and other assets 1,122,449 1,105,020 1,120,507 747,847 812,519 1.6 % 38.1 %

Total Assets $15,925,647$15,870,890$15,057,567$14,511,625$14,480,4450.3 % 10.0 %



LIABILITIES

Deposits

Interest-bearing demand $2,632,467 $2,657,841 $2,498,109 $2,364,881 $2,316,301 (1.0) % 13.6 %

Savings 3,446,678 3,287,314 2,978,250 2,960,979 2,924,200 4.8 % 17.9 %

Time 1,935,392 2,241,212 2,435,858 2,240,441 2,308,617 (13.6) % (16.2) %

Total interest-bearing deposits 8,014,537 8,186,367 7,912,217 7,566,301 7,549,118 (2.1) % 6.2 %

Noninterest-bearing 3,552,893 3,515,048 2,723,341 2,643,928 2,534,739 1.1 % 40.2 %

Total deposits 11,567,430 11,701,415 10,635,558 10,210,229 10,083,857 (1.1) % 14.7 %

Federal funds purchased and securities sold

under agreements to repurchase 247,658 154,347 215,824 165,181 85,286 60.5 % 190.4 %

FHLB short-term borrowings 0 0 1,181,900 1,151,000 1,128,900 N/M (100.0)%

Total short-term borrowings 247,658 154,347 1,397,724 1,316,181 1,214,186 60.5 % (79.6) %

Long-term debt 1,341,164 1,285,767 325,566 414,376 498,778 4.3 % 168.9 %

Total borrowed funds 1,588,822 1,440,114 1,723,290 1,730,557 1,712,964 10.3 % (7.2) %

Accrued interest and other liabilities 521,580 508,342 519,336 323,134 422,311 2.6 % 23.5 %

Total Liabilities 13,677,832 13,649,871 12,878,184 12,263,920 12,219,132 0.2 % 11.9 %



SHAREHOLDERS' EQUITY

Common stock 1,637,489 1,635,070 1,633,950 1,640,771 1,639,333 0.1 % (0.1) %

Retained earnings 694,484 675,532 660,653 711,249 685,368 2.8 % 1.3 %

Accumulated other comprehensive income (loss)42,266 36,431 11,788 13,323 15,450 16.0 % 173.6 %

Treasury stock, at cost (126,424) (126,014) (127,008) (117,638) (78,838) 0.3 % 60.4 %

Total Shareholders' Equity 2,247,815 2,221,019 2,179,383 2,247,705 2,261,313 1.2 % (0.6) %

Total Liabilities and Shareholders' Equity $15,925,647$15,870,890$15,057,567$14,511,625$14,480,4450.3 % 10.0 %



(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

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

2020 2020 2020 2019 2019 2020 2019

ASSETS

Cash and due from banks $233,216 $284,726 $235,696 $221,060 $191,000 $251,147 $182,025

Interest-bearing deposits with other banks 40,277 91,990 39,332 36,672 38,569 57,138 35,525

Investment securities 3,162,832 3,164,243 3,115,723 3,102,867 3,290,666 3,147,655 3,351,559

Loans held for sale 45,186 36,592 13,174 21,050 18,197 31,700 12,659

Loans and leases

Commercial and industrial 3,299,259 3,058,677 2,450,893 2,469,810 2,509,782 2,937,601 2,517,681

Lease financing 78,500 81,218 85,782 91,225 94,858 81,821 93,467

Construction real estate 536,870 495,407 501,471 501,892 509,742 511,343 488,002

Commercial real estate 4,364,708 4,381,647 4,209,345 4,102,288 3,925,028 4,318,735 3,841,178

Residential real estate 1,041,250 1,052,996 1,055,456 1,053,707 1,035,975 1,049,869 996,100

Home equity 759,994 772,424 773,082 773,119 781,340 768,469 792,635

Installment 82,016 79,016 81,234 85,515 88,760 80,760 89,927

Credit card 45,609 44,402 50,206 50,616 50,410 46,735 49,255

Total loans 10,208,206 9,965,787 9,207,469 9,128,172 8,995,895 9,795,333 8,868,245

Less:

Allowance for credit losses ^(1) 165,270 155,454 121,126 56,649 61,911 147,349 59,129

Net loans 10,042,936 9,810,333 9,086,343 9,071,523 8,933,984 9,647,984 8,809,116

Premises and equipment 211,454 213,903 215,545 215,171 215,671 213,626 213,540

Goodwill 937,771 937,771 937,771 937,710 899,888 937,771 886,130

Other intangibles 69,169 72,086 75,014 78,190 51,365 72,079 43,019

Accrued interest and other assets 1,099,169 1,098,560 805,824 776,045 681,174 1,001,542 593,042

Total Assets $15,842,010$15,710,204$14,524,422$14,460,288$14,320,514$15,360,642$14,126,615



LIABILITIES

Deposits

Interest-bearing demand $2,668,635 $2,602,917 $2,418,193 $2,373,962 $2,325,405 $2,563,633 $2,310,095

Savings 3,342,514 3,173,274 2,976,518 2,995,395 2,945,076 3,164,753 3,038,620

Time 2,015,933 2,619,038 2,196,080 2,214,174 2,234,227 2,276,064 2,226,548

Total interest-bearing deposits 8,027,082 8,395,229 7,590,791 7,583,531 7,504,708 8,004,450 7,575,263

Noninterest-bearing 3,535,432 3,335,866 2,643,240 2,638,908 2,513,458 3,172,841 2,485,291

Total deposits 11,562,514 11,731,095 10,234,031 10,222,439 10,018,166 11,177,291 10,060,554

Federal funds purchased and securities sold

under agreements to repurchase 150,088 145,291 164,093 206,800 185,156 153,146 138,692

FHLB short-term borrowings 30,868 548,183 1,189,765 952,625 1,112,091 587,566 1,003,745

Total short-term borrowings 180,956 693,474 1,353,858 1,159,425 1,297,247 740,712 1,142,437

Long-term debt 1,338,792 579,345 381,909 454,271 519,736 768,770 545,279

Total borrowed funds 1,519,748 1,272,819 1,735,767 1,613,696 1,816,983 1,509,482 1,687,716

Accrued interest and other liabilities 529,326 520,425 344,891 379,046 275,038 465,116 227,400

Total Liabilities 13,611,588 13,524,339 12,314,689 12,215,181 12,110,187 13,151,889 11,975,670



SHAREHOLDERS' EQUITY

Common stock 1,636,107 1,634,405 1,638,851 1,640,066 1,629,286 1,636,453 1,625,851

Retained earnings 679,980 658,312 660,108 691,236 662,899 666,184 636,613

Accumulated other comprehensive loss 40,697 19,888 31,200 13,986 11,985 30,632 (13,377)

Treasury stock, at cost (126,362) (126,740) (120,426) (100,181) (93,843) (124,516) (98,142)

Total Shareholders' Equity 2,230,422 2,185,865 2,209,733 2,245,107 2,210,327 2,208,753 2,150,945

Total Liabilities and Shareholders' Equity$15,842,010$15,710,204$14,524,422$14,460,288$14,320,514$15,360,642$14,126,615



(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

September 30, 2020 June 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019

Balance Yield Balance Yield Balance Yield Balance Yield Balance Yield

Earning assets

Investments:

Investment securities $3,162,832 2.86%$3,164,243 2.97%$3,290,666 3.21 % $3,147,655 2.96 % $3,351,559 3.31 %

Interest-bearing deposits with other banks40,277 0.31%91,990 0.20%38,569 2.28 % 57,138 0.51 % 35,525 2.40 %

Gross loans ^(1) 10,253,392 4.00%10,002,379 4.25%9,014,092 5.58 % 9,827,033 4.42 % 8,880,904 5.66 %

Total earning assets 13,456,501 3.72%13,258,612 3.91%12,343,327 4.94 % 13,031,826 4.05 % 12,267,988 5.01 %



Nonearning assets

Allowance for credit losses (165,270) (155,454) (61,911) (147,349) (59,129)

Cash and due from banks 233,216 284,726 191,000 251,147 182,025

Accrued interest and other assets 2,317,563 2,322,320 1,848,098 2,225,018 1,735,731

Total assets $15,842,010 $15,710,204 $14,320,514 $15,360,642 $14,126,615



Interest-bearing liabilities

Deposits:

Interest-bearing demand $2,668,635 0.08%$2,602,917 0.11%$2,325,405 0.56 % $2,563,633 0.21 % $2,310,095 0.55 %

Savings 3,342,514 0.14%3,173,274 0.17%2,945,076 0.69 % 3,164,753 0.25 % 3,038,620 0.74 %

Time 2,015,933 1.20%2,619,038 1.49%2,234,227 2.09 % 2,276,064 1.54 % 2,226,548 2.02 %

Total interest-bearing deposits 8,027,082 0.39%8,395,229 0.56%7,504,708 1.07 % 8,004,450 0.60 % 7,575,263 1.06 %

Borrowed funds

Short-term borrowings 180,956 0.11%693,474 0.74%1,297,247 2.20 % 740,712 1.16 % 1,142,437 2.32 %

Long-term debt 1,338,792 1.76%579,345 3.29%519,736 3.63 % 768,770 2.52 % 545,279 3.62 %

Total borrowed funds 1,519,748 1.57%1,272,819 1.90%1,816,983 2.61 % 1,509,482 1.85 % 1,687,716 2.74 %

Total interest-bearing liabilities 9,546,830 0.58%9,668,048 0.74%9,321,691 1.37 % 9,513,932 0.80 % 9,262,979 1.37 %



Noninterest-bearing liabilities

Noninterest-bearing demand deposits 3,535,432 3,335,866 2,513,458 3,172,841 2,485,291

Other liabilities 529,326 520,425 275,038 465,116 227,400

Shareholders' equity 2,230,422 2,185,865 2,210,327 2,208,753 2,150,945

Total liabilities & shareholders' equity $15,842,010 $15,710,204 $14,320,514 $15,360,642 $14,126,615



Net interest income $112,180 $111,576 $121,535 $338,038 $365,352

Net interest spread 3.14% 3.17% 3.57 % 3.25 % 3.64 %

Net interest margin 3.32% 3.38% 3.91 % 3.46 % 3.98 %



Tax equivalent adjustment 0.04% 0.06% 0.05 % 0.06 % 0.05 %

Net interest margin (fully tax equivalent) 3.36% 3.44% 3.96 % 3.52 % 4.03 %





^(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 $(861) $238 $(623) $(2,926) $(921)$(3,847) $(8,771) $(4,521)$(13,292)

Interest-bearing deposits with other banks23 (39) (16) (192) 1 (191) (501) 83 (418)

Gross loans ^(2) (6,273) 3,622 (2,651) (36,016) 12,479 (23,537) (82,566) 31,283 (51,283)

Total earning assets (7,111) 3,821 (3,290) (39,134) 11,559 (27,575) (91,838) 26,845 (64,993)



Interest-bearing liabilities

Total interest-bearing deposits $(3,593)$(272)$(3,865)$(12,778)$513 $(12,265)$(25,934)$1,930 $(24,004)

Borrowed funds

Short-term borrowings (1,081) (142) (1,223) (6,833) (315) (7,148) (9,915) (3,478) (13,393)

Long-term debt (2,211) 3,405 1,194 (2,449) 3,642 1,193 (4,492) 4,210 (282)

Total borrowed funds (3,292) 3,263 (29) (9,282) 3,327 (5,955) (14,407) 732 (13,675)

Total interest-bearing liabilities (6,885) 2,991 (3,894) (22,060) 3,840 (18,220) (40,341) 2,662 (37,679)

Net interest income ^(1) $(226) $830 $604 $(17,074)$7,719$(9,355) $(51,497)$24,183 $(27,314)





^(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)

Nine months ended

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

2020 2020 2020 2019 2019 2020 2019

ALLOWANCE FOR CREDIT LOSS ACTIVITY

Balance at beginning of period $158,661 $143,885 $57,650 $56,552 $61,549 $57,650 $56,542

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

Provision for credit losses 15,299 17,859 23,880 4,629 5,228 57,038 25,969

Gross charge-offs

Commercial and industrial 1,467 1,282 1,091 2,919 9,556 3,840 23,757

Lease financing 852 0 0 62 0 852 100

Construction real estate 0 0 0 0 0 0 0

Commercial real estate 3,789 2,037 4 1,854 535 5,830 1,835

Residential real estate 22 148 115 167 278 285 510

Home equity 460 428 267 807 627 1,155 1,784

Installment 59 7 61 31 65 127 192

Credit card 171 234 311 319 598 716 1,228

Total gross charge-offs 6,820 4,136 1,849 6,159 11,659 12,805 29,406

Recoveries

Commercial and industrial 265 275 2,000 1,796 556 2,540 1,087

Lease financing 6 0 0 0 0 6 0

Construction real estate 0 14 0 0 0 14 68

Commercial real estate 760 424 234 439 347 1,418 674

Residential real estate 91 93 52 72 64 236 201

Home equity 209 156 339 243 335 704 1,092

Installment 35 27 31 49 93 93 202

Credit card 38 64 43 29 39 145 123

Total recoveries 1,404 1,053 2,699 2,628 1,434 5,156 3,447

Total net charge-offs 5,416 3,083 (850) 3,531 10,225 7,649 25,959

Ending allowance for credit losses $168,544 $158,661 $143,885 $57,650 $56,552 $168,544 $56,552



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

Commercial and industrial 0.14 %0.13 %(0.15) %0.18 %1.42 %0.06 %1.20 %

Lease financing 4.29 %0.00 %0.00 %0.27 %0.00 %1.38 %0.14 %

Construction real estate 0.00 %(0.01) %0.00 %0.00 %0.00 %0.00 %(0.02) %

Commercial real estate 0.28 %0.15 %(0.02) %0.14 %0.02 %0.14 %0.04 %

Residential real estate (0.03) %0.02 %0.02 %0.04 %0.08 %0.01 %0.04 %

Home equity 0.13 %0.14 %(0.04) %0.29 %0.15 %0.08 %0.12 %

Installment 0.12 %(0.10) %0.15 %(0.08) %(0.13) %0.06 %(0.01) %

Credit card 1.16 %1.54 %2.15 %2.27 %4.40 %1.63 %3.00 %

Total net charge-offs 0.21 %0.12 %(0.04) %0.15 %0.45 %0.10 %0.39 %



COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS

Nonaccrual loans ^(1)

Commercial and industrial $34,686 $33,906 $21,126 $24,346 $28,358 $34,686 $28,358

Lease financing 1,092 1,353 222 223 284 1,092 284

Construction real estate 0 0 0 0 5 0 5

Commercial real estate 24,521 14,002 10,050 7,295 14,889 24,521 14,889

Residential real estate 12,104 12,813 11,163 10,892 11,655 12,104 11,655

Home equity 5,374 5,604 5,821 5,242 5,427 5,374 5,427

Installment 153 201 145 167 75 153 75

Nonaccrual loans 77,930 67,879 48,527 48,165 60,693 77,930 60,693

Accruing troubled debt restructurings (TDRs) 7,759 8,377 22,206 11,435 18,450 7,759 18,450

Total nonperforming loans 85,689 76,256 70,733 59,600 79,143 85,689 79,143

Other real estate owned (OREO) 1,643 1,872 1,467 2,033 1,613 1,643 1,613

Total nonperforming assets 87,332 78,128 72,200 61,633 80,756 87,332 80,756

Accruing loans past due 90 days or more 79 124 120 201 287 79 287

Total underperforming assets $87,411 $78,252 $72,320 $61,834 $81,043 $87,411 $81,043

Total classified assets $134,002 $125,543 $124,510 $89,250 $132,500 $134,002 $132,500



CREDIT QUALITY RATIOS

Allowance for credit losses to

Nonaccrual loans 216.28 %233.74 %296.51 %119.69 %93.18 %216.28 %93.18 %

Nonperforming loans 196.69 %208.06 %203.42 %96.73 %71.46 %196.69 %71.46 %

Total ending loans 1.65 %1.56 %1.55 %0.63 %0.62 %1.65 %0.62 %

Nonperforming loans to total loans 0.84 %0.75 %0.76 %0.65 %0.87 %0.84 %0.87 %

Nonperforming assets to

Ending loans, plus OREO 0.86 %0.77 %0.78 %0.67 %0.89 %0.86 %0.89 %

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

Nonperforming assets, excluding accruing TDRs to

Ending loans, plus OREO 0.78 %0.68 %0.54 %0.55 %0.69 %0.78 %0.69 %

Total assets 0.50 %0.44 %0.33 %0.35 %0.43 %0.50 %0.43 %

Classified assets to total assets 0.84 %0.79 %0.83 %0.62 %0.92 %0.84 %0.92 %



(1) Nonaccrual loans include nonaccrual TDRs of $29.3 million, $32.7 million, $18.4 million, $18.5 million, and $21.5 million, as of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.

FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands, except per share data)

(Unaudited)

Nine months ended,

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

2020 2020 2020 2019 2019 2020 2019

PER COMMON SHARE

Market Price

High $15.15 $16.38 $25.52 $26.04 $25.49 $25.52 $28.56

Low $11.40 $11.52 $12.67 $23.24 $22.37 $11.40 $22.16

Close $12.01 $13.89 $14.91 $25.44 $24.48 $12.01 $24.48



Average shares outstanding - basic 97,247,080 97,220,748 97,736,690 98,684,706 98,517,025 97,400,942 98,177,802

Average shares outstanding - diluted 98,008,733 97,988,600 98,356,214 99,232,167 99,077,723 98,117,463 98,723,173

Ending shares outstanding 97,999,763 98,018,858 97,968,958 98,490,998 100,094,819 97,999,763 100,094,819



Total shareholders' equity $2,247,815 $2,221,019 $2,179,383 $2,247,705 $2,261,313 $2,247,815 $2,261,313



REGULATORY CAPITAL Preliminary Preliminary

Common equity tier 1 capital $1,293,716 $1,267,609 $1,243,152 $1,245,746 $1,253,803 $1,293,716 $1,253,803

Common equity tier 1 capital ratio 11.63 %11.49 %11.27 %11.30 %11.52 %11.63 %11.52 %

Tier 1 capital $1,336,497 $1,310,276 $1,285,705 $1,288,185 $1,296,399 $1,336,497 $1,296,399

Tier 1 ratio 12.02 %11.87 %11.66 %11.69 %11.91 %12.02 %11.91 %

Total capital $1,708,817 $1,676,532 $1,493,100 $1,475,813 $1,482,708 $1,708,817 $1,482,708

Total capital ratio 15.37 %15.19 %13.54 %13.39 %13.62 %15.37 %13.62 %

Total capital in excess of minimum requirement $541,263 $517,902 $335,229 $318,315 $339,935 $541,263 $339,935

Total risk-weighted assets $11,119,560 $11,034,570 $11,027,347 $11,023,795 $10,883,554 $11,119,560 $10,883,554

Leverage ratio 9.55 %8.98 %9.49 %9.58 %9.75 %9.55 %9.75 %



OTHER CAPITAL RATIOS

Ending shareholders' equity to ending assets 14.11 %13.99 %14.47 %15.49 %15.62 %14.11 %15.62 %

Ending tangible shareholders' equity to ending tangible assets 8.25 %8.09 %8.25 %9.07 %9.17 %8.25 %9.17 %

Average shareholders' equity to average assets 14.08 %13.91 %15.21 %15.53 %15.43 %14.38 %15.23 %

Average tangible shareholders' equity to average tangible assets8.18 %7.94 %8.79 %9.07 %9.35 %8.29 %9.19 %



REPURCHASE PROGRAM ^(1)

Shares repurchased 0 0 880,000 1,609,778 1,143,494 880,000 1,143,494

Average share repurchase price N/A N/A $18.96 $24.13 $23.94 $18.96 $23.94

Total cost of shares repurchased N/A N/A $16,686 $38,846 $27,372 $16,686 $27,372



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



N/A = Not applicable

View original content: http://www.prnewswire.com/news-releases/first-financial-bancorp-announces-third-quarter-2020-financial-results-301158359.html

SOURCE First Financial Bancorp.