First Financial Bancorp Announces First Quarter 2023 Financial Results

• Earnings per diluted share of $0.74; $0.76 on an adjusted(1) basis, 65% increase YoY
• Return on average assets of 1.69%; 1.72% on an adjusted(1) basis
• Record quarterly revenue of $214.9 million
• Net interest margin on FTE basis⁽¹⁾ of 4.55%; 8 bp increase from linked quarter
• Loan growth of $134.4 million; 5.3% on an annualized basis
• Record adjusted(1) fee income driven by foreign exchange, leasing, and wealth management
• Stable credit quality with de minimis net charge-offs
• Regulatory capital ratios increased and remain in excess of targets

CINCINNATI, April 20, 2023 /PRNewswire/ -- First Financial Bancorp. (NASDAQ:FFBC) ("First Financial" or the "Company") announced financial results for the three months ended March 31, 2023.

For the three months ended March 31, 2023, the Company reported net income of $70.4 million, or $0.74 per diluted common share. These results compare to net income of $69.1 million, or $0.73 per diluted common share, for the fourth quarter of 2022. 

Return on average assets for the first quarter of 2023 was 1.69% while return on average tangible common equity was 29.02%⁽¹⁾. These compare to return on average assets of 1.63% and return on average tangible common equity of 29.93%⁽¹⁾ in the fourth quarter of 2022. 

First quarter 2023 highlights include:

• Net interest margin of 4.51%, or 4.55% on a fully tax-equivalent basis⁽¹⁾
• 8 bp increase to 4.55% from 4.47% in the fourth quarter due to higher asset yields
• Higher loan balances and 62 bp increase in loan yields offset 49 bp increase in cost of deposits
• Average deposit balances increased $179.8 million with growth in brokered and retail CDs offsetting
  
  declines in public funds and business balances
• Noninterest income of $55.5 million, or $55.4 million as adjusted⁽¹⁾
• Record leasing business income of $13.7 million; 22.8% increase from fourth quarter
• Foreign exchange income of $16.9 million reflected continued strong demand
• Record trust and wealth management fees of $6.3 million; 12.1% increase from fourth quarter
• Adjusted⁽¹⁾ for $0.1 million gain on investment securities 
• Noninterest expenses of $116.7 million, or $114.6 million as adjusted⁽¹⁾
• Adjustments⁽¹⁾ include $0.5 million of contract termination costs as well as $1.6 million of other costs
  
  not expected to recur such as acquisition, severance and branch consolidation costs
• $7.7 million decline from fourth quarter driven by lower professional services, tax credit investment
  
  write-downs, charitable contributions, and incentive costs
• Efficiency ratio of 54.3%; 53.3% as adjusted⁽¹⁾

⁽¹⁾ Non-GAAP measure. For details on the calculation of these non-GAAP financial measures and a reconciliation to the 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.

⁽²⁾ The consolidated balance sheets at December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022 include assets acquired and liabilities assumed in the Summit Financial transaction. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. These fair value measurements were considered final as of December 31, 2022.

• Moderate loan growth during the quarter
• Loan balances increased $134.4 million compared to the fourth quarter
• Growth of 5.3% on an annualized basis
• Residential mortgage, C&I, and equipment leases drove quarterly growth
• Total Allowance for Credit Losses of $161.8 million; Total quarterly provision expense of $10.5 million
• Loans and leases - ACL of $141.6 million; increased 7 bps to 1.36% of total loans
• Unfunded Commitments - ACL of $20.2 million
• Provision expense driven by loan growth, slower prepayment speeds and economic forecasts
• De minimis net charge-offs during the quarter
• Capital ratios remain solid
• Total capital ratio of 13.66%
• Tier 1 common equity increased 17 bps to 11.00%
• Tangible common equity increased 52 bps to 6.47%⁽¹⁾; 8.54%⁽¹⁾ excluding impact from AOCI
• Tangible book value per share of $10.76⁽¹⁾

Mr. Brown, President and CEO, commented on the quarter, "The first quarter was a really strong quarter for First Financial and I am very pleased with our operating performance. The Company achieved record revenue of $215 million. Net income and total revenue increased 70% and 46%, respectively, from the same quarter last year, with both increasing slightly compared to the linked quarter. Our quarterly results were driven by strong net interest income, moderate loan growth, an 8 bp increase in our net interest margin, record leasing business income, another great quarter from Bannockburn and strong performance from our Yellow Cardinal Wealth Division."

Mr. Brown continued, "We continue to manage the significant increase in short term rates effectively, and during the first quarter, the increase in our asset yields exceeded the increase in total funding costs by 4 bps. Average deposit balances increased slightly from the linked quarter as increases in brokered and retail CDs offset outflows in public funds and business deposits, which were primarily seasonal. The majority of these outflows occurred in the first two months of the quarter. The deposit beta from the first quarter of 2022 through the first quarter of 2023 was 21%. From a liquidity standpoint, our loan to deposit ratio was 82%, and we also maintain flexibility through our investment portfolio, 98% of which was classified as available-for-sale as of March 31."

Mr. Brown discussed asset quality, "Credit quality remained stable in the first quarter. Net charge-offs were de minimis and nonperforming assets declined slightly as a percentage of total assets from the linked quarter. Additionally, the ACL increased $8.6 million during the quarter, driven by loan growth, slower prepayments and changes in economic forecasts. As a result, the ACL was 1.36% as a percentage of total loan balances, which was a 7 basis point increase from the coverage ratio at year-end."

Mr. Brown concluded, "We are very pleased with the strengthening of our capital ratios this quarter. Our strong profitability and recent decline in market rates led to a 52-basis point increase in our tangible common equity ratio. In addition, tangible book value per share increased 8% to $10.76. The quarter had its challenges for the industry and there is nearterm uncertainty regarding the economy. We are extremely pleased with our results and how we have managed the challenges to date. We believe we remain well positioned to manage future uncertainty due to our profitability, net interest margin, ample liquidity, and strong levels of capital."

Full detail of the Company's first quarter 2023 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information

First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, April 21, 2023 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (833) 470-1428 (U.S. toll free) or (404) 975-4839 (U.S. local), access code 842558. The number should be dialed five to ten minutes prior to the start of the conference call. A replay of the conference call will be available beginning one hour after the completion of the live call at (866) 813-9403 (U.S. toll free), (929) 458-6194 (U.S. local) and +44 204 525-0658 (all other locations), access code 342184. The recording will be available until May 25, 2023. 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. The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

Press Release and Additional Information on Website

This 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 Measures

This 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 NonGAAP 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 Statements

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 forwardlooking 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 forwardlooking 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 changes in housing prices,
  
  fluctuations in 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
  
  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, 2022, 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 March 31, 2023, the Company had $16.9 billion in assets, $10.4 billion in loans, $12.7 billion in deposits and $2.1 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 $3.3 billion in assets under management as of March 31, 2023. The Company operated 130 full service banking centers as of March 31, 2023, located in Ohio, Indiana, Kentucky and Illinois, 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.

 

 

 

 

 

 

 

 

 

View original content:https://www.prnewswire.com/news-releases/first-financial-bancorp-announces-first-quarter-2023-financial-results-301803569.html

SOURCE First Financial Bancorp.