First Financial Bancorp Announces Second Quarter 2024 Financial Results and Quarterly Dividend Increase

• Earnings per diluted share of $0.64; $0.65 on an adjusted⁽¹⁾ basis
• Return on average assets of 1.38%; 1.40% on an adjusted⁽¹⁾ basis
• Net interest margin on FTE basis⁽¹⁾ of 4.10%
• Record fee income of $61.5 million
• Loan growth of $316.1 million; 11.3% on an annualized basis
• Average deposit growth of $351.1 million; 10.6% on an annualized basis
• Net charge-offs 0.15% of total loans; 23 bp decline from linked quarter
• Board of Directors approved quarterly dividend increase to $0.24

CINCINNATI , July 25, 2024 /PRNewswire/ -- First Financial Bancorp. (NASDAQ:FFBC) ("First Financial" or the "Company") announced financial results for the three and six months ended June 30, 2024. 

For the three months ended June 30, 2024, the Company reported net income of $60.8 million, or $0.64 per diluted common share.  These results compare to net income of $50.7 million, or $0.53 per diluted common share, for the first quarter of 2024.  For the six months ended June 30, 2024, First Financial had earnings per diluted share of $1.17 compared to $1.43 for the same period in 2023.

Return on average assets for the second quarter of 2024 was 1.38% while return on average tangible common equity was 20.57%⁽¹⁾.  These compare to return on average assets of 1.18% and return on average tangible common equity of 17.35%⁽¹⁾ in the first quarter of 2024.

Second quarter 2024 highlights include:

• Net interest margin of 4.06%, or 4.10% on a fully tax-equivalent basis⁽¹⁾
  • Unchanged from first quarter, exceeding expectations
  • 14 bp increase in earning asset yields driven by 10 bp increase in loan yields and 22 bp increase in yield on the investment securities portfolio
  • Cost of deposits increased 14 bp during second quarter; pace of increase moderated compared to 22 bp increase in first quarter

• Record noninterest income of $61.5 million, or $61.6 million as adjusted⁽¹⁾
  • Foreign exchange income increased $6.4 million, or 60.9% from first quarter
  • Strong leasing business income of $16.8 million; 15.3% increase from first quarter
  • Record wealth management income; 7.4% increase from linked quarter
  • Double digit percentage growth from linked quarter in mortgage banking and bankcard income

• Noninterest expenses of $123.6 million, or $122.5 million as adjusted⁽¹⁾; 1.2% increase from linked quarter
  • Increase driven by variable compensation tied to fee income
  • Second quarter adjustments⁽¹⁾ include $0.4 million of efficiency related costs and $0.8 million of other costs such as acquisition, severance and branch consolidation costs
  • Efficiency ratio of 57.5%; 57.0% as adjusted⁽¹⁾

• Solid loan growth during the quarter
  • Loan balances increased $316.1 million compared to the linked quarter; 11.3% annualized growth
  • Broad-based growth driven by C&I, Agile and Summit

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⁽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.

• Strong average deposit growth during the quarter
  • Average deposits increased $351.1 million, or 10.6% on an annualized basis
  • Second quarter included approximately $100 million of seasonal public fund increases
  • Growth in money market accounts, retail CDs and brokered CDs offset modest declines in noninterest bearing checking and savings balances

• Total Allowance for Credit Losses of $172.6 million; Total quarterly provision expense of $16.4 million
  • Loans and leases - ACL of $156.2 million; ratio to total loans of 1.36% increased 7 bps from first quarter
  • Unfunded Commitments - ACL of $16.4 million
  • Provision expense driven by loan growth and downward credit migration; Classified assets 1.07% of total assets
  • Annualized net charge-offs were 15 bps of total loans; 23 bps decline from linked quarter

• Capital ratios stable and strong 
  • Total capital ratio increased 16 bps to 14.47%
  • Tier 1 common equity increased 11 bps to 11.78%
  • Tangible common equity of 7.23%⁽¹⁾; 9.13%⁽¹⁾ excluding impact from AOCI
  • Tangible book value per share of $12.94⁽¹⁾; 3.5% increase from linked quarter

Additionally, the board of directors approved a quarterly dividend of $0.24 per common share for the next regularly scheduled dividend, payable on September 16, 2024 to shareholders of record as of September 2, 2024.

Archie Brown, President and CEO, commented on the quarter, "We had an outstanding quarter.  Adjusted⁽¹⁾ earnings per share were $0.65 per share, which resulted in an adjusted⁽¹⁾ return on assets of 1.40% and an adjusted⁽¹⁾ return on tangible common equity of 20.88%.  Loan growth was exceptionally strong again this quarter with balances increasing by 11% on an annualized basis, and was a significant driver to the increase to net interest income.  Growth was broad-based and was led by Commercial Banking.  Similarly, average deposits grew approximately 11% for the period, with interest bearing deposits and a seasonal increase in public fund balances driving the increase.  Our 4.10% tax equivalent net interest margin was unchanged from the first quarter and remains at or near the top of our peer group."

Mr. Brown continued, "Total adjusted⁽¹⁾ revenue increased $14.4 million, or 7% compared to the linked quarter.  Additionally, we posted record adjusted⁽¹⁾ noninterest income of $61.6 million.  Growth in fee income was broad-based for the period with foreign exchange revenue growing more than 60% from the linked quarter.  Leasing business income, mortgage banking and bankcard income all increased by double digit percentages and wealth management income posted another record quarter.  Adjusted⁽¹⁾ expenses increased by 1.2% compared to the first quarter.  The increase included a full quarter of Agile expenses, the impact of annual salary adjustments that occurred late in the first quarter and variable compensation tied to our record fee income.  Through our workforce efficiency initiative, we have eliminated 90 full-time positions to date, and this work will continue through the remainder of the year."

Mr. Brown commented on asset quality and the ACL, "I am pleased with the 23 basis point decline in net charge-offs to 15 basis points, which marks the third consecutive quarter that charge-offs have declined.  We did experience some downward credit migration during the period, however this was not concentrated in any particular loan type, and nonperforming loans as a percentage of total assets was relatively flat compared to the prior quarter.  Our ACL increased to 1.36% of total loans, and based on our outlook for loan growth and credit quality, we would expect provision to decline to levels approximating the first quarter in the coming periods."

Mr. Brown concluded, "We are pleased to announce that our Board of Directors approved a $0.01 increase in the common dividend to $0.24.  The 4.3% dividend increase results in a dividend payout ratio within our target range of 35% - 40% of net income and increases our already attractive yield.  I am encouraged with our operating performance through the first half of 2024 and look forward to continued success for the full year."

Full detail of the Company's second quarter 2024 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, July 26, 2024 at 8:30 a.m. Eastern Time.  Members of the public who would like to listen to the conference call should dial (888) 550-5723 (U.S. toll free) or (646) 960-0471 (U.S. local), access code 5048068.  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 (800) 770-2030 (U.S. toll free), (609) 800-9099 (U.S. toll), access code 5048068.  The recording will be available until August 9, 2024.  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 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 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 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 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, 2023, 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 June 30, 2024, the Company had $18.2 billion in assets, $11.5 billion in loans, $13.7 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 $3.6 billion in assets under management as of June 30, 2024.  The Company operated 131 full service banking centers as of June 30, 2024, 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.

 

 

 

 

 

 

 

 

 

 

 

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SOURCE First Financial Bancorp.