Bank CEO outlines path to growth

March 21, 2011

JOURNAL NEWS: By Chelsey Levingston, Staff Writer 1:43 AM Sunday, March 20, 2011
HAMILTON — First Financial Bancorp may have recently committed long-term tokeep its corporate headquarters in Cincinnati, but it remains the largest bank by deposits in Butler County.


Its main flagship, First Financial Bank, remains headquartered in Hamilton. First Financial, originally First National of Hamilton, was founded in Hamilton almost 150 years ago. Today it has more than 300 employees in Butler County, according to the bank.


Steering the ship is Claude Davis, president and chief executive officer. He is hopeful 2011 will be the year the economy turns for the better. In the last quarter of last year, First Financial had its first increase in loan originations in about a year and a half, Davis said.
What is your company best known for?Davis: One is our longevity as a company that’s been around since 1863. We are the eighth oldest national bank in the country. I think we’re also known for our community focus and our client service focus. Our clients come first in everything we do.


What are the major goals the company is currently working on, and howis the company working to achieve them?Davis: The first would be that we provide a superior return to our shareholders. Second would be is that our clients view us as the preferred financial institution — and that would be both our commercial clients, as well as our individual clients. And then third, that our associates view us as an employer of choice.


What are the biggest challenges facing the business today and why?
Davis: One is the regulatory environment post the economic crisis. Banks were in many ways targeted as one of the causes for the economic crisis and as a result, there’s been a lot of new legislation that has been enacted that has been layered on top of a lot of existing legislation.... The recent legislation was called the Dodd-Frank Bill that was, some people call it bank reform, and it covers about 2,300 pages of actual new law. And if you follow past practice, for every page of new legislation, there’s typically 10 pages of new regulation that results from that legislation. 
So we don’t know what it will be yet, but it could result in 23,000 new pages of regulation on the banking industry — which creates higher costs and more complexity. And we don’t think it serves consumers well in terms of how it was done, because with higher costs in the banking industry, we think it risks increasing costs to consumers.... Some of the legislation we actually worry will force some of ourlower-income clients actually out of the banking system because of costs. Now we’re trying to avoid that ... but you know that’s a possibility.


What have been keys to the company’s success over its history?
Davis: Our business is about relationships, and you don’t and can’t have relationships without people. And so the associates that we have that serve our clients, really I would say, it begins and ends with them.


What do you feel your company does better than its competitors?
Davis: We are a $6.5-billion institution, so that is large for a community bank. It’s that combination of being large enough to offer the same products and services as our larger competitors, but doing it by being a community-focused organization.

Where do you see the company in five years?
Davis: Over the next five years, we’ll provide a superior return to shareholders, our clients will continue to view us as their preferred financial institution and associates will continue to view us an employer of choice. It sounds trite, but it’s true. That’s really what we focus on. I don’t care whether we’re the same size we are today or whether we’re double where we are today. If we’ve done those three things, then wewill have succeeded.


How is the company committed to the community?
Davis: The first way that a bank can give back to the community is to consistently provide the banking services that we need to provide. Often times we don’t talk about it that way, but you can’t be a community bank and when times get tough, you stop making mortgage loans or making small businesses loans.... We continuously encourage our associates, from me to our newest employee, to participate in whatever community activities that they feel appropriate... Then third is through direct dollar commitments. We give, we don’t disclose exactly how much, but several hundred thousands of dollars a year to local efforts.

What is something the company wishes it could do better?
Davis: On a tangible level we want to continue to expand our electronic banking alternatives.... We believe we have a good electronic banking platform, but we want it to be better. That is everything from cell phone apps to how we interact with out clients through social media outlets.

What’s the biggest lesson the company learned from the recent recession and how is it being applied?
Davis: Even the worst-case scenario can happen, and that you need a plan for that. And the way you plan is to do two important things. One is to stay true to your plan and your strategy and second is to always be financially strong.


How could First Financial grow next?
Davis: We grow one client at a time and we do it in the three areas of our business — commercial, retail or individual consumer banking, and small-business banking and in our wealth management area... .We might do additional acquisitions and we might not, and that would be the other way we would grow.


Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.

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