First Financial Bancorp Announces Second Quarter 2018 Results

 

Merger Completed Creating High Performing Midwestern Community Bank

 

Cincinnati, Ohio - July 19, 2018 - First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the second quarter of 2018.

 

For the three months ended June 30, 2018, the Company reported net income of $36.4 million, or $0.37 per diluted common share. These results compare to net income of $30.5 million, or $0.49 per diluted common share, for the first quarter of 2018 and $22.7 million, or $0.37 per diluted common share, for the second quarter of 2017. During the quarter the Company incurred $24.3 million in merger related expenses, which reduced earnings per diluted common share by $0.20. For the six months ended June 30, 2018, First Financial had earnings per diluted common share of $0.83 compared to $0.76 for the same period in 2017.

 

Return on average assets for the second quarter of 2018 was 1.05% while return on average tangible common equity was 13.71%. These compare to a return on average assets of 1.40% and return on average tangible common equity of 17.17% in the first quarter of 2018 and a return on average assets of 1.06% and a return on average tangible common equity of 13.42% in the second quarter of 2017. On an adjusted(1) basis, second quarter return on average assets was 1.60% and return on tangible common equity was 20.94%.

 

Archie Brown, President and Chief Executive Officer, commented, “We are very pleased with our performance in the second quarter, which reflects our emerging potential as a combined company. After taking into account adjustments(1) for merger related items, our 111th consecutive quarter of profitability was highlighted by strong earnings, in addition to top quartile return on assets and return on tangible common equity."

 

Second quarter 2018 highlights include:

After adjustments (1) for merger related items:

  • Net income of $0.57 per diluted common share
  • 1.60% return on average assets
  • 20.94% return on average tangible common equity

Net interest income of $124.0 million

  • Net interest margin increased 30 basis points from the linked quarter to 4.10% on a GAAP basis; 4.15% on a fully tax equivalent basis(1)

Noninterest expenses of $102.8 million, or $78.8 million as adjusted(1)

  •    Efficiency ratio of 67.50% for the second quarter; 51.66% as adjusted(1)

• Stable credit performance with provision expense of $3.7 million; annualized net charge-offs of 18 basis points as a percentage of average loans

 

Archie Brown further commented, "The second quarter was also highlighted by margin expansion, improved adjusted efficiency and stable credit quality. Loan growth fell short of our initial expectations as a result of lower loan originations combined with higher prepayment activity, however we anticipate our loan growth trends will gradually improve in the second half of this year."

 

Mr. Brown concluded, "We believe we are well positioned to capitalize on the earnings momentum generated during the second quarter and close the year on a strong note. With the majority of merger-related activity behind us, our focus is on maximizing remaining synergies and implementing strategic initiatives that produce top quartile returns, while continuing to deliver the value and service that our clients, communities and shareholders have come to expect."

 

(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 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.