- Second quarter 2008 net earnings of $0.21 per diluted share
- Continued strong growth in average commercial, commercial real estate,
and construction loans of 14.6 percent from second quarter 2007
- Nonperforming loans, as a percent of total loans, have remained stable
for five consecutive quarters
- Regulatory capital ratios remain strong and significantly exceed
regulatory "well-capitalized" classification
- Second quarter 2008 return on average assets of 0.93 percent and return
on average shareholders' equity of 11.26 percent
CINCINNATI, July 29 /PRNewswire-FirstCall/ -- First Financial Bancorp
(Nasdaq: FFBC) president and chief executive officer, Claude E. Davis,
today announced second quarter 2008 net income of $7.8 million or 21 cents
in diluted earnings per share, compared to $8.2 million or 21 cents in
diluted earnings per share for the second quarter 2007 and $7.3 million or
20 cents in diluted earnings per share in the first quarter 2008. First
Financial also announced year-to-date 2008 net income of $15.1 million or
40 cents in diluted earnings per share, compared to $16.6 million or 43
cents in diluted earnings per share for the same period in 2007.
Davis said, "We continue to manage the company through this difficult
time for the banking sector, and the economy in general, by remaining
focused on credit quality, balance sheet management, and capital. Our
second quarter performance reflects our success in these efforts. First
Financial is well positioned to avoid many of the troublesome areas facing
our industry including liquidity, capital and credit as we have built
quality and seek to preserve it in these key areas."
Return on average assets for the second quarter 2008 was 0.93 percent
compared to 1.00 percent for the second quarter 2007 and 0.89 percent for
the first quarter 2008. Year-to-date return on average assets was 0.91
percent for 2008 compared to 1.02 percent for the same period in 2007.
Return on average shareholders' equity was 11.26 percent for the second
quarter 2008 compared to 11.61 percent for the same period in 2007 and
10.66 percent for the first quarter 2008. Year-to-date return on average
shareholders' equity was 10.96 percent for 2008 compared to 11.78 percent
for the same period in 2007.
Unless otherwise noted, all amounts discussed in the earnings release
are pre-tax except net income and per-share data which are presented
after-tax. Percentage changes are not annualized unless specifically noted.
CREDIT QUALITY
First Financial's credit quality metrics continue to be favorably
impacted by its consistent focus on strong underwriting and the 2005
strategic decision to shift away from certain consumer-based lending. While
the performance of certain real estate and consumer-based lending products
has continued to decline as a result of the broad economic downturn, First
Financial's overall credit quality remains stable. As the composition of
the total loan portfolio migrates from consumer-based lending, the expected
effects on First Financial from such economic conditions, relative to the
industry, should be less severe. Additionally, the mix of the total loan
portfolio has shifted not only in product type, but in the risk profile of
the borrowers due to the improvements in both underwriting and in the
resolution strategies used for problem credits. However, there always
remains the possibility of an unexpected event or a further deterioration
in the economy which could lead to higher credit costs.
Total nonperforming assets have remained relatively consistent over the
past five quarters with the ratio of non-performing assets to total assets
ranging from a low of 51 basis points to a high of 55 basis points. At the
end of the second quarter 2008, total nonperforming assets were $19.1
million, an increase of $1.5 million from the end of the first quarter
2008. Compared to the end of the first quarter 2008, the ratio of
nonperforming loans to total loans decreased 1 basis point to 57 basis
points at the end of the second quarter 2008, and the ratio of
nonperforming assets to period-end loans, plus other real estate owned,
increased 4 basis points to 71 basis points at the end of the second
quarter 2008. Other real estate owned increased $1.4 million during the
second quarter 2008 and was equally spilt between commercial and
residential categories. A number of the properties are under sale contract
and we do not anticipate lengthy holding periods.
Delinquency trends have remained relatively stable over the past five
quarters with total loans 30-89 days past due, at June 30, 2008, of $22.1
million or 0.83 percent of period end loans. Since the end of the second
quarter of 2008, approximately $3.9 million of these delinquencies have
either been paid down or resolved. Management closely monitors these trends
and ratios and considers the current level of delinquent loans consistent
with our expectations of the total loan portfolio's behavior.
First Financial's allowance for loan and lease loss was $29.6 million
at June 30, 2008 compared to $29.7 million at March 31, 2008, and $28.1
million at June 30, 2007. The allowance for loan and lease loss at June 30,
2008, was 2.8 times the second quarter annualized net charge-offs,
consistent with the 2.9 times at March 31, 2008. The allowance for loan and
lease losses to period-end loans ratio was 1.11 percent as of June 30,
2008, compared to the June 30, 2007, and March 31, 2008, ratios of 1.10
percent and 1.14 percent, respectively. Overall credit coverage ratios
remain strong at June 30, 2008, with the allowance for loan and lease
losses as a percent of nonaccrual loans and as a percent of nonperforming
loans at 199.70 percent and 192.50 percent, respectively. The allowance for
loan and lease losses to period-end loans ratio is based on our estimate of
potential losses inherent in the loan portfolio in today's economic
environment. A large percentage of nonperforming assets are secured by real
estate, and this collateral has been appropriately considered in
establishing the allowance for loan and lease losses.
At June 30, 2008, the commercial real estate and real estate
construction loan portfolio totaled $955.7 million, or 35.7 percent of
total loans, including $136.0 million or 5.1 percent of total loans for
commercial real estate construction, and $50.2 million or 1.9 percent of
total loans, for residential construction, land acquisition, and
development. In this challenging environment lenders are closely monitoring
the status of all residential construction and land development projects
and First Financial is no different. At June 30, 2008, First Financial had
one construction and development loan totalling $0.5 million reported as a
nonperforming loan. First Financial believes its internal lending policies,
comprehensive underwriting standards and aggressive monitoring and frequent
communication with borrowers are key to limiting credit exposure from both
the residential construction and land acquisition and development segments
in any particular project.
First Financial continually evaluates the commercial real estate and
real estate construction portfolio for geographic and borrower
concentrations, as well as loan-to-value coverage, and believes its credit
underwriting processes are producing a prudent and acceptable level of
credit exposure.
Shared national credit exposure for First Financial is approximately
$37 million or 1.4 percent of total loans, and is dispersed among 40
credits. These loans were acquired over the past 18 months and have no
single credit exposure greater than $2 million. These loans are held in the
loan portfolio and each has been subjected to the customary commercial loan
underwriting process and is routinely monitored for credit deterioration.
As of the June 30, 2008, the values and reserves for these loans were
deemed appropriate.
Since the second quarter 2007, First Financial has experienced 11.2
percent growth in its total home equity loan portfolio average balances.
While this category of loans has proven problematic for some in our
industry, First Financial believes its underwriting criteria coupled with
the monitoring of a number of metrics including credit scores,
loan-to-value ratios, line size, and usage, provides adequate oversight for
the growth. The origination methods for our home equity lending also keep
both the credit decision and the documentation under the control of First
Financial associates. Our recent spike in credit losses for home equity is
attributable to a few large credits that were originated several years ago,
prior to the standardization of our underwriting guidelines. The remaining
portfolio of loans that have a similar profile have been reviewed and have
been appropriately accounted for in the second quarter. At June 30, 2008,
approximately 98 percent of the outstanding home equity loans had a credit
line size of less than $250 thousand and had an average outstanding balance
of $24 thousand. First Financial maintains a strong pricing discipline for
its home equity loan product and does not sacrifice loan quality for
growth.
In the second quarter 2005, First Financial made the strategic
decisions to discontinue the origination of residential real estate loans
for retention on its balance sheet and to exit indirect installment
lending. As a result, the residential real estate and indirect installment
loan portfolios have declined $215 million and $214 million, respectively,
excluding the impact of the loan sales, since that time. In the first
quarter 2007, First Financial sold the servicing of its remaining
residential real estate portfolio and established an agreement to sell
substantially all of its future originations to a strategic partner. Prior
to this decision, First Financial was not a sub-prime lender, and the
company does not originate sub-prime residential real estate loans in the
current originate-and-sell model.
It is management's belief that the $29.6 million allowance for loan and
lease losses at June 30, 2008, is adequate to absorb probable credit losses
inherent in the portfolio.
Second Quarter 2008 vs. First Quarter 2008
Second quarter 2008 net charge-offs were $2.6 million, an annualized 40
basis points of average loans, consistent with the first quarter 2008 net
charge-offs of $2.6 million, an annualized 40 basis points of average
loans. Both quarters were adversely impacted by a few large home equity
loan charge-offs totalling approximately 7 basis points in the second
quarter 2008 and 8 basis points in the first quarter 2008. Based on our
current knowledge, we believe this two quarter volatility, in terms of
individual loan charge-off size, is unusual and we expect that overall
charge-off levels for home equity should return to historical levels.
Total nonperforming assets at the end of the second quarter 2008 were
$19.1 million, an increase of $1.5 million from the end of the first
quarter 2008. The ratio of nonperforming loans to total loans decreased
from 58 basis points at the end of the first quarter 2008 to 57 basis
points at the end of the second quarter 2008, and the ratio of
nonperforming assets to period-end loans, plus other real estate owned,
increased from 67 basis points at the end of the first quarter 2008 to 71
basis points at the end of the second quarter 2008.
Second Quarter 2008 vs. Second Quarter 2007
Second quarter 2008 net charge-offs were $2.6 million, an annualized 40
basis points of average loans, compared to second quarter 2007 net
charge-offs of $1.4 million, an annualized 23 basis points of average
loans. Approximately $0.5 million or 7 basis points of the increase is due
to the impact of two large home equity loan charge-offs. From an industry
perspective, home equity lending may continue to experience stress, as
borrowers come under continued pressure in the current economic
environment. First Financial's overall credit quality metrics for its home
equity loan portfolio continue to remain stable, as over the past eight
quarters both the home equity net charge-off ratio and ratio of nonaccrual
home equity loans to total home equity loans have consistently been below
50 basis points, when the previously mentioned first quarter 2008 home
equity loan charge-offs are excluded. First Financial has underwritten all
home equity loans held in its portfolio and has not utilized the much
publicized brokerage channel for originations. First Financial continues to
actively monitor its home equity loan portfolio but may experience some
volatility in upcoming quarters.
Total nonperforming assets at the end of the second quarter 2008 were
$19.1 million, an increase of $2.1 million from the end of the second
quarter 2007 primarily due to a higher level of nonaccrual residential
loans and other real estate owned, offset by a decline in both commercial
and commercial real estate loans. The ratio of nonperforming loans to total
loans decreased from 59 basis points at the end of the second quarter 2007
to 57 basis points at the end of the second quarter 2008. The ratio of
nonperforming assets to period-end loans, plus other real estate owned,
increased from 67 basis points at the end of the second quarter 2007 to 71
basis points at the end of the second quarter 2008.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date 2008 net charge-offs were $5.2 million, an annualized 40
basis points of average loans or 32 basis points of average loans excluding
the previously mentioned large home equity loan charge-offs. Year-to-date
2007 net charge-offs were $2.8 million, an annualized 22 basis points of
average loans.
For further details on the quarter-over-quarter and year-to-date
changes in credit quality, please see the attached Credit Quality schedule.
CAPITAL
Consolidated regulatory capital ratios at June 30, 2008, included the
leverage ratio of 8.21 percent, Tier 1 ratio of 9.99 percent, and total
capital ratio of 11.06 percent. All regulatory capital ratios exceeded the
amounts necessary to be classified as "well capitalized," and total
regulatory capital exceeded the "minimum" requirement by approximately
$84.1 million, on a consolidated basis. The tangible capital ratio
decreased from 7.55 percent at March 31, 2008, to 7.18 percent at June 30,
2008, primarily as a result of loan and investment portfolio growth.
First Financial Bank, N.A., the subsidiary bank, regulatory capital
ratios at June 30, 2008 included the leverage ratio of 9.19 percent, Tier 1
ratio of 11.18 percent, and total capital ratio of 12.53 percent.
Forecasted growth in certain earning asset classes is expected to
continue while risk-based capital relief is expected from other balance
sheet strategies under consideration for execution in the third and fourth
quarters including asset securitizations and non-strategic asset sales,
which would likely generate non-recurring gains. First Financial remains
vigilant in the management of its capital adequacy and has evaluated its
proforma capital under certain stress case scenarios. First Financial has
sufficient capital to manage through extreme and extended periods of
stress. It is important to note, however, First Financial does not expect
to experience these extreme levels of stress and remains comfortable with
charge-off estimates of approximately 30 to 40 basis points.
NET INTEREST INCOME AND NET INTEREST MARGIN
Second Quarter 2008 vs. First Quarter 2008
Net interest income on a linked-quarter (second quarter 2008 compared
to first quarter 2008) basis increased from $28.2 million in the first
quarter 2008 to $28.4 million in the second quarter 2008, a $0.2 million or
2.3 percent annualized increase. The increase in net interest income is
primarily due to the growth in the investment portfolio combined with
disciplined pricing on deposits, substantially offsetting the impact on
loan yields from the decline in market interest rates. Linked-quarter net
interest margin decreased 6 basis points, from 3.78 percent to 3.72
percent, reflecting the impact of the 225 basis point reduction in the
federal funds rate during the first half of 2008 and a 3 basis point
negative impact from the increase in earnings assets related to the
investment portfolio. On a tax-equivalent basis, the second quarter 2008
net interest margin was 3.78 percent as compared to 3.85 percent for the
first quarter 2008. The pace and magnitude of the recent changes to the
federal funds target rate has created a more significant impact on the
liability costs for the current reporting period.
Second Quarter 2008 vs. Second Quarter 2007
Net interest income in the second quarter 2008 was $28.4 million
compared to $29.6 million in the second quarter 2007, a decrease of $1.2
million or 4.0 percent. Second quarter 2008 net interest margin of 3.72
percent decreased 25 basis points from 3.97 percent for the second quarter
2007. The decline in net interest income and margin is primarily a result
of actions by the Federal Reserve to address the current economic
conditions, including the consumer mortgage crisis, by lowering the federal
funds rate by 325 basis points over the past twelve months, and the
resulting impact on our asset sensitive balance sheet. Earning asset growth
in the commercial, commercial real estate, and construction loan
portfolios, as well as in the investment securities portfolio, partially
offset the effects of the decline in market interest rates.
On a tax equivalent basis, the second quarter 2008 net interest margin
of 3.78 percent decreased 27 basis points from 4.05 percent for the second
quarter 2007.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date net interest income was $56.7 million in 2008 compared to
$60.0 million in 2007, a $3.3 million or 5.6 percent decrease.
Approximately 5 basis points of the year-to-date 2007 net interest margin
was due to the impact of an accrual of income to convert certain consumer
loans from a cycle-date basis of income recognition to a calendar-month
basis. The year-to-date 2007 adjusted net interest margin, excluding the
impact of this accrual, was a 4.00 percent decrease. The remaining decline
in net interest income and margin is primarily a result of the previously
mentioned decline in market interest rates, partially offset by a slight
increase in overall earning asset levels and the continued mix shift in
their composition. Year-to-date, the cost of the approximate $512 million
of time deposit originations relative to the approximate $589 million in
maturities has been approximately 125 basis points lower, with a reduction
in overall marginal funding costs of approximately 135 basis points, after
accounting for the net runoff of the time deposit portfolio.
Year-to-date net interest margin was 3.75 percent in 2008, compared to
4.00 percent in 2007 when adjusted for the year-to-date impact of the
interest accrual noted earlier. On a tax-equivalent year-to-date basis, net
interest margin was 3.81 percent in 2008 compared to an adjusted 4.08
percent in 2007.
For further details on the quarter-over-quarter and year-to-date
changes in the net interest margin, please see the attached Net Interest
Margin Rate / Volume Analysis.
NONINTEREST INCOME
Second Quarter 2008 vs. First Quarter 2008
On a linked-quarter basis, noninterest income decreased $1.1 million or
7.6 percent. Noninterest income in the first quarter 2008 included a $1.6
million gain associated with the partial redemption of Visa Inc. common
shares. Excluding this item, second quarter 2008 noninterest income
increased $0.5 million or 3.5 percent from the first quarter 2008 primarily
due to increases in service charge income on deposits and bankcard related
activity, offset by both lower gains on the sale of mortgage loans and
lower other income due to valuation adjustments on assets carried at market
value.
Second Quarter 2008 vs. Second Quarter 2007
Second quarter 2008 noninterest income of $13.7 million declined 2.7
percent compared to the second quarter 2007, with increases in wealth
management fees more than offset by the $0.3 million decline in service
charges on deposits and the $0.2 million decrease in other income due to
valuation adjustments on assets carried at market value. The decline in
deposit service charges is primarily a result of lower fee income on
overdraft and non-sufficient funds.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date noninterest income was $28.6 million in 2008 compared to
$28.9 million in 2007, a $0.3 million or 0.9 percent decrease. Noninterest
income in the first quarter 2008 included a $1.6 million gain associated
with the partial redemption of Visa Inc. common shares, and noninterest
income in the first quarter 2007 included a $1.1 million gain on the sale
of mortgage servicing rights. Excluding these items, year-to-date 2008
noninterest income decreased $0.8 million or 2.9 percent from the prior
year comparable period primarily due to lower earnings from bank-owned life
insurance and service charges on deposits, offset by increases in wealth
management fees and bankcard income.
NONINTEREST EXPENSE
Second Quarter 2008 vs. First Quarter 2008
On a linked-quarter basis, noninterest expense decreased $1.0 million
or 3.6 percent to $28.0 million in the second quarter 2008 from $29.0
million in the first quarter 2008 primarily as a result of a $1.3 million
reduction in the liability for retiree medical benefits, which is not
expected to be recurring, offset by an increase in professional services
and seasonal travel costs. Excluding the effects of the retiree medical
benefit liability, noninterest expense increased approximately $0.2 million
or 0.8 percent.
Second Quarter 2008 vs. Second Quarter 2007
Noninterest expense was $28.0 million in the second quarter 2008
compared to $29.4 million in the second quarter 2007, a decrease of $1.4
million or 5.0 percent primarily due to the previously mentioned $1.3
million reduction in the liability for retiree medical benefits. Excluding
the $1.3 million, the decrease was $0.2 million or 0.6 percent.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date noninterest expense was $57.0 million in 2008 compared to
$60.7 million in 2007, a $3.7 million or 6.0 percent decrease. This
reduction is primarily the result of a $3.1 million decrease in salary and
employee benefits, with an approximate $1.2 million reduction in base
salary expense and $1.9 million reduction in associated pension and retiree
costs. The remainder of the decrease is a result of lower marketing related
expenses as compared to 2007.
INCOME TAXES
Income tax expense was $3.9 million and $4.0 million for the second
quarters 2008 and 2007, respectively. The effective tax rates for the
second quarters 2008 and 2007 were 33.3 percent and 33.0 percent,
respectively. Income tax expense was $7.4 million and $8.2 million for the
six months ended June 30, 2008, and 2007, respectively. The effective tax
rate for the six month period ending June 30, 2008 was 32.9 percent and for
the six month period ending June 30, 2007 was 33.0 percent.
LOANS
Second Quarter 2008 vs. First Quarter 2008
Loan growth continues to occur primarily in First Financial's
metropolitan markets and is the driving force in the mix shift from lower
yielding consumer lending to higher yielding commercial loans. Average
total loans for the second quarter 2008 increased $51.9 million or 8.0
percent on an annualized basis from the first quarter 2008; however,
average commercial, commercial real estate, and construction loans
increased $79.1 million or 19.2 percent on an annualized basis from the
first quarter 2008.
Second Quarter 2008 vs. Second Quarter 2007
Average total loans during the second quarter 2008 increased $114.8
million or 4.5 percent from the comparable period a year ago. Average
commercial, commercial real estate and construction loans increased $221.0
million or 14.6 percent from the second quarter 2007.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date 2008 average total loans increased $112.2 million or 9.0
percent on an annualized basis from the comparable period in 2007. However,
average commercial, commercial real estate, and construction loans
increased $224.6 million or 15.3 percent from the comparable period in
2007.
INVESTMENTS
Securities available-for-sale were $421.7 million at June 30, 2008,
compared to $313.6 million at June 30, 2007, and $345.1 million at March
31, 2008. The combined investment portfolio was 13.4 percent and 10.8
percent of total assets at June 30, 2008, and 2007, respectively, and 11.7
percent of total assets at March 31, 2008. During the second quarter of
2008, First Financial began to increase the size of its investment
portfolio through the purchase of highly rated agency pass-through
mortgage-backed securities. Approximately $120 million of securities were
purchased during the second quarter of 2008, bringing the total purchases
for the year to approximately $170 million. The investment portfolio, as a
percentage of total assets, remains low relative to our peers, and we
continue to review various portfolio strategies that may increase the size
of our investment portfolio and our absolute level of earnings while
balancing our capital and liquidity targets. Among other factors, the
portfolio selection criteria avoids securities backed by sub-prime assets
and also those containing assets that would give rise to material
geographic concentrations. At June 30, 2008, First Financial held
approximately 65 percent of its available-for-sale securities in mortgage
related instruments, substantially all of which are held in highly rated
agency pass-through residential mortgage instruments.
In the first quarter of 2008, First Financial adopted FASB Statement
No. 159 (SFAS No. 159), "The Fair Value Option for Financial Assets and
Financial Liabilities - Including an Amendment of FASB Statement No. 115."
First Financial applied the fair value option to its equity securities of
government sponsored entities ("GSE"), specifically 200,000 Federal Home
Loan Mortgage Corporation perpetual preferred series V shares; and these
securities are classified as trading investment securities. During the
first quarter, there was minimal change in the carrying and market value of
those securities as compared to year end 2007 and therefore no material
income statement effect was recognized. During the second quarter of 2008,
there was significant volatility in the market value of this GSE and while
First Financial still holds the securities, it recorded a loss in market
value, through the income statement, of $0.2 million. Since the end of the
second quarter, there remains uncertainty surrounding the government's
plans for the GSE which has had an effect on the post-second quarter market
value of these securities. The fair value accounting treatment discussed
above will require First Financial to recognize in its income statement
both the market value increases and decreases in future periods.
DEPOSITS & FUNDING
Total deposit balances, both average and period-end, declined on both a
comparative quarter and on a linked-quarter basis. Much of the decline has
been the result of the overall level of deposit rates in our markets and
the decision not to be a price leader when, in our view, it is not
profitable to do so. While we have experienced balance outflow in the time
and wholesale categories due to this decision, we have seen net inflows in
period end noninterest-bearing deposits on a year-over-year and
linked-quarter basis.
Second Quarter 2008 vs. First Quarter 2008
Period-end and average noninterest-bearing deposits increased $14.0
million and $15.1 million, respectively from the first quarter 2008.
Average total deposits for the second quarter 2008 decreased $37.0 million
or 5.2 percent on an annualized basis from the first quarter 2008. Average
total interest-bearing deposits, primarily as a result of runoff in the
public funds portfolio, decreased $52.1 million or 8.5 percent, and average
noninterest-bearing deposits increased $15.1 million or 15.9 percent, both
on an annualized basis from the first quarter 2008. Average transaction
account balances decreased approximately $26.2 million or 8.5 percent, on
an annualized basis from the first quarter 2008.
Second Quarter 2008 vs. Second Quarter 2007
Average transaction account balances increased approximately $22.8
million or 1.9 percent from the second quarter 2007. Average total
interest-bearing deposits for the second quarter 2008 decreased $3.0
million or 0.1 percent, and average noninterest-bearing deposits decreased
$10.8 million or 2.7 percent, both from the second quarter 2007. Average
deposits for the second quarter 2008 decreased $13.8 million or 0.5 percent
from the comparable period a year ago.
Year-to-Date 2008 vs. Year-to-Date 2007
Year-to-date 2008 average total deposits increased $4.9 million or 0.4
percent, on an annualized basis, from the comparable period in 2007. Growth
in transaction accounts has been offset by the runoff of time and wholesale
deposits as a result of our decision to maintain rational deposit pricing
in a very competitive landscape.
With the recent increase in the size of the investment portfolio,
continued strong loan demand and the net deposit outflows we have
experienced, several wholesale funding strategies are being evaluated. The
execution of any specific strategy would be consistent with our overall
interest rate risk and balance sheet management processes.
2008 Outlook
Based on the overall economic outlook for the remainder of 2008,
including but not limited to such factors as inflation, unemployment,
growth, and forward market interest rates, management's 2008 outlook
remains largely unchanged. We continue to anticipate low single digit
growth in total loans, while total deposits are expected to experience a
low single digit decline in balances with transaction deposits growing at a
low single digit rate and time deposits declining at a similar pace. Total
net interest income is expected to stabilize and grow for the remainder of
2008 and our full-year margin expectation remains between 3.67 and 3.75
percent. Net charge-off levels are expected to remain between 30 and 40
basis points of average loans, though likely at the high end of the range.
Management does expect modest noninterest income growth and little to no
growth in noninterest expense. A material change in economic conditions
would have an impact on our expected 2008 performance. Please refer to the
forward-looking statement found at the end of this release.
EARNINGS CONFERENCE CALL AND WEBCAST
On July 30, 2008, First Financial will host an earnings conference call
that will be webcast live at 9:00 a.m. EDT. The presenters will be Claude
E. Davis, president and chief executive officer, and J. Franklin Hall,
executive vice president and chief financial officer. Anyone may
participate in the conference call by calling 1-800-860-2442 (no passcode
needed) or by logging on to the company's website (http://www.bankatfirst.com) for
a live audio webcast of the call. Click on the Investor Relations link and
then on Webcast. Listeners should allow an extra five minutes to be
connected to the call or webcast. The event will be archived on the
company's website for one year. Questions regarding this information should
be directed to the Media Contact, Cheryl Lipp, or the Analyst Contact, J.
Franklin Hall.
This release should be read in conjunction with the consolidated
financial statements, notes, and tables attached and in the First Financial
Bancorp Annual Report on Form 10-K for the year ended December 31, 2007.
Management's analysis contains forward-looking statements that are provided
to assist in the understanding of anticipated future financial performance.
However, such performance involves risk and uncertainties that may cause
actual results to differ materially. Factors that could cause actual
results to differ from those discussed in the forward-looking statements
include, but are not limited to, management's ability to effectively
execute its business plan; the risk that the strength of the United States
economy in general and the strength of the local economies in which First
Financial conducts operations may be different from expected, resulting in,
among other things, a deterioration in credit quality or a reduced demand
for credit, including the resultant effect on First Financial's loan
portfolio and allowance for loan and lease losses; the effects of and
changes in policies and laws of regulatory agencies, inflation, and
interest rates. For further discussion of certain factors that may cause
such forward-looking statements to differ materially from actual results,
refer to the 2007 Form 10-K and other public documents filed with the SEC.
These documents are available on the investor relations section of First
Financial's website at http://www.bankatfirst.com and on the SEC's website at
http://www.sec.gov.
ADD: /FIRST AND FINAL ADD -- CLTU009 -- First Financial Bancorp/
FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share)
(Unaudited)
Three months ended,
Jun. 30, Mar. 31, Dec. 31,
2008 2008 2007
RESULTS OF OPERATIONS
Net interest income $28,414 $28,249 $29,079
Net income $7,808 $7,338 $10,701
Net earnings per common share - basic $0.21 $0.20 $0.29
Net earnings per common share - diluted $0.21 $0.20 $0.29
Dividends declared per common share $0.17 $0.17 $0.17
KEY FINANCIAL RATIOS
Return on average assets 0.93% 0.89% 1.27%
Return on average shareholders' equity 11.26% 10.66% 15.37%
Return on average tangible
shareholders' equity 12.57% 11.91% 17.17%
Net interest margin 3.72% 3.78% 3.79%
Net interest margin (fully tax
equivalent) (1) 3.78% 3.85% 3.86%
Average shareholders' equity to
average assets 8.29% 8.39% 8.27%
Tier 1 Ratio (2) 9.99% 10.20% 10.29%
Total Capital Ratio (2) 11.06% 11.31% 11.38%
Leverage Ratio (2) 8.21% 8.32% 8.26%
AVERAGE BALANCE SHEET ITEMS
Loans (3) $2,648,327 $2,596,483 $2,588,985
Investment securities 422,463 343,553 350,346
Other earning assets 4,095 65,799 106,922
Total earning assets $3,074,885 $3,005,835 $3,046,253
Total assets $3,361,649 $3,298,663 $3,338,828
Noninterest-bearing deposits $394,352 $379,240 $399,304
Interest-bearing deposits 2,400,940 2,453,028 2,461,464
Total deposits $2,795,292 $2,832,268 $2,860,768
Borrowings $256,409 $157,899 $177,876
Shareholders' equity $278,803 $276,815 $276,269
CREDIT QUALITY RATIOS
Allowance to ending loans 1.11% 1.14% 1.12%
Allowance to nonaccrual loans 199.70% 202.29% 205.89%
Allowance to nonperforming loans 192.50% 194.83% 197.94%
Nonperforming loans to total loans 0.57% 0.58% 0.56%
Nonperforming assets to ending loans,
plus OREO 0.71% 0.67% 0.67%
Nonperforming assets to total assets 0.55% 0.53% 0.51%
Net charge-offs to average loans
(annualized) 0.40% 0.40% 0.26%
Three months ended,
Sep. 30, Jun. 30,
2007 2007
RESULTS OF OPERATIONS
Net interest income $29,417 $29,601
Net income $8,373 $8,172
Net earnings per common share - basic $0.22 $0.21
Net earnings per common share - diluted $0.22 $0.21
Dividends declared per common share $0.16 $0.16
KEY FINANCIAL RATIOS
Return on average assets 1.00% 1.00%
Return on average shareholders' equity 12.03% 11.61%
Return on average tangible
shareholders' equity 13.44% 12.95%
Net interest margin 3.88% 3.97%
Net interest margin (fully tax equivalent) (1) 3.95% 4.05%
Average shareholders' equity to average assets 8.34% 8.58%
Tier 1 Ratio (2) 10.18% 11.13%
Total Capital Ratio (2) 11.27% 12.18%
Leverage Ratio (2) 8.21% 9.04%
AVERAGE BALANCE SHEET ITEMS
Loans (3) $2,576,308 $2,530,638
Investment securities 349,686 364,050
Other earning assets 81,669 93,986
Total earning assets $3,007,663 $2,988,674
Total assets $3,309,800 $3,291,756
Noninterest-bearing deposits $385,653 $405,179
Interest-bearing deposits 2,450,830 2,403,919
Total deposits $2,836,483 $2,809,098
Borrowings $176,528 $177,472
Shareholders' equity $276,183 $282,354
CREDIT QUALITY RATIOS
Allowance to ending loans 1.12% 1.10%
Allowance to nonaccrual loans 221.70% 194.92%
Allowance to nonperforming loans 212.42% 187.35%
Nonperforming loans to total loans 0.53% 0.59%
Nonperforming assets to ending loans,
plus OREO 0.65% 0.67%
Nonperforming assets to total assets 0.51% 0.52%
Net charge-offs to average loans (annualized) 0.23% 0.23%
Six months ended
Jun. 30,
2008 2007
RESULTS OF OPERATIONS
Net interest income $56,663 $60,004
Net income $15,146 $16,607
Net earnings per common share - basic $0.41 $0.43
Net earnings per common share - diluted $0.40 $0.43
Dividends declared per common share $0.34 $0.32
KEY FINANCIAL RATIOS
Return on average assets 0.91% 1.02%
Return on average shareholders' equity 10.96% 11.78%
Return on average tangible
shareholders' equity 12.24% 13.13%
Net interest margin 3.75% 4.05%
Net interest margin (fully tax equivalent) (1) 3.81% 4.12%
Average shareholders' equity to average assets 8.34% 8.63%
Tier 1 Ratio (2) 9.99% 11.13%
Total Capital Ratio (2) 11.06% 12.18%
Leverage Ratio (2) 8.29% 9.04%
AVERAGE BALANCE SHEET ITEMS
Loans (3) $2,622,405 $2,510,557
Investment securities 383,883 365,719
Other earning assets 34,947 114,198
Total earning assets $3,041,235 $2,990,474
Total assets $3,330,156 $3,295,530
Noninterest-bearing deposits $386,796 $403,448
Interest-bearing deposits 2,426,984 2,405,408
Total deposits $2,813,780 $2,808,856
Borrowings $207,154 $179,531
Shareholders' equity $277,809 $284,391
CREDIT QUALITY RATIOS
Allowance to ending loans 1.11% 1.10%
Allowance to nonaccrual loans 199.70% 194.92%
Allowance to nonperforming loans 192.50% 187.35%
Nonperforming loans to total loans 0.57% 0.59%
Nonperforming assets to ending loans, plus OREO 0.71% 0.67%
Nonperforming assets to total assets 0.55% 0.52%
Net charge-offs to average loans (annualized) 0.40% 0.22%
(1) The tax equivalent adjustment to net interest income recognizes the
income tax savings when comparing taxable and tax-exempt assets and
assumes a 35% 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) June 30, 2008 regulatory capital ratios are preliminary.
(3) Includes loans held for sale.
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
Three months ended,
Jun. 30,
2008 2007 % Change
Interest income
Loans, including fees $39,646 $45,291 (12.5%)
Investment securities
Taxable 4,387 3,762 16.6%
Tax-exempt 792 911 (13.1%)
Total investment securities
interest 5,179 4,673 10.8%
Federal funds sold 40 1,241 (96.8%)
Total interest income 44,865 51,205 (12.4%)
Interest expense
Deposits 14,635 19,409 (24.6%)
Short-term borrowings 1,130 984 14.8%
Long-term borrowings 384 542 (29.2%)
Subordinated debentures and capital
securities 302 669 (54.9%)
Total interest expense 16,451 21,604 (23.9%)
Net interest income 28,414 29,601 (4.0%)
Provision for loan and lease losses 2,493 2,098 18.8%
Net interest income after provision
for loan and lease losses 25,921 27,503 (5.8%)
Noninterest income
Service charges on deposit accounts 4,951 5,296 (6.5%)
Trust and wealth management fees 4,654 4,526 2.8%
Bankcard income 1,493 1,424 4.8%
Net gains from sales of loans 188 184 2.2%
Gain on sale of mortgage servicing rights 0 0 N/M
Gains on sales of investment securities 0 0 N/M
Other 2,462 2,702 (8.9%)
Total noninterest income 13,748 14,132 (2.7%)
Noninterest expenses
Salaries and employee benefits 15,895 17,134 (7.2%)
Net occupancy 2,510 2,484 1.0%
Furniture and equipment 1,617 1,708 (5.3%)
Data processing 814 818 (0.5%)
Marketing 474 642 (26.2%)
Communication 749 798 (6.1%)
Professional services 1,061 1,063 (0.2%)
Other 4,849 4,793 1.2%
Total noninterest expenses 27,969 29,440 (5.0%)
Income before income taxes 11,700 12,195 (4.1%)
Income tax expense 3,892 4,023 (3.3%)
Net income $7,808 $8,172 (4.5%)
ADDITIONAL DATA
Net earnings per common share - basic $0.21 $0.21
Net earnings per common share - diluted $0.21 $0.21
Dividends declared per common share $0.17 $0.16
Book value per common share $7.34 $7.18
Return on average assets 0.93% 1.00%
Return on average shareholders' equity 11.26% 11.61%
Interest income $44,865 $51,205 (12.4%)
Tax equivalent adjustment 510 580 (12.1%)
Interest income - tax equivalent 45,375 51,785 (12.4%)
Interest expense 16,451 21,604 (23.9%)
Net interest income - tax equivalent $28,924 $30,181 (4.2%)
Net interest margin 3.72% 3.97%
Net interest margin (fully tax
equivalent) (1) 3.78% 4.05%
Full-time equivalent employees 1,058 1,158
Six months ended,
Jun. 30,
2008 2007 % Change
Interest income
Loans, including fees $82,367 $90,355 (8.8%)
Investment securities
Taxable 7,908 7,653 3.3%
Tax-exempt 1,583 1,820 (13.0%)
Total investment securities
interest 9,491 9,473 0.2%
Federal funds sold 605 2,997 (79.8%)
Total interest income 92,463 102,825 (10.1%)
Interest expense
Deposits 32,374 38,418 (15.7%)
Short-term borrowings 1,922 1,980 (2.9%)
Long-term borrowings 790 1,101 (28.2%)
Subordinated debentures and capital
securities 714 1,322 (46.0%)
Total interest expense 35,800 42,821 (16.4%)
Net interest income 56,663 60,004 (5.6%)
Provision for loan and lease losses 5,716 3,454 65.5%
Net interest income after provision
for loan and lease losses 50,947 56,550 (9.9%)
Noninterest income
Service charges on deposit accounts 9,558 10,040 (4.8%)
Trust and wealth management fees 9,276 8,686 6.8%
Bankcard income 2,791 2,664 4.8%
Net gains from sales of loans 407 346 17.6%
Gain on sale of mortgage servicing rights 0 1,061 (100.0%)
Gains on sales of investment securities 1,585 0 N/M
Other 5,006 6,079 (17.7%)
Total noninterest income 28,623 28,876 (0.9%)
Noninterest expenses
Salaries and employee benefits 32,968 36,095 (8.7%)
Net occupancy 5,462 5,291 3.2%
Furniture and equipment 3,270 3,335 (1.9%)
Data processing 1,607 1,663 (3.4%)
Marketing 991 1,511 (34.4%)
Communication 1,554 1,663 (6.6%)
Professional services 1,822 2,069 (11.9%)
Other 9,315 9,023 3.2%
Total noninterest expenses 56,989 60,650 (6.0%)
Income before income taxes 22,581 24,776 (8.9%)
Income tax expense 7,435 8,169 (9.0%)
Net income $15,146 $16,607 (8.8%)
ADDITIONAL DATA
Net earnings per common share - basic $0.41 $0.43
Net earnings per common share - diluted $0.40 $0.43
Dividends declared per common share $0.34 $0.32
Book value per common share $7.34 $7.18
Return on average assets 0.91% 1.02%
Return on average shareholders' equity 10.96% 11.78%
Interest income $92,463 $102,825 (10.1%)
Tax equivalent adjustment 1,024 1,156 (11.4%)
Interest income - tax equivalent 93,487 103,981 (10.1%)
Interest expense 35,800 42,821 (16.4%)
Net interest income - tax equivalent $57,687 $61,160 (5.7%)
Net interest margin 3.75% 4.05%
Net interest margin (fully tax
equivalent) (1) 3.81% 4.12%
Full-time equivalent employees 1,058 1,158
(1) The tax equivalent adjustment to net interest income recognizes the
income tax savings when comparing taxable and tax-exempt assets and
assumes a 35% 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 provided useful information to investors by allowing them to
make peer comparisons. Management also uses these measures to make
peer comparisons.
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(Dollars in thousands)
(Unaudited)
2008
% Change
Second First Year-to- Linked
Quarter Quarter Date Qtr.
Interest income
Loans, including fees $39,646 $42,721 $82,367 (7.2%)
Investment securities
Taxable 4,387 3,521 7,908 24.6%
Tax-exempt 792 791 1,583 0.1%
Total investment securities
interest 5,179 4,312 9,491 20.1%
Federal funds sold 40 565 605 (92.9%)
Total interest income 44,865 47,598 92,463 (5.7%)
Interest expense
Deposits 14,635 17,739 32,374 (17.5%)
Short-term borrowings 1,130 792 1,922 42.7%
Long-term borrowings 384 406 790 (5.4%)
Subordinated debentures and capital
securities 302 412 714 (26.7%)
Total interest expense 16,451 19,349 35,800 (15.0%)
Net interest income 28,414 28,249 56,663 0.6%
Provision for loan and lease losses 2,493 3,223 5,716 (22.6%)
Net interest income after provision
for loan and lease losses 25,921 25,026 50,947 3.6%
Noninterest income
Service charges on deposit accounts 4,951 4,607 9,558 7.5%
Trust and wealth management fees 4,654 4,622 9,276 0.7%
Bankcard income 1,493 1,298 2,791 15.0%
Net gains from sales of loans 188 219 407 (14.2%)
Gains on sales of investment securities 0 1,585 1,585 (100.0%)
Other 2,462 2,544 5,006 (3.2%)
Total noninterest income 13,748 14,875 28,623 (7.6%)
Noninterest expenses
Salaries and employee benefits 15,895 17,073 32,968 (6.9%)
Net occupancy 2,510 2,952 5,462 (15.0%)
Furniture and equipment 1,617 1,653 3,270 (2.2%)
Data processing 814 793 1,607 2.6%
Marketing 474 517 991 (8.3%)
Communication 749 805 1,554 (7.0%)
Professional services 1,061 761 1,822 39.4%
Other 4,849 4,466 9,315 8.6%
Total noninterest expenses 27,969 29,020 56,989 (3.6%)
Income before income taxes 11,700 10,881 22,581 7.5%
Income tax expense 3,892 3,543 7,435 9.9%
Net income $7,808 $7,338 $15,146 6.4%
ADDITIONAL DATA
Net earnings per common share - basic $0.21 $0.20 $0.41
Net earnings per common share - diluted $0.21 $0.20 $0.40
Dividends declared per common share $0.17 $0.17 $0.34
Book value per common share $7.34 $7.41 $7.34
Return on average assets 0.93% 0.89% 0.91%
Return on average shareholders' equity 11.26% 10.66% 10.96%
Interest income $44,865 $47,598 $92,463 (5.7%)
Tax equivalent adjustment 510 514 1,024 (0.8%)
Interest income - tax equivalent 45,375 48,112 93,487 (5.7%)
Interest expense 16,451 19,349 35,800 (15.0%)
Net interest income -
tax equivalent $28,924 $28,763 $57,687 0.6%
Net interest margin 3.72% 3.78% 3.75%
Net interest margin (fully tax
equivalent) (1) 3.78% 3.85% 3.81%
Full-time equivalent employees 1,058 1,056 1,058
(1) The tax equivalent adjustment to net interest income recognizes the
income tax savings when comparing taxable and tax-exempt assets and
assumes a 35% 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 provided useful information to investors by allowing them to
make peer comparisons. Management also uses these measures to make
peer comparisons.
N/M = Not meaningful.
FIRST FINANCIAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
2007
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
Interest income
Loans, including fees $45,709 $46,606 $45,291 $45,064 $182,670
Investment securities
Taxable 3,641 3,667 3,762 3,891 14,961
Tax-exempt 859 863 911 909 3,542
Total investment
securities interest 4,500 4,530 4,673 4,800 18,503
Federal funds sold 1,224 1,048 1,241 1,756 5,269
Total interest income 51,433 52,184 51,205 51,620 206,442
Interest expense
Deposits 20,238 20,528 19,409 19,009 79,184
Short-term borrowings 1,211 1,041 984 996 4,232
Long-term borrowings 466 532 542 559 2,099
Subordinated debentures
and capital securities 439 666 669 653 2,427
Total interest expense 22,354 22,767 21,604 21,217 87,942
Net interest income 29,079 29,417 29,601 30,403 118,500
Provision for loan and
lease losses 1,640 2,558 2,098 1,356 7,652
Net interest income after
provision for loan and
lease losses 27,439 26,859 27,503 29,047 110,848
Noninterest income
Service charges on deposit
accounts 5,330 5,396 5,296 4,744 20,766
Trust and wealth
management fees 4,989 4,721 4,526 4,160 18,396
Bankcard income 1,165 1,422 1,424 1,240 5,251
Net gains from sales
of loans 295 203 184 162 844
Gain on sale of merchant
payment processing
portfolio 5,501 0 0 0 5,501
Gain on sale of mortgage
servicing rights 0 0 0 1,061 1,061
Gains on sales of
investment securities 0 367 0 0 367
Other 2,982 2,341 2,702 3,377 11,402
Total noninterest
income 20,262 14,450 14,132 14,744 63,588
Noninterest expenses
Salaries and employee
benefits 16,508 17,288 17,134 18,961 69,891
Pension settlement charges 2,222 0 0 0 2,222
Net occupancy 2,842 2,728 2,484 2,807 10,861
Furniture and equipment 1,742 1,684 1,708 1,627 6,761
Data processing 825 1,010 818 845 3,498
Marketing 523 407 642 869 2,441
Communication 903 664 798 865 3,230
Professional services 1,109 964 1,063 1,006 4,142
Other 4,698 3,980 4,793 4,230 17,701
Total noninterest
expenses 31,372 28,725 29,440 31,210 120,747
Income before income taxes 16,329 12,584 12,195 12,581 53,689
Income tax expense 5,628 4,211 4,023 4,146 18,008
Net income $10,701 $8,373 $8,172 $8,435 $35,681
ADDITIONAL DATA
Net earnings per common
share - basic $0.29 $0.22 $0.21 $0.22 $0.93
Net earnings per common
share - diluted $0.29 $0.22 $0.21 $0.22 $0.93
Dividends declared per
common share $0.17 $0.16 $0.16 $0.16 $0.65
Book value per common share $7.40 $7.26 $7.18 $7.29 $7.40
Return on average assets 1.27% 1.00% 1.00% 1.04% 1.08%
Return on average
shareholders' equity 15.37% 12.03% 11.61% 11.94% 12.73%
Interest income $51,433 $52,184 $51,205 $51,620 $206,442
Tax equivalent adjustment 561 564 580 576 2,281
Interest income - tax
equivalent 51,994 52,748 51,785 52,196 208,723
Interest expense 22,354 22,767 21,604 21,217 87,942
Net interest income - tax
equivalent $29,640 $29,981 $30,181 $30,979 $120,781
Net interest margin 3.79% 3.88% 3.97% 4.12% 3.94%
Net interest margin (fully
tax equivalent) (1) 3.86% 3.95% 4.05% 4.20% 4.01%
Full-time equivalent
employees 1,057 1,078 1,158 1,166 1,057
(1) The tax equivalent adjustment to net interest income recognizes the
income tax savings when comparing taxable and tax-exempt assets and
assumes a 35% 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 provided useful information to investors by allowing them to
make peer comparisons. Management also uses these measures to make
peer comparisons.
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
Jun. 30, Mar. 31, Dec. 31,
2008 2008 2007
ASSETS
Cash and due from banks $106,248 $102,246 $106,224
Federal funds sold 4,005 2,943 106,990
Investment securities trading 3,598 3,820 0
Investment securities available-
for-sale 421,697 345,145 306,928
Investment securities held-to-
maturity 5,316 5,414 5,639
Other investments 34,632 34,293 33,969
Loans held for sale 2,228 4,108 1,515
Loans
Commercial 814,779 789,922 785,143
Real estate - construction 186,178 172,737 151,432
Real estate - commercial 769,555 726,397 706,409
Real estate - residential 499,002 519,790 539,332
Installment 115,575 126,623 138,895
Home equity 263,063 254,200 250,888
Credit card 26,399 25,528 26,610
Lease financing 111 258 378
Total loans 2,674,662 2,615,455 2,599,087
Less
Allowance for loan and lease
losses 29,580 29,718 29,057
Net loans 2,645,082 2,585,737 2,570,030
Premises and equipment 79,380 78,585 78,994
Goodwill 28,261 28,261 28,261
Other intangibles 641 659 698
Accrued interest and other assets 128,874 132,054 130,068
Total Assets $3,459,962 $3,323,265 $3,369,316
LIABILITIES
Deposits
Interest-bearing $575,236 $610,154 $603,870
Savings 615,613 617,059 596,636
Time 1,167,024 1,206,750 1,227,954
Total interest-bearing
deposits 2,357,873 2,433,963 2,428,460
Noninterest-bearing 419,045 405,015 465,731
Total deposits 2,776,918 2,838,978 2,894,191
Short-term borrowings
Federal funds purchased and
securities sold
under agreements to
repurchase 25,932 27,320 26,289
Federal Home Loan Bank 237,900 6,500 0
Other 54,000 53,000 72,000
Total short-term borrowings 317,832 86,820 98,289
Federal Home Loan Bank long-term
debt 41,263 42,380 45,896
Other long-term debt 20,620 20,620 20,620
Accrued interest and other
liabilities 28,039 56,698 33,737
Total Liabilities 3,184,672 3,045,496 3,092,733
SHAREHOLDERS' EQUITY
Common stock 390,545 389,986 391,962
Retained earnings 81,263 79,818 82,093
Accumulated other comprehensive loss (8,236) (3,800) (7,127)
Treasury stock, at cost (188,282) (188,235) (190,345)
Total Shareholders' Equity 275,290 277,769 276,583
Total Liabilities and
Shareholders' Equity $3,459,962 $3,323,265 $3,369,316
Sep. 30, Jun. 30,
2007 2007
ASSETS
Cash and due from banks $92,414 $87,808
Federal funds sold 71,700 55,000
Investment securities trading 0 0
Investment securities available-for-sale 307,908 313,575
Investment securities held-to-maturity 5,467 5,711
Other investments 33,969 33,969
Loans held for sale 5,763 0
Loans
Commercial 774,059 747,292
Real estate - construction 155,495 125,732
Real estate - commercial 684,931 676,679
Real estate - residential 556,255 580,005
Installment 149,881 162,506
Home equity 245,853 235,734
Credit card 24,904 24,488
Lease financing 500 608
Total loans 2,591,878 2,553,044
Less
Allowance for loan and lease losses 29,136 28,060
Net loans 2,562,742 2,524,984
Premises and equipment 78,214 79,079
Goodwill 28,261 28,261
Other intangibles 828 1,003
Accrued interest and other assets 141,890 143,277
Total Assets $3,329,156 $3,272,667
LIABILITIES
Deposits
Interest-bearing $611,764 $594,788
Savings 595,664 588,229
Time 1,253,383 1,211,182
Total interest-bearing deposits 2,460,811 2,394,199
Noninterest-bearing 389,070 399,260
Total deposits 2,849,881 2,793,459
Short-term borrowings
Federal funds purchased and securities
sold under agreements to repurchase 26,749 31,700
Federal Home Loan Bank 0 0
Other 74,500 52,500
Total short-term borrowings 101,249 84,200
Federal Home Loan Bank long-term debt 55,317 59,021
Other long-term debt 20,620 30,930
Accrued interest and other
liabilities 30,386 25,831
Total Liabilities 3,057,453 2,993,441
SHAREHOLDERS' EQUITY
Common stock 391,355 390,545
Retained earnings 77,745 75,444
Accumulated other comprehensive loss (7,569) (16,168)
Treasury stock, at cost (189,828) (170,595)
Total Shareholders' Equity 271,703 279,226
Total Liabilities and
Shareholders' Equity $3,329,156 $3,272,667
% Change % Change
Linked Qtr. Comparable Qtr.
ASSETS
Cash and due from banks 3.9% 21.0%
Federal funds sold 36.1% (92.7%)
Investment securities trading (5.8%) N/M
Investment securities available-for-sale 22.2% 34.5%
Investment securities held-to-maturity (1.8%) (6.9%)
Other investments 1.0% 2.0%
Loans held for sale (45.8%) N/M
Loans
Commercial 3.1% 9.0%
Real estate - construction 7.8% 48.1%
Real estate - commercial 5.9% 13.7%
Real estate - residential (4.0%) (14.0%)
Installment (8.7%) (28.9%)
Home equity 3.5% 11.6%
Credit card 3.4% 7.8%
Lease financing (57.0%) (81.7%)
Total loans 2.3% 4.8%
Less
Allowance for loan and lease losses (0.5%) 5.4%
Net loans 2.3% 4.8%
Premises and equipment 1.0% 0.4%
Goodwill 0.0% 0.0%
Other intangibles (2.7%) (36.1%)
Accrued interest and other assets (2.4%) (10.1%)
Total Assets 4.1% 5.7%
LIABILITIES
Deposits
Interest-bearing (5.7%) (3.3%)
Savings (0.2%) 4.7%
Time (3.3%) (3.6%)
Total interest-bearing deposits (3.1%) (1.5%)
Noninterest-bearing 3.5% 5.0%
Total deposits (2.2%) (0.6%)
Short-term borrowings
Federal funds purchased and securities
sold under agreements to repurchase (5.1%) (18.2%)
Federal Home Loan Bank N/M N/M
Other 1.9% 2.9%
Total short-term borrowings 266.1% 277.5%
Federal Home Loan Bank long-term debt (2.6%) (30.1%)
Other long-term debt 0.0% (33.3%)
Accrued interest and other liabilities (50.5%) 8.5%
Total Liabilities 4.6% 6.4%
SHAREHOLDERS' EQUITY
Common stock 0.1% 0.0%
Retained earnings 1.8% 7.7%
Accumulated other comprehensive loss 116.7% (49.1%)
Treasury stock, at cost 0.0% 10.4%
Total Shareholders' Equity (0.9%) (1.4%)
Total Liabilities and
Shareholders' Equity 4.1% 5.7%
N/M = Not meaningful.
FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
Quarterly Averages
Jun. 30, Mar. 31, Dec. 31,
2008 2008 2007
ASSETS
Cash and due from banks $81,329 $86,879 $84,771
Federal funds sold 4,095 65,799 106,922
Investment securities 422,463 345,303 350,346
Loans held for sale 3,034 3,122 3,689
Loans
Commercial 805,122 781,358 776,286
Real estate - construction 179,078 162,008 154,208
Real estate - commercial 747,077 708,779 693,038
Real estate - residential 508,837 530,567 542,204
Installment 121,000 132,876 145,787
Home equity 257,954 251,706 248,071
Credit card 26,043 25,745 25,271
Lease financing 182 322 431
Total loans 2,645,293 2,593,361 2,585,296
Less
Allowance for loan and lease
losses 29,248 28,860 29,503
Net loans 2,616,045 2,564,501 2,555,793
Premises and equipment 78,933 78,969 78,992
Goodwill 28,261 28,261 28,261
Other intangibles 652 680 749
Accrued interest and other assets 126,837 125,149 129,305
Total Assets $3,361,649 $3,298,663 $3,338,828
LIABILITIES
Deposits
Interest-bearing $590,464 $623,206 $607,009
Savings 617,029 610,449 604,063
Time 1,193,447 1,219,373 1,250,392
Total interest-bearing
deposits 2,400,940 2,453,028 2,461,464
Noninterest-bearing 394,352 379,240 399,304
Total deposits 2,795,292 2,832,268 2,860,768
Short-term borrowings
Federal funds purchased and
securities sold
under agreements to
repurchase 25,771 26,261 28,952
Federal Home Loan Bank 114,654 614 0
Other 53,758 66,154 77,772
Total short-term borrowings 194,183 93,029 106,724
Federal Home Loan Bank long-term
debt 41,606 44,250 50,532
Other long-term debt 20,620 20,620 20,620
Total borrowed funds 256,409 157,899 177,876
Accrued interest and other
liabilities 31,145 31,681 23,915
Total Liabilities 3,082,846 3,021,848 3,062,559
SHAREHOLDERS' EQUITY
Common stock 390,237 391,079 391,606
Retained earnings 81,045 79,951 81,615
Accumulated other comprehensive
loss (4,211) (4,977) (6,670)
Treasury stock, at cost (188,268) (189,238) (190,282)
Total Shareholders' Equity 278,803 276,815 276,269
Total Liabilities and
Shareholders' Equity $3,361,649 $3,298,663 $3,338,828
Quarterly Averages
Sep. 30, Jun. 30,
2007 2007
ASSETS
Cash and due from banks $85,576 $94,541
Federal funds sold 81,669 93,986
Investment securities 349,686 364,050
Loans held for sale 2,245 162
Loans
Commercial 766,028 733,936
Real estate - construction 139,291 118,425
Real estate - commercial 681,920 657,959
Real estate - residential 566,618 592,811
Installment 155,478 170,748
Home equity 239,585 231,982
Credit card 24,586 23,944
Lease financing 557 671
Total loans 2,574,063 2,530,476
Less
Allowance for loan and
lease losses 28,278 27,482
Net loans 2,545,785 2,502,994
Premises and equipment 79,102 79,491
Goodwill 28,261 28,261
Other intangibles 915 1,096
Accrued interest and other
assets 136,561 127,175
Total Assets $3,309,800 $3,291,756
LIABILITIES
Deposits
Interest-bearing $632,890 $606,320
Savings 586,065 578,357
Time 1,231,875 1,219,242
Total interest-bearing
deposits 2,450,830 2,403,919
Noninterest-bearing 385,653 405,179
Total deposits 2,836,483 2,809,098
Short-term borrowings
Federal funds purchased and
securities sold
under agreements to
repurchase 29,385 34,280
Federal Home Loan Bank 0 0
Other 58,914 52,849
Total short-term borrowings 88,299 87,129
Federal Home Loan Bank long-term
debt 57,860 59,413
Other long-term debt 30,369 30,930
Total borrowed funds 176,528 177,472
Accrued interest and other
liabilities 20,606 22,832
Total Liabilities 3,033,617 3,009,402
SHAREHOLDERS' EQUITY
Common stock 390,898 391,536
Retained earnings 77,428 74,049
Accumulated other comprehensive
loss (15,097) (13,739)
Treasury stock, at cost (177,046) (169,492)
Total Shareholders' Equity 276,183 282,354
Total Liabilities and
Shareholders' Equity $3,309,800 $3,291,756
Year-to-Date Averages
Jun. 30,
2008 2007
ASSETS
Cash and due from banks $84,104 $94,463
Federal funds sold 34,947 114,198
Investment securities 383,883 365,719
Loans held for sale 3,078 3,459
Loans
Commercial 793,240 706,790
Real estate - construction 170,543 109,359
Real estate - commercial 727,928 650,961
Real estate - residential 519,702 604,785
Installment 126,938 180,021
Home equity 254,830 230,555
Credit card 25,894 23,877
Lease financing 252 750
Total loans 2,619,327 2,507,098
Less
Allowance for loan and lease losses 29,054 27,625
Net loans 2,590,273 2,479,473
Premises and equipment 78,951 79,654
Goodwill 28,261 28,261
Other intangibles 666 3,268
Accrued interest and other assets 125,993 127,035
Total Assets $3,330,156 $3,295,530
LIABILITIES
Deposits
Interest-bearing $606,835 $626,323
Savings 613,739 561,821
Time 1,206,410 1,217,264
Total interest-bearing deposits 2,426,984 2,405,408
Noninterest-bearing 386,796 403,448
Total deposits 2,813,780 2,808,856
Short-term borrowings
Federal funds purchased and securities
sold under agreements to repurchase 26,016 40,305
Federal Home Loan Bank 57,634 0
Other 59,956 47,522
Total short-term borrowings 143,606 87,827
Federal Home Loan Bank long-term debt 42,928 60,774
Other long-term debt 20,620 30,930
Total borrowed funds 207,154 179,531
Accrued interest and other liabilities 31,413 22,752
Total Liabilities 3,052,347 3,011,139
SHAREHOLDERS' EQUITY
Common stock 390,658 392,218
Retained earnings 80,498 74,271
Accumulated other comprehensive loss (4,594) (13,732)
Treasury stock, at cost (188,753) (168,366)
Total Shareholders' Equity 277,809 284,391
Total Liabilities and
Shareholders' Equity $3,330,156 $3,295,530
FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE / VOLUME ANALYSIS (1)
(Dollars in thousands)
(Unaudited)
Quarterly Averages
Jun. 30, 2008
Balance Yield
Earning assets
Investment securities $422,463 4.93%
Interest-bearing deposits with other banks
Federal funds sold 4,095 3.93%
Gross loans (2) 2,648,327 6.02%
Total earning assets 3,074,885 5.87%
Nonearning assets
Allowance for loan and lease losses (29,248)
Cash and due from banks 81,329
Accrued interest and other assets 234,683
Total assets $3,361,649
Interest-bearing liabilities
Total interest-bearing deposits $2,400,940 2.45%
Borrowed funds
Short-term borrowings 194,183 2.34%
Federal Home Loan Bank long-term debt 41,606 3.71%
Other long-term debt 20,620 5.89%
Total borrowed funds 256,409 2.85%
Total interest-bearing liabilities 2,657,349 2.49%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 394,352
Other liabilities 31,145
Shareholders' equity 278,803
Total liabilities & shareholders' equity $3,361,649
Net interest income (1) $28,414
Net interest spread (1) 3.38%
Net interest margin (1) 3.72%
Mar. 31, 2008
Balance Yield
Earning assets
Investment securities $343,553 5.05%
Interest-bearing deposits with other banks
Federal funds sold 65,799 3.45%
Gross loans (2) 2,596,483 6.62%
Total earning assets 3,005,835 6.37%
Nonearning assets
Allowance for loan and lease losses (28,860)
Cash and due from banks 86,879
Accrued interest and other assets 234,809
Total assets $3,298,663
Interest-bearing liabilities
Total interest-bearing deposits $2,453,028 2.91%
Borrowed funds
Short-term borrowings 93,029 3.42%
Federal Home Loan Bank long-term debt 44,250 3.69%
Other long-term debt 20,620 8.04%
Total borrowed funds 157,899 4.10%
Total interest-bearing liabilities 2,610,927 2.98%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 379,240
Other liabilities 31,681
Shareholders' equity 276,815
Total liabilities & shareholders' equity $3,298,663
Net interest income (1) $28,249
Net interest spread (1) 3.39%
Net interest margin (1) 3.78%
Jun. 30, 2007
Balance Yield
Earning assets
Investment securities $364,050 5.15%
Interest-bearing deposits with other banks
Federal funds sold 93,986 5.30%
Gross loans (2) 2,530,638 7.18%
Total earning assets 2,988,674 6.87%
Nonearning assets
Allowance for loan and lease losses (27,482)
Cash and due from banks 94,541
Accrued interest and other assets 236,023
Total assets $3,291,756
Interest-bearing liabilities
Total interest-bearing deposits $2,403,919 3.24%
Borrowed funds
Short-term borrowings 87,129 4.53%
Federal Home Loan Bank long-term debt 59,413 3.66%
Other long-term debt 30,930 8.68%
Total borrowed funds 177,472 4.96%
Total interest-bearing liabilities 2,581,391 3.36%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 405,179
Other liabilities 22,832
Shareholders' equity 282,354
Total liabilities & shareholders' equity $3,291,756
Net interest income (1) $29,601
Net interest spread (1) 3.51%
Net interest margin (1) 3.97%
Year-to-Date Averages
Jun. 30, 2008 Jun. 30, 2007
Balance Yield Balance Yield
Earning assets
Investment securities $383,883 4.99% $365,719 5.22%
Interest-bearing deposits with
other banks
Federal funds sold 34,947 3.49% 114,198 5.29%
Gross loans (2) 2,622,405 6.33% 2,510,557 7.26%
Total earning assets 3,041,235 6.13% 2,990,474 6.93%
Nonearning assets
Allowance for loan and lease losses (29,054) (27,625)
Cash and due from banks 84,104 94,463
Accrued interest and other assets 233,871 238,218
Total assets $3,330,156 $3,295,530
Interest-bearing liabilities
Total interest-bearing deposits $2,426,984 2.69% $2,405,408 3.22%
Borrowed funds
Short-term borrowings 143,606 2.70% 87,827 4.55%
Federal Home Loan Bank long-term
debt 42,928 3.71% 60,774 3.65%
Other long-term debt 20,620 6.98% 30,930 8.62%
Total borrowed funds 207,154 3.34% 179,531 4.95%
Total interest-bearing
liabilities 2,634,138 2.74% 2,584,939 3.34%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits 386,796 403,448
Other liabilities 31,413 22,752
Shareholders' equity 277,809 284,391
Total liabilities & shareholders'
equity $3,330,156 $3,295,530
Net interest income (1) $56,663 $60,004
Net interest spread (1) 3.39% 3.59%
Net interest margin (1) 3.75% 4.05%
(1) Not tax equivalent.
(2) Loans held for sale and nonaccrual loans are both included in gross
loans.
FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE / VOLUME ANALYSIS (1)
(Dollars in thousands)
(Unaudited)
Linked Qtr. Income Variance
Rate Volume Total
Earning assets
Investment securities $(100) $967 $867
Federal funds sold 78 (603) (525)
Gross loans (2) (3,851) 776 (3,075)
Total earning assets (3,873) 1,140 (2,733)
Interest-bearing liabilities
Total interest-bearing deposits $(2,786) $(318) $(3,104)
Borrowed funds
Short-term borrowings (251) 589 338
Federal Home Loan Bank long-term debt 2 (24) (22)
Other long-term debt (110) - (110)
Total borrowed funds (359) 565 206
Total interest-bearing liabilities (3,145) 247 (2,898)
Net interest income (1) $(728) $893 $165
Net interest spread (1)
Net interest margin (1)
Comparable Qtr. Income Variance
Rate Volume Total
Earning assets
Investment securities $(210) $716 $506
Federal funds sold (323) (878) (1,201)
Gross loans (2) (7,407) 1,762 (5,645)
Total earning assets (7,940) 1,600 (6,340)
Interest-bearing liabilities
Total interest-bearing deposits $(4,756) $(18) $(4,774)
Borrowed funds
Short-term borrowings (477) 623 146
Federal Home Loan Bank long-term debt 6 (164) (158)
Other long-term debt (216) (151) (367)
Total borrowed funds (687) 308 (379)
Total interest-bearing liabilities (5,443) 290 (5,153)
Net interest income (1) $(2,497) $1,310 $(1,187)
Net interest spread (1)
Net interest margin (1)
Year-to-Date Income Variance
Rate Volume Total
Earning assets
Investment securities (431) $449 $18
Federal funds sold (1,020) (1,372) (2,392)
Gross loans (2) (11,501) 3,513 (7,988)
Total earning assets (12,952) 2,590 (10,362)
Interest-bearing liabilities
Total interest-bearing deposits $(6,332) $288 $(6,044)
Borrowed funds
Short-term borrowings (805) 747 (58)
Federal Home Loan Bank long-term debt 17 (328) (311)
Other long-term debt (251) (357) (608)
Total borrowed funds (1,039) 62 (977)
Total interest-bearing liabilities (7,371) 350 (7,021)
Net interest income (1) $(5,581) $2,240 $(3,341)
Net interest spread (1)
Net interest margin (1)
(1) Not tax equivalent.
(2) Loans held for sale and nonaccrual loans are both included in gross
loans.
FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 2007 2007
ALLOWANCE FOR LOAN AND LEASE
LOSS ACTIVITY
Balance at beginning of
period $29,718 $29,057 $29,136 $28,060 $27,407
Provision for loan and
lease losses 2,493 3,223 1,640 2,558 2,098
Gross charge-offs
Commercial 946 545 1,433 1,008 920
Real estate - commercial 589 806 465 76 176
Real estate - residential 227 39 33 49 57
Installment 482 564 522 471 604
Home equity 525 651 285 189 149
All other 426 498 304 304 224
Total gross charge-offs 3,195 3,103 3,042 2,097 2,130
Recoveries
Commercial 166 144 342 145 246
Real estate - commercial 19 3 632 124 48
Real estate - residential 5 11 3 25 10
Installment 246 315 242 263 288
Home equity 30 0 19 12 25
All other 98 68 85 46 68
Total recoveries 564 541 1,323 615 685
Total net charge-offs 2,631 2,562 1,719 1,482 1,445
Ending allowance for loan and
lease losses $29,580 $29,718 $29,057 $29,136 $28,060
NET CHARGE-OFFS TO AVERAGE
LOANS AND LEASES
(ANNUALIZED)
Commercial 0.39% 0.21% 0.56% 0.45% 0.37%
Real estate - commercial 0.31% 0.46% (0.10%) (0.03%) 0.08%
Real estate - residential 0.18% 0.02% 0.02% 0.02% 0.03%
Installment 0.78% 0.75% 0.76% 0.53% 0.74%
Home equity 0.77% 1.04% 0.43% 0.29% 0.21%
All other 0.64% 0.92% 0.48% 0.62% 0.44%
Total net charge-offs 0.40% 0.40% 0.26% 0.23% 0.23%
COMPONENTS OF NONPERFORMING
LOANS, NONPERFORMING ASSETS,
AND UNDERPERFORMING ASSETS
Nonaccrual loans
Commercial $5,447 $3,952 $2,677 $3,782 $6,812
Real estate - commercial 3,592 4,415 5,965 5,343 4,140
Real estate - residential 4,461 4,529 3,063 2,147 1,694
Installment 438 544 734 745 681
Home equity 866 1,221 1,662 1,117 1,048
All other 8 30 12 8 21
Total nonaccrual loans 14,812 14,691 14,113 13,142 14,396
Restructured loans 554 562 567 574 581
Total nonperforming loans 15,366 15,253 14,680 13,716 14,977
Other real estate owned
(OREO) 3,763 2,368 2,636 3,124 2,023
Total nonperforming
assets 19,129 17,621 17,316 16,840 17,000
Accruing loans past due 90
days or more 245 372 313 222 165
Total underperforming
assets $19,374 $17,993 $17,629 $17,062 $17,165
Total classified assets $54,511 $55,302 $49,372 $53,997 $49,263
CREDIT QUALITY RATIOS
Allowance for loan and lease
losses to
Nonaccrual loans 199.70% 202.29% 205.89% 221.70% 194.92%
Nonperforming loans 192.50% 194.83% 197.94% 212.42% 187.35%
Total ending loans 1.11% 1.14% 1.12% 1.12% 1.10%
Nonperforming loans to total
loans 0.57% 0.58% 0.56% 0.53% 0.59%
Nonperforming assets to
Ending loans, plus OREO 0.71% 0.67% 0.67% 0.65% 0.67%
Total assets 0.55% 0.53% 0.51% 0.51% 0.52%
FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands)
(Unaudited)
Jun. 30, Mar. 31, Dec. 31,
2008 2008 2007
PER COMMON SHARE
Market Price
High $13.88 $13.81 $13.89
Low $9.20 $10.19 $10.12
Close $9.20 $13.45 $11.40
Average shares outstanding - basic 37,114,451 37,066,754 37,370,618
Average shares outstanding - diluted 37,524,789 37,431,918 37,370,650
Ending shares outstanding 37,483,384 37,488,229 37,367,808
REGULATORY CAPITAL Preliminary
Tier 1 Capital $274,372 $272,614 $274,046
Tier 1 Ratio 9.99% 10.20% 10.29%
Total Capital $303,952 $302,332 $303,103
Total Capital Ratio 11.06% 11.31% 11.38%
Total Capital in excess of minimum
requirement $84,147 $88,553 $90,062
Total Risk-Adjusted Assets $2,747,559 $2,672,242 $2,663,007
Leverage Ratio 8.21% 8.32% 8.26%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending
assets 7.96% 8.36% 8.21%
Ending tangible shareholders' equity
to ending tangible assets 7.18% 7.55% 7.41%
Average shareholders' equity to
average assets 8.29% 8.39% 8.27%
Average tangible shareholders' equity
to average tangible assets 7.50% 7.58% 7.47%
REPURCHASE PROGRAM (1)
Shares repurchased 0 0 34,300
Average share repurchase price $0.00 $0.00 $13.52
Total cost of shares repurchased $0 $0 $464
Sep. 30, Jun. 30,
2007 2007
PER COMMON SHARE
Market Price
High $15.12 $15.72
Low $10.76 $14.43
Close $12.78 $14.99
Average shares outstanding - basic 38,383,228 38,965,409
Average shares outstanding - diluted 38,383,228 38,967,061
Ending shares outstanding 37,405,433 38,883,083
REGULATORY CAPITAL
Tier 1 Capital $269,961 $295,996
Tier 1 Ratio 10.18% 11.13%
Total Capital $299,097 $324,056
Total Capital Ratio 11.27% 12.18%
Total Capital in excess of minimum
requirement $86,857 $111,263
Total Risk-Adjusted Assets $2,652,999 $2,659,915
Leverage Ratio 8.21% 9.04%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending
assets 8.16% 8.53%
Ending tangible shareholders' equity
to ending tangible assets 7.35% 7.71%
Average shareholders' equity to
average assets 8.34% 8.58%
Average tangible shareholders' equity
to average tangible assets 7.53% 7.76%
REPURCHASE PROGRAM (1)
Shares repurchased 1,469,700 252,000
Average share repurchase price $13.00 $15.07
Total cost of shares repurchased $19,105 $3,797
Six months ended,
Jun. 30, Jun. 30,
2008 2007
PER COMMON SHARE
Market Price
High $13.88 $16.76
Low $9.20 $14.43
Close $9.20 $14.99
Average shares outstanding - basic 37,090,603 39,042,827
Average shares outstanding - diluted 37,478,353 39,050,919
Ending shares outstanding 37,483,384 38,883,083
REGULATORY CAPITAL Preliminary
Tier 1 Capital $274,372 $295,996
Tier 1 Ratio 9.99% 11.13%
Total Capital $303,952 $324,056
Total Capital Ratio 11.06% 12.18%
Total Capital in excess of minimum
requirement $84,147 $111,263
Total Risk-Adjusted Assets $2,747,559 $2,659,915
Leverage Ratio 8.29% 9.04%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending
assets 7.96% 8.53%
Ending tangible shareholders' equity
to ending tangible assets 7.18% 7.71%
Average shareholders' equity to
average assets 8.34% 8.63%
Average tangible shareholders' equity
to average tangible assets 7.54% 7.81%
REPURCHASE PROGRAM (1)
Shares repurchased 0 496,000
Average share repurchase price $0.00 $15.58
Total cost of shares repurchased $0 $7,728,288
(1) Represents share repurchases as part of publicly announced plans.
SOURCE First Financial Bancorp
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+1-513-979-5770, frank.hall@bankatfirst.com
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