EX-99.1 2 a8k4q20earningsreleaseex991.htm EX-99.1 Document

                                                Exhibit 99.1
yellowbara121a.jpgbancorplogoa041a.jpg                                        
First Financial Bancorp Announces Fourth Quarter and Full Year 2020 Financial Results and Quarterly Dividend

•Earnings per diluted share of $0.49; $0.51 on an adjusted(1) basis
•Return on average assets of 1.20%; 1.23% as adjusted(1)
•Net interest margin FTE(1) of 3.49%; 13 basis point increase from linked quarter
•Strong noninterest income driven by foreign exchange fees and mortgage production
•Announces $0.23 per share Quarterly Dividend

Cincinnati, Ohio - January 28, 2021- First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the three and twelve months ended December 31, 2020.

For the three months ended December 31, 2020, the Company reported net income of $48.3 million, or $0.49 per diluted common share. These results compare to net income of $41.5 million, or $0.42 per diluted common share, for the third quarter of 2020 and $48.7 million, or $0.49 per diluted common share, for the fourth quarter of 2019. For the twelve months ended December 31, 2020, First Financial had earnings per diluted common share of $1.59 compared to $2.00 for the same period in 2019.

Return on average assets for the fourth quarter of 2020 was 1.20% while return on average tangible common equity was 15.50%. These compare to returns on average assets of 1.04% and 1.34%, and returns on average tangible common equity of 13.61% and 15.84%, in the third quarter of 2020 and the fourth quarter of 2019, respectively.

Fourth quarter 2020 highlights include:

•After adjustments(1) for certain nonrecurring and certain COVID-19 related items:
◦Net income of $0.51 per diluted common share
◦1.23% return on average assets
◦15.94% return on average tangible common equity

•Net interest margin of 3.49% on a fully tax-equivalent basis(1)
◦13 basis point increase driven by loan fees, which includes PPP forgiveness, and lower deposit costs

•Noninterest income of $61.5 million, or $48.1 million as adjusted(1)
◦Adjustments(1) include $13.4 million in gain recognized on class B Visa shares
◦Record foreign exchange income of $12.3 million; 16.9% increase from linked quarter
◦Mortgage income remains strong, despite decline from record third quarter production

•Noninterest expenses of $114.8 million, or $94.6 million as adjusted(1)
◦Adjustments(1) include:
▪$7.3 million of debt extinguishment costs
▪$5.1 million write down of a tax credit investment
▪$5.0 million contribution to First Financial Foundation
▪$2.9 million of costs directly related to COVID-19 and other nonrecurring costs such as merger-related and branch consolidation costs
◦Efficiency ratio of 63.8%; 56.8% as adjusted(1)

_________________________________________________________________________________________ (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.
1


•Non-PPP loan balances were flat during the quarter

•Average transactional deposit balances grew $533.8 million compared to the linked quarter; 22.2% on an annualized basis

•Total Allowance for Credit Losses of $188.2 million; Total quarterly provision for credit losses of $11.5 million
◦Loans and leases - ACL of $175.7 million, 1.77% of total loans; 1.89% of loans excluding PPP
◦Unfunded Commitments - ACL of $12.5 million
◦Fourth quarter provision expense driven by COVID-19 uncertainty, partially offset by improvements in economic forecast, resulting in expected peak ACL as a percentage of loans

•Strong capital ratios
◦Total capital of 15.55%
◦Tier 1 common equity of 11.82%
◦Tangible common equity of 8.47%; 8.83% excluding PPP loans
◦Tangible book value per share of $12.93; $0.37 increase compared to linked quarter

Additionally, First Financial's board of directors has authorized a quarterly dividend of $0.23 per common share for the next regularly scheduled dividend, payable on March 15, 2021 to shareholders of record as of March 1, 2021.

Archie Brown, President and Chief Executive Officer, remarked, “When considering a year in which we encountered a global pandemic, experienced widespread government mandated business shutdowns and stay-at-home orders, and a reduction in the Fed Funds rate of 150 basis points, I am very pleased with our response to these challenges and our overall management of the company. On an adjusted(1) basis, we earned $1.66 per diluted share, achieved a 1.05% return on average assets, strengthened Tier 1 Common Equity and Total Capital, significantly bolstered our allowance for credit losses from 0.63% of loans to 1.77%, and experienced low levels of charge-offs.”

Mr. Brown continued, “Business conditions remained difficult in the fourth quarter; however, our core quarterly financial metrics were strong with adjusted(1) earnings per share of $0.51, adjusted(1) return on assets of 1.23%, and an adjusted(1) efficiency ratio of 56.8%. An increase in interest income, which includes PPP loan forgiveness fees, strong mortgage banking and record foreign exchange income drove our solid quarterly results. Our sub-60% efficiency ratio reflected our diligent expense management despite adapting to a remote working environment and continued investment in processes and technologies that position the Company for long-term success. Credit trends remain relatively stable; however, with COVID-19 cases in the Midwest remaining at peak levels, a slower than anticipated vaccine rollout and general economic uncertainty, we recorded $11.5 million of provision expense, resulting in an increase in our allowance for credit losses to 1.89% of total loans, excluding PPP. We believe the increase in our allowance has positioned us to absorb future losses anticipated by the pandemic or otherwise.”

Mr. Brown concluded, “I am most pleased by the response of our associates and their commitment to our clients and communities. They demonstrated amazing flexibility and resilience in pivoting from normal business activities and processes to working remotely or with significant changes to their in-office routines. From the beginning of the pandemic, we prioritized keeping our associates safe and engaged, which enabled them to support our clients in one of the most stressful and uncertain periods in our history. Our associates were constant stewards, embodying our organizational belief that banking is an essential function in the lives of consumers, businesses and our communities and were focused on ensuring that we remained faithful to our mission. Notably, our corporate-wide effort in granting approximately 7,000 PPP loans totaling over $900 million in a matter of months was something to remember. I am very proud of the effort and commitment of our First Financial Team.”
Full detail of the Company’s fourth quarter and full year 2020 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, January 29, 2021 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 (Canada toll free) or +1 (412) 380-2003 (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. 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. A replay of the conference call will be available beginning one hour after the completion of the live call at (877) 344-7529 (U.S. toll free), (855) 669-9658 (Canada toll free) and +1 (412) 317-0088 (International); conference number 10151308. The webcast will be archived on the Investor Relations section of the Company’s website for 12 months.

2



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.



3

Forward-Looking Statement

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 declines in housing prices, high 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 of a slowing U.S. economy and increased unemployment 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.

4

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, 2019, 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 December 31, 2020, the Company had $16.0 billion in assets, $9.9 billion in loans, $12.2 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 $3.0 billion in assets under management as of December 31, 2020. The Company operated 143 full service banking centers as of December 31, 2020, primarily in Ohio, Indiana and Kentucky, 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.


Contact Information
Investors/Analysts                    Media
Jamie Anderson                        Tim Condron
Chief Financial Officer                    Marketing Communications Manager
(513) 887-5400                        (513) 979-5796
InvestorRelations@bankatfirst.com            media@bankatfirst.com    
5


contentsheader0215a231a.jpg
Selected Financial Information
December 31, 2020
(unaudited)

ContentsPage
Consolidated Financial Highlights2
Consolidated Statements of Income3
Consolidated Quarterly Statements of Income4-5
Consolidated Statements of Condition6
Average Consolidated Statements of Condition7
Net Interest Margin Rate / Volume Analysis8-9
Credit Quality10
Capital Adequacy11



    
FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended,Twelve months ended,
Dec. 31,Sep. 30,June 30,Mar. 31,Dec. 31,December 31,
2020202020202020201920202019
RESULTS OF OPERATIONS
Net income$48,312 $41,477 $37,393 $28,628 $48,677 $155,810 $198,075 
Net earnings per share - basic$0.50 $0.43 $0.38 $0.29 $0.49 $1.60 $2.01 
Net earnings per share - diluted$0.49 $0.42 $0.38 $0.29 $0.49 $1.59 $2.00 
Dividends declared per share$0.23 $0.23 $0.23 $0.23 $0.23 $0.92 $0.90 
KEY FINANCIAL RATIOS
Return on average assets1.20 %1.04 %0.96 %0.79 %1.34 %1.00 %1.39 %
Return on average shareholders' equity8.52 %7.40 %6.88 %5.21 %8.60 %7.02 %9.11 %
Return on average tangible shareholders' equity15.50 %13.61 %12.90 %9.71 %15.84 %12.97 %16.32 %
Net interest margin3.45 %3.32 %3.38 %3.71 %3.84 %3.46 %3.95 %
Net interest margin (fully tax equivalent) (1)
3.49 %3.36 %3.44 %3.77 %3.89 %3.51 %4.00 %
Ending shareholders' equity as a percent of ending assets14.29 %14.11 %13.99 %14.47 %15.49 %14.29 %15.49 %
Ending tangible shareholders' equity as a percent of:
Ending tangible assets8.47 %8.25 %8.09 %8.25 %9.07 %8.47 %9.07 %
Risk-weighted assets11.29 %11.07 %10.89 %10.50 %11.09 %11.29 %11.09 %
Average shareholders' equity as a percent of average assets14.07 %14.08 %13.91 %15.21 %15.53 %14.30 %15.30 %
Average tangible shareholders' equity as a percent of
    average tangible assets8.26 %8.18 %7.94 %8.79 %9.07 %8.28 %9.16 %
Book value per share$23.28 $22.94 $22.66 $22.25 $22.82 $23.28 $22.82 
Tangible book value per share$12.93 $12.56 $12.26 $11.82 $12.42 $12.93 $12.42 
Common equity tier 1 ratio (2)
11.82 %11.63 %11.49 %11.27 %11.30 %11.82 %11.30 %
Tier 1 ratio (2)
12.20 %12.02 %11.87 %11.66 %11.69 %12.20 %11.69 %
Total capital ratio (2)
15.55 %15.37 %15.19 %13.54 %13.39 %15.55 %13.39 %
Leverage ratio (2)
9.55 %9.55 %8.98 %9.49 %9.58 %9.55 %9.58 %
AVERAGE BALANCE SHEET ITEMS
Loans (3)
$10,127,881 $10,253,392 $10,002,379 $9,220,643 $9,149,222 $9,902,656 $8,948,535 
Investment securities3,403,839 3,162,832 3,164,243 3,115,723 3,102,867 3,212,051 3,288,875 
Interest-bearing deposits with other banks143,884 40,277 91,990 39,332 36,672 78,943 35,814 
  Total earning assets$13,675,604 $13,456,501 $13,258,612 $12,375,698 $12,288,761 $13,193,650 $12,273,224 
Total assets$16,030,986 $15,842,010 $15,710,204 $14,524,422 $14,460,288 $15,529,144 $14,210,719 
Noninterest-bearing deposits$3,720,417 $3,535,432 $3,335,866 $2,643,240 $2,638,908 $3,310,483 $2,524,011 
Interest-bearing deposits8,204,306 8,027,082 8,395,229 7,590,791 7,583,531 8,054,687 7,577,347 
  Total deposits$11,924,723 $11,562,514 $11,731,095 $10,234,031 $10,222,439 $11,365,170 $10,101,358 
Borrowings$1,307,461 $1,519,748 $1,272,819 $1,735,767 $1,613,696 $1,458,701 $1,669,059 
Shareholders' equity$2,256,062 $2,230,422 $2,185,865 $2,209,733 $2,245,107 $2,220,645 $2,174,679 
CREDIT QUALITY RATIOS
Allowance to ending loans1.77 %1.65 %1.56 %1.55 %0.63 %1.77 %0.63 %
Allowance to nonaccrual loans217.55 %216.28 %233.74 %296.51 %119.69 %217.55 %119.69 %
Allowance to nonperforming loans199.97 %196.69 %208.06 %203.42 %96.73 %199.97 %96.73 %
Nonperforming loans to total loans0.89 %0.84 %0.75 %0.76 %0.65 %0.89 %0.65 %
Nonperforming assets to ending loans, plus OREO0.90 %0.86 %0.77 %0.78 %0.67 %0.90 %0.67 %
Nonperforming assets to total assets0.56 %0.55 %0.49 %0.48 %0.42 %0.56 %0.42 %
Classified assets to total assets0.89 %0.84 %0.79 %0.83 %0.62 %0.89 %0.62 %
Net charge-offs to average loans (annualized)0.26 %0.21 %0.12 %(0.04)%0.15 %0.14 %0.33 %

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% 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) December 31, 2020 regulatory capital ratios are preliminary.
(3) Includes loans held for sale.
2

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended,Twelve months ended,
December 31,December 31,
20202019% Change20202019% Change
Interest income
  Loans and leases, including fees$106,733 $122,802 (13.1)%$431,657 $499,009 (13.5)%
  Investment securities
     Taxable18,402 20,137 (8.6)%73,789 90,168 (18.2)%
     Tax-exempt4,839 4,545 6.5 %19,242 17,596 9.4 %
        Total investment securities interest23,241 24,682 (5.8)%93,031 107,764 (13.7)%
  Other earning assets55 167 (67.1)%275 805 (65.8)%
       Total interest income130,029 147,651 (11.9)%524,963 607,578 (13.6)%
Interest expense
  Deposits5,920 19,026 (68.9)%41,922 79,032 (47.0)%
  Short-term borrowings30 5,430 (99.4)%6,442 25,235 (74.5)%
  Long-term borrowings5,606 4,293 30.6 %20,088 19,057 5.4 %
      Total interest expense11,556 28,749 (59.8)%68,452 123,324 (44.5)%
      Net interest income118,473 118,902 (0.4)%456,511 484,254 (5.7)%
  Provision for credit losses-loans and leases (1)
13,758 4,629 197.2 %70,796 30,598 131.4 %
  Provision for credit losses-unfunded commitments (1)
(2,250)177 N/M(237)(165)43.6 %
      Net interest income after provision for credit losses106,965 114,096 (6.3)%385,952 453,821 (15.0)%
Noninterest income
  Service charges on deposit accounts7,654 9,343 (18.1)%29,446 37,939 (22.4)%
  Trust and wealth management fees4,093 3,913 4.6 %16,531 15,644 5.7 %
  Bankcard income3,060 3,405 (10.1)%11,726 18,804 (37.6)%
  Client derivative fees2,021 4,194 (51.8)%10,313 15,662 (34.2)%
  Foreign exchange income12,305 6,014 104.6 %39,377 7,739 408.8 %
  Net gains from sales of loans13,089 4,723 177.1 %51,176 14,851 244.6 %
  Net gains (losses) on sale of investment securities4,618 (296)N/M4,563 (406)N/M
  Other14,675 5,472 168.2 %25,991 21,140 22.9 %
      Total noninterest income61,515 36,768 67.3 %189,123 131,373 44.0 %
Noninterest expenses
  Salaries and employee benefits62,263 53,952 15.4 %236,779 209,061 13.3 %
  Net occupancy6,159 6,334 (2.8)%23,266 24,069 (3.3)%
  Furniture and equipment3,596 4,145 (13.2)%14,968 15,903 (5.9)%
  Data processing7,269 5,996 21.2 %27,514 21,881 25.7 %
  Marketing1,999 1,980 1.0 %6,414 6,908 (7.2)%
  Communication840 882 (4.8)%3,492 3,267 6.9 %
  Professional services3,038 2,192 38.6 %9,961 11,254 (11.5)%
  Debt extinguishment7,257 0 N/M7,257 0 N/M
  State intangible tax1,514 1,767 (14.3)%6,058 5,829 3.9 %
  FDIC assessments1,065 1,055 0.9 %5,110 1,973 159.0 %
  Intangible amortization 2,764 3,150 (12.3)%11,126 9,671 15.0 %
  Other17,034 11,434 49.0 %38,719 32,516 19.1 %
      Total noninterest expenses114,798 92,887 23.6 %390,664 342,332 14.1 %
Income before income taxes53,682 57,977 (7.4)%184,411 242,862 (24.1)%
Income tax expense5,370 9,300 (42.3)%28,601 44,787 (36.1)%
      Net income$48,312 $48,677 (0.7)%$155,810 $198,075 (21.3)%
ADDITIONAL DATA
Net earnings per share - basic$0.50 $0.49 $1.60 $2.01 
Net earnings per share - diluted$0.49 $0.49 $1.59 $2.00 
Dividends declared per share$0.23 $0.23 $0.92 $0.90 
Return on average assets1.20 %1.34 %1.00 %1.39 %
Return on average shareholders' equity8.52 %8.60 %7.02 %9.11 %
Interest income$130,029 $147,651 (11.9)%$524,963 $607,578 (13.6)%
Tax equivalent adjustment1,613 1,630 (1.0)%6,529 6,328 3.2 %
   Interest income - tax equivalent131,642 149,281 (11.8)%531,492 613,906 (13.4)%
Interest expense11,556 28,749 (59.8)%68,452 123,324 (44.5)%
   Net interest income - tax equivalent$120,086 $120,532 (0.4)%$463,040 $490,582 (5.6)%
Net interest margin3.45 %3.84 %3.46 %3.95 %
Net interest margin (fully tax equivalent) (2)
3.49 %3.89 %3.51 %4.00 %
Full-time equivalent employees2,075 2,065 
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.
(2) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% 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 provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.
3

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
2020
FourthThirdSecondFirstYear to% Change
QuarterQuarterQuarterQuarterDateLinked Qtr.
Interest income
  Loans and leases, including fees$106,733 $103,249 $105,900 $115,775 $431,657 3.4 %
  Investment securities
     Taxable18,402 17,906 18,476 19,005 73,789 2.8 %
     Tax-exempt4,839 4,884 4,937 4,582 19,242 (0.9)%
        Total investment securities interest23,241 22,790 23,413 23,587 93,031 2.0 %
  Other earning assets55 31 47 142 275 77.4 %
       Total interest income130,029 126,070 129,360 139,504 524,963 3.1 %
Interest expense
  Deposits5,920 7,886 11,751 16,365 41,922 (24.9)%
  Short-term borrowings30 51 1,274 5,087 6,442 (41.2)%
  Long-term borrowings5,606 5,953 4,759 3,770 20,088 (5.8)%
      Total interest expense11,556 13,890 17,784 25,222 68,452 (16.8)%
      Net interest income118,473 112,180 111,576 114,282 456,511 5.6 %
  Provision for credit losses-loans and leases (1)
13,758 15,299 17,859 23,880 70,796 (10.1)%
  Provision for credit losses-unfunded commitments (1)
(2,250)(1,925)2,370 1,568 (237)16.9 %
      Net interest income after provision for credit losses106,965 98,806 91,347 88,834 385,952 8.3 %
Noninterest income
  Service charges on deposit accounts7,654 7,356 6,001 8,435 29,446 4.1 %
  Trust and wealth management fees4,093 3,855 4,114 4,469 16,531 6.2 %
  Bankcard income3,060 3,124 2,844 2,698 11,726 (2.0)%
  Client derivative fees2,021 2,203 2,984 3,105 10,313 (8.3)%
  Foreign exchange income12,305 10,530 6,576 9,966 39,377 16.9 %
  Net gains from sales of loans13,089 18,594 16,662 2,831 51,176 (29.6)%
  Net gains (losses) on sale of investment securities4,618 2 2 (59)4,563 N/M
  Other14,675 3,835 3,542 3,939 25,991 282.7 %
      Total noninterest income61,515 49,499 42,725 35,384 189,123 24.3 %
Noninterest expenses
  Salaries and employee benefits62,263 63,769 55,925 54,822 236,779 (2.4)%
  Net occupancy6,159 5,625 5,378 6,104 23,266 9.5 %
  Furniture and equipment3,596 3,638 3,681 4,053 14,968 (1.2)%
  Data processing7,269 6,837 7,019 6,389 27,514 6.3 %
  Marketing1,999 1,856 1,339 1,220 6,414 7.7 %
  Communication840 855 907 890 3,492 (1.8)%
  Professional services3,038 2,443 2,205 2,275 9,961 24.4 %
  Debt extinguishment7,257 0 0 0 7,257 N/M
  State intangible tax1,514 1,514 1,514 1,516 6,058 0.0 %
  FDIC assessments1,065 1,350 1,290 1,405 5,110 (21.1)%
  Intangible amortization 2,764 2,779 2,791 2,792 11,126 (0.5)%
  Other17,034 6,845 6,640 8,200 38,719 148.9 %
      Total noninterest expenses114,798 97,511 88,689 89,666 390,664 17.7 %
Income before income taxes53,682 50,794 45,383 34,552 184,411 5.7 %
Income tax expense5,370 9,317 7,990 5,924 28,601 (42.4)%
      Net income$48,312 $41,477 $37,393 $28,628 $155,810 16.5 %
ADDITIONAL DATA
Net earnings per share - basic$0.50 $0.43 $0.38 $0.29 $1.60 
Net earnings per share - diluted$0.49 $0.42 $0.38 $0.29 $1.59 
Dividends declared per share$0.23 $0.23 $0.23 $0.23 $0.92 
Return on average assets1.20 %1.04 %0.96 %0.79 %1.00 %
Return on average shareholders' equity8.52 %7.40 %6.88 %5.21 %7.02 %
Interest income$130,029 $126,070 $129,360 $139,504 $524,963 3.1 %
Tax equivalent adjustment1,613 1,628 1,664 1,624 6,529 (0.9)%
   Interest income - tax equivalent131,642 127,698 131,024 141,128 531,492 3.1 %
Interest expense11,556 13,890 17,784 25,222 68,452 (16.8)%
   Net interest income - tax equivalent$120,086 $113,808 $113,240 $115,906 $463,040 5.5 %
Net interest margin3.45 %3.32 %3.38 %3.71 %3.46 %
Net interest margin (fully tax equivalent) (2)
3.49 %3.36 %3.44 %3.77 %3.51 %
Full-time equivalent employees2,075 2,065 2,076 2,067 
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.
(2) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% 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 provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.
4

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
2019
FourthThirdSecondFirstFull
QuarterQuarterQuarterQuarterYear
Interest income
  Loans and leases, including fees$122,802 $126,786 $126,365 $123,056 $499,009 
  Investment securities
     Taxable20,137 22,180 23,616 24,235 90,168 
     Tax-exempt4,545 4,457 4,336 4,258 17,596 
        Total investment securities interest24,682 26,637 27,952 28,493 107,764 
  Other earning assets167 222 206 210 805 
       Total interest income147,651 153,645 154,523 151,759 607,578 
Interest expense
  Deposits19,026 20,151 20,612 19,243 79,032 
  Short-term borrowings5,430 7,199 6,646 5,960 25,235 
  Long-term borrowings4,293 4,760 4,963 5,041 19,057 
      Total interest expense28,749 32,110 32,221 30,244 123,324 
      Net interest income118,902 121,535 122,302 121,515 484,254 
  Provision for credit losses-loans and leases (1)
4,629 5,228 6,658 14,083 30,598 
  Provision for credit losses-unfunded commitments (1)
177 (216)(132)6 (165)
      Net interest income after provision for credit losses114,096 116,523 115,776 107,426 453,821 
Noninterest income
  Service charges on deposit accounts9,343 9,874 9,819 8,903 37,939 
  Trust and wealth management fees3,913 3,718 3,943 4,070 15,644 
  Bankcard income3,405 3,316 6,497 5,586 18,804 
  Client derivative fees4,194 4,859 4,905 1,704 15,662 
  Foreign exchange income6,014 1,708 17 0 7,739 
  Net gains from sales of loans4,723 4,806 3,432 1,890 14,851 
  Net gains on sale of investment securities(296)105 (37)(178)(406)
  Other5,472 4,754 6,062 4,852 21,140 
      Total noninterest income36,768 33,140 34,638 26,827 131,373 
Noninterest expenses
  Salaries and employee benefits53,952 53,212 53,985 47,912 209,061 
  Net occupancy6,334 5,509 5,596 6,630 24,069 
  Furniture and equipment4,145 4,120 4,222 3,416 15,903 
  Data processing5,996 5,774 4,984 5,127 21,881 
  Marketing1,980 1,346 1,976 1,606 6,908 
  Communication882 910 747 728 3,267 
  Professional services2,192 4,771 2,039 2,252 11,254 
  State intangible tax1,767 1,445 1,307 1,310 5,829 
  FDIC assessments1,055 (1,097)1,065 950 1,973 
  Intangible amortization 3,150 2,432 2,044 2,045 9,671 
  Other11,434 8,020 6,545 6,517 32,516 
      Total noninterest expenses92,887 86,442 84,510 78,493 342,332 
Income before income taxes57,977 63,221 65,904 55,760 242,862 
Income tax expense (benefit)9,300 12,365 13,201 9,921 44,787 
      Net income$48,677 $50,856 $52,703 $45,839 $198,075 
ADDITIONAL DATA
Net earnings per share - basic$0.49 $0.52 $0.54 $0.47 $2.01 
Net earnings per share - diluted$0.49 $0.51 $0.53 $0.47 $2.00 
Dividends declared per share$0.23 $0.23 $0.22 $0.22 $0.90 
Return on average assets1.34 %1.41 %1.50 %1.33 %1.39 %
Return on average shareholders' equity8.60 %9.13 %9.85 %8.88 %9.11 %
Interest income$147,651 $153,645 $154,523 $151,759 $607,578 
Tax equivalent adjustment1,630 1,759 1,416 1,523 6,328 
   Interest income - tax equivalent149,281 155,404 155,939 153,282 613,906 
Interest expense28,749 32,110 32,221 30,244 123,324 
   Net interest income - tax equivalent$120,532 $123,294 $123,718 $123,038 $490,582 
Net interest margin3.84 %3.91 %3.99 %4.05 %3.95 %
Net interest margin (fully tax equivalent) (2)
3.89 %3.96 %4.04 %4.10 %4.00 %
Full-time equivalent employees2,065 2,064 2,076 2,087 
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.
(2) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% 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 provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.
5

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
Dec. 31,Sep. 30,June 30,Mar. 31,Dec. 31,% Change% Change
20202020202020202019Linked Qtr.Comp Qtr.
ASSETS
     Cash and due from banks$231,054 $207,128 $283,639 $261,892 $200,691 11.6 %15.1 %
     Interest-bearing deposits with other banks20,305 38,806 38,845 71,071 56,948 (47.7)%(64.3)%
     Investment securities available-for-sale3,424,580 3,004,963 2,897,413 2,908,688 2,852,084 14.0 %20.1 %
     Investment securities held-to-maturity131,687 118,072 127,347 136,744 142,862 11.5 %(7.8)%
     Other investments133,198 118,292 132,366 143,581 125,020 12.6 %6.5 %
     Loans held for sale41,103 69,008 43,950 27,334 13,680 (40.4)%200.5 %
     Loans and leases
       Commercial and industrial3,007,509 3,292,313 3,322,374 2,477,773 2,465,877 (8.7)%22.0 %
       Lease financing72,987 74,742 80,087 82,602 88,364 (2.3)%(17.4)%
       Construction real estate636,096 575,648 506,085 500,311 493,182 10.5 %29.0 %
       Commercial real estate4,307,858 4,347,125 4,343,702 4,278,257 4,194,651 (0.9)%2.7 %
       Residential real estate1,003,086 1,027,702 1,043,745 1,061,792 1,055,949 (2.4)%(5.0)%
       Home equity743,099 754,743 764,171 781,243 771,869 (1.5)%(3.7)%
       Installment81,850 84,629 79,150 80,085 82,589 (3.3)%(0.9)%
       Credit card48,485 43,907 42,397 45,756 49,184 10.4 %(1.4)%
          Total loans9,900,970 10,200,809 10,181,711 9,307,819 9,201,665 (2.9)%7.6 %
       Less:
          Allowance for credit losses (1)
175,679 168,544 158,661 143,885 57,650 4.2 %204.7 %
                Net loans 9,725,291 10,032,265 10,023,050 9,163,934 9,144,015 (3.1)%6.4 %
     Premises and equipment207,211 209,474 211,164 212,787 214,506 (1.1)%(3.4)%
     Goodwill 937,771 937,771 937,771 937,771 937,771 0.0 %0.0 %
     Other intangibles64,552 67,419 70,325 73,258 76,201 (4.3)%(15.3)%
     Accrued interest and other assets1,056,382 1,122,449 1,105,020 1,120,507 747,847 (5.9)%41.3 %
       Total Assets$15,973,134 $15,925,647 $15,870,890 $15,057,567 $14,511,625 0.3 %10.1 %
LIABILITIES
     Deposits
       Interest-bearing demand$2,914,787 $2,632,467 $2,657,841 $2,498,109 $2,364,881 10.7 %23.3 %
       Savings3,680,774 3,446,678 3,287,314 2,978,250 2,960,979 6.8 %24.3 %
       Time1,872,733 1,935,392 2,241,212 2,435,858 2,240,441 (3.2)%(16.4)%
          Total interest-bearing deposits8,468,294 8,014,537 8,186,367 7,912,217 7,566,301 5.7 %11.9 %
       Noninterest-bearing3,763,709 3,552,893 3,515,048 2,723,341 2,643,928 5.9 %42.4 %
          Total deposits12,232,003 11,567,430 11,701,415 10,635,558 10,210,229 5.7 %19.8 %
     Federal funds purchased and securities sold
         under agreements to repurchase166,594 247,658 154,347 215,824 165,181 (32.7)%0.9 %
     FHLB short-term borrowings0 0 0 1,181,900 1,151,000 0.0 %(100.0)%
          Total short-term borrowings166,594 247,658 154,347 1,397,724 1,316,181 (32.7)%(87.3)%
     Long-term debt776,202 1,341,164 1,285,767 325,566 414,376 (42.1)%87.3 %
          Total borrowed funds942,796 1,588,822 1,440,114 1,723,290 1,730,557 (40.7)%(45.5)%
     Accrued interest and other liabilities516,265 521,580 508,342 519,336 323,134 (1.0)%59.8 %
       Total Liabilities13,691,064 13,677,832 13,649,871 12,878,184 12,263,920 0.1 %11.6 %
SHAREHOLDERS' EQUITY
     Common stock1,638,947 1,637,489 1,635,070 1,633,950 1,640,771 0.1 %(0.1)%
     Retained earnings720,429 694,484 675,532 660,653 711,249 3.7 %1.3 %
     Accumulated other comprehensive income (loss)48,664 42,266 36,431 11,788 13,323 15.1 %265.3 %
     Treasury stock, at cost(125,970)(126,424)(126,014)(127,008)(117,638)(0.4)%7.1 %
       Total Shareholders' Equity2,282,070 2,247,815 2,221,019 2,179,383 2,247,705 1.5 %1.5 %
       Total Liabilities and Shareholders' Equity$15,973,134 $15,925,647 $15,870,890 $15,057,567 $14,511,625 0.3 %10.1 %
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

6

FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
Quarterly AveragesYear-to-Date Averages
Dec. 31,Sep. 30,June 30,Mar. 31,Dec. 31,Dec. 31,
2020202020202020201920202019
ASSETS
     Cash and due from banks$228,427 $233,216 $284,726 $235,696 $221,060 $245,436 $191,864 
     Interest-bearing deposits with other banks143,884 40,277 91,990 39,332 36,672 78,943 35,814 
     Investment securities3,403,839 3,162,832 3,164,243 3,115,723 3,102,867 3,212,051 3,288,875 
     Loans held for sale42,402 45,186 36,592 13,174 21,050 34,390 14,774 
     Loans and leases
       Commercial and industrial3,182,749 3,299,259 3,058,677 2,450,893 2,469,810 2,999,223 2,505,615 
       Lease financing74,107 78,500 81,218 85,782 91,225 79,882 92,902 
       Construction real estate608,401 536,870 495,407 501,471 501,892 535,740 491,503 
       Commercial real estate4,313,408 4,364,708 4,381,647 4,209,345 4,102,288 4,317,396 3,906,992 
       Residential real estate1,022,701 1,041,250 1,052,996 1,055,456 1,053,707 1,043,040 1,010,620 
       Home equity752,425 759,994 772,424 773,082 773,119 764,436 787,716 
       Installment83,509 82,016 79,016 81,234 85,515 81,451 88,815 
       Credit card48,179 45,609 44,402 50,206 50,616 47,098 49,598 
          Total loans10,085,479 10,208,206 9,965,787 9,207,469 9,128,172 9,868,266 8,933,761 
       Less:
          Allowance for credit losses (1)
172,201 165,270 155,454 121,126 56,649 153,596 58,504 
                Net loans 9,913,278 10,042,936 9,810,333 9,086,343 9,071,523 9,714,670 8,875,257 
     Premises and equipment208,800 211,454 213,903 215,545 215,171 212,413 213,951 
     Goodwill 937,771 937,771 937,771 937,771 937,710 937,771 899,131 
     Other intangibles66,195 69,169 72,086 75,014 78,190 70,600 51,884 
     Accrued interest and other assets1,086,390 1,099,169 1,098,560 805,824 776,045 1,022,870 639,169 
       Total Assets$16,030,986 $15,842,010 $15,710,204 $14,524,422 $14,460,288 $15,529,144 $14,210,719 
LIABILITIES
     Deposits
       Interest-bearing demand$2,812,748 $2,668,635 $2,602,917 $2,418,193 $2,373,962 $2,626,252 $2,326,193 
       Savings3,547,179 3,342,514 3,173,274 2,976,518 2,995,395 3,260,882 3,027,725 
       Time1,844,379 2,015,933 2,619,038 2,196,080 2,214,174 2,167,553 2,223,429 
          Total interest-bearing deposits8,204,306 8,027,082 8,395,229 7,590,791 7,583,531 8,054,687 7,577,347 
       Noninterest-bearing3,720,417 3,535,432 3,335,866 2,643,240 2,638,908 3,310,483 2,524,011 
          Total deposits11,924,723 11,562,514 11,731,095 10,234,031 10,222,439 11,365,170 10,101,358 
     Federal funds purchased and securities sold
          under agreements to repurchase136,795 150,088 145,291 164,093 206,800 149,036 155,859 
     FHLB short-term borrowings7,937 30,868 548,183 1,189,765 952,625 441,867 990,860 
          Total short-term borrowings144,732 180,956 693,474 1,353,858 1,159,425 590,903 1,146,719 
     Long-term debt1,162,729 1,338,792 579,345 381,909 454,271 867,798 522,340 
       Total borrowed funds1,307,461 1,519,748 1,272,819 1,735,767 1,613,696 1,458,701 1,669,059 
     Accrued interest and other liabilities542,740 529,326 520,425 344,891 379,046 484,628 265,623 
       Total Liabilities13,774,924 13,611,588 13,524,339 12,314,689 12,215,181 13,308,499 12,036,040 
SHAREHOLDERS' EQUITY
     Common stock1,638,032 1,636,107 1,634,405 1,638,851 1,640,066 1,636,850 1,629,434 
     Retained earnings703,257 679,980 658,312 660,108 691,236 675,503 650,381 
     Accumulated other comprehensive loss40,960 40,697 19,888 31,200 13,986 33,228 (6,480)
     Treasury stock, at cost(126,187)(126,362)(126,740)(120,426)(100,181)(124,936)(98,656)
       Total Shareholders' Equity2,256,062 2,230,422 2,185,865 2,209,733 2,245,107 2,220,645 2,174,679 
       Total Liabilities and Shareholders' Equity$16,030,986 $15,842,010 $15,710,204 $14,524,422 $14,460,288 $15,529,144 $14,210,719 
(1) Beginning January 1,2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on the incurred loss methodology.

7

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)
 Quarterly AveragesYear-to-Date Averages
December 31, 2020September 30, 2020December 31, 2019December 31, 2020December 31, 2019
BalanceYieldBalanceYieldBalanceYieldBalanceYieldBalanceYield
Earning assets
    Investments:
      Investment securities$3,403,839 2.71 %$3,162,832 2.86 %$3,102,867 3.16 %$3,212,051 2.90 %$3,288,875 3.28 %
      Interest-bearing deposits with other banks143,884 0.15 %40,277 0.31 %36,672 1.81 %78,943 0.35 %35,814 2.25 %
    Gross loans (1)
10,127,881 4.18 %10,253,392 4.00 %9,149,222 5.33 %9,902,656 4.36 %8,948,535 5.58 %
       Total earning assets13,675,604 3.77 %13,456,501 3.72 %12,288,761 4.77 %13,193,650 3.98 %12,273,224 4.95 %
Nonearning assets
    Allowance for credit losses(172,201)(165,270)(56,649)(153,596)(58,504)
    Cash and due from banks228,427 233,216 221,060 245,436 191,864 
    Accrued interest and other assets2,299,156 2,317,563 2,007,116 2,243,654 1,804,135 
       Total assets$16,030,986 $15,842,010 $14,460,288 $15,529,144 $14,210,719 
Interest-bearing liabilities
    Deposits:
      Interest-bearing demand$2,812,748 0.08 %$2,668,635 0.08 %$2,373,962 0.53 %$2,626,252 0.17 %$2,326,193 0.55 %
      Savings3,547,179 0.15 %3,342,514 0.14 %2,995,395 0.60 %3,260,882 0.22 %3,027,725 0.71 %
      Time1,844,379 0.86 %2,015,933 1.20 %2,214,174 2.03 %2,167,553 1.39 %2,223,429 2.02 %
    Total interest-bearing deposits8,204,306 0.29 %8,027,082 0.39 %7,583,531 1.00 %8,054,687 0.52 %7,577,347 1.04 %
    Borrowed funds
      Short-term borrowings144,732 0.08 %180,956 0.11 %1,159,425 1.86 %590,903 1.09 %1,146,719 2.20 %
      Long-term debt1,162,729 1.91 %1,338,792 1.76 %454,271 3.75 %867,798 2.31 %522,340 3.65 %
        Total borrowed funds1,307,461 1.71 %1,519,748 1.57 %1,613,696 2.39 %1,458,701 1.82 %1,669,059 2.65 %
       Total interest-bearing liabilities9,511,767 0.48 %9,546,830 0.58 %9,197,227 1.24 %9,513,388 0.72 %9,246,406 1.33 %
Noninterest-bearing liabilities
    Noninterest-bearing demand deposits3,720,417 3,535,432 2,638,908 3,310,483 2,524,011 
    Other liabilities542,740 529,326 379,046 484,628 265,623 
    Shareholders' equity2,256,062 2,230,422 2,245,107 2,220,645 2,174,679 
       Total liabilities & shareholders' equity$16,030,986 $15,842,010 $14,460,288 $15,529,144 $14,210,719 
Net interest income $118,473 $112,180 $118,902 $456,511 $484,254 
Net interest spread 3.29 %3.14 %3.53 %3.26 %3.62 %
Net interest margin 3.45 %3.32 %3.84 %3.46 %3.95 %
Tax equivalent adjustment0.04 %0.04 %0.05 %0.05 %0.05 %
Net interest margin (fully tax equivalent)3.49 %3.36 %3.89 %3.51 %4.00 %
(1) Loans held for sale and nonaccrual loans are included in gross loans.
8

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS (1)
(Dollars in thousands)
(Unaudited)
 Linked Qtr. Income Variance Comparable Qtr. Income VarianceYear-to-Date Income Variance
RateVolumeTotalRateVolumeTotalRateVolumeTotal
Earning assets
    Investment securities$(1,195)$1,646 $451 $(3,496)$2,055 $(1,441)$(12,508)$(2,225)$(14,733)
    Interest-bearing deposits with other banks(16)40 24 (153)41 (112)(680)150 (530)
    Gross loans (2)
4,807 (1,323)3,484 (26,383)10,314 (16,069)(108,942)41,590 (67,352)
       Total earning assets3,596 363 3,959 (30,032)12,410 (17,622)(122,130)39,515 (82,615)
Interest-bearing liabilities
    Total interest-bearing deposits$(2,094)$128 $(1,966)$(13,554)$448 $(13,106)$(39,594)$2,484 $(37,110)
    Borrowed funds
    Short-term borrowings(13)(8)(21)(5,190)(210)(5,400)(12,734)(6,059)(18,793)
    Long-term debt502 (849)(347)(2,103)3,416 1,313 (6,966)7,997 1,031 
       Total borrowed funds489 (857)(368)(7,293)3,206 (4,087)(19,700)1,938 (17,762)
       Total interest-bearing liabilities(1,605)(729)(2,334)(20,847)3,654 (17,193)(59,294)4,422 (54,872)
          Net interest income (1)
$5,201 $1,092 $6,293 $(9,185)$8,756 $(429)$(62,836)$35,093 $(27,743)
(1) Not tax equivalent.
(2) Loans held for sale and nonaccrual loans are included in gross loans.


9

FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)
Dec. 31,Sep. 30,June 30,Mar. 31,Dec. 31,Full YearFull Year
2020202020202020201920202019
ALLOWANCE FOR CREDIT LOSS ACTIVITY
Balance at beginning of period$168,544 $158,661 $143,885 $57,650 $56,552 $57,650 $56,542 
 Day one adoption impact of ASC 3260 0 0 61,505 0 61,505 0 
  Provision for credit losses13,758 15,299 17,859 23,880 4,629 70,796 30,598 
  Gross charge-offs
    Commercial and industrial1,505 1,467 1,282 1,091 2,919 5,345 26,676 
    Lease financing0 852 0 0 62 852 162 
    Construction real estate0 0 0 0 0 0 0 
    Commercial real estate6,270 3,789 2,037 4 1,854 12,100 3,689 
    Residential real estate203 22 148 115 167 488 677 
    Home equity386 460 428 267 807 1,541 2,591 
    Installment21 59 7 61 31 148 223 
    Credit card169 171 234 311 319 885 1,547 
      Total gross charge-offs 8,554 6,820 4,136 1,849 6,159 21,359 35,565 
  Recoveries
    Commercial and industrial367 265 275 2,000 1,796 2,907 2,883 
    Lease financing(6)6 0 0 0 0 0 
    Construction real estate3 0 14 0 0 17 68 
    Commercial real estate844 760 424 234 439 2,262 1,113 
    Residential real estate145 91 93 52 72 381 273 
    Home equity428 209 156 339 243 1,132 1,335 
    Installment65 35 27 31 49 158 251 
    Credit card85 38 64 43 29 230 152 
      Total recoveries1,931 1,404 1,053 2,699 2,628 7,087 6,075 
  Total net charge-offs6,623 5,416 3,083 (850)3,531 14,272 29,490 
Ending allowance for credit losses$175,679 $168,544 $158,661 $143,885 $57,650 $175,679 $57,650 
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
  Commercial and industrial0.14 %0.14 %0.13 %(0.15)%0.18 %0.08 %0.95 %
  Lease financing0.03 %4.29 %0.00 %0.00 %0.27 %1.07 %0.17 %
  Construction real estate0.00 %0.00 %(0.01)%0.00 %0.00 %0.00 %(0.01)%
  Commercial real estate0.50 %0.28 %0.15 %(0.02)%0.14 %0.23 %0.07 %
  Residential real estate0.02 %(0.03)%0.02 %0.02 %0.04 %0.01 %0.04 %
  Home equity(0.02)%0.13 %0.14 %(0.04)%0.29 %0.05 %0.16 %
  Installment(0.21)%0.12 %(0.10)%0.15 %(0.08)%(0.01)%(0.03)%
  Credit card0.69 %1.16 %1.54 %2.15 %2.27 %1.39 %2.81 %
     Total net charge-offs0.26 %0.21 %0.12 %(0.04)%0.15 %0.14 %0.33 %
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
  Nonaccrual loans (1)
    Commercial and industrial$29,230 $34,686 $33,906 $21,126 $24,346 $29,230 $24,346 
    Lease financing0 1,092 1,353 222 223 0 223 
    Construction real estate0 0 0 0 0 0 0 
    Commercial real estate34,682 24,521 14,002 10,050 7,295 34,682 7,295 
    Residential real estate11,601 12,104 12,813 11,163 10,892 11,601 10,892 
    Home equity5,076 5,374 5,604 5,821 5,242 5,076 5,242 
    Installment163 153 201 145 167 163 167 
      Nonaccrual loans80,752 77,930 67,879 48,527 48,165 80,752 48,165 
  Accruing troubled debt restructurings (TDRs)7,099 7,759 8,377 22,206 11,435 7,099 11,435 
     Total nonperforming loans87,851 85,689 76,256 70,733 59,600 87,851 59,600 
  Other real estate owned (OREO)1,287 1,643 1,872 1,467 2,033 1,287 2,033 
     Total nonperforming assets89,138 87,332 78,128 72,200 61,633 89,138 61,633 
  Accruing loans past due 90 days or more169 79 124 120 201 169 201 
     Total underperforming assets$89,307 $87,411 $78,252 $72,320 $61,834 $89,307 $61,834 
Total classified assets$142,021 $134,002 $125,543 $124,510 $89,250 $142,021 $89,250 
CREDIT QUALITY RATIOS
Allowance for credit losses to
     Nonaccrual loans217.55 %216.28 %233.74 %296.51 %119.69 %217.55 %119.69 %
     Nonperforming loans199.97 %196.69 %208.06 %203.42 %96.73 %199.97 %96.73 %
     Total ending loans1.77 %1.65 %1.56 %1.55 %0.63 %1.77 %0.63 %
Nonperforming loans to total loans0.89 %0.84 %0.75 %0.76 %0.65 %0.89 %0.65 %
Nonperforming assets to
     Ending loans, plus OREO0.90 %0.86 %0.77 %0.78 %0.67 %0.90 %0.67 %
     Total assets0.56 %0.55 %0.49 %0.48 %0.42 %0.56 %0.42 %
Nonperforming assets, excluding accruing TDRs to
     Ending loans, plus OREO0.83 %0.78 %0.68 %0.54 %0.55 %0.83 %0.55 %
     Total assets0.51 %0.50 %0.44 %0.33 %0.35 %0.51 %0.35 %
Classified assets to total assets0.89 %0.84 %0.79 %0.83 %0.62 %0.89 %0.62 %
(1) Nonaccrual loans include nonaccrual TDRs of $14.7 million, $29.3 million, $32.7 million, $18.4 million, and $18.5 million, as of December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019,, respectively.

10

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)
Twelve months ended,
Dec. 31,Sep. 30,June 30,Mar. 31,Dec. 31,Dec. 31,Dec. 31,
2020202020202020201920202019
PER COMMON SHARE
Market Price
  High$17.77 $15.15 $16.38 $25.52 $26.04 $25.52 $28.56 
  Low$12.07 $11.40 $11.52 $12.67 $23.24 $11.40 $22.16 
  Close$17.53 $12.01 $13.89 $14.91 $25.44 $17.53 $25.44 
Average shares outstanding - basic97,253,787 97,247,080 97,220,748 97,736,690 98,684,706 97,363,952 98,305,570 
Average shares outstanding - diluted98,020,534 98,008,733 97,988,600 98,356,214 99,232,167 98,093,098 98,851,471 
Ending shares outstanding98,021,929 97,999,763 98,018,858 97,968,958 98,490,998 98,021,929 98,490,998 
Total shareholders' equity$2,282,070 $2,247,815 $2,221,019 $2,179,383 $2,247,705 $2,282,070 $2,247,705 
REGULATORY CAPITALPreliminaryPreliminary
Common equity tier 1 capital$1,325,922 $1,293,716 $1,267,609 $1,243,152 $1,245,746 $1,325,922 $1,245,746 
Common equity tier 1 capital ratio11.82 %11.63 %11.49 %11.27 %11.30 %11.82 %11.30 %
Tier 1 capital$1,368,818 $1,336,497 $1,310,276 $1,285,705 $1,288,185 $1,368,818 $1,288,185 
Tier 1 ratio12.20 %12.02 %11.87 %11.66 %11.69 %12.20 %11.69 %
Total capital$1,744,802 $1,708,817 $1,676,532 $1,493,100 $1,475,813 $1,744,802 $1,475,813 
Total capital ratio15.55 %15.37 %15.19 %13.54 %13.39 %15.55 %13.39 %
Total capital in excess of minimum requirement$566,795 $541,263 $517,902 $335,229 $318,315 $566,795 $318,315 
Total risk-weighted assets$11,219,114 $11,119,560 $11,034,570 $11,027,347 $11,023,795 $11,219,114 $11,023,795 
Leverage ratio9.55 %9.55 %8.98 %9.49 %9.58 %9.55 %9.58 %
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets14.29 %14.11 %13.99 %14.47 %15.49 %14.29 %15.49 %
Ending tangible shareholders' equity to ending tangible assets8.47 %8.25 %8.09 %8.25 %9.07 %8.47 %9.07 %
Average shareholders' equity to average assets14.07 %14.08 %13.91 %15.21 %15.53 %14.30 %15.30 %
Average tangible shareholders' equity to average tangible assets8.26 %8.18 %7.94 %8.79 %9.07 %8.28 %9.16 %
REPURCHASE PROGRAM (1)
Shares repurchased0 0 0 880,000 1,609,778 880,000 2,753,272 
Average share repurchase priceN/AN/AN/A$18.96 $24.13 $18.96 $24.05 
Total cost of shares repurchasedN/AN/AN/A$16,686 $38,846 $16,686 $66,218 
(1) Represents share repurchases as part of publicly announced plans.
N/A = Not applicable
11