First Financial Bancorp Announces Fourth Quarter and Full Year 2024 Financial Results

Fourth quarter 2024 highlights include:

• Robust net interest margin of 3.91%, or 3.94% on a fully tax-equivalent basis⁽¹⁾
  • 14 bp decline from third quarter, in line with initial expectations 
  • 13 bp decline in cost of deposits and favorable shift in funding mix offset by 37 bp decline in loan yields

• Noninterest income of $69.9 million, or $69.7 million as adjusted⁽¹⁾ 
  • Adjustments include $0.1 million gain on securities
  • Record wealth management income
  • Strong results from foreign exchange and leasing businesses

• Noninterest expenses of $147.9 million, or $130.9 million as adjusted⁽¹⁾; 5.0% increase from linked quarter
  • Fourth quarter adjustments⁽¹⁾ include $4.7 million of efficiency related costs, $14.3 million of tax credit writedowns, $1.0 million of state tax credits and $2.0 million of gains on the sale of previously closed branches
  • Increase from prior quarter driven by higher incentive compensation tied to increase in noninterest income and overall company performance
  • Efficiency ratio of 66.0%; 58.4% as adjusted⁽¹⁾

• Broad-based loan growth during the quarter
  • Loan balances increased $208.7 million compared to the linked quarter; 7% annualized growth
  • Growth driven by C&I, ICRE, leasing and mortgage

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⁽¹⁾ Non-GAAP measure.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

• Average deposit growth surged during the quarter
  • Average deposits increased $543.1 million, or 15.7% on an annualized basis
  • Growth across most product types offset a decline in brokered CDs and savings

• Total Allowance for Credit Losses of $173.7 million; Total quarterly provision expense of $9.4 million
  • Loans and leases - ACL of $156.8 million; ratio to total loans of 1.33% declined 4 bps from third quarter
  • Unfunded Commitments - ACL of $16.9 million
  • Provision expense driven by net charge offs, slower prepayment rates and loan growth
  • Classified assets increased 7 bps to 1.21% of total assets
  • Annualized net charge-offs were 40 bps of total loans; 30 bps for full year

• Capital ratios stable and strong 
  • Total capital ratio decreased 15 bps to 14.43%
  • Tier 1 common equity increased 12 bps to 12.16%
  • Tangible common equity of 7.73%⁽¹⁾; 9.39%⁽¹⁾ excluding impact from AOCI
  • Tangible book value per share of $14.15⁽¹⁾

Archie Brown, President and CEO, commented on the quarter, "I am very pleased with our fourth quarter performance.  Adjusted⁽¹⁾ earnings per share were $0.71, leading to an adjusted⁽¹⁾ return on assets of 1.47%, and an adjusted⁽¹⁾ return on tangible common equity ratio of 19.90%.  As expected, due to decreases in short term rates by the Fed, the decline in asset yields outpaced the decline in deposit costs, leading to a reduction in our net interest margin to 3.94%.  Balance sheet trends were very strong for the quarter with loan growth exceeding 7% on an annualized basis and total deposits surging by approximately 16% on an annualized basis." 

Mr. Brown continued, "Adjusted⁽¹⁾ noninterest income was robust in the fourth quarter with leasing, foreign exchange and wealth management income all increasing by double-digit percentages from the linked quarter.  While adjusted⁽¹⁾ expenses increased by 5% from the linked quarter, the increase was driven by higher incentive compensation tied to the strong fee income and overall company performance.  Our workforce efficiency initiative continued during the quarter, and we have eliminated 145 positions to date.  We expect to complete this work in 2025." 

Mr. Brown commented on asset quality, "Asset quality was relatively stable for the quarter.  Nonperforming assets were flat compared to the linked quarter at 0.36%, while classified assets increased by 7 basis points to 1.21%.  The increase in classified assets was driven by the mutually agreed upon termination of a foreign exchange trade, resulting in a $45 million obligation from the customer, which we believe is fully collateralized.  We expect the customer to pay this obligation in 2025.  Net charge-offs were slightly elevated due to the resolution of three loans that have been longer term workouts.  We believe that overall credit trends are improving and, as a result, we anticipate lower credit costs going forward."

Mr. Brown highlighted full year results.  "2024 was an excellent year for our Company.  On an adjusted⁽¹⁾ basis, we earned $249 million, or $2.61 per share.  Adjusted⁽¹⁾ return on assets was 1.40% and adjusted⁽¹⁾ return on tangible common equity was 19.9%.  While the net interest margin declined from 4.40% to 4.05%, due to declining short-term rates, strong loan growth offset most of the impact with net interest income declining by only 2.5%.  Noninterest income increased by 13.3% to a record $241.8 million, led by growth in leasing and wealth management income.  The result was record revenue for the Company of $853.8 million, which was a 2% increase over 2023."

Mr. Brown continued, "I am very pleased with our balance sheet growth for the year.  Total loans increased by 7.6% to $11.8 billion and total deposits increased by 7.2% to $14.3 billion.  Additionally, tangible common equity increased by 56 basis points to 7.73% and tangible book value per share increased from $12.38 to $14.15, which was a 14.3% increase."

Mr. Brown commented on asset quality, "Similar to the fourth quarter, asset quality was relatively stable for the year.  Net charge-offs as a percent of average loans declined 3 basis points to 0.30% and nonperforming assets as a percent of total assets declined by 2 basis points to 0.36%." 

Mr. Brown concluded, "During the year, we were excited to add the Agile team and I want to thank them for making an immediate contribution to our Company.  We continued to gain momentum in our expansion markets, Chicago, IL, Evansville, IN and Cleveland, OH and at the beginning of 2025, we expanded into Grand Rapids, MI with a commercial banking team.  We look forward to the continued growth and success of our expansion strategies.  Performing at a consistently high level requires an engaged team that is committed to its clients.  This describes the team at First Financial.  I want to thank our associates for their outstanding work in 2024."

Full detail of the Company's fourth quarter 2024 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, January 24, 2025 at 8:30 a.m. Eastern Time.  Members of the public who would like to listen to the conference call should dial (888) 550-5723 (U.S. toll free) or (646) 960-0471 (U.S. local), access code 5048068.  The number should be dialed five to ten minutes prior to the start of the conference call.  A replay of the conference call will be available beginning one hour after the completion of the live call at (800) 770-2030 (U.S. toll free), (609) 800-9099 (U.S. toll), access code 5048068.  The recording will be available until February 7, 2025.  The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com. The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

Press Release and Additional Information on Website
This press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com.

Use of Non-GAAP Financial Measures
This earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company's results of operations or financial position.  Where Non-GAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Forward-Looking Statements
Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as ''believes,'' ''anticipates,'' "likely," "expected," "estimated," ''intends'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements.  Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements.  Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:

• economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company's business;
• future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses
• the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; 
• Management's ability to effectively execute its business plans;
• mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;
• the possibility that any of the anticipated benefits of the Company's acquisitions will not be realized or will not be realized within the expected time period;
• the effect of changes in accounting policies and practices;
• changes in consumer spending, borrowing and saving and changes in unemployment;
• changes in customers' performance and creditworthiness;
• the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;  
• current and future economic and market conditions, including the effects of changes in housing prices, fluctuations in unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth;
• the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 ("COVID-19"), global pandemic, and the impact  on the performance of our loan and lease portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products;
• our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
• financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
• the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
• the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses;
• a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;
• the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and
• our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2023, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov.  

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing.  Except as required by law, the Company does not assume any obligation to update any forward-looking statement.

About First Financial Bancorp.
First Financial Bancorp. is a Cincinnati, Ohio based bank holding company.  As of December 31, 2024, the Company had $18.6 billion in assets, $11.8 billion in loans, $14.3 billion in deposits and $2.4 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 $3.7 billion in assets under management as of December 31, 2024.  The Company operated 127 full service banking centers as of December 31, 2024, located in Ohio, Indiana, Kentucky and Illinois, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis.  Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.