CINCINNATI, Jan. 26, 2011 /PRNewswire/ -- First Financial
Bancorp (Nasdaq: FFBC) ("First Financial" or the "Company")
announced today financial and operational results for the fourth
quarter 2010 and for the twelve month period ended December 31, 2010.
Fourth quarter 2010 net income and net income available to
common shareholders were $14.3
million and earnings per diluted common share were
$0.24. This compares with third
quarter 2010 net income and net income available to common
shareholders of $15.6 million and
earnings per diluted common share of $0.27 and fourth quarter 2009 net income of
$13.8 million, net income available
to common shareholders of $12.8
million and earnings per diluted common share of
$0.25.
For the twelve month period ended December 31, 2010, net income was $59.3 million, net income available to common
shareholders was $57.4 million and
earnings per diluted common share were $0.99 as compared to net income of $221.3 million, net income available to common
shareholders of $217.8 million and
earnings per diluted common share of $4.78 for the twelve month period ended
December 31, 2009. Included in
the financial results for 2009 was a pre-tax bargain purchase gain
of $342.5 million recognized during
the third quarter 2009 in connection with the Company's
FDIC-assisted transactions.
- 81st consecutive quarter of profitability
- Continued strong quarterly performance
- Quarterly return on average assets of 0.90%; full year return
on average assets of 0.91%
- Quarterly return on average shareholders' equity of 8.14%; full
year return on average shareholders' equity of 8.68%
- Quarterly return on risk-weighted assets of 1.54%; full year
return on risk-weighted assets of 1.56%
- Board of directors announces 20% increase in the quarterly
dividend to $0.12 per share
- Earnings consistency provides capacity to support higher
payout
- Robust capital levels still allow ability to take advantage of
strategic opportunities
- Strong focus on sales leads to increases across business lines
- Quarterly growth in commercial loans of 4.8%
- Residential mortgage originations up 61% over third
quarter
- Strategic transaction and savings deposits increased 7.1%
during the quarter
- Capital ratios remain among industry leaders
- Tangible common equity to tangible assets of 10.33%
- Tier 1 capital ratio of 18.45%
- Total risk-based capital of 19.72%
- Quarterly net interest margin increased to 4.65%
- Continued positive impact from runoff of retail and brokered
certificates of deposit and disciplined pricing strategies
- Full quarter impact of prepayment of FHLB advances
- Improved credit quality
- Total NPLs decreased 11.2% from the prior quarter to
$70.6 million
- Total NPAs decreased 9.5% from the prior quarter to
$88.5 million
- Net loan charge-offs related to uncovered loans increased to
$9.8 million from $6.8 million for the linked quarter, but down
13.5% compared to December 31,
2009
- Provision for uncovered loan losses of $9.7 million
- Balance sheet risk continues to remain low
- FDIC loss share coverage on 34.5% of loan portfolio
- 100% risk-weighted assets continue to represent less than 50%
of balance sheet
Claude Davis, President and Chief
Executive Officer, commented, "We ended the year with solid
financial and operational performance. 2010 was a year in
which we focused on the successful integration of our 2009
acquisitions and continued executing our strategic plan.
Evaluation of both our legacy franchise and the operations we
acquired in 2009 is an ongoing process as we remain committed to
making prudent decisions that focus on building shareholder value.
"The board of directors is pleased to announce an increase to
the quarterly dividend by $0.02 to
$0.12 per share. Despite uncertainty related to future
regulatory capital requirements, our strong capital levels continue
to grow as a result of our earnings power. We believe our
capital position will remain at levels allowing us to take full
advantage of growth opportunities in our strategic markets.
"During the fourth quarter, we also made progress in improving
our level of nonperforming assets as NPAs to total assets decreased
to 1.42% from 1.59% at the end of the third quarter. We have
seen improvement in the status of some of our previously stressed
borrowers and our continued efforts to address problem credits have
met with some success as we finalized resolution strategies on
several nonperforming loans. However, as the economy is still
lagging, we remain vigilant in the monitoring of our portfolio.
"While prudent lending opportunities continue to be limited in
our core markets, we were encouraged as new loan originations
outpaced amortizations and paydowns for the first time in 2010.
Specifically, we saw modest growth in our commercial and
commercial real estate portfolios and we remain confident that our
client-oriented community bank business model will allow us to take
advantage of a greater number of lending opportunities in
2011."
SECTION I – RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income on a fully tax-equivalent basis for the
fourth quarter 2010 was $68.1 million
as compared to the third quarter 2010 and $73.5 million as compared to the year-over-year
period. Despite a lower level of average interest earning
assets relative to the linked quarter and a decrease in interest
earned on the FDIC indemnification asset, net interest income was
impacted by a decrease in interest expense resulting from lower
time and brokered deposit balances and the prepayment of FHLB
advances during the third quarter 2010. The decrease compared
to the year-over-year quarter was driven by a 7.2% decline in
average interest earning assets and a decline in the yield on
earning assets, including a 154 bp reduction in the yield earned on
investment securities.
For the twelve month period ended December 31, 2010, net interest income on a fully
tax-equivalent basis was $276.4
million as compared to $177.2
million for the comparable period in 2009. The
increase of $99.2 million was driven
by higher levels of average interest-earning assets and
interest-bearing liabilities resulting from the 2009 acquisitions
as well as a significant increase in the net interest margin.
NET INTEREST MARGIN
Net interest margin was 4.65% for the fourth quarter 2010 as
compared to 4.59% for the third quarter 2010 and 4.65% for the
fourth quarter 2009. As in prior quarters, the net interest
margin continued to be negatively impacted by the combination of
normal amortization and paydowns in both the legacy and acquired
loan portfolios and reduced loan demand in the Company's strategic
markets. The Company did realize a full quarter of positive
impact, however, related to the third quarter 2010 prepayment of
$232 million of FHLB advances.
First Financial also used a portion of its liquidity to
purchase $364.2 million of agency
mortgage backed securities, which, when combined with prior
quarters' purchases, helped to offset the net effect of muted loan
activity. Additionally, net interest margin was positively
impacted by the expected runoff of retail and brokered certificates
of deposit and the lower earning asset base during the quarter.
Net interest margin was also affected by certain activity
related to the acquired loan portfolio. The majority of these
loans are accounted for under ASC Topic 310-30 and, as such, the
Company is required to periodically update its forecast of expected
cash flows from these loans. The Company recognized an
improvement in the cash flow expectations related to certain loan
pools, which is reflected as a yield adjustment on a prospective
basis. However, this yield improvement will be offset as the
Company also recognized a decline in expected cash flows, and,
hence, a lower prospective yield, related to the FDIC
indemnification asset.
The following table shows the estimated yield earned by the
Company on its legacy and originated loan portfolio, acquired loan
portfolio and the FDIC indemnification asset for the three months
ended December 31, 2010.
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Table I
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For the
Three Months Ended
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December 31,
2010
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Average
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Balance
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Yield
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Legacy and originated loan
portfolio (1)
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$ 2,949,524
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5.36%
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Acquired loan portfolio
accounted for under ASC Topic 310-30 (2)
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1,406,311
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10.29%
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FDIC indemnification asset
(2)
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232,734
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0.40%
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Total
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$4,588,569
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6.59%
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(1) Includes acquired
revolving loans not accounted for under ASC Topic 310-30; yield
estimated at
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time of origination
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(2) Future yield
adjustments subject to change based on required, periodic valuation
procedures
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As part of its on-going valuation procedures, the Company
experienced a $17.3 million net
improvement in the cash flow expectations related to certain loan
pools during the fourth quarter 2010. As a result, the
average yield earned on covered loans increased from 9.75% during
the third quarter 2010 to 10.29% during the fourth quarter 2010.
On a prospective basis and until its next periodic valuation,
the Company expects the yield on covered loans to be 10.41%.
This projected improvement in cash flow expectations on loans is
offset by a related $13.6 million
decline in cash flow expectations on the FDIC indemnification
asset. The net result of improvement and impairment
(discussed in more detail in Section II) activity related to
covered loans affected the average yield earned on the
indemnification asset, decreasing from 3.91% during the third
quarter 2010 to 0.40% during the fourth quarter 2010. On a
prospective basis and until its next periodic valuation, the
Company expects the yield on the indemnification asset to be
-0.76%.
Net interest margin for the twelve month period ended
December 31, 2010 was 4.66% as
compared to 4.05% for the twelve month period ended December 31, 2009.
NONINTEREST INCOME
The following table presents noninterest income for the three
months ended December 31,
September 30, June 30 and March 31,
2010 as well as for the twelve months ended December 31, 2010 highlighting the estimated
impact of covered loan activity and other transition items on the
Company's reported balance.
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Table II
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For the
Twelve
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For the
Three Months Ended
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Months
Ended
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December
31,
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September
30,
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June
30,
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March
31,
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December
31,
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(Dollars in
thousands)
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2010
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2010
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2010
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2010
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2010
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Total noninterest
income
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$
34,534
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$
44,895
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$ 40,467
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$ 26,935
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$
146,831
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Significant components of
noninterest income
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Items likely to
recur:
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Accelerated discount on
loan prepayments and
dispositions (1),
(2)
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6,113
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9,448
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7,408
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6,098
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29,067
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FDIC loss sharing
income
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11,306
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17,800
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15,170
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7,568
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51,844
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Other
acquired-non-strategic income
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527
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44
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475
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80
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1,126
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Transition-related
items
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-
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-
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-
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366
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366
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Items expected not to
recur:
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Gain on sale of insurance
business
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-
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1,356
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-
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-
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1,356
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FDIC settlement and other
items not expected to recur
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551
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(132)
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2,930
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-
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3,349
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Total excluding items
noted above
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$
16,037
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$
16,379
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$ 14,484
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$ 12,823
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$
59,723
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(1) See Section II for
additional information
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(2) Net of the
corresponding valuation adjustment on the FDIC indemnification
asset
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During the quarterly periods presented above, excluding
reimbursements due from the FDIC resulting from loss share
agreements, covered loan activity positively impacted noninterest
income due to loan prepayments. This activity is discussed in
more detail in Section II. There were no sales of
covered loans or loans related to the Company's franchise finance
business during the fourth quarter 2010. Periodic sales of loans
originated by the franchise finance unit may occur in future
periods in order to mitigate credit and geographic concentration
risk within the franchise portfolio.
Excluding the items highlighted in Table II, estimated
noninterest income earned in the fourth quarter 2010 was
$16.0 million as compared to
$16.4 million in the third quarter
2010 and $14.5 million in the fourth
quarter 2009.
For the twelve month period ended December 31, 2010, noninterest income totaled
$146.8 million as compared to
$404.7 million for the similar
year-over-year period. Excluding the items highlighted in
Table II, the bargain purchase gain on the acquisitions recognized
during the third quarter 2009, gains on sales of investments and
the gain on sale of the property & casualty portion of the
insurance business which occurred during the first quarter 2009,
noninterest income was $59.7 million
for the twelve month period ended December
31, 2010 as compared to $48.1
million for the twelve months ended December 31, 2009. The increase in the
comparable year-over-year quarter was driven primarily by higher
service charges on deposit accounts resulting from an increase in
transaction-based deposits and increased bankcard income as a
result of the 2009 acquisitions as well as higher gains on sales of
loans from increased mortgage origination activity.
NONINTEREST EXPENSE
The following table presents noninterest expense for the three
months ended December 31,
September 30, June 30 and March 31,
2010 as well as for the twelve months ended December 31, 2010 including the estimated effect
of acquired-non-strategic operations, acquisition-related costs and
other transition items.
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Table III
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For the
Twelve
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For the
Three Months Ended
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Months
Ended
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December
31,
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September
30,
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June
30,
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March
31,
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December
31,
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(Dollars in
thousands)
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2010
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2010
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2010
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2010
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2010
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Total noninterest
expense
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$
56,290
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$
61,310
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$ 55,819
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$ 60,261
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$
233,680
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Significant components of
noninterest expense
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Items likely to
recur:
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Acquired-non-strategic
operating
expenses
(1)
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4,052
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566
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1,270
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2,201
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8,089
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Transition-related items
(1)
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684
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846
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1,321
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6,263
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9,114
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FDIC indemnification
support
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1,160
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875
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938
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605
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3,578
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Items expected not to
recur:
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Acquisition-related costs
(1)
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412
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1,505
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2,180
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2,628
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6,725
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FHLB prepayment
penalty
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-
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8,029
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-
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-
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8,029
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Other items not expected
to recur
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1,787
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493
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2,387
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1,019
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5,686
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Total excluding items
noted above
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$
48,195
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$
48,996
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$ 47,723
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$ 47,545
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$
192,459
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(1) See Section II for
additional information
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Similar to the first three quarters of 2010, noninterest expense
during the fourth quarter 2010 continued to be affected by
acquisition-related costs as well as other transition-related items
and costs related to the Company's acquired-non-strategic
operations. The increase in acquired-non-strategic operating
expenses during the fourth quarter was partially attributable to
the Company's strategic decision to exit the Michigan and Louisville, KY markets and the
reclassification of expenses associated with those locations.
Excluding the items highlighted in Table III, estimated
noninterest expense in the fourth quarter 2010 was $48.2 million as compared to $49.0 million in the third quarter 2010 and
$47.2 million in the fourth quarter
2009.
For the twelve month period ended December 31, 2010, noninterest expense totaled
$233.7 million compared to
$170.6 million for the comparable
year-over-year period. Excluding the items highlighted in
Table III, acquisition-related and other non-recurring expenses
incurred during the third quarter 2009, the FDIC special assessment
and acquisition related expenses incurred during the second quarter
2009 and severance costs related to the first quarter 2009 sale of
the property & casualty portion of the insurance business,
noninterest expense was $192.5
million for the twelve month period ended December 31, 2010 as compared to $143.0 million for the twelve months ended
December 31, 2009. This
increase of $49.5 million was
primarily driven by higher salaries and employee benefits,
occupancy costs, professional service fees, equipment expenses,
marketing costs and data processing expenses resulting from the
2009 acquisitions.
While the technology and operational integration of Irwin and
Peoples is complete, it is expected that wind-down costs related to
acquired subsidiaries will continue through 2011.
INCOME TAXES
For the fourth quarter 2010, income tax expense was $8.1 million, resulting in an effective tax rate
of 36.2%, compared with income tax expense of $8.8 million and an effective tax rate of 36.2%
during the third quarter 2010 and $7.1
million and an effective tax rate of 34.0% during the
comparable year-over-year period.
For the twelve month period ended December 31, 2010, income tax expense was
$32.7 million, resulting in an
effective tax rate of 35.6%, compared with income tax expense of
$132.6 million and an effective tax
rate of 37.5% for the twelve months ended December 31, 2009.
CREDIT QUALITY – EXCLUDING COVERED ASSETS
The following table presents certain credit quality metrics
related to the Company's uncovered loan portfolio as of
December 31, 2010 and for the
trailing four quarters.
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Table IV
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As of or for
the Three Months Ended
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December
31,
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September
30,
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June
30,
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March
31,
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December
31,
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(Dollars in
thousands)
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2010
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2010
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2010
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2010
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2009
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Total nonaccrual
loans
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$
62,302
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$
66,157
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$ 66,671
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$ 66,869
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$
71,657
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Restructured loans
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8,336
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13,365
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12,752
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7,584
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6,125
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Total nonperforming
loans
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70,638
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79,522
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79,423
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74,453
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77,782
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Total nonperforming
assets
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88,545
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97,827
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96,241
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92,540
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81,927
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Nonperforming assets as a %
of:
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Period-end loans plus
OREO
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3.12%
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3.51%
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3.42%
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3.27%
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2.83%
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Total assets
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1.42%
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1.59%
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1.46%
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1.41%
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1.23%
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Nonperforming loans as a % of
total loans
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2.51%
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2.88%
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2.84%
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2.65%
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2.69%
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Provision for loan and lease
losses - uncovered
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$
9,741
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$
6,287
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$ 6,158
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$ 11,378
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$
14,812
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Allowance for uncovered loan
& lease losses
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$
57,235
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$
57,249
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$ 57,811
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$ 56,642
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$
59,311
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Allowance for loan & lease
losses as a % of:
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Period-end
loans
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2.03%
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2.07%
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2.07%
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2.01%
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2.05%
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Nonaccrual
loans
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91.9%
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86.5%
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86.7%
|
|
84.7%
|
|
82.8%
|
|
Nonperforming
loans
|
81.0%
|
|
72.0%
|
|
72.8%
|
|
76.1%
|
|
76.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net charge-offs
|
$
9,755
|
|
$
6,849
|
|
$ 4,989
|
|
$ 14,047
|
|
$
11,271
|
|
Annualized net-charge-offs as a
% of average
|
|
|
|
|
|
|
|
|
|
|
loans &
leases
|
1.39%
|
|
0.97%
|
|
0.71%
|
|
2.00%
|
|
1.53%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs
Fourth quarter 2010 net charge-offs were $9.8 million, or 1.39% of average loans and
leases, compared with $6.8 million,
or 0.97%, for the linked quarter and $11.3
million, or 1.53%, for the comparable year-over-year
quarter. The increase compared to the linked quarter was
driven by higher charge-offs in the commercial and home equity
portfolios and a lower level of total recoveries, offset by lower
charge-offs in the construction portfolio. Included in the
$5.1 million of gross charge-offs
related to commercial loans was $3.8
million related to the resolution of one relationship which
included the sale and charge-off of $7.7
million of previously reported restructured and nonaccrual
loans.
For the twelve months ended December 31,
2010, net charge-offs were $35.6
million, or 1.27% of average loans and leases. These
amounts were impacted by the alleged fraudulent activity noted
during the first quarter 2010 which totaled $8.8 million, representing 31 basis points of
average loans and leases for the period. Excluding the
alleged fraudulent activity, net charge-offs were $26.8 million, or 0.96%, as compared to
$32.6 million, or 1.16%, for the
twelve month period ended December 31,
2009.
Nonperforming Assets
Nonperforming loans totaled $70.6
million and nonperforming assets totaled $88.5 million as of December 31, 2010 compared with $79.5 million and $97.8
million, respectively, for the linked quarter and
$77.8 million and $81.9 million, respectively, for the comparable
year-over-year quarter. The decrease was driven primarily by
a reduction in commercial nonaccrual loans of $3.6 million and a decrease of $5.0 million related to restructured loans.
As a result of continued efforts in identifying and resolving
problem credits, improvements, resolutions and charge-off activity
during the quarter outpaced additions to nonperforming assets.
Total classified assets decreased $10.4
million during the fourth quarter 2010 to $202.1 million. Classified assets are
defined by the Company as nonperforming assets plus performing
loans internally rated substandard or worse. The decrease was
due to the finalization of resolution strategies on several problem
credits. All credits included in classified assets are
monitored closely and have workout strategies in place should their
status continue to deteriorate.
As mentioned earlier, the Company continues to aggressively
identify and resolve problem credits with some signs of
effectiveness as the level of nonperforming assets improved during
the quarter. However, the deterioration of one or two larger
credits could result in nonperforming assets returning to previous
levels. As a result, all larger credit relationships are
closely monitored in order to mitigate potential losses should
increased stress become evident. With regard to
consumer-oriented loan portfolios, the Company continues to
experience stress given the prolonged depressed economic
environment and current unemployment levels.
Delinquent Loans
Loans 30-to-89 days past due totaled $22.3 million, or 0.79% of period end loans, as
of December 31, 2010. This
compares to $45.1 million, or 1.63%,
as of September 30, 2010 and
$19.1 million, or 0.66%, as of
December 31, 2009. The decrease
compared to the linked quarter resulted from the resolution of
several large multi-family loans.
Provision for Loan & Lease Losses
Fourth quarter 2010 provision expense related to uncovered loans
and leases was $9.7 million as
compared to $6.3 million during the
linked quarter and $14.8 million
during the comparable year-over-year quarter. As a percentage
of net charge-offs, fourth quarter 2010 provision expense was 99.9%
compared to 91.8% during the third quarter 2010 and 131.4% during
the fourth quarter 2009.
Allowance for Loan & Lease Losses
As of the end of the fourth quarter 2010, the allowance for
uncovered loan and lease losses was $57.2
million as compared to $57.2
million as of September 30,
2010 and $59.3 million as of
December 31, 2009. As a
percentage of period-end loans, the allowance for loan and lease
losses was 2.03% as of December 31,
2010 as compared to 2.07% as of September 30, 2010 and 2.05% as of December 31, 2009. The allowance for loan
and lease losses as of December 31,
2010 reflects management's estimate of credit risk inherent
in the Company's uncovered loan portfolio at that time.
LOANS (EXCLUDING COVERED LOANS)
The following table presents the loan portfolio, not including
covered loans, as of December 31,
2010, September 30, 2010 and
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table V
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
December 31,
2010
|
|
September
30, 2010
|
|
December 31,
2009
|
|
|
|
|
Percent
|
|
|
|
Percent
|
|
|
|
Percent
|
|
(Dollars in
thousands)
|
Balance
|
|
of
Total
|
|
Balance
|
|
of
Total
|
|
Balance
|
|
of
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
800,253
|
|
28.4%
|
|
$
763,449
|
|
27.6%
|
|
$
800,261
|
|
27.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate -
construction
|
163,543
|
|
5.8%
|
|
178,914
|
|
6.5%
|
|
253,223
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate -
commercial
|
1,139,931
|
|
40.5%
|
|
1,095,543
|
|
39.6%
|
|
1,079,628
|
|
37.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate -
residential
|
269,173
|
|
9.6%
|
|
283,914
|
|
10.3%
|
|
321,047
|
|
11.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Installment
|
69,711
|
|
2.5%
|
|
73,138
|
|
2.6%
|
|
82,989
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
341,310
|
|
12.1%
|
|
341,288
|
|
12.3%
|
|
328,940
|
|
11.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit card
|
29,563
|
|
1.0%
|
|
28,825
|
|
1.0%
|
|
29,027
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease financing
|
2,609
|
|
0.1%
|
|
138
|
|
0.0%
|
|
14
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$ 2,816,093
|
|
100.0%
|
|
$ 2,765,209
|
|
100.0%
|
|
$ 2,895,129
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, excluding covered loans, totaled $2.8 billion at the end of the fourth quarter,
representing an increase of $50.9
million, or 1.8%, compared to September 30, 2010 and a decrease of $79.0 million, or 2.7%, compared to December 31, 2009. As compared to the
linked quarter, the composition of the loan portfolio remained
similar to the linked quarter with net loan growth occurring in the
commercial and commercial real estate portfolios offset by
decreases in the construction and residential real estate
portfolios. While the Company did experience modest growth in
the portfolio during the fourth quarter, loan demand continues to
remain slow in the Company's strategic operating markets.
INVESTMENTS
The following table presents a summary of the total investment
portfolio at December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table VI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
December 31, 2010
|
|
|
|
Book
|
|
Percent
of
|
|
Book
|
|
Cost
|
|
Market
|
|
Gain/
|
|
(Dollars in
thousands)
|
Value
|
|
Total
|
|
Yield
|
|
Basis
|
|
Value
|
|
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury notes
|
$
13,959
|
|
1.4%
|
|
2.03
|
|
99.71
|
|
102.37
|
|
$
372
|
|
Agencies
|
|
105,985
|
|
10.4%
|
|
2.76
|
|
100.00
|
|
100.91
|
|
957
|
|
CMOs (agency)
|
336,458
|
|
33.1%
|
|
1.51
|
|
100.35
|
|
100.76
|
|
1,355
|
|
CMOs (private)
|
44
|
|
0.0%
|
|
0.95
|
|
100.00
|
|
100.39
|
|
0
|
|
MBSs (agency)
|
452,366
|
|
44.6%
|
|
3.56
|
|
102.18
|
|
104.85
|
|
11,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
908,812
|
|
89.5%
|
|
2.68
|
|
101.21
|
|
102.80
|
|
14,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
|
|
17,479
|
|
1.7%
|
|
7.19
|
|
99.22
|
|
101.52
|
|
401
|
|
Other (1)
|
|
88,914
|
|
8.8%
|
|
3.08
|
|
102.37
|
|
103.07
|
|
608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,393
|
|
10.5%
|
|
3.75
|
|
101.85
|
|
102.81
|
|
1,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
portfolio
|
$ 1,015,205
|
|
100.0%
|
|
2.79
|
|
101.28
|
|
102.80
|
|
$ 15,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Unrealized
Gain/(Loss)
|
|
$ 15,225
|
|
|
|
|
|
Aggregate Gains
|
17,970
|
|
|
|
|
|
Aggregate Losses
|
(2,745)
|
|
|
|
|
|
Net Unrealized Gain/(Loss) % of
Book Value
|
1.50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other includes $78.7
million of regulatory stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in the investment portfolio relative to the linked
quarter was due to the purchase of $364.2
million of GNMA, FNMA and FHLMC mortgage backed securities
during the quarter, net of maturities and amortizations.
While loan demand remains muted, the Company continues to
selectively redeploy a portion of its cash position to purchase
investments as market conditions permit. Future purchases
will be made utilizing the same discipline and portfolio management
philosophy applied in the past, including avoidance of material
credit risk and geographic concentration risk within
mortgage-backed securities, while also balancing the Company's
overall asset / liability management objectives.
DEPOSITS
The following table presents a roll-forward of deposit activity
during the fourth quarter 2010, including activity related to
deposits acquired through the FDIC-assisted transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table VII
|
|
|
|
|
|
|
|
|
Deposit
Activity - Fourth Quarter 2010
|
|
|
Balance as
of
|
|
|
Acquired-
|
|
Balance as
of
|
|
|
September
30,
|
|
Strategic
|
Non-Strategic
|
|
December
31,
|
|
(Dollars in
thousands)
|
2010
|
|
Portfolio
|
Portfolio
|
|
2010
|
|
|
|
|
|
|
|
|
|
Transaction and savings
accounts
|
$ 3,120,611
|
|
212,149
|
18,646
|
|
$ 3,351,406
|
|
|
|
|
|
|
|
|
|
Time deposits
|
1,742,059
|
|
(57,961)
|
(21,757)
|
|
1,662,341
|
|
|
|
|
|
|
|
|
|
Brokered deposits
|
188,593
|
|
(3,636)
|
(52,455)
|
|
132,502
|
|
|
|
|
|
|
|
|
|
Total deposits
|
$ 5,051,263
|
|
$ 150,552
|
$ (55,566)
|
|
$ 5,146,249
|
|
|
|
|
|
|
|
|
During the fourth quarter 2010, the Company announced its intent
to exit the Michigan and
Louisville, KY markets acquired as
part of the Irwin transaction. As such, the deposits
associated with these locations are now classified as
acquired-non-strategic.
Strategic transaction and savings accounts increased
$212.1 million during the fourth
quarter 2010, driven by $130.9
million of seasonal growth in public funds accounts and an
increase of $80.1 million in retail
transactional and savings accounts. Average interest-bearing
transaction balances and savings accounts increased 5.6% and 5.5%,
respectively, during the fourth quarter 2010 as compared to the
linked quarter. Similar to prior quarters',
acquired-non-strategic time deposit and brokered deposit balances
continued to decline. As of December
31, 2010, brokered deposits had declined to less than 3% of
total deposits.
CAPITAL MANAGEMENT
The following table presents First Financial's preliminary
regulatory and other capital ratios as of December 31, 2010, September 30, 2010 and December 31, 2009. Prior period amounts
have been revised to reflect the purchase accounting adjustments
discussed in Acquisitions in Section II below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table VIII
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
"Well-Capitalized"
|
|
|
2010
|
|
2010
|
|
2009
|
|
Minimum
|
|
|
|
|
|
|
|
|
|
|
Leverage Ratio
|
10.89%
|
|
10.50%
|
|
9.24%
|
|
5.00%
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Capital Ratio
|
18.45%
|
|
18.64%
|
|
16.11%
|
|
6.00%
|
|
|
|
|
|
|
|
|
|
|
Total Risk-Based Capital
Ratio
|
19.72%
|
|
19.91%
|
|
17.37%
|
|
10.00%
|
|
|
|
|
|
|
|
|
|
|
Ending tangible shareholders'
equity
|
|
|
|
|
|
|
|
|
to ending tangible
assets
|
10.33%
|
|
10.38%
|
|
8.95%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Ending tangible common
shareholders'
|
|
|
|
|
|
|
|
|
equity to ending tangible
assets
|
10.33%
|
|
10.38%
|
|
7.75%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Capital levels remained relatively consistent during the fourth
quarter 2010 as compared to the linked quarter. As of
December 31, 2010, tangible book
value per common share was $11.02
compared to $10.90 as of September 30, 2010 and $9.94 as of December 31,
2009.
SECTION II – SUPPLEMENTAL INFORMATION ON COVERED ASSETS AND
ACQUISITION-RELATED ITEMS
To assist in analyzing the effect of the 2009 FDIC assisted
transactions on the financial results, supplemental information
that segregates the estimated impact on pre-tax earnings of certain
acquisition-related items and provides additional detail on the
covered loan portfolio follows.
SUMMARY OF SIGNIFICANT ACQUISITION-RELATED ITEMS
The following table illustrates the estimated effect of certain
acquisition-related items on the results of operations for the
three months ended December 31,
September 30, June 30 and March 31,
2010 as well as for the twelve months ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table IX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Twelve
|
|
|
For the
Three Months Ended
|
|
Months
Ended
|
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
(Dollars in
thousands)
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Income effect:
|
|
|
|
|
|
|
|
|
|
|
Accelerated discount on
loan prepayments
and dispositions
(1), (2)
|
$
6,113
|
|
$
9,448
|
|
$ 7,408
|
|
$ 6,098
|
|
$
29,067
|
|
Acquired-non-strategic net
interest income
|
9,937
|
|
10,586
|
|
10,207
|
|
10,854
|
|
41,584
|
|
FDIC loss sharing
income
|
11,306
|
|
17,800
|
|
15,170
|
|
7,568
|
|
51,844
|
|
Service charges on deposit
accounts related to
|
|
|
|
|
|
|
|
|
|
|
acquired-non-strategic
operations
|
196
|
|
168
|
|
130
|
|
230
|
|
724
|
|
Other income related to
acquired-non-strategic operations
|
331
|
|
(124)
|
|
346
|
|
(150)
|
|
403
|
|
Income related to the
accelerated discount on loan prepayments
|
|
|
|
|
|
|
|
|
|
|
and dispositions and
acquired-non-strategic operations
|
27,883
|
|
37,878
|
|
33,261
|
|
24,600
|
|
123,622
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense effect:
|
|
|
|
|
|
|
|
|
|
|
Provision for loan and
lease losses - covered
|
13,997
|
|
20,725
|
|
18,962
|
|
9,460
|
|
63,144
|
|
Acquired-non-strategic
operating
expenses:
(3)
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
820
|
|
13
|
|
29
|
|
122
|
|
984
|
|
Occupancy
|
161
|
|
91
|
|
542
|
|
1,415
|
|
2,209
|
|
Other
|
3,071
|
|
462
|
|
699
|
|
664
|
|
4,896
|
|
Total
acquired-non-strategic operating expenses
|
4,052
|
|
566
|
|
1,270
|
|
2,201
|
|
8,089
|
|
|
|
|
|
|
|
|
|
|
|
|
FDIC indemnification
support (3)
|
1,160
|
|
875
|
|
938
|
|
605
|
|
3,578
|
|
Loss share
expense
|
616
|
|
-
|
|
-
|
|
-
|
|
616
|
|
Acquisition-related costs:
(3)
|
|
|
|
|
|
|
|
|
|
|
Integration-related
costs
|
9
|
|
(102)
|
|
720
|
|
999
|
|
1,626
|
|
Professional services
fees
|
396
|
|
1,174
|
|
1,436
|
|
1,457
|
|
4,463
|
|
Other
|
7
|
|
433
|
|
24
|
|
172
|
|
636
|
|
Total acquisition-related
costs
|
412
|
|
1,505
|
|
2,180
|
|
2,628
|
|
6,725
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition-related items:
(3)
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
176
|
|
796
|
|
1,843
|
|
4,776
|
|
7,591
|
|
Occupancy
|
172
|
|
50
|
|
(522)
|
|
910
|
|
610
|
|
Other
|
336
|
|
-
|
|
-
|
|
577
|
|
913
|
|
Total transition-related
items
|
684
|
|
846
|
|
1,321
|
|
6,263
|
|
9,114
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense
effect
|
20,921
|
|
24,517
|
|
24,671
|
|
21,157
|
|
91,266
|
|
|
|
|
|
|
|
|
|
|
|
|
Total estimated effect on
pre-tax earnings
|
$
6,962
|
|
$
13,361
|
|
$ 8,590
|
|
$ 3,443
|
|
$
32,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Included in noninterest
income
|
|
2 Net of the corresponding
valuation adjustment on the FDIC indemnification asset
|
|
3 Included in noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCELERATED DISCOUNT ON LOAN PREPAYMENTS AND
DISPOSITIONS
During the fourth quarter, First Financial recognized
approximately $6.1 million in
accelerated discount recognition from acquired loans.
Accelerated discount is recognized when acquired loans, which
are recorded on First Financials balance sheet at an amount less
than the unpaid principal balance, prepay at an amount greater than
the recorded book value. Prepayments can occur either through
customer driven payments before the maturity date or loan sales.
The amount of discount attributable to the credit loss
content in each loan varies and the recognized amount is offset by
a related reduction in the FDIC Indemnification Asset.
The Company did not conduct any material loan sales involving
either acquired-non-strategic loans or loans originated by its
franchise finance unit during the fourth quarter 2010. All
accelerated discount revenue recognized during the fourth quarter
pertained to covered loan prepayments.
For the full year 2010, First Financial sold $47.7 million of loans, consisting of
$24.5 million of
acquired-non-strategic western market covered loans and
$23.2 million of loans related to the
franchise finance unit. As a result of these loan sales, the
Company recognized $2.3 million
related to the accelerated discount during 2010. The
remaining $26.8 million of
accelerated discount resulted from loan prepayments.
When losses are incurred on covered loans that exceed
expectations, the Company recognizes the gross credit losses in
excess of the valuation mark as provision expense.
Reimbursements due from the FDIC under loss share agreements
related to these credit losses are recorded as noninterest income.
The impact on earnings of this offsetting activity is shown
above as the net effect of the gross up of credit losses and FDIC
reimbursement, representing the Company's proportionate share of
the credit losses realized on covered loans.
COVERED ASSETS & LOSS SHARE AGREEMENTS
As of December 31, 2010, 34.5% of
the Company's total loans were covered loans. As required
under the loss-share arrangements, First Financial must file
monthly certifications with the FDIC on single-family residential
loans and quarterly certifications on all other loans. To
date, all certifications have been filed in a timely manner and
without significant issues.
COVERED LOAN PORTFOLIO
The following table presents estimated activity in the covered
loan portfolio by loan type during the fourth quarter 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Covered Loan
Activity - Fourth Quarter 2010
|
|
|
|
|
Reduction in
Balance Due to:
|
|
|
|
September
30,
|
|
|
|
Prepayments
/
|
|
Contractual
|
|
|
|
Loans
With
|
|
December
31,
|
|
(Dollars in
thousands)
|
2010
|
|
Loan
Sales
|
|
Renewals
|
|
Activity
(1)
|
|
Charge-Offs
(2)
|
|
Coverage
Removed
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
386,593
|
|
$
-
|
|
$
25,446
|
|
$ 25,618
|
|
$
795
|
|
$
695
|
|
$
334,039
|
|
Real estate -
construction
|
59,803
|
|
-
|
|
255
|
|
16,150
|
|
655
|
|
-
|
|
42,743
|
|
Real estate -
commercial
|
897,388
|
|
-
|
|
27,321
|
|
4,452
|
|
5,708
|
|
4,182
|
|
855,725
|
|
Real estate -
residential
|
236,292
|
|
-
|
|
13,341
|
|
492
|
|
1,712
|
|
-
|
|
220,747
|
|
Installment
|
21,863
|
|
-
|
|
1,197
|
|
(886)
|
|
481
|
|
-
|
|
21,071
|
|
Other covered loans
|
7,645
|
|
-
|
|
-
|
|
477
|
|
-
|
|
-
|
|
7,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total covered loans
|
$
1,609,584
|
|
$
-
|
|
$
67,560
|
|
$ 46,303
|
|
$
9,351
|
|
$
4,877
|
|
$ 1,481,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes partial
paydowns, accretion of the valuation discount and advances on
revolving loans
|
|
(2) Indemnified at 80%
from the FDIC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the fourth quarter 2010, the total balance of covered
loans decreased $128.1 million, or
8.0%, as compared to the previous quarter. The decrease was
driven primarily by prepayments and renewals of $67.6 million, or 4.2% of the quarterly decline,
and contractual payments of $46.3
million, or 2.9% of the quarterly decline.
ALLOWANCE FOR LOAN LOSSES
Under the applicable accounting guidance, the allowance for loan
losses related to covered loans as a result of impairment
identified in on-going valuation procedures is generally recognized
in the current period as provision expense. Improvement in
the credit outlook is generally not recognized immediately but
instead is reflected as an adjustment to the yield earned on the
related loan pools on a prospective basis. However, if
improvement is noted in a loan pool that had previously experienced
impairment, the amount of improvement is recognized as a reduction
to the applicable period's provision expense. Additional
improvement beyond previously recorded impairment is reflected as a
yield adjustment on a prospective basis. The timing inherent
in this accounting treatment may result in earnings volatility in
future periods.
The Company established an allowance for loan losses associated
with covered loans during 2010 based on estimated valuation
procedures performed during the period. During the fourth
quarter 2010, the Company updated its estimated valuation related
to these loans. As a result of net impairment identified in
certain loan pools of $4.9 million
and net charge-offs of $9.1 million,
it recognized a provision expense related to covered loans of
$14.0 million, resulting in an
allowance for covered loan losses of $16.5
million as of December 31,
2010. The related receivable due from the FDIC under
loss share agreements related to these loans of $11.3 million was recognized as FDIC loss share
income and a corresponding increase to the FDIC indemnification
asset.
For the twelve month period ended December 31, 2010, the Company recognized
$63.1 million of provision expense
related to covered loans and realized net charge-offs of
$46.7 million. The related
receivable due from the FDIC under loss share agreements for the
full year 2010, recognized as FDIC loss share income, totaled
$51.8 million.
DETAILS OF RESULTS
The results of the comparable periods in 2010 and 2009 were
impacted by a number of acquisition-related items. During the
third quarter 2009, through FDIC-assisted transactions, First
Financial assumed the banking operations of Peoples Community Bank
("Peoples"), Irwin Union Bank and
Trust Company and Irwin Union Bank,
F.S.B. (collectively, "Irwin").
In connection with the FDIC-assisted transactions, the Company
has loss sharing arrangements with the FDIC. Under the terms
of these agreements, the FDIC will reimburse the Company for losses
with respect to certain loans ("covered loans") and other real
estate owned ("OREO") (collectively, "covered assets").
As a result of the acquisitions, the Company's business and
operating markets expanded significantly. To assist readers
in understanding the financial and strategic impact of the
acquisitions, the combined operations of First Financial's legacy
and acquired businesses will be discussed in three categories:
"Legacy-Strategic", "Acquired-Strategic" and
"Acquired-Non-Strategic". Additional disclosures have been
added in a separate section of the earnings release that segregate
the effect acquisition-related items have on certain reported
income statement and balance sheet amounts, "Section II –
Supplemental Information on Covered Assets and Acquisition-Related
Items". Definitions of the business categories and other
financial items related to the acquisitions can be found below in
"Glossary of Terms".
In an effort to simplify and clarify the financial performance
of First Financial, a number of significant items are noted
separately throughout this release and will address the nature,
timing and expected recurrence of each item. Available on the
Company's website at www.bankatfirst.com is a presentation
providing supplemental information regarding its quarterly
results.
Glossary of Terms
To assist readers in understanding the Company's financial
results and the effect of the acquisitions on reported amounts, the
following terms are used throughout this release to refer to
specific acquisition-related items. The first three define
the business components referred to above and the remaining items
define specific covered loan terminology.
Legacy-strategic – Elements of the business that
existed prior to the acquisitions and will continue to be
supported.
Acquired-strategic – Elements of the business that
the Company intends to retain and will continue to support and
build. Legacy-strategic and acquired-strategic are
collectively referred to as "strategic."
Acquired-non-strategic – Elements of the business
that the Company intends to exit but will continue to support to
obtain maximum economic value. No growth or replacement is
expected.
Accelerated discount on loan prepayments and
dispositions – The acceleration of the unrealized valuation
discount. This item will be ongoing but diminishing as
covered loan balances decline over time.
UPB – Unpaid principal balance
Carrying value – The unpaid principal balance of a
covered loan less any valuation discount.
Unless otherwise noted, all amounts discussed in this
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. In some instances, financial
data may not add up due to rounding.
ACQUISITIONS
Subsequent Events
The Irwin and Peoples acquisitions were considered business
combinations and accounted for under FASB Codification Topic 805:
Business Combinations, FASB Codification Topic 820: Fair Value
Measurements, FASB Codification Topic 310-30: Loans and Debt
Securities Acquired with Deteriorated Credit Quality and FASB
Codification Topic 310-20: Receivables – Nonrefundable Fees and
Costs. All acquired assets and liabilities, including
identifiable intangible assets, were recorded at their estimated
fair values as of the date of acquisition.
Purchase Accounting Adjustments
When additional information arises subsequent to the acquisition
date and within one year, the Company is permitted to record
adjustments to the initial purchase entries. The one year
period for such adjustments related to the 2009 acquisitions
expired at the end of the third quarter 2010. Such items
recorded by the Company within the one year period represent the
final valuation adjustments allowable under the applicable
accounting guidance and impacted reported amounts for 2009
only.
The most significant purchase accounting adjustments pertained
to items affecting the gain on acquisitions originally reported
during the third quarter 2009. These items, all of which were
associated with the Irwin transaction, were related to the
valuation of the indemnification asset, valuation of loans acquired
and fair value adjustments for other assets primarily related to
the establishment of valuation allowances for certain assets of and
investments in subsidiaries as well as other community reinvestment
related assets. The total impact of these adjustments was a
decrease in the originally reported pre-tax gain of $383.3 million to $342.5 million.
Teleconference / Webcast Information
First Financial's senior management will host a conference call
to discuss the Company's financial and operating results on
Thursday, January 27, 2011 at
9:00 a.m. Members of the public
who would like to listen to the conference call should dial (877)
317-6789 (U.S. toll free), (866) 605-3852 (Canada toll free) or +1 (412) 317-6789
(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 through February 11, 2011 at
(877) 344-7529 (U.S. toll free) and +1 (412) 317-0088
(International); conference number 447697. The webcast will
be archived on the Investor Relations section of the Company's
website through January 26, 2012.
Press Release and Additional Information on Website
This press release as well as supplemental information related
to this release is available to the public through the Investor
Relations section of First Financial's website at
www.bankatfirst.com/investor.
Forward-Looking Statement
Certain statements contained in this news release which are not
statements of historical fact constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
(the ''Act''). In addition, certain statements in future
filings by First Financial with the SEC, in press releases, and in
oral and written statements made by or with the approval of First
Financial which are not statements of historical fact constitute
forward-looking statements within the meaning of the Act.
Examples of forward-looking statements include, but are not
limited to, projections of revenues, income or loss, earnings or
loss per share, the payment or non-payment of dividends, capital
structure and other financial items, statements of plans and
objectives of First Financial or its management or board of
directors, and statements of future economic performances and
statements of assumptions underlying such statements. Words
such as ''believes'', ''anticipates'', "likely", "expected",
''intends'', and other similar expressions are intended to identify
forward-looking statements but are not the exclusive means of
identifying such statements. Management's analysis contains
forward-looking statements that are provided to assist in the
understanding of anticipated future financial performance.
However, such performance involves risks 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 we conduct operations may continue to
deteriorate resulting in, among other things, a further
deterioration in credit quality or a reduced demand for credit,
including the resultant effect on our loan portfolio, allowance for
loan and lease losses and overall financial performance;
- the ability of financial institutions to access sources of
liquidity at a reasonable cost;
- the impact of recent upheaval in the financial markets and the
effectiveness of domestic and international governmental actions
taken in response, such as the U.S. Treasury's TARP and the FDIC's
Temporary Liquidity Guarantee Program, and the effect of such
governmental actions on us, our competitors and counterparties,
financial markets generally and availability of credit
specifically, and the U.S. and international economies, including
potentially higher FDIC premiums arising from increased payments
from FDIC insurance funds as a result of depository institution
failures;
- the effect of and changes in policies and laws or regulatory
agencies (notably the recently enacted Dodd-Frank Wall Street
Reform and Consumer Protection Act);
- inflation and possible changes in interest rates;
- our ability to keep up with technological changes;
- mergers and acquisitions, including costs or difficulties
related to the integration of acquired companies and the wind-down
of non-strategic operations that may be greater than expected;
- the risk that exploring merger and acquisition opportunities
may detract from management's time and ability to successfully
manage our company;
- expected cost savings in connection with the consolidation of
recent acquisitions may not be fully realized or realized within
the expected time frames, and deposit attrition, customer loss and
revenue loss following completed acquisitions may be greater than
expected;
- our ability to increase market share and control expenses;
- the effect of changes in accounting policies and practices, as
may be adopted by the regulatory agencies as well as the Financial
Accounting Standards Board and the SEC;
- adverse changes in the securities and debt markets;
- our success in recruiting and retaining the necessary personnel
to support business growth and expansion and maintain sufficient
expertise to support increasingly complex products and
services;
- monetary and fiscal policies of the Board of Governors of the
Federal Reserve System (Federal Reserve) and the U.S. government
and other governmental initiatives affecting the financial services
industry;
- our ability to manage loan delinquency and charge-off rates and
changes in estimation of the adequacy of the allowance for loan
losses; and
- the costs and effects of litigation and of unexpected or
adverse outcomes in such litigation.
In addition, please refer to our Annual Report on Form 10-K for
the year ended December 31, 2009, as
well as our other filings with the SEC, for a more detailed
discussion of these risks and uncertainties and other factors. Such
forward-looking statements are meaningful only on the date when
such statements are made, and First Financial undertakes no
obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such a statement is
made to reflect the occurrence of unanticipated events.
About First Financial Bancorp
First Financial Bancorp is a Cincinnati, Ohio based bank holding company.
As of December 31, 2010, the
Company had $6.3 billion in assets,
$4.3 billion in loans, $5.1 billion in deposits and $697 million in shareholders' equity. The
Company's subsidiary, First Financial Bank, N.A., founded in 1863,
provides banking and financial services products through its three
lines of business: commercial, retail and wealth management.
The commercial and retail units provide traditional banking
services to business and consumer clients. First Financial
Wealth Management provides wealth planning, portfolio management,
trust and estate, brokerage and retirement plan services and had
approximately $2.3 billion in assets
under management as of December 31,
2010. The Company's strategic operating markets are
located in Ohio, Indiana and Kentucky where it operates 108 banking centers
across 70 communities. Additional information about the
Company, including its products, services and banking locations is
available at www.bankatfirst.com.
FIRST
FINANCIAL BANCORP.
|
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
|
(Dollars in
thousands, except per share)
|
|
(Unaudited)
|
|
|
|
|
Three
months ended,
|
|
|
Twelve
months ended
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
|
Dec.
31,
|
|
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$14,300
|
|
$15,579
|
|
$17,774
|
|
$11,598
|
|
$13,795
|
|
|
$59,251
|
|
$221,337
|
|
Net income available to common
shareholders
|
$14,300
|
|
$15,579
|
|
$17,774
|
|
$9,733
|
|
$12,795
|
|
|
$57,386
|
|
$217,759
|
|
Net earnings per common share -
basic
|
$0.25
|
|
$0.27
|
|
$0.31
|
|
$0.18
|
|
$0.25
|
|
|
$1.01
|
|
$4.84
|
|
Net earnings per common share -
diluted
|
$0.24
|
|
$0.27
|
|
$0.30
|
|
$0.17
|
|
$0.25
|
|
|
$0.99
|
|
$4.78
|
|
Dividends declared per common
share
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
|
$0.40
|
|
$0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY FINANCIAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.90%
|
|
0.96%
|
|
1.08%
|
|
0.71%
|
|
0.80%
|
|
|
0.91%
|
|
4.67%
|
|
Return on average shareholders'
equity
|
8.14%
|
|
9.03%
|
|
10.62%
|
|
6.92%
|
|
8.36%
|
|
|
8.68%
|
|
47.44%
|
|
Return on average common
shareholders' equity
|
8.14%
|
|
9.03%
|
|
10.62%
|
|
6.25%
|
|
8.81%
|
|
|
8.55%
|
|
56.07%
|
|
Return on average tangible
common shareholders' equity
|
8.87%
|
|
9.87%
|
|
11.64%
|
|
6.89%
|
|
9.82%
|
|
|
9.35%
|
|
66.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
4.65%
|
|
4.59%
|
|
4.53%
|
|
4.89%
|
|
4.65%
|
|
|
4.66%
|
|
4.05%
|
|
Net interest margin (fully tax
equivalent) (1)
|
4.67%
|
|
4.60%
|
|
4.54%
|
|
4.91%
|
|
4.67%
|
|
|
4.68%
|
|
4.08%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending equity as a percent of
ending assets
|
11.16%
|
|
11.23%
|
|
10.35%
|
|
10.20%
|
|
9.76%
|
|
|
11.16%
|
|
9.76%
|
|
Ending common equity as a
percent of ending assets
|
11.16%
|
|
11.23%
|
|
10.35%
|
|
10.20%
|
|
8.57%
|
|
|
11.16%
|
|
8.57%
|
|
Ending tangible common equity as
a percent of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending tangible
assets
|
10.33%
|
|
10.38%
|
|
9.55%
|
|
9.38%
|
|
7.75%
|
|
|
10.33%
|
|
7.75%
|
|
Risk-weighted assets
|
17.36%
|
|
17.61%
|
|
17.17%
|
|
16.39%
|
|
13.10%
|
|
|
17.36%
|
|
13.10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average equity as a percent of
average assets
|
11.12%
|
|
10.68%
|
|
10.14%
|
|
10.22%
|
|
9.57%
|
|
|
10.53%
|
|
9.85%
|
|
Average common equity as a
percent of average assets
|
11.12%
|
|
10.68%
|
|
10.14%
|
|
9.51%
|
|
8.42%
|
|
|
10.35%
|
|
8.20%
|
|
Average tangible common equity
as a percent of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average tangible
assets
|
10.29%
|
|
9.86%
|
|
9.33%
|
|
8.70%
|
|
7.62%
|
|
|
9.55%
|
|
7.04%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share
|
$12.01
|
|
$11.90
|
|
$11.74
|
|
$11.55
|
|
$11.10
|
|
|
$12.01
|
|
$11.10
|
|
Tangible book value per common
share
|
$11.02
|
|
$10.90
|
|
$10.73
|
|
$10.53
|
|
$9.94
|
|
|
$11.02
|
|
$9.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Ratio (2)
|
18.45%
|
|
18.64%
|
|
18.15%
|
|
17.37%
|
|
16.11%
|
|
|
18.45%
|
|
16.11%
|
|
Total Capital Ratio
(2)
|
19.72%
|
|
19.91%
|
|
19.42%
|
|
18.64%
|
|
17.37%
|
|
|
19.72%
|
|
17.37%
|
|
Leverage Ratio (2)
|
10.89%
|
|
10.50%
|
|
9.99%
|
|
9.76%
|
|
9.24%
|
|
|
10.89%
|
|
9.24%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCE SHEET
ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (3)
|
$2,804,832
|
|
$2,805,764
|
|
$2,806,616
|
|
$2,849,562
|
|
$2,929,850
|
|
|
$2,816,541
|
|
$2,820,201
|
|
Covered loans and FDIC
indemnification asset
|
1,783,737
|
|
1,886,750
|
|
2,041,820
|
|
2,168,407
|
|
2,254,989
|
|
|
1,968,896
|
|
703,562
|
|
Investment securities
|
798,135
|
|
691,700
|
|
597,991
|
|
558,595
|
|
608,952
|
|
|
662,344
|
|
667,843
|
|
Interest-bearing deposits with
other banks
|
405,920
|
|
483,097
|
|
554,333
|
|
394,741
|
|
447,999
|
|
|
459,618
|
|
151,198
|
|
Total earning
assets
|
$5,792,624
|
|
$5,867,311
|
|
$6,000,760
|
|
$5,971,305
|
|
$6,241,790
|
|
|
$5,907,399
|
|
$4,342,804
|
|
Total assets
|
$6,270,480
|
|
$6,408,479
|
|
$6,621,021
|
|
$6,647,541
|
|
$6,840,393
|
|
|
$6,485,632
|
|
$4,734,809
|
|
Noninterest-bearing
deposits
|
$741,343
|
|
$721,501
|
|
$740,011
|
|
$774,393
|
|
$840,314
|
|
|
$744,159
|
|
$539,336
|
|
Interest-bearing
deposits
|
4,438,113
|
|
4,448,929
|
|
4,570,971
|
|
4,544,471
|
|
4,710,167
|
|
|
4,500,188
|
|
3,171,496
|
|
Total deposits
|
$5,179,456
|
|
$5,170,430
|
|
$5,310,982
|
|
$5,318,864
|
|
$5,550,481
|
|
|
$5,244,347
|
|
$3,710,832
|
|
Borrowings
|
$213,107
|
|
$352,370
|
|
$447,945
|
|
$458,876
|
|
$471,916
|
|
|
$367,358
|
|
$489,109
|
|
Shareholders' equity
|
$697,016
|
|
$684,112
|
|
$671,051
|
|
$679,567
|
|
$654,631
|
|
|
$682,987
|
|
$466,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY RATIOS (excluding
covered assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance to ending
loans
|
2.03%
|
|
2.07%
|
|
2.07%
|
|
2.01%
|
|
2.05%
|
|
|
2.03%
|
|
2.05%
|
|
Allowance to nonaccrual
loans
|
91.87%
|
|
86.54%
|
|
86.71%
|
|
84.71%
|
|
82.77%
|
|
|
91.87%
|
|
82.77%
|
|
Allowance to nonperforming
loans
|
81.03%
|
|
71.99%
|
|
72.79%
|
|
76.08%
|
|
76.25%
|
|
|
81.03%
|
|
76.25%
|
|
Nonperforming loans to total
loans
|
2.51%
|
|
2.88%
|
|
2.84%
|
|
2.65%
|
|
2.69%
|
|
|
2.51%
|
|
2.69%
|
|
Nonperforming assets to ending
loans, plus OREO
|
3.12%
|
|
3.51%
|
|
3.42%
|
|
3.27%
|
|
2.83%
|
|
|
3.12%
|
|
2.83%
|
|
Nonperforming assets to total
assets
|
1.42%
|
|
1.59%
|
|
1.46%
|
|
1.41%
|
|
1.23%
|
|
|
1.42%
|
|
1.23%
|
|
Net charge-offs to average loans
(annualized)
|
1.39%
|
|
0.97%
|
|
0.71%
|
|
2.00%
|
|
1.53%
|
|
|
1.27%
|
|
1.16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) December 31, 2010 regulatory
capital ratios are preliminary.
|
|
(3) Includes loans held for
sale.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
(Dollars in
thousands, except per share)
|
|
(Unaudited)
|
|
|
|
|
Three months
ended,
|
|
Twelve
months ended,
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
2010
|
|
2009
|
|
%
Change
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including
fees
|
$75,836
|
|
$81,471
|
|
(6.9%)
|
|
$306,075
|
|
$195,917
|
|
56.2%
|
|
Investment
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
5,522
|
|
6,422
|
|
(14.0%)
|
|
21,748
|
|
29,376
|
|
(26.0%)
|
|
Tax-exempt
|
214
|
|
320
|
|
(33.1%)
|
|
934
|
|
1,492
|
|
(37.4%)
|
|
Total
investment securities interest
|
5,736
|
|
6,742
|
|
(14.9%)
|
|
22,682
|
|
30,868
|
|
(26.5%)
|
|
Other earning
assets
|
749
|
|
5,132
|
|
(85.4%)
|
|
14,745
|
|
6,443
|
|
128.9%
|
|
Total
interest income
|
82,321
|
|
93,345
|
|
(11.8%)
|
|
343,502
|
|
233,228
|
|
47.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
12,923
|
|
17,207
|
|
(24.9%)
|
|
58,336
|
|
47,580
|
|
22.6%
|
|
Short-term
borrowings
|
33
|
|
23
|
|
43.5%
|
|
94
|
|
1,318
|
|
(92.9%)
|
|
Long-term
borrowings
|
1,194
|
|
2,611
|
|
(54.3%)
|
|
8,341
|
|
7,145
|
|
16.7%
|
|
Subordinated debentures
and capital securities
|
265
|
|
322
|
|
(17.7%)
|
|
1,221
|
|
1,202
|
|
1.6%
|
|
Total
interest expense
|
14,415
|
|
20,163
|
|
(28.5%)
|
|
67,992
|
|
57,245
|
|
18.8%
|
|
Net interest
income
|
67,906
|
|
73,182
|
|
(7.2%)
|
|
275,510
|
|
175,983
|
|
56.6%
|
|
Provision for loan and
lease losses - uncovered
|
9,741
|
|
14,812
|
|
(34.2%)
|
|
33,564
|
|
56,084
|
|
(40.2%)
|
|
Provision for loan and
lease losses - covered
|
13,997
|
|
0
|
|
N/M
|
|
63,144
|
|
0
|
|
N/M
|
|
Net interest income after
provision for loan and lease losses
|
44,168
|
|
58,370
|
|
(24.3%)
|
|
178,802
|
|
119,899
|
|
49.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
5,090
|
|
5,886
|
|
(13.5%)
|
|
22,188
|
|
19,662
|
|
12.8%
|
|
Trust and wealth
management fees
|
3,283
|
|
3,584
|
|
(8.4%)
|
|
13,862
|
|
13,465
|
|
2.9%
|
|
Bankcard income
|
2,255
|
|
1,869
|
|
20.7%
|
|
8,518
|
|
5,961
|
|
42.9%
|
|
Net gains from sales of
loans
|
1,241
|
|
341
|
|
263.9%
|
|
4,632
|
|
1,196
|
|
287.3%
|
|
Gains on sales of
investment securities
|
0
|
|
0
|
|
N/M
|
|
0
|
|
3,349
|
|
(100.0%)
|
|
Gain on
acquisition
|
0
|
|
0
|
|
N/M
|
|
0
|
|
342,494
|
|
(100.0%)
|
|
FDIC loss sharing
income
|
11,306
|
|
0
|
|
N/M
|
|
51,844
|
|
0
|
|
N/M
|
|
Accelerated discount on
covered loans
|
6,113
|
|
8,215
|
|
(25.6%)
|
|
29,067
|
|
8,601
|
|
237.9%
|
|
(Loss) Income on preferred
securities
|
0
|
|
(138)
|
|
(100.0%)
|
|
(30)
|
|
139
|
|
(121.6%)
|
|
Other
|
5,246
|
|
4,392
|
|
19.4%
|
|
16,750
|
|
9,848
|
|
70.1%
|
|
Total
noninterest income
|
34,534
|
|
24,149
|
|
43.0%
|
|
146,831
|
|
404,715
|
|
(63.7%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
28,819
|
|
30,141
|
|
(4.4%)
|
|
117,363
|
|
86,068
|
|
36.4%
|
|
Net occupancy
|
4,430
|
|
7,290
|
|
(39.2%)
|
|
22,555
|
|
16,202
|
|
39.2%
|
|
Furniture and
equipment
|
3,022
|
|
2,527
|
|
19.6%
|
|
10,299
|
|
8,054
|
|
27.9%
|
|
Data processing
|
1,593
|
|
890
|
|
79.0%
|
|
5,152
|
|
3,475
|
|
48.3%
|
|
Marketing
|
1,453
|
|
1,283
|
|
13.3%
|
|
5,357
|
|
3,494
|
|
53.3%
|
|
Communication
|
892
|
|
1,169
|
|
(23.7%)
|
|
3,908
|
|
3,246
|
|
20.4%
|
|
Professional
services
|
2,863
|
|
2,605
|
|
9.9%
|
|
9,169
|
|
6,032
|
|
52.0%
|
|
Debt
extinguishment
|
0
|
|
0
|
|
N/M
|
|
8,029
|
|
0
|
|
N/M
|
|
State intangible
tax
|
1,362
|
|
564
|
|
141.5%
|
|
4,843
|
|
2,508
|
|
93.1%
|
|
FDIC
assessments
|
2,272
|
|
1,529
|
|
48.6%
|
|
8,312
|
|
6,847
|
|
21.4%
|
|
Other
|
9,584
|
|
13,609
|
|
(29.6%)
|
|
38,693
|
|
34,712
|
|
11.5%
|
|
Total
noninterest expenses
|
56,290
|
|
61,607
|
|
(8.6%)
|
|
233,680
|
|
170,638
|
|
36.9%
|
|
Income before income
taxes
|
22,412
|
|
20,912
|
|
7.2%
|
|
91,953
|
|
353,976
|
|
(74.0%)
|
|
Income tax expense
|
8,112
|
|
7,117
|
|
14.0%
|
|
32,702
|
|
132,639
|
|
(75.3%)
|
|
Net
income
|
14,300
|
|
13,795
|
|
3.7%
|
|
59,251
|
|
221,337
|
|
(73.2%)
|
|
Dividends on preferred
stock
|
0
|
|
1,000
|
|
(100.0%)
|
|
1,865
|
|
3,578
|
|
(47.9%)
|
|
Income
available to common shareholders
|
$14,300
|
|
$12,795
|
|
11.8%
|
|
$57,386
|
|
$217,759
|
|
(73.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share -
basic
|
$0.25
|
|
$0.25
|
|
|
|
$1.01
|
|
$4.84
|
|
|
|
Net earnings per common share -
diluted
|
$0.24
|
|
$0.25
|
|
|
|
$0.99
|
|
$4.78
|
|
|
|
Dividends declared per common
share
|
$0.10
|
|
$0.10
|
|
|
|
$0.40
|
|
$0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.90%
|
|
0.80%
|
|
|
|
0.91%
|
|
4.67%
|
|
|
|
Return on average shareholders'
equity
|
8.14%
|
|
8.36%
|
|
|
|
8.68%
|
|
47.44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$82,321
|
|
$93,345
|
|
(11.8%)
|
|
$343,502
|
|
$233,228
|
|
47.3%
|
|
Tax equivalent
adjustment
|
220
|
|
295
|
|
(25.4%)
|
|
866
|
|
1,265
|
|
(31.5%)
|
|
Interest income - tax
equivalent
|
82,541
|
|
93,640
|
|
(11.9%)
|
|
344,368
|
|
234,493
|
|
46.9%
|
|
Interest expense
|
14,415
|
|
20,163
|
|
(28.5%)
|
|
67,992
|
|
57,245
|
|
18.8%
|
|
Net interest income - tax
equivalent
|
$68,126
|
|
$73,477
|
|
(7.3%)
|
|
$276,376
|
|
$177,248
|
|
55.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
4.65%
|
|
4.65%
|
|
|
|
4.66%
|
|
4.05%
|
|
|
|
Net interest margin (fully tax
equivalent) (1)
|
4.67%
|
|
4.67%
|
|
|
|
4.68%
|
|
4.08%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent employees
(2)
|
1,529
|
|
1,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
(2) Does not include associates
from acquisitions that are currently in a temporary hire
status.
|
|
|
|
N/M = Not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
CONSOLIDATED
QUARTERLY STATEMENTS OF INCOME
|
|
|
|
(Dollars in
thousands, except per share)
|
|
(Unaudited)
|
|
|
|
|
2010
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
|
|
%
Change
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
YTD
|
|
Linked
Qtr.
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including
fees
|
$75,836
|
|
$75,957
|
|
$74,944
|
|
$79,338
|
|
$306,075
|
|
(0.2%)
|
|
Investment
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
5,522
|
|
5,386
|
|
5,444
|
|
5,396
|
|
21,748
|
|
2.5%
|
|
Tax-exempt
|
214
|
|
240
|
|
245
|
|
235
|
|
934
|
|
(10.8%)
|
|
Total
investment securities interest
|
5,736
|
|
5,626
|
|
5,689
|
|
5,631
|
|
22,682
|
|
2.0%
|
|
Other earning
assets
|
749
|
|
3,101
|
|
5,305
|
|
5,590
|
|
14,745
|
|
(75.8%)
|
|
Total
interest income
|
82,321
|
|
84,684
|
|
85,938
|
|
90,559
|
|
343,502
|
|
(2.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
12,923
|
|
14,457
|
|
15,308
|
|
15,648
|
|
58,336
|
|
(10.6%)
|
|
Short-term
borrowings
|
33
|
|
25
|
|
17
|
|
19
|
|
94
|
|
32.0%
|
|
Long-term
borrowings
|
1,194
|
|
2,034
|
|
2,556
|
|
2,557
|
|
8,341
|
|
(41.3%)
|
|
Subordinated debentures
and capital securities
|
265
|
|
322
|
|
319
|
|
315
|
|
1,221
|
|
(17.7%)
|
|
Total
interest expense
|
14,415
|
|
16,838
|
|
18,200
|
|
18,539
|
|
67,992
|
|
(14.4%)
|
|
Net interest
income
|
67,906
|
|
67,846
|
|
67,738
|
|
72,020
|
|
275,510
|
|
0.1%
|
|
Provision for loan and
lease losses - uncovered
|
9,741
|
|
6,287
|
|
6,158
|
|
11,378
|
|
33,564
|
|
54.9%
|
|
Provision for loan and
lease losses - covered
|
13,997
|
|
20,725
|
|
18,962
|
|
9,460
|
|
63,144
|
|
(32.5%)
|
|
Net interest income after
provision for loan and lease losses
|
44,168
|
|
40,834
|
|
42,618
|
|
51,182
|
|
178,802
|
|
8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
5,090
|
|
5,632
|
|
5,855
|
|
5,611
|
|
22,188
|
|
(9.6%)
|
|
Trust and wealth
management fees
|
3,283
|
|
3,366
|
|
3,668
|
|
3,545
|
|
13,862
|
|
(2.5%)
|
|
Bankcard income
|
2,255
|
|
2,193
|
|
2,102
|
|
1,968
|
|
8,518
|
|
2.8%
|
|
Net gains from sales of
loans
|
1,241
|
|
2,749
|
|
473
|
|
169
|
|
4,632
|
|
(54.9%)
|
|
FDIC loss sharing
income
|
11,306
|
|
17,800
|
|
15,170
|
|
7,568
|
|
51,844
|
|
(36.5%)
|
|
Accelerated discount on
covered loans
|
6,113
|
|
9,448
|
|
7,408
|
|
6,098
|
|
29,067
|
|
(35.3%)
|
|
(Loss) income on preferred
securities
|
0
|
|
0
|
|
0
|
|
(30)
|
|
(30)
|
|
N/M
|
|
Other
|
5,246
|
|
3,707
|
|
5,791
|
|
2,006
|
|
16,750
|
|
41.5%
|
|
Total
noninterest income
|
34,534
|
|
44,895
|
|
40,467
|
|
26,935
|
|
146,831
|
|
(23.1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
28,819
|
|
28,790
|
|
29,513
|
|
30,241
|
|
117,363
|
|
0.1%
|
|
Net occupancy
|
4,430
|
|
4,663
|
|
5,340
|
|
8,122
|
|
22,555
|
|
(5.0%)
|
|
Furniture and
equipment
|
3,022
|
|
2,490
|
|
2,514
|
|
2,273
|
|
10,299
|
|
21.4%
|
|
Data processing
|
1,593
|
|
1,191
|
|
1,136
|
|
1,232
|
|
5,152
|
|
33.8%
|
|
Marketing
|
1,453
|
|
1,230
|
|
1,600
|
|
1,074
|
|
5,357
|
|
18.1%
|
|
Communication
|
892
|
|
986
|
|
822
|
|
1,208
|
|
3,908
|
|
(9.5%)
|
|
Professional
services
|
2,863
|
|
2,117
|
|
2,446
|
|
1,743
|
|
9,169
|
|
35.2%
|
|
Debt
extinguishment
|
0
|
|
8,029
|
|
0
|
|
0
|
|
8,029
|
|
(100.0%)
|
|
State intangible
tax
|
1,362
|
|
724
|
|
1,426
|
|
1,331
|
|
4,843
|
|
88.1%
|
|
FDIC
assessments
|
2,272
|
|
2,123
|
|
1,907
|
|
2,010
|
|
8,312
|
|
7.0%
|
|
Other
|
9,584
|
|
8,967
|
|
9,115
|
|
11,027
|
|
38,693
|
|
6.9%
|
|
Total
noninterest expenses
|
56,290
|
|
61,310
|
|
55,819
|
|
60,261
|
|
233,680
|
|
(8.2%)
|
|
Income before income
taxes
|
22,412
|
|
24,419
|
|
27,266
|
|
17,856
|
|
91,953
|
|
(8.2%)
|
|
Income tax expense
|
8,112
|
|
8,840
|
|
9,492
|
|
6,258
|
|
32,702
|
|
(8.2%)
|
|
Net
income
|
14,300
|
|
15,579
|
|
17,774
|
|
11,598
|
|
59,251
|
|
(8.2%)
|
|
Dividends on preferred
stock
|
0
|
|
0
|
|
0
|
|
1,865
|
|
1,865
|
|
N/M
|
|
Income
available to common shareholders
|
$14,300
|
|
$15,579
|
|
$17,774
|
|
$9,733
|
|
$57,386
|
|
(8.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share -
basic
|
$0.25
|
|
$0.27
|
|
$0.31
|
|
$0.18
|
|
$1.01
|
|
|
|
Net earnings per common share -
diluted
|
$0.24
|
|
$0.27
|
|
$0.30
|
|
$0.17
|
|
$0.99
|
|
|
|
Dividends declared per common
share
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
$0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.90%
|
|
0.96%
|
|
1.08%
|
|
0.71%
|
|
0.91%
|
|
|
|
Return on average shareholders'
equity
|
8.14%
|
|
9.03%
|
|
10.62%
|
|
6.92%
|
|
8.68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$82,321
|
|
$84,684
|
|
$85,938
|
|
$90,559
|
|
$343,502
|
|
(2.8%)
|
|
Tax equivalent
adjustment
|
220
|
|
222
|
|
212
|
|
212
|
|
866
|
|
(0.9%)
|
|
Interest income - tax
equivalent
|
82,541
|
|
84,906
|
|
86,150
|
|
90,771
|
|
344,368
|
|
(2.8%)
|
|
Interest expense
|
14,415
|
|
16,838
|
|
18,200
|
|
18,539
|
|
67,992
|
|
(14.4%)
|
|
Net interest income - tax
equivalent
|
$68,126
|
|
$68,068
|
|
$67,950
|
|
$72,232
|
|
$276,376
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
4.65%
|
|
4.59%
|
|
4.53%
|
|
4.89%
|
|
4.66%
|
|
|
|
Net interest margin (fully tax
equivalent) (1)
|
4.67%
|
|
4.60%
|
|
4.54%
|
|
4.91%
|
|
4.68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent employees
(2)
|
1,529
|
|
1,535
|
|
1,511
|
|
1,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
(2) Does not include associates
from acquisitions that are currently in a temporary hire
status.
|
|
|
|
N/M = Not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
CONSOLIDATED
QUARTERLY STATEMENTS OF INCOME
|
|
|
|
(Dollars in
thousands, except per share)
|
|
(Unaudited)
|
|
|
|
|
2009
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Full
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
Loans, including
fees
|
$81,471
|
|
$46,811
|
|
$33,978
|
|
$33,657
|
|
$195,917
|
|
Investment
securities
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
6,422
|
|
6,241
|
|
8,023
|
|
8,690
|
|
29,376
|
|
Tax-exempt
|
320
|
|
352
|
|
386
|
|
434
|
|
1,492
|
|
Total
investment securities interest
|
6,742
|
|
6,593
|
|
8,409
|
|
9,124
|
|
30,868
|
|
Other earning
assets
|
5,132
|
|
1,311
|
|
0
|
|
0
|
|
6,443
|
|
Total
interest income
|
93,345
|
|
54,715
|
|
42,387
|
|
42,781
|
|
233,228
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
17,207
|
|
11,490
|
|
9,080
|
|
9,803
|
|
47,580
|
|
Short-term
borrowings
|
23
|
|
261
|
|
527
|
|
507
|
|
1,318
|
|
Long-term
borrowings
|
2,611
|
|
1,977
|
|
1,251
|
|
1,306
|
|
7,145
|
|
Subordinated debentures
and capital securities
|
322
|
|
323
|
|
320
|
|
237
|
|
1,202
|
|
Total
interest expense
|
20,163
|
|
14,051
|
|
11,178
|
|
11,853
|
|
57,245
|
|
Net interest
income
|
73,182
|
|
40,664
|
|
31,209
|
|
30,928
|
|
175,983
|
|
Provision for loan and
lease losses - uncovered
|
14,812
|
|
26,655
|
|
10,358
|
|
4,259
|
|
56,084
|
|
Net interest income after
provision for loan and lease losses
|
58,370
|
|
14,009
|
|
20,851
|
|
26,669
|
|
119,899
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
5,886
|
|
5,408
|
|
4,289
|
|
4,079
|
|
19,662
|
|
Trust and wealth
management fees
|
3,584
|
|
3,339
|
|
3,253
|
|
3,289
|
|
13,465
|
|
Bankcard income
|
1,869
|
|
1,379
|
|
1,422
|
|
1,291
|
|
5,961
|
|
Net gains from sales of
loans
|
341
|
|
63
|
|
408
|
|
384
|
|
1,196
|
|
Gains on sales of
investment securities
|
0
|
|
0
|
|
3,349
|
|
0
|
|
3,349
|
|
Gain on
acquisition
|
0
|
|
342,494
|
|
0
|
|
0
|
|
342,494
|
|
Accelerated discount on
covered loans
|
8,215
|
|
386
|
|
0
|
|
0
|
|
8,601
|
|
(Loss) income on preferred
securities
|
(138)
|
|
154
|
|
112
|
|
11
|
|
139
|
|
Other
|
4,392
|
|
1,213
|
|
1,264
|
|
2,979
|
|
9,848
|
|
Total
noninterest income
|
24,149
|
|
354,436
|
|
14,097
|
|
12,033
|
|
404,715
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expenses
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
30,141
|
|
22,051
|
|
16,223
|
|
17,653
|
|
86,068
|
|
Net occupancy
|
7,290
|
|
3,442
|
|
2,653
|
|
2,817
|
|
16,202
|
|
Furniture and
equipment
|
2,527
|
|
1,874
|
|
1,851
|
|
1,802
|
|
8,054
|
|
Data processing
|
890
|
|
973
|
|
794
|
|
818
|
|
3,475
|
|
Marketing
|
1,283
|
|
871
|
|
700
|
|
640
|
|
3,494
|
|
Communication
|
1,169
|
|
737
|
|
669
|
|
671
|
|
3,246
|
|
Professional
services
|
2,605
|
|
1,220
|
|
1,254
|
|
953
|
|
6,032
|
|
State intangible
tax
|
564
|
|
628
|
|
648
|
|
668
|
|
2,508
|
|
FDIC
assessments
|
1,529
|
|
1,612
|
|
3,424
|
|
282
|
|
6,847
|
|
Other
|
13,609
|
|
12,893
|
|
4,580
|
|
3,630
|
|
34,712
|
|
Total
noninterest expenses
|
61,607
|
|
46,301
|
|
32,796
|
|
29,934
|
|
170,638
|
|
Income before income
taxes
|
20,912
|
|
322,144
|
|
2,152
|
|
8,768
|
|
353,976
|
|
Income tax expense
|
7,117
|
|
121,787
|
|
702
|
|
3,033
|
|
132,639
|
|
Net
income
|
13,795
|
|
200,357
|
|
1,450
|
|
5,735
|
|
221,337
|
|
Dividends on preferred
stock
|
1,000
|
|
1,000
|
|
1,000
|
|
578
|
|
3,578
|
|
Net income
available to common shareholders
|
$12,795
|
|
$199,357
|
|
$450
|
|
$5,157
|
|
$217,759
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share -
basic
|
$0.25
|
|
$3.91
|
|
$0.01
|
|
$0.14
|
|
$4.84
|
|
Net earnings per common share -
diluted
|
$0.25
|
|
$3.87
|
|
$0.01
|
|
$0.14
|
|
$4.78
|
|
Dividends declared per common
share
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
$0.10
|
|
$0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.80%
|
|
17.64%
|
|
0.15%
|
|
0.62%
|
|
4.67%
|
|
Return on average shareholders'
equity
|
8.36%
|
|
166.45%
|
|
1.53%
|
|
6.63%
|
|
47.44%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$93,345
|
|
$54,715
|
|
$42,387
|
|
$42,781
|
|
$233,228
|
|
Tax equivalent
adjustment
|
295
|
|
300
|
|
307
|
|
363
|
|
1,265
|
|
Interest income - tax
equivalent
|
93,640
|
|
55,015
|
|
42,694
|
|
43,144
|
|
234,493
|
|
Interest expense
|
20,163
|
|
14,051
|
|
11,178
|
|
11,853
|
|
57,245
|
|
Net interest income - tax
equivalent
|
$73,477
|
|
$40,964
|
|
$31,516
|
|
$31,291
|
|
$177,248
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
4.65%
|
|
3.90%
|
|
3.59%
|
|
3.61%
|
|
4.05%
|
|
Net interest margin (fully tax
equivalent) (1)
|
4.67%
|
|
3.93%
|
|
3.63%
|
|
3.65%
|
|
4.08%
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent employees
(2)
|
1,390
|
|
1,150
|
|
1,048
|
|
1,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
(2) Does not include
associates from acquisitions that are currently in a temporary hire
status.
|
|
|
|
N/M = Not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
CONSOLIDATED
STATEMENTS OF CONDITION
|
|
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
%
Change
|
|
%
Change
|
|
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
2009
|
|
Linked
Qtr.
|
|
Comparable
Qtr.
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$105,981
|
|
$144,101
|
|
$166,604
|
|
$308,330
|
|
$344,150
|
|
(26.5%)
|
|
(69.2%)
|
|
Interest-bearing
deposits with other banks
|
176,952
|
|
280,457
|
|
675,891
|
|
416,619
|
|
262,017
|
|
(36.9%)
|
|
(32.5%)
|
|
Investment
securities trading
|
0
|
|
0
|
|
0
|
|
0
|
|
200
|
|
N/M
|
|
(100.0%)
|
|
Investment
securities available-for-sale
|
919,110
|
|
616,175
|
|
503,404
|
|
430,519
|
|
471,002
|
|
49.2%
|
|
95.1%
|
|
Investment
securities held-to-maturity
|
17,406
|
|
17,842
|
|
17,601
|
|
17,903
|
|
18,115
|
|
(2.4%)
|
|
(3.9%)
|
|
Other
investments
|
78,689
|
|
86,509
|
|
86,509
|
|
87,029
|
|
89,830
|
|
(9.0%)
|
|
(12.4%)
|
|
Loans held for
sale
|
29,292
|
|
19,075
|
|
11,946
|
|
3,243
|
|
6,413
|
|
53.6%
|
|
356.8%
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
800,253
|
|
763,449
|
|
749,522
|
|
763,084
|
|
800,261
|
|
4.8%
|
|
(0.0%)
|
|
Real estate
- construction
|
163,543
|
|
178,914
|
|
197,112
|
|
216,289
|
|
253,223
|
|
(8.6%)
|
|
(35.4%)
|
|
Real estate
- commercial
|
1,139,931
|
|
1,095,543
|
|
1,113,836
|
|
1,091,830
|
|
1,079,628
|
|
4.1%
|
|
5.6%
|
|
Real estate
- residential
|
269,173
|
|
283,914
|
|
296,295
|
|
306,769
|
|
321,047
|
|
(5.2%)
|
|
(16.2%)
|
|
Installment
|
69,711
|
|
73,138
|
|
75,862
|
|
78,682
|
|
82,989
|
|
(4.7%)
|
|
(16.0%)
|
|
Home
equity
|
341,310
|
|
341,288
|
|
332,928
|
|
330,973
|
|
328,940
|
|
0.0%
|
|
3.8%
|
|
Credit
card
|
29,563
|
|
28,825
|
|
28,567
|
|
27,960
|
|
29,027
|
|
2.6%
|
|
1.8%
|
|
Lease
financing
|
2,609
|
|
138
|
|
15
|
|
15
|
|
14
|
|
1790.6%
|
|
18535.7%
|
|
Total loans, excluding covered loans
|
2,816,093
|
|
2,765,209
|
|
2,794,137
|
|
2,815,602
|
|
2,895,129
|
|
1.8%
|
|
(2.7%)
|
|
Less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
57,235
|
|
57,249
|
|
57,811
|
|
56,642
|
|
59,311
|
|
(0.0%)
|
|
(3.5%)
|
|
Net loans - uncovered
|
2,758,858
|
|
2,707,960
|
|
2,736,326
|
|
2,758,960
|
|
2,835,818
|
|
1.9%
|
|
(2.7%)
|
|
Covered
loans
|
1,481,493
|
|
1,609,584
|
|
1,717,632
|
|
1,833,349
|
|
1,934,740
|
|
(8.0%)
|
|
(23.4%)
|
|
Less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
16,493
|
|
11,583
|
|
1,273
|
|
0
|
|
0
|
|
42.4%
|
|
N/M
|
|
Net loans - covered
|
1,465,000
|
|
1,598,001
|
|
1,716,359
|
|
1,833,349
|
|
1,934,740
|
|
(8.3%)
|
|
(24.3%)
|
|
Net loans
|
4,223,858
|
|
4,305,961
|
|
4,452,685
|
|
4,592,309
|
|
4,770,558
|
|
(1.9%)
|
|
(11.5%)
|
|
Premises and
equipment
|
118,477
|
|
116,959
|
|
114,630
|
|
115,836
|
|
107,351
|
|
1.3%
|
|
10.4%
|
|
Goodwill
|
51,820
|
|
51,820
|
|
51,820
|
|
51,820
|
|
51,820
|
|
0.0%
|
|
0.0%
|
|
Other
intangibles
|
5,604
|
|
6,049
|
|
6,614
|
|
7,058
|
|
7,461
|
|
(7.4%)
|
|
(24.9%)
|
|
FDIC
indemnification asset
|
222,648
|
|
237,709
|
|
251,633
|
|
273,328
|
|
287,407
|
|
(6.3%)
|
|
(22.5%)
|
|
Accrued interest
and other assets
|
300,388
|
|
271,843
|
|
244,298
|
|
244,902
|
|
241,269
|
|
10.5%
|
|
24.5%
|
|
Total
Assets
|
$6,250,225
|
|
$6,154,500
|
|
$6,583,635
|
|
$6,548,896
|
|
$6,657,593
|
|
1.6%
|
|
(6.1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
|
$1,111,877
|
|
$999,922
|
|
$1,135,970
|
|
$1,042,790
|
|
$1,060,383
|
|
11.2%
|
|
4.9%
|
|
Savings
|
1,534,045
|
|
1,407,332
|
|
1,350,161
|
|
1,303,737
|
|
1,231,081
|
|
9.0%
|
|
24.6%
|
|
Time
|
1,794,843
|
|
1,930,652
|
|
2,042,824
|
|
2,135,683
|
|
2,229,500
|
|
(7.0%)
|
|
(19.5%)
|
|
Total interest-bearing deposits
|
4,440,765
|
|
4,337,906
|
|
4,528,955
|
|
4,482,210
|
|
4,520,964
|
|
2.4%
|
|
(1.8%)
|
|
Noninterest-bearing
|
705,484
|
|
713,357
|
|
718,381
|
|
741,476
|
|
829,676
|
|
(1.1%)
|
|
(15.0%)
|
|
Total deposits
|
5,146,249
|
|
5,051,263
|
|
5,247,336
|
|
5,223,686
|
|
5,350,640
|
|
1.9%
|
|
(3.8%)
|
|
Federal funds
purchased and securities sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
under agreements to repurchase
|
59,842
|
|
58,747
|
|
38,299
|
|
38,443
|
|
37,430
|
|
1.9%
|
|
59.9%
|
|
Long-term
debt
|
128,880
|
|
129,224
|
|
384,775
|
|
394,404
|
|
404,716
|
|
(0.3%)
|
|
(68.2%)
|
|
Other long-term
debt
|
20,620
|
|
20,620
|
|
20,620
|
|
20,620
|
|
20,620
|
|
0.0%
|
|
0.0%
|
|
Accrued interest
and other liabilities
|
197,240
|
|
203,715
|
|
211,049
|
|
203,984
|
|
194,229
|
|
(3.2%)
|
|
1.6%
|
|
Total
Liabilities
|
5,552,831
|
|
5,463,569
|
|
5,902,079
|
|
5,881,137
|
|
6,007,635
|
|
1.6%
|
|
(7.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
0
|
|
0
|
|
0
|
|
0
|
|
79,195
|
|
N/M
|
|
(100.0%)
|
|
Common
stock
|
580,097
|
|
579,309
|
|
578,362
|
|
581,747
|
|
490,532
|
|
0.1%
|
|
18.3%
|
|
Retained
earnings
|
310,271
|
|
301,777
|
|
292,004
|
|
280,030
|
|
276,119
|
|
2.8%
|
|
12.4%
|
|
Accumulated other
comprehensive loss
|
(12,044)
|
|
(9,106)
|
|
(7,831)
|
|
(9,091)
|
|
(10,487)
|
|
32.3%
|
|
14.8%
|
|
Treasury stock, at
cost
|
(180,930)
|
|
(181,049)
|
|
(180,979)
|
|
(184,927)
|
|
(185,401)
|
|
(0.1%)
|
|
(2.4%)
|
|
Total
Shareholders' Equity
|
697,394
|
|
690,931
|
|
681,556
|
|
667,759
|
|
649,958
|
|
0.9%
|
|
7.3%
|
|
Total
Liabilities and Shareholders' Equity
|
$6,250,225
|
|
$6,154,500
|
|
$6,583,635
|
|
$6,548,896
|
|
$6,657,593
|
|
1.6%
|
|
(6.1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
AVERAGE
CONSOLIDATED STATEMENTS OF CONDITION
|
|
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
Quarterly
Averages
|
|
Year-to-Date
Averages
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$122,167
|
|
$185,322
|
|
$273,162
|
|
$336,333
|
|
$274,601
|
|
$228,539
|
|
$133,611
|
|
Interest-bearing
deposits with other banks
|
405,920
|
|
483,097
|
|
554,333
|
|
394,741
|
|
447,999
|
|
459,618
|
|
151,198
|
|
Investment
securities
|
798,135
|
|
691,700
|
|
597,991
|
|
558,595
|
|
608,952
|
|
662,344
|
|
667,843
|
|
Loans held for
sale
|
21,141
|
|
14,909
|
|
7,615
|
|
2,292
|
|
2,936
|
|
11,550
|
|
4,138
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
739,082
|
|
735,228
|
|
746,636
|
|
785,579
|
|
839,456
|
|
751,459
|
|
841,088
|
|
Real estate
- construction
|
172,585
|
|
187,401
|
|
202,513
|
|
231,853
|
|
256,915
|
|
198,395
|
|
254,746
|
|
Real estate
- commercial
|
1,155,896
|
|
1,135,547
|
|
1,110,562
|
|
1,079,577
|
|
1,048,650
|
|
1,120,646
|
|
945,456
|
|
Real estate
- residential
|
276,166
|
|
295,917
|
|
301,880
|
|
309,104
|
|
333,858
|
|
295,677
|
|
347,238
|
|
Installment
|
71,623
|
|
71,739
|
|
77,299
|
|
79,437
|
|
87,825
|
|
74,994
|
|
89,991
|
|
Home
equity
|
339,192
|
|
336,288
|
|
332,044
|
|
333,275
|
|
332,169
|
|
335,219
|
|
310,375
|
|
Credit
card
|
28,962
|
|
28,664
|
|
28,052
|
|
28,430
|
|
28,025
|
|
28,529
|
|
27,138
|
|
Lease
financing
|
185
|
|
71
|
|
15
|
|
15
|
|
16
|
|
72
|
|
31
|
|
Total loans, excluding covered loans
|
2,783,691
|
|
2,790,855
|
|
2,799,001
|
|
2,847,270
|
|
2,926,914
|
|
2,804,991
|
|
2,816,063
|
|
Less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
60,433
|
|
60,871
|
|
60,430
|
|
59,891
|
|
54,164
|
|
60,409
|
|
42,553
|
|
Net loans - uncovered
|
2,723,258
|
|
2,729,984
|
|
2,738,571
|
|
2,787,379
|
|
2,872,750
|
|
2,744,582
|
|
2,773,510
|
|
Covered
loans
|
1,551,003
|
|
1,648,030
|
|
1,781,741
|
|
1,887,608
|
|
1,973,327
|
|
1,715,984
|
|
614,589
|
|
Less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
16,104
|
|
882
|
|
14
|
|
0
|
|
0
|
|
4,285
|
|
0
|
|
Net loans - covered
|
1,534,899
|
|
1,647,148
|
|
1,781,727
|
|
1,887,608
|
|
1,973,327
|
|
1,711,699
|
|
614,589
|
|
Net loans
|
4,258,157
|
|
4,377,132
|
|
4,520,298
|
|
4,674,987
|
|
4,846,077
|
|
4,456,281
|
|
3,388,099
|
|
Premises and
equipment
|
117,659
|
|
115,518
|
|
115,587
|
|
108,608
|
|
106,999
|
|
114,371
|
|
92,212
|
|
Goodwill
|
51,820
|
|
51,820
|
|
51,820
|
|
51,820
|
|
51,820
|
|
51,820
|
|
37,712
|
|
Other
intangibles
|
5,841
|
|
6,384
|
|
6,848
|
|
7,431
|
|
7,885
|
|
6,621
|
|
2,995
|
|
FDIC
indemnification asset
|
232,734
|
|
238,720
|
|
260,079
|
|
280,799
|
|
281,662
|
|
252,912
|
|
88,973
|
|
Accrued interest
and other assets
|
256,906
|
|
243,877
|
|
233,288
|
|
231,935
|
|
211,462
|
|
241,576
|
|
168,028
|
|
Total
Assets
|
$6,270,480
|
|
$6,408,479
|
|
$6,621,021
|
|
$6,647,541
|
|
$6,840,393
|
|
$6,485,632
|
|
$4,734,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
|
$1,086,685
|
|
$1,029,350
|
|
$1,139,001
|
|
$1,050,697
|
|
$1,093,735
|
|
$1,076,403
|
|
$862,730
|
|
Savings
|
1,490,132
|
|
1,412,441
|
|
1,341,194
|
|
1,318,374
|
|
1,233,715
|
|
1,391,066
|
|
771,202
|
|
Time
|
1,861,296
|
|
2,007,138
|
|
2,090,776
|
|
2,175,400
|
|
2,382,717
|
|
2,032,719
|
|
1,537,564
|
|
Total interest-bearing deposits
|
4,438,113
|
|
4,448,929
|
|
4,570,971
|
|
4,544,471
|
|
4,710,167
|
|
4,500,188
|
|
3,171,496
|
|
Noninterest-bearing
|
741,343
|
|
721,501
|
|
740,011
|
|
774,393
|
|
840,314
|
|
744,159
|
|
539,336
|
|
Total deposits
|
5,179,456
|
|
5,170,430
|
|
5,310,982
|
|
5,318,864
|
|
5,550,481
|
|
5,244,347
|
|
3,710,832
|
|
Short-term
borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
funds purchased and securities sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
under agreements to repurchase
|
63,489
|
|
50,580
|
|
37,353
|
|
38,413
|
|
41,456
|
|
47,536
|
|
99,865
|
|
Federal
Home Loan Bank
|
0
|
|
0
|
|
0
|
|
0
|
|
1,096
|
|
0
|
|
114,637
|
|
Other
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
29,512
|
|
Total short-term borrowings
|
63,489
|
|
50,580
|
|
37,353
|
|
38,413
|
|
42,552
|
|
47,536
|
|
244,014
|
|
Long-term
debt
|
128,998
|
|
281,170
|
|
389,972
|
|
399,843
|
|
408,744
|
|
299,202
|
|
224,475
|
|
Other long-term
debt
|
20,620
|
|
20,620
|
|
20,620
|
|
20,620
|
|
20,620
|
|
20,620
|
|
20,620
|
|
Total
borrowed funds
|
213,107
|
|
352,370
|
|
447,945
|
|
458,876
|
|
471,916
|
|
367,358
|
|
489,109
|
|
Accrued interest
and other liabilities
|
180,901
|
|
201,567
|
|
191,043
|
|
190,234
|
|
163,365
|
|
190,940
|
|
68,258
|
|
Total
Liabilities
|
5,573,464
|
|
5,724,367
|
|
5,949,970
|
|
5,967,974
|
|
6,185,762
|
|
5,802,645
|
|
4,268,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
0
|
|
0
|
|
0
|
|
47,521
|
|
78,573
|
|
11,717
|
|
78,241
|
|
Common
stock
|
579,701
|
|
578,810
|
|
580,299
|
|
549,428
|
|
490,889
|
|
572,161
|
|
448,897
|
|
Retained
earnings
|
306,923
|
|
294,346
|
|
282,634
|
|
277,775
|
|
276,950
|
|
290,510
|
|
134,464
|
|
Accumulated other
comprehensive loss
|
(8,584)
|
|
(8,021)
|
|
(8,320)
|
|
(9,873)
|
|
(6,372)
|
|
(8,694)
|
|
(8,559)
|
|
Treasury stock, at
cost
|
(181,024)
|
|
(181,023)
|
|
(183,562)
|
|
(185,284)
|
|
(185,409)
|
|
(182,707)
|
|
(186,433)
|
|
Total
Shareholders' Equity
|
697,016
|
|
684,112
|
|
671,051
|
|
679,567
|
|
654,631
|
|
682,987
|
|
466,610
|
|
Total
Liabilities and Shareholders' Equity
|
$6,270,480
|
|
$6,408,479
|
|
$6,621,021
|
|
$6,647,541
|
|
$6,840,393
|
|
$6,485,632
|
|
$4,734,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
NET INTEREST
MARGIN RATE/VOLUME ANALYSIS
|
|
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Quarterly
Averages
|
|
Year-to-Date
Averages
|
|
|
|
Dec. 31,
2010
|
|
Sep.
30, 2010
|
|
Dec. 31,
2009
|
|
Dec. 31,
2010
|
|
Dec. 31,
2009
|
|
|
|
Balance
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Balance
|
|
Yield
|
|
Earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
|
$
798,135
|
|
2.85%
|
|
$
691,700
|
|
3.23%
|
|
$
608,952
|
|
4.39%
|
|
$
662,344
|
|
3.42%
|
|
$
667,843
|
|
4.62%
|
|
Interest-bearing deposits
with other banks
|
|
405,920
|
|
0.36%
|
|
483,097
|
|
0.33%
|
|
447,999
|
|
0.18%
|
|
459,618
|
|
0.34%
|
|
151,198
|
|
0.14%
|
|
Gross loans, including
covered loans and indemnification asset (2)
|
|
4,588,569
|
|
6.59%
|
|
4,692,514
|
|
6.65%
|
|
5,184,839
|
|
6.61%
|
|
4,785,437
|
|
6.67%
|
|
3,523,763
|
|
5.74%
|
|
Total
earning assets
|
|
5,792,624
|
|
5.64%
|
|
5,867,311
|
|
5.73%
|
|
6,241,790
|
|
5.93%
|
|
5,907,399
|
|
5.81%
|
|
4,342,804
|
|
5.37%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonearning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and
lease losses
|
|
(76,537)
|
|
|
|
(61,753)
|
|
|
|
(54,164)
|
|
|
|
(64,694)
|
|
|
|
(42,553)
|
|
|
|
Cash and due from
banks
|
|
122,167
|
|
|
|
185,322
|
|
|
|
274,601
|
|
|
|
228,539
|
|
|
|
133,611
|
|
|
|
Accrued interest and other
assets
|
|
432,226
|
|
|
|
417,599
|
|
|
|
378,166
|
|
|
|
414,388
|
|
|
|
300,947
|
|
|
|
Total
assets
|
|
$
6,270,480
|
|
|
|
$ 6,408,479
|
|
|
|
$ 6,840,393
|
|
|
|
$ 6,485,632
|
|
|
|
$ 4,734,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
deposits
|
|
$
4,438,113
|
|
1.16%
|
|
$ 4,448,929
|
|
1.29%
|
|
$ 4,710,167
|
|
1.45%
|
|
$ 4,500,188
|
|
1.30%
|
|
$ 3,171,496
|
|
1.50%
|
|
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
63,489
|
|
0.21%
|
|
50,580
|
|
0.20%
|
|
42,552
|
|
0.21%
|
|
47,536
|
|
0.20%
|
|
244,014
|
|
0.54%
|
|
Long-term debt
|
|
128,998
|
|
3.67%
|
|
281,170
|
|
2.87%
|
|
408,744
|
|
2.53%
|
|
299,202
|
|
2.79%
|
|
224,475
|
|
3.18%
|
|
Other long-term
debt
|
|
20,620
|
|
5.10%
|
|
20,620
|
|
6.20%
|
|
20,620
|
|
6.20%
|
|
20,620
|
|
5.92%
|
|
20,620
|
|
5.83%
|
|
Total borrowed
funds
|
|
213,107
|
|
2.78%
|
|
352,370
|
|
2.68%
|
|
471,916
|
|
2.49%
|
|
367,358
|
|
2.63%
|
|
489,109
|
|
1.98%
|
|
Total
interest-bearing liabilities
|
|
4,651,220
|
|
1.23%
|
|
4,801,299
|
|
1.39%
|
|
5,182,083
|
|
1.54%
|
|
4,867,546
|
|
1.40%
|
|
3,660,605
|
|
1.56%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand
deposits
|
|
741,343
|
|
|
|
721,501
|
|
|
|
840,314
|
|
|
|
744,159
|
|
|
|
539,336
|
|
|
|
Other
liabilities
|
|
180,901
|
|
|
|
201,567
|
|
|
|
163,365
|
|
|
|
190,940
|
|
|
|
68,258
|
|
|
|
Shareholders'
equity
|
|
697,016
|
|
|
|
684,112
|
|
|
|
654,631
|
|
|
|
682,987
|
|
|
|
466,610
|
|
|
|
Total
liabilities & shareholders' equity
|
|
$
6,270,480
|
|
|
|
$ 6,408,479
|
|
|
|
$ 6,840,393
|
|
|
|
$ 6,485,632
|
|
|
|
$ 4,734,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(1)
|
|
$
67,906
|
|
|
|
$
67,846
|
|
|
|
$
73,182
|
|
|
|
$
275,510
|
|
|
|
$
175,983
|
|
|
|
Net interest spread
(1)
|
|
|
|
4.41%
|
|
|
|
4.34%
|
|
|
|
4.39%
|
|
|
|
4.41%
|
|
|
|
3.81%
|
|
Net interest margin
(1)
|
|
|
|
4.65%
|
|
|
|
4.59%
|
|
|
|
4.65%
|
|
|
|
4.66%
|
|
|
|
4.05%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Not tax
equivalent.
|
|
(2) Loans held for sale,
nonaccrual loans, covered loans, and indemnification asset are
included in gross loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
NET INTEREST
MARGIN RATE/VOLUME ANALYSIS(1)
|
|
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Linked Qtr.
Income Variance
|
|
Comparable
Qtr. Income Variance
|
|
Year-to-Date
Income Variance
|
|
|
|
Rate
|
|
Volume
|
|
Total
|
|
Rate
|
|
Volume
|
|
Total
|
|
Rate
|
|
Volume
|
|
Total
|
|
Earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
|
$
(655)
|
|
$
765
|
|
$
110
|
|
$ (2,366)
|
|
$ 1,360
|
|
$ (1,006)
|
|
$ (7,998)
|
|
$ (188)
|
|
$ (8,186)
|
|
Interest-bearing deposits
with other banks
|
|
47
|
|
(71)
|
|
(24)
|
|
203
|
|
(39)
|
|
164
|
|
308
|
|
1,052
|
|
1,360
|
|
Gross loans, including
covered loans and indemnification asset (2)
|
|
(723)
|
|
(1,726)
|
|
(2,449)
|
|
(278)
|
|
(9,904)
|
|
(10,182)
|
|
32,930
|
|
84,170
|
|
117,100
|
|
Total
earning assets
|
|
(1,331)
|
|
(1,032)
|
|
(2,363)
|
|
(2,441)
|
|
(8,583)
|
|
(11,024)
|
|
25,240
|
|
85,034
|
|
110,274
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
deposits
|
|
$ (1,503)
|
|
$
(31)
|
|
$ (1,534)
|
|
$ (3,492)
|
|
$ (792)
|
|
$ (4,284)
|
|
$ (6,468)
|
|
$ 17,224
|
|
$ 10,756
|
|
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
1
|
|
7
|
|
8
|
|
(1)
|
|
11
|
|
10
|
|
(835)
|
|
(389)
|
|
(1,224)
|
|
Long-term debt
|
|
568
|
|
(1,408)
|
|
(840)
|
|
1,172
|
|
(2,589)
|
|
(1,417)
|
|
(887)
|
|
2,083
|
|
1,196
|
|
Other long-term
debt
|
|
(57)
|
|
-
|
|
(57)
|
|
(57)
|
|
0
|
|
(57)
|
|
19
|
|
0
|
|
19
|
|
Total borrowed
funds
|
|
512
|
|
(1,401)
|
|
(889)
|
|
1,114
|
|
(2,578)
|
|
(1,464)
|
|
(1,703)
|
|
1,694
|
|
(9)
|
|
Total
interest-bearing liabilities
|
|
(991)
|
|
(1,432)
|
|
(2,423)
|
|
(2,378)
|
|
(3,370)
|
|
(5,748)
|
|
(8,171)
|
|
18,918
|
|
10,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(1)
|
|
$
(340)
|
|
$
400
|
|
$
60
|
|
$
(63)
|
|
$ (5,213)
|
|
$ (5,276)
|
|
$ 33,411
|
|
$ 66,116
|
|
$ 99,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Not tax
equivalent.
|
|
(2) Loans held for sale,
nonaccrual loans, covered loans, and indemnification asset are
included in gross loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
CREDIT
QUALITY
|
|
(excluding
covered assets)
|
|
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Full
Year
|
|
Full
Year
|
|
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLOWANCE FOR LOAN AND LEASE
LOSS ACTIVITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
$57,249
|
|
$57,811
|
|
$56,642
|
|
$59,311
|
|
$55,770
|
|
$59,311
|
|
$35,873
|
|
Provision for uncovered
loan and lease losses
|
9,741
|
|
6,287
|
|
6,158
|
|
11,378
|
|
14,812
|
|
33,564
|
|
56,084
|
|
Gross
charge-offs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
5,131
|
|
762
|
|
1,156
|
|
6,275
|
|
1,143
|
|
13,324
|
|
11,295
|
|
Real estate -
construction
|
500
|
|
3,607
|
|
2,386
|
|
2,126
|
|
6,788
|
|
8,619
|
|
12,680
|
|
Real estate -
commercial
|
1,887
|
|
2,013
|
|
359
|
|
3,932
|
|
1,854
|
|
8,191
|
|
4,514
|
|
Real estate -
residential
|
196
|
|
717
|
|
246
|
|
534
|
|
262
|
|
1,693
|
|
1,315
|
|
Installment
|
231
|
|
205
|
|
304
|
|
414
|
|
449
|
|
1,154
|
|
1,468
|
|
Home
equity
|
1,846
|
|
389
|
|
580
|
|
684
|
|
1,105
|
|
3,499
|
|
2,037
|
|
All
other
|
494
|
|
431
|
|
426
|
|
520
|
|
454
|
|
1,871
|
|
1,640
|
|
Total gross
charge-offs
|
10,285
|
|
8,124
|
|
5,457
|
|
14,485
|
|
12,055
|
|
38,351
|
|
34,949
|
|
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
57
|
|
334
|
|
120
|
|
109
|
|
148
|
|
620
|
|
632
|
|
Real estate -
construction
|
0
|
|
0
|
|
24
|
|
0
|
|
0
|
|
24
|
|
0
|
|
Real estate -
commercial
|
243
|
|
728
|
|
99
|
|
12
|
|
360
|
|
1,082
|
|
557
|
|
Real estate -
residential
|
6
|
|
11
|
|
4
|
|
3
|
|
3
|
|
24
|
|
27
|
|
Installment
|
116
|
|
116
|
|
127
|
|
160
|
|
195
|
|
519
|
|
857
|
|
Home
equity
|
74
|
|
21
|
|
10
|
|
87
|
|
6
|
|
192
|
|
16
|
|
All
other
|
34
|
|
65
|
|
84
|
|
67
|
|
72
|
|
250
|
|
214
|
|
Total
recoveries
|
530
|
|
1,275
|
|
468
|
|
438
|
|
784
|
|
2,711
|
|
2,303
|
|
Total net
charge-offs
|
9,755
|
|
6,849
|
|
4,989
|
|
14,047
|
|
11,271
|
|
35,640
|
|
32,646
|
|
Ending allowance for
uncovered loan and lease losses
|
$57,235
|
|
$57,249
|
|
$57,811
|
|
$56,642
|
|
$59,311
|
|
$57,235
|
|
$59,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHARGE-OFFS TO AVERAGE LOANS
AND LEASES (ANNUALIZED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
2.72%
|
|
0.23%
|
|
0.56%
|
|
3.18%
|
|
0.47%
|
|
1.69%
|
|
1.27%
|
|
Real estate -
construction
|
1.15%
|
|
7.64%
|
|
4.68%
|
|
3.72%
|
|
10.48%
|
|
4.33%
|
|
4.98%
|
|
Real estate -
commercial
|
0.56%
|
|
0.45%
|
|
0.09%
|
|
1.47%
|
|
0.57%
|
|
0.63%
|
|
0.42%
|
|
Real estate -
residential
|
0.27%
|
|
0.95%
|
|
0.32%
|
|
0.70%
|
|
0.31%
|
|
0.56%
|
|
0.37%
|
|
Installment
|
0.64%
|
|
0.49%
|
|
0.92%
|
|
1.30%
|
|
1.15%
|
|
0.85%
|
|
0.68%
|
|
Home equity
|
2.07%
|
|
0.43%
|
|
0.69%
|
|
0.73%
|
|
1.31%
|
|
0.99%
|
|
0.65%
|
|
All other
|
6.26%
|
|
5.05%
|
|
4.89%
|
|
6.46%
|
|
5.40%
|
|
5.67%
|
|
5.25%
|
|
Total net
charge-offs
|
1.39%
|
|
0.97%
|
|
0.71%
|
|
2.00%
|
|
1.53%
|
|
1.27%
|
|
1.16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPONENTS OF NONPERFORMING
LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$13,729
|
|
$17,320
|
|
$12,874
|
|
$21,572
|
|
$13,798
|
|
$13,729
|
|
$13,798
|
|
Real estate -
construction
|
12,921
|
|
13,454
|
|
18,890
|
|
17,710
|
|
35,604
|
|
12,921
|
|
35,604
|
|
Real estate -
commercial
|
28,342
|
|
27,945
|
|
28,272
|
|
21,196
|
|
15,320
|
|
28,342
|
|
15,320
|
|
Real estate -
residential
|
4,607
|
|
4,801
|
|
4,571
|
|
4,116
|
|
3,993
|
|
4,607
|
|
3,993
|
|
Installment
|
150
|
|
279
|
|
267
|
|
365
|
|
618
|
|
150
|
|
618
|
|
Home
equity
|
2,553
|
|
2,358
|
|
1,797
|
|
1,910
|
|
2,324
|
|
2,553
|
|
2,324
|
|
Total nonaccrual
loans
|
62,302
|
|
66,157
|
|
66,671
|
|
66,869
|
|
71,657
|
|
62,302
|
|
71,657
|
|
Restructured
loans
|
8,336
|
|
13,365
|
|
12,752
|
|
7,584
|
|
6,125
|
|
8,336
|
|
6,125
|
|
Total nonperforming
loans
|
70,638
|
|
79,522
|
|
79,423
|
|
74,453
|
|
77,782
|
|
70,638
|
|
77,782
|
|
Other real estate owned
(OREO)
|
17,907
|
|
18,305
|
|
16,818
|
|
18,087
|
|
4,145
|
|
17,907
|
|
4,145
|
|
Total nonperforming
assets
|
88,545
|
|
97,827
|
|
96,241
|
|
92,540
|
|
81,927
|
|
88,545
|
|
81,927
|
|
Accruing loans past due 90
days or more
|
370
|
|
233
|
|
276
|
|
286
|
|
417
|
|
370
|
|
417
|
|
Total underperforming
assets
|
$88,915
|
|
$98,060
|
|
$96,517
|
|
$92,826
|
|
$82,344
|
|
$88,915
|
|
$82,344
|
|
Total classified
assets
|
$202,140
|
|
$212,552
|
|
$201,859
|
|
$171,112
|
|
$163,451
|
|
$202,140
|
|
$163,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY RATIOS (excluding
covered assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease
losses to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
91.87%
|
|
86.54%
|
|
86.71%
|
|
84.71%
|
|
82.77%
|
|
91.87%
|
|
82.77%
|
|
Nonperforming
loans
|
81.03%
|
|
71.99%
|
|
72.79%
|
|
76.08%
|
|
76.25%
|
|
81.03%
|
|
76.25%
|
|
Total ending
loans
|
2.03%
|
|
2.07%
|
|
2.07%
|
|
2.01%
|
|
2.05%
|
|
2.03%
|
|
2.05%
|
|
Nonperforming loans to total
loans
|
2.51%
|
|
2.88%
|
|
2.84%
|
|
2.65%
|
|
2.69%
|
|
2.51%
|
|
2.69%
|
|
Nonperforming assets
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending loans, plus
OREO
|
3.12%
|
|
3.51%
|
|
3.42%
|
|
3.27%
|
|
2.83%
|
|
3.12%
|
|
2.83%
|
|
Total assets
|
1.42%
|
|
1.59%
|
|
1.46%
|
|
1.41%
|
|
1.23%
|
|
1.42%
|
|
1.23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
FINANCIAL BANCORP.
|
|
CAPITAL
ADEQUACY
|
|
|
|
(Dollars in
thousands, except per share)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
months ended,
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
2010
|
|
2010
|
|
2010
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
PER COMMON SHARE
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Market Price
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High
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$19.41
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$17.10
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$21.32
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$19.00
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$15.48
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$21.32
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$15.48
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Low
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$16.21
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$14.19
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$14.95
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$13.89
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$11.83
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$13.89
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$5.58
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Close
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$18.48
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$16.68
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$14.95
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$17.78
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$14.56
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$18.48
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$14.56
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Average common shares
outstanding - basic
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57,573,544
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57,570,709
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57,539,901
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55,161,551
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51,030,661
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56,969,491
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45,028,640
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Average common shares
outstanding - diluted
|
58,688,415
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58,531,505
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58,604,039
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56,114,424
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51,653,562
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57,993,078
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45,556,868
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Ending common shares
outstanding
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58,064,977
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58,057,934
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58,062,655
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57,833,969
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51,433,821
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58,064,977
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51,433,821
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REGULATORY
CAPITAL
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Preliminary
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Preliminary
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Tier 1 Capital
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$680,145
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$670,121
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$658,623
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$645,467
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$628,982
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$680,145
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$628,982
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Tier 1 Ratio
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18.45%
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18.64%
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18.15%
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17.37%
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16.11%
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18.45%
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16.11%
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Total Capital
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$727,252
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$715,938
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$704,752
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$692,630
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$678,024
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$727,252
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$678,024
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Total Capital Ratio
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19.72%
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19.91%
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19.42%
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18.64%
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17.37%
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19.72%
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17.37%
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Total Capital in excess of
minimum
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requirement
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$432,274
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$428,314
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$414,434
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$395,408
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$365,739
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$432,274
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$365,739
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Total Risk-Weighted
Assets
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$3,687,224
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$3,595,295
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$3,628,978
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$3,715,280
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$3,903,566
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$3,687,224
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$3,903,566
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Leverage Ratio
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10.89%
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10.50%
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9.99%
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9.76%
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9.24%
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10.89%
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9.24%
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OTHER CAPITAL
RATIOS
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Ending shareholders' equity to
ending
|
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assets
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11.16%
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11.23%
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10.35%
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10.20%
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9.76%
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11.16%
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9.76%
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Ending common shareholders'
equity
|
|
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to ending
assets
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11.16%
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11.23%
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10.35%
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10.20%
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8.57%
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11.16%
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8.57%
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Ending tangible shareholders'
equity
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to ending tangible
assets
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10.33%
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10.38%
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9.55%
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9.38%
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8.95%
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10.33%
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8.95%
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Ending tangible common
shareholders'
|
|
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equity to ending tangible
assets
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10.33%
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10.38%
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9.55%
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9.38%
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7.75%
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10.33%
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7.75%
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Average shareholders' equity
to
|
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average assets
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11.12%
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10.68%
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10.14%
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10.22%
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9.57%
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10.53%
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9.85%
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Average common shareholders'
equity
|
|
|
|
|
|
|
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to average
assets
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11.12%
|
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10.68%
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10.14%
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9.51%
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8.42%
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10.35%
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8.20%
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Average tangible shareholders'
equity
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|
|
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to average tangible
assets
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10.29%
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9.86%
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9.33%
|
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9.42%
|
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8.78%
|
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9.73%
|
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8.71%
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|
Average tangible common
shareholders'
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity to average tangible
assets
|
10.29%
|
|
9.86%
|
|
9.33%
|
|
8.70%
|
|
7.62%
|
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9.55%
|
|
7.04%
|
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SOURCE First Financial Bancorp