First Financial Bancorp.: First Financial Bancorp Announces First Quarter 2023 Financial Results

• Earnings per diluted share of $0.74 ; $0.76 on an adjusted(1) basis, 65% increase YoY
• Return on average assets of 1.69%; 1.72% on an adjusted(1) basis
• Record quarterly revenue of $214.9 million
• Net interest margin on FTE basis⁽¹⁾ of 4.55%; 8 bp increase from linked quarter
• Loan growth of $134.4 million ; 5.3% on an annualized basis
• Record adjusted(1) fee income driven by foreign exchange, leasing, and wealth management
• Stable credit quality with de minimis net charge-offs
• Regulatory capital ratios increased and remain in excess of targets

CINCINNATI, April 20, 2023 /PRNewswire/ -- First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three months ended March 31, 2023 .

For the three months ended March 31, 2023, the Company reported net income of $70.4 million, or $0.74 per diluted common share. These results compare to net income of $69.1 million, or $0.73 per diluted common share, for the fourth quarter of 2022.

Return on average assets for the first quarter of 2023 was 1.69% while return on average tangible common equity was 29.02%⁽¹⁾. These compare to return on average assets of 1.63% and return on average tangible common equity of 29.93%⁽¹⁾ in the fourth quarter of 2022.

First quarter 2023 highlights include:

• Net interest margin of 4.51%, or 4.55% on a fully tax-equivalent basis⁽¹⁾
• 8 bp increase to 4.55% from 4.47% in the fourth quarter due to higher asset yields
• Higher loan balances and 62 bp increase in loan yields offset 49 bp increase in cost of deposits
• Average deposit balances increased $179.8 million with growth in brokered and retail CDs offsetting
  declines in public funds and business balances
• Noninterest income of $55.5 million, or $55.4 million as adjusted⁽¹⁾
• Record leasing business income of $13.7 million ; 22.8% increase from fourth quarter
• Foreign exchange income of $16.9 million reflected continued strong demand
• Record trust and wealth management fees of $6.3 million ; 12.1% increase from fourth quarter
• Adjusted⁽¹⁾ for $0.1 million gain on investment securities
• Noninterest expenses of $116.7 million, or $114.6 million as adjusted⁽¹⁾
• Adjustments⁽¹⁾ include $0.5 million of contract termination costs as well as $1.6 million of other costs
  not expected to recur such as acquisition, severance and branch consolidation costs
• $7.7 million decline from fourth quarter driven by lower professional services, tax credit investment
  write-downs, charitable contributions, and incentive costs
• Efficiency ratio of 54.3%; 53.3% as adjusted⁽¹⁾

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

⁽²⁾ The consolidated balance sheets at December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022 include assets acquired and liabilities assumed in the Summit Financial transaction. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. These fair value measurements were considered final as of December 31, 2022 .

• Moderate loan growth during the quarter
• Loan balances increased $134.4 million compared to the fourth quarter
• Growth of 5.3% on an annualized basis
• Residential mortgage, C&I, and equipment leases drove quarterly growth
• Total Allowance for Credit Losses of $161.8 million ; Total quarterly provision expense of $10.5 million
• Loans and leases - ACL of $141.6 million ; increased 7 bps to 1.36% of total loans
• Unfunded Commitments - ACL of $20.2 million
• Provision expense driven by loan growth, slower prepayment speeds and economic forecasts
• De minimis net charge-offs during the quarter
• Capital ratios remain solid
• Total capital ratio of 13.66%
• Tier 1 common equity increased 17 bps to 11.00%
• Tangible common equity increased 52 bps to 6.47%⁽¹⁾; 8.54%⁽¹⁾ excluding impact from AOCI
• Tangible book value per share of $10.76 ⁽¹⁾

Mr. Brown, President and CEO, commented on the quarter, "The first quarter was a really strong quarter for First Financial and I am very pleased with our operating performance. The Company achieved record revenue of $215 million . Net income and total revenue increased 70% and 46%, respectively, from the same quarter last year, with both increasing slightly compared to the linked quarter. Our quarterly results were driven by strong net interest income, moderate loan growth, an 8 bp increase in our net interest margin, record leasing business income, another great quarter from Bannockburn and strong performance from our Yellow Cardinal Wealth Division."

Mr. Brown continued, "We continue to manage the significant increase in short term rates effectively, and during the first quarter, the increase in our asset yields exceeded the increase in total funding costs by 4 bps. Average deposit balances increased slightly from the linked quarter as increases in brokered and retail CDs offset outflows in public funds and business deposits, which were primarily seasonal. The majority of these outflows occurred in the first two months of the quarter. The deposit beta from the first quarter of 2022 through the first quarter of 2023 was 21%. From a liquidity standpoint, our loan to deposit ratio was 82%, and we also maintain flexibility through our investment portfolio, 98% of which was classified as available-for-sale as of March 31 ."

Mr. Brown discussed asset quality, "Credit quality remained stable in the first quarter. Net charge-offs were de minimis and nonperforming assets declined slightly as a percentage of total assets from the linked quarter. Additionally, the ACL increased $8.6 million during the quarter, driven by loan growth, slower prepayments and changes in economic forecasts. As a result, the ACL was 1.36% as a percentage of total loan balances, which was a 7 basis point increase from the coverage ratio at year-end."

Mr. Brown concluded, "We are very pleased with the strengthening of our capital ratios this quarter. Our strong profitability and recent decline in market rates led to a 52-basis point increase in our tangible common equity ratio. In addition, tangible book value per share increased 8% to $10.76 . The quarter had its challenges for the industry and there is nearterm uncertainty regarding the economy. We are extremely pleased with our results and how we have managed the challenges to date. We believe we remain well positioned to manage future uncertainty due to our profitability, net interest margin, ample liquidity, and strong levels of capital."

Full detail of the Company's first quarter 2023 performance is provided in the accompanying financial statements and slide presentation.

Teleconference / Webcast Information
First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Friday, April 21, 2023 at 8:30 a.m. Eastern Time . Members of the public who would like to listen to the conference call should dial [phone] (U.S. toll free) or [phone] (U.S. local), access code 842558. The number should be dialed five to ten minutes prior to the start of the conference call. A replay of the conference call will be available beginning one hour after the completion of the live call at [phone] (U.S. toll free), [phone] (U.S. local) and [phone] (all other locations), access code 342184. The recording will be available until May 25, 2023 . The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at www.bankatfirst.com. The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

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

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

Forward-Looking Statements

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

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

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

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2022, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov.

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

About First Financial Bancorp. First Financial Bancorp. is a Cincinnati, Ohio based bank holding company. As of March 31, 2023, the Company had $16.9 billion in assets, $10.4 billion in loans, $12.7 billion in deposits and $2.1 billion in shareholders' equity. The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management. These business units provide traditional banking services to business and retail clients. Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $3.3 billion in assets under management as of March 31, 2023 . The Company operated 130 full service banking centers as of March 31, 2023, located in Ohio, Indiana, Kentucky and Illinois, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.

FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)
	Three Months Ended,
	Mar. 31,		Dec. 31,		Sep. 30,		June 30,		Mar. 31,
	2023		2022		2022		2022		2022
RESULTS OF OPERATIONS
Net income	$ 70,403		$ 69,086		$ 55,705		$ 51,520		$ 41,301
Net earnings per share - basic	$ 0.75		$ 0.74		$ 0.60		$ 0.55		$ 0.44
Net earnings per share - diluted	$ 0.74		$ 0.73		$ 0.59		$ 0.55		$ 0.44
Dividends declared per share	$ 0.23		$ 0.23		$ 0.23		$ 0.23		$ 0.23
KEY FINANCIAL RATIOS
Return on average assets	1.69 %		1.63 %		1.35 %		1.28 %		1.03 %
Return on average shareholders' equity	13.71 %		13.64 %		10.58 %		9.84 %		7.53 %
Return on average tangible shareholders' equity (1)	29.02 %		29.93 %		22.29 %		20.68 %		14.93 %
Net interest margin	4.51 %		4.43 %		3.93 %		3.41 %		3.11 %
Net interest margin (fully tax equivalent) (1)(2)	4.55 %		4.47 %		3.98 %		3.45 %		3.16 %
Ending shareholders' equity as a percent of ending assets	12.53 %		12.01 %		12.00 %		12.74 %		13.35 %
Ending tangible shareholders' equity as a percent of:
Ending tangible assets (1)	6.47 %		5.95 %		5.79 %		6.40 %		6.95 %
Risk-weighted assets (1)	7.87 %		7.32 %		7.21 %		8.09 %		8.85 %
Average shareholders' equity as a percent of average assets	12.29 %		11.98 %		12.75 %		12.97 %		13.75 %
Average tangible shareholders' equity as a percent of
average tangible assets (1)	6.21 %		5.84 %		6.49 %		6.62 %		7.44 %
Book value per share	$ 22.29		$ 21.51		$ 21.03		$ 21.90		$ 22.63
Tangible book value per share (1)	$ 10.76		$ 9.97		$ 9.48		$ 10.27		$ 10.97
Common equity tier 1 ratio (3)	11.00 %		10.83 %		10.82 %		10.91 %		10.87 %
Tier 1 ratio (3)	11.34 %		11.17 %		11.17 %		11.28 %		11.24 %
Total capital ratio (3)	13.66 %		13.64 %		13.73 %		13.94 %		13.97 %
Leverage ratio (3)	9.03 %		8.89 %		8.88 %		8.76 %		8.64 %
AVERAGE BALANCE SHEET ITEMS
Loans (4)	$ 10,373,302		$ 10,059,119		$ 9,597,197		$ 9,367,820		$ 9,266,774
Investment securities	3,635,317		3,705,304		4,003,472		4,118,287		4,308,059
Interest-bearing deposits with other banks	318,026		372,054		317,146		294,136		273,763
Total earning assets	$ 14,326,645		$ 14,136,477		$ 13,917,815		$ 13,780,243		$ 13,848,596
Total assets	$ 16,942,999		$ 16,767,598		$ 16,385,989		$ 16,185,978		$ 16,184,919
Noninterest-bearing deposits	$ 3,954,915		$ 4,225,192		$ 4,176,242		$ 4,224,842		$ 4,160,175
Interest-bearing deposits	8,857,226		8,407,114		8,194,781		8,312,876		8,623,800
Total deposits	$ 12,812,141		$ 12,632,306		$ 12,371,023		$ 12,537,718		$ 12,783,975
Borrowings	$ 1,434,338		$ 1,489,088		$ 1,406,718		$ 1,079,596		$ 721,695
Shareholders' equity	$ 2,082,210		$ 2,009,564		$ 2,089,179		$ 2,099,670		$ 2,225,495
CREDIT QUALITY RATIOS
Allowance to ending loans	1.36 %		1.29 %		1.27 %		1.25 %		1.34 %
Allowance to nonaccrual loans	409.46 %		464.58 %		341.61 %		302.87 %		273.09 %
Allowance to nonperforming loans	409.46 %		335.94 %		262.09 %		235.08 %		231.98 %
Nonperforming loans to total loans	0.33 %		0.38 %		0.48 %		0.53 %		0.58 %
Nonaccrual loans to total loans	0.33 %		0.28 %		0.37 %		0.41 %		0.49 %
Nonperforming assets to ending loans, plus OREO	0.33 %		0.39 %		0.48 %		0.53 %		0.58 %
Nonperforming assets to total assets	0.21 %		0.23 %		0.28 %		0.31 %		0.33 %
Classified assets to total assets	0.94 %		0.75 %		0.69 %		0.74 %		0.67 %
Net charge-offs to average loans (annualized)	0.00 %		(0.01) %		0.07 %		0.08 %		0.10 %

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

⁽²⁾ The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest 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.

⁽³⁾ March 31, 2023 regulatory capital ratios are preliminary.

⁽⁴⁾ Includes loans held for sale.

FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
	2023		2022
	First		Fourth		Third		Second		First		Full
	Quarter		Quarter		Quarter		Quarter		Quarter		Year
Interest income
Loans and leases, including fees	$ 169,706		$ 152,299		$ 122,170		$ 97,091		$ 87,182		$ 458,742
Investment securities
Taxable	31,867		30,248		26,331		23,639		22,096		102,314
Tax-exempt	3,464		4,105		5,014		4,916		4,431		18,466
Total investment securities interest	35,331		34,353		31,345		28,555		26,527		120,780
Other earning assets	3,544		3,262		1,597		505		120		5,484
Total interest income	208,581		189,914		155,112		126,151		113,829		585,006
Interest expense
Deposits	31,456		16,168		6,386		2,963		2,623		28,140
Short-term borrowings	12,950		11,091		6,158		1,566		317		19,132
Long-term borrowings	4,857		4,759		4,676		4,612		4,544		18,591
Total interest expense	49,263		32,018		17,220		9,141		7,484		65,863
Net interest income	159,318		157,896		137,892		117,010		106,345		519,143
Provision for credit losses-loans and leases	8,644		8,689		7,898		(4,267)		(5,589)		6,731
Provision for credit losses-unfunded commitments	1,835		1,341		386		3,481		(226)		4,982
Net interest income after provision for credit losses	148,839		147,866		129,608		117,796		112,160		507,430
Noninterest income
Service charges on deposit accounts	6,514		6,406		6,279		7,648		7,729		28,062
Trust and wealth management fees	6,334		5,648		5,487		6,311		6,060		23,506
Bankcard income	3,592		3,736		3,484		3,823		3,337		14,380
Client derivative fees	1,005		1,822		1,447		1,369		803		5,441
Foreign exchange income	16,898		19,592		11,752		13,470		10,151		54,965
Leasing business income	13,664		11,124		7,127		7,247		6,076		31,574
Net gains from sales of loans	2,335		2,206		3,729		5,241		3,872		15,048
Net gain (loss) on sale of investment securities	(519)		(393)		(179)		0		3		(569)
Net gain (loss) on equity securities	640		1,315		(701)		(1,054)		(199)		(639)
Other	5,080		4,579		4,109		5,723		3,462		17,873
Total noninterest income	55,543		56,035		42,534		49,778		41,294		189,641
Noninterest expenses
Salaries and employee benefits	72,254		73,621		66,808		64,992		63,947		269,368
Net occupancy	5,685		5,434		5,669		5,359		5,746		22,208
Furniture and equipment	3,317		3,234		3,222		3,201		3,567		13,224
Data processing	9,020		8,567		8,497		8,334		8,264		33,662
Marketing	2,160		2,198		2,523		2,323		1,700		8,744
Communication	634		690		657		670		666		2,683
Professional services	1,946		3,015		2,346		2,214		2,159		9,734
State intangible tax	985		974		1,090		1,090		1,131		4,285
FDIC assessments	2,826		2,173		1,885		1,677		1,459		7,194
Intangible amortization	2,600		2,573		2,783		2,915		2,914		11,185
Leasing business expense	7,938		6,061		5,746		4,687		3,869		20,363
Other	7,328		15,902		23,842		5,572		7,383		52,699
Total noninterest expenses	116,693		124,442		125,068		103,034		102,805		455,349
Income before income taxes	87,689		79,459		47,074		64,540		50,649		241,722
Income tax expense (benefit)	17,286		10,373		(8,631)		13,020		9,348		24,110
Net income	$ 70,403		$ 69,086		$ 55,705		$ 51,520		$ 41,301		$ 217,612
ADDITIONAL DATA
Net earnings per share - basic	$ 0.75		$ 0.74		$ 0.60		$ 0.55		$ 0.44		$ 2.33
Net earnings per share - diluted	$ 0.74		$ 0.73		$ 0.59		$ 0.55		$ 0.44		$ 2.30
Dividends declared per share	$ 0.23		$ 0.23		$ 0.23		$ 0.23		$ 0.23		$ 0.92
Return on average assets	1.69 %		1.63 %		1.35 %		1.28 %		1.03 %		1.33 %
Return on average shareholders' equity	13.71 %		13.64 %		10.58 %		9.84 %		7.53 %		10.34 %
Interest income	$ 208,581		$ 189,914		$ 155,112		$ 126,151		$ 113,829		$ 585,006
Tax equivalent adjustment	1,424		1,553		1,712		1,625		1,467		6,357
Interest income - tax equivalent	210,005		191,467		156,824		127,776		115,296		591,363
Interest expense	49,263		32,018		17,220		9,141		7,484		65,863
Net interest income - tax equivalent	$ 160,742		$ 159,449		$ 139,604		$ 118,635		$ 107,812		$ 525,500
Net interest margin	4.51 %		4.43 %		3.93 %		3.41 %		3.11 %		3.73 %
Net interest margin (fully tax equivalent) (1)	4.55 %		4.47 %		3.98 %		3.45 %		3.16 %		3.77 %
Full-time equivalent employees	2,066		2,070		2,072		2,096		2,050

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate. Management believes that it is a standard practice in the banking industry to present net interest 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.

FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
	Mar. 31,		Dec. 31,		Sep. 30,		June 30,		Mar. 31,		% Change		% Change
	2023		2022		2022		2022		2022		Linked Qtr.		Comp Qtr.
ASSETS
Cash and due from banks	$ 199,835		$ 207,501		$ 195,553		$ 217,481		$ 214,571		(3.7) %		(6.9) %
Interest-bearing deposits with other banks	305,465		388,182		338,978		270,042		243,004		(21.3) %		25.7 %
Investment securities available-for-sale	3,384,949		3,409,648		3,531,353		3,843,580		3,957,882		(0.7) %		(14.5) %
Investment securities held-to-maturity	83,070		84,021		85,823		88,057		92,597		(1.1) %		(10.3) %
Other investments	143,606		143,160		138,767		132,151		114,563		0.3 %		25.4 %
Loans held for sale	9,280		7,918		10,684		22,044		12,670		17.2 %		(26.8) %
Loans and leases
Commercial and industrial	3,449,289		3,410,272		3,139,219		2,927,175		2,800,209		1.1 %		23.2 %
Lease financing	273,898		236,124		176,072		146,639		125,867		16.0 %		117.6 %
Construction real estate	525,906		512,050		489,446		449,734		479,744		2.7 %		9.6 %
Commercial real estate	4,056,627		4,052,759		3,976,345		4,007,037		4,031,484		0.1 %		0.6 %
Residential real estate	1,145,069		1,092,265		1,024,596		965,387		913,838		4.8 %		25.3 %
Home equity	724,672		733,791		737,318		725,700		707,973		(1.2) %		2.4 %
Installment	204,372		209,895		202,267		146,680		132,197		(2.6) %		54.6 %
Credit card	53,552		51,815		52,173		52,065		50,305		3.4 %		6.5 %
Total loans	10,433,385		10,298,971		9,797,436		9,420,417		9,241,617		1.3 %		12.9 %
Less:
Allowance for credit losses	(141,591)		(132,977)		(124,096)		(117,885)		(124,130)		6.5 %		14.1 %
Net loans	10,291,794		10,165,994		9,673,340		9,302,532		9,117,487		1.2 %		12.9 %
Premises and equipment	188,959		189,080		189,067		191,099		190,975		(0.1) %		(1.1) %
Operating leases	153,986		91,738		84,851		82,659		61,927		67.9 %		148.7 %
Goodwill	1,005,738		1,001,507		998,422		999,959		999,959		0.4 %		0.6 %
Other intangibles	91,169		93,919		96,528		99,019		101,673		(2.9) %		(10.3) %
Accrued interest and other assets	1,076,033		1,220,648		1,280,427		995,091		901,842		(11.8) %		19.3 %
Total Assets	$ 16,933,884		$ 17,003,316		$ 16,623,793		$ 16,243,714		$ 16,009,150		(0.4) %		5.8 %
LIABILITIES
Deposits
Interest-bearing demand	$ 2,761,811		$ 3,037,153		$ 2,980,465		$ 3,096,365		$ 3,246,646		(9.1) %		(14.9) %
Savings	3,746,403		3,828,139		3,980,020		4,029,717		4,188,867		(2.1) %		(10.6) %
Time	2,336,368		1,700,705		1,242,412		1,026,918		1,121,966		37.4 %		108.2 %
Total interest-bearing deposits	8,844,582		8,565,997		8,202,897		8,153,000		8,557,479		3.3 %		3.4 %
Noninterest-bearing	3,830,102		4,135,180		4,137,038		4,124,111		4,261,429		(7.4) %		(10.1) %
Total deposits	12,674,684		12,701,177		12,339,935		12,277,111		12,818,908		(0.2) %		(1.1) %
Federal funds purchased and securities sold
under agreements to repurchase	0		0		3,535		0		0		0.0 %		0.0 %
FHLB short-term borrowings	1,089,400		1,130,000		972,600		896,000		185,000		(3.6) %		488.9 %
Other	128,160		157,156		184,912		152,226		57,247		(18.5) %		123.9 %
Total short-term borrowings	1,217,560		1,287,156		1,161,047		1,048,226		242,247		(5.4) %		402.6 %
Long-term debt	342,647		346,672		355,116		358,578		379,840		(1.2) %		(9.8) %
Total borrowed funds	1,560,207		1,633,828		1,516,163		1,406,804		622,087		(4.5) %		150.8 %
Accrued interest and other liabilities	577,497		626,938		773,563		491,129		430,710		(7.9) %		34.1 %
Total Liabilities	14,812,388		14,961,943		14,629,661		14,175,044		13,871,705		(1.0) %		6.8 %
SHAREHOLDERS' EQUITY
Common stock	1,629,428		1,634,605		1,631,696		1,637,237		1,634,903		(0.3) %		(0.3) %
Retained earnings	1,016,893		968,237		920,943		887,006		857,178		5.0 %		18.6 %
Accumulated other comprehensive income (loss)	(328,059)		(358,663)		(354,570)		(243,328)		(142,477)		(8.5) %		130.3 %
Treasury stock, at cost	(196,766)		(202,806)		(203,937)		(212,245)		(212,159)		(3.0) %		(7.3) %
Total Shareholders' Equity	2,121,496		2,041,373		1,994,132		2,068,670		2,137,445		3.9 %		(0.7) %
Total Liabilities and Shareholders' Equity	$ 16,933,884		$ 17,003,316		$ 16,623,793		$ 16,243,714		$ 16,009,150		(0.4) %		5.8 %

FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
	Quarterly Averages
	Mar. 31,		Dec. 31,		Sep. 30,		June 30,		Mar. 31,
	2023		2022		2022		2022		2022
ASSETS
Cash and due from banks	$ 218,724		$ 218,216		$ 228,068		$ 248,463		$ 241,271
Interest-bearing deposits with other banks	318,026		372,054		317,146		294,136		273,763
Investment securities	3,635,317		3,705,304		4,003,472		4,118,287		4,308,059
Loans held for sale	5,531		8,639		12,283		15,446		15,589
Loans and leases
Commercial and industrial	3,456,681		3,249,252		3,040,547		2,884,373		2,736,613
Lease financing	252,219		203,790		158,667		134,334		115,703
Construction real estate	536,294		501,787		469,489		460,609		474,278
Commercial real estate	4,017,021		4,028,944		3,969,935		4,025,493		4,139,072
Residential real estate	1,115,889		1,066,859		998,476		936,165		903,567
Home equity	728,185		735,039		728,791		716,219		703,714
Installment	205,934		208,484		164,063		140,145		125,579
Credit card	55,548		56,325		54,946		55,036		52,659
Total loans	10,367,771		10,050,480		9,584,914		9,352,374		9,251,185
Less:
Allowance for credit losses	(136,419)		(127,541)		(119,000)		(123,950)		(129,601)
Net loans	10,231,352		9,922,939		9,465,914		9,228,424		9,121,584
Premises and equipment	190,346		189,342		190,738		191,895		192,832
Operating leases	107,092		88,365		83,970		73,862		61,297
Goodwill	1,005,713		998,575		999,690		999,958		1,000,238
Other intangibles	92,587		95,256		97,781		100,354		103,033
Accrued interest and other assets	1,138,311		1,168,908		986,927		915,153		867,253
Total Assets	$ 16,942,999		$ 16,767,598		$ 16,385,989		$ 16,185,978		$ 16,184,919
LIABILITIES
Deposits
Interest-bearing demand	$ 2,906,712		$ 3,103,091		$ 3,105,547		$ 3,180,846		$ 3,246,919
Savings	3,818,807		3,943,342		4,036,565		4,076,380		4,145,615
Time	2,131,707		1,360,681		1,052,669		1,055,650		1,231,266
Total interest-bearing deposits	8,857,226		8,407,114		8,194,781		8,312,876		8,623,800
Noninterest-bearing	3,954,915		4,225,192		4,176,242		4,224,842		4,160,175
Total deposits	12,812,141		12,632,306		12,371,023		12,537,718		12,783,975
Federal funds purchased and securities sold
under agreements to repurchase	26,380		16,167		32,637		24,229		45,358
FHLB short-term borrowings	925,144		944,320		892,786		586,846		257,800
Other	139,195		184,439		131,237		109,353		33,297
Total short-term borrowings	1,090,719		1,144,926		1,056,660		720,428		336,455
Long-term debt	343,619		344,162		350,058		359,168		385,240
Total borrowed funds	1,434,338		1,489,088		1,406,718		1,079,596		721,695
Accrued interest and other liabilities	614,310		636,640		519,069		468,994		453,754
Total Liabilities	14,860,789		14,758,034		14,296,810		14,086,308		13,959,424
SHAREHOLDERS' EQUITY
Common stock	1,633,396		1,632,941		1,631,078		1,635,990		1,638,321
Retained earnings	989,777		941,987		899,524		866,910		841,652
Accumulated other comprehensive loss	(339,450)		(361,284)		(236,566)		(190,949)		(38,448)
Treasury stock, at cost	(201,513)		(204,080)		(204,857)		(212,281)		(216,030)
Total Shareholders' Equity	2,082,210		2,009,564		2,089,179		2,099,670		2,225,495
Total Liabilities and Shareholders' Equity	$ 16,942,999		$ 16,767,598		$ 16,385,989		$ 16,185,978		$ 16,184,919

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)
		Quarterly Averages
		March 31, 2023						December 31, 2022						March 31, 2022
		Balance		Interest		Yield		Balance		Interest		Yield		Balance		Interest		Yield
Earning assets
Investments:
Investment securities		$ 3,635,317		$ 35,331		3.94 %		$ 3,705,304		$ 34,353		3.68 %		$ 4,308,059		$ 26,527		2.50 %
Interest-bearing deposits with other banks		318,026		3,544		4.52 %		372,054		3,262		3.48 %		273,763		120		0.18 %
Gross loans (1)		10,373,302		169,706		6.63 %		10,059,119		152,299		6.01 %		9,266,774		87,182		3.82 %
Total earning assets		14,326,645		208,581		5.90 %		14,136,477		189,914		5.33 %		13,848,596		113,829		3.33 %
Nonearning assets
Allowance for credit losses		(136,419)						(127,541)						(129,601)
Cash and due from banks		218,724						218,216						241,271
Accrued interest and other assets		2,534,049						2,540,446						2,224,653
Total assets		$ 16,942,999						$ 16,767,598						$ 16,184,919
Interest-bearing liabilities
Deposits:
Interest-bearing demand		$ 2,906,712		$ 6,604		0.92 %		$ 3,103,091		$ 5,195		0.66 %		$ 3,246,919		$ 492		0.06 %
Savings		3,818,807		7,628		0.81 %		3,943,342		4,819		0.48 %		4,145,615		850		0.08 %
Time		2,131,707		17,224		3.28 %		1,360,681		6,154		1.79 %		1,231,266		1,281		0.42 %
Total interest-bearing deposits		8,857,226		31,456		1.44 %		8,407,114		16,168		0.76 %		8,623,800		2,623		0.12 %
Borrowed funds
Short-term borrowings		1,090,719		12,950		4.82 %		1,144,926		11,091		3.84 %		336,455		317		0.38 %
Long-term debt		343,619		4,857		5.73 %		344,162		4,759		5.49 %		385,240		4,544		4.78 %
Total borrowed funds		1,434,338		17,807		5.03 %		1,489,088		15,850		4.22 %		721,695		4,861		2.73 %
Total interest-bearing liabilities		10,291,564		49,263		1.94 %		9,896,202		32,018		1.28 %		9,345,495		7,484		0.32 %
Noninterest-bearing liabilities
Noninterest-bearing demand deposits		3,954,915						4,225,192						4,160,175
Other liabilities		614,310						636,640						453,754
Shareholders' equity		2,082,210						2,009,564						2,225,495
Total liabilities & shareholders' equity		$ 16,942,999						$ 16,767,598						$ 16,184,919
Net interest income		$ 159,318						$ 157,896						$ 106,345
Net interest spread						3.96 %						4.05 %						3.01 %
Net interest margin						4.51 %						4.43 %						3.11 %
Tax equivalent adjustment						0.04 %						0.04 %						0.05 %
Net interest margin (fully tax equivalent)						4.55 %						4.47 %						3.16 %

⁽¹⁾ Loans held for sale and nonaccrual loans 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
		Rate		Volume		Total		Rate		Volume		Total
Earning assets
Investment securities		$ 2,458		$ (1,480)		$ 978		$ 15,342		$ (6,538)		$ 8,804
Interest-bearing deposits with other banks		976		(694)		282		2,931		493		3,424
Gross loans (2)		15,924		1,483		17,407		64,421		18,103		82,524
Total earning assets		19,358		(691)		18,667		82,694		12,058		94,752
Interest-bearing liabilities
Total interest-bearing deposits		$ 14,353		$ 935		$ 15,288		$ 28,004		$ 829		$ 28,833
Borrowed funds
Short-term borrowings		2,805		(946)		1,859		3,678		8,955		12,633
Long-term debt		214		(116)		98		901		(588)		313
Total borrowed funds		3,019		(1,062)		1,957		4,579		8,367		12,946
Total interest-bearing liabilities		17,372		(127)		17,245		32,583		9,196		41,779
Net interest income (1)		$ 1,986		$ (564)		$ 1,422		$ 50,111		$ 2,862		$ 52,973

⁽¹⁾ Not tax equivalent.

⁽²⁾ Loans held for sale and nonaccrual loans are included in gross loans.

FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)
	Mar. 31,		Dec. 31,		Sep. 30,		June 30,		Mar. 31,
	2023		2022		2022		2022		2022
ALLOWANCE FOR CREDIT LOSS ACTIVITY
Balance at beginning of period	$ 132,977		$ 124,096		$ 117,885		$ 124,130		$ 131,992
Provision for credit losses	8,644		8,689		7,898		(4,267)		(5,589)
Gross charge-offs
Commercial and industrial	730		334		1,947		773		2,845
Lease financing	13		0		13		8		131
Construction real estate	0		0		0		0		0
Commercial real estate	66		245		3		3,419		0
Residential real estate	0		79		119		4		22
Home equity	91		72		45		22		21
Installment	1,524		717		294		361		177
Credit card	217		212		237		212		246
Total gross charge-offs	2,641		1,659		2,658		4,799		3,442
Recoveries
Commercial and industrial	109		293		90		177		379
Lease financing	1		0		13		3		33
Construction real estate	0		0		0		0		0
Commercial real estate	2,238		1,327		561		2,194		222
Residential real estate	66		15		35		34		90
Home equity	80		88		185		360		265
Installment	54		68		29		47		21
Credit card	63		60		58		6		159
Total recoveries	2,611		1,851		971		2,821		1,169
Total net charge-offs	30		(192)		1,687		1,978		2,273
Ending allowance for credit losses	$ 141,591		$ 132,977		$ 124,096		$ 117,885		$ 124,130
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial and industrial	0.07 %		0.01 %		0.24 %		0.08 %		0.37 %
Lease financing	0.02 %		0.00 %		0.00 %		0.01 %		0.34 %
Construction real estate	0.00 %		0.00 %		0.00 %		0.00 %		0.00 %
Commercial real estate	(0.22) %		(0.11) %		(0.06) %		0.12 %		(0.02) %
Residential real estate	(0.02) %		0.02 %		0.03 %		(0.01) %		(0.03) %
Home equity	0.01 %		(0.01) %		(0.08) %		(0.19) %		(0.14) %
Installment	2.89 %		1.24 %		0.64 %		0.90 %		0.50 %
Credit card	1.12 %		1.07 %		1.29 %		1.50 %		0.67 %
Total net charge-offs	0.00 %		(0.01) %		0.07 %		0.08 %		0.10 %
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans (1)
Commercial and industrial	$ 13,971		$ 8,242		$ 8,719		$ 11,675		$ 14,390
Lease financing	175		178		199		217		249
Construction real estate	0		0		0		0		0
Commercial real estate	5,362		5,786		13,435		14,650		19,843
Residential real estate	11,129		10,691		10,250		8,879		7,432
Home equity	3,399		3,123		3,445		3,331		3,377
Installment	544		603		279		170		163
Nonaccrual loans	34,580		28,623		36,327		38,922		45,454
Accruing troubled debt restructurings (TDRs) (2)	N/A		10,960		11,022		11,225		8,055
Total nonperforming loans (2)	34,580		39,583		47,349		50,147		53,509
Other real estate owned (OREO)	191		191		22		22		72
Total nonperforming assets (2)	34,771		39,774		47,371		50,169		53,581
Accruing loans past due 90 days or more	159		857		139		142		180
Total underperforming assets (2)	$ 34,930		$ 40,631		$ 47,510		$ 50,311		$ 53,761
Total classified assets (2)	$ 158,984		$ 128,137		$ 114,956		$ 119,769		$ 106,839
CREDIT QUALITY RATIOS
Allowance for credit losses to
Nonaccrual loans	409.46 %		464.58 %		341.61 %		302.87 %		273.09 %
Nonperforming loans	409.46 %		335.94 %		262.09 %		235.08 %		231.98 %
Total ending loans	1.36 %		1.29 %		1.27 %		1.25 %		1.34 %
Nonperforming loans to total loans	0.33 %		0.38 %		0.48 %		0.53 %		0.58 %
Nonaccrual loans to total loans	0.33 %		0.28 %		0.37 %		0.41 %		0.49 %
Nonperforming assets to
Ending loans, plus OREO	0.33 %		0.39 %		0.48 %		0.53 %		0.58 %
Total assets	0.21 %		0.23 %		0.28 %		0.31 %		0.33 %
Nonperforming assets, excluding accruing TDRs to
Ending loans, plus OREO	0.33 %		0.28 %		0.37 %		0.41 %		0.49 %
Total assets	0.21 %		0.17 %		0.22 %		0.24 %		0.28 %
Classified assets to total assets	0.94 %		0.75 %		0.69 %		0.74 %		0.67 %

(1) Nonaccrual loans include nonaccrual TDRs of $10.0 million, $12.8 million, $9.5 million, and $16.2 million, as of December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.
(2) Upon adoption of ASU 2022-02 as of January 1, 2023, the TDR model was eliminated. Prospectively, disclosures will include modifcations of loans to borrowers experiencing financial difficulty (FDM). FDMs are excluded from nonperforming, underperforming and classified assets.

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)
	Mar. 31,		Dec. 31,		Sep. 30,		June 30,		Mar. 31,
	2023		2022		2022		2022		2022
PER COMMON SHARE
Market Price
High	$ 26.24		$ 26.68		$ 23.75		$ 23.03		$ 26.73
Low	$ 21.30		$ 21.56		$ 19.02		$ 19.09		$ 22.92
Close	$ 21.77		$ 24.23		$ 21.08		$ 19.40		$ 23.05
Average shares outstanding - basic	93,732,532		93,590,674		93,582,250		93,555,131		93,383,932
Average shares outstanding - diluted	94,960,158		94,831,788		94,793,766		94,449,817		94,263,925
Ending shares outstanding	95,190,406		94,891,099		94,833,964		94,448,792		94,451,496
Total shareholders' equity	$ 2,121,496		$ 2,041,373		$ 1,994,132		$ 2,068,670		$ 2,137,445
REGULATORY CAPITAL	Preliminary
Common equity tier 1 capital	$ 1,432,332		$ 1,399,420		$ 1,348,413		$ 1,307,259		$ 1,272,115
Common equity tier 1 capital ratio	11.00 %		10.83 %		10.82 %		10.91 %		10.87 %
Tier 1 capital	$ 1,476,734		$ 1,443,698		$ 1,392,565		$ 1,351,287		$ 1,316,020
Tier 1 ratio	11.34 %		11.17 %		11.17 %		11.28 %		11.24 %
Total capital	$ 1,778,917		$ 1,762,971		$ 1,711,741		$ 1,670,367		$ 1,635,003
Total capital ratio	13.66 %		13.64 %		13.73 %		13.94 %		13.97 %
Total capital in excess of minimum requirement	$ 411,234		$ 406,032		$ 402,662		$ 412,167		$ 405,931
Total risk-weighted assets	$ 13,025,552		$ 12,923,233		$ 12,467,422		$ 11,982,860		$ 11,705,447
Leverage ratio	9.03 %		8.89 %		8.88 %		8.76 %		8.64 %
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets	12.53 %		12.01 %		12.00 %		12.74 %		13.35 %
Ending tangible shareholders' equity to ending tangible assets (1)	6.47 %		5.95 %		5.79 %		6.40 %		6.95 %
Average shareholders' equity to average assets	12.29 %		11.98 %		12.75 %		12.97 %		13.75 %
Average tangible shareholders' equity to average tangible assets (1)	6.21 %		5.84 %		6.49 %		6.62 %		7.44 %
REPURCHASE PROGRAM (2)
Shares repurchased	0		0		0		0		0
Average share repurchase price	N/A		N/A		N/A		N/A		N/A
Total cost of shares repurchased	N/A		N/A		N/A		N/A		N/A

(1) Non-GAAP measure. For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.
(2) Represents share repurchases as part of publicly announced plans.
N/A = Not applicable

SOURCE First Financial Bancorp.