First Financial Bancorp Reports Strong Q2 Results and Robust Loan Growth

First Financial Bancorp Delivers Strong Q2 Results for 2024

First Financial Bancorp has reported a strong performance for the second quarter of 2024, characterized by impressive loan growth and a notable rise in non-interest income. Adjusted earnings per share were recorded at $0.65, accompanied by a return on assets of 1.4% and a return on tangible common equity of 20.9%. In recognition of its financial stability, the board of directors approved a modest increase in the common dividend.

Key Highlights:

• Adjusted earnings per share were $0.65.
• Loan balances demonstrated an annual growth of 11%, primarily driven by commercial banking.
• Average deposits rose by 11%, supported by an increase in interest-bearing deposits.
• The net interest margin remained strong at 4.1%.
• Total adjusted revenue increased by 7%, with non-interest income reaching a record $61.6 million.
• Efficiency initiatives led to the reduction of 90 full-time positions.
• Net charge-offs decreased, while the allowance for credit losses elevated to 1.36% of total loans.
• The board approved a $0.01 increase in the common dividend to a total of $0.24.

Outlook for the Company:

• Expected loan growth is projected to remain in the low single digits in the near term.
• A modest decline in credit costs is anticipated in the latter half of the year.
• The allowance for credit losses is expected to remain stable or slightly increase in future.
• Regulatory capital ratios continue to exceed minimum requirements.
• Projected net interest margin is between 4% and 4.05% assuming a 25 basis point rate cut.
• Fee income is expected to range between $58 million and $60 million.
• Noninterest expense is projected to be between $122 million and $124 million.

Bearish Outlook:

• Classified asset balances increased following the downgrade of four relationships.
• Loan growth is forecasted to decelerate as payoffs increase and production in certain business units is seasonally low.
• The transportation sector is under close scrutiny for potential stress factors.

Bullish Outlook:

• Strong loan growth in previous quarters with lower-than-average payoff activity in the commercial real estate sector.
• The company has effectively absorbed expenses from a recent acquisition while continuing to invest in growth areas.
• Leasing volumes remain robust with anticipated growth, especially in the fourth quarter.

Challenges Observed:

• Pipeline activity softened mid-second quarter.
• Expected decrease in production due to prevailing market conditions.

Management Insights:

• The company has completed a significant portion of its review for potential cost savings.
• Positive growth is anticipated in leasing and wealth management segments.
• Some downward credit migration was noted in multifamily and commercial & industrial credits, though stability in classified credits is expected.

In summary, First Financial Bancorp has demonstrated resilient financial performance through strong loan growth, increased non-interest income, and a commitment to shareholder value through dividend increases. Moving forward, the organization remains optimistic about its operational performance while keeping a watchful eye on various external factors that may impact growth.