First Financial Bancorp (FFBC) Q2 2024 earnings summary

Executive summary

• Adjusted net income for Q2 2024 was $61.7 million ($0.65 per share), with net income of $60.8 million ($0.64 per share), and return on average assets of 1.4% and return on average tangible common equity of 20.9%.

• Achieved 135th consecutive quarter of profitability, with record adjusted noninterest income of $61.6 million, driven by strong growth in foreign exchange, leasing, mortgage banking, and wealth management.

• Loans and deposits both grew by over 11% annualized, led by commercial banking, Agile, and Summit segments.

• Net interest margin held steady at 4.10%, remaining among the highest in the peer group.

• Quarterly dividend increased to $0.24 per share, a 4.3% rise, with 90 full-time positions eliminated as part of efficiency initiatives.

Financial highlights

• Net interest income was $153.3 million for Q2 2024, with net interest margin (FTE) at 4.10% and efficiency ratio at 57.5% (57.0% adjusted).

• Adjusted net income was $61.7 million ($0.65 per share); tangible book value per share increased 3.5% to $12.94.

• Loan balances grew $316.1 million (11.3% annualized), with average deposit balances up $351.1 million (10.6% annualized).

• Net charge-offs were 0.15% of loans, down 23 basis points sequentially; provision expense totaled $16.4 million.

• Allowance for credit losses was 1.36% of total loans; nonperforming assets to total assets was 0.35%.

Outlook and guidance

• Loan growth expected to moderate to low single digits annualized, with net interest margin projected at 4.00%-4.05% for Q3, assuming a 25bp Fed rate cut.

• Credit costs anticipated to decline slightly in the second half; full-year net charge-offs expected at 25-30 basis points.

• Fee income forecasted at $58–$60 million per quarter, with $13–$15 million from FX and $16–$18 million from leasing.

• Noninterest expense expected to remain stable at $122–$124 million, excluding leasing.

• Dividend to be maintained at $0.24 per share, with payout ratio within the 35–40% target range.