On July 25, 2024, First Financial Bancorp (FFBC, Financial) released its 8-K filing announcing financial results for the second quarter of 2024. The company reported earnings per diluted share of $0.64, surpassing analyst estimates. This performance was driven by robust loan and deposit growth, as well as record fee income.
Company Overview
First Financial Bancorp is a mid-sized, regional bank holding company operating through its wholly-owned subsidiary, First Financial Bank. The company provides a range of banking and financial services through its six lines of business: Commercial, Retail Banking, Mortgage Banking, Wealth Management, Investment Commercial Real Estate, and Commercial Finance. First Financial serves both metropolitan and non-metropolitan markets in Indiana, Ohio, and Kentucky, with a primary focus on commercial real estate loans and commercial and industrial loans. The majority of its net revenue is derived from net interest income.
Performance Highlights
For the three months ended June 30, 2024, First Financial Bancorp reported net income of $60.8 million, or $0.64 per diluted common share, compared to $50.7 million, or $0.53 per diluted common share, in the first quarter of 2024. The company's return on average assets was 1.38%, while the return on average tangible common equity was 20.57%.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Income ($ millions) | 60.8 | 50.7 | 65.7 |
| Earnings per Share (diluted) | 0.64 | 0.53 | 0.69 |
| Return on Average Assets (%) | 1.38 | 1.18 | 1.55 |
| Net Interest Margin (%) | 4.06 | 4.05 | 4.43 |
Financial Achievements
First Financial Bancorp achieved record fee income of $61.5 million in Q2 2024. The company also reported significant loan growth of $316.1 million, representing an 11.3% annualized increase. Average deposits grew by $351.1 million, or 10.6% on an annualized basis. The net interest margin on a fully tax-equivalent basis was 4.10%, unchanged from the first quarter and meeting expectations.
Challenges and Outlook
Despite the strong performance, First Financial Bancorp faced challenges such as an increase in the cost of deposits by 14 basis points during the second quarter. However, the pace of this increase moderated compared to the first quarter. The company also experienced some downward credit migration, although this was not concentrated in any particular loan type.
"We had an outstanding quarter. Adjusted earnings per share were $0.65 per share, which resulted in an adjusted return on assets of 1.40% and an adjusted return on tangible common equity of 20.88%," commented Archie Brown, President and CEO.
Income Statement and Balance Sheet Highlights
For the second quarter of 2024, First Financial Bancorp reported total interest income of $252.7 million, a 12.9% increase from the same period in 2023. Total interest expense rose by 53.7% to $99.4 million, resulting in net interest income of $153.3 million, a 3.7% decrease from Q2 2023. Noninterest income increased by 15.5% to $61.5 million, while noninterest expenses grew by 2.5% to $123.6 million.
On the balance sheet, total assets increased by 3.2% to $18.2 billion compared to the previous quarter. Total loans and leases grew by 2.8% to $11.5 billion, while total deposits rose by 1.5% to $13.7 billion.
Dividend Increase
The Board of Directors approved a quarterly dividend increase to $0.24 per common share, payable on September 16, 2024, to shareholders of record as of September 2, 2024.
"We are pleased to announce that our Board of Directors approved a $0.01 increase in the common dividend to $0.24. The 4.3% dividend increase results in a dividend payout ratio within our target range of 35% - 40% of net income and increases our already attractive yield," added Mr. Brown.
For more detailed information on First Financial Bancorp's Q2 2024 performance, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from First Financial Bancorp for further details.
