First Financial Bancorp (FFBC) Misses Q1 EPS by 8c

First Financial Bancorp (NASDAQ: FFBC) reported Q1 EPS of $0.31, $0.08 worse than the analyst estimate of $0.39.

• After adjustments(1) for merger-related, nonrecurring and certain COVID-19 related items:
  • Net income of $0.31 per diluted common share
  • 0.85% return on average assets; 10.41% return on average tangible common equity

Archie Brown, President and Chief Executive Officer, commented, "The first quarter of 2020 proved to be one of the most unique and challenging quarters in our industry's history. While the first half of the quarter was marked by strong financial performance, March was characterized by economic, logistical and social upheaval. In a rapidly changing operational and economic landscape, we successfully implemented a comprehensive business continuity plan without sacrificing the performance and service our borrowers and shareholders have come to expect and were pleased that pre-provision financial results exceeded our expectations, despite a 150 basis point drop in interest rates."

Mr. Brown continued, "First quarter earnings were solid, although they were obviously negatively impacted by COVID's influence on our CECL model. To date, credit stress on the loan portfolio has been limited, evidenced by net recoveries during the period, however the quarterly provision expense reflects our expectation for that to change during the remainder of the year. We were pleased with our ability to manage the margin despite strong interest rate headwinds, as we successfully lowered deposit costs to help alleviate the pressure from declining asset yields, fewer loan fees and lower purchase accounting accretion. In addition, a record quarter from Bannockburn combined with a relatively flat expense base to offset expected seasonal declines in noninterest income to result in a sub-60% adjusted efficiency ratio."

Mr. Brown further remarked, "We began monitoring the pandemic early and preparing in the event it affected our markets. As a result, in response to the pandemic, our executive committee was able to immediately shift to crisis management, working to develop plans and products to assist our clients and communities in a meaningful way. This included the development of our Hardship Relief program, which includes various payment deferral options for borrowers, as well as making a $1.0 million contribution to help fund COVID-19 relief efforts in communities throughout our footprint. We are also actively engaged in extending loans under the U.S. Government's Paycheck Protection Program to our loan and deposit customers. We continue to actively monitor the actions of the federal and state governments, and are proactively assisting our clients to ensure they are aware of every program and level of financial assistance available to them."

Mr. Brown concluded, "The end of the first quarter was certainly unprecedented, and one we will never forget. Our agile response to these trying circumstances has truly highlighted our strength as a Company. In the face of a pandemic, we were able to deliver solid financial performance while maintaining focus on our customers and communities. Although certain performance metrics are difficult to forecast for the remainder of the year, we pledge to remain diligent and manage the Company in a way that continues to deliver maximum shareholder value while prioritizing the physical and financial well-being of our clients and associates."

For earnings history and earnings-related data on First Financial Bancorp (FFBC) click here.

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