First Financial Bancorp (FFBC) Tops Q3 EPS by 7c

First Financial Bancorp (NASDAQ: FFBC) reported Q3 EPS of $0.44, $0.07 better than the analyst estimate of $0.37.

• Earnings per diluted share of $0.42; $0.44 on an adjusted(1) basis
• Return on average assets of 1.04%; 1.09% as adjusted(1)
• Record core fee income driven by $18.6 million of mortgage banking and $10.5 million of foreign exchange income
• Provision for credit losses of $13.4 million; 34% reduction from second quarter

Archie Brown, President and Chief Executive Officer, remarked, "We are pleased with our strong third quarter operating results while maintaining focus on three important pandemic related priorities: maintaining the health and safety of our associates, assisting our clients and communities and strengthening our Company."

Mr. Brown continued, "Despite continued interest rate headwinds and difficult business conditions, we posted strong earnings as reflected in our adjusted earnings per share of $0.44, adjusted return on assets of 1.09%, and an adjusted efficiency ratio of 58.9%. Additionally, we were encouraged that credit trends remained relatively stable for the quarter. Given the backdrop of increasing Covid-19 cases in the Midwest and uncertainty about the timing of vaccines to bring the pandemic under control, we recorded $13.4 million of provision expense in anticipation of credit deterioration in future quarters, leading to an increase in our allowance for credit losses to 1.81% of total loans, excluding PPP."

Mr. Brown further commented, "Third quarter results were primarily driven by exceptional fee income, well exceeding second quarter results, which at the time was our highest core fee income on record. The steadfast diligence of our mortgage team capitalized on the continued historic low interest rate environment to drive another sensational quarter in mortgage banking revenue, and Bannockburn recorded its highest income quarter ever. We were also pleased to see service charges improve as local economies continued to gradually reopen and consumer spending increased. Total expenses increased during the quarter as a direct result of our strong operating performance and fee income generation leading to higher incentive and commission expense."

Mr. Brown concluded, "We are encouraged by our improved operating performance and by the resiliency of our associates. Six months into a global pandemic, we now have 98% of our banking centers fully open to service the needs of our clients, and associates in our corporate offices and operations centers have begun gradually returning, albeit at significantly reduced capacity levels. We continue to provide a bridge for our clients to navigate the environment with approximately $630 million, or 6.2% of total loans, receiving a round two deferral and all capital ratios have improved to equal or surpass pre-pandemic levels. Additionally, this year we have added $125 million to our Allowance for Credit Losses, which brings our total ACL to greater than three times the balance at December 31, 2019. We remain committed to managing pandemic priorities and positioning the Company for even stronger performance when the health crisis subsides."

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

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