Adjusted earnings per share: $0.67
Return on total assets: 1.42%
Return on tangible common stock: 19.77%
Net interest margin: 4.08%
Average deposit balance growth rate: 4.9% per year
Non-interest income: $45.7 million, adjusted $58.8 million
Non-interest expenses: Relatively flat compared to last quarter
Allowance for credit losses (ACL): 1.37% of total loan amount
Net amortization: 25 basis points per annum
Non-performing assets: 36 basis points of total assets
Specific book value per share: $14.26, up 10% from linked quarter
Tangible common stock ratio: 7.98%, up 75 basis points from June 30th
Adjusted net income: $63.6 million
Preparation cost: $10.6 million
Total fee income: $46 million, adjusted $59 million
Release date: October 25, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
First Financial Bancorp (NASDAQ:FFBC) reported strong operating results with adjusted earnings per share of $0.67, return on assets of 1.42%, and return on tangible common equity of 19.77%.
Net interest margin remained strong at 4.08%, down only 2 basis points from the prior quarter.
Average deposit balances increased by 4.9% on an annualized basis, indicating strong deposit growth.
Asset quality remained stable, with net charge-offs of 25 basis points on an annualized basis, consistent with expectations.
Specific book value per share increased 10% from the previous quarter and more than 30% from the year-ago period to $14.26.
Loan growth slowed in the third quarter due to softer pipelines and higher payoffs in commercial banking and commercial real estate portfolios.
Non-interest income was impacted by several significant non-recurring items, including securities losses of $17.5 million.
Deposit costs increased by 5 basis points compared to the previous quarter, but the pace of growth slowed.
Non-interest expenses increased slightly due to higher lease costs and additional foundation contributions.
Allowance for credit losses (ACL) coverage has increased slightly, indicating a prudent approach to potential credit risks.
Q: Can you provide some insight into expected loan growth beyond the fourth quarter given recent business additions? A: Archie Brown, President and CEO. , said it expects annual loan volumes to be in the mid-to-high single digits in 2025 due to a balanced approach across its portfolio. They are streamlining low-yielding relationships, which could constrain growth, but they are still expected to grow in the mid-to-high single digits.
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Q: What are the current loan yields? And what are your outlook for the fourth quarter and next year? A: Archie Brown says origination yields are in the high 7% range, and are expected to decline slightly due to interest rate cuts. I pointed out that it would be done. Chief Financial Officer James M. Anderson added that yields on loans originated in the third quarter ranged from 7.5% to 7.8%, with slightly lower payoff yields.
Q: Can you talk about the $8 million loss on securities restructuring and its impact on future margins? A: James M. He explained that he gained an additional 330 basis points. The restructuring is expected to contribute approximately $4.5 million to annual revenue, with the full benefit expected to be realized in the fourth quarter.
Q: What is the credit trend for the Summit platform amidst stress in the industry? A: Archie Brown said that while Summit’s portfolio is performing well, he expects some stress in transportation. James M. Anderson added that Summit’s exposure to small-value products is limited, with total exposure of less than $100 million.
Q: What are your capital deployment priorities and are there M&A considerations? A: Archie Brown has emphasized a focus on organic growth, but M&A that aligns with shareholder interests I’m open to the opportunity. James M. Anderson said the company is in recapitalization mode and has no immediate plans for share buybacks, instead focusing on tangible book value growth.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
