First Financial Bancorp Reports Third Quarter 2010 Financial Results / 80th Consecutive Quarter of Profitability

CINCINNATI, Nov. 2, 2010 /PRNewswire-FirstCall/ -- First Financial Bancorp ("First Financial" or the "Company") announced today financial and operational results for the third quarter 2010 and for the nine month period ended September 30, 2010.

Third quarter 2010 net income and net income available to common shareholders were $15.6 million and earnings per diluted common share were $0.27. This compares with second quarter 2010 net income and net income available to common shareholders of $17.8 million and earnings per diluted common share of $0.30 and third quarter 2009 net income of $200.4 million, net income available to common shareholders of $199.4 million and earnings per diluted common share of $3.87.

Among other items impacting net income during the third quarter 2010 were prepayment penalties totaling $8.0 million on a pre-tax basis, or $0.09 per fully diluted share after taxes, related to the early redemption of $232 million of Federal Home Loan Bank ("FHLB") advances. Included in the third quarter 2009 amounts was a pre-tax bargain purchase gain of $342.5 million recognized in connection with the Company's FDIC-assisted transactions (see further discussion below).

For the nine month period ended September 30, 2010, net income was $45.0 million, net income available to common shareholders was $43.1 million and earnings per diluted common share were $0.75 as compared to net income of $207.5 million, net income available to common shareholders of $205.0 million and earnings per diluted common share of $4.71 for the nine month period ended September 30, 2009.

-- Continued strong quarterly performance -- Return on average assets of 0.96% -- Return on average shareholders' equity of 9.03% -- Return on risk-weighted assets of 1.72% -- Earnings continue to add to already robust capital ratios -- Tangible common equity to tangible assets of 10.38% -- Annualized quarterly tangible common equity growth of 6.3% -- Tier 1 capital ratio of 18.64% -- Total risk-based capital of 19.91% -- Net interest margin remains strong at 4.59% -- Improved cash flow expectations on acquired loans increased yield on portfolio -- Enhanced by continued runoff of retail and brokered certificates of deposit and prepayment of FHLB advances -- Continued stable credit performance -- Total nonperforming assets of $97.8 million compared to $96.2 million for the linked quarter -- Net loan charge-offs related to uncovered loans increased to $6.8 million from $5.0 million for the linked quarter, but down 28% compared to September 30, 2009 -- Provision for uncovered loan losses of $6.3 million, representing a year-over-year decline of 76% -- Balance sheet risk remains low -- FDIC loss share coverage on 37% of loan portfolio -- 100% risk-weighted assets represent only 46% of balance sheet -- Prepayment of FHLB advances results in an even greater core-funded balance sheet; 93% of balance sheet is supported by deposits and common shareholders' equity

Claude Davis, President and Chief Executive Officer, commented, "We experienced another solid quarter, focusing on the execution of our client-focused, community bank business model. As in prior quarters, loan demand remains slow and paydowns continue to outpace new originations. We did, however, put some of our liquidity to use through the repayment of over $230 million of Federal Home Loan Bank advances assumed as part of our acquisitions and continued to experience the planned runoff of time and brokered deposit balances, both of which positively impacted our net interest margin. Additionally, we experienced an improvement in the performance of certain pools of acquired loans which should further enhance our net interest margin in future periods.

"As part of our strategic plan, we remained focused on expense control in order to ultimately achieve our target efficiency ratio. While we are always evaluating opportunities to grow our business, we also continue to examine our level of resources to ensure that they are aligned with both current and prospective business needs.

"Our capital position, which consists primarily of common equity and is among the leaders in our industry, remains strong and continues to grow as a result of our earnings power. This strong capital level provides the opportunity to take advantage of strategic opportunities that meet our internal risk and performance criteria when they arise. While we are committed to redeploying our capital in a manner that enhances long term shareholder value, we expect our capital ratios to remain well in excess of 'well-capitalized' minimum requirements due to uncertainty regarding potential changes to regulatory capital guidelines.

"In addition to our focus on our traditional commercial and retail businesses, we also continued to build our residential mortgage and franchise lending business units. While we prudently scaled back our efforts in the mortgage sector as part of our strategic reorganization plan beginning in 2005, fundamentals have improved and we have been selectively hiring seasoned originators that are beginning to build a solid pipeline. Our franchise finance unit, which we acquired as part of the Irwin transaction, remains a profitable, niche business for us and our experienced team continues to leverage its expertise in this area by originating risk appropriate credits, helping to diversify our overall loan portfolio.

"Another strategic initiative we have under way is expansion in our small business banking unit. We have selected 45 of our banking centers to additionally serve as small business centers where a combination of seasoned business bankers and newly trained associates will launch a major sales effort during the fourth quarter to build out this line of business. We have already experienced an increase in our SBA lending pipeline and expect this initiative to provide additional growth related to our commitment to small business."

DETAILS OF RESULTS

When compared to the third quarter 2009 and the nine month period ended September 30, 2009, the results of the comparable periods in 2010 were impacted by a number of acquisition-related items. During the third quarter 2009, through FDIC-assisted transactions, First Financial assumed the banking operations of Peoples Community Bank ("Peoples"), Irwin Union Bank and Trust Company and Irwin Union Bank, F.S.B. (collectively, "Irwin").

In connection with the FDIC-assisted transactions, the Company has loss sharing arrangements with the FDIC. Under the terms of these agreements, the FDIC will reimburse the Company for losses with respect to certain loans ("covered loans") and other real estate owned ("OREO") (collectively, "covered assets").

As a result of the acquisitions, the Company's business and operating markets expanded significantly. To assist readers in understanding the financial and strategic impact of the acquisitions, the combined operations of First Financial's legacy and acquired businesses will be discussed in three categories: "Legacy-Strategic", "Acquired-Strategic" and "Acquired-Non-Strategic". Additional disclosures have been added in a separate section of the earnings release that segregate the effect acquisition-related items have on certain reported income statement and balance sheet amounts, "Section II - Supplemental Information on Covered Assets and Acquisition-Related Items". Definitions of the business categories and other financial items related to the acquisitions can be found below in "Glossary of Terms".

In an effort to simplify and clarify the financial performance of First Financial, a number of significant items are noted separately throughout this release and will address the nature, timing and expected recurrence of each item. Available on the Company's website at http://www.bankatfirst.com/ is a presentation providing supplemental information regarding its quarterly results.

Glossary of Terms

To assist readers in understanding the Company's financial results and the effect of the acquisitions on reported amounts, the following terms are used throughout this release to refer to specific acquisition-related items. The first three define the business components referred to above and the remaining items define specific covered loan terminology.

Legacy-strategic - Elements of the business that existed prior to the acquisitions and will continue to be supported.

Acquired-strategic - Elements of the business that the Company intends to retain and will continue to support and build. Legacy-strategic and acquired-strategic are collectively referred to as "strategic."

Acquired-non-strategic - Elements of the business that the Company intends to exit but will continue to support to obtain maximum economic value. No growth or replacement is expected.

Accelerated discount on loan prepayments and dispositions - The acceleration of the unrealized valuation discount. This item will be ongoing but diminishing as covered loan balances decline over time.

UPB - Unpaid principal balance

Carrying value - The unpaid principal balance of a covered loan less any valuation discount.

Unless otherwise noted, all amounts discussed in this earnings release are pre-tax except net income and per-share data which are presented after-tax. Percentage changes are not annualized unless specifically noted. In some instances, financial data may not add up due to rounding.

ACQUISITIONS Subsequent Events

The Irwin and Peoples acquisitions were considered business combinations and accounted for under FASB Codification Topic 805: Business Combinations, FASB Codification Topic 820: Fair Value Measurements, FASB Codification Topic 310-30: Loans and Debt Securities Acquired with Deteriorated Credit Quality and FASB Codification Topic 310-20: Receivables - Nonrefundable Fees and Costs. All acquired assets and liabilities, including identifiable intangible assets, were recorded at their estimated fair values as of the date of acquisition.

Certain reclassifications of prior periods' amounts may also be made to conform to the current period's presentation and would have no effect on previously reported net income amounts.

Purchase Accounting Adjustments

As a result of additional information arising subsequent to the acquisition dates, during the third quarter 2010 the Company recorded adjustments to the initial purchase entries during the third quarter 2010. These items represent the final valuation adjustments allowable under the applicable accounting guidance.

The following table highlights adjustments that impacted the originally reported gain on acquisitions and provides a reconciliation of net income available to common shareholders and diluted earnings per common share as originally reported for the three months ended September 30, 2009 to an "as adjusted" basis reflecting certain adjustments recorded in connection with the gain on acquisitions and other items.

For the Three Months Ended September 30, Table I 2009 ----------------------------------------- Pre-Tax Income (Dollars in thousands, except per share amounts) Impact Taxes ------------------- ------ ----- Net income, as originally reported $- $- Gain on acquisitions, as originally reported 383,330 Adjustments: Valuation - indemnification asset related to Irwin (23,784) 8,981 Valuation -loans acquired from Irwin (1,496) 565 Other asset valuations (15,556) 5,874 Tax rate adjustment (2,436) Total adjustments to gain on acquisitions (40,836) 12,985 ------- ------ Gain on acquisitions, as adjusted $342,494 ======== Other adjustments: (1) Interest income related to loans 1,898 (664) Interest income related to other earning assets 1,311 (459) Other noninterest income and expense, net (98) 34 Net income, as adjusted For the Three Months Ended September 30, Table I 2009 ----------------------------------------- Net Income Diluted Available to Earnings (Dollars in thousands, except Per per share amounts) Common Share ------------------ ------ ------ Net income, as originally reported $225,187 $4.38 Gain on acquisitions, as originally reported Adjustments: Valuation - indemnification asset related to Irwin (14,803) (0.29) Valuation -loans acquired from Irwin (931) (0.02) Other asset valuations (9,682) (0.19) Tax rate adjustment (2,436) (0.05) Total adjustments to gain on acquisitions (27,852) (0.54) ------- ----- Gain on acquisitions, as adjusted Other adjustments: (1) Interest income related to loans 1,234 0.02 Interest income related to other earning assets 852 0.02 Other noninterest income and expense, net (64) (0.00) Net income, as adjusted $199,357 $3.87 ======== ===== 1 Recorded during fourth quarter 2009

As a result of its valuation assumptions regarding the timing of expected problem asset resolution and FDIC reimbursement for losses related to loans acquired from Irwin, First Financial determined that the FDIC indemnification asset related to these loans required an adjustment decreasing the originally reported balance by $23.8 million. This change in value represents only the timing of expected cash flows, not the amount of expected cash flows. The FDIC indemnification asset represents the expected payments from the FDIC over the course of the loss sharing agreements, on a discounted basis. The FDIC continues to pay claims in a timely fashion.

The fair value of loans acquired from Irwin was adjusted to reflect the impact of reclassifications of the initial loan category assignments.

The fair value adjustment for other assets is primarily related to the establishment of valuation allowances for certain assets of and investments in Irwin subsidiaries as well as for other community reinvestment related assets.

The following table provides a reconciliation of total shareholders' equity, goodwill and tangible book value per share as of September 30, 2009 to "as adjusted" based on prior period adjustments as well as the change in net income resulting from the adjustments to the gain on acquisitions discussed above.

Table II As of September 30, 2009 ------------------------ Impact on Tangible Book Value (Dollars in thousands, except per share Per amounts) Share ---------------------- ------ Shareholders' equity, as originally reported $671,247 Tangible book value per share, as originally reported $10.48 Goodwill, as originally reported $46,931 Adjustments: Branch acquisition 5,540 Valuation - Peoples (651) Total adjustments to goodwill 4,889 (0.10) Goodwill, as adjusted $51,820 ======= Prior period adjustment to other intangible assets 989 (0.02) Change in net income due to adjustments to gain on acquisitions (25,830) (0.50) Shareholders' equity, as adjusted $645,417 ======== Tangible book value per share, as adjusted $9.86 ===== Reclassification / Financial Statement Presentation Changes

As a result of recent SEC comments regarding the financial statement presentation for losses on covered loans and receivables from the FDIC related to loss sharing agreements, the Company reclassified certain items on the income statement during the second and first quarters 2010 to gross up reported activity that was previously presented on a net basis. These adjustments did not impact previously reported net income amounts.

The following table highlights the presentation changes affecting the income statement for the three months ended June 30 and March 31, 2010 to conform to these comments.

Table III For the Three Months Ended -------------------------- (Dollars in thousands) June 30, 2010 ---------------------- ------------- Provision for loan and lease losses - covered, as reported $254 Provision for loan and lease losses - covered, as adjusted 18,962 ------ Increase to reflect gross credit losses related to covered loans 18,708 Total noninterest income -as reported 25,296 Total noninterest income -as adjusted 40,467 ------ Increase to reflect FDIC loss sharing income (1) 15,171 ------ Net effect of gross up of credit losses and FDIC loss sharing income (2) 3,537 Total noninterest expense -as reported 59,356 Total noninterest expense -as adjusted 55,819 ------ Decrease to reclass proportionate share of losses in excess (3,537) of valuation discount (2) ------ Effect on reported net income $- === Table III For the Three Months Ended -------------------------- (Dollars in thousands) March 31, 2010 ---------------------- -------------- Provision for loan and lease losses - covered, as reported $- Provision for loan and lease losses - covered, as adjusted 9,460 ----- Increase to reflect gross credit losses related to covered loans 9,460 Total noninterest income -as reported 19,368 Total noninterest income -as adjusted 26,935 ------ Increase to reflect FDIC loss sharing income (1) 7,567 ----- Net effect of gross up of credit losses and FDIC loss sharing income (2) 1,893 Total noninterest expense -as reported 62,154 Total noninterest expense -as adjusted 60,261 ------ Decrease to reclass proportionate share of losses in excess (1,893) of valuation discount (2) ------ Effect on reported net income $- === (1) Includes immaterial amount reclassified to noninterest income (2) Represents the Company's proportionate share of total recognized, unanticipated losses on covered loans; reported previously as other noninterest expense SECTION I - RESULTS OF OPERATIONS NET INTEREST INCOME

Net interest income on a fully tax-equivalent basis for the third quarter 2010 was $68.1 million as compared to $68.0 million for the second quarter 2010 and $41.0 million as compared to the year-over-year period. Despite a lower level of average interest earning assets relative to the linked quarter, net interest income remained essentially the same due to an increase in interest income related to loans and a decrease in interest expense as a result of lower time and brokered deposit balances and the prepayment of FHLB advances. In addition to higher levels of average interest-earning assets and interest-bearing liabilities resulting from the 2009 acquisitions, the year-over-year increase of $27.1 million was also impacted by the significant increase in the net interest margin (see further discussion below).

For the nine month period ended September 30, 2010, net interest income on a fully tax-equivalent basis was $208.3 million as compared to $103.8 million for the comparable period in 2009. Similar to the quarterly year-over-year items noted above, the increase was driven by the larger balance sheet items as well as a higher net interest margin (see further discussion below).

NET INTEREST MARGIN

Net interest margin was 4.59% for the third quarter 2010 as compared to 4.53% for the second quarter 2010 and 3.90% for the third quarter 2009. The net interest margin continued to be negatively impacted by the combination of normal amortization and paydowns in both the legacy and acquired loan portfolios and reduced loan demand in the Company's strategic markets. However, during the third quarter, First Financial used a portion of its liquidity to purchase $154 million of FNMA / FHMLC mortgage backed securities and prepay $232 million of FHLB advances, which helped to offset the net effect of muted loan activity. Net interest margin was also positively impacted by the expected runoff of retail and brokered certificates of deposit and the lower earning asset base during the quarter.

Net interest margin was also positively impacted by certain activity related to the acquired loan portfolio. The majority of these loans are accounted for under ASC Topic 310-30 and, as such, the Company is required to periodically update its forecast of expected cash flows from these loans. The Company recognized an improvement in the cash flow expectations related to certain loan pools, which is reflected as a yield adjustment on a prospective basis. During the third quarter 2010, this improvement positively impacted net interest margin by 15 basis points.

The following table shows the estimated yield earned by the Company on its legacy and originated loan portfolio, acquired loan portfolio and the FDIC indemnification asset for the three months ended September 30, 2010.

For the Three Table IV Months Ended September 30, 2010 ------------------ Average Balance Yield ------- ----- Legacy and originated loan portfolio (1) $2,947,928 5.33% Acquired loan portfolio accounted for under ASC Topic 310-30 2 1,505,866 9.75% FDIC indemnification asset (2) 238,720 3.91% (1) Includes acquired revolving loans not accounted for under ASC Topic 310-30; yield estimated at time of origination (2) Future yield adjustments subject to change based on required, periodic valuation procedures

As part of its on-going valuation procedures, the Company experienced an improvement in the cash flow expectations related to certain loan pools of $36.7 million during the third quarter 2010. As a result, the average yield earned on covered loans increased from 9.10% during the second quarter 2010 to 9.75% during the third quarter 2010. On a prospective basis and until its next periodic valuation, the Company expects the yield on covered loans to be 10.08%.

This projected improvement in cash flow expectations on loans is partially offset by a related $20.7 million decline in cash flow expectations on the FDIC indemnification asset. The net result of improvement and impairment (discussed in more detail in Section II) activity related to covered loans affected the average yield earned on the indemnification asset, decreasing from 6.50% during the second quarter 2010 to 3.91% during the third quarter 2010. On a prospective basis and until its next periodic valuation, the Company expects the yield on the indemnification asset to be 2.61%.

Net interest margin for the nine month period ended September 30, 2010 was 4.67% as compared to 3.71% for the nine month period ended September 30, 2009.

NONINTEREST INCOME

The following table presents noninterest income for the three months ended September 30, June 30 and March 31, 2010 highlighting the estimated impact of covered loan activity and other transition items on the Company's reported balance.

Table V For the Three Months Ended -------------------------- September 30, June 30, March 31, (Dollars in thousands) 2010 2010 2010 Total noninterest income $44,895 $40,467 $26,935 Significant components of noninterest income Items likely to recur: ---------------------- Accelerated discount on loan prepayments and dispositions (1, 2) 9,448 7,408 6,098 FDIC loss sharing income 17,800 15,170 7,568 Other acquired-non- strategic income 44 475 80 Transition-related items - - 366 Items expected not to recur: --------------------- Gain on sale of insurance business 1,356 - - FDIC settlement and other items not expected to recur (132) 2,930 - Total excluding items noted above $16,379 $14,484 $12,823 ======= ======= ======= (1) See Section II for additional information (2) Net of the corresponding valuation adjustment on the FDIC indemnification asset

During the quarterly periods presented above, excluding the aforementioned inclusion of reimbursements due from the FDIC resulting from loss share agreements, covered loan activity positively impacted noninterest income due to loan prepayments and dispositions. This activity is discussed in more detail in Section II. Included in noninterest income for the third quarter 2010 was a $2.0 million gain resulting from the sale of approximately $23.2 million of loans originated by its franchise finance business. As discussed in more detail under Loans (Excluding Covered Loans), periodic sales of franchise loans will be recurring in order to manage risk in the business line. Loans are sold with servicing retained. Additionally, consistent with the Company's previous exit of a similar business line, the property and casualty insurance business acquired as part of the Irwin acquisition was sold during the quarter, resulting in the recognition of a $1.4 million gain.

Excluding the items highlighted in Table I, as well as the bargain purchase gain on the acquisitions recognized during the third quarter 2009, estimated noninterest income earned in the third quarter 2010 was $16.4 million as compared to $14.5 million in the second quarter 2010 and $11.8 million in the third quarter 2009. The remaining increase in the comparable year-over-year quarter was driven primarily by higher service charges on deposit accounts resulting from an increase in transaction-based deposits, increased bankcard income, higher trust and wealth management fees and higher brokerage and insurance income as a result of the 2009 acquisitions.

For the nine month period ended September 30, 2010, noninterest income totaled $112.3 million as compared to $380.6 million for the similar year-over-year period. Excluding the items mentioned above and those highlighted in Table I, as well as gains on sales of investments and the gain on sale of the property & casualty portion of the insurance business which occurred during the first quarter 2009, noninterest income was $43.7 million for the nine month period ended September 30, 2010 as compared to $33.9 million for the nine months ended September 30, 2009.

NONINTEREST EXPENSE

The following table presents noninterest expense for the three months ended September 30, June 30 and March 31, 2010 including the estimated effect of acquired-non-strategic operations, acquisition-related costs and other transition items.

Table VI For the Three Months Ended -------------------------- September March 30, June 30, 31, (Dollars in thousands) 2010 2010 2010 ---------------------- ---- ---- ---- Total noninterest expense $61,310 $55,819 $60,261 Significant components of noninterest expense Items likely to recur: ---------------------- Acquired-non-strategic operating expenses 1 566 1,270 2,201 Transition-related items 1 846 1,321 6,263 FDIC indemnification support 875 938 605 Items expected not to recur: --------------------- Acquisition-related costs 1 1,505 2,180 2,629 FHLB prepayment penalty 8,029 - - Other items not expected to recur 493 2,387 1,019 Total excluding items noted above $48,996 $47,723 $47,544 ======= ======= ======= (1) See Section II for additional information

Similar to the second and first quarters 2010, noninterest expense during the third quarter 2010 continued to be affected by acquisition-related costs as well as other transition-related items and costs related to the Company's acquired-non-strategic operations. Additionally, the Company incurred a charge of $8.0 million in connection with the aforementioned prepayment of $232 million of FHLB advances. After adjusting for these items, estimated noninterest expense increased slightly, totaling $49.0 million for the third quarter 2010. Compared to the year-over-year quarter, excluding acquisition-related and other non-recurring expenses incurred during the third quarter 2009, estimated noninterest expense increased $13.6 million, primarily driven by higher salaries and employment benefits, occupancy costs, equipment expenses and marketing costs resulting from the 2009 acquisitions.

For the nine month period ended September 30, 2010, noninterest expense totaled $177.4 million compared to $109.0 million for the comparable year-over-year period. Excluding the items mentioned above and those highlighted in Table II as well as the FDIC special assessment and acquisition related expenses incurred during the second quarter 2009 and severance costs related to the first quarter 2009 sale of the property & casualty portion of the insurance business, noninterest expense was $144.3 million for the nine month period ended September 30, 2010 as compared to $106.6 million for the nine months ended September 30, 2009.

While the technology and operational integration of Irwin and Peoples is complete, it is expected that there will be additional integration- and wind-down-related costs incurred throughout 2010 and into 2011.

INCOME TAXES

For the third quarter 2010, income tax expense was $8.8 million, resulting in an effective tax rate of 36.2%, compared with income tax expense of $9.5 million and an effective tax rate of 34.8% during the second quarter 2010 and $121.8 million and an effective tax rate of 37.8% during the comparable year-over-year period.

For the nine month period ended September 30, 2010, income tax expense was $24.6 million, resulting in an effective tax rate of 35.4%, compared with income tax expense of $125.5 million and an effective tax rate of 37.7% for the nine months ended September 30, 2009.

CREDIT QUALITY - EXCLUDING COVERED ASSETS

The following table presents certain credit quality metrics related to the Company's uncovered loan portfolio as of September 30, 2010 and for the trailing four quarters.

Table VII As of or for the Three Months Ended ----------------------------------- September March 30, June 30, 31, (Dollars in thousands) 2010 2010 2010 Total nonaccrual loans $66,157 $66,671 $66,869 Restructured loans $13,365 $12,752 $7,584 Total nonperforming loans $79,522 $79,423 $74,453 Total nonperforming assets $97,827 $96,241 $92,540 Nonperforming assets as a % of: Period-end loans plus OREO 3.51% 3.42% 3.27% Total assets 1.59% 1.46% 1.41% Nonperforming loans as a % of total loans 2.88% 2.84% 2.65% Provision for loan and lease losses -uncovered $6,287 $6,158 $11,378 Allowance for uncovered loan & lease losses $57,249 $57,811 $56,642 Allowance for loan & lease losses as a % of: Period-end loans 2.07% 2.07% 2.01% Nonaccrual loans 86.5% 86.7% 84.7% Nonperforming loans 72.0% 72.8% 76.1% Total net charge-offs $6,849 $4,989 $14,047 Annualized net-charge-offs as a % of average loans & leases 0.97% 0.71% 2.00% Table VII As of or for the Three Months Ended ----------------------------------- December September 31, 30, (Dollars in thousands) 2009 2009 Total nonaccrual loans $71,657 $60,506 Restructured loans $6,125 $3,102 Total nonperforming loans $77,782 $63,608 Total nonperforming assets $81,927 $67,909 Nonperforming assets as a % of: Period-end loans plus OREO 2.83% 2.36% Total assets 1.23% 0.94% Nonperforming loans as a % of total loans 2.69% 2.21% Provision for loan and lease losses - uncovered $14,812 $26,655 Allowance for uncovered loan & lease losses $59,311 $55,770 Allowance for loan & lease losses as a % of: Period-end loans 2.05% 1.94% Nonaccrual loans 82.8% 92.2% Nonperforming loans 76.3% 87.7% Total net charge- offs $11,271 $9,534 Annualized net- charge-offs as a % of average loans & leases 1.53% 1.31% Net Charge-offs

Third quarter 2010 net charge-offs were $6.8 million, or 0.97% of average loans and leases, compared with $5.0 million, or 0.71%, for the linked quarter and $9.5 million, or 1.31%, for the comparable year-over-year quarter. The increase compared to the linked quarter was driven by higher charge-offs in the construction, commercial real estate and, to a lesser degree, residential portfolios, offset by lower net charge-offs in the commercial portfolio.

For the nine months ended September 30, 2010, net charge-offs were $25.9 million, or 1.23% of average loans and leases. These amounts were impacted by the alleged fraudulent activity noted during the first quarter 2010 which totaled $8.8 million, representing 42 basis points of average loans and leases for the period. Excluding the alleged fraudulent activity, net charge-offs were $17.1 million, or 0.81%, as compared to $21.4 million, or 1.03%, for the nine month period ended September 30, 2009.

Nonperforming Assets

Nonperforming loans totaled $79.5 million and nonperforming assets totaled $97.8 million as of September 30, 2010 compared with $79.4 million and $96.2 million, respectively, for the linked quarter and $63.6 million and $67.9 million, respectively, for the comparable year-over-year quarter. While total nonaccrual loans remained essentially unchanged, the individual components changed as commercial nonaccrual loans increased $4.4 million and home equity nonaccrual loans increased $561,000, offset by a decrease in construction nonaccrual loans of $5.4 million driven by the higher level of net charge-offs related to this loan category.

Total classified assets increased $10.7 million during the third quarter 2010 to $212.6 million. Classified assets are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse. The increase was driven primarily by one relationship related to a multi-family, mixed use project totaling $9.3 million in the aggregate. All credits included in classified assets are monitored closely and have workout strategies in place should their status continue to deteriorate.

Other real estate owned increased $1.5 million to $18.3 million during the third quarter 2010. The net increase pertained to three development projects and one restaurant, none of which comprised a large portion of the overall increase.

While the Company is seeing isolated areas of improvement, overall weakness in both the commercial and consumer sectors continues to exist in its strategic markets and, as a result, recovery will be slow. Given the continued challenging environment, it will be critical to remain proactive in identifying and managing individual credit situations.

Delinquent Loans

Loans 30-to-89 days past due totaled $45.1 million, or 1.63% of period end loans, as of September 30, 2010. This compares to $21.8 million, or 0.78%, as of June 30, 2010 and $20.8 million, or 0.72%, as of September 30, 2009. The increase was driven primarily by the multi-family project discussed above, two residential developments totaling $8.1 million in the aggregate and a commercial real estate credit of $3.4 million.

Provision for Loan & Lease Losses

Third quarter 2010 provision expense related to uncovered loans and leases was $6.3 million as compared to $6.2 million during the linked quarter and $26.7 million during the comparable year-over-year quarter. As a percentage of net charge-offs, third quarter 2010 provision expense equaled 91.8% compared to 123.4% during the second quarter 2010 and 279.6% during the third quarter 2009.

Allowance for Loan & Lease Losses

As of the end of the third quarter 2010, the allowance for uncovered loan and lease losses was $57.2 million as compared to $57.8 million as of June 30, 2010 and $55.8 million as of September 30, 2009. As a percentage of period-end loans, the allowance for loan and lease losses remained unchanged at 2.07% as of September 30, 2010 as compared to June 30, 2010 and 1.94% as of September 30, 2009. The allowance for loan and lease losses as of September 30, 2010 reflects management's estimate of credit risk inherent in the Company's portfolio at that time.

LOANS (EXCLUDING COVERED LOANS)

The following table presents the loan portfolio, not including covered loans, as of September 30, 2010, June 30, 2010 and September 30, 2009.

Table VIII As of ----- September 30, 2010 ------------------ Percent of (Dollars in thousands) Balance Total ---------------------- ------- ------ Commercial $763,449 27.6% Real estate - construction 178,914 6.5% Real estate - commercial 1,095,543 39.6% Real estate - residential 283,914 10.3% Installment 73,138 2.6% Home equity 341,288 12.3% Credit card 28,825 1.0% Lease financing 138 0.0% Total $2,765,209 100.0% ========== ===== Table VIII As of ----- June 30, 2010 ------------- Percent of (Dollars in thousands) Balance Total ---------------------- ------- ------ Commercial $749,522 26.8% Real estate - construction 197,112 7.1% Real estate - commercial 1,113,836 39.9% Real estate - residential 296,295 10.6% Installment 75,862 2.7% Home equity 332,928 11.9% Credit card 28,567 1.0% Lease financing 15 0.0% Total $2,794,137 100.0% ========== ===== Table VIII As of ----- September 30, 2009 ------------------ Percent of (Dollars in thousands) Balance Total ---------------------- ------- ------ Commercial $818,608 28.5% Real estate - construction 245,535 8.5% Real estate - commercial 1,037,121 36.1% Real estate - residential 331,678 11.5% Installment 86,940 3.0% Home equity 324,340 11.3% Credit card 27,713 1.0% Lease financing 19 0.0% Total $2,871,954 100.0% ========== =====

Loans, excluding covered loans, totaled $2.8 billion at the end of the third quarter, a decrease of $28.9 million, or 1.0%, compared to June 30, 2010 and a decrease of $106.7 million, or 3.7%, compared to September 30, 2009. As compared to the linked quarter, the composition of the loan portfolio remained essentially the same with the slight overall decrease occurring largely in the construction and commercial and residential real estate portfolios offset by modest increases in the commercial and home equity portfolios. Overall, loan demand continued to remain slow in the Company's strategic operating markets.

During the third quarter 2010, the Company sold approximately $23.2 million of loans originated by its franchise finance business at a premium, recognizing a gain of $2.0 million. The loans sold consisted of both loans covered by FDIC loss sharing agreements and credits originated subsequent to the Irwin acquisition. The sale was conducted to lessen credit and geographic concentration risk within the franchise portfolio. As a liquid secondary market exists for these types of credits, the Company may consider additional franchise loan sales in the future as a way to mitigate the aforementioned risks.

INVESTMENTS

The following table presents a summary of the total investment portfolio at September 30, 2010.

Table IX As of September 30, 2010 Percent Book of Book Cost (Dollars in thousands) Value Total Yield Basis U.S. Treasury notes $14,335 2.0% 2.26 99.68 Agencies 111,590 15.5% 2.88 100.00 CMOs (agency) 190,017 26.4% 1.71 99.75 CMOs (private) 48 0.0% 1.03 100.00 MBSs (agency) 289,247 40.1% 4.56 100.93 605,236 84.0% 3.30 100.36 Municipal 18,761 2.6% 7.20 99.19 Other (1) 96,528 13.4% 2.95 102.18 115,290 16.0% 3.64 101.69 Total investment portfolio $720,526 100.0% 3.36 100.57 ======== ===== ==== ====== Net Unrealized Gain/ (Loss) Aggregate Gains Aggregate Losses Net Unrealized Gain/ (Loss) % of Book Value Table IX As of September 30, 2010 Market Gain/ (Dollars in thousands) Value (Loss) U.S. Treasury notes 103.69 $576 Agencies 101.42 1,567 CMOs (agency) 100.95 2,256 CMOs (private) 100.25 0 MBSs (agency) 106.38 14,823 103.63 19,222 Municipal 102.22 567 Other (1) 102.60 398 102.54 965 Total investment portfolio 103.45 $20,187 ====== ======= Net Unrealized Gain/ (Loss) $20,187 Aggregate Gains 20,302 Aggregate Losses (115) Net Unrealized Gain/ (Loss) % of Book Value 2.80% (1) Other includes $87 million of regulatory stock

The increase relative to the linked quarter was due to the purchase of $154 million of FNMA / FHLMC mortgage backed securities during the quarter, net of maturities and amortizations. While loan demand remains muted, the Company continues to selectively redeploy a portion of its cash position to purchase investments as market conditions permit. Future purchases will be made utilizing the same discipline and portfolio management philosophy applied in the past, including avoidance of material credit risk and geographic concentration risk within mortgage-backed securities, while also balancing the Company's overall asset / liability management objectives.

DEPOSITS

The following table presents a roll-forward of deposit activity during the third quarter 2010, including activity related to deposits acquired through the FDIC-assisted transactions.

Table X Deposit Activity - Third Quarter 2010 ------------------------------------- Balance as Balance as of Acquired- of Non- September June 30, Strategic Strategic 30, (Dollars in thousands) 2010 Portfolio Portfolio 2010 ----------- ---- --------- --------- ---- Transaction and savings accounts $3,204,513 (36,878) (47,024) $3,120,611 Time deposits 1,795,934 (37,743) (16,132) 1,742,059 Brokered deposits 246,889 (984) (57,312) 188,593 Total deposits $5,247,336 $(75,605) $(120,468) $5,051,263 ========== ======== ========= ==========

Overall, strategic transaction and savings accounts declined $36.9 million during the third quarter. Retail and business transactional accounts continued to experience solid growth during the quarter, increasing $60.4 million. However, this was offset by a decrease of $97.2 million in public funds transactional deposits. Similar to the prior quarter, acquired-non-strategic balances continued to decline, the majority of which consisted of time and brokered deposits. During the third quarter 2010, the Company closed its remaining two western market offices acquired as part of the Irwin transaction, contributing to the decline in acquired-non-strategic transaction and savings accounts. As of September 30, 2010, brokered deposits had declined to less than 4% of total deposits.

CAPITAL MANAGEMENT

The following table presents First Financial's preliminary regulatory and other capital ratios as of September 30, 2010, June 30, 2010 and September 30, 2009. Prior period amounts have been revised to reflect the purchase accounting adjustments discussed in Acquisitions above.

Table XI As of ----- September September "Well- 30, June 30, 30, Capitalized" ---------- -------- ---------- ------------- 2010 2010 2009 Minimum ---- ---- ---- ------- Leverage Ratio 10.50% 9.99% 13.86% 5.00% Tier 1 Capital Ratio 18.64% 18.15% 15.46% 6.00% Total Risk-Based Capital Ratio 19.91% 19.42% 16.71% 10.00% Ending tangible shareholders' equity to ending tangible assets 10.38% 9.55% 8.16% N/A Ending tangible common shareholders' equity to ending tangible assets 10.38% 9.55% 7.07% N/A

Capital levels continued to improve during the third quarter 2010. As of September 30, 2010, tangible book value per common share was $10.90 as compared to $10.73 as of June 30, 2010 and $9.86 as of September 30, 2009. First Financial's tangible common equity ratio increased to 10.38% for the third quarter 2010 as compared to 9.55% for the linked quarter and 7.07% for the comparable year-over-year quarter.

SECTION II - SUPPLEMENTAL INFORMATION ON COVERED ASSETS AND ACQUISITION-RELATED ITEMS

Due to the FDIC-assisted transactions and other acquisitions occurring during 2009, the size of First Financial's business expanded significantly. To assist in analyzing the effect of these transactions on the financial results, supplemental information that segregates the estimated impact on pre-tax earnings of certain acquisition-related items and provides additional detail on the covered loan portfolio follows.

SUMMARY OF SIGNIFICANT ACQUISITION-RELATED ITEMS

The following table illustrates the estimated effect of certain acquisition-related items on the results of operations for the three months ended September 30, June 30, and March 31, 2010.

Table XII For the Three Months Ended -------------------------- September March 30, June 30, 31, (Dollars in thousands) 2010 2010 2010 ---------------------- ---- ---- ---- Income effect: Accelerated discount on loan prepayments and dispositions: (1, 2) $9,448 $7,408 $6,098 Acquired-non-strategic net interest income 10,586 10,207 10,854 Service charges on deposit accounts related to acquired-non-strategic operations 168 130 230 Other income related to acquired- non-strategic operations (124) 346 (150) Income related to the accelerated discount on loan prepayments and dispositions and acquired- non-strategic operations 20,078 18,091 17,032 ------ ------ ------ Expense effect: Acquired-non-strategic operating expenses: (3) Salaries and employee benefits 13 29 122 Occupancy 91 542 1,415 Other 462 699 664 Total acquired-non-strategic operating expenses 566 1,270 2,201 --- ----- ----- FDIC indemnification support (3) 875 938 605 Acquisition-related costs: (3) Integration-related costs (102) 720 999 Professional services fees 1,174 1,436 1,457 Other 433 24 172 Total acquisition-related costs 1,505 2,180 2,628 ----- ----- ----- Transition-related items: (3) Salaries and benefits 796 1,843 4,776 Occupancy 50 (522) 910 Other - - 577 Total transition-related items 846 1,321 6,263 --- ----- ----- Net effect of gross up of credit losses and FDIC reimbursement (4) 2,925 3,792 1,892 Total expense effect 6,717 9,501 13,589 ----- ----- ------ Total estimated effect on pre- tax earnings $13,361 $8,590 $3,443 ======= ====== ====== 1 Included in noninterest income 2 Net of the corresponding valuation adjustment on the FDIC indemnification asset 3 Included in noninterest expense 4 Represents the Company's proportionate share of total recognized, unanticipated losses on covered loans

When covered loan balances paydown early, through either a loan sale or prepayments by the borrower, and credit experience is better than originally estimated, the remaining carrying value of the valuation mark associated with the respective loan is recognized as noninterest income, net of a corresponding valuation adjustment on the FDIC indemnification asset. When losses are incurred on covered loans that exceed expectations, the Company recognizes the gross credit losses in excess of the valuation mark as provision expense. Reimbursements due from the FDIC under loss share agreements related to these credit losses are recorded as noninterest income. The impact on earnings of this offsetting activity is shown above as the net effect of the gross up of credit losses and FDIC reimbursement, representing the Company's proportionate share of the credit losses realized on covered loans.

As previously discussed, the Company sold $23.2 million of loans originated by its franchise finance unit, a portion of which consisted of loans covered under loss share agreements. With regard to the covered loan portion, the Company recognized $362,000 of revenue related to the accelerated discount. The remaining $9.1 million of accelerated discount resulted from loan prepayments.

COVERED ASSETS & LOSS SHARE AGREEMENTS

As of September 30, 2010, 37% of the Company's total loans were covered loans. As required under the loss-share arrangements, First Financial must file monthly certifications with the FDIC on single-family residential loans and quarterly certifications on all other loans. To date, all certifications have been filed in a timely manner and without significant issues.

COVERED LOAN PORTFOLIO

The following table presents estimated activity in the covered loan portfolio by loan type during the third quarter 2010.

Table XIII Covered Loan Activity - Third Quarter 2010 ------------------------------------------ Reduction in Balance Due to: ---------------------------- June 30, (Dollars in thousands) 2010 Loan Sales ---------------------- ---- ---------- Commercial $422,613 $14,248 Real estate - construction 61,327 - Real estate -commercial 957,129 - Real estate - residential 244,333 - Installment 24,585 - Other covered loans 7,645 - Total covered loans $1,717,632 $14,248 ========== ======= Table XIII Covered Loan Activity - Third Quarter 2010 ------------------------------------------ Reduction in Balance Due to: ---------------------------- Prepayments / Contractual Activity (Dollars in thousands) Renewals (1) ---------------------- -------- --------- Commercial $13,939 $6,242 Real estate - construction 596 1,995 Real estate -commercial 44,658 5,412 Real estate - residential 9,444 (1,426) Installment 1,546 902 Other covered loans - - Total covered loans $70,183 $13,125 ======= ======= Table XIII Covered Loan Activity - Third Quarter 2010 ------------------------------------------ Reduction in Balance Due to: ---------------------------- September 30, (Dollars in Charge- thousands) Offs (2) 2010 ----------- -------- ---- Commercial $1,591 $386,593 Real estate - construction - 58,736 Real estate - commercial 8,604 898,455 Real estate - residential 23 236,292 Installment 274 21,863 Other covered loans - 7,645 Total covered loans $10,492 $1,609,584 ======= ========== 1 Includes partial paydowns, accretion of the valuation discount and advances on revolving loans 2 Indemnified at 80% from the FDIC

During the third quarter 2010, the total balance of covered loans decreased $108.0 million, or 6.3%, as compared to the previous quarter. Of this decrease, $70.2 million, or 4.1%, was attributable to prepayments or renewals, $14.2 million, or 83 bps, pertained to loan sales, $13.1 million, or 76 bps, related to repayments in accordance with contractual obligations and $10.5 million, or 61 bps, resulted from charge-offs.

ALLOWANCE FOR LOAN LOSSES

Under the applicable accounting guidance, the allowance for loan losses related to covered loans as a result of impairment identified in on-going valuation procedures is generally recognized in the current period as provision expense. Improvement in the credit outlook, however, is not recognized immediately but instead is reflected as an adjustment to the yield earned on the related loan pools on a prospective basis. The timing inherent in this accounting treatment may result in earnings volatility in future periods.

The Company established an allowance for loan losses associated with covered loans during the second quarter 2010 based on its estimated valuation procedures performed during the period. This allowance, totaling $1.3 million, was the net effect of $19.0 million recognized as provision expense during the second quarter less $17.7 million of net charge-offs related to these loans. The related estimated reimbursement due from the FDIC under loss sharing agreements of $15.2 million was recorded as both FDIC loss sharing income and an increase to the FDIC indemnification asset. The net amount of this activity reflects the Company's expected proportionate share of losses related to this impairment.

During the third quarter 2010, the Company updated its estimated valuation procedures related to loans covered under loss share agreements. As a result of impairment identified in certain loan pools, it recognized a provision expense related to covered loans of $20.7 million and realized net charge-offs of $10.4 million, resulting in an allowance for covered loan losses of $11.6 million as of September 30, 2010. The related receivable due from the FDIC under loss share agreements related to these loans of $17.8 million was recognized as FDIC loss share income and a corresponding increase to the FDIC indemnification asset.

Teleconference / Webcast Information

First Financial's senior management will host a conference call to discuss the Company's financial and operating results on Wednesday, November 3, 2010 at 9:00 a.m. Members of the public who would like to listen to the conference call should dial [phone] (U.S. toll free), [phone] (Canada toll free) or [phone] (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at http://www.bankatfirst.com/. A replay of the conference call will be available beginning one hour after the completion of the live call through November 18, 2010 at [phone] (U.S. toll free) and [phone] (International); conference number 445386. The webcast will be archived on the Investor Relations section of the Company's website through November 3, 2011.

Press Release and Additional Information on Website

This press release as well as supplemental information related to this release is available to the public through the Investor Relations section of First Financial's website at http://www.bankatfirst.com/investor.

Forward-Looking Statement

Certain statements contained in this news release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the 'Act'). In addition, certain statements in future filings by First Financial with the SEC, in press releases, and in oral and written statements made by or with the approval of First Financial which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure and other financial items, statements of plans and objectives of First Financial or its management or board of directors, and statements of future economic performances and statements of assumptions underlying such statements. Words such as 'believes', 'anticipates', 'intends', and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Management's analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

-- management's ability to effectively execute its business plan; -- the risk that the strength of the United States economy in general and the strength of the local economies in which we conduct operations may continue to deteriorate resulting in, among other things, a further deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio, allowance for loan and lease losses and overall financial performance; -- the ability of financial institutions to access sources of liquidity at a reasonable cost; -- the impact of recent upheaval in the financial markets and the effectiveness of domestic and international governmental actions taken in response, such as the U.S. Treasury's TARP and the FDIC's Temporary Liquidity Guarantee Program, and the effect of such governmental actions on us, our competitors and counterparties, financial markets generally and availability of credit specifically, and the U.S. and international economies, including potentially higher FDIC premiums arising from increased payments from FDIC insurance funds as a result of depository institution failures; -- the effect of and changes in policies and laws or regulatory agencies (notably the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act); -- inflation and possible changes in interest rates; -- our ability to keep up with technological changes; -- mergers and acquisitions, including costs or difficulties related to the integration of acquired companies and the wind-down of non-strategic operations; -- the risk that exploring merger and acquisition opportunities may detract from management's time and ability to successfully manage our company; -- expected cost savings in connection with the consolidation of recent acquisitions may not be fully realized or realized within the expected time frames, and deposit attrition, customer loss and revenue loss following completed acquisitions may be greater than expected; -- our ability to increase market share and control expenses; -- the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and the SEC; -- adverse changes in the securities and debt markets; -- our success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services; -- monetary and fiscal policies of the Board of Governors of the Federal Reserve System (Federal Reserve) and the U.S. government and other governmental initiatives affecting the financial services industry; -- our ability to manage loan delinquency and charge-off rates and changes in estimation of the adequacy of the allowance for loan losses; and -- the costs and effects of litigation and of unexpected or adverse outcomes in such litigation.

In addition, please refer to our Annual Report on Form 10-K for the year ended December 31, 2009, as well as our other filings with the SEC, for a more detailed discussion of these risks and uncertainties and other factors. Such forward-looking statements are meaningful only on the date when such statements are made, and First Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made to reflect the occurrence of unanticipated events.

About First Financial Bancorp

First Financial Bancorp is a Cincinnati, Ohio based bank holding company. As of September 30, 2010, the Company had $6.2 billion in assets, $4.4 billion in loans, $5.1 billion in deposits and $691 million in shareholders' equity. The Company's subsidiary, First Financial Bank, N.A., founded in 1863, provides banking and financial services products through its three lines of business: commercial, retail and wealth management. The commercial and retail units provide traditional banking services to business and consumer clients. The Wealth Resource Group provides financial planning, investment management, trust and estate, brokerage, insurance and retirement plan services and had approximately $2.2 billion in assets under management as of September 30, 2010. The Company's strategic operating markets are located in Ohio, Indiana, Kentucky and Michigan where it operates 113 banking centers across 75 communities. Additional information about the Company, including its products, services and banking locations is available at http://www.bankatfirst.com/.

Selected Financial Information September 30, 2010 (unaudited) FIRST FINANCIAL BANCORP. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share) (Unaudited) Three months ended Sep. 30, Jun. 30, Mar. 31, 2010 2010 2010 ---- ---- ---- RESULTS OF OPERATIONS Net income $15,579 $17,774 $11,598 Net income available to common shareholders $15,579 $17,774 $9,733 Net earnings per common share - basic $0.27 $0.31 $0.18 Net earnings per common share - diluted $0.27 $0.30 $0.17 Dividends declared per common share $0.10 $0.10 $0.10 KEY FINANCIAL RATIOS Return on average assets 0.96% 1.08% 0.71% Return on average shareholders' equity 9.03% 10.62% 6.92% Return on average common shareholders' equity 9.03% 10.62% 6.25% Return on average tangible common shareholders' equity 9.87% 11.64% 6.89% Net interest margin 4.59% 4.53% 4.89% Net interest margin (fully tax equivalent) (1) 4.60% 4.54% 4.91% Ending equity as a percent of ending assets 11.23% 10.35% 10.20% Ending common equity as a percent of ending assets 11.23% 10.35% 10.20% Ending tangible common equity as a percent of: Ending tangible assets 10.38% 9.55% 9.38% Risk-weighted assets 17.61% 17.17% 16.39% Average equity as a percent of average assets 10.68% 10.14% 10.22% Average common equity as a percent of average assets 10.68% 10.14% 9.51% Average tangible common equity as a percent of 9.86% 9.33% 8.70% average tangible assets Book value per common share $11.90 $11.74 $11.55 Tangible book value per common share $10.90 $10.73 $10.53 Tier 1 Ratio (2) 18.64% 18.15% 17.37% Total Capital Ratio (2) 19.91% 19.42% 18.64% Leverage Ratio (2) 10.50% 9.99% 9.76% AVERAGE BALANCE SHEET ITEMS Loans (3) $2,805,764 $2,806,616 $2,849,562 Covered loans and FDIC indemnification asset 1,886,750 2,041,820 2,168,407 Investment securities 691,700 597,991 558,595 Interest-bearing deposits with other banks 483,097 554,333 394,741 ------- ------- ------- Total earning assets $5,867,311 $6,000,760 $5,971,305 Total assets $6,408,479 $6,621,021 $6,647,541 Noninterest-bearing deposits $721,501 $740,011 $774,393 Interest-bearing deposits 4,448,929 4,570,971 4,544,471 --------- --------- --------- Total deposits $5,170,430 $5,310,982 $5,318,864 Borrowings $352,370 $447,945 $458,876 Shareholders' equity $684,112 $671,051 $679,567 CREDIT QUALITY RATIOS (excluding covered assets) Allowance to ending loans 2.07% 2.07% 2.01% Allowance to nonaccrual loans 86.54% 86.71% 84.71% Allowance to nonperforming loans 71.99% 72.79% 76.08% Nonperforming loans to total loans 2.88% 2.84% 2.65% Nonperforming assets to ending loans, plus OREO 3.51% 3.42% 3.27% Nonperforming assets to total assets 1.59% 1.46% 1.41% Net charge-offs to average loans (annualized) 0.97% 0.71% 2.00% Three months ended Dec. 31, Sep. 30, 2009 2009 ---- ---- RESULTS OF OPERATIONS Net income $13,795 $200,357 Net income available to common shareholders $12,795 $199,357 Net earnings per common share - basic $0.25 $3.91 Net earnings per common share - diluted $0.25 $3.87 Dividends declared per common share $0.10 $0.10 KEY FINANCIAL RATIOS Return on average assets 0.80% 17.64% Return on average shareholders' equity 8.36% 166.45% Return on average common shareholders' equity 8.81% 198.06% Return on average tangible common shareholders' equity 9.82% 233.03% Net interest margin 4.65% 3.90% Net interest margin (fully tax equivalent) (1) 4.67% 3.93% Ending equity as a percent of ending assets 9.76% 8.92% Ending common equity as a percent of ending assets 8.57% 7.84% Ending tangible common equity as a percent of: Ending tangible assets 7.75% 7.07% Risk-weighted assets 13.10% 12.65% Average equity as a percent of average assets 9.57% 10.60% Average common equity as a percent of average assets 8.42% 8.86% Average tangible common equity as a percent of 7.62% 7.63% average tangible assets Book value per common share $11.10 $11.03 Tangible book value per common share $9.94 $9.86 Tier 1 Ratio (2) 16.11% 15.46% Total Capital Ratio (2) 17.37% 16.71% Leverage Ratio (2) 9.24% 13.86% AVERAGE BALANCE SHEET ITEMS Loans (3) $2,929,850 $2,886,729 Covered loans and FDIC indemnification asset 2,254,989 536,319 Investment securities 608,952 575,697 Interest-bearing deposits with other banks 447,999 136,210 ------- ------- Total earning assets $6,241,790 $4,134,955 Total assets $6,840,393 $4,505,740 Noninterest-bearing deposits $840,314 $554,471 Interest-bearing deposits 4,710,167 3,054,226 --------- --------- Total deposits $5,550,481 $3,608,697 Borrowings $471,916 $377,406 Shareholders' equity $654,631 $477,550 CREDIT QUALITY RATIOS (excluding covered assets) Allowance to ending loans 2.05% 1.94% Allowance to nonaccrual loans 82.77% 92.17% Allowance to nonperforming loans 76.25% 87.68% Nonperforming loans to total loans 2.69% 2.21% Nonperforming assets to ending loans, plus OREO 2.83% 2.36% Nonperforming assets to total assets 1.23% 0.94% Net charge-offs to average loans (annualized) 1.53% 1.31% Nine months ended Sep. 30, 2010 2009 ---- ---- RESULTS OF OPERATIONS Net income $44,951 $207,542 Net income available to common shareholders $43,086 $204,964 Net earnings per common share - basic $0.76 $4.77 Net earnings per common share - diluted $0.75 $4.71 Dividends declared per common share $0.30 $0.30 KEY FINANCIAL RATIOS Return on average assets 0.92% 6.89% Return on average shareholders' equity 8.86% 68.81% Return on average common shareholders' equity 8.69% 84.29% Return on average tangible common shareholders' equity 9.53% 103.33% Net interest margin 4.67% 3.71% Net interest margin (fully tax equivalent) (1) 4.68% 3.75% Ending equity as a percent of ending assets 11.23% 8.92% Ending common equity as a percent of ending assets 11.23% 7.84% Ending tangible common equity as a percent of: Ending tangible assets 10.38% 7.07% Risk-weighted assets 17.61% 12.65% Average equity as a percent of average assets 10.34% 10.02% Average common equity as a percent of average assets 10.10% 8.08% Average tangible common equity as a percent of 9.30% 6.69% average tangible assets Book value per common share $11.90 $11.03 Tangible book value per common share $10.90 $9.86 Tier 1 Ratio (2) 18.64% 15.46% Total Capital Ratio (2) 19.91% 16.71% Leverage Ratio (2) 10.50% 13.86% AVERAGE BALANCE SHEET ITEMS Loans (3) $2,820,487 $2,783,251 Covered loans and FDIC indemnification asset 2,031,294 180,738 Investment securities 616,583 687,689 Interest-bearing deposits with other banks 477,714 51,177 ------- ------ Total earning assets $5,946,078 $3,702,855 Total assets $6,558,138 $4,025,236 Noninterest-bearing deposits $745,108 $462,084 Interest-bearing deposits 4,521,107 2,628,793 --------- --------- Total deposits $5,266,215 $3,090,877 Borrowings $419,340 $494,903 Shareholders' equity $678,260 $403,248 CREDIT QUALITY RATIOS (excluding covered assets) Allowance to ending loans 2.07% 1.94% Allowance to nonaccrual loans 86.54% 92.17% Allowance to nonperforming loans 71.99% 87.68% Nonperforming loans to total loans 2.88% 2.21% Nonperforming assets to ending loans, plus OREO 3.51% 2.36% Nonperforming assets to total assets 1.59% 0.94% Net charge-offs to average loans (annualized) 1.23% 1.03% (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. (2) September 30, 2010 regulatory capital ratios are preliminary. (3) Includes loans held for sale. FIRST FINANCIAL BANCORP. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share) (Unaudited) Three months ended, Sep. 30, -------- 2010 2009 % Change ---- ---- -------- Interest income Loans, including fees $75,957 $46,811 62.3% Investment securities Taxable 5,386 6,241 (13.7%) Tax-exempt 240 352 (31.8%) --- --- ------- Total investment securities interest 5,626 6,593 (14.7%) Other earning assets 3,101 1,311 136.5% ----- ----- ----- Total interest income 84,684 54,715 54.8% Interest expense Deposits 14,457 11,490 25.8% Short-term borrowings 25 261 (90.4%) Long-term borrowings 2,034 1,977 2.9% Subordinated debentures and capital securities 322 323 (0.3%) --- --- ------ Total interest expense 16,838 14,051 19.8% ------ ------ ---- Net interest income 67,846 40,664 66.8% Provision for loan and lease losses - uncovered 6,287 26,655 (76.4%) Provision for loan and lease losses - covered 20,725 0 N/M ------ --- --- Net interest income after provision for loan and lease losses 40,834 14,009 191.5% Noninterest income Service charges on deposit accounts 5,632 5,408 4.1% Trust and wealth management fees 3,366 3,339 0.8% Bankcard income 2,193 1,379 59.0% Net gains from sales of loans 2,749 63 4263.5% Gains on sales of investment securities 0 0 N/M Gain on acquisition 0 342,494 (100.0%) FDIC loss sharing income 17,800 0 N/M Accelerated discount on covered loans 9,448 0 N/M Income (loss) on preferred securities 0 154 (100.0%) Other 3,707 1,599 131.8% ----- ----- ----- Total noninterest income 44,895 354,436 (87.3%) Noninterest expenses Salaries and employee benefits 28,790 22,051 30.6% Net occupancy 4,663 3,442 35.5% Furniture and equipment 2,490 1,874 32.9% Data processing 1,191 973 22.4% Marketing 1,230 871 41.2% Communication 986 737 33.8% Professional services 2,117 1,220 73.5% Debt extinguishment 8,029 0 N/M State intangible tax 724 628 15.3% FDIC assessments 2,123 1,612 31.7% Other 8,967 12,893 (30.5%) ------- Total noninterest expenses 61,310 46,301 32.4% ---- Income before income taxes 24,419 322,144 (92.4%) Income tax expense 8,840 121,787 (92.7%) ----- ------- ------- Net income 15,579 200,357 (92.2%) Dividends on preferred stock 0 1,000 (100.0%) --- ----- -------- Income available to common shareholders $15,579 $199,357 (92.2%) ======= ======== ======= ADDITIONAL DATA Net earnings per common share - basic $0.27 $3.91 Net earnings per common share - diluted $0.27 $3.87 Dividends declared per common share $0.10 $0.10 Return on average assets 0.96% 17.64% Return on average shareholders' equity 9.03% 166.45% Interest income $84,684 $54,715 54.8% Tax equivalent adjustment 222 300 (26.0%) --- --- ------- Interest income - tax equivalent 84,906 55,015 54.3% Interest expense 16,838 14,051 19.8% ------ ------ ---- Net interest income - tax equivalent $68,068 $40,964 66.2% ======= ======= ==== Net interest margin 4.59% 3.90% Net interest margin (fully tax equivalent) (1) 4.60% 3.93% Full-time equivalent employees (2) 1,535 1,150 Nine months ended, Sep. 30, -------- 2010 2009 % Change ---- ---- -------- Interest income Loans, including fees $230,239 $114,446 101.2% Investment securities Taxable 16,226 22,954 (29.3%) Tax-exempt 720 1,172 (38.6%) --- ----- ------- Total investment securities interest 16,946 24,126 (29.8%) Other earning assets 13,996 1,311 967.6% ------ ----- ----- Total interest income 261,181 139,883 86.7% Interest expense Deposits 45,413 30,373 49.5% Short-term borrowings 61 1,295 (95.3%) Long-term borrowings 7,147 4,534 57.6% Subordinated debentures and capital securities 956 880 8.6% --- --- --- Total interest expense 53,577 37,082 44.5% ------ ------ ---- Net interest income 207,604 102,801 101.9% Provision for loan and lease losses - uncovered 23,823 41,272 (42.3%) Provision for loan and lease losses - covered 49,147 0 N/M ------ --- --- Net interest income after provision for loan and lease losses 134,634 61,529 118.8% Noninterest income Service charges on deposit accounts 17,098 13,776 24.1% Trust and wealth management fees 10,579 9,881 7.1% Bankcard income 6,263 4,092 53.1% Net gains from sales of loans 3,391 855 296.6% Gains on sales of investment securities 0 3,349 (100.0%) Gain on acquisition 0 342,494 (100.0%) FDIC loss sharing income 40,538 0 N/M Accelerated discount on covered loans 22,954 0 N/M Income (loss) on preferred securities (30) 277 (110.8%) Other 11,504 5,842 96.9% ------ ----- ---- Total noninterest income 112,297 380,566 (70.5%) Noninterest expenses Salaries and employee benefits 88,544 55,927 58.3% Net occupancy 18,125 8,912 103.4% Furniture and equipment 7,277 5,527 31.7% Data processing 3,559 2,585 37.7% Marketing 3,904 2,211 76.6% Communication 3,016 2,077 45.2% Professional services 6,306 3,427 84.0% Debt extinguishment 8,029 0 N/M State intangible tax 3,481 1,944 79.1% FDIC assessments 6,040 5,318 13.6% Other 29,109 21,103 37.9% ---- Total noninterest expenses 177,390 109,031 62.7% ---- Income before income taxes 69,541 333,064 (79.1%) Income tax expense 24,590 125,522 (80.4%) ------ ------- ------- Net income 44,951 207,542 (78.3%) Dividends on preferred stock 1,865 2,578 (27.7%) ----- ----- ------- Income available to common shareholders $43,086 $204,964 (79.0%) ======= ======== ======= ADDITIONAL DATA Net earnings per common share - basic $0.76 $4.77 Net earnings per common share - diluted $0.75 $4.71 Dividends declared per common share $0.30 $0.30 Return on average assets 0.92% 6.89% Return on average shareholders' equity 8.86% 68.81% Interest income $261,181 $139,883 86.7% Tax equivalent adjustment 646 970 (33.4%) --- --- ------- Interest income - tax equivalent 261,827 140,853 85.9% Interest expense 53,577 37,082 44.5% ------ ------ ---- Net interest income - tax equivalent $208,250 $103,771 100.7% ======== ======== ===== Net interest margin 4.67% 3.71% Net interest margin (fully tax equivalent) (1) 4.68% 3.75% Full-time equivalent employees (2) (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. (2) Does not include associates from acquisitions that are currently in a temporary hire status. N/M = Not meaningful. FIRST FINANCIAL BANCORP. CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (Dollars in thousands, except per share) (Unaudited) 2010 Third Second First ----- ------ ----- Quarter Quarter Quarter YTD ------- ------- ------- --- Interest income Loans, including fees $75,957 $74,944 $79,338 $230,239 Investment securities Taxable 5,386 5,444 5,396 16,226 Tax-exempt 240 245 235 720 --- --- --- --- Total investment securities interest 5,626 5,689 5,631 16,946 Other earning assets 3,101 5,305 5,590 13,996 ----- ----- ----- ------ Total interest income 84,684 85,938 90,559 261,181 Interest expense Deposits 14,457 15,308 15,648 45,413 Short-term borrowings 25 17 19 61 Long-term borrowings 2,034 2,556 2,557 7,147 Subordinated debentures and capital securities 322 319 315 956 --- --- --- --- Total interest expense 16,838 18,200 18,539 53,577 ------ ------ ------ ------ Net interest income 67,846 67,738 72,020 207,604 Provision for loan and lease losses -uncovered 6,287 6,158 11,378 23,823 Provision for loan and lease losses -covered 20,725 18,962 9,460 49,147 ------ ------ ----- ------ Net interest income after provision for loan and lease losses 40,834 42,618 51,182 134,634 Noninterest income Service charges on deposit accounts 5,632 5,855 5,611 17,098 Trust and wealth management fees 3,366 3,668 3,545 10,579 Bankcard income 2,193 2,102 1,968 6,263 Net gains from sales of loans 2,749 473 169 3,391 Gains on sales of investment securities 0 0 0 0 FDIC loss sharing income 17,800 15,170 7,568 40,538 Accelerated discount on covered loans 9,448 7,408 6,098 22,954 (Loss) income on preferred securities 0 0 (30) (30) Other 3,707 5,791 2,006 11,504 ----- ----- ----- ------ Total noninterest income 44,895 40,467 26,935 112,297 Noninterest expenses Salaries and employee benefits 28,790 29,513 30,241 88,544 Net occupancy 4,663 5,340 8,122 18,125 Furniture and equipment 2,490 2,514 2,273 7,277 Data processing 1,191 1,136 1,232 3,559 Marketing 1,230 1,600 1,074 3,904 Communication 986 822 1,208 3,016 Professional services 2,117 2,446 1,743 6,306 Debt extinguishment 8,029 0 0 8,029 State intangible tax 724 1,426 1,331 3,481 FDIC assessments 2,123 1,907 2,010 6,040 Other 8,967 9,115 11,027 29,109 ----- ----- ------ ------ Total noninterest expenses 61,310 55,819 60,261 177,390 ------ ------ ------ ------- Income before income taxes 24,419 27,266 17,856 69,541 Income tax expense 8,840 9,492 6,258 24,590 ----- ----- ----- ------ Net income 15,579 17,774 11,598 44,951 Dividends on preferred stock 0 0 1,865 1,865 --- --- ----- ----- Income available to common shareholders $15,579 $17,774 $9,733 $43,086 ======= ======= ====== ======= ADDITIONAL DATA Net earnings per common share -basic $0.27 $0.31 $0.18 $0.76 Net earnings per common share -diluted $0.27 $0.30 $0.17 $0.75 Dividends declared per common share $0.10 $0.10 $0.10 $0.30 Return on average assets 0.96% 1.08% 0.71% 0.92% Return on average shareholders' equity 9.03% 10.62% 6.92% 8.86% Interest income $84,684 $85,938 $90,559 $261,181 Tax equivalent adjustment 222 212 212 646 --- --- --- --- Interest income -tax equivalent 84,906 86,150 90,771 261,827 Interest expense 16,838 18,200 18,539 53,577 ------ ------ ------ ------ Net interest income -tax equivalent $68,068 $67,950 $72,232 $208,250 ======= ======= ======= ======== Net interest margin 4.59% 4.53% 4.89% 4.67% Net interest margin (fully tax equivalent) (1) 4.60% 4.54% 4.91% 4.68% Full-time equivalent employees (2) 1,535 1,511 1,466 2010 % Change -------- Linked Qtr. ----------- Interest income Loans, including fees 1.4% Investment securities Taxable (1.1%) Tax-exempt (2.0%) ------ Total investment securities interest (1.1%) Other earning assets (41.5%) ------- Total interest income (1.5%) Interest expense Deposits (5.6%) Short-term borrowings 47.1% Long-term borrowings (20.4%) Subordinated debentures and capital securities 0.9% --- Total interest expense (7.5%) ------ Net interest income 0.2% Provision for loan and lease losses - uncovered 2.1% Provision for loan and lease losses - covered 9.3% --- Net interest income after provision for loan and lease losses (4.2%) Noninterest income Service charges on deposit accounts (3.8%) Trust and wealth management fees (8.2%) Bankcard income 4.3% Net gains from sales of loans 481.2% Gains on sales of investment securities N/M FDIC loss sharing income 17.3% Accelerated discount on covered loans 27.5% (Loss) income on preferred securities N/M Other (36.0%) ------- Total noninterest income 10.9% Noninterest expenses Salaries and employee benefits (2.4%) Net occupancy (12.7%) Furniture and equipment (1.0%) Data processing 4.8% Marketing (23.1%) Communication 20.0% Professional services (13.5%) Debt extinguishment N/M State intangible tax (49.2%) FDIC assessments 11.3% Other (1.6%) ------ Total noninterest expenses 9.8% --- Income before income taxes (10.4%) Income tax expense (6.9%) ------ Net income (12.3%) Dividends on preferred stock N/M --- Income available to common shareholders (12.3%) ======= ADDITIONAL DATA Net earnings per common share - basic Net earnings per common share - diluted Dividends declared per common share Return on average assets Return on average shareholders' equity Interest income (1.5%) Tax equivalent adjustment 4.7% --- Interest income - tax equivalent (1.4%) Interest expense (7.5%) ------ Net interest income - tax equivalent 0.2% === Net interest margin Net interest margin (fully tax equivalent) (1) Full-time equivalent employees (2) (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. (2) Does not include associates from acquisitions that are currently in a temporary hire status. N/M = Not meaningful. FIRST FINANCIAL BANCORP. CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (Dollars in thousands, except per share) (Unaudited) 2009 ---- Fourth Third ------ ----- Quarter Quarter ------- ------- Interest income Loans, including fees $81,471 $46,811 Investment securities Taxable 6,422 6,241 Tax-exempt 320 352 --- --- Total investment securities interest 6,742 6,593 Other earning assets 5,132 1,311 ----- ----- Total interest income 93,345 54,715 Interest expense Deposits 17,207 11,490 Short-term borrowings 23 261 Long-term borrowings 2,611 1,977 Subordinated debentures and capital securities 322 323 --- --- Total interest expense 20,163 14,051 ------ ------ Net interest income 73,182 40,664 Provision for loan and lease losses 14,812 26,655 ------ ------ Net interest income after provision for loan and lease losses 58,370 14,009 Noninterest income Service charges on deposit accounts 5,886 5,408 Trust and wealth management fees 3,584 3,339 Bankcard income 1,869 1,379 Net gains from sales of loans 341 63 Gains on sales of investment securities 0 0 Gain on acquisition 0 342,494 Accelerated discount on covered loans 8,215 386 (Loss) income on preferred securities (138) 154 Other 4,392 1,213 ----- ----- Total noninterest income 24,149 354,436 Noninterest expenses Salaries and employee benefits 30,141 22,051 Net occupancy 7,290 3,442 Furniture and equipment 2,527 1,874 Data processing 890 973 Marketing 1,283 871 Communication 1,169 737 Professional services 2,605 1,220 State intangible tax 564 628 FDIC assessments 1,529 1,612 Other 13,609 12,893 Total noninterest expenses 61,607 46,301 Income before income taxes 20,912 322,144 Income tax expense 7,117 121,787 ----- ------- Net income 13,795 200,357 Dividends on preferred stock 1,000 1,000 ----- ----- Net income available to common shareholders $12,795 $199,357 ======= ======== ADDITIONAL DATA Net earnings per common share - basic $0.25 $3.91 Net earnings per common share - diluted $0.25 $3.87 Dividends declared per common share $0.10 $0.10 Return on average assets 0.80% 17.64% Return on average shareholders' equity 8.36% 166.45% Interest income $93,345 $54,715 Tax equivalent adjustment 295 300 --- --- Interest income - tax equivalent 93,640 55,015 Interest expense 20,163 14,051 ------ ------ Net interest income - tax equivalent $73,477 $40,964 ======= ======= Net interest margin 4.65% 3.90% Net interest margin (fully tax equivalent) (1) 4.67% 3.93% Full-time equivalent employees 1,390 1,150 2009 ---- Second First Full ------ ----- ---- Quarter Quarter Year ------- ------- ---- Interest income Loans, including fees $33,978 $33,657 $195,917 Investment securities Taxable 8,023 8,690 29,376 Tax-exempt 386 434 1,492 --- --- ----- Total investment securities interest 8,409 9,124 30,868 Other earning assets 0 0 6,443 --- --- ----- Total interest income 42,387 42,781 233,228 Interest expense Deposits 9,080 9,803 47,580 Short-term borrowings 527 507 1,318 Long-term borrowings 1,251 1,306 7,145 Subordinated debentures and capital securities 320 237 1,202 --- --- ----- Total interest expense 11,178 11,853 57,245 ------ ------ ------ Net interest income 31,209 30,928 175,983 Provision for loan and lease losses 10,358 4,259 56,084 ------ ----- ------ Net interest income after provision for loan and lease losses 20,851 26,669 119,899 Noninterest income Service charges on deposit accounts 4,289 4,079 19,662 Trust and wealth management fees 3,253 3,289 13,465 Bankcard income 1,422 1,291 5,961 Net gains from sales of loans 408 384 1,196 Gains on sales of investment securities 3,349 0 3,349 Gain on acquisition 0 0 342,494 Accelerated discount on covered loans 0 0 8,601 (Loss) income on preferred securities 112 11 139 Other 1,264 2,979 9,848 ----- ----- ----- Total noninterest income 14,097 12,033 404,715 Noninterest expenses Salaries and employee benefits 16,223 17,653 86,068 Net occupancy 2,653 2,817 16,202 Furniture and equipment 1,851 1,802 8,054 Data processing 794 818 3,475 Marketing 700 640 3,494 Communication 669 671 3,246 Professional services 1,254 953 6,032 State intangible tax 648 668 2,508 FDIC assessments 3,424 282 6,847 Other 4,580 3,630 34,712 ----- ----- ------ Total noninterest expenses 32,796 29,934 170,638 ------ ------ ------- Income before income taxes 2,152 8,768 353,976 Income tax expense 702 3,033 132,639 --- ----- ------- Net income 1,450 5,735 221,337 Dividends on preferred stock 1,000 578 3,578 ----- --- ----- Net income available to common shareholders $450 $5,157 $217,759 ==== ====== ======== ADDITIONAL DATA Net earnings per common share - basic $0.01 $0.14 $4.84 Net earnings per common share - diluted $0.01 $0.14 $4.78 Dividends declared per common share $0.10 $0.10 $0.40 Return on average assets 0.15% 0.62% 4.67% Return on average shareholders' equity 1.53% 6.63% 47.44% Interest income $42,387 $42,781 $233,228 Tax equivalent adjustment 307 363 1,265 --- --- ----- Interest income - tax equivalent 42,694 43,144 234,493 Interest expense 11,178 11,853 57,245 ------ ------ ------ Net interest income - tax equivalent $31,516 $31,291 $177,248 ======= ======= ======== Net interest margin 3.59% 3.61% 4.05% Net interest margin (fully tax equivalent) (1) 3.63% 3.65% 4.08% Full-time equivalent employees 1,048 1,063 (1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. N/M = Not meaningful. FIRST FINANCIAL BANCORP. CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) (Unaudited) Sep. 30, Jun. 30, Mar. 31, -------- -------- -------- 2010 2010 2010 ---- ---- ---- ASSETS Cash and due from banks $144,101 $166,604 $308,330 Interest-bearing deposits with other banks 280,457 675,891 416,619 Investment securities trading 0 0 0 Investment securities available-for-sale 616,175 503,404 430,519 Investment securities held-to-maturity 17,842 17,601 17,903 Other investments 86,509 86,509 87,029 Loans held for sale 19,075 11,946 3,243 Loans Commercial 763,449 749,522 763,084 Real estate - construction 178,914 197,112 216,289 Real estate - commercial 1,095,543 1,113,836 1,091,830 Real estate - residential 283,914 296,295 306,769 Installment 73,138 75,862 78,682 Home equity 341,288 332,928 330,973 Credit card 28,825 28,567 27,960 Lease financing 138 15 15 Total loans, excluding covered loans 2,765,209 2,794,137 2,815,602 Less Allowance for loan and lease losses 57,249 57,811 56,642 ------ ------ ------ Net loans -uncovered 2,707,960 2,736,326 2,758,960 Covered loans 1,609,584 1,717,632 1,833,349 Less Allowance for loan and lease losses 11,583 1,273 0 ------ ----- --- Net loans -covered 1,598,001 1,716,359 1,833,349 --------- --------- --------- Net loans 4,305,961 4,452,685 4,592,309 Premises and equipment 116,959 114,630 115,836 Goodwill 51,820 51,820 51,820 Other intangibles 6,049 6,614 7,058 FDIC indemnification asset 237,709 251,633 273,328 Accrued interest and other assets 271,843 244,298 244,902 ------- ------- ------- Total Assets $6,154,500 $6,583,635 $6,548,896 ========== ========== ========== LIABILITIES Deposits Interest-bearing $999,922 $1,135,970 $1,042,790 Savings 1,407,332 1,350,161 1,303,737 Time 1,930,652 2,042,824 2,135,683 --------- --------- --------- Total interest-bearing deposits 4,337,906 4,528,955 4,482,210 Noninterest-bearing 713,357 718,381 741,476 ------- ------- ------- Total deposits 5,051,263 5,247,336 5,223,686 Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 58,747 38,299 38,443 Federal Home Loan Bank 0 0 0 --- --- --- Total short-term borrowings 58,747 38,299 38,443 Long-term debt 129,224 384,775 394,404 Other long-term debt 20,620 20,620 20,620 Accrued interest and other liabilities 203,715 211,049 203,984 Total Liabilities 5,463,569 5,902,079 5,881,137 SHAREHOLDERS' EQUITY Preferred stock 0 0 0 Common stock 579,309 578,362 581,747 Retained earnings 301,777 292,004 280,030 Accumulated other comprehensive loss (9,106) (7,831) (9,091) Treasury stock, at cost (181,049) (180,979) (184,927) -------- -------- -------- Total Shareholders' Equity 690,931 681,556 667,759 ------- ------- ------- Total Liabilities and Shareholders' Equity $6,154,500 $6,583,635 $6,548,896 ========== ========== ========== Dec. 31, Sep. 30, -------- -------- 2009 2009 ---- ---- ASSETS Cash and due from banks $344,150 $243,924 Interest-bearing deposits with other banks 262,017 728,853 Investment securities trading 200 338 Investment securities available- for-sale 471,002 523,355 Investment securities held-to- maturity 18,115 17,928 Other investments 89,830 87,693 Loans held for sale 6,413 2,729 Loans Commercial 800,261 818,608 Real estate - construction 253,223 245,535 Real estate - commercial 1,079,628 1,037,121 Real estate - residential 321,047 331,678 Installment 82,989 86,940 Home equity 328,940 324,340 Credit card 29,027 27,713 Lease financing 14 19 Total loans, excluding covered loans 2,895,129 2,871,954 Less Allowance for loan and lease losses 59,311 55,770 ------ ------ Net loans - uncovered 2,835,818 2,816,184 Covered loans 1,934,740 2,046,882 Less Allowance for loan and lease losses 0 0 --- --- Net loans - covered 1,934,740 2,046,882 --------- --------- Net loans 4,770,558 4,863,066 Premises and equipment 107,351 106,401 Goodwill 51,820 51,820 Other intangibles 7,461 8,094 FDIC indemnification asset 287,407 287,756 Accrued interest and other assets 241,269 312,219 ------- ------- Total Assets $6,657,593 $7,234,176 ========== ========== LIABILITIES Deposits Interest-bearing $1,060,383 $1,105,450 Savings 1,231,081 1,135,308 Time 2,229,500 2,739,874 --------- --------- Total interest-bearing deposits 4,520,964 4,980,632 Noninterest-bearing 829,676 855,352 ------- ------- Total deposits 5,350,640 5,835,984 Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 37,430 35,763 Federal Home Loan Bank 0 65,000 --- ------ Total short-term borrowings 37,430 100,763 Long-term debt 404,716 410,356 Other long-term debt 20,620 20,620 Accrued interest and other liabilities 194,229 221,036 Total Liabilities 6,007,635 6,588,759 SHAREHOLDERS' EQUITY Preferred stock 79,195 78,271 Common stock 490,532 490,854 Retained earnings 276,119 268,401 Accumulated other comprehensive loss (10,487) (6,659) Treasury stock, at cost (185,401) (185,450) -------- -------- Total Shareholders' Equity 649,958 645,417 ------- ------- Total Liabilities and Shareholders' Equity $6,657,593 $7,234,176 ========== ========== % Change % Change -------- -------- Linked Comparable Qtr. Qtr. ------- ----------- ASSETS Cash and due from banks (13.5%) (40.9%) Interest-bearing deposits with other banks (58.5%) (61.5%) Investment securities trading N/M (100.0%) Investment securities available- for-sale 22.4% 17.7% Investment securities held-to- maturity 1.4% (0.5%) Other investments 0.0% (1.4%) Loans held for sale 59.7% 599.0% Loans Commercial 1.9% (6.7%) Real estate - construction (9.2%) (27.1%) Real estate - commercial (1.6%) 5.6% Real estate - residential (4.2%) (14.4%) Installment (3.6%) (15.9%) Home equity 2.5% 5.2% Credit card 0.9% 4.0% Lease financing 820.0% 626.3% ----- ----- Total loans, excluding covered loans (1.0%) (3.7%) Less Allowance for loan and lease losses (1.0%) 2.7% ------ --- Net loans - uncovered (1.0%) (3.8%) Covered loans (6.3%) (21.4%) Less Allowance for loan and lease losses 809.9% N/M ----- --- Net loans - covered (6.9%) (21.9%) ------ ------- Net loans (3.3%) (11.5%) Premises and equipment 2.0% 9.9% Goodwill 0.0% 0.0% Other intangibles (8.5%) (25.3%) FDIC indemnification asset (5.5%) (17.4%) Accrued interest and other assets 11.3% (12.9%) ---- ------- Total Assets (6.5%) (14.9%) ====== ======= LIABILITIES Deposits Interest-bearing (12.0%) (9.5%) Savings 4.2% 24.0% Time (5.5%) (29.5%) ------ ------- Total interest-bearing deposits (4.2%) (12.9%) Noninterest-bearing (0.7%) (16.6%) ------ ------- Total deposits (3.7%) (13.4%) Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 53.4% 64.3% Federal Home Loan Bank N/M (100.0%) --- -------- Total short-term borrowings 53.4% (41.7%) Long-term debt (66.4%) (68.5%) Other long-term debt 0.0% 0.0% Accrued interest and other liabilities (3.5%) (7.8%) ------ ------ Total Liabilities (7.4%) (17.1%) SHAREHOLDERS' EQUITY Preferred stock N/M (100.0%) Common stock 0.2% 18.0% Retained earnings 3.3% 12.4% Accumulated other comprehensive loss 16.3% 36.7% Treasury stock, at cost 0.0% (2.4%) --- ------ Total Shareholders' Equity 1.4% 7.1% --- --- Total Liabilities and Shareholders' Equity (6.5%) (14.9%) ====== ======= N/M = Not meaningful. FIRST FINANCIAL BANCORP. AVERAGE CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) (Unaudited) Quarterly Averages Sep. 30, Jun. 30, Mar. 31, -------- -------- -------- 2010 2010 2010 ---- ---- ---- ASSETS Cash and due from banks $185,322 $273,162 $336,333 Interest-bearing deposits with other banks 483,097 554,333 394,741 Investment securities 691,700 597,991 558,595 Loans held for sale 14,909 7,615 2,292 Loans Commercial 735,228 746,636 785,579 Real estate -construction 187,401 202,513 231,853 Real estate -commercial 1,135,547 1,110,562 1,079,577 Real estate -residential 295,917 301,880 309,104 Installment 71,739 77,299 79,437 Home equity 336,288 332,044 333,275 Credit card 28,664 28,052 28,430 Lease financing 71 15 15 Total loans, excluding covered loans 2,790,855 2,799,001 2,847,270 Less Allowance for loan and lease losses 60,871 60,430 59,891 ------ ------ ------ Net loans -uncovered 2,729,984 2,738,571 2,787,379 Covered loans 1,648,030 1,781,741 1,887,608 Less Allowance for loan and lease losses 882 14 0 --- --- --- Net loans -covered 1,647,148 1,781,727 1,887,608 Net loans 4,377,132 4,520,298 4,674,987 Premises and equipment 115,518 115,587 108,608 Goodwill 51,820 51,820 51,820 Other intangibles 6,384 6,848 7,431 FDIC indemnification asset 238,720 260,079 280,799 Accrued interest and other assets 243,877 233,288 231,935 ------- ------- ------- Total Assets $6,408,479 $6,621,021 $6,647,541 ========== ========== ========== LIABILITIES Deposits Interest-bearing $1,029,350 $1,139,001 $1,050,697 Savings 1,412,441 1,341,194 1,318,374 Time 2,007,138 2,090,776 2,175,400 --------- --------- --------- Total interest-bearing deposits 4,448,929 4,570,971 4,544,471 Noninterest-bearing 721,501 740,011 774,393 ------- ------- ------- Total deposits 5,170,430 5,310,982 5,318,864 Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 50,580 37,353 38,413 Federal Home Loan Bank 0 0 0 Other 0 0 0 --- --- --- Total short-term borrowings 50,580 37,353 38,413 Long-term debt 281,170 389,972 399,843 Other long-term debt 20,620 20,620 20,620 ------ ------ ------ Total borrowed funds 352,370 447,945 458,876 Accrued interest and other liabilities 201,567 191,043 190,234 Total Liabilities 5,724,367 5,949,970 5,967,974 SHAREHOLDERS' EQUITY Preferred stock 0 0 47,521 Common stock 578,810 580,299 549,428 Retained earnings 294,346 282,634 277,775 Accumulated other comprehensive loss (8,021) (8,320) (9,873) Treasury stock, at cost (181,023) (183,562) (185,284) -------- -------- -------- Total Shareholders' Equity 684,112 671,051 679,567 ------- ------- ------- Total Liabilities and Shareholders' Equity $6,408,479 $6,621,021 $6,647,541 ========== ========== ========== Quarterly Averages Dec. 31, Sep. 30, -------- -------- 2009 2009 ---- ---- ASSETS Cash and due from banks $274,601 $107,216 Interest-bearing deposits with other banks 447,999 136,210 Investment securities 608,952 575,697 Loans held for sale 2,936 2,629 Loans Commercial 839,456 855,996 Real estate - construction 256,915 261,601 Real estate - commercial 1,048,650 1,002,073 Real estate - residential 333,858 333,981 Installment 87,825 87,506 Home equity 332,169 315,629 Credit card 28,025 27,292 Lease financing 16 22 Total loans, excluding covered loans 2,926,914 2,884,100 Less Allowance for loan and lease losses 54,164 42,034 ------ ------ Net loans -uncovered 2,872,750 2,842,066 Covered loans 1,973,327 464,989 Less Allowance for loan and lease losses 0 0 --- --- Net loans - covered 1,973,327 464,989 Net loans 4,846,077 3,307,055 Premises and equipment 106,999 91,252 Goodwill 51,820 42,196 Other intangibles 7,885 2,553 FDIC indemnification asset 281,662 71,330 Accrued interest and other assets 211,462 169,602 ------- ------- Total Assets $6,840,393 $4,505,740 ========== ========== LIABILITIES Deposits Interest-bearing $1,093,735 $735,258 Savings 1,233,715 838,381 Time 2,382,717 1,480,587 --------- --------- Total interest-bearing deposits 4,710,167 3,054,226 Noninterest-bearing 840,314 554,471 ------- ------- Total deposits 5,550,481 3,608,697 Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 41,456 55,197 Federal Home Loan Bank 1,096 72,855 Other 0 22,826 --- ------ Total short-term borrowings 42,552 150,878 Long-term debt 408,744 205,908 Other long-term debt 20,620 20,620 ------ ------ Total borrowed funds 471,916 377,406 Accrued interest and other liabilities 163,365 42,087 Total Liabilities 6,185,762 4,028,190 SHAREHOLDERS' EQUITY Preferred stock 78,573 78,221 Common stock 490,889 490,596 Retained earnings 276,950 103,440 Accumulated other comprehensive loss (6,372) (9,290) Treasury stock, at cost (185,409) (185,417) -------- -------- Total Shareholders' Equity 654,631 477,550 ------- ------- Total Liabilities and Shareholders' Equity $6,840,393 $4,505,740 ========== ========== Year-to-Date Averages Sep. 30, 2010 2009 ---- ---- ASSETS Cash and due from banks $264,386 $86,098 Interest-bearing deposits with other banks 477,714 51,177 Investment securities 616,583 687,689 Loans held for sale 8,318 4,543 Loans Commercial 755,630 841,638 Real estate - construction 207,093 254,015 Real estate - commercial 1,108,767 910,680 Real estate - residential 302,252 351,747 Installment 76,130 90,721 Home equity 333,880 303,032 Credit card 28,383 26,839 Lease financing 34 36 Total loans, excluding covered loans 2,812,169 2,778,708 Less Allowance for loan and lease losses 60,401 38,640 ------ ------ Net loans - uncovered 2,751,768 2,740,068 Covered loans 1,771,582 156,700 Less Allowance for loan and lease losses 302 0 --- --- Net loans - covered 1,771,280 156,700 Net loans 4,523,048 2,896,768 Premises and equipment 113,263 87,229 Goodwill 51,820 32,957 Other intangibles 6,884 1,347 FDIC indemnification asset 259,712 24,038 Accrued interest and other assets 236,410 153,390 ------- ------- Total Assets $6,558,138 $4,025,236 ========== ========== LIABILITIES Deposits Interest-bearing $1,072,938 $673,517 Savings 1,357,681 701,228 Time 2,090,488 1,254,048 --------- --------- Total interest-bearing deposits 4,521,107 2,628,793 Noninterest-bearing 745,108 462,084 ------- ------- Total deposits 5,266,215 3,090,877 Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 42,160 119,548 Federal Home Loan Bank 0 152,900 Other 0 39,458 --- ------ Total short-term borrowings 42,160 311,906 Long-term debt 356,560 162,377 Other long-term debt 20,620 20,620 ------ ------ Total borrowed funds 419,340 494,903 Accrued interest and other liabilities 194,323 36,208 Total Liabilities 5,879,878 3,621,988 SHAREHOLDERS' EQUITY Preferred stock 15,666 78,129 Common stock 569,620 434,746 Retained earnings 284,979 86,447 Accumulated other comprehensive loss (8,731) (9,296) Treasury stock, at cost (183,274) (186,778) -------- -------- Total Shareholders' Equity 678,260 403,248 ------- ------- Total Liabilities and Shareholders' Equity $6,558,138 $4,025,236 ========== ========== FIRST FINANCIAL BANCORP. NET INTEREST MARGIN RATE/VOLUME ANALYSIS (Dollars in thousands) (Unaudited) Quarterly Averages ------------------ Sep. 30, 2010 Jun. 30, 2010 Balance Yield Balance Yield ------- ----- ------- ----- Earning assets Investment securities $691,700 3.23% $597,991 3.82% Interest-bearing deposits with other banks 483,097 0.33% 554,333 0.33% Gross loans, including covered loans and indemnification asset (2) 4,692,514 6.65% 4,848,436 6.60% ---- ---- Total earning assets 5,867,311 5.73% 6,000,760 5.74% Nonearning assets Allowance for loan and lease losses (61,753) (60,444) Cash and due from banks 185,322 273,162 Accrued interest and other assets 417,599 407,543 ------- ------- Total assets $6,408,479 $6,621,021 ========== ========== Interest-bearing liabilities Total interest-bearing deposits $4,448,929 1.29% $4,570,971 1.34% Borrowed funds Short-term borrowings 50,580 0.20% 37,353 0.18% Long-term debt 281,170 2.87% 389,972 2.63% Other long-term debt 20,620 6.20% 20,620 6.21% ------ ---- ------ ---- Total borrowed funds 352,370 2.68% 447,945 2.59% ------- ---- ------- ---- Total interest-bearing liabilities 4,801,299 1.39% 5,018,916 1.45% Noninterest-bearing liabilities Noninterest-bearing demand deposits 721,501 740,011 Other liabilities 201,567 191,043 Shareholders' equity 684,112 671,051 Total liabilities & shareholders' equity $6,408,479 $6,621,021 ========== ========== Net interest income (1) $67,846 $67,738 ======= ======= Net interest spread (1) 4.34% 4.29% ==== ==== Net interest margin (1) 4.59% 4.53% ==== ==== Quarterly Averages ------------------ Sep. 30, 2009 Balance Yield ------- ----- Earning assets Investment securities $575,697 4.54% Interest-bearing deposits with other banks 136,210 0.25% Gross loans, including covered loans and indemnification asset (2) 3,423,048 5.58% ---- Total earning assets 4,134,955 5.25% Nonearning assets Allowance for loan and lease losses (42,034) Cash and due from banks 107,216 Accrued interest and other assets 305,603 ------- Total assets $4,505,740 ========== Interest-bearing liabilities Total interest-bearing deposits $3,054,226 1.49% Borrowed funds Short-term borrowings 150,878 0.69% Long-term debt 205,908 3.81% Other long-term debt 20,620 6.21% ------ ---- Total borrowed funds 377,406 2.69% ------- ---- Total interest-bearing liabilities 3,431,632 1.62% Noninterest-bearing liabilities Noninterest-bearing demand deposits 554,471 Other liabilities 42,087 Shareholders' equity 477,550 Total liabilities & shareholders' equity $4,505,740 ========== Net interest income (1) $40,664 ======= Net interest spread (1) 3.63% ==== Net interest margin (1) 3.90% ==== Year-to-Date Averages --------------------- Sep. 30, 2010 Sep. 30, 2009 Balance Yield Balance Yield ------- ----- ------- ----- Earning assets Investment securities $616,583 3.67% $687,689 4.69% Interest-bearing deposits with other banks 477,714 0.33% 51,177 0.25% Gross loans, including covered loans and indemnification asset (2) 4,851,781 6.70% 2,963,989 5.22% ---- ---- Total earning assets 5,946,078 5.87% 3,702,855 5.05% Nonearning assets Allowance for loan and lease losses (60,703) (38,640) Cash and due from banks 264,386 86,098 Accrued interest and other assets 408,377 274,923 ------- ------- Total assets $6,558,138 $4,025,236 ========== ========== Interest-bearing liabilities Total interest-bearing deposits $4,521,107 1.34% $2,628,793 1.54% Borrowed funds Short-term borrowings 42,160 0.19% 311,906 0.56% Long-term debt 356,560 2.68% 162,377 3.73% Other long-term debt 20,620 6.20% 20,620 5.71% ------ ---- ------ ---- Total borrowed funds 419,340 2.60% 494,903 1.81% ------- ---- ------- ---- Total interest-bearing liabilities 4,940,447 1.45% 3,123,696 1.59% Noninterest-bearing liabilities Noninterest-bearing demand deposits 745,108 462,084 Other liabilities 194,323 36,208 Shareholders' equity 678,260 403,248 Total liabilities & shareholders' equity $6,558,138 $4,025,236 ========== ========== Net interest income (1) $207,604 $102,801 ======== ======== Net interest spread (1) 4.42% 3.46% ==== ==== Net interest margin (1) 4.67% 3.71% ==== ==== (1) Not tax equivalent. (2) Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans. FIRST FINANCIAL BANCORP. NET INTEREST MARGIN RATE/VOLUME ANALYSIS(1) (Dollars in thousands) (Unaudited) Linked Qtr. Income Variance ------------------ Rate Volume Total ---- ------ ----- Earning assets Investment securities $(878) $815 $(63) Interest-bearing deposits with other banks (10) (53) (63) Gross loans, including covered loans and indemnification asset (2) 602 (1,730) (1,128) ------ Total earning assets (286) (968) (1,254) Interest-bearing liabilities Total interest-bearing deposits $(616) $(235) $(851) Borrowed funds Short-term borrowings 1 7 8 Long-term debt 234 (756) (522) Other long-term debt (1) 4 3 --- Total borrowed funds 234 (745) (511) --- ---- ---- Total interest-bearing liabilities (382) (980) (1,362) Net interest income (1) $96 $12 $108 === === ==== Comparable Qtr. Income Variance ---------------------- Rate Volume Total ---- ------ ----- Earning assets Investment securities $(1,911) $944 $(967) Interest-bearing deposits with other banks 112 284 396 Gross loans, including covered loans and indemnification asset (2) 9,260 21,280 30,540 ----- ------ ------ Total earning assets 7,461 22,508 29,969 Interest-bearing liabilities Total interest-bearing deposits $(1,565) $4,532 $2,967 Borrowed funds Short-term borrowings (186) (50) (236) Long-term debt (487) 544 57 Other long-term debt (1) 0 (1) --- --- --- Total borrowed funds (674) 494 (180) ---- --- ---- Total interest-bearing liabilities (2,239) 5,026 2,787 Net interest income (1) $9,700 $17,482 $27,182 ====== ======= ======= Year-to-Date Income Variance ------------------- Rate Volume Total ---- ------ ----- Earning assets Investment securities $(5,226) $(1,954) $(7,180) Interest-bearing deposits with other banks 128 1,068 1,196 Gross loans, including covered loans and indemnification asset (2) 32,717 94,565 127,282 ------ ------ ------- Total earning assets 27,619 93,679 121,298 Interest-bearing liabilities Total interest-bearing deposits $(3,968) $19,008 $15,040 Borrowed funds Short-term borrowings (844) (390) (1,234) Long-term debt (1,279) 3,892 2,613 Other long-term debt 76 0 76 --- --- Total borrowed funds (2,047) 3,502 1,455 ------ ----- ----- Total interest-bearing liabilities (6,015) 22,510 16,495 Net interest income (1) $33,634 $71,169 $104,803 ======= ======= ======== (1) Not tax equivalent. (2) Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans. FIRST FINANCIAL BANCORP. CREDIT QUALITY (excluding covered assets) (Dollars in thousands) (Unaudited) Sep. Jun. Mar. 30, 30, 31, 2010 2010 2010 ---- ---- ---- ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY Balance at beginning of period $57,811 $56,642 $59,311 Provision for uncovered loan and lease losses 6,287 6,158 11,378 Gross charge-offs Commercial 762 1,156 6,275 Real estate - construction 3,607 2,386 2,126 Real estate - commercial 2,013 359 3,932 Real estate - residential 717 246 534 Installment 205 304 414 Home equity 389 580 684 All other 431 426 520 Total gross charge-offs 8,124 5,457 14,485 Recoveries Commercial 334 120 109 Real estate - construction 0 24 0 Real estate - commercial 728 99 12 Real estate - residential 11 4 3 Installment 116 127 160 Home equity 21 10 87 All other 65 84 67 Total recoveries 1,275 468 438 Total net charge-offs 6,849 4,989 14,047 ----- ----- ------ Ending allowance for uncovered loan and lease losses $57,249 $57,811 $56,642 ======= ======= ======= NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) Commercial 0.23% 0.56% 3.18% Real estate - construction 7.64% 4.68% 3.72% Real estate - commercial 0.45% 0.09% 1.47% Real estate - residential 0.95% 0.32% 0.70% Installment 0.49% 0.92% 1.30% Home equity 0.43% 0.69% 0.73% All other 5.05% 4.89% 6.46% Total net charge-offs 0.97% 0.71% 2.00% ==== ==== ==== COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS Nonaccrual loans Commercial $17,320 $12,874 $21,572 Real estate - construction 13,454 18,890 17,710 Real estate - commercial 27,945 28,272 21,196 Real estate - residential 4,801 4,571 4,116 Installment 279 267 365 Home equity 2,358 1,797 1,910 ----- ----- ----- Total nonaccrual loans 66,157 66,671 66,869 Restructured loans 13,365 12,752 7,584 Total nonperforming loans 79,522 79,423 74,453 Other real estate owned (OREO) 18,305 16,818 18,087 ------ ------ ------ Total nonperforming assets 97,827 96,241 92,540 Accruing loans past due 90 days or more 233 276 286 --- --- --- Total underperforming assets $98,060 $96,517 $92,826 ======= ======= ======= Total classified assets $212,552 $201,859 $171,112 ======== ======== ======== CREDIT QUALITY RATIOS (excluding covered assets) Allowance for loan and lease losses to Nonaccrual loans 86.54% 86.71% 84.71% Nonperforming loans 71.99% 72.79% 76.08% Total ending loans 2.07% 2.07% 2.01% Nonperforming loans to total loans 2.88% 2.84% 2.65% Nonperforming assets to Ending loans, plus OREO 3.51% 3.42% 3.27% Total assets 1.59% 1.46% 1.41% Dec. Sep. 31, 30, 2009 2009 ---- ---- ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY Balance at beginning of period $55,770 $38,649 Provision for uncovered loan and lease losses 14,812 26,655 Gross charge-offs Commercial 1,143 2,924 Real estate - construction 6,788 4,552 Real estate - commercial 1,854 927 Real estate - residential 262 471 Installment 449 315 Home equity 1,105 382 All other 454 492 Total gross charge-offs 12,055 10,063 Recoveries Commercial 148 91 Real estate - construction 0 0 Real estate - commercial 360 167 Real estate - residential 3 2 Installment 195 205 Home equity 6 9 All other 72 55 Total recoveries 784 529 Total net charge-offs 11,271 9,534 ------ ----- Ending allowance for uncovered loan and lease losses $59,311 $55,770 ======= ======= NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) Commercial 0.47% 1.31% Real estate - construction 10.48% 6.90% Real estate - commercial 0.57% 0.30% Real estate - residential 0.31% 0.56% Installment 1.15% 0.50% Home equity 1.31% 0.47% All other 5.40% 6.35% Total net charge-offs 1.53% 1.31% ==== ==== COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS Nonaccrual loans Commercial $13,756 $13,244 Real estate - construction 35,604 26,575 Real estate - commercial 15,320 12,407 Real estate - residential 3,993 5,253 Installment 660 493 Home equity 2,324 2,534 ----- ----- Total nonaccrual loans 71,657 60,506 Restructured loans 6,125 3,102 Total nonperforming loans 77,782 63,608 Other real estate owned (OREO) 4,145 4,301 ----- ----- Total nonperforming assets 81,927 67,909 Accruing loans past due 90 days or more 417 308 --- --- Total underperforming assets $82,344 $68,217 ======= ======= Total classified assets $163,451 $137,288 ======== ======== CREDIT QUALITY RATIOS (excluding covered assets) Allowance for loan and lease losses to Nonaccrual loans 82.77% 92.17% Nonperforming loans 76.25% 87.68% Total ending loans 2.05% 1.94% Nonperforming loans to total loans 2.69% 2.21% Nonperforming assets to Ending loans, plus OREO 2.83% 2.36% Total assets 1.23% 0.94% Nine months ended Sep. Sep. 30, 30, 2010 2009 ---- ---- ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY Balance at beginning of period 59,311 35,873 Provision for uncovered loan and lease losses 23,823 41,272 Gross charge-offs Commercial 8,193 10,152 Real estate - construction 8,119 5,892 Real estate - commercial 6,304 2,660 Real estate - residential 1,497 1,053 Installment 923 1,019 Home equity 1,653 932 All other 1,377 1,186 ----- ----- Total gross charge-offs 28,066 22,894 Recoveries Commercial 563 484 Real estate - construction 24 0 Real estate - commercial 839 197 Real estate - residential 18 24 Installment 403 662 Home equity 118 10 All other 216 142 Total recoveries 2,181 1,519 Total net charge-offs 25,885 21,375 ------ ------ Ending allowance for uncovered loan and lease losses $57,249 $55,770 ======= ======= NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) Commercial 1.35% 1.54% Real estate - construction 5.23% 3.10% Real estate - commercial 0.66% 0.36% Real estate - residential 0.65% 0.39% Installment 0.91% 0.53% Home equity 0.61% 0.41% All other 5.46% 5.19% Total net charge-offs 1.23% 1.03% ==== ==== COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS Nonaccrual loans Commercial $17,320 $13,244 Real estate - construction 13,454 26,575 Real estate - commercial 27,945 12,407 Real estate - residential 4,801 5,253 Installment 279 493 Home equity 2,358 2,534 ----- ----- Total nonaccrual loans 66,157 60,506 Restructured loans 13,365 3,102 ----- Total nonperforming loans 79,522 63,608 Other real estate owned (OREO) 18,305 4,301 ------ ----- Total nonperforming assets 97,827 67,909 Accruing loans past due 90 days or more 233 308 --- --- Total underperforming assets $98,060 $68,217 ======= ======= Total classified assets $212,552 $137,288 ======== ======== CREDIT QUALITY RATIOS (excluding covered assets) Allowance for loan and lease losses to Nonaccrual loans 86.54% 92.17% Nonperforming loans 71.99% 87.68% Total ending loans 2.07% 1.94% Nonperforming loans to total loans 2.88% 2.21% Nonperforming assets to Ending loans, plus OREO 3.51% 2.36% Total assets 1.59% 0.94% FIRST FINANCIAL BANCORP. CAPITAL ADEQUACY (Dollars in thousands, except per share) (Unaudited) Sep. 30, Jun. 30, Mar. 31, 2010 2010 2010 ---- ---- ---- PER COMMON SHARE Market Price High $17.10 $21.32 $19.00 Low $14.19 $14.95 $13.89 Close $16.68 $14.95 $17.78 Average common shares outstanding - basic 57,570,709 57,539,901 55,161,551 Average common shares outstanding - diluted 58,531,505 58,604,039 56,114,424 Ending common shares outstanding 58,057,934 58,062,655 57,833,969 REGULATORY CAPITAL Preliminary Tier 1 Capital $670,121 $658,623 $645,467 Tier 1 Ratio 18.64% 18.15% 17.37% Total Capital $715,938 $704,752 $692,630 Total Capital Ratio 19.91% 19.42% 18.64% Total Capital in excess of minimum requirement $428,314 $414,434 $395,408 Total Risk-Weighted Assets $3,595,296 $3,628,978 $3,715,280 Leverage Ratio 10.50% 9.99% 9.76% OTHER CAPITAL RATIOS Ending shareholders' equity to ending assets 11.23% 10.35% 10.20% Ending common shareholders' equity to ending assets 11.23% 10.35% 10.20% Ending tangible shareholders' equity to ending tangible assets 10.38% 9.55% 9.38% Ending tangible common shareholders' equity to ending tangible assets 10.38% 9.55% 9.38% Average shareholders' equity to average assets 10.68% 10.14% 10.22% Average common shareholders' equity to average assets 10.68% 10.14% 9.51% Average tangible shareholders' equity to average tangible assets 9.86% 9.33% 9.42% Average tangible common shareholders' equity to average tangible assets 9.86% 9.33% 8.70% Dec. 31, Sep. 30, 2009 2009 ---- ---- PER COMMON SHARE Market Price High $15.48 $12.07 Low $11.83 $7.52 Close $14.56 $12.05 Average common shares outstanding - basic 51,030,661 51,027,887 Average common shares outstanding - diluted 51,653,562 51,457,189 Ending common shares outstanding 51,433,821 51,431,422 REGULATORY CAPITAL Tier 1 Capital $628,982 $619,867 Tier 1 Ratio 16.11% 15.46% Total Capital $678,024 $670,243 Total Capital Ratio 17.37% 16.71% Total Capital in excess of minimum requirement $365,739 $349,404 Total Risk-Weighted Assets $3,903,566 $4,010,482 Leverage Ratio 9.24% 13.86% OTHER CAPITAL RATIOS Ending shareholders' equity to ending assets 9.76% 8.92% Ending common shareholders' equity to ending assets 8.57% 7.84% Ending tangible shareholders' equity to ending tangible assets 8.95% 8.16% Ending tangible common shareholders' equity to ending tangible assets 7.75% 7.07% Average shareholders' equity to average assets 9.57% 10.60% Average common shareholders' equity to average assets 8.42% 8.86% Average tangible shareholders' equity to average tangible assets 8.78% 9.39% Average tangible common shareholders' equity to average tangible assets 7.62% 7.63% Nine months ended, Sep. 30, Sep. 30, 2010 2009 ---- ---- PER COMMON SHARE Market Price High $21.32 $12.10 Low $13.89 $5.58 Close $16.68 $12.05 Average common shares outstanding - basic 56,765,933 43,005,983 Average common shares outstanding - diluted 57,758,906 43,502,561 Ending common shares outstanding 58,057,934 51,431,422 REGULATORY CAPITAL Preliminary Tier 1 Capital $670,121 $619,867 Tier 1 Ratio 18.64% 15.46% Total Capital $715,938 $670,243 Total Capital Ratio 19.91% 16.71% Total Capital in excess of minimum requirement $428,314 $349,404 Total Risk-Weighted Assets $3,595,296 $4,010,482 Leverage Ratio 10.50% 13.86% OTHER CAPITAL RATIOS Ending shareholders' equity to ending assets 11.23% 8.92% Ending common shareholders' equity to ending assets 11.23% 7.84% Ending tangible shareholders' equity to ending tangible assets 10.38% 8.16% Ending tangible common shareholders' equity to ending tangible assets 10.38% 7.07% Average shareholders' equity to average assets 10.34% 10.02% Average common shareholders' equity to average assets 10.10% 8.08% Average tangible shareholders' equity to average tangible assets 9.54% 8.66% Average tangible common shareholders' equity to average tangible assets 9.30% 6.69%

First Financial Bancorp

CONTACT: Investors/Analysts: Kenneth Lovik, Vice President, Investor
Relations and Corporate Development, [phone],
[e-mail], First Vice President, Director of
Communications, [phone], [e-mail]

Web Site: http://www.bankatfirst.com/