EX-99.1 2 a8k1q18earningsreleaseex991.htm EXHIBIT 99.1
EXHIBIT 99.1
First Financial Bancorp Announces First Quarter 2018 Results
First Quarter 2018 Earnings per Diluted Share Increased 26% from First Quarter 2017
Cincinnati, Ohio - April 19, 2018 - First Financial Bancorp. (Nasdaq: FFBC) (“First Financial” or the “Company”) announced financial results for the first quarter 2018. For the three months ended March 31, 2018, the Company reported net income of $30.5 million, or $0.49 per diluted common share. These results compare to net income of $24.8 million, or $0.40 per diluted common share, for the fourth quarter of 2017 and $24.4 million, or $0.39 per diluted common share, for the first quarter of 2017.
Return on average assets for the first quarter of 2018 was 1.40% while return on average tangible common equity was 17.17%. These compare to a return on average assets of 1.13% and return on average tangible common equity of 13.85% in the fourth quarter of 2017 and a return on average assets of 1.18% and a return on average tangible common equity of 14.98% in the first quarter of 2017.
First quarter 2018 highlights include:

• | Reported net income of $0.49 per diluted common share, 1.40% return on average assets and 17.17% return on average tangible common equity

◦ | Adjusted net income of $0.52 per share, 1.49% return on average assets and 18.24% return on avergage tangible common equity as detailed in the accompanying slide presentation

• | Net interest income of $75.8 million, a $0.2 million increase compared to the linked quarter

◦ | Net interest margin increased 5 basis points from the linked quarter to 3.80% on a GAAP basis, 3.84% on a fully tax equivalent basis

• | Noninterest expenses of $52.3 million, or $49.9 million as adjusted

◦ | Efficiency ratio of 56.4% for the first quarter; 53.8% as adjusted

• | Loan balances increased $88.8 million, or 6.0% on an annualized basis compared to the linked quarter

• | Stable credit performance with provision expense of $2.3 million; annualized net charge-offs of 13 basis points as a percentage of average loans

Full detail of the Company’s first quarter performance is provided in the accompanying financial statements and slide presentation, which also includes a reconciliation of adjusted financial results. First quarter 2018 financial highlights for MainSource Financial Group, Inc. are also included in the accompanying slide presentation.
Claude Davis, Executive Chairman, commented, “We are extremely pleased with our strong first quarter performance, representing our 110th consecutive quarter of profitability and top-quartile level returns. We are also excited about our recent merger with MainSource which closed on April 1st. We welcome
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our new colleagues from MainSource and together look forward to building an even stronger company going forward."
Archie Brown, President and Chief Executive Officer, remarked, "I echo Claude's excitement and am pleased with the financial performance of the Company during the first quarter. I am also looking forward to the opportunity to maximize synergies between two community-focused financial institutions that have already demonstrated the capability to independently produce industry-leading returns. As we complete our transition into a larger bank with greater scale and capabilities, we remain steadfast in our commitment to providing superior service and exceeding expectations for our clients, communities and shareholders."
Teleconference / Webcast Information
First Financial’s executive management will host a conference call to discuss the Company’s financial and operating results on Friday, April 20, 2018 at 8:30 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (877) 506-6873 (U.S. toll free), (855) 669-9657 (Canada toll free) or +1 (412) 380-2003 (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 www.bankatfirst.com. A replay of the conference call will be available beginning one hour after the completion of the live call at (877) 344-7529 (U.S. toll free), (855) 669-9658 (Canada toll free) and +1 (412) 317-0088 (International); conference number 10118954. The webcast will be archived on the Investor Relations section of the Company’s website for 12 months.
Press Release and Additional Information on Website
This press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com.
About First Financial Bancorp.
First Financial Bancorp. is a Cincinnati, Ohio based bank holding company. As of March 31, 2018, the Company had $8.9 billion in assets, $6.1 billion in loans, $7.0 billion in deposits and $940.0 million in shareholders’ equity. The Company’s subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its four lines of business: Commercial and Private Banking, Retail Banking, Investment Commercial Real Estate and Commercial Finance. These business units provide traditional banking services to business and retail clients. Commercial and Private Banking includes First Financial Wealth Management, which provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.6 billion in assets under management as of March 31, 2018. The Company’s primary operating markets are located in Ohio, Indiana and Kentucky where it operated 95 banking centers as of March 31, 2018, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis. Additional information about the Company, including its products, services and banking locations is available at www.bankatfirst.com.
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Forward-Looking Statement
Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ‘‘believes,’’ ‘‘anticipates,’’ “likely,” “expected,” “estimated,” ‘‘intends’’ and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.
As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation: (i) economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company’s business; (ii) the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; (iii) management’s ability to effectively execute its business plans; (iv) mergers and acquisitions, including costs or difficulties related to the integration of acquired companies; (v) the possibility that any of the anticipated benefits of the Company’s recent merger with MainSource Financial Group, Inc. will not be realized or will not be realized within the expected time period, or that integration of MainSource's operations with those of the Company will be materially delayed or will be more costly or difficult than expected; (vi) the effect of changes in accounting policies and practices; (vii) changes in consumer spending, borrowing and saving and changes in unemployment; (viii) changes in customers’ performance and creditworthiness; and (ix) the costs and effects of litigation and of unexpected or adverse outcomes in such litigation. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Form 10-K for the year ended December 31, 2017, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov.
All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, the Company does not assume any obligation to update any forward-looking statement.
Contact Information
Investors/Analysts Media
Jamie Anderson Lynda Crossan
Chief Financial Officer Marketing Director
(513) 887-5400 (513) 979-5817
InvestorRelations@bankatfirst.com Lynda.Crossan@bankatfirst.com
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Selected Financial Information
March 31, 2018
(unaudited)

Contents | Page
Consolidated Financial Highlights | 2
Consolidated Quarterly Statements of Income | 3
Consolidated Statements of Condition | 4
Average Consolidated Statements of Condition | 5
Net Interest Margin Rate / Volume Analysis | 6
Credit Quality | 7
Capital Adequacy | 8

FIRST FINANCIAL BANCORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended,
| Mar. 31, |  | Dec. 31, |  | Sep. 30, |  | Jun. 30, |  | Mar. 31,
| 2018 |  | 2017 |  | 2017 |  | 2017 |  | 2017
RESULTS OF OPERATIONS |  |  |  |  |  |  |  |  |
Net income | $ | 30,506 |  |  | $ | 24,811 |  |  | $ | 24,826 |  |  | $ | 22,736 |  |  | $ | 24,414 |
Net earnings per share - basic | $ | 0.49 |  |  | $ | 0.40 |  |  | $ | 0.40 |  |  | $ | 0.37 |  |  | $ | 0.40 |
Net earnings per share - diluted | $ | 0.49 |  |  | $ | 0.40 |  |  | $ | 0.40 |  |  | $ | 0.37 |  |  | $ | 0.39 |
Dividends declared per share | $ | 0.19 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |
KEY FINANCIAL RATIOS |  |  |  |  |  |  |  |  |
Return on average assets | 1.40 | % |  | 1.13 | % |  | 1.13 | % |  | 1.06 | % |  | 1.18 | %
Return on average shareholders' equity | 13.31 | % |  | 10.70 | % |  | 10.85 | % |  | 10.25 | % |  | 11.36 | %
Return on average tangible shareholders' equity | 17.17 | % |  | 13.85 | % |  | 14.10 | % |  | 13.42 | % |  | 14.98 | %
Net interest margin | 3.80 | % |  | 3.75 | % |  | 3.50 | % |  | 3.50 | % |  | 3.63 | %
Net interest margin (fully tax equivalent) (1) | 3.84 | % |  | 3.82 | % |  | 3.57 | % |  | 3.56 | % |  | 3.70 | %
Ending shareholders' equity as a percent of ending assets | 10.56 | % |  | 10.46 | % |  | 10.44 | % |  | 10.31 | % |  | 10.32 | %
Ending tangible shareholders' equity as a percent of: |  |  |  |  |  |  |  |  |
Ending tangible assets | 8.41 | % |  | 8.30 | % |  | 8.25 | % |  | 8.09 | % |  | 8.05 | %
Risk-weighted assets | 10.09 | % |  | 10.15 | % |  | 9.95 | % |  | 9.92 | % |  | 9.90 | %
Average shareholders' equity as a percent of average assets | 10.53 | % |  | 10.54 | % |  | 10.42 | % |  | 10.36 | % |  | 10.36 | %
Average tangible shareholders' equity as a percent of |  |  |  |  |  |  |  |  |
average tangible assets | 8.36 | % |  | 8.34 | % |  | 8.21 | % |  | 8.12 | % |  | 8.06 | %
Book value per share | $ | 15.11 |  |  | $ | 14.99 |  |  | $ | 14.74 |  |  | $ | 14.45 |  |  | $ | 14.16 |
Tangible book value per share | $ | 11.75 |  |  | $ | 11.62 |  |  | $ | 11.36 |  |  | $ | 11.07 |  |  | $ | 10.78 |
Common equity tier 1 ratio (2) | 10.77 | % |  | 10.63 | % |  | 10.53 | % |  | 10.54 | % |  | 10.59 | %
Tier 1 ratio (2) | 10.77 | % |  | 10.63 | % |  | 10.53 | % |  | 10.54 | % |  | 10.59 | %
Total capital ratio (2) | 13.17 | % |  | 13.07 | % |  | 12.98 | % |  | 13.05 | % |  | 13.19 | %
Leverage ratio (2) | 9.00 | % |  | 8.84 | % |  | 8.74 | % |  | 8.69 | % |  | 8.69 | %
AVERAGE BALANCE SHEET ITEMS |  |  |  |  |  |  |  |  |
Loans (3) | $ | 6,016,492 |  |  | $ | 5,952,290 |  |  | $ | 5,902,053 |  |  | $ | 5,789,610 |  |  | $ | 5,736,513 |
FDIC indemnification asset | 1,502 |  |  | 7,413 |  |  | 8,932 |  |  | 10,327 |  |  | 11,520 |
Investment securities | 2,042,781 |  |  | 2,020,040 |  |  | 2,041,785 |  |  | 2,035,334 |  |  | 1,906,699 |
Interest-bearing deposits with other banks | 27,073 |  |  | 25,357 |  |  | 37,199 |  |  | 20,293 |  |  | 40,985 |
Total earning assets | $ | 8,087,848 |  |  | $ | 8,005,100 |  |  | $ | 7,989,969 |  |  | $ | 7,855,564 |  |  | $ | 7,695,717 |
Total assets | $ | 8,830,176 |  |  | $ | 8,731,956 |  |  | $ | 8,716,917 |  |  | $ | 8,582,961 |  |  | $ | 8,409,071 |
Noninterest-bearing deposits | $ | 1,570,572 |  |  | $ | 1,637,228 |  |  | $ | 1,510,032 |  |  | $ | 1,513,995 |  |  | $ | 1,499,097 |
Interest-bearing deposits | 5,332,740 |  |  | 5,202,412 |  |  | 5,170,365 |  |  | 5,056,223 |  |  | 4,942,766 |
Total deposits | $ | 6,903,312 |  |  | $ | 6,839,640 |  |  | $ | 6,680,397 |  |  | $ | 6,570,218 |  |  | $ | 6,441,863 |
Borrowings | $ | 866,848 |  |  | $ | 842,211 |  |  | $ | 999,818 |  |  | $ | 995,132 |  |  | $ | 968,326 |
Shareholders' equity | $ | 929,474 |  |  | $ | 920,194 |  |  | $ | 908,057 |  |  | $ | 889,604 |  |  | $ | 871,215 |
CREDIT QUALITY RATIOS |  |  |  |  |  |  |  |
Allowance to ending loans | 0.89 | % |  | 0.90 | % |  | 0.91 | % |  | 0.93 | % |  | 0.98 | %
Allowance to nonaccrual loans | 179.57 | % |  | 224.32 | % |  | 181.07 | % |  | 150.05 | % |  | 169.85 | %
Allowance to nonperforming loans | 120.24 | % |  | 129.77 | % |  | 109.48 | % |  | 96.77 | % |  | 89.25 | %
Nonperforming loans to total loans | 0.74 | % |  | 0.69 | % |  | 0.83 | % |  | 0.97 | % |  | 1.10 | %
Nonperforming assets to ending loans, plus OREO | 0.76 | % |  | 0.74 | % |  | 0.89 | % |  | 1.07 | % |  | 1.19 | %
Nonperforming assets to total assets | 0.52 | % |  | 0.50 | % |  | 0.60 | % |  | 0.72 | % |  | 0.80 | %
Classified assets to total assets | 0.98 | % |  | 0.98 | % |  | 1.08 | % |  | 1.13 | % |  | 1.34 | %
Net charge-offs to average loans (annualized) | 0.13 | % |  | 0.02 | % |  | 0.22 | % |  | 0.13 | % |  | 0.14 | %

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate for 2018 and a 35% tax rate for 2017. 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) March 31, 2018 regulatory capital ratios are preliminary.
(3) Includes loans held for sale.
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FIRST FINANCIAL BANCORP.
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
| 2018 |  | 2017
| First |  | Fourth |  | Third |  | Second |  | First |  | Full
| Quarter |  | Quarter |  | Quarter |  | Quarter |  | Quarter |  | Year
Interest income |  |  |  |  |  |  |  |  |  |  |
Loans and leases, including fees | $ | 74,920 |  |  | $ | 74,347 |  |  | $ | 71,148 |  |  | $ | 67,748 |  |  | $ | 66,868 |  |  | $ | 280,111 |
Investment securities |  |  |  |  |  |  |  |  |  |  |
Taxable | 13,670 |  |  | 13,212 |  |  | 13,150 |  |  | 12,598 |  |  | 11,608 |  |  | 50,568 |
Tax-exempt | 1,657 |  |  | 1,571 |  |  | 1,537 |  |  | 1,457 |  |  | 1,353 |  |  | 5,918 |
Total investment securities interest | 15,327 |  |  | 14,783 |  |  | 14,687 |  |  | 14,055 |  |  | 12,961 |  |  | 56,486 |
Other earning assets | 107 |  |  | (592 | ) |  | (917 | ) |  | (1,014 | ) |  | (1,001 | ) |  | (3,524 | )
Total interest income | 90,354 |  |  | 88,538 |  |  | 84,918 |  |  | 80,789 |  |  | 78,828 |  |  | 333,073 |
Interest expense |  |  |  |  |  |  |  |  |  |  |
Deposits | 10,298 |  |  | 9,243 |  |  | 10,335 |  |  | 8,679 |  |  | 6,925 |  |  | 35,182 |
Short-term borrowings | 2,663 |  |  | 2,144 |  |  | 2,566 |  |  | 2,051 |  |  | 1,432 |  |  | 8,193 |
Long-term borrowings | 1,581 |  |  | 1,537 |  |  | 1,538 |  |  | 1,539 |  |  | 1,539 |  |  | 6,153 |
Total interest expense | 14,542 |  |  | 12,924 |  |  | 14,439 |  |  | 12,269 |  |  | 9,896 |  |  | 49,528 |
Net interest income | 75,812 |  |  | 75,614 |  |  | 70,479 |  |  | 68,520 |  |  | 68,932 |  |  | 283,545 |
Provision for loan and lease losses | 2,303 |  |  | (205 | ) |  | 2,953 |  |  | 467 |  |  | 367 |  |  | 3,582 |
Net interest income after provision for loan and lease losses | 73,509 |  |  | 75,819 |  |  | 67,526 |  |  | 68,053 |  |  | 68,565 |  |  | 279,963 |
Noninterest income |  |  |  |  |  |  |  |  |  |  |
Service charges on deposit accounts | 5,039 |  |  | 5,190 |  |  | 5,169 |  |  | 4,772 |  |  | 4,644 |  |  | 19,775 |
Trust and wealth management fees | 3,954 |  |  | 3,597 |  |  | 3,324 |  |  | 3,405 |  |  | 3,747 |  |  | 14,073 |
Bankcard income | 3,394 |  |  | 3,390 |  |  | 3,272 |  |  | 3,501 |  |  | 3,135 |  |  | 13,298 |
Client derivative fees | 1,757 |  |  | 2,047 |  |  | 1,779 |  |  | 1,489 |  |  | 1,103 |  |  | 6,418 |
Net gains from sales of loans | 588 |  |  | 1,171 |  |  | 1,455 |  |  | 1,327 |  |  | 1,216 |  |  | 5,169 |
Net gains on sale of investment securities | 0 |  |  | 19 |  |  | 276 |  |  | 838 |  |  | 516 |  |  | 1,649 |
Other | 2,206 |  |  | 2,968 |  |  | 7,667 |  |  | 2,122 |  |  | 3,003 |  |  | 15,760 |
Total noninterest income | 16,938 |  |  | 18,382 |  |  | 22,942 |  |  | 17,454 |  |  | 17,364 |  |  | 76,142 |
Noninterest expenses |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits | 31,102 |  |  | 35,439 |  |  | 33,827 |  |  | 31,544 |  |  | 31,750 |  |  | 132,560 |
Net occupancy | 4,497 |  |  | 4,252 |  |  | 4,328 |  |  | 4,302 |  |  | 4,515 |  |  | 17,397 |
Furniture and equipment | 2,040 |  |  | 1,969 |  |  | 2,161 |  |  | 2,136 |  |  | 2,177 |  |  | 8,443 |
Data processing | 3,672 |  |  | 3,768 |  |  | 3,455 |  |  | 3,501 |  |  | 3,298 |  |  | 14,022 |
Marketing | 801 |  |  | 1,060 |  |  | 649 |  |  | 982 |  |  | 510 |  |  | 3,201 |
Communication | 459 |  |  | 474 |  |  | 430 |  |  | 468 |  |  | 447 |  |  | 1,819 |
Professional services | 2,198 |  |  | 9,766 |  |  | 2,030 |  |  | 1,469 |  |  | 1,758 |  |  | 15,023 |
State intangible tax | 765 |  |  | 492 |  |  | 721 |  |  | 721 |  |  | 721 |  |  | 2,655 |
FDIC assessments | 894 |  |  | 943 |  |  | 1,051 |  |  | 1,018 |  |  | 932 |  |  | 3,944 |
Loss (gain) - other real estate owned | 77 |  |  | 219 |  |  | 237 |  |  | 162 |  |  | 24 |  |  | 642 |
Other | 5,783 |  |  | 24,516 |  |  | 5,554 |  |  | 5,253 |  |  | 4,913 |  |  | 40,236 |
Total noninterest expenses | 52,288 |  |  | 82,898 |  |  | 54,443 |  |  | 51,556 |  |  | 51,045 |  |  | 239,942 |
Income before income taxes | 38,159 |  |  | 11,303 |  |  | 36,025 |  |  | 33,951 |  |  | 34,884 |  |  | 116,163 |
Income tax expense | 7,653 |  |  | (13,508 | ) |  | 11,199 |  |  | 11,215 |  |  | 10,470 |  |  | 19,376 |
Net income | $ | 30,506 |  |  | $ | 24,811 |  |  | $ | 24,826 |  |  | $ | 22,736 |  |  | $ | 24,414 |  |  | $ | 96,787 |
ADDITIONAL DATA |  |  |  |  |  |  |  |  |  |  |
Net earnings per share - basic | $ | 0.49 |  |  | $ | 0.40 |  |  | $ | 0.40 |  |  | $ | 0.37 |  |  | $ | 0.40 |  |  | $ | 1.57 |
Net earnings per share - diluted | $ | 0.49 |  |  | $ | 0.40 |  |  | $ | 0.40 |  |  | $ | 0.37 |  |  | $ | 0.39 |  |  | $ | 1.56 |
Dividends declared per share | $ | 0.19 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.68 |
Return on average assets | 1.40 | % |  | 1.13 | % |  | 1.13 | % |  | 1.06 | % |  | 1.18 | % |  | 1.12 | %
Return on average shareholders' equity | 13.31 | % |  | 10.70 | % |  | 10.85 | % |  | 10.25 | % |  | 11.36 | % |  | 10.78 | %
Interest income | $ | 90,354 |  |  | $ | 88,538 |  |  | $ | 84,918 |  |  | $ | 80,789 |  |  | $ | 78,828 |  |  | $ | 333,073 |
Tax equivalent adjustment | 718 |  |  | 1,387 |  |  | 1,353 |  |  | 1,294 |  |  | 1,225 |  |  | 5,259 |
Interest income - tax equivalent | 91,072 |  |  | 89,925 |  |  | 86,271 |  |  | 82,083 |  |  | 80,053 |  |  | 338,332 |
Interest expense | 14,542 |  |  | 12,924 |  |  | 14,439 |  |  | 12,269 |  |  | 9,896 |  |  | 49,528 |
Net interest income - tax equivalent | $ | 76,530 |  |  | $ | 77,001 |  |  | $ | 71,832 |  |  | $ | 69,814 |  |  | $ | 70,157 |  |  | $ | 288,804 |
Net interest margin | 3.80 | % |  | 3.75 | % |  | 3.50 | % |  | 3.50 | % |  | 3.63 | % |  | 3.59 | %
Net interest margin (fully tax equivalent) (1) | 3.84 | % |  | 3.82 | % |  | 3.57 | % |  | 3.56 | % |  | 3.70 | % |  | 3.66 | %
Full-time equivalent employees | 1,289 |  |  | 1,304 |  |  | 1,363 |  |  | 1,429 |  |  | 1,424 |  |  |
(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate for 2018 and a 35% tax rate for 2017. 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 provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

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FIRST FINANCIAL BANCORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| Mar. 31, |  | Dec. 31, |  | Sep. 30, |  | Jun. 30, |  | Mar. 31, |  | % Change |  | % Change
| 2018 |  | 2017 |  | 2017 |  | 2017 |  | 2017 |  | Linked Qtr. |  | Comparable Qtr.
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 116,581 |  |  | $ | 150,650 |  |  | $ | 117,840 |  |  | $ | 117,478 |  |  | $ | 117,914 |  |  | (22.6 | )% |  | (1.1 | )%
Interest-bearing deposits with other banks | 10,200 |  |  | 33,974 |  |  | 34,787 |  |  | 29,839 |  |  | 39,058 |  |  | (70.0 | )% |  | (73.9 | )%
Investment securities available-for-sale | 1,359,381 |  |  | 1,349,408 |  |  | 1,286,770 |  |  | 1,298,578 |  |  | 1,220,046 |  |  | 0.7 | % |  | 11.4 | %
Investment securities held-to-maturity | 633,722 |  |  | 654,008 |  |  | 669,816 |  |  | 696,269 |  |  | 730,796 |  |  | (3.1 | )% |  | (13.3 | )%
Other investments | 53,070 |  |  | 53,140 |  |  | 53,198 |  |  | 53,285 |  |  | 50,996 |  |  | (0.1 | )% |  | 4.1 | %
Loans held for sale | 8,048 |  |  | 11,502 |  |  | 16,466 |  |  | 11,939 |  |  | 7,657 |  |  | (30.0 | )% |  | 5.1 | %
Loans and leases |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | 1,943,741 |  |  | 1,912,743 |  |  | 1,886,093 |  |  | 1,824,589 |  |  | 1,779,635 |  |  | 1.6 | % |  | 9.2 | %
Lease financing | 81,617 |  |  | 89,347 |  |  | 86,014 |  |  | 88,152 |  |  | 88,888 |  |  | (8.7 | )% |  | (8.2 | )%
Construction real estate | 494,665 |  |  | 467,730 |  |  | 420,941 |  |  | 443,112 |  |  | 446,332 |  |  | 5.8 | % |  | 10.8 | %
Commercial real estate | 2,544,051 |  |  | 2,490,091 |  |  | 2,523,387 |  |  | 2,471,655 |  |  | 2,398,235 |  |  | 2.2 | % |  | 6.1 | %
Residential real estate | 468,584 |  |  | 471,391 |  |  | 477,964 |  |  | 490,398 |  |  | 486,601 |  |  | (0.6 | )% |  | (3.7 | )%
Home equity | 483,643 |  |  | 493,604 |  |  | 494,342 |  |  | 464,066 |  |  | 458,974 |  |  | (2.0 | )% |  | 5.4 | %
Installment | 39,248 |  |  | 41,586 |  |  | 43,650 |  |  | 47,654 |  |  | 52,063 |  |  | (5.6 | )% |  | (24.6 | )%
Credit card | 46,472 |  |  | 46,691 |  |  | 44,646 |  |  | 44,139 |  |  | 43,354 |  |  | (0.5 | )% |  | 7.2 | %
Total loans | 6,102,021 |  |  | 6,013,183 |  |  | 5,977,037 |  |  | 5,873,765 |  |  | 5,754,082 |  |  | 1.5 | % |  | 6.0 | %
Less: |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses | 54,380 |  |  | 54,021 |  |  | 54,534 |  |  | 54,873 |  |  | 56,326 |  |  | 0.7 | % |  | (3.5 | )%
Net loans | 6,047,641 |  |  | 5,959,162 |  |  | 5,922,503 |  |  | 5,818,892 |  |  | 5,697,756 |  |  | 1.5 | % |  | 6.1 | %
Premises and equipment | 127,046 |  |  | 125,036 |  |  | 126,790 |  |  | 128,956 |  |  | 131,808 |  |  | 1.6 | % |  | (3.6 | )%
Goodwill and other intangibles | 209,053 |  |  | 209,379 |  |  | 209,730 |  |  | 210,045 |  |  | 210,324 |  |  | (0.2 | )% |  | (0.6 | )%
Accrued interest and other assets | 333,687 |  |  | 350,664 |  |  | 323,789 |  |  | 344,761 |  |  | 324,815 |  |  | (4.8 | )% |  | 2.7 | %
Total Assets | $ | 8,898,429 |  |  | $ | 8,896,923 |  |  | $ | 8,761,689 |  |  | $ | 8,710,042 |  |  | $ | 8,531,170 |  |  | 0.0 | % |  | 4.3 | %
LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand | $ | 1,442,399 |  |  | $ | 1,453,463 |  |  | $ | 1,518,011 |  |  | $ | 1,496,173 |  |  | $ | 1,494,892 |  |  | (0.8 | )% |  | (3.5 | )%
Savings | 2,450,196 |  |  | 2,462,420 |  |  | 2,434,086 |  |  | 2,398,262 |  |  | 2,284,821 |  |  | (0.5 | )% |  | 7.2 | %
Time | 1,545,273 |  |  | 1,317,105 |  |  | 1,188,597 |  |  | 1,097,911 |  |  | 1,202,563 |  |  | 17.3 | % |  | 28.5 | %
Total interest-bearing deposits | 5,437,868 |  |  | 5,232,988 |  |  | 5,140,694 |  |  | 4,992,346 |  |  | 4,982,276 |  |  | 3.9 | % |  | 9.1 | %
Noninterest-bearing | 1,572,636 |  |  | 1,662,058 |  |  | 1,585,396 |  |  | 1,476,563 |  |  | 1,547,600 |  |  | (5.4 | )% |  | 1.6 | %
Total deposits | 7,010,504 |  |  | 6,895,046 |  |  | 6,726,090 |  |  | 6,468,909 |  |  | 6,529,876 |  |  | 1.7 | % |  | 7.4 | %
Federal funds purchased and securities sold |  |  |  |  |  |  |  |  |  |  |  |  |
under agreements to repurchase | 56,732 |  |  | 72,265 |  |  | 45,532 |  |  | 130,633 |  |  | 52,484 |  |  | (21.5 | )% |  | 8.1 | %
FHLB short-term borrowings | 601,600 |  |  | 742,300 |  |  | 818,200 |  |  | 957,700 |  |  | 806,700 |  |  | (19.0 | )% |  | (25.4 | )%
Total short-term borrowings | 658,332 |  |  | 814,565 |  |  | 863,732 |  |  | 1,088,333 |  |  | 859,184 |  |  | (19.2 | )% |  | (23.4 | )%
Long-term debt | 169,695 |  |  | 119,654 |  |  | 119,615 |  |  | 119,669 |  |  | 119,629 |  |  | 41.8 | % |  | 41.9 | %
Total borrowed funds | 828,027 |  |  | 934,219 |  |  | 983,347 |  |  | 1,208,002 |  |  | 978,813 |  |  | (11.4 | )% |  | (15.4 | )%
Accrued interest and other liabilities | 119,913 |  |  | 136,994 |  |  | 137,298 |  |  | 135,014 |  |  | 142,416 |  |  | (12.5 | )% |  | (15.8 | )%
Total Liabilities | 7,958,444 |  |  | 7,966,259 |  |  | 7,846,735 |  |  | 7,811,925 |  |  | 7,651,105 |  |  | (0.1 | )% |  | 4.0 | %
SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 571,457 |  |  | 573,109 |  |  | 571,750 |  |  | 569,302 |  |  | 567,911 |  |  | (0.3 | )% |  | 0.6 | %
Retained earnings | 515,498 |  |  | 491,847 |  |  | 477,588 |  |  | 463,250 |  |  | 451,073 |  |  | 4.8 | % |  | 14.3 | %
Accumulated other comprehensive loss | (34,683 | ) |  | (20,390 | ) |  | (20,379 | ) |  | (22,222 | ) |  | (26,639 | ) |  | 70.1 | % |  | 30.2 | %
Treasury stock, at cost | (112,287 | ) |  | (113,902 | ) |  | (114,005 | ) |  | (112,213 | ) |  | (112,280 | ) |  | (1.4 | )% |  | 0.0 | %
Total Shareholders' Equity | 939,985 |  |  | 930,664 |  |  | 914,954 |  |  | 898,117 |  |  | 880,065 |  |  | 1.0 | % |  | 6.8 | %
Total Liabilities and Shareholders' Equity | $ | 8,898,429 |  |  | $ | 8,896,923 |  |  | $ | 8,761,689 |  |  | $ | 8,710,042 |  |  | $ | 8,531,170 |  |  | 0.0 | % |  | 4.3 | %

4

FIRST FINANCIAL BANCORP.
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
| Quarterly Averages
| Mar. 31, |  | Dec. 31, |  | Sep. 30, |  | Jun. 30, |  | Mar. 31,
| 2018 |  | 2017 |  | 2017 |  | 2017 |  | 2017
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 116,095 |  |  | $ | 121,792 |  |  | $ | 111,984 |  |  | $ | 116,123 |  |  | $ | 115,719 |
Interest-bearing deposits with other banks | 27,073 |  |  | 25,357 |  |  | 37,199 |  |  | 20,293 |  |  | 40,985 |
Investment securities | 2,042,781 |  |  | 2,020,040 |  |  | 2,041,785 |  |  | 2,035,334 |  |  | 1,906,699 |
Loans held for sale | 9,171 |  |  | 12,572 |  |  | 12,705 |  |  | 9,243 |  |  | 8,125 |
Loans and leases |  |  |  |  |  |  |  |  |
Commercial and industrial | 1,897,726 |  |  | 1,857,546 |  |  | 1,843,677 |  |  | 1,778,523 |  |  | 1,782,829 |
Lease financing | 86,755 |  |  | 84,635 |  |  | 85,649 |  |  | 86,880 |  |  | 89,549 |
Construction real estate | 483,930 |  |  | 449,195 |  |  | 408,373 |  |  | 447,716 |  |  | 414,038 |
Commercial real estate | 2,495,604 |  |  | 2,487,149 |  |  | 2,497,170 |  |  | 2,418,355 |  |  | 2,390,004 |
Residential real estate | 468,855 |  |  | 477,454 |  |  | 489,508 |  |  | 490,709 |  |  | 497,412 |
Home equity | 487,073 |  |  | 494,804 |  |  | 473,988 |  |  | 462,431 |  |  | 459,821 |
Installment | 40,409 |  |  | 42,283 |  |  | 45,911 |  |  | 51,275 |  |  | 50,722 |
Credit card | 46,969 |  |  | 46,652 |  |  | 45,072 |  |  | 44,478 |  |  | 44,013 |
Total loans | 6,007,321 |  |  | 5,939,718 |  |  | 5,889,348 |  |  | 5,780,367 |  |  | 5,728,388 |
Less: |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses | 55,016 |  |  | 55,279 |  |  | 55,326 |  |  | 57,379 |  |  | 58,461 |
Net loans | 5,952,305 |  |  | 5,884,439 |  |  | 5,834,022 |  |  | 5,722,988 |  |  | 5,669,927 |
Premises and equipment | 126,016 |  |  | 126,310 |  |  | 128,539 |  |  | 131,654 |  |  | 132,384 |
Goodwill and other intangibles | 209,244 |  |  | 209,571 |  |  | 209,933 |  |  | 210,215 |  |  | 210,513 |
Accrued interest and other assets | 347,491 |  |  | 331,875 |  |  | 340,750 |  |  | 337,111 |  |  | 324,719 |
Total Assets | $ | 8,830,176 |  |  | $ | 8,731,956 |  |  | $ | 8,716,917 |  |  | $ | 8,582,961 |  |  | $ | 8,409,071 |
LIABILITIES |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |
Interest-bearing demand | $ | 1,415,603 |  |  | $ | 1,502,245 |  |  | $ | 1,494,367 |  |  | $ | 1,483,186 |  |  | $ | 1,484,427 |
Savings | 2,450,697 |  |  | 2,518,771 |  |  | 2,494,592 |  |  | 2,408,950 |  |  | 2,224,708 |
Time | 1,466,440 |  |  | 1,181,396 |  |  | 1,181,406 |  |  | 1,164,087 |  |  | 1,233,631 |
Total interest-bearing deposits | 5,332,740 |  |  | 5,202,412 |  |  | 5,170,365 |  |  | 5,056,223 |  |  | 4,942,766 |
Noninterest-bearing | 1,570,572 |  |  | 1,637,228 |  |  | 1,510,032 |  |  | 1,513,995 |  |  | 1,499,097 |
Total deposits | 6,903,312 |  |  | 6,839,640 |  |  | 6,680,397 |  |  | 6,570,218 |  |  | 6,441,863 |
Federal funds purchased and securities sold |  |  |  |  |  |  |  |  |
under agreements to repurchase | 72,865 |  |  | 57,131 |  |  | 71,315 |  |  | 62,893 |  |  | 88,048 |
FHLB short-term borrowings | 667,641 |  |  | 660,859 |  |  | 808,842 |  |  | 812,588 |  |  | 760,673 |
Total short-term borrowings | 740,506 |  |  | 717,990 |  |  | 880,157 |  |  | 875,481 |  |  | 848,721 |
Long-term debt | 126,342 |  |  | 124,221 |  |  | 119,661 |  |  | 119,651 |  |  | 119,605 |
Total borrowed funds | 866,848 |  |  | 842,211 |  |  | 999,818 |  |  | 995,132 |  |  | 968,326 |
Accrued interest and other liabilities | 130,542 |  |  | 129,911 |  |  | 128,645 |  |  | 128,007 |  |  | 127,667 |
Total Liabilities | 7,900,702 |  |  | 7,811,762 |  |  | 7,808,860 |  |  | 7,693,357 |  |  | 7,537,856 |
SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |
Common stock | 572,915 |  |  | 572,392 |  |  | 570,216 |  |  | 568,654 |  |  | 570,058 |
Retained earnings | 503,140 |  |  | 483,554 |  |  | 470,591 |  |  | 456,648 |  |  | 442,104 |
Accumulated other comprehensive loss | (33,285 | ) |  | (21,740 | ) |  | (19,940 | ) |  | (23,414 | ) |  | (27,569 | )
Treasury stock, at cost | (113,296 | ) |  | (114,012 | ) |  | (112,810 | ) |  | (112,284 | ) |  | (113,378 | )
Total Shareholders' Equity | 929,474 |  |  | 920,194 |  |  | 908,057 |  |  | 889,604 |  |  | 871,215 |
Total Liabilities and Shareholders' Equity | $ | 8,830,176 |  |  | $ | 8,731,956 |  |  | $ | 8,716,917 |  |  | $ | 8,582,961 |  |  | $ | 8,409,071 |

5

FIRST FINANCIAL BANCORP.
NET INTEREST MARGIN RATE/VOLUME ANALYSIS
(Dollars in thousands)
(Unaudited)
|  | Quarterly Averages |  |  |  |  |  |  |  |  |  |  |  |
|  | March 31, 2018 |  | December 31, 2017 |  | March 31, 2017 |  | Linked Qtr. Income Variance |  | Comparable Qtr. Income Variance
|  | Balance |  | Yield |  | Balance |  | Yield |  | Balance |  | Yield |  | Rate |  | Volume |  | Total |  | Rate |  | Volume |  | Total
Earning assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities |  | $ | 2,042,781 |  |  | 3.04 | % |  | $ | 2,020,040 |  |  | 2.90 | % |  | $ | 1,906,699 |  |  | 2.76 | % |  | $ | 710 |  |  | $ | (166 | ) |  | $ | 544 |  |  | $ | 1,345 |  |  | $ | 1,021 |  |  | $ | 2,366 |
Interest-bearing deposits with other banks |  | 27,073 |  |  | 1.60 | % |  | 25,357 |  |  | 1.41 | % |  | 40,985 |  |  | 0.80 | % |  | 12 |  |  | 5 |  |  | 17 |  |  | 81 |  |  | (55 | ) |  | 26 |
Gross loans (1) |  | 6,017,994 |  |  | 5.05 | % |  | 5,959,703 |  |  | 4.90 | % |  | 5,748,033 |  |  | 4.64 | % |  | 2,178 |  |  | (923 | ) |  | 1,255 |  |  | 5,773 |  |  | 3,361 |  |  | 9,134 |
Total earning assets |  | 8,087,848 |  |  | 4.53 | % |  | 8,005,100 |  |  | 4.39 | % |  | 7,695,717 |  |  | 4.15 | % |  | 2,901 |  |  | (1,085 | ) |  | 1,816 |  |  | 7,199 |  |  | 4,327 |  |  | 11,526 |
Nonearning assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses |  | (55,016 | ) |  |  |  | (55,279 | ) |  |  |  | (58,461 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | 116,095 |  |  |  |  | 121,792 |  |  |  |  | 115,719 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued interest and other assets |  | 681,249 |  |  |  |  | 660,343 |  |  |  |  | 656,096 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 8,830,176 |  |  |  |  | $ | 8,731,956 |  |  |  |  | $ | 8,409,071 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand |  | $ | 1,415,603 |  |  | 0.37 | % |  | $ | 1,502,245 |  |  | 0.34 | % |  | $ | 1,484,427 |  |  | 0.20 | % |  |  |  |  |  |  |  |  |  |  |  |
Savings |  | 2,450,697 |  |  | 0.64 | % |  | 2,518,771 |  |  | 0.63 | % |  | 2,224,708 |  |  | 0.48 | % |  |  |  |  |  |  |  |  |  |  |  |
Time |  | 1,466,440 |  |  | 1.41 | % |  | 1,181,396 |  |  | 1.33 | % |  | 1,233,631 |  |  | 1.17 | % |  |  |  |  |  |  |  |  |  |  |  |
Total interest-bearing deposits |  | 5,332,740 |  |  | 0.78 | % |  | 5,202,412 |  |  | 0.70 | % |  | 4,942,766 |  |  | 0.57 | % |  | $ | 1,027 |  |  | $ | 28 |  |  | $ | 1,055 |  |  | $ | 2,620 |  |  | $ | 753 |  |  | $ | 3,373 |
Borrowed funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  | 740,506 |  |  | 1.46 | % |  | 717,990 |  |  | 1.18 | % |  | 848,721 |  |  | 0.68 | % |  | 495 |  |  | 24 |  |  | 519 |  |  | 1,620 |  |  | (389 | ) |  | 1,231 |
Long-term debt |  | 126,342 |  |  | 5.07 | % |  | 124,221 |  |  | 4.91 | % |  | 119,605 |  |  | 5.22 | % |  | 52 |  |  | (8 | ) |  | 44 |  |  | (42 | ) |  | 84 |  |  | 42 |
Total borrowed funds |  | 866,848 |  |  | 1.99 | % |  | 842,211 |  |  | 1.73 | % |  | 968,326 |  |  | 1.24 | % |  | 547 |  |  | 16 |  |  | 563 |  |  | 1,578 |  |  | (305 | ) |  | 1,273 |
Total interest-bearing liabilities |  | 6,199,588 |  |  | 0.95 | % |  | 6,044,623 |  |  | 0.85 | % |  | 5,911,092 |  |  | 0.68 | % |  | 1,574 |  |  | 44 |  |  | 1,618 |  |  | 4,198 |  |  | 448 |  |  | 4,646 |
Noninterest-bearing liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing demand deposits |  | 1,570,572 |  |  |  |  | 1,637,228 |  |  |  |  | 1,499,097 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other liabilities |  | 130,542 |  |  |  |  | 129,911 |  |  |  |  | 127,667 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders' equity |  | 929,474 |  |  |  |  | 920,194 |  |  |  |  | 871,215 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total liabilities & shareholders' equity |  | $ | 8,830,176 |  |  |  |  | $ | 8,731,956 |  |  |  |  | $ | 8,409,071 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 75,812 |  |  |  |  | $ | 75,614 |  |  |  |  | $ | 68,932 |  |  |  |  | $ | 1,327 |  |  | $ | (1,129 | ) |  | $ | 198 |  |  | $ | 3,001 |  |  | $ | 3,879 |  |  | $ | 6,880 |
Net interest spread |  |  |  | 3.58 | % |  |  |  | 3.54 | % |  |  |  | 3.47 | % |  |  |  |  |  |  |  |  |  |  |  |
Net interest margin |  |  |  | 3.80 | % |  |  |  | 3.75 | % |  |  |  | 3.63 | % |  |  |  |  |  |  |  |  |  |  |  |
Tax equivalent adjustment |  |  |  | 0.04 | % |  |  |  | 0.07 | % |  |  |  | 0.07 | % |  |  |  |  |  |  |  |  |  |  |  |
Net interest margin (fully tax equivalent) |  |  |  | 3.84 | % |  |  |  | 3.82 | % |  |  |  | 3.70 | % |  |  |  |  |  |  |  |  |  |  |  |
(1) Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans.

6

FIRST FINANCIAL BANCORP.
CREDIT QUALITY
(Dollars in thousands)
(Unaudited)
| Mar. 31, |  | Dec. 31, |  | Sep. 30, |  | Jun. 30, |  | Mar. 31,
| 2018 |  | 2017 |  | 2017 |  | 2017 |  | 2017
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY |  |  |  |  |  |
Balance at beginning of period | $ | 54,021 |  |  | $ | 54,534 |  |  | $ | 54,873 |  |  | $ | 56,326 |  |  | $ | 57,961 |
Provision for loan and lease losses | 2,303 |  |  | (205 | ) |  | 2,953 |  |  | 467 |  |  | 367 |
Gross charge-offs |  |  |  |  |  |  |  |  |
Commercial and industrial | 885 |  |  | 1,264 |  |  | 4,122 |  |  | 3,065 |  |  | 1,743 |
Construction real estate | 0 |  |  | 1 |  |  | 0 |  |  | 0 |  |  | 0 |
Commercial real estate | 2,176 |  |  | 10 |  |  | 58 |  |  | 485 |  |  | 485 |
Residential real estate | 96 |  |  | 128 |  |  | 23 |  |  | 223 |  |  | 61 |
Home equity | 242 |  |  | 278 |  |  | 71 |  |  | 384 |  |  | 180 |
Installment | 16 |  |  | 26 |  |  | 24 |  |  | 126 |  |  | 49 |
Credit card | 254 |  |  | 209 |  |  | 201 |  |  | 215 |  |  | 232 |
Total gross charge-offs | 3,669 |  |  | 1,916 |  |  | 4,499 |  |  | 4,498 |  |  | 2,750 |
Recoveries |  |  |  |  |  |  |  |  |
Commercial and industrial | 436 |  |  | 370 |  |  | 325 |  |  | 693 |  |  | 262 |
Lease financing | 0 |  |  | 0 |  |  | 0 |  |  | 1 |  |  | 0 |
Construction real estate | 0 |  |  | 0 |  |  | 0 |  |  | 89 |  |  | 0 |
Commercial real estate | 752 |  |  | 480 |  |  | 585 |  |  | 1,398 |  |  | 256 |
Residential real estate | 26 |  |  | 77 |  |  | 70 |  |  | 59 |  |  | 9 |
Home equity | 429 |  |  | 589 |  |  | 110 |  |  | 222 |  |  | 106 |
Installment | 48 |  |  | 46 |  |  | 74 |  |  | 43 |  |  | 71 |
Credit card | 34 |  |  | 46 |  |  | 43 |  |  | 73 |  |  | 44 |
Total recoveries | 1,725 |  |  | 1,608 |  |  | 1,207 |  |  | 2,578 |  |  | 748 |
Total net charge-offs | 1,944 |  |  | 308 |  |  | 3,292 |  |  | 1,920 |  |  | 2,002 |
Ending allowance for loan and lease losses | $ | 54,380 |  |  | $ | 54,021 |  |  | $ | 54,534 |  |  | $ | 54,873 |  |  | $ | 56,326 |
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) |  |  |  |  |  |
Commercial and industrial | 0.10 | % |  | 0.19 | % |  | 0.82 | % |  | 0.53 | % |  | 0.34 | %
Lease financing | 0.00 | % |  | 0.00 | % |  | 0.00 | % |  | 0.00 | % |  | 0.00 | %
Construction real estate | 0.00 | % |  | 0.00 | % |  | 0.00 | % |  | (0.08 | )% |  | 0.00 | %
Commercial real estate | 0.23 | % |  | (0.07 | )% |  | (0.08 | )% |  | (0.15 | )% |  | 0.04 | %
Residential real estate | 0.06 | % |  | 0.04 | % |  | (0.04 | )% |  | 0.13 | % |  | 0.04 | %
Home equity | (0.16 | )% |  | (0.25 | )% |  | (0.03 | )% |  | 0.14 | % |  | 0.07 | %
Installment | (0.32 | )% |  | (0.19 | )% |  | (0.43 | )% |  | 0.65 | % |  | (0.18 | )%
Credit card | 1.90 | % |  | 1.39 | % |  | 1.39 | % |  | 1.28 | % |  | 1.73 | %
Total net charge-offs | 0.13 | % |  | 0.02 | % |  | 0.22 | % |  | 0.13 | % |  | 0.14 | %
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans (1) |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 6,275 |  |  | $ | 5,229 |  |  | $ | 9,026 |  |  | $ | 15,099 |  |  | $ | 9,249 |
Lease financing | 0 |  |  | 82 |  |  | 87 |  |  | 94 |  |  | 102 |
Construction real estate | 26 |  |  | 29 |  |  | 824 |  |  | 1,075 |  |  | 1,075 |
Commercial real estate | 16,878 |  |  | 10,616 |  |  | 12,244 |  |  | 12,617 |  |  | 14,324 |
Residential real estate | 3,324 |  |  | 4,140 |  |  | 4,333 |  |  | 4,442 |  |  | 4,520 |
Home equity | 3,484 |  |  | 3,743 |  |  | 3,364 |  |  | 2,937 |  |  | 3,571 |
Installment | 296 |  |  | 243 |  |  | 240 |  |  | 307 |  |  | 322 |
Nonaccrual loans | 30,283 |  |  | 24,082 |  |  | 30,118 |  |  | 36,571 |  |  | 33,163 |
Accruing troubled debt restructurings (TDRs) | 14,943 |  |  | 17,545 |  |  | 19,692 |  |  | 20,135 |  |  | 29,948 |
Total nonperforming loans | 45,226 |  |  | 41,627 |  |  | 49,810 |  |  | 56,706 |  |  | 63,111 |
Other real estate owned (OREO) | 1,065 |  |  | 2,781 |  |  | 3,116 |  |  | 5,961 |  |  | 5,300 |
Total nonperforming assets | 46,291 |  |  | 44,408 |  |  | 52,926 |  |  | 62,667 |  |  | 68,411 |
Accruing loans past due 90 days or more | 529 |  |  | 61 |  |  | 84 |  |  | 124 |  |  | 96 |
Total underperforming assets | $ | 46,820 |  |  | $ | 44,469 |  |  | $ | 53,010 |  |  | $ | 62,791 |  |  | $ | 68,507 |
Total classified assets | $ | 87,577 |  |  | $ | 87,293 |  |  | $ | 94,320 |  |  | $ | 98,391 |  |  | $ | 114,550 |
CREDIT QUALITY RATIOS |  |  |  |  |  |
Allowance for loan and lease losses to |  |  |  |  |  |  |  |  |
Nonaccrual loans | 179.57 | % |  | 224.32 | % |  | 181.07 | % |  | 150.05 | % |  | 169.85 | %
Nonperforming loans | 120.24 | % |  | 129.77 | % |  | 109.48 | % |  | 96.77 | % |  | 89.25 | %
Total ending loans | 0.89 | % |  | 0.90 | % |  | 0.91 | % |  | 0.93 | % |  | 0.98 | %
Nonperforming loans to total loans | 0.74 | % |  | 0.69 | % |  | 0.83 | % |  | 0.97 | % |  | 1.10 | %
Nonperforming assets to |  |  |  |  |  |  |  |  |
Ending loans, plus OREO | 0.76 | % |  | 0.74 | % |  | 0.89 | % |  | 1.07 | % |  | 1.19 | %
Total assets | 0.52 | % |  | 0.50 | % |  | 0.60 | % |  | 0.72 | % |  | 0.80 | %
Nonperforming assets, excluding accruing TDRs to |  |  |  |  |  |  |  |  |
Ending loans, plus OREO | 0.51 | % |  | 0.45 | % |  | 0.56 | % |  | 0.72 | % |  | 0.67 | %
Total assets | 0.35 | % |  | 0.30 | % |  | 0.38 | % |  | 0.49 | % |  | 0.45 | %
Classified assets to total assets | 0.98 | % |  | 0.98 | % |  | 1.08 | % |  | 1.13 | % |  | 1.34 | %
(1) Nonaccrual loans include nonaccrual TDRs of $6.0 million, $5.5 million, $9.1 million, $9.4 million, and $7.8 million as of March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017, and March 31, 2017, respectively.

7

FIRST FINANCIAL BANCORP.
CAPITAL ADEQUACY
(Dollars in thousands, except per share data)
(Unaudited)
| Mar. 31, |  | Dec. 31, |  | Sep. 30, |  | Jun. 30, |  | Mar. 31,
| 2018 |  | 2017 |  | 2017 |  | 2017 |  | 2017
PER COMMON SHARE |  |  |  |  |  |  |  |  |
Market Price |  |  |  |  |  |  |  |  |
High | $ | 29.35 |  |  | $ | 29.15 |  |  | $ | 28.50 |  |  | $ | 28.95 |  |  | $ | 28.90 |
Low | $ | 26.40 |  |  | $ | 25.30 |  |  | $ | 23.10 |  |  | $ | 25.05 |  |  | $ | 26.00 |
Close | $ | 29.35 |  |  | $ | 26.35 |  |  | $ | 26.15 |  |  | $ | 27.70 |  |  | $ | 27.45 |
Average shares outstanding - basic | 61,654,686 |  |  | 61,595,629 |  |  | 61,577,619 |  |  | 61,543,478 |  |  | 61,398,414 |
Average shares outstanding - diluted | 62,180,744 |  |  | 62,131,840 |  |  | 62,189,637 |  |  | 62,234,022 |  |  | 62,140,384 |
Ending shares outstanding | 62,213,823 |  |  | 62,069,087 |  |  | 62,061,465 |  |  | 62,141,071 |  |  | 62,134,285 |
Total shareholders' equity | $ | 939,985 |  |  | $ | 930,664 |  |  | $ | 914,954 |  |  | $ | 898,117 |  |  | $ | 880,065 |
REGULATORY CAPITAL | Preliminary |  |  |  |  |  |  |  |
Common equity tier 1 capital | $ | 779,491 |  |  | $ | 755,735 |  |  | $ | 746,730 |  |  | $ | 731,024 |  |  | $ | 716,678 |
Common equity tier 1 capital ratio | 10.77 | % |  | 10.63 | % |  | 10.53 | % |  | 10.54 | % |  | 10.59 | %
Tier 1 capital | $ | 779,595 |  |  | $ | 755,839 |  |  | $ | 746,834 |  |  | $ | 731,128 |  |  | $ | 716,782 |
Tier 1 ratio | 10.77 | % |  | 10.63 | % |  | 10.53 | % |  | 10.54 | % |  | 10.59 | %
Total capital | $ | 953,243 |  |  | $ | 929,148 |  |  | $ | 920,642 |  |  | $ | 905,222 |  |  | $ | 892,161 |
Total capital ratio | 13.17 | % |  | 13.07 | % |  | 12.98 | % |  | 13.05 | % |  | 13.19 | %
Total capital in excess of minimum |  |  |  |  |  |  |  |  |
requirement | $ | 238,221 |  |  | $ | 271,600 |  |  | $ | 264,751 |  |  | $ | 263,580 |  |  | $ | 266,367 |
Total risk-weighted assets | $ | 7,240,731 |  |  | $ | 7,108,629 |  |  | $ | 7,090,714 |  |  | $ | 6,936,665 |  |  | $ | 6,765,336 |
Leverage ratio | 9.00 | % |  | 8.84 | % |  | 8.74 | % |  | 8.69 | % |  | 8.69 | %
OTHER CAPITAL RATIOS |  |  |  |  |  |  |  |  |
Ending shareholders' equity to ending assets | 10.56 | % |  | 10.46 | % |  | 10.44 | % |  | 10.31 | % |  | 10.32 | %
Ending tangible shareholders' equity to ending tangible assets | 8.41 | % |  | 8.30 | % |  | 8.25 | % |  | 8.09 | % |  | 8.05 | %
Average shareholders' equity to average assets | 10.53 | % |  | 10.54 | % |  | 10.42 | % |  | 10.36 | % |  | 10.36 | %
Average tangible shareholders' equity to average tangible assets | 8.36 | % |  | 8.34 | % |  | 8.21 | % |  | 8.12 | % |  | 8.06 | %

8