FIRST
FINANCIAL BANCORP.
|
(Exact
name of registrant as specified in its
charter)
|
Ohio
|
31-1042001
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
4000
Smith Road, Cincinnati, Ohio
|
45209
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Class
|
Outstanding
at October 30, 2008
|
|
Common
stock, No par value
|
37,481,398
|
Page No.
|
||
Part
I-FINANCIAL INFORMATION
|
||
Item
1-Financial Statements
|
||
Consolidated
Balance Sheets -
|
||
September
30, 2008 and December 31, 2007
|
1
|
|
Consolidated
Statements of Income -
|
||
Nine
and Three Months Ended September 30, 2008 and 2007
|
2
|
|
Consolidated
Statements of Cash Flows -
|
||
Nine
Months Ended September 30, 2008 and 2007
|
3
|
|
Consolidated
Statements of Changes in Shareholders’ Equity -
|
||
Nine
Months Ended September 30, 2008 and 2007
|
4
|
|
Notes
to Consolidated Financial Statements
|
6
|
|
Item
2-Management's Discussion and Analysis of Financial Condition and
Results
of Operations
|
18
|
|
Item
3-Quantitative and Qualitative Disclosures about Market
Risk
|
36
|
|
Item
4-Controls and Procedures
|
37
|
|
Part
II-OTHER INFORMATION
|
||
Item
2-Unregistered Sales of Equity Securities and Use of
Proceeds
|
38
|
|
Item
6-Exhibits
|
40
|
|
Signatures
|
43
|
September 30,
|
December 31,
|
||||||
2008
|
2007
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
90,341
|
$
|
106,224
|
|||
Federal
funds sold
|
0
|
106,990
|
|||||
Investment
securities trading
|
198
|
0
|
|||||
Investment
securities available-for-sale, at market value (cost $491,740 at
September
30, 2008 and $306,412 at December 31, 2007)
|
492,554
|
306,928
|
|||||
Investment
securities held-to-maturity (market value $5,230 at September 30,
2008 and
$5,814 at December 31, 2007)
|
5,037
|
5,639
|
|||||
Other
investments
|
34,976
|
33,969
|
|||||
Loans
held for sale
|
2,437
|
1,515
|
|||||
Loans:
|
|||||||
Commercial
|
819,430
|
785,143
|
|||||
Real
estate - construction
|
203,809
|
151,432
|
|||||
Real
estate - commercial
|
814,578
|
706,409
|
|||||
Real
estate - residential
|
424,902
|
539,332
|
|||||
Installment
|
106,456
|
138,895
|
|||||
Home
equity
|
276,943
|
250,888
|
|||||
Credit
card
|
27,047
|
26,610
|
|||||
Lease
financing
|
92
|
378
|
|||||
Total
loans
|
2,673,257
|
2,599,087
|
|||||
Less:
|
|||||||
Allowance
for loan and lease losses
|
30,353
|
29,057
|
|||||
Net
loans
|
2,642,904
|
2,570,030
|
|||||
Premises
and equipment, net
|
81,989
|
78,994
|
|||||
Goodwill
|
28,261
|
28,261
|
|||||
Other
intangibles
|
872
|
698
|
|||||
Accrued
interest and other assets
|
132,107
|
130,068
|
|||||
TOTAL
ASSETS
|
$
|
3,511,676
|
$
|
3,369,316
|
|||
LIABILITIES
|
|||||||
Deposits:
|
|||||||
Interest-bearing
|
$
|
580,417
|
$
|
603,870
|
|||
Savings
|
608,438
|
596,636
|
|||||
Time
|
1,118,511
|
1,227,954
|
|||||
Total
interest-bearing deposits
|
2,307,366
|
2,428,460
|
|||||
Noninterest-bearing
|
404,315
|
465,731
|
|||||
Total
deposits
|
2,711,681
|
2,894,191
|
|||||
Short-term
borrowings:
|
|||||||
Federal
funds purchased and securities sold under agreements to
repurchase
|
45,495
|
26,289
|
|||||
Federal
Home Loan Bank
|
215,000
|
0
|
|||||
Other
|
53,000
|
72,000
|
|||||
Total
short-term borrowings
|
313,495
|
98,289
|
|||||
Long-term
debt
|
152,568
|
45,896
|
|||||
Other
long-term debt
|
20,620
|
20,620
|
|||||
Accrued
interest and other liabilities
|
36,092
|
33,737
|
|||||
TOTAL
LIABILITIES
|
3,234,456
|
3,092,733
|
|||||
SHAREHOLDERS'
EQUITY
|
|||||||
Common
stock - no par value Authorized - 160,000,000 shares Issued -
48,558,614
shares in 2008 and 2007
|
391,249
|
391,962
|
|||||
Retained
earnings
|
80,632
|
82,093
|
|||||
Accumulated
comprehensive loss
|
(6,285
|
)
|
(7,127
|
)
|
|||
Treasury
Stock, at cost 11,082,007 shares in 2008 and 11,190,806 shares in
2007
|
(188,376
|
)
|
(190,345
|
)
|
|||
TOTAL
SHAREHOLDERS' EQUITY
|
277,220
|
276,583
|
|||||
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
3,511,676
|
$
|
3,369,316
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Interest
income
|
|||||||||||||
Loans,
including fees
|
$
|
39,754
|
$
|
46,606
|
$
|
122,121
|
$
|
136,961
|
|||||
Investment
securities
|
|||||||||||||
Taxable
|
5,349
|
3,667
|
13,257
|
11,320
|
|||||||||
Tax-exempt
|
631
|
863
|
2,214
|
2,683
|
|||||||||
Total
investment securities interest
|
5,980
|
4,530
|
15,471
|
14,003
|
|||||||||
Federal
funds sold
|
22
|
1,048
|
627
|
4,045
|
|||||||||
Total
interest income
|
45,756
|
52,184
|
138,219
|
155,009
|
|||||||||
Interest
expense
|
|||||||||||||
Deposits
|
13,608
|
20,528
|
45,982
|
58,946
|
|||||||||
Short-term
borrowings
|
1,720
|
1,041
|
3,642
|
3,021
|
|||||||||
Long-term
borrowings
|
707
|
532
|
1,497
|
1,633
|
|||||||||
Subordinated
debentures and capital securities
|
311
|
666
|
1,025
|
1,988
|
|||||||||
Total
interest expense
|
16,346
|
22,767
|
52,146
|
65,588
|
|||||||||
Net
interest income
|
29,410
|
29,417
|
86,073
|
89,421
|
|||||||||
Provision
for loan and lease losses
|
3,219
|
2,558
|
8,935
|
6,012
|
|||||||||
Net
interest income after provision for loan and lease losses
|
26,191
|
26,859
|
77,138
|
83,409
|
|||||||||
Noninterest
income
|
|||||||||||||
Service
charges on deposit accounts
|
5,348
|
5,396
|
14,906
|
15,436
|
|||||||||
Trust
and wealth management fees
|
4,390
|
4,721
|
13,666
|
13,407
|
|||||||||
Bankcard
income
|
1,405
|
1,422
|
4,196
|
4,086
|
|||||||||
Net
gains from sales of loans
|
376
|
203
|
783
|
549
|
|||||||||
Gain
on sale of mortgage servicing rights
|
0
|
0
|
0
|
1,061
|
|||||||||
Gains
on sales of investment securities
|
0
|
367
|
1,585
|
367
|
|||||||||
Loss
on preferred securities
|
(3,400
|
)
|
0
|
(3,601
|
)
|
0
|
|||||||
Other
|
2,359
|
2,341
|
7,566
|
8,420
|
|||||||||
Total
noninterest income
|
10,478
|
14,450
|
39,101
|
43,326
|
|||||||||
Noninterest
expenses
|
|||||||||||||
Salaries
and employee benefits
|
16,879
|
17,288
|
49,847
|
53,383
|
|||||||||
Net
occupancy
|
2,538
|
2,728
|
8,000
|
8,019
|
|||||||||
Furniture
and equipment
|
1,690
|
1,684
|
4,960
|
5,019
|
|||||||||
Data
processing
|
791
|
1,010
|
2,398
|
2,673
|
|||||||||
Marketing
|
622
|
407
|
1,613
|
1,918
|
|||||||||
Communication
|
601
|
664
|
2,155
|
2,327
|
|||||||||
Professional
services
|
729
|
964
|
2,551
|
3,033
|
|||||||||
Other
|
4,490
|
3,980
|
13,805
|
13,003
|
|||||||||
Total
noninterest expenses
|
28,340
|
28,725
|
85,329
|
89,375
|
|||||||||
Income
before income taxes
|
8,329
|
12,584
|
30,910
|
37,360
|
|||||||||
Income
tax expense
|
2,597
|
4,211
|
10,032
|
12,380
|
|||||||||
Net
income
|
$
|
5,732
|
$
|
8,373
|
$
|
20,878
|
$
|
24,980
|
|||||
Earnings
per share - basic
|
$
|
0.15
|
$
|
0.22
|
$
|
0.56
|
$
|
0.64
|
|||||
Earnings
per share - diluted
|
$
|
0.15
|
$
|
0.22
|
$
|
0.56
|
$
|
0.64
|
|||||
Cash
dividends declared per share
|
$
|
0.17
|
$
|
0.16
|
$
|
0.51
|
$
|
0.48
|
|||||
Average
basic shares outstanding
|
37,132,864
|
38,383,228
|
37,104,793
|
38,820,545
|
|||||||||
Average
diluted shares outstanding
|
37,504,231
|
38,383,228
|
37,487,037
|
38,825,940
|
Nine months ended
|
|||||||
September 30,
|
|||||||
2008
|
2007
|
||||||
Operating
activities
|
|||||||
Net
income
|
$
|
20,878
|
$
|
24,980
|
|||
Adjustments
to reconcile net cash provided by operating activities
|
|||||||
Provision
for loan and lease losses
|
8,935
|
6,012
|
|||||
Depreciation
and amortization
|
5,021
|
6,039
|
|||||
Stock-based
compensation expense
|
1,440
|
845
|
|||||
Pension
expense
|
998
|
2,053
|
|||||
Net
amortization of premiums and accretion of discounts on investment
securities
|
115
|
109
|
|||||
Gains
on sales of investment securities
|
(1,585
|
)
|
(367
|
)
|
|||
Loss
on trading securities
|
3,602
|
0
|
|||||
Originations
of loans held for sale
|
(68,568
|
)
|
(68,027
|
)
|
|||
Net
gains from sales of loans held for sale
|
(783
|
)
|
(549
|
)
|
|||
Proceeds
from sales of loans held for sale
|
68,180
|
76,564
|
|||||
Deferred
income taxes
|
(1,205
|
)
|
(2,476
|
)
|
|||
Decrease
(increase) in interest receivable
|
2,605
|
(3,170
|
)
|
||||
Increase
in cash surrender value of life insurance
|
(3,043
|
)
|
(3,983
|
)
|
|||
Increase in
prepaid expenses
|
(265
|
)
|
(1,886
|
)
|
|||
(Decrease)
increase in accrued expenses
|
(2,601
|
)
|
593
|
||||
(Decrease)
increase in interest payable
|
(2,117
|
)
|
1,911
|
||||
Other
|
455
|
9,397
|
|||||
Net
cash provided by operating activities
|
32,062
|
48,045
|
|||||
Investing
activities
|
|||||||
Proceeds
from sales of securities available-for-sale
|
1,124
|
392
|
|||||
Proceeds
from calls, paydowns and maturities of securities
available-for-sale
|
72,487
|
41,219
|
|||||
Purchases
of securities available-for-sale
|
(197,972
|
)
|
(26,346
|
)
|
|||
Proceeds
from calls, paydowns and maturities of securities
held-to-maturity
|
602
|
3,162
|
|||||
Purchases
of securities held-to-maturity
|
0
|
(634
|
)
|
||||
Purchases
of FHLB stock
|
(1,007
|
)
|
0
|
||||
Net
decrease in federal funds sold
|
106,990
|
30,300
|
|||||
Net increase
in loans and leases
|
(143,909
|
)
|
(123,437
|
)
|
|||
Proceeds
from surrender of life insurance policies
|
0
|
10,823
|
|||||
Proceeds
from disposal of other real estate owned
|
1,578
|
1,308
|
|||||
Purchases
of premises and equipment
|
(8,095
|
)
|
(4,378
|
)
|
|||
Net
cash used in investing activities
|
(168,202
|
)
|
(67,591
|
)
|
|||
|
|||||||
Financing
activities
|
|||||||
Net
(decrease) increase in total deposits
|
(182,510
|
)
|
51,923
|
||||
Net increase
in short-term borrowings
|
215,206
|
4,548
|
|||||
Payments
on long-term borrowings
|
(8,328
|
)
|
(8,445
|
)
|
|||
Proceeds
from long-term borrowings
|
115,000
|
0
|
|||||
Redemption
of junior subordinated debt
|
0
|
(10,000
|
)
|
||||
Cash
dividends paid
|
(19,080
|
)
|
(18,774
|
)
|
|||
Purchase
of common stock
|
0
|
(26,834
|
)
|
||||
Proceeds
from exercise of stock options
|
0
|
81
|
|||||
Excess
tax (liability) benefit on share-based compensation
|
(31
|
)
|
54
|
||||
Net
cash provided by (used in) financing activities
|
120,257
|
(7,447
|
)
|
||||
Cash
and cash equivalents:
|
|||||||
Net
decrease in cash and cash equivalents
|
(15,883
|
)
|
(26,993
|
)
|
|||
Cash
and cash equivalents at beginning of period
|
106,224
|
119,407
|
|||||
Cash
and cash equivalents at end of period
|
$
|
90,341
|
$
|
92,414
|
|
|
|
|
Accumulated comprehensive income (loss)
|
|
|
|
|||||||||||||||||||||
|
Common
|
Common
|
|
Unrealized gain
|
|
|
|
|
|
|||||||||||||||||||
|
Stock
|
Stock
|
Retained
|
(loss) on AFS
|
Pension
|
Unrealized gain
|
Treasury stock
|
|
||||||||||||||||||||
|
Shares
|
Amount
|
earnings
|
Securities
|
Obligation
|
on Derivatives
|
Shares
|
Amount
|
Total
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance
at December 31, 2006
|
48,558,614
|
$
|
392,736
|
$
|
71,320
|
($420
|
)
|
($12,955
|
)
|
$
|
0
|
(9,313,207
|
)
|
($165,202
|
)
|
$
|
285,479
|
|||||||||||
Net
income
|
|
|
24,980
|
|
|
|
|
|
24,980
|
|||||||||||||||||||
Unrealized
holding losses on securities available-for-sale arising during the
period
|
|
|
|
(855
|
)
|
|
|
|
|
(855
|
)
|
|||||||||||||||||
Changes
in accumulated unrealized losses for pension and other postretirement
obligations
|
|
|
|
|
6,661
|
|
|
|
6,661
|
|||||||||||||||||||
Unrealized
gain on derivatives
|
|
|
|
|
|
0
|
|
|
0
|
|||||||||||||||||||
Total
comprehensive income
|
|
|
|
|
|
|
|
|
30,786
|
|||||||||||||||||||
Cash
dividends declared ($0.48 per share)
|
|
|
(18,555
|
)
|
|
|
|
|
|
(18,555
|
)
|
|||||||||||||||||
Purchase
of common stock
|
|
|
|
|
|
|
(1,965,700
|
)
|
(26,834
|
)
|
(26,834
|
)
|
||||||||||||||||
Tax
benefit on stock option exercise
|
|
54
|
|
|
|
|
|
|
54
|
|||||||||||||||||||
Exercise
of stock options, net of shares purchased
|
|
(58
|
)
|
|
|
|
|
8,474
|
139
|
81
|
||||||||||||||||||
Restricted
stock awards, net of forfeitures
|
|
(2,222
|
)
|
|
|
|
|
117,252
|
2,069
|
(153
|
)
|
|||||||||||||||||
Share-based
compensation expense
|
|
845
|
|
|
|
|
|
|
845
|
|||||||||||||||||||
Balances
at September 30, 2007
|
48,558,614
|
$
|
391,355
|
$
|
77,745
|
$
|
(1,275
|
)
|
$
|
(6,294
|
)
|
$
|
0
|
(11,153,181
|
)
|
$
|
(189,828
|
)
|
$
|
271,703
|
|
|
|
|
Accumulated comprehensive income (loss)
|
|
|
|
|||||||||||||||||||||
|
Common
|
Common
|
|
Unrealized gain
|
|
|
|
|
|
|||||||||||||||||||
|
Stock
|
Stock
|
Retained
|
(loss) on AFS
|
Pension
|
Unrealized gain
|
Treasury stock
|
|
||||||||||||||||||||
|
Shares
|
Amount
|
earnings
|
Securities
|
Obligation
|
on Derivatives
|
Shares
|
Amount
|
Total
|
|||||||||||||||||||
Balances
at December 31, 2007
|
48,558,614
|
$
|
391,962
|
$
|
82,093
|
$
|
328
|
$
|
(7,455
|
)
|
$
|
0
|
(11,190,806
|
)
|
$
|
(190,345
|
)
|
$
|
276,583
|
|||||||||
Cumulative
adjustment for accounting changes:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fair
value option
|
|
|
(750
|
)
|
750
|
|
|
|
|
0
|
||||||||||||||||||
Issue
No. EITF 06-4
|
|
|
(2,499
|
)
|
|
|
|
|
|
(2,499
|
)
|
|||||||||||||||||
Net
income
|
|
|
20,878
|
|
|
|
|
|
20,878
|
|||||||||||||||||||
Unrealized
holding losses on securities available-for-sale arising during the
period
|
|
|
|
(560
|
)
|
|
|
|
|
(560
|
)
|
|||||||||||||||||
Changes
in accumulated unrealized losses for pension and other postretirement
obligations
|
|
|
|
|
279
|
|
|
|
279
|
|||||||||||||||||||
Unrealized
gain on derivatives
|
|
|
|
|
|
373
|
|
|
373
|
|||||||||||||||||||
Total
comprehensive income
|
|
|
|
|
|
|
|
|
20,970
|
|||||||||||||||||||
Cash
dividends declared ($0.51 per share)
|
|
|
(19,090
|
)
|
|
|
|
|
|
(19,090
|
)
|
|||||||||||||||||
Purchase
of common stock
|
|
|
|
|
|
|
|
|
0
|
|||||||||||||||||||
Tax
liability on stock option exercise
|
|
(31
|
)
|
|
|
|
|
|
|
(31
|
)
|
|||||||||||||||||
Exercise
of stock options, net of shares purchased
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Restricted
stock awards, net of forfeitures
|
|
(2,122
|
)
|
|
|
|
|
108,799
|
1,969
|
(153
|
)
|
|||||||||||||||||
Share-based
compensation expense
|
|
1,440
|
|
|
|
|
|
|
1,440
|
|||||||||||||||||||
Balances
at September 30, 2008
|
48,558,614
|
$
|
391,249
|
$
|
80,632
|
$
|
518
|
$
|
(7,176
|
)
|
$
|
373
|
(11,082,007
|
)
|
$
|
(188,376
|
)
|
$
|
277,220
|
Held-to-Maturity
|
Available-for-Sale
|
||||||||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Market
|
Amortized
|
Unrealized
|
Unrealized
|
Market
|
||||||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||||
Securities
of U.S. government agencies and corporations
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
64,962
|
$
|
790
|
$
|
0
|
$
|
65,752
|
|||||||||
Mortgage-backed
securities
|
204
|
0
|
(1
|
)
|
203
|
382,699
|
1,613
|
(1,829
|
)
|
382,483
|
|||||||||||||||
Obligations
of state and other political subdivisions
|
4,833
|
195
|
(1
|
)
|
5,027
|
39,486
|
453
|
(101
|
)
|
39,838
|
|||||||||||||||
Other
securities
|
0
|
0
|
0
|
0
|
4,593
|
126
|
(238
|
)
|
4,481
|
||||||||||||||||
Total
|
$
|
5,037
|
$
|
195
|
$
|
(2
|
)
|
$
|
5,230
|
$
|
491,740
|
$
|
2,982
|
$
|
(2,168
|
)
|
$
|
492,554
|
Held-to-Maturity
|
Available-for-Sale
|
||||||||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Market
|
Amortized
|
Unrealized
|
Unrealized
|
Market
|
||||||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||||||||
Securities
of U.S. government agencies and corporations
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
85,124
|
$
|
705
|
$
|
(39
|
)
|
$
|
85,790
|
||||||||
Mortgage-backed
securities
|
274
|
2
|
(1
|
)
|
275
|
151,753
|
1,219
|
(1,198
|
)
|
151,774
|
|||||||||||||||
Obligations
of state and other political subdivisions
|
5,365
|
183
|
(9
|
)
|
5,539
|
59,475
|
925
|
(39
|
)
|
60,361
|
|||||||||||||||
Other
securities
|
0
|
0
|
0
|
0
|
10,060
|
222
|
(1,279
|
)
|
9,003
|
||||||||||||||||
Total
|
$
|
5,639
|
$
|
185
|
$
|
(10
|
)
|
$
|
5,814
|
$
|
306,412
|
$
|
3,071
|
$
|
(2,555
|
)
|
$
|
306,928
|
September 30, 2008
|
December 31, 2007
|
September 30, 2007
|
||||||||||||||||||||||||||
Notional
|
Estimated
Fair Value
|
Notional
|
Estimated
Fair Value
|
Notional
|
Estimated
Fair Value
|
|||||||||||||||||||||||
Amount
|
Gain
|
(Loss)
|
Amount
|
Gain
|
(Loss)
|
Amount
|
Gain
|
(Loss)
|
||||||||||||||||||||
Fair
Value Hedges
|
||||||||||||||||||||||||||||
Pay
fixed interest rate swaps
|
$
|
24,923
|
$
|
19
|
$
|
(997
|
)
|
$
|
28,903
|
$
|
79
|
$
|
(866
|
)
|
$
|
29,126
|
$
|
384
|
$
|
(256
|
)
|
|||||||
Cash Flow Hedge | ||||||||||||||||||||||||||||
Prime
swap
|
50,000
|
373
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Matched
Client Hedges
|
||||||||||||||||||||||||||||
Client
interest rate swaps with bank
|
106,466
|
4,110
|
(32
|
)
|
51,480
|
2,702
|
0
|
38,590
|
1,052
|
0
|
||||||||||||||||||
Bank
interest rate swaps with counterparty
|
106,466
|
32
|
(4,110
|
)
|
51,480
|
0
|
(2,702
|
)
|
38,590
|
0
|
(1,052
|
)
|
||||||||||||||||
Total
|
$
|
287,855
|
$
|
4,534
|
$
|
(5,139
|
)
|
$
|
131,863
|
$
|
2,781
|
$
|
(3,568
|
)
|
$
|
106,306
|
$
|
1,436
|
$
|
(1,308
|
)
|
(dollars
in $000’s)
|
Amount
|
Rate
|
Maturity
Date
|
|||||||
First
Financial (OH) Statutory Trust II
|
$
|
20,000
|
5.90
|
%
|
9/30/33
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||
2008
|
2007
|
Sep. 30,
|
||||||||||||||||||||
Sep. 30
|
June 30
|
Mar. 30
|
Dec. 31
|
Sep. 30
|
2008
|
2007
|
||||||||||||||||
Balance
at beginning of period
|
$
|
29,580
|
$
|
29,718
|
$
|
29,057
|
$
|
29,136
|
$
|
28,060
|
$
|
29,057
|
$
|
27,386
|
||||||||
Provision
for loan losses
|
3,219
|
2,493
|
3,223
|
1,640
|
2,558
|
8,935
|
6,012
|
|||||||||||||||
Loans
charged off
|
(2,936
|
)
|
(3,195
|
)
|
(3,103
|
)
|
(3,042
|
)
|
(2,097
|
)
|
(9,234
|
)
|
(6,380
|
)
|
||||||||
Recoveries
|
490
|
564
|
541
|
1,323
|
615
|
1,595
|
2,118
|
|||||||||||||||
Balance
at end of period
|
$
|
30,353
|
$
|
29,580
|
$
|
29,718
|
$
|
29,057
|
$
|
29,136
|
$
|
30,353
|
$
|
29,136
|
||||||||
Allowance
for loan and lease losses to total ending loans
|
1.14
|
%
|
1.11
|
%
|
1.14
|
%
|
1.12
|
%
|
1.12
|
%
|
1.14
|
%
|
1.12
|
%
|
As of and for the Quarter Ended
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Sep. 30
|
June 30
|
Mar. 31
|
Dec. 31
|
Sep. 30
|
||||||||||||
Impaired
loans requiring a valuation
|
$
|
5,642
|
$
|
5,279
|
$
|
4,721
|
$
|
4,822
|
$
|
5,325
|
||||||
Valuation
allowance
|
$
|
2,322
|
$
|
2,106
|
$
|
2,125
|
$
|
2,705
|
$
|
2,756
|
||||||
Average
impaired loans for the period
|
$
|
6,072
|
$
|
5,502
|
$
|
4,939
|
$
|
9,755
|
$
|
8,921
|
|
Three months ended
|
Nine months ended
|
|||||||||||
|
September 30,
|
September 30,
|
|||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||
|
|
|
|
|
|||||||||
Service
cost
|
$
|
562
|
$
|
881
|
$
|
1,679
|
$
|
2,582
|
|||||
Interest
cost
|
637
|
686
|
1,922
|
2,172
|
|||||||||
Expected
return on plan assets
|
(1,000
|
)
|
(1,084
|
)
|
(3,049
|
)
|
(3,327
|
)
|
|||||
Amortization
of transition asset
|
(9
|
)
|
(12
|
)
|
(26
|
)
|
(36
|
)
|
|||||
Amortization
of prior service cost
|
(105
|
)
|
(45
|
)
|
(317
|
)
|
(20
|
)
|
|||||
Amortization
of actuarial loss
|
308
|
229
|
789
|
682
|
|||||||||
Net
periodic benefit cost
|
$
|
393
|
$
|
655
|
$
|
998
|
$
|
2,053
|
|
Three months ended
|
Nine months ended
|
|||||||||||
|
September 30,
|
September 30,
|
|||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||
|
|
|
|
|
|||||||||
Net
actuarial loss
|
$
|
308
|
$
|
229
|
$
|
789
|
$
|
682
|
|||||
Net
prior service credit
|
(105
|
)
|
(45
|
)
|
(317
|
)
|
(20
|
)
|
|||||
Net
transition asset
|
(9
|
)
|
(12
|
)
|
(26
|
)
|
(36
|
)
|
|||||
Deferred
tax assets
|
(80
|
)
|
(3,698
|
)
|
(172
|
)
|
(3,864
|
)
|
|||||
Prior
service credit
|
0
|
7,003
|
0
|
7,003
|
|||||||||
Settlements
|
0
|
2,898
|
0
|
2,898
|
|||||||||
Net
amount recognized
|
$
|
114
|
$
|
6,375
|
$
|
274
|
$
|
6,663
|
Jan. 1, 2008
Balance Sheet
Prior to
Adoption
|
Adoption Impact
|
Jan. 1, 2008
Balance Sheet
After Adoption
|
||||||||
Trading
investment securities
|
$
|
0
|
$
|
3,799
|
$
|
3,799
|
||||
Available-for-sale
investment securities
|
306,928
|
(3,799
|
)
|
303,129
|
||||||
Accumulated
comprehensive income (loss)
|
(7,127
|
)
|
750
|
(6,377
|
)
|
|||||
Cumulative
effect of adoption of the FVO – charge to retained earnings
(1)
|
$
|
750
|
||||||||
Retained
earnings
|
$
|
82,093
|
($750
|
)
|
$
|
81,343
|
Fair Value Measurements Using
|
Netting
|
Assets/Liabilities at
|
||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Adjustments (1)
|
Fair Value
|
|||||||||||
Assets
|
||||||||||||||||
Trading
investment securities (2)
|
$
|
198
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
198
|
||||||
Derivatives
|
0
|
4,534
|
0
|
(4,142
|
)
|
392
|
||||||||||
Available-for-sale
investment securities
|
190
|
492,364
|
0
|
0
|
492,554
|
|||||||||||
Total
|
$
|
388
|
$
|
496,898
|
$
|
0
|
$
|
(4,142
|
)
|
$
|
493,144
|
|||||
Liabilities
|
||||||||||||||||
Derivatives
|
$
|
0
|
$
|
5,139
|
$
|
0
|
$
|
(4,142
|
)
|
$
|
997
|
Fair
Value Measurements Using
|
Year-to-Date
Gains
(Losses)
|
||||||||||||
Level
1
|
Level
2
|
Level
3
|
|||||||||||
Assets
|
|||||||||||||
Loans
held for sale
|
$
|
0
|
$
|
2,437
|
$
|
0
|
$
|
0
|
|||||
Impaired
loans
(1)
|
0
|
2,821
|
82
|
0
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
September 30,
|
|||||||||||
(dollars in $000’s)
|
2008
|
2007
|
2008
|
2007
|
|||||||||
Net interest income
|
$
|
29,410
|
$
|
29,417
|
$
|
86,073
|
$
|
89,421
|
|||||
Tax equivalent adjustment
|
424
|
564
|
1,448
|
1,720
|
|||||||||
Net
interest income - tax equivalent
|
$
|
29,834
|
$
|
29,981
|
$
|
87,521
|
$
|
91,141
|
|||||
Average
earning assets
|
$
|
3,180,290
|
$
|
3,007,663
|
$
|
3,087,925
|
$
|
2,996,267
|
|||||
Net
interest margin *
|
3.68
|
%
|
3.88
|
%
|
3.72
|
%
|
3.99
|
%
|
|||||
Net
interest margin (fully tax equivalent) *
|
3.73
|
%
|
3.95
|
%
|
3.79
|
%
|
4.07
|
%
|
*
Margins are calculated using net interest income annualized divided
by
average earning assets.
|
September
30, 2008
|
June
30, 2008
|
September
30, 2007
|
||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||||
Earning
Assets
|
||||||||||||||||||||||||||||
Investments:
|
||||||||||||||||||||||||||||
Federal
funds sold
|
$
|
3,137
|
$
|
22
|
2.79
|
%
|
$
|
4,095
|
$
|
40
|
3.93
|
%
|
$
|
81,669
|
$
|
1,048
|
5.09
|
%
|
||||||||||
Investment
securities
|
467,524
|
5,980
|
5.09
|
%
|
422,463
|
5,179
|
4.93
|
%
|
349,686
|
4,530
|
5.14
|
%
|
||||||||||||||||
Loans
(1):
|
||||||||||||||||||||||||||||
Commercial
loans
|
819,199
|
11,364
|
5.52
|
%
|
805,122
|
11,302
|
5.65
|
%
|
766,479
|
15,421
|
7.98
|
%
|
||||||||||||||||
Real
estate – construction
|
192,731
|
2,364
|
4.88
|
%
|
179,078
|
2,287
|
5.14
|
%
|
139,291
|
2,693
|
7.67
|
%
|
||||||||||||||||
Real
estate – commercial
|
797,143
|
12,566
|
6.27
|
%
|
747,077
|
12,059
|
6.49
|
%
|
682,287
|
11,951
|
6.95
|
%
|
||||||||||||||||
Real
estate – residential
|
492,169
|
6,888
|
5.57
|
%
|
511,871
|
7,221
|
5.67
|
%
|
567,910
|
8,022
|
5.60
|
%
|
||||||||||||||||
Installment
|
110,933
|
1,845
|
6.62
|
%
|
121,000
|
2,012
|
6.69
|
%
|
155,505
|
2,438
|
6.22
|
%
|
||||||||||||||||
Home
equity
|
270,659
|
3,665
|
5.39
|
%
|
257,954
|
3,725
|
5.81
|
%
|
239,693
|
4,864
|
8.05
|
%
|
||||||||||||||||
Credit
card
|
26,692
|
658
|
9.81
|
%
|
26,043
|
657
|
10.15
|
%
|
24,586
|
727
|
11.73
|
%
|
||||||||||||||||
Lease
financing
|
103
|
1
|
3.86
|
%
|
182
|
3
|
6.63
|
%
|
557
|
9
|
6.41
|
%
|
||||||||||||||||
Loan
fees
|
403
|
380
|
481
|
|||||||||||||||||||||||||
Total
loans
|
2,709,629
|
39,754
|
5.84
|
%
|
2,648,327
|
39,646
|
6.02
|
%
|
2,576,308
|
46,606
|
7.18
|
%
|
||||||||||||||||
Total
earning assets
|
3,180,290
|
45,756
|
5.72
|
%
|
3,074,885
|
44,865
|
5.87
|
%
|
3,007,663
|
52,184
|
6.88
|
%
|
||||||||||||||||
Nonearning
Assets
|
||||||||||||||||||||||||||||
Cash
and due from banks
|
89,498
|
81,329
|
85,576
|
|||||||||||||||||||||||||
Allowance
for loan and lease losses
|
(29,739
|
)
|
(29,248
|
)
|
(28,278
|
)
|
||||||||||||||||||||||
Premises
and equipment
|
81,000
|
78,933
|
79,102
|
|||||||||||||||||||||||||
Other
assets
|
155,599
|
155,750
|
165,737
|
|||||||||||||||||||||||||
Total
assets
|
$
|
3,476,648
|
$
|
3,361,649
|
$
|
3,309,800
|
||||||||||||||||||||||
Interest-bearing
liabilities
|
||||||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||||||
Interest-bearing
|
$
|
609,992
|
1,175
|
0.77
|
%
|
$
|
590,464
|
1,089
|
0.74
|
%
|
$
|
632,890
|
3,462
|
2.17
|
%
|
|||||||||||||
Savings
|
611,713
|
1,227
|
0.80
|
%
|
617,029
|
1,321
|
0.86
|
%
|
586,065
|
2,932
|
1.98
|
%
|
||||||||||||||||
Time
|
1,158,332
|
11,206
|
3.85
|
%
|
1,193,447
|
12,225
|
4.12
|
%
|
1,231,875
|
14,134
|
4.55
|
%
|
||||||||||||||||
Short-term
borrowings
|
297,053
|
1,720
|
2.30
|
%
|
194,183
|
1,130
|
2.34
|
%
|
88,299
|
1,041
|
4.68
|
%
|
||||||||||||||||
Long-term
borrowings
|
97,655
|
1,018
|
4.15
|
%
|
62,226
|
686
|
4.43
|
%
|
88,229
|
1,198
|
5.39
|
%
|
||||||||||||||||
Total
interest-bearing liabilities
|
2,774,745
|
16,346
|
2.34
|
%
|
2,657,349
|
16,451
|
2.49
|
%
|
2,627,358
|
22,767
|
3.44
|
%
|
||||||||||||||||
Noninterest-bearing
liabilities and shareholders’ equity
|
||||||||||||||||||||||||||||
Noninterest-bearing
demand
|
402,604
|
394,352
|
385,653
|
|||||||||||||||||||||||||
Other
liabilities
|
22,705
|
31,145
|
20,606
|
|||||||||||||||||||||||||
Shareholders’
equity
|
276,594
|
278,803
|
276,183
|
|||||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$
|
3,476,648
|
$
|
3,361,649
|
$
|
3,309,800
|
||||||||||||||||||||||
Net
interest income
|
$
|
29,410
|
$
|
28,414
|
$
|
29,417
|
||||||||||||||||||||||
Net
interest spread
|
3.38
|
%
|
3.38
|
%
|
3.44
|
%
|
||||||||||||||||||||||
Contribution
of noninterest-bearing sources of funds
|
0.30
|
%
|
0.34
|
%
|
0.44
|
%
|
||||||||||||||||||||||
Net
interest margin (2)
|
3.68
|
%
|
3.72
|
%
|
3.88
|
%
|
(1)
Nonaccrual loans and loans held for sale are included in average
balances
for each applicable loan category.
|
(2)
Because noninterest-bearing funding sources, demand deposits, other
liabilities, and shareholders’ equity also support earning assets, the net
interest margin exceeds the interest
spread.
|
Changes for the Three Months Ended September 30
|
|||||||||||||||||||
Linked Qtr. Income Variance
|
Comparable Qtr. Income Variance
|
||||||||||||||||||
Rate
|
Volume
|
Total
|
Rate
|
Volume
|
Total
|
||||||||||||||
Earning
assets
|
|||||||||||||||||||
Investment
securities
|
$
|
166
|
$
|
635
|
$
|
801
|
$
|
(57
|
)
|
$
|
1,507
|
$
|
1,450
|
||||||
Federal
funds sold
|
(12
|
)
|
(6
|
)
|
(18
|
)
|
(475
|
)
|
(551
|
)
|
(1,026
|
)
|
|||||||
Gross
loans
(1)
|
(1,214
|
)
|
1,322
|
108
|
(8,808
|
)
|
1,956
|
(6,852
|
)
|
||||||||||
Total
earning assets
|
(1,060
|
)
|
1,951
|
891
|
(9,340
|
)
|
2,912
|
(6,428
|
)
|
||||||||||
Interest-bearing
liabilities
|
|||||||||||||||||||
Total
interest-bearing deposits
|
$
|
(1,057
|
)
|
$
|
30
|
$
|
(1,027
|
)
|
$
|
(6,515
|
)
|
$
|
(405
|
)
|
$
|
(6,920
|
)
|
||
Borrowed
funds
|
|||||||||||||||||||
Short-term
borrowings
|
(18
|
)
|
608
|
590
|
(530
|
)
|
1,209
|
679
|
|||||||||||
Federal
Home Loan Bank long-term debt
|
(6
|
)
|
329
|
323
|
(1
|
)
|
176
|
175
|
|||||||||||
Other
long-term debt
|
6
|
3
|
9
|
(208
|
)
|
(147
|
)
|
(355
|
)
|
||||||||||
Total
borrowed funds
|
(18
|
)
|
940
|
922
|
(739
|
)
|
1,238
|
499
|
|||||||||||
Total
interest-bearing liabilities
|
(1,075
|
)
|
970
|
(105
|
)
|
(7,254
|
)
|
833
|
(6,421
|
)
|
|||||||||
Net
interest income
(2)
|
$
|
15
|
$
|
981
|
$
|
996
|
$
|
(2,086
|
)
|
$
|
2,079
|
$
|
(7
|
)
|
Changes for the Nine Months Ended September 30
|
||||||||||
Year-to-Date Income Variance
|
||||||||||
Rate
|
Volume
|
Total
|
||||||||
Earning assets
|
||||||||||
Investment
securities
|
$
|
(472
|
)
|
$
|
1,940
|
$
|
1,468
|
|||
Federal
funds sold
|
(1,378
|
)
|
(2,040
|
)
|
(3,418
|
)
|
||||
Gross
loans
(1)
|
(20,319
|
)
|
5,479
|
(14,840
|
)
|
|||||
Total
earning assets
|
(22,169
|
)
|
5,379
|
(16,790
|
)
|
|||||
Interest-bearing
liabilities
|
||||||||||
Total
interest-bearing deposits
|
$
|
(12,783
|
)
|
$
|
(181
|
)
|
$
|
(12,964
|
)
|
|
Borrowed
funds
|
||||||||||
Short-term
borrowings
|
(1,379
|
)
|
2,000
|
621
|
||||||
Federal
Home Loan Bank long-term debt
|
13
|
(149
|
)
|
(136
|
)
|
|||||
Other
long-term debt
|
(460
|
)
|
(503
|
)
|
(963
|
)
|
||||
Total
borrowed funds
|
(1,826
|
)
|
1,348
|
(478
|
)
|
|||||
Total
interest-bearing liabilities
|
(14,609
|
)
|
1,167
|
(13,442
|
)
|
|||||
Net
interest income
(2)
|
$
|
(7,560
|
)
|
$
|
4,212
|
$
|
(3,348
|
)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||
2008
|
2007
|
Sep. 30,
|
||||||||||||||||||||
Sep. 30
|
June 30
|
Mar. 31
|
Dec. 31
|
Sep. 30
|
2008
|
2007
|
||||||||||||||||
ALLOWANCE FOR
LOAN AND LEASE LOSS ACTIVITY
|
||||||||||||||||||||||
Balance
at beginning of period
|
$
|
29,580
|
$
|
29,718
|
$
|
29,057
|
$
|
29,136
|
$
|
28,060
|
$
|
29,057
|
$
|
27,386
|
||||||||
Provision
for loan losses
|
3,219
|
2,493
|
3,223
|
1,640
|
2,558
|
8,935
|
6,012
|
|||||||||||||||
Gross
charge-offs
|
||||||||||||||||||||||
Commercial
|
1,568
|
946
|
545
|
1,433
|
1,008
|
3,059
|
2,674
|
|||||||||||||||
Real
estate - commercial
|
48
|
589
|
806
|
465
|
76
|
1,443
|
398
|
|||||||||||||||
Real
estate - residential
|
335
|
227
|
39
|
33
|
49
|
601
|
222
|
|||||||||||||||
Installment
|
424
|
482
|
564
|
522
|
471
|
1,470
|
1,816
|
|||||||||||||||
Home
equity
|
135
|
525
|
651
|
285
|
189
|
1,311
|
477
|
|||||||||||||||
All
other
|
426
|
426
|
498
|
304
|
304
|
1,350
|
793
|
|||||||||||||||
Total
gross charge-offs
|
2,936
|
3,195
|
3,103
|
3,042
|
2,097
|
9,234
|
6,380
|
|||||||||||||||
Recoveries
|
||||||||||||||||||||||
Commercial
|
179
|
166
|
144
|
342
|
145
|
489
|
660
|
|||||||||||||||
Real
estate - commercial
|
37
|
19
|
3
|
632
|
124
|
59
|
230
|
|||||||||||||||
Real
estate - residential
|
4
|
5
|
11
|
3
|
25
|
20
|
53
|
|||||||||||||||
Installment
|
225
|
246
|
315
|
242
|
263
|
786
|
897
|
|||||||||||||||
Home
equity
|
0
|
30
|
0
|
19
|
12
|
30
|
113
|
|||||||||||||||
All
other
|
45
|
98
|
68
|
85
|
46
|
211
|
165
|
|||||||||||||||
Total
recoveries
|
490
|
564
|
541
|
1,323
|
615
|
1,595
|
2,118
|
|||||||||||||||
Total
net charge-offs
|
2,446
|
2,631
|
2,562
|
1,719
|
1,482
|
7,639
|
4,262
|
|||||||||||||||
Ending
allowance for loan losses
|
$
|
30,353
|
$
|
29,580
|
$
|
29,718
|
$
|
29,057
|
$
|
29,136
|
$
|
30,353
|
$
|
29,136
|
||||||||
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED) | ||||||||||||||||||||||
Commercial
|
0.67
|
%
|
0.39
|
%
|
0.21
|
%
|
0.56
|
%
|
0.45
|
%
|
0.43
|
%
|
0.37
|
%
|
||||||||
Real
estate - commercial
|
0.01
|
%
|
0.31
|
%
|
0.46
|
%
|
(0.10
|
)%
|
(0.03
|
)%
|
0.25
|
%
|
0.03
|
%
|
||||||||
Real
estate - residential
|
0.27
|
%
|
0.18
|
%
|
0.02
|
%
|
0.02
|
%
|
0.02
|
%
|
0.15
|
%
|
0.04
|
%
|
||||||||
Installment
|
0.71
|
%
|
0.78
|
%
|
0.75
|
%
|
0.76
|
%
|
0.53
|
%
|
0.75
|
%
|
0.72
|
%
|
||||||||
Home
equity
|
0.20
|
%
|
0.77
|
%
|
1.04
|
%
|
0.43
|
%
|
0.29
|
%
|
0.66
|
%
|
0.21
|
%
|
||||||||
All
other
|
0.69
|
%
|
0.64
|
%
|
0.92
|
%
|
0.48
|
%
|
0.62
|
%
|
0.74
|
%
|
0.58
|
%
|
||||||||
Total
net charge-offs
|
0.36
|
%
|
0.40
|
%
|
0.40
|
%
|
0.26
|
%
|
0.23
|
%
|
0.39
|
%
|
0.23
|
%
|
Quarter Ended
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Sep. 30
|
June 30
|
Mar. 31
|
Dec. 31
|
Sep. 30
|
||||||||||||
Nonaccrual loans
|
||||||||||||||||
Commercial
|
$
|
5,194
|
$
|
5,447
|
$
|
3,952
|
$
|
2,677
|
$
|
3,782
|
||||||
Real
estate - commercial
|
3,361
|
3,592
|
4,415
|
5,965
|
5,343
|
|||||||||||
Real
estate - residential
|
3,742
|
4,461
|
4,529
|
3,063
|
2,147
|
|||||||||||
Installment
|
417
|
438
|
544
|
734
|
745
|
|||||||||||
Home
equity
|
1,084
|
866
|
1,221
|
1,662
|
1,117
|
|||||||||||
All
other
|
32
|
8
|
30
|
12
|
8
|
|||||||||||
Total
nonaccrual loans
|
13,830
|
14,812
|
14,691
|
14,113
|
13,142
|
|||||||||||
Restructured
loans
|
208
|
554
|
562
|
567
|
574
|
|||||||||||
Total
nonperforming loans
|
14,038
|
15,366
|
15,253
|
14,680
|
13,716
|
|||||||||||
Other
real estate owned (OREO)
|
4,610
|
3,763
|
2,368
|
2,636
|
3,124
|
|||||||||||
Total
nonperforming assets
|
18,648
|
19,129
|
17,621
|
17,316
|
16,840
|
|||||||||||
Accruing
loans past due 90 days or more
|
241
|
245
|
372
|
313
|
222
|
|||||||||||
Total
underperforming assets
|
$
|
18,889
|
$
|
19,374
|
$
|
17,993
|
$
|
17,629
|
$
|
17,062
|
||||||
Allowance
for loan and lease losses to
|
||||||||||||||||
Nonaccrual
loans
|
219.47
|
%
|
199.70
|
%
|
202.29
|
%
|
205.89
|
%
|
221.70
|
%
|
||||||
Nonperforming
loans
|
216.22
|
%
|
192.50
|
%
|
194.83
|
%
|
197.94
|
%
|
212.42
|
%
|
||||||
Total
ending loans
|
1.14
|
%
|
1.11
|
%
|
1.14
|
%
|
1.12
|
%
|
1.12
|
%
|
||||||
Nonperforming
loans to total loans
|
0.53
|
%
|
0.57
|
%
|
0.58
|
%
|
0.56
|
%
|
0.53
|
%
|
||||||
Nonperforming
assets to
|
||||||||||||||||
Ending
loans, plus OREO
|
0.70
|
%
|
0.71
|
%
|
0.67
|
%
|
0.67
|
%
|
0.65
|
%
|
||||||
Total
assets
|
0.53
|
%
|
0.55
|
%
|
0.53
|
%
|
0.51
|
%
|
0.51
|
%
|
|
|
|
|
To Be Well
|
|||||||||||||||
|
|
|
|
|
Capitalized Under
|
||||||||||||||
|
|
|
For Capital
|
Prompt Corrective
|
|||||||||||||||
|
Actual
|
Adequacy Purposes
|
Action Provisions
|
||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
September
30, 2008
|
|||||||||||||||||||
Total
capital to risk-weighted assets
|
|||||||||||||||||||
Consolidated
|
$
|
304,866
|
10.89
|
%
|
$
|
224,060
|
8.00
|
%
|
N/A
|
10.00
|
%
|
||||||||
First
Financial Bank
|
342,755
|
12.30
|
%
|
222,929
|
8.00
|
%
|
$
|
278,662
|
10.00
|
%
|
|||||||||
|
|||||||||||||||||||
Tier
1 capital to risk-weighted assets
|
|||||||||||||||||||
Consolidated
|
274,513
|
9.80
|
%
|
112,030
|
4.00
|
%
|
N/A
|
6.00
|
%
|
||||||||||
First
Financial Bank
|
304,976
|
10.94
|
%
|
111,465
|
4.00
|
%
|
167,197
|
6.00
|
%
|
||||||||||
|
|||||||||||||||||||
Tier
1 capital to average assets
|
|||||||||||||||||||
Consolidated
|
274,513
|
7.95
|
%
|
137,910
|
4.00
|
%
|
N/A
|
5.00
|
%
|
||||||||||
First
Financial Bank
|
304,976
|
8.86
|
%
|
137,416
|
4.00
|
%
|
171,771
|
5.00
|
%
|
||||||||||
|
|||||||||||||||||||
December
31, 2007
|
|||||||||||||||||||
Total
capital to risk-weighted assets
|
|||||||||||||||||||
Consolidated
|
$
|
303,103
|
11.38
|
%
|
$
|
213,041
|
8.00
|
%
|
N/A
|
10.00
|
%
|
||||||||
First
Financial Bank
|
341,702
|
12.92
|
%
|
211,604
|
8.00
|
%
|
$
|
264,505
|
10.00
|
%
|
|||||||||
|
|||||||||||||||||||
Tier
1 capital to risk-weighted assets
|
|||||||||||||||||||
Consolidated
|
274,046
|
10.29
|
%
|
106,520
|
4.00
|
%
|
N/A
|
6.00
|
%
|
||||||||||
First
Financial Bank
|
305,394
|
11.55
|
%
|
105,802
|
4.00
|
%
|
158,703
|
6.00
|
%
|
||||||||||
|
|||||||||||||||||||
Tier
1 capital to average assets
|
|||||||||||||||||||
Consolidated
|
274,046
|
8.26
|
%
|
132,395
|
4.00
|
%
|
N/A
|
5.00
|
%
|
||||||||||
First
Financial Bank
|
305,394
|
9.30
|
%
|
131,121
|
4.00
|
%
|
163,901
|
5.00
|
%
|
-200 basis points
|
|
-100 basis points
|
|
+100 basis points
|
|
+200 basis points
|
|||||||
September 30, 2008
|
(7.64)
|
%
|
(2.18)
|
%
|
1.30
|
%
|
2.16
|
%
|
-200 basis points
|
|
-100 basis points
|
|
+100 basis points
|
|
+200 basis points
|
|||||||
September
30, 2008
|
(24.53)
|
%
|
(8.08)
|
%
|
3.18
|
%
|
(0.94)
|
%
|
(c)
|
The
following table shows the total number of shares repurchased in
the third
quarter of 2008.
|
|
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||
|
|
Total Number
|
|
||||||||||
|
|
|
of Shares
|
Maximum Number
|
|||||||||
|
Total Number
|
Average
|
Purchased as
|
of Shares that may
|
|||||||||
|
of Shares
|
Price Paid
|
Part of Publicly
|
yet be purchased
|
|||||||||
Period
|
Purchased (1)
|
Per Share
|
Announced Plans (2)
|
Under the Plans
|
|||||||||
July
1 through
|
|||||||||||||
July
31, 2008
|
3,163
|
$
|
9.14
|
0
|
4,969,105
|
||||||||
August
1 through
|
|||||||||||||
August
31, 2008
|
0
|
0
|
0
|
4,969,105
|
|||||||||
September
1 through
|
|||||||||||||
September
30, 2008
|
0
|
0
|
0
|
4,969,105
|
|||||||||
Total
|
3,163
|
$
|
9.14
|
0
|
4,969,105
|
(1)
|
The
number of shares purchased in column (a) and the average price
paid per
share in column (b) include the purchase of shares other than through
publicly announced plans. The shares purchased other than through
publicly
announced plans were purchased pursuant to First Financial’s Thrift Plan,
Director Fee Stock Plan, 1999 Stock Option Plan for Non-Employee
Directors
and 1999 Stock Incentive Plan for Officers and Employees. (The
last two
plans are referred to hereafter as the Stock Option Plans.) The
following
tables show the number of shares purchased pursuant to those plans
and the
average price paid per share. The purchases for the Thrift Plan
and the
Director Fee Stock Plan were made in open-market transactions.
Under the
Stock Option Plans, shares were purchased from plan participants
at the
then current market value in satisfaction of stock option exercise
prices.
|
|
(a)
|
(b)
|
|||||
|
Total Number
|
Average
|
|||||
|
of Shares
|
Price Paid
|
|||||
Period
|
Purchased
|
Per Share
|
|||||
First Financial
Bancorp Thrift Plan
|
|||||||
July
1 through
|
|||||||
July
31, 2008
|
0
|
$
|
0.00
|
||||
August
1 through
|
|||||||
August
31, 2008
|
0
|
0.00
|
|||||
September
1 through
|
|||||||
September
30, 2008
|
0
|
0.00
|
|||||
Total
|
0
|
$
|
0.00
|
||||
|
|||||||
Director
Fee Stock Plan
|
|||||||
July
1 through
|
|||||||
July
31, 2008
|
3,163
|
$
|
9.14
|
||||
August
1 through
|
|||||||
August
31, 2008
|
0
|
0.00
|
|||||
September
1 through
|
|||||||
September
30, 2008
|
0
|
0.00
|
|||||
Total
|
3,163
|
$
|
9.14
|
||||
Stock
Option Plans
|
|||||||
July
1 through
|
|||||||
July
31, 2008
|
0
|
$
|
0.00
|
||||
August
1 through
|
|||||||
August
31, 2008
|
0
|
0.00
|
|||||
September
1 through
|
|||||||
September
30, 2008
|
0
|
0.00
|
|||||
Total
|
0
|
$
|
0.00
|
(2)
|
First
Financial has two publicly announced stock repurchase plans under
which it
is currently authorized to purchase shares of its common stock.
Neither of
the plans expired during this quarter. However, as of September
30, 2008,
all shares under the 2003 plan have been repurchased. The table
that
follows provides additional information regarding those
plans.
|
Total Shares
|
||||||||||
Announcement
|
Total Shares Approved for
|
Repurchased Under
|
Expiration
|
|||||||
Date
|
Repurchase
|
the Plan
|
Date
|
|||||||
1/25/2000
|
7,507,500
|
2,538,395
|
None
|
|||||||
2/25/2003
|
2,243,715
|
2,243,715
|
Complete
|
(a)
|
Exhibits:
|
3.1
|
Articles
of Incorporation, as amended as of February 26, 2008, and incorporated
herein by reference to Exhibit 3.1 to the Form 10-K for the year
ended
December 31, 2007. File No. 000-12379.
|
3.2
|
Amended
and Restated Regulations, as amended as of May 1, 2007, and incorporated
herein by reference to Exhibit 3.2 to the Form 10-Q for the quarter
ended
June 30, 2007. File No. 000-12379.
|
4.1
|
Rights
Agreement between First Financial Bancorp. and First National Bank
of
Southwestern Ohio dated as of November 23, 1993, and incorporated
herein
by reference to Exhibit 4 to the Form 10-K for year ended December
31,
1998. File No. 000-12379.
|
4.2
|
First
Amendment to Rights Agreement dated as of May 1, 1998, and incorporated
herein by reference to Exhibit 4.1 to the Form 10-Q for the quarter
ended
March 31, 1998. File No. 000-12379.
|
4.3
|
Second
Amendment to Rights Agreement dated as of December 5, 2003, and
incorporated herein by reference to Exhibit 4.1 to First Financial’s Form
8-K filed on December 5, 2003. File No. 000-12379.
|
4.4
|
No
instruments defining the rights of holders of long-term debt of
First
Financial are filed herewith. Pursuant to (b)(4)(iii) of Item 601
of
Regulation S-K, First Financial agrees to furnish a copy of any
such
agreements to the Securities and Exchange Commission upon
request.
|
10.1
|
Agreement
between Charles D. Lefferson and First Financial Bancorp. dated
August 4,
2000, and incorporated herein by reference to Exhibit 10.5 to the
Form
10-K for the year ended December 31, 2002. File No.
000-12379.
|
10.2
|
Amendment
to Employment Agreement between Charles D. Lefferson and First
Financial
Bancorp. dated May 23, 2003, and incorporated herein by reference
to
Exhibit 10.5 to the Form 10-Q for the quarter ended June 30, 2003.
File
No. 000-12379.
|
10.3
|
First
Financial Bancorp. 1991 Stock Incentive Plan, dated September 24,
1991,
and incorporated herein by reference to a Registration Statement
on Form
S-8, Registration No. 33.46819.
|
10.4
|
First
Financial Bancorp. Dividend Reinvestment and Share Purchase Plan,
dated
April 24, 1997, and incorporated by reference to a Registration
Statement
on Form S-3, Registration No. 333-25745.
|
10.5
|
First
Financial Bancorp. 1999 Stock Incentive Plan for Officers and Employees,
dated April 27, 1999, and incorporated herein by reference to a
Registration Statement on Form S-3, Registration No.
333-86781.
|
10.6
|
First
Financial Bancorp. 1999 Non-Employee Director Stock Plan, as dated
April
27, 1999 and amended and restated as of April 25, 2006, and incorporated
herein by reference to Exhibit 10.11 to the Form 10-Q for the quarter
ended March 31, 2006. File No.
001-12379.
|
10.7
|
First
Financial Bancorp. Director Fee Stock Plan amended and restated
effective
April 20, 2004, and incorporated herein by reference to Exhibit
10.12 to
the Form 10-Q for the quarter ended June 30, 2004. File No.
000-12379.
|
10.8
|
Form
of Executive Supplemental Retirement Agreement, incorporated herein
by
reference to Exhibit 10.11 to the Form 10-K for the year ended
December
31, 2002. File No. 000-12379.
|
10.9
|
Form
of Endorsement Method Split Dollar Agreement, incorporated herein
by
reference to Exhibit 10.12 to the Form 10-K for the year ended
December
31, 2002. File No. 000-12379.
|
10.10
|
First
Financial Bancorp. Deferred Compensation Plan, effective June 1,
2003,
incorporated herein by reference to Exhibit 10.1 to the Form 10-Q
for the
quarter ended June 30, 2003. File No. 000-12379.
|
10.11
|
Form
of Stock Option Agreement for Incentive Stock Options, incorporated
herein
by reference to Exhibit 10.1 to the Form 8-K filed on January 27,
2005.
File No. 000-12379.
|
10.12
|
Form
of Stock Option Agreement for Nonqualified Stock Options, incorporated
herein by reference to Exhibit 10.2 of the Form 8-K filed on January
27,
2005. File No. 000-12379.
|
10.13
|
Form
of First Financial Bancorp. 1999 Stock Incentive Plan for Officers
and
Employees Agreement for Restricted Stock Award, incorporated herein
by
reference to Exhibit 10.3 to the Form 8-K filed on January 27,
2005. File
No. 000-12379.
|
10.14
|
Form
of Stock Option Agreement for Incentive Stock Options, incorporated
herein
by reference to Exhibit 10.1 to the Form 8-K filed on April 22,
2005. File
No. 000-12379.
|
10.15
|
Form
of Stock Option Agreement for Non-Qualified Stock Options, incorporated
herein by reference to Exhibit 10.2 of the Form 8-K filed on April
22,
2005. File No. 000-12379.
|
10.16
|
Form
of Stock Option Agreement for Restricted Stock Awards, incorporated
herein
by reference to Exhibit 10.3 to the Form 8-K filed on April 22,
2005. File
No. 000-12379.
|
10.17
|
Form
of Agreement for Restricted Stock Award for Non-Employee Directors
dated
April 25, 2006, incorporated herein by reference to the Form 10-Q
for the
quarter ended June 30, 2006. File No. 000-12379.
|
10.18
|
Amended
and Restated Employment and Non-Competition Agreement between Claude
E.
Davis and First Financial Bancorp. dated August 22, 2006, and incorporated
herein by reference to Exhibit 10.1 to First Financial Bancorp’s Form 8-K
filed on August 28, 2006. File No. 000-12379.
|
10.19
|
First
Financial Bancorp. Amended and Restated Severance Pay Plan as approved
April 28, 2008, incorporated by reference to the Form 10-Q filed
on May 9,
2008. File No. 000-12379.
|
10.20
|
Terms
of First Financial Bancorp. Short-Term Incentive Plan, incorporated
herein
by reference to the Form 8-K filed on May 5, 2007. File No.
000-12379.
|
10.21
|
First
Financial Bancorp. Amended and Restated Key Management Severance
Plan as
approved February 26, 2008, incorporated herein by reference to
the Form
10-Q filed on May 9, 2008. File No.
000-12379.
|
10.22
|
Form
of Agreement for Restricted Stock Award dated February 14, 2008,
incorporated herein by reference to the Form 10-Q filed on May
9, 2008.
File No. 000-12379.
|
10.23
|
Long-Term
Incentive Plan Grant Design (2008), incorporated herein by reference
to
the Form 10-Q filed on May 9, 2008. File No. 000-12379.
|
10.24
|
Short-Term
Incentive Plan Design (2008), incorporated herein by reference
to the Form
10-Q filed on May 9, 2008. File No. 000-12379.
|
14
|
First
Financial Bancorp. Code of Business Conduct and Ethics as approved
January
23, 2007, incorporated herein by reference to Exhibit 14 to the
Form 10-K
for the year ended December 31, 2006. File No.
000-12379.
|
31.1
|
Certification
by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
31.2
|
Certification
by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
32.1
|
Certification
of Periodic Financial Report by Chief Executive Officer Pursuant
to
Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification
of Periodic Financial Report by Chief Financial Officer Pursuant
to
Section 906 of the Sarbanes-Oxley Act of
2002.
|
FIRST
FINANCIAL BANCORP.
|
||
(Registrant)
|
||
/s/
J. Franklin Hall
|
/s/
Anthony M. Stollings
|
|
J.
Franklin Hall
|
Anthony
M. Stollings
|
|
Executive
Vice President and Chief Financial Officer
|
Senior
Vice President, Chief Accounting Officer, and
Controller
|
|
Date
11/3/08
|
Date
11/3/08
|