8K Earnings Release 2Q15




 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 

 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): July 30, 2015
 

 
FIRST FINANCIAL BANCORP.
(Exact name of registrant as specified in its charter)
 


 
Ohio
 
31-1042001
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification number)
 
Commission file number: 001-34762
 
255 East Fifth Street, Suite 700, Cincinnati, Ohio 45202
(Address of principal executive offices and zip code)
 
Registrant's telephone number, including area code: (877) 322-9530
 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02    Results of Operations and Financial Condition.

On July 30, 2015, First Financial Bancorp. issued its earnings press release that included the results of operations and financial condition for the first six months and second quarter of 2015. A copy of the earnings press release is attached as Exhibit 99.1.

The earnings press release includes some financial measures outside of generally accepted accounting principles (GAAP), referred to as non-GAAP financial measures. The first non-GAAP financial measure, Net interest margin (fully tax equivalent), appears in the table entitled “Consolidated Financial Highlights” under the section “Key Financial Ratios.” It also appears in the table entitled “Consolidated Quarterly Statements of Income” under “Additional Data.” The second non-GAAP financial measure, Net interest income-tax equivalent, appears in the tables entitled “Additional Data” at the bottom of the “Consolidated Quarterly Statements of Income” page. 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.
 
Below is a table showing “net interest income” calculated and presented in accordance with GAAP and the adjustments made to arrive at the non-GAAP financial measure “net interest income - tax equivalent.” The table also shows “net interest margin” calculated and presented in accordance with GAAP and the method used to arrive at the non-GAAP financial measure “net interest margin (fully tax equivalent).”


 
Three months ended
 
Six months ended
 
June 30,
Mar. 31,
Dec. 31,
Sep. 30,
June 30,
 
June 30,
(Dollars in thousands)
2015
2015
2014
2014
2014
 
2015
2014
Net interest income
$
58,674

$
58,586

$
61,139

$
58,363

$
54,304

 
$
117,260

$
109,123

Tax equivalent adjustment
988

983

946

818

758

 
1,971

1,460

   Net interest income - tax equivalent
$
59,662

$
59,569

$
62,085

$
59,181

$
55,062

 
$
119,231

$
110,583

 
 
 
 
 
 
 
 
 
Average earning assets
$
6,616,960

$
6,576,660

$
6,617,104

$
6,326,315

$
5,880,933

 
$
6,596,921

$
5,851,197

 
 
 
 
 
 
 
 
 
Net interest margin*
3.56
%
3.61
%
3.67
%
3.66
%
3.70
%
 
3.58
%
3.76
%
Net interest margin (fully tax equivalent)*
3.62
%
3.67
%
3.72
%
3.71
%
3.76
%
 
3.64
%
3.81
%
 
 
 
 
 
 
 
 
 
* Margins are calculated using net interest income annualized divided by average earning assets.
 
 
 





The earnings press release shows a non-GAAP ratio in the "Credit Quality" page of allowance for loan and leases losses (allowance) plus loan marks, net of the indemnification asset to total loans. The following table provides a reconciliation of this ratio to the corresponding GAAP components.

 
Three months ended
 
June 30,
Mar. 31,
Dec. 31,
(Dollars in thousands)
2015
2015
2014
Allowance
$
52,876

$
53,076

$
52,858

Loan marks
29,428

35,804

42,434

Allowance and loan marks
82,304

88,880

95,292

Indemnification asset
(20,338
)
(20,397
)
(22,666
)
Allowance and loan marks, net of indemnification asset (a)
$
61,966

$
68,483

$
72,626

 
 
 
 
Loans
$
4,852,774

$
4,763,537

$
4,777,235

Loan marks
29,428

35,804

42,434

Total loans (b)
$
4,882,202

$
4,799,341

$
4,819,669

 
 
 
 
Allowance and loan marks, net of indemnification asset, to total loans (a)/(b)
1.27
%
1.43
%
1.51
%



The earnings press release also includes some non-GAAP ratios in the “Consolidated Financial Highlights” page. These ratios are: (1) Return on average tangible shareholders' equity; (2) Ending tangible shareholders' equity as a percent of ending tangible assets; (3) Ending tangible shareholders' equity as a percent of risk-weighted assets; (4) Average tangible shareholders' equity as a percent of average tangible assets; and (5) Tangible book value per share. The Ending tangible shareholders' equity as a percent of ending tangible assets and Average tangible shareholders' equity as a percent of average tangible assets are also shown in the “Regulatory Capital” section of the “Capital Adequacy” page in the earnings release. The following table provides a reconciliation of these ratios to the corresponding GAAP components. The Company considers these critical metrics with which to analyze banks. The ratios have been included in the earnings press release to facilitate a better understanding of the Company's capital structure and financial condition.





 
Three months ended
 
Six months ended
 
June 30,
Mar. 31,
Dec. 31,
Sep. 30,
June 30,
 
June 30,
 
2015
2015
2014
2014
2014
 
2015
2014
 
(Dollars in thousands, except per share data)
 
 
 
Net income (a)
$
18,949

$
17,621

$
18,599

$
15,344

$
15,953

 
$
36,570

$
31,057

 
 
 
 
 
 
 
 
 
Average total shareholders' equity
$
800,598

$
788,511

$
780,131

$
745,729

$
696,609

 
$
794,588

$
690,504

Less:
 
 
 
 
 
 
 
 
Goodwill
(137,739
)
(137,739
)
(137,739
)
(137,458
)
(95,050
)
 
(137,739
)
(95,050
)
Intangible assets
(7,726
)
(7,847
)
(8,114
)
(8,542
)
(5,344
)
 
(7,726
)
(5,344
)
Average tangible equity (b)
655,133

642,925

634,278

599,729

596,215

 
649,123

590,110

 
 
 
 
 
 
 
 
 
Total shareholders' equity
802,383

795,742

784,077

773,912

705,831

 
802,383

705,831

Less:
 
 
 
 
 
 
 
 
Goodwill
(137,739
)
(137,739
)
(137,739
)
(137,458
)
(95,050
)
 
(137,739
)
(95,050
)
Intangible assets
(7,726
)
(7,847
)
(8,114
)
(8,542
)
(5,344
)
 
(7,726
)
(5,344
)
Ending tangible equity (c)
656,918

650,156

638,224

627,912

605,437

 
656,918

605,437

 
 
 
 
 
 
 
 
 
Total assets
7,383,372

7,245,796

7,217,821

7,353,469

6,545,744

 
7,383,372

6,545,744

Less:
 
 
 
 
 
 
 
 
Goodwill
(137,739
)
(137,739
)
(137,739
)
(137,458
)
(95,050
)
 
(137,739
)
(95,050
)
Intangible assets
(7,726
)
(7,847
)
(8,114
)
(8,542
)
(5,344
)
 
(7,726
)
(5,344
)
Ending tangible assets (d)
7,237,907

7,100,210

7,071,968

7,207,469

6,445,350

 
7,237,907

6,445,350

 
 
 
 
 
 
 
 
 
Risk-weighted assets (e)
5,647,658

5,583,461

5,311,573

5,202,123

4,464,578

 
5,647,658

4,464,578

 
 
 
 
 
 
 
 
 
Total average assets
7,243,886

7,201,313

7,241,869

6,937,283

6,454,252

 
7,222,717

6,426,895

Less:
 
 
 
 
 
 
 
 
Goodwill
(137,739
)
(137,739
)
(137,739
)
(137,458
)
(95,050
)
 
(137,739
)
(95,050
)
Intangible assets
(7,726
)
(7,847
)
(8,114
)
(8,542
)
(5,344
)
 
(7,726
)
(5,344
)
Average tangible assets (f)
7,098,421

7,055,727

7,096,016

6,791,283

6,353,858

 
7,077,252

6,326,501

 
 
 
 
 
 
 
 
 
Ending common shares outstanding (g)
61,707,847

61,686,887

61,456,547

61,368,473

57,718,317

 
61,707,847

57,718,317

 
 
 
 
 
 
 
 
 
Ratios
 
 
 
 
 
 
 
 
Return on average tangible shareholders' equity (a)/(b)
11.60
%
11.12
%
11.63
%
10.15
%
10.73
%
 
11.36
%
10.61
%
Ending tangible shareholders' equity as a percent of:
 
 
 
 
 
 
 
Ending tangible assets (c)/(d)
9.08
%
9.16
%
9.02
%
8.71
%
9.39
%
 
9.08
%
9.39
%
Risk-weighted assets (c)/(e)
11.63
%
11.64
%
12.02
%
12.07
%
13.56
%
 
11.63
%
13.56
%
Average tangible shareholders' equity of average tangible assets (b)/(f)
9.23
%
9.11
%
8.94
%
8.83
%
9.38
%
 
9.17
%
9.33
%
Tangible book value per share (c)/(g)
$
10.65

$
10.54

$
10.38

$
10.23

$
10.49

 
$
10.65

$
10.49


First Financial Bancorp also provided electronic presentation slides on its web site used in connection with the earnings conference call. A copy of the electronic presentation slides is included in this Report as Exhibit 99.2.

The information in Item 2.02 of this Current Report on Form 8-K, including the Exhibits 99.1 and 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.





Item 9.01    Exhibits.

(d)    Exhibits:

The following exhibits shall not be deemed to be “filed” for purposes of the Securities Act.

99.1    First Financial Bancorp. Press Release dated July 30, 2015 - Furnished.
99.2    First Financial Bancorp. July 31, 2015 Earnings Call slides - Furnished.








SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FIRST FINANCIAL BANCORP.


 
 
By: /s/ John M. Gavigan
 
 
John M. Gavigan
 
 
Senior Vice President and Chief Financial Officer
 
 
 
Date:
July 30, 2015
 

                    








Form 8-K                                First Financial Bancorp.

Exhibit Index
Exhibit No.        Description

99.1            First Financial Bancorp. Press Release dated July 30, 2015.
99.2            First Financial Bancorp. July 31, 2015 Earnings Call slides.