First Financial Bancorp. Q1 Earnings Call Highlights

Key Points

• First Financial reported adjusted EPS of $0.77, up 22% year-over-year, driven by a robust net interest margin of 3.99% and record fee income of $75.6 million (up 24% YoY).
• Deposits rose $1.7 billion (including $1.2 billion from the Bank Financial acquisition) and the company completed the Westfield conversion while closing Bank Financial, with a systems conversion planned and a new $5 million share repurchase authorized.
• Credit was affected by one large commercial relationship—net charge-offs annualized were 35 bps and ACL coverage was 1.36% with a $8.5 million provision—while capital improved (TCE ~7.9%, tangible book value $16.15) and management expects Q2 NIM of 3.99–4.04% and mid-single-digit annualized loan growth.

First Financial Bancorp. NASDAQ: FFBC reported first-quarter 2026 results highlighted by higher adjusted earnings, a resilient net interest margin, and stronger-than-typical early-year fee income, while the company also worked through several major integration and balance sheet actions during the period.

During the call, President and CEO Archie Brown said the quarter was “a busy one,” citing the closing of the Bank Financial acquisition, completion of the Westfield Bank systems conversion, and the sale of Bank Financial’s multifamily loan portfolio. “I’m very pleased with our overall performance,” Brown said.

Quarterly performance and key drivers

Brown said adjusted earnings per share were $0.77, with an adjusted return on assets of 1.45% and an adjusted return on tangible common equity of 19.2%. He added that adjusted EPS increased 22% versus the first quarter of last year, driven by what he described as a “robust net interest margin and strong fee income.”

Chief Financial Officer and Chief Operating Officer Jamie Anderson said the quarter produced “strong earnings” and “record revenues driven by a robust net interest margin,” along with “higher than expected fee income.” Anderson reported net interest margin of 3.99%, up 1 basis point from the linked quarter. He said deposit costs fell 13 basis points while asset yields declined 12 basis points.

On the balance sheet, end-of-period loans rose $71 million, which Anderson said included $228 million of acquired Bank Financial loans, partially offset by a $152 million decline in income-producing commercial real estate (ICRE) balances due to payoff pressure.

Deposits also rose materially. Anderson said total average deposits increased $1.7 billion, including $1.2 billion acquired in the Bank Financial transaction as well as a full-quarter impact from Westfield. He said the company maintained 20% of total deposits in non-interest-bearing accounts and remains focused on “growing lower cost deposit balances.”

Fee income strength and notable GAAP-to-adjusted items

Management emphasized non-interest income strength despite the seasonal headwinds that often pressure early-year fee revenue. Brown said adjusted non-interest income was $75.6 million, 24% higher year-over-year and only slightly down from the prior quarter, driven by “record wealth management income, strong client derivative income, and record leasing business income.” Anderson similarly said adjusted fee income totaled $76 million, with leasing and wealth management both at record levels, along with strong foreign exchange and higher client derivative fees.

Anderson also noted a one-time acquisition-related item, saying the quarter included an $8.9 million gain on bargain purchase tied to the Bank Financial acquisition. In the company’s reconciliation from GAAP to adjusted results, he said non-interest income was adjusted for:

• $1.3 million of losses on sales of investment securities
• the $8.9 million bargain purchase gain
• a $1.4 million loss on surrender of a bank-owned life insurance policy

On expenses, Brown said costs were “well controlled,” coming in “well below our expectations,” and he said acquisition-related cost savings exceeded initial estimates. Anderson reported non-interest expenses increased from the linked quarter primarily due to the impact of acquisitions, while “core expenses increased $12.9 million as expected.”

Credit quality, allowance, and capital

Credit metrics reflected the impact of a single larger issue, according to management. Brown said net charge-offs were 35 basis points of total loans and were “impacted by one large commercial relationship.” Anderson said net charge-offs were 35 basis points annualized, up 8 basis points from the fourth quarter, while non-performing assets (NPAs) were 44 basis points of assets, down 4 basis points from the prior quarter. Classified assets as a percentage of total assets also declined slightly, Anderson said.

The allowance for credit losses (ACL) coverage decreased slightly to 1.36% of total loans, according to Anderson, and the company recorded $8.5 million of provision expense “driven primarily by net charge-offs.” Anderson said the company’s ACL model resulted in total allowance (funded and unfunded) of $207 million, including $3.1 million of initial allowance on the Bank Financial portfolio.

Capital levels increased during the quarter. Brown said capital ratios are strong and “continued to climb,” and noted tangible common equity (TCE) rose to 7.9%. Anderson said tangible book value per share increased $0.41 to $16.15 and the TCE ratio ended at 7.88%. Brown said tangible book value per share was up 2.6% from the linked quarter and up 9% year-over-year.

The board authorized a $5 million share repurchase program, replacing a prior plan that ran through 2025. Anderson said 35% of first-quarter earnings were returned to shareholders through the common dividend, and management will evaluate capital actions supporting shareholder returns.

Integration updates and second-quarter outlook

Brown said the company completed the Westfield conversion during the quarter, with Westfield deposits and loans “stable,” high associate retention, and results consistent with expectations. He also said First Financial completed the Bank Financial purchase on Jan. 1 and plans a systems conversion in early June, adding that the company remains “excited about the opportunities in the Chicago market.” In response to analyst questions, Brown said First Financial has begun adding commercial banking talent, wealth advisors, and private bankers in Chicago to complement the retail strategy.

Looking ahead, Brown outlined a second-quarter outlook that assumes no near-term Federal Reserve rate cuts. He said the company expects:

• Mid-single digit annualized loan growth in the second quarter as pipelines convert and ICRE payoffs slow
• Core deposits to remain relatively flat versus the first quarter
• Net interest margin to hold in a 3.99% to 4.04% range
• Credit costs to approximate first-quarter levels, with ACL coverage relatively stable
• Fee income of $75 million to $77 million, including $14 million to $16 million in foreign exchange and $20 million to $22 million in leasing
• Non-interest expense of $151 million to $154 million

Brown and Anderson also discussed the ICRE payoff pressure that weighed on first-quarter loan balances. Brown said the paydowns were driven by a mix of property sales, secondary market activity, and competition as larger regional banks returned to the space with aggressive pricing and, in some cases, looser structures. In one example, Brown said a competitor “eliminated the covenants” late in a transaction. He said management does not want to “give up our skis” to chase growth.

On cost saves from acquisitions, Brown said the company is “on pace” to achieve modeled Westfield savings, with full savings beginning in the third quarter, while full Bank Financial savings are expected to begin in the fourth quarter.

Brown closed by reiterating confidence in the company’s momentum. “We’ve had a very strong start to 2026,” he said, adding that management believes it will be “another very successful year for First Financial.”

About First Financial Bancorp. NASDAQ: FFBC

First Financial Bancorp NASDAQ: FFBC is a bank holding company headquartered in Cincinnati, Ohio, and the parent of First Financial Bank. The company provides a comprehensive suite of commercial and consumer banking services through a network of more than 100 full-service banking centers and mortgage offices across Ohio, Indiana and Kentucky. Its core mission centers on delivering personalized relationship banking to businesses, individuals and public sector clients.

First Financial Bank's product portfolio includes deposit solutions such as checking, savings and money market accounts, alongside a range of lending offerings that cover commercial and industrial loans, real estate and construction financing, home mortgages and home equity lines of credit.

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