First Financial (FFBC) Q3 2025 Earnings Transcript

Financial Performance - The company reported adjusted net income of $72.6 million and adjusted earnings per share of $0.76 for Q3 2025, resulting in an adjusted return on assets of 1.55% and a return on tangible common equity of 19.3% [3][6] - Tangible book value per share increased to $16.19, a rise of 5% from the previous quarter and 14% year-over-year, while tangible common equity ratio rose by 47 basis points to 8.87% [1][12] - The net interest margin remained strong at 4.02%, despite a slight decline from the previous quarter [4][8] Revenue and Income Streams - Total net revenue reached record levels, with adjusted non-interest income accounting for 31% of total net revenue for the quarter [2][3] - Fee income for the quarter was a record $73.6 million, driven by leasing and foreign exchange businesses, as well as higher syndication fees [10][12] Loan and Deposit Activity - Loan balances decreased by $72 million during the quarter, primarily due to lower production in specialty lending areas and increased construction originations [9][32] - Average deposit balances increased by $157 million, driven by higher broker deposits and money market accounts, despite a seasonal decline in public funds [4][9] Expense Management - Total non-interest expenses remained flat compared to the previous quarter, excluding performance-related incentives [2][5] - The company has successfully reduced its full-time equivalents by approximately 200 or 9% over the past two years as part of workforce efficiency efforts [2][49] Outlook and Future Expectations - The company anticipates mid-single-digit loan growth for Q4 2025, with expectations for strong deposit growth driven by core deposit balances and seasonal public fund inflows [14][15] - The net interest margin is expected to remain in the range of 3.92% to 3.97% for the next quarter, assuming a 25 basis point rate cut in both October and December [15][25] - The company is preparing for the integration of pending acquisitions, which are expected to enhance operational efficiencies and revenue growth [16][51]