First Financial Bancorp.(US:FFBC)2026-01-29 14:32Financial Data and Key Metrics Changes - Adjusted earnings per share for Q4 2025 were $0.80, with an adjusted return on assets of 1.52% and an adjusted return on tangible common equity of 20.3% [4][12] - The net interest margin slightly declined to 3.98% from 4.05% year-over-year, but funding costs decreased, mitigating the impact of short-term rate reductions [7][12] - Total adjusted fee income reached a record $77 million, a 5% increase from the previous quarter [5][14] - For the full year 2025, adjusted net income was $281 million, or $2.92 per share, with record revenue of nearly $922 million, an 8% increase over 2024 [6][7] Business Line Data and Key Metrics Changes - Loan growth for Q4 was 4% on an annualized basis, with total average deposits increasing by approximately 7% [4][9] - Non-interest income for the year increased by 16% to a record $280 million, driven by growth in wealth management, foreign exchange, and mortgage income [7][8] - Adjusted non-interest expenses increased by 6% from the linked quarter, primarily due to the Westfield acquisition [5][10] Market Data and Key Metrics Changes - The company maintained 21% of total balances in non-interest-bearing accounts, focusing on growing lower-cost deposit balances [10] - Total deposit balances increased by $2 billion, including $1.8 billion from the Westfield acquisition, with organic growth of $264 million [9][10] Company Strategy and Development Direction - The company plans to achieve organic loan growth of 6%-8% for the full year 2026, with expectations of easing payoff pressure in Q1 [16][17] - The company is expanding its presence in Grand Rapids, Michigan, with plans to establish a full banking office and add mortgage services [32][64] - The company aims to enhance its wealth management services in Northeast Ohio, following the acquisition of Westfield [76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a strong net interest margin and expects it to remain among the highest in the peer group [16] - The company anticipates credit costs in Q1 to approximate Q4 levels, with stable allowance for credit losses coverage [17] - Management highlighted the successful launch of a new banking office and the acquisition of two banking companies as part of their growth strategy [18] Other Important Information - The company issued $300 million of subordinated debt during Q4, with a 10-year maturity and a 6.38% interest rate [10] - Asset quality remained stable, with non-performing assets slightly increasing to 0.48% of total assets [5][11] Q&A Session Summary Question: Fee income guidance for the rest of the year - Management acknowledged seasonality in fee income, particularly in foreign exchange, and expects growth in the latter half of the year [22][24] Question: Growth plans in Grand Rapids - Management detailed the ramp-up of loan commitments and deposit growth in Grand Rapids, with plans for further expansion [30][32] Question: Loan growth outlook - Management confirmed a projected organic loan growth of 6%-8% for the year, excluding acquired balances [38][41] Question: Margin outlook and purchase accounting - Management indicated that the margin would depend on short-term rate movements, with a slight decline expected if rate cuts occur [45][46] Question: Efficiency ratio trends - Management projected the efficiency ratio to be in the mid-50s range, influenced by the integration of recent acquisitions [70][75]