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First Financial's 3Q gains soar

Bank's earnings follow its acquisition of failed institutions.

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By Jessica Heffner, Staff Writer 11:32 PM Friday, November 6, 2009

HAMILTON — First Financial Bancorp’s third-quarter earnings took a $219.5 million jump thanks to the acquisition of two failed banks.

Bancorp, holding company for Hamilton-based First Financial Bank, posted a net income of $225.2 million, or $4.38 per share, compared to $5.7 million, or 15 cents per share, in the year-ago quarter. Net interest income was $37.5 million compared to $29.4 million in third-quarter 2008.

The increased profits resulted from a $383.3 million gain when First Financial acquired the assets of West Chester Twp.-based Peoples Community Bancorp, Indiana-based Irwin Bank and Trust Co. and Kentucky-based Irwin Union Bank. All had been seized by the Federal Deposit Insurance Corp., adding 36 banking centers and $3.8 billion in assets to the local banking company.

Claude Davis, president and chief executive of First Financial, said he expects the capital generated to support the newly added centers, but for earnings levels to normalize in the fourth quarter.

The company does plan to close 10 centers it acquired through Irwin outside its core markets in California, Nevada, Arizona, Missouri and New Mexico in the coming months.

“We’re really a Midwestern bank and our preference was to stay in the Midwest so now our operating area will just be Ohio, Indiana, Kentucky and Michigan,” Davis said.

While the bank did not take over any nonperforming loans with its acquisitions, loans in default spiked to $63.6 million from the $37.8 million reported in the second quarter. Davis attributed it to six commercial real estate loans that have been having problems, which is why First Financial increased its provision for loan losses to $26.7 million, up from $3.2 million a year ago.

Davis said while some analysts have stated the economy is recovering, he said from his vantage point it is stabilizing and he expects the company will still be navigating though the turmoil through the remainder of the year.

“I think people’s attitude is better but we are not yet seeing significant signs of improvement,” he said. “I’m still cautious.”

Contact this reporter at (513) 705-2843 or jheffner@coxohio.com.

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A jobless recovery is more like a "bump" before the big sag. Consumer confidence will drop as millions are added to the welfare rolls. "Cautious" is an extreme understatement. I would say "grab all you can and head for the ark". The elite also call gated communities the ark.

Jeffrey John Hodapp
12:09 AM, 11/8/2009

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