First Financial Posts Record Adjusted Profit, Adds Finward Deal
Second-quarter net income rose to $76.5 million from $74.4 million sequentially.
First Financial Bancorp (FFBC), the regional bank holding company, posted record adjusted earnings as loan growth resumed and expenses declined, while agreeing to acquire Finward Bancorp. Adjusted earnings reached $83.9 million, or $0.80 a share, with adjusted earnings per share up 8% from a year earlier.
Reported earnings rose to $0.73 a diluted share from $0.71 in the first quarter. Return on average assets improved to 1.37% from 1.34%, while return on average tangible common equity edged up to 17.95% from 17.78%. First-half diluted earnings increased to $1.44 a share from $1.27 a year earlier.
End-of-period loans increased $240 million from the first quarter, a 7.1% annualized growth rate, as commercial-and-industrial lending, Summit operations and seasonal Agile activity contributed to broad gains. Originations rose 23% sequentially, though average loans declined to $13.62 billion because much of the balance growth came during the quarter.
The fully tax-equivalent net interest margin slipped 1 basis point to 3.98%. Asset yields declined 7 basis points and funding costs fell 6 basis points, while lower acquired-loan accretion reduced the margin by 5 basis points. Management expects the margin to remain near 4.00% in the near term, assuming no significant change in interest rates.
Adjusted noninterest income declined sequentially to $71.9 million as weaker foreign-exchange, swap and investment-banking fees outweighed a 5.3% increase in leasing income and higher bank-owned life-insurance and limited-partnership investment income. Management expects the weaker fee businesses to rebound in the third quarter.
Adjusted noninterest expense fell 3.7% to $149.1 million, reflecting lower compensation, commissions and payroll taxes as well as acquisition synergies. First Financial had realized virtually all anticipated Westfield cost reductions by June 30 and expects BankFinancial savings to reach their full run rate by the end of the third quarter.
Credit measures strengthened, with annualized net charge-offs declining to 0.20% of average loans from 0.35% and nonaccrual loans falling to 0.70% of total loans from 0.75%. Tangible book value rose 3.0% to $16.64 a share, and the board increased the quarterly dividend to $0.26 a common share.
The roughly $208 million all-stock Finward acquisition is expected to add $2.0 billion of assets and lift First Financial’s pro forma Chicago-area deposits 75% to more than $4 billion. The company expects the transaction to add about 5% to earnings per share and close in the fourth quarter of 2026, extending its acquisition-driven expansion as the latest cost savings take hold.