First Financial's NIM Reverses Higher as Fees Hit a Record

The Tip Desk · November 8, 2026 · 3 min read

Third-quarter revenue reached a record $273.9 million as fully tax-equivalent net interest margin widened 9 bp to 4.07% and adjusted fees hit $77.6 million.

First Financial Bancorp. (FFBC), a Cincinnati-based bank holding company with $22.3 billion in assets, reported record third-quarter revenue of $273.9 million as the net interest margin reversed a one-basis-point second-quarter dip and fee income reached a company high.

The company earned $81.2 million, or $0.77 a share, up from $76.5 million, or $0.73 a share, in the second quarter. Adjusted earnings were $0.84 a share. Return on average assets was 1.44%, and return on average tangible common equity was 18.67%.

Fully tax-equivalent net interest margin expanded 9 bp from the linked quarter to 4.07%, after a 1 bp decline in the second quarter. The company said the third-quarter lift came from a 13 bp increase in asset yields, partially offset by a 4 bp rise in funding costs. Net interest income was $196.3 million.

Adjusted noninterest income reached a record $77.6 million, up 8% from the linked quarter, and accounted for 28% of total revenues. GAAP noninterest income was $77.7 million. Wealth management fees, bankcard income and client derivative fees each posted double-digit linked-quarter growth. Foreign exchange income rose $4.4 million, or 33.5%, from the second quarter. Leasing business income was $23.0 million.

Noninterest expenses were $165.7 million, or $156.9 million on an adjusted basis. The company said the increase from the prior quarter was driven by compensation tied to fee income, as well as higher credit-collection and healthcare costs. The efficiency ratio was 60.5%, or 57.3% as adjusted. Adjustments included $7.5 million of acquisition-related expenses. Chief executive Archie Brown said the company expects expenses to moderate in the fourth quarter.

Loan growth slowed. Loan balances increased $170.2 million, or 4.9% on an annualized basis, compared with $240 million, or 7.1% annualized, in the second quarter. The company said quarterly growth was driven by commercial and industrial, consumer and Summit. Average deposits increased $52.4 million, or 1.2% annualized. Excluding brokered CDs, average deposits increased $144.0 million. Growth in interest-bearing demand accounts, money market accounts and retail CDs offset declines in brokered CDs, savings and noninterest-bearing accounts.

Annualized net charge-offs were $7.2 million, or 21 bps of total loans, versus 0.20% of total loans in the second quarter. Provision expense was $8.9 million. The allowance for credit losses on loans and leases was $191.7 million, or 1.38% of loans. Nonperforming assets rose 2 bps to 0.45% of total assets. Classified assets increased to 1.26% of total assets, which the company said was primarily due to the downgrade of a single ICRE relationship with multiple loans. Brown said the company expects to resolve that workout over the next few quarters.

Regulatory capital ratios rose. The common equity tier 1 ratio increased 21 bps to 12.54% and the total capital ratio increased 8 bps to 15.83%. Tangible common equity was 7.81%, or 9.65% excluding the impact from available-for-sale other comprehensive income. Tangible book value per share fell 5.9% from the linked quarter to $15.65, which the company attributed to a sharp increase in interest rates during the second half of the quarter.

The board approved a quarterly dividend of $0.26 a share, payable December 15, 2026, matching the increase first announced with second-quarter results.

First Financial received federal regulatory approval for its acquisition of Finward Bancorp and expects to close on January 1, 2027, subject to state regulatory and Finward shareholder approvals. Brown said loan pipelines remain healthy as the company enters the fourth quarter and that it expects low to mid single digit loan growth as it closes out 2026.