First Financial Corp (Indiana) (NASDAQ:THFF) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 08:30 am ET


First Financial Corp (Indiana) (NASDAQ:THFF) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the First Financial Bancorp. Second Quarter 2019 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I'd now like to turn the conference over to Mr. Scott Crawley, Corporate Controller. Mr. Crawley, please proceed.

Scott T. Crawley

Good morning, everyone, and thank you for joining us on today's conference call to discuss First Financial Bancorp.'s second quarter and year-to-date 2019 financial results. Participating on today's call will be Claude Davis, Executive Chairman; Archie Brown, President and Chief Executive Officer; Jamie Anderson, Chief Financial Officer; and Tony Stollings, EVP Commercial Banking.

Both the press release we issued yesterday and the accompanying slide presentation are available on our website at under the Investor Relations section. We will make reference to the slide contained in the accompanying presentation during today's call.

Additionally, please refer to the forward-looking statement disclosure contained in the second quarter 2019 earnings release, as well as our SEC filings for full discussion of the Company's risk factors. The information we provide today is accurate as of June 30, 2019. We will not be updating any forward-looking statements to reflect facts or circumstances after this call.

I'll now turn the call over to Archie Brown.

Archie M. Brown

Thank you, Scott. Good morning, and thank you for joining us on today's call. Yesterday afternoon we announced our financial results for the second quarter. Before I turn the call over to Jamie to discuss those results in greater detail, I'd like to make a few comments regarding our quarterly performance and recently announced acquisition of Bannockburn Global Forex.

Our second quarter results were very strong, reflecting continued top quartile performance and marking our 115th consecutive quarter of profitability. The quarter was highlighted by strong loan growth, exceptional fee income and disciplined expense management.

For the quarter, our adjusted performance metrics included earnings per share of $0.58, a 1.3% return on average assets, 18.9% return on average tangible common equity and a sub-51% efficiency ratio.

Core banking transfer was positive with loan origination activity strengthening across many of our lending units and pay-off pressure is easing. These complementary trends have enabled us to grow loan balances by approximately 8% on an annualized basis.

Deposit growth was modest as seasonal public fund increases and retail CD growth more than offset declines in money markets and brokered CDs. Our core net interest margin remains strong and in line with the range previously provided, despite continued headwinds from lagging interest-bearing deposit pricing pressures. Aside from additional provision related to the workout of the franchise credit disclosed last quarter, credit costs were better than expectations and overall credit remains stable.

Our fee income performance was exceptional this quarter with growth of over 29% year-over-year driven by record client derivative fees and solid mortgage and bank card income.

Our sub-51% efficiency ratio continues to be a bright spot, although we saw a modest