Yahoo Finance First Financial Bancorp (FFBC) (Q1 2024) Earnings Call Transcript Highlights: Key Financial ...
Adjusted Earnings Per Share: $0.59
Return on Assets: 1.3%
Return on Tangible Common Equity: 19.1%
Net Interest Margin: 4.1%
Annualized Loan Growth: 10%
Annualized Deposit Growth: 2.3%
Noninterest Income: Increased across most fee revenue areas
Net Charge-offs: Declined to 38 basis points
Nonperforming Assets: Declined 9.8% from the prior quarter
Classified Assets: Increased to 0.92% of assets
Provision for Credit Losses: $11.2 million
Allowance for Credit Losses: 1.29% of total loans
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Good morning, Archie. Morning, Jamie. Can you deconstruct the loan growth guidance, especially how Agile fits into that growth? A: Archie Brown, President and CEO: In Q1, loan growth was driven largely by commercial real estate and Agile. For Q2, we expect a more broad-based growth, with Agile accounting for about a third of the growth. Commercial Banking and our Oak Street units will also contribute more in Q2.
Q: Regarding cross-selling opportunities from Agile, what are you thinking about the opportunities there? A: Archie Brown, President and CEO: It will take some time, but there are opportunities, especially in financing property and casualty insurance payments. We plan to integrate Agile with our commercial banking services to offer more alternatives to our clients.
Q: Can you clarify the expected credit loss for Agile? Is that a full cycle or near term expectation? A: Archie Brown, President and CEO: The 10 to 20 basis points credit loss expectation for Agile is more of a full run rate expectation as the business matures, rather than near term. Initially, it will be lower as we selected high-quality assets that fit our credit appetite.
Q: Could you help us understand the expected margin in the second half of the year considering the BOLI restructuring and the securities sale in Q1? A: Jamie Anderson, CFO: The BOLI restructuring income is included in our fee income outlook. The securities repositioning and Agile acquisition will help increase our asset yields. We expect the net interest margin to stabilize in the second half of the year, assuming no Fed cuts.
Q: Beyond the actions taken last quarter, should we expect expenses to come down later this year? A: Archie Brown, President and CEO: The $5 million expense reduction realized in Q1 covers Agile's operating expenses. An additional $10 to $12 million in annualized expense reductions is expected by the end of the year, impacting more significantly next year.
Q: With the step-up in loan growth, what's the plan to fund it? A: Jamie Anderson, CFO: We project about 5% deposit growth across the board for the year. Any shortfall in covering the loan growth will be supplemented with borrowings. We aim to balance the growth in loans with sustainable funding sources.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.