CINCINNATI - First Financial Bancorp . (NASDAQ: NASDAQ:FFBC), a Cincinnati-based banking company, has reported its financial results for the first quarter ended March 31, 2024. The company announced a net income of $50.7 million, or $0.53 per diluted common share, a decrease from the previous quarter's net income of $56.7 million, or $0.60 per diluted common share.
The return on average assets for the quarter was 1.18%, with the return on average tangible common equity at 17.35%. Both measures saw a decrease from the fourth quarter of 2023, which had a return on average assets of 1.31% and return on average tangible common equity of 21.36%.
First Financial's net interest margin on a fully tax-equivalent basis was 4.10%, a decline from 4.26% in the previous quarter. The decrease is attributed to rising funding costs, which increased by 19 basis points, partially offset by modestly higher asset yields.
Noninterest income for the quarter stood at $46.5 million, or $51.7 million when adjusted, reflecting a rebound from the fourth quarter's lower levels. Notably, the company's leasing business income was strong at $14.6 million.
Noninterest expenses were reported at $122.4 million, or $121.0 million as adjusted, with the increase from the fourth quarter driven by seasonal payroll taxes and increased variable compensation tied to fee income. The efficiency ratio for the quarter was 62.7%, or 60.4% when adjusted.
The bank also completed the acquisition of Agile Premium Finance on February 29, 2024, which specializes in lending primarily to commercial customers to finance insurance premiums. The acquisition contributed to loan growth of $271.9 million, or 10.0% on an annualized basis, including $93.4 million in loans acquired in the Agile transaction.
First Financial's board of directors approved a quarterly dividend of $0.23 per common share, payable on June 17, 2024, to shareholders of record as of June 3, 2024.
President and CEO Archie Brown commented on the results, noting that the first quarter reflected strong trends, including robust loan growth and a focus on expense management. The acquisition of Agile Premium Finance is expected to diversify the loan portfolio and complement the company's existing businesses.
The company's asset quality remained stable, with net charge-offs declining to 38 basis points of total loans, primarily due to charges on two office loans that had been on nonaccrual since early 2023. Classified assets increased to $162.3 million, while nonperforming assets to total assets declined by 10.5% from the previous quarter.
This article is based on a press release statement.
InvestingPro Insights
As First Financial Bancorp. (NASDAQ: FFBC) navigates a challenging quarter, marked by a decrease in net income and net interest margin, investors may look for deeper insights into the company's financial health and future prospects. According to InvestingPro, two pertinent points stand out.
Firstly, the company is trading at a low P/E ratio of 8.21, which is attractive relative to its near-term earnings growth. This could signal a potential undervaluation of FFBC's stock, especially considering the InvestingPro Tips that highlight the company's high shareholder yield and a history of maintaining dividend payments for 42 consecutive years. With analysts expecting FFBC to remain profitable this year, this could suggest a stable financial outlook for investors.
On the metrics front, FFBC's market capitalization stands at $2.13 billion, with a robust revenue growth of 18.33% in the last twelve months as of Q4 2023. However, it's important to note that the company has experienced a slight quarterly revenue decline of -3.58% in Q1 2023. Despite this, the company has seen a large price uptick of 32.7% over the last six months, which may reflect investor confidence in its long-term strategy and the recent acquisition of Agile Premium Finance.
For those looking to delve deeper into FFBC's financials and future outlook, InvestingPro offers a comprehensive suite of additional tips. In fact, there are 7 more InvestingPro Tips available, which could provide valuable information for making informed investment decisions. Interested readers can utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, further enriching their investment research toolkit.
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