First Financial Bancorp. (NASDAQ:FFBC) Q3 2022 Earnings Conference Call October 21, 2022 8:30 AM ET

Company Participants

Scott T. Crawley - Corporate Controller and Principal Accounting Officer

Archie M. Brown - President and CEO

James M. Anderson - CFO

William R. Harrod - CCO

Conference Call Participants

Scott Siefers - Piper Sandler

Daniel Tamayo - Raymond James

Brandon Rud - Stephens, Inc.

Christopher McGratty - KBW

Operator

Hello everyone and welcome to today’s First Financial Bancorp Third Quarter 2022 Earnings Conference Call and Webcast. My name is Victoria, and I'll be your operator for today. [Operator Instructions]. I will now pass over to your host, now have the pleasure of handing the call over to our host, Scott Crawley, Corporate Controller to begin. Please go ahead.

Scott T. Crawley

Thanks, Victoria and good morning everyone, and thank you for joining us on today's conference call to discuss First Financial Bancorp’s third quarter and year-to-date 2022 financial results. Participating on today's call will be Archie Brown, President and Chief Executive Officer; Jamie Anderson, Chief Financial Officer; and Bill Harrod, Chief Credit Officer. Both the press release we issued yesterday and the accompanying slide presentation are available on our website at www.bankatfirst.com under the Investor Relations section. We'll make reference to the slides contained in the accompanying presentation during today's call.

Additionally, please refer to the forward-looking statement disclosure contained in the third quarter 2022 earnings release as well as our SEC filings for a full discussion of the Company's risk factors. The information we will provide today is accurate as of September 30, 2022, and we will not be updating any forward-looking statements to reflect facts or circumstances after this call. I will now turn it over to Archie Brown.

Archie M. Brown

Thanks Scott. Good morning, everyone and thank you for joining us for today's call. Yesterday afternoon, we announced our financial results for the third quarter. I'm very pleased with our performance, which was highlighted by strong loan growth, stable asset quality, and exceptional earnings. Adjusted earnings per share increased approximately 9% from the second quarter due to record revenue which was driven by an 18% increase in net interest income. For the quarter we achieved adjusted earnings per share of $0.61, a 1.4% return on average assets, and a 23.12% return on average tangible common equity.

Recent rate increases continued to positively impact our asset sensitive balance sheet. Our net interest margin expanded in the third quarter by 53 basis points, as yields on assets increased much more rapidly than deposit costs. Credit trends remained stable across the portfolio with slight reductions in non-performing loan and net charge-off ratios. Even with these improvements our loan loss reserve grew modestly to account for loan growth and the intermediate economic outlook. We're very pleased with loan growth in the third quarter. Loan balances increased by $377 million or 15.9% on an annualized basis. Growth in the quarter was again broad-based and was driven by increases in CNI, consumer, and residential mortgage. Given our expectations for the economy in the near term and moderating loan pipelines we expect loan growth to squeeze in the coming months.