Creating a Leading Midwest Banking Franchise
EXHIBIT 99.1
2
Certain statements contained in this presentation which are not statements of historical fact constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1955. Such statements include, but are not limited to, certain plans, expectations, goals, projections
and benefits relating to the merger transaction among First Financial and MainSource, which are subject to numerous assumptions, risks and
uncertainties. Words such as „„believes,‟‟ „„anticipates,‟‟ “likely,” “expected,” “estimated,” „„intends‟‟ and other similar expressions are intended to
identify forward-looking statements but are not the exclusive means of identifying such statements. Please refer to each of First Financial‟s and
MainSource‟s Annual Report on Form 10-K for the year ended December 31, 2016, as well as their other filings with the SEC, for a more detailed
discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.
Forward-looking statements are not historical facts but instead express only management‟s beliefs regarding future results or events, many of which,
by their nature, are inherently uncertain and outside of the management‟s control. It is possible that actual results and outcomes may differ, possibly
materially, from the anticipated results or outcomes indicated in these forward-looking statements. In addition to factors previously disclosed in reports
filed by First Financial and MainSource with the SEC, risks and uncertainties for First Financial, MainSource and the combined company include, but
are not limited to: the possibility that any of the anticipated benefits of the proposed merger will not be realized or will not be realized within the
expected time period; the risk that integration of MainSource‟s operations with those of First Financial will be materially delayed or will be more costly
or difficult than expected; the inability to close the merger in a timely manner; the inability to complete the merger due to the failure of First Financial‟s
or MainSource‟s shareholders to adopt the merger agreement; diversion of management's attention from ongoing business operations and
opportunities; the failure to satisfy other conditions to completion of the merger, including receipt of required regulatory and other approvals; the failure
of the proposed merger to close for any other reason; the challenges of integrating and retaining key employees; the effect of the announcement of
the merger on First Financial‟s, MainSource‟s or the combined company's respective customer relationships and operating results; the possibility that
the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and general competitive,
economic, political and market conditions and fluctuations. All forward-looking statements included in this filing are made as of the date hereof and
are based on information available at the time of the filing. Except as required by law, neither First Financial nor MainSource assumes no obligation
to update any forward-looking statement.
Proxy Solicitation
First Financial, MainSource, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies
from First Financial‟s and MainSource‟s shareholders in favor of the approval of the merger. Information about the directors and executive officers of
First Financial and their ownership of First Financial common stock is set forth in the proxy statement for First Financial‟s 2017 annual meeting of
shareholders, as previously filed with the SEC on April 13, 2017, and First Financial‟s Annual Report on Form 10-K for the year ended December 31,
2016, as previously filed with the SEC on February 24, 2017. Information about the directors and executive officers of MainSource and their
ownership of MainSource common stock is set forth in the proxy statement for MainSource‟s 2017 annual meeting of shareholders, as previously filed
with the SEC on March 24, 2017. Shareholders may obtain additional information regarding the interests of such participants by reading the
registration statement and the proxy statement/prospectus when they become available.
Forward Looking Statement Disclosure
3
This investor presentation is being made in respect of the proposed merger transaction between First Financial Bancorp. (“First
Financial”) and MainSource Financial Group, Inc. (“MainSource”). First Financial intends to file a registration statement on Form S-4
with the Securities and Exchange Commission (the "SEC"), which will include a joint proxy statement of First Financial and MainSource
and a prospectus of First Financial, and each party will file other documents regarding the proposed transaction with the SEC. A
definitive joint proxy statement/prospectus will also be sent to the First Financial and MainSource shareholders seeking any required
shareholder approvals. Before making any voting or investment decision, investors and security holders of First Financial and
MainSource are urged to carefully read the entire registration statement and joint proxy statement/prospectus, when they
become available, as well as any amendments or supplements to these documents, because they will contain important
information about the proposed transaction. The documents filed by First Financial and MainSource with the SEC may be obtained
free of charge at the SEC‟s website at www.sec.gov. In addition, the documents filed by First Financial may be obtained free of charge
at First Financial‟s website at http://www.bankatfirst.com and the documents filed by MainSource may be obtained free of charge at
MainSource‟s website at https://www.mainsourcebank.com under the tab “Investor Relations”. Alternatively, these documents, when
available, can be obtained free of charge from First Financial upon written request to First Financial Bancorp, Attention: Shannon M.
Kuhl, Chief Legal Officer and Corporate Secretary, 255 E. Fifth Street, Suite 2900, Cincinnati, Ohio 45202 or by calling (877) 322-9530
or upon written request to MainSource Financial Group, Inc., 2105 North State Road 3 Bypass, Greensburg, Indiana 47240, Attention:
James M. Anderson, Chief Financial Officer, or by calling (812) 663-6734.
This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction. This communication is also not a solicitation of any vote in any jurisdiction pursuant to the proposed
transactions or otherwise. No offer of securities or solicitation will be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended. The communication is not a substitute for the joint proxy statement/prospectus
that First Financial and MainSource will file with the SEC.
Non-GAAP Measures
This investor presentation contains certain non-GAAP financial measures of First Financial and MainSource determined by methods
other than in accordance with generally accepted accounting principles. We use non-GAAP financial measures to provide meaningful
supplemental information regarding our performance. We believe these non-GAAP measures are beneficial in assessing our operating
results and related trends, and when planning and forecasting future periods. These non-GAAP disclosures should be considered in
addition to, and not as a substitute for or preferable to, financial results determined in accordance with GAAP. The non-GAAP financial
measures we use may differ from the non-GAAP financial measures other financial institutions use to measure their results of
operations. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are
included in the Appendix to this presentation.
Important Additional Information About the Merger
4
Transaction Overview
Negotiated transaction combining two high performing Midwest community banks to create
a $13 billion institution with scale & strength in both commercial & retail banking
Complementary balance sheets with geographies across Indiana, Ohio & Kentucky
Expands franchise coverage in key markets, including Cincinnati & Indianapolis
Provides immediate, sizeable position in desirable Louisville market
Strong alignment across markets, credit culture & banking approach
Management team combines the best talent from both companies
Strong core deposit franchise with pro forma deposit cost of 40 bps
Efficiently crosses $10 billion asset threshold with an accretive, strategic merger
Compelling
Strategic Fit
Financially Attractive
9% fully phased-in EPS accretion
5.4% TBV dilution¹ with earnback in 3.0 years
IRR in excess of 17%
Companies have successfully operated for over 100 years
Disciplined & experienced acquirers
Increased scale & broad overlap creates meaningful & achievable operating efficiencies
Extensive mutual due diligence process confirmed high compatibility & minimal risks
Comprehensive preparations underway for $10 billion regulatory requirements
Conservative Risk
Profile
1) See Appendix for non-GAAP reconciliation
5
Complementary Midwest Footprint
1) All branches located in Northwest Indiana and within the Chicago MSA
Note: Deposit market share data shown pro forma as of 6/30/16
Source: SNL Financial
Deposit Concentration By State OH,
56%
IN, 41%
KY, 3%
FFBC Pro Forma
Dollars in Millions
Top 10 Pro Forma Markets
MSA Rank Branches Deposits
Cincinnati, OH 4 60 $2,884
Indianapolis, IN 13 18 789
Northwest IN ¹ 37 11 781
Louisvil le, KY 9 18 690
Columbus, IN 1 10 671
Dayton, OH 7 10 464
Columbus, OH 15 6 459
Greensburg, IN 1 5 345
Celina, OH 2 4 299
Bloomington, IN 3 3 290
Cincinnati, OH Indianapolis, IN
FFBC (102)
MSFG (101)
Columbus, IN
OH,
42%
IN, 49%
KY,
7%
IL, 1%
6
The Combination of Two Strong Community Banks
1) Market data as of 7/25/17
2) Consensus median Street estimates
3) Does not reflect purchase accounting or merger adjustments
4) Fully diluted ownership for FFBC and MSFG
Source: SNL Financial, Thomson Reuters, Company documents; Financial data as of 6/30/17
Combined³
Total Assets ($ in billions) $8.7 $4.6 $13.3
Total Loans ($ in billions) $5.9 $3.0 $8.9
Total Deposits ($ in billions) $6.5 $3.5 $10.0
Tangible Common Equity ($ in billions) $0.7 $0.4 $1.1
Market Capitalization ($ in billions)¹ $1.7 $0.9 $2.6
2017 Consensus Net Income ($ in millions)² $98 $54 $152
2018 Consensus Net Income ($ in millions)² $107 $62 $168
Assets Under Management ($ in billions) $2.6 $1.4 $4.0
Branches 102 101 203
Total Assets Total Loans Total Deposits Pro Forma Ownership⁴ 2018 Earnings³
35% 65% 34% 66% 35% 65% 37% 63% 31% 54%
AT Cost Saves
(Fully phased-in)
14%
FFBC MSFG
7
Strong Commercial Business &
High Quality Loan Portfolio
1) Excludes owner-occupied CRE
2) Loan composition & yields excludes purchase accounting marks
3) Includes residential mortgage, home equity, installment, agriculture & credit card loans
Note: Financial data as of 6/30/17, dollars in billions
Source: SNL Financial, Company documents, and management projections
First Financial
MRQ Yield on Loans: 4.61%
Total Loans: $5.9
Commercial
& Leasing
33%
Owner
Occupied
CRE
12%
Investor
CRE
30%
Construction
7%
Consumer
Lending³
18%
MainSource
MRQ Yield on Loans: 4.37%
Total Loans: $3.0
Commercial
& Leasing
15%
Owner
Occupied
CRE
18%
Investor
CRE
26%
Construction
4%
Consumer
Lending³
37%
Pro Forma ²
MRQ Yield on Loans: 4.53%
Total Loans: $8.9
Commercial
& Leasing
27%
Owner
Occupied
CRE
14%
Investor
CRE
29%
Construction
6%
Consumer
Lending³
24%
Diversified CRE Portfolio
High Quality, Low Risk Portfolio
Well-diversified / no significant concentrations
Strong credit quality profile
Solid credit management & oversight
Concentrations to total risk based capital
comfortably within regulatory guidance
51% Construction & Development
218% Commercial Real Estate¹
MainSource Loan Portfolio Overview
Retail
24%
1-4
9%
Multi
9%
Off ce /
Medical
15%
Industrial
12%
Hotel
7%
C&D
8%
Sr.
Housing
3% Other
12%
Total CRE: $1.4
8
Exceptional Retail Franchise
1) Excludes purchase accounting marks
Note: Core deposits excludes CDs greater than $250K
Source: SNL Financial, Company documents; Financial data as of 6/30/17, dollars in billions
Cost of Deposits MainSource Branch System Overview
Top tier retail franchise drives strong,
consistent deposit base
0.16% cost of deposits – best amongst
peers
96.9% core deposits
Successful, consumer/retail operating
model
First Financial
Total Deposits: $6.5
% of Core Deposits: 96.9%
NIB
Demand
23%
IB
Demand
23%
Savings
37%
Time
17%
MainSource
Total Deposits: $3.5
%of Core Deposits: 96.9%
NIB
Demand
24%
IB
Demand
36%
Savings
25%
Time
15%
Pro Forma
Total Deposits: $10.0
%of Core Deposits: 96.9%
NIB
Demand
23%
IB
Demand
28%
Savings
33%
Time
16%
1
0.53%
0.16%
0.40%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
FFBC MSFG Pro Forma ¹
9
Transaction Summary
Fixed exchange ratio of 1.3875 shares of First Financial for each share of MainSource common stock
100% Stock Consideration
$1.0 billion in aggregate transaction value¹
$38.99 purchase price per share¹
MainSource options will be exchanged for comparable First Financial options
First Financial 63.4% / MainSource 36.6% of combined company4
The Board of Directors of the combined company will be comprised of 15 directors
Composition will be proportionate with 9 First Financial board members & 6 from MainSource
Claude Davis, current FFBC CEO, will be Executive Chairman for both holding company & bank
Archie Brown, Jr., current MSFG CEO, will be President & CEO for both holding company & bank
Expected in 1st Quarter 2018
Customary conditions to closing, including shareholder consent as well as receipt of all necessary
regulatory approvals without any unduly burdensome conditions
Consideration
Option Treatment
Pro Forma Ownership
Board Composition
Leadership
Closing
1) Based on FFBC‟s closing price of $28.10 on July 25, 2017; calculation of total aggregate value includes in-the-money options and
warrants
2) As of June 30, 2017; LTM earnings excludes $4.8mm of after-tax merger related charges for MSFG over the last twelve months
3) Based on MSFG‟s closing price of $33.81 on July 25, 2017
4) Calculated on a fully-diluted basis for First Financial and MainSource
Headquarters Cincinnati, OH
Valuation Multiples
2.72x tangible book value per share²
19.3x LTM earnings per share and 12.1x LTM earnings including fully phased-in after-tax cost savings²
15.3% market premium³
10
Financial Impact & Assumptions
Estimated $43 million; ~36% of MSFG‟s total noninterest expense base (~13% on a combined basis)
40% of cost saves from consolidation of 45 – 50 banking centers
75% of cost saves realized in first year post-close, 100% thereafter
Gross credit mark on MSFG‟s loan portfolio of 1.00% or $31.9 million (net credit mark of 0.2%)
Including MSFG‟s mark on PCI loans the gross transaction credit mark is $37.1 million, or 1.16%
Cost Savings
One-Time Expenses
EPS Accretion
TBV Value Impact
Internal Rate of Return
5.2% in 2018 excl. transaction expenses, 9.3% in 2019 (first full year)
5.4% TBV dilution¹, earnback of 3.0 years using crossover method², 3.8 years using simple method³
17.5% IRR, above internal targets
Credit Mark
Total restructuring costs of $63 million, 145% of fully-phased in cost savings
1) See Appendix for non-GAAP reconciliation
2) Based on when pro forma tangible book value per share crosses over and begins to exceed projected standalone FFBC tangible book value
per share
3) Based on dilution to tangible book value per share at close divided by earnings per share accretion in 2019
4) All dollar amounts shown pre-tax except reduction in Fed dividend payments
$12 million combined annual interchange fee revenue loss due to Durbin
Phase in – 50% in 2019, 100% thereafter
$2 million additional annual expenses from heightened regulatory / compliance costs
Phase in – 50% in 2018, 100% thereafter
$500 thousand reduction in dividend payments on Federal Reserve Bank capital stock due to FAST Act
Phase in – 50% in 2018, 100% thereafter
$46.0 million CDI created (1.5% of core deposits), amortized over 9 years using sum of years digits
$5.1 million write-down on MSFG‟s TruPS, amortized through earnings over 16.3 years
$4.5 million write-down on MSFG‟s CDs & FHLB advances, amortized through earnings over 5.25 years
Regulatory
Adjustments4
Other Purchase
Accounting
Adjustments
1.11%
1.17%
1.28%
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
FFBC
LTM 6/30/17
MSFG
LTM 6/30/17
Pro Forma 2019
11
Capital & Profitability
Total Assets
Total Risk Based Capital
ROAA⁴ ROATCE⁴
14.1% 14.1%
15.6%
0.0%
4.0%
8.0%
12.0%
6.0%
20.0%
FFBC
LTM 6/30/17
MSFG
LTM 6/30/17
Pro Forma 2019
Tang. Common Equity / Tang. Assets⁴
8.1% 8.3% 8.2%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
FFBC
6/3 /17
MSFG
6/30/17
Pro Forma
at Close
Tier 1 Common Ratio
10.5%
11.2%
10.8%
5.0%
7.
9.0%
11.0%
13.0%
15.0%
FFBC
6/30/17
MSFG
6/30/17
Pro Forma
at Close
1) Pro forma as of 6/30/17; excludes purchase accounting marks & growth
2) Pro forma ratio at closing, 3/31/18; includes all purchase accounting adjustments
3) Pro forma ratio for full year ending 12/31/19; includes all purchase accounting adjustments & assumes 100% Durbin impact
4) See Appendix for non-GAAP reconciliation
5) Core LTM Ratios adjusted for merger-related expenses & FHLB prepayment penalty
Source: SNL Financial; Company documents
13.1%
13.3%
13.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
FFBC
6/30 17
MSFG
6/30/17
Pro Forma
at Close
$8,710
$4,590
$13,300
$0
$3,000
$6,000
$9,000
$12,000
$15,000
FFBC
6/30/17
MSFG
6/30/17
Pro Forma 6/30/17
2 2 2
3 3
5 5
1
12
Comprehensive Due Diligence & Preparation
Disciplined &
Experienced Acquirers
Thorough
Due Diligence
Process
Crossing $10 Billion
Both First Financial & MainSource are highly experienced & disciplined acquirers of community
banks, branches & asset managers
Comprehensive process led by FFBC & MSFG senior leadership
Extensive credit due diligence performed by both companies, including thorough loan file review
& credit re-underwriting
Detailed file review covered approximately 44% of MSFG‟s commercial loan balances
Detailed review of recently acquired loans
Strong familiarity between Credit teams
Significant alignment in credit philosophy & approach
Collaborative, detailed review of both companies‟ cost structure & expected synergies
Thorough review of all regulatory, compliance, legal & operational risks
Potential required branch divestures are limited
Preparations underway for $10 billion regulatory requirements & costs
First Financial began preparing for $10 billion requirements in 2015
Investments in enterprise data management & compliance largely in current run rate
DFAST gap assessment completed in 2016
Additional investment required for DFAST infrastructure / personnel, CFPB oversight
Expect Durbin financial impact starting 2H 2019¹
Expect initial DFAST submission in 2020¹
1) Based on expected closing in 1Q 2018
13
Business Integration Opportunity
No revenue synergies have been included in the financial modeling, however,
we believe there are several opportunities to combine the strengths of both companies:
Extends capabilities & expertise to MainSource lenders & clients
Expanded commercial product set
Higher lending limits
Commercial Lending
Retail Franchise
Benefits of Scale
Opportunity to utilize highly successful MainSource retail culture
Enhance efforts to grow low cost core deposits
Wealth Management
Expanded product & service offerings
Retirement Planning Services
Private Banking for high net worth individuals
Dedicated investment management team & disciplined portfolio management process
Ability to pursue larger clients
Balance sheet repositioning
Eliminates growth barrier of $10 billion threshold
14
Appendix
(90.0%)
(60.0%)
(30.0%)
0.0%
30.0%
60.0%
90.0%
120.0%
150.0%
Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17
15
Long-Term Outperformance by Both Institutions
Source: SNL Financial; Market data as of 7/25/17
10-Year Historical Stock Price Performance vs. NASDAQ Bank Index
27.8% - NASDAQ
Bank
125.0% - MSFG
120.0% - FFBC
16
Combined Management Structure
Claude Davis will assume the role of Executive Chairman of the board
Three-year term, then transitions to Non-executive Chairman
Archie Brown, Jr. will serve as President & CEO, member of the board
Will jointly lead the company, partnering on strategy, management & performance
Will also jointly lead the transition team to ensure successful cultural integration
Chairman &
CEO Roles
Executive
Chairman Role
Newly created role to provide capacity for CEO to focus on business execution & results
Role will focus on:
Board Integration
Strategy
Investor Relations
Corporate Development
Community, Regulatory & Government Relations
Regulatory Management Model
Oversee development of ERM model to meet the increased regulatory & compliance
requirements of a $10B+ bank
17
Combined Management Structure
Chief Banking Officer – Anthony Stollings
Chief Financial Officer – Jamie Anderson
Chief Administrative Officer – John Gavigan
Chief Credit Officer – Bill Harrod
Chief Risk Officer – Shannon Kuhl
General Counsel – Karen Woods
Chief Internal Auditor – Matt Burgess
Executive Team Line of Business Leaders
Commercial Finance – Rick Dennen
Commercial & Private Banking – Brad Ringwald
Investment Commercial Real Estate – Paul Silva
Wealth Management – Greg Harris
Consumer – Chris Harrison
Mortgage – Jill Stanton
18
Non-GAAP Reconciliation
1) Based on 1.3875x shares of FFBC common stock for each MSFG common share outstanding
2) Estimated based on assumptions, subject to change at transaction closing
3) Restructuring costs allocated to FFBC
4) Based on when Pro Forma TBV per share crosses over & begins to exceed projected standalone FFBC tangible book value per share
5) Estimated MSFG tangible common equity at close based on three quarters of consensus median earnings & dividends estimates provided by
MSFG management
6) One-time costs allocated to MSFG
Note: Assumes 1.3875x exchange ratio on FFBC‟s closing price of July 25, 2017; FFBC & MSFG's earnings equal to median consensus analyst
estimates; Marginal tax rate of 35% on pro forma adjustments
Tangible Book Value Dilution One Time Expenses
Millions of
$ Millions Shares $ per Share
FFBC Standalone
FFBC Tangible Book Value at June 30, 2017 $688 62 $11.07
( + ) Three Quarters of Consensus Median Earnings Prior to Close 78
( + ) Three Quarters of $0.17 Per Share Common Dividends (33)
( + ) Amortization of Existing Core Deposit Intangibles 1
Standalone FFBC TBV at Close $734 62 $11.81
Pro Forma
FFBC Tangible Book Value at Close $734 62 $11.81
( + ) Equity Consideration to MSFG ¹ 1,016 36
( + ) Total Intangibles Created ² (648)
( + ) FFBC A-T Restructuring Costs ³ (10)
Pro Forma FFBC TBV at Close $1,092 98 $11.18
FFBC (Dilution) - $ ($0.64)
FFBC (Dilution) - % (5.4%)
Tangible Book Value Per Share Earnback ⁴ ~ 3.0 years
Intangibles Created
$ Millions
Deal Value $1,016
MSFG TCE at Close
5
$403
( + ) MSFG A-T One-Time Costs
6
(20)
( + ) Net A-T FV Marks 2
Adjusted Tangible Book Value $384
Excess over Adjusted Tangible Book Value $632
( + ) Core Deposit Intangible Created (46)
( + ) DTL on CDI 16
Goodwill Created $602
Total Intangibles Created $648
19
Non-GAAP Reconciliation
1) Estimated based on 1.3875x exchange ratio on FFBC‟s closing price of July 25, 2017 and other transaction assumptions,
subject to change at transaction closing
2) MSFG goodwill and intangibles at 6/30/17 are based on internal averages
3) Assumes 100% impact of Durbin
FFBC MSFG Pro Forma Pro Forma
(Dollars in millions) 6/30/2017 6/30/2017 at Close¹ at 12/31/2019¹
Total common shareholders' equity $898 $516 $1,949 --
Less:
Goodwill and other intangibles (210) (150) (857) --
Ending tangible common equity (a) $688 $367 $1,092 --
Total assets 8,710 4,590 14,244 --
Less:
Goodwill and other intangibles (210) (150) (857) --
Ending tangible assets (b) $8,500 $4,440 $13,387 --
LTM Net Income 93 45 -- $193
Add:
Merger-related expenses, net of tax -- 5 -- --
FHLB prepayment penalty, net of tax -- 0 -- --
Adjusted net income (c) $93 $50 -- $193
Average total common shareholders' equity 870 485 -- 2,079
Less:
Goodwill and other intangibles² (210) (129) -- (840)
Average tangible common equity (d) $660 $356 -- $1,240
Average total assets (e) 8,418 4,293 -- 15,070
Tangible common equity / Tangible assets (a) / (b) 8.1% 8.3% 8.2% --
LTM Return on average tangible common shareholders' equity (c) / (d) 14.1% 14.1% -- 15.6%
LTM Return on average assets (c) / (e) 1.11% 1.17% -- 1.28%
3
20
FFBC 2Q 2017 Highlights – 107th Consecutive Quarter of Profitability
Total assets increased $178.9 million, to $8.7 billion, or 8.4% annualized, compared to the linked quarter.
EOP loans increased $119.7 million, or 8.3% annualized, compared to the linked quarter.
EOP deposits decreased $61.0 million, or 3.7% annualized, compared to the linked quarter.
EOP investment securities increased $46.3 million compared to the linked quarter.
Balance Sheet
Profitability
Asset Quality
Net Interest Income
&
Net Interest Margin
Income Statement
Capital
Noninterest income = $17.5 million.
Noninterest expense = $51.6 million.
Efficiency ratio = 60.0%.
Effective tax rate of 33.0%.
Net interest income = $68.5 million, a $0.4 million decrease compared to the linked quarter.
Net interest margin of 3.50% on a GAAP basis; declined 14 bps to 3.56% on a fully tax equivalent basis.
Average earning assets grew 8.3% on an annualized basis.
Net income = $22.7 million or $0.37 per diluted share.
Return on average assets = 1.06%.
Return on average shareholders‟ equity = 10.25%.
Return on average tangible common equity = 13.42%.
Provision expense = $0.5 million. Net charge offs = $1.9 million. NCOs / Avg. Loans = 0.13% annualized.
Nonperforming Loans / Total Loans = 0.97%. Nonperforming Assets / Total Assets = 0.72%.
ALLL / Nonaccrual Loans = 150.05%. ALLL / Total Loans = 0.93%. Classified Assets/Total Assets = 1.13%.
Total capital ratio = 13.05%.
Tier 1 capital ratio = 10.54%.
Tangible common equity ratio = 8.09%.
Tangible book value per share = $11.07.
MSFG 2Q 2017 Highlights
21
Profitability
Net Interest Income
&
Net Interest Margin
Income Statement
Balance Sheet
Asset Quality
Capital
Net income = $9.7 million, or $13.6 million excluding non-operating expenses(1)
EPS = $0.38 per diluted share, or $0.53 per diluted share excluding non-operating expenses(1)
Return on average assets = 0.88%, or 1.23% excluding non-operating expenses(1)
Return on average shareholders’ equity = 7.74%, or 10.84% excluding non-operating expenses(1)
Return on average tangible common equity = 10.78%, or 15.00% excluding non-operating expenses(1)
Net interest income = $35.5 million, a $7.3 million increase compared to the linked quarter
Net interest margin of 3.77% on a fully tax equivalent basis, an increase of one (1) bps to the linked quarter
Purchase accounting marks added thirteen (13) basis points to the net interest margin
Noninterest income = $13.5 million
Noninterest expense = $36.4 million, or $30.6 million excluding non-operating expenses(1)
Efficiency ratio = 71.4%, or 60.0% excluding non-operating expenses(1)
Effective tax rate of 22.8%
Added $530 million in assets related to the acquisition of FCB Bancorp, Inc. (completed April 30)
Total assets increased $547 million, on a linked quarter basis , to $4.6 billion
EOP loans increased $416 million on a linked quarter basis. Excluding the $428 million of loans acquired
from FCB, loans decreased by $12 million organically
Provision expense = $100K. Net charge offs = $163K. NCOs / Avg. Loans = 0.02% annualized
Nonperforming Assets (w/TDRs) / Total Assets = 0.54%
ALLL / Nonaccrual Loans = 114.8%. ALLL / Total Loans = 0.73%
Total capital ratio = 13.3%
Tier 1 capital ratio = 12.6%
Tangible common equity ratio = 8.3%
Tangible book value per common share = $14.34
(1) Non-operating expenses include $3.765 million in merger-related expenses, net of tax and $0.139 million related to a FHLB prepayment penalty, net of tax
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