10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934

Commission File Number 0-12379

FIRST FINANCIAL BANCORP.
(Exact name of registrant as specified in its charter)

Ohio	31-1042001
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
300 High Street	45011
Hamilton, Ohio	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (513) 867-4700

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, no par value

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to be file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    X        No          

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (subpart 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[   ]

     As of February 22, 2002, there were issued and outstanding 46,517,646 shares of registrant’s Common Stock. The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the sales price of the last trade of such stock as of February 22, 2002, was $744,282,000. (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant.)

Documents Incorporated by Reference:

     Portions of the registrant’s Annual Report to Shareholders for the year ended December 31, 2001 are incorporated by reference into Parts I, II and IV.

     Portions of the proxy statement dated March 15, 2002 for the annual meeting of shareholders to be held April 23, 2002 are incorporated by reference into Part III.

TABLE OF CONTENTS

Exhibit 10.5

Exhibit 13

Exhibit 21

Exhibit 23

FORM 10-K CROSS REFERENCE INDEX

			Page
Part I	Item 1	Business	F-1
	Item 2	Properties	F-5
	Item 3	Legal Proceedings	F-5
	Item 4	Submission of Matters to a Vote of Security Holders (during the fourth quarter of 2001)	F-5
	Additional Item — Executive Officers		F-6
Part II	Item 5	Market for the Registrant’s Common Equity and Related Shareholder Matters	F-8
	Item 6	Selected Financial Data	F-8
	Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	F-8
	Item 7a	Quantitative and Qualitative Disclosures about Market Risk	F-9
	Item 8	Financial Statements and Supplementary Data	F-9
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	F-9
Part III	Item 10	Directors and Executive Officers of the Registrant	F-10
	Item 11	Executive Compensation	F-10
	Item 12	Security Ownership of Certain Beneficial Owners and Management	F-10
	Item 13	Certain Relationships and Related Transactions	F-10
Part IV	Item 14	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	F-11
Signatures			F-14

F-1

Part I

Item 1. Business.

First Financial Bancorp.
First Financial Bancorp., an Ohio corporation (Bancorp), is a financial holding company that engages in the business of commercial banking, and other permissible activities that are financial in nature, through thirteen wholly owned subsidiary institutions: First National Bank of Southwestern Ohio (First Southwestern), Bright National Bank (Bright National), and National Bank of Hastings (Hastings), all national banking associations, Community First Bank & Trust (Community First), The Clyde Savings Bank Company (Clyde), both Ohio banking corporations, Indiana Lawrence Bank (Indiana Lawrence), Citizens First State Bank (Citizens First), Heritage Community Bank (Heritage), and Sand Ridge Bank (Sand Ridge), all Indiana banking corporations, Hebron Deposit Bank (Hebron), a Kentucky banking corporation, and Fidelity Federal Savings Bank (Fidelity Federal), a federal savings bank. First Financial Bancorp Service Corporation (Service Corporation) is Bancorp’s operations subsidiary, and Flagstone Insurance and Financial Services Holding Company (Flagstone) is Bancorp’s insurance agency. Bancorp provides management and similar services for its subsidiary financial institutions. Since it does not itself conduct any operating businesses, Bancorp must depend largely upon its thirteen subsidiaries for funds with which to pay the expenses of its operation and, to the extent applicable, any dividends on its outstanding shares of stock. For further information see Note 6 of the Notes to Consolidated Financial Statements appearing on page 19 of Bancorp’s Annual Report to Shareholders, which is incorporated by reference in response to this item.

Bancorp was formed in 1982 for the purpose of becoming the parent holding company of First Southwestern. For additional information, please see “Subsidiaries” on pages F-2 and F-3.

Originally formed as a bank holding company, Bancorp elected to become a financial holding company under the Gramm-Leach-Bliley Act of 1999 (GLBA) effective April 13, 2000. As a financial holding company, Bancorp is limited to conducting activities that are financial in nature as defined under the GLBA. Bancorp’s activities are subject to strict regulation by various state and federal regulatory authorities including the Board of Governors of the Federal Reserve System (Board of Governors) which, in accordance with the GLBA, serves as an “umbrella supervisor” to all financial holding companies (see “Regulation” on page F-3).

Bancorp faces strong competition from both financial institutions and other non-financial organizations. Its competitors include local and regional financial institutions, savings and loans, and bank holding companies, as well as some of the largest banking organizations in the United States. In addition, other types of financial institutions, such as credit unions, also offer a wide range of loan and deposit services that are directly competitive with those offered by Bancorp’s subsidiaries. The consumer is also served by brokerage firms and mutual funds that provide checking services, credit cards, and other services similar to those offered by Bancorp’s subsidiaries. Major stores compete for loans by offering credit cards and retail installment contracts. It is anticipated that competition from entities other than financial institutions will continue to grow.

The range of banking services provided by Bancorp’s subsidiaries to their customers includes commercial lending, real estate lending, consumer credit, credit card, and other personal loan financing. First Southwestern, Community First, Indiana Lawrence, Heritage, Clyde, Bright National, and Sand Ridge also offer lease financing. In addition, Bancorp’s financial institutions offer deposit services that include interest-bearing and noninterest-bearing deposit accounts and

F-2

time deposits. Most subsidiaries provide safe deposit facilities. A full range of trust and asset management services is provided by Bancorp’s subsidiaries, excluding the savings banks, the insurance agency, and the service corporation. Each subsidiary retains its local identity and operates under the direction of its own board of directors and officers.

Bancorp and its subsidiaries operate in one business segment—the financial institutions industry. Foreign transactions are nominal. Information regarding statistical disclosure required by Industry Guide 3 is included in Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001, and is incorporated herein by reference.

At December 31, 2001, Bancorp and its subsidiaries employed 1,832 employees.

Bancorp’s executive office is located at 300 High Street, Hamilton, Ohio 45011, and its telephone number is (513) 867-4700.

Subsidiaries
The following table lists each of Bancorp’s subsidiaries, their acquisition dates, the number of offices that each subsidiary has, total deposits, and the number of ATMs owned by each subsidiary:

		Deposits
	Acquisition	12/31/01		Number of		Number of
Subsidiary/Location	Date	($in 000)		Offices		ATMs
First Southwestern/    Hamilton, Ohio	04/26/83	$	1,045,613		38		37
Community First/    Celina/Van Wert, Ohio	04/29/83		662,479		24		14
Indiana Lawrence/    North Manchester, Indiana	09/01/89		123,832		8		3
Fidelity Federal/    Marion, Indiana	09/21/90		83,362		3		1
Citizens First/    Hartford City, Indiana	10/01/90		84,620		5		4
Clyde/    Clyde, Ohio	06/01/94		76,549		3		4
Heritage/    Columbus, Indiana	01/04/93		294,082		15		13
Bright National/    Flora, Indiana	10/01/95		123,836		7		6
Hastings/    Hastings, Michigan	01/01/97		52,034		2		3
Sand Ridge/    Highland, Indiana	06/01/99		463,814		6		18
Hebron/    Hebron, Kentucky	06/01/99		94,412		3		4
Service Corporation/    Middletown, Ohio	06/01/99		N/A		1		0
Flagstone/    Celina, Ohio	12/29/00		N/A		1		0

F-3

Bancorp merged four of its wholly owned subsidiaries, Union Bank & Trust Company, Peoples Bank and Trust Company, Farmers State Bank, and Vevay Deposit Bank to form Heritage in November 2001.

In July 2000, Bancorp merged its wholly owned subsidiary, Home Federal Bank, a Federal Savings Bank, Hamilton, Ohio, into another of its wholly-owned subsidiaries, First Southwestern, as an in-market consolidation.

On June 30, 1999, Union Trust Bank, a wholly owned subsidiary of Bancorp, merged into Community First. On December 31, 2001, Community First purchased certain assets and assumed certain liabilities of a division of Blue River Bancshares operating under the name First Community Bank of Fort Wayne, Indiana. This division has two branch locations in Fort Wayne.

Regulation
First Southwestern, Bright National and Hastings, as national banking associations, are subject to supervision and regular examination by the Comptroller of the Currency. Community First and Clyde, as Ohio state chartered banks, are subject to supervision and regular examination by the Superintendent of Banks of the State of Ohio. First Southwestern, Community First, Clyde, Heritage, Bright National, Hastings, and Sand Ridge are members of the Federal Reserve System and, as such, are subject to the applicable provisions of the Federal Reserve Act. Community First, Heritage, and Sand Ridge are also subject to regular examination by the Federal Reserve System. Indiana Lawrence, Citizens First, Heritage, and Sand Ridge, as Indiana state chartered banks, are subject to supervision and regular examination by the Indiana Department of Financial Institutions. Hebron is subject to supervision and regular examination by the Kentucky Department of Financial Institutions. Fidelity Federal as a federal savings bank, is subject to supervision and regular examination by the Office of Thrift Supervision. Since Fidelity Federal is located in Indiana, it is also subject to examination by the Indiana Department of Financial Institutions. Flagstone is subject to licensing and other requirements imposed by the Ohio Department of Insurance. All depository institutions are insured by the Federal Deposit Insurance Corporation and are subject to the provisions of the Federal Deposit Insurance Act.

To the extent that the following information consists of summaries of certain statutes or regulations, it is qualified in its entirety by reference to the statutory or regulatory provisions described.

As a bank holding company that has elected status as a financial holding company, Bancorp is subject to the provisions of the Bank Holding Company Act of 1956 as amended (the Act). The Act requires bank holding companies to register under the Act and to be subject to supervision and examination by the Board of Governors. Bancorp is required to file with the Board of Governors an annual report and such additional information as the Board of Governors may require pursuant to the Act. The Act requires prior approval by the Board of Governors of the acquisition of 5% or more of the voting stock or substantially all the assets of any bank within the United States. Following the passage of Financial Institutions Reform, Recovery, and Enforcement Act of 1989, bank holding companies may acquire thrift institutions subject to approval by the Board of Governors and the Office of Thrift Supervision and ongoing regulation and examination by the Office of Thrift Supervision. As a financial holding company located in the State of Ohio, Bancorp is not permitted to acquire a bank located in another state unless such acquisition is specifically authorized by the statutes of such state, as is the case in Indiana, Michigan, and Kentucky. The Act further provides that the Board of Governors shall not approve any such acquisition that would result in a monopoly or would be in

F-4

furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any part of the United States, or the effect of which may be to substantially lessen competition or to create a monopoly in any section of the country, or that in any other manner would be in restraint of trade, unless the anti-competitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.

The Act and the regulations of the Board of Governors prohibit a bank holding company and its subsidiaries from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property, or furnishing of services. The Act also imposes certain restrictions upon dealings by affiliated banks with the holding company and among themselves, including restrictions on interbank borrowing and upon dealings in respect to the securities or obligations of the holding company or other affiliates.

The Act was amended by the Gramm-Leach-Bliley Act of 1999, which was enacted on November 12, 1999. The GLBA also repealed portions of the Glass-Steagall Act, a piece of depression-era legislation intended to separate banking and commerce. Under the GLBA, bank holding companies that satisfy certain requirements may elect to become financial holding companies. The GLBA allows financial holding companies to engage in certain financial activities that are not permitted for bank holding companies. The GLBA provides a list of activities that are “financial in nature” and therefore permitted for financial holding companies. The list includes: lending, investing or safeguarding money or securities; underwriting insurance or annuities, or acting as an insurance or annuity principal, agent or broker; providing financial or investment advice; issuing or selling interests in pools of assets that a bank could hold; underwriting, dealing or making markets in securities; and, subject to certain conditions, merchant banking or insurance portfolio investing. The Board of Governors has the authority to determine that other activities are permitted for financial holding companies, if those activities satisfy certain criteria.

On April 13, 2000, Bancorp’s election with the Board of Governors to become a financial holding company became effective. Bancorp may now take advantage of the expanded activities available to financial holding companies.

The GLBA establishes the concept of functional regulation for bank holding companies and financial holding companies, which means that the authority to regulate will be determined by the nature of the activity involved. Bank holding companies, financial holding companies and their subsidiaries will be supervised by the regulatory agency that has traditionally regulated the particular activity in question, while the Board of Governors will serve as an “umbrella supervisor.” However, if Bancorp expands its activities into new areas, those activities may be subject to the supervision of regulatory agencies that have not previously supervised Bancorp’s activities.

The earnings of banks, and therefore the earnings of Bancorp (and its subsidiaries), are affected by the policies of regulatory authorities, including the Board of Governors of the Federal Reserve System. An important function of the Federal Reserve Board is to regulate the national supply of bank credit in an effort to prevent recession and to restrain inflation. Among the procedures used to implement these objectives are open market operations in U.S. Government securities, changes in the discount rate on member bank borrowings, and changes in reserve requirements against member bank deposits.

These procedures are used in varying combinations to influence overall growth and distribution of

F-5

bank loans, investments and deposits, and their use also may affect interest rates charged on loans or paid for deposits.

Monetary policies of the Federal Reserve Board have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effect, if any, of such policies upon the future business and earnings of Bancorp cannot accurately be predicted.

Bancorp makes no attempt to predict the effect on its revenues and earnings of changes in general economic, industrial, and international conditions or in legislation and governmental regulations.

Item 2. Properties.
The registrant and its subsidiaries operate from 61 offices in Ohio, including Bancorp’s executive office in Hamilton, Ohio, 49 offices in Indiana, three in Kentucky and two in Michigan. Twenty-seven of the offices are located in Butler County, Ohio, of which five branches are built on leased land and seven branches are located in buildings and on land that are leased. Excess space in one facility is leased to third parties. Seven offices are located in Hamilton County, Ohio wherein the land and building are leased for five of the offices. Four offices are located in Auglaize County, Ohio, of which one building is leased and where part of the land is leased for one office. Three offices are located in Sandusky County, Ohio, wherein the land and building is leased for one office. Seven offices are located in Mercer County, Ohio, four in Van Wert County, Ohio, two in Preble County, Ohio, three in Warren County, Ohio, two in Paulding County, Ohio, one in Allen County, Ohio, and one in Williams County, Ohio. Five offices are located in Wabash County, Indiana, of which two are leased. Six offices are in Lake County, Indiana of which three are leased. Four offices are in Carroll County, Indiana, of which one is located in a building and on land that is leased. Two offices are located in Tippecanoe County, wherein the land and building are leased for one office. There is one office located in Bartholomew County, Clinton County, Dearborn County, Delaware County, and Jefferson County, Indiana, wherein the land and building are leased for each. Three offices are in Randolph County, Indiana, three in Grant County, Indiana, one in Jay County, Indiana, three in Blackford County, Indiana, one in Fayette County, Indiana, one in Franklin County, Indiana, two in Jennings County, Indiana, two in Tippecanoe County, Indiana, three in Fulton, County, Indiana, two in Union County, Indiana, two in Rush County, Indiana, one in Ripley County, Indiana, and three in Switzerland, County, Indiana. One office is located in Barry County, Michigan and one in Allegan County, Michigan. Three offices are located in Boone County, Kentucky. All leases are comparable to other leases in the respective market areas and do not contain provisions detrimental to the registrant or its subsidiaries.

Item 3. Legal Proceedings.
Except for routine litigation incident to their business, the registrant and its subsidiaries are not a party to any material pending legal proceedings and none of their property is the subject of any such proceedings.

Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to the shareholders during the fourth quarter of 2001.

Additional Item — Executive Officers.
Shown in the table below are the Executive Officers of Bancorp as of December 31, 2001. The Executive Officers will serve until the first meeting of the Board of Directors following the next annual meeting of shareholders, scheduled to be held on April 23, 2002, or until their successors are elected

F-6

and duly qualified. All Executive Officers are chosen by the Board of Directors by a majority vote.

Name	Age		Position
Stanley N. Pontius		55	President and Chief Executive Officer, Director
James C. Hall		40	Executive Vice President
Mark W. Immelt		56	Senior Vice President, Trust Services
Brian D. Moriarty		59	Senior Vice President, Human Resources
C. Thomas Murrell		58	Senior Vice President and Chief Lending Officer
Michael R. O’Dell(1)		50	Senior Vice President, Chief Financial Officer, and Secretary
C. Douglas Lefferson(2)		37	First Vice President, Comptroller

The following is a brief description of the business experience over the past five years of the individuals named above.

Stanley N. Pontius became Chief Executive Officer of Bancorp in July 1992. Upon joining Bancorp in March 1991, he assumed the responsibilities of President and Chief Operating Officer, as well as a director. He served as Chief Operating Officer until July 1992. Also in March 1991, he became President, Chief Executive Officer, and a director of First Southwestern. Effective July 1, 1997, Mr. Pontius was promoted to Chairman of the Board of First Southwestern and retained the position of Chief Executive Officer until November 24, 1998.

James C. Hall became Executive Vice President of Bancorp on June 4, 2001. Since 1991, Mr. Hall has progressed through three Bancorp affiliates. He joined Home Federal Bank, a Federal Savings Bank as Executive Vice President. In 1996, he moved to Fidelity where he served as President and Chief Executive Officer. In 1999, he was named President and Chief Operating Officer of Sand Ridge.

Mark W. Immelt became Senior Vice President of Bancorp Trust Services on July 1, 1997. Mr. Immelt joined First Southwestern in December 1996 as Senior Vice President and Senior Trust Officer. In December 1999, he was promoted to President and Chief Executive Officer of First Southwestern. Before joining First Southwestern, he spent 28 years managing personal trust, corporate trust, employee benefit programs and private banking programs in the Northern Indiana and Northeast Ohio area.

(1)	On January 11, 2002, Michael R. O’Dell retired as Chief Financial Officer of Bancorp. He continues to serve as Senior Vice President and Secretary.
(2)	On January 11, 2002, C. Douglas Lefferson was promoted to Senior Vice President and Chief Financial Officer of Bancorp.

F-7

Brian D. Moriarty became Senior Vice President of Bancorp, responsible for the human resources function, on January 12, 1996. Mr. Moriarty also became Senior Vice President of First Southwestern in January 1996, where he had been First Vice President since 1991.

C. Thomas Murrell joined Bancorp on April 30, 2001 as Senior Vice President and Chief Lending Officer. Prior to joining Bancorp, Mr. Murrell spent most of his thirty years in banking in Kentucky, with his most recent position at Firstar, N.A. in Cincinnati, Ohio.

Michael R. O’Dell became Senior Vice President, Chief Financial Officer and Secretary of Bancorp on January 12, 1996. He had served as Bancorp’s Comptroller since December 1994. Mr. O’Dell had served as Senior Vice President and Chief Financial Officer of First Southwestern from January 1996 to July 1997, and as First Vice President and Comptroller of First Southwestern from 1991 to January 1996. Mr. O’Dell served as Chief Financial Officer throughout 2001. On January 11, 2002, Mr. O’Dell retired as Chief Financial Officer and was succeeded by C. Douglas Lefferson. Mr. O’Dell continues to serve as Senior Vice President and Secretary of Bancorp.

C. Douglas Lefferson became First Vice President and Comptroller of Bancorp effective November 25, 1998. He had served as Vice President and Chief Financial Officer of First Southwestern since July 1997. Mr. Lefferson previously held the title of Vice President and Comptroller of First Southwestern since December 1995 and Assistant Vice President and Assistant Comptroller since 1993. Effective January 11, 2002, Mr. Lefferson was promoted to Senior Vice President and Chief Financial Officer of Bancorp.

PART II

Item 5. Market for the Registrant’s Common Equity and Related Shareholder
Matters.
Bancorp had 4,700 common stock shareholders of record as of February 22, 2002. Bancorp’s common equity is listed on The Nasdaq Stock Market®. The information contained on page 31 of the Notes to Consolidated Financial Statements in Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001 is incorporated herein by reference in response to this item.

Item 6. Selected Financial Data.
The information contained in Table 1 on page 2 of the Management’s Discussion and Analysis section of Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001 is incorporated herein by reference in response to this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
The information contained in the Management’s Discussion and Analysis section, (pages 1 through 31) of Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001 is incorporated herein by reference in response to this item.

Forward Looking Statements
Certain statements contained in this Annual Report on Form 10-K which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the “Act”). In addition, certain statements in future filings by Bancorp with the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with the approval of Bancorp which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to, projections of revenues; income or loss; earnings or loss per share; the payment or non-payment of dividends; capital structure and other financial items, statements of plans and objectives of Bancorp or its management or Board of Directors; and statements of future economic performance and statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “intends,” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, the strength of the local economies in which operations are conducted; the effects of and changes in policies and laws of regulatory agencies; inflation, interest rates, market and monetary fluctuations; technological changes; mergers and acquisitions; the ability to increase market share and control expenses; the effect of changes in accounting policies and practices that may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and the Securities and Exchange Commission; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; and the success of Bancorp at managing the risks involved in the foregoing.

Such forward-looking statements are meaningful only on the date when such statements are made, and Bancorp undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made to reflect the occurrence of

F-9

unanticipated events.

Item 7a. Quantitative and Qualitative Disclosure About Market Risk
The information contained on page 10 of the Management’s Discussion and Analysis section of Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001 is incorporated herein by reference in response to this item.

Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements and report of independent auditors included on pages 13 through 30 of the Consolidated Financial Statements and the Notes to Consolidated Financial Statements in Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001 are incorporated herein by reference.

The Quarterly Financial and Common Stock Data on page 31 of the Notes to Consolidated Financial Statements in Bancorp’s Annual Report to Shareholders for the year ended December 31, 2001 is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.

F-10

PART III

Item 10. Directors and Executive Officers of the Registrant.
Information called for by Item 10 is contained under “Shareholdings of Directors, Executive Officers, and Nominees for Director” on pages 2 through 4 of Bancorp’s Proxy Statement, dated March 15, 2002 with respect to the Annual Meeting of Shareholders to be held on April 23, 2002, which was filed pursuant to Regulation 14A of the Securities Exchange Act of 1934 and which is incorporated herein by reference in response to this item.

Reference is also made to “Additional Item — Executive Officers” included in Part I of this Form 10-K in partial response to Item 10.

Item 11. Executive Compensation.
The information appearing under “Meetings of the Board of Directors and Committees of the Board” on page 5, “Executive Compensation” on pages 7 through 13, and “Compensation Committee Report” on pages 14 and 15 of Bancorp’s Proxy Statement dated March 15, 2002 is incorporated herein by reference in response to this item.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information appearing under “Shareholdings of Directors, Executive Officers, and Nominees for Director” on pages 2 through 4 of Bancorp’s Proxy Statement dated March 15, 2002 is incorporated herein by reference in response to this item.

Item 13. Certain Relationships and Related Transactions.
The information appearing in Note 17 of the Notes to Consolidated Financial Statements included on page 27 of Bancorp’s Annual Report to Shareholders is incorporated herein by reference in response to this item.

F-11

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)  Documents filed as a part of the Report:

		Page*
(1)	Report of Ernst & Young LLP, Independent Auditors	30
	Consolidated Balance Sheets as of December 31, 2001 and 2000	13
	Consolidated Statements of Earnings for year ended December 31, 2001, 2000, and 1999	14
	Consolidated Statements of Cash Flows for year ended December 31, 2001, 2000, and 1999	15
	Consolidated Statements of Changes in Shareholders’ Equity for year ended December 31, 2001, 2000, and 1999	16
	Notes to Consolidated Financial Statements	17
(2)	Financial Statement Schedules:
	Schedules to the consolidated financial statements required by Regulation S-X are not required under the related instructions, or are inapplicable, and therefore have been omitted	N/A

*The page numbers indicated refer to pages of the registrant’s Annual Report to Shareholders for the fiscal year ended December 31, 2001 which are incorporated herein by reference.

F-12

(3)	Exhibits:
	Exhibit Number
	3.1	Articles of Incorporation, as amended as of April 27, 1999 and incorporated herein by reference to Form 10-Q for the quarter ended June 30, 1999. File No. 000-12379.
	3.2	Amended and Restated Regulations, as of April 22, 1997 and incorporated herein by reference to Form10-K for year ended December 31, 1997. File No. 000-12379.
	4.1	Rights Agreement between First Financial Bancorp and First National Bank of Southwestern Ohio dated as of November 23, 1993 and incorporated herein by reference to Form 10-K for year ended December 31, 1998. File No. 000-12379.
	4.2	First Amendment to Rights Agreement dated as of May 1, 1998 and incorporated herein by reference to Form 10-Q for the quarter ended March 31, 1998. File No. 000-12379.
	10.1	First Financial Bancorp. 1991 Stock Incentive Plan, dated September 24, 1991 and incorporated herein by reference to a Registration Statement on Form S-8, Registration No. 33-46819.
	10.2	Agreement between Stanley N. Pontius and First Financial Bancorp. dated August 4, 2000 and incorporated herein by reference to Form10-Q for the quarter ended September 30, 2000. File No. 000-12379.
	10.3	Agreement between Michael R. O’Dell and First Financial Bancorp. dated August 4, 2000 and incorporated herein by reference to Form10-Q for the quarter ended September 30, 2000. File No. 000-12379.
	10.4	Agreement between Mark W. Immelt and First Financial Bancorp. dated August 4, 2000 and incorporated herein by reference to Form10-Q for the quarter ended September 30, 2000. File No. 000-12379.
	10.5	Agreement between James C. Hall and First Financial Bancorp. dated June 21, 2001.
	10.6	Agreement between Brian D. Moriarty and First Financial Bancorp. dated August 4, 2000 and incorporated herein by reference to Form10-Q for the quarter ended September 30, 2000. File No. 000-12379.
	10.7	First Financial Bancorp. Dividend Reinvestment and Share Purchase Plan, dated April 24, 1997 and incorporated herein by reference to a Registration Statement on Form S-3, Registration No. 333-25745.
	10.8	First Financial Bancorp. 1999 Stock Incentive Plan for Officers and Employees, dated April 27, 1999 and incorporated herein by reference to a Registration Statement on Form S-8, Registration No. 333-86781.

F-13

10.9	First Financial Bancorp. 1999 Stock Incentive Plan for Non-Employee Directors, dated April 27, 1999 and incorporated herein by reference to a Registration Statement on Form S-8, Registration No. 333-86781.
10.10	First Financial Bancorp. Director Fee Stock Plan Amended Effective as of February 27, 2001 and incorporated herein by reference to Form10-K for the year ended December 31, 2000. File No. 000-12379
13	Registrant’s annual report to shareholders for the year ended December 31, 2001.
21	First Financial Bancorp. Subsidiaries.
23	Consent of Ernst & Young LLP, Independent Auditors.

The Company will furnish, without charge, to a security holder upon request a copy of the documents, portions of which are incorporated by reference (Annual Report to Shareholders and Proxy Statement), and will furnish any other Exhibit upon payment of reproductions costs.

(b)	Reports on Form 8-K:
	During the fourth quarter of the year ended December 31, 2001, the registrant did not file any reports on Form 8-K.

F-14

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

FIRST FINANCIAL BANCORP.

By:
/s/ Stanley N. Pontius, Director
President and Chief Executive Officer

Date       2/26/02

Pursuant to the requirements of the Securities Exchange Act of 1934, the report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Stanley N. Pontius Stanley N. Pontius, Director President and Chief Executive Officer	/s/ Michael R. O’Dell Michael R. O’Dell Senior Vice President and Secretary
Date     2/26/02	Date     2/26/02
/s/ C. Douglas Lefferson C. Douglas Lefferson, Senior Vice President and Chief Financial Officer	/s/ James C. Garland James C. Garland, Director
Date     2/26/02	Date     2/26/02
/s/ Richard L. Alderson Richard L. Alderson, Director	/s/ Donald M. Cisle Donald M. Cisle, Director
Date     2/26/02	Date     2/26/02
/s/ Martin J. Bidwell Martin J. Bidwell, Director	/s/ Steven C. Posey Steven C. Posey, Director
Date     2/26/02	Date     2/26/02

SIGNATURES (CONT’D)

F-15

/s/ Perry D. Thatcher Perry D. Thatcher, Director	/s/ Steven S. Marcum Steven S. Marcum, Director
Date     2/26/02	Date     2/26/02
/s/ Barry S. Porter Barry S. Porter, Director	/s/ Bruce S. Leep Bruce S. Leep, Director
Date     2/26/02	Date     2/26/02
/s/ Murph Knapke Murph Knapke, Director
Date     2/26/02
/s/ Corinne R. Finnerty Corinne R. Finnerty, Director
Date     2/26/02

EX-10.5 3 l93296aex10-5.txt EXHIBIT 10.5 EXHIBIT 10.5 CONFIDENTIAL - ------------ June 21, 2001 James C. Hall Executive Vice President First Financial Bancorp 300 High Street P.O. Box 476 Hamilton, OH 45012 Dear Jim: You are employed by First Financial Bancorp ("FFBC") in a key executive position. Continuity of the management of FFBC and its affiliate banks is a critical factor in the continued success of FFBC. The Board of Directors of FFBC believes it is in the best interest of FFBC to encourage the continued effort and dedication of key members of management to their assigned duties. In consideration of the mutual promises contained in this letter, FFBC shall provide to you, and you shall receive from FFBC, the benefits set forth in this letter ("Agreement"), if your employment with FFBC is terminated during the term of this Agreement. 1. PURPOSE. This Agreement establishes certain basic terms and conditions relating to your employment with FFBC, and special arrangements and dispute resolution proceedings relating to the termination of your employment for any reason other than: (i) your retirement; (ii) your becoming totally and permanently disabled under the FFBC long-term disability plan or policy; or (iii) your death. This Agreement supersedes all prior agreements with FFBC and any of its affiliate banks or any predecessor businesses, except the Confidentiality Agreement previously entered, between you and FFBC, and the special severance benefits provided under this Agreement are to be provided instead of any other severance arrangements offered by FFBC or any of its affiliate banks. Notwithstanding the foregoing, neither your termination of employment nor anything James C. Hall June 21, 2001 Page 2 contained in this Agreement shall have any adverse effect upon your rights under any tax-qualified "pension benefit plan," as such term is defined in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"); or under any "welfare benefit plan" as defined in ERISA, including by way of illustration and not limitation, any medical surgical or hospitalization benefit coverage or long-term disability benefit coverage; or under any non-qualified deferred compensation arrangement, including by way of illustration and not limitation, any stock incentive plan or non-qualified pension plan; or under the FFBC Performance Incentive Plan for any completed plan year. 2. EMPLOYMENT. FFBC agrees that, during the term of this Agreement, you will be employed with FFBC, and/or any other direct or indirect subsidiary or affiliate of FFBC to which you may be transferred, in your present position or in a position that is comparable to your present position in compensation, responsibility and stature and for which you are suited by education and background and that: (a) you are, and will continue to be, eligible to participate in any employee benefit plan of FFBC in accordance with its terms; and (b) you will be entitled to the same treatment under any generally applicable employment policy or practice as any other member of Executive Management Group whose position in the organization is comparable to yours. Those plans, policies and practices that generally apply to other members of the Executive Management Group will be referred to in this Agreement as your "Employment Benefits." Your Employment Benefits may be modified from time to time after the date hereof without violation of this Agreement if the changes apply generally to other members of the Executive Management Group. 3. TERM OF AGREEMENT. This Agreement shall become effective on the date of this Agreement ("Commencement Date") and shall continue in effect through the earlier of (i) the fifth anniversary of the Commencement Date; (ii) the date of your retirement, death or total and permanent disability; or (iii) the completion of full payment of all benefits promised hereunder. Absent your death, total and permanent disability or retirement, this Agreement shall be renewed annually from and after the fifth anniversary of the Commencement Date unless written notice to the contrary is given by you or by FFBC at least six (6) months prior to the expiration of the term, including any extension thereof. James C. Hall June 21, 2001 Page 3 4. TERMINATION OF EMPLOYMENT. Your employment may be terminated in accordance with any of the following paragraphs, but only upon one (1) month's advance written notice (which period shall be referred to in this Agreement as the "Notice Period"): (a) INVOLUNTARY TERMINATION. FFBC may terminate your employment without cause. In such an event, you shall continue to receive your full salary and Employment Benefits during the Notice Period. The expiration of the Notice Period shall be your "Date of Termination." Upon your Date of Termination, you shall be entitled to those benefits provided under Section 5, provided you give FFBC the release and covenant not to sue described in Section 5. (b) INVOLUNTARY TERMINATION FOR CAUSE. FFBC may terminate your employment for "Cause" with written notice setting forth the Cause for termination. "Cause" means a willful engaging in gross misconduct materially and demonstrably injurious to FFBC. "Willful" means an act or omission in bad faith and without reasonable belief that such act or omission was in, or not opposed to, the best interests of FFBC. The expiration of the Notice Period is your "Date of Termination for Cause." Upon your Date of Termination for Cause, you shall only be entitled to those benefits provided under Section 6. (c) VOLUNTARY TERMINATION. You may voluntarily terminate your employment. In such an event, you shall continue to receive your full salary and Employment Benefits during the Notice period provided you satisfactorily perform your duties during the Notice Period unless relieved of those duties by FFBC. The expiration of the Notice Period is your "Voluntary Date of Termination." Upon your Voluntary Date of Termination, you shall only be entitled to those benefits provided under Section 6. (d) VOLUNTARY TERMINATION FOR GOOD REASON. You may terminate your employment by notice setting forth a Good Reason for termination if the notice is delivered to FFBC within thirty (30) days following the occurrence of any "Good Reason." "Good Reason" means a (i) change in the duties of your position, or the transfer to a new position, which is not comparable to your present position in compensation, responsibility or status in violation of Section 2; (ii) substantial alteration in the nature or status of your responsibilities in violation of Section 2; (iii) reduction in your base salary; (iv) refusal by FFBC, or its successor, to renew the term of this Agreement for any reason, prior to your reaching your normal retirement date under the FFBC Pension Benefit Plan; or (v) changes in your Employment Benefits in violation of Section 2. If you give notice of termination for Good James C. Hall June 21, 2001 Page 4 Reason, you shall continue to receive your full base salary and Employment Benefits during the Notice Period as in effect prior to the event that is the Good Reason for termination, subject to the right of FFBC to make any changes to your Employment Benefits permitted in accordance with Section 2. The expiration of the Notice Period is your "Date of Termination." Upon your Date of Termination, you shall be entitled to those benefits provided under Section 5, provided you give FFBC the written release and covenant not to sue described in Section 5. 5. SPECIAL SEVERANCE BENEFITS. If your employment with FFBC is involuntarily terminated in accordance with Section 4(a) or you voluntarily terminate your employment for Good Reason in accordance with Section 4(d) and you provide FFBC with a separate, written release and covenant not to sue (on a form provided by and satisfactory to FFBC) which releases FFBC from all claims arising from your employment and termination of your employment, and you do not revoke this release and covenant not to sue, then you shall receive the following benefits, less any applicable withholding required for federal, state or local taxes: (a) your base salary shall be continued in effect for a period of twenty-four (24) months from your Date of Termination (hereinafter called your "Severance Pay Period"); (b) if, prior to your Date of Termination, you have participated in the FFBC Performance Incentive Plan for a complete calendar year, you will receive an incentive compensation payment within thirty (30) days of your Date of Termination in one lump-sum in an amount equal to 2.0 times the percentage of the incentive payment made or required to be made for the calendar year pursuant to the Performance Incentive Plan immediately preceding the calendar year in which your Date of Termination occurs; (c) if your Date of Termination is within twelve (12) months after a Change in Control, you will receive a payment within thirty (30) days of your Date of Termination in one lump-sum in an amount equal to the total of the following: (i) With respect to any shares of Stock subject to an Option granted to you as of the time of the Change in Control under the First Financial Bancorp 1991 Stock Incentive Plan (the "Incentive Plan") that you cannot exercise as a result of your termination of employment, the difference between the fair market value of such Stock, determined as of your Date of Termination, and the Option Price. James C. Hall June 21, 2001 Page 5 (ii) With respect to any Restricted Stock granted to you under the Incentive Plan as of the time of the Change in Control which you forfeit as a result of your termination of employment, the fair market value of such Restricted Stock, determined as of your Date of Termination and as if all restrictions had been removed. (iii) For purposes of this Section 5, "Stock," "Options," "Option Price," "Restricted Stock" and "Committee" will have the meaning given those terms in the Incentive Plan, and your right to exercise Options or to receive Restricted Stock without forfeiture will be determined after any adjustments made by the Committee under Sections 8.8 and 11.1 of the Incentive Plan, and after any amendments made to the Incentive Plan in connection with the Change in Control. (iv) For purposes of this Section 5, "Change in Control" will have the following meaning: (a) a plan has been approved by the shareholders of FFBC and consummated for FFBC to be merged or consolidated with another corporation and as a result of such merger or consolidation less than 75% of the outstanding voting securities of the surviving or resulting corporation will be owned in the aggregate by the former shareholders of FFBC as the same shall have existed immediately prior to such merger or consolidation; (b) an agreement for the sale by FFBC of substantially all of its assets to another corporation which is not a wholly owned subsidiary has been approved by the shareholders (or the Board of Directors or appropriate officers if shareholder approval is not required) and consummated; (c) "beneficial ownership" as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") of twenty percent (20%) or more of the total voting capital stock of FFBC then issued and outstanding has been acquired by any person or "group" as defined in Section 13(d)(3) of the Exchange Act; or (d) individuals who were members of the Board of FFBC immediately prior to a meeting of the shareholders of FFBC involving a contest for the election of directors do not constitute a majority of the Board immediately following such election, unless the election of such new directors was recommended to the shareholders by the management of FFBC. The Board of FFBC has final authority to determine the exact date on which a Change in Control has occurred under the foregoing definitions. (d) your Employment Benefits shall be continued during your Severance Pay Period, subject to the right of FFBC to make any changes to your Employment Benefits permitted in accordance with Section 2; provided, however, that you shall not: James C. Hall June 21, 2001 Page 6 (i) accumulate vacation pay for periods after your Date of Termination; (ii) first qualify for long-term disability benefits or sickness and accident plan benefits by reason of an illness, accident or disability occurring, or a sickness or illness first manifesting itself, after your Date of Termination; (iii) be eligible to continue to make contributions to any Internal Revenue Code ss. 401(k) plan maintained by FFBC or qualify for a share of any employer contribution made to any tax-qualified defined contribution plan; (iv) be eligible to accumulate service for pension plan purposes; or (v) retain possession of any motor vehicle provided to you by FFBC. (e) you shall qualify for full COBRA health benefit continuation coverage upon the expiration of your Severance Pay Period; (f) you shall be entitled to full executive outplacement assistance with an agency selected by FFBC with the fee paid by FFBC in an amount not to exceed five percent (5%) of your annual base salary; (g) with respect to the Endorsement Method Split Dollar Plan Agreement (the "Split Dollar Agreement") to which you are a party (and solely for purposes of the Split Dollar Agreement), the duration of your Severance Pay Period shall be considered as if it were active employment for purposes of determining whether you were eligible to receive a retirement benefit under the early retirement provisions of First Financial Bancorp Employees' Pension Plan, as provided in Section VI(B) of the Split Dollar Agreement; and (h) if your Date of Termination is within twelve (12) months after a Change in Control, you will receive a payment (the "Split Dollar Payment") within ninety (90) days of your Date of Termination in one lump-sum equal to the present value of the death benefit you would have received under the Split Dollar Agreement, determined as if you had terminated on your Date of Termination, were then eligible to receive a retirement benefit under the early retirement provisions of First Financial Bancorp Employees' Pension Plan (whether or not this is actually the case), and died at age 75 when the Split Dollar Agreement was still in effect. For purposes of this Section 5, present value will be determined using an annual discount rate of 7%. Notwithstanding the prior two sentences, if you elect to receive an assignment of the policy under Section X of the Split Dollar Agreement, the Split Dollar Payment shall be applied to the cash payment to FFBC required under Section X of the Split Dollar Agreement, and any portion of James C. Hall June 21, 2001 Page 7 the Split Dollar Payment in excess of the amount required under Section X shall be paid to you. The provisions of this Paragraph (g) will apply whether or not your Split Dollar Agreement is terminated before you receive the Split Dollar Payment. (i) Notwithstanding any other provision of this Agreement, if the receipt of any payment under Section 5 of this Agreement in combination with any other payments to you from FFBC or its affiliates that are parachute payments (as defined in Section 280G of the Internal Revenue Code), shall, in the opinion of independent tax counsel of recognized standing selected by FFBC, cause you to be liable for the payment of any excise tax pursuant to Section 280G and Section 4999 of the Internal Revenue Code, then FFBC will pay to you an additional amount equal to the amount of such excise tax and the additional federal, state, and local income taxes for which you will be liable as a result of this additional payment. Such payment will be made within 60 days of the date your employment terminates. The release and covenant not to sue which you agree to provide prior to the receipt of special severance benefits under this Section 5 of this Agreement shall comply with the requirements of the Older Workers Benefit Protection Act and applicable state and federal laws and regulations. If you do not provide FFBC with such a written release and covenant not to sue, any claims concerning this Agreement or otherwise arising from your employment with FFBC, or its affiliate banks, shall be subject to final and binding arbitration as described in Section 7. 6. BENEFITS UPON VOLUNTARY TERMINATION OR TERMINATION FOR CAUSE. Upon your Date of Termination for Cause in accordance with Section 4(b) or your Voluntary Date of Termination in accordance with Section 4(c), all special severance benefits under this Agreement will be void. In such an event, you shall be eligible for any benefits provided in accordance with the plans and practices of FFBC that are applicable to employees generally. 7. ARBITRATION. Any dispute under this Agreement, and any claims of wrongful or discriminatory termination based on any state or federal statute, tort, public policy, contract or promissory estoppel theory, including any dispute as to the cause or reason for termination, shall be submitted to final and binding arbitration, subject to the National Rules for the Resolution of Employment Disputes of the American Arbitration James C. Hall June 21, 2001 Page 8 Association, effective June 1, 1997, as amended from time to time, except as hereinafter provided: (a) FFBC shall pay the arbitrator's fee and a court reporter's attendance fee; (b) Each party shall bear the cost of its own attorney's fees. However, if you prevail in a challenge to FFBC's determination as to cause for your termination or if you prevail on any claim that you were discriminated against in violation of any federal law or statute, you shall be reimbursed by FFBC for the filing fee and any reasonable costs or expenses incurred in such a challenge, including reasonable attorney's fees; (c) The arbitration hearing shall be held in Hamilton, Ohio, unless the parties mutually agree to another location; (d) Each party shall exchange documents to be utilized as exhibits in the arbitration hearing and each party shall be limited to two (2) pre-hearing depositions of two (2) hours each, unless the arbitrator orders additional discovery; (e) The arbitrator shall be appointed in accordance with Rule 12 of the above-referenced Rules of the American Arbitration Association as amended from time to time, except that if, for any reason, an arbitrator cannot be selected by the process described in Rule 12, subparts (i) through (iii), the American Arbitration Association shall submit the names of seven (7) additional arbitrators from its Roster and the parties shall select the arbitrator by alternately striking names with the party requesting arbitration first striking; and (f) Either party shall be entitled to an injunction or other appropriate equitable relief to enforce the arbitration provisions of this Agreement and FFBC shall be entitled to an injunction to prevent any breach, pending arbitration, of the Confidentiality Agreement described below in paragraph 8 or the Covenant Not to Compete described below in paragraph 10. It is the intention of the parties to avoid litigation in any court of all claims concerning this Agreement, or otherwise arising from your employment with FFBC, or its affiliate bank, and that all such claims will be subject to this arbitration agreement. Neither party shall commence or pursue any litigation on any claim that is or was the subject of arbitration under this Agreement. Each party agrees that this agreement to arbitrate and the arbitration award are enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. ss. I, et seq. ("FAA"). If the FAA is held not to apply for any reason and the law of the state in which you are employed recognizes the enforceability of this Agreement and the arbitration award, then this Agreement and the James C. Hall June 21, 2001 Page 9 arbitration award are enforceable under the laws of the state in which you are employed. Both parties consent that judgment upon the arbitration award may be entered in any federal or state court that has jurisdiction. The acceptance of any benefit under this Agreement shall be deemed ratification of this agreement to arbitrate claims. In the event you breach this Agreement by filing a lawsuit, at the time your lawsuit is filed, you will return any Special Severance Benefits paid to you and be subject to injunctive relief enforcing this Agreement. 8. CONFIDENTIALITY. You will not disclose to any person or use for the benefit of yourself or any other person any confidential or proprietary information of FFBC without the prior written consent of the Chief Executive Officer of FFBC. Upon your termination of employment, you will return to FFBC all written or electronically stored memoranda, notes, plans, customer lists, records, reports or other documents of any kind or description (including all copies in any form whatsoever) relating to the business of FFBC and fully comply with any separate confidentiality agreement to which you and FFBC are parties. 9. CONFLICTS OF INTEREST. You agree for so long as you are employed by FFBC to avoid dealings and situations that would create the potential for a conflict of interest with FFBC. In this regard, you agree to comply with the FFBC policy regarding conflicts of interest and all applicable state or federal regulations concerning conflicts of interest applicable to commercial bank or savings bank officers. 10. COVENANT NOT TO COMPETE. During the term of your employment, and for a period of six (6) months following the termination of your employment for any reason other than as set forth in Section 4(b), you agree not to be employed by, serve as officer or director of, consultant to or advisor to any business that engages either directly or indirectly in commercial banking, savings banking or mortgage lending in the geographic area of Ohio, Indiana, Michigan or Kentucky or which is reasonably likely to engage in such businesses in the same geographic area during the six (6) month period following your termination of employment. 11. NOTICE. James C. Hall June 21, 2001 Page 10 Notices required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered or mailed by United States certified mail, return receipt requested, postage prepaid, in a properly addressed envelope. Notices to FFBC shall be addressed to the Chief Executive Officer. 12. MODIFICATION; WAIVER; SUCCESSORS. No provision of this Agreement may be waived, modified or discharged except pursuant to a written instrument signed by you and the Chief Executive Officer of FFBC. This Agreement is binding upon any successor to all or substantially all of the business or assets of FFBC. 13. VALIDITY; COUNTERPARTS. This Agreement shall be governed by and construed under the law of the State of Ohio. The validity or unenforceability of any provision hereof shall not affect the validity or enforceability of any other provision hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. This Agreement supersedes the Agreement dated January 27, 1998 and September 12, 2000. Sincerely yours, FIRST FINANCIAL BANCORP By:___________________________ ACCEPTED AND AGREED TO THIS ____ DAY OF JUNE, 2001 - ---------------------------------- James C. Hall James C. Hall June 21, 2001 Page 11 EX-13 4 l93296aex13.txt EXHIBIT 13 Exhibit 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS FIRST FINANCIAL BANCORP The following discussion and analysis is presented to facilitate the understanding of the financial position and results of operations of First Financial Bancorp. (Bancorp). It identifies trends and material changes that occurred during the reporting periods and should be read in conjunction with the consolidated financial statements and accompanying notes. Bancorp is a financial holding company headquartered in Hamilton, Ohio. As of December 31, 2001, Bancorp owned thirteen subsidiaries located in western Ohio, Indiana, northern Kentucky, and southern Michigan. These subsidiaries include ten commercial banks, one savings bank, a service corporation, and an insurance agency. On January 25, 2001, Bancorp announced that its board of directors had approved a multi-year plan (Project Renaissance) to focus on regionalization and market expansions designed to increase long-term shareholder value. This multi-phased regionalization strategy will consolidate Bancorp's current banking affiliates into four regional financial institutions. The first of Bancorp's new regional affiliates was formed in November of 2001 when four of the holding company's financial institutions in southeastern Indiana (Peoples Bank and Trust, Sunman; Farmers State Bank, Liberty; Union Bank & Trust, North Vernon; and Vevay Deposit Bank, Vevay) were merged under the new name, Heritage Community Bank. The new $350 million southeastern Indiana entity encompasses 15 offices, serving 38,000 customers in 10 counties. Bancorp plans to merge its three north central Indiana and two northern Ohio affiliates (Indiana Lawrence Bank, North Manchester, Indiana; Citizens First State Bank, Hartford City, Indiana; Fidelity Federal Savings Bank, Marion, Indiana; Community First Bank & Trust, Celina, Ohio; and Clyde Savings Bank, Clyde, Ohio) under the name, Community First Bank & Trust. Management's initial intent in Project Renaissance was to form each region by simultaneously converting the computer systems and merging the banks involved. This strategy worked for the formation of our first regional bank, Heritage Community Bank. However, for the Community First region, the regulatory approval timelines for the merger did not align with the system conversion timelines. Therefore, the Community First system conversion will be completed separately in the second quarter of 2002, and the merger of the banks will occur in either late-2002 or mid-2003. Bancorp's emphasis on the Greater Cincinnati market will be sharpened through the merger of First National Bank of Southwestern Ohio, Hamilton, Ohio and Hebron Deposit Bank, Hebron, Kentucky. Designed to serve northwestern Indiana and southern Michigan, the fourth phase of the project will be the merger of Sand Ridge Bank, Highland, Indiana; Bright National Bank, Flora, Indiana; and National Bank of Hastings, Hastings, Michigan. Bancorp plans to disclose additional details concerning each of the regionalization phases as appropriate. On October 4, 2001, Bancorp's Ohio City Insurance Agency began operating under a new name, Flagstone Insurance and Financial Services. On May 23, 2001, Bancorp announced plans to discontinue its finance company, Community First Finance. During its five-year existence, the finance company grew to $14 million in net loans. Even so, the venture proved to be very labor-intensive and did not meet net earnings expectations. As Community First Finance's outstanding loan receivables are reduced through payoffs and routine monthly consumer payments, Bancorp plans to redeploy the funds into alternatives with higher total returns. On February 27, 2001, the board of directors approved a 5% stock dividend, issued to shareholders of record as of March 9, 2001, and distributed April 2, 2001. All per share amounts have been restated for all periods presented. Bancorp repurchased 276,000 shares of its common stock during 2001 under a previously approved program to satisfy restricted stock awards and stock options. Under an additional previously approved and ongoing program for general corporate purposes, Bancorp repurchased 1,571,500 shares during 2001. The major components of Bancorp's operating results for the past five years are summarized in Table 1 and discussed in greater detail on subsequent pages. For a thorough understanding of Bancorp's financial results and conditions, this discussion should be read in conjunction with the statistical data and consolidated financial statements on Pages 12 through 31. RECENT MERGERS AND ACQUISITIONS On December 31, 2001, Bancorp completed its purchase of certain assets and assumption of certain liabilities of a division of Blue River Bancshares, Inc. operating under the name First Community Bank of Fort Wayne, Indiana. This division has assets of approximately $30 million with two branch locations in Fort Wayne which are now operating as part of Bancorp's Community First Bank & Trust affiliate. OVERVIEW OF OPERATIONS Bancorp's net earnings decreased 25.6% to $43,309,000 in 2001, compared to net earnings of $58,222,000 in 2000. Bancorp's diluted earnings per share decreased 23.5% to $0.91, from $1.19 in 2000. Core net earnings decreased 20.6% to $46,481,000 versus core net earnings of $58,508,000 in 2000. Core net earnings excludes one-time expenses associated with Project Renaissance, Bancorp's regionalization and expansion plan, as well as 2000 costs associated with the merger of two Bancorp affiliates, First National Bank of Southwestern Ohio and Home Federal Bank, a Federal Savings Bank. Core diluted net earnings per share decreased 18.3% to $0.98 in 2001, compared to $1.20 in 2000. Bancorp's earnings for 2001 were impacted by a dramatic drop in interest rates and a slowing economy, in addition to its anticipated regionalization and expansion plan expenses. Net interest income for 2001 decreased 2.93%. Higher-than-normal nonperforming assets and loan charge-offs, coupled with the building of the loan loss reserve to 1.63% of loans, required a significant increase in the provision for loan loss expense. A 12.1% increase in noninterest income and continued expense control contributed favorably to Bancorp's 2001 results. Bancorp's diluted earnings per share on a "cash basis," which excludes the effect of amortization of goodwill and core deposits (tax effected when applicable), were $0.95 for 2001, compared to $1.24 in 2000. Bancorp's net earnings during 2000 were $58,222,000 or $1.19 per share on a diluted basis, representing a 15.7% increase from 1999 net earnings and a 16.7% increase from 1999 earnings per share on a diluted basis. Core net earnings in 2000 were $58,508,000 or $1.20 per share on a diluted basis, representing a 6.19% increase over the comparable 1999 diluted earnings per share of $1.13. Core net earnings excludes 2000 costs associated with the merger of the First Southwestern and Home Federal affiliates, as well as 1999 merger and restructuring costs associated with the acquisitions of Sand Ridge Bank and Hebron Deposit Bank and the consolidation of some operational functions. FIRST FINANCIAL BANCORP 1 2001 ANNUAL REPORT

TABLE 1 - FINANCIAL SUMMARY 2001 2000 1999 1998 1997 (Dollars in thousands, except per share data) SUMMARY OF OPERATIONS Interest income $ 289,745 $ 313,303 $ 281,018 $ 261,076 $ 230,823 Tax equivalent adjustment 4,405 4,899 5,246 4,862 4,927 ---------- ---------- ---------- ---------- ---------- Interest income - tax equivalent 294,150 318,202 286,264 265,938 235,750 Interest expense 126,780 145,424 117,194 110,434 96,576 ---------- ---------- ---------- ---------- ---------- NET INTEREST INCOME - TAX EQUIVALENT $ 167,370 $ 172,778 $ 169,070 $ 155,504 $ 139,174 ========== ========== ========== ========== ========== Interest income $ 289,745 $ 313,303 $ 281,018 $ 261,076 $ 230,823 Interest expense 126,780 145,424 117,194 110,434 96,576 ---------- ---------- ---------- ---------- ---------- Net interest income 162,965 167,879 163,824 150,642 134,247 Provision for loan losses 26,813 11,300 9,232 8,247 6,656 Noninterest income 54,242 48,401 43,766 41,106 32,465 Noninterest expenses 124,954 118,018 121,735 107,845 91,229 ---------- ---------- ---------- ---------- ---------- Income before income taxes 65,440 86,962 76,623 75,656 68,827 Income tax expense 22,131 28,740 26,300 24,684 21,995 ---------- ---------- ---------- ---------- ---------- NET EARNINGS $ 43,309 $ 58,222 $ 50,323(2) $ 50,972 $ 46,832 ========== ========== ========== ========== ========== Tax equivalent basis was calculated using a 35.0% tax rate in all years presented PER SHARE DATA(1) NET EARNINGS - BASIC $ 0.91 $ 1.19 $ 1.02 $ 1.03 $ 0.95 ========== ========== ========== ========== ========== NET EARNINGS - DILUTED $ 0.91 $ 1.19 $ 1.02 $ 1.03 $ 0.94 ========== ========== ========== ========== ========== Cash dividends declared First Financial Bancorp $ 0.60 $ 0.57 $ 0.54 $ 0.50 $ 0.45 Sand Ridge Financial Corporation(3) N/A N/A $ 4.75 $ 18.00 $ 17.00 Hebron Bancorp, Inc.(4) N/A N/A $ 1.50 $ 5.50 $ 5.00 Average common shares outstanding - basic (in thousands) 47,428 48,776 49,191 49,333 49,365 Average common shares outstanding - diluted (in thousands) 47,479 48,862 49,335 49,531 49,515 SELECTED YEAR-END BALANCES Total assets $3,854,794 $3,932,512 $3,940,693 $3,538,869 $3,189,663 Earning assets 3,505,791 3,604,916 3,572,755 3,253,574 2,911,760 Investment securities held-to-maturity 20,890 24,800 31,765 37,782 62,511 Investment securities available-for-sale 595,600 564,762 490,126 550,394 503,936 Loans, net of unearned income 2,872,249 3,008,066 3,036,376 2,654,146 2,322,953 Deposits 3,085,093 3,151,428 2,991,213 2,872,067 2,692,688 Noninterest-bearing demand deposits 448,330 419,878 408,712 392,999 370,960 Interest-bearing demand deposits 346,039 306,356 314,735 307,752 338,968 Savings deposits 782,640 739,376 778,405 758,808 655,719 Time deposits 1,508,084 1,685,818 1,489,361 1,412,508 1,327,041 Long-term borrowings 260,345 205,216 161,799 120,777 46,570 Shareholders' equity 384,543 395,132 372,539 358,265 336,256 RATIOS BASED ON AVERAGE BALANCES Loans to deposits 93.71% 100.76% 98.28% 89.07% 89.04% Net charge-offs to loans 0.71% 0.37% 0.20% 0.24% 0.18% Shareholders' equity to Total assets 10.26% 9.62% 9.93% 10.46% 11.04% Deposits 12.72% 12.45% 12.61% 12.64% 13.29% Return on assets 1.12% 1.48% 1.37% 1.53% 1.61% Return on equity 10.94% 15.34% 13.75% 14.59% 14.63% Net interest margin (tax equivalent basis) 4.67% 4.72% 4.94% 5.02% 5.13%

(1) First Financial Bancorp's per share data has been restated for all stock dividends, stock splits, and material pooling-of-interests mergers through 2001. (2) 1999 net earnings includes $6,930,000 ($5,454,000 after tax) in merger and restructuring charges. (3) Sand Ridge Financial Corporation was the parent company of Sand Ridge Bank and was merged out of existence on June 1, 1999. (4) Hebron Bancorp, Inc. was the parent company of Hebron Deposit Bank and was merged out of existence on June 1, 1999. FIRST FINANCIAL BANCORP 2 2001 ANNUAL REPORT Bancorp's diluted earnings per share on a "cash basis," which excludes the effect of amortization of goodwill and core deposits (tax effected when applicable), were $1.24 for 2000 compared to $1.18 in 1999. Bancorp's return on equity for 2001 was 10.9%, which compares to 15.3% and 13.8% for 2000 and 1999, respectively. Bancorp's return on assets for 2001 was 1.12%. This compares with return on assets of 1.48% and 1.37% for 2000 and 1999, respectively. Excluding Project Renaissance expenses in 2001, Bancorp's return on equity was 11.7% and its return on assets was 1.20%. Excluding the merger and restructuring charges, Bancorp's return on equity for 1999 was 15.2% and its return on assets was 1.51%. NET INTEREST INCOME Net interest income, Bancorp's principal source of earnings, is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. Bancorp's net interest income for the years 1997 through 2001 is shown in Table 1. For analytical purposes, a section showing interest income on a tax equivalent basis is also presented in Table 1. The tax equivalent adjustment recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35.0% tax rate for all years presented. The amount of net interest income is determined by the volume and mix of earning assets, the rates earned on such earning assets, and the volume, mix, and rates paid for the deposits and borrowed money that support the earning assets. Table 2 describes the extent to which changes in interest rates and changes in volume of earning assets and interest-bearing liabilities have affected Bancorp's net interest income during the years indicated. The combined effect of changes in volume and rate has been allocated proportionately to the change due to volume and the change due to rate. Table 2 should be read in conjunction with the Statistical Information shown on Page 12. Tax equivalent interest income was $294,150,000 in 2001, a decrease of $24,052,000 or 7.56% from 2000. The decrease in interest income was largely the result of eleven downward movements in interest rates initiated by the Federal Reserve during 2001, as the prime lending rate dropped from 9.50% to 4.75% and impacted on Bancorp's variable rate loans. Interest income was also adversely impacted as average loan balances decreased $155,788,000 primarily due to a $120,979,000 reduction in real estate loans. While residential real estate loan demand remained high due to refinancing activity into lower fixed-rate loans, Bancorp's strategy, given a lower point in the interest rate cycle, was to sell a majority of these mortgage loans while retaining the servicing and customer relationships. Total interest expense was $126,780,000 in 2001, a decrease of $18,644,000 from 2000. The interest expense was primarily impacted by a decrease in the rate paid on interest-bearing liabilities. The average rate paid for deposits and borrowings decreased from 4.65% during 2000 to 4.18% during 2001. Tax equivalent net interest income, the difference between tax equivalent total interest income and total interest expense, decreased $5,408,000 or 3.13% during 2001 as a result of the factors discussed above. However, most of the decline in net interest income occurred in the first six months of 2001, as net interest income stabilized in the last two quarters. The interest rate spread and the net interest margin are two ratios frequently used to measure differences in net interest income. The interest rate spread (the average rate on earning assets minus the average rate on interest-bearing liabilities) was 4.03% for 2001 and 4.05% for 2000. The net interest margin (net interest income on a tax equivalent basis divided by average earning assets) decreased five basis points, from 4.72% in 2000 to 4.67% in 2001. Throughout 2001, Bancorp's balance sheet was asset-sensitive. An asset-sensitive position suggests that a declining rate environment will negatively influence net interest income as earning assets will reprice downward more quickly than interest-bearing liabilities. Given the dramatic drop in rates in 2001, Bancorp did well to maintain the margin, which continues to rank high relative to its peers.

TABLE 2 - VOLUME/RATE ANALYSIS - TAX EQUIVALENT BASIS (1) 2001 change from 2000 due to 2000 change from 1999 due to VOLUME RATE TOTAL VOLUME RATE TOTAL (Dollars in thousands) INTEREST INCOME Loans $(13,701) $(10,228) $(23,929) $ 19,369 $ 8,722 $ 28,091 Investment securities (2) Taxable 2,229 (2,985) (756) 1,740 2,850 4,590 Tax-exempt (1,000) (191) (1,191) (917) (129) (1,046) -------- -------- -------- -------- -------- -------- Total investment securities interest (2) 1,229 (3,176) (1,947) 823 2,721 3,544 Interest-bearing deposits with other banks 195 (301) (106) 275 96 371 Federal funds sold and securities purchased under agreements to resell 2,075 (145) 1,930 (174) 106 (68) -------- -------- -------- -------- -------- -------- TOTAL (10,202) (13,850) (24,052) 20,293 11,645 31,938 INTEREST EXPENSE Interest-bearing demand deposits 552 (1,084) (532) (289) 1,066 777 Savings deposits (12) (3,597) (3,609) (736) 893 157 Time deposits 2,443 (4,704) (2,261) 8,860 9,406 18,266 Short-term borrowings (11,110) (4,814) (15,924) 3,590 2,984 6,574 Long-term borrowings 4,299 (617) 3,682 1,812 644 2,456 -------- -------- -------- -------- -------- -------- TOTAL (3,828) (14,816) (18,644) 13,237 14,993 28,230 -------- -------- -------- -------- -------- -------- NET INTEREST INCOME $ (6,374) $ 966 $ (5,408) $ 7,056 $ (3,348) $ 3,708 ======== ======== ======== ======== ======== ========

(1) Tax equivalent basis was calculated using a 35.0% tax rate. (2) Includes both investment securities held-to-maturity and investment securities available-for-sale. FIRST FINANCIAL BANCORP 3 2001 ANNUAL REPORT Nonaccruing loans were included in the daily average loan balances used in determining the yields in Table 2. Interest foregone on nonaccruing loans is disclosed in Note 9 of the Notes to Consolidated Financial Statements and is not considered to have a material effect on the reasonableness of these presentations. In addition, the amount of loan fees included in the interest income computation for 2001, 2000, and 1999 was $7,541,000, $6,622,000, and $6,889,000, respectively. NONINTEREST INCOME AND NONINTEREST EXPENSES A listing of noninterest income and noninterest expenses for 2001, 2000, and 1999 is reported in Table 3. The mergers that occurred during 1999 were accounted for using the pooling-of-interests method of accounting, and the consolidated financial statements for prior years were restated to include account balances and results of operations for the companies acquired. There were no acquisitions that required restatement in 2001 or 2000. NONINTEREST INCOME 2001 vs. 2000. Excluding securities gains, 2001 noninterest income increased $5,578,000 or 11.5% over 2000. For the same period, service charges on deposits increased 8.31%, fueled by growth in core deposits and re-pricing of certain service fees. Trust revenues increased 3.79% due to a revised pricing structure and new business development. Decreased market values of the underlying securities held in trust limited the increase in trust revenues. Other noninterest income was up 22.7% as a result of increased insurance agency revenues, gains on the sales of mortgage loans, sales of third-party mutual funds, and increased credit insurance sales. 2000 vs. 1999. Total noninterest income, exclusive of securities gains or losses, increased $4,646,000 or 10.6% during 2000. When compared with the prior year, Bancorp's 2000 noninterest income was impacted by a less favorable environment for gains on sale of loans, which were down $1,975,000. Noninterest income excluding such gains was up 15.1%. One of the largest contributing factors to the overall increase in noninterest income was service charges on deposit accounts with an increase of 13.0%, resulting from a continued focus on growth in Bancorp's deposit base and improvements in this fee income area. One indication of Bancorp's emphasis on deposits was the appointment of a chief deposit officer at each affiliate in 2000. Bancorp's trust revenues increased 6.11% or $820,000 over 1999. Bancorp had targeted an increase of over 10%; however, trust revenues are largely dependent on the market values of the underlying securities held in trust. For stocks in general, the year was difficult with the S&P 500 falling by 10.1% and the Nasdaq(R) falling by 39.3%. These lower market values were the primary reason for lower than anticipated trust revenues. In 2000, the "other" category of noninterest income increased 12.2%. Included in this category are a gain of approximately $400,000 associated with the dissolution of a partnership originally established in 1974 to conduct specialized leasing arrangements, a gain of approximately $100,000 due to reduced investment in an ATM network, and increased key executive life insurance income. It should be noted that the dissolution of the leasing partnership will have no effect on future earnings per share. NONINTEREST EXPENSES 2001 vs. 2000. Bancorp's strong control over operating costs is reflected by its 2001 core expenses that remained relatively flat over 2000 as Bancorp continues to realize savings associated with the 2000 in-market consolidation of two affiliates, First National Bank of Southwestern Ohio and Home Federal Bank. Adjusting for merger and restructuring expenses in 2000 and Project Renaissance in 2001, noninterest expenses increased approximately $2,495,000 or 2.11%.

TABLE 3 - NONINTEREST INCOME AND NONINTEREST EXPENSES 2001 2000 1999 % CHANGE % CHANGE % CHANGE INCREASE INCREASE INCREASE TOTAL (DECREASE) TOTAL (DECREASE) TOTAL (DECREASE) (Dollars in thousands) NONINTEREST INCOME Service charges on deposit accounts $ 20,348 8.3% $ 18,786 13.0% $ 16,629 14.3% Trust revenues 14,769 3.8% 14,230 6.1% 13,410 10.4% Other 18,823 22.7% 15,346 12.2% 13,677 (2.7%) ----------- ----------- ----------- Subtotal 53,940 11.5% 48,362 10.6% 43,716 7.3% Investment securities gains 302 N/M 39 N/M 50 N/M ----------- ----------- ----------- TOTAL $ 54,242 12.1% $ 48,401 10.6% $ 43,766 4.7% =========== ===== =========== ===== =========== ==== NONINTEREST EXPENSES Salaries and employee benefits $ 65,061 2.3% $ 63,606 3.2% $ 61,614 7.3% Net occupancy 7,475 1.0% 7,402 5.5% 7,019 7.8% Furniture and equipment 6,332 (0.7%) 6,374 1.9% 6,256 5.5% Data processing 7,254 (13.9%) 8,427 11.7% 7,545 1.3% Deposit insurance 602 11.1% 542 (1.6%) 551 16.2% State taxes 1,913 (21.3%) 2,432 20.1% 2,025 11.0% Amortization of intangibles 2,650 (18.9%) 3,268 (11.1%) 3,674 (8.5%) Restructuring charge 0 N/M (353) N/M 6,930 N/M Other 33,667 27.9% 26,320 0.8% 26,121 3.7% ----------- ----- ----------- ----- ----------- ---- TOTAL $ 124,954 5.9% $ 118,018 (3.1%) $ 121,735 11.8% =========== ===== =========== ===== =========== ====

N/M = Not meaningful FIRST FINANCIAL BANCORP 4 2001 ANNUAL REPORT Total Project Renaissance expenses in 2001 were $4,880,000 related to salaries and employee benefits, equipment disposals, and early termination of certain data processing agreements. The majority of the Project Renaissance expenses were recorded in the "other" category resulting in the 27.9% increase in the category over 2000. Of the $4,880,000 recognized in 2001, $3,867,000 was recorded in the fourth quarter of 2001. The efficiency ratio (noninterest expenses as a percentage of noninterest income, excluding securities transactions, plus tax equivalent net interest income) reflects how much, on average, an institution expends to generate each dollar of revenue. Bancorp's efficiency ratio, exclusive of Project Renaissance expenses and merger and restructuring charges, was 54.3%, 53.0%, and 53.7% for 2001, 2000, and 1999, respectively 2000 vs. 1999. Noninterest expense decreased by $3,858,000 in 2000 as compared to 1999. Excluding expenses related to the 2000 in-market merger of two affiliates and expenses associated with the merger and restructuring charge in 1999, noninterest expense increased $2,633,000 or a modest 2.32%. Excluding the merger and restructuring charge of $6,930,000 from 1999, the $353,000 reduction of the merger and restructuring charge liability in 2000, and the $792,000 of in-market affiliate merger expenses in 2000, provides a more accurate indicator of changes in core expenses. Salaries and employee benefits increased by only 3.23% over 1999. Less-than-anticipated health care costs and reduced incentive compensation contributed to holding this increase to less than 5%. In 2000, approximately $360,000 was reclassified from "other" to data processing. Adjusting for this reclassification produces an increase in the data processing expense of approximately 6%. Bancorp's amortization of intangibles decreased 11.1% from 1999 as a result of the expiration of the amortization of various intangible assets. INCOME TAXES Bancorp's tax expense in 2001 totaled $22,131,000 compared to $28,740,000 in 2000 and $26,300,000 in 1999, resulting in effective tax rates of 33.8%, 33.0%, and 34.3% in 2001, 2000, and 1999, respectively. The 2001 effective tax rate increased slightly, primarily as a result of less tax- exempt interest income. The decrease in 2000's effective tax rate was primarily due to an increase in tax-exempt life insurance income associated with an ongoing employee benefit plan. Further analysis of income taxes is presented in Note 11 of the Notes to Consolidated Financial Statements. LOANS Total loans, net of unearned income, declined $135,817,000 or 4.52% during 2001, and average loan balances were down 5.07%. A slowing economy in the last half of 2001 impacted loan demand. Lower loan balances were also a result of Bancorp's plan to hold fewer real estate loans. While residential real estate loan demand remained high due to refinancing activity into lower fixed-rate loans, Bancorp's strategy, given a lower point in the interest rate cycle, was to sell a majority of these mortgage loans while retaining the servicing and customer relationships. Bancorp's loans cover a broad range of borrowers characterizing the western Ohio, southern Michigan, northern Kentucky, and Indiana markets. There were no loan concentrations of multiple borrowers in similar activities at December 31, 2001, which exceeded 10.0% of total loans. Bancorp's subsidiaries consist of community banks dedicated to meeting the financial needs of individuals and businesses living and operating in the communities they serve. Bancorp's loan portfolio is therefore primarily composed of residential and commercial real estate mortgage loans, commercial loans, and installment loans. At December 31, 2001, real estate mortgage loans composed 46.8% of Bancorp's total loan portfolio and installment loans composed another 20.5% of the total loan portfolio. Commercial loans equaled 28.0% of the total portfolio; and real estate construction, credit card lending, and lease financing made up the remaining 4.70% of the portfolio. In 2001, Bancorp continued to adjust its mix of loans slightly by targeting growth in commercial loans and reducing the level of mortgage loans. End-of-period commercial loans increased $17,247,000 or 2.19% from 2000 to 2001. Real estate mortgage loans decreased $92,104,000 or 6.40% for the same period. Real estate mortgage loans are generally considered to be the safest loan investments because of the real estate securing the loans. Installment loans include unsecured loans, second mortgage loans, secured lines of credit, secured and unsecured home improvement loans, automobile loans, student loans, and loans secured by savings, stocks, or life insurance. Bancorp subsidiaries offer a wide variety of commercial loans, including small business loans, agricultural loans, equipment loans, and lines of credit. Subject to Bancorp guidelines and policy, credit underwriting and approval occur within the subsidiary originating the loan. Bancorp has established individual affiliate house lending limits to handle the majority of customer requests in a timely manner at each subsidiary. Loan applications for principal amounts greater than a designated amount, which varies by subsidiary, require Bancorp approval. Any plans to purchase or sell a participation in a loan also require Bancorp approval.

TABLE 4 - LOAN PORTFOLIO DECEMBER 31, 2001 2000 1999 1998 1997 (Dollars in thousands) Commercial $ 804,683 $ 787,436 $ 769,454 $ 689,524 $ 554,728 Real estate - construction 75,785 97,571 111,458 74,205 65,468 Real estate - mortgage 1,346,235 1,438,339 1,467,591 1,306,065 1,140,628 Installment 588,549 618,489 623,091 537,156 516,368 Credit card 22,846 24,182 22,408 21,306 20,055 Lease financing 36,139 46,068 46,508 29,212 27,260 ---------- ---------- ---------- ---------- ---------- TOTAL $2,874,237 $3,012,085 $3,040,510 $2,657,468 $2,324,507 ========== ========== ========== ========== ==========

FIRST FINANCIAL BANCORP 5 2001 ANNUAL REPORT TABLE 5 - LOAN MATURITY/RATE SENSITIVITY

DECEMBER 31, 2001 Maturity AFTER ONE WITHIN BUT WITHIN AFTER ONE YEAR FIVE YEARS FIVE YEARS TOTAL (Dollars in thousands) Commercial $455,315 $178,145 $171,223 $804,683 Real estate - construction 67,819 6,624 1,342 75,785 -------- -------- -------- -------- TOTAL $523,134 $184,769 $172,565 $880,468 ======== ======== ======== ======== Sensitivity to changes in interest rates PREDETERMINED VARIABLE RATE RATE (Dollars in thousands) Due after one year but within five years $ 74,273 $110,496 Due after five years 59,295 113,270 -------- -------- TOTAL $133,568 $223,766 ======== ========

Bancorp subsidiaries receive requests to renew maturing loans as a normal part of business. Such requests are especially common with real estate loans that are scheduled to mature before being fully amortized and with commercial loans. The requests are reviewed by the subsidiary's loan committee or by designated loan personnel, as appropriate, and may be approved, approved with modifications, or denied. Required modifications may include, among other items, a reduction in the loan balance, a change in the interest rate, an increase in collateral, or the initiation of monthly principal payments. Table 5 indicates the contractual maturity of commercial loans and real estate construction loans outstanding at December 31, 2001. Loans due after one year are classified according to their sensitivity to changes in interest rates. ASSET QUALITY Bancorp's subsidiaries record a provision for loan losses (provision) in the Consolidated Statements of Earnings to provide for expected credit losses. Actual losses on loans and leases are charged against the allowance for loan losses (allowance), which is a reserve accumulated on the Consolidated Balance Sheets through the provision. The recorded values of the loans and leases actually removed from the Consolidated Balance Sheets are referred to as charge-offs and, after netting out recoveries on previously charged-off assets, become net charge-offs. Bancorp's policy is to charge-off loans when, in management's opinion, collection of principal is in doubt. All loans charged-off are subject to continuous review and concerted efforts are made to maximize recovery. Management records the provision in amounts sufficient to result in an allowance that will cover risks believed to be inherent in the loan portfolio of each subsidiary. Management's evaluation in establishing the provision includes such factors as historical loss and recovery experience, estimated future loss for loans, known deterioration in loans, periodic external loan evaluations, prevailing economic conditions that might have an impact on the portfolio, and ratios of delinquent and nonaccrual loans. The evaluation is inherently subjective as it requires material estimates, including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The evaluation of these factors is completed by a group of senior officers from the financial and lending areas. A slowing economy in the last half of 2001 negatively impacted asset quality for much of the financial industry including Bancorp. Total nonperforming assets, as shown in Table 6, increased 51.2% from $18,686,000 at December 31, TABLE 6 - NONPERFORMING ASSETS

December 31, 2001 2000 1999 1998 1997 (Dollars in thousands) Nonaccrual loans $24,628 $17,346 $11,283 $ 7,481 $ 7,845 Restructured loans 1,291 265 2,244 691 2,447 Other real estate owned (OREO) 2,338 1,075 1,707 221 1,150 ------- ------- ------- ------- ------- TOTAL NONPERFORMING ASSETS $28,257 $18,686 $15,234 $ 8,393 $11,442 ======= ======= ======= ======= ======= Nonperforming assets as a percent of total loans plus OREO 0.98% 0.62% 0.50% 0.32% 0.49% Accruing loans past due 90 days or more $ 4,728 $ 2,414 $ 2,777 $ 2,923 $ 2,392

FIRST FINANCIAL BANCORP 6 2001 ANNUAL REPORT TABLE 7 - SUMMARY OF ALLOWANCE FOR LOAN LOSSES AND SELECTED STATISTICS

2001 2000 1999 1998 1997 (Dollars in thousands) Transactions in the allowances for loan losses: Balance at January 1 $39,349 $39,340 $34,800 $31,660 $25,803 Loans charged off Commercial 13,573 6,439 4,120 4,022 2,053 Real estate - construction 5 32 0 0 28 Real estate - mortgage 2,096 1,098 325 352 257 Installment and other consumer financing 7,450 5,881 4,484 3,720 3,044 Lease financing 508 194 432 293 57 ------- ------- ------- ------- ------- Total loans charged-off 23,632 13,644 9,361 8,387 5,439 Recoveries of loans previously charged-off Commercial 766 620 2,340 1,541 684 Real estate - construction 0 0 0 0 0 Real estate - mortgage 549 191 79 99 142 Installment and other consumer financing 1,440 1,474 1,114 800 786 Lease financing 37 68 36 34 15 ------- ------- ------- ------- ------- Total recoveries 2,792 2,353 3,569 2,474 1,627 ------- ------- ------- ------- ------- Net charge-offs 20,840 11,291 5,792 5,913 3,812 Allowance acquired through mergers 1,462 0 0 806 3,013 Provision for discontinued product line 0 0 1,100 0 0 Provision for loan losses 26,813 11,300 9,232 8,247 6,656 ------- ------- ------- ------- ------- BALANCE AT DECEMBER 31 $46,784 $39,349 $39,340 $34,800 $31,660 ======= ======= ======= ======= ======= Ratios Net charge-offs as a percent of: Average loans outstanding 0.71% 0.37% 0.20% 0.24% 0.18% Provision 77.72% 99.92% 62.74% 71.70% 57.27% Allowance 44.55% 28.69% 14.72% 16.99% 12.04% Allowance as a percent of: year-end loans, net of unearned income 1.63% 1.31% 1.30% 1.31% 1.36%

TABLE 8 - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

DECEMBER 31, 2001 2000 1999 (Dollars in thousands) PERCENT OF PERCENT OF PERCENT OF LOANS TO LOANS TO LOANS TO Balance at end of ALLOWANCE TOTAL LOANS ALLOWANCE TOTAL LOANS ALLOWANCE TOTAL LOANS period applicable to: --------- ----------- ---------- ----------- --------- ----------- Commercial $ 17,313 28% $ 11,061 26% $ 8,221 25% Real estate - construction 445 3% 376 3% 470 4% Real estate - mortgage 10,710 47% 8,853 48% 8,798 48% Installment and credit card 11,311 21% 11,399 21% 10,978 21% Lease financing 913 1% 756 2% 477 2% Unallocated 6,092 N/A 6,904 N/A 10,396 N/A -------- ---- --------- ---- --------- ---- TOTAL $ 46,784 100% $ 39,349 100% $ 39,340 100% ======== ==== ========= ==== ========= ====

1998 1997 (Dollars in thousands) PERCENT OF PERCENT OF LOANS TO LOANS TO Balance at end of ALLOWANCE TOTAL LOANS ALLOWANCE TOTAL LOANS period applicable to: --------- ----------- --------- ----------- Commercial $ 9,909 26% $ 8,202 24% Real estate - construction 910 3% 246 3% Real estate - mortgage 5,395 49% 5,645 49% Installment and credit card 9,750 21% 8,323 23% Lease financing 630 1% 483 1% Unallocated 8,206 N/A 8,761 N/A ---------- ---- --------- ---- TOTAL $ 34,800 100% $ 31,660 100% ========== ==== ========= ====

FIRST FINANCIAL BANCORP 7 2001 ANNUAL REPORT 2000, to $28,257,000 at year-end 2001. Net charge-offs increased to 0.71% from 0.37% of total average loans as shown in Table 7. During 2001, Bancorp increased its provision for loan losses 137% to $26,813,000 from $11,300,000 in 2000. Even with the issues previously discussed, Bancorp finished 2001 with a nonperforming assets to ending loans ratio of 0.98%, which is in line with Bancorp's peers. The allowance at December 31, 2001, was $46,784,000 or 1.63% of loans, net of unearned income, which compares to $39,349,000 or 1.31% of loans, net of unearned income, at December 31, 2000. The level of nonaccrual and restructured loans and leases is an important element in assessing asset quality. Loans are classified as nonaccrual when, in the opinion of management, collection of interest is doubtful. Loans are classified as restructured when management, to protect its investment, grants concessions to the debtor that it would not otherwise consider. Another element associated with asset quality is Other Real Estate Owned (OREO). OREO primarily represents properties acquired by Bancorp's subsidiaries through loan defaults by customers. See Table 6 for a summary of Bancorp's nonaccrual and restructured loans and OREO properties. In comparing December 31, 2001, with December 31, 2000, nonaccrual loans increased $7,282,000, restructured loans increased $1,026,000, other real estate owned increased $1,263,000, and accruing loans past due 90 days or more increased $2,314,000. The increase in nonperforming assets is associated with the effects of a slowing economy and does not consist of a concentration in any particular industry. In the fourth quarter of 2001, Bancorp classified one agricultural credit of approximately $6,900,000 primarily secured by real estate as nonperforming. Overall, it is management's belief that the allowance for loan losses is adequate to absorb estimated probable credit losses. Nonaccrual and restructured loans and leases and OREO are discussed or summarized in Notes 1 and 9 of the Notes to Consolidated Financial Statements. INVESTMENT SECURITIES Bancorp's investment securities increased $26,928,000 or 4.57% during 2001 to a balance of $616,490,000. Bancorp follows a conservative investment policy, investing primarily for liquidity management purposes and interest rate risk management. Securities issued by U.S. government agencies and corporations, primarily the Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA), Student Loan Marketing Association (SLMA), and Federal Farm Credit Bank represented 16.0% of the investment portfolio at December 31, 2001. No structured notes were included in the U.S. government agencies and corporations securities category at December 31, 2001. All U.S. government agencies and corporations securities were classified as available-for-sale at December 31, 2001, and are available for liquidity management purposes. Due to the government guarantees, either expressed or implied, U.S. government agency and corporation obligations are considered to have low credit risk and high liquidity. Investments in mortgage-backed securities (MBSs), including collateralized mortgage obligations (CMOs), composed 53.5% of the investment portfolio at December 31, 2001. MBSs represent participations in pools of mortgage loans, the principal and interest payments of which are passed to the security investors. MBSs are subject to prepayment risk, especially during periods of decreasing interest rates. Prepayments of the underlying mortgage loans may shorten the lives of the securities, thereby affecting yields to maturity and market values. Bancorp invests primarily in MBSs issued by U.S. government agencies and corporations, such as FHLMC, FNMA, and the Government National Mortgage Association (GNMA). Such securities, because of government agency guarantees, are considered to have low credit risk and high liquidity. Accordingly, about 99.0% of Bancorp's MBSs are classified as available-for-sale. CMOs totaled $71,503,000 at December 31, 2001, all of which were classified as available-for-sale. All of the CMOs held by Bancorp are rated AAA TABLE 9 - INVESTMENT SECURITIES

DECEMBER 31, 2001 Maturing AFTER ONE BUT AFTER FIVE BUT WITHIN ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS AFTER TEN YEARS AMOUNT YIELD (1) AMOUNT YIELD (1) AMOUNT YIELD(1) AMOUNT YIELD(1) (Dollars in thousands) HELD-TO-MATURITY Mortgage-backed securities(2) $ 9 7.93% $ 510 6.46% $ 1,690 9.05% $ 1,142 8.09% Obligations of state and other political subdivisions 2,075 9.45% 11,103 8.75% 3,358 9.01% 1,003 8.14% --------- --------- ---------- ---------- Total $ 2,084 9.44% $ 11,613 8.65% $ 5,048 9.02% $ 2,145 8.11% ========= ===== ========= ===== ========== ===== ========= ===== AVAILABLE-FOR-SALE U.S. Treasury securities $ 102 4.92% Securities of other U.S. government agencies and corporations 30,522 5.41% $ 55,819 4.92% $ 11,750 6.64% $ 408 4.07% Mortgage-backed securities(2) 3,950 6.55% 13,216 6.35% 36,501 4.81% 272,650 6.13% Obligations of state and other political subdivisions 5,187 7.68% 25,240 8.05% 30,796 8.01% 67,904 7.66% Other securities 1,503 2.97% 273 7.29% 216 6.35% 39,563 6.24% --------- --------- ---------- ---------- Total $ 41,264 5.71% $ 94,548 5.96% $ 79,263 6.33% $ 380,525 6.41% ========= ===== ========= ===== ========== ===== ========== =====

(1) Tax equivalent basis was calculated using a marginal federal income tax rate of 35.0%. (2) 30.4% of the mortgage-backed securities maturing after five years are variable rate. FIRST FINANCIAL BANCORP 8 2001 ANNUAL REPORT by Standard & Poor's Corporation or similar rating agencies. Bancorp does not own any interest-only securities, principal-only securities, accrual bonds, or inverse floaters. Securities of state and other political subdivisions composed 23.8% of Bancorp's investment portfolio at December 31, 2001. The securities are diversified as to states and issuing authorities within states, thereby decreasing portfolio risk. About 88.0% of such investments at December 31, 2001, were classified as available-for-sale. The remaining 6.70% of Bancorp's investment portfolio at December 31, 2001, termed "other securities," was primarily composed of stock ownership in the Indianapolis and Cincinnati District Federal Home Loan Banks, the Federal Reserve Bank, and in taxable obligations of state and other political subdivisions. Table 9 sets forth the maturities of investment securities held-to-maturity and investment securities available-for-sale as of December 31, 2001, and the average yields of such securities calculated on the basis of the cost and effective yields weighted for the scheduled maturity of each security. Tax equivalent adjustments, using a 35.0% rate, have been made in calculating yields on tax-exempt obligations of state and other political subdivisions. At December 31, 2001, the market value of Bancorp's held-to-maturity investment securities portfolio exceeded the carrying value by $657,000. The available-for-sale investment securities are reported at their market value of $595,600,000, as required by SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." See Note 8 of the Notes to Consolidated Financial Statements for additional information. Bancorp's federal funds sold and securities purchased under agreements to resell decreased from $4,040,000 at December 31, 2000, to $3,381,000 at December 31, 2001. Bancorp monitors this position as part of its asset/ liability management. Bancorp had not used off-balance-sheet derivative financial instruments such as futures, forward contracts, option contracts, interest rate swaps, or other financial instruments with similar characteristics as of December 31, 2001. DEPOSITS AND BORROWINGS Bancorp's subsidiaries solicit deposits by offering a wide variety of savings and transaction accounts, including checking accounts, regular savings accounts, money market deposit accounts, and time deposits of various maturities and rates. In 2000, Bancorp designated a chief deposit officer at each affiliate. While banks have traditionally had chief lending officers, the concept of a chief deposit officer is unique. The chief deposit officer at each affiliate focuses on developing strategies to attract an appropriate deposit mix, developing new deposit products, establishing deposit pricing in conjunction with the asset/liability committee, and tracking and providing feedback to senior management. Total deposits decreased $66,335,000 or 2.10% in 2001. Comparing Bancorp's totals at December 31, 2001, and 2000, interest-bearing deposits decreased $94,787,000 and noninterest-bearing demand deposits increased $28,452,000. Table 10 shows the contractual maturity of time deposits of $100,000 and over that were outstanding at December 31, 2001. These deposits represented only 8.25% of total deposits. Short-term borrowings decreased from $146,568,000 at December 31, 2000, to $93,452,000 at December 31, 2001. Long-term borrowings increased $55,129,000 from $205,216,000 at the end of 2000 to $260,345,000 at the end of 2001. The increase in long-term borrowings is associated with ongoing asset/liability management strategies which take into account the timing of maturities of all assets and liabilities among many other factors. See Note 10 of the Notes to Consolidated Financial Statements for additional information. LIQUIDITY Liquidity management is the process by which Bancorp ensures that adequate liquid funds are available for the corporation and its subsidiaries. These funds are necessary in order for Bancorp and its subsidiaries to meet financial commitments on a timely basis. These commitments include withdrawals by depositors, funding credit obligations to borrowers, paying dividends to shareholders, paying operating expenses, funding capital expenditures, and maintaining deposit reserve requirements. Liquidity is monitored and closely managed by the asset/liability committees at Bancorp's subsidiaries and by Bancorp's holding company asset/liability committee. Liquidity may be used to fund capital expenditures. Capital expenditures were $8,111,000 for 2001 and $5,461,000 for 2000. Remodeling is a planned and ongoing process for the 114 offices/facilities of Bancorp's subsidiaries. Routine capital expenditures planned for the year 2002 currently total $2,500,000. Bancorp subsidiaries' source of funding is predominantly deposits within each of their respective market areas. The deposit base is diversified among individuals, partnerships, corporations, and public entities. This diversification helps Bancorp avoid dependence on large concentrations of funds. Liquidity is derived primarily from core deposit growth, principal payments received on loans, the sale and maturation of investment securities, net cash provided by operating activities, and access to other funding sources. The most stable source of liability-funded liquidity for both the long-term and short-term is deposit growth and retention in the core deposit base. In addition, Bancorp utilizes advances from the Federal Home Loan Bank as a funding source. At December 31, 2001, total borrowings from the FHLB were $260,345,000. Bancorp's bank subsidiaries have pledged certain mortgage loans and certain investments to the FHLB. The total available remaining borrowing capacity from the FHLB at December 31, 2001, was $325,880,000. The principal source of asset-funded liquidity is investment securities classified as available-for-sale, the market values of which totaled $595,600,000 at December 31, 2001, an increase of $30,838,000 or 5.46% over 2000. Securities classified as held-to-maturity that are maturing within a short period of time can also be a source of liquidity. Securities classified as held-to-maturity and that are maturing in one year or less totaled $2,084,000 at December 31, 2001. In addition, other types of assets-such as cash and due from banks, federal funds sold and securities purchased under agreements to resell, and loans and interest-bearing deposits with other banks maturing within one year-are sources of liquidity. TABLE 10 - MATURITIES OF TIME DEPOSITS GREATER THAN OR EQUAL TO $100,000(*) DECEMBER 31, 2001 (Dollars in thousands) Maturing in 3 months or less $ 126,614 3 months to 6 months 62,483 6 months to 12 months 43,317 over 12 months 22,246 ---------- TOTAL $ 254,660 ========== (*) All time deposits greater than or equal to $100,000 were in certificates of deposit. FIRST FINANCIAL BANCORP 9 2001 ANNUAL REPORT TABLE 11 - MARKET RISK DISCLOSURE

Principal Amount Maturing In: 2002 2003 2004 2005 2006 THEREAFTER (Dollars in thousands) RATE SENSITIVE ASSETS Fixed interest rate loans $ 298,444 $ 134,213 $ 115,661 $ 89,738 $ 83,327 $ 416,700 Average interest rate 7.63% 8.78% 8.89% 8.88% 8.01% 7.78% Variable interest rate loans 481,407 109,462 73,689 63,680 58,793 947,135 Average interest rate 6.82% 7.74% 7.76% 7.97% 8.05% 7.78% Fixed interest rate securities 42,455 31,894 40,294 11,285 22,688 372,205 Average interest rate 5.38% 5.09% 4.88% 4.86% 5.70% 5.21% Variable interest rate securities 893 -- -- -- -- 94,776 Average interest rate 1.75% -- -- -- -- 4.77% Other earning assets 17,052 -- -- -- -- -- Average interest rate 1.76% -- -- -- -- -- RATE SENSITIVE LIABILITIES Noninterest-bearing checking 448,330 -- -- -- -- -- Savings and interest-bearing checking 112,868 1,015,811 -- -- -- -- Average interest rate 1.08% 1.08% -- -- -- -- Time deposits 1,140,153 236,084 102,887 12,269 13,882 2,809 Average interest rate 4.26% 4.45% 4.28% 5.72% 4.63% 2.57% Fixed interest rate borrowings 4,634 1,200 16,500 5,000 19,908 213,103 Average interest rate 4.44% 4.96% 5.73% 6.82% 5.89% 5.26% Variable interest rate borrowings 93,452 -- -- -- -- -- Average interest rate 1.58% -- -- -- -- --

FAIR VALUE TOTAL DECEMBER 31, 2001 RATE SENSITIVE ASSETS Fixed interest rate loans $1,138,083 $1,165,515 Average interest rate 8.08% Variable interest rate loans 1,734,166 1,741,066 Average interest rate 7.51% Fixed interest rate securities 520,821 521,467 Average interest rate 5.20% Variable interest rate securities 95,669 95,680 Average interest rate 4.74% Other earning assets 17,052 17,052 Average interest rate 1.76% RATE SENSITIVE LIABILITIES Noninterest-bearing checking 448,330 448,330 Savings and interest-bearing checking 1,128,679 1,128,679 Average interest rate 1.08% Time deposits 1,508,084 1,516,181 Average interest rate 4.31% Fixed interest rate borrowings 260,345 263,210 Average interest rate 5.35% Variable interest rate borrowings 93,452 93,452 Average interest rate 1.58%

Certain restrictions exist regarding the ability of Bancorp's subsidiaries to transfer funds to Bancorp (see Note 6 of the Notes to Consolidated Financial Statements). Management is not aware of any other events or regulatory requirements which, if implemented, are likely to have a material effect on Bancorp's liquidity. Bancorp has secured a $25,000,000 line of credit with another financial institution. This line provides additional liquidity for Bancorp for various corporate activities. As of December 31, 2001, the outstanding balance was $23,500,000. The outstanding balance of this line varies throughout the year depending on Bancorp's cash needs. The average outstanding balance for 2001 was $14,210,000. INTEREST RATE SENSITIVITY Table 11 details the maturities and yields of interest-bearing financial instruments at December 31, 2001, for the next five years and thereafter. Also included with each category is the fair value of those instruments. The values represent the contractual maturity of each instrument. For loan instruments without contractual maturities, such as credit card loans, management has allocated principal payments based upon historical trends of payment activity. Where there is no set maturity, as in the case of some interest-bearing liabilities, management has allocated the amounts based upon its expectation of cash flows, incorporating internal core deposit studies, and current expectations of customer behavior. For loans, securities, and liabilities with contractual maturities, the table presents principal cash flows and related weighted-average interest rates by contractual maturities. The data in Table 11 was aggregated by type of financial instrument fixed and variable rate loans, fixed and variable rate investments, other earning assets, fixed and variable rate deposits, and other fixed and variable rate interest-bearing liabilities. In November of 2001, Bancorp's board of directors approved a policy authorizing the use of certain derivative products as a tool for the management of interest rate risk. Approved derivatives include interest rate caps, floors, and swaps. These instruments will allow Bancorp to meet the needs of its customers, yet reduce the interest rate risk associated with certain transactions. Bancorp had not used interest rate swaps, interest rate caps, or interest rate floors as of December 31, 2001. Therefore, data concerning these instruments was not included in the table. The primary source of market risk for the financial instruments presented is interest rate risk. That is, the risk that an adverse change in market rates will adversely affect the market value of the instruments. Generally, the longer the maturity, the higher the interest rate risk exposure. While maturity information does not necessarily present all aspects of exposure, it may provide an indication of where risks are prevalent. All banking institutions assume interest rate risk as an integral part of normal operations. Managing and measuring interest rate risk is a dynamic, multi-faceted process that ranges from reducing the exposure of Bancorp's net interest margin to swings in interest rates, to assuring that there is sufficient capital and liquidity to support future balance sheet growth. Bancorp manages interest rate risk through the asset/liability committees of Bancorp's subsidiaries. The asset/liability committees are comprised of bank officers from various disciplines. Each subsidiary committee establishes policies and rates which lead to the prudent investment of resources, the effective management of risks associated with changing interest rates, the existence of adequate liquidity, and the earning of an adequate return on shareholders' equity. Bancorp has a holding company asset/liability committee, made up of representatives of various subsidiaries and disciplines, whose function is to develop policies and guidelines for effective asset/liability management throughout Bancorp's subsidiaries. FIRST FINANCIAL BANCORP 10 2001 ANNUAL REPORT CAPITAL Total shareholders' equity at December 31, 2001, and 2000, was $384,543,000 and $395,132,000, respectively. The decrease in shareholders' equity for 2001 was primarily the result of increased stock repurchase activity. On January 25, 2000, the board of directors authorized Bancorp to repurchase from time to time the number of common shares necessary to satisfy any restricted stock awards or stock options that are granted from time to time under the 1999 Stock Incentive Option Plan for Officers and Employees and the 1999 Stock Option Plan for Non-Employee Directors. The total number of shares that can be repurchased over the life of the ten-year plans may not exceed 7,507,500 shares. Under this program, Bancorp repurchased 276,000 shares in 2001. On October 24, 2000, the board of directors authorized an additional program to repurchase up to 5% (or approximately 2.3 million) of Bancorp's common shares outstanding. This share repurchase program is for general corporate purposes including future stock dividends. Under this program, Bancorp repurchased 1,571,500 shares in 2001. On February 27, 2001, Bancorp's board of directors declared a 5% stock dividend and a quarterly cash dividend of 15 cents per share for each post-stock-dividend share. Both the stock dividend and the quarterly cash dividend were distributed on April 2, 2001. The dividend payout ratio was 65.6%, 47.9%, and 50.8%, for 2001, 2000, and 1999, respectively. The dividend payout is continually reviewed by management and the board of directors. Bancorp has consistently maintained regulatory capital ratios at or above the "well-capitalized" standards. For further detail on capital ratios, see Note 12 of the Notes to Consolidated Financial Statements. FORWARD-LOOKING STATEMENTS Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the Act). In addition, certain statements in future filings by Bancorp with the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with the approval of Bancorp which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure and other financial items, statements of plans and objectives of Bancorp or its management or board of directors, and statements of future economic performances and statements of assumptions underlying such statements. Words such as "believes," "anticipates," "intends," and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward- looking statements include, but are not limited to, the strength of the local economies in which operations are conducted; the effects of and changes in policies and laws of regulatory agencies; inflation, interest rates, market and monetary fluctuations; technological changes; mergers and acquisitions; the ability to increase market share and control expenses; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and the Securities and Exchange Commission; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; and the success of Bancorp at managing the risks involved in the foregoing. Such forward-looking statements speak only as of the date on which such statements are made, and Bancorp undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made to reflect the occurrence of unanticipated events. FIRST FINANCIAL BANCORP 11 2001 ANNUAL REPORT STATISTICAL INFORMATION

(Unaudited) 2001 2000 1999 BALANCE INTEREST YIELD BALANCE INTEREST YIELD BALANCE Daily average balances and interest rates: (Tax equivalent basis; dollars in thousands) EARNING ASSETS Loans (1) Commercial (2) $ 792,568 $ 73,399 9.26% $ 788,668 $ 81,048 10.28% $ 734,982 Real estate (2) 1,465,334 117,352 8.01% 1,586,313 126,170 7.95% 1,475,943 Installment and other consumer 616,714 58,162 9.43% 649,606 65,199 10.04% 603,730 Lease financing (2) 41,107 3,269 7.95% 46,924 3,694 7.87% 39,144 ----------- ----------- ----------- ----------- ----------- Total loans 2,915,723 252,182 8.65% 3,071,511 276,111 8.99% 2,853,799 Investment securities(3) Taxable 441,513 27,285 6.18% 407,564 28,041 6.88% 380,520 Tax-exempt (2) 149,704 11,900 7.95% 162,257 13,091 8.07% 173,607 ----------- ----------- ----------- ----------- ----------- Total investment securities (3) 591,217 39,185 6.63% 569,821 41,132 7.22% 554,127 Interest-bearing deposits with other banks 14,972 596 3.98% 11,203 702 6.27% 6,575 Federal funds sold and securities purchased under agreements to resell 59,470 2,187 3.68% 4,157 257 6.18% 7,430 ----------- ----------- ----------- ----------- ----------- TOTAL EARNING ASSETS 3,581,382 294,150 8.21% 3,656,692 318,202 8.70% 3,421,931 NONEARNING ASSETS Allowance for loan losses (40,758) (40,360) (37,303) Cash and due from banks 133,644 141,951 131,863 Accrued interest and other assets 183,103 186,295 169,675 ----------- ----------- ----------- TOTAL ASSETS $ 3,857,371 $ 3,944,578 $ 3,686,166 =========== =========== =========== INTEREST-BEARING LIABILITIES Deposits Interest-bearing demand $ 299,461 6,065 2.03% $ 275,048 6,597 2.40% $ 288,865 Savings 766,400 15,393 2.01% 766,886 19,002 2.48% 797,396 Time 1,646,954 88,892 5.40% 1,603,214 91,153 5.69% 1,438,145 ----------- ----------- ----------- ----------- ----------- Total interest-bearing deposits 2,712,815 110,350 4.07% 2,645,148 116,752 4.41% 2,524,406 Borrowed funds Short-term borrowings 75,240 3,015 4.01% 316,537 18,939 5.98% 251,273 Long-term borrowings 243,868 13,415 5.50% 166,290 9,733 5.85% 134,691 ----------- ----------- ----------- ----------- ----------- Total borrowed funds 319,108 16,430 5.15% 482,827 28,672 5.94% 385,964 ----------- ----------- ----------- ----------- ----------- TOTAL INTEREST-BEARING LIABILITIES 3,031,923 126,780 4.18% 3,127,975 145,424 4.65% 2,910,370 NONINTEREST-BEARING LIABILITIES Noninterest-bearing demand deposits 398,464 403,219 379,276 Other liabilities 31,194 33,852 30,503 SHAREHOLDERS' EQUITY 395,790 379,532 366,017 ----------- ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,857,371 $ 3,944,578 $ 3,686,166 =========== =========== =========== NET INTEREST INCOME AND INTEREST RATE SPREAD $ 167,370 4.03% $ 172,778 4.05% =========== ===== =========== ==== NET INTEREST MARGIN 4.67% 4.72% ===== =====

STATISTICAL INFORMATION (Unaudited) 1999 INTEREST YIELD Daily average balances and interest rates: (Tax equivalent basis; dollars in thousands) EARNING ASSETS Loans (1) Commercial (2) $ 69,774 9.49% Real estate (2) 116,126 7.87% Installment and other consumer 59,324 9.83% Lease financing (2) 2,796 7.14% ----------- Total loans 248,020 8.69% Investment securities(3) Taxable 23,451 6.16% Tax-exempt (2) 14,137 8.14% ----------- Total investment securities (3) 37,588 6.78% Interest-bearing deposits with other banks 331 5.03% Federal funds sold and securities purchased under agreements to resell 325 4.37% ----------- TOTAL EARNING ASSETS 286,264 8.37% NONEARNING ASSETS Allowance for loan losses Cash and due from banks Accrued interest and other assets TOTAL ASSETS INTEREST-BEARING LIABILITIES Deposits Interest-bearing demand 5,820 2.01% Savings 18,845 2.36% Time 72,887 5.07% ----------- Total interest-bearing deposits 97,552 3.86% Borrowed funds Short-term borrowings 12,365 4.92% Long-term borrowings 7,277 5.40% ----------- Total borrowed funds 19,642 5.09% ----------- TOTAL INTEREST-BEARING LIABILITIES 117,194 4.03% NONINTEREST-BEARING LIABILITIES Noninterest-bearing demand deposits Other liabilities SHAREHOLDERS' EQUITY ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY NET INTEREST INCOME AND INTEREST RATE SPREAD $ 169,070 4.34% =========== ===== NET INTEREST MARGIN 4.94% =====

(1) Nonaccrual loans are included in average loan balances and loan fees are included in interest income. (2) Interest income on tax-exempt investments and on certain tax-exempt loans and leases has been adjusted to a taxable equivalent basis using a marginal federal income tax rate of 35.0%. (3) Includes both investment securities held-to-maturity and investment securities available-for-sale. FIRST FINANCIAL BANCORP 12 2001 ANNUAL REPORT

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2001 2000 (Dollars in thousands) ASSETS Cash and due from banks $ 211,130 $ 182,058 Interest-bearing deposits with other banks 13,671 3,248 Federal funds sold and securities purchased under agreements to resell 3,381 4,040 Investment securities held-to-maturity (market value of $21,547 at December 31, 2001; $25,433 at December 31, 2000) 20,890 24,800 Investment securities available-for-sale, at market value (cost of $586,946 at December 31, 2001; $561,502 at December 31, 2000) 595,600 564,762 Loans Commercial 804,683 787,436 Real estate - construction 75,785 97,571 Real estate - mortgage 1,346,235 1,438,339 Installment 588,549 618,489 Credit card 22,846 24,182 Lease financing 36,139 46,068 ----------- ----------- Total loans 2,874,237 3,012,085 Less Unearned income 1,988 4,019 Allowance for loan losses 46,784 39,349 ----------- ----------- Net loans 2,825,465 2,968,717 Premises and equipment 60,575 58,466 Goodwill 27,379 28,860 Other intangibles 8,842 8,878 Deferred income taxes 0 691 Accrued interest and other assets 87,861 87,992 ----------- ----------- TOTAL ASSETS $ 3,854,794 $ 3,932,512 =========== =========== LIABILITIES Deposits Noninterest-bearing $ 448,330 $ 419,878 Interest-bearing 2,636,763 2,731,550 ----------- ----------- Total deposits 3,085,093 3,151,428 Short-term borrowings Federal funds purchased and securities sold under agreements to repurchase 67,641 53,581 Federal Home Loan Bank borrowings 0 85,500 Other 25,811 7,487 ----------- ----------- Total short-term borrowings 93,452 146,568 Federal Home Loan Bank long-term borrowings 260,345 205,216 Deferred income taxes payable 1,388 0 Accrued interest and other liabilities 29,973 34,168 ----------- ----------- Total liabilities 3,470,251 3,537,380 SHAREHOLDERS' EQUITY Common stock -- no par value Authorized -- 160,000,000 shares Issued -- 48,570,346 shares in 2001 46,927,736 shares in 200 396,631 374,336 Retained earnings 18,244 36,225 Accumulated comprehensive income 5,348 1,955 Restricted stock awards (2,563) (866) Treasury stock, at cost, 1,970,411 and 940,610 shares (33,117) (16,518) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 384,543 395,132 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,854,794 $ 3,932,512 =========== ===========

See Notes to Consolidated Financial Statements. FIRST FINANCIAL BANCORP 13 2001 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF EARNINGS YEAR ENDED DECEMBER 31, 2001 2000 1999 (Dollars in thousands, except per share data) INTEREST INCOME Loans, including fees $ 251,951 $ 275,804 $ 247,733 Investment securities Taxable 27,285 28,041 23,451 Tax-exempt 7,726 8,499 9,178 ------------ ------------ ------------ Total investment securities interest 35,011 36,540 32,629 Interest-bearing deposits with other banks 596 702 331 Federal funds sold and securities purchased under agreements to resell 2,187 257 325 ------------ ------------ ------------ TOTAL INTEREST INCOME 289,745 313,303 281,018 INTEREST EXPENSE Deposits 110,350 116,752 97,552 Short-term borrowings 3,015 18,939 12,365 Long-term borrowings 13,415 9,733 7,277 ------------ ------------ ------------ TOTAL INTEREST EXPENSE 126,780 145,424 117,194 ------------ ------------ ------------ NET INTEREST INCOME 162,965 167,879 163,824 Provision for loan losses 26,813 11,300 9,232 ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 136,152 156,579 154,592 NONINTEREST INCOME Service charges on deposit accounts 20,348 18,786 16,629 Trust revenues 14,769 14,230 13,410 Gains from sales of mortgage loans 2,929 1,018 2,993 Investment securities gains 302 39 50 Other 15,894 14,328 10,684 ------------ ------------ ------------ TOTAL NONINTEREST INCOME 54,242 48,401 43,766 NONINTEREST EXPENSES Salaries and employee benefits 65,061 63,606 61,614 Net occupancy 7,475 7,402 7,019 Furniture and equipment 6,332 6,374 6,256 Data processing 7,254 8,427 7,545 Deposit insurance 602 542 551 State taxes 1,913 2,432 2,025 Amortization of intangibles 2,650 3,268 3,674 Restructuring charge 0 (353) 6,930 Other 33,667 26,320 26,121 ------------ ------------ ------------ TOTAL NONINTEREST EXPENSES 124,954 118,018 121,735 ------------ ------------ ------------ INCOME BEFORE INCOME TAXES 65,440 86,962 76,623 Income tax expense 22,131 28,740 26,300 ------------ ------------ ------------ NET EARNINGS $ 43,309 $ 58,222 $ 50,323 ============ ============ ============ NET EARNINGS PER SHARE - BASIC $ 0.91 $ 1.19 $ 1.02 ============ ============ ============ NET EARNINGS PER SHARE - DILUTED $ 0.91 $ 1.19 $ 1.02 ============ ============ ============ AVERAGE SHARES OUTSTANDING - BASIC 47,427,921 48,775,547 49,191,294 ============ ============ ============ AVERAGE SHARES OUTSTANDING - DILUTED 47,479,315 48,862,287 49,335,071 ============ ============ ============

See Notes to Consolidated Financial Statements. FIRST FINANCIAL BANCORP 14 2001 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31, 2001 2000 1999 (Dollars in thousands) OPERATING ACTIVITIES Net earnings $ 43,309 $ 58,222 $ 50,323 Adjustments to reconcile net earnings to net cash provided by operating activities Provision for loan losses 26,813 11,300 9,232 Provision for depreciation and amortization 8,797 9,707 9,196 Net amortization of premiums and accretion of discounts on investment securities 12 (528) 83 Deferred income taxes 79 2,175 2,059 Realized gains on investment securities (302) (39) (50) Originations of mortgage loans held for sale (186,571) (171,012) (226,475) Gains from sales of mortgage loans held for sale (2,929) (1,018) (2,993) Proceeds from sale of mortgage loans held for sale 187,448 171,161 227,534 Increase in cash surrender value of life insurance (1,775) (6,467) (17,168) Decrease (increase) in interest receivable 6,527 (3,031) (4,082) Decrease (increase) in prepaid expenses 530 (881) 1,276 Increase (decrease) in accrued expenses 660 (3,146) 351 (Decrease) increase in interest payable (5,536) 3,986 311 Other 318 (3,589) 2,646 --------- --------- --------- Net cash provided by operating activities 77,380 66,840 52,243 INVESTING ACTIVITIES Proceeds from sales of investment securities available-for-sale 0 0 13,520 Proceeds from calls, paydowns, and maturities of investment securities available-for-sale 219,864 58,858 159,916 Purchases of investment securities available-for-sale (245,279) (79,144) (135,915) Proceeds from calls, paydowns, and maturities of investment securities held-to-maturity 12,085 11,773 12,215 Purchases of investment securities held-to-maturity (7,910) (4,365) (1,901) Net (increase) decrease in interest-bearing deposits with other banks (10,423) 5,619 (6,269) Net decrease in federal funds sold and securities purchased under agreements to resell 659 1,581 3,033 Net decrease (increase) in loans and leases 108,922 (28,494) (393,706) Proceeds from disposal of other real estate owned 1,773 2,882 622 Recoveries from loans and leases previously charged-off 2,792 2,353 3,569 Purchases of premises and equipment (8,111) (5,461) (8,422) --------- --------- --------- Net cash provided by (used in) investing activities 74,372 (34,398) (353,338) FINANCING ACTIVITIES Net (decrease) increase in total deposits (66,335) 160,215 119,146 Net (decrease) increase in short-term borrowings (53,116) (235,550) 227,054 Proceeds from long-term borrowings 55,129 43,417 41,022 Cash dividends (28,400) (27,901) (25,570) Purchase of common stock (30,057) (16,518) 0 Proceeds from exercise of stock options 99 116 780 --------- --------- --------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (122,680) (76,221) 362,432 --------- --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 29,072 (43,779) 61,337 Cash and cash equivalents at beginning of year 182,058 225,837 164,500 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF YEAR $ 211,130 $ 182,058 $ 225,837 ========= ========= ========= SUPPLEMENTAL DISCLOSURES Interest paid $ 132,316 $ 141,438 $ 116,884 ========= ========= ========= Income taxes paid $ 24,839 $ 31,233 $ 23,080 ========= ========= ========= Recognition of deferred tax (liabilities) assets attributable to SFAS No. 115 $ (2,000) $ (5,142) $ 6,995 ========= ========= ========= Acquisition of other real estate owned through foreclosure $ 3,263 $ 2,423 $ 2,252 ========= ========= ========= Issuance of restricted stock awards $ 2,826 $ 773 $ 174 ========= ========= ========= Securitization of loans $ 0 $ 40,737 $ 0 ========= ========= =========

See Notes to Consolidated Financial Statements. FIRST FINANCIAL BANCORP 15 2001 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY COMMON COMMON ACCUMULATED RESTRICTED TREASURY STOCK STOCK RETAINED COMPREHENSIVE STOCK STOCK SHARES AMOUNT EARNINGS INCOME AWARDS SHARES (Dollars in thousands) Balances at December 31, 1998 42,657,815 $ 306,709 $ 50,160 $ 4,949 $ (408) (118,638) Net earnings 50,323 Unrealized holding losses on securities available for sale arising during the period (11,347) Total comprehensive income Cash dividends declared (Bancorp - $0.54 per share; SRFC - $4.75 per share; HBI - $1.50 per share) (25,570) Exercise of stock options, net of shares purchased 1,331 (951) 65,725 10% stock dividend 4,213,712 67,700 (69,009) 45,313 Restricted stock awards (3,751) (11) (174) 7,600 Amortization of restricted stock awards 168 ---------- ---------- ----------- ----------- ----------- ----------- Balances at December 31, 1999 46,869,107 373,447 5,904 $ (6,398) (414) 0 Net earnings 58,222 Unrealized holding losses on securities available for sale arising during the period 8,353 Total comprehensive income Cash dividends declared (Bancorp - $0.57 per share) (27,901) Purchase of common stock (940,500) Exercise of stock options, net of shares purchased 16,729 116 Restricted stock awards 41,900 773 (773) (110) Amortization of restricted stock awards 321 ---------- ---------- ----------- ----------- ----------- ----------- Balances at December 31,2000 46,927,736 374,336 36,225 1,955 (866) (940,610) Net earnings 43,309 Unrealized holding losses on securities available for sale arising during the period 3,393 Total comprehensive income Cash dividends declared (Bancorp - $0.60 per share) (28,400) Purchase of common stock (1,847,500) Exercise of stock options, net of shares purchased (105) 12,603 5% stock dividend 1,646,021 22,348 (32,890) 637,004 Restricted stock awards (3,411) 52 (2,826) 168,092 Amortization of restricted stock awards 1,129 ---------- ---------- ----------- ----------- ----------- ----------- Balances at December 31, 2001 48,570,346 $ 396,631 $ 18,244 $ 5,348 $ (2,563) (1,970,411) ========== =========== =========== =========== =========== ==========

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY TREASURY STOCK AMOUNT TOTAL Balances at December 31, 1998 $ (3,145) $ 358,265 Net earnings 50,323 Unrealized holding losses on securities available for sale arising during the period (11,347) ----------- Total comprehensive income 38,976 Cash dividends declared (Bancorp - $0.54 per share; SRFC - $4.75 per share; HBI - $1.50 per share) (25,570) Exercise of stock options, net of shares purchased 1,731 780 10% stock dividend 1,265 (44) Restricted stock awards 149 (36) Amortization of restricted stock awards 168 ----------- ----------- Balances at December 31, 1999 $ 0 $ 372,539 Net earnings 58,222 Unrealized holding losses on securities available for sale arising during the period 8,353 ----------- Total comprehensive income 66,575 Cash dividends declared (Bancorp - $0.57 per share) (27,901) Purchase of common stock (16,515) (16,515) Exercise of stock options, net of shares purchased 116 Restricted stock awards (3) (3) Amortization of restricted stock awards 321 ----------- ----------- Balances at December 31,2000 (16,518) 395,132 Net earnings 43,309 Unrealized holding losses on securities available for sale arising during the period 3,393 ----------- Total comprehensive income 46,702 Cash dividends declared (Bancorp - $0.60 per share) (28,400) Purchase of common stock (30,057) (30,057) Exercise of stock options, net of shares purchased 204 99 5% stock dividend 10,542 0 Restricted stock awards 2,712 (62) Amortization of restricted stock awards 1,129 ----------- ----------- Balances at December 31, 2001 $ (33,117) $ 384,543 =========== ===========

See Notes to Consolidated Financial Statements. FIRST FINANCIAL BANCORP 16 2001 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation - The consolidated financial statements of First Financial Bancorp. (Bancorp), a financial holding company, principally serving western Ohio, Indiana, northern Kentucky and southern Michigan, include the accounts and operations of Bancorp and its wholly owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of management's estimates. Interest on loans, securities, and other earning assets is recognized primarily on the accrual basis. Intangible assets arising from the acquisition of subsidiaries are being amortized over varying periods, none of which exceeds 25 years. Core deposit intangibles are being amortized over varying periods, none of which exceeds 10 years. Investment securities - Statement of Financial Accounting Standards (SFAS) No. 115 classifies debt and equity securities in three categories: trading, held-to-maturity, and available-for-sale. Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity when Bancorp has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are stated at aggregate fair value, with the unrealized gains and losses, net of tax, reported as a separate component of shareholders' equity. The amortized cost of debt securities classified as held-to-maturity or available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated life of the security. Such amortization is included in interest income from investments. Interest and dividends are included in interest income from investments. Realized gains and losses, and declines in value judged to be other than temporary, are included in investment securities gains (losses). The cost of securities sold is based on the specific identification method. Loans - Loan origination and commitment fees and certain direct loan origination costs are deferred, and the net amount amortized as an adjustment to the related loan's yield. The accrual of interest income is discontinued when the collection of a loan or interest, in whole or in part, is doubtful. This applies generally to all loans, including impaired loans. When interest accruals are suspended, interest income accrued in the current period is reversed and interest accrued in the prior year is charged to the allowance for loan losses. Mortgages held for sale are reported at the lower of cost or aggregate market value primarily as determined by outstanding commitments from investors. Capitalized mortgage servicing rights (MSRs) are evaluated for impairment based on the fair value of those rights, using a disaggregated approach. MSRs are amortized on an accelerated basis over the estimated period of net servicing revenue. Allowance for loan losses - The level of the allowance for loan losses (allowance) is based upon management's evaluation of the loan and lease portfolios, past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, and other pertinent factors. This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The level maintained is believed by management to be adequate to cover losses inherent in the portfolio. The allowance is increased by provisions charged to expense and decreased by charge-offs, net of recoveries of amounts previously charged-off. Lease financing - Bancorp principally uses the finance method of accounting for direct lease contracts. Under this method of accounting, a receivable is recorded for the total amount of lease payments due and estimated residual values. Lease income, represented by the excess of the total contract receivable plus estimated equipment residual value over the cost of the related equipment, is recorded over the terms of the leases at a level rate of return on the unrecovered net investment. Premises and equipment - Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed principally on the straight-line method over the estimated useful lives of the assets. Maintenance and repairs are charged to operations as incurred. Other real estate owned - Other real estate owned represents properties acquired by Bancorp's subsidiaries through loan defaults by customers. The property is recorded at the lower of cost or fair value minus estimated costs to sell at the date acquired. Subsequently, the property is valued at the lower of the amount recorded when the property was placed into other real estate owned or fair value minus estimated costs to sell based on periodic valuations performed by management. An allowance for losses on other real estate owned may be maintained for subsequent valuation adjustments on a specific property basis. Any gains or losses realized at the time of disposal are reflected in income. Income taxes - Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Bancorp and its subsidiaries file a consolidated federal income tax return. Each subsidiary provides for income taxes on a separate return basis, and remits to Bancorp amounts determined to be currently payable. Earnings per share - Basic net income per common share is computed by dividing net income applicable to common stock by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is computed by dividing net income applicable to common stock by the weighted average number of shares, nonvested stock, and dilutive common stock equivalents outstanding during the period. Common stock equivalents consist of common stock issuable under the assumed exercise of stock options granted under the Bancorp's stock plans, using the treasury stock method. Cash flow information - For purposes of the statement of cash flows, Bancorp considers cash and due from banks as cash and cash equivalents. Capital - During 2001, Bancorp issued a 5% stock dividend. All share amounts presented in the financial statements have been adjusted to reflect these transactions. Reporting comprehensive income - Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Disclosure about segments and related information - Bancorp operates as one community banking segment in contiguous geographic markets. Derivative instruments - SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," was released in June 1998, and is effective for all fiscal quarters of fiscal years beginning after January 1, 2001. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and for hedging activities. Goodwill - SFAS No. 141, "Business Combination" and No. 142, "Goodwill and Other Intangible Assets" were issued in June of 2001, and are effective for fiscal years beginning after December 15, 2001. Under the new FIRST FINANCIAL BANCORP 17 2001 ANNUAL REPORT rules, goodwill and intangible assets deemed to have indefinite lives, if any, will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. Bancorp will apply the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of 2002. Application of the nonamortization provisions of the Statement is expected to result in an increase in net income of approximately $1,172,000 ($0.02 per share) for 2002. During 2002, Bancorp will perform the first of the required impairment tests of goodwill and intangible assets with indefinite lives, if any, as of January 1, 2002. The effect of these tests on the earnings and financial position of Bancorp has not yet been determined, but is not anticipated to be material. Reclassifications - Certain reclassifications of prior years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings. NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS Bancorp's subsidiaries are required to maintain average reserve balances either in the form of vault cash or reserves held on deposit with the Federal Reserve Bank, Federal Home Loan Bank, or in pass-through reserve accounts with correspondent banks. The average amounts of these required reserve balances for 2001 and 2000 were approximately $26,221,000 and $25,181,000, respectively. NOTE 3 - BUSINESS COMBINATIONS Bancorp consummated the following business combinations in 2001 and 1999:

ACQUISITION SHARES PURCHASE BUSINESS COMBINATIONS DATE ASSETS DEPOSITS ISSUED PRICE (Dollars in thousands) Purchase transactions FIRST COMMUNITY BRANCHES DECEMBER 31, 2001 $ 31,912 $ 11,110 PAR Pooling-of-interests Sand Ridge Financial Corporation June 1, 1999 591,325 516,413 5,114,878 Hebron Bancorp, Inc. June 1, 1999 110,089 94,624 1,222,599

On December 31, 2001, Bancorp purchased certain assets and assumed certain liabilities of a division of Blue River Bancshares, Inc. operating under the name First Community Bank of Fort Wayne, Indiana (First Community). This division has two branch locations in Fort Wayne. Since consummation of the merger, these branches are operating as part of Bancorp's Community First Bank & Trust affiliate. The merger was accounted for using the purchase method of accounting; and, accordingly, the consolidated financial statements included First Community's results of operations from the date of acquisition. NOTE 4 - LEASE FINANCING Leases included in the loan portfolio at December 31 were composed as follows: 2001 2000 (Dollars in thousands) Direct financing $ 21,269 $ 30,804 Leveraged 557 734 --------- --------- Net rentals receivable 21,826 31,538 Estimated residual value of leased assets 18,494 21,317 Less unearned income 4,181 6,787 --------- --------- Investment in leases, net $ 36,139 $ 46,068 ========= ========= Direct financing lease payments receivable as of December 31, 2001, for the next five years and thereafter are as follows: DIRECT FINANCING LEASES (Dollars in thousands) 2002 $ 9,091 2003 6,528 2004 3,832 2005 1,386 2006 404 Thereafter 28 FIRST FINANCIAL BANCORP 18 2001 ANNUAL NOTE 5 - PREMISES AND EQUIPMENT Premises and equipment at December 31 were summarized as follows: 2001 2000 (Dollars in thousands) Land and land improvements $ 14,513 $ 12,360 Buildings 54,934 54,618 Furniture and fixtures 42,498 43,732 Leasehold improvements 5,624 4,242 Construction in progress 1,041 580 ---------- ---------- 118,610 115,532 Less accumulated depreciation and amortization 58,035 57,066 ---------- ---------- TOTAL $ 60,575 $ 58,466 ========== ========== NOTE 6 - RESTRICTIONS ON SUBSIDIARY DIVIDENDS, LOANS, OR ADVANCES Dividends paid by Bancorp are mainly provided by dividends from its subsidiaries. However, certain restrictions exist regarding the ability of these subsidiaries to transfer funds to Bancorp in the form of cash dividends, loans, or advances. The approval of the subsidiaries' respective primary federal regulators is required for Bancorp's subsidiaries to pay dividends in excess of regulatory limitations. As of December 31, 2001, Bancorp's subsidiaries had retained earnings of $150,234,000 of which $12,352,000 was available for distribution to Bancorp as dividends without prior regulatory approval. NOTE 7 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK In the normal course of business, Bancorp offers a variety of financial instruments with off-balance-sheet risk to its customers to aid them in meeting their requirements for liquidity and credit enhancement. These financial instruments include standby letters of credit and commitments outstanding to extend credit. Generally accepted accounting principles do not require these financial instruments to be recorded in the consolidated balance sheets, statements of earnings, shareholders' equity, or cash flows. However, a discussion of these instruments follows. Bancorp's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for standby letters of credit and commitments outstanding to extend credit is represented by the contractual amounts of those instruments. Bancorp uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Following is a discussion of these transactions. Standby letters of credit - These transactions are conditional commitments issued by Bancorp to guarantee the performance of a customer to a third party. Bancorp's portfolio of standby letters of credit consists primarily of performance assurances made on behalf of customers who have a contractual commitment to produce or deliver goods or services. The risk to Bancorp arises from its obligation to make payment in the event of the customers' contractual default. Bancorp has issued standby letters of credit aggregating $24,516,000 and $26,813,000 at December 31, 2001 and 2000, respectively. Management conducts regular reviews of these instruments on an individual customer basis, and the results are considered in assessing the adequacy of Bancorp's allowance for loan losses. Management does not anticipate any material losses as a result of these letters of credit. Loan commitments - Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Bancorp evaluates each customer's creditworthiness on an individual basis. The amount of collateral obtained, if deemed necessary by Bancorp upon extension of credit, is based on management's credit evaluation of the counterparty. The collateral held varies, but may include securities, real estate, inventory, plant, or equipment. Bancorp had commitments outstanding to extend credit totaling $477,689,000 and $484,894,000 at December 31, 2001, and 2000, respectively. Management does not anticipate any material losses as a result of these commitments. Derivatives - In November of 2001, Bancorp's board of directors approved a policy authorizing the use of certain derivative products as a tool for the management of interest rate risk. Approved derivatives include interest rate caps, floors, and swaps. These instruments will allow Bancorp to meet the needs of its customers, yet reduce the interest rate risk associated with certain transactions. Bancorp did not use off-balance-sheet derivative financial instruments (such as interest rate swaps) as defined in SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" in 2001. FIRST FINANCIAL BANCORP 19 2001 ANNUAL REPORT NOTE 8 - INVESTMENT SECURITIES The following is a summary of investment securities as of December 31, 2001:

HELD-TO-MATURITY AVAILABLE-FOR-SALE AMORTIZED UNREALIZED MARKET AMORTIZED UNREALIZED MARKET COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE (Dollars in thousands) U.S. Treasury securities $ 101 $ 1 $ 0 $ 102 Securities of U.S. government agencies and corporations 96,579 2,058 (138) 98,499 Mortgage-backed securities $ 3,351 $ 153 $ (4) $ 3,500 321,613 5,344 (640) 326,317 Obligations of state and other political subdivisions 17,539 523 (15) 18,047 127,339 2,622 (834) 129,127 Other securities 41,314 241 0 41,555 -------- -------- -------- -------- -------- -------- -------- -------- Total $ 20,890 $ 676 $ (19) $ 21,547 $586,946 $ 10,266 $ (1,612) $595,600 ======== ======== ======== ======== ======== ======== ======== ========

The following is a summary of investment securities as of December 31, 2000:

HELD-TO-MATURITY AVAILABLE-FOR-SALE AMORTIZED UNREALIZED MARKET AMORTIZED UNREALIZED MARKET COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE (Dollars in thousands) U.S. Treasury securities $ 3,497 $ 0 $ (5) $ 3,492 Securities of U.S. government agencies and corporations 143,311 1,037 (487) 143,861 Mortgage-backed securities $ 4,900 $ 100 $ (18) $ 4,982 244,895 1,844 (1,355) 245,384 Obligations of state and other political subdivisions 19,621 575 (25) 20,171 134,439 2,632 (389) 136,682 Other securities 279 1 0 280 35,360 3 (20) 35,343 -------- -------- -------- -------- -------- -------- -------- -------- Total $ 24,800 $ 676 $ (43) $ 25,433 $561,502 $ 5,516 $ (2,256) $564,762 ======== ======== ======== ======== ======== ======== ======== ========

The carrying value of investment securities as of December 31,1999, by category was as follows: U.S. Treasury $11,311,000, U.S. government agencies and corporations $118,838,000, mortgage-backed $195,307,000, obligations of state and other political subdivisions $164,584,000, and other $32,520,000. During the years ended December 31, 2001 and 2000, no available-for-sale securities were sold. During the year ended December 31, 1999, available-for-sale securities with a fair value at the date of sale of $13,482,000 were sold. The gross realized gains on such sales totaled $38,000. There were net investment gains after taxes of $188,000, $73,000, and $106,000 for the years ended December 31, 2001, 2000, and 1999, respectively. The applicable income tax effects were an expense of $114,000 for 2001 and benefits of $34,000 and $56,000 for 2000 and 1999, respectively. The carrying value of investment securities pledged to secure public deposits and for other purposes as required by law amounted to $259,904,000 at December 31, 2001. The amortized cost and market value of investment securities, including mortgage-backed securities at December 31, 2001, by contractual maturity, are shown in the table below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

HELD-TO-MATURITY AVAILABLE-FOR-SALE AMORTIZED MARKET AMORTIZED MARKET COST VALUE COST VALUE (Dollars in thousands) Due in one year or less $ 2,084 $ 2,108 $ 40,542 $ 41,264 Due after one year through five years 11,613 12,068 92,697 94,548 Due after five years through ten years 5,048 5,180 77,550 79,263 Due after ten years 2,145 2,191 376,157 380,525 -------- -------- -------- -------- TOTAL $ 20,890 $ 21,547 $586,946 $595,600 ======== ======== ======== ========

FIRST FINANCIAL BANCORP 20 2001 ANNUAL REPORT NOTE 9 - LOANS Information as to nonaccrual and restructured loans at December 31 was as follows: 2001 2000 1999 (Dollars in thousands) Principal balance Nonaccrual loans $24,628 $17,346 $11,283 Restructured loans 1,291 265 2,244 ------- ------- ------- TOTAL $25,919 $17,611 $13,527 ======= ======= ======= Interest income effect Gross amount of interest that would have been recorded at original rate $ 1,609 $ 2,560 $ 885 Interest included in income 416 1,613 286 ------- ------- ------- NET IMPACT ON INTEREST INCOME $ 1,193 $ 947 $ 599 ======= ======= ======= At December 31, 2001, there were no commitments outstanding to lend additional funds to borrowers with nonaccrual or restructured loans. The balances of other real estate acquired through loan foreclosures, in-substance foreclosures, repossessions or other workout situations, net of the related allowance, totaled $2,338,000, $1,075,000, and $1,707,000 at December 31, 2001, 2000, and 1999, respectively. Changes in the allowance for loan losses for the three years ended December 31 were as follows: 2001 2000 1999 (Dollars in thousands) Balance at beginning of year $ 39,349 $ 39,340 $ 34,800 Allowance acquired 1,462 0 0 Provision for discontinued product line 0 0 1,100 Provision for loan losses 26,813 11,300 9,232 Loans charged-off (23,632) (13,644) (9,361) Recoveries 2,792 2,353 3,569 -------- -------- -------- BALANCE AT END OF YEAR $ 46,784 $ 39,349 $ 39,340 ======== ======== ======== The allowances for loan losses related to loans that are identified for evaluation in accordance with SFAS No. 114 are based on discounted cash flows using the loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans. At December 31, 2001, 2000, and 1999, the total recorded investment in loans that are considered to be impaired under SFAS No. 114 was $2,006,000, $8,904,000, and $2,708,000, respectively. For those same periods, the recorded investment in loans for which there was a related allowance for loan losses was $801,000, $8,839,000, and $2,688,000. The related allowance for loan losses on these impaired loans was $529,000 at December 31, 2001, $2,008,000 at December 31, 2000, and $1,433,000 at December 31, 1999. At December 31, 2001 and 2000, there were $1,205,000 and $65,000, respectively, that as a result of write-downs, did not have an allowance for loan losses. The average recorded investment in impaired loans during the year ended December 31, 2001, was approximately $4,343,000 versus $5,517,000 for the year ended December 31, 2000, and $2,407,000 for the year ended December 31, 1999. For the years ended December 31, 2001, 2000, and 1999, Bancorp recognized interest income on those impaired loans of $143,000, $218,000, and $88,000, respectively. Bancorp recognizes income on impaired loans using the cash basis method. Mortgage loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The unpaid principal balances of these loans totaled $545,733,000, $560,530,000, and $394,978,000 at December 31, 2001, 2000, and 1999, respectively. Custodial escrow balances maintained in connection with these mortgage loans serviced were approximately $3,336,000, $3,313,000, and $2,344,000 at December 31, 2001, 2000, and 1999, respectively. FIRST FINANCIAL BANCORP 21 2001 ANNUAL REPORT NOTE 10 - BORROWINGS The following is a summary of short-term borrowings for the last three years:

2001 2000 1999 AMOUNT RATE AMOUNT RATE AMOUNT RATE (Dollars in thousands) At year end: Federal funds purchased and securities sold under agreements to repurchase $ 67,641 1.31% $ 53,581 5.54% $ 83,353 5.06% Federal Home Loan Bank borrowings 0 0.00% 85,500 6.30% 294,235 5.73% Other short-term borrowings 25,811 2.29% 7,487 6.08% 4,530 3.72% ---------- ------------ --------- Total $ 93,452 1.58% $ 146,568 6.01% $ 382,118 5.56% ========== ======= ============ ======= ========= ====== Average for the year: Federal funds purchased and securities sold under agreements to repurchase $ 46,974 3.29% $ 68,720 4.54% $ 70,421 4.50% Federal Home Loan Bank borrowings 12,330 6.00% 245,880 6.38% 178,959 5.09% Other short-term borrowings 15,936 4.56% 1,937 6.96% 1,893 4.78% ---------- ------------ --------- Total $ 75,240 4.01% $ 316,537 5.98% $ 251,273 4.92% ========== ======= ============ ======= ========= ====== Maximum month-end balances: Federal funds purchased and securities sold under agreements to repurchase $ 67,641 $ 115,109 $ 86,429 Federal Home Loan Bank borrowings 83,000 344,350 302,750 Other short-term borrowings 28,912 4,243 5,859

At December 31, 2001, Bancorp had a short-term revolving line of credit with a financial institution of $25,000,000. As of year end, the outstanding balance was $23,500,000. The interest rate on this line of credit is the current federal funds rate plus a spread. The line of credit has a financial requirement whereby Bancorp's affiliates must maintain a risk-based capital level of a well-capitalized institution. Also, Bancorp must maintain an allowance for loan losses which matches or exceeds its level of nonperforming loans. Bancorp was in compliance with these requirements as of December 31, 2001. Federal Home Loan Bank long-term borrowings - Long-term borrowings at December 31, 2001, consisted exclusively of Federal Home Loan Bank (FHLB) advances with rates ranging from 1.93% to 6.90%, with interest payable monthly. The long-term advances mature as follows: $4,634,000 in 2002, $1,200,000 in 2003, $16,500,000 in 2004, $5,000,000 in 2005, $19,908,000 in 2006, and $213,103,000 after 2006. Federal Home Loan Bank advances, both short-term and long-term were secured by certain residential mortgage loans, as well as certain government and agency securities, with a book value of $843,660,000 at December 31, 2001. FIRST FINANCIAL BANCORP 22 2001 ANNUAL REPORT NOTE 11 - INCOME TAXES Income tax expense consisted of the following components:

2001 2000 1999 (Dollars in thousands) Current: Federal $ 18,431 $ 24,548 $ 21,613 State 2,636 3,134 2,633 ------------ ----------- ------------ Total 21,067 27,682 24,246 Deferred expense 1,064 1,058 2,054 ------------ ----------- ------------ INCOME TAX EXPENSE $ 22,131 $ 28,740 $ 26,300 ============ =========== ============

The difference between the federal income tax rates, applied to income before income taxes, and the effective rates were due to the following:

2001 2000 1999 (Dollars in thousands) Income taxes computed at federal statutory rate of 35% $ 22,904 $ 30,431 $ 26,818 State income taxes, net of federal tax benefit 1,713 2,037 1,711 Effect of tax-exempt interest (2,073) (3,014) (2,885) Other (413) (714) 656 ----------- ------------ ------------ INCOME TAX EXPENSE $ 22,131 $ 28,740 $ 26,300 =========== ============ ============

SFAS No. 109, "Accounting for Income Taxes," requires that deferred tax assets and liabilities be carried at the enacted tax rate. The enacted tax rate was 35% for years ended December 31, 2001, 2000, and 1999. The major components of the temporary differences that give rise to deferred tax assets and liabilities at December 31, 2001 and 2000 were as follows:

2001 2000 (Dollars in thousands) Deferred tax assets Allowance for loan losses $ 14,577 $ 13,034 Mark to market adjustment 795 (712) Other real estate owned (18) (82) Postretirement benefits other than pension liability 847 866 Pension liability 230 675 Other 255 210 -------- -------- TOTAL DEFERRED TAX ASSETS 16,686 13,991 Deferred tax liabilities Tax greater than book depreciation 1,994 989 Leasing activities 7,166 5,815 Federal Home Loan Bank stock basis difference 2,287 1,095 Deferred loan fees 2,054 1,614 Purchase accounting adjustment (162) (276) Other 1,374 1,717 -------- -------- TOTAL DEFERRED TAX LIABILITIES 14,713 10,954 -------- -------- Net deferred tax asset recognized through the statement of earnings 1,973 3,037 Net deferred tax liability from valuation adjustments of investment securities available-for-sale, recognized in equity section of balance sheet (3,361) (2,346) -------- -------- TOTAL NET DEFERRED TAX (LIABILITY) ASSET $ (1,388) $ 691 ======== ========

FIRST FINANCIAL BANCORP 23 2001 ANNUAL NOTE 12 - RISK-BASED CAPITAL The Federal Reserve established risk-based capital requirements for U.S. banking organizations which have been adopted by the Office of Thrift Supervision for savings and loan associations. Risk weights are assigned to on-and off-balance-sheet items in arriving at risk-adjusted total assets. Regulatory capital is divided by risk-adjusted total assets, with the resulting ratios compared to minimum standards to determine whether a bank has adequate capital. Regulatory guidelines require a 4.00% Tier 1 capital ratio, an 8.00% total risk-based capital ratio, and a 4.00% leverage ratio. Tier 1 capital consists primarily of common shareholders' equity, net of intangibles, and total risk-based capital is Tier 1 capital plus Tier 2 supplementary capital, which is primarily the allowance for loan losses subject to certain limits. The leverage ratio is a result of dividing Tier 1 capital by average total assets less certain intangibles. While Bancorp's subsidiaries' ratios are well above regulatory requirements, management will continue to monitor the asset mix which affects these ratios due to the risk weights assigned various assets, and the allowance for the loan losses, which influences the total risk-based capital ratio. The table below illustrates the risk-based capital calculations and ratios for the last two years. December 31, 2001 2000 (Dollars in thousands) Tier 1 capital Shareholders' equity $ 384,543 $ 395,132 Less certain intangibles 32,465 34,957 Less accumulated comprehensive income 5,348 1,955 ------------ ------------- TOTAL TIER 1 CAPITAL $ 346,730 $ 358,220 ============ ============= Total risk-based capital Tier 1 capital $ 346,730 $ 358,220 Qualifying allowance for loan losses 35,111 35,945 ------------ ------------- TOTAL RISK-BASED CAPITAL $ 381,841 $ 394,165 ============ ============= RISK WEIGHTED ASSETS $ 2,797,210 $ 2,872,181 ============ ============= RISK-BASED RATIOS TIER 1 CAPITAL 12.4% 12.5% ============ ============= TOTAL RISK-BASED CAPITAL 13.7% 13.7% ============ ============= LEVERAGE 9.1% 9.2% ============ ============= NOTE 13 - EMPLOYEE BENEFIT PLANS Bancorp sponsors a non-contributory defined benefit pension plan covering substantially all employees. Plan assets are administered by the Trust Department of First National Bank of Southwestern Ohio. Plan assets primarily consist of equity and debt mutual funds, stocks, corporate bonds, and money market funds. Approximately 98.1% and 97.9% of plan assets at December 31, 2001, and 2000, respectively, were invested in collective trust funds with First Southwestern. The pension plan does not own any shares of Bancorp common stock. The following tables set forth information concerning amounts recognized in Bancorp's Consolidated Balance Sheets and Consolidated Statements of Earnings: December 31, 2001 2000 (Dollars in thousands) CHANGE IN BENEFIT OBLIGATION Benefit obligation at beginning of year $ 27,773 $ 26,536 Service cost 2,306 2,115 Interest cost 2,236 2,007 Actuarial loss 4,449 1,247 Benefits paid (3,595) (4,132) -------- -------- Benefit obligation at end of year 33,169 27,773 CHANGE IN PLAN ASSETS Fair value of plan assets at beginning of year 21,667 22,898 Actual return on plan assets 131 1,427 Employer contributions 4,773 1,474 Benefits paid (3,595) (4,132) -------- -------- Fair value of plan assets at end of year 22,976 21,667 -------- -------- Funded status (10,193) (6,106) Unrecognized transition amount (460) (731) Unrecognized prior service cost 822 1,074 Unrecognized actuarial loss 8,561 2,313 -------- -------- NET AMOUNT RECOGNIZED IN THE CONSOLIDATED BALANCE SHEETS (ACCRUED BENEFIT LIABILITY) $ (1,270) $ (3,450) ======== ======== FIRST FINANCIAL BANCORP 24 2001 ANNUAL REPORT

WEIGHTED-AVERAGE ASSUMPTIONS DECEMBER 31, 2001 2000 Discount rate 7.25% 7.50% Expected return on plan assets 9.00% 9.00% Rate of compensation increase 3.50% 3.50%

COMPONENTS OF NET PERIODIC BENEFIT COST DECEMBER 31, 2001 2000 1999 (Dollars in thousands) Service cost $ 2,306 $ 2,115 $ 1,972 Interest cost 2,236 2,007 1,941 Expected return on assets (2,051) (2,000) (2,223) Amortization of transition asset (270) (305) (305) Amortization of unrecognized prior service cost 252 252 252 Amortization of actuarial loss 120 0 0 ----------- ----------- --------- NET PERIODIC PENSION COST $ 2,593 $ 2,069 $ 1,637 =========== =========== =========

Bancorp also sponsors a defined contribution 401(k) thrift plan which covers substantially all employees. Employees may contribute up to 12.0% of their base salaries into the plan. Bancorp contributions are at the discretion of the board of directors. During 2001, 2000, and 1999, Bancorp contributed $.50 for each $1.00 an employee contributed, up to a maximum Bancorp contribution of 3.00% of the employee's base salary. All Bancorp matching contributions vest immediately. Total Bancorp contributions to the 401(k) plan were $873,000 during 2001, $937,000 during 2000, and $775,000 during 1999. NOTE 14 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS Some Bancorp subsidiaries maintain health care and, in limited instances, life insurance plans for current retired employees. Under the current policy, the health care plans are unfunded and pay medically necessary expenses incurred by retirees, after subtracting payments by Medicare or other providers and after stated deductibles have been met. Bancorp has reserved the right to change or eliminate these benefit plans. The following table sets forth the funded status and amounts recognized in Bancorp's Consolidated Balance Sheets:

2001 2000 (Dollars in thousands) Benefit obligation at beginning of year $ 1,199 $ 1,178 Interest cost 85 84 Plan participants' contributions 23 23 Actuarial loss 220 106 Benefits paid (213) (192) -------- -------- Benefit obligation at end of year 1,314 1,199 Fair value of plan assets at beginning and end of year 0 0 -------- -------- Funded status (1,314) (1,199) Unrecognized actuarial gain (883) (1,152) Unrecognized prior service cost (22) (25) -------- -------- NET POSTRETIREMENT LIABILITY RECOGNIZED IN THE BALANCE SHEETS $(2,219) $(2,376) ======== ======== Net periodic postretirement benefit cost includes the following components: Interest cost $ 85 $ 84 Amortization of unrecognized prior service cost (3) (4) Amortization of actuarial gain (94) (114) -------- -------- NET PERIODIC BENEFIT COST $ (12) $ (34) ======== ========

The discount rate used to determine the accumulated postretirement benefit obligation was 7.25% at December 31, 2001 and 7.50% at December 31, 2000. The assumed health care cost trend rates used in determining the accumulated postretirement benefit obligation are shown in the table to the right. If the health care cost trend rate assumptions were increased by 1.00%, the accumulated post- retirement benefit obligation as of December 31, 2001, would be increased by approximately $106,000. If the health care cost trend rate assumptions were decreased by 1.00%, the accumulated post- retirement benefit obligation as of December 31, 2001, would be decreased by approximately $96,000. 2001 2000 2001 6.60% 2002 10.00% 6.00% 2003 9.00% 5.50% 2004 8.00% 5.00% 2005 7.00% 5.00% 2006 6.00% 5.00% Thereafter 5.00% 5.00% FIRST FINANCIAL BANCORP 25 2001 ANNUAL REPORT NOTE 15 - EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share:

2001 2000 1999 (Dollars in thousands, except per share data) Net income--numerator for basic and diluted earnings per share - income available to common stockholders $ 43,309 $ 58,222 $ 50,323 =========== =========== =========== Denominator for basic earnings per share - weighted average shares 47,427,921 48,775,547 49,191,294 Effect of dilutive securities - employee stock options 51,394 86,739 143,778 ----------- ----------- ----------- Denominator for diluted earnings per share - adjusted weighted average shares 47,479,315 48,862,286 49,335,072 =========== =========== =========== Basic earnings per share $ 0.91 $ 1.19 $ 1.02 =========== =========== =========== Diluted earnings per share $ 0.91 $ 1.19 $ 1.02 =========== =========== ===========

NOTE 16 - STOCK OPTIONS The 1991 Stock Incentive Plan provides incentive stock options and stock awards to certain key employees and non-qualified stock options to directors of Bancorp who are not employees for up to 1,691,035 common shares of Bancorp. The options are not exercisable for at least one year from the date of grant and are thereafter exercisable for such periods (which may not exceed 10 years) as the board of directors, or a committee thereof, specifies, provided that the optionee has remained in the employment of Bancorp or its subsidiaries. The board or the committee may accelerate the exercise period for an option upon the optionee's disability, retirement, or death. All options expire at the end of the exercise period. Cancelled and expired options become available for issuance and are reflected in the available for future grant figure. On April 27, 1999, the shareholders approved the 1999 Stock Incentive Plan which provides for 7,507,500 similar options and awards. Bancorp has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), and related interpretations in accounting for its stock options because, as discussed below, the alternative fair value accounting provided for under SFAS No. 123, "Accounting for Stock-Based Compensation" requires use of option valuation models that were not developed for use in valuing stock options. Under APB 25, because the exercise price of Bancorp's employee stock options equaled the market price of the underlying stock on the date of grant, no compensation expense was recognized. Pro forma information regarding net income and earnings per share is required by SFAS No. 123 and has been determined as if Bancorp had accounted for its stock options under the fair value method of that statement. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2001, 2000, and 1999, respectively: risk-free interest rates of 4.94%, 6.52%, and 4.74%; dividend yields of 3.61%, 3.25%, and 2.35%; volatility factors of the expected market price of Bancorp's common stock of 0.220, 0.215, and 0.202; and a weighted average expected life of the options of 4.50, 3.90, and 2.83 years. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because Bancorp's stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. Bancorp's pro forma information follows: 2001 2000 1999 (Dollars in thousands, except per share data) Pro forma net earnings $ 42,392 $ 55,778 $ 49,238 ========= ========== ========= Pro forma earnings per share $ 0.89 $ 1.20 $ 1.05 ========= ========== ========= Activity in the above plan for 2001, 2000, and 1999 is summarized as follows:

2001 2000 1999 NUMBER OF OPTION NUMBER OF OPTION NUMBER OF OPTION SHARES PRICE SHARES PRICE SHARES PRICE Outstanding at beginning of year 1,403,595 779,524 554,169 Granted 284,172 $ 15.37-16.01 678,011 $ 17.75-18.75 337,824 $ 20.23-23.69 Exercised (19,719) $ 7.36-11.30 (24,877) $ 7.50-11.87 (83,282) $ 7.72-20.04 Cancelled (70,688) $ 7.36-22.57 (29,063) $ 18.44-20.05 (29,187) $ 23.69 ----------- ----------- ---------- OUTSTANDING AT END OF YEAR 1,597,360 $ 7.14-22.57 1,403,595 $ 7.50-23.69 779,524 $ 7.50-23.69 =========== =========== ========== EXERCISABLE AT END OF YEAR 1,319,594 735,637 470,863 =========== =========== ========== AVAILABLE FOR FUTURE GRANT 7,013,931 7,227,408 7,370,203 =========== =========== ========== WEIGHTED-AVERAGE FAIR VALUE OF OPTIONS GRANTED DURING THE YEAR $ 2.79 $ 3.56 $ 3.56 =========== =========== ==========

FIRST FINANCIAL BANCORP 26 2001 ANNUAL NOTE 17 - LOANS TO RELATED PARTIES Loans to directors, executive officers, principal holders of Bancorp's common stock and certain related persons totaled $37,177,000 and $37,331,000 at December 31, 2001 and 2000, respectively. Activity of these loans was as follows: 2001 2000 (Dollars in thousands) Beginning balance $ 37,331 $ 33,281 Additions 17,212 14,988 Collected 17,366 10,938 Charged-off 0 0 -------- --------- ENDING BALANCE $ 37,177 $ 37,331 ======== ========= LOANS 90 DAYS PAST DUE $ 0 $ 0 ======== ========= Related parties of Bancorp, as defined above, were customers of and had transactions with subsidiaries of Bancorp in the ordinary course of business during the periods noted above. Additional transactions may be expected in the ordinary course of business in the future. All outstanding loans, commitments, financing leases, transactions in money market instruments and deposit relationships included in such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others, and did not involve more than a normal risk of collectibility or present other unfavorable features. NOTE 18 - SHAREHOLDER RIGHTS PLAN Bancorp has a "shareholder rights plan" under which the holders of Bancorp's common stock are entitled to receive one "right" per share held. Under the plan, each "right" would be distributed only on the 20th business day after any one of the following events occurs: 1) A public announcement that a person or group has acquired 20 percent or more (an "acquiring person") of Bancorp's outstanding common shares, 2) The beginning of a tender offer or exchange offer that would result in a person or group owning 30 percent or more of the corporation's outstanding common shares, or 3) A declaration by the board of directors of a shareholder as an "adverse person." (An adverse person is a person who owns at least 10 percent of the common shares and attempts "greenmail," or is likely to cause a material adverse impact on the Bancorp - such as impairing customer relationships, harming the company's competitive position or hindering the Board's ability to effect a transaction it deems to be in the shareholders' best interest.) In the event of such a distribution, each "right" would entitle the holder to purchase, at an exercise price of $38.96, one share of common stock of the corporation. Subject to the "exchange option" described below, if a person or group acquires 30 percent or more of Bancorp's outstanding common shares or is declared an "adverse person" by the Board of Directors of the corporation, each "right" would entitle the holder to purchase, at an exercise price of $38.96, a number (to be determined under the plan) of shares of common stock of the corporation at a price equal to 50 percent of its then current market price. However, any "rights" held by an "acquiring person" or an "adverse person" could not be exercised. Additionally, each "right" holder would be entitled to receive common stock of any acquiring company worth two times the exercise price of the "right," should either of the following happen after a person becomes an "acquiring person": 1) Bancorp is acquired in a merger or other transaction - other than a merger which the independent directors determine to be in the best interest of Bancorp and its shareholders, or 2) 50 percent or more of Bancorp's assets or earning power is sold or transferred. At any time after any person becomes an "acquiring person" or an "adverse person," the plan gives Bancorp's board of directors the option (the "exchange option") to exchange all or part of the outstanding "rights" (except "rights" held by an "acquiring person" or an "adverse person") for shares of Bancorp's common stock at an exchange ratio of 0.8 shares of common stock per "right." In the event that Bancorp's board of directors adopts the "exchange option," each "right" would entitle the holder thereof to receive 0.8 shares of common stock per "right." Any partial exchange would be effected pro rata based on the number of "rights" held by each holder of "rights" included in the exchange. Bancorp may redeem "rights" for $0.01 per "right" at any time prior to the 20th business day following the date when a person acquires 20 percent of the outstanding shares. Bancorp may not redeem the "rights" when a holder has become an "adverse person." The Board's adoption of this "rights" plan has no financial effect on Bancorp, is not dilutive to Bancorp shareholders, is not taxable to the corporation or its shareholders, and will not change the way in which Bancorp common shares are traded. "Rights" are not exercisable until distributed; and all "rights" will expire at the close of business on December 6, 2003, unless earlier redeemed by Bancorp. FIRST FINANCIAL BANCORP 27 2001 ANNUAL REPORT NOTE 19 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used by Bancorp in estimating its fair value disclosures for financial instruments: Cash and short-term investments - The carrying amounts reported in the balance sheet for cash and short-term investments, such as interest-bearing deposits with other banks and federal funds sold, approximated the fair value of those instruments. Investment securities (including mortgage-backed securities) - Fair values for investment securities were based on quoted market prices, where available. If quoted market prices were not available, fair values were based on quoted market prices of comparable instruments. (Refer to Note 8 for further disclosure.) Loans - For variable-rate loans that reprice frequently with no significant change in credit risk, fair values were based on carrying values. The fair values of other loans and leases, such as commercial real estate and consumer loans were estimated by discounting the future cash flows using the current rates at which similar loans and leases would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amount of accrued interest approximated its fair value. Deposit liabilities - The fair value of demand deposits, savings accounts, and certain money market deposits was the amount payable on demand at the reporting date. The carrying amounts for variable-rate certificates of deposit approximated their fair values at the reporting date. The fair value of fixed-rate certificates of deposit was estimated using a discounted cash flow calculation which applies the interest rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest approximated its fair value. Borrowings - The carrying amounts of federal funds purchased and securities sold under agreements to repurchase and other short-term borrowings approximated their fair values. The fair value of long-term borrowings was estimated using a discounted cash flow calculation which utilizes the interest rates currently offered for borrowings of similar remaining maturities. Commitments to extend credit and standby letters of credit - Pricing of these financial instruments is based on the credit quality and relationship, fees, interest rates, probability of funding and compensating balance and other covenants or requirements. Loan commitments generally have fixed expiration dates, are variable rate and contain termination and other clauses which provide for relief from funding in the event that there is a significant deterioration in the credit quality of the customer. Many loan commitments are expected to expire without being drawn upon. The rates and terms of the commitments to extend credit and the standby letters of credit are competitive with those in Bancorp's market area. The carrying amounts are reasonable estimates of the fair value of these financial instruments. Carrying amounts which are comprised of the unamortized fee income and, where necessary, reserves for any expected credit losses from these financial instruments, are immaterial. Refer to Note 7 for additional information. Bancorp does not carry financial instruments which are held or issued for trading purposes. The estimated fair values of Bancorp's financial instruments at December 31 were as follows:

2001 2000 CARRYING FAIR CARRYING FAIR VALUE VALUE VALUE VALUE (Dollars in thousands) Financial assets Cash and short-term investments $ 228,182 $ 228,182 $ 189,346 $ 189,346 Investment securities held-to-maturity 20,890 21,547 24,800 25,433 Investment securities available-for-sale 595,600 595,600 564,762 564,762 Loans Commercial 804,683 833,614 787,436 787,326 Real estate - construction 75,785 72,721 97,571 98,182 Real estate - mortgage 1,346,235 1,355,934 1,438,339 1,431,782 Installment, net of unearned income 586,561 586,845 614,470 616,192 Credit card 22,846 22,601 24,182 24,197 Leasing 36,139 35,246 46,068 46,251 Less allowance for loan losses 46,784 39,349 ---------- ---------- ---------- ---------- Net loans 2,825,465 2,906,961 2,968,717 3,003,930 Accrued interest receivable 27,054 27,054 33,580 33,580 Financial liabilities Deposits Noninterest-bearing 448,330 448,330 419,878 419,878 Interest-bearing demand 346,039 346,039 306,356 306,356 Savings 782,640 782,640 739,376 739,376 Time 1,508,084 1,516,181 1,685,818 1,689,563 ---------- ---------- ---------- ---------- Total deposits 3,085,093 3,093,190 3,151,428 3,155,173 Short-term borrowings 93,452 93,452 146,568 146,568 Long-term borrowings 260,345 263,210 205,216 203,937 Accrued interest payable 9,275 9,275 14,811 14,811

FIRST FINANCIAL BANCORP 28 2001 ANNUAL REPORT NOTE 20 - FIRST FINANCIAL BANCORP. (PARENT COMPANY ONLY) FINANCIAL INFORMATION BALANCE SHEETS

December 31, 2001 2000 (Dollars in thousands) ASSETS Cash $ 21,159 $ 22,721 Investment securities 3,313 89 Subordinated notes from subsidiaries 7,500 7,500 Investment in subsidiaries Commercial banks 313,462 321,504 Savings banks 30,973 32,884 -------- -------- Total investment in subsidiaries 344,435 354,388 Loans Commercial 16,352 0 Real estate - mortgage 605 0 -------- -------- Total loans 16,957 0 Allowance for loan losses 3,502 0 -------- -------- Net loans 13,455 0 Bank premises & equipment 1,325 1,347 Other assets 27,592 20,555 -------- -------- TOTAL ASSETS $418,779 $406,600 ======== ======== LIABILITIES Short-term borrowings $ 23,500 $ 3,500 Dividends payable 7,004 6,915 Other liabilities 3,732 1,053 -------- -------- TOTAL LIABILITIES 34,236 11,468 SHAREHOLDERS' EQUITY 384,543 395,132 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $418,779 $406,600 ======== ========

STATEMENTS OF EARNINGS

Year Ended December 31, 2001 2000 1999 (Dollars in thousands) Income Interest income $ 313 $ 670 $ 140 Other interest income 94 Dividends from subsidiaries 75,647 58,018 38,348 -------- -------- -------- TOTAL INCOME 76,054 58,688 38,488 EXPENSES Interest expense 665 11 0 Provision for loan losses 3,752 Salaries and employee benefits 4,972 2,889 3,211 Other 4,909 1,522 5,683 -------- -------- -------- TOTAL EXPENSES 14,298 4,422 8,894 -------- -------- -------- INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED NET EARNINGS OF SUBSIDIARIES 61,756 54,266 29,594 Income tax benefit (4,186) (1,119) (1,310) -------- -------- -------- INCOME BEFORE EQUITY IN UNDISTRIBUTED NET EARNINGS OF SUBSIDIARIES 65,942 55,385 30,904 Equity in undistributed net earnings of subsidiaries (22,633) 2,837 19,419 -------- -------- -------- NET EARNINGS $ 43,309 $ 58,222 $ 50,323 ======== ======== ========

FIRST FINANCIAL BANCORP 29 2001 ANNUAL

STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31, 2001 2000 1999 (Dollars in thousands) OPERATING ACTIVITIES Net earnings $ 43,309 $ 58,222 $ 50,323 Adjustments to reconcile net earnings to net cash provided by operating activities Equity in undistributed net earnings of subsidiaries 22,633 (2,837) (19,419) Provision for loan losses 3,752 0 0 Provision for depreciation and amortization 1,228 471 60 Deferred income taxes 92 38 78 (Decrease) increase in dividends payable 89 (65) 465 Increase (decrease) in accrued expenses 2,200 (2,338) 2,251 (Increase) decrease in receivables (6,776) (2,820) (4,550) -------- -------- -------- Net cash provided by operating activities 66,527 50,671 29,208 INVESTING ACTIVITIES Subordinated notes from subsidiaries 0 0 (7,500) Capital contributions to subsidiaries (9,434) (19,397) (4,200) Purchase of investment securities (3,000) 0 0 Net increase in loans (17,207) 0 0 Purchases of premises and equipment (90) (27) (1,189) Other 0 77 84 -------- -------- -------- Net cash used in investing activities (29,731) (19,347) (12,805) FINANCING ACTIVITIES Increase in short-term borrowings 20,000 3,500 0 Cash dividends (28,400) (27,901) (25,570) Purchase of common stock (30,057) (16,518) 0 Proceeds from exercise of stock options, net of shares purchased 99 116 780 -------- -------- -------- Net cash used in financing activities (38,358) (40,803) (24,790) -------- -------- -------- DECREASE IN CASH (1,562) (9,479) (8,387) Cash at beginning of year 22,721 32,200 40,587 -------- -------- -------- CASH AT END OF YEAR $ 21,159 $ 22,721 $ 32,200 ======== ======== ========

REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS The Board of Directors and Shareholders First Financial Bancorp We have audited the accompanying consolidated balance sheets of First Financial Bancorp and subsidiaries as of December 31, 2001, and 2000, and the related consolidated statements of earnings, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of First Financial Bancorp and subsidiaries at December 31, 2001 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Cincinnati, Ohio January 17, 2002 FIRST FINANCIAL BANCORP 30 2001 ANNUAL REPORT QUARTERLY FINANCIAL AND COMMON STOCK DATA (1)

(Unaudited) THREE MONTHS ENDED MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 (Dollars in thousands, except per share data) 2001 Interest income $76,999 $74,853 $71,434 $66,459 Interest expense 36,554 34,766 30,085 25,375 ------- ------- ------- ------- Net interest income 40,445 40,087 41,349 41,084 Provision for loan losses 2,528 8,527 5,206 10,552 Noninterest income Investment securities gains 148 42 8 104 All other 12,713 13,591 12,794 14,842 Noninterest expenses 29,835 29,999 30,660 34,460 ------- ------- ------- ------- Income before income taxes 20,943 15,194 18,285 11,018 Income tax expense 6,930 5,363 6,173 3,665 ------- ------- ------- ------- NET EARNINGS $14,013 $ 9,831 $12,112 $ 7,353 ======= ======= ======= ======= Per share NET EARNINGS - BASIC $ 0.29 $ 0.21 $ 0.26 $ 0.16 ======= ======= ======= ======= NET EARNINGS - DILUTED $ 0.29 $ 0.21 $ 0.26 $ 0.16 ======= ======= ======= ======= CASH DIVIDENDS PAID $ 0.15 $ 0.15 $ 0.15 $ 0.15 ======= ======= ======= ======= Market price HIGH BID $ 16.61 $ 17.08 $ 17.23 $ 17.75 ======= ======= ======= ======= LOW BID $ 14.41 $ 14.58 $ 14.97 $ 15.23 ======= ======= ======= ======= 2000 Interest income $75,272 $78,232 $80,243 $79,556 Interest expense 33,172 35,406 38,306 38,540 ------- ------- ------- ------- Net interest income 42,100 42,826 41,937 41,016 Provision for loan losses 2,361 2,222 2,674 4,043 Noninterest income Investment securities gains 14 11 12 2 All other 10,937 11,671 12,449 13,305 Noninterest expenses 29,725 30,644 29,128 28,521 ------- ------- ------- ------- Income before income taxes 20,965 21,642 22,596 21,759 Income tax expense 7,095 7,293 7,427 6,925 ------- ------- ------- ------- NET EARNINGS $13,870 $14,349 $15,169 $14,834 ======= ======= ======= ======= Per share NET EARNINGS - BASIC $ 0.28 $ 0.29 $ 0.31 $ 0.31 ======= ======= ======= ======= NET EARNINGS - DILUTED $ 0.28 $ 0.29 $ 0.31 $ 0.31 ======= ======= ======= ======= CASH DIVIDENDS PAID $ 0.14 $ 0.14 $ 0.14 $ 0.14 ======= ======= ======= ======= Market price HIGH BID $ 18.81 $ 18.75 $ 18.46 $ 16.19 ======= ======= ======= ======= LOW BID $ 14.76 $ 15.95 $ 15.00 $ 13.39 ======= ======= ======= =======

First Financial Bancorp common stock trades on The Nasdaq Stock Market (?) under the symbol FFBC. (1) First Financial Bancorp's per share data and market price information is stated as if the 5% stock dividends declared in 2001 occurred January 1, 2000. FIRST FINANCIAL BANCORP 31 2001 ANNUAL REPORT EX-21 5 l93296aex21.txt EXHIBIT 21 EXHIBIT 21 FIRST FINANCIAL BANCORP. SUBSIDIARIES First National Bank of Southwestern Ohio, organized as a national banking association under the laws of the United States Community First Bank & Trust, incorporated in the state of Ohio Indiana Lawrence Bank, incorporated in the state of Indiana Fidelity Federal Savings Bank, organized as a federal stock savings bank under the laws of the United States Citizens First State Bank, incorporated in the state of Indiana The Clyde Savings Bank Company, incorporated in the state of Ohio Bright National Bank, organized as a national banking association under the laws of the United States National Bank of Hastings, organized as a national banking association under the laws of the United States Sand Ridge Bank, incorporated in the state of Indiana Hebron Deposit Bank, incorporated in the commonwealth of Kentucky Heritage Community Bank, incorporated in the state of Indiana First Financial Bancorp Service Corporation, incorporated in the state of Ohio Flagstone Insurance and Financial Services Holding Company, incorporated in the state of Ohio EX-23 6 l93296aex23.txt EXHIBIT 23 EXHIBIT 23 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in this Annual Report (Form 10-K) of First Financial Bancorp. of our report dated January 17, 2002 included in the 2001 Annual Report to Shareholders of First Financial Bancorp. We also consent to the incorporation by reference of our report dated January 17, 2002 with respect to the consolidated financial statements of First Financial Bancorp incorporated by reference in the Annual Report (Form 10-K) for the year ended December 31, 2001 in the following documents: - - Registration Statement (Form S-8 No. 33-46819) pertaining to the First Financial Bancorp 1991 Stock Incentive Plan and in the related Prospectus. - - Registration Statement (Form S-8 No. 333-86781) pertaining to the First Financial Bancorp 1999 Stock Incentive Plan for Officers and Employees and in the related Prospectus. - - Registration Statement (Form S-8 No. 333-86781) pertaining to the First Financial Bancorp 1999 Stock Incentive Plan for Non-Employee Directors and in the related Prospectus. - - Registration Statement (Form S-3 No. 333-25745) pertaining to the First Financial Bancorp. Dividend Reinvestment and Share Purchase Plan and in the related Prospectus /s/ Ernst & Young LLP Ernst & Young LLP March 11, 2002 Cincinnati, Ohio -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.5

                                                                    EXHIBIT 10.5



CONFIDENTIAL
- ------------

                                                  June 21, 2001



James C. Hall
Executive Vice President
First Financial Bancorp
300 High Street
P.O. Box 476
Hamilton, OH  45012

Dear Jim:

         You are employed by First Financial Bancorp ("FFBC") in a key executive
position. Continuity of the management of FFBC and its affiliate banks is a
critical factor in the continued success of FFBC. The Board of Directors of FFBC
believes it is in the best interest of FFBC to encourage the continued effort
and dedication of key members of management to their assigned duties.

         In consideration of the mutual promises contained in this letter, FFBC
shall provide to you, and you shall receive from FFBC, the benefits set forth in
this letter ("Agreement"), if your employment with FFBC is terminated during the
term of this Agreement.

1.       PURPOSE.

         This Agreement establishes certain basic terms and conditions relating
         to your employment with FFBC, and special arrangements and dispute
         resolution proceedings relating to the termination of your employment
         for any reason other than: (i) your retirement; (ii) your becoming
         totally and permanently disabled under the FFBC long-term disability
         plan or policy; or (iii) your death. This Agreement supersedes all
         prior agreements with FFBC and any of its affiliate banks or any
         predecessor businesses, except the Confidentiality Agreement previously
         entered, between you and FFBC, and the special severance benefits
         provided under this Agreement are to be provided instead of any other
         severance arrangements offered by FFBC or any of its affiliate banks.
         Notwithstanding the foregoing, neither your termination of employment
         nor anything





James C. Hall
June 21, 2001
Page 2

         contained in this Agreement shall have any adverse effect upon your
         rights under any tax-qualified "pension benefit plan," as such term is
         defined in the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"); or under any "welfare benefit plan" as defined in
         ERISA, including by way of illustration and not limitation, any medical
         surgical or hospitalization benefit coverage or long-term disability
         benefit coverage; or under any non-qualified deferred compensation
         arrangement, including by way of illustration and not limitation, any
         stock incentive plan or non-qualified pension plan; or under the FFBC
         Performance Incentive Plan for any completed plan year.

2.       EMPLOYMENT.

         FFBC agrees that, during the term of this Agreement, you will be
         employed with FFBC, and/or any other direct or indirect subsidiary or
         affiliate of FFBC to which you may be transferred, in your present
         position or in a position that is comparable to your present position
         in compensation, responsibility and stature and for which you are
         suited by education and background and that:

         (a)      you are, and will continue to be, eligible to participate in
                  any employee benefit plan of FFBC in accordance with its
                  terms; and

         (b)      you will be entitled to the same treatment under any generally
                  applicable employment policy or practice as any other member
                  of Executive Management Group whose position in the
                  organization is comparable to yours.

         Those plans, policies and practices that generally apply to other
         members of the Executive Management Group will be referred to in this
         Agreement as your "Employment Benefits." Your Employment Benefits may
         be modified from time to time after the date hereof without violation
         of this Agreement if the changes apply generally to other members of
         the Executive Management Group.

3.       TERM OF AGREEMENT.

         This Agreement shall become effective on the date of this Agreement
         ("Commencement Date") and shall continue in effect through the earlier
         of (i) the fifth anniversary of the Commencement Date; (ii) the date of
         your retirement, death or total and permanent disability; or (iii) the
         completion of full payment of all benefits promised hereunder. Absent
         your death, total and permanent disability or retirement, this
         Agreement shall be renewed annually from and after the fifth
         anniversary of the Commencement Date unless written notice to the
         contrary is given by you or by FFBC at least six (6) months prior to
         the expiration of the term, including any extension thereof.





James C. Hall
June 21, 2001
Page 3

4.       TERMINATION OF EMPLOYMENT.

         Your employment may be terminated in accordance with any of the
         following paragraphs, but only upon one (1) month's advance written
         notice (which period shall be referred to in this Agreement as the
         "Notice Period"):

         (a)      INVOLUNTARY TERMINATION. FFBC may terminate your employment
                  without cause. In such an event, you shall continue to receive
                  your full salary and Employment Benefits during the Notice
                  Period. The expiration of the Notice Period shall be your
                  "Date of Termination." Upon your Date of Termination, you
                  shall be entitled to those benefits provided under Section 5,
                  provided you give FFBC the release and covenant not to sue
                  described in Section 5.

         (b)      INVOLUNTARY TERMINATION FOR CAUSE. FFBC may terminate your
                  employment for "Cause" with written notice setting forth the
                  Cause for termination. "Cause" means a willful engaging in
                  gross misconduct materially and demonstrably injurious to
                  FFBC. "Willful" means an act or omission in bad faith and
                  without reasonable belief that such act or omission was in, or
                  not opposed to, the best interests of FFBC. The expiration of
                  the Notice Period is your "Date of Termination for Cause."
                  Upon your Date of Termination for Cause, you shall only be
                  entitled to those benefits provided under Section 6.

         (c)      VOLUNTARY TERMINATION. You may voluntarily terminate your
                  employment. In such an event, you shall continue to receive
                  your full salary and Employment Benefits during the Notice
                  period provided you satisfactorily perform your duties during
                  the Notice Period unless relieved of those duties by FFBC. The
                  expiration of the Notice Period is your "Voluntary Date of
                  Termination." Upon your Voluntary Date of Termination, you
                  shall only be entitled to those benefits provided under
                  Section 6.

         (d)      VOLUNTARY TERMINATION FOR GOOD REASON. You may terminate your
                  employment by notice setting forth a Good Reason for
                  termination if the notice is delivered to FFBC within thirty
                  (30) days following the occurrence of any "Good Reason." "Good
                  Reason" means a (i) change in the duties of your position, or
                  the transfer to a new position, which is not comparable to
                  your present position in compensation, responsibility or
                  status in violation of Section 2; (ii) substantial alteration
                  in the nature or status of your responsibilities in violation
                  of Section 2; (iii) reduction in your base salary; (iv)
                  refusal by FFBC, or its successor, to renew the term of this
                  Agreement for any reason, prior to your reaching your normal
                  retirement date under the FFBC Pension Benefit Plan; or (v)
                  changes in your Employment Benefits in violation of Section 2.
                  If you give notice of termination for Good





James C. Hall
June 21, 2001
Page 4

                  Reason, you shall continue to receive your full base salary
                  and Employment Benefits during the Notice Period as in effect
                  prior to the event that is the Good Reason for termination,
                  subject to the right of FFBC to make any changes to your
                  Employment Benefits permitted in accordance with Section 2.
                  The expiration of the Notice Period is your "Date of
                  Termination." Upon your Date of Termination, you shall be
                  entitled to those benefits provided under Section 5, provided
                  you give FFBC the written release and covenant not to sue
                  described in Section 5.

5.       SPECIAL SEVERANCE BENEFITS.

         If your employment with FFBC is involuntarily terminated in accordance
         with Section 4(a) or you voluntarily terminate your employment for Good
         Reason in accordance with Section 4(d) and you provide FFBC with a
         separate, written release and covenant not to sue (on a form provided
         by and satisfactory to FFBC) which releases FFBC from all claims
         arising from your employment and termination of your employment, and
         you do not revoke this release and covenant not to sue, then you shall
         receive the following benefits, less any applicable withholding
         required for federal, state or local taxes:

         (a)      your base salary shall be continued in effect for a period of
                  twenty-four (24) months from your Date of Termination
                  (hereinafter called your "Severance Pay Period");

         (b)      if, prior to your Date of Termination, you have participated
                  in the FFBC Performance Incentive Plan for a complete calendar
                  year, you will receive an incentive compensation payment
                  within thirty (30) days of your Date of Termination in one
                  lump-sum in an amount equal to 2.0 times the percentage of the
                  incentive payment made or required to be made for the calendar
                  year pursuant to the Performance Incentive Plan immediately
                  preceding the calendar year in which your Date of Termination
                  occurs;

         (c)      if your Date of Termination is within twelve (12) months after
                  a Change in Control, you will receive a payment within thirty
                  (30) days of your Date of Termination in one lump-sum in an
                  amount equal to the total of the following:

                  (i)      With respect to any shares of Stock subject to an
                           Option granted to you as of the time of the Change in
                           Control under the First Financial Bancorp 1991 Stock
                           Incentive Plan (the "Incentive Plan") that you cannot
                           exercise as a result of your termination of
                           employment, the difference between the fair market
                           value of such Stock, determined as of your Date of
                           Termination, and the Option Price.





James C. Hall
June 21, 2001
Page 5

                  (ii)     With respect to any Restricted Stock granted to you
                           under the Incentive Plan as of the time of the Change
                           in Control which you forfeit as a result of your
                           termination of employment, the fair market value of
                           such Restricted Stock, determined as of your Date of
                           Termination and as if all restrictions had been
                           removed.

                  (iii)    For purposes of this Section 5, "Stock," "Options,"
                           "Option Price," "Restricted Stock" and "Committee"
                           will have the meaning given those terms in the
                           Incentive Plan, and your right to exercise Options or
                           to receive Restricted Stock without forfeiture will
                           be determined after any adjustments made by the
                           Committee under Sections 8.8 and 11.1 of the
                           Incentive Plan, and after any amendments made to the
                           Incentive Plan in connection with the Change in
                           Control.

                  (iv)     For purposes of this Section 5, "Change in Control"
                           will have the following meaning: (a) a plan has been
                           approved by the shareholders of FFBC and consummated
                           for FFBC to be merged or consolidated with another
                           corporation and as a result of such merger or
                           consolidation less than 75% of the outstanding voting
                           securities of the surviving or resulting corporation
                           will be owned in the aggregate by the former
                           shareholders of FFBC as the same shall have existed
                           immediately prior to such merger or consolidation;
                           (b) an agreement for the sale by FFBC of
                           substantially all of its assets to another
                           corporation which is not a wholly owned subsidiary
                           has been approved by the shareholders (or the Board
                           of Directors or appropriate officers if shareholder
                           approval is not required) and consummated; (c)
                           "beneficial ownership" as defined in Rule 13d-3
                           promulgated under the Securities Exchange Act of 1934
                           (the "Exchange Act") of twenty percent (20%) or more
                           of the total voting capital stock of FFBC then issued
                           and outstanding has been acquired by any person or
                           "group" as defined in Section 13(d)(3) of the
                           Exchange Act; or (d) individuals who were members of
                           the Board of FFBC immediately prior to a meeting of
                           the shareholders of FFBC involving a contest for the
                           election of directors do not constitute a majority of
                           the Board immediately following such election, unless
                           the election of such new directors was recommended to
                           the shareholders by the management of FFBC. The Board
                           of FFBC has final authority to determine the exact
                           date on which a Change in Control has occurred under
                           the foregoing definitions.

         (d)      your Employment Benefits shall be continued during your
                  Severance Pay Period, subject to the right of FFBC to make any
                  changes to your Employment Benefits permitted in accordance
                  with Section 2; provided, however, that you shall not:




James C. Hall
June 21, 2001
Page 6

                  (i)      accumulate vacation pay for periods after your Date
                           of Termination;

                  (ii)     first qualify for long-term disability benefits or
                           sickness and accident plan benefits by reason of an
                           illness, accident or disability occurring, or a
                           sickness or illness first manifesting itself, after
                           your Date of Termination;

                  (iii)    be eligible to continue to make contributions to any
                           Internal Revenue Code ss. 401(k) plan maintained by
                           FFBC or qualify for a share of any employer
                           contribution made to any tax-qualified defined
                           contribution plan;

                  (iv)     be eligible to accumulate service for pension plan
                           purposes; or

                  (v)      retain possession of any motor vehicle provided to
                           you by FFBC.

         (e)      you shall qualify for full COBRA health benefit continuation
                  coverage upon the expiration of your Severance Pay Period;

         (f)      you shall be entitled to full executive outplacement
                  assistance with an agency selected by FFBC with the fee paid
                  by FFBC in an amount not to exceed five percent (5%) of your
                  annual base salary;

         (g)      with respect to the Endorsement Method Split Dollar Plan
                  Agreement (the "Split Dollar Agreement") to which you are a
                  party (and solely for purposes of the Split Dollar Agreement),
                  the duration of your Severance Pay Period shall be considered
                  as if it were active employment for purposes of determining
                  whether you were eligible to receive a retirement benefit
                  under the early retirement provisions of First Financial
                  Bancorp Employees' Pension Plan, as provided in Section VI(B)
                  of the Split Dollar Agreement; and

         (h)      if your Date of Termination is within twelve (12) months after
                  a Change in Control, you will receive a payment (the "Split
                  Dollar Payment") within ninety (90) days of your Date of
                  Termination in one lump-sum equal to the present value of the
                  death benefit you would have received under the Split Dollar
                  Agreement, determined as if you had terminated on your Date of
                  Termination, were then eligible to receive a retirement
                  benefit under the early retirement provisions of First
                  Financial Bancorp Employees' Pension Plan (whether or not this
                  is actually the case), and died at age 75 when the Split
                  Dollar Agreement was still in effect. For purposes of this
                  Section 5, present value will be determined using an annual
                  discount rate of 7%. Notwithstanding the prior two sentences,
                  if you elect to receive an assignment of the policy under
                  Section X of the Split Dollar Agreement, the Split Dollar
                  Payment shall be applied to the cash payment to FFBC required
                  under Section X of the Split Dollar Agreement, and any portion
                  of





James C. Hall
June 21, 2001
Page 7

                  the Split Dollar Payment in excess of the amount required
                  under Section X shall be paid to you. The provisions of this
                  Paragraph (g) will apply whether or not your Split Dollar
                  Agreement is terminated before you receive the Split Dollar
                  Payment.

         (i)      Notwithstanding any other provision of this Agreement, if the
                  receipt of any payment under Section 5 of this Agreement in
                  combination with any other payments to you from FFBC or its
                  affiliates that are parachute payments (as defined in Section
                  280G of the Internal Revenue Code), shall, in the opinion of
                  independent tax counsel of recognized standing selected by
                  FFBC, cause you to be liable for the payment of any excise tax
                  pursuant to Section 280G and Section 4999 of the Internal
                  Revenue Code, then FFBC will pay to you an additional amount
                  equal to the amount of such excise tax and the additional
                  federal, state, and local income taxes for which you will be
                  liable as a result of this additional payment. Such payment
                  will be made within 60 days of the date your employment
                  terminates.

         The release and covenant not to sue which you agree to provide prior to
         the receipt of special severance benefits under this Section 5 of this
         Agreement shall comply with the requirements of the Older Workers
         Benefit Protection Act and applicable state and federal laws and
         regulations. If you do not provide FFBC with such a written release and
         covenant not to sue, any claims concerning this Agreement or otherwise
         arising from your employment with FFBC, or its affiliate banks, shall
         be subject to final and binding arbitration as described in Section 7.

6.       BENEFITS UPON VOLUNTARY TERMINATION OR TERMINATION FOR CAUSE.

         Upon your Date of Termination for Cause in accordance with Section 4(b)
         or your Voluntary Date of Termination in accordance with Section 4(c),
         all special severance benefits under this Agreement will be void. In
         such an event, you shall be eligible for any benefits provided in
         accordance with the plans and practices of FFBC that are applicable to
         employees generally.

7.       ARBITRATION.

         Any dispute under this Agreement, and any claims of wrongful or
         discriminatory termination based on any state or federal statute, tort,
         public policy, contract or promissory estoppel theory, including any
         dispute as to the cause or reason for termination, shall be submitted
         to final and binding arbitration, subject to the National Rules for the
         Resolution of Employment Disputes of the American Arbitration




James C. Hall
June 21, 2001
Page 8

         Association, effective June 1, 1997, as amended from time to time,
         except as hereinafter provided:

         (a)      FFBC shall pay the arbitrator's fee and a court reporter's
                  attendance fee;

         (b)      Each party shall bear the cost of its own attorney's fees.
                  However, if you prevail in a challenge to FFBC's determination
                  as to cause for your termination or if you prevail on any
                  claim that you were discriminated against in violation of any
                  federal law or statute, you shall be reimbursed by FFBC for
                  the filing fee and any reasonable costs or expenses incurred
                  in such a challenge, including reasonable attorney's fees;

         (c)      The arbitration hearing shall be held in Hamilton, Ohio,
                  unless the parties mutually agree to another location;

         (d)      Each party shall exchange documents to be utilized as exhibits
                  in the arbitration hearing and each party shall be limited to
                  two (2) pre-hearing depositions of two (2) hours each, unless
                  the arbitrator orders additional discovery;

         (e)      The arbitrator shall be appointed in accordance with Rule 12
                  of the above-referenced Rules of the American Arbitration
                  Association as amended from time to time, except that if, for
                  any reason, an arbitrator cannot be selected by the process
                  described in Rule 12, subparts (i) through (iii), the American
                  Arbitration Association shall submit the names of seven (7)
                  additional arbitrators from its Roster and the parties shall
                  select the arbitrator by alternately striking names with the
                  party requesting arbitration first striking; and

         (f)      Either party shall be entitled to an injunction or other
                  appropriate equitable relief to enforce the arbitration
                  provisions of this Agreement and FFBC shall be entitled to an
                  injunction to prevent any breach, pending arbitration, of the
                  Confidentiality Agreement described below in paragraph 8 or
                  the Covenant Not to Compete described below in paragraph 10.

                  It is the intention of the parties to avoid litigation in any
         court of all claims concerning this Agreement, or otherwise arising
         from your employment with FFBC, or its affiliate bank, and that all
         such claims will be subject to this arbitration agreement. Neither
         party shall commence or pursue any litigation on any claim that is or
         was the subject of arbitration under this Agreement. Each party agrees
         that this agreement to arbitrate and the arbitration award are
         enforceable under and subject to the Federal Arbitration Act, 9 U.S.C.
         ss. I, et seq. ("FAA"). If the FAA is held not to apply for any reason
         and the law of the state in which you are employed recognizes the
         enforceability of this Agreement and the arbitration award, then this
         Agreement and the





James C. Hall
June 21, 2001
Page 9

         arbitration award are enforceable under the laws of the state in which
         you are employed. Both parties consent that judgment upon the
         arbitration award may be entered in any federal or state court that has
         jurisdiction. The acceptance of any benefit under this Agreement shall
         be deemed ratification of this agreement to arbitrate claims. In the
         event you breach this Agreement by filing a lawsuit, at the time your
         lawsuit is filed, you will return any Special Severance Benefits paid
         to you and be subject to injunctive relief enforcing this Agreement.

8.       CONFIDENTIALITY.

         You will not disclose to any person or use for the benefit of yourself
         or any other person any confidential or proprietary information of FFBC
         without the prior written consent of the Chief Executive Officer of
         FFBC. Upon your termination of employment, you will return to FFBC all
         written or electronically stored memoranda, notes, plans, customer
         lists, records, reports or other documents of any kind or description
         (including all copies in any form whatsoever) relating to the business
         of FFBC and fully comply with any separate confidentiality agreement to
         which you and FFBC are parties.

9.       CONFLICTS OF INTEREST.

         You agree for so long as you are employed by FFBC to avoid dealings and
         situations that would create the potential for a conflict of interest
         with FFBC. In this regard, you agree to comply with the FFBC policy
         regarding conflicts of interest and all applicable state or federal
         regulations concerning conflicts of interest applicable to commercial
         bank or savings bank officers.

10.      COVENANT NOT TO COMPETE.

         During the term of your employment, and for a period of six (6) months
         following the termination of your employment for any reason other than
         as set forth in Section 4(b), you agree not to be employed by, serve as
         officer or director of, consultant to or advisor to any business that
         engages either directly or indirectly in commercial banking, savings
         banking or mortgage lending in the geographic area of Ohio, Indiana,
         Michigan or Kentucky or which is reasonably likely to engage in such
         businesses in the same geographic area during the six (6) month period
         following your termination of employment.

11.      NOTICE.





James C. Hall
June 21, 2001
Page 10

         Notices required or permitted under this Agreement shall be in writing
         and shall be deemed to have been given when delivered or mailed by
         United States certified mail, return receipt requested, postage
         prepaid, in a properly addressed envelope. Notices to FFBC shall be
         addressed to the Chief Executive Officer.

12.      MODIFICATION; WAIVER; SUCCESSORS.

         No provision of this Agreement may be waived, modified or discharged
         except pursuant to a written instrument signed by you and the Chief
         Executive Officer of FFBC. This Agreement is binding upon any successor
         to all or substantially all of the business or assets of FFBC.

13.      VALIDITY; COUNTERPARTS.

         This Agreement shall be governed by and construed under the law of the
         State of Ohio. The validity or unenforceability of any provision hereof
         shall not affect the validity or enforceability of any other provision
         hereof. This Agreement may be executed in one or more counterparts,
         each of which shall be deemed to be an original but all of which
         together will constitute one and the same instrument.

         This Agreement supersedes the Agreement dated January 27, 1998 and
September 12, 2000.

                                       Sincerely yours,

                                       FIRST FINANCIAL BANCORP



                                       By:___________________________



ACCEPTED AND AGREED TO
THIS ____ DAY OF JUNE, 2001




- ----------------------------------
James C. Hall








James C. Hall
June 21, 2001
Page 11

EX-13

                                                                      Exhibit 13


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

                            FIRST FINANCIAL BANCORP

         The following discussion and analysis is presented to facilitate the
understanding of the financial position and results of operations of First
Financial Bancorp. (Bancorp). It identifies trends and material changes that
occurred during the reporting periods and should be read in conjunction with the
consolidated financial statements and accompanying notes.

         Bancorp is a financial holding company headquartered in Hamilton, Ohio.
As of December 31, 2001, Bancorp owned thirteen subsidiaries located in western
Ohio, Indiana, northern Kentucky, and southern Michigan. These subsidiaries
include ten commercial banks, one savings bank, a service corporation, and an
insurance agency.

         On January 25, 2001, Bancorp announced that its board of directors had
approved a multi-year plan (Project Renaissance) to focus on regionalization and
market expansions designed to increase long-term shareholder value. This
multi-phased regionalization strategy will consolidate Bancorp's current banking
affiliates into four regional financial institutions.

         The first of Bancorp's new regional affiliates was formed in November
of 2001 when four of the holding company's financial institutions in
southeastern Indiana (Peoples Bank and Trust, Sunman; Farmers State Bank,
Liberty; Union Bank & Trust, North Vernon; and Vevay Deposit Bank, Vevay) were
merged under the new name, Heritage Community Bank. The new $350 million
southeastern Indiana entity encompasses 15 offices, serving 38,000 customers in
10 counties.

         Bancorp plans to merge its three north central Indiana and two northern
Ohio affiliates (Indiana Lawrence Bank, North Manchester, Indiana; Citizens
First State Bank, Hartford City, Indiana; Fidelity Federal Savings Bank, Marion,
Indiana; Community First Bank & Trust, Celina, Ohio; and Clyde Savings Bank,
Clyde, Ohio) under the name, Community First Bank & Trust.

         Management's initial intent in Project Renaissance was to form each
region by simultaneously converting the computer systems and merging the banks
involved. This strategy worked for the formation of our first regional bank,
Heritage Community Bank. However, for the Community First region, the regulatory
approval timelines for the merger did not align with the system conversion
timelines. Therefore, the Community First system conversion will be completed
separately in the second quarter of 2002, and the merger of the banks will occur
in either late-2002 or mid-2003.

         Bancorp's emphasis on the Greater Cincinnati market will be sharpened
through the merger of First National Bank of Southwestern Ohio, Hamilton, Ohio
and Hebron Deposit Bank, Hebron, Kentucky.

         Designed to serve northwestern Indiana and southern Michigan, the
fourth phase of the project will be the merger of Sand Ridge Bank, Highland,
Indiana; Bright National Bank, Flora, Indiana; and National Bank of Hastings,
Hastings, Michigan.

         Bancorp plans to disclose additional details concerning each of the
regionalization phases as appropriate.

         On October 4, 2001, Bancorp's Ohio City Insurance Agency began
operating under a new name, Flagstone Insurance and Financial Services.

         On May 23, 2001, Bancorp announced plans to discontinue its finance
company, Community First Finance. During its five-year existence, the finance
company grew to $14 million in net loans. Even so, the venture proved to be very
labor-intensive and did not meet net earnings expectations. As Community First
Finance's outstanding loan receivables are reduced through payoffs and routine
monthly consumer payments, Bancorp plans to redeploy the funds into alternatives
with higher total returns.

         On February 27, 2001, the board of directors approved a 5% stock
dividend, issued to shareholders of record as of March 9, 2001, and distributed
April 2, 2001. All per share amounts have been restated for all periods
presented.

         Bancorp repurchased 276,000 shares of its common stock during 2001
under a previously approved program to satisfy restricted stock awards and stock
options. Under an additional previously approved and ongoing program for general
corporate purposes, Bancorp repurchased 1,571,500 shares during 2001.

         The major components of Bancorp's operating results for the past five
years are summarized in Table 1 and discussed in greater detail on subsequent
pages. For a thorough understanding of Bancorp's financial results and
conditions, this discussion should be read in conjunction with the statistical
data and consolidated financial statements on Pages 12 through 31.

RECENT MERGERS AND ACQUISITIONS

         On December 31, 2001, Bancorp completed its purchase of certain assets
and assumption of certain liabilities of a division of Blue River Bancshares,
Inc. operating under the name First Community Bank of Fort Wayne, Indiana. This
division has assets of approximately $30 million with two branch locations in
Fort Wayne which are now operating as part of Bancorp's Community First Bank &
Trust affiliate.

OVERVIEW OF OPERATIONS

         Bancorp's net earnings decreased 25.6% to $43,309,000 in 2001, compared
to net earnings of $58,222,000 in 2000. Bancorp's diluted earnings per share
decreased 23.5% to $0.91, from $1.19 in 2000. Core net earnings decreased 20.6%
to $46,481,000 versus core net earnings of $58,508,000 in 2000. Core net
earnings excludes one-time expenses associated with Project Renaissance,
Bancorp's regionalization and expansion plan, as well as 2000 costs associated
with the merger of two Bancorp affiliates, First National Bank of Southwestern
Ohio and Home Federal Bank, a Federal Savings Bank. Core diluted net earnings
per share decreased 18.3% to $0.98 in 2001, compared to $1.20 in 2000.

         Bancorp's earnings for 2001 were impacted by a dramatic drop in
interest rates and a slowing economy, in addition to its anticipated
regionalization and expansion plan expenses. Net interest income for 2001
decreased 2.93%. Higher-than-normal nonperforming assets and loan charge-offs,
coupled with the building of the loan loss reserve to 1.63% of loans, required a
significant increase in the provision for loan loss expense. A 12.1% increase in
noninterest income and continued expense control contributed favorably to
Bancorp's 2001 results.

         Bancorp's diluted earnings per share on a "cash basis," which excludes
the effect of amortization of goodwill and core deposits (tax effected when
applicable), were $0.95 for 2001, compared to $1.24 in 2000.

         Bancorp's net earnings during 2000 were $58,222,000 or $1.19 per share
on a diluted basis, representing a 15.7% increase from 1999 net earnings and a
16.7% increase from 1999 earnings per share on a diluted basis. Core net
earnings in 2000 were $58,508,000 or $1.20 per share on a diluted basis,
representing a 6.19% increase over the comparable 1999 diluted earnings per
share of $1.13. Core net earnings excludes 2000 costs associated with the merger
of the First Southwestern and Home Federal affiliates, as well as 1999 merger
and restructuring costs associated with the acquisitions of Sand Ridge Bank and
Hebron Deposit Bank and the consolidation of some operational functions.



                FIRST FINANCIAL BANCORP   1   2001 ANNUAL REPORT







                                          TABLE 1 - FINANCIAL SUMMARY

                                                 2001          2000          1999            1998          1997
                                                         (Dollars in thousands, except per share data)
                                                                                         
SUMMARY OF OPERATIONS
Interest income                               $  289,745    $  313,303    $  281,018      $  261,076    $  230,823
Tax equivalent adjustment                          4,405         4,899         5,246           4,862         4,927
                                              ----------    ----------    ----------      ----------    ----------
  Interest income - tax equivalent               294,150       318,202       286,264         265,938       235,750
Interest expense                                 126,780       145,424       117,194         110,434        96,576
                                              ----------    ----------    ----------      ----------    ----------
  NET INTEREST INCOME - TAX EQUIVALENT        $  167,370    $  172,778    $  169,070      $  155,504    $  139,174
                                              ==========    ==========    ==========      ==========    ==========
Interest income                               $  289,745    $  313,303    $  281,018      $  261,076    $  230,823
Interest expense                                 126,780       145,424       117,194         110,434        96,576
                                              ----------    ----------    ----------      ----------    ----------
  Net interest income                            162,965       167,879       163,824         150,642       134,247
Provision for loan losses                         26,813        11,300         9,232           8,247         6,656
Noninterest income                                54,242        48,401        43,766          41,106        32,465
Noninterest expenses                             124,954       118,018       121,735         107,845        91,229
                                              ----------    ----------    ----------      ----------    ----------
  Income before income taxes                      65,440        86,962        76,623          75,656        68,827
Income tax expense                                22,131        28,740        26,300          24,684        21,995
                                              ----------    ----------    ----------      ----------    ----------
  NET EARNINGS                                $   43,309    $   58,222    $   50,323(2)   $   50,972    $   46,832
                                              ==========    ==========    ==========      ==========    ==========
Tax equivalent basis was calculated using
a 35.0% tax rate in all years presented

PER SHARE DATA(1)
  NET EARNINGS - BASIC                        $     0.91    $     1.19    $     1.02      $     1.03    $     0.95
                                              ==========    ==========    ==========      ==========    ==========
  NET EARNINGS - DILUTED                      $     0.91    $     1.19    $     1.02      $     1.03    $     0.94
                                              ==========    ==========    ==========      ==========    ==========
Cash dividends declared
  First Financial Bancorp                     $     0.60    $     0.57    $     0.54      $     0.50    $     0.45
  Sand Ridge Financial Corporation(3)                N/A           N/A    $     4.75      $    18.00    $    17.00
  Hebron Bancorp, Inc.(4)                            N/A           N/A    $     1.50      $     5.50    $     5.00

Average common shares outstanding - basic
 (in thousands)                                   47,428        48,776        49,191          49,333        49,365
Average common shares outstanding - diluted
(in thousands)                                    47,479        48,862        49,335          49,531        49,515

SELECTED YEAR-END BALANCES
Total assets                                  $3,854,794    $3,932,512    $3,940,693      $3,538,869    $3,189,663
Earning assets                                 3,505,791     3,604,916     3,572,755       3,253,574     2,911,760
Investment securities held-to-maturity            20,890        24,800        31,765          37,782        62,511
Investment securities available-for-sale         595,600       564,762       490,126         550,394       503,936
Loans, net of unearned income                  2,872,249     3,008,066     3,036,376       2,654,146     2,322,953
Deposits                                       3,085,093     3,151,428     2,991,213       2,872,067     2,692,688
Noninterest-bearing demand deposits              448,330       419,878       408,712         392,999       370,960
Interest-bearing demand deposits                 346,039       306,356       314,735         307,752       338,968
Savings deposits                                 782,640       739,376       778,405         758,808       655,719
Time deposits                                  1,508,084     1,685,818     1,489,361       1,412,508     1,327,041
Long-term borrowings                             260,345       205,216       161,799         120,777        46,570
Shareholders' equity                             384,543       395,132       372,539         358,265       336,256
RATIOS BASED ON AVERAGE BALANCES
Loans to deposits                                  93.71%       100.76%        98.28%          89.07%        89.04%
Net charge-offs to loans                            0.71%         0.37%         0.20%           0.24%         0.18%
Shareholders' equity to
  Total assets                                     10.26%         9.62%         9.93%          10.46%        11.04%
  Deposits                                         12.72%        12.45%        12.61%          12.64%        13.29%
Return on assets                                    1.12%         1.48%         1.37%           1.53%         1.61%
Return on equity                                   10.94%        15.34%        13.75%          14.59%        14.63%
Net interest margin (tax equivalent basis)          4.67%         4.72%         4.94%           5.02%         5.13%


(1) First Financial Bancorp's per share data has been restated for all stock
    dividends, stock splits, and material pooling-of-interests mergers through
    2001.
(2) 1999 net earnings includes $6,930,000 ($5,454,000 after tax) in merger and
    restructuring charges.
(3) Sand Ridge Financial Corporation was the parent company of Sand Ridge Bank
    and was merged out of existence on June 1, 1999.
(4) Hebron Bancorp, Inc. was the parent company of Hebron Deposit Bank and was
    merged out of existence on June 1, 1999.


                   FIRST FINANCIAL BANCORP   2   2001 ANNUAL REPORT



         Bancorp's diluted earnings per share on a "cash basis," which excludes
the effect of amortization of goodwill and core deposits (tax effected when
applicable), were $1.24 for 2000 compared to $1.18 in 1999.

         Bancorp's return on equity for 2001 was 10.9%, which compares to 15.3%
and 13.8% for 2000 and 1999, respectively. Bancorp's return on assets for 2001
was 1.12%. This compares with return on assets of 1.48% and 1.37% for 2000 and
1999, respectively. Excluding Project Renaissance expenses in 2001, Bancorp's
return on equity was 11.7% and its return on assets was 1.20%. Excluding the
merger and restructuring charges, Bancorp's return on equity for 1999 was 15.2%
and its return on assets was 1.51%.

NET INTEREST INCOME

         Net interest income, Bancorp's principal source of earnings, is the
excess of interest received from earning assets over interest paid on
interest-bearing liabilities. Bancorp's net interest income for the years 1997
through 2001 is shown in Table 1. For analytical purposes, a section showing
interest income on a tax equivalent basis is also presented in Table 1. The tax
equivalent adjustment recognizes the income tax savings when comparing taxable
and tax-exempt assets and assumes a 35.0% tax rate for all years presented.

         The amount of net interest income is determined by the volume and mix
of earning assets, the rates earned on such earning assets, and the volume, mix,
and rates paid for the deposits and borrowed money that support the earning
assets. Table 2 describes the extent to which changes in interest rates and
changes in volume of earning assets and interest-bearing liabilities have
affected Bancorp's net interest income during the years indicated. The combined
effect of changes in volume and rate has been allocated proportionately to the
change due to volume and the change due to rate. Table 2 should be read in
conjunction with the Statistical Information shown on Page 12.

         Tax equivalent interest income was $294,150,000 in 2001, a decrease of
$24,052,000 or 7.56% from 2000. The decrease in interest income was largely the
result of eleven downward movements in interest rates initiated by the Federal
Reserve during 2001, as the prime lending rate dropped from 9.50% to 4.75% and
impacted on Bancorp's variable rate loans. Interest income was also adversely
impacted as average loan balances decreased $155,788,000 primarily due to a
$120,979,000 reduction in real estate loans. While residential real estate loan
demand remained high due to refinancing activity into lower fixed-rate loans,
Bancorp's strategy, given a lower point in the interest rate cycle, was to sell
a majority of these mortgage loans while retaining the servicing and customer
relationships.

         Total interest expense was $126,780,000 in 2001, a decrease of
$18,644,000 from 2000. The interest expense was primarily impacted by a decrease
in the rate paid on interest-bearing liabilities. The average rate paid for
deposits and borrowings decreased from 4.65% during 2000 to 4.18% during 2001.

         Tax equivalent net interest income, the difference between tax
equivalent total interest income and total interest expense, decreased
$5,408,000 or 3.13% during 2001 as a result of the factors discussed above.
However, most of the decline in net interest income occurred in the first six
months of 2001, as net interest income stabilized in the last two quarters.

         The interest rate spread and the net interest margin are two ratios
frequently used to measure differences in net interest income. The interest rate
spread (the average rate on earning assets minus the average rate on
interest-bearing liabilities) was 4.03% for 2001 and 4.05% for 2000. The net
interest margin (net interest income on a tax equivalent basis divided by
average earning assets) decreased five basis points, from 4.72% in 2000 to 4.67%
in 2001. Throughout 2001, Bancorp's balance sheet was asset-sensitive. An
asset-sensitive position suggests that a declining rate environment will
negatively influence net interest income as earning assets will reprice downward
more quickly than interest-bearing liabilities. Given the dramatic drop in rates
in 2001, Bancorp did well to maintain the margin, which continues to rank high
relative to its peers.




                                TABLE 2 - VOLUME/RATE ANALYSIS - TAX EQUIVALENT BASIS (1)

                                                  2001 change from 2000 due to         2000 change from 1999 due to
                                                  VOLUME        RATE       TOTAL      VOLUME       RATE       TOTAL
                                                                        (Dollars in thousands)
                                                                                           
INTEREST INCOME
  Loans                                          $(13,701)   $(10,228)   $(23,929)   $ 19,369    $  8,722    $ 28,091
  Investment securities (2)
    Taxable                                         2,229      (2,985)       (756)      1,740       2,850       4,590
    Tax-exempt                                     (1,000)       (191)     (1,191)       (917)       (129)     (1,046)
                                                 --------    --------    --------    --------    --------    --------
      Total investment securities interest (2)      1,229      (3,176)     (1,947)        823       2,721       3,544
  Interest-bearing deposits with other banks          195        (301)       (106)        275          96         371
  Federal funds sold and securities
    purchased under agreements to resell            2,075        (145)      1,930        (174)        106         (68)
                                                 --------    --------    --------    --------    --------    --------
      TOTAL                                       (10,202)    (13,850)    (24,052)     20,293      11,645      31,938

INTEREST EXPENSE
  Interest-bearing demand deposits                    552      (1,084)       (532)       (289)      1,066         777
  Savings deposits                                    (12)     (3,597)     (3,609)       (736)        893         157
  Time deposits                                     2,443      (4,704)     (2,261)      8,860       9,406      18,266
  Short-term borrowings                           (11,110)     (4,814)    (15,924)      3,590       2,984       6,574
  Long-term borrowings                              4,299        (617)      3,682       1,812         644       2,456
                                                 --------    --------    --------    --------    --------    --------
      TOTAL                                        (3,828)    (14,816)    (18,644)     13,237      14,993      28,230
                                                 --------    --------    --------    --------    --------    --------
      NET INTEREST INCOME                        $ (6,374)   $    966    $ (5,408)   $  7,056    $ (3,348)   $  3,708
                                                 ========    ========    ========    ========    ========    ========


(1) Tax equivalent basis was calculated using a 35.0% tax rate.
(2) Includes both investment securities held-to-maturity and investment
    securities available-for-sale.


                FIRST FINANCIAL BANCORP   3   2001 ANNUAL REPORT





         Nonaccruing loans were included in the daily average loan balances used
in determining the yields in Table 2. Interest foregone on nonaccruing loans is
disclosed in Note 9 of the Notes to Consolidated Financial Statements and is not
considered to have a material effect on the reasonableness of these
presentations. In addition, the amount of loan fees included in the interest
income computation for 2001, 2000, and 1999 was $7,541,000, $6,622,000, and
$6,889,000, respectively.

NONINTEREST INCOME AND NONINTEREST EXPENSES

         A listing of noninterest income and noninterest expenses for 2001,
2000, and 1999 is reported in Table 3. The mergers that occurred during 1999
were accounted for using the pooling-of-interests method of accounting, and the
consolidated financial statements for prior years were restated to include
account balances and results of operations for the companies acquired. There
were no acquisitions that required restatement in 2001 or 2000.

NONINTEREST INCOME

         2001 vs. 2000. Excluding securities gains, 2001 noninterest income
increased $5,578,000 or 11.5% over 2000. For the same period, service charges on
deposits increased 8.31%, fueled by growth in core deposits and re-pricing of
certain service fees. Trust revenues increased 3.79% due to a revised pricing
structure and new business development. Decreased market values of the
underlying securities held in trust limited the increase in trust revenues.
Other noninterest income was up 22.7% as a result of increased insurance agency
revenues, gains on the sales of mortgage loans, sales of third-party mutual
funds, and increased credit insurance sales.

         2000 vs. 1999. Total noninterest income, exclusive of securities gains
or losses, increased $4,646,000 or 10.6% during 2000.

         When compared with the prior year, Bancorp's 2000 noninterest income
was impacted by a less favorable environment for gains on sale of loans, which
were down $1,975,000. Noninterest income excluding such gains was up 15.1%. One
of the largest contributing factors to the overall increase in noninterest
income was service charges on deposit accounts with an increase of 13.0%,
resulting from a continued focus on growth in Bancorp's deposit base and
improvements in this fee income area. One indication of Bancorp's emphasis on
deposits was the appointment of a chief deposit officer at each affiliate in
2000.

         Bancorp's trust revenues increased 6.11% or $820,000 over 1999. Bancorp
had targeted an increase of over 10%; however, trust revenues are largely
dependent on the market values of the underlying securities held in trust. For
stocks in general, the year was difficult with the S&P 500 falling by 10.1% and
the Nasdaq(R) falling by 39.3%. These lower market values were the primary
reason for lower than anticipated trust revenues.

         In 2000, the "other" category of noninterest income increased 12.2%.
Included in this category are a gain of approximately $400,000 associated with
the dissolution of a partnership originally established in 1974 to conduct
specialized leasing arrangements, a gain of approximately $100,000 due to
reduced investment in an ATM network, and increased key executive life insurance
income. It should be noted that the dissolution of the leasing partnership will
have no effect on future earnings per share.

NONINTEREST EXPENSES

         2001 vs. 2000. Bancorp's strong control over operating costs is
reflected by its 2001 core expenses that remained relatively flat over 2000 as
Bancorp continues to realize savings associated with the 2000 in-market
consolidation of two affiliates, First National Bank of Southwestern Ohio and
Home Federal Bank. Adjusting for merger and restructuring expenses in 2000 and
Project Renaissance in 2001, noninterest expenses increased approximately
$2,495,000 or 2.11%.





                                            TABLE 3 - NONINTEREST INCOME AND NONINTEREST EXPENSES

                                                        2001                        2000                       1999
                                                          % CHANGE                     % CHANGE                     % CHANGE
                                                           INCREASE                     INCREASE                     INCREASE
                                               TOTAL      (DECREASE)       TOTAL       (DECREASE)      TOTAL        (DECREASE)

                                                                          (Dollars in thousands)
                                                                                                    
 NONINTEREST INCOME
  Service charges on deposit accounts       $    20,348       8.3%     $    18,786        13.0%      $    16,629        14.3%
  Trust revenues                                 14,769       3.8%          14,230         6.1%           13,410        10.4%
  Other                                          18,823      22.7%          15,346        12.2%           13,677        (2.7%)
                                            -----------                -----------                   -----------
    Subtotal                                     53,940      11.5%          48,362        10.6%           43,716         7.3%
  Investment securities gains                       302       N/M               39         N/M                50         N/M
                                            -----------                -----------                   -----------
    TOTAL                                   $    54,242      12.1%     $    48,401        10.6%      $    43,766         4.7%
                                            ===========     =====      ===========       =====       ===========        ====
NONINTEREST EXPENSES
  Salaries and employee benefits            $    65,061       2.3%     $    63,606         3.2%      $    61,614         7.3%
  Net occupancy                                   7,475       1.0%           7,402         5.5%            7,019         7.8%
  Furniture and equipment                         6,332      (0.7%)          6,374         1.9%            6,256         5.5%
  Data processing                                 7,254     (13.9%)          8,427        11.7%            7,545         1.3%
  Deposit insurance                                 602      11.1%             542        (1.6%)             551        16.2%
  State taxes                                     1,913     (21.3%)          2,432        20.1%            2,025        11.0%
  Amortization of intangibles                     2,650     (18.9%)          3,268       (11.1%)           3,674        (8.5%)
  Restructuring charge                                0       N/M            (353)         N/M             6,930         N/M
  Other                                          33,667      27.9%          26,320         0.8%           26,121         3.7%
                                            -----------     -----      -----------       -----       -----------        ----
    TOTAL                                   $   124,954       5.9%     $   118,018        (3.1%)     $   121,735        11.8%
                                            ===========     =====      ===========       =====       ===========        ====


N/M = Not meaningful


                FIRST FINANCIAL BANCORP   4   2001 ANNUAL REPORT



         Total Project Renaissance expenses in 2001 were $4,880,000 related to
salaries and employee benefits, equipment disposals, and early termination of
certain data processing agreements. The majority of the Project Renaissance
expenses were recorded in the "other" category resulting in the 27.9% increase
in the category over 2000. Of the $4,880,000 recognized in 2001, $3,867,000 was
recorded in the fourth quarter of 2001.

         The efficiency ratio (noninterest expenses as a percentage of
noninterest income, excluding securities transactions, plus tax equivalent net
interest income) reflects how much, on average, an institution expends to
generate each dollar of revenue. Bancorp's efficiency ratio, exclusive of
Project Renaissance expenses and merger and restructuring charges, was 54.3%,
53.0%, and 53.7% for 2001, 2000, and 1999, respectively

         2000 vs. 1999. Noninterest expense decreased by $3,858,000 in 2000 as
compared to 1999. Excluding expenses related to the 2000 in-market merger of two
affiliates and expenses associated with the merger and restructuring charge in
1999, noninterest expense increased $2,633,000 or a modest 2.32%. Excluding the
merger and restructuring charge of $6,930,000 from 1999, the $353,000 reduction
of the merger and restructuring charge liability in 2000, and the $792,000 of
in-market affiliate merger expenses in 2000, provides a more accurate indicator
of changes in core expenses.

         Salaries and employee benefits increased by only 3.23% over 1999.
Less-than-anticipated health care costs and reduced incentive compensation
contributed to holding this increase to less than 5%.

         In 2000, approximately $360,000 was reclassified from "other" to data
processing. Adjusting for this reclassification produces an increase in the data
processing expense of approximately 6%.

         Bancorp's amortization of intangibles decreased 11.1% from 1999 as a
result of the expiration of the amortization of various intangible assets.

INCOME TAXES

         Bancorp's tax expense in 2001 totaled $22,131,000 compared to
$28,740,000 in 2000 and $26,300,000 in 1999, resulting in effective tax rates of
33.8%, 33.0%, and 34.3% in 2001, 2000, and 1999, respectively. The 2001
effective tax rate increased slightly, primarily as a result of less tax- exempt
interest income. The decrease in 2000's effective tax rate was primarily due to
an increase in tax-exempt life insurance income associated with an ongoing
employee benefit plan.

         Further analysis of income taxes is presented in Note 11 of the Notes
to Consolidated Financial Statements.

LOANS

         Total loans, net of unearned income, declined $135,817,000 or 4.52%
during 2001, and average loan balances were down 5.07%. A slowing economy in the
last half of 2001 impacted loan demand. Lower loan balances were also a result
of Bancorp's plan to hold fewer real estate loans. While residential real estate
loan demand remained high due to refinancing activity into lower fixed-rate
loans, Bancorp's strategy, given a lower point in the interest rate cycle, was
to sell a majority of these mortgage loans while retaining the servicing and
customer relationships.

         Bancorp's loans cover a broad range of borrowers characterizing the
western Ohio, southern Michigan, northern Kentucky, and Indiana markets. There
were no loan concentrations of multiple borrowers in similar activities at
December 31, 2001, which exceeded 10.0% of total loans.

         Bancorp's subsidiaries consist of community banks dedicated to meeting
the financial needs of individuals and businesses living and operating in the
communities they serve. Bancorp's loan portfolio is therefore primarily composed
of residential and commercial real estate mortgage loans, commercial loans, and
installment loans. At December 31, 2001, real estate mortgage loans composed
46.8% of Bancorp's total loan portfolio and installment loans composed another
20.5% of the total loan portfolio. Commercial loans equaled 28.0% of the total
portfolio; and real estate construction, credit card lending, and lease
financing made up the remaining 4.70% of the portfolio. In 2001, Bancorp
continued to adjust its mix of loans slightly by targeting growth in commercial
loans and reducing the level of mortgage loans. End-of-period commercial loans
increased $17,247,000 or 2.19% from 2000 to 2001. Real estate mortgage loans
decreased $92,104,000 or 6.40% for the same period.

         Real estate mortgage loans are generally considered to be the safest
loan investments because of the real estate securing the loans. Installment
loans include unsecured loans, second mortgage loans, secured lines of credit,
secured and unsecured home improvement loans, automobile loans, student loans,
and loans secured by savings, stocks, or life insurance. Bancorp subsidiaries
offer a wide variety of commercial loans, including small business loans,
agricultural loans, equipment loans, and lines of credit.

         Subject to Bancorp guidelines and policy, credit underwriting and
approval occur within the subsidiary originating the loan. Bancorp has
established individual affiliate house lending limits to handle the majority of
customer requests in a timely manner at each subsidiary. Loan applications for
principal amounts greater than a designated amount, which varies by subsidiary,
require Bancorp approval. Any plans to purchase or sell a participation in a
loan also require Bancorp approval.




                                       TABLE 4 - LOAN PORTFOLIO

                                                       DECEMBER 31,

                                 2001        2000         1999         1998         1997
                                                  (Dollars in thousands)

                                                                  
Commercial                   $  804,683   $  787,436   $  769,454   $  689,524   $  554,728
Real estate - construction       75,785       97,571      111,458       74,205       65,468
Real estate - mortgage        1,346,235    1,438,339    1,467,591    1,306,065    1,140,628
Installment                     588,549      618,489      623,091      537,156      516,368
Credit card                      22,846       24,182       22,408       21,306       20,055
Lease financing                  36,139       46,068       46,508       29,212       27,260
                             ----------   ----------   ----------   ----------   ----------
  TOTAL                      $2,874,237   $3,012,085   $3,040,510   $2,657,468   $2,324,507
                             ==========   ==========   ==========   ==========   ==========


                FIRST FINANCIAL BANCORP   5   2001 ANNUAL REPORT

                    TABLE 5 - LOAN MATURITY/RATE SENSITIVITY


                                                                        DECEMBER 31, 2001
                                                                             Maturity

                                                                         AFTER ONE
                                                                WITHIN   BUT WITHIN   AFTER
                                                               ONE YEAR  FIVE YEARS FIVE YEARS    TOTAL
                                                                         (Dollars in thousands)
                                                                                    
Commercial                                                     $455,315   $178,145   $171,223   $804,683
Real estate - construction                                       67,819      6,624      1,342     75,785
                                                               --------   --------   --------   --------
    TOTAL                                                      $523,134   $184,769   $172,565   $880,468
                                                               ========   ========   ========   ========

                                                               Sensitivity to changes in interest rates

                                                                      PREDETERMINED    VARIABLE
                                                                          RATE          RATE

                                                                        (Dollars in thousands)

Due after one year but within five years                                  $ 74,273   $110,496
Due after five years                                                        59,295    113,270
                                                                          --------   --------
    TOTAL                                                                 $133,568   $223,766
                                                                          ========   ========




         Bancorp subsidiaries receive requests to renew maturing loans as a
normal part of business. Such requests are especially common with real estate
loans that are scheduled to mature before being fully amortized and with
commercial loans. The requests are reviewed by the subsidiary's loan committee
or by designated loan personnel, as appropriate, and may be approved, approved
with modifications, or denied. Required modifications may include, among other
items, a reduction in the loan balance, a change in the interest rate, an
increase in collateral, or the initiation of monthly principal payments.

         Table 5 indicates the contractual maturity of commercial loans and real
estate construction loans outstanding at December 31, 2001. Loans due after one
year are classified according to their sensitivity to changes in interest rates.

ASSET QUALITY

         Bancorp's subsidiaries record a provision for loan losses (provision)
in the Consolidated Statements of Earnings to provide for expected credit
losses. Actual losses on loans and leases are charged against the allowance for
loan losses (allowance), which is a reserve accumulated on the Consolidated
Balance Sheets through the provision. The recorded values of the loans and
leases actually removed from the Consolidated Balance Sheets are referred to as
charge-offs and, after netting out recoveries on previously charged-off assets,
become net charge-offs. Bancorp's policy is to charge-off loans when, in
management's opinion, collection of principal is in doubt. All loans charged-off
are subject to continuous review and concerted efforts are made to maximize
recovery.

         Management records the provision in amounts sufficient to result in an
allowance that will cover risks believed to be inherent in the loan portfolio of
each subsidiary. Management's evaluation in establishing the provision includes
such factors as historical loss and recovery experience, estimated future loss
for loans, known deterioration in loans, periodic external loan evaluations,
prevailing economic conditions that might have an impact on the portfolio, and
ratios of delinquent and nonaccrual loans. The evaluation is inherently
subjective as it requires material estimates, including the amounts and timing
of future cash flows expected to be received on impaired loans that may be
susceptible to significant change. The evaluation of these factors is completed
by a group of senior officers from the financial and lending areas.

         A slowing economy in the last half of 2001 negatively impacted asset
quality for much of the financial industry including Bancorp. Total
nonperforming assets, as shown in Table 6, increased 51.2% from $18,686,000 at
December 31,


                         TABLE 6 - NONPERFORMING ASSETS


                                                                December 31,

                                               2001       2000       1999       1998      1997
                                                            (Dollars in thousands)

                                                                          
Nonaccrual loans                             $24,628    $17,346    $11,283    $ 7,481    $ 7,845
Restructured loans                             1,291        265      2,244        691      2,447
Other real estate owned (OREO)                 2,338      1,075      1,707        221      1,150
                                             -------    -------    -------    -------    -------
    TOTAL NONPERFORMING ASSETS               $28,257    $18,686    $15,234    $ 8,393    $11,442
                                             =======    =======    =======    =======    =======
Nonperforming assets as a percent of total
  loans plus OREO                               0.98%      0.62%      0.50%      0.32%      0.49%

Accruing loans past due 90 days or more      $ 4,728    $ 2,414    $ 2,777    $ 2,923    $ 2,392




                FIRST FINANCIAL BANCORP   6   2001 ANNUAL REPORT


     TABLE 7 - SUMMARY OF ALLOWANCE FOR LOAN LOSSES AND SELECTED STATISTICS


                                                 2001       2000       1999        1998      1997
                                                               (Dollars in thousands)
                                                                          
Transactions in the allowances for loan losses:
Balance at January 1                            $39,349    $39,340    $34,800    $31,660    $25,803
Loans charged off
  Commercial                                     13,573      6,439      4,120      4,022      2,053
  Real estate - construction                          5         32          0          0         28
  Real estate - mortgage                          2,096      1,098        325        352        257
  Installment and other consumer financing        7,450      5,881      4,484      3,720      3,044
  Lease financing                                   508        194        432        293         57
                                                -------    -------    -------    -------    -------
      Total loans charged-off                    23,632     13,644      9,361      8,387      5,439

Recoveries of loans previously charged-off
  Commercial                                        766        620      2,340      1,541        684
  Real estate - construction                          0          0          0          0          0
  Real estate - mortgage                            549        191         79         99        142
  Installment and other consumer financing        1,440      1,474      1,114        800        786
  Lease financing                                    37         68         36         34         15
                                                -------    -------    -------    -------    -------
      Total recoveries                            2,792      2,353      3,569      2,474      1,627
                                                -------    -------    -------    -------    -------
      Net charge-offs                            20,840     11,291      5,792      5,913      3,812

Allowance acquired through mergers                1,462          0          0        806      3,013
Provision for discontinued product line               0          0      1,100          0          0
Provision for loan losses                        26,813     11,300      9,232      8,247      6,656
                                                -------    -------    -------    -------    -------
      BALANCE AT DECEMBER 31                    $46,784    $39,349    $39,340    $34,800    $31,660
                                                =======    =======    =======    =======    =======
Ratios
  Net charge-offs as a percent of:
    Average loans outstanding                      0.71%      0.37%      0.20%      0.24%      0.18%
    Provision                                     77.72%     99.92%     62.74%     71.70%     57.27%
    Allowance                                     44.55%     28.69%     14.72%     16.99%     12.04%
  Allowance as a percent of:
       year-end loans, net of unearned income      1.63%      1.31%      1.30%      1.31%      1.36%


             TABLE 8 - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES



                                                               DECEMBER 31,

                                         2001                       2000                        1999
                                                           (Dollars in thousands)
                                           PERCENT OF                 PERCENT OF                  PERCENT OF
                                            LOANS TO                   LOANS TO                    LOANS TO
Balance at end of              ALLOWANCE   TOTAL LOANS     ALLOWANCE  TOTAL LOANS     ALLOWANCE   TOTAL LOANS
period applicable to:          ---------   -----------    ----------  -----------     ---------   -----------
                                                                                
Commercial                     $ 17,313         28%        $  11,061      26%         $   8,221      25%
Real estate - construction          445          3%              376       3%               470       4%
Real estate - mortgage           10,710         47%            8,853      48%             8,798      48%
Installment and credit card      11,311         21%           11,399      21%            10,978      21%
Lease financing                     913          1%              756       2%               477       2%
Unallocated                       6,092         N/A            6,904      N/A            10,396      N/A
                               --------        ----        ---------     ----         ---------     ----
  TOTAL                        $ 46,784        100%        $  39,349     100%         $  39,340     100%
                               ========        ====        =========     ====         =========     ====





                                              1998                       1997
                                                  (Dollars in thousands)
                                                 PERCENT OF                 PERCENT OF
                                                  LOANS TO                   LOANS TO
Balance at end of                   ALLOWANCE   TOTAL LOANS     ALLOWANCE   TOTAL LOANS
period applicable to:               ---------   -----------     ---------   -----------
                                                                 
Commercial                         $    9,909       26%         $   8,202       24%
Real estate - construction                910        3%               246        3%
Real estate - mortgage                  5,395       49%             5,645       49%
Installment and credit card             9,750       21%             8,323       23%
Lease financing                           630        1%               483        1%
Unallocated                             8,206       N/A             8,761       N/A
                                   ----------      ----         ---------      ----
  TOTAL                            $   34,800      100%         $  31,660      100%
                                   ==========      ====         =========      ====



                   FIRST FINANCIAL BANCORP   7   2001 ANNUAL REPORT



2000, to $28,257,000 at year-end 2001. Net charge-offs increased to 0.71% from
0.37% of total average loans as shown in Table 7. During 2001, Bancorp increased
its provision for loan losses 137% to $26,813,000 from $11,300,000 in 2000. Even
with the issues previously discussed, Bancorp finished 2001 with a nonperforming
assets to ending loans ratio of 0.98%, which is in line with Bancorp's peers.
The allowance at December 31, 2001, was $46,784,000 or 1.63% of loans, net of
unearned income, which compares to $39,349,000 or 1.31% of loans, net of
unearned income, at December 31, 2000.

         The level of nonaccrual and restructured loans and leases is an
important element in assessing asset quality. Loans are classified as nonaccrual
when, in the opinion of management, collection of interest is doubtful. Loans
are classified as restructured when management, to protect its investment,
grants concessions to the debtor that it would not otherwise consider. Another
element associated with asset quality is Other Real Estate Owned (OREO). OREO
primarily represents properties acquired by Bancorp's subsidiaries through loan
defaults by customers. See Table 6 for a summary of Bancorp's nonaccrual and
restructured loans and OREO properties.

         In comparing December 31, 2001, with December 31, 2000, nonaccrual
loans increased $7,282,000, restructured loans increased $1,026,000, other real
estate owned increased $1,263,000, and accruing loans past due 90 days or more
increased $2,314,000.

         The increase in nonperforming assets is associated with the effects of
a slowing economy and does not consist of a concentration in any particular
industry. In the fourth quarter of 2001, Bancorp classified one agricultural
credit of approximately $6,900,000 primarily secured by real estate as
nonperforming. Overall, it is management's belief that the allowance for loan
losses is adequate to absorb estimated probable credit losses.

         Nonaccrual and restructured loans and leases and OREO are discussed or
summarized in Notes 1 and 9 of the Notes to Consolidated Financial Statements.

INVESTMENT SECURITIES

         Bancorp's investment securities increased $26,928,000 or 4.57% during
2001 to a balance of $616,490,000. Bancorp follows a conservative investment
policy, investing primarily for liquidity management purposes and interest rate
risk management.

         Securities issued by U.S. government agencies and corporations,
primarily the Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage
Corporation (FHLMC), Federal National Mortgage Association (FNMA), Student Loan
Marketing Association (SLMA), and Federal Farm Credit Bank represented 16.0% of
the investment portfolio at December 31, 2001. No structured notes were included
in the U.S. government agencies and corporations securities category at December
31, 2001. All U.S. government agencies and corporations securities were
classified as available-for-sale at December 31, 2001, and are available for
liquidity management purposes. Due to the government guarantees, either
expressed or implied, U.S. government agency and corporation obligations are
considered to have low credit risk and high liquidity.

         Investments in mortgage-backed securities (MBSs), including
collateralized mortgage obligations (CMOs), composed 53.5% of the investment
portfolio at December 31, 2001. MBSs represent participations in pools of
mortgage loans, the principal and interest payments of which are passed to the
security investors. MBSs are subject to prepayment risk, especially during
periods of decreasing interest rates. Prepayments of the underlying mortgage
loans may shorten the lives of the securities, thereby affecting yields to
maturity and market values. Bancorp invests primarily in MBSs issued by U.S.
government agencies and corporations, such as FHLMC, FNMA, and the Government
National Mortgage Association (GNMA). Such securities, because of government
agency guarantees, are considered to have low credit risk and high liquidity.
Accordingly, about 99.0% of Bancorp's MBSs are classified as available-for-sale.

         CMOs totaled $71,503,000 at December 31, 2001, all of which were
classified as available-for-sale. All of the CMOs held by Bancorp are rated AAA


                        TABLE 9 - INVESTMENT SECURITIES



                                                                         DECEMBER 31, 2001
                                                                               Maturing
                                                                 AFTER ONE BUT           AFTER FIVE BUT
                                       WITHIN ONE YEAR         WITHIN FIVE YEARS        WITHIN TEN YEARS          AFTER TEN YEARS
                                     AMOUNT        YIELD (1)   AMOUNT    YIELD (1)     AMOUNT      YIELD(1)     AMOUNT      YIELD(1)
                                                                        (Dollars in thousands)
                                                                                                  
HELD-TO-MATURITY
Mortgage-backed securities(2)       $       9      7.93%      $     510    6.46%      $    1,690     9.05%     $   1,142     8.09%
Obligations of state and other
  political subdivisions                2,075      9.45%         11,103    8.75%           3,358     9.01%         1,003     8.14%
                                    ---------                 ---------               ----------              ----------
      Total                         $   2,084      9.44%      $  11,613    8.65%      $    5,048     9.02%     $   2,145     8.11%
                                    =========      =====      =========    =====      ==========     =====     =========     =====
AVAILABLE-FOR-SALE
U.S. Treasury securities            $     102      4.92%
Securities of other U.S.
  government agencies
  and corporations                     30,522      5.41%      $  55,819    4.92%      $   11,750     6.64%     $     408     4.07%
Mortgage-backed securities(2)           3,950      6.55%         13,216    6.35%          36,501     4.81%       272,650     6.13%
Obligations of state and other
  political subdivisions                5,187      7.68%         25,240    8.05%          30,796     8.01%        67,904     7.66%
Other securities                        1,503      2.97%            273    7.29%             216     6.35%        39,563     6.24%
                                    ---------                 ---------               ----------              ----------
      Total                         $  41,264      5.71%      $  94,548    5.96%      $   79,263     6.33%    $  380,525     6.41%
                                    =========      =====      =========    =====      ==========     =====    ==========     =====


(1) Tax equivalent basis was calculated using a marginal federal income tax
    rate of 35.0%.
(2) 30.4% of the mortgage-backed securities maturing after five years are
    variable rate.


                FIRST FINANCIAL BANCORP   8   2001 ANNUAL REPORT




by Standard & Poor's Corporation or similar rating agencies. Bancorp does not
own any interest-only securities, principal-only securities, accrual bonds, or
inverse floaters.

         Securities of state and other political subdivisions composed 23.8% of
Bancorp's investment portfolio at December 31, 2001. The securities are
diversified as to states and issuing authorities within states, thereby
decreasing portfolio risk. About 88.0% of such investments at December 31, 2001,
were classified as available-for-sale.

         The remaining 6.70% of Bancorp's investment portfolio at December 31,
2001, termed "other securities," was primarily composed of stock ownership in
the Indianapolis and Cincinnati District Federal Home Loan Banks, the Federal
Reserve Bank, and in taxable obligations of state and other political
subdivisions.

         Table 9 sets forth the maturities of investment securities
held-to-maturity and investment securities available-for-sale as of December 31,
2001, and the average yields of such securities calculated on the basis of the
cost and effective yields weighted for the scheduled maturity of each security.
Tax equivalent adjustments, using a 35.0% rate, have been made in calculating
yields on tax-exempt obligations of state and other political subdivisions.

         At December 31, 2001, the market value of Bancorp's held-to-maturity
investment securities portfolio exceeded the carrying value by $657,000. The
available-for-sale investment securities are reported at their market value of
$595,600,000, as required by SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities." See Note 8 of the Notes to Consolidated
Financial Statements for additional information.

         Bancorp's federal funds sold and securities purchased under agreements
to resell decreased from $4,040,000 at December 31, 2000, to $3,381,000 at
December 31, 2001. Bancorp monitors this position as part of its asset/
liability management.

         Bancorp had not used off-balance-sheet derivative financial instruments
such as futures, forward contracts, option contracts, interest rate swaps, or
other financial instruments with similar characteristics as of December 31,
2001.

DEPOSITS AND BORROWINGS

         Bancorp's subsidiaries solicit deposits by offering a wide variety of
savings and transaction accounts, including checking accounts, regular savings
accounts, money market deposit accounts, and time deposits of various maturities
and rates. In 2000, Bancorp designated a chief deposit officer at each
affiliate. While banks have traditionally had chief lending officers, the
concept of a chief deposit officer is unique. The chief deposit officer at each
affiliate focuses on developing strategies to attract an appropriate deposit
mix, developing new deposit products, establishing deposit pricing in
conjunction with the asset/liability committee, and tracking and providing
feedback to senior management.

         Total deposits decreased $66,335,000 or 2.10% in 2001. Comparing
Bancorp's totals at December 31, 2001, and 2000, interest-bearing deposits
decreased $94,787,000 and noninterest-bearing demand deposits increased
$28,452,000.

         Table 10 shows the contractual maturity of time deposits of $100,000
and over that were outstanding at December 31, 2001. These deposits represented
only 8.25% of total deposits.

         Short-term borrowings decreased from $146,568,000 at December 31, 2000,
to $93,452,000 at December 31, 2001.

         Long-term borrowings increased $55,129,000 from $205,216,000 at the end
of 2000 to $260,345,000 at the end of 2001. The increase in long-term borrowings
is associated with ongoing asset/liability management strategies which take into
account the timing of maturities of all assets and liabilities among many other
factors. See Note 10 of the Notes to Consolidated Financial Statements for
additional information.

LIQUIDITY

         Liquidity management is the process by which Bancorp ensures that
adequate liquid funds are available for the corporation and its subsidiaries.
These funds are necessary in order for Bancorp and its subsidiaries to meet
financial commitments on a timely basis. These commitments include withdrawals
by depositors, funding credit obligations to borrowers, paying dividends to
shareholders, paying operating expenses, funding capital expenditures, and
maintaining deposit reserve requirements. Liquidity is monitored and closely
managed by the asset/liability committees at Bancorp's subsidiaries and by
Bancorp's holding company asset/liability committee.

         Liquidity may be used to fund capital expenditures. Capital
expenditures were $8,111,000 for 2001 and $5,461,000 for 2000. Remodeling is a
planned and ongoing process for the 114 offices/facilities of Bancorp's
subsidiaries. Routine capital expenditures planned for the year 2002 currently
total $2,500,000.

         Bancorp subsidiaries' source of funding is predominantly deposits
within each of their respective market areas. The deposit base is diversified
among individuals, partnerships, corporations, and public entities. This
diversification helps Bancorp avoid dependence on large concentrations of funds.

         Liquidity is derived primarily from core deposit growth, principal
payments received on loans, the sale and maturation of investment securities,
net cash provided by operating activities, and access to other funding sources.
The most stable source of liability-funded liquidity for both the long-term and
short-term is deposit growth and retention in the core deposit base. In
addition, Bancorp utilizes advances from the Federal Home Loan Bank as a funding
source. At December 31, 2001, total borrowings from the FHLB were $260,345,000.
Bancorp's bank subsidiaries have pledged certain mortgage loans and certain
investments to the FHLB. The total available remaining borrowing capacity from
the FHLB at December 31, 2001, was $325,880,000. The principal source of
asset-funded liquidity is investment securities classified as
available-for-sale, the market values of which totaled $595,600,000 at December
31, 2001, an increase of $30,838,000 or 5.46% over 2000. Securities classified
as held-to-maturity that are maturing within a short period of time can also be
a source of liquidity. Securities classified as held-to-maturity and that are
maturing in one year or less totaled $2,084,000 at December 31, 2001. In
addition, other types of assets-such as cash and due from banks, federal funds
sold and securities purchased under agreements to resell, and loans and
interest-bearing deposits with other banks maturing within one year-are sources
of liquidity.


                     TABLE 10 - MATURITIES OF TIME DEPOSITS
                      GREATER THAN OR EQUAL TO $100,000(*)

                                DECEMBER 31, 2001
                             (Dollars in thousands)
Maturing in
  3 months or less                                  $  126,614
  3 months to 6 months                                  62,483
  6 months to 12 months                                 43,317
  over 12 months                                        22,246
                                                    ----------
     TOTAL                                          $  254,660
                                                    ==========

(*)  All time deposits greater than or equal to $100,000 were
     in certificates of deposit.


                FIRST FINANCIAL BANCORP   9   2001 ANNUAL REPORT

                       TABLE 11 - MARKET RISK DISCLOSURE


                                                                                      Principal Amount Maturing In:
                                            2002           2003             2004         2005          2006         THEREAFTER

                                                                                              (Dollars in thousands)
                                                                                                
RATE SENSITIVE ASSETS
Fixed interest rate loans               $  298,444    $     134,213    $   115,661   $    89,738   $    83,327    $   416,700
  Average interest rate                       7.63%            8.78%          8.89%         8.88%         8.01%          7.78%
Variable interest rate loans               481,407          109,462         73,689        63,680        58,793        947,135
  Average interest rate                       6.82%            7.74%          7.76%         7.97%         8.05%          7.78%
Fixed interest rate securities              42,455           31,894         40,294        11,285        22,688        372,205
  Average interest rate                       5.38%            5.09%          4.88%         4.86%         5.70%          5.21%
Variable interest rate securities              893               --             --            --            --         94,776
  Average interest rate                       1.75%              --             --            --            --           4.77%
Other earning assets                        17,052               --             --            --            --             --
  Average interest rate                       1.76%              --             --            --            --             --

RATE SENSITIVE LIABILITIES
Noninterest-bearing checking               448,330               --             --            --            --             --
Savings and interest-bearing checking      112,868        1,015,811             --            --            --             --
  Average interest rate                       1.08%            1.08%            --            --            --             --
Time deposits                            1,140,153          236,084        102,887        12,269        13,882          2,809
  Average interest rate                       4.26%            4.45%          4.28%         5.72%         4.63%          2.57%
Fixed interest rate borrowings               4,634            1,200         16,500         5,000        19,908        213,103
  Average interest rate                       4.44%            4.96%          5.73%         6.82%         5.89%          5.26%
Variable interest rate borrowings           93,452               --             --            --            --             --
  Average interest rate                       1.58%              --             --            --            --             --






                                                      FAIR VALUE
                                            TOTAL  DECEMBER 31, 2001


                                                 
RATE SENSITIVE ASSETS
Fixed interest rate loans                $1,138,083    $1,165,515
  Average interest rate                        8.08%
Variable interest rate loans              1,734,166     1,741,066
  Average interest rate                        7.51%
Fixed interest rate securities              520,821       521,467
  Average interest rate                        5.20%
Variable interest rate securities            95,669        95,680
  Average interest rate                        4.74%
Other earning assets                         17,052        17,052
  Average interest rate                        1.76%

RATE SENSITIVE LIABILITIES
Noninterest-bearing checking                448,330       448,330
Savings and interest-bearing checking     1,128,679     1,128,679
  Average interest rate                        1.08%
Time deposits                             1,508,084     1,516,181
  Average interest rate                        4.31%
Fixed interest rate borrowings              260,345       263,210
  Average interest rate                        5.35%
Variable interest rate borrowings            93,452        93,452
  Average interest rate                        1.58%



         Certain restrictions exist regarding the ability of Bancorp's
subsidiaries to transfer funds to Bancorp (see Note 6 of the Notes to
Consolidated Financial Statements). Management is not aware of any other events
or regulatory requirements which, if implemented, are likely to have a material
effect on Bancorp's liquidity. Bancorp has secured a $25,000,000 line of credit
with another financial institution. This line provides additional liquidity for
Bancorp for various corporate activities. As of December 31, 2001, the
outstanding balance was $23,500,000. The outstanding balance of this line varies
throughout the year depending on Bancorp's cash needs. The average outstanding
balance for 2001 was $14,210,000.

INTEREST RATE SENSITIVITY

         Table 11 details the maturities and yields of interest-bearing
financial instruments at December 31, 2001, for the next five years and
thereafter. Also included with each category is the fair value of those
instruments. The values represent the contractual maturity of each instrument.
For loan instruments without contractual maturities, such as credit card loans,
management has allocated principal payments based upon historical trends of
payment activity. Where there is no set maturity, as in the case of some
interest-bearing liabilities, management has allocated the amounts based upon
its expectation of cash flows, incorporating internal core deposit studies, and
current expectations of customer behavior. For loans, securities, and
liabilities with contractual maturities, the table presents principal cash flows
and related weighted-average interest rates by contractual maturities.

         The data in Table 11 was aggregated by type of financial instrument
fixed and variable rate loans, fixed and variable rate investments, other
earning assets, fixed and variable rate deposits, and other fixed and variable
rate interest-bearing liabilities. In November of 2001, Bancorp's board of
directors approved a policy authorizing the use of certain derivative products
as a tool for the management of interest rate risk. Approved derivatives include
interest rate caps, floors, and swaps. These instruments will allow Bancorp to
meet the needs of its customers, yet reduce the interest rate risk associated
with certain transactions. Bancorp had not used interest rate swaps, interest
rate caps, or interest rate floors as of December 31, 2001. Therefore, data
concerning these instruments was not included in the table.

         The primary source of market risk for the financial instruments
presented is interest rate risk. That is, the risk that an adverse change in
market rates will adversely affect the market value of the instruments.
Generally, the longer the maturity, the higher the interest rate risk exposure.
While maturity information does not necessarily present all aspects of exposure,
it may provide an indication of where risks are prevalent.

         All banking institutions assume interest rate risk as an integral part
of normal operations. Managing and measuring interest rate risk is a dynamic,
multi-faceted process that ranges from reducing the exposure of Bancorp's net
interest margin to swings in interest rates, to assuring that there is
sufficient capital and liquidity to support future balance sheet growth. Bancorp
manages interest rate risk through the asset/liability committees of Bancorp's
subsidiaries. The asset/liability committees are comprised of bank officers from
various disciplines. Each subsidiary committee establishes policies and rates
which lead to the prudent investment of resources, the effective management of
risks associated with changing interest rates, the existence of adequate
liquidity, and the earning of an adequate return on shareholders' equity.

         Bancorp has a holding company asset/liability committee, made up of
representatives of various subsidiaries and disciplines, whose function is to
develop policies and guidelines for effective asset/liability management
throughout Bancorp's subsidiaries.


               FIRST FINANCIAL BANCORP   10   2001 ANNUAL REPORT




CAPITAL

         Total shareholders' equity at December 31, 2001, and 2000, was
$384,543,000 and $395,132,000, respectively. The decrease in shareholders'
equity for 2001 was primarily the result of increased stock repurchase activity.

         On January 25, 2000, the board of directors authorized Bancorp to
repurchase from time to time the number of common shares necessary to satisfy
any restricted stock awards or stock options that are granted from time to time
under the 1999 Stock Incentive Option Plan for Officers and Employees and the
1999 Stock Option Plan for Non-Employee Directors. The total number of shares
that can be repurchased over the life of the ten-year plans may not exceed
7,507,500 shares. Under this program, Bancorp repurchased 276,000 shares in
2001.

         On October 24, 2000, the board of directors authorized an additional
program to repurchase up to 5% (or approximately 2.3 million) of Bancorp's
common shares outstanding. This share repurchase program is for general
corporate purposes including future stock dividends. Under this program, Bancorp
repurchased 1,571,500 shares in 2001.

         On February 27, 2001, Bancorp's board of directors declared a 5% stock
dividend and a quarterly cash dividend of 15 cents per share for each
post-stock-dividend share. Both the stock dividend and the quarterly cash
dividend were distributed on April 2, 2001.

         The dividend payout ratio was 65.6%, 47.9%, and 50.8%, for 2001, 2000,
and 1999, respectively. The dividend payout is continually reviewed by
management and the board of directors.

         Bancorp has consistently maintained regulatory capital ratios at or
above the "well-capitalized" standards. For further detail on capital ratios,
see Note 12 of the Notes to Consolidated Financial Statements.

FORWARD-LOOKING STATEMENTS

         Certain statements contained in this report which are not statements of
historical fact constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act (the Act). In addition, certain
statements in future filings by Bancorp with the Securities and Exchange
Commission, in press releases, and in oral and written statements made by or
with the approval of Bancorp which are not statements of historical fact
constitute forward-looking statements within the meaning of the Act. Examples of
forward-looking statements include, but are not limited to, projections of
revenues, income or loss, earnings or loss per share, the payment or non-payment
of dividends, capital structure and other financial items, statements of plans
and objectives of Bancorp or its management or board of directors, and
statements of future economic performances and statements of assumptions
underlying such statements. Words such as "believes," "anticipates," "intends,"
and other similar expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such statements.

         Forward-looking statements involve risks and uncertainties which may
cause actual results to differ materially from those in such statements. Factors
that could cause actual results to differ from those discussed in the forward-
looking statements include, but are not limited to, the strength of the local
economies in which operations are conducted; the effects of and changes in
policies and laws of regulatory agencies; inflation, interest rates, market and
monetary fluctuations; technological changes; mergers and acquisitions; the
ability to increase market share and control expenses; the effect of changes in
accounting policies and practices, as may be adopted by the regulatory agencies
as well as the Financial Accounting Standards Board and the Securities and
Exchange Commission; the costs and effects of litigation and of unexpected or
adverse outcomes in such litigation; and the success of Bancorp at managing the
risks involved in the foregoing.

         Such forward-looking statements speak only as of the date on which such
statements are made, and Bancorp undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made to reflect the occurrence of unanticipated events.


               FIRST FINANCIAL BANCORP   11   2001 ANNUAL REPORT


                            STATISTICAL INFORMATION


                                                                                             (Unaudited)

                                                            2001                                 2000                      1999
                                          BALANCE         INTEREST       YIELD    BALANCE      INTEREST       YIELD      BALANCE
                                        Daily average balances and interest rates:  (Tax equivalent basis; dollars in thousands)
                                                                                                
EARNING ASSETS
  Loans (1)
    Commercial (2)                      $   792,568     $    73,399      9.26% $   788,668    $    81,048     10.28%  $   734,982
    Real estate (2)                       1,465,334         117,352      8.01%   1,586,313        126,170      7.95%    1,475,943
    Installment
      and other consumer                    616,714          58,162      9.43%     649,606         65,199     10.04%      603,730
    Lease financing (2)                      41,107           3,269      7.95%      46,924          3,694      7.87%       39,144
                                        -----------     -----------            -----------    -----------             -----------
      Total loans                         2,915,723         252,182      8.65%   3,071,511        276,111      8.99%    2,853,799
  Investment securities(3)
    Taxable                                 441,513          27,285      6.18%     407,564         28,041      6.88%      380,520
    Tax-exempt (2)                          149,704          11,900      7.95%     162,257         13,091      8.07%      173,607
                                        -----------     -----------            -----------    -----------             -----------
      Total investment securities (3)       591,217          39,185      6.63%     569,821         41,132      7.22%      554,127
  Interest-bearing deposits
    with other banks                         14,972             596      3.98%      11,203            702      6.27%        6,575
  Federal funds sold and securities
    purchased under agreements
    to resell                                59,470           2,187      3.68%       4,157            257      6.18%        7,430
                                        -----------     -----------            -----------    -----------             -----------
  TOTAL EARNING ASSETS                    3,581,382         294,150      8.21%   3,656,692        318,202      8.70%    3,421,931
NONEARNING ASSETS
  Allowance for loan losses                 (40,758)                               (40,360)                               (37,303)
  Cash and due from banks                   133,644                                141,951                                131,863
  Accrued interest and other assets         183,103                                186,295                                169,675
                                        -----------                            -----------                            -----------
  TOTAL ASSETS                          $ 3,857,371                            $ 3,944,578                            $ 3,686,166
                                        ===========                            ===========                            ===========
INTEREST-BEARING LIABILITIES
  Deposits
    Interest-bearing demand             $   299,461           6,065      2.03% $   275,048          6,597      2.40%  $   288,865
    Savings                                 766,400          15,393      2.01%     766,886         19,002      2.48%      797,396
    Time                                  1,646,954          88,892      5.40%   1,603,214         91,153      5.69%    1,438,145
                                        -----------     -----------            -----------    -----------             -----------
      Total interest-bearing deposits     2,712,815         110,350      4.07%   2,645,148        116,752      4.41%    2,524,406
  Borrowed funds
    Short-term borrowings                    75,240           3,015      4.01%     316,537         18,939      5.98%      251,273
    Long-term borrowings                    243,868          13,415      5.50%     166,290          9,733      5.85%      134,691
                                        -----------     -----------            -----------    -----------             -----------
      Total borrowed funds                  319,108          16,430      5.15%     482,827         28,672      5.94%      385,964
                                        -----------     -----------            -----------    -----------             -----------
  TOTAL INTEREST-BEARING LIABILITIES      3,031,923         126,780      4.18%   3,127,975        145,424      4.65%    2,910,370
NONINTEREST-BEARING LIABILITIES
  Noninterest-bearing demand deposits       398,464                                403,219                                379,276
  Other liabilities                          31,194                                 33,852                                 30,503
  SHAREHOLDERS' EQUITY                      395,790                                379,532                                366,017
                                        -----------     -----------            -----------    -----------             -----------
  TOTAL LIABILITIES AND
    SHAREHOLDERS' EQUITY                $ 3,857,371                            $ 3,944,578                            $ 3,686,166
                                        ===========                            ===========                            ===========
  NET INTEREST INCOME AND
    INTEREST RATE SPREAD                                $   167,370      4.03%                $   172,778      4.05%
                                                        ===========      =====                ===========      ====
  NET INTEREST MARGIN                                                    4.67%                                 4.72%
                                                                         =====                                 =====




                         STATISTICAL INFORMATION
                                                   (Unaudited)

                                                        1999
                                             INTEREST           YIELD
                                        Daily average balances and interest rates:
                                       (Tax equivalent basis; dollars in thousands)
                                                       
EARNING ASSETS
  Loans (1)
    Commercial (2)                         $    69,774          9.49%
    Real estate (2)                            116,126          7.87%
    Installment
      and other consumer                        59,324          9.83%
    Lease financing (2)                          2,796          7.14%
                                           -----------
      Total loans                              248,020          8.69%
  Investment securities(3)
    Taxable                                     23,451          6.16%
    Tax-exempt (2)                              14,137          8.14%
                                           -----------
      Total investment securities (3)           37,588          6.78%
  Interest-bearing deposits
    with other banks                               331          5.03%
  Federal funds sold and securities
    purchased under agreements
    to resell                                      325          4.37%
                                           -----------
  TOTAL EARNING ASSETS                         286,264          8.37%
NONEARNING ASSETS
  Allowance for loan losses
  Cash and due from banks
  Accrued interest and other assets

  TOTAL ASSETS

INTEREST-BEARING LIABILITIES
  Deposits
    Interest-bearing demand                      5,820       2.01%
    Savings                                     18,845       2.36%
    Time                                        72,887       5.07%
                                           -----------
      Total interest-bearing deposits           97,552       3.86%
  Borrowed funds
    Short-term borrowings                       12,365       4.92%
    Long-term borrowings                         7,277       5.40%
                                           -----------
      Total borrowed funds                      19,642       5.09%
                                           -----------
  TOTAL INTEREST-BEARING LIABILITIES           117,194       4.03%
NONINTEREST-BEARING LIABILITIES
  Noninterest-bearing demand deposits
  Other liabilities
  SHAREHOLDERS' EQUITY
                                           -----------
  TOTAL LIABILITIES AND
    SHAREHOLDERS' EQUITY

  NET INTEREST INCOME AND
    INTEREST RATE SPREAD                   $   169,070       4.34%
                                           ===========       =====
  NET INTEREST MARGIN                                        4.94%
                                                             =====


(1) Nonaccrual loans are included in average loan balances and loan fees are
    included in interest income.
(2) Interest income on tax-exempt investments and on certain tax-exempt loans
    and leases has been adjusted to a taxable equivalent basis using a marginal
    federal income tax rate of 35.0%.
(3) Includes both investment securities held-to-maturity and investment
    securities available-for-sale.



                   FIRST FINANCIAL BANCORP   12   2001 ANNUAL REPORT








                                     CONSOLIDATED BALANCE SHEETS
                                                                                         DECEMBER 31,

                                                                                    2001             2000
                                                                                    (Dollars in thousands)
                                                                                          
ASSETS
  Cash and due from banks                                                        $   211,130    $   182,058
  Interest-bearing deposits with other banks                                          13,671          3,248
  Federal funds sold and securities purchased under agreements to resell               3,381          4,040
  Investment securities held-to-maturity
         (market value of $21,547 at December 31, 2001;
                       $25,433 at December 31, 2000)                                  20,890         24,800
  Investment securities available-for-sale, at market value
         (cost of $586,946 at December 31, 2001;
               $561,502 at December 31, 2000)                                        595,600        564,762
  Loans
    Commercial                                                                       804,683        787,436
    Real estate - construction                                                        75,785         97,571
    Real estate - mortgage                                                         1,346,235      1,438,339
    Installment                                                                      588,549        618,489
    Credit card                                                                       22,846         24,182
    Lease financing                                                                   36,139         46,068
                                                                                 -----------    -----------
         Total loans                                                               2,874,237      3,012,085
    Less
       Unearned income                                                                 1,988          4,019
       Allowance for loan losses                                                      46,784         39,349
                                                                                 -----------    -----------
         Net loans                                                                 2,825,465      2,968,717
  Premises and equipment                                                              60,575         58,466
  Goodwill                                                                            27,379         28,860
  Other intangibles                                                                    8,842          8,878
  Deferred income taxes                                                                    0            691
  Accrued interest and other assets                                                   87,861         87,992
                                                                                 -----------    -----------
         TOTAL ASSETS                                                            $ 3,854,794    $ 3,932,512
                                                                                 ===========    ===========
LIABILITIES
  Deposits
    Noninterest-bearing                                                          $   448,330    $   419,878
    Interest-bearing                                                               2,636,763      2,731,550
                                                                                 -----------    -----------
         Total deposits                                                            3,085,093      3,151,428
  Short-term borrowings
    Federal funds purchased and securities sold under agreements to repurchase        67,641         53,581
    Federal Home Loan Bank borrowings                                                      0         85,500
    Other                                                                             25,811          7,487
                                                                                 -----------    -----------
         Total short-term borrowings                                                  93,452        146,568
  Federal Home Loan Bank long-term borrowings                                        260,345        205,216
  Deferred income taxes payable                                                        1,388              0
  Accrued interest and other liabilities                                              29,973         34,168
                                                                                 -----------    -----------
         Total liabilities                                                         3,470,251      3,537,380

SHAREHOLDERS' EQUITY
  Common stock -- no par value
    Authorized -- 160,000,000 shares
    Issued -- 48,570,346 shares in 2001
              46,927,736 shares in 200                                               396,631        374,336
  Retained earnings                                                                   18,244         36,225
  Accumulated comprehensive income                                                     5,348          1,955
  Restricted stock awards                                                             (2,563)          (866)
  Treasury stock, at cost, 1,970,411 and 940,610 shares                              (33,117)       (16,518)
                                                                                 -----------    -----------
         TOTAL SHAREHOLDERS' EQUITY                                                  384,543        395,132
                                                                                 -----------    -----------
         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                              $ 3,854,794    $ 3,932,512
                                                                                 ===========    ===========


See Notes to Consolidated Financial Statements.



               FIRST FINANCIAL BANCORP   13   2001 ANNUAL REPORT





                                      CONSOLIDATED STATEMENTS OF EARNINGS
                                                                                         YEAR ENDED DECEMBER 31,

                                                                                2001          2000             1999
                                                                           (Dollars in thousands, except per share data)
                                                                                                 
INTEREST INCOME
  Loans, including fees                                                    $    251,951   $    275,804    $    247,733
  Investment securities
    Taxable                                                                      27,285         28,041          23,451
    Tax-exempt                                                                    7,726          8,499           9,178
                                                                           ------------   ------------    ------------
      Total investment securities interest                                       35,011         36,540          32,629
  Interest-bearing deposits with other banks                                        596            702             331
  Federal funds sold and securities purchased under agreements to resell          2,187            257             325
                                                                           ------------   ------------    ------------
      TOTAL INTEREST INCOME                                                     289,745        313,303         281,018
INTEREST EXPENSE
  Deposits                                                                      110,350        116,752          97,552
  Short-term borrowings                                                           3,015         18,939          12,365
  Long-term borrowings                                                           13,415          9,733           7,277
                                                                           ------------   ------------    ------------
      TOTAL INTEREST EXPENSE                                                    126,780        145,424         117,194
                                                                           ------------   ------------    ------------
      NET INTEREST INCOME                                                       162,965        167,879         163,824
  Provision for loan losses                                                      26,813         11,300           9,232
                                                                           ------------   ------------    ------------
      NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                       136,152        156,579         154,592
NONINTEREST INCOME
  Service charges on deposit accounts                                            20,348         18,786          16,629
  Trust revenues                                                                 14,769         14,230          13,410
  Gains from sales of mortgage loans                                              2,929          1,018           2,993
  Investment securities gains                                                       302             39              50
  Other                                                                          15,894         14,328          10,684
                                                                           ------------   ------------    ------------
      TOTAL NONINTEREST INCOME                                                   54,242         48,401          43,766
NONINTEREST EXPENSES
  Salaries and employee benefits                                                 65,061         63,606          61,614
  Net occupancy                                                                   7,475          7,402           7,019
  Furniture and equipment                                                         6,332          6,374           6,256
  Data processing                                                                 7,254          8,427           7,545
  Deposit insurance                                                                 602            542             551
  State taxes                                                                     1,913          2,432           2,025
  Amortization of intangibles                                                     2,650          3,268           3,674
  Restructuring charge                                                                0           (353)          6,930
  Other                                                                          33,667         26,320          26,121
                                                                           ------------   ------------    ------------
      TOTAL NONINTEREST EXPENSES                                                124,954        118,018         121,735
                                                                           ------------   ------------    ------------
      INCOME BEFORE INCOME TAXES                                                 65,440         86,962          76,623
  Income tax expense                                                             22,131         28,740          26,300
                                                                           ------------   ------------    ------------
      NET EARNINGS                                                         $     43,309   $     58,222    $     50,323
                                                                           ============   ============    ============
NET EARNINGS PER SHARE - BASIC                                             $       0.91   $       1.19    $       1.02
                                                                           ============   ============    ============
NET EARNINGS PER SHARE - DILUTED                                           $       0.91   $       1.19    $       1.02
                                                                           ============   ============    ============
AVERAGE SHARES OUTSTANDING - BASIC                                           47,427,921     48,775,547      49,191,294
                                                                           ============   ============    ============
AVERAGE SHARES OUTSTANDING - DILUTED                                         47,479,315     48,862,287      49,335,071
                                                                           ============   ============    ============


See Notes to Consolidated Financial Statements.


               FIRST FINANCIAL BANCORP   14   2001 ANNUAL REPORT





                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                    YEAR ENDED DECEMBER 31,

                                                                                                 2001         2000          1999
                                                                                                     (Dollars in thousands)
                                                                                                               
OPERATING ACTIVITIES
  Net earnings                                                                                $  43,309    $  58,222    $  50,323
  Adjustments to reconcile net earnings to net cash provided by operating activities
    Provision for loan losses                                                                    26,813       11,300        9,232
    Provision for depreciation and amortization                                                   8,797        9,707        9,196
    Net amortization of premiums and accretion of discounts
      on investment securities                                                                       12         (528)          83
    Deferred income taxes                                                                            79        2,175        2,059
    Realized gains on investment securities                                                        (302)         (39)         (50)
    Originations of mortgage loans held for sale                                               (186,571)    (171,012)    (226,475)
    Gains from sales of mortgage loans held for sale                                             (2,929)      (1,018)      (2,993)
    Proceeds from sale of mortgage loans held for sale                                          187,448      171,161      227,534
    Increase in cash surrender value of life insurance                                           (1,775)      (6,467)     (17,168)
    Decrease (increase) in interest receivable                                                    6,527       (3,031)      (4,082)
    Decrease (increase) in prepaid expenses                                                         530         (881)       1,276
    Increase (decrease) in accrued expenses                                                         660       (3,146)         351
    (Decrease) increase in interest payable                                                      (5,536)       3,986          311
    Other                                                                                           318       (3,589)       2,646
                                                                                              ---------    ---------    ---------
         Net cash provided by operating activities                                               77,380       66,840       52,243
INVESTING ACTIVITIES
  Proceeds from sales of investment securities available-for-sale                                     0            0       13,520
  Proceeds from calls, paydowns, and maturities of investment securities available-for-sale     219,864       58,858      159,916
  Purchases of investment securities available-for-sale                                        (245,279)     (79,144)    (135,915)
  Proceeds from calls, paydowns, and maturities of investment securities held-to-maturity        12,085       11,773       12,215
  Purchases of investment securities held-to-maturity                                            (7,910)      (4,365)      (1,901)
  Net (increase) decrease in interest-bearing deposits with other banks                         (10,423)       5,619       (6,269)
  Net decrease in federal funds sold and
    securities purchased under agreements to resell                                                 659        1,581        3,033
  Net decrease (increase) in loans and leases                                                   108,922      (28,494)    (393,706)
  Proceeds from disposal of other real estate owned                                               1,773        2,882          622
  Recoveries from loans and leases previously charged-off                                         2,792        2,353        3,569
  Purchases of premises and equipment                                                            (8,111)      (5,461)      (8,422)
                                                                                              ---------    ---------    ---------
         Net cash provided by (used in) investing activities                                     74,372      (34,398)    (353,338)
FINANCING ACTIVITIES
  Net (decrease) increase in total deposits                                                     (66,335)     160,215      119,146
  Net (decrease) increase in short-term borrowings                                              (53,116)    (235,550)     227,054
  Proceeds from long-term borrowings                                                             55,129       43,417       41,022
  Cash dividends                                                                                (28,400)     (27,901)     (25,570)
  Purchase of common stock                                                                      (30,057)     (16,518)           0
  Proceeds from exercise of stock options                                                            99          116          780
                                                                                              ---------    ---------    ---------
         NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                   (122,680)     (76,221)     362,432
                                                                                              ---------    ---------    ---------
         INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                        29,072      (43,779)      61,337
  Cash and cash equivalents at beginning of year                                                182,058      225,837      164,500
                                                                                              ---------    ---------    ---------
         CASH AND CASH EQUIVALENTS AT END OF YEAR                                             $ 211,130    $ 182,058    $ 225,837
                                                                                              =========    =========    =========
SUPPLEMENTAL DISCLOSURES
  Interest paid                                                                               $ 132,316    $ 141,438    $ 116,884
                                                                                              =========    =========    =========
  Income taxes paid                                                                           $  24,839    $  31,233    $  23,080
                                                                                              =========    =========    =========
  Recognition of deferred tax (liabilities) assets attributable to SFAS No. 115               $  (2,000)   $  (5,142)   $   6,995
                                                                                              =========    =========    =========
  Acquisition of other real estate owned through foreclosure                                  $   3,263    $   2,423    $   2,252
                                                                                              =========    =========    =========
  Issuance of restricted stock awards                                                         $   2,826    $     773    $     174
                                                                                              =========    =========    =========
  Securitization of loans                                                                     $       0    $  40,737    $       0
                                                                                              =========    =========    =========


See Notes to Consolidated Financial Statements.



               FIRST FINANCIAL BANCORP   15   2001 ANNUAL REPORT





                                                  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                                     COMMON         COMMON                     ACCUMULATED    RESTRICTED      TREASURY
                                     STOCK          STOCK         RETAINED    COMPREHENSIVE     STOCK           STOCK
                                     SHARES         AMOUNT        EARNINGS        INCOME        AWARDS          SHARES

                                                                                               (Dollars in thousands)
                                                                                            
Balances at December 31, 1998      42,657,815    $   306,709    $    50,160    $     4,949    $      (408)      (118,638)
Net earnings                                                         50,323
Unrealized holding losses on
  securities available for sale
  arising during the period                                                        (11,347)
Total comprehensive income
Cash dividends declared
  (Bancorp - $0.54 per share;
  SRFC - $4.75 per share;
  HBI - $1.50 per share)                                            (25,570)
Exercise of stock options,
  net of shares purchased               1,331           (951)                                                     65,725
10% stock dividend                  4,213,712         67,700        (69,009)                                      45,313
Restricted stock awards                (3,751)           (11)                                        (174)         7,600
Amortization of restricted
  stock awards                                                                                        168
                                   ----------     ----------    -----------    -----------    -----------    -----------
Balances at December 31, 1999      46,869,107        373,447          5,904    $    (6,398)          (414)             0

Net earnings                                                         58,222
Unrealized holding losses on
  securities available for sale
  arising during the period                                                          8,353
Total comprehensive income
Cash dividends declared
  (Bancorp - $0.57 per share)                                       (27,901)
Purchase of common stock                                                                                        (940,500)
Exercise of stock options,
  net of shares purchased              16,729            116
Restricted stock awards                41,900            773                                         (773)          (110)
Amortization of restricted
  stock awards                                                                                        321
                                   ----------     ----------    -----------    -----------    -----------    -----------
Balances at December 31,2000       46,927,736        374,336         36,225          1,955           (866)      (940,610)

Net earnings                                                         43,309
Unrealized holding losses on
  securities available for sale
  arising during the period                                                          3,393
Total comprehensive income
Cash dividends declared
  (Bancorp - $0.60 per share)                                       (28,400)
Purchase of common stock                                                                                      (1,847,500)
Exercise of stock options,
  net of shares purchased                               (105)                                                     12,603
5% stock dividend                   1,646,021         22,348        (32,890)                                     637,004
Restricted stock awards                (3,411)            52                                       (2,826)       168,092
Amortization of restricted
  stock awards                                                                                      1,129
                                   ----------     ----------    -----------    -----------    -----------    -----------
Balances at December 31, 2001      48,570,346    $   396,631    $    18,244    $     5,348    $    (2,563)    (1,970,411)
                                   ==========    ===========    ===========    ===========    ===========     ==========





                                                  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                                     TREASURY
                                       STOCK
                                       AMOUNT         TOTAL


                                           
Balances at December 31, 1998       $    (3,145)   $   358,265
Net earnings                                            50,323
Unrealized holding losses on
  securities available for sale
  arising during the period                            (11,347)
                                                   -----------
Total comprehensive income                              38,976
Cash dividends declared
  (Bancorp - $0.54 per share;
  SRFC - $4.75 per share;
  HBI - $1.50 per share)                               (25,570)
Exercise of stock options,
  net of shares purchased                 1,731            780
10% stock dividend                        1,265            (44)
Restricted stock awards                     149            (36)
Amortization of restricted
  stock awards                                             168
                                    -----------    -----------
Balances at December 31, 1999       $         0    $   372,539

Net earnings                                            58,222
Unrealized holding losses on
  securities available for sale
  arising during the period                              8,353
                                                   -----------
Total comprehensive income                              66,575
Cash dividends declared
  (Bancorp - $0.57 per share)                          (27,901)
Purchase of common stock                (16,515)       (16,515)
Exercise of stock options,
  net of shares purchased                                  116
Restricted stock awards                      (3)            (3)
Amortization of restricted
  stock awards                                             321
                                    -----------    -----------
Balances at December 31,2000            (16,518)       395,132

Net earnings                                            43,309
Unrealized holding losses on
  securities available for sale
  arising during the period                              3,393
                                                   -----------
Total comprehensive income                              46,702
Cash dividends declared
  (Bancorp - $0.60 per share)                          (28,400)
Purchase of common stock                (30,057)       (30,057)
Exercise of stock options,
  net of shares purchased                   204             99
5% stock dividend                        10,542              0
Restricted stock awards                   2,712            (62)
Amortization of restricted
  stock awards                                           1,129
                                    -----------    -----------
Balances at December 31, 2001       $   (33,117)   $   384,543
                                    ===========    ===========


See Notes to Consolidated Financial Statements.



               FIRST FINANCIAL BANCORP   16   2001 ANNUAL REPORT



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


         Basis of presentation - The consolidated financial statements of First
Financial Bancorp. (Bancorp), a financial holding company, principally serving
western Ohio, Indiana, northern Kentucky and southern Michigan, include the
accounts and operations of Bancorp and its wholly owned subsidiaries. All
significant intercompany transactions and accounts have been eliminated in
consolidation. The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of management's
estimates. Interest on loans, securities, and other earning assets is recognized
primarily on the accrual basis. Intangible assets arising from the acquisition
of subsidiaries are being amortized over varying periods, none of which exceeds
25 years. Core deposit intangibles are being amortized over varying periods,
none of which exceeds 10 years.

         Investment securities - Statement of Financial Accounting Standards
(SFAS) No. 115 classifies debt and equity securities in three categories:
trading, held-to-maturity, and available-for-sale.

         Management determines the appropriate classification of debt securities
at the time of purchase and reevaluates such designation as of each balance
sheet date. Debt securities are classified as held-to-maturity when Bancorp has
the positive intent and ability to hold the securities to maturity.
Held-to-maturity securities are stated at amortized cost. Debt securities not
classified as held-to-maturity are classified as available-for-sale.
Available-for-sale securities are stated at aggregate fair value, with the
unrealized gains and losses, net of tax, reported as a separate component of
shareholders' equity.

         The amortized cost of debt securities classified as held-to-maturity or
available-for-sale is adjusted for amortization of premiums and accretion of
discounts to maturity, or in the case of mortgage-backed securities, over the
estimated life of the security. Such amortization is included in interest income
from investments. Interest and dividends are included in interest income from
investments. Realized gains and losses, and declines in value judged to be other
than temporary, are included in investment securities gains (losses). The cost
of securities sold is based on the specific identification method.

         Loans - Loan origination and commitment fees and certain direct loan
origination costs are deferred, and the net amount amortized as an adjustment to
the related loan's yield. The accrual of interest income is discontinued when
the collection of a loan or interest, in whole or in part, is doubtful. This
applies generally to all loans, including impaired loans. When interest accruals
are suspended, interest income accrued in the current period is reversed and
interest accrued in the prior year is charged to the allowance for loan losses.

         Mortgages held for sale are reported at the lower of cost or aggregate
market value primarily as determined by outstanding commitments from investors.
Capitalized mortgage servicing rights (MSRs) are evaluated for impairment based
on the fair value of those rights, using a disaggregated approach. MSRs are
amortized on an accelerated basis over the estimated period of net servicing
revenue.

         Allowance for loan losses - The level of the allowance for loan losses
(allowance) is based upon management's evaluation of the loan and lease
portfolios, past loan loss experience, known and inherent risks in the
portfolio, adverse situations that may affect the borrower's ability to repay
(including the timing of future payments), the estimated value of any underlying
collateral, composition of the loan portfolio, economic conditions, and other
pertinent factors. This evaluation is inherently subjective as it requires
material estimates including the amounts and timing of future cash flows
expected to be received on impaired loans that may be susceptible to significant
change. The level maintained is believed by management to be adequate to cover
losses inherent in the portfolio. The allowance is increased by provisions
charged to expense and decreased by charge-offs, net of recoveries of amounts
previously charged-off.

         Lease financing - Bancorp principally uses the finance method of
accounting for direct lease contracts. Under this method of accounting, a
receivable is recorded for the total amount of lease payments due and estimated
residual values. Lease income, represented by the excess of the total contract
receivable plus estimated equipment residual value over the cost of the related
equipment, is recorded over the terms of the leases at a level rate of return on
the unrecovered net investment.

         Premises and equipment - Premises and equipment are stated at cost,
less accumulated depreciation and amortization. Depreciation and amortization
are computed principally on the straight-line method over the estimated useful
lives of the assets. Maintenance and repairs are charged to operations as
incurred.

         Other real estate owned - Other real estate owned represents properties
acquired by Bancorp's subsidiaries through loan defaults by customers. The
property is recorded at the lower of cost or fair value minus estimated costs to
sell at the date acquired. Subsequently, the property is valued at the lower of
the amount recorded when the property was placed into other real estate owned or
fair value minus estimated costs to sell based on periodic valuations performed
by management. An allowance for losses on other real estate owned may be
maintained for subsequent valuation adjustments on a specific property basis.
Any gains or losses realized at the time of disposal are reflected in income.

         Income taxes - Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.

         Bancorp and its subsidiaries file a consolidated federal income tax
return. Each subsidiary provides for income taxes on a separate return basis,
and remits to Bancorp amounts determined to be currently payable.

         Earnings per share - Basic net income per common share is computed by
dividing net income applicable to common stock by the weighted average number of
shares of common stock outstanding during the period. Diluted net income per
common share is computed by dividing net income applicable to common stock by
the weighted average number of shares, nonvested stock, and dilutive common
stock equivalents outstanding during the period. Common stock equivalents
consist of common stock issuable under the assumed exercise of stock options
granted under the Bancorp's stock plans, using the treasury stock method.

         Cash flow information - For purposes of the statement of cash flows,
Bancorp considers cash and due from banks as cash and cash equivalents.

         Capital - During 2001, Bancorp issued a 5% stock dividend. All share
amounts presented in the financial statements have been adjusted to reflect
these transactions.

         Reporting comprehensive income - Comprehensive income is defined as the
change in equity of a business enterprise during a period from transactions and
other events and circumstances from nonowner sources.

         Disclosure about segments and related information - Bancorp operates as
one community banking segment in contiguous geographic markets.

         Derivative instruments - SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," was released in June 1998, and is effective
for all fiscal quarters of fiscal years beginning after January 1, 2001. SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities.

         Goodwill - SFAS No. 141, "Business Combination" and No. 142, "Goodwill
and Other Intangible Assets" were issued in June of 2001, and are effective for
fiscal years beginning after December 15, 2001. Under the new




               FIRST FINANCIAL BANCORP   17   2001 ANNUAL REPORT





rules, goodwill and intangible assets deemed to have indefinite lives, if any,
will no longer be amortized but will be subject to annual impairment tests in
accordance with the Statements. Other intangible assets will continue to be
amortized over their useful lives. Bancorp will apply the new rules on
accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. Application of the nonamortization provisions of the Statement
is expected to result in an increase in net income of approximately $1,172,000
($0.02 per share) for 2002. During 2002, Bancorp will perform the first of the
required impairment tests of goodwill and intangible assets with indefinite
lives, if any, as of January 1, 2002. The effect of these tests on the earnings
and financial position of Bancorp has not yet been determined, but is not
anticipated to be material.

         Reclassifications - Certain reclassifications of prior years' amounts
have been made to conform to current year presentation. Such reclassifications
had no effect on net earnings.



            NOTE 2 - RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS

         Bancorp's subsidiaries are required to maintain average reserve
balances either in the form of vault cash or reserves held on deposit with the
Federal Reserve Bank, Federal Home Loan Bank, or in pass-through reserve
accounts with correspondent banks. The average amounts of these required reserve
balances for 2001 and 2000 were approximately $26,221,000 and $25,181,000,
respectively.

                         NOTE 3 - BUSINESS COMBINATIONS

Bancorp consummated the following business combinations in 2001 and 1999:




                                           ACQUISITION                                             SHARES      PURCHASE
BUSINESS COMBINATIONS                          DATE              ASSETS         DEPOSITS           ISSUED       PRICE
                                                                      (Dollars in thousands)
                                                                                                
Purchase transactions
  FIRST COMMUNITY BRANCHES                DECEMBER 31, 2001   $    31,912     $     11,110                        PAR
Pooling-of-interests
  Sand Ridge Financial Corporation        June 1, 1999            591,325          516,413        5,114,878
  Hebron Bancorp, Inc.                    June 1, 1999            110,089           94,624        1,222,599



         On December 31, 2001, Bancorp purchased certain assets and assumed
certain liabilities of a division of Blue River Bancshares, Inc. operating under
the name First Community Bank of Fort Wayne, Indiana (First Community). This
division has two branch locations in Fort Wayne. Since consummation of the
merger, these branches are operating as part of Bancorp's Community First Bank &
Trust affiliate. The merger was accounted for using the purchase method of
accounting; and, accordingly, the consolidated financial statements included
First Community's results of operations from the date of acquisition.


                            NOTE 4 - LEASE FINANCING



Leases included in the loan portfolio at December 31 were composed as follows:


                                                2001          2000
                                               (Dollars in thousands)

Direct financing                             $  21,269     $  30,804
Leveraged                                          557           734
                                             ---------     ---------
Net rentals receivable                          21,826        31,538
Estimated residual value of leased assets       18,494        21,317
Less unearned income                             4,181         6,787
                                             ---------     ---------
  Investment in leases, net                  $  36,139     $  46,068
                                             =========     =========

Direct financing lease payments receivable as of December 31, 2001, for the
next five years and thereafter are as follows:

                                        DIRECT FINANCING LEASES
                                         (Dollars in thousands)


                     2002                     $     9,091
                     2003                           6,528
                     2004                           3,832
                     2005                           1,386
                     2006                             404
                     Thereafter                        28




                   FIRST FINANCIAL BANCORP   18   2001 ANNUAL



                        NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment at December 31 were summarized as follows:

                                                   2001              2000
                                                   (Dollars in thousands)

       Land and land improvements                $   14,513     $   12,360
       Buildings                                     54,934         54,618
       Furniture and fixtures                        42,498         43,732
       Leasehold improvements                         5,624          4,242
       Construction in progress                       1,041            580
                                                 ----------     ----------
                                                    118,610        115,532
       Less accumulated depreciation
          and amortization                           58,035         57,066
                                                 ----------     ----------
            TOTAL                                $   60,575     $   58,466
                                                 ==========     ==========


       NOTE 6 - RESTRICTIONS ON SUBSIDIARY DIVIDENDS, LOANS, OR ADVANCES

         Dividends paid by Bancorp are mainly provided by dividends from its
subsidiaries. However, certain restrictions exist regarding the ability of these
subsidiaries to transfer funds to Bancorp in the form of cash dividends, loans,
or advances. The approval of the subsidiaries' respective primary federal
regulators is required for Bancorp's subsidiaries to pay dividends in excess of
regulatory limitations. As of December 31, 2001, Bancorp's subsidiaries had
retained earnings of $150,234,000 of which $12,352,000 was available for
distribution to Bancorp as dividends without prior regulatory approval.

           NOTE 7 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

         In the normal course of business, Bancorp offers a variety of financial
instruments with off-balance-sheet risk to its customers to aid them in meeting
their requirements for liquidity and credit enhancement. These financial
instruments include standby letters of credit and commitments outstanding to
extend credit. Generally accepted accounting principles do not require these
financial instruments to be recorded in the consolidated balance sheets,
statements of earnings, shareholders' equity, or cash flows. However, a
discussion of these instruments follows.

         Bancorp's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for standby letters of credit and
commitments outstanding to extend credit is represented by the contractual
amounts of those instruments. Bancorp uses the same credit policies in making
commitments and conditional obligations as it does for on-balance-sheet
instruments. Following is a discussion of these transactions.

         Standby letters of credit - These transactions are conditional
commitments issued by Bancorp to guarantee the performance of a customer to a
third party. Bancorp's portfolio of standby letters of credit consists primarily
of performance assurances made on behalf of customers who have a contractual
commitment to produce or deliver goods or services. The risk to Bancorp arises
from its obligation to make payment in the event of the customers' contractual
default. Bancorp has issued standby letters of credit aggregating $24,516,000
and $26,813,000 at December 31, 2001 and 2000, respectively.

         Management conducts regular reviews of these instruments on an
individual customer basis, and the results are considered in assessing the
adequacy of Bancorp's allowance for loan losses. Management does not anticipate
any material losses as a result of these letters of credit.

         Loan commitments - Commitments to extend credit are agreements to lend
to a customer as long as there is no violation of any condition established in
the contract. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of the
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements.
Bancorp evaluates each customer's creditworthiness on an individual basis. The
amount of collateral obtained, if deemed necessary by Bancorp upon extension of
credit, is based on management's credit evaluation of the counterparty. The
collateral held varies, but may include securities, real estate, inventory,
plant, or equipment. Bancorp had commitments outstanding to extend credit
totaling $477,689,000 and $484,894,000 at December 31, 2001, and 2000,
respectively. Management does not anticipate any material losses as a result of
these commitments.

         Derivatives - In November of 2001, Bancorp's board of directors
approved a policy authorizing the use of certain derivative products as a tool
for the management of interest rate risk. Approved derivatives include interest
rate caps, floors, and swaps. These instruments will allow Bancorp to meet the
needs of its customers, yet reduce the interest rate risk associated with
certain transactions. Bancorp did not use off-balance-sheet derivative financial
instruments (such as interest rate swaps) as defined in SFAS No. 133 "Accounting
for Derivative Instruments and Hedging Activities" in 2001.


               FIRST FINANCIAL BANCORP   19   2001 ANNUAL REPORT


                         NOTE 8 - INVESTMENT SECURITIES

The following is a summary of investment securities as of December 31, 2001:




                                          HELD-TO-MATURITY                                  AVAILABLE-FOR-SALE
                                AMORTIZED       UNREALIZED          MARKET    AMORTIZED      UNREALIZED           MARKET
                                  COST       GAINS      LOSSES      VALUE       COST     GAINS         LOSSES      VALUE

                                                                 (Dollars in thousands)

                                                                                         
U.S. Treasury securities                                                      $    101   $      1   $      0    $    102
Securities of U.S. government
  agencies and corporations                                                     96,579      2,058       (138)     98,499
Mortgage-backed securities       $  3,351   $    153   $     (4)   $  3,500    321,613      5,344       (640)    326,317
Obligations of state and
  other political subdivisions     17,539        523        (15)     18,047    127,339      2,622       (834)    129,127
Other securities                                                                41,314        241          0      41,555
                                 --------   --------   --------    --------   --------   --------   --------    --------
  Total                          $ 20,890   $    676   $    (19)   $ 21,547   $586,946   $ 10,266   $ (1,612)   $595,600
                                 ========   ========   ========    ========   ========   ========   ========    ========



The following is a summary of investment securities as of December 31, 2000:




                                              HELD-TO-MATURITY                        AVAILABLE-FOR-SALE
                                 AMORTIZED       UNREALIZED        MARKET    AMORTIZED      UNREALIZED           MARKET
                                   COST        GAINS     LOSSES    VALUE       COST       GAINS     LOSSES       VALUE
                                                                                         
                                                                 (Dollars in thousands)
U.S. Treasury securities                                                      $  3,497   $      0   $     (5)   $  3,492
Securities of U.S. government
  agencies and corporations                                                    143,311      1,037       (487)    143,861
Mortgage-backed securities       $  4,900   $    100   $    (18)   $  4,982    244,895      1,844     (1,355)    245,384
Obligations of state and
  other political subdivisions     19,621        575        (25)     20,171    134,439      2,632       (389)    136,682
Other securities                      279          1          0         280     35,360          3        (20)     35,343
                                 --------   --------   --------    --------   --------   --------   --------    --------
  Total                          $ 24,800   $    676   $    (43)   $ 25,433   $561,502   $  5,516   $ (2,256)   $564,762
                                 ========   ========   ========    ========   ========   ========   ========    ========




         The carrying value of investment securities as of December 31,1999, by
category was as follows: U.S. Treasury $11,311,000, U.S. government agencies and
corporations $118,838,000, mortgage-backed $195,307,000, obligations of state
and other political subdivisions $164,584,000, and other $32,520,000.

         During the years ended December 31, 2001 and 2000, no
available-for-sale securities were sold.

         During the year ended December 31, 1999, available-for-sale securities
with a fair value at the date of sale of $13,482,000 were sold. The gross
realized gains on such sales totaled $38,000.

         There were net investment gains after taxes of $188,000, $73,000, and
$106,000 for the years ended December 31, 2001, 2000, and 1999, respectively.
The applicable income tax effects were an expense of $114,000 for 2001 and
benefits of $34,000 and $56,000 for 2000 and 1999, respectively.

         The carrying value of investment securities pledged to secure public
deposits and for other purposes as required by law amounted to $259,904,000 at
December 31, 2001.

         The amortized cost and market value of investment securities, including
mortgage-backed securities at December 31, 2001, by contractual maturity, are
shown in the table below.

         Expected maturities will differ from contractual maturities because
issuers may have the right to call or prepay obligations with or without call or
prepayment penalties.




                                           HELD-TO-MATURITY     AVAILABLE-FOR-SALE
                                         AMORTIZED   MARKET    AMORTIZED    MARKET
                                           COST       VALUE       COST       VALUE
                                                   (Dollars in thousands)

                                                              
Due in one year or less                  $  2,084   $  2,108   $ 40,542   $ 41,264
Due after one year through five years      11,613     12,068     92,697     94,548
Due after five years through ten years      5,048      5,180     77,550     79,263
Due after ten years                         2,145      2,191    376,157    380,525
                                         --------   --------   --------   --------
  TOTAL                                  $ 20,890   $ 21,547   $586,946   $595,600
                                         ========   ========   ========   ========



               FIRST FINANCIAL BANCORP   20   2001 ANNUAL REPORT


                                 NOTE 9 - LOANS

Information as to nonaccrual and restructured loans at December 31 was as
follows:

                                              2001      2000      1999
                                               (Dollars in thousands)
  Principal balance
    Nonaccrual loans                         $24,628   $17,346   $11,283
    Restructured loans                         1,291       265     2,244
                                             -------   -------   -------
       TOTAL                                 $25,919   $17,611   $13,527
                                             =======   =======   =======
 Interest income effect
    Gross amount of interest that would
       have been recorded at original rate   $ 1,609   $ 2,560   $   885
    Interest included in income                  416     1,613       286
                                             -------   -------   -------
       NET IMPACT ON INTEREST INCOME         $ 1,193   $   947   $   599
                                             =======   =======   =======


         At December 31, 2001, there were no commitments outstanding to lend
additional funds to borrowers with nonaccrual or restructured loans.

         The balances of other real estate acquired through loan foreclosures,
in-substance foreclosures, repossessions or other workout situations, net of the
related allowance, totaled $2,338,000, $1,075,000, and $1,707,000 at December
31, 2001, 2000, and 1999, respectively.

         Changes in the allowance for loan losses for the three years ended
December 31 were as follows:


                                            2001        2000        1999
                                               (Dollars in thousands)
Balance at beginning of year              $ 39,349    $ 39,340    $ 34,800
Allowance acquired                           1,462           0           0
Provision for discontinued product line          0           0       1,100
Provision for loan losses                   26,813      11,300       9,232
Loans charged-off                          (23,632)    (13,644)     (9,361)
Recoveries                                   2,792       2,353       3,569
                                          --------    --------    --------
  BALANCE AT END OF YEAR                  $ 46,784    $ 39,349    $ 39,340
                                          ========    ========    ========

         The allowances for loan losses related to loans that are identified for
evaluation in accordance with SFAS No. 114 are based on discounted cash flows
using the loan's initial effective interest rate or the fair value of the
collateral for certain collateral dependent loans.

         At December 31, 2001, 2000, and 1999, the total recorded investment in
loans that are considered to be impaired under SFAS No. 114 was $2,006,000,
$8,904,000, and $2,708,000, respectively. For those same periods, the recorded
investment in loans for which there was a related allowance for loan losses was
$801,000, $8,839,000, and $2,688,000.

         The related allowance for loan losses on these impaired loans was
$529,000 at December 31, 2001, $2,008,000 at December 31, 2000, and $1,433,000
at December 31, 1999. At December 31, 2001 and 2000, there were $1,205,000 and
$65,000, respectively, that as a result of write-downs, did not have an
allowance for loan losses. The average recorded investment in impaired loans
during the year ended December 31, 2001, was approximately $4,343,000 versus
$5,517,000 for the year ended December 31, 2000, and $2,407,000 for the year
ended December 31, 1999. For the years ended December 31, 2001, 2000, and 1999,
Bancorp recognized interest income on those impaired loans of $143,000,
$218,000, and $88,000, respectively. Bancorp recognizes income on impaired loans
using the cash basis method.

         Mortgage loans serviced for others are not included in the accompanying
Consolidated Balance Sheets. The unpaid principal balances of these loans
totaled $545,733,000, $560,530,000, and $394,978,000 at December 31, 2001, 2000,
and 1999, respectively.

         Custodial escrow balances maintained in connection with these mortgage
loans serviced were approximately $3,336,000, $3,313,000, and $2,344,000 at
December 31, 2001, 2000, and 1999, respectively.



               FIRST FINANCIAL BANCORP   21   2001 ANNUAL REPORT





                              NOTE 10 - BORROWINGS

The following is a summary of short-term borrowings for the last three years:





                                                               2001                       2000                          1999
                                                      AMOUNT          RATE       AMOUNT           RATE           AMOUNT      RATE
                                                                                (Dollars in thousands)
                                                                                                           
At year end:
  Federal funds purchased and securities
    sold under agreements to repurchase             $   67,641        1.31%    $     53,581          5.54%      $  83,353    5.06%
  Federal Home Loan Bank borrowings                          0        0.00%          85,500          6.30%        294,235    5.73%
  Other short-term borrowings                           25,811        2.29%           7,487          6.08%          4,530    3.72%
                                                    ----------                 ------------                     ---------
    Total                                           $   93,452        1.58%    $    146,568          6.01%      $ 382,118    5.56%
                                                    ==========      =======    ============        =======      =========   ======

Average for the year:
  Federal funds purchased and securities
    sold under agreements to repurchase             $   46,974        3.29%    $     68,720          4.54%      $  70,421    4.50%
  Federal Home Loan Bank borrowings                     12,330        6.00%         245,880          6.38%        178,959    5.09%
  Other short-term borrowings                           15,936        4.56%           1,937          6.96%          1,893    4.78%
                                                    ----------                 ------------                     ---------
    Total                                           $   75,240        4.01%    $    316,537          5.98%      $ 251,273    4.92%
                                                    ==========      =======    ============        =======      =========   ======
Maximum month-end balances:
  Federal funds purchased and securities
    sold under agreements to repurchase             $   67,641                 $    115,109                     $  86,429
  Federal Home Loan Bank borrowings                     83,000                      344,350                       302,750
  Other short-term borrowings                           28,912                        4,243                         5,859




         At December 31, 2001, Bancorp had a short-term revolving line of credit
with a financial institution of $25,000,000. As of year end, the outstanding
balance was $23,500,000. The interest rate on this line of credit is the current
federal funds rate plus a spread. The line of credit has a financial requirement
whereby Bancorp's affiliates must maintain a risk-based capital level of a
well-capitalized institution. Also, Bancorp must maintain an allowance for loan
losses which matches or exceeds its level of nonperforming loans. Bancorp was in
compliance with these requirements as of December 31, 2001.

         Federal Home Loan Bank long-term borrowings - Long-term borrowings at
December 31, 2001, consisted exclusively of Federal Home Loan Bank (FHLB)
advances with rates ranging from 1.93% to 6.90%, with interest payable monthly.
The long-term advances mature as follows: $4,634,000 in 2002, $1,200,000 in
2003, $16,500,000 in 2004, $5,000,000 in 2005, $19,908,000 in 2006, and
$213,103,000 after 2006.

         Federal Home Loan Bank advances, both short-term and long-term were
secured by certain residential mortgage loans, as well as certain government and
agency securities, with a book value of $843,660,000 at December 31, 2001.





               FIRST FINANCIAL BANCORP   22   2001 ANNUAL REPORT



                             NOTE 11 - INCOME TAXES


Income tax expense consisted of the following components:




                                                 2001                     2000                  1999
                                                                   (Dollars in thousands)
                                                                                 
                 Current:
                   Federal                   $     18,431           $    24,548           $     21,613
                   State                            2,636                 3,134                  2,633
                                             ------------           -----------           ------------
                      Total                        21,067                27,682                 24,246
                 Deferred expense                   1,064                 1,058                  2,054
                                             ------------           -----------           ------------
                      INCOME TAX EXPENSE     $     22,131           $    28,740           $     26,300
                                             ============           ===========           ============


The difference between the federal income tax rates, applied to income before
income taxes, and the effective rates were due to the following:




                                                                              2001            2000               1999
                                                                                      (Dollars in thousands)
                                                                                                 
                 Income taxes computed at federal statutory rate of 35%   $    22,904     $     30,431       $     26,818
                 State income taxes, net of federal tax benefit                 1,713            2,037              1,711
                 Effect of tax-exempt interest                                 (2,073)          (3,014)            (2,885)
                 Other                                                           (413)            (714)               656
                                                                          -----------     ------------       ------------
                   INCOME TAX EXPENSE                                     $    22,131     $     28,740       $     26,300
                                                                          ===========     ============       ============



         SFAS No. 109, "Accounting for Income Taxes," requires that deferred tax
assets and liabilities be carried at the enacted tax rate. The enacted tax rate
was 35% for years ended December 31, 2001, 2000, and 1999.

The major components of the temporary differences that give rise to deferred tax
assets and liabilities at December 31, 2001 and 2000 were as follows:





                                                                                        2001        2000
                                                                                      (Dollars in thousands)
                                                                                            
Deferred tax assets
  Allowance for loan losses                                                           $ 14,577    $ 13,034
  Mark to market adjustment                                                                795        (712)
  Other real estate owned                                                                  (18)        (82)
  Postretirement benefits other than pension liability                                     847         866
  Pension liability                                                                        230         675
  Other                                                                                    255         210
                                                                                      --------    --------
     TOTAL DEFERRED TAX ASSETS                                                          16,686      13,991
Deferred tax liabilities
  Tax greater than book depreciation                                                     1,994         989
  Leasing activities                                                                     7,166       5,815
  Federal Home Loan Bank stock basis difference                                          2,287       1,095
  Deferred loan fees                                                                     2,054       1,614
  Purchase accounting adjustment                                                          (162)       (276)
  Other                                                                                  1,374       1,717
                                                                                      --------    --------
     TOTAL DEFERRED TAX LIABILITIES                                                     14,713      10,954
                                                                                      --------    --------
     Net deferred tax asset recognized through the statement of earnings                 1,973       3,037
     Net deferred tax liability from valuation adjustments of investment securities
        available-for-sale, recognized in equity section of balance sheet               (3,361)     (2,346)
                                                                                      --------    --------
     TOTAL NET DEFERRED TAX (LIABILITY) ASSET                                         $ (1,388)   $    691
                                                                                      ========    ========


                   FIRST FINANCIAL BANCORP   23   2001 ANNUAL






                          NOTE 12 - RISK-BASED CAPITAL



         The Federal Reserve established risk-based capital requirements for
U.S. banking organizations which have been adopted by the Office of Thrift
Supervision for savings and loan associations. Risk weights are assigned to
on-and off-balance-sheet items in arriving at risk-adjusted total assets.
Regulatory capital is divided by risk-adjusted total assets, with the resulting
ratios compared to minimum standards to determine whether a bank has adequate
capital.

         Regulatory guidelines require a 4.00% Tier 1 capital ratio, an 8.00%
total risk-based capital ratio, and a 4.00% leverage ratio. Tier 1 capital
consists primarily of common shareholders' equity, net of intangibles, and total
risk-based capital is Tier 1 capital plus Tier 2 supplementary capital, which is
primarily the allowance for loan losses subject to certain limits. The leverage
ratio is a result of dividing Tier 1 capital by average total assets less
certain intangibles.

         While Bancorp's subsidiaries' ratios are well above regulatory
requirements, management will continue to monitor the asset mix which affects
these ratios due to the risk weights assigned various assets, and the allowance
for the loan losses, which influences the total risk-based capital ratio.

         The table below illustrates the risk-based capital calculations and
ratios for the last two years.

                                                      December 31,

                                                  2001            2000
                                                 (Dollars in thousands)
Tier 1 capital
  Shareholders' equity                        $    384,543    $     395,132
  Less certain intangibles                          32,465           34,957
  Less accumulated comprehensive income              5,348            1,955
                                              ------------    -------------
    TOTAL TIER 1 CAPITAL                      $    346,730    $     358,220
                                              ============    =============
Total risk-based capital
  Tier 1 capital                              $    346,730    $    358,220
  Qualifying allowance for loan losses              35,111           35,945
                                              ------------    -------------
    TOTAL RISK-BASED CAPITAL                  $    381,841    $    394,165
                                              ============    =============
RISK WEIGHTED ASSETS                          $  2,797,210    $   2,872,181
                                              ============    =============
RISK-BASED RATIOS
    TIER 1 CAPITAL                                    12.4%           12.5%
                                              ============    =============
    TOTAL RISK-BASED CAPITAL                          13.7%           13.7%
                                              ============    =============
    LEVERAGE                                           9.1%            9.2%
                                              ============    =============


                        NOTE 13 - EMPLOYEE BENEFIT PLANS

         Bancorp sponsors a non-contributory defined benefit pension plan
covering substantially all employees. Plan assets are administered by the Trust
Department of First National Bank of Southwestern Ohio. Plan assets primarily
consist of equity and debt mutual funds, stocks, corporate bonds, and money
market funds. Approximately 98.1% and 97.9% of plan assets at December 31, 2001,
and 2000, respectively, were invested in collective trust funds with First
Southwestern. The pension plan does not own any shares of Bancorp common stock.

         The following tables set forth information concerning amounts
recognized in Bancorp's Consolidated Balance Sheets and Consolidated Statements
of Earnings:


                                                     December 31,

                                                   2001        2000
                                                (Dollars in thousands)
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year          $ 27,773    $ 26,536
Service cost                                        2,306       2,115
Interest cost                                       2,236       2,007
Actuarial loss                                      4,449       1,247
Benefits paid                                      (3,595)     (4,132)
                                                 --------    --------
Benefit obligation at end of year                  33,169      27,773

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year     21,667      22,898
Actual return on plan assets                          131       1,427
Employer contributions                              4,773       1,474
Benefits paid                                      (3,595)     (4,132)
                                                 --------    --------
Fair value of plan assets at end of year           22,976      21,667
                                                 --------    --------
Funded status                                     (10,193)     (6,106)
Unrecognized transition amount                       (460)       (731)
Unrecognized prior service cost                       822       1,074
Unrecognized actuarial loss                         8,561       2,313
                                                 --------    --------
NET AMOUNT RECOGNIZED IN THE CONSOLIDATED
  BALANCE SHEETS (ACCRUED BENEFIT LIABILITY)     $ (1,270)   $ (3,450)
                                                 ========    ========


               FIRST FINANCIAL BANCORP   24   2001 ANNUAL REPORT







WEIGHTED-AVERAGE ASSUMPTIONS                                             DECEMBER 31,
                                                                     2001            2000

                                                                              
Discount rate                                                        7.25%          7.50%
Expected return on plan assets                                       9.00%          9.00%
Rate of compensation increase                                        3.50%          3.50%






COMPONENTS OF NET PERIODIC BENEFIT COST                               DECEMBER 31,
                                                          2001            2000           1999
                                                                (Dollars in thousands)

                                                                             
Service cost                                          $     2,306     $     2,115     $   1,972
Interest cost                                               2,236           2,007         1,941
Expected return on assets                                  (2,051)         (2,000)       (2,223)
Amortization of transition asset                             (270)           (305)         (305)
Amortization of unrecognized prior service cost               252             252           252
Amortization of actuarial loss                                120               0             0
                                                      -----------     -----------     ---------
   NET PERIODIC PENSION COST                          $     2,593     $     2,069     $   1,637
                                                      ===========     ===========     =========


         Bancorp also sponsors a defined contribution 401(k) thrift plan which
covers substantially all employees. Employees may contribute up to 12.0% of
their base salaries into the plan. Bancorp contributions are at the discretion
of the board of directors.

         During 2001, 2000, and 1999, Bancorp contributed $.50 for each $1.00 an
employee contributed, up to a maximum Bancorp contribution of 3.00% of the
employee's base salary. All Bancorp matching contributions vest immediately.
Total Bancorp contributions to the 401(k) plan were $873,000 during 2001,
$937,000 during 2000, and $775,000 during 1999.



             NOTE 14 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

         Some Bancorp subsidiaries maintain health care and, in limited
instances, life insurance plans for current retired employees. Under the current
policy, the health care plans are unfunded and pay medically necessary expenses
incurred by retirees, after subtracting payments by Medicare or other providers
and after stated deductibles have been met. Bancorp has reserved the right to
change or eliminate these benefit plans.

         The following table sets forth the funded status and amounts recognized
in Bancorp's Consolidated Balance Sheets:




                                                                                  2001            2000
                                                                                 (Dollars in thousands)

                                                                                           
          Benefit obligation at beginning of year                                $ 1,199         $ 1,178
          Interest cost                                                               85              84
          Plan participants' contributions                                            23              23
          Actuarial loss                                                             220             106
          Benefits paid                                                             (213)           (192)
                                                                                --------        --------
          Benefit obligation at end of year                                        1,314           1,199
          Fair value of plan assets at beginning and end of year                       0               0
                                                                                --------        --------
          Funded status                                                           (1,314)         (1,199)
          Unrecognized actuarial gain                                               (883)         (1,152)
          Unrecognized prior service cost                                            (22)            (25)
                                                                                --------        --------
            NET POSTRETIREMENT LIABILITY RECOGNIZED IN THE BALANCE SHEETS        $(2,219)        $(2,376)
                                                                                ========        ========
          Net periodic postretirement benefit cost includes the following
          components:

          Interest cost                                                          $    85         $    84
          Amortization of unrecognized prior service cost                             (3)             (4)
          Amortization of actuarial gain                                             (94)           (114)
                                                                                --------        --------
            NET PERIODIC BENEFIT COST                                            $   (12)        $   (34)
                                                                                ========        ========



         The discount rate used to determine the accumulated postretirement
benefit obligation was 7.25% at December 31, 2001 and 7.50% at December 31,
2000. The assumed health care cost trend rates used in determining the
accumulated postretirement benefit obligation are shown in the table to the
right.

         If the health care cost trend rate assumptions were increased by 1.00%,
the accumulated post- retirement benefit obligation as of December 31, 2001,
would be increased by approximately $106,000.

         If the health care cost trend rate assumptions were decreased by 1.00%,
the accumulated post- retirement benefit obligation as of December 31, 2001,
would be decreased by approximately $96,000.


                  2001     2000

2001                      6.60%
2002            10.00%    6.00%
2003             9.00%    5.50%
2004             8.00%    5.00%
2005             7.00%    5.00%
2006             6.00%    5.00%
Thereafter       5.00%    5.00%



               FIRST FINANCIAL BANCORP   25   2001 ANNUAL REPORT




                          NOTE 15 - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:




                                                                                   2001                2000                1999
                                                                                    (Dollars in thousands, except per share data)
                                                                                                              
Net income--numerator for basic and diluted earnings per share -
  income available to common stockholders                                        $    43,309        $    58,222        $    50,323
                                                                                 ===========        ===========        ===========
Denominator for basic earnings per share - weighted average shares                47,427,921         48,775,547         49,191,294
Effect of dilutive securities - employee stock options                                51,394             86,739            143,778
                                                                                 -----------        -----------        -----------
Denominator for diluted earnings per share - adjusted weighted average shares     47,479,315         48,862,286         49,335,072
                                                                                 ===========        ===========        ===========
Basic earnings per share                                                         $      0.91        $      1.19        $      1.02
                                                                                 ===========        ===========        ===========
Diluted earnings per share                                                       $      0.91        $      1.19        $      1.02
                                                                                 ===========        ===========        ===========


                            NOTE 16 - STOCK OPTIONS

         The 1991 Stock Incentive Plan provides incentive stock options and
stock awards to certain key employees and non-qualified stock options to
directors of Bancorp who are not employees for up to 1,691,035 common shares of
Bancorp. The options are not exercisable for at least one year from the date of
grant and are thereafter exercisable for such periods (which may not exceed 10
years) as the board of directors, or a committee thereof, specifies, provided
that the optionee has remained in the employment of Bancorp or its subsidiaries.
The board or the committee may accelerate the exercise period for an option upon
the optionee's disability, retirement, or death. All options expire at the end
of the exercise period. Cancelled and expired options become available for
issuance and are reflected in the available for future grant figure. On April
27, 1999, the shareholders approved the 1999 Stock Incentive Plan which provides
for 7,507,500 similar options and awards.

         Bancorp has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25), and related
interpretations in accounting for its stock options because, as discussed below,
the alternative fair value accounting provided for under SFAS No. 123,
"Accounting for Stock-Based Compensation" requires use of option valuation
models that were not developed for use in valuing stock options. Under APB 25,
because the exercise price of Bancorp's employee stock options equaled the
market price of the underlying stock on the date of grant, no compensation
expense was recognized.

         Pro forma information regarding net income and earnings per share is
required by SFAS No. 123 and has been determined as if Bancorp had accounted for
its stock options under the fair value method of that statement. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for 2001,
2000, and 1999, respectively: risk-free interest rates of 4.94%, 6.52%, and
4.74%; dividend yields of 3.61%, 3.25%, and 2.35%; volatility factors of the
expected market price of Bancorp's common stock of 0.220, 0.215, and 0.202; and
a weighted average expected life of the options of 4.50, 3.90, and 2.83 years.

         The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because Bancorp's stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

         For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. Bancorp's pro
forma information follows:


                                          2001         2000        1999
                                  (Dollars in thousands, except per share data)

     Pro forma net earnings           $  42,392    $   55,778   $  49,238
                                      =========    ==========   =========
     Pro forma earnings per share     $    0.89    $     1.20   $    1.05
                                      =========    ==========   =========

Activity in the above plan for 2001, 2000, and 1999 is summarized as follows:




                                                    2001                            2000                        1999
                                          NUMBER OF        OPTION         NUMBER OF       OPTION        NUMBER OF       OPTION
                                           SHARES          PRICE           SHARES         PRICE          SHARES         PRICE
                                                                                                 
Outstanding at beginning of year          1,403,595                         779,524                      554,169
Granted                                     284,172    $  15.37-16.01       678,011     $ 17.75-18.75    337,824    $ 20.23-23.69
Exercised                                   (19,719)   $   7.36-11.30       (24,877)    $  7.50-11.87    (83,282)   $  7.72-20.04
Cancelled                                   (70,688)   $   7.36-22.57       (29,063)    $ 18.44-20.05    (29,187)   $       23.69
                                        -----------                     -----------                   ----------
  OUTSTANDING AT END OF YEAR              1,597,360    $   7.14-22.57     1,403,595     $  7.50-23.69    779,524    $  7.50-23.69
                                        ===========                     ===========                   ==========
  EXERCISABLE AT END OF YEAR              1,319,594                         735,637                      470,863
                                        ===========                     ===========                   ==========
  AVAILABLE FOR FUTURE GRANT              7,013,931                       7,227,408                    7,370,203
                                        ===========                     ===========                   ==========
  WEIGHTED-AVERAGE FAIR VALUE OF
    OPTIONS GRANTED DURING THE YEAR     $      2.79                     $      3.56                   $     3.56
                                        ===========                     ===========                   ==========



                   FIRST FINANCIAL BANCORP   26   2001 ANNUAL





                       NOTE 17 - LOANS TO RELATED PARTIES


         Loans to directors, executive officers, principal holders of Bancorp's
common stock and certain related persons totaled $37,177,000 and $37,331,000 at
December 31, 2001 and 2000, respectively.


         Activity of these loans was as follows:

                                     2001            2000
                                     (Dollars in thousands)
         Beginning balance          $ 37,331     $  33,281
         Additions                    17,212        14,988
         Collected                    17,366        10,938
         Charged-off                       0             0
                                    --------     ---------
            ENDING BALANCE          $ 37,177     $  37,331
                                    ========     =========
            LOANS 90 DAYS PAST DUE  $      0     $       0
                                    ========     =========

         Related parties of Bancorp, as defined above, were customers of and had
transactions with subsidiaries of Bancorp in the ordinary course of business
during the periods noted above. Additional transactions may be expected in the
ordinary course of business in the future. All outstanding loans, commitments,
financing leases, transactions in money market instruments and deposit
relationships included in such transactions were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with others, and did not involve more than a normal
risk of collectibility or present other unfavorable features.



                        NOTE 18 - SHAREHOLDER RIGHTS PLAN


         Bancorp has a "shareholder rights plan" under which the holders of
Bancorp's common stock are entitled to receive one "right" per share held.

         Under the plan, each "right" would be distributed only on the 20th
business day after any one of the following events occurs: 1) A public
announcement that a person or group has acquired 20 percent or more (an
"acquiring person") of Bancorp's outstanding common shares, 2) The beginning of
a tender offer or exchange offer that would result in a person or group owning
30 percent or more of the corporation's outstanding common shares, or 3) A
declaration by the board of directors of a shareholder as an "adverse person."
(An adverse person is a person who owns at least 10 percent of the common shares
and attempts "greenmail," or is likely to cause a material adverse impact on the
Bancorp - such as impairing customer relationships, harming the company's
competitive position or hindering the Board's ability to effect a transaction it
deems to be in the shareholders' best interest.)

         In the event of such a distribution, each "right" would entitle the
holder to purchase, at an exercise price of $38.96, one share of common stock of
the corporation. Subject to the "exchange option" described below, if a person
or group acquires 30 percent or more of Bancorp's outstanding common shares or
is declared an "adverse person" by the Board of Directors of the corporation,
each "right" would entitle the holder to purchase, at an exercise price of
$38.96, a number (to be determined under the plan) of shares of common stock of
the corporation at a price equal to 50 percent of its then current market price.
However, any "rights" held by an "acquiring person" or an "adverse person" could
not be exercised.

         Additionally, each "right" holder would be entitled to receive common
stock of any acquiring company worth two times the exercise price of the
"right," should either of the following happen after a person becomes an
"acquiring person": 1) Bancorp is acquired in a merger or other transaction -
other than a merger which the independent directors determine to be in the best
interest of Bancorp and its shareholders, or 2) 50 percent or more of Bancorp's
assets or earning power is sold or transferred.

         At any time after any person becomes an "acquiring person" or an
"adverse person," the plan gives Bancorp's board of directors the option (the
"exchange option") to exchange all or part of the outstanding "rights" (except
"rights" held by an "acquiring person" or an "adverse person") for shares of
Bancorp's common stock at an exchange ratio of 0.8 shares of common stock per
"right." In the event that Bancorp's board of directors adopts the "exchange
option," each "right" would entitle the holder thereof to receive 0.8 shares of
common stock per "right." Any partial exchange would be effected pro rata based
on the number of "rights" held by each holder of "rights" included in the
exchange.

         Bancorp may redeem "rights" for $0.01 per "right" at any time prior to
the 20th business day following the date when a person acquires 20 percent of
the outstanding shares. Bancorp may not redeem the "rights" when a holder has
become an "adverse person."

         The Board's adoption of this "rights" plan has no financial effect on
Bancorp, is not dilutive to Bancorp shareholders, is not taxable to the
corporation or its shareholders, and will not change the way in which Bancorp
common shares are traded. "Rights" are not exercisable until distributed; and
all "rights" will expire at the close of business on December 6, 2003, unless
earlier redeemed by Bancorp.



               FIRST FINANCIAL BANCORP   27   2001 ANNUAL REPORT



        NOTE 19 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

         The following methods and assumptions were used by Bancorp in
estimating its fair value disclosures for financial instruments:

         Cash and short-term investments - The carrying amounts reported in the
balance sheet for cash and short-term investments, such as interest-bearing
deposits with other banks and federal funds sold, approximated the fair value of
those instruments.

         Investment securities (including mortgage-backed securities) - Fair
values for investment securities were based on quoted market prices, where
available. If quoted market prices were not available, fair values were based on
quoted market prices of comparable instruments. (Refer to Note 8 for further
disclosure.)

         Loans - For variable-rate loans that reprice frequently with no
significant change in credit risk, fair values were based on carrying values.
The fair values of other loans and leases, such as commercial real estate and
consumer loans were estimated by discounting the future cash flows using the
current rates at which similar loans and leases would be made to borrowers with
similar credit ratings and for the same remaining maturities. The carrying
amount of accrued interest approximated its fair value.

         Deposit liabilities - The fair value of demand deposits, savings
accounts, and certain money market deposits was the amount payable on demand at
the reporting date. The carrying amounts for variable-rate certificates of
deposit approximated their fair values at the reporting date. The fair value of
fixed-rate certificates of deposit was estimated using a discounted cash flow
calculation which applies the interest rates currently offered for deposits of
similar remaining maturities. The carrying amount of accrued interest
approximated its fair value.

         Borrowings - The carrying amounts of federal funds purchased and
securities sold under agreements to repurchase and other short-term borrowings
approximated their fair values. The fair value of long-term borrowings was
estimated using a discounted cash flow calculation which utilizes the interest
rates currently offered for borrowings of similar remaining maturities.

         Commitments to extend credit and standby letters of credit - Pricing of
these financial instruments is based on the credit quality and relationship,
fees, interest rates, probability of funding and compensating balance and other
covenants or requirements. Loan commitments generally have fixed expiration
dates, are variable rate and contain termination and other clauses which provide
for relief from funding in the event that there is a significant deterioration
in the credit quality of the customer. Many loan commitments are expected to
expire without being drawn upon. The rates and terms of the commitments to
extend credit and the standby letters of credit are competitive with those in
Bancorp's market area. The carrying amounts are reasonable estimates of the fair
value of these financial instruments. Carrying amounts which are comprised of
the unamortized fee income and, where necessary, reserves for any expected
credit losses from these financial instruments, are immaterial. Refer to Note 7
for additional information.

         Bancorp does not carry financial instruments which are held or issued
for trading purposes.

         The estimated fair values of Bancorp's financial instruments at
December 31 were as follows:





                                                         2001                          2000
                                                 CARRYING         FAIR         CARRYING          FAIR
                                                  VALUE          VALUE          VALUE           VALUE
                                                                (Dollars in thousands)
Financial assets
                                                                                
  Cash and short-term investments              $  228,182     $  228,182     $  189,346     $  189,346
  Investment securities held-to-maturity           20,890         21,547         24,800         25,433
  Investment securities available-for-sale        595,600        595,600        564,762        564,762
  Loans
    Commercial                                    804,683        833,614        787,436        787,326
    Real estate - construction                     75,785         72,721         97,571         98,182
    Real estate - mortgage                      1,346,235      1,355,934      1,438,339      1,431,782
    Installment, net of unearned income           586,561        586,845        614,470        616,192
    Credit card                                    22,846         22,601         24,182         24,197
    Leasing                                        36,139         35,246         46,068         46,251
    Less allowance for loan losses                 46,784                        39,349
                                               ----------     ----------     ----------     ----------
      Net loans                                 2,825,465      2,906,961      2,968,717      3,003,930

  Accrued interest receivable                      27,054         27,054         33,580         33,580

Financial liabilities
  Deposits
    Noninterest-bearing                           448,330        448,330        419,878        419,878
    Interest-bearing demand                       346,039        346,039        306,356        306,356
    Savings                                       782,640        782,640        739,376        739,376
    Time                                        1,508,084      1,516,181      1,685,818      1,689,563
                                               ----------     ----------     ----------     ----------
      Total deposits                            3,085,093      3,093,190      3,151,428      3,155,173
  Short-term borrowings                            93,452         93,452        146,568        146,568
  Long-term borrowings                            260,345        263,210        205,216        203,937
  Accrued interest payable                          9,275          9,275         14,811         14,811



               FIRST FINANCIAL BANCORP   28   2001 ANNUAL REPORT




 NOTE 20 - FIRST FINANCIAL BANCORP. (PARENT COMPANY ONLY) FINANCIAL INFORMATION

BALANCE SHEETS


                                                             December 31,

                                                          2001         2000
                                                        (Dollars in thousands)
                                                               
ASSETS
  Cash                                                  $ 21,159     $ 22,721
  Investment securities                                    3,313           89
  Subordinated notes from subsidiaries                     7,500        7,500
  Investment in subsidiaries
     Commercial banks                                    313,462      321,504
     Savings banks                                        30,973       32,884
                                                        --------     --------
       Total investment in subsidiaries                  344,435      354,388
  Loans
     Commercial                                           16,352            0
     Real estate - mortgage                                  605            0
                                                        --------     --------
       Total loans                                        16,957            0
       Allowance for loan losses                           3,502            0
                                                        --------     --------
         Net loans                                        13,455            0
  Bank premises & equipment                                1,325        1,347
  Other assets                                            27,592       20,555
                                                        --------     --------
         TOTAL ASSETS                                   $418,779     $406,600
                                                        ========     ========
LIABILITIES
  Short-term borrowings                                 $ 23,500     $  3,500
  Dividends payable                                        7,004        6,915
  Other liabilities                                        3,732        1,053
                                                        --------     --------
         TOTAL LIABILITIES                                34,236       11,468
SHAREHOLDERS' EQUITY                                     384,543      395,132
                                                        --------     --------
         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $418,779     $406,600
                                                        ========     ========


STATEMENTS OF EARNINGS


                                                                                                     Year Ended December 31,

                                                                                                2001         2000           1999
                                                                                                     (Dollars in thousands)
                                                                                                                 
Income
  Interest income                                                                             $    313      $    670      $    140
  Other interest income                                                                             94
  Dividends from subsidiaries                                                                   75,647        58,018        38,348
                                                                                              --------      --------      --------
      TOTAL INCOME                                                                              76,054        58,688        38,488
EXPENSES
  Interest expense                                                                                 665            11             0
  Provision for loan losses                                                                      3,752
  Salaries and employee benefits                                                                 4,972         2,889         3,211
  Other                                                                                          4,909         1,522         5,683
                                                                                              --------      --------      --------
      TOTAL EXPENSES                                                                            14,298         4,422         8,894
                                                                                              --------      --------      --------
      INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED NET EARNINGS OF SUBSIDIARIES       61,756        54,266        29,594
Income tax benefit                                                                              (4,186)       (1,119)       (1,310)
                                                                                              --------      --------      --------
      INCOME BEFORE EQUITY IN UNDISTRIBUTED NET EARNINGS OF SUBSIDIARIES                        65,942        55,385        30,904
Equity in undistributed net earnings of subsidiaries                                           (22,633)        2,837        19,419
                                                                                              --------      --------      --------
      NET EARNINGS                                                                            $ 43,309      $ 58,222      $ 50,323
                                                                                              ========      ========      ========


                       FIRST FINANCIAL BANCORP   29   2001 ANNUAL








STATEMENTS OF CASH FLOWS                                                                      YEAR ENDED DECEMBER 31,
                                                                                          2001          2000           1999
                                                                                               (Dollars in thousands)
                                                                                                            
OPERATING ACTIVITIES
  Net earnings                                                                           $ 43,309      $ 58,222      $ 50,323
  Adjustments to reconcile net earnings to net cash provided by operating activities
      Equity in undistributed net earnings of subsidiaries                                 22,633        (2,837)      (19,419)
      Provision for loan losses                                                             3,752             0             0
      Provision for depreciation and amortization                                           1,228           471            60
      Deferred income taxes                                                                    92            38            78
      (Decrease) increase in dividends payable                                                 89           (65)          465
      Increase (decrease) in accrued expenses                                               2,200        (2,338)        2,251
     (Increase) decrease in receivables                                                    (6,776)       (2,820)       (4,550)
                                                                                         --------      --------      --------
        Net cash provided by operating activities                                          66,527        50,671        29,208
INVESTING ACTIVITIES
  Subordinated notes from subsidiaries                                                          0             0        (7,500)
  Capital contributions to subsidiaries                                                    (9,434)      (19,397)       (4,200)
  Purchase of investment securities                                                        (3,000)            0             0
  Net increase in loans                                                                   (17,207)            0             0
  Purchases of premises and equipment                                                         (90)          (27)       (1,189)
  Other                                                                                         0            77            84
                                                                                         --------      --------      --------
        Net cash used in investing activities                                             (29,731)      (19,347)      (12,805)
FINANCING ACTIVITIES
  Increase in short-term borrowings                                                        20,000         3,500             0
  Cash dividends                                                                          (28,400)      (27,901)      (25,570)
  Purchase of common stock                                                                (30,057)      (16,518)            0
  Proceeds from exercise of stock options, net of shares purchased                             99           116           780
                                                                                         --------      --------      --------
        Net cash used in financing activities                                             (38,358)      (40,803)      (24,790)
                                                                                         --------      --------      --------
        DECREASE IN CASH                                                                   (1,562)       (9,479)       (8,387)
Cash at beginning of year                                                                  22,721        32,200        40,587
                                                                                         --------      --------      --------
        CASH AT END OF YEAR                                                              $ 21,159      $ 22,721      $ 32,200
                                                                                         ========      ========      ========



                REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS


The Board of Directors and Shareholders
First Financial Bancorp

         We have audited the accompanying consolidated balance sheets of First
Financial Bancorp and subsidiaries as of December 31, 2001, and 2000, and the
related consolidated statements of earnings, changes in shareholders' equity,
and cash flows for each of the three years in the period ended December 31,
2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of First
Financial Bancorp and subsidiaries at December 31, 2001 and 2000, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.


/s/ Ernst & Young LLP

Cincinnati, Ohio
January 17, 2002




               FIRST FINANCIAL BANCORP   30   2001 ANNUAL REPORT



                 QUARTERLY FINANCIAL AND COMMON STOCK DATA (1)




                                                                  (Unaudited)
                                                               THREE MONTHS ENDED
                                            MARCH 31        JUNE 30      SEPTEMBER 30    DECEMBER 31
                                                  (Dollars in thousands, except per share data)
                                                                               
2001
         Interest income                      $76,999        $74,853        $71,434        $66,459
         Interest expense                      36,554         34,766         30,085         25,375
                                              -------        -------        -------        -------
           Net interest income                 40,445         40,087         41,349         41,084
         Provision for loan losses              2,528          8,527          5,206         10,552
         Noninterest income
           Investment securities gains            148             42              8            104
           All other                           12,713         13,591         12,794         14,842
         Noninterest expenses                  29,835         29,999         30,660         34,460
                                              -------        -------        -------        -------
           Income before income taxes          20,943         15,194         18,285         11,018
         Income tax expense                     6,930          5,363          6,173          3,665
                                              -------        -------        -------        -------
           NET EARNINGS                       $14,013        $ 9,831        $12,112        $ 7,353
                                              =======        =======        =======        =======
         Per share
           NET EARNINGS - BASIC               $  0.29        $  0.21        $  0.26        $  0.16
                                              =======        =======        =======        =======
           NET EARNINGS - DILUTED             $  0.29        $  0.21        $  0.26        $  0.16
                                              =======        =======        =======        =======
           CASH DIVIDENDS PAID                $  0.15        $  0.15        $  0.15        $  0.15
                                              =======        =======        =======        =======
             Market price
               HIGH BID                       $ 16.61        $ 17.08        $ 17.23        $ 17.75
                                              =======        =======        =======        =======
               LOW BID                        $ 14.41        $ 14.58        $ 14.97        $ 15.23
                                              =======        =======        =======        =======

2000
         Interest income                      $75,272        $78,232        $80,243        $79,556
         Interest expense                      33,172         35,406         38,306         38,540
                                              -------        -------        -------        -------
           Net interest income                 42,100         42,826         41,937         41,016
         Provision for loan losses              2,361          2,222          2,674          4,043
         Noninterest income
           Investment securities gains             14             11             12              2
           All other                           10,937         11,671         12,449         13,305
         Noninterest expenses                  29,725         30,644         29,128         28,521
                                              -------        -------        -------        -------
           Income before income taxes          20,965         21,642         22,596         21,759
         Income tax expense                     7,095          7,293          7,427          6,925
                                              -------        -------        -------        -------
           NET EARNINGS                       $13,870        $14,349        $15,169        $14,834
                                              =======        =======        =======        =======
         Per share

           NET EARNINGS - BASIC               $  0.28        $  0.29        $  0.31        $  0.31
                                              =======        =======        =======        =======
           NET EARNINGS - DILUTED             $  0.28        $  0.29        $  0.31        $  0.31
                                              =======        =======        =======        =======
           CASH DIVIDENDS PAID                $  0.14        $  0.14        $  0.14        $  0.14
                                              =======        =======        =======        =======
             Market price
               HIGH BID                       $ 18.81        $ 18.75        $ 18.46        $ 16.19
                                              =======        =======        =======        =======
               LOW BID                        $ 14.76        $ 15.95        $ 15.00        $ 13.39
                                              =======        =======        =======        =======




First Financial Bancorp common stock trades on The Nasdaq Stock Market (?)
under the symbol FFBC.
(1) First Financial Bancorp's per share data and market price information is
    stated as if the 5% stock dividends declared in 2001 occurred January 1,
    2000.



                   FIRST FINANCIAL BANCORP   31   2001 ANNUAL REPORT

EX-21

EXHIBIT 21


FIRST FINANCIAL BANCORP. SUBSIDIARIES

First National Bank of Southwestern Ohio, organized as a national banking
association under the laws of the United States

Community First Bank & Trust, incorporated in the state of Ohio

Indiana Lawrence Bank, incorporated in the state of Indiana

Fidelity Federal Savings Bank, organized as a federal stock savings bank under
the laws of the United States

Citizens First State Bank, incorporated in the state of Indiana

The Clyde Savings Bank Company, incorporated in the state of Ohio

Bright National Bank, organized as a national banking association under the laws
of the United States

National Bank of Hastings, organized as a national banking association under the
laws of the United States

Sand Ridge Bank, incorporated in the state of Indiana

Hebron Deposit Bank, incorporated in the commonwealth of Kentucky

Heritage Community Bank, incorporated in the state of Indiana

First Financial Bancorp Service Corporation, incorporated in the state of Ohio

Flagstone Insurance and Financial Services Holding Company, incorporated in the
state of Ohio

EX-23

EXHIBIT 23


CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


We consent to the incorporation by reference in this Annual Report (Form 10-K)
of First Financial Bancorp. of our report dated January 17, 2002 included in the
2001 Annual Report to Shareholders of First Financial Bancorp.

We also consent to the incorporation by reference of our report dated January
17, 2002 with respect to the consolidated financial statements of First
Financial Bancorp incorporated by reference in the Annual Report (Form 10-K) for
the year ended December 31, 2001 in the following documents:

- -    Registration Statement (Form S-8 No. 33-46819) pertaining to the First
     Financial Bancorp 1991 Stock Incentive Plan and in the related Prospectus.

- -    Registration Statement (Form S-8 No. 333-86781) pertaining to the First
     Financial Bancorp 1999 Stock Incentive Plan for Officers and Employees and
     in the related Prospectus.

- -    Registration Statement (Form S-8 No. 333-86781) pertaining to the First
     Financial Bancorp 1999 Stock Incentive Plan for Non-Employee Directors and
     in the related Prospectus.

- -    Registration Statement (Form S-3 No. 333-25745) pertaining to the First
     Financial Bancorp. Dividend Reinvestment and Share Purchase Plan and in the
     related Prospectus


 /s/ Ernst & Young LLP

Ernst & Young LLP


March 11, 2002
Cincinnati, Ohio