8-K

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 25, 2012

FIRST FINANCIAL BANCORP.

(Exact name of registrant as specified in its charter)

Ohio	0-12379	31-1042001
(State or other jurisdiction	(Commission File	(IRS Employer
of incorporation)	Number)	Identification No.)
201 East Fourth Street, Suite 1900		45202
Cincinnati, Ohio		(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (877) 322-9530

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Form 8-K First Financial Bancorp.

Item 2.02         Results of Operations and Financial Condition.

On January 25, 2012, First Financial Bancorp. issued its earnings press release that included the results of operations and financial condition for the fourth quarter and year ended of 2011. A copy of the earnings press release is attached as Exhibit 99.1.

The earnings press release includes some non-GAAP financial measures. The first non-GAAP financial measure, Net interest margin (fully tax equivalent), appears in the table entitled “Consolidated Financial Highlights” under the section “Key Financial Ratios.” It also appears in the two tables entitled “Consolidated Quarterly Statements of Income”, as well as the “Consolidated Statements of Income” under “Additional Data”. The second non-GAAP measure appears in the tables entitled “Additional Data” at the bottom of the two “Consolidated Quarterly Statements of Income” pages and the “Consolidated Statements of Income” page. The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

Below is a table showing “net interest income” calculated and presented in accordance with GAAP and the adjustments made to arrive at the non-GAAP financial measure “net interest income – tax equivalent.” The table also shows “net interest margin” calculated and presented in accordance with GAAP and the method used to arrive at the non-GAAP financial measure “net interest margin (fully tax equivalent).”

	Three Months Ended															Twelve Months Ended
	Dec. 31,			Sep. 30,			June 30,			Mar. 31,			Dec. 31,			December 31,
	2011			2011			2011			2011			2010			2011			2010
	(Dollars in thousands)
Net interest income	$	65,476		$	65,218		$	65,867		$	67,335		$	67,906		$	263,896		$	275,510
Tax equivalent adjustment		265			236			240			238			220			979			866
Net interest income - tax equivalent	$	65,741		$	65,454		$	66,107		$	67,573		$	68,126		$	264,875		$	276,376
Average earning assets		6,014,136			5,687,036			5,733,604			5,772,224			5,792,624			5,802,098			5,907,399
Net interest margin*		4.32	%		4.55	%		4.61	%		4.73	%		4.65	%		4.55	%		4.66	%
Net interest margin (fully tax equivalent)*		4.34	%		4.57	%		4.62	%		4.75	%		4.67	%		4.57	%		4.68	%

*  Margins are calculated using net interest income annualized divided by average earning assets. 

The earnings press release also includes some non-GAAP ratios in the “Consolidated Financial Highlights” page. These ratios are: (1) Return on average tangible common shareholders' equity; (2) Ending tangible common equity as a percent of ending tangible assets; (3) Ending tangible common equity as a percent of risk-weighted assets; (4) Average tangible common equity as a percent of average tangible assets; and (5) Tangible book value per common share. The Ending tangible common equity as a percent of ending tangible assets and Average tangible common equity as a percent of average tangible assets are also shown in the “Regulatory Capital” section of the “Capital Adequacy” page in the earnings release. The following table provides a reconciliation of these ratios to GAAP. The Company considers these critical metrics with which to analyze banks. The ratios have been included in the earnings press release to facilitate a better understanding of the Company’s capital structure and financial condition.

	Three Months Ended															Twelve Months Ended
	Dec. 31,			Sep. 30,			June 30,			Mar. 31,			Dec. 31,			December 31,
	2011			2011			2011			2011			2010			2011			2010
	(Dollars in thousands, except per share data)
Net income available to common shareholders (a)	$	17,941		$	15,618		$	15,973		$	17,207		$	14,300		$	66,739		$	57,386
Average total shareholders' equity	$	719,964		$	725,809		$	707,750		$	695,062		$	697,016		$	712,252		$	682,987
Less:
Average Preferred stock		0			0			0			0			0			0			(11,717	)
Goodwill		(95,050	)		(68,922	)		(51,820	)		(51,820	)		(51,820	)		(95,050	)		(51,820	)
Intangible assets		(10,844	)		(8,436	)		(4,847	)		(5,227	)		(5,604	)		(10,844	)		(5,604	)
Average tangible common equity (b)		614,070			648,451			651,083			638,015			639,592			606,358			613,846
Add back: Average preferred stock		0			0			0			0			0			0			11,717
Average tangible shareholders' equity (c)		614,070			648,451			651,083			638,015			639,592			606,358			625,563
Total shareholders' equity		712,221			727,132			721,762			707,964			697,394			712,221			697,394
Less:
Preferred stock		0			0			0			0			0			0			0
Goodwill		(95,050	)		(68,922	)		(51,820	)		(51,820	)		(51,820	)		(95,050	)		(51,820	)
Intangible assets		(10,844	)		(8,436	)		(4,847	)		(5,227	)		(5,604	)		(10,844	)		(5,604	)
Tangible common equity (d)		606,327			649,774			665,095			650,917			639,970			606,327			639,970
Total assets		6,671,511			6,337,729			6,041,607			6,314,481			6,250,225			6,671,511			6,250,225
Less:
Goodwill		(95,050	)		(68,922	)		(51,820	)		(51,820	)		(51,820	)		(95,050	)		(51,820	)
Intangible assets		(10,844	)		(8,436	)		(4,847	)		(5,227	)		(5,604	)		(10,844	)		(5,604	)
Ending tangible assets (e)		6,565,617			6,260,371			5,984,940			6,257,434			6,192,801			6,565,617			6,192,801
Risk-weighted assets (f)		3,645,403			3,518,026			3,384,115			3,375,800			3,687,224			3,645,403			3,687,224
Total average assets		6,515,756			6,136,815			6,219,754			6,266,408			6,270,480			6,284,961			6,485,632
Less:
Goodwill		(95,050	)		(68,922	)		(51,820	)		(51,820	)		(51,820	)		(95,050	)		(51,820	)
Intangible assets		(10,844	)		(8,436	)		(4,847	)		(5,227	)		(5,604	)		(10,844	)		(5,604	)
Average tangible assets (g)		6,409,862			6,059,457			6,163,087			6,209,361			6,213,056			6,179,067			6,428,208
Ending common shares outstanding (h)		58,267,054			58,256,136			58,259,440			58,286,890			58,064,977			58,267,054			58,064,977
Ratios
Return on average tangible common shareholders' equity (a)/(b)		11.59	%		9.56	%		9.84	%		10.94	%		8.87	%		11.01	%		9.35	%
Ending tangible common equity as a percent of:
Ending tangible assets (d)/(e)		9.23	%		10.38	%		11.11	%		10.40	%		10.33	%		9.23	%		10.33	%
Risk-weighted assets (d)/(f)		16.63	%		18.47	%		19.65	%		19.28	%		17.36	%		16.63	%		17.36	%
Average tangible common equity as a percent of average tangible assets (b)/(g)		9.58	%		10.70	%		10.56	%		10.28	%		10.29	%		9.81	%		9.55	%
Tangible book value per common share (d)/(h)	$	10.41		$	11.15		$	11.42		$	11.17		$	11.02		$	10.41		$	11.02
Average tangible shareholders' equity to average tangible assets (c)/(g)		9.58	%		10.70	%		10.56	%		10.28	%		10.29	%		9.81	%		9.73	%

First Financial Bancorp also provided electronic presentation slides on its web site used in connection with the earnings conference call. A copy of the electronic presentation slides is included in this Report as Exhibit 99.2.

Item 9.01 Exhibits.

(d)          Exhibits:

The following exhibits shall not be deemed to be “filed” for purposes of the Securities Act.

99.1        First Financial Bancorp. Press Release dated January 25, 2012 – Furnished.

99.2         First Financial Bancorp. January 26, 2012 Earnings Call slides – Furnished.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FIRST FINANCIAL BANCORP.
By:	/s/ J. Franklin Hall
	J. Franklin Hall
	Executive Vice President, Chief Financial Officer
	and Chief Operating Officer

Date: January 25, 2012

Form 8-K First Financial Bancorp.

Exhibit Index

Exhibit No.	Description
99.1	First Financial Bancorp. Press Release dated January 25, 2012.
99.2	First Financial Bancorp. January 26, 2012 Earnings Call slides.

EX-99.1

 

First Financial Bancorp Reports Fourth Quarter and Full Year 2011 Financial Results and Continuation of Variable Dividend

Cincinnati, Ohio – January 25, 2012 – First Financial Bancorp (Nasdaq: FFBC) (“First Financial” or the “Company”) announced today financial and operational results for the fourth quarter 2011 and for the twelve month period ended December 31, 2011.

Fourth quarter 2011 net income was $17.9 million and earnings per diluted common share were $0.31. This compares with third quarter 2011 net income of $15.6 million and earnings per diluted common share of $0.27 and fourth quarter 2010 net income of $14.3 million and earnings per diluted common share of $0.24.

The board of directors has also authorized a regular dividend of $0.12 per common share and a variable dividend of $0.19 per common share for the next regularly scheduled dividend, payable on April 2, 2012 to shareholders of record as of March 2, 2012. This is a continuation of the 100% dividend payout ratio first announced in the second quarter 2011 and is expected to continue until capital ratios migrate closer to the Company’s previously stated thresholds or capital utilization rates exceed capital generation rates.

For the twelve month period ended December 31, 2011, net income and net income available to common shareholders were $66.7 million and earnings per diluted common share were $1.14 as compared to net income of $59.3 million, net income available to common shareholders of $57.4 million and earnings per diluted common share of $0.99 for the twelve month period ended December 31, 2010.

● 85th consecutive quarter of profitability

● Strong quarterly and annual growth in diluted earnings per common share

– Fourth quarter 2011 increased 14.8% compared to linked quarter

– Full year 2011 increased 15.2% compared to full year 2010

● Quarterly adjusted pre-tax, pre-provision income remained solid, totaling $31.5 million, or 1.92% of average assets

● Continued strong performance

– Quarterly return on average assets of 1.09%; full year return on average assets of 1.06%

– Quarterly return on risk-weighted assets of 1.95%; full year return on risk-weighted assets of 1.83%

– Quarterly return on average shareholders’ equity of 9.89%; full year return on average shareholders’ equity of 9.37%

● Strong loan growth in key uncovered loan portfolios compared to the third quarter 2011

– Commercial loan balances increased 16.6% on an annualized basis

– Commercial real estate balances increased 10.2% on an annualized basis

● Flagstar branch acquisition closed and fully integrated on December 2, 2011

– Assumed total deposits of $464.7 million, including $342.0 million of deposits associated with branch locations and $122.7 million of public deposits

– Recognized goodwill of $26.1 million and core deposit intangible asset of $3.0 million

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● Capital ratios remain high after closing of Flagstar branch acquisition and continuation of variable dividend

– Tangible common equity to tangible assets of 9.23%

– Tier 1 capital ratio of 17.47%

– Total risk-based capital of 18.74%

● Quarterly net interest margin remained strong at 4.32%

– Yield on covered loans continues to enhance net interest margin

– Strategic initiatives related to deposits continued to produce positive results as cost of deposit funding declined 12 bps compared to third quarter 2011

● Lower credit costs driven by performance in the uncovered loan portfolio

– Quarterly total provision for loan and lease losses declined 19% compared to the linked quarter

– Annual total provision for loan and lease losses declined 13.9% compared to 2010

● Continued downward trend in nonperforming and classified assets

– Total nonperforming assets declined $10.1 million, or 10.4%, compared to the fourth quarter 2010

– Nonperforming assets to total assets declined to 1.31% as compared to 1.40% as of September 30, 2011 and 1.57% as of December 31, 2010

– Total classified assets declined $10.2 million, or 5.9%, compared to the linked quarter and $39.8 million, or 19.7%, compared to December 31, 2010

● Balance sheet risk remains low

– FDIC loss share coverage on 26.2% of loan portfolio

– 100% risk-weighted assets continue to represent less than 50% of balance sheet

During the quarter, the Company incurred certain pre-tax expenses that are not expected to recur of $3.5 million, or $0.04 per diluted share after taxes. Approximately $1.0 million, or $0.01 per fully diluted share after taxes, was related to its acquisition of retail banking centers from Flagstar Bank (“Flagstar”) and approximately $2.5 million, or $0.03 per fully diluted share after taxes, was related to lease termination and other real estate expenses associated with exit and transition activities. Additionally, the Company recognized pre-tax gains of $2.5 million resulting from the sales of investment securities, or $0.03 per diluted share after taxes.

Claude Davis, President and Chief Executive Officer, commented, “During 2011, we maintained a prudent balance between capitalizing on growth opportunities and focusing on the execution of our community bank business model. We produced solid and consistent earnings throughout the year driven by a continued focus on operating efficiency, implementation of deposit rationalization strategies and lower credit costs. As a result, our diluted earnings per common share totaled $0.31 for the fourth quarter and $1.14 for the year, representing increases of 29.2% and 15.2%, respectively, over the comparable periods in 2010.

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“Related to the acquisitions we made during the year, we closed the Flagstar branch transaction during the fourth quarter and successfully completed the conversion of the acquired relationships and operations. Combined with the Liberty branch transaction that closed near the end of the third quarter, we added 38 new banking centers with approximately $730 million of new client deposits as of December 31, 2011. The vast majority of these new banking centers is located in the metropolitan areas of Dayton and Indianapolis and will allow us to accelerate our growth plans in these key strategic markets within our footprint.

“Loan growth was challenging during much of 2011 as the local economies within our strategic markets continue to experience headwinds in their recovery. Our total uncovered loan portfolio increased 5.4% year-over-year, benefiting from the performing loans we acquired as part of the Liberty acquisition. During the fourth quarter, we were able to capitalize on our strong commercial and commercial real estate pipeline as total originations and renewals increased significantly. As a result, the commercial and commercial real estate portfolios exhibited strong growth increasing 16.6% and 10.2%, respectively, on an annualized basis compared to the linked quarter. Excluding loans acquired from Liberty, the commercial and commercial real estate portfolios increased 6.4% and 4.7%, respectively, compared to December 31, 2010. While we still face challenges in continuing to build off our recent success in growing the C&I and commercial real estate portfolios, the level of existing commitments and pipeline of new business opportunities remains healthy and leaves us well-positioned as we enter 2012.” 

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SECTION I – RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest income on a fully tax-equivalent basis for the fourth quarter 2011 was $65.7 million as compared to $65.5 million for the third quarter 2011 and $68.1 million as compared to the year-over-year period. Compared to the linked quarter, total interest income decreased $1.0 million, or 1.3% during the fourth quarter 2011 as a result of lower interest income earned on both loans and investment securities. The lower interest income earned on loans was driven primarily by a 6.9% decrease in the balance of average covered loans outstanding, partially offset by a 6.1% increase in average uncovered loan balances during the quarter resulting from loans acquired in connection with the acquisition of retail banking centers from Liberty Savings Bank (“Liberty”), which occurred late in the third quarter 2011, as well as strong organic growth in the commercial and commercial real estate portfolios. While the average balance of investment securities increased during the quarter, the yield on the portfolio declined 26 bps, resulting in lower interest income earned compared to the third quarter. The decline in total interest income was offset by the decrease in total interest expense of $1.2 million, or 11.4%, due primarily to lower interest expense on deposits.

For the twelve month period ended December 31, 2011, net interest income on a fully tax-equivalent basis was $264.9 million as compared to $276.4 million for the comparable period in 2010. The decrease was driven by a decline in average covered loan balances of 26.8% and the reduced yield on the FDIC indemnification asset, offset partially by higher interest income from investments and lower funding costs.

NET INTEREST MARGIN

Net interest margin was 4.32% for the fourth quarter 2011 as compared to 4.55% for the third quarter 2011 and 4.65% for the fourth quarter 2010. Net interest margin was negatively impacted by an increase in interest-earning assets from acquisitions and the continued amortization and paydowns in the covered loan portfolio. However, yields remained strong on covered loans, helping to offset the decline in the balance outstanding. Also offsetting the decline in covered loan balances was the yield earned on the higher average uncovered loan balances. Average cash balances remained elevated during the quarter as cash received in connection with the Liberty and Flagstar acquisitions had yet to be fully deployed through investment purchases, placing additional pressure on net interest margin. The Company used some cash from the acquisitions to purchase $416.6 million of investment securities, not including securities purchased as part of the duration extension strategy discussed in Investments below. The majority of these purchases did not occur until midway through the quarter or later including $228.8 million that did not settle until very late in the quarter. A full quarter’s impact of these late settlement purchases would have benefited net interest margin by 8 bps. Additionally, strategic initiatives related to deposits implemented during the third quarter continued to offset the impact of lower earning asset yields as the cost of interest-bearing deposits continued to decline, decreasing 14 bps during the fourth quarter.

Net interest margin for the twelve month period ended December 31, 2011 decreased to 4.55% as compared to 4.66% for the twelve month period ended December 31, 2010. The year-over-year decrease was driven primarily by the substantial decline in the average balance of the higher yielding covered loan portfolio, partially offset by an increase in the average balance of investment securities and a significant decline in the cost of deposit and other interest-bearing liability funding.

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NONINTEREST INCOME

The following table presents noninterest income for the three months ended December 31, 2011, September 30, 2011 and December 31, 2010 as well as for the twelve months ended December 31, 2011 and 2010 highlighting the estimated impact of covered loan activity and other transition items on the Company’s reported balance.

Table I
	For the Three Months Ended						For the Twelve Months Ended
	December 31,		September 30,		December 31,		December 31,			December 31,
(Dollars in thousands)	2011		2011		2010		2011			2010
Total noninterest income	$	29,640	$	28,115	$	34,534	$	142,531		$	146,831
Certain significant components of noninterest income
Items likely to recur:
Accelerated discount on covered loans 1, 2		4,775		5,207		6,113		20,521			29,067
FDIC loss sharing income		7,433		8,377		11,306		60,888			51,844
Other acquired-non-strategic items		64		98		527		(875	)		1,127
Transition-related items		—		—		—		—			366
Items expected not to recur:
Gain on sale of insurance business		—		—		—		—			1,356
Other items not expected to recur		2,270		288		551		2,531			3,349
Total excluding items noted above	$	15,098	$	14,145	$	16,037	$	59,466		$	59,722

¹  See Section II for additional information    

²   Net of the corresponding valuation adjustment on the FDIC indemnification asset 

During the quarterly periods presented above, excluding reimbursements due from the FDIC resulting from loss share agreements, covered loan activity continued to positively impact noninterest income due to loan sales and prepayments. This activity is discussed in more detail in Section II.

Excluding the items highlighted in Table I, estimated noninterest income earned in the fourth quarter 2011 was $15.1 million as compared to $14.1 million in the third quarter 2011 and $16.0 million in the fourth quarter 2010. The increase compared to the linked quarter was due to higher service charges on deposits and bankcard income resulting from the Liberty and Flagstar transactions as well as higher trust and wealth management fees and a credit valuation adjustment related to client derivatives. Included in other items not expected to recur are $2.5 million of gains on sales of investment securities which are discussed in more detail in Investments.

On a comparable basis, estimated noninterest income for the twelve months ended December 31, 2011 was $59.5 million as compared to $59.7 million for the twelve months ended December 31, 2010.

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NONINTEREST EXPENSE

The following table presents noninterest expense for the three months ended December 31, 2011, September 30, 2011 and December 31, 2010 as well as for the twelve months ended December 31, 2011 and 2010 including the estimated effect of acquired-non-strategic operations, acquisition-related costs and other transition items.

Table II
	For the Three Months Ended								For the Twelve Months Ended
	December 31,			September 30,			December 31,		December 31,		December 31,
(Dollars in thousands)	2011			2011			2010		2011		2010
Total noninterest expense	$	54,668		$	53,142		$	56,290	$	218,097	$	233,680
Certain significant components of noninterest expense
Items likely to recur:
Acquired-non-strategic operating expenses 1		(27	)		(407	)		4,052		6,150		8,089
Transition-related items 1		—			(111	)		684		246		9,114
FDIC loss share support		1,333			1,382			1,160		4,867		3,578
Loss share and covered asset expense		2,521			3,755			616		12,823		616
Items expected not to recur:
Acquisition-related costs 1		1,167			1,875			412		3,234		6,725
FHLB prepayment penalty		—			—			—		—		8,029
Other items not expected to recur		2,473			1,874			1,787		9,449		5,686
Total excluding items noted above	$	47,201		$	44,774		$	47,579	$	181,328	$	191,843

¹  See Section II for additional information     

Noninterest expense continued to be affected by items related to the Company’s acquired-non-strategic operations, as discussed in more detail in Section II.

Excluding the items highlighted in Table II, estimated noninterest expense in the fourth quarter 2011 was $47.2 million as compared to $44.8 million in the third quarter 2011 and $47.6 million in the fourth quarter 2010. The increase of $2.4 million compared to the linked quarter was due to higher salaries and employee benefits expense, occupancy costs and core deposit intangible amortization resulting from the Liberty and Flagstar transactions as well as higher professional services fees and valuation adjustments to uncovered OREO. Loss share and covered asset expense includes $0.8 million of losses on covered OREO and $1.7 million of other credit-related expenses. Included in acquisition-related costs are $1.0 million of expenses related to the Flagstar acquisition and included in other items not expected to recur are $2.5 million of lease termination and other real estate expenses associated with exit and transition activities.

On a comparable basis, estimated noninterest expense for the twelve months ended December 31, 2011 was $181.3 million as compared to $191.8 million for the twelve months ended December 31, 2010. The decrease of $10.5 million, or 5.5%, was primarily attributable to lower salaries and benefits, occupancy costs and FDIC assessments.

Certain wind-down costs related to subsidiaries acquired in 2009 are expected to continue through much of 2012.

INCOME TAXES

For the fourth quarter 2011, income tax expense was $10.4 million, resulting in an effective tax rate of 36.8%, compared with income tax expense of $9.7 million and an effective tax rate of 38.2% during the third quarter 2011 and $8.1 million and an effective tax rate of 36.2% during the comparable year-over-year period. The decrease in the effective tax rate during the fourth quarter 2011 compared to the linked quarter was due to typical adjustments made during the third quarter resulting from the completion of the 2010 federal and state tax returns.

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For the twelve month period ended December 31, 2011, income tax expense was $38.3 million, resulting in an effective tax rate of 36.5%, compared with income tax expense of $32.7 million and an effective tax rate of 35.6% during the twelve months ended December 31, 2010.

CREDIT QUALITY – EXCLUDING COVERED ASSETS

The following table presents certain credit quality metrics related to the Company’s uncovered loan portfolio as of December 31, 2011 and for the trailing four quarters. 

Table III
	As of or for the Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2011			2011			2011			2011			2010
Total nonaccrual loans	$	54,299		$	59,150		$	56,536		$	62,048		$	62,302
Restructured loans - accruing		4,009			4,712			3,039			3,923			3,508
Restructured loans - nonaccrual		18,071			12,571			14,443			14,609			14,105
Total restructured loans		22,080			17,283			17,482			18,532			17,613
Total nonperforming loans		76,379			76,433			74,018			80,580			79,915
Total nonperforming assets		87,696			88,436			90,331			95,533			97,822
Nonperforming assets as a % of:
Period-end loans plus OREO		2.94	%		3.00	%		3.22	%		3.42	%		3.45	%
Total assets		1.31	%		1.40	%		1.50	%		1.51	%		1.57	%
Nonperforming loans as a % of total loans		2.57	%		2.60	%		2.65	%		2.90	%		2.84	%
Provision for loan and lease losses - uncovered	$	5,164		$	7,643		$	5,756		$	647		$	9,741
Allowance for uncovered loan & lease losses	$	52,576		$	54,537		$	53,671		$	53,645		$	57,235
Allowance for loan & lease losses as a % of:
Period-end loans		1.77	%		1.86	%		1.92	%		1.93	%		2.03	%
Nonaccrual loans 1		96.8	%		92.2	%		94.9	%		86.5	%		91.9	%
Nonperforming loans		68.8	%		71.4	%		72.5	%		66.6	%		71.6	%
Total net charge-offs	$	7,125		$	6,777		$	5,730		$	4,237		$	9,755
Annualized net-charge-offs as a % of average
loans & leases		0.95	%		0.96	%		0.83	%		0.61	%		1.39	%

¹ Excludes nonaccrual restructured loans 

Net Charge-offs

Fourth quarter 2011 net charge-offs were $7.1million, or 0.95% of average loans and leases, compared with $6.8 million, or 0.96%, for the linked quarter and $9.8 million, or 1.39%, for the comparable year-over-year quarter. Significant items driving net charge-offs for the quarter included $1.7 million related to two separate residential development credits, $1.0 million related to a multifamily real estate loan, $0.5 million related to a commercial real estate credit and $0.4 million related to a commercial loan.

For the twelve months ended December 31, 2011, net charge-offs were $23.9 million, or 0.84% of average loans and leases, as compared to $35.6 million, or 1.27%, for the twelve months ended December 31, 2010.

Nonperforming Assets

Nonperforming loans totaled $76.4 million and nonperforming assets totaled $87.7 million as of December 31, 2011 compared with $76.4 million and $88.4 million, respectively, for the linked quarter and $79.9 million and $97.8 million, respectively, for the comparable year-over-year quarter. Nonaccrual loans, including nonaccrual restructured loans, totaled $72.4 million as of December 31, 2011 compared to $71.7 million as of September 30, 2011, representing an increase of $0.6 million, or 0.9%, as additions were essentially offset by credits removed from nonaccrual status due to the finalization of resolution strategies.

-7 -

New accounting guidance related to troubled debt restructurings took effect during the third quarter 2011 and was applied by the Company in its accounting for loans classified as restructured. The increase of $5.5 million in nonaccrual restructured loans during the fourth quarter 2011 was driven primarily by renewals and term extensions of loans in various stages of resolution that were already on nonaccrual status. This activity was the primary reason for the decline of $4.9 million in nonaccrual loans not classified as restructured.

OREO decreased $0.7 million, or 5.7%, during the fourth quarter driven primarily by a $0.5 million valuation adjustment related to a single commercial property.

Classified assets as of December 31, 2011 totaled $162.4 million as compared to $172.6 million for the linked quarter and $202.1 million as of December 31, 2010, representing declines of 5.9% and 19.7%, respectively. Classified assets, which have declined for six consecutive quarters, are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse.

Delinquent Loans

Loans 30-to-89 days past due totaled $20.4 million, or 0.69% of period end loans, as of December 31, 2011. This compares to $19.5 million, or 0.66%, as of September 30, 2011 and $22.3 million, or 0.79%, as of December 31, 2010. The increase of $0.9 million, or 4.7%, compared to the linked quarter resulted from higher delinquencies in the commercial real estate portfolios, partially offset by a decrease in commercial delinquencies.

Provision for Loan & Lease Losses

Fourth quarter 2011 provision expense related to uncovered loans and leases was $5.2 million as compared to $7.6 million during the linked quarter and $9.7 million during the comparable year-over-year quarter. Provision expense for the full year 2011 totaled $19.2 million, representing a decline of 42.8% compared to the full year 2010. Provision expense is a result of the Company’s modeling efforts to estimate the period end allowance for loan and lease losses. The decreases relative to the linked and comparable quarters as well as for the full year are driven primarily by the positive migration trends in classified assets as well as the impact on the loan portfolio of improving macro-economic trends. As a percentage of net charge-offs, fourth quarter 2011 provision expense equaled 72.5%.

Allowance for Loan and Lease Losses

As of December 31, 2011, the allowance for uncovered loan and lease losses was $52.6 million as compared to $54.5 million as of September 30, 2011 and $57.2 million as of December 31, 2010. As a percentage of period-end loans, the allowance for loan and lease losses was 1.77% as of December 31, 2011 as compared to 1.86% as of September 30, 2011 and 2.03% as of December 31, 2010. The allowance for loan and lease losses as of December 31, 2011 reflects management’s estimate of credit risk inherent in the Company’s uncovered loan portfolio at that time.

-8 -

LOANS (EXCLUDING COVERED LOANS)

The following table presents the loan portfolio, not including covered loans, as of December 31, 2011, September 30, 2011 and December 31, 2010.

Table IV
	As of
	December 31, 2011				September 30, 2011				December 31, 2010
			Percent				Percent				Percent
(Dollars in thousands)		Balance	of Total			Balance	of Total			Balance	of Total
Commercial	$	856,981	28.9	%	$	822,552	28.0	%	$	800,253	28.4	%
Real estate - construction		114,974	3.9	%		136,651	4.7	%		163,543	5.8	%
Real estate - commercial		1,233,067	41.5	%		1,202,035	40.9	%		1,139,931	40.5	%
Real estate - residential		287,980	9.7	%		300,165	10.2	%		269,173	9.6	%
Installment		67,543	2.3	%		70,034	2.4	%		69,711	2.5	%
Home equity		358,960	12.1	%		362,919	12.4	%		341,310	12.1	%
Credit card		31,631	1.1	%		30,435	1.0	%		29,563	1.0	%
Lease financing		17,311	0.6	%		12,870	0.4	%		2,609	0.1	%
Total	$	2,968,447	100.0	%	$	2,937,661	100.0	%	$	2,816,093	100.0	%

Loans, excluding covered loans, totaled $3.0 billion at the end of the fourth quarter 2011, representing a $30.8 million increase, or 4.2% on an annualized basis, compared to the third quarter 2011. Commercial loan origination activity was strong as balances increased $34.4 million, or 16.6% on an annualized basis, during the quarter. The commercial real estate portfolio experienced growth as well increasing $31.0 million during the quarter, or 10.2% on an annualized basis.

As of December 31, 2011, total uncovered loan balances increased $152.4 million, or 5.4%, as compared to December 31, 2010. Excluding loan balances acquired in connection with the Liberty acquisition, total uncovered loans increased $38.3 million, or 1.4%, during 2011. Compared to balances as of December 31, 2010 and excluding loans acquired from Liberty, the commercial and commercial real estate portfolios increased 6.4% and 4.7%, respectively, during 2011.

During the fourth quarter 2011, the Company sold approximately $7.3 million of loans originated by its franchise finance unit at a premium, recognizing a gain of approximately $0.3 million. As a liquid secondary market exists for these types of credits, the sale was conducted to lessen credit and geographic concentration risk within the franchise portfolio.

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INVESTMENTS

The following table presents a summary of the total investment portfolio at December 31, 2011.

Table V
	As of December 31, 2011
	Book		Percent of			Book		Cost		Market		Gain/
(Dollars in thousands)	Value		Total			Yield		Basis		Value		(Loss)
Agencies	$	46,190		3.0	%		3.16		99.96		100.90	$	433
CMOs (agency)		682,867		45.0	%		2.03		101.82		102.68		5,772
CMOs (private)		30		0.0	%		1.08		100.00		100.35		—
MBSs (agency)		680,571		44.9	%		3.05		103.01		105.11		13,593
		1,409,658		93.0	%		2.56		102.33		103.78		19,798
Municipal		11,960		0.8	%		7.16		99.71		102.59		343
Other 1		94,384		6.2	%		3.77		102.62		103.10		444
		106,344		7.0	%		4.15		102.29		103.04		787
Total investment portfolio	$	1,516,002		100.0	%		2.67		102.33		103.73	$	20,585

Net Unrealized Gain/(Loss)	$	20,585
Aggregate Gains		22,707
Aggregate Losses		(2,122	)
Net Unrealized Gain/(Loss) % of Book Value		1.36	%

¹  Other includes $71.5 million of regulatory stock       

The investment portfolio increased $321.6 million during the fourth quarter 2011 as cash received as part of the Liberty and Flagstar transactions was used to purchase securities, offset by amortizations and paydowns in the portfolio. In addition to $190.7 million of cash received in connection with the Liberty transaction that had yet to be deployed as of September 30, 2011, the Company received $429.9 million upon closing of the Flagstar transaction during the quarter. The Company purchased $578.2 million of securities, consisting primarily of agency MBS, with a weighted average yield of 2.38% and duration of 3.5 years. However, $161.6 million of those purchases were executed as part of a strategy to increase the duration of the portfolio under which $162.6 million of shorter duration securities were sold and replaced with the longer duration purchases. The Company recognized a pre-tax gain of $2.5 million in connection with the securities that were sold. As of December 31, 2011, the overall duration of the investment portfolio increased to 2.4 years from 1.0 years as of September 30, 2011.

The Company also began to diversify its portfolio during the quarter as a portion of the purchases consisted of investment grade single issuer trust preferred securities. These securities have a weighted average yield of 6.17%. The Company has purchased a limited amount of these securities during the first quarter 2012 and will continue to do so in future periods on a selective basis. The maximum targeted exposure related to these types of securities is 10% of the total investment portfolio.

During the first quarter 2012, the Company has continued to deploy cash balances in the investment portfolio, purchasing $131.4 million of securities, primarily agency MBS, with a weighted average yield of 2.75% and duration of 3.9 years. The addition of longer duration securities during the fourth quarter 2011 and first quarter 2012 was executed in conjunction with the Company’s overall asset/liability objectives and interest rate risk modeling activities, and, to a lesser extent, market and rate expectations.

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DEPOSITS

Non-time deposit balances totaled $4.0 billion as of December 31, 2011, representing an increase of $347.1 million compared to September 30, 2011. The growth was driven in large measure by deposits assumed in connection with the Flagstar acquisition, accounting for $272.4 million of the quarterly increase. Excluding the Flagstar activity, non-time deposit accounts increased $74.7 million, or 8.1% on an annualized basis. Compared to balances as of December 31, 2010, total non-time deposits increased $636.8 million, or 19.0%. Excluding deposits assumed related to the Liberty and Flagstar transactions, non-time deposit accounts increased $203.5 million, or 6.1%, during 2011.

Total time deposit balances decreased slightly during the fourth quarter as compared to the linked quarter, which include balances assumed from Flagstar totaling $159.6 million as of December 31, 2011. In connection with the Company’s deposit rationalization strategies and efforts to reduce non-core relationship deposits, time deposit balances declined $163.0 million during the fourth quarter excluding the Flagstar accounts. For the full year 2011 and excluding balances assumed from both Liberty and Flagstar, time deposit balances declined $433.4 million, or 24.1%.

The Company’s deposit rationalization strategies related to deposit pricing continued to have a positive impact as the cost of funds related to interest bearing deposits declined to 75 bps for the fourth quarter compared to 89 bps for the linked quarter and 116 bps for the fourth quarter 2010. The Company’s total cost of deposit funding declined to 64 bps for the quarter, a decrease of 15.8% compared to the prior quarter and 35.4% compared to the fourth quarter 2010.

CAPITAL MANAGEMENT

The following table presents First Financial’s regulatory and other capital ratios as of December 31, 2011, September 30, 2011 and December 31, 2010.

Table VI
	As of
	December 31,			September 30,			December 31,			"Well-Capitalized"
	2011			2011			2010			Minimum
Leverage Ratio		9.87	%		10.87	%		10.89	%		5.00	%
Tier 1 Capital Ratio		17.47	%		18.81	%		18.45	%		6.00	%
Total Risk-Based Capital Ratio		18.74	%		20.08	%		19.72	%		10.00	%
Ending tangible shareholders' equity
to ending tangible assets		9.23	%		10.38	%		10.33	%		N/A
Ending tangible common shareholders'
equity to ending tangible assets		9.23	%		10.38	%		10.33	%		N/A

Regulatory capital ratios and tangible common equity decreased during the fourth quarter 2011 primarily as a result of the goodwill and core deposit intangible asset recognized in connection with the Flagstar transaction, which totaled $26.1 million and $3.0 million, respectively. Furthermore, shareholders’ equity was negatively impacted by an increase in accumulated other comprehensive loss of $18.1 million primarily as a result of valuation adjustments related to the Company’s pension asset and benefit obligation. A 114 bp decline in the discount rate used to value the pension benefit obligation coupled with the actual return on plan assets contributed to the valuation adjustments. First Financial’s pension plan remains significantly over-funded and as a result recognized pension income of $0.3 million during the fourth quarter. Additionally, there was no contribution to tangible shareholders’ equity from third quarter 2011 earnings as a result of the variable dividend / 100% payout ratio paid during the quarter. As of December 31, 2011, tangible book value per common share was $10.41 compared to $11.15 as of September 30, 2011 and $11.02 as of December 31, 2010. Regulatory capital ratios as of December 31, 2011 are considered preliminary pending the filing of the Company’s regulatory reports.   

-11 -

SECTION II – SUPPLEMENTAL INFORMATION ON COVERED ASSETS AND ACQUISITION-RELATED ITEMS

To assist in analyzing the effect of the Company’s 2009 FDIC assisted transactions and the Liberty and Flagstar branch transaction on the financial results, supplemental information that segregates the estimated impact on pre-tax earnings of certain acquisition-related items and provides additional detail on the covered loan portfolio follows.

SUMMARY OF SIGNIFICANT ACQUISITION-RELATED ITEMS

The following table illustrates the estimated effect of certain acquisition-related items on the results of operations for the three months ended December 31, 2011, September 30, 2011 and December 31, 2010 as well as for the twelve months ended December 31, 2011 and 2010.

Table VII
	For the Three Months Ended								For the Twelve Months Ended
	December 31,			September 30,			December 31,		December 31,			December 31,
(Dollars in thousands)	2011			2011			2010		2011			2010
Income effect:
Accelerated discount on covered loans 1, 2	$	4,775		$	5,207		$	6,113	$	20,521		$	29,067
Acquired-non-strategic net interest income		8,954			8,645			9,937		35,322			41,584
FDIC loss sharing income 1		7,433			8,377			11,306		60,888			51,844
Service charges on deposit accounts related to
acquired-non-strategic operations		53			59			196		372			724
Other (loss) income related to acquired-non-strategic operations		11			39			331		(1,247	)		403
Income related to the accelerated discount on covered
loans and acquired-non-strategic operations		21,226			22,327			27,883		115,856			123,622
Expense effect:
Provision for loan and lease losses - covered		6,910			7,260			13,997		64,081			63,144
Acquired-non-strategic operating expenses: 3
Salaries and employee benefits		—			—			820		1,996			984
Occupancy		(27	)		(367	)		161		1,823			2,209
Other		—			(40	)		3,071		2,331			4,896
Total acquired-non-strategic operating expenses		(27	)		(407	)		4,052		6,150			8,089
FDIC loss share support 3		1,333			1,382			1,160		4,867			3,578
Loss share and covered asset expense 3		2,521			3,755			616		12,823			616
Acquisition-related costs: 3
Integration-related costs		618			488			9		1,228			1,626
Professional services fees		113			127			396		295			4,463
Other		436			1,260			7		1,711			636
Total acquisition-related costs		1,167			1,875			412		3,234			6,725
Transition-related items: 3
Salaries and benefits		—			14			176		261			7,591
Occupancy		—			—			172		—			610
Other		—			(125	)		336		(15	)		913
Total transition-related items		—			(111	)		684		246			9,114
Total expense effect		11,904			13,754			20,921		91,401			91,266
Total estimated effect on pre-tax earnings	$	9,322		$	8,573		$	6,962	$	24,455		$	32,356

¹ Included in noninterest income 

² Net of the corresponding valuation adjustment on the FDIC indemnification asset 

³ Included in noninterest expense 

ACCELERATED DISCOUNT ON LOAN PREPAYMENTS AND DISPOSITIONS

During the fourth quarter 2011, First Financial recognized approximately $4.8 million in accelerated discount from acquired loans. Accelerated discount is recognized when acquired loans, which are recorded on the Company’s balance sheet at an amount less than the unpaid principal balance, prepay at an amount greater than their recorded book value. Prepayments can occur through either customer driven payments before the maturity date or loan sales. The amount of discount attributable to the credit loss component of each loan varies and the recognized amount is offset by a related reduction in the FDIC indemnification asset. Accelerated discount recognized during the quarter resulted primarily from loan prepayments.

-12 -

OPERATING EXPENSES AND OTHER ACQUISITION-RELATED COSTS

Acquired-non-strategic operating expenses have declined significantly as costs associated with the exited markets of Michigan and Louisville, KY are substantially complete and professional services and other resolution expenses related to non-strategic acquired subsidiaries have dropped over the past two quarters. Acquisition-related costs incurred during the fourth quarter 2011 consisted primarily of the previously mentioned $1.0 million of expenses incurred related to the Flagstar acquisition. Acquisition-related costs recognized in the third quarter 2011 consisted primarily of $1.8 million of costs incurred related to the Liberty branch acquisition. Expenses related to transition-related items and other acquisition-related costs, excluding the impact of the Liberty and Flagstar acquisitions, continued to decline as planned.

NET INTEREST MARGIN IMPACT

Net interest margin is affected by certain activity related to the acquired loan portfolio. The majority of these loans are accounted for under ASC Topic 310-30 and, as such, the Company is required to periodically update its forecast of expected cash flows from these loans. Impairment, as a result of a decrease in expected cash flows, is recognized as provision expense in the period it is measured and has no impact on net interest margin. Improvements in expected cash flows, in excess of any prior impairment, are recognized on a prospective basis through an upward adjustment to the yield earned on the portfolio. Impairment and improvement are both partially offset by the impact of changes in the value of the FDIC indemnification asset. Impairment is partially offset by an increase to the FDIC indemnification asset as a result of FDIC loss sharing income and has no impact on net interest margin. Improvement, which is reflected as a higher yield, is partially offset by a lower yield earned on the FDIC indemnification asset until the next periodic valuation of the loans and the indemnification asset. The weighted average yield of the acquired loan portfolio may also be subject to change as loans with higher yields pay down more quickly or slowly than loans with lower yields.

The following table shows the estimated yield earned by the Company on its covered and uncovered loan portfolios and the FDIC indemnification asset for the three months ended December 31, 2011.

Table VIII	For the Three Months Ended
	December 31, 2011
	Average
		Balance	Yield
Loans, excluding covered loans 1	$	2,983,354	5.10	%
Covered loan portfolio accounted for under ASC Topic 310-30 2		1,021,654	10.94	%
Covered loan portfolio accounted for under FAS 91 3		92,222	13.55	%
FDIC indemnification asset 2		173,900	-4.86	%
Total	$	4,271,130	6.27	%

¹  Includes loans with loss share coverage removed        

²  Future yield adjustments subject to change based on required, periodic valuation procedures  

³  Includes loans with revolving privileges which are scoped out of ASC Topic 310-30 and certain loans which the Company elected to treat under the cost recovery method of accounting

As part of its on-going valuation procedures, the Company experienced a $2.4 million net improvement in the cash flow expectations related to certain loan pools during the fourth quarter 2011. During the quarter, the average yield earned on covered loans accounted for under ASC Topic 310-30 was 10.94%. On a prospective basis and until its next periodic valuation, the Company expects the yield on covered loans to be 11.52%.

This projected improvement in cash flow expectations on loans is partially offset by a related decline in cash flow expectations on the FDIC indemnification asset which is recognized through its yield. The average yield earned on the indemnification asset during the fourth quarter 2011 was -4.86%. On a prospective basis and until its next periodic valuation, the Company expects the yield on the indemnification asset to be -5.10%.

COVERED ASSETS & LOSS SHARE AGREEMENTS

As of December 31, 2011, 26.2% of the Company’s total loans were covered loans. As required under the loss-share arrangements, First Financial must file monthly certifications with the FDIC on single-family residential loans and quarterly certifications on all other loans. To date, all certifications have been filed in a timely manner and without significant issues.

When losses are incurred on covered assets that exceed expectations, the Company recognizes the gross credit losses in excess of the valuation mark as either provision expense if related to loans or noninterest expense if related to OREO. Reimbursements expected from the FDIC under loss share agreements related to these credit losses are recorded as noninterest income. As such, the net impact on earnings is the difference between the gross credit losses and FDIC reimbursements, representing the Company’s proportionate share of the credit losses realized on covered assets.

-13 -

COVERED LOAN PORTFOLIO

The following table presents estimated activity in the covered loan portfolio by loan type during the fourth quarter 2011.

Table IX 

	Covered Loan Activity - Fourth Quarter 2011
			Reduction in Recorded Investment Due to:
		September 30,						Contractual			Net			Loans With Coverage		December 31,
(Dollars in thousands)		2011		Sales		Prepayments		Activity 1			Charge-Offs2			Removed		2011
Commercial	$	223,882	$	1,144	$	14,335	$	7,782		$	4,729		$	—	$	195,892
Real estate - construction		25,893		—		3,960		5,349			(536	)		—		17,120
Real estate - commercial		687,392		—		31,705		4,979			7,295			6,369		637,044
Real estate - residential		127,753		—		5,219		1,319			98			—		121,117
Installment		14,178		—		550		208			223			21		13,176
Home equity		67,897		—		2,630		(89	)		378			—		64,978
Other covered loans		4,071		—		—		154			—			—		3,917
Total covered loans	$	1,151,066	$	1,144	$	58,399	$	19,702		$	12,187		$	6,390	$	1,053,244

¹  Includes partial paydowns, accretion of the valuation discount and advances on revolving loans    

²   Indemnified at 80% from the FDIC 

During the fourth quarter 2011, the total balance of covered loans decreased $97.8 million, or 8.5%, as compared to the previous quarter. Loans with coverage removed represent loans to primarily high quality borrowers involving a change in loan terms which caused the respective loans to no longer qualify for reimbursement from the FDIC in the event of credit losses.

ALLOWANCE FOR LOAN AND LEASE LOSSES - COVERED

Under the applicable accounting guidance, the allowance for loan losses related to covered loans is a result of impairment identified in on-going valuation procedures and is generally recognized in the current period as provision expense. However, if improvement is noted in a loan pool that had previously experienced impairment, the amount of improvement is recognized as a reduction to the applicable period’s provision expense. Additional improvement beyond previously recorded impairment is reflected as a yield adjustment on a prospective basis. The timing inherent in this accounting treatment may result in earnings volatility in future periods.

The following table presents activity in the allowance for loan losses related to covered loans for the three months ended December 31, September 30, June 30 and March 31, 2011 as well as for the twelve month period ended December 31, 2011.

Table X
													As of or for the
	As of or for the Three Months Ended												Twelve Months
	December 31,			September 30,			June 30,			March 31,			Ended December 31,
(Dollars in thousands)	2011			2011			2011			2011			2011
Balance at beginning of period	$	48,112		$	51,044		$	31,555		$	16,493		$	16,493
Provision for loan and lease losses - covered		6,910			7,260			23,895			26,016			64,081
Total gross charge-offs		(13,513	)		(10,609	)		(7,456	)		(14,026	)		(45,604	)
Total recoveries		1,326			417			3,050			3,072			7,865
Total net charge-offs		(12,187	)		(10,192	)		(4,406	)		(10,954	)		(37,739	)
Ending allowance for loan and lease losses - covered	$	42,835		$	48,112		$	51,044		$	31,555		$	42,835

-14 -

The Company has established an allowance for loan losses associated with covered loans based on estimated valuation procedures performed each quarter. During the fourth quarter 2011, the Company recognized a provision expense of $6.9 million, representing a decline of $0.4 million, or 4.8%, compared to the linked quarter. The decrease reflects a continued stabilizing credit outlook related to loan pools with previously recognized impairment. The allowance for loan losses related to covered loans declined $5.3 million, or 11.0%, compared to the third quarter 2011, also reflecting the stabilized credit outlook in conjunction with the decline in the covered loan portfolio. As a percentage of total covered loans, the allowance for loan losses totaled 4.07% as of December 31, 2011 compared to 4.18% as of September 30, 2011.

In addition to the provision expense, the Company incurred loss share and covered asset expenses of $2.5 million, including $0.8 million of losses related to covered OREO and $1.7 million of other credit expenses related to covered assets. The receivable due from the FDIC under loss share agreements of $7.4 million related to total credit costs incurred was recognized as FDIC loss share income and a corresponding increase to the FDIC indemnification asset.

SUMMARY OF ACQUISITIONS

During the third quarter 2009, through FDIC-assisted transactions, First Financial assumed the banking operations of Peoples Community Bank (“Peoples”), Irwin Union Bank and Trust Company and Irwin Union Bank, F.S.B. (collectively, “Irwin”). In connection with the FDIC-assisted transactions, the Company has loss sharing arrangements with the FDIC. Under the terms of these agreements, the FDIC will reimburse the Company for losses with respect to certain loans (“covered loans”) and other real estate owned (“OREO”) (collectively, “covered assets”).

During the third quarter 2011, the Company completed its acquisition of the Ohio-based retail banking branches of Liberty Savings Bank, FSB. This transaction included 16 branch locations, 12 of which are located in the Dayton, OH area and significantly enhanced the Company’s presence in this key strategic market. At closing, First Financial assumed $341.9 million of deposits and acquired $126.5 million of in-market performing loans. All elements of the business acquired as part of this transaction are considered by the Company to be acquired-strategic (see definition below).

During the fourth quarter 2011, First Financial completed its acquisition of the Indiana-based retail banking branches of Flagstar Bank, FSB. This transaction included 22 branch locations, 18 of which are located in the Indianapolis, IN area and substantially increased the Company’s presence in the strategic metropolitan market. At closing, First Financial assumed $464.7 million of deposits. All elements of the business acquired as part of this transaction are considered by the Company to be acquired-strategic (see definition below).

As a result of the acquisitions, the Company’s business and operating markets expanded significantly. To assist readers in understanding the financial and strategic impact of the acquisitions, the combined operations of First Financial’s legacy and acquired businesses will be discussed in three categories: “Legacy-Strategic”, “Acquired-Strategic” and “Acquired-Non-Strategic”. Definitions of the business categories and other financial items related to the acquisitions can be found below in “Glossary of Terms”. Available on the Company’s website at www.bankatfirst.com is a presentation providing supplemental information regarding its quarterly results.

-15 -

Glossary of Terms

To assist readers in understanding the Company’s financial results and the effect of the acquisitions on reported amounts, the following terms are used throughout this release to refer to specific acquisition-related items. The first three define the business components referred to above and the remaining items define specific covered loan terminology.

Legacy-strategic – Elements of the business that existed prior to the acquisitions and will continue to be supported.

Acquired-strategic – Elements of the business that the Company intends to retain and will continue to support and build. Legacy-strategic and acquired-strategic are collectively referred to as “strategic.”

Acquired-non-strategic – Elements of the business that the Company intends to exit but will continue to support to obtain maximum economic value. No growth or replacement is expected.

Accelerated discount on covered loans – The acceleration of the unrealized valuation discount. This item will be ongoing but diminishing as covered loan balances decline over time.

UPB – Unpaid principal balance

Carrying value – The unpaid principal balance of a covered loan less any valuation discount.

Unless otherwise noted, all amounts discussed in this earnings release are pre-tax except net income and per-share data which are presented after-tax. Percentage changes are not annualized unless specifically noted. In some instances, financial data may not add up due to rounding.

-16 -

Teleconference / Webcast Information

First Financial’s senior management will host a conference call to discuss the Company’s financial and operating results on Thursday, January 26, 2012 at 9:00 a.m. Eastern Time. Members of the public who would like to listen to the conference call should dial (877) 317-6789 (U.S. toll free), (866) 605-3852 (Canada toll free) or +1 (412) 317-6789 (International) (no passcode required). The number should be dialed five to ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company’s website at www.bankatfirst.com. A replay of the conference call will be available beginning one hour after the completion of the live call through February 10, 2012 at (877) 344-7529 (U.S. toll free) and +1 (412) 317-0088 (International); conference number 10009042. The webcast will be archived on the Investor Relations section of the Company’s website through January 26, 2013.

Press Release and Additional Information on Website

This press release as well as supplemental information related to this release is available to the public through the Investor Relations section of First Financial’s website at www.bankatfirst.com/investor.

Forward-Looking Statements

Certain statements contained in this news release 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 First Financial with the SEC, in press releases, and in oral and written statements made by or with the approval of First Financial 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 First Financial 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’’, “likely”, “expected”, ‘‘intends’’, and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Management’s analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

▪ management’s ability to effectively execute its business plan;

▪ the risk that the strength of the United States economy in general and the strength of the local economies in which we conduct operations may continue to deteriorate resulting in, among other things, a further deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio, allowance for loan and lease losses and overall financial performance;

▪ the effects of the potential delay or failure of the U.S. federal government to pay its debts as they become due or make payments in the ordinary course;

▪ the ability of financial institutions to access sources of liquidity at a reasonable cost;

▪ the impact of recent upheaval in the financial markets and the effectiveness of domestic and international governmental actions taken in response, such as the U.S. Treasury’s TARP and the FDIC’s Temporary Liquidity Guarantee Program, and the effect of such governmental actions on us, our competitors and counterparties, financial markets generally and availability of credit specifically, and the U.S. and international economies, including potentially higher FDIC premiums arising from increased payments from FDIC insurance funds as a result of depository institution failures;

▪ the effect of and changes in policies and laws or regulatory agencies (notably the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act);

▪ inflation and possible changes in interest rates;

▪ our ability to keep up with technological changes;

▪ our ability to comply with the terms of loss sharing agreements with the FDIC;

▪ mergers and acquisitions, including costs or difficulties related to the integration of acquired companies and the wind-down of non-strategic operations that may be greater than expected, such as the risks and uncertainties associated with the Irwin Mortgage Corporation bankruptcy proceedings and other acquired subsidiaries;

▪ the risk that exploring merger and acquisition opportunities may detract from management’s time and ability to successfully manage our company;

▪ expected cost savings in connection with the consolidation of recent acquisitions may not be fully realized or realized within the expected time frames, and deposit attrition, customer loss and revenue loss following completed acquisitions may be greater than expected;

-17 -

▪ our 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 SEC;

▪ adverse changes in the securities and debt markets;

▪ our success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services;

▪ monetary and fiscal policies of the Board of Governors of the Federal Reserve System (Federal Reserve) and the U.S. government and other governmental initiatives affecting the financial services industry;

▪ our ability to manage loan delinquency and charge-off rates and changes in estimation of the adequacy of the allowance for loan losses; and

▪ the costs and effects of litigation and of unexpected or adverse outcomes in such litigation.

In addition, please refer to our Annual Report on Form 10-K for the year ended December 31, 2010, as well as our other filings with the SEC, for a more detailed discussion of these risks and uncertainties and other factors. Such forward-looking statements are meaningful only on the date when such statements are made, and First Financial 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 unanticipated events.

About First Financial Bancorp

First Financial Bancorp is a Cincinnati, Ohio based bank holding company. As of December 31, 2011, the Company had $6.7 billion in assets, $4.0 billion in loans, $5.6 billion in deposits and $712 million in shareholders’ equity. The Company’s subsidiary, First Financial Bank, N.A., founded in 1863, provides banking and financial services products through its three lines of business: commercial, retail and wealth management. The commercial and retail units provide traditional banking services to business and consumer clients. First Financial Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $2.3 billion in assets under management as of December 31, 2011. The Company’s strategic operating markets are located in Ohio, Indiana and Kentucky where it operates 136 banking centers. Additional information about the Company, including its products, services and banking locations is available at www.bankatfirst.com.

Contact Information
Investors/Analysts	Media
Kenneth Lovik	Cheryl Lipp
Vice President, Investor Relations and	First Vice President, Director of Communications
Corporate Development	(513) 979-5797
(513) 979-5837	cheryl.lipp@bankatfirst.com
kenneth.lovik@bankatfirst.com

-18 -

 

Selected Financial Information

December 31, 2011

(unaudited)

Contents	Page
Consolidated Financial Highlights	2
Consolidated Statements of Income	3
Consolidated Quarterly Statements of Income	4 – 5
Consolidated Statements of Condition	6
Average Consolidated Statements of Condition	7
Net Interest Margin Rate / Volume Analysis	8 – 9
Credit Quality	10
Capital Adequacy	11

FIRST FINANCIAL BANCORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share)

(Unaudited)

	Three months ended,															Twelve months ended
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,
	2011			2011			2011			2011			2010			2011			2010
RESULTS OF OPERATIONS
Net income	$	17,941		$	15,618		$	15,973		$	17,207		$	14,300		$	66,739		$	59,251
Net income available to common shareholders	$	17,941		$	15,618		$	15,973		$	17,207		$	14,300		$	66,739		$	57,386
Net earnings per common share - basic	$	0.31		$	0.27		$	0.28		$	0.30		$	0.25		$	1.16		$	1.01
Net earnings per common share - diluted	$	0.31		$	0.27		$	0.27		$	0.29		$	0.24		$	1.14		$	0.99
Dividends declared per common share	$	0.27		$	0.27		$	0.12		$	0.12		$	0.10		$	0.78		$	0.40
KEY FINANCIAL RATIOS
Return on average assets		1.09	%		1.01	%		1.03	%		1.11	%		0.90	%		1.06	%		0.91	%
Return on average shareholders' equity		9.89	%		8.54	%		9.05	%		10.04	%		8.14	%		9.37	%		8.68	%
Return on average common shareholders' equity		9.89	%		8.54	%		9.05	%		10.04	%		8.14	%		9.37	%		8.55	%
Return on average tangible common shareholders' equity		11.59	%		9.56	%		9.84	%		10.94	%		8.87	%		11.01	%		9.35	%
Net interest margin		4.32	%		4.55	%		4.61	%		4.73	%		4.65	%		4.55	%		4.66	%
Net interest margin (fully tax equivalent) (1)		4.34	%		4.57	%		4.62	%		4.75	%		4.67	%		4.57	%		4.68	%
Ending equity as a percent of ending assets		10.68	%		11.47	%		11.95	%		11.21	%		11.16	%		10.68	%		11.16	%
Ending tangible common equity as a percent of:
Ending tangible assets		9.23	%		10.38	%		11.11	%		10.40	%		10.33	%		9.23	%		10.33	%
Risk-weighted assets		16.63	%		18.47	%		19.65	%		19.28	%		17.36	%		16.63	%		17.36	%
Average equity as a percent of average assets		11.05	%		11.83	%		11.38	%		11.09	%		11.12	%		11.33	%		10.53	%
Average common equity as a percent of average assets		11.05	%		11.83	%		11.38	%		11.09	%		11.12	%		11.33	%		10.35	%
Average tangible common equity as a percent of average tangible assets		9.58	%		10.70	%		10.56	%		10.28	%		10.29	%		9.81	%		9.55	%
Book value per common share	$	12.22		$	12.48		$	12.39		$	12.15		$	12.01		$	12.22		$	12.01
Tangible book value per common share	$	10.41		$	11.15		$	11.42		$	11.17		$	11.02		$	10.41		$	11.02
Tier 1 Ratio (2)		17.47	%		18.81	%		20.14	%		20.49	%		18.45	%		17.47	%		18.45	%
Total Capital Ratio (2)		18.74	%		20.08	%		21.42	%		21.76	%		19.72	%		18.74	%		19.72	%
Leverage Ratio (2)		9.87	%		10.87	%		11.01	%		11.09	%		10.89	%		9.87	%		10.89	%
AVERAGE BALANCE SHEET ITEMS
Loans (3)	$	2,983,354		$	2,800,466		$	2,782,947		$	2,821,450		$	2,804,832		$	2,847,370		$	2,816,541
Covered loans and FDIC indemnification asset		1,287,776			1,380,128			1,481,353			1,628,645			1,783,737			1,443,365			1,968,896
Investment securities		1,257,574			1,199,473			1,093,870			1,045,292			798,135			1,149,772			662,344
Interest-bearing deposits with other banks		485,432			306,969			375,434			276,837			405,920			361,591			459,618
Total earning assets	$	6,014,136		$	5,687,036		$	5,733,604		$	5,772,224		$	5,792,624		$	5,802,098		$	5,907,399
Total assets	$	6,515,756		$	6,136,815		$	6,219,754		$	6,266,408		$	6,270,480		$	6,284,961		$	6,485,632
Noninterest-bearing deposits	$	860,863		$	735,621		$	734,674		$	733,242		$	741,343		$	766,366		$	744,159
Interest-bearing deposits		4,630,412			4,366,827			4,402,103			4,431,524			4,438,113			4,458,012			4,500,188
Total deposits	$	5,491,275		$	5,102,448		$	5,136,777		$	5,164,766		$	5,179,456		$	5,224,378		$	5,244,347
Borrowings	$	174,939		$	195,140		$	218,196		$	230,087		$	213,107		$	204,414		$	367,358
Shareholders' equity	$	719,964		$	725,809		$	707,750		$	695,062		$	697,016		$	712,252		$	682,987
CREDIT QUALITY RATIOS (excluding covered assets)
Allowance to ending loans		1.77	%		1.86	%		1.92	%		1.93	%		2.03	%		1.77	%		2.03	%
Allowance to nonaccrual loans		96.83	%		92.20	%		94.93	%		86.46	%		91.87	%		96.83	%		91.87	%
Allowance to nonperforming loans		68.84	%		71.35	%		72.51	%		66.57	%		71.62	%		68.84	%		71.62	%
Nonperforming loans to total loans		2.57	%		2.60	%		2.65	%		2.90	%		2.84	%		2.57	%		2.84	%
Nonperforming assets to ending loans, plus OREO		2.94	%		3.00	%		3.22	%		3.42	%		3.45	%		2.94	%		3.45	%
Nonperforming assets to total assets		1.31	%		1.40	%		1.50	%		1.51	%		1.57	%		1.31	%		1.57	%
Net charge-offs to average loans (annualized)		0.95	%		0.96	%		0.83	%		0.61	%		1.39	%		0.84	%		1.27	%

⁽¹⁾ The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. 

⁽²⁾ December 31, 2011 regulatory capital ratios are preliminary.

⁽³⁾ Includes loans held for sale.

-2-

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share)

(Unaudited)

	Three months ended,									Twelve months ended,
	Dec. 31,									Dec. 31,
	2011			2010			% Change			2011			2010			% Change
Interest income
Loans, including fees	$	69,658		$	75,836			(8.1	)%	$	285,689		$	306,075			(6.7	)%
Investment securities
Taxable		6,945			5,522			25.8	%		28,239			21,748			29.8	%
Tax-exempt		201			214			(6.1	)%		767			934			(17.9	)%
Total investment securities interest		7,146			5,736			24.6	%		29,006			22,682			27.9	%
Other earning assets		(1,819	)		749			(342.9	)%		(5,878	)		14,745			(139.9	)%
Total interest income		74,985			82,321			(8.9	)%		308,817			343,502			(10.1	)%
Interest expense
Deposits		8,791			12,923			(32.0	)%		40,781			58,336			(30.1	)%
Short-term borrowings		25			33			(24.2	)%		163			94			73.4	%
Long-term borrowings		693			1,194			(42.0	)%		3,586			8,341			(57.0	)%
Subordinated debentures and capital securities		0			265			(100.0	)%		391			1,221			(68.0	)%
Total interest expense		9,509			14,415			(34.0	)%		44,921			67,992			(33.9	)%
Net interest income		65,476			67,906			(3.6	)%		263,896			275,510			(4.2	)%
Provision for loan and lease losses - uncovered		5,164			9,741			(47.0	)%		19,210			33,564			(42.8	)%
Provision for loan and lease losses - covered		6,910			13,997			(50.6	)%		64,081			63,144			1.5	%
Net interest income after provision for loan and lease losses		53,402			44,168			20.9	%		180,605			178,802			1.0	%
Noninterest income
Service charges on deposit accounts		4,920			5,090			(3.3	)%		19,206			22,188			(13.4	)%
Trust and wealth management fees		3,531			3,283			7.6	%		14,340			13,862			3.4	%
Bankcard income		2,490			2,255			10.4	%		9,291			8,518			9.1	%
Net gains from sales of loans		1,172			1,241			(5.6	)%		4,258			4,632			(8.1	)%
FDIC loss sharing income		7,433			11,306			(34.3	)%		60,888			51,844			17.4	%
Accelerated discount on covered loans		4,775			6,113			(21.9	)%		20,521			29,067			(29.4	)%
Gain on sale of investment securities		2,541			0			N/M			2,541			0			N/M
(Loss) Income on preferred securities		0			0			N/M			0			(30	)		(100.0	)%
Other		2,778			5,246			(47.0	)%		11,486			16,750			(31.4	)%
Total noninterest income		29,640			34,534			(14.2	)%		142,531			146,831			(2.9	)%
Noninterest expenses
Salaries and employee benefits		26,447			28,819			(8.2	)%		106,914			117,363			(8.9	)%
Net occupancy		5,893			4,430			33.0	%		21,410			22,555			(5.1	)%
Furniture and equipment		2,425			3,022			(19.8	)%		9,945			10,299			(3.4	)%
Data processing		1,559			1,593			(2.1	)%		5,716			5,152			10.9	%
Marketing		1,567			1,453			7.8	%		5,794			5,357			8.2	%
Communication		864			892			(3.1	)%		3,203			3,908			(18.0	)%
Professional services		2,252			2,863			(21.3	)%		9,636			9,169			5.1	%
Debt extinguishment		0			0			N/M			0			8,029			(100.0	)%
State intangible tax		436			1,362			(68.0	)%		3,583			4,843			(26.0	)%
FDIC assessments		1,192			2,272			(47.5	)%		5,676			8,312			(31.7	)%
Other		12,033			9,584			25.6	%		46,220			38,693			19.5	%
Total noninterest expenses		54,668			56,290			(2.9	)%		218,097			233,680			(6.7	)%
Income before income taxes		28,374			22,412			26.6	%		105,039			91,953			14.2	%
Income tax expense		10,433			8,112			28.6	%		38,300			32,702			17.1	%
Net income		17,941			14,300			25.5	%		66,739			59,251			12.6	%
Dividends on preferred stock		0			0			N/M			0			1,865			(100.0	)%
Income available to common shareholders	$	17,941		$	14,300			25.5	%	$	66,739		$	57,386			16.3	%
ADDITIONAL DATA
Net earnings per common share - basic	$	0.31		$	0.25					$	1.16		$	1.01
Net earnings per common share - diluted	$	0.31		$	0.24					$	1.14		$	0.99
Dividends declared per common share	$	0.27		$	0.10					$	0.78		$	0.40
Return on average assets		1.09	%		0.90	%					1.06	%		0.91	%
Return on average shareholders' equity		9.89	%		8.14	%					9.37	%		8.68	%
Interest income	$	74,985		$	82,321			(8.9	)%	$	308,817		$	343,502			(10.1	)%
Tax equivalent adjustment		265			220			20.5	%		979			866			13.0	%
Interest income - tax equivalent		75,250			82,541			(8.8	)%		309,796			344,368			(10.0	)%
Interest expense		9,509			14,415			(34.0	)%		44,921			67,992			(33.9	)%
Net interest income - tax equivalent	$	65,741		$	68,126			(3.5	)%	$	264,875		$	276,376			(4.2	)%
Net interest margin		4.32	%		4.65	%					4.55	%		4.66	%
Net interest margin (fully tax equivalent) (1)		4.34	%		4.67	%					4.57	%		4.68	%
Full-time equivalent employees (2)		1,508			1,529

⁽¹⁾ The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

⁽²⁾ Does not include associates from acquisitions that are currently in a temporary hire status.

N/M = Not meaningful.

-3-

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share)

(Unaudited)

	2011
	Fourth			Third			Second			First						% Change
	Quarter			Quarter			Quarter			Quarter			YTD			Linked Qtr.
Interest income
Loans, including fees	$	69,658		$	70,086		$	71,929		$	74,016		$	285,689			(0.6	)%
Investment securities
Taxable		6,945			7,411			7,080			6,803			28,239			(6.3	)%
Tax-exempt		201			176			192			198			767			14.2	%
Total investment securities interest		7,146			7,587			7,272			7,001			29,006			(5.8	)%
Other earning assets		(1,819	)		(1,721	)		(1,384	)		(954	)		(5,878	)		5.7	%
Total interest income		74,985			75,952			77,817			80,063			308,817			(1.3	)%
Interest expense
Deposits		8,791			9,823			10,767			11,400			40,781			(10.5	)%
Short-term borrowings		25			44			49			45			163			(43.2	)%
Long-term borrowings		693			867			937			1,089			3,586			(20.1	)%
Subordinated debentures and capital securities		0			0			197			194			391			N/M
Total interest expense		9,509			10,734			11,950			12,728			44,921			(11.4	)%
Net interest income		65,476			65,218			65,867			67,335			263,896			0.4	%
Provision for loan and lease losses - uncovered		5,164			7,643			5,756			647			19,210			(32.4	)%
Provision for loan and lease losses - covered		6,910			7,260			23,895			26,016			64,081			(4.8	)%
Net interest income after provision for loan and lease losses		53,402			50,315			36,216			40,672			180,605			6.1	%
Noninterest income
Service charges on deposit accounts		4,920			4,793			4,883			4,610			19,206			2.6	%
Trust and wealth management fees		3,531			3,377			3,507			3,925			14,340			4.6	%
Bankcard income		2,490			2,318			2,328			2,155			9,291			7.4	%
Net gains from sales of loans		1,172			1,243			854			989			4,258			(5.7	)%
FDIC loss sharing income		7,433			8,377			21,643			23,435			60,888			(11.3	)%
Accelerated discount on covered loans		4,775			5,207			4,756			5,783			20,521			(8.3	)%
Gain on sale of investment securities		2,541			0			0			0			2,541			N/M
Other		2,778			2,800			3,147			2,761			11,486			(0.8	)%
Total noninterest income		29,640			28,115			41,118			43,658			142,531			5.4	%
Noninterest expenses
Salaries and employee benefits		26,447			27,774			25,123			27,570			106,914			(4.8	)%
Net occupancy		5,893			4,164			4,493			6,860			21,410			41.5	%
Furniture and equipment		2,425			2,386			2,581			2,553			9,945			1.6	%
Data processing		1,559			1,466			1,453			1,238			5,716			6.3	%
Marketing		1,567			1,584			1,402			1,241			5,794			(1.1	)%
Communication		864			772			753			814			3,203			11.9	%
Professional services		2,252			2,062			3,095			2,227			9,636			9.2	%
State intangible tax		436			546			1,236			1,365			3,583			(20.1	)%
FDIC assessments		1,192			1,211			1,152			2,121			5,676			(1.6	)%
Other		12,033			11,177			11,209			11,801			46,220			7.7	%
Total noninterest expenses		54,668			53,142			52,497			57,790			218,097			2.9	%
Income before income taxes		28,374			25,288			24,837			26,540			105,039			12.2	%
Income tax expense		10,433			9,670			8,864			9,333			38,300			7.9	%
Net income	$	17,941		$	15,618		$	15,973		$	17,207		$	66,739			14.9	%
ADDITIONAL DATA
Net earnings per common share - basic	$	0.31		$	0.27		$	0.28		$	0.30		$	1.16
Net earnings per common share - diluted	$	0.31		$	0.27		$	0.27		$	0.29		$	1.14
Dividends declared per common share	$	0.27		$	0.27		$	0.12		$	0.12		$	0.78
Return on average assets		1.09	%		1.01	%		1.03	%		1.11	%		1.06	%
Return on average shareholders' equity		9.89	%		8.54	%		9.05	%		10.04	%		9.37	%
Interest income	$	74,985		$	75,952		$	77,817		$	80,063		$	308,817			(1.3	)%
Tax equivalent adjustment		265			236			240			238			979			12.3	%
Interest income - tax equivalent		75,250			76,188			78,057			80,301			309,796			(1.2	)%
Interest expense		9,509			10,734			11,950			12,728			44,921			(11.4	)%
Net interest income - tax equivalent	$	65,741		$	65,454		$	66,107		$	67,573		$	264,875			0.4	%
Net interest margin		4.32	%		4.55	%		4.61	%		4.73	%		4.55	%
Net interest margin (fully tax equivalent) (1)		4.34	%		4.57	%		4.62	%		4.75	%		4.57	%
Full-time equivalent employees (2)		1,508			1,377			1,374			1,483

⁽¹⁾ The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons. 

⁽²⁾ Does not include associates from acquisitions that are currently in a temporary hire status.

N/M = Not meaningful.

-4-

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share)

(Unaudited)

	2010
	Fourth			Third			Second			First			Full
	Quarter			Quarter			Quarter			Quarter			Year
Interest income
Loans, including fees	$	75,836		$	75,957		$	74,944		$	79,338		$	306,075
Investment securities
Taxable		5,522			5,386			5,444			5,396			21,748
Tax-exempt		214			240			245			235			934
Total investment securities interest		5,736			5,626			5,689			5,631			22,682
Other earning assets		749			3,101			5,305			5,590			14,745
Total interest income		82,321			84,684			85,938			90,559			343,502
Interest expense
Deposits		12,923			14,457			15,308			15,648			58,336
Short-term borrowings		33			25			17			19			94
Long-term borrowings		1,194			2,034			2,556			2,557			8,341
Subordinated debentures and capital securities		265			322			319			315			1,221
Total interest expense		14,415			16,838			18,200			18,539			67,992
Net interest income		67,906			67,846			67,738			72,020			275,510
Provision for loan and lease losses - uncovered		9,741			6,287			6,158			11,378			33,564
Provision for loan and lease losses - covered		13,997			20,725			18,962			9,460			63,144
Net interest income after provision for loan and lease losses		44,168			40,834			42,618			51,182			178,802
Noninterest income
Service charges on deposit accounts		5,090			5,632			5,855			5,611			22,188
Trust and wealth management fees		3,283			3,366			3,668			3,545			13,862
Bankcard income		2,255			2,193			2,102			1,968			8,518
Net gains from sales of loans		1,241			2,749			473			169			4,632
FDIC loss sharing income		11,306			17,800			15,170			7,568			51,844
Accelerated discount on covered loans		6,113			9,448			7,408			6,098			29,067
(Loss) income on preferred securities		0			0			0			(30	)		(30	)
Other		5,246			3,707			5,791			2,006			16,750
Total noninterest income		34,534			44,895			40,467			26,935			146,831
Noninterest expenses
Salaries and employee benefits		28,819			28,790			29,513			30,241			117,363
Net occupancy		4,430			4,663			5,340			8,122			22,555
Furniture and equipment		3,022			2,490			2,514			2,273			10,299
Data processing		1,593			1,191			1,136			1,232			5,152
Marketing		1,453			1,230			1,600			1,074			5,357
Communication		892			986			822			1,208			3,908
Professional services		2,863			2,117			2,446			1,743			9,169
Debt extinguishment		0			8,029			0			0			8,029
State intangible tax		1,362			724			1,426			1,331			4,843
FDIC assessments		2,272			2,123			1,907			2,010			8,312
Other		9,584			8,967			9,115			11,027			38,693
Total noninterest expenses		56,290			61,310			55,819			60,261			233,680
Income before income taxes		22,412			24,419			27,266			17,856			91,953
Income tax expense		8,112			8,840			9,492			6,258			32,702
Net income		14,300			15,579			17,774			11,598			59,251
Dividends on preferred stock		0			0			0			1,865			1,865
Net income available to common shareholders	$	14,300		$	15,579		$	17,774		$	9,733		$	57,386
ADDITIONAL DATA
Net earnings per common share - basic	$	0.25		$	0.27		$	0.31		$	0.18		$	1.01
Net earnings per common share - diluted	$	0.24		$	0.27		$	0.30		$	0.17		$	0.99
Dividends declared per common share	$	0.10		$	0.10		$	0.10		$	0.10		$	0.40
Return on average assets		0.90	%		0.96	%		1.08	%		0.71	%		0.91	%
Return on average shareholders' equity		8.14	%		9.03	%		10.62	%		6.92	%		8.68	%
Interest income	$	82,321		$	84,684		$	85,938		$	90,559		$	343,502
Tax equivalent adjustment		220			222			212			212			866
Interest income - tax equivalent		82,541			84,906			86,150			90,771			344,368
Interest expense		14,415			16,838			18,200			18,539			67,992
Net interest income - tax equivalent	$	68,126		$	68,068		$	67,950		$	72,232		$	276,376
Net interest margin		4.65	%		4.59	%		4.53	%		4.89	%		4.66	%
Net interest margin (fully tax equivalent) (1)		4.67	%		4.60	%		4.54	%		4.91	%		4.68	%
Full-time equivalent employees (2)		1,529			1,535			1,511			1,466

⁽¹⁾ The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis. Therefore, management believes, these measures provided useful information to investors by allowing them to make peer comparisons. Management also uses these measures to make peer comparisons.

⁽²⁾ Does not include associates from acquisitions that are currently in a temporary hire status.

N/M = Not meaningful.

-5-

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			% Change			% Change
	2011			2011			2011			2011			2010			Linked Qtr.			Comparable Qtr.
ASSETS
Cash and due from banks	$	149,653		$	108,253		$	104,150		$	96,709		$	105,981			38.2	%		41.2	%
Interest-bearing deposits with other banks		375,398			369,130			147,108			387,923			176,952			1.7	%		112.1	%
Investment securities available-for-sale		1,441,846			1,120,179			1,134,114			1,024,684			919,110			28.7	%		56.9	%
Investment securities held-to-maturity		2,664			2,724			3,001			16,780			17,406			(2.2	)%		(84.7	)%
Other investments		71,492			71,492			71,492			78,689			78,689			0.0	%		(9.1	)%
Loans held for sale		24,834			14,259			8,824			6,813			29,292			74.2	%		(15.2	)%
Loans
Commercial		856,981			822,552			798,552			794,821			800,253			4.2	%		7.1	%
Real estate - construction		114,974			136,651			142,682			145,355			163,543			(15.9	)%		(29.7	)%
Real estate - commercial		1,233,067			1,202,035			1,144,368			1,131,306			1,139,931			2.6	%		8.2	%
Real estate - residential		287,980			300,165			256,788			268,746			269,173			(4.1	)%		7.0	%
Installment		67,543			70,034			63,799			66,028			69,711			(3.6	)%		(3.1	)%
Home equity		358,960			362,919			344,457			339,590			341,310			(1.1	)%		5.2	%
Credit card		31,631			30,435			28,618			28,104			29,563			3.9	%		7.0	%
Lease financing		17,311			12,870			9,890			7,147			2,609			34.5	%		563.5	%
Total loans, excluding covered loans		2,968,447			2,937,661			2,789,154			2,781,097			2,816,093			1.0	%		5.4	%
Less
Allowance for loan and lease losses		52,576			54,537			53,671			53,645			57,235			(3.6	)%		(8.1	)%
Net loans - uncovered		2,915,871			2,883,124			2,735,483			2,727,452			2,758,858			1.1	%		5.7	%
Covered loans		1,053,244			1,151,066			1,242,730			1,336,015			1,481,493			(8.5	)%		(28.9	)%
Less
Allowance for loan and lease losses		42,835			48,112			51,044			31,555			16,493			(11.0	)%		159.7	%
Net loans - covered		1,010,409			1,102,954			1,191,686			1,304,460			1,465,000			(8.4	)%		(31.0	)%
Net loans		3,926,280			3,986,078			3,927,169			4,031,912			4,223,858			(1.5	)%		(7.0	)%
Premises and equipment		138,096			120,325			114,797			115,873			118,477			14.8	%		16.6	%
Goodwill		95,050			68,922			51,820			51,820			51,820			37.9	%		83.4	%
Other intangibles		10,844			8,436			4,847			5,227			5,604			28.5	%		93.5	%
FDIC indemnification asset		173,009			177,814			193,113			207,359			222,648			(2.7	)%		(22.3	)%
Accrued interest and other assets		262,345			290,117			281,172			290,692			300,388			(9.6	)%		(12.7	)%
Total Assets	$	6,671,511		$	6,337,729		$	6,041,607		$	6,314,481		$	6,250,225			5.3	%		6.7	%
LIABILITIES
Deposits
Interest-bearing demand	$	1,317,339		$	1,288,721		$	1,021,519		$	1,136,219		$	1,111,877			2.2	%		18.5	%
Savings		1,724,659			1,537,420			1,643,110			1,628,952			1,534,045			12.2	%		12.4	%
Time		1,654,662			1,658,031			1,581,603			1,702,294			1,794,843			(0.2	)%		(7.8	)%
Total interest-bearing deposits		4,696,660			4,484,172			4,246,232			4,467,465			4,440,765			4.7	%		5.8	%
Noninterest-bearing		946,180			814,928			728,178			749,785			705,484			16.1	%		34.1	%
Total deposits		5,642,840			5,299,100			4,974,410			5,217,250			5,146,249			6.5	%		9.6	%
Federal funds purchased and securities sold under agreements to repurchase		99,431			95,451			105,291			87,973			59,842			4.2	%		66.2	%
Long-term debt		76,544			76,875			102,255			102,976			128,880			(0.4	)%		(40.6	)%
Other long-term debt		0			0			0			20,620			20,620			N/M			(100.0	)%
Total borrowed funds		175,975			172,326			207,546			211,569			209,342			2.1	%		(15.9	)%
Accrued interest and other liabilities		140,475			139,171			137,889			177,698			197,240			0.9	%		(28.8	)%
Total Liabilities		5,959,290			5,610,597			5,319,845			5,606,517			5,552,831			6.2	%		7.3	%
SHAREHOLDERS' EQUITY
Common stock		579,871			578,974			577,856			576,992			580,097			0.2	%		(0.0	)%
Retained earnings		331,351			329,243			329,455			320,515			310,271			0.6	%		6.8	%
Accumulated other comprehensive loss		(21,490	)		(3,388	)		(7,902	)		(12,332	)		(12,044	)		534.3	%		78.4	%
Treasury stock, at cost		(177,511	)		(177,697	)		(177,647	)		(177,211	)		(180,930	)		(0.1	)%		(1.9	)%
Total Shareholders' Equity		712,221			727,132			721,762			707,964			697,394			(2.1	)%		2.1	%
Total Liabilities and Shareholders' Equity	$	6,671,511		$	6,337,729		$	6,041,607		$	6,314,481		$	6,250,225			5.3	%		6.7	%

N/M = Not meaningful.

-6-

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

	Quarterly Averages															Year-to-Date Averages
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,
	2011			2011			2011			2011			2010			2011			2010
ASSETS
Cash and due from banks	$	121,603		$	110,336		$	118,829		$	111,953		$	122,167		$	115,692		$	228,539
Interest-bearing deposits with other banks		485,432			306,969			375,434			276,837			405,920			361,591			459,618
Investment securities		1,257,574			1,199,473			1,093,870			1,045,292			798,135			1,149,772			662,344
Loans held for sale		21,067			9,497			8,530			16,121			21,141			13,805			11,550
Loans
Commercial		851,006			794,447			797,158			802,944			739,082			811,474			751,459
Real estate - construction		135,825			141,791			139,255			158,403			172,585			143,751			198,395
Real estate - commercial		1,206,678			1,145,195			1,132,662			1,135,630			1,155,896			1,155,209			1,120,646
Real estate - residential		293,158			258,377			260,920			265,527			276,166			269,541			295,677
Installment		68,945			63,672			65,568			67,700			71,623			66,467			74,994
Home equity		360,389			346,486			341,876			340,285			339,192			347,312			335,219
Credit card		30,759			29,505			28,486			28,321			28,962			29,275			28,529
Lease financing		15,527			11,496			8,492			6,519			185			10,536			72
Total loans, excluding covered loans		2,962,287			2,790,969			2,774,417			2,805,329			2,783,691			2,833,565			2,804,991
Less
Allowance for loan and lease losses		55,157			55,146			55,132			59,756			60,433			56,282			60,409
Net loans - uncovered		2,907,130			2,735,823			2,719,285			2,745,573			2,723,258			2,777,283			2,744,582
Covered loans		1,113,876			1,196,327			1,295,228			1,420,197			1,551,003			1,255,403			1,715,984
Less
Allowance for loan and lease losses		51,330			51,955			39,070			23,399			16,104			41,544			4,285
Net loans - covered		1,062,546			1,144,372			1,256,158			1,396,798			1,534,899			1,213,859			1,711,699
Net loans		3,969,676			3,880,195			3,975,443			4,142,371			4,258,157			3,991,142			4,456,281
Premises and equipment		128,168			116,070			115,279			119,006			117,659			119,646			114,371
Goodwill		77,158			52,004			51,820			51,820			51,820			58,253			51,820
Other intangibles		9,094			4,697			5,031			5,421			5,841			6,067			6,621
FDIC indemnification asset		173,900			183,801			186,125			208,448			232,734			187,962			252,912
Accrued interest and other assets		272,084			273,773			289,393			289,139			256,906			281,031			241,576
Total Assets	$	6,515,756		$	6,136,815		$	6,219,754		$	6,266,408		$	6,270,480		$	6,284,961		$	6,485,632
LIABILITIES
Deposits
Interest-bearing demand	$	1,388,903		$	1,153,178		$	1,130,503		$	1,088,791		$	1,086,685		$	1,191,064		$	1,076,403
Savings		1,617,588			1,659,152			1,636,821			1,585,065			1,490,132			1,624,840			1,391,066
Time		1,623,921			1,554,497			1,634,779			1,757,668			1,861,296			1,642,108			2,032,719
Total interest-bearing deposits		4,630,412			4,366,827			4,402,103			4,431,524			4,438,113			4,458,012			4,500,188
Noninterest-bearing		860,863			735,621			734,674			733,242			741,343			766,366			744,159
Total deposits		5,491,275			5,102,448			5,136,777			5,164,766			5,179,456			5,224,378			5,244,347
Federal funds purchased and securities sold under agreements to repurchase		98,268			100,990			95,297			89,535			63,489			96,060			47,536
Long-term debt		76,671			94,150			102,506			119,932			128,998			98,185			299,202
Other long-term debt		0			0			20,393			20,620			20,620			10,169			20,620
Total borrowed funds		174,939			195,140			218,196			230,087			213,107			204,414			367,358
Accrued interest and other liabilities		129,578			113,418			157,031			176,493			180,901			143,917			190,940
Total Liabilities		5,795,792			5,411,006			5,512,004			5,571,346			5,573,464			5,572,709			5,802,645
SHAREHOLDERS' EQUITY
Preferred stock		0			0			0			0			0			0			11,717
Common stock		579,321			578,380			577,417			579,790			579,701			578,725			572,161
Retained earnings		323,624			331,107			318,466			308,841			306,923			320,579			290,510
Accumulated other comprehensive loss		(5,396	)		(6,013	)		(10,488	)		(13,251	)		(8,584	)		(8,758	)		(8,694	)
Treasury stock, at cost		(177,585	)		(177,665	)		(177,645	)		(180,318	)		(181,024	)		(178,294	)		(182,707	)
Total Shareholders' Equity		719,964			725,809			707,750			695,062			697,016			712,252			682,987
Total Liabilities and Shareholders' Equity	$	6,515,756		$	6,136,815		$	6,219,754		$	6,266,408		$	6,270,480		$	6,284,961		$	6,485,632

-7-

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)

	Quarterly Averages																		Year-to-Date Averages
	Dec. 31, 2011						Sep. 30, 2011						Dec. 31, 2010						Dec. 31, 2011						Dec. 31, 2010
	Balance			Yield			Balance			Yield			Balance			Yield			Balance			Yield			Balance			Yield
Earning assets
Investment securities	$	1,257,574			2.25	%	$	1,199,473			2.51	%	$	798,135			2.85	%	$	1,149,772			2.52	%	$	662,344			3.42	%
Interest-bearing deposits with other banks		485,432			0.25	%		306,969			0.27	%		405,920			0.36	%		361,591			0.31	%		459,618			0.34	%
Gross loans (2)		4,271,130			6.27	%		4,180,594			6.47	%		4,588,569			6.59	%		4,290,735			6.49	%		4,785,437			6.67	%
Total earning assets		6,014,136			4.95	%		5,687,036			5.30	%		5,792,624			5.64	%		5,802,098			5.32	%		5,907,399			5.81	%
Nonearning assets
Allowance for loan and lease losses		(106,487	)					(107,101	)					(76,537	)					(97,826	)					(64,694	)
Cash and due from banks		121,603						110,336						122,167						115,692						228,539
Accrued interest and other assets		486,504						446,544						432,226						464,997						414,388
Total assets	$	6,515,756					$	6,136,815					$	6,270,480					$	6,284,961					$	6,485,632
Interest-bearing liabilities
Total interest-bearing deposits	$	4,630,412			0.75	%	$	4,366,827			0.89	%	$	4,438,113			1.16	%	$	4,458,012			0.91	%	$	4,500,188			1.30	%
Borrowed funds
Short-term borrowings		98,268			0.10	%		100,990			0.17	%		63,489			0.21	%		96,060			0.17	%		47,536			0.20	%
Long-term debt		76,671			3.59	%		94,150			3.65	%		128,998			3.67	%		98,185			3.65	%		299,202			2.79	%
Other long-term debt		0			N/M			0			N/M			20,620			5.10	%		10,169			3.85	%		20,620			5.92	%
Total borrowed funds		174,939			1.63	%		195,140			1.85	%		213,107			2.78	%		204,414			2.03	%		367,358			2.63	%
Total interest-bearing liabilities		4,805,351			0.79	%		4,561,967			0.93	%		4,651,220			1.23	%		4,662,426			0.96	%		4,867,546			1.40	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits		860,863						735,621						741,343						766,366						744,159
Other liabilities		129,578						113,418						180,901						143,917						190,940
Shareholders' equity		719,964						725,809						697,016						712,252						682,987
Total liabilities & shareholders' equity	$	6,515,756					$	6,136,815					$	6,270,480					$	6,284,961					$	6,485,632
Net interest income (1)	$	65,476					$	65,218					$	67,906					$	263,896					$	275,510
Net interest spread (1)					4.16	%					4.37	%					4.41	%					4.36	%					4.41	%
Net interest margin (1)					4.32	%					4.55	%					4.65	%					4.55	%					4.66	%

⁽¹⁾ Not tax equivalent.

⁽²⁾ Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans.

-8-

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)

	Linked Qtr. Income Variance									Comparable Qtr. Income Variance									Year-to-Date Income Variance
	Rate			Volume			Total			Rate			Volume			Total			Rate			Volume			Total
Earning assets
Investment securities	$	(771	)	$	330		$	(441	)	$	(1,201	)	$	2,611		$	1,410		$	(5,973	)	$	12,297		$	6,324
Interest-bearing deposits with other banks		(11	)		115			104			(111	)		51			(60	)		(132	)		(306	)		(438	)
Gross loans (2)		(2,061	)		1,431			(630	)		(3,667	)		(5,019	)		(8,686	)		(8,440	)		(32,131	)		(40,571	)
Total earning assets		(2,843	)		1,876			(967	)		(4,979	)		(2,357	)		(7,336	)		(14,545	)		(20,140	)		(34,685	)
Interest-bearing liabilities
Total interest-bearing deposits	$	(1,532	)	$	500		$	(1,032	)	$	(4,497	)	$	365		$	(4,132	)	$	(17,169	)	$	(386	)	$	(17,555	)
Borrowed funds
Short-term borrowings		(18	)		(1	)		(19	)		(17	)		9			(8	)		(13	)		82			69
Long-term debt		(16	)		(158	)		(174	)		(28	)		(473	)		(501	)		2,587			(7,342	)		(4,755	)
Other long-term debt		0			0			0			0			(265	)		(265	)		(428	)		(402	)		(830	)
Total borrowed funds		(34	)		(159	)		(193	)		(45	)		(729	)		(774	)		2,146			(7,662	)		(5,516	)
Total interest-bearing liabilities		(1,566	)		341			(1,225	)		(4,542	)		(364	)		(4,906	)		(15,023	)		(8,048	)		(23,071	)
Net interest income (1)	$	(1,277	)	$	1,535		$	258		$	(437	)	$	(1,993	)	$	(2,430	)	$	478		$	(12,092	)	$	(11,614	)

⁽¹⁾ Not tax equivalent.

⁽²⁾ Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans.

-9-

FIRST FINANCIAL BANCORP.

CREDIT QUALITY

(excluding covered assets)

(Dollars in thousands)

(Unaudited)

	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Full Year			Full Year
	2011			2011			2011			2011			2010			2011			2010
ALLOWANCE FOR LOAN AND LEASE LOSS ACTIVITY
Balance at beginning of period	$	54,537		$	53,671		$	53,645		$	57,235		$	57,249		$	57,235		$	59,311
Provision for uncovered loan and lease losses		5,164			7,643			5,756			647			9,741			19,210			33,564
Gross charge-offs
Commercial		1,742			879			383			432			5,131			3,436			13,324
Real estate - construction		2,105			1,771			1,213			1,190			500			6,279			8,619
Real estate - commercial		2,505			2,997			2,791			2,089			1,887			10,382			8,191
Real estate - residential		473			564			406			108			196			1,551			1,693
Installment		115			162			177			72			231			526			1,154
Home equity		488			510			923			262			1,846			2,183			3,499
Other		363			291			339			448			494			1,441			1,871
Total gross charge-offs		7,791			7,174			6,232			4,601			10,285			25,798			38,351
Recoveries
Commercial		348			92			222			100			57			762			620
Real estate - construction		5			0			27			0			0			32			24
Real estate - commercial		68			168			38			35			243			309			1,082
Real estate - residential		3			4			29			9			6			45			24
Installment		96			87			82			98			116			363			519
Home equity		71			9			12			25			74			117			192
Other		75			37			92			97			34			301			250
Total recoveries		666			397			502			364			530			1,929			2,711
Total net charge-offs		7,125			6,777			5,730			4,237			9,755			23,869			35,640
Ending allowance for uncovered loan and lease losses	$	52,576		$	54,537		$	53,671		$	53,645		$	57,235		$	52,576		$	57,235
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)
Commercial		0.65	%		0.39	%		0.08	%		0.17	%		2.72	%		0.33	%		1.69	%
Real estate - construction		6.13	%		4.96	%		3.42	%		3.05	%		1.15	%		4.35	%		4.33	%
Real estate - commercial		0.80	%		0.98	%		0.97	%		0.73	%		0.56	%		0.87	%		0.63	%
Real estate - residential		0.64	%		0.86	%		0.58	%		0.15	%		0.27	%		0.56	%		0.56	%
Installment		0.11	%		0.47	%		0.58	%		(0.16	)%		0.64	%		0.25	%		0.85	%
Home equity		0.46	%		0.57	%		1.07	%		0.28	%		2.07	%		0.59	%		0.99	%
Other		2.47	%		2.46	%		2.68	%		4.09	%		6.26	%		2.86	%		5.67	%
Total net charge-offs		0.95	%		0.96	%		0.83	%		0.61	%		1.39	%		0.84	%		1.27	%
COMPONENTS OF NONPERFORMING LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS
Nonaccrual loans
Commercial	$	7,809		$	10,792		$	9,811		$	9,918		$	13,729		$	7,809		$	13,729
Real estate - construction		10,005			13,844			13,237			14,199			12,921			10,005			12,921
Real estate - commercial		28,349			26,408			26,213			30,846			28,342			28,349			28,342
Real estate - residential		5,692			5,507			4,564			4,419			4,607			5,692			4,607
Installment		371			322			335			262			150			371			150
Home equity		2,073			2,277			2,376			2,404			2,553			2,073			2,553
Total nonaccrual loans		54,299			59,150			56,536			62,048			62,302			54,299			62,302
Restructured loans
Accruing		4,009			4,712			3,039			3,923			3,508			4,009			3,508
Nonaccrual		18,071			12,571			14,443			14,609			14,105			18,071			14,105
Total restructured loans		22,080			17,283			17,482			18,532			17,613			22,080			17,613
Total nonperforming loans		76,379			76,433			74,018			80,580			79,915			76,379			79,915
Other real estate owned (OREO)		11,317			12,003			16,313			14,953			17,907			11,317			17,907
Total nonperforming assets		87,696			88,436			90,331			95,533			97,822			87,696			97,822
Accruing loans past due 90 days or more		191			235			149			241			370			191			370
Total underperforming assets	$	87,887		$	88,671		$	90,480		$	95,774		$	98,192		$	87,887		$	98,192
Total classified assets	$	162,372		$	172,581		$	184,786		$	185,738		$	202,140		$	162,372		$	202,140
CREDIT QUALITY RATIOS (excluding covered assets)
Allowance for loan and lease losses to
Nonaccrual loans (1)		96.83	%		92.20	%		94.93	%		86.46	%		91.87	%		96.83	%		91.87	%
Nonperforming loans		68.84	%		71.35	%		72.51	%		66.57	%		71.62	%		68.84	%		71.62	%
Total ending loans		1.77	%		1.86	%		1.92	%		1.93	%		2.03	%		1.77	%		2.03	%
Nonperforming loans to total loans		2.57	%		2.60	%		2.65	%		2.90	%		2.84	%		2.57	%		2.84	%
Nonperforming assets to
Ending loans, plus OREO		2.94	%		3.00	%		3.22	%		3.42	%		3.45	%		2.94	%		3.45	%
Total assets		1.31	%		1.40	%		1.50	%		1.51	%		1.57	%		1.31	%		1.57	%

⁽¹⁾ Excludes nonaccrual restructured loans

-10-

FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands, except per share)

(Unaudited)

																Twelve months ended,
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2011			2011			2011			2011			2010			2011			2010
PER COMMON SHARE
Market Price
High	$	17.06		$	17.12		$	17.20		$	18.91		$	19.41		$	18.91		$	21.32
Low	$	13.40		$	13.34		$	15.04		$	15.65		$	16.21		$	13.34		$	13.89
Close	$	16.64		$	13.80		$	16.69		$	16.69		$	18.48		$	16.64		$	18.48
Average common shares outstanding - basic		57,744,662			57,735,811			57,694,792			57,591,568			57,573,544			57,691,979			56,969,491
Average common shares outstanding - diluted		58,672,575			58,654,099			58,734,662			58,709,037			58,688,415			58,693,205			57,993,078
Ending common shares outstanding		58,267,054			58,256,136			58,259,440			58,286,890			58,064,977			58,267,054			58,064,977
REGULATORY CAPITAL		Preliminary
Tier 1 Capital	$	636,836		$	661,838		$	681,492		$	691,559		$	680,145		$	636,836		$	680,145
Tier 1 Ratio		17.47	%		18.81	%		20.14	%		20.49	%		18.45	%		17.47	%		18.45	%
Total Capital	$	683,255		$	706,570		$	724,763		$	734,724		$	727,252		$	683,255		$	727,252
Total Capital Ratio		18.74	%		20.08	%		21.42	%		21.76	%		19.72	%		18.74	%		19.72	%
Total Capital in excess of minimum requirement	$	391,623		$	425,128		$	454,034		$	464,660		$	432,274		$	391,623		$	432,274
Total Risk-Weighted Assets	$	3,645,403		$	3,518,026		$	3,384,115		$	3,375,800		$	3,687,224		$	3,645,403		$	3,687,224
Leverage Ratio		9.87	%		10.87	%		11.01	%		11.09	%		10.89	%		9.87	%		10.89	%
OTHER CAPITAL RATIOS
Ending shareholders' equity to ending assets		10.68	%		11.47	%		11.95	%		11.21	%		11.16	%		10.68	%		11.16	%
Ending tangible shareholders' equity to ending tangible assets		9.23	%		10.38	%		11.11	%		10.40	%		10.33	%		9.23	%		10.33	%
Average shareholders' equity to average assets		11.05	%		11.83	%		11.38	%		11.09	%		11.12	%		11.33	%		10.53	%
Average common shareholders' equity to average assets		11.05	%		11.83	%		11.38	%		11.09	%		11.12	%		11.33	%		10.35	%
Average tangible shareholders' equity to average tangible assets		9.58	%		10.70	%		10.56	%		10.28	%		10.29	%		9.81	%		9.73	%
Average tangible common shareholders' equity to average tangible assets		9.58	%		10.70	%		10.56	%		10.28	%		10.29	%		9.81	%		9.55	%

-11-

EX-99.2