First Financial Bancorp. (FFBC) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with record high fee income and organic loan growth. The Westfield acquisition, despite increasing expenses, is expected to bring long-term benefits. Positive guidance on FX and leasing income, along with plans for expansion, indicate growth potential. Although there are concerns about margin dependence on rate cuts and uncertainty in cost-saving timelines, the overall sentiment from analysts is positive, particularly with the strong trust segment performance and strategic market expansions. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
Key Financial Performance
Adjusted Earnings Per Share (Q4 2025) $0.80, leading to an adjusted return on assets of 1.52% and an adjusted return on tangible common equity of 20.3%. The net interest margin declined slightly from the third quarter due to short-term rate reductions by the Federal Reserve, but funding cost reductions offset most of the impact.
Loan Growth (Q4 2025) 4% on an annualized basis. This growth was organic and driven by Summit and C&I.
Total Average Deposits (Q4 2025) Increased by approximately 7% on an annualized basis, excluding the impact from the Westfield acquisition.
Adjusted Fee Income (Q4 2025) $77 million, a 5% increase compared to the linked quarter. Wealth management and foreign exchange income both increased by double-digit percentages, while leasing and mortgage income also remained strong.
Adjusted Noninterest Expenses (Q4 2025) Increased by 6% from the linked quarter, primarily driven by the Westfield acquisition.
Provision Expense (Q4 2025) $10.1 million, in line with expectations. Nonperforming assets increased slightly to 0.48% of assets, while classified assets declined slightly to 1.11% of assets.
Net Charge-Offs (Q4 2025) 27 basis points, within the expected range.
Adjusted Net Income (Full Year 2025) $281 million or $2.92 per share. Adjusted return on assets was 1.49% and adjusted return on tangible common equity was 19.3%.
Net Interest Margin (Full Year 2025) Declined year-over-year from 4.05% to 3.98%, but diligent management of deposit costs offset most of the impact of short-term rate decreases.
Adjusted Noninterest Income (Full Year 2025) Increased by 16% to a record $280 million, led by growth in wealth management, foreign exchange, and mortgage income.
Record Revenue (Full Year 2025) Almost $922 million, an 8% increase over 2024.
Provision Expense (Full Year 2025) Declined 21% from 2024. Net charge-offs as a percent of average loans declined 5 basis points to 25 basis points, and ACL coverage increased by 6 basis points to 1.39%.
Tangible Book Value Per Share (Full Year 2025) Increased by 11% from $14.15 to $15.74, driven by strong earnings despite the negative impact of the Westfield acquisition.
Net Interest Margin (Q4 2025) 3.98%, a decrease of 4 basis points from the linked quarter. Asset yields declined 19 basis points, while total deposit costs declined 15 basis points, partially offsetting the impact of lower asset yields.
Loan Balances (Q4 2025) Increased $1.7 billion, including $1.6 billion from the Westfield transaction. Organic growth was $131 million or 4% on an annualized basis.
Total Deposit Balances (Q4 2025) Increased $2 billion, including $1.8 billion from the Westfield transaction. Organic growth was $264 million.
Adjusted Fee Income (Q4 2025) $77.3 million, the highest quarter in the company's history. Wealth management had a record quarter, while mortgage and deposit service charge income also increased.
Noninterest Expense (Q4 2025) Core expenses increased $8.6 million during the period, driven by the Westfield acquisition.
Allowance for Credit Losses (ACL) (Q4 2025) 1.39% of total loans, up slightly from the linked quarter. The ACL balance increased due to the Westfield acquisition and $10.1 million of provision expense.
Nonperforming Assets (NPAs) (Q4 2025) Increased slightly to 0.48% of assets, while classified asset balances as a percentage of total assets decreased to 1.11%.
Tangible Book Value (Q4 2025) $15.74, while the tangible common equity ratio was 7.79%. The Westfield acquisition negatively impacted these metrics.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Western Michigan banking office launch: Successfully launched a new banking office in Grand Rapids, Western Michigan.
Acquisition of Westfield Bank: Acquired Westfield Bank, adding $1.6 billion in loan balances and $1.8 billion in deposit balances, strengthening presence in Midwest metropolitan markets.
Acquisition of Bank Financial: Acquired Bank Financial, providing a platform for growth in Midwest metropolitan markets.
Record earnings: Achieved record earnings for Q4 2025 with adjusted EPS of $0.80 and adjusted return on tangible common equity of 20.3%.
Loan and deposit growth: Loan growth of 4% annualized and deposit growth of 7% annualized, excluding Westfield acquisition.
Noninterest income: Adjusted fee income reached $77 million, a 5% increase from the previous quarter, with strong performance in wealth management, foreign exchange, leasing, and mortgage income.
Expense management: Noninterest expenses increased by 6% due to the Westfield acquisition, but cost savings are expected to materialize in 2026.
Focus on Midwest growth: Strengthened core funding and expanded into two major Midwest metropolitan markets through acquisitions and new office launch.
Commitment to community: Received an outstanding CRA rating for supporting lower-income communities and recognized as an exceptional workplace by Gallup.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Net Interest Margin Decline: The net interest margin decreased by 4 basis points from the linked quarter to 3.98%, driven by a decline in asset yields. This could impact profitability if the trend continues.
Nonperforming Assets (NPAs) Increase: Nonperforming assets increased slightly to 0.48% of total assets, driven by three loans. This could indicate potential credit quality issues.
Provision Expense and Net Charge-Offs: Provision expense was $10.1 million, driven by net charge-offs and loan growth. Net charge-offs increased to 27 basis points, which could signal rising credit losses.
Westfield Acquisition Impact: The acquisition of Westfield negatively impacted capital levels, including tangible book value and the tangible common equity ratio. Integration challenges and cost management could pose risks.
Seasonal Deposit Outflows: Core deposit balances are expected to decline modestly in the near term due to seasonal outflows of public funds, potentially impacting liquidity.
Regulatory and Capital Ratios: While capital ratios remain above regulatory minimums, the tangible common equity ratio declined to 7.79%, partly due to the Westfield acquisition. This could limit financial flexibility.
Expense Management Challenges: Noninterest expenses increased by 6% from the linked quarter, primarily due to the Westfield acquisition. Realizing cost savings from acquisitions is expected to take time, posing short-term expense risks.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Loan Growth: Excluding the impact from Bank Financial, the company expects payoff pressure to ease in the coming quarter, resulting in low single-digit organic loan growth on an annualized basis during the first quarter. For the full year, as originations ramp up, loan growth is expected to be in the 6% to 8% range.
Core Deposit Balances: Core deposit balances are expected to decline modestly in the near term due to seasonal outflows of public funds.
Net Interest Margin: The net interest margin is expected to remain among the highest in the peer group, ranging between 3.94% and 3.99% over the next quarter, assuming a 25 basis point rate cut in March.
Credit Costs and ACL Coverage: First quarter credit costs are expected to approximate fourth quarter levels, and ACL coverage is expected to remain stable as a percentage of loans.
Fee Income: Fee income is expected to be between $71 million and $73 million, including $14 million to $16 million for foreign exchange and $19 million to $21 million for leasing business revenue. This range includes the impact from both Westfield and Bank Financial.
Noninterest Expense: Noninterest expense is expected to be between $156 million and $158 million, reflecting continued focus on expense management. This range includes the impact from both Westfield and Bank Financial, which should approximate $11 million and $10 million, respectively. Cost savings from these integrations are expected to materialize later in 2026.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Total shareholder return: 40% of earnings returned to shareholders through common dividend.
Shareholder return commitment: Commitment to providing an attractive return to shareholders and evaluating capital actions to support this commitment.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you explain the fee income guidance for the rest of the year, particularly regarding FX and leasing?
A:The fourth quarter was strong, especially for FX, which had its best quarter ever. However, there is seasonality in Q1, and nonsolicit agreements will burn off after Q1, creating more opportunities. FX is expected to grow year-over-year, with a compound annual growth rate of 14%-15% since 2019 and projected low double-digit growth in the coming years. Leasing growth has slowed from 10%-15% in past years to high single digits as the portfolio matures.
Q:What are the plans for growth in Grand Rapids?
A:A team was brought in last year, achieving close to $100 million in loan commitments and $20-$30 million in deposits. Plans include adding private banking, mortgage services, and a full banking office. Management sees opportunities for expansion in Michigan due to M&A activity among larger banks.
Q:Is the 6%-8% loan growth guidance for the full year on an organic basis?
A:Yes, the 6%-8% growth is organic and excludes balances from the Bank Financial acquisition. Q4 2025 saw record origination and payoff activity, with Q1 expected to be seasonally lower but ramping up later in the year. Pipelines look healthy, and payoffs are expected to decrease.
Q:What is the margin outlook for the first quarter and the impact of purchase accounting accretion?
A:The margin outlook for Q1 is 3.94%-3.99%. Purchase accounting accretion from Westfield is expected to remain at 4 basis points, with minimal impact from Bank Financial due to the sale of a significant portion of its loan portfolio.
Q:What are the major drivers of margin over the course of 2026?
A:The margin is highly dependent on short-term rate cuts. If no cuts occur, the margin will stay relatively flat. The forecast includes two rate cuts in March and June, which would slightly lower the margin to 3.90%-3.95%.
Q:What is the trajectory of quarterly expenses through the fourth quarter?
A:Quarterly expenses are expected to trend to the low $150 million range by the back half of the year. Cost savings from the Westfield and Bank Financial integrations will be realized 90 days post-conversion, but variable compensation tied to fee revenue will offset some savings.
Q:What are the plans for growth in Chicago following the Bank Financial acquisition?
A:Plans include organic growth through hiring commercial, wealth, and mortgage bankers, retooling retail centers to originate loans, and expanding HELOC lending. M&A opportunities may be considered but are not the current focus.
Q:How will the efficiency ratio trend through the year?
A:The efficiency ratio is expected to be in the mid-50% range by the back half of the year. Adjustments for Summit's equipment leasing business, which skews the ratio, would place it in the 52%-53% range.
Q:What contributed to the strong performance in the trust segment?
A:The strong quarter was driven by new asset inflows, growth in assets under management, and a strong performance from the M&A advisory unit. Westfield did not contribute to this segment.
Q:Will total earning assets follow loan growth this year?
A:Total earning assets are expected to generally follow loan growth. The securities portfolio may temporarily increase due to liquidity from the Bank Financial deal but will be reduced as loan growth progresses.
Q:What are the catalysts for loan growth improvement and its timing?
A:Loan growth improvement is tied to seasonality, with Q1 typically being lower, and ramping up resources in the Bank Financial markets. The back half of the year will see more contributions from new hires and market expansions.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact timing and magnitude of cost savings from the integrations of Westfield and Bank Financial, as well as the precise impact of rate cuts on the margin beyond general trends.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ACL balance
Asset quality
Balance sheet
Bank interest
CI Summit
CI deposit
Capital level
Corporate JL
Financial basis
Instructions conference
JL conference
JL today
NPAs charge
Reserve Balance
Summit CI
Summit Slide
Summit result
Wealth exchange
Wealth mortgage
acquisition ACL
acquisition Asset
acquisition Bank
asset basis
balance transaction
equity interest
expectation
expense charge
income record
increase majority
loan basis
loan increase
mortgage income
noninterest
offs loan
percentage asset
point asset
result record
term rate
transaction increase
type
value TCE
wealth
FFBC Transcript
First Financial Bancorp. (FFBC) Q4 2025 Earnings Call Transcript
Positive1-29
The earnings call highlights strong financial performance with record high fee income and organic loan growth. The Westfield acquisition, despite increasing expenses, is expected to bring long-term benefits. Positive guidance on FX and leasing income, along with plans for expansion, indicate growth potential. Although there are concerns about margin dependence on rate cuts and uncertainty in cost-saving timelines, the overall sentiment from analysts is positive, particularly with the strong trust segment performance and strategic market expansions. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
First Financial Bancorp. (FFBC) Q3 2025 Earnings Call Transcript
Positive10-24
The earnings call revealed record revenue and noninterest income, a robust net interest margin, and improved tangible book value. Despite a slight dip in loan balances, deposit balances increased significantly. The Q&A highlighted a diversified loan portfolio, mitigated rate cut impacts, and growth in commercial verticals. While some uncertainty exists in FX trading revenue, overall guidance and strategic acquisitions suggest positive momentum. The market cap of approximately $2 billion implies moderate sensitivity to these developments, likely resulting in a positive stock price movement of 2% to 8% over the next two weeks.
First Financial Bancorp. (FFBC) Q2 2025 Earnings Call Transcript
Unknown7-25
The earnings call presents a mixed picture: strong financial metrics like ROTCE and NIM are positive, but guidance on margins and loan growth is cautious due to expected rate cuts and commercial real estate payoffs. The Q&A highlights concerns about deposit costs and non-performing assets, but also potential efficiency gains and steady growth in other business lines. The market cap suggests moderate reactions, leading to a neutral prediction for the stock price in the near term.
First Financial Bancorp. (FFBC) Q1 2025 Earnings Call Transcript
Unknown4-25
The earnings call reveals mixed signals: strong asset quality and shareholder returns are positive, but declining deposit balances, investment portfolio losses, and tariff uncertainties pose concerns. The Q&A section highlights potential risks in concentrated areas and M&A uncertainties. While financial metrics like net interest margin and fee income declined, guidance remains stable. The market cap suggests moderate reactions, leading to a neutral sentiment prediction with expected stock price movement between -2% to 2%.
FFBC Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
