First Financial Bancorp (NASDAQ:FFBC) reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an adjusted earnings per share (EPS) of $0.71, compared to the forecasted $0.62. The company also reported record revenue of $854 million for the full year, marking a 2% increase from 2023. Following the announcement, FFBC's stock showed a positive movement in the premarket session.
Key Takeaways
- FFBC's Q4 2024 EPS of $0.71 exceeded expectations by $0.09.
- Record annual revenue of $854 million, a 2% increase from 2023.
- Pre-market stock price rose by 1.39% following the earnings announcement.
- Continued expansion into new markets, including Grand Rapids, Michigan.
- Projected low single-digit loan growth in Q1 2025.
Company Performance
First Financial Bancorp demonstrated strong financial performance in 2024, achieving record revenue and robust earnings growth. The company's expansion into new markets and strategic initiatives in leasing, foreign exchange, and wealth management contributed to its success. Despite a decline in net interest margin from 4.4% to 4.05%, the company maintained a healthy return on assets of 1.4% and a return on tangible common equity of 19.9%.
Financial Highlights
- Revenue: $854 million (up 2% year-over-year)
- Q4 2024 EPS: $0.71 (up from $0.62 forecast)
- Return on Assets: 1.4%
- Net Interest Margin: Declined to 4.05%
- Loan Growth: 7.6% for the year, reaching $11.8 billion
Earnings vs. Forecast
FFBC's Q4 2024 EPS of $0.71 surpassed the forecast of $0.62 by approximately 14.5%, marking a significant positive surprise. This performance reflects the company's ability to exceed market expectations consistently, with a record revenue of $854 million for the year, compared to the forecasted $216.8 million for the quarter.
Market Reaction
Following the earnings release, FFBC's stock price increased by 1.39% in the premarket session, reaching $28.38. This upward movement reflects investor optimism about the company's financial health and future growth prospects. The stock remains within its 52-week range, with a high of $31.18 and a low of $20.59.
Outlook & Guidance
Looking forward, FFBC anticipates low single-digit loan growth in Q1 2025 and expects its net interest margin to range between 3.85% and 3.9%. The company projects fee income between $63 million and $65 million. Management also highlighted potential merger and acquisition opportunities in the $1-$5 billion bank space.
Executive Commentary
CEO Archie Brown emphasized the company's momentum in expansion markets, stating, "We continue to gain momentum in our expansion markets." He also highlighted the importance of an engaged team, saying, "Performing at a consistently high level requires an engaged team."
Q&A
During the earnings call, analysts inquired about seasonal loan growth patterns and the company's foreign exchange transactions. FFBC management explained their approach to maintaining healthy loan pipelines and anticipated normalized credit losses of 25-30 basis points.
Risks and Challenges
- Potential impact of interest rate fluctuations on net interest margin.
- Challenges in integrating new acquisitions in expansion markets.
- Competition from larger financial institutions in key markets.
- Economic uncertainties that could affect loan and deposit growth.
- Regulatory changes impacting banking operations and profitability.
Full transcript - First Financial Bancorp (FFBC) Q4 2024:
Rob, Conference Call Operator: Thank you for standing by, and welcome to the First Financial Bancorp 4th Quarter 20 24 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer Thank you. I'd now like to turn the call over to Scott Crawley. You may begin.
Yes.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Thank you, Rob. Good morning, everyone, and thank you for joining us on today's conference call to discuss First Financial Bancorp's 4th quarter and full year financial results. Participating on today's call will be Archie Brown, President and Chief Executive Officer Jamie Anderson, Chief Financial Officer and Bill Harrod, Chief Credit Officer. Both the press release we issued yesterday and the accompanying slide presentation are available on our website at www.bankatfirst.com under the Investor Relations section. We'll make reference to the slides contained in the accompanying presentation during today's call.
Additionally, please refer to the forward looking statement disclosure contained in the Q4 2024 earnings release as well as our SEC filings for a full discussion of the company's risk factors. The information we will provide today is accurate as of December 31, 2024, and we will not be updating any forward looking statements to reflect facts or circumstances after this call. I'll now turn the call over to Archie Brown. Thanks, Scott. Good morning, everyone, and thank you for joining us on today's call.
Yesterday afternoon, we announced our financial results for the Q4 and full year 2024. Before I turn the call over to Jamie, I would like to provide some highlights from the most recent quarter and recap this year's exceptional performance. I'm very pleased with our strong Q4. Adjusted earnings per share were $0.71 leading to return on assets of 1.7% and return on tangible common equity ratio of 19.9%. As expected due to decreases in short term rates by the Fed, the decline in asset yields outpaced the decline in deposit costs leading to a reduction in our net interest margin to 3.94%.
Balance sheet trends were very strong for the quarter with loan growth exceeding 7% on an annualized basis and total deposits surging by approximately 16% on an annualized basis. Non interest income was robust in the Q4 with leasing, foreign exchange and wealth management income all increasing by double digit percentages from the linked quarter. While expenses increased by 5% from the linked quarter, the increase was driven by higher incentive compensation tied to the strong fee income and overall company performance. Our workforce efficiency initiative continued during the quarter and we've eliminated 145 positions to date. We expect to complete this work in 2025.
Asset quality was relatively stable for the quarter. Non performing assets were flat compared to the linked quarter at 0.36%, while classified assets increased by 7 basis points to 1.21%. The increase in classified assets was driven by the mutually agreed upon termination of a foreign exchange trade resulting in a $45,000,000 obligation from the customer which we believe is fully collateralized. We expect the customer to pay this obligation in 2025. Net charge offs were slightly elevated due to the resolution of 3 loans that have been longer term workouts.
We believe that overall credit trends are improving and as a result, we anticipate lower credit costs going forward. 2024 was an excellent year for our company. On an adjusted basis, we earned $249,000,000 or $2.61 per share, while return on assets was 1.4% return on assets was 1.4% and return on tangible common equity was 19.9%. While the net interest margin declined from 4.4% to 4.05% due to declining short term rates, strong loan growth offset most of the impact with net interest income declining by only 2.5%. Non interest income increased by more than 13% to a record $241,800,000 led by growth in leasing and wealth management income.
The result was record revenue for the company of approximately $854,000,000 which was a 2% increase over 2023. I'm very pleased with our balance sheet growth for the year. Total (EPA:TTEF) loans increased by 7.6 percent to $11,800,000,000 and total deposits increased by 7.2 percent to $14,300,000,000 Additionally, tangible common equity increased by 56 basis points to 7.73 percent and tangible book value per share increased from $12.38 to $14.15 which was a 14% increase. Similar to Q4, asset quality was relatively stable for the year. Net charge offs as a percentage of average loans declined 3 basis points to 30 basis points and nonperforming assets as a percent of total assets declined by 2 basis points to 0.36%.
With that, I'll now turn the call over to Jamie to discuss these results in greater detail. After Jamie's discussion, I will wrap up with some additional forward looking commentary and closing remarks. Jamie?
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Thank you, Archie, and good morning, everyone. Slides 4, 5 and 6 provide a summary of our most recent financial results. The 4th quarter was highlighted by strong earnings and a net interest margin that exceeded our expectations as well as both loan and deposit growth. Our net interest margin remains very strong at 3.94 despite a decline of 14 basis points from the linked quarter. Deposit costs declined 13 basis points during the period, while loan yields decreased 37 basis points.
Loan growth exceeded our expectations during the quarter coming in at 7% on an annualized basis. The growth was not concentrated in one particular area, it's C and I, ICRE, mortgage and leasing all having strong quarters. Average deposit balances increased $543,000,000 or 16% on an annualized basis. We had broad based growth across all product types, excluding savings accounts and high cost brokered CDs. We maintained 21% of our total balances in non interest bearing accounts and are strategically focused on growing lower cost deposit balances.
Turning to the income statement. 4th quarter fee income was solid, led by foreign exchange, leasing and record wealth management income. Non interest expenses increased slightly from the linked quarter due to higher incentive compensation, which was tied to fee income and our overall company performance. However, the impact from our efficiency initiative is becoming more meaningful and we expect to see further benefits in the coming periods. Our ACL coverage decreased 4 basis points during the quarter to 1.33 percent of total loans.
This resulted in $9,400,000 of provision expense during the period, which was driven by loan growth and net charge offs. Overall, asset quality trends were stable. NPAs as a percentage of assets were relatively flat at 36 basis points, while 4th quarter net charge offs were 40 basis points on an annualized basis. This put our year to date total in line with expectations at 30 basis points. Classified assets increased 7 basis points to 1 point 2 1 percent of total assets as a single asset offset an otherwise strong quarter of resolution efforts.
From a capital standpoint, our ratios are in excess of both internal and regulatory targets. Tangible book value was $14.15 while a tangible common equity ratio was 7.73%. Slide 7 reconciles our GAAP earnings to adjusted earnings, highlighting items that we believe are important to understanding our quarterly performance. Adjusted net income was $67,700,000 or $0.71 per share for the quarter. Non interest expense adjustments exclude the impact of efficiency costs, tax credit investment write downs and other expenses not expected to recur.
As depicted on Slide 8, these adjusted earnings equate to return on average assets of 1.47%, a return on average tangible common equity of 20% and a pretax pre provision ROA exceeding 2%. Turning to Slides 9 and 10. Net interest margin declined 14 basis points from the linked quarter to 3.94%. Asset yields declined 31 basis points compared to the prior period as loan yields declined 37 basis points and the yield on the investment portfolio increased 4 basis points. Offsetting these increases, total funding costs declined 17 basis points from the linked quarter as deposit costs declined 13 basis points, while average deposit balances increased 4%.
Slide 11 outlines our various sources of liquidity and borrowing capacity. We continue to believe we have the flexibility required to manage the balance sheet through the expected economic environment. Slide 13 illustrates our current loan mix and balance changes compared to the linked quarter. Loan balances increased 7% on an annualized basis with growth in almost every portfolio. As you can see on the right, growth was driven by C and I, leasing, ICRE and mortgage.
Slide 14 provides detail on our loan concentration by industry. We believe our loan portfolio remains sufficiently diversified to protect us from deterioration in any particular industry. Slide 15 provides detail on our office portfolio. Similar to last quarter, about 4% of our total loan book is secured by office space and the overall portfolio metrics remain strong. One office relationship was downgraded to non accrual during the quarter and our total non accrual balance for this portfolio is approximately 26,000,000 dollars Subsequent to year end, the remaining balance of this relationship of $9,000,000 paid off.
Slide 16 shows our deposit mix as well as a progression of average deposits from the linked quarter. In total, average deposit balances increased $543,000,000 during the quarter with increases in most core product types. There was a seasonal increase in public fund balances, while on the consumer side, growth was concentrated in money markets and retail CDs. Slide 7 illustrates trends in our average personal, business and public fund deposits as well as a comparison of our borrowing capacity to our uninsured deposits. On the bottom right of the slide, you can see our adjusted uninsured deposits were $3,700,000,000 This equates to 26% of our total deposits.
We remain comfortable with this concentration and believe our borrowing capacity provides sufficient flexibility to respond to any event that would stress our larger deposit balances. Slide 18 highlights our non interest income for the quarter. Total fee income was $70,000,000 during the quarter with Bannockburn and Summit having strong quarters while Wealth Management posted record results. Non interest expense for the quarter is outlined on Slide 19. Core expenses increased $6,000,000 during the period.
This was driven by higher incentive compensation, which is tied to fee income and the company's overall performance. As I mentioned earlier, we are recognizing more of the expected benefit from our ongoing efficiency initiative and expect to complete this work in 2025. Turning now to Slides 20 21, our ACL model resulted in a total allowance, which includes both funded and unfunded reserves of $174,000,000 $9,400,000 of total provision expense during the period. This resulted in an ACL that was 1.33 percent of total loan. Provision expense was primarily driven by loan growth and net charge offs, which were 40 basis points for the period.
However, about half of those charge offs have been reserved for in prior periods. Additionally, our NPAs to total assets held steady at 36 basis points. In other credit trends, classified asset balances increased to 1.21 percent of total assets. The largest driver of this increase was related to a single asset that was recorded following the mutually agreed upon termination of a foreign exchange transaction. Excluding this item, classified assets declined $27,000,000 during the quarter.
Our ACL coverage decreased slightly. However, we continue to believe that we have modeled conservatively to build a reserve that reflects the losses we expect from our portfolio. We anticipate our ACL coverage will remain relatively flat or increase slightly in future periods as our model responds to changes in the macroeconomic environment. Finally, as shown on Slides 2223, capital ratios remain in excess of regulatory minimums and internal targets. Absent the impact from AOCI, the TCE ratio would have been 9.39% compared to 7.73% as reported and our tangible book value decreased slightly to $14.15 Our total shareholder return remains strong with 35% of our earnings returned to our shareholders during the period through the common dividend.
We maintain our commitment to provide an attractive return to our shareholders and we continue to evaluate capital actions that support that commitment. I'll now turn it back over to Archie for some comments on our outlook. Archie?
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Thank you, Jamie. Before we end our prepared remarks, I want to comment on our forward looking guidance, which can be found on Slide 24. Loan pipelines remain healthy, but we expect loan growth to moderate as we approach seasonal lows and activity and be in the low single digits on an annualized basis for the Q1. For securities, we expect the portfolio to remain relatively stable. Deposit growth has been very strong in the last several quarters, though we expect some of the seasonal flows that came in this past quarter to reverse in the Q1 causing public funds and business balances to be slightly down.
Our net interest margin continues to be strong and industry leading and assuming no additional rate cuts, we expect it to be in the range between 3.85% and 3.9% over the next quarter. We expect our credit costs to be modestly lower over the next quarter with the net charge offs lower than the current period. ACL coverage as a percentage of loans is expected to be stable to slightly increasing. On fee income, we expect to be between $63,000,000 $65,000,000 which includes $11,000,000 to $13,000,000 for foreign exchange and $19,000,000 to $21,000,000 for leasing business revenue. Non interest expense is expected to be between $128,000,000 $130,000,000 and stay stable, excluding the leasing business and fee based incentive expense.
Related to capital, our capital ratios remain strong and we expect to maintain our dividend at the current level. During the year, we were excited to add the Agile team and I want to thank them for making an immediate contribution to our company. We continue to gain momentum in our expansion markets of Chicago, Evansville, Cleveland, Ohio and at the beginning of 2025, we expanded into Grand Rapids, Michigan with the commercial banking team. We look forward to the continued growth and success of our expansion strategies. Performing at a consistently high level requires an engaged team that is committed to its clients and that's what that describes the team here at First Financial (NYSE:SSB).
I want to thank our associates for the outstanding work in 2024. We'll now open up the call for questions.
Rob, Conference Call Operator: Thank you. We will now begin the question and answer session. Your first question today comes from the line of Daniel Tamayo from Raymond (NSE:RYMD) James. Your line is open.
Daniel Tamayo, Analyst, Raymond James: Thank you. Good morning, guys.
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Good day, Daniel.
Daniel Tamayo, Analyst, Raymond James: So, yes, maybe first, you guys gave guidance for the Q1. I appreciate that on loan growth. But it's kind of down from what you did in 2024. So just curious if that's a there's some seasonality in the Q1 number or something unusual there that you expect you would expect growth to pick up as the year goes on or just kind of your comments on loan growth throughout the year if you have some? Thanks.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Yes, Danny. This is Archie. We've seen some pickup in payoffs, primarily on the commercial real estate side. Rates dipped a little bit in the mid Q4 and the payoffs kind of accelerated. And of course rates backed up some by the end of the year.
But we've got a little bit higher expectation for payoffs on that side of our book. Loan activity is good. Seasonally, it's a little bit lower in Q1. So it's kind of a combination of those two things. But overall pipelines are healthy as we said and outlook from our clients overall is I think generally positive.
Daniel Tamayo, Analyst, Raymond James: Okay, terrific. And I guess then shifting over to the margin one for Jamie, similar type of question. You gave the range $385,000,000 to $390,000,000 in the Q1. Just curious how you're thinking about the rest of the year and how the Fed funds cuts would play into that?
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Yes. So we have we gave that guidance for the Q1. And then so in our forecast for 2025 at this point, we have a cut built into the forecast in June. So one cut during the year and our margin essentially remains in that $385,000,000 to $390,000,000 kind of band. So as we get into the 1st part here of $25,000,000 where we just had the cuts, deposit costs continue to come down.
Then obviously with the June cut that we have built into the forecast, we get an immediate impact from that which will bring the margin down slightly just due to the contractual nature, obviously, the loan book where those will come down. Then deposit costs start to pick back start to decline again and catch back up and our margin again stays relatively tight within that range of in that mid-380s call it.
Daniel Tamayo, Analyst, Raymond James: Okay. That's helpful. Appreciate it, Jamie. And then I guess just a quick last one here for you Archie. You guys have been expanding into new markets as you pointed out with Grand Rapids, the latest here in 2025.
Just curious kind of the depth of those investments that you're making in those markets, How quickly you think they may turn into meaningful growth for the bank? And if there's any other markets that you've got your eye on for de novo?
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Yes. Thanks, Danny. I mean the ones we've I guess opened up in the last year to year and a half, I think are performing well both on the loan and deposit side. I wouldn't call them rapid growth or steady growth, which is appropriate. We want to build relationships not just build assets.
So they're going well. We've got teams probably in those markets anywhere from, if you think Chicago is, I think around 5 to 7 people. Cleveland maybe just a little bit less 4 or 5 people to date. The team in Grand Rapids initially is 4. They were part of a bank that has a lot of market share.
So I think they're hitting the ground running. We tend to look at these more opportunistically. So we've got a range of markets that are kind of in or adjacent to the First Financial footprint. And we kind of take the opportunity when something comes up that provides an opportunity to bring a team in that's I think that's when we sort of act. So that's how we think about it.
We don't really have a certain number that we're going to add this year. It's just again when an opportunity presents itself that makes sense to us, we'll do that. We'll take the opportunity to capitalize on it.
Daniel Tamayo, Analyst, Raymond James: All right, great. Well, thank you for all the color.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Thanks, Danny.
Rob, Conference Call Operator: Your next question comes from the line of Terry McEvoy from Stephens Inc. Your line is open.
Terry McEvoy, Analyst, Stephens Inc.: Hi, good morning, everybody.
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Hey, Terry. Terry.
Terry McEvoy, Analyst, Stephens Inc.: Maybe just maybe sure I understand on the expense guide, if the FX is in the midpoint of say 12 and leasing is $20,000,000 in the Q1, that trend that's baked into the $128,000,000 to 130,000,000 dollars of total non interest expense?
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Yes, that's correct. Yes, we get and so just kind of working through a little bit of the dynamics there on the expense side From the Q4 to the Q1, we get about $1,500,000 or so of increase in expenses with just all the payroll taxes starting over. So that's part of why you see a little bit of that increase in the you're not seeing the expenses go down even when we have some of the variable costs going down. So that plays into that Q4 to Q1 expense trend. But yes, it's included in the $128,000,000 to $130,000,000 correct.
Terry McEvoy, Analyst, Stephens Inc.: Okay. Thanks. And then as a follow-up, the classified asset, it was a kind of an FX transaction. And I guess my question is, is there credit risk in that or can you talk about the credit risk in that business? And do you have a specific reserve for that business?
And just provide a little bit more insight. We appreciate it. Yes.
Bill Harrod, Chief Credit Officer, First Financial Bancorp: Good morning. Yes, the trade itself, we entered into a series of forward contracts with the company that had changes in the value between the USD and CAD. And then the macroeconomic conditions in respect of interest rate policies of the central banks of Canada and the U. S. Have resulted in CAD depreciation versus the USD, which has created the negative mark.
Based on the size, we jointly decided to terminate the trade to lock in the negative position and then recorded that as a receivable. Okay. We have collateral to fully support the receivable, including cash on deposits, mortgages on real estate, pledges collateral including all the company's equity and personal guarantees. And on this, we do expect to be repaid in 2025.
Terry McEvoy, Analyst, Stephens Inc.: Great. Appreciate it. Thanks for all the color there.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Thanks, Jerry.
Rob, Conference Call Operator: Your next question comes from the line of Christopher McGratty from KBW. Your line is open. All right.
Terry McEvoy, Analyst, Stephens Inc.: Good morning.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Hey, Chris.
Terry McEvoy, Analyst, Stephens Inc.: Jamie or Archie,
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: the 30 basis I think
Terry McEvoy, Analyst, Stephens Inc.: you mentioned 30 basis points of charge offs in your prepared remarks.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Is that how you think about normalized losses for this bank? I'm sorry, is that how we think? 30 basis points of charge offs, yes. Yes. I mean, when we look ahead, over a longer window, I think if we said to you 25 to 30 basis points feels kind of a norm.
The last 2 years, I think 33 was 2 years ago, 30 was last year. The way we're starting out this year, we feel like it could be a little bit less than that. But if you said over the long term, Chris, kind of in that range, I'd say it's right. Okay. Thanks.
And then any kind of comment
Terry McEvoy, Analyst, Stephens Inc.: that you could provide on inorganic growth? There's a lot of optimism in the banks for deregulation and you do have a multiple and strong capital. Thoughts on incremental M and A in 2025?
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Yes. Well, I think we all have a little more optimism for lots of reasons, Chris here at least in the next year or 2 that there'll be more opportunities. I think the window is a little more open. Certainly seems like getting deals approved will be a little bit quicker than maybe in the past, a little bit more certainty. We're having more active discussions with kind of banks that we think fit our profile and kind of things we're looking for.
Generally banks in that $1,000,000,000 to $5,000,000,000 space in or adjacent to our footprint. So we are having active discussions, but there's really I can't provide any more color than that in terms of the likelihood of something happening.
Terry McEvoy, Analyst, Stephens Inc.: All right. Perfect. Thank you. Yes.
Rob, Conference Call Operator: Your next question comes from the line of Jon Arfstrom from RBC Capital Markets. Your line is open.
Christopher McGratty, Analyst, KBW: Thanks. Good morning.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Hey, Jon.
Christopher McGratty, Analyst, KBW: Can you guys talk a little bit about your overall non interest income growth expectations? I mean, you had a good great year in 2024 across categories. Just curious what you think might be possible for 2025 on fee income?
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Yes. John, I'll start. Jamie may have something to say here too. I mean, generally, it's if you exclude leasing business income for a moment, I think it's more gradual kind of steady growth, more of the traditional service charge categories. Wealth continues to do well.
I think they'll continue to grow at a pace that's been similar over the last couple of years. Our swaps has probably been one of the areas, it's been a little down. So with more activity, I think that has an opportunity to improve. But I think outside of leasing business income, those numbers feel pretty much like a steady kind of a steady growth kind of trend line. Leasing business income of course can move up a little bit more just based on the amount of operating leases that we add to the balance sheet.
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Yes. John, the only thing that I would add, I mean just on the foreign exchange side, and then in that Capital Markets Group, we just get there's some volatility to that revenue from quarter to quarter. I mean, we might but we average roughly in that $15,000,000 $15,000,000 $16,000,000 range where we get some chunky quarters where it's $17,000,000 and whatnot. So but we feel like that business is when you look at it over a 3 or 4 quarter window, it's just steadily growing 10% or 15% a year.
Christopher McGratty, Analyst, KBW: Okay, good. Thank you. And then you guys always you provide a nice slide on agile. It's more than doubled. Can you just talk a little bit about that business and how long do you think the runway is in terms of your balance sheet capacity for that?
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Yes. John, when we bought that, I think we only brought over around a little over $100,000,000 in receivables $110,000,000 in receivables at the time. So it we knew the production numbers were going to drive a lot of growth, especially in the 1st year. But again, even this year, I think we're expecting that that's probably going to grow 25% year over year production probably being a little healthier than last year's production because we got them we get first we have them for the whole year, last year we had them for 10 months. So production is going to go up a little bit more to I can't remember exactly the numbers at this point, Luke.
2.50 ish for originations and that's kind of where we think the balances are going to end over the end of the year.
Christopher McGratty, Analyst, KBW: Okay. Good.
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Yes. John, real quick on that. The one thing that on the Agile side, I mean, there is some seasonality to their business as well. That's why you saw the balances decline in the Q4, a little bit. It's not anything that we purposefully did or anything like that or it was essential.
That's just the seasonality of their business. And so we get a run up in originations really in the middle of the year in Q2. And then it kind of bleeds off a little bit, but they are heavy in the Q2. So that's why you'll see that more here in 2025 as the business has stabilized a little bit and we're not ramping up the balances from what we bought.
Christopher McGratty, Analyst, KBW: Okay. That makes sense. And then Bill one for you just on the classifieds. If you take out the FX issue, it's a pretty big step down in classifieds. And I'm just curious how you're feeling about that.
And do you think we may have hit a peak? Or is there anything new that you're seeing or concerning?
Bill Harrod, Chief Credit Officer, First Financial Bancorp: Yes. Great question, John. I appreciate it. The Q4, we finalized resolution on a number of credits that were sitting in the bucket, classified buckets for a while. And outside of the trade, as you mentioned, we did not have significant inflows.
And as we take a step back step up and look at our criticized, we did have some small increases there. But I feel much better about the trajectory based on what we our intake into the substandard and classified. So yes, I'm positive.
Christopher McGratty, Analyst, KBW: Okay. Okay, good. All right. Thanks guys. I appreciate it.
Jamie Anderson, Chief Financial Officer, First Financial Bancorp: Thanks, Sean.
Rob, Conference Call Operator: And there are no further questions at this time. I will now turn the call back over to Archie Brown for closing remarks.
Archie Brown, President and Chief Executive Officer, First Financial Bancorp: Thank you, Rob. I want to thank everybody for joining us today and hearing about our quarter and our year. We're excited about 2025 and we look forward to talking with you again in a few months. Have a good day.
Rob, Conference Call Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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