First Financial Bancorp (FFBC) 2010 Q3 法說會逐字稿

Good day and welcome to the First Financial Bancorp Third Quarter 2010 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. (OPERATOR INSTRUCTIONS.)

Please note this event is being recorded.

I would now like to turn the conference over to Ken Lovik, Vice President of Investor Relations and Corporate Development. Please go ahead, sir.

Thank you, Mike. Good morning, everyone, and thank you for joining us on today's conference call to discuss First Financial Bancorp's third quarter 2010 financial results.

Claude Davis, our President and Chief Executive Officer, is unable to join us this morning as he is fulfilling his civic duty by serving on a federal jury. Reading Claude's prepared remarks will be Doug Lefferson, Executive Vice President and Chief Operating Officer. Joining Doug today to discuss our operating and financial results are Frank Hall, Executive Vice President and Chief Financial Officer; and Richard Barbercheck, Executive Vice President and Chief Credit Officer.

Before we get started, I would like to mention that both the press release we issued yesterday announcing our financial results for the quarter and the accompanying supplemental presentation are available on our website at www.bankatfirst.com under the Investor Relations section.

Please refer to the forward-looking statement disclosure contained in the third-quarter 2010 earnings release as well as our SEC filings for a full discussion of the company's risk factors. The information we provide today is accurate as of September 30, 2010, and we will not be updating any forward-looking statements to reflect facts or circumstances after this call.

I will now turn the call over to Doug Lefferson. Doug?

Thank you, Ken, and thank you to those joining the call today.

We are pleased to announce another solid quarter of performance, reporting net income of $15.6 million, or $0.27 per diluted common share, which included a $0.90 per-share charge related to the announced prepayment of $232 million of Federal Home Loan Bank advances. We're extremely proud of the fact that this represents our 80th consecutive quarter of profitability, representing a track record of stability and prudent operations through a variety of economic cycles and conditions.

Our return on average assets for the quarter of 0.96% and return on average shareholders' equity of 9.06% reflect the strong efforts of our people as we continue to work through an uncertain economy.

Before Frank provides further detail on our financial performance, I would like to discuss some key event during the quarter that contributed to our results, as well as highlight some initiatives we have underway that we believe leave us well-positioned to take advantage of strategic opportunities and continue our high level of performance.

As we discussed last quarter, our liquidity position continued to build as loan paydowns outpaced new originations, resulting in a decline of our net interest margin. During the third quarter, this activity repeated itself, as commercial banking clients remained hesitant to pursue new initiatives due to the uncertain economic environment.

Therefore, we examined various alternatives and put some of our liquidity to use during the quarter through the repayment of over $230 million of Federal Home Loan Bank advances and purchase of $154 million of agency mortgage-backed securities.

Our strong liquidity position also allowed for the continued and planned run-off of non-strategic deposits acquired as part of the Irwin transaction, most of which were higher-cost time and broker deposits. We remain diligent in managing the pricing for all deposit products and identifying ways to utilize our liquidity in a prudent and profitable manner.

Continuing to build our core deposit franchise remains a high strategic priority. Personal and business transaction and savings accounts increased over $60 million during the quarter. However, this growth was offset by net withdrawals of $97 million in public fund transaction accounts, reflecting our determination to maintain disciplined pricing and transaction structure. While we are always sensitive to the client relationship aspect of our decisions, we will not chase business that erodes our internal profitability targets.

As I mentioned earlier, loan repayments continue to exceed new loan generation as demand remains muted within our strategic markets. Despite the slow recovery in our markets and the economic uncertainty affecting the business climate, we continue to actively pursue opportunities in both our commercial and consumer business lines. New originations and renewals for the quarter totaled approximately $223 million, which was a slight increase over the previous quarter.

Building on one of the themes we emphasized last quarter, our balance sheet risk remains fairly low, despite our strong earnings performance. On the asset side, approximately 37% of our loan portfolio consists of loans that feature loss share coverage from the FDIC, and our asset quality ratios remain at favorable levels relative to many of our peers. Additionally, 100% risk-weighted assets make up less than 50% of our total balance sheet.

With our actions during the quarter related to the liability side of the balance sheet, including the prepayment of the Federal Home Loan Bank advances and continued run-off of time and broker deposits, we have further lowered the risk profile of the company by decreasing our level of wholesale funding, resulting in an even stronger core-funded balance sheet.

Our capital levels remain strong and continue to grow as a result of our earnings power. Tier 1 capital consists almost entirely of common equity, which is obviously the highest form of capital available. As a result, we are well-positioned to take advantage of strategic opportunities within or adjacent to our strategic markets that meet our criteria, including traditional acquisitions, FDIC-assisted transactions and branch deals.

We are committed to deploying our capital in a manner that most benefits long-term shareholder value. However, given the uncertainty surrounding potential changes to the regulatory capital guidelines and regulatory reform in general, we expect that our capital ratios will continue to grow until the regulators provide more guidance on what they expect well-capitalized minimum ratios to be and any prudent cushion beyond those.

From a business line perspective, there are a few initiatives we have underway that I'd like to discuss as we feel that will be solid contributors to revenue growth in future periods. First of all, we've been building up our efforts in the residential mortgage business throughout the year. When we were rationalizing our businesses as part of the strategic reorganization back in 2005, mortgage was one of the areas we scaled back for several reasons. However, as underwriting standards in the mortgage industry have returned to prudent levels and real estate values have come down, we have been successful in selectively hiring seasoned and proven originators and continue to recruit additional talent in our metro markets. Additionally, we have also built a new back-office team to support origination efforts and ensure that we have the appropriate compliance and risk controls in place.

Our efforts are beginning to bear fruit as our pipeline has more than tripled in the past 6 months, and we expect further production in revenue growth as our originators expand their sales efforts.

We have also implemented expansion plans in our small business banking group. Historically, we've been committed to small business and have a strong track record in SBA lending. This initiative will further that commitment as we have selected 45 banking centers to also act as small business centers focused on serving this segment of our client base. We have assigned experienced business bankers and invested significantly in training additional associates to serve small business clients in these locations, with a substantial sales effort planned for a launch late in the fourth quarter. Our SBA pipeline has more than tripled during the past two quarters and, like our efforts in the mortgage area, we expect this business line to provide additional revenue growth in future periods.

And finally, our franchise finance business, which we acquired as part of the Irwin transaction, continues to be a profitable business line for us. Our seasoned team continues to prudently execute their business model of lending to proven concepts, and we expect them to be a strong contributor to loan growth in future periods.

An added benefit of this business line is the existence of a liquid secondary market for this particular type of asset. As we mentioned in the earnings release, we sold approximately $23 million of franchise loans at a 9% premium during the quarter, primarily to mitigate credit and geographic concentration risk in this portfolio. The existence of this secondary market affords us the ability to continue managing these risks in future periods should we determine it is a prudent course of action.

As in previous quarters, credit quality remains challenging. We're beginning to see some isolated areas of improvement. However, overall weakness still exists in our strategic markets, affecting both commercial and consumer borrowing. As this weakness is driven by continued high unemployment and commercial real estate stress, we do not expect wholesale improvement in our markets until we see improvement in these economic indicators.

With regard to Reg E, we have been pleased with the number of both existing customers and new accounts that have chosen to opt in. Like most other institutions, we expect revenues to be reduced as a result of the regulatory changes. However, we have implemented certain pricing changes that will partially offset this decline, and we have other product structures under consideration that would further lessen the shortfall. We're happy to report that customer attrition to date has been negligible.

Before I conclude my comments, I would like to briefly address the residential mortgage foreclosure concern. This is more of an issue for the larger banks that are attempting to process an enormous number of foreclosures. The recent legal problems surrounding this matter are not an issue for us due to the small number of foreclosure we have to deal with, which is generally one or two per week. This low volume, combined with our internal procedures regarding the foreclosure process, have resulted in neither a need to slow the pace of foreclosures nor institute any sort of temporary moratorium on foreclosures.

I will now turn the call over to Frank for further discussion on our financial performance.

Thank you, Doug.

First I will provide a few comments on some of the operating results of the quarter and the major components of performance and then I will discuss the supplemental information that was furnished separately and is available both on our website, bankatfirst.com, in the Investor Relations section, and also in an 8-K filed this morning. This supplement is crucial to establishing a clear understanding of our reported results and in understanding the concepts that have a material effect on our current and future performance.

Third quarter 2010 GAAP earnings per diluted share was $0.27. The most significant item impacting our earnings for the quarter was the previously-mentioned FHLB prepayment penalty of approximately $0.09 per share.

As we further discuss our results, we are sensitive to the fact that when reading our earnings release, it is easy to get lost in the details of the accounting. We have tried to simplify complex concepts as best we can, and I would simply summarize our underlying and strategic performance overall for the quarter as consistent with our expectations and without surprise.

Our margin, excluding the impact of non-recurring and acquisition-specific items, is down slightly, as organic loan growth opportunities are few and suitable investment securities are sparse. Fortunately, this is more than offset by the enhanced yield attributable to the improved outlook on acquired loans, which I will discuss later.

Non-interest income is relatively flat on an adjusted basis, even after excluding the franchise loan and the insurance agency gains on sales. Provision expense on our legacy loan portfolio is relatively flat and approximates our net charge-offs, which is consistent with our overall credit view. And our non-interest expense is also relatively flat, adjusting for acquisition-related items. I would also note that the pace of decline for the acquisition-related items is on schedule with our earlier estimates.

As to the previously-mentioned accounting complexities, it is important to under the financial statement impact of our acquisitions and the related accounting treatment for such items, and I will highlight the most significant of those.

This quarter marks the one-year reporting anniversary of both our Peoples Community Bank and Irwin Union acquisitions. While the operational integration work has been complete for some time, under the accounting guidelines, the final valuation is permitted to occur within a one-year timeframe and has concluded this quarter. What this simply means is that if we discover new information related to any of the assumption used in the initial valuation of assets and liabilities, that new information can be incorporated in a modified valuation back to the original third quarter 2009 reporting period.

Table 1 in our earnings release summarizes the items that have been revalued and the corresponding impact to the recorded earnings for the three months ended September 30, 2009, and Table 2 shows the cumulative impact to our tangible book value per share. All periods subsequent to third quarter 2009 have been adjusted accordingly to reflect these valuation changes.

The valuation adjustment of approximately $24 million related to the indemnification asset is due solely to the present value impact of the change in timing of expected cash flows, not the total amount of expected cash flows. We continue to submit claims and the FDIC continues to pay claims on a timely basis.

The other asset valuation of approximately $15.6 million represents final valuations on acquired bank subsidiaries. These subsidiaries have no ongoing strategic value to the company and are winding down operations. Accordingly, we have valued these subsidiaries at zero.

Table 2 illustrates the cumulative adjustment over the past year, of which there are two key points of change. First, the approximate $5-million upward adjustment to good will from our three-branch purchase last year and the impact of the previously-discussed Day 1 revaluations, totaling a $0.62 per share downward adjustment to tangible book value per share on the September 30, 2009 balance sheet. These adjustments represent the final adjustments to our Day 1 values.

To further add to the accounting story in the quarter, the SEC has provided some recent industry commentary on how to account for loan impairments and the related FDIC indemnification reimbursements. We have historically presented this on a net basis, with the difference between expected loss and FDIC indemnification flowing through to non-interest expense. But the recent SEC comments indicate presentation on a gross basis is more appropriate. This simply means that our provision expense on covered loans will be higher to reflect the full amount of impairment, and the related FDIC reimbursements will be accounted for in the non-interest income line item as FDIC Loss Sharing Income. There will no longer be a non-interest expense impact.

This change in presentation will obviously impact some key industry metrics, such as efficiency ratio and non-interest income to total revenue, but will have no impact on our net earnings. This additional gross-up of non-interest income positively impacts our efficiency ratio in the third quarter by approximately 10% and is approximately 16% of our third-quarter revenue. Previous quarters have been adjusted to reflect the gross-up, and the new revenue line item is labeled in our Income Statement separately, again as FDIC Loss Sharing Income.

The final point of note in the accounting area is the periodic revaluation of certain acquired assets, as noted on Slide 3 of the earnings release supplement and on Table 4 of the earnings release. Overall, our credit expectations have improved for $996 million of acquired loans, or 69% of the revalued portfolio. This improvement is recognized prospectively as an upward yield adjustment and our improved portfolio yield moves from 9.37% to 10.84%, as noted on Slide 3 of the supplement. This increase was reflected in two months of the third quarter, and the prospective yield enhancement will hold until the next periodic revaluation.

The impairment was approximately $16.1 million and was accounted for with a provision expense for the same amount. As previously discussed, the related FDIC indemnification reimbursement was recorded as FDIC Loss Share Income in the non-interest income section of the Income Statement. The yield on the portfolio with impairment will have no change in yields due to revaluation. Portfolio yields for both the improved and impaired portfolios, however, will remain subject to change as the mix of loans in each portfolio changes organically over time.

As previously noted, aside from the accounting dynamics of our quarterly earnings, the quarter overall was relatively calm with few notable items. Our performance is consistent with our expectations, and we remain committed to executing our business strategy.

This concludes the prepared comments for the call. I will now open up the call for questions. Mike?

Thank you, sir. We will now begin the question-and-answer session. (OPERATOR INSTRUCTIONS.) At this time, we will pause momentarily to assemble our roster. The first question we have comes from Scott Siefers of Sandler O'Neill. Please go ahead.

Good morning, guys.

Good morning, Scott.

I guess the first question is on the margin. I hope you can just sort of dissect it a little and give us a bit more color on where it's likely to head. So you've got a little more follow-through impact from the FHLB prepayment just due to timing in the third quarter. So I guess first part is how much more improvement should we expect there? And then maybe just some additional thoughts on the follow-through impact. You gave the, I guess, the expected yields in there from the purchase accounting noise you discussed in the press release, so maybe if you can address both of those and then just, to put it simply, where do you think the reported FTE margin is going?

Sure. And -- Scott, this is Frank. As I think you know, we don't give margin guidance, but I think you've hit on the high points as far as what the key drivers are going to be going forward. We've tried to provide more detail as it relates to the revaluation of the acquired assets. On Slide 3 of the supplement, we break it down by pools of loans that had improvement and the change in yield on the FDIC indemnification assets. Those -- we've disclosed on that slide what the new yields will be going forward. The table in the earnings release shows what the effective yield was during the third quarter. And rough math on the items on Slide 3 of the supplement are roughly a 10-basis-point improvement on margin going forward. As I said, the organic behavior of the legacy portfolio -- there's still some margin stress there as loan demand is still soft and investment security yields are very low. So overall, for the quarter, I would say it was relatively flat when you look at revaluations and the organic mix shift there, but we've tried to, again, add some color to the key drivers and the major components that will influence margin.

Okay. And then -- I apologize if I just missed this -- but on the FHLB prepayment, did you say how many basis points that helped the margin in the third quarter?

In the third quarter, because of the timing -- we didn't disclose it, but it was roughly 4 basis points.

Okay. So most of the impact then was -- would be felt in the fourth quarter, just from that specific dynamic?

That's correct.

Okay. Alright. And then just turning to the accounting changes that (inaudible). It sounds like there's really going to be no change on the expense line going forward but will have sort of the noise in the provision and the fee income based -- specifically, the FDIC loss sharing income. So can you speak just generally to the amount of volatility we should expect in there? And I guess what I'm getting at is you look at the last three quarters -- provisions kind of now fluctuated, on an adjusted basis, somewhere between $21 million and $27 million. Is kind of a mid-20's number a good enough run rate going forward? And then, similarly, at least for the last couple of quarters, the FDIC loss sharing income has been in this $15 million to $20 million range, but going back to the first quarter, significantly less. What kind of a range should we expect that to come in as we look forward?

Sure. I'll address that in two components. The first -- provision expense on our legacy portfolio. As you know, that's based on the output of our allowance model. But generally speaking, the provision expense relative to the charge-offs will coincide with our long-term view of the risk in the portfolio. And again, depending on which loans are charging off and whether or not there are specific reserves on those particular loans will influence what the ongoing provision expense is. On the covered portfolio, the two contributors to provision expense on the covered portfolio -- the first will be any impairments that we have related to loan valuations going forward. So for this quarter, there were $16.1 million worth of valuation impairments. The other component that will flow into that are when we have charge-offs on covered loans, to the degree that the charge-off exceeds the valuation mark -- so historically, what you would have seen is that charge-off in excess of the valuation mark would be reflected in non-interest expense. It's now going to be reflected in provision expense, and the -- and again, on the impairment, you're going to see a provision expense for that impairment amount. And then you will see an estimate for the FDIC indemnification portion of both of those items flow through in the non-interest income item that we discussed.

Yes. Okay. Alright. Thank you.

The next question we have comes from Kevin [Slim] with Harrier Hawk Management.

Thanks a lot for taking my question. My question was somewhat similar on the margin. I'm just trying to understand the FHLB prepayment and the impact it had on the portfolio. You mentioned 4 basis points, which is a lot different than kind of what was in the initial release. I think you might have mentioned 28 basis points at the time. Can you help us understand, I guess, how to think about that going forward and is there any more detail you could give around that? Thanks.

Sure. The previously-disclosed number was for a full quarter. 4 basis points was the impact in the current quarter just due to the timing.

I see. Okay. Thank you. That's all I have. The other question was answered. Thanks.

(OPERATOR INSTRUCTIONS.) The next question we have comes from Justin Maurer of Lord Abbett.

Good morning, guys.

Good morning, Justin.

Frank, on the -- just on the page 3 -- so in terms of the buckets of loans, again -- and sorry if I missed it -- the loans with improvement versus loans with impairment --

Right.

Are those loans run-off versus assumed to be in the portfolio or is not related to that?

Is your question specific to the loans that we intentionally plan off to run off those in the western markets?

Yes.

This encompasses all loans.

Okay.

All -- excuse me. All loans that are valued under 033 or under ASC Topic 310-30.

So what's the distinction, I guess -- and again, sorry if I missed it -- in terms of those two buckets -- the loans with improvement versus with impairment, or is one and the same -- it's just how they're accounted for?

Right. It's how they're accounted for. So if you look at the total of those two buckets, that represents all of the loans that we've acquired and accounted for under this accounting pronouncement. And just to give you the split overall, 90% of the loans that we acquired are accounted for under this guidance.

Okay.

So the sum of loans with improvement and loans with impairment represent 90% of all loans that were acquired.

Yes. But again, how are you defining it? How are those being defined?

Sure. We group them in pools and each pool is valued on a periodic basis, and we've aggregated them here -- just the pools with improvement and the pools with impairment.

Okay.

So there is no -- if you're looking to draw a line around it and say, "Loans with impairment are all out west," that would not be a fair way to summarize these. They really are specific to the individual loans within each pool and what the expectations around future cash flows are. So loan type -- commercial real estate or C&I -- those are ways that they are subcategorized within pools --

Okay.

But overall, we just distinguish between improvement and impairment here.

And is that, though -- is that a static measurement, meaning are we going to see this each quarter that loans are moving from one bucket to another or this is just kind of a snapshot and this is how you categorize them going forward?

Right. So what will happen is periodically we will do the valuation and, yes, we will show what the improvements and impairments are. One quick item to note on that, though, is if we look at the pools or the loans that are part of the loans with impairment category, if there is improvement in those categories, first we'll recapture the impairment --

Yes.

And then if there's improvement past that, then it will become a yield enhancement.

Okay.

But yes, we will -- we'll provide clarity around the valuation and what that means on a go-forward basis.

Got it. Okay. And then just on the NIM, so I'm clear as well, the 10 bps on the go-forward deal enhancement, if you will, plus the 4 bps on FLHB -- that's assuming -- (inaudible) like you said, you don't give margin guidance, but if it's at a minimum flat, we should be up at least 14 bps, all things equal. Right?

We've highlighted the key influences of the margin, yes. I want to steer clear of giving guidance there.

Thank you.

The next question we have comes from John Barber of KBW.

Morning, everyone.

Good morning.

A few weeks back, you put out a press release that you're building a new regional hub in Columbus, Indiana. I was just wondering if you could talk about how you fit in the market and why you think it's attractive.

Sure. Columbus, Indiana -- and Doug can add some more color to this as well -- but Columbus, Indiana was the headquarters of Irwin Union Bank, which we acquired last year. So our market penetration there is significant and it is reasonably close to Indianapolis. But no, it's a market that we have a significant presence in and a long-term commitment to.

No. That's exactly right, Frank. This is Doug. It is a market that we know quite well, that we already have a significant presence. It's an important market to us. We have some hubs in some other regions like Dayton, Ohio and areas like that. So it really is, again, an established market. We're really just trying to serve clients and we think that there is the opportunity to grow there. Our announcement last week was kind of a partnership with Cummins Incorporated. They're bringing about 350 new high-paying jobs to the region. So it's an area that has -- Columbus, Indiana is kind of a unique community with some unique opportunities, so we're excited about -- to continue our business there.

Okay. Thank you. And Doug, you mentioned that you're not willing to chase new business. In your opinion, do you think competitors are kind of acting irrationally? Are there -- is it pricing? Is it structure that they're compromising? And just how should -- what are you seeing?

Yes, I think that comment was really around some public fund pricing. And it really just reflects -- I think it's more a general comment about how we've operated historically and we'll continue to operate, which is disciplined pricing. We've seen different periods over certainly my 24-year career of individual players being aggressive or times in the market when people are aggressive. There is some of that going on now, but that's typical of the market. And we're just really going to stick with our disciplined practices which have served us well.

Okay. Thanks. And last question. You talked about some strategic initiatives, but how are you thinking about M&A -- FDIC-assisted -- and also unassisted deals?

Sure. This is Frank. I would tell you that we are well-positioned to take advantage of any opportunities that come along. We have fully integrated all of our acquisitions. As we've said previously, we've built a very capable and scalable infrastructure to deal with acquisitions, and we're prepared -- be they assisted or unassisted.

Great. Thank you.

The next question we have comes from Bryce Rowe of Robert W. Baird.

Thanks. Good morning.

Good morning.

Frank, can you -- I guess just to follow up on the conversation there with Justin, can you distinguish between the types of loans in which you're seeing the -- the covered loans in which you're seeing the improvement and types of loans in which you're seeing the impairment? Can -- is it loan type, etc.? Is there a way to do that?

We have not disclosed that, and I would hesitate to make any general statements around them. Keep in mind that when we created these pools, we had Day 1 valuation assumptions built into them. So as far as categories of loans and the differences in valuation estimates between categories -- so be it consumer or commercial or commercial real estate -- much of those differences were already contemplated in the Day 1 valuation. What this represents is a change in those estimated cash flows over time. So I'd hate to try to draw any conclusions or lead you down the path to think that any comparison or meaningful information can be derived. This is really just a change from our initial estimates, is what this reflects. So we may have been either too conservative or too aggressive on one pool of commercial real estate and not another. So again, I would hesitate to suggest that there's any meaningful information to be derived from lumping them together in any particular category.

Okay. That's fair. And then the second question. On the, I guess the $770 million of acquired non-strategic loans, what's the duration or kind of the expected duration there?

Yes. It's really hard to say at this point, and I say that for two reasons. One, we continue to entertain any sales for those western markets. So any of the partners that we've worked with in the western states that come back to us and want to buy more loans from us are certainly welcome to do so, so that would shorten the duration. We may have some other strategies along the way that, again, may shorten the duration there as well. And the prepayment activity at this point has been difficult to estimate and project into the portfolio. So I would hate to give a number for those overall, but there's some color on that, if that's helpful.

Yes. Okay. I appreciate it. Thanks.

The next question we have comes from Joe Stieven of Stieven Capital.

Good morning, Frank.

Good morning.

Frank, we actually had a little bit of a power outage in a (inaudible) amount of St. Louis, so I missed part of the call. But let me sort of ask a question this way. Obviously, there are a lot of moving parts and so I did not hear your color commentary, but from reading through the release, it appears that operating earnings were up in the neighborhood -- I'm not asking you for a prediction -- but sort of in the neighborhood of $0.37 on the quarter, which appear to be easily above consensus. In your color commentary, did you guys sort of, let's say, talk around that issue -- what operating earnings were. That's number one. And then number two, NPAs were flat and we've actually seen a number of the Indiana banks post some stabilizing good numbers. Do you guys sort of feel that, on a macro basis, the -- that things in general in all the -- in most of your markets have stabilized to a pretty fair degree? So thanks, Frank. It looks like a good quarter, but I'll wait for your response.

Sure. Thanks, Joe. Certainly on the operating earnings, your assessment is correct in that we feel that we delivered strong operating earnings, and again, if the listeners take the time to dig through some of the accounting complexities here, I think that's what you'll find, is a strong quarter and we're very pleased with the outcome. On the NPAs, I would describe them as we have in quarters past, which is cautious optimism and potential volatility, but all of that is related to length of the recession and individual borrowers there. But we're certainly encouraged by the results that we've had and so we'll -- we haven't changed our overall credit outlook.

And Frank, one final thing. On the margin, the Federal Home Loan Bank advance payoffs in the quarter you said benefited the margin 4 bps, but that was just for a small number of days. You said the ultimate impact, on a quarterly run basis, if I'm not mistaken, you said was 20 -- it was 20-ish or something?

Right. 24.

24 bps. Okay. Yes, that's sort of confusing. I -- that's great. Thank you very much.

Thank you, Joe.

The next question we have is a follow-up from Scott Siefers with Sandler O'Neill.

Hi, guys. I just wanted to ask one more follow-up on the margin. So just trying to get a little sense for timing. So the FHLB advances -- those were prepaid on August 30. Have you -- or could you tell us roughly when in the quarter you purchased the roughly $155 million of mortgage-backeds?

Sure. Bear with me for just a moment. Most of those were in -- call it late July, early August.

Okay. Perfect. Thank you.

And it appears that we have no further questions at this time. We will conclude our question-and-answer. At this time, I would like to turn the conference back over to Frank Hall, Executive Vice President and Chief Financial Officer. Mr. Hall?

Thank you, Mike, and thanks to everyone for participating in our call this morning and thank you for your continued interest in First Financial Bancorp.

And we thank you, gentlemen, for your time. The conference has now concluded. We thank you all for attending today's presentation. At this time, you may disconnect your lines.