Good morning and welcome to the First Financial Bancorp Third Quarter 2013 Earnings Conference Call. All participants will be 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. Please go ahead.

Thank you, Jessica. Good morning everyone and thank you for joining us on today's conference call to discuss First Financial Bancorp’s third quarter 2013 financial results. Discussing our operating and financial results today will be Claude Davis, President and Chief Executive Officer, and Tony Stollings, Executive Vice President and Chief Financial 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 2013 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 September 30, 2013, 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 Claude Davis.

Thanks, Ken and thanks to those joining the call today. We are pleased to report net income of $14.9 million or $0.26 per diluted share for the third quarter. Return on assets was 96 basis points and return on tangible common equity was 10% for the quarter. Our results for the quarter were impacted by several non-operating expense items that in total reduced pre-tax earnings by approximately 2.4 million or $0.02 per share. Excluding these items return on assets was 1.05% and return on tangible common equity was 11.02%. Loan growth continued to be solid as we achieved our sixth consecutive quarter of growth in our uncovered portfolio. Average balances were up $102.7 million or 12.4% on an annualized basis compared to the prior quarter, reflecting our strong growth throughout the year. We continue to demonstrate our ability to compete well against both the large regional and the smaller community banks as our diversified product set, coupled with our relationship-based approach provides multiple avenues for loan growth. Our C&I, owner occupied CRE and franchise finance groups had particularly strong quarters and our specialty finance and residential mortgage teams made solid contributions as well. Ending balances were up $48.8 million or 5.7% on an annualized basis as we experienced a higher level of payouts compared to the prior two quarters. Additionally we had anticipated some late third quarter production that didn't ultimately fund until October. When combined with our strong pipeline of new business at the end of the quarter, which was up over 12% compared to the end of the second quarter we feel very optimistic on our prospects heading into the year-end. Total deposit balances for the quarter were down slightly, less than 1% compared to the linked-quarter, driven in part by declines in CD balances due to continued…

Thank you, Claude. Our third-quarter adjusted pretax pre-provision earnings of $26.4 million, which excludes certain items related to covered loan activity as well as other significant items, was essentially unchanged quarter-over-quarter. As shown on slides three and four of the supplement this was 1.69% of average assets on an annualized basis. Total interest income declined $2.8 million or 4.5% compared to the linked quarter due to lower interest income earned on loans, a modest decline in interest income earned on investment securities and higher amortization of the indemnification assets or covered loans. The decline in interest income on loans was primarily the result of an average balance decline in covered loans of approximately $81 million or 12.3% and a 37 basis point decline in the yields earned on that portfolio compared to the linked quarter. Additionally the average balance of the FDIC indemnification assets declined approximately $23 million or 21.5% during the quarter due to increased asset resolution activity, which contributed to a 455 basis point increase in the negative yield earned on the indemnification assets and further impacting net interest income and margin. The indemnification asset balance at September 30, 2013 is $78.1 million or 15% of covered loans down from a balance of a $130.5 million or 16% of covered loans one year ago. The level of asset resolutions experienced during the quarter while high was not totally unexpected. Many of these resolutions were the result of several years of workout and asset management efforts by our loss share team. And while it is sometimes difficult to predict the timing of these resolution efforts we expect them to remain elevated given the relatively short timeframe remaining on the commercial loss share agreements. The impact from covered loan activity was partially offset by another strong quarter of loan production,…

Thanks Tony, and Jessica we are now happy to open the call for questions.

(Operator Instructions). And the first question comes from Scott Siefers with Sandler O'Neill. Scott Siefers - Sandler O'Neill & Partners LP: Good morning guys.

Hi, Scott.

Good morning. Scott Siefers - Sandler O'Neill & Partners LP: Tony, maybe first question for you just on the margin, given the volatility that’s in from the covered portfolio as you weigh sort of all the puts and takes and understanding that the covered pieces is going to continue to stay pressured for a little while. What would be your best guess as to where the [FGE][ph] margin kind of flushes out in coming quarters?

Well, Scott you win the price. We figure this to be the first question. In Q2 we said that we are expecting over the balance of the year a decline of 10 to 15 basis points and we had 11 here in the third quarter. It is almost entirely driven by what we’ve talked about in terms of the resolution strategies and just the shorter time period remaining on the agreement with the FDIC. So it’s really, really hard to say could there be another 11 basis point drop, I don’t know but it is going to drift down. The thing that we do know right now regarding the indemnification assets this is a blended rate. We do a mid quarter evaluation of the portfolio. So what you see here is a blended rate. We do expect the negative yield to grow more negative here in the fourth quarter and beyond. Beyond that it’s really up to resolution, the level of resolution activity and just very hard to say. I know say it’s a long answer to not a very long response and not very good answer for you but it’s just really difficult to predict. Scott Siefers - Sandler O'Neill & Partners LP: No, I understand that, I appreciate the color. I guess if I am taking away the appropriate messages it sounds like on a core basis even though there might be just some typical modest pressure you feel pretty good about things but it’s really just the covered portfolio that is the kind of volatility factor.

It absolutely is and the other components and other drivers of the margin are trending positively. So we feel good about where we’re headed related to loans and deposits and the investment portfolio is forming well. It is really isolated on the covered loan and indemnification asset. Scott Siefers - Sandler O'Neill & Partners LP: Okay I appreciate that color and then maybe just switching gears a little Claude on the expense side, so you’ve got next year will be full run rate of the current efficiency initiatives and you outlined the additional 5 million or so and I guess all of the equal that 5 million would equate to about the amount of growth that you’ve had on a typical year so on a per share basis and expenses going back over longer period of time. So in the aggregate would you think that core expenses could be flat or down next year or will there be additional investment spending that might put some upward pressure on total cost in spite of the plans you guys have announced?

Let me -- Tony's probably got a better handle just in terms of run rate guidance. So, Tony?

Yeah, the way I would think about it Scott is look at the third quarter here we think that we’re at a pretty good level and that should be kind of our base going forward if you annualize that, take the five off you’re probably going to get in the range of where we think we’re going to operate next year. Scott Siefers - Sandler O'Neill & Partners LP: Okay, all right, that sounds great I appreciate it guys.

Thanks, Scott.

The next question comes from Emlen Harmon with Jefferies.

Hey, good morning guys.

Good morning.

Wanted to continue I guess on the kind of on the expenses and the magnitude actually, the expenses you realized from the first plan. I kind of take a look at table two in your press release and back up some of the improvement like non covered OREO, marketing, maybe a couple of $100,000 for like mortgage commissions. It seems like the expenses was down $3 million quarter-over-quarter and I know you guys had about $15 million out of the $17 million in expense in original expense saving plan were done last quarter. So to me it seems like several million upside on that kind of 17 million plan that you laid out, could you give us a little bit of color just about how much better you did than what your original expectations were? I threw a bunch of math at you, that’s why.

I don’t know if I can give you specific numbers but I can tell you that we did over achieve little from what we thought and had a few more strategies that we were able to put in place. Yeah, I don’t if we can quantify that necessarily in the context of $17 million.

Would it be fair to say that the magnitude is in kind of several million dollar range on an annual basis?

We'd have to look at that, I'd have to look at that.

I think what I said earlier around working off the fourth quarter or the third quarter expense base, the adjusted base is really the way to look at it.

Okay. That’s fair. If we could talk about the M&A environment a little bit you guys continue to look -- I would be interested in just kind of hearing your -- kind of hearing your impression of what’s happening like kind of [bid out] [ph] spread that we’ve heard a fair amount about and maybe within that if you could address - we obviously in a few transactions lately where the sellers had been private institutions and so maybe a little bit more willingness to sell, where there is may be more skin in the game, you don’t have a kind of the management versus agency problem, is there I guess have you seen any difference between potential targets and willingness from kind of private sellers versus public?

I don’t know that I would speak to private versus public Emlen but I would tell you I think as we’ve said in past calls like I mentioned in the last quarter call we continue to be out actively kind of meeting with other banks. And I feel like that the [bid out] [ph] spread is narrowing, that the conversations are productive, there's certainly no suggestion as to whether or not we can get a deal done but we do feel good about the opportunities that are out there. We feel good about the conversations that are happening. And it remains one of our key strategies for deployment of what we describe as the excess capital position that we have. And I would just reiterate that point that we really prefer to deploy that 100 million of excess capital as we’ve defined it in my script in growth strategies. So that would be what I would comment. I think some of your points are very appropriate and may make sense but I don’t know that we have enough conversations out there to be able to say it's different public-private.

Got you, all right thanks. And then I guess one last quick one for me, just on the pace of one-offs, or kind of the covered asset book, obviously that accelerate some I mean is the decline we saw this quarter kind of what we should expect going out the next several quarters here?

This was a record quarter if you will in terms of activity. Honestly I’ll be surprised if it stayed at this kind of level, certainly higher than our trends up for this quarter but probably not at the level that we saw this quarter.

Okay, great. Thanks for taking the questions.

The next question comes from Taylor Brodarick with Guggenheim Securities

Great, thank you. I just had a question about the franchise finance lending you cited it in the release as source of strength. Kind of where, what type of growth do you experience and also have you added on new customers or just organic growth at your existing? Thank you.

Sure. Yeah in the franchise finance space just to remind everyone we primarily finance quick service restaurants clients and predominantly among 15 to 20 times up and it’s continued to be a space that we view as strategic for the company that we want to grow. You’ve seen some payoffs in that space just because there is a lot of acquisition activity going on among franchisees but our new origination has been both from kind of existing clients and may be there perhaps acquiring new franchises but also with new clients as we continue to have a pretty active business development effort which identifies franchises. We are not doing business within our target comp that our sales people continue to actively call on. So it’s a bit of both.

Great. Thank you.

The next question comes from Jon Arfstrom with RBC Capital Markets.

Hi, guys this is Andy Hedberg in for Jon.

Hi, Andy.

Just a quick one on loan growth. You talked about some of the deals within the 4Q just curious if the pace of growth accelerated throughout the quarter and then in terms of spreads are they holding in there fairly well relative to historical quarters?

I don’t know that the pace accelerated during the quarter. I think we, as I mentioned what we saw late in the fourth quarter we expect that some deals, larger deals are going to close towards the end of the third quarter, that’s towards the end of October which is not unusual. But as we’ve shown over the last few quarters we continue to have pretty solid new originations and pretty solid loan growth in the uncovered book. We expect to have to continue what can happen and we saw a little bit of it as I mentioned as well, that we had some pay off, not because of anything negative just normal business activity, either a project gets sold or something occurs. So with our pipeline of 12% with some deals slipping to the fourth quarter we feel good about the fourth quarter production. The one I would add I would put to that is, one of the things we are seeing in the commercial real estate space is that as values have improved and you are seeing stabilized projects being sold or going to market because of the time for those investors to monetize some of those projects that may be they have not been able to in the last few years. So it seems few payoffs related to that but in terms of new originations it's just been a solid quarter and that continues into the fourth quarter.

Okay that’s helpful. And then one in terms of capital, you talked about the buyback coming back in the equation next quarter. But just curious of where your excess capital fits today , I know this is probably more of a permanent change but is there a possibility that you get more aggressive on the dividend payoffs?

You know our Board looks at it every quarter and as one of those will continue to evaluate that we are very sensitive and I think we’ve shown over time, that we try to be shareholder friendly and what we think is the right approach to capital management. Today where we sit is with the plan around our $0.15 per share a quarter dividend plus the buyback program that will return 60% to 80% of current earnings. And so with that program as it is if we don’t see balance sheet growth than our excess capital position will just build beyond the $100 million plus that it is today. So we are very focused on deploying that capital. As I mentioned we prefer to do it through M&A and through organic growth because we think that’s a better return to shareholders. If some point in the future and I can’t define what that future point is, if we don’t see the opportunity to deploy it that’s where I mentioned we’ll look at additional capital management strategies. But I think the important thing for investors to understand is that we think we have real leverage opportunity with our capital base that exceeds many of our peers. And we are very focused on that and we’ll be very transparent about how we intend to deploy it and there is a whole, as I mentioned a whole range of options to do that but with growth clearly being our first choice.

Okay, great thanks guys that's all I had.

The next question comes from Christopher McGratty with KBW.

Good morning, it's John Barber filling in for Chris.

Good morning. John Barber - Keefe Bruyette & Woods Inc. : Just related to the Andy loan growth question. what would be the loan growth on non-covered portfolio have been in the third quarter if there is few closings hadn't slipped into October?

You know I am not -- I don’t have those numbers right in front of me. It was a few larger deals so I don’t have and I would hate to hazard a guess but I would focus more on the pipeline as 12% up over 2Q as the best kind of future indicator. John Barber - Keefe Bruyette & Woods Inc.: Okay that’s fair. And then just on the incremental $5 million cost saves that you’ve identified and you said was over, cross multiple line items but are there any particular areas that you’d expect you might get more that the 5 million might be more geared towards?

I don’t think it's going to be heavily weighted one area or another. I mean we are looking at and have been for a while looking at all of our discretionary spending. We are still going through a number of branch rationalizations so it's going to be a mix of things. John Barber - Keefe Bruyette & Woods Inc.: Okay. And then the last one I had, there has been some turnover in the past few months in your management level. Could you just speak to the strength of the bench at First Financial?

You bet. Yeah we feel very good about our team kind of here and to this point we have been able to I think replace almost every position that we changed with internal talent that we immediately were able to put in place and that's a part of our ongoing process we work on with the board at succession planning. So yeah we feel very good about that. At the same time we're always are actively looking for good talent to join the organization new. So yeah we feel very good about where we are at from both the management team as well as a sales staff perspective. John Barber - Keefe Bruyette & Woods Inc. : Great. Thank you.

Operator The next question comes from Bryce Rowe with Robert W. Baird. Bryce W. Rowe - Robert W. Baird & Co. : Thanks. Good morning.

Good morning Bryce. Bryce W. Rowe - Robert W. Baird & Co. : Tony wanted to get a feel for I guess the deposit balances. We have seen declines in the deposits portfolio for many of the last, I don't know, 10 quarters. So kind of sounds like might be at an end to the declining down with the core deposits up as much they are now. So just wanted to get a feel for what to expect there on the deposit side?

Yeah Bryce this is Claude. We have seen a decline and as we mentioned a couple of time part of that has been managed as we thought we were going to be in a protracted kind of low rate environment. We really as we called it have gone a deposit rationalization approach. We were pretty aggressive in terms of our pricing approach, that the reduced deposit cost especially after our acquisitions in '09 and '11 where we had acquired kind of pieces or parts of four entities all of whom had much higher than peer deposit cost and so we needed to go through a process of working through that and changing the mix, especially the CD portfolio. We do feel like we have reached the end of that process. Now that's not to suggest one quarter or another just can be perfect growth from here. But to the point and the comments I mentioned in my script, we aggressively changed our deposit product approach. We really began to incent heavily a lot of our sales staff and look at new strategies there. So we would expect on balance overtime that we'll begin to see deposit growth again and deposit growth is more reflective I think in the market that we are in and in our position in those markets. The part that we look at which has been positive that we continue to see good core account growth, which is more important for us. But we are really focused now on overall deposit growth as a key strategy. So I would expect going from here you should began to see overtime good deposit growth. Bryce W. Rowe - Robert W. Baird & Co. : Okay and that's helpful, Claude and then one just kind of clean up question on the cost saving initiative. Tony is the run rate to use the kind of modeled in this $5 million cost save number is it the $44.4 million from table two of the release?

No, it's probably a little lower than that. You have some ORE losses and some of the loss share. I mean I probably use something in the mid 43s. Bryce W. Rowe - Robert W. Baird & Co. : Okay. Thank you.

(Operator Instructions). The next question comes from John Rodis with FIG Partners.

Good morning guys. Thanks for taking my question.

Good morning John.

Just a quick question back on the covered portfolio. So if you had run off this quarter of about $100 million and I guess based on the slide presentation, I guess you expect to keep about $358 million which implies additional run off of about $160 million. Is that sort of the right way to look at it over the next year or so, the 160 million run off?

Yeah. I will let Tony speak to it. They only have 358, you are right, those are relationships that we want to retain John. But what happens just even with our legacy loan book, you can’t see it because it’s mixed with new originations but that 358 number we will continue to trip down well both through normal amortization as well as pay-off, refinances, property sales et cetera. And so what you can’t see necessarily as fairly is that 358 number will continue to drift down. I think it represented about half of the 100 million run off this quarter, was in that likely to retain bucket but we may be picking up pieces and parts of that in those relationships in the uncovered book. So while we don’t disclose relationship changes, that’s the way it works on the balance sheet if that makes sense. So you are going to see run-off in both of them. We’re just trying to retain the relationship in that 358 bucket that you referenced.

So basically the stuff that you want to retain if you renew something it goes out of the covered portfolio into the non-covered portfolio essentially?

Well it can come out of the covered because it’s possible that those types of changes would require us to no longer -- it would be now be [any] longer for loss year coverage. But it would still be in the accounting frame work that it's been in for the last four years. The other part of your question John around the 160 million we’re not going to get all out of that. We’re not going to be totally successful and if you fast forward on a big picture level of what we might look like there a year from now, our hope and goal is that about 160 would be a relatively small number of let’s call them non-performing or subpar credit. They would have an allowance, they would still be marked, we are just trying to move that 160 down to as low a level as possible.

Okay. That makes sense. And one other question for you Tony just wanted to make sure I heard your comment on the securities portfolio. Did you say that you could potentially see it go up about $100 million between now and year-end I guess depending on loan growth?

Yeah that’s right. I mean we’re back to kind of our pre-leverage strategy levels and we are looking to add to the portfolio in a more measured way around fixed and float and some duration. So I think it’s likely again depending on loan growth you could see that portfolio growth between now and end of the year.

Super, thanks guys.

Thank you.

With no further questions this concludes our question-and-answer session. I would like to turn the conference back over to Claude Davis for any closing remarks.

Great thanks, Jessica and I would just thank everyone for joining our call today and your interest in First Financial Bank. Thank you.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.