Welcome to the First Financial Bancorp first quarter 2009 Earnings Call and web cast. (Operator Instructions). Now I'd like to turn the call over to Patti Forsythe. Miss Forsythe?

Thank you, Ryan. I would also like to thank everyone for joining us on today's call to discuss First Financial Bancorp's first quarter 2009 results. Joining me on today's call are First Financial's President and Chief Executive Officer, Claude Davis; and First Financial's Executive Vice President and Chief Financial Officer, Frank Hall. I would like to remind everyone that our discussion today may involve certain forward-looking-statements, which are not statements of historical fact. Our first quarter 2009 earnings release should be read in conjunction with the consolidated financial statements, notes and tables attached and in the First Financial Bancorp's Annual Report on Form 10-K for the year ended December 31, 2008. Management's analysis contains forward-looking-statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. Factors that could cause actual results to differ from those discussed in the forward-looking-statements include, but are not limited to, management's ability to effectively execute its business plan, the risk that the strength of the US economy in general, and the strength of the local economies in which First Financial conducts its operations, may be different than expected; and the effects of, and changes in policies and laws of regulatory agencies, inflation, and interest rates. For a further discussion of certain factors that may cause such forward-looking statements to differ materially from actual results, please refer to our 2008 Form 10-K and our other publicly filed documents with the SEC, Securities and Exchange Commission. These documents are available within the investor relations section of our website at bankatfirst.com, and on the SEC's website at sec.gov. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended March 31, 2009, which will be filed with the SEC no later than May 11, 2009. Please note that the content of this call contains time sensitive information that is accurate only as of today, Thursday, April 30, 2009. Now I will turn the call over to Claude Davis. Claude?

Thank you, Patti. Good morning and thank you for joining us. We are pleased with our profitability this quarter, including strong loan and deposit growth, and a relatively stable net interest margin, given the difficult economic conditions we are operating under. For the first quarter of 2009 our reported net income was $5.7 million, with net income available to common shareholders of $5.2 million or $0.14 per diluted common share. Net income available to common shareholders reflects net income less the $578,000 in dividends we paid to the US Treasury on their $80 million in First Financial preferred securities. As mentioned in the news release, the unprecedented level of economic stress has caused our credit quality to weaken somewhat, and we expect these challenging conditions to continue throughout 2009, not only for us, but for the entire industry. However, we do believe that our historically conservative underwriting practices and proactive management of resolution strategies for problem credits have produced asset quality ratios that continue to be better than our industry peers. Our first quarter 2009 provision expense, although lower than the fourth quarter level, represented approximately 115% of first quarter 2009 total net charge-offs, and the allowance for loan and lease losses as a percent of period-end loans, remained stable at 1.33%. Total net charge-offs declined $1.2 million from the fourth quarter. However, nonperforming loans increased $6.7 million. This increase is primarily attributable to deterioration within our commercial lending portfolio. This higher level of nonperforming loans adversely impacted our first quarter 2009 allowance to nonperforming loan coverage ratios. Our coverage ratio is largely dependent on the size of loans entering the nonperforming category, and the associated reserves that are assigned to those loans. Larger credits will typically have individual reserve coverage ratios below one to one. We believe that our…

Thank you, Claude. I will highlight some of the details of our quarterly performance, but first want to address some additional metrics we've included in the earnings release. First, in table two of the release, we've provided our pre-tax, pre-provision income, both with and without securities gains. Given the recent volatility in the credit performance and outlook, and the often material impact of securities transactions, we want to provide a clear point of reference for the operational effectiveness and performance for First Financial. Secondly, we've added some additional capital ratios to our financial highlights section of the earnings release, to provide reference points for the strength of our capital. Specifically our tangible common equity to risk-weighted assets is noted at a current level of 8.38%, down approximately 10% from a year ago versus our tangible common equity to tangible assets of 6.54%, down over 13% for the year. This is indicative of our 14% year-over-year balance sheet growth, driven largely by a near doubling of our investment portfolio. One other item of note is the sale of our property and casualty portion of our insurance business. The associated revenue and expense from this business is approximately $1.6 million pre-tax for both revenue and expense. Net interest margin was a non-tax equivalent 3.61% for the first quarter, a linked quarter decrease of six basis points. Comparable quarter year-over-year net interest margin is down a modest 17 basis points. Our balance sheet remains asset sensitive, and has experienced most of the impact from the last Fed rate cut. Our margin was bolstered by the short funding strategy supporting our investment securities purchases associated with the capital purchase program. At this time, we believe this is an appropriate funding strategy, given the current rate outlook and the duration of the related securities. Our…

(Operator Instructions) Our first question comes from Scott Siefers of Sandler O'Neill.

Frank, first questions are probably for you. I know you suggested you'll be opportunistic on securities purchases with no target size for the portfolio, but I'd be curious to hear your thoughts on your willingness to leverage the TARP capital further. As it stands now, you guys seem to have struck a pretty good balance between leveraging it and also keeping the TCE high. So, I'd just be curious to hear your thoughts there. Then, as an unrelated follow-up, maybe you could add a bit more color on the dynamics of the margin holding up so well. You mentioned some of the short-term funding issues but I think we've seen so many margins just kind of collapse this quarter unexpectedly. I'd just be curious to hear your thoughts there.

Sure. First on the investment portfolio and the leverage of the CPP capital. Our objective and our near-term approach on that was to really cover the cost associated with the capital and we've achieved that. So, we would not look at this time to leverage it further, again unless the securities market should turn in a direction where we can be opportunistic, but I would say setting expectations, we've achieved our near-term objective with that capital and the related investment portfolio and will likely [view] at those levels. As it relates to the margin, that really has been the benefit in our linked quarter margin, was the ability to stay relatively short in our funding. As we look at the rate outlook and forecast, we feel that that's appropriate and is where we're comfortable being positioned at the moment. It's something that we continue to monitor and may alter our funding strategy if anything materially changes in the market, but at this point, we're comfortable at those levels.

The only thing I would add Scott, to Frank's comment is that I think, which Frank mentioned in his comments. I think a bit better loan spread has assisted us as well as some of the growth in the transaction or core deposit side. So, it has been a combination.

Then if I sort of interpreted those comments plus some of the prepared comments correctly, would it be fair to assume that the directional pressure might still be downward, but with some mitigating factors, i.e., improved loan spreads and a richer mix on the funding side, etcetera?

Yes, that's probably a fair assessment. I would say if you look at, again our asset sensitivity, how it's performed in previous down rate periods. Most of the effect is felt in the first and second quarter after the rate cuts. So your assessment is probably fair.

Then Claude, maybe one or two questions I think are probably best for you. The pace of reserve build was perhaps a bit lower than I had forecast. So maybe if you could speak on credit, based on what you see. Is there anything out there that you see currently, that would lead you to believe that more substantial reserve building could be necessary in coming quarters? Then a related question, just qualitatively, if you could just comment on sort of the pace of deterioration you're seeing in your markets or perhaps bottoming as compared to what you would've witnessed say 60 or 90 days ago?

Sure. Yes, we're probably not in a position to provide guidance related to reserve build, Scott, but I can give you some qualitative thoughts, I think just around what we're seeing in the market, which certainly has an impact on our clients. Comparable to my prepared comments and some of the things in the press release, it is still very difficult, economically. I think what we're expecting is that 2009, in our market areas will be very difficult. I don't know that we're seeing maybe a few positives, but I would say for the most part we expect recovery not to occur yet this year. I think it's probably out into 2010. I think our concern, with our clients that we're trying to monitor and stay on top of and that is even if it's bottoming, which it feels like it might be but it's still hard to tell, is that the longer you go, whether you're on downward pace or whether you're at the bottom and just bumping along the bottom, is that the longer you go the more stressed the liquidity of our clients becomes. I would say that's what we're most focused on, whether that be in C&I type credits or residential developments, etcetera. Our antennae are up and we're not expecting significant improvement yet this year. It will be bumpy.

Our next question comes from [Joe Steven of Steven Capital.]

Scotty sort of asked part of my question, but I just wanted to ask sort of a related question. If you look at the yield on your loans, actually look at the yield on your loans compared to the yield on your investment securities, it looks like you guys will have some room to sort of re-price up a lot of the loans in time. Just sort of want to hear about your efforts when loans come up for renewal. How much are you able to move things right now? Thanks guys, good quarter in a pretty tough environment.

Yes. Thanks, Joe. I would tell you, we are seeing some pricing flexibility on the loan side that we had not seen prior to three to six months ago. So, as we would track it, the spreads through our internal transfer pricing has moved up, and we think there's some pricing capability in the market, without treating our clients inappropriately or unfairly. There's still some competition but we are seeing some flexibility.

We have a follow up question from Scott Siefers of Sandler O'Neill.

Just one sort of ticky tack question I forgot to ask. Frank, do you have offhand what the duration is of the securities that you've been buying?

Sure. I'll put it in terms of the total portfolio. Our total portfolio has a duration of just under two years about 1.9, and the CPP portfolio is just a little longer than that, about 2.2, but that is part of that total portfolio number as well.

(Operator Instructions) At this time, I'm showing no further questions.

Well thank you, Ryan and thanks everyone for your interest in First Financial and we appreciate your participation in today's call. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.