First Financial Bancorp in Hamilton, Ohio, said second-quarter earnings fell 56% from a year earlier, to $4.4 million, because of costs associated with a restructuring.
First Financial attributed the decline largely to $2.6 million of severance costs and more than $2 million of costs for a data conversion, professional services, and health care accruals. It also said that net interest income fell 5.8%, to $31.9 million, because of a planned reduction in earning assets through the sale of certain loans and its exit from indirect lending.
The company had already announced that it was eliminating 200 jobs, selling or closing 12 branches, and restructuring its balance sheet to add more commercial loans and reduce its investment securities portfolio.
It said Friday that commercial loans now make up 53% of its loan portfolio, versus 47% at June 30, 2005, and its investment portfolio now accounts for 10.7% of assets, versus 16.5% on Dec. 31.
First Financial also announced that it is resuming a share repurchase plan it suspended late last year. The management plans to buy back between 750,000 and 1.25 million shares over the next 12 months.
