HAMILTON — Possible fraudulent loan activities from two automotive customers of First Financial Bank cost the company $3.8 million in the second quarter and the FBI is investigating the issue, according to a company executive.

The locally based bank reported in its earnings report that its results for the quarter were negatively impacted by two separate automotive dealership relationships. Officials discovered the unusual activity involving loans from the dealerships at the end of the second quarter, said Claude Davis, president and CEO of First Financial.

“We had two auto dealers that basically had some fraudulent activity that caused us to take a loss on their loans of $3.8 million,” he said.

Davis would not release the names of the auto dealers, but said the FBI has been contacted regarding the fraudulent activity and the investigation is ongoing.

Spc. Agent Michael Brooks, spokesman for the Cincinnati division of the FBI, said the agency can neither confirm nor deny it is investigating and information on cases are not released unless charges are brought.

“A normal course of business for a bank is to submit a suspicious activities report,” Brooks said.

The financial impact of the two auto dealer loans decreased First Financial’s net income on an after-tax basis of $2.4 million, according to the company.

Contact this reporter at (513) 705-2843 or jheffner@coxohio.com.