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First Financial Bank
FFBC
#4005
Rank
$3.07 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$29.39
Share price
-1.54%
Change (1 day)
35.94%
Change (1 year)
๐Ÿฆ Banks๐Ÿ’ณ Financial services
Categories
  1. First Financial Bank
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2025 Q3

First Financial Bank - 10-Q quarterly report FY2025 Q3


Text size:
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.  20549

FORM 10-Q


☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                                           September 30, 2025                                                   

OR

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________

Commission file number 001-34762
FIRST FINANCIAL BANCORP /OH/
(Exact name of registrant as specified in its charter)
Ohio31-1042001
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
255 East Fifth Street, Suite 900Cincinnati,Ohio45202
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code:  (877) 322-9530

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol Name of each exchange on which registered
Common stock, No par valueFFBC The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of Exchange Act).
Yes  ☐ No   ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. The registrant has one class of common stock (no par value) with 98,529,694 shares outstanding at November 3, 2025.

FIRST FINANCIAL BANCORP.

INDEX

 Page No.
  
 
  
Item 1 - Financial Statements
 
  
Consolidated Balance Sheets - September 30, 2025 (unaudited) and December 31, 2024
1
  
Consolidated Statements of Income - Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)
2
Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)
3
Consolidated Statements of Changes in Shareholders’ Equity - Three and Nine Months September 30, 2025 and 2024 (unaudited)
4
Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2025 and 2024 (unaudited)
6
  
Notes to Consolidated Financial Statements (unaudited)
8
  
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
50
  
Item 3 - Quantitative and Qualitative Disclosures about Market Risk
73
  
Item 4 - Controls and Procedures
73
 
  
Item 1 - Legal Proceedings
74
  
Item 1A - Risk Factors
74
  
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
74
  
Item 5 - Other Information
74
Item 6 - Exhibits
75
  
Signatures
76


Glossary of Abbreviations and Acronyms

First Financial has identified the following list of abbreviations and acronyms that are used in the Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations.

ABLAsset backed lendingFirst FinancialFirst Financial Bancorp.
ACL or AllowanceAllowance for credit lossesForm 10-KFirst Financial Bancorp. Annual Report on Form 10-K
AFSAvailable-for-saleFRBFederal Reserve Bank
AgileAgile Premium FinanceFTEFully tax equivalent
ALCOAsset Liability CommitteeGAAPU.S. Generally Accepted Accounting Principles
AOCIAccumulated other comprehensive incomeHTCHistoric tax credit
ASCAccounting standards codificationHTMHeld-to-maturity
ASUAccounting standards updateInsignificantLess than $0.1 million
BankFirst Financial BankIRLCInterest rate lock commitment
Basel IIIBasel Committee regulatory capital reforms, Third Basel AccordLIHTCLow income housing tax credit
BannockburnBannockburn Global ForexMD&A
Management's Discussion and Analysis of Financial Condition and Results of Operations
Bp/bpsBasis point(s)MSFGMainSource Financial Group, Inc.
CDsCertificates of depositN/ANot applicable
C&ICommercial & industrialNIINet interest income
CRECommercial real estateNMTCNew market tax credit
CompanyFirst Financial Bancorp.OREOOther real estate owned
CFTF
Contingency Funding Task Force
PAMProportional amortization method
Dodd-FrankDodd–Frank Wall Street Reform and Consumer Protection ActPCAPrompt corrective action
ERMEnterprise risk managementR&SReasonable and supportable
EVEEconomic value of equityROURight-of-use
Fair Value TopicFASB ASC Topic 820, Fair Value MeasurementSECU.S. Securities and Exchange Commission
FASBFinancial Accounting Standards BoardSummitSummit Funding Group, Inc.
FDICFederal Deposit Insurance CorporationSOFRSecured Overnight Financing Rate
FDMFinancial difficulty modificationTopic 842FASB ASC Topic 842, Leasing
FHLBFederal Home Loan BankUSDUnited States dollars



PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30,
2025		December 31,
2024
 (Unaudited) 
Assets  
Cash and due from banks$174,659 $174,258 
Interest-bearing deposits with other banks565,080 730,228 
Investment securities available-for-sale, at fair value (amortized cost $3,669,996 at September 30, 2025 and $3,512,652 at December 31, 2024)
3,422,595 3,183,776 
Investment securities held-to-maturity (fair value $65,911 at September 30, 2025 and $68,989 at December 31, 2024)
71,595 76,960 
Other investments117,120 114,598 
Loans held for sale, at fair value21,466 13,181 
Loans and leases
Commercial & industrial3,838,630 3,815,858 
Lease financing596,734 598,045 
Construction real estate627,960 779,446 
Commercial real estate4,048,370 4,061,744 
Residential real estate1,494,464 1,462,284 
Home equity935,975 849,039 
Installment109,764 133,051 
Credit card62,654 62,311 
Total loans and leases11,714,551 11,761,778 
Less: Allowance for credit losses(161,916)(156,791)
Net loans and leases11,552,635 11,604,987 
Premises and equipment198,251 197,965 
Operating leases214,667 209,119 
Goodwill1,007,656 1,007,656 
Other intangibles73,797 79,291 
Accrued interest and other assets1,134,985 1,178,242 
Total assets$18,554,506 $18,570,261 
Liabilities  
Deposits  
Interest-bearing demand$2,983,132 $3,095,724 
Savings5,029,097 4,948,768 
Time3,293,707 3,152,265 
Total interest-bearing deposits11,305,936 11,196,757 
Noninterest-bearing3,127,512 3,132,381 
Total deposits14,433,448 14,329,138 
FHLB short-term borrowings550,000 625,000 
Other short-term borrowings45,167 130,452 
Total short-term borrowings595,167 755,452 
Long-term debt221,823 347,509 
Total borrowed funds816,990 1,102,961 
Accrued interest and other liabilities672,213 700,121 
Total liabilities15,922,651 16,132,220 
Shareholders' equity  
Common stock - no par value  
Authorized - 160,000,000 shares; Issued - 104,281,794 shares at both September 30, 2025 and December 31, 2024
1,641,315 1,642,055 
Retained earnings1,399,577 1,276,329 
Accumulated other comprehensive income (loss)(223,000)(289,799)
Treasury stock, at cost, 8,524,544 shares at September 30, 2025 and 8,786,954 shares at December 31, 2024
(186,037)(190,544)
Total shareholders' equity2,631,855 2,438,041 
Total liabilities and shareholders' equity$18,554,506 $18,570,261 
See Notes to Consolidated Financial Statements.
1
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three months endedNine months ended
September 30,September 30,
 2025202420252024
Interest income  
Loans and leases, including fees$204,865 $215,433 $603,488 $629,033 
Investment securities
Taxable36,421 32,367 107,065 90,958 
Tax-exempt2,195 2,616 6,632 8,412 
Total interest on investment securities38,616 34,983 113,697 99,370 
Other earning assets6,773 6,703 19,388 22,121 
Total interest income250,254 257,119 736,573 750,524 
Interest expense  
Deposits77,766 86,554 231,891 245,651 
Short-term borrowings5,979 9,932 19,917 32,270 
Long-term borrowings6,023 5,073 16,714 14,992 
Total interest expense89,768 101,559 268,522 292,913 
Net interest income160,486 155,560 468,051 457,611 
Provision for credit losses - loans and leases 8,612 9,930 26,837 39,506 
Provision for (recapture of) credit losses - unfunded commitments453 694 730 (1,279)
Net interest income after provision for credit losses151,421 144,936 440,484 419,384 
Noninterest income  
Service charges on deposit accounts7,829 7,547 23,058 21,647 
Wealth management fees7,351 6,910 23,275 20,758 
Bankcard income3,589 3,698 10,636 10,740 
Client derivative fees1,876 1,160 5,121 3,173 
Foreign exchange income16,666 12,048 42,970 39,270 
Leasing business income20,997 16,811 60,497 48,228 
Net gains from sales of loans6,835 5,021 17,844 13,284 
Net gain (loss) on investment securities(42)(17,468)(9,748)(22,719)
Other8,424 9,974 19,018 19,333 
Total noninterest income73,525 45,701 192,671 153,714 
Noninterest expenses  
Salaries and employee benefits80,607 74,813 230,762 224,075 
Net occupancy6,003 5,919 17,867 17,635 
Furniture and equipment3,582 3,617 10,836 10,951 
Data processing9,591 8,857 27,370 26,039 
Marketing2,359 2,255 7,114 6,822 
Communication695 851 2,188 2,462 
Professional services2,314 2,303 8,602 7,456 
Amortization of tax credit investments112 32 335 94 
State intangible tax1,531 876 3,925 2,628 
FDIC assessments2,611 3,036 8,281 8,473 
Intangible amortization2,359 2,395 7,076 7,092 
Leasing business expense13,911 11,899 39,868 31,781 
Other8,594 8,906 26,792 26,180 
Total noninterest expenses134,269 125,759 391,016 371,688 
Income before income taxes90,677 64,878 242,139 201,410 
Income tax expense18,754 12,427 48,927 37,465 
Net income$71,923 $52,451 $193,212 $163,945 
Net earnings per common share - basic$0.76 $0.56 $2.04 $1.74 
Net earnings per common share - diluted$0.75 $0.55 $2.02 $1.72 
Average common shares outstanding - basic94,889,341 94,473,666 94,799,411 94,377,010 
Average common shares outstanding - diluted95,753,798 95,479,510 95,674,093 95,378,238 
See Notes to Consolidated Financial Statements.
2
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
(Unaudited)
Three months endedNine months ended
September 30,September 30,
2025202420252024
Net income$71,923 $52,451 $193,212 $163,945 
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on debt securities arising during the period23,755 87,497 63,536 78,312 
Change in retirement obligation505 376 1,465 953 
Unrealized gain (loss) on derivatives(608)3,116 1,386 (1,433)
Unrealized gain (loss) on foreign currency exchange(268)158 412 (275)
Other comprehensive income (loss) 23,384 91,147 66,799 77,557 
Comprehensive income$95,307 $143,598 $260,011 $241,502 
                   See Notes to Consolidated Financial Statements.

3
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars in thousands except per share data)
(Unaudited)
 Common StockRetainedAccumulated other comprehensiveTreasury stock 
 SharesAmountEarningsincome (loss)SharesAmountTotal
Balance at July 1, 2024104,281,794 $1,635,705 $1,204,844 $(323,409)(8,795,784)$(190,701)$2,326,439 
Net income 52,451 52,451 
Other comprehensive income (loss)91,147 91,147 
Cash dividends declared:
Common stock at $0.24 per share
(22,920)(22,920)
Restricted stock awards, net of forfeitures(118)307 (19)(137)
Share-based compensation expense3,458 3,458 
Balance at September 30, 2024104,281,794 $1,639,045 $1,234,375 $(232,262)(8,795,477)$(190,720)$2,450,438 
Balance at July 1, 2025104,281,794 $1,638,796 $1,351,674 $(246,384)(8,521,177)$(185,931)$2,558,155 
Net income71,923 71,923 
Other comprehensive income (loss)23,384 23,384 
Cash dividends declared:
Common stock at $0.25 per share
(24,020)(24,020)
Restricted stock awards, net of forfeitures(1,502)(3,367)(106)(1,608)
Share-based compensation expense4,021 4,021 
Balance at September 30, 2025104,281,794 $1,641,315 $1,399,577 $(223,000)(8,524,544)$(186,037)$2,631,855 

See Notes to Consolidated Financial Statements.

4
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars in thousands except per share data)
(Unaudited)
 Common StockRetainedAccumulated other comprehensiveTreasury stock 
 SharesAmountEarningsincome (loss)SharesAmountTotal
Balance at January 1, 2024104,281,794 $1,638,972 $1,136,718 $(309,819)(9,140,550)$(197,897)$2,267,974 
Impact of cumulative effect of adoption of new accounting principles599 599 
Net income 163,945 163,945 
Other comprehensive income (loss)77,557 77,557 
Cash dividends declared:
Common stock at $0.70 per share
(66,887)(66,887)
Restricted stock awards, net of forfeitures(12,329)345,073 7,177 (5,152)
Share-based compensation expense12,402 12,402 
Balance at September 30, 2024104,281,794 $1,639,045 $1,234,375 $(232,262)(8,795,477)$(190,720)$2,450,438 
Balance at January 1, 2025104,281,794 $1,642,055 $1,276,329 $(289,799)(8,786,954)$(190,544)$2,438,041 
Net income193,212 193,212 
Other comprehensive income (loss)66,799 66,799 
Cash dividends declared:
Common stock at $0.73 per share
(69,964)(69,964)
Restricted stock awards, net of forfeitures(13,225)262,410 4,507 (8,718)
Share-based compensation expense12,485 12,485 
Balance at September 30, 2025104,281,794 $1,641,315 $1,399,577 $(223,000)(8,524,544)$(186,037)$2,631,855 

See Notes to Consolidated Financial Statements.
5
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Nine months ended
September 30,
 20252024
Operating activities  
Net income$193,212 $163,945 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (recapture of) credit losses on loans27,567 38,227 
Depreciation and amortization22,086 22,838 
Stock-based compensation expense12,485 12,402 
Pension expense (income)6,694 4,496 
Net amortization (accretion) on investment securities(1,915)3,088 
Net (gain) loss on investment securities9,748 22,719 
Originations of loans held for sale(406,050)(308,217)
Net gains from sales of loans held for sale(17,844)(13,284)
Proceeds from sales of loans held for sale415,608 318,030 
Deferred income taxes37,579 8,473 
Amortization of operating leases5,996 6,088 
Payments for operating leases(6,338)(6,338)
Decrease (increase) cash surrender value of life insurance(4,070)(3,145)
Decrease (increase) in interest receivable(527)(354)
(Decrease) increase in interest payable(8,109)895 
Decrease (increase) in other assets19,380 (24,389)
(Decrease) increase in other liabilities(89,792)(57,376)
Net cash provided by (used in) operating activities215,710 188,098 
Investing activities  
Proceeds from sales of securities available-for-sale353,863 347,403 
Proceeds from calls, paydowns and maturities of securities available-for-sale485,708 348,028 
Purchases of securities available-for-sale(979,030)(742,189)
Proceeds from calls, paydowns and maturities of securities held-to-maturity5,557 2,532 
Proceeds from sales of other investment securities19,359 11,559 
Proceeds from calls, paydowns and maturities of other securities33,072 39,898 
Purchases of other investment securities(54,793)(39,337)
Net decrease (increase) in interest-bearing deposits with other banks165,148 132,384 
Net decrease (increase) in loans and leases25,366 (548,706)
Proceeds from disposal of other real estate owned55 106 
Purchases of premises and equipment(12,729)(14,076)
Net change in operating leases(5,548)(47,866)
Net cash (paid for) acquired from acquisitions0 (96,887)
Life insurance premium payments(72)0 
Life insurance death benefits915 3,294 
Net cash provided by (used in) investing activities36,871 (603,857)
Financing activities  
Net (decrease) increase in total deposits104,310 586,957 
Net (decrease) increase in short-term borrowings(160,285)(126,161)
Payments on long-term debt(125,958)(592)
Cash dividends paid on common stock(70,247)(66,886)
Net cash provided by (used in) financing activities(252,180)393,318 
Cash and due from banks  
Change in cash and due from banks401 (22,441)
Cash and due from banks at beginning of period174,258 213,059 
Cash and due from banks at end of period$174,659 $190,618 
(continued on next page)
See Notes to Consolidated Financial Statements.
6
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)
(Unaudited)


Nine months ended
September 30,
20252024
Supplemental disclosures
Interest paid$276,631 $292,018 
Income taxes paid, net of refunds$3,975 $25,932 
Investment securities purchased not settled$38,060 $23,249 
Supplemental schedule for investing activities
Business combinations
Assets acquired, net of purchase consideration$0 $914 
Liabilities assumed0 2,702 
Goodwill$0 $1,788 

See Notes to Consolidated Financial Statements.
7
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2025
(Unaudited)

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. The Consolidated Financial Statements of First Financial Bancorp., a financial holding company principally serving Ohio, Indiana, Kentucky and Illinois, include the accounts and operations of First Financial and its wholly-owned subsidiary, First Financial Bank. All significant intercompany transactions and accounts have been eliminated in consolidation.  Certain reclassifications of prior periods' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they may not include all of the information and accompanying notes necessary to constitute a complete set of financial statements required by GAAP and should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.  Management believes these unaudited consolidated financial statements reflect all adjustments of a normal recurring nature which are necessary for a fair presentation of the results for the interim periods presented.  The results of operations for the interim periods may not necessarily be indicative of the results that can be expected for the full year or any other interim period.  The Consolidated Balance Sheet as of December 31, 2024 has been derived from the audited financial statements in the Company’s 2024 Form 10-K.

Use of estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.  Actual realized amounts could differ materially from these estimates.
NOTE 2:  ACCOUNTING STANDARDS RECENTLY ADOPTED OR ISSUED

Standards Adopted in 2024

In March, 2023, the FASB issued ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, that is intended to improve the accounting and disclosures for investments in tax credit structures. The ASU was a ratification of the FASB’s EITF consensus that was issued in December, 2022. The ASU allowed reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, if certain conditions are met, regardless of the program giving rise to the related income tax credits.

The amendments were effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. First Financial adopted this standard on a modified retrospective basis, resulting in amended disclosures in the Company's Consolidated Financial Statements, but not materially impacting the Company's results of operations. The Company recorded a net increase to retained earnings of $0.6 million as of January 1, 2024 for the cumulative effect of adopting this guidance.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments were intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhanced interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The ASU applied to all public entities that are required to report segment information in accordance with ASC 280. The amendments in ASU 2023-07 were effective for all public entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The adoption of this standard resulted in amended disclosures in the Company's Consolidated Financial Statements, but did not impact the Company's results of operations.



8
Standards Issued But Not Yet Adopted

In December, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. These amendments require public business entities on an annual basis to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a quantitative threshold. Additionally, the ASU requires information pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts are equal to or greater than five percent of total income taxes paid (net of refunds received). The amendments in this ASU are effective for annual periods beginning after December 15, 2024. The adoption of this standard will result in additional disclosures in the Company's Consolidated Financial Statements, but it is not expected to materially impact the Company's results of operations.

In September, 2025, the FASB issued ASU ASU 2025-06, Intangibles – Goodwill and Other -- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The final rule, which is intended to modernize accounting for costs related to internal use software, removes all references to project stages throughout ASC 350-40 and clarifies that costs may begin to be capitalized once management has authorized the project and it is probable that the project will be completed and the software will be used to perform the function intended. The guidance specifies that the property, plant and equipment disclosure requirements under ASC 360-10 apply to all capitalized software costs accounted for under ASC 350-40, regardless of how the costs are presented in the financial statements. Entities will need to disclose the capitalized internal-use software balance and accumulated amortization at the balance sheet date, the amortization for the period and a general description of the method used in computing amortization. The amendments in this ASU are effective for annual periods beginning after December 15, 2027 and interim periods within those years. The adoption of this standard will result in additional disclosures in the Company's Consolidated Financial Statements, but it is not expected to materially impact the Company's results of operations.

NOTE 3:  INVESTMENTS

For the three months ended September 30, 2025, there were $189.3 million sales of AFS securities with $3.4 million of gross realized gains and no gross realized losses. For the nine months ended September 30, 2025 there were $353.9 million of sales of AFS securities with $3.5 million of gross realized gains and gross realized losses of $10.0 million. For the three months ended September 30, 2024, there were $135.4 million sales of AFS securities with gross realized gains of $0.7 million and gross realized losses of $1.0 million. For the nine months ended September 30, 2024, there were $347.4 million of sales of AFS securities with $1.1 million of gross realized gains and gross realized losses of $6.9 million. Additionally, during the nine months ended September 30, 2024, First Financial sold its remaining Class B Visa shares, which resulted in proceeds of $11.6 million, with gross realized gains of $2.2 million, which is included in Net gain (loss) on investment securities on the Consolidated Statements of Income.

First Financial had five AFS securities with unrealized losses due to credit deterioration at September 30, 2025. These securities totaled $21.0 million, net of $9.1 million unrealized losses. The Company had two AFS securities with unrealized losses due to credit deterioration at December 31, 2024, which totaled $11.1 million, and had unrealized losses of $1.1 million. The Company continues to monitor these securities and believes that the Company will receive the full par value.

9
The following is a summary of HTM and AFS investment securities as of September 30, 2025:
  
Held-to-maturityAvailable-for-sale
(Dollars in thousands)Amortized
cost		Unrecognized gainUnrecognized lossFair
value		Amortized
cost		Unrealized
gain		Unrealized
loss		Fair
value
U.S. Treasuries$0 $0 $0 $0 $99 $0 $(5)$94 
Securities of U.S. government agencies and corporations0 0 0 0 73,204 0 (6,771)66,433 
Mortgage-backed securities - residential 0 0 0 0 1,358,833 8,152 (74,625)1,292,360 
Mortgage-backed securities - commercial 28,176 0 (3,669)24,507 311,509 957 (19,457)293,009 
Collateralized mortgage obligations6,349 0 (530)5,819 605,089 3,917 (38,729)570,277 
Obligations of state and other political subdivisions8,320 80 (188)8,212 621,066 634 (102,632)519,068 
Asset-backed securities0 0 0 0 563,927 1,959 (14,082)551,804 
Other securities28,750 0 (1,377)27,373 136,269 522 (7,241)129,550 
Total$71,595 $80 $(5,764)$65,911 $3,669,996 $16,141 $(263,542)$3,422,595 

The following is a summary of HTM and AFS investment securities as of December 31, 2024:
  
Held-to-maturityAvailable-for-sale
(Dollars in thousands)Amortized
cost		Unrecognized gainUnrecognized
loss		Fair
value		Amortized
cost		Unrealized
gain		Unrealized
loss		Fair
value
U.S. Treasuries$0 $0 $0 $0 $99 $0 $(9)$90 
Securities of U.S. government agencies and corporations0 0 0 0 83,224 0 (11,546)71,678 
Mortgage-backed securities - residential 0 0 0 0 1,102,242 508 (104,208)998,542 
Mortgage-backed securities - commercial 30,444 0 (4,454)25,990 382,727 26 (25,381)357,372 
Collateralized mortgage obligations7,007 0 (788)6,219 620,315 1,449 (52,599)569,165 
Obligations of state and other political subdivisions8,259 42 (339)7,962 630,813 357 (109,904)521,266 
Asset-backed securities0 0 0 0 555,484 998 (22,379)534,103 
Other securities31,250 0 (2,432)28,818 137,748 120 (6,308)131,560 
Total$76,960 $42 $(8,013)$68,989 $3,512,652 $3,458 $(332,334)$3,183,776 

The following table provides a summary of investment securities by contractual maturity as of September 30, 2025, except for residential and commercial mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which are shown as single totals due to the unpredictability of the timing in principal repayments.
 Held-to-maturityAvailable-for-sale
(Dollars in thousands)Amortized
cost		Fair
value		Amortized
cost		Fair
value
By Contractual Maturity:
Due in one year or less$715 $715 $14,381 $13,280 
Due after one year through five years6,167 6,247 187,361 168,726 
Due after five years through ten years28,750 27,373 158,546 135,062 
Due after ten years1,438 1,250 470,350 398,077 
Mortgage-backed securities - residential 0 0 1,358,833 1,292,360 
Mortgage-backed securities - commercial 28,176 24,507 311,509 293,009 
Collateralized mortgage obligations6,349 5,819 605,089 570,277 
Asset-backed securities0 0 563,927 551,804 
Total$71,595 $65,911 $3,669,996 $3,422,595 

10
Unrealized gains and losses on debt securities available-for-sale are generally due to fluctuations in current market yields relative to the yields of the securities at their amortized cost. All AFS securities with unrealized losses are reviewed quarterly to determine if any impairment exists, requiring a write-down to fair value. For AFS securities in an unrealized loss position, the Company first assesses whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For AFS securities in an unrealized loss position that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis.

Other than two securities on which the Company recorded impairment losses of $3.4 million and $9.7 million in the three and nine months ended September 30, 2025 and 2024, respectively, First Financial does not intend to sell, and it is not more likely than not that the Company will be required to sell, debt securities prior to maturity or recovery of the recorded value.

Other than the previously mentioned securities on which the Company recorded impairment losses, First Financial does not intend to sell, and it is not more likely than not that the Company will be required to sell, debt securities prior to maturity or recovery of the recorded value. Additionally, based on the Company's credit assessment of AFS securities in an unrealized loss position, the Company recorded no reserves for the periods ended September 30, 2025 or December 31, 2024.

As of September 30, 2025, the Company's investment securities portfolio consisted of 740 AFS and HTM securities, of which 534 were in an unrealized loss position. As of December 31, 2024, the Company's investment securities portfolio consisted of 743 AFS and HTM securities, of which 644 were in an unrealized loss position.

Primarily all of First Financial’s HTM debt securities are issued by U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. The remainder of the Company's HTM securities are non-agency collateralized mortgage obligations and obligations of state and other political subdivisions which currently carry ratings no lower than A+. There were no HTM securities on nonaccrual status or past due at September 30, 2025 or December 31, 2024.

Management measures expected credit losses on HTM debt securities on a collective basis by security type. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company did not record an ACL for these securities as of September 30, 2025 or December 31, 2024.

11
The following tables provide the fair value and gross unrealized losses of AFS investment securities in an unrealized loss position for which an ACL has not been recorded, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:

 September 30, 2025
 Less than 12 months12 months or moreTotal
(Dollars in thousands)Fair
value		Unrealized
loss		Fair
value		Unrealized
loss		Fair
value		Unrealized
loss
U.S. Treasuries$0 $0 $94 $(5)$94 $(5)
Securities of U.S. Government agencies and corporations0 0 66,433 (6,771)66,433 (6,771)
Mortgage-backed securities - residential 91,271 (532)586,441 (74,093)677,712 (74,625)
Mortgage-backed securities - commercial 26,320 (92)185,677 (19,365)211,997 (19,457)
Collateralized mortgage obligations7,218 (15)292,317 (38,714)299,535 (38,729)
Obligations of state and other political subdivisions11,297 (19)459,190 (102,613)470,487 (102,632)
Asset-backed securities26,305 (23)66,899 (14,059)93,204 (14,082)
Other securities3,499 (1)101,030 (7,240)104,529 (7,241)
Total$165,910 $(682)$1,758,081 $(262,860)$1,923,991 $(263,542)

 December 31, 2024
 Less than 12 months12 months or moreTotal
(Dollars in thousands)Fair
value		Unrealized
loss		Fair
value		Unrealized
loss		Fair
value		Unrealized
loss
U.S. Treasuries$0 $0 $90 $(9)$90 $(9)
Securities of U.S. Government agencies and corporations0 0 71,678 (11,546)71,678 (11,546)
Mortgage-backed securities - residential417,516 (9,130)503,321 (95,078)920,837 (104,208)
Mortgage-backed securities - commercial26,516 (67)286,589 (25,314)313,105 (25,381)
Collateralized mortgage obligations120,670 (1,776)296,813 (50,823)417,483 (52,599)
Obligations of state and other political subdivisions19,636 (351)478,083 (109,553)497,719 (109,904)
Asset-backed securities26,389 (189)159,135 (22,190)185,524 (22,379)
Other securities9,988 (12)115,452 (6,296)125,440 (6,308)
Total$620,715 $(11,525)$1,911,161 $(320,809)$2,531,876 $(332,334)

12
The following tables provide the fair value and gross unrecognized losses of HTM investment securities in an unrecognized loss position for which an ACL has not been recorded, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:
September 30, 2025
Less than 12 months12 months or moreTotal
(Dollars in thousands)Fair
value		Unrecognized
loss		Fair
value		Unrecognized
loss		Fair
value		Unrecognized
loss
U.S. Treasuries$0 $0 $0 $0 $0 $0 
Securities of U.S. Government agencies and corporations0 0 0 0 0 0 
Mortgage-backed securities - residential0 0 0 0 0 0 
Mortgage-backed securities - commercial0 0 24,507 (3,669)24,507 (3,669)
Collateralized mortgage obligations0 0 5,819 (530)5,819 (530)
Obligations of state and other political subdivisions478 (1)1,250 (187)1,728 (188)
Asset-backed securities0 0 0 0 0 0 
Other securities0 0 27,373 (1,377)27,373 (1,377)
Total$478 $(1)$58,949 $(5,763)$59,427 $(5,764)

December 31, 2024
Less than 12 months12 months or moreTotal
(Dollars in thousands)Fair
value		Unrecognized
loss		Fair
value		Unrecognized
loss		Fair
value		Unrecognized
loss
U.S. Treasuries$0 $0 $0 $0 $0 $0 
Securities of U.S. Government agencies and corporations0 0 0 0 0 0 
Mortgage-backed securities - residential0 0 0 0 0 0 
Mortgage-backed securities - commercial0 0 25,990 (4,454)25,990 (4,454)
Collateralized mortgage obligations0 0 6,219 (788)6,219 (788)
Obligations of state and other political subdivisions3,111 (33)2,288 (306)5,399 (339)
Asset-backed securities0 0 0 0 0 0 
Other securities0 0 28,818 (2,432)28,818 (2,432)
Total$3,111 $(33)$63,315 $(7,980)$66,426 $(8,013)

For further detail on the fair value of investment securities, see Note 17 – Fair Value Disclosures.

NOTE 4:  LOANS AND LEASES

First Financial offers clients a variety of commercial and consumer loan and lease products with diverse interest rates and payment terms. Commercial loan categories include C&I, CRE, construction real estate and lease financing. Consumer loan categories include residential real estate, home equity, installment and credit card.

Lending activities are primarily concentrated in states where the Bank operates banking centers (Ohio, Indiana, Kentucky and Illinois). First Financial also has certain specialty lending platforms that extend beyond the geographic banking center footprint. These specialty finance businesses provide insurance premium financing, equipment lease financing and financing to franchise owners and clients within the financial services industry.

Credit Quality. To facilitate the monitoring of credit quality for commercial loans, First Financial utilizes the following categories of credit grades:

13
Pass - Higher quality loans that do not fit any of the other categories described below.

Special Mention - First Financial assigns a special mention rating to loans and leases with potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan, lease or First Financial's credit position at some future date.

Substandard - First Financial assigns a substandard rating to loans or leases that are inadequately protected by the current sound financial worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans and leases have well-defined weaknesses that jeopardize repayment of the debt. Substandard loans and leases are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not addressed.

Doubtful - First Financial assigns a doubtful rating to loans and leases with all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans.

The credit grades previously described are derived from standard regulatory rating definitions and are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

First Financial considers repayment performance to be the best indicator of credit quality for consumer loans. Consumer loans that have principal and interest payments that are past due by 90 days or more are generally classified as nonperforming.

The following table sets forth the Company's loan portfolio at September 30, 2025 by risk attribute and origination date as well as current period gross chargeoffs:
(Dollars in thousands)20252024202320222021PriorTerm TotalRevolvingTotal
Commercial & industrial
Pass$705,067 $610,382 $547,227 $425,493 $190,647 $296,574 $2,775,390 $932,271 $3,707,661 
Special mention3,723 847 1,747 2,242 15,324 10,788 34,671 24,159 58,830 
Substandard6,783 4,579 11,473 13,610 4,312 2,969 43,726 28,413 72,139 
Doubtful0 0 0 0 0 0 0 0 0 
Total$715,573 $615,808 $560,447 $441,345 $210,283 $310,331 $2,853,787 $984,843 $3,838,630 
YTD Gross chargeoffs$793 $979 $8,329 $3,551 $1,040 $455 $15,147 $192 $15,339 
Lease financing
Pass$139,425 $207,362 $170,506 $50,928 $8,678 $3,740 $580,639 $0 $580,639 
Special mention046000046046
Substandard7443945,4608,80452911816,049016,049
Doubtful000000000 
Total$140,169 $207,802 $175,966 $59,732 $9,207 $3,858 $596,734 $0 $596,734 
YTD Gross chargeoffs$0 $491 $1,220 $601 $32 $14 $2,358 $0 $2,358 
Construction real estate
Pass$115,620 $174,493 $118,014 $153,895 $12,461 $7,530 $582,013 $0 $582,013 
Special mention0 0 0 13,856 0 16,299 30,155 0 30,155 
Substandard0 0 0 14,672 0 1,120 15,792 0 15,792 
Doubtful0 0 0 0 0 0 0 0 0 
Total$115,620 $174,493 $118,014 $182,423 $12,461 $24,949 $627,960 $0 $627,960 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $245 $245 $0 $245 
Commercial real estate - investor
Pass$341,205 $406,178 $425,077 $448,992 $301,040 $1,012,714 $2,935,206 $31,081 $2,966,287 
Special mention103 592 16,950 13,243 0 13,615 44,503 0 44,503 
Substandard550 0 0 10,600 0 30,194 41,344 0 41,344 
14
(Dollars in thousands)20252024202320222021PriorTerm TotalRevolvingTotal
Doubtful0 0 0 0 0 0 0 0 0 
Total$341,858 $406,770 $442,027 $472,835 $301,040 $1,056,523 $3,021,053 $31,081 $3,052,134 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $3,105 $3,105 $0 $3,105 
Commercial real estate - owner
Pass$146,543 $189,777 $132,193 $140,089 $81,133 $252,317 $942,052 $22,076 $964,128 
Special mention2,214 2,881 0 514 1,928 8,943 16,480 0 16,480 
Substandard250 2,618 0 983 2,396 9,381 15,628 0 15,628 
Doubtful0 0 0 0 0 0 0 0 0 
Total$149,007 $195,276 $132,193 $141,586 $85,457 $270,641 $974,160 $22,076 $996,236 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 
Residential real estate
Performing$76,150 $150,186 $316,486 $309,147 $221,731 $401,156 $1,474,856 $0 $1,474,856 
Nonperforming0 571 1,172 2,073 4,535 11,257 19,608 0 19,608 
Total$76,150 $150,757 $317,658 $311,220 $226,266 $412,413 $1,494,464 $0 $1,494,464 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $16 $16 $0 $16 
Home equity
Performing$29,603 $28,108 $20,668 $17,879 $22,303 $41,525 $160,086 $769,840 $929,926 
Nonperforming35 110 165 241 239 395 1,185 4,864 6,049 
Total$29,638 $28,218 $20,833 $18,120 $22,542 $41,920 $161,271 $774,704 $935,975 
YTD Gross chargeoffs$0 $0 $19 $0 $8 $158 $185 $93 $278 
Installment
Performing$11,087 $8,242 $4,856 $12,822 $5,819 $4,124 $46,950 $60,742 $107,692 
Nonperforming207 81 25 460 221 152 1,146 926 2,072 
Total$11,294 $8,323 $4,881 $13,282 $6,040 $4,276 $48,096 $61,668 $109,764 
YTD Gross chargeoffs$51 $832 $929 $1,308 $494 $11 $3,625 $10 $3,635 
Credit cards
Performing$0 $0 $0 $0 $0 $0 $0 $62,062 $62,062 
Nonperforming0 0 0 0 0 0 0 592 592 
Total$0 $0 $0 $0 $0 $0 $0 $62,654 $62,654 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $0 $0 $1,540 $1,540 
Total Loans$1,579,309 $1,787,447 $1,772,019 $1,640,543 $873,296 $2,124,911 $9,777,525 $1,937,026 $11,714,551 
Total YTD Gross Chargeoffs$844 $2,302 $10,497 $5,460 $1,574 $4,004 $24,681 $1,835 $26,516 
15
The following table sets forth the Company's loan portfolio at December 31, 2024 by risk attribute and origination date:
(Dollars in thousands)20242023202220212020PriorTerm TotalRevolvingTotal
Commercial & industrial
Pass$819,600 $710,857 $592,046 $298,770 $162,136 $241,857 $2,825,266 $890,880 $3,716,146 
Special mention5,594 1,964 1,971 620 2,859 71 13,079 16,211 29,290 
Substandard4,873 3,433 22,508 8,533 347 4,309 44,003 26,419 70,422 
Doubtful0 0 0 0 0 0 0 0 0 
Total$830,067 $716,254 $616,525 $307,923 $165,342 $246,237 $2,882,348 $933,510 $3,815,858 
YTD Gross chargeoffs$318 $1,264 $5,293 $4,106 $147 $3,295 $14,423 $225 $14,648 
Lease financing
Pass$228,132 $253,776 $70,608 $11,480 $5,309 $1,137 $570,442 $0 $570,442 
Special mention064410,1715500011,365011,365 
Substandard29210,2254,893129869116,238016,238
Doubtful000000000 
Total$228,424 $264,645 $85,672 $12,159 $5,317 $1,828 $598,045 $0 $598,045 
YTD Gross chargeoffs$0 $1,008 $451 $66 $0 $1,867 $3,392 $0 $3,392 
Construction real estate
Pass$139,377 $213,300 $322,493 $40,740 $1,590 $17,352 $734,852 $0 $734,852 
Special mention3,525 0 12,737 0 17,832 0 34,094 0 34,094 
Substandard0 0 0 10,500 0 0 10,500 0 10,500 
Doubtful0 0 0 0 0 0 0 0 0 
Total$142,902 $213,300 $335,230 $51,240 $19,422 $17,352 $779,446 $0 $779,446 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 
Commercial real estate - investor
Pass$515,950 $376,740 $497,047 $340,115 $231,922 $949,772 $2,911,546 $36,716 $2,948,262 
Special mention13,738 30,454 18,423 4,282 106 27,144 94,147 0 94,147 
Substandard0 0 10,600 0 4,950 35,425 50,975 0 50,975 
Doubtful0 0 0 0 0 0 0 0 0 
Total$529,688 $407,194 $526,070 $344,397 $236,978 $1,012,341 $3,056,668 $36,716 $3,093,384 
YTD Gross chargeoffs$0 $0 $0 $0 $788 $9,837 $10,625 $0 $10,625 
Commercial real estate - owner
Pass$202,580 $126,550 $161,401 $94,052 $128,068 $215,902 $928,553 $17,268 $945,821 
Special mention1,839 134 213 2,210 504 1,173 6,073 0 6,073 
Substandard0 0 858 3,159 1,249 11,200 16,466 0 16,466 
Doubtful0 0 0 0 0 0 0 0 0 
Total$204,419 $126,684 $162,472 $99,421 $129,821 $228,275 $951,092 $17,268 $968,360 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $8 $8 $0 $8 
Residential real estate
Performing$129,008 $321,232 $324,180 $233,355 $169,901 $264,312 $1,441,988 $0 $1,441,988 
Nonperforming198 541 1,323 4,412 4,300 9,522 20,296 0 20,296 
Total$129,206 $321,773 $325,503 $237,767 $174,201 $273,834 $1,462,284 $0 $1,462,284 
YTD Gross chargeoffs$0 $0 $25 $16 $0 $102 $143 $0 $143 
Home equity
Performing$30,799 $23,969 $20,280 $24,878 $28,882 $21,160 $149,968 $692,993 $842,961 
Nonperforming61 328 124 144 7 354 1,018 5,060 6,078 
Total$30,860 $24,297 $20,404 $25,022 $28,889 $21,514 $150,986 $698,053 $849,039 
YTD Gross chargeoffs$37 $37 $0 $186 $5 $182 $447 $0 $447 
Installment
Performing$12,356 $9,997 $22,244 $11,500 $2,004 $3,759 $61,860 $69,153 $131,013 
16
(Dollars in thousands)20242023202220212020PriorTerm TotalRevolvingTotal
Nonperforming190 116 607 268 20 16 1,217 821 2,038 
Total$12,546 $10,113 $22,851 $11,768 $2,024 $3,775 $63,077 $69,974 $133,051 
YTD Gross chargeoffs$382 $1,120 $4,066 $1,779 $71 $42 $7,460 $0 $7,460 
Credit cards
Performing$0 $0 $0 $0 $0 $0 $0 $61,969 $61,969 
Nonperforming0 0 0 0 0 0 0 342 342 
Total$0 $0 $0 $0 $0 $0 $0 $62,311 $62,311 
YTD Gross chargeoffs$0 $0 $0 $0 $0 $0 $0 $2,586 $2,586 
Total Loans$2,108,112 $2,084,260 $2,094,727 $1,089,697 $761,994 $1,805,156 $9,943,946 $1,817,832 $11,761,778 
Total YTD Gross Chargeoffs$737 $3,429 $9,835 $6,153 $1,011 $15,333 $36,498 $2,811 $39,309 

Delinquency. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the date of the scheduled payment.

Loan delinquency, including loans classified as nonaccrual, was as follows:
 As of September 30, 2025
(Dollars in thousands)30 – 59
days
past due		60 – 89
days
past due		> 89 days
past due		Total
past
due		CurrentTotal> 89 days
past due
and still
accruing
Loans       
Commercial & industrial$6,892 $989 $1,655 $9,536 $3,829,094 $3,838,630 $0 
Lease financing4,299 595 4,754 9,648 587,086 596,734 0 
Construction real estate0 0 1,120 1,120 626,840 627,960 0 
Commercial real estate-investor0 10,600 12,521 23,121 3,029,013 3,052,134 0 
Commercial real estate-owner1,453 379 7,477 9,309 986,927 996,236 0 
Residential real estate5,151 0 5,575 10,726 1,483,738 1,494,464 0 
Home equity2,408 518 1,941 4,867 931,108 935,975 0 
Installment1,019 471 499 1,989 107,775 109,764 0 
Credit card418 223 595 1,236 61,418 62,654 592 
Total$21,640 $13,775 $36,137 $71,552 $11,642,999 $11,714,551 $592 

 As of December 31, 2024
(Dollars in thousands)30 – 59
days
past due		60 – 89
days
past due		> 89 days
past due		Total
past
due		CurrentTotal> 89 days
past due
and still
accruing
Loans       
Commercial & industrial$4,521 $1,598 $2,470 $8,589 $3,807,269 $3,815,858 $0 
Lease financing3,096 3,085 3,386 9,567 588,478 598,045 19 
Construction real estate0 10,500 0 10,500 768,946 779,446 0 
Commercial real estate-investor0 0 17,360 17,360 3,076,024 3,093,384 0 
Commercial real estate-owner856 0 6,144 7,000 961,360 968,360 0 
Residential real estate6,217 154 5,968 12,339 1,449,945 1,462,284 0 
Home equity1,902 1,102 1,428 4,432 844,607 849,039 0 
Installment914 569 402 1,885 131,166 133,051 0 
Credit card450 196 342 988 61,323 62,311 342 
Total$17,956 $17,204 $37,500 $72,660 $11,689,118 $11,761,778 $361 

Financial Difficulty Modifications. FDM might result when a borrower is in financial distress, and may be in the form of principal forgiveness, an interest rate reduction, a term extension or an other-than-insignificant payment delay. In some cases, the Company might provide multiple types of modifications for a single loan. One type of modification, such as payment delay, may be granted initially, however, if the borrower continues to experience financial difficulty, another modification, such as a term extension and/or interest rate reduction might be granted. Loans included in the "combination" column in the table
17
that follows have more than one modification made to the same loan within the current reporting period. Additionally, modifications with a term extension or interest rate reduction are intended to reduce the borrower’s monthly payment, while modifications with a payment delay, which typically allow borrowers to make monthly payments or interest only payments for a period of time, are structured to cure the payment defaults by making delinquent payments due at maturity. Payment deferrals may be up to one year and have minimal financial impact since the deferred payments are paid at maturity.

The following tables provide the amortized cost basis of FDMs that were granted modifications during the respective periods:

Three months ended September 30, 2025
(Dollars in thousands)Principal forgivenessPayment delayTerm extensionInterest rate reductionCombination: Term extension and interest rate reductionTotalPercent of total class of loans
Commercial & industrial$0 $9,974 $0 $0 $0 $9,974 0.26 %
Residential real estate0 827 279 0 0 1,106 0.07 %
Home equity0 17 0 0 0 170.00 %
Total$0 $10,818 $279 $0 $0 $11,097 0.09 %

Three months ended September 30, 2024
(Dollars in thousands)Principal forgivenessPayment delayTerm extensionInterest rate reductionCombination: Term extension and interest rate reductionTotalPercent of total class of loans
Commercial & industrial$0 $0 $0 $0 $0 $0 0.00 %
Construction real estate0 0 10,500 0 0 10,500 1.31 %
Residential real estate0 921 4 0 0 925 0.07 %
Home equity0 48 0 0 0 480.01 %
Total$0 $969 $10,504 $0 $0 $11,473 0.10 %

Nine months ended September 30, 2025
(Dollars in thousands)Principal forgivenessPayment delayTerm extensionInterest rate reductionCombination: Term extension and interest rate reductionTotalPercent of total class of loans
Commercial & industrial$0 $11,674 $190 $0 $0 $11,864 0.31 %
Commercial real estate-investor0 474 0 0 0 474 0.02 %
Residential real estate0 2,971 509 0 0 3,480 0.23 %
Home equity0 861 0 0 0 8610.09 %
Total$0 $15,980 $699 $0 $0 $16,679 0.14 %

18
Nine months ended September 30, 2024
(Dollars in thousands)Principal forgivenessPayment delayTerm extensionInterest rate reductionCombination: Term extension and interest rate reductionTotalPercent of total class of loans
Commercial & industrial$0 $383 $15,860 $0 $0 $16,243 0.44 %
Construction real estate0 0 10,500 0 0 10,500 1.31 %
Residential real estate0 1,955 4 0 0 1,959 0.14 %
Home equity0 285 0 0 0 2850.03 %
Total$0 $2,623 $26,364 $0 $0 $28,987 0.25 %

The following table provides the financial effect of FDMs granted during the respective periods:
Three months ended September 30, 2025
(Dollars in thousands)Principal forgivenessWeighted average interest rate reductionWeighted average term extension
Residential real estate$0 0.00 %10.6 years
Total$0 0.00 %10.6 years
Three months ended September 30, 2024
(Dollars in thousands)Principal forgivenessWeighted average interest rate reductionWeighted average term extension
Construction real estate$0 0.00 %0.3 years
Residential real estate0 0.00 %3.0 years
Total$0 0.00 %0.3 years

Nine months ended September 30, 2025
(Dollars in thousands)Principal forgivenessWeighted average interest rate reductionWeighted average term extension
Commercial & industrial$0 0.00 %0.5 years
Residential real estate0 0.00 %7.4 years
Total$0 0.00 %5.5 years
Nine months ended September 30, 2024
(Dollars in thousands)Principal forgivenessWeighted average interest rate reductionWeighted average term extension
Commercial & industrial$0 0.00 %0.4 years
Construction real estate0 0.00 %0.3 years
Residential real estate0 0.00 %3.0 years
Total$0 0.00 %0.4 years

The Company has committed to lend no additional amounts to the borrowers who have been classified as FDM as of either September 30, 2025 or September 30, 2024. Additionally, there were six FDMs totaling $0.6 million that defaulted during the three months ended September 30, 2025, and 19 FDMs totaling $1.8 million that defaulted during the nine months ended September 30, 2025, that were classified as FDMs during the twelve months preceding the default date. There was one FDM with a balance of $0.1 million that defaulted during the three months ended September 30, 2024, and six FDMs with a balance of $0.5 million that defaulted during the nine months ended September 30, 2024, that were classified as FDMs during the twelve months preceding the default date.

19
The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table provides the performance of loans that have been modified during the twelve months preceding September 30, 2025 and 2024.
Twelve months ended September 30, 2025
(Dollars in thousands)Current30 – 59 days past due60 – 89 days past due> 89 days past dueTotal
Commercial & industrial$12,227 $0 $0 $367 $12,594 
Commercial real estate-investor474 0 0 0 474 
Residential real estate3,037 97 337 350 3,821 
Home equity955 17 0 98 1,070 
Total$16,693 $114 $337 $815 $17,959 

Twelve months ended September 30, 2024
(Dollars in thousands)Current30 – 59 days past due60 – 89 days past due> 89 days past dueTotal
Commercial & industrial$16,184 $0 $0 $0 $16,184 
Construction real estate10,500 0 0 0 10,500 
Residential real estate1,949 86 75 125 2,235 
Home equity299 0 0 0 299 
Total$28,932 $86 $75 $125 $29,218 

Nonaccrual loans. Loans are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful or when principal or interest payments are 90 days or more past due. Generally, loans are classified as nonaccrual due to the continued failure to adhere to contractual payment terms by the borrower, coupled with other pertinent factors. When a loan is classified as nonaccrual, the accrual of interest income is discontinued and previously accrued but unpaid interest is reversed. Any payments received while a loan is on nonaccrual status are applied as a reduction to the carrying value of the loan. A loan classified as nonaccrual may return to accrual status if none of the principal and interest is due and unpaid, and the Bank expects repayment of the remaining contractual principal and interest.

First Financial individually reviews all nonaccrual loan relationships greater than $250,000 to determine if a reserve is required based on the borrower’s overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. These reserves are based on discounted cash flows using the loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans.

The following table provides information on nonaccrual loans and leases:

September 30, 2025December 31, 2024
(Dollars in thousands)Nonaccrual loans with a related ACLNonaccrual loans with no related ACLTotal nonaccrualNonaccrual loans with a related ACLNonaccrual loans with no related ACLTotal nonaccrual
Nonaccrual loans  
Commercial & industrial$16,977 $6,855 $23,832 $1,939 $4,702 $6,641 
Lease financing4,542 1,343 5,885 1,982 4,245 6,227 
Construction real estate0 1,120 1,120 0 0 0 
Commercial real estate2,393 22,050 24,443 0 32,303 32,303 
Residential real estate0 16,452 16,452 0 16,700 16,700 
Home equity0 3,567 3,567 0 3,418 3,418 
Installment0 652 652 0 684 684 
Total nonaccrual loans$23,912 $52,039 $75,951 $3,921 $62,052 $65,973 


20
Interest income recognized on loans and leases while on nonaccrual was insignificant for the both the three and nine months ended September 30, 2025 and was $0.2 million for the three months ended September 30, 2024 and $0.8 million for the nine months ended September 30, 2024.

A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral. The following table presents the amortized cost basis of collateral dependent loans by class of loan.
September 30, 2025
Type of Collateral
(Dollar in thousands)Business
assets		Commercial real estateEquipmentLandResidential real estateOtherTotal
Class of loan
Commercial & industrial$7,973 $0 $8,275 $0 $0 $7,584 $23,832 
Lease financing00 5,885 0 0 0 5,885 
Construction real estate01,120 0 0 0 0 1,120 
Commercial real estate-investor013,168 0 0 47 0 13,215 
Commercial real estate-owner09,334 1,894 0 0 0 11,228 
Residential real estate00 0 0 16,452 0 16,452 
Home equity00003,567 0 3,567 
Installment00000 652 652 
Total$7,973 $23,622 $16,054 $0 $20,066 $8,236 $75,951 

December 31, 2024
Type of Collateral
(Dollar in thousands)Business
assets		Commercial real estateEquipmentLandResidential real estateOtherTotal
Class of loan
Commercial & industrial$2,527 $0 $1,434 $0 $0 $2,680 $6,641 
Lease financing00 6,227 0 0 0 6,227 
Commercial real estate-investor026,132 0 0 27 0 26,159 
Commercial real estate-owner04,250 1,894 0 0 0 6,144 
Residential real estate00 0 0 16,700 0 16,700 
Home equity00003,418 0 3,418 
Installment00000 684 684 
Total$2,527 $30,382 $9,555 $0 $20,145 $3,364 $65,973 

Lease financing - Lessor. First Financial originates both sales-type and direct financing leases, and the Company manages and reviews lease residuals in accordance with its credit policies. Payments are generally fixed, however, in some agreements, lease payments are based on a rate or index plus a spread. Sales-type lease contracts contain the ability to purchase the underlying equipment at lease maturity and profit or loss is recognized at lease commencement.  Direct financing leases are generally three to five years in length and may be extended at maturity, however, early cancellation may result in a fee to the borrower.  For direct financing leases, the net unearned income is deferred and amortized over the life of the lease.

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The components of the Company's net investments in direct financing and sales-type leases, which are included in Lease financing on the Consolidated Balance Sheets are as follows:

(Dollar in thousands)September 30, 2025December 31, 2024
Direct financing and sales-type leases
Lease receivables$585,978 $581,651 
Unguaranteed residual values10,756 16,394 
Total net investment in direct financing and sales-type leases$596,734 $598,045 

Interest income for direct financing and sales-type leases was $9.7 million and $9.3 million for the three months ended September 30, 2025 and September 30, 2024, respectively. Interest income for direct financing and sales-type leases was $28.5 million and $26.6 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

The remaining maturities of lease receivables were as follows:
(Dollars in thousands)Direct financing and Sales-type
Remainder of 2025$58,584 
2026201,815 
2027173,578 
2028112,015 
202969,106 
Thereafter48,770 
Total lease payments663,868 
Less: unearned income(77,890)
Net lease receivables$585,978 

OREO. OREO consists of properties acquired by the Company primarily through the loan foreclosure or repossession process, that results in partial or total satisfaction of problem loans.

Changes in OREO were as follows:
Three months endedNine months ended
 September 30,September 30,
(Dollars in thousands)2025202420252024
Balance at beginning of period$204 $30 $64 $106 
Additions
Commercial real estate0 0 0 0 
Residential real estate0 0 149 55 
Total additions0 0 149 55 
Disposals  
Commercial real estate0 0 0 0 
Residential real estate(55)0 (55)(106)
Total disposals(55)0 (55)(106)
Valuation adjustment  
Commercial real estate0 0 0 0 
Residential real estate(38)0 (47)(25)
Total valuation adjustment(38)0 (47)(25)
Balance at end of period$111 $30 $111 $30 
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NOTE 5:  ALLOWANCE FOR CREDIT LOSSES

Allowance for credit losses - loans and leases. The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The ACL is increased by provision expense and decreased by charge-offs, net of recoveries of amounts previously charged-off. First Financial's policy is to charge-off all or a portion of a loan when, in management's opinion, it is unlikely to collect the principal amount owed in full, either through payments from the borrower or a guarantor or from the liquidation of collateral. Similarly, upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. Cumulative recovery payments credited to the ACL for any loan do not exceed the amount charged-off. Accrued interest receivable on loans and leases, which totaled $52.2 million and $53.2 million as of September 30, 2025 and December 31, 2024, respectively, is excluded from the estimate of credit losses. 

Management estimates the allowance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience paired with economic forecasts provides the basis for the quantitatively modeled estimation of expected credit losses. First Financial adjusts its quantitative model, as necessary, to reflect conditions not already considered by the quantitative model. These adjustments are commonly known as the qualitative framework.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the ACL using the following methods:

Commercial and industrial – C&I loans include revolving lines of credit and term loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, leasehold improvements or other projects. C&I loans are generally underwritten individually and secured with the assets of the Company and/or the personal guarantee of the business owners. C&I loans also include ABL, equipment and leasehold improvement financing for franchisees in the quick service and casual dining restaurant sector, insurance premium financing and commission-based loans to insurance agents and brokers. ABL transactions typically involve larger commercial clients and are secured by specific assets, such as inventory, accounts receivable, machinery and equipment. In the franchise lending space, First Financial focuses on a limited number of restaurant concepts that have sound economics, low closure rates and strong brand awareness within specified local, regional or national markets. Within the insurance lending platform, First Financial serves insurance agents and brokers that are looking to maximize their book-of-business value and grow their agency business, in addition to commercial customers financing their insurance premiums.

Expected default activity in the C&I portfolio is based on forecasted manufacturing overtime hours and business bankruptcies. Changes in forecasted expectations for these economic variables could result in volatility in the Company’s ACL in future periods.

Lease financing – Lease financing consists of lease transactions for the acquisition of both new and used business equipment for commercial clients. Lease products may include tax leases, finance leases, lease lines of credit and interim funding. The credit underwriting for lease transactions includes detailed analysis of the lessee's industry and business model, nature of the equipment, equipment resale values, historical and projected cash flow analysis, secondary sources of repayment and guarantor, in addition to other considerations.

The ACL model for leases sources expected default rates from the C&I portfolio model. Therefore, changes in forecasted expectations for manufacturing overtime hours and business bankruptcies could result in volatility in the Company's ACL as it pertains to finance leases in future periods.

Construction real estate – Real estate construction loans are term loans to individuals, companies or developers used for the construction or development of a commercial or residential property for which repayment will be generated by the sale or permanent financing of the property. Generally, these loans are for construction projects that have been pre-sold, pre-leased or have secured permanent financing, as well as loans to real estate companies with significant equity invested in the project. An independent credit team underwrites construction real estate loans, which are managed by experienced lending officers and monitored through the construction phase by a centralized funding desk that manages loan disbursements.

The construction ACL model is adjusted for forecasted changes in rental vacancy rates in the Bank’s geographic footprint, CRE prices and median asking rent. Changes in forecasted expectations for these economic variables could result in volatility in the Company's ACL in future periods.

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Commercial real estate - owner & investor – Commercial real estate loans consist of term loans secured by a mortgage lien on real estate properties such as apartment buildings, office and industrial buildings and retail shopping centers. Additionally, the Company's franchise lending activities discussed in the "Commercial and Industrial" section often include the financing of real estate in addition to equipment. The credit underwriting for both owner-occupied and investor income producing real estate loans includes detailed market analysis, historical and projected cash flow analysis, appropriate equity margins, assessment of lessees and lessors, environmental risks and the type, age, condition and location of real estate, among other factors.

First Financial models owner-occupied and investor CRE separately when determining the ACL. For owner occupied CRE, the model is adjusted for forecasted changes in S&P 500 performance, CRE prices and business bankruptcies. The investor CRE loans model is adjusted by forecasted S&P 500 performance, the return on rental property (NCREIF Property Index) and business bankruptcies. Changes in forecasted expectations for these economic variables could result in volatility in the Company’s ACL in future periods.

Residential real estate – Residential real estate loans represent loans to consumers for the financing of a residence. These loans generally have a 15 to 30 year term and a fixed interest rate, but may have a shorter term to maturity or an adjustable interest rate. In most cases, these loans are extended to borrowers to finance their primary residence. First Financial sells residential real estate loan originations into the secondary market on both servicing retained and servicing released basis. Residential real estate loans are generally underwritten to secondary market lending standards, utilizing underwriting processes that rely on empirical data to assess credit risk as well as analysis of the borrower's ability to repay their obligations, credit history, the amount of any down payment and the market value or other characteristics of the property. First Financial also offers a residential mortgage product that features similar borrower credit characteristics but a more streamlined underwriting process than typically required to sell to government-sponsored enterprises and thus is retained on the Consolidated Balance Sheets.

The residential real estate ACL model is adjusted for forecasted changes in mortgage debt service ratio, home sales and disposable income. Changes in forecasted expectations for these economic variables could result in volatility in the Company's ACL in future periods.

Home equity – Home equity lending includes both term loans and revolving lines of credit secured by a first or second lien on the borrower’s residence. Home equity lending underwriting considerations include the borrower's credit history as well as debt-to-income and loan-to-value policy limits.

The home equity ACL model is adjusted for forecasted changes in personal bankruptcies and outstanding consumer credit. Changes in forecasted expectations for these economic variables could result in volatility in the Company's ACL in future periods.

Installment – Installment lending consists of consumer loans not secured by real estate, including loans secured by automobiles and unsecured personal loans.

The installment ACL model is adjusted for forecasted changes in outstanding consumer credit and CPI. Changes in forecasted expectations for these economic variables could result in volatility in the Company's ACL in future periods.

Credit card – Credit card lending consists of secured and unsecured revolving lines of credit to consumer and business customers. Credit card lines are generally available for an indefinite period of time as long as the borrower's credit characteristics do not materially or adversely change, but lines are unconditionally cancellable by the Company at any time.

The credit card ACL model is adjusted for forecasted changes in prime rates, outstanding consumer credit and household mortgage debt service ratio. Changes in forecasted expectations for these economic variables could result in volatility in the Company's ACL in future periods.

The Company utilized the Moody's September baseline forecast as its R&S forecast in the quantitative model. For reasonableness, the Company also considered the impact to the model from alternative, more adverse economic forecasts and alternative prepayment speeds. These alternative analyses were utilized to inform the Company's qualitative adjustments. Additionally, First Financial considered its credit exposure to certain industries believed to be at risk for future credit stress, such as franchise, office, hotel and investor commercial real estate lending when making qualitative adjustments to the ACL model.

First Financial's ACL is influenced by loan volumes, risk rating migration or delinquency status, and other conditions impacting loss expectations, such as reasonable and supportable forecasts of economic conditions. The ACL as of September 30, 2025 increased from year end due primarily due to higher individually evaluated reserves and an increase in qualitative reserves.
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Changes in the allowance by loan category were as follows:
 Three months ended September 30, 2025
(Dollars in thousands)Commercial & industrialLease financingConstruction real estateCommercial real estateResidential real estateHome EquityInstallmentCredit cardTotal
Allowance for credit losses:        
Balance at beginning of period$53,395 $13,907 $18,908 $34,133 $17,089 $15,820 $2,808 $2,462 $158,522 
Provision for credit losses8,968 475 (3,034)2,147 (1,567)454 385 784 8,612 
Gross charge-offs(2,165)(298)(245)(3,105)0 (92)(1,194)(577)(7,676)
Recoveries202 291 0 1,138 58 94 609 66 2,458 
Total net charge-offs(1,963)(7)(245)(1,967)58 2 (585)(511)(5,218)
Ending allowance for credit losses$60,400 $14,375 $15,629 $34,313 $15,580 $16,276 $2,608 $2,735 $161,916 

 Three months ended September 30, 2024
(Dollars in thousands)Commercial & industrialLease financingConstruction real estateCommercial real estateResidential real estateHome EquityInstallmentCredit cardTotal
Allowance for credit losses:        
Balance at beginning of period$49,312 $13,919 $19,678 $34,022 $18,415 $13,890 $4,928 $2,021 $156,185 
Provision for credit losses5,698 1,502 1 770 163 618 637 541 9,930 
Loans charged off(5,471)(368)0 (261)(60)(90)(1,510)(768)(8,528)
Recoveries434 11 0 25 22 240 421 91 1,244 
Total net charge-offs(5,037)(357)0 (236)(38)150 (1,089)(677)(7,284)
Ending allowance for credit losses$49,973 $15,064 $19,679 $34,556 $18,540 $14,658 $4,476 $1,885 $158,831 

  
Nine months ended September 30, 2025
(Dollars in thousands)Commercial & industrialLease financingConstruction real estateCommercial real estateResidential real estateHome equityInstallmentCredit cardTotal
Allowance for credit losses:        
Beginning balance$49,987 $13,079 $19,216 $35,721 $17,822 $14,774 $3,564 $2,628 $156,791 
Provision for credit losses25,065 3,323 (3,342)465 (2,350)1,468 791 1,417 26,837 
Loans charged off(15,339)(2,358)(245)(3,105)(16)(278)(3,635)(1,540)(26,516)
Recoveries687 331 0 1,232 124 312 1,888 230 4,804 
Total net charge-offs(14,652)(2,027)(245)(1,873)108 34 (1,747)(1,310)(21,712)
Ending allowance for credit losses$60,400 $14,375 $15,629 $34,313 $15,580 $16,276 $2,608 $2,735 $161,916 
 Nine months ended September 30, 2024
(Dollars in thousands)Commercial & industrialLease financingConstruction real estateCommercial real estateResidential real estateHome equityInstallmentCredit cardTotal
Allowance for credit losses:        
Beginning balance$44,319 $12,365 $11,003 $34,903 $18,088 $13,322 $4,888 $2,545 $141,433 
Provision for credit losses15,137 3,189 8,676 5,035 500 1,135 4,583 1,251 39,506 
Loans charged off(10,315)(561)0 (5,582)(131)(237)(5,780)(2,094)(24,700)
Recoveries832 71 0 200 83 438 785 183 2,592 
Total net charge-offs(9,483)(490)0 (5,382)(48)201 (4,995)(1,911)(22,108)
Ending allowance for credit losses$49,973 $15,064 $19,679 $34,556 $18,540 $14,658 $4,476 $1,885 $158,831 

Allowance for credit losses - unfunded commitments. First Financial estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life consistent with the Company's ACL methodology for loans and leases.

First Financial determined the adequacy of this reserve based upon an evaluation of the unfunded credit facilities, which included consideration of historical commitment utilization experience, credit risk ratings and historical loss rates, consistent with the Company's ACL methodology at the time.

The ACL on unfunded commitments was $17.6 million as of September 30, 2025 and $16.9 million as of December 31, 2024. Additionally, First Financial recorded provision expense related to the allowance on unfunded commitments of $0.5 million for the three months ended September 30, 2025 and $0.7 million for the nine months ended September 30, 2025. First Financial
25
recorded provision expense related to the allowance on unfunded commitments of $0.7 million for the three months ended September 30, 2024 and provision recapture related to the allowance on unfunded commitments of $1.3 million for the nine months ended September 30, 2024.

NOTE 6:  LEASES - LESSEE

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. For contracts where First Financial is a lessee, the recipient of the right to control, substantially all of those agreements are for real estate property for branches, ATM locations and office space.

Substantially all of the Company's lessee contracts are classified as operating leases. Under Topic 842, operating lease agreements are required to be recognized on the Consolidated Balance Sheets as an ROU asset and a corresponding lease liability. The Company's right to use an asset over the life of a lease is recorded as an ROU asset in Accrued interest and other assets on the Consolidated Balance Sheets and was $45.9 million and $49.9 million at September 30, 2025 and December 31, 2024, respectively. Certain adjustments to the ROU asset may be required for items such as initial direct costs paid or incentives received. First Financial recorded a $55.4 million and $59.8 million lease liability in Accrued interest and other liabilities on the Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, respectively.

First Financial has operating and finance leases for land, office space and banking centers. These leases are generally for periods of 5 to 30 years with various renewal options. Certain renewal options are included in the measurement of the ROU assets and lease liabilities if they are reasonably certain to be exercised. Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. The Company has elected not to recognize short-term leases (terms of one year or less) as lease liabilities and right-of use assets; related expenses are recognized on a straight-line basis over the lease term. Additionally, the Company has elected to apply the risk-free discount rate for leases in which there is no implicit discount rate.

First Financial has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated. First Financial does not have any material sub-lease agreements.

The components of lease expense were as follows:
Three months endedNine months ended
September 30,September 30,
(Dollars in thousands)2025202420252024
Operating lease cost$1,988 $2,010 $5,996 $6,088 
Finance lease cost:
Amortization of right-of-use assets25 27 76 82 
Interest on lease liabilities13 14 40 44 
Variable lease cost759 419 2,279 1,956 
Total lease cost$2,785 $2,470 $8,391 $8,170 

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Future minimum commitments due under these lease agreements as of September 30, 2025 are as follows:
(Dollars in thousands)Operating leasesFinance leases
2025 (remaining three months)$2,051 $37 
20268,042 152 
20277,668 155 
20287,552 159 
20297,100 160 
Thereafter36,365 807 
Total lease payments68,778 1,470 
Less imputed interest(13,359)(296)
Total$55,419 $1,174 

Supplemental balance sheet information related to leases was as follows:
(Dollars in thousands)September 30, 2025December 31, 2024
Operating leases
Operating lease right-of-use assets$45,850 $49,895 
Operating lease liabilities55,419 59,801 
Finance leases
Premises and equipment$935 $1,284 
Long-term debt1,174 1,520 
Weighted-average remaining lease term
Operating leases11.2 years11.5 years
Finance leases10.4 years11.8 years
Weighted-average discount rate
Operating leases3.50 %3.48 %
Finance leases4.41 %3.85 %

Supplemental cash flow information at September 30, 2025 and 2024 related to leases was as follows:
Three months endedNine months ended
September 30,September 30,
(Dollars in thousands)2025202420252024
Cash paid for amounts included in the measurement of lease liabilities 
Operating cash flows from operating leases$2,121 $2,095 $6,338 $6,338 
Operating cash flows from finance leases13 14 40 44 
Financing cash flows from finance leases25 23 73 68 
ROU assets obtained in exchange for lease obligations
Operating leases0 (46)399 1,713 
Finance leases0 0(272)0

NOTE 7: OPERATING LEASES - LESSOR

First Financial provides financing for various types of equipment through a variety of leasing arrangements. Operating leases are carried at cost less accumulated depreciation in the Consolidated Balance Sheets. Operating leases were $214.7 million and $209.1 million at September 30, 2025 and December 31, 2024, respectively, net of accumulated depreciation of $149.3 million and $93.6 million, respectively. The Company recorded lease income of $19.4 million and $14.6 million related to lease
27
payments for operating leases in Leasing business income in the Consolidated Statements of Income for the three months ended September 30, 2025 and 2024, respectively. The Company recorded lease income of $56.0 million and $39.1 million related to lease payments for operating leases in Leasing business income in the Consolidated Statements of Income for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense related to operating lease equipment was $13.9 million and $11.9 million for the three months ended September 30, 2025 and 2024, respectively. Depreciation expense related to operating lease equipment was $39.9 million and $31.8 million for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense related to operating lease equipment is included in Leasing business expense in the Consolidated Statements of Income.

First Financial performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. First Financial recognized no impairment losses associated with operating lease assets for the nine months ended September 30, 2025 or 2024. Recognized impairment losses, if any, would be recorded in Leasing business income in the Consolidated Statements of Income.

The future lease payments receivable from operating leases as of September 30, 2025 are as follows:
(Dollars in thousands)Undiscounted cash flows
2025 (remaining three months)$17,823 
202663,651 
202745,980 
202826,308 
202914,288 
Thereafter5,562 
Total operating lease payments$173,612 

NOTE 8:  GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill. Assets and liabilities acquired in a business combination are recorded at their estimated fair values as of the acquisition date. The excess of the purchase price of the acquisition over the fair value of net assets acquired is recorded as goodwill.

Changes in the carrying amount of goodwill for the three and nine months ended September 30, 2025 and September 30, 2024 were as follows:
Three months endedNine months ended
September 30,September 30,
(Dollars in thousands)2025202420252024
Balance at beginning of period$1,007,656 $1,007,656 $1,007,656 $1,005,868 
Goodwill resulting from business combinations0 0 0 1,788 
Balance at end of period$1,007,656 $1,007,656 $1,007,656 $1,007,656 

In the first quarter of 2024, First Financial recorded $1.8 million of goodwill related to the acquisition of Agile Premium Finance. Agile specializes in lending to commercial customers to finance insurance premiums. These loans are generally secured by the unearned premiums on the underlying insurance policies and are typically short in duration. This acquisition is consistent with First Financial's approach of adding niche financial services to its line-up of core banking services and will complement First Financial's existing specialty lending business. The measurement period for recording adjustments to the fair value of assets and liabilities acquired in the Agile acquisition ended in February 2025.

Goodwill is evaluated for impairment on an annual basis as of October 1 of each year, or whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. First Financial performed its most recent annual impairment test as of October 1, 2024 and no impairment was indicated. As of September 30, 2025, no events or changes in circumstances indicated that the fair value of the reporting unit was below its carrying value.

Other intangible assets. Other intangible assets consist primarily of core deposit intangibles, customer lists, mortgage servicing rights and other miscellaneous intangibles, such as purchase commissions, non-compete agreements and trade name intangibles.
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Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized on an accelerated basis over their estimated useful lives. First Financial's core deposit intangibles have an estimated remaining life of 2.5 years.

First Financial recorded a customer list intangible asset in conjunction with the Agile, Summit and Bannockburn acquisitions to account for the obligation or advantage on the part of either the Company or customers to continue pre-existing relationships subsequent to the merger. These customer list intangibles are being amortized on a straight-line basis over their estimated useful lives. The Agile customer list was $2.4 million at September 30, 2025 and $2.5 million at December 31, 2024, and is being amortized over an estimated remaining life of 11.4 years. The Summit customer list was $20.7 million and $22.6 million at September 30, 2025 and December 31, 2024, respectively, and is being amortized over an estimated remaining life of 8.3 years. The Bannockburn customer list was $17.6 million and $20.3 million at September 30, 2025 and December 31, 2024, respectively, and is being amortized over an estimated remaining life of 4.9 years.   

Mortgage servicing rights represent the value of servicing fees First Financial expects to receive from the servicing responsibilities it retains when selling fixed and adjustable-rate residential mortgage loans. In those sales, First Financial retains servicing responsibilities and provides certain standard representations and warranties; however, the investors have no recourse to the Company’s other assets for failure of debtors to pay when due. First Financial receives servicing fees based on a percentage of the outstanding balance. When First Financial sells mortgage loans with servicing rights retained, these servicing rights are initially recorded at estimated fair value. First Financial has selected the “amortization method” as permissible within GAAP, whereby the servicing rights capitalized are amortized in proportion to and over the period of estimated future servicing income with respect to the underlying loan. At the end of each reporting period, the carrying value of MSRs is assessed for impairment with a comparison to fair value. MSRs are carried at the lower of their amortized cost or fair value. The amortization of MSRs is included within other noninterest income in the Consolidated Statements of Income.

Amortization expense recognized on other intangible assets for the three months ended September 30, 2025 and September 30, 2024 was $3.5 million and $3.3 million, which included MSR amortization of $1.1 million and $0.9 million, respectively. Amortization expense recognized on other intangible assets for the nine months ended September 30, 2025 and September 30, 2024 was $10.1 million and $9.7 million, which included MSR amortization of $3.0 million and $2.6 million, respectively.

The gross carrying amount and accumulated amortization of other intangible assets at September 30, 2025 and December 31, 2024 were as follows:
(Dollars in thousands)September 30, 2025December 31, 2024
Gross
carrying
amount		Accumulated
amortization		Gross
carrying
amount		Accumulated
amortization
Core deposit intangibles$41,750 $(34,482)$41,750 $(32,302)
Customer lists72,278 (31,551)72,278 (26,822)
Other9,269 (3,570)9,381 (3,416)
Mortgage servicing rights30,517 (10,414)27,217 (8,795)
Total$153,814 $(80,017)$150,626 $(71,335)

NOTE 9:  BORROWINGS

Short-term borrowings, or borrowings that mature in less than one year, on the Consolidated Balance Sheets include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, federal funds purchased, overnight advances from the FHLB and a short-term line of credit.

All repurchase agreements are subject to terms and conditions agreed to by the Bank and the client. To secure its liability to the client, the Bank is authorized to sell or repurchase U.S. Treasury, government agency and mortgage-backed securities. As of both September 30, 2025 and December 31, 2024, the Bank had no securities sold under agreements to repurchase.

The Company had $550.0 million and $625.0 million in short-term borrowings with the FHLB at September 30, 2025 and December 31, 2024, respectively. These short-term borrowings are used to manage normal liquidity needs and support the Company's asset and liability management strategies. Additionally, at September 30, 2025 and December 31, 2024, other short-
29
term borrowings included $45.2 million and $130.5 million, respectively, of collateral owed to counterparty banks by First Financial. First Financial had no federal funds purchased at September 30, 2025 or December 31, 2024.

First Financial also has a $40.0 million short-term credit facility with an unaffiliated bank that matures in December 2025, which is included in short-term borrowings. This facility has a variable interest rate and provides First Financial additional liquidity, if needed, for various corporate activities including the repurchase of First Financial common stock and the payment of dividends to shareholders. As of both September 30, 2025 and December 31, 2024, First Financial had no outstanding balance on this facility. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this facility as of both September 30, 2025 and December 31, 2024. This credit facility also required First Financial to pledge as collateral the Bank's common stock where the lender is granted a security interest in this collateral.

The following is a summary of First Financial's short-term borrowings:

(Dollars in thousands)September 30, 2025December 31, 2024
FHLB short-term borrowings$550,000 $625,000 
Other short-term borrowings45,167 130,452 
Total short-term borrowings$595,167 $755,452 

First Financial had $221.8 million and $347.5 million of long-term debt as of September 30, 2025 and December 31, 2024 respectively, which included subordinated notes, capital lease liabilities and an interest free loan with a municipality.

The following is a summary of First Financial's long-term debt:
 September 30, 2025December 31, 2024
(Dollars in thousands)AmountAverage rateAmountAverage rate
Subordinated notes$194,962 8.66 %$314,619 5.43 %
Unamortized debt issuance costs(953)N/A(1,227)N/A
Notes issued in conjunction with acquisition of property and equipment25,865 5.30 %31,822 4.95 %
Capital lease liability1,174 4.41 %1,520 3.85 %
Capital loan with municipality775 0.00 %775 0.00 %
Total long-term debt$221,823 8.25 %$347,509 5.39 %

In 2015, First Financial issued $120.0 million of subordinated notes, which had a fixed interest rate of 5.13% payable semiannually and matured in August 2025. The matured notes were redeemed and therefore are no longer included in the Consolidated Balance Sheets as of September 30, 2025.

In April 2020, First Financial issued $150.0 million of fixed to floating rate subordinated notes. These subordinated notes had an initial fixed interest rate of 5.25% to, but excluding, May 15, 2025, payable semi-annually in arrears. From, and including, May 15, 2025, the interest rate on the subordinated notes reset quarterly to a floating rate per annum equal to a benchmark rate, currently the three-month term SOFR, plus 509 basis points, payable quarterly in arrears. As of September 30, 2025, the interest rate was 9.30%. The subordinated notes mature on May 15, 2030. These notes became redeemable by the Company in whole or in part beginning with the interest payment date of May 15, 2025. Subordinated notes are included in Long-term debt on the Consolidated Balance Sheets and treated as Tier 2 capital for regulatory capital purposes, subject to certain limitations. When subordinated notes are within five years of maturity, the tier 2 capital eligibility reduces by 20% each year. This subordinated debt issued in April 2020 that matures in May 2030 is eligible to be treated as Tier 2 capital for 80% of its original issuance amount at September 30, 2025 for regulatory capital purposes.

In addition, First Financial acquired $49.5 million of variable rate subordinated notes in the MSFG merger that were issued to previously formed trusts in exchange for the trust proceeds. These notes were recorded at fair value at the date of the MSFG merger and the Consolidated Balance Sheets include $45.0 million and $44.6 million for these notes at September 30, 2025 and December 31, 2024, respectively. Interest on the acquired subordinated notes is payable quarterly, in arrears, and the Company has the option to defer interest payments for a period not to exceed 20 consecutive quarters. These acquired subordinated notes mature 30 years after the date of original issuance and may be called at par following the 5 year anniversary of issuance. The original issue dates for these variable rate subordinated notes ranged from December 2002 to June 2007, and have maturity
30
dates ranging from December 2032 to June 2037. These variable rate subordinated notes are callable as of September 30, 2025 and are treated as Tier 1 capital for regulatory capital purposes.

Additionally, long-term borrowings included $25.9 million and $31.8 million of term notes, both with and without recourse, with an average interest rate of 5.30% and 4.95% at September 30, 2025 and December 31, 2024, respectively. These term notes were used to finance equity investments in the purchase of equipment to be leased to customers.

NOTE 10:  DERIVATIVES

First Financial maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce certain risks related to interest rate, prepayment, economic and foreign currency volatility. Additionally, First Financial holds derivative instruments for the benefit of its commercial customers. The Company does not enter into unhedged speculative derivative positions. The Company’s interest rate risk management strategy involves modifying the repricing characteristics of certain financial instruments so that changes in interest rates do not adversely affect First Financial’s net interest margin and cash flows. Derivative instruments that the Company may use as part of its interest rate risk management strategy include interest rate caps, floors, swaps, and foreign exchange contracts, to meet the needs of its clients while managing the interest and currency rate risk associated with certain transactions. First Financial may also utilize interest rate swaps to manage the interest rate risk profile of the Company with changes in value reported in Accumulated other comprehensive income (loss).

Interest rate payments are exchanged with counterparties based on the notional amount established in the interest rate agreement. As only interest rate payments are exchanged, the cash requirements and credit risk associated with interest rate swaps are significantly less than the notional amount and the Company’s credit risk exposure is limited to the market value of the instruments.

First Financial manages market value credit risk through counterparty credit policies including a review of total derivative notional position to total assets, total credit exposure to total capital and counterparty credit exposure risk.

The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position. The Company anticipates that the counterparties will be able to fully satisfy the obligations under the agreements. All of the contracts to which the Company is a party settle monthly, quarterly or semi-annually. In addition, First Financial obtains collateral above certain thresholds of the fair value of derivatives for each dealer counterparty based upon their credit standing and the Company has netting agreements with the dealers with which it does business.

Interest rate client derivatives. First Financial utilizes interest rate swaps as a means to offer commercial borrowers fixed rate funding while providing the Company with floating rate assets. These derivatives are classified as free-standing instruments with the revaluation gain or loss recorded in Client derivative fees in the Consolidated Statements of Income. While these derivatives represent economic hedges, they do not qualify as hedges for accounting purposes.

At September 30, 2025, for the interest rate client derivatives, the Company had a total counterparty notional amount outstanding of $2.3 billion, spread among seven counterparties, with an estimated fair value, including accrued interest, of $29.4 million. At December 31, 2024, the Company had interest rate client derivatives with a total counterparty notional amount outstanding of $2.2 billion, spread among six counterparties, with an estimated fair value of $91.7 million.

First Financial monitors its derivative credit exposure to borrowers by monitoring the creditworthiness of the related loan customers through the Company's normal credit review processes. Additionally, the Company monitors derivative credit risk exposure related to problem loans through its ACL Committee. First Financial considers the market value of a derivative instrument to be part of the carrying value of the related loan for these purposes as the borrower is contractually obligated to pay First Financial this amount in the event the derivative contract is terminated.

In connection with its use of derivative instruments, First Financial and its counterparties may be required to post cash collateral to offset the market position of the derivative instruments. First Financial maintains the right to offset these derivative positions with the collateral posted against them by or with the relevant counterparties.

Foreign exchange contracts. First Financial enters into foreign exchange derivative contracts for the benefit of commercial customers to hedge their exposure to foreign currency fluctuations. Similar to the hedging of interest rate risk from interest rate client derivative contracts, First Financial also enters into foreign exchange contracts with major financial institutions to economically hedge a substantial portion of the exposure from client driven foreign exchange activity. These derivatives are classified as free-standing instruments with the revaluation gain or loss recorded in Foreign exchange income in the Consolidated Statements of Income. The Company has risk limits and internal controls in place to help ensure excessive risk is
31
not being taken when providing this service to customers. These controls include a determination of currency volatility and credit equivalent exposure on these contracts. While these derivatives represent economic hedges, they do not qualify as hedges for accounting purposes.

At September 30, 2025, for foreign exchange contracts, the Company had total counterparty notional amount outstanding of $7.5 billion spread among four counterparties, with an estimated fair value of $17.1 million. At December 31, 2024, the Company had total counterparty notional amounts outstanding of $5.8 billion spread among four counterparties, with an estimated fair value of $29.0 million.

In connection with its use of foreign exchange contracts, First Financial and its counterparties may be required to post cash collateral to offset the market position of the derivative instruments. First Financial maintains the right to offset these derivative positions with the collateral posted against them by or with the relevant counterparties.

In 2024, a single foreign exchange trade was mutually terminated and the counterparty was not able to immediately fully satisfy the obligation under the agreement. As such, at December 31, 2024, a $45.0 million receivable was established in Accrued interest and other assets on the Consolidated Balance Sheet, and the Company considers this receivable a classified asset for asset quality purposes. At September 30, 2025, there was $37.0 million outstanding related to this receivable.

Commodity contracts. In August of 2024, First Financial began entering into financially settled commodity derivative contracts for the benefit of commercial customers to hedge their exposure to various commodity price fluctuations. Similar to the hedging of interest rate risk from interest rate client derivative and foreign exchange contracts, First Financial also enters into commodity contracts with major financial institutions to economically hedge a substantial portion of the exposure from client driven commodity derivative activity. These derivatives are classified as free-standing instruments with the revaluation gain or loss recorded in Client derivative fees in the Consolidated Statements of Income. The Company has risk limits and internal controls in place to help ensure excessive risk is not being taken when providing this service to customers. These controls include monitoring of commodity volatility and credit exposure on these contracts. While these derivatives represent economic hedges, they do not qualify as hedges for accounting purposes.

At September 30, 2025, for commodities contracts, the Company had total counterparty notional amount outstanding of $21.8 million with four counterparties and an estimated fair value, including commodities receivable, of $0.2 million. At December 31, 2024, the Company had total counterparty notional amount outstanding of $1.7 million with three counterparties and an estimated fair value of $0.2 million.

Cash flow hedges. First Financial enters into interest rate collars and floors, which are designated as cash flow hedges, to mitigate interest rate risk on variable-rate commercial loan pools. As of both September 30, 2025 and December 31, 2024, these hedges were determined to be effective and are expected to remain effective during the remaining terms. Changes in the fair value of cash flow hedges included in the assessment of hedge effectiveness are recorded in AOCI and reclassified from AOCI to current period earnings when the hedged item affects earnings. Reclassified gains and losses on interest rate contracts related to C&I loans are recorded within interest income in the Consolidated Statements of Income.

The structure of the interest rate collars is such that First Financial pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, First Financial receives an incremental amount if the index falls below the floor rate. No payments are required if the collar index falls between the cap and floor rates.

The structure of First Financial's interest rate floors is such that First Financial receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate.

The notional value of the Company's cash flow hedges was $1.0 billion at September 30, 2025, with a $0.2 million gain recorded in AOCI in the Consolidated Balance Sheet. As of September 30, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is 39 months. It is estimated that $0.7 million will be reclassified from OCI to interest income during the next 12 months.

At December 31, 2024, the notional value of the Company's cash flow hedges was $1.0 billion, with a $1.2 million loss recorded in AOCI in the Consolidated Balance Sheet.

The effect of derivative instruments in cash flow hedging relationships on the Consolidated Statements of Income for the three months ended September 30, were as follows:

32
Derivatives in Cash Flow Hedging RelationshipLocation of Gain or (Loss) Reclassified from AOCI into incomeGain (loss) reclassified from AOCI on DerivativesGain (loss) recognized in OCI on Derivatives
(Dollars in thousands)September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Interest rate contractsInterest income/(expense)$(199)$(199)$(608)$3,116 

The effect of derivative instruments in cash flow hedging relationships on the Consolidated Statements of Income for the nine months ended September 30, were as follows:

Derivatives in Cash Flow Hedging RelationshipLocation of Gain or (Loss) Reclassified from AOCI into incomeGain (loss) reclassified from AOCI on DerivativesGain (loss) recognized in OCI on Derivatives
(Dollars in thousands)September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Interest rate contractsInterest income/(expense)$(596)$(596)$1,386 $(1,433)

The following table details the classification and amounts of interest rate derivatives, foreign exchange contracts and cash flow hedges recognized in the Consolidated Balance Sheets:
  
September 30, 2025December 31, 2024
 Estimated fair valueEstimated fair value
(Dollars in thousands)Notional
amount
Gain (1)
Loss (2)
Notional
amount
Gain (1)
Loss (2)
Derivatives not designated as qualifying hedging instruments
Interest rate derivatives - instruments associated with loans      
Matched interest rate contracts with borrowers$2,295,929 $22,169 $(49,282)$2,211,542 $6,849 $(95,341)
Matched interest rate contracts with counterparty2,295,929 49,209 (22,133)2,211,542 95,292 (6,849)
Foreign exchange contracts
Matched foreign exchange contracts with customers7,464,741 122,473 (105,350)5,772,686 161,686 (132,732)
Match foreign exchange contracts with counterparty7,407,315 105,350 (122,473)5,741,839 132,732 (161,686)
Commodity contracts
Matched commodity with client21,861 968(742)1,717 0(158)
Matched commodity with counterparty21,770 742(968)1,701 158 0
Total derivatives not designated as qualifying hedging instruments19,507,545 300,911 (300,948)15,941,027 396,717 (396,766)
Derivatives designated as qualifying hedging instruments
Cash flow hedges
Interest rate collars and floors1,000,000 1,037 0 1,000,000 387 (619)
Total derivatives designated as qualifying hedging instruments1,000,000 1,037 0 1,000,000 387 (619)
Total$20,507,545 $301,948 $(300,948)$16,941,027 $397,104 $(397,385)
(1) Derivative assets are included in Accrued interest and other assets in the Consolidated Balance Sheets.
(2) Derivative liabilities are included in Accrued interest and other liabilities in the Consolidated Balance Sheets.

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The following tables disclose the gross and net amounts of interest rate derivatives, foreign exchange contracts, commodities and cash flow hedges that are offset in the Consolidated Balance Sheets or that are subject to enforceable master netting arrangements:
September 30, 2025
Gross Amounts Not offset in Consolidated Balance Sheet
(Dollars in thousands)
Gross amounts of recognized assets (2)
Gross amounts offset in the Consolidated Balance SheetsNet amounts presented in the Consolidated Balance SheetsFinancial instruments recognized amounts
Cash or financial instrument collateral (3)
Net amount
Interest rate contracts (1)
$71,379 $0 $71,379 $(40,388)$(20,080)$10,911 
Foreign exchange contracts285,249 0 285,249 (85,786)(19,563)179,900 
Commodity contracts1,568 0 1,568 (574)0 994 
Cash flow hedges1,037 0 1,037 0 (1,037)0 
Total$359,233 $0 $359,233 $(126,748)$(40,680)$191,805 
September 30, 2025
Gross Amounts Not offset in Consolidated Balance Sheet
(Dollars in thousands)
Gross amounts of recognized liabilities (2)
Gross amounts offset in the Consolidated Balance SheetsNet amounts presented in the Consolidated Balance SheetsFinancial instruments recognized amounts
Cash or financial instrument collateral (3)
Net amount
Interest rate contracts (1)
$71,415 $0 $71,415 $(22,947)$0 $48,468 
Foreign exchange contracts227,825 0 227,825 (104,004)0 123,821 
Commodity contracts1,453 0 1,453 (467)(593)393 
Cash flow hedges0 0 0 0 0 0 
Total$300,693 $0 $300,693 $(127,418)$(593)$172,682 
December 31, 2024
Gross Amounts Not offset in Consolidated Balance Sheet
(Dollars in thousands)
Gross amounts of recognized assets (2)
Gross amounts offset in the Consolidated Balance SheetsNet amounts presented in the Consolidated Balance SheetsFinancial instruments recognized amounts
Cash or financial instrument collateral (3)
Net amount
Interest rate contracts (1)
$102,141 $0 $102,141 $(721)$(98,510)$2,910 
Foreign exchange contracts325,266 0 325,266 (131,530)0 193,736 
Commodity contracts174 0 174 0 0 174 
Cash flow hedges387 0 387 (387)0 0 
Total$427,968 $0 $427,968 $(132,638)$(98,510)$196,820 

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December 31, 2024
Gross Amounts Not offset in Consolidated Balance Sheet
(Dollars in thousands)
Gross amounts of recognized liabilities (2)
Gross amounts offset in the Consolidated Balance SheetsNet amounts presented in the Consolidated Balance SheetsFinancial instruments recognized amounts
Cash or financial instrument collateral (3)
Net amount
Interest rate contracts (1)
$102,150 $0 $102,150 $(3,896)$0 $98,254 
Foreign exchange contracts294,419 0 294,419 (115,757)(16,976)161,686 
Commodity contracts158 0 158 0 0 158 
Cash flow hedges619 0 619 (387)0 232 
Total$397,346 $0 $397,346 $(120,040)$(16,976)$260,330 
(1) Includes accrued interest receivable.
(2) Amount does not include IRLCs because these instruments are not subject to master netting or similar arrangements
(3) Amount of collateral received is an offset to asset positions or pledged as an offset of liability positions

The following table details the derivative financial instruments and the average remaining maturities at September 30, 2025:
(Dollars in thousands)Notional
amount		Average
maturity
(years)		Fair
value
Interest rate contracts   
Receive fixed, matched interest rate contracts with borrower$2,295,929 3.8$(27,113)
Pay fixed, matched interest rate contracts with counterparty2,295,929 3.827,076 
Foreign exchange contracts
Foreign exchange contracts-pay USD7,464,741 0.617,123 
Foreign exchange contracts-receive USD7,407,315 0.6(17,123)
Commodities contracts
Client commodity contracts21,861 0.5226 
Counterparty commodity contracts21,770 0.5(226)
Total client derivatives19,507,545 1.3(37)
Cash flow hedges
Interest rate collars and floors on loan pools1,000,000 2.01,037 
Total cash flow hedges1,000,000 2.01,037 
Total$20,507,545 1.4$1,000 

At September 30, 2025, the derivative collateral owed by the Company to counterparty banks was $24.8 million with $11.4 million restricted within cash and due from banks on the Company's Consolidated Balance Sheet and $36.2 million recorded in short-term borrowings. Derivative collateral owed by the Company to the counterparty banks at December 31, 2024 was $115.4 million with $15.0 million restricted within cash and due from banks and $130.5 million recorded in short-term borrowings.

Credit derivatives. In conjunction with participating interests in commercial loans, First Financial periodically enters into risk participation agreements with counterparties whereby First Financial either assumes or sells a portion of the credit exposure associated with an interest rate swap on the participated loan in exchange for a fee. Under these agreements, First Financial will either make a payment to or receive a payment from the counterparty if the loan customer defaults on its obligation to perform under the interest rate swap contract. The total notional value of the purchased risk agreements totaled $193.5 million as of September 30, 2025 and $204.8 million as of December 31, 2024. The total notional value of the sold risk agreements totaled $104.8 million as of September 30, 2025 and $106.0 million as of December 31, 2024. The net fair value of these agreements was recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets and was insignificant at both September 30, 2025 and December 31, 2024.

35
Mortgage derivatives. First Financial enters into IRLCs and forward commitments for the future delivery of mortgage loans to third party investors, which are considered derivatives. When borrowers secure an IRLC with First Financial and the loans are intended to be sold, First Financial will enter into forward commitments for the future delivery of the loans to third party investors in order to hedge against the effect of changes in interest rates impacting IRLCs and loans held for sale. At September 30, 2025, the notional amount of the IRLCs was $54.9 million and the notional amount of forward commitments was $52.5 million. As of December 31, 2024, the notional amount of IRLCs was $27.8 million and the notional amount of forward commitments was $22.3 million. The fair value on these agreements was insignificant at September 30, 2025 and $0.2 million at December 31, 2024, and was recorded in Accrued interest and other assets on the Consolidated Balance Sheets.

NOTE 11:  COMMITMENTS AND CONTINGENCIES

First Financial offers a variety of financial instruments including loan commitments and letters of credit to assist clients in meeting their requirement for liquidity and credit enhancement. GAAP does not require these financial instruments to be recorded in the Consolidated Financial Statements.

First Financial utilizes the same credit policies in issuing commitments and conditional obligations as it does for credit instruments recorded on the Consolidated Balance Sheets. First Financial’s exposure to credit loss in the event of non-performance by the counterparty was represented by the contractual amounts of those instruments. First Financial estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company in accordance with ASC 326. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life consistent with the Company's ACL methodology for loans and leases. Adjustments to the reserve for unfunded commitments are recorded in Provision for (recapture of) credit losses - unfunded commitments in the Consolidated Statements of Income. First Financial had $17.6 million and $16.9 million of reserves for unfunded commitments recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, respectively.

Loan commitments. Loan commitments are agreements to extend credit to a client, absent any violation of conditions established in the commitment agreement.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if deemed necessary by First Financial upon extension of credit, is based on management’s credit evaluation of the client.  The collateral held varies, but may include securities, real estate, inventory, plant or equipment. First Financial had commitments to extend credit of $4.1 billion at September 30, 2025 and $3.8 billion at December 31, 2024. As of September 30, 2025, commitments with a fixed interest rate totaled $71.1 million while commitments with variable interest rates totaled $4.0 billion. At December 31, 2024, commitments with a fixed interest rate totaled $69.3 million while commitments with variable interest rates totaled $3.7 billion. First Financial's fixed rate commitments have interest rates ranging from 0.00% to 21.00% at both September 30, 2025 and December 31, 2024 and have maturities ranging from less than one year to 31.0 years at September 30, 2025 and maturities ranging from less than one year to 31.6 years at December 31, 2024.

The following table presents by type First Financial's active loan balances and related obligations to extend credit:
September 30, 2025December 31, 2024
(dollars in thousands)Unfunded commitmentLoan balanceUnfunded commitmentLoan balance
Commercial & industrial$1,932,137 $3,838,630 $1,887,965 $3,815,858 
Lease financing0596,7340598,045
Construction real estate509,759627,960327,743779,446
Commercial real estate-investor184,2023,052,13495,8103,093,384
Commercial real estate-owner38,501996,23640,791968,360
Residential real estate01,494,46476,4011,462,284
Home equity1,061,179935,9751,002,965849,039
Installment27,590109,76433,200133,051
Credit card320,78362,654285,78262,311
Total$4,074,151 $11,714,551 $3,750,657 $11,761,778 

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Letters of credit. Letters of credit are conditional commitments issued by First Financial to guarantee the performance of a client to a third party.  First Financial’s letters of credit consist of performance assurances made on behalf of clients who have a contractual commitment to produce or deliver goods or services.  The risk to First Financial arises from its obligation to make payment in the event of the client's contractual default to produce the contracted good or service to a third party.  First Financial issued letters of credit aggregating $26.5 million and $25.1 million at September 30, 2025 and December 31, 2024, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Risk participation agreements. In conjunction with participating interests in commercial loans, First Financial periodically enters into risk participation agreements with counterparties whereby First Financial either assumes or sells a portion of the credit exposure associated with an interest rate swap on the participated loan in exchange for a fee. Under these agreements, First Financial will either make a payment to or receive a payment from the counterparty if the loan customer defaults on its obligation to perform under the interest rate swap contract. The total notional amount of the risk participation agreements was $298.2 million and $310.7 million at September 30, 2025 and December 31, 2024, respectively.

Affordable housing projects and other tax credit investments. First Financial is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects. These investments are included in Accrued interest and other assets in the Consolidated Balance Sheets, with any unfunded commitments included in Accrued interest and other liabilities in the Consolidated Balance Sheets. As of September 30, 2025, First Financial expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

First Financial adopted ASU 2023-02 effective January 1, 2024, using the modified retrospective basis. This ASU was required for fiscal years beginning after December 15, 2023 and expanded the scope of the proportional amortization method to equity investments beyond LIHTC investments. First Financial has made an accounting policy election to apply PAM to the following tax credit programs: HTC, NMTC, and renewable energy tax credits. For each program that First Financial elected to the apply proportional amortization method, First Financial analyzed each investment individually under the scope criteria to determine if PAM applies. First Financial determined that it was eligible to apply PAM to certain HTC investments, however not every HTC investment qualified under the existing guidance. At the time of adoption, First Financial's existing NMTC and renewable energy tax credits were also not eligible to apply PAM. Consistent with the guidance set forth in the ASU, First Financial recorded a $0.6 million adjustment to retained earnings to account for the transition of qualified HTC that transitioned to PAM during the first quarter of 2024.

The following table summarizes First Financial's investments in affordable housing projects and other tax credit investments.

(Dollars in thousands)September 30, 2025December 31, 2024
InvestmentAccounting MethodInvestmentUnfunded commitmentInvestmentUnfunded commitment
LIHTCProportional amortization$160,580 $75,995 $148,942 $72,830 
HTCProportional amortization10,742 56 14,077 56 
HTCEquity8,446 5,855 8,781 6,656 
NMTCEquity702 0 1,191 0 
Renewable energyEquity25,120 15,143 10,571 222 
Total$205,590 $97,049 $183,562 $79,764 

The following table summarizes First Financial's amortization expense and tax benefit recognized in affordable housing projects and other tax credit investments.
Three months ended
September 30, 2025September 30, 2024
(Dollars in thousands)
Amortization expense (1)
Tax expense (benefit) recognized (2)
Amortization expense (1)
Tax expense (benefit) recognized (2)
LIHTCProportional amortization$4,001 $(4,092)$3,398 $(3,905)
HTCProportional amortization868 (1,033)1,193 (1,104)
HTCEquity112 (101)0 0 
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NMTCEquity0 0 31 (1)
Renewable energyEquity0 0 0 0 
Total$4,981 $(5,226)$4,622 $(5,010)
Nine months ended
September 30, 2025September 30, 2024
(Dollars in thousands)Accounting Method
Amortization expense (1)
Tax expense (benefit) recognized (2)
Amortization expense (1)
Tax expense (benefit) recognized (2)
LIHTCProportional amortization$12,974 $(13,392)$10,506 $(11,926)
HTCProportional amortization3,335 (3,099)2,092 (3,312)
HTCEquity335 (303)0 0 
NMTCEquity0 0 94 (4)
Renewable energyEquity0 0 0 0 
Total$16,644 $(16,794)$12,692 $(15,242)
(1) The amortization expense for investments using the proportional amortization method is included in income tax expense. The amortization expense for the equity method investments is included in other noninterest expense.
(2) All of the tax benefits recognized are included in Income tax expense. The tax benefit recognized for the equity method investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).
Contingencies/Litigation. As part of the ordinary course of business, First Financial and its subsidiaries are parties to litigation, including claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, foreclosure interests that are incidental to our regular business activities and other matters. First Financial and its subsidiaries are engaged in various matters of litigation and have a number of unresolved claims pending. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of September 30, 2025. Reserves are established for these various matters of litigation when appropriate under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had no reserves related to litigation matters as of September 30, 2025 or December 31, 2024.

NOTE 12:  INCOME TAXES

For the third quarter of 2025, income tax expense was $18.8 million, resulting in an effective tax rate of 20.7% compared to $12.4 million and an effective tax rate of 19.2% for the comparable period in 2024. For the first nine months of 2025, income tax expense was $48.9 million, resulting in an effective tax rate of 20.2% compared to $37.5 million and an effective tax rate of 18.6% for the comparable period in 2024. The higher effective tax rate in 2025 is primarily driven by higher taxable income and fewer federal income tax credits recognized.

At both September 30, 2025 and December 31, 2024, First Financial had no unrecognized tax benefits. As defined by FASB ASC Topic 740-10, Income Taxes, an unrecognized tax benefit is a position that if recognized would favorably impact the effective income tax rate in future periods. First Financial recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. At September 30, 2025 and December 31, 2024, the Company had no interest or penalties recorded.

On July 4, 2025, the legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” which is commonly referred to as the One Big Beautiful Bill (“the Act”) was signed into law. First Financial has evaluated the income tax implications of the Act and has applied the new law to current and deferred income tax calculations beginning in the third quarter of 2025. Deferred tax assets increased significantly from the second quarter of 2025 to the third quarter of 2025 due to Section 168(k) bonus depreciation being increased to 100% for assets placed in service after January 19, 2025.

First Financial and its subsidiaries are subject to U.S. federal income tax as well as state and local income tax in numerous jurisdictions.  Tax years prior to 2021 have been closed and are no longer subject to U.S. federal income tax examinations. Tax years 2021 through 2024 remain open to examination by the federal taxing authority. With limited exception, First Financial is no longer subject to state and local income tax examinations for years prior to 2020.
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NOTE 13:  EMPLOYEE BENEFIT PLANS

First Financial sponsors a non-contributory defined benefit pension plan which covers substantially all employees and uses a December 31 measurement date. Plan assets are primarily invested in fixed income and publicly traded equity mutual funds. The pension plan does not directly own any shares of First Financial common stock or any other First Financial security or product.

First Financial made no cash contributions to the pension plan during the nine months ended September 30, 2025 or the year ended December 31, 2024. Since the plan is fully funded, First Financial does not expect to make any contributions to the plan in 2025.

As a result of the plan’s actuarial projections, First Financial recorded expense in the Company's Consolidated Statements of Income, as set forth in the following table:
Three months endedNine months ended
September 30,September 30,
(Dollars in thousands)2025202420252024
Service cost$2,615 $2,624 $8,165 $7,474 
Interest cost1,400 1,080 4,250 3,680 
Expected return on assets(2,527)(2,647)(7,627)(7,897)
Amortization of prior service cost44 44 
Net actuarial loss652 485 1,902 1,235 
     Net periodic benefit cost (income)$2,144 $1,546 $6,694 $4,496 

NOTE 14:  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss).  The following table summarizes the changes within each classification of AOCI:
 Three months ended September 30, 2025
 Total other comprehensive income (loss)Total accumulated other
comprehensive income (loss)
(Dollars in thousands)Prior to
reclass		Reclass
from		Pre-taxTax effectNet of taxBeginning balanceNet activityEnding balance
Unrealized gain (loss) on debt securities$30,469 $3 $30,466 $(6,711)$23,755 $(216,733)$23,755 $(192,978)
Unrealized gain (loss) on derivatives(990)(199)(791)183 (608)818 (608)210 
Retirement obligation0 (656)656 (151)505 (29,520)505 (29,015)
Foreign currency translation(268)0 (268)0 (268)(949)(268)(1,217)
Total$29,211 $(852)$30,063 $(6,679)$23,384 $(246,384)$23,384 $(223,000)
 Three months ended September 30, 2024
 Total other comprehensive income (loss)Total accumulated other
comprehensive income (loss)
(Dollars in thousands)Prior to
reclass		Reclass
from		Pre-taxTax effectNet of taxBeginning balanceNet activityEnding balance
Unrealized gain (loss) on debt securities$94,520 $(17,694)$112,214 $(24,717)$87,497 $(291,143)$87,497 $(203,646)
Unrealized gain (loss) on derivatives3,855 (199)4,054 (938)3,116 (794)3,116 2,322 
Retirement obligation0 (489)489 (113)376 (30,540)376 (30,164)
Foreign currency translation158 0 158 0158 (932)158 (774)
Total$98,533 $(18,382)$116,915 $(25,768)$91,147 $(323,409)$91,147 $(232,262)
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 Nine months ended September 30, 2025
 Total other comprehensive income (loss)Total accumulated
other comprehensive income (loss)
(Dollars in thousands)Prior to
reclass		Reclass
from		Pre-taxTax effectNet of taxBeginning balanceNet activityEnding balance
Unrealized gain (loss) on debt securities$71,577 $(9,908)$81,485 $(17,949)$63,536 $(256,514)$63,536 $(192,978)
Unrealized gain (loss) on derivatives1,207 (596)1,803 (417)1,386 (1,176)1,386 210 
Retirement obligation0 (1,906)1,906 (441)1,465 (30,480)1,465 (29,015)
Foreign currency translation412 0 412 0 412 (1,629)412 (1,217)
Total$73,196 $(12,410)$85,606 $(18,807)$66,799 $(289,799)$66,799 $(223,000)

 Nine months ended September 30, 2024
 Total other comprehensive income (loss)Total accumulated
other comprehensive income (loss)
(Dollars in thousands)Prior to
reclass		Reclass
from		Pre-taxTax effectNet of taxBeginning balanceNet activityEnding balance
Unrealized gain (loss) on debt securities$75,223 $(25,212)$100,435 $(22,123)$78,312 $(281,958)$78,312 $(203,646)
Unrealized gain (loss) on derivatives(2,460)(596)(1,864)431 (1,433)3,755 (1,433)2,322 
Retirement obligation0 (1,239)1,239 (286)953 (31,117)953 (30,164)
Foreign currency translation(275)0 (275)0 (275)(499)(275)(774)
Total$72,488 $(27,047)$99,535 $(21,978)$77,557 $(309,819)$77,557 $(232,262)

The following table presents the activity reclassified from accumulated other comprehensive income into income during the three and nine month periods ended September 30, 2025 and 2024, respectively:
Amount reclassified from
accumulated other comprehensive income (loss)
Three months endedNine months ended
September 30,September 30,
(Dollars in thousands)2025202420252024Affected Line Item in the Consolidated Statements of Income
Gains and losses on cash flow hedges
Interest rate contracts$(199)$(199)$(596)$(596)Interest income - Loans and leases, including fees
Realized gain (loss) on securities available-for-sale3 (17,694)(9,908)(25,212)Net gain (loss) on investments securities
Defined benefit pension plan
Amortization of prior service cost (1)
(4)(4)(4)(4)Other noninterest expense
Recognized net actuarial loss (1)
(652)(485)(1,902)(1,235)Other noninterest expense
Defined benefit pension plan total(656)(489)(1,906)(1,239)
Total reclassifications for the period, before tax$(852)$(18,382)$(12,410)$(27,047)
(1) Included in the computation of net periodic pension cost (see Note 13 - Employee Benefit Plans for additional details).

NOTE 15:  REVENUE RECOGNITION

The majority of the Company’s revenues come from sources that are outside of the scope of ASU 2014-09, Revenue from Contracts with Customers. Income sources that are outside of this standard include income earned on loans, leases, securities, derivatives and foreign exchange, excluding spot transactions. The Company's services that fall within the scope of ASU 2014-09 are presented within Noninterest income and are recognized as revenue when the Company satisfies its obligation to the customer. Services within the scope of this guidance include service charges on deposits, wealth management fees, bankcard income, foreign exchange spot income, gain/loss on the sale of OREO and investment brokerage fees.

Service charges on deposit accounts. The Company earns revenues from its deposit customers for transaction-based fees, account maintenance fees and overdraft fees. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed, which is the point
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in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Similarly, overdraft fees are recognized at the point in time that the overdraft occurs, which corresponds with the Company's performance obligation. Service charges on deposit accounts are withdrawn from the customer's deposit account.

Wealth management fees. Wealth management fees are primarily asset-based, but can also include flat fees based upon a specific service rendered, such as tax preparation services. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fees. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing wealth management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, as incurred.

Wealth management fees also includes brokerage revenue. Brokerage revenue represents fees from investment brokerage services provided to customers by a third party provider. The Company receives commissions from the third-party service provider on a monthly basis based upon customer activity for the month. The fees are recognized monthly and a receivable is recorded until commissions are paid the following month. Because the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, investment brokerage fees are presented net of related costs.

The Company also provides advisory services on mergers and acquisitions. Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction) or the contract is cancelled. However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgment is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities.

Bankcard income. The Company earns interchange fees from cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized concurrent with the transaction processing services provided to the cardholder. Interchange income is presented on the Consolidated Statements of Income net of expenses. Gross interchange income for the third quarter of 2025 was $7.7 million, partially offset by $4.1 million of expenses within Noninterest income. Gross interchange income for the three months ended September 30, 2024 was $7.6 million, partially offset by $3.9 million of expenses within Noninterest income. Gross interchange income for the first nine months of 2025 was $22.5 million, partially offset by $11.9 million of expenses within Noninterest income. Gross interchange income for the nine months of 2024 was $22.5 million, partially offset by $11.8 million of expenses within Noninterest income.

Foreign exchange income. Foreign exchange income includes both spot and forward income in First Financial's Consolidated Statements of Income. Forward income is excluded from the scope of ASU 2019-04; however, spot income is within the scope of the guidance. A foreign exchange spot trade is a trade made for immediate exchange and delivery of the currency, thus satisfying the performance obligation. Income from foreign exchange spot trades was $2.6 million and $2.3 million for the third quarters of 2025 and 2024, respectively. Income from foreign exchange spot trades was $8.0 million and $7.8 million for the first nine months of 2025 and 2024, respectively.

Other. Other noninterest income includes recurring revenue streams such as transaction fees, safe deposit rental income, insurance commissions, merchant referral income and gain (loss) on sale of OREO. Transaction fees primarily include check printing sales commissions, collection fees and wire transfer fees which arise from in-branch transactions. Safe deposit rental income arises from fees charged to the customer on an annual basis and recognized upon receipt of payment. Insurance commissions are agent commissions earned by the Company and earned upon the effective date of the bound coverage. Merchant referral income is associated with a program whereby the Company receives a share of processing revenue that is generated from clients that were referred by First Financial to the service provider. Revenue is recognized at the time the transaction occurs.

The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of the executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectibility of the transaction price is probable. Once these criteria are met, the OREO asset is removed and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.
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NOTE 16:  EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per common share:
Three months endedNine months ended
September 30,September 30,
(Dollars in thousands, except per share data)2025202420252024
Numerator  
Net income available to common shareholders$71,923 $52,451 $193,212 $163,945 
Denominator
Weighted average shares outstanding for basic earnings per common share94,889,341 94,473,666 94,799,411 94,377,010 
Effect of dilutive securities
Employee stock awards864,457 1,005,844 874,682 1,001,228 
Adjusted weighted average shares for diluted earnings per common share95,753,798 95,479,510 95,674,093 95,378,238 
Earnings per share available to common shareholders  
Basic$0.76 $0.56 $2.04 $1.74 
Diluted$0.75 $0.55 $2.02 $1.72 

Stock options and warrants with exercise prices greater than the average market price of the common shares were not included in the computation of net income per diluted share, as they would have been antidilutive.  First Financial had no options or warrants outstanding at September 30, 2025 or September 30, 2024.  

NOTE 17:  FAIR VALUE DISCLOSURES

The fair value framework as disclosed in the Fair Value Topic includes a hierarchy which focuses on prioritizing the inputs used in valuation techniques.  The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), a lower priority to observable inputs other than quoted prices in active markets for identical assets and liabilities (Level 2) and the lowest priority to unobservable inputs (Level 3).  When determining the fair value measurements for assets and liabilities, First Financial looks to active markets to price identical assets or liabilities whenever possible and classifies such items in Level 1.  When identical assets and liabilities are not traded in active markets, First Financial looks to observable market data for similar assets and liabilities and classifies such items as Level 2.  Certain assets and liabilities are not actively traded in observable markets and First Financial must use alternative techniques, based on unobservable inputs, to determine the fair value and classifies such items as Level 3. The level within the fair value hierarchy is based on the lowest level of input that is significant in the fair value measurement.

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The estimated fair values of First Financial’s financial instruments not measured at fair value on a recurring or nonrecurring basis in the consolidated financial statements were as follows:
CarryingEstimated fair value
(Dollars in thousands)valueTotalLevel 1Level 2Level 3
September 30, 2025
Financial assets
Cash and interest-bearing deposits with other banks$739,739 $739,739 $739,739 $0 $0 
Investment securities held-to-maturity71,595 65,911 0 65,911 0 
Other investments (1)
12,739 12,739 1,691 40 11,008 
Loans and leases11,552,635 11,444,671 0 0 11,444,671 
Accrued interest receivable66,865 66,865 0 14,672 52,193 
Financial liabilities
Deposits14,433,448 14,427,984 0 14,427,984 0 
Short-term borrowings595,167 595,167 595,167 0 0 
Long-term debt221,823 227,368 0 227,368 0 
Accrued interest payable35,301 35,301 4,750 30,551 0 

CarryingEstimated fair value
(Dollars in thousands)valueTotalLevel 1Level 2Level 3
December 31, 2024
Financial assets
Cash and interest-bearing deposits with other banks$904,486 $904,486 $904,486 $0 $0 
Investment securities held-to-maturity76,960 68,989 0 68,989 0 
Other investments (1)
11,570 11,570 1,530 40 10,000 
Loans and leases11,604,987 11,417,941 0 0 11,417,941 
Accrued interest receivable67,420 67,420 0 14,263 53,157 
Financial liabilities
Deposits14,329,138 14,322,815 0 14,322,815 0 
Short-term borrowings755,452 755,452 755,452 0 0 
Long-term debt347,509 346,613 0 346,613 0 
Accrued interest payable43,411 43,411 4,663 38,748 0 
(1) FHLB stock and FRB stock of $104.4 million and $103.0 million as of September 30, 2025 and December 31, 2024, respectively, are excluded from the numbers above.

The following methods, assumptions and valuation techniques were used by First Financial to measure different financial assets and liabilities at fair value on a recurring or nonrecurring basis.

Investment securities. Investment securities classified as available-for-sale are recorded at fair value on a recurring basis.  Fair value measurement is based upon quoted market prices, when available (Level 1).  If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar investment securities.  First Financial compiles prices from various sources who may apply such techniques as matrix pricing to determine the value of identical or similar investment securities (Level 2).  Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for the specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities.  Any investment securities not valued based upon the methods previously described are considered Level 3.

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First Financial utilizes values provided by third-party pricing vendors to price the investment securities portfolio in accordance with the fair value hierarchy of the Fair Value Topic and reviews the pricing methodologies utilized by the pricing vendors to ensure that the fair value determination is consistent with the applicable accounting guidance.  First Financial’s pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, historical prices and other independent pricing services.  Further, the Company periodically validates the fair value of a sample of securities in the portfolio by comparing the fair values to prices from other independent sources for the same or similar securities.  First Financial analyzes unusual or significant variances, conducts additional research with the pricing vendor, and if necessary, takes appropriate action based on its findings.  The results of the quality assurance process are incorporated into the selection of pricing providers by the portfolio manager.

Loans held for sale. The fair value of the Company’s residential mortgage loans held for sale is determined on a recurring basis based on quoted prices for similar loans in active markets, and therefore, is classified as Level 2 in the fair value hierarchy.

Derivatives. The fair values of derivative instruments, which includes interest rate derivatives, foreign exchange derivatives, floors, collars and commodities contracts, are based primarily on a net present value calculation of the cash flows related to the contracts at the reporting date, using primarily observable market inputs such as interest rate yield curves which represents the cost to terminate the swap if First Financial should choose to do so. Additionally, First Financial utilizes an internally-developed model to value the credit risk component of derivative assets and liabilities, which is recorded as an adjustment to the fair value of the derivative asset or liability on the reporting date. Derivative instruments are classified as Level 2 in the fair value hierarchy.

Collateral dependent loans. Collateral dependent loans are defined as loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrowers are experiencing financial difficulty. Collateral dependent loans are carried at fair value when the value of the operation or collateral less any costs to sell is not sufficient to cover the remaining balance. In these instances, the loans will either be partially charged-off or receive specific allocations of the allowance for credit losses. For collateral dependent loans, fair value is generally based on real estate appraisals, a calculation of enterprise value or a valuation of business assets including equipment, inventory and accounts receivable. These loans had a principal amount of $23.9 million and $3.9 million at September 30, 2025 and December 31, 2024, respectively, with a valuation allowance of $10.1 million and $2.1 million at September 30, 2025 and December 31, 2024, respectively.

The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed third-party appraiser (Level 3). These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Collateral is then adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and the client’s business, resulting in a Level 3 fair value classification. Collateral dependent loans are evaluated on a quarterly basis for additional write-downs and are adjusted accordingly.

Enterprise value is defined as imputed value for the entire underlying business. To determine an appropriate range of enterprise value, FFB relies on a standardized set of valuation methodologies that take into account future projected cash flows, market based multiples as well as asset values. Valuations involve both quantitative and qualitative considerations and professional judgments concerning differences in financial and operating characteristics in addition to other factors that may impact values over time (Level 3).

The value of business equipment is based on an outside appraisal, if deemed significant, or the net book value on the applicable borrower financial statements.  Likewise, values for inventory and accounts receivable collateral are based on borrower financial statement balances or aging reports on a discounted basis as appropriate (Level 3).  

The fair value of collateral dependent loans is measured at fair value on a nonrecurring basis.  Any fair value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income.

Mortgage servicing rights. Mortgage servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount. If the carrying amount of the servicing asset exceeds fair value, impairment is recorded so that the servicing asset is carried at fair value. Fair value is determined based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilized a discount rate of 11.63% at September 30, 2025
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and 11.52% at December 31, 2024, respectively, weighted average prepayment speeds of 6.29% at September 30, 2025 and 5.96% at December 31, 2024, respectively, and other economic factors that market participants would use in estimating future net servicing income and that can be validated against available market data.

The financial assets and liabilities measured at fair value on a recurring basis in the consolidated financial statements were as follows:
 Fair value measurements using
(Dollars in thousands)Level 1Level 2Level 3Assets/liabilities
at fair value
September 30, 2025
Assets    
Investment securities available-for-sale$94 $3,374,340 $48,161 $3,422,595 
Loans held for sale0 21,466 0 21,466 
Interest rate derivative contracts0 71,404 0 71,404 
Foreign exchange derivative contracts0 227,823 0 227,823 
Interest rate collars and floors0 1,037 0 1,037 
Commodities contracts0 226 0 226 
Total$94 $3,696,296 $48,161 $3,744,551 
Liabilities    
Interest rate derivative contracts$0 $71,806 $0 $71,806 
Foreign exchange derivative contracts0 227,823 0 227,823 
Commodities contracts0 226 0 226 
Total$0 $299,855 $0 $299,855 

 Fair value measurements using
(Dollars in thousands)Level 1Level 2Level 3Assets/liabilities
at fair value
December 31, 2024
Assets    
Investment securities available-for-sale$91 $3,139,503 $44,182 $3,183,776 
Loans held for sale0 13,181 0 13,181 
Interest rate derivative contracts0 102,152 0 102,152 
Foreign exchange derivative contracts0 294,418 0 294,418 
Interest rate collars and floors0 387 0 387 
Commodities contracts0 158 0 158 
Total$91 $3,549,799 $44,182 $3,594,072 
Liabilities    
Interest rate derivative contracts$0 $102,265 $0 $102,265 
Foreign exchange derivative contracts0 294,418 0 294,418 
Interest rate collars and floors0 619 0 619 
Commodities contracts0 158 0 158 
Total$0 $397,460 $0 $397,460 

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The following table presents a reconciliation for certain AFS securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).
Three months endedNine months ended
September 30,September 30,
(dollars in thousands)2025202420252024
Beginning balance$42,569 $31,428 $44,182 $32,945 
Accretion (amortization)(20)(47)(60)(73)
Increase (decrease) in fair value6 (549)(15)(527)
Settlements(5,209)(1,924)(6,761)(3,437)
Transfers into level 310,815 17,172 10,815 17,172 
Ending balance$48,161 $46,080 $48,161 $46,080 

Certain financial assets and liabilities are measured at fair value on a nonrecurring basis.  Adjustments to the fair value of these assets usually result from the application of fair value accounting or write-downs of individual assets.  The following table summarizes financial assets and liabilities measured at fair value on a nonrecurring basis.
 Fair value measurements using
(Dollars in thousands)Level 1Level 2Level 3
September 30, 2025
Assets   
Collateral dependent loans
Commercial & industrial$0 $0 $9,328 
Commercial real estate0 0 2,258 
Lease financing0 0 2,226 
OREO0 0 111 
 Fair value measurements using
(Dollars in thousands)Level 1Level 2Level 3
December 31, 2024
Assets   
Collateral dependent loans
Commercial & industrial$0 $0 $793 
Lease financing0 0 1,012 

Fair value option. First Financial may elect to report most financial instruments and certain other items at fair value on an instrument-by instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability, or firm commitment, or when certain specified reconsideration events occur. The fair value election may not be revoked once an election is made.

The Company elected the fair value option for residential mortgage loans held for sale. This election allows for a more effective offset of the changes in fair values of the loans held for sale and the derivative financial instruments used to financially hedge them without having to apply complex hedge accounting requirements. The fair value of the Company’s residential mortgage loans held for sale was determined based on quoted prices for similar loans in active markets.

The aggregate fair value of the Company’s residential mortgage loans held for sale as of September 30, 2025 and December 31, 2024 was $21.5 million and $13.2 million, respectively. The aggregate unpaid principal balance of the Company’s residential mortgage loans held for sale as of September 30, 2025 and December 31, 2024 was $19.8 million and $12.4 million, respectively. The resulting difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was $1.7 million and $0.8 million as of September 30, 2025 and December 31, 2024, respectively.

Changes in the estimated fair value of residential mortgage loans held for sale are reported as a component of Net gain from sales of loans in the Company’s Consolidated Statements of Income. The change in fair value of the Company’s residential
46
mortgage loans held for sale resulted in a gain of $0.2 million for the quarter ended September 30, 2025 and a loss of $0.1 million for the same period in 2024. The change in fair value of the Company’s residential mortgage loans held for sale resulted in gains of $0.9 million and $0.4 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

NOTE 18:  BUSINESS COMBINATIONS

Pending acquisitions

BankFinancial Corporation
In August 2025, First Financial Bancorp entered into an Agreement and Plan of Merger with BankFinancial Corporation, a Maryland corporation. Upon completion of the transaction, BankFinancial, National Association, a national banking association, and a wholly owned subsidiary of BankFinancial Corporation, will merge into First Financial Bank. As of September 30, 2025, BankFinancial Corporation operated 18 full-service banking offices and had, on an unaudited basis, approximately $1.5 billion of total assets, $759.8 million of total loans and $1.2 billion of total deposits.

Upon the terms and subject to the conditions set forth in the merger agreement, at the effective time of the merger, each share of common stock of BankFinancial Corporation will be converted into the right to receive 0.48 of a share of First Financial common stock.

The completion of the merger is subject to customary conditions, including approval of the merger by BankFinancial’s stockholders, authorization for listing on the NASDAQ Stock Market LLC of the shares of First Financial Common Stock to be issued in connection with the merger, subject to official notice of issuance, the receipt of specified governmental consents and approvals that are necessary to consummate the transactions contemplated by the merger agreement and termination or expiration of all applicable waiting periods, and the absence of any order or other restraint preventing the consummation of the merger. Each party’s obligation to complete the merger is also subject to certain additional customary conditions, including, subject to certain exceptions, the accuracy of the representations and warranties of the other party, performance in all material respects by the other party of its obligations under the merger agreement, and receipt by such party of an opinion from counsel to the effect that the merger will qualify as a reorganization.

No First Financial shareholder approval is required, but the transaction is subject to approval by BankFinancial shareholders at a special meeting to be held on December 18, 2025. First Financial expects the acquisition to close in the first quarter of 2026.

This pending acquisition expands First Financial’s presence in the Chicago market with a strong core deposit franchise while supplementing its existing commercial banking and wealth management lines of business.

Closed acquisitions

Westfield Bancorp, Inc.
Subsequent to the end of the third quarter, effective November 1, 2025, First Financial Bancorp acquired Westfield Bancorp, Inc., an Ohio corporation. Upon completion of the transaction, Westfield Bank, FSB, a federal savings bank, and a wholly owned subsidiary of Westfield Bancorp, merged into First Financial Bank. As of September 30, 2025, Westfield Bancorp operated seven full-service banking offices and had, on an unaudited basis, approximately $2.1 billion of total assets, $1.7 billion of total loans and $1.8 billion of total deposits.

Pursuant to the Purchase Agreement, First Financial acquired all of the issued and outstanding equity securities of Westfield Bancorp in exchange for a cash payment of $260.0 million and 2,753,094 shares of First Financial common stock, equal to $64.4 million based on the Company's stock price on the date the transaction, for a total purchase price of $324.4 million.

This acquisition supplements First Financial’s existing commercial banking and wealth management presence in Northeast Ohio by adding all of Westfield’s retail banking locations and its commercial lending, insurance agency lending and private banking services.

The acquisition of Westfield had no impact on the Company's Consolidated Balance Sheet or Statements of Income at and for the three and nine months ended September 30, 2025.

Agile Premium Finance
On February 29, 2024, First Financial acquired Agile Premium Finance for $96.9 million in an all cash transaction. Agile originates commercial loans for the payment of annual property and casualty insurance for businesses. The loans are secured
47
by the unearned premium of the policies and have an average term of approximately ten months. Upon completion of the transaction, Agile became a division of the Bank and continues to operate as Agile Premium Finance, taking advantage of its existing brand recognition within the insurance premium financing industry. Operating results from the Agile acquisition have been included in the Consolidated Statements of Income since the acquisition date.

The Agile transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed were $97.8 million and $2.7 million, respectively. Acquisition accounting adjustments are considered final at September 30, 2025. Goodwill arising from the Agile acquisition was $1.8 million and reflects the additional revenue growth expected with the Company's expansion into the insurance premium financing business. First Financial incurred no expenses related to the Agile acquisition in the third quarter of 2025 and $0.1 million for the nine months ended September 30, 2025. For third quarter of 2024, the Company incurred no expenses related to the Agile acquisition and the Company incurred $0.2 million of acquisition-related expenses for the nine months ended September 30, 2024.

The goodwill arising from the Agile acquisition is deductible for income tax purposes.  For further detail, see Note 8 – Goodwill and Other Intangible Assets.

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value.

(Dollars in thousands)Agile
Purchase consideration
Cash consideration$96,887 
Assets acquired
Commercial loans93,353 
Premises and equipment651 
Intangible assets3,797 
Total assets acquired97,801 
Liabilities assumed
Other liabilities2,702 
Total liabilities assumed2,702 
Net identifiable assets95,099 
Goodwill$1,788 

NOTE 19:  BUSINESS SEGMENTS

Operating segments are components of an enterprise about which separate financial information is available, and is evaluated regularly by the chief operating decision maker in assessing performance and in allocating resources.

First Financial provides banking and financial services products to business and retail clients through its six lines of business: Commercial, Retail Banking, Mortgage Banking, Wealth Management, Investment Commercial Real Estate and Commercial Finance. While the Company monitors the results of its lines of business, the Company's business activities are similar in their nature, operations and economic characteristics, largely serving clients with products and services that are offered through similar processes and platforms.

A segment is also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services and customers are similar. First Financial has determined that the chief operating decision maker is comprised of a group of associates, including but not limited to the Chief Executive Officer and Chief Financial Officer, as well as from time to time the Board of Directors. The Board of Directors are not in day-to-day management of the Company but there are times when Board
48
approval is required, such as for shareholder dividends and material transactions, such as acquisitions.

Loans, investments, and deposits provide the revenues in the banking operation, while interest expense, provision for credit losses and salaries and benefits provide the significant expenses. The CODM is regularly provided with consolidated income and expenses, as presented on the Consolidated Statements of Income, in addition to consolidated assets presented on the Consolidated Balance Sheets. Additionally, consolidated internal financial information is used by the CODM to monitor credit quality and credit loss expense.

The Company uses this information to assess performance, decide how to allocate resources, and evaluate capital deployment opportunities. The CODM uses consolidated net income and return on assets to benchmark the Company against its competitors. This benchmarking analysis, coupled with the monitoring of budget to actual results, are used in assessing the Company's performance and in establishing compensation.

Accordingly, and consistent with prior years, all of the Company's operations are considered by management to be aggregated into one reportable operating segment.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
(Unaudited)

The following discussion and analysis is presented by management to facilitate the understanding of the financial condition, cash flows, changes in financial condition and results of operations of First Financial Bancorp. Management's discussion and analysis identifies trends and material changes that occurred during the reporting periods presented and should be read in conjunction with the Consolidated Financial Statements and accompanying Notes.

All significant reclassifications of prior period amounts, if applicable, have been made to conform to the current period’s presentation and had no effect on the Company's previously reported net income or financial condition.

EXECUTIVE SUMMARY

First Financial Bancorp. is an $18.6 billion financial holding company headquartered in Cincinnati, Ohio. The Company primarily operates through First Financial Bank, an Ohio-chartered commercial bank with 127 full service banking centers at September 30, 2025. First Financial provides banking and financial services products to business and retail clients through its six lines of business: Commercial, Retail Banking, Mortgage Banking, Wealth Management, Investment Commercial Real Estate and Commercial Finance. The Commercial Finance business lends to targeted industry verticals and has a national geographic footprint. Wealth Management, operating under the brand of Yellow Cardinal Advisory Group, had $4.0 billion in assets under management as of September 30, 2025, and provides the following services: financial planning, investment management, trust administration, estate settlement, business succession planning services, brokerage services and retirement planning.

Additional information about First Financial, including its products, services and banking locations, is available on the
Company's website at www.bankatfirst.com.

The primary components of First Financial’s operating results for the three and nine month periods ended September 30, 2025 are discussed in greater detail in the sections that follow.

MARKET STRATEGY

First Financial develops a competitive advantage by utilizing a local market focus to provide superior service and build long-term relationships with clients while helping them achieve greater financial success. First Financial serves a combination of metropolitan and community markets in Ohio, Indiana, Kentucky and Illinois through its full-service banking centers. First Financial's investment in community markets is an important part of the Bank's core funding base and has historically provided stable, low-cost funding sources. 

First Financial also has certain specialty lending platforms that extend beyond the geographic footprint of its banking centers. These specialty finance businesses provide insurance premium financing, equipment lease financing, franchise financing and funding to clients within the financial services industry.

First Financial’s market selection process includes multiple factors, but markets are primarily chosen for their potential for long-term profitability and growth.  First Financial intends to concentrate plans for future growth and capital investment within its current markets, and will continue to evaluate additional growth opportunities in metropolitan markets located within, or in close proximity to, the Company's current geographic footprint.  Additionally, First Financial may assess strategic acquisitions that provide product line extensions or industry verticals that complement its existing business and diversify its product suite and revenue streams.

BUSINESS COMBINATIONS

BankFinancial Corporation
In August 2025, First Financial entered into a merger agreement with BankFinancial Corporation to acquire all of its equity shares in an all-stock transaction. Under the terms of the agreement, each outstanding share of BankFinancial common stock will be converted into the right to receive 0.48 shares of First Financial common stock, valuing the transaction at approximately $151.0 million, based on First Financial's closing stock price on September 30, 2025. Headquartered in Burr Ridge, Illinois, BankFinancial is the sole owner of BankFinancial, National Association, which will merge into First Financial Bank. As of
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September 30, 2025, BankFinancial operated 18 banking centers in the Chicago metropolitan area and had, on an unaudited basis, approximately $1.5 billion of total assets, $759.8 million of total loans and $1.2 billion of total deposits.

The closing of the BankFinancial acquisition is subject to customary conditions, including, among others, receipt of required regulatory approvals; the absence of any governmental order that restrains, prevents or materially alters the transactions contemplated by the merger agreement; the accuracy of the parties’ representations and warranties contained in the agreement (subject to certain qualifications); and the parties’ material compliance with the covenants and agreements in the agreement.

No First Financial shareholder approval is required, but the transaction is subject to approval by BankFinancial shareholders, for which a vote is expected to occur at a special meeting to be held on December 18, 2025. The Company expects the acquisition to close in the first quarter of 2026.

Westfield Bancorp
Subsequent to the end of the third quarter, First Financial Bancorp acquired Westfield Bancorp, Inc., an Ohio corporation, effective November 1, 2025. Upon completion of the transaction, Westfield Bank, FSB, a federal savings bank, and a wholly owned subsidiary of Westfield Bancorp, merged into First Financial Bank. As of September 30, 2025, Westfield Bancorp operated seven full-service banking offices and had, on an unaudited basis, approximately $2.1 billion of total assets, $1.7 billion of total loans and $1.8 billion of total deposits.

Pursuant to the Purchase Agreement, First Financial acquired all of the issued and outstanding equity securities of Westfield Bancorp in exchange for a cash payment of $260.0 million and 2,753,094 shares of First Financial common stock, equal to $64.4 million based on the Company's stock price on the date the transaction, for a total purchase price of $324.4 million

This acquisition supplements First Financial’s existing commercial banking and wealth management presence in Northeast Ohio by adding all of Westfield’s retail banking locations and its commercial, insurance agency and private banking services.

The acquisition of Westfield had no impact on the Company's Consolidated Balance Sheet or Statements of Income at and for the three and nine months ended September 30, 2025.

Agile Premium Finance
In February 2024, First Financial completed its acquisition of Agile Premium Finance for $96.9 million in an all cash transaction. Headquartered in Lincolnshire, IL, Agile originates commercial loans for the payment of annual property and casualty insurance for businesses. Agile is among industry leaders in the premium finance lending space and is active in all 50 states. Agile loans are secured by the unearned premium of the insurance policies and have an average original term of approximately ten months. Upon completion of the transaction, Agile became a division of the Bank and continues to operate as Agile Premium Finance, taking advantage of its existing brand recognition within the insurance premium financing industry.

The Agile transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date in accordance with FASB ASC Topic 805, Business Combinations. The fair value of assets acquired and liabilities assumed were $97.8 million and $2.7 million, respectively. Fair value measurements for the Agile transaction were considered final as of February 2025. Goodwill resulting from the Agile acquisition was $1.8 million while other intangible assets created in the transaction include a customer list, non-compete agreements, trade name and a servicing asset.

NON-GAAP FINANCIAL MEASURES

The Company utilizes certain non-GAAP financial measures, which First Financial believes provides useful insight to the readers of the Consolidated Financial Statements. These non-GAAP measures should be supplemental to primary GAAP measures and should not be read in isolation or relied upon as a substitute for the primary GAAP measures.

For analytical purposes, net interest income is presented in the following table adjusted to a tax equivalent basis assuming a 21% marginal tax rate. Net interest income is disclosed on a tax equivalent basis to consistently reflect income from tax-exempt assets, such as municipal loans and investments, in order to facilitate a comparison between taxable and tax-exempt amounts.  Management believes it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis as these measures provide useful information to make peer comparisons.

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Three months endedNine months ended
(Dollars in thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Net interest income$160,486 $158,269 $468,051 $457,611 
Tax equivalent adjustment1,248 1,246 3,707 4,315 
Net interest income - tax equivalent$161,734 $159,515 $471,758 $461,926 
Average earning assets$15,968,153 $15,814,576 $15,845,745 $15,074,697 
Net interest margin (1)
3.99 %4.01 %3.95 %4.05 %
Net interest margin (FTE) (1)
4.02 %4.05 %3.98 %4.09 %
(1) Calculated using annualized net interest income divided by average earning assets.

In addition to capital ratios defined by the U.S. banking agencies, First Financial considers various measures when evaluating capital utilization and adequacy, including the return on average tangible shareholder's equity and the tangible common equity ratio. These calculations are intended to complement the capital ratios defined by the U.S. banking agencies for both absolute and comparative purposes and may be useful for evaluating the performance of a business as the ratios calculate the capital and return available to common shareholders without the impact of intangible assets and their related amortization. As GAAP does not include capital ratio measures, the Company believes there are no comparable GAAP financial measures to these ratios. These ratios are not formally defined by GAAP or codified in the federal banking regulations and, therefore, are considered to be non-GAAP financial measures. First Financial encourages readers to consider its Consolidated Financial Statements in their entirety and not to rely upon any single financial measure.

The following table reconciles non-GAAP capital ratios to GAAP:
Three months endedNine months ended
(Dollars in thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Net income (a)
$71,923 $69,996 $193,212 $163,945 
Average total shareholders' equity2,575,203 2,515,747 2,516,675 2,306,147 
Less:
Average goodwill(1,007,656)(1,007,656)(1,007,656)(1,007,264)
Average other intangibles(74,448)(76,076)(76,234)(83,764)
Average tangible equity (b)
1,493,099 1,432,015 1,432,785 1,215,119 
Total shareholders' equity2,631,855 2,558,155 2,631,855 2,450,438 
Less:
Goodwill(1,007,656)(1,007,656)(1,007,656)(1,007,656)
Other intangibles(73,797)(75,458)(73,797)(81,547)
Ending tangible equity (c)
1,550,402 1,475,041 1,550,402 1,361,235 
Total assets18,554,506 18,634,255 18,554,506 18,146,332 
Less:
Goodwill(1,007,656)(1,007,656)(1,007,656)(1,007,656)
Other intangibles(73,797)(75,458)(73,797)(81,547)
Ending tangible assets (d)
17,473,053 17,551,141 17,473,053 17,057,129 
Risk-weighted assets (e)
14,164,934 14,129,683 14,164,934 13,800,728 
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Three months endedNine months ended
(Dollars in thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Total average assets18,566,188 18,419,437 18,452,133 17,630,374 
Less:
Average goodwill(1,007,656)(1,007,656)(1,007,656)(1,007,264)
Average other intangibles(74,448)(76,076)(76,234)(83,764)
Average tangible assets (f)
17,484,084 17,335,705 17,368,243 16,539,346 
Ending common shares outstanding (g)
95,757,250 95,760,617 95,757,250 95,486,317 
Ratios
Return on average tangible shareholders' equity (a)/(b)
19.11 %19.61 %18.03 %18.02 %
Ending tangible shareholders' equity as a percent of:
Ending tangible assets (c)/(d)
8.87 %8.40 %8.87 %7.98 %
Risk-weighted assets (c)/(e)
10.95 %10.44 %10.95 %9.86 %
Average tangible shareholders' equity to average tangible assets (b)/(f)
8.54 %8.26 %8.25 %7.35 %
Tangible book value per share (c)/(g)
$16.19 $15.40 $16.19 $14.26 

OVERVIEW OF OPERATIONS

Linked quarter comparison: Third quarter 2025 net income was $71.9 million and earnings per diluted common share were $0.75. This compares with second quarter 2025 net income of $70.0 million and earnings per diluted common share of $0.73. Return on average assets was 1.54% for the third quarter of 2025 compared to 1.52% for the second quarter of 2025. Return on average shareholders’ equity was 11.08% for the third quarter of 2025 compared to 11.16% for the second quarter of 2025.

Year-to-date comparison: For the nine months ended September 30, 2025, net income was $193.2 million and earnings per diluted common share were $2.02. This compares with net income of $163.9 million and earnings per diluted common share of $1.72 for the first nine months of 2024. Return on average assets for the nine months ended September 30, 2025 was 1.40% compared to 1.24% for the same period in 2024, and return on average shareholders' equity was 10.26% and 9.50% for the first nine months of 2025 and 2024, respectively.

(Dollars in thousands)September 30, 2025December 31, 2024
Balance Sheet - End of Period
Total assets$18,554,506 $18,570,261 
Loans and leases11,714,551 11,761,778 
Investment securities3,611,310 3,375,334 
Deposits14,433,448 14,329,138 
Shareholders' equity2,631,855 2,438,041 
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Three months endedNine months ended
(Dollars in thousands, except per share data)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Earnings
Net interest income$160,486 $158,269 $468,051 $457,611 
Net income71,923 69,996 193,212 163,945 
Per Share
Net income per common share-basic$0.76 $0.74 $2.04 $1.74 
Net income per common share-diluted0.75 0.73 2.02 1.72 
Cash dividends declared per common share0.25 0.24 0.73 0.70 
Book value per common share (end of period)27.48 26.71 27.48 25.66 
Tangible book value per common share (end of period) (1)
16.19 15.40 16.19 14.26 
Market price (end of period)25.25 24.26 25.25 25.23 
Ratios
Return on average assets1.54 %1.52 %1.40 %1.24 %
Return on average shareholders' equity11.08 %11.16 %10.26 %9.50 %
Return on average tangible shareholders' equity (1)
19.11 %19.61 %18.03 %18.02 %
Net interest margin3.99 %4.01 %3.95 %4.05 %
Net interest margin (FTE) (1)
4.02 %4.05 %3.98 %4.09 %
(1) Non-GAAP financial measure. For details on the calculation of this non-GAAP financial measure, see "Non-GAAP Financial Measures" section.

NET INTEREST INCOME

First Financial’s primary source of income is net interest income, which is the excess of interest received from earning assets, including loan-related fees and purchase accounting accretion, minus interest paid on interest-bearing liabilities. The amount of net interest income is determined by the volume and mix of earning assets, the rates earned on such assets and the volume, mix and rates paid for the deposits and borrowings that fund the earning assets. Earning assets consist of interest-bearing loans and leases to customers as well as marketable investment securities.
Three months endedNine months ended
(Dollars in thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Interest income
Loans and leases, including fees$204,865 $201,460 $603,488 $629,033 
Investment securities
Taxable36,421 36,243 107,065 90,958 
Tax-exempt2,195 2,233 6,632 8,412 
Total interest on investment securities38,616 38,476 113,697 99,370 
Other earning assets6,773 5,964 19,388 22,121 
Total interest income250,254 245,900 736,573 750,524 
Interest expense
Deposits77,766 75,484 231,891 245,651 
Short-term borrowings5,979 6,393 19,917 32,270 
Long-term borrowings6,023 5,754 16,714 14,992 
Total interest expense89,768 87,631 268,522 292,913 
Net interest income$160,486 $158,269 $468,051 $457,611 

Linked quarter comparison: Net interest income for the third quarter of 2025 was $160.5 million, which is an increase of $2.2 million, or 1.4%, from the second quarter of 2025. Net interest margin on a fully tax equivalent basis was 4.02% in the
54
third quarter of 2025 compared to 4.05% for the second quarter of 2025. The net interest margin during the third quarter decreased 3 basis points from the linked quarter as earning asset yields decreased 2 bps and the cost of interest bearing liabilities increased 2 bps.

Interest income of $250.3 million increased $4.4 million, or 1.8%, in the third quarter of 2025 when compared to the second quarter of 2025. This increase was primarily driven by an increase in earning assets, partially offset by a 2 bp decline in the yield on those earning assets to 6.22%. Earning assets were $16.0 billion for the third quarter of 2025, which was an increase of $153.6 million, or 1.0%, compared to the second quarter of 2025. The change in earning assets included a modest increase in both average loan and average securities balances during the period.

Interest expense of $89.8 million increased $2.1 million, or 2.4%, in the third quarter of 2025 when compared to the second quarter of 2025. The increase in interest expense was primarily driven by higher interest-bearing deposit balances. The Company's average deposit balances increased $157.2 million, or 1.1%, to $14.5 billion. The increase in average deposits was primarily driven by an increase in brokered CDs and money markets, which offset a seasonal decline in public funds. Average borrowed funds decreased $87.2 million, or 9.6%, from the linked quarter, driven by the maturity and redemption of $120.0 million of subordinated debt during the period, however this decline was somewhat offset by an increase in interest paid on the remaining borrowings, which was primarily driven by $150.0 million of subordinated debt which converted to a floating rate in May of 2025.

To mitigate interest rate risk on certain variable-rate commercial loan pools, First Financial entered into interest rate collars and floors, which are designated as cash flow hedges. The structure of the interest rate collars is such that First Financial pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, First Financial receives an incremental amount if the index falls below the floor rate. No payments are required if the collar index falls between the cap and floor rates. The structure of First Financial's interest rate floors is such that First Financial receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate.

The notional value of the Company's cash flow hedges was $1.0 billion as of both September 30, 2025 and December 31, 2024, with the $1.4 million and $4.9 million changes in the fair value recorded in AOCI in the Consolidated Balance Sheets, respectively. As of September 30, 2025 and December 31, 2024, the maximum length of time over which the Company was hedging its exposure to the variability in future cash flows was 39 months and 48 months, respectively.

Year-to-date comparison: Net interest income of $468.1 million for the first nine months of 2025 increased $10.4 million, or 2.3%, compared to the same period of 2024. Net interest margin on a fully tax equivalent basis was 3.98% for the nine months ended September 30, 2025, which is a decrease of 11 bps when compared to the same period in 2024. Driven by declining interest rates, earning asset yields declined 45 bps, which outpaced the 44 bp decline in the cost of interest bearing liabilities.

Interest income of $736.6 million for the nine months ended September 30, 2025 declined $14.0 million, or 1.9%, compared to $750.5 million for the same period of the prior year as lower interest rates more than offset the increase in earning asset balances. Average loan yields for the nine months of 2025 declined by 56 bps compared to the same period in the prior year, while the average yield on investments increased by 19 bps as a result of rebalancing a portion of the investment portfolio. Average earning assets of $15.8 billion for the first nine months of 2025 increased $771.0 million, or 5.1%, when compared to the same period of 2024, driven primarily by a $427.1 million, or 3.8%, increase in average loan balances and a $299.8 million, or 9.4%, increase in average investment securities.

Interest expense for the nine months ended September 30, 2025 was $268.5 million compared to $292.9 million for the same period in the prior year. This decrease was driven by a 39 bp decline in the cost of interest-bearing deposits, which was partially offset by an $821.0 million, or 7.9%, increase in average interest-bearing deposits. Additionally, the cost of borrowed funds declined 26 bps from the same period in the prior year and average borrowings decreased $210.0 million, or 18.7%.
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CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS
Quarterly AveragesYear-to-Date Averages
  September 30, 2025June 30, 2025September 30, 2025September 30, 2024
(Dollars in thousands)BalanceInterestYieldBalanceInterestYieldBalanceInterestYieldBalanceInterestYield
Earning assets   
Investments   
Investment securities$3,552,014 $38,616 4.31 %$3,478,921 $38,476 4.44 %$3,481,357 $113,697 4.37 %$3,181,575 $99,370 4.18 %
Interest-bearing deposits with other banks610,074 6,773 4.40 %542,815 5,964 4.41 %589,546 19,388 4.40 %545,402 22,121 5.42 %
Gross loans and leases (1)
11,806,065 204,865 6.88 %11,792,840 201,460 6.85 %11,774,842 603,488 6.85 %11,347,720 629,033 7.41 %
Total earning assets15,968,153 250,254 6.22 %15,814,576 245,900 6.24 %15,845,745 736,573 6.21 %15,074,697 750,524 6.66 %
Nonearning assets   
Allowance for credit losses(162,417)  (158,170)(159,613)(150,322)
Cash and due from banks165,210   174,375 168,108 185,934 
Accrued interest and other assets2,595,242   2,588,656 2,597,893 2,520,065 
Total assets$18,566,188   $18,419,437 $18,452,133 $17,630,374 
Interest-bearing liabilities   
Deposits   
Interest-bearing demand$3,036,296 $14,592 1.91 %$3,066,986 $14,139 1.85 %$3,064,404 $43,919 1.92 %$2,899,707 $45,734 2.11 %
Savings5,054,563 30,854 2.42 %5,005,526 29,942 2.40 %4,993,198 91,151 2.44 %4,571,236 96,848 2.83 %
Time3,296,789 32,320 3.89 %3,139,182 31,403 4.01 %3,192,928 96,821 4.05 %2,958,595 103,069 4.66 %
   Total interest-bearing deposits11,387,648 77,766 2.71 %11,211,694 75,484 2.70 %11,250,530 231,891 2.76 %10,429,538 245,651 3.15 %
Borrowed funds
Short-term borrowings531,045 5,979 4.47 %563,204 6,393 4.55 %582,662 19,917 4.57 %780,573 32,270 5.53 %
Long-term debt292,301 6,023 8.17 %347,369 5,754 6.64 %328,438 16,714 6.80 %340,513 14,992 5.89 %
   Total borrowed funds823,346 12,002 5.78 %910,573 12,147 5.35 %911,100 36,631 5.38 %1,121,086 47,262 5.64 %
Total interest-bearing liabilities12,210,994 89,768 2.92 %12,122,267 87,631 2.90 %12,161,630 268,522 2.95 %11,550,624 292,913 3.39 %
Noninterest-bearing liabilities  
Noninterest-bearing demand deposits3,124,277   3,143,081 3,119,587 3,139,939 
Other liabilities655,714   638,342 654,241 633,664 
Shareholders' equity2,575,203   2,515,747 2,516,675 2,306,147 
Total liabilities and shareholders' equity$18,566,188   $18,419,437 $18,452,133 $17,630,374 
Net interest income$160,486  $158,269 $468,051 $457,611 
Net interest spread  3.30 %3.34 %3.26 %3.27 %
Contribution of noninterest-bearing sources of funds  0.69 %0.67 %0.69 %0.78 %
Net interest margin (2)
  3.99 %4.01 %3.95 %4.05 %
Tax equivalent adjustment0.03 %0.04 %0.03 %0.04 %
 Net interest margin (fully tax equivalent) (2)
4.02 %4.05 %3.98 %4.09 %
(1) Loans held for sale and nonaccrual loans are included in gross loans.
(2) The net interest margin exceeds the interest spread as noninterest-bearing funding sources, demand deposits, other liabilities and shareholders' equity also support earning assets.
56
RATE/VOLUME ANALYSIS

The impact on net interest income from changes in interest rates and volume of interest-earning assets and interest-bearing liabilities is illustrated in the table below:
  
Changes for the three months ended September 30, 2025Changes for the nine months ended September 30, 2025
 Linked quarter income varianceYear-to-Date income variance
(Dollars in thousands)RateVolumeTotalRateVolumeTotal
Earning assets   
Investment securities$(1,066)$1,206 $140 $4,536 $9,791 $14,327 
Interest-bearing deposits with other banks(3)812 809 (4,185)1,452 (2,733)
Gross loans and leases (1)
951 2,454 3,405 (47,436)21,891 (25,545)
Total earning assets(118)4,472 4,354 (47,085)33,134 (13,951)
Interest-bearing liabilities    
Total interest-bearing deposits$248 $2,034 2,282 (30,682)16,922 (13,760)
Borrowed funds  
Short-term borrowings(121)(293)(414)(5,588)(6,765)(12,353)
Long-term debt1,326 (1,057)269 2,336 (614)1,722 
Total borrowed funds1,205 (1,350)(145)(3,252)(7,379)(10,631)
Total interest-bearing liabilities1,453 684 2,137 (33,934)9,543 (24,391)
Net interest income
$(1,571)$3,788 $2,217 $(13,151)$23,591 $10,440 
(1) Loans held for sale and nonaccrual loans are included in gross loans.
NONINTEREST INCOME

Three months endedNine months ended
(Dollars in thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Noninterest income
Service charges on deposit accounts$7,829 $7,766 $23,058 $21,647 
Wealth management fees7,351 7,787 23,275 20,758 
Bankcard income3,589 3,737 10,636 10,740 
Client derivative fees1,876 1,674 5,121 3,173 
Foreign exchange income16,666 13,760 42,970 39,270 
Leasing business income20,997 20,797 60,497 48,228 
Net gain from sales of loans6,835 6,687 17,844 13,284 
Net gain (loss) on investment securities(42)243 (9,748)(22,719)
Other8,424 5,612 19,018 19,333 
Total noninterest income$73,525 $68,063 $192,671 $153,714 

Linked quarter comparison: Third quarter 2025 noninterest income was $73.5 million, increasing $5.5 million, or 8.0%, compared to $68.1 million for the second quarter of 2025. The increase from the linked quarter was primarily driven by foreign exchange income and other noninterest income. Foreign exchange income increased $2.9 million, or 21.1%, as client demand increased during the period, while other noninterest income increased $2.8 million, or 50.1%, due to higher syndication fees and higher income earned on other investments.

Year-to-date comparison: Noninterest income of $192.7 million for the first nine months of 2025 increased $39.0 million, or 25.3%, from $153.7 million in the comparable period of 2024. The increase was primarily attributed to higher leasing business income, higher net gains from sales of loans, fewer losses on the sales of investment securities, higher foreign exchange income, higher service charges on deposit accounts, higher client derivative fees, and higher wealth management fees. Leasing business income increased $12.3 million, or 25.4%, due to continued growth in operating lease balances and an increase in income from lease sales. Foreign exchange income increased $3.7 million, or 9.4%, as client demand increased during the period. Net gains from sales of loans increased $4.6 million, or 34.3%, primarily due to higher mortgage demand, while wealth management fee income increased $2.5 million, or 12.1%, due to higher business succession and consulting fee income. Client derivative fees increased $1.9 million, or 61.4%, due to higher demand for the product, while service charges on deposit accounts increased $1.4 million, or 6.5%, due to an increase in overdraft and account analysis fees. Losses on investment securities decreased $13.0 million in the first nine months of 2025 compared to the same period in the prior year due to higher
57
losses recognized from the repositioning of a portion of the investment portfolio and impairment losses on two skilled nursing investments in the prior year.

NONINTEREST EXPENSE

Three months endedNine months ended
(Dollars in thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024
Noninterest expenses
Salaries and employee benefits$80,607 $74,917 $230,762 $224,075 
Net occupancy6,003 5,845 17,867 17,635 
Furniture and equipment3,582 3,441 10,836 10,951 
Data processing9,591 9,020 27,370 26,039 
Marketing2,359 2,737 7,114 6,822 
Communication695 681 2,188 2,462 
Professional services2,314 3,549 8,602 7,456 
Amortization of tax credit investments112 111 335 94 
State intangible tax1,531 1,517 3,925 2,628 
FDIC assessments2,611 2,611 8,281 8,473 
Intangible amortization2,359 2,358 7,076 7,092 
Leasing business expense13,911 13,155 39,868 31,781 
Other8,594 8,729 26,792 26,180 
Total noninterest expenses$134,269 $128,671 $391,016 $371,688 

Linked quarter comparison: Third quarter 2025 noninterest expense was $134.3 million, which was an increase of $5.6 million, or 4.4%, from $128.7 million in the second quarter of 2025. This increase was primarily driven by higher salaries and benefits expense, leasing business expense, and data processing expense, which were partially offset by lower professional services expenses. Salaries and employee benefits expenses increased $5.7 million, or 7.6%, due to higher incentive compensation, which is tied to fee income. Leasing business expenses increased $0.8 million, or 5.7%, as a result of growth in the operating lease portfolio while data processing expenses increased $0.6 million, or 6.3%, due to acquisition-related expenses in the current period. Professional services expenses decreased $1.2 million, or 34.8%, due to fewer expenses related to the Company's efficiency efforts and fewer acquisition-related expenses during the third quarter.
Year-to-date comparison: Noninterest expenses were $391.0 million for the first nine months of 2025, which was an increase of $19.3 million, or 5.2%, compared to the same period in 2024. This increase was primarily due to higher leasing business expenses, salaries and employee benefits, data processing, professional services, and state intangible taxes. Leasing business expenses increased $8.1 million, or 25.4%, as a result of the growth in the operating lease portfolio, while professional services increased $1.1 million, or 15.4%, due to expenses related to the Company's efficiency efforts and acquisition-related costs in 2025. Salaries and benefits expense increased $6.7 million, or 3.0%, which was driven by higher incentive compensation tied to fee income. Data processing increased $1.3 million, or 5.1%, due to higher software licensing costs while state intangible taxes increased $1.3 million, or 49.4%, primarily due to an increase in Ohio franchise tax.

INCOME TAXES

Linked quarter comparison: In the third quarter of 2025, First Financial recorded income tax expense of $18.8 million on pre-tax income of $90.7 million, resulting in an effective tax rate of 20.7%. This compared to income tax expense of $17.9 million on pre-tax income of $87.9 million and an effective tax rate of 20.3% for the second quarter 2025. The higher effective tax rate in the third quarter was primarily driven by higher taxable income and fewer tax credit investments recognized.

Year-to-date comparison: For the first nine months of 2025, income tax expense was $48.9 million on pre-tax income of $242.1 million, resulting in an effective tax rate of 20.2%. This compared to income tax expense of $37.5 million on pre-tax income of $201.4 million and an effective tax rate of 18.6% for the comparable period in 2024. The higher effective tax rate in 2025 compared to 2024 is primarily driven by higher taxable income and fewer tax credit investments recognized.

58
The Company's effective tax rate may fluctuate from period to period due to changes in tax jurisdictions, forecasted income, tax-enhanced assets and tax credit investments.

INVESTMENTS

First Financial's investment portfolio totaled $3.6 billion at September 30, 2025 and $3.4 billion at December 31, 2024, or 19.5% and 18.2% of total assets, respectively.  AFS securities totaled $3.4 billion at September 30, 2025 and $3.2 billion at December 31, 2024, while HTM securities totaled $71.6 million at September 30, 2025 and $77.0 million at December 31, 2024. The effective duration of the investment portfolio was 4.3 years at September 30, 2025 and 4.4 years at December 31, 2024.

The Company invests in certain securities whose return is dependent on future principal and interest repayments. As such, these securities carry a certain amount of credit risk. Prior to purchase, First Financial performs a detailed collateral and structural analysis on these securities and strategically invests in asset classes in which First Financial has expertise and experience, as well as a senior position in the capital structure. First Financial continuously monitors credit risk and geographic concentration risk in its evaluation of market opportunities that enhance the overall performance of the portfolio.

During the nine months ended September 30, 2025 and 2024, the Company realized $9.7 million and $22.7 million, respectively, of losses on investment securities. The losses included $6.5 million in 2025 and $13.2 million in 2024, as a result of strategically repositioning portions of the investment portfolio in an effort to increase future yields. The losses also included $3.4 million, and $9.7 million, in 2025 and 2024, respectively, of impairment losses on two commercial mortgage backed securities where the underlying collateral consisted of skilled nursing facilities with credit deterioration.

The Company's Consolidated Financial Statements reflected $193.0 million and $256.5 million of unrealized, after-tax, losses on debt securities as of September 30, 2025 and December 31, 2024, respectively. These unrealized losses were included as a component of equity in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and were primarily driven by multiple interest rate increases from November 2022 through July 2023. The decline in the unrealized losses during the current period was primarily attributed to the recent easing of interest rates.

The Company had net unrealized losses of $5.7 million and $8.0 million on its HTM securities at September 30, 2025 and December 31, 2024, respectively. Similar to the unrealized losses on AFS securities, this decline in unrealized losses was driven by lower interest rates. The unrealized losses on HTM securities have no impact on the Consolidated Financial Statements of the Company.

The Company had $0.2 million of unrealized gains on equity securities recorded in noninterest income for the nine months ended September 30, 2025 compared to $0.3 million of unrealized gains for the same period of 2024.

First Financial will continue to monitor loan demand and deposit activity, as well as balance sheet composition, capital sensitivity and the interest rate environment, when considering future investment strategies.

LOANS AND LEASES

Excluding loans held for sale, loan balances decreased $47.2 million, or 0.4%, to $11.7 billion as of September 30, 2025 when compared to December 31, 2024. Construction loans decreased $151.5 million, or 19.4%, to $628.0 million; installment loans decreased $23.3 million, or 17.5%, to $109.8 million; commercial real estate loans decreased $13.4 million, or 0.3%, to $4.0 billion; and finance leases decreased by $1.3 million, or 0.2%, to $596.7 million. Partially offsetting these decreases, home equity increased $86.9 million, or 10.2%, to $936.0 million; residential real estate loans increased $32.2 million, or 2.2%, to $1.5 billion; C&I loans increased $22.8 million, or 0.6%, to $3.8 billion; and credit cards increased $0.3 million, or 0.6%, to $62.7 million.
Third quarter 2025 average loans of $11.8 billion, excluding loans held for sale, increased $11.9 million, or 0.1%, from the second quarter 2025. The modest growth over the linked quarter included an increase of $34.8 million, or 0.9%, in CRE; an increase of $27.6 million, or 3.1%, in home equity; an increase of $11.4 million, or 2.0%, in finance leases; an increase of $9.9 million, or 0.3%, in C&I; and an increase of $4.5 million, or 0.3%, in residential real estate. These increases were partially offset by a decrease of $73.0 million, or 9.3%, in construction real estate; and a decrease of $3.7 million, or 3.1%, in installment loans.

59
Through the first nine months of 2025, average loans of $11.8 billion, excluding loans held for sale, increased $420.7 million, or 3.7%, from the comparable period of 2024. The increase from prior year reflected broad-based growth across many loan categories, which included an increase of $192.1 million, or 5.2%, in C&I loans; an increase of $117.7 million, or 8.6%, in residential real estate; an increase of $100.9 million, or 12.8%, in home equity; an increase of $79.6 million, or 11.6%, in real estate construction; and an increase of $72.5 million, or 14.1%, in lease financing. Partially offsetting these increases was a decrease of $112.4 million, or 2.7%, in CRE; and a decrease of $31.2 million, or 20.7%, in installment loans.

In an effort to mitigate credit risk, First Financial routinely reviews its loan portfolio for various concentrations. These reviews consider the Bank's collateral position as well as exposure to a given industry sector. First Financial believes its loan portfolio is sufficiently diversified to provide protection from deterioration in any particular industry or devaluation of a specific collateral type. The following tables, C&I and Owner Occupied Loans by Sector and Investor CRE Loans by property type, provide additional detail behind the Company's C&I and CRE loan portfolios as of September 30, 2025.

C&I and Owner Occupied CRE Loans by Sector (1)
(Dollars in thousands)September 30, 2025% of Total Loans
NAICS Sector
Finance and Insurance$1,134,316 9.7 %
Manufacturing540,118 4.6 %
Construction384,726 3.3 %
Real Estate and Rental and Leasing351,854 3.0 %
Professional, Scientific, and Technical Services289,550 2.5 %
Health Care and Social Assistance281,919 2.4 %
Retail Trade256,065 2.2 %
Accommodation and Food Services254,313 2.2 %
Wholesale Trade212,694 1.8 %
Agriculture, Forestry, Fishing and Hunting164,144 1.4 %
Transportation and Warehousing142,114 1.2 %
Administrative and Support and Waste Management 141,106 1.2 %
Other Services (except Public Administration)118,377 1.0 %
Arts, Entertainment, and Recreation77,042 0.7 %
Information64,168 0.5 %
Public Administration59,319 0.5 %
Other354,950 3.0 %
Total$4,826,775 41.2 %
(1) Excludes loan marks and loans in process

60
Investor CRE Loans by Property Type (1)
(Dollars in thousands)September 30, 2025% of Total Loans
Property Type
Residential Multi Family 5+ $1,021,606 8.7 %
Retail Property 782,886 6.7 %
Industrial 366,477 3.1 %
Office347,513 3.0 %
Hospital/Nursing Home 200,045 1.7 %
Hotel 135,634 1.2 %
Land 93,829 0.8 %
Residential 1-4 Family 72,128 0.6 %
Other45,287 0.4 %
Total$3,065,405 26.2 %
(1) Excludes loan marks and loans in process
Additionally, given the potential for stress related to commercial office space, First Financial regularly monitors its exposure to this sector. As of September 30, 2025, First Financial had $347.5 million of loans collateralized by non-owner occupied office space, which represents 3.0% of the total loan portfolio. The overall LTV of the office portfolio at origination was strong, and a majority is located in suburban locations and secured by Class A and Class B assets. As of September 30, 2025, the office portfolio included one nonaccrual relationship totaling $12.5 million, or 3.6% of the portfolio.

COMMITMENTS AND CONTINGENCIES

Off-balance sheet arrangements include commitments to extend credit and financial guarantees.  Loan commitments are agreements to extend credit to a client absent any violation of any condition established in the commitment agreement. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  First Financial had outstanding commitments to extend credit, including overdraft lending lines, totaling $4.1 billion at September 30, 2025 and $3.8 billion at December 31, 2024. As of September 30, 2025, commitments with a fixed interest rate totaled $71.1 million while commitments with variable interest rates totaled $4.0 billion. At December 31, 2024, commitments with a fixed interest rate totaled $69.3 million while commitments with variable interest rates totaled $3.7 billion. The fixed rate commitments have interest rates ranging from 0% to 21% at both September 30, 2025 and December 31, 2024. The fixed rate commitments have maturities ranging from less than one year to 31.0 years at September 30, 2025 and maturities ranging from less than one year to 31.6 years at December 31, 2024.

Letters of credit are conditional commitments issued by First Financial to guarantee the performance of a client to a third party.  First Financial’s letters of credit consist primarily of performance assurances made on behalf of clients who have a contractual commitment to produce or deliver goods or services for the third party.  First Financial issued letters of credit aggregating $26.5 million and $25.1 million at September 30, 2025 and December 31, 2024, respectively. Management conducts regular reviews of these instruments on an individual client basis.

First Financial is a party in risk participation transactions of interest rate swaps, which had total notional amount of $298.2 million and $310.7 million at September 30, 2025 and December 31, 2024, respectively. Under a risk participation agreement, the Company either assumes or sells a portion of the credit exposure associated with an interest rate swap with a counterparty. The Company's exposure is limited to instances where the loan customer defaults on its obligation to perform under the interest rate swap agreement.

First Financial is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects. These investments are included in accrued interest and other assets in the Consolidated Balance Sheets, with any unfunded commitments included in accrued interest and other liabilities in the Consolidated Balance Sheets. As of September 30, 2025, First Financial expects to recover its remaining investments through the use of the tax credits generated by the investments. First Financial had unfunded commitments related to tax credit investments of $97.0 million and $79.8 million at September 30, 2025 and December 31, 2024, respectively.

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As part of the ordinary course of business, First Financial and its subsidiaries are parties to litigation, including claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, foreclosure interests that are incidental to our regular business activities and other matters. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, it is appropriate under FASB ASC Topic 450, Contingencies, for First Financial to accrue a contingency reserve if a loss is deemed based upon the advice of legal counsel to be both probable and reasonably estimated. First Financial had no reserves related to litigation matters as of September 30, 2025 and December 31, 2024.

ASSET QUALITY AND ALLOWANCE FOR CREDIT LOSSES

Loans are classified as nonaccrual when, in the opinion of management, collection of principal and interest is doubtful or when payments are 90 days or more past due. Generally, loans are classified as nonaccrual due to a borrower's continued failure to adhere to contractual payment terms, coupled with other pertinent factors. When a loan is placed on nonaccrual status, any unpaid accrued interest is reversed and the recognition of interest income is suspended.

Nonaccrual loans were $76.0 million, or 0.65% of total loans, as of September 30, 2025, reflecting a $10.0 million, or 15.1%, increase from $66.0 million as of December 31, 2024. The increase was primarily attributed to the downgrade of two large C&I credits during the current period, partially offset by the sale of a large construction credit. Nonperforming assets, which consist of nonaccrual loans and OREO, were $76.1 million, or 0.41% of total assets, at September 30, 2025 compared to $66.0 million, or 0.36% of total assets, at December 31, 2024.

Classified assets, which are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse, totaled $218.8 million as of September 30, 2025 compared to $224.1 million at December 31, 2024. Classified assets were 1.18% of total assets at September 30, 2025, compared to 1.21% as of December 31, 2024. At September 30, 2025, total classified assets included a $37.0 million receivable from a customer, which was recorded following the mutually agreed upon termination of a foreign exchange trade and is expected to be collected in full. This receivable was $45.0 million at December 31, 2024.

Allowance for credit losses. The ACL is a reserve accumulated on the Consolidated Balance Sheets through the recognition of the provision for credit losses. First Financial records provision expense in the Consolidated Statements of Income to maintain the ACL at a level considered sufficient to absorb expected credit losses for financial assets over their expected remaining lives with consideration given to current and forward-looking information.

The recorded adjustments to remove or reduce values of the loans and leases from the Consolidated Balance Sheets due to credit deterioration are referred to as charge-offs. First Financial's policy is to charge-off all or a portion of a loan when, in management's opinion, it is unlikely to collect the principal amount owed in full either through payments from the borrower or from the liquidation of collateral. All loans charged-off are subject to continuous review and concerted efforts are made to maximize any recovery. In most cases, the borrower’s debt obligation is not canceled even though the loan balance may have been charged-off. Actual losses on loans and leases are posted against the ACL as a charge-off. Any subsequent collection of a previously charged-off loan is credited back to the ACL as a recovery.

Management estimates the ACL using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience paired with economic forecasts provide the basis for the quantitatively modeled estimation of expected credit losses. First Financial adjusts its quantitative model, as necessary, to reflect conditions not already considered therein. These adjustments are commonly known as the qualitative framework. The evaluation of these factors is the responsibility of the ACL Committee, which is comprised of senior officers from the risk management, credit administration, finance and lending areas.

The Company utilized the Moody's September baseline forecast as its R&S forecast in the quantitative model at September 30, 2025. For reasonableness, the Company also considered the impact to the model from alternative prepayment speeds and more adverse economic forecasts. These alternative analyses were utilized to inform the Company's qualitative adjustments. Additionally, First Financial considered its credit exposure to certain industries believed to be at risk for future credit stress, such as franchise, hotel and investor commercial real estate lending, when making qualitative adjustments to the ACL model.

The total ACL, which includes both funded and unfunded reserves, was $179.5 million at September 30, 2025 and $173.7 million as of December 31, 2024.

62
ACL - loans and leases. The ACL on loans and leases was $161.9 million as of September 30, 2025 and $156.8 million as of December 31, 2024. As a percentage of total loans, the ACL was 1.38% as of September 30, 2025 and 1.33% at December 31, 2024.

In the third quarter of 2025, the Company recorded net charge-offs of $5.2 million, or 18 bps of average loans and leases on an annualized basis, compared to net charge-offs of $6.0 million, or 21 bps, for the second quarter of 2025. Through the first nine months of 2025, the Company recorded net charge-offs of $21.7 million, or 25 bps of average loans and leases on an annualized basis, compared to net charge-offs of $22.1 million, or 26 bps, for the same period of 2024.

The ACL as a percentage of nonaccrual loans was 213.2% at September 30, 2025 and 237.7% at December 31, 2024. The decrease in this ratio was driven primarily by the increase in nonaccrual loan balances during the current period.

Provision expense is a product of the Company's ACL model coupled with net charge-off activity during the period. During third quarter of 2025, the Company recorded $8.6 million of provision expense for loans and leases compared to $9.1 million for the prior quarter. Through the first nine months of 2025, the Company recorded provision expense of $26.8 million compared to $39.5 million for the same period of 2024.

ACL - unfunded commitments. The ACL on unfunded commitments was $17.6 million as of September 30, 2025 and $16.9 million as of December 31, 2024. First Financial recorded $0.5 million of provision expense for credit losses on unfunded commitments for the third quarter of 2025, compared to $0.7 million of provision expense in the second quarter 2025. Through the first nine months of 2025, the Company recorded a provision expense of $0.7 million compared to $1.3 million of provision recapture for the same period of 2024.

See Note 5 – Allowance for Credit Losses in the Notes to Consolidated Financial Statements for further discussion of First Financial's ACL.

The following table details ACL activity by portfolio segment for the periods presented:
 Three months endedNine months ended
 20252024September 30,
(Dollars in thousands)Sep. 30,June 30,Mar. 31,Dec. 31,Sep. 30,20252024
Allowance for credit loss activity 
Balance at beginning of period$158,522 $155,482 $156,791 $158,831 $156,185 $156,791 $141,433 
Provision for loan losses8,612 9,084 9,141 9,705 9,930 26,837 39,506 
Gross charge-offs
Commercial and industrial2,165 4,996 8,178 4,333 5,471 15,339 10,315 
Lease financing298 606 1,454 2,831 368 2,358 561 
Construction real estate245 0 0 0 0 245 0 
Commercial real estate3,105 0 0 5,051 261 3,105 5,582 
Residential real estate0 16 0 12 60 16 131 
Home equity92 100 86 210 90 278 237 
Installment1,194 1,120 1,321 1,680 1,510 3,635 5,780 
Credit card577 489 474 492 768 1,540 2,094 
Total gross charge-offs7,676 7,327 11,513 14,609 8,528 26,516 24,700 
Recoveries
Commercial and industrial202 290 195 1,779 434 687 832 
Lease financing291 11 29 17 11 331 71 
Construction real estate0 0 0 0 0 0 0 
Commercial real estate1,138 70 24 19 25 1,232 200 
Residential real estate58 42 24 23 22 124 83 
Home equity94 74 144 222 240 312 438 
Installment609 716 563 499 421 1,888 785 
Credit card66 80 84 305 91 230 183 
Total recoveries2,458 1,283 1,063 2,864 1,244 4,804 2,592 
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 Three months endedNine months ended
 20252024September 30,
(Dollars in thousands)Sep. 30,June 30,Mar. 31,Dec. 31,Sep. 30,20252024
Total net charge-offs5,218 6,044 10,450 11,745 7,284 21,712 22,108 
Ending allowance for credit losses$161,916 $158,522 $155,482 $156,791 $158,831 $161,916 $158,831 
Net charge-offs to average loans and leases (annualized) 
Commercial and industrial0.20 %0.49 %0.85 %0.27 %0.54 %0.51 %0.35 %
Lease financing0.00 %0.41 %0.99 %1.91 %0.26 %0.46 %0.13 %
Construction real estate0.14 %0.00 %0.00 %0.00 %0.00 %0.04 %0.00 %
Commercial real estate0.20 %(0.01)%0.00 %0.49 %0.02 %0.06 %0.18 %
Residential real estate(0.02)%(0.01)%(0.01)%0.00 %0.01 %(0.01)%0.00 %
Home equity0.00 %0.01 %(0.03)%(0.01)%(0.07)%(0.01)%(0.03)%
Installment2.03 %1.38 %2.42 %3.43 %3.03 %1.95 %4.42 %
Credit card2.97 %2.41 %2.40 %1.13 %4.13 %2.60 %3.88 %
Total net charge-offs0.18 %0.21 %0.36 %0.40 %0.25 %0.25 %0.26 %
Nonperforming assets
Nonaccrual loans$75,951 $76,924 $59,555 $65,973 $65,439 $75,951 $65,439 
Other real estate owned111 204 213 64 30 111 30 
Total nonperforming assets76,062 77,128 59,768 66,037 65,469 76,062 65,469 
Accruing loans past due 90 days or more592 714 228 361 463 592 463 
Total underperforming assets$76,654 $77,842 $59,996 $66,398 $65,932 $76,654 $65,932 
Total classified assets$218,794 $214,346 $213,351 $224,084 $206,194 $218,794 $206,194 
Credit quality ratios
As a percent of period-end loans, net of unearned income:
Allowance for credit losses1.38 %1.34 %1.33 %1.33 %1.37 %1.38 %1.37 %
Nonaccrual loans0.65 %0.65 %0.51 %0.56 %0.57 %0.65 %0.57 %
Nonperforming loans0.65 %0.65 %0.51 %0.56 %0.57 %0.65 %0.57 %
Allowance for credit losses to nonaccrual loans213.18 %206.08 %261.07 %237.66 %242.72 %213.18 %242.72 %

DEPOSITS AND FUNDING

Total deposits were $14.4 billion as of September 30, 2025, an increase of $104.3 million, or 0.7%, from December 31, 2024. This increase was primarily driven by an increase of $80.3 million, or 1.6%, in savings deposits, and an increase of $141.4 million, or 4.5%, in time deposits. Partially offsetting these increases, interest-bearing deposits declined $112.6 million, or 3.6%, from the prior period.

Average deposits for the third quarter of 2025 were $14.5 billion, which was an increase of $157.2 million, or 1.1%, from $14.4 billion for the second quarter of 2025. Average time deposits increased $157.6 million, or 5.0%, and savings deposits increased $49.0 million, or 1.0%, from the prior quarter. Partially offsetting these increases, average interest bearing demand deposits decreased $30.7 million, or 1.0%, and average noninterest-bearing deposits decreased $18.8 million, or 0.6%, from the prior period.

Average deposits for the first nine months of 2025 increased $800.6 million, or 5.9%, when compared to the same period of 2024. This change was driven by a $422.0 million, or 9.2%, increase in average savings deposits; a $234.3 million, or 7.9%, increase in average time deposits; and a $164.7 million, or 5.7%, increase in average interest-bearing demand deposits. These increases were partially offset by a $20.4 million, or 0.6%, decrease in average noninterest-bearing demand deposits.
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Uninsured deposit balances were $6.1 billion, or 42.1% of total deposits, as of September 30, 2025. The Company reviews uninsured deposits for concentration risk, and typically evaluates this risk by excluding public funds and intercompany deposits to arrive at an adjusted uninsured deposit amount. As such, excluding public funds and intercompany accounts, adjusted uninsured deposits were $3.8 billion, or 26.0% of total deposits, at the end of the third quarter.

First Financial maintains diverse funding sources, including Fed Funds, the Fed discount window, brokered CDs, FHLB borrowings and deposit placement services. The Company believes this diversity and related capacity provide sufficient flexibility to respond to any event that would stress its deposit balances.

Borrowed funds were $817.0 million as of September 30, 2025 and $1.1 billion as of December 31, 2024. The decrease in borrowings was primarily attributed to the maturity and subsequent redemption of $120.0 million of subordinated debt during the third quarter of 2025, along with an increase in deposits.

First Financial had total short-term borrowings of $595.2 million as of September 30, 2025 and $755.5 million as of December 31, 2024. Short-term borrowings with the FHLB were $550.0 million at September 30, 2025 and $625.0 million at December 31, 2024. There were no federal funds purchased included in short-term borrowings at September 30, 2025 or December 31, 2024.

Long-term debt, which may include subordinated notes, FRB/FHLB long-term advances or other borrowings, was $221.8 million at September 30, 2025 and $347.5 million as of December 31, 2024. Outstanding subordinated debt totaled $194.0 million as of September 30, 2025 and $313.4 million as of December 31, 2024. The outstanding subordinated debt includes $150.0 million at an initial fixed interest rate of 5.25%, which converted to a floating rate in May 2025. The floating rate is based upon the three month term SOFR plus 509 basis points. As of September 30, 2025, the interest rate on this subordinated debt was 9.30%. Additionally, the Company had $120.0 million of subordinated debt with a fixed interest rate of 5.13% that matured in August 2025, and was redeemed upon maturity.

First Financial had no FHLB long-term advances at September 30, 2025 or December 31, 2024. First Financial's total remaining borrowing capacity from the FHLB was $1.1 billion as of September 30, 2025.

See Note 9 – Borrowings in the Notes to Consolidated Financial Statements for further discussion of First Financial's borrowed funds.

LIQUIDITY

Liquidity management is the process by which First Financial manages the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost. These funding commitments include withdrawals by depositors, credit commitments to borrowers, shareholder dividends, share repurchases, operating expenses and capital expenditures. Liquidity is derived primarily from deposit growth, principal and interest payments on loans and investment securities, maturing loans and investment securities, and access to wholesale funding sources.

First Financial’s most stable source of liability-funded liquidity for both long and short-term needs is deposit growth and retention of the core deposit base. In addition to core deposit funding, First Financial also utilizes a variety of other short and long-term funding sources, which include subordinated notes, longer-term advances from the FRB and FHLB and its short-term line of credit.

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Both First Financial and the Bank received investment grade credit ratings from Kroll Bond Rating Agency, Inc, an independent rating agency. These credit ratings impact the cost and availability of financing to First Financial, and a downgrade to these credit ratings could affect First Financial's or the Bank’s ability to access the credit markets and potentially increase borrowing costs, negatively impacting financial condition and liquidity. Key factors in maintaining high credit ratings include consistent and diverse earnings, strong credit quality and capital ratios, diverse funding sources and disciplined liquidity monitoring procedures. The ratings of First Financial and the Bank at September 30, 2025 were as follows:
First Financial BancorpFirst Financial Bank
Senior Unsecured DebtBBB+A-
Subordinated DebtBBBBBB+
Short-Term DebtK2K2
DepositN/AA-
Short-Term DepositN/AK2

For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB. First Financial pledged $6.2 billion of certain eligible residential, commercial and farm real estate loans, home equity lines of credit and government, agency, and commercial mortgage-backed securities as collateral for borrowings from the FHLB as of September 30, 2025.  

First Financial's principal source of asset-funded liquidity is marketable investment securities, particularly those of shorter maturities. AFS securities were 98.0% and 97.6% of the total investment portfolio as of September 30, 2025 and December 31, 2024, respectively. The market value of investment securities classified as AFS totaled $3.4 billion at September 30, 2025 and $3.2 billion at December 31, 2024.  As of September 30, 2025, $1.1 billion of AFS securities were unpledged and there were $2.0 billion of securities available to be sold at breakeven. Additionally, $343.1 million of AFS securities have floating rates and could be sold with minimal losses at September 30, 2025.

HTM securities that are maturing within a short period of time can be an additional source of liquidity. As September 30, 2025, the Company had $0.7 million of HTM securities maturing within one year. As of December 31, 2024, the Company had no HTM securities maturing within one year.

In total, First Financial expects $727.6 million of cash flows from its investment portfolio in the next 12 months.

Other sources of liquidity include interest-bearing deposits with other banks. At September 30, 2025, these balances totaled $565.1 million, with the majority being held at the Federal Reserve. Additionally, First Financial had unused and available overnight wholesale funding sources of $5.3 billion, or 28.8% of total assets, to satisfy the liquidity needs of the Company. These funding sources include brokered CDs, deposit placement services, FHLB borrowing capacity, fed funds and the Federal Reserve discount window.

First Financial also has a $40.0 million short-term credit facility with an unaffiliated bank that matures in December 2025. This facility has a variable interest rate and provides First Financial additional liquidity, if needed, for various corporate activities including the repurchase of First Financial common stock and the payment of dividends to shareholders. First Financial had no outstanding balance on this short-term credit facility as of September 30, 2025 and December 31, 2024. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this facility as of September 30, 2025 and December 31, 2024. This credit facility also required First Financial to pledge as collateral the Bank's common stock where the lender is granted a security interest in this collateral.

Certain restrictions exist regarding the Bank's ability to transfer funds to First Financial in the form of cash dividends, loans, other assets or advances and the approval of the Bank's primary federal regulator is required to pay dividends in excess of regulatory limitations.  Dividends paid to First Financial from the Bank totaled $170.0 million for the first nine months of 2025.  As of September 30, 2025, the Bank had retained earnings of $1.0 billion, of which $230.5 million was available for distribution to the Bancorp without prior regulatory approval. As an additional source of liquidity, First Financial had $166.6 million in cash at the parent company as of September 30, 2025.

Share repurchases also impact First Financial's liquidity. For further information regarding share repurchases, see the Capital section that follows.

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Capital expenditures were $12.7 million and $14.1 million for the first nine months of 2025 and 2024, respectively. Management believes sufficient liquidity exists to fund its future capital expenditure commitments.

Management is not aware of any other events or regulatory requirements that, if implemented, are likely to have a material effect on First Financial’s liquidity.

CAPITAL

Risk-based capital. The Board of Governors of the Federal Reserve System approved Basel III in order to strengthen the regulatory capital framework for all banking organizations. Basel III established and defined quantitative measures to ensure capital adequacy. These measures require First Financial to maintain minimum amounts and ratios of Common equity Tier 1 capital, Total and Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets (Leverage ratio).

The Basel III Final Capital Rule includes a minimum ratio of Common equity Tier 1 capital to risk-weighted assets of 7.0%, a minimum ratio of Tier 1 capital to risk-weighted assets of 8.5%, a minimum required Total risk-based capital ratio of 10.5% and a minimum leverage ratio of 4.0%. Failure to maintain the required Common equity Tier 1 capital will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and pay discretionary compensation to its employees.  The capital requirements also provide strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans.

First Financial's tier 1 capital increased 75 bps to 13.23% at September 30, 2025 compared to 12.48% at December 31, 2024, while the total capital ratio increased to 15.32% at September 30, 2025 compared to 14.64% at December 31, 2024. The leverage ratio increased to 10.50% at September 30, 2025 from 9.98% at December 31, 2024. The Company’s tangible common equity ratio increased to 8.87% at September 30, 2025 from 7.73% at December 31, 2024, while the Company's tangible book value per share increased to $16.19 at September 30, 2025 from $14.15 at December 31, 2024. These increases are primarily a result of the Company's strong earnings. Additionally, the increase in capital metrics was impacted by the improvement in AOCI, which was due to fewer unrealized losses on the investment securities portfolio resulting from lower interest rates and a partial repositioning of the portfolio.

As of September 30, 2025, management believes that First Financial met all capital adequacy requirements to which it was subject.  The Company's most recent regulatory notifications categorized First Financial as "well-capitalized" under the regulatory framework for prompt corrective action. There have been no conditions or events since those notifications that management believes have changed the Company's categorization. Total regulatory capital exceeded the minimum requirement by $683.0 million on a consolidated basis at September 30, 2025. 

The following tables present the actual and required capital amounts and ratios as of September 30, 2025 and December 31, 2024 under the Basel III Final Capital Rules. Capital levels required to be considered "well capitalized" are based upon prompt corrective action regulations, as amended by the Basel III Final Capital Rules.
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 ActualMinimum capital
required		PCA requirement to be
considered well
capitalized
(Dollars in thousands)Capital
amount		RatioCapital
amount		RatioCapital
amount		Ratio
September 30, 2025      
Common equity Tier 1 capital to risk-weighted assets
Consolidated$1,828,843 12.91 %$991,685 7.00 %N/AN/A
First Financial Bank1,790,785 12.67 %989,538 7.00 %$918,857 6.50 %
Tier 1 capital to risk-weighted assets
Consolidated1,874,191 13.23 %1,204,189 8.50 %N/AN/A
First Financial Bank1,791,171 12.67 %1,201,582 8.50 %1,130,901 8.00 %
Total capital to risk-weighted assets
Consolidated2,170,546 15.32 %1,487,528 10.50 %N/AN/A
First Financial Bank1,973,909 13.96 %1,484,308 10.50 %1,413,626 10.00 %
Leverage ratio
Consolidated1,874,191 10.50 %713,940 4.00 %N/AN/A
First Financial Bank1,791,171 10.05 %712,842 4.00 %891,052 5.00 %
 ActualMinimum capital
required - Basel III		PCA requirement to be
considered well
capitalized
(Dollars in thousands)Capital
amount		RatioCapital
amount		RatioCapital
amount		Ratio
December 31, 2024      
Common equity tier 1 capital to risk-weighted assets
Consolidated$1,709,422 12.16 %$984,145 7.00 %N/AN/A
First Financial Bank1,751,512 12.48 %982,565 7.00 %$912,382 6.50 %
Tier 1 capital to risk-weighted assets     
Consolidated1,754,584 12.48 %1,195,033 8.50 %N/AN/A
First Financial Bank1,752,054 12.48 %1,193,114 8.50 %1,122,931 8.00 %
Total capital to risk-weighted assets   
Consolidated2,057,877 14.64 %1,476,218 10.50 %N/AN/A
First Financial Bank1,912,456 13.62 %1,473,847 10.50 %1,403,664 10.00 %
Leverage ratio   
Consolidated1,754,584 9.98 %702,969 4.00 %N/AN/A
First Financial Bank1,752,054 9.97 %702,666 4.00 %878,333 5.00 %

Shareholder dividends. First Financial paid a dividend of $0.25 per common share on September 15, 2025 to shareholders of record as of September 2, 2025. Additionally, First Financial's Board of Directors authorized a dividend of $0.25 per common share, payable on December 15, 2025 to shareholders of record as of December 1, 2025.

Share repurchases. First Financial's Board of Directors approved a stock repurchase plan (the 2024 Stock Repurchase Plan) effective January 1, 2024, replacing the 2022 Stock Repurchase Plan. The 2024 Stock Repurchase Plan continues for two years, authorizes the purchase of up to 5,000,000 shares of the Company's common stock, and will expire on December 31, 2025. First Financial did not repurchase any shares under this plan during 2025 or the year ended December 31, 2024.
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Therefore, at September 30, 2025, all 5,000,000 common shares remained available for repurchase under the 2024 Stock Repurchase Plan.

Shareholders' equity. Total shareholders’ equity was $2.6 billion at September 30, 2025 and $2.4 billion at December 31, 2024. The increase from year-end was due the the Company's earnings as well as improvement in AOCI due to lower interest rates.

For further detail, see the Consolidated Statements of Changes in Shareholders’ Equity.

ENTERPRISE RISK MANAGEMENT

First Financial manages risk through a structured ERM approach that routinely assesses the overall level of risk, identifies specific risks and evaluates specific actions to mitigate those risks. First Financial continues to enhance its risk management capabilities and has embedded risk awareness into the culture of the Company.  First Financial has identified eleven types of risk that it monitors in its ERM framework. These risks include financial, credit, liquidity, capital, market (including interest rate and capital markets), regulatory compliance and legal, strategic, reputation, operational, information technology, and cybersecurity.

For a full discussion of these risks, see the Enterprise Risk Management section in Management's Discussion and Analysis in First Financial’s 2024 Annual Report on Form 10-K. The sections that follow provide additional discussion related to credit risk and market risk.

CREDIT RISK

Credit risk represents the risk of loss due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms. First Financial manages credit risk through its underwriting process, periodically reviewing and approving its credit exposures using credit policies and guidelines approved by the Board of Directors.  

MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, foreign exchange rates and equity prices. The primary sources of market risk for First Financial are interest rate risk and liquidity risk.

Interest rate risk. Interest rate risk is the risk to earnings and the value of the Company's equity arising from changes in market interest rates. Interest rate risk arises in the normal course of business to the extent that there is a divergence between the amount of interest-earning assets and the amount of interest-bearing liabilities that are prepaid, withdrawn, re-priced or mature in specified periods. First Financial seeks to achieve consistent growth in net interest income and equity while managing volatility from shifts in market interest rates, while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.

Potential cash flows, sales, or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily from our normal business activities of gathering deposits and extending loans. Many factors affect our exposure to changes in interest rates, such as general economic and financial conditions, client preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. The Company's earnings can also be affected by the monetary and fiscal policies of the U.S. Government and its agencies, particularly the Federal Reserve.

In managing interest rate risk, the Company establishes guidelines and strategies for asset and liability management, including measurement of short and long-term sensitivities to changes in interest rates, through its Balance Sheet Strategies and Asset Liability Committee, which is comprised of senior officers from the treasury, risk management, credit administration, finance and lending areas. These guidelines and strategies are also reviewed with the Capital Markets Committee of the Board of Directors.

First Financial monitors its interest rate risk position using income simulation models and EVE sensitivity analyses that capture both short-term and long-term interest rate risk exposure.  Income simulation involves forecasting NII under a variety of interest rate scenarios. EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest rate scenarios. First Financial uses EVE sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital.  For both NII and EVE modeling, First Financial leverages instantaneous parallel shocks to
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evaluate interest rate risk exposure across rising and falling rate scenarios. Additional scenarios evaluated include various non-parallel yield curve twists.

First Financial’s interest rate risk models are based on the contractual and assumed cash flows and repricing characteristics for the Company’s assets, liabilities and off-balance sheet exposure. A number of assumptions are also incorporated into the interest rate risk models, including prepayment behaviors and repricing spreads for assets in addition to attrition and repricing rates for liabilities. Assumptions are primarily derived from behavior studies of the Company’s historical client base and are continually refined. Modeling the sensitivity of NII and EVE to changes in market interest rates is highly dependent on the assumptions incorporated into the modeling process.

Non-maturity deposit modeling is particularly dependent on the assumption for repricing sensitivity known as a beta. Beta is the amount by which First Financial’s interest bearing non-maturity deposit rates will increase when short-term interest rates rise. The Company utilized a weighted average deposit beta of 46% in its interest rate risk modeling as of September 30, 2025. First Financial also includes an assumption for the migration of non-maturity deposit balances into CDs and money markets for all upward rate scenarios beginning with the +100 bps scenario, thereby increasing deposit costs and reducing asset sensitivity.

Presented below is the estimated impact on First Financial’s NII and EVE position as of September 30, 2025, assuming immediate, parallel shifts in interest rates:
% Change from base case for
 immediate parallel changes in rates
 -100 bps+100 bps+200 bps
NII-Year 1(4.43)%3.23 %5.61 %
NII-Year 2(5.33)%3.59 %6.10 %
EVE(2.80)%1.33 %2.14 %

“Risk-neutral” refers to the absence of a strong bias toward either asset or liability sensitivity. “Asset sensitivity” is when a company's interest-earning assets reprice more quickly or in greater quantities than interest-bearing liabilities. Conversely, “liability sensitivity” is when a company's interest-bearing liabilities reprice more quickly or in greater quantities than interest-earning assets. In a rising interest rate environment, asset sensitivity results in higher net interest income while liability sensitivity results in lower net interest income. In a declining interest rate environment, asset sensitivity results in lower net interest income while liability sensitivity results in higher net interest income.

The projected results for NII and EVE reflect an asset sensitive position. Deposit growth remains concentrated in rate sensitive product types and is modestly decreasing asset sensitivity. Variances in the sensitivity between up and down scenarios are driven by an assumed compositional shift in the funding makeup of the rate scenarios. First Financial continues to manage its balance sheet with a bias toward asset sensitivity while simultaneously balancing the potential earnings impact of this strategy.

First Financial continually evaluates the sensitivity of its interest rate risk position to modeling assumptions. The following table reflects First Financial’s estimated NII sensitivity profile as of September 30, 2025 assuming a 25% increase and a 25% reduction to the beta assumption on managed rate deposits:
Beta sensitivity (% change from base)
+100 BP+200 BP
Beta 25% lowerBeta 25% higherBeta 25% lowerBeta 25% higher
NII-Year 14.57 %1.90 %6.97 %4.25 %
NII-Year 24.89 %2.29 %7.42 %4.78 %

See the Net Interest Income section of Management’s Discussion and Analysis for further discussion.

Liquidity risk. Liquidity risk is the potential that an entity will be unable to meet its obligations as they come due because of an inability to liquidate assets, or obtain funding or that it cannot easily unwind or offset exposures without significantly lowering market prices because of inadequate market depth or market disruptions. Management focuses on maintaining and enhancing liquidity by maximizing collateral-based liquidity availability. First Financial manages liquidity in relation to the trend and stability of deposits; degree and reliance on short-term, volatile sources of funds, including any undue reliance on
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borrowings or brokered deposits to fund longer-term assets. Management identifies, measures, monitors and manages liquidity while seeking to maintain diversification of funding sources, both on- and off-balance-sheet.

Management, including the Balance Sheet Strategies and ALCO, monitors liquidity through a regular review of asset and liability maturities, funding sources, and loan and deposit forecasts. The Company continually refines and updates its liquidity risk management processes, such as refining the contingency funding plan, meeting frequently, and securing additional contingent borrowing capacity. The Company maintains strategic and contingency liquidity plans to ensure sufficient available funding to satisfy requirements for balance sheet growth, properly manage capital market funding sources and to address unexpected liquidity requirements.

Management closely monitors the usage of excess business deposits, the balance of personal deposits and the broader macroeconomic environment. This monitoring includes consideration of various metrics and establishment of internal thresholds related to the composition of the balance sheet, borrowings and liquidity. Balance sheet composition metrics reviewed include the loan to deposit, loans to total assets and core deposits to total assets ratios among others. Borrowing composition monitoring includes, but is not limited to, consideration of borrowing capacity as a percentage of total assets, brokered CDs as a percentage of total assets and Fed funds lines to total assets. Liquidity composition ratios include remaining liquidity to total assets, and tier 1 liquidity sources as a percentage of both 30 and 90 day maturing liabilities, among others. As of September 30, 2025, all metrics reviewed were within the Company's policy limits.

The Company utilizes its contingency funding plan to assess the ability of the Company to successfully navigate significant liquidity events. The contingency funding plan considers various sources of liquidity, including loan and deposit growth rates, decreasing access to secured and unsecured wholesale funding sources and declining financial performance, to determine First Financial’s ability to meet liquidity requirements over certain time horizons and in certain stress scenarios. The contingency funding plan also includes the process for creating a Contingency Funding Task Force. During a liquidity crisis, the CFTF, via the Balance Sheet Strategies and ALCO, would assess and identify key mitigation strategies needed for addressing a liquidity crisis. These mitigation strategies would be assigned to appropriate personnel for implementation with established targets and reporting requirements. Typical mitigation strategies would include, but not be limited to, curtailing loan originations, pricing options for stabilizing/growing deposits, options for expanding wholesale funding sources and asset liquidation options.

For further discussion of the Company's liquidity, please see the Liquidity section within Management's Discussion and Analysis.

CRITICAL ACCOUNTING ESTIMATES

First Financial’s Consolidated Financial Statements are prepared based on the application of the Company's accounting policies.  These policies require the reliance on estimates and assumptions which are inherently subjective and may be susceptible to significant change.  Changes in underlying factors, assumptions or estimates could have a material impact on First Financial’s future financial condition and results of operations. In management’s opinion, some of these estimates and assumptions have a more significant impact than others on First Financial’s financial reporting.  For First Financial, these estimates and assumptions include accounting for the ACL - loans and leases, goodwill, pension and income taxes.  The estimates and assumptions are discussed in detail in the Critical Accounting Estimates section of Management’s Discussion and Analysis in First Financial’s 2024 Annual Report.  There were no changes to the accounting estimates and assumptions for the ACL, goodwill, pension or income taxes during the nine months ended September 30, 2025.

ACCOUNTING AND REGULATORY MATTERS

Note 2 - Recently Adopted and Issued Accounting Standards in the Notes to Consolidated Financial Statements discusses new accounting standards adopted by First Financial in 2025 and 2024, as well as the expected impact of accounting standards issued but not yet adopted.  To the extent the adoption of new accounting standards materially affects financial condition, results of operations or liquidity, the impacts are discussed in the applicable Notes to the Consolidated Financial Statements and sections of Management’s Discussion and Analysis.

FORWARD-LOOKING STATEMENTS
Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as ‘‘believes,’’ ‘‘anticipates,’’ “likely,” “expected,” “estimated,” ‘‘intends’’ and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and
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earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements.  Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements.  Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:

•economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company’s business;
•future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses
•the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry;
•Management’s ability to effectively execute its business plans;
•mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;
•the possibility that any of the anticipated benefits of the Company’s acquisitions will not be realized or will not be realized within the expected time period;
•the effect of changes in accounting policies and practices;
•changes in consumer spending, borrowing and saving and changes in unemployment;
•changes in customers’ performance and creditworthiness;
•the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;  
•current and future economic and market conditions, including the effects of changes in housing prices, fluctuations in unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, trade and tariff policies, and any slowdown in global economic growth;
•our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
•financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
•the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
•the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses;
•a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;
•the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and
•our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2024, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov. 

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing.  Except as required by law, the Company does not assume any obligation to update any forward-looking statement.



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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained in “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk” of this report is incorporated herein by reference in response to this item.

ITEM 4.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures
Management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under
Rule 13a-15 of the Securities Exchange Act of 1934, that are designed to cause the material information required to be disclosed by First Financial in the reports it files or submits under the Securities Exchange Act of 1934 to be recorded, processed, summarized, and reported to the extent applicable within the time periods required by the Securities and Exchange Commission’s rules and forms. In designing and evaluating the disclosure controls and procedures, management recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

As of the end of the period covered by this report, First Financial performed an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting
There were no changes in First Financial's internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, First Financial's internal control over financial reporting.


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PART II-OTHER INFORMATION

Item 1.Legal Proceedings.

There have been no material changes to the disclosure in response to "Part I - Item 3. Legal Proceedings" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Item 1A.Risk Factors.

There are a number of factors that may adversely affect the Company's business, financial results, or stock price. See "Risk Factors" as disclosed in response to "Item 1A. to Part I - Risk Factors" of Form 10-K for the year ended December 31, 2024.

There have been no material changes from the risk factors previously disclosed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
In December 2023 the Board authorized a two-year stock repurchase plan effective January 1, 2024, that provides for the purchase of up to 5,000,000 shares of the common stock of the Company (the “2024 Stock Repurchase Plan”). The Company did not purchase any shares under the 2024 Stock Repurchase Plan in the third quarter of 2025.

Item 5.    Other Information.

During the three months ended September 30, 2025, none of the Company's officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”



74
Table of Content
Item 6.         Exhibits
(a)Exhibits:
Exhibit Number
2.1
2.2
3.1
3.2
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. *
101.SCHInline XBRL Taxonomy Extension Schema. *
101.CALInline XBRL Taxonomy Extension Calculation Linkbase. *
101.DEFInline XBRL Taxonomy Extension Definition Linkbase. *
101.LABInline XBRL Taxonomy Extension Labels Linkbase. *
101.PREInline XBRL Taxonomy Extension Presentation Linkbase. *
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). *
First Financial will furnish, without charge, to a security holder upon request a copy of the documents and will furnish any other Exhibit upon payment of reproduction costs.  Unless as otherwise noted, documents incorporated by reference involve File No. 001-34762.

*    As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections.

** Compensatory plan or arrangement
75
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  FIRST FINANCIAL BANCORP.
  (Registrant)
   
/s/ James M. Anderson  /s/ Scott T. Crawley
James M. Anderson Scott T. Crawley
Executive Vice President and Chief Financial Officer Senior Vice President and Controller
(Principal Accounting Officer)
 
Date11/4/2025Date11/4/2025

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