FIRST FINANCIAL BANCORP /OH/

Previous wording

First Financial Bancorp. is an $18.5 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 March 31, 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 $3.7 billion in assets under management as of March 31, 2025, and provides the following services: financial planning, investment management, trust administration, estate settlement, business succession planning services, brokerage services and retirement planning.

Current wording

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 128 full service banking centers at June 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 $3.8 billion in assets under management as of June 30, 2025, and provides the following services: financial planning, investment management, trust administration, estate settlement, business succession planning services, brokerage services and retirement planning.

Previous wording

The major components of First Financial’s operating results for the three month period ended March 31, 2025 are discussed in greater detail in the sections that follow.

Current wording

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

Previous wording

On February 29, 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.

Current wording

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.

Previous wording

Linked quarter comparison: First quarter 2025 net income was $51.3 million and earnings per diluted common share were $0.54. This compares with fourth quarter 2024 net income of $64.9 million and earnings per diluted common share of $0.68. Return on average assets was 1.13% for the first quarter of 2025 compared to 1.41% for the fourth quarter of 2024. Return on average shareholders’ equity was 8.46% for the first quarter of 2025 compared to 10.57% for the fourth quarter of 2024.

Current wording

Return on average assets was 1.52% for the second quarter of 2025 compared to 1.13% for the first quarter of 2025. Return on average shareholders’ equity was 11.16% for the second quarter of 2025 compared to 8.46% for the first quarter of 2025.

Previous wording

Year-to-date comparison: For the three months ended March 31, 2025, net income was $51.3 million and earnings per diluted common share were $0.54. This compares with net income of $50.7 million and earnings per diluted common share of $0.53 for the first three months of 2024. Return on average assets for the three months ended March 31, 2025 was 1.13% compared to 1.18% for the same period in 2024, and return on average shareholders' equity was 8.46% and 9.00% for the first three months of 2025 and 2024, respectively.

Current wording

Year-to-date comparison: For the six months ended June 30, 2025, net income was $121.3 million and earnings per diluted common share were $1.27. This compares with net income of $111.5 million and earnings per diluted common share of $1.17 for the first six months of 2024. Return on average assets for the six months ended June 30, 2025 was 1.33% compared to 1.28% for the same period in 2024, and return on average shareholders' equity was 9.83% and 9.86% for the first six months of 2025 and 2024, respectively.

Previous wording

Linked quarter comparison: Net interest income for the first quarter of 2025 was $149.3 million, which is a decrease of $5.1 million, or 3.3%, from the fourth quarter of 2024. Net interest margin on a fully tax equivalent basis was 3.88% in first quarter of 2025 compared to 3.94% for the fourth quarter of 2024. Net interest margin during the first quarter declined 6 basis points from the linked quarter as asset yields declined 18 bps and deposit costs decreased 12 bps.

Current wording

Linked quarter comparison: Net interest income for the second quarter of 2025 was $158.3 million, which is an increase of $9.0 million, or 6.0%, from the first quarter of 2025. Net interest margin on a fully tax equivalent basis was 4.05% in the second quarter of 2025 compared to 3.88% for the first quarter of 2025. The net interest margin during the second quarter increased 17 basis points from the linked quarter as asset yields increased 5 bps and funding costs decreased 12 bps.

Previous wording

Interest income of $240.4 million decreased $11.2 million, or 4.4%, in the first quarter of 2025 when compared to the fourth quarter of 2024. This was primarily due to the 16 bp decline in earning asset yields, which included a 22 bp decline in loan yields partially offset by a 7 bp increase in investment securities yields. Average earning assets were $15.8 billion for the first quarter of 2025 compared to $15.7 billion for the fourth quarter of 2024. The change in earning assets included a modest increase in both average loan and average securities balances during the first quarter.

Current wording

Interest income of $245.9 million increased $5.5 million, or 2.3%, in the second quarter of 2025 when compared to the first quarter of 2025. This was primarily due to the 5 bp increase in earning asset yields to 6.24%. Earning assets were $15.8 billion for the second quarter of 2025, an increase of $62.4 million, or 0.4%, compared to the first quarter of 2025. The change in earning assets included a modest increase in both average loan and average securities balances during the period.

Previous wording

Interest expense of $91.1 million decreased $6.0 million, or 6.2%, in the first quarter of 2025 when compared to the fourth quarter of 2024, due to lower interest rates and the Company's strategic focus on managing deposit costs. The Company's total cost of interest bearing deposits decreased 17 bps to 2.86% in the first quarter of 2025, and average deposit balances decreased $99.0 million, or 0.7%, to $14.2 billion. The decline in average deposits was primarily driven by a seasonal decline in public funds coupled with a decrease in brokered CDs. Average borrowed funds increased $146.3 million, or 17.1%, from the linked quarter.

Current wording

Interest expense of $87.6 million decreased $3.5 million, or 3.8%, in the second quarter of 2025 when compared to the first quarter of 2025, primarily due to lower interest rates. The Company's total cost of interest bearing deposits decreased 16 bps to 2.70% in the second quarter of 2025, and average deposit balances increased $114.1 million, or 0.8%, to $14.4 billion. The increase in average deposits was primarily driven by a seasonal increase in public funds. Average borrowed funds decreased $90.8 million, or 9.1%, from the linked quarter.

Previous wording

The notional value of the Company's cash flow hedges was $1.0 billion as of both March 31, 2025 and December 31, 2024, with the $1.6 million and $4.9 million changes in the fair value recorded in AOCI in the Consolidated Balance Sheet, respectively. As of March 31, 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 45 months and 48 months, respectively.

Current wording

The notional value of the Company's cash flow hedges was $1.0 billion as of both June 30, 2025 and December 31, 2024, with the $2.0 million and $4.9 million changes in the fair value recorded in AOCI in the Consolidated Balance Sheets, respectively. As of June 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 42 months and 48 months, respectively.

Previous wording

Year-to-date comparison: Net interest income of $149.3 million for the first three months of 2025 increased $0.6 million, or 0.4%, compared to the same period of 2024. Net interest margin on a fully tax equivalent basis was 3.88% for the three months ended March 31, 2025, which is a decrease of 22 bps when compared to the same period in 2024. Earning asset yields declined 35 bps, which outpaced the 24 bp decline in the cost of interest bearing liabilities.

Current wording

Year-to-date comparison: Net interest income of $307.6 million for the first six months of 2025 increased $5.5 million, or 1.8%, compared to the same period of 2024. Net interest margin on a fully tax equivalent basis was 3.96% for the six months ended June 30, 2025, which is a decrease of 14 bps when compared to the same period in 2024. Earning asset yields declined 44 bps, which outpaced the 40 bp decline in the cost of interest bearing liabilities.

Previous wording

Interest income of $240.4 million for the three months ended March 31, 2025 declined $0.3 million, or 0.1%, compared to $240.7 million for the same period of the prior year as lower interest rates offset the increase in earning asset balances. Average earning assets of $15.8 billion for the first three months of 2025 increased $994.6 million, or 6.7%, when compared to the same period of 2024, driven primarily by a $658.5 million, or 6.0%, increase in average loan balances and a $273.9 million, or 8.7%, increase in average investment securities. While first quarter loan yields declined by 50 bp compared to the same period in the prior year, the average yield on investments increased by 34 bp as a result of rebalancing a portion of the investment portfolio.

Current wording

Interest income of $486.3 million for the six months ended June 30, 2025 declined $7.1 million, or 1.4%, compared to $493.4 million for the same period of the prior year as lower interest rates offset the increase in earning asset balances. Average earning assets of $15.8 billion for the first six months of 2025 increased $818.9 million, or 5.5%, when compared to the same period of 2024, driven primarily by a $505.4 million, or 4.5%, increase in average loan balances and a $310.8 million, or 9.9%, increase in average investment securities. While average loan yields for the six months of 2025 declined by 57 bps compared to the same period in the prior year, the average yield on investments increased by 25 bps as a result of rebalancing a portion of the investment portfolio.

Previous wording

Interest expense for the three months ended March 31, 2025 was $91.1 million compared to $91.9 million for the same period in the prior year. This slight decrease was primarily driven by 16 bp decline in the cost of interest-bearing deposits, which was partially offset by a $1.0 billion, or 10.3%, increase in average interest bearing deposits. Additionally, the cost of borrowed funds declined 53 bps from the same period in the prior year while average borrowings decreased $137.7 million, or 12.1%.

Current wording

Interest expense for the six months ended June 30, 2025 was $178.8 million compared to $191.4 million for the same period in the prior year. This decrease was primarily driven by a 34 bp decline in the cost of interest-bearing deposits, which was partially offset by an $883.1 million, or 8.6%, increase in average interest bearing deposits. Additionally, the cost of borrowed funds declined 43 bps from the same period in the prior year and average borrowings decreased $199.4 million, or 17.3%.

Previous wording

Linked quarter comparison: First quarter 2025 noninterest income was $51.1 million, decreasing $18.8 million, or 26.9%, compared to $69.9 million for the fourth quarter of 2024. The decrease from the linked quarter was primarily driven by losses on sales of investment securities, lower foreign exchange income and a decline in other noninterest income. Losses on sales of investment securities increased $10.1 million as a result of the Bank rebalancing a portion of its investment portfolio and selling $164.5 million of securities while realizing a $9.9 million loss on those sales. Foreign exchange income decreased $4.3 million, or 25.3%, due to lower client demand in the first quarter of 2025. Other noninterest income decreased $3.1 million, or 38.4%, due to lower loan syndication fees in the first quarter of 2025 and higher limited partnership investment income received during fourth quarter of 2024.

Current wording

Linked quarter comparison: Second quarter 2025 noninterest income was $68.1 million, increasing $17.0 million, or 33.2%, compared to $51.1 million for the first quarter of 2025. The increase from the linked quarter was primarily driven by gain on investment securities, gains from sale of loans, and higher foreign exchange and leasing business income. Gains on investment securities increased $10.2 million in the second quarter as a result of the Bank rebalancing a portion of its investment portfolio during the first quarter and selling $164.5 million of securities while realizing a $9.9 million loss on those sales. Gains from sales of loans increased $2.4 million, or 54.7%, due to an increase in mortgage volume compared to the prior period. Foreign exchange income increased $1.2 million, or 9.7%, as product demand increased during the period, while leasing business income increased $2.1 million, or 11.2%, as a result of higher income earned on sold leases.

Previous wording

Year-to-date comparison: Noninterest income of $51.1 million for the first three months of 2025 increased $4.6 million, or 9.8%, from $46.5 million in the comparable period of 2024. The increase was primarily attributed to higher foreign exchange income, leasing business income and wealth management fees. These increases were partially offset by higher losses on sales of investment securities in first quarter of 2025. Foreign exchange income increased $2.1 million, or 20.2%, due to increased client demand in first quarter 2025, while leasing business income increased $4.1 million, or 28.2%, due to continued growth in operating lease balances. Wealth management fee income increased $1.5 million, or 21.9%, due to higher business succession income. Losses on investment securities increased $4.8 million compared to the the same quarter in the prior year due to the

Current wording

Year-to-date comparison: Noninterest income of $119.1 million for the first six months of 2025 increased $11.1 million, or 10.3%, from $108.0 million in the comparable period of 2024. The increase was primarily attributed to higher leasing business income, net gains from sales of loans, service charges on deposit accounts and wealth management fees. These increases were partially offset by higher losses on investment securities in 2025. Leasing business income increased $8.1 million, or 25.7%, due to continued growth in operating lease balances and an increase in income from lease sales. Net gains from sales of loans increased $2.7 million, or 33.2%, primarily due to higher mortgage demands, while wealth management fee income increased $2.1 million, or 15.0%, due to higher business succession and consulting fee income. Service charges on deposit accounts increased $1.1 million, or 8.0%, due to an increase in overdraft and account analysis fees. Losses on investment securities increased $4.5 million compared to the the same period in the prior year due to the Bank rebalancing a portion of its investment portfolio and selling $164.5 million of securities while recognizing $9.9 million of loss in the first quarter of 2025.

Previous wording

Linked quarter comparison: First quarter 2025 noninterest expense was $128.1 million, which was a decrease of $19.8 million, or 13.4%, from $147.9 million in the fourth quarter of 2024. This decrease was primarily driven by lower salaries and employee benefits, professional services and amortization of tax credit investments which were partially offset by an increase in other noninterest expense. Salaries and benefits expenses decreased $5.1 million, or 6.3%, from the linked quarter primarily due to lower incentive compensation during the period. Professional services decreased $3.9 million, or 58.7%, during the first quarter of 2025 due to fourth quarter costs related to the Company's optimization efforts. Amortization of tax credit investments expense decreased $14.2 million, or 99.2%, due to tax credit writedowns that occurred in the fourth quarter. Partially offsetting these decreases, other noninterest expenses increased $1.4 million, or 17.0%, from the linked quarter due to gains on the sale of previously closed banking centers recognized during the fourth quarter.

Current wording

Linked quarter comparison: Second quarter 2025 noninterest expense was $128.7 million, which was an increase of $0.6 million, or 0.5%, from $128.1 million in the first quarter of 2025. This increase was primarily driven by higher professional services and marketing expenses, which were partially offset by lower other noninterest expenses. Professional services increased $0.8 million, or 29.6%, during the second quarter of 2025 due to expenses related to the Company's efficiency efforts and costs related to the pending Westfield acquisition. Marketing expenses increased $0.7 million, or 35.6%, due to increased media placement expenses. Partially offsetting these decreases, other noninterest expenses decreased $0.7 million, or 7.8%, from the linked quarter due to gains on the sale of previously closed banking centers and lower meals and entertainment expenses.

Previous wording

Year-to-date comparison: Noninterest expenses of $128.1 million for the first three months of 2025 increased $5.7 million, or 4.7%, compared to the same period in 2024 primarily due to higher leasing business expense and salaries and benefits. Leasing business expense increased $3.0 million, or 31.2%, as a result of the growth in the operating lease portfolio, while salaries and benefits expenses increased $1.2 million, or 1.6%, due to higher incentive compensation which is tied to fee income.

Current wording

Year-to-date comparison: Noninterest expenses were $256.7 million for the first six months of 2025, which was an increase of $10.8 million, or 4.4%, compared to the same period in 2024. This increase was primarily due to higher leasing business expenses, professional services, other noninterest expenses and salaries and benefits. Leasing business expenses increased $6.1 million, or 30.6%, as a result of the growth in the operating lease portfolio, while professional services increased $1.1 million, or 22.0%, due to expenses related to the Company's efficiency efforts and costs related to the pending Westfield acquisition. Other noninterest expenses increased $0.9 million, or 5.3%, due to an increase in meals and entertainment expenses as well as retail collection expenses. Salaries and benefits increased $0.9 million, or 0.6%, due to higher incentive compensation which is tied to fee income.

Previous wording

Linked quarter comparison: In the first quarter of 2025, First Financial recorded income tax expense of $12.3 million on pre-tax income of $63.6 million, resulting in an effective tax rate of 19.4%. This compared to income tax expense of $2.0 million on pre-tax income of $66.9 million and an effective tax rate of 3.0% for the fourth quarter 2024. The higher effective tax rate in the first quarter was primarily driven by tax credit investments recognized in the fourth quarter of 2024.

Current wording

Linked quarter comparison: In the second quarter of 2025, First Financial recorded income tax expense of $17.9 million on pre-tax income of $87.9 million, resulting in an effective tax rate of 20.3%. This compared to income tax expense of $12.3 million on pre-tax income of $63.6 million and an effective tax rate of 19.4% for the first quarter 2025. The higher effective tax rate in the second quarter was primarily driven by higher taxable income and deductions for restricted stock awards issued in the first quarter.

Previous wording

Year-to-date comparison: For the first three months of 2025, income tax expense was $12.3 million on pre-tax income of $63.6 million, resulting in an effective tax rate of 19.4%. This compared to income tax expense of $11.0 million on pre-tax income of $61.7 million and an effective tax rate of 17.9% for the comparable period in 2024. The higher effective tax rate in 2025 compared to 2024 is primarily driven by higher taxable income, fewer tax credit investments recognized and lower federally tax-exempt income.

Current wording

Year-to-date comparison: For the first six months of 2025, income tax expense was $30.2 million on pre-tax income of $151.5 million, resulting in an effective tax rate of 19.9%. This compared to income tax expense of $25.0 million on pre-tax income of $136.5 million and an effective tax rate of 18.3% for the comparable period in 2024. The higher effective tax rate in 2025 compared to 2024 is primarily driven by higher taxable income, fewer tax credit investments recognized and lower federally tax-exempt income.

Previous wording

First Financial's investment portfolio totaled $3.5 billion at March 31, 2025 and $3.4 billion at December 31, 2024, or 18.7% and 18.2% of total assets, respectively. AFS securities totaled $3.3 billion at March 31, 2025 and $3.2 billion at December 31, 2024, while HTM securities totaled $76.5 million at March 31, 2025 and $77.0 million at December 31, 2024. The effective duration of the investment portfolio was 4.4 years at both March 31, 2025 and December 31, 2024.

Current wording

First Financial's investment portfolio totaled $3.6 billion at June 30, 2025 and $3.4 billion at December 31, 2024, or 19.2% and 18.2% of total assets, respectively. AFS securities totaled $3.4 billion at June 30, 2025 and $3.2 billion at December 31, 2024, while HTM securities totaled $73.0 million at June 30, 2025 and $77.0 million at December 31, 2024. The effective duration of the investment portfolio was 4.3 years at June 30, 2025 and 4.4 years at December 31, 2024.

Previous wording

During the three months ended March 31, 2025, the Company realized $9.9 million of losses on sales of investment securities, which compares to $5.2 million million for the same period in the prior year. The losses incurred in 2025 were the result of a strategic repositioning of $164.5 million of the investment portfolio in order to increase future yields. The Company expects to earn back these losses in 2.3 years.

Current wording

During the six months ended June 30, 2025, the Company realized $9.7 million of losses on investment securities, which compares to $5.3 million for the same period in the prior year. The losses incurred in 2025 were the result of a strategic repositioning of a portion of the investment portfolio in order to increase future yields.

Previous wording

The Company's Consolidated Financial Statements reflected a $222.6 million and $256.5 million unrealized after-tax loss on debt securities as of March 31, 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 quarter was attributed to the recent easing of interest rates coupled with the partial repositioning of the portfolio.

Current wording

The Company's Consolidated Financial Statements reflected a $216.7 million and $256.5 million unrealized after-tax losses on debt securities as of June 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.

Previous wording

The Company had net unrealized losses of $7.1 million and $8.0 million on its HTM securities at March 31, 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.

Current wording

The Company had net unrealized losses of $6.8 million and $8.0 million on its HTM securities at June 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.

Previous wording

The Company had an insignificant unrealized loss on equity securities recorded in noninterest income for the three months ended March 31, 2025 and $0.1 million of unrealized gains on equity securities at December 31, 2024. For the first three months of 2024, the Company had $0.1 million of unrealized gains on equity securities.

Current wording

The Company had $0.2 million of unrealized gains on equity securities recorded in noninterest income for the six months ended June 30, 2025 compared to an insignificant unrealized gain for the same period of 2024.

Previous wording

Excluding loans held for sale, loan balances decreased $37.6 million, or 0.3%, to $11.7 billion as of March 31, 2025 from $11.8 billion as of December 31, 2024. Commercial real estate loans decreased $104.9 million, or 2.6%, to $4.0 billion; finance leases decreased by $24.4 million, or 4.1%, to $573.6 million; and installment loans decreased $13.4 million, or 10.1%, to $119.7 million. Partially offsetting these declines, construction loans increased $45.3 million, or 5.8%, to $824.8 million; home equity increased $23.5 million, or 2.8%, to $872.5 million; residential real estate loans increased $17.4 million, or 1.2%, to $1.5 billion; C&I loans increased $16.5 million, or 0.4%, to $3.8 billion; and credit cards increased $2.3 million, or 3.7%, to $64.6 million.

Current wording

Excluding loans held for sale, loan balances increased $24.4 million, or 0.2%, to $11.8 billion as of June 30, 2025 when compared to December 31, 2024. C&I loans increased $111.9 million, or 2.9%, to $3.9 billion; home equity increased $54.3 million, or 6.4%, to $903.3 million; residential real estate loans increased $30.4 million, or 2.1%, to $1.5 billion; and credit cards increased $2.1 million, or 3.3%, to $64.4 million. Partially offsetting these increases, commercial real estate loans decreased $100.2 million, or 2.5%, to $4.0 billion; construction loans decreased $46.7 million, or 6.0%, to $732.8 million; finance leases decreased by $10.9 million, or 1.8%, to $587.2 million; and installment loans decreased $16.5 million, or 12.4%, to $116.6 million.

Previous wording

First quarter 2025 average loans of $11.7 billion, excluding loans held for sale, increased $43.9 million, or 0.4%, from the fourth quarter 2024. The growth over the linked quarter included an increase of $59.7 million, or 1.6%, in C&I; an increase of $32.9 million, or 2.3%, in residential real estate; and an increase of $20.3 million, or 2.4%, in home equity. These increases were partially offset by a decrease of $29.8 million, or 3.6% in construction real estate; a decrease of $27.1 million, or 0.7%, in CRE; and a decrease of $9.7 million, or 7.1%, in installment loans.

Current wording

Second quarter 2025 average loans of $11.8 billion, excluding loans held for sale, increased $53.3 million, or 0.5%, from the first quarter 2025. The modest growth over the linked quarter included an increase of $93.8 million, or 2.5%, in C&I; an increase of $9.8 million, or 0.7%, in residential real estate; and an increase of $33.6 million, or 3.9%, in home equity. These increases were partially offset by a decrease of $59.5 million, or 1.5%, in CRE; a decrease of $13.1 million, or 1.6% in construction real estate; and a decrease of $9.5 million, or 7.4%, in installment loans.

Previous wording

Through the first three months of 2025, average loans of $11.7 billion, excluding loans held for sale, increased $660.4 million, or 6.0%, from the comparable period of 2024. The increase from prior year reflected broad-based growth across many loan categories, which included an increase of $243.7 million, or 6.9%, in C&I loans; an increase of $193.1 million, or 32.0%, in real estate construction; an increase of $139.0 million, or 10.4% in residential real estate; an increase of $104.6 million, or 21.8%, in lease financing; and an increase of $92.7 million, or 12.1%, in home equity. Partially offsetting these increases was a decrease of $83.0 million, or 2.0%, in CRE; and a decrease of $30.5 million, or 19.3%, in installment loans.

Current wording

Through the first six months of 2025, average loans of $11.7 billion, excluding loans held for sale, increased $500.8 million, or 4.5%, from the comparable period of 2024. The increase from prior year reflected broad-based growth across many loan categories, which included an increase of $204.6 million, or 5.6%, in C&I loans; an increase of $146.7 million, or 22.8%, in real estate construction; an increase of $131.7 million, or 9.8% in residential real estate; an increase of $97.2 million, or 12.5%, in home equity; and an increase of $87.9 million, or 17.8%, in lease financing. Partially offsetting these increases was a decrease of $135.7 million, or 3.3%, in CRE; and a decrease of $32.3 million, or 20.9%, in installment loans.

Previous wording

Additionally, given the potential for stress related to commercial office space, First Financial performed a targeted review of its exposure to this sector. As of March 31, 2025, First Financial had $376.7 million of loans collateralized by non-owner occupied office space, which represents 3.2% of the total loan portfolio. The overall LTV of the portfolio at origination was strong, and 68.6% of the portfolio is located in suburban locations. Additionally, the majority of the portfolio is secured by Class A and Class B assets with recourse from the sponsor. As of March 31, 2025, 95.5% of the office portfolio was pass rated; and there were two relationships totaling $16.8 million on nonaccrual status.

Current wording

Additionally, given the potential for stress related to commercial office space, First Financial performed a targeted review of its exposure to this sector. As of June 30, 2025, First Financial had $357.1 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 secured by Class A and Class B assets. As of June 30, 2025, the office portfolio included two nonaccrual relationships totaling $13.8 million, or 3.9% of the portfolio.

Previous wording

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 $3.8 billion at both March 31, 2025 and December 31, 2024. As of March 31, 2025, commitments with a fixed interest rate totaled $74.9 million while commitments with variable interest rates totaled $3.7 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 March 31, 2025 and December 31, 2024. The fixed rate commitments have maturities ranging from less than one year to 31.0 years at March 31, 2025 and maturities ranging from less than one year to 31.6 years at December 31, 2024.

Current wording

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 $3.9 billion at June 30, 2025 and $3.8 billion at December 31, 2024. As of June 30, 2025, commitments with a fixed interest rate totaled $78.8 million while commitments with variable interest rates totaled $3.8 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 June 30, 2025 and December 31, 2024. The fixed rate commitments have maturities ranging from less than one year to 31.0 years at June 30, 2025 and maturities ranging from less than one year to 31.6 years at December 31, 2024.

Previous wording

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. First Financial issued letters of credit aggregating $26.0 million and $25.1 million at March 31, 2025 and December 31, 2024, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Current wording

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 $23.7 million and $25.1 million at June 30, 2025 and December 31, 2024, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Previous wording

First Financial is a party in risk participation transactions of interest rate swaps, which had total notional amount of $286.6 million and $310.7 million at March 31, 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.

Current wording

First Financial is a party in risk participation transactions of interest rate swaps, which had total notional amount of $284.4 million and $310.7 million at June 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.

Previous wording

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 March 31, 2025, First Financial expects to recover its remaining investments through the use of the tax credits that are generated by the investments. First Financial had unfunded commitments related to tax credit investments of $74.5 million and $79.8 million at March 31, 2025 and December 31, 2024, respectively.

Current wording

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 June 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 $101.0 million and $79.8 million at June 30, 2025 and December 31, 2024, respectively.

Previous wording

Additionally, 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, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of March 31, 2025. When appropriate based upon the advice of legal counsel, reserves are established for these various matters of litigation under FASB ASC Topic 450, Contingencies. First Financial had no reserves related to litigation matters as of March 31, 2025 and December 31, 2024.

Current wording

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 June 30, 2025 and December 31, 2024.

Previous wording

Nonaccrual loans were $59.6 million, or 0.51% of total loans, as of March 31, 2025, reflecting a $6.4 million, or 9.7%, decline from $66.0 million as of December 31, 2024. Nonperforming assets, which consist of nonaccrual loans and OREO, were $59.8 million, or 0.32% of total assets, at March 31, 2025 compared to $66.0 million, or 0.36% of total assets, at December 31, 2024.

Current wording

Nonaccrual loans were $76.9 million, or 0.65% of total loans, as of June 30, 2025, reflecting an $11.0 million, or 16.6%, 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 $77.1 million, or 0.41% of total assets, at June 30, 2025 compared to $66.0 million, or 0.36% of total assets, at December 31, 2024.

Previous wording

Classified assets, which are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse, totaled $213.4 million as of March 31, 2025 compared to $224.1 million at December 31, 2024. Classified assets were 1.16% of total assets at March 31, 2025, compared to 1.21% as of December 31, 2024. At both March 31, 2025 and December 31, 2024, the total classified assets included a $45.0 million receivable from a customer, which is believed to be fully collateralized, that was recorded following the mutually agreed upon termination of a foreign exchange trade.

Current wording

Classified assets, which are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse, totaled $214.3 million as of June 30, 2025 compared to $224.1 million at December 31, 2024. Classified assets were 1.15% of total assets at June 30, 2025, compared to 1.21% as of December 31, 2024. At June 30, 2025, the 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.

Previous wording

Allowance for credit losses. The ACL is a reserve accumulated on the Consolidated Balance Sheets through the recognition of the provision for loan and lease 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.

Current wording

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.

Previous wording

The total ACL, which includes both funded and unfunded reserves, was $171.9 million at March 31, 2025 and $173.7 million as of December 31, 2024.

Current wording

The total ACL, which includes both funded and unfunded reserves, was $175.7 million at June 30, 2025 and $173.7 million as of December 31, 2024.

Previous wording

ACL - loans and leases. The ACL on loans and leases was $155.5 million as of March 31, 2025 and $156.8 million as of December 31, 2024. As a percentage of period-end loans, the ACL was 1.33% as of both March 31, 2025 and December 31, 2024.

Current wording

ACL - loans and leases. The ACL on loans and leases was $158.5 million as of June 30, 2025 and $156.8 million as of December 31, 2024. As a percentage of period-end loans, the ACL was 1.34% as of June 30, 2025 and 1.33% at December 31, 2024.

Previous wording

In the first quarter of 2025, the Company recorded net charge-offs of $10.5 million, or 36 bps of average loans and leases on an annualized basis, compared to net charge-offs of $11.7 million, or 40 bps, for the fourth quarter of 2024 and $10.6 million, or 38 bps, for the first quarter of 2024. The charge-offs in the current period included a $7.0 million loss on a single C&I relationship.

Current wording

In the second quarter of 2025, the Company recorded net charge-offs of $6.0 million, or 21 bps of average loans and leases on an annualized basis, compared to net charge-offs of $10.5 million, or 36 bps, for the first quarter of 2025. Through the first six months of 2025, the Company recorded net charge-offs of $16.5 million, or 28 bps of average loans and leases on an annualized basis, compared to net charge-offs of $14.8 million, or 27 bps, for the same period of 2024.

Previous wording

The ACL as a percentage of nonaccrual loans was 261.1% at March 31, 2025 and 237.7% at December 31, 2024. The increase in this ratio was driven primarily by the decrease in nonaccrual loan balances during the current period.

Current wording

The ACL as a percentage of nonaccrual loans was 206.1% at June 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.

Previous wording

Provision expense is a product of the Company's ACL model coupled with net charge-off activity during the period. During the first quarter of 2025, the Company recorded $9.1 million of provision expense for loans and leases compared to $9.7 million during the fourth quarter of 2024 and $13.4 million for the first quarter of 2024. Current quarter provision expense was driven by net chargeoffs during the period, coupled with stable loan balances and credit quality.

Current wording

Provision expense is a product of the Company's ACL model coupled with net charge-off activity during the period. During both the first and second quarters of 2025, the Company recorded $9.1 million of provision expense for loans and leases. Through the first six months of 2025, the Company recorded provision expense of $18.2 million compared to $29.6 million for the same period of 2024. The higher provision expense in the first six months of 2024 was primarily attributed to loan growth, which included the Agile acquisition.