FIRST FINANCIAL CORP /IN/
For the period ended Dec 31, 2025. Filed Mar 4, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 4, 2026
THFF$76.24-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-05.
0000714562-25-000010
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-04.
0000714562-26-000014
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 83 current paragraphs.
57 unchanged; 23 reworded; 2 added; 2 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Non-interest expenses increased to $154.9 million in 2025 from $144.4 million in 2024. The increase in non-interest expenses is primarily due to a full year of operating expenses from the 2024 acquisition.
Current report
Average deposits increased 5.18% to $4.6 billion at December 31, 2025 compared to December 31, 2024.
Removed paragraphs (2)
Previous report
Non-interest income decreased $4.0 million and non-interest expenses increased $4.2 million. The change in non-interest income from 2022 to 2023 was primarily driven by a $4.0 million legal settlement received in February 2022, and a $2.5 million bank owned life insurance mortality payment. The Corporation does not expect these items to reoccur. The year-over-year changes in non-interest expenses are consistent with the rate of increases in prior years and considered normal with the growth of our business.
Previous report
Deposits increased 7.30% to $4.4 billion at December 31, 2024 compared to December 31, 2023. The increase is due to the acquisition of SimplyBank.
Reworded paragraphs (23)
Previous wording
The ACL and allowance for unfunded commitments were $46.7 million and $2.1 million, respectively at December 31, 2024, compared to $39.8 million and $2.0 million, respectively at December 31, 2023. The qualitative amount of the reserve increased $1.9 million to $12.8 million. The quantitative amount is $33.6 million at December 31, 2024, compared to $28.4 million at December 31, 2023. There was a $100 thousand increase in the allowance for unfunded commitments. The Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank. Additionally, the increase in allowance was related to one previously identified credit,
Current wording
The ACL and allowance for unfunded commitments were $48.0 million and $2.9 million, respectively at December 31, 2025, compared to $46.7 million and $2.1 million, respectively at December 31, 2024. The qualitative amount of the reserve increased $1.3 million to $14.1 million. The quantitative amount is $33.6 million at December 31, 2025, compared to $33.6 million at December 31, 2024. There was an $800 thousand increase in the allowance for unfunded commitments. See additional discussion of ACL in the Allowance for Credit Losses section below.
Previous wording
The principal source of the Corporation’s earnings is net interest income, which represents the difference between interest earned on loans and investments and the interest cost associated with deposits and other sources of funding. Net interest income increased in 2024 to $175.0 million compared to $167.3 million in 2023. Total average interest earning assets increased to $4.87 billion in 2024 from $4.56 billion in 2023. The tax-equivalent yield on these assets increased to 5.55% in 2024 from 5.12% in 2023. Total average interest-
Current wording
The principal source of the Corporation’s earnings is net interest income, which represents the difference between interest earned on loans and investments and the interest cost associated with deposits and other sources of funding. Net interest income increased in 2025 to $219.9 million compared to $175.0 million in 2024. Total average interest earning assets increased to $5.25 billion in 2025 from $4.87 billion in 2024. The tax-equivalent yield on these assets increased to 5.92% in 2025 from 5.55% in 2024. Total average interest-bearing liabilities increased to $4.12 billion in 2025 from $3.93 billion in 2024. The average cost of these interest-bearing liabilities decreased to 2.08% in 2025 from 2.28% in 2024.
Previous wording
The net interest margin decreased from 3.78% in 2023 to 3.71% in 2024. Earning asset yields increased 43 basis points while the rate on interest-bearing liabilities increased by 54 basis points.
Current wording
The net interest margin increased from 3.71% in 2024 to 4.29% in 2025. Earning asset yields increased 37 basis points while the rate on interest-bearing liabilities decreased by 20 basis points.
Previous wording
The provision for credit losses charged to expense is based upon current expected loss and the results of a detailed analysis estimating an appropriate and adequate allowance for credit losses. The analysis is governed byAccounting Standards Codification (ASC 326), implemented in 2020, which used an economic forecast that included the impact of the COVID-19 pandemic. For the year ended December 31, 2024, the provision for credit losses was $16.2 million, an increase of $8.9 million, or 122%, compared to 2023. The Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank. Additionally, the increase in provision as well as charge-offs were related to one previously identified credit, reflecting further deterioration in collateral values in the year. No further losses are expected on this credit. Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate.
Current wording
The provision for credit losses charged to expense is based upon current expected loss and the results of a detailed analysis estimating an appropriate and adequate allowance for credit losses. The analysis is governed byAccounting Standards Codification (ASC 326), implemented in 2020, which used an economic forecast that included the impact of the COVID-19 pandemic. For the year ended December 31, 2025, the provision for credit losses was $8.2 million, a decrease of $8.0 million, or 49%, compared to 2024, as required under the current CECL guidance. In the third quarter 2024 the Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank. Also in 2024, the provision as well as charge-offs were impacted by one previously identified credit, reflecting further deterioration in collateral values in the year. No further losses are expected on this credit. Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate.
Previous wording
Net charge-offs for 2024 were $12.2 million as compared to $7.3 million for 2023 and $6.5 million for 2022 with current year over year increases driven from the previously identified credit discussed above. Non-accrual loans, decreased to $11.5 million at December 31, 2024 from $23.6 million at December 31, 2023. Loans past due 90 days and still on accrual increased to $1.8 million compared to $960 thousand at December 31, 2023.
Current wording
Net charge-offs for 2025 were $6.9 million as compared to $12.2 million for 2024 and $7.3 million for 2023 with the 2024 charge-offs driven from the previously identified credit discussed above. Non-accrual loans increased to $27.5 million at December 31, 2025 from $11.5 million at December 31, 2024. Loans past due 90 days and still on accrual decreased to $1.1 million compared to $1.8 million at December 31, 2024.
Previous wording
Non-interest income of $42.8 million remained stable compared to the $42.7 million earned in 2023.
Current wording
Non-interest income decreased to $42.0 million in 2025 from $42.8 million earned in 2024.
Previous wording
The Corporation’s federal income tax provision was $9.9 million in 2024 compared to $11.8 million in 2023. The overall effective tax rate in 2024 of 17.3% increased as compared to a 2023 effective rate of 16.3%.
Current wording
The Corporation’s federal income tax provision was $19.5 million in 2025 compared to $9.9 million in 2024. The overall effective tax rate in 2025 of 19.8% increased as compared to a 2024 effective rate of 17.3%. Pretax income for the year ended December 31, 2025, was significantly higher than pretax income for the same period in 2024. Since our permanent differences remained similar income was the driving factor for the increase in effective tax rate.
Previous wording
Net income for 2024 was $47.3 million, or $4.00 per share versus $60.7 million, or $5.08 per share for 2023. The decrease in 2024 net income is primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as well as non-interest expenses, which included increased operating expenses, as a result of the acquisition and expenses associated with the acquisition, as described in those respective sections in the following pages. Return on average assets at December 31, 2024 decreased 26.98% to 0.92% compared to 1.26% at December 31, 2023.
Current wording
Net income for 2024 was $47.3 million, or $4.00 per share versus $60.7 million, or $5.08 per share for 2023. The decrease in 2024 net income is primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as well as non-interest expenses, which included increased operating expenses, as a result of the acquisition and expenses associated with the acquisition, as described in those respective sections in the following pages.
Previous wording
Net interest income increased $2.3 million in 2023 compared to 2022. The provision for credit losses increased $9.3 million from a negative provision of $2.0 million in 2022 to a provision of $7.3 million in 2023.
Current wording
Net interest income increased $7.7 million in 2024 compared to 2023. The provision for credit losses increased $8.9 million from $7.3 million in 2023 to a provision of $16.2 million in 2024.
Previous wording
Non-interest expenses increased to $144.4 million in 2024 from $130.2 million in 2023. The increase in non-interest expenses is primarily due to $1.7 million of expenses associated with the acquisition, as well as increases in operating expenses as a result of the acquisition.
Current wording
Non-interest income remained stable and non-interest expenses increased $14.2 million. The increase in non-interest expenses is primarily due to $1.7 million of expenses associated with the acquisition, as well as increases in operating expenses as a result of the 2024 acquisition.
Previous wording
The provision for income taxes decreased $4.8 million from 2022 to 2023 and the effective tax rate decreased to 16.3% in 2023 from 19.0% in 2022. The decrease in income tax expense is due to a $1 million increase in tax credit investments, as well as increase in tax exempt interest income.
Current wording
The provision for income taxes decreased $1.9 million from 2023 to 2024 and the effective tax rate increased to 17.3% in 2024 from 16.3% in 2023.
Previous wording
The Corporation’s total assets increased 14.6% or $709.2 million at December 31, 2024, from a year earlier. Available-for-sale securities decreased $63.1 million at December 31, 2024, from the previous year. Loans, net increased by $662.4 million to $3.79 billion. Deposits increased $628.8 million while borrowings increased by $39.4 million. Total shareholders’ equity increased $21.1 million to $549.0 million at December 31, 2024. Accumulated other comprehensive income decreased $5.2 million primarily due to the market value of the securities portfolio, which reflected a decrease in securities pricing. In 2024 dividends declared by the Corporation totaled $1.86 per share. There were also 34,235 shares from the treasury with a value of $1.67 million that were contributed to the ESOP plan in 2024 compared to 40,496 shares with a value of $1.52 million in 2023.
Current wording
The Corporation’s total assets increased 3.5% or $195.8 million at December 31, 2025, from a year earlier. Available-for-sale securities decreased $46.5 million at December 31, 2025, from the previous year. Loans, net increased by $216.9 million to $4.01 billion. Deposits decreased $167.8 million while borrowings increased by $265.5 million. Total shareholders’ equity increased $101.8 million to $650.9 million at December 31, 2025. Accumulated other comprehensive income increased $45.6 million primarily due to the market value of the securities portfolio, which reflected an increase in securities pricing. In 2025 dividends declared by the Corporation totaled $2.09 per share. There were also 30,114 shares from the treasury with a value of $1.66 million that were contributed to the ESOP plan in 2025 compared to 34,235 shares with a value of $1.67 million in 2024.
Previous wording
The Corporation’s investment strategy seeks to maximize income from the investment portfolio while using it as a risk management tool and ensuring safety of principal and capital. During 2024 the portfolio’s balance decreased by 5.0%. Given the performance of the market, the Corporation shifted away from purchases to replace maturities in 2024. The average life of the portfolio decreased from 6.5 years in 2023 to 6.4 years in 2024. The portfolio structure will continue to provide cash flows to be reinvested during 2024.
Current wording
The Corporation’s investment strategy seeks to maximize income from the investment portfolio while using it as a risk management tool and ensuring safety of principal and capital. During 2025 the portfolio’s balance decreased by 3.9%. Given the performance of the market, the Corporation shifted away from purchases to replace maturities in 2025. In 2025 the Corporation recorded $4.6 million of losses associated with an investment portfolio restructuring in which $80 million of securities were sold and reinvested at an approximately two percent higher yield. The average life of the portfolio decreased from 6.4 years in 2024 to 5.9 years in 2025. The portfolio structure will continue to provide cash flows to be reinvested during 2025.
Previous wording
Net unrealized gain/loss on available for sale securities decreased $12.4 million from a net unrealized loss of $153.4 million in 2023 to a net unrealized loss of $165.8 million in 2024. The Corporation does not expect realized losses, as there is no intent to sell at a loss.
Current wording
Net unrealized gain/loss on available for sale securities increased $57.6 million from a net unrealized loss of $165.8 million in 2024 to a net unrealized loss of $108.2 million in 2025. The Corporation does not expect realized losses, as there is no intent to sell at a loss.
Previous wording
Commercial Real Estate represents $1.8 billion of total exposure as of December 31, 2024, and is within regulatory guidance. This exposure is well diversified by geography, real estate type, and industry designation. During the underwriting process, Commercial Real Estate is stressed using a combination of several risk variables, such as interest rate change, cap rate changes, revenue and expense variances, and term changes. Periodic review of this exposure is performed to identify and monitor any potential weaknesses within a specific credit.
Current wording
Commercial Real Estate represents $1.9 billion of total exposure as of December 31, 2025, and is within regulatory guidance. This exposure is well diversified by geography, real estate type, and industry designation. During the underwriting process, Commercial Real Estate is stressed using a combination of several risk variables, such as interest rate change, cap rate changes, revenue and expense variances, and term changes. Periodic review of this exposure is performed to identify and monitor any potential weaknesses within a specific credit.
Previous wording
The analysis of the allowance for credit losses includes the allocation of specific amounts of the allowance to individually evaluated loans, generally based on an analysis of the collateral securing those loans. Portions of the allowance are also allocated to loan portfolios, based upon a variety of factors including historical loss experience, trends in the type and volume of the loan portfolios, trends in delinquent and non-performing loans, and economic trends affecting our market, including current conditions and reasonable and supportable forecasts about the future. These components are added together and compared to the balance of our allowance at the evaluation date. The allowance for credit losses as a percentage of total loans decreased to 1.22% at year-end 2024 compared to 1.26% at year-end 2023. Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate. Non-performing loans of $13.3 million at December 31, 2024 decreased from $24.6 million at December 31, 2023. The decrease in nonperforming loans is due to a commercial relationship that was downgraded in 2023. That relationship was subsequently charged off in 2024, thus reducing the balance of non-performing loans.
Current wording
The analysis of the allowance for credit losses includes the allocation of specific amounts of the allowance to individually evaluated loans, generally based on an analysis of the collateral securing those loans. Portions of the allowance are also allocated to loan portfolios, based upon a variety of factors including historical loss experience, trends in the type and volume of the loan portfolios, trends in delinquent and non-performing loans, and economic trends affecting our market, including current conditions and reasonable and supportable forecasts about the future. These components are added together and compared to the balance of our allowance at the evaluation date. The allowance for credit losses as a percentage of total loans decreased to 1.18% at year-end 2025 compared to 1.22% at year-end 2024. Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate. Non-performing loans of $28.6 million at December 31, 2025 increased from $13.3 million at December 31, 2024.
Previous wording
Management monitors the components and status of nonperforming loans as a part of the evaluation procedures used in determining the adequacy of the allowance for loan losses. It is the Corporation’s policy to discontinue the accrual of interest on loans where, in management’s opinion, serious doubt exists as to collectability. The amounts shown below represent non-accrual loans and those loans which are past due more than 90 days where the Corporation continues to accrue interest.
Current wording
Management monitors the components and status of nonperforming loans as a part of the evaluation procedures used in determining the adequacy of the allowance for credit losses. It is the Corporation’s policy to discontinue the accrual of interest on loans where, in management’s opinion, serious doubt exists as to collectability. The amounts shown below represent non-accrual loans and those loans which are past due more than 90 days where the Corporation continues to accrue interest.
Previous wording
The ratio of the allowance for loan losses as a percentage of nonperforming loans was 351.4% at December 31, 2024, compared to 161.9% in 2023. In the footnotes to the financial statements the amount reported for nonperforming loans is the recorded investment which includes accrued interest receivable. The following loan categories comprise significant components of the nonperforming loans at December 31, 2024 and 2023:
Current wording
The ratio of the allowance for loan losses as a percentage of nonperforming loans was 167.9% at December 31, 2025, compared to 351.4% in 2024. In the footnotes to the financial statements the amount reported for nonperforming loans is the recorded investment which includes accrued interest receivable. The following loan categories comprise significant components of the nonperforming loans at December 31, 2025 and 2024:
Previous wording
The Corporation estimates that uninsured deposits (1) totaled $980.5 million, or 21% of total deposits, at December 31, 2024, compared to $938.9 million, or 23%, at December 31, 2023. The maturities of certificates of deposit of more than $100 thousand outstanding at December 31, 2024, are summarized as follows:
Current wording
The Corporation estimates that uninsured deposits (1) totaled $864.6 million, or 19% of total deposits, at December 31, 2025, compared to $980.5 million, or 21%, at December 31, 2024. The maturities of certificates of deposit of more than $100 thousand outstanding at December 31, 2025, are summarized as follows:
Previous wording
Advances from the Federal Home Loan Bank decreased to $7.3 million in 2024 compared to $108.6 million in 2023. First Financial Corporation borrowed $25 million on a note payable in June 2024 for the acquisition of SimplyBank. On December 31, 2024, the balance on the note was $20.8 million. The Asset/Liability Committee reviews these funding sources and considers the related strategies on a monthly basis. See Interest Rate Sensitivity and Liquidity below for more information.
Current wording
Advances from the Federal Home Loan Bank increased to $175.7 million in 2025 compared to $7.3 million in 2024. First Financial Corporation borrowed $25 million on a note payable in June 2024 for the acquisition of SimplyBank. On December 31, 2025, the balance on the note was $12.5 million. The Asset/Liability Committee reviews these funding sources and considers the related strategies on a monthly basis. See Interest Rate Sensitivity and Liquidity below for more information.
Previous wording
First Financial Corporation’s objective continues to be to maintain adequate capital to merit the confidence of its customers and shareholders. To warrant this confidence, the Corporation’s management maintains a capital position which they believe is sufficient to absorb unforeseen financial shocks without unnecessarily restricting dividends to its shareholders. The Corporation’s dividend payout ratio for 2024 and 2023 was 46.5% and 19.4%, respectively. The Corporation expects to continue its policy of paying regular cash dividends, subject to future earnings and regulatory restrictions and capital requirements.
Current wording
First Financial Corporation’s objective continues to be to maintain adequate capital to merit the confidence of its customers and shareholders. To warrant this confidence, the Corporation’s management maintains a capital position which they believe is sufficient to absorb unforeseen financial shocks without unnecessarily restricting dividends to its shareholders. The Corporation’s dividend payout ratio for 2025 and 2024 was 31.3% and 46.5%, respectively. The Corporation expects to continue its policy of paying regular cash dividends, subject to future earnings and regulatory restrictions and capital requirements.
Previous wording
The table below shows the Corporation’s estimated sensitivity profile as of December 31, 2024. The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points. Given a 100 basis point increase in rates, net interest income would decrease 1.51% over the next 12 months and increase 0.94% over the following 12 months. Given a 100 basis point decrease in rates, net interest income would increase 4.07% over the next 12 months and increase 0.68% over the following 12 months. These estimates assume all rate changes occur overnight and management takes no action as a result of this change.
Current wording
The table below shows the Corporation’s estimated sensitivity profile as of December 31, 2025. The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points. Given a 100 basis point increase in rates, net interest income would decrease 1.67% over the next 12 months and increase 1.52% over the following 12 months. Given a 100 basis point decrease in rates, net interest income would increase 3.72% over the next 12 months and increase 0.09% over the following 12 months. These estimates assume all rate changes occur overnight and management takes no action as a result of this change.
Previous wording
Liquidity Risk Liquidity is measured by the bank’s ability to raise funds to meet the obligations of its customers, including deposit withdrawals and credit needs. This is accomplished primarily by maintaining sufficient liquid assets in the form of investment securities and core deposits. The Corporation has $13.0 million of investments that mature throughout the coming 12 months. The Corporation also anticipates $112.8 million of principal payments from mortgage-backed securities. Given the current rate environment, the Corporation anticipates $31.1 million in securities to be called within the next 12 months. The Corporation also has $388.5 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $295.1 million available with the Federal Reserve Bank, and $90 million of available fed funds lines with correspondent banks. With these sources of funds, the Corporation currently anticipates adequate liquidity to meet the expected obligations of its customers.
Current wording
Liquidity Risk Liquidity is measured by the bank’s ability to raise funds to meet the obligations of its customers, including deposit withdrawals and credit needs. This is accomplished primarily by maintaining sufficient liquid assets in the form of investment securities and core deposits. The Corporation has $9.3 million of investments that mature throughout the coming 12 months. The Corporation also anticipates $109.7 million of principal payments from mortgage-backed securities. Given the current rate environment, the Corporation anticipates $36.3 million in securities to be called within the next 12 months. The Corporation also has $341.5 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $837.2 million available with the Federal Reserve Bank, and $90 million of available fed funds lines with correspondent banks. With these sources of funds, the Corporation currently anticipates adequate liquidity to meet the expected obligations of its customers.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net income for 2025 was $79.2 million, or $6.68 per share versus $47.3 million, or $4.00 per share for 2024. The increase in 2025 net income is primarily due to organic growth. In 2024 reduced net income was primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as described in those respective sections in the following pages. Return on average assets at December 31, 2025 increased 54.35% to 1.42% compared to 0.92% at December 31, 2024.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
reflecting further deterioration in collateral values in the year. See additional discussion of ACL in the Allowance for Credit Losses section below.
Previous report — wording carried elsewhere
bearing liabilities increased to $3.93 billion in 2024 from $3.50 billion in 2023. The average cost of these interest-bearing liabilities increased to 2.28% in 2024 from 1.74% in 2023.
Previous report — wording carried elsewhere
Net income for 2023 was $60.7 million, or $5.08 per share versus $71.1 million, or $5.82 per share for 2022. The decrease in 2023 net income is primarily due to increased provision for credit losses, as well as decreased non-interest income and increased non-interest expenses.