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What changed in FIRST FINANCIAL BANCORP /OH/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FIRST FINANCIAL BANCORP /OH/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+271 added−215 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in FIRST FINANCIAL BANCORP /OH/'s 2024 10-K

271 paragraphs added · 215 removed · 190 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+12 added−13 removed132 unchanged
Biggest changeOnline lenders also create additional competition, particularly in the mortgage and consumer lending areas. Major consumer retail stores compete for loans by offering credit cards and retail installment contracts. It is anticipated that competition from other financial and non-financial services entities will continue and, for certain products and services, intensify.
Biggest changeThe consumer is also served by brokerage firms and mutual funds that provide checking services, credit cards, margin loans and other services similar to those offered by First Financial. Online lenders also create additional competition, particularly in the mortgage and consumer lending areas. Major consumer retail stores compete for loans by offering credit cards and retail installment contracts.
Bannockburn Global Forex (Bannockburn), a division of the Bank, is an industry-leading capital markets firm based in Cincinnati, Ohio, that provides transactional currency payments, foreign exchange hedging and other advisory products to closely held enterprises, financial sponsors and downstream financial institutions across the United States.
Bannockburn Global Forex (Bannockburn), a division of the Bank, is an industry-leading capital markets firm based in Cincinnati, Ohio, that provides transactional currency payments, foreign exchange hedging, commodities hedging and other advisory products to closely held enterprises, financial sponsors and downstream financial institutions across the United States.
At December 31, 2023, the Bank met the capital ratio requirements to be deemed “well-capitalized.” A bank with a capital level that might qualify for well capitalized or adequately capitalized status may nevertheless be treated as though the bank is in the next lower capital category if the bank’s primary federal banking supervisory authority determines that an unsafe or unsound condition or practice warrants that treatment.
At December 31, 2024, the Bank met the capital ratio requirements to be deemed “well-capitalized.” A bank with a capital level that might qualify for well capitalized or adequately capitalized status may nevertheless be treated as though the bank is in the next lower capital category if the bank’s primary federal banking supervisory authority determines that an unsafe or unsound condition or practice warrants that treatment.
First Financial's executive office is located at 255 East Fifth Street, Suite 800, Cincinnati, Ohio 45202, and the telephone number is (877) 322-9530. We maintain a website with the address www.bankatfirst.com . The information contained on our website is not included, a part of or incorporated by reference into this Annual Report on Form 10-K.
First Financial's executive office is located at 255 East Fifth Street, Suite 2900, Cincinnati, Ohio 45202, and the telephone number is (877) 322-9530. We maintain a website with the address www.bankatfirst.com . The information contained on our website is not included, a part of or incorporated by reference into this Annual Report on Form 10-K.
Smaller than super-regional and multi-national bank holding companies, First Financial believes that it can meet the needs of its markets through a local decision-making process and that it is better positioned to compete than smaller community banks that may have size or geographic limitations.
First Financial believes that it is well positioned to compete in its markets. Smaller than super-regional and multi-national bank holding companies, First Financial believes that it can meet the needs of its markets through a local decision-making process and that it is better positioned to compete than smaller community banks that may have size or geographic limitations.
Information regarding statistical disclosure required by the Securities and Exchange Commission’s Industry Guide 3 is included in "Table 4 - Statistical Information" of First Financial's 2023 Annual Report to Shareholders for the year ended December 31, 2023, and is incorporated herein by reference.
Information regarding statistical disclosure required by the Securities and Exchange Commission’s Industry Guide 3 is included in "Table 4 - Statistical Information" of First Financial's 2024 Annual Report to Shareholders for the year ended December 31, 2024, and is incorporated herein by reference.
This rule also requires bank service providers to notify their customers of a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours. 11 TABLE OF CONTENTS State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.
This rule also requires bank service providers to notify their customers of a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours. State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.
A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cybersecurity-attack.
A financial institution is also expected to develop appropriate processes to enable recovery of data and business 11 TABLE OF CONTENTS operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cybersecurity-attack.
As of its most recent examination, the Bank received a CRA rating of “outstanding.” 9 TABLE OF CONTENTS On October 24, 2023, the federal banking agencies, including the Federal Reserve Board, issued a final rule designed to strengthen and modernize the regulations implementing the CRA.
As of its most recent examination, the Bank received a CRA rating of “outstanding.” On October 24, 2023, the federal banking agencies, including the Federal Reserve Board, issued a final rule designed to strengthen and modernize the regulations implementing the CRA.
The Bank sells these loans with both servicing retained and servicing released, depending on pricing and other market conditions. The credit underwriting standards adhere to a required level of 1 TABLE OF CONTENTS documentation, verifications, valuation and overall credit performance of the borrower.
The Bank sells these loans with both servicing retained and servicing released, depending on pricing and other market conditions. The credit underwriting standards adhere to a required level of documentation, verifications, valuation and overall credit performance of the borrower.
Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.
Payment of dividends by the 7 TABLE OF CONTENTS Bank may be restricted at any time at the discretion of its regulatory authorities, if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.
These deposit-funding limitations can have an effect on the bank’s liquidity. At each 6 TABLE OF CONTENTS successively lower capital category, an insured depository institution is subject to additional restrictions. Under-capitalized banks are required to take specified actions to increase their capital or otherwise decrease the risks to the DIF.
These deposit-funding limitations can have an effect on the bank’s liquidity. At each successively lower capital category, an insured depository institution is subject to additional restrictions. Under-capitalized banks are required to take specified actions to increase their capital or otherwise decrease the risks to the DIF.
In the ordinary course of business, First Financial relies on electronic communications and information systems to conduct its operations and to store sensitive data. First Financial employs an in-depth, layered, defensive approach that leverages people, processes, encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.
In the ordinary course of business, First Financial relies on electronic communications and information systems to conduct its operations and to store sensitive data. First Financial employs an in-depth, layered, defensive approach that leverages people, processes, third-party service providers, encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.
Depository Institution Regulation The Bank, as a bank chartered under the laws of the State of Ohio and a member of the Federal Reserve Bank of Cleveland (Federal Reserve Bank), is subject to supervision and examination by the Federal Reserve Board and the Ohio Division of Financial Institutions (ODFI).
Depository Institution Regulation 5 TABLE OF CONTENTS The Bank, as a bank chartered under the laws of the State of Ohio and a member of the Federal Reserve Bank of Cleveland (Federal Reserve Bank), is subject to supervision and examination by the Federal Reserve Board and the Ohio Division of Financial Institutions (ODFI).
The underwriting of these loans includes an evaluation of these and other pertinent factors prior to the extension of credit. These underwriting standards increase the marketability and address the credit risk associated with the loans. Consumer loans are primarily loans made to individuals.
The underwriting of these loans 1 TABLE OF CONTENTS includes an evaluation of these and other pertinent factors prior to the extension of credit. These underwriting standards increase the marketability and address the credit risk associated with the loans. Consumer loans are primarily loans made to individuals.
The guidelines provide a systematic analytical framework that makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account 5 TABLE OF CONTENTS in evaluating capital adequacy and incentivizes to holding liquid, low-risk assets.
The guidelines provide a systematic analytical framework that makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy and incentivizes to holding liquid, low-risk assets.
Consumer Protection Laws and Regulations Banks are subject to regular examination to ensure compliance with federal statutes and regulations applicable to their business, including consumer protection statutes and implementing regulations. The Dodd-Frank Act established the CFPB, which has 8 TABLE OF CONTENTS extensive regulatory and enforcement powers over consumer financial products and services.
Consumer Protection Laws and Regulations Banks are subject to regular examination to ensure compliance with federal statutes and regulations applicable to their business, including consumer protection statutes and implementing regulations. The Dodd-Frank Act established the CFPB, which has extensive regulatory and enforcement powers over consumer financial products and services.
First Financial launched its engagement strategy in 2020, partnering with a third party to create a culture of highly engaged employees by measuring employee engagement, providing manager training and coaching and developing action plans to deepen engagement. In July 2023 First Financial launched its fourth all-associate engagement survey.
First Financial launched its engagement strategy in 2020, partnering with a third party to create a culture of highly engaged employees by measuring employee engagement, providing manager training and coaching and developing action plans to deepen engagement. In July 2024 First Financial launched its fifth all-associate engagement survey.
The Financial Services Modernization Act defines “financial in nature” to include: • securities underwriting, dealing and market making; • sponsoring mutual funds and investment companies; • insurance underwriting and agency; • merchant banking; and • activities that the Federal Reserve Board has determined to be closely related to banking.
The Financial Services Modernization Act defines “financial in nature” to include: 4 TABLE OF CONTENTS • securities underwriting, dealing and market making; • sponsoring mutual funds and investment companies; • insurance underwriting and agency; • merchant banking; and • activities that the Federal Reserve Board has determined to be closely related to banking.
First Financial offers employees competitive short-term and long-term compensation, a comprehensive set of benefits including health, dental and vision insurance, free or low-cost access to an independent provider of primary care clinics, life and disability programs, parental leave, product discounts and various expense reimbursement programs.
Compensation and Benefits. First Financial offers employees competitive short-term and long-term compensation, a comprehensive set of benefits including health, dental and vision insurance, free or low-cost access to an independent provider of primary care clinics and behavioral health services, life and disability programs, paid time off, parental leave, product discounts and various expense reimbursement programs.
Accordingly, a bank holding 7 TABLE OF CONTENTS company generally should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing.
Accordingly, a bank holding company generally should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing.
In 2023, we hosted monthly virtual town hall meetings for all associates, sharing business updates, opening the lines of communications and answering associate questions. In conjunction with senior management and town hall meetings, additional pulse surveys were completed which provided insight into our associates’ needs, shaping future engagement strategies. Diversity, Equity and Inclusion.
In 2024, we hosted monthly virtual town hall meetings for all associates, sharing business updates, opening the lines of communications and answering associate questions. In conjunction with senior management and town hall meetings, additional pulse surveys were completed which provided insight into our associates’ needs, shaping future engagement strategies. Respectful Workplace.
The reserve requirement ratio remained at 0% as of December 31, 2023.
The reserve requirement ratio remained at 0% as of December 31, 2024.
First Financial is responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.
OFAC publishes lists of specially designated targets and countries. First Financial is responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.
First Financial also provides all eligible employees with a 5% annual allocation to the First Financial Pension Plan of eligible annual pay. The pension allocation is 100% company-paid, fully-vested and portable.
First Financial also provides all eligible employees with an annual allocation to the First Financial Pension Plan of 5% of eligible annual pay. The pension allocation is 100% company-paid, 2 TABLE OF CONTENTS fully-vested and portable.
The program provides employees with incentives (such as health savings account contributions, paid time off and reimbursements) in exchange for voluntary participation in a range of activities, including an annual physical, health-risk assessment, webinar participation and enrollment in Company sponsored fitness activities. In 2023, 57% of eligible employees qualified for benefits under the Wellbeing Program.
The program provides employees with incentives (such as health savings account contributions, paid time off and reimbursements) in exchange for voluntary participation in a range of activities, including an annual physical, health-risk assessment, webinar participation, community service, financial assistance programs and enrollment in Company sponsored fitness activities. In 2024, 59% of eligible employees qualified for benefits under the Wellbeing Program.
The results were positive and confirmed that engagement is strongly woven into the culture. The Bank sets clear expectations of managers for high-levels of accountability and to foster engagement principles. This focus drives the Company's success in improved client relations and outcomes. The engagement strategy includes coaching and training, intentional action plans, sharing success stories, and highlighting engagement champions.
The Bank sets clear expectations of managers for high-levels of accountability and to foster engagement principles. This focus drives the Company's success in improved client relations and outcomes. The engagement strategy includes coaching and training, intentional action plans, sharing success stories, and highlighting engagement champions.
First Financial’s targeted customers include individuals and small to medium sized businesses within the Bank's geographic 3 TABLE OF CONTENTS footprint. Through its diversified delivery systems of banking centers, ATMs, internet banking and telephone-based transactions, First Financial is able to meet the needs of its customers in an ever-changing marketplace.
First Financial’s targeted customers include individuals and small to medium sized businesses within the Bank's geographic footprint. Through its diversified delivery systems of banking centers, ATMs, internet banking and telephone-based transactions, First Financial is able to meet the needs of its customers in an ever-changing marketplace. First Financial faces strong competition from financial institutions and other non-financial organizations.
A key component of the Company’s strategic intent is “Investing in our People.” The company firmly believes that wellbeing is directly linked to engagement and engagement is a key pillar to the overall success. First Financial invests in employees and their families through various programs.
The Company firmly believes that wellbeing is directly linked to engagement and engagement is a key pillar in our overall success. First Financial invests in employees and their families through various programs.
First Financial works with businesses to meet their shorter-term working capital needs while also providing long-term financing for their business plans. First Financial also offers lease and equipment financing through two wholly-owned subsidiaries of the Bank, First Financial Equipment Finance LLC (First Equipment Finance) and Summit Funding Group, Inc. (Summit) (discussed below).
First Financial works with businesses to meet their shorter-term working capital needs while also providing long-term financing for their business plans. First Financial also offers lease and equipment financing primarily through its wholly-owned subsidiary Summit Funding Group, Inc. (Summit) (discussed below).
The 2023 survey results showed a marked increase in engagement from the survey conducted in 2022. As in prior years, teams throughout the Bank continue to engage in team huddles, manager and team training, town halls, mentoring, career and leadership development programs, and updated action plans to continue to drive engagement across the company.
As in prior years, teams throughout the Bank continue to engage in team huddles, manager and team training, town halls, mentoring, career and leadership development programs, and updated action plans to continue to drive engagement across the Company.
Separately, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.
The effective date for nationwide compliance with the Final Small Dollar Rule is March 30, 2025. Separately, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. 10 TABLE OF CONTENTS Incentive Compensation Following the adoption of additional listing requirements in 2023 to comply with the Dodd-Frank Act and rules adopted by the SEC in October 2022, public companies are now required to adopt, implement and disclose a "clawback" policy for incentive compensation payments that allows recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements.
Incentive Compensation Following the adoption of additional listing requirements in 2023 to comply with the Dodd-Frank Act and rules adopted by the SEC in October 2022, public companies are now required to adopt, implement and disclose a "clawback" policy for incentive compensation payments that allows recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements.
Privacy Rules Federal banking regulators, as required under the Gramm-Leach-Bliley Act, as amended (the GLBA), have adopted rules limiting the ability of banks and other financial institutions to disclose nonpublic information about consumers to non-affiliated third parties.
First Financial cannot predict the impact the changes to the CRA will have on its operations at this time. Privacy Rules Federal banking regulators, as required under the Gramm-Leach-Bliley Act, as amended (the GLBA), have adopted rules limiting the ability of banks and other financial institutions to disclose nonpublic information about consumers to non-affiliated third parties.
We also compete on a nationwide basis through Oak Street, which lends to the insurance industry, registered investment advisors, certified public accountants and indirect auto finance companies, First Franchise, which lends to restaurant franchisees, Bannockburn, which provides foreign exchange services to customers throughout the United States, and Summit, which provides equipment financing to commercial businesses to the United States and Canada.
We also compete on a nationwide basis through Oak Street, which lends to the insurance industry, registered investment advisors, certified public accountants and indirect auto finance companies, First Franchise, which lends to restaurant franchisees, Bannockburn, which provides foreign exchange services to customers throughout the United States, and Summit, which provides equipment financing to commercial businesses to the United States and Canada. 3 TABLE OF CONTENTS The Company’s markets support many different types of business activities, such as manufacturing, agriculture, education, healthcare and professional services.
On November 16, 2023, the FDIC adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank.
As a result, the FDIC staff recommended no changes to the amended restoration Plan and all scheduled assessment rates were maintained. On November 16, 2023, the FDIC adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank.
Their primary focus is on small- and middle-market clients that have a need for tailored foreign exchange solutions. Bannockburn has a nationwide presence with offices in 10 locations throughout the U.S.
Their primary focus is on small- and middle-market clients that have a need for tailored foreign exchange solutions. Bannockburn has a nationwide presence with offices in 10 locations throughout the U.S. Agile Premium Finance, a division of the Bank, is among industry leaders in the premium finance lending space and is active in all 50 states.
In accordance with the Basel III Capital Rules, in order to be “well-capitalized” under the prompt corrective action guidelines, a bank must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level or any capital measure.
Each such institution is also required to file a capital plan with its primary federal regulator, and its holding company must guarantee the capital shortfall up to 5% of the assets of the capital deficient institution at the time it becomes under-capitalized. 6 TABLE OF CONTENTS In accordance with the Basel III Capital Rules, in order to be “well-capitalized” under the prompt corrective action guidelines, a bank must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level or any capital measure.
If restrictions are imposed on the activities of a financial holding company, the existence of such restrictions may not be made publicly available pursuant to confidentiality regulations of the bank regulatory agencies. 4 TABLE OF CONTENTS Each subsidiary bank of a financial holding company is subject to certain restrictions on the maintenance of reserves against deposits, extensions of credit to the financial holding company and its subsidiaries, investments in the stock and other securities of the financial holding company and its subsidiaries and the taking of such stock and securities as collateral for loans to borrowers.
Each subsidiary bank of a financial holding company is subject to certain restrictions on the maintenance of reserves against deposits, extensions of credit to the financial holding company and its subsidiaries, investments in the stock and other securities of the financial holding company and its subsidiaries and the taking of such stock and securities as collateral for loans to borrowers.
The Bank has established policies and procedures that it considers to be in compliance with the requirements of the Patriot Act. State Law As an Ohio-chartered bank, the Bank is subject to regular examination by the ODFI. State banking regulation affects the Bank’s internal organization and corporate governance, capital distributions, activities, acquisitions of other institutions and branching.
The Bank has established policies and procedures that it considers to be in compliance with the requirements of the Patriot Act. 12 TABLE OF CONTENTS State Law As an Ohio-chartered bank, the Bank is subject to regular examination by the ODFI.
First Financial’s goal is to develop a competitive advantage through a local market focus, building long-term relationships with clients to help them reach greater levels of financial success.
Market selection is based upon a number of factors, but markets are primarily chosen for their potential for growth, long-term profitability and customer reach. First Financial’s goal is to develop a competitive advantage through a local market focus, building long-term relationships with clients to help them reach greater levels of financial success.
As insurer, the FDIC is authorized to conduct examinations of and to require reporting by DIF-insured institutions.
As of December 31, 2024, the Bank reported $5.9 billion in uninsured deposits. As insurer, the FDIC is authorized to conduct examinations of and to require reporting by DIF-insured institutions.
Community Reinvestment Act Under the CRA, every FDIC-insured institution is obligated, consistent with safe and sound banking practices, to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
The Small Dollar Rule did not have a material effect on First Financial’s financial condition or results of operations on a consolidated basis in 2023 or 2024. 9 TABLE OF CONTENTS Community Reinvestment Act Under the CRA, every FDIC-insured institution is obligated, consistent with safe and sound banking practices, to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024. For the quarter ended December 31, 2022, the Bank reported $5.3 billion in uninsured deposits and recorded a $0.9 million expense in the fourth quarter of 2023 reflecting the full assessment.
The FDIC began collecting the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, 8 TABLE OF CONTENTS beginning with the first quarter of 2024. The Bank recorded $0.2 million and $0.9 million of expense related to the special assessment in 2024 and 2023, respectively.
Market and Competitive Information First Financial utilizes a community banking business model and serves a combination of metropolitan and non-metropolitan markets through its full-service banking centers primarily in Indiana, Ohio, Kentucky and Illinois. Market selection is based upon a number of factors, but markets are primarily chosen for their potential for growth, long-term profitability and customer reach.
The measurement period for the Agile acquisition ends in February 2025. Market and Competitive Information First Financial utilizes a community banking business model and serves a combination of metropolitan and non-metropolitan markets through its full-service banking centers primarily in Indiana, Ohio, Kentucky and Illinois.
The Bank regularly reviews it’s total rewards practices to ensure compensation is equitable, taking into consideration such factors as experience, education, performance and market data. 2 TABLE OF CONTENTS Employee Engagement.
The Bank regularly reviews its total rewards practices to ensure compensation is equitable, taking into consideration such factors as experience, education, performance and market data. Employee Engagement. First Financial believes that talented and engaged employees are critical for the success of the Company, its subsidiaries, its associates and the clients and communities it serves.
State banking regulation may contain limitations on an institution’s activities that are in addition to limitations imposed under federal banking law. The ODFI may initiate supervisory measures or formal enforcement actions, and under certain circumstances, it may take control of an Ohio-chartered bank.
The ODFI may initiate supervisory measures or formal enforcement actions, and under certain circumstances, it may take control of an Ohio-chartered bank. 13 TABLE OF CONTENTS
Human Capital As of December 31, 2023, First Financial had approximately 2,165 employees located primarily in the states of Ohio, Indiana, Kentucky, and Illinois. Employee Wellbeing .
Human Capital As of December 31, 2024, First Financial had approximately 2,090 employees located primarily in the states of Ohio, Indiana, Kentucky, and Illinois. Employee Wellbeing . Investing in our people is a key part of our culture at First Financial and our programs provide tools for our employees to invest in their health and wellbeing.
To the extent First Financial engages in any of the trading activities or has any ownership interests in or relationship with any of the types of funds regulated by the Volcker Rule, First Financial believes that its activities and relationships comply with such rule, as modified through rule-making.
To the extent First Financial engages in any of the trading activities or has any ownership interests in or relationship with any of the types of funds regulated by the Volcker Rule, First Financial believes that its activities and relationships comply with such rule, as modified through rule-making. 10 TABLE OF CONTENTS Office of Foreign Assets Control Regulation The United States Treasury Department’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others.
Despite the decline in the reserve ratio, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028. As a result, the FDIC staff recommended no changes to the amended restoration Plan and all scheduled assessment rates were maintained.
In the FDIC’s most recent semiannual update for the amended restoration plan in October 2024, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028.
First Financial faces strong competition from financial institutions and other non-financial organizations. Its competitors include local and regional financial institutions, savings and loans and bank holding companies, as well as some of the largest banking organizations in the United States.
Its competitors include local and regional financial institutions, savings and loans and bank holding companies, as well as some of the largest banking organizations in the United States. In addition, other types of financial institutions, such as credit unions, offer a wide range of loan and deposit services that are competitive with those offered by First Financial.
The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027. First Financial cannot predict the impact the changes to the CRA will have on its operations at this time.
The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027; however, these dates are likely to change due to ongoing litigation regarding the CRA rule changes.
Upon completion of the transaction, Summit became a subsidiary of the Bank and continues to operate as Summit Funding Group, taking advantage of its existing brand recognition within the equipment financing industry.
The loans are secured 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.
The Midwestern markets that First Financial serves have historically not experienced the level of economic volatility experienced in other areas of the country, although material fluctuations may occur. First Financial believes that it is well positioned to compete in its markets.
Within these markets, growth is projected to continue in key demographic groups and populations. First Financial’s market evaluation includes demographic measures such as income levels, median household income and population growth. The Midwestern markets that First Financial serves have historically not experienced the level of economic volatility experienced in other areas of the country, although material fluctuations may occur.
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Additionally, First Financial partners with an independent primary care clinic that offers no or low cost preventive and routine care to associates and families. Compensation and Benefits.
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Headquartered in Lincolnshire, IL, Agile originates commercial loans for the payment of annual premiums for property and casualty insurance for businesses. Agile loans are secured by the unearned premium of the insurance policies and have an average original term of approximately ten months. .
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First Financial prioritizes diversity, equity and inclusion (DEI) as an employer, a financial institution and as a member of the communities in which we operate.
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The 2024 survey results showed a marked increase in engagement from the survey conducted in 2023, reinforcing the belief that employee engagement is strongly woven into the culture.
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The DEI Committee of the Board provides guidance and oversight to First Financial’s executive committee, the Diversity, Equity and Inclusion team, and the First Financial Diversity Council, which is comprised of 10 associates from across our footprint. First Financial supports eight associate-led Business Resource Groups (BRGs) designed to facilitate networking and leadership development.
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First Financial strives to maintain a workplace that fosters our culture and aligns with our values. We expect that associates treat each other in a manner consistent with our culture and our policies, whether the individual is a fellow associate, member of management, customer, vendor or visitor to our premises.
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BRGs meet regularly throughout the year and host a variety of in person and virtual engagement opportunities. First Financial continues to develop our DEI strategy, which includes goals and action plans designed to increase associate and management diversity. Subsidiaries A listing of each of First Financial’s subsidiaries can be found in Exhibit 21 to this Form 10-K.
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We seek out and celebrate differing opinions, expertise and experiences of our employees. First Financial supports eight associate-led Business Resource Groups (BRGs) designed to facilitate networking and leadership development. BRGs meet regularly throughout the year and host a variety of in person and virtual engagement opportunities.
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Business Combinations In December 2021, the Company completed its acquisition of Summit Funding Group, Inc. and its subsidiaries. Summit was a privately held, full service, equipment financing company that originates, purchases, sells and services equipment leases to commercial businesses in the United States and Canada.
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Subsidiaries A listing of each of First Financial’s subsidiaries can be found in Exhibit 21 to this Form 10-K. Business Combinations 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.
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Pursuant to the purchase agreement, First Financial agreed to acquire all of the issued and outstanding equity securities of Summit for aggregate consideration of approximately $127.1 million consisting of $113.5 million in cash and $10.0 million of First Financial common stock, and a $3.6 million earn-out payment.
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First Financial acquired $97.8 million of assets and $2.7 million of liabilities in the transaction, resulting in $1.8 million of goodwill. Acquisition accounting adjustments are considered preliminary at December 31, 2024.
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The Company’s markets support many different types of business activities, such as manufacturing, agriculture, education, healthcare and professional services. Within these markets, growth is projected to continue in key demographic groups and populations. First Financial’s market evaluation includes demographic measures such as income levels, median household income and population growth.
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Operating results from the Agile acquisition have been included in the Consolidated Statements of Income since the acquisition date Acquisition accounting adjustments are considered preliminary at December 31, 2024, and are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available.
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In addition, other types of financial institutions, such as credit unions, offer a wide range of loan and deposit services that are competitive with those offered by First Financial. The consumer is also served by brokerage firms and mutual funds that provide checking services, credit cards, margin loans and other services similar to those offered by First Financial.
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It is anticipated that competition from other financial and non-financial services entities will continue and, for certain products and services, intensify. First Financial also competes with Financial Technology Companies (“FinTechs”) which provide similar services to financial institutions while operating predominantly online and without the use of physical branch locations in a customer’s market area.
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Each such institution is also required to file a capital plan with its primary federal regulator, and its holding company must guarantee the capital shortfall up to 5% of the assets of the capital deficient institution at the time it becomes under-capitalized.
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Digital assets and cryptocurrencies also operate as competitors, as many of these digital assets and cryptocurrencies seek to provide payment functionality. Many customers either hold or may consider holding money that would typically be held in deposit accounts or investments in the form of digital assets or cryptocurrencies, which serves as competition for deposits.
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In the FDIC’s most recent semiannual update for the amended restoration plan in November 2023, the FDIC noted that increased loss provisions associated with the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023 that reduced the DIF balance, coupled with strong growth in insured deposits, resulted in the reserve ratio declining 15 basis points from 1.25% as of December 31, 2022 to 1.10% as of June 30, 2023.
Added
If restrictions are imposed on the activities of a financial holding company, the existence of such restrictions may not be made publicly available pursuant to confidentiality regulations of the bank regulatory agencies.
Removed
However, due to continuing appellate litigation regarding the constitutionality of the CPFB’s funding structure, which stems, in part, from legal challenges to the Small Dollar Rule, the effective date for nationwide compliance with the Final Small Dollar Rule remains uncertain at this time.
Added
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. The Bank has established policies and procedures that it considers to be in compliance with the requirements and obligations of OFAC and the laws it regulates.
Removed
The Small Dollar Rule did not have a material effect on First Financial’s financial condition or results of operations on a consolidated basis in 2022 or 2023.
Added
State banking regulation affects the Bank’s internal organization and corporate governance, capital distributions, activities, acquisitions of other institutions and branching. State banking regulation may contain limitations on an institution’s activities that are in addition to limitations imposed under federal banking law.
Removed
Office of Foreign Assets Control Regulation The United States Treasury Department’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

111 edited+66 added−11 removed69 unchanged
Biggest changeEven the reduction of regulatory restrictions could have an adverse effect on us and our shareholders if such lessening of restrictions increases competition within our industry or our market area. 22 TABLE OF CONTENTS Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Biggest changeIncreasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. Financial institutions are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (ESG) practices and disclosure.
A material breach of customer data security at a service provider's site may negatively impact our business reputation and cause a loss of customers, result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions, and may result in litigation.
A material breach of customer data security at a service provider's site may negatively impact our business reputation and cause a loss of customers, result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions, and possibly litigation.
Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition. From time to time, the FASB, SEC and other regulatory agencies change the financial accounting and reporting guidance that governs the preparation of our financial statements.
Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition. From time to time, the FASB, SEC and other regulatory agencies may change the financial accounting and reporting guidance that governs the preparation of our financial statements.
In addition, prior debt offerings could potentially have important consequences to us and our debt and equity investors, including: • requiring a substantial portion of our cash flow from operations to make interest payments; • making it more difficult to satisfy debt service and other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; 18 TABLE OF CONTENTS • reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry; • placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase securities.
In addition, prior debt offerings could potentially have important consequences to us and our debt and equity investors, including: • requiring a substantial portion of our cash flow from operations to make interest payments; • making it more difficult to satisfy debt service and other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry; • placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase securities.
Changes in market interest rates or capital markets could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity.
Changes in market interest rates or financial markets could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity.
In August 2019, First Financial acquired Bannockburn, which engages in various capital markets activities as part of its matched book business encompassing foreign exchange, interest rate, and, coming in 2024, commodity hedging transactions. • Concentration risk: Bannockburn’s business model relies, to some extent, upon a small number of large clients.
In August 2019, First Financial acquired Bannockburn, which engages in various capital markets activities as part of its matched book business encompassing foreign exchange, interest rate, and commodity hedging transactions. • Concentration risk: Bannockburn’s business model relies, to some extent, upon a small number of large clients.
If such events or circumstances were to occur, it could result in a potential loss of revenue and have an effect on our business, results of operations and financial condition. Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.
If such events or circumstances were to occur, it could result in a potential loss of revenue, increase in costs and have an effect on our business, results of operations and financial condition. Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.
See the “Critical Accounting Estimates” in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1- Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements, in our 2023 Annual Report to Shareholders (included within Exhibit 13 to this Form 10-K) for more information.
See the “Critical Accounting Estimates” in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1- Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements, in our 2024 Annual Report to Shareholders (included within Exhibit 13 to this Form 10-K) for more information.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and the price of our common shares. General Risk Factors Weaknesses of other financial institutions could affect us.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, the results of our operations and the price of our common shares. General Risk Factors Weaknesses of other financial institutions could affect us.
Cybersecurity risk management programs are expensive to maintain and will not protect us from all risks associated with maintaining the security of customer data and our proprietary data from external and internal intrusions, disaster recovery and failures in the controls used by our vendors.
Cybersecurity risk management programs are expensive to maintain and mitigate cybersecurity risks, but will not protect us from all risks associated with maintaining the security of customer data and our proprietary data from external and internal intrusions, disaster recovery and failures in the controls used by our vendors.
Any of these occurrences could result in our diminished ability to operate one or more of our businesses, potential liability to clients, reputational damage and regulatory intervention in the form of requirements, restrictions and penalties, which could affect us our business and results of operations.
Any of these occurrences could result in our diminished ability to operate one or more of our businesses, potential civil liability, reputational damage and regulatory intervention in the form of requirements, restrictions and penalties, which could affect us our business and results of operations.
While we do not believe that the circumstances of these banks' failures and liquidations are indicators of broader issues with the banking system, the failures may reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adverselyaffect financial markets and/or have a negative reputational ramification for the financial services industry, including us.
While we do not believe that the circumstances of these banks' failures and liquidations are indicators of broader issues with the banking system, the failures may reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have a lasting negative reputational ramification for the financial services industry, including us.
Notwithstanding, our efforts to promote deposit insurance coverage with our customers and otherwise effectively manage our liquidity, deposit portfolio retention, and other related matters, our financial condition, results of operation, and stock price may be adversely affected by future negative events within the banking sector and adverse customer or investor responses to such events.
Notwithstanding, our efforts to promote deposit insurance coverage with our customers and otherwise effectively 20 TABLE OF CONTENTS manage our liquidity, deposit portfolio retention, and other related matters, our financial condition, results of operation, and stock price may be adversely affected by future negative events within the banking sector and adverse customer or investor responses to such events.
Although we have historically declared cash dividends on our common shares, we are not required to do so and may reduce or eliminate our common share dividend in the future. Additionally, our funds to pay dividends on common shares are dependent upon dividends paid to us by the Bank, which are subject to regulatory restrictions.
Although we have historically declared cash dividends on our common shares, we are not required to do so and may reduce or eliminate our common share dividend in the future. Additionally, our funds to pay dividends on common shares are dependent upon the results of operations and dividends paid to us by the Bank, which are subject to regulatory restrictions.
Although we have implemented procedures we believe will reduce the potential effects of changes in interest rates on our results of operations, these procedures may not always be successful. In addition, any substantial or prolonged change in 13 TABLE OF CONTENTS market interest rates could affect our financial condition, results of operations and liquidity.
Although we have implemented procedures we believe will reduce the potential effects of changes in interest rates on our results of operations, these procedures may not always be successful. In addition, any substantial or prolonged change in market interest rates could affect our financial condition, results of operations and liquidity.
Item 1A. Risk Factors. The risks listed here are not the only risks we face. Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material effect on our financial condition, results of operations, business and prospects. (See also “Item 7.
Item 1A. Risk Factors. The risks listed here are not the only risks we face. Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material effect on our financial condition, results of operations, business and prospects.
Declines in real estate values, home sale volumes, financial stress on borrowers as a result of job losses, interest rate resets on adjustable rate mortgage loans or other factors could have further effects on borrowers that could result in higher delinquencies and greater charge-offs in future periods, which would affect our financial condition or results of operations.
Declines in real estate values, home sale volumes, financial stress on borrowers as a result of job losses, interest rate resets on adjustable rate mortgage loans or other factors, either independently or in the aggregate could have further effects on borrowers that could result in higher delinquencies and greater charge-offs in future periods, which would affect our financial condition or results of operations.
A major change in the real estate market, such as deterioration in the value of collateral, or in the local or national economy, could affect our customers' ability to pay these loans, which in turn could impact our results of operations and financial condition.
A major change in the real estate market, such as deterioration in the value of collateral, or in the local or national economy, could affect our customers' ability to pay these loans, which in turn could impact our results of operations and 15 TABLE OF CONTENTS financial condition.
Our financial condition, results of operations, and stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions.
Our financial condition, results of operations, and stock price may be negatively impacted by unrelated bank failures and negative depositor and/or investor confidence in depository institutions.
Additionally, we could be affected if one of our employees or a third-party service provider causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems.
Additionally, we could be affected if one of our employees or a third-party service provider causes a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems.
Any such expansion of our business will involve a number of expenses and risks, which may include: • the time and expense associated with identifying and evaluating potential expansions; • the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to the target company; • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality issues of the target company; • difficulty and expense of integrating the operations and personnel of the target company; • difficulty or added costs in the wind-down of non-strategic operations; • potential disruption to our business; • potential diversion of our management’s time and attention; • the possible loss of key employees and customers of the target company; • difficulty in estimating the value (including goodwill) of the target company; • difficulty in receiving appropriate regulatory approval for any proposed transaction; and • potential changes in banking, or tax laws or regulations or accounting rules that may affect the target company.
Any such expansion of our business will involve a number of expenses and risks, which may include: • the time and expense associated with identifying and evaluating potential expansions; • the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to the target company; • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality issues of the target company; • difficulty and expense of integrating the operations and personnel of the target company; • difficulty or added costs in the wind-down of non-strategic operations; • potential disruption to our business; • potential diversion of our management’s time and attention; • the possible loss of key employees and customers of the target company; • difficulty in estimating the value (including goodwill) of the target company; • difficulty in receiving appropriate regulatory approval for any proposed transaction; and • potential changes in banking, tax or other laws or regulations or accounting rules that may affect the target company or our realization of any anticipated benefits or accretive shareholder value from undertaking such expansion.
Because of the uncertainty 21 TABLE OF CONTENTS surrounding our judgments and the estimates pertaining to these matters, we cannot guarantee that we will not be required to adjust accounting policies or re-state prior period financial statements.
Because of the uncertainty surrounding our judgments and the estimates pertaining to these matters, we cannot guarantee that we will not be required to adjust accounting policies or re-state prior period financial statements.
Economic turmoil in different regions of the world, as well as military conflicts such as those currently ongoing in Ukraine and the Middle East, affect the economy and stock prices in the United States, which can affect First Financial’s earnings and capital and the ability of its customers to repay loans.
Economic turmoil in different regions of the world, as well as military conflicts such as those currently ongoing in Ukraine and the Middle East, affect the economy and stock prices in the United States, which can affect our earnings and capital and the ability of our customers to repay loans.
In addition to the general impact of the economy, changes in interest rates or in valuations in the debt, equity, or currency markets could directly impact us in one or more of the following ways: • the yield on earning assets and rates paid on interest bearing liabilities may change in disproportionate ways; • the value of certain balance sheet and off-balance sheet financial instruments or the value of equity investments that we hold could decline; • the value of assets for which we provide processing services could decline; • the bank's profitability may decline due to negative impacts of increased market volatility; • insured and/or uninsured depositors may seek alternative investments, making the bank more reliant on alternative, more expensive funding sources; • the demand for loans and refinancings may decline, which could negatively impact income related to loan originations; or • to the extent we access capital markets to raise funds to support our business, such changes could affect the cost of such funds or the ability to raise such funds.
In addition to the general impact of the economy, changes in interest rates or in valuations in the debt, equity, commodities or currency markets could directly impact us in one or more of the following ways: • the yield on earning assets and rates paid on interest bearing liabilities may change in disproportionate ways; • the value of certain balance sheet and off-balance sheet financial instruments or the value of equity investments that we hold could decline; • the value of assets for which we provide processing services could decline; • the bank's profitability may decline due to negative impacts of increased market volatility; • insured and/or uninsured depositors may seek alternative investments, making the bank more reliant on alternative, more expensive funding sources; • the demand for loans and refinancings may decline, which could negatively impact income related to loan originations; • the reset on interest rates on adjustable rate mortgages could cause financial strain on borrowers, making them more likely to default; or • to the extent we access capital markets to raise funds to support our business, such changes could affect the cost of such funds or the ability to raise such funds.
In recent years, some banks have experienced denial of service attacks in which individuals or organizations flood the bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions.
In recent years, some banks have experienced denial of service attacks in which individuals or organizations flood a bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process and/or communicate information about transactions.
We rely on other companies to provide key components of our business infrastructure, creating risks of failures by such companies and cybersecurity incidents involving our customers’ information. Digitalization and technological innovation continue to advance the trend of banks outsourcing technology operations and banks entering partnerships or other arrangements with third parties.
We rely on other companies to provide key components of our business infrastructure, creating risks of failures or disruptions by such companies and cybersecurity incidents which may involve our customers’ information. Digitalization and technological innovation continue to advance the trend of banks outsourcing technology operations and entering partnerships or other arrangements with third parties.
These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in us restating prior period financial statements.
These changes can be hard to predict and can materially impact how we manage, record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in a requirement to restate prior period financial statements.
First Financial adjusts its quantitative model, as necessary, to reflect conditions not already considered by such model. Our estimates of the risk of loss and amount of loss on any loan are complicated by the significant uncertainties surrounding our borrowers’ abilities to successfully execute their business models through changing economic environments, competitive challenges and other factors.
We adjust our quantitative model, as necessary, to reflect conditions not already considered by such model. Our estimates of the risk of loss and amount of loss on any loan are complicated by the significant uncertainties surrounding our borrowers’ abilities to successfully execute their business models through changing economic environments, competitive challenges and other factors.
Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers. Such activity can result in financial liability and harm to our reputation.
Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers. Such activity can result in financial liability to us and/or our customers and harm to our reputation and impact the results of our operations.
Earnings and capital levels could also be affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings.
Earnings and capital 14 TABLE OF CONTENTS levels could also be affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings.
First Financial’s success depends, in part, on economic and political conditions, local and national, as well as governmental fiscal and monetary policies.
Our success depends, in part, on economic and political conditions, local and national, as well as governmental fiscal and monetary policies.
Adverse legal outcomes could result in financial losses, reputational damage, or regulatory sanctions. • Political risk: Our foreign exchange business is also susceptible to the risk that political events or changes in government policies could negatively impact the bank's matched book business.
Adverse legal outcomes could result in financial losses, reputational damage, or regulatory sanctions. • Political risk: Our foreign exchange business is also susceptible to the risk that political events or changes in government policies, such as renegotiated trade agreements or tariffs, could negatively impact the bank's matched book business.
A downgrade of the credit rating of the Company could affect our access to liquidity and capital, and could significantly increase our cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to us or purchase our securities. This could affect our growth, profitability and financial condition, including liquidity.
A downgrade of the credit rating of the Company could affect our access to liquidity and capital, and could significantly increase our cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to us or purchase our securities.
Any disruption in such services provided by these third parties or any failure of these third parties to handle current or higher volumes could affect our ability to deliver products and services to clients and to efficiently and effectively conduct our business.
Any disruption in such services provided by these third parties, any failure of these third parties to handle current or higher volumes or any failure of third parties to perform in accordance with their agreements with us could affect our ability to deliver products and services to clients and to efficiently and effectively conduct our business.
The recent bank failures of Silicon Valley Bank in California, Signature Bank in New York, and First Republic Bank in California, and the decision of Silvergate Bank in California to voluntarily liquidate its assets and wind down operations, each of which occurred during the first and second quarters of 2023, have caused uncertainty in the investor community and negative confidence among bank customers generally.
The 2023 bank failures of Silicon Valley Bank in California, Signature Bank in New York, and First Republic Bank in California, and the decision of Silvergate Bank in California to voluntarily liquidate its assets and wind down operations have caused uncertainty in the investor community and negative confidence among bank customers generally.
Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy and other factors beyond First Financial’s control may affect its deposit levels and composition, demand for loans, the ability of borrowers to repay their loans and the value of the collateral securing the loans it makes.
Conditions such as inflation, deflation, recession, unemployment, changes in interest rates, tariffs, fiscal and monetary policy and other factors beyond our control may affect our deposit levels and composition, demand for loans and other products and services, the ability of borrowers to repay their loans and the value of the collateral securing the loans it makes.
We also may rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Nonetheless, in the near-term, high interest rates along with rising costs, particularly robust wage growth, are expected to weigh on firms’ profit margins.
We also may rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Nonetheless, in the near-term, higher interest rates along with elevated costs are expected to weigh on firms’ profit margins.
When clients move money out of bank deposits in favor of alternative investments, we can lose a relatively inexpensive source of funds, increasing our funding costs. Sound liquidity risk management, including processes that ensure sufficient committed capacity to meet contingent liquidity needs, remains critical.
When clients move money out of bank deposits in favor of alternative investments or to alternative financial services providers, we can lose a relatively inexpensive source of funds, increasing our funding costs, and impacting the results of our operations. Sound liquidity risk management, including processes that ensure sufficient committed capacity to meet contingent liquidity needs, remains critical.
Additionally, actions by regulatory agencies against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders.
Additionally, investigations and/or actions by regulatory agencies against us could cause us to devote significant time and resources to defending our business and/or modifying our practices and operations and may lead to penalties or fines that materially affect us and our shareholders.
A sharp decline or heightened volatility in the stock market could negatively impact the value of investments held by the bank's wealth management clients, which in turn impacts the amount of assets under management and subjects our earnings to additional risks and uncertainties.
At December 31, 2024, we had $3.7 billion in assets under management. A sharp decline or heightened volatility in the stock market could negatively impact the value of investments held by the bank's wealth management clients, which in turn impacts the amount of assets under management and subjects our earnings to additional risks and uncertainties.
At the same time, accumulated other comprehensive loss decreased from $358.7 million in 2022 to $309.8 million in 2023, driven by an increase in the valuation of available-for-sale securities. The policies of the Federal Reserve Board can adversely affect borrowers, and increase default risk on their loans.
At the same time, accumulated other comprehensive loss increased from $309.8 million in 2023 to $289.8 million in 2024, driven by an increase in the valuation of available-for-sale 27 TABLE OF CONTENTS securities. The policies of the Federal Reserve Board can adversely affect borrowers, and increase default risk on their loans.
Additionally, the banking regulators and applicable laws and regulations may restrict our ability to engage in acquisitions under certain circumstances. Our accounting policies and processes are critical to how we report our financial condition and results of operations. They require management to make estimates about matters that are uncertain.
Additionally, the banking regulators and applicable laws and regulations may restrict our ability to engage in acquisitions under certain circumstances. Our accounting policies and processes are critical to how we report our financial condition and results of operations.
Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of fraud, acts of vandalism, computer viruses, malware, ransomware, theft of information, misplaced or lost data, programming and/or human errors, or other similar events. 16 TABLE OF CONTENTS Ransomware actors continue to affect the sector by targeting banks and their third parties.
Despite the security measures we have in place, our facilities and systems, and those of our third party service providers, may be vulnerable to security breaches, acts of fraud, acts of vandalism, computer viruses, malware, ransomware, theft of information, misplaced or lost data, programming and/or human errors, or other similar events.
Any security breach involving the misappropriation, loss, destruction or unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, expose us to the risk of litigation and liability, disrupt our operations and have a material effect on our business.
Any security breach involving the misappropriation, loss, destruction or unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, lead to a loss of customers, expose us to the risk of litigation and liability, result in regulatory fines, penalties, or orders, disrupt our operations and have a material effect on our business, our financial condition and the results of our operations.
Foreign currency transactions historically increase as market volatility increases. Sustained periods of stability in global financial markets could also adversely affect Bannockburn’s revenue. • Credit risk: We are exposed to credit risk through our dealings with counterparties in derivative transactions.
Sustained periods of stability in global financial markets could also adversely affect Bannockburn’s revenue. • Credit risk: We are exposed to credit risk through our dealings with counterparties in derivative transactions.
Turbulence in the capital and credit markets may cause many lenders and institutional investors to reduce or cease to provide funding to borrowers and, as a result, we may not be able to further increase liquidity through additional borrowings.
To enhance liquidity, we may borrow under credit facilities or from other sources. Turbulence in the capital and credit markets may cause many lenders and institutional investors to reduce or cease to provide funding to borrowers and, as a result, we may not be able to further increase liquidity through additional borrowings under these market conditions.
Accounting policies and processes are fundamental to how we record and report our financial condition and results of operations. Management must exercise judgment in selecting and applying many of these accounting policies and processes so they comply with U.S. GAAP.
They require management to make estimates about matters that are uncertain. 24 TABLE OF CONTENTS Accounting policies and processes are fundamental to how we record and report our financial condition and results of operations. Management must exercise judgment in selecting and applying many of these accounting policies and processes so they comply with U.S. GAAP.
Negative public opinion could result from our actual or alleged conduct in any number of activities, including lending practices, the failure of any of our products or services to meet our clients’ expectations or applicable regulatory requirements, corporate governance and acquisitions, social media and other marketing activities, and the implementation of environmental, social and governance practices or actions taken by government regulators and community organizations in response to any of the foregoing.
Negative public opinion could result from our actual or alleged conduct in any number of activities, including lending practices, the failure of any of our products or services to meet our clients’ expectations or applicable regulatory requirements, corporate governance and acquisitions, social media and other marketing activities, the acts, comments, or statements made by employees or third parties we have engaged, whether individually or on behalf of us, and the implementation of environmental, social and governance practices or actions taken by government regulators and community organizations in response to any of the foregoing.
The introduction, implementation, withdrawal, success and timing of business initiatives and strategies, including, but not limited to, the opening of new banking centers or entering into new product lines, may be less successful or may be different than anticipated, which could affect our business. The Bank makes certain projections and develops plans and strategies for its banking and financial products.
The introduction, implementation, withdrawal, success and timing of business initiatives and strategies, including, but not limited to, the opening of new banking centers or entering into new product lines, may be less successful or may be different than anticipated, which could affect our business, financial condition and the results of our operations.
Furthermore, we may not be insured against all types of losses as a result of third-party failures, and our insurance coverage may be inadequate to cover all losses resulting from system failures or other disruptions. Failures in our business infrastructure could interrupt the operations or increase the costs of doing business.
Furthermore, we may not be insured against all types of losses as a result of third-party failures, and our insurance coverage may be inadequate to cover all losses resulting from system failures or other disruptions.
Changes in these key assumptions could materially affect our estimate of the reporting unit fair value and could affect our conclusion regarding the existence of potential impairment. 20 TABLE OF CONTENTS A reduction in our credit rating could affect us or the holders of our securities.
Changes in these key assumptions could materially affect our estimate of the reporting unit fair value and could affect our conclusion regarding the existence of potential impairment of goodwill. A reduction in our credit rating could affect us or the holders of our securities. The credit rating agencies assessing our creditworthiness regularly evaluate us, and provide a credit rating.
Negative public opinion could affect our ability to attract and/or retain clients, could expose us to litigation and regulatory action, and could have a material adverse effect on our stock price or result in heightened volatility. Negative public opinion could also affect our ability to borrow funds in the unsecured wholesale debt markets.
Negative public opinion could affect our ability to attract and/or retain clients, attract and/or retain employees, could expose us to litigation and/or regulatory action, and could have a material adverse effect on the results of our operations, our stock price or result in heightened volatility.
If we do not accurately determine demand for our banking and financial products, it could result in us incurring significant expenses without the anticipated increases in revenue, which could result in a material effect on the Bank’s business and/or capital.
The Bank makes certain projections and develops plans and strategies for its banking and financial products. If we do not accurately forecast demand for our banking and financial products, it could result in us incurring significant expenses without the anticipated increases in revenue, which could result in a material effect on the Bank’s business, capital, and/or results of our operations.
First Financial and its subsidiaries are subject to the supervision and regulation of various state and federal regulators, including the Federal Reserve Board, the FDIC, the SEC, the CFPB, the Financial Industry Regulatory Authority, and the ODFI. As such, we are subject to a wide variety of laws and regulations.
We, as well as our subsidiaries, are subject to the supervision and regulation of various state and federal regulators, including the Federal Reserve Board, the FDIC, the SEC, the CFPB, the Financial Industry Regulatory Authority, and ODFI.
Additionally, increases in unemployment also may affect the ability of certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment, may result in loan defaults and foreclosures and may impair the value of our collateral. This is especially relevant in light of the sustained inflation and rising interest rates experienced in 2023.
Additionally, increases in unemployment also may affect the ability of certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment, may result in loan defaults and foreclosures and may impair the value of our collateral.
If the strength of the United States economy in general and the strength of the local economies in which we conduct operations decline, this could result in, among other things, a deterioration of credit quality or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for credit losses.
If the strength of the United States economy declines, this could result in, among other things, a deterioration of credit quality, altered consumer spending habits or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for credit losses.
We may also fail to receive full information with respect to the risks of a counterparty. In addition, in cases where we have extended credit against collateral, we may find that we are under-secured, for example, as a result of sudden declines in market values that reduce the value of collateral or due to fraud with respect to such collateral.
In addition, in cases where we have extended credit against collateral and/or guarantees, we may find that we are under-secured, for example, as a result of sudden declines in market values that reduce the value of collateral or due to fraud with respect to such collateral or the ability of a guarantor to fulfill its financial obligations.
We cannot fully eliminate credit risk, and as a result, credit losses may increase in the future. Weakness in the secondary market for residential mortgage loans could affect us. Disruptions in the secondary market for residential mortgage loans limit the market for and liquidity of many mortgage loans.
We cannot fully eliminate credit risk, and as a result, credit losses may increase in the future and impact our financial condition and results of operations. Weakness in the secondary market for residential mortgage loans could affect our financial condition and results of operations.
The loss of one or more of these large clients would adversely affect the revenue derived from Bannockburn. • Market risk: Foreign currency transactions expose us to market risk, including fluctuations in foreign exchange rates, interest rates, and commodity prices. These fluctuations could result in financial losses or decreased revenues if we fail to accurately predict or manage these risks.
The loss of one or more of these large clients would adversely affect the revenue derived from Bannockburn. • Market risk: Foreign currency and commodities transactions expose us to market risk, including fluctuations in foreign exchange rates, interest rates, and commodity prices.
We maintain an available-for-sale investment securities portfolio, which includes assets with various types of instruments and maturities. At times, we also maintain certain assets that are classified and accounted for as trading assets. The changes in fair value of available-for-sale securities are recognized in shareholders' equity as a component of other comprehensive income.
We maintain an available-for-sale investment securities portfolio, which includes assets with various types of instruments and maturities. At times, we also maintain certain assets that are classified and accounted for as trading assets.
Maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services. Our success depends, in part, on our ability to adapt products and services to evolving industry standards. There is increasing pressure to provide products and services at lower prices, which can reduce net interest income and noninterest income from fee-based products and services.
Our success depends, in part, on our ability to develop, adapt, implement and release products and services to evolving industry standards. There is increasing pressure to provide products and services at lower prices with increased efficiency, which can reduce net interest income and noninterest income from fee-based products and services.
As of December 31, 2023, we had indebtedness of $1.3 billion. Clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding. Checking and savings account balances and other forms of client deposits, including uninsured deposits, could decrease if clients perceive alternative investments as providing superior expected returns.
Clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding. Checking and savings account balances and other forms of client deposits, including uninsured deposits, could decrease if clients perceive alternative investments as providing superior expected returns. We regularly perform liquidity stress testing and sensitivity analyses of deposit assumptions.
We regularly perform liquidity tress testing and sensitivity analyses of deposit assumptions. Both remain critical given recent trends in deposit balance and interest rate movements, as well as uncertainty regarding depositor behavior moving forward. Consumers may move money out of bank deposits in favor of other investments, including digital or cryptocurrency.
Both remain critical given recent trends in deposit balance and interest rate movements, as well as uncertainty regarding depositor behavior moving forward. Consumers may move money out of bank deposits in favor of other investments, including digital assets or cryptocurrency or money market funds, or into alternative financial services providers.
Our whole loan sale agreements require us to repurchase or substitute mortgage loans in the event we breach any of these representations or warranties. In addition, we may be required to repurchase mortgage loans as a result of borrower fraud.
Our whole loan sale agreements require us to repurchase or substitute mortgage loans in the event we breach any of these representations or warranties including those that are breached as a result of misrepresentations or fraud by the borrowers.
Unrealized gains and losses associated with our investment portfolio and mark to market gains and losses associated with our investment portfolio are affected by many factors, including our credit position, interest rate volatility and volatility in capital markets, among other economic factors.
Unrealized gains and losses associated with our investment portfolio and mark-to-market risks associated with our investment portfolio are affected by many factors, including our credit position, interest rate volatility and volatility in capital markets, among other economic factors. Our return on such investments could experience volatility, and such volatility may affect our financial condition and results of operations.
The credit rating agencies assessing our creditworthiness regularly evaluate the Company, and credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including changes in rating methodologies and conditions affecting the financial services industry and the economy.
Credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including changes in rating methodologies and conditions affecting the financial services industry and the economy as a whole. There can be no assurance that we will maintain our current credit rating.
We may not pay dividends on our common shares. Holders of our common shares are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments.
Negative public opinion could also affect our ability to borrow funds in the unsecured wholesale debt markets. We may not pay dividends on our common shares. Holders of our common shares are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments.
In addition, large loans, letters of credit and contracts with individual counterparties in our portfolio magnify the credit risk that we face, as the impact of large borrowers and counterparties not repaying their loans or performing according to the terms of their contracts has a disproportionately significant impact on our credit losses and reserves. 14 TABLE OF CONTENTS The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an effect on our business, results of operations and financial condition.
In addition, large loans, letters of credit and contracts with individual counterparties in our portfolio magnify the credit risk that we face, as the impact of large borrowers and counterparties not repaying their loans or performing according to the terms of their contracts has a disproportionately significant impact on our credit losses, reserves and the results of operations.
Depending upon future circumstances, as well as broader macroeconomic shifts, we may incur significant provision expense for credit losses in future periods. 15 TABLE OF CONTENTS Our foreign exchange business plays a crucial role in facilitating various financial transactions, including foreign exchange, interest rate, and soon commodity hedging for our commercial clients and is largely dependent upon a small number of large clients and market volatility that could adversely affect our financial condition, results of operations, and reputation.
Our foreign exchange business plays a crucial role in facilitating various financial transactions, including foreign exchange, interest rate, and commodity hedging for our commercial clients and is largely dependent upon a small number of large clients and market volatility that could adversely affect our financial condition, results of operations, and reputation.
As our wealth management business grows, we may also face operational risk resulting from inadequate or failed internal processes, systems or errors, and regulatory risk, which could result in penalties or restrictions due to non-compliance with laws and regulations. Negative public opinion could damage our reputation and impact business operations and revenues.
As our wealth management business grows, we may also face operational risk resulting from inadequate or failed internal processes, systems or errors, and regulatory risk, which could result in penalties or restrictions due to non-compliance with laws and regulations. Additionally, many of the same technological advances that compete with our banking services may compete with our wealth management business.
Unauthorized use or disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other breaches in the security of our systems could harm our business.
Failures in our business infrastructure could interrupt our operations, cause reputational harm, increase the costs of doing business and impact the results of our operations. 18 TABLE OF CONTENTS Unauthorized use or disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other breaches in the security of our systems could harm our business.
Accordingly, because of the inherent limitations in management's system of controls, misstatements due to error or fraud may occur and not be detected. Our revenues derived from investment securities may be volatile and subject to a variety of risks. We generally maintain investment securities and trading positions in the fixed income markets.
Our revenues derived from investment securities may be volatile and subject to a variety of risks. We generally maintain investment securities and trading positions in the fixed income markets.
Financial institutions are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (ESG) practices and disclosure. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.
Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.
In 2021, we were able to recapture previous provision expense of $19.0 million as the credit conditions related to COVID-19 were not as significant as originally anticipated. In 2022, we recorded $6.7 million of provision expense as our loan portfolio grew and the overall duration of the portfolio extended due to rising interest rates.
In 2022, we recorded $6.7 million of provision expense as our loan portfolio grew and the overall duration of the portfolio extended due to rising interest rates.
For example, in 2023, the Federal Reserve Open Markets Committee increased the target fed funds rate by 100 basis points resulting in the Bank's net interest margin on a fully tax equivalent basis increasing from 3.77% to 4.40% comprised of a 206 basis point increase in earning asset yields and a 190 basis point increase in total cost of interest-bearing liabilities.
For example, in 2024, the Federal Reserve Open Markets Committee decreased the target fed funds rate by 100 basis points resulting in the Bank's net interest margin on a fully tax equivalent basis decreasing from 4.40% at December 31, 2023 to 4.05% at December 31, 2024 as the increase in funding costs and interest bearing liabilities outpaced the impact from increased asset yields and higher earning asset balances.
Employee error or misconduct may result in failure to implement policies and procedures designed to avoid risks. Moreover, as technology and cyberattacks change over time, we must continually monitor and change systems to guard against new threats. We may not know of and be able to guard against a new threat until after an attack has occurred.
Employee error or misconduct may result in failure to implement policies and procedures designed to avoid risks. Moreover, as technology and cyberattacks change over time, we must continually monitor and change systems to guard against new threats, while also training our employees to remain diligent against cyberattacks.
Our return on such investments could experience volatility, and such volatility may affect our financial condition and results of operations. Additionally, accounting regulations may require us to record a charge prior to the actual realization of a loss when market valuations of such securities are impaired and such impairment is considered to be other than temporary.
Additionally, accounting regulations may require us to record a charge prior to the actual realization of a loss when market valuations of such securities are impaired and such impairment is considered to be other than temporary. We also have investments in mortgage backed securities, including collateralized mortgage obligations.
The effects of mortgage market challenges, combined with reductions in residential real estate market prices and reduced levels of home sales, could affect the value of collateral securing mortgage loans that we hold, mortgage loan originations and profits on sales of mortgage loans.
The effects of these disruptions to the secondary market for residential morgage loans, as well as reductions in residential real estate market prices and declining home sales, could affect the value of collateral securing mortgage loans that we hold, income generated from mortgage loan originations and profits on sales of mortgage loans in the secondary market.
Other considerations include forecasts of revenues and expenses derived from internal management projections for a period of five years, changes in working capital estimates, company specific discount rate derived from a rate build up approach, externally sourced bank peer group market multiples and externally sourced bank peer group change in control premium, all of which are highly subjective and require significant management judgment.
However, significant and/or sustained declines in First Financial’s market capitalization, especially in relation to First Financial’s book value, could be an indication of potential impairment of goodwill. 23 TABLE OF CONTENTS Other considerations that factor into the aggregate estimated fair value of the reporting unit include forecasts of revenues and expenses derived from internal management projections for a period of five years, changes in working capital estimates, company specific discount rate derived from a rate build up approach, externally sourced bank peer group market multiples and externally sourced bank peer group change in control premium, all of which are highly subjective and require significant management judgment.
Our inability to use or access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of our business operations.
We depend on internal systems and outsourced technology to support these data storage and processing operations, as well as harm our reputation amongst our customers. Our inability to use or access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of our business operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeNo risks from cybersecurity threats, including those resulting from any previous cybersecurity incidents, have materially affected the Company, including its business strategy, results of operations or financial condition. Governance First Financial’s board of directors is responsible for overseeing the Company’s cybersecurity risk management objectives and risk tolerance as part of its oversight of the Company’s compliance and risk management activities.
Biggest changeThe Company is not aware of risks from cybersecurity threats, including those resulting from any previous cybersecurity incidents, which have materially affected the Company, including its business strategy, results of operations, or financial condition.
Cyber threats and attacks adapt and evolve rapidly, so First Financial works to continuously enhance controls and processes to protect its networks, applications, and data from attack, damage or unauthorized access. Critical components to the Company’s cyber risk control structure include corporate governance, threat intelligence, security operations, security awareness training and patch management programs.
Cyber threats and attacks adapt and evolve rapidly, and the Company works to continuously enhance controls and processes to protect its networks, applications, and data from attack, damage, or unauthorized access. Critical components to the Company’s cyber risk control structure include corporate governance, access management, threat intelligence, security operations, security awareness training, and vulnerability management programs.
Specific oversight of the cybersecurity function is delegated to the Board Risk Committee. The Chair of the Board Risk Committee has extensive cybersecurity experience, including both experience as a chief information security officer of a publicly traded financial 24 TABLE OF CONTENTS institution and as an outside cybersecurity consultant. The committee chairperson maintains CISSP and CRISC certifications.
The Chair of the Board Risk Committee has extensive cybersecurity experience, including both experience as a chief information security officer of a publicly traded financial institution and as an outside cybersecurity consultant. The committee chairperson maintains CISSP and CRISC certifications.
Operational capability, including cyber defense, vulnerability management, and third-party risk management. b. Risk assessments, including GLBA assessments and attack simulations. c. Program maturity, including MITRE and the Federal Financial Institutions Examination’s Council’s maturity framework. d. Internal and External Audit, including external assessments, internal audit results, and regulator exam results.
Operational capability, including cyber defense, vulnerability management, and third-party risk management. b. Risk assessments, including GLBA assessments and attack simulations. 28 TABLE OF CONTENTS c. Program maturity, i ncluding the NIST Cybersecurity Framework (CSF) and the Federal Financial Institutions Examination’s Council’s (FFIEC) maturity framework. d. Internal and External Audit, including external assessments, internal audit results, and regulator exam results.
The Company uses a variety of tools to monitor and mitigate cybersecurity risks, including employee training, phishing simulators, incident response tabletops, cybersecurity insurance and business continuity planning for the protection of the Company’s assets. Additionally, the Company’s cybersecurity function is audited on an annual basis by a third party using the MITRE ATTACK framework.
The Company uses a variety of tools to monitor and mitigate cybersecurity risks, including employee training, simulated phishing exercises, incident response tabletops, cybersecurity insurance, and business continuity planning for the protection of the Company’s assets. Additionally, the Company’s cybersecurity function is audited on an annual basis by internal audit and external regulatory examiners.
Cyber risk mitigation includes effectively identifying, protecting against, detecting, responding to and recovering from cyber threats. The Company’s cybersecurity program is overseen by its Chief Information Security and Privacy Officer (the “CISO”).
Cyber risk mitigation includes effectively identifying, protecting against, detecting, responding to, and recovering from cyber threats. The Company’s cybersecurity program is overseen by its Chief Information Security and Privacy Officer (the “CISO”). The Company’s CISO has over 25 years of experience in information security and technology governance, risk, and compliance, including a previous CISO position at a large regional bank.
Removed
The Company’s CISO has over 20 years’ experience in the information security industry, including a previous CISO position at a large global conglomerate based internationally, and as head of product security for a US-based large global conglomerate. The Company’s CISO also has previous financial services experiences as head of cyber defense for a large regional bank.
Added
The Company’s CISO has also held leadership roles in enterprise risk management and internal audit for large financial service organizations, as well as at a global audit, assurance, and advisory firm.
Added
Governance First Financial’s board of directors is responsible for overseeing the Company’s cybersecurity risk management objectives and risk tolerance as part of its oversight of the Company’s compliance and risk management activities. Specific oversight of the cybersecurity function is delegated to the Board Risk Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. At December 31, 2023, the Company operated 130 full service banking centers, 24 of which are leased facilities. Our core banking operating markets are located within the four state region of Ohio, Indiana, Kentucky and Illinois.
Biggest changeItem 2. Properties. At December 31, 2024, the Company operated 127 full service banking centers, 22 of which are leased facilities. Our core banking operating markets are located within the four state region of Ohio, Indiana, Kentucky and Illinois.
First Financial's executive office is a leased facility located in Cincinnati, Ohio and we operate 57 banking centers in Ohio, three banking centers in Illinois, 58 banking centers in Indiana and 12 banking centers in Kentucky.
First Financial's executive office is a leased facility located in Cincinnati, Ohio and we operate 54 banking centers in Ohio, three banking centers in Illinois, 59 banking centers in Indiana and 11 banking centers in Kentucky.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the ultimate liability with respect to these other litigation matters and claims cannot be determined at this time, we believe that damages, if any, and other amounts relating to pending matters are not likely to be material to our consolidated financial position or results of operations.
Biggest changeWhile the ultimate liability with respect to these other litigation matters and claims cannot be 29 TABLE OF CONTENTS determined at this time, we believe that damages, if any, and other amounts relating to pending matters, such as costs, are not likely to be material to our consolidated financial position or results of operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeHe is responsible for managing and monitoring the loan portfolio and other related credit functions in a risk appropriate manner including underwriting, approval, and collections. Mr. Harrod first joined First Financial in 2015 and has held various credit 26 TABLE OF CONTENTS and management positions since then in specialty banking, corporate banking, commercial and industrial lending and commercial finance.
Biggest changeHarrod - Bill Harrod is the Chief Credit Officer of First Financial, a role he has held since October 2017. He is responsible for managing and monitoring the loan portfolio and other related credit functions in a risk appropriate manner 31 TABLE OF CONTENTS including underwriting, approval, and collections. Mr.
In December 2023 the Board authorized a new two-year 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 2022 Stock Repurchase Plan in the fourth quarter of 2023.
In December 2023 the Board authorized a new two-year 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 fourth quarter of 2024.
He began his career at Fifth Third Bank as a product manager within the bank's Trust and Investment business. 27 TABLE OF CONTENTS PART II Item 5 . Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
He began his career at Fifth Third Bank as a product manager within the bank's Trust and Investment business. 32 TABLE OF CONTENTS PART II Item 5 . Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Stock Performance Graph The stock performance graph contained in “Total Return to Shareholders” of First Financial's 2023 Annual Report to Shareholders (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item. (b) Unregistered Sales of Equity Securities and Use of Proceeds None.
Stock Performance Graph The stock performance graph contained in “Total Return to Shareholders” of First Financial's 2024 Annual Report to Shareholders (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item. (b) Unregistered Sales of Equity Securities and Use of Proceeds None.
For further information see Note 3 - Restrictions on Cash and Dividends in the Notes to Consolidated Financial Statements of First Financial's 2023 Annual Report to Shareholders (included as Exhibit 13 of this report), which is incorporated by reference in response to this item.
For further information see Note 3 - Restrictions on Cash and Dividends in the Notes to Consolidated Financial Statements of First Financial's 2024 Annual Report to Shareholders (included as Exhibit 13 of this report), which is incorporated by reference in response to this item.
Harris President, Yellow Cardinal Advisory Group 55 The following is a brief description of the business experience over the past five years of the individuals named above. Archie M.
Harris President, Yellow Cardinal Advisory Group 56 The following is a brief description of the business experience over the past five years of the individuals named above. Archie M.
The officers are elected annually at the organizational meeting of the board of directors and serve until the next organizational meeting, or until their successors are elected and duly qualified. Position with First Financial Bancorp Age Archie M. Brown President and Chief Executive Officer 63 James M. Anderson EVP, Chief Financial Officer and Chief Operating Officer 52 Richard S.
The officers are elected annually at the organizational meeting of the board of directors and serve until the next organizational meeting, or until their successors are elected and duly qualified. Position with First Financial Bancorp Age Archie M. Brown President and Chief Executive Officer 64 James M. Anderson EVP, Chief Financial Officer and Chief Operating Officer 53 Richard S.
(a) Market information, holders, dividends First Financial's common shares are listed on The NASDAQ Global Select Stock Market® under the symbol "FFBC." As of February 21, 2024, our common shares were held by approximately 3,660 shareholders of record, a number that does not include beneficial owners who hold shares in “street name,” or shareholders from previously acquired companies that have not exchanged their stock.
(a) Market information, holders, dividends First Financial's common shares are listed on The NASDAQ Global Select Stock Market® under the symbol "FFBC." As of February 19, 2025, our common shares were held by approximately 3,453 shareholders of record, a number that does not include beneficial owners who hold shares in “street name,” or shareholders from previously acquired companies that have not exchanged their stock.
Dennen EVP, Chief Corporate Banking Officer 57 Karen B. Woods EVP, General Counsel and Chief Administrative Officer 55 William R. Harrod EVP, Chief Credit Officer 56 Amanda N. Neeley EVP, Chief Consumer Banking and Strategy Officer 43 Gregory A.
Dennen EVP, Chief Corporate Banking Officer 58 Karen B. Woods EVP, General Counsel and Chief Administrative Officer 56 William R. Harrod EVP, Chief Credit Officer 57 Amanda N. Neeley EVP, Chief Consumer Banking and Strategy Officer 44 Gregory A.
At December 31, 2023, no stock options and 1,072,031 shares of restricted stock were outstanding. Additional information about stock options, restricted stock and restricted stock units is included in Note 21 - Stock Options and Awards in the Notes to Consolidated Financial Statements in First Financial’s 2023 Annual Report to Shareholders and in Item 12 below.
At December 31, 2024, no stock options and 1,002,461 shares of restricted stock were outstanding. Additional information about stock options, restricted stock and restricted stock units is included in Note 21 - Stock Options and Awards in the Notes to Consolidated Financial Statements in First Financial’s 2024 Annual Report to Shareholders and in Item 12 below.
Item 4. Mine Safety Disclosures. Not applicable. 25 TABLE OF CONTENTS Supplemental Item. Information About Our Executive Officers. The following table sets forth information concerning the executive officers of First Financial as of February 21, 2024. The executive officers perform policy-making functions for First Financial.
Item 4. Mine Safety Disclosures. Not applicable. 30 TABLE OF CONTENTS Supplemental Item. Information About Our Executive Officers. The following table sets forth information concerning the executive officers of First Financial as of February 19, 2025. The executive officers perform policy-making functions for First Financial.
Amanda N. Neeley - Mandy Neeley is the Chief Consumer Banking and Strategy Officer of First Financial. Ms. Neeley is responsible for the launch and evolution of the First Financial brand, the introduction of the Premier Business Bank acquisition strategy, the advancement of sales and enterprise customer relationship management processes, and development of a formalized strategic planning program. Ms.
Neeley is responsible for the launch and evolution of the First Financial brand, the introduction of the Premier Business Bank acquisition strategy, the advancement of sales and enterprise customer relationship management processes, and development of a formalized strategic planning program. Ms.
She joined First Financial in April 2018 following the merger of First Financial and MainSource and served as General Counsel and Chief Risk Officer from 2021-2022. She previously served as Corporate Counsel and Chief Risk Officer of MainSource from January 2016 to April 2018. Prior to joining MainSource, Ms. Woods was a partner at Krieg DeVault LLP in Indianapolis, Indiana.
She joined First Financial in April 2018 following the merger of First Financial and MainSource and served as General Counsel and Chief Risk Officer from 2018-2022. She previously served as Corporate Counsel and Chief Risk Officer of MainSource from January 2016 to April 2018. Prior to joining MainSource, Ms.
Ms. Woods previously served as a judicial law clerk to the Honorable John G. Baker, Indiana Court of Appeals. William R. Harrod - Bill Harrod is the Chief Credit Officer of First Financial, a role he has held since October 2017.
Woods was a partner at Krieg DeVault LLP in Indianapolis, Indiana where her practice focused on representing financial institutions and corporate clients. Ms. Woods previously served as a judicial law clerk to the Honorable John G. Baker, Indiana Court of Appeals. William R.
Added
Harrod first joined First Financial in 2015 and has held various credit and management positions since then in specialty banking, corporate banking, commercial and industrial lending and commercial finance. Amanda N. Neeley - Mandy Neeley is the Chief Consumer Banking and Strategy Officer of First Financial. Ms.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management's Discussion and Analysis of Financial Condition and Results Of Operations. The information contained in the Management’s Discussion and Analysis section (including certain forward looking statements) of First Financial’s 2023 Annual Report to Shareholders (included as Exhibit 13 of this report) is incorporated herein by reference in response to this item.
Biggest changeItem 7. Management's Discussion and Analysis of Financial Condition and Results Of Operations. The information contained in the Management’s Discussion and Analysis section (including certain forward looking statements) of First Financial’s 2024 Annual Report to Shareholders (included as Exhibit 13 of this report) is incorporated herein by reference in response to this item.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe information contained in the Market Risk section and in Table 20 - Market Risk Disclosure of the Management’s Discussion and Analysis section, both of which are in First Financial's 2023 Annual Report to Shareholders (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item. 28 TABLE OF CONTENTS
Biggest changeThe information contained in the Market Risk section and in Table 20 - Market Risk Disclosure of the Management’s Discussion and Analysis section, both of which are in First Financial's 2024 Annual Report to Shareholders (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item. 33 TABLE OF CONTENTS

Other FFBC 10-K year-over-year comparisons