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What changed in FIRST FINANCIAL CORP /IN/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FIRST FINANCIAL CORP /IN/'s 2024 and 2025 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 2025 report.

+195 added−198 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)

Top changes in FIRST FINANCIAL CORP /IN/'s 2025 10-K

195 paragraphs added · 198 removed · 147 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

30 edited+2 added−7 removed129 unchanged
Biggest changeThe CFPB can issue cease-and-desist orders against banks and other entities that violate consumer financial laws. The CFPB may also institute a civil action against an entity in violation of federal consumer financial law in order to impose a civil penalty or an injunction.
Biggest changeThe CFPB has the authority to investigate possible violations of federal consumer financial law, hold hearings and commence civil litigation. The CFPB can issue cease-and-desist orders against banks and other entities that violate consumer financial laws.
Fully phased in on January 1, 2019, the Basel III Capital Rules require the Corporation and its banking subsidiaries to maintain: ● a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% CET1 ratio as that buffer is phased in, effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7% upon full implementation); 7 Table of Contents ● a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation); ● a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation), and ● a minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average assets.
Fully phased in on January 1, 2019, the Basel III Capital Rules require the Corporation and its banking subsidiaries to maintain: ● a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% CET1 ratio as that buffer is phased in, effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7% upon full implementation); ● a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation); ● a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation), and 7 Table of Contents ● a minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average assets.
Act Requirements . Regulations issued under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ( the “S.A.F.E. Act” ) require residential mortgage loan originators who are employees of institutions regulated by the foregoing agencies, including national banks, to meet the registration requirements of the S.A.F.E. Act. The S.A.F.E.
S.A.F.E. Act Requirements . Regulations issued under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ( the “S.A.F.E. Act” ) require residential mortgage loan originators who are employees of institutions regulated by the foregoing agencies, including national banks, to meet the registration requirements of the S.A.F.E. Act. The S.A.F.E.
In addition, bank holding companies that qualify and elect to be financial holding companies such as the Corporation, may engage in any activity, or acquire and retain the 8 Table of Contents shares of a company engaged in any activity, that is either (i) financial in nature or incidental to such financial activity (as determined by the Federal Reserve in consultation with the Secretary of the Treasury) or (ii) complementary to a financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally (as solely determined by the Federal Reserve), without prior approval of the Federal Reserve.
In addition, bank holding companies that qualify and elect to be financial holding companies such as the Corporation, may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either (i) financial in nature or incidental to such financial activity (as determined by the Federal Reserve in consultation with the Secretary of the Treasury) or (ii) complementary to a financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally (as solely determined by the Federal Reserve), without prior approval of the Federal Reserve.
The Guidelines require each financial institution, under the supervision and ongoing oversight of its Board of Directors, to create a comprehensive written information security program designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazards 14 Table of Contents to the security or integrity of such information; protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer; and implement response programs for security breaches. ● Electronic Funds Transfer Act and Regulation E.
The Guidelines require each financial institution, under the supervision and ongoing oversight of its Board of Directors, to create a comprehensive written information security program designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazards to the security or integrity of such information; protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer; and implement response programs for security breaches. ● Electronic Funds Transfer Act and Regulation E.
Extensions of credit by the Bank to its executive officers, directors, certain principal shareholders, and their related interests must: ● be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties; and ● not involve more than the normal risk of repayment or present other unfavorable features.
Extensions of credit by the Bank to its executive officers, directors, certain principal shareholders, and their related interests must: ● be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties; and 10 Table of Contents ● not involve more than the normal risk of repayment or present other unfavorable features.
The Electronic Funds Transfer Act, which is implemented by Regulation E, governs automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking service. ● Gramm-Leach-Bliley Act, Fair and Accurate Credit Transactions Act.
The Electronic Funds Transfer Act, which is implemented by Regulation E, governs automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking service. 14 Table of Contents ● Gramm-Leach-Bliley Act, Fair and Accurate Credit Transactions Act.
The Corporation believes that, as of December 31, 2024, the Bank was “well capitalized” based on the aforementioned ratios. Temporary Regulatory Capital Relief Related to Impact of CECL.
The Corporation believes that, as of December 31, 2025, the Bank was “well capitalized” based on the aforementioned ratios. Temporary Regulatory Capital Relief Related to Impact of CECL.
In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in April 2011. These regulations were later amended in 2016, however rulings have not yet been finalized.
In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation 12 Table of Contents arrangements. The agencies proposed such regulations in April 2011. These regulations were later amended in 2016, however rulings have not yet been finalized.
A bank will be (i) “well capitalized” if the institution has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a common equity tier 1 risk-based capital ratio of 6.5% or greater and a leverage ratio of 5.0% or greater, and is not subject to any order or written directive by any such regulatory authority to meet and maintain a specific capital level for any capital measure; (ii) “adequately capitalized” if the institution has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a common equity Tier 1 risk-based capital ratio of 4.5% or greater and a leverage ratio of 4.0% or greater and is not “well capitalized”; (iii) “undercapitalized” if the institution has a total risk-based capital ratio that is less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a common equity Tier 1 risk-based capital ratio of 4.5%, or a leverage ratio of less than 4.0%; (iv) “significantly undercapitalized” if the institution has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.5%, a common equity Tier 1 risk-based capital ratio of less than 3.0%, or a leverage ratio of less than 3.0%; and (v) “critically undercapitalized” if the institution’s tangible equity is equal to or less than 2.0% of average quarterly tangible assets.
The relevant capital measures are the total risk-based capital ratio, the Tier 1 risk-based capital ratio, the common equity Tier 1 risk-based capital ratio and the leverage ratio. 11 Table of Contents A bank will be (i) “well capitalized” if the institution has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a common equity tier 1 risk-based capital ratio of 6.5% or greater and a leverage ratio of 5.0% or greater, and is not subject to any order or written directive by any such regulatory authority to meet and maintain a specific capital level for any capital measure; (ii) “adequately capitalized” if the institution has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a common equity Tier 1 risk-based capital ratio of 4.5% or greater and a leverage ratio of 4.0% or greater and is not “well capitalized”; (iii) “undercapitalized” if the institution has a total risk-based capital ratio that is less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a common equity Tier 1 risk-based capital ratio of 4.5%, or a leverage ratio of less than 4.0%; (iv) “significantly undercapitalized” if the institution has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.5%, a common equity Tier 1 risk-based capital ratio of less than 3.0%, or a leverage ratio of less than 3.0%; and (v) “critically undercapitalized” if the institution’s tangible equity is equal to or less than 2.0% of average quarterly tangible assets.
In accordance with Federal Reserve policy, the Corporation is expected to act as a source of financial strength to the Bank and to commit resources to support the Bank in circumstances in which the Corporation might not otherwise do so. 9 Table of Contents Sarbanes-Oxley Act of 2002 .
In accordance with Federal Reserve policy, the Corporation is expected to act as a source of financial strength to the Bank and to commit resources to support the Bank in circumstances in which the Corporation might not otherwise do so. Sarbanes-Oxley Act of 2002 .
The Bank paid a total FDIC assessment of $2.8 million in 2024. In addition to the FDIC insurance premiums, the Bank is required to make quarterly payments on bonds issued by the Financing Corporation (“FICO”), an agency of the Federal government established to recapitalize a predecessor deposit insurance fund. These assessments will continue until the FICO bonds are repaid.
The Bank paid a total FDIC assessment of $2.9 million in 2025. In addition to the FDIC insurance premiums, the Bank is required to make quarterly payments on bonds issued by the Financing Corporation (“FICO”), an agency of the Federal government established to recapitalize a predecessor deposit insurance fund. These assessments will continue until the FICO bonds are repaid.
The Corporation, which is headquartered in Terre Haute, Indiana, offers a wide variety of financial services including commercial, mortgage and consumer lending, lease financing, trust account services, and depositor services through its subsidiary. At the close of business in 2024 the Corporation and its subsidiaries had 937 full-time equivalent employees.
The Corporation, which is headquartered in Terre Haute, Indiana, offers a wide variety of financial services including commercial, mortgage and consumer lending, lease financing, trust account services, and depositor services through its subsidiary. At the close of business in 2025 the Corporation and its subsidiaries had 946 full-time equivalent employees.
The Bank is also 10 Table of Contents prohibited from engaging in certain transactions with certain affiliates and insiders unless the transactions are on terms substantially the same, or at least as favorable to such institution or its subsidiaries, as those prevailing at the time for comparable transactions with nonaffiliated companies.
The Bank is also prohibited from engaging in certain transactions with certain affiliates and insiders unless the transactions are on terms substantially the same, or at least as favorable to such institution or its subsidiaries, as those prevailing at the time for comparable transactions with nonaffiliated companies.
Additionally, the final rule generally prohibits prepayment penalties (subject to certain exceptions) and sets 13 Table of Contents forth a 3-year record retention period with respect to documenting and demonstrating the ability-to-repay requirement and other provisions. USA Patriot Act .
Additionally, the final rule generally prohibits prepayment penalties (subject to certain exceptions) and sets forth a 3-year record retention period with respect to documenting and demonstrating the ability-to-repay requirement and other provisions. USA Patriot Act .
The Securities and Exchange Commission maintains a web site (http://www.sec.gov) that contains reports, proxy statements, and other information. The Corporation’s filings are also accessible at no cost on the Corporation’s website at www.first-online.com. 15 Table of Contents
The Securities and Exchange Commission maintains a web site (http://www.sec.gov) that contains reports, proxy statements, and other information. The Corporation’s filings are also accessible at no cost on the Corporation’s website at www.first-online.com.
Among other requirements, the Sarbanes-Oxley Act established: (i) requirements for audit committees of public companies, including independence and expertise standards; (ii) additional responsibilities regarding financial statements for the chief executive officers and chief financial officers of reporting companies; (iii) standards for auditors and regulation of audits; (iv) increased disclosure and reporting obligations for reporting companies regarding various matters relating to corporate governance, and (v) new and increased civil and criminal penalties for violation of the securities laws.
Among other requirements, the Sarbanes-Oxley Act established: (i) requirements for audit committees of public companies, including independence and expertise standards; (ii) additional responsibilities regarding financial statements for the chief executive officers and chief financial officers of reporting companies; (iii) standards for auditors and regulation of audits; (iv) increased disclosure and reporting obligations for reporting companies regarding various matters relating to corporate governance, and (v) new and increased civil and criminal penalties for violation of the securities laws. 9 Table of Contents The Bank General Regulatory Supervision .
The USA Patriot Act contains sweeping anti-money laundering and financial transparency laws and requires financial institutions to implement additional policies and procedures with respect to, or additional measures designed to address, any or all of the following matters, among others: money laundering and currency crimes, customer identification verification, cooperation among financial institutions, suspicious activities and currency transaction reporting. S.A.F.E.
The USA Patriot Act contains sweeping anti-money laundering and financial transparency laws and requires financial institutions to implement additional policies and procedures with respect to, or additional measures designed to address, any or all of the following matters, among others: 13 Table of Contents money laundering and currency crimes, customer identification verification, cooperation among financial institutions, suspicious activities and currency transaction reporting.
These regulations contain supplemental rules to determine qualifying and excess capital, calculate risk-weighted assets, calculate market risk-equivalent assets and calculate risk-based capital ratios adjusted for market risk. 11 Table of Contents Prompt Corrective Action .
These regulations contain supplemental rules to determine qualifying and excess capital, calculate risk-weighted assets, calculate market risk-equivalent assets and calculate risk-based capital ratios adjusted for market risk. Prompt Corrective Action .
REGULATION AND SUPERVISION The Corporation and its subsidiaries operate in highly regulated environments and are subject to supervision and regulation by several governmental regulatory agencies, including the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Office of the Comptroller of the Currency (the “OCC”), and the Federal Deposit Insurance Corporation (the “FDIC”).
The Corporation has no foreign activities. 5 Table of Contents REGULATION AND SUPERVISION The Corporation and its subsidiaries operate in highly regulated environments and are subject to supervision and regulation by several governmental regulatory agencies, including the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Office of the Comptroller of the Currency (the “OCC”), and the Federal Deposit Insurance Corporation (the “FDIC”).
The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the 12 Table of Contents incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option).
The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Corporation did not adopt the capital transition relief.
Certain regulatory capital ratios for the Bank as of December 31, 2024, are shown below: ● 12.76% CET1 to risk-weighted assets; ● 12.76% Tier 1 capital to risk-weighted assets; ● 13.81% Total capital to risk-weighted assets; and ● 10.26% leverage ratio. The Corporation The Bank Holding Company Act .
Certain regulatory capital ratios for the Bank as of December 31, 2025, are shown below: ● 13.11% CET1 to risk-weighted assets; ● 13.11% Tier 1 capital to risk-weighted assets; ● 14.14% Total capital to risk-weighted assets; and ● 10.82% leverage ratio. The Corporation The Bank Holding Company Act .
In addition to its branches, it has a main office in downtown Terre Haute and a 50,000-square-foot commercial building on South Third Street in Terre Haute, which serves as the Corporation’s operations center and provides additional office space.
In addition to its branches, it has a main office in downtown Terre Haute and a 50,000-square-foot commercial building on South Third Street in Terre Haute, which serves as the Corporation’s operations center and provides additional office space. JBMM, LLC and Fort Webb LP, LLC are both located in Christian County, Ky.
Abusive acts or practices are defined as those that: (1) materially interfere with a consumer’s ability to understand a term or condition of a consumer financial product or service, or (2) take unreasonable advantage of a consumer’s: ● lack of financial savvy, ● inability to protect himself in the selection or use of consumer financial products or services, or ● reasonable reliance on a covered entity to act in the consumer’s interests. 6 Table of Contents The CFPB has the authority to investigate possible violations of federal consumer financial law, hold hearings and commence civil litigation.
Abusive acts or practices are defined as those that: (1) materially interfere with a consumer’s ability to understand a term or condition of a consumer financial product or service, or (2) take unreasonable advantage of a consumer’s: ● lack of financial savvy, ● inability to protect himself in the selection or use of consumer financial products or services, or ● reasonable reliance on a covered entity to act in the consumer’s interests.
Certain regulatory capital ratios for the Corporation as of December 31, 2024, are shown below: ● 12.43% CET1 to risk-weighted assets; ● 12.43% Tier 1 capital to risk-weighted assets; ● 13.46% Total capital to risk-weighted assets; and ● 10.38% leverage ratio.
Certain regulatory capital ratios for the Corporation as of December 31, 2025, are shown below: ● 13.21% CET1 to risk-weighted assets; ● 13.21% Tier 1 capital to risk-weighted assets; ● 14.22% Total capital to risk-weighted assets; and ● 11.25% leverage ratio.
Investments, Control, and Activities . With some limited exceptions, the Bank Holding Company Act requires every bank holding company to obtain the prior approval of the Federal Reserve before acquiring another bank holding company or acquiring more than five percent of the voting shares of a bank (unless it already owns or controls the majority of such shares).
With some limited exceptions, the Bank Holding Company Act requires every bank holding company to obtain the prior approval of the Federal Reserve before acquiring another bank holding company or acquiring more than five percent of the voting shares of a bank (unless it already owns or controls the majority of such shares). 8 Table of Contents Bank holding companies are prohibited, with certain limited exceptions, from engaging in activities other than those of banking or of managing or controlling banks.
BASEL III In July 2013, the federal banking agencies published the Basel III Capital Rules establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act.
The rules implement the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act.
The total loans and extensions of credit to a borrower outstanding at one time and not fully secured may not exceed 15 percent of the bank’s capital and unimpaired surplus.
The deposits of the Bank are insured by the FDIC and are subject to the FDIC’s rules and regulations respecting the insurance of deposits. See “Deposit Insurance”. Lending Limits . The total loans and extensions of credit to a borrower outstanding at one time and not fully secured may not exceed 15 percent of the bank’s capital and unimpaired surplus.
The Bank General Regulatory Supervision . The Bank is a national bank organized under the laws of the United States of America and is subject to the supervision of the OCC, whose examiners conduct periodic examinations of the Bank.
The Bank is a national bank organized under the laws of the United States of America and is subject to the supervision of the OCC, whose examiners conduct periodic examinations of the Bank. The Bank must undergo regular on-site examinations by the OCC and must submit quarterly and annual reports to the OCC concerning its activities and financial condition.
JBMM, LLC and Fort Webb LP, LLC are both located in Christian County, Ky. 5 Table of Contents COMPETITION First Financial Bank faces competition from other financial institutions. These competitors consist of commercial banks, a mutual savings bank and other financial institutions, including consumer finance companies, insurance companies, brokerage firms and credit unions.
COMPETITION First Financial Bank faces competition from other financial institutions. These competitors consist of commercial banks, a mutual savings bank and other financial institutions, including consumer finance companies, insurance companies, brokerage firms and credit unions. The Corporation’s business activities are centered in west-central Indiana, east-central Illinois, western Kentucky, eastern and central Tennessee, and northern Georgia.
Removed
It operates seven full-service banking branches within the county; three in Clay County, Ind.; one in Daviess County, Ind.; one in Greene County, Ind.; one in Knox County, Ind.; two in Parke County, Ind.; one in Putnam County, Ind., two in Sullivan County, Ind.; one in Vanderburgh, County, Ind.; three in Vermillion County, Ind.; four in Champaign County, Illinois; one in Clark County, Ill.; one in Coles County, Ill.; one in Crawford County, Ill.; one in Franklin County, Ill.; one in Jasper County, Ill.; two in Jefferson County, Ill.; one in Lawrence County, Ill.; two in Livingston County, Ill.; two in Marion County, Ill.; two in McLean County, Ill.; one in Richland County, Ill.; five in Vermilion County, Ill.; one in Wayne County, Ill; one in Breckinridge County, Kentucky; one in Calloway County, Ky; three in Christian County, Ky; two in Fulton County, Ky; two in Hancock County, Ky; two in Hopkins County, Ky; two in Marshall County, Ky; one in Todd County, Ky; one in Trigg County, Ky; one in Warren County, Ky; one in Bradley County, Tennessee; three in Cheatham County, Tn; two in Hamilton County, Tn; one in Meigs County, Tn; three in Montgomery County, Tn; one in Polk County, Tn; three in Rhea County, Tn; and two in Roane County, Tn.
Added
It operates six full-service banking branches within the county. In addition to the six branches in Vigo County, the Bank operates fifteen other full-service banking branches in Indiana; twenty-four branches in Illinois; sixteen branches in Kentucky; fifteen branches in Tennessee; and three branches in Georgia.; There are eight loan production offices, four in Indiana; and four in Tennessee.
Removed
There are seven loan production offices, one in Allen County, Indiana; one in Hamilton County, Indiana; one in Monroe County, Indiana; one in Vanderburgh County, Indiana; one in Hamilton County, Tennessee; one in Rutherford County, Tn; and one in Williamson County, Tn.
Added
The CFPB may also institute a civil action against an entity in violation of federal consumer financial law in order to impose a civil penalty or an injunction. 6 Table of Contents BASEL III In July 2013, the federal banking agencies published the Basel III Capital Rules establishing a new comprehensive capital framework for U.S. banking organizations.
Removed
The Corporation’s business activities are centered in west-central Indiana, east-central Illinois, western Kentucky, eastern and central Tennessee, and northern Georgia. The Corporation has no foreign activities.
Removed
Bank holding companies are prohibited, with certain limited exceptions, from engaging in activities other than those of banking or of managing or controlling banks.
Removed
The Bank must undergo regular on-site examinations by the OCC and must submit quarterly and annual reports to the OCC concerning its activities and financial condition. The deposits of the Bank are insured by the FDIC and are subject to the FDIC’s rules and regulations respecting the insurance of deposits. See “Deposit Insurance”. Lending Limits .
Removed
The relevant capital measures are the total risk-based capital ratio, the Tier 1 risk-based capital ratio, the common equity Tier 1 risk-based capital ratio and the leverage ratio.
Removed
The Corporation did not adopt the capital transition relief. Incentive Compensation .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

57 edited+41 added−15 removed109 unchanged
Biggest changeAdditionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than the Corporation can. ​ The Corporation’s ability to compete successfully depends on a number of factors, including, among other things: ​ • the ability to develop, maintain and build upon long-term customer relationships based on top quality service, and safe, sound assets; • the ability to expand the Corporation's market position; • the scope, relevance and pricing of products and services offered to meet customer needs and demands; • the rate at which the Corporation introduces new products and services relative to its competitors; • customer satisfaction with the Corporation's level of service; and 20 Table of Contents • industry and general economic trends. ​ Failure to perform in any of these areas could significantly weaken the Corporation's competitive position, which could adversely affect the Corporation's growth and profitability, which, in turn, could have a material adverse effect on the Corporation's financial condition and results of operations. ​ The Corporation’s accounting estimates and risk management processes rely on analytical and forecasting models, which, if inadequate, may result in a material adverse effect on our business, financial condition, or results of operation. ​ The processes the Corporation uses to estimate its allowance for credit losses and to measure the fair value of financial instruments, as well as the processes used to estimate the effects of changing interest rates and other market measures on the Corporation’s financial condition and results of operations, depend upon the use of analytical and forecasting models.
Biggest changeIn addition, federal agencies are required to issue regulations adopting the GENIUS Act, which will impact the regulatory framework for stablecoins. ​ The Corporation’s ability to compete successfully depends on a number of factors, including, among other things: ​ • the ability to develop, maintain and build upon long-term customer relationships based on top quality service, and safe, sound assets; • the ability to expand the Corporation's market position; • the scope, relevance and pricing of products and services offered to meet customer needs and demands; • the rate at which the Corporation introduces new products and services relative to its competitors; • customer satisfaction with the Corporation's level of service; • customer preferences for traditional banking services; and • industry and general economic trends. ​ 19 Table of Contents Failure to perform in any of these areas could significantly weaken the Corporation's competitive position, which could increase our funding costs, impact our liquidity, and adversely affect the Corporation's growth and profitability, which, in turn, could have a material adverse effect on the Corporation's financial condition and results of operations. ​ A lack of liquidity could affect our operations and jeopardize our financial condition. ​ The Corporation requires liquidity to meet our deposit and other obligations as they come due.
While the Federal Reserve took steps to combat the heightened levels of inflation that began in 2021, primarily through increases to the target fed funds rate, continued levels of inflation and monetary policy adopted by the Federal Reserve to combat such inflation, could have complex effects on our business and results of operations, some of which could be materially adverse.
While the Federal Reserve took steps to combat the heightened levels of inflation that began in 2021, primarily through increases to the target fed funds rate, continued levels of inflation and/or monetary policy adopted by the Federal Reserve to combat such inflation, could have complex effects on our business and results of operations, some of which could be materially adverse.
The Corporation and the Bank operate in a highly regulated environment and we are subject to extensive regulation, supervision, and examination by the Federal Reserve, the OCC, and the FDIC and DFI, respectively. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds, and the banking system as a whole, not our shareholders.
The Corporation and the Bank operate in a highly regulated environment and we are subject to extensive regulation, supervision, and examination by the Federal Reserve, the OCC, the FDIC and DFI. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds, and the banking system as a whole, not our shareholders.
The Corporation’s common stock price can fluctuate significantly in response to a variety of factors, including: ​ • announcements and news reports relating to the Corporation’s business and trends, concerns, and other issues in the financial services industry generally; • fluctuations in the Corporation’s results of operations; • sales or purchases of substantial amounts of the Corporation’s securities in the marketplace; • a shortfall or excess in revenues or earnings compared to securities analysts’ expectations; • changes in analysts’ recommendations or projections; • actual or expected economic conditions that are perceived to affect the Corporation, such as changes in real estate values or interest rates; • perceptions in the marketplace regarding the Corporation and/or our competitors; • new technology used, or services offered, by competitors; • changes in applicable government regulation; • macroeconomic and geopolitical factors discussed in this Risk Factors section; and • the Corporation’s announcement of new acquisitions or other projects. ​ As such, the market price of the Corporation’s common stock may not accurately reflect the underlying value of the stock, and investors should consider this before relying on the market prices of the Corporation’s common stock when making an investment decision. ​ 28 Table of Contents Future capital needs could result in dilution of shareholder investment.
The Corporation’s common stock price can fluctuate significantly in response to a variety of factors, including: ​ • announcements and news reports relating to the Corporation’s business and trends, concerns, and other issues in the financial services industry generally; • fluctuations in the Corporation’s results of operations; • sales or purchases of substantial amounts of the Corporation’s securities in the marketplace; • a shortfall or excess in revenues or earnings compared to securities analysts’ expectations; • changes in analysts’ recommendations or projections; • actual or expected economic conditions that are perceived to affect the Corporation, such as changes in real estate values or interest rates; • perceptions in the marketplace regarding the Corporation and/or our competitors; • new technology used, or services offered, by competitors; • changes in applicable government regulation; • macroeconomic and geopolitical factors discussed in this Risk Factors section; and • the Corporation’s announcement of new acquisitions or other projects. ​ As such, the market price of the Corporation’s common stock may not accurately reflect the underlying value of the stock, and investors should consider this before relying on the market prices of the Corporation’s common stock when making an investment decision. ​ Future capital needs could result in dilution of shareholder investment.
An increase in nonperforming loans, workouts, foreclosures, and charge-offs to our commercial and commercial real estate loans could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ 19 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 adverse effect on our business, results of operations, and financial condition. ​ In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements and other financial information.
An increase in nonperforming loans, workouts, foreclosures, and charge-offs to our commercial and commercial real estate loans could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ 20 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 adverse effect on our business, results of operations, and financial condition. ​ In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements and other financial information.
The amount that the Corporation, as a mortgagee, may realize after a default is dependent upon factors outside of its control, including, but not limited to: (i) general or local economic conditions; (ii) neighborhood values; (iii) interest rates; (iv) real estate tax rates; (v) operating expenses of the mortgaged properties; (vi) environmental remediation liabilities; (vii) ability to obtain and maintain adequate occupancy of the properties; (viii) zoning laws; (ix) governmental rules, regulations, and fiscal policies; and (x) natural disasters.
The amount that the Corporation, as a mortgagee, may realize after a default is dependent upon factors outside of its control, including, but not limited to: (i) general or local economic conditions; (ii) neighborhood values; (iii) interest rates; (iv) real estate tax rates; (v) operating expenses of the mortgaged 24 Table of Contents properties; (vi) environmental remediation liabilities; (vii) ability to obtain and maintain adequate occupancy of the properties; (viii) zoning laws; (ix) governmental rules, regulations, and fiscal policies; and (x) natural disasters.
Any security breach, including security breaches that occur as a result of employee error or misconduct, could result in the misappropriation, loss, or unauthorized disclosure of sensitive customer information, severely damage our reputation, expose us to the risk of litigation and liability, disrupt our operations, and have a material adverse effect on our business. 21 Table of Contents ​ We also rely on the integrity and security of a variety of third-party processors and payment, clearing, and settlement systems, as well as the various participants involved in these systems, many of which have no direct relationship with us.
Any security breach, including security breaches that occur as a result of employee error or misconduct, could result in the misappropriation, loss, or unauthorized disclosure of sensitive customer information, severely damage our reputation, expose us to the risk of litigation and liability, disrupt our operations, and have a material adverse effect on our business. ​ We also rely on the integrity and security of a variety of third-party processors and payment, clearing, and settlement systems, as well as the various participants involved in these systems, many of which have no direct relationship with us.
Any future changes in federal and state law and regulations, as well as the interpretations and implementations of federal and state laws and regulations, could affect us in substantial and unpredictable ways, including those listed above, impact the regulatory structure under which we operate, significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital and modify our business strategy, limit our ability to pursue business opportunities in an efficient manner, or other ways that could have a material adverse effect on our business, financial condition, or results of operations.
Any future changes in federal and state law and regulations, as well as the interpretations and implementations of federal and state 28 Table of Contents laws and regulations, could affect us in substantial and unpredictable ways, including those listed above, impact the regulatory structure under which we operate, significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital and modify our business strategy, limit our ability to pursue business opportunities in an efficient manner, or other ways that could have a material adverse effect on our business, financial condition, or results of operations.
If our reputation is negatively affected by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, by any government or regulatory action, or otherwise, our business and, therefore, our operating results, may be materially adversely affected. ​ Our operational systems and networks are subject to an increasing risk of continually evolving cybersecurity or other technological risks, which could result in a loss of customer business, financial liability, regulatory penalties, damage to our reputation, or the disclosure of confidential information. ​ Information technology systems are critical to our business.
If our reputation is negatively affected by the actions 21 Table of Contents of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, by any government or regulatory action, or otherwise, our business and, therefore, our operating results, may be materially adversely affected. ​ Our operational systems and networks are subject to an increasing risk of continually evolving cybersecurity or other technological risks, which could result in a loss of customer business, financial liability, regulatory penalties, damage to our reputation, or the disclosure of confidential information. ​ Information technology systems are critical to our business.
Market developments may significantly deplete the insurance fund of the FDIC and further reduce the ratio of reserves to insured deposits, thereby making it requisite upon the FDIC to charge higher premiums prospectively. ​ We have risk related to legal proceedings. ​ We are involved in judicial, regulatory, and arbitration proceedings concerning matters arising from our business activities and fiduciary responsibilities.
Market developments may significantly deplete the insurance fund of the FDIC and further reduce the ratio of reserves to insured deposits, thereby making it requisite upon the FDIC to charge higher premiums prospectively. ​ ​ 29 Table of Contents We have risk related to legal proceedings. ​ We are involved in judicial, regulatory, and arbitration proceedings concerning matters arising from our business activities and fiduciary responsibilities.
Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included or incorporated by reference in this report. Risks Related to Economic and Market Conditions Economic conditions have affected and could adversely affect our revenue and profits.
Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included or incorporated by reference in this report. 15 Table of Contents Risks Related to Economic and Market Conditions Economic conditions have affected and could adversely affect our revenue and profits.
The inability to receive dividends from the Bank could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ Risks Related to the Legal and Regulatory Environment We operate in a highly regulated environment and the regulatory framework to which we are subject may adversely affect our results of operations.
The inability to receive dividends from the Bank could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ 27 Table of Contents Risks Related to the Legal and Regulatory Environment We operate in a highly regulated environment and the regulatory framework to which we are subject may adversely affect our results of operations.
The Federal Reserve may take additional actions with respect to the target fed funds rate in 2025, which will have an impact on our net interest income.
The Federal Reserve may take additional actions with respect to the target fed funds rate in 2026, which will have an impact on our net interest income.
It led regulators, investors, and institutions to focus on the on-balance sheet liquidity, customer deposit base, including level of deposits uninsured by the FDIC, the 16 Table of Contents amount of accumulated other comprehensive loss, capital levels, interest rate risk management, and securities holdings of financial institutions.
It led regulators, investors, and institutions to focus on the on-balance sheet liquidity, customer deposit base, including level of deposits uninsured by the FDIC, the amount of accumulated other comprehensive loss, capital levels, interest rate risk management, and securities holdings of financial institutions.
A higher rate of default may also increase our costs associated with servicing these loans, foreclosing on properties, property maintenance on 17 Table of Contents foreclosed properties, and the liquidation of any foreclosed properties. Rising interest rates also may reduce the demand for loans and the value of fixed-rate investment securities.
A higher rate of default may also increase our costs associated with servicing these loans, foreclosing on properties, property maintenance on foreclosed properties, and the liquidation of any foreclosed properties. Rising interest rates also may reduce the demand for loans and the value of fixed-rate investment securities.
Interest rates are highly sensitive to many factors that are beyond the Corporation’s control, including general economic conditions, domestic and international events, changes in U.S. and other financial markets, and policies of various governmental and regulatory agencies. In 2024, the Federal Reserve cut the target of the fed funds rate by 100 basis points.
Interest rates are highly sensitive to many factors that are beyond the Corporation’s control, including general economic conditions, domestic and international events, changes in U.S. and other financial markets, and policies of various governmental and regulatory agencies. In 2025, the Federal Reserve cut the target of the fed funds rate by 75 basis points.
In addition, the Corporation’s credit risk may be exacerbated when the collateral held by the Corporation cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due to the Corporation.
In addition, the Corporation’s credit risk may be exacerbated when the collateral held by the Corporation cannot be realized upon or is liquidated at prices not 25 Table of Contents sufficient to recover the full amount of the credit or derivative exposure due to the Corporation.
Accordingly, the Corporation may not be able to raise capital when needed or on favorable terms. If the Corporation cannot raise additional capital when needed, it will be 25 Table of Contents subject to increased regulatory supervision and the imposition of restrictions on its growth and business.
Accordingly, the Corporation may not be able to raise capital when needed or on favorable terms. If the Corporation cannot raise additional capital when needed, it will be subject to increased regulatory supervision and the imposition of restrictions on its growth and business.
We 27 Table of Contents could also incur increased costs and expenses to improve our anti-money laundering procedures and systems to comply with any regulatory requirements or actions. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.
We could also incur increased costs and expenses to improve our anti-money laundering procedures and systems to comply with any regulatory requirements or actions. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.
Furthermore, as technology, including the increasing use of artificial intelligence, machine learning, large language models, and other similar technologies, and cyberattacks change over time, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures arising from operational and security risks.
Furthermore, as technology, including the increasing use of artificial intelligence, machine learning, large language models, artificial intelligence agents, generative artificial intelligence, and other similar technologies (collectively referred to as “AI”), and cyberattacks change over time, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures arising from operational and security risks.
These restrictions could negatively impact the Corporation’s ability to operate or further expand its operations through acquisitions or the establishment of additional branches and may result in increases in operating expenses and reductions in revenues that could have a material adverse effect on its financial condition and results of operations. ​ The value of the Corporation’s goodwill and other intangible assets may decline in the future. ​ As of December 31, 2024, the Corporation had $121.6 million of goodwill and other intangible assets.
These restrictions could negatively impact the Corporation’s ability to operate or further expand its operations through acquisitions or the establishment of additional branches and may result in increases in operating expenses and reductions in revenues that could have a material adverse effect on its financial condition and results of operations. ​ The value of the Corporation’s goodwill and other intangible assets may decline in the future. ​ As of December 31, 2025, the Corporation had $114.5 million of goodwill and other intangible assets.
Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things: ​ • the time and costs associated with identifying and evaluating potential new markets, hiring experienced local management, and opening new offices, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; • the time and costs associated with identifying potential acquisition and merger targets; • the accuracy of the estimates and judgments used to evaluate credit, operations, management, and market risks with respect to a target company; • the diversion of our management’s attention to the negotiation of a transaction, and the integration of the operations and personnel of the combined businesses; • our ability to finance an acquisition and possible dilution to our existing shareholders; • closing delays and expenses related to the resolution of lawsuits filed by shareholders of targets; • entry into new markets where we lack experience; • introduction of new products and services into our business; • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality issues of the target company; • the risk of loss of key employees and customers; and • incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations. ​ Acquisitions typically involve the payment of a premium over book and market values and, therefore, some dilution of the Corporation’s tangible book value and net income per common share may occur in connection with any future transaction.
Acquiring other banks, including our previously announced merger with CedarStone Financial, Inc. and it wholly owned subsidiary, CedarStone Bank, businesses or branches involves various risks commonly associated with acquisitions, including, among other things: ​ • the time and costs associated with identifying and evaluating potential new markets, hiring experienced local management, and opening new offices, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; • the time and costs associated with identifying potential acquisition and merger targets; • the accuracy of the estimates and judgments used to evaluate credit, operations, management, and market risks with respect to a target company; • the diversion of our management’s attention to the negotiation of a transaction, and the integration of the operations and personnel of the combined businesses; • our ability to finance an acquisition and possible dilution to our existing shareholders; 26 Table of Contents • closing delays and expenses related to the resolution of lawsuits filed by shareholders of targets; • entry into new markets where we lack experience; • introduction of new products and services into our business; • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality issues of the target company; • the risk of loss of key employees and customers; • challenges faced with the integration of employees, business units, locations and customers; and • incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations. ​ Acquisitions typically involve the payment of a premium over book and market values and, therefore, some dilution of the Corporation’s tangible book value and net income per common share may occur in connection with any future transaction.
The Corporation’s future success depends, in part, upon its ability to address customer needs by using 22 Table of Contents technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in the Corporation’s operations.
The Corporation’s future success depends, in part, upon its ability to address customer needs by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in the Corporation’s operations.
If these events or circumstances were to occur, it could result in a potential loss of revenue and have an adverse effect on our business, results of operations, and financial condition. ​ Decreased demand from secondary market purchasers of the Corporation’s long-term fixed residential mortgages could adversely affect our business, liquidity, results of operations, and financial condition. ​ The Corporation sells substantially all of its long-term fixed residential mortgages to secondary market purchasers.
If these events or circumstances were to occur, it could result in a potential loss of revenue, increased costs in foreclosing on collateral or resolving troubled loans and have an adverse effect on our business, results of operations, and financial condition. ​ Decreased demand from secondary market purchasers of the Corporation’s long-term fixed residential mortgages could adversely affect our business, liquidity, results of operations, and financial condition. ​ The Corporation sells substantially all of its long-term fixed residential mortgages to secondary market purchasers.
Certain expenditures associated with 23 Table of Contents the ownership of real estate, principally real estate taxes, insurance, and maintenance costs, may adversely affect the income from the real estate.
Certain expenditures associated with the ownership of real estate, principally real estate taxes, insurance, and maintenance costs, may adversely affect the income from the real estate.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The financial services industry is characterized by rapid technological change, and if we fail to keep pace, our business may suffer. ​ The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The financial services industry is characterized by rapid technological change, and if we fail to keep pace, our business may suffer. ​ The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including cryptocurrency and stablecoin related products and services, products and services implementing AI and AI tools and other new financial technologies.
Key personnel that have regular direct contact with customers and clients often build strong relationships that are important to our business. In addition, we rely on key personnel to manage and operate our business, including major revenue producing functions, such as loan and deposit generation.
Our success depends, in large part, on our ability to attract and retain key personnel. Key personnel that have regular direct contact with customers and clients often build strong relationships that are important to our business. In addition, we rely on key personnel to manage and operate our business, including major revenue producing functions, such as loan and deposit generation.
During 2024, the Federal Reserve began cutting the target fed funds rate and decreased the target by 100 basis points. The Federal Reserve is still considering additional changes to the target fed funds rate, and the monetary policy adopted in 2025 by the Federal Reserve may impact the results of operations.
During 2025, the Federal Reserve continued cutting the target fed funds rate and decreased the target by 75 basis points. The Federal Reserve is still considering additional changes to the target fed funds rate, and the monetary policy adopted in 2026 by the Federal Reserve may impact the results of operations.
An economic downturn or sustained, high unemployment levels, inflation, supply chain disruptions that impact borrowers, recession, currency devaluation, changes in the monetary supply, changes in fiscal and monetary policy, decreased investor or business confidence, trade wars and the imposition of tariffs on goods purchased or sold by our customers, the effect of a pandemic, epidemic, or outbreak of an infectious disease on our customers, stock market volatility, and other factors beyond our control may have a negative effect on the ability of our borrowers to make timely repayments of their loans (thereby, increasing the risk of loan defaults and losses), the value of collateral securing those loans, demand for loans and other products and services we offer, and our deposit levels and composition. ​ Worsening conditions in the current economic market could make an economic recession or a downturn more likely in various industries or markets and could have the following adverse effects on our business: ​ • A decrease in net interest income derived from our lending and deposit gathering activities; • A decrease in the demand of our loans and other products we offer; • A decrease in our deposit balances due to overall reductions in the number or value in client accounts; • A decrease in the value of collateral securing our loans • An increase in the level of nonperforming and classified loans; • An increase in provisions for credit losses and loan charge-offs; and • An increase in our operating expenses associated with attending to the effects of certain circumstances listed above. ​ As a result of these potential economic conditions, our operating results could be negatively impacted. ​ Unrelated bank failures, other issues of unrelated banks, and decreased depositor confidence in depository institutions could negatively impact our stock price and we may experience a material adverse effect on our financial condition and results of operations. ​ A collection of bank failures that began in March 2023 materially impacted depositor and investor confidence in community and regional depository institutions.
An economic downturn or sustained, high unemployment levels, inflation, supply chain disruptions that impact borrowers, recession, currency devaluation, changes in the monetary supply, changes in fiscal and monetary policy, decreased investor or business confidence, trade wars and the imposition of tariffs on goods purchased or sold by our customers, the effect of a pandemic, epidemic, or outbreak of an infectious disease on our customers, stock market volatility, and other factors beyond our control may have a negative effect on the ability of our borrowers to make timely repayments of their loans (thereby, increasing the risk of loan defaults and losses), the value of collateral securing those loans, demand for loans and other products and services we offer, and our deposit levels and composition. ​ Worsening conditions in the current economic market could make an economic recession or a downturn more likely in various industries or markets and could have the following adverse effects on our business: ​ • A decrease in net interest income derived from our lending and deposit gathering activities; • A decrease in the demand of our loans and other products or services we offer; • A decrease in our deposit balances due to overall reductions in the number or value in client accounts; • A decrease in the value of collateral securing our loans • An increase in the level of nonperforming and classified loans; • An increase in provisions for credit losses and loan charge-offs; and • An increase in our operating expenses associated with attending to the effects of certain circumstances listed above. ​ As a result of these potential economic conditions, our operating results could be negatively impacted. ​ Changes in interest rates could adversely affect the Corporation’s results of operations and financial condition. ​ The Corporation’s earnings and cash flows are largely dependent upon the Corporation’s net interest income.
We are currently authorized to issue up to 40 million shares of common stock, of which 11,842,539 shares were outstanding as of December 31, 2024, and up to 10 million shares of preferred stock, of which no shares are outstanding.
We are currently authorized to issue up to 40 million shares of common stock, of which 11,880,759 shares were outstanding as of December 31, 2025, and up to 10 million shares of preferred stock, of which no shares are outstanding.
The realization of these risks could result in the Corporation failing to realize any anticipated benefits from the implementation of AI and could negatively affect the Corporation’s growth, reputation, revenue, expenses, and results of operations. ​ The Corporation’s controls and procedures may fail or be circumvented, and the Corporation’s methods of reducing risk exposure may not be effective. ​ The Corporation’s internal operations are subject to risks, including, but not limited to, data processing system failures and errors, customer or employee fraud, and catastrophic failures resulting from terrorist acts or natural disasters.
The realization of these risks with respect to improper employee use of AI tools could result in the Corporation could negatively affect the Corporation’s growth, reputation, revenue, expenses, financial condition, and results of operations. ​ The Corporation’s controls and procedures may fail or be circumvented, and the Corporation’s methods of reducing risk exposure may not be effective. ​ The Corporation’s internal operations are subject to risks, including, but not limited to, data processing system failures and errors, improper or inappropriate use of AI tools, customer or employee fraud, and catastrophic failures resulting from terrorist acts or natural disasters.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The Corporation may become subject to claims and litigation pertaining to intellectual property. ​ Banking and other financial services companies, such as the Corporation, rely on technology companies to provide information technology products and services necessary to support the Corporation’s day-to-day operations.
These losses could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The Corporation may become subject to claims and litigation pertaining to intellectual property. ​ Banking and other financial services companies, such as the Corporation, rely on technology companies to provide information technology products and services necessary to support the Corporation’s day-to-day operations.
Factors that could reduce our access to liquidity sources include a downturn in the markets in which our loans are concentrated, a decline in demand in the secondary market for long-term fixed mortgages, or adverse regulatory actions against the Corporation. The Corporation’s access to deposits may also be affected by the liquidity needs of depositors.
Factors that could reduce our access to liquidity sources include a downturn in the markets in which our loans are concentrated, a decline in demand in the secondary market for long-term fixed mortgages, or adverse regulatory actions against the Corporation.
The effective use of technology can increase efficiency and enable financial institutions to better serve customers and to reduce costs.
The effective use of technology can increase efficiency, provide cutting-edge products and/or services, and enable financial institutions to better serve customers and to reduce costs.
These changes also may require us to invest significant management attention and resources to make any necessary changes to operations to comply and could have an adverse effect on our business, financial condition, and results of operations. ​ The Basel III capital rules may require us to retain higher capital levels, impacting our ability to pay dividends, repurchase our stock, or pay discretionary bonuses. ​ The Federal Reserve, the FDIC, and the OCC adopted final rules for the Basel III capital framework which became effective on January 1, 2015.
While these changes are unknown at this time, the implementation of any changes may have an adverse effect on our business, financial condition, and results of operations. ​ The Basel III capital rules may require us to retain higher capital levels, impacting our ability to pay dividends, repurchase our stock, or pay discretionary bonuses. ​ The Federal Reserve, the FDIC, and the OCC adopted final rules for the Basel III capital framework which became effective on January 1, 2015.
Deterioration in economic conditions in the Corporation’s markets could result in one or more of the following, which may increase our costs, reduce our net income, or otherwise adversely affect our business: ​ • an increase in loan delinquencies; • an increase in problem assets and foreclosures; • an increase in our allowance for credit losses; • a decrease in the demand for our products and services; • a decrease in the value of collateral for loans, especially real estate, in turn reducing customers’ borrowing power, the value of assets associated with problem loans and collateral coverage; • a decrease in net worth and liquidity of loan guarantors, which may impair their ability to honor guarantees made to us; and • a decrease in deposits balances. 18 Table of Contents ​ Risks Related to Our Business A lack of liquidity could affect our operations and jeopardize our financial condition. ​ The Corporation requires liquidity to meet our deposit and other obligations as they come due.
Deterioration in economic conditions in the Corporation’s markets could result in one or more of the following, which may increase our costs, reduce our net income, or otherwise adversely affect our business: ​ • an increase in loan delinquencies; • an increase in problem assets and foreclosures; • an increase in our allowance for credit losses; • a decrease in the demand for our products and services; 17 Table of Contents • a decrease in the value of collateral for loans, especially real estate, in turn reducing customers’ borrowing power, the value of assets associated with problem loans and collateral coverage; • a decrease in net worth and liquidity of loan guarantors, which may impair their ability to honor guarantees made to us; and • a decrease in deposits balances. ​ Labor shortages and the loss of one or more of those key personnel may materially and adversely affect our business.
Accordingly, changes in interest rates could adversely affect our results of operations and financial condition. ​ Conversely, if the interest rates paid on deposits and other interest-bearing liabilities increase at a faster rate than the interest rates received on loans and other interest-earning assets, our net interest income, and, therefore, our earnings, could be adversely affected.
Accordingly, changes in interest rates could adversely affect our results of operations and financial condition. ​ Conversely, if the interest rates paid on deposits and other interest-bearing liabilities increase at a faster rate than the interest rates received on loans and other interest-earning assets, our net interest income, and, therefore, our earnings, could be adversely affected. 16 Table of Contents Such an interest rate environment may also result in us incurring a higher cost to retain our deposits.
For example, if the models the Corporation uses for interest rate risk and asset-liability management are inadequate, the Corporation may incur increased or unexpected losses upon changes in market interest rates or other market measures.
For example, if the models the Corporation uses for interest rate risk and asset-liability management are inadequate, the Corporation may incur increased or unexpected losses upon changes in market interest rates or other market measures. The Corporation uses a current “expected loss” model (“CECL”) to estimate its allowance for credit losses.
Changes in monetary policy, including changes in interest rates, including the target fed funds rate, could influence not only the interest that is received on loans and securities and the interest that is paid on deposits and borrowings, but such changes could also affect the Corporation’s ability to originate loans and obtain deposits and the fair value of the Corporation’s financial assets and liabilities. ​ If the interest received on loans and other interest-earning assets decreases at a faster rate than the interest rates paid on deposits and other interest-bearing liabilities, our net interest income, and, therefore, our earnings could be adversely affected.
Changes in monetary policy, including changes in interest rates, including the target fed funds rate, could influence not only the interest that is received on loans and securities and the interest that is paid on deposits and borrowings, but such changes could also affect the Corporation’s ability to originate loans and obtain deposits and the fair value of the Corporation’s financial assets and liabilities.
Any increase in our allowance for loan losses or expenses incurred to determine the appropriate level of the allowance for loan losses may have a material adverse effect on our business, financial condition, and results of operations. ​ We are a community bank and our ability to maintain our reputation is critical to the success of our business. ​ The Corporation’s banking subsidiaries are community banks and their reputation is one of the most valuable components of our business.
Any failure in the Corporation’s analytical or forecasting models could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ We are a community bank and our ability to maintain our reputation is critical to the success of our business. ​ The Corporation’s banking subsidiaries are community banks and their reputation is one of the most valuable components of our business.
The failure of an external vendor to perform in accordance with the contracted arrangements under service level agreements, because of changes in the vendor’s organizational structure, financial condition, support for existing products and services, strategic focus, or for any other reason, could be disruptive to the Corporation’s operations, which could have a material adverse impact on the Corporation’s business and, in turn, the Corporation’s financial condition and results of operations. ​ New lines of business or new products and services may subject the Corporation to additional risks. ​ From time to time, the Corporation may implement new lines of business or offer new products and services within existing lines of business.
Additionally, the Corporation may be exposed to certain risks involved with the use of AI tools of vendors and their employees or agents, as further discussed in the Risk Factor titled “ The increased prevalence, use and development of AI may subject the Corporation to increased regulatory risk, reputational risk and may have material adverse effects on the Corporation’s business, financial condition and results of operations .” The failure of an external vendor to perform in accordance with the contracted arrangements under service level agreements, because of changes in the vendor’s organizational structure, use of AI tools, financial condition, support for existing products and services, strategic focus, or for any other reason, could be disruptive to the Corporation’s operations, which could have a material adverse impact on the Corporation’s business and, in turn, the Corporation’s financial condition and results of operations. ​ ​ 22 Table of Contents New lines of business or new products and services may subject the Corporation to additional risks. ​ From time to time, the Corporation may implement new lines of business or offer new products and services within existing lines of business.
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 would have a disproportionately significant impact on our credit losses and reserves. ​ The Corporation has significant exposure to risks associated with commercial and commercial real estate loans. ​ As of December 31, 2024, approximately 57.3% of the Corporation’s loan portfolio consisted of commercial and commercial real estate loans.
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 would have a disproportionately significant impact on our credit losses and reserves.
As the use of AI expands and grows, it may become subject to additional regulations or restrictions on use from the U.S. government and/or our banking regulators.
Use of AI can expose us to new or increased operation risks, including risks related to our internal controls. As the use of AI expands and grows, it may become subject to additional regulations or restrictions on use from the U.S. government and/or our banking regulators.
These losses could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The Corporation may foreclose on collateral property and would be subject to the increased costs associated with ownership of real property, resulting in reduced revenues and earnings. ​ The Corporation forecloses on collateral property from time to time to protect its interests and thereafter owns and operates foreclosed property, in which case it is exposed to the risks inherent in the ownership of real estate.
As a result, the Corporation may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk, which could adversely affect the Corporation’s financial condition and results of operations. ​ The Corporation may foreclose on collateral property and would be subject to the increased costs associated with ownership of real property, resulting in reduced revenues and earnings. ​ The Corporation forecloses on collateral property from time to time to protect its interests and thereafter owns and operates foreclosed property, in which case it is exposed to the risks inherent in the ownership of real estate.
Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect the Corporation’s growth, revenue, and profit. ​ The implementation of artificial intelligence, machine learning, and other large language models and similar technologies may subject the Corporation to increased regulatory risk, reputational risk, and may have material adverse effects on the Corporation’s business, financial condition, and results of operations. ​ The growth of artificial intelligence, machine learning, and other large language models and similar technologies (collectively referred to as “AI”), has spurned a new industry of technological advances.
Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect the Corporation’s growth, revenue, profit, financial condition and results of operations. ​ The increased prevalence, use and development of AI may subject the Corporation to increased regulatory risk, reputational risk, and may have material adverse effects on the Corporation’s business, financial condition, and results of operations. ​ The growth of AI has spurred a new industry of technological advances.
These equity and/or debt issuances could dilute the ownership interest of our shareholders and may dilute the per share book value of our common stock. New investors also may have rights, preferences, and privileges senior to our shareholders which may adversely impact our shareholders. ​ Anti-takeover laws and charter provisions may adversely affect the value of our common stock.
New investors also may have rights, preferences, and privileges senior to our shareholders which may adversely impact our shareholders. ​ 30 Table of Contents Anti-takeover laws and charter provisions may adversely affect the value of our common stock.
If the models the Corporation uses for determining its probable credit losses are inadequate, the allowance for credit losses may not be sufficient to support future charge-offs.
If the CECL model is inadequate, or its underlying assumptions are inadequate, the allowance for credit losses may not be sufficient to support future charge-offs.
If any additional financial institutions fail in a similar manner as those financial institutions that failed in 2022, our stock price and deposit base could be negatively impacted. ​ As a result of these failures, enhanced scrutiny from regulators and potential new legislation may impact our ability to operate.
If any additional financial institutions fail in a similar manner as those financial institutions that failed in 2022, our stock price and deposit base could be negatively impacted.
Additionally, if we were to experience the unexpected loss of a large number of personnel, whether or not such personnel were considered key personnel, we could experience a material adverse impact on our business because of the loss of their skills and the costs and difficulty of finding a large number of qualified replacement personnel. ​ Terrorist attacks, threats, or actual war, natural disasters, global climate change, pandemics, other catastrophic events, trade policies, civil unrest, protests, and other global and domestic conflicts may impact all aspects of our operations, revenues, costs, and stock price in unpredictable ways. ​ Terrorist attacks in the U.S. and abroad, as well as future events occurring in response to or in connection with them, including, without limitation, future terrorist attacks against U.S. targets, rumors or threats of war, actual conflicts involving the U.S. or its allies, including any escalation of or increased U.S. involvement in currently ongoing conflicts, such as the Russia-Ukraine war or conflicts in the Middle East, military or trade disruptions, may impact our operations as well as the operations of some of our customers.
Depending upon any adopted change in legislation or directives from regulators, we may need to adjust our strategy and operations to comply with such changing laws or regulatory directives, which can result in additional operating expenses and could materially impact our operating results. ​ ​ ​ 18 Table of Contents Terrorist attacks, threats, or actual war, natural disasters, global climate change, pandemics, other catastrophic events, trade policies, civil unrest, protests, and other global and domestic conflicts may impact all aspects of our operations, revenues, costs, and stock price in unpredictable ways. ​ Terrorist attacks in the U.S. and abroad, as well as future events occurring in response to or in connection with them, including, without limitation, future terrorist attacks against U.S. targets, rumors or threats of war, actual conflicts involving the U.S. or its allies, including any escalation of or increased U.S. involvement in currently ongoing conflicts, such as those occurring with respect to Russia, Ukraine, Venezuela, Iran, the Middle East and China, military or trade disruptions, may impact our operations as well as the operations of some of our customers.
It is currently unknown whether the CFPB will continue its pursuit related to “junk fees”, however if it does, the rules and regulations generated from this undertaking may require us to modify our fee structures and incur costs to comply with any new rules or regulations. ​ Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, regulatory structure, financial condition, and/or results of operations. ​ Since the 2007-2008 financial crisis, federal and state banking laws and regulations, as well as interpretations and implementations of these laws and regulations, have undergone substantial review and change.
At this time, further impact of these leadership changes and the potential impact on regulatory requirements applicable to us and our supervision is uncertain. ​ Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, regulatory structure, financial condition, and/or results of operations. ​ Since the 2007-2008 financial crisis, federal and state banking laws and regulations, as well as interpretations and implementations of these laws and regulations, have undergone substantial review and change.
These expenditures and costs could adversely affect the Corporation’s ability to generate revenues, resulting in reduced levels of profitability. ​ The Corporation’s earnings may be adversely impacted due to environmental liabilities associated with lending activities. ​ A significant portion of the Corporation’s loan portfolio is secured by real property.
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. ​ The Corporation’s earnings may be adversely impacted due to environmental liabilities associated with lending activities. ​ A significant portion of the Corporation’s loan portfolio is secured by real property.
Any regulatory action against us or failure to comply with applicable laws and regulations could have an adverse effect on our reputation, business, financial condition, and results of operations. ​ The new U.S. presidential administration’s regulatory reform agenda could result in a material impact to our regulatory compliance and operations procedures. ​ We anticipate that the new U.S. presidential administration will seek to implement a regulatory reform agenda that is significantly different than that of the former U.S. presidential administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal agencies, include those federal banking regulators responsible for the Corporation’s oversight.
Any regulatory action against us or failure to comply with applicable laws and regulations could have an adverse effect on our reputation, business, financial condition, and results of operations. ​ In addition to the banking regulators responsible for our oversight, we are subject to regulation and supervision from federal and state regulatory agencies for virtually all aspects of our operations.
Decreased demand in the secondary market may also lead to increase the volume of long-term fixed residential mortgages we hold in our loan portfolio, which would increase our exposure to the residential real estate market and the risks associated with holdings in the residential real estate market, as described in the Risk Factor titled “ The Corporation may foreclose on collateral property and would be subject to the increased costs associated with ownership of real property, resulting in reduced revenues and earnings. ” on Page 23. ​ The Corporation operates in a highly competitive industry and market, and our business will suffer if we are unable to compete effectively. ​ The Corporation faces substantial competition in all areas of its operations from a variety of different competitors, many of which are larger and may have more financial resources.
Decreased demand in the secondary market may also lead to increase the volume of long-term fixed residential mortgages we hold in our loan portfolio, which would increase our exposure to the residential real estate market and the risks associated with holdings in the residential real estate market, as described in the Risk Factor titled “ The Corporation may foreclose on collateral property and would be subject to the increased costs associated with ownership of real property, resulting in reduced revenues and earnings. ” on Page 24. ​ The Corporation’s accounting estimates and risk management processes rely on analytical and forecasting models, which, if inadequate, may result in a material adverse effect on our business, financial condition, or results of operation. ​ The processes the Corporation uses to estimate its allowance for credit losses and to measure the fair value of financial instruments, as well as the processes used to estimate the effects of changing interest rates and other market measures on the Corporation’s financial condition and results of operations, depend upon the use of analytical and forecasting models.
If these risks occur, the Corporation may not realize the improved profitability it anticipated when it acquired SimplyBank and could realize a material adverse effect on its business, reputation, financial condition, standing with its regulators, and results of operations. ​ Potential acquisitions may disrupt the Corporation’s business and dilute shareholder value. ​ The Corporation generally seeks merger or acquisition partners that are culturally similar and have experienced management and possess either significant market presence or have potential for improved profitability through financial management, economies of scale, or expanded services or geographic reach.
For more information on the competitive pressures faced by the Corporation, including those pressures as a result of cryptocurrencies and digital assets, see the Risk Factor titled “ The Corporation operates in a highly competitive industry and market and our business will suffer if we are unable to compete effectively. ” In addition, changes in consumer spending and savings habits could adversely affect the Corporation’s operations, and the Corporation may be unable to timely develop competitive new products and services in response to these changes. ​ Potential acquisitions may disrupt the Corporation’s business and dilute shareholder value. ​ The Corporation generally seeks merger or acquisition partners that are culturally similar and have experienced management and possess either significant market presence or have potential for improved profitability through financial management, economies of scale, or expanded services or geographic reach.
Any of these occurrences could have an adverse impact on our operating results, revenues, and costs and may result in the volatility of the market price for our common stock and on the future price of our common stock. ​ Geographic concentration of the Corporation’s markets makes our business highly susceptible to local economic conditions and a downturn in local economic conditions may adversely affect our business.
Any of these occurrences could have an adverse impact on our operating results, revenues, and costs and may result in the volatility of the market price for our common stock and on the future price of our common stock. ​ ​ Risks Related to Our Business The Corporation operates in a highly competitive industry and market, and our business will suffer if we are unable to compete effectively. ​ The Corporation faces substantial competition in all areas of its operations from a variety of different competitors, many of which are larger and may have more financial resources.
The duration and severity of the current inflationary period, and the governmental responses thereto, are unknown and cannot be estimated with precision. ​ Changes in interest rates could adversely affect the Corporation’s results of operations and financial condition. ​ The Corporation’s earnings and cash flows are largely dependent upon the Corporation’s net interest income.
The duration and severity of the current inflationary period, and the governmental responses thereto, are unknown and cannot be estimated with precision. ​ Geographic concentration of the Corporation’s markets makes our business highly susceptible to local economic conditions and a downturn in local economic conditions may adversely affect our business.
As a result, the Corporation may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk. ​ The Corporation may be adversely affected by the soundness of other financial institutions. ​ Financial institutions are interrelated as a result of trading, clearing, counterparty, or other relationships.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The Corporation may be adversely affected by the soundness of other financial institutions. ​ Financial institutions are interrelated as a result of trading, clearing, counterparty, or other relationships.
Removed
Depending upon any adopted change in legislation or directives from regulators, we may need to adjust our strategy and operations to comply with such changing laws or regulatory directives, which can result in additional operating expenses and could materially impact our operating results. ​ Continued elevated levels of inflation could adversely impact our business and results of operations.
Added
While we believe we have implemented procedures to prepare us for the potential effects of a changing interest rate environment, these procedures may not always be successful as the procedures include underlying assumptions which may ultimately be inaccurate based on factors outside of our control. ​ If the interest received on loans and other interest-earning assets decreases at a faster rate than the interest rates paid on deposits and other interest-bearing liabilities, our net interest income, and, therefore, our earnings could be adversely affected.
Removed
Such an interest rate environment may also result in us incurring a higher cost to retain our deposits.
Added
Accordingly, changes in interest rates could adversely affect our results of operations and financial condition. ​ Changing interest rates also subject the Corporation to risks with respect to our financial instruments that are carried at fair value. The corporation maintains an available-for-sale investment securities portfolio, which includes securities instruments of varying types, maturities and interest rates.
Removed
Accordingly, changes in interest rates could adversely affect our results of operations and financial condition. ​ Labor shortages and the loss of one or more of those key personnel may materially and adversely affect our business. Our success depends, in large part, on our ability to attract and retain key personnel.
Added
We also maintain assets that are classified and accounted for as trading assets. When the market interest rate rises, these securities typically decrease in value. Carrying these assets at fair value exposes the Corporation to market risks tied to changing interest rates and market liquidity factors.
Removed
Any failure in the Corporation’s analytical or forecasting models could have a material adverse effect on the Corporation’s business, financial condition, and results of operations. ​ The Financial Accounts Standards Board adopted a new accounting standard, effective January 1, 2020, that represents a comprehensive change in estimating the allowance for credit losses from the previous “incurred loss” model of losses inherent in the loan portfolio to a current “expected loss” model (“CECL”), which encompasses losses expected to be incurred over the life of the portfolio.
Added
There are conditions, including changing market values of instruments or liquidity needs, that would require the Corporation to dispose of these investment securities earlier than anticipated, which could adversely affect our results of operations and financial condition. ​ The Corporation regularly monitors forecasts for interest rates, its interest rate risk and interest rate sensitivity and plans accordingly based on models and projections regarding interest rates, however these models and projections are forward-looking and based on a number of assumptions and forecasts.
Removed
CECL will require financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses as allowances for loan losses. The Corporation implemented the CECL for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
Added
If the interest rate environment realized differs materially from the underlying assumptions used for its projections, models and forecasts, the Corporation faces a risk that its plans may not account for the actual interest rate environment, which may negatively affect our results of operations and financial condition. ​ Continued elevated levels of inflation could adversely impact our business and results of operations.
Removed
This change in methodology may require us to increase our allowance for loan losses.
Added
Additionally, if we were to experience the unexpected loss of a large number of personnel, whether or not such personnel were considered key personnel, we could experience a material adverse impact on our business because of the loss of their skills and the costs and difficulty of finding a large number of qualified replacement personnel. ​ Unrelated bank failures, other issues of unrelated banks, and decreased depositor confidence in depository institutions could negatively impact our stock price and we may experience a material adverse effect on our financial condition and results of operations. ​ A collection of bank failures that began in March 2023 materially impacted depositor and investor confidence in community and regional depository institutions.
Removed
The Corporation implemented a form of AI with its intelligent digital assistant, Gabby, available through the Bank’s website. Use of AI can expose us to new or increased operation risks, including risks related to our internal controls.
Added
The industry wide impact of these failures demonstrated the impact that reputational harm to certain financial institutions can have on the industry as a whole, which can lead to risks of reputational harm to the Corporation based on issues or failures of unrelated banks or financial institutions. ​ As a result of these issues and failures, enhanced scrutiny from regulators and potential new legislation may impact our ability to operate.
Removed
In addition, changes in consumer spending and savings habits could adversely affect the Corporation’s operations, and the Corporation may be unable to timely develop competitive new products and services in response to these changes. ​ ​ 24 Table of Contents Our acquisition of SimplyBank presents certain additional risks to our business and operations. ​ On July 1, 2024, the Corporation completed our previously announced acquisition of SimplyBank., a Tennessee-chartered commercial bank (“SimplyBank”).
Added
Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than the Corporation can. ​ The Corporation may face increased competition for customer deposits from new entrants into the financial services industry, as well as current competitors that seek to expand services.
Removed
While we anticipate that this transaction will improve profitability through geographic expansion, financial management, economies of scale, and expanded services, the recognition of such improved profitability is not guaranteed.
Added
In July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”) was signed into law. The GENIUS Act establishes, among other things, a regulatory framework for the issuance, custody and holding reserves of stablecoins.
Removed
Additionally, as SimplyBank and its personnel are integrated into the Corporation, there remains the presence of ongoing risks, including: the diversion of management’s attention from other areas of the Corporation; the loss of customers or employees as a result of the transaction; and other business, operational, and regulatory risks.
Added
Stablecoins are often viewed by consumers and commercial entities as an alternative to traditional bank deposits and transactions, which could result in reduced deposits for the Corporation.
Removed
As part of the transaction, SimplyBank provided a number of representations and warranties, including, but not limited to, representations and warranties regarding tax liabilities, interactions with regulators, and compliance procedures, with respect to SimplyBank and its operations.
Added
The impact on our deposits will depend, in part, on the demand for stablecoins and the number of competitors that offer services permitted under the GENIUS Act, whether such competitors are current competitors or new entrants into the market.
Removed
If such representations and warranties are inaccurate, we may face liabilities, including tax and/or regulatory liabilities, as a result of such inaccurate representations and warranties.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFacilities of the Corporation’s banking center in Meigs County include an office in Decatur, Tennessee. The building is leased and the lease expires on November 30, 2026. Facilities of the Corporation’s banking center in Montgomery County include three offices in Clarksville, Tennessee. The buildings are held in fee.
Biggest changeFacilities of the Corporation’s banking centers in Kentucky include sixteen offices. All buildings are held in fee. Facilities of the Corporation’s banking centers in Tennessee include fifteen offices. Thirteen buildings are held in fee, and two are leased. One lease expires in 2026, and the other expires in 2031. Facilities of the Corporation’s banking centers in Georgia include three offices.
In addition, the Bank holds in fee six other branch buildings. One of the branch buildings is a single-story 36,000-square-foot building which is located in a Terre Haute suburban area. One other branch bank building is leased by the Bank. The expiration date on the lease is May 31, 2028.
In addition, the Bank holds in fee five other branch buildings. One of the branch buildings is a single-story 36,000-square-foot building which is located in a Terre Haute suburban area. One other branch bank building is leased by the Bank. The expiration date on the lease is May 31, 2028.
Facilities of the Corporation’s loan production offices, include an office in Bloomington, Indiana, an office in Carmel, Indiana, an office in Evansville, Indiana, an office in Fort Wayne, Indiana, an office in Murfreesboro, Tennessee, an office in Brentwood, Tennessee, and an office in Chattanooga, Tennessee. The loan production offices are leased by the Bank.
All buildings are held in fee. Facilities of the Corporation’s loan production offices, include an office in Bloomington, Indiana, an office in Carmel, Indiana, an office in Evansville, Indiana, an office in Fort Wayne, Indiana, an office in Murfreesboro, Tennessee, an office in Brentwood, Tennessee, an office in Chattanooga, Tennessee, and an office in Knoxville, Tennessee.
The expiration dates on the leases are January 31, 2029, April 30, 2028, August 15, 2025, November 30, 2030, February 28, 2026, September 30, 2026, and February 28, 2028. ​ ​ ​ 32 Table of Contents
The loan production offices are leased by the Bank. The expiration dates on the leases are January 31, 2029, April 30, 2028, September 16, 2030, November 30, 2030, December 31, 2030, September 30, 2026, February 28, 2028, and June 30, 2030, respectively. ​
Facilities of the Corporation’s banking centers in Sullivan County include offices in Sullivan and Farmersburg, Indiana. Both buildings are held in fee. Facilities of the Corporation’s banking center in Vanderburgh County include an office in Evansville, Indiana.
Facilities of the Corporation’s banking centers in Indiana counties, outside of Vigo County, Indiana, include fifteen offices. All buildings are held in fee. Facilities of the Corporation’s banking centers in Illinois include twenty-four offices. Nineteen buildings are held in fee, and five are leased with leases expiring from 2026 to 2036.
Removed
Facilities of the Corporation’s banking centers in Clay County include two offices in Brazil, Indiana and an office in Clay City, Indiana. All three buildings are held in fee. Facilities of the Corporation’s banking center in Daviess County include an office in Washington, Indiana. This building is held in fee.
Removed
Facilities of the Corporation’s banking center in Greene County include an office in Worthington, Indiana. This building is held in fee. Facilities of the Corporation’s banking center in Knox County include one office in Vincennes, Indiana. This building is held in fee.
Removed
Facilities of the Corporation’s banking centers in Parke County include one office in Rockville, Indiana and one office in Marshall, Indiana. Both buildings are held in fee. Facilities of the Corporation’s banking center in Putnam County include an office in Greencastle, Indiana. This building is held in fee.
Removed
This building is held in fee. 30 Table of Contents Facilities of the Corporation’s banking centers in Vermillion County include two offices in Clinton, Indiana and an office in Cayuga, Indiana. All three buildings are held in fee.
Removed
Facilities of the Corporation’s banking center in Champaign County include two offices in Champaign, Illinois, an office in Mahomet, Illinois, and an office in Urbana, Illinois. One of the banking centers in Champaign is held in fee while the land is leased. The land lease expires September 6, 2036.
Removed
One of the banking centers in Champaign is leased and the lease expires on December 31, 2027. The banking center in Mahomet is leased and the lease expires on March 31, 2026. The banking center in Urbana is held in fee. Facilities of the Corporation’s banking center in Clark County include an office in Marshall, Illinois.
Removed
This building is held in fee. Facilities of the Corporation’s banking centers in Coles County include an office in Charleston, Illinois. This building is held in fee. Facilities of the Corporation’s banking centers in Crawford County include its main office and a drive-up facility in Robinson, Illinois. Both buildings are held in fee.
Removed
Facilities of the Corporation’s banking center in Franklin County include an office in Benton, Illinois. This building is held in fee. Facilities of the Corporation’s banking center in Jasper County include an office in Newton, Illinois. This building is held in fee. Facilities of the Corporation’s banking centers in Jefferson County include an office and a drive-up facility in Mt.
Removed
Vernon, Illinois. Both buildings are held in fee. Facilities of the Corporation’s banking center in Lawrence County include an office in Lawrenceville, Illinois. This building is held in fee. Facilities of the Corporation’s banking centers in Livingston include two offices in Pontiac, Illinois. Both buildings are held in fee.
Removed
Facilities of the Corporation’s banking centers in Marion County include an office and a drive-up facility in Salem, Illinois. Both buildings are held in fee. Facilities of the Corporation’s banking center in McLean County include two offices in Bloomington, Illinois. A banking center in Bloomington is leased and the lease expires on June 30, 2026.
Removed
The other building is held in fee. Facilities of the Corporation’s banking center in Richland County includes an office in Olney, Illinois. This building is held in fee. Facilities of the Corporation’s banking center in Vermilion County include four offices in Danville, Illinois, and an office in Westville, Illinois.
Removed
One of the buildings in Danville is leased and the lease expires on December 31, 2028 and the other four buildings are held in fee. Facilities of the Corporation’s banking center in Wayne County includes an office in Fairfield, Illinois. This building is held in fee.
Removed
Facilities of the Corporation’s banking center in Breckinridge County includes an office in Cloverport, Kentucky. The building is held in fee. Facilities of the Corporation’s banking center in Calloway County include an office in Murray, Kentucky. The building is held in fee. Facilities of the Corporation’s banking center in Christian County include three offices in Hopkinsville, Kentucky.
Removed
The buildings are held in fee. Facilities of the Corporation’s banking center in Fulton County include two offices in Fulton, Kentucky. The buildings are held in fee. Facilities of the Corporation’s banking center in Hancock County include an office in Hawesville, Kentucky, and an office in Lewisport, Kentucky.
Removed
The buildings are held in fee. 31 Table of Contents Facilities of the Corporation’s banking center in Hopkins County include two offices in Madisonville, Kentucky. The buildings are held in fee. Facilities of the Corporation’s banking center in Marshall County include an office in Benton, Kentucky, and an office in Calvert City, Kentucky. The buildings are held in fee.
Removed
Facilities of the Corporation’s banking center in Todd County include an office in Elkton, Kentucky. The building is held in fee. Facilities of the Corporation’s banking center in Trigg County include an office in Cadiz, Kentucky. The building is held in fee. Facilities of the Corporation’s banking center in Warren County include an office in Bowling Green, Kentucky.
Removed
The building is held in fee. Facilities of the Corporation’s banking center in Bradley County include an office in Cleveland, Tennessee. The building is held in fee. Facilities of the Corporation’s banking center in Cheatham County include an office in Ashland City, Tennessee, an office in Kingston Springs, Tennessee, and an office in Pleasant View, Tennessee.
Removed
The buildings are held in fee. Facilities of the Corporation’s banking center in Hamilton County include one office in Chattanooga, Tennessee, and an office in Soddy-Daisy, Tennessee. The building in Chattanooga is leased and the lease expires on July 31, 2031. The building in Soddy-Daisy is held in fee.
Removed
Facilities of the Corporation’s banking center in Polk County include an office in Benton, Tennessee. The building is held in fee. Facilities of the Corporation’s banking center in Rhea County include two offices in Dayton, Tennessee, and one office in Spring City, Tennessee. The buildings are held in fee.
Removed
Facilities of the Corporation’s banking center in Roane County include one office in Harriman, Tennessee, and an office in Rockwood, Tennessee. The buildings are held in fee. Facilities of the Corporation’s banking center in Catoosa County include an office in Ringgold, Georgia. The building is held in fee.
Removed
Facilities of the Corporation’s banking center in Walker County include one office in Rossville, Georgia, and an office in Flintstone, Georgia. The buildings are held in fee.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS (a) There are no material pending legal proceedings to which the Corporation or its subsidiaries is a party or of which any of their property is the subject, other than ordinary routine litigation incidental to its business. (b) Not applicable. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 33 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS (a) There are no material pending legal proceedings to which the Corporation or its subsidiaries is a party or of which any of their property is the subject, other than ordinary routine litigation incidental to its business. (b) Not applicable. 32 Table of Contents ITEM 4.
Added
MINE SAFETY DISCLOSURES Not applicable. ​ 33 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table gives quarterly high and low trade prices and dividends per share during each quarter for 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ Cash ​ ​ ​ ​ ​ ​ ​ Cash ​ ​ Trade Price ​ Dividends ​ Trade Price ​ Dividends Quarter ended High Low Declared High Low Declared March 31 ​ $ 43.03 ​ $ 36.13 ​ ​ 0.45 ​ $ 45.36 ​ $ 36.98 ​ ​ ​ June 30 ​ $ 39.17 ​ $ 34.84 ​ $ 0.45 ​ $ 37.15 ​ $ 31.68 ​ $ 0.54 September 30 ​ $ 46.46 ​ $ 35.62 ​ ​ 0.45 ​ $ 39.02 ​ $ 32.30 ​ ​ ​ December 31 ​ $ 50.61 ​ $ 41.17 ​ $ 0.51 ​ $ 44.66 ​ $ 31.83 ​ $ 0.45 ​ ​ 34 Table of Contents The graph below represents the five-year total return of the Corporation’s stock.
Biggest changeThe following table gives quarterly high and low trade prices and dividends per share during each quarter for 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ Cash ​ ​ ​ ​ ​ ​ ​ Cash ​ ​ Trade Price ​ Dividends ​ Trade Price ​ Dividends Quarter ended ​ ​ ​ High ​ ​ ​ Low ​ ​ ​ Declared ​ ​ ​ High ​ ​ ​ Low ​ ​ ​ Declared March 31 ​ $ 49.28 ​ $ 48.05 ​ ​ 0.51 ​ $ 43.03 ​ $ 36.13 ​ ​ 0.45 June 30 ​ $ 54.60 ​ $ 53.92 ​ $ 0.51 ​ $ 39.17 ​ $ 34.84 ​ $ 0.45 September 30 ​ $ 57.38 ​ $ 55.99 ​ ​ 0.51 ​ $ 46.46 ​ $ 35.62 ​ ​ 0.45 December 31 ​ $ 61.25 ​ $ 60.21 ​ $ 0.56 ​ $ 50.61 ​ $ 41.17 ​ $ 0.51 ​ ​ 34 Table of Contents The graph below represents the five-year total return of the Corporation’s stock.
Following is certain information regarding shares of common stock purchased by the Corporation during the quarter ended December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) ​ ​ ​ ​ ​ ​ ​ ​ Total Number Of Shares ​ (c) ​ ​ (a) ​ (b) ​ Purchased As Part Of ​ Maximum ​ ​ Total Number Of ​ Average Price ​ Publicly Announced Plans ​ Number of Shares That May Yet ​ Shares Purchased Paid Per Share ​ Or Programs * Be Purchased * October 1-31, 2024 ​ — ​ — ​ — ​ — November 1-30, 2024 — ​ — — — December 1-31, 2024 — ​ — — — Total — ​ — — 518,860 ​ ​
Following is certain information regarding shares of common stock purchased by the Corporation during the quarter ended December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) ​ ​ ​ ​ ​ ​ ​ ​ Total Number Of Shares ​ (c) ​ ​ (a) ​ (b) ​ Purchased As Part Of ​ Maximum ​ ​ Total Number Of ​ Average Price ​ Publicly Announced Plans ​ Number of Shares That May Yet ​ ​ ​ ​ Shares Purchased ​ ​ ​ Paid Per Share ​ Or Programs * ​ ​ ​ Be Purchased * October 1-31, 2025 ​ — ​ — ​ — ​ — November 1-30, 2025 — ​ — — — December 1-31, 2025 — ​ — — — Total — ​ — — 518,860 ​ ​
On March 3, 2025, approximately 11,439 shareholders of record held our common stock. Historically, the Corporation paid cash dividends semi-annually. Beginning with the dividend declared in the fourth quarter 2023, the Corporation began paying cash dividends quarterly, and expects that comparable cash dividends will continue to be paid in the future.
On March 2, 2026, approximately 18,348 shareholders of record held our common stock. Historically, the Corporation paid cash dividends semi-annually. Beginning with the dividend declared in the fourth quarter 2023, the Corporation began paying cash dividends quarterly, and expects that comparable cash dividends will continue to be paid in the future.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET AND DIVIDEND INFORMATION (a) As of March 3, 2025 shareholders owned 11,853,489 shares of the Corporation’s common stock. The stock is traded on the NASDAQ Global Select Market under the symbol “THFF”.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET AND DIVIDEND INFORMATION (a) As of March 2, 2026 shareholders owned 11,891,896 shares of the Corporation’s common stock. The stock is traded on the NASDAQ Global Select Market under the symbol “THFF”.
The five-year total return for our stock during this time was 17.81%.
The five-year total return for our stock during this time was 83.85%.
There were 8,734 and 319,664 purchases of common stock by the Corporation during the years ended December 31, 2024 and December 31, 2023. The Corporation contributed 34,235 shares of treasury stock to the ESOP 35 Table of Contents in November of 2024.
There were 17,028 and 8,734 purchases of common stock by the Corporation during the years ended December 31, 2025 and December 31, 2024. The Corporation contributed 30,114 shares of treasury stock to the ESOP 35 Table of Contents in November of 2025.
During this same period, the return on The Russell 2000 Index was 42.93% and the SNL Index of Banks $1 - $5 Billion had a return of 22.17%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending ​ ​ Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 First Financial Corporation 100.00 87.26 104.25 108.88 106.03 117.81 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 SNL Bank $1B-$5B 100.00 92.90 129.98 110.80 102.56 122.17 ​ (b) Not applicable.
During this same period, the return on The Russell 2000 Index was 34.40% and the SNL Index of Banks $1 - $5 Billion had a return of 45.48%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending ​ ​ Index ​ ​ ​ 12/31/2020 ​ ​ ​ 12/31/2021 ​ ​ ​ 12/31/2022 ​ ​ ​ 12/31/2023 ​ ​ ​ 12/31/2024 ​ ​ ​ 12/31/2025 First Financial Corporation 100.00 119.47 124.78 121.52 135.01 183.85 Russell 2000 100.00 114.82 91.35 106.82 119.14 134.40 SNL Bank $1B-$5B 100.00 139.90 119.26 110.40 131.50 145.48 ​ (b) Not applicable.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeSELECTED FINANCIAL DATA FIVE YEAR COMPARISON OF SELECTED FINANCIAL DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollar amounts in thousands, except per share amounts) 2024 2023 2022 2021 2020 BALANCE SHEET DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 5,560,348 ​ $ 4,851,146 ​ $ 4,989,281 ​ $ 5,175,099 ​ $ 4,560,520 ​ Securities ​ 1,195,990 ​ 1,259,137 ​ 1,330,481 ​ 1,359,514 ​ 1,020,744 ​ Loans ​ 3,837,141 ​ 3,167,821 ​ 3,067,438 ​ 2,815,895 ​ 2,610,294 ​ Deposits ​ 4,718,914 ​ 4,090,068 ​ 4,368,871 ​ 4,409,569 ​ 3,755,945 ​ Borrowings ​ 215,177 ​ 175,798 ​ 80,464 ​ 109,311 ​ 121,920 ​ Shareholders’ equity ​ 549,041 ​ 527,976 ​ 475,293 ​ 582,576 ​ 596,992 ​ INCOME STATEMENT DATA ​ ​ ​ ​ ​ ​ Interest income ​ 264,742 ​ 228,397 ​ 183,301 ​ 152,198 ​ 160,485 ​ Interest expense ​ 89,756 ​ 61,135 ​ 18,259 ​ 8,797 ​ 14,139 ​ Net interest income ​ 174,986 ​ 167,262 ​ 165,042 ​ 143,401 ​ 146,346 ​ Provision for credit losses ​ 16,166 ​ 7,295 ​ (2,025) ​ 2,466 ​ 10,528 ​ Other income ​ 42,772 ​ 42,702 ​ 46,716 ​ 42,084 ​ 42,476 ​ Other expenses ​ 144,438 ​ 130,176 ​ 126,023 ​ 117,406 ​ 112,758 ​ Net income ​ 47,275 ​ 60,672 ​ 71,109 ​ 52,987 ​ 53,844 ​ PER SHARE DATA: ​ ​ ​ ​ ​ ​ Net Income ​ 4.00 ​ 5.08 ​ 5.82 ​ 4.02 ​ 3.93 ​ Cash dividends ​ 1.80 ​ 1.28 ​ 1.17 ​ 1.06 ​ 1.04 ​ PERFORMANCE RATIOS: ​ ​ ​ ​ ​ ​ Return on average assets ​ 0.92 % 1.26 % 1.41 % 1.10 % 1.25 % Return on average shareholders’ equity ​ 8.82 ​ 12.47 ​ 14.37 ​ 8.87 ​ 9.07 ​ Average total capital to average assets ​ 11.21 ​ 10.95 ​ 10.64 ​ 13.36 ​ 14.31 ​ Average shareholders’ equity to average assets ​ 10.40 ​ 10.13 ​ 9.81 ​ 12.41 ​ 13.77 ​ Dividend payout ​ 46.49 ​ 19.41 ​ 21.68 ​ 28.22 ​ 26.58 ​ ​ ​ 36 Table of Contents
Biggest changeSELECTED FINANCIAL DATA FIVE YEAR COMPARISON OF SELECTED FINANCIAL DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollar amounts in thousands, except per share amounts) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 BALANCE SHEET DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 5,756,126 ​ $ 5,560,348 ​ $ 4,851,146 ​ $ 4,989,281 ​ $ 5,175,099 ​ Securities ​ 1,149,526 ​ 1,195,990 ​ 1,259,137 ​ 1,330,481 ​ 1,359,514 ​ Loans ​ 4,055,303 ​ 3,837,141 ​ 3,167,821 ​ 3,067,438 ​ 2,815,895 ​ Deposits ​ 4,551,111 ​ 4,718,914 ​ 4,090,068 ​ 4,368,871 ​ 4,409,569 ​ Borrowings ​ 480,676 ​ 215,177 ​ 175,798 ​ 80,464 ​ 109,311 ​ Shareholders’ equity ​ 650,869 ​ 549,041 ​ 527,976 ​ 475,293 ​ 582,576 ​ INCOME STATEMENT DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 305,588 ​ 264,742 ​ 228,397 ​ 183,301 ​ 152,198 ​ Interest expense ​ 85,720 ​ 89,756 ​ 61,135 ​ 18,259 ​ 8,797 ​ Net interest income ​ 219,868 ​ 174,986 ​ 167,262 ​ 165,042 ​ 143,401 ​ Provision for credit losses ​ 8,200 ​ 16,166 ​ 7,295 ​ (2,025) ​ 2,466 ​ Other income ​ 41,972 ​ 42,772 ​ 42,702 ​ 46,716 ​ 42,084 ​ Other expenses ​ 154,926 ​ 144,438 ​ 130,176 ​ 126,023 ​ 117,406 ​ Net income ​ 79,208 ​ 47,275 ​ 60,672 ​ 71,109 ​ 52,987 ​ PER SHARE DATA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ 6.68 ​ 4.00 ​ 5.08 ​ 5.82 ​ 4.02 ​ Cash dividends paid ​ 2.04 ​ 1.80 ​ 1.28 ​ 1.17 ​ 1.06 ​ PERFORMANCE RATIOS: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets ​ 1.42 % 0.92 % 1.26 % 1.41 % 1.10 % Return on average shareholders’ equity ​ 13.30 ​ 8.82 ​ 12.47 ​ 14.37 ​ 8.87 ​ Average total capital to average assets ​ 11.53 ​ 11.21 ​ 10.95 ​ 10.64 ​ 13.36 ​ Average shareholders’ equity to average assets ​ 10.69 ​ 10.40 ​ 10.13 ​ 9.81 ​ 12.41 ​ Dividend payout ​ 31.29 ​ 46.49 ​ 19.41 ​ 21.68 ​ 28.22 ​ ​ ​ 36 Table of Contents

Item 7. Management's Discussion & Analysis

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

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Biggest changeEarning asset yields increased 43 basis points while the rate on interest-bearing liabilities increased by 54 basis points. 39 Table of Contents CONSOLIDATED BALANCE SHEET - AVERAGE BALANCES AND INTEREST RATES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ Average ​ Yield/ Average ​ Yield/ Average ​ Yield/ ​ (Dollar amounts in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ Loans (1) (2) ​ $ 3,468,534 ​ 227,580 6.56 % $ 3,111,784 ​ 190,947 6.14 % $ 2,884,053 ​ 147,398 5.11 % Taxable investment securities ​ 851,935 ​ 24,237 2.84 % 895,120 ​ 24,643 2.75 % 981,453 ​ 21,014 2.14 % Tax-exempt investments (2) ​ 458,328 ​ 17,125 3.74 % 463,541 ​ 16,591 3.58 % 451,228 ​ 14,216 3.15 % Cash and due from banks ​ 83,690 ​ 947 1.13 % 90,582 ​ 1,546 1.71 % 479,854 ​ 5,224 1.09 % Federal funds sold ​ 8,806 ​ 452 5.13 % 3,108 ​ 124 3.99 % 3,893 ​ 106 2.72 % Total interest-earning assets ​ 4,871,293 ​ 270,341 5.55 % 4,564,135 ​ 233,851 5.12 % 4,800,481 ​ 187,958 3.92 % Non-interest earning assets: ​ ​ ​ ​ ​ ​ ​ Premises and equipment, net ​ 73,774 ​ ​ ​ ​ ​ 67,468 ​ ​ ​ ​ ​ 68,911 ​ ​ ​ ​ Other assets ​ 251,222 ​ ​ ​ ​ ​ 210,277 ​ ​ ​ ​ ​ 216,592 ​ ​ ​ ​ Less allowance for loan losses ​ (41,969) ​ ​ ​ ​ ​ (39,432) ​ ​ ​ ​ ​ (41,997) ​ ​ ​ ​ TOTALS ​ $ 5,154,320 ​ ​ ​ ​ ​ ​ $ 4,802,448 ​ ​ ​ ​ ​ ​ $ 5,043,987 ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Transaction accounts ​ $ 3,092,818 ​ 56,500 ​ 1.83 % $ 2,869,873 ​ 42,594 ​ 1.48 % $ 3,034,430 ​ 13,483 0.44 % Time deposits ​ 674,441 ​ 24,571 ​ 3.64 % 434,943 ​ 9,100 ​ 2.09 % 483,038 ​ 3,260 0.67 % Short-term borrowings ​ 97,176 ​ 4,284 ​ 4.41 % 117,235 ​ 5,370 ​ 4.58 % 83,959 ​ 1,243 1.48 % Other borrowings ​ 69,201 ​ 4,401 ​ 6.36 % 82,316 ​ 4,071 ​ 4.95 % 13,175 ​ 273 2.07 % Total interest-bearing liabilities: ​ 3,933,636 ​ 89,756 ​ 2.28 % 3,504,367 ​ 61,135 ​ 1.74 % 3,614,602 ​ 18,259 0.51 % Non interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 638,420 ​ ​ ​ ​ ​ ​ 801,316 ​ ​ ​ ​ ​ ​ 891,042 ​ ​ ​ ​ Other ​ 46,301 ​ ​ ​ ​ ​ ​ 10,193 ​ ​ ​ ​ ​ ​ 43,506 ​ ​ ​ ​ ​ ​ 4,618,357 ​ ​ ​ ​ ​ ​ 4,315,876 ​ ​ ​ ​ ​ ​ ​ 4,549,150 ​ ​ ​ ​ ​ ​ Shareholders' equity ​ 535,963 ​ ​ ​ ​ ​ ​ 486,572 ​ ​ ​ ​ ​ ​ 494,837 ​ ​ ​ ​ TOTALS ​ $ 5,154,320 ​ ​ ​ ​ ​ ​ $ 4,802,448 ​ ​ ​ ​ ​ ​ $ 5,043,987 ​ ​ ​ ​ Net interest earnings ​ ​ ​ ​ $ 180,585 ​ ​ ​ ​ ​ ​ $ 172,716 ​ ​ ​ ​ $ 169,699 ​ ​ Net yield on interest- earning assets ​ ​ ​ ​ ​ 3.71 % ​ ​ ​ ​ 3.78 % ​ 3.54 % (1)For purposes of these computations, non-accruing loans are included in the daily average loan amounts outstanding.
Biggest changeEarning asset yields increased 37 basis points while the rate on interest-bearing liabilities decreased by 20 basis points. 39 Table of Contents CONSOLIDATED BALANCE SHEET - AVERAGE BALANCES AND INTEREST RATES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ Average ​ Yield/ Average ​ Yield/ Average ​ Yield/ ​ (Dollar amounts in thousands) ​ ​ ​ Balance ​ ​ ​ Interest ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Interest ​ ​ ​ Rate ​ ​ ​ ​ ​Balance ​ ​ ​ Interest ​ ​ ​ ​ Rate ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans (1) (2) ​ $ 3,905,450 ​ 269,037 6.89 % $ 3,468,534 ​ 227,580 6.56 % $ 3,111,784 ​ 190,947 6.14 % Taxable investment securities ​ 801,952 ​ 23,822 2.97 % 851,935 ​ 24,237 2.84 % 895,120 ​ 24,643 2.75 % Tax-exempt investments (2) ​ 452,324 ​ 17,560 3.88 % 458,328 ​ 17,125 3.74 % 463,541 ​ 16,591 3.58 % Cash and due from banks ​ 92,376 ​ 793 0.86 % 83,690 ​ 947 1.13 % 90,582 ​ 1,546 1.71 % Federal funds sold ​ 929 ​ 8 0.86 % 8,806 ​ 452 5.13 % 3,108 ​ 124 3.99 % Total interest-earning assets ​ 5,253,031 ​ 311,220 5.92 % 4,871,293 ​ 270,341 5.55 % 4,564,135 ​ 233,851 5.12 % Non-interest earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Premises and equipment, net ​ 80,164 ​ ​ ​ ​ ​ 73,774 ​ ​ ​ ​ ​ 67,468 ​ ​ ​ ​ Other assets ​ 285,398 ​ ​ ​ ​ ​ 251,222 ​ ​ ​ ​ ​ 210,277 ​ ​ ​ ​ Less allowance for loan losses ​ (46,930) ​ ​ ​ ​ ​ (41,969) ​ ​ ​ ​ ​ (39,432) ​ ​ ​ ​ TOTALS ​ $ 5,571,663 ​ ​ ​ ​ ​ ​ $ 5,154,320 ​ ​ ​ ​ ​ ​ $ 4,802,448 ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transaction accounts ​ $ 3,096,881 ​ 49,885 ​ 1.61 % $ 3,092,818 ​ 56,500 ​ 1.83 % $ 2,869,873 ​ 42,594 1.48 % Time deposits ​ 716,836 ​ 22,548 ​ 3.15 % 674,441 ​ 24,571 ​ 3.64 % 434,943 ​ 9,100 2.09 % Short-term borrowings ​ 162,775 ​ 6,502 ​ 3.99 % 97,176 ​ 4,284 ​ 4.41 % 117,235 ​ 5,370 4.58 % Other borrowings ​ 141,371 ​ 6,785 ​ 4.80 % 69,201 ​ 4,401 ​ 6.36 % 82,316 ​ 4,071 4.95 % Total interest-bearing liabilities: ​ 4,117,863 ​ 85,720 ​ 2.08 % 3,933,636 ​ 89,756 ​ 2.28 % 3,504,367 ​ 61,135 1.74 % Non interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 819,966 ​ ​ ​ ​ ​ ​ 638,420 ​ ​ ​ ​ ​ ​ 801,316 ​ ​ ​ ​ Other ​ 38,275 ​ ​ ​ ​ ​ ​ 46,301 ​ ​ ​ ​ ​ ​ 10,193 ​ ​ ​ ​ ​ ​ 4,976,104 ​ ​ ​ ​ ​ ​ 4,618,357 ​ ​ ​ ​ ​ ​ ​ 4,315,876 ​ ​ ​ ​ ​ ​ Shareholders' equity ​ 595,559 ​ ​ ​ ​ ​ ​ 535,963 ​ ​ ​ ​ ​ ​ 486,572 ​ ​ ​ ​ TOTALS ​ $ 5,571,663 ​ ​ ​ ​ ​ ​ $ 5,154,320 ​ ​ ​ ​ ​ ​ $ 4,802,448 ​ ​ ​ ​ Net interest earnings ​ ​ ​ ​ $ 225,500 ​ ​ ​ ​ ​ ​ $ 180,585 ​ ​ ​ ​ $ 172,716 ​ ​ Net yield on interest- earning assets ​ ​ ​ ​ ​ 4.29 % ​ ​ ​ ​ 3.71 % ​ ​ ​ 3.78 % (1)For purposes of these computations, non-accruing loans are included in the daily average loan amounts outstanding.
As shown in the footnote to the consolidated financial statements (“Regulatory Matters”), the Corporation’s subsidiary banking institutions capital exceeds the requirements to be considered well capitalized at December 31, 2024. First Financial Corporation’s objective continues to be to maintain adequate capital to merit the confidence of its customers and shareholders.
As shown in the footnote to the consolidated financial statements (“Regulatory Matters”), the Corporation’s subsidiary banking institutions capital exceeds the requirements to be considered well capitalized at December 31, 2025. First Financial Corporation’s objective continues to be to maintain adequate capital to merit the confidence of its customers and shareholders.
The portfolio structure will continue to provide cash flows to be reinvested during 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 year and less 1 to 5 years 5 to 10 years Over 10 Years 2024 (Dollar amounts in thousands) Balance ​ Rate Balance Rate Balance Rate Balance Rate Total U.S. government sponsored entity mortgage-backed securities and agencies and U.S.
The portfolio structure will continue to provide cash flows to be reinvested during 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 year and less ​ ​ ​ 1 to 5 years ​ ​ ​ 5 to 10 years ​ ​ ​ Over 10 Years ​ ​ ​ 2025 (Dollar amounts in thousands) ​ ​ ​ Balance ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Total U.S. government sponsored entity mortgage-backed securities and agencies and U.S.
Management continuously evaluates the merits of such interest rate risk products but does not anticipate the use of such products to become a major part of the Corporation’s risk management strategy. ​ 47 Table of Contents The table below shows the Corporation’s estimated sensitivity profile as of December 31, 2024.
Management continuously evaluates the merits of such interest rate risk products but does not anticipate the use of such products to become a major part of the Corporation’s risk management strategy. ​ 47 Table of Contents The table below shows the Corporation’s estimated sensitivity profile as of December 31, 2025.
Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale securities was needed at December 31, 2024. Goodwill .
Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale securities was needed at December 31, 2025. Goodwill .
Liquidity Risk Liquidity is measured by the bank’s ability to raise funds to meet the obligations of its customers, including deposit withdrawals and credit needs. This is accomplished primarily by maintaining sufficient liquid assets in the form of investment securities and core deposits. The Corporation has $13.0 million of investments that mature throughout the coming 12 months.
Liquidity Risk Liquidity is measured by the bank’s ability to raise funds to meet the obligations of its customers, including deposit withdrawals and credit needs. This is accomplished primarily by maintaining sufficient liquid assets in the form of investment securities and core deposits. The Corporation has $9.3 million of investments that mature throughout the coming 12 months.
The decrease in 2024 net income is primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as well as non-interest expenses, which included increased operating expenses, as a result of the acquisition and expenses associated with the acquisition, as described in those respective sections in the following pages.
The decrease in 2024 net income is primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as well as non-interest expenses, which included increased operating expenses, as a result of the acquisition and expenses associated with the acquisition, as described in those respective sections in the following pages . ​ Net interest income increased $7.7 million in 2024 compared to 2023.
First Financial Corporation borrowed $25 million on a note payable in June 2024 for the acquisition of SimplyBank. On December 31, 2024, the balance on the note was $20.8 million. The Asset/Liability Committee reviews these funding sources and considers the related strategies on a monthly basis. See Interest Rate Sensitivity and Liquidity below for more information.
First Financial Corporation borrowed $25 million on a note payable in June 2024 for the acquisition of SimplyBank. On December 31, 2025, the balance on the note was $12.5 million. The Asset/Liability Committee reviews these funding sources and considers the related strategies on a monthly basis. See Interest Rate Sensitivity and Liquidity below for more information.
These components are added together and compared to the balance of our allowance at the evaluation date. The allowance for credit losses as a percentage of total loans decreased to 1.22% at year-end 2024 compared to 1.26% at year-end 2023.
These components are added together and compared to the balance of our allowance at the evaluation date. The allowance for credit losses as a percentage of total loans decreased to 1.18% at year-end 2025 compared to 1.22% at year-end 2024.
RESULTS OF OPERATIONS - SUMMARY FOR 2024 COMPARISON OF 2024 TO 2023 Net income for 2024 was $47.3 million, or $4.00 per share versus $60.7 million, or $5.08 per share for 2023.
COMPARISON OF 2024 TO 2023 Net income for 2024 was $47.3 million, or $4.00 per share versus $60.7 million, or $5.08 per share for 2023.
Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate. Non-performing loans of $13.3 million at December 31, 2024 decreased from $24.6 million at December 31, 2023.
Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate. Non-performing loans of $28.6 million at December 31, 2025 increased from $13.3 million at December 31, 2024.
Commitments: The following table details the amount and expected maturities of significant commitments as of December 31, 2024.
Commitments: The following table details the amount and expected maturities of significant commitments as of December 31, 2025.
Following is an analysis of the components of the Corporation’s balance sheet. ​ 42 Table of Contents SECURITIES The Corporation’s investment strategy seeks to maximize income from the investment portfolio while using it as a risk management tool and ensuring safety of principal and capital. During 2024 the portfolio’s balance decreased by 5.0%.
Following is an analysis of the components of the Corporation’s balance sheet. ​ 42 Table of Contents SECURITIES The Corporation’s investment strategy seeks to maximize income from the investment portfolio while using it as a risk management tool and ensuring safety of principal and capital. During 2025 the portfolio’s balance decreased by 3.9%.
The Corporation also has $388.5 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $295.1 million available with the Federal Reserve Bank, and $90 million of available fed funds lines with correspondent banks. With these sources of funds, the Corporation currently anticipates adequate liquidity to meet the expected obligations of its customers.
The Corporation also has $341.5 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $837.2 million available with the Federal Reserve Bank, and $90 million of available fed funds lines with correspondent banks. With these sources of funds, the Corporation currently anticipates adequate liquidity to meet the expected obligations of its customers.
To warrant this confidence, the Corporation’s management maintains a capital position which they believe is sufficient to absorb unforeseen financial shocks without unnecessarily restricting dividends to its shareholders. The Corporation’s dividend payout ratio for 2024 and 2023 was 46.5% and 19.4%, respectively.
To warrant this confidence, the Corporation’s management maintains a capital position which they believe is sufficient to absorb unforeseen financial shocks without unnecessarily restricting dividends to its shareholders. The Corporation’s dividend payout ratio for 2025 and 2024 was 31.3% and 46.5%, respectively.
The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points. Given a 100 basis point increase in rates, net interest income would decrease 1.51% over the next 12 months and increase 0.94% over the following 12 months.
The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points. Given a 100 basis point increase in rates, net interest income would decrease 1.67% over the next 12 months and increase 1.52% over the following 12 months.
The table below presents the allocation of the allowance to the loan portfolios at year-end. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollar amounts in thousands) 2024 2023 2022 2021 2020 Commercial ​ $ 16,963 ​ $ 13,264 ​ $ 12,949 ​ $ 18,883 ​ $ 13,925 Residential ​ 17,470 ​ 14,327 ​ 14,568 ​ 18,316 ​ 19,142 Consumer ​ 12,046 ​ 11,797 ​ 12,104 ​ 10,721 ​ 11,009 Unallocated ​ 253 ​ 379 ​ 158 ​ 385 ​ — TOTAL ALLOWANCE FOR CREDIT LOSSES ​ $ 46,732 ​ $ 39,767 ​ $ 39,779 ​ $ 48,305 ​ $ 44,076 ​ NONPERFORMING LOANS Management monitors the components and status of nonperforming loans as a part of the evaluation procedures used in determining the adequacy of the allowance for loan losses.
The table below presents the allocation of the allowance to the loan portfolios at year-end. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollar amounts in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 Commercial ​ $ 18,805 ​ $ 16,963 ​ $ 13,264 ​ $ 12,949 ​ $ 18,883 Residential ​ 16,620 ​ 17,470 ​ 14,327 ​ 14,568 ​ 18,316 Consumer ​ 12,348 ​ 12,046 ​ 11,797 ​ 12,104 ​ 10,721 Unallocated ​ 222 ​ 253 ​ 379 ​ 158 ​ 385 TOTAL ALLOWANCE FOR CREDIT LOSSES ​ $ 47,995 ​ $ 46,732 ​ $ 39,767 ​ $ 39,779 ​ $ 48,305 ​ NONPERFORMING LOANS Management monitors the components and status of nonperforming loans as a part of the evaluation procedures used in determining the adequacy of the allowance for credit losses.
The amounts shown below represent non-accrual loans and those loans which are past due more than 90 days where the Corporation continues to accrue interest. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 2021 2020 Non-accrual loans ​ $ 11,479 ​ $ 23,596 ​ $ 8,481 ​ $ 9,590 ​ $ 14,213 ​ Accruing loans past due over 90 days ​ 1,821 ​ 960 ​ 1,119 ​ 515 ​ 2,324 ​ ​ ​ $ 13,300 ​ $ 24,556 ​ $ 9,600 ​ $ 10,105 ​ $ 16,537 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of the allowance for credit losses as a percentage of non-performing loans ​ ​ 351.4 % ​ 161.9 % ​ 414.4 % ​ 478.0 % ​ 284.5 ​ ​ ​ 45 Table of Contents The ratio of the allowance for loan losses as a percentage of nonperforming loans was 351.4% at December 31, 2024, compared to 161.9% in 2023.
The amounts shown below represent non-accrual loans and those loans which are past due more than 90 days where the Corporation continues to accrue interest. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 Non-accrual loans ​ $ 27,495 ​ $ 11,479 ​ $ 23,596 ​ $ 8,481 ​ $ 9,590 ​ Accruing loans past due over 90 days ​ 1,083 ​ 1,821 ​ 960 ​ 1,119 ​ 515 ​ ​ ​ $ 28,578 ​ $ 13,300 ​ $ 24,556 ​ $ 9,600 ​ $ 10,105 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of the allowance for credit losses as a percentage of non-performing loans ​ ​ 167.9 % ​ 351.4 % ​ 161.9 % ​ 414.4 % ​ 478.0 % ​ ​ 45 Table of Contents The ratio of the allowance for loan losses as a percentage of nonperforming loans was 167.9% at December 31, 2025, compared to 351.4% in 2024.
Periodic review of this exposure is performed to identify and monitor any potential weaknesses within a specific credit. ​ ALLOWANCE FOR CREDIT LOSSES The activity in the Corporation’s allowance for credit losses is shown in the following analysis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollar amounts in thousands) 2024 2023 2022 2021 2020 Amount of loans outstanding at December 31, ​ $ 3,831,795 ​ $ 3,160,072 ​ $ 3,060,263 ​ $ 2,812,601 ​ $ 2,606,113 ​ Average amount of loans by year ​ $ 3,468,534 ​ $ 3,111,784 ​ $ 2,884,053 ​ $ 2,602,344 ​ $ 2,702,225 ​ Allowance for credit losses at beginning of year ​ $ 39,767 ​ $ 39,779 ​ $ 48,305 ​ $ 44,076 ​ $ 19,943 ​ Loans charged off: ​ ​ ​ ​ ​ ​ Commercial ​ 7,890 ​ 966 ​ 3,917 ​ 2,158 ​ 1,097 ​ Residential ​ 343 ​ 216 ​ 657 ​ 812 ​ 944 ​ Consumer ​ 11,056 ​ 14,314 ​ 11,132 ​ 5,246 ​ 6,355 ​ Total loans charged off ​ 19,289 ​ 15,496 ​ 15,706 ​ 8,216 ​ 8,396 ​ Recoveries of loans previously charged off: ​ ​ ​ ​ ​ ​ Commercial ​ 1,946 ​ 1,083 ​ 2,062 ​ 1,069 ​ 856 ​ Residential ​ 451 ​ 292 ​ 759 ​ 616 ​ 657 ​ Consumer ​ 4,685 ​ 6,814 ​ 6,384 ​ 3,884 ​ 3,404 ​ Total recoveries ​ 7,082 ​ 8,189 ​ 9,205 ​ 5,569 ​ 4,917 ​ Net loans charged off ​ 12,207 ​ 7,307 ​ 6,501 ​ 2,647 ​ 3,479 ​ Provision charged to expense ​ 16,166 ​ 7,295 ​ (2,025) ​ 2,466 ​ 10,528 ​ CECL adoption ​ — ​ — ​ — ​ — ​ 17,084 ​ PCD ACL on acquired loans ​ 3,006 ​ — ​ — ​ 4,410 ​ — ​ Balance at end of year ​ $ 46,732 ​ $ 39,767 ​ $ 39,779 ​ $ 48,305 ​ $ 44,076 ​ Ratio of net charge-offs during period to average loans outstanding ​ 0.35 % 0.23 % 0.23 % 0.10 % 0.13 % ​ The allowance is maintained at an amount management believes sufficient to absorb expected losses in the loan portfolio.
Periodic review of this exposure is performed to identify and monitor any potential weaknesses within a specific credit. ​ ALLOWANCE FOR CREDIT LOSSES The activity in the Corporation’s allowance for credit losses is shown in the following analysis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollar amounts in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 Amount of loans outstanding at December 31, ​ $ 4,050,434 ​ $ 3,831,795 ​ $ 3,160,072 ​ $ 3,060,263 ​ $ 2,812,601 ​ Average amount of loans by year ​ $ 3,905,450 ​ $ 3,468,534 ​ $ 3,111,784 ​ $ 2,884,053 ​ $ 2,602,344 ​ Allowance for credit losses at beginning of year ​ $ 46,732 ​ $ 39,767 ​ $ 39,779 ​ $ 48,305 ​ $ 44,076 ​ Loans charged off: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 1,353 ​ 7,890 ​ 966 ​ 3,917 ​ 2,158 ​ Residential ​ 241 ​ 343 ​ 216 ​ 657 ​ 812 ​ Consumer ​ 11,216 ​ 11,056 ​ 14,314 ​ 11,132 ​ 5,246 ​ Total loans charged off ​ 12,810 ​ 19,289 ​ 15,496 ​ 15,706 ​ 8,216 ​ Recoveries of loans previously charged off: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 901 ​ 1,946 ​ 1,083 ​ 2,062 ​ 1,069 ​ Residential ​ 276 ​ 451 ​ 292 ​ 759 ​ 616 ​ Consumer ​ 4,696 ​ 4,685 ​ 6,814 ​ 6,384 ​ 3,884 ​ Total recoveries ​ 5,873 ​ 7,082 ​ 8,189 ​ 9,205 ​ 5,569 ​ Net loans charged off ​ 6,937 ​ 12,207 ​ 7,307 ​ 6,501 ​ 2,647 ​ Provision charged to expense ​ 8,200 ​ 16,166 ​ 7,295 ​ (2,025) ​ 2,466 ​ PCD ACL on acquired loans ​ — ​ 3,006 ​ — ​ — ​ 4,410 ​ Balance at end of year ​ $ 47,995 ​ $ 46,732 ​ $ 39,767 ​ $ 39,779 ​ $ 48,305 ​ Ratio of net charge-offs during period to average loans outstanding ​ 0.18 % 0.35 % 0.23 % 0.23 % 0.10 % ​ The allowance is maintained at an amount management believes sufficient to absorb expected losses in the loan portfolio.
The Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank. Additionally, the increase in provision as well as charge-offs were related to one previously identified credit, reflecting further deterioration in collateral values in the year. No further losses are expected on this credit.
In the third quarter 2024 the Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank. Also in 2024, the provision as well as charge-offs were impacted by one previously identified credit, reflecting further deterioration in collateral values in the year. No further losses are expected on this credit.
Given a 100 basis point decrease in rates, net interest income would increase 4.07% over the next 12 months and increase 0.68% over the following 12 months.
Given a 100 basis point decrease in rates, net interest income would increase 3.72% over the next 12 months and increase 0.09% over the following 12 months.
Further discussion of these commitments is included in Note 15 to the consolidated financial statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ One year ​ Over One (Dollar amounts in thousands) Committed or less Year Commitments to extend credit: ​ ​ ​ Unused loan commitments ​ $ 852,791 ​ $ 344,393 ​ $ 508,398 Commercial letters of credit ​ 12,725 ​ 12,725 ​ — 48 Table of Contents ​ Commitments to extend credit, including loan commitments, standby and commercial letters of credit do not necessarily represent future cash requirements, in that these commitments often expire without being drawn upon. ​
Further discussion of these commitments is included in Note 15 to the consolidated financial statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ One year ​ Over One (Dollar amounts in thousands) ​ ​ ​ Committed ​ ​ ​ or less ​ ​ ​ Year Commitments to extend credit: ​ ​ ​ ​ ​ ​ Unused loan commitments ​ $ 924,046 ​ $ 331,556 ​ $ 592,490 Commercial letters of credit ​ 14,844 ​ 14,844 ​ — 48 Table of Contents ​ Commitments to extend credit, including loan commitments, standby and commercial letters of credit do not necessarily represent future cash requirements, in that these commitments often expire without being drawn upon. ​
The ACL and allowance for unfunded commitments were $46.7 million and $2.1 million, respectively at December 31, 2024, compared to $39.8 million and $2.0 million, respectively at December 31, 2023. The qualitative amount of the reserve increased $1.9 million to $12.8 million. The quantitative amount is $33.6 million at December 31, 2024, compared to $28.4 million at December 31, 2023.
The ACL and allowance for unfunded commitments were $48.0 million and $2.9 million, respectively at December 31, 2025, compared to $46.7 million and $2.1 million, respectively at December 31, 2024. The qualitative amount of the reserve increased $1.3 million to $14.1 million. The quantitative amount is $33.6 million at December 31, 2025, compared to $33.6 million at December 31, 2024.
Net charge-offs for 2024 were $12.2 million as compared to $7.3 million for 2023 and $6.5 million for 2022 with current year over year increases driven from the previously identified credit discussed above. Non-accrual loans, decreased to $11.5 million at December 31, 2024 from $23.6 million at December 31, 2023.
Net charge-offs for 2025 were $6.9 million as compared to $12.2 million for 2024 and $7.3 million for 2023 with the 2024 charge-offs driven from the previously identified credit discussed above. Non-accrual loans increased to $27.5 million at December 31, 2025 from $11.5 million at December 31, 2024.
There were also 34,235 shares from the treasury with a value of $1.67 million that were contributed to the ESOP plan in 2024 compared to 40,496 shares with a value of $1.52 million in 2023.
There were also 30,114 shares from the treasury with a value of $1.66 million that were contributed to the ESOP plan in 2025 compared to 34,235 shares with a value of $1.67 million in 2024.
The Corporation also anticipates $112.8 million of principal payments from mortgage-backed securities. Given the current rate environment, the Corporation anticipates $31.1 million in securities to be called within the next 12 months.
The Corporation also anticipates $109.7 million of principal payments from mortgage-backed securities. Given the current rate environment, the Corporation anticipates $36.3 million in securities to be called within the next 12 months.
Net unrealized gain/loss on available for sale securities decreased $12.4 million from a net unrealized loss of $153.4 million in 2023 to a net unrealized loss of $165.8 million in 2024. The Corporation does not expect realized losses, as there is no intent to sell at a loss.
Net unrealized gain/loss on available for sale securities increased $57.6 million from a net unrealized loss of $165.8 million in 2024 to a net unrealized loss of $108.2 million in 2025. The Corporation does not expect realized losses, as there is no intent to sell at a loss.
The analysis is governed by Accounting Standards Codification (ASC 326), implemented in 2020, which used an economic forecast that included the impact of the COVID-19 pandemic. For the year ended December 31, 2024, the provision for credit losses was $16.2 million, an increase of $8.9 million, or 122%, compared to 2023.
The analysis is governed by Accounting Standards Codification (ASC 326), implemented in 2020, which used an economic forecast that included the impact of the COVID-19 pandemic. For the year ended December 31, 2025, the provision for credit losses was $8.2 million, a decrease of $8.0 million, or 49%, compared to 2024, as required under the current CECL guidance.
The maturities of certificates of deposit of more than $100 thousand outstanding at December 31, 2024, are summarized as follows: ​ ​ ​ ​ ​ (Dollar amounts in thousands) ​ ​ 3 months or less ​ $ 135,907 Over 3 through 6 months ​ 143,187 Over 6 through 12 months ​ 83,708 Over 12 months ​ 28,638 TOTAL ​ $ 391,440 ​ (1) Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateral deposits. ​ 46 Table of Contents OTHER BORROWINGS Advances from the Federal Home Loan Bank decreased to $7.3 million in 2024 compared to $108.6 million in 2023.
The maturities of certificates of deposit of more than $100 thousand outstanding at December 31, 2025, are summarized as follows: ​ ​ ​ ​ ​ (Dollar amounts in thousands) ​ ​ ​ ​ ​ 3 months or less ​ $ 150,284 Over 3 through 6 months ​ 150,538 Over 6 through 12 months ​ 50,896 Over 12 months ​ 13,300 TOTAL ​ $ 365,018 ​ (1) Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateral deposits. ​ 46 Table of Contents OTHER BORROWINGS Advances from the Federal Home Loan Bank increased to $175.7 million in 2025 compared to $7.3 million in 2024.
Loans past due 90 days and still on accrual increased to $1.8 million compared to $960 thousand at December 31, 2023. NON-INTEREST INCOME Non-interest income of $42.8 million remained stable compared to the $42.7 million earned in 2023. 41 Table of Contents NON-INTEREST EXPENSES Non-interest expenses increased to $144.4 million in 2024 from $130.2 million in 2023.
Loans past due 90 days and still on accrual decreased to $1.1 million compared to $1.8 million at December 31, 2024. NON-INTEREST INCOME Non-interest income decreased to $42.0 million in 2025 from $42.8 million earned in 2024. 41 Table of Contents NON-INTEREST EXPENSES Non-interest expenses increased to $154.9 million in 2025 from $144.4 million in 2024.
The following loan categories comprise significant components of the nonperforming loans at December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Non-accrual loans ​ ​ ​ ​ Commercial loans ​ $ 6,697 58 % $ 18,380 78 % Residential loans ​ 2,050 18 % 2,065 9 % Consumer loans ​ 2,732 24 % 3,151 13 % ​ ​ $ 11,479 100 % $ 23,596 100 % Past due 90 days or more ​ ​ ​ Commercial loans ​ $ 42 2 % $ 4 0 % Residential loans ​ 1,778 98 % 911 95 % Consumer loans ​ 1 0 % 45 5 % ​ ​ $ 1,821 100 % $ 960 100 % ​ Management considers the present allowance to be appropriate and adequate to cover expected losses inherent in the loan portfolio based on the current economic environment.
The following loan categories comprise significant components of the nonperforming loans at December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Non-accrual loans ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ $ 22,836 83 % $ 6,697 58 % Residential loans ​ 1,997 7 % 2,050 18 % Consumer loans ​ 2,662 10 % 2,732 24 % ​ ​ $ 27,495 100 % $ 11,479 100 % Past due 90 days or more and still accruing ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ $ 50 5 % $ 42 2 % Residential loans ​ 1,032 95 % 1,778 98 % Consumer loans ​ 1 0 % 1 0 % ​ ​ $ 1,083 100 % $ 1,821 100 % ​ Management considers the present allowance to be appropriate and adequate to cover expected losses inherent in the loan portfolio based on the current economic environment.
These estimates assume all rate changes occur overnight and management takes no action as a result of this change. ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis Point Percentage Change in Net Interest Income Interest Rate Change 12 months 24 months 36 months Down 300 ​ 2.65 % (8.59) % (18.36) % Down 200 ​ 3.39 ​ (3.84) ​ (10.47) ​ Down 100 ​ 4.07 ​ 0.68 ​ (2.70) ​ Up 100 ​ (1.51) ​ 0.94 ​ 3.98 ​ Up 200 ​ (5.84) ​ (0.97) ​ 5.21 ​ Up 300 ​ (8.84) ​ (1.52) ​ 7.76 ​ ​ Typical rate shock analysis does not reflect management’s ability to react and thereby reduce the effects of rate changes, and represents a worst-case scenario.
These estimates assume all rate changes occur overnight and management takes no action as a result of this change. ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis Point ​ ​ ​ Percentage Change in Net Interest Income Interest Rate Change ​ ​ ​ 12 months ​ ​ ​ 24 months ​ ​ ​ 36 months ​ ​ ​ Down 300 ​ 5.83 % (5.29) % (14.69) % Down 200 ​ 5.67 ​ (1.83) ​ (8.45) ​ Down 100 ​ 3.72 ​ 0.09 ​ (3.26) ​ Up 100 ​ (1.67) ​ 1.52 ​ 4.77 ​ Up 200 ​ (6.02) ​ 0.26 ​ 6.71 ​ Up 300 ​ (8.87) ​ 0.39 ​ 10.07 ​ ​ Typical rate shock analysis does not reflect management’s ability to react and thereby reduce the effects of rate changes, and represents a worst-case scenario.
LOAN PORTFOLIO Loans outstanding by major category as of December 31 for each of the last five years and the maturities at year end 2024 are set forth in the following analyses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollar amounts in thousands) 2024 2023 2022 2021 2020 Loan Category ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 2,196,351 ​ $ 1,817,526 ​ $ 1,798,260 ​ $ 1,674,066 ​ $ 1,521,711 Residential ​ 967,386 ​ 695,788 ​ 673,464 ​ 664,509 ​ 604,652 Consumer ​ 668,058 ​ 646,758 ​ 588,539 ​ 474,026 ​ 479,750 TOTAL ​ $ 3,831,795 ​ $ 3,160,072 ​ $ 3,060,263 ​ $ 2,812,601 ​ $ 2,606,113 43 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After One ​ ​ ​ ​ ​ ​ ​ ​ Within But Within After Five (Dollar amounts in thousands) ​ One Year ​ Five Years ​ Years ​ Total MATURITY DISTRIBUTION ​ ​ ​ ​ Commercial, financial and agricultural ​ $ 850,958 ​ $ 1,041,890 ​ $ 303,503 ​ $ 2,196,351 TOTAL ​ ​ ​ ​ Residential ​ ​ ​ ​ ​ ​ 967,386 Consumer ​ ​ ​ ​ ​ ​ 668,058 TOTAL ​ ​ ​ ​ ​ ​ $ 3,831,795 Loans maturing after one year with: ​ ​ ​ ​ Fixed interest rates ​ ​ ​ ​ $ 552,382 ​ $ 281,149 ​ Variable interest rates ​ ​ ​ ​ 489,508 ​ 22,354 ​ TOTAL ​ ​ ​ ​ $ 1,041,890 ​ $ 303,503 ​ ​ Commercial Real Estate represents $1.8 billion of total exposure as of December 31, 2024, and is within regulatory guidance.
LOAN PORTFOLIO Loans outstanding by major category as of December 31 for each of the last five years and the maturities at year end 2025 are set forth in the following analyses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollar amounts in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 Loan Category ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 2,375,344 ​ $ 2,196,351 ​ $ 1,817,526 ​ $ 1,798,260 ​ $ 1,674,066 Residential ​ 986,955 ​ 967,386 ​ 695,788 ​ 673,464 ​ 664,509 Consumer ​ 688,135 ​ 668,058 ​ 646,758 ​ 588,539 ​ 474,026 TOTAL ​ $ 4,050,434 ​ $ 3,831,795 ​ $ 3,160,072 ​ $ 3,060,263 ​ $ 2,812,601 43 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After One ​ ​ ​ ​ ​ ​ ​ ​ Within ​ ​ ​ But Within ​ ​ ​ After Five ​ ​ ​ ​ (Dollar amounts in thousands) ​ One Year ​ Five Years ​ Years ​ Total MATURITY DISTRIBUTION ​ ​ ​ ​ ​ ​ ​ ​ Commercial, financial and agricultural ​ $ 1,016,347 ​ $ 1,104,064 ​ $ 254,933 ​ $ 2,375,344 TOTAL ​ ​ ​ ​ ​ ​ ​ ​ Residential ​ ​ ​ ​ ​ ​ ​ ​ 986,955 Consumer ​ ​ ​ ​ ​ ​ ​ ​ 688,135 TOTAL ​ ​ ​ ​ ​ ​ ​ ​ $ 4,050,434 Loans maturing after one year with: ​ ​ ​ ​ ​ ​ ​ ​ Fixed interest rates ​ ​ ​ ​ $ 489,126 ​ $ 238,275 ​ ​ Variable interest rates ​ ​ ​ ​ 614,938 ​ 16,658 ​ ​ TOTAL ​ ​ ​ ​ $ 1,104,064 ​ $ 254,933 ​ ​ ​ Commercial Real Estate represents $1.9 billion of total exposure as of December 31, 2025, and is within regulatory guidance.
See additional discussion of ACL in the Allowance for Credit Losses section below. Based on management’s analysis of the current portfolio, management believes the allowance is adequate.
There was an $800 thousand increase in the allowance for unfunded commitments. See additional discussion of ACL in the Allowance for Credit Losses section below. 37 Table of Contents Based on management’s analysis of the current portfolio, management believes the allowance is adequate.
The provision for credit losses increased $9.3 million from a negative provision of $2.0 million in 2022 to a provision of $7.3 million in 2023. Non-interest income decreased $4.0 million and non-interest expenses increased $4.2 million.
The provision for credit losses increased $8.9 million from $7.3 million in 2023 to a provision of $16.2 million in 2024. Non-interest income remained stable and non-interest expenses increased $14.2 million.
The increase in non-interest expenses is primarily due to $1.7 million of expenses associated with the acquisition, as well as increases in operating expenses as a result of the acquisition. INCOME TAXES The Corporation’s federal income tax provision was $9.9 million in 2024 compared to $11.8 million in 2023.
The increase in non-interest expenses is primarily due to $1.7 million of expenses associated with the acquisition, as well as increases in operating expenses as a result of the 2024 acquisition. The provision for income taxes decreased $1.9 million from 2023 to 2024 and the effective tax rate increased to 17.3% in 2024 from 16.3% in 2023.
DEPOSITS The information below presents the average amount of deposits and rates paid on those deposits for 2024, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ 2022 (Dollar amounts in thousands) Amount Rate Amount Rate Amount Rate Non-interest-bearing demand deposits ​ $ 638,420 ​ ​ ​ $ 801,316 ​ ​ ​ $ 891,042 ​ ​ ​ Interest-bearing demand deposits ​ 1,681,079 ​ 2.61 % 1,440,411 ​ 2.15 % 1,511,232 ​ 0.65 % Savings deposits ​ 1,411,739 ​ 0.90 % 1,429,462 ​ 0.82 % 1,523,198 ​ 0.24 % Time deposits: $100,000 or more ​ 318,400 ​ 4.15 % 176,453 ​ 2.89 % 172,916 ​ 1.15 % Other time deposits ​ 356,041 ​ 3.19 % 258,490 ​ 1.54 % 310,122 ​ 0.41 % TOTAL ​ $ 4,405,679 ​ ​ ​ $ 4,106,132 $ 4,408,510 ​ ​ Deposits increased 7.30% to $4.4 billion at December 31, 2024 compared to December 31, 2023.
DEPOSITS The information below presents the average amount of deposits and rates paid on those deposits for 2025, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 (Dollar amounts in thousands) ​ ​ ​ Amount ​ ​ ​ Rate ​ ​ ​ Amount ​ ​ ​ Rate ​ ​ ​ Amount ​ ​ ​ Rate Non-interest-bearing demand deposits ​ $ 819,966 ​ ​ ​ $ 638,420 ​ ​ ​ $ 801,316 ​ ​ ​ Interest-bearing demand deposits ​ 1,700,520 ​ 2.31 % 1,681,079 ​ 2.61 % 1,440,411 ​ 2.15 % Savings deposits ​ 1,396,361 ​ 0.76 % 1,411,739 ​ 0.90 % 1,429,462 ​ 0.82 % Time deposits: $100,000 or more ​ 340,101 ​ 3.44 % 318,400 ​ 4.15 % 176,453 ​ 2.89 % Other time deposits ​ 376,735 ​ 2.88 % 356,041 ​ 3.19 % 258,490 ​ 1.54 % TOTAL ​ $ 4,633,683 ​ ​ ​ $ 4,405,679 ​ $ 4,106,132 ​ ​ ​ Average deposits increased 5.18% to $4.6 billion at December 31, 2025 compared to December 31, 2024. ​ The Corporation estimates that uninsured deposits (1) totaled $864.6 million, or 19% of total deposits, at December 31, 2025, compared to $980.5 million, or 21%, at December 31, 2024.
NET INTEREST INCOME The principal source of the Corporation’s earnings is net interest income, which represents the difference between interest earned on loans and investments and the interest cost associated with deposits and other sources of funding. Net interest income increased in 2024 to $175.0 million compared to $167.3 million in 2023.
The primary components of income and expense affecting net income are discussed in the following analysis. NET INTEREST INCOME The principal source of the Corporation’s earnings is net interest income, which represents the difference between interest earned on loans and investments and the interest cost associated with deposits and other sources of funding.
The average cost of these interest-bearing liabilities increased to 2.28% in 2024 from 1.74% in 2023. The net interest margin decreased from 3.78% in 2023 to 3.71% in 2024.
Total average interest-bearing liabilities increased to $4.12 billion in 2025 from $3.93 billion in 2024. The average cost of these interest-bearing liabilities decreased to 2.08% in 2025 from 2.28% in 2024. 38 Table of Contents The net interest margin increased from 3.71% in 2024 to 4.29% in 2025.
The table information compares 2024 to 2023 and 2023 to 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 Compared to 2023 Increase 2023 Compared to 2022 Increase ​ ​ (Decrease) Due to ​ (Decrease) Due to ​ ​ ​ ​ ​ ​ Volume/ ​ ​ ​ ​ ​ ​ ​ Volume/ ​ ​ (Dollar amounts in thousands) Volume Rate Rate Total Volume Rate Rate Total Interest earned on interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ Loans (1) (2) ​ $ 21,891 ​ $ 13,226 ​ $ 1,516 ​ $ 36,633 ​ $ 11,639 ​ $ 29,575 ​ $ 2,335 ​ $ 43,549 Taxable investment securities ​ (1,189) ​ 823 ​ (40) ​ (406) ​ (1,848) ​ 6,006 ​ (528) ​ 3,630 Tax-exempt investment securities (2) ​ (187) ​ 729 ​ (8) ​ 534 ​ 388 ​ 1,934 ​ 53 ​ 2,375 Cash and due from banks ​ (118) ​ (521) ​ 40 ​ (599) ​ (4,238) ​ 2,966 ​ (2,406) ​ (3,678) Federal funds sold ​ 227 ​ 36 ​ 65 ​ 328 ​ (21) ​ 49 ​ (10) ​ 18 Total interest income ​ $ 20,624 ​ $ 14,293 ​ $ 1,573 ​ $ 36,490 ​ $ 5,920 ​ $ 40,530 ​ $ (556) ​ $ 45,894 Interest paid on interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Transaction accounts ​ 3,309 ​ 9,833 ​ 764 ​ 13,906 ​ (731) ​ 31,553 ​ (1,711) ​ 29,111 Time deposits ​ 5,011 ​ 6,746 ​ 3,714 ​ 15,471 ​ (325) ​ 6,846 ​ (682) ​ 5,839 Short-term borrowings ​ (919) ​ (202) ​ 35 ​ (1,086) ​ 493 ​ 2,603 ​ 1,032 ​ 4,128 Other borrowings ​ (649) ​ 1,164 ​ (185) ​ 330 ​ 1,433 ​ 379 ​ 1,987 ​ 3,799 Total interest expense ​ 6,752 ​ 17,541 ​ 4,328 ​ 28,621 ​ 870 ​ 41,381 ​ 626 ​ 42,877 Net interest income ​ $ 13,872 ​ $ (3,248) ​ $ (2,755) ​ $ 7,869 ​ $ 5,050 ​ $ (851) ​ $ (1,182) ​ $ 3,017 (1)For purposes of these computations, non-accruing loans are included in the daily average loan amounts outstanding.
The table information compares 2025 to 2024 and 2024 to 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 Compared to 2024 Increase ​ ​ ​ 2024 Compared to 2023 Increase ​ ​ (Decrease) Due to ​ (Decrease) Due to ​ ​ ​ ​ ​ ​ Volume/ ​ ​ ​ ​ ​ ​ ​ Volume/ ​ ​ (Dollar amounts in thousands) ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ Rate ​ ​ ​ Total ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ Rate ​ ​ ​ Total Interest earned on interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans (1) (2) ​ $ 28,667 ​ $ 11,359 ​ $ 1,431 ​ $ 41,457 ​ $ 21,891 ​ $ 13,226 ​ $ 1,516 ​ $ 36,633 Taxable investment securities ​ (1,422) ​ 1,070 ​ (63) ​ (415) ​ (1,189) ​ 823 ​ (40) ​ (406) Tax-exempt investment securities (2) ​ (224) ​ 668 ​ (9) ​ 435 ​ (187) ​ 729 ​ (8) ​ 534 Cash and due from banks ​ 98 ​ (228) ​ (24) ​ (154) ​ (118) ​ (521) ​ 40 ​ (599) Federal funds sold ​ (404) ​ (376) ​ 336 ​ (444) ​ 227 ​ 36 ​ 65 ​ 328 Total interest income ​ $ 26,715 ​ $ 12,493 ​ $ 1,671 ​ $ 40,879 ​ $ 20,624 ​ $ 14,293 ​ $ 1,573 ​ $ 36,490 Interest paid on interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transaction accounts ​ 74 ​ (6,680) ​ (9) ​ (6,615) ​ 3,309 ​ 9,833 ​ 764 ​ 13,906 Time deposits ​ 1,545 ​ (3,357) ​ (211) ​ (2,023) ​ 5,011 ​ 6,746 ​ 3,714 ​ 15,471 Short-term borrowings ​ 2,892 ​ (402) ​ (272) ​ 2,218 ​ (919) ​ (202) ​ 35 ​ (1,086) Other borrowings ​ 4,590 ​ (1,080) ​ (1,126) ​ 2,384 ​ (649) ​ 1,164 ​ (185) ​ 330 Total interest expense ​ 9,101 ​ (11,519) ​ (1,618) ​ (4,036) ​ 6,752 ​ 17,541 ​ 4,328 ​ 28,621 Net interest income ​ $ 17,614 ​ $ 24,012 ​ $ 3,289 ​ $ 44,915 ​ $ 13,872 ​ $ (3,248) ​ $ (2,755) ​ $ 7,869 (1)For purposes of these computations, non-accruing loans are included in the daily average loan amounts outstanding.
Given the performance of the market, the Corporation shifted away from purchases to replace maturities in 2024. The average life of the portfolio decreased from 6.5 years in 2023 to 6.4 years in 2024.
The average life of the portfolio decreased from 6.4 years in 2024 to 5.9 years in 2025.
Accumulated other comprehensive income decreased $5.2 million primarily due to the market value of the securities portfolio, which reflected a decrease in securities pricing. In 2024 dividends declared by the Corporation totaled $1.86 per share.
Total shareholders’ equity increased $101.8 million to $650.9 million at December 31, 2025. Accumulated other comprehensive income increased $45.6 million primarily due to the market value of the securities portfolio, which reflected an increase in securities pricing. In 2025 dividends declared by the Corporation totaled $2.09 per share.
Treasury (1) ​ $ 3,555 2.40 % $ 21,926 3.64 % $ 30,151 3.43 % $ 578,331 2.76 % $ 633,963 Collateralized mortgage obligations (1) ​ 3,778 2.15 % 1,190 1.86 % 6,378 2.98 % 151,680 2.44 % 163,026 States and political subdivisions ​ 5,677 2.89 % 37,074 2.85 % 106,461 2.87 % 246,893 2.60 % 396,105 Collateralized debt obligations ​ — — % — — % 2,896 — % — — % 2,896 TOTAL ​ $ 13,010 2.54 % $ 60,190 3.12 % $ 145,886 2.93 % $ 976,904 2.67 % $ 1,195,990 (1) Distribution of maturities is based on the estimated life of the asset. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 year and less 1 to 5 years 5 to 10 years Over 10 Years 2023 (Dollar amounts in thousands) Balance Rate Balance Rate Balance Rate Balance Rate Total U.S. government sponsored entity mortgage-backed securities and agencies (1) ​ $ 7,654 3.02 % $ 27,010 3.34 % $ 25,843 3.38 % $ 609,701 2.50 % $ 670,208 Collateralized mortgage obligations (1) ​ — — % 6,291 1.83 % 8,637 2.78 % 165,902 2.43 % 180,830 States and political subdivisions ​ 4,766 3.28 % 30,812 2.84 % 95,840 2.75 % 273,679 2.62 % 405,097 Collateralized debt obligations ​ — — % — — % 3,002 — % — — % 3,002 TOTAL ​ 12,420 3.12 % $ 64,113 2.95 % $ 133,322 2.81 % $ 1,049,282 2.52 % 1,259,137 (1) Distribution of maturities is based on the estimated life of the asset.
Treasury (1) ​ $ 2,501 2.65 % $ 16,129 3.23 % $ 38,479 2.94 % $ 555,006 2.87 % $ 612,115 Collateralized mortgage obligations (1) ​ 206 2.24 % 339 1.56 % 3,673 2.94 % 153,880 2.49 % 158,098 States and political subdivisions ​ 6,617 3.37 % 29,758 2.97 % 110,494 3.01 % 229,594 2.77 % 376,463 Collateralized debt obligations ​ — — % — — % 2,850 — % — — % 2,850 TOTAL ​ $ 9,324 3.15 % $ 46,226 3.05 % $ 155,496 2.93 % $ 938,480 2.78 % $ 1,149,526 (1) Distribution of maturities is based on the estimated life of the asset. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 year and less ​ ​ ​ 1 to 5 years ​ ​ ​ 5 to 10 years ​ ​ ​ Over 10 Years ​ ​ ​ 2024 (Dollar amounts in thousands) ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Total U.S. government sponsored entity mortgage-backed securities and agencies (1) ​ $ 3,555 2.40 % $ 21,926 3.64 % $ 30,151 3.43 % $ 578,331 2.76 % $ 633,963 Collateralized mortgage obligations (1) ​ 3,778 2.15 % 1,190 1.86 % 6,378 2.98 % 151,680 2.44 % 163,026 States and political subdivisions ​ 5,677 2.89 % 37,074 2.85 % 106,461 2.87 % 246,893 2.60 % 396,105 Collateralized debt obligations ​ — — % — — % 2,896 — % — — % 2,896 TOTAL ​ 13,010 2.54 % $ 60,190 3.12 % $ 145,886 2.93 % $ 976,904 2.67 % 1,195,990 (1) Distribution of maturities is based on the estimated life of the asset.
Total average interest earning assets increased to $4.87 billion in 2024 from $4.56 billion in 2023. The tax-equivalent yield on these assets increased to 5.55% in 2024 from 5.12% in 2023. Total average interest- 38 Table of Contents bearing liabilities increased to $3.93 billion in 2024 from $3.50 billion in 2023.
Net interest income increased in 2025 to $219.9 million compared to $175.0 million in 2024. Total average interest earning assets increased to $5.25 billion in 2025 from $4.87 billion in 2024. The tax-equivalent yield on these assets increased to 5.92% in 2025 from 5.55% in 2024.
Available-for-sale securities decreased $63.1 million at December 31, 2024, from the previous year. Loans, net increased by $662.4 million to $3.79 billion. Deposits increased $628.8 million while borrowings increased by $39.4 million. Total shareholders’ equity increased $21.1 million to $549.0 million at December 31, 2024.
COMPARISON AND DISCUSSION OF 2025 BALANCE SHEET TO 2024 The Corporation’s total assets increased 3.5% or $195.8 million at December 31, 2025, from a year earlier. Available-for-sale securities decreased $46.5 million at December 31, 2025, from the previous year. Loans, net increased by $216.9 million to $4.01 billion. Deposits decreased $167.8 million while borrowings increased by $265.5 million.
Return on average assets at December 31, 2024 decreased 26.98% to 0.92% compared to 1.26% at December 31, 2023. The primary components of income and expense affecting net income are discussed in the following analysis.
In 2024 reduced net income was primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as described in those respective sections in the following pages. Return on average assets at December 31, 2025 increased 54.35% to 1.42% compared to 0.92% at December 31, 2024.
Removed
There was a $100 thousand increase in the allowance for unfunded commitments. The Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank. Additionally, the increase in allowance was related to one previously identified credit, 37 Table of Contents reflecting further deterioration in collateral values in the year.
Added
RESULTS OF OPERATIONS - SUMMARY FOR 2025 COMPARISON OF 2025 TO 2024 Net income for 2025 was $79.2 million, or $6.68 per share versus $47.3 million, or $4.00 per share for 2024. The increase in 2025 net income is primarily due to organic growth.
Removed
The overall effective tax rate in 2024 of 17.3% increased as compared to a 2023 effective rate of 16.3%. COMPARISON OF 2023 TO 2022 Net income for 2023 was $60.7 million, or $5.08 per share versus $71.1 million, or $5.82 per share for 2022.
Added
The increase in non-interest expenses is primarily due to a full year of operating expenses from the 2024 acquisition. INCOME TAXES The Corporation’s federal income tax provision was $19.5 million in 2025 compared to $9.9 million in 2024. The overall effective tax rate in 2025 of 19.8% increased as compared to a 2024 effective rate of 17.3%.
Removed
The decrease in 2023 net income is primarily due to increased provision for credit losses, as well as decreased non-interest income and increased non-interest expenses . ​ Net interest income increased $2.3 million in 2023 compared to 2022.
Added
Pretax income for the year ended December 31, 2025, was significantly higher than pretax income for the same period in 2024. Since our permanent differences remained similar income was the driving factor for the increase in effective tax rate.
Removed
The change in non-interest income from 2022 to 2023 was primarily driven by a $4.0 million legal settlement received in February 2022, and a $2.5 million bank owned life insurance mortality payment. The Corporation does not expect these items to reoccur.
Added
Given the performance of the market, the Corporation shifted away from purchases to replace maturities in 2025. In 2025 the Corporation recorded $4.6 million of losses associated with an investment portfolio restructuring in which $80 million of securities were sold and reinvested at an approximately two percent higher yield.
Removed
The year-over-year changes in non-interest expenses are consistent with the rate of increases in prior years and considered normal with the growth of our business. The provision for income taxes decreased $4.8 million from 2022 to 2023 and the effective tax rate decreased to 16.3% in 2023 from 19.0% in 2022.
Removed
The decrease in income tax expense is due to a $1 million increase in tax credit investments, as well as increase in tax exempt interest income. COMPARISON AND DISCUSSION OF 2024 BALANCE SHEET TO 2023 The Corporation’s total assets increased 14.6% or $709.2 million at December 31, 2024, from a year earlier.
Removed
The decrease in nonperforming loans is due to a commercial relationship that was downgraded in 2023. That relationship was subsequently charged off in 2024, thus reducing the balance of non-performing loans.
Removed
The increase is due to the acquisition of SimplyBank. ​ The Corporation estimates that uninsured deposits (1) totaled $980.5 million, or 21% of total deposits, at December 31, 2024, compared to $938.9 million, or 23%, at December 31, 2023.

Other THFF 10-K year-over-year comparisons