What changed in this filing

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Item 1. Business

2025-02-20 compared with 2024-02-22 · 53 added, 40 removed, 327 unchanged (22% of the section changed)

12 unchanged sentences

First Financial works with businesses to meet their shorter-term working capital needs while also providing long-term financing for their business plans.

First Financial also offers lease and equipment financing through two wholly-owned subsidiaries of the Bank, First Financial Equipment Finance LLC (First Equipment Finance) and Summit Funding Group, Inc.

First Financial also offers lease and equipment financing primarily through its wholly-owned subsidiary Summit Funding Group, Inc.

(Summit) (discussed below).

16 unchanged sentences

The Bank sells these loans with both servicing retained and servicing released, depending on pricing and other market conditions.

The credit underwriting standards adhere to a required level of

documentation, verifications, valuation and overall credit performance of the borrower.

The underwriting of these loans includes an evaluation of these and other pertinent factors prior to the extension of credit.

The credit underwriting standards adhere to a required level of documentation, verifications, valuation and overall credit performance of the borrower.

The underwriting of these loans

includes an evaluation of these and other pertinent factors prior to the extension of credit.

These underwriting standards increase the marketability and address the credit risk associated with the loans.

8 unchanged sentences

Home equity lines of credit are generally governed by the same lending policies and subject to the same credit risk mitigants as described previously for residential real estate loans.

Bannockburn Global Forex (Bannockburn), a division of the Bank, is an industry-leading capital markets firm based in Cincinnati, Ohio, that provides transactional currency payments, foreign exchange hedging and other advisory products to closely held enterprises, financial sponsors and downstream financial institutions across the United States.

Bannockburn Global Forex (Bannockburn), a division of the Bank, is an industry-leading capital markets firm based in Cincinnati, Ohio, that provides transactional currency payments, foreign exchange hedging, commodities hedging and other advisory products to closely held enterprises, financial sponsors and downstream financial institutions across the United States.

Their primary focus is on small- and middle-market clients that have a need for tailored foreign exchange solutions.

Bannockburn has a nationwide presence with offices in 10 locations throughout the U.S.

Agile Premium Finance, a division of the Bank, is among industry leaders in the premium finance lending space and is active in all 50 states.

Headquartered in Lincolnshire, IL, Agile originates commercial loans for the payment of annual premiums for property and casualty insurance for businesses.

Agile loans are secured by the unearned premium of the insurance policies and have an average original term of approximately ten months.

Information regarding statistical disclosure required by the Securities and Exchange Commission’s Industry Guide 3 is included in "Table 4 - Statistical Information" of First Financial's 2024 Annual Report to Shareholders for the year ended December 31, 2024, and is incorporated herein by reference.

6 unchanged sentences

Employee Wellbeing .

A key component of the Company’s strategic intent is “Investing in our People.” The company firmly believes that wellbeing is directly linked to engagement and engagement is a key pillar to the overall success.

Investing in our people is a key part of our culture at First Financial and our programs provide tools for our employees to invest in their health and wellbeing.

The Company firmly believes that wellbeing is directly linked to engagement and engagement is a key pillar in our overall success.

First Financial invests in employees and their families through various programs.

1 unchanged sentence

physical, financial, social, community and purpose.

The program provides employees with incentives (such as health savings account contributions, paid time off and reimbursements) in exchange for voluntary participation in a range of activities, including an annual physical, health-risk assessment, webinar participation and enrollment in Company sponsored fitness activities.

The program provides employees with incentives (such as health savings account contributions, paid time off and reimbursements) in exchange for voluntary participation in a range of activities, including an annual physical, health-risk assessment, webinar participation, community service, financial assistance programs and enrollment in Company sponsored fitness activities.

In 2024, 59% of eligible employees qualified for benefits under the Wellbeing Program.

Additionally, First Financial partners with an independent primary care clinic that offers no or low cost preventive and routine care to associates and families.

Compensation and Benefits.

First Financial offers employees competitive short-term and long-term compensation, a comprehensive set of benefits including health, dental and vision insurance, free or low-cost access to an independent provider of primary care clinics, life and disability programs, parental leave, product discounts and various expense reimbursement programs.

First Financial also provides all eligible employees with a 5% annual allocation to the First Financial Pension Plan of eligible annual pay.

The pension allocation is 100% company-paid, fully-vested and portable.

The Bank regularly reviews it’s total rewards practices to ensure compensation is equitable, taking into consideration such factors as experience, education, performance and market data.

First Financial offers employees competitive short-term and long-term compensation, a comprehensive set of benefits including health, dental and vision insurance, free or low-cost access to an independent provider of primary care clinics and behavioral health services, life and disability programs, paid time off, parental leave, product discounts and various expense reimbursement programs.

First Financial also provides all eligible employees with an annual allocation to the First Financial Pension Plan of 5% of eligible annual pay.

The pension allocation is 100% company-paid,

fully-vested and portable.

The Bank regularly reviews its total rewards practices to ensure compensation is equitable, taking into consideration such factors as experience, education, performance and market data.

Employee Engagement.

First Financial believes that talented and engaged employees are critical for the success of the Company, its subsidiaries, its associates and the clients and communities it serves.

First Financial launched its engagement strategy in 2020, partnering with a third party to create a culture of highly engaged employees by measuring employee engagement, providing manager training and coaching and developing action plans to deepen engagement.

In July 2023 First Financial launched its fourth all-associate engagement survey.

The results were positive and confirmed that engagement is strongly woven into the culture.

In July 2024 First Financial launched its fifth all-associate engagement survey.

The Bank sets clear expectations of managers for high-levels of accountability and to foster engagement principles.

1 unchanged sentence

The engagement strategy includes coaching and training, intentional action plans, sharing success stories, and highlighting engagement champions.

The 2023 survey results showed a marked increase in engagement from the survey conducted in 2022.

The 2024 survey results showed a marked increase in engagement from the survey conducted in 2023, reinforcing the belief that employee engagement is strongly woven into the culture.

As in prior years, teams throughout the Bank continue to engage in team huddles, manager and team training, town halls, mentoring, career and leadership development programs, and updated action plans to continue to drive engagement across the Company.

1 unchanged sentence

In conjunction with senior management and town hall meetings, additional pulse surveys were completed which provided insight into our associates’ needs, shaping future engagement strategies.

Diversity, Equity and Inclusion.

First Financial prioritizes diversity, equity and inclusion (DEI) as an employer, a financial institution and as a member of the communities in which we operate.

The DEI Committee of the Board provides guidance and oversight to First Financial’s executive committee, the Diversity, Equity and Inclusion team, and the First Financial Diversity Council, which is comprised of 10 associates from across our footprint.

Respectful Workplace.

First Financial strives to maintain a workplace that fosters our culture and aligns with our values.

We expect that associates treat each other in a manner consistent with our culture and our policies, whether the individual is a fellow associate, member of management, customer, vendor or visitor to our premises.

We seek out and celebrate differing opinions, expertise and experiences of our employees.

First Financial supports eight associate-led Business Resource Groups (BRGs) designed to facilitate networking and leadership development.

BRGs meet regularly throughout the year and host a variety of in person and virtual engagement opportunities.

First Financial continues to develop our DEI strategy, which includes goals and action plans designed to increase associate and management diversity.

A listing of each of First Financial’s subsidiaries can be found in Exhibit 21 to this Form 10-K.

Business Combinations

In December 2021, the Company completed its acquisition of Summit Funding Group, Inc.

and its subsidiaries.

Summit was a privately held, full service, equipment financing company that originates, purchases, sells and services equipment leases to commercial businesses in the United States and Canada.

Upon completion of the transaction, Summit became a subsidiary of the Bank and continues to operate as Summit Funding Group, taking advantage of its existing brand recognition within the equipment financing industry.

Pursuant to the purchase agreement, First Financial agreed to acquire all of the issued and outstanding equity securities of Summit for aggregate consideration of approximately $127.1 million consisting of $113.5 million in cash and $10.0 million of First Financial common stock, and a $3.6 million earn-out payment.

On February 29, 2024, First Financial acquired Agile Premium Finance for $96.9 million in an all cash transaction.

Agile originates commercial loans for the payment of annual property and casualty insurance for businesses.

The loans are secured by the unearned premium of the policies and have an average term of approximately ten months.

Upon completion of the transaction, Agile became a division of the Bank and continues to operate as Agile Premium Finance, taking advantage of its existing brand recognition within the insurance premium financing industry.

First Financial acquired $97.8 million of assets and $2.7 million of liabilities in the transaction, resulting in $1.8 million of goodwill.

Acquisition accounting adjustments are considered preliminary at December 31, 2024.

Operating results from the Agile acquisition have been included in the Consolidated Statements of Income since the acquisition date

Acquisition accounting adjustments are considered preliminary at December 31, 2024, and are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available.

The measurement period for the Agile acquisition ends in February 2025.

Market and Competitive Information

9 unchanged sentences

Smaller than super-regional and multi-national bank holding companies, First Financial believes that it can meet the needs of its markets through a local decision-making process and that it is better positioned to compete than smaller community banks that may have size or geographic limitations.

First Financial’s targeted customers include individuals and small to medium sized businesses within the Bank's geographic

First Financial’s targeted customers include individuals and small to medium sized businesses within the Bank's geographic footprint.

Through its diversified delivery systems of banking centers, ATMs, internet banking and telephone-based transactions, First Financial is able to meet the needs of its customers in an ever-changing marketplace.

6 unchanged sentences

It is anticipated that competition from other financial and non-financial services entities will continue and, for certain products and services, intensify.

First Financial also competes with Financial Technology Companies (“FinTechs”) which provide similar services to financial institutions while operating predominantly online and without the use of physical branch locations in a customer’s market area.

Digital assets and cryptocurrencies also operate as competitors, as many of these digital assets and cryptocurrencies seek to provide payment functionality.

Many customers either hold or may consider holding money that would typically be held in deposit accounts or investments in the form of digital assets or cryptocurrencies, which serves as competition for deposits.

Supervision and Regulation

48 unchanged sentences

The Federal Reserve Board has adopted risk-based capital guidelines for bank holding companies as well as state banks that are members of a Federal Reserve Bank.

The guidelines provide a systematic analytical framework that makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account

in evaluating capital adequacy and incentivizes to holding liquid, low-risk assets.

Capital levels as measured by these standards are also used to categorize financial institutions for purposes of certain prompt corrective action regulatory provisions.

21 unchanged sentences

These deposit-funding limitations can have an effect on the bank’s liquidity.

successively lower capital category, an insured depository institution is subject to additional restrictions.

At each successively lower capital category, an insured depository institution is subject to additional restrictions.

Under-capitalized banks are required to take specified actions to increase their capital or otherwise decrease the risks to the DIF.

21 unchanged sentences

Under Ohio law, the Bank may pay a dividend from surplus only with the approval of First Financial (as the sole shareholder of the Bank) and the approval of the ODFI.

Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.

Payment of dividends by the

Bank may be restricted at any time at the discretion of its regulatory authorities, if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.

The ability of First Financial to obtain funds for the payment of dividends, for the servicing of indebtedness and for other cash requirements is largely dependent on the amount of dividends that may be declared by the Bank.

2 unchanged sentences

The policy statement provides that, as a matter of prudent banking, a bank holding company should not maintain a rate of cash dividends unless its net income available to common shareholders over the past year has been sufficient to fully fund the dividends, and the prospective rate of earnings retention appears to be consistent with the bank holding company’s capital needs, asset quality, and overall financial condition.

Accordingly, a bank holding

company generally should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing.

Accordingly, a bank holding company generally should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing.

Under certain circumstances, a bank holding company must provide notice to the Federal Reserve Board of an intended dividend payment, to which the Federal Reserve Board might object if it determines the payment would be an unsafe or unsound practice.

19 unchanged sentences

The revised assessment rate schedules are intended to increase the likelihood that the DRR reaches the statutory minimum level of 1.35% by September 30, 2028.

In the FDIC’s most recent semiannual update for the amended restoration plan in November 2023, the FDIC noted that increased loss provisions associated with the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023 that reduced the DIF balance, coupled with strong growth in insured deposits, resulted in the reserve ratio declining 15 basis points from 1.25% as of December 31, 2022 to 1.10% as of June 30, 2023.

Despite the decline in the reserve ratio, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028.

In the FDIC’s most recent semiannual update for the amended restoration plan in October 2024, the FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028.

As a result, the FDIC staff recommended no changes to the amended restoration Plan and all scheduled assessment rates were maintained.

1 unchanged sentence

The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.

The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024.

For the quarter ended December 31, 2022, the Bank reported $5.3 billion in uninsured deposits and recorded a $0.9 million expense in the fourth quarter of 2023 reflecting the full assessment.

The FDIC began collecting the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods,

beginning with the first quarter of 2024.

The Bank recorded $0.2 million and $0.9 million of expense related to the special assessment in 2024 and 2023, respectively.

As of December 31, 2024, the Bank reported $5.9 billion in uninsured deposits.

As insurer, the FDIC is authorized to conduct examinations of and to require reporting by DIF-insured institutions.

2 unchanged sentences

Banks are subject to regular examination to ensure compliance with federal statutes and regulations applicable to their business, including consumer protection statutes and implementing regulations.

The Dodd-Frank Act established the CFPB, which has

extensive regulatory and enforcement powers over consumer financial products and services.

The Dodd-Frank Act established the CFPB, which has extensive regulatory and enforcement powers over consumer financial products and services.

As a bank with total assets in excess of $10 billion, the Bank is primarily examined by the CFPB with respect to consumer protection laws and regulations.

22 unchanged sentences

and (iv) establish related definitions, reporting, and recordkeeping requirements.

However, due to continuing appellate litigation regarding the constitutionality of the CPFB’s funding structure, which stems, in part, from legal challenges to the Small Dollar Rule, the effective date for nationwide compliance with the Final Small Dollar Rule remains uncertain at this time.

The effective date for nationwide compliance with the Final Small Dollar Rule is March 30, 2025.

Separately, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

8 unchanged sentences

The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027;

however, these dates are likely to change due to ongoing litigation regarding the CRA rule changes.

First Financial cannot predict the impact the changes to the CRA will have on its operations at this time.

27 unchanged sentences

Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.

The Bank has established policies and procedures that it considers to be in compliance with the requirements and obligations of OFAC and the laws it regulates.

Incentive Compensation

17 unchanged sentences

The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the financial institution’s operations after a cyber-attack involving destructive malware.

A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cybersecurity-attack.

A financial institution is also expected to develop appropriate processes to enable recovery of data and business

operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cybersecurity-attack.

If First Financial fails to observe the regulatory guidance, it could be subject to various regulatory sanctions, including financial penalties.

13 unchanged sentences

In the ordinary course of business, First Financial relies on electronic communications and information systems to conduct its operations and to store sensitive data.

First Financial employs an in-depth, layered, defensive approach that leverages people, processes, encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.

First Financial employs an in-depth, layered, defensive approach that leverages people, processes, third-party service providers, encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.

First Financial utilizes a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as report on any suspected advanced persistent threats.

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business