What changed in this filing

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Item 1. Business

2022-03-09 compared with 2021-03-11 · 33 added, 25 removed, 382 unchanged (13% of the section changed)

56 unchanged sentences

(the “Bank”) is the largest bank in Vigo County, Ind.

It operates ten full-service banking branches within the county;

It operates nine full-service banking branches within the county;

three in Clay County, Ind.;

1 unchanged sentence

one in Greene County, Ind.;

two in Knox County, Ind.;

four in Parke County, Ind.;

one in Putnam County, Ind., four in Sullivan County, Ind.;

one in Knox County, Ind.;

two in Parke County, Ind.;

one in Putnam County, Ind., three in Sullivan County, Ind.;

one in Vanderburgh, County, Ind.;

four in Vermillion County, Ind.;

three in Vermillion County, Ind.;

four in Champaign County, Illinois;

one in Clark County, Ill.;

three in Coles County, Ill.;

two in Coles County, Ill.;

two in Crawford County, Ill.;

two in Franklin County, Ill.;

one in Franklin County, Ill.;

one in Jasper County, Ill.;

3 unchanged sentences

two in Marion County, Ill.;

three in McLean County, Ill.;

two in Richland County, Ill.;

two in McLean County, Ill.;

one in Richland County, Ill.;

six in Vermilion County, Ill.;

one in Wayne County, Ill;

two in Calloway County, Kentucky;

one in Breckinridge County, Kentucky;

two 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;

1 unchanged sentence

one in Trigg County, Ky;

two in Warren County, Ky;

three in Cheatham County, Tennessee;

1 unchanged sentence

and three in Montgomery County, Tn.

There are three loan production offices, one in Marion County, Indiana;

There are four loan production offices, one in Hamilton County, Indiana;

one in Vanderburgh County, Indiana;

one in Rutherford County, Tennessee;

5 unchanged sentences

located in Las Vegas, Nevada is a captive insurance subsidiary which insures various liability and property damage policies for First Financial Corporation subsidiaries.

JBMM, LLC, Heritage USA Title LLC, and Fort Webb LP, LLC are all located in Christian County, Ky.

First Financial Bank and Morris Plan face 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, and middle and western Tennessee.

The Corporation's business activities are centered in west-central Indiana, east-central Illinois, western Kentucky, and central Tennessee.

The Corporation has no foreign activities other than periodically investing available funds in time deposits held in foreign branches of domestic banks.

27 unchanged sentences

and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020.

In response to this section of the CARES Act, the federal banking agencies issued a revised interagency statement on April 7, 2020 that, in consultation with the Financial Accounting Standards Board, confirmed that for loans not subject to section 4013, short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not troubled debt restructurings under ASC Subtopic 310-40.

COVID-19 to borrowers who were current prior to any relief are not troubled debt restructurings under ASC Subtopic 310-40.

This includes short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant.

29 unchanged sentences

These include, for example, the requirement that mortgage servicing rights, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.

Under the former capital standards, the effects of accumulated other comprehensive income items included in capital were

excluded for the purposes of determining regulatory capital ratios.

Under the former capital standards, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios.

Under the Basel III Capital Rules, the effects of certain accumulated other comprehensive items are not excluded;

82 unchanged sentences

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.

In addition, the total amount of outstanding loans and extensions of credit to any borrower outstanding at one time and fully secured by readily marketable collateral may not exceed 10 percent of the unimpaired capital and unimpaired surplus of the bank (this limitation is separate from and in addition to the above limitation).

In addition, the total amount of outstanding loans and extensions of credit to any borrower outstanding at one time and fully secured by readily marketable collateral may not exceed

10 percent of the unimpaired capital and unimpaired surplus of the bank (this limitation is separate from and in addition to the above limitation).

If a loan is secured by United States obligations, such as treasury bills, it is not subject to this legal lending limit.

12 unchanged sentences

The FDIC will determine the risk category based on the institution’s capital position (well capitalized, adequately capitalized, or undercapitalized) and supervisory condition (based on exam reports and related information provided by the institution’s primary federal regulator).

The Bank paid a total FDIC assessment of $296 thousand and Morris Plan paid a total FDIC assessment of $20 thousand in 2020.

The Bank paid a total FDIC assessment of $1.3 million and Morris Plan paid a total FDIC assessment of $27 thousand in 2021.

In addition to the FDIC insurance premiums, the Bank and the Morris Plan are 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.

43 unchanged sentences

An institution may be downgraded to, or deemed to be in, a capital category that is lower than indicated by its capital ratios if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory examination rating with respect to certain matters.

A bank’s capital category is determined solely for the purpose of applying prompt corrective action regulations, and the capital category may not constitute an accurate representation of the bank’s overall financial condition or prospects for other purposes.

A bank’s capital category is determined solely for the purpose of applying prompt corrective action regulations, and the capital category may not

constitute an accurate representation of the bank’s overall financial condition or prospects for other purposes.

The FDIA generally prohibits a depository institution from making any capital distributions (including payment of a dividend) or paying any management fee to its parent holding company if the depository institution would thereafter be “undercapitalized.” “Undercapitalized” institutions are subject to growth limitations and are required to submit a capital restoration plan.

2 unchanged sentences

The bank holding company must also provide appropriate assurances of performance.

necessary) to bring the institution into compliance with all capital standards applicable with respect to such institution as of the time it fails to comply with the plan.

The aggregate liability of the parent holding company is limited to the lesser of (i) an amount equal to 5.0% of the depository institution’s total assets at the time it became undercapitalized and (ii) the amount which is necessary (or would have been necessary) to bring the institution into compliance with all capital standards applicable with respect to such institution as of the time it fails to comply with the plan.

If a depository institution fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.”

8 unchanged sentences

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 is not adopting the capital transition relief.

The Corporation did not adopt the capital transition relief.

Incentive Compensation .

6 unchanged sentences

These three principles are incorporated into the proposed joint compensation regulations under the Dodd-Frank Act, discussed above.

The Federal Reserve Board will review, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Corporation, that are not “large, complex banking organizations.” These reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.

The Federal Reserve Board will review, as part of the regular, risk-focused examination process, the incentive compensation

arrangements of banking organizations, such as the Corporation, that are not “large, complex banking organizations.” These reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.

The findings of the supervisory initiatives will be included in reports of examination.

3 unchanged sentences

The Dodd-Frank Act contains additional provisions that affect consumer mortgage lending.

First, it significantly expands underwriting requirements applicable to loans secured by 1-4 family

residential real property and augments federal law combating predatory lending practices.

First, it significantly expands underwriting requirements applicable to loans secured by 1-4 family residential real property and augments federal law combating predatory lending practices.

In addition to numerous new disclosure requirements, the Dodd-Frank Act imposes new standards for mortgage loan originations on all lenders, including banks and savings associations, in an effort to encourage lenders to verify a borrower’s ability to repay, while also establishing a presumption of compliance for certain “qualified mortgages.” Most significantly, the new standards limit the total points and fees that the Bank and/or a broker may charge on conforming and jumbo loans to 3% of the total loan amount.

21 unchanged sentences

Current federal law also requires banks, among other things to make deposited funds available within specified time periods.

In addition, with certain exceptions, a bank and a subsidiary may not extend credit, lease or sell property or furnish any services or fix or vary the consideration for the foregoing on the condition that (i) the customer must obtain or provide some additional credit, property or services from, or to, any of them, or (ii) the customer may not obtain some other credit, property or service from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of credit extended.

services from, or to, any of them, or (ii) the customer may not obtain some other credit, property or service from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of credit extended.

Interest and other charges collected or contracted by the Bank or Morris Plan are subject to state usury laws and federal laws concerning interest rates.

40 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