35 unchanged sentences
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.
−Removed: The qualitative amount of the reserve decreased $44 thousand to $11.0 million.
+Added: 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.
−Removed: There was a $100 thousand decrease in the allowance for unfunded commitments.
+Added: There was a $100 thousand increase in the allowance for unfunded commitments.
+Added: The Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank.
+Added: Additionally, the increase in allowance was related to one previously identified credit,
+Added: reflecting further deterioration in collateral values in the year.
See additional discussion of ACL in the Allowance for Credit Losses section below.
23 unchanged sentences
Net income for 2024 was $47.3 million, or $4.00 per share versus $60.7 million, or $5.08 per share for 2023.
−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, as described in those respective sections in the following pages.
+Added: The decrease in 2024 net income is primarily due to increased provision for credit losses associated with the acquisition of SimplyBank, as well as non-interest expenses, which included increased operating expenses, as a result of the acquisition and expenses associated with the acquisition, as described in those respective sections in the following pages.
Return on average assets at December 31, 2024 decreased 26.98% to 0.92% compared to 1.26% at December 31, 2023.
3 unchanged sentences
Net interest income increased in 2024 to $175.0 million compared to $167.3 million in 2023.
−Removed: Total average interest earning assets decreased to $4.56 billion in 2023 from $4.80 billion in 2022.
+Added: 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.
−Removed: Total average interest-bearing liabilities decreased to $3.50 billion in 2023 from $3.61 billion in 2022.
+Added: Total average interest-
+Added: bearing liabilities increased to $3.93 billion in 2024 from $3.50 billion in 2023.
The average cost of these interest-bearing liabilities increased to 2.28% in 2024 from 1.74% in 2023.
−Removed: The net interest margin increased from 3.54% in 2022 to 3.78% in 2023.
+Added: The net interest margin decreased from 3.78% in 2023 to 3.71% in 2024.
Earning asset yields increased 43 basis points while the rate on interest-bearing liabilities increased by 54 basis points.
52 unchanged sentences
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.
−Removed: The negative provision for the first quarter of 2022 was the result of several factors.
−Removed: The first was the annual model recalibration.
−Removed: Each year, in the first quarter, management reviews each model variable to determine if adjustments are necessary to improve the model’s predictability.
−Removed: In the first quarter 2022 the delay periods were shortened to pick up more recent losses.
−Removed: Also, the qualitative factor maximum scorecard ranges for certain cohorts were reduced, which reduced the reserve.
−Removed: Secondly, management removed two qualitative factors that were deemed no longer applicable.
−Removed: The first was related to acquisition uncertainty, which management believes to have seasoned adequately that it was no longer warranted.
−Removed: The second was related to the CECL model and the related uncertainty.
−Removed: The uncertainty surrounded the newness of the model and potential regulatory scrutiny.
−Removed: Following two exam cycles, management elected to remove the factor.
−Removed: Also, during the quarter, historical loss rates continued to decline, which lowers the required reserve.
−Removed: The historical loss rate declined in most segments.
+Added: The Corporation recorded $5.5 million in Day 2 provision on non-PCD loans acquired from SimplyBank.
+Added: 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.
+Added: No further losses are expected on this credit.
Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate.
−Removed: Net charge-offs for 2023 were $7.3 million as compared to $6.5 million for 2022 and $2.6 million for 2021.
−Removed: Non-accrual loans, increased to $23.6 million at December 31, 2023 from $8.5 million at December 31, 2022.
−Removed: The increase in non-accrual loans is due to a commercial relationship that was downgraded.
−Removed: Loans past due 90 days and still on accrual decreased to $960 thousand compared to $1.1 million at December 31, 2022.
−Removed: On July 12, 2022, the Corporation sold seven classified non-farm nonresidential commercial loans, which were acquired in the two acquisitions in 2019 and 2021, with a total principal balance of $14.9 million.
−Removed: The net recovery on the sale of $361 thousand includes the charge-off of the seven loans of $2,145 thousand, netted by the $2,072 thousand reserve on those loans, previously
−Removed: charged off in the period, and the $434 thousand unamortized discount remaining from the acquisitions.
−Removed: As the related charge offs were previously reserved for and related to acquired loans, the increase in net charge offs for 2022 does not have a significant impact on the future expected losses.
+Added: 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.
+Added: Non-accrual loans, decreased to $11.5 million at December 31, 2024 from $23.6 million at December 31, 2023.
+Added: 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
−Removed: Non-interest income of $42.7 million decreased $4.0 million from the $46.7 million earned in 2022.
−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.
−Removed: The Corporation does not expect this item to reoccur.
+Added: Non-interest income of $42.8 million remained stable compared to the $42.7 million earned in 2023.
NON-INTEREST EXPENSES
Non-interest expenses increased to $144.4 million in 2024 from $130.2 million in 2023.
−Removed: The increase in non-interest expenses is consistent with the rate of increases in prior years and considered normal with the growth of our business.
+Added: 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.
The Corporation’s federal income tax provision was $9.9 million in 2024 compared to $11.8 million in 2023.
−Removed: The overall effective tax rate in 2023 of 16.3% decreased as compared to a 2022 effective rate of 19.0%.
−Removed: The decrease in effective tax rate is due to a $1 million increase in tax credit investments, as well as an increase in tax exempt interest income.
+Added: 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.
−Removed: The increase in 2022 net income is primarily due to increased interest rates and growth in earning assets .
+Added: 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.
−Removed: The provision for credit losses decreased $4.5 million from $2.5 million in 2021 to a negative provision of $2.0 million in 2022.
−Removed: Non-interest income increased $4.6 million and non-interest expenses increased $8.6 million.
+Added: 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.
+Added: Non-interest income decreased $4.0 million and non-interest expenses increased $4.2 million.
The change in non-interest income from 2022 to 2023 was primarily driven by a $4.0 million legal settlement received in February 2022, and a $2.5 million bank owned life insurance mortality payment.
The Corporation does not expect these items to reoccur.
−Removed: The year-over-year changes in non-interest expenses are, in part, impacted by the acquisition of Hancock Bancorp in the fourth quarter of 2021.
−Removed: The provision for income taxes increased $4.1 million from 2021 to 2022 and the effective tax rate decreased to 19.0% in 2022 from 19.2% in 2021.
−Removed: The increase in income tax expense is primarily due to the overall increase in net income before income taxes.
+Added: 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.
+Added: 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.
+Added: 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
−Removed: The Corporation’s total assets decreased 2.8% or $138.1 million at December 31, 2023, from a year earlier.
+Added: The Corporation’s total assets increased 14.6% or $709.2 million at December 31, 2024, from a year earlier.
Available-for-sale securities decreased $63.1 million at December 31, 2024, from the previous year.
Loans, net increased by $662.4 million to $3.79 billion.
−Removed: Deposits decreased $278.8 million while borrowings increased by $95.3 million.
+Added: 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.
−Removed: Accumulated other comprehensive income increased $12.9 million primarily due to the market value of the securities portfolio, which reflected a slight increase in securities pricing.
+Added: 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.
3 unchanged sentences
During 2024 the portfolio’s balance decreased by 5.0%.
−Removed: Given the performance of the
−Removed: market, the Corporation shifted away from purchases to replace maturities in 2023.
+Added: 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.
18 unchanged sentences
(1) Distribution of maturities is based on the estimated life of the asset.
−Removed: Net unrealized gain/loss on available for sale securities increased $14.8 million from a net unrealized loss of $168.2 million in 2022 to a net unrealized loss of $153.4 million in 2023.
+Added: 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.
9 unchanged sentences
Variable interest rates
−Removed: Commercial Real Estate represents $1.3 million of total exposure as of December 31, 2023, and is within regulatory guidance.
+Added: Commercial Real Estate represents $1.8 billion of total exposure as of December 31, 2024, and is within regulatory guidance.
This exposure is well diversified by geography, real estate type, and industry designation.
27 unchanged sentences
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.
−Removed: Non-performing loans of $24.6 million at December 31, 2023 increased from $9.6 million at December 31, 2022.
−Removed: The increase in nonperforming loans is due to a commercial relationship that was downgraded.
+Added: Non-performing loans of $13.3 million at December 31, 2024 decreased from $24.6 million at December 31, 2023.
+Added: The decrease in nonperforming loans is due to a commercial relationship that was downgraded in 2023.
+Added: That relationship was subsequently charged off in 2024, thus reducing the balance of non-performing loans.
The table below presents the allocation of the allowance to the loan portfolios at year-end.
31 unchanged sentences
Other time deposits
−Removed: Deposits decreased 6.86% to $4.1 billion at September 30, 2023 compared to December 31, 2022.
−Removed: The decline was in part driven by a decline in interest bearing public funds checking, and a decline in institutional deposits as a result of a pricing decision.
−Removed: Brokered time deposits decreased to $747 thousand at December 31, 2023, from $8.5 million at December 31, 2022.
−Removed: The Corporation estimates that uninsured deposits (1) totaled $938.9 million, or 23% of total deposits, at December 31, 2023, compared to $1.27 billion, or 29%, at December 31, 2022.
+Added: Deposits increased 7.30% to $4.4 billion at December 31, 2024 compared to December 31, 2023.
+Added: The increase is due to the acquisition of SimplyBank.
+Added: The Corporation estimates that uninsured deposits (1) totaled $980.5 million, or 21% of total deposits, at December 31, 2024, compared to $938.9 million, or 23%, at December 31, 2023.
The maturities of certificates of deposit of more than $100 thousand outstanding at December 31, 2024, are summarized as follows:
6 unchanged sentences
OTHER BORROWINGS
−Removed: Advances from the Federal Home Loan Bank increased to $108.6 million in 2023 compared to $9.6 million in 2022.
+Added: Advances from the Federal Home Loan Bank decreased to $7.3 million in 2024 compared to $108.6 million in 2023.
+Added: First Financial Corporation borrowed $25 million on a note payable in June 2024 for the acquisition of SimplyBank.
+Added: 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.
30 unchanged sentences
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.
−Removed: Given a 100 basis point decrease in rates, net interest income would increase 0.74% over the next 12 months and decrease 2.08% over the following 12 months.
+Added: Given a 100 basis point decrease in rates, net interest income would increase 4.07% over the next 12 months and increase 0.68% over the following 12 months.
These estimates assume all rate changes occur overnight and management takes no action as a result of this change.
27 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.