What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-08-07 · 155 added, 141 removed, 1045 unchanged (22% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands, except per share data)

September 30,

Cash and due from banks

34 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

INTEREST INCOME:

36 unchanged sentences

Three Months Ended

June 30, 2025, and 2024

September 30, 2025, and 2024

(Dollar amounts in thousands, except per share data)

1 unchanged sentence

Income/(Loss)

Balance, April 1, 2024

Balance, July 1, 2024

Other comprehensive income

1 unchanged sentence

Cash dividends, $ .45 per share

Balance, June 30, 2024

Balance, April 1, 2025

Balance, September 30, 2024

Balance, July 1, 2025

Other comprehensive income

1 unchanged sentence

Cash dividends, $ .51 per share

Balance, June 30, 2025

Balance, September 30, 2025

See accompanying notes.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Six Months Ended

June 30, 2025, and 2024

Nine Months Ended

September 30, 2025, and 2024

(Dollar amounts in thousands, except per share data)

3 unchanged sentences

Cumulative change in accounting principle ASU 2023-02

Other comprehensive income (loss)

Other comprehensive income

Omnibus Equity Incentive Plan

1 unchanged sentence

Cash dividends, $ .90 per share

Balance, June 30, 2024

Balance, September 30, 2024

Balance, January 1, 2025

3 unchanged sentences

Cash dividends, $ 1.53 per share

Balance, June 30, 2025

Balance, September 30, 2025

See accompanying notes.

2 unchanged sentences

(Dollar amounts in thousands, except per share data)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Provision for credit losses

Securities (gains)/losses

Securities (gains)

Depreciation and amortization

1 unchanged sentence

Gain on sale of mortgage loans

(Gain) Loss on sale of other real estate

(Gain) on sale of other real estate

NET CASH FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales of securities available-for-sale

Calls, maturities and principal reductions on securities available-for-sale

4 unchanged sentences

Purchase of restricted stock

Cash received from acquisitions, net

Proceeds from sales of other real estate owned

5 unchanged sentences

Dividends paid

Purchase of treasury stock

Purchase of treasury shares

Proceeds from other borrowings

1 unchanged sentence

( 1,707,793 )

( 1,604,877 )

NET CASH FROM FINANCING ACTIVITIES

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accompanying June 30, 2025 and 2024 consolidated financial statements are unaudited.

The accompanying September 30, 2025 and 2024 consolidated financial statements are unaudited.

The December 31, 2024 consolidated financial statements are as reported in the First Financial Corporation (the “Corporation”) 2024 annual report.

11 unchanged sentences

These shares vest over 3 years in increments of 33 %, 33 %, and 34 % respectively.

For the six months ended 2025 and 2024, 25,134 and 27,803 shares were awarded, respectively.

For the nine months ended 2025 and 2024, 25,134 and 27,803 shares were awarded, respectively.

These shares had a grant date value of $ 1.2 million and $ 1.0 million for 2025 and 2024, vest over three years , and their grant is not subject to future performance measures.

39 unchanged sentences

Allowance for Credit Losses

The following table presents the activity of the allowance for credit losses by portfolio segment for the three months ended June 30.

The following table presents the activity of the allowance for credit losses by portfolio segment for the three months ended September 30.

Allowance for Credit Losses:

June 30, 2025

September 30, 2025

(Dollar amounts in thousands)

4 unchanged sentences

Allowance for Credit Losses:

June 30, 2024

September 30, 2024

(Dollar amounts in thousands)

Beginning balance

PCD ACL on acquired loans

Provision for credit losses

1 unchanged sentence

Ending Balance

The following table presents the activity of the allowance for credit losses by portfolio segment for the six months ended June 30.

The following table presents the activity of the allowance for credit losses by portfolio segment for the nine months ended September 30.

Allowance for Credit Losses:

June 30, 2025

September 30, 2025

(Dollar amounts in thousands)

4 unchanged sentences

Allowance for Credit Losses:

June 30, 2024

September 30, 2024

(Dollar amounts in thousands)

Beginning balance

PCD ACL on acquired loans

Provision for credit losses

2 unchanged sentences

The tables below present the recorded investment in non-performing loans by class of loans.

June 30, 2025

90 Days Still

September 30, 2025

(Dollar amounts in thousands)

Still Accruing

For Credit Loss

6 unchanged sentences

December 31, 2024

90 Days Still

(Dollar amounts in thousands)

Still Accruing

For Credit Loss

6 unchanged sentences

The following tables present the amortized cost basis of collateral dependent loans by class of loans:

June 30, 2025

September 30, 2025

Collateral Type

16 unchanged sentences

The following tables presents the aging of the recorded investment in loans by past due category and class of loans.

June 30, 2025

September 30, 2025

(Dollar amounts in thousands)

18 unchanged sentences

or a permanent reduction of the recorded investment in the loan.

The following table presents the amortized cost of loans and leases at June 30, 2025 that were both experiencing financial difficulty and modified during the twelve months ended June 30, 2025, by class and by type of modification.

The following table presents the amortized cost of loans and leases at September 30, 2025 that were both experiencing financial difficulty and modified during the twelve months ended September 30, 2025, by class and by type of modification.

The percentage of the amortized cost of loans and leases that were modified to borrowers in financial distress as compared to the amortized cost of each class of financial receivable is also presented below.

6 unchanged sentences

The Corporation closely monitors the performance of loans and leases that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

All loans and leases that have been modified during the twelve months ended June 30, 2025 are in a current status of repayment.

The following table presents the financial effect of loan and lease modifications presented above to borrowers experiencing financial difficulty for the twelve months ended June 30, 2025.

The following table presents the performance of such loans that have been modified in the last twelve months :

September 30, 2025

(Dollar amounts in thousands)

Motor Vehicle

The following table presents the financial effect of loan and lease modifications presented above to borrowers experiencing financial difficulty for the twelve months ended September 30, 2025.

Interest Rate

1 unchanged sentence

Motor Vehicle

There were no modified loans that had a payment default during the twelve months ended June 30, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

The following table presents the amortized cost basis of loans that had a payment default during the twelve months ended September 30, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Interest Rate

(Dollar amounts in thousands)

Motor Vehicle

Upon the Corporation’s determination that a modified loan has subsequently been deemed uncollectible, the loan is written off.

19 unchanged sentences

These balances do not include accrued interest:

June 30, 2025

September 30, 2025

Term Loans at Amortized Cost Basis by Origination Year

39 unchanged sentences

These balances do not include accrued interest:

June 30, 2025

September 30, 2025

Term Loans at Amortized Cost Basis by Origination Year

37 unchanged sentences

All securities are classified as available-for-sale.

June 30, 2025

September 30, 2025

(Dollar amounts in thousands)

15 unchanged sentences

Collateralized debt obligations

Contractual maturities of debt securities at June 30, 2025 were as follows.

Contractual maturities of debt securities at September 30, 2025 were as follows.

Available-for-Sale

5 unchanged sentences

Mortgage-backed securities and collateralized mortgage obligations

For the three and six months ended June 30, 2025, there were no gross gains and $ 3 thousand in gross losses realized for both periods on sales/calls of investment securities.

There were no gross gains and losses from investment sales/calls realized by the Corporation for the three and six months ended June 30, 2024.

The following tables show the securities’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at June 30, 2025 and December 31, 2024.

June 30, 2025

For the three and nine months ended September 30, 2025, there were $ 25 thousand in gross gains realized for both periods and $ 1 thousand and $ 4 thousand in gross losses realized on sales/calls of investment securities.

For the three and nine months ended September 30, 2024, there were $ 132 thousand and $ 133 thousand in gross gains and $ 29 thousand in gross losses realized for both periods.

September 30, 2025

Less Than 12 Months

25 unchanged sentences

Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes.

Gross unrealized losses on investment securities were $ 150.6 5 million as of June 30, 2025 and $ 168.93 million as of December 31, 2024.

Gross unrealized losses on investment securities were $ 126.76 million as of September 30, 2025 and $ 168.93 million as of December 31, 2024.

Management believes these losses represent negative adjustments to market value relative to the interest rate environment reflecting the increase in market rates and not losses related to the creditworthiness of the issuer.

5 unchanged sentences

Management does not intend to sell these securities and it is not more likely than not that we will be required to sell them before their anticipated recovery.

The table below presents a rollforward of the credit losses recognized in earnings for the three and six month period ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

The table below presents a rollforward of the credit losses recognized in earnings for the three and nine month period ended September 30, 2025 and 2024:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollar amounts in thousands)

4 unchanged sentences

The Corporation invests in qualified affordable housing projects.

The balance of investment for qualified housing projects was $ 40.0 million at June 30, 2025 and $ 27.2 million at December 31, 2024.

The balance of investment for qualified housing projects was $ 39.2 million at September 30, 2025 and $ 27.2 million at December 31, 2024.

These balances are reflected in the other assets line on the consolidated balance sheets.

Total unfunded commitments related to the investments in qualified affordable housing projects totaled $ 24.9 million at June 30, 2025 and $ 17.7 million at December 31, 2024.

Total unfunded commitments related to the investments in qualified affordable housing projects totaled $ 22.2 million at September 30, 2025 and $ 17.7 million at December 31, 2024.

These balances are reflected in the other liabilities line on the consolidated balance sheets.The Corporation expects to fulfill these commitments by the end of December 31, 2037.

The Corporation recognized amortization expense of $ 31 thousand during the six months ended June 30, 2025, and $ 211 thousand during the six months ended June 30, 2024, which was included within other noninterest expense on the consolidated statements of income.

The Corporation recognized amortization expense of $ 1.4 million during the six months ended June 30, 2025, and $ 847 thousand during the six months ended June 30, 2024, which was included within income tax expense on the consolidated statements of income.

Additionally, the Corporation recognized tax credits and other benefits from its investment in affordable housing tax credits of $ 1.8 million during the six months ended June 30, 2025, and $ 1.6 million during the six months ended June 30, 2024.

The Corporation recognized amortization expense of $ 47 thousand during the nine months ended September 30, 2025, and $ 232 thousand during the nine months ended September 30, 2024, which was included within other noninterest expense on the consolidated statements of income.

The Corporation recognized amortization expense of $ 2.2 million during the nine months ended September 30, 2025, and $ 1.7 million during the nine months ended September 30, 2024, which was included within income tax expense on the consolidated statements of income.

Additionally, the Corporation recognized tax credits and other benefits from its investment in affordable housing tax credits of $ 2.8 million during the nine months ended September 30, 2025, and $ 2.4 million during the nine months ended September 30, 2024.

820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

15 unchanged sentences

The fair value of derivatives is based on valuation models using observable market data as of the measurement date (Level 2 inputs).

June 30, 2025

September 30, 2025

Fair Value Measurements Using

24 unchanged sentences

There were no transfers between Level 1 and Level 2 during 2025 and 2024.

The tables below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2025 and the year ended December 31, 2024.

The tables below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2025 and the year ended December 31, 2024.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Three Months Ended

June 30, 2025

September 30, 2025

Collateralized

1 unchanged sentence

debt obligations

Beginning balance, April 1

Beginning balance, July 1

Total realized/unrealized gains or losses

1 unchanged sentence

Included in other comprehensive income

Ending balance, June 30

Ending balance, September 30

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

Collateralized

5 unchanged sentences

Included in other comprehensive income

Ending balance, June 30

Ending balance, September 30

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

9 unchanged sentences

Other real estate owned is valued at Level 3.

Other real estate owned at June 30, 2025 with a value of $ 383 thousand was reduced by $ 142 thousand for fair value adjustment.

At June 30, 2025 other real estate owned was comprised of $ 234 thousand from commercial loans and $ 149 thousand from residential loans.

Other real estate owned at September 30, 2025 with a value of $ 138 thousand was reduced by $ 20 thousand for fair value adjustment.

At September 30, 2025 other real estate owned was comprised of $ 138 thousand from residential loans.

Other real estate owned at December 31, 2024 with a value of $ 523 thousand was reduced by zero for fair value adjustment.

16 unchanged sentences

Other real estate and individually evaluated loans carried at fair value are primarily comprised of smaller balance properties.

The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at June 30, 2025.

The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at September 30, 2025.

(Dollar amounts in thousands)

22 unchanged sentences

20.00 %- 100.00

The carrying amounts and estimated fair value of financial instruments at June 30, 2025 and December 31, 2024, are shown below.

The carrying amounts and estimated fair value of financial instruments at September 30, 2025 and December 31, 2024, are shown below.

Carrying amount is the estimated fair value for cash and due from banks, federal funds sold, short-term borrowings, accrued interest receivable and payable, demand deposits, short-term debt and variable-rate loans or deposits that reprice frequently and fully.

7 unchanged sentences

The fair value of off-balance sheet items is not considered material.

June 30, 2025

September 30, 2025

(Dollar amounts in thousands)

26 unchanged sentences

(Dollar amounts in thousands)

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

Collateral pledged to repurchase agreements by remaining maturity are as follows:

June 30, 2025

September 30, 2025

Repurchase Agreements

10 unchanged sentences

Other borrowings:

Other borrowings at June 30, 2025 and December 31, 2024 are summarized as follows:

Other borrowings at September 30, 2025 and December 31, 2024 are summarized as follows:

(Dollar amounts in thousands)

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

The aggregate minimum annual retirements of other borrowings are as follows:

Twelve Months Ended June 30,

At June 30, 2025 and December 31, 2024, other borrowings are summarized as follows:

Twelve Months Ended September 30,

At September 30, 2025 and December 31, 2024, other borrowings are summarized as follows:

The Corporation’s subsidiary bank is a member of the Federal Home Loan Bank (FHLB) and accordingly are permitted to obtain advances.

There are $ 106.0 million of advances from the FHLB at June 30, 2025, and $ 7.3 million of advances at December 31, 2024.

There are $ 155.9 million of advances from the FHLB at September 30, 2025, and $ 7.3 million of advances at December 31, 2024.

FHLB advances are, generally due in full at maturity.

1 unchanged sentence

In addition the Corporation secured a note payable to a commercial bank in the second quarter 2024.

The balance at June 30, 2025 is $ 16.7 million.

The balance at September 30, 2025 is $ 14.6 million.

Components of Net Periodic Benefit Cost

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Post-Retirement

13 unchanged sentences

Contributions of $ 905 thousand have been made to the Pension Plan thus far in 2025.

Contributions of $ 134 thousand have been made through the first six months of 2025 for the Post Retirement Health Benefits plan.

Contributions of $ 188 thousand have been made through the first nine months of 2025 for the Post Retirement Health Benefits plan.

No contributions have been made in 2025 for the ESOP.

The Pension plan was frozen for most employees at the end of 2012 and for those employees there will be discretionary contributions to the ESOP plan and a 401K plan in place of the former Pension benefit.

In the first six months of 2025 and 2024 there has been $ 1.6 million and $ 1.6 million of expense accrued for potential contributions to these alternative retirement benefit options.

In the first nine months of 2025 and 2024 there has been $ 2.4 million and $ 2.4 million of expense accrued for potential contributions to these alternative retirement benefit options.

Revenue from Contracts with Customers

All of the Corporation’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income.

The following table presents the Corporation’s sources of Non-Interest Income for the three and six months ended June 30, 2025 and 2024.

The following table presents the Corporation’s sources of Non-Interest Income for the three and nine months ended September 30, 2025 and 2024.

Items outside the scope of ASC 606 are noted as such.

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollar amounts in thousands)

9 unchanged sentences

(a) Not within the scope of ASC 606.

(b) The Other category includes gains/(losses) on the sale of OREO for the three months ended June 30, 2025 and June 30, 2024, totaling $( 180 ) thousand and $ 79 thousand, respectively, and for the six months ended for the same periods, totaling $( 180 ) thousand and $ 87 thousand, which is within the scope of ASC 606;

(b) The Other category includes gains/(losses) on the sale of OREO for the three months ended September 30, 2025 and September 30, 2024, totaling $ 57 thousand and $( 25 ) thousand, respectively, and for the nine months ended for the same periods, totaling $( 123 ) thousand and $ 61 thousand, which is within the scope of ASC 606;

the remaining balance is outside the scope of ASC 606.

20 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes, net of tax, within each classification of accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2025 and 2024.

The following tables summarize the changes, net of tax, within each classification of accumulated other comprehensive income/(loss) for the three and nine months ended September 30, 2025 and 2024.

(Losses) on available-

(Dollar amounts in thousands)

Beginning balance, April 1,

Beginning balance, July 1,

Change in other comprehensive income (loss) before reclassification

1 unchanged sentence

Net current period other comprehensive income (loss)

Ending balance, June 30,

Ending balance, September 30,

(Losses) on available-

4 unchanged sentences

Net current period other comprehensive income (loss)

Ending balance, June 30,

Ending balance, September 30,

(Losses) on available-

(Dollar amounts in thousands)

Beginning balance, April 1,

Beginning balance, July 1,

Change in other comprehensive income (loss) before reclassification

1 unchanged sentence

Net current period other comprehensive income (loss)

Ending balance, June 30,

Ending balance, September 30,

(Losses) on available-

4 unchanged sentences

Net current period other comprehensive income (loss)

Ending balance, June 30,

Ending balance, September 30,

Current Period

22 unchanged sentences

Unrealized gain (loss) on retirement plans

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Details about accumulated

19 unchanged sentences

(see Footnote 8 for additional details).

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Details about accumulated

19 unchanged sentences

(see Footnote 8 for additional details).

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Details about accumulated

19 unchanged sentences

(see Footnote 8 for additional details).

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Details about accumulated

20 unchanged sentences

The Corporation leases certain branches under operating leases.

At June 30, 2025, the Corporation had lease liabilities totaling $ 7,347,000 and right-of-use assets totaling $ 7,215,000 related to these leases.

At September 30, 2025, the Corporation had lease liabilities totaling $ 7,807,000 and right-of-use assets totaling $ 7,660,000 related to these leases.

At December 31, 2024, the Corporation had lease liabilities totaling $ 7,829,000 and right-of-use assets totaling $ 7,725,000 related to these leases.

Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively.

At June 30, 2025, the weighted average remaining lease term for operating leases was 10.8 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.23 %.

At September 30, 2025, the weighted average remaining lease term for operating leases was 10.2 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.31 %.

The calculated amount of the lease liabilities and right-of-use assets are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments.

6 unchanged sentences

Lease costs were as follows:

Six Months Ended

Nine Months Ended

(Dollar amounts in thousands)

June 30, 2025

September 30, 2025

Operating lease cost

5 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2025 were as follows:

Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2025 were as follows:

(Dollar amounts in thousands)

June 30, 2025

Twelve Months Ended June 30,

September 30, 2025

Twelve Months Ended September 30,

Total Future Minimum Lease Payments

31 unchanged sentences

As such, these receivables were not considered impaired at the acquisition date and were not subject to guidance relating to purchase credit deteriorated loans, which have shown evidence of credit deterioration since origination.

Adjustments made above were within the allowable one year measurement period.

The fair value of purchased financial assets with credit deterioration was $ 1.7 million on the date of acquisition.

1 unchanged sentence

The Corporation estimates, on the date of acquisition, that $ 3.0 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

Adjustments made above were within the allowable one year measurement period.

Changes recognized within the current quarter related to the finalization of tax calculations of the acquired entity.

There was no impact to net income as a result of these changes.

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2023.

62 unchanged sentences

As such, reversion from forecast rates to historical loss rates is immediate.

The ACL and allowance for unfunded commitments were $47.1 million and $2.2 million, respectively at June 30, 2025, compared to $46.7 million and $2.1 million, respectively at December 31, 2024.

The ACL and allowance for unfunded commitments were $47.4 million and $2.2 million, respectively at September 30, 2025, compared to $46.7 million and $2.1 million, respectively at December 31, 2024.

The qualitative amount of the reserve increased $1.1 million to $13.9 million.

The quantitative amount is $32.2 million at June 30, 2025, compared to $33.6 million at December 31, 2024.

The quantitative amount is $33.1 million at September 30, 2025, compared to $33.6 million at December 31, 2024.

There was an increase of $100 thousand in the allowance for unfunded commitments.

4 unchanged sentences

Summary of Operating Results

Net income for the three months ended June 30, 2025 was $18.6 million, compared to $11.4 million for the same period in 2024.

Basic earnings per share increased to $1.57 for the second quarter of 2025 compared to $0.96 for the same period in 2024.

Return on average assets and return on average equity were 1.34% and 12.90% respectively, for the three months ended June 30, 2025 compared to 0.94% and 8.78% for the three months ended June 30, 2024.

Net income for the six months ended June 30, 2025 was $37.0 million, compared to $22.3 million for the same period in 2024.

Basic earnings per share increased to $3.12 for the six months of 2025 compared to $1.89 for the same period in 2024.

Return on average assets and return on average equity were 1.34% and 12.97% respectively, for the six months ended June 30, 2025 compared to 0.93% and 8.57% for the six months ended June 30, 2024.

Net income for the three months ended September 30, 2025 was $20.8 million, compared to $8.7 million for the same period in 2024.

Basic earnings per share increased to $1.75 for the third quarter of 2025 compared to $0.74 for the same period in 2024.

Return on average assets and return on average equity were 1.48% and 13.82% respectively, for the three months ended September 30, 2025 compared to 0.64% and 6.39% for the three months ended September 30, 2024.

Net income for the nine months ended September 30, 2025 was $57.8 million, compared to $31.0 million for the same period in 2024.

Basic earnings per share increased to $4.87 for the nine months of 2025 compared to $2.63 for the same period in 2024.

Return on average assets and return on average equity were 1.39% and 13.23% respectively, for the nine months ended September 30, 2025 compared to 0.82% and 7.80% for the nine months ended September 30, 2024.

In light of events in the banking sector, including bank failures, continuing interest rate activity and recessionary concerns, the Corporation has proactively positioned the balance sheet to mitigate the risks affecting the Corporation and the overall banking industry in order to serve its clients and communities.

● Liquidity remains strong, with cash and available for sale securities representing approximately 22.6% of assets at June 30, 2025.

● Liquidity remains strong, with cash and available for sale securities representing approximately 22.5% of assets at September 30, 2025.

The Corporation maintains the ability to access considerable sources of contingent liquidity at the Federal Home Loan Bank and several correspondent banks.

3 unchanged sentences

Refer to the section Capital Adequacy , included elsewhere in this report for additional details.

● Asset quality remains solid, with a non-performing asset ratio of 0.23% of total assets as of June 30, 2025 and net charge-offs of 0.18% to average loans and leases, reflecting the Company's disciplined underwriting and conservative lending philosophy

which has supported the Corporation’s strong credit performance during prior financial crises.

● Asset quality remains solid, with a non-performing asset ratio of 0.39% of total assets as of September 30, 2025 and net charge-offs of 0.17% to average loans and leases, reflecting the Company's disciplined underwriting and conservative lending philosophy which has supported the Corporation’s strong credit performance during prior financial crises.

Refer to the section Non-Performing Loan for additional information.

2 unchanged sentences

The Corporation’s primary source of earnings is net interest income, which is the difference between the interest earned on loans and other investments and the interest paid for deposits and other sources of funds.

Net interest income increased $13.4 million in the three months ended June 30, 2025 to $52.7 million from $39.3 million in the same period in 2024.

The net interest margin for the three months ended June 30, 2025 is 4.15% compared to 3.57% for the same period in 2024, a 16.25% increase.

Net interest income increased $26.4 million in the six months ended June 30, 2025 to $104.6 million from $78.2 million in the same period in 2024.

The net interest margin for the six months ended June 30, 2025 is 4.13% compared to 3.55% for the same period in 2024, a 16.34% increase.

The increase in yields on net loans and leases of 28 basis points is the primary contributor to the improved yield on average earning assets for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Comparing the six months ended June 30, 2025 to the six months ended June 30, 2024, the effective rate paid on average interest-bearing deposits decreased 31 basis points.

Net interest income increased $7.4 million in the three months ended September 30, 2025 to $54.6 million from $47.2 million in the same period in 2024.

The net interest margin for the three months ended September 30, 2025 is 4.25% compared to 3.78% for the same period in 2024, a 12.42% increase.

Net interest income increased $33.9 million in the nine months ended September 30, 2025 to $159.2 million from $125.4 million in the same period in 2024.

The net interest margin for the nine months ended September 30, 2025 is 4.17% compared to 3.63% for the same period in 2024, a 14.98% increase.

The increase in yields on net loans and leases of 24 basis points is the primary contributor to the improved yield on average earning assets for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024, the effective rate paid on average interest-bearing deposits decreased 23 basis points.

For the same period discussed above, interest paid on other borrowings decreased 93 basis points.

Non-Interest Income

Non-interest income for the three months ended June 30, 2025 was $10.4 million compared to $9.9 million for the same period in 2024.

Non-interest income for the six months ended June 30, 2025 was $20.9 million compared to $19.3 million for the same period in 2024.

Non-interest income for the three months ended September 30, 2025 was $11.1 million compared to $11.2 million for the same period in 2024.

Non-interest income for the nine months ended September 30, 2025 was $32.0 million compared to $30.6 million for the same period in 2024.

Non-Interest Expenses

The Corporation’s non-interest expense for the quarter ended June 30, 2025 was $38.3 million compared to $32.7 million for the same period in 2024.

The Corporation’s non-interest expense for the six months ended June 30, 2025 increased $9.0 million to $75.0 million compared to the same period in 2024.

The Corporation’s non-interest expense for the quarter ended September 30, 2025 was $38.0 million compared to $38.6 million for the same period in 2024.

The Corporation’s non-interest expense for the nine months ended September 30, 2025 increased $8.4 million to $113.1 million compared to the same period in 2024.

This includes an overall increase in operating expenses as a result of the acquisition.

Allowance for Credit Losses

The Corporation’s provision for credit losses for the three months ended June 30, 2025, was $2.0 million, compared to provision of $3.0 million for the same period of 2024.

Net charge-offs for the second quarter of 2025 were $1.7 million compared to net charge-offs of $4.7 million for the same period of 2024.

The provision for credit losses decreased $866 thousand to $3.9 million for the six months ended June 30, 2025, compared to a provision of $4.8 million for the same period in 2024.

Net charge-offs for the first six months of 2025 decreased $2.7 million to $3.5 million compared to the same period of 2024.

The Corporation’s provision for credit losses for the three months ended September 30, 2025, was $2.0 million, compared to provision of $9.4 million for the same period of 2024.

Net charge-offs for the third quarter of 2025 were $1.6 million compared to net charge-offs of $4.6 million for the same period of 2024.

The provision for credit losses decreased $8.3 million to $5.9 million for the nine months ended September 30, 2025, compared to a provision of $14.2 million for the same period in 2024.

Net charge-offs for the first nine months of 2025 decreased $5.6 million to $5.2 million compared to the same period of 2024.

The Corporation recorded $5.5 million in provision on non-PCD loans acquired from SimplyBank subsequent to the acquisition in the third quarter 2024.

Also in the third quarter 2024, additional provision as well as charge-offs were related to one previously identified credit, reflecting further deterioration in collateral values in the third quarter 2024.

No further losses were recorded 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.

In the first six months of 2025, no significant changes were made.

In the first nine months of 2025, no significant changes were made.

Income Tax Expense

The Corporation’s effective income tax rate for the first six months of 2025 was 20.62% compared to 16.54% for the same period in 2024.

Pretax income for the first six months in 2025 was significantly higher than pretax income for first six months in 2024.

The Corporation’s effective income tax rate for the first nine months of 2025 was 20.18% compared to 16.44% for the same period in 2024.

Pretax income for the first nine months in 2025 was significantly higher than pretax income for first nine months in 2024.

Since our permanent differences remained similar, income was the driving factor for the increase in effective tax rate.

1 unchanged sentence

Non-performing loans consist of (1) non-accrual loans on which the ultimate collectability of the full amount of interest is uncertain, and (2) loans past due ninety days or more as to principal or interest.

Non-performing loans decreased to $9.8 million at June 30, 2025

compared to $13.3 million at December 31, 2024.

Nonperforming loans decreased 38.5% compared to $15.9 million as of June 30, 2024.

A summary of non-performing loans at June 30, 2025 and December 31, 2024 follows:

June 30, 2025

Non-performing loans increased to $19.3 million at September 30, 2025 compared to $13.3 million at December 31, 2024.

Nonperforming loans increased 36.3% compared to $14.1 million as of September 30, 2024.

A summary of non-performing loans at September 30, 2025 and December 31, 2024 follows:

September 30, 2025

December 31, 2024

3 unchanged sentences

The following loan categories comprise significant components of the nonperforming non-restructured loans:

June 30, 2025

September 30, 2025

December 31, 2024

3 unchanged sentences

Consumer loans

Past due 90 days or more

Past due 90 days or more and still accruing

Commercial loans

20 unchanged sentences

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.

The table below shows the Corporation’s estimated sensitivity profile as of June 30, 2025.

The table below shows the Corporation’s estimated sensitivity profile as of September 30, 2025.

The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points.

11 unchanged sentences

Given the current rate environment, the Corporation anticipates $29.2 million in securities to be called within the next 12 months.

The Corporation also has $227.4 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $1.1 billion available with the Federal Reserve Bank, and $90 million of available fed funds lines with correspondent banks.

The Corporation also has $203.1 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $898 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.

Financial Condition

Comparing the first six months of 2025 to year-ended December 31, 2024, loans net of deferred loan costs, have increased $59 million to $3.9 billion.

Deposits decreased 1.2% to $4.7 billion at June 30, 2025 compared to December 31, 2024.

Other borrowings increased $94.6 million to $122.7 million at June 30, 2025 compared to December 31, 2024.

Comparing the first nine months of 2025 to year-ended December 31, 2024, loans net of deferred loan costs, have increased $130 million to $4.0 billion.

Deposits decreased 2.2% to $4.6 billion at September 30, 2025 compared to December 31, 2024.

Other borrowings increased $142.3 million to $170.5 million at September 30, 2025 compared to December 31, 2024.

Shareholders’ equity increased 13.33% or $73.2 million.

This financial performance increased book value per share 6.97% to $49.59 at June 30, 2025 from $46.36 at December 31, 2024.

This financial performance increased book value per share 13.24% to $52.50 at September 30, 2025 from $46.36 at December 31, 2024.

Book value per share is calculated by dividing the total shareholders’ equity by the number of shares outstanding.

21 unchanged sentences

Currently the Corporation exceeds all of these minimums.

June 30, 2025

September 30, 2025

December 31, 2024

9 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-Q

Item 1. Financial Statements