First Financial Bancorp: Form 10-Q for the period ended Mar 31, 2026

CONDITION AND RESULTS OF OPERATIONS

(Unaudited)

The following discussion and analysis is presented by management to facilitate the understanding of the financial condition, cash flows, changes in financial condition and results of operations of First Financial Bancorp. Management's discussion and analysis identifies trends and material changes that occurred during the reporting periods presented and should be read in conjunction with the Consolidated Financial Statements and accompanying Notes.

All significant reclassifications of prior period amounts, if applicable, have been made to conform to the current period’s presentation and had no effect on the Company's previously reported net income or financial condition.

EXECUTIVE SUMMARY

First Financial Bancorp. is a $22.8 billion financial holding company headquartered in Cincinnati, Ohio. The Company primarily operates through First Financial Bank, an Ohio-chartered commercial bank with 153 full service banking centers as of March 31, 2026. First Financial provides banking and financial services products to business and retail clients through its six lines of business: Commercial, Retail Banking, Mortgage Banking, Wealth Management, Investment Commercial Real Estate and Commercial Finance. The Commercial Finance business lends to targeted industry verticals and has a national geographic footprint. Wealth Management, operating under the brand of Yellow Cardinal Advisory Group, had $4.3 billion in assets under management as of March 31, 2026, and provides the following services: financial planning, investment management, trust administration, estate settlement, business succession planning services, brokerage services and retirement planning.

Additional information about First Financial, including its products, services and banking locations, is available on the

Company's website at www.bankatfirst.com (http://www.bankatfirst.com).

The primary components of First Financial’s operating results for the three month period ended March 31, 2026 are discussed in greater detail in the sections that follow.

MARKET STRATEGY

First Financial develops a competitive advantage by utilizing a local market focus to provide superior service and build long-term relationships with clients while helping them achieve greater financial success. First Financial serves a combination of metropolitan and community markets in Ohio, Indiana, Kentucky and Illinois through its full-service banking centers. First Financial's investment in community markets is an important part of the Bank's core funding base and has historically provided stable, low-cost funding sources.

First Financial also has certain specialty lending platforms that extend nationally beyond the geographic footprint of its banking centers. These specialty finance businesses provide insurance premium financing, equipment lease financing, franchise financing and funding to clients within the financial services industry.

Additionally, First Financial has established loan production offices in multiple locations outside its primary footprint to broaden its geographic presence, enhance access to prospective borrowers and support growth, thereby strengthening the Company's overall operations.

First Financial’s market selection process includes multiple factors, but markets are primarily chosen for their potential for long-term profitability and growth. First Financial intends to concentrate plans for future growth and capital investment within its current markets, and will continue to evaluate additional growth opportunities in metropolitan markets located within, or in close proximity to, the Company's current geographic footprint. Additionally, First Financial may assess strategic acquisitions that provide product line extensions or industry verticals that complement its existing business and diversify its product suite and revenue streams.

BUSINESS COMBINATIONS

BankFinancial Corporation

BankFinancial, National Association, a national banking association, and a wholly owned subsidiary of BankFinancial Corporation, merged into First Financial Bank effective January 1, 2026. Under the terms of the agreement, each share of BankFinancial Corporation common stock was converted into 0.48 shares of First Financial common stock, or 5,980,878 total shares, valuing the transaction at $149.7 million based on the closing price of First Financial stock at December 31, 2025.

With the addition of 17 retail banking locations, the acquisition expanded First Financial’s presence in the Chicago market with a strong core deposit franchise while supplementing its existing commercial banking and wealth management lines of business.

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and

liabilities assumed at their estimated fair value for the BankFinancial acquisition.

(Dollars in thousands)

As the fair value of net identifiable assets acquired exceeded the purchase price for BankFinancial, the transaction resulted in the recognition of a gain on bargain purchase of $8.9 million. This gain is recorded within Noninterest income in the Company's Consolidated Statement of Income and arose primarily from transaction-specific market factors, including the relative profitability profile of BankFinancial and the Company’s strategic focus on BankFinancial’s core deposit franchise and Chicago market presence.

Acquired loans held for sale represent certain multi-family loans that First Financial determined were not in alignment with the Company's long-term portfolio strategy, risk profile or concentration objectives. Management received multiple indications of interest on these loans, ultimately consummating the sale in March of 2026. The sales price of the loans sold approximated fair value at acquisition. As these loans were sold prior to the end of the quarter, they had no impact on the Company's Statement of Condition at March 31, 2026.

Westfield Bancorp

First Financial Bancorp acquired Westfield Bancorp, Inc., an Ohio corporation, effective November 1, 2025. Upon completion of the transaction, Westfield Bank, FSB, a federal savings bank, and a wholly owned subsidiary of Westfield Bancorp, merged into First Financial Bank. Pursuant to the Purchase Agreement, First Financial acquired all of the issued and outstanding equity securities of Westfield Bancorp in exchange for a cash payment of $260.0 million and 2,753,094 shares of First Financial common stock, equal to $64.4 million based on the Company's stock price on the date the transaction closed, for a total purchase price of $324.4 million.

The Westfield acquisition supplemented First Financial’s existing commercial banking and wealth management presence in Northeast Ohio by adding all seven of Westfield's retail banking locations and its commercial, insurance agency and private banking services. Additionally, Westfield had one banking center that was under construction at the time of the acquisition. This banking center opened during the first quarter of 2026.

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and

liabilities assumed at their estimated fair value for the Westfield acquisition.

(Dollars in thousands)

52

NON-GAAP FINANCIAL MEASURES

The Company utilizes certain non-GAAP financial measures, which First Financial believes provides useful insight to the readers of the Consolidated Financial Statements. These non-GAAP measures should be supplemental to primary GAAP measures and should not be read in isolation or relied upon as a substitute for the primary GAAP measures.

For analytical purposes, net interest income is presented in the following table adjusted to a tax equivalent basis assuming a 21% marginal tax rate. Net interest income is disclosed on a tax equivalent basis to consistently reflect income from tax-exempt assets, such as municipal loans and investments, in order to facilitate a comparison between taxable and tax-exempt amounts. Management believes it is standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis as these measures provide useful information to make peer comparisons.

(Dollars in thousands)

(1) Calculated using annualized net interest income divided by average earning assets.

In addition to capital ratios defined by the U.S. banking agencies, First Financial considers various measures when evaluating capital utilization and adequacy, including the return on average tangible shareholder's equity and the tangible common equity ratio. These calculations are intended to complement the capital ratios defined by the U.S. banking agencies for both absolute and comparative purposes and may be useful for evaluating the performance of a business as the ratios calculate the capital and return available to common shareholders without the impact of intangible assets and their related amortization. As GAAP does not include capital ratio measures, the Company believes there are no comparable GAAP financial measures to these ratios. These ratios are not formally defined by GAAP or codified in the federal banking regulations and, therefore, are considered to be non-GAAP financial measures.

First Financial encourages readers to consider its Consolidated Financial Statements in their entirety and not to rely upon any single financial measure.

The following table reconciles non-GAAP capital ratios to GAAP:

(Dollars in thousands)

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Table of Content

(Dollars in thousands)

OVERVIEW OF OPERATIONS

Linked quarter comparison: First quarter 2026 net income was $74.4 million and earnings per diluted common share were $0.71. This compares with fourth quarter 2025 net income of $62.4 million and earnings per diluted common share of $0.64. Return on average assets was 1.34% for the first quarter of 2026 compared to 1.22% for the fourth quarter of 2025. Return on average shareholders’ equity was 10.24% for the first quarter of 2026 compared to 9.18% for the fourth quarter of 2025.

Year-to-date comparison: For the three months ended March 31, 2026, net income was $74.4 million and earnings per diluted common share were $0.71. This compares with net income of $51.3 million and earnings per diluted common share of $0.54 for the first three months of 2025. Return on average assets for the three months ended March 31, 2026 was 1.34% compared to 1.13% for the same period in 2025, and return on average shareholders' equity was 10.24% and 8.46% for the first three months of 2026 and 2025, respectively.

Table of Content

(Dollars in thousands)

(Dollars in thousands, except per share data)

(1) Non-GAAP financial measure. For details on the calculation of this non-GAAP financial measure, see "Non-GAAP Financial Measures" section.

NET INTEREST INCOME

First Financial’s primary source of income is net interest income, which is the excess of interest received from earning assets, including loan-related fees and purchase accounting accretion, minus interest paid on interest-bearing liabilities. The amount of net interest income is determined by the volume and mix of earning assets, the rates earned on such assets and the volume, mix and rates paid for the deposits and borrowings that fund the earning assets. Earning assets consist of interest-bearing loans and leases to customers as well as marketable investment securities.

(Dollars in thousands)

Linked quarter comparison: Net interest income for the first quarter of 2026 was $189.6 million, which was an increase of $15.6 million, or 9.0%, from the fourth quarter of 2025. Net interest margin on a fully tax equivalent basis was 3.99% in the first quarter of 2026 compared to 3.98% for the fourth quarter of 2025. The net interest margin during the first quarter increased 1 basis point from the linked quarter as deposit costs declined 13 bps, offsetting a 12 bp decline in asset yields.

Interest income of $282.4 million increased $17.1 million, or 6.4%, in the first quarter of 2026 when compared to the fourth quarter of 2025. This increase was primarily driven by an increase in earning assets, partially offset by a 12 bp decline in the yield on those earning assets to 5.91%. Earning assets were $19.4 billion for the first quarter of 2026, which was an increase of $1.9 billion, or 11.1%, compared to the fourth quarter of 2025. The change in earning assets was primarily driven by the BankFinancial acquisition.

Interest expense of $92.8 million increased $1.5 million, or 1.6%, in the first quarter of 2026 when compared to the fourth quarter of 2025. The increase in interest expense was primarily driven by higher interest-bearing deposit balances. The Company's average deposit balances increased $1.7 billion, or 10.6%, to $17.6 billion. The increase in average deposits was primarily driven by the full quarter impact from the Westfield Bank and BankFinancial acquisitions. Average borrowed funds increased $163.5 million, or 19.3%, from the linked quarter.

To mitigate interest rate risk on certain variable-rate commercial loan pools, First Financial entered into interest rate collars and floors, which are designated as cash flow hedges. The structure of the interest rate collars is such that First Financial pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, First Financial receives an incremental amount if the index falls below the floor rate. No payments are required if the collar index falls between the cap and floor rates. The structure of First Financial's interest rate floors is such that First Financial receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate.

The notional value of the Company's cash flow hedges was $1.0 billion as of both March 31, 2026 and December 31, 2025, with the $0.1 million and $1.3 million changes in the fair value recorded in AOCI in the Consolidated Balance Sheets, respectively. As of March 31, 2026 and December 31, 2025, the maximum length of time over which the Company was hedging its exposure to the variability in future cash flows was 33 months and 36 months, respectively.

Year-to-date comparison: Net interest income of $189.6 million for the first three months of 2026 increased $40.3 million, or

27.0%, compared to the same period of 2025. Net interest margin on a fully tax equivalent basis was 3.99% for the three months ended March 31, 2026, which is an increase of 11 bps when compared to the same period in 2025, as a 53 bp decrease in the cost of interest-bearing deposits outpaced a 28 bp decline in earning asset yields.

Interest income of $282.4 million for the three months ended March 31, 2026 grew $42.0 million, or 17.5%, compared to $240.4 million for the same period of the prior year as the increase in earning asset balances more than offset decline in yields. Average earning assets of $19.4 billion for the first three months of 2026 increased $3.6 billion, or 23.1%, when compared to the same period of 2025, driven primarily by a $2.3 billion, or 19.6%, increase in average loan balances and a $1.4 billion, or 39.8%, increase in average investment securities as a result of the Westfield Bank and BankFinancial acquisitions. Average loan yields for the three months of 2026 declined by 32 bps compared to the same period in the prior year, while the average yield on the investment portfolio increased by 7 bps in the first quarter of 2026 due to repositioning a portion of the portfolio in 2025.

Interest expense for the three months ended March 31, 2026 was $92.8 million compared to $91.1 million for the same period in the prior year. This increase was driven by a $2.8 billion, or 24.7%, increase in average interest-bearing deposits primarily due to the Westfield Bank and BankFinancial acquisitions, which was partially offset by a 53 bp decline in the cost on those deposits. Average borrowings increased $10.8 million, or 1.1%, compared to the first quarter of 2025, while the cost of borrowed funds increased 18 bps compared to the same period due to a mix shift that included more long-term borrowings in 2026.

CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS

(Dollars in thousands)

(1) Loans held for sale and nonaccrual loans are included in gross loans.

(2) The net interest margin exceeds the interest spread as noninterest-bearing funding sources, demand deposits, other liabilities and shareholders' equity also support earning assets.

RATE/VOLUME ANALYSIS

The impact on net interest income from changes in interest rates and volume of interest-earning assets and interest-bearing liabilities is illustrated in the table below:

(Dollars in thousands)

(1) Loans held for sale and nonaccrual loans are included in gross loans.

NONINTEREST INCOME

(Dollars in thousands)

Linked quarter comparison: First quarter 2026 noninterest income was $81.9 million, increasing $17.1 million, or 26.5%, compared to $64.8 million for the fourth quarter of 2025. The increase from the linked quarter was primarily driven by gain on bargain purchase, fewer losses on investment securities, leasing business income, client derivative fees and wealth management fees. These increases were partially offset by a decline in foreign exchange income.

Noninterest income included an $8.9 million gain on bargain purchase in the first quarter of 2026 that resulted from the BankFinancial acquisition. The gain on bargain purchase arose primarily from transaction-specific market factors, including the relative profitability profile of BankFinancial and the Company’s strategic focus on BankFinancial’s core deposit franchise and Chicago market presence.

Net loss on investment securities decreased $11.3 million, or 90.0%, as a result of losses on securities sold in the fourth quarter of 2025 not recurring in the current period. Leasing business income increased $2.1 million, or 10.7%, as a result of continued growth from Summit. Client derivative fees increased $1.3 million, or 49.6%, due to higher demand for the product while wealth management fees increased $1.2 million, or 12.9%, due to higher business succession income. These increases were partially offset by a $6.4 million, or 28.1%, decrease in foreign exchange income in the first quarter of 2026 as client demand moderated after a record fourth quarter.

Year-to-date comparison: Noninterest income of $81.9 million for the first three months of 2026 increased $30.8 million, or 60.3%, from $51.1 million in the comparable period of 2025. The increase was primarily attributed to the gain on bargain purchase recognized in conjunction with the BankFinancial acquisition, fewer losses on investment securities, and increases in foreign exchange income, leasing business income, client derivative fees, wealth management fees, net gains from sales of loans and service charges on deposit accounts.

An $8.9 million gain bargain purchase was recognized during the first three months of 2026 in connection with the BankFinancial acquisition as the fair value of net assets acquired exceeded the purchase price. Losses on investment securities decreased $8.7 million in the first three months of 2026 as a result of the Bank repositioning a portion of the investment portfolio during the first quarter of 2025, which resulted in a $9.9 million loss during the prior period. Foreign exchange income increased $3.8 million, or 30.0%, as client demand increased compared to the prior year and leasing business income increased $2.9 million, or 15.5%, due to continued portfolio growth and an increase in sales of leases. Client derivative fees increased $2.4 million, or 155.3%, due to higher demand, while wealth management fees increased $2.3 million, or 28.8%, due to higher business succession income. Net gains from sales of loans increased $1.7 million, or 39.9%, primarily due to higher mortgage demand resulting from lower interest rates, while service charges on deposit accounts increased $1.6 million, or 20.8%, due to an increase in deposit balances.

NONINTEREST EXPENSE

(Dollars in thousands)

Linked quarter comparison: First quarter 2026 noninterest expense was $169.4 million, which was an increase of $19.9 million, or 13.3%, from $149.5 million in the fourth quarter of 2025. This increase was primarily driven by higher salaries and benefits expense, intangible amortization expense, data processing expense, occupancy expense, and leasing business expense, which were partially offset by a decrease in professional services expense.

Salaries and employee benefits expense increased $14.7 million, or 17.3%, while data processing increased $2.2 million, or 20.9%, both due to the Westfield and BankFinancial acquisitions. Similarly, intangible amortization expense increased $2.3 million, or 59.4%, as a result of amortization of core deposit intangibles related to the Westfield and BankFinancial acquisitions while occupancy expense increased $1.2 million, or 19.6%, due to additional rent and utilities expense related to the branches acquired in the Westfield and BankFinancial acquisitions. Professional services expenses declined $2.2 million, or 36.0%, due to fewer acquisition-related expenses during the first quarter of 2026 compared to the fourth quarter of 2025.

Year-to-date comparison: Noninterest expenses were $169.4 million for the first three months of 2026, which was an increase of $41.3 million, or 32.3%, compared to the same period in 2025. This increase was primarily due to higher salaries and employee benefits, intangible amortization expense, data processing expense, occupancy expense, leasing business expense, professional services, and other noninterest expenses.

Salaries and employee benefits expense increased $24.6 million, or 32.7%, due to the Westfield and BankFinancial acquisitions as well as an increase in incentive compensation tied to fee income. Intangible amortization expense increased $3.9 million, or 165.4%, due to core deposit intangible amortization related to the Westfield and BankFinancial acquisitions. Data processing increased $3.9 million, or 44.5%, and occupancy increased $1.5 million, or 25.5%, both of which were driven by the Westfield and BankFinancial acquisitions. Leasing business expenses increased $1.3 million, or 10.4%, as a result of the growth in the operating lease portfolio, while professional services increased $1.2 million, or 45.5%, due to the accelerated recognition of debt issuance costs in conjunction with the redemption of $150.0 million of subordinated debt in the first quarter of 2026. Other noninterest expenses increased $2.2 million, or 19.3%, as a result of an increase in donations, insurance expense and credit origination expense.

INCOME TAXES

Linked quarter comparison: In the first quarter of 2026, First Financial recorded income tax expense of $19.1 million on pre-tax income of $93.6 million, resulting in an effective tax rate of 20.4%. This compared to income tax expense of $16.7 million on pre-tax income of $79.1 million and an effective tax rate of 21.2% for the fourth quarter 2025. The lower effective tax rate in the first quarter of 2026 was primarily driven by more tax credit investments recognized and deductions for restricted stock awards vesting during the period.

Year-to-date comparison: For the first three months of 2026, income tax expense was $19.1 million on pre-tax income of $93.6 million, resulting in an effective tax rate of 20.4%. This compared to income tax expense of $12.3 million on pre-tax income of $63.6 million and an effective tax rate of 19.4% for the comparable period in 2025. The higher effective tax rate in 2026 compared to 2025 was primarily driven by higher taxable income, nondeductible charitable contributions and fewer restricted stock awards vesting during the period.

The Company's effective tax rate may fluctuate from period to period due to changes in tax jurisdictions, forecasted income, tax-enhanced assets and tax credit investments.

INVESTMENTS

First Financial's investment portfolio totaled $5.1 billion at March 31, 2026 and $4.2 billion at December 31, 2025, or 22.6% and 19.7% of total assets, respectively. AFS securities totaled $5.0 billion at March 31, 2026 and $4.0 billion at December 31, 2025, while HTM securities totaled $49.6 million at March 31, 2026 and $58.5 million at December 31, 2025. The effective duration of the investment portfolio was 4.3 years at March 31, 2026 and 4.4 years at December 31, 2025.

The Company invests in certain securities whose return is dependent on future principal and interest repayments. As such, these securities carry a certain amount of credit risk. Prior to purchase, First Financial performs a detailed collateral and structural analysis on these securities and strategically invests in asset classes in which First Financial has expertise and experience, as well as a senior position in the capital structure. First Financial continuously monitors credit risk and geographic concentration risk in its evaluation of market opportunities that enhance the overall performance of the portfolio.

During the three months ended March 31, 2026 and 2025, the Company realized $1.3 million and $9.9 million, respectively, of losses on investment securities. The losses recognized in 2026 included a $5.0 million impairment loss on an investment with credit deterioration where the Company determined that it no longer intended to hold the security until the recovery of the amortized cost basis. The losses incurred in 2025 were the result of a strategic repositioning of $164.5 million of the investment portfolio in order to increase future yields.

The Company's Consolidated Financial Statements reflected $191.6 million and $163.9 million of unrealized, after-tax, losses on debt securities as of March 31, 2026 and December 31, 2025, respectively. These unrealized losses were included as a component of equity in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. The increase in unrealized losses was primarily attributed to the increase in the investment portfolio, as well as an increase in interest rates.

Some unrealized losses may be the result of credit deterioration. As of March 31, 2026, First Financial had six AFS securities with credit deterioration totalling $22.5 million, net of $5.6 million unrealized losses, compared to six AFS securities with credit deterioration totalling $20.9 million, net unrealized losses of $9.8 million, as of December 31, 2025. The Company continues to monitor these securities and believes it will receive full par value for these securities.

The Company had net unrealized losses of $4.3 million and $4.2 million on its HTM securities at March 31, 2026 and December 31, 2025, respectively. Similar to the unrealized losses on AFS securities, this decline in unrealized losses was driven by lower interest rates. The unrealized losses on HTM securities have no impact on the Consolidated Financial Statements of the Company.

The Company had $0.2 million of unrealized losses on equity securities recorded in noninterest income for the three months ended March 31, 2026 compared to insignificant unrealized losses for the same period of 2025.

First Financial will continue to monitor loan demand and deposit activity, as well as balance sheet composition, capital sensitivity and the interest rate environment, when considering future investment strategies.

LOANS AND LEASES

Excluding loans held for sale, loan balances increased $70.8 million, or 0.5%, to $13.5 billion as of March 31, 2026 when compared to December 31, 2025. This increase was primarily drive by the acquisition of $264.1 million of loans in the BankFinancial transaction. Broken down by loan type, commercial real estate loans increased $88.9 million, or 2.0%, to $4.5 billion; C&I loans increased $61.5 million, or 1.3%, to $4.7 billion; home equity increased $21.6 million, or 2.2%, to $1.0 billion; finance leases increased by $11.1 million, or 1.7%, to $649.6 million; and credit cards increased $1.0 million, or 1.6%, to $66.4 million. Partially offsetting these increases, construction loans decreased $86.3 million, or 12.7%, to $591.1 million; installment loans decreased $26.4 million, or 14.0%, to $162.3 million. Residential real estate loan balances were relatively stable at $1.8 billion.

First quarter 2026 average loans of $13.6 billion, excluding loans held for sale, increased $797.3 million, or 6.2%, from the fourth quarter 2025. The growth over the linked quarter included the full quarter impact from the Westfield and BankFinancial acquisitions. The increase in average loan balances included an increase of $206.2 million, or 4.9%, in CRE; an increase of $460.7 million, or 10.7%, in C&I; an increase of $117.0 million, or 6.8%, in residential real estate; an increase of $34.7 million, or 3.5%, in home equity; an increase of $12.7 million, or 2.1%, in finance leases; and an increase of $3.0 million, or 1.8%, in installment loans. These increases were partially offset by a decrease of $36.6 million, or 5.4%, in construction real estate.

Compared to the first quarter of 2025, average loans increased $1.9 billion, or 15.9%. The increase from the comparable period in the prior year included an increase of $983.9 million, or 26.0%, in C&I loans; an increase of $428.0 million, or 10.7%, in CRE; an increase of $358.8 million, or 24.3%, in residential real estate; an increase of $157.9 million, or 18.4%, in home equity; an increase of $45.1 million, or 7.7%, in lease financing; an increase of $39.8 million, or 31.3%, in installment loans; and an increase of $3.1 million, or 4.6% in credit cards. Partially offsetting these increases, average real estate construction balances declined $153.8 million, or 19.3%.

In an effort to mitigate credit risk, First Financial routinely reviews its loan portfolio for various concentrations. These reviews consider the Bank's collateral position as well as exposure to a given industry sector. First Financial believes its loan portfolio is sufficiently diversified to provide protection from deterioration in any particular industry or devaluation of a specific collateral type. The following tables, C&I and Owner Occupied Loans by Sector and Investor CRE Loans by property type, provide additional detail behind the Company's C&I and CRE loan portfolios as of March 31, 2026.

Table of Content

C&I and Owner Occupied CRE Loans by Sector (1)

(Dollars in thousands)

(1) Excludes loan marks and loans in process

Investor CRE Loans by Property Type (1)

(Dollars in thousands)

(1) Excludes loan marks and loans in process

Given the potential for stress related to commercial office space, First Financial performed targeted reviews of its exposure to this sector. As of March 31, 2026, First Financial had $389.8 million of loans collateralized by non-owner occupied office space, which represents 2.9% of the total loan portfolio. The overall LTV of the office portfolio at origination was strong, and a majority is located in suburban locations and secured by Class A and Class B assets. As of March 31, 2026, the office portfolio included three nonaccrual relationships totaling $30.9 million, or 7.9% of the total office portfolio.

Loans to NDFI totaled $423.6 million, or 3.1% of total loans, as of March 31, 2026. NDFI include a wide range of financial

entities that provide services similar to those of traditional banks but do not accept deposits from the general public and are not

regulated by the Federal banking agencies. The NDFI balances at March 31, 2026 included $277.1 million in loans to

mortgage credit intermediaries, $123.9 million in loans to business credit intermediaries, and $22.7 million of loans to other

NDFI, such as private equity funds and consumer credit intermediaries. As of March 31, 2026, all of the loans to NDFI had

an internal credit rating of pass.

COMMITMENTS AND CONTINGENCIES

Off-balance sheet arrangements include commitments to extend credit and financial guarantees. Loan commitments are agreements to extend credit to a client absent any violation of any condition established in the commitment agreement. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. First Financial had outstanding commitments to extend credit, including overdraft lending lines, totaling $4.7 billion at March 31, 2026 and $4.5 billion at December 31, 2025. As of March 31, 2026, commitments with a fixed interest rate totaled $92.0 million while commitments with variable interest rates totaled $4.6 billion. At December 31, 2025, commitments with a fixed interest rate totaled $75.0 million while commitments with variable interest rates totaled $4.4 billion. The fixed rate commitments have interest rates ranging from 0% to 21% at both March 31, 2026 and December 31, 2025. The fixed rate commitments have maturities ranging from less than one year to 31.0 years at March 31, 2026 and maturities ranging from less than one year to 31.6 years at December 31, 2025.

Letters of credit are conditional commitments issued by First Financial to guarantee the performance of a client to a third party. First Financial’s letters of credit consist primarily of performance assurances made on behalf of clients who have a contractual commitment to produce or deliver goods or services for the third party. First Financial issued letters of credit aggregating $36.3 million and $36.6 million at March 31, 2026 and December 31, 2025, respectively. Management conducts regular reviews of these instruments on an individual client basis.

First Financial is a party in risk participation transactions of interest rate swaps, which had total notional amount of $360.8 million and $335.0 million at March 31, 2026 and December 31, 2025, respectively. Under a risk participation agreement, the Company either assumes or sells a portion of the credit exposure associated with an interest rate swap with a counterparty. The Company's exposure is limited to instances where the loan customer defaults on its obligation to perform under the interest rate swap agreement.

First Financial is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects. These investments are included in accrued interest and other assets in the Consolidated Balance Sheets, with any unfunded commitments included in accrued interest and other liabilities in the Consolidated Balance Sheets. As of March 31, 2026, First Financial expects to recover its remaining investments through the use of the tax credits generated by the investments. First Financial had unfunded commitments related to tax credit investments of $101.6 million and $103.0 million at March 31, 2026 and December 31, 2025, respectively.

In the ordinary course of business, First Financial and its subsidiaries are parties to litigation, including claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, foreclosure interests that are incidental to our regular business activities and other matters. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of March 31, 2026. Reserves are established for these various matters of litigation, when appropriate, under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had no reserves related to litigation matters as of March 31, 2026 or December 31, 2025.

ASSET QUALITY AND ALLOWANCE FOR CREDIT LOSSES

Loans are classified as nonaccrual when, in the opinion of management, collection of principal and interest is doubtful or when payments are 90 days or more past due. Generally, loans are classified as nonaccrual due to a borrower's continued failure to adhere to contractual payment terms, coupled with other pertinent factors. When a loan is placed on nonaccrual status, any unpaid accrued interest is reversed and the recognition of interest income is suspended.

Nonaccrual loans were $100.5 million, or 0.75% of total loans, as of March 31, 2026, reflecting a $1.3 million, or 1.2%, decline from $101.8 million as of December 31, 2025. Nonperforming assets, which consist of nonaccrual loans and OREO, were

$100.8 million, or 0.44% of total assets, at March 31, 2026 compared to $102.0 million, or 0.48% of total assets, at December 31, 2025.

Classified assets, which are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse, totaled $232.4 million as of March 31, 2026 compared to $235.5 million at December 31, 2025. Classified assets were 1.02% of total assets at March 31, 2026, which declined from 1.11% at December 31, 2025 due to the addition of BankFinancial increasing total assets in the first quarter of 2026. Total classified assets at both March 31, 2026 and December 31, 2025 included a $37.0 million receivable from a customer, which was recorded following the mutually agreed upon termination of a foreign exchange trade. First Financial expects this receivable to be collected in full.

Allowance for credit losses. The ACL is a reserve accumulated on the Consolidated Balance Sheets through the recognition of the provision for credit losses. First Financial records provision expense in the Consolidated Statements of Income to maintain the ACL at a level considered sufficient to absorb expected credit losses for financial assets over their expected remaining lives with consideration given to current and forward-looking information.

The removal or reduction of the recorded values of loans and leases from the Consolidated Balance Sheets due to credit deterioration are referred to as charge-offs. First Financial's policy is to charge-off all or a portion of a loan when, in management's opinion, it is unlikely to collect the principal amount owed in full either through payments from the borrower or from the liquidation of collateral. All loans charged-off are subject to continuous review and concerted efforts are made to maximize any recovery. In most cases, the borrower’s debt obligation is not canceled even though the balance may have been charged-off. Actual losses on loans and leases are charged against the ACL. Any subsequent recovery of a previously charged-off loan is credited back to the ACL.

Management estimates the ACL using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience paired with economic forecasts provide the basis for the quantitatively modeled estimation of expected credit losses. First Financial adjusts its quantitative model, as necessary, to reflect conditions not already considered therein. These adjustments are commonly known as the qualitative framework. The evaluation of these factors is the responsibility of the ACL Committee, which is comprised of senior officers from the risk management, credit administration, finance and lending areas.

The Company utilized the Moody's March baseline forecast as its R&S forecast in the quantitative model at March 31, 2026. For reasonableness, the Company also considered the impact to the model from alternative prepayment speeds and more adverse economic forecasts. These alternative analyses were utilized to inform the Company's qualitative adjustments. Additionally, First Financial considered its credit exposure to certain industries believed to be at risk for future credit stress, such as franchise, hotel and investor commercial real estate lending, when making qualitative adjustments to the ACL model.

The total ACL, which includes both funded and unfunded reserves, was $206.7 million at both March 31, 2026 and December 31, 2025.

ACL - loans and leases. The ACL on loans and leases was $183.7 million as of March 31, 2026 and $186.5 million as of December 31, 2025. As a percentage of total loans, the ACL was 1.36% as of March 31, 2026 and 1.39% at December 31, 2025. At March 31, 2026, the ACL on loans and leases included $2.8 million that was recorded in conjunction with the BankFinancial acquisition.

In the first quarter of 2026, the Company recorded net charge-offs of $11.6 million, or 35 bps of average loans and leases on an annualized basis, compared to net charge-offs of $8.8 million, or 27 bps, for the fourth quarter of 2025 and $10.5 million, or 36 bps, for the first quarter of 2025. This increase in net charge-offs during the first quarter of 2026 was driven by a single commercial relationship.

The ACL as a percentage of nonaccrual loans was 182.7% at March 31, 2026 and 183.2% at December 31, 2025. The decrease in this ratio was driven primarily by the decline in the ACL on loans in leases outpacing the decline in nonaccrual loan balances during the current period.

Provision expense is a product of the Company's ACL model coupled with net charge-off activity during the period. During the first quarter of 2026, the Company recorded $6.0 million of provision expense for loans and leases compared to $9.7 million for the prior quarter and $9.1 million for the first quarter 2025.

ACL - unfunded commitments. The ACL on unfunded commitments was $23.0 million as of March 31, 2026 and $20.2 million as of December 31, 2025. First Financial recorded $2.5 million of provision expense for credit losses on unfunded commitments for the first quarter of 2026, compared to $0.4 million of provision expense in the fourth quarter 2025 and $0.4 million of provision recapture for the first quarter of 2025.

See Note 5 – Allowance for Credit Losses in the Notes to Consolidated Financial Statements for further discussion of First Financial's ACL.

The following table details ACL activity by portfolio segment for the periods presented:

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Allowance for credit loss activity

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Nonperforming assets

DEPOSITS

Total deposits were $17.9 billion as of March 31, 2026, an increase of $1.5 billion, or 9.1%, from December 31, 2025. This increase was primarily driven by the acquisition of BankFinancial which included $1.2 billion in deposit balances. Compared to the prior period, the March 31, 2026 balances for noninterest-bearing deposits increased $517.3 million, or 14.9%; savings deposits increased $487.0 million, or 8.2%; interest-bearing demand deposits increased $297.5 million, or 8.9%; and time deposits increased $195.0 million, or 5.4%.

Average deposits for the first quarter of 2026 were $17.6 billion, which was an increase of $1.7 billion, or 10.6%, from $16.0 billion for the fourth quarter of 2025. Average time deposits increased $363.4 million, or 10.4% from the prior quarter; average savings deposits increased $665.6 million, or 11.6%; average interest bearing demand deposits increased $349.7 million, or 10.7%; and average noninterest-bearing deposits increased $308.3 million, or 9.0%.

Average deposits for the first three months of 2026 increased $3.4 billion, or 23.9%, when compared to the same period of 2025. This change was driven by the BankFinancial acquisition as well as organic growth. The increase in average deposits from the first quarter of 2025 included $1.5 billion, or 30.3%, increase in average savings deposits; a $727.1 million, or 23.1%, increase in average time deposits; a $654.0 million, or 21.2%, increase in average noninterest-bearing deposits; and a $535.6 million, or 17.3%, increase in average interest-bearing demand deposits.

Uninsured deposit balances were $7.4 billion, or 41.3% of total deposits, as of March 31, 2026. The Company reviews uninsured deposits for concentration risk and typically evaluates this risk by excluding public funds and intercompany deposits to arrive at an adjusted uninsured deposit amount. As such, excluding public funds and intercompany accounts, adjusted uninsured deposits were $5.1 billion, or 28.3% of total deposits, at the end of the first quarter.

BORROWINGS

First Financial's short-term borrowings are utilized to manage the Company's normal liquidity needs. These borrowings include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, as well as overnight advances from the FHLB. The Company's long-term borrowings consist of subordinated debt, FRB borrowings, FHLB long-term advances and repurchase agreements utilizing investment securities pledged as collateral.

Borrowed funds were $1.0 billion as of March 31, 2026 and $1.2 billion as of December 31, 2025. The decrease in borrowings was primarily driven by the Company's increase in deposits due to the Westfield and BankFinancial acquisitions.

First Financial had total short-term borrowings of $620.5 million as of March 31, 2026 and $675.3 million as of December 31, 2025. Short-term borrowings with the FHLB were $550.0 million at March 31, 2026 and $675.0 million at December 31, 2025. There were no federal funds purchased included in short-term borrowings at March 31, 2026 or December 31, 2025.

Long-term debt, which may include subordinated notes, FRB/FHLB long-term advances or other borrowings, was $380.2 million at March 31, 2026 and $514.1 million as of December 31, 2025. Outstanding subordinated debt totaled $358.8 million as of March 31, 2026 and $489.9 million as of December 31, 2025.

In 2020, First Financial issued $150.0 million of fixed to floating rate subordinated notes that would have matured in May 2030 and had an initial fixed interest rate of 5.25%. The Company elected to redeem these subordinated notes in whole on the February 2026 interest payment date. Therefore, these notes are not included in the Consolidated Balance Sheet as of March 31, 2026.

In November 2025, First Financial issued $300.0 million of fixed to floating rate subordinated notes. These subordinated notes have an initial fixed interest rate of 6.375% to, but excluding, December 1, 2030, payable semi-annually in arrears. From, and including, December 1, 2030, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to a benchmark rate, which is expected to be the then-current three-month term SOFR, plus 300 basis points, payable quarterly in arrears. These subordinated notes mature on December 1, 2035 and are redeemable by the Company in whole or in part beginning with the interest payment date of December 1, 2030. These subordinated notes are eligible to be treated as Tier 2 capital for 100% of its original issuance amount at March 31, 2026 for regulatory capital purposes.

In conjunction with the BankFinancial transaction, First Financial acquired $18.5 million of fixed to floating rate subordinated notes. These subordinated notes were originated in April 2021 and have an initial fixed interest rate of 3.75% to, but excluding, May 15, 2026, payable semi-annually in arrears. From, and including, May 15, 2026, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to a benchmark rate, which is expected to be the then-current three-month term SOFR, plus 299 basis points, payable quarterly in arrears. These subordinated notes mature on May 15, 2031 and are redeemable by the Company, in whole or in part, on May 15, 2026, on any interest payment date thereafter, and at any time upon the occurrence of certain events. These acquired subordinated notes are eligible to be treated as Tier 2 capital for 100% of its original issuance amount at March 31, 2026 for regulatory capital purposes.

First Financial had no FHLB long-term advances at March 31, 2026 or December 31, 2025. First Financial's total remaining borrowing capacity from the FHLB was $1.4 billion as of March 31, 2026.

See Note 9 – Borrowings in the Notes to Consolidated Financial Statements for further discussion of First Financial's borrowed funds.

LIQUIDITY

Liquidity management is the process by which First Financial manages the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost. These funding commitments include withdrawals by depositors, credit commitments to borrowers, shareholder dividends, share repurchases, operating expenses and capital expenditures. Liquidity is derived primarily from deposit growth, principal and interest payments on loans and investment securities, maturing loans and investment securities, and access to wholesale funding sources.

First Financial’s most stable source of liability-funded liquidity for both long and short-term needs is deposit growth and retention of the core deposit base. In addition to core deposit funding, First Financial also utilizes a variety of other short and long-term funding sources, which include subordinated notes, longer-term advances from the FRB and FHLB and its short-term line of credit.

Both First Financial Bancorp and First Financial Bank received investment grade credit ratings from Kroll Bond Rating Agency, Inc, an independent rating agency. These credit ratings impact the cost and availability of financing to First Financial. A downgrade to these credit ratings could affect First Financial's or the Bank’s abilities to access the credit markets and potentially increase borrowing costs, negatively impacting financial condition and liquidity. Key factors in maintaining high credit ratings include consistent and diverse earnings, strong credit quality and capital ratios, diverse funding sources and disciplined liquidity monitoring procedures. The ratings of First Financial Bancorp and First Financial Bank at March 31, 2026 were as follows:

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For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB. First Financial pledged $6.9 billion of certain eligible residential, commercial and farm real estate loans, home equity lines of credit and government, agency, and commercial mortgage-backed securities as collateral for borrowings from the FHLB as of March 31, 2026.

First Financial's principal source of asset-funded liquidity is marketable investment securities, particularly those of shorter maturities. AFS securities were 99.0% and 98.5% of the total investment portfolio as of March 31, 2026 and December 31, 2025, respectively. The market value of investment securities classified as AFS totaled $5.0 billion at March 31, 2026 and $4.0 billion at December 31, 2025. As of March 31, 2026, $1.9 billion of AFS securities were unpledged and there were $2.1 billion of securities available to be sold at breakeven. Additionally, $520.5 million of AFS securities have floating rates and could be sold with minimal losses at March 31, 2026.

HTM securities that are maturing within a short period of time can be an additional source of liquidity. As March 31, 2026, the Company had $1.2 million of HTM securities maturing within one year. As of December 31, 2025, the Company had $0.7 million HTM securities maturing within one year.

In total, First Financial expects $840.3 million of cash flows from its investment portfolio in the next 12 months.

First Financial maintains diverse funding sources, including Fed Funds, the Fed discount window, brokered CDs, FHLB borrowings and deposit placement services. At March 31, 2026, First Financial had unused and available overnight wholesale funding sources of $6.4 billion, or 28.3% of total assets, to satisfy the liquidity needs of the Company. Additionally, interest-bearing deposits with other banks totaled $1.0 billion at March 31, 2026, with the majority being held at the Federal Reserve. The Company believes these diverse funding sources and related borrowing capacity provide sufficient flexibility to respond to any event that would stress its deposit balances.

First Financial also has a $40.0 million short-term credit facility with an unaffiliated bank that matures in December 2026. This facility has a variable interest rate and provides First Financial additional liquidity, if needed, for various corporate activities including the repurchase of First Financial common stock and the payment of dividends to shareholders. As of both March 31, 2026 and December 31, 2025, First Financial had no outstanding balance. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels. First Financial was in compliance with all covenants associated with this facility as of March 31, 2026 and December 31, 2025. This credit facility also required First Financial to pledge as collateral the Bank's common stock where the lender is granted a security interest in this collateral.

Certain restrictions exist regarding the Bank's ability to transfer funds to First Financial in the form of cash dividends, loans, other assets or advances and the approval of the Bank's primary federal regulator is required to pay dividends in excess of regulatory limitations. Dividends paid to First Financial from the Bank totaled $50.0 million for each of the first three months of 2026 and 2025. As of March 31, 2026, the Bank had retained earnings of $1.0 billion, of which $104.0 million was available for distribution to First Financial without prior regulatory approval. As an additional source of liquidity, First Financial had $198.4 million in cash at the parent company as of March 31, 2026.

Share repurchases also impact First Financial's liquidity. For further information regarding share repurchases, see the Capital section that follows.

Capital expenditures were $13.5 million and $3.8 million for the first three months of 2026 and 2025, respectively. Management believes sufficient liquidity exists to fund its future capital expenditure commitments.

Management is not aware of any other events or regulatory requirements that, if implemented, are likely to have a material effect on First Financial’s liquidity. For a discussion of liquidity risk management, please see the Market Risk section that follows.

CAPITAL

Risk-based capital. First Financial and its subsidiary, First Financial Bank, are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory guidelines. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action.

The Board of Governors of the Federal Reserve System approved Basel III in order to strengthen the regulatory capital framework for all banking organizations. Basel III established and defined quantitative measures to ensure capital adequacy. These measures require First Financial to maintain minimum amounts and ratios of Common equity Tier 1 capital, Total and Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets (Leverage ratio).

The Basel III Final Capital Rules include a minimum ratio of Common equity Tier 1 capital to risk-weighted assets of 7.0%, a minimum ratio of Tier 1 capital to risk-weighted assets of 8.5%, a minimum required Total risk-based capital ratio of 10.5% and a minimum leverage ratio of 4.0%. Failure to maintain the required Common equity Tier 1 capital will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and pay discretionary compensation to its employees. The capital requirements also provide strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans.

First Financial's tier 1 capital increased 90 bps to 12.50% at March 31, 2026 compared to 11.60% at December 31, 2025, while the total capital ratio increased to 15.70% at March 31, 2026 compared to 15.46% at December 31, 2025. The leverage ratio decreased to 9.39% at March 31, 2026 from 9.53% at December 31, 2025. The Company’s tangible common equity ratio increased to 7.87% at March 31, 2026 from 7.79% at December 31, 2025, while the Company's tangible book value per share increased to $16.15 at March 31, 2026 from $15.74 at December 31, 2025. The changes to the Company's capital ratios are primarily a result of the Company's strong earnings.

As of March 31, 2026, management believes that First Financial met all capital adequacy requirements to which it was subject. The Company's most recent regulatory notifications categorized First Financial as "well-capitalized" under the regulatory framework for prompt corrective action. There have been no conditions or events since those notifications that management believes have changed the Company's categorization. Total regulatory capital exceeded the minimum requirement by $838.0 million on a consolidated basis at March 31, 2026.

The following tables present the actual and required capital amounts and ratios as of March 31, 2026 and December 31, 2025 under the Basel III Final Capital Rules. Capital levels required to be considered "well capitalized" are based upon prompt corrective action regulations, as amended by the Basel III Final Capital Rules.

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(Dollars in thousands)

(Dollars in thousands)

Shareholder dividends. First Financial paid a dividend of $0.25 per common share on March 16, 2026 to shareholders of record as of March 2, 2026. Additionally, First Financial's Board of Directors authorized a dividend of $0.25 per common share, payable on June 15, 2026 to shareholders of record as of June 1, 2026.

Share repurchases. Effective January 2024, First Financial's Board of Directors approved a stock repurchase plan (the 2024 Repurchase Plan), replacing the 2022 Repurchase Plan which expired in December of 2023. The 2024 Repurchase Plan was in effect for two years and authorized the purchase of up to 5,000,000 shares of the Company's common stock. The 2024 Repurchase Plan expired in December 2025. First Financial did not repurchase any shares during 2025, 2024 or 2023.

Effective April, 2026, First Financial's Board of Directors approved a stock repurchase plan (the 2026 Stock Repurchase Plan). The 2026 Stock Repurchase Plan authorizes the purchase of up to 5,000,000 shares of the Company's common stock and will expire on December 31, 2027. At March 31, 2026, no common shares were yet available for repurchase under the 2026 Stock Repurchase Plan.

Shareholders' equity. Total shareholders’ equity was $2.9 billion at March 31, 2026 and $2.8 billion at December 31, 2025. The increase from year-end was due to the Company's strong earnings.

For further detail, see the Consolidated Statements of Changes in Shareholders’ Equity.

ENTERPRISE RISK MANAGEMENT

First Financial manages risk through a structured ERM approach that routinely assesses the overall level of risk, identifies specific risks and evaluates specific actions to mitigate those risks. First Financial continues to enhance its risk management capabilities and has embedded risk awareness into the culture of the Company. First Financial has identified eleven types of risk that it monitors in its ERM framework. These risks include financial, credit, liquidity, capital, market (including interest rate and capital markets), regulatory compliance and legal, strategic, reputation, operational, information technology, and cybersecurity.

For a full discussion of these risks, see the Enterprise Risk Management section in Management's Discussion and Analysis in First Financial’s 2025 Annual Report on Form 10-K. The sections that follow provide additional discussion related to credit risk and market risk.

CREDIT RISK

Credit risk represents the risk of loss due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms. First Financial manages credit risk through its underwriting and ongoing administration practices, periodically reviewing and approving its credit exposures using credit policies and guidelines approved by the Board of Directors. Quarterly independent loan review and CRM coverage assessments are performed, with risk ratings, loan downgrades, and policy exceptions tracked in the CRM scorecard, in alignment with internal policies and regulatory guidance.

MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, foreign exchange rates and equity prices. The primary sources of market risk for First Financial are interest rate risk and liquidity risk.

Interest rate risk. Interest rate risk is the risk to earnings and the value of the Company's equity arising from changes in market interest rates. Interest rate risk arises in the normal course of business to the extent that there is a divergence between the amount of interest-earning assets and the amount of interest-bearing liabilities that are prepaid, withdrawn, re-priced or mature in specified periods. First Financial seeks to achieve consistent growth in net interest income and equity while managing volatility from shifts in market interest rates, while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.

Potential cash flows, sales, or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily from the Company's normal business activities of gathering deposits and extending loans. Many factors affect our exposure to changes in interest rates, such as general economic and financial conditions, client preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. The Company's earnings can also be affected by the monetary and fiscal policies of the U.S. Government and its agencies, particularly the Federal Reserve.

In managing interest rate risk, the Company establishes guidelines and strategies for asset and liability management, including measurement of short and long-term sensitivities to changes in interest rates, through its Balance Sheet Strategies and ALCO, which is comprised of senior officers from the treasury, risk management, credit administration, finance and lending areas. These guidelines and strategies are also reviewed with the Capital Markets Committee of the Board of Directors.

First Financial monitors its interest rate risk position using income simulation models and EVE sensitivity analyses that capture both short-term and long-term interest rate risk exposure. Income simulation involves forecasting NII under a variety of interest rate scenarios. EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest rate scenarios. First Financial uses EVE sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital. For both NII and EVE modeling, First Financial leverages instantaneous parallel shocks to evaluate interest rate risk exposure across rising and falling rate scenarios. Additional scenarios evaluated include various non-parallel yield curve twists.

First Financial’s interest rate risk models are based on the contractual and assumed cash flows and repricing characteristics for the Company’s assets, liabilities and off-balance sheet exposure. A number of assumptions are also incorporated into the interest rate risk models, including prepayment behaviors and repricing spreads for assets in addition to attrition and repricing rates for liabilities. Assumptions are primarily derived from behavior studies of the Company’s historical client base and are continually refined. Modeling the sensitivity of NII and EVE to changes in market interest rates is highly dependent on the assumptions incorporated into the modeling process.

Non-maturity deposit modeling is particularly dependent on the assumption for repricing sensitivity known as a beta. Beta is the amount by which First Financial’s interest bearing non-maturity deposit rates will increase when short-term interest rates rise. The Company utilized a weighted average deposit beta of 46% in its interest rate risk modeling as of March 31, 2026. First Financial also includes an assumption for the migration of non-maturity deposit balances into CDs and money markets for all upward rate scenarios beginning with the +100 bps scenario, thereby increasing deposit costs and reducing asset sensitivity.

Presented below is the estimated impact on First Financial’s NII and EVE position as of March 31, 2026, assuming immediate, parallel shifts in interest rates:

“Risk-neutral” refers to the absence of a strong bias toward either asset or liability sensitivity. “Asset sensitivity” is when a company's interest-earning assets reprice more quickly or in greater quantities than interest-bearing liabilities. Conversely, “liability sensitivity” is when a company's interest-bearing liabilities reprice more quickly or in greater quantities than interest-earning assets. In a rising interest rate environment, asset sensitivity results in higher net interest income while liability sensitivity results in lower net interest income. In a declining interest rate environment, asset sensitivity results in lower net interest income while liability sensitivity results in higher net interest income.

The projected results for NII and EVE reflect an asset sensitive position. Deposit growth remains concentrated in rate sensitive product types and is modestly decreasing asset sensitivity. Variances in the sensitivity between up and down scenarios are driven by an assumed compositional shift in the funding makeup of the rate scenarios. First Financial continues to manage its balance sheet with a bias toward asset sensitivity while simultaneously balancing the potential earnings impact of this strategy.

First Financial continually evaluates the sensitivity of its interest rate risk position to modeling assumptions. The following table reflects First Financial’s estimated NII sensitivity profile as of March 31, 2026 assuming a 25% increase and a 25% reduction to the beta assumption on managed rate deposits:

See the Net Interest Income section of Management’s Discussion and Analysis for further discussion.

Liquidity risk. Liquidity risk is the potential that an entity will be unable to meet its obligations as they come due because of an inability to liquidate assets, or obtain funding or that it cannot easily unwind or offset exposures without significantly lowering market prices because of inadequate market depth or market disruptions. Management focuses on maintaining and enhancing liquidity by maximizing collateral-based liquidity availability. First Financial manages liquidity in relation to the trend and stability of deposits; degree and reliance on short-term, volatile sources of funds, including any undue reliance on borrowings or brokered deposits to fund longer-term assets. Management identifies, measures, monitors and manages liquidity while seeking to maintain diversification of funding sources, both on- and off-balance-sheet.

Management, including the Balance Sheet Strategies and ALCO, monitors liquidity through a regular review of asset and liability maturities, funding sources, and loan and deposit forecasts. The Company continually refines and updates its liquidity risk management processes, such as refining the contingency funding plan, meeting frequently, and securing additional contingent borrowing capacity. The Company maintains strategic and contingency liquidity plans to ensure sufficient available funding to satisfy requirements for balance sheet growth, properly manage capital market funding sources and to address unexpected liquidity requirements.

Management closely monitors the usage of excess business deposits, the balance of personal deposits and the broader macroeconomic environment. This monitoring includes consideration of various metrics and establishment of internal thresholds related to the composition of the balance sheet, borrowings and liquidity. Balance sheet composition metrics reviewed include the loan to deposit, loans to total assets and core deposits to total assets ratios among others. Borrowing composition monitoring includes, but is not limited to, consideration of borrowing capacity as a percentage of total assets, brokered CDs as a percentage of total assets and Fed funds lines to total assets. Liquidity composition ratios include remaining liquidity to total assets, and tier 1 liquidity sources as a percentage of both 30 and 90 day maturing liabilities, among others. As of March 31, 2026, all metrics reviewed were within the Company's policy limits.

The Company utilizes its contingency funding plan to assess the ability of the Company to successfully navigate significant liquidity events. The contingency funding plan considers various sources of liquidity, including loan and deposit growth rates, decreasing access to secured and unsecured wholesale funding sources and declining financial performance, to determine First Financial’s ability to meet liquidity requirements over certain time horizons and in certain stress scenarios. The contingency funding plan also includes the process for creating a CFTF. During a liquidity crisis, the CFTF, via the Balance Sheet Strategies and ALCO, would assess and identify key mitigation strategies needed for addressing a liquidity crisis. These mitigation strategies would be assigned to appropriate personnel for implementation with established targets and reporting requirements. Typical mitigation strategies would include, but not be limited to, curtailing loan originations, pricing options for stabilizing/growing deposits, options for expanding wholesale funding sources and asset liquidation options.

For further discussion of the Company's liquidity, please see the Liquidity section within Management's Discussion and Analysis.

CRITICAL ACCOUNTING ESTIMATES

First Financial’s Consolidated Financial Statements are prepared based on the application of the Company's accounting policies. These policies require the reliance on estimates and assumptions which are inherently subjective and may be susceptible to significant change. Changes in underlying factors, assumptions or estimates could have a material impact on First Financial’s future financial condition and results of operations. In management’s opinion, some of these estimates and assumptions have a more significant impact than others on First Financial’s financial reporting. For First Financial, these estimates and assumptions include accounting for the ACL - loans and leases, goodwill and income taxes. The estimates and assumptions are discussed in detail in the Critical Accounting Estimates section of Management’s Discussion and Analysis in First Financial’s 2025 Annual Report. There were no changes to the accounting estimates and assumptions for the ACL, goodwill or income taxes during the three months ended March 31, 2026.

ACCOUNTING AND REGULATORY MATTERS

Note 2 - Recently Adopted and Issued Accounting Standards in the Notes to Consolidated Financial Statements discusses new accounting standards adopted by First Financial in 2026 and 2025, as well as the expected impact of accounting standards issued but not yet adopted. To the extent the adoption of new accounting standards materially affects financial condition, results of operations or liquidity, the impacts are discussed in the applicable Notes to the Consolidated Financial Statements and sections of Management’s Discussion and Analysis.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ‘‘believes,’’ ‘‘anticipates,’’ “likely,” “expected,” “estimated,” ‘‘intends’’ and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make about (i) our future operating or financial performance, including revenues, income or loss and earnings or loss per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements.

As with any forecast or projection, forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may cause actual results to differ materially from those set forth in the forward-looking statements. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Important factors that could cause actual results to differ materially from those in our forward-looking statements include the following, without limitation:

• economic, market, liquidity, credit, interest rate, operational and technological risks associated with the Company’s business;
• future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses
• the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry;
• Management’s ability to effectively execute its business plans;
• mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;
• the possibility that any of the anticipated benefits of the Company’s acquisitions will not be realized or will not be realized within the expected time period;
• the effect of changes in accounting policies and practices;
• changes in consumer spending, borrowing and saving and changes in unemployment;
• changes in customers’ performance and creditworthiness;
• the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
• current and future economic and market conditions, including the effects of changes in housing prices, fluctuations in unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, trade and tariff policies, and any slowdown in global economic growth;
• our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
• financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
• the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
• the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses;
• a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;
• the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and
• our ability to develop and execute effective business plans and strategies.

Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in our Form 10-K for the year ended December 31, 2025, as well as our other filings with the SEC, which are available on the SEC website at www.sec.gov (http://www.sec.gov).

All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, the Company does not assume any obligation to update any forward-looking statement.

The information contained in “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk” of this report is incorporated herein by reference in response to this item.

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under

Rule 13a-15 of the Securities Exchange Act of 1934, that are designed to cause the material information required to be disclosed by First Financial in the reports it files or submits under the Securities Exchange Act of 1934 to be recorded, processed, summarized, and reported to the extent applicable within the time periods required by the Securities and Exchange Commission’s rules and forms. In designing and evaluating the disclosure controls and procedures, management recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

As of the end of the period covered by this report, First Financial performed an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in First Financial's internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, First Financial's internal control over financial reporting.

There are a number of factors that may adversely affect the Company's business, financial results, or stock price. See "Risk Factors" as disclosed in response to "Item 1A. to Part I - Risk Factors" of Form 10-K for the year ended December 31, 2025.

There have been no material changes from the risk factors previously disclosed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.