FFBC 10-K & 10-Q changes, risk factors and insider trading

The risks listed here are not the only risks we face. Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material effect on our financial condition, results of operations, business and prospects. You should carefully consider the following risk factors that may affect our financial condition, results of operations, business and prospects. You should carefully consider the following risk factors that may affect our financial condition, results of operations, business and prospects. Additionally, the aggregate impact of multiple risk factors, whether presently deemed material or immaterial, could similarly result in a material effect on our financial condition, results of operations, business and prospects. (See also “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for certainadditional discussion of forward looking statements.statements that could result in a material effect on our financial condition, results of operations, business and prospects.)

Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us. Our success depends, in part, on economic and political conditions, local and national, as well as governmental fiscal and monetary policies. Conditions such as inflation, deflation, recession, unemployment, changes in interest rates, tariffs, fiscal and monetary policy and other factors beyond our control may affect our deposit levels and composition, demand for loans and other products and services, the ability of borrowers to repay their loans and the value of the collateral securing the loans it makes. Economic turmoil in different regions of the world, as well as military conflicts such as those currently ongoing in UkraineRussia, andUkraine, the Middle East, China, and Venezuela affect the economy and stock prices in the United States, which can affect our earnings and capital and the ability of our customers to repay loans.

TheU.S. newtrade Presidentialpolicies administrationand hasinternational statedeconomic itsrelationships intentioncontinue to scrutinizeevolve, including potential changes to trade agreements and tariffs. Such changes may contribute to economic uncertainty and could negatively affect financial markets, supply chains, and the United States’ trade relationships with its economic partners, indicated an interest in renegotiating trade agreements, and stated a willingness to implement tariffs with someperformance of the UnitedCompany’s States’ trade partners which could lead to trade wars. These statements by the administration have signaled a change in the United States’ economic policies,customers and it is not clear which policies, if any, will be implemented and what effect these policies may have on the local, national, and global economy.markets. Trade wars and tariffs can affect the economy and stock prices in the United States and can impact the costs of goods paid by customers, which can affect our deposit levels and concentration, the demand for loans and other products and services and the ability of our customers to repay outstanding loans, which could adversely affect our financial condition and the results of operations.

If the strength of the United States economy declines, this could result in, among other things, a deterioration of credit quality, altered consumer spending habitshabits, decreased deposit balances maintained by our customers, or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for credit losses. WhileAlthough the Federal Reserve beganeased cuttingmonetary policy in 2025 with a series of rate cuts that brought the target fedfederal funds range down to 3.50% – 3.75% by year-end, policymakers paused rate reductions in 2024,early there2026 areand nosignaled assurancespatience thatin itsetting willfuture continuepolicy toas cutinflation remains elevated and labor market signals evolve. Despite these reductions, the targetfuture fedpath fundsof rateinterest rates remains uncertain. Market and policy forecasts have not settled on expectations in 2025the andcoming ityear. may remain open to increasing rates further should inflation dynamics remain unfavorable. ThisA scenario ofin higherwhich short-term interest rates remain elevated for a longer period than currently anticipatedanticipated, byor marketrise participantsagain (“higherin forresponse longer”),to alonginflation withor other factors,macroeconomic developments, could alsoincrease resultstress inon borrowers, potentially leading to higher delinquencies and greater charge-offs inand futureadversely periods, which could materially affectaffecting our financial condition and results of operations. In addition, earnings sensitivity may be driven not only by rate levels but also by rate volatility and speed of rate changes, which may reduce hedge effectiveness and pressure margins.

Changes in market interest rates or financial markets could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity. Given the nature of our business, and the fact that most of our assets and liabilities are financial in nature, we tend to be sensitive to market interest rate movements and the performance of the financial markets. Our primary source of income is net interest income, which is the difference between the interest income generated by our interest-earning assets (consisting primarily of loans and, to a lesser extent, securities) and the interest expense generated by our interest-bearing liabilities. Prevailing economic conditions, fiscal and monetary policies and the policies of various regulatory agencies all affect market rates of interest and the availability and cost of credit, which, in turn, significantly affect financial institutions’ net interest income. If the interest we pay on deposits and other borrowings increases at a faster rate than increases in the interest we receive on loans and investments, net interest income, and, therefore, our earnings, could be affected. Earnings and capital levels could also be affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings.

During 2025, the Federal Reserve implemented a series of rate cuts that decreased the target fed funds rate by 75 basis points. Although we have implemented procedures we believe will reduceprepare us for the potential effects of changes in interest rates on our results of operations, these procedures may not always be successful. In addition, any substantial or prolonged change in market interest rates could affect our financial condition, results of operations and liquidity. During 2024, the target fed funds rate decreased by 100 basis points. Because our balance sheet is asset sensitive, these interest rate decreases resulted in a decline in our net income in 2024.

Local economic factors may adversely affect our business and the results of our operations. Our community banking business model and local market focus has led to a concentration in the markets in which we operate, namely Indiana, Ohio, Kentucky and Illinois. As a result of this geographic concentration, our results of operations are largely dependent on economic conditions in these local markets. Changes to the economic conditions in these local markets, which may be different from the national economic conditions, may adversely affect our financial condition and thecondition, results of ouroperations, operations.and business prospects.

Our loan portfolio and investments in mortgage-backed securities consist of a significant number of loans secured by real estate and other assets, the value of which can be affected by national and local market conditions. We offer a variety of secured loans, including commercial lines of credit, commercial term loans, real estate, construction, home equity, consumer and other loans and hold as investments a number of mortgage-backed securities, including collateralized mortgage obligations. Many of our loans are secured by real estate (both residential and commercial) within our market area. A major change in the real estate market, such as deterioration in the value of collateral, or in the local or national economy, could affect our customers' ability to pay these loans, which in turn could impact our results of operations and financial condition. Additionally, increases in unemployment also may affect the ability of certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment, may result in loan defaults and foreclosures and may impair the value of our collateral. Increases in loan defaults may also lead to additional losses in our investments in mortgage-backed securities, including collateralized mortgage obligations.

Loan defaults and foreclosures are unavoidable in the banking industry, and we try to limit our exposure to this risk by monitoring carefully our extensions of credit. In 2024, our classifiedClassified asset balances increased $83.1$11.4 million, drivenor by5.1%, ato $45.0$235.5 million assetat thatDecember was31, recorded2025 followingfrom $224.1 million at December 31, 2024. The change in classified assets during 2025 included $20.4 million of loans rated substandard or worse acquired in the mutuallyWestfield agreedtransaction. uponAbsent terminationthe impact from Westfield, classified assets declined $9.0 million during 2025 as resolutions of aclassified foreignassets exchangeoutpaced trade,downward ascredit wellmigration asduring the downgradeperiod. of three commercial real estate loans, one commercial and industrial loan and one construction loan. ContinuedAny increases in our classified asset balances and/or an increase in loan defaults may also increase our costs associated with servicing these loans, foreclosing on properties and costs of property maintenance on foreclosed properties. We cannot fully eliminate credit risk, and as a result, credit losses may increase in the future and impact our financial condition and results of operations.

Weakness in the secondary market for residential mortgage loans could affect our financial condition and results of operations. Declines in demand for residential mortgage loans, changed government laws or regulations or other disruptions in the secondary market for residential mortgage loans can limit the market for and liquidity of many mortgage loans that we seek to sell in the secondary market. The effects of these disruptions to the secondary market for residential morgagemortgage loans, as well as reductions in residential real estate market prices and declining home sales, could affect the value of collateral securing mortgage loans that we hold, income generated from mortgage loan originations and profits on sales of mortgage loans in the secondary market. Such conditions could result in higher losses or charge-offs in our mortgage loan portfolio and other lines of business. Declines in real estate values, home sale volumes, financial stress on borrowers as a result of job losses, interest rate resets on adjustable rate mortgage loans or other factors, either independently or in the aggregate could have further effects on borrowers that could result in higher delinquencies and greater charge-offs in future periods, which would affect our financial condition orcondition, results of operations.operations, business and/or prospects. A decline in home values or overall economic weakness could also have an impact upon the value of real estate or other assets which we own upon foreclosing a loan and our ability to realize value on any subsequent sale of such assets.

Our financial instruments carried at fair value expose us to certain market risks. We maintain an available-for-sale investment securities portfolio, which includes assets with various types of instruments and maturities. At times, we also maintain certain assets that are classified and accounted for as trading assets. The changes in fair value of available-for-sale securities are recognized in shareholders' equity as a component of other comprehensive income, and these securities typically decrease in value when market interest rates rise. The changes in fair value of financial instruments classified as trading assets are carried at fair value with changes in fair value recognized in earnings. The fair value of financial instruments carried at fair value is exposed to market risks related to changes in interest rates and market liquidity. We manage the market risks associated with these instruments through broad asset/liability management strategies. Changes in the market values of these financial instruments or conditions that would require us to dispose of these investment securities earlier than anticipated could have a material impact on our financial condition or results of operations. We may classify additional financial assets or financial liabilities at fair value in the future.

When we loan money, commit to loan money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, or the risk of loss if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts. Since lending is one of our primary business activities, the credit quality of our portfolio can have a significant impact on our earnings. We estimate and establish reserves for credit risks we reasonably expect to occur over the expected life of our loan portfolio. This process, which is critical to our financial results and condition, requires difficult, subjective and complex judgments, including reviews of economic conditions and how these economic conditions might impair the ability of our borrowers to repay their loans. As is the case with any such assessments, there is always the chance that we will fail to identify the proper factors, that we will fail to accurately estimate the impacts of factors that we identify, or that we fail to accurately estimate the aggregate impacts of factors that we identify, all of which could impact the credit quality of our portfolio and have an impact on the results of operations. In addition, large loans, letters of credit and contracts with individual counterparties in our portfolio magnify the credit risk that we face, as the impact of large borrowers and counterparties not repaying their loans or performing according to the terms of their contracts has a disproportionately significant impact on our credit losses, reserves and the results of operations. Certain segments of commercial real estate, including office properties, continue to experience elevated vacancy rates and refinancing pressure, which may reduce collateral values and increase default risk.

The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an effect on our financial condition, results of operations and business. In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements and other financial information. We also may rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Nonetheless, in the near-term, highersustained interest rates along with elevated costs are expected to weigh on firms’ profit margins. Although we regularly review our credit exposure to specific clients and counterparties and to specific industries that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to detect, such as fraud. Moreover, such circumstances, including fraud, may become more likely to occur or be detected in periods of general economic uncertainty. We may also fail to receive full information with respect to the risks of a counterparty. In addition, in cases where we have extended credit against collateral and/or guarantees, we may find that we are under-secured, for example, as a result of sudden declines in market values that reduce the value of collateral or due to fraud with respect to such collateral or the ability of a guarantor to fulfill its financial obligations. If such events or circumstances were to occur, it could result in a potential loss of revenue,revenue and increase in recovery costs andwhich could have an effect on our business,financial condition, results of operations and financial condition.business.

We maintain an allowance for credit losses that we believe is a reasonable estimate of the expected losses over the expected life of the loan portfolio based on a CECL model. We believe that our allowance for credit losses is maintained at a level adequate to absorb expected losses over the life of the loans in the loan portfolio as of the corresponding balance sheet date. However, our allowance for credit losses may not be sufficient to cover actual credit losses, and future provision for credit losses could materially affect our operating results. The accounting measurements related to the allowance for credit losses require significant estimates which are subject to uncertainty and change related to new information and changing circumstances. Management estimates the allowance 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. CECL estimates are sensitive to economic forecast assumptions, including unemployment, interest rates, and property valuations. Changes in forecasts may produce volatility in provision expense and earnings. We adjust our quantitative model, as necessary, to reflect conditions not already considered by such model. Our estimates of the risk of loss and amount of loss on any loan are complicated by the significant uncertainties surrounding our borrowers’ abilities to successfully execute their business models through changing economic environments, competitive challenges and other factors. Because of the degree of uncertainty with respect to assumptions in our models and susceptibility of these factors to change, our actual losses may vary from our current estimates.

In addition, bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further loan charge-offs. The accounting guidance requires banks to record, at the time of origination, credit losses expected throughout the life of the asset on loans, leases and held-to-maturity debt securities. Under the CECL model, we are required to use historical information, current conditions and reasonable and supportable forecasts to estimate the expected credit losses. If the methodologies and assumptions we use in the CECL model prove to be incorrect, or inadequate, the allowance for credit losses may not be sufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on our financial condition and results of operations. We adopted the CECL accounting guidance in 2020 and recognized a one-time cumulative effect adjustment to our allowance for credit losses and retained earnings as of January 1, 2020. Concurrent with the enactment of the CARES Act, federal bank regulatory agencies issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL. The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay.

We adopted CECL in the first quarter of 2020, including the regulatory phase-in. As a result of CECL, our financial results may be negatively affected as soon as weak or deteriorating economic conditions are forecasted and alter our expectations for credit losses. In 2022,2025, we recorded $6.7$36.5 million of provision expense ason ourloans and leases due to net charge-offs and loan portfolio grew and the overall duration of the portfolio extended due to rising interest rates. In 2023, we recorded $43.1 million of provision expense as our loan portfolio grew, net charge-offs increased and the overall duration of the portfolio extended due to rising interest rates and slower loan prepayments. In 2024, we recorded $49.2 million of provision expense as our loan portfolio grew and the overall duration of the portfolio extended due slower loan prepayments.growth. Depending upon future circumstances, as well as broader macroeconomic shifts, we may incur significant provision expense for credit losses in future periods.

Our foreign exchange business plays a crucial role in facilitating various financial transactions, including foreign exchange, interest rate, and commodity hedging for our commercial clients and is largely dependent upon a small number of large clients and market volatility that could adversely affect our financial condition, results of operations, and reputation. In August 2019, First Financial acquired Bannockburn, which engages in various capital markets activities as part of its matched book business encompassing foreign exchange, interest rate, and commodity hedging transactions.

•Concentration risk: Bannockburn’s business model relies, to some extent, upon a small number of large clients. The loss of one or more of these large clients would adversely affect the revenue derived from Bannockburn. Revenue concentration among a limited number of counterparties may make earnings from Bannockburn more volatile and we may see a negative impact on our financial condition or results of operations should we lose or see reduced activity from any of these large clients.

•Market risk: Foreign currency and commodities transactions expose us to market risk, including fluctuations in foreign exchange rates, interest rates, and commodity prices. These fluctuations could result in financial losses or decreased revenues or additional liquidity needs if we fail to accurately predict or manage these risks. Foreign currency and commodities transactions historically increase as market volatility increases. Sustained periods of stability in global financial markets could also adversely affect Bannockburn’s revenue.

•Credit risk: We are exposed to credit risk through our dealings with counterparties in derivative transactions. While we have risk management policies and procedures in place to mitigatemanage credit risk, the failure of counterparties to fulfill their obligations could lead to financial losses or damage to our reputation.

•Liquidity risk: The nature of our capital markets operations requires us to maintain sufficient liquidity to meet our obligations, including margin calls and settlement requirements. ASudden suddenincreases in collateral or unexpectedmargin increaserequirements induring periods of market volatility may create additional liquidity needsneeds, which could strain our resources and negatively impact our financial position.

•Political risk: Our foreign exchange business is also susceptible to the risk that political events or changes in government policies, such as renegotiated trade agreements or tariffs, could negatively impact the bank's matched book business. For additional discussion related to political risks, please see the Risk Factor titled “Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us.”

We rely on other companies to provide key components of our business infrastructure, creating risks of failures or disruptions by such companies and cybersecurity incidents which may involve our customers’ information. Digitalization and technological innovation continue to advance the trend of banks outsourcing technology operations and entering partnerships or other arrangements with third parties. Third parties provide key components of our business infrastructure, such as processing and internet connections and network access. These vendors also provide services that support our operations, including the storage and processing of sensitive consumer and business customer data, as well as our sales efforts. Any disruption in such services provided by these third parties, any failure of these third parties to handle current or higher volumes or any failure of third parties to perform in accordance with their agreements with us could affect our ability to deliver products and services to clients and to efficiently and effectively conduct our business. Technological or financial difficulties of a third-party service provider could affect our business to the extent such difficulties result in the interruption or discontinuation of services provided by that party, and could lead to potential regulatory issues, reputational harm and impact the results of our operations.

AIn addition, a cybersecurity breach of a vendor's system may result in theft of our data or disruption of business processes. Increased use of artificial intelligence (AI) by vendors can further increase the risks of a cybersecurity breach, as discussed in the Risk Factor titled “The increased use and capacity of AI, Generative AI, large language models (LLMs), and AI agents by customers, vendors and competitors increases risks to our business.” A material breach of customer data security at a service provider's site may negatively impact our business reputation and cause a loss of customers, result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions, and possibly litigation. We may experience liability to our customers for losses arising from a breach of a vendor's data security system. We rely on our outsourced service providers to implement and maintain prudent cybersecurity controls. Furthermore, we may not be insured against all types of losses as a result of third-party failures, and our insurance coverage may be inadequate to cover all losses resulting from system failures or other disruptions. Failures in our business infrastructure could interrupt our operations, cause reputational harm, increase the costs of doing business and impact the results of our operations. In certain cases, a limited number of vendors provide critical or specialized services, and disruption, pricing changes, financial stress, or service degradation at one of these providers could have a disproportionate impact on our operations. The Company’s business continuity and disaster recovery planning addresses disruption in critical vendors.

As part of our business, we collect, process, and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties. Despite the security measures we have in place, our facilities and systems, and those of our third party service providers, may be vulnerable to security breaches, acts of fraud, acts of vandalism, computer viruses, malware, ransomware, theft of information, misplaced or lost data, programming and/or human errors, or other similar events. Ransomware actors continue to affect the sector by targeting banks and their third parties. These attacks have the potential to affect banks and market operations by rendering critical data inaccessible as well as by threatening the confidentiality of customer data obtained by these bad actors or through data leaks. If information security is breached, information can be lost or misappropriated, resulting in financial loss or costs to us or damages to others. Our systems can be rendered inoperable, resulting in our inability to provide service to our customers. Any security breach involving the misappropriation, loss, destruction or unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, lead to a loss of customers, expose us to the risk of litigation and liability, result in regulatory fines, penalties, or orders, disrupt our operations and have a material effect on our business, our financial condition and the results of our operations.

Any of these occurrences could result in our diminished ability to operate one or more of our businesses, potential civil liability, reputational damage and regulatory intervention in the form of requirements, restrictions and penalties, which could affect us our businessfinancial andcondition, results of operations.operations and business.

Additionally, we could be affected if one of our employees or a third-party service provider causes a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems. We are also at risk of an impact on our systems and operations from natural disasters, accidents outside of our control, terrorism, international hostilities, and other exceptional or outlier events outside of our control. Increasing electricity demand, including from data centers and industrial activity, is placing pressure on regional power grid operators, including PJM Interconnection LLC, which serves many of the markets in which we operate, and prolonged or widespread power disruptions could adversely affect our facilities, third-party service providers, customers, and business continuity. Such events can impact operational systems operated by us or others on which we rely and can result in an impact to our business operations and subsequent impacts to our financial condition and results of operations.

In addition, continuing cyberattacks and current geopolitical tensions highlight the importance of heightened threat monitoring and safeguarding against disruptive attacks targeting the financial sector. There have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts. There have also been increased instances of scammers who target and socially engineer clients to gain access to their accounts to conduct transactions or convinceinduce customers to initiateauthorize fraudulent transactions for the scammers’ benefit. Although we have commercially reasonable policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers. SuchAI activitytools canmay resultalso inbe financialutilized liabilityby bad actors to usincrease and/orthe our customerssophistication and harmspeed of cyberattacks and fraud attempts. For more information on the risks associated with AI, see the Risk Factor titled “The increased use and capacity of AI, Generative AI, large language models (LLMs), and AI agents by customers, vendors and competitors increases risks to our reputation and impact the results of our operations.business.”

Our liquidity is dependent upon our ability to receive dividends from our subsidiaries, which accounts for most of our revenue and could affect our ability to pay dividends, and we may be unable to provide liquidity from other sources. We are a separate and distinct legal entity from our subsidiaries, notably the Bank. We receive substantially all of our revenue from dividends from our subsidiaries. These dividends are the principal source of funds to pay dividends on our common shares and interest and principal on outstanding debt. Various federal and/or state laws and regulations limit or restrict the amount of dividends that the Bank and certain of our non-bank subsidiaries may pay us. Additionally, if our subsidiaries’ earnings are not sufficient to make dividend payments to us while maintaining adequate capital levels, we may not be able to make dividend payments to our common shareholders. As of December 31, 2024,2025, the Bank had $255.9$193.6 million available to pay dividends to First Financial without prior regulatory approval.

As of December 31, 2024,2025, we had indebtedness of $1.1$1.2 billion which was aan decreaseincrease from $1.3$1.1 billion in 20232024. inThis largeincrease partwas dueprimarily a result of the Company's overall balance sheet management strategies subsequent to anthe increaseWestfield in deposits.acquisition. If deposits were to decrease, we may need to incur additional indebtedness to ensure that we have adequate levels of liquidity.

First Financial Bancorp. is a $22.8$22.4 billion financial holding company headquartered in Cincinnati, Ohio. The Company primarily operates through First Financial Bank, an Ohio-chartered commercial bank with 153151 full service banking centers as of MarchJune 31,30, 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$4.6 billion in assets under management as of MarchJune 31,30, 2026, and provides theservices followingthat services:include financial planning, investment management, trust administration, estate settlement, business succession planning services, brokerage services and retirement planning.

The primary components of First Financial’s operating results for the three and six month periodperiods ended MarchJune 31,30, 2026 are discussed in greater detail in the sections that follow.

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. During the second quarter of 2026, the Company consolidated two of the acquired BankFinancial locations as part of its ongoing integration efforts and evaluation of the combined branch network.

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 acquired and sold prior toduring the endfirst quarter of the quarter,2026, they had no impact on the Company's StatementConsolidated ofBalance Condition at March 31, 2026.Sheet.

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 Purchaseterms Agreement,of the transaction, 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.acquisition, Thisand this banking center opened during the first quarter of 2026.

Linked quarter comparison: FirstSecond quarter 2026 net income was $76.5 million and earnings per diluted common share were $0.73. This compares with first quarter 2026 net income of $74.4 million and earnings per diluted common share wereof $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 1.37% for the second quarter of 2026 compared to 1.34% for the first quarter of 2026 compared to 1.22% for the fourth quarter of 2025.2026. Return on average shareholders’ equity was 10.39% for the second quarter of 2026 compared to 10.24% for the first quarter of 2026 compared to 9.18% for the fourth quarter of 2025.2026.

Year-to-date comparison: For the threesix months ended MarchJune 31,30, 2026, net income was $74.4$150.9 million and earnings per diluted common share were $0.71.$1.44. This compares with net income of $51.3$121.3 million and earnings per diluted common share of $0.54$1.27 for the first threesix months of 2025. Return on average assets for the threesix months ended MarchJune 31,30, 2026 was 1.34%1.36% compared to 1.13%1.33% for the same period in 2025, and return on average shareholders' equity was 10.24%10.32% and 8.46%9.83% for the first threesix months of 2026 and 2025, respectively.

Linked quarter comparison: Net interest income for the firstsecond quarter of 2026 was $189.6$190.4 million, which was an increase of $15.6$0.8 million, or 9.0%,0.4%, from the fourthfirst quarter of 2025.2026. Net interest margin on a fully tax equivalent basis was 3.99%3.98% in the firstsecond quarter of 2026 compared to 3.98%3.99% for the fourthfirst quarter of 2025.2026. The net interest margin during the firstsecond quarter increaseddecreased 1 basis point from the linked quarter as depositearning costsasset declinedyields 13decreased 7 bps, offsettingwhich was mostly offset by a 126 bp decline in assetcost yields.of funds.

Interest expenseincome of $92.8$280.9 million increaseddecreased $1.5 million, or 1.6%,0.5%, in the firstsecond quarter of 2026 when compared to the fourthfirst quarter of 2025.2026. TheThis increase in interest expensedecrease was primarily driven by highera interest-bearinglower depositpurchase balances.accounting Theaccretion, Company'scoupled averagewith deposita balancesslight increased $1.7 billion, or 10.6%, to $17.6 billion. The increasedecline in average depositsearning wasassets, primarilywhich drivenwere by$19.3 billion for the fullsecond quarter impactof from2026, thea Westfielddecrease Bankof and BankFinancial acquisitions. Average borrowed funds increased $163.5$89.3 million, or 19.3%,0.5%, fromcompared to the linkedfirst quarter.quarter of 2026.

The notional value of the Company's cash flow hedges was $1.0 billion as of both MarchJune 31,30, 2026 and December 31, 2025, with the $0.1$0.3 million and $1.3 million changes in the fair value recorded in AOCI in the Consolidated Balance Sheets, respectively. As of MarchJune 31,30, 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 3330 months and 36 months, respectively.

Year-to-date comparison: Net interest income of $189.6$380.0 million for the first threesix months of 2026 increased $40.3$72.4 million, or 27.0%,23.5%, compared to the same period of 2025. Net interest margin on a fully tax equivalent basis was 3.99%3.98% for the threesix months ended MarchJune 31,30, 2026, which iswas an increase of 112 bps when compared to the same period in 2025, as a 5348 bp decreasedecline in the cost of interest-bearing depositsliabilities outpacedand higher interest earning asset balances more than offset a 2834 bp declinedecrease in earning asset yields.yields and higher interest-bearing liabilities.

Interest income of $282.4$563.3 million for the threesix months ended MarchJune 31,30, 2026 grew $42.0$77.0 million, or 17.5%,15.8%, compared to $240.4$486.3 million for the same period of the prior year as the increase in earning asset balances more than offset the decline in yields.yield. Average earning assets of $19.4$19.3 billion for the first threesix months of 2026 increased $3.6 billion, or 23.1%,22.6%, when compared to the same period of 2025, driven primarily bydue to the Westfield Bank and BankFinancial acquisitions. The change in earning assets included a $2.3$2.1 billion, or 19.6%,17.5%, increase in average loan balances and a $1.4$1.5 billion, or 39.8%,43.0%, increase in average investment securities as a result of the Westfield Bank and BankFinancial acquisitions.securities. Average loan yields for the threesix months of 2026 declineddecreased by 3236 bps compared to the same period in the prior year, while the average yield on the investment portfolio increased by 75 bps in the first quartersix months of 2026 primarily due to repositioning a portion of the portfolio in 2025.

Interest expense for the threesix months ended MarchJune 31,30, 2026 was $92.8$183.4 million compared to $91.1$178.8 million for the same period in the prior year. This increase was driven by a $2.8$2.7 billion, or 24.7%,24.2%, increase in average interest-bearing deposits primarily due to the Westfield Bank and BankFinancial acquisitions, which was partially offset by a 5347 bp decline in the cost on those deposits. Average borrowings increaseddecreased $10.8$4.1 million, or 1.1%,0.4%, compared to the firstsix quartermonths of 2025, while the cost of borrowed funds increaseddeclined 184 bps compared to the same period dueof tothe aprior mix shift that included more long-term borrowings in 2026.year.

Linked quarter comparison: FirstSecond quarter 2026 noninterest income was $81.9$73.8 million, increasingdecreasing $17.1$8.1 million, or 26.5%,9.9%, compared to $64.8$81.9 million for the fourthfirst quarter of 2025.2026. The increasedecrease from the linked quarter was primarily driven by lower gain on bargain purchase, fewerforeign losses on investment securities, leasing businessexchange income, client derivative fees and wealth management fees. These increasesdecreases were partially offset by a declineincreases in foreignother exchangenoninterest income.income, leasing business income and fewer losses on investment securities.

Year-to-date comparison: Noninterest income of $81.9$155.7 million for the first threesix months of 2026 increased $30.8$36.6 million, or 60.3%,30.7%, from $51.1$119.1 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,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$8.1 million in the first threesix months of 2026 as a result of the Bank repositioning a portion of the investment portfolio during the first quarterhalf of 2025, which resulted in a $9.9 million loss during the prior period. ForeignLeasing business income increased $4.9 million, or 12.3%, due to continued portfolio growth and foreign exchange income increased $3.8$3.1 million, or 30.0%,11.8%, as client demand increased compared to the prior yearyear. andWealth leasingmanagement business incomefees increased $2.9$2.8 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%,17.6%, due to higher demand,investment while wealth managementbanking 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$2.7 million, or 20.8%,17.6%, due to an increase in deposit balances. Client derivative fees increased $2.2 million, or 68.0%, due to higher customer demand.

Linked quarter comparison: FirstSecond quarter 2026 noninterest expenseexpenses waswere $169.4$161.5 million, which was ana increasedecrease of $19.9$7.9 million, or 13.3%,4.6%, from $149.5$169.4 million in the fourthfirst quarter of 2025.2026. This increasedecrease was primarily driven by highera decrease in salaries and benefits expense, intangible amortization expense, data processing expense, occupancy expense, and leasing business expense,expenses which werewas partially offset by a decreaseincreases in professional servicesservices, expense.marketing and data processing expenses.

Year-to-date comparison: Noninterest expenses were $169.4$331.0 million for the first threesix months of 2026, which was an increase of $41.3$74.2 million, or 32.3%,28.9%, compared to the same period in 2025. This increase was primarilybroad-based, duewith toincreases higheracross salariesall expense categories. The primary drivers of this expense growth were the Westfield and employeeBankFinancial benefits, intangible amortization expense, data processing expense, occupancy expense, leasing business expense, professional services, and other noninterest expenses.acquisitions.

Salaries and employee benefits expense increased $24.6$36.6 million, or 32.7%,24.4%, due to the Westfield and BankFinancial acquisitions as well as an increase in incentive compensation tied to fee income. Intangible amortization expenseexpenses increased $3.9$7.8 million, or 165.4%,164.8%, due to core deposit intangible amortization related to the Westfield and BankFinancial acquisitions. Data processing increased $3.9$8.4 million, or 44.5%,47.4%, and occupancy expenses increased $1.5$3.2 million, or 25.5%,27.2%, both of which were driven by the Westfield and BankFinancial acquisitions. Leasing business expenses increased $1.3$2.8 million, or 10.4%,10.8%, as a result of the growth in the operating lease portfolio, while professional services increased $1.2$5.1 million, or 45.5%,80.9%, due to theexpenses acceleratedrelated recognition of debt issuance costs in conjunction withto the redemptionBankFinancial ofloans $150.0sold million of subordinated debt induring the first quarter of 2026. Other noninterest expenses increased $2.2$5.0 million, or 19.3%,22.8%, as a result of an increase in donations, insurance expense and credit origination expense.expense while furniture and fixtures increased $1.7 million, or 24.1%, due to the additional cleaning and maintenance expenses for the branches acquired in the Westfield and BankFinancial acquisitions.

Linked quarter comparison: In the firstsecond quarter of 2026, First Financial recorded income tax expense of $18.0 million on pre-tax income of $94.4 million, resulting in an effective tax rate of 19.0%. This compared to 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%20.4% for the fourthfirst quarter 2025.2026. The lower effective tax rate in the firstsecond quarter of 2026 was primarily driven by morehigher taxtax-exempt credit investments recognizedincome and deductionslower fornondeductible restrictedcharitable stock awards vesting during the period.contributions.

Year-to-date comparison: For the first threesix months of 2026, income tax expense was $19.1$37.1 million on pre-tax income of $93.6$188.0 million, resulting in an effective tax rate of 20.4%.19.7%. This compared to income tax expense of $12.3$30.2 million on pre-tax income of $63.6$151.5 million and an effective tax rate of 19.4%19.9% for the comparable period in 2025. The higherlower effective tax rate in the first six months of 2026 compared to 2025 was primarily driven by the nontaxable bargain purchase gain, which was partially offset by higher taxableincome, income,lower tax-exempt income and higher nondeductible charitable contributions and fewer restricted stock awards vesting during the period.contributions.

First Financial's investment portfolio totaled $5.1$4.9 billion at MarchJune 31,30, 2026 and $4.2 billion at December 31, 2025, or 22.6%21.9% and 19.7% of total assets, respectively. AFS securities totaled $5.0$4.7 billion at MarchJune 31,30, 2026 and $4.0 billion at December 31, 2025, while HTM securities totaled $49.6$46.1 million at MarchJune 31,30, 2026 and $58.5 million at December 31, 2025. The effective duration of the investment portfolio was 4.34.7 years at MarchJune 31,30, 2026 and 4.4 years at December 31, 2025.

During the three months ended MarchJune 31,30, 2026 and 2025,2026, the Company realized $1.3 million and $9.9 million, respectively, of losses on investment securities.securities of $0.3 million and realized gains on investment securities of $0.2 million for the comparable period in 2025. The losses recognized in the second quarter of 2026 included a $5.0$3.3 million of impairment losslosses on an investmentinvestments 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$197.7 million and $163.9 million of unrealized, after-tax, losses on debt securities as of MarchJune 31,30, 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.balances.

SomeCertain unrealized losses on investment securities may be the result of credit deterioration. As of MarchJune 31,30, 2026, First Financial had sixfour AFS securities with credit deterioration with a fair value totalling $22.5$19.9 million, net of $5.6$1.6 million unrealized losses, compared to six AFS securities with credit deterioration and a fair value totalling $20.9 million, net of 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.value.

The Company had net unrealized losses of $4.3 million and $4.2 million on its HTM securities at Marchboth 31,June 30, 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.2025. The unrealized losses on HTM securities have no impact on the Consolidated Financial Statements of the Company.

TheFirst CompanyFinancial had $0.2$0.1 million of unrealized losses on equity securities recorded in noninterest income for the threesecond monthsquarter ended March 31,of 2026 compared to insignificant$0.2 million in the first quarter. The Company had $0.3 million of unrealized losses on equity securities for the first six months ended June 30, 2026 compared to $0.2 million of unrealized gains for the same period of 2025.

ExcludingDuring the first six months of 2026, C&I loans held for sale, loan balances increased $70.8$210.1 million, or 0.5%,4.5%, to $13.5$4.8 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$164.3 million, or 2.0%,3.7%, to $4.5 billion; C&I loans increased $61.5 million, or 1.3%, to $4.7 billion; home equity increased $21.6$53.0 million, or 2.2%,5.3%, to $1.0$1.1 billion; and finance leases increased by $11.1$20.8 million, or 1.7%, to $649.6 million; and credit cards increased $1.0 million, or 1.6%, to $66.4 million.3.3%. Partially offsetting these increases, construction loans decreased $86.3$78.1 million, or 12.7%,11.5%, to $591.1$599.3 million; installment loans decreased $26.4$32.2 million, or 14.0%,17.1%, to $162.3$156.5 million.million; Residentialand residential real estate loanloans balancesdeclined were$27.1 relativelymillion, stableor at1.5%, to $1.8 billion.

ComparedSecond toquarter 2026 average loans of $13.6 billion, excluding loans held for sale, increased $9.4 million, or 0.1%, from the first quarter 2026. Average loan balances for the first six months of 2025, average loans2026 increased $1.9$1.8 billion, or 15.9%.15.7%, when compared to same period of 2025 driven by the acquisitions of Westfield and BankFinancial. The increase from the comparable period in the prior year included an increase of $983.9$912.8 million, or 26.0%,23.8%, in C&I loans; an increase of $428.0$508.5 million, or 10.7%,12.8%, in CRE; an increase of $358.8$342.7 million, or 24.3%,23.1%, in residential real estate; an increase of $157.9$155.0 million, or 18.4%,17.7%, in home equity; an increase of $45.1$55.3 million, or 7.7%,9.5%, in lease financing; an increase of $39.8$40.4 million, or 31.3%,33.0%, in installment loans; and an increase of $3.1$3.4 million, or 4.6%5.1%, in credit cards. PartiallyThese offsettingincreases thesewere increases,partially averageoffset realby estatea constructiondecrease balancesof declined $153.8$177.5 million, or 19.3%.22.5%, in construction loans.

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 MarchJune 31,30, 2026.

Given the potential for stress related to commercial office space, First Financial performed targeted reviews of its exposure to this sector. As of MarchJune 31,30, 2026, First Financial had $389.8$371.2 million of loans collateralized by non-owner occupied office space, which represents 2.9%2.7% 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 MarchJune 31,30, 2026, the office portfolio included three nonaccrual relationships totaling $30.9$28.0 million, or 7.9%7.5% of the total office portfolio.

Loans to NDFI totaled $423.6$464.8 million, or 3.1%3.4% of total loans, as of MarchJune 31,30, 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 MarchJune 31,30, 2026 included $277.1$278.2 million in loans to mortgage credit intermediaries,intermediaries $123.9(primarily REITs), $120.7 million in loans to business credit intermediaries, $37.6 million in loans to private equity funds, and $22.7$28.3 million of loans to other NDFI, such as private equity funds andincluding consumer credit intermediaries. As of MarchJune 31,30, 2026, all of the loans to NDFI had an internal credit rating of pass.

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 MarchJune 31,30, 2026 and $4.5 billion at December 31, 2025. As of MarchJune 31,30, 2026, commitments with a fixed interest rate totaled $92.0$103.4 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%36% at bothJune March 31,30, 2026 and 0% to 21% at December 31, 2025. The fixed rate commitments have maturities ranging from less than one year to 31.0 years at MarchJune 31,30, 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$35.9 million and $36.6 million at MarchJune 31,30, 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$377.0 million and $335.0 million at MarchJune 31,30, 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 MarchJune 31,30, 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$111.2 million and $103.0 million at MarchJune 31,30, 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 MarchJune 31,30, 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 MarchJune 31,30, 2026 or December 31, 2025.

Nonaccrual loans were $100.5$96.2 million, or 0.75%0.70% of total loans, as of MarchJune 31,30, 2026, reflecting a $1.3$5.7 million, or 1.2%,5.6%, decline from $101.8 million as of December 31, 2025. Nonperforming assets, which consist of nonaccrual loans and OREO, were $100.8$96.3 million, or 0.44%0.43% of total assets, at MarchJune 31,30, 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$226.8 million as of MarchJune 31,30, 2026 compared to $235.5 million at December 31, 2025. Classified assets were 1.02%1.01% of total assets at MarchJune 31,30, 2026,2026 whichcompared declined fromto 1.11% at December 31, 20252025, with the decline primarily due to the additionincrease of BankFinancial increasingin total assets in the first quarter of 2026.assets. Total classified assets at both MarchJune 31,30, 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.

The Company utilized the Moody's MarchJune baseline forecast as its R&S forecast in the quantitative model at MarchJune 31,30, 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.