FIRST FINANCIAL BANCORP /OH/

First Financial Bancorp is a mid-sized, regional bank holding company headquartered in Cincinnati, Ohio, which has elected to become a financial holding company. The company engages in the business of commercial banking and other banking and banking-related activities through its wholly-owned subsidiary, First Financial Bank, which was founded in 1863. The range of banking services includes commercial lending, real estate lending, and consumer financing, along with deposit products, trust and wealth management services. The company also operates through several wholly-owned subsidiaries: Summit Funding Group, Inc. for lease and equipment financing; Oak Street Funding LLC for secured commercial financing to the insurance industry, registered investment advisors, certified public accountants, and indirect auto finance companies; First Franchise Capital Corporation for lending to restaurant franchisees; Bannockburn Global Forex, a division providing transactional currency payments, foreign exchange hedging, commodities hedging, and other advisory products; and Agile Premium Finance, a division originating commercial loans for the payment of annual premiums for property and casualty insurance for businesses. The company's core banking operating markets are located within the four state region of Ohio, Indiana, Kentucky and Illinois, and it also competes on a nationwide basis through its specialty lending divisions. The company utilizes a community banking business model and serves a combination of metropolitan and non-metropolitan markets.

First Financial faces strong competition from financial institutions and other non-financial organizations, including local and regional financial institutions, savings and loans, bank holding companies, and some of the largest banking organizations in the United States. Other types of financial institutions, such as credit unions, offer a wide range of loan and deposit services that are competitive with those offered by First Financial. The consumer is also served by brokerage firms and mutual funds that provide checking services, credit cards, margin loans and other services similar to those offered by First Financial. Online lenders also create additional competition, particularly in the mortgage and consumer lending areas. Major consumer retail stores compete for loans by offering credit cards and retail installment contracts. First Financial also competes with Financial Technology Companies (FinTechs) which provide similar services to financial institutions while operating predominantly online and without the use of physical branch locations. FinTechs also compete by embedding financial services into non-bank platforms which could reduce customer reliance on traditional banking services. Digital assets and cryptocurrencies also operate as competitors. First Financial believes it is well positioned to compete in its markets, being smaller than super-regional and multi-national bank holding companies, it believes it can meet the needs of its markets through a local decision-making process and that it is better positioned to compete than smaller community banks that may have size or geographic limitations.

First Financial generates revenue primarily through net interest income, which is the difference between the interest income generated by its interest-earning assets, consisting primarily of loans and, to a lesser extent, securities, and the interest expense generated by its interest-bearing liabilities. The company also generates noninterest income from a variety of sources including trust and wealth management services, foreign exchange and commodities hedging through Bannockburn, and other banking services. The primary customer segments include individuals and small to medium sized businesses within the Bank's geographic footprint. The company's business model is built on a community banking approach with a local market focus, aiming to build long-term relationships with clients. The company also operates several specialty lending divisions that serve nationwide markets, including Oak Street Funding, First Franchise Capital, Bannockburn Global Forex, and Agile Premium Finance.

First Financial's loan portfolio is diversified across several major categories. Commercial and industrial loans are made to all types of businesses for purposes including inventory, receivables and equipment, and also include equipment and leasehold improvement financing for franchisees throughout the U.S., principally in the quick service and casual dining sector. Commercial real estate loans are secured by a mortgage lien on the real property, including both owner-occupied and investor income producing real estate such as apartments, shopping centers, or office buildings. Residential real estate loans are secured by a mortgage lien on residential property, and certain of these loans conform to secondary market underwriting standards and are sold within a short timeframe to unaffiliated third parties. Consumer loans are primarily loans made to individuals, which may be secured or unsecured, including new and used vehicle loans, second mortgages on residential real estate and unsecured loans. Home equity lines of credit consist mainly of revolving lines of credit secured by residential real estate. The company also offers lease and equipment financing primarily through Summit Funding Group, Inc. The company's wealth management business had $3.9 billion ¹ in assets under management at December 31, 2025.

Agile Premium Finance, a division of the Bank, is among industry leaders in the premium finance lending space and is active in all 50 states. Agile originates commercial loans for the payment of annual premiums for property and casualty insurance for businesses, secured by the unearned premium of the insurance policies, with an average original term of approximately ten months. Bannockburn Global Forex, a division of the Bank, is an industry-leading capital markets firm that provides transactional currency payments, foreign exchange hedging, commodities hedging and other advisory products to closely held enterprises, financial sponsors and downstream financial institutions across the United States, with a nationwide presence with offices in 11 locations throughout the U.S. Oak Street Funding lends to the insurance industry, registered investment advisors, certified public accountants and indirect auto finance companies, while First Franchise Capital Corporation lends to restaurant franchisees. Together, these niche lending activities are driven by acquisitions, ownership transitions and financing general working capital needs.

On February 29, 2024, First Financial acquired Agile Premium Finance for $96.9 million ² in an all cash transaction. On November 1, 2025, First Financial acquired Westfield Bancorp, Inc. for a total purchase price of $324.4 million ³, consisting of a cash payment of $260.0 million ⁴ and 2,753,094 ⁵ shares of First Financial common stock, equal to $64.4 million ⁶ based on First Financial's stock price on the date of the transaction. In August 2025, the Company entered into an Agreement and Plan of Merger with BankFinancial Corporation, which was completed subsequent to the end of the year, effective January 1, 2026. On November 10, 2025, the Company issued and sold $300.0 million ⁷ aggregate principal amount of 6.375% Fixed-to-Floating Rate Subordinated Notes due 2035. In December 2023, the Board authorized a two-year stock repurchase plan effective January 1, 2024, that provides for the purchase of up to 5,000,000 ⁸ shares of the common stock of the Company. The Company did not purchase any shares under the 2024 Stock Repurchase Plan in the fourth quarter of 2025.

The company's primary source of income is net interest income. During 2025, the Federal Reserve implemented a series of rate cuts that decreased the target fed funds rate by 75 basis points ⁹. The company recorded $36.5 million ¹⁰ of provision expense on loans and leases due to net charge-offs and loan portfolio growth. The company realized $22.3 million ¹¹ of losses on investment securities in 2025, compared to $22.6 million ¹² in 2024. Classified asset balances increased $11.4 million ¹³, or 5.1% ¹⁴, to $235.5 million ¹⁵ at December 31, 2025 from $224.1 million ¹⁶ at December 31, 2024. As of December 31, 2025, the Bank had $193.6 million ¹⁷ available to pay dividends to First Financial without prior regulatory approval. As of December 31, 2025, the Company had indebtedness of $1.2 billion ¹⁸ which was an increase from $1.1 billion ¹⁹ in 2024.

The acquisition of Westfield Bancorp, Inc. supplements First Financial's existing commercial banking and wealth management presence in Northeast Ohio by adding all of Westfield's retail banking locations and its commercial lending, insurance agency lending and private banking services. The acquisition of BankFinancial Corporation, completed effective January 1, 2026, added 17 ²⁰ full-service banking offices and, on an unaudited basis, approximately $1.4 billion ²¹ of total assets, $700.2 million ²² of total loans and $1.2 billion ²³ of total deposits. The company continues to expand its nationwide specialty lending businesses, including Oak Street Funding, First Franchise Capital, Bannockburn Global Forex, and Agile Premium Finance, which are driven by acquisitions, ownership transitions and financing general working capital needs.

The company's growth strategy includes expanding its presence in existing markets and through acquisitions. The Westfield acquisition added retail banking locations and commercial lending services in Northeast Ohio. The BankFinancial acquisition added 17 full-service banking offices in Illinois. The company also continues to grow its nationwide specialty lending businesses, including Agile Premium Finance, which is active in all 50 states, and Bannockburn Global Forex, which has a nationwide presence with offices in 11 locations throughout the U.S.The company operates 134 ²⁴ full service banking centers, 28 ²⁵ of which are leased facilities. The company's core banking operating markets are located within the four state region of Ohio, Indiana, Kentucky and Illinois. The company operates 62 ²⁶ banking centers in Ohio, three ²⁷ banking centers in Illinois, 58 ²⁸ banking centers in Indiana and 11 ²⁹ banking centers in Kentucky. The company also operates its Commercial Finance division from a non-banking center location in Indianapolis, Indiana, its leasing business from a non-banking center location in Mason, Ohio, and its insurance premium finance division from a non-banking center in Lincolnshire, Illinois.

In December 2023, the Board authorized a two-year stock repurchase plan effective January 1, 2024, that provides for the purchase of up to 5,000,000 ³⁰ shares of the common stock of the Company. On November 10, 2025, the Company issued and sold $300.0 million ³¹ aggregate principal amount of 6.375% Fixed-to-Floating Rate Subordinated Notes due 2035. The company provides all eligible employees with an annual allocation to the First Financial Pension Plan of 5% ³² of eligible annual pay.

The company faces several headwinds and constraints. Weakness in the economy and governmental policies, such as inflation, deflation, recession, unemployment, changes in interest rates, tariffs, fiscal and monetary policy, may adversely affect the company. Changes in market interest rates could affect revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity. Local economic factors in Indiana, Ohio, Kentucky and Illinois may adversely affect business and results of operations. The company's 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. Classified asset balances increased $11.4 million ³³, or 5.1% ³⁴, to $235.5 million ³⁵ at December 31, 2025 from $224.1 million ³⁶ at December 31, 2024.

The company faces significant competitive pressures from financial institutions, FinTechs, and other non-financial organizations. Competition from FinTechs, digital assets, and cryptocurrencies could result in losing business or experiencing reduced margins. The company also faces risks related to its foreign exchange business through Bannockburn, which is largely dependent upon a small number of large clients and market volatility. The company's wealth management business with $3.9 billion ³⁷ in assets under management is subject to investment and market risks. The company also faces risks related to potential acquisitions, including the time and expense associated with identifying and evaluating potential expansions, potential exposure to unknown or contingent liabilities, and difficulty integrating operations.

Credit risk is a primary risk, as the company's allowance for credit losses may prove insufficient to absorb losses in the loan portfolio. The company recorded $36.5 million ³⁸ of provision expense on loans and leases in 2025, and classified asset balances increased $11.4 million ³⁹ to $235.5 million ⁴⁰ at December 31, 2025. The company's foreign exchange business through Bannockburn is largely dependent upon a small number of large clients, and revenue concentration among a limited number of counterparties may make earnings more volatile. The company's wealth management business with $3.9 billion ⁴¹ in assets under management is subject to investment and market risks. The company faces significant competition from FinTechs, digital assets, and cryptocurrencies, which could result in losing business or experiencing reduced margins. The company's liquidity is dependent upon its ability to receive dividends from its subsidiaries, and as of December 31, 2025, the Bank had $193.6 million ⁴² available to pay dividends without prior regulatory approval, while the company had $1.2 billion ⁴³ in indebtedness.

Management's message emphasizes the company's community banking business model and local market focus, aiming to develop a competitive advantage through building long-term relationships with clients. The strategic priorities include expanding through acquisitions, as demonstrated by the Westfield Bancorp acquisition on November 1, 2025 for a total purchase price of $324.4 million ⁴⁴, and the BankFinancial Corporation acquisition completed effective January 1, 2026. Management also focuses on managing credit risk through standardized loan policies, centralized portfolio management, and diversification of market area and industries. The company continues to invest in its specialty lending businesses, including Oak Street Funding, First Franchise Capital, Bannockburn Global Forex, and Agile Premium Finance, to drive growth. The company also emphasizes its commitment to human capital, employee wellbeing, and engagement, as evidenced by receiving the Gallup Exceptional Workplace Award in 2025.