UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended ~~September~~March 3031, ~~2025~~2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-16759

FIRST FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Indiana	35-1546989
(State or other jurisdiction	(I.R.S. Employer
incorporation or organization)	Identification No.)

One First Financial Plaza, Terre Haute, IN	47807
(Address of principal executive office)	(Zip Code)

(812)	238-6000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.125 per share	THFF	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer (Do not check if a smaller reporting company)	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑.

As of ~~November~~May 1, ~~2025~~2026, the registrant had outstanding 11,~~850~~891,~~645~~896 shares of common stock, without par value.

Table of Contents

FIRST FINANCIAL CORPORATION

FORM 10-Q

INDEX


	Page No.
PART I. Financial Information

Item 1. Financial Statements:

Consolidated Balance Sheets	3

Consolidated Statements of Income and Comprehensive Income	4

Consolidated Statements of Shareholders’ Equity	5

Consolidated Statements of Cash Flows	76

Notes to Consolidated Financial Statements	87

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3. Quantitative and Qualitative Disclosures about Market Risk	36

Item 4. Controls and Procedures	42

PART II. Other Information:

Item 1. Legal Proceedings	43

Item 1A. Risk Factors	43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3. Defaults upon Senior Securities	43

Item 4. Mine Safety Disclosures	43

Item 5. Other Information	43

Item 6. Exhibits	44

Signatures	45

Table of Contents

Part I – Financial Information

Item 1.Financial Statements

FIRST FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share data)


	~~September~~December 3031,		~~December 31,~~
	~~2025~~2026		~~2024~~2025
	~~(unaudited)~~
ASSETS
Cash and due from banks	$	8796,~~438~~887	$	93130,~~526~~369
Federal funds sold		~~157~~—		~~820~~475
Securities available-for-sale		1,~~186~~170,~~107~~768		1,~~195~~149,~~990~~526
Loans:
Commercial		2,~~282~~410,~~062~~989		2,~~196~~375,~~351~~344
Residential		~~997~~1,~~915~~301,666		~~967~~986,~~386~~955
Consumer		~~682~~703,~~438~~322		~~668~~688,~~058~~135
		34,~~962,~~415,977		34,~~831~~050,~~795~~434
(Less) plus:
Net deferred loan (fees)/costs		47,~~986~~944		54,~~346~~869
Allowance for credit losses		(4752,~~411~~338)		(4647,~~732~~995)
		34,~~919~~371,~~990~~583		34,~~790~~007,~~409~~308
Restricted stock		18,~~761~~553		1718,~~555~~536
Accrued interest receivable		2627,~~526~~881		2627,~~934~~762
Premises and equipment, net		7988,~~351~~692		8178,~~508~~582
Bank-owned life insurance		~~130~~136,~~747~~453		~~128~~131,~~766~~286
Goodwill		98,229		~~100~~98,~~026~~229
Other intangible assets		1720,~~385~~400		2116,~~545~~234
Other real estate owned		~~138~~184		~~523~~94
Other assets		~~104~~98,~~857~~959		~~102~~97,~~746~~725
TOTAL ASSETS	$	56,~~669~~128,~~686~~589	$	5,~~560~~756,~~348~~126
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing	$	~~849~~1,~~978~~139,666	$	~~859~~916,~~014~~473
Interest-bearing:
Certificates of deposit exceeding the FDIC insurance limits		~~138~~135,~~603~~035		~~144~~135,~~982~~605
Other interest-bearing deposits		3,~~626~~567,~~724~~685		3,~~714~~499,~~918~~033
		4,~~615~~842,~~305~~386		4,~~718~~551,~~914~~111
Short-term borrowings		~~182~~349,~~522~~781		~~187~~292,~~057~~468
Other borrowings		~~170~~208,~~453~~756		28188,~~120~~208
Other liabilities		7972,~~188~~378		7773,~~216~~470
TOTAL LIABILITIES		5,~~047~~473,~~468~~301		5,~~011~~105,~~307~~257
Shareholders’ equity
Common stock, $0.125 stated value per share; Authorized shares - 40,000,000; Issued shares-16,190,157 in 2025 and 16,165,023 in 2024; Outstanding shares - 11,850,645 in 2025 and 11,842,539 in 2024		2,020		2,018
Common stock, $0.125 stated value per share; Authorized shares - 40,000,000; Issued shares-16,206,804 in 2026 and 16,190,157 in 2025; Outstanding shares - 11,891,896 in 2026 and 11,880,759 in 2025		2,021		2,021
Additional paid-in capital		~~146~~147,~~624~~643		~~145~~147,~~927~~442
Retained earnings		~~726~~754,~~989~~938		~~687~~741,~~366~~793
Accumulated other comprehensive loss		(9895,~~635~~276)		(~~132~~86,~~285~~681)
Less: Treasury shares at cost - 4,339,512 in 2025 and 4,322,484 in 2024		(154,780)		(153,985)
Less: Treasury shares at cost - 4,314,908 in 2026 and 4,309,398 in 2025		(154,038)		(153,706)
TOTAL SHAREHOLDERS’ EQUITY		~~622~~655,~~218~~288		~~549~~650,~~041~~869
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	56,~~669~~128,~~686~~589	$	5,~~560~~756,~~348~~126

See accompanying notes.

Table of Contents

FIRST FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Dollar amounts in thousands, except per share data)

Three Months Ended

~~Nine Months Ended~~

~~September~~March 3031,

~~September 30,~~

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

(unaudited)

~~(unaudited)~~

INTEREST INCOME:

Loans, including related fees

67,~~070~~521

6163,~~367~~612

~~195,457~~

~~162,878~~

Securities:

Taxable

56,~~985~~536

6,~~319~~002

~~17,902~~

~~18,083~~

Tax-exempt

2,~~689~~864

2,~~715~~604

~~7,915~~

~~7,919~~

Other

~~900~~1,025

~~1,294~~814

~~2,579~~

~~2,989~~

TOTAL INTEREST INCOME

7677,~~644~~946

7173,~~695~~032

~~223,853~~

~~191,869~~

INTEREST EXPENSE:

Deposits

1816,~~002~~629

2218,~~197~~199

~~54,696~~

~~59,622~~

Short-term borrowings

12,~~916~~352

~~993~~1,693

~~5,007~~

~~2,928~~

Other borrowings

2,~~123~~032

1,~~335~~165

~~4,901~~

~~3,935~~

TOTAL INTEREST EXPENSE

2221,~~041~~013

2421,~~525~~057

~~64,604~~

~~66,485~~

NET INTEREST INCOME

5456,~~603~~933

4751,~~170~~975

~~159,249~~

~~125,384~~

Provision for credit losses

12,~~950~~550

91,~~400~~950

~~5,850~~

~~14,166~~

NET INTEREST INCOME AFTER PROVISION

FOR CREDIT LOSSES

5254,~~653~~383

3750,~~770~~025

~~153,399~~

~~111,218~~

NON-INTEREST INCOME:

Trust and financial services

1,~~278~~491

1,~~251~~393

~~4,161~~

~~3,903~~

Service charges and fees on deposit accounts

87,~~104~~382

87,~~139~~585

~~23,243~~

~~21,576~~

Other service charges and fees

~~251~~374

~~191~~316

~~823~~

~~700~~

Securities gains (losses), net

24—

~~103~~—

~~104~~

Interchange income

~~176~~186

~~177~~214

~~570~~

~~490~~

Loan servicing fees

~~338~~326

~~274~~165

~~830~~

~~957~~

Gain on sales of mortgage loans

~~494~~294

~~411~~225

~~1,149~~

~~886~~

Other

~~484~~1,164

~~677~~613

~~1,244~~

~~1,943~~

TOTAL NON-INTEREST INCOME

11,~~149~~217

1110,~~223~~511

~~32,041~~

~~30,559~~

NON-INTEREST EXPENSE:

Salaries and employee benefits

1921,~~788~~361

1819,~~521~~248

~~58,725~~

~~53,231~~

Occupancy expense

2,~~738~~958

2,~~556~~676

~~7,886~~

~~7,116~~

Equipment expense

45,~~811~~340

4,~~280~~505

~~13,903~~

~~12,736~~

FDIC Expense

690

~~558~~750

~~2,235~~

~~1,721~~

Other

10,~~021~~530

129,~~649~~580

~~30,334~~

~~29,833~~

TOTAL NON-INTEREST EXPENSE

3840,~~048~~879

3836,~~564~~759

~~113,083~~

~~104,637~~

INCOME BEFORE INCOME TAXES

2524,~~754~~721

1023,~~429~~777

~~72,357~~

~~37,140~~

Provision for income taxes

4,~~992~~917

15,~~688~~371

~~14,603~~

~~6,106~~

NET INCOME

2019,~~762~~804

818,~~741~~406

~~57,754~~

~~31,034~~

OTHER COMPREHENSIVE INCOME

Change in unrealized gains/(losses) on securities, net of reclassifications and taxes

19(8,~~596~~674)

3111,~~628~~100

~~33,642~~

~~24,067~~

Change in funded status of post retirement benefits, net of taxes

379

733

~~220~~

COMPREHENSIVE INCOME

4011,~~361~~209

4029,~~442~~509

~~91,404~~

~~55,321~~

PER SHARE DATA

Basic and Diluted Earnings per Share

1.7567

01.7455

~~4.87~~

~~2.63~~

Weighted average number of shares outstanding (in thousands)

11,~~851~~885

11,~~808~~842

~~11,848~~

~~11,809~~

See accompanying notes.

Table of Contents

FIRST FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three Months Ended

~~September~~March 30, ~~2025~~2026, and ~~2024~~2025

(Dollar amounts in thousands, except per share data)

(Unaudited)


							Accumulated
							Other
	Common		Additional		Retained		Comprehensive		Treasury
	Stock		Capital		Earnings		Income/(Loss)		Stock		Total
Balance, July 1, 2024	$	2,016	$	144,632	$	673,728	$	(134,501)	$	(155,205)	$	530,670
Balance, January 1, 2025	$	2,018	$	145,927	$	687,366	$	(132,285)	$	(153,985)	$	549,041
Net income		—		—		818,~~741~~406		—		—		818,~~741~~406
Other comprehensive income		—		—		—		3111,~~701~~103		—		3111,~~701~~103
Omnibus Equity Incentive Plan		—1		~~153~~232		—		—		—		~~153~~233
Cash dividends, $.45 per share		—		—		(5,314)		—		—		(5,314)
Treasury shares purchased (17,028 shares)		—		—		—		—		(795)		(795)
Balance, September 30, 2024	$	2,016	$	144,785	$	677,155	$	(102,800)	$	(155,205)	$	565,951
Cash dividends, $.51 per share		—		—		(6,043)		—		—		(6,043)
Balance, March 31, 2025	$	2,019	$	146,159	$	699,729	$	(121,182)	$	(154,780)	$	571,945

Balance, July 1, 2025	$	2,020	$	146,391	$	712,271	$	(118,234)	$	(154,780)	$	587,668
Balance, January 1, 2026	$	2,021	$	147,442	$	741,793	$	(86,681)	$	(153,706)	$	650,869
Net income		—		—		2019,~~762~~804		—		—		2019,~~762~~804
Other comprehensive income		—		—		—		19(8,~~599~~595)		—		19(8,~~599~~595)
Omnibus Equity Incentive Plan		—		~~233~~201		—		—		—		~~233~~201
Cash dividends, $.51 per share		—		—		(6,044)		—		—		(6,044)
Treasury shares purchased (5,510 shares)		—		—		—		—		(332)		(332)
Balance, September 30, 2025	$	2,020	$	146,624	$	726,989	$	(98,635)	$	(154,780)	$	622,218
Cash dividends, $.56 per share		—		—		(6,659)		—		—		(6,659)
Balance, March 31, 2026	$	2,021	$	147,643	$	754,938	$	(95,276)	$	(154,038)	$	655,288

See accompanying notes.

Table of Contents

FIRST FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Nine Months Ended

September 30, 2025, and 2024

(Dollar amounts in thousands, except per share data)

(Unaudited)


							Accumulated
							Other
	Common		Additional		Retained		Comprehensive		Treasury
	Stock		Capital		Earnings		Income/(Loss)		Stock		Total
Balance, January 1, 2024	$	2,014	$	144,152	$	663,726	$	(127,087)	$	(154,829)	$	527,976
Cumulative change in accounting principle ASU 2023-02		—		—		(1,659)		—		—		(1,659)
Net income		—		—		31,034		—		—		31,034
Other comprehensive income		—		—		—		24,287		—		24,287
Omnibus Equity Incentive Plan		2		633		—		—		—		635
Treasury shares purchased (8,734 shares)		—		—		—		—		(376)		(376)
Cash dividends, $.90 per share		—		—		(15,946)		—		—		(15,946)
Balance, September 30, 2024	$	2,016	$	144,785	$	677,155	$	(102,800)	$	(155,205)	$	565,951

Balance, January 1, 2025	$	2,018	$	145,927	$	687,366	$	(132,285)	$	(153,985)	$	549,041
Net income		—		—		57,754		—		—		57,754
Other comprehensive income		—		—		—		33,650		—		33,650
Omnibus Equity Incentive Plan		2		697		—		—		—		699
Treasury shares purchased (17,028 shares)		—		—		—		—		(795)		(795)
Cash dividends, $1.53 per share		—		—		(18,131)		—		—		(18,131)
Balance, September 30, 2025	$	2,020	$	146,624	$	726,989	$	(98,635)	$	(154,780)	$	622,218

See accompanying notes.

Table of Contents

FIRST FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands, except per share data)


	~~Nine~~Three Months Ended
	~~September~~March 3031,
	~~2025~~2026		~~2024~~2025
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	5719,~~754~~804	$	3118,~~034~~406
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums and discounts on investments		~~2,981~~790		31,~~489~~050
Provision for credit losses		52,~~850~~550		141,~~166~~950
Securities (gains)		(21)		(104)
Depreciation and amortization		2,833		3,257
Depreciation and amortization		9,104		6,617
Bargain purchase gain		(716)		—
Restricted stock compensation		~~699~~201		~~635~~233
Gain on sale of mortgage loans		(~~1,149~~294)		(~~886~~225)
(Gain) on sale of other real estate		(66)		(60)
(Gain)/loss on sale of other real estate		—		(2)
Other, net		(142,~~523~~548)		(103,~~376~~612)
NET CASH FROM OPERATING ACTIVITIES		6022,~~629~~620		4421,~~515~~057
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available-for-sale		—47,691		~~50,662~~—
Calls, maturities and principal reductions on securities available-for-sale		9334,~~280~~149		8226,~~204~~968
Purchases of securities available-for-sale		(4261,~~477~~532)		~~(40,096)~~—
Loans made to customers, net of repayment		(~~129~~79,~~816~~792)		(8516,~~682~~795)
Net change in federal funds sold		~~663~~475		~~(1,074)~~393
Redemption of restricted stock		621,220		~~745~~48
Purchase of restricted stock		(~~1,268~~22)		(21)
Cash received from acquisitions, net		—		28,152
Cash received (disbursed) from acquisitions, net		(11,779)		—
Proceeds from sales of other real estate owned		~~449~~—		~~316~~2
Additions to premises and equipment		(~~2,787~~687)		(~~5,070~~566)
NET CASH FROM INVESTING ACTIVITIES		(8170,~~894~~277)		3010,~~136~~029
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits		(~~103~~22,~~580~~246)		4(78,~~947~~863)
Net change in short-term borrowings		(451,~~535)~~827		17(49,~~142~~448)
Dividends paid		(186,~~120~~650)		(156,~~934~~032)
Purchase of treasury shares		(~~795~~332)		(~~376~~795)
Proceeds from other borrowings		1,~~850~~200,000		1350,~~525,~~000
Maturities of other borrowings		(1,~~707~~208,~~793~~424)		(1253,~~604,877~~263)
NET CASH FROM FINANCING ACTIVITIES		1514,~~177~~175		(7438,~~098~~401)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(633,~~088~~482)		~~553~~(7,315)
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD		93130,~~526~~369		7693,~~759~~526
CASH AND DUE FROM BANKS, END OF PERIOD	$	8796,~~438~~887	$	7786,~~312~~211

See accompanying notes.

Table of Contents

FIRST FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accompanying ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 consolidated financial statements are unaudited. The December 31, ~~2024~~2025 consolidated financial statements are as reported in the First Financial Corporation (the “Corporation”) ~~2024~~2025 annual report. The information presented does not include all information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The following notes should be read together with notes to the consolidated financial statements included in the 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, ~~2024~~2025.

1. Significant Accounting Policies

The significant accounting policies followed by the Corporation and its subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments which are, in the opinion of management, necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated financial statements and are of a normal recurring nature. The Corporation reports financial information for only one segment, banking. Some items in the prior year financials were reclassified to conform to the current presentation.

The Omnibus Equity Incentive Plan is a long-term incentive plan that was designed to align the interests of participants with the interests of shareholders. Under the plan, awards may be made based on certain performance measures. The grants are made in restricted stock units that are subject to a vesting schedule. These shares vest over 3 years in increments of 33%, 33%, and 34% respectively. For the ~~nine~~three months ended ~~2025~~2026 and ~~2024~~2025, 2516,~~134~~647 and 2725,~~803~~134 shares were awarded, respectively. These shares had a grant date value of $1.21 million and $1.02 million for ~~2025~~2026 and ~~2024~~2025, vest over three years, and their grant is not subject to future performance measures. Outstanding shares are increased at the award date for the total shares awarded.

On March 1, 2026, the Corporation completed its acquisition of CedarStone Financial, Inc. Therefore, the results of CedarStone have been included in the results of operations beginning on March 1, 2026. On July 1, 2024, the Corporation completed its acquisition of SimplyBank. Therefore, the results of SimplyBank have been included in the results of operations beginning on July 1, 2024. See footnote 12, Acquisitions, for more information.

On July 4, 2025, President Trump signed into law the legislation formally titled, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” and commonly referred to as the One Big Beautiful Bill (“the Act”). The Corporation isevaluated ~~currently~~and ~~evaluating~~applied the income tax implications of the Act. The Corporation’s ~~does~~financial ~~not~~statements ~~expect~~were ~~the~~not ~~Act~~materially toimpacted ~~have~~by ~~a material impact on~~ the ~~Corporation’s financial statements~~Act.

2. New accounting standards

Accounting Pronouncements Adopted:

In ~~March~~July ~~2023~~2025, the ~~Financial~~FASB ~~Accounting~~issued ~~Standards~~ASU ~~Board~~2025-05, "Financial Instruments—Credit Losses (~~FASB~~Topic 326): ~~issued~~Measurement ~~Accounting~~of ~~Standards~~Credit ~~Update~~Losses ~~(ASU)~~for NoAccounts Receivable and Contract Assets." ~~2023-02~~This ~~“Investments~~ASU ~~Equity~~amends ~~Method~~ASC ~~and~~326-202 ~~Joint~~to ~~Ventures~~provide ~~(Topic~~a ~~323):~~practical ~~Accounting~~expedient (for ~~Investments~~all inentities) ~~Tax~~and ~~Credit~~an ~~Structures~~accounting ~~Using~~policy ~~the~~election ~~Proportional~~(for ~~Amortization~~all ~~Method.”~~entities, ~~These~~other ~~amendments~~than ~~allow~~public ~~reporting~~business entities tothat elect the practical expedient) related to ~~account~~the estimation of expected credit losses for ~~qualifying~~current ~~tax~~accounts ~~equity~~receivable ~~investments~~and ~~using~~current ~~the~~contract ~~proportional~~assets ~~amortization~~that ~~method,~~arise ~~regardless~~from oftransactions ~~the~~accounted ~~program~~for ~~giving~~under ~~rise~~ASC to606, ~~the~~"Revenue ~~related~~From ~~income~~Contracts ~~tax~~with ~~credits~~Customers". This ~~guidance~~ASU is effective for ~~public~~annual ~~business~~and ~~entities for fiscal years including~~ interim reporting periods ~~within~~in ~~those~~ fiscal years, beginning after December 15, ~~2023~~2025. Early adoption is permitted infor ~~any~~financial ~~interim~~statements ~~period~~that have not yet been issued. The Corporation adopted ASU ~~2023~~2025-0205 on January 1, ~~2024~~2026. onThe aCorporation ~~modified~~assessed ~~retrospective~~ASU ~~basis.~~2025-05 Asand aapplied ~~result of~~ the ~~adoption,~~standard ~~other~~to ~~assets~~the ~~increased~~consolidated ~~$19~~financial ~~million,~~statements ~~other liabilities increased $21 million,~~ and ~~retained~~related ~~earnings decreased $1~~disclosures.7 ~~million.~~

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require, among other things, that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 208. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Corporation adopted ASU 2023-07 on January 1, 2024 for fiscal year activity and will apply ASU 2023-07 in interim periods within fiscal years beginning January 1, 2025.

In ~~December~~November ~~2023~~2025, the ~~Financial~~FASB ~~Accounting~~issued ~~Standards~~ASU ~~Board~~2025-08 Financial Instruments—Credit Losses (~~FASB~~Topic 326) ~~issued~~— ~~Accounting~~Purchased ~~Standards~~Loans. The amendments in this Update expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this Update, loans (~~ASU~~excluding credit cards) Noacquired without credit deterioration and deemed “seasoned” are purchased seasoned loans and accounted for using the gross-up approach at acquisition. ~~2023~~All non-09 ~~“Income~~PCD ~~Taxes~~(purchased financial asset with credit deterioration) loans (~~Topic~~excluding ~~740~~credit cards): ~~Improvements~~that toare ~~Income~~acquired ~~Tax~~in ~~Disclosures~~a business combination are deemed seasoned.” ~~Among~~Other ~~other~~non-PCD ~~things,~~loans ~~these~~(excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The amendments ~~require~~in ~~that~~this ~~public~~Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The

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~~business~~amendments ~~entities on an annual basis (1) disclose specific categories~~ in ~~the~~this ~~rate~~Update ~~reconciliation~~should ~~and~~be ~~(2)~~applied ~~provide~~prospectively ~~additional~~to ~~information~~loans ~~for reconciling items~~ that ~~meet~~are aacquired ~~quantitative~~on ~~threshold~~or ~~(if~~after the ~~effect~~initial ofapplication ~~those~~date. ~~reconciling~~Early ~~items~~adoption is ~~equal~~permitted toin oran ~~greater~~interim ~~than~~or ~~five~~annual ~~percent~~reporting ofperiod ~~the~~in ~~amount~~which ~~computed~~financial bystatements ~~multiplying~~have ~~pretax~~not ~~income~~yet ~~(loss)~~been byissued ~~the~~or ~~applicable~~made ~~statutory~~available ~~income~~for ~~tax rate~~issuance.) The ~~amendments~~Corporation ~~also~~early ~~require~~adopted ~~that~~ASU ~~all~~2025-08 ~~entities disclose~~ on anJanuary ~~annual basis the following information about income taxes paid: (~~1~~) the amount of income taxes paid (net of refunds received) disaggregated by federal~~, ~~state,~~2026. ~~and~~The ~~foreign~~Corporation ~~taxes~~applied ~~and (2)~~ the ~~amount~~standard ofto ~~income~~the ~~taxes~~acquisition ~~paid (net~~ of ~~refunds~~CedarStone ~~received)~~Financial ~~disaggregated~~Inc., ~~by individual jurisdictions in~~ which ~~income~~supported ~~taxes~~the ~~paid~~impact ~~(net of refunds received) is equal~~ to orthe ~~greater~~allowance ~~than five percent of total income taxes paid (net of refunds received.) This guidance is effective~~ for ~~public~~credit ~~business entities for annual periods beginning after December 15~~loss, ~~2024.~~but ~~Early~~limited ~~adoption~~the isimpact ~~permitted~~to ~~for~~the ~~annual~~provision ~~financial statements that have not yet been issued or made available~~ for ~~issuance.~~balances ~~The amendments should be applied~~ on aMarch ~~prospective basis although retrospective application is permitted. The Corporation adopted ASU 2023-09 January~~ 1, ~~2025, and will provide the required disclosures in the Corporation’s 2025 annual filings~~2026.

Recent Accounting Pronouncements:

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This update is intended to provide investors more detailed disclosures around specific types of expenses. This ASU requires certain details for expenses presented on the face of the consolidated statements of income as well as selling expenses to be presented in the notes to the financial statements. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Corporation is assessing ASU 2024-03 and its effect on its consolidated financial statements and related disclosures.

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3. Allowance for Credit Losses

The following table presents the activity of the allowance for credit losses by portfolio segment for the three months ended ~~September~~March 3031.


Allowance for Credit Losses:			~~September~~March 3031, ~~2025~~2026
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Beginning balance	$	1618,~~408~~805	$	1716,~~795~~620	$	12,~~559~~348	$	~~325~~222	$	47,~~087~~995
Provision for credit losses		1,584		(787)		1,100		53		1,950
Initial allowance on acquired loans		502		2,722		96		—		3,320
Loans charged-off		(364)		(8)		(2,854)		—		(3,226)
Provision for credit losses		477		174		1,992		(93)		2,550
Recoveries		248		74		1,278		—		1,600
Loans charged-off		(174)		(65)		(2,706)		—		(2,945)
Ending Balance	$	17,876	$	17,074	$	12,083	$	378	$	47,411
Recoveries		140		87		1,191		—		1,418
Ending Balance	$	19,750	$	19,538	$	12,921	$	129	$	52,338


Allowance for Credit Losses:			~~September~~March 3031, ~~2024~~2025
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Beginning balance	$	1216,~~015~~963	$	1417,~~324~~470	$	1112,~~986~~046	$	9253	$	3846,~~334~~732
PCD ACL on acquired loans		3,006		—		—		—		3,006
Provision for credit losses		775		(540)		1,959		(244)		1,950
Provision for credit losses		4,246		2,766		2,113		275		9,400
Loans charged-off		(490)		(108)		(2,643)		—		(3,241)
Loans charged-off		(3,800)		(58)		(3,078)		—		(6,936)
Recoveries		277		143		974		—		1,394
Recoveries		1,197		93		1,075		—		2,365
Ending Balance	$	17,525	$	16,965	$	12,336	$	9	$	46,835
Ending Balance	$	16,664	$	17,125	$	12,096	$	284	$	46,169

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


Allowance for Credit Losses:			September 30, 2025
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Beginning balance	$	16,963	$	17,470	$	12,046	$	253	$	46,732
Provision for credit losses		1,339		(507)		4,893		125		5,850
Loans charged -off		(1,063)		(125)		(8,207)		—		(9,395)
Recoveries		637		236		3,351		—		4,224
Ending Balance	$	17,876	$	17,074	$	12,083	$	378	$	47,411


Allowance for Credit Losses:			September 30, 2024
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Beginning balance	$	13,264	$	14,327	$	11,797	$	379	$	39,767
PCD ACL on acquired loans		3,006		—		—		0		3,006
Provision for credit losses		6,328		2,686		5,247		(95)		14,166
Loans charged -off		(7,579)		(114)		(8,526)		—		(16,219)
Recoveries		1,645		226		3,578		—		5,449
Ending Balance	$	16,664	$	17,125	$	12,096	$	284	$	46,169

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


	~~September~~March 3031, ~~2025~~2026
	Loans Past				Nonaccrual
	Due Over				With No
	90 Days				Allowance
	and Greater
(Dollar amounts in thousands)	Still Accruing		Nonaccrual		For Credit Loss
Commercial
Commercial & Industrial	$	—127	$	5,~~652~~684	$	~~418~~—
Farmland		~~177~~—		—		—
Non Farm, Non Residential		—		116,~~979~~699		7213,376
Agriculture		29318		~~867~~1,337		—
All Other Commercial		—		~~1,640~~191		143
Residential
First Liens		~~919~~104		~~907~~984		84—
Home Equity		~~227~~138		~~462~~465		—
Junior Liens		~~189~~263		47180		—
Multifamily		~~232~~—		~~267~~508		~~212~~453
All Other Residential		74—		~~2,884~~—		20—
Consumer
Motor Vehicle		—22		2,~~564~~428		—
All Other Consumer		—		~~201~~183		—
TOTAL	$	~~1,847~~972	$	1728,~~470~~659	$	~~949~~13,972


	December 31, ~~2024~~2025
	Loans Past				Nonaccrual
	Due Over				With No
	90 Days				Allowance
	and Greater
(Dollar amounts in thousands)	Still Accruing		Nonaccrual		For Credit Loss
Commercial
Commercial & Industrial	$	4351	$	26,~~092~~058	$	—394
Farmland		—		~~1,047~~—		~~806~~—
Non Farm, Non Residential		—		115,~~733~~365		~~897~~13,126
Agriculture		—		~~644~~1,218		~~623~~—
All Other Commercial		—		~~1,181~~195		~~1,116~~143
Residential
First Liens		~~459~~606		~~1,464~~918		~~694~~82
Home Equity		~~822~~178		~~107~~442		—
Junior Liens		~~243~~232		8581		27—
Multifamily		~~321~~47		~~291~~517		~~225~~205
All Other Residential		—		~~103~~39		4620
Consumer
Motor Vehicle		—		2,~~364~~449		—
All Other Consumer		—		~~368~~213		—
TOTAL	$	1,~~888~~114	$	1127,~~479~~495	$	413,~~434~~970

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


	~~September~~March 3031, ~~2025~~2026
	Collateral Type
(Dollar amounts in thousands)	Real Estate		Other
Commercial
Commercial & Industrial	$	3,~~868~~527	$	5,~~413~~965
Farmland		48		—
Non Farm, Non Residential		417,~~543~~866		—
Agriculture		—		~~906~~1,334
All Other Commercial		~~1,586~~143		—
Residential
First Liens		842,963		—
Home Equity		—255		—
Junior Liens		—402		—
Multifamily		~~212~~453		—
All Other Residential		~~2,864~~16		—
Consumer
Motor Vehicle		—		—
All Other Consumer		—		—
Total	$	1325,~~205~~673	$	67,~~319~~299


	December 31, ~~2024~~2025
	Collateral Type
(Dollar amounts in thousands)	Real Estate		Other
Commercial
Commercial & Industrial	$	13,644	$	5,~~978~~666
Farmland		~~996~~48		—
Non Farm, Non Residential		417,~~111~~572		—
Agriculture		—		~~623~~829
All Other Commercial		~~1,116~~143		—
Residential
First Liens		~~694~~82		—
Home Equity		—		—
Junior Liens		27—		—
Multifamily		~~225~~205		—
All Other Residential		4620		—
Consumer
Motor Vehicle		—		—
All Other Consumer		—		—
Total	$	721,~~216~~714	$	6,~~601~~495

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

~~September~~March 3031, ~~2025~~2026

90 Days

30-59 Days

60-89 Days

and Greater

Total

(Dollar amounts in thousands)

Past Due

Current

Total

Commercial

Commercial & Industrial

~~3,378~~646

58647

~~974~~1,407

42,~~410~~700

~~587~~644,~~651~~066

~~592~~646,~~061~~766

Farmland

—180

—214

~~177~~—

~~177~~394

~~127~~133,~~989~~864

~~128~~134,~~166~~258

Non Farm, Non Residential

~~220~~14,651

—87

—79

~~220~~14,817

~~884~~1,~~491~~155,018

~~884~~1,~~711~~169,835

Agriculture

75238

~~328~~—

~~231~~1,262

~~634~~1,500

~~131~~120,~~935~~170

~~132~~121,~~569~~670

All Other Commercial

—

64—

~~1,567~~162

~~1,631~~162

~~556~~351,~~583~~099

~~558~~351,~~214~~261

Residential

First Liens

~~818~~5,799

~~437~~3,169

~~1,067~~398

29,~~322~~366

~~458~~549,~~644~~392

~~460~~558,~~966~~758

Home Equity

~~599~~1,053

99264

~~633~~646

1,~~331~~963

99141,~~387~~803

~~100~~143,~~718~~766

Junior Liens

~~443~~633

~~231~~229

~~200~~311

~~874~~1,173

6975,~~801~~488

7076,~~675~~661

Multifamily

~~706~~154

—1

~~253~~278

~~959~~433

~~329~~489,~~224~~265

~~330~~489,~~183~~698

All Other Residential

—96

—

~~2,952~~—

~~2,952~~96

3637,~~129~~897

3937,~~081~~993

Consumer

Motor Vehicle

64,~~132~~931

~~1,575~~979

~~761~~666

86,~~468~~576

~~647~~671,~~706~~186

~~656~~677,~~174~~762

All Other Consumer

~~400~~385

~~118~~75

3250

~~550~~510

28,~~731~~127

2928,~~281~~637

TOTAL

1228,~~771~~766

25,~~910~~665

85,~~847~~259

2439,~~528~~690

34,~~958~~397,~~271~~375

34,~~982~~437,~~799~~065

December 31, ~~2024~~2025

90 Days

30-59 Days

60-89 Days

and Greater

Total

(Dollar amounts in thousands)

Past Due

Current

Total

Commercial

Commercial & Industrial

~~746~~883

~~768~~3,937

~~208~~1,640

16,~~722~~460

~~571~~642,~~244~~454

~~572~~648,~~966~~914

Farmland

~~598~~320

—

~~806~~—

~~1,404~~320

~~131~~128,~~582~~663

~~132~~128,~~986~~983

Non Farm, Non Residential

1,~~619~~060

—1,772

—85

12,~~619~~917

~~811~~910,~~252~~280

~~812~~913,~~871~~197

Agriculture

—63

—71

~~642~~343

~~642~~477

~~148~~141,~~647~~341

~~149~~141,~~289~~818

All Other Commercial

~~1,297~~17

~~152~~—

—175

~~1,449~~192

~~540~~556,~~948~~861

~~542~~557,~~397~~053

Residential

First Liens

43,~~304~~852

1,~~361~~151

~~1,224~~779

65,~~889~~782

444,~~792~~131

~~451~~449,~~681~~913

Home Equity

~~639~~618

~~157~~234

~~906~~566

1,~~702~~418

88105,~~137~~700

89107,~~839~~118

Junior Liens

~~356~~403

~~101~~126

~~290~~266

~~747~~795

6471,~~154~~989

6472,~~901~~784

Multifamily

~~529~~187

74265

~~345~~68

~~948~~520

~~318~~331,~~763~~317

~~319~~331,~~711~~837

All Other Residential

2526

—

~~108~~24

~~133~~50

4428,~~477~~936

4428,~~610~~986

Consumer

Motor Vehicle

107,~~176~~186

1,~~435~~457

~~808~~629

129,~~419~~272

~~627~~653,~~119~~385

~~639~~662,~~538~~657

All Other Consumer

~~555~~392

~~122~~103

~~123~~68

~~800~~563

3028,~~843~~056

3128,~~643~~619

TOTAL

2015,~~844~~007

49,~~170~~116

54,~~460~~643

3028,~~474~~766

34,~~821~~043,~~958~~113

34,~~852~~071,~~432~~879

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Loan Modifications Made to Borrowers Experiencing Financial Difficulty:

Modification of the terms of such loans typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.

The following table presents the amortized cost of loans and leases at ~~September~~March 3031, ~~2025~~2026 that were both experiencing financial difficulty and modified during the twelve months ended ~~September~~March 3031, ~~2025~~2026, by class and by type of modification. The percentage of the amortized cost of loans and leases that were modified to borrowers in financial distress as compared to the amortized cost of each class of financial receivable is also presented below.



										Combination		Combination
										Term		Term		Total
										Extension and		Extension		Class of
	Principal		Payment		Term		Interest Rate			Principal		Interest Rate		Financing
(Dollar amounts in thousands)	Forgiveness		Delay		Extension		Reduction		Forgiveness		Reduction		Receivable
Residential
First Liens	$	—	$	—	$	—12	$	~~104~~103	$	—	$	~~136~~50		0.0503	%
Junior Liens		—		—		—14		—		—		5352		0.0809	%
All Other Residential		—		—		—		—		—		74		0.20	%
Consumer
Motor Vehicle		—15		—		—5		—		~~193~~229		9049		0.04	%
TOTAL	$	—15	$	—	$	—31	$	~~104~~103	$	~~193~~229	$	~~279~~225		0.01	%

The Corporation has no commitments to lend additional amounts to the borrowers included in the table above.

The Corporation closely monitors the performance of loans and leases that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last twelve months:


	~~September~~March 3031, ~~2025~~2026

	30 - 59		60 - 89		Greater Than
	Days		Days		89 Days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due

Residential
First Liens	$	103	$	—	$	—	$	103
Consumer
Motor Vehicle	$	—18	$	2—	$	—	$	218
TOTAL	$	—121	$	2—	$	—	$	2121

The following table presents the financial effect of loan and lease modifications presented above to borrowers experiencing financial difficulty for the twelve months ended ~~September~~March 3031, ~~2025~~2026.


				Weighted-			Weighted-
				Average			Average
		Principal		Interest Rate			Term
(Dollar amounts in thousands)		Forgiveness		Reduction			Extension
Residential
First Liens		$	—		1.53	%		100
Junior Liens			—		1.25	%		99
All Other Residential			—		0.63	%		180
Consumer
Motor Vehicle			107		1.27	%		22
TOTAL		$	107		1.25	%		72


			Weighted-			Weighted-
			Average			Average
	Principal		Interest Rate			Term
(Dollar amounts in thousands)	Forgiveness		Reduction			Extension
Residential
First Liens	$	—		1.17	%		83
Junior Liens	$	—		1.25	%		60
Consumer
Motor Vehicle		97		1.95	%		22
TOTAL	$	97		1.36	%		49

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The following table presents the amortized cost basis of loans that had a payment default during the twelve months ended ~~September~~March 3031, ~~2025~~2026 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.



	Principal		Payment		Term		Interest Rate
(Dollar amounts in thousands)	Forgiveness		Delay		Extension		Reduction

Residential
First Liens	$	—	$	—	$	—	$	103
Consumer
Motor Vehicle	$	218	$	—	$	218	$	2—
TOTAL	$	218	$	—	$	218	$	2103

Upon the Corporation’s determination that a modified loan has subsequently been deemed uncollectible, the loan is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial loans, with an outstanding balance greater than $250 thousand. Any consumer loans outstanding to a borrower who had commercial loans analyzed will be similarly risk rated. This analysis is performed on a quarterly basis. The Corporation uses the following definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and debt service capacity of the borrower or of any pledged collateral. These loans have a well-defined weakness or weaknesses which have clearly jeopardized repayment of principal and interest as originally intended. They are characterized by the distinct possibility that the institution will sustain some future loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those graded substandard, with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values.

Furthermore, non-homogeneous loans which were not individually analyzed, but are 90+ days past due or on non-accrual are classified as substandard. Loans included in homogeneous pools, such as residential or consumer may be classified as substandard due to 90+ days delinquency, non-accrual status, bankruptcy, or loan restructuring.

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The following tables present the commercial loan portfolio by risk category. These balances do not include accrued interest:


		~~September~~March 3031, ~~2025~~2026
		Term Loans at Amortized Cost Basis by Origination Year												Revolving
		~~2025~~2026		~~2024~~2025		~~2023~~2024		~~2022~~2023		~~2021~~2022		Prior		Loans		Total
Commercial
Commercial and Industrial	Pass	$	6532,~~788~~340	$	7273,~~987~~976	$	3368,~~466~~693	$	9329,~~192~~830	$	7387,~~177~~896	$	~~100~~158,~~567~~351	$	~~113~~161,~~843~~619	$	~~553~~612,~~020~~705
	Special Mention		—3,132		41,~~691~~979		31,~~742~~154		~~135~~277		~~5,606~~413		34,~~892~~784		13,~~431~~243	$	1914,~~497~~982
	Substandard		—		1199		4515		~~613~~25		1,~~556~~007		37,~~609~~981		74,~~765~~541	$	13,~~599~~668
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		~~1,320~~152		1,~~207~~405		~~599~~972		425		~~159~~201		73130		—	$	3,~~783~~285
	Subtotal	$	6735,~~108~~624	$	7877,~~896~~459	$	3770,~~852~~834	$	9430,~~365~~557	$	8089,~~498~~517	$	~~108~~171,~~141~~246	$	~~123~~169,~~039~~403	$	~~589~~644,~~899~~640

	Current period gross charge-offs	$	81-	$	52-	$	-	$	54-	$	43-	$	~~185~~1	$	-	$	~~415~~1

Farmland	Pass	$	103,~~469~~962	$	919,~~795~~258	$	179,~~947~~588	$	1417,~~332~~674	$	1614,~~126~~254	$	5161,~~864~~932	$	~~1,260~~315	$	~~121~~126,~~793~~983
	Special Mention		—		~~1,151~~749		~~701~~1,357		—478		—81		891,978		—	$	14,~~941~~643
	Substandard		—		—		~~478~~—		—		~~173~~48		~~686~~280		—	$	~~1,337~~328
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		—		—		116		—	$	116
	Subtotal	$	103,~~469~~962	$	1020,~~946~~007	$	1910,~~126~~945	$	1418,~~332~~152	$	1614,~~299~~383	$	5264,~~650~~196	$	~~1,260~~315	$	~~125~~131,~~082~~960

	Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	—

Non Farm, Non Residential	Pass	$	~~113~~41,~~601~~575	$	~~165~~194,~~330~~778	$	88201,~~358~~574	$	~~154~~123,~~745~~729	$	~~147~~174,~~159~~132	$	~~180~~384,~~382~~102	$	811,~~813~~995	$	~~858~~1,~~388~~131,885
	Special Mention		—		—		—8,329		~~1,034~~—		—900		~~239~~2,114		—	$	111,~~273~~343
	Substandard		—		—		—		~~2,264~~—		151,~~373~~907		420,~~214~~381		—	$	2122,~~851~~288
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		—		—		~~703~~701		—	$	~~703~~701
	Subtotal	$	~~113~~41,~~601~~575	$	~~165~~194,~~330~~778	$	88209,~~358~~903	$	~~158~~123,~~043~~729	$	~~162~~176,~~532~~939	$	~~185~~407,~~538~~298	$	811,~~813~~995	$	~~882~~1,~~215~~166,217

	Current period gross charge-offs	$	-	$	-	$	-	$	33-	$	-	$	-	$	-	$	33—

Agriculture	Pass	$	81,~~187~~813	$	109,~~573~~515	$	69,~~493~~470	$	64,~~733~~937	$	3,~~613~~832	$	19,~~645~~694	$	5853,~~268~~283	$	~~113~~102,~~512~~544
	Special Mention		~~221~~—		95—		—279		~~914~~676		~~181~~2,758		1,~~004~~102		43,~~072~~767	$	68,~~487~~582
	Substandard		—		~~332~~28		~~224~~296		~~152~~196		28109		4,~~138~~967		41,~~336~~798	$	97,~~210~~394
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		2—		—1		3—		21—		13—		—	$	391
	Subtotal	$	81,~~408~~813	$	119,~~002~~543	$	610,~~717~~046	$	75,~~802~~809	$	36,~~843~~699	$	2425,~~800~~763	$	6658,~~676~~848	$	~~129~~118,~~248~~521

	Current period gross charge-offs	$	-	$	3-	$	-	$	-	$	-	$	52-	$	-	$	55—

Other Commercial	Pass	$	5419,~~812~~711	$	91109,~~816~~369	$	6242,~~942~~489	$	9013,~~871~~240	$	8966,~~058~~376	$	~~155~~88,~~635~~845	$	7,~~885~~843	$	~~553~~347,~~019~~873
	Special Mention		—		—300		—561		—		—		—		—	$	—861
	Substandard		—		—		—		~~1,443~~—		~~548~~—		~~216~~743		—	$	~~2,207~~743
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		18—		—4		~~374~~170		—	$	~~392~~174
	Subtotal	$	5419,~~812~~711	$	91109,~~816~~669	$	6243,~~942~~050	$	9213,~~332~~240	$	8966,~~606~~380	$	~~156~~89,~~225~~758	$	7,~~885~~843	$	~~555~~349,~~618~~651

	Current period gross charge-offs	$	~~560~~173	$	-	$	-	$	-	$	-	$	-	$	-	$	~~560~~173

Residential
Multifamily >5 Residential	Pass	$	253,~~418~~578	$	8554,~~258~~040	$	65134,~~416~~852	$	5680,~~186~~749	$	3669,~~575~~263	$	38124,~~848~~611	$	~~634~~235	$	~~308~~467,~~335~~328
	Special Mention		—6,181		—		—		~~12,193~~—		—11,956		~~6,643~~69		—	$	18,~~836~~206
	Substandard		—		—		—		~~212~~—		—201		21278		—	$	~~233~~479
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		—		~~421~~—		~~927~~1,358		—	$	1,~~348~~358
	Subtotal	$	259,~~418~~759	$	8554,~~258~~040	$	65134,~~416~~852	$	6880,~~591~~749	$	3681,~~996~~420	$	46126,~~439~~316	$	~~634~~235	$	~~328~~487,~~752~~371

	Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	—

Total	Pass	$	~~278~~102,~~275~~979	$	~~435~~460,~~759~~936	$	~~274~~466,~~622~~666	$	~~416~~270,~~059~~159	$	~~365~~415,~~708~~753	$	~~546~~837,~~941~~535	$	~~190~~235,~~703~~290	$	2,~~508~~789,~~067~~318
	Special Mention		~~221~~9,313		53,~~937~~028		411,~~443~~680		141,~~276~~431		516,~~787~~108		1110,~~867~~047		57,~~503~~010	$	4858,~~034~~617
	Substandard		—		~~343~~127		~~747~~311		~~4,684~~221		173,~~678~~272		1234,~~884~~630		126,~~101~~339	$	4844,~~437~~900
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		~~1,320~~152		1,~~209~~405		~~599~~973		~~446~~425		~~601~~205		2,~~101~~365		—	$	65,~~276~~525
		$	~~279~~112,~~816~~444	$	~~443~~465,~~248~~496	$	~~280~~479,~~411~~630	$	~~435~~272,~~465~~236	$	~~389~~435,~~774~~338	$	~~573~~884,~~793~~577	$	~~208~~248,~~307~~639	$	2,~~610~~898,~~814~~360

1615

Table of Contents


		December 31, ~~2024~~2025
		Term Loans at Amortized Cost Basis by Origination Year												Revolving
		~~2024~~2025		~~2023~~2024		~~2022~~2023		~~2021~~2022		~~2020~~2021		Prior		Loans		Total
Commercial
Commercial and Industrial	Pass	$	92109,~~372~~471	$	3869,~~454~~074	$	~~104~~31,~~695~~396	$	7689,~~691~~638	$	3570,~~180~~630	$	9099,~~984~~985	$	85140,~~448~~465	$	~~523~~610,~~824~~659
	Special Mention		~~354~~—		~~137~~6,292		~~870~~302		91,~~953~~145		25,~~931~~347		13,~~052~~769		12,~~078~~603	$	1619,~~375~~458
	Substandard		~~4,464~~—		~~3,461~~11		~~233~~32		~~1,478~~504		~~374~~1,511		106,~~244~~737		54,~~904~~203	$	2612,~~158~~998
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		21,~~041~~595		~~924~~1,061		~~735~~514		~~353~~289		~~153~~115		7553		—	$	43,~~281~~627
	Subtotal	$	99111,~~231~~066	$	4276,~~976~~438	$	~~106~~32,~~533~~244	$	8891,~~475~~576	$	3877,~~638~~603	$	~~102~~110,~~355~~544	$	92147,~~430~~271	$	~~570~~646,~~638~~742

	Current period gross charge-offs	$	-81	$	-52	$	~~1,982~~-	$	~~4,716~~86	$	5456	$	96219	$	-	$	~~6,848~~494

Farmland	Pass	$	1215,~~676~~852	$	199,~~782~~054	$	1517,~~526~~769	$	2014,~~086~~137	$	715,~~565~~774	$	5149,~~413~~862	$	~~494~~365	$	~~127~~122,~~542~~813
	Special Mention		—		—1,145		—701		—		—		~~817~~87		—	$	~~817~~1,933
	Substandard		—		—		35478		~~237~~—		—		~~1,292~~626		—	$	1,~~564~~104
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		—		—		116		—	$	116
	Subtotal	$	1215,~~676~~852	$	1910,~~782~~199	$	1518,~~561~~948	$	2014,~~323~~137	$	715,~~565~~774	$	5350,~~533~~581	$	~~494~~365	$	~~129~~125,~~934~~856

	Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	—

Non Farm, Non Residential	Pass	$	~~145~~156,~~512~~729	$	85157,~~201~~955	$	~~162~~90,~~233~~074	$	~~167~~153,~~505~~861	$	40138,~~094~~925	$	~~164~~170,~~625~~080	$	199,~~286~~680	$	~~784~~877,~~456~~304
	Special Mention		—		~~107~~8,350		~~411~~—		~~12,976~~946		—		—2,034		—	$	1311,~~494~~330
	Substandard		~~636~~—		50—		~~2,596~~—		21,~~736~~924		~~102~~15,699		53,~~602~~382		—	$	1121,~~722~~005
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		—		~~658~~—		62697		—	$	~~720~~697
	Subtotal	$	~~146~~156,~~148~~729	$	85166,~~358~~305	$	~~165~~90,~~240~~074	$	~~183~~156,~~217~~731	$	40154,~~854~~624	$	~~170~~176,~~289~~193	$	199,~~286~~680	$	~~810~~910,~~392~~336

	Current period gross charge-offs	$	-	$	-	$	-	$	-33	$	-	$	-11	$	-	$	—44

Agriculture	Pass	$	1213,~~492~~315	$	710,~~810~~053	$	96,~~281~~034	$	46,~~815~~428	$	43,~~824~~040	$	2027,~~925~~137	$	8156,~~991~~978	$	~~142~~122,~~138~~985
	Special Mention		—385		—84		84—		—914		5141		~~1,353~~999		14,~~750~~298	$	36,~~192~~821
	Substandard		—29		—287		—207		—142		—17		~~649~~4,422		—3,865	$	~~649~~8,969
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		12—		—1		27—		231		1321		—		—	$	7523
	Subtotal	$	1213,~~504~~729	$	710,~~810~~425	$	96,~~392~~241	$	47,~~838~~485	$	43,~~842~~219	$	2232,~~927~~558	$	8365,~~741~~141	$	~~146~~138,~~054~~798

	Current period gross charge-offs	$	-	$	-4	$	53-	$	-	$	-	$	-83	$	-	$	5387

Other Commercial	Pass	$	6195,~~991~~156	$	5687,~~715~~870	$	9962,~~257~~856	$	~~112~~90,~~668~~093	$	9370,~~030~~734	$	~~102~~136,~~823~~922	$	107,~~435~~986	$	~~536~~551,~~919~~617
	Special Mention		—300		—560		—		—		—		~~758~~—		—	$	~~758~~860
	Substandard		—		—		~~940~~—		—		21541		~~240~~213		—	$	~~1,201~~754
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		26—		—15		9—		~~420~~366		—	$	~~455~~381
	Subtotal	$	6195,~~991~~456	$	5688,~~715~~430	$	~~100~~62,~~223~~856	$	~~112~~90,~~668~~108	$	9371,~~060~~275	$	~~104~~137,~~241~~501	$	107,~~435~~986	$	~~539~~553,~~333~~612

	Current period gross charge-offs	$	~~889~~728	$	~~100~~-	$	-	$	-	$	-	$	-	$	-	$	~~989~~728

Residential
Multifamily >5 Residential	Pass	$	7830,~~426~~157	$	6596,~~289~~593	$	5855,~~565~~938	$	4254,~~191~~759	$	2234,~~950~~709	$	2637,~~018~~417	$	~~4,662~~544	$	~~298~~310,~~101~~117
	Special Mention		—		—		~~12,538~~—		—12,075		~~342~~—		6,~~259~~319		—	$	1918,~~139~~394
	Substandard		—		—		~~225~~—		—205		—		24280		—	$	~~249~~485
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		—		—		—		~~424~~—		—420		~~653~~953		—	$	1,~~077~~373
	Subtotal	$	7830,~~426~~157	$	6596,~~289~~593	$	7155,~~328~~938	$	4267,~~615~~039	$	2335,~~292~~129	$	3244,~~954~~969	$	~~4,662~~544	$	~~318~~330,~~566~~369

	Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	—

Total	Pass	$	~~403~~420,~~469~~680	$	~~273~~430,~~251~~599	$	~~449~~264,~~557~~067	$	~~423~~408,~~956~~916	$	~~203~~333,~~643~~812	$	~~456~~521,~~788~~403	$	~~202~~216,~~316~~018	$	2,~~412~~595,~~980~~495
	Special Mention		~~354~~685		~~244~~16,431		131,~~903~~003		2215,~~929~~080		35,~~278~~488		1013,~~239~~208		26,~~828~~901	$	5358,~~775~~796
	Substandard		~~5,100~~29		~~3,511~~298		~~4,029~~717		42,~~451~~775		~~497~~17,768		1815,~~051~~660		58,~~904~~068	$	4145,~~543~~315
	Doubtful		—		—		—		—		—		—		—	$	—
	Not Rated		21,~~053~~595		~~924~~1,062		~~788~~514		~~800~~305		~~833~~556		12,~~221~~075		—	$	6,~~619~~107
		$	~~410~~422,~~976~~989	$	~~277~~448,~~930~~390	$	~~468~~266,~~277~~301	$	~~452~~427,~~136~~076	$	~~208~~357,~~251~~624	$	~~486~~552,~~299~~346	$	~~211~~230,~~048~~987	$	2,~~514~~705,~~917~~713

1716

Table of Contents

The Corporation evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and lease financing loans, based primarily on the aging status of the loan and payment activity. Accordingly, loans on non-accrual status and loans past due 90 days or more and still accruing interest are considered to be nonperforming for purposes of credit quality evaluation. The following table presents the other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming. These balances do not include accrued interest:


		~~September~~March 3031, ~~2025~~2026
		Term Loans at Amortized Cost Basis by Origination Year												Revolving
		~~2025~~2026		~~2024~~2025		~~2023~~2024		~~2022~~2023		~~2021~~2022		Prior		Loans		Total
Residential
First Liens	Performing	$	5025,~~005~~547	$	6683,~~465~~278	$	4385,~~592~~554	$	8054,~~422~~171	$	6379,~~100~~082	$	~~152~~223,~~136~~641	$	12,~~788~~381	$	~~457~~553,~~508~~654
	Non-performing		—		~~105~~82		—1,282		—		46508		1,~~716~~232		—	$	13,~~867~~104
	Subtotal	$	5025,~~005~~547	$	6683,~~570~~360	$	4386,~~592~~836	$	8054,~~422~~171	$	6379,~~146~~590	$	~~153~~224,~~852~~873	$	12,~~788~~381	$	~~459~~556,~~375~~758

	Current period gross charge-offs	$	-	$	-9	$	-	$	-	$	-	$	118	$	-	$	1117

Home Equity	Performing	$	~~338~~2,017	$	~~933~~11,440	$	~~706~~1,027	$	~~808~~958	$	~~260~~678	$	1,~~288~~769	$	95124,~~371~~577	$	99142,~~704~~466
	Non-performing		—		—		—233		34—		4230		~~182~~156		~~431~~394	$	~~689~~813
	Subtotal	$	~~338~~2,017	$	~~933~~11,440	$	~~706~~1,260	$	~~842~~958	$	~~302~~708	$	1,~~470~~925	$	95124,~~802~~971	$	~~100~~143,~~393~~279

	Current period gross charge-offs	$	-	$	-	$	-	$	22-	$	-	$	194	$	-	$	414

Junior Liens	Performing	$	165,~~119~~987	$	1522,~~342~~893	$	1013,~~230~~674	$	9,~~865~~291	$	59,~~125~~290	$	1113,~~017~~083	$	21,~~537~~855	$	7076,~~235~~073
	Non-performing		—		4334		7948		20103		—74		88		—	$	~~230~~347
	Subtotal	$	165,~~119~~987	$	1522,~~385~~927	$	1013,~~309~~722	$	9,~~885~~394	$	59,~~125~~364	$	1113,~~105~~171	$	21,~~537~~855	$	7076,~~465~~420

	Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	736	$	-	$	736

Other Residential	Performing	$	73,~~378~~414	$	1018,~~403~~149	$	74,~~687~~369	$	43,~~937~~004	$	3,~~646~~451	$	15,~~797~~199	$	~~108~~250	$	3537,~~956~~836
	Non-performing		—		~~2,844~~—		72—		—		49—		92		—	$	2~~,974~~
	Subtotal	$	73,~~378~~414	$	1318,~~247~~149	$	74,~~759~~369	$	43,~~937~~004	$	3,~~695~~451	$	15,~~806~~201	$	~~108~~250	$	3837,~~930~~838

	Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-38	$	-	$	—38

Consumer
Motor Vehicle	Performing	$	~~217~~81,~~368~~026	$	~~187~~261,~~404~~573	$	~~129~~152,~~967~~714	$	8999,~~487~~898	$	1863,~~349~~423	$	813,~~181~~732	$	109	$	~~650~~672,~~766~~375
	Non-performing		~~212~~—		~~441~~348		~~547~~584		~~876~~569		~~242~~705		~~224~~253		—	$	2,~~542~~459
	Subtotal	$	~~217~~81,~~580~~026	$	~~187~~261,~~845~~921	$	~~130~~153,~~514~~298	$	90100,~~363~~467	$	1864,~~591~~128	$	813,~~405~~985	$	109	$	~~653~~674,~~308~~834

	Current period gross charge-offs	$	~~250~~-	$	~~1,543~~629	$	~~1,799~~597	$	~~3,205~~497	$	~~649~~668	$	~~207~~115	$	-	$	72,~~653~~506

Other Consumer	Performing	$	~~4,394~~828	$	64,~~751~~990	$	34,~~392~~307	$	12,~~792~~313	$	1,~~303~~298	$	1,~~080~~877	$	1012,~~181~~663	$	28,~~893~~276
	Non-performing		3—		547		7859		561		393		2139		3743	$	~~237~~212
	Subtotal	$	~~4,397~~828	$	64,~~805~~997	$	34,~~470~~366	$	12,~~797~~374	$	1,~~342~~301	$	1,~~101~~916	$	1012,~~218~~706	$	2928,~~130~~488

	Current period gross charge-offs	$	10-	$	~~177~~10	$	~~145~~29	$	535	$	3814	$	446	$	~~127~~96	$	~~554~~200

Total	Performing	$	~~295~~118,~~602~~819	$	~~287~~402,~~298~~323	$	~~195~~261,~~574~~645	$	~~187~~169,~~311~~635	$	91157,~~783~~222	$	~~175~~259,~~499~~301	$	~~109~~141,~~995~~735	$	1,~~343~~510,~~062~~680
	Non-performing		~~215~~—		~~3,487~~471		~~776~~2,206		~~935~~733		~~418~~1,320		21,~~240~~770		~~468~~437	$	86,~~539~~937
Total other loans		$	~~295~~118,~~817~~819	$	~~290~~402,~~785~~794	$	~~196~~263,~~350~~851	$	~~188~~170,~~246~~368	$	92158,~~201~~542	$	~~177~~261,~~739~~071	$	~~110~~142,~~463~~172	$	1,~~351~~517,~~601~~617

1817

Table of Contents


		December 31, ~~2024~~2025
		Term Loans at Amortized Cost Basis by Origination Year												Revolving
		~~2024~~2025		~~2023~~2024		~~2022~~2023		~~2021~~2022		~~2020~~2021		Prior		Loans		Total
Residential
First Liens	Performing	$	64,~~953~~142	$	4761,~~930~~775	$	8939,~~205~~526	$	6974,~~090~~359	$	3760,~~658~~920	$	~~136~~144,~~805~~310	$	21,~~279~~786	$	~~447~~446,~~920~~818
	Non-performing		—		—70		—		~~180~~—		~~113~~45		21,~~019~~456		—	$	21,~~312~~571
	Subtotal	$	64,~~953~~142	$	4761,~~930~~845	$	8939,~~205~~526	$	6974,~~270~~359	$	3760,~~771~~965	$	~~138~~145,~~824~~766	$	21,~~279~~786	$	~~450~~448,~~232~~389

	Current period gross charge-offs	$	-	$	-33	$	-31	$	-	$	-	$	~~221~~11	$	-	$	~~221~~75

Home Equity	Performing	$	~~966~~338	$	~~562~~938	$	~~1,017~~793	$	31650	$	~~143~~259	$	1,~~149~~284	$	84101,~~723~~907	$	88106,~~591~~169
	Non-performing		—		—		41—		—33		3817		~~108~~175		~~720~~393	$	~~907~~618
	Subtotal	$	~~966~~338	$	~~562~~938	$	~~1,058~~793	$	31683	$	~~181~~276	$	1,~~257~~459	$	85102,~~443~~300	$	89106,~~498~~787

	Current period gross charge-offs	$	-	$	-	$	22-	$	-22	$	-	$	2819	$	5110	$	~~101~~51

Junior Liens	Performing	$	1623,~~989~~832	$	1213,~~371~~403	$	129,~~590~~409	$	69,~~431~~145	$	54,~~200~~674	$	9,~~229~~676	$	12,~~578~~107	$	6472,~~388~~246
	Non-performing		—		3914		41152		3825		6017		~~146~~99		—	$	~~324~~307
	Subtotal	$	1623,~~989~~832	$	1213,~~410~~417	$	129,~~631~~561	$	69,~~469~~170	$	54,~~260~~691	$	9,~~375~~775	$	12,~~578~~107	$	6472,~~712~~553

	Current period gross charge-offs	$	-	$	1530	$	-	$	-	$	-	$	-85	$	-	$	15115

Other Residential	Performing	$	177,~~542~~829	$	136,~~123~~807	$	63,~~960~~843	$	4,~~392~~991	$	~~628~~3,573	$	1,~~559~~757	$	53—	$	4428,~~257~~800
	Non-performing		—		—		—		80—		549		368		—	$	~~121~~57
	Subtotal	$	177,~~542~~829	$	136,~~123~~807	$	63,~~960~~843	$	4,~~472~~991	$	~~633~~3,622	$	1,~~595~~765	$	53—	$	4428,~~378~~857

	Current period gross charge-offs	$	-	$	-	$	-	$	6-	$	-	$	-	$	-	$	6—

Consumer
Motor Vehicle	Performing	$	~~247~~279,~~368~~286	$	~~187~~168,~~134~~244	$	~~139~~113,~~251~~956	$	3776,~~043~~182	$	2014,~~130~~119	$	35,~~290~~441	$	119	$	~~634~~657,~~227~~237
	Non-performing		~~144~~222		~~346~~519		~~1,112~~500		~~398~~866		~~286~~194		59128		—	$	2,~~345~~429
	Subtotal	$	~~247~~279,~~512~~508	$	~~187~~168,~~480~~763	$	~~140~~114,~~363~~456	$	3777,~~441~~048	$	2014,~~416~~313	$	35,~~349~~569	$	119	$	~~636~~659,~~572~~666

	Current period gross charge-offs	$	~~478~~759	$	2,~~692~~380	$	42,~~839~~279	$	14,~~751~~075	$	~~587~~713	$	97249	$	-	$	10,~~444~~455

Other Consumer	Performing	$	114,~~580~~776	$	65,~~883~~276	$	32,~~270~~726	$	21,~~161~~503	$	1,~~094~~137	$	~~576~~942	$	511,~~501~~842	$	3128,~~065~~202
	Non-performing		322		9267		~~155~~67		7519		2435		312		4065	$	~~421~~267
	Subtotal	$	114,~~612~~778	$	65,~~975~~343	$	32,~~425~~793	$	21,~~236~~522	$	1,~~118~~172	$	~~579~~954	$	511,~~541~~907	$	3128,~~486~~469

	Current period gross charge-offs	$	5013	$	~~197~~246	$	~~121~~180	$	2253	$	1644	$	24	$	~~182~~201	$	~~612~~761

Total	Performing	$	~~359~~380,~~398~~203	$	~~268~~256,~~003~~443	$	~~252~~170,~~293~~253	$	~~119~~166,~~148~~830	$	6484,~~853~~682	$	~~152~~163,~~608~~410	$	94117,~~145~~651	$	1,~~310~~339,~~448~~472
	Non-performing		~~176~~224		~~477~~670		~~1,349~~719		~~771~~943		~~526~~357		21,~~371~~878		~~760~~458	$	65,~~430~~249
Total other loans		$	~~359~~380,~~574~~427	$	~~268~~257,~~480~~113	$	~~253~~170,~~642~~972	$	~~119~~167,~~919~~773	$	6585,~~379~~039	$	~~154~~165,~~979~~288	$	94118,~~905~~109	$	1,~~316~~344,~~878~~721

The Corporation has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:




(Dollar amounts in thousands)	2026		2025

Purchase price of loans at acquisition	$	2,795	$	—
Allowance for credit losses at acquisition		695		—
Non-credit discount at acquisition		226		—
		—		—
Par value of loans at acquisition	$	3,716	$	—

Table of Contents

4. Securities

The amortized cost and fair value of the Corporation’s investments are shown below. All securities are classified as available-for-sale.

~~September~~March 3031, ~~2025~~2026

Amortized

Unrealized

(Dollar amounts in thousands)

Cost

Gains

Losses

Fair Value

U.S. Government agencies

8797,~~559~~515

95113

(87,~~472~~838)

7989,~~182~~790

Mortgage Backed Securities - residential

~~596~~581,~~918~~177

~~897~~250

(6260,~~313~~490)

~~535~~520,~~502~~937

Mortgage Backed Securities - commercial

12,~~821~~668

(~~313~~429)

12,~~510~~240

Collateralized mortgage obligations

~~176~~180,~~523~~592

7439

(2223,~~736~~138)

~~153~~157,~~861~~493

State and municipal obligations

~~394~~397,~~013~~395

~~834~~681

(29,~~211~~257)

~~365~~368,~~636~~819

Municipal taxable

4020,~~200~~561

8352

(32,~~710~~014)

3618,~~573~~599

Collateralized debt obligations

—248

2,~~843~~642

—

2,~~843~~890

TOTAL

1,~~308~~290,~~034~~156

43,~~828~~778

(~~126~~123,~~755~~166)

1,~~186~~170,~~107~~768

December 31, ~~2024~~2025

Amortized

Unrealized

(Dollar amounts in thousands)

Cost

Gains

Losses

Fair Value

U.S. Government agencies

9091,~~649~~945

3114

(117,~~670~~749)

7884,~~982~~310

Mortgage Backed Securities-residential

~~630~~573,~~556~~002

15873

(8958,~~251~~456)

~~541~~515,~~320~~419

Mortgage Backed Securities-commercial

1412,~~182~~712

(~~523~~328)

1312,~~661~~386

Collateralized mortgage obligations

~~190~~179,~~552~~638

2982

(2721,~~555~~622)

~~163~~158,~~026~~098

State and municipal obligations

~~394~~379,~~696~~894

~~171~~1,280

(3423,~~539~~456)

~~360~~357,~~328~~718

Municipal taxable

4120,~~162~~554

1184

(51,~~396~~893)

3518,~~777~~745

Collateralized debt obligations

—

2,~~896~~850

—

2,~~896~~850

TOTAL

1,~~361~~257,~~797~~745

35,~~127~~285

(~~168~~113,~~934~~504)

1,~~195~~149,~~990~~526

Contractual maturities of debt securities at ~~September~~March 3031, ~~2025~~2026 were as follows.


	Available-for-Sale
	Amortized		Fair
(Dollar amounts in thousands)	Cost		Value
Due in one year or less	$	117,~~654~~601	$	117,~~621~~565
Due after one but within five years		4432,~~532~~626		4332,~~683~~060
Due after five but within ten years		~~131~~126,~~477~~240		~~128~~123,~~522~~068
Due after ten years		~~334~~349,~~109~~252		~~300~~317,~~408~~405
		~~521~~515,~~772~~719		~~484~~480,~~234~~098
Mortgage-backed securities and collateralized mortgage obligations		~~786~~774,~~262~~437		~~701~~690,~~873~~670
TOTAL	$	1,~~308~~290,~~034~~156	$	1,~~186~~170,~~107~~768

~~For~~There ~~the three and nine months ended September 30, 2025, there~~ were ~~$25~~no ~~thousand in~~ gross gains ~~realized for both periods~~ and ~~$1 thousand and $4 thousand in gross~~ losses ~~realized~~from oninvestment sales/calls ofrealized ~~investment~~by ~~securities.~~the ~~For~~Corporation for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2026. Additionally, there were ~~$132~~no ~~thousand~~gross gains and ~~$133~~losses ~~thousand~~from ininvestment ~~gross~~sales/calls ~~gains~~realized ~~and~~by ~~$29~~the ~~thousand~~Corporation infor ~~gross~~the ~~losses~~three ~~realized~~months ~~for~~ended ~~both~~March ~~periods~~31, 2025.

Table of Contents

The following tables show the securities’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025.

~~September~~March 3031, ~~2025~~2026

Less Than 12 Months

More Than 12 Months

Total

Unrealized

(Dollar amounts in thousands)

Fair Value

Losses

Fair Value

Losses

Fair Value

Losses

U.S. Government agencies

221,~~970~~026

(21150)

7055,~~049~~768

(87,~~451~~688)

7376,~~019~~794

(87,~~472~~838)

Mortgage Backed Securities - Residential

1074,~~126~~202

(1913)

~~462~~414,~~925~~240

(6259,~~312~~577)

~~473~~488,~~051~~442

(6260,~~313~~490)

Mortgage Backed Securities - Commercial

~~5,963~~—

~~(138)~~—

510,~~246~~971

(~~175~~429)

1110,~~209~~971

(~~313~~429)

Collateralized mortgage obligations

—30,378

—(431)

~~144~~123,~~998~~671

(22,~~736~~707)

~~144~~154,~~998~~049

(2223,~~736~~138)

State and municipal obligations

36125,~~044~~649

(~~358~~1,680)

~~225~~163,~~304~~503

(2827,~~853~~577)

~~261~~289,~~348~~152

(29,~~211~~257)

Municipal taxable

—891

—(4)

3213,~~079~~756

(32,~~710~~010)

3214,~~079~~647

(32,~~710~~014)

Total temporarily impaired securities

55252,~~103~~146

(~~518~~3,178)

~~940~~781,~~601~~909

(~~126~~119,~~237~~988)

~~995~~1,~~704~~034,055

(~~126~~123,~~755~~166)

December 31, ~~2024~~2025

Less Than 12 Months

More Than 12 Months

Total

Unrealized

(Dollar amounts in thousands)

Fair Value

Losses

Fair Value

Losses

Fair Value

Losses

U.S. Government agencies

37,~~696~~137

(~~107~~31)

7459,~~636~~562

(117,~~563~~718)

7866,~~332~~699

(117,~~670~~749)

Mortgage Backed Securities - Residential

5111,~~996~~961

(~~1,113~~29)

~~481~~427,~~270~~877

(8858,~~138~~427)

~~533~~439,~~266~~838

(8958,~~251~~456)

Mortgage Backed Securities - Commercial

~~6,937~~—

~~(161)~~—

511,~~388~~114

(~~362~~328)

1211,~~325~~114

(~~523~~328)

Collateralized mortgage obligations

854,381

—(43)

~~158~~135,~~244~~393

(2721,~~555~~579)

~~158~~139,~~329~~774

(2721,~~555~~622)

State and municipal obligations

8923,~~321~~889

(~~953~~86)

~~232~~204,~~247~~976

(3323,~~586~~370)

~~321~~228,~~568~~865

(3423,~~539~~456)

Municipal taxable

~~1,587~~—

~~(20)~~—

3113,~~918~~876

(51,~~376~~893)

3313,~~505~~876

(51,~~396~~893)

Total temporarily impaired securities

~~153~~47,~~622~~368

(~~2,354~~189)

~~983~~852,~~703~~798

(~~166~~113,~~580~~315)

1900,~~137,325~~166

(~~168~~113,~~934~~504)

Management evaluates securities for impairment related to credit losses at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for impairment related to credit losses by segregating the portfolio into two general segments.

In evaluating for impairment, management considers the reason for the decline, the extent of the decline, the duration of the decline and whether the Corporation intends to sell a security or is more likely than not to be required to sell a security before recovery of its amortized cost. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the security’s amortized cost is written down to fair value through income. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes.

Gross unrealized losses on investment securities were $~~126~~123.7617 million as of ~~September~~March 3031, ~~2025~~2026 and $~~168~~113.9350 million as of December 31, ~~2024~~2025. Management believes these losses represent negative adjustments to market value relative to the interest rate environment reflecting the increase in market rates and not losses related to the creditworthiness of the issuer. The portfolio contains primarily government agency, agency backed mortgage backed securities (“MBS”), and collateralized mortgage obligations (“CMO”), which are issued by government sponsored enterprises and are backed by the full faith and credit of the United States government. Secondarily, the Corporation invests in municipal securities issued by state and local governments. Of these, almost half are either insured or contain state enhancements. On the remaining, credit is monitored by the investment committee. Based upon our review of the issuers, we do not believe these investments to be other than temporarily impaired. Management does not intend to sell these securities and it is not more likely than not that we will be required to sell them before their anticipated recovery.

2120

Table of Contents

The table below presents a rollforward of the credit losses recognized in earnings for the three ~~and nine~~ month period ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025:


	Three Months Ended ~~September~~March 3031,				~~Nine Months Ended September 30,~~
(Dollar amounts in thousands)	~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~
Beginning balance	$	2,974	$	2,974	$	~~2,974~~	$	~~2,974~~
Reductions for securities called during the period		—		—		—		—
Recoveries of amounts previously written off		(299)		—
Ending balance	$	2,~~974~~675	$	2,974	$	~~2,974~~	$	~~2,974~~

5. Qualified Affordable Housing Project Investments

The Corporation invests in qualified affordable housing projects. The balance of investment for qualified housing projects was $3937.21 million at ~~September~~March 3031, ~~2025~~2026 and $2737.29 million at December 31, ~~2024~~2025. These balances are reflected in the other assets line on the consolidated balance sheets. Total unfunded commitments related to the investments in qualified affordable housing projects totaled $2217.24 million at ~~September~~March 3031, ~~2025~~2026 and $1719.79 million at December 31, ~~2024~~2025. These balances are reflected in the other liabilities line on the consolidated balance sheets.The Corporation expects to fulfill these commitments by the end of December 31, 2037.

The Corporation recognized amortization expense of $4715 thousand during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, and $~~232~~16 thousand during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, which was included within other noninterest expense on the consolidated statements of income. The Corporation recognized amortization expense of $~~2.2~~773 ~~million~~thousand during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, and $~~1.7~~720 ~~million~~thousand during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, which was included within income tax expense on the consolidated statements of income. Additionally, the Corporation recognized tax credits and other benefits from its investment in affordable housing tax credits of $21.81 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, and $~~2.4~~914 ~~million~~thousand during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025.

2221

Table of Contents

6. Fair Value

FASB ASC No. 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) of identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level I prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The fair value of most securities available for sale is determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

For those securities that cannot be priced using quoted market prices or observable inputs a Level 3 valuation is determined. These securities are primarily trust preferred securities and investments in state and municipal securities. The fair value of state and municipal obligations are derived by comparing the securities to current market rates plus an appropriate credit spread to determine an estimated value. Illiquidity spreads are then considered. Credit reviews are performed on each of the issuers. The significant unobservable inputs used in the fair value measurement of the Corporation’s state and municipal obligations are credit spreads related to specific issuers. Significantly higher credit spread assumptions would result in significantly lower fair value measurement. Conversely, significantly lower credit spreads would result in a significantly higher fair value measurements.

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

2322

Table of Contents

~~September~~March 3031, ~~2025~~2026

Fair Value Measurements Using

Significant Unobservable Inputs (Level 3)

(Dollar amounts in thousands)

Level 1

Level 2

Level 3

Total

U.S. Government agencies

—

7989,~~182~~790

—

7989,~~182~~790

Mortgage Backed Securities-residential

—

~~535~~520,~~502~~937

—

~~535~~520,~~502~~937

Mortgage Backed Securities-commercial

—

12,~~510~~240

—

12,~~510~~240

Collateralized mortgage obligations

—

~~153~~157,~~861~~493

—

~~153~~157,~~861~~493

State and municipal

—

~~365~~368,~~636~~819

—

~~365~~368,~~636~~819

Municipal taxable

—

3618,~~573~~599

—

3618,~~573~~599

Collateralized debt obligations

—

—248

2,~~843~~642

2,~~843~~890

TOTAL

—

1,~~183~~168,~~264~~126

2,~~843~~642

1,~~186~~170,~~107~~768

Derivative Assets

2,~~866~~489

Derivative Liabilities

(2,~~866~~489)

December 31, ~~2024~~2025

Fair Value Measurements Using

Significant Unobservable Inputs (Level 3)

(Dollar amounts in thousands)

Level 1

Level 2

Level 3

Total

U.S. Government agencies

—

7884,~~982~~310

—

7884,~~982~~310

Mortgage Backed Securities-residential

—

~~541~~515,~~320~~419

—

~~541~~515,~~320~~419

Mortgage Backed Securities-commercial

—

1312,~~661~~386

—

1312,~~661~~386

Collateralized mortgage obligations

—

~~163~~158,~~026~~098

—

~~163~~158,~~026~~098

State and municipal

—

~~359~~357,~~523~~718

~~805~~—

~~360~~357,~~328~~718

Municipal taxable

—

3518,~~777~~745

—

3518,~~777~~745

Collateralized debt obligations

—

2,~~896~~850

TOTAL

—

1,~~192~~146,~~289~~676

32,~~701~~850

1,~~195~~149,~~990~~526

Derivative Assets

32,~~060~~709

Derivative Liabilities

(32,~~060~~709)

There were no transfers between Level 1 and Level 2 during ~~2025~~2026 and ~~2024~~2025.

The tables below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2025 and the year ended December 31, 2024.23


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Three Months Ended
	September 30, 2025
	State and
	municipal		Collateralized
(Dollar amounts in thousands)	obligations		debt obligations		Total
Beginning balance, July 1	$	—	$	2,909	$	2,909
Total realized/unrealized gains or losses
Included in earnings		—		—		—
Included in other comprehensive income		—		(66)		(66)
Transfers		—		—		—
Settlements		—		—		—
Ending balance, September 30	$	—	$	2,843	$	2,843

Table of Contents

The tables below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2026 and the year ended December 31, 2025.


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	~~Nine~~Three Months Ended
	~~September~~March 3031, ~~2025~~2026
	State and
	municipal		Collateralized
(Dollar amounts in thousands)	obligations		debt obligations		Total
Beginning balance, January 1	$	~~805~~—	$	2,~~896~~850	$	32,~~701~~850
Total realized/unrealized gains or losses
Included in earnings		—		—		—
Included in other comprehensive income		—		(53208)		(53208)
Transfers		—		—		—
Settlements		~~(805)~~—		—		~~(805)~~—
Ending balance, September 30	$	—	$	2,843	$	2,843
Ending balance, March 31	$	—	$	2,642	$	2,642


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Year Ended
	December 31, ~~2024~~2025
	State and
	municipal		Collateralized
(Dollar amounts in thousands)	obligations		debt obligations		Total
Beginning balance, January 1	$	~~1,180~~805	$	32,~~002~~896	$	43,~~182~~701
Total realized/unrealized gains or losses
Included in earnings		—		—		—
Included in other comprehensive income		—		(~~106~~46)		(~~106~~46)
Purchases		—		—		—
Settlements		(~~375~~805)		—		(~~375~~805)
Ending balance, December 31	$	~~805~~—	$	2,~~896~~850	$	32,~~701~~850

Other real estate owned is valued at Level 3. Other real estate owned at ~~September~~March 3031, ~~2025~~2026 with a value of $~~138~~184 thousand was reduced by $20 thousand for fair value adjustment. At ~~September~~March 3031, ~~2025~~2026 other real estate owned was comprised of $~~138~~184 thousand from residential loans. Other real estate owned at December 31, ~~2024~~2025 with a value of $~~523~~94 thousand was reduced by ~~zero~~$9 thousand for fair value adjustment. At December 31, ~~2024~~2025 other real estate owned was comprised of $~~433~~94 thousand from ~~commercial loans and $90 thousand from~~ residential loans.

Fair value is measured based on the value of the collateral securing those loans, and is determined using several methods. Generally the fair value of real estate is determined based on appraisals by qualified licensed appraisers. Appraisals for real estate generally use three methods to derive value: cost, sales or market comparison and income approach. The cost method bases value on the cost to replace current property. The market comparison evaluates the sales price of similar properties in the same market area. The income approach considers net operating income generated by the property and the investor’s required return. The final fair value is based on a reconciliation of these three approaches. If an appraisal is not available, the fair value may be determined by using a cash flow analysis, a broker’s opinion of value, the net present value of future cash flows, or an observable market price from an active market. Fair value of other real estate is based upon the current appraised values of the properties as determined by qualified licensed appraisers and the Company’s judgment of other relevant market conditions. Appraisals are obtained annually and reductions in value are recorded as a valuation through a charge to expense. The primary unobservable input used by management in estimating fair value are additional discounts to the appraised value to consider market conditions and the age of the appraisal, which are based on management’s past experience in resolving these types of properties. These discounts range from 200% to 100% with an average discount of 6247%. Values for non-real estate collateral, such as business equipment, are based on appraisals performed by qualified licensed appraisers or the customers financial statements. Values for non real estate collateral use much higher discounts than real estate collateral. Other real estate and individually evaluated loans carried at fair value are primarily comprised of smaller balance properties.

2524

Table of Contents

The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at ~~September~~March 3031, ~~2025~~2026.


(Dollar amounts in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range
Collateralized debt obligations	$	2,~~843~~642	Discounted cash flow	Discount rate	65.2665	%
Collateral dependent loans	$	1211,~~092~~033	Discounted cash flow	Discount rate for age of appraisal and market conditions	200.00%-100.00	%

The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at December 31, ~~2024~~2025.


(Dollar amounts in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range
State and municipal obligations	$	805	Discounted cash flow	Discount rate	4.24%-4.44	%
Collateralized debt obligations	$	2,850	Discounted cash flow	Discount rate	5.96	%
Collateralized debt obligations	$	2,896	Discounted cash flow	Discount rate	6.62	%
Collateral dependent loans		7,328	Discounted cash flow	Discount rate for age of appraisal and market conditions	10.00%-100.00	%
Collateral dependent loans		3,099	Discounted cash flow	Discount rate for age of appraisal and market conditions	20.00%-100.00	%

The carrying amounts and estimated fair value of financial instruments at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, are shown below. Carrying amount is the estimated fair value for cash and due from banks, federal funds sold, short-term borrowings, accrued interest receivable and payable, demand deposits, short-term debt and variable-rate loans or deposits that reprice frequently and fully. Security fair values were described previously. For fixed-rate, collectively evaluated loans or deposits, variable rate loans or deposits with infrequent repricing or repricing limits, and for longer-term borrowings, fair value is based on discounted cash flows using current market rates applied to the estimated life and considering credit risk. The valuation of individually evaluated loans was described previously. Loan fair value estimates represent an exit price. Fair values of loans held for sale are based on market bids on the loans or similar loans. It was not practicable to determine the fair value of Federal Home Loan Bank stock due to restrictions placed on its transferability. Fair value of debt is based on current rates for similar financing. The fair value of off-balance sheet items is not considered material.

~~September~~March 3031, ~~2025~~2026

Carrying

Fair Value

(Dollar amounts in thousands)

Value

Level 1

Level 2

Level 3

Total

Cash and due from banks

8796,~~438~~887

3632,~~798~~253

5064,~~640~~634

—

8796,~~438~~887

Federal funds sold

~~157~~—

—

~~157~~—

—

~~157~~—

Securities available-for-sale

1,~~186~~170,~~107~~768

—

1,~~183~~168,~~264~~126

2,~~843~~642

1,~~186~~170,~~107~~768

Restricted stock

18,~~761~~553

n/a

Loans, net

34,~~919~~371,~~990~~583

—

34,~~858~~327,~~240~~017

Accrued interest receivable

2627,~~526~~881

—

6,~~577~~926

1920,~~949~~955

2627,~~526~~881

Deposits

(4,~~615~~842,~~305~~386)

—

(4,~~610~~838,~~086~~894)

—

(4,~~610~~838,~~086~~894)

Short-term borrowings

(~~182~~349,~~522~~781)

—

(~~182~~349,~~522~~781)

—

(~~182~~349,~~522~~781)

Other borrowings

(~~170~~208,~~453~~756)

—

(~~170~~208,~~453~~756)

—

(~~170~~208,~~453~~756)

Accrued interest payable

(23,~~965~~534)

—

(23,~~965~~534)

—

(23,~~965~~534)

December 31, ~~2024~~2025

Carrying

Fair Value

(Dollar amounts in thousands)

Value

Level 1

Level 2

Level 3

Total

Cash and due from banks

93130,~~526~~369

3538,~~889~~587

5791,~~637~~782

—

93130,~~526~~369

Federal funds sold

~~820~~475

—

~~820~~475

—

~~820~~475

Securities available-for-sale

1,~~195~~149,~~990~~526

—

1,~~192~~146,~~289~~676

32,~~701~~850

1,~~195~~149,~~990~~526

Restricted stock

1718,~~555~~536

n/a

Loans, net

34,~~790~~007,~~409~~308

—

3,~~717~~949,~~843~~043

Accrued interest receivable

2627,~~934~~762

—

6,~~543~~482

2021,~~391~~280

2627,~~934~~762

Deposits

(4,~~718~~551,~~914~~111)

—

(4,~~723~~554,~~356~~207)

—

(4,~~723~~554,~~356~~207)

Short-term borrowings

(~~187~~292,~~057~~468)

—

(~~187~~292,~~057~~468)

—

(~~187~~292,~~057~~468)

Other borrowings

(28188,~~120~~208)

—

(29188,~~693~~208)

—

(29188,~~693~~208)

Accrued interest payable

(3,~~799~~084)

—

(3,~~799~~084)

—

(3,~~799~~084)

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7. Borrowings

Short-term borrowings:

Period–end short-term borrowings were comprised of the following:


(Dollar amounts in thousands)	~~September 30, 2025~~2026		~~December 31, 2024~~2025
Federal Funds Purchased	$	~~151~~306,~~100~~175	$	~~154~~257,~~250~~825
Repurchase Agreements		3143,~~422~~606		3234,~~807~~643
	$	~~182~~349,~~522~~781	$	~~187~~292,~~057~~468

The Corporation enters into sales of securities under agreements to repurchase. The amounts received under these agreements represent short-term borrowings and are reflected as a liability in the consolidated balance sheets. The securities underlying these agreements are included in investment securities in the consolidated balance sheets. The Corporation has no control over the market value of the securities, which fluctuates due to market conditions. However, the Corporation is obligated to promptly transfer additional securities if the market value of the securities falls below the repurchase agreement price. The Corporation manages this risk by maintaining an unpledged securities portfolio that it believes is sufficient to cover a decline in the market value of the securities sold under agreements to repurchase.

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

~~September~~March 3031, ~~2025~~2026

Repurchase Agreements

Remaining Contractual Maturity of the Agreements

Overnight

Greater

and

Up to 30

30 - 90

than 90

(Dollar amounts in thousands)

continuous

days

Total

Mortgage Backed Securities - Residential and CollateralizedMortgage Obligations

2539,~~964~~001

585

21,~~379~~990

2,~~494~~030

3143,~~422~~606

December 31, ~~2024~~2025

Repurchase Agreements

Remaining Contractual Maturity of the Agreements

Overnight

Greater

and

Up to 30

30 - 90

than 90

(Dollar amounts in thousands)

continuous

days

Total

Mortgage Backed Securities - Residential and CollateralizedMortgage Obligations

2427,~~380~~514

~~552~~351

53,~~150~~978

2,~~725~~800

3234,~~807~~643

Other borrowings:

Other borrowings at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 are summarized as follows:


(Dollar amounts in thousands)	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
FHLB advances	$	~~155~~200,~~870~~614	$	7175,~~287~~708
Notes payable		148,~~583~~142		2012,~~833~~500
TOTAL	$	~~170~~208,~~453~~756	$	28188,~~120~~208

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

Twelve Months Ended ~~September~~March 3031,


2026	$	155,013
2027	$	204,018
2027		14,583
2028		1,738
2028		857
2029		3,000
2029		—
2030		—
2031		—
Thereafter		—
	$	~~170~~208,~~453~~756

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At ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, other borrowings are summarized as follows: The Corporation’s subsidiary bank is a member of the Federal Home Loan Bank (FHLB) and accordingly are permitted to obtain advances. There are $~~155~~200.96 million of advances from the FHLB at ~~September~~March 3031, ~~2025~~2026, and $7175.37 million of advances at December 31, ~~2024~~2025. FHLB advances are, generally due in full at maturity. They are secured by eligible securities and a blanket pledge on real estate loan collateral. In addition the Corporation ~~secured~~acquired a note payable to a commercial bank inand debentures with the ~~second~~acquisition ~~quarter~~of ~~2024~~CedarStone. The balance at ~~September~~March 3031, ~~2025~~2026 is $148.61 million.

8. Components of Net Periodic Benefit Cost


	Three Months Ended ~~September~~March 3031,								~~Nine Months Ended September 30,~~
					Post-Retirement								~~Post-Retirement~~
	Pension Benefits				Health Benefits				~~Pension Benefits~~				~~Health Benefits~~
(Dollar amounts in thousands)	~~2025~~2026		~~2024~~2025		~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~		~~2025~~		~~2024~~
Service cost	$	~~108~~104	$	~~142~~108	$	35	$	43	$	~~323~~	$	~~424~~	$	9	$	12
Interest cost		~~1,016~~990		~~947~~1,016		3237		3432		~~3,049~~		~~2,841~~		96		~~103~~
Expected return on plan assets		(1,~~094~~216)		(1,~~051~~094)		—		—		~~(3,281)~~		~~(3,154)~~		—		—
Net amortization of prior service cost		—		—		—		—		—		—		—		—
Net amortization of net (gain) loss		—		~~109~~—		(3930)		(2039)		—		~~326~~		~~(117)~~		~~(60)~~
Net Periodic Benefit Cost	$	30(122)	$	~~147~~30	$	~~(4)~~12	$	18(4)	$	91	$	~~437~~	$	~~(12)~~	$	55

Employer Contributions

First Financial Corporation previously disclosed in its financial statements for the year ended December 31, ~~2024~~2025 that it expected to contribute $~~570~~1.6 ~~thousand~~million and $~~563~~556 thousand respectively to its Pension Plan and ESOP and $~~243~~244 thousand to the Post Retirement Health Benefits Plan in ~~2025~~2026. Contributions of $~~905~~327 thousand have been made to the Pension Plan thus far in ~~2025~~2026. Contributions of $~~188~~82 thousand have been made through the first ~~nine~~three months of ~~2025~~2026 for the Post Retirement Health Benefits plan. No contributions have been made in ~~2025~~2026 for the ESOP. The Pension plan was frozen for most employees at the end of 2012 and for those employees there will be discretionary contributions to the ESOP plan and a 401K plan in place of the former Pension benefit. In the first ~~nine~~three months of ~~2025~~2026 and ~~2024~~2025 there has been $21.41 million and $~~2.4~~847 ~~million~~thousand of expense ~~accrued~~recorded for potential contributions to these alternative retirement benefit options.

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9. Revenue from Contracts with Customers

All of the Corporation’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporation’s sources of Non-Interest Income for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025. Items outside the scope of ASC 606 are noted as such.


	Three Months Ended ~~September~~March 3031,				~~Nine Months Ended September 30,~~
(Dollar amounts in thousands)	~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~
Non-interest income
Service charges on deposits and debit card fee income	$	87,~~104~~382	$	87,~~139~~585	$	~~23,243~~	$	~~21,576~~
Trust and financial services		1,~~278~~491		1,~~251~~393		~~4,161~~		~~3,903~~
Interchange income		~~176~~186		~~177~~214		~~570~~		~~490~~
Net gains on sales of loans (a)		~~494~~294		~~411~~225		~~1,149~~		~~886~~
Loan servicing fees (a)		~~338~~326		~~274~~165		~~830~~		~~957~~
Net gains/(losses) on sales of securities (a)		24		103		21		104
Other service charges and fees (a)		374		316
Other service charges and fees (a)		251		191		823		700
Other (b)		1,164		613
Other (b)		484		677		1,244		1,943
Total non-interest income	$	11,217	$	10,511
Total non-interest income	$	11,149	$	11,223	$	32,041	$	30,559

(a)Not within the scope of ASC 606.

(b)The Other category includes gains/(losses) on the sale of OREO for the three months ended ~~September~~March 3031, ~~2025~~2026 and ~~September~~March 3031, ~~2024~~2025, totaling $~~57 thousand and $~~(2511) thousand, ~~respectively,~~ and ~~for the nine months ended for the same periods~~zero, ~~totaling $(123) thousand and $61 thousand~~respectively, which is within the scope of ASC 606; the remaining balance is outside the scope of ASC 606.

(c)

Service charges on deposits: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.

Trust and financial services: The Corporation earns asset management fees from its contracts with trust customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management at month-end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed, i.e. the trade date. Other related services provided and the fees the Corporation earns, which are based on a fixed fee schedule, are recognized when the services are rendered.

Interchange income: The Corporation earns interchange fees from debit and credit cardholder transactions conducted through the payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.

Gains/Losses on sales of OREO: The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

2928

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10. Accumulated Other Comprehensive ~~Income~~ (Loss)

The following tables summarize the changes, net of tax, within each classification of accumulated other comprehensive ~~income/~~(loss) for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025.


	Unrealized
	gains and
	(Losses) on available-		~~2025~~2026
	for-sale		Retirement
(Dollar amounts in thousands)	Securities		plans		Total
Beginning balance, July 1,	$	(113,761)	$	(4,473)	$	(118,234)
Beginning balance, January 1,	$	(83,358)	$	(3,323)	$	(86,681)
Change in other comprehensive income (loss) before reclassification		19(8,~~614~~674)		—		19(8,~~614~~674)
Amounts reclassified from accumulated other comprehensive income		~~(18)~~—		379		~~(15)~~79
Net current period other comprehensive income (loss)		19(8,~~596~~674)		379		19(8,~~599~~595)
Ending balance, September 30,	$	(94,165)	$	(4,470)	$	(98,635)
Ending balance, March 31,	$	(92,032)	$	(3,244)	$	(95,276)


	Unrealized
	gains and
	(Losses) on available-		2025
	for-sale		Retirement
(Dollar amounts in thousands)	Securities		plans		Total
Beginning balance, January 1,	$	(127,807)	$	(4,478)	$	(132,285)
Change in other comprehensive income (loss) before reclassification		3311,~~658~~100		—		3311,~~658~~100
Amounts reclassified from accumulated other comprehensive income		~~(16)~~—		83		~~(8)~~3
Net current period other comprehensive income (loss)		3311,~~642~~100		83		3311,~~650~~103
Ending balance, September 30,	$	(94,165)	$	(4,470)	$	(98,635)
Ending balance, March 31,	$	(116,707)	$	(4,475)	$	(121,182)


	Unrealized
	gains and
	(Losses) on available-		2024
	for-sale		Retirement
(Dollar amounts in thousands)	Securities		plans		Total
Beginning balance, July 1,	$	(125,561)	$	(8,940)	$	(134,501)
Change in other comprehensive income (loss) before reclassification		31,705		—		31,705
Amounts reclassified from accumulated other comprehensive income		(77)		73		(4)
Net current period other comprehensive income (loss)		31,628		73		31,701
Ending balance, September 30,	$	(93,933)	$	(8,867)	$	(102,800)


	~~Unrealized~~Balance at		Current Period		Balance at
	gains and
(Dollar amounts in thousands)	1/1/2026		Change		3/31/2026
	(Losses) on available-		2024
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment	$	(85,496)	$	(8,518)	$	(94,014)
	for-sale		Retirement
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment		2,138		(156)		1,982
(Dollar amounts in thousands)	Securities		plans		Total
Total unrealized gain (loss) on securities available-for-sale	$	(83,358)	$	(8,674)	$	(92,032)
Beginning balance, January 1,	$	(118,000)	$	(9,087)	$	(127,087)
Unrealized gain (loss) on retirement plans		(3,323)		79		(3,244)
Change in other comprehensive income (loss) before reclassification		24,145		—		24,145
TOTAL	$	(86,681)	$	(8,595)	$	(95,276)
Amounts reclassified from accumulated other comprehensive income		(78)		220		142
Net current period other comprehensive income (loss)		24,067		220		24,287
Ending balance, September 30,	$	(93,933)	$	(8,867)	$	(102,800)


	Balance at		Current Period		Balance at
(Dollar amounts in thousands)	7/1/2025		Change		9/30/2025
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment	$	(115,942)	$	19,645	$	(96,297)
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment		2,181		(49)		2,132
Total unrealized loss on securities available-for-sale	$	(113,761)	$	19,596	$	(94,165)
Unrealized gain (loss) on retirement plans		(4,473)		3		(4,470)
TOTAL	$	(118,234)	$	19,599	$	(98,635)

Table of Contents


	Balance at		Current Period		Balance at
(Dollar amounts in thousands)	1/1/2025		Change		93/3031/2025
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment	$	(129,979)	$	3311,~~682~~096	$	(96118,~~297~~883)
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment		2,172		~~(40)~~4		2,~~132~~176
Total unrealized gain (loss) on securities available-for-sale	$	(127,807)	$	33,642	$	(94,165)
Total unrealized income (loss) on securities available-for-sale	$	(127,807)	$	11,100	$	(116,707)
Unrealized gain (loss) on retirement plans		(4,478)		83		(4,~~470~~475)
TOTAL	$	(132,285)	$	3311,~~650~~103	$	(98121,~~635~~182)


	Balance at		Current Period		Balance at
(Dollar amounts in thousands)	7/1/2024		Change		9/30/2024
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment	$	(127,730)	$	31,640	$	(96,090)
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment		2,169		(12)		2,157
Total unrealized gain (loss) on securities available-for-sale	$	(125,561)	$	31,628	$	(93,933)
Unrealized loss on retirement plans		(8,940)		73		(8,867)
TOTAL	$	(134,501)	$	31,701	$	(102,800)


	Balance at		Current Period		Balance at
(Dollar amounts in thousands)	1/1/2024		Change		9/30/2024
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment	$	(120,252)	$	24,162	$	(96,090)
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment		2,252		(95)		2,157
Total unrealized income (loss) on securities available-for-sale	$	(118,000)	$	24,067	$	(93,933)
Unrealized gain (loss) on retirement plans		(9,087)		220		(8,867)
TOTAL	$	(127,087)	$	24,287	$	(102,800)


	Three Months Ended September 30, 2025
Details about accumulated	Amount reclassified from			Affected line item in
other comprehensive	accumulated other			the statement where
income components	comprehensive income			net income is presented
	(in thousands)
Unrealized gains and losses	$	24		Net securities gains (losses)
on available-for-sale		(6)		Income tax expense
securities	$	18		Net of tax

Amortization of	$	(4)	(a)	Salary and benefits
retirement plan items		1		Income tax expense
	$	(3)		Net of tax
Total reclassifications for the period	$	15		Net of tax

(a) Included in the computation of net periodic benefit cost. (see Footnote 8 for additional details).

Table of Contents


	Nine Months Ended September 30, 2025
Details about accumulated	Amount reclassified from			Affected line item in
other comprehensive	accumulated other			the statement where
income components	comprehensive income			net income is presented
	(in thousands)
Unrealized gains and losses	$	21		Net securities gains (losses)
on available-for-sale		(5)		Income tax expense
securities	$	16		Net of tax

Amortization of	$	(11)	(a)	Salary and benefits
retirement plan items		3		Income tax expense
	$	(8)		Net of tax
Total reclassifications for the period	$	8		Net of tax

(a) Included in the computation of net periodic benefit cost. (see Footnote 8 for additional details).


	Three Months Ended September 30, 2024
Details about accumulated	Amount reclassified from			Affected line item in
other comprehensive	accumulated other			the statement where
income components	comprehensive income			net income is presented
	(in thousands)
Unrealized gains and losses	$	103		Net securities gains (losses)
on available-for-sale		(26)		Income tax expense
securities	$	77		Net of tax

Amortization of	$	(97)	(a)	Salary and benefits
retirement plan items		24		Income tax expense
	$	(73)		Net of tax
Total reclassifications for the period	$	4		Net of tax

Table of Contents


		Three Months Ended March 31, 2026
Details about accumulated		Amount reclassified from			Affected line item in
other comprehensive		accumulated other			the statement where
income components		comprehensive income			net income is presented
		(in thousands)
Unrealized gains and losses		$	—		Net securities gains (losses)
on available-for-sale			—		Income tax expense
securities		$	—		Net of tax

Amortization of		$	(105)	(a)	Salary and benefits
retirement plan items			26		Income tax expense
		$	(79)		Net of tax
Total reclassifications for the period		$	(79)		Net of tax

(a)

Included in the computation of net periodic benefit cost. (see Footnote 8 for additional details).


	~~Nine~~Three Months Ended ~~September~~March 3031, ~~2024~~2025
Details about accumulated	Amount reclassified from			Affected line item in
other comprehensive	accumulated other			the statement where
income components	comprehensive income			net income is presented
	(in thousands)
Unrealized gains and losses	$	~~104~~—		Net securities gains (losses)
on available-for-sale		~~(26)~~—		Income tax expense
securities	$	78—		Net of tax

Amortization of	$	(~~293~~4)	(a)	Salary and benefits
retirement plan items		731		Income tax expense
	$	(~~220~~3)		Net of tax
Total reclassifications for the period	$	(~~142~~3)		Net of tax

(a)

Included in the computation of net periodic benefit cost. (see Footnote 8 for additional details).

(a)

3230

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11. Leases

The Corporation leases certain branches under operating leases. At ~~September~~March 3031, ~~2025~~2026, the Corporation had lease liabilities totaling $7,~~807~~384,000 and right-of-use assets totaling $7,~~660~~225,000 related to these leases. At December 31, ~~2024~~2025, the Corporation had lease liabilities totaling $7,~~829~~547,000 and right-of-use assets totaling $7,~~725~~386,000 related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. At ~~September~~March 3031, ~~2025~~2026, the weighted average remaining lease term for operating leases was 10.2 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.3149%.

The calculated amount of the lease liabilities and right-of-use assets are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Corporation’s lease agreements often include one or more options to renew at the Corporation’s discretion. If at lease inception, the Corporation considers the exercising of a renewal option to be reasonably certain, the Corporation will include the extended term in the calculation of the lease liability and right-of-use asset. Regarding the discount rate, the new standard requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Corporation utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.

The following table represents lease costs and other lease information. As the Corporation elected, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities.

Lease costs were as follows:


	~~Nine~~Three Months Ended		Three Months Ended
(Dollar amounts in thousands)	~~September~~March 3031, ~~2025~~2026		March 31, 2025
Operating lease cost	$	~~1,058~~397	$	362
Short-term lease cost		415		32
Variable lease cost		421		1
Total lease cost	$	~~1,103~~423	$	395

Other information:
Cash paid for amounts included in the measurement of operating lease liabilities		~~936~~371		307
Right-of-use assets obtained in exchange for new operating lease liabilities		~~713~~468		—

Future minimum payments for operating leases with initial or remaining terms of one year or more as of ~~September~~March 3031, ~~2025~~2026 were as follows:


(Dollar amounts in thousands)	~~September~~March 3031, ~~2025~~2026
Twelve Months Ended September 30,
Twelve Months Ended March 31,
2026	$	1,304
2027	$	1,258
2027		1,273
2028		1,260
2028		1,220
2029		1,045
2029		903
2030		810
2030		782
2031		647
Thereafter		4,~~202~~196
Total Future Minimum Lease Payments		9,~~684~~216
Amounts Representing Interest		(1,~~877~~832)
Present Value of Net Future Minimum Lease Payments	$	7,~~807~~384

3331

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12. Acquisitions

On March 1, 2026, the Corporation completed its acquisition of CedarStone Financial, Inc. Therefore, the results of CedarStone have been included in the results of operations beginning on March 1, 2026. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Interim Merger (the “Effective Time”), First Financial paid $19.12 per share in cash for each share of CedarStone’s common stock outstanding. The aggregate value of the transaction was approximately $25.0 million. Acquisition-related costs of $1.5 million were included in the Corporation’s income statement for the year-to-date period ended December 31, 2025. Additionally, the Corporation included acquisition-related costs of $41 thousand in the Corporation’s income statement for the three months ending March 31, 2026.

The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, which resulted in a bargain purchase gain of $716 thousand. Changes to the acquisition-date fair values of the assets acquired, liabilities assumed, or consideration transferred during the measurement period may result in adjustments to the bargain purchase gain. The analysis of the review of accruals and the tax impact of the fair value adjustments is still in process.


				Measurement
		As Initially		Period
(Dollar amounts in thousands)		Reported		Adjustments		As Adjusted
Consideration
Cash consideration		$	25,003	$	—	$	25,003

Fair value of total consideration transferred		$	25,003	$	—	$	25,003

Assets acquired
Cash		$	13,224	$	—	$	13,224
Investment securities available-for-sale			53,509		—		53,509
Federal funds sold			—		—		—
Bank owned life insurance			4,481		—		4,481
Federal Home Loan Bank stock			1,215		—		1,215
Loans			286,102		—		286,102
Premises and equipment			11,106		—		11,106
Core deposit intangibles			5,317		—		5,317
Other assets			773		—		773
Total assets acquired			375,727		—		375,727

Liabilities assumed
Deposits			313,536		—		313,536
FHLB advances			28,942		—		28,942
Other borrowings			5,485		—		5,485
Other liabilities			2,045		—		2,045
Total liabilities assumed			350,008		—		350,008

Net identifiable assets			25,719		—		25,719
Bargain purchase gain		$	(716)	$	—	$	(716)

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Corporation believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to guidance relating to purchase credit deteriorated loans, which have shown evidence of credit deterioration since origination. Adjustments made above were within the allowable one year measurement period.

The fair value of purchased financial assets with credit deterioration was $3.0 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $3.7 million. The Corporation

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estimates, on the date of acquisition, that $695 thousand of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2025. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.


	Three Months Ended March 31,
(Dollar amounts in thousands, except per share data)	2026		2025
Net interest income	$	58,027	$	54,208
Net income	$	19,382	$	18,779
Basic and diluted earnings per share	$	1.63	$	1.59

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On July 1, 2024, the Corporation completed its acquisition of SimplyBank. Therefore, the results of SimplyBank have been included in the results of operations beginning on July 1, 2024. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Interim Merger (the “Effective Time”), other than dissenting shares, each share of SimplyBank Common Stock issued and outstanding immediately prior to the Effective Time, was converted into the right to receive $718.38 per share in cash. The aggregate value of the transaction was approximately $73.4 million. Acquisition-related costs of $1.7 million were included in the Corporation’s income statement for the year-to-date period ended December 31, 2024.

Goodwill of $11.2 million arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The goodwill value is subject to change pending receipt of the final valuation. The goodwill for SimplyBank is deductible for income tax purposes as the transaction was accounted for as a taxable acquisition. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.


			Measurement
	As Initially		Period
(Dollar amounts in thousands)	Reported		Adjustments		As Adjusted
Consideration
Cash consideration	$	73,400	$	—	$	73,400

Fair value of total consideration transferred	$	73,400	$	—	$	73,400

Assets acquired
Cash	$	101,553	$	—	$	101,553
Investment securities available-for-sale		77,350		—		77,350
Federal funds sold		—		—		—
Bank owned life insurance		12,816		—		12,816
Federal Home Loan Bank stock		726		—		726
Loans		467,997		(2,731)		465,266
Premises and equipment		14,231		—		14,231
Core deposit intangibles		19,788		—		19,788
Other assets		6,184		—		6,184
Total assets acquired		700,645		(2,731)		697,914

Liabilities assumed
Deposits		622,937		—		622,937
FHLB advances		1,719		—		1,719
Other liabilities		12,899		(1,797)		11,102
Total liabilities assumed		637,555		(1,797)		635,758

Net identifiable assets		63,090		(934)		62,156
Goodwill	$	10,310	$	934	$	11,244

The fair value of purchased financial assets with credit deterioration was $1.7 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $4.7 million. The Corporation estimates, on the date of acquisition, that $3.0 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

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The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2023. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.


	Year Ended December 31,
(Dollar amounts in thousands, except per share data)	2024		2023
Net interest income	$	188,441	$	196,646
Net income	$	36,425	$	70,586
Basic and diluted earnings per share	$	3.08	$	5.91

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ITEMS 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk

The purpose of this discussion is to point out key factors in the Corporation’s recent performance compared with earlier periods. The discussion should be read in conjunction with the financial statements beginning on page three of this report. All figures are for the consolidated entities. It is presumed the readers of these financial statements and of the following narrative have previously read the Corporation’s financial statements for ~~2024~~2025 in the 10-K filed for the fiscal year ended December 31, ~~2024~~2025.

This Quarterly Report on Form 10-Q contains forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Corporation’s ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Corporation’s business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements is available in the Corporation’s Form 10-K for the year ended December 31, ~~2024~~2025, and subsequent filings with the United States Securities and Exchange Commission (SEC). Copies of these filings are available at no cost on the SEC’s Web site at www.sec.gov or on the Corporation’s Web site at www.first-online.com. Management may elect to update forward-looking statements at some future point; however, it specifically disclaims any obligation to do so.

Critical Accounting Policies

Certain of the Corporation’s accounting policies are important to the portrayal of the Corporation’s financial condition and results of operations, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Facts and circumstances which could affect these judgments include, without limitation, changes in interest rates, in the performance of the economy or in the financial condition of borrowers. Management believes that its critical accounting policies include determining the allowance for credit losses and the valuation of goodwill and valuing investment securities. See further discussion of these critical accounting policies in the ~~2024~~2025 Form 10-K.

Allowance for credit losses. The allowance for credit losses (ACL) represents management’s estimate of expected losses inherent within the existing loan portfolio. The allowance for credit losses is increased by the provision for credit losses charged to expense and reduced by loans charged off, net of recoveries. The allowance for credit losses is determined based on management’s assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions, nonperforming loans, determination of acquired loans as purchase credit deteriorated, and reasonable and supportable forecasts. Loans are individually evaluated when they do not share risk characteristics with other loans in the respective pool. Loans evaluated individually are excluded from the collective evaluation. Management elected the collateral dependent practical expedient upon adoption of ASC 326. Expected credit losses on individually evaluated loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Management utilizes a cohort methodology to determine the allowance for credit losses. This method identifies and captures the balance of a pool of loans with similar risk characteristics, as of a particular point in time to form a cohort, then tracks the respective losses generated by that cohort of loans over their remaining life. The cohorts track loan balances and historical loss experience since 2008, and management extends the look back period each quarter to capture all available data points in the historical loss rate calculation. The quantitative component of the ACL involves assumptions that require a significant level of estimation; these include historical losses as a predictor of future performance, appropriateness of selected delay periods, and the reasonableness of the portfolio segmentation.

A historical data set is expected to provide the best indication of future credit performance. Delay periods represent the amount of time it takes a cohort of loans to become seasoned, or incur sufficient attrition through pay downs, renewals, or charge-offs. Portfolio segmentation relates to the pooling of loans with similar risk characteristics, such as industry types, collateral, and consumer purpose.

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On an annual basis, in the first quarter, management performs a recalibration of the delay periods and portfolio segmentation to determine whether they are reasonable and appropriate based on the information available at that time.

Management considers qualitative adjustments to expected credit loss estimates for information not already captured in the loss estimation process. Where past performance may not be representative of future losses, loss rates are adjusted for qualitative and economic forecast factors. Management uses the peak three consecutive quarter net charge off rate to capture maximum potential volatility over the reasonable and supportable forecast period. Historical losses utilized in setting the qualitative factor ranges are anchored to 2008 and may be supplemented by peer information when needed. The qualitative factor ranges are recalibrated annually to capture recent behavior that is indicative of the credit profile of the current portfolio.

Qualitative factors include items, such as changes in lending policies or procedures, asset specific risks, and economic uncertainty in forward-looking forecasts. Economic indicators utilized in forecasting include unemployment rate, gross domestic product, housing starts, and interest rates. Management uses a two-year reasonable and supportable period across all loan segments to forecast economic conditions. Management believes the two-year time horizon aligns with available industry guidance and various forecasting sources. Economic forecast adjustments are overlaid onto historical loss rates. As such, reversion from forecast rates to historical loss rates is immediate.

The ACL and allowance for unfunded commitments were $4752.43 million and $2.29 million, respectively at ~~September~~March 3031, ~~2025~~2026, compared to $4648.70 million and $2.19 million, respectively at December 31, ~~2024~~2025. The qualitative amount of the reserve increased $~~1.1~~607 ~~million~~thousand to $1314.97 million. The quantitative amount is $3334.1 million at ~~September~~March 3031, ~~2025~~2026, compared to $33.6 million at December 31, ~~2024~~2025. There was anno ~~increase~~change in the allowance for unfunded commitments. As a result of ~~$100~~the ~~thousand~~acquisition inof CedarStone Financial, Inc., the Corporation recorded an additional allowance for ~~unfunded~~credit ~~commitments~~loss on loans of $3.3 million. See additional discussion of ACL in the Allowance for Credit Losses section below.

Based on management’s analysis of the current portfolio, management believes the allowance is adequate. Changes in the financial condition of individual borrowers, economic conditions, historical loss experience, or the condition of the various markets in which collateral may be sold may affect the required level of the allowance for credit losses and the associated provision for credit losses. As management monitors these changes, as well as those factors discussed above, adjustments may be recorded to the allowance for credit losses and the associated provision for credit losses in the future.

Summary of Operating Results

~~Net~~On ~~income~~March ~~for the three months ended September 30~~1, ~~2025 was $20.8 million~~2026, ~~compared~~First toFinancial ~~$8.7~~Corporation ~~million~~completed ~~for~~ the ~~same~~acquisition ~~period~~of inCedarStone ~~2024.~~Financial, ~~Basic earnings per share increased to $1~~Inc.75 ~~for~~As ~~the~~a ~~third~~result ~~quarter~~ of ~~2025 compared to $0.74 for~~ the ~~same~~acquisition, ~~period~~loans inacquired ~~2024.~~were ~~Return~~$292 onmillion, ~~average assets~~ and ~~return~~deposits onacquired ~~average equity~~ were ~~1.48%~~$313 ~~and 13~~million.~~82%~~ ~~respectively~~Additionally, ~~for~~we ~~the~~recorded ~~three months~~a ~~ended~~bargain ~~September 30,~~purchase ~~2025~~gain ~~compared~~of to$716 0thousand.~~64%~~ ~~and~~Net ~~6.39%~~income ~~for~~will ~~the~~reflect ~~three months~~one ~~ended~~month ~~September 30,~~of ~~2024.~~activity ~~Net~~in ~~income for~~ the ~~nine months~~first ~~ended~~quarter ~~September 30,~~for ~~2025~~activity ~~was~~from ~~$57~~CedarStone.8 ~~million,~~Included ~~compared~~in ~~to $31.0 million for~~ the ~~same~~variances ~~period~~ in ~~2024. Basic earnings per share increased to $4.87 for~~ the ~~nine~~following ~~months~~discussion ofare ~~2025 compared to $2.63 for~~ the ~~same~~values ~~period~~provided in ~~2024.~~this ~~Return on average assets and return on average equity were 1~~paragraph.~~39% and 13.23% respectively, for the nine months ended September 30, 2025 compared to 0.82% and 7.80% for the nine months ended September 30, 2024.~~

Net income for the three months ended March 31, 2026 was $19.8 million, compared to $18.4 million for the same period in 2025. Basic earnings per share increased to $1.67 for the first quarter of 2026 compared to $1.55 for the same period in 2025. Return on average assets and return on average equity were 1.35% and 11.93% respectively, for the three months ended March 31, 2026 compared to 1.34% and 13.04% for the three months ended March 31, 2025.

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

● Liquidity remains strong, with cash and available for sale securities representing approximately 2220.57% of assets at ~~September~~March 3031, ~~2025~~2026. The Corporation maintains the ability to access considerable sources of contingent liquidity at the Federal Home Loan Bank and several correspondent banks. Management considers the Corporation’s current liquidity position to be adequate to meet both short-term and long-term liquidity needs. Refer to the section Liquidity Risk for additional information.

●

Capital remains strong, with ratios of the Corporation, and its subsidiary bank, well above the standards to be considered well-capitalized under regulatory requirements. Refer to the section Capital Adequacy, included elsewhere in this report for additional details.

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● Asset quality remains solid, with a non-performing asset ratio of 0.3964% of total assets as of ~~September~~March 3031, ~~2025~~2026 and net charge-offs of 0.1715% to average loans and leases, reflecting the Company's disciplined underwriting and conservative lending philosophy which has supported the Corporation’s strong credit performance during prior financial crises. Refer to the section Non-Performing Loan for additional information.

The primary components of income and expense affecting net income are discussed in the following analysis.

Net Interest Income

The Corporation’s primary source of earnings is net interest income, which is the difference between the interest earned on loans and other investments and the interest paid for deposits and other sources of funds. Net interest income increased $7.4.9 million in the three months ended ~~September~~March 3031, ~~2025~~2026 to $5456.69 million from $4752.20 million in the same period in ~~2024~~2025. The net interest margin for the three months ended ~~September~~March 3031, ~~2025~~2026 is 4.2523% compared to 34.7811% for the same period in ~~2024~~2025, a ~~12.42% increase. Net interest income increased $33.9 million in the nine months ended September 30, 2025 to $159.~~2 ~~million from $125~~.~~4 million in the same period in 2024. The net interest margin for the nine months ended September 30, 2025 is 4.17~~90% ~~compared to 3.63% for the same period in 2024, a 14.98%~~ increase.

The increase in yields on ~~net~~investments ~~loans and leases~~ of 2431 basis points is the primary contributor to the improved yield on average earning assets for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025. Comparing the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 to the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, the effective rate paid on average interest-bearing deposits decreased 2311 basis points. For the same period discussed above, interest paid on other borrowings decreased 93117 basis points.

Non-Interest Income

Non-interest income for the three months ended ~~September~~March 3031, ~~2025~~2026 was $11.12 million compared to $1110.25 million for the same period in ~~2024. Non-interest income for the nine months ended September 30,~~ 2025 ~~was $32~~.~~0 million compared to $30.6 million for the same period in 2024.~~

Non-Interest Expenses

The Corporation’s non-interest expense for the quarter ended ~~September~~March 3031, ~~2025~~2026 was $3840.09 million compared to $3836.68 million for the same period in ~~2024. The Corporation’s non-interest expense for the nine months ended September 30,~~ 2025 ~~increased $8~~.4 ~~million to $113.1 million compared to the same period in 2024.~~ This includes an overall increase in operating expenses as a result of the acquisition.

Allowance for Credit Losses

The Corporation’s provision for credit losses for the three months ended ~~September~~March 3031, ~~2025~~2026, was $2.06 million, compared to provision of $92.40 million for the same period of ~~2024~~2025. Net charge-offs for the ~~third~~first quarter of ~~2025~~2026 were $1.65 million compared to net charge-offs of $41.~~6 million for the same period of 2024. The provision for credit losses decreased $~~8.3 million ~~to $5.9 million~~ for the ~~nine months ended September 30, 2025, compared to a provision of $14.2 million for the~~ same period ~~in 2024. Net charge-offs for the first nine months~~ of 2025 ~~decreased $5~~.6 million to $5.2 million compared to the same period of 2024. The Corporation recorded $5.5 million in provision on non-PCD loans acquired from SimplyBank subsequent to the acquisition in the third quarter 2024. Also in the third quarter 2024, additional provision as well as charge-offs were related to one previously identified credit, reflecting further deterioration in collateral values in the third quarter 2024. No further losses were recorded on this credit. Based on management’s analysis of the current portfolio, an evaluation that includes consideration of changes in CECL model assumptions of credit quality, economic conditions, and loan composition, management believes the allowance is adequate. In the first ~~nine~~three months of ~~2025~~2026, no significant changes were made.

Income Tax Expense

The Corporation’s effective income tax rate for the first ~~nine~~three months of ~~2025~~2026 was 2019.1889% compared to 1622.4459% for the same period in ~~2024. Pretax income for the first nine months in~~ 2025 ~~was significantly higher than pretax income for first nine months in 2024~~. ~~Since our permanent differences remained similar, income was the driving factor for the increase in effective tax rate.~~

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Non-performing Loans

Non-performing loans consist of (1) non-accrual loans on which the ultimate collectability of the full amount of interest is uncertain, and (2) loans past due ninety days or more as to principal or interest. Non-performing loans ~~increased~~decreased to $1928.35 million at ~~September~~March 3031, ~~2025~~2026 compared to $1328.36 million at December 31, ~~2024~~2025. Nonperforming loans increased 36179.39% compared to $1410.12 million as of ~~September~~March 3031, ~~2024~~2025.

A summary of non-performing loans at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 follows:


	(000's)
	~~September~~March 3031, ~~2025~~2026			December 31, ~~2024~~2025
Non-accrual loans	$	1727,~~470~~524		$	1127,~~479~~495
Accruing loans past due over 90 days		~~1,792~~938			1,~~821~~083
	$	19,262		$	13,300

Ratio of the allowance for credit losses as a percentage of non-performing loans		246.1	%		351.4	%

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	$	28,462		$	28,578

Ratio of the allowance for credit losses as a percentage of non-performing loans		183.9	%		167.9	%	%

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


	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
Non-accrual loans
Commercial loans	$	1022,~~138~~776	$	622,~~697~~836
Residential loans		42,~~567~~137		21,~~050~~997
Consumer loans		2,~~765~~611		2,~~732~~662
	$	1727,~~470~~524	$	1127,~~479~~495
Past due 90 days or more and still accruing
Commercial loans	$	~~201~~427	$	4250
Residential loans		~~1,591~~490		1,~~778~~032
Consumer loans		—21		1
	$	~~1,792~~938	$	1,~~821~~083

Interest Rate Sensitivity and Liquidity

First Financial Corporation has established risk measures, limits and policy guidelines for managing interest rate risk and liquidity. Responsibility for management of these functions resides with the Asset Liability Committee. The primary goal of the Asset Liability Committee is to maximize net interest income within the interest rate risk limits approved by the Board of Directors.

Interest Rate Risk

Management considers interest rate risk to be the Corporation’s most significant market risk. Interest rate risk is the exposure to changes in net interest income as a result of changes in interest rates. Consistency in the Corporation’s net interest income is largely dependent on the effective management of this risk.

The Asset Liability position is measured using sophisticated risk management tools, including earning simulation and market value of equity sensitivity analysis. These tools allow management to quantify and monitor both short-term and long-term exposure to interest rate risk. Simulation modeling measures the effects of changes in interest rates, changes in the shape of the yield curve and the effects of embedded options on net interest income. This measure projects earnings in the various environments over the next three years. It is important to note that measures of interest rate risk have limitations and are dependent on various assumptions. These assumptions are inherently uncertain and, as a result, the model cannot precisely predict the impact of interest rate fluctuations on net interest income. Actual results will differ from simulated results due to timing, frequency and amount of interest rate changes as well as overall market conditions. The Committee has performed a thorough analysis of these assumptions and believes them to be valid and theoretically sound. These assumptions are continuously monitored for behavioral changes.

The Corporation from time to time utilizes derivatives to manage interest rate risk. Management continuously evaluates the merits of such interest rate risk products but does not anticipate the use of such products to become a major part of the Corporation’s risk management strategy.

The table below shows the Corporation’s estimated sensitivity profile as of March 31, 2026. The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points. Given a 100 basis point increase in rates, net interest income would decrease 1.75% over the next 12 months and increase 1.29% over the following 12 months. Given a 100 basis point decrease in rates, net interest income would increase 3.79% over the next 12 months and increase 0.21% over the following 12 months. These estimates assume all rate changes occur overnight and management takes no action as a result of this change.


Basis Point		Percentage Change in Net Interest Income
Interest Rate Change		12 months		24 months		36 months
Down 300		5.69	%	(5.81)	%	(15.29)	%
Down 200		5.88		(1.60)		(8.02)

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Down 100	3.79	0.21	(2.95)
Up 100	(1.75)	1.29	4.27
Up 200	(6.06)	(0.07)	5.93
Up 300	(8.95)	(0.04)	9.01

The table below shows the Corporation’s estimated sensitivity profile as of September 30, 2025. The change in interest rates assumes a parallel shift in interest rates of 100, 200, and 300 basis points. Given a 100 basis point increase in rates, net interest income would decrease 1.80% over the next 12 months and increase 1.17% over the following 12 months. Given a 100 basis point decrease in rates, net interest income would increase 3.99% over the next 12 months and increase 0.57% over the following 12 months. These estimates assume all rate changes occur overnight and management takes no action as a result of this change.


Basis Point	Percentage Change in Net Interest Income
Interest Rate Change	12 months		24 months		36 months
Down 300	5.11	%	(6.79)	%	(16.76)	%
Down 200	5.84		(1.55)		(8.20)
Down 100	3.99		0.57		(2.74)
Up 100	(1.80)		1.17		4.41
Up 200	(6.42)		(0.49)		5.97
Up 300	(9.49)		(0.76)		8.93

Typical rate shock analysis does not reflect management’s ability to react and thereby reduce the effect of rate changes, and represents a worst-case scenario.

Liquidity Risk

Liquidity represents an institution’s ability to provide funds to satisfy demands from depositors, borrowers, and other creditors by either converting assets into cash or accessing new or existing sources of incremental funds. Generally the Corporation relies on deposits, loan repayments and repayments of investment securities as its primary sources of funds. The Corporation has $117.9 million of investments that mature throughout the next 12 months. The Corporation also anticipates $~~108~~119.70 million of principal payments from mortgage-backed and other securities. Given the current rate environment, the Corporation anticipates $2962.20 million in securities to be called within the next 12 months. The Corporation also has $~~203~~162.17 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, $~~898~~891 million available with the Federal Reserve Bank, and $90 million of available fed funds lines with correspondent banks. With these sources of funds, the Corporation currently anticipates adequate liquidity to meet the expected obligations of its customers.

Financial Condition

Comparing the first ~~nine~~three months of ~~2025~~2026 to year-ended December 31, ~~2024~~2025, loans net of deferred loan costs, have increased $~~130~~369 million to $4.04 billion. Deposits ~~decreased~~increased 26.24% to $4.68 billion at ~~September~~March 3031, ~~2025~~2026 compared to December 31, ~~2024~~2025. Other borrowings increased $~~142~~20.35 million to $~~170~~208.58 million at ~~September~~March 3031, ~~2025~~2026 compared to December 31, ~~2024~~2025. Shareholders’ equity increased 130.3368% or $734.24 million. This financial performance increased book value per share 130.2458% to $5255.5010 at ~~September~~March 3031, ~~2025~~2026 from $4654.3678 at December 31, ~~2024~~2025. Book value per share is calculated by dividing the total shareholders’ equity by the number of shares outstanding. Accumulated other comprehensive loss ~~increased~~decreased $338.76 million primarily due to the market value of the securities portfolio, which reflected the ~~increase~~decrease in securities pricing.

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Capital Adequacy

The Federal Reserve, OCC and Federal Deposit Insurance Corporation (collectively, joint agencies) establish regulatory capital guidelines for U.S. banking organizations. Regulatory capital guidelines require that capital be measured in relation to the credit and market risks of both on- and off-balance sheet items using various risk weights. On January 1, 2015, the Basel 3 rules became effective and include transition provisions through January 1, 2019. Under Basel 3, Total capital consists of two tiers of capital, Tier 1 and Tier 2. Tier 1 capital is further composed of Common equity tier 1 capital and additional tier 1 capital.

Common equity tier 1 capital primarily includes qualifying common shareholders’ equity, retained earnings and certain minority interests. Goodwill, disallowed intangible assets and certain disallowed deferred tax assets are excluded from Common equity tier 1 capital.

Additional tier 1 capital primarily includes qualifying non-cumulative preferred stock, trust preferred securities (Trust Securities) subject to phase-out and certain minority interests. Certain deferred tax assets are also excluded.

Tier 2 capital primarily consists of qualifying subordinated debt, a limited portion of the allowance for loan and lease losses, Trust Securities subject to phase-out and reserves for unfunded lending commitments. The Corporation’s Total capital is the sum of Tier 1 capital plus Tier 2 capital.

To meet adequately capitalized regulatory requirements, an institution must maintain a Tier 1 capital ratio of 8.50 percent and a Total capital ratio of 10.50 percent. A “well-capitalized” institution must generally maintain capital ratios 200 bps higher than the minimum guidelines. The risk-based capital rules have been further supplemented by a Tier 1 leverage ratio, defined as Tier 1 capital divided by quarterly average total assets, after certain adjustments. BHCs must have a minimum Tier 1 leverage ratio of at least 4.0 percent. National banks must maintain a Tier 1 leverage ratio of at least 5.0 percent to be classified as “well capitalized.” Failure to meet the capital requirements established by the joint agencies can lead to certain mandatory and discretionary actions by regulators that could have a material adverse effect on the Corporation’s financial position. Below are the capital ratios for the Corporation and lead bank.

The fully phased in capital conservation buffer set the minimum ratios for common equity Tier 1 capital at 7%, the Tier 1 capital at 8.5% and the total capital at 10.5%. Currently the Corporation exceeds all of these minimums.


	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025		To Be Well Capitalized
Common equity tier 1 capital
Corporation	~~13.~~12.50	%	1213.4321	%	N/A
First Financial Bank	1312.0532	%	1213.7611	%	6.50	%
Total risk-based capital
Corporation	1413.1554	%	1314.4622	%	N/A
First Financial Bank	1413.0936	%	1314.8114	%	10.00	%
Tier I risk-based capital
Corporation	~~13.~~12.50	%	1213.4321	%	N/A
First Financial Bank	1312.0532	%	1213.7611	%	8.00	%
Tier I leverage capital
Corporation	11.0503	%	1011.3825	%	N/A
First Financial Bank	10.6351	%	10.2682	%	5.00	%

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ITEM 4.Controls and Procedures

First Financial Corporation’s management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of ~~September~~March 3031, ~~2025~~2026, an evaluation was performed under the supervision and with the participation of management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures. Based on that evaluation, management, including the principal executive officer and principal financial officer, concluded that the Corporation’s disclosure controls and procedures as of ~~September~~March 3031, ~~2025~~2026 were effective in ensuring material information required to be disclosed in this Quarterly Report on Form 10-Q was recorded, processed, summarized, and reported on a timely basis. Additionally, there was no change in the Corporation's internal control over financial reporting that occurred during the quarter ended ~~September~~March 3031, ~~2025~~2026 that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting.

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PART II – Other Information

ITEM 1.Legal Proceedings.

There are no material pending legal proceedings, other than routine litigation incidental to the business of the Corporation or its subsidiaries, to which the Corporation or any of the subsidiaries is a party to or of which any of their respective property is subject. Further, there is no material legal proceeding in which any director, officer, principal shareholder, or affiliate of the Corporation or any of its subsidiaries, or any associate of such director, officer, principal shareholder or affiliate is a party, or has a material interest, adverse to the Corporation or any of its subsidiaries.

ITEM 1A. Risk Factors.

There have been no material changes in the risk factors from those disclosed in the Corporation’s 2024 Form 10-K filed for December 31, ~~2024~~2025.

ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds.

(a)

None.

(b)

Not applicable.

(c)

Purchases of Equity Securities

The Corporation periodically acquires shares of its common stock directly from shareholders in individually negotiated transactions. On April 21, 2022 First Financial Corporation issued a press release announcing that its Board of Directors has authorized a stock repurchase program pursuant to which up to 10% of the Corporations outstanding shares of common stock, or approximately 1,243,531 shares may be repurchased.

Following is certain information regarding sh

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