Financial Analysis

6. ACQUISITIONS: 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 Corporations income statement for the year 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 A …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

17. STOCK BASED COMPENSATION: On February 5, 2011, the Corporations Board of Directors adopted and approved the First Financial Corporation 2011 Omnibus Equity Incentive Plan (the 2011 Stock Incentive Plan) effective upon the approval of the Plan by the Corporations shareholders, which occurred on April 20, 2011 at the Corporations annual meeting of shareholders. The 2011 Stock Incentive Plan provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and incentive awards. An aggregate of 700,000 shares of common stock were reserved for issuance under the 2011 Stock Incentive Plan. A total of 320,763 shares of restricted common stock of the Corporation were granted under the 2011 Stock Incentive Plan. On April 21, 2021 at the Corporations annual meeting of shareholders, the shareholders approved the First Financial Corporation Amended and Restated 2011 Omnibus Equity Incentive Plan (2011 Amended Plan). An aggregate of 400,000 shares of common stock are reserved for issuance under the 2011 Amended Plan. Shares issuable under the 2011 Amended Plan may be authorized and unissued shares of common stock or treasury shares. During the first quarter of 2025 and 2024, the Compensation Committee of the Board of Directors of the Company granted restricted stock awards to certain executive officers pursuant to the Corporations annual performance-based stock incentive bonus plan. Compensation expense …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

2. FAIR VALUES OF FINANCIAL INSTRUMENTS: Accounting guidance 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 1 prices such as 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 entitys own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair value of 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 s …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

9. GOODWILL AND INTANGIBLE ASSETS: The Corporation completed its annual impairment testing of goodwill during the fourth quarter of 2025 and 2024. Management does not believe any amount of goodwill is impaired. Goodwill was as follows at year-end: 2025 2024 2023 Beginning of year $ 100,026 $ 86,985 $ 86,985 Acquired goodwill 13,041 Measurement period adjustments (1,797) Impairment End of year $ 98,229 $ 100,026 $ 86,985 Goodwill related to the acquisition of SimplyBank was decreased by $1.8 million in 2025 due to adjustments to income tax assets related to the filing of the final SimplyBank tax return. Intangible assets subject to amortization at December 31, 2025 and 2024 are as follows: 2025 2024 Gross Accumulated Gross Accumulated (Dollar amounts in thousands) Amount Amortization Amount Amortization Core deposit intangible $ 41,646 $ 25,412 $ 21,858 $ 17,159 Acquired core deposit intangible 19,788 2,942 $ 41,646 $ 25,412 $ 41,646 $ 20,101 Aggregate amortization expense was $5.3 million, $3.8 million and $1.1 million for 2025, 2024 and 2023, respectively. Estimated amortization expense for the next five years is as follows: In thousands 2026 $ 4,015 2027 2,995 2028 2,888 2029 2,471 2030 1,046 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

14. INCOME TAXES: Income tax expense is summarized as follows: (Dollar amounts in thousands) 2025 2024 2023 Federal: Currently payable $ 15,465 $ 11,028 $ 9,047 Deferred 513 (3,067) 263 15,978 7,961 9,310 State: Currently payable 3,255 2,131 2,302 Deferred 273 (213) 209 3,528 1,918 2,511 TOTAL $ 19,506 $ 9,879 $ 11,821 The Corporation has no foreign operations and therefore no foreign tax expense. The reconciliation of income tax expense with the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes is summarized as follows: (Dollar amounts in thousands) 2025 2024 2023 Amount Rate Amount Rate Amount Rate Federal income taxes computed at the statutory rate $ 20,730 21.0 % $ 12,002 21.0 % $ 15,223 21.0 % Effect of: State tax, net of federal benefit (1) 2,787 2.8 1,515 2.6 1,984 2.7 Tax credits Low Income Housing Tax Credits (2) (871) (0.9) (542) (0.9) (1,720) (2.4) Nontaxable or nondeductible items Tax Exempt Interest Income, net of TEFRA (2,758) (2.8) (2,905) (5.1) (2,942) (4.1) Tax Exempt BOLI Income (533) (0.5) (490) (0.8) (607) (0.8) Nondeductible compensation 733 0.7 293 0.5 193 0.3 Other (141) (0.1) 5 0.0 (18) 0.0 Other adjustments (441) (0.4) 1 0.0 (292) (0.4) Effective tax rate $ 19,506 19.8 % $ 9,879 17.3 % $ 11,821 16.3 % (1) States and local jurisdictions that make up the majority (greater than 50 percent) of the tax effect in this category include Illinois and Indiana for 2025, 2024, and 2023. (2) Includes tax credits …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

19. LEASES: The Corporation leases certain branches under operating leases. At December 31, 2025, the Corporation had lease liabilities totaling $7,547,000 and right-of-use assets totaling $7,386,000 related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. For the year ended December 31, 2024, the weighted average remaining lease term for operating leases was 10.1 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.32%. 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 Corporations lease agreements often include one or more options to renew at the Corporations 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. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was use …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Accounting Pronouncements Adopted: 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 applied ASU 2023-07 in interim periods within fiscal years beginning January 1, 2025. For additional information relating to the adoption of the amendments, see Note 1, under Segment Reporting. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Among other things, these amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applic …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

16. RETIREMENT PLANS: Employees of the Corporation are covered by a retirement program that consists of a defined benefit plan and an employee stock ownership plan (ESOP). Plan assets consist primarily of the Corporations stock and obligations of U.S. Government agencies. Benefits under the defined benefit plan are actuarially determined based on an employees service and compensation, as defined, and funded as necessary. This plan was frozen for the majority of employees as of December 31, 2012.Those employees will be eligible to participate in a 401K plan that the Corporation can contribute a discretionary match of the pay contributed by the employee. In addition the ESOP plan will continue in place for all employees. Assets in the ESOP are considered in calculating the funding to the defined benefit plan required to provide such benefits. Any shortfall of benefits under the ESOP are to be provided by the defined benefit plan. The ESOP may provide benefits beyond those determined under the defined benefit plan. Contributions to the ESOP are determined by the Corporations Board of Directors. The Corporation made contributions to the defined benefit plan of $1.2 million, $3.4 million, and zero in 2025, 2024 and 2023. The Corporation contributed $1.66 million, $1.67 million and $1.52 million to the ESOP in 2025, 2024 and 2023. There were contributions of $1.5 million, $1.4 million and $1.3 million to the ESOP for employees no longer participating in the defined benefit plan in …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

13. REVENUE FROM CONTRACTS WITH CUSTOMERS: All of the Corporations revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporations sources of Non-Interest Income for the years ended December 31, 2025 and 2024. Items outside the scope of ASC 606 are noted as such. Years Ended December 31, (Dollar amounts in thousands) 2025 2024 Non-interest income Service charges on deposits and debit card fee income $ 31,388 $ 29,653 Trust and financial services 5,777 5,468 Interchange income 755 655 Net gains on sales of loans (a) 1,453 1,153 Loan servicing fees (a) 1,170 1,259 Net gains/(losses) on sales of securities (a) (4,600) 103 Other service charges and fees (a) 1,097 999 Other (b) 4,932 3,482 Total non-interest income $ 41,972 $ 42,772 (a) Not within the scope of ASC 606. (b) The Other category includes gains/(losses) on the sale of OREO for the years ended December 31, 2025 and December 31, 2024, totaling $(113) thousand and $100 thousand, respectively, which is within the scope of ASC 606; the remaining balance is outside the scope of ASC 606. Service charges on deposits and debit card fee income : 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 a …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"22. SUBSEQUENT EVENTS (UNAUDITED): On March 1, 2026, First Financial Corporation, an Indiana corporation (""First Financial""), and First Financial Bank, N.A. (First Financial Bank), a wholly owned subsidiary of First Financial completed their previously announced acquisition of CedarStone Financial, Inc., a Tennessee corporation (CedarStone) and CedarStone Bank, a wholly owned subsidiary of CedarStone (CedarStone Bank), pursuant to the Agreement and Plan of Reorganization by and among First Financial, First Financial Bank, CedarStone, and CedarStone Bank, dated as of November 6, 2025 (the ""Merger Agreement""). On the terms and subject to the conditions set forth in the Merger Agreement, CedarStone merged into First Financial, with First Financial as the surviving entity, and CedarStone Bank merged into First Financial Bank, with First Financial Bank as the surviving entity (the Merger). Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, First Financial paid $19.12 per share in cash for each share of CedarStones common stock outstanding. The aggregate value of the transaction was approximately $25.0 million." …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

12. Acquisitions 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 Corporations 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 $ 73,4 …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

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 entitys 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 p …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

11. Leases The Corporation leases certain branches under operating leases. At September 30, 2025, the Corporation had lease liabilities totaling $7,807,000 and right-of-use assets totaling $7,660,000 related to these leases. At December 31, 2024, the Corporation had lease liabilities totaling $7,829,000 and right-of-use assets totaling $7,725,000 related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. At September 30, 2025, the weighted average remaining lease term for operating leases was 10.2 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.31%. The calculated amount of the lease liabilities and right-of-use assets are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Corporations lease agreements often include one or more options to renew at the Corporations 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 sim …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

8. Components of Net Periodic Benefit Cost Three Months Ended September 30, Nine Months Ended September 30, Post-Retirement Post-Retirement Pension Benefits Health Benefits Pension Benefits Health Benefits (Dollar amounts in thousands) 2025 2024 2025 2024 2025 2024 2025 2024 Service cost $ 108 $ 142 $ 3 $ 4 $ 323 $ 424 $ 9 $ 12 Interest cost 1,016 947 32 34 3,049 2,841 96 103 Expected return on plan assets (1,094) (1,051) (3,281) (3,154) Net amortization of prior service cost Net amortization of net (gain) loss 109 (39) (20) 326 (117) (60) Net Periodic Benefit Cost $ 30 $ 147 $ (4) $ 18 $ 91 $ 437 $ (12) $ 55 Employer Contributions First Financial Corporation previously disclosed in its financial statements for the year ended December 31, 2024 that it expected to contribute $570 thousand and $563 thousand respectively to its Pension Plan and ESOP and $243 thousand to the Post Retirement Health Benefits Plan in 2025. Contributions of $905 thousand have been made to the Pension Plan thus far in 2025. Contributions of $188 thousand have been made through the first nine months of 2025 for the Post Retirement Health Benefits plan. No contributions have been made in 2025 for the ESOP. The Pension plan was frozen for most employees at the end of 2012 and for those employees there will be discretionary contributions to the ESOP plan and a 401K plan in place of the former Pension benefit. In the first nine months of 2025 and 2024 there has been $2.4 million and $2.4 million of expense …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

9. Revenue from Contracts with Customers All of the Corporations revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporations sources of Non-Interest Income for the three and nine months ended September 30, 2025 and 2024. Items outside the scope of ASC 606 are noted as such. Three Months Ended September 30, Nine Months Ended September 30, (Dollar amounts in thousands) 2025 2024 2025 2024 Non-interest income Service charges on deposits and debit card fee income $ 8,104 $ 8,139 $ 23,243 $ 21,576 Trust and financial services 1,278 1,251 4,161 3,903 Interchange income 176 177 570 490 Net gains on sales of loans (a) 494 411 1,149 886 Loan servicing fees (a) 338 274 830 957 Net gains/(losses) on sales of securities (a) 24 103 21 104 Other service charges and fees (a) 251 191 823 700 Other (b) 484 677 1,244 1,943 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 30, 2025 and September 30, 2024, totaling $57 thousand and $(25) thousand, respectively, and for the nine months ended for the same periods, totaling $(123) thousand and $61 thousand, which is within the scope of ASC 606; the remaining balance is outside the scope of ASC 606. (c) Service charges on deposits : The Corporation earns fees from its deposit customers for transaction-based, ac …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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 months ended 2025 and 2024, 25,134 and 27,803 shares were awarded, respectively. These shares had a grant date value of $1.2 million and $1.0 million for 2025 and 2024, vest over three years, and their grant is not subject to future performance measures. Outstanding shares are increased at the award date for the total shares awarded. On July 1, 2024, the Corporation completed its acquisition of SimplyBank. Therefore, the results of Sim …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing