FIRST FINANCIAL BANCORP /OH/ (FFBC)

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

(Unaudited)

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

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

EXECUTIVE SUMMARY

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

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

Company's website at www.bankatfirst.com.

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

MARKET STRATEGY

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

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

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

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

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BUSINESS COMBINATIONS

BankFinancial Corporation

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

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

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

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

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

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

Westfield Bancorp

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

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

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

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

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NON-GAAP FINANCIAL MEASURES

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

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

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

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

First Financial encourages readers to consider its Consolidated F

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

This annual report contains forward-looking statements. See the Forward-Looking Statements section that follows for further information on the risks and uncertainties associated with forward-looking statements.

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

Certain reclassifications of prior years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings, total assets, liabilities and shareholders' equity.

EXECUTIVE SUMMARY

First Financial Bancorp. is a $21.1 billion financial holding company headquartered in Cincinnati, Ohio. The Company

primarily operates through First Financial Bank, an Ohio-chartered commercial bank with 134 full service banking centers at

December 31, 2025. First Financial provides banking and financial services products to business and retail clients through its

six lines of business: Commercial, Retail Banking, Mortgage Banking, Wealth Management, Investment Commercial Real

Estate and Commercial Finance. The Commercial Finance business lends to targeted industry verticals and has a national geographic footprint. Wealth Management, operating under the brand of Yellow Cardinal Advisory Group, had $3.9 billion in assets under management as of December 31, 2025, and provides the following services: financial planning, investment management, trust administration, estate settlement, business succession planning services, brokerage services and retirement planning.

Additional information about First Financial, including its products, services and banking locations, is available on the Company's website at www.bankatfirst.com.

The major components of First Financial’s operating results for 2025, 2024 and 2023 are summarized in Table 1 – Financial Summary and are discussed in greater detail in the sections that follow.

MARKET STRATEGY

First Financial develops a competitive advantage by utilizing a local market focus to provide superior service and build long-term relationships with clients while helping them achieve greater financial success. First Financial serves a combination of

metropolitan and community markets in Ohio, Indiana, Kentucky and Illinois through its full-service banking centers. First

Financial's investment in community markets is an important part of the Bank's core funding base and has historically provided

stable, low-cost funding sources.

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

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

BUSINESS COMBINATIONS

Westfield Bancorp

First Financial Bancorp acquired Westfield Bancorp, Inc., an Ohio corporation, effective November 1, 2025. Upon completion of the transaction, Westfield Bank, FSB, a federal savings bank, and a wholly owned subsidiary of Westfield Bancorp, merged into First Financial Bank. Pursuant to the Purchase Agreement, First Financial acquired all of the issued and outstanding equity securities of Westfield Bancorp in exchange for a cash payment of $260.0 million and 2,753,094 shares of First Financial

2 First Financial Bancorp 2025 Annual Report

common stock, equal to $64.4 million based on the Company's stock price on the date the transaction, for a total purchase price of $324.4 million.

This acquisition supplements First Financial’s existing commercial banking and wealth management presence in Northeast Ohio by adding all seven of Westfield's retail banking locations and its commercial, insurance agency and private banking services.

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value for the Westfield acquisition.

Agile Premium Finance

In February 2024, First Financial completed its acquisition of Agile Premium Finance for $96.9 million in an all cash transaction. Headquartered in Lincolnshire, IL, Agile originates commercial loans for the payment of annual property and casualty insurance for businesses. Agile is among industry leaders in the premium finance lending space and is active in all 50 states. Agile loans are secured by the unearned premium of the insurance policies and have an average original term of approximately ten months. Upon completion of the transaction, Agile became a division of the Bank and continues to operate as Agile Premium Finance, taking advantage of its existing brand recognition within the insurance premium financing industry.

The Agile transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date in accordance with FASB ASC Topic 805, Business Combinations. Fair value measurements for the Agile transaction were considered final as of February 2025.

First Financial Bancorp 2025 Annual Report 3

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value for the Agile acquisition.

BankFinancial Corporation

In August 2025, the First Financial entered into an Agreement and Plan of Merger with BankFinancial Corporation, a Maryland corporation. The transaction was completed subsequent to the end of the year, effective January 1, 2026, at which time BankFinancial, National Association, a national banking association, and a wholly owned subsidiary of BankFinancial Corporation, merged into First Financial Bank. Pursuant to the merger agreement, each share of BankFinancial Corporation common stock was converted into 0.48 shares of First Financial common stock, or 5,980,878 total shares, valuing the transaction at $149.6 million based on the closing price of First Financial stock at December 31, 2025.

As of December 31, 2025, BankFinancial Corporation operated 17 full-service banking offices and had, on an unaudited basis, approximately $1.4 billion of total assets, $700.2 million of total loans and $1.2 billion of total deposits. First Financial intends to sell $449.3 million of multi-family loans that were initially acquired in the BankFinancial transaction. This loan sale is expected to occur in the first half of 2026.

This acquisition expands First Financial’s presence in the Chicago market with a strong core deposit franchise while supplementing its existing commercial banking and wealth management lines of business.

Given the transaction closed subsequent to December 31, 2025, the BankFinancial acquisition had no impact on First Financial's Consolidated Financial Statements as presented in this Annual Report on Form 10-K.

For further information on the BankFinancial, Westfield and Agile acquisitions, see Note 24 – Business Combinations in the Notes to Consolidated Financial Statements.

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(1) Tax equivalent basis calculated using a 21% tax rate

(2) Includes loans held for sale

First Financial Bancorp 2025 Annual Report 5

Management’s Discussion and Analysis of Financial Condition and Results of Operations

NON-GAAP FINANCIAL MEASURES

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

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

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

In addition to capital ratios defined by the U.S. banking agencies, First Financial considers various measures when evaluating

capital utilization and adequacy, including the return on average tangible shareholder's equity and the tangible common equity

ratio. These calculations are intended to complement the capital ratios defined by the U.S. banking agencies for both absolute

and comparative purposes and may be useful for evaluating the performance of a business as the ratios calculate the capital and

return available to common shareholders without the impact of intangible assets and their related amortization. As GAAP does

not include capital ratio measures, the Company believes there are no comparable GAAP financial measures to these ratios. These ratios are not formally defined by GAAP or codified in the federal banking regulations, and, therefore, they are considered to be non-GAAP financial measures.

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

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

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OVERVIEW OF OPERATIONS

Net income for the year ended December 31, 2025 was $255.6 million, resulting in earnings per diluted common share of $2.66. This compares to net income of $228.8 million and earnings per diluted common share of $2.40 in 2024. Return on average assets was 1.35% and 1.29% for 2025 and 2024, respectively. First Financial’s return on average tangible shareholders’ equity for 2025 was 17.57%, compared to 18.31% for 2024.

Net interest income in 2025 increased $30.0 million, or 4.9%, to $642.0 million during 2025, from $612.0 million in 2024, primarily driven by increased earning assets and lower funding costs. The net interest margin on a fully tax equivalent basis was 3.98% for 2025 compared to 4.05% in 2024.

Noninterest income increased $33.9 million, or 15.1%, to $257.4 million during 2025 from $223.6 million in 2024. The increase in 2025 was primarily driven by higher leasing business income, foreign exchange income, wealth management income and gains on the sales of loans.

Noninterest expenses increased $21.0 million, or 4.0%, from $519.6 million in 2024 to $540.5 million in 2025. This increase was largely driven by the Westfield acquisition as well as an increase in leasing business expenses and higher salaries and incentive compensation.

Income tax expense increased $26.2 million, or 66.3%, to $65.7 million in 2025 from $39.5 million in 2024, with the effective tax rate increasing to 20.4% in 2025 from 14.7% in 2024. The increase in the effective tax rate in 2025 was primarily related to the recognition of more tax credit investments in 2024.

Total loans increased $1.7 billion, or 14.1%, to $13.4 billion at December 31, 2025 from $11.8 billion at December 31, 2024, primarily driven by the acquisition of Westfield. Total deposits increased $2.1 billion, or 14.6%, to $16.4 billion as of

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

December 31, 2025 from $14.3 billion at December 31, 2024 due to $1.8 billion of deposits acquired in the Westfield transaction and $302.2 million of organic growth during 2025.

The ACL on loans and leases was $186.5 million, or 1.39% of total loans at December 31, 2025, compared to $156.8 million, and 1.33% of total loans at December 31, 2024. First Financial recorded $36.5 million in provision expense during 2025, compared to $49.2 million in provision expense during 2024. Additionally, in accordance with the Company's early adoption of ASU 2025-08, the Company recorded a $23.7 million increase to the ACL, with a corresponding increase to Goodwill, to account for the expected losses on loans acquired in the Westfield transaction.

First Financial’s operational results may be influenced by certain economic factors and conditions, such as market interest rates, industry competition, household and business spending levels, consumer confidence and the regulatory environment. For a more detailed discussion of the Company's operations, please refer to the sections that follow.

NET INCOME

2025 vs. 2024. First Financial’s net income increased $26.8 million, or 11.7%, to $255.6 million in 2025, compared to net income of $228.8 million in 2024. The increase in 2025 was primarily related to a $30.0 million, or 4.9%, increase in net interest income, a $12.7 million, or 25.8%, decrease in provision expense and a $33.9 million, or 15.1%, increase in noninterest income, which were partially offset by a $21.0 million, or 4.0%, increase in noninterest expenses and a $26.2 million, or 66.3%, increase in income tax expense.

2024 vs. 2023. First Financial’s net income decreased $27.0 million, or 10.6%, to $228.8 million in 2024, compared to net

income of $255.9 million in 2023. The decrease in 2024 was primarily related to a $15.8 million, or 2.5%, decrease in net

interest income, a $41.1 million, or 8.6%, increase in noninterest expenses and a $6.1 million, or 14.2%, increase in provision

expense, which were partially offset by a $11.1 million, or 5.2%, increase in noninterest income and a $23.2 million, or 37.0%,

decrease in income tax expense.

For more detail, refer to the Net interest income, Noninterest income, Noninterest expenses, Income taxes and Asset quality and allowance for credit losses sections that follow.

NET INTEREST INCOME

First Financial’s net interest income for the years 2025, 2024 and 2023 is shown in Table 1 – Financial Summary.

First Financial’s principal source of income is net interest income, which is the excess of interest received from earning assets, including loan-related fees and purchase accounting accretion, less interest paid on interest-bearing liabilities. The amount of net interest income is determined by the volume and mix of earning assets, the rates earned on such assets and the volume, mix and rates paid for the deposits and borrowed money that support the earning assets. Earning assets consist of interest-bearing loans and leases to customers as well as marketable investment securities. First Financial's tax equivalent net interest margin was 3.98%, 4.05% and 4.40% for 2025, 2024 and 2023, respectively.

Table 5 – Volume/Rate Analysis - Tax Equivalent Basis describes the extent to which changes in interest rates as well as changes in the volume of earning assets and interest-bearing liabilities have affected First Financial’s net interest income on a tax equivalent basis during the years presented. Nonaccrual loans and loans held for sale were included in the average loan balances used to determine the yields in Table 5 – Volume/Rate Analysis - Tax Equivalent Basis, which should be read in conjunction with Table 4 – Statistical Information.

Loan fees included in the interest income computation for 2025, 2024 and 2023 were $16.6 million, $16.2 million and $19.0 million, respectively. Interest income also included purchase accounting accretion of $3.8 million, $3.5 million and $4.2 million for 2025, 2024 and 2023, respectively.

2025 vs. 2024. Net interest income increased $30.0 million, or 4.9%, to $642.0 million in 2025 from $612.0 million in 2024. The increase in net interest income reflected an increase in earning asset balances and a decline in funding costs. These changes more than offset an increase in interest bearing liabilities and a decline in asset yields.

Net interest margin on a fully tax equivalent basis decreased 7 bps to 3.98% for 2025 compared to 4.05% in 2024. The net interest margin was strong throughout 2025, as earning asset growth helped to mitigate the impact from higher deposit balances.

8 First Financial Bancorp 2025 Annual Report

Additionally, First Financial successfully managed funding costs, which decreased 45 bps during the year. This decline in funding costs mostly offset a 41 bp decline in asset yields.

Interest income declined $0.2 million in 2025 when compared to the prior year as the yield on earning assets decreased to 6.20% from 6.61%. Largely offsetting the decline in yields, average earning assets increased to $16.2 billion as of December 31, 2025 from $15.2 billion in 2024, primarily due to a $603.1 million increase in average loan balances.

Total interest expense decreased $30.2 million, or 7.7%, due to a 43 bp decrease in the cost of interest-bearing deposits, and a 12 bp decrease in the cost of average borrowings. These decreases were partially offset by a $953.6 million increase in average deposit balances and a $158.9 million decrease in average borrowings. The cost of interest-bearing deposits was 2.69% in 2025 compared to 3.12% for the same period in the prior year, and the cost of borrowed funds decreased to 5.48% in 2025 from 5.60% in 2024.

2024 vs. 2023. Net interest income decreased $15.8 million, or 2.5%, to $612.0 million in 2024 from $627.8 million in 2023,

as interest rates were stable during most of 2024. The decline in net interest income reflected an increase in interest bearing

liabilities and the rates paid on those liabilities, which more than offset an increase in earning asset balances and the rates

earned on those assets.

Net interest margin on a fully tax equivalent basis decreased 35 bps to 4.05% for 2024 compared to 4.40% in 2023 as funding

costs increased during the year. The net interest margin was strong throughout 2024, as earning asset growth helped to mitigate

the impact from higher funding costs and higher deposit balances. Funding costs increased 75 bps during the year while asset

yields increased 30 bps compared to 2023.

Interest income grew $99.1 million, or 11.0%, in 2024 when compared to the prior year as the yield on earning assets rose to

6.61% from 6.31%. Additionally, average earning assets increased to $15.2 billion as of December 31, 2024 from $14.4 billion

in 2023, primarily due to an $866.6 million increase in average loan balances.

Total interest expense increased $114.9 million, or 41.7%, due to a 94 bp increase in the cost of interest-bearing deposits

coupled with a $1.4 billion increase in those deposit balances, and a 22 bp increase in the cost of average borrowings. These

increases were partially offset by a $306.2 million decrease in average borrowings. The rate environment resulted in a

continued shift in deposit mix as customers migrated from lower-cost transaction accounts to higher cost deposit products,

while the increase in deposit balances led to the decrease in borrowings. The cost of interest-bearing deposits was 3.12% in

2024 compared to 2.18% for the same period in the prior year, and the cost of borrowed funds increased to 5.60% in 2024 from

5.38% in 2023.

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(1) Tax equivalent basis calculated using a 21% tax rate

(2) Includes nonaccrual loans and loans held-for-sale

(3) Includes HTM securities, AFS securities and other investments

NONINTEREST INCOME AND NONINTEREST EXPENSES

Noninterest income and noninterest expenses for 2025, 2024 and 2023 are shown in Table 6 – Noninterest Income and Noninterest Expenses.

NONINTEREST INCOME

2025 vs. 2024. Noninterest income increased $33.9 million, or 15.1%, to $257.4 million in 2025 from $223.6 million in 2024. The increase was primarily attributed to a $12.4 million, or 18.3%, increase in leasing business income; a $9.6 million, or 17.1%, increase in foreign exchange income; a $7.0 million, or 38.9%, increase in gains from sales of loans; a $3.8 million, or 13.4%; increase in wealth management fees; a $3.1 million, or 66.0%, increase in client derivative fees; and a $2.1 million, or 7.1%, increase in service charges on deposit accounts. These increases were partially offset by a $4.2 million, or 15.3%, decrease in other noninterest income.

Continued growth from Summit resulted in higher leasing business income during 2025. Foreign exchange and client derivative fee income grew due to increased demand while wealth management fees grew as a result of an increase in business succession consulting fees. The increase in gains from sales of loans reflects an increase in the volume of mortgage loans sold during 2025 due to declining interest rates, while service charges on deposits increased from the prior year due to an increase in deposit balances. Partially offsetting these increases, other noninterest income decreased due to a $4.4 million gain recorded in 2024 related to a deferred tax adjustment.

2024 vs. 2023. Noninterest income increased $11.1 million, or 5.2%, to $223.6 million in 2024 from $212.4 million in 2023. The increase was primarily attributed to a $16.3 million, or 31.8%, increase in leasing business income; a $5.1 million, or 22.9%, increase in other noninterest income; a $4.7 million, or 35.6%, increase in gains from sales of loans; a $2.6 million, or 10.1%; increase in wealth management fees; a $2.0 million, or 3.7%, increase in foreign exchange income; and a $2.0 million, or 7.3%, increase in service charges on deposit accounts. These increases were partially offset by a $21.5 million increase in losses on investment securities.

The growth in leasing business income in 2024 reflected continued growth from Summit during the year. The increase in other noninterest income was primarily driven by a $4.4 million gain related to a deferred tax adjustment, while gains from sales of loans increased due to higher mortgage volumes in the back half of 2024 as the Federal Reserve cut interest rates. Wealth

First Financial Bancorp 2025 Annual Report 11

management fees grew as a result of an increase in managed assets, and foreign exchange income rose as a result of an increase in customer demand. Service charges on deposits increased in 2024 due to a corresponding increase in deposit balances compared to the prior year.

Partially offsetting these increases, losses on investment securities were higher in 2024 than in 2023 due to a $9.7 million impairment loss on two commercial mortgage backed securities where the underlying collateral consisted of skilled nursing facilities with credit deterioration and $13.2 million of losses resulting from the repositioning of a portion of the investment portfolio during 2024.

12 First Financial Bancorp 2025 Annual Report

NONINTEREST EXPENSES

2025 vs. 2024. Noninterest expenses increased $21.0 million, or 4.0%, to $540.5 million in 2025 compared to $519.6 million in 2024, primarily due to an $11.5 million, or 3.8%, increase in salaries and employee benefits; a $9.4 million, or 21.2%, increase in leasing business expenses; a $3.1 million, or 122.0%, increase in state intangible taxes; a $2.7 million, or 7.6%, increase in data processing; and a $2.9 million, or 8.5%, increase in other noninterest expenses. Partially offsetting these increases was a $13.3 million, or 92.1%, decrease in tax credit investment amortization.

Higher salaries and employee benefits were driven by the Westfield acquisition and higher incentive compensation during the year, while the increase in leasing business expense was a result of the continued growth of the operating lease portfolio. Data processing expenses increased primarily due to acquisition-related expenses while state intangible taxes increased as a result of a higher percentage of income being earned in Ohio during 2025. The increase in other noninterest expenses was a result of higher pension expense for 2025. The decline in tax credit amortization during the current year resulted from fewer tax credit investments being recognized in 2025 than in 2024.

2024 vs. 2023. Noninterest expenses increased $41.1 million, or 8.6%, to $519.6 million in 2024 compared to $478.5 million in 2023, primarily due to a $13.1 million increase in tax credit investment amortization; an $11.8 million, or 36.4%, increase in leasing business expenses; an $11.7 million, or 4.0%, increase in salaries and employee benefits; a $4.2 million, or 41.9%, increase in professional services; and a $3.3 million, or 10.5%, increase in other noninterest expenses. Partially offsetting these increases was a $1.4 million, or 35.5%, decrease in state intangible taxes.

Tax credit investment amortization increased during 2024 due to an increase in tax credits realized during the period, while the increase in leasing business expense was a result of continued growth from Summit Funding Group. Higher salaries and employee benefits were driven by annual compensation adjustments, incentive compensation tied to fee income, and performance related incentives tied to the Company's financial results. Professional services increased primarily due to consulting expenses tied to the Company's ongoing optimization efforts. The increase in other noninterest expenses was driven by higher pension expense in 2024. The decline in state intangible taxes during the year was primarily due to the recognition of state tax credits during 2024.

INCOME TAXES

2025 vs. 2024. First Financial’s income tax expense in 2025 totaled $65.7 million compared to $39.5 million in 2024, resulting in effective tax rates of 20.4% and 14.7% for 2025 and 2024, respectively. The higher effective tax rate in 2025 was primarily related to a higher number of tax credits recognized during 2024.

2024 vs. 2023. First Financial’s income tax expense in 2024 totaled $39.5 million compared to $62.7 million in 2023, resulting

in effective tax rates of 14.7% and 19.7% for 2024 and 2023, respectively. The lower effective tax rate in 2024 was primarily

related to tax credit activity during 2024, as well as lower gross income in 2024 compared to 2023.

For further information on income taxes, see Note 16 – Income Taxes in the Notes to Consolidated Financial Statements.

INVESTMENTS

First Financial utilizes its investment portfolio as a source of liquidity and interest income, as well as a tool for managing the Company's interest rate risk profile. As such, the Company's primary investment strategy is to invest in debt securities with low credit risk, such as treasury and agency-backed residential MBS. The investment portfolio is also managed with consideration to prepayment, extension and maturity risk. First Financial invests primarily in MBS issued by U.S. government agencies and corporations, such as GNMA, FHLMC and FNMA, as these securities are considered to have a low credit risk and high liquidity profile due to government agency guarantees. Government and agency backed securities comprised 53.7% and 45.5% of First Financial's investment securities portfolio as of December 31, 2025 and 2024, respectively.

The Company also invests in certain securities whose realization is dependent on future principal and interest repayments. Prior to purchase, First Financial performs a detailed collateral and structural analysis on these securities and strategically invests in asset classes in which First Financial has expertise and experience, as well as a senior position in the capital structure. First Financial continuously monitors credit risk and geographic concentration risk in its evaluation of market opportunities that would enhance the overall performance of the portfolio. Securities not supported by government or agency guarantees represented 46.3% and 54.5% of First Financial's investment securities portfolio as of December 31, 2025 and 2024, respectively.

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The other investments category in the Consolidated Balance Sheets consists primarily of First Financial’s investments in FRB stock and FHLB stock.

2025 vs. 2024. First Financial’s investment portfolio at December 31, 2025 totaled $4.0 billion, compared to $3.3 billion at December 31, 2024, and represented 19.1% of total assets at December 31, 2025. The $769.7 million, or 23.6%, increase in the investment portfolio during 2025 was primarily related to the Westfield acquisition as well as Company's strategic deployment of balance sheet liquidity resulting from an increase in deposits.

First Financial classified $4.0 billion, or 98.5%, and $3.2 billion, or 97.6%, of investment securities as AFS at December 31, 2025 and 2024, respectively. First Financial classified $58.5 million, or 1.5%, and $77.0 million, or 2.4%, of investment securities as HTM at December 31, 2025 and 2024, respectively.

First Financial recorded a $163.9 million unrealized after-tax loss on the investment portfolio at December 31, 2025 due to changes in the fair value of AFS securities resulting from higher interest rates. This unrealized after-tax loss position, which was reflected as an adjustment to equity in AOCI, improved $92.6 million in 2025 from a $256.5 million unrealized after-tax loss at December 31, 2024 due to a decrease in interest rates during the year and the Company's strategic repositioning of a portion of the portfolio.

The overall duration of the investment portfolio was 4.4 years as of both December 31, 2025 and December 31, 2024. First Financial has avoided adding to its portfolio any particular securities that would materially increase credit risk or geographic concentration risk and the Company continuously monitors and considers these risks in its evaluation of current market opportunities that would enhance the overall performance of the portfolio.

During 2025, the Company realized $22.3 million of losses on investment securities, which is included in noninterest income in Consolidated Statements of Income, compared to $22.6 million in 2024. The repositioning of a portion of the investment portfolio accounted for losses of $6.5 million and $13.2 million in 2025 and 2024, respectively, while impairment write-downs accounted for $8.1 million of losses in 2025 and $9.7 million in 2024. These impairment losses were due to credit deterioration where the Company had determined that it no longer intended to hold the securities until the recovery of their amortized cost bases.

First Financial had six AFS securities with unrealized losses due to credit deterioration at December 31, 2025. These securities totaled $20.9 million, with $9.8 million of unrealized losses. The Company had two AFS securities with unrealized losses due to credit deterioration at December 31, 2024, which totaled $11.1 million, and had unrealized losses of $1.1 million. The Company is monitoring these securities and believes that the Company will receive the full par value.

Debt securities issued by the U.S. government and U.S. government agencies and corporations, including the FHLB, FHLMC, FNMA and the U.S. Export/Import Bank, were not meaningful as a percentage of the portfolio at either December 31, 2025 or December 31, 2024.

Investments in MBS securities, which include CMO, represented 66.4% and 60.2% of First Financial's total investment portfolio at December 31, 2025 and 2024, respectively. MBS securities are participations in pools of loans secured by mortgages under which payments of principal and interest are passed through to the security holders. These securities are subject to prepayment risk, particularly during periods of declining interest rates, and extension risk during periods of rising interest rates. Prepayments of the underlying residential real estate loans may shorten the lives of the securities, thereby affecting yields to maturity and market values.

Tax-exempt securities of states, municipalities and other political subdivisions totaled $626.4 million as of December 31, 2025 and $529.5 million as of December 31, 2024, comprising 15.5% and 16.2% of the investment portfolio at December 31, 2025 and 2024, respectively. The securities are diversified to include states as well as issuing authorities within states, thereby decreasing geographic portfolio risk. First Financial continuously monitors the risk associated with this investment type and reviews underlying ratings for possible downgrades. First Financial does not own any state or other political subdivision securities that are currently impaired.

Asset-backed securities were $556.5 million, or 13.8% of the investment portfolio at December 31, 2025 and $534.1 million, or 16.4% of the investment portfolio at December 31, 2024. First Financial considers these investment securities to have lower credit risk and a high liquidity profile as a result of explicit guarantees on the collateral.

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Other securities, consisting primarily of taxable securities of states, municipalities and other political subdivisions, in addition to debt securities issued by corporations, were $173.7 million, or 4.3% of the investment portfolio, at December 31, 2025 and $162.8 million, or 5.0% of the investment portfolio, at December 31, 2024.

First Financial held $597.3 million and $730.2 million of cash on deposit with the Federal Reserve and FHLB at December 31, 2025 and 2024, respectively. The Company continually monitors its liquidity position as part of its ERM framework, specifically through its asset/liability management process.

The Company had unrealized gains on equity securities of $0.3 million recorded in noninterest income for the twelve months ended both December 31, 2025 and 2024.

First Financial will continue to monitor loan and deposit demand, balance sheet composition, capital sensitivity and the interest rate environment as it manages investment strategies in future periods. See Note 4 – Investment Securities in the Notes to Consolidated Financial Statements for additional information on the Company's investment portfolio and Note 23 – Fair Value Disclosures for additional information on how First Financial determines the fair value of investment securities.

The estimated maturities and weighted-average yields of HTM and AFS investment securities as of December 31, 2025 are shown in Table 8 – Investment Securities. Tax-equivalent adjustments using a rate of 21% were included in calculating yields on tax-exempt obligations of state and other political subdivisions.

First Financial Bancorp 2025 Annual Report 15

(1) Tax equivalent basis was calculated using a 21% tax rate and yields were based on amortized cost.

(2) Maturity represents estimated life of investment securities

LENDING PRACTICES

First Financial remains dedicated to meeting the financial needs of individuals and businesses through its client-focused business model. The loan portfolio is comprised of a broad range of borrowers primarily located in the Ohio, Indiana, Kentucky and Illinois markets; however, the insurance premium finance, commercial finance and leasing lines of business serve a nationwide client base.

First Financial’s loan portfolio consists of commercial loan types, including C&I, lease financing (equipment leasing), construction real estate and commercial real estate, as well as consumer loan types, such as residential real estate, home equity, installment and credit card loans. First Financial's lending portfolios are managed to avoid the creation of inappropriate industry, geographic or borrower concentration risk.

Credit Management. Subject to First Financial’s credit policy and guidelines, credit underwriting and approval occur within the market and/or the centralized line of business originating the loan. First Financial has delegated a lending limit sufficient to address the majority of client requests in a timely manner to each market president and line of business manager. Loan requests for amounts greater than those limits require the approval of a designated credit officer or senior credit committee and may require additional approvals from the Chief Credit Officer, the Chief Executive Officer and the Board of Directors. This allows First Financial to manage the initial credit risk exposure through a standardized, strategic and disciplined approval process, but with an increasingly higher level of authority. Plans to purchase or sell a participation in a loan, or a group of loans, requires the approval of certain senior lending and administrative officers, and in some cases could include the Board of Directors.

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Credit management practices are dependent on the type and nature of the loan. First Financial monitors all significant

exposures on an ongoing basis. Commercial loans are assigned internal risk ratings reflecting the risk of loss inherent in the loan. These internal risk ratings are assigned upon initial approval of credit and are updated periodically thereafter. First Financial reviews and adjusts its risk ratings based on actual experience, which is the basis for determining an appropriate ACL. First Financial's commercial risk ratings of pass, special mention, substandard and doubtful are derived from standard regulatory rating definitions and facilitate the monitoring of credit quality across the commercial loan portfolio. For further information regarding these risk ratings, see Note 5 – Loans and Leases in the Notes to the Consolidated Financial Statements.

Commercial loans rated as special mention, substandard or doubtful are considered criticized, while loans rated as substandard or doubtful are considered classified. Commercial loans may be designated as criticized and/or classified based on individual borrower performance or industry and environmental factors. Criticized and classified loans are subject to more frequent internal reviews to assess the borrower’s credit status and develop appropriate action plans.

Management considers classified loans to be the leading indicator of credit losses, and these loans are typically managed by the Special Assets Department. Special Assets is a commercial credit group whose primary focus is to handle the day-to-day management of commercial workouts, recoveries and problem loan resolutions. Special Assets ensures that First Financial has appropriate oversight, improved communication and timely resolution of issues throughout the loan portfolio. Additionally, the CRM group within First Financial's Risk Management function provides independent, objective oversight and assessment of commercial credit quality and processes.

Consumer lending credit approvals are based upon the financial strength and payment history of the borrower, type of exposure and the transaction structure, among other factors. Consumer loans are generally smaller dollar amounts than other types of lending and are made to a large number of customers, providing diversification within the portfolio. Credit risk in the consumer loan portfolio is managed by loan type, and consumer loan asset quality indicators, including delinquency, are continuously monitored. The Credit Risk Management group performs product-level performance reviews and assesses credit quality and compliance with underwriting and loan administration guidelines across the consumer loan portfolio.

LOANS AND LEASES

2025 vs. 2024. Loans, excluding loans held for sale, totaled $13.4 billion at December 31, 2025, increasing $1.7 billion, or 14.1%, compared to December 31, 2024. The increase in loan balances included $1.6 billion acquired in the Westfield transaction.

C&I loans increased $816.4 million, or 21.4%, to $4.6 billion; residential real estate loans increased $369.9 million, or 25.3%, to $1.8 billion; commercial real estate loans increased $322.8 million, or 7.9%, to $4.4 billion; finance lease balances increased $40.5 million, or 6.8%, to $638.5 million; home equity loans increased $156.2 million, or 18.4%, to $1.0 billion; installment loans increased $55.6 million, or 41.8%, to $188.7 million; and credit card balances increased $3.0 million, or 4.8%, to $65.3 million. Partially offsetting these increases, construction real estate loans decreased $102.1 million, or 13.1%, to $677.3 million.

Average loan balances, including loans held for sale, were $12.0 billion for 2025, an increase of $603.1 million, or 5.3%, compared to 2024.

Table 9 – Loan Maturity/Rate Sensitivity indicates the contractual maturity of all loans outstanding at December 31, 2025 as well as their sensitivity to changes in interest rates.

For discussion of risks associated with the loan portfolio and First Financial's ACL, see the Asset Quality and Allowance for Credit Losses section included in Management’s Discussion and Analysis.

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In an effort to mitigate credit risk, First Financial routinely reviews its loan portfolio for various concentrations. These reviews consider the Bank's collateral position as well as exposure to a given industry sector. First Financial believes that the loan portfolio is sufficiently diversified to provide protection from deterioration in any particular industry or devaluation of a specific collateral type. Table 10 - C&I and Owner Occupied Loans by Sector and Table 11 - Investor CRE Loans by Property Type provide additional detail behind the Company's C&I and CRE loan portfolios as of December 31, 2025.

(1) Excludes loan marks and loans in process

(1) Excludes loan marks and loans in process

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Given the potential for stress related to commercial office space, First Financial performed targeted reviews of its exposure to this sector during 2025 and 2024. As of December 31, 2025, First Financial had $343.0 million of loans collateralized by non-owner occupied office space, which represents 2.6% of the total loan portfolio, compared to $405.5 million at December 31, 2024. The overall LTV of the portfolio at origination is strong, and a majority is located in suburban locations secured by Class A and Class B assets with recourse to the sponsor. As of December 31, 2025, 89.6% of the office portfolio was pass rated, and there were two relationships totaling $26.1 million on nonaccrual status.

Loans to NDFI totaled $461.1 million, or 3.4% of total loans, as of December 31, 2025. NDFI include a wide range of financial entities that provide services similar to those of traditional banks but do not accept deposits from the general public and are not regulated by the Federal banking agencies. The NDFI balances at December 31, 2025 included $314.2 million in loans to mortgage credit intermediaries, $118.7 million in loans to business credit intermediaries, and $28.2 million of loans to other NDFI, such as private equity funds and consumer credit intermediaries. As of December 31, 2025, all of the loans to NDFI had an internal credit rating of pass.

COMMITMENTS AND CONTINGENCIES

Off-balance sheet arrangements include commitments to extend credit and financial guarantees.  Loan commitments are agreements to extend credit to a client absent any violation of any condition established in the commitment agreement. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

First Financial had commitments outstanding to extend credit totaling $4.5 billion and $3.8 billion at December 31, 2025 and 2024, respectively. As of December 31, 2025, loan commitments with variable interest rates totaled $4.4 billion, while commitments with a fixed interest rate totaled $75.0 million. At December 31, 2024, commitments with variable interest rates totaled $3.7 billion, while loan commitments with a fixed interest rate totaled $69.3 million. The fixed rate loan commitments have interest rates ranging from 0% to 21% for both December 31, 2025 and 2024 and have maturities ranging from less than 1 year to 31.6 years at both December 31, 2025 and December 31, 2024.

Letters of credit are conditional commitments issued by First Financial to guarantee the performance of a client to a third party.  First Financial’s portfolio of letters of credit consists primarily of performance assurances made on behalf of clients who have a contractual commitment to produce or deliver goods or services.  First Financial issued letters of credit aggregating $36.6 million and $25.1 million at December 31, 2025, and 2024, respectively. Management conducts regular reviews of these instruments on an individual client basis.

First Financial is a party in risk participation transactions of interest rate swaps, which had total notional amounts of $335.0 million and $310.7 million at December 31, 2025, and 2024, respectively.

First Financial is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy or other renovation or community revitalization projects. These investments are included in Accrued interest and other assets in the Consolidated Balance Sheets, with any unfunded commitments included in Accrued interest and other liabilities in the Consolidated Balance Sheets. As of December 31, 2025, First Financial expects to recover its remaining investments through the use of the tax credits that are generated by the investments. First Financial had unfunded commitments related to tax credit investments of $103.0 million and $79.8 million at December 31, 2025 and 2024, respectively.

In the ordinary course of business, First Financial and its subsidiaries are parties to litigation, including claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, foreclosure interests that are incidental to our regular business activities and other matters. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of December 31, 2025. Reserves are established for these various matters of litigation, when appropriate, under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had no reserves related to litigation matters as of December 31, 2025 or December 31, 2024.

ASSET QUALITY AND ALLOWANCE FOR CREDIT LOSSES

Loans are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful or when principal or interest payments are 90 days or more past due. Generally, loans are classified as nonaccrual due to a borrower's

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continued failure to adhere to contractual payment terms, coupled with other pertinent factors. When a loan is classified as nonaccrual, the accrual of interest income is discontinued and previously accrued but unpaid interest is reversed.

See Table 12 – Summary of the ACL and Selected Statistics for a summary of First Financial’s nonaccrual loans and OREO, which collectively comprise nonperforming assets.

2025 vs. 2024. Nonaccrual loans as of December 31, 2025 were $101.8 million, or 76 bps of total loans. This represents a $35.8 million, or 54.3%, increase from $66.0 million as of December 31, 2024. Classified asset balances increased $11.4 million, or 5.1%, to $235.5 million at December 31, 2025 from $224.1 million at December 31, 2024. Total classified assets included a $37.0 million receivable from a customer, which was recorded following the mutually agreed upon termination of a foreign exchange trade and is expected to be collected in full. This receivable was $45.0 million at December 31, 2024.

The change in classified assets during 2025 included $20.4 million of loans rated substandard or worse acquired in the Westfield transaction. Absent the impact from Westfield, classified assets declined $9.0 million during 2025 as resolutions of classified assets outpaced downward credit migration during the period.

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

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

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

As detailed in Note 2 – Accounting Standards Recently Adopted or Issued, the Company adopted ASU 2025-08 in 2025. The new rule allowed the Company to apply the gross-up approach in ASC 326 to all purchased seasoned loans, not just loans classified as PCD. The gross-up approach requires an entity to record an ACL at the acquisition date, offset by an addition to the amortized cost basis of the asset. Prior to the issuance of this ASU, the ACL for non-PCD assets was separately recorded through provision expense at the acquisition date.

See Table 12 – Summary of the ACL and Selected Statistics for a summary of activity impacting the ACL and Table 13 – Allocation of the ACL for detail on its composition.

2025 vs. 2024. The total ACL, which includes both funded and unfunded reserves, was $206.7 million at December 31, 2025, and included $25.9 million related to the Westfield acquisition in accordance with the Company's early adoption of ASU 2025-08. Net charge-offs were 25 bps of total loans, and the Company recorded $37.7 million in total provision expense for 2025. This compared to a total allowance of $173.7 million as of December 31, 2024 and $47.7 million of provision expense in 2024.

The Company utilized the Moody's December baseline forecast as its R&S forecast in the quantitative model at December 31, 2025. For reasonableness, the Company also considered the impact to the model from alternative, more adverse economic forecasts and alternative prepayment speeds. These alternative analyses were utilized to inform the Company's qualitative adjustments. Additionally, First Financial considered its credit exposure to certain industries believed to be at risk for future credit stress, such as franchise, hotel, office and investor commercial real estate lending, when making qualitative adjustments to the ACL model.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

ACL - Loans and Leases. The ACL on loans and leases at December 31, 2025 was $186.5 million, which was a $29.7 million, or 18.9%, increase from $156.8 million at December 31, 2024. The ACL was 1.39% as a percentage of total loans as of December 31, 2025 and 1.33% at December 31, 2024. Provision expense on loans and leases decreased $12.7 million, or 25.8%, to $36.5 million in 2025 from $49.2 million in 2024. The increase in the ACL in 2025 was primarily driven by the $23.7 million recorded in conjunction with the Westfield acquisition and organic loan growth.

Net charge-offs decreased $3.4 million, or 10.0%, to $30.5 million for 2025 compared to $33.9 million for 2024, while the ratio of net charge-offs as a percentage of average loans outstanding decreased to 25 bps in 2025 from 30 bps in 2024.

The ACL as a percentage of nonaccrual loans was 183.2% at December 31, 2025 and 237.7% at December 31, 2024. The increase in this ratio was attributed to the increase the ACL during the period outpacing the increase in nonaccrual loans.

Provision expense is a product of the Company's ACL model combined with net charge-off activity during the period. Provision expense decreased $12.7 million during 2025 as the Company recorded $36.5 million of provision expense during the period compared to $49.2 million in 2024.

ACL - Unfunded Commitments. The ACL on unfunded commitments was $20.2 million as of December 31, 2025 and $16.9 million as of December 31, 2024. The ACL on unfunded commitments included $2.2 million related to the Westfield acquisition. First Financial recorded $1.1 million of provision expense on unfunded commitments for the year ended December 31, 2025 compared to $1.6 million of provision recapture for the same period of 2024.

For further discussion of First Financial's ACL, see Note 6 – Allowance for Credit Losses in the Notes to Consolidated Financial Statements.

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