FIRST FINANCIAL BANCORP /OH/ (FFBC) FY 2024 MD&A

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 $18.6 billion financial holding company headquartered in Cincinnati, Ohio. The Company

primarily operates through First Financial Bank, an Ohio-chartered commercial bank with 127 full service banking centers at

December 31, 2024. 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 on a nationwide basis.

Operating under the brand of Yellow Cardinal Advisory Group, Wealth Management had $3.7 billion in assets under

management as of December 31, 2024 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 2024, 2023 and 2022 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 banking center footprint. These specialty finance businesses provide insurance premium financing, equipment lease financing and financing to franchise owners and 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 additional industry verticals that complement its existing business and diversify its

product suite and revenue streams.

BUSINESS COMBINATIONS

In the first quarter of 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 premiums for 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.

2 First Financial Bancorp 2024 Annual Report

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. The fair value of assets acquired and liabilities assumed were $97.8 million and $2.7

million, respectively. Acquisition accounting adjustments are considered preliminary at December 31, 2024. These fair value measurements are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available, and the measurement period for Agile ends in February 2025. Goodwill resulting from the Agile acquisition was $1.8 million while other intangible assets created in the transaction include a customer list, non-compete agreements, trade name and a servicing asset.

In the first quarter of 2023, First Financial purchased the assets of Brady Ware Capital, LLC (Brady Ware). Located in

Miamisburg, Ohio, Brady Ware was an advisory firm for mergers and acquisitions, focusing primarily on business succession

planning. First Financial acquired all of the assets of Brady Ware for aggregate consideration of approximately $4.3 million,

consisting of $3.4 million in cash and a $0.9 million earn-out payment. Pursuant to the purchase agreement, the earn-out

payments are payable annually for each of the five years following the closing of the acquisition, contingent upon the results of

Brady Ware's operations.

The 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. Goodwill resulting from the Brady Ware acquisition was $4.2 million and reflects the

business’s growth potential and the expectation that the acquisition will provide additional revenue growth with the expansion

of the Bank's advisory business. In May 2023, First Financial also acquired Brady Ware Corporate Finance, a broker-dealer

and member of FINRA. First Financial recorded $0.1 million of goodwill in connection with the acquisition of Brady Ware

Corporate Finance. The measurement period for recording adjustments to the fair value of assets and liabilities for Brady Ware

Capital ended in January 2024, while the measurement period for Brady Ware Corporate Finance ended in May 2024.

First Financial Bancorp 2024 Annual Report 3

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

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

(2) Includes loans held for sale

4 First Financial Bancorp 2024 Annual Report

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:

First Financial Bancorp 2024 Annual Report 5

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

OVERVIEW OF OPERATIONS

Net income for the year ended December 31, 2024 was $228.8 million, resulting in earnings per diluted common share of $2.40. This compares to net income of $255.9 million and earnings per diluted common share of $2.69 in 2023. Return on average assets was was 1.29% and 1.51% for 2024 and 2023, respectively. First Financial’s return on average tangible shareholders’ equity for 2024 was 18.31%, compared to 24.72% for 2023.

Net interest income in 2024 decreased $15.8 million, or 2.5%, from 2023, to $612.0 million, primarily driven by increased funding costs and higher deposit balances offsetting the increases in earning asset balances and yields. The net interest margin on a fully tax equivalent basis was 4.05% for 2024 compared to 4.40% in 2023.

Noninterest income increased $11.1 million, or 5.2%, to $223.6 million during 2024 from $212.4 million in 2023. The increase in 2024 was primarily driven by increases in leasing business income, other noninterest income, gains on sales of loans and wealth management fees, which were partially offset by losses on investment securities.

Noninterest expense increased $41.1 million, or 8.6%, from $478.5 million in 2023 to $519.6 million in 2024. This increase was largely driven by higher amortization of tax credit investments, other noninterest expense, leasing business expense, salaries and incentives and professional services.

Income tax expense decreased $23.2 million, or 37.0%, to $39.5 million in 2024 from $62.7 million in 2023, with the effective tax rate decreasing to 14.7% in 2024 from 19.7% in 2023. The decrease in the effective tax rate in 2024 was primarily related to the recognition of more tax credit investments in 2024.

Total loans increased $828.6 million, or 7.6%, to $11.8 billion at December 31, 2024 from $10.9 billion at December 31, 2023, primarily driven by the acquisition of Agile and organic growth in C&I loans, construction, residential real estate and lease financing. Total deposits increased $968.3 million, or 7.2%, to $14.3 billion as of December 31, 2024 from $13.4 billion at

6 First Financial Bancorp 2024 Annual Report

December 31, 2023 primarily due to increases in CDs and money market savings, which was partially offset by a slight decline in noninterest bearing deposits.

The ACL on loans and leases was $156.8 million, or 1.33% of total loans at December 31, 2024, compared to $141.4 million, and 1.29% of total loans at December 31, 2023. First Financial recorded $49.2 million in provision expense during 2024, compared to $43.1 million in provision expense during 2023.

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

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.

2023 vs. 2022. First Financial’s net income increased $38.3 million, or 17.6%, to $255.9 million in 2023, compared to net

income of $217.6 million in 2022. The increase in 2023 was primarily related to a $108.6 million, or 20.9%, increase in net

interest income and a $22.8 million, or 12.0%, increase in noninterest income, partially offset by a $23.1 million, or 5.1%,

increase in noninterest expenses, a $36.3 million, or 539.9%, increase in provision expense and a $38.6 million, or 160.2%,

increase 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 2024, 2023 and 2022 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 4.05%, 4.40% and 3.77% for 2024, 2023 and 2022, 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 2024, 2023 and 2022 were $16.2 million, $19.0 million and $19.2 million, respectively. Interest income also included purchase accounting accretion of $3.5 million, $4.2 million and $8.8 million for 2024, 2023 and 2022, respectively.

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.

First Financial Bancorp 2024 Annual Report 7

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

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.

2023 vs. 2022. Net interest income increased $108.6 million, or 20.9%, to $627.8 million in 2023 from $519.1 million in 2022,

as interest rates rose during 2023. This increase was due to higher asset yields and higher earning asset balances more than

offsetting an increase in interest bearing liabilities and rates paid on those liabilities during the period.

Net interest margin on a fully tax equivalent basis increased 63 bps to 4.40% for 2023 compared to 3.77% in 2022 as the

Company's asset sensitive balance sheet responded to further Fed rate hikes. This resulted in a 206 bp increase in asset yields,

which more than offset an increase in interest-bearing liabilities and a 190 bp increase in funding costs during the period.

Interest income grew $318.0 million, or 54.4%, in 2023 when compared to 2022 as the yield on earning assets rose to

6.31% from 4.25%. Additionally, average earning assets increased to $14.4 billion as of December 31, 2023 from $13.9 billion

in 2022, primarily due to a $1.0 billion increase in average loan balances.

Total interest expense increased due to a 184 bp increase in the cost of interest-bearing deposits coupled with a $878.3 million

increase in those deposit balances, a 218 bp increase in the cost of average borrowings and a $183.4 million increase in those

borrowings. Higher interest rates resulted in a shift in deposit mix as customers migrated from noninterest bearing

accounts to higher cost deposit products. Additionally, the increase in interest rates drove the increase in the cost of interest-bearing deposits, which was 2.18% in 2023 compared to 34 bps for the same period in 2022. Average borrowed funds

increased $183.4 million in 2023, while the cost of these borrowed funds increased to 5.38% in 2023 from 3.20% during 2022.

8 First Financial Bancorp 2024 Annual Report

First Financial Bancorp 2024 Annual Report 9

(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 2024, 2023 and 2022 are shown in Table 6 – Noninterest Income and Noninterest Expenses.

NONINTEREST INCOME

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 gain on sale 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 on sales of loans increased due to higher mortgage volumes in the back half of 2024 as the Federal Reserve cut interest rates. Wealth 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 changes on deposits increased due to a corresponding increase in deposit balances.

Partially offsetting these increases, losses on investment securities were higher in 2024 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.

2023 vs. 2022. Noninterest income increased $22.8 million, or 12.0%, to $212.4 million in 2023 from $189.6 million in 2022.

The increase was primarily attributed to a $19.7 million, or 62.5%, increase in leasing business income, a $4.4 million, or

24.9%, increase in other noninterest income and a $2.6 million, or 11.0%, increase in wealth management fees. These increases

were partially offset by an $1.8 million, or 12.2%, decrease in gain on sale of loans, a $0.9 million, or 1.7%, decrease in foreign

exchange income, and a $0.8 million, or 2.8%, decrease in service charges on deposit accounts.

The growth in leasing business income in 2023 reflected continued growth from Summit Funding Group during 2023. The

10 First Financial Bancorp 2024 Annual Report

increase in other noninterest income was driven by BOLI gains as well as higher loan syndication fees, while wealth

management fees were boosted by an increase in managed assets.

Partially offsetting these increases, gains on sales of retail mortgage loans declined in 2023 as loan demand slowed due to a

significant increase in interest rates. Foreign exchange income declined slightly following record high levels in 2022, and

service charge income declined due to a full-year impact of the Company's changes to its service charge and overdraft programs

in 2022.

First Financial Bancorp 2024 Annual Report 11

NONINTEREST EXPENSES

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 the year 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.

2023 vs. 2022. Noninterest expenses increased $23.1 million, or 5.1%, to $478.5 million in 2023 compared to $455.3 million in

2022, primarily due to a $23.4 million, or 8.7%, increase in salaries and employee benefits, a $12.1 million, or 59.6%, increase

in leasing business expenses, a $4.8 million, or 66.1%, increase in FDIC assessments, and a $2.2 million, or 6.5%, increase in

data processing expenses. Partially offsetting these increases was a $22.5 million, or 94.6%, decrease in tax credit investment amortization.

Salaries and employee benefits in 2023 were driven higher by annual compensation adjustments, incentive compensation tied to

fee income, and performance related incentives tied to the Company's financial results. Leasing business expense reflected

continued growth from Summit during the year. FDIC assessment expense increased during 2023 due to higher

assessment rates coupled with a one-time special assessment of $0.9 million, while data processing expenses increased as the

Company continued to make strategic investments in technology, including its online banking platform. Partially offsetting

these increases, tax credit investment amortization declined in 2023 due to elevated tax credits realized in 2022 that did not recur in 2023.

INCOME TAXES

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 a reduction of gross income.

2023 vs. 2022. First Financial’s income tax expense in 2023 totaled $62.7 million, which compared to $24.1 million in 2022. This resulted in effective tax rates of 19.7% and 10.0% for 2023 and 2022, respectively. The higher effective tax rate in 2023 was primarily related to higher pre-tax income during the year as well as tax credit activity during 2022 that did not recur in 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 45.5% and 51.0% of First Financial's investment securities portfolio as of December 31, 2024 and 2023, 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

12 First Financial Bancorp 2024 Annual Report

represented 54.5% and 49.0% of First Financial's investment securities portfolio as of December 31, 2024 and 2023, respectively.

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

2024 vs. 2023. First Financial’s investment portfolio at December 31, 2024 totaled $3.3 billion, compared to $3.1 billion at December 31, 2023, and represented 17.6% of total assets at December 31, 2024. The $159.3 million, or 5.1%, increase in the investment portfolio during 2024 was primarily related to Company's strategic deployment of balance sheet liquidity resulting

from an increase in deposits.

First Financial classified $3.2 billion, or 97.6%, and $3.0 billion, or 97.4%, of investment securities as AFS at December 31, 2024 and 2023, respectively. First Financial classified $77.0 million, or 2.4%, and $80.3 million, or 2.6%, of investment securities as HTM at December 31, 2024 and 2023, respectively.

First Financial recorded a $256.5 million unrealized after-tax loss on the investment portfolio at December 31, 2024 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 $25.4 million in 2024 from a $282.0 million unrealized after-tax loss at December 31, 2023. The overall duration of the investment portfolio was 4.4 years as of December 31, 2024 and 4.6 years as of December 31, 2023. 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 2024, the Company recognized $22.6 million of losses on investment securities, compared to $1.1 million in 2023, which is included in noninterest income in Consolidated Statements of Income. The losses in 2024 included $9.7 million of impairment losses on two commercial mortgage backed securities where the underlying collateral consisted of skilled nursing facilities with credit deterioration, which the Company anticipates selling in the near term, as well as $13.2 million of losses from the repositioning of a small portion of the investment portfolio. The impairment losses were related to certain AFS securities in unrealized loss positions with credit deterioration where the Company determined that it no longer intends to hold the securities and, as such, these securities were written down to fair value, inclusive of credit and other fair value adjustments. These losses were partially offset by $2.2 million of gains recognized from the sale of the Company's remaining Class B Visa shares during 2024. Additionally, the Company had two AFS securities totaling $11.1 million that were in unrealized loss positions at December 31, 2024 due to credit deterioration. The unrealized losses on these two securities totaled $1.1 million. The Company is monitoring these securities and believes that the Company will receive the full par value of these securities.

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, 2024 or December 31, 2023.

Investments in MBS securities, which include CMOs, represented 60.2% and 52.5% of First Financial's total investment portfolio at December 31, 2024 and 2023, 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 $529.5 million as of December 31, 2024 and $660.7 million as of December 31, 2023, comprising 16.2% and 21.3% of the investment portfolio at December 31, 2024 and 2023, 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 $534.1 million, or 16.4% of the investment portfolio at December 31, 2024 and $560.2 million, or 18.1% of the investment portfolio at December 31, 2023. 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.

First Financial Bancorp 2024 Annual Report 13

Other securities, consisting primarily of taxable securities of states, municipalities and other political subdivisions, in addition to debt securities issued by corporations, were $162.8 million, or 5.0% of the investment portfolio, at December 31, 2024 and $151.7 million, or 4.9% of the investment portfolio, at December 31, 2023.

First Financial held $730.2 million and $793.0 million of cash on deposit with the Federal Reserve and FHLB at December 31, 2024 and 2023, 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 and $0.2 million recorded in noninterest income for the twelve months ended December 31, 2024 and 2023, respectively.

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, 2024 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.

14 First Financial Bancorp 2024 Annual Report

(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 national 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.

First Financial Bancorp 2024 Annual Report 15

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 Credit Risk Management 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

2024 vs. 2023. Loans, excluding loans held for sale, totaled $11.8 billion at December 31, 2024, increasing $828.6 million, or 7.6%, compared to December 31, 2023.

C&I loans increased $314.6 million, or 9.0%, largely due to the Agile acquisition combined with the Company's strong origination efforts, and residential real estate loans increased $128.6 million, or 9.6%, as lower interest rates in the back half of 2024 increased demand. Construction real estate loans increased $214.6 million, or 38.0%; finance lease balances increased $123.2 million, or 26.0%; home equity loans increased $90.4 million, or 11.9%; and credit card balances increased $2.4 million, or 4.0%. Partially offsetting these increases, commercial real estate loans decreased $19.2 million, or 0.5%, and installment loans decreased $26.0 million, or 16.4%.

Average loan balances, including loans held for sale, were $11.4 billion for 2024, an increase of $866.6 million, or 8.2%, compared to 2023.

Table 9 – Loan Maturity/Rate Sensitivity indicates the contractual maturity of all loans outstanding at December 31, 2024 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.

16 First Financial Bancorp 2024 Annual Report

First Financial Bancorp 2024 Annual Report 17

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, 2024.

(1) Excludes loan marks and loans in process

(1) Excludes loan marks and loans in process

18 First Financial Bancorp 2024 Annual Report

Given the potential for stress related to commercial office space, First Financial performed targeted reviews of its exposure to this sector during 2024 and 2023. As of December 31, 2024, First Financial had $405.5 million of loans collateralized by non-owner occupied office space, which represents 3.4% of the total loan portfolio, compared to $462.4 million at December 31, 2023. The overall LTV of the portfolio at origination is strong, and 66.1% of the portfolio at December 31, 2024 is located in suburban locations. Additionally, the majority of the portfolio is secured by Class A and Class B assets with recourse to the sponsor. As of December 31, 2024, 93.6% of the office portfolio was pass rated, and there were three relationships totaling $26.0 million on nonaccrual status.

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 $3.8 billion and $4.5 billion at December 31, 2024 and 2023, respectively. As of December 31, 2024, loan commitments with variable interest rates totaled $3.7 billion, while commitments with a fixed interest rate totaled $69.3 million. At December 31, 2023, commitments with variable interest rates totaled $4.4 billion, while loan commitments with a fixed interest rate totaled $108.2 million. The fixed rate loan commitments have interest rates ranging from 0% to 21% for both December 31, 2024 and 2023 and have maturities ranging from less than 1 year to 31.6 years at both December 31, 2024 and December 31, 2023.

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 $25.1 million and $34.9 million at December 31, 2024, and 2023, 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 $310.7 million and $341.7 million at December 31, 2024, and 2023, 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, 2024, 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 $79.8 million and $96.4 million at December 31, 2024 and 2023, 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, 2024. 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, 2024 or December 31, 2023.

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 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.

As detailed in Note 2, the Company prospectively adopted ASU 2022-02 effective as of January 1, 2023. The new rule

eliminated the accounting for TDRs while establishing a new standard for the treatment of modifications made to borrowers

experiencing financial difficulties, defined by First Financial as FDMs. Effective with the adoption of the standard, the

Company prospectively will not include FDMs in the calculation of nonperforming loans, nonperforming assets or classified

First Financial Bancorp 2024 Annual Report 19

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

assets. Prior period data, which included TDRs, has not been adjusted.

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.

2024 vs. 2023. Nonaccrual loans as of December 31, 2024 were $66.0 million, or 56 bps of total loans. This represents a $0.2 million, or 0.3%, increase from $65.8 million as of December 31, 2023. Classified asset balances increased $83.1 million, or 58.9%, to $224.1 million at December 31, 2024 from $141.0 million at December 31, 2023. The increase was driven by a $45.0 million receivable from a customer, which is believed to be fully collateralized, that was recorded following the mutually agreed upon termination of a foreign exchange trade, as well as the downgrade of three CRE loans, one C&I loan and one construction loan.

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.

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.

2024 vs. 2023. The total ACL, which includes both funded and unfunded reserves, was $173.7 million at December 31, 2024, which combined with 30 bps of net charge-offs to result in $47.7 million in total provision expense for the year. This compared to a total allowance of $159.9 million as of December 31, 2023 and $43.1 million of provision expense in 2023.

The Company utilized the Moody's December baseline forecast as its R&S forecast in the quantitative model at December 31, 2024. 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.

ACL - Loans and Leases. The ACL on loans and leases at December 31, 2024 was $156.8 million, which was a $15.4 million, or 10.9%, increase from $141.4 million at December 31, 2023. The ACL was 1.33% as a percentage of total loans as of December 31, 2024 and 1.29% at December 31, 2023. Provision expense on loans and leases increased $6.1 million, or 14.2%, to $49.2 million in 2024 from $43.1 million in 2023. The ACL increase in 2024 was driven by loan growth and slower prepayment speeds during the period.

Net charge-offs decreased $0.8 million, or 2.2%, to $33.9 million for 2024 compared to $34.6 million for 2023, while the ratio of net charge-offs as a percentage of average loans outstanding decreased to 30 bps in 2024 from 33 bps in 2023.

The ACL as a percentage of nonaccrual loans was 237.7% at December 31, 2024 and 215.1% at December 31, 2023. The increase in this ratio was attributed to the increase the ACL during the period outpacing the increase in nonaccrual loans.

20 First Financial Bancorp 2024 Annual Report

Provision expense is a product of the Company's ACL model combined with net charge-off activity during the period. Provision expense increased $6.1 million during 2024 as the Company recorded $49.2 million of provision expense during the period compared to $43.1 million in 2023.

ACL - Unfunded Commitments. The ACL on unfunded commitments was $16.9 million as of December 31, 2024 and $18.4 million as of December 31, 2023. First Financial recorded $1.6 million of provision recapture on unfunded commitments for the year ended December 31, 2024 compared to insignificant provision expense for the same period of 2023.

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

First Financial Bancorp 2024 Annual Report 21

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

(1) Nonaccrual loans include nonaccrual TDRs of $10.0 million as of December 31, 2022. (2) Upon adoption of ASU 2022-02 as of January 1, 2023, the TDR model was eliminated. Prospectively, disclosures include modifications of loans to borrower experiencing financial difficulty (FDM). FDMs are excluded from nonperforming, underperforming and classified assets.

22 First Financial Bancorp 2024 Annual Report

DERIVATIVES

First Financial is authorized to use certain derivative instruments including interest rate caps, floors, swaps and foreign exchange contracts to meet the needs of its clients while managing interest rate risk associated with certain transactions.  The Company does not use derivatives for speculative purposes.

First Financial primarily utilizes interest rate swaps, which generally involve the receipt by First Financial of floating rate amounts from swap counterparties in exchange for payments to these counterparties by First Financial of fixed rate amounts received from borrowers. This results in the Company's loan customers receiving fixed rate funding while providing First Financial with a floating rate asset.

In conjunction with participating interests in commercial loans, First Financial periodically enters into risk participation agreements with counterparties whereby First Financial assumes a portion of the credit exposure associated with an interest rate swap on the participated loan in exchange for a fee. Under these agreements, First Financial will make payments to the counterparty if the loan customer defaults on its obligation to perform under the interest rate swap contract with the counterparty.

First Financial enters into IRLCs and forward commitments for the future delivery of mortgage loans to third party investors, which are considered derivatives. When borrowers secure an IRLC with First Financial and the loan is intended to be sold, First Financial will enter into forward commitments for the future delivery of the loans to third party investors in order to hedge against the effect of changes in interest rates impacting IRLCs and loans held for sale.

First Financial enters into foreign exchange derivative contracts for the benefit of commercial customers to hedge their exposure to foreign currency fluctuations. Similar to the hedging of interest rate risk from interest rate derivative contracts, First Financial also enters into foreign exchange contracts with major financial institutions to economically hedge the exposure from client driven foreign exchange activity. The Company has risk limits and internal controls in place to help ensure excessive risk is not being taken in providing this service to customers.

First Financial enters into interest rate collars and floors, which are designated as cash flow hedges. These cash flow hedges are utilized to mitigate interest rate risk on variable-rate commercial loan pools. Changes in the fair value of cash flow hedges included in the assessment of hedge effectiveness are recorded in AOCI and reclassified from AOCI to current period earnings when the hedged item affects earnings.

The structure of the interest rate collars is such that First Financial pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, First Financial receives an incremental amount if the index is below the floor rate. No payments are required if the collar index is between the cap and floor rates.

The structure of First Financial's interest rate floors is such that First Financial receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate.

First Financial Bancorp 2024 Annual Report 23

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

The notional value of the Company's cash flow hedges was $1.0 billion both December 31, 2024 and December 31, 2023, with the $4.9 million change in the fair value recorded in AOCI in the Consolidated Balance Sheet at December 31, 2024 and $3.8 million at December 31, 2023. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is 48 months as of December 31, 2024. It is estimated that $0.7 million will be reclassified from AOCI to interest income during the next 12 months.

See Note 13 – Derivatives in the Notes to Consolidated Financial Statements for additional information regarding First Financial's use of derivative instruments.

DEPOSITS

First Financial solicits deposits by offering commercial and consumer clients a wide variety of transaction and savings accounts, including checking, savings, money-market and time deposits of various maturities and rates.

2024 vs. 2023. First Financial's total deposits increased $968.3 million, or 7.2%, to $14.3 billion as of December 31, 2024 from $13.4 billion at December 31, 2023. This change was driven by a $617.5 million, or 14.3%, increase in savings deposits, a $433.9 million, or 16.0%, increase in time deposits and a $102.5 million, or 3.4%, increase in interest-bearing checking deposits. These changes were partially offset by a $185.6 million, or 5.6%, decrease in noninterest bearing deposits. Total non-time deposit balances were $11.2 billion as of December 31, 2024 and $10.6 billion as of December 31, 2023. The increase in total deposits was largely driven by increased demand for higher yielding deposit products, such as CDs and money market savings, as a result of increased interest rates.

Total average deposits for 2024 increased $883.2 million, or 6.9%, from 2023 as customers migrated to higher yielding deposit products. Average time deposits increased $624.3 million, or 26.0%, and average savings deposits increased $718.5 million, or 18.3%. These increases were partially offset by a $472.3 million, or 13.1%, decrease in average noninterest bearing deposits.

Uninsured deposit balances were $5.9 billion, or 41.0% of total deposits, as of December 31, 2024. The Company reviews

uninsured deposits for concentration risk, and typically evaluates this risk by excluding public funds and intercompany deposits

to arrive at an adjusted uninsured deposit amount. As such, excluding public funds and intercompany accounts, adjusted

uninsured deposits were $3.7 billion, or 26.0% of total deposits, at December 31, 2024.

Table 14 – Uninsured Deposits-Maturities of Time Deposits Greater Than or Equal to $250,000 details the contractual maturity of certain deposits that are not FDIC insured. Time Deposits Greater Than or Equal to $250,000 represented 3.9% and 2.2% of total deposits outstanding at December 31, 2024 and December 31, 2023, respectively.

24 First Financial Bancorp 2024 Annual Report

BORROWINGS

First Financial's short-term borrowings are utilized to manage the Company's normal liquidity needs. These borrowings include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, as well as overnight advances from the FHLB. The Company's long-term borrowings consist of subordinated debt, FRB borrowings, FHLB long-term advances, repurchase agreements utilizing investment securities pledged as collateral and a capital loan from a municipality.

2024 vs. 2023. Borrowed funds were $1.1 billion as of December 31, 2024 compared to $1.3 billion as of December 31, 2023. Borrowings decreased during the period largely as a result of the increase in deposit balances.

Short-term borrowings decreased $182.4 million, or 19.4%, to $755.5 million at December 31, 2024, from $937.8 million at December 31, 2023. First Financial had $625.0 million of short-term borrowings from the FHLB at December 31, 2024 compared to $800.0 million at December 31, 2023. Short-term borrowings included no repurchase agreements as of December 31, 2024 or 2023. Additionally, Company had no federal funds purchased as of December 31, 2024 or 2023.

Total long-term debt was $347.5 million and $344.1 million at December 31, 2024 and 2023, respectively. Outstanding subordinated debt totaled $314.6 million and $314.2 million as of December 31, 2024 and 2023, respectively, and included unamortized valuation and debt issuance costs of $6.1 million and $6.9 million as of December 31, 2024 and 2023, respectively. Additionally, subordinated debt is treated as Tier 1 or Tier 2 capital for regulatory capital purposes until it is within five years of maturity, at which time its eligibility is reduced by 20% each year. First Financial has a $120.0 million of subordinated debt maturing in August 2025 which is no longer eligible as Tier 2 capital.

First Financial utilizes both short-term borrowings and long-term advances from the FHLB as wholesale funding sources. The Company had no FHLB long-term advances as of December 31, 2024 or 2023. First Financial's total remaining borrowing capacity from the FHLB was $1.0 billion at December 31, 2024. For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB. First Financial pledged $6.3 billion of certain eligible residential, commercial and agricultural real estate loans, home equity lines of credit and certain agency CMOs, municipals and CMBS securities as collateral for borrowings from the FHLB as of December 31, 2024.

See Note 12 – Borrowings in the Notes to Consolidated Financial Statements for additional information on First Financial's borrowings and regulatory capital treatment of subordinated debt.

LIQUIDITY

Liquidity management is the process by which First Financial manages the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost. These funding commitments include withdrawals by depositors, credit commitments to borrowers, shareholder dividends, share repurchases, operating expenses and capital expenditures. Liquidity is derived primarily from deposit growth, principal and interest payments on loans and investment securities, maturing loans and investment securities and access to wholesale funding sources.

First Financial’s most stable source of liability-funded liquidity for both long and short-term needs is deposit growth and retention of the core deposit base. In addition to core deposit funding, First Financial also utilizes a variety of other short and long-term funding sources, which include subordinated notes, longer-term advances from the FRB and FHLB and its short-term line of credit. For further information regarding the Company's liability-funded liquidity, see Note 11 - Deposits and Note 12 - Borrowings.

Both First Financial and the Bank received investment grade credit ratings from Kroll Bond Rating Agency, Inc., an independent rating agency. These credit ratings impact the cost and availability of financing to First Financial, and a downgrade to these credit ratings could affect First Financial's or the Bank’s abilities to access the credit markets and potentially increase borrowing costs, negatively impacting financial condition and liquidity. Key factors in maintaining high credit ratings include consistent and diverse earnings, strong credit quality and capital ratios, diverse funding sources and disciplined liquidity monitoring procedures. The ratings of First Financial and the Bank at December 31, 2024 were as follows:

First Financial Bancorp 2024 Annual Report 25

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

First Financial's principal source of asset-funded liquidity is marketable investment securities, particularly those of shorter maturities. AFS securities were 97.6% and 97.4% of the total investment portfolio as of December 31, 2024 and 2023, respectively. The market value of investment securities classified as AFS totaled $3.2 billion and $3.0 billion at December 31, 2024 and 2023, respectively. As of December 31, 2024, $755.3 million of AFS securities were unpledged and there were $892.8 million of securities available to be sold at breakeven. Additionally, $467.5 million of AFS securities have floating rates and could be sold with minimal losses at December 31, 2024.

HTM securities that are maturing within a short period of time can be an additional source of liquidity. As of December 31, 2024 and 2023, the Company had no HTM securities maturing within one year.

In total, First Financial expects $630.5 million of cash flows from its investment portfolio in the next 12 months.

Other sources of liquidity include interest-bearing deposits with other banks. At December 31, 2024, these balances totaled $730.2 million. Additionally, First Financial had unused and available overnight wholesale funding sources of $5.4 billion, or 29.1% of total assets, to satisfy the liquidity needs of the Company.

First Financial has a $40.0 million short-term credit facility with an unaffiliated bank that matures in December 2025. This facility has a variable interest rate and provides First Financial additional liquidity, if needed, for various corporate activities including the repurchase of First Financial common stock and the payment of dividends to shareholders. As of both December 31, 2024 and 2023, First Financial had no outstanding balance. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this facility as of December 31, 2024 and 2023. This credit facility also required First Financial to pledge as collateral the Bank's common stock where the lender is granted a security interest in this collateral.

Certain restrictions exist regarding the Bank's ability to transfer funds to First Financial in the form of cash dividends, loans, other assets or advances and the approval of the Bank's primary federal regulator is required to pay dividends in excess of regulatory limitations. Dividends paid to First Financial from the Bank totaled $200.0 million, $160.0 million and $170.0 million for 2024, 2023 and 2022, respectively. As of December 31, 2024, the Bank had retained earnings of $978.7 million, of which $255.9 million was available for distribution to First Financial without prior regulatory approval. As an additional source of liquidity, First Financial had $214.5 million in cash at the parent company as of December 31, 2024.

Share repurchases may also impact First Financial's liquidity. For further information regarding share repurchases, see the Capital section that follows.

Capital expenditures were $21.1 million for 2024, $24.1 million for 2023 and $13.8 million for 2022. Material commitments for capital expenditures as of December 31, 2024 were $30.4 million. Management believes that sufficient liquidity exists to fund its future capital expenditure commitments.

Management is not aware of any other trends, events or regulatory requirements that, if implemented, are likely to have a material effect on First Financial’s liquidity. For a discussion of liquidity risk management, please see the Market Risk section that follows.

26 First Financial Bancorp 2024 Annual Report

CAPITAL

Risk-Based Capital. First Financial and its subsidiary, First Financial Bank, are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory guidelines. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action.

The Board of Governors of the Federal Reserve System approved Basel III in order to strengthen the regulatory capital framework for all banking organizations, subject to a phase-in period for certain provisions. Basel III established and defined quantitative measures to ensure capital adequacy. These measures require First Financial to maintain minimum amounts and ratios of Common equity Tier 1 capital, Total and Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets (Leverage ratio).

Basel III includes a minimum ratio of Common equity Tier 1 capital to risk-weighted assets of 7.0% and includes a fully phased-in capital conservation buffer of 2.5% of risk-weighted assets. Further, the minimum ratio of Tier 1 capital to risk-weighted assets is 8.5% and all banks are subject to a 4.0% minimum leverage ratio, while the minimum required Total risk-based capital ratio is 10.5%. Failure to maintain the required Common equity Tier 1 capital will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and pay discretionary compensation to its employees.  The capital requirements also provide strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans.

First Financial's Tier 1 capital increased to 12.48% at December 31, 2024 compared to 12.06% at December 31, 2023, while the total capital ratio increased to 14.64% from 14.26% during the same period. The leverage ratio increased to 9.98% at December 31, 2024, compared to 9.70% at December 31, 2023. Likewise, the Company’s tangible common equity ratio increased to 7.73% at December 31, 2024 from 7.17% at December 31, 2023. These increases are primarily a result of the Company's strong earnings and improvement in AOCI due to fewer unrealized losses on the investment securities portfolio during the year.

As of December 31, 2024, First Financial met all capital adequacy requirements to which it was subject. At December 31, 2024 and 2023, regulatory notifications categorized First Financial Bank as well-capitalized under the regulatory framework for prompt corrective action. There have been no conditions or events that management believes has changed the Company’s capital categorization.

For further detail on First Financial's capital ratios at December 31, 2024, see Note 20 – Capital in the Notes to Consolidated Financial Statements.

First Financial Bancorp 2024 Annual Report 27

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

First Financial generally seeks to balance the return of earnings to shareholders through shareholder dividends and share repurchases with capital retention in order to maintain adequate levels of capital and support the Company's growth plans.

Shareholder Dividends. First Financial’s dividend payout ratio, or total dividends paid divided by net income available to common shareholders, was 38.8%, 33.8% and 39.5% for the years 2024, 2023 and 2022, respectively. The dividend payout ratio is continually reviewed by management and the Board of Directors for consistency with First Financial’s overall capital planning activities and compliance with applicable regulatory limitations. In January 2025, the Board of Directors authorized a dividend of $0.24 per common share, payable on March 17, 2025 to all shareholders of record as of March 3, 2025.

Share Repurchases. Effective January 2024, First Financial's Board of Directors approved a new stock repurchase plan (the 2024 Repurchase Plan), replacing the 2022 Repurchase Plan which expired in December of 2023. The 2024 Repurchase Plan continues for two years and authorizes the purchase of up to 5,000,000 shares of the Company's common stock and will expire in December 2025. First Financial did not purchase any shares under the 2024 Repurchase Plan during 2024 or under the 2022 Repurchase Plan during 2023 or 2022.

28 First Financial Bancorp 2024 Annual Report

Shareholders' Equity. Total shareholders’ equity at December 31, 2024 and December 31, 2023 was $2.4 billion and $2.3 billion, respectively. The increase in total equity compared to the prior year was primarily due to an increase in retained earnings during the year, which was the result of the Company's strong earnings.

For further detail, see the Consolidated Statements of Changes in Shareholders’ Equity.

PENSION PLAN

First Financial sponsors a non-contributory defined-benefit pension plan covering substantially all employees. The significant assumptions used in the valuation and accounting for the pension plan include the discount rate, expected return on plan assets and the rate of employee compensation increase. The discount rate was 5.69% and 5.18% as of December 31, 2024 and 2023, respectively. The discount rate assumption was determined based on highly rated corporate bonds, weighted to adjust for their relative size, projected plan cash flows using the annuity substitution method as well as comparisons to external industry surveys. The expected return on plan assets was 7.25% for both 2024 and 2023, and was based on the composition of plan assets, actual returns, economic forecasts and economic trends. The assumed rate of compensation increase was 3.50% and was compared to historical increases for plan participants for reasonableness.

Presented below is the estimated impact on First Financial’s projected benefit obligation and pension expense as of December 31, 2024, assuming shifts in the significant assumptions: