FIRST FINANCIAL BANCORP /OH/

FIRST FINANCIAL BANCORP /OH/ 2025 Annual Performance Review: Strategic Growth and Solid Financials

FIRST FINANCIAL BANCORP /OH/ delivered a year of significant strategic expansion and solid financial performance in 2025. The bank successfully navigated a dynamic economic landscape, growing in key areas while maintaining a sharp focus on asset quality and shareholder value. This annual report provides a comprehensive overview for investors and interested parties.

Business Overview Headquartered in Cincinnati, Ohio, FIRST FINANCIAL BANCORP /OH/ operates as a financial holding company. Its primary subsidiary, First Financial Bank, offers a broad range of commercial banking, retail banking, and wealth management services to individuals, businesses, and government entities. The bank's diverse offerings include commercial and industrial loans, commercial real estate loans, residential mortgage loans, consumer loans, various deposit products, and trust and asset management services. First Financial Bank serves customers across Ohio, Indiana, Kentucky, and Michigan.

Financial Performance

2025 Financial Highlights:

• Strong Asset Growth: Total assets grew significantly to approximately $18.5 billion, up from around $17 billion in 2024. Strategic acquisitions and organic loan growth primarily drove this increase.
• Robust Deposit Base: Total deposits reached approximately $15 billion, providing a stable and diversified funding source.
• Net Interest Income (NII): The bank generated strong Net Interest Income of approximately $650 million, reflecting effective interest rate management and loan portfolio expansion.
• Net Income: Net income reached approximately $220 million. A one-time gain from an acquisition significantly boosted this figure.
• Diluted Earnings Per Share (EPS): Diluted EPS was approximately $3.50, demonstrating healthy profitability.
• Key Profitability Ratios: The bank achieved a Return on Average Assets (ROAA) of around 1.2% and a Return on Average Equity (ROAE) of approximately 12%, indicating efficient asset and capital use.
• Efficiency: The bank maintained an efficiency ratio of approximately 58%, demonstrating effective cost management relative to revenue generation.

Strategic Growth & Key Developments:

• Major Acquisition: Westfield Bank: On November 1, 2025, FIRST FINANCIAL BANCORP /OH/ completed the strategic acquisition of Westfield Bank. This pivotal move added a substantial $1.5 billion in assets and expanded the bank's market presence in key regions. The acquisition also generated a $200 million bargain purchase gain, an accounting benefit that positively impacted the bank's net income for the year, reflecting a favorable acquisition price. This acquisition underscores the bank's commitment to growth and market leadership.

Loan Portfolio Performance:

The bank achieved broad-based loan growth across most categories, signaling healthy demand and effective lending strategies:

• Commercial Loans: Grew from $5.03 billion in 2024 to $5.16 billion in 2025.
• Finance Leases: Increased from $1.04 billion to $1.07 billion.
• Construction Loans: Rose from $1.00 billion to $1.02 billion.
• Commercial Real Estate Loans: Both investor and owner-occupied properties saw increases, reaching $2.01 billion (from $1.98 billion) and $1.51 billion (from $1.49 billion), respectively.
• Consumer Lending: Residential, Home Equity, Consumer, and Credit Card Loans also experienced modest increases, contributing to a diversified and growing loan book.

Asset Quality & Risk Management:

Even as the loan portfolio expanded, the bank actively managed its asset quality:

• Slight Increase in Delinquencies: Total loans 30-59 days past due increased from $3.52 million in 2024 to $4.10 million in 2025. Similarly, loans 90+ days past due rose from $3.52 million to $4.00 million. While these represent a very small fraction (less than 0.05%) of the total loan portfolio, the bank closely monitors this trend.
• Increased Loan Modifications: The total value of modified loans, where the bank worked with borrowers facing financial challenges, more than doubled from $10 million in 2024 to $21 million in 2025. This proactive approach helps borrowers stay on track and aims to prevent further deterioration of asset quality.
• Allowance for Credit Losses (ACL): The bank maintained a robust Allowance for Credit Losses of approximately $150 million, representing about 1.5% of total loans. This provides a strong buffer against potential future losses.
• Net Charge-offs (NCOs): Net charge-offs remained low at approximately 0.25% of average loans, indicating effective credit underwriting and collection efforts.

Investment Portfolio:

Beyond loans, the bank strategically grew its investment holdings:

• Held-to-Maturity Securities: Increased from $950 million in 2024 to $1 billion in 2025.
• Available-for-Sale Securities: Grew from $1.9 billion to $2 billion. These investments diversify the bank's assets, provide liquidity, and generate additional income streams.

Deposits & Funding:

• Strong Deposit Growth: Total deposits increased significantly to approximately $15 billion. The Westfield Bank acquisition and organic customer acquisition primarily drove this increase.
• Stable Funding Base: Approximately 30% of deposits were non-interest-bearing, which contributed to a lower overall cost of funds and enhanced profitability.

Financial Health

Capital & Liquidity:

• Robust Capital Ratios: FIRST FINANCIAL BANCORP /OH/ maintained strong capital ratios well above regulatory minimums, with a Common Equity Tier 1 (CET1) ratio of approximately 10.5% and a Total Capital ratio of 13.5%. These ratios demonstrate the bank's financial strength and capacity for future growth and resilience.
• Ample Liquidity: The bank maintained a strong liquidity position. Its diversified deposit base and access to various funding sources supported this position, ensuring operational flexibility and stability.
• Debt and Cash Management: The bank maintained a prudent capital structure, utilizing a mix of deposits and other borrowings, including Federal Home Loan Bank advances and subordinated debt, to fund its operations and growth initiatives. The bank managed cash and cash equivalents to support daily operations and liquidity needs, with balances reflecting operational flows and investment strategies.

Risk Factors Investors should be aware of potential risks, including:

• Interest Rate Fluctuations: Changes in interest rates can impact the bank's net interest income.
• Economic Downturn: A significant economic slowdown could lead to increased loan defaults and reduced demand for banking services.
• Credit Risk: The inherent risk in lending, which the bank manages through robust underwriting and monitoring.
• Regulatory Changes: Evolving regulatory landscapes could impact operations and compliance costs.
• Competition: Intense competition from traditional banks and emerging fintech companies.
• Operational Risk: Risks related to internal processes, people, and systems, including cybersecurity threats.

Future Outlook Looking ahead, FIRST FINANCIAL BANCORP /OH/ focuses on:

• Continued Integration & Growth: Successfully integrating Westfield Bank to leverage its expanded footprint for further market share gains and prudent organic loan growth.
• Operational Efficiency: Implementing initiatives to optimize operations, enhance digital capabilities, and improve overall profitability.
• Disciplined Risk Management: Maintaining a strong focus on managing credit risk, interest rate risk, and adapting to evolving regulatory and cybersecurity challenges.
• Shareholder Value: Delivering sustainable long-term value through strategic execution, disciplined financial management, and responsible capital allocation.

Competitive Position FIRST FINANCIAL BANCORP /OH/ operates in a highly competitive financial services industry. Its competitive position stems from its established market presence in Ohio, Indiana, Kentucky, and Michigan, the breadth of its product and service offerings, customer service quality, pricing strategies, and technological capabilities. The bank competes with national, regional, and community banks, as well as credit unions and non-bank financial service providers. The bank differentiates itself in its markets by leveraging its community-focused approach, local decision-making, and strong customer relationships.

In summary, 2025 was a pivotal year for FIRST FINANCIAL BANCORP /OH/, marked by a significant strategic acquisition that bolstered its asset base and market position. Coupled with solid financial performance, disciplined asset quality management, and robust capital, the bank appears well-positioned for continued growth and value creation for its shareholders.