Acquisitions

6 Months Ended

Jun. 30, 2026

Acquisitions

Acquisitions

12.   Acquisitions

On March 1, 2026, the Corporation completed its acquisition of CedarStone Financial, Inc. Therefore, the results of CedarStone have been included in the results of operations beginning on March 1, 2026. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Interim Merger (the “Effective Time”), First Financial paid $19.12 per share in cash for each share of CedarStone’s common stock outstanding. The aggregate value of the transaction was approximately $25.0 million. Acquisition-related costs of $1.5 million were included in the Corporation’s income statement for the year-to-date period ended December 31, 2025. Additionally, the Corporation included acquisition-related costs of $1.5 million in the Corporation’s income statement for the six months ending June 30, 2026.

The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, which resulted in a bargain purchase gain of $33 thousand.

			Measurement
	As Initially		Period
(Dollar amounts in thousands)	Reported		Adjustments		As Adjusted
Consideration
Cash consideration	$	25,003	$	—	$	25,003
Fair value of total consideration transferred	$	25,003	$	—	$	25,003
Assets acquired
Cash	$	13,224	$	(1,011)	$	12,213
Investment securities available-for-sale		53,509		(97)		53,412
Federal funds sold		—		—		—
Bank owned life insurance		4,481		—		4,481
Federal Home Loan Bank stock		1,215		—		1,215
Loans		286,102		—		286,102
Premises and equipment		11,106		—		11,106
Core deposit intangibles		5,317		—		5,317
Other assets		773		153		926
Total assets acquired		375,727		(955)		374,772
Liabilities assumed
Deposits		313,536		—		313,536
Short-term borrowings		20,800		—		20,800
Other borrowings		13,627		—		13,627
Other liabilities		2,045		(272)		1,773
Total liabilities assumed		350,008		(272)		349,736
Net identifiable assets		25,719		(683)		25,036
Bargain purchase gain	$	(716)	$	683	$	(33)

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

The fair value of purchased financial assets with credit deterioration was $3.0 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $3.7 million. The Corporation estimates, on the date of acquisition, that $695 thousand of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

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

	Six Months Ended June 30,
(Dollar amounts in thousands, except per share data)	2026		2025
Net interest income	$	119,249	$	108,730
Net income	$	42,125	$	37,779
Basic and diluted earnings per share	$	3.54	$	3.19

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

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

			Measurement
	As Initially		Period
(Dollar amounts in thousands)	Reported		Adjustments		As Adjusted
Consideration
Cash consideration	$	73,400	$	—	$	73,400
Fair value of total consideration transferred	$	73,400	$	—	$	73,400
Assets acquired
Cash	$	101,553	$	—	$	101,553
Investment securities available-for-sale		77,350		—		77,350
Federal funds sold		—		—		—
Bank owned life insurance		12,816		—		12,816
Federal Home Loan Bank stock		726		—		726
Loans		467,997		(2,731)		465,266
Premises and equipment		14,231		—		14,231
Core deposit intangibles		19,788		—		19,788
Other assets		6,184		—		6,184
Total assets acquired		700,645		(2,731)		697,914
Liabilities assumed
Deposits		622,937		—		622,937
FHLB advances		1,719		—		1,719
Other liabilities		12,899		(1,797)		11,102
Total liabilities assumed		637,555		(1,797)		635,758
Net identifiable assets		63,090		(934)		62,156
Goodwill	$	10,310	$	934	$	11,244

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

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

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2023. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, interest expense on

deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.

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