What the changes say
- Classified assets rose $11.4 million to $235.5 million, including $20.4 million of substandard-or-worse loans from Westfield.
- AI, generative AI, LLMs and AI agents create newly emphasized cybersecurity, expertise, information-exposure and regulatory risks.
- The filing removes many standalone macroeconomic, interest-rate, real-estate, credit, fair-value and outsourcing risk discussions.
What changed since the prior 10-K
New
- NewRisks Related to Economic and Market Conditions
Loan defaults and foreclosures are unavoidable in the banking industry, and we try to limit our exposure to this risk by carefully adhering to our credit risk standards and actively and carefully monitoring our extensions of credit throughout the lifespan of a loan
Classified assets increased 5.1% to $235.5 million, with $20.4 million of substandard-or-worse loans acquired in Westfield, raising default, foreclosure and servicing-loss concerns.
- NewRisks Related to Our Business
The fraudulent activity and cybersecurity risks can result in financial liability and litigation risk to us and/or our customers, as well as harm to our reputation and negative impacts on our financial condition, results of our operations, business and prospects
Greater use of AI, generative AI, LLMs and AI agents by customers, vendors and competitors may increase cyber, information-exposure, expertise and regulatory risks.
Dropped
- DroppedRisks Related to Economic and Market Conditions
Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us
Economic, inflation, employment, tariff, interest-rate and governmental-policy conditions affecting deposits, lending, repayment and collateral values.
- DroppedRisks Related to Economic and Market Conditions
Changes in market interest rates or financial markets could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity
Interest-rate and financial-market movements affecting net interest income, expenses, asset values, capital and liquidity costs.
- DroppedRisks Related to Economic and Market Conditions
The Presidential Administration’s regulatory agenda could result in substantial impact to our regulatory compliance procedures and operations
Potential changes in the Presidential Administration’s banking regulatory reform, supervision, examination and enforcement priorities.
- DroppedRisks Related to Economic and Market Conditions
Local economic factors may adversely affect our business and the results of our operations
Economic weakness in Indiana, Ohio, Kentucky and Illinois, where geographic concentration affects community-banking results.
- DroppedRisks Related to Economic and Market Conditions
Our loan portfolio and investments in mortgage-backed securities consist of a significant number of loans secured by real estate and other assets, the value of which can be affected by national and local market conditions
Declining real-estate collateral values supporting loans and mortgage-backed securities under national or local market conditions.
- DroppedRisks Related to Economic and Market Conditions
Weakness in the secondary market for residential mortgage loans could affect our financial condition and results of operations
Disruptions or reduced liquidity in the secondary market for residential mortgage loans.
- DroppedRisks Related to Economic and Market Conditions
Our financial instruments carried at fair value expose us to certain market risks
Market-value changes in available-for-sale and trading securities, particularly when interest rates rise.
- DroppedRisks Related to Our Business
When we loan money, commit to loan money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, or the risk of loss if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts
Borrower defaults or counterparty failures on loans, commitments, letters of credit and other contracts.
- DroppedRisks Related to Our Business
The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an effect on our business, results of operations and financial condition
Incomplete or inaccurate borrower and counterparty information used in credit and transaction decisions.
- DroppedRisks Related to Our Business
Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio
Allowance for credit losses potentially proving insufficient for expected loan-portfolio losses under CECL.
- DroppedRisks Related to Our Business
In August 2019, First Financial acquired Bannockburn, which engages in various capital markets activities as part of its matched book business encompassing foreign exchange, interest rate, and commodity hedging transactions
Bannockburn concentration and market risks from large clients and foreign exchange, interest-rate and commodity transactions.
- DroppedRisks Related to Our Business
We rely on other companies to provide key components of our business infrastructure, creating risks of failures or disruptions by such companies and cybersecurity incidents which may involve our customers’ information
Failures, disruptions or cybersecurity incidents involving third parties providing technology, processing, connectivity, data storage and sales support.
- DroppedRisks Related to Our Business
Unauthorized use or disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other breaches in the security of our systems could harm our business
- DroppedRisks Related to Our Business
Our liquidity is dependent upon our ability to receive dividends from our subsidiaries, which accounts for most of our revenue and could affect our ability to pay dividends, and we may be unable to provide liquidity from other sources
- DroppedRisks Related to Our Business
Clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding
- DroppedRisks Related to Our Business
Our financial condition, results of operations, and stock price may be negatively impacted by unrelated bank failures and negative depositor and/or investor confidence in depository institutions
- DroppedRisks Related to Our Business
Disruptions in our ability to access capital markets on desirable terms may affect our capital resources, liquidity and business
- DroppedRisks Related to Our Business
Projections for new business initiatives and strategies may prove inaccurate
- DroppedRisks Related to Our Business
We may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations and financial condition
- DroppedRisks Related to Our Business
Competition in the financial services industry is intense and could result in our losing business and/or experiencing reduced margins
- DroppedRisks Related to Our Business
Maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services
- DroppedRisks Related to Our Business
Failure to keep pace or successfully adopt new technologies could adversely affect the results of our operations
- DroppedRisks Related to Our Business
We may undertake additional costs to implement new technologies. If we are not successful in implementing the new technologies, or otherwise do not realize the intended efficiency and cost benefits of the implementation of new technologies, we may be unable to recover the costs incurred during the implementation
- DroppedRisks Related to Our Business
Another increasingly competitive factor in the financial services industry is the competition to attract and retain talented employees across many of our business and support areas, many of whom are key to executing our strategic plan and to maintaining relationships with the customers and communities they serve
- DroppedRisks Related to Our Business
Our wealth management business subjects us to a variety of investment and market risks
- DroppedRisks Related to Our Business
Negative public opinion could damage our reputation and impact business operations and revenues
- DroppedRisks Related to Our Business
We may not pay dividends on our common shares
- DroppedRisks Related to Our Business
Significant or sustained declines in our current market capitalization could impact the carrying value of our goodwill
- DroppedRisks Related to Our Business
A reduction in our credit rating could affect us or the holders of our securities
- DroppedRisks Related to Our Business
Potential acquisitions may disrupt our business and dilute shareholder value, we may not be able to successfully consummate or integrate such acquisitions, and we may not realize the anticipated benefits contemplated when pursuing a potential acquisition
- DroppedRisks Related to Our Business
Accounting policies and processes are fundamental to how we record and report our financial condition and results of operations. Management must exercise judgment in selecting and applying many of these accounting policies and processes so they comply with U.S. GAAP
- DroppedRisks Related to Our Business
Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition
- DroppedRisks Related to Our Business
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
- DroppedRisks Related to Our Business
Our revenues derived from investment securities may be volatile and subject to a variety of risks
- DroppedRisks Related to the Legal and Regulatory Environment
We operate in a highly regulated industry and compliance with regulations and/or regulatory actions could impact the results of our operations
- DroppedRisks Related to the Legal and Regulatory Environment
Regulations related to information security, data protection and data privacy could expose us to regulatory risks, civil liabilities and increase our costs
- DroppedRisks Related to the Legal and Regulatory Environment
The regulations under which we operate are subject to change, which could result in restrictions and requirements that could detrimentally impact the results of our operations
- DroppedRisks Related to the Legal and Regulatory Environment
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks
- DroppedGeneral Risk Factors
Weaknesses of other financial institutions could affect us
- DroppedGeneral Risk Factors
The fiscal and monetary policies of the United States government and its agencies could have an effect on our earnings
- DroppedGeneral Risk Factors
Changes in tax laws could affect our performance
- DroppedGeneral Risk Factors
Adverse external events outside of our control, such as natural disasters, acts of war or terrorism, new public health issues, could impact our business operations
Reworded
- 40% rewrittenRisks Related to Our Business
We rely on our systems, employees and certain counterparties, and certain failures or actions could affect our operations
No substantive change is shown; the operational-risk discussion is identical, covering fraud, errors, system failures and third-party vendors.
Risk factor headings as read
Headings as the filing states them, in filing order.
Risks Related to Economic and Market Conditions
- 01Loan defaults and foreclosures are unavoidable in the banking industry, and we try to limit our exposure to this risk by carefully adhering to our credit risk standards and actively and carefully monitoring our extensions of credit throughout the lifespan of a loanNew
Risks Related to Our Business
- 02We rely on our systems, employees and certain counterparties, and certain failures or actions could affect our operations40% rewritten
- 03The fraudulent activity and cybersecurity risks can result in financial liability and litigation risk to us and/or our customers, as well as harm to our reputation and negative impacts on our financial condition, results of our operations, business and prospectsNew
Other First Financial Bancorp 10-Ks
- FY2024 10-K risk factors46 risks
First Financial Bancorp faces significant risks from market interest rate fluctuations and localized economic conditions in Indiana, Ohio, Kentucky, and Illinois. The bank is heavily exposed to real estate collateral values and credit losses within its loan portfolio. Regulatory compliance burdens and cybersecurity threats across outsourced IT infrastructure present ongoing operational concerns.
Filed Feb 20, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.