First Financial (THFF) risk factors, FY2025 10-K

Risks Related to Economic and Market Conditions

1. 01Economic conditions have affected and could adversely affect our revenue and profits
2. 02Changes in interest rates could adversely affect the Corporation’s results of operations and financial condition41% rewritten
3. 03Conversely, if the interest rates paid on deposits and other interest-bearing liabilities increase at a faster rate than the interest rates received on loans and other interest-earning assets, our net interest income, and, therefore, our earnings, could be adversely affectedNew
4. 04Continued elevated levels of inflation could adversely impact our business and results of operations
5. 05Geographic concentration of the Corporation’s markets makes our business highly susceptible to local economic conditions and a downturn in local economic conditions may adversely affect our business
6. 06Labor shortages and the loss of one or more of those key personnel may materially and adversely affect our business
7. 07Unrelated bank failures, other issues of unrelated banks, and decreased depositor confidence in depository institutions could negatively impact our stock price and we may experience a material adverse effect on our financial condition and results of operations
8. 08Terrorist attacks, threats, or actual war, natural disasters, global climate change, pandemics, other catastrophic events, trade policies, civil unrest, protests, and other global and domestic conflicts may impact all aspects of our operations, revenues, costs, and stock price in unpredictable ways

Risks Related to Our Business

1. 09The Corporation operates in a highly competitive industry and market, and our business will suffer if we are unable to compete effectively36% rewritten
2. 10A lack of liquidity could affect our operations and jeopardize our financial condition
3. 11When 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
4. 12The Corporation has significant exposure to risks associated with commercial and commercial real estate loans
5. 13The 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 adverse effect on our business, results of operations, and financial condition
6. 14Decreased demand from secondary market purchasers of the Corporation’s long-term fixed residential mortgages could adversely affect our business, liquidity, results of operations, and financial condition
7. 15The Corporation’s accounting estimates and risk management processes rely on analytical and forecasting models, which, if inadequate, may result in a material adverse effect on our business, financial condition, or results of operation47% rewritten
8. 16We are a community bank and our ability to maintain our reputation is critical to the success of our business
9. 17Our operational systems and networks are subject to an increasing risk of continually evolving cybersecurity or other technological risks, which could result in a loss of customer business, financial liability, regulatory penalties, damage to our reputation, or the disclosure of confidential information
10. 18We rely on external vendors, which could expose the Corporation to additional operational risks43% rewritten
11. 19New lines of business or new products and services may subject the Corporation to additional risks
12. 20The financial services industry is characterized by rapid technological change, and if we fail to keep pace, our business may suffer26% rewritten
13. 21The increased prevalence, use and development of AI may subject the Corporation to increased regulatory risk, reputational risk, and may have material adverse effects on the Corporation’s business, financial condition, and results of operationsNew
14. 22The Corporation’s implementation of AI tools may subject the Corporation to increased regulatory risk, reputational risk and may have material adverse effects on the Corporation’s business, financial condition, and results of operationsNew
15. 23The Corporation’s controls and procedures may fail or be circumvented, and the Corporation’s methods of reducing risk exposure may not be effective
16. 24The Corporation may foreclose on collateral property and would be subject to the increased costs associated with ownership of real property, resulting in reduced revenues and earnings
17. 25Accounting policies require management to make estimate about uncertain mattersNew
18. 26Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and conditionNew
19. 27The Corporation’s earnings may be adversely impacted due to environmental liabilities associated with lending activities
20. 28The Corporation may be adversely affected by the soundness of other financial institutions
21. 29The Corporation may become subject to claims and litigation pertaining to intellectual property
22. 30Changes in consumer use of banks and changes in consumer spending and savings habits could adversely affect the Corporation’s financial results29% rewritten
23. 31Potential acquisitions may disrupt the Corporation’s business and dilute shareholder value
24. 32Future growth or operating results may require the Corporation to raise additional capital, but that capital may not be available or it may be dilutive
25. 33The value of the Corporation’s goodwill and other intangible assets may decline in the future
26. 34The Corporation relies on dividends from its subsidiaries for most of its revenue

Risks Related to the Legal and Regulatory Environment

1. 35We operate in a highly regulated environment and the regulatory framework to which we are subject may adversely affect our results of operations39% rewritten
2. 36Anticipated changes in leadership at the Federal Reserve may impact regulations and government policy applicable to usNew
3. 37Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, regulatory structure, financial condition, and/or results of operations
4. 38Changes in federal, local, or state tax laws could negatively impact our financial conditionNew
5. 39The Basel III capital rules may require us to retain higher capital levels, impacting our ability to pay dividends, repurchase our stock, or pay discretionary bonuses
6. 40We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
7. 41Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition
8. 42We have risk related to legal proceedings

Risks Related to the Corporation’s Common Stock

1. 43The Corporation may not be able to pay dividends in the future in accordance with past practice
2. 44The price of the Corporation’s common stock may be volatile, which may result in losses for investors
3. 45Future capital needs could result in dilution of shareholder investment
4. 46Anti-takeover laws and charter provisions may adversely affect the value of our common stock
5. 47An investment in the Corporation’s common stock is not an insured deposit