A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. For contracts where First Financial is a lessee, the recipient of the right to control, substantially all of those agreements are for real estate property for branches, ATM locations and office space.

Substantially all of the Company's lessee contracts are classified as operating leases. Under Topic 842, operating lease agreements are required to be recognized on the Consolidated Balance Sheets as an ROU asset and a corresponding lease liability. The Company's right to use an asset over the life of a lease is recorded as an ROU asset in Accrued interest and other assets on the Consolidated Balance Sheets and was $47.3 million and $49.9 million at June 30, 2025 and December 31, 2024, respectively. Certain adjustments to the ROU asset may be required for items such as initial direct costs paid or incentives received. First Financial recorded a $57.0 million and $59.8 million lease liability in Accrued interest and other liabilities on the Consolidated Balance Sheets at June 30, 2025 and December 31, 2024, respectively.

First Financial has operating and finance leases for land, office space and banking centers. These leases are generally for periods of 5 to 30 years with various renewal options. Certain renewal options are included in the measurement of the right-of-use assets and lease liabilities if they are reasonably certain to be exercised. Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. The Company has elected not to recognize short-term leases (terms of one year or less) as lease liabilities and right-of use assets; related expenses are recognized on a straight-line basis over the lease term. Additionally, the Company has elected to apply the risk-free discount rate for leases in which there is no implicit discount rate.

First Financial has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated. First Financial does not have any material sub-lease agreements.


	Three months ended				Six months ended
	June 30,				June 30,
(Dollars in thousands)	2025		2024		2025		2024
Operating lease cost	$	1,995	$	2,034	$	4,008	$	4,078
Finance lease cost:
Amortization of right-of-use assets	25		28		51		55
Interest on lease liabilities	13		15		27		30

Variable lease cost	760		747		1,520		1,537
Total lease cost	$	2,793	$	2,824	$	5,607	$	5,700


(Dollars in thousands)	Operating leases		Finance leases
2025 (remaining six months)	$	4,135	$	75
2026	8,042		152
2027	7,668		155
2028	7,552		159
2029	7,100		160
Thereafter	36,365		807
Total lease payments	70,862		1,508
Less imputed interest	(13,829)		(309)
Total	$	57,033	$	1,199


(Dollars in thousands)	June 30, 2025			December 31, 2024
Operating leases
Operating lease right-of-use assets	$	47,333		$	49,895
Operating lease liabilities	57,033			59,801

Finance leases
Premises and equipment	$	960		$	1,284
Long-term debt	1,199			1,520

Weighted-average remaining lease term
Operating leases	11.3 years			11.5 years
Finance leases	10.6 years			10.0 years

Weighted-average discount rate
Operating leases	3.49		%	3.48		%
Finance leases	4.41		%	3.85		%


	Three months ended				Six months ended
	June 30,				June 30,
(Dollars in thousands)	2025		2024		2025		2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,121	$	2,123	$	4,217	$	4,243
Operating cash flows from finance leases	13		15		27		30
Financing cash flows from finance leases	25		23		48		45
ROU assets obtained in exchange for lease obligations
Operating leases	35		1,585		399		1,759
Finance leases	0		0		(272)		0