FFIN

MKT CAP $4.3BP/E 16.2DIV YIELD 2.60%FCF YIELD 7.48%REV TTM —NET INCOME $269M +9.5%NET CASH —52W 28.59 – 36.50SEC XBRL · TTM TO Invalid Date

How FFIN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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New in FY2025

The following discussion and analysis of the major elements of our consolidated balance sheets as of December 31, 2025 and 2024, and consolidated statements of earnings for the years 2023 through 2025 should be read in conjunction with our consolidated financial statements, accompanying notes, and selected financial data presented elsewhere in this Form 10-K.
We deem our most critical accounting policies to be (1) our allowance for credit losses (“ACL”) and our provision for credit losses and (2) our valuation of financial instruments.
It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the ACL and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types.
Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.
A large driver to the ACL is the overall credit quality of the underlying credits.
Deterioration or improvement in credit quality could have a significant impact on the overall level of ACL.
Stock Repurchase On July 22, 2025, the Company’s Board of Directors extended the authorization to repurchase up to 5,000,000 common shares through July 31, 2026.
There have been no repurchases during 2024 or 2025.
Other Recently Issued and Effective Authoritative Accounting Guidance ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires entities to disclose more detailed information in their reconciliation of their statutory tax rate to their effective tax rate.
ASU 2023-09 became effective for our annual financial statements in 2025 and did not have a significant effect on the financial statements.
ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption.
The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization.
Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.
ASU 2024-03 will be effective, on a prospective basis, for our 2027 annual report and interim periods thereafter.
The Company is evaluating the impact of this ASU and does not believe it will have a significant impact on the Company's financial statements.
ASU 2025-08, "Financial Instruments - Credit Losses (Topic 326): Purchased Loans.” ASU 2025-08 amends the guidance on the accounting for certain purchased loans.
The new guidance makes significant changes to the accounting for certain acquired seasoned loans subject to the current expected credit loss model.
The amendments in ASU 2025-08 apply prospectively and will be effective for the Company beginning January 1, 2027, with early adoption permitted, and is not expected to have a significant impact on the Company’s financial statements.
ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements.” ASU 2025-11 is intended to provide clarity about the current interim reporting requirements, provides a list of the interim disclosures required by all other Codification topics and establishes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.
ASC 2025-11 will be effective for the Company beginning January 1, 2028, with early adoption permitted, and is not expected to have a significant impact on the Company’s financial statements.
Selected Financial Data The selected financial data presented below as of and for the years ended December 31, 2025, 2024, 2023, 2022, and 2021, have been derived from our audited consolidated financial statements.
Year Ended December 31, 2025 2024 2023 2022 2021 (dollars in thousands, except per share data) Summary Income Statement Information: Interest income $ 702,480 $ 628,918 $ 528,070 $ 432,854 $ 376,405 Interest expense 201,593 202,177 144,261 31,440 6,042 Net interest income 500,887 426,741 383,809 401,414 370,363 Provision for credit losses 28,609 13,821 10,631 17,427 (1,139 ) Noninterest income 130,716 123,989 108,003 131,665 142,176 Noninterest expense 293,391 265,063 237,882 234,778 241,708 Earnings before income taxes 309,603 271,846 243,299 280,874 271,970 Income tax expense 56,024 48,335 44,322 46,399 44,408 Net earnings $ 253,579 $ 223,511 $ 198,977 $ 234,475 $ 227,562 Per Share Data: Earnings per share, basic $ 1.77 $ 1.56 $ 1.39 $ 1.64 $ 1.60 Earnings per share, diluted 1.77 1.56 1.39 1.64 1.59 Cash dividends declared 0.75 0.72 0.71 0.66 0.58 Book value at period-end 13.39 11.24 10.50 8.87 12.34 Earnings performance ratios: Return on average assets 1.76 % 1.68 % 1.55 % 1.76 % 1.89 % Return on average equity 14.59 14.51 14.99 16.72 13.31 Dividend payout ratio 42.38 46.06 50.96 40.18 36.30 Summary Balance Sheet Data (Period-end): Securities $ 5,514,113 $ 4,617,759 $ 4,732,762 $ 5,474,359 $ 6,573,179 Loans, held-for-investment 8,158,276 7,913,098 7,148,791 6,441,868 5,388,972 Total assets 15,446,476 13,979,418 13,105,594 12,974,066 13,102,461 Deposits 13,345,529 12,099,174 11,138,300 11,005,507 10,566,488 Total liabilities 13,529,159 12,372,858 11,606,694 11,708,329 11,343,237 Total shareholders’ equity 1,917,317 1,606,560 1,498,900 1,265,737 1,759,224 Asset quality ratios: Allowance for credit losses/period-end loans held-for-investment 1.29 % 1.24 % 1.24 % 1.18 % 1.18 % Nonperforming assets/period-end loans held- for-investment plus foreclosed assets 0.69 0.80 0.49 0.38 0.63 Net charge offs (recoveries)/average loans 0.29 0.05 0.03 (0.01 ) 0.02 Capital ratios: Average shareholders’ equity/average assets 12.08 % 11.56 % 10.32 % 10.55 % 14.20 % Leverage ratio (1) 12.55 12.49 12.06 10.96 11.13 Tier 1 risk-based capital (2) 19.99 18.83 18.50 18.22 19.35 Common equity tier 1 capital (3) 19.99 18.83 18.50 18.22 19.35 Total risk-based capital (4) 21.17 20.00 19.62 19.29 20.34 (1) Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by fourth quarter average assets less intangible assets.
Net earnings for 2025 were $253.58 million compared to net earnings of $223.51 million for 2024, reflecting an increase of $30.07 million, or 13.45%.
The increase in earnings for 2025 over 2024 was primarily attributable to the overall growth in net interest income driven by strong growth in the Company's interest earning assets.
Additionally, with the strong growth in deposits in 2025 combined with the continued proceeds resulting from maturities and paydowns of the Company's lower yielding investment portfolio, we were able to redeploy those funds into higher-yielding organic loans and investments during 2025.
Furthermore, trust fee income increased $4.41 million, or 9.30%, when compared to 2024.
Net earnings for 2024 were $223.51 million compared to $198.98 million for 2023, reflecting an increase of $24.53 million, or 12.33%.
Additionally, trust fee income increased $6.99 million when compared to 2023 and there was no loss on sales of AFS securities in 2024 when compared to a $7.12 million loss in 2023.
On a diluted net earnings per share basis, net earnings were $1.77 for 2025, as compared to $1.56 for 2024 and $1.39 for 2023.
The return on average assets was 1.76% for 2025, as compared to 1.68% for 2024 and 1.55% for 2023.
The return on average equity was 14.59% for 2025, as compared to 14.51% for 2024 and to 14.99% for 2023.
Tax-equivalent net interest income was $513.63 million in 2025, as compared to $437.19 million in 2024, and $395.36 million in 2023.
Average earning assets were $13.55 billion in 2025, as compared to $12.48 billion in 2024 and $12.00 billion in 2023.
The increase in tax-equivalent net interest income in 2025 compared to 2024 was largely attributable to the change in the mix of interest earning assets primarily derived from continued loan growth combined with increase in volume and yield on the Company's taxable and tax-exempt securities.
The increase of $1.06 billion in average earning assets in 2025 when compared to 2024 was primarily a result of an increase in loans of $607.02 million, an increase in taxable securities of $265.67 million, and an increase in tax-exempt securities of $109.59 million.
Average interest-bearing liabilities were $9.18 billion in 2025, as compared to $8.39 billion in 2024 and $7.84 billion in 2023.
The yield on earning assets increased 16 basis points in 2025 when compared to 2024 while the rate paid on interest-bearing liabilities decreased 21 basis points.
Changes in Interest Income and Interest Expense (in thousands): 2025 Compared to 2024 2024 Compared to 2023 Change Attributable to Total Change Attributable to Total Volume Rate Change Volume Rate Change Short-term investments $ 4,262 $ (3,271 ) $ $ 7,068 $ $ 7,427 Taxable investment securities 6,592 17,828 24,420 (4,821 ) 6,522 1,701 Tax-exempt investment securities (1) 3,018 5,631 8,649 (5,059 ) (1,632 ) (6,691 ) Loans (1) (2) 40,798 41,796 44,007 53,299 97,306 Interest income 54,670 21,186 75,856 41,195 58,548 99,743 Interest-bearing deposits 21,901 (17,206 ) 4,695 16,996 52,975 69,971 Repurchase agreements (3,770 ) (838 ) (4,608 ) (11,223 ) (10,671 ) Borrowings (354 ) (319 ) (673 ) (1,066 ) (317 ) (1,383 ) Interest expense 17,777 (18,363 ) (586 ) 4,707 53,210 57,917 Net interest income $ 36,893 $ 39,549 $ 76,442 $ 36,488 $ 5,338 $ 41,826 (1) Computed on a tax-equivalent basis assuming a marginal tax rate of 21%.
The net interest margin for 2025 was 3.79% which was an increase of 29 basis points from 2024.
The net interest margin in 2024 was 3.50%, an increase of 21 basis points from 2023.

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Gone since FY2024

The following discussion and analysis of the major elements of our consolidated balance sheets as of December 31, 2024 and 2023, and consolidated statements of earnings for the years 2022 through 2024 should be read in conjunction with our consolidated financial statements, accompanying notes, and selected financial data presented elsewhere in this Form 10-K.
We deem our most critical accounting policies to be (1) our allowance for credit losses and our provision for credit losses and (2) our valuation of financial instruments.
Stock Repurchase On July 23, 2024, the Company's Board of Directors extended the authorization to repurchase up to 5,000,000 common shares through July 31, 2025.
Under the previous authorization effective through July 31, 2024, 244,559 shares were repurchased and retired (during the months of June and July 2022) at an average price of $ 38.61 per share.
Additionally, 101,337 shares (all during September 2023) were repurchased and retired at an average price of $26.99 per share.
Other Recently Issued and Effective Authoritative Accounting Guidance ASU 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848." ASU 2022-06 extends the period of time preparers can utilize the reference rate reform relief guidance provided by ASU 2020-04 and ASU 2021-01, which are discussed above.
ASU 2022-06, which was effective upon issuance, defers the sunset date of this prior guidance from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief guidance in Topic 848.
The adoption of ASU 2022-06 did not have a significant impact on our financial statements.
ASU 2023-02, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures.
ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits.
Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures.
The adoption of ASU 2023-02 is not expected to have a significant impact on the financial statements and was not early adopted.
ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU 2023-07 expands segment disclosure requirements for public entities to require disclosure of significant expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually.
ASU 2023-07 became effective for our annual financial statements in 2024 and will be effective for interim periods within fiscal years in 2025.
The adoption of ASU 2023-07 did not have a significant impact on our financial statements.
ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires entities to disclose more detailed information in their reconciliation of their statutory tax rate to their effective tax rate.
PBEs will be required to adopt the new requirements in annual reporting periods beginning after December 15, 2024, and interim periods beginning after December 15, 2025.
The adoption of ASU 2023-09 is not expected to have a significant impact on our financial statements.
Selected Financial Data The selected financial data presented below as of and for the years ended December 31, 2024, 2023, 2022, 2021, and 2020, have been derived from our audited consolidated financial statements.
Year Ended December 31, 2024 2023 2022 2021 2020 (dollars in thousands, except per share data) Summary Income Statement Information: Interest income $ 628,918 $ 528,070 $ 432,854 $ 376,405 $ 364,128 Interest expense 202,177 144,261 31,440 6,042 14,243 Net interest income 426,741 383,809 401,414 370,363 349,885 Provision for credit losses 13,821 10,631 17,427 (1,139 ) 19,517 Noninterest income 123,989 108,003 131,665 142,176 139,935 Noninterest expense 265,063 237,882 234,778 241,708 227,938 Earnings before income taxes 271,846 243,299 280,874 271,970 242,365 Income tax expense 48,335 44,322 46,399 44,408 40,331 Net earnings $ 223,511 $ 198,977 $ 234,475 $ 227,562 $ 202,034 Per Share Data: Earnings per share, basic $ 1.56 $ 1.39 $ 1.64 $ 1.60 $ 1.42 Earnings per share, diluted 1.56 1.39 1.64 1.59 1.42 Cash dividends declared 0.72 0.71 0.66 0.58 0.51 Book value at period-end 11.24 10.50 8.87 12.34 11.80 Earnings performance ratios: Return on average assets 1.68 % 1.55 % 1.76 % 1.89 % 1.98 % Return on average equity 14.51 14.99 16.72 13.31 12.93 Dividend payout ratio 46.06 50.96 40.18 36.30 35.88 Summary Balance Sheet Data (Period-end): Securities $ 4,617,759 $ 4,732,762 $ 5,474,359 $ 6,573,179 $ 4,393,029 Loans, held-for-investment 7,913,098 7,148,791 6,441,868 5,388,972 5,171,033 Total assets 13,979,418 13,105,594 12,974,066 13,102,461 10,904,500 Deposits 12,099,174 11,138,300 11,005,507 10,566,488 8,675,817 Total liabilities 12,372,858 11,606,694 11,708,329 11,343,237 9,226,310 Total shareholders’ equity 1,606,560 1,498,900 1,265,737 1,759,224 1,678,190 Asset quality ratios: Allowance for credit losses/period-end loans held-for-investment 1.24 % 1.24 % 1.18 % 1.18 % 1.29 % Nonperforming assets/period-end loans held- for-investment plus foreclosed assets 0.80 0.49 0.38 0.63 0.83 Net charge offs (recoveries)/average loans 0.05 0.03 (0.01 ) 0.02 0.06 Capital ratios: Average shareholders’ equity/average assets 11.56 % 10.32 % 10.55 % 14.20 % 15.32 % Leverage ratio (1) 12.49 12.06 10.96 11.13 11.86 Tier 1 risk-based capital (2) 18.83 18.50 18.22 19.35 20.79 Common equity tier 1 capital (3) 18.83 18.50 18.22 19.35 20.79 Total risk-based capital (4) 20.00 19.62 19.29 20.34 22.03 (1) Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by fourth quarter average assets less intangible assets.
Net earnings for 2024 were $223.51 million compared to net earnings of $198.98 million for 2023, reflecting an increase of $24.53 million, or 12.33%.
Additionally, trust fee income increased $6.99 million when compared to 2023 and there were no losses on sales of AFS securities in 2024 when compared to $7.12 million losses in 2023.
Net earnings for 2023 were $198.98 million compared to $234.48 million for 2022.
Included in earnings for the year ended December 31, 2023, when compared to the year ended December 31, 2022, were (i) a decrease of $17.61 million in net interest income, (ii) a decrease in debit card revenues of $8.56 million, (iii) a decrease in mortgage revenues of $7.15 million, (iv) a $9.26 million decline in gains on sales of securities, and (v) an increase of $4.04 million in FDIC insurance premiums, which includes a $1.75 million special assessment.
Offsetting these reductions to earnings were (i) a decline of $6.80 million in the provision for credit losses and (ii) a decline of $5.30 million in incentive and profit sharing expenses.
On a diluted net earnings per share basis, net earnings were $1.56 for 2024, as compared to $1.39 for 2023 and $1.64 for 2022.
The return on average assets was 1.68% for 2024, as compared to 1.55% for 2023 and 1.76% for 2022.
The return on average equity was 14.51% for 2024, as compared to 14.99% for 2023 and to 16.72% for 2022.
Tax-equivalent net interest income was $437.19 million in 2024, as compared to $395.36 million in 2023, and $416.84 million in 2022.
Average earning assets were $12.48 billion in 2024, as compared to $12.00 billion in 2023 and $12.46 billion in 2022.
The decrease in tax-equivalent net interest income in 2023 compared to 2022 was largely attributable to the increases in the rates paid on deposits and borrowings and a change in the mix of interest earning assets.
The decrease of $461.72 million in average earning assets in 2023 when compared to 2022 was primarily a result of a decrease in taxable securities of $531.39 million and tax-exempt securities of $689.37 million offset by an increase in loans of $860.76 million when compared to 2022.
Average interest-bearing liabilities were $8.39 billion in 2024, as compared to $7.84 billion in 2023 and $7.76 billion in 2022.
The yield on earning assets increased 90 basis points in 2023 when compared to 2022 while the rate paid on interest-bearing liabilities increased 143 basis points.
Changes in Interest Income and Interest Expense (in thousands): 2024 Compared to 2023 2023 Compared to 2022 Change Attributable to Total Change Attributable to Total Volume Rate Change Volume Rate Change Short-term investments $ 7,068 $ $ 7,427 $ (1,698 ) $ 4,014 $ 2,316 Taxable investment securities (4,821 ) 6,522 1,701 (10,401 ) 11,402 1,001 Tax-exempt investment securities (1) (5,059 ) (1,632 ) (6,691 ) (20,544 ) (1,784 ) (22,328 ) Loans (1) (2) 44,007 53,299 97,306 43,232 67,123 110,355 Interest income 41,195 58,548 99,743 10,589 80,755 91,344 Interest-bearing deposits 16,996 52,975 69,971 97,707 98,584 Repurchase agreements (11,223 ) (10,671 ) (324 ) 14,401 14,077 Borrowings (1,066 ) (317 ) (1,383 ) (1,142 ) 1,301 Interest expense 4,707 53,210 57,917 (589 ) 113,409 112,820 Net interest income $ 36,488 $ 5,338 $ 41,826 $ 11,178 $ (32,654 ) $ (21,476 ) (1) Computed on a tax-equivalent basis assuming a marginal tax rate of 21%.
The net interest margin for 2024 was 3.50% which was a increase of 21 basis points from 2023.
The net interest margin in 2023 was 3.29%, a decrease of five basis points from 2022.
The net interest margin has expanded during the past year primarily due to (i) a shift in asset mix from investment securities to higher yielding loans, and (ii) increased loan yields due to new and renewing loans and variable rate loans repricing higher.
The Federal Reserve began aggressively increasing interest rates in March 2022 and continuing into 2023 with increases of 25 basis points in February, March, May, and July 2023.
Most recently, the Federal Reserve decreased interest rates 50 basis points in September 2024, and 25 basis points in November and December 2024, respectively, resulting in a target range of 4.25% to 4.50% at December 31, 2024.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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