First Savings Financial Group, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 1-34155

First Savings Financial Group, Inc.

(Exact name of registrant as specified in its charter)

Indiana		37-1567871
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

702 North Shore Drive, Suite 300, Jeffersonville, Indiana 47130

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code 1-812-283-0724

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered pursuant to Section 12(b) of the Act:

Common stock, $0.01 par value per share		FSFG		The NASDAQ Stock Market, LLC
(Title of each class)		(Trading Symbol)		(Name of each exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


	Large Accelerated Filer ☐	Accelerated Filer ☒

	Non-accelerated Filer ☐	Smaller Reporting Company ☒

	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of April 28, 2025 was 6,919,136.

Table of Contents

FIRST SAVINGS FINANCIAL GROUP, INC.

INDEX


		Page
Part I	Financial Information

	Item 1. Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and September 30, 2024	3

	Condensed Consolidated Statements of Income for the three and six months ended March 31, 2025 and 2024 (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended March 31, 2025 and 2024 (unaudited)	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended March 31, 2025 and 2024 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2025 and 2024 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8-49

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	50-58

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	59-60

	Item 4. Controls and Procedures	61

Part II	Other Information

	Item 1. Legal Proceedings	62

	Item 1A. Risk Factors	62

	Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, And Issuer Purchases of Equity Securities	63

	Item 3. Defaults Upon Senior Securities	63

	Item 4. Mine Safety Disclosures	63

	Item 5. Other Information	63

	Item 6. Exhibits	64

Signatures		65

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Table of Contents

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31,		September 30,
(In thousands, except share and per share data)	2025		2024
ASSETS
Cash and due from banks	$	20,154	$	39,393
Interest-bearing deposits with banks		8,529		12,749
Total cash and cash equivalents		28,683		52,142

Interest-bearing time deposits		490		490
Debt securities available for sale, at fair value, net of allowance for credit losses of $14 at March 31, 2025 and $21 at September 30, 2024		243,174		248,679
Debt securities held to maturity		910		1,040
Loans held for sale, residential mortgage		36,395		—
Loans held for sale, Small Business Administration		24,844		25,716
Loans, net of allowance for credit losses of $20,484 at March 31, 2025 and $21,294 at September 30, 2024		1,880,176		1,963,852
Federal Reserve Bank and Federal Home Loan Bank stock, at cost		24,986		24,986
Premises and equipment, net		26,093		26,462
Other real estate owned, held for sale		444		647
Accrued interest receivable:
Loans		9,377		9,447
Securities		1,961		1,929
Cash surrender value of life insurance		48,212		47,605
Goodwill		9,848		9,848
Core deposit intangibles		316		398
Nonresidential mortgage loan servicing rights		58		67
SBA loan servicing rights		2,686		2,687
Other assets		37,577		34,373

Total Assets	$	2,376,230	$	2,450,368

LIABILITIES
Deposits:
Noninterest-bearing	$	185,252	$	191,528
Interest-bearing		1,603,929		1,689,353
Total deposits		1,789,181		1,880,881

Federal Home Loan Bank borrowings		325,310		301,640
Other borrowings		48,682		48,603
Accrued interest payable		8,141		13,384
Advance payments by borrowers for taxes and insurance		911		931
Reserve for unfunded lending commitments		1,688		1,519
Accrued expenses and other liabilities		23,128		26,295
Total Liabilities		2,197,041		2,273,253

STOCKHOLDERS’ EQUITY
Preferred stock of $.01 par value per share; authorized 1,000,000 shares; none issued		—		—
Common stock of $.01 par value per share; authorized 20,000,000 shares; issued 7,841,948 shares (7,802,351 shares at September 30, 2024) outstanding 6,919,136 shares (6,887,106 shares at September 30, 2024)		78		78
Additional paid-in capital		28,572		27,647
Retained earnings		182,918		173,337
Accumulated other comprehensive loss		(19,385)		(11,195)
Unearned stock compensation		(862)		(901)
Treasury stock, at cost - 922,812 shares (915,245 shares at September 30, 2024)		(12,132)		(11,851)
Total Stockholders’ Equity		179,189		177,115

Total Liabilities and Stockholders’ Equity	$	2,376,230	$	2,450,368

See notes to condensed consolidated financial statements.

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Table of Contents

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended				Six Months Ended
	March, 31				March, 31
(In thousands, except share and per share data)	2025		2024		2025		2024

INTEREST INCOME
Loans, including fees	$	27,865	$	27,019	$	57,342	$	53,076
Securities:
Taxable		921		924		1,835		1,866
Tax-exempt		1,358		1,313		2,713		2,646
Dividend income		511		499		1,004		573
Interest-bearing deposits with banks		168		261		378		510
Total interest income		30,823		30,016		63,272		58,671

INTEREST EXPENSE
Deposits		12,069		12,547		25,675		22,536
Federal Home Loan Bank borrowings		2,001		2,298		4,618		6,067
Other borrowings		762		833		1,526		1,617
Total interest expense		14,832		15,678		31,819		30,220

Net interest income		15,991		14,338		31,453		28,451

Provision (credit) for credit losses - loans		(357)		713		(848)		1,183
Provision (credit) for unfunded lending commitments		123		(259)		169		(317)
Provision (credit) for credit losses - securities		(1)		23		(7)		23

Total provision (credit) for credit losses		(235)		477		(686)		889

Net interest income after provision (credit) for credit losses		16,226		13,861		32,139		27,562

NONINTEREST INCOME
Service charges on deposit accounts		541		387		1,108		860
ATM and interchange fees		632		585		1,297		1,034
Net unrealized gain on equity securities		47		6		125		44
Net gain on sale of equity securities		—		—		403		—
Net gain on sales of loans, Small Business Administration		1,078		951		1,789		1,785
Net gain on sales of loans, home equity lines of credit		—		—		2,492		—
Mortgage banking income		104		53		182		142
Increase in cash surrender value of life insurance		380		333		741		662
Gain on life insurance		—		—		108		—
Commission income		255		220		465		442
Real estate lease income		122		115		243		230
Net gain on premises and equipment		—		120		45		120
Other income		401		940		665		1,173
Total noninterest income		3,560		3,710		9,663		6,492

NONINTEREST EXPENSE
Compensation and benefits		8,529		7,589		17,705		17,252
Occupancy and equipment		1,698		1,673		3,334		3,714
Data processing		797		516		1,607		1,309
Advertising		439		212		791		530
Professional fees		432		501		1,126		1,580
FDIC insurance premiums		444		628		1,050		1,114
Net (gain) loss on other real estate owned		(246)		2		(244)		8
Other operating expenses		1,605		657		3,272		2,310
Total noninterest expense		13,698		11,778		28,641		27,817
Net income before income taxes		6,088		5,793		13,161		6,237
Income tax expense		589		866		1,437		390
Net Income	$	5,499	$	4,927	$	11,724	$	5,847

Net income per share:
Basic	$	0.80	$	0.72	$	1.71	$	0.86
Diluted	$	0.79	$	0.72	$	1.68	$	0.85

Weighted average shares outstanding:
Basic		6,875,826		6,832,130		6,861,061		6,828,017
Diluted		6,960,020		6,859,611		6,961,829		6,849,928

Dividends per share	$	0.16	$	0.15	$	0.31	$	0.29

See notes to consolidated financial statements.

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Table of Contents

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2025		2024		2025		2024

Net Income	$	5,499	$	4,927	$	11,724	$	5,847

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period		(2,022)		(4,526)		(10,359)		15,704
Income tax (expense) benefit		427		970		2,174		(3,279)
Net of tax amount		(1,595)		(3,556)		(8,185)		12,425

Less: reclassification adjustment for provision (credit) for credit losses on securities included in net income		(1)		23		(7)		23
Income tax expense		—		(5)		2		(5)
Net of tax amount		(1)		18		(5)		18


Other Comprehensive Income (Loss)		(1,596)		(3,538)		(8,190)		12,443

Comprehensive Income	$	3,903	$	1,389	$	3,534	$	18,290

See notes to consolidated financial statements.

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Table of Contents

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)


							Accumulated
							Other		Unearned
	Common		Additional		Retained		Comprehensive		Stock		Treasury
(In thousands, except share and per share data)	Stock		Paid-in Capital		Earnings		Income (Loss)		Compensation		Stock		Total

Three Months Ended March 31, 2024:
Balances at January 1, 2024		78		27,319		163,753		(13,606)		(1,194)		(11,827)		164,523

Net income		—		—		4,927		—		—		—		4,927

Other comprehensive loss		—		—		—		(3,538)		—		—		(3,538)

Common stock dividends - $0.15 per share		—		—		(1,032)		—		—		—		(1,032)

Stock compensation expense		—		78		—		—		98		—		176

Balances at March 31, 2024	$	78	$	27,397	$	167,648	$	(17,144)	$	(1,096)	$	(11,827)	$	165,056


Three Months Ended March 31, 2025:
Balances at January 1, 2025		78		28,304		178,526		(17,789)		(973)		(12,119)		176,027

Net income		—		—		5,499		—		—		—		5,499

Other comprehensive loss		—		—		—		(1,596)		—		—		(1,596)

Common stock dividends - $0.16 per share		—		—		(1,107)		—		—		—		(1,107)

Stock compensation expense		—		92		—		—		111		—		203

Stock option exercises - 11,400 shares		—		176		—		—		—		—		176

Issuance of 1,800 treasury shares		—		—		—		—		—		23		23

Purchase of 1,437 treasury shares		—		—		—		—		—		(36)		(36)

Balances at March 31, 2025	$	78	$	28,572	$	182,918	$	(19,385)	$	(862)	$	(12,132)	$	179,189

Six Months Ended March 31, 2024:
Balances at October 1, 2023	$	78	$	26,986	$	166,306	$	(29,587)	$	(1,015)	$	(11,787)	$	150,981

Cumulative effect adjustment for adoption of ASU 2016-13, net of tax		—		—		(2,510)		—		—		—		(2,510)

Balances at October 1, 2023		78		26,986		163,796		(29,587)		(1,015)		(11,787)		148,471

Net income		—		—		5,847		—		—		—		5,847

Distribution to Q2 minority interest		—		(18)		—		—		—		—		(18)

Other comprehensive income		—		—		—		12,443		—		—		12,443

Common stock dividends - $0.29 per share		—		—		(1,995)		—		—		—		(1,995)

Restricted stock grants - 19,475 shares		—		294		—		—		(294)		—		—

Restricted stock forfeitures - 800 shares		—		(18)		—		—		18		—		—

Stock compensation expense		—		153		—		—		195		—		348

Purchase of 2,636 treasury shares		—		—		—		—		—		(40)		(40)

Balances at March 31, 2024	$	78	$	27,397	$	167,648	$	(17,144)	$	(1,096)	$	(11,827)	$	165,056


Six Months Ended March 31, 2025:
Balances at October 1, 2024		78		27,647		173,337		(11,195)		(901)		(11,851)		177,115

Net income		—		—		11,724		—		—		—		11,724

Other comprehensive loss		—		—		—		(8,190)		—		—		(8,190)

Common stock dividends - $0.31 per share		—		—		(2,143)		—		—		—		(2,143)

Restricted stock grants - 6,090 shares		—		177		—		—		(177)		—		—

Stock compensation expense		—		176		—		—		216		—		392

Stock option exercises - 38,307 shares		—		572		—		—		—		—		572

Issuance of 4,800 treasury shares		—		—		—		—		—		62		62

Purchase of 12,367 treasury shares		—		—		—		—		—		(343)		(343)

Balances at March 31, 2025	$	78	$	28,572	$	182,918	$	(19,385)	$	(862)	$	(12,132)	$	179,189

See notes to consolidated financial statements.

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Table of Contents

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended
	March 31,
(In thousands)	2025		2024

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	11,724	$	5,847
Adjustments to reconcile net income to net cash provided by (used in )
operating activities:
Provision (credit) for credit losses - loans		(848)		1,183
Provision (credit) for unfunded lending commitments		169		(317)
Provision (credit) for credit losses - securities		(7)		23
Depreciation and amortization		1,157		1,201
Amortization of premiums and accretion of discounts on securities, net		164		145
Amortization and accretion of fair value adjustments on loans, net		(532)		(631)
Loans originated for sale, residential mortgage		(39,089)		(61,979)
Loans originated for sale, Small Business Administration		(24,996)		(23,498)
Proceeds on sales of loans, residential mortgage		2,738		82,076
Proceeds on sales of loans, Small Business Administration		27,538		30,530
Net realized (gain) loss on sale of residential mortgage loans		(141)		1,368
Net realized gain on sale of SBA loans		(1,924)		(1,961)
Capitalization of loan servicing rights		(497)		(1,044)
Proceeds from sale of residential mortgage loan servicing rights		—		59,464
Loss on sale of residential mortgage loan servicing rights		—		4
Net change in value of residential loan servicing rights		—		809
Amortization and direct write offs of SBA and nonresidential mortgage loan servicing rights		507		558
Net realized and unrealized gain on other real estate owned		(248)		(5)
Increase in cash surrender value of life insurance		(741)		(662)
Gain on life insurance		(108)		—
Net gain on equity securities		(528)		(44)
Deferred income taxes		(522)		(15,382)
Stock compensation expense		392		348
Net realized gain on sale of home equity lines of credit		(2,492)		—
Net realized gain on sale of premises and equipment		(45)		(120)
Decrease (increase) in accrued interest receivable		38		(713)
(Decrease) increase in accrued interest payable		(5,243)		2,355
Change in other assets		(4,399)		(1,478)
Change in other liabilities		5,303		12,557
Net Cash Provided by (Used in) Operating Activities		(32,630)		90,634

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available for sale		(11,512)		—
Principal collected and proceeds from maturities of securities available for sale		6,494		4,327
Principal collected and proceeds from maturities of securities held to maturity		130		130
Net increase in loans		(2,173)		(114,196)
Proceeds from redemption of Federal Reserve Bank and Federal Home Loan Bank stock		—		1
Purchase of Federal Reserve Bank and Federal Home Loan Bank stock		—		(48)
Proceeds from sale of home equity lines of credit		89,721		—
Proceeds from sale of premises and equipment		69		150
Proceeds from sale of other real estate		451		35
Purchase of premises and equipment		(651)		(386)
Proceeds from life insurance		242		-
Investment in partnership interests		(3,698)		(3,779)
Distribution to Q2 minority interests		—		(18)
Net Cash Provided by (Used In) Investing Activities		79,073		(113,784)

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits		(91,700)		105,652
Net increase (decrease) in Federal Home Loan Bank line of credit		3,670		(8,183)
Proceeds from Federal Home Loan Bank advances		440,000		1,310,000
Repayment of Federal Home Loan Bank advances		(420,000)		(1,350,000)
Net decrease in advance payments by borrowers for taxes and insurance		(20)		(160)
Proceeds from exercise of stock options		572		—
Proceeds from issuance of common stock		62		—
Purchase of treasury shares		(343)		(40)
Dividends paid on common stock		(2,143)		(1,995)
Net Cash Provided by (Used In) Financing Activities		(69,902)		55,274

Net Increase (Decrease) in Cash and Cash Equivalents		(23,459)		32,124

Cash and cash equivalents at beginning of period		52,142		30,845

Cash and Cash Equivalents at End of Period	$	28,683	$	62,969

Supplemental Disclosures of Cash Flow Information:
Cash payments for:
Interest		37,062		27,865
Income taxes (net of refunds received)		2,242		6,080
Loans transferred from held for investment to held for sale		87,229		—

See notes to consolidated financial statements.

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Presentation of Interim Information

First Savings Financial Group, Inc. (the “Company”) is a financial holding company and the parent of First Savings Bank (the “Bank”).

The Bank, which is a wholly-owned Indiana-chartered commercial bank subsidiary of the Company, provides a variety of banking services to individuals and business customers through 16 locations in southern Indiana. The Bank attracts deposits primarily from the general public and uses those funds, along with other borrowings, primarily to originate commercial mortgage, residential mortgage, construction, commercial business and consumer loans, and to a lesser extent, to invest in mortgage-backed securities, municipal bonds and other investment securities. The Bank has three wholly-owned subsidiaries: Q2 Business Capital, LLC(“Q2”), an Indiana limited liability company that specializes in the origination and servicing of U.S. Small Business Administration (“SBA”) loans, First Savings Investments, Inc., a Nevada corporation that manages a securities portfolio, and Southern Indiana Financial Corporation, which is currently inactive.

First Savings Insurance Risk Management, Inc. (the “Captive”), which was a wholly-owned insurance subsidiary of the Company, was a Nevada corporation that provided property and casualty insurance to the Company, the Bank and the Bank’s active subsidiaries. In addition, the Captive provided reinsurance to 11 other third-party insurance captives for which insurance may not be currently available or economically feasible in the insurance marketplace.Effective September 30, 2023, the Captive was dissolved and is no longer in existence.

During the three -month period ended December 31, 2023, the Bank ceased its national originate-to-sell mortgage banking operation. The Bank continues to originate residential mortgage loans in its local southern Indiana market and first-lien home equity lines of credit from its loan production office in Franklin, Tennessee.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments considered necessary to present fairly the financial position as of March 31, 2025, the results of operations for the three - and six-month periods ended March 31, 2025 and 2024, and the cash flows for the six-month periods ended March 31, 2025 and 2024. All of these adjustments are of a normal, recurring nature. Such adjustments are the only adjustments included in the unaudited condensed consolidated financial statements. Interim results are not necessarily indicative of results for a full year.

The unaudited condensed consolidated financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements, conform to general practices within the banking industry and are presented as permitted by the instructions to Form 10-Q. Accordingly, they do not contain certain information included in the Company’s audited consolidated financial statements and related notes for the year ended September 30, 2024 included in the Company’s Annual Report on Form 10-K.

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Loans and Allowance for Credit Losses

Loans Held for Investment

Loans are stated at unpaid principal balances, less net deferred loan fees and the allowance for credit losses. Loan origination and commitment fees, as well as certain direct costs of underwriting and closing loans, are deferred and amortized as a yield adjustment to interest income over the lives of the related loans using the interest method. Amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status.

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Table of Contents

FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Nonaccrual Loans

The recognition of income on a loan is discontinued and previously accrued interest is reversed when interest or principal payments become 90 days past due unless, in the opinion of management, the outstanding interest remains collectible and the loan is well secured and in process of collection. Past due status is determined based on contractual terms. Generally, by applying the cash receipts method, interest income on nonaccrual loans is subsequently recognized only as received until the loan is returned to accrual status. The cash receipts method is used when the likelihood of further loss on the loan is remote. Otherwise, the Company applies the cost recovery method and applies all payments as a reduction of the unpaid principal balance until the loan qualifies for return to accrual status.

A loan is restored to accrual status when all principal and interest payments are brought current and the borrower has demonstrated the ability to make future payments of principal and interest as scheduled, which generally requires that the borrower demonstrate a period of performance of at least six consecutive months.

Loan Charge-Offs

For portfolio segments other than consumer loans, the Company’s practice is to charge-off any loan or portion of a loan when the loan is determined by management to be uncollectible due to the borrower’s failure to meet repayment terms, the borrower’s deteriorating or deteriorated financial condition, depreciation of the underlying collateral or for other reasons. A partial charge-off is recorded on a loan when the uncollectibility of a portion of the loan has been confirmed, such as when a loan is discharged in bankruptcy, the collateral is liquidated, a loan is restructured at a reduced principal balance, or other identifiable events that lead management to determine the full principal balance of the loan will not likely be repaid. A specific reserve is recognized as a component of the allowance for estimated losses on loans individually evaluated for impairment.

Consumer loans not secured by real estate are typically charged off at 90 days past due, or earlier if deemed uncollectible, unless the loans are in the process of collection. Overdrafts are charged off after 45 days past due. Charge-offs are typically recorded on loans secured by real estate when the property is foreclosed upon when the carrying value of the loan exceeds the property’s fair value, less estimated costs to sell.

Allowance for Credit Losses – Loans

The allowance for credit losses (ACL) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The ACL is increased by provision expense and decreased by charge-offs, net of recoveries of amounts previously charged off.

The Company follows its nonaccrual policy by reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. Therefore, management excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on the portfolio and does not record an allowance for credit losses on accrued interest receivable.

Management considers forward-looking information in estimating expected credit losses. For the contractual term that extends beyond the reasonable and supportable forecast period, the Company reverts to the long term average of historical factors using a four-quarter forecast with immediate reversion to historical losses.

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Management estimates the ACL balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience paired with economic forecasts provides the basis for the quantitatively modeled estimates of expected credit losses. The Company adjusts its quantitative model, as necessary, to reflect conditions not already considered by the quantitative model. The adjustments are commonly known as the Qualitative Framework. The ACL model for each segment is adjusted for (1) changes in the Company’s lending policy, (2) changes in international, national, regional and local economic conditions, (3) changes in the nature and volume of the portfolio and terms of loans, (4) changes in the experience, depth and ability of lending management, (5) changes in the volume and severity of past due loans and other similar conditions, (6) changes in the quality of the Company’s loan review system, (7) changes in the value of underlying collateral, (8) the existence and effect of any concentrations of credit and changes in the levels of such concentrations, and (9) the effect of other external factors such as competition, legal and regulatory requirements.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist utilizing a weighted average remaining maturity loss methodology.The ACL utilizes historical charge off rates that were internally calculated as well as peer charge off data. In many cases, the peer data, which showed higher loss rates, was utilized due to representing a better approximation of management’s estimate of the expected losses on the loan segments.

For loans evaluated on a pool basis, the Company applies an average historical loss rate to the pool over its estimated remaining life assuming a constant attrition rate.

Loans that do not share risk characteristics are evaluated on an individual basis. The Company maintains a net book balance threshold of $500,000 for individually evaluated loans unless further analysis in the future suggests a change is needed to this threshold based on the credit environment at that time. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. If the loan is not collateral dependent, the measurement of loss is based on the difference between the expected and contractual future cash flows of the loan.

Management measures expected credit losses over the contractual term of a loan. When determining the contractual term, the Company considers expected prepayments but is precluded from considering expected extensions, renewals or modifications, unless the Company reasonably expects it will execute a loan modification with a borrower. In the event of a reasonably expected loan modification, the Company factors the reasonably-expected loan modification into the current expected credit losses estimate.

The Company has identified the following portfolio segments and measures and adjusts the ACL using the following methods:

Residential real estate – Residential real estate loans represent loans to consumers for the financing of a residence. Our residential lending policies and procedures conform to the secondary market guidelines, utilizing underwriting processes that rely on empirical data to assess credit risk as well as analysis of the borrower’s ability to repay their obligations, credit history, the amount of any down payment and the market value or other characteristics of the property. We generally offer a mix of adjustable-rate mortgage loans and fixed-rate mortgage loans with terms of 10 to 30 years.

The residential real estate ACL model is adjusted for forecasted changes in the housing price indices at both the national and local level, the Case-Schiller Home Price Index, the national unemployment rate, Consumer Price Index (“CPI”) and Real Gross Domestic Product (“Real GDP”).

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Commercial real estate, single tenant net lease and multifamily – The Company offers fixed and adjustable-rate mortgage loans secured by commercial real estate. Our commercial real estate loans are generally secured by small to moderately-sized office, retail and industrial properties located in our primary market area and are typically made to small business owners and professionals such as attorneys and accountants. We originate fixed-rate commercial real estate loans, generally with terms up to five years and payments based on an amortization schedule of 15 to 20 years, resulting in “balloon” balances at maturity.

The Company offers multi-family mortgage loans that are generally secured by properties in our primary market area. Multi-family loans are secured by first mortgages and generally are originated with a maximum loan-to-value ratio of 80% and generally require specified debt service coverage ratios depending on the characteristics of the project.

The Company offers single tenant net lease loans, which are derived from a commercial real estate lending program that is focused on loans to high net worth individuals and that are secured by low loan-to-value, single-tenant commercial properties that are generally leased to investment grade national-brand retailers, the borrowers and collateral properties for which are outside of our primary market area (“NNN Finance Program”). This program is designed to diversify the Company’s geographic and credit risk profile given the geographic dispersion of the loans and collateral, and the investment grade credit of the national-brand lessees. The terms of the loans are generally consistent with the aforementioned terms of in-market commercial real estate loans; however, these cannot exceed 70% loan-to-value and loan maturities cannot exceed the expiration of the underlying leases.

The commercial real estate, single tenant net lease and multi-family ACL models are adjusted for changes in the Commercial Real Estate Price Index, which is a time series of commercial property values prepared by the Board of Governors of the Federal Reserve System, and the national unemployment rate, CPI and Real GDP.

SBA commercial real estate and SBA commercial business – The Company originates SBA commercial real estate loans and SBA commercial business loans under the SBA 7(a) program. Guaranteed portions are generally sold in the secondary market.

The SBA commercial real estate ACL model is adjusted for the Commercial Real Estate Price Index. Both the SBA commercial real estate ACL model and the SBA commercial business model are adjusted for the national unemployment rate, CPI and Real GDP.

Residential and commercial construction – The Company originates construction loans for one to four family homes and commercial properties such as small industrial buildings, warehouses, retail shops and office units. Construction loans, including speculative construction loans to builders who have not identified a buyer or lessee for the completed property at the time of origination, are made to a limited group of well-established builders in our primary market area and we limit the number of projects with each builder. Construction loans are typically for a term of 12 months with monthly interest only payments and interest rates on these loans are generally tied to the prime lending rate.

The construction ACL model is adjusted for forecasted changes in the housing price indices, the Case-Schiller Home Price Index, the national unemployment rate, CPI and Real GDP.

Land and land development – On a limited basis, we originate loans to developers for the purpose of developing vacant land in our primary market area, typically for residential subdivisions. Land development loans are generally interest-only loans for a term of 18 to 24 months. We generally require a maximum loan-to-value ratio of 75% of the appraisal market value upon completion of the project.

The land and land development ACL model is adjusted for forecasted changes in the housing price indices, the Case-Schiller Home Price Index, the national unemployment rate, CPI and Real GDP.

Commercial business – The Company typically offer commercial business loans to small businesses located in our primary market area. Commercial business loans are generally secured by equipment and general business assets. Key loan terms and covenants vary depending on the collateral, the borrower’s financial condition, credit history and other relevant factors, and personal guarantees are typically required as part of the loan commitment.

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The commercial business ACL model is adjusted for changes in the national unemployment level, CPI and Real GDP.

Consumer – The Company offers a variety of consumer loans. The consumer loan portfolio consists primarily of home equity loans, both fixed rate amortizing term loans with terms up to 15 years and adjustable rate lines of credit with interest rates equal to a margin above the prime lending rate. We also offer auto and truck loans, personal loans and small boat loans. Consumer loans typically have shorter maturities and higher interest rates than traditional one-to four-family lending. We typically do not make home equity loans with loan-to-value ratios exceeding 90%, including any first mortgage loan balance.

The ACL model for consumer loans is adjusted for forecasted changes in the housing price indices, the Case-Schiller Home Price Index, the national unemployment rate, CPI and Real GDP.

Allowance for Credit Losses – Unfunded Commitments

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives consistent with the Company’s ACL methodology for loans.

Collateral Dependent Loans

Loans on nonaccrual status which management believes the likely source of repayment to be operation or sale of the collateral are considered collateral dependent. Factors considered by management in determining collateral dependency include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Individually evaluated loans are measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Values for collateral dependent loans are generally based on appraisals obtained from independent licensed real estate appraisers, with adjustments applied for estimated costs to sell the property, estimated costs to complete unfinished or repair damaged property, and other known defects. New appraisals are generally obtained for all significant properties when a loan is identified as collateral dependent. Generally, a property is considered significant if the value of the property is estimated to exceed $250,000. Subsequent appraisals are obtained as needed or if management believes there has been a significant change in the market value of a collateral property securing a collateral dependent loan. In instances where it is not deemed necessary to obtain a new appraisal, management would base its allowance for credit loss on the original appraisal with adjustments for current conditions based on management’s assessment of market factors and management’s inspection of the property.

Financial Difficulty Modifications

Financial difficulty modifications (FDMs) may result when a borrower is in financial distress, and may be in the form of principal forgiveness, an interest rate reduction, a term extension a payment delay that is other-than-insignificant or any combination thereof. The Company’s credit department evaluates modifications and identifies any FDMs on a quarterly basis.

Allowance for Credit Losses – Held to Maturity (HTM) Securities

The Company measures expected credit losses on HTM securities on a collective basis by major security type with each type sharing similar risk characteristics. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the condensed consolidated balance sheets. See Note 2 – Investment Securities, for additional information related the Company’s allowance for credit losses on HTM securities.

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Allowance for Credit Losses – Available for Sale (AFS) Securities

For AFS securities in an unrealized loss position, the Company first evaluates whether it intends to sell, or whether it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis, which may be at maturity. If either of these criteria regarding intent or requirement to sell is met, the AFS security amortized cost basis is written down to fair value through income. If the criteria is not met, the Company is required to assess whether the decline in fair value has resulted from credit related factors. If the assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists, and an allowance for credit loss is recorded through income as a component of provision for credit loss expense. If the assessment indicates that a credit loss does not exist, the Company records the decline in fair value through other comprehensive income, net of related income tax effects. The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the condensed consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. See Note 2 – Investment Securities, for additional information related to the Company’s allowance for credit losses on AFS securities.

2.	Investment Securities

U.S. agency bonds and notes, agency mortgage-backed securities and agency collateralized mortgage obligations (“CMO”) include treasury notes issued by the U.S. government; securities issued by the Government National Mortgage Association (“GNMA”), a U.S. government agency; and securities issued by the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”) and the Federal Home Loan Bank (“FHLB”), which are U.S. government sponsored enterprises. The Company holds municipal bonds issued by municipal governments within the U.S. The Company also holds pass-through asset-backed securities guaranteed by the SBA representing participating interests in pools of long term debentures issued by state and local development companies certified by the SBA. Privately issued CMO and asset-backed securities (“ABS”) are complex securities issued by non-government special purpose entities that are collateralized by residential mortgage loans and residential home equity loans. The Company also holds subordinated debt of a regional financial institution.

Investment securities have been classified as either available for sale or held to maturity according to management’s intent.

At this time, the Company does not intend to sell, and it is not more likely than not that the Company will be required to sell, debt securities in an unrealized loss position prior to maturity or recovery of the recorded value. The Company recorded a $1,000 and $7,000 credit for credit losses on investment securities for the three - and six-month periods ended March 31, 2025, respectively. The Company recorded a $23,000 provision for credit losses on investment securities for the three - and six-month periods ended March 31, 2024.

The Company’s held to maturity (“HTM”) debt securities consist of two agency mortgage-backed securities and two municipal bonds. The agency mortgage-backed securities carry an explicit and/or implicit guarantee of the U.S. government, are widely considered as “risk free” and have a long history of zero credit loss. The two HTM municipal bonds are unrated, but have performed as agreed and are not considered to be credit impaired. The carrying value of HTM debt securities totaled $910,000 at March 31, 2025. There were no HTM securities on nonaccrual status or past due as of March 31, 2025 or September 30, 2024. Therefore, the Company did not record an allowance for credit losses for these securities as of March 31, 2025 or September 30, 2024.

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Debt Securities Available for Sale and Held to Maturity

The following tables provide a summary of debt securities available for sale and held to maturity:


			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit		Fair
	Cost		Gain		Losses		Losses		Value

	(In thousands)
March 31, 2025:
Debt securities available for sale:

U.S. Treasury notes	$	29,390	$	—	$	3,142	$	—	$	26,248
Agency mortgage-backed		27,344		3		2,947		—		24,400
Agency CMO		23,680		76		867		—		22,889
Privately-issued CMO		272		3		7		14		254
Privately-issued ABS		249		9		—		—		258
SBA certificates		10,930		—		107		—		10,823
Municipal bonds		173,866		95		17,559		—		156,402
Other		2,000		—		100		—		1,900

Total debt securities available for sale	$	267,731	$	186	$	24,729	$	14	$	243,174

Debt securities held to maturity:

Agency mortgage-backed	$	26	$	—	$	—	$	—	$	26
Municipal bonds		884		6		—		—		890

Total debt securities held to maturity	$	910	$	6	$	—	$	—	$	916

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			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit		Fair
	Cost		Gain		Losses		Losses		Value

	(In thousands)
September 30, 2024:
Debt securities available for sale:

U.S. Treasury notes	$	30,031	$	—	$	2,620	$	—	$	27,411
Agency mortgage-backed		28,425		8		2,157		—		26,276
Agency CMO		15,700		—		774		—		14,926
Privately-issued CMO		295		2		16		21		260
Privately-issued ABS		301		12		—		—		313
SBA certificates		11,993		—		67		—		11,926
Municipal bonds		174,132		1,048		9,493		—		165,687
Other		2,000		—		120		—		1,880

Total debt securities available for sale	$	262,877	$	1,070	$	15,247	$	21	$	248,679

Debt securities held to maturity:

Agency mortgage-backed	$	29	$	—	$	—	$	—	$	29
Municipal bonds		1,011		12		—		—		1,023

Total debt securities held to maturity	$	1,040	$	12	$	—	$	—	$	1,052

The amortized cost and fair value of investment securities as of March 31, 2025 by contractual maturity are shown below. CMO, ABS, SBA certificates, and mortgage-backed securities which do not have a single maturity date are shown separately.


	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value

	(In thousands)
Due within one year	$	1,289	$	1,302	$	224	$	225
Due after one year through five years		8,439		8,331		519		523
Due after five years through ten years		42,882		39,275		141		142
Due after ten years		152,646		135,642		—		—
Agency mortgage-backed		27,344		24,400		26		26
Agency CMO		23,680		22,889		—		—
Privately-issued CMO		272		254		—		—
Privately-issued ABS		249		258		—		—
SBA certificates		10,930		10,823		—		—

	$	267,731	$	243,174	$	910	$	916

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The following tables provide the fair value and gross unrealized losses on investment securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:


	Number of			Gross
	Investment	Fair		Unrealized
	Positions	Value		Losses

	(Dollars in thousands)
March 31, 2025:
Debt securities available for sale:
Continuous loss position less than twelve months:
Agency mortgage-backed	5	$	2,021	$	59
Agency CMO	3		5,857		47
SBA certificates	1		990		9
Municipal bonds	54		50,410		1,656

Total less than twelve months	63		59,278		1,771

Continuous loss position more than twelve months:
U.S. Treasury notes	4		26,248		3,142
Agency mortgage-backed	20		22,168		2,888
Agency CMO	15		11,658		820
Privately-issued CMO	3		235		7
Privately-issued ABS	1		73		—
SBA certificates	3		9,833		98
Municipal bonds	121		104,854		15,903
Other	1		1,900		100

Total more than twelve months	179		177,680		22,958

Total debt securities available for sale	210	$	223,479	$	24,729

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At March 31, 2025, the Company did not have any securities held to maturity with an unrealized loss.


	Number of			Gross
	Investment	Fair		Unrealized
	Positions	Value		Losses

	(Dollars in thousands)
September 30, 2024:
Debt securities available for sale:
Continuous loss position less than twelve months:
Agency CMO	1	$	2,641	$	15
SBA certificates	1		998		2
Municipal bonds	3		2,285		10

Total less than twelve months	5		5,924		27

Continuous loss position more than twelve months:
U.S. Treasury notes	6		27,411		2,620
Agency mortgage-backed	20		23,941		2,157
Agency CMO	15		12,285		759
Privately-issued CMO	3		241		16
Privately-issued ABS	1		117		—
SBA certificates	3		10,928		65
Municipal bonds	100		98,794		9,483
Other	1		1,880		120

Total more than twelve months	149		175,597		15,220

Total debt securities available for sale	154	$	181,521	$	15,247

At September 30, 2024, the Company did not have any securities held to maturity with an unrealized loss.

All debt securities available for sale with unrealized losses are reviewed quarterly. For debt securities available for sale in an unrealized loss position, the Company first assesses whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement. For debt securities available for sale in an unrealized loss position that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit deterioration or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis.

The total debt securities available for sale in loss positions at March 31, 2025, which consisted of U.S. Treasury notes, agency mortgage-backed securities, agency CMOs, privately-issued CMOs, municipal bonds, SBA certificates and other securities represented 92% of total debt securities available for sale at March 31, 2025. All of the municipal securities are issued by municipal governments and are generally secured by first mortgage loans and municipal project revenues.

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The Company evaluates the existence of a potential credit loss component related to the decline in fair value of the privately issued CMO and ABS portfolios each quarter using an independent third party analysis. At March 31, 2025, the Company held three privately-issued CMO and ABS securities, acquired in a 2009 bank merger, with an aggregate amortized cost and fair value of $311,000 that have been downgraded to a substandard regulatory classification due to the securities credit quality rating by various rating agencies.

At March 31, 2025, three privately-issued CMO securities and one privately-issued ABS were in a loss position, and had depreciated approximately 2.1% from the Company’s carrying value and were collateralized by residential mortgage loans. These securities had a total fair value of $308,000 and a total unrealized loss of $7,000 at March 31, 2025. A total of two securities had credit losses totaling $14,000 as of March 31, 2025. While the Company does not anticipate additional credit-related losses at March 31, 2025, additional deterioration in market and economic conditions may have an adverse impact on the credit quality of the portfolio, and therefore, require a credit related charge in the future.

The unrealized losses on U.S. Treasury bills and notes, agency mortgage-backed securities, agency CMOs, SBA certificates and municipal bonds relate principally to changes in current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies, or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of its amortized cost bases, which may be at maturity, the Company has not recorded an allowance for credit losses at March 31, 2025.

During the three - and six-month periods ended March 31, 2025 and 2024, there were no sales of debt securities available for sale.

At March 31, 2025 and September 30, 2024, available for sale debt securities with a total fair value of $51.6 million and $54.2 million, respectively, were pledged to secure FHLB borrowings. At March 31, 2025 and September 30, 2024, available for sale debt securities with a total fair value of $58.5 million and $62.8 million, respectively, were pledged to secure Federal Reserve Discount Window borrowings.

The following tables provide information about the activity for available for sale debt securities for which an allowance for credit losses was recorded, by major security type for the three - and six-month periods ended March 31, 2025 and 2024.


	Allowance for Credit Losses
	Private Label CMO
	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(In thousands)
Allowance for credit losses
Beginning of period	$	15	$	—	$	21	$	—
Provision for credit loss expense		—		24		—		24
Reductions due to increases in expected cash flows		(1)		(1)		(7)		(1)
Recoveries		—		—		—		—
Balance, end of period	$	14	$	23	$	14	$	23

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3.	Loans and Allowance for Credit Losses

Loans at March 31, 2025 and September 30, 2024 consisted of the following:


	March 31,		September 30,
	2025		2024

	(In thousands)
Real estate mortgage:
Residential	$	610,438	$	670,011
Commercial		200,671		204,847
Single tenant net lease		753,727		750,642
SBA commercial (1)		59,058		55,557
Multifamily		34,581		37,763
Residential construction		39,610		53,237
Commercial construction		5,910		9,172
Land and land development		15,340		17,678
Commercial business		122,206		124,639
SBA commercial business (1)		18,188		18,342
Consumer		40,058		42,213
Total loans		1,899,787		1,984,101

Deferred loan origination fees and costs, net		873		1,045
Allowance for credit losses		(20,484)		(21,294)

Loans, net	$	1,880,176	$	1,963,852

(1)

Includes discounts on SBA loans of $4.4 million and $3.2 million for March 31, 2025 and September 30, 2024, respectively.

During the three - and six-month periods ended March 31, 2025, there were no significant changes in the Company’s lending activities as disclosed in the Company’s Annual Report on Form 10-K, for the fiscal year ended September 30, 2024.

At March 31, 2025 and September 30, 2024, the Company owned $444,000 of residential real estate where physical possession has been obtained. At March 31, 2025 and September 30, 2024, the recorded investment in consumer mortgage loans collateralized by residential real estate properties in the process of foreclosure was $4.0 million and $853,000, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2025 and 2024:


	Beginning		Provisions						Ending
	Balance		(Credits)		Charge-Offs		Recoveries		Balance

	(In thousands)
March 31, 2025:
Residential real estate	$	6,858	$	63	$	—	$	—	$	6,921
Commercial real estate		1,858		(141)		—		—		1,717
Single tenant net lease		3,830		(376)		—		—		3,454
SBA commercial real estate		3,429		29		—		238		3,696
Multifamily		270		(4)		—		—		266
Residential construction		450		(52)		—		—		398
Commercial construction		133		(15)		—		—		118
Land and land development		212		(4)		—		—		208
Commercial business		1,605		(72)		—		—		1,533
SBA commercial business		1,425		151		(33)		12		1,555
Consumer		615		64		(90)		29		618
	$	20,685	$	(357)	$	(123)	$	279	$	20,484

March 31, 2024:
Residential real estate	$	5,688	$	686	$	—	$	7	$	6,381
Commercial real estate		1,797		(152)		—		—		1,645
Single tenant net lease		4,080		(316)		—		—		3,764
SBA commercial real estate		2,871		—		—		1		2,872
Multifamily		321		89		—		—		410
Residential construction		304		47		—		—		351
Commercial construction		384		47		—		—		431
Land and land development		197		(23)		—		—		174
Commercial business		1,222		288		(26)		—		1,484
SBA commercial business		1,499		(49)		(21)		5		1,434
Consumer		426		96		(101)		25		446
	$	18,789	$	713	$	(148)	$	38	$	19,392

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The following table presents the activity in the allowance for credit losses by portfolio segment for the six months ended March 31, 2025 and 2024:


	Beginning		Adoption of		Provisions						Ending
	Balance		ASC 326		(Credits)		Charge-Offs		Recoveries		Balance

	(In thousands)
March 31, 2025:
Residential real estate	$	7,485	$	—	$	(564)	$	—	$	—	$	6,921
Commercial real estate		1,744		—		(21)		(6)		—		1,717
Single tenant net lease		4,038		—		(584)		—		—		3,454
SBA commercial real estate		3,100		—		415		(105)		286		3,696
Multifamily		341		—		(75)		—		—		266
Residential construction		405		—		(7)		—		—		398
Commercial construction		165		—		(47)		—		—		118
Land and land development		204		—		4		—		—		208
Commercial business		1,657		—		(124)		—		—		1,533
SBA commercial business		1,550		—		22		(67)		50		1,555
Consumer		605		—		133		(168)		48		618
	$	21,294	$	—	$	(848)	$	(346)	$	384	$	20,484

March 31, 2024:
Residential real estate	$	4,641	$	1,037	$	695	$	—	$	8	$	6,381
Commercial real estate		1,777		255		(387)		—		—		1,645
Single tenant net lease		3,810		222		(268)		—		—		3,764
SBA commercial real estate		1,922		511		379		(2)		62		2,872
Multifamily		268		(21)		163		—		—		410
Residential construction		434		(226)		143		—		—		351
Commercial construction		282		43		106		—		—		431
Land and land development		307		(74)		(59)		—		—		174
Commercial business		1,714		(495)		291		(26)		—		1,484
SBA commercial business		1,247		160		23		(24)		28		1,434
Consumer		498		17		97		(209)		43		446
	$	16,900	$	1,429	$	1,183	$	(261)	$	141	$	19,392

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The table below presents the amortized cost basis of loans on nonaccrual and loans past due 90 or more days and still accruing interest. Also presented is the balance of loans on nonaccrual status at March 31, 2025 and September 30, 2024 for which there was no related allowance for credit losses. The Company recognized no interest income related to nonaccrual loans for the three - and six-month periods ended March 31, 2025.


	At March 31, 2025						At September 30, 2024
			Nonaccrual						Nonaccrual
			Loans with						Loans with
	Total		No Allowance		Loans 90+		Total		No Allowance		Loans 90+
	Nonaccrual		For Credit		Days Past Due		Nonaccrual		For Credit		Days Past Due
	Loans		Loses		Still Accruing		Loans		Loses		Still Accruing

	(In thousands)						(In thousands)

Residential real estate	$	5,714	$	4,343	$	—	$	4,583	$	3,479	$	—
Commercial real estate		849		792		—		619		496		—
Single tenant net lease		—		—		—		—		—		—
SBA commercial real estate		2,776		126		—		8,159		5,648		—
Multifamily		235		235		—		263		263		—
Residential construction		—		—		—		—		—		—
Commercial construction		—		—		—		—		—		—
Land and land development		—		—		—		—		—		—
Commercial business		900		181		—		1,335		382		—
SBA commercial business		1,919		578		—		1,858		257		—
Consumer		327		322		—		125		119		—

Total	$	12,720	$	6,577	$	—	$	16,942	$	10,644	$	—

The following table presents the amortized cost basis of collateral dependent loans by collateral type, which are individually evaluated to determine expected credit losses. Other collateral represents business assets including equipment, accounts receivable and other assets, except for the case of consumer loans, which are collateralized by consumer non-real estate assets:


	March 31, 2025						September 30, 2024
	Real Estate		Other		Total		Real Estate		Other		Total

	(In thousands)						(In thousands)
Residential real estate	$	5,714	$	—	$	5,714	$	4,583	$	—	$	4,583
Commercial real estate		849		—		849		619		—		619
SBA commercial real estate		2,776		—		2,776		8,159		—		8,159
Multifamily		235		—		235		263		—		263
Commercial business		—		900		900		—		1,335		1,335
SBA commercial business		—		1,919		1,919		—		1,858		1,858
Consumer		—		327		327		—		125		125
	$	9,574	$	3,146	$	12,720	$	13,624	$	3,318	$	16,942

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The following table presents the aging of past due loans at March 31, 2025:


	30-59 Days		60-89 Days		90+ Days		Total				Total
	Past Due		Past Due		Past Due		Past Due		Current		Loans

	(In thousands)

Residential real estate	$	4,611	$	766	$	3,926	$	9,303	$	601,135	$	610,438
Commercial real estate		41		—		613		654		200,017		200,671
Single tenant net lease		—		—		—		—		753,727		753,727
SBA commercial real estate		142		47		2,420		2,609		56,449		59,058
Multifamily		—		—		—		—		34,581		34,581
Residential construction		232		—		—		232		39,378		39,610
Commercial construction		—		—		—		—		5,910		5,910
Land and land development		11		—		—		11		15,329		15,340
Commercial business		796		—		—		796		121,410		122,206
SBA commercial business		132		49		1,498		1,679		16,509		18,188
Consumer		227		—		238		465		39,593		40,058

Total	$	6,192	$	862	$	8,695	$	15,749	$	1,884,038	$	1,899,787

The following table presents the aging of past due loans at September 30, 2024:


	30-59 Days		60-89 Days		90+ Days		Total				Total
	Past Due		Past Due		Past Due		Past Due		Current		Loans

	(In thousands)

Residential real estate	$	2,490	$	804	$	2,053	$	5,347	$	664,664	$	670,011
Commercial real estate		94		190		496		780		204,067		204,847
Single tenant net lease		—		—		—		—		750,642		750,642
SBA commercial real estate		257		466		4,252		4,975		50,582		55,557
Multifamily		—		—		—		—		37,763		37,763
Residential construction		—		—		—		—		53,237		53,237
Commercial construction		—		—		—		—		9,172		9,172
Land and land development		—		—		—		—		17,678		17,678
Commercial business		23		1		33		57		124,582		124,639
SBA commercial business		61		105		436		602		17,740		18,342
Consumer		165		—		32		197		42,016		42,213

Total	$	3,090	$	1,566	$	7,302	$	11,958	$	1,972,143	$	1,984,101

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic conditions and trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:

Pass: Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the debt if required, for any weakness that may exist.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the Company’s books as an asset is not warranted.

The following tables outline, as of March 31, 2025, the amount of each loan and lease classification and the amount categorized into each risk rating based on fiscal year of origination as well as current period gross charge-offs:

Loans Amortized Cost Basis by Origination Fiscal Year End September 30,


								Revolving
								Loans
								Converted
							Revolving	To Term
(In thousands)	2025	2024	2023	2022	2021	Prior	Loans	Loans	Total

Residential real estate
Pass	45,875	31,223	43,300	44,634	17,038	59,456	363,105	—	604,631
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	2,128	716	1,042	263	340	441	863	—	5,793
Doubtful	—	—	—	—	—	14	—	—	14
Loss	—	—	—	—	—	—	—	—	—
Total residential real estate	48,003	31,939	44,342	44,897	17,378	59,911	363,968	—	610,438
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Commercial real estate
Pass	9,169	20,110	39,221	60,319	19,855	49,643	—	—	198,317
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	613	179	672	890	—	—	2,354
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total commercial real estate	9,169	20,110	39,834	60,498	20,527	50,533	—	—	200,671
YTD gross charge-offs	—	—	—	6	—	—	—	—	6

Single tenant net lease
Pass	29,148	33,157	144,059	267,521	70,540	209,302	—	—	753,727
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total single tenant net lease	29,148	33,157	144,059	267,521	70,540	209,302	—	—	753,727
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

SBA commercial real estate
Pass	5,029	12,865	7,935	8,551	6,088	12,933	45	—	53,446
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	349	—	372	47	4,844	—	—	5,612
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total SBA commercial real estate	5,029	13,214	7,935	8,923	6,135	17,777	45	—	59,058
YTD gross charge-offs	—	—	—	—	—	105	—	—	105

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Loans Amortized Cost Basis by Origination Fiscal Year End September 30,


								Revolving
								Loans
								Converted
							Revolving	to Term
(In thousands)	2025	2024	2023	2022	2021	Prior	Loans	Loans	Total

Multifamily
Pass	—	1,481	4,299	10,919	5,089	12,558	—	—	34,346
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	235	—	—	235
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total multifamily	—	1,481	4,299	10,919	5,089	12,793	—	—	34,581
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Residential construction
Pass	7,728	5,591	17,111	9,180	—	—	—	—	39,610
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total residential construction	7,728	5,591	17,111	9,180	—	—	—	—	39,610
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Commercial construction
Pass	—	763	629	4,518	—	—	—	—	5,910
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total commercial construction	—	763	629	4,518	—	—	—	—	5,910
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Land and land development
Pass	528	1,104	7,215	4,718	743	1,032	—	—	15,340
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total land and land development	528	1,104	7,215	4,718	743	1,032	—	—	15,340
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Loans Amortized Cost Basis by Origination Fiscal Year End September 30,


								Revolving
								Loans
								Converted
							Revolving	to Term
(In thousands)	2025	2024	2023	2022	2021	Prior	Loans	Loans	Total

Commercial business
Pass	9,496	42,391	37,143	20,079	8,649	3,394	—	—	121,152
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	110	—	759	116	44	25	—	—	1,054
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total commercial business	9,606	42,391	37,902	20,195	8,693	3,419	—	—	122,206
YTD gross charge-offs	—	—	-	—	—	—	—	—	—

SBA commercial business
Pass	968	5,705	1,591	620	577	4,854	1,063	—	15,378
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	967	—	—	30	1,813	—	—	2,810
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total SBA commercial business	968	6,672	1,591	620	607	6,667	1,063	—	18,188
YTD gross charge-offs	—	22	—	—	11	34	—	—	67

Consumer
Pass	1,924	3,448	2,569	2,079	196	83	29,524	—	39,823
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	5	—	—	230	—	235
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total consumer	1,924	3,448	2,569	2,084	196	83	29,754	—	40,058
YTD gross charge-offs	—	168	—	—	—	—	—	—	168

Total loans
Pass	109,865	157,838	305,072	433,138	128,775	353,255	393,737	—	1,881,680
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	2,238	2,032	2,414	935	1,133	8,248	1,093	—	18,093
Doubtful	—	—	—	—	—	14	—	—	14
Loss	—	—	—	—	—	—	—	—	—
Total loans	112,103	159,870	307,486	434,073	129,908	361,517	394,830	—	1,899,787
YTD gross charge-offs	—	190	—	6	11	139	—	—	346

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The following tables outline, as of September 30, 2024, the amount of each loan and lease classification and the amount categorized into each risk rating based on fiscal year of origination as well as current period gross charge-offs:

Loans Amortized Cost Basis by Origination Fiscal Year End September 30,


								Revolving
								Loans
								Converted
(In thousands)							Revolving	to Term
	2024	2023	2022	2021	2020	Prior	Loans	Loans	Total
Residential real estate
Pass	62,304	39,024	46,036	18,129	11,293	53,407	436,235	—	666,428
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	734	910	273	348	—	601	700	—	3,566
Doubtful	—	—	—	—	—	17	—	—	17
Loss	—	—	—	—	—	—	—	—	—
Total residential real estate	63,038	39,934	46,309	18,477	11,293	54,025	436,925	—	670,011
YTD gross charge-offs	36	—	—	1	—	6	125	—	168

Commercial real estate
Pass	21,380	41,689	62,181	21,295	7,727	49,425	—	—	203,697
Special Mention	150	—	—	—	—	—	—	—	150
Substandard	—	619	190	—	22	169	—	—	1,000
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total commercial real estate	21,530	42,308	62,371	21,295	7,749	49,594	—	—	204,847
YTD gross charge-offs	—	—	—	—	—	—	—	—	6

Single tenant net lease
Pass	34,819	148,265	273,898	71,361	97,182	125,117	—	—	750,642
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total single tenant net lease	34,819	148,265	273,898	71,361	97,182	125,117	—	—	750,642
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

SBA commercial real estate
Pass	9,623	8,543	8,913	6,280	6,843	5,672	98	—	45,972
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	162	143	1,766	7,514	—	—	9,585
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total SBA commercial real estate	9,623	8,543	9,075	6,423	8,609	13,186	98	—	55,557
YTD gross charge-offs	—	—	—	—	10	48	—	—	58

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Loans Amortized Cost Basis by Origination Fiscal Year End September 30,


								Revolving
								Loans
								Converted
							Revolving	to Term
	2024	2023	2022	2021	2020	Prior	Loans	Loans	Total
Multifamily
Pass	4,995	2,562	11,090	5,207	10,435	3,211	—	—	37,500
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	263	—	—	263
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total multifamily	4,995	2,562	11,090	5,207	10,435	3,474	—	—	37,763
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Residential construction
Pass	10,244	30,903	12,090	—	—	—	—	—	53,237
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total residential construction	10,244	30,903	12,090	—	—	—	—	—	53,237
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Commercial construction
Pass	335	4,441	4,396	—	—	—	—	—	9,172
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total commercial construction	335	4,441	4,396	—	—	—	—	—	9,172
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

Land and land development
Pass	1,538	9,072	4,994	892	313	869	—	—	17,678
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total land and land development	1,538	9,072	4,994	892	313	869	—	—	17,678
YTD gross charge-offs	—	—	—	—	—	—	—	—	—

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Loans Amortized Cost Basis by Origination Fiscal Year End September 30,


								Revolving
								Loans
								Converted
							Revolving	to Term
	2024	2023	2022	2021	2020	Prior	Loans	Loans	Total
Commercial business
Pass	39,647	44,764	22,928	10,286	657	4,978	—	—	123,260
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	896	148	44	4	287	—	—	1,379
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total commercial business	39,647	45,660	23,076	10,330	661	5,265	—	—	124,639
YTD gross charge-offs	—	—	—	32	—	2	—	—	34

SBA commercial business
Pass	4,919	2,513	678	665	3,700	2,376	696	—	15,547
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	835	—	—	54	189	1,717	—	—	2,795
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total SBA commercial business	5,754	2,513	678	719	3,889	4,093	696	—	18,342
YTD gross charge-offs	—	—	—	5	5	162	—	—	172

Consumer
Pass	4,508	3,562	2,848	361	152	30	30,627	—	42,088
Special Mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	6	—	—	—	119	—	125
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total consumer	4,508	3,562	2,854	361	152	30	30,746	—	42,213
YTD gross charge-offs	—	6	—	1	—	—	381	—	388

Total loans
Pass	194,312	335,338	450,052	134,476	138,302	245,085	467,656	—	1,965,221
Special Mention	150	—	—	—	—	—	—	—	150
Substandard	1,569	2,425	779	589	1,981	10,551	819	—	18,713
Doubtful	—	—	—	—	—	17	—	—	17
Loss	—	—	—	—	—	—	—	—	—
Total loans	196,031	337,763	450,831	135,065	140,283	255,653	468,475	—	1,984,101
YTD gross charge-offs	36	6	—	39	15	218	506	—	820

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Financial Difficulty Modifications

An FDM may result when a borrower is in financial distress and may be in the form of principal forgiveness, an interest rate reduction, a term extension or a significant payment delay. In some cases, the Company may provide multiple types of modifications for a single loan. One type of modification, such as payment delay, may be granted initially. However, if the borrower continues to experience financial difficulty, another modification, such as term extension and/or interest rate reduction may be granted. Additionally, modifications with a term extension or interest rate reduction are intended to reduce the borrower’s monthly payment, while modifications with a payment delay, which typically allow borrowers to make monthly payments or interest only payments for a period of time, are structured to cure the payment defaults by making delinquent payments due at maturity.

There were no new FDMs made or modifications of existing FDMs during the three - and six-months ended March 31, 2025 and 2024.

SBA Loan Servicing Rights

The Company originates loans to commercial customers under the SBA 7(a) program and other programs, and typically sells the guaranteed portion of the SBA loans with servicing rights retained. Loan servicing rights on originated SBA loans that have been sold are initially recorded at fair value. Capitalized SBA servicing rights are then amortized in proportion to and over the period of estimated net servicing income. Impairment of SBA servicing rights is assessed using the present value of estimated future cash flows.

The aggregate fair value of SBA loan servicing rights approximates its carrying value. A valuation model employed by an independent third party calculates the present value of future cash flows and is used to estimate fair value at the date of sale and on a quarterly basis for impairment analysis purposes. Management periodically compares the valuation model inputs and results to published industry data in order to validate the model results and assumptions. Key assumptions used to estimate the fair value of the SBA loan servicing rights include the discount rate and prepayment speed assumptions. For purposes of impairment, risk characteristics such as interest rate, loan type, term and investor type are used to stratify the SBA loan servicing rights. Impairment is recognized through a valuation allowance to the extent that fair value is less than the carrying amount. Changes in the valuation allowance are reported in other noninterest income in the consolidated statements of income.

The unpaid principal balance of SBA loans serviced for others was $198.6 million, $194.4 million and $217.6 million at March 31, 2025, September 30, 2024 and March 31, 2024, respectively. Contractually specified late fees and ancillary fees expensed on SBA loans were $4,000 and $2,000 for the three -month periods ended March 31, 2025 and 2024, respectively. Contractually specified late fees and ancillary fees expensed on SBA loans was $15,000 for the six-month period ended March 31, 2025 compared to a credit of $8,000 for the six-months ended March 31, 2024. Net servicing income (contractually specified servicing fees offset by direct servicing expenses) related to SBA loans was $450,000 and $458,000 for the three -month periods ended March 31, 2025 and 2024, respectively. Net servicing income (contractually specified servicing fees offset by direct servicing expenses) related to SBA loans was $891,000 and $922,000 for the six-month periods ended March 31, 2025 and 2024, respectively. Net servicing income and costs related to SBA loans are included in other noninterest income in the consolidated statements of income.

An analysis of SBA loan servicing rights for the three - and six-month periods ended March 31, 2025 and 2024 is as follows:

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	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(In thousands)
Balance, beginning of period	$	2,599	$	2,907	$	2,687	$	2,950
Servicing rights capitalized		295		278		497		535
Amortization		(133)		(137)		(266)		(280)
Direct write-offs		(75)		(98)		(237)		(315)
Change in valuation allowance		—		—		5		60
Balance, end of period	$	2,686	$	2,950	$	2,686	$	2,950

There was no valuation allowance related to SBA loan servicing rights at March 31, 2025. There was a valuation allowance of $5,000 related to SBA loan servicing rights at September 30, 2024.

Mortgage Servicing Rights (“MSRs”)

The Company originated residential mortgage loans for sale in the secondary market and retained servicing for certain of these loans when they were sold. MSRs retained for originated loans that have been sold are accounted for at fair value. The fair value of MSRs are determined using the present value of estimated expected net servicing income using assumptions about expected mortgage loan prepayment rates, discount rate, servicing costs, and other economic factors, which are determined based on current market conditions. Changes in these underlying assumptions could cause the fair value of MSRs to change significantly in the future. Changes in fair value of MSRs are recorded in mortgage banking income in the accompanying consolidated statements of income. MSRs are subject to changes in value from, among other things, changes in interest rates, prepayments of the underlying loans and changes in the credit quality of the underlying loans.

During the quarter ended December 31, 2023, the Company sold substantially all of the Company’s residential MSRs. Additionally, the Company sold the remaining residential MSRs during the quarter ended March 31, 2024.

There was no unpaid principal balance of residential mortgage loans serviced for others at March 31, 2025 and September 30, 2024 due to the sale of all of the Company’s residential MSRs during the six-month period ended March 31, 2024, which also resulted in the elimination of custodial escrow balances. There were no custodial escrow balances maintained in connection with loan servicing and other liabilities at March 31, 2025.

Changes in the carrying value of MSRs accounted for at fair value for the three - and six-month periods ended March 31, 2024 were as follows:


	Three Months		Six Months
	Ended		Ended
	March 31,		March 31,
	2024		2024

	(In thousands)
Fair value, beginning of period	$	709	$	59,768
Servicing rights capitalized		—		509
Changes in fair value related to:
Loan repayments		(6)		(672)
Sales		(946)		(59,464)
Gain (Loss) on sale of MSRs		243		(4)
Change in valuation model inputs or assumptions		—		(137)
Balance, end of period	$	—	$	—

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Nonresidential MSRs

The Company also periodically sells single tenant net lease loans with servicing rights retained. Loan servicing rights on these nonresidential mortgage loans are initially recorded at fair value and are then amortized in proportion to and over the period of estimated net servicing income. Impairment of nonresidential MSRs is assessed using the present value of estimated future cash flows. The aggregate fair value of nonresidential MSRs approximates its carrying value. A valuation model employed by management calculates the present value of future cash flows and is used to estimate fair value at the date of sale and on a quarterly basis for impairment analysis purposes. Management periodically compares the valuation model inputs and results to published industry data in order to validate the model results and assumptions. Key assumptions used to estimate the fair value of the nonresidential MSRs include the discount rate and prepayment speed assumptions. Impairment is recognized through a valuation allowance to the extent that fair value is less than the carrying amount. Changes in the valuation allowance are reported in other noninterest income in the consolidated statements of income.

The unpaid principal balance of nonresidential mortgage loans serviced for others was $34.6 million, $35.0 million and $40.3 million at March 31, 2025, September 30, 2024 and March 31, 2024, respectively. Contractually specified servicing fees, late fees and other ancillary fees related to nonresidential mortgage loans serviced for others were $4,000 and $1,000 for the three - month periods ended March 31, 2025 and 2024, respectively. Contractually specified servicing fees, late fees and other ancillary fees related to nonresidential mortgage loans serviced for others were $6,000 and $5,000 for the six-month periods ended March 31, 2025 and 2024, respectively. Contractually specified servicing fees on nonresidential mortgage loans serviced for others are included in other noninterest income in the consolidated statements of income.

An analysis of nonresidential MSRs for the three - and six-month periods ended March 31, 2025 and 2024 is as follows:


	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(In thousands)
Balance, beginning of period	$	62	$	95	$	67	$	101
Servicing rights capitalized		—		—		—		—
Amortization		(4)		(6)		(9)		(12)
Direct write-offs		—		(11)		—		(11)
Change in valuation allowance		—		—		—		—
Balance, end of period	$	58	$	78	$	58	$	78

There was no valuation allowance related to nonresidential MSRs at March 31, 2025 and September 30, 2024.

Deposits

Deposits at March 31, 2025 and September 30, 2024 consisted of the following:


	March 31,		September 30,
	2025		2024

	(In thousands)

Noninterest-bearing demand deposits	$	185,252	$	191,528
NOW accounts		351,121		332,388
Money market accounts		430,857		393,214
Savings accounts		151,857		150,913
Retail time deposits		273,324		303,681
Brokered certificates of deposit		396,770		509,157
Total	$	1,789,181	$	1,880,881

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5.	Supplemental Disclosure for Net Income Per Share

Net income per share information is presented below for the three - and six-month periods ended March 31, 2025 and 2024.


	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(Dollars in thousands, except per share data)
Basic:
Earnings:
Net income attributable to First Savings Financial Group, Inc. available to common shareholders	$	5,499	$	4,927	$	11,724	$	5,847
Shares:
Weighted average common shares outstanding, basic		6,875,826		6,832,130		6,861,061		6,828,017

Net income per common share, basic	$	0.80	$	0.72	$	1.71	$	0.86

Diluted:
Earnings:
Net income attributable to First Savings Financial Group, Inc. available to common shareholders	$	5,499	$	4,927	$	11,724	$	5,847
Shares:
Weighted average common shares outstanding, basic		6,875,826		6,832,130		6,861,061		6,828,017
Add: Dilutive effect of outstanding options		75,121		27,481		86,692		21,911
Add: Dilutive effect of restricted stock		9,073		—		14,076		—
Weighted average common shares outstanding, as adjusted		6,960,020		6,859,611		6,961,829		6,849,928

Net income per common share, diluted	$	0.79	$	0.72	$	1.68	$	0.85

Nonvested restricted stock shares are not considered as outstanding for purposes of computing weighted average common shares outstanding.

Stock options for 203,325 and 147,825 shares of common stock were excluded from the calculation of diluted net income per common share for the three - and six-month periods ended March 31, 2025, respectively, because their effect was antidilutive. Stock options for 341,572 shares of common stock were excluded from the calculation of diluted net income per common share for the three -and six-month periods ended March 31, 2024, because their effect was antidilutive. There were no antidilutive restricted stock awards excluded from the calculation of diluted net income per share for the three - and six-month periods ended March 31, 2025 and 2024.

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6.	Fair Value Measurements and Disclosures about Fair Value of Financial Instruments

FASB Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC Topic 820 are described as follows:

Level 1:

Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted market price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

Level 2:

Inputs to the valuation methodology include quoted market prices for similar assets or liabilities in active markets; quoted market prices for identical or similar assets or liabilities in markets that are not active; or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means.

Level 3:

Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. The tables below present the balances of financial assets and liabilities measured at fair value on a recurring and nonrecurring basis as of March 31, 2025 and September 30, 2024.


	Carrying Value
	Level 1		Level 2		Level 3		Total

	(In thousands)
March 31, 2025:
Assets Measured – Recurring Basis:
Securities available for sale:
U.S. Treasury notes	$	26,248	$	—	$	—	$	26,248
Agency mortgage-backed		—		24,400		—		24,400
Agency CMO		—		22,889		—		22,889
Privately-issued CMO		—		20		234		254
Privately-issued ABS		—		181		77		258
SBA certificates		—		10,792		31		10,823
Municipal bonds		—		156,402		—		156,402
Other		—		—		1,900		1,900
Total securities available for sale	$	26,248	$	214,684	$	2,242	$	243,174
Equity securities (included in other assets)	$	194	$	582	$	—	$	776

Assets Measured – Nonrecurring Basis:
Collateral dependent loans:
Residential real estate	$	—	$	—	$	1,312	$	1,312
Commercial real estate		—		—		53		53
SBA commercial real estate		—		—		1,636		1,636
Commercial business		—		—		675		675
SBA commercial business		—		—		716		716
Total collateral dependent loans	$	—	$	—	$	4,392	$	4,392

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	Carrying Value
	Level 1		Level 2		Level 3		Total

	(In thousands)
September 30, 2024:
Assets Measured – Recurring Basis
Securities available for sale:
U.S. Treasury notes	$	27,411	$	—	$	—	$	27,411
Agency mortgage-backed		—		26,276		—		26,276
Agency CMO		—		14,926		—		14,926
Privately-issued CMO		—		20		240		260
Privately-issued ABS		—		235		78		313
SBA certificates		—		11,896		30		11,926
Municipal bonds		—		165,687		—		165,687
Other		—		—		1,880		1,880
Total securities available for sale	$	27,411	$	219,040	$	2,228	$	248,679
Equity securities (included in other assets)	$	194	$	456	$	—	$	650

Assets Measured – Nonrecurring Basis
Collateral dependent loans:
Residential real estate	$	—	$	—	$	1,100	$	1,100
Commercial real estate		—		—		120		120
SBA real estate		—		—		1,763		1,763
Commercial business		—		—		768		768
SBA commercial business		—		—		1,183		1,183
Consumer		—		—		4		4
Total collateral dependent loans	$	—	$	—	$	4,938	$	4,938
SBA loan servicing rights	$	—	$	—	$	2,687	$	2,687

Fair value is based upon quoted market prices where available. If quoted market prices are not available, fair value is based on internally developed models or obtained from third parties that primarily use, as inputs, observable market-based parameters or a matrix pricing model that employs the Bond Market Association’s standard calculations for cash flow and price/yield analysis and observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value, or at the lower of cost or fair value. These adjustments may include unobservable parameters. Any such valuation adjustments have been applied consistently over time.

The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. There have been no changes in the valuation techniques and related inputs used for assets measured at fair value on a recurring and nonrecurring basis during the six-month period ended March 31, 2025.

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Debt Securities Available for Sale and Equity Securities. Debt securities classified as available for sale and equity securities are reported at fair value on a recurring basis. These securities are classified as Level 1 of the valuation hierarchy where quoted market prices from reputable third-party brokers are available in an active market. If quoted market prices are not available, the Company obtains fair value measurements from an independent pricing service. These securities are reported using Level 2 inputs and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. For securities where quoted market prices, market prices of similar securities or prices from an independent third party pricing service are not available, fair values are calculated using discounted cash flows or other market indicators and are classified within Level 3 of the fair value hierarchy. Changes in fair value of equity securities are reported in noninterest income. Changes in fair value of securities available for sale are recorded in other comprehensive income, net of income tax effect.

Derivative Financial Instruments. Derivative financial instruments consist of mortgage banking interest rate lock commitments and forward mortgage loan sale commitments. The fair value of forward mortgage loan sale commitments is obtained from an independent third party and is based on the gain or loss that would occur if the Company were to pair-off the sales transaction with the investor. The fair value of forward mortgage loan sale commitments is classified as Level 2 in the fair value hierarchy.

The fair value of interest rate lock commitments is also obtained from an independent third party and is based on investor prices for the underlying loans or current secondary market prices for loans with similar characteristics, less estimated costs to originate the loans and adjusted for the anticipated funding probability (pull-through rate). The fair value of interest rate lock commitments is classified as Level 3 in the fair value hierarchy.

The table below presents a reconciliation of derivative assets and liabilities (interest rate lock commitments) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three - and six-month periods ended March 31, 2024:


	Three Months Ended		Six Months Ended
	March 31,		March 31,
(In thousands)	2024		2024

Beginning balance	$	—	$	268
Unrealized gains (losses) recognized in earnings, net of settlements		—		(268)

Ending balance	$	—	$	—

Due to the wind down of the Company’s national Mortgage Banking operation, and the resulting low level of mortgage loan originations and sales, there were no interest rate lock commitments or forward mortgage loan sale commitments as of March 31, 2025.

The realized and unrealized gains recognized in earnings in the table above are included in mortgage banking income on the accompanying consolidated statements of income. There were no unrealized gains recognized in earnings for the three - and six-month periods ended March 31, 2025 and 2024 attributable to Level 3 derivative assets and liabilities held at the balance sheet date.

Collateral Dependent Loans. Collateral dependent loans are reviewed and evaluated on at least a quarterly basis for additional individual reserves and adjusted accordingly. In accordance with accounting standards, only collateral dependent loans for which an allowance for credit loss has been established or a partial charge-off recorded require classification in the fair value hierarchy. The fair value of collateral dependent loans is classified as Level 3 in the fair value hierarchy.

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Collateral may be real estate and/or business assets, including equipment, inventory and/or accounts receivable, and its fair value is generally determined based on real estate appraisals or other independent evaluations by qualified professionals. The appraisals are then discounted to reflect management’s estimate of the fair value of the collateral given the current market conditions and the condition of the collateral. At March 31, 2025 and September 30, 2024, the significant unobservable inputs used in the fair value measurement of collateral dependent loans were as follows:


		Range of Inputs
	Significant	(Weighted Average)	Range of Inputs (Weighted
	Unobservable	March 31,	Average) September 30,
Financial Instrument	Inputs	2025	2024
Collateral dependent loans	Discount from appraised value	0.0% - 100.0% (16.25%)	0.0% - 100.0% (18.42%)
	Estimated costs to sell	0.0% - 9.0% (8.94%)	6.0% - 6.0% (6.00%)

During the three - and six-month periods ended March 31, 2025, the Company recognized provisions for credit losses on individually evaluated loans of $405,000 and $842,000 respectively. During the three - and six-month periods ended March 31, 2024, the Company recognized provisions for credit losses on individually evaluated loans of $403,000 and $1.0 million, respectively.

SBA and Nonresidential Loan Servicing Rights. SBA loan servicing rights represent the value associated with servicing SBA loans that have been sold. The fair value of SBA loan servicing rights is determined on a quarterly basis by an independent third party valuation model using market-based discount rate and prepayment assumptions, and is classified as Level 3 in the fair value hierarchy. At March 31, 2025, there were no SBA loan servicing rights measured at fair value. At September 30, 2024, the significant unobservable inputs used in the fair value measurement of SBA loan servicing rights measured at fair value were as follows:


	Significant	Range of Inputs (Weighted
	Unobservable	Average) September 30,
Financial Instrument	Inputs	2024
SBA loan servicing rights	Discount rate	7.57% - 25.00% (11.75%)
	Prepayment speed	9.67% - 29.11% (19.06%)

Impairment of the SBA loan servicing rights is recognized on a quarterly basis through a valuation allowance to the extent that fair value is less than the carrying amount. The Company reversed impairment charges of $5,000 and $60,000 on SBA loan servicing rights for the six-month periods ended March 31, 2025 and 2024, respectively. The Company did not record any impairment charges on SBA loan servicing rights for the three -month periods ended March 31, 2025 and 2024.

There were no transfers into or out of the Company’s Level 3 financial assets of the fair value hierarchy for the three - and six-month periods ended March 31, 2025.

At March 31, 2025. the Company had one available for sale other investment security (subordinated debt issued by another financial institution) in Level 3 in the fair value hierarchy. The significant unobservable input used in the fair value measurement of available for sale investment securities was as follows:


	Significant
	Unobservable	March 31,		September 30,
Financial Instrument	Inputs	2025		2024
Other investment security	Discount rate	9.00	%	9.15	%

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The table below presents a reconciliation of available for sale investment securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three - and six-month periods ended March 31, 2025 and 2024:


	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(In thousands)
Beginning balance	$	2,270	$	—	$	2,228	$	—
Transfers from Level 2 to Level 3		—		1,200		—		1,200
Change in value		(28)		—		14		—
Balance, end of period	$	2,242	$	1,200	$	2,242	$	1,200

There were no available for sale investment securities transferred into or out of the Company’s Level 3 financial assets of the fair value hierarchy for the three - and six-month period ended March 31, 2025.

There was one available for sale security with a fair value of $1.2 million transferred into the Company’s Level 3 financial assets on the fair value hierarchy for the three - and six-month periods ended March 31, 2024.

Financial Instruments Recorded Using Fair Value Option. Under FASB ASC 825-10, the Company may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis, with changes in fair value reported in income. The election is made at the acquisition date of an eligible financial asset or financial liability, and may not be revoked once made.

Prior to the winddown of the Company’s national mortgage banking operation, the Company had elected the fair value option for a portion of its residential mortgage loans held for sale. At March 31, 2025 and September 30, 2024, there were no mortgage loans held for sale carried at fair value.

The table below presents gains and losses and interest included in earnings related to financial assets measured at fair value under the fair value option for the three - and six-month periods ended March 31, 2025 and 2024:


	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2025		2024		2025		2024

Gains (losses) – included in mortgage banking income	$	—	$	993	$	—	$	(36)
Interest income		4		73		7		366

	$	4	$	1,066	$	7	$	330

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GAAP requires disclosure of fair value information about financial instruments for interim reporting periods, whether or not recognized in the consolidated balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The carrying amounts and estimated fair values of the Company’s financial instruments are as follows.


	Carrying		Fair Value Measurements Using:
	Amount		Level 1		Level 2		Level 3

	(In thousands)
March 31, 2025:
Financial assets:
Cash and due from banks	$	20,154	$	20,154	$	—	$	—
Interest-bearing deposits with banks		8,529		8,529		—		—
Interest-bearing time deposits		490		—		490		—
Securities held to maturity		910		—		26		890
Residential mortgage loans held for sale		36,395		—		—		36,735
SBA loans held for sale		24,844		—		—		27,388
Loans, net		1,880,176		—		—		1,784,420
FRB and FHLB stock		24,986		N/A		N/A		N/A
Accrued interest receivable		11,338		—		11,338		—

Financial liabilities:
Noninterest-bearing deposits		185,252		185,252		—		—
Interest-bearing deposits		1,603,929		—		—		1,602,967
Borrowings from FHLB		325,310		—		323,110		—
Subordinated notes		48,682		—		47,757		—
Accrued interest payable		8,141		—		8,141		—
Advance payments by borrowers for taxes and insurance		911		—		911		—


	Carrying		Fair Value Measurements Using:
	Amount		Level 1		Level 2		Level 3

	(In thousands)
September 30, 2024:
Financial assets:
Cash and due from banks	$	39,393	$	39,393	$	—	$	—
Interest-bearing deposits with banks		12,749		12,749		—		—
Interest-bearing time deposits		490		—		490		—
Securities held to maturity		1,040		—		29		1,023
SBA loans held for sale		25,716		—		28,375		—
Loans, net		1,963,852		—		—		1,892,241
FRB and FHLB stock		24,986		N/A		N/A		N/A
Accrued interest receivable		11,376		—		11,376		—
Nonresidential mortgage loan servicing rights		67		—		—		67

Financial liabilities:
Noninterest-bearing deposits		191,528		191,528		—		—
Interest-bearing deposits		1,689,353		—		—		1,688,980
Borrowings from FHLB		301,640		—		299,259		—
Subordinated note		48,603		—		47,760		—
Accrued interest payable		13,384		—		13,384		—
Advance payments by borrowers for taxes and insurance		931		—		931		—

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7.	Employee Stock Ownership Plan

On October 6, 2008, the Company established a leveraged employee stock ownership plan (“ESOP”) covering substantially all employees. The ESOP trust acquired 610,089 shares of Company common stock at a cost of $3.33 per share (both as adjusted for the three - for-one stock split effective September 15, 2021) financed by a term loan with the Company. The ESOP loan was repaid in full during the quarter ended December 31, 2015 and all shares have been allocated to participants in the plan; therefore, no compensation expense was recognized for the three - and six-month periods ended March 31, 2025 and 2024. The ESOP trust held 250,956 and 262,176 shares of Company common stock at March 31, 2025 and September 30, 2024, respectively.

8.	Stock Based Compensation Plans

The Company maintains four equity incentive plans under which stock options and restricted stock have been or may be granted, the 2010 Equity Incentive Plan (“2010 Plan”), approved by the Company’s shareholders in February 2010; the 2016 Equity Incentive Plan (“2016 Plan”), approved by the Company’s shareholders in February 2016; the 2021 Equity Incentive Plan (“2021 Plan”) approved by the Company’s shareholders in February 2021; and the 2025 Equity Incentive Plan (“2025 Plan”) approved by the Company’s shareholders in February 2025. Upon stockholder approval of the 2025 Plan, no further awards will be granted under the 2010 Plan, 2016 Plan or 2021 Plan and these plans shall remain in existence solely for the purpose of administering outstanding grants thereunder. The 2025 Plan provides for the award of restricted stock and the aggregate number of shares of the Company’s common stock available for issuance under the 2025 Plan may not exceed 138,000 shares. As of March 31, 2025, no shares had been granted under the 2025 Plan as of March 31, 2025; however, in April 2025, the Company granted 55,895 restricted shares to officers and key employees, which will vest over a five-year period. The Company generally issues new shares under Plans from its authorized but unissued shares. The Company accounts for any forfeitures as they occur, and any previously recognized compensation cost for an award is reversed in the period the award is forfeited.

Stock Options

Under the plans, the Company may grant both non-statutory and incentive stock options that may not have a term exceeding ten years. In the case of incentive stock options, the aggregate fair value (determined at the time the incentive stock options are granted) which are first exercisable during any calendar year shall not exceed $100,000. Exercise prices may not be less than the fair market value of the underlying stock at the date of the grant. The terms of the plans also include provisions whereby all unearned options and restricted shares become immediately exercisable and fully vested upon a change in control.

Stock options granted generally vest ratably over five years and are exercisable in whole or in part for a period up to ten years from the date of the grant. Compensation expense is measured based on the fair market value of the options at the grant date and is recognized ratably over the period during which the shares are earned (the vesting period). The fair market value of stock options granted is estimated at the date of grant using a binomial option pricing model. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted represents the period of time that options are expected to be outstanding. The risk free rate for the expected life of the options is based on the U.S. Treasury yield curve in effect at the grant date.

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The fair value of options granted during the six-month periods ended March 31, 2025 and 2024 were determined using the following assumptions:


	2025			2024
Expected dividend yield		2.55	%		3.74	%
Risk-free interest rate		4.36	%		4.44	%
Expected volatility		29.70	%		28.36	%
Expected life of options		6.9 years			6.9 years
Weighted average fair value at grant date	$	8.44		$	3.55

A summary of stock option activity as of March 31, 2025, and changes during the six-month period then ended is presented below.


				Weighted
				Average
				Remaining
		Weighted		Contractual	Aggregate
	Number of	Average		Term	Intrinsic
	Shares	Exercise Price		(Years)	Value

	(Dollars in thousands, except exercise price data)

Outstanding at beginning of period	459,547	$	20.10
Granted	21,075		29.00
Exercised	(38,307)		16.56
Forfeited or expired	(8,205)		—
Outstanding at end of period	434,110	$	19.43	4.1	$	1,694
Exercisable at end of period	286,571	$	20.23	4.6	$	1,679

There were 38,307 stock options exercised during the six-month period ended March 31, 2025. There were no stock options exercised during the six-month period ended March 31, 2024. The Company recognized compensation expense related to stock options of $92,000 and $176,000 for the three - and six-month periods ended March 31, 2025, respectively. The Company recognized compensation expense related to stock options of $78,000 and $153,000 for the three - and six-month periods ended March 31, 2024, respectively. At March 31, 2025, there was $712,000 of unrecognized compensation expense related to nonvested stock options. The compensation expense is expected to be recognized over a weighted average period of 2.86 years. There was $572,000 in cash received and $48,000 in tax benefit from the exercise of stock options during the six-month period ended March 31, 2025. There was no cash received and no tax benefit from exercise during the six-month period ended March 31, 2024 due to no options being exercised during the period.

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Restricted Stock

The vesting period of restricted stock granted under the plans is generally five years beginning one year after the date of grant of the awards. Compensation expense is measured based on the fair market value of the restricted stock at the grant date and is recognized ratably over the vesting period. Compensation expense related to restricted stock recognized for the three - and six-month periods ended March 31, 2025 was $111,000 and $216,000, respectively. Compensation expense related to restricted stock recognized for the three - and six-month periods ended March 31, 2024 was $98,000 and $195,000, respectively.

A summary of the Company’s nonvested restricted shares activity as of March 31, 2025 and changes during the six-month period then ended is presented below.


		Weighted
	Number	Average
	of	Grant Date
	Shares	Fair Value
Nonvested at October 1, 2024	57,433	$	21.64
Granted	6,090	$	29.00
Vested	(17,903)	$	21.80
Forfeited	—		—
Nonvested at March 31, 2025	45,620	$	22.55

There were 17,903 restricted shares vested during the six-month period ended March 31, 2025 with a total fair value of $519,000. There were 16,158 restricted shares that vested during the six-month period ended March 31, 2024 with a total fair value of $244,000. At March 31, 2025, there was $862,000 of unrecognized compensation expense related to nonvested restricted shares. The compensation expense is expected to be recognized over a weighted average period of 2.79 years.

9.	Derivative Financial Instruments

Prior to the winddown of the Company’s national mortgage banking division, the Company entered into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (i.e., rate lock commitment). The Company also entered into forward mortgage loan commitments to sell loans to various investors to protect itself against exposure to various factors and to reduce sensitivity to interest rate movements. Both the interest rate lock commitments and the related forward mortgage loan sales contracts are considered derivatives and are recorded on the accompanying consolidated balance sheets at fair value in accordance with FASB ASC 815, Derivatives and Hedging, with changes in fair value recorded in mortgage banking income in the accompanying consolidated statements of income. All such derivatives are considered stand-alone derivatives and have not been formally designated as hedges by management.

Certain financial instruments, including derivatives, may be eligible for offset in the balance sheet when the “right of setoff” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements. However, the Company has not elected to offset such financial instruments in the consolidated balance sheets. The Company may be required to post margin collateral to derivative counterparties based on agreements with the dealers. Cash collateral related to derivative contracts is recorded in interest-bearing deposits with banks or other assets in the consolidated balance sheets. At March 31, 2025 and September 30, 2024, the Company had no cash collateral posted with derivative counterparties against its derivative obligations.

As of March 31, 2025 and September 30, 2024, the Company had no derivative financial instruments due to the wind down of the national mortgage banking operation.

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Income (loss) related to derivative financial instruments included in mortgage banking income in the accompanying consolidated statements of income for the three - and six-month periods ended March 31, 2024 is as follows:


	Three Months Ended		Six Months Ended
	March 31,		March 31,
(In thousands)	2024		2024

Interest rate lock commitments	$	—	$	(268)
Forward mortgage loan sale contracts		—		354

	$	—	$	86

There was no income (loss) related to derivative financial instruments included in mortgage banking income in the accompanying consolidated statements of income for the three - and six - month periods ended March 31, 2025.

10.	Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and Tier 1 capital (as defined) to average assets (as defined). The final rules implementing the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (“Basel III rules”) became effective for the Bank on January 1, 2015, with full compliance with all of the requirements being phased in over a multi-year schedule through 2019. Under the Basel III rules, the Bank must hold a conservation buffer above the adequately capitalized risk-based capital ratios disclosed in the table below. The capital conservation buffer was 2.50% for 2024 and 2023. The Bank met all capital adequacy requirements to which it was subject as of March 31, 2025 and September 30, 2024.

As of March 31, 2025, the most recent notification from the Federal Reserve Bank categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category.

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The Company’s and Bank’s actual capital amounts and ratios are also presented in the table. The Company is not subject to the Federal Reserve Bank’s consolidated capital requirements because it has less than $3 billion in total consolidated assets. However, management has elected to disclose the Company’s capital amounts and ratios in addition to the Bank’s required disclosures in the table below. No amount was deducted from capital for interest-rate risk at either date.


									Minimum To Be Well
					Minimum				Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes:				Action Provisions:
	Amount		Ratio		Amount		Ratio		Amount		Ratio

	(Dollars in thousands)
As of March 31, 2025:

Total capital (to risk-weighted assets):
Consolidated	$	250,280	13.08	%	$	153,125	8.00	%		N/A	N/A
Bank		236,306	12.36			152,969	8.00		$	191,211	10.00	%

Tier 1 capital (to risk-weighted assets):
Consolidated	$	189,111	9.88	%	$	114,844	6.00	%		N/A	N/A
Bank		215,819	11.29			114,727	6.00		$	152,969	8.00	%

Common equity tier 1 capital (to risk-weighted assets):
Consolidated	$	189,111	9.88	%	$	86,133	4.50	%		N/A	N/A
Bank		215,819	11.29			86,045	4.50		$	124,287	6.50	%

Tier 1 capital (to average adjusted total assets):
Consolidated	$	189,111	7.96	%	$	95,081	4.00	%		N/A	N/A
Bank		215,819	9.08			95,025	4.00		$	118,782	5.00	%

As of September 30, 2024:

Total capital (to risk-weighted assets):
Consolidated	$	244,214	12.53	%	$	155,976	8.00	%		N/A	N/A
Bank		242,041	12.42			155,946	8.00		$	194,932	10.00	%

Tier 1 capital (to risk-weighted assets):
Consolidated	$	179,325	9.20	%	$	116,982	6.00	%		N/A	N/A
Bank		221,755	11.38			116,959	6.00		$	155,946	8.00	%

Common equity tier 1 capital (to risk-weighted assets):
Consolidated	$	179,325	9.20	%	$	87,737	4.50	%		N/A	N/A
Bank		221,755	11.38			87,720	4.50		$	126,706	6.50	%

Tier 1 capital (to average adjusted total assets):
Consolidated	$	179,325	7.42	%	$	96,607	4.00	%		N/A	N/A
Bank		221,755	9.18			96,590	4.00		$	120,737	5.00	%

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11.	Recent Accounting Pronouncements

The following are summaries of recently issued or adopted accounting pronouncements that impact the accounting and reporting practices of the Company:

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurements (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted and the amendments in the ASU should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. The adoption of the ASU did not have a material impact on the Company’s consolidated financial position or results of operations.

In March 2023, the FASB issued ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which allows an entity to elect to use the proportional amortization method to account for qualifying equity investments in tax credit structures that meet specified criteria, without regard to the underlying tax credit program. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company invested in a partnership that generates low-income housing tax credits and has accounted for this under proportional amortization with investment amortization expense recorded as a component of income tax expense. The Company’s early adoption of this ASU effective October 1, 2023 did not result in any one-time cumulative-effect adjustment to retained earnings, have a material impact on the Company’s consolidated financial position or results of operations, or impact prior periods.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. Public entities are required to disclose significant expense categories and amounts for each reportable segment. Significant expense categories are derived from expenses that are regularly reported to an entity’s chief operating decision-maker (“CODM”), and included in a segment’s reported measures of profit or loss. Public entities are also required to disclose the title and position of the CODM and explain how the CODM uses the reported measures of profit or loss to assess segment performance. The ASU requires interim disclosures of certain segment-related disclosures that previously were only required annually. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the ASU should be applied prospectively. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The ASU is effective for fiscal years beginning after December 15, 2024. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. This standard requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. The ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company’s consolidated financial statements or do not apply to its operations.

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12.	Segment Reporting

The Company’s operations include two primary segments: core banking and SBA lending. The core banking segment originates residential, commercial and consumer loans and attracts deposits from its customer base. Net interest income from loans and investments that are funded by deposits and borrowings is the primary revenue for the core banking segment. The SBA lending segment originates loans guaranteed by the SBA, subsequently selling the guaranteed portion to outside investors. Net gains on sales of loans, net servicing income and net interest income are the primary sources of revenue for the SBA lending segment. The mortgage banking segment originated residential mortgage loans and sold them in the secondary market. Net gains on the sales of loans, net servicing income, income from derivative financial instruments and net interest income were the primary sources of revenue for the mortgage banking segment.

The core banking segment is comprised primarily by the Bank and First Savings Investments, Inc., while the SBA lending segment’s revenues are comprised primarily of net interest income and gains on the sales of SBA loans generated by Q2.

The following segment financial information has been derived from the internal financial statements of the Company which are used by management to monitor and manage financial performance. The accounting policies of these segments are the same as those of the Company (dollars in thousands).


	Core		SBA		Consolidated
	Banking		Lending		Totals
Three Months Ended March 31, 2025:
Net interest income	$	14,259	$	1,732	$	15,991
Provision (credit) for credit losses – loans		(540)		183		(357)
Provision for unfunded lending commitments		35		88		123
Credit for credit losses – securities		(1)		—		(1)
Total provision (credit) for credit losses		(506)		271		(235)
Net interest income after provision		14,765		1,461		16,226
Net gains on sales of loans, SBA		—		1,078		1,078
Mortgage banking income		104		—		104
Noninterest income		2,242		1,318		3,560
Noninterest expense		11,486		2,212		13,698
Income before taxes		5,521		567		6,088
Income tax expense		452		137		589
Segment profit		5,069		430		5,499
Non-cash items:
Depreciation and amortization		566		2		568
Segment assets at March 31, 2025		2,270,552		105,678		2,376,230

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	Core		SBA		Consolidated
	Banking		Lending		Totals
Six Months Ended March 31, 2025:
Net interest income	$	28,015	$	3,438	$	31,453
Provision (credit) for credit losses - loans		(1,286)		438		(848)
Provision (credit) for unfunded lending commitments		(40)		209		169
Credit for credit losses – securities		(7)		—		(7)
Total provision (credit) for credit losses		(1,333)		647		(686)
Net interest income after provision		29,348		2,791		32,139
Net gains on sales of loans, SBA		—		1,789		1,789
Mortgage banking income		182		—		182
Noninterest income		7,495		2,168		9,663
Noninterest expense		24,060		4,581		28,641
Income before taxes		12,783		378		13,161
Income tax expense		1,345		92		1,437
Segment profit		11,438		286		11,724
Non-cash items:
Depreciation and amortization		1,154		3		1,157
Segment assets at March 31, 2025		2,270,552		105,678		2,376,230


	Core		SBA		Consolidated
	Banking		Lending		Totals
Three Months Ended March 31, 2024:
Net interest income	$	13,469	$	869	$	14,338
Provision (credit) for credit losses – loans		762		(49)		713
Credit for unfunded lending commitments		(113)		(146)		(259)
Provision for credit losses - securities		23		—		23
Total provision (credit) for credit losses		672		(195)		477
Net interest income after provision		12,797		1,064		13,861
Net gains on sales of loans, SBA		—		951		951
Mortgage banking income		53		—		53
Noninterest income		2,537		1,173		3,710
Noninterest expense		10,093		1,685		11,778
Income before taxes		5,241		552		5,793
Income tax expense		729		137		866
Segment profit		4,512		415		4,927
Non-cash items:
Depreciation and amortization		592		1		593
Segment assets at March 31, 2024		2,279,791		85,192		2,364,983

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	Core		SBA		Consolidated
	Banking		Lending		Totals
Six Months Ended March 31, 2024:
Net interest income	$	26,579	$	1,872	$	28,451
Provision for credit losses – loans		781		402		1,183
Credit for unfunded lending commitments		(180)		(137)		(317)
Provision for credit losses – securities		23		—		23
Total provision for credit losses		624		265		889
Net interest income after provision		25,955		1,607		27,562
Net gains on sales of loans, SBA		—		1,785		1,785
Mortgage banking income		142		—		142
Noninterest income		4,316		2,176		6,492
Noninterest expense		23,986		3,831		27,817
Income (loss) before taxes		6,285		(48)		6,237
Income tax expense		384		6		390
Segment profit (loss)		5,901		(54)		5,847
Non-cash items:
Depreciation and amortization		1,198		3		1,201
Segment assets at March 31, 2024		2,279,791		85,192		2,364,983

13.	Revenue from Contracts with Customers

Substantially all of the Company’s revenue from contracts with customers within the scope of FASB ASC 606 is included in the core banking segment and is recognized within noninterest income. The following table presents the Company’s sources of noninterest income for the three - and six-month periods ended March 31, 2025 and 2024:


	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(In thousands)
In Scope for ASC 606
Service charges on deposit accounts	$	541	$	387	$	1,108	$	860
ATM and interchange fees		632		585		1,297		1,034
Commission income		255		220		465		442
Other		30		31		56		56
Revenue from contracts with customers		1,458		1,223		2,926		2,392

Out of Scope for ASC 606
Net unrealized gain on equity securities		47		6		125		44
Gain on sale of equity securities		—		—		403		—
Gain on sale of SBA loans		1,078		951		1,789		1,785
Net gain on sale of loans, home equity line of credit		—		—		2,492		—
Mortgage banking income		104		53		182		142
Increase in cash value of life insurance		380		333		741		662
Real estate lease income		122		115		243		230
Other income		371		1,029		762		1,237
Other noninterest income		2,102		2,487		6,737		4,100

Total noninterest income	$	3,560	$	3,710	$	9,663	$	6,492

A description of the Company’s revenue streams accounted for under ASC 606 follows:

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FIRST SAVINGS FINANCIAL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Service Charges on Deposit Accounts: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as wire fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized when the overdraft occurs.

ATM and Interchange Fees: The Company earns ATM usage fees and interchange fees from debit cardholder transactions conducted through a payment network. ATM fees are recognized when the transaction occurs. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The costs of related loyalty rewards programs are netted against interchange income as a direct cost of the revenue generating activity.

Commission Income: The Company earns trust, insurance commissions, brokerage commissions and annuities income from its contracts with customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted services and are generally assessed based on the market value of assets under management. Fees that are transaction based, including trade execution services, are recognized when the transaction is executed. Other related fees, which are based on a fixed fee schedule, are recognized when the services are rendered.

Other Income: Other income from contracts with customers primarily includes check cashing and cashier’s check fees, safe deposit box fees and cash advance fees. This revenue is recognized at the time the transaction is executed or over the period the Company satisfies the performance obligation.

14.Mortgage Banking Income

The components of mortgage banking income for the three - and six-month periods ended March 31, 2025 and 2024 were as follows:


	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2025		2024		2025		2024

	(In thousands)

Origination and sale of mortgage loans (1)	$	44	$	(991)	$	59	$	(1,202)
Mortgage brokerage income		10		1		27		31
Net change in fair value of loans held for sale and interest rate lock commitments		—		993		—		(304)
Realized and unrealized gains (losses) from Forward sales commitments		—		—		—		354
Capitalized residential mortgage loan servicing rights		—		—		—		509
Net change in fair value of residential mortgage loan servicing rights		—		(6)		—		(809)
Provisions for loan repurchases and indemnifications		50		(37)		93		19
Net loan servicing income		—		93		3		1,544
Total mortgage banking income	$	104	$	53	$	182	$	142

(1)

Includes origination fees and realized gains and losses on the sale of mortgage loans in the secondary market.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Safe Harbor Statement for Forward-Looking Statements

This report may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions.

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements being materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, our service providers, and on the economy and financial markets, general economic conditions, including the effects of inflation, changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; the quality and composition of the loan and investment securities portfolio; loan demand; deposit flows; competition; and changes in accounting principles and guidelines. Additional factors that may affect our results are discussed herein and in our Annual Report on Form 10-K, for the year ended September 30, 2024 under “Part II, Item 1A. Risk Factors.” These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.

Critical Accounting Policies; Critical Accounting Estimates

During the six-month period ended March 31, 2025, there was no significant change in the Company’s critical accounting policies or the application of critical accounting policies as disclosed in the Company’s Annual Report on Form 10-K, for the year ended September 30, 2024.

Comparison of Financial Condition at March 31, 2025 and September 30, 2024

Cash and Cash Equivalents. Cash and cash equivalents decreased $23.5 million from $52.1 million at September 30, 2024 to $28.7 million at March 31, 2025. Excess cash was used to pay down brokered deposits during the period.

Loans. Net loans receivable decreased $83.7 million, from $1.96 billion at September 30, 2024 to $1.88 billion at March 31, 2025, due primarily to the $87.2 million bulk sale of residential real estate home equity line of credit loans during the period.

Loans Held for Sale. Loans held for sale increased $35.5 million, from $25.7 million at September 30, 2024 to $61.2 million at March 31, 2025, primarily due to an increase in residential mortgage loans held for sale of $36.4 million. The increase in residential mortgage loans held for sale is primarily due to an increase in home equity line of credit loans held for sale during the period.

Securities Available for Sale. Securities available for sale decreased $5.5 million, from $248.7 million at September 30, 2024 to $243.2 million at March 31, 2025, due to net decreases in fair value of $10.4 million, calls and maturities of $3.4 million and principal repayments of $3.1 million, partially offset by purchases of $11.5 million. The decreases in fair value were primarily due to increasing long term market interest rates during the six-months ended March 31, 2025, which resulted in a decrease in the fair value of debt securities available for sale.

Securities Held to Maturity. Investment securities held to maturity decreased $130,000 due primarily to calls and maturities during the period.

Deposits. Total deposits decreased $91.7 million from $1.88 billion at September 30, 2024 to $1.79 billion at March 31, 2025, primarily due to a decrease in brokered deposits of $112.4 million, partially offset by increases in money market accounts and interest-bearing demand deposit accounts of $37.6 million and $18.7 million, respectively.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FHLB Borrowings. Borrowings from the FHLB increased $23.7 million, from $301.6 million at September 30, 2024 to $325.3 million at March 31, 2025. Borrowings were utilized in place of brokered deposits, which decreased as noted under Deposits.

Stockholders’ Equity. Stockholders’ equity increased $2.1 million from $177.1 million at September 30, 2024 to $179.2 million at March 31, 2025, due primarily to a $9.6 increase in retained net income, partially offset by a $8.2 million increase in accumulated other comprehensive loss. At March 31, 2025 and September 30, 2024, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

Results of Operations for the Three Months Ended March 31, 2025 and 2024

Overview. The Company reported net income of $5.5 million, or $0.79 per diluted share, for the three-month period ended March 31, 2025 compared to net income of $4.9 million, or $0.72 per diluted share, for the three-month period ended March 31, 2024.

Net Interest Income. Net interest income increased $1.7 million, or 11.6%, for the three-month period ended March 31, 2025 as compared to the same period in 2024. Average interest-earning assets increased $22.7 million and average interest-bearing liabilities increased $37.9 million when comparing the two periods. The tax-equivalent net interest margin was 2.93% for 2025 compared to 2.66% for 2024.

Total interest income increased $807,000 when comparing the two periods due primarily to an increase in the average balance of interest-earning assets of $22.7 million, from $2.22 billion for 2024 to $2.25 billion for 2025, and an increase in the average tax equivalent yield on interest-earning assets from 5.48% for 2024 to 5.57% for 2025. The increase in the average balance of interest-earning assets was due primarily to a $31.7 million increase in the average balance of total loans.

Total interest expense decreased $846,000 due to a decrease in the average cost of interest-bearing liabilities from 3.25% for 2024 to 3.01% for 2025, partially offset by an increase in the average balance of interest-bearing liabilities of $37.9 million, from $1.93 billion for 2024 to $1.97 billion for 2025. The decrease in the average cost of interest-bearing liabilities for 2025 was due primarily to lower rates for brokered deposits and money market deposit accounts as a result of decreased market interest rates and resulting lower short term U.S. Treasury rates.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Average Balance Sheets. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs for the three-month periods ended March 31, 2025 and 2024. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances presented are daily averages. Nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are not material. Tax exempt income on loans and investment securities have been adjusted to a tax equivalent basis using a federal marginal tax rate of 21%.


	Three Months Ended March 31,
	2025						2024
			Interest						Interest
	Average		and		Yield/		Average		and		Yield/
	Balance		Dividends		Cost		Balance		Dividends		Cost

		(Dollars in thousands)
Assets:
Interest-bearing deposits with banks	$	11,851	$	168	5.67	%	$	24,587	$	261	4.25	%
Loans (1)		1,946,338		27,998	5.75			1,914,609		27,133	5.67
Investment securities – taxable		102,744		921	3.59			102,699		924	3.60
Investment securities – nontaxable (1)		161,579		1,719	4.26			157,960		1,662	4.21
FRB and FHLB stock		24,986		511	8.18			24,986		499	7.99
Total interest-earning assets		2,247,498		31,317	5.57			2,224,841		30,479	5.48

Noninterest-earning assets		116,722						116,672
Total assets	$	2,364,220					$	2,341,513

Liabilities and equity:
NOW accounts	$	349,866	$	690	0.79	%	$	313,299	$	525	0.67	%
Money market deposit accounts		409,864		3,637	3.55			327,897		3,076	3.75
Savings accounts		150,895		50	0.13			161,844		52	0.13
Time deposits		742,433		7,692	4.14			745,972		8,893	4.77
Total interest-bearing deposits		1,653,058		12,069	2.92			1,549,012		12,546	3.24

FHLB borrowings		266,975		2,001	3.00			333,275		2,298	2.76
Subordinated debt and other borrowings		48,656		762	6.26			48,497		833	6.87
Total interest-bearing liabilities		1,968,689		14,832	3.01			1,930,784		15,677	3.25

Noninterest-bearing deposits		181,266						196,340
Other noninterest-bearing liabilities		34,612						49,565
Total liabilities		2,184,567						2,176,689

Total stockholders’ equity		179,653						164,824

Total liabilities and equity	$	2,364,220					$	2,341,513
Net interest income (taxable equivalent basis)				16,485						14,802
Less: taxable equivalent adjustment				(494)						(464)
Net interest income			$	15,991					$	14,338
Interest rate spread (taxable equivalent basis)					2.56	%					2.23	%
Net interest margin (taxable equivalent basis)					2.93	%					2.66	%
Average interest-earning assets to average interest-bearing liabilities					114.16	%					115.23	%

(1) Item impacted by tax equivalent adjustment

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our net interest income on a tax equivalent basis for the three-month periods ended March 31, 2025 and 2024. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume have been allocated proportionally based on the absolute dollar amounts of change in each.


	Three Months Ended March 31, 2025
	Compared to
	Three Months Ended March 31, 2024
	Increase (Decrease)
	Due to
	Rate		Volume		Net

	(In thousands)
Interest income:
Interest-bearing deposits with banks	$	65	$	(158)	$	(93)
Loans		412		453		865
Investment securities - taxable		(3)		—		(3)
Investment securities - nontaxable		19		38		57
FRB and FHLB stock		12		—		12
Total interest-earning assets		505		333		838

Interest expense:
Deposits		(1,278)		801		(477)
Borrowings from FHLB		180		(477)		(297)
Subordinated debt		(74)		3		(71)
Total interest-bearing liabilities		(1,172)		327		(845)

Net increase in net interest income (taxable equivalent basis)	$	1,677	$	6	$	1,683

Provision for Credit Losses. The Company recognized a credit for credit losses for loans and securities of $357,000 and $1,000, respectively, and a provision for unfunded lending commitments of $123,000 for the three months ended March 31, 2025, compared to a provision for credit losses for loans and securities of $713,000 and $23,000, respectively, and a credit for unfunded lending commitments of $259,000 for the same period in 2024. The credit for credit losses for loans during the 2025 period was due primarily to a decrease in qualitative reserve. The provision for credit losses on loans for the 2024 period was primarily due to loan growth during the period.

The Company recognized net recoveries of $156,000 for the three-month period ended March 31, 2025 compared to net charge-offs of $110,000 for the same period in 2024.

Noninterest Income. Noninterest income decreased $150,000 for the three-month period ended March 31, 2025 as compared to the same period in 2024. The decrease was due primarily to a $539,000 decrease in other income, partially offset by a $154,000 increase in service charges on deposit accounts and a $127,000 increase in net gain on sales of SBA loans. The decrease in other income in 2025 was primarily due to $492,000 gain on the sale of mortgage servicing rights during the 2024 period with no corresponding amount for 2025.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Noninterest Expense. Noninterest expense increased $1.9 million for the three-month period ended March 31, 2025 as compared to the same period in 2024. The increase was due primarily to increases in compensation and benefits and other operating expenses of $940,000 and $948,000, respectively. The increase in compensation and benefits was primarily due to an increase in bonus and incentive accruals in 2025. The increase in other operating expenses was primarily due a $656,000 reversal of accrued loss contingencies for SBA-guaranteed loans in the 2024 period compared to a reversal of $41,000 for the same period in 2025 and an adjustment to the valuation allowance related to the sale of residential mortgage servicing rights of $247,000 in 2024 with no corresponding amount in 2025.

Income Tax Expense. The Company recognized income tax expense of $589,000 for the three-month period ended March 31, 2025 as compared to $866,000 for the same period in 2024. The decrease is due primarily to greater utilization of investment tax credits in the 2025 period. The effective tax rate for 2025 was 9.7% compared to 14.9% for 2024. The effective tax rate is well below the statutory tax rate of 21% primarily due to the recognition of investment tax credits related to solar projects in both the 2025 and 2024 periods.

Results of Operations for the Six Months Ended March 31, 2025 and 2024

Overview. The Company reported net income of $11.7 million, or $1.68 per diluted share, for the six-month period ended March 31, 2025 compared to net income of $5.8 million, or $0.85 per diluted share, for the six-month period ended March 31, 2024.

Net Interest Income. Net interest income increased $3.0 million, or 10.6%, for the six-month period ended March 31, 2025 as compared to the same period in 2024. Average interest-earning assets increased $88.1 million and average interest-bearing liabilities increased $97.8 million when comparing the two periods. The tax-equivalent net interest margin was 2.84% for 2025 compared to 2.67% for 2024.

Total interest income increased $4.6 million when comparing the two periods due primarily to an increase in the average balance of interest-earning assets of $88.1 million, from $2.20 billion for 2024 to $2.28 billion for 2025, and an increase in the average tax equivalent yield on interest-earning assets from 5.43% for 2024 to 5.63% for 2025. The increase in the average balance of interest-earning assets was due primarily to a $92.6 million increase in the average balance of total loans.

Total interest expense increased $1.6 million due to an increase in the average balance of interest-bearing liabilities of $97.8 million, from $1.90 billion for 2024 to $2.00 billion for 2025, and an increase in the average cost of interest-bearing liabilities from 3.17% for 2024 to 3.18% for 2025.

Average Balance Sheets. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs for the six-month periods ended March 31, 2025 and 2024. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances presented are daily averages. Nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are not material. Tax exempt income on loans and investment securities have been adjusted to a tax equivalent basis using a federal marginal tax rate of 21%.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS


	Six Months Ended March 31,
	2025						2024
			Interest						Interest
	Average		and		Yield/		Average		and		Yield/
	Balance		Dividends		Cost		Balance		Dividends		Cost

	(Dollars in thousands)
Assets:
Interest-bearing deposits with banks	$	16,527	$	378	4.57	%	$	22,457	$	510	4.54	%
Loans (2)		1,978,560		57,615	5.82			1,885,976		53,287	5.65
Investment securities – taxable		102,348		1,835	3.59			103,316		1,866	3.61
Investment securities – nontaxable (2)		161,251		3,434	4.26			158,839		3,349	4.22
FRB and FHLB stock		24,986		1,004	8.04			24,977		573	4.59
Total interest-earning assets		2,283,672		64,266	5.63			2,195,565		59,585	5.43

Noninterest-earning assets		118,222						127,297
Total assets	$	2,401,894					$	2,322,862

Liabilities and equity:
NOW accounts	$	346,710	$	1,479	0.85	%	$	324,882	$	1,240	0.76	%
Money market deposit accounts		403,362		7,350	3.64			310,943		5,644	3.63
Savings accounts		151,000		98	0.13			164,045		111	0.14
Time deposits		761,134		16,748	4.40			668,893		15,541	4.65
Total interest-bearing deposits		1,662,206		25,675	3.09			1,468,763		22,536	3.07

FHLB borrowings		291,546		4,618	3.17			387,324		6,067	3.13
Subordinated debt and other borrowings		48,636		1,526	6.28			48,477		1,617	6.67
Total interest-bearing liabilities		2,002,388		31,819	3.18			1,904,564		30,220	3.17

Noninterest-bearing deposits		184,919						212,307
Other noninterest-bearing liabilities		36,316						47,612
Total liabilities		2,223,623						2,164,483

Total stockholders’ equity		178,271						158,379

Total liabilities and equity	$	2,401,894					$	2,322,862
Net interest income (taxable equivalent basis)				32,447						29,365
Less: taxable equivalent adjustment				(994)						(914)
Net interest income			$	31,453					$	28,451
Interest rate spread (taxable equivalent basis)					2.45	%					2.26	%
Net interest margin (taxable equivalent basis)					2.84	%					2.67	%
Average interest-earning assets to average interest-bearing liabilities					114.05	%					115.28	%

(2) Item impacted by tax equivalent adjustment

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our net interest income on a tax equivalent basis for the six-month periods ended March 31, 2025 and 2024. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume have been allocated proportionally based on the absolute dollar amounts of change in each.


	Three Months Ended March 31, 2025
	Compared to
	Three Months Ended March 31, 2024
	Increase (Decrease)
	Due to
	Rate		Volume		Net
	(In thousands)
Interest income:
Interest-bearing deposits with banks	$	3	$	(135)	$	(132)
Loans		1,673		2,655		4,328
Investment securities – taxable		(13)		(18)		(31)
Investment securities – nontaxable		34		51		85
FRB and FHLB stock		431		—		431
Total interest-earning assets		2,128		2,553		4,681

Interest expense:
Deposits		160		2,979		3,139
Borrowings from FHLB		60		(1,509)		(1,449)
Subordinated debt		(96)		5		(91)
Total interest-bearing liabilities		124		1,475		1,599

Net increase in net interest income (taxable equivalent basis)	$	2,004	$	1,078	$	3,082

Provision for Credit Losses. The Company recognized a credit for credit losses for loans and securities of $848,000 and $7,000, respectively, and a provision for unfunded lending commitments of $169,000 for the six months ended March 31, 2025, compared to a provision for credit losses for loans and securities of $1.2 million and $23,000, respectively, and a credit for unfunded lending commitments of $317,000 for the same period in 2024. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, decreased $4.2 million from $16.9 million at September 30, 2024 to $12.7 million at March 31, 2025.

The Company recognized net recoveries of $38,000 for the six-month period ended March 31, 2025 compared to net charge-offs of $119,000 for the same period in 2024.

Noninterest Income. Noninterest income increased $3.2 million for the six-month period ended March 31, 2025 as compared to the same period in 2024. The increase was due primarily to a $2.5 million net gain on sale of loans due to the bulk sale of home equity lines of credit and $403,000 in net gains on the sale of equity securities during the six months ended March 31, 2025 with no corresponding gains for 2024, partially offset by a $508,000 decrease in other income due to a $495,000 gain recognized on the sale of mortgage servicing rights during the six months ended March 31, 2024 with no corresponding amount for 2025.

Noninterest Expense. Noninterest expense increased $824,000 for the six-month period ended March 31, 2025 as compared to the same period in 2024. The increase was due primarily to increases in other operating expenses and compensation and benefits of $962,000 and $453,000, respectively, partially offset by decreases in professional fees and occupancy and equipment of $454,000 and $380,000, respectively. The increase in other operating expenses was due primarily to a $721,000 reversal of accrued loss contingencies for SBA-guaranteed loans in 2024 compared to a reversal of $148,000 in 2025, a $400,000 sick pay accrual recognized in 2025 with no corresponding amount in 2024, and a decrease of $180,000 in 2025 to reverse previously accrued litigation expenses. The increase in compensation and benefits is primarily due to an increase in bonus and incentive accruals in 2025 compared to 2024. The decrease in

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

professional fees and occupancy and equipment is primarily due to the cessation of national mortgage banking operations in the quarter ended December 31, 2023.

Income Tax Expense. The Company recognized income tax expense of $1.4 million for the six-month period ended March 31, 2025 as compared to $390,000 for the same period in 2024. The increase is due primarily to higher taxable income in the 2025 period, including the aforementioned net gain on sale of loans. The effective tax rate for 2025 was 10.9% compared to 6.3%. The effective tax rate is well below the statutory tax rate of 21% primarily due to the recognition of investment tax credits related to solar projects in both the 2025 and 2024 periods.

Liquidity and Capital Resources

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and FHLB borrowings. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At March 31, 2025, the Bank had cash and cash equivalents of $28.7 million and securities available-for-sale with a fair value of $243.2 million, including $133.6 million that are unpledged. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, borrowing capacity on federal funds purchased lines of credit facilities with other financial institutions, additional collateral eligible for repurchase agreements and borrowing capacity with the Federal Reserve Discount Window. At March 31, 2025, the Bank had the ability to borrow a total of $800.0 million from the FHLB, of which $325.3 million was borrowed and outstanding. In addition, the Bank had the ability to borrow the lesser of $20 million or 25% of the Bank’s equity capital, excluding reserves, using a federal funds purchased line of credit facility with another financial institution at March 31, 2025. The Bank also had three other federal funds line of credit facilities with other financial institutions from which we had the ability to borrow the lesser of $5.0 million or 50% of the Bank’s equity capital, $22 million and $15 million, respectively. The Bank did not have any outstanding federal funds purchased at March 31, 2025. At March 31, 2025 the Bank had the ability to borrow up to $52.7 million from the Federal Reserve using the Discount Window. The Bank had no Federal Reserve borrowings at March 31, 2025.

The Bank’s primary investing activity is the origination of commercial real estate and one-to-four family mortgage loans and, to a lesser extent, consumer, multi-family, commercial business and residential and commercial real estate construction loans. The Bank also invests in U.S. government agency and sponsored enterprises securities, mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies and sponsored enterprises, and municipal bonds.

The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. Historically, the Bank has been able to retain a significant amount of its deposits as they mature. If these maturing deposits do not remain with the Bank, we will be required to seek other sources of funds, including other certificates of deposit and borrowings. As of March 31, 2025, deposits exceeding the FDIC insurance limit of $250,000 per insured account were estimated to be $568.9 million, or 31.8% of total deposits. When excluding Indiana public funds accounts, total uninsured deposits were estimated to be $270.3 million, or 15.1% of total deposits, as of March 31, 2025.

The Company is a separate legal entity from the Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations, to pay any dividends and to repurchase any of its outstanding common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company in any calendar year cannot exceed net income for that year to date plus retained net income (as defined) for the preceding two calendar years. At March 31, 2025, the Company (unconsolidated basis) had liquid assets of $20.8 million.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Capital Management. The Bank is required to maintain specific amounts of capital pursuant to regulatory requirements. As of March 31, 2025, the Bank was in compliance with all regulatory capital requirements that were effective as of such date, with Tier 1 capital (to average total assets), common equity Tier 1 capital (to risk-weighted assets), Tier 1 capital (to risk-weighted assets) and total capital (to risk-weighted assets) ratios of 9.08%, 11.29%, 11.29% and 12.36%, respectively. The regulatory requirements at that date were 5.0%, 6.5%, 8.0% and 10.0%, respectively, in order to be categorized as “well capitalized” under prompt corrective action provisions. At March 31, 2025, the Bank was considered “well-capitalized” under applicable regulatory guidelines.

Off-Balance Sheet Arrangements

In the normal course of operations, the Company engages in a variety of financial transactions that, in accordance with GAAP, are not recorded on the Company’s financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are primarily used to manage customers’ requests for funding and take the form of loan commitments and letters of credit. A further presentation of the Company’s off-balance sheet arrangements is presented in the Company’s Annual Report on Form 10-K, for the year ended September 30, 2024.

For the six-month period ended March 31, 2025, the Company did not engage in any off-balance sheet transactions reasonably likely to have a material effect on the Company’s consolidated financial condition, results of operations or cash flows.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I – ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Qualitative Aspects of Market Risk. Market risk is the risk that the estimated fair value of our assets, liabilities, and derivative financial instruments will decline as a result of changes in interest rates or financial market volatility, or that our net income will be significantly reduced by interest rate changes.

The Company’s principal financial objective is to achieve long-term profitability while reducing its exposure to fluctuating market interest rates by operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity. The Company has sought to reduce the exposure of its earnings to changes in market interest rates by attempting to manage the mismatch between asset and liability maturities and interest rates. In order to reduce the exposure to interest rate fluctuations, the Company has developed strategies to manage its liquidity, shorten its effective maturities of certain interest-earning assets and decrease the interest rate sensitivity of its asset base. Management has sought to decrease the average maturity of its assets by emphasizing the origination of short-term residential mortgage, commercial mortgage and commercial business loans, which are retained by the Company for its portfolio, and by generally selling all fixed rate residential mortgage loans in the secondary market. The Company relies on retail deposits as its primary source of funds. Management believes the primary use of retail deposits, complimented with a modest allocation of brokered and reciprocal certificates of deposit and FHLB borrowings, reduce the effects of interest rate fluctuations because they generally represent a more stable source of funds.

Quantitative Aspects of Market Risk. Potential cash flows, sales, or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily from our normal business activities of gathering deposits and extending loans. Many factors affect our exposure to changes in interest rates, such as general economic and financial conditions, customer preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. Our earnings can also be affected by the monetary and fiscal policies of the U.S. Government and its agencies, particularly the Federal Reserve Board. Furthermore, the Company does not engage in hedging activities (other than the use of forward mortgage loan sale contracts in connection with our mortgage banking activities) or purchase high-risk derivative instruments, and also is not subject to foreign currency exchange rate risk or commodity price risk.

An element in our ongoing process is to measure and monitor interest rate risk using a Net Interest Income at Risk simulation to model the interest rate sensitivity of the balance sheet and to quantify the impact of changing interest rates on the Company. The model quantifies the effects of various possible interest rate scenarios on projected net interest income over a one-year horizon. The model assumes a semi-static balance sheet and measures the impact on net interest income relative to a base case scenario of hypothetical changes in interest rates over twelve months and provides no effect given to any steps that management might take to counter the effect of the interest rate movements. The scenarios include prepayment assumptions, changes in the level of interest rates, the shape of the yield curve, and spreads between market interest rates in order to capture the impact from re-pricing, yield curve, option, and basis risks.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Results of our simulation modeling, which assumes an immediate and sustained parallel shift in market interest rates, project that the Company’s net interest income could change as follows over a one-year horizon, relative to our base case scenario:


	At March 31, 2025				At September 30,2024
Immediate Change	One Year Horizon				One Year Horizon
in the Level	Dollar		Percent		Dollar		Percent
of Interest Rates	Change		Change		Change		Change

	(Dollars in thousands)
300bp	$	(4,886)	(6.63)	%	$	(6,833)	(10.11)	%
200bp		(3,455)	(4.69)			(4,475)	(6.62)
100bp		(1,898)	(2.57)			(2,486)	(3.68)
(100)bp		2,400	3.25			3,209	4.75
(200)bp		4,820	6.54			6,339	9.38

At March 31, 2025, our simulated exposure to an increase in interest rates shows that an immediate and sustained increase in rates of 1.00% would decrease our net interest income by $1.9 million, or 2.57%, over a one year horizon compared to a flat interest rate scenario. Furthermore, rate increases of 2.00% and 3.00% would cause net interest income to decrease by 4.69% and 6.63%, respectively. An immediate and sustained decrease in rates of 1.00% would increase our net interest income by $2.4 million, or 3.25%, over a one year horizon compared to a flat interest rate scenario while a rate decrease of 2.00% would cause our net interest income to increase by 6.54%. All estimated changes presented in the above table are within policy guidelines approved by the Company’s Board of Directors.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 4

CONTROLS AND PROCEDURES

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, as of March 31, 2025, the principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls. There have been no changes in our internal control over financial reporting that occurred during the three -months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

Periodically, there have been various claims and lawsuits involving the Bank, primarily as plaintiff, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans and other issues incident to the Bank’s business. As of March 31, 2025, the Company is not a party to any legal proceedings that we believe require disclosure; warrant the accrual of a loss contingency; or would have a material adverse effect the Company’s financial condition, results of operations, or cash flow.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K, for the year ended September 30, 2024 which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors described in our Annual Report on Form 10-K. However, these are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART II

OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

The following table presents information regarding the Company’s stock repurchase activity during the quarter ended March 31, 2025:


				(c)	(d)
				Total number of shares	Maximum number (or
	(a)	(b)		(or units) purchased as	appropriate dollar value) of
	Total number of	Average price		part of publicly	shares (or units) that may yet
	shares (or units)	paid per share		announced plans or	be purchased under the plans
Period	purchased	(or unit)		programs (1)	or programs
January 1, 2025 through January 31, 2025	—	$	—	—	11,523
February 1, 2025 through February 28, 2025	—	$	—	—	11,523
March 1, 2025 through March 31, 2025	1,437	$	25.09	1,437	10,086
Total	1,437	$	25.09	1,437	10,086

(1)

On August 16, 2021, the Company announced that its Board of Directors authorized a stock repurchase program to acquire up to 356,220 shares, or 5.0% of the Company’s outstanding common stock. This replaces the previously existing stock repurchase program announced by the Company on November 16, 2012, which had 346,776 shares (split-adjusted) remaining for repurchase.

Item 3.

Defaults upon Senior Securities

Not applicable.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

During the three months ended March 31, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of SEC Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement “ (as such term is defined in Item 408 of SEC Regulation S-K).

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FIRST SAVINGS FINANCIAL GROUP, INC.

PART II

OTHER INFORMATION

Item 6.

Exhibits

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1		Section 1350 Certification of Chief Executive Officer

32.2		Section 1350 Certification of Chief Financial Officer

101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statement of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) related notes

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		FIRST SAVINGS FINANCIAL GROUP, INC.
		(Registrant)


Dated	May 7, 2025	BY:	/s/ Larry W. Myers
			Larry W. Myers
			President and Chief Executive Officer

Dated	May 7, 2025	BY:	/s/ Anthony A. Schoen
			Anthony A. Schoen
			Chief Financial Officer

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