LOANS AND LEASES

3 Months Ended

Mar. 31, 2025

First Financial offers clients a variety of commercial and consumer loan and lease products with diverse interest rates and payment terms. Commercial loan categories include C&I, CRE, construction real estate and lease financing. Consumer loan categories include residential real estate, home equity, installment and credit card.

Lending activities are primarily concentrated in states where the Bank operates banking centers (Ohio, Indiana, Kentucky and Illinois). First Financial also has certain specialty lending platforms that extend beyond the geographic banking center footprint. These specialty finance businesses provide insurance premium financing, equipment lease financing and financing to franchise owners and clients within the financial services industry.

Credit Quality. To facilitate the monitoring of credit quality for commercial loans, First Financial utilizes the following categories of credit grades:

Pass - Higher quality loans that do not fit any of the other categories described below.

Special Mention - First Financial assigns a special mention rating to loans and leases with potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan, lease or First Financial's credit position at some future date.

Substandard - First Financial assigns a substandard rating to loans or leases that are inadequately protected by the current sound financial worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans and leases have well-defined weaknesses that jeopardize repayment of the debt. Substandard loans and leases are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not addressed.

Doubtful - First Financial assigns a doubtful rating to loans and leases with all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans.

The credit grades previously described are derived from standard regulatory rating definitions and are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

First Financial considers repayment performance to be the best indicator of credit quality for consumer loans. Consumer loans that have principal and interest payments that are past due by 90 days or more are generally classified as nonperforming. In 2022 and all years prior that are presented below, consumer loans that had been modified in a TDR were classified as nonperforming.

The following table sets forth the Company's loan portfolio at March 31, 2025 by risk attribute and origination date as well as current period gross chargeoffs:


(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Revolving		Total
Commercial & industrial
Pass	$	249,537	$	750,629	$	642,903	$	549,742	$	274,763	$	366,752	$	2,834,326	$	905,858	$	3,740,184
Special mention	1,289		2,953		1,987		2,226		6,324		698		15,477		18,568		34,045
Substandard	57		8,129		1,800		14,921		5,492		4,037		34,436		23,685		58,121
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	250,883	$	761,711	$	646,690	$	566,889	$	286,579	$	371,487	$	2,884,239	$	948,111	$	3,832,350
YTD Gross chargeoffs	$	0	$	49	$	7,235	$	249	$	138	$	373	$	8,044	$	134	$	8,178
Lease financing
Pass	$	14,723	$	251,913	$	209,977	$	62,902	$	10,333	$	5,398	$	555,246	$	0	$	555,246
Special mention	0		0		131		5,698		0		0		5,829		0		5,829
Substandard	957		262		5,564		4,933		669		148		12,533		0		12,533
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	15,680	$	252,175	$	215,672	$	73,533	$	11,002	$	5,546	$	573,608	$	0	$	573,608
YTD Gross chargeoffs	$	0	$	261	$	868	$	325	$	0	$	0	$	1,454	$	0	$	1,454
Construction real estate
Pass	$	33,701	$	171,982	$	222,781	$	280,274	$	40,872	$	19,077	$	768,687	$	0	$	768,687
Special mention	0		0		0		22,819		0		16,420		39,239		0		39,239
Substandard	0		0		0		4,984		10,500		1,365		16,849		0		16,849
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	33,701	$	171,982	$	222,781	$	308,077	$	51,372	$	36,862	$	824,775	$	0	$	824,775
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial real estate - investor
Pass	$	59,386	$	477,208	$	361,179	$	466,147	$	316,862	$	1,139,850	$	2,820,632	$	34,309	$	2,854,941


(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Term Total		Revolving		Total
Special mention	0		13,738		30,297		31,584		0		29,485		105,104		0		105,104
Substandard	0		0		0		10,600		0		30,822		41,422		0		41,422
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	59,386	$	490,946	$	391,476	$	508,331	$	316,862	$	1,200,157	$	2,967,158	$	34,309	$	3,001,467
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial real estate - owner
Pass	$	34,992	$	197,886	$	122,353	$	158,108	$	90,798	$	308,291	$	912,428	$	20,862	$	933,290
Special mention	0		575		0		213		743		1,772		3,303		0		3,303
Substandard	107		2,542		0		856		3,111		12,204		18,820		0		18,820
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	35,099	$	201,003	$	122,353	$	159,177	$	94,652	$	322,267	$	934,551	$	20,862	$	955,413
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential real estate
Performing	$	16,701	$	133,020	$	331,848	$	323,001	$	230,719	$	424,819	$	1,460,108	$	0	$	1,460,108
Nonperforming	0		195		532		2,214		4,704		11,951		19,596		0		19,596
Total	$	16,701	$	133,215	$	332,380	$	325,215	$	235,423	$	436,770	$	1,479,704	$	0	$	1,479,704
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Home equity
Performing	$	7,633	$	30,250	$	23,328	$	19,776	$	23,984	$	46,801	$	151,772	$	714,883	$	866,655
Nonperforming	0		0		316		106		140		565		1,127		4,720		5,847
Total	$	7,633	$	30,250	$	23,644	$	19,882	$	24,124	$	47,366	$	152,899	$	719,603	$	872,502
YTD Gross chargeoffs	$	0	$	0	$	14	$	0	$	8	$	42	$	64	$	22	$	86
Installment
Performing	$	3,985	$	10,315	$	7,082	$	18,540	$	9,362	$	5,209	$	54,493	$	63,327	$	117,820
Nonperforming	10		55		108		601		291		60		1,125		727		1,852
Total	$	3,995	$	10,370	$	7,190	$	19,141	$	9,653	$	5,269	$	55,618	$	64,054	$	119,672
YTD Gross chargeoffs	$	0	$	229	$	303	$	617	$	168	$	0	$	1,317	$	4	$	1,321
Credit cards
Performing	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	64,411	$	64,411
Nonperforming	0		0		0		0		0		0		0		228		228
Total	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	64,639	$	64,639
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	474	$	474
Total Loans	$	423,078	$	2,051,652	$	1,962,186	$	1,980,245	$	1,029,667	$	2,425,724	$	9,872,552	$	1,851,578	$	11,724,130
Total YTD Gross Chargeoffs	$	0	$	539	$	8,420	$	1,191	$	314	$	415	$	10,879	$	634	$	11,513

The following table sets forth the Company's loan portfolio at December 31, 2024 by risk attribute and origination date:


(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Term Total		Revolving		Total
Commercial & industrial
Pass	$	819,600	$	710,857	$	592,046	$	298,770	$	162,136	$	241,857	$	2,825,266	$	890,880	$	3,716,146
Special mention	5,594		1,964		1,971		620		2,859		71		13,079		16,211		29,290
Substandard	4,873		3,433		22,508		8,533		347		4,309		44,003		26,419		70,422
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	830,067	$	716,254	$	616,525	$	307,923	$	165,342	$	246,237	$	2,882,348	$	933,510	$	3,815,858
YTD Gross chargeoffs	$	318	$	1,264	$	5,293	$	4,106	$	147	$	3,295	$	14,423	$	225	$	14,648
Lease financing
Pass	$	228,132	$	253,776	$	70,608	$	11,480	$	5,309	$	1,137	$	570,442	$	0	$	570,442
Special mention	0		644		10,171		550		0		0		11,365		0		11,365
Substandard	292		10,225		4,893		129		8		691		16,238		0		16,238
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	228,424	$	264,645	$	85,672	$	12,159	$	5,317	$	1,828	$	598,045	$	0	$	598,045
YTD Gross chargeoffs	$	0	$	1,008	$	451	$	66	$	0	$	1,867	$	3,392	$	0	$	3,392
Construction real estate
Pass	$	139,377	$	213,300	$	322,493	$	40,740	$	1,590	$	17,352	$	734,852	$	0	$	734,852
Special mention	3,525		0		12,737		0		17,832		0		34,094		0		34,094
Substandard	0		0		0		10,500		0		0		10,500		0		10,500
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	142,902	$	213,300	$	335,230	$	51,240	$	19,422	$	17,352	$	779,446	$	0	$	779,446
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial real estate - investor
Pass	$	515,950	$	376,740	$	497,047	$	340,115	$	231,922	$	949,772	$	2,911,546	$	36,716	$	2,948,262
Special mention	13,738		30,454		18,423		4,282		106		27,144		94,147		0		94,147
Substandard	0		0		10,600		0		4,950		35,425		50,975		0		50,975
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	529,688	$	407,194	$	526,070	$	344,397	$	236,978	$	1,012,341	$	3,056,668	$	36,716	$	3,093,384
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	788	$	9,837	$	10,625	$	0	$	10,625
Commercial real estate - owner
Pass	$	202,580	$	126,550	$	161,401	$	94,052	$	128,068	$	215,902	$	928,553	$	17,268	$	945,821
Special mention	1,839		134		213		2,210		504		1,173		6,073		0		6,073
Substandard	0		0		858		3,159		1,249		11,200		16,466		0		16,466
Doubtful	0		0		0		0		0		0		0		0		0
Total	$	204,419	$	126,684	$	162,472	$	99,421	$	129,821	$	228,275	$	951,092	$	17,268	$	968,360
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	8	$	8	$	0	$	8
Residential real estate
Performing	$	129,008	$	321,232	$	324,180	$	233,355	$	169,901	$	264,312	$	1,441,988	$	0	$	1,441,988
Nonperforming	198		541		1,323		4,412		4,300		9,522		20,296		0		20,296
Total	$	129,206	$	321,773	$	325,503	$	237,767	$	174,201	$	273,834	$	1,462,284	$	0	$	1,462,284
YTD Gross chargeoffs	$	0	$	0	$	25	$	16	$	0	$	102	$	143	$	0	$	143
Home equity
Performing	$	30,799	$	23,969	$	20,280	$	24,878	$	28,882	$	21,160	$	149,968	$	692,993	$	842,961
Nonperforming	61		328		124		144		7		354		1,018		5,060		6,078
Total	$	30,860	$	24,297	$	20,404	$	25,022	$	28,889	$	21,514	$	150,986	$	698,053	$	849,039
YTD Gross chargeoffs	$	37	$	37	$	0	$	186	$	5	$	182	$	447	$	0	$	447
Installment
Performing	$	12,356	$	9,997	$	22,244	$	11,500	$	2,004	$	3,759	$	61,860	$	69,153	$	131,013


(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Term Total		Revolving		Total
Nonperforming	190		116		607		268		20		16		1,217		821		2,038
Total	$	12,546	$	10,113	$	22,851	$	11,768	$	2,024	$	3,775	$	63,077	$	69,974	$	133,051
YTD Gross chargeoffs	$	382	$	1,120	$	4,066	$	1,779	$	71	$	42	$	7,460	$	0	$	7,460
Credit cards
Performing	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	61,969	$	61,969
Nonperforming	0		0		0		0		0		0		0		342		342
Total	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	62,311	$	62,311
YTD Gross chargeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	2,586	$	2,586
Total Loans	$	2,108,112	$	2,084,260	$	2,094,727	$	1,089,697	$	761,994	$	1,805,156	$	9,943,946	$	1,817,832	$	11,761,778
Total YTD Gross Chargeoffs	$	737	$	3,429	$	9,835	$	6,153	$	1,011	$	15,333	$	36,498	$	2,811	$	39,309

Delinquency. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the date of the scheduled payment.

Loan delinquency, including loans classified as nonaccrual, was as follows:


	As of March 31, 2025
(Dollars in thousands)	30 – 59 days past due		60 – 89 days past due		> 89 days past due		Total past due		Current		Total		> 89 days past due and still accruing
Loans
Commercial & industrial	$	3,926	$	1,418	$	2,903	$	8,247	$	3,824,103	$	3,832,350	$	0
Lease financing	1,289		343		5,243		6,875		566,733		573,608		0
Construction real estate	0		0		0		0		824,775		824,775		0
Commercial real estate-investor	0		0		16,948		16,948		2,984,519		3,001,467		0
Commercial real estate-owner	586		0		6,373		6,959		948,454		955,413		0
Residential real estate	4,894		1,171		3,899		9,964		1,469,740		1,479,704		0
Home equity	2,139		893		1,175		4,207		868,295		872,502		0
Installment	727		494		465		1,686		117,986		119,672		0
Credit card	474		405		228		1,107		63,532		64,639		228
Total	$	14,035	$	4,724	$	37,234	$	55,993	$	11,668,137	$	11,724,130	$	228


	As of December 31, 2024
(Dollars in thousands)	30 – 59 days past due		60 – 89 days past due		> 89 days past due		Total past due		Current		Total		> 89 days past due and still accruing
Loans
Commercial & industrial	$	4,521	$	1,598	$	2,470	$	8,589	$	3,807,269	$	3,815,858	$	0
Lease financing	3,096		3,085		3,386		9,567		588,478		598,045		19
Construction real estate	0		10,500		0		10,500		768,946		779,446		0
Commercial real estate-investor	0		0		17,360		17,360		3,076,024		3,093,384		0
Commercial real estate-owner	856		0		6,144		7,000		961,360		968,360		0
Residential real estate	6,217		154		5,968		12,339		1,449,945		1,462,284		0
Home equity	1,902		1,102		1,428		4,432		844,607		849,039		0
Installment	914		569		402		1,885		131,166		133,051		0
Credit card	450		196		342		988		61,323		62,311		342
Total	$	17,956	$	17,204	$	37,500	$	72,660	$	11,689,118	$	11,761,778	$	361

Financial Difficulty Modifications. FDM might 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 an other-than-insignificant payment delay. In some cases, the Company might 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 might be granted. Loans included in the "combination" column in the table that

follows have more than one modification made to the same loan within the current reporting period. 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. Payment deferrals may be up to one year and have minimal financial impact since the deferred payments are paid at maturity.

The following tables provide the amortized cost basis, as of the period end date, of FDMs that were granted modifications during the three months ended March 31, 2025 and 2024:



	Three months ended March 31, 2025
(Dollars in thousands)	Principal forgiveness		Payment delay		Term extension		Interest rate reduction		Combination: Term extension and interest rate reduction		Total		Percent of total class of loans
Commercial & industrial	$	0	$	0	$	240	$	0	$	0	$	240	0.01	%


Commercial real estate-investor	0		2,274		0		0		0		2,274		0.08	%

Residential real estate	0		657		0		0		0		657		0.04	%
Home equity	0		71		0		0		0		71		0.01	%

Total	$	0	$	3,002	$	240	$	0	$	0	$	3,242	0.03	%


	Three months ended March 31, 2024
(Dollars in thousands)	Principal forgiveness		Payment delay		Term extension		Interest rate reduction		Combination: Term extension and interest rate reduction		Total		Percent of total class of loans
Commercial & industrial	$	0	$	0	$	7,548	$	0	$	0	$	7,548	0.21	%




Residential real estate	0		556		0		0		0		556		0.04	%
Home equity	0		40		0		0		0		40		0.01	%

Total	$	0	$	596	$	7,548	$	0	$	0	$	8,144	0.07	%

The following table provides the financial effect of FDMs granted during the three months ended March 31, 2025 and 2024:


	Three months ended March 31, 2025
(Dollars in thousands)	Principal forgiveness		Weighted average interest rate reduction		Weighted average term extension
Commercial & industrial	$	0	0.00	%	0.5 years







Total	$	0	0.00	%	0.5 years

	Three months ended March 31, 2024
(Dollars in thousands)	Principal forgiveness		Weighted average interest rate reduction		Weighted average term extension
Commercial & industrial	$	0	0.00	%	0.2 years







Total	$	0	0.00	%	0.2 years

The Company has committed to lend no additional amounts to the borrowers who have been classified as FDM as of either March 31, 2025 or March 31, 2024. Additionally, there were ten FDMs totaling $1.0 million that defaulted during the three months ended March 31, 2025 and were classified as FDMs during the twelve months preceding the default date. There were three FDMs with a balance of $0.2 million that defaulted during the three months ended March 31, 2024 and were classified as FDMs during the twelve months preceding the default date.

The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table provides the performance of loans that have been modified during the twelve months preceding March 31, 2025 and 2024.


	Twelve months ended March 31, 2025
(Dollars in thousands)	Current		30 – 59 days past due		60 – 89 days past due		> 89 days past due		Total
Commercial & industrial	$	8,850	$	0	$	0	$	367	$	9,217

Construction real estate	10,500		0		0		0		10,500
Commercial real estate-investor	2,274		0		0		0		2,274

Residential real estate	1,547		700		137		57		2,441
Home equity	332		0		97		92		521

Total	$	23,503	$	700	$	234	$	516	$	24,953


	Twelve months ended March 31, 2024
(Dollars in thousands)	Current		30 – 59 days past due		60 – 89 days past due		> 89 days past due		Total
Commercial & industrial	$	7,897	$	0	$	0	$	2,266	$	10,163




Residential real estate	1,091		163		173		304		1,731
Home equity	130		67		0		21		218

Total	$	9,118	$	230	$	173	$	2,591	$	12,112

Nonaccrual loans. Loans are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful or when principal or interest payments are 90 days or more past due. Generally, loans are classified as nonaccrual due to the continued failure to adhere to contractual payment terms by the borrower, coupled with other pertinent factors. When a loan is classified as nonaccrual, the accrual of interest income is discontinued and previously accrued but unpaid interest is reversed. Any payments received while a loan is on nonaccrual status are applied as a reduction to the carrying value of the loan. A loan classified as nonaccrual may return to accrual status if none of the principal and interest is due and unpaid, and the Bank expects repayment of the remaining contractual principal and interest.

First Financial individually reviews all nonaccrual loan relationships greater than $250,000 to determine if a reserve is required based on the borrower’s overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. These reserves are based on discounted cash flows using the loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans.

The following table provides information on nonaccrual loans and leases:


	March 31, 2025						December 31, 2024
(Dollars in thousands)	Nonaccrual loans with a related ACL		Nonaccrual loans with no related ACL		Total nonaccrual		Nonaccrual loans with a related ACL		Nonaccrual loans with no related ACL		Total nonaccrual
Nonaccrual loans
Commercial & industrial	$	3,687	$	3,962	$	7,649	$	1,939	$	4,702	$	6,641
Lease financing	4,241		2,246		6,487		1,982		4,245		6,227
Construction real estate	0		0		0		0		0		0
Commercial real estate	2,392		23,344		25,736		0		32,303		32,303
Residential real estate	0		16,044		16,044		0		16,700		16,700
Home equity	0		2,920		2,920		0		3,418		3,418
Installment	0		719		719		0		684		684
Total nonaccrual loans	$	10,320	$	49,235	$	59,555	$	3,921	$	62,052	$	65,973

Interest income on nonaccrual loans and leases was insignificant for the three months ended March 31, 2025 and was $0.3 million for the three months ended March 31, 2024.

A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral. The following table presents the amortized cost basis of collateral dependent loans by class of loan.


	March 31, 2025
	Type of Collateral
(Dollar in thousands)	Business assets		Commercial real estate		Equipment		Land		Residential real estate		Other		Total
Class of loan
Commercial & industrial	$	2,380	$	0	$	2,313	$	0	$	0	$	2,956	$	7,649
Lease financing	0		0		6,487		0		0		0		6,487
Commercial real estate-investor	0		16,921		0		0		51		0		16,972
Commercial real estate-owner	0		6,870		1,894		0		0		0		8,764
Residential real estate	0		0		0		0		16,044		0		16,044
Home equity	0		0		0		0		2,920		0		2,920
Installment	0		0		0		0		0		719		719
Total	$	2,380	$	23,791	$	10,694	$	0	$	19,015	$	3,675	$	59,555


	December 31, 2024
	Type of Collateral
(Dollar in thousands)	Business assets		Commercial real estate		Equipment		Land		Residential real estate		Other		Total
Class of loan
Commercial & industrial	$	2,527	$	0	$	1,434	$	0	$	0	$	2,680	$	6,641
Lease financing	0		0		6,227		0		0		0		6,227
Commercial real estate-investor	0		26,132		0		0		27		0		26,159
Commercial real estate-owner	0		4,250		1,894		0		0		0		6,144
Residential real estate	0		0		0		0		16,700		0		16,700
Home equity	0		0		0		0		3,418		0		3,418
Installment	0		0		0		0		0		684		684
Total	$	2,527	$	30,382	$	9,555	$	0	$	20,145	$	3,364	$	65,973

Lease financing - Lessor. First Financial originates both sales-type and direct financing leases, and the Company manages and reviews lease residuals in accordance with its credit policies. Payments are generally fixed, however, in some agreements, lease payments are based on a rate or index plus a spread. Sales-type lease contracts contain the ability to purchase the underlying equipment at lease maturity and profit or loss is recognized at lease commencement. Direct financing leases are generally three to five years in length and may be extended at maturity, however, early cancellation may result in a fee to the borrower. For direct financing leases, the net unearned income is deferred and amortized over the life of the lease.

The components of the Company's net investments in direct financing and sales-type leases, which are included in Lease financing on the Consolidated Balance Sheets are as follows:


(Dollar in thousands)	March 31, 2025		December 31, 2024
Direct financing and sales-type leases
Lease receivables	$	562,901	$	581,651
Unguaranteed residual values	10,707		16,394
Total net investment in direct financing and sales-type leases	$	573,608	$	598,045

Interest income for direct financing and sales-type leases was $9.0 million and $8.4 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

The remaining maturities of lease receivables were as follows:


(Dollars in thousands)	Direct financing and Sales-type
Remainder of 2025	$	151,198
2026	178,410
2027	148,484
2028	86,667
2029	46,293
Thereafter	28,510
Total lease payments	639,562
Less: unearned interest income	(76,661)
Net lease receivables	$	562,901

OREO. OREO consists of properties acquired by the Company primarily through the loan foreclosure or repossession process, that results in partial or total satisfaction of problem loans.

Changes in OREO were as follows:


	Three months ended
	March 31,
(Dollars in thousands)		2025		2024
Balance at beginning of period		$	64	$	106
Additions
Commercial real estate		0		0
Residential real estate		149		55
Total additions		149		55
Disposals
Commercial real estate		0		0
Residential real estate		0		0
Total disposals		0		0
Valuation adjustment
Commercial real estate		0		0
Residential real estate		0		0
Total valuation adjustment		0		0
Balance at end of period		$	213	$	161