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HomeIndustriesComputers/ElectronicsTech StocksTech StocksThe AI server maker now expects gross margins to be in the range of 15% to 17% thanks to an improving customer and product mixJuly 21, 2026, 6:11 p.m. ET

Super Micro Computer delivered good news to investors on Tuesday, sharing in preliminary results for its fiscal fourth quarter that the company’s gross margins are expected to double from previous guidance.

Shares of Super Micro SMCI were surging 19% in after-hours trading. The company expects GAAP and non-GAAP gross margins for the quarter to be between 15% and 17%, roughly doubling from the its prior guidance range of 8.2% to 8.4%. Management attributed the surprise increase to “a favorable customer and product mix.”

MUNSTER, Ind.--(BUSINESS WIRE)--First Financial Bancorp. (Nasdaq: FFBC) and Finward Bancorp (Nasdaq: FNWD) jointly announced today that they have entered into an agreement by which First Financial will acquire Munster-based Finward in an all-stock transaction, further expanding First Financial's presence in the economically robust Chicagoland market with a strong core deposit franchise including 24 financial centers and a 116 year presence in the Northwest Indiana and Chicago markets. Combined w.

Earnings per diluted share of $0.73; $0.80 on an adjusted(1) basis is highest in Company history  Return on average assets of 1.37%; 1.50% on an adjusted(1) basis  Net interest margin on FTE basis(1) of 3.98%  Loan growth of $240 million, or 7.1% on an annualized basis  Net charge-offs 0.20% of total loans  ROTCE of 18.0%; 19.7% on adjusted(1) basis  Board of Directors approved quarterly dividend increase to $0.26 to be paid in 3Q26  Agreement to acquire Finward Bancorp, the holding company for Peoples Bank, in all stock transaction  , /PRNewswire/ -- First Financial Bancorp. (Nasdaq: FFBC) ("First Financial" or the "Company") announced financial results for the three and six months ended June 30, 2026, as well as the pending acquisition of Finward Bancorp ("Finward").

Second Quarter Financial Results

For the three months ended June 30, 2026, the Company reported net income of $76.5 million, or $0.73 per diluted common share.  These results compare to net income of $74.4 million, or $0.71 per diluted common share, for the first quarter of 2026.  For the six months ended June 30, 2026, First Financial had earnings per diluted share of $1.44 compared to $1.27 for the same period in 2025.

Return on average assets for the second quarter of 2026 was 1.37% while return on average tangible common equity was 17.95%(1).  These compare to return on average assets of 1.34% and return on average tangible common equity of 17.78%(1) in the first quarter of 2026.

Second quarter 2026 highlights include:

Robust net interest margin of 3.96%, or 3.98% on a fully tax-equivalent basis(1)  1 bp decline from first quarter driven by a 7 bp decline in asset yields, which was partially offset by a 6 bp decrease in funding costs Decline in loan accretion diluted net interest margin 5 bps; accretion decline primarily related to lower-than-expected prepayment rates on acquired mortgage loans   Noninterest income of $73.8 million; $71.9 million on an adjusted(1) basis  Adjustments include a $0.3 million loss on securities and $2.2 million of acquisition-related adjustments  Leasing business income continues strong performance with a 5.3% increase from first quarter to $22.8 million Other noninterest income increased $3.6 million, or 111.3%, from the linked quarter, due to higher income from bank owned life insurance and limited partnership investments Foreign exchange income of $13.1 million Noninterest expenses of $161.5 million, or $149.1 million as adjusted(1); 3.7% decrease from linked quarter  Adjustments(1) include $11.6 million of acquisition related expenses and $0.8 million of amortization of tax credit investments and other expenses not expected to recur Decrease from prior quarter driven by lower compensation costs Efficiency ratio of 61.2%; 56.8% as adjusted(1)  Strong loan growth during the quarter  End of period loan balances increased $240 million compared to the linked quarter Quarterly growth was broad-based, highlighted by C&I, Summit and seasonal growth from Agile  Stable deposit balances during the quarter  Total average deposit balances increased $41 million, or 0.9% on an annualized basis  Growth in interest-bearing demand accounts and seasonal influx of public funds offset a decline in time deposits and brokered CDs Excluding brokered CD, average deposits increased $168.6 million  Total Allowance for Credit Losses of $208.2 million; Total quarterly provision expense of $8.2 million  Loans and leases - ACL of $189.9 million ACL to total loans of 1.38%; increased 2 bps from linked quarter Unfunded Commitments - ACL of $18.3 million Annualized net charge-offs were 20 bps of total loans; 15 bp decline from linked quarter Slight declines in classified and nonperforming assets  Capital ratios remain strong Total capital ratio increased 5 bps to 15.75%  Tier 1 common equity increased 11 bps to 12.33%  Tangible common equity of 8.24%(1); 9.30%(1) excluding impact from AOCI  Tangible book value per share of $16.64(1); 3.0% increase from linked quarter  Additionally, the Board of Directors approved a quarterly dividend of $0.26 per common share for the next regularly scheduled dividend, payable on September 15, 2026 to shareholders of record as of September 1, 2026.

Archie Brown, President and CEO commented on Second Quarter results, "The second quarter was another active quarter as we remained focused on post-integration efforts related to the Westfield acquisition and successfully converted BankFinancial systems.  Our second quarter operating results were strong, and we are very pleased with our performance.  Adjusted(1) net income for the period was a record $83.9 million or $0.80 per share, with an adjusted(1) return on assets of 1.50% and an adjusted(1) return on tangible common equity of 19.7%.  These adjusted(1) earnings per share represented an 8% increase from the second quarter of 2025 and were driven by increases in earning assets from a combination of organic loan growth and our recent acquisitions.  Our net interest margin was stable at approximately 4.00% as lower funding costs offset a decline in loan accretion income.  Assuming no significant changes in interest rates, we expect our margin to remain stable over the near-term."

Mr. Brown continued, "Loan growth for the quarter was 7% on an annualized basis, and reflected continued momentum across the portfolio with C&I, Agile and Summit being the primary drivers of our increase in balances.  Loan originations increased 23% over the first quarter and advanced stage pipelines remain strong heading into the back half of the year.  We expect loan production to remain healthy and contribute to solid growth in the third quarter."

Mr. Brown commented on fee income and expenses, "Second quarter adjusted(1) fee income was below our expectations.  After a very strong first quarter, lower foreign exchange, swap income and investment banking fees led to a decline in total noninterest income compared to the linked quarter.  While results in these business lines can vary from quarter to quarter, we anticipate a rebound in the third quarter.  Conversely, adjusted(1) noninterest expenses were materially lower than the linked quarter, driven by lower commission expense, payroll taxes and acquisition-related synergies.  As of June 30th, virtually all of the expected Westfield cost reductions have been realized, while savings related to the BankFinancial acquisition will gradually phase in over the course of the third quarter with full synergies expected by quarter-end."

Mr. Brown commented on asset quality and capital, "Asset quality was stable for the quarter with net charge-offs declining by 15 basis points to 0.20% of total loans.  Capital levels remain strong with tangible common equity increasing to 8.2% and tangible book value increasing 3% from the linked quarter to $16.64.  No shares were repurchased during the quarter as we focused on integrating recent acquisitions and preparing for the acquisition of Finward." 

Mr. Brown concluded, "The second quarter was another great quarter for our Company.  We achieved record earnings while successfully integrating two bank acquisitions and positioning the Company for continued success in the second half of the year.  Regarding the acquisitions, we are most pleased with how our newer associates have assimilated into the Company.  They remain deeply committed to serving their clients and communities, and their efforts have been instrumental in strong client retention levels.  We are thankful for their dedication, hard work and client-focused approach over the past year.  I am very proud of the work our teams have done throughout the integration process, and their efforts position us for success in our newly expanded markets."

Full detail of the Company's second quarter 2026 performance is provided in the accompanying financial statements and slide presentation. 

(1) Non-GAAP measure.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Finward Bancorp Acquisition

First Financial Bancorp. has agreed to acquire Finward Bancorp, the holding company for Peoples Bank, headquartered in Munster, Indiana Strategically expands First Financial's presence in northwest Indiana and Chicago, with the addition of a low cost core deposit franchise and 24 locations  Finward has approximately $2.0 billion in assets, $1.7 billion in deposits, $1.5 billion in loans and $412 million in assets under management Transaction is expected to be approximately 5% accretive to First Financial's earnings per share First Financial Bancorp. (Nasdaq: FFBC) and Finward Bancorp (Nasdaq: FNWD) jointly announced today that they have entered into an agreement by which First Financial will acquire Munster-based Finward in an all-stock transaction, further expanding First Financial's presence in the economically robust Chicagoland market with a strong core deposit franchise including 24 financial centers and a 116 year presence in the Northwest Indiana and Chicago markets. Combined with the 15 retail locations from First Financial's recent acquisition in the Chicagoland market, the Finward acquisition enhances First Financial's market presence and increases its pro forma deposits in the Chicago metropolitan statistical area by 75% to over $4 billion.

"The addition of Finward Bancorp and Peoples Bank is expected to strategically expand First Financial's ability to serve the consumers and businesses of the Chicagoland and Northwest Indiana markets.  We are excited to partner with a bank with a similar operating philosophy and strong credit culture," said Archie Brown, President and Chief Executive Officer of First Financial Bank. "We have built an impressive combination of retail and commercial banking services, wealth management services, and specialty banking solutions, complemented by our client-centered, community-focused business model, that offers an alternative to larger banks.  To demonstrate our further commitment to Chicago and Northwest Indiana, First Financial has committed to donate $500,000 to its Foundation for the benefit of local organizations in the communities served by Finward, in addition to the $1 million we donated to the Foundation when we entered the Chicago market with the completed acquisition of BankFinancial Corporation in January 2026."

Upon completion of the transaction, Finward's consumer, trust/wealth management and commercial credit lines of business will be incorporated into First Financial's respective business lines, and Peoples Bank employees will become First Financial associates.

"This partnership represents an exciting next chapter for our organization and the communities we serve," said Benjamin Bochnowski, Chief Executive Officer of Peoples Bank. "First Financial shares our deep commitment to customers, employees, shareholders, and the communities that have placed their trust in us for more than 100 years. Together, we are accelerating our common strategy to better serve the Chicagoland and Northwest Indiana markets. We are creating a stronger regional banking franchise with expanded capabilities, greater resources, and a sharper focus on delivering exceptional service. We are confident this partnership will create meaningful opportunities for our customers and employees, while preserving the community-centered values that have defined our organization for generations."

Through this addition, First Financial continues its recent period of growth, including the recent acquisitions of Westfield Bancorp in Northeast Ohio and BankFinancial Corporation in Chicago, and its commercial banking expansion into Chicago, Cleveland and Grand Rapids.  First Financial's Midwestern base includes Chicago, IL; Cincinnati, Dayton, Cleveland and Columbus, OH; Indianapolis, IN; and Louisville, KY.  The acquisition of Finward enhances First Financial's existing Chicagoland footprint that includes its commercial loan production office in Fulton Market; the Agile Premium Finance division in Lincolnshire, IL; and Bannockburn Capital Markets in downtown Chicago.  Additionally in the area, First Financial offers retail and business banking solutions in Northwest Indiana and Northeast Illinois.

Transaction Terms

Under the terms of the agreement, each outstanding share of Finward common stock will be converted into the right to receive 1.35 shares of First Financial common stock, valuing the transaction at approximately $208 million, based on First Financial's closing stock price on July 20, 2026.  The transaction is expected to be approximately 5% accretive to First Financial's earnings per share, and First Financial's tangible book value per share ("TBV") at closing is estimated to be only slightly diluted (0.4% dilution) with an anticipated TBV earnback of 0.6 years.  The merger agreement has been unanimously approved by the Boards of Directors of First Financial and Finward.

The transaction is expected to close in the fourth quarter of 2026, subject to satisfaction of customary closing conditions, regulatory approvals and approval of Finward's shareholders.

Transaction Advisors 

Morgan Stanley & Co. LLC is serving as financial advisor to First Financial. Stephens Inc. is serving as financial advisor to Finward and rendered a fairness opinion to Finward's Board of Directors.  Squire Patton Boggs, (US) LLP is serving as legal counsel to First Financial. Barack Ferrazzano Kirschbaum & Nagelberg LLP is serving as legal counsel to Finward. 

Teleconference / Webcast Information

First Financial's executive management will host a conference call to discuss the Company's financial and operating results on Wednesday, July 22, 2026 at 8:30 a.m. Eastern Time.  Members of the public who would like to listen to the conference call should dial (833) 461-5787 (U.S. toll free), meeting ID 657340574.  The number should be dialed five to ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast via the Investor Relations section of the Company's website at  www.bankatfirst.com.  The webcast will be archived on the Investor Relations section of the Company's website for 12 months.

Press Release and Additional Information on Website

This press release as well as supplemental information are available to the public through the Investor Relations section of First Financial's website at www.bankatfirst.com.

Use of Non-GAAP Financial Measures

This earnings release contains GAAP financial measures and Non-GAAP financial measures where management believes it to be helpful in understanding the Company's results of operations or financial position.  Where Non-GAAP financial measures are used, the comparable GAAP financial measures, as well as a reconciliation to the comparable GAAP financial measure, can be found in the section titled "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties. Examples of forward-looking statements include, but are not limited to, (a) statements regarding First Financial Bancorp's (the "Company" or "First Financial") operations, such as (i) our future operating or financial performance, including revenues, income or loss and earnings per share, (ii) future common stock dividends, (iii) our capital structure, including future capital levels, (iv) our plans, objectives and strategies, and (v) the assumptions that underlie our forward-looking statements; and (b) statements regarding the proposed transaction, such as (i) statements regarding the outlook and expectations of First Financial and Finward Bancorp ("Finward"), respectively, with respect to the proposed transaction, (ii) the strategic benefits and financial benefits of the proposed transaction, including the expected impact of the proposed transactions on the combined First Financial's future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), (iii) the timing of the closing of the proposed transaction, and (iv) the ability to successfully integrate the combined businesses.  Such statements are often characterized by the use of qualified words (and their derivatives) such as "may," "will," "anticipate," "could," "should," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "project" and "intend," as well as words of similar meaning or other statements concerning opinions or judgment of First Financial or Finward or their respective management about future events.  Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results expressed or implied by such forward-looking statements.  Any reference to forward-looking statements by Finward herein is solely related to the proposed transaction.  Such risks, uncertainties and assumptions include, among others, the following:

Risks, uncertainties and assumptions regarding First Financial's operations

economic, market, liquidity, credit, interest rate, operational and technological risks associated with First Financial's business; future credit quality and performance, including our expectations regarding future loan losses and our allowance for credit losses; the effect of and changes in policies and laws or regulatory agencies, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation and regulation relating to the banking industry; management's ability to effectively execute its business plans; pursuit of mergers and acquisitions, including costs or difficulties related to the acquisition and/or integration of any acquired companies; the possibility that any of the anticipated benefits of First Financial's prior or contemplated acquisitions will not be realized or will not be realized within the expected time period; the effect of changes in accounting policies and practices; changes in consumer spending, borrowing and saving and changes in unemployment; changes in customers' performance and creditworthiness; the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;   current and future economic and market conditions, including the effects of changes in housing prices, fluctuations in unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, trade and tariff policies, and any slowdown in global economic growth; our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms; financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services; the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale; the effect of a fall in stock market prices on our brokerage, asset and wealth management businesses; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks; the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; and our ability to develop and execute effective business plans and strategies. Risks, uncertainties and assumptions regarding the proposed transaction

the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined First Financial or the expected benefits of the proposed transaction) and the possibility that the proposed transaction does not close when expected or at all because required regulatory approvals, the approval by Finward's shareholders, or other approvals and the other conditions to closing are not received or satisfied on a timely basis or at all; the outcome of any legal proceedings that may be instituted against First Financial or Finward; the possibility that the anticipated benefits of the proposed transaction, including anticipated synergies and strategic gains, are not realized when expected or at all, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which First Financial and Finward operate; the possibility that the integration of the two companies may be more difficult, time-consuming or costly than expected; the impact of purchase accounting with respect to the proposed transaction, or any change in the assumptions used regarding the assets acquired and liabilities assumed to determine their fair value and credit marks; the possibility that the proposed transaction may be more expensive or take longer to complete than anticipated, including as a result of unexpected factors or events; the diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions of First Financial's or Finward's customers or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; a material adverse change in the financial condition of First Financial or Finward; changes in First Financial's share price before closing; risks relating to the potential dilutive effect of shares of First Financial's common stock to be issued in the proposed transaction; general competitive, economic, political and market conditions; the ability to retain key employees, management personnel and other associates of First Financial and Finward following announcement or consummation of the proposed transaction; major catastrophes such as earthquakes, floods or other natural or human disasters, including infectious disease outbreaks; and other factors that may affect future results of First Financial or Finward, including, among others, changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates; deposit flows; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Federal Reserve Board, the Ohio Division of Financial Institutions, the Indiana Department of Financial Institutions, and any other state or federal legislative and regulatory actions and reforms. These factors are not necessarily all of the factors that could cause First Financial, Finward, or the combined company's actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the results of First Financial, Finward, or the combined company.

Although each of First Financial and Finward believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results of First Financial or Finward (as related to the proposed transaction) will not differ materially from any projected future results expressed or implied by such forward-looking statements. Additional factors that could cause results to differ materially from those described above can be found in each of First Financial's and Finward's most recent annual report on Form 10-K for the fiscal year ended December 31, 2025, quarterly reports on Form 10-Q, and other documents subsequently filed by First Financial and Finward with the Securities Exchange Commission ("SEC"). The actual results anticipated for the proposed transaction or First Financial's operations may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on First Financial, Finward or each of their respective businesses or operations. Investors are cautioned not to rely too heavily on any such forward-looking statements. First Financial and Finward urge you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by First Financial and Finward. Forward-looking statements speak only as of the date they are made, and First Financial and Finward undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

No Offer or Solicitation

This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval with respect to the proposed transaction between First Financial and Finward. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Important Additional Information about the Transaction and Where to Find It

In connection with the proposed transaction, First Financial intends to file with the SEC a Registration Statement on Form S-4 (the "Registration Statement") to register the shares of First Financial capital stock to be issued in connection with the proposed transaction. The Registration Statement will include a proxy statement of Finward and a prospectus of First Financial (the "Proxy Statement/Prospectus"), and First Financial and Finward may file with the SEC other relevant documents concerning the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FIRST FINANCIAL, FINWARD AND THE PROPOSED TRANSACTION AND RELATED MATTERS.

A copy of the Registration Statement, Proxy Statement/Prospectus, as well as other filings containing information about First Financial and Finward, may be obtained, free of charge, at the SEC's website (www.sec.gov) when they are filed. Copies of documents filed with the SEC by First Financial will be made available free of charge in the "Investor Relations" section of First Financial's website, https://www.bankatfirst.com/about/investor-relations.html. Copies of documents filed with the SEC by Finward will be made available free of charge in the "Investor Relations" section of Finward's website, https://www.investorrelations.ibankpeoples.com. The information on First Financial's and Finward's websites is not, and shall not be deemed to be, a part of this communication or incorporated into other filings either First Financial makes with the SEC.

Participants in Solicitation

Finward and its directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the Merger. Information concerning Finward's participants is set forth in the Proxy Statement, dated April 3, 2026, for Finward's 2026 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the participants in the solicitation of proxies in respect of the proposed transaction and interests of participants of Finward in the solicitation of proxies in respect of the Merger will be included in the Registration Statement and Proxy Statement/Prospectus to be filed with the SEC. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.

About First Financial Bancorp.

First Financial Bancorp. is a Cincinnati, Ohio based bank holding company.  As of June 30, 2026, the Company had $22.4 billion in assets, $13.7 billion in loans, $17.6 billion in deposits and $3.0 billion in shareholders' equity.  The Company's subsidiary, First Financial Bank, founded in 1863, provides banking and financial services products through its six lines of business: Commercial, Retail Banking, Investment Commercial Real Estate, Mortgage Banking, Commercial Finance and Wealth Management.  These business units provide traditional banking services to business and retail clients.  Wealth Management provides wealth planning, portfolio management, trust and estate, brokerage and retirement plan services and had approximately $4.6 billion in assets under management as of June 30, 2026.  The Company operated 151 full service banking centers as of June 30, 2026, located in Ohio, Indiana, Kentucky and Illinois, while the Commercial Finance business lends into targeted industry verticals on a nationwide basis.  In 2025, First Financial Bank received its second consecutive Outstanding rating from the Federal Reserve for its performance under the Community Reinvestment Act and was recognized as a Gallup Exceptional Workplace Award winner, one of only 70 Gallup clients worldwide to receive this designation.  Additional information about the Company, including its products, services and banking locations, is available at www.bankatfirst.com.

About Finward Bancorp 

Finward Bancorp is a locally managed and independent financial holding company headquartered in Munster, Indiana, whose activities are primarily limited to holding the stock of Peoples Bank. Peoples Bank provides a wide range of personal, business, electronic and wealth management financial services from its 24 locations in Lake and Porter Counties in Northwest Indiana and Chicagoland. Finward Bancorp's common stock is quoted on The NASDAQ Stock Market, LLC under the symbol FNWD. The website ibankpeoples.com provides information on Peoples Bank's products and services, and Finward Bancorp's investor relations. 

FIRST FINANCIAL BANCORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended,

Six months ended,

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

June 30,

2026

2026

2025

2025

2025

2026

2025

RESULTS OF OPERATIONS

Net income

$       76,456

$       74,445

$       62,393

$       71,923

$       69,996

$     150,901

$     121,289

Net earnings per share - basic

$           0.74

$           0.72

$           0.65

$           0.76

$           0.74

$           1.45

$           1.28

Net earnings per share - diluted

$           0.73

$           0.71

$           0.64

$           0.75

$           0.73

$           1.44

$           1.27

Dividends declared per share

$           0.25

$           0.25

$           0.25

$           0.25

$           0.24

$           0.50

$           0.48

KEY FINANCIAL RATIOS

Return on average assets

1.37 %

1.34 %

1.22 %

1.54 %

1.52 %

1.36 %

1.33 %

Return on average shareholders' equity

10.39 %

10.24 %

9.18 %

11.08 %

11.16 %

10.32 %

9.83 %

Return on average tangible shareholders' equity (1)

17.95 %

17.78 %

16.27 %

19.11 %

19.61 %

17.87 %

17.44 %

Net interest margin

3.96 %

3.97 %

3.96 %

3.99 %

4.01 %

3.96 %

3.93 %

Net interest margin (fully tax equivalent) (1)(2)

3.98 %

3.99 %

3.98 %

4.02 %

4.05 %

3.98 %

3.96 %

Ending shareholders' equity as a percent of ending assets

13.31 %

12.91 %

13.11 %

14.18 %

13.73 %

13.31 %

13.73 %

Ending tangible shareholders' equity as a percent of:

Ending tangible assets (1)

8.24 %

7.87 %

7.79 %

8.87 %

8.40 %

8.24 %

8.40 %

Risk-weighted assets (1)

10.62 %

10.51 %

9.76 %

10.94 %

10.44 %

10.62 %

10.44 %

Average shareholders' equity as a percent of average assets

13.18 %

13.12 %

13.31 %

13.87 %

13.66 %

13.15 %

13.52 %

Average tangible shareholders' equity as a percent of
average tangible assets (1)

8.08 %

8.01 %

7.97 %

8.54 %

8.26 %

8.04 %

8.10 %

Book value per share

$         28.46

$         28.02

$         28.11

$         27.48

$         26.71

$         28.46

$         26.71

Tangible book value per share (1)

$         16.64

$         16.15

$         15.74

$         16.19

$         15.40

$         16.64

$         15.40

Common equity tier 1 ratio (3)

12.33 %

12.22 %

11.32 %

12.91 %

12.57 %

12.33 %

12.57 %

Tier 1 ratio (3)

12.61 %

12.50 %

11.60 %

13.23 %

12.89 %

12.61 %

12.89 %

Total capital ratio (3)

15.75 %

15.70 %

15.46 %

15.32 %

14.98 %

15.75 %

14.98 %

Leverage ratio (3)

9.66 %

9.39 %

9.53 %

10.50 %

10.28 %

9.66 %

10.28 %

AVERAGE BALANCE SHEET ITEMS

Loans (4)

$ 13,619,039

$ 14,028,324

$ 12,812,267

$ 11,806,065

$ 11,792,840

$ 13,822,551

$ 11,758,972

Investment securities

5,079,730

4,769,261

3,988,846

3,552,014

3,478,921

4,925,353

3,445,443

Interest-bearing deposits with other banks

605,647

596,094

647,347

610,074

542,815

600,897

579,112

  Total earning assets

$ 19,304,416

$ 19,393,679

$ 17,448,460

$ 15,968,153

$ 15,814,576

$ 19,348,801

$ 15,783,527

Total assets

$ 22,391,439

$ 22,459,721

$ 20,256,539

$ 18,566,188

$ 18,419,437

$ 22,425,392

$ 18,394,161

Noninterest-bearing deposits

$  3,811,391

$  3,745,002

$  3,436,709

$  3,124,277

$  3,143,081

$  3,778,380

$  3,117,203

Interest-bearing deposits

13,875,384

13,900,550

12,521,948

11,387,648

11,211,694

13,887,898

11,180,835

  Total deposits

$ 17,686,775

$ 17,645,552

$ 15,958,657

$ 14,511,925

$ 14,354,775

$ 17,666,278

$ 14,298,038

Borrowings

$     891,636

$  1,012,161

$     848,650

$     823,346

$     910,573

$     951,566

$     955,704

Shareholders' equity

$  2,951,237

$  2,947,585

$  2,695,581

$  2,575,203

$  2,515,747

$  2,949,421

$  2,486,926

CREDIT QUALITY RATIOS

Allowance to ending loans

1.38 %

1.36 %

1.39 %

1.38 %

1.34 %

1.38 %

1.34 %

Allowance to nonaccrual loans

197.51 %

182.73 %

183.18 %

213.18 %

206.08 %

197.51 %

206.08 %

Nonaccrual loans to total loans

0.70 %

0.75 %

0.76 %

0.65 %

0.65 %

0.70 %

0.65 %

Nonperforming assets to ending loans, plus OREO

0.70 %

0.75 %

0.76 %

0.65 %

0.65 %

0.70 %

0.65 %

Nonperforming assets to total assets

0.43 %

0.44 %

0.48 %

0.41 %

0.41 %

0.43 %

0.41 %

Classified assets to total assets

1.01 %

1.02 %

1.11 %

1.18 %

1.15 %

1.01 %

1.15 %

Net charge-offs to average loans (annualized)

0.20 %

0.35 %

0.27 %

0.18 %

0.21 %

0.27 %

0.28 %

(1) Non-GAAP measure.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

(2) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis.  Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.

(3) June 30, 2026 regulatory capital ratios are preliminary.

(4) Includes loans held for sale.

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

Three months ended,

Six months ended,

June 30,

June 30,

2026

2025

% Change

2026

2025

% Change

Interest income

  Loans and leases, including fees

$       219,164

$       201,460

8.8 %

$       444,115

$       398,623

11.4 %

  Investment securities

     Taxable

53,904

36,243

48.7 %

103,395

70,644

46.4 %

     Tax-exempt

2,472

2,233

10.7 %

4,998

4,437

12.6 %

        Total investment securities interest

56,376

38,476

46.5 %

108,393

75,081

44.4 %

  Other earning assets

5,381

5,964

(9.8) %

10,831

12,615

(14.1) %

       Total interest income

280,921

245,900

14.2 %

563,339

486,319

15.8 %

Interest expense

  Deposits

79,250

75,484

5.0 %

158,985

154,125

3.2 %

  Short-term borrowings

4,997

6,393

(21.8) %

10,165

13,938

(27.1) %

  Long-term borrowings

6,297

5,754

9.4 %

14,202

10,691

32.8 %

      Total interest expense

90,544

87,631

3.3 %

183,352

178,754

2.6 %

      Net interest income

190,377

158,269

20.3 %

379,987

307,565

23.5 %

  Provision for credit losses-loans and leases

12,933

9,084

42.4 %

18,963

18,225

4.0 %

  Provision for credit losses-unfunded commitments

(4,743)

718

(760.6) %

(2,233)

277

(906.1) %

      Net interest income after provision for credit losses

182,187

148,467

22.7 %

363,257

289,063

25.7 %

Noninterest income

  Service charges on deposit accounts

8,896

7,766

14.6 %

17,909

15,229

17.6 %

  Wealth management fees

8,252

7,787

6.0 %

18,734

15,924

17.6 %

  Bankcard income

3,032

3,737

(18.9) %

6,612

7,047

(6.2) %

  Client derivative fees

1,443

1,674

(13.8) %

5,453

3,245

68.0 %

  Foreign exchange income

13,101

13,760

(4.8) %

29,414

26,304

11.8 %

  Leasing business income

22,750

20,797

9.4 %

44,358

39,500

12.3 %

  Net gains from sales of loans

6,658

6,687

(0.4) %

12,705

11,009

15.4 %

  Net gain (loss) on investment securities

(337)

243

(238.7) %

(1,597)

(9,706)

(83.5) %

  Gain on bargain purchase

3,189

0

100.0 %

12,081

0

100.0 %

  Other

6,807

5,612

21.3 %

10,028

10,594

(5.3) %

      Total noninterest income

73,791

68,063

8.4 %

155,697

119,146

30.7 %

Noninterest expenses

  Salaries and employee benefits

86,917

74,917

16.0 %

186,773

150,155

24.4 %

  Net occupancy

7,535

5,845

28.9 %

15,088

11,864

27.2 %

  Furniture and equipment

4,310

3,441

25.3 %

9,003

7,254

24.1 %

  Data processing

13,554

9,020

50.3 %

26,208

17,779

47.4 %

  Marketing

3,616

2,737

32.1 %

6,268

4,755

31.8 %

  Professional services

7,387

3,549

108.1 %

11,373

6,288

80.9 %

  Amortization of tax credit investments

669

111

502.7 %

1,338

223

500.0 %

  FDIC assessments

2,878

2,611

10.2 %

6,523

5,670

15.0 %

  Intangible amortization

6,229

2,358

164.2 %

12,490

4,717

164.8 %

  Leasing business expense

14,633

13,155

11.2 %

28,762

25,957

10.8 %

  Other

13,814

10,927

26.4 %

27,124

22,085

22.8 %

      Total noninterest expenses

161,542

128,671

25.5 %

330,950

256,747

28.9 %

Income before income taxes

94,436

87,859

7.5 %

188,004

151,462

24.1 %

Income tax expense

17,980

17,863

0.7 %

37,103

30,173

23.0 %

      Net income

$         76,456

$         69,996

9.2 %

$       150,901

$       121,289

24.4 %

ADDITIONAL DATA

Net earnings per share - basic

$             0.74

$             0.74

$             1.45

$             1.28

Net earnings per share - diluted

$             0.73

$             0.73

$             1.44

$             1.27

Dividends declared per share

$             0.25

$             0.24

$             0.50

$             0.48

Return on average assets

1.37 %

1.52 %

1.36 %

1.33 %

Return on average shareholders' equity

10.39 %

11.16 %

10.32 %

9.83 %

Interest income

$       280,921

$       245,900

14.2 %

$       563,339

$       486,319

15.8 %

Tax equivalent adjustment

1,161

1,246

(6.8) %

2,347

2,459

(4.6) %

   Interest income - tax equivalent

282,082

247,146

14.1 %

565,686

488,778

15.7 %

Interest expense

90,544

87,631

3.3 %

183,352

178,754

2.6 %

   Net interest income - tax equivalent

$       191,538

$       159,515

20.1 %

$       382,334

$       310,024

23.3 %

Net interest margin

3.96 %

4.01 %

3.96 %

3.93 %

Net interest margin (fully tax equivalent) (1)

3.98 %

4.05 %

3.98 %

3.96 %

Full-time equivalent employees

2,371

2,033

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate.  Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis.  Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

2026

Second

First

Year to

% Change

Quarter

Quarter

Date

Linked Qtr.

Interest income

  Loans and leases, including fees

$  219,164

$  224,951

$  444,115

(2.6) %

  Investment securities

     Taxable

53,904

49,491

103,395

8.9 %

     Tax-exempt

2,472

2,526

4,998

(2.1) %

        Total investment securities interest

56,376

52,017

108,393

8.4 %

  Other earning assets

5,381

5,450

10,831

(1.3) %

       Total interest income

280,921

282,418

563,339

(0.5) %

Interest expense

  Deposits

79,250

79,735

158,985

(0.6) %

  Short-term borrowings

4,997

5,168

10,165

(3.3) %

  Long-term borrowings

6,297

7,905

14,202

(20.3) %

      Total interest expense

90,544

92,808

183,352

(2.4) %

      Net interest income

190,377

189,610

379,987

0.4 %

  Provision for credit losses-loans and leases

12,933

6,030

18,963

114.5 %

  Provision for credit losses-unfunded commitments

(4,743)

2,510

(2,233)

(289.0) %

      Net interest income after provision for credit losses

182,187

181,070

363,257

0.6 %

Noninterest income

  Service charges on deposit accounts

8,896

9,013

17,909

(1.3) %

  Wealth management fees

8,252

10,482

18,734

(21.3) %

  Bankcard income

3,032

3,580

6,612

(15.3) %

  Client derivative fees

1,443

4,010

5,453

(64.0) %

  Foreign exchange income

13,101

16,313

29,414

(19.7) %

  Leasing business income

22,750

21,608

44,358

5.3 %

  Net gains from sales of loans

6,658

6,047

12,705

10.1 %

  Net gain (loss) on investment securities

(337)

(1,260)

(1,597)

(73.3) %

  Gain on bargain purchase

3,189

8,892

12,081

(64.1) %

  Other

6,807

3,221

10,028

111.3 %

      Total noninterest income

73,791

81,906

155,697

(9.9) %

Noninterest expenses

  Salaries and employee benefits

86,917

99,856

186,773

(13.0) %

  Net occupancy

7,535

7,553

15,088

(0.2) %

  Furniture and equipment

4,310

4,693

9,003

(8.2) %

  Data processing

13,554

12,654

26,208

7.1 %

  Marketing

3,616

2,652

6,268

36.3 %

  Professional services

7,387

3,986

11,373

85.3 %

  Amortization of tax credit investments

669

669

1,338

0.0 %

  FDIC assessments

2,878

3,645

6,523

(21.0) %

  Intangible amortization

6,229

6,261

12,490

(0.5) %

  Leasing business expense

14,633

14,129

28,762

3.6 %

  Other

13,814

13,310

27,124

3.8 %

      Total noninterest expenses

161,542

169,408

330,950

(4.6) %

Income before income taxes

94,436

93,568

188,004

0.9 %

Income tax expense

17,980

19,123

37,103

(6.0) %

      Net income

$    76,456

$    74,445

$  150,901

2.7 %

ADDITIONAL DATA

Net earnings per share - basic

$        0.74

$        0.72

$        1.45

Net earnings per share - diluted

$        0.73

$        0.71

$        1.44

Dividends declared per share

$        0.25

$        0.25

$        0.50

Return on average assets

1.37 %

1.34 %

1.36 %

Return on average shareholders' equity

10.39 %

10.24 %

10.32 %

Interest income

$  280,921

$  282,418

$  563,339

(0.5) %

Tax equivalent adjustment

1,161

1,186

2,347

(2.1) %

   Interest income - tax equivalent

282,082

283,604

565,686

(0.5) %

Interest expense

90,544

92,808

183,352

(2.4) %

   Net interest income - tax equivalent

$  191,538

$  190,796

$  382,334

0.4 %

Net interest margin

3.96 %

3.97 %

3.96 %

Net interest margin (fully tax equivalent) (1)

3.98 %

3.99 %

3.98 %

Full-time equivalent employees

2,371

2,319

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate.  Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis.  Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

2025

Fourth

Third

Second

First

Full

Quarter

Quarter

Quarter

Quarter

Year

Interest income

  Loans and leases, including fees

$  215,663

$  204,865

$  201,460

$  197,163

$  819,151

  Investment securities

     Taxable

40,971

36,421

36,243

34,401

148,036

     Tax-exempt

2,363

2,195

2,233

2,204

8,995

        Total investment securities interest

43,334

38,616

38,476

36,605

157,031

  Other earning assets

6,334

6,773

5,964

6,651

25,722

       Total interest income

265,331

250,254

245,900

240,419

1,001,904

Interest expense

  Deposits

78,861

77,766

75,484

78,641

310,752

  Short-term borrowings

4,925

5,979

6,393

7,545

24,842

  Long-term borrowings

7,550

6,023

5,754

4,937

24,264

      Total interest expense

91,336

89,768

87,631

91,123

359,858

      Net interest income

173,995

160,486

158,269

149,296

642,046

  Provision for credit losses-loans and leases

9,688

8,612

9,084

9,141

36,525

  Provision for credit losses-unfunded commitments

412

453

718

(441)

1,142

      Net interest income after provision for credit losses

163,895

151,421

148,467

140,596

604,379

Noninterest income

  Service charges on deposit accounts

8,308

7,829

7,766

7,463

31,366

  Wealth management fees

9,288

7,351

7,787

8,137

32,563

  Bankcard income

3,590

3,589

3,737

3,310

14,226

  Client derivative fees

2,681

1,876

1,674

1,571

7,802

  Foreign exchange income

22,696

16,666

13,760

12,544

65,666

  Leasing business income

19,523

20,997

20,797

18,703

80,020

  Net gains from sales of loans

7,041

6,835

6,687

4,322

24,885

  Net gain (loss) on investment securities

(12,576)

(42)

243

(9,949)

(22,324)

  Other

4,216

8,424

5,612

4,982

23,234

      Total noninterest income

64,767

73,525

68,063

51,083

257,438

Noninterest expenses

  Salaries and employee benefits

85,123

80,607

74,917

75,238

315,885

  Net occupancy

6,315

6,003

5,845

6,019

24,182

  Furniture and equipment

3,940

3,582

3,441

3,813

14,776

  Data processing

10,465

9,591

9,020

8,759

37,835

  Marketing

3,056

2,359

2,737

2,018

10,170

  Professional services

6,231

2,314

3,549

2,739

14,833

  Amortization of tax credit investments

800

112

111

112

1,135

  FDIC assessments

2,923

2,611

2,611

3,059

11,204

  Intangible amortization

3,927

2,359

2,358

2,359

11,003

  Leasing business expense

13,837

13,911

13,155

12,802

53,705

  Other

12,914

10,820

10,927

11,158

45,819

      Total noninterest expenses

149,531

134,269

128,671

128,076

540,547

Income before income taxes

79,131

90,677

87,859

63,603

321,270

Income tax expense

16,738

18,754

17,863

12,310

65,665

      Net income

$    62,393

$    71,923

$    69,996

$    51,293

$  255,605

ADDITIONAL DATA

Net earnings per share - basic

$        0.65

$        0.76

$        0.74

$        0.54

$         2.68

Net earnings per share - diluted

$        0.64

$        0.75

$        0.73

$        0.54

$         2.66

Dividends declared per share

$        0.25

$        0.25

$        0.24

$        0.24

$         0.98

Return on average assets

1.22 %

1.54 %

1.52 %

1.13 %

1.35 %

Return on average shareholders' equity

9.18 %

11.08 %

11.16 %

8.46 %

9.98 %

Interest income

$  265,331

$  250,254

$  245,900

$  240,419

$ 1,001,904

Tax equivalent adjustment

1,227

1,248

1,246

1,213

4,934

   Interest income - tax equivalent

266,558

251,502

247,146

241,632

1,006,838

Interest expense

91,336

89,768

87,631

91,123

359,858

   Net interest income - tax equivalent

$  175,222

$  161,734

$  159,515

$  150,509

$  646,980

Net interest margin

3.96 %

3.99 %

4.01 %

3.84 %

3.95 %

Net interest margin (fully tax equivalent) (1)

3.98 %

4.02 %

4.05 %

3.88 %

3.98 %

Full-time equivalent employees

2,164

1,986

2,033

2,021

(1) The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 21% tax rate.  Management believes that it is a standard practice in the banking industry to present net interest income on a fully tax equivalent basis.  Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.  Management also uses these measures to make peer comparisons.

FIRST FINANCIAL BANCORP.

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

% Change

% Change

2026

2026

2025

2025

2025

Linked Qtr.

Comp Qtr.

ASSETS

     Cash and due from banks

$       206,361

$       170,641

$       178,553

$       174,659

$       210,187

20.9 %

(1.8) %

     Interest-bearing deposits with other banks

579,194

1,032,259

597,338

565,080

570,173

(43.9) %

1.6 %

     Investment securities available-for-sale

4,733,713

4,953,023

3,971,932

3,422,595

3,386,562

(4.4) %

39.8 %

     Investment securities held-to-maturity

46,067

49,631

58,545

71,595

72,994

(7.2) %

(36.9) %

     Other investments

137,755

137,018

129,564

117,120

122,322

0.5 %

12.6 %

     Loans held for sale

33,125

18,280

16,953

21,466

26,504

81.2 %

25.0 %

     Loans and leases

       Commercial and industrial

4,842,347

4,693,786

4,632,241

3,838,630

3,927,771

3.2 %

23.3 %

       Lease financing

659,328

649,645

638,527

596,734

587,176

1.5 %

12.3 %

       Construction real estate

599,258

591,080

677,339

627,960

732,777

1.4 %

(18.2) %

       Commercial real estate

4,548,887

4,473,468

4,384,556

4,048,370

3,961,513

1.7 %

14.8 %

       Residential real estate

1,805,044

1,831,338

1,832,184

1,494,464

1,492,688

(1.4) %

20.9 %

       Home equity

1,058,175

1,026,839

1,005,204

935,975

903,299

3.1 %

17.1 %

       Installment

156,470

162,314

188,694

109,764

116,598

(3.6) %

34.2 %

       Credit card

65,405

66,371

65,325

62,654

64,374

(1.5) %

1.6 %

          Total loans

13,734,914

13,494,841

13,424,070

11,714,551

11,786,196

1.8 %

16.5 %

       Less:

          Allowance for credit losses

(189,912)

(183,716)

(186,487)

(161,916)

(158,522)

3.4 %

19.8 %

                Net loans

13,545,002

13,311,125

13,237,583

11,552,635

11,627,674

1.8 %

16.5 %

     Premises and equipment

229,763

228,384

204,760

198,251

197,741

0.6 %

16.2 %

     Operating leases

241,742

220,061

214,003

214,667

217,100

9.9 %

11.4 %

     Goodwill

1,099,936

1,099,543

1,099,524

1,007,656

1,007,656

0.0 %

9.2 %

     Other intangibles

140,705

145,927

118,832

73,797

75,458

(3.6) %

86.5 %

     Accrued interest and other assets

1,446,316

1,413,923

1,301,792

1,134,985

1,119,884

2.3 %

29.1 %

       Total Assets

$  22,439,679

$ 22,779,815

$  21,129,379

$ 18,554,506

$  18,634,255

(1.5) %

20.4 %

LIABILITIES

     Deposits

       Interest-bearing demand

$    3,804,301

$    3,658,155

$    3,360,613

$    2,983,132

$    3,057,232

4.0 %

24.4 %

       Savings

6,423,986

6,460,546

5,973,532

5,029,097

4,979,124

(0.6) %

29.0 %

       Time

3,650,043

3,817,268

3,622,227

3,293,707

3,201,711

(4.4) %

14.0 %

          Total interest-bearing deposits

13,878,330

13,935,969

12,956,372

11,305,936

11,238,067

(0.4) %

23.5 %

       Noninterest-bearing

3,704,899

3,982,753

3,465,470

3,127,512

3,131,926

(7.0) %

18.3 %

          Total deposits

17,583,229

17,918,722

16,421,842

14,433,448

14,369,993

(1.9) %

22.4 %

     FHLB short-term borrowings

570,000

550,000

675,000

550,000

680,000

3.6 %

(16.2) %

     Other

39,532

70,457

332

45,167

4,699

(43.9) %

741.3 %

          Total short-term borrowings

609,532

620,457

675,332

595,167

684,699

(1.8) %

(11.0) %

     Long-term debt

382,550

380,176

514,052

221,823

344,955

0.6 %

10.9 %

          Total borrowed funds

992,082

1,000,633

1,189,384

816,990

1,029,654

(0.9) %

(3.6) %

     Accrued interest and other liabilities

876,880

919,835

748,937

672,213

676,453

(4.7) %

29.6 %

       Total Liabilities

19,452,191

19,839,190

18,360,163

15,922,651

16,076,100

(2.0) %

21.0 %

SHAREHOLDERS' EQUITY

     Common stock

1,792,158

1,789,676

1,647,618

1,641,315

1,638,796

0.1 %

9.4 %

     Retained earnings

1,535,765

1,485,573

1,437,286

1,399,577

1,351,674

3.4 %

13.6 %

     Accumulated other comprehensive income (loss)

(223,720)

(217,430)

(189,942)

(223,000)

(246,384)

2.9 %

(9.2) %

     Treasury stock, at cost

(116,715)

(117,194)

(125,746)

(186,037)

(185,931)

(0.4) %

(37.2) %

       Total Shareholders' Equity

2,987,488

2,940,625

2,769,216

2,631,855

2,558,155

1.6 %

16.8 %

       Total Liabilities and Shareholders' Equity

$  22,439,679

$ 22,779,815

$  21,129,379

$ 18,554,506

$  18,634,255

(1.5) %

20.4 %

FIRST FINANCIAL BANCORP.

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

Quarterly Averages

Year-to-Date Averages

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

June 30,

2026

2026

2025

2025

2025

2026

2025

ASSETS

     Cash and due from banks

$       182,261

$       227,115

$       178,403

$       165,210

$            174,375

$       204,564

$       169,581

     Interest-bearing deposits with other banks

605,647

596,094

647,347

610,074

542,815

600,897

579,112

     Investment securities

5,079,730

4,769,261

3,988,846

3,552,014

3,478,921

4,925,353

3,445,443

     Loans held for sale

32,458

451,139

32,425

26,366

25,026

240,642

17,660

     Loans and leases

       Commercial and industrial

4,723,431

4,771,066

4,310,399

3,890,886

3,881,001

4,747,117

3,834,363

       Lease financing

646,520

630,204

617,518

592,510

581,091

638,407

583,094

       Construction real estate

583,146

643,270

679,884

711,011

784,028

613,042

790,528

       Commercial real estate

4,546,901

4,446,231

4,240,042

3,993,549

3,958,730

4,496,844

3,988,306

       Residential real estate

1,812,228

1,834,467

1,717,439

1,489,942

1,485,479

1,823,286

1,480,618

       Home equity

1,043,805

1,016,080

981,406

919,368

891,761

1,030,019

875,050

       Installment

158,760

166,979

164,013

114,058

117,724

162,847

122,432

       Credit card

71,790

68,888

69,141

68,375

68,000

70,347

66,921

          Total loans

13,586,581

13,577,185

12,779,842

11,779,699

11,767,814

13,581,909

11,741,312

       Less:

          Allowance for credit losses

(186,331)

(200,745)

(179,275)

(162,417)

(158,170)

(193,498)

(158,188)

                Net loans

13,400,250

13,376,440

12,600,567

11,617,282

11,609,644

13,388,411

11,583,124

     Premises and equipment

230,343

230,154

202,956

199,167

198,407

230,249

198,701

     Operating leases

234,460

215,318

211,091

217,404

212,684

224,942

208,953

     Goodwill

1,099,742

1,099,543

1,069,781

1,007,656

1,007,656

1,099,643

1,007,656

     Other intangibles

143,403

149,631

104,184

74,448

76,076

146,500

77,142

     Accrued interest and other assets

1,383,145

1,345,026

1,220,939

1,096,567

1,093,833

1,364,191

1,106,789

       Total Assets

$  22,391,439

$ 22,459,721

$  20,256,539

$  18,566,188

$       18,419,437

$  22,425,392

$  18,394,161

LIABILITIES

     Deposits

       Interest-bearing demand

$    3,762,177

$    3,626,103

$    3,276,425

$    3,036,296

$         3,066,986

$    3,694,516

$    3,078,691

       Savings

6,434,399

6,406,223

5,740,651

5,054,563

5,005,526

6,420,389

4,962,007

       Time

3,678,808

3,868,224

3,504,872

3,296,789

3,139,182

3,772,993

3,140,137

          Total interest-bearing deposits

13,875,384

13,900,550

12,521,948

11,387,648

11,211,694

13,887,898

11,180,835

       Noninterest-bearing

3,811,391

3,745,002

3,436,709

3,124,277

3,143,081

3,778,380

3,117,203

          Total deposits

17,686,775

17,645,552

15,958,657

14,511,925

14,354,775

17,666,278

14,298,038

     Federal funds purchased and securities sold

          under agreements to repurchase

3,351

16,278

2,283

12,434

4,780

9,779

3,425

     FHLB short-term borrowings

508,931

538,084

444,511

497,092

532,198

523,427

542,873

     Other

0

0

13,891

21,519

26,226

0

62,600

          Total short-term borrowings

512,282

554,362

460,685

531,045

563,204

533,206

608,898

     Long-term debt

379,354

457,799

387,965

292,301

347,369

418,360

346,806

       Total borrowed funds

891,636

1,012,161

848,650

823,346

910,573

951,566

955,704

     Accrued interest and other liabilities

861,791

854,423

753,651

655,714

638,342

858,127

653,493

       Total Liabilities

19,440,202

19,512,136

17,560,958

15,990,985

15,903,690

19,475,971

15,907,235

SHAREHOLDERS' EQUITY

     Common stock

1,790,690

1,795,255

1,644,923

1,639,986

1,637,782

1,792,960

1,639,390

     Retained earnings

1,499,207

1,448,012

1,406,388

1,369,069

1,322,168

1,473,751

1,302,344

     Accumulated other comprehensive loss

(221,515)

(173,065)

(209,767)

(247,746)

(257,873)

(197,424)

(266,423)

     Treasury stock, at cost

(117,145)

(122,617)

(145,963)

(186,106)

(186,330)

(119,866)

(188,385)

       Total Shareholders' Equity

2,951,237

2,947,585

2,695,581

2,575,203

2,515,747

2,949,421

2,486,926

       Total Liabilities and Shareholders' Equity

$  22,391,439

$ 22,459,721

$  20,256,539

$  18,566,188

$       18,419,437

$  22,425,392

$  18,394,161

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS

(Dollars in thousands)

(Unaudited)

 Quarterly Averages

Year-to-Date Averages

June 30, 2026

March 31, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Balance

Interest

Yield

Balance

Interest

Yield

Balance

Interest

Yield

Balance

Yield

Balance

Yield

Earning assets

    Investments:

      Investment securities

$  5,079,730

$  56,376

4.45 %

$  4,769,261

$  52,017

4.42 %

$  3,478,921

$  38,476

4.44 %

$  4,925,353

4.44 %

$  3,445,443

4.39 %

      Interest-bearing deposits with other banks

605,647

5,381

3.56 %

596,094

5,450

3.71 %

542,815

5,964

4.41 %

600,897

3.63 %

579,112

4.39 %

    Gross loans (1)

13,619,039

219,164

6.45 %

14,028,324

224,951

6.50 %

11,792,840

201,460

6.85 %

13,822,551

6.48 %

11,758,972

6.84 %

       Total earning assets

19,304,416

280,921

5.84 %

19,393,679

282,418

5.91 %

15,814,576

245,900

6.24 %

19,348,801

5.87 %

15,783,527

6.21 %

Nonearning assets

    Allowance for credit losses

(186,331)

(200,745)

(158,170)

(193,498)

(158,188)

    Cash and due from banks

182,261

227,115

174,375

204,564

169,581

    Accrued interest and other assets

3,091,093

3,039,672

2,588,656

3,065,525

2,599,241

       Total assets

$ 22,391,439

$ 22,459,721

$ 18,419,437

$ 22,425,392

$ 18,394,161

Interest-bearing liabilities

    Deposits:

      Interest-bearing demand

$  3,762,177

$  14,288

1.52 %

$  3,626,103

$  13,281

1.49 %

$  3,066,986

$  14,139

1.85 %

$  3,694,516

1.50 %

$  3,078,691

1.92 %

      Savings

6,434,399

33,405

2.08 %

6,406,223

32,480

2.06 %

5,005,526

29,942

2.40 %

6,420,389

2.07 %

4,962,007

2.45 %

      Time

3,678,808

31,557

3.44 %

3,868,224

33,974

3.56 %

3,139,182

31,403

4.01 %

3,772,993

3.50 %

3,140,137

4.14 %

    Total interest-bearing deposits

13,875,384

79,250

2.29 %

13,900,550

79,735

2.33 %

11,211,694

75,484

2.70 %

13,887,898

2.31 %

11,180,835

2.78 %

    Borrowed funds

      Short-term borrowings

512,282

4,997

3.91 %

554,362

5,168

3.78 %

563,204

6,393

4.55 %

533,206

3.84 %

608,898

4.62 %

      Long-term debt

379,354

6,297

6.66 %

457,799

7,905

7.00 %

347,369

5,754

6.64 %

418,360

6.85 %

346,806

6.22 %

        Total borrowed funds

891,636

11,294

5.08 %

1,012,161

13,073

5.24 %

910,573

12,147

5.35 %

951,566

5.16 %

955,704

5.20 %

       Total interest-bearing liabilities

14,767,020

90,544

2.46 %

14,912,711

92,808

2.52 %

12,122,267

87,631

2.90 %

14,839,464

2.49 %

12,136,539

2.97 %

Noninterest-bearing liabilities

    Noninterest-bearing demand deposits

3,811,391

3,745,002

3,143,081

3,778,380

3,117,203

    Other liabilities

861,791

854,423

638,342

858,127

653,493

    Shareholders' equity

2,951,237

2,947,585

2,515,747

2,949,421

2,486,926

       Total liabilities & shareholders' equity

$ 22,391,439

$ 22,459,721

$ 18,419,437

$ 22,425,392

$ 18,394,161

Net interest income

$      190,377

$      189,610

$      158,269

$      379,987

$      307,565

Net interest spread

3.38 %

3.39 %

3.34 %

3.38 %

3.24 %

Net interest margin

3.96 %

3.97 %

4.01 %

3.96 %

3.93 %

Tax equivalent adjustment

0.02 %

0.02 %

0.04 %

0.02 %

0.03 %

Net interest margin (fully tax equivalent)

3.98 %

3.99 %

4.05 %

3.98 %

3.96 %

(1) Loans held for sale and nonaccrual loans are included in gross loans.

FIRST FINANCIAL BANCORP.

NET INTEREST MARGIN RATE/VOLUME ANALYSIS  (1)

(Dollars in thousands)

(Unaudited)

 Linked Qtr. Income Variance

 Comparable Qtr. Income Variance

Year-to-Date Income Variance

Rate

Volume

Total

Rate

Volume

Total

Rate

Volume

Total

Earning assets

    Investment securities

$          332

$      4,027

$      4,359

$          134

$    17,766

$    17,900

$          743

$    32,569

$    33,312

    Interest-bearing deposits with other banks

(212)

143

(69)

(1,141)

558

(583)

(2,177)

393

(1,784)

    Gross loans (2)

(1,681)

(4,106)

(5,787)

(11,684)

29,388

17,704

(20,810)

66,302

45,492

       Total earning assets

(1,561)

64

(1,497)

(12,691)

47,712

35,021

(22,244)

99,264

77,020

Interest-bearing liabilities

    Total interest-bearing deposits

$     (1,214)

$          729

$        (485)

$  (11,448)

$    15,214

$      3,766

$  (26,130)

$    30,990

$      4,860

    Borrowed funds

    Short-term borrowings

180

(351)

(171)

(899)

(497)

(1,396)

(2,330)

(1,443)

(3,773)

    Long-term debt

(389)

(1,219)

(1,608)

12

531

543

1,082

2,429

3,511

       Total borrowed funds

(209)

(1,570)

(1,779)

(887)

34

(853)

(1,248)

986

(262)

       Total interest-bearing liabilities

(1,423)

(841)

(2,264)

(12,335)

15,248

2,913

(27,378)

31,976

4,598

          Net interest income (1)

$        (138)

$          905

$          767

$        (356)

$    32,464

$    32,108

$      5,134

$    67,288

$    72,422

(1) Not tax equivalent.

(2) Loans held for sale and nonaccrual loans are included in gross loans.

FIRST FINANCIAL BANCORP.

CREDIT QUALITY

(Dollars in thousands)

(Unaudited)

Three Months Ended,

Six months ended

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

June 30,

June 30,

2026

2026

2025

2025

2025

2026

2025

ALLOWANCE FOR CREDIT LOSS ACTIVITY

Balance at beginning of period

$    183,716

$   186,487

$   161,916

$   158,522

$   155,482

$   186,487

$   156,791

Initial allowance on purchased loans

0

2,829

23,652

0

0

2,829

0

  Provision for credit losses

12,933

6,030

9,688

8,612

9,084

18,963

18,225

  Gross charge-offs

    Commercial and industrial

2,437

10,788

6,636

2,165

4,996

13,225

13,174

    Lease financing

1,314

43

918

298

606

1,357

2,060

    Construction real estate

0

0

0

245

0

0

0

    Commercial real estate

2,484

29

433

3,105

0

2,513

0

    Residential real estate

84

127

151

0

16

211

16

    Home equity

262

119

95

92

100

381

186

    Installment

1,034

1,058

1,197

1,194

1,120

2,092

2,441

    Credit card

704

496

729

577

489

1,200

963

      Total gross charge-offs

8,319

12,660

10,159

7,676

7,327

20,979

18,840

  Recoveries

    Commercial and industrial

463

100

264

202

290

563

485

    Lease financing

114

23

201

291

11

137

40

    Construction real estate

0

0

0

0

0

0

0

    Commercial real estate

8

28

5

1,138

70

36

94

    Residential real estate

18

30

13

58

42

48

66

    Home equity

157

116

117

94

74

273

218

    Installment

660

598

682

609

716

1,258

1,279

    Credit card

162

135

108

66

80

297

164

      Total recoveries

1,582

1,030

1,390

2,458

1,283

2,612

2,346

  Total net charge-offs

6,737

11,630

8,769

5,218

6,044

18,367

16,494

Ending allowance for credit losses

$    189,912

$   183,716

$   186,487

$   161,916

$   158,522

$   189,912

$   158,522

NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES (ANNUALIZED)

  Commercial and industrial

0.17 %

0.91 %

0.59 %

0.20 %

0.49 %

0.54 %

0.67 %

  Lease financing

0.74 %

0.01 %

0.46 %

0.00 %

0.41 %

0.39 %

0.70 %

  Construction real estate

0.00 %

0.00 %

0.00 %

0.14 %

0.00 %

0.00 %

0.00 %

  Commercial real estate

0.22 %

0.00 %

0.04 %

0.20 %

(0.01) %

0.11 %

0.00 %

  Residential real estate

0.01 %

0.02 %

0.03 %

(0.02) %

(0.01) %

0.02 %

(0.01) %

  Home equity

0.04 %

0.00 %

(0.01) %

0.00 %

0.01 %

0.02 %

(0.01) %

  Installment

0.94 %

1.12 %

1.25 %

2.03 %

1.38 %

1.03 %

1.91 %

  Credit card

3.03 %

2.13 %

3.56 %

2.97 %

2.41 %

2.59 %

2.41 %

     Total net charge-offs

0.20 %

0.35 %

0.27 %

0.18 %

0.21 %

0.27 %

0.28 %

COMPONENTS OF NONACCRUAL LOANS, NONPERFORMING ASSETS, AND UNDERPERFORMING ASSETS

  Nonaccrual loans

    Commercial and industrial

$      20,305

$     22,576

$     27,461

$     23,832

$     24,489

$     20,305

$     24,489

    Lease financing

7,558

5,857

5,660

5,885

6,243

7,558

6,243

    Construction real estate

698

715

1,120

1,120

1,365

698

1,365

    Commercial real estate

44,404

49,481

45,590

24,443

23,905

44,404

23,905

    Residential real estate

18,260

17,439

18,302

16,452

16,995

18,260

16,995

    Home equity

4,095

3,687

2,927

3,567

3,226

4,095

3,226

    Installment

832

786

748

652

701

832

701

      Total nonaccrual loans

96,152

100,541

101,808

75,951

76,924

96,152

76,924

  Other real estate owned (OREO)

174

238

184

111

204

174

204

     Total nonperforming assets

96,326

100,779

101,992

76,062

77,128

96,326

77,128

  Accruing loans past due 90 days or more

650

1,366

411

592

714

650

714

     Total underperforming assets

$      96,976

$   102,145

$   102,403

$     76,654

$     77,842

$     96,976

$     77,842

Total classified assets

$    226,826

$   232,368

$   235,451

$   218,794

$   214,346

$   226,826

$   214,346

CREDIT QUALITY RATIOS

Allowance for credit losses to

     Nonaccrual loans

197.51 %

182.73 %

183.18 %

213.18 %

206.08 %

197.51 %

206.08 %

     Total ending loans

1.38 %

1.36 %

1.39 %

1.38 %

1.34 %

1.38 %

1.34 %

Nonaccrual loans to total loans

0.70 %

0.75 %

0.76 %

0.65 %

0.65 %

0.70 %

0.65 %

Nonperforming assets to

     Ending loans, plus OREO

0.70 %

0.75 %

0.76 %

0.65 %

0.65 %

0.70 %

0.65 %

     Total assets

0.43 %

0.44 %

0.48 %

0.41 %

0.41 %

0.43 %

0.41 %

Classified assets to total assets

1.01 %

1.02 %

1.11 %

1.18 %

1.15 %

1.01 %

1.15 %

FIRST FINANCIAL BANCORP.

CAPITAL ADEQUACY

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended,

Six months ended,

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

June 30,

June 30,

June 30,

2026

2026

2025

2025

2025

2026

2025

PER COMMON SHARE

Market Price

  High

$         33.90

$         31.16

$         26.98

$         26.79

$         25.19

$         33.90

$         29.04

  Low

$         28.06

$         25.09

$         23.26

$         23.55

$         22.05

$         25.09

$         22.05

  Close

$         33.83

$         27.88

$         25.02

$         25.25

$         24.26

$         33.83

$         24.26

Average shares outstanding - basic

103,938,322

103,705,269

96,724,148

94,889,341

94,860,428

103,822,439

94,753,700

Average shares outstanding - diluted

104,936,741

104,615,405

97,593,800

95,753,798

95,741,696

104,776,961

95,633,579

Ending shares outstanding

104,956,458

104,932,829

98,521,726

95,757,250

95,760,617

104,956,458

95,760,617

Total shareholders' equity

$  2,987,488

$  2,940,625

$  2,769,216

$  2,631,855

$  2,558,155

$  2,987,488

$  2,558,155

REGULATORY CAPITAL

Preliminary

Preliminary

Common equity tier 1 capital

$  2,029,668

$  1,970,561

$  1,798,266

$  1,828,843

$  1,776,038

$  2,029,668

$  1,776,038

Common equity tier 1 capital ratio

12.33 %

12.22 %

11.32 %

12.91 %

12.57 %

12.33 %

12.57 %

Tier 1 capital

$  2,075,286

$  2,016,070

$  1,843,672

$  1,874,191

$  1,821,316

$  2,075,286

$  1,821,316

Tier 1 ratio

12.61 %

12.50 %

11.60 %

13.23 %

12.89 %

12.61 %

12.89 %

Total capital

$  2,591,169

$  2,531,334

$  2,457,377

$  2,170,546

$  2,116,180

$  2,591,169

$  2,116,180

Total capital ratio

15.75 %

15.70 %

15.46 %

15.32 %

14.98 %

15.75 %

14.98 %

Total capital in excess of minimum requirement

$     863,256

$     837,959

$     788,889

$     683,018

$     632,563

$     863,256

$     632,563

Total risk-weighted assets

$ 16,456,311

$ 16,127,377

$ 15,890,363

$ 14,166,935

$ 14,129,683

$ 16,456,311

$ 14,129,683

Leverage ratio

9.66 %

9.39 %

9.53 %

10.50 %

10.28 %

9.66 %

10.28 %

OTHER CAPITAL RATIOS

Ending shareholders' equity to ending assets

13.31 %

12.91 %

13.11 %

14.18 %

13.73 %

13.31 %

13.73 %

Ending tangible shareholders' equity to ending tangible assets (1)

8.24 %

7.87 %

7.79 %

8.87 %

8.40 %

8.24 %

8.40 %

Average shareholders' equity to average assets

13.18 %

13.12 %

13.31 %

13.87 %

13.66 %

13.15 %

13.52 %

Average tangible shareholders' equity to average tangible assets (1)

8.08 %

8.01 %

7.97 %

8.54 %

8.26 %

8.04 %

8.10 %

REPURCHASE PROGRAM (2)

Shares repurchased

0

0

0

0

0

0

0

Average share repurchase price

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Total cost of shares repurchased

N/A

N/A

N/A

N/A

N/A

N/A

N/A

(1) Non-GAAP measure.  For details on the calculation of these non-GAAP financial measures and a reconciliation to the GAAP financial measure, see the sections titled "Use of Non-GAAP Financial Measures" in this release and "Appendix: Non-GAAP to GAAP Reconciliation" in the accompanying slide presentation.

(2) Represents share repurchases as part of publicly announced plans.

N/A = Not applicable

SOURCE First Financial Bancorp.

Crown Castle Inc. has declined to 2014-2016 levels, reflecting valuation compression and capital allocation missteps. CCI's fiber business sale was at $8.5 billion, well below its $20 billion capex. Current valuation and a 5.5% dividend yield make CCI attractive for income-focused strategies, especially via longer-dated covered calls.

PHOENIX--(BUSINESS WIRE)--SECOND QUARTER 2026 FINANCIAL RESULTS.

STAMFORD, Conn.--(BUSINESS WIRE)--Webster Financial Corporation (“Webster”) (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income applicable to common stockholders of $249.4 million, or $1.56 per diluted share, for the quarter ended June 30, 2026, compared to $251.7 million, or $1.52 per diluted share, for the quarter ended June 30, 2025. Second quarter 2026 results include Transaction expenses. Excluding this item, adjusted earnings per diluted share would have be.

Hawaiian Airlines-branded Boeing 737-800s will replace the retiring Boeing 717 fleet, bringing proven, reliable aircraft with premium interiors and fast, free Starlink Wi-Fi to Neighbor Island flying. The future fleet will be based in Honolulu (HNL) and flown and crewed by Honolulu-based pilots and flight attendants. This represents the next step in the journey to bring more value to Hawai'i and the Hawai'i traveler, building on an expanded network, industry-leading loyalty program and comprehensive investments across technology, aircraft, airports, guest experience and community. , /PRNewswire/ --  Alaska Airlines, Inc. today announced the future fleet plan for Hawaiian Airlines' Neighbor Island flying – a modern fleet of Hawaiian-branded Boeing 737-800 aircraft that will replace Hawaiian's retiring Boeing 717 fleet, delivering a significantly improved guest experience and greater reliability for Hawai'i and the Hawai'i traveler.

The 737-800 aircraft will feature a modern premium onboard experience that includes:

Alaska Airlines, Inc. selects 737-800s to strengthen Hawaiian Airlines’ Neighbor Island service, enhancing the guest experience and increasing capacity

Alaska Airlines, Inc. selects 737-800s to strengthen Hawaiian Airlines’ Neighbor Island service, enhancing the guest experience and increasing capacity

Twice as many First Class seats and the addition of more than 30 Premium Class seats, creating more upgrade opportunities for Huaka'i by Hawaiian and Atmos™ Rewards members Fast, free Starlink Wi-Fi on all flights More room in cargo for surfboards Reclining leather Recaro seats throughout the aircraft 110V power outlets, USB charging and seatback device holders at every seat "Neighbor Island service is part of the fabric of life in Hawai'i, and we know how deeply our guests, employees and communities care about its future," said Diana Birkett Rakow, CEO of Hawaiian Airlines. "This decision reflects our commitment to invest in Hawai'i for the long term, to strengthen Hawaiian Airlines and to honor the local expertise, culture and care that have made Hawaiian the airline of Hawai'i for nearly a century."

The future fleet will carry the Hawaiian brand and focus on Neighbor Island service, based in Honolulu (HNL). The airline's plan is for these aircraft to be flown by Honolulu-based pilots and flight attendants once the integration is complete, sustaining the safe, reliable and frequent service Hawai'i residents depend on for work, school, family, medical care and everyday life across the Islands while delivering a more modern and premium onboard experience for all guests.

Neighbor Island flying is uniquely demanding, with short segments, frequent daily cycles and operations in a salt-air environment. The 737-800 is a durable, reliable and proven aircraft with airframes and engines that can withstand the high cycles of Neighbor Island operations, while enabling the airline to maintain capacity to meet demand with a full schedule of frequent departures from morning to evening.

"The 737-800 gives us a proven, capable platform for the next chapter of Neighbor Island flying," said Jim Landers, Head of Hawai'i Operations. "It is well suited to the operational needs of the Islands and gives our teams a clear path to transition from the 717s while continuing to deliver the reliable service our guests expect."

The goal is to begin the fleet transition in 2028 and move quickly to bring this additional capacity and enhanced experience to our guests. Additional details will be shared as planning continues.

To sustain frequency and capacity and meet the needs of Hawai'i's communities in the near-term, prior to the transition, Alaska will supplement 717 Neighbor Island flying with 737 capacity. Starting in October, one Alaska-branded 737 aircraft will fly three round trips per day between Honolulu and Kahului (OGG). This 737 will operate out of Terminal 1 at Honolulu's Daniel K. Inouye International Airport, and guests will be able to check in at Terminal 1.

The fleet decision is a key step in Alaska Accelerate, Alaska Air Group's strategic plan to deliver long-term growth by strengthening the company's dual-brand strategy, expanding the reach of Hawaiian Airlines and investing in the markets that matter most to guests. Strength in Hawai'i and continued investment in the Hawaiian Airlines brand are central to that plan.

Since combining Alaska Airlines and Hawaiian Airlines, the company has continued to invest in Hawai'i, strengthening connectivity through a broader network, launching a new, more valuable loyalty program, improving technology, planning a new Honolulu lounge and airport improvements across Hawai'i, and elevating the guest experience while deepening its commitment to local communities. The future Neighbor Island fleet builds on that journey, serving Hawai'i better together while honoring and sustaining two strong and beloved brands.

 "We fly for Hawai'i and have the privilege of serving and representing Hawai'i through the Hawaiian Airlines brand, which will be reflected across even more flights as our operational integration continues. Investment in a dedicated Hawaiian Airlines-branded 737-800 fleet is about more than aircraft. It is about protecting the connections that make life possible across the islands and ensuring Hawaiian remains strong for the future," added Birkett Rakow.

About Alaska, Hawaiian and Horizon
Alaska Airlines, Hawaiian Airlines and Horizon Air are subsidiaries of Alaska Air Group, and McGee Air Services is a subsidiary of Alaska Airlines. We are a global airline with hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco. We deliver remarkable care as we fly our guests to more than 140 destinations throughout North America, Latin America, Asia, the Pacific and Europe. Guests can book travel at alaskaair.com and hawaiianairlines.com. Alaska and Hawaiian are members of the oneworld alliance. Members of our Atmos Rewards loyalty program can earn and redeem points with oneworld airlines and our additional global partners that serve over 1,000 worldwide destinations. Learn more about what's happening at Alaska and Hawaiian at news.alaskaair.com. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as "ALK."

SOURCE Alaska Airlines

ALK stock is moving. Watch the price action here. Alaska Air Q2 Details      Alaska Air Group reported quarterly losses of 92 cents per share, which beat the Street estimate for losses of 99 cents, according to Benzinga Pro data.

Quarterly revenue came in at $4.07 billion, which missed the consensus estimate of $4.09 billion.

The air carrier reported fuel cost of $4.43 per gallon in the second quarter, up 85% year over year.

"Our second quarter results were defined by a fuel spike outside our control — but underneath it, this company is executing better than ever," said CEO Ben Minicucci.

"We led the industry in on-time performance for the first half of the year, completed the last major milestone of our Hawaiian integration, launched service to Europe and returned to profitability in June,” Minicucci added.   

Looking ahead, Alaska Air Group expects third-quarter EPS between zero cents and $1, versus the $1.38 analyst estimate.

ALK Stock Price Activity: According to data from Benzinga Pro, Alaska Air shares were down 2.35% to $44.39 in Tuesday’s extended trading.  

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1 in the industry in year-to-date on-time performance

Expanded international service to include transatlantic flights from Seattle to Rome, London, Reykjavík

Achieved single passenger service system for Alaska and Hawaiian and recognized employees with 75k Atmos Points for major integration milestone

Q3 RASM expected to have double digit growth year-over-year

, /PRNewswire/ -- Alaska Air Group (NYSE: ALK) today reported financial results for the second quarter ending June 30, 2026.

"Our second quarter results were defined by a fuel spike outside our control - but underneath it, this company is executing better than ever," said CEO Ben Minicucci. "We led the industry in on-time performance for the first half of the year, completed the last major technical milestone of our Hawaiian integration, launched service to Europe, and returned to profitability in June. Absent the fuel headwind, we would have delivered a solidly profitable quarter. I have never been more confident in our people, our plan, and the long-term earnings power of Alaska Air Group."

Quarter in Review:

Air Group reported second quarter Generally Accepted Accounting Principles (GAAP) pretax margin of (5.3)% and GAAP net loss of $76 million, or $0.68 per share. Air Group's second quarter adjusted pretax margin was (4.3)% and adjusted net loss was $102 million, or $0.92 per share.

Q2 2026 Results

Prior Expectation

Actual Results

Capacity (ASMs) % change versus 2025

Up ~1%

Up 1.0%

RASM % change versus 2025

Up high single digits

Up 8.6%

CASMex % change versus 2025

Up high single digits

Up 6.5%

Economic fuel cost per gallon

$4.50

$4.43

Adjusted loss per share

~($1.00)

($0.92)

Second quarter total revenue grew 10% year-over-year to $4.1 billion on capacity growth of 1%, with unit revenue up 8.6%. Yields strengthened through the quarter, with June producing double digit unit revenue growth and double digit pretax profit margins.  

Our revenue performance was impacted by historic rainstorms in Hawai'i in March which had a meaningful impact on April spring break travel and reduced system unit revenue by approximately 3 points in the quarter, modestly above the 2 points originally expected. Outside of Hawai'i, demand remained resilient across the network and our diversified revenue streams continue to outpace system growth: premium revenue increased 15%, cargo revenue increased 21%, and managed corporate revenue accelerated 30% year-over-year respectively. Loyalty performance was also robust, with loyalty cash remuneration up 19%.

Non-fuel unit costs increased 6.5% year-over-year on 1% capacity growth, better than prior guidance. The year-over-year increase reflects 2.5 points of transitory factors, including a one-time employee recognition award tied to achieving a single passenger service system, a year-over-year headwind from prior-year aircraft sale gains, and crew training costs for our international widebody ramp. Outside of these transitory items, core cost management was strong, gaining momentum moving into the second half of the year.  

Second quarter economic fuel cost was $4.43 per gallon, an increase of 85% year-over-year, resulting in $600 million of incremental fuel cost for the period. In response to the elevated and unpredictable fuel price environment, we proactively raised $1 billion in financing during the quarter, deliberately bolstering liquidity to the top end of our target range of 15% to 25% of trailing-12-month revenue. As the fuel environment stabilizes and our earnings profile improves, we expect to put excess liquidity towards paying down debt and bring liquidity back to the midpoint of our target range.

Third Quarter Forecast Information:

With a strong demand backdrop and an improving unit cost trajectory, we expect a widening spread between unit revenue and unit costs in Q3. Coupled with continued execution on our strategic initiatives, we expect a meaningful inflection in financial performance beginning in Q3.

Third quarter capacity is expected to be up approximately 2% to 3% year-over-year, with nearly all growth coming from long-haul international flying out of Seattle, while capacity within North America will be essentially flat year-over-year.

Unit revenue is expected to improve sequentially from the second to third quarter to low double-digit growth year-over-year, supported by strong yields and demand. While Hawai'i remains a 2-3 point unit revenue headwind in the third quarter, loads are recovering and new bookings are coming in at system level yields, showing demand returning to historical levels in September.

Third quarter non-fuel unit costs are expected to increase in the low to mid single digits year-over-year, a meaningful step-down from the first half of the year, as transitory cost items are behind us and productivity improvements compound. While fuel prices remain volatile, economic fuel cost is expected to come down from second quarter levels as refining margins have recently moderated. Our guidance assumes a fuel price of $3.75 per gallon in the third quarter, reflecting July fuel costs of $3.60 per gallon, and average spot prices of $3.85 for August and September.   

Q3 2026 Expectation

Capacity (ASMs) % change versus 2025

Up 2% to 3%

RASM % change versus 2025

Up low double digits

CASMex % change versus 2025

Up low to mid single digits

Economic fuel cost per gallon

$3.75

Adjusted earnings (loss) per share(a)

$0.00 to $1.00

(a) Q3 earnings per share guidance assumes non-operating expense of approximately $60 million, a tax rate of approximately 35%, and shares outstanding of approximately 113.5 million.

Operational Updates:

Led the industry in year-to-date on-time performance. Transitioned to a single passenger service system (PSS), marking a key integration milestone that consolidates reservation and customer service platforms across Alaska and Hawaiian, and delivers a more streamlined guest experience. Launched new transatlantic service from Seattle with flights to Rome, London, and Reykjavik, further expanding our international network and reinforcing our position as the fourth-largest global airline in the U.S. Took delivery of six 737-8 aircraft, two E175 aircraft, and added one E175 under CPA with SkyWest. Announced agreement to add four 737-800 freighter aircraft to Alaska's cargo fleet, effectively doubling the cargo fleet's capacity. The aircraft are expected to enter service in the first half of 2027. Completed the 737 cabin retrofits, adding expanded first and premium class seating and refreshed cabin interiors. Announced expansions in our domestic route network, including the addition of new routes from Santa Rosa, the return of service between Seattle and Long Beach, new service from Honolulu to Burbank, Spokane, and Boise, and increased service between Honolulu and Las Vegas. Commercial Updates:

Hawaiian Airlines joined the oneworld alliance, connecting Hawai'i to over 900 global destinations across more than 170 territories. Opened the newest Alaska Lounge at Portland International Airport, which is twice the size of the previous Portland lounge and underscores our continued investment in premium travel. Announced plans for a new world-class Alaska Lounge in Seattle. The new lounge is set to open in 2027 and will span across two floors, featuring showers, premium bars, à la carte dining, and chef-curated seasonal menus. Liquidity Updates:

Generated $606 million of operating cash flow during the first six months of 2026. Held $3.8 billion in available liquidity, including unrestricted cash, marketable securities, and undrawn credit facilities. Total liquidity includes $1 billion in financing completed in the second quarter, comprising $500 million of 6.5% senior unsecured notes and $500 million in term loans secured by assets associated with the Atmos™ Rewards program. Had approximately $20 billion of unencumbered assets at June 30, 2026, including 131 aircraft and the unencumbered portion of our loyalty program assets. Other Highlights:

Elected Shane Tackett as President and Chief Financial Officer of Alaska Airlines. Appointed Mike Sievert, Vice Chairman and former CEO of T-Mobile, to Air Group's board of directors. Celebrated our employees' efforts in achieving a single PSS and dedication throughout the Alaska-Hawaiian integration by awarding 75,000 Atmos Rewards points to all Alaska, Hawaiian, and Horizon employees. Opened new premium check-in experience in Seattle for business class Suites guests and Atmos Titanium members. CEO Ben Minicucci named Executive of the Year - North America at FlightGlobal's 2026 Airline Strategy Awards. Hawaiian Airlines named "Most Comfortable Airline" on WalletHub's 2026 Best Airlines list.   Alaska Airlines and Hawaiian Airlines were recognized with APEX Best Awards for Best Cabin Service and Best Wi‑Fi, respectively. Alaska Airlines recognized by the Port of Seattle's Sustainable Century Awards for Environmental Performance and Innovation and Greatest Use of Ground Power and Pre‑Conditioned Air Systems. A conference call regarding the second quarter results will be streamed online at 11:30 a.m. EDT/ 8:30 a.m. PDT on July 22, 2026. It can be accessed at www.alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call.

References in this update to "Air Group," "Company," "we," "us," and "our" refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified.

This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by our forward-looking statements, assumptions or beliefs. For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially, see Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Some of these risks include competition, labor costs, relations and availability, general economic conditions, increases in operating costs including fuel, uncertainties regarding the ability to successfully integrate operations following the acquisition of Hawaiian Holdings, Inc. and the ability to realize anticipated cost savings, synergies, or growth from the acquisition, inability to meet cost reduction and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, cybersecurity risks, and changes in laws and regulations that impact our business. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed in our most recent Form 10-K and in our subsequent SEC filings. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements made today to conform them to actual results. Over time, our actual results, performance or achievements may differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, assumptions or beliefs and such differences might be significant and materially adverse.

Alaska Airlines, Hawaiian Airlines and Horizon Air are subsidiaries of Alaska Air Group, and McGee Air Services is a subsidiary of Alaska Airlines. We are a global airline with hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco. We deliver remarkable care as we fly our guests to more than 140 destinations throughout North America, Latin America, Asia, the Pacific and Europe. Guests can book travel at alaskaair.com and hawaiianairlines.com. Alaska and Hawaiian are members of the oneworld alliance. With oneworld and our additional global partners, guests can earn and redeem points for travel to over 1,000 worldwide destinations with Atmos Rewards. Learn more about what's happening at Alaska and Hawaiian at news.alaskaair.com. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as "ALK."

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Alaska Air Group, Inc.

Three Months Ended June 30,

Six Months Ended June 30,

(in millions, except per share amounts)

2026

2025

Change

2026

2025

Change

Operating Revenue

Passenger revenue

$    3,644

$     3,355

9 %

$    6,564

$     6,163

7 %

Loyalty program other revenue

258

210

23 %

485

417

16 %

Cargo and other revenue

163

139

17 %

316

261

21 %

Total Operating Revenue

4,065

3,704

10 %

7,365

6,841

8 %

Operating Expenses

Wages and benefits

1,239

1,165

6 %

2,481

2,292

8 %

Variable incentive pay

65

61

7 %

95

123

(23) %

Aircraft fuel

1,305

700

86 %

2,101

1,381

52 %

Aircraft maintenance

256

240

7 %

472

460

3 %

Aircraft rent

64

64

— %

125

126

(1) %

Landing fees and other rentals

305

278

10 %

596

520

15 %

Contracted services

158

146

8 %

309

291

6 %

Selling expenses

115

105

10 %

214

205

4 %

Depreciation and amortization

207

199

4 %

411

393

5 %

Food and beverage service

107

97

10 %

202

182

11 %

Third-party regional carrier expense

68

69

(1) %

124

133

(7) %

Other

302

247

22 %

605

508

19 %

Special items - operating

42

56

(25) %

77

147

(48) %

Total Operating Expenses

4,233

3,427

24 %

7,812

6,761

16 %

Operating Income (Loss)

(168)

277

(161) %

(447)

80

NM

Non-operating Income (Expense)

Interest income

21

22

(5) %

40

48

(17) %

Interest expense

(86)

(66)

30 %

(162)

(132)

23 %

Interest capitalized

13

9

44 %

23

21

10 %

Other - net

6

(4)

NM

15

(12)

NM

Total Non-operating Expense

(46)

(39)

18 %

(84)

(75)

12 %

Income (Loss) Before Income Tax

(214)

238

(531)

5

Income tax expense (benefit)

(138)

66

(262)

(1)

Net Income (Loss)

$       (76)

$       172

$     (269)

$          6

Basic Earnings (Loss) Per Share

$     (0.68)

$      1.45

$     (2.39)

$      0.05

Diluted Earnings (Loss) Per Share

$     (0.68)

$      1.42

$     (2.39)

$      0.05

Weighted Average Shares Outstanding used for computation:

Basic

111.127

118.847

112.702

120.979

Diluted

111.127

120.930

112.702

123.183

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

Alaska Air Group, Inc.

(in millions, except share amounts)

June 30,
2026

December 31,
2025

ASSETS

Cash and cash equivalents

$     1,064

$       627

Restricted cash

33

28

Marketable securities

1,598

1,496

Receivables - net

681

565

Inventories and supplies - net

253

203

Prepaid expenses

261

278

Other current assets

46

69

Total Current Assets

3,936

3,266

Property and equipment - net of accumulated depreciation and amortization of $5,205 and $4,945

12,009

11,857

Operating lease assets

1,345

1,268

Goodwill

2,723

2,723

Intangible assets - net of accumulated amortization of $102 and $74

787

815

Other noncurrent assets

446

432

Total Noncurrent Assets

17,310

17,095

Total Assets

$    21,246

$    20,361

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$       403

$       324

Accrued wages, vacation and payroll taxes

727

881

Air traffic liability

2,398

1,689

Other accrued liabilities

1,217

1,055

Deferred revenue

1,778

1,722

Current portion of long-term debt and finance leases

452

721

Current portion of operating lease liabilities

217

197

Total Current Liabilities

7,192

6,589

Long-term debt and finance leases, net of current portion

5,783

4,834

Operating lease liabilities, net of current portion

1,164

1,141

Deferred income taxes

739

1,004

Deferred revenue

1,752

1,711

Obligation for pension and post-retirement medical benefits

349

369

Other liabilities

597

595

Total Noncurrent Liabilities

10,384

9,654

Shareholders' Equity

Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding

—

—

Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2026 - 147,087,872 shares; 2025 - 145,115,659 shares, Outstanding: 2026 - 111,566,970 shares; 2025 - 115,530,889 shares

1

1

Capital in excess of par value

1,034

961

Treasury stock (common), at cost: 2026 - 35,520,902 shares; 2025 - 29,584,770 shares

(1,951)

(1,701)

Accumulated other comprehensive loss

(175)

(173)

Retained earnings

4,761

5,030

Total Shareholders' Equity

3,670

4,118

Total Liabilities and Shareholders' Equity

$    21,246

$    20,361

SUMMARY CASH FLOW (unaudited)

Alaska Air Group, Inc.

(in millions)

Six Months Ended
June 30, 2026

Three Months Ended
March 31, 2026(a)

Three Months Ended
June 30, 2026(b)

Cash Flows from Operating Activities:

Net Loss

$               (269)

$               (193)

$                (76)

Adjustments to reconcile net loss to net cash provided by operating activities

453

229

224

Changes in working capital

422

385

37

Net cash provided by operating activities

606

421

185

Cash Flows from Investing Activities:

Property and equipment additions

(523)

(338)

(185)

Other investing activities

(112)

169

(281)

Net cash used in investing activities

(635)

(169)

(466)

Cash Flows from Financing Activities:

472

(428)

900

Net increase (decrease) in cash and cash equivalents

443

(176)

619

Cash, cash equivalents, and restricted cash at beginning of period

684

684

508

Cash, cash equivalents, and restricted cash at end of the period

$              1,127

$                508

$              1,127

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents

$              1,064

$                451

Restricted cash

33

27

Restricted cash included in Other noncurrent assets

30

30

Total cash, cash equivalents, and restricted cash at end of the period

$              1,127

$                508

(a) As reported in Form 10-Q for the first quarter of 2026.

(b) Cash flows for the three months ended June 30, 2026 can be calculated by subtracting cash flows from the three months ended March 31, 2026 from the six months ended June 30, 2026.

OPERATING STATISTICS (unaudited)

A manual recalculation of certain figures using rounded amounts may not agree directly to the actual figures presented in the table below.

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

Change

2026

2025

Change

Consolidated Operating Statistics:(a)

Revenue passengers (000)

15,056

15,234

(1.2) %

28,388

28,393

— %

RPMs (000,000) "traffic"

20,011

20,179

(0.8) %

37,311

37,436

(0.3) %

ASMs (000,000) "capacity"

24,306

24,058

1.0 %

45,876

45,277

1.3 %

Load factor

82.3 %

83.9 %

(1.6) pts

81.3 %

82.7 %

(1.4) pts

Yield

18.21¢

16.62¢

9.6 %

17.59¢

16.46¢

6.9 %

PRASM

14.99¢

13.94¢

7.5 %

14.31¢

13.61¢

5.1 %

RASM

16.72¢

15.39¢

8.6 %

16.06¢

15.11¢

6.3 %

CASMex(b)

11.40¢

10.70¢

6.5 %

11.85¢

11.14¢

6.4 %

Fuel cost per gallon(c)

$4.43

$2.39

85.4 %

$3.74

$2.49

50.2 %

Fuel gallons (000,000)(c)

295

293

0.7 %

562

556

1.1 %

ASMs per gallon

82.4

82.0

0.5 %

81.6

81.5

0.1 %

Departures (000)

139.0

139.6

(0.4) %

264.5

263.5

0.4 %

Average full-time equivalent employees (FTEs)

31,726

31,299

1.4 %

31,596

30,536

3.5 %

Operating fleet(d)

422

409

13 a/c

422

409

13 a/c

(a) 

Except for FTEs, data includes activity under a capacity purchase agreement with a third-party regional carrier.

(b) 

See a reconciliation of this non-GAAP measure and Note A for a discussion of the importance of this measure to investors in the accompanying pages.

(c) 

Excludes operations under the Air Transportation Services Agreement (ATSA) with Amazon.

(d) 

Includes owned and leased aircraft as well as aircraft operated under a capacity purchase agreement with a third-party regional carrier.

GAAP TO NON-GAAP RECONCILIATIONS (unaudited)
Alaska Air Group, Inc.

We are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. Amounts in the tables below are rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to the amounts presented. These reconciliations include adjustments intended to improve comparability and provide a clearer view of the Company's core operating performance.

Losses (gains) on foreign debt and other primarily reflect unrealized and realized gains or losses resulting from changes in foreign currency exchange rates on certain debt. In 2025, these expenses also included mark-to-market fuel hedge adjustments.

Special items - operating primarily relate to costs associated with the integration of Hawaiian Airlines, including employee-related costs, technology costs, and other merger-related expenses. In 2025, these expenses also included costs related to changes in Alaska flight attendants' sick leave benefits pursuant to a collective bargaining agreement ratified in the first quarter of 2025.

Pretax Income (Loss), Net Income (Loss), and Earnings (Loss) per Share, adjusted

Three Months Ended June 30,

2026

2025

(in millions, except per share amounts)

Loss
Before
Income
Tax

Income
Tax

Net
Loss

Per
Share

Income 
Before
Income
Tax

Income
Tax

Net
Income

Per
Share

GAAP

$         (214)

$  (138)

$    (76)

$  (0.68)

$ 238

$     66

$    172

$   1.42

Adjusted for:

Losses (gains) on foreign debt and other

(4)

1

Special items - operating

42

56

Total adjustments

$   38

$     64

$    (26)

$  (0.24)

$   57

$     14

$     43

$   0.36

Adjusted

$         (176)

$    (74)

$  (102)

$  (0.92)

$ 295

$     80

$    215

$   1.78

GAAP pretax margin

(5.3) %

6.4 %

Adjusted pretax margin

(4.3) %

8.0 %

Six Months Ended June 30,

2026

2025

(in millions, except per share amounts)

Loss
Before
Income
Tax

Income
Tax

Net
Loss

Per
Share

Income
Before
Income
Tax

Income
Tax

Net
Income

Per
Share

GAAP

$         (531)

$  (262)

$  (269)

$  (2.39)

$    5

$     (1)

$      6

$   0.05

Adjusted for:

Losses (gains) on foreign debt and other

(7)

3

Special items - operating

77

147

Total adjustments

$   70

$     95

$    (25)

$  (0.22)

$ 150

$     36

$    114

$   0.92

Adjusted

$         (461)

$  (167)

$  (294)

$  (2.61)

$ 155

$     35

$    120

$   0.97

GAAP pretax margin

(7.2) %

0.1 %

Adjusted pretax margin

(6.3) %

2.3 %

CASMex Reconciliation

Three Months Ended June 30,

Six Months Ended June 30,

(in millions, except unit metrics)

2026

2025

2026

2025

Total operating expenses

$        4,233

$        3,427

$        7,812

$        6,761

Less the following components:

Aircraft fuel

1,305

700

2,101

1,381

Freighter costs

52

48

104

89

Performance-based pay

64

49

92

101

Special items - operating

42

56

77

147

Adjusted operating expenses

$        2,770

$        2,574

$        5,438

$        5,043

ASMs

24,306

24,058

45,876

45,277

CASMex

          11.40¢

          10.70¢

          11.85¢

          11.14¢

Adjusted Capital Expenditures Reconciliation

Six Months Ended June 30,

(in millions)

2026

2025

Aircraft, aircraft purchase deposits, and other flight equipment

$            415

$            613

Other property and equipment

108

128

Capital expenditures

523

741

Adjusted for:

Property and equipment acquired through the issuance of debt

48

69

Proceeds from sales of aircraft and other equipment

(7)

(62)

Adjusted capital expenditures

$            564

$            748

Debt-to-capitalization, including leases

(in millions)

June 30, 2026

December 31, 2025

Long-term debt and finance leases, net of current portion

$                 5,783

$                 4,834

Operating lease liabilities, net of current portion

1,164

1,141

Adjusted debt, net of current portion

6,947

5,975

Shareholders' equity

3,670

4,118

Total Invested Capital

$               10,617

$                10,093

Debt-to-capitalization ratio, including leases

65 %

59 %

Adjusted net debt to earnings before interest, taxes, depreciation, amortization, fixed portion of operating lease expense, and special items

(in millions)

June 30, 2026

December 31, 2025

Long-term debt and finance leases

$                    6,235

$                    5,555

Operating lease liabilities

1,381

1,338

Adjusted debt

7,616

6,893

Less: Total unrestricted cash and marketable securities

2,662

2,123

Adjusted net debt

$                    4,954

$                    4,770

(in millions)

Twelve Months Ended
June 30, 2026

Twelve Months Ended
December 31, 2025

Operating Income (Loss)(a)

$                     (224)

$                      303

Adjusted for:

Special items - operating

180

250

Gains on foreign debt and other

(13)

(3)

Depreciation and amortization

813

795

Fixed portion of operating lease expense

279

279

EBITDAR

$                    1,035

$                    1,624

Adjusted net debt to EBITDAR

4.8x

2.9x

(a) 

Operating income (loss) can be reconciled using the trailing twelve month operating income as filed quarterly with the SEC.

Note A: Pursuant to Regulation G, we provide reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures. We believe these non-GAAP measures provide meaningful supplemental information to investors for the following reasons:

Pretax income (loss), net income (loss), and earnings (loss) per share are presented on an adjusted basis. Adjustments are made for special charges that are unusual or nonrecurring in nature, as well as for gains and losses on foreign debt, as these adjustments enhance comparability of our core operations to prior periods and to the rest of the airline industry. CASMex is a key measure used by management and the Air Group Board of Directors to evaluate cost performance. It is also commonly used by industry analysts to compare airlines. Because U.S. carriers are generally similarly affected by changes in jet fuel prices over the long run, aircraft fuel costs are excluded to focus on more controllable, company-specific cost drivers. Costs related to freighter aircraft operations, including those incurred under the ATSA with Amazon, are excluded to enhance comparability with carriers that do not operate freighter aircraft. Performance‑Based Pay (PBP) expense is excluded as it is dependent on the Company's achievement of annually established financial and operational goals. Certain special charges are excluded as they are unusual or nonrecurring in nature. Adjusted capital expenditures includes certain amounts that are not classified as investing cash outflows within our consolidated statements of cash flows, but are viewed by management and other stakeholders as significant long-term investments in the business. Management believes these adjustments provide a more complete view of capital expenditures during the year. Liquidity and leverage measures, including debt-to-capitalization and adjusted net debt to EBITDAR, are presented to provide insight into the Company's financial position and flexibility. In 2026, we made adjustments to the calculation of these metrics to enhance comparability with our peers. The debt-to-capitalization ratio now excludes the current portion of operating and finance lease liabilities, with prior periods recast for consistency. Additionally, EBITDAR was adjusted to reflect the fixed portion of operating leases rather than total aircraft rent to better reflect performance, with prior periods recast accordingly. GLOSSARY OF TERMS

Adjusted debt - long-term debt, plus operating and finance lease liabilities

Adjusted net debt - long-term debt, plus operating and finance lease liabilities, less unrestricted cash and marketable securities

Adjusted net debt to EBITDAR - represents adjusted net debt divided by EBITDAR (trailing twelve months earnings before interest, taxes, depreciation, amortization, fixed portion of operating leases, and special items)

ASMs - available seat miles, or "capacity"; represents total seats available across the fleet multiplied by the number of miles flown

CASMex - operating costs excluding fuel, freighter costs, Performance-Based Pay (PBP), and special items per ASM, or "unit cost"

Debt-to-capitalization ratio - represents adjusted debt, net of current portion, divided by total equity plus adjusted debt, net of current portion

Diluted Earnings per Share - represents earnings per share (EPS) using fully diluted shares outstanding

Diluted Shares - represents the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, were exercised

Freighter Costs - operating expenses directly attributable to the operation of B737 freighter aircraft and A330-300 freighter aircraft exclusively performing cargo missions

Load Factor - RPMs as a percentage of ASMs; represents the number of available seats that were filled with revenue passengers

PRASM - passenger revenue per ASM, or "passenger unit revenue"

RASM - operating revenue per ASMs, or "unit revenue"; operating revenue includes all passenger revenue, freight & mail, loyalty program revenue, and other ancillary revenue; represents the average total revenue for flying one seat one mile

RPMs - revenue passenger miles, or "traffic"; represents the number of seats that were filled with revenue passengers; one passenger traveling one mile is one RPM

Yield - passenger revenue per RPM; represents the average passenger revenue for flying one passenger one mile

SOURCE Alaska Air Group