The first financial company / inside / s 2. and 3. management’s discussion and analysis of the financial position, results of operations, and quantitative and qualitative disclosures about market risks (Form 10-Q)

The first financial company / inside / s 2. and 3. management’s discussion and analysis of the financial position, results of operations, and quantitative and qualitative disclosures about market risks (Form 10-Q)

The aim of this dialogue is to level out key components within the Company's
latest efficiency in contrast with earlier intervals. The dialogue needs to be learn
along side the monetary statements starting on web page three of this
report. All figures are for the consolidated entities. It's presumed the
readers of those monetary statements and of the next narrative have
beforehand learn the Company's monetary statements for 2021 within the 10-Okay
filed for the fiscal 12 months ended December 31, 2021.

This Quarterly Report on Kind 10-Q comprises forward-looking statements.
Ahead-looking statements present present expectations or forecasts of future
occasions and aren't ensures of future efficiency, nor ought to they be relied
upon as representing administration's views as of any subsequent date. The
forward-looking statements are primarily based on administration's expectations and are
topic to numerous dangers and uncertainties. Though administration believes
that the expectations mirrored in such forward-looking statements are
cheap, precise outcomes might differ materially from these expressed or implied
in such statements. Dangers and uncertainties that might trigger precise outcomes to
differ materially embrace, with out limitation, the Company's skill to
successfully execute its enterprise plans; modifications normally financial and
monetary market circumstances; modifications in rates of interest; modifications within the
aggressive setting; persevering with consolidation within the monetary providers
trade; new litigation or modifications in current litigation; losses, buyer
chapter, claims and assessments; modifications in banking laws or different
regulatory or legislative necessities affecting the Company's enterprise; and
modifications in accounting insurance policies or procedures as could also be required by the Monetary
Accounting Requirements Board or different regulatory businesses. Dangers associated to
COVID-19 embrace the disruption of native, regional, nationwide and world financial
exercise attributable to infectious illness outbreaks, together with the latest outbreak
of coronavirus, or COVID-19, and the numerous influence that such outbreak has
had and will have on our progress, operations, earnings and asset high quality; modifications
in asset high quality, together with will increase in default charges on loans and better
ranges of nonperforming loans and mortgage charge-offs usually, and particularly
ensuing from the financial dislocation attributable to the COVID-19 pandemic;
inaccuracy of the assumptions and estimates that the administration of our
Company makes in establishing reserves for possible credit score losses and different
estimates usually, and particularly on account of the impact of the COVID-19
pandemic; and a rise within the fee of non-public or business clients'
bankruptcies usually, and particularly on account of the COVID-19 pandemic.
Further info regarding components that might trigger precise outcomes to
differ materially from these expressed or implied within the forward-looking
statements is out there within the Company's Kind 10-Okay for the 12 months ended
December 31, 2021, and subsequent filings with the United States Securities and
Trade Fee (SEC). Copies of those filings can be found for free of charge on
the SEC's Website at www.sec.gov or on the Company's Website at
www.first-online.com. Administration might elect to replace forward-looking statements
at some future level; nevertheless, it particularly disclaims any obligation to
do
so.

                          Important Accounting Insurance policies

Sure of the Company's accounting insurance policies are necessary to the portrayal
of the Company's monetary situation and outcomes of operations, since they
require administration to make tough, complicated or subjective judgments, a few of
which can relate to issues which might be inherently unsure. Estimates related
with these insurance policies are vulnerable to materials modifications on account of modifications
in info and circumstances. Info and circumstances which may have an effect on these
judgments embrace, with out limitation, modifications in rates of interest, within the
efficiency of the economic system or within the monetary situation of debtors.
Administration believes that its important accounting insurance policies embrace figuring out
the allowance for credit score losses and the valuation of goodwill and valuing
funding securities. See additional dialogue of those important accounting
insurance policies within the 2021 Kind 10-Okay. Since December 31, 2021, the important accounting
coverage for figuring out the allowance for credit score losses has been enhanced with
the dialogue under from December 31, 2021.

Allowance for credit score losses. The allowance for credit score losses (ACL) represents
administration's estimate of anticipated losses inherent inside the current mortgage
portfolio. The allowance for credit score losses is elevated by the availability for
credit score losses charged to expense and diminished by loans charged off, web of
recoveries. The allowance for credit score losses is decided primarily based on administration's
evaluation of a number of components: critiques and evaluations of particular loans,
modifications within the nature and quantity of the mortgage portfolio, present financial
circumstances, nonperforming loans, willpower of acquired loans as buy
credit score deteriorated, and cheap and supportable forecasts. Loans are
individually evaluated when they don't share danger traits with different
loans within the respective pool. Loans evaluated individually are excluded from the
collective analysis. Administration elected the collateral dependent sensible
expedient upon adoption of ASC 326. Anticipated credit score losses on individually
evaluated loans are primarily based on the honest worth of the collateral on the reporting
date, adjusted for promoting prices as applicable.

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Administration makes use of a cohort methodology to find out the allowance for credit score
losses. This technique identifies and captures the stability of a pool of loans with
comparable danger traits, as of a selected time limit to type a cohort,
then tracks the respective losses generated by that cohort of loans over their
remaining life. The cohorts observe mortgage balances and historic loss expertise
since 2008, and administration extends the look again interval every quarter to seize
all obtainable information factors within the historic loss fee calculation. The
quantitative element of the ACL entails assumptions that require a
important degree of estimation; these embrace historic losses as a predictor
of future efficiency, appropriateness of chosen delay intervals, and the
reasonableness of the portfolio segmentation.

A historic information set is anticipated to offer one of the best indication of future
credit score efficiency. Delay intervals symbolize the period of time it takes a cohort
of loans to develop into seasoned, or incur adequate attrition by way of pay downs,
renewals, or charge-offs. Portfolio segmentation pertains to the pooling of loans
with comparable danger traits, reminiscent of trade sorts, collateral, and
client objective. On an annual foundation, within the first quarter, administration performs
a recalibration of the delay intervals and portfolio segmentation to find out
whether or not they're cheap and applicable primarily based on the knowledge obtainable
at the moment.

Administration considers qualitative changes to anticipated credit score loss estimates
for info not already captured within the loss estimation course of. The place previous
efficiency is probably not consultant of future losses, loss charges are adjusted
for qualitative and financial forecast components. Administration makes use of the height three
consecutive quarter web cost off fee to seize most potential volatility
over the cheap and supportable forecast interval. Historic losses utilized
in setting the qualitative issue ranges are anchored to 2008 and could also be
supplemented by peer info when wanted. The qualitative issue ranges are
recalibrated yearly to seize latest conduct that's indicative of the
credit score profile of the present portfolio.

Qualitative components embrace objects, reminiscent of modifications in lending insurance policies or
procedures, asset particular dangers, and financial uncertainty in forward-looking
forecasts. Financial indicators utilized in forecasting embrace unemployment
fee, gross home product, housing begins, and rates of interest. Administration
makes use of a two-year cheap and supportable interval throughout all mortgage segments to
forecast financial circumstances. Administration believes the two-year time horizon
aligns with obtainable trade steering and varied forecasting sources.
Financial forecast changes are overlaid onto historic loss charges. As such,
reversion from forecast charges to historic loss charges is quick.

The ACL and allowance for unfunded commitments have been $39.5 million and $2.1
million, respectively at September 30, 2022, in comparison with $48.3 million and $3.0
million, respectively at December 31, 2021. The $8.8 million lower within the ACL
was the results of a number of components. The primary was the annual mannequin recalibration.
Moreover, the qualitative components have been decrease from the seasoning of the
acquired loans, in addition to decrease qualitative components, because of the sale of non
farm non residential business loans within the third quarter. Lastly, the reserve
was impacted by improved portfolio efficiency. The qualitative quantity of the
reserve decreased $3.9 million to $10.4 million. The quantitative quantity is
$28.9 million at September 30, 2022, in comparison with $33.6 million at December 31,
2021. There was a $900 thousand lower within the allowance for unfunded
commitments. See further dialogue of ACL within the Allowance for Credit score Losses
part under.

Based mostly on administration's evaluation of the present portfolio, administration believes the
allowance is satisfactory.Modifications within the monetary situation of particular person
debtors, financial circumstances, historic loss expertise, or the situation of
the varied markets wherein collateral could also be bought might have an effect on the required
degree of the allowance for credit score losses and the related provision for credit score
losses. As administration screens these modifications, in addition to these components mentioned
above, changes could also be recorded to the allowance for credit score losses and the
related provision for credit score losses sooner or later.

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                          Abstract of Working Outcomes
Web revenue for the three months ended September 30, 2022 was $18.1 million,
in comparison with $16.1 million for a similar interval in 2021. Primary earnings per share
elevated to $1.50 for the third quarter of 2022 in comparison with $1.24 for a similar
interval in 2021. Return on Belongings and Return on Fairness have been 1.43% and 15.00%
respectively, for the three months ended September 30, 2022 in comparison with 1.34%
and 10.75% for the three months ended September 30, 2021. Web revenue for the
9 months ended September 30, 2022 was $54.6 million, in comparison with $45.6
million for a similar interval in 2021. Primary earnings per share elevated to $4.45
for the primary 9 months of 2022 in comparison with $3.42 for a similar interval in 2021.
Return on Belongings and Return on Fairness have been 1.43% and 14.14% respectively, for
the 9 months ended September 30, 2022, in comparison with 1.28% and 10.10% for the
9 months ended September 30, 2021.

On November 5, 2021, the Company accomplished its acquisition of Hancock
Bancorp, Inc. and its banking subsidiary, Hancock Financial institution and Belief Firm.
Subsequently, the outcomes of Hancock Bancorp have been included within the outcomes of
operations starting on November 5, 2021. Pursuant to the phrases of the merger
settlement, every issued and excellent share of Hancock Bancorp, Inc. widespread
inventory, issued and excellent, was transformed into the correct to obtain $18.38
per share in money. The mixture worth of the transaction was $31.36 million.
Acquisition-related prices of $1.2 million are included within the Company's
revenue assertion for the 12 months ended December 31, 2021.

On September 27, 2021, First Monetary Company issued a press launch
asserting that its Board of Administrators authorised the merger of subsidiary, The
Morris Plan Firm of Terre Haute, into subsidiary, First Monetary Financial institution N.A.
The merger was efficient on February 21, 2022. The merger resulted in elevated
efficiencies, which have been acknowledged within the first quarter of 2022.

On October 31, 2022, First Monetary Company issued a press launch
asserting plans to optimize its banking heart community as a part of a plan to
enhance working efficiencies and accommodate altering buyer preferences.
Topic to regulatory necessities, over the following two quarters the Company
will shut and consolidated seven of its seventy-two branches. These
consolidations are projected to avoid wasting the Company roughly $1.5 million
per 12 months in working bills, commencing within the first quarter of 2023.

The primary parts of revenue and bills that have an effect on web revenue are mentioned within the following evaluation.

Web Curiosity Revenue

The Company's major supply of earnings is web curiosity revenue, which is
the distinction between the curiosity earned on loans and different investments and
the curiosity paid for deposits and different sources of funds. Web curiosity revenue
elevated $7.1 million within the three months ended September 30, 2022 to $43.1
million from $36.0 million in the identical interval in 2021. The web curiosity margin
for the three months ended September 30, 2022 is 3.71% in comparison with 3.22% for the
similar interval in 2021, a 15.37% improve. Web curiosity revenue elevated $14.8
million within the 9 months ended September 30, 2022 to $121.4 million from
$106.6 million in the identical interval in 2021. The web curiosity margin for the
9 months ended September 30, 2022 is 3.44% in comparison with 3.24% for a similar
interval in 2021. Rates of interest elevated considerably from 2021 to 2022, because of
federal fee changes.

Non-Curiosity Revenue
Non-interest revenue for the three months ended September 30, 2022 was $12.1
million in comparison with $11.1 million for a similar interval of 2021. Non-interest
revenue for the 9 months ended September 30, 2022 was $36.1 million in contrast
to $31.3 million for a similar interval in 2021. The change in non-interest revenue
from 2021 to 2022 was primarily pushed by a $4.0 million authorized settlement
acquired in February, 2022. The Company doesn't anticipate this revenue to
reoccur. As well as positive aspects from the sale of mortgage loans declined $1.0 million
for the three months ended September 30, 2022 in comparison with September 30, 2021,
and $2.6 million for the 9 months ended September 30, 2022 in comparison with
September 30, 2021.

Non-interest bills

The Company's non-interest expense for the quarter ended September 30, 2022
was $31.5 million in comparison with $28.5 million for a similar interval in 2021. The
Company's non-interest expense for the 9 months ended September 30, 2022
elevated $9.4 million to $93.5 million in comparison with the identical interval in 2021.
The year-over-year modifications are, partly, impacted by the acquisition of Hancock
Bancorp within the fourth quarter of 2021.

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provision for credit score losses

The Company's provision for credit score losses elevated to $1.1 million for the
third quarter of 2022 as in comparison with $(1.5) million for a similar interval in 2021.
Web charge-offs for the third quarter of 2022 have been $3.0 million in comparison with $270
thousand for a similar interval of 2021. In 2021 the potential losses from the
authentic CECL calculation weren't realized, and the economic system had proven
enhancements which allowed for the lower in provision. The supply for mortgage
losses decreased $1.5 million to $(4.8) million for the 9 months ended
September 30, 2022 in comparison with $(3.2) million for a similar interval in 2021. Web
cost offs for the primary 9 months of 2022 elevated $3.2 million to $4.1
million in comparison with the identical interval in 2021. The detrimental provision for the 12 months
was the results of a number of components. The primary was the annual mannequin recalibration.
Every year, within the first quarter, administration critiques every mannequin variable to
decide if changes are obligatory to enhance the mannequin's predictability. In
the primary quarter 2022 the delay intervals have been shortened to choose up newer
losses. Additionally, the qualitative issue most scorecard ranges for sure
cohorts have been diminished, which diminished the reserve. Secondly, administration eliminated
two qualitative components that have been deemed now not relevant. The primary was
associated to an acquisition, which administration believed to have seasoned adequately
that it was now not warranted. The second was associated to the CECL mannequin and
the associated uncertainty. The uncertainty surrounded the novelty of the mannequin and
potential regulatory scrutiny. Following two examination cycles, administration elected to
take away the issue. Additionally, throughout the quarter, historic loss charges continued to
decline, which lowers the required reserve. The historic loss fee declined in
most segments. Based mostly on administration's evaluation of the present portfolio, an
analysis that features consideration of modifications in CECL mannequin assumptions of
credit score high quality, financial circumstances, and mortgage composition, administration believes
the allowance is satisfactory.

On July 12, 2022, the Company bought seven labeled non farm non residential
business loans, which have been acquired within the two acquisitions in 2019 and 2021,
with a complete principal stability of $14.9 million. The web restoration on the sale of
$361 thousand consists of the charge-off of the seven loans of $2,145 thousand,
netted by the $2,072 thousand reserve on these loans, beforehand charged off in
the interval, and the $434 thousand unamortized low cost remaining from the
acquisitions. Because the associated cost offs have been beforehand reserved for and
associated to acquired loans, the rise in web cost offs for the quarter does
not have a major influence on the longer term anticipated losses.

revenue tax expense

The company’s efficient revenue tax fee for the primary 9 months of 2022 was 20.61% in comparison with 20.07% for a similar interval in 2021.

dangerous loans

Non-performing loans encompass (1) non-accrual loans on which the last word
collectability of the complete quantity of curiosity is unsure, (2) loans which have
been renegotiated to offer for a discount or deferral of curiosity or
principal due to a deterioration within the monetary place of the borrower,
and (3) loans overdue ninety days or extra as to principal or curiosity.
Non-performing loans decreased to $14.3 million at September 30, 2022 in contrast
to $14.9 million at December 31, 2021. Nonperforming loans decreased 26.8%
in comparison with $19.5 million as of September 30, 2021. A abstract of non-performing
loans at September 30, 2022 and December 31, 2021 follows:

                                                                                                      (000's)
                                                                                     September 30, 2022      December 31, 2021
Non-accrual loans                                                                   $              9,147    $             9,590
Accruing restructured loans                                                                        3,465                  3,897
Nonaccrual restructured loans                                                                        482                    902
Accruing loans overdue over 90 days                                                               1,185                    515
                                                                                    $             14,279    $            14,904

Ratio of the allowance for credit score losses as a share of non-performing loans                   276.6 %                324.1 %


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The next classes of loans embrace materials parts of non-performing and non-restructured loans:

                                             (000's)
                            September 30, 2022     December 31, 2021
Non-accrual loans
Business loans            $             4,811   $             4,991
Residential loans                         2,314                 3,049
Shopper loans                            2,022                 1,550
                            $             9,147   $             9,590
Late 90 days or extra
Business loans            $               238   $                14
Residential loans                           551                   410
Shopper loans                              396                    91
                            $             1,185   $               515


The CARES Act included a provision that permitted a monetary establishment to
elect to droop briefly troubled debt restructuring accounting below ASC
Subtopic 310-40 in sure circumstances ("part 4013"). To be eligible below
part 4013, a mortgage modification should have been (1) associated to COVID-19;
(2) executed on a mortgage that was no more than 30 days overdue as of
December 31, 2019; and (3) executed between March 1, 2020, and the sooner of
(A) 60 days after the date of termination of the Nationwide Emergency or
(B) December 31, 2020. In response to this part of the CARES Act, the federal
banking businesses issued a revised interagency assertion on April 7, 2020 that,
in session with the Monetary Accounting Requirements Board, confirmed that
for loans not topic to part 4013, short-term modifications made on a very good
religion foundation in response to COVID-19 to debtors who have been present previous to any
reduction weren't troubled debt restructurings below ASC Subtopic 310-40. This
included short-term (e.g., as much as six months) modifications reminiscent of fee
deferrals, price waivers, extensions of reimbursement phrases, or delays in fee that
have been insignificant. Debtors thought-about present have been those who have been lower than
30 days overdue on their contractual funds on the time a modification
program was carried out. From the inception of the CARES Act by way of
December 31, 2021, 1,242 loans totaling $172 million have been modified, associated to
COVID-19, that weren't thought-about troubled debt restructurings. 1,189 loans
totaling $195 million have resumed regular scheduled funds. 113 remaining
loans are nonetheless below a debt reduction plan, which embrace no business loans that
have been offered further fee reduction because the preliminary fee reduction
plan.

Rate of interest and liquidity sensitivity

First Monetary Company has established danger measures, limits and coverage
tips for managing rate of interest danger and liquidity. Accountability for
administration of those features resides with the Asset Legal responsibility Committee. The
major purpose of the Asset Legal responsibility Committee is to maximise web curiosity revenue
inside the rate of interest danger limits authorised by the Board of Administrators.

rate of interest danger

Administration considers rate of interest danger to be essentially the most important market danger to the organisation. Rate of interest danger is the publicity to modifications in web curiosity revenue on account of modifications in rates of interest. Consistency in a corporation’s web curiosity revenue relies upon to a big extent on the efficient administration of those dangers.

The Asset Legal responsibility place is measured utilizing subtle danger administration
instruments, together with incomes simulation and market worth of fairness sensitivity
evaluation. These instruments enable administration to quantify and monitor each short-term
and long-term publicity to rate of interest danger. Simulation modeling measures the
results of modifications in rates of interest, modifications within the form of the yield curve
and the results of embedded choices on web curiosity revenue. This measure
tasks earnings within the varied environments over the following three years. It's
necessary to notice that measures of rate of interest danger have limitations and are
depending on varied assumptions. These assumptions are inherently unsure
and, because of this, the mannequin can not exactly predict the influence of rate of interest
fluctuations on web curiosity revenue. Precise outcomes will differ from simulated
outcomes because of timing, frequency and quantity of rate of interest modifications in addition to
total market circumstances. The Committee has carried out a radical evaluation of
these assumptions and believes them to be legitimate and theoretically sound. These
assumptions are constantly monitored for behavioral modifications.

The Company infrequently makes use of derivatives to handle rate of interest
danger. Administration constantly evaluates the deserves of such rate of interest danger
merchandise however doesn't anticipate using such merchandise to develop into a significant half
of the Company's danger administration technique.

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The desk under exhibits the Company's estimated sensitivity profile as of
September 30, 2022. The change in rates of interest assumes a parallel shift in
rates of interest of 100 and 200 foundation factors. Given a 100 foundation level improve in
charges, web curiosity revenue would improve 2.48% over the following 12 months and
improve 5.21% over the next 12 months. Given a 100 foundation level lower in
charges, web curiosity revenue would lower 3.71% over the following 12 months and
lower 7.45% over the next 12 months. These estimates assume all fee
modifications happen in a single day and administration takes no motion on account of this
change.

Foundation Level                Proportion Change in Web Curiosity Revenue
Curiosity Price Change     12 months        24 months        36 months
Down 200                      (7.64) %        (15.41) %        (20.96) %
Down 100                      (3.71)           (7.45)          (10.24)
Up 100                          2.48             5.21             7.86
Up 200                          2.00             7.44            12.84

A typical fee shock evaluation doesn’t replicate administration’s skill to reply and thus cut back the influence of fee modifications, and represents a worst-case situation.

Liquidity danger

Liquidity represents an establishment's skill to offer funds to fulfill
calls for from depositors, debtors, and different collectors by both changing
property into money or accessing new or current sources of incremental funds.
Typically the Company depends on deposits, mortgage repayments and repayments of
funding securities as its major sources of funds. The Company has $18.4
million of investments that mature all through the following 12 months. The
Company additionally anticipates $117.8 million of principal funds from
mortgage-backed and different securities. Given the present fee setting, the
Company anticipates $6.7 million in securities to be referred to as inside the subsequent
12 months. The Company additionally has unused borrowing capability obtainable with the
Federal House Mortgage Financial institution of Indianapolis and several other correspondent banks. With
these sources of funds, the Company presently anticipates satisfactory liquidity
to satisfy the anticipated obligations of its clients.

Monetary scenario

Evaluating the primary 9 months of 2022 to year-ended December 31, 2021, loans
web of deferred mortgage prices, have elevated $155 million to $3.0 billion.
Deposits decreased 0.05% to $4.4 billion at September 30, 2022 in comparison with
December 31, 2021. Shareholders' fairness decreased 24.71% or $144.0 million. This
monetary efficiency decreased ebook worth per share 20.90% to $36.49 at
September 30, 2022 from $46.13 at December 31, 2021. Evaluating the primary
9 months of 2022 to the identical interval in 2021, loans, web of deferred mortgage
prices, have elevated $491 million to $3.0 billion. Deposits elevated 9.4% to
$4.4 billion at September 30, 2022 in comparison with September 30, 2021. Shareholders'
fairness decreased 26.27% or $156.3 million. This monetary efficiency decreased
ebook worth per share 21.06% to $36.49 at September 30, 2022 from $46.22 at
September 30, 2021. E-book worth per share is calculated by dividing the full
shareholders' fairness by the variety of shares excellent. Gathered different
complete revenue decreased $164.9 million primarily because of the market worth
of the securities portfolio, which mirrored the big lower in securities
pricing.

As a Small Enterprise Administration lender, we have been effectively positioned to help
enterprise clients in accessing funds obtainable by way of the Paycheck Safety
Program ("PPP") carried out in April 2020. Via September 30, 2022, we
processed roughly $272 million of authorised PPP loans. The carrying worth
of those loans is $880 thousand as of September 30, 2022.

capital adequacy

The Federal Reserve, OCC and Federal Deposit Insurance coverage Company
(collectively, joint businesses) set up regulatory capital tips for U.S.
banking organizations. Regulatory capital tips require that capital be
measured in relation to the credit score and market dangers of each on- and off-balance
sheet objects utilizing varied danger weights. On January 1, 2015, the Basel 3
guidelines grew to become efficient and embrace transition provisions by way of January 1,
2019. Below Basel 3, Complete capital consists of two tiers of capital, Tier 1 and
Tier 2. Tier 1 capital is additional composed of Frequent fairness tier 1 capital and
further tier 1 capital.

Frequent fairness tier 1 capital primarily consists of qualifying widespread shareholders'
fairness, retained earnings and sure minority pursuits. Goodwill, disallowed
intangible property and sure disallowed deferred tax property are excluded from
Frequent fairness tier 1 capital.

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Further tier 1 capital primarily consists of qualifying non-cumulative most popular
inventory, belief most popular securities (Belief Securities) topic to phase-out and
sure minority pursuits. Sure deferred tax property are additionally excluded.

Tier 2 capital primarily consists of qualifying subordinated debt, a restricted
portion of the allowance for mortgage and lease losses, Belief Securities topic to
phase-out and reserves for unfunded lending commitments. The Company's Complete
capital is the sum of Tier 1 capital plus Tier 2 capital.

To satisfy adequately capitalized regulatory necessities, an establishment should
keep a Tier 1 capital ratio of 8.50 % and a Complete capital ratio of
10.50 %. A "well-capitalized" establishment should usually keep capital
ratios 200 bps larger than the minimal tips. The danger-based capital
guidelines have been additional supplemented by a Tier 1 leverage ratio, outlined as Tier
1 capital divided by quarterly common whole property, after sure changes.
BHCs should have a minimal Tier 1 leverage ratio of a minimum of 4.0 %. Nationwide
banks should keep a Tier 1 leverage ratio of a minimum of 5.0 % to be
labeled as "effectively capitalized." Failure to satisfy the capital necessities
established by the joint businesses can result in sure necessary and
discretionary actions by regulators that might have a cloth adversarial impact on
the Company's monetary place. Beneath are the capital ratios for the
Company and lead financial institution.

The Progressive Complete Capital Upkeep Reserve has set the minimal ratios of odd Tier 1 capital at 7%, Tier 1 capital at 8.5% and whole capital at 10.5%. The establishment is presently exceeding all of those minimums.

                                        September 30, 2022       December 31, 2021       To Be Nicely Capitalized
Frequent fairness tier 1 capital
Company                                          13.69 %                 14.37 %                        N/A
First Monetary Financial institution                                 12.00 %                 13.53 %                          - %
Complete risk-based capital
Company                                          14.75 %                 15.63 %                        N/A
First Monetary Financial institution                                 13.07 %                 14.78 %                          - %
Tier I risk-based capital
Company                                          13.69 %                 14.37 %                        N/A
First Monetary Financial institution                                 12.00 %                 13.53 %                          - %
Tier I leverage capital
Company                                          10.33 %                  9.83 %                        N/A
First Monetary Financial institution                                  8.99 %                  9.18 %                          - %


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