FAIR VALUE DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 2011

Estimated Fair Values of Financial Instruments

The estimated fair values of First Financial’s financial instruments were as follows:

	June 30, 2011				December 31, 2010
(Dollars in thousands)	Carrying value		Fair value		Carrying value		Fair value
Financial assets
Cash and short-term investments	$	251,258	$	251,258	$	282,933	$	282,933
Investment securities held-to-maturity		3,001		3,226		17,406		18,066
Investment securities available-for-sale		1,134,114		1,134,114		919,110		919,110
Other investments		71,492		71,492		78,689		78,689
Loans held for sale		8,824		8,824		29,292		29,292
Loans, excluding covered loans		2,735,483		2,720,921		2,758,858		2,720,080
Covered loans		1,191,686		1,215,537		1,465,000		1,477,631
Mortgage-servicing rights		1,201		1,212		1,502		1,502
FDIC indemnification asset		193,113		170,602		222,648		212,431
Accrued interest receivable		10,903		10,903		14,063		14,063
Derivative financial instruments		0		0		262		262

Financial liabilities
Deposits
Noninterest-bearing	$	728,178	$	728,178	$	705,484	$	705,484
Interest-bearing demand		1,021,519		1,021,519		1,111,877		1,111,877
Savings		1,643,110		1,643,110		1,534,045		1,534,045
Time		1,581,603		1,591,588		1,794,843		1,818,237
Total deposits		4,974,410		4,984,395		5,146,249		5,169,643
Short-term borrowings		105,291		105,291		59,842		59,842
Long-term debt		102,255		106,604		128,880		125,825
Other long-term debt		0		0		20,620		20,620
Accrued interest payable		4,392		4,392		5,516		5,516
Derivative financial instruments		2,871		2,871		3,223		3,223

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis at June 30, 2011:

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3			Netting Adjustments (1)			Assets/Liabilities at Fair Value
Assets
Derivatives	$	0	$	17,550	$	(763	)	$	(16,787	)	$	0
Available-for-sale investment securities		145		1,133,969		0			0			1,134,114
Total	$	145	$	1,151,519	$	(763	)	$	(16,787	)	$	1,134,114

Liabilities
Derivatives	$	0	$	19,658	$	0		$	(16,787	)	$	2,871

(1)	Amounts represent the impact of legally enforceable master netting arrangements that allow First Financial to settle positive and negative positions and also cash collateral held with the same counterparties.

Summary of Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table summarizes financial assets and liabilities measured at fair value on a nonrecurring basis at June 30, 2011:

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3		Year-to-date Gains/(Losses)
Assets
Loans held for sale	$	0	$	8,824	$	0	$	0
Impaired loans (1)		156		18,046		323		0

(1) Amounts represent the fair value of collateral for impaired loans allocated to the allowance for loan and lease losses. Fair values are determined using actual market prices (Level 1), independent third party valuations, discounted as appropriate (Level 2), and borrower records discounted as appropriate (Level 3).

- Definition

Tabular disclosure of assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
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-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 14
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15
-Subparagraph b-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13476-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13467-108611

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 18
-Subparagraph c(2), d, e, f
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32
-Subparagraph a, c(1), c(2), c(3), d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 19
-Subparagraph a, b, c(1), d(1)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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