LOANS (covered) (Tables) (Covered Loans)

9 Months Ended

Sep. 30, 2011

Carrying Value of Purchased Impaired and Nonimpaired Loans

The following table reflects the carrying value of all purchased impaired and nonimpaired covered loans:



	September 30, 2011						December 31, 2010
(Dollars in thousands)	Loans Accounted For Under FASB ASC Topic 310-30		Loans excluded from FASB ASC Topic 310-30 ⁽¹⁾		Total Purchased Loans		Loans Accounted For Under FASB ASC Topic 310-30		Loans Excluded From FASB ASC Topic 310-30 ⁽¹⁾		Total Purchased Loans
Commercial	$	209,163	$	14,719	$	223,882	$	295,600	$	38,439	$	334,039
Real estate - construction	25,893		0		25,893		42,743		0		42,743
Real estate - commercial	674,973		12,419		687,392		837,942		17,783		855,725
Real estate - residential	127,753		0		127,753		147,052		0		147,052
Installment	13,022		1,156		14,178		19,560		1,511		21,071
Home equity	4,764		63,133		67,897		7,241		66,454		73,695
Other covered loans	0		4,071		4,071		0		7,168		7,168
Total covered loans	$	1,055,568	$	95,498	$	1,151,066	$	1,350,138	$	131,355	$	1,481,493

(1) Includes loans with revolving privileges which are scoped out of FASB ASC Topic 310-30 and certain loans which First Financial elected to treat under the cost recovery method of accounting.

Covered Nonaccrual Loans

Information as to covered nonaccrual loans was as follows:



(Dollars in thousands)	September 30, 2011		December 31, 2010
Principal balance
Nonaccrual loans
Commercial	$	8,378	$	16,190
Real estate-commercial	3,782		2,074
Home equity	2,114		1,491
All other	9		0
Total	$	14,283	$	19,755



	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30, 2011		September 30, 2011
Interest income effect
Gross amount of interest that would have been recorded under original terms	$	268	$	769
Interest included in income	8		49
Net impact on interest income	$	260	$	720

Investment in Impaired Loans

First Financial’s investment in covered impaired loans, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:



	As of September 30, 2011
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		YTD Interest Income Recognized		Quarterly Interest Income Recognized
Loans with no related allowance recorded:
Commercial	$	8,378	$	10,559	$	0	$	10,541	$	43	$	7
Real estate - commercial	3,782		4,547		0		2,583		1		0
Home equity	2,114		3,642		0		1,512		5		1
All other	9		21		0		7		0		0
Total	$	14,283	$	18,769	$	0	$	14,643	$	49	$	8



	As of December 31, 2010
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		YTD Interest Income Recognized
Loans with no related allowance recorded:
Commercial	$	16,190	$	18,346	$	0	$	12,324	$	316
Real estate - commercial	2,074		5,412		0		3,910		14
Installment	0		0		0		255		0
Home equity	1,491		3,137		0		1,597		68
Total	$	19,755	$	26,895	$	0	$	18,086	$	398

Commercial and Consumer Credit Exposure by Risk Attribute

Covered commercial and consumer credit exposure by risk attribute was as follows:



	As of September 30, 2011
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial
Pass	$	133,799	$	6,116	$	370,605
Special Mention	25,480		4,966		77,308
Substandard	55,429		14,811		235,316
Doubtful	9,174		0		4,163
Total	$	223,882	$	25,893	$	687,392



(Dollars in thousands)	Real Estate Residential		Installment		Home Equity		Other
Performing	$	127,753	$	14,178	$	65,783	$	4,071
Nonperforming	0		0		2,114		0
Total	$	127,753	$	14,178	$	67,897	$	4,071



	As of December 31, 2010
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial
Pass	$	225,088	$	14,021	$	476,140
Special Mention	35,768		5,743		106,057
Substandard	60,090		22,979		268,651
Doubtful	13,093		0		4,877
Total	$	334,039	$	42,743	$	855,725



(Dollars in thousands)	Real Estate Residential		Installment		Home Equity		Other
Performing	$	147,052	$	21,071	$	72,204	$	7,168
Nonperforming	0		0		1,491		0
Total	$	147,052	$	21,071	$	73,695	$	7,168

Changes in Other Real Estate Owned

Changes in covered other real estate owned were as follows:



	Nine months ended		Full Year
(Dollars in thousands)	September 30, 2011		December 31, 2010
Balance at beginning of period	$	35,257	$	12,916
Additions
Commercial	38,431		22,237
Residential	2,315		9,827
Total additions	40,746		32,064
Disposals
Commercial	20,940		4,744
Residential	6,992		4,536
Total disposals	27,932		9,280
Write-downs
Commercial	4,138		414
Residential	1,095		29
Total write-downs	5,233		443
Balance at end of period	$	42,838	$	35,257

Loans Excluded from FASB ASC Topic 310-30

Carrying Amount of Accretable Yield for Purchased Impaired and Nonimpaired Loans

Changes in the carrying amount of accretable yield for loans accounted for under FASB ASC Topic 310-30 were as follows:



	Three Months Ended						Nine months ended
	September 30,						September 30,
(Dollars in thousands)	2011			2010			2011			2010
Balance at beginning of period ⁽¹⁾	$	421,781		$	514,436		$	509,945		$	623,669
Reclassification from non-accretable difference	17,311			81,067			50,517			81,067
Accretion	(31,168		)	(34,891		)	(97,447		)	(104,096		)
Other net activity ⁽²⁾	(4,878		)	(11,904		)	(59,969		)	(51,932		)
Balance at end of period	$	403,046		$	548,708		$	403,046		$	548,708

__________________________________________

(1) Excludes loans with revolving privileges which are scoped out of FASB Topic 310-30 and certain loans which First Financial elected to treat under the cost recovery method.

(2) Includes the impact of loan repayments and charge-offs.

Loan Delinquency, including Nonaccrual Loans

Covered loan delinquency, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:



	As of September 30, 2011
	30 - 59 days past due		60 - 89 days past due		> 90 days past due		Total past due		Current		Total		> 90 days past due and still accruing
Loans
Commercial	$	266	$	251	$	7,347	$	7,864	$	6,855	$	14,719	$	0
Real estate - commercial	579		0		3,754		4,333		8,086		12,419		0
Installment	0		0		0		0		1,156		1,156		0
Home equity	499		163		2,032		2,694		60,439		63,133		0
All other	42		10		77		129		3,942		4,071		68
Total	$	1,386	$	424	$	13,210	$	15,020	$	80,478	$	95,498	$	68



	As of December 31, 2010
	30 - 59 days past due		60 - 89 days past due		> 90 days past due		Total past due		Current		Total		> 90 days past due and still accruing
Loans
Commercial	$	880	$	419	$	13,764	$	15,063	$	23,376	$	38,439	$	0
Real estate - commercial	225		62		1,896		2,183		15,600		17,783		0
Installment	0		0		0		0		1,511		1,511		0
Home equity	656		443		1,424		2,523		63,931		66,454		0
All other	87		10		9		106		7,062		7,168		9
Total	$	1,848	$	934	$	17,093	$	19,875	$	111,480	$	131,355	$	9