FIRST FINANCIAL BANCORP. |
(Exact name of registrant as specified in its charter) |
Ohio | 31-1042001 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
255 East Fifth Street, Suite 700 Cincinnati, Ohio | 45202 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company o |
Class | Outstanding at August 5, 2013 | |
Common stock, No par value | 57,707,718 |
Page No. | |
June 30, 2013 | December 31, 2012 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Cash and due from banks | $ | 114,745 | $ | 134,502 | |||
Interest-bearing deposits with other banks | 2,671 | 24,341 | |||||
Investment securities available-for-sale, at market value (cost $900,068 at June 30, 2013 and $1,017,104 at December 31, 2012) | 884,694 | 1,032,096 | |||||
Investment securities held-to-maturity (market value $664,398 at June 30, 2013 and $778,474 at December 31, 2012) | 670,246 | 770,755 | |||||
Other investments | 75,645 | 71,492 | |||||
Loans held for sale | 18,650 | 16,256 | |||||
Loans | |||||||
Commercial | 940,420 | 861,033 | |||||
Real estate-construction | 97,246 | 73,517 | |||||
Real estate-commercial | 1,477,226 | 1,417,008 | |||||
Real estate-residential | 343,016 | 318,210 | |||||
Installment | 50,781 | 56,810 | |||||
Home equity | 370,206 | 367,500 | |||||
Credit card | 33,222 | 34,198 | |||||
Lease financing | 70,011 | 50,788 | |||||
Total loans - excluding covered loans | 3,382,128 | 3,179,064 | |||||
Less: Allowance for loan and lease losses - uncovered | 47,047 | 47,777 | |||||
Net loans - excluding covered loans | 3,335,081 | 3,131,287 | |||||
Covered loans | 622,265 | 748,116 | |||||
Less: Allowance for loan and lease losses - covered | 32,961 | 45,190 | |||||
Net loans – covered | 589,304 | 702,926 | |||||
Net loans | 3,924,385 | 3,834,213 | |||||
Premises and equipment | 142,675 | 146,716 | |||||
Goodwill | 95,050 | 95,050 | |||||
Other intangibles | 6,620 | 7,648 | |||||
FDIC indemnification asset | 88,966 | 119,607 | |||||
Accrued interest and other assets | 250,228 | 244,372 | |||||
Total assets | $ | 6,274,575 | $ | 6,497,048 | |||
Liabilities | |||||||
Deposits | |||||||
Interest-bearing | $ | 1,131,466 | $ | 1,160,815 | |||
Savings | 1,601,122 | 1,623,614 | |||||
Time | 978,680 | 1,068,637 | |||||
Total interest-bearing deposits | 3,711,268 | 3,853,066 | |||||
Noninterest-bearing | 1,059,368 | 1,102,774 | |||||
Total deposits | 4,770,636 | 4,955,840 | |||||
Federal funds purchased and securities sold under agreements to repurchase | 114,030 | 122,570 | |||||
Federal Home Loan Bank short-term borrowings | 505,900 | 502,000 | |||||
Total short-term borrowings | 619,930 | 624,570 | |||||
Long-term debt | 73,957 | 75,202 | |||||
Total borrowed funds | 693,887 | 699,772 | |||||
Accrued interest and other liabilities | 114,600 | 131,011 | |||||
Total liabilities | 5,579,123 | 5,786,623 | |||||
Shareholders' equity | |||||||
Common stock - no par value | |||||||
Authorized - 160,000,000 shares; Issued - 68,730,731 shares in 2013 and 2012 | 576,641 | 579,293 | |||||
Retained earnings | 329,633 | 330,004 | |||||
Accumulated other comprehensive loss | (25,645 | ) | (18,677 | ) | |||
Treasury stock, at cost, 11,032,387 shares in 2013 and 10,684,496 shares in 2012 | (185,177 | ) | (180,195 | ) | |||
Total shareholders' equity | 695,452 | 710,425 | |||||
Total liabilities and shareholders' equity | $ | 6,274,575 | $ | 6,497,048 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest income | |||||||||||||||
Loans, including fees | $ | 55,022 | $ | 63,390 | $ | 111,047 | $ | 129,826 | |||||||
Investment securities | |||||||||||||||
Taxable | 8,295 | 10,379 | 16,671 | 20,896 | |||||||||||
Tax-exempt | 560 | 121 | 1,140 | 255 | |||||||||||
Total interest on investment securities | 8,855 | 10,500 | 17,811 | 21,151 | |||||||||||
Other earning assets | (1,556 | ) | (1,967 | ) | (3,028 | ) | (3,957 | ) | |||||||
Total interest income | 62,321 | 71,923 | 125,830 | 147,020 | |||||||||||
Interest expense | |||||||||||||||
Deposits | 3,284 | 6,381 | 7,144 | 14,097 | |||||||||||
Short-term borrowings | 305 | 37 | 634 | 49 | |||||||||||
Long-term borrowings | 654 | 675 | 1,308 | 1,355 | |||||||||||
Total interest expense | 4,243 | 7,093 | 9,086 | 15,501 | |||||||||||
Net interest income | 58,078 | 64,830 | 116,744 | 131,519 | |||||||||||
Provision for loan and lease losses - uncovered | 2,409 | 8,364 | 5,450 | 11,622 | |||||||||||
Provision for loan and lease losses - covered | (8,283 | ) | 6,047 | 759 | 18,998 | ||||||||||
Net interest income after provision for loan and lease losses | 63,952 | 50,419 | 110,535 | 100,899 | |||||||||||
Noninterest income | |||||||||||||||
Service charges on deposit accounts | 5,205 | 5,376 | 9,922 | 10,285 | |||||||||||
Trust and wealth management fees | 3,497 | 3,377 | 7,447 | 7,168 | |||||||||||
Bankcard income | 3,145 | 2,579 | 5,578 | 5,115 | |||||||||||
Net gains from sales of loans | 1,089 | 1,132 | 1,795 | 2,072 | |||||||||||
Gains on sales of investment securities | 188 | 0 | 1,724 | 0 | |||||||||||
FDIC loss sharing income | (7,384 | ) | 8,280 | 1,550 | 21,096 | ||||||||||
Accelerated discount on covered loans | 1,935 | 3,764 | 3,870 | 7,409 | |||||||||||
Other | 3,940 | 9,037 | 6,427 | 12,325 | |||||||||||
Total noninterest income | 11,615 | 33,545 | 38,313 | 65,470 | |||||||||||
Noninterest expenses | |||||||||||||||
Salaries and employee benefits | 26,216 | 29,048 | 53,545 | 57,909 | |||||||||||
Pension settlement charges | 4,316 | 0 | 4,316 | 0 | |||||||||||
Net occupancy | 5,384 | 5,025 | 11,549 | 10,407 | |||||||||||
Furniture and equipment | 2,250 | 2,323 | 4,621 | 4,567 | |||||||||||
Data processing | 2,559 | 2,076 | 5,028 | 3,977 | |||||||||||
Marketing | 1,182 | 1,238 | 2,079 | 2,392 | |||||||||||
Communication | 781 | 913 | 1,614 | 1,807 | |||||||||||
Professional services | 1,764 | 2,151 | 3,567 | 4,298 | |||||||||||
State intangible tax | 1,004 | 970 | 2,018 | 1,996 | |||||||||||
FDIC assessments | 1,148 | 1,270 | 2,273 | 2,433 | |||||||||||
Loss (gain) - other real estate owned | 216 | 313 | 718 | 1,309 | |||||||||||
Loss (gain) - covered other real estate owned | (2,212 | ) | 1,233 | (2,369 | ) | 2,525 | |||||||||
Loss sharing expense | 1,578 | 3,085 | 3,864 | 4,836 | |||||||||||
Other | 7,097 | 7,814 | 13,566 | 14,781 | |||||||||||
Total noninterest expenses | 53,283 | 57,459 | 106,389 | 113,237 | |||||||||||
Income before income taxes | 22,284 | 26,505 | 42,459 | 53,132 | |||||||||||
Income tax expense | 6,455 | 8,703 | 12,806 | 18,336 | |||||||||||
Net income | $ | 15,829 | $ | 17,802 | $ | 29,653 | $ | 34,796 | |||||||
Net earnings per common share - basic | $ | 0.28 | $ | 0.31 | $ | 0.52 | $ | 0.60 | |||||||
Net earnings per common share - diluted | $ | 0.27 | $ | 0.30 | $ | 0.51 | $ | 0.59 | |||||||
Cash dividends declared per share | $ | 0.24 | $ | 0.29 | $ | 0.52 | $ | 0.60 | |||||||
Average common shares outstanding - basic | 57,291,994 | 57,933,281 | 57,365,105 | 57,864,269 | |||||||||||
Average common shares outstanding - diluted | 58,128,349 | 58,958,279 | 58,206,503 | 58,921,689 |
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 15,829 | $ | 17,802 | $ | 29,653 | $ | 34,796 | |||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Unrealized (losses) gains on investment securities arising during the period | (15,210 | ) | 157 | (18,567 | ) | 2,596 | |||||||||
Change in retirement obligation | 10,365 | 355 | 10,810 | 710 | |||||||||||
Unrealized gain (loss) on derivatives | 690 | 0 | 816 | 0 | |||||||||||
Unrealized (loss) gain on foreign currency exchange | (15 | ) | 3 | (27 | ) | 12 | |||||||||
Other comprehensive (loss) income | (4,170 | ) | 515 | (6,968 | ) | 3,318 | |||||||||
Comprehensive income | $ | 11,659 | $ | 18,317 | $ | 22,685 | $ | 38,114 | |||||||
See Notes to Consolidated Financial Statements. |
Common Stock | Common Stock | Retained | Accumulated other comprehensive | Treasury stock | |||||||||||||||||||||
Shares | Amount | Earnings | income (loss) | Shares | Amount | Total | |||||||||||||||||||
Balance at January 1, 2012 | 68,730,731 | $ | 579,871 | $ | 331,351 | $ | (21,490 | ) | (10,463,677 | ) | $ | (177,511 | ) | $ | 712,221 | ||||||||||
Net income | 34,796 | 34,796 | |||||||||||||||||||||||
Other comprehensive income | 3,318 | 3,318 | |||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||
Common stock at $0.60 per share | (34,832 | ) | (34,832 | ) | |||||||||||||||||||||
Excess tax benefit on share-based compensation | 348 | 348 | |||||||||||||||||||||||
Exercise of stock options, net of shares purchased | (914 | ) | 57,604 | 977 | 63 | ||||||||||||||||||||
Restricted stock awards, net of forfeitures | (4,318 | ) | 188,735 | 3,250 | (1,068 | ) | |||||||||||||||||||
Share-based compensation expense | 1,942 | 1,942 | |||||||||||||||||||||||
Balance at June 30, 2012 | 68,730,731 | $ | 576,929 | $ | 331,315 | $ | (18,172 | ) | (10,217,338 | ) | $ | (173,284 | ) | $ | 716,788 | ||||||||||
Balance at January 1, 2013 | 68,730,731 | $ | 579,293 | $ | 330,004 | $ | (18,677 | ) | (10,684,496 | ) | $ | (180,195 | ) | $ | 710,425 | ||||||||||
Net income | 29,653 | 29,653 | |||||||||||||||||||||||
Other comprehensive loss | (6,968 | ) | (6,968 | ) | |||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||
Common stock at $0.52 per share | (30,024 | ) | (30,024 | ) | |||||||||||||||||||||
Purchase of common stock | (540,400 | ) | (8,339 | ) | (8,339 | ) | |||||||||||||||||||
Excess tax benefit on share-based compensation | 30 | 30 | |||||||||||||||||||||||
Exercise of stock options, net of shares purchased | (503 | ) | 21,526 | 362 | (141 | ) | |||||||||||||||||||
Restricted stock awards, net of forfeitures | (4,316 | ) | 170,983 | 2,995 | (1,321 | ) | |||||||||||||||||||
Share-based compensation expense | 2,137 | 2,137 | |||||||||||||||||||||||
Balance at June 30, 2013 | 68,730,731 | $ | 576,641 | $ | 329,633 | $ | (25,645 | ) | (11,032,387 | ) | $ | (185,177 | ) | $ | 695,452 |
Six months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
Operating activities | |||||||
Net income | $ | 29,653 | $ | 34,796 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan and lease losses | 6,209 | 30,620 | |||||
Depreciation and amortization | 7,630 | 7,669 | |||||
Stock-based compensation expense | 2,137 | 1,942 | |||||
Pension expense (income) | 4,185 | (285 | ) | ||||
Net amortization of premiums/accretion of discounts on investment securities | 8,856 | 4,902 | |||||
Gains on sales of investment securities | (1,724 | ) | 0 | ||||
Originations of loans held for sale | (93,248 | ) | (102,950 | ) | |||
Net gains from sales of loans held for sale | (1,795 | ) | (2,072 | ) | |||
Proceeds from sales of loans held for sale | 91,340 | 106,803 | |||||
Deferred income taxes | (4,454 | ) | (2,670 | ) | |||
(Increase) decrease in interest receivable | (570 | ) | 3,341 | ||||
(Increase) decrease in cash surrender value of life insurance | (333 | ) | 2,039 | ||||
(Increase) decrease in prepaid expenses | (3,178 | ) | 1,109 | ||||
Decrease in indemnification asset | 30,641 | 26,244 | |||||
Decrease in accrued expenses | (4,199 | ) | (2,932 | ) | |||
Decrease in interest payable | (267 | ) | (993 | ) | |||
Other | 8,848 | 4,928 | |||||
Net cash provided by operating activities | 79,731 | 112,491 | |||||
Investing activities | |||||||
Proceeds from sales of securities available-for-sale | 92,684 | 0 | |||||
Proceeds from calls, paydowns and maturities of securities available-for-sale | 128,606 | 126,901 | |||||
Purchases of securities available-for-sale | (109,767 | ) | (331,300 | ) | |||
Proceeds from calls, paydowns and maturities of securities held-to-maturity | 95,020 | 50,122 | |||||
Net decrease in interest-bearing deposits with other banks | 21,670 | 366,211 | |||||
Net increase in loans and leases - excluding covered loans | (210,630 | ) | (62,600 | ) | |||
Net decrease in covered assets | 99,995 | 128,100 | |||||
Proceeds from disposal of other real estate owned | 19,995 | 22,537 | |||||
Purchases of premises and equipment | (5,440 | ) | (10,779 | ) | |||
Net cash provided by investing activities | 132,133 | 289,192 | |||||
Financing activities | |||||||
Net decrease in total deposits | (185,204 | ) | (541,091 | ) | |||
Net (decrease) increase in short-term borrowings | (4,640 | ) | 150,488 | ||||
Payments on long-term borrowings | (1,231 | ) | (1,410 | ) | |||
Cash dividends paid on common stock | (32,237 | ) | (33,571 | ) | |||
Treasury stock purchase | (8,339 | ) | 0 | ||||
Proceeds from exercise of stock options | 0 | 292 | |||||
Excess tax benefit on share-based compensation | 30 | 348 | |||||
Net cash used in financing activities | (231,621 | ) | (424,944 | ) | |||
Cash and due from banks: | |||||||
Net decrease in cash and due from banks | (19,757 | ) | (23,261 | ) | |||
Cash and due from banks at beginning of period | 134,502 | 149,653 | |||||
Cash and due from banks at end of period | $ | 114,745 | $ | 126,392 |
Held-to-Maturity | Available-for-Sale | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gain | Unrealized Loss | Market Value | Amortized Cost | Unrealized Gain | Unrealized Loss | Market Value | ||||||||||||||||||||||||
U.S. Treasuries | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 97 | $ | 0 | $ | (3 | ) | $ | 94 | |||||||||||||||
Securities of U.S. government agencies and corporations | 19,854 | 0 | (276 | ) | 19,578 | 10,272 | 0 | (125 | ) | 10,147 | ||||||||||||||||||||||
Mortgage-backed securities | 641,491 | 694 | (5,835 | ) | 636,350 | 681,529 | 6,777 | (17,974 | ) | 670,332 | ||||||||||||||||||||||
Obligations of state and other political subdivisions | 8,901 | 166 | (597 | ) | 8,470 | 34,693 | 52 | (1,608 | ) | 33,137 | ||||||||||||||||||||||
Asset-backed securities | 0 | 0 | 0 | 0 | 60,873 | 0 | (388 | ) | 60,485 | |||||||||||||||||||||||
Other securities | 0 | 0 | 0 | 0 | 112,604 | 193 | (2,298 | ) | 110,499 | |||||||||||||||||||||||
Total | $ | 670,246 | $ | 860 | $ | (6,708 | ) | $ | 664,398 | $ | 900,068 | $ | 7,022 | $ | (22,396 | ) | $ | 884,694 |
Held-to-Maturity | Available-for-Sale | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gain | Unrealized Loss | Market Value | Amortized Cost | Unrealized Gain | Unrealized Loss | Market Value | ||||||||||||||||||||||||
Securities of U.S. government agencies and corporations | $ | 20,512 | $ | 679 | $ | 0 | $ | 21,191 | $ | 15,562 | $ | 333 | $ | 0 | $ | 15,895 | ||||||||||||||||
Mortgage-backed securities | 740,891 | 8,077 | (1,290 | ) | 747,678 | 854,150 | 14,564 | (1,485 | ) | 867,229 | ||||||||||||||||||||||
Obligations of state and other political subdivisions | 9,352 | 265 | (12 | ) | 9,605 | 35,913 | 169 | (84 | ) | 35,998 | ||||||||||||||||||||||
Asset-backed securities | 0 | 0 | 0 | 0 | 57,000 | 90 | (1 | ) | 57,089 | |||||||||||||||||||||||
Other securities | 0 | 0 | 0 | 0 | 54,479 | 1,569 | (163 | ) | 55,885 | |||||||||||||||||||||||
Total | $ | 770,755 | $ | 9,021 | $ | (1,302 | ) | $ | 778,474 | $ | 1,017,104 | $ | 16,725 | $ | (1,733 | ) | $ | 1,032,096 |
Held-to-Maturity | Available-for-Sale | ||||||||||||||
(Dollars in thousands) | Amortized Cost | Market Value | Amortized Cost | Market Value | |||||||||||
Due in one year or less | $ | 215 | $ | 218 | $ | 14,244 | $ | 14,779 | |||||||
Due after one year through five years | 553,586 | 550,083 | 356,449 | 355,526 | |||||||||||
Due after five years through ten years | 107,195 | 104,818 | 219,699 | 214,398 | |||||||||||
Due after ten years | 9,250 | 9,279 | 309,676 | 299,991 | |||||||||||
Total | $ | 670,246 | $ | 664,398 | $ | 900,068 | $ | 884,694 |
June 30, 2013 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Securities of U.S. government agencies and corporations | $ | 19,625 | $ | (225 | ) | $ | 0 | $ | 0 | $ | 19,625 | $ | (225 | ) | ||||||||||
Mortgage-backed securities | 865,450 | (21,140 | ) | 23,867 | (231 | ) | 889,317 | (21,371 | ) | |||||||||||||||
Obligations of state and other political subdivisions | 68,190 | (2,648 | ) | 0 | 0 | 68,190 | (2,648 | ) | ||||||||||||||||
Asset-backed securities | 60,486 | (388 | ) | 0 | 0 | 60,486 | (388 | ) | ||||||||||||||||
Other securities | 66,453 | (1,737 | ) | 1,252 | (119 | ) | 67,705 | (1,856 | ) | |||||||||||||||
Total | $ | 1,080,204 | $ | (26,138 | ) | $ | 25,119 | $ | (350 | ) | $ | 1,105,323 | $ | (26,488 | ) |
December 31, 2012 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(Dollars in thousands) | Value | Loss | Value | Loss | Value | Loss | ||||||||||||||||||
Mortgage-backed securities | $ | 240,641 | $ | (1,635 | ) | $ | 25,513 | $ | (405 | ) | $ | 266,154 | $ | (2,040 | ) | |||||||||
Obligations of state and other political subdivisions | 21,341 | (96 | ) | 0 | 0 | 21,341 | (96 | ) | ||||||||||||||||
Asset-backed securities | 9,999 | (1 | ) | 0 | 0 | 9,999 | (1 | ) | ||||||||||||||||
Other securities | 8,454 | (163 | ) | 0 | 0 | 8,454 | (163 | ) | ||||||||||||||||
Total | $ | 280,435 | $ | (1,895 | ) | $ | 25,513 | $ | (405 | ) | $ | 305,948 | $ | (2,300 | ) |
(Dollars in thousands) | June 30, 2013 | December 31, 2012 | ||||||
Fair value hedges | ||||||||
Instruments associated with loans | $ | 910,175 | $ | 935,493 |
June 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Estimated fair value | Estimated fair value | |||||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet Classification | Notional amount | Gain | Loss | Notional amount | Gain | Loss | |||||||||||||||||||
Fair value hedges | ||||||||||||||||||||||||||
Pay fixed interest rate swaps with counterparty | Accrued interest and other liabilities | $ | 10,675 | $ | 0 | $ | (1,082 | ) | $ | 12,739 | $ | 0 | $ | (1,445 | ) | |||||||||||
Matched interest rate swaps with borrower | Accrued interest and other assets | 449,750 | 14,328 | (1,169 | ) | 461,377 | 24,135 | 0 | ||||||||||||||||||
Matched interest rate swaps with counterparty | Accrued interest and other liabilities | 449,750 | 1,169 | (14,418 | ) | 461,377 | 0 | (24,978 | ) | |||||||||||||||||
Total | $ | 910,175 | $ | 15,497 | $ | (16,669 | ) | $ | 935,493 | $ | 24,135 | $ | (26,423 | ) |
June 30, 2013 | December 31, 2012 | ||||||||||||||||||||||
(Dollars in thousands) | Gross amounts of recognized liabilities | Gross amounts offset in the Consolidated Balance Sheets | Net amounts of liabilities presented in the Consolidated Balance Sheets | Gross amounts of recognized liabilities | Gross amounts offset in the Consolidated Balance Sheets | Net amounts of liabilities presented in the Consolidated Balance Sheets | |||||||||||||||||
Fair value hedges | |||||||||||||||||||||||
Pay fixed interest rate swaps with counterparty | $ | 1,082 | $ | (444 | ) | $ | 638 | $ | 1,445 | $ | (669 | ) | $ | 776 | |||||||||
Matched interest rate swaps with counterparty | 15,587 | (13,552 | ) | 2,035 | 24,978 | (23,057 | ) | 1,921 | |||||||||||||||
Total | $ | 16,669 | $ | (13,996 | ) | $ | 2,673 | $ | 26,423 | $ | (23,726 | ) | $ | 2,697 |
Weighted-average rate | ||||||||||||||||
(Dollars in thousands) | Notional amount | Average maturity (years) | Fair value | Receive | Pay | |||||||||||
Asset conversion swaps | ||||||||||||||||
Pay fixed interest rate swaps with counterparty | $ | 10,675 | 3.3 | $ | (1,082 | ) | 2.21 | % | 6.85 | % | ||||||
Receive fixed, matched interest rate swaps with borrower | 449,750 | 4.2 | 13,159 | 4.94 | % | 2.93 | % | |||||||||
Pay fixed, matched interest rate swaps with counterparty | 449,750 | 4.2 | (13,249 | ) | 2.93 | % | 4.94 | % | ||||||||
Total asset conversion swaps | $ | 910,175 | 4.2 | $ | (1,172 | ) | 3.91 | % | 3.97 | % |
Decrease to Interest income | ||||||||||||||||||
(Dollars in thousands) | Three months ended | Six months ended | ||||||||||||||||
Derivatives in fair value hedging relationships | Location of change in fair value | June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
Interest rate contracts | ||||||||||||||||||
Loans | Interest income - loans | $ | (129 | ) | $ | (192 | ) | $ | (271 | ) | $ | (388 | ) | |||||
Total | $ | (129 | ) | $ | (192 | ) | $ | (271 | ) | $ | (388 | ) |
June 30, 2013 | December 31, 2012 | |||||||||||||
(Dollars in thousands) | Amount | Average Rate | Amount | Average Rate | ||||||||||
Federal Home Loan Bank | $ | 8,182 | 3.77 | % | $ | 9,427 | 3.74 | % | ||||||
National Market Repurchase Agreement | 65,000 | 3.50 | % | 65,000 | 3.50 | % | ||||||||
Capital loan with municipality | 775 | 0.00 | % | 775 | 0.00 | % | ||||||||
Total long-term debt | $ | 73,957 | 3.50 | % | $ | 75,202 | 3.49 | % |
As of June 30, 2013 | ||||||||||||||||
Real Estate | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Commercial | Total | ||||||||||||
Pass | $ | 887,396 | $ | 91,897 | $ | 1,373,521 | $ | 2,352,814 | ||||||||
Special Mention | 28,523 | 65 | 31,091 | 59,679 | ||||||||||||
Substandard | 24,501 | 5,284 | 72,614 | 102,399 | ||||||||||||
Doubtful | 0 | 0 | 0 | 0 | ||||||||||||
Total | $ | 940,420 | $ | 97,246 | $ | 1,477,226 | $ | 2,514,892 |
(Dollars in thousands) | Real Estate Residential | Installment | Home Equity | Other | Total | |||||||||||||||
Performing | $ | 333,647 | $ | 50,532 | $ | 367,392 | $ | 102,737 | $ | 854,308 | ||||||||||
Nonperforming | 9,369 | 249 | 2,814 | 496 | 12,928 | |||||||||||||||
Total | $ | 343,016 | $ | 50,781 | $ | 370,206 | $ | 103,233 | $ | 867,236 |
As of December 31, 2012 | ||||||||||||||||
Real Estate | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Commercial | Total | ||||||||||||
Pass | $ | 803,351 | $ | 64,866 | $ | 1,307,370 | $ | 2,175,587 | ||||||||
Special Mention | 29,663 | 65 | 38,516 | 68,244 | ||||||||||||
Substandard | 28,019 | 8,586 | 71,122 | 107,727 | ||||||||||||
Doubtful | 0 | 0 | 0 | 0 | ||||||||||||
Total | $ | 861,033 | $ | 73,517 | $ | 1,417,008 | $ | 2,351,558 |
(Dollars in thousands) | Real Estate Residential | Installment | Home Equity | Other | Total | |||||||||||||||
Performing | $ | 310,341 | $ | 56,358 | $ | 364,248 | $ | 84,490 | $ | 815,437 | ||||||||||
Nonperforming | 7,869 | 452 | 3,252 | 496 | 12,069 | |||||||||||||||
Total | $ | 318,210 | $ | 56,810 | $ | 367,500 | $ | 84,986 | $ | 827,506 |
As of June 30, 2013 | ||||||||||||||||||||||||||||
(Dollars in thousands) | 30 – 59 days past due | 60 – 89 days past due | > 90 days past due | Total past due | Current | Total | > 90 days past due and accruing | |||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||
Commercial | $ | 723 | $ | 3 | $ | 10,551 | $ | 11,277 | $ | 929,143 | $ | 940,420 | $ | 0 | ||||||||||||||
Real estate - construction | 0 | 0 | 1,104 | 1,104 | 96,142 | 97,246 | 0 | |||||||||||||||||||||
Real estate - commercial | 7,397 | 2,504 | 28,314 | 38,215 | 1,439,011 | 1,477,226 | 0 | |||||||||||||||||||||
Real estate - residential | 4,618 | 0 | 6,460 | 11,078 | 331,938 | 343,016 | 0 | |||||||||||||||||||||
Installment | 414 | 131 | 197 | 742 | 50,039 | 50,781 | 0 | |||||||||||||||||||||
Home equity | 1,247 | 524 | 1,520 | 3,291 | 366,915 | 370,206 | 0 | |||||||||||||||||||||
Other | 261 | 160 | 654 | 1,075 | 102,158 | 103,233 | 158 | |||||||||||||||||||||
Total | $ | 14,660 | $ | 3,322 | $ | 48,800 | $ | 66,782 | $ | 3,315,346 | $ | 3,382,128 | $ | 158 |
As of December 31, 2012 | ||||||||||||||||||||||||||||
(Dollars in thousands) | 30 - 59 days past due | 60 - 89 days past due | > 90 days past due | Total past due | Current | Total | > 90 days past due and accruing | |||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||
Commercial | $ | 1,770 | $ | 832 | $ | 4,197 | $ | 6,799 | $ | 854,234 | $ | 861,033 | $ | 0 | ||||||||||||||
Real estate - construction | 0 | 0 | 892 | 892 | 72,625 | 73,517 | 0 | |||||||||||||||||||||
Real estate - commercial | 2,549 | 1,931 | 27,966 | 32,446 | 1,384,562 | 1,417,008 | 0 | |||||||||||||||||||||
Real estate - residential | 6,071 | 1,463 | 6,113 | 13,647 | 304,563 | 318,210 | 0 | |||||||||||||||||||||
Installment | 280 | 148 | 344 | 772 | 56,038 | 56,810 | 0 | |||||||||||||||||||||
Home equity | 1,311 | 869 | 1,440 | 3,620 | 363,880 | 367,500 | 0 | |||||||||||||||||||||
Other | 386 | 168 | 708 | 1,262 | 83,724 | 84,986 | 212 | |||||||||||||||||||||
Total | $ | 12,367 | $ | 5,411 | $ | 41,660 | $ | 59,438 | $ | 3,119,626 | $ | 3,179,064 | $ | 212 |
Three months ended | |||||||||||||||||||||
June 30, 2013 | June 30, 2012 | ||||||||||||||||||||
(Dollars in thousands) | Number of loans | Pre-modification loan balance | Period end balance | Number of loans | Pre-modification loan balance | Period end balance | |||||||||||||||
Commercial | 4 | $ | 171 | $ | 171 | 2 | $ | 66 | $ | 66 | |||||||||||
Real estate - construction | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Real estate - commercial | 3 | 659 | 657 | 8 | 909 | 901 | |||||||||||||||
Real estate - residential | 9 | 596 | 594 | 2 | 164 | 166 | |||||||||||||||
Installment | 3 | 17 | 16 | 0 | 0 | 0 | |||||||||||||||
Home equity | 6 | 82 | 81 | 0 | 0 | 0 | |||||||||||||||
Total | 25 | $ | 1,525 | $ | 1,519 | 12 | $ | 1,139 | $ | 1,133 |
Six months ended | |||||||||||||||||||||
June 30, 2013 | June 30, 2012 | ||||||||||||||||||||
(Dollars in thousands) | Number of loans | Pre-modification loan balance | Period end balance | Number of loans | Pre-modification loan balance | Period end balance | |||||||||||||||
Commercial | 10 | $ | 7,738 | $ | 7,047 | 10 | $ | 4,571 | $ | 4,562 | |||||||||||
Real estate - construction | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Real estate - commercial | 7 | 2,251 | 2,242 | 14 | 4,749 | 4,718 | |||||||||||||||
Real estate - residential | 30 | 1,969 | 1,850 | 2 | 164 | 166 | |||||||||||||||
Installment | 11 | 154 | 97 | 0 | 0 | 0 | |||||||||||||||
Home equity | 30 | 883 | 763 | 0 | 0 | 0 | |||||||||||||||
Total | 88 | $ | 12,995 | $ | 11,999 | 26 | $ | 9,484 | $ | 9,446 |
Three months ended | Six months ended | ||||||||||||||
June 30, (2) | June 30, (2) | ||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Extended maturities | $ | 268 | $ | 406 | $ | 8,068 | $ | 7,260 | |||||||
Adjusted interest rates | 0 | 166 | 562 | 166 | |||||||||||
Combination of rate and maturity changes | 135 | 468 | 236 | 563 | |||||||||||
Forbearance | 0 | 93 | 0 | 1,236 | |||||||||||
Other (1) | 1,116 | 0 | 3,133 | 221 | |||||||||||
Total | $ | 1,519 | $ | 1,133 | $ | 11,999 | $ | 9,446 |
June 30, | ||||||||||||
2013 | 2012 | |||||||||||
(Dollars in thousands) | Number of Loans | Period End Balance | Number of Loans | Period End Balance | ||||||||
Commercial | 3 | $ | 6,238 | 1 | $ | 984 | ||||||
Real estate - construction | 0 | 0 | 0 | 0 | ||||||||
Real estate - commercial | 1 | 72 | 0 | 0 | ||||||||
Real estate - residential | 3 | 185 | 0 | 0 | ||||||||
Installment | 3 | 14 | 0 | 0 | ||||||||
Home equity | 3 | 17 | 0 | 0 | ||||||||
Total | 13 | $ | 6,526 | 1 | $ | 984 |
(Dollars in thousands) | June 30, 2013 | December 31, 2012 | ||||||
Impaired loans | ||||||||
Nonaccrual loans | ||||||||
Commercial | $ | 2,904 | $ | 10,562 | ||||
Real estate-construction | 808 | 950 | ||||||
Real estate-commercial | 30,977 | 31,002 | ||||||
Real estate-residential | 5,149 | 5,045 | ||||||
Installment | 153 | 376 | ||||||
Home equity | 1,576 | 2,499 | ||||||
Other | 496 | 496 | ||||||
Nonaccrual loans | 42,063 | 50,930 | ||||||
Troubled debt restructurings | ||||||||
Accruing | 12,924 | 10,856 | ||||||
Nonaccrual | 19,948 | 14,111 | ||||||
Total troubled debt restructurings | 32,872 | 24,967 | ||||||
Total impaired loans | $ | 74,935 | $ | 75,897 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Interest income effect on impaired loans | |||||||||||||||
Gross amount of interest that would have been recorded under original terms | $ | 1,135 | $ | 1,259 | $ | 2,257 | $ | 2,589 | |||||||
Interest included in income | |||||||||||||||
Nonaccrual loans | 70 | 140 | 142 | 349 | |||||||||||
Troubled debt restructurings | 158 | 148 | 401 | 231 | |||||||||||
Total interest included in income | 228 | 288 | 543 | 580 | |||||||||||
Net impact on interest income | $ | 907 | $ | 971 | $ | 1,714 | $ | 2,009 | |||||||
Commitments outstanding to borrowers with nonaccrual loans | $ | 2,351 | $ | 288 |
As of June 30, 2013 | ||||||||||||||||||||||||
(Dollars in thousands) | Current Balance | Contractual Principal Balance | Related Allowance | Average Current Balance | YTD Interest Income Recognized | Quarterly Interest Income Recognized | ||||||||||||||||||
Loans with no related allowance recorded | ||||||||||||||||||||||||
Commercial | $ | 13,909 | $ | 16,034 | $ | 0 | $ | 13,976 | $ | 124 | $ | 51 | ||||||||||||
Real estate - construction | 750 | 1,052 | 0 | 557 | 0 | 0 | ||||||||||||||||||
Real estate - commercial | 20,473 | 27,322 | 0 | 17,958 | 209 | 97 | ||||||||||||||||||
Real estate - residential | 10,818 | 12,650 | 0 | 9,931 | 72 | 37 | ||||||||||||||||||
Installment | 319 | 357 | 0 | 394 | 3 | 1 | ||||||||||||||||||
Home equity | 2,920 | 3,687 | 0 | 3,138 | 21 | 10 | ||||||||||||||||||
Other | 0 | 0 | 0 | 217 | 0 | 0 | ||||||||||||||||||
Loans with an allowance recorded | ||||||||||||||||||||||||
Commercial | 2,194 | 2,716 | 1,076 | 4,030 | 50 | 5 | ||||||||||||||||||
Real estate - construction | 354 | 624 | 35 | 1,210 | 7 | 0 | ||||||||||||||||||
Real estate - commercial | 20,565 | 23,614 | 6,158 | 22,243 | 39 | 18 | ||||||||||||||||||
Real estate - residential | 2,037 | 2,092 | 348 | 1,980 | 18 | 9 | ||||||||||||||||||
Installment | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Home equity | 100 | 100 | 2 | 101 | 0 | 0 | ||||||||||||||||||
Other | 496 | 496 | 378 | 279 | 0 | 0 | ||||||||||||||||||
Total | ||||||||||||||||||||||||
Commercial | 16,103 | 18,750 | 1,076 | 18,006 | 174 | 56 | ||||||||||||||||||
Real estate - construction | 1,104 | 1,676 | 35 | 1,767 | 7 | 0 | ||||||||||||||||||
Real estate - commercial | 41,038 | 50,936 | 6,158 | 40,201 | 248 | 115 | ||||||||||||||||||
Real estate - residential | 12,855 | 14,742 | 348 | 11,911 | 90 | 46 | ||||||||||||||||||
Installment | 319 | 357 | 0 | 394 | 3 | 1 | ||||||||||||||||||
Home equity | 3,020 | 3,787 | 2 | 3,239 | 21 | 10 | ||||||||||||||||||
Other | 496 | 496 | 378 | 496 | 0 | 0 | ||||||||||||||||||
Total | $ | 74,935 | $ | 90,744 | $ | 7,997 | $ | 76,014 | $ | 543 | $ | 228 |
As of December 31, 2012 | ||||||||||||||||||||
(Dollars in thousands) | Current Balance | Contractual Principal Balance | Related Allowance | Average Current Balance | Interest Income Recognized | |||||||||||||||
Loans with no related allowance recorded | ||||||||||||||||||||
Commercial | $ | 14,961 | $ | 17,269 | $ | 0 | $ | 9,337 | $ | 215 | ||||||||||
Real estate - construction | 462 | 672 | 0 | 3,857 | 15 | |||||||||||||||
Real estate - commercial | 15,782 | 21,578 | 0 | 15,554 | 277 | |||||||||||||||
Real estate - residential | 9,222 | 10,817 | 0 | 8,463 | 81 | |||||||||||||||
Installment | 452 | 556 | 0 | 452 | 2 | |||||||||||||||
Home equity | 3,251 | 4,132 | 0 | 2,423 | 19 | |||||||||||||||
Other | 326 | 326 | 0 | 65 | 0 | |||||||||||||||
Loans with an allowance recorded | ||||||||||||||||||||
Commercial | 3,560 | 4,252 | 1,151 | 5,350 | 161 | |||||||||||||||
Real estate - construction | 1,640 | 2,168 | 838 | 5,033 | 81 | |||||||||||||||
Real estate - commercial | 24,014 | 25,684 | 7,155 | 25,499 | 235 | |||||||||||||||
Real estate - residential | 1,956 | 2,003 | 290 | 2,278 | 38 | |||||||||||||||
Installment | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Home equity | 101 | 101 | 2 | 81 | 1 | |||||||||||||||
Other | 170 | 170 | 92 | 34 | 0 | |||||||||||||||
Total | ||||||||||||||||||||
Commercial | 18,521 | 21,521 | 1,151 | 14,687 | 376 | |||||||||||||||
Real estate - construction | 2,102 | 2,840 | 838 | 8,890 | 96 | |||||||||||||||
Real estate - commercial | 39,796 | 47,262 | 7,155 | 41,053 | 512 | |||||||||||||||
Real estate - residential | 11,178 | 12,820 | 290 | 10,741 | 119 | |||||||||||||||
Installment | 452 | 556 | 0 | 452 | 2 | |||||||||||||||
Home equity | 3,352 | 4,233 | 2 | 2,504 | 20 | |||||||||||||||
Other | 496 | 496 | 92 | 99 | 0 | |||||||||||||||
Total | $ | 75,897 | $ | 89,728 | $ | 9,528 | $ | 78,426 | $ | 1,125 |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Balance at beginning of period | $ | 11,993 | $ | 15,036 | $ | 12,526 | $ | 11,317 | ||||||||
Additions | ||||||||||||||||
Commercial | 1,759 | 808 | 2,316 | 5,349 | ||||||||||||
Residential | 233 | 992 | 380 | 1,914 | ||||||||||||
Total additions | 1,992 | 1,800 | 2,696 | 7,263 | ||||||||||||
Disposals | ||||||||||||||||
Commercial | 1,641 | 550 | 1,882 | 1,012 | ||||||||||||
Residential | 357 | 313 | 651 | 612 | ||||||||||||
Total disposals | 1,998 | 863 | 2,533 | 1,624 | ||||||||||||
Write-downs | ||||||||||||||||
Commercial | 156 | 182 | 561 | 1,140 | ||||||||||||
Residential | 33 | 103 | 330 | 128 | ||||||||||||
Total write-downs | 189 | 285 | 891 | 1,268 | ||||||||||||
Balance at end of period | $ | 11,798 | $ | 15,688 | $ | 11,798 | $ | 15,688 |
June 30, 2013 | December 31, 2012 | |||||||||||||||||||||||
(Dollars in thousands) | Loans accounted for under FASB ASC Topic 310-30 | Loans excluded from FASB ASC Topic 310-30 | Total purchased loans | Loans accounted for under FASB ASC Topic 310-30 | Loans excluded from FASB ASC Topic 310-30 | Total purchased loans | ||||||||||||||||||
Commercial | $ | 67,718 | $ | 1,844 | $ | 69,562 | $ | 94,775 | $ | 7,351 | $ | 102,126 | ||||||||||||
Real estate - construction | 9,647 | 0 | 9,647 | 10,631 | 0 | 10,631 | ||||||||||||||||||
Real estate - commercial | 382,547 | 6,735 | 389,282 | 458,066 | 7,489 | 465,555 | ||||||||||||||||||
Real estate - residential | 90,707 | 0 | 90,707 | 100,694 | 0 | 100,694 | ||||||||||||||||||
Installment | 6,409 | 648 | 7,057 | 7,911 | 763 | 8,674 | ||||||||||||||||||
Home equity | 1,372 | 51,842 | 53,214 | 2,080 | 55,378 | 57,458 | ||||||||||||||||||
Other covered loans | 0 | 2,796 | 2,796 | 0 | 2,978 | 2,978 | ||||||||||||||||||
Total covered loans | $ | 558,400 | $ | 63,865 | $ | 622,265 | $ | 674,157 | $ | 73,959 | $ | 748,116 |
Three Months Ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Balance at beginning of period | $ | 208,670 | $ | 313,669 | $ | 224,694 | $ | 344,410 | ||||||||
Reclassification (to)/from nonaccretable difference | (8,459 | ) | 9,058 | (708 | ) | 23,442 | ||||||||||
Accretion | (15,252 | ) | (24,025 | ) | (33,199 | ) | (49,944 | ) | ||||||||
Other net activity (1) | (11,039 | ) | (15,406 | ) | (16,867 | ) | (34,612 | ) | ||||||||
Balance at end of period | $ | 173,920 | $ | 283,296 | $ | 173,920 | $ | 283,296 |
As of June 30, 2013 | ||||||||||||||||
Real Estate | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Commercial | Total | ||||||||||||
Pass | $ | 33,317 | $ | 1,714 | $ | 200,641 | $ | 235,672 | ||||||||
Special Mention | 9,716 | 0 | 45,491 | 55,207 | ||||||||||||
Substandard | 25,679 | 7,933 | 143,150 | 176,762 | ||||||||||||
Doubtful | 850 | 0 | 0 | 850 | ||||||||||||
Total | $ | 69,562 | $ | 9,647 | $ | 389,282 | $ | 468,491 |
(Dollars in thousands) | Real estate residential | Installment | Home equity | Other | Total | |||||||||||||||
Performing | $ | 90,707 | $ | 7,054 | $ | 50,640 | $ | 2,787 | $ | 151,188 | ||||||||||
Nonperforming | 0 | 3 | 2,574 | 9 | 2,586 | |||||||||||||||
Total | $ | 90,707 | $ | 7,057 | $ | 53,214 | $ | 2,796 | $ | 153,774 |
As of December 31, 2012 | ||||||||||||||||
Real Estate | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Commercial | Total | ||||||||||||
Pass | $ | 48,213 | $ | 2,304 | $ | 213,143 | $ | 263,660 | ||||||||
Special Mention | 16,293 | 7 | 70,894 | 87,194 | ||||||||||||
Substandard | 35,596 | 8,320 | 181,345 | 225,261 | ||||||||||||
Doubtful | 2,024 | 0 | 173 | 2,197 | ||||||||||||
Total | $ | 102,126 | $ | 10,631 | $ | 465,555 | $ | 578,312 |
(Dollars in thousands) | Real estate residential | Installment | Home equity | Other | Total | |||||||||||||||
Performing | $ | 100,694 | $ | 8,674 | $ | 53,231 | $ | 2,967 | $ | 165,566 | ||||||||||
Nonperforming | 0 | 0 | 4,227 | 11 | 4,238 | |||||||||||||||
Total | $ | 100,694 | $ | 8,674 | $ | 57,458 | $ | 2,978 | $ | 169,804 |
As of June 30, 2013 | |||||||||||||||||||||||||||
(Dollars in thousands) | 30 - 59 days past due | 60 - 89 days past due | > 90 days past due | Total past due | Current | Total | > 90 days past due and accruing | ||||||||||||||||||||
Loans | |||||||||||||||||||||||||||
Commercial | $ | 136 | $ | 0 | $ | 469 | $ | 605 | $ | 1,239 | $ | 1,844 | $ | 0 | |||||||||||||
Real estate - commercial | 506 | 0 | 1,331 | 1,837 | 4,898 | 6,735 | 0 | ||||||||||||||||||||
Installment | 0 | 0 | 6 | 6 | 642 | 648 | 0 | ||||||||||||||||||||
Home equity | 826 | 0 | 2,062 | 2,888 | 48,954 | 51,842 | 0 | ||||||||||||||||||||
All other | 61 | 0 | 33 | 94 | 2,702 | 2,796 | 24 | ||||||||||||||||||||
Total | $ | 1,529 | $ | 0 | $ | 3,901 | $ | 5,430 | $ | 58,435 | $ | 63,865 | $ | 24 |
As of December 31, 2012 | |||||||||||||||||||||||||||
(Dollars in thousands) | 30 - 59 days past due | 60 - 89 days past due | > 90 days past due | Total past due | Current | Total | > 90 days past due and accruing | ||||||||||||||||||||
Loans | |||||||||||||||||||||||||||
Commercial | $ | 351 | $ | 148 | $ | 3,781 | $ | 4,280 | $ | 3,071 | $ | 7,351 | $ | 0 | |||||||||||||
Real estate - commercial | 138 | 1,149 | 2,201 | 3,488 | 4,001 | 7,489 | 0 | ||||||||||||||||||||
Installment | 0 | 0 | 0 | 0 | 763 | 763 | 0 | ||||||||||||||||||||
Home equity | 286 | 296 | 3,697 | 4,279 | 51,099 | 55,378 | 0 | ||||||||||||||||||||
All other | 19 | 26 | 42 | 87 | 2,891 | 2,978 | 31 | ||||||||||||||||||||
Total | $ | 794 | $ | 1,619 | $ | 9,721 | $ | 12,134 | $ | 61,825 | $ | 73,959 | $ | 31 |
(Dollars in thousands) | June 30, 2013 | December 31, 2012 | ||||||
Impaired loans | ||||||||
Nonaccrual loans | ||||||||
Commercial | $ | 449 | $ | 4,498 | ||||
Real estate-commercial | 1,413 | 2,986 | ||||||
Installment | 3 | 0 | ||||||
Home equity | 2,574 | 4,227 | ||||||
All other | 9 | 11 | ||||||
Nonaccrual loans | 4,448 | 11,722 | ||||||
Troubled debt restructurings | ||||||||
Accruing | 365 | 0 | ||||||
Nonaccrual | 323 | 0 | ||||||
Total troubled debt restructurings | 688 | 0 | ||||||
Total impaired loans | $ | 5,136 | $ | 11,722 |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest income effect on impaired loans | ||||||||||||||||
Gross amount of interest that would have been recorded under original terms | $ | 115 | $ | 150 | $ | 253 | $ | 358 | ||||||||
Interest included in income | ||||||||||||||||
Nonaccrual loans | 6 | 13 | 13 | 61 | ||||||||||||
Troubled debt restructurings | 4 | 0 | 4 | 0 | ||||||||||||
Total interest included in income | 10 | 13 | 17 | 61 | ||||||||||||
Net impact on interest income | $ | 105 | $ | 137 | $ | 236 | $ | 297 |
As of June 30, 2013 | ||||||||||||||||||||||||
(Dollars in thousands) | Current Balance | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | YTD Interest Income Recognized | Quarterly Interest Income Recognized | ||||||||||||||||||
Loans with no related allowance recorded | ||||||||||||||||||||||||
Commercial | $ | 449 | $ | 2,468 | $ | 0 | $ | 2,348 | $ | 5 | $ | 2 | ||||||||||||
Real estate - commercial | 1,413 | 2,827 | 0 | 1,894 | 2 | 1 | ||||||||||||||||||
Installment | 3 | 3 | 0 | 1 | 0 | 0 | ||||||||||||||||||
Home equity | 2,574 | 3,784 | 0 | 2,972 | 6 | 3 | ||||||||||||||||||
All other | 9 | 9 | 0 | 11 | 0 | 0 | ||||||||||||||||||
Total | $ | 4,448 | $ | 9,091 | $ | 0 | $ | 7,226 | $ | 13 | $ | 6 |
As of December 31, 2012 | ||||||||||||||||||||
(Dollars in thousands) | Current Balance | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||
Loans with no related allowance recorded | ||||||||||||||||||||
Commercial | $ | 4,498 | $ | 4,660 | $ | 0 | $ | 4,526 | $ | 62 | ||||||||||
Real estate - commercial | 2,986 | 3,216 | 0 | 2,153 | 18 | |||||||||||||||
Home equity | 4,227 | 5,260 | 0 | 2,006 | 5 | |||||||||||||||
All other | 11 | 11 | 0 | 13 | 0 | |||||||||||||||
Total | $ | 11,722 | $ | 13,147 | $ | 0 | $ | 8,698 | $ | 85 |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Balance at beginning of period | $ | 29,345 | $ | 41,489 | $ | 28,862 | $ | 44,818 | ||||||||
Additions | ||||||||||||||||
Commercial | 6,029 | 2,349 | 12,491 | 5,099 | ||||||||||||
Residential | 161 | 62 | 377 | 2,686 | ||||||||||||
Total additions | 6,190 | 2,411 | 12,868 | 7,785 | ||||||||||||
Disposals | ||||||||||||||||
Commercial | 12,027 | 13,554 | 16,648 | 18,559 | ||||||||||||
Residential | 470 | 1,811 | 814 | 2,354 | ||||||||||||
Total disposals | 12,497 | 15,365 | 17,462 | 20,913 | ||||||||||||
Write-downs | ||||||||||||||||
Commercial | 557 | 2,332 | 1,682 | 5,416 | ||||||||||||
Residential | 6 | 795 | 111 | 866 | ||||||||||||
Total write-downs | 563 | 3,127 | 1,793 | 6,282 | ||||||||||||
Balance at end of period | $ | 22,475 | $ | 25,408 | $ | 22,475 | $ | 25,408 |
Three Months Ended | Six months ended | |||||||||||||||||||||||||||
2013 | 2012 | June 30, | ||||||||||||||||||||||||||
(Dollars in thousands) | June 30, | Mar. 31, | Dec. 31, | Sep. 30, | June 30, | 2013 | 2012 | |||||||||||||||||||||
Balance at beginning of period | $ | 48,306 | $ | 47,777 | $ | 49,192 | $ | 50,952 | $ | 49,437 | $ | 47,777 | $ | 52,576 | ||||||||||||||
Provision for loan and lease losses | 2,409 | 3,041 | 3,882 | 3,613 | 8,364 | 5,450 | 11,622 | |||||||||||||||||||||
Loans charged off | (4,194 | ) | (3,210 | ) | (5,548 | ) | (5,804 | ) | (7,138 | ) | (7,404 | ) | (13,960 | ) | ||||||||||||||
Recoveries | 526 | 698 | 251 | 431 | 289 | 1,224 | 714 | |||||||||||||||||||||
Balance at end of period | $ | 47,047 | $ | 48,306 | $ | 47,777 | $ | 49,192 | $ | 50,952 | $ | 47,047 | $ | 50,952 | ||||||||||||||
Allowance for loan and lease losses to total ending loans | 1.39 | % | 1.49 | % | 1.50 | % | 1.60 | % | 1.69 | % | 1.39 | % | 1.69 | % |
Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Commercial | Residential | Installment | Home Equity | Other | Total | ||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 7,926 | $ | 3,268 | $ | 24,151 | $ | 3,599 | $ | 522 | $ | 5,173 | $ | 3,138 | $ | 47,777 | ||||||||||||||||
Provision for loan and lease losses | 2,144 | (1,655 | ) | 2,934 | 613 | (136 | ) | 1,013 | 537 | 5,450 | ||||||||||||||||||||||
Gross charge-offs | 1,640 | 0 | 3,039 | 549 | 197 | 1,292 | 687 | 7,404 | ||||||||||||||||||||||||
Recoveries | 386 | 136 | 96 | 9 | 187 | 277 | 133 | 1,224 | ||||||||||||||||||||||||
Total net charge-offs | 1,254 | (136 | ) | 2,943 | 540 | 10 | 1,015 | 554 | 6,180 | |||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | 8,816 | $ | 1,749 | $ | 24,142 | $ | 3,672 | $ | 376 | $ | 5,171 | $ | 3,121 | $ | 47,047 | ||||||||||||||||
Ending allowance on loans individually evaluated for impairment | $ | 1,076 | $ | 35 | $ | 6,158 | $ | 348 | $ | 0 | $ | 2 | $ | 378 | $ | 7,997 | ||||||||||||||||
Ending allowance on loans collectively evaluated for impairment | 7,740 | 1,714 | 17,984 | 3,324 | 376 | 5,169 | 2,743 | 39,050 | ||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | 8,816 | $ | 1,749 | $ | 24,142 | $ | 3,672 | $ | 376 | $ | 5,171 | $ | 3,121 | $ | 47,047 | ||||||||||||||||
Loans - excluding covered loans | ||||||||||||||||||||||||||||||||
Ending balance of loans individually evaluated for impairment | $ | 14,450 | $ | 1,104 | $ | 35,082 | $ | 3,652 | $ | 0 | $ | 517 | $ | 496 | $ | 55,301 | ||||||||||||||||
Ending balance of loans collectively evaluated for impairment | 925,970 | 96,142 | 1,442,144 | 339,364 | 50,781 | 369,689 | 102,737 | 3,326,827 | ||||||||||||||||||||||||
Total loans - excluding covered loans | $ | 940,420 | $ | 97,246 | $ | 1,477,226 | $ | 343,016 | $ | 50,781 | $ | 370,206 | $ | 103,233 | $ | 3,382,128 |
Twelve Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Commercial | Residential | Installment | Home Equity | Other | Total | ||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 10,289 | $ | 4,424 | $ | 18,228 | $ | 4,994 | $ | 1,659 | $ | 10,751 | $ | 2,231 | $ | 52,576 | ||||||||||||||||
Provision for loan and lease losses | 1,556 | 1,528 | 16,670 | 346 | (883 | ) | (2,032 | ) | 1,932 | 19,117 | ||||||||||||||||||||||
Gross charge-offs | 4,312 | 2,684 | 11,012 | 1,814 | 577 | 3,661 | 1,252 | 25,312 | ||||||||||||||||||||||||
Recoveries | 393 | 0 | 265 | 73 | 323 | 115 | 227 | 1,396 | ||||||||||||||||||||||||
Total net charge-offs | 3,919 | 2,684 | 10,747 | 1,741 | 254 | 3,546 | 1,025 | 23,916 | ||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | 7,926 | $ | 3,268 | $ | 24,151 | $ | 3,599 | $ | 522 | $ | 5,173 | $ | 3,138 | $ | 47,777 | ||||||||||||||||
Ending allowance on loans individually evaluated for impairment | $ | 1,151 | $ | 838 | $ | 7,155 | $ | 290 | $ | 0 | $ | 2 | $ | 92 | $ | 9,528 | ||||||||||||||||
Ending allowance on loans collectively evaluated for impairment | 6,775 | 2,430 | 16,996 | 3,309 | 522 | 5,171 | 3,046 | 38,249 | ||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | 7,926 | $ | 3,268 | $ | 24,151 | $ | 3,599 | $ | 522 | $ | 5,173 | $ | 3,138 | $ | 47,777 | ||||||||||||||||
Loans - excluding covered loans | ||||||||||||||||||||||||||||||||
Ending balance of loans individually evaluated for impairment | $ | 16,661 | $ | 2,076 | $ | 35,422 | $ | 2,604 | $ | 0 | $ | 101 | $ | 496 | $ | 57,360 | ||||||||||||||||
Ending balance of loans collectively evaluated for impairment | 844,372 | 71,441 | 1,381,586 | 315,606 | 56,810 | 367,399 | 84,490 | 3,121,704 | ||||||||||||||||||||||||
Total loans - excluding covered loans | $ | 861,033 | $ | 73,517 | $ | 1,417,008 | $ | 318,210 | $ | 56,810 | $ | 367,500 | $ | 84,986 | $ | 3,179,064 |
June 30, 2013 | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||
(Dollars in thousands) | Commercial | Commercial | Residential | Installment | Total | |||||||||||||||
Ending allowance on loans acquired with deteriorated credit quality (ASC 310-30) | $ | 14,259 | $ | 16,195 | $ | 2,263 | $ | 244 | $ | 32,961 | ||||||||||
Ending allowance on acquired loans outside the scope of ASC 310-30 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Ending allowance on covered loans | $ | 14,259 | $ | 16,195 | $ | 2,263 | $ | 244 | $ | 32,961 |
December 31, 2012 | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||
(Dollars in thousands) | Commercial | Commercial | Residential | Installment | Total | |||||||||||||||
Ending allowance on loans acquired with deteriorated credit quality (ASC 310-30) | $ | 19,136 | $ | 22,918 | $ | 2,599 | $ | 537 | $ | 45,190 | ||||||||||
Ending allowance on acquired loans outside the scope of ASC 310-30 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Ending allowance on covered loans | $ | 19,136 | $ | 22,918 | $ | 2,599 | $ | 537 | $ | 45,190 |
Three Months Ended | Six months ended | |||||||||||||||||||||||||||
2013 | 2012 | June 30, | ||||||||||||||||||||||||||
(Dollars in thousands) | June 30, | Mar. 31, | Dec. 31, | Sep. 30, | June 30, | 2013 | 2012 | |||||||||||||||||||||
Balance at beginning of period | $ | 45,496 | $ | 45,190 | $ | 48,895 | $ | 48,327 | $ | 46,156 | $ | 45,190 | $ | 42,835 | ||||||||||||||
Provision for loan and lease losses | (8,283 | ) | 9,042 | 5,283 | 6,622 | 6,047 | 759 | 18,998 | ||||||||||||||||||||
Loans charged-off | (4,681 | ) | (9,684 | ) | (9,568 | ) | (9,058 | ) | (5,163 | ) | (14,365 | ) | (15,281 | ) | ||||||||||||||
Recoveries | 429 | 948 | 580 | 3,004 | 1,287 | 1,377 | 1,775 | |||||||||||||||||||||
Balance at end of period | $ | 32,961 | $ | 45,496 | $ | 45,190 | $ | 48,895 | $ | 48,327 | $ | 32,961 | $ | 48,327 |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Service cost | $ | 898 | $ | 833 | $ | 1,873 | $ | 1,665 | ||||||||
Interest cost | 567 | 690 | 1,186 | 1,380 | ||||||||||||
Expected return on assets | (2,230 | ) | (2,235 | ) | (4,524 | ) | (4,470 | ) | ||||||||
Amortization of prior service cost | (107 | ) | (105 | ) | (212 | ) | (210 | ) | ||||||||
Net actuarial loss | 726 | 675 | 1,546 | 1,350 | ||||||||||||
Settlement charge | 4,316 | 0 | 4,316 | 0 | ||||||||||||
Net periodic benefit cost (income) | $ | 4,170 | $ | (142 | ) | $ | 4,185 | $ | (285 | ) |
Carrying | Estimated Fair Value | ||||||||||||||
(Dollars in thousands) | value | Total | Level 1 | Level 2 | Level 3 | ||||||||||
June 30, 2013 | |||||||||||||||
Financial assets | |||||||||||||||
Cash and short-term investments | $ | 117,416 | $ | 117,416 | $ | 117,416 | $ | 0 | $ | 0 | |||||
Investment securities held-to-maturity | 670,246 | 664,398 | 0 | 664,398 | 0 | ||||||||||
Other investments | 75,645 | 75,645 | 0 | 75,645 | 0 | ||||||||||
Loans held for sale | 18,650 | 18,650 | 0 | 18,650 | 0 | ||||||||||
Loans - excluding covered loans | 3,335,081 | 3,341,766 | 0 | 0 | 3,341,766 | ||||||||||
Covered loans | 589,304 | 597,231 | 0 | 0 | 597,231 | ||||||||||
FDIC indemnification asset | 88,966 | 79,518 | 0 | 0 | 79,518 | ||||||||||
Financial liabilities | |||||||||||||||
Deposits | |||||||||||||||
Noninterest-bearing | $ | 1,059,368 | $ | 1,059,368 | $ | 0 | $ | 1,059,368 | $ | 0 | |||||
Interest-bearing demand | 1,131,466 | 1,131,466 | 0 | 1,131,466 | 0 | ||||||||||
Savings | 1,601,122 | 1,601,122 | 0 | 1,601,122 | 0 | ||||||||||
Time | 978,680 | 976,084 | 0 | 976,084 | 0 | ||||||||||
Total deposits | 4,770,636 | 4,768,040 | 0 | 4,768,040 | 0 | ||||||||||
Short-term borrowings | 619,930 | 619,930 | 619,930 | 0 | 0 | ||||||||||
Long-term debt | 73,957 | 76,491 | 0 | 76,491 | 0 |
Carrying | Estimated Fair Value | ||||||||||||||
(Dollars in thousands) | value | Total | Level 1 | Level 2 | Level 3 | ||||||||||
December 31, 2012 | |||||||||||||||
Financial assets | |||||||||||||||
Cash and short-term investments | $ | 158,843 | $ | 158,843 | $ | 158,843 | $ | 0 | $ | 0 | |||||
Investment securities held-to-maturity | 770,755 | 778,474 | 0 | 778,474 | 0 | ||||||||||
Other investments | 71,492 | 71,492 | 0 | 71,492 | 0 | ||||||||||
Loans held for sale | 16,256 | 16,256 | 0 | 16,256 | 0 | ||||||||||
Loans - excluding covered loans | 3,131,287 | 3,145,120 | 0 | 0 | 3,145,120 | ||||||||||
Covered loans | 702,926 | 713,797 | 0 | 0 | 713,797 | ||||||||||
FDIC indemnification asset | 119,607 | 106,380 | 0 | 0 | 106,380 | ||||||||||
Financial liabilities | |||||||||||||||
Deposits | |||||||||||||||
Noninterest-bearing | $ | 1,102,774 | $ | 1,102,774 | $ | 0 | $ | 1,102,774 | $ | 0 | |||||
Interest-bearing demand | 1,160,815 | 1,160,815 | 0 | 1,160,815 | 0 | ||||||||||
Savings | 1,623,614 | 1,623,614 | 0 | 1,623,614 | 0 | ||||||||||
Time | 1,068,637 | 1,072,201 | 0 | 1,072,201 | 0 | ||||||||||
Total deposits | 4,955,840 | 4,959,404 | 0 | 4,959,404 | 0 | ||||||||||
Short-term borrowings | 624,570 | 624,570 | 624,570 | 0 | 0 | ||||||||||
Long-term debt | 75,202 | 78,941 | 0 | 78,941 | 0 |
Fair Value Measurements Using | ||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Netting Adjustments (1) | Assets/Liabilities at Fair Value | |||||||||||||||
June 30, 2013 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Derivatives | $ | 0 | $ | 15,497 | $ | 0 | $ | (15,497 | ) | $ | 0 | |||||||||
Available-for-sale investment securities | 189 | 884,505 | 0 | 0 | 884,694 | |||||||||||||||
Total | $ | 189 | $ | 900,002 | $ | 0 | $ | (15,497 | ) | $ | 884,694 | |||||||||
Liabilities | ||||||||||||||||||||
Derivatives | $ | 0 | $ | 16,669 | $ | 0 | $ | (15,497 | ) | $ | 1,172 |
Fair Value Measurements Using | ||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Netting Adjustments (1) | Assets/Liabilities at Fair Value | |||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Derivatives | $ | 0 | $ | 24,135 | $ | 0 | $ | (24,135 | ) | $ | 0 | |||||||||
Available-for-sale investment securities | 144 | 1,031,952 | 0 | 0 | 1,032,096 | |||||||||||||||
Total | $ | 144 | $ | 1,056,087 | $ | 0 | $ | (24,135 | ) | $ | 1,032,096 | |||||||||
Liabilities | ||||||||||||||||||||
Derivatives | $ | 0 | $ | 26,652 | $ | 0 | $ | (24,135 | ) | $ | 2,517 |
Fair Value Measurements Using | ||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | |||||||||
June 30, 2013 | ||||||||||||
Assets | ||||||||||||
Impaired loans (1) | $ | 0 | $ | 0 | $ | 14,600 | ||||||
OREO | 0 | 0 | 6,396 | |||||||||
Covered OREO | 0 | 0 | 8,706 |
Fair Value Measurements Using | ||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | |||||||||
December 31, 2012 | ||||||||||||
Assets | ||||||||||||
Impaired loans (1) | $ | 0 | $ | 0 | $ | 19,564 | ||||||
OREO | 0 | 0 | 5,651 | |||||||||
Covered OREO | 0 | 0 | 14,059 |
June 30, 2013 | |||||||||||||||||||||||||||||||
Total other comprehensive income | Total accumulated other comprehensive income | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Prior to Reclassification | Reclassification from | Pre-tax | Tax-effect | Net of tax | Beginning Balance | Net Activity | Ending Balance | |||||||||||||||||||||||
Unrealized gain (loss) on investment securities | $ | (28,256 | ) | $ | 1,724 | $ | (29,980 | ) | $ | 11,413 | $ | (18,567 | ) | $ | 12,802 | $ | (18,567 | ) | $ | (5,765 | ) | ||||||||||
Unrealized gain (loss) on derivatives | 1,177 | (134 | ) | 1,311 | (495 | ) | 816 | (143 | ) | 816 | 673 | ||||||||||||||||||||
Retirement obligation | 11,719 | (5,650 | ) | 17,369 | (6,559 | ) | 10,810 | (31,338 | ) | 10,810 | (20,528 | ) | |||||||||||||||||||
Foreign currency translation | (27 | ) | 0 | (27 | ) | 0 | (27 | ) | 2 | (27 | ) | (25 | ) | ||||||||||||||||||
Total | $ | (15,387 | ) | $ | (4,060 | ) | $ | (11,327 | ) | $ | 4,359 | $ | (6,968 | ) | $ | (18,677 | ) | $ | (6,968 | ) | $ | (25,645 | ) |
June 30, 2012 | ||||||||||||||||||||||||
Total other comprehensive income | Total accumulated other comprehensive income | |||||||||||||||||||||||
(Dollars in thousands) | Pre-tax | Tax-effect | Net of tax | Beginning Balance | Net Activity | Ending Balance | ||||||||||||||||||
Unrealized gain (loss) on investment securities | $ | 4,171 | $ | (1,575 | ) | $ | 2,596 | $ | 12,669 | $ | 2,596 | $ | 15,265 | |||||||||||
Retirement obligation | 1,140 | (430 | ) | 710 | (34,136 | ) | 710 | (33,426 | ) | |||||||||||||||
Foreign currency translation | 12 | 0 | 12 | (23 | ) | 12 | (11 | ) | ||||||||||||||||
Total | $ | 5,323 | $ | (2,005 | ) | $ | 3,318 | $ | (21,490 | ) | $ | 3,318 | $ | (18,172 | ) |
June 30, 2013 | ||||||
(Dollars in thousands) | Amount Reclassified from Accumulated Other Comprehensive Income (1) | Affected Line Item in the Consolidated Statements of Income | ||||
Gains and loss on cash flow hedges | ||||||
Interest rate contracts | $ | (134 | ) | Interest expense - deposits | ||
Realized gains and losses on securities available-for-sale | 1,724 | Gains on sales of investments securities | ||||
Defined benefit pension plan | ||||||
Amortization of prior service cost | 212 | (2) | ||||
Recognized net actuarial loss | (1,546 | ) | (2) | |||
Pension settlement charges | (4,316 | ) | Pension settlement charges | |||
Amortization and settlement charges of defined benefit pension items | (5,650 | ) | ||||
Total reclassifications for the period, before tax | $ | (4,060 | ) |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Numerator | ||||||||||||||||
Net income available to common shareholders | $ | 15,829 | $ | 17,802 | $ | 29,653 | $ | 34,796 | ||||||||
Denominator | ||||||||||||||||
Basic earnings per common share - weighted average shares | 57,291,994 | 57,933,281 | 57,365,105 | 57,864,269 | ||||||||||||
Effect of dilutive securities — | ||||||||||||||||
Employee stock awards | 735,440 | 915,301 | 739,927 | 936,550 | ||||||||||||
Warrants | 100,915 | 109,697 | 101,471 | 120,870 | ||||||||||||
Diluted earnings per common share - adjusted weighted average shares | 58,128,349 | 58,958,279 | 58,206,503 | 58,921,689 | ||||||||||||
Earnings per share available to common shareholders | ||||||||||||||||
Basic | $ | 0.28 | $ | 0.31 | $ | 0.52 | $ | 0.60 | ||||||||
Diluted | $ | 0.27 | $ | 0.30 | $ | 0.51 | $ | 0.59 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Net interest income | $ | 58,078 | $ | 64,830 | $ | 116,744 | $ | 131,519 | |||||||
Tax equivalent adjustment | 514 | 216 | 991 | 434 | |||||||||||
Net interest income - tax equivalent | $ | 58,592 | $ | 65,046 | $ | 117,735 | $ | 131,953 | |||||||
Average earning assets | $ | 5,791,715 | $ | 5,813,267 | $ | 5,839,497 | $ | 5,881,709 | |||||||
Net interest margin (1) | 4.02 | % | 4.49 | % | 4.03 | % | 4.50 | % | |||||||
Net interest margin (fully tax equivalent) (1) | 4.06 | % | 4.50 | % | 4.07 | % | 4.51 | % |
Quarterly Averages | Year-to Date Averages | ||||||||||||||||||||||||||||||||||
June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Yield | Balance | Yield | Balance | Yield | Balance | Yield | Balance | Yield | |||||||||||||||||||||||||
Earning assets | |||||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||||
Investment securities | $ | 1,705,219 | 2.08 | % | $ | 1,838,783 | 1.98 | % | $ | 1,713,503 | 2.46 | % | $ | 1,771,632 | 2.03 | % | $ | 1,689,073 | 2.53 | % | |||||||||||||||
Interest-bearing deposits with other banks | 13,890 | 0.32 | % | 3,056 | 0.53 | % | 4,454 | 0.18 | % | 8,503 | 0.36 | % | 65,392 | 0.28 | % | ||||||||||||||||||||
Gross loans (1) | 4,072,606 | 5.26 | % | 4,045,971 | 5.47 | % | 4,095,310 | 6.02 | % | 4,059,362 | 5.37 | % | 4,127,244 | 6.15 | % | ||||||||||||||||||||
Total earning assets | 5,791,715 | 4.32 | % | 5,887,810 | 4.37 | % | 5,813,267 | 4.96 | % | 5,839,497 | 4.35 | % | 5,881,709 | 5.04 | % | ||||||||||||||||||||
Nonearning assets | |||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | (92,033 | ) | (95,512 | ) | (98,317 | ) | (93,763 | ) | (99,491 | ) | |||||||||||||||||||||||||
Cash and due from banks | 119,909 | 111,599 | 121,114 | 115,777 | 122,374 | ||||||||||||||||||||||||||||||
Accrued interest and other assets | 491,011 | 487,152 | 498,909 | 489,093 | 502,360 | ||||||||||||||||||||||||||||||
Total assets | $ | 6,310,602 | $ | 6,391,049 | $ | 6,334,973 | $ | 6,350,604 | $ | 6,406,952 | |||||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Interest-bearing demand | $ | 1,141,767 | 0.09 | % | $ | 1,112,664 | 0.12 | % | $ | 1,192,868 | 0.11 | % | $ | 1,127,296 | 0.10 | % | $ | 1,239,032 | 0.12 | % | |||||||||||||||
Savings | 1,639,834 | 0.10 | % | 1,618,239 | 0.10 | % | 1,610,411 | 0.12 | % | 1,629,096 | 0.10 | % | 1,646,459 | 0.13 | % | ||||||||||||||||||||
Time | 1,011,290 | 1.04 | % | 1,054,499 | 1.20 | % | 1,406,800 | 1.60 | % | 1,032,775 | 1.12 | % | 1,492,124 | 1.66 | % | ||||||||||||||||||||
Total interest-bearing deposits | 3,792,891 | 0.35 | % | 3,785,402 | 0.41 | % | 4,210,079 | 0.61 | % | 3,789,167 | 0.38 | % | 4,377,615 | 0.65 | % | ||||||||||||||||||||
Borrowed fund: | |||||||||||||||||||||||||||||||||||
Short-term borrowings | 569,929 | 0.21 | % | 660,587 | 0.20 | % | 159,681 | 0.09 | % | 615,008 | 0.21 | % | 122,786 | 0.08 | % | ||||||||||||||||||||
Long-term debt | 74,129 | 3.54 | % | 74,740 | 3.55 | % | 75,314 | 3.59 | % | 74,433 | 3.54 | % | 75,667 | 3.61 | % | ||||||||||||||||||||
Total borrowed funds | 644,058 | 0.60 | % | 735,327 | 0.54 | % | 234,995 | 1.22 | % | 689,441 | 0.57 | % | 198,453 | 1.43 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 4,436,949 | 0.38 | % | 4,520,729 | 0.43 | % | 4,445,074 | 0.64 | % | 4,478,608 | 0.41 | % | 4,576,068 | 0.68 | % | ||||||||||||||||||||
Noninterest-bearing liabilities | |||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 1,063,102 | 1,049,943 | 1,044,405 | 1,056,559 | 987,876 | ||||||||||||||||||||||||||||||
Other liabilities | 106,747 | 111,515 | 128,383 | 109,118 | 131,179 | ||||||||||||||||||||||||||||||
Shareholders' equity | 703,804 | 708,862 | 717,111 | 706,319 | 711,829 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 6,310,602 | $ | 6,391,049 | $ | 6,334,973 | $ | 6,350,604 | $ | 6,406,952 | |||||||||||||||||||||||||
Net interest income | $ | 58,078 | $ | 58,666 | $ | 64,830 | $ | 116,744 | $ | 131,519 | |||||||||||||||||||||||||
Net interest spread | 3.94 | % | 3.94 | % | 4.32 | % | 3.94 | % | 4.36 | % | |||||||||||||||||||||||||
Contribution of noninterest-bearing sources of funds | 0.08 | % | 0.10 | % | 0.17 | % | 0.09 | % | 0.14 | % | |||||||||||||||||||||||||
Net interest margin (2) | 4.02 | % | 4.04 | % | 4.49 | % | 4.03 | % | 4.50 | % |
(1) | Loans held for sale, nonaccrual loans, covered loans, and indemnification asset are included in gross loans. |
(2) | Because noninterest-bearing funding sources, demand deposits, other liabilities and shareholders' equity also support earning assets, the net interest margin exceeds the interest spread. |
Changes for the Three Months Ended June 30, 2013 | ||||||||||||||||||||||||
Linked Qtr. Income Variance | Comparable Qtr. Income Variance | |||||||||||||||||||||||
(Dollars in thousands) | Rate | Volume | Total | Rate | Volume | Total | ||||||||||||||||||
Earning assets | ||||||||||||||||||||||||
Investment securities | $ | 488 | $ | (589 | ) | $ | (101 | ) | $ | (1,602 | ) | $ | (43 | ) | $ | (1,645 | ) | |||||||
Other earning assets | (2 | ) | 9 | 7 | 2 | 7 | 9 | |||||||||||||||||
Gross loans (1) | (2,027 | ) | 933 | (1,094 | ) | (7,668 | ) | (298 | ) | (7,966 | ) | |||||||||||||
Total earning assets | (1,541 | ) | 353 | (1,188 | ) | (9,268 | ) | (334 | ) | (9,602 | ) | |||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||
Total interest-bearing deposits | $ | (619 | ) | $ | 43 | $ | (576 | ) | $ | (2,736 | ) | $ | (361 | ) | $ | (3,097 | ) | |||||||
Borrowed funds | ||||||||||||||||||||||||
Short-term borrowings | 21 | (45 | ) | (24 | ) | 48 | 220 | 268 | ||||||||||||||||
Federal Home Loan Bank long-term debt | (2 | ) | 2 | 0 | (11 | ) | (10 | ) | (21 | ) | ||||||||||||||
Total borrowed funds | 19 | (43 | ) | (24 | ) | 37 | 210 | 247 | ||||||||||||||||
Total interest-bearing liabilities | (600 | ) | 0 | (600 | ) | (2,699 | ) | (151 | ) | (2,850 | ) | |||||||||||||
Net interest income | $ | (941 | ) | $ | 353 | $ | (588 | ) | $ | (6,569 | ) | $ | (183 | ) | $ | (6,752 | ) |
Changes for the Six Months Ended June 30, 2013 | ||||||||||||
Year-to-Date Income Variance | ||||||||||||
(Dollars in thousands) | Rate | Volume | Total | |||||||||
Earning assets | ||||||||||||
Investment securities | $ | (4,170 | ) | $ | 830 | $ | (3,340 | ) | ||||
Other earning assets | 24 | (100 | ) | (76 | ) | |||||||
Gross loans (1) | (15,968 | ) | (1,806 | ) | (17,774 | ) | ||||||
Total earning assets | (20,114 | ) | (1,076 | ) | (21,190 | ) | ||||||
Interest-bearing liabilities | ||||||||||||
Total interest-bearing deposits | $ | (5,844 | ) | $ | (1,109 | ) | $ | (6,953 | ) | |||
Borrowed funds | ||||||||||||
Short-term borrowings | 78 | 507 | 585 | |||||||||
Federal Home Loan Bank long-term debt | (25 | ) | (22 | ) | (47 | ) | ||||||
Total borrowed funds | 53 | 485 | 538 | |||||||||
Total interest-bearing liabilities | (5,791 | ) | (624 | ) | (6,415 | ) | ||||||
Net interest income | $ | (14,323 | ) | $ | (452 | ) | $ | (14,775 | ) |
Three months ended | Six months ended | ||||||||||||||||||||||||||
2013 | 2012 | June 30, | |||||||||||||||||||||||||
(Dollars in thousands) | June 30, | Mar. 31, | Dec. 31, | Sep. 30, | June 30, | 2013 | 2012 | ||||||||||||||||||||
Allowance for loan and lease loss activity | |||||||||||||||||||||||||||
Balance at beginning of period | $ | 48,306 | $ | 47,777 | $ | 49,192 | $ | 50,952 | $ | 49,437 | $ | 47,777 | $ | 52,576 | |||||||||||||
Provision for loan losses | 2,409 | 3,041 | 3,882 | 3,613 | 8,364 | 5,450 | 11,622 | ||||||||||||||||||||
Gross charge-offs | |||||||||||||||||||||||||||
Commercial | 859 | 781 | 657 | 1,340 | 1,129 | 1,640 | 2,315 | ||||||||||||||||||||
Real estate-construction | 0 | 0 | 0 | 180 | 717 | 0 | 2,504 | ||||||||||||||||||||
Real estate-commercial | 2,044 | 995 | 2,221 | 2,736 | 3,811 | 3,039 | 6,055 | ||||||||||||||||||||
Real estate-residential | 326 | 223 | 454 | 565 | 191 | 549 | 795 | ||||||||||||||||||||
Installment | 97 | 100 | 267 | 134 | 116 | 197 | 176 | ||||||||||||||||||||
Home equity | 591 | 701 | 1,722 | 380 | 915 | 1,292 | 1,559 | ||||||||||||||||||||
All other | 277 | 410 | 227 | 469 | 259 | 687 | 556 | ||||||||||||||||||||
Total gross charge-offs | 4,194 | 3,210 | 5,548 | 5,804 | 7,138 | 7,404 | 13,960 | ||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||
Commercial | 67 | 319 | 71 | 202 | 48 | 386 | 120 | ||||||||||||||||||||
Real estate-construction | 0 | 136 | 0 | 0 | 0 | 136 | 0 | ||||||||||||||||||||
Real estate-commercial | 57 | 39 | 46 | 38 | 68 | 96 | 181 | ||||||||||||||||||||
Real estate-residential | 5 | 4 | 3 | 33 | 9 | 9 | 37 | ||||||||||||||||||||
Installment | 110 | 77 | 53 | 72 | 75 | 187 | 198 | ||||||||||||||||||||
Home equity | 225 | 52 | 32 | 31 | 28 | 277 | 52 | ||||||||||||||||||||
All other | 62 | 71 | 46 | 55 | 61 | 133 | 126 | ||||||||||||||||||||
Total recoveries | 526 | 698 | 251 | 431 | 289 | 1,224 | 714 | ||||||||||||||||||||
Total net charge-offs | 3,668 | 2,512 | 5,297 | 5,373 | 6,849 | 6,180 | 13,246 | ||||||||||||||||||||
Ending allowance for loan and lease losses | $ | 47,047 | $ | 48,306 | $ | 47,777 | $ | 49,192 | $ | 50,952 | $ | 47,047 | $ | 50,952 | |||||||||||||
Net charge-offs to average loans and leases (annualized) | |||||||||||||||||||||||||||
Commercial | 0.35 | % | 0.22 | % | 0.28 | % | 0.56 | % | 0.53 | % | 0.29 | % | 0.53 | % | |||||||||||||
Real estate-construction | 0.00 | % | (0.68 | )% | 0.00 | % | 0.78 | % | 2.91 | % | (0.31 | )% | 4.75 | % | |||||||||||||
Real estate-commercial | 0.55 | % | 0.27 | % | 0.63 | % | 0.81 | % | 1.18 | % | 0.42 | % | 0.94 | % | |||||||||||||
Real estate-residential | 0.38 | % | 0.27 | % | 0.58 | % | 0.72 | % | 0.25 | % | 0.33 | % | 0.53 | % | |||||||||||||
Installment | (0.10 | )% | 0.17 | % | 1.46 | % | 0.41 | % | 0.26 | % | 0.04 | % | (0.07 | )% | |||||||||||||
Home equity | 0.40 | % | 0.72 | % | 1.82 | % | 0.38 | % | 0.99 | % | 0.56 | % | 0.84 | % | |||||||||||||
All other | 0.90 | % | 1.63 | % | 0.94 | % | 2.51 | % | 1.46 | % | 1.24 | % | 1.66 | % | |||||||||||||
Total net charge-offs | 0.45 | % | 0.32 | % | 0.68 | % | 0.71 | % | 0.93 | % | 0.38 | % | 0.90 | % |
Three months ended | Six months ended | |||||||||||||||||||||||||||
2013 | 2012 | June 30, | ||||||||||||||||||||||||||
(Dollars in thousands) | June 30, | Mar. 31, | Dec. 31, | Sep. 30, | June 30, | 2013 | 2012 | |||||||||||||||||||||
Balance at beginning of period | $ | 45,496 | $ | 45,190 | $ | 48,895 | $ | 48,327 | $ | 46,156 | $ | 45,190 | $ | 42,835 | ||||||||||||||
Provision for loan and lease losses | (8,283 | ) | 9,042 | 5,283 | 6,622 | 6,047 | 759 | 18,998 | ||||||||||||||||||||
Loans charged-off | (4,681 | ) | (9,684 | ) | (9,568 | ) | (9,058 | ) | (5,163 | ) | (14,365 | ) | (15,281 | ) | ||||||||||||||
Recoveries | 429 | 948 | 580 | 3,004 | 1,287 | 1,377 | 1,775 | |||||||||||||||||||||
Ending allowance for covered loan losses | $ | 32,961 | $ | 45,496 | $ | 45,190 | $ | 48,895 | $ | 48,327 | $ | 32,961 | $ | 48,327 |
Quarter ended | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(Dollars in thousands) | June 30, | Mar. 31, | Dec. 31, | Sep. 30, | June 30, | |||||||||||||||
Nonperforming loans, nonperforming assets, and underperforming assets | ||||||||||||||||||||
Nonaccrual loans | ||||||||||||||||||||
Commercial | $ | 2,904 | $ | 4,044 | $ | 10,562 | $ | 4,563 | $ | 12,065 | ||||||||||
Real estate - construction | 808 | 945 | 950 | 2,536 | 7,243 | |||||||||||||||
Real estate - commercial | 30,977 | 30,311 | 31,002 | 33,961 | 36,116 | |||||||||||||||
Real estate - residential | 5,149 | 4,371 | 5,045 | 5,563 | 5,069 | |||||||||||||||
Installment | 153 | 211 | 376 | 284 | 319 | |||||||||||||||
Home equity | 1,576 | 1,750 | 2,499 | 2,497 | 2,281 | |||||||||||||||
Lease financing | 496 | 496 | 496 | 0 | 0 | |||||||||||||||
Nonaccrual loans | 42,063 | 42,128 | 50,930 | 49,404 | 63,093 | |||||||||||||||
Troubled debt restructurings (TDRs) | ||||||||||||||||||||
Accruing | 12,924 | 12,757 | 10,856 | 11,604 | 9,909 | |||||||||||||||
Nonaccrual | 19,948 | 22,324 | 14,111 | 13,017 | 10,185 | |||||||||||||||
Total TDRs | 32,872 | 35,081 | 24,967 | 24,621 | 20,094 | |||||||||||||||
Total nonperforming loans | 74,935 | 77,209 | 75,897 | 74,025 | 83,187 | |||||||||||||||
Other real estate owned (OREO) | 11,798 | 11,993 | 12,526 | 13,912 | 15,688 | |||||||||||||||
Total nonperforming assets | 86,733 | 89,202 | 88,423 | 87,937 | 98,875 | |||||||||||||||
Accruing loans past due 90 days or more | 158 | 157 | 212 | 108 | 143 | |||||||||||||||
Total underperforming assets | $ | 86,891 | $ | 89,359 | $ | 88,635 | $ | 88,045 | $ | 99,018 | ||||||||||
Total classified assets | $ | 129,832 | $ | 130,436 | $ | 129,040 | $ | 133,382 | $ | 145,621 | ||||||||||
Credit quality ratios (excluding covered assets) | ||||||||||||||||||||
Allowance for loan and lease losses to | ||||||||||||||||||||
Nonaccrual loans | 111.85 | % | 114.66 | % | 93.81 | % | 99.57 | % | 80.76 | % | ||||||||||
Nonaccrual loans plus nonaccrual TDRs | 75.87 | % | 74.95 | % | 73.46 | % | 78.81 | % | 69.53 | % | ||||||||||
Nonperforming loans | 62.78 | % | 62.57 | % | 62.95 | % | 66.45 | % | 61.25 | % | ||||||||||
Total ending loans | 1.39 | % | 1.49 | % | 1.50 | % | 1.60 | % | 1.69 | % | ||||||||||
Nonperforming loans to total loans | 2.22 | % | 2.38 | % | 2.39 | % | 2.41 | % | 2.76 | % | ||||||||||
Nonperforming assets to | ||||||||||||||||||||
Ending loans, plus OREO | 2.56 | % | 2.74 | % | 2.77 | % | 2.86 | % | 3.27 | % | ||||||||||
Total assets, including covered assets | 1.38 | % | 1.40 | % | 1.36 | % | 1.41 | % | 1.57 | % | ||||||||||
Nonperforming assets, excluding accruing TDRs to | ||||||||||||||||||||
Ending loans, plus OREO | 2.17 | % | 2.34 | % | 2.43 | % | 2.48 | % | 2.94 | % | ||||||||||
Total assets, including covered assets | 1.18 | % | 1.20 | % | 1.19 | % | 1.22 | % | 1.42 | % |
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
June 30, 2013 | |||||||||||||||||||||
Total capital to risk-weighted assets | |||||||||||||||||||||
Consolidated | $ | 682,927 | 16.68 | % | $ | 327,492 | 8.00 | % | N/A | N/A | |||||||||||
First Financial Bank | 593,627 | 14.54 | % | 326,646 | 8.00 | % | $ | 408,308 | 10.00 | % | |||||||||||
Tier 1 capital to risk-weighted assets | |||||||||||||||||||||
Consolidated | 630,819 | 15.41 | % | 163,746 | 4.00 | % | N/A | N/A | |||||||||||||
First Financial Bank | 534,722 | 13.10 | % | 163,323 | 4.00 | % | 244,985 | 6.00 | % | ||||||||||||
Tier 1 capital to average assets | |||||||||||||||||||||
Consolidated | 630,819 | 10.12 | % | 249,267 | 4.00 | % | N/A | N/A | |||||||||||||
First Financial Bank | 534,722 | 8.59 | % | 248,898 | 4.00 | % | 311,123 | 5.00 | % |
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
December 31, 2012 | |||||||||||||||||||||
Total capital to risk-weighted assets | |||||||||||||||||||||
Consolidated | $ | 686,961 | 17.60 | % | $ | 312,328 | 8.00 | % | N/A | N/A | |||||||||||
First Financial Bank | 586,023 | 15.04 | % | 311,618 | 8.00 | % | $ | 389,523 | 10.00 | % | |||||||||||
Tier 1 capital to risk-weighted assets | |||||||||||||||||||||
Consolidated | 637,176 | 16.32 | % | 156,164 | 4.00 | % | N/A | N/A | |||||||||||||
First Financial Bank | 529,196 | 13.59 | % | 155,809 | 4.00 | % | 233,714 | 6.00 | % | ||||||||||||
Tier 1 capital to average assets | |||||||||||||||||||||
Consolidated | 637,176 | 10.25 | % | 248,761 | 4.00 | % | N/A | N/A | |||||||||||||
First Financial Bank | 529,196 | 8.52 | % | 248,408 | 4.00 | % | 310,511 | 5.00 | % |
▪ | management's ability to effectively execute its business plan; |
▪ | the risk that the strength of the United States economy in general and the strength of the local economies in which we conduct operations may continue to deteriorate resulting in, among other things, a further deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio, allowance for loan and lease losses and overall financial performance; |
▪ | U.S. fiscal debt and budget matters; |
▪ | the ability of financial institutions to access sources of liquidity at a reasonable cost; |
▪ | the impact of recent upheaval in the financial markets and the effectiveness of domestic and international governmental actions taken in response, and the effect of such governmental actions on us, our competitors and counterparties, financial markets generally and availability of credit specifically, and the U.S. and international economies, including potentially higher FDIC premiums arising from increased payments from FDIC insurance funds as a result of depository institution failures; |
▪ | the effect of and changes in policies and laws or regulatory agencies (notably the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act); |
▪ | the effect of the current low interest rate environment or changes in interest rates on our net interest margin and our loan originations and securities holdings; |
▪ | our ability to keep up with technological changes; |
▪ | failure or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers; |
▪ | our ability to comply with the terms of loss sharing agreements with the FDIC; |
▪ | mergers and acquisitions, including costs or difficulties related to the integration of acquired companies and the wind-down of non-strategic operations that may be greater than expected, such as the risks and uncertainties associated with the Irwin Mortgage Corporation bankruptcy proceedings and other acquired subsidiaries; |
▪ | the risk that exploring merger and acquisition opportunities may detract from management's time and ability to successfully manage our Company; |
▪ | expected cost savings in connection with the consolidation of recent acquisitions may not be fully realized or realized within the expected time frames, and deposit attrition, customer loss and revenue loss following completed acquisitions may be greater than expected; |
▪ | our ability to increase market share and control expenses; |
▪ | the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and the SEC; |
▪ | adverse changes in the creditworthiness of our borrowers and lessees, collateral values, the value of investment securities and asset recovery values, including the value of the FDIC indemnification asset and related assets covered by FDIC loss sharing agreements; |
▪ | adverse changes in the securities, debt and/or derivatives markets; |
▪ | our success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services; |
▪ | monetary and fiscal policies of the Board of Governors of the Federal Reserve System (Federal Reserve) and the U.S. government and other governmental initiatives affecting the financial services industry; |
▪ | unpredictable natural or other disasters could have an adverse effect on us in that such events could materially disrupt our operations or our vendors' operations or willingness of our customers to access the financial services we offer; |
▪ | our ability to manage loan delinquency and charge-off rates and changes in estimation of the adequacy of the allowance for loan losses; and |
▪ | the costs and effects of litigation and of unexpected or adverse outcomes in such litigation. |
% Change from Base Case for Immediate Parallel Changes in Rates | ||||||||
-100 BP (1) | +100 BP | +200 BP | ||||||
NII-Year 1 | (5.79 | )% | (0.30 | )% | 1.39 | % | ||
NII-Year 2 | (6.17 | )% | 1.21 | % | 4.12 | % | ||
EVE | (10.63 | )% | 0.75 | % | 5.87 | % |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(c) | The following table shows the total number of shares repurchased in the second quarter of 2013. |
(a) | (b) | (c) | (d) | ||||||||||
Period | Total Number Of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (2) | Maximum Number of Shares that may yet be purchased Under the Plans | |||||||||
April 1 to April 30, 2013 | |||||||||||||
Share repurchase program | 87,400 | $ | 15.65 | 87,400 | 4,203,100 | ||||||||
Director Fee Stock Plan | 3,129 | 15.74 | NA | NA | |||||||||
Stock Plans | 125 | 15.37 | NA | NA | |||||||||
May 1 to May 31, 2013 | |||||||||||||
Share repurchase program | 127,500 | $ | 15.54 | 127,500 | 4,075,600 | ||||||||
Director Fee Stock Plan | 0 | 0.00 | 0 | NA | |||||||||
Stock Plans | 3,576 | 15.67 | NA | NA | |||||||||
June 1 to June 30, 2013 | |||||||||||||
Share repurchase program | 76,500 | $ | 15.15 | 76,500 | 3,999,100 | ||||||||
Director Fee Stock Plan | 0 | 0.00 | 0 | NA | |||||||||
Stock Plans | 2,050 | 15.01 | 0 | NA | |||||||||
Total | |||||||||||||
Share repurchase program | 291,400 | $ | 15.47 | 291,400 | |||||||||
Director Fee Stock Plan | 3,129 | $ | 15.74 | NA | |||||||||
Stock Plans | 5,751 | $ | 15.43 | NA |
(1) | Except with respect to the share repurchase program, the number of shares purchased in column (a) and the average price paid per share in column (b) include the purchase of shares other than through publicly announced plans. The shares purchased other than through publicly announced plans were purchased pursuant to First Financial’s Director Fee Stock Plan, 1999 Stock Option Plan for Non-Employee Directors, 1999 Stock Incentive Plan for Officers and Employees, 2009 Employee Stock Plan, Amended and Restated 2009 Non-Employee Director Stock Plan and 2012 Stock Plan (the last five plans are referred to hereafter as the Stock Plans.) The table shows the number of shares purchased pursuant to those plans and the average price paid per share. The purchases for the Director Fee Stock Plan were made in open-market transactions. Under the Stock Plans, shares were purchased from plan participants at the then current market value in satisfaction of stock option exercise prices. |
(2) | First Financial has one previously announced stock repurchase plan under which it is authorized to purchase shares of its common stock. The plan has no expiration date. The table that follows provides additional information regarding this plan. |
Announcement Date | Total Shares Approved for Repurchase | Total Shares Repurchased Under the Plan | Expiration Date | |||||
10/25/2012 | 5,000,000 | 1,000,900 | None |
(a) | Exhibits: | |
Exhibit Number | ||
10.1 | Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. 2012 Stock Plan (3-year vesting/accrual of dividends).(1) | |
10.2 | Agreement for Performance-Based Restricted Stock Awards under the First Financial Bancorp. 2012 Stock Plan between Bancorp and Claude E. Davis.(1) | |
31.1 | Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith. | |
31.2 | Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith. | |
32.1 | Certification of Periodic Financial Report by Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 furnished herewith. | |
32.2 | Certification of Periodic Financial Report by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 furnished herewith. | |
101.1 | Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders' Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, as blocks of text and in detail.(2) |
(2) | As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections. |
FIRST FINANCIAL BANCORP. | ||||||
(Registrant) | ||||||
/s/ Anthony M. Stollings | /s/ John M. Gavigan | |||||
Anthony M. Stollings | John M. Gavigan | |||||
Executive Vice President and Chief Financial Officer | First Vice President and Corporate Controller | |||||
(Principal Accounting Officer) | ||||||
Date | 8/6/2013 | Date | 8/6/2013 |
1. | Award of Restricted Stock. The Corporation hereby awards to Grantee as of the date of this Agreement shares of restricted Common Stock of the Corporation ("Common Stock"), without par value, in consideration of services to be rendered. |
2. | Restrictions on Transfer. The shares of restricted Common Stock so received by the Grantee and any additional shares attributable thereto received by the Grantee as a result of any stock dividend, recapitalization, merger, reorganization or similar event are subject to the restrictions set forth herein and may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restriction Period, except as permitted hereby. |
3. | Restriction Period. The Restriction Period as used in this Agreement shall mean the period that begins as of the date of this Agreement and ends with respect to the restricted Common Stock granted under this Agreement as of the applicable anniversary date(s) of the date of this Agreement (the "Anniversary Dates") as set forth below in the Vesting Schedule. The ending of the Restriction Period also may be referred to in this Agreement as the vesting of the restricted Common Stock or as when the Common Stock vests. |
4. | Forfeiture and Clawback Provision. Notwithstanding any other provision of this Agreement, Grantee hereby agrees that if his or her employment with the Corporation or a Subsidiary is terminated for any reason, voluntarily or involuntarily, whether by retirement, death, disability, resignation or dismissal for cause or otherwise, and such termination is prior to the ending of the Restriction Period applicable to any shares of the restricted Common Stock, the Grantee's ownership and all related rights with respect to all shares of Common Stock for which the Restriction Period has not ended as of the date that the termination of employment occurs will be forfeited automatically as of the date that such termination of employment occurs, and the Corporation automatically will become the sole owner of such shares as of such date. |
5. | Holding Period - Named Executive Officers. In the event Grantee is a “named executive officer” as defined in Item 402 of Regulation S-K at the time of issuance or vesting of this award, Grantee will be required to hold fifty percent (50%) of any vested shares of Common Stock (net of any shares withheld to pay taxes) for a period of two years after the Restriction Period, whether or not Grantee remains employed by the Corporation or its Subsidiaries. Notwithstanding anything herein, the restriction shall terminate on Grantee's death, disability or retirement. Such restrictions are acknowledged by Grantee (if a named officer) by signing this Agreement and may be enforced further pursuant to a restrictive legend or any other means deemed appropriate by the Corporation. |
6. | Issuance of Stock Awards. |
(a) | Upon award of the restricted Common Stock to the Grantee shares of restricted Common Stock shall be evidenced by a book entry registration by the Corporation for the benefit of the Grantee. Each such registration will be held by the Corporation or its agent. Any restricted Common Stock of the Corporation resulting from any stock dividend, recapitalization, merger, reorganization or similar event will also be held by the Corporation or its agent. All such Common Stock evidenced thereby will be subject to the forfeiture provisions, limitations on transferability and all other restrictions herein contained. |
(b) | Subject to Section 6(c) below, with regard to any shares of restricted Common Stock which cease to be subject to restrictions pursuant to Section 3, the Corporation will, within sixty (60) days of the date such shares cease to be subject to restrictions, transfer Common Stock for such shares free of all restrictions set forth in the Plan and this Agreement to the Grantee or the Grantee's designee, or in the event of such Grantee's death subsequent to expiration of the Restriction Period, to the Grantee's legal representative, heir or legatee. |
(c) | By accepting shares of restricted Common Stock, the Grantee agrees not to sell shares at a time when applicable laws or the Corporation's rules prohibit a sale. This restriction shall apply as long as the Grantee is an employee, consultant or director of the Corporation or a Subsidiary. Upon receipt of nonforfeitable shares subject to this Agreement, the Grantee agrees, if requested by the Corporation, to hold such shares for investment and not with a view of resale or distribution to the public, and if requested by the Corporation, the Grantee must deliver to the Corporation a written statement satisfactory to the Corporation to that effect. The Committee may refuse to deliver (via certificate or such other method as the Committee determines) any shares to Grantee for which Grantee refused to provide an appropriate statement. |
7. | Shareholder's Rights. Subject to the terms of this Agreement, during the Restriction Period: |
(a) | The Grantee will have, with respect to the restricted Common Stock, the right to vote all shares of the restricted Common Stock received under or as a result of this Agreement, including shares which are |
(b) | The Grantee shall not be paid any dividends with respect to the restricted Common Stock until each Restricted Period ends. At the time of vesting, the Grantee shall receive a cash payment equal to the aggregate dividends (without interest) that the Grantee would have received if the Grantee had owned all the shares in which the Grantee had vested for the period beginning on the date of grant of those shares, and ending on the date of vesting. By way of example, when the Restricted Period ends for Group B awards, Grantee will be entitled to two years of accumulated dividends from the date of grant to the 2nd anniversary date. No dividends shall be paid to the Grantee with respect to any shares of restricted Common Stock that are forfeited by the Grantee. |
(c) | Dividends payable in Common Stock with respect to the restricted Common Stock during the Restriction Period will be held subject to the vesting of the underlying restricted Common Stock and then automatically paid in the form of Common Stock to the Grantee. |
8. | Regulatory Compliance. The issue of shares of restricted Common Stock and Common Stock will be subject to full compliance with all then-applicable requirements of law and the requirements of the exchange upon which Common Stock may be traded, as set forth in the Plan. Furthermore, the Corporation shall have the right to refuse to issue or transfer any shares under this Agreement if the Corporation, acting in its absolute discretion determines that the issuance or transfer of such Common Stock might violate any applicable law or regulation. |
9. | Withholding Tax. The Grantee agrees that, in the event that the award and receipt of the restricted Common Stock or the expiration of restrictions thereon results in the Grantee's realization of income which for federal, state or local income tax purposes is, in the opinion of counsel for the Corporation, subject to withholding of tax at source by the Grantee's employer, the Grantee will pay to such Grantee's employer an amount equal to such withholding tax or make arrangements satisfactory to the Corporation regarding the payment of such tax (or such employer on behalf of the Corporation may withhold such amount from Grantee's salary or from dividends paid by the Corporation on shares of the restricted Common Stock or any other compensation payable to the Grantee). Alternatively, if the Grantee makes a proper Code Section 83(b) election, the Grantee must notify the Corporation in accordance with the requirements of Code Section 83(b) and promptly pay the Corporation the applicable federal, state and local withholding taxes due with respect to the shares of restricted Common Stock subject to the election. |
10. | Investment Representation. The Grantee represents and agrees that if he or she is awarded and receives the restricted Common Stock at a time when there is not in effect under the Securities Act of 1933 a registration statement pertaining to the shares and there is not available for delivery a prospectus meeting the requirements of Section 10(A)(3) of said Act, (i) he or she will accept and receive such shares for the purpose of investment and not with a view to their resale or distribution, (ii) that upon such award and receipt, he or she will furnish to the Corporation an investment letter in form and substance satisfactory to the Corporation, (iii) prior to selling or offering for sale any such shares, he or she will furnish the Corporation with an opinion of counsel satisfactory to the Corporation to the effect that such sale may lawfully be made and will furnish the Corporation with such certificates as to factual matters as the Corporation may reasonably request, and (iv) that certificates representing such shares may be marked with an appropriate legend describing such conditions precedent to sale or transfer. |
11. | Federal Income Tax Election. The Grantee hereby acknowledges receipt of advice that, pursuant to current federal income tax laws, (i) he or she has thirty (30) days in which to elect to be taxed in the current taxable year on the fair market value of the restricted Common Stock in accordance with the provisions of Internal Revenue Code Section 83(b), and (ii) if no such election is made, the taxable event will occur upon expiration of restrictions on transfer at termination of the Restriction Period and the tax will be measured by the fair market value of the restricted Common Stock on the date of the taxable event. |
12. | Adjustments. If, after the date of this Agreement, the Common Stock of the Corporation is, as a result of a merger, reorganization, consolidation, recapitalization, reclassification, split-up, spin-off, separation, liquidation, stock dividend, stock split, reverse stock split, property dividend, share repurchase, share |
(a) | there automatically will be substituted for each share of restricted Common Stock for which the Restriction Period has not ended granted under the Agreement the number and kind of shares of stock or other securities into which each outstanding share is changed or for which each such share is exchanged; and |
(b) | the Corporation will make such other adjustments to the securities subject to provisions of the Plan and this Agreement as may be appropriate and equitable; provided, however, that the number of shares of restricted Common Stock will always be a whole number. |
13. | Non‑solicitation and Non-disclosure of Confidential Information. This Section 13 shall apply to all Grantee's not subject to an employment agreement with the Corporation or any Affiliated Companies. |
(a) | Non‑solicitation of Clients. During the Grantee's employment with the Corporation or any Affiliated Companies (as defined below) and for a period of one year after Grantee is no longer employed by any Affiliated Companies, Grantee shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for the Corporation or any Affiliated Companies): |
(1) | Solicit (as defined below) any person or entity located in the Restricted Territory for the provision of any Restricted Services; |
(2) | Solicit or attempt in any manner to persuade any client or customer of any Affiliated Companies to cease to do business, to refrain from doing business or to reduce the amount of business which any client or customer has customarily done or contemplates doing with any of the Affiliated Companies; or |
(3) | Interfere with or damage (or attempt to interfere with or damage) any relationship between any Affiliated Company and any client or customer. |
(b) | Non‑solicitation of Employees; No Hire. During the Grantee's employment with the Corporation or any Affiliated Companies and for a period of one year after Grantee is no longer employed by the Corporation or any Affiliated Companies, Grantee shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for any Affiliated Company): |
(1) | Solicit any employee, officer, director, agent or independent contractor of any Affiliated Company to terminate his or her relationship with, or otherwise refrain from rendering services to, any Affiliated Company, or otherwise interfere or attempt to interfere in any way with any Affiliated Company's relationship with any of its employees, officers, directors, agents or independent contractors; or |
(2) | Employ or engage any person who, at any time within the two‑year period immediately preceding such employment or engagement, was an employee, officer or director of any Affiliated Company. |
(c) | Non-disclosure of Confidential Information. |
(1) | During Grantee's employment with Corporation or any Affiliated Company and after the termination of such employment for any reason, Grantee shall not, without the prior written consent of the General Corporate Counsel of Corporation (or such person's designee) or as may be otherwise required by law or legal process, communicate or divulge any Confidential Information to any person or entity other than Corporation or an Affiliated Company, their employees, and those designated by Corporation or an Affiliated Company, or use any Confidential Information except for the benefit of Corporation or an Affiliated Company. |
(2) | Immediately upon the termination of Grantee's employment with Corporation or an Affiliated Company for any reason, Grantee shall return to Corporation or the applicable Affiliated Company all Confidential Information in Grantee's possession, including but not limited to any and all copies, reproductions, notes, or extracts of Confidential Information in paper or electronic form. |
(d) | Defined Terms. Unless otherwise defined in this Agreement, capitalized terms shall have the same meaning as that in the Plan. For purposes of this Agreement, the following terms shall have the meaning set forth below: |
(1) | “Affiliated Companies” shall mean the Corporation, all of its subsidiaries, and any other entities controlled by, controlling, or under common control with the Corporation, including any successors thereof, except that, following the consummation of a Change in Control, for purposes of §§ 13(a) and 13(b), Affiliated Companies shall be limited to the Corporation and it subsidiaries as of immediately prior to the consummation of such Change in Control. |
(2) | “Change in Control” has the meaning given such term in the Corporation's 2012 Stock Plan, as in effect on the Effective Date. |
(3) | “Confidential Information” shall mean all trade secrets, proprietary data, and other confidential information of or relating to any Affiliated Company, including without limitation financial information, information relating to business operations, services, promotional practices, and relationships with customers, suppliers, employees, independent contractors, or other parties, and any information which any Affiliated Company is obligated to treat as confidential pursuant to any course of dealing or any agreement to which it is a party or otherwise bound, provided that Confidential Information shall not include information that is or becomes available to the general public and did not become so available through any breach of this Agreement by Grantee or Grantee's breach of a duty owed to the Corporation. |
(4) | “Restricted Services” shall mean any commercial banking, savings banking, mortgage lending, or any similar lending or banking services. |
(5) | “Restricted Territory” shall mean anywhere in the geographic area consisting of the states of the United States in which any of the Affiliated Companies operate banking offices at any time during the Grantee's employment with the Corporation or any Affiliated Companies. |
(6) | “Solicit” shall mean any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, inviting, advising, persuading, encouraging or requesting any person or entity, in any manner, to take or refrain from taking any action; provided, however, that the term “Solicit” shall not include general advertisements by an entity with which Grantee is associated or other communications in any media not targeted specifically at any specific individual described in § 13(a) or 13(b). |
(e) | Enforcement; Remedies; Blue Pencil. Grantee acknowledges that: (1) the various covenants, restrictions, and obligations set forth in this § 13 are separate and independent obligations, and may be enforced separately or in any combination; (2) the provisions of this § 13 are fundamental and essential for the protection of the Corporation's and the Affiliated Companies' legitimate business and proprietary interests, and the Affiliated Companies (other than the Corporation) are intended third-party beneficiaries of such provisions; (3) such provisions are reasonable and appropriate in all respects and impose no undue hardship on Grantee; and (4) in the event of any violation by Grantee of any of such provisions, the Corporation and, if applicable, the Affiliated Companies, will suffer irreparable harm and their remedies at law may be inadequate. In the event of any violation or attempted violation of any provision of this § 13 by Grantee, the Corporation and the Affiliated Companies, or any of them, as |
14. | Employment Claims. In return for the benefits that Grantee may receive under this Agreement and for continued employment, Grantee agrees not to commence any action or suit related to Grantee's employment by Bancorp or an Affiliated Company: |
(a) | More than six months after the termination of Grantee's employment, if the action or suit is related to the termination of Grantee's employment; or |
(b) | More than six months after the event or occurrence on which Grantee's claim is based, if the action or suit is based on an event or occurrence other than the termination of Grantee's employment. |
15. | Notices. Each notice relating to this Agreement must be in writing and delivered in person or by registered mail to the Corporation at its office, 255 East Fifth Street, Suite 700, Cincinnati, Ohio 45202, attention of the Secretary, or at such other place as the Corporation has designated by notice. All notices to the Grantee or other person or persons succeeding to his or her interest will be delivered to the Grantee or such other person or persons at the Grantee's address below specified or such other address as specified in a notice filed with the Corporation. |
16. | Determinations of the Corporation Final. Any dispute or disagreement which arises under, as a result of, or in any way relates to the interpretation or construction of this Agreement will be determined by the Board of Directors of the Corporation or by a committee appointed by the Board of Directors of the Corporation (or any successor corporation). The Grantee hereby agrees to accept any such determination as final, binding and conclusive for all purposes. |
17. | Successors. All rights under this Agreement are personal to the Grantee and are not transferable except that in the event of the Grantee's death, such rights are transferable to the Grantee's legal representatives, heirs or legatees. This Agreement will inure to the benefit of and be binding upon the Corporation and its successors and assigns. |
18. | Obligations of the Corporation. The liability of the Corporation under the Plan and this Agreement is limited to the obligations set forth therein. No term or provision of the Plan or this Agreement will be construed to impose any liability on the Corporation in favor of the Grantee with respect to any loss, cost or expense which the Grantee may incur in connection with or arising out of any transaction in connection therewith. |
19. | No Employment Rights. Nothing in the Plan or this Agreement or any related material shall give the Grantee the right to continue in the employment of the Corporation or any subsidiary of the Corporation or adversely affect the right of the Corporation or any subsidiary of the Corporation to terminate the Grantee's employment with or without cause at any time. |
20. | Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of the State of Ohio. |
21. | Plan. The Plan will control if there is any conflict between the Plan and this Agreement and on any matters that are not contained in this Agreement. A copy of the Plan has been provided to the Grantee and is incorporated by reference and made a part of this Agreement. Capitalized terms used but not specifically defined in this Agreement will have the definitions given to them in the Plan. |
22. | Entire Agreement. This Agreement and the Plan supersede any other agreement, whether written or oral, that may have been made or entered into by the Corporation and/or any of its subsidiaries and the Grantee relating to the shares of restricted Common Stock that are granted under this Agreement. This Agreement and the Plan constitute the entire agreement by the parties with respect to such matters, and there are no agreements or commitments except as set forth herein and in the Plan. |
23. | Captions; Counterparts. The captions in this Agreement are for convenience only and will not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in any number of counterparts, each of which will constitute one and the same instrument. |
1. | Award of Restricted Stock. First Financial hereby issues to Participant as of the Grant Date an Award equal to 24,281 shares of restricted Stock of First Financial (“Stock”), without par value, in consideration of services to be rendered and subject to achievement of certain performance goals as set forth herein. |
2. | Restrictions on Transfer. The shares of restricted Stock so received by the Participant pursuant to this Award and any additional shares attributable thereto received by the Participant as a result of any stock dividend, recapitalization, merger, reorganization or similar event are subject to the restrictions set forth herein and may not be sold, assigned, transferred, pledged or otherwise encumbered during the Performance Period, except as permitted hereby. |
3. | Performance Period. The Performance Period as used in this Stock Agreement shall mean the three year period that begins on January 1, 2013 and ends on December 31, 2015. |
4. | Vesting Date. Unless otherwise provided in this Stock Agreement, the Vesting Date shall be March 6, 2016, provided certain metrics, as set forth in Schedule 4 are met. Notwithstanding the foregoing or anything in this Stock Agreement to the contrary, if the Committee determines that there has been a Change in Control (as determined by the Committee in accordance with the terms of the Plan) during the Performance Period and prior to the Vesting Date, the following vesting procedures shall apply to the Award: |
a. | The Performance Period shall end with respect to such unvested shares of restricted Stock, effective as of the date of such Change in Control and the Committee shall determine the extent to which (if any) Performance Level has been achieved for the Performance Period based upon audited or unaudited financial information available; |
b. | If the Committee is unable to determine which (if any) Performance Level has been achieved, the Target Performance Level will be assumed to have been achieved. In no event shall the Participant become entitled to a Vesting Percentage greater than the Vesting Percentage applicable to the Target Performance Level where the Committee has not determined the actual Performance Level achieved; and |
c. | pro-rate the portion of the Award that becomes vested based on each completed day of the Performance Period prior to the Change in Control based upon the Committee's determination of the degree of attainment of a Performance Level. The forfeiture provisions otherwise applicable to the Award shall lapse with respect to the pro-rated Award as of the date determined by the Committee, but in no event later than the Vesting Date. |
Performance Level | Relative TSR and ROA (Equally weighted) | Vesting Percentage |
< 25th Percentile | 0% | |
Threshold | 25th Percentile | 50% |
30th Percentile | 57.14% | |
40th Percentile | 71.43% | |
50th Percentile | 85.71% | |
Target | = 60th Percentile | 100% |
Maximum | > 75th Percentile | 120% |
5. | Forfeiture and Clawback Provision. Notwithstanding any other provision of this Stock Agreement, Participant hereby agrees that if his or her employment with First Financial or a Subsidiary is terminated for any reason, voluntarily or involuntarily (other than due to retirement, death, or disability), whether by resignation or dismissal for cause or otherwise, during the Performance Period, the Award shall be forfeited and all related rights with respect to all shares of Stock that are subject to the Award shall be forfeited automatically as of the date of such termination of employment, and First Financial automatically will become the sole owner of such Stock as of such date. |
a. | At the end of the Performance Period, certify in writing the extent to which the performance goals for the Performance Period have been met and the applicable Vesting Percentage of the Award based on actual achievement of such performance goals; and |
b. | Pro-rate the Award based on each completed month of service by the Participant during the portion of the Performance Period prior to the Early Termination. The forfeitures provisions in Section 4 with respect to the pro-rated Award shall lapse on the Vesting Date. |
6. | Issuance of Stock Awards. |
(a) | Upon award of the restricted Stock to the Participant, shares of restricted Stock shall be evidenced by a book entry registration by First Financial for the benefit of the Participant. Each such registration will be held by First Financial or its agent. Any restricted Stock of First Financial resulting from any stock dividend, recapitalization, merger, reorganization or similar event will also be held by First Financial or its agent. All such Stock evidenced thereby will be subject to the forfeiture provisions, limitations on transferability and all other restrictions herein contained. |
(b) | Subject to Section 6(c) and (d) below, with regard to any shares of restricted Stock which cease to be subject to restrictions pursuant to Section 2, First Financial will, within sixty (60) days of the date such shares cease to be subject to restrictions, transfer Stock for such shares free of all restrictions set forth in the Plan and this Stock Agreement to the Participant or the Participant's designee, or in the event of such Participant's death subsequent to expiration of the Performance Period, to the Participant's legal representative, heir or legatee. |
(c) | By accepting shares of restricted Stock, the Participant agrees not to sell shares at a time when applicable laws or First Financial's rules prohibit a sale. This restriction shall apply as long as the Participant is an employee, consultant or director of First Financial or a Subsidiary. Upon receipt of nonforfeitable shares subject to this Stock Agreement, the Participant agrees, if requested by First Financial, to hold such shares for investment and not with a view of resale or distribution to the public, and if requested by First Financial, the Participant must deliver to First Financial a written statement satisfactory to First Financial to that effect. The Committee may refuse to deliver (via certificate or such other method as the Committee determines) any shares to Participant for which Participant refused to provide an appropriate statement. |
(d) | The Stock subject to this Award (including Stock that becomes vested in accordance with the terms of the Award) shall be subject to any First Financial Affiliated Company clawback policy and any applicable stock retention policies for the Chief Executive Officer and/or Named Executive Officers as those policies may be amended from time to time. |
(a) | The Participant will have, with respect to the restricted Stock, the right to vote all shares of the restricted Stock received under or as a result of this Stock Agreement, including shares which are subject to the restrictions on transfer in Section 2 and to the forfeiture provisions in Section 4 of this Stock Agreement. |
(b) | The Participant shall not be paid any dividends with respect to the restricted Stock until the Performance Period ends. After the Performance Period ends, the Participant shall receive a cash payment (without interest) based on the dividends that would have been payable to the Participant, but for the restrictions set forth in this Agreement, after the Grant Date on the restricted Stock subject to the Award multiplied by the actual Vesting Percentage achieved with respect to the Award under Section 4. By way of example, when the Performance Period ends if the Committee determines that the Performance Level results in a Vesting Percentage of 110% of the Award, Participant will be entitled to three years of accumulated dividends from the date of grant to the 3rd anniversary date on 110% of the original restricted Stock awarded. No dividends shall be paid to the Participant with respect to any shares of restricted Stock that are forfeited by the Participant or not earned. |
(c) | Dividends payable in Stock with respect to the restricted Stock from the Grant Date through the Vesting Date will be held subject to the vesting of the underlying restricted Stock and then automatically paid in the form of Stock to the Participant after the Performance Period ends. The amount of such stock dividends shall be calculated in accordance with Section 7(b). |
(d) | Any dividends that become payable in accordance with this Section 7 with respect to an Award shall be paid on or after the Vesting Date, but in no event later than March 15th of the year following the year in which the Vesting Date occurs. |
8. | Regulatory Compliance. The issue of shares of restricted Stock and Stock will be subject to full compliance with all then-applicable requirements of law and the requirements of the exchange upon which Stock may be traded, as set forth in the Plan. Furthermore, First Financial shall have the right to refuse to issue or transfer any shares under this Stock Agreement if First Financial, acting in its absolute discretion determines that the issuance or transfer of such Stock might violate any applicable law or regulation. |
9. | Withholding Tax. The Participant agrees that, in the event that the award and receipt of the restricted Stock or the expiration of restrictions thereon results in the Participant's realization of income which for federal, state or local income tax purposes is, in the opinion of counsel for First Financial, subject to withholding of tax at source by the Participant's employer, the Participant will pay to such Participant's employer an amount equal to such withholding tax or make arrangements satisfactory to First Financial regarding the payment of such tax (or such employer on behalf of First Financial may withhold such amount from Participant's salary or from dividends paid by First Financial on shares of the restricted Stock or any other compensation payable to the Participant). Alternatively, if the Participant makes a proper Code Section 83(b) election, the Participant must notify First Financial in accordance with the requirements of Code Section 83(b) and promptly pay First Financial the applicable federal, state and local withholding taxes due with respect to the shares of restricted Stock subject to the election. |
10. | Investment Representation. The Participant represents and agrees that if he or she is awarded and receives the restricted Stock at a time when there is not in effect under the Securities Act of 1933 a registration statement pertaining to the shares and there is not available for delivery a prospectus meeting the requirements of Section 10(A)(3) of said Act, (i) he or she will accept and receive such shares for the purpose of investment and not with a view to their resale or distribution, (ii) that upon such award and receipt, he or she will furnish to First Financial an investment letter in form and substance satisfactory to First Financial, (iii) prior to selling or offering for sale any such shares, he or she will furnish First Financial with an opinion of counsel satisfactory to First Financial to the effect that such sale may lawfully be made and will furnish First Financial with such certificates as to factual matters as First Financial may reasonably request, and (iv) that certificates representing such shares may be marked with an appropriate legend describing such conditions precedent to sale or transfer. |
11. | Federal Income Tax Election. The Participant hereby acknowledges receipt of advice that, pursuant to current federal income tax laws, (i) he or she has thirty (30) days in which to elect to be taxed in the current taxable year on the fair market value of the restricted Stock in accordance with the provisions of Internal Revenue Code Section 83(b), and (ii) if no such election is made, the taxable event will occur upon expiration of restrictions on transfer at termination of the Performance Period and the tax will be measured by the fair market value of the restricted Stock on the date of the taxable event. |
12. | Adjustments. Except as otherwise provided in this Stock Agreement, if, after the date of this Stock Agreement, the Stock of First Financial is, as a result of a merger, reorganization, consolidation, recapitalization, reclassification, split-up, spin-off, separation, liquidation, stock dividend, stock split, reverse stock split, property dividend, share repurchase, share combination, share exchange, issuance of warrants, rights or debentures or other change in corporate structure of First Financial, increased or decreased or changed into or exchanged for a different number or kind of shares of stock or other securities of First Financial or of another First Financial, then: |
(a) | there automatically will be substituted for each share of restricted Stock for which the Performance Period has not ended granted under the Stock Agreement the number and kind of shares of stock or other securities into which each outstanding share is changed or for which each such share is exchanged; and |
(b) | First Financial will make such other adjustments to the securities subject to provisions of the Plan and this Stock Agreement as may be appropriate and equitable; provided, however, that the number of shares of restricted Stock will always be a whole number. |
13. | Non‑solicitation and Non-disclosure of Confidential Information. This Section 13 shall apply to all Participants not subject to an employment agreement with First Financial or any Affiliated Companies. |
(a) | Non‑solicitation of Clients. During the Participant's employment with First Financial or any Affiliated Companies (as defined below) and for a period of one year after Participant is no longer employed by any Affiliated Companies, Participant shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for First Financial or any Affiliated Companies): |
(1) | Solicit (as defined below) any person or entity located in the Restricted Territory for the provision of any Restricted Services; |
(2) | Solicit or attempt in any manner to persuade any client or customer of any Affiliated Companies to cease to do business, to refrain from doing business or to reduce the amount of business which any client or customer has customarily done or contemplates doing with any of the Affiliated Companies; or |
(3) | Interfere with or damage (or attempt to interfere with or damage) any relationship between any Affiliated Company and any client or customer. |
(b) | Non‑solicitation of Employees; No Hire. During the Participant's employment with First Financial or any Affiliated Companies and for a period of one year after Participant is no longer employed by First Financial or any Affiliated Companies, Participant shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for any Affiliated Company): |
(1) | Solicit any employee, officer, director, agent or independent contractor of any Affiliated Company to terminate his or her relationship with, or otherwise refrain from rendering services to, any Affiliated Company, or otherwise interfere or attempt to interfere in any way with any Affiliated Company's relationship with any of its employees, officers, directors, agents or independent contractors; or |
(2) | Employ or engage any person who, at any time within the two‑year period immediately preceding such employment or engagement, was an employee, officer or director of any Affiliated Company. |
(c) | Non-disclosure of Confidential Information. |
(1) | During Participant's employment with First Financial or any Affiliated Company and after the termination of such employment for any reason, Participant shall not, without the prior written consent of the General Corporate Counsel of First Financial (or such person's designee) or as may be otherwise required by law or legal process, communicate or divulge any Confidential Information to any person or entity other than First Financial or an Affiliated Company, their employees, and those designated by First Financial or an Affiliated Company, or use any Confidential Information except for the benefit of First Financial or an Affiliated Company. Upon service to Participant of any subpoena, court order or other legal process requiring Participant to disclose Confidential Information, Participant shall immediately provide written notice to First Financial of such service and the content of any Confidential Information to be disclosed. |
(2) | Immediately upon the termination of Participant's employment with First Financial or an Affiliated Company for any reason, Participant shall return to First Financial or the applicable Affiliated Company all Confidential Information in Participant's possession, including but not limited to any and all copies, reproductions, notes, or extracts of Confidential Information in paper or electronic form. |
(d) | Defined Terms. Unless otherwise defined in this Stock Agreement, capitalized terms shall have the same meaning as that in the Plan. For purposes of this Stock Agreement, the following terms shall have the meaning set forth below: |
(1) | “Affiliated Companies” shall mean First Financial, all of its direct or indirect subsidiaries, and any other entities controlled by, controlling, or under common control with First Financial, including any successors thereof, except that, following the consummation of a Change in Control, for purposes of §§ 13(a) and 13(b), Affiliated Companies shall be limited to First Financial and its subsidiaries as of immediately prior to the consummation of such Change in Control. |
(2) | “Confidential Information” shall mean all trade secrets, proprietary data, and other confidential information of or relating to any Affiliated Company, including without limitation financial information, information relating to business operations, services, promotional practices, and relationships with customers, suppliers, employees, independent contractors, or other parties, and any information which any Affiliated Company is obligated to treat as confidential pursuant to any course of dealing or any agreement to which it is a party or otherwise bound, provided that Confidential Information shall not include information that is or becomes available to the general public and did not become so available through any breach of this Stock Agreement by Participant or Participant's breach of a duty owed to First Financial. |
(3) | “Restricted Services” shall mean any commercial banking, savings banking, mortgage lending, or any similar lending or banking services. |
(4) | “Restricted Territory” shall mean anywhere in the geographic area consisting of the states of the United States in which any of the Affiliated Companies operate banking offices at any time during the Participant's employment with First Financial or any Affiliated Companies. |
(5) | “Solicit” shall mean any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, inviting, advising, persuading, encouraging or requesting any person or entity, in any manner, to take or refrain from taking any action; provided, however, that the term “Solicit” shall not include general advertisements by an entity with which Participant is associated or other communications in any media not targeted specifically at any specific individual described in § 13(a) or 13(b). |
(e) | Enforcement; Remedies; Blue Pencil. Participant acknowledges that: (1) the various covenants, restrictions, and obligations set forth in this § 13 are separate and independent obligations, and may be enforced separately or in any combination; (2) the provisions of this § 13 are fundamental and essential for the protection of First Financial's and the Affiliated Companies' legitimate business and proprietary interests, and the Affiliated Companies (other than First Financial) are intended third-party beneficiaries of such provisions; (3) such provisions are reasonable and appropriate in all respects and impose no undue hardship on Participant; and (4) in the event of any violation by Participant of any of such provisions, First Financial and, if applicable, the Affiliated Companies, will suffer irreparable harm and their remedies at law may be inadequate. In the event of any violation or attempted violation of any provision of this § 13 by Participant, First Financial and the Affiliated Companies, or any of them, as the case may be, shall be entitled to a temporary restraining order, temporary and permanent injunctions, specific performance, and other equitable relief, without any showing of irreparable harm or damage or the posting of any bond, in addition to any other rights or remedies that may then be available to them, including, without limitation, money damages and the cessation of the. If any of the covenants set forth in this § 13 is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such covenant shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining such covenants shall not be affected thereby. |
14. | Employment Claims. In return for the benefits that Participant may receive under this Stock Agreement and for continued employment, Participant agrees not to commence any action or suit related to Participant's employment by Bancorp or an Affiliated Company: |
(a) | More than six months after the termination of Participant's employment, if the action or suit is related to the termination of Participant's employment; or |
(b) | More than six months after the event or occurrence on which Participant's claim is based, if the action or suit is based on an event or occurrence other than the termination of Participant's employment. |
15. | Notices. Each notice relating to this Stock Agreement must be in writing and delivered in person or by registered mail to First Financial at its office, 255 East Fifth Street, Suite 700, Cincinnati, Ohio 45202, attention of the Secretary, or at such other place as First Financial has designated by notice. All notices to the Participant or other person or persons succeeding to his or her interest will be delivered to the Participant or such other person or persons at the Participant's address below specified or such other address as specified in a notice filed with First Financial. |
16. | Determinations of First Financial Final. Any dispute or disagreement which arises under, as a result of, or in any way relates to the interpretation or construction of this Stock Agreement or the Plan will be determined by the Board of Directors of First Financial (or any successor corporation) or by the Committee, as determined by the Board of Directors of First Financial. The Participant hereby agrees to be bound by the terms of the Plan and accept any determination by the Board of Directors (or the Committee, as applicable) in administering the Plan and this Agreement as final, binding and conclusive for all purposes. |
17. | Successors. All rights under this Stock Agreement are personal to the Participant and are not transferable except that in the event of the Participant's death, such rights are transferable to the Participant's legal representatives, heirs or legatees. This Stock Agreement will inure to the benefit of and be binding upon First Financial and its successors and assigns. |
18. | Obligations of First Financial. The liability of First Financial under the Plan and this Stock Agreement is limited to the obligations set forth therein. No term or provision of the Plan or this Stock Agreement will be construed to impose any liability on First Financial in favor of the Participant with respect to any loss, cost or expense which the Participant may incur in connection with or arising out of any transaction in connection therewith. |
19. | No Employment Rights. Nothing in the Plan or this Stock Agreement or any related material shall give the Participant the right to continue in the employment of First Financial or any subsidiary of First Financial or adversely affect the right of First Financial or any subsidiary of First Financial to terminate the Participant's employment with or without cause at any time. |
20. | Governing Law. This Stock Agreement will be governed by and interpreted in accordance with the laws of the State of Ohio. |
21. | Plan. The Plan will control if there is any conflict between the Plan and this Stock Agreement and on any matters that are not contained in this Stock Agreement. A copy of the Plan has been provided to the Participant and is incorporated by reference and made a part of this Stock Agreement. Capitalized terms used but not specifically defined in this Stock Agreement will have the definitions given to them in the Plan. |
22. | Entire Agreement. This Stock Agreement and the Plan supersede any other agreement, whether written or oral, that may have been made or entered into by First Financial and/or any of its subsidiaries and the Participant relating to the shares of restricted Stock that are granted under this Stock Agreement. This Stock Agreement and the Plan constitute the entire agreement by the parties with respect to such matters, and there are no agreements or commitments except as set forth herein and in the Plan. |
23. | Captions; Counterparts. The captions in this Stock Agreement are for convenience only and will not be considered a part of or affect the construction or interpretation of any provision of this Stock Agreement. This Stock Agreement may be executed in any number of counterparts, each of which will constitute one and the same instrument. |
1. | I have reviewed this quarterly report on Form 10-Q of First Financial Bancorp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | 8/6/2013 | /s/ Claude E. Davis | |
Claude E. Davis President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of First Financial Bancorp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | 8/6/2013 | /s/ Anthony M. Stollings | |
Anthony M. Stollings Executive Vice President and Chief Financial Officer |
(1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Claude E. Davis |
Claude E. Davis President and Chief Executive Officer |
August 6, 2013 |
(1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Anthony M. Stollings |
Anthony M. Stollings Executive Vice President and Chief Financial Officer |
August 6, 2013 |
EARNINGS PER COMMON SHARE - Computation of Basic and Diluted Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Numerator for basic and diluted earnings per share -income available to common shareholders: | ||||
Net income | $ 15,829 | $ 17,802 | $ 29,653 | $ 34,796 |
Denominator for basic earnings per share - weighted average shares | 57,291,994 | 57,933,281 | 57,365,105 | 57,864,269 |
Effect of dilutive securities - | ||||
Employee stock awards | 735,440 | 915,301 | 739,927 | 936,550 |
Warrants | 100,915 | 109,697 | 101,471 | 120,870 |
Denominator for diluted earnings per share - adjusted weighted average shares | 58,128,349 | 58,958,279 | 58,206,503 | 58,921,689 |
Basic | $ 0.28 | $ 0.31 | $ 0.52 | $ 0.60 |
Diluted | $ 0.27 | $ 0.30 | $ 0.51 | $ 0.59 |
LOANS (covered)
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Jun. 30, 2013
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Covered Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS (covered) | COVERED LOANS Loans acquired in Federal Deposit Insurance Corporation (FDIC)-assisted transactions initially covered under loss sharing agreements whereby the FDIC will reimburse First Financial for the majority of any losses incurred are referred to as covered loans. Pursuant to the terms of each loss sharing agreement, covered loans are subject to a stated loss threshold whereby the FDIC will reimburse First Financial for 80% of losses up to the stated loss threshold and 95% of losses in excess of the threshold. First Financial will reimburse the FDIC for its pro rata share of recoveries with respect to losses for which the FDIC paid First Financial a reimbursement under the loss sharing agreement. The FDIC’s obligation to reimburse First Financial for losses with respect to covered loans began with the first dollar of loss incurred. First Financial accounts for the majority of covered loans under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, except loans with revolving privileges, which are outside the scope of this guidance, and loans for which cash flows could not be estimated, which are accounted for under the cost recovery method. Loans accounted for under FASB ASC Topic 310-30 are referred to as purchased impaired loans. Purchased impaired loans are not classified as nonperforming assets as the loans are considered to be performing under FASB ASC Topic 310-30. Therefore, interest income, through accretion of the difference between the carrying value of the loans and the expected cash flows (accretable difference) is recognized on all covered purchased impaired loans. The following table reflects the carrying value of all covered purchased impaired and nonimpaired covered loans:
The balance of all loans accounted for under FASB ASC Topic 310-30, including all contractual principal, interest, fees and penalties, was $0.9 billion and $1.1 billion as of June 30, 2013 and December 31, 2012, respectively. These balances include $187.1 million and $220.4 million of contractual interest not yet accrued as of June 30, 2013 and December 31, 2012, respectively. Changes in the carrying amount of accretable difference for covered purchased impaired loans were as follows:
(1) Includes the impact of loan repayments and charge-offs First Financial regularly reviews its forecast of expected cash flows for covered purchased impaired loans. During the second quarter, the Company implemented certain enhancements to its valuation methodology and the estimation of impairment to place greater emphasis on changes in total expected cash flows and less emphasis on changes in the net present value of expected cash flows. These enhancements contributed to a net reclassification from accretable difference to nonaccretable difference of $8.5 million and resulted in lower yields on certain loan pools during the quarter. Conversely, First Financial recognized a $9.1 million reclassification from nonaccretable difference to accretable difference and higher yields on certain loan pools during the second quarter of 2012 related to improvement in the cash flow expectations for certain loan pools. For the six months ended June 30, 2013, the Company recognized a net reclassification of $0.7 million from accretable difference to nonaccretable difference as a result of the enhancements made during the second quarter. For the six months ended June 30, 2012, the Company recognized a net reclassification of $23.4 million from nonaccretable difference to accretable difference. For further detail on impairment and provision expense related to covered purchased impaired loans, see "Covered Loans" in Note 10 - Allowance for Loan and Lease Losses. Credit Quality. For further discussion of First Financial's monitoring of credit quality for commercial and consumer loans, including discussion of the risk attributes noted below, please see Note 8 - Loans, excluding covered loans. Covered commercial and consumer credit exposure by risk attribute was as follows:
Delinquency. Covered loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof remains unpaid after the due date of the scheduled payment. Covered loan delinquency, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:
Nonaccrual. Covered purchased impaired loans are classified as performing, even though they may be contractually past due, as any nonpayment of contractual principal or interest is considered in the periodic re-estimation of expected cash flows and is included in the resulting recognition of current period covered loan loss provision or prospective yield adjustments. Similar to uncovered loans, covered loans accounted for outside FASB ASC Topic 310-30 are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful or when principal or interest payments are ninety days or more past due. Generally, these loans are placed on nonaccrual status due to the continued failure to adhere to contractual payment terms by the borrower coupled with other pertinent factors, such as insufficient collateral value. The accrual of interest income is discontinued and previously accrued, but unpaid interest is reversed when a loan is placed in nonaccrual status. Any payments received while a loan is in nonaccrual status are applied as a reduction to the carrying value of the loan. A loan may be returned to accrual status if all contractual payments have been received and collection of future principal and interest payments is no longer doubtful. Information on covered nonaccrual loans was as follows:
Impaired Loans. Covered loans placed in nonaccrual status, excluding loans accounted for under FASB ASC Topic 310-30, are considered impaired. First Financial’s investment in covered impaired loans, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:
Covered OREO. Covered OREO is comprised of properties acquired by the Company through the loan foreclosure or repossession process, or other resolution activities that result in partial or total satisfaction of problem covered loans. These properties remain subject to loss sharing agreements whereby the FDIC reimburses First Financial for the majority of any losses incurred. The acquired properties are recorded at the lower of cost or fair value upon acquisition. Losses arising at the time of acquisition of such properties are charged against the allowance for loan and lease losses. Subsequent write-downs in the carrying value of covered OREO properties are expensed as incurred. Estimated reimbursements due from the FDIC under loss sharing agreements related to any losses upon acquisition or subsequent write-downs in the carrying value of covered OREO are recorded as noninterest income and an increase to the FDIC indemnification asset in the same period. Improvements to the properties may be capitalized if the improvements contribute to the overall value of the property, but may not be capitalized in excess of the net realizable value of the property. Changes in covered OREO were as follows:
|
CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Interest income | ||||
Loans, including fees | $ 55,022 | $ 63,390 | $ 111,047 | $ 129,826 |
Investment securities | ||||
Taxable | 8,295 | 10,379 | 16,671 | 20,896 |
Tax-exempt | 560 | 121 | 1,140 | 255 |
Total interest on investment securities | 8,855 | 10,500 | 17,811 | 21,151 |
Other earning assets | (1,556) | (1,967) | (3,028) | (3,957) |
Total interest income | 62,321 | 71,923 | 125,830 | 147,020 |
Interest expense | ||||
Deposits | 3,284 | 6,381 | 7,144 | 14,097 |
Short-term borrowings | 305 | 37 | 634 | 49 |
Long-term borrowings | 654 | 675 | 1,308 | 1,355 |
Total interest expense | 4,243 | 7,093 | 9,086 | 15,501 |
Net interest income | 58,078 | 64,830 | 116,744 | 131,519 |
Provision for loan and lease losses - uncovered | 2,409 | 8,364 | 5,450 | 11,622 |
Provision for loan and lease losses - covered | (8,283) | 6,047 | 759 | 18,998 |
Net interest income after provision for loan and lease losses | 63,952 | 50,419 | 110,535 | 100,899 |
Noninterest income | ||||
Service charges on deposit accounts | 5,205 | 5,376 | 9,922 | 10,285 |
Trust and wealth management fees | 3,497 | 3,377 | 7,447 | 7,168 |
Bankcard income | 3,145 | 2,579 | 5,578 | 5,115 |
Net gains from sales of loans | 1,089 | 1,132 | 1,795 | 2,072 |
Gains on sales of investment securities | 188 | 0 | 1,724 | 0 |
FDIC loss sharing income | (7,384) | 8,280 | 1,550 | 21,096 |
Accelerated discount on covered loans | 1,935 | 3,764 | 3,870 | 7,409 |
Other | 3,940 | 9,037 | 6,427 | 12,325 |
Total noninterest income | 11,615 | 33,545 | 38,313 | 65,470 |
Noninterest expenses | ||||
Salaries and employee benefits | 26,216 | 29,048 | 53,545 | 57,909 |
Pension settlement charges | 4,316 | 0 | 4,316 | 0 |
Net occupancy | 5,384 | 5,025 | 11,549 | 10,407 |
Furniture and equipment | 2,250 | 2,323 | 4,621 | 4,567 |
Data processing | 2,559 | 2,076 | 5,028 | 3,977 |
Marketing | 1,182 | 1,238 | 2,079 | 2,392 |
Communication | 781 | 913 | 1,614 | 1,807 |
Professional services | 1,764 | 2,151 | 3,567 | 4,298 |
State intangible tax | 1,004 | 970 | 2,018 | 1,996 |
FDIC assessments | 1,148 | 1,270 | 2,273 | 2,433 |
Loss (gain) - other real estate owned | 216 | 313 | 718 | 1,309 |
Loss (gain) - covered other real estate owned | (2,212) | 1,233 | (2,369) | 2,525 |
Loss sharing expense | 1,578 | 3,085 | 3,864 | 4,836 |
Other | 7,097 | 7,814 | 13,566 | 14,781 |
Total noninterest expenses | 53,283 | 57,459 | 106,389 | 113,237 |
Income before income taxes | 22,284 | 26,505 | 42,459 | 53,132 |
Income tax expense | 6,455 | 8,703 | 12,806 | 18,336 |
Net income | $ 15,829 | $ 17,802 | $ 29,653 | $ 34,796 |
Earnings per common share | ||||
Basic | $ 0.28 | $ 0.31 | $ 0.52 | $ 0.60 |
Diluted | $ 0.27 | $ 0.30 | $ 0.51 | $ 0.59 |
Cash dividends declared per share | $ 0.24 | $ 0.29 | $ 0.52 | $ 0.60 |
Average common shares outstanding - basic | 57,291,994 | 57,933,281 | 57,365,105 | 57,864,269 |
Average common shares outstanding - diluted | 58,128,349 | 58,958,279 | 58,206,503 | 58,921,689 |
RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS
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6 Months Ended |
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Jun. 30, 2013
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Recently Adopted and Issued Accounting Standards [Abstract] | |
Recently Adopted and Issued Accounting Standards Disclosure [Text Block] | RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS In December 2011, the FASB issued an update (ASU 2011-11, Disclosures About Offsetting Assets and Liabilities) which creates new disclosure requirements about the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. These disclosure requirements are required for recognized financial and derivative instruments that are offset in accordance with the guidance in FASB ASC Topic 210-20-45, Balance Sheet - Offsetting - Other Presentation Matters, FASB ASC Topic 815-10-45, Derivatives and Hedging - Other Presentation Matters, or are subject to an enforceable master netting arrangement or similar agreement. Subsequently, the FASB issued ASU 2013-01, Scope Clarification of Disclosures about Offsetting Assets and Liabilities, which limits the scope of ASU 2011-11 to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. Companies are required to disclose information to enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on its financial position, including the effect or potential effect of rights of set-off associated with certain financial instruments and derivative instruments. The provisions of ASU 2011-11 became effective for the interim reporting period ended March 31, 2013 and resulted in additional disclosures related to the Company's derivatives programs. For further detail, see Note 6 - Derivatives. In July 2012, the FASB issued an update (ASU 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment) which allows an entity testing an indefinite-lived intangible asset for impairment the option of performing a qualitative assessment before calculating the fair value of the asset. This update also addresses circumstances that a company should consider in interim periods, but does not remove the requirement for testing of indefinite-lived intangible assets for impairment annually and between annual tests if there is a change in events and circumstances. The provisions of ASU 2012-02 became effective for the interim reporting period ended March 31, 2013 and did not have a material impact on the Company's Consolidated Financial Statements. In October 2012, the FASB issued an update (ASU 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution) which clarifies the applicable guidance for subsequently measuring an indemnification asset recognized as a result of a government-assisted acquisition of a financial institution. When a company recognizes an indemnification asset as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs (as a result of a change in cash flows expected to be collected on the assets subject to indemnification), the company should subsequently account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement (that is, the lesser of the term of the indemnification agreement and the remaining life of the indemnified assets). The provisions of ASU 2012-06 became effective for the interim reporting period ended March 31, 2013 and did not have a material impact on the Company's Consolidated Financial Statements. On February 5, 2013, the FASB issued an update (ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (AOCI)) which requires preparers to report in one place information about reclassifications out of AOCI. The ASU also requires companies to report changes in AOCI balances and expands the disclosure requirements in FASB ASC Topic 220, Comprehensive Income (ASC 220), for presentation of changes in AOCI. This ASU requires companies to disaggregate the total change of each component of other comprehensive income and separately present (1) reclassification adjustments and (2) current-period OCI. ASU 2013-02 also requires companies to present information about significant items reclassified out of AOCI by component either (1) on the face of the statement where net income is presented or (2) as a separate disclosure in the notes to the financial statements. The provisions of ASU 2013-02 became effective for the interim reporting period ended March 31, 2013 and resulted in additional disclosures related to reclassifications from AOCI. For further detail, see Note 14 - Accumulated Other Comprehensive Income (Loss). |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
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6 Months Ended |
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Jun. 30, 2013
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Basis of Presentation Policy | The Consolidated Financial Statements of First Financial, a bank holding company principally serving Ohio, Indiana and Kentucky, include the accounts and operations of First Financial and its wholly-owned subsidiary – First Financial Bank, N.A. (First Financial Bank or the Bank). All significant intercompany transactions and accounts have been eliminated in consolidation. Certain reclassifications of prior periods’ amounts have been made to conform to the current period’s presentation and had no effect on net earnings. |
Use of Estimates, Policy | The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates, assumptions and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes. Actual realized amounts could differ materially from those estimates. |
Goodwill and Intangible Assets, Goodwill, Policy | Goodwill. Assets and liabilities of acquired entities are recorded at their estimated fair values as of the acquisition date. The excess cost of the acquisition over the fair value of net assets acquired is recorded as goodwill. Goodwill is not amortized, but is measured for impairment on an annual basis as of October 1 of each year or whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. |
Goodwill and Intangible Assets, Policy | Other intangible assets. Other intangible assets consist primarily of core deposit intangibles. Core deposit intangibles are recorded at their estimated fair value as of the acquisition date and are then amortized on an accelerated basis over their estimated useful lives. |
Commitments and Contingencies, Policy | In the normal course of business, First Financial offers a variety of financial instruments with off-balance-sheet risk to its clients to assist them in meeting their requirements for liquidity and credit enhancement. These financial instruments include standby letters of credit and outstanding commitments to extend credit. GAAP does not require these financial instruments to be recorded in the Consolidated Financial Statements. First Financial’s exposure to credit loss, in the event of nonperformance by the other party to the financial instrument for standby letters of credit, and outstanding commitments to extend credit, is represented by the contractual amounts of those instruments. First Financial uses the same credit policies in issuing commitments and conditional obligations as it does for credit instruments recorded on the Consolidated Balance Sheets. |
Certain Loans and Debt Securities Acquired in Transfer, Recognizing Interest Income on Impaired Loans, Policy | First Financial accounts for the majority of covered loans under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, except loans with revolving privileges, which are outside the scope of this guidance, and loans for which cash flows could not be estimated, which are accounted for under the cost recovery method. Loans accounted for under FASB ASC Topic 310-30 are referred to as purchased impaired loans. Purchased impaired loans are not classified as nonperforming assets as the loans are considered to be performing under FASB ASC Topic 310-30. Therefore, interest income, through accretion of the difference between the carrying value of the loans and the expected cash flows (accretable difference) is recognized on all covered purchased impaired loans. |
Fair Value of Financial Instruments, Policy | Fair Value Measurement The fair value framework as disclosed in the Fair Value Measurements and Disclosure Topic of FASB ASC Topic 825, Financial Instruments (Fair Value Topic) includes a hierarchy which focuses on prioritizing the inputs used in valuation techniques. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), a lower priority to observable inputs other than quoted prices in active markets for identical assets and liabilities (Level 2) and the lowest priority to unobservable inputs (Level 3). When determining the fair value measurements for assets and liabilities, First Financial looks to active markets to price identical assets or liabilities whenever possible and classifies such items in Level 1. When identical assets and liabilities are not traded in active markets, First Financial looks to observable market data for similar assets and liabilities and classifies such items as Level 2. Certain assets and liabilities are not actively traded in observable markets and First Financial must use alternative techniques, based on unobservable inputs, to determine the fair value and classifies such items as Level 3. The level within the fair value hierarchy is based on the lowest level of input that is significant in the fair value measurement. The following methods, assumptions and valuation techniques were used by First Financial to measure different financial assets and liabilities at fair value and in estimating its fair value disclosures for financial instruments. Cash and short-term investments. The carrying amounts reported in the Consolidated Balance Sheets for cash and short-term investments, such as federal funds sold, approximated the fair value of those instruments. The Company classifies cash and short-term investments in Level 1 of the fair value hierarchy. Investment securities. Investment securities classified as trading and available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar investment securities. First Financial compiles prices from various sources who may apply such techniques as matrix pricing to determine the value of identical or similar investment securities (Level 2). Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for the specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities. Any investment securities not valued based upon the methods above are considered Level 3. First Financial utilizes information provided by a third-party investment securities administrator in analyzing the investment securities portfolio in accordance with the fair value hierarchy of the Fair Value Topic. The administrator’s evaluation of investment security portfolio pricing is performed using a combination of prices and data from other sources, along with internally developed matrix pricing models and assistance from the administrator’s internal fixed income analysts and trading desk. The administrator’s month-end pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, previous evaluation prices and between the various pricing services. These processes produce a series of quality assurance reports on which price exceptions are identified, reviewed and where appropriate, securities are repriced. In the event of a materially different price, the administrator will report the variance as a “price challenge” and review the pricing methodology in detail. The results of the quality assurance process are incorporated into the selection of pricing providers by the portfolio manager. First Financial reviews the pricing methodologies utilized by the administrator to ensure the fair value determination is consistent with the applicable accounting guidance and that the investments are properly classified in the fair value hierarchy. Further, the Company periodically validates the fair values for a sample of securities in the portfolio by comparing the fair values provided by the administrator to prices from other independent sources for the same or similar securities. First Financial analyzes unusual or significant variances, conducts additional research with the administrator, if necessary, and takes appropriate action based on its findings. Loans held for sale. Loans held for sale are carried at the lower of cost or fair value. These loans currently consist of one-to-four family residential real estate loans originated for sale to qualified third parties. Fair value is based on the contractual price to be received from these third parties, which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, First Financial records any fair value adjustments on a nonrecurring basis. Gains and losses on the sale of loans are recorded as net gains from sales of loans within noninterest income in the Consolidated Statements of Income. Loans - excluding covered loans. The fair value of commercial, commercial real estate, residential real estate and consumer loans were estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or repricing frequency. The Company classifies the estimated fair value of uncovered loans as Level 3 in the fair value hierarchy. Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. Impaired loans are valued at the lower of cost or fair value for purposes of determining the appropriate amount of impairment to be allocated to the allowance for loan and lease losses. Fair value is generally measured based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed third party appraiser (Level 3). The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable borrower financial statements if not considered significant. Likewise, values for inventory and accounts receivable collateral are based on borrower financial statement balances or aging reports on a discounted basis as appropriate (Level 3). Impaired loans allocated to the allowance for loan and lease losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan and lease losses on the Consolidated Statements of Income. Covered loans. Fair values for covered loans accounted for under FASB ASC Topic 310-30 are based on a discounted cash flow methodology that considers factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of the loan and whether or not the loan was amortizing and a discount rate reflecting the Company's assessment of risk inherent in the cash flow estimates. These covered loans are grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. First Financial estimated the cash flows expected to be collected on these loans based upon the expected remaining life of the underlying loans, which includes the effects of estimated prepayments. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change. Fair values for covered loans accounted for outside of FASB ASC Topic 310-30 were estimated by discounting the future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or repricing frequency. The carrying amount of accrued interest approximates its fair value. The Company classifies the estimated fair value of covered loans as Level 3 in the fair value hierarchy. FDIC indemnification asset. The accounting for FDIC indemnification assets is closely related to the accounting for the underlying, indemnified assets. Fair value of the FDIC indemnification asset was estimated using projected cash flows related to the loss sharing agreements based on the expected reimbursements for losses and the applicable loss sharing percentages. First Financial re-estimates the expected indemnification asset cash flows in conjunction with the periodic re-estimation of cash flows on covered loans accounted for under FASB ASC Topic 310-30. Improvements in cash flow expectations on covered loans generally result in a related decline in the expected indemnification cash flows while declines in cash flow expectations on covered loans generally result in an increase in expected indemnification cash flows. The expected cash flows are discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change. The Company classifies the estimated fair value of the indemnification asset as Level 3 in the fair value hierarchy. Deposit liabilities. The fair value of demand deposits, savings accounts and certain money-market deposits was the amount payable on demand at the reporting date. The carrying amounts for variable-rate certificates of deposit approximated their fair values at the reporting date. The fair value of fixed-rate certificates of deposit was estimated using a discounted cash flow calculation which applies the interest rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest approximates its fair value. The Company classifies the estimated fair value of deposit liabilities as Level 2 in the fair value hierarchy. Borrowings. The carrying amounts of federal funds purchased and securities sold under agreements to repurchase and other short-term borrowings approximate their fair values. The Company classifies the estimated fair value of short-term borrowings as Level 1 of the fair value hierarchy. The fair value of long-term debt is estimated using a discounted cash flow calculation which utilizes the interest rates currently offered for borrowings of similar remaining maturities. Third-party valuations are used for long-term debt with embedded options, such as call features. The Company classifies the estimated fair value of long-term debt as Level 2 in the fair value hierarchy. Commitments to extend credit and standby letters of credit. Pricing of these financial instruments is based on the credit quality and relationship, fees, interest rates, probability of funding and compensating balance and other covenants or requirements. Loan commitments generally have fixed expiration dates, are variable rate and contain termination and other clauses which provide for relief from funding in the event that there is a significant deterioration in the credit quality of the client. Many loan commitments are expected to expire without being drawn upon. The rates and terms of the commitments to extend credit and the standby letters of credit are competitive with those in First Financial’s market area. The carrying amounts are reasonable estimates of the fair value of these financial instruments. Carrying amounts, which are comprised of the unamortized fee income and, where necessary, reserves for any expected credit losses from these financial instruments, are immaterial. Derivatives. The fair values of derivative instruments are based primarily on a net present value calculation of the cash flows related to the interest rate swaps at the reporting date, using primarily observable market inputs such as interest rate yield curves. The discounted net present value calculated represents the cost to terminate the swap if First Financial should choose to do so. Additionally, First Financial utilizes a vendor-developed, proprietary model to value the credit risk component of both the derivative assets and liabilities. The credit valuation adjustment is recorded as an adjustment to the fair value of the derivative asset or liability on the reporting date. Derivative instruments are classified as Level 2 in the fair value hierarchy. |
Credit Risk
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Derivatives, Methods of Accounting, Hedging Derivatives | First Financial manages the market value credit risk associated with counterparties through counterparty credit policies. These policies require the Company to maintain a total derivative notional position of less than 35% of assets, total credit exposure of less than 3% of capital and no single counterparty credit risk exposure greater than $20.0 million. |
Non Covered Loans
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Loans and Leases Receivable, Nonaccrual Loan and Lease Status, Policy | Loans are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful or when principal or interest payments are ninety days or more past due. Generally, loans are placed on nonaccrual status due to the continued failure to adhere to contractual payment terms by the borrower coupled with other pertinent factors such as insufficient collateral value. The accrual of interest income is discontinued and previously accrued, but unpaid interest is reversed when a loan is placed on nonaccrual status. Any payments received while a loan is on nonaccrual status are applied as a reduction to the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments is no longer doubtful. |
Loans and Leases Receivable, Troubled Debt Restructuring Policy [Policy Text Block] | A loan modification is considered a TDR when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made by the Company that would not otherwise be considered for a borrower with similar credit characteristics. The most common types of modifications include interest rate reductions, maturity extensions and modifications to principal amortization, including interest only structures. Modified terms are dependent upon the financial position and needs of the individual borrower. If the modification agreement is violated, the loan is managed by the Company’s credit administration group for resolution, which may result in foreclosure in the case of real estate. TDRs are generally classified as nonaccrual for a minimum period of six months and may qualify for return to accrual status once they have demonstrated performance with the terms of the loan modification. |
Impaired Financing Receivable, Policy | Loans placed on nonaccrual status and TDRs are considered impaired. First Financial individually reviews all impaired commercial loan relationships greater than $250,000, as well as consumer loan TDRs greater than $100,000, to determine if a specific allowance based on the borrower’s overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral is necessary. Specific allowances are based on expected cash flows, discounted using the loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans. |
Loans and Leases Receivable, Real Estate Acquired Through Foreclosure, Policy | Other real estate owned (OREO) is comprised of properties acquired by the Company through the loan foreclosure or repossession process, or other resolution activity that results in partial or total satisfaction of problem loans. The acquired properties are recorded at the lower of cost or fair value less estimated costs of disposal (net realizable value) upon acquisition. Losses arising at the time of acquisition of such properties are charged against the allowance for loan and lease losses. Subsequent write-downs in the carrying value of OREO properties are expensed as incurred. Improvements to the properties may be capitalized if the improvements contribute to the overall value of the property, but may not be capitalized in excess of the net realizable value of the property. |
Loans and Leases Receivable, Allowance for Loan Losses Policy | For each reporting period, management maintains the allowance for loan and lease losses at a level that it considers sufficient to absorb probable loan and lease losses inherent in the portfolio. Management determines the adequacy of the allowance based on historical loss experience as well as other significant factors such as composition of the portfolio, economic conditions, geographic footprint, the results of periodic internal and external evaluations of delinquent, nonaccrual and classified loans and any other adverse situations that may affect a specific borrower's ability to repay (including the timing of future payments). This evaluation is inherently subjective as it requires utilizing material estimates that may be susceptible to significant change. In the commercial portfolio, which includes commercial loans, construction and commercial real estate loans and lease financing, impaired loan relationships greater than $250,000 are evaluated to determine the need for a specific allowance based on the borrower's overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. Loans are considered impaired when, in the judgment of management, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The allowance for non-impaired commercial loans and impaired commercial loan relationships less than $250,000 includes a process of estimating the probable losses inherent in the portfolio by category, based on First Financial's internal system of credit risk ratings and historical loss data. These estimates may also be adjusted for management's estimate of probable losses on specific loan types dependent upon trends in the values of the underlying collateral, delinquent and nonaccrual loans, prevailing economic conditions, changes in lending strategies and other influencing factors. With the exception of loans modified as TDRs, consumer loans are evaluated by loan type (i.e. residential real estate, installment, etc.), as these loans exhibit homogeneous characteristics. The allowance for consumer loans, which includes residential real estate, installment, home equity, credit card loans and overdrafts, is established by estimating losses inherent in each particular category of consumer loans. The estimate of losses is primarily based on historical loss rates for each category, as well as trends in delinquent and nonaccrual loans, prevailing economic conditions and other significant influencing factors. Consumer loans modified as TDRs greater than $100,000 are individually reviewed to determine if a specific allowance is necessary. There were no material changes to First Financial's accounting policies or methodology related to the allowance for loan and lease losses during the first six months of 2013, however certain modifications were made to the estimation process in the third quarter of 2012 to place greater emphasis on quantitative factors such as historical loan losses and less emphasis on qualitative factors. This resulted in a shift in the allocation of the allowance between certain consumer and commercial loan types but had no significant impact on the total allowance for loan and lease losses at June 30, 2013. The allowance is increased by provision expense and decreased by actual charge-offs, net of recoveries of amounts previously charged-off. First Financial's policy is to charge-off all or a portion of a loan when, in management's opinion, it is unlikely to collect the principal amount owed in full either through payments from the borrower or from the liquidation of collateral. |
Covered Loans
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Loans and Leases Receivable, Real Estate Acquired Through Foreclosure, Policy | Covered OREO is comprised of properties acquired by the Company through the loan foreclosure or repossession process, or other resolution activities that result in partial or total satisfaction of problem covered loans. These properties remain subject to loss sharing agreements whereby the FDIC reimburses First Financial for the majority of any losses incurred. The acquired properties are recorded at the lower of cost or fair value upon acquisition. Losses arising at the time of acquisition of such properties are charged against the allowance for loan and lease losses. Subsequent write-downs in the carrying value of covered OREO properties are expensed as incurred. Estimated reimbursements due from the FDIC under loss sharing agreements related to any losses upon acquisition or subsequent write-downs in the carrying value of covered OREO are recorded as noninterest income and an increase to the FDIC indemnification asset in the same period. Improvements to the properties may be capitalized if the improvements contribute to the overall value of the property, but may not be capitalized in excess of the net realizable value of the property. |
Loans and Leases Receivable, Allowance for Loan Losses Policy | First Financial performs periodic valuation procedures to re-estimate the expected cash flows on covered loans accounted for under FASB ASC Topic 310-30 and compare the present value of expected cash flows to the carrying value of the loans at the pool level. In order to estimate expected cash flows, First Financial specifically reviews a sample of these covered loans to assist in the determination of appropriate probability of default and loss given default assumptions to be applied to the remainder of the portfolio. The estimate of expected cash flows may also be adjusted for management's estimate of probable losses on specific loan types dependent upon trends in observable market and industry data, such as prepayment speeds and collateral values. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change. |
Covered Loans | Loans Accounted for Under FASB ASC Topic 310-30
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Loans and Leases Receivable, Nonperforming Loan and Lease, Policy | Covered purchased impaired loans are classified as performing, even though they may be contractually past due, as any nonpayment of contractual principal or interest is considered in the periodic re-estimation of expected cash flows and is included in the resulting recognition of current period covered loan loss provision or prospective yield adjustments. |
Covered Loans | Loans Excluded from FASB ASC Topic 310-30
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Loans and Leases Receivable, Nonperforming Loan and Lease, Policy | Similar to uncovered loans, covered loans accounted for outside FASB ASC Topic 310-30 are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful or when principal or interest payments are ninety days or more past due. Generally, these loans are placed on nonaccrual status due to the continued failure to adhere to contractual payment terms by the borrower coupled with other pertinent factors, such as insufficient collateral value. The accrual of interest income is discontinued and previously accrued, but unpaid interest is reversed when a loan is placed in nonaccrual status. Any payments received while a loan is in nonaccrual status are applied as a reduction to the carrying value of the loan. A loan may be returned to accrual status if all contractual payments have been received and collection of future principal and interest payments is no longer doubtful. |
Fair Value Hedges
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Derivatives, Methods of Accounting, Hedging Derivatives | Fair Value Hedges. First Financial utilizes interest rate swaps designated as fair value hedges as a means to offer commercial borrowers products that meet their needs, but are also designed to achieve First Financial’s desired interest rate risk profile. First Financial accomplishes this by entering into swap agreements with commercial borrowers and simultaneously entering into offsetting swap agreements, with substantially matching terms, with institutional counterparties. These interest rate swap agreements generally involve the receipt by First Financial of floating rate amounts from counterparties in exchange for payments to these counterparties by First Financial of fixed rate amounts received from commercial borrowers over the life of the agreements. These interest rate swap agreements do not involve an exchange of the underlying principal or notional amount. This results in First Financial’s loan customers receiving fixed rate funding, while providing First Financial with a floating rate asset. First Financial's matched interest rate swaps economically hedge offsetting "receive fixed" and "pay fixed" exposures, but do not qualify for hedge accounting. The net interest receivable or payable on matched interest rate swaps is accrued and recognized as an adjustment to the interest income of the hedged item. The fair value of matched interest rate swaps is included within Accrued interest and other assets and Accrued interest and other liabilities on the Consolidated Balance Sheets. For the unmatched, pay fixed interest rate swaps, which qualify for hedge accounting, the corresponding fair-value adjustment is included on the Consolidated Balance Sheets in the carrying value of the hedged item. The net interest receivable or payable on unmatched interest rate swaps is accrued and recognized as an adjustment to the interest income of the hedged item. Gains and losses from derivatives not considered effective in hedging the change in fair value of the hedged item, if any, are recognized in income immediately. |
Cash Flow Hedges
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Derivatives, Methods of Accounting, Hedging Derivatives | Cash Flow Hedges. First Financial utilizes interest rate swaps designated as cash flow hedges to manage the variability of cash flows, primarily net interest income, attributable to changes in interest rates. The net interest receivable or payable on an interest rate swap designated as a cash flow hedge is accrued and recognized as an adjustment to interest income or interest expense. The fair value of interest rate swaps is included within accrued interest and other liabilities on the Consolidated Balance Sheets. Changes in the fair value of interest rate swaps are included in accumulated other comprehensive income (loss). Gains and losses from derivatives not considered effective in hedging the cash flows related to the hedged items, if any, are recognized in income immediately. |
ALLOWANCE FOR LOAN AND LEASE LOSSES - Allowance for Loan and Lease Losses on Covered Loans for the Previous Five Quarters (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||||
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Jun. 30, 2013
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Mar. 31, 2013
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Dec. 31, 2012
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Sep. 30, 2012
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Receivables [Abstract] | |||||||
Balance at beginning of period | $ 45,496 | $ 45,190 | $ 48,895 | $ 48,327 | $ 46,156 | $ 45,190 | $ 42,835 |
Provision for loan and lease losses | (8,283) | 9,042 | 5,283 | 6,622 | 6,047 | 759 | 18,998 |
Loans charged-off | (4,681) | (9,684) | (9,568) | (9,058) | (5,163) | (14,365) | (15,281) |
Recoveries | 429 | 948 | 580 | 3,004 | 1,287 | 1,377 | 1,775 |
Balance at end of period | $ 32,961 | $ 45,496 | $ 45,190 | $ 48,895 | $ 48,327 | $ 32,961 | $ 48,327 |
ALLOWANCE FOR LOAN AND LEASE LOSSES
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN AND LEASE LOSSES | ALLOWANCE FOR LOAN AND LEASE LOSSES Loans - excluding covered loans. For each reporting period, management maintains the allowance for loan and lease losses at a level that it considers sufficient to absorb probable loan and lease losses inherent in the portfolio. Management determines the adequacy of the allowance based on historical loss experience as well as other significant factors such as composition of the portfolio, economic conditions, geographic footprint, the results of periodic internal and external evaluations of delinquent, nonaccrual and classified loans and any other adverse situations that may affect a specific borrower's ability to repay (including the timing of future payments). This evaluation is inherently subjective as it requires utilizing material estimates that may be susceptible to significant change. In the commercial portfolio, which includes commercial loans, construction and commercial real estate loans and lease financing, impaired loan relationships greater than $250,000 are evaluated to determine the need for a specific allowance based on the borrower's overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. Loans are considered impaired when, in the judgment of management, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The allowance for non-impaired commercial loans and impaired commercial loan relationships less than $250,000 includes a process of estimating the probable losses inherent in the portfolio by category, based on First Financial's internal system of credit risk ratings and historical loss data. These estimates may also be adjusted for management's estimate of probable losses on specific loan types dependent upon trends in the values of the underlying collateral, delinquent and nonaccrual loans, prevailing economic conditions, changes in lending strategies and other influencing factors. With the exception of loans modified as TDRs, consumer loans are evaluated by loan type (i.e. residential real estate, installment, etc.), as these loans exhibit homogeneous characteristics. The allowance for consumer loans, which includes residential real estate, installment, home equity, credit card loans and overdrafts, is established by estimating losses inherent in each particular category of consumer loans. The estimate of losses is primarily based on historical loss rates for each category, as well as trends in delinquent and nonaccrual loans, prevailing economic conditions and other significant influencing factors. Consumer loans modified as TDRs greater than $100,000 are individually reviewed to determine if a specific allowance is necessary. There were no material changes to First Financial's accounting policies or methodology related to the allowance for loan and lease losses during the first six months of 2013, however certain modifications were made to the estimation process in the third quarter of 2012 to place greater emphasis on quantitative factors such as historical loan losses and less emphasis on qualitative factors. This resulted in a shift in the allocation of the allowance between certain consumer and commercial loan types but had no significant impact on the total allowance for loan and lease losses at June 30, 2013. The allowance is increased by provision expense and decreased by actual charge-offs, net of recoveries of amounts previously charged-off. First Financial's policy is to charge-off all or a portion of a loan when, in management's opinion, it is unlikely to collect the principal amount owed in full either through payments from the borrower or from the liquidation of collateral. Changes in the allowance for loan and lease losses for the previous five quarters are presented in the table that follows:
Year-to-date changes in the allowance for loan and lease losses by loan category were as follows:
Covered Loans. In accordance with the accounting guidance for business combinations, there was no allowance brought forward on covered loans as any credit deterioration evident in the loans at the time of acquisition was included in the determination of the fair value of the loans at the acquisition date. The majority of covered loans are accounted for under FASB ASC Topic 310-30, whereby First Financial is required to periodically re-estimate the expected cash flows on the loans. For purposes of applying the guidance under FASB ASC Topic 310-30, First Financial grouped acquired loans into pools based on common risk characteristics. Generally, a decline in expected cash flows for a pool of loans is referred to as impairment and recorded as provision expense, and a related allowance for loan and lease losses on covered loans, on a discounted basis during the period. Estimated reimbursements due from the FDIC under loss sharing agreements related to any declines in expected cash flows for a pool of loans are recorded as noninterest income and an increase to the FDIC indemnification asset in the same period. Improvement in expected cash flows for a pool of loans, once any previously recorded impairment is recaptured, is recognized prospectively as an adjustment to the yield on the loans in the pool and a related adjustment to the yield on the FDIC indemnification asset. First Financial performs periodic valuation procedures to re-estimate the expected cash flows on covered loans accounted for under FASB ASC Topic 310-30 and compare the present value of expected cash flows to the carrying value of the loans at the pool level. In order to estimate expected cash flows, First Financial specifically reviews a sample of these covered loans to assist in the determination of appropriate probability of default and loss given default assumptions to be applied to the remainder of the portfolio. The estimate of expected cash flows may also be adjusted for management's estimate of probable losses on specific loan types dependent upon trends in observable market and industry data, such as prepayment speeds and collateral values. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change. During the second quarter, the Company implemented certain enhancements to its valuation methodology and the estimation of impairment to place greater emphasis on changes in total expected cash flows and less emphasis on changes in the net present value of expected cash flows. The Company recognized negative provision expense, or impairment recapture, of $8.3 million and realized net charge-offs of $4.3 million during the quarter, resulting in an allowance for covered loan losses of $33.0 million as of June 30, 2013. First Financial recognized provision expense on covered loans of $0.8 million and realized net charge-offs of $13.0 million for the first six months of 2013. For the second quarter of 2012, First Financial recognized provision expense on covered loans of $6.0 million related to net charge-offs of $3.9 million during the period. Likewise, for the first six months of 2012, the Company recognized provision expense on covered loans of $19.0 million and net charge-offs of $13.5 million. Additionally, the Company recognized loss sharing expenses of $1.6 million and $3.1 million for the second quarter of 2013 and 2012, respectively, primarily related to attorney fees, appraisal costs and delinquent taxes during the periods. The Company also recognized gains on sales of covered OREO of $2.2 million for the second quarter of 2013 and losses on covered OREO of $1.2 million for the second quarter of 2012. The payable due to the FDIC under loss sharing agreements, related to covered loan provision expenses, gains/losses on covered OREO and loss sharing expenses, of $7.4 million was recognized as negative FDIC loss sharing income and a corresponding decrease to the FDIC indemnification asset during the second quarter of 2013. The receivable due from the FDIC under loss sharing agreements of $8.3 million for the second quarter of 2012, was recognized as FDIC loss sharing income and a corresponding increase to the FDIC indemnification asset. On a year-to-date basis, First Financial recognized loss sharing expenses of $3.9 million and $4.8 million for 2013 and 2012 respectively. Similarly, on a year-to-date basis, the Company recognized gains on covered OREO of $2.4 million for 2013 and losses on covered OREO of $2.5 million for 2012. The receivable due from the FDIC under loss sharing agreements related to covered loan provision expenses, gains/losses on covered OREO and loss sharing expenses of $1.6 million for the first six months of 2013 and $21.1 million for the comparable period in 2012, was recognized as FDIC loss sharing income and a corresponding increase to the FDIC indemnification asset. The allowance for loan and lease losses on covered loans is presented in the tables below:
Changes in the allowance for loan and lease losses on covered loans for the previous five quarters were as follows:
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LOANS (excluding covered loans) - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gain (loss) on sale of other real estate owned | $ (216) | $ (313) | $ (718) | $ (1,309) |
Non Covered Loans
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Write down of other real estate owned | 189 | 285 | 891 | 1,268 |
Residential Portfolio Segment [Member] | Non Covered Loans
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Write down of other real estate owned | $ 33 | $ 103 | $ 330 | $ 128 |
LOANS (covered) - Carrying Amount of Accretable Yield for Purchased Impaired and Nonimpaired Loans (Details) (Covered Loans, USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Covered Loans
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Balance at beginning of period | $ 208,670 | $ 313,669 | $ 224,694 | $ 344,410 |
Reclassification from non-accretable difference | (8,459) | 9,058 | (708) | 23,442 |
Accretion | (15,252) | (24,025) | (33,199) | (49,944) |
Other net activity | (11,039) | (15,406) | (16,867) | (34,612) |
Balance at end of period | $ 173,920 | $ 283,296 | $ 173,920 | $ 283,296 |
BORROWINGS (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-term Debt [Table Text Block] | The following is a summary of long-term debt:
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DERIVATIVES (Tables)
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Derivative Financial Instruments by Nature of Underlying Asset or Liability | The following table summarizes the notional values of derivative financial instruments utilized by First Financial by the nature of the underlying asset or liability:
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Summary of Derivative Financial Instruments and Balances | The following table summarizes the derivative financial instruments utilized by First Financial and their balances:
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Disclosure by Type of Financial Instrument [Table Text Block] | The following table discloses the gross and net amounts of liabilities recognized in the Consolidated Balance Sheets:
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Derivative Financial Instruments, Average Remaining Maturity and the Weighted-Average Interest Rates being Paid and Received | The following table details the derivative financial instruments, the average remaining maturities and the weighted-average interest rates being paid and received by First Financial at June 30, 2013:
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Location and Amounts Recognized for Fair Value Hedges | The following table details the location and amounts recognized for fair value hedges:
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BORROWINGS Borrowings - - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
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Dec. 31, 2012
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Jun. 30, 2013
Maximum
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Debt Instrument [Line Items] | |||
Federal Home Loan Bank short-term borrowings | $ 505,900 | $ 502,000 | |
Securities Sold under Agreements to Repurchase | $ 65,000 | $ 65,000 | |
Securities Sold under Agreements to Repurchase, Remaining Contractual Term | 3 years | ||
Assets Sold under Agreements to Repurchase, Interest Rate | 3.50% | 3.50% |
EARNINGS PER COMMON SHARE (Tables)
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share:
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DERIVATIVES - Additional Information (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Sep. 30, 2012
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Jun. 30, 2013
entity
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Dec. 31, 2012
entity
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Jul. 02, 2012
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Derivative [Line Items] | ||||
Maximum derivative notional position as a percentage of assets | 35.00% | |||
Maximum credit exposure as a percentage of capital | 3.00% | |||
Maximum single counterparty credit risk exposure | $ 20,000,000 | |||
Total counterparty notional amount outstanding | 495,400,000 | 509,100,000 | ||
Number of counterparties | 8 | 8 | ||
Outstanding liability from counterparty contracts | 12,600,000 | 26,000,000 | ||
Interest-bearing deposit swap | 35,000,000 | |||
Credit Derivative Term 1 | 7 years | |||
Fixed to floating interest rate swap [Member]
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Derivative [Line Items] | ||||
Derivative Assets (Liabilities), at Fair Value, Net | $ 1,100,000 | $ 200,000 |
EMPLOYEE BENEFIT PLANS (Tables)
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plan Amounts Recognized in the Consolidated Balance Sheets and Consolidated Statements of Income | The following table sets forth information concerning amounts recognized in First Financial’s Consolidated Balance Sheets and Consolidated Statements of Income:
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ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in the Allowance for Loan and Lease Losses (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
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Jun. 30, 2013
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Mar. 31, 2013
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Dec. 31, 2012
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Sep. 30, 2012
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
Non Covered Loans
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Dec. 31, 2012
Non Covered Loans
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Jun. 30, 2013
Commercial
Non Covered Loans
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Dec. 31, 2012
Commercial
Non Covered Loans
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Jun. 30, 2013
Real estate-construction
Non Covered Loans
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Dec. 31, 2012
Real estate-construction
Non Covered Loans
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Jun. 30, 2013
Real estate-commercial
Non Covered Loans
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Dec. 31, 2012
Real estate-commercial
Non Covered Loans
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Jun. 30, 2013
Real estate-residential
Non Covered Loans
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Dec. 31, 2012
Real estate-residential
Non Covered Loans
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Jun. 30, 2013
Installment
Non Covered Loans
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Dec. 31, 2012
Installment
Non Covered Loans
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Jun. 30, 2013
Home equity
Non Covered Loans
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Dec. 31, 2012
Home equity
Non Covered Loans
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Jun. 30, 2013
All other
Non Covered Loans
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Dec. 31, 2012
All other
Non Covered Loans
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Allowance for loan and lease losses: | |||||||||||||||||||||||
Balance at beginning of period | $ 48,306 | $ 47,777 | $ 49,192 | $ 50,952 | $ 49,437 | $ 47,777 | $ 52,576 | $ 47,777 | $ 52,576 | $ 7,926 | $ 10,289 | $ 3,268 | $ 4,424 | $ 24,151 | $ 18,228 | $ 3,599 | $ 4,994 | $ 522 | $ 1,659 | $ 5,173 | $ 10,751 | $ 3,138 | $ 2,231 |
Provision for loan and lease losses | 2,409 | 3,041 | 3,882 | 3,613 | 8,364 | 5,450 | 11,622 | 5,450 | 19,117 | 2,144 | 1,556 | (1,655) | 1,528 | 2,934 | 16,670 | 613 | 346 | (136) | (883) | 1,013 | (2,032) | 537 | 1,932 |
Gross charge-offs | 4,194 | 3,210 | 5,548 | 5,804 | 7,138 | 7,404 | 13,960 | 7,404 | 25,312 | 1,640 | 4,312 | 0 | 2,684 | 3,039 | 11,012 | 549 | 1,814 | 197 | 577 | 1,292 | 3,661 | 687 | 1,252 |
Recoveries | 526 | 698 | 251 | 431 | 289 | 1,224 | 714 | 1,224 | 1,396 | 386 | 393 | 136 | 0 | 96 | 265 | 9 | 73 | 187 | 323 | 277 | 115 | 133 | 227 |
Total net charge-offs | 6,180 | 23,916 | 1,254 | 3,919 | (136) | 2,684 | 2,943 | 10,747 | 540 | 1,741 | 10 | 254 | 1,015 | 3,546 | 554 | 1,025 | |||||||
Balance at end of period | 47,047 | 48,306 | 47,777 | 49,192 | 50,952 | 47,047 | 50,952 | 47,047 | 47,777 | 8,816 | 7,926 | 1,749 | 3,268 | 24,142 | 24,151 | 3,672 | 3,599 | 376 | 522 | 5,171 | 5,173 | 3,121 | 3,138 |
Ending allowance on loans individually evaluated for impairment | 7,997 | 9,528 | 1,076 | 1,151 | 35 | 838 | 6,158 | 7,155 | 348 | 290 | 0 | 0 | 2 | 2 | 378 | 92 | |||||||
Ending allowance on loans collectively evaluated for impairment | 39,050 | 38,249 | 7,740 | 6,775 | 1,714 | 2,430 | 17,984 | 16,996 | 3,324 | 3,309 | 376 | 522 | 5,169 | 5,171 | 2,743 | 3,046 | |||||||
Loans and Leases: | |||||||||||||||||||||||
Ending balance of loans individually evaluated for impairment | 55,301 | 57,360 | 14,450 | 16,661 | 1,104 | 2,076 | 35,082 | 35,422 | 3,652 | 2,604 | 0 | 0 | 517 | 101 | 496 | 496 | |||||||
Ending balance of loans collectively evaluated for impairment | 3,326,827 | 3,121,704 | 925,970 | 844,372 | 96,142 | 71,441 | 1,442,144 | 1,381,586 | 339,364 | 315,606 | 50,781 | 56,810 | 369,689 | 367,399 | 102,737 | 84,490 | |||||||
Loans and Leases Receivable, Net of Deferred Income | $ 3,382,128 | $ 3,179,064 | $ 3,382,128 | $ 3,382,128 | $ 3,179,064 | $ 940,420 | $ 861,033 | $ 97,246 | $ 73,517 | $ 1,477,226 | $ 1,417,008 | $ 343,016 | $ 318,210 | $ 50,781 | $ 56,810 | $ 370,206 | $ 367,500 | $ 103,233 | $ 84,986 |
FAIR VALUE DISCLOSURES - Summary of Financial Assets and Liabilities Measure at Fair Value on a Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Assets | ||
Derivatives | $ 15,497 | $ 24,135 |
Fair Value, Measurements, Recurring
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Assets | ||
Derivatives | 0 | 0 |
Available-for-sale investment securities | 884,694 | 1,032,096 |
Total | 884,694 | 1,032,096 |
Liabilities | ||
Derivatives | 1,172 | 2,517 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Level 1
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Assets | ||
Derivatives | 0 | 0 |
Available-for-sale investment securities | 189 | 144 |
Total | 189 | 144 |
Liabilities | ||
Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Level 2
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Assets | ||
Derivatives | 15,497 | 24,135 |
Available-for-sale investment securities | 884,505 | 1,031,952 |
Total | 900,002 | 1,056,087 |
Liabilities | ||
Derivatives | 16,669 | 26,652 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Level 3
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Assets | ||
Derivatives | 0 | 0 |
Available-for-sale investment securities | 0 | 0 |
Total | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Netting Adjustments
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Assets | ||
Derivatives | (15,497) | (24,135) |
Available-for-sale investment securities | 0 | 0 |
Total | (15,497) | (24,135) |
Liabilities | ||
Derivatives | $ (15,497) | $ (24,135) |
ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in the Allowance for Loan and Lease Losses for the Previous Five Quarters (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||||
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Jun. 30, 2013
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Mar. 31, 2013
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Dec. 31, 2012
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Sep. 30, 2012
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Receivables [Abstract] | |||||||
Balance at beginning of period | $ 48,306 | $ 47,777 | $ 49,192 | $ 50,952 | $ 49,437 | $ 47,777 | $ 52,576 |
Provision for loan and lease losses - uncovered | 2,409 | 3,041 | 3,882 | 3,613 | 8,364 | 5,450 | 11,622 |
Loans charged off | (4,194) | (3,210) | (5,548) | (5,804) | (7,138) | (7,404) | (13,960) |
Recoveries | 526 | 698 | 251 | 431 | 289 | 1,224 | 714 |
Balance at end of period | $ 47,047 | $ 48,306 | $ 47,777 | $ 49,192 | $ 50,952 | $ 47,047 | $ 50,952 |
Percentage of Credit Loss Allowance to Loans | 1.39% | 1.49% | 1.50% | 1.60% | 1.69% | 1.39% | 1.69% |
EMPLOYEE BENEFIT PLANS - Additional Information (Details) (USD $)
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3 Months Ended | 6 Months Ended | 12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Compensation and Retirement Disclosure [Abstract] | |||||
Pension Contributions | $ 0 | ||||
Pension settlement charges | 4,316,000 | 0 | 4,316,000 | 0 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Tax | (17,369,000) | (1,140,000) | |||
Pension Expense | 4,170,000 | (142,000) | 4,185,000 | (285,000) | |
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | $ 0 | $ 0 |
INVESTMENTS (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Held-To-Maturity and Available-For-Sale Investment Securities | The following is a summary of held-to-maturity and available-for-sale investment securities as of June 30, 2013:
The following is a summary of held-to-maturity and available-for-sale investment securities as of December 31, 2012:
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Summary of Investment Securities by Estimated Maturity | The following is a summary of investment securities by estimated maturity as of June 30, 2013:
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Age of Gross Unrealized Losses and Associated Fair Value by Investment Category | The following tables present the age of gross unrealized losses and associated fair value by investment category:
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GOODWILL AND OTHER INTANGIBLE ASSETS
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6 Months Ended |
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Jun. 30, 2013
|
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Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill. Assets and liabilities of acquired entities are recorded at their estimated fair values as of the acquisition date. The excess cost of the acquisition over the fair value of net assets acquired is recorded as goodwill. Goodwill is not amortized, but is measured for impairment on an annual basis as of October 1 of each year or whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. First Financial performed its most recent annual impairment test as of October 1, 2012 and no impairment was indicated. As of June 30, 2013, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value. First Financial had goodwill of $95.1 million as of June 30, 2013 and December 31, 2012. Other intangible assets. Other intangible assets consist primarily of core deposit intangibles. Core deposit intangibles are recorded at their estimated fair value as of the acquisition date and are then amortized on an accelerated basis over their estimated useful lives. Core deposit intangibles were $6.6 million and $7.4 million as of June 30, 2013 and December 31, 2012, respectively. First Financial's core deposit intangibles have an estimated weighted average remaining life of 7.3 years. Amortization expense for the three months ended June 30, 2013 and 2012 was $0.4 million and $0.8 million, respectively. Amortization expense recognized on intangible assets for the six months ended June 30, 2013 and 2012, was $0.8 million and $1.3 million, respectively. |
FAIR VALUE DISCLOSURES - Summary of Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) (Fair Value, Measurements, Nonrecurring, USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
|
---|---|---|
Fair Value Measurements Using Level 1
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Assets | ||
Impaired loans | $ 0 | $ 0 |
Other Real Estate Owned, Fair Value Disclosure | 0 | 0 |
Covered Other Real Estate Owned, Fair Value Disclosure | 0 | 0 |
Fair Value Measurements Using Level 2
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Assets | ||
Impaired loans | 0 | 0 |
Other Real Estate Owned, Fair Value Disclosure | 0 | 0 |
Covered Other Real Estate Owned, Fair Value Disclosure | 0 | 0 |
Fair Value Measurements Using Level 3
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Assets | ||
Impaired loans | 14,600 | 19,564 |
Other Real Estate Owned, Fair Value Disclosure | 6,396 | 5,651 |
Covered Other Real Estate Owned, Fair Value Disclosure | $ 8,706 | $ 14,059 |
BASIS OF PRESENTATION
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6 Months Ended |
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Jun. 30, 2013
|
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The Consolidated Financial Statements of First Financial, a bank holding company principally serving Ohio, Indiana and Kentucky, include the accounts and operations of First Financial and its wholly-owned subsidiary – First Financial Bank, N.A. (First Financial Bank or the Bank). All significant intercompany transactions and accounts have been eliminated in consolidation. Certain reclassifications of prior periods’ amounts have been made to conform to the current period’s presentation and had no effect on net earnings. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates, assumptions and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes. Actual realized amounts could differ materially from those estimates. These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and serve to update the First Financial Bancorp. Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2012. These interim financial statements may not include all information and notes necessary to constitute a complete set of financial statements under GAAP applicable to annual periods and accordingly should be read in conjunction with the financial information contained in the Form 10-K. Management believes these unaudited consolidated financial statements reflect all adjustments of a normal recurring nature which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. The Consolidated Balance Sheet as of December 31, 2012, has been derived from the audited financial statements in the Company’s 2012 Form 10-K. |
DERIVATIVES - Summary of Derivative Financial Instruments by Nature of Underlying Asset or Liability (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Derivative [Line Items] | ||
Notional Amount | $ 910,175 | $ 935,493 |
Fair Value Hedges
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Derivative [Line Items] | ||
Notional Amount | $ 910,175 | $ 935,493 |
LOANS (excluding covered loans) (Tables) (Non Covered Loans)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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Non Covered Loans
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Commercial and Consumer Credit Exposure by Risk Attribute | Commercial and consumer credit exposure by risk attribute was as follows:
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Loan Delinquency, including Nonaccrual Loans | Loan delinquency, including nonaccrual loans, was as follows:
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Loans Restructured During Period | The following tables provide information on loan modifications classified as TDRs during the three and six months ended June 30, 2013 and 2012.
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Loans Restructured, Modifications | The following table provides information on how TDRs were modified during the three and six months ended June 30, 2013 and 2012.
(1) Includes covenant modifications and other concessions, or combination of concessions, that do not consist of interest rate adjustments, forbearance and maturity extensions (2) Balances are as of period end |
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Loan Restructuring, Loans with a Payment Default Within 12 Months of Loan Modification | The following table provides information on TDRs for which there was a payment default during the period that occurred within twelve months of the loan modification:
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Nonaccrual, Restructured and Impaired Loans | Loans placed on nonaccrual status and TDRs are considered impaired. The following table provides information on nonaccrual, TDRs and total impaired loans.
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Investment in Impaired Loans | First Financial's investment in impaired loans was as follows:
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Changes in Other Real Estate Owned | Changes in OREO were as follows:
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FAIR VALUE DISCLOSURES (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Values of Financial Instruments | The estimated fair values of First Financial’s financial instruments not measured at fair value on a recurring or nonrecurring basis in the consolidated financial statements were as follows:
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Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The financial assets and liabilities measured at fair value on a recurring basis in the consolidated financial statements were as follows:
(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. |
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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.
(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 and borrower records, discounted as appropriate (Level 3). |
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - Employee benefit plan amounts recognized in the Consolidated Balance Sheets and Consolidated Statements of Income (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Compensation and Retirement Disclosure [Abstract] | ||||
Service cost | $ 898 | $ 833 | $ 1,873 | $ 1,665 |
Interest cost | 567 | 690 | 1,186 | 1,380 |
Expected return on plan assets | (2,230) | (2,235) | (4,524) | (4,470) |
Amortization of prior service cost | (107) | (105) | (212) | (210) |
Defined Benefit Plan, Amortization of Gains (Losses) | 726 | 675 | 1,546 | 1,350 |
Pension settlement charges | 4,316 | 0 | 4,316 | 0 |
Net periodic benefit cost (income) | $ 4,170 | $ (142) | $ 4,185 | $ (285) |
LOANS (covered) - Additional Information (Details) (Covered Loans, USD $)
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3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
Loans Accounted for Under FASB ASC Topic 310-30
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Dec. 31, 2012
Loans Accounted for Under FASB ASC Topic 310-30
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Outstanding balance including contractual principal, interest, fees, and penalties | $ 900,000,000 | $ 1,100,000,000 | ||||
Reclassification from non-accretable difference | (8,459,000) | 9,058,000 | (708,000) | 23,442,000 | ||
Loans, Federal Deposit Insurance Corporation Reimbursement Percentage on Losses Below Threshold | 80.00% | |||||
Loans, Federal Deposit Insurance Corporation Reimbursement Percentage on Losses Above Threshold | 95.00% | |||||
Contractual interest not yet accrued | $ 187,100,000 | $ 220,400,000 |