LOANS AND LEASES (Tables)

9 Months Ended

Sep. 30, 2015

Accounts, Notes, Loans and Financing Receivable [Line Items]

Carrying Amount of Accretable Yield for Purchased Impaired and Nonimpaired Loans

Changes in the carrying amount of accretable difference for purchased impaired loans were as follows:



	Three months ended						Nine months ended
	September 30,						September 30,
(Dollars in thousands)	2015			2014			2015			2014
Balance at beginning of period	$	78,945		$	127,764		$	106,622		$	133,671
Reclassification from/(to) nonaccretable difference	76			(2,295		)	(2,048		)	19,864
Accretion	(4,945		)	(8,158		)	(17,046		)	(26,808		)
Other net activity ⁽¹⁾	(4,746		)	(4,250		)	(18,198		)	(13,666		)
Balance at end of period	$	69,330		$	113,061		$	69,330		$	113,061

Commercial and Consumer Credit Exposure by Risk Attribute

Commercial and consumer credit exposure by risk attribute was as follows:



	As of September 30, 2015
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,571,656	$	275,197	$	2,081,930	$	81,053	$	4,009,836
Special Mention	40,433		130		20,414		1,626		62,603
Substandard	25,378		913		67,318		0		93,609
Doubtful	0		0		0		0		0
Total	$	1,637,467	$	276,240	$	2,169,662	$	82,679	$	4,166,048



(Dollars in thousands)	Real Estate Residential		Installment		Home Equity		Other		Total
Performing	$	497,643	$	39,547	$	457,893	$	39,759	$	1,034,842
Nonperforming	9,010		427		5,736		0		15,173
Total	$	506,653	$	39,974	$	463,629	$	39,759	$	1,050,015



	As of December 31, 2014
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,265,116	$	195,787	$	2,027,897	$	75,839	$	3,564,639
Special Mention	30,903		0		25,928		1,728		58,559
Substandard	19,095		1,784		86,842		0		107,721
Doubtful	0		0		0		0		0
Total	$	1,315,114	$	197,571	$	2,140,667	$	77,567	$	3,730,919



(Dollars in thousands)	Real Estate Residential		Installment		Home Equity		Other		Total
Performing	$	490,314	$	46,806	$	452,281	$	38,475	$	1,027,876
Nonperforming	11,580		514		6,346		0		18,440
Total	$	501,894	$	47,320	$	458,627	$	38,475	$	1,046,316

Loan Delinquency, including Nonaccrual Loans

Loan delinquency, including loans classified as nonaccrual, was as follows:



	As of September 30, 2015
(Dollars in thousands)	30 – 59 days past due		60 – 89 days past due		> 90 days past due		Total past due		Current		Subtotal		Purchased impaired		Total		> 90 days past due and still accruing
Loans
Commercial	$	949	$	887	$	4,125	$	5,961	$	1,622,274	$	1,628,235	$	9,232	$	1,637,467	$	0
Real estate - construction	0		0		79		79		275,351		275,430		810		276,240		0
Real estate - commercial	1,094		1,120		14,510		16,724		2,018,164		2,034,888		134,774		2,169,662		0
Real estate - residential	1,964		391		2,365		4,720		442,154		446,874		59,779		506,653		0
Installment	20		50		257		327		37,531		37,858		2,116		39,974		0
Home equity	512		150		3,309		3,971		458,574		462,545		1,084		463,629		0
Other	684		131		58		873		121,565		122,438		0		122,438		58
Total	$	5,223	$	2,729	$	24,703	$	32,655	$	4,975,613	$	5,008,268	$	207,795	$	5,216,063	$	58



	As of December 31, 2014
(Dollars in thousands)	30 – 59 days past due		60 – 89 days past due		> 90 days past due		Total past due		Current		Subtotal		Purchased impaired		Total		> 90 days past due and still accruing
Loans
Commercial	$	1,002	$	3,647	$	2,110	$	6,759	$	1,290,975	$	1,297,734	$	17,380	$	1,315,114	$	0
Real estate - construction	276		0		223		499		195,773		196,272		1,299		197,571		0
Real estate - commercial	8,356		838		13,952		23,146		1,944,207		1,967,353		173,314		2,140,667		0
Real estate - residential	1,198		344		4,224		5,766		426,908		432,674		69,220		501,894		0
Installment	133		17		272		422		44,235		44,657		2,663		47,320		0
Home equity	697		466		4,079		5,242		452,357		457,599		1,028		458,627		0
Other	1,133		128		216		1,477		114,565		116,042		0		116,042		216
Total	$	12,795	$	5,440	$	25,076	$	43,311	$	4,469,020	$	4,512,331	$	264,904	$	4,777,235	$	216

Loans Restructured During Period

The following tables provide information on loan modifications classified as TDRs during the three and nine months ended September 30, 2015 and 2014:



	Three months ended
	September 30, 2015					September 30, 2014
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial	5	$	171	$	166	6	$	3,712	$	3,384
Real estate - construction	0	0		0		0	0		0
Real estate - commercial	2	2,159		2,000		2	375		373
Real estate - residential	6	920		901		7	322		264
Installment	2	50		50		3	6		6
Home equity	6	231		229		6	126		125
Total	21	$	3,531	$	3,346	24	$	4,541	$	4,152

	Nine months ended
	September 30, 2015					September 30, 2014
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial	27	$	1,686	$	1,676	11	$	3,938	$	3,594
Real estate - construction	0	0		0		0	0		0
Real estate - commercial	14	17,499		13,734		11	2,583		2,453
Real estate - residential	9	1,282		1,228		30	1,712		1,527
Installment	9	96		96		6	21		19
Home equity	16	2,281		1,768		26	791		758
Total	75	$	22,844	$	18,502	84	$	9,045	$	8,351

Loans Restructured, Modifications

The following table provides information on how TDRs were modified during the three and nine months ended September 30, 2015 and 2014.



	Three months ended				Nine months ended
	September 30,				September 30,
(Dollars in thousands)	2015		2014		2015		2014
Extended maturities	$	2,166	$	3,505	$	12,827	$	4,402
Adjusted interest rates	0		0		0		301
Combination of rate and maturity changes	0		402		1,219		1,643
Forbearance	0		0		260		320
Other ⁽¹⁾	1,180		245		4,196		1,685
Total	$	3,346	$	4,152	$	18,502	$	8,351

(1) Includes covenant modifications and other concessions, or combination of concessions, that do not consist of interest rate adjustments, forbearance and maturity extensions

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:



	Three months ended
	September 30, 2015			September 30, 2014
(Dollars in thousands)	Number of loans	Period end balance		Number of loans	Period end balance
Commercial	2	$	344	0	$	0
Real estate - construction	0	0		0	0
Real estate - commercial	0	0		0	0
Real estate - residential	0	0		1	1
Installment	0	0		0	0
Home equity	1	14		0	0
Total	3	$	358	1	$	1

	Nine months ended
	September 30, 2015			September 30, 2014
(Dollars in thousands)	Number of loans	Period end balance		Number of loans	Period end balance
Commercial	2	$	344	1	$	143
Real estate - construction	0	0		0	0
Real estate - commercial	4	1,146		0	0
Real estate - residential	1	73		3	28
Installment	0	0		1	0
Home equity	1	14		3	92
Total	8	$	1,577	8	$	263

Nonaccrual, Restructured and Impaired Loans

The following table provides information on nonaccrual loans, TDRs and total impaired loans.



(Dollars in thousands)	September 30, 2015		December 31, 2014
Impaired loans
Nonaccrual loans⁽¹⁾
Commercial	$	7,438	$	6,627
Real estate-construction	79		223
Real estate-commercial	17,732		27,969
Real estate-residential	4,940		7,241
Installment	321		451
Home equity	5,203		5,958
Nonaccrual loans ⁽¹⁾	35,713		48,469
Accruing troubled debt restructurings	20,226		15,928
Total impaired loans	$	55,939	$	64,397

(1) Nonaccrual loans include nonaccrual TDRs of $13.6 million and $12.3 million as of September 30, 2015 and December 31, 2014, respectively.



	Three months ended				Nine months ended
	September 30,				September 30,
(Dollars in thousands)	2015		2014		2015		2014
Interest income effect on impaired loans
Gross amount of interest that would have been recorded under original terms	$	852	$	910	$	2,750	$	2,543
Interest included in income
Nonaccrual loans	91		186		370		363
Troubled debt restructurings	168		110		436		321
Total interest included in income	259		296		806		684
Net impact on interest income	$	593	$	614	$	1,944	$	1,859

Investment in Impaired Loans

First Financial's investment in impaired loans was as follows:



	As of September 30, 2015
(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	$	9,981	$	11,848	$	0	$	8,981	$	153	$	47
Real estate - construction	79		383		0		187		0		0
Real estate - commercial	20,834		26,044		0		20,129		263		77
Real estate - residential	7,452		8,787		0		8,317		136		44
Installment	427		460		0		412		6		2
Home equity	5,635		7,503		0		5,725		58		19
Other	0		0		0		0		0		0
Total	44,408		55,025		0		43,751		616		189

Loans with an allowance recorded
Commercial	868		868		478		1,513		16		6
Real estate - construction	0		0		0		0		0		0
Real estate - commercial	9,004		9,633		938		14,072		145		54
Real estate - residential	1,558		1,570		235		1,734		27		9
Installment	0		0		0		0		0		0
Home equity	101		101		2		101		2		1
Other	0		0		0		0		0		0
Total	11,531		12,172		1,653		17,420		190		70

Total
Commercial	10,849		12,716		478		10,494		169		53
Real estate - construction	79		383		0		187		0		0
Real estate - commercial	29,838		35,677		938		34,201		408		131
Real estate - residential	9,010		10,357		235		10,051		163		53
Installment	427		460		0		412		6		2
Home equity	5,736		7,604		2		5,826		60		20
Other	0		0		0		0		0		0
Total	$	55,939	$	67,197	$	1,653	$	61,171	$	806	$	259



	As of and for the year December 31, 2014
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		Interest income recognized
Loans with no related allowance recorded
Commercial	$	7,611	$	9,284	$	0	$	7,146	$	146
Real estate - construction	223		443		0		223		0
Real estate - commercial	19,285		23,631		0		15,653		285
Real estate - residential	9,561		10,867		0		9,485		182
Installment	514		577		0		513		8
Home equity	6,246		9,041		0		5,658		85
Other	0		0		0		0		0
Total	43,440		53,843		0		38,678		706

Loans with an allowance recorded
Commercial	2,398		2,605		739		4,234		57
Real estate - construction	0		0		0		0		0
Real estate - commercial	16,439		17,662		4,002		11,471		187
Real estate - residential	2,019		2,080		310		2,088		40
Installment	0		0		0		0		0
Home equity	101		101		2		101		3
Other	0		0		0		0		0
Total	20,957		22,448		5,053		17,894		287

Total
Commercial	10,009		11,889		739		11,380		203
Real estate - construction	223		443		0		223		0
Real estate - commercial	35,724		41,293		4,002		27,124		472
Real estate - residential	11,580		12,947		310		11,573		222
Installment	514		577		0		513		8
Home equity	6,347		9,142		2		5,759		88
Other	0		0		0		0		0
Total	$	64,397	$	76,291	$	5,053	$	56,572	$	993

Changes in Other Real Estate Owned

Changes in OREO were as follows:



	Three months ended						Nine months ended
	September 30,						September 30,
(Dollars in thousands)	2015 ⁽¹⁾			2014 ⁽¹⁾			2015 ⁽¹⁾			2014 ⁽¹⁾
Balance at beginning of period	$	16,401		$	32,809		$	22,674		$	46,926
Additions
Commercial	178			883			2,745			6,211
Residential	1,405			292			3,210			1,926
Total additions	1,583			1,175			5,955			8,137
Disposals
Commercial	(852		)	(9,695		)	(9,394		)	(27,672		)
Residential	(1,708		)	(115		)	(2,844		)	(1,041		)
Total disposals	(2,560		)	(9,810		)	(12,238		)	(28,713		)
Valuation adjustment
Commercial	(183		)	(1,490		)	(963		)	(3,496		)
Residential	(54		)	(188		)	(241		)	(358		)
Total valuation adjustment	(237		)	(1,678		)	(1,204		)	(3,854		)
Balance at end of period	$	15,187		$	22,496		$	15,187		$	22,496

Indemnification Asset Rollforward

Changes in the balance of the FDIC indemnification asset and the related impact to the Consolidated Statements of Income are presented in the table that follows:



	Three months ended						Nine months ended
	September 30,						September 30,
(Dollars in thousands)	2015			2014			2015			2014			Affected Line Item in the Consolidated Statements of Income
Balance at beginning of period	$	20,338		$	30,420		$	22,666		$	45,091
Adjustments not reflected in income
Net FDIC claims (received) / paid	758			(1,423		)	2,382			(7,422		)
Adjustments reflected in income
Amortization	(1,192		)	(1,486		)	(3,562		)	(4,215		)	Interest income, other earning assets
FDIC loss sharing income	(973		)	(192		)	(2,323		)	408			Noninterest income, FDIC loss sharing income
Offset to accelerated discount	0			(3,159		)	(232		)	(9,702		)	Noninterest income, accelerated discount on covered loans
Balance at end of period	$	18,931		$	24,160		$	18,931		$	24,160