FAIR VALUE DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2015

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:



	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
September 30, 2015
Financial assets
Cash and short-term investments	$	136,489	$	136,489	$	136,489	$	0	$	0
Investment securities held-to-maturity	756,035		770,512		0		770,512		0
Other investments	53,431		53,431		0		53,431		0
Loans held for sale	26,287		26,287		0		26,287		0
Loans and leases, net of ALLL	5,162,731		5,256,031		0		0		5,256,031
FDIC indemnification asset	18,931		10,547		0		0		10,547

Financial liabilities
Deposits
Noninterest-bearing	$	1,330,905	$	1,330,905	$	0	$	1,330,905	$	0
Interest-bearing demand	1,330,673		1,330,673		0		1,330,673		0
Savings	1,979,627		1,979,627		0		1,979,627		0
Time	1,440,223		1,440,365		0		1,440,365		0
Total deposits	6,081,428		6,081,570		0		6,081,570		0
Short-term borrowings	763,517		763,517		763,517		0		0
Long-term debt	119,515		120,865		0		120,865		0



	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2014
Financial assets
Cash and short-term investments	$	132,752	$	132,752	$	132,752	$	0	$	0
Investment securities held-to-maturity	867,996		874,749		0		874,749		0
Other investments	52,626		52,626		0		52,626		0
Loans held for sale	11,005		11,005		0		11,005		0
Loans and leases, net of ALLL	4,724,377		4,763,619		0		0		4,763,619
FDIC indemnification asset	22,666		12,449		0		0		12,449

Financial liabilities
Deposits
Noninterest-bearing	$	1,285,527	$	1,285,527	$	0	$	1,285,527	$	0
Interest-bearing demand	1,225,378		1,225,378		0		1,225,378		0
Savings	1,889,473		1,889,473		0		1,889,473		0
Time	1,255,364		1,254,070		0		1,254,070		0
Total deposits	5,655,742		5,654,448		0		5,654,448		0
Short-term borrowings	661,392		661,392		661,392		0		0
Long-term debt	48,241		49,674		0		49,674		0

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:



	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
September 30, 2015
Assets
Derivatives	$	0	$	18,855	$	0	$	18,855
Investment securities available-for-sale	8,595		1,061,072		0		1,069,667
Total	$	8,595	$	1,079,927	$	0	$	1,088,522

Liabilities
Derivatives	$	0	$	18,920	$	0	$	18,920



	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
December 31, 2014
Assets
Derivatives	$	0	$	11,399	$	0	$	11,399
Investment securities available-for-sale	8,406		832,062		0		840,468
Total	$	8,406	$	843,461	$	0	$	851,867

Liabilities
Derivatives	$	0	$	13,662	$	0	$	13,662

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.



	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3
September 30, 2015
Assets
Impaired loans ⁽¹⁾	$	0	$	0	$	8,456
OREO	0		0		9,996



	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2014
Assets
Impaired loans ⁽¹⁾	$	0	$	0	$	14,096
OREO	0		0		13,094

(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), observable market data for similar assets and liabilities (Level 2), and independent third party valuations and borrower records, discounted as appropriate (Level 3).