10-Q

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C.  20549

xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedMarch 31, 2016

OR

oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________

Commission file number 001-34762

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)

Registrant's telephone number, including area code   (877) 322-9530

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes     x        No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of Exchange Act).

Yes  oNo   x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding at 5/4/2016
Common stock, No par value	61,858,864

FIRST FINANCIAL BANCORP.

INDEX

	Page No.
Part I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets - March 31, 2016 (unaudited) and December 31, 2015	1
Consolidated Statements of Income - Three Months Ended March 31, 2016 and 2015 (unaudited)	2
Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2016 and 2015 (unaudited)	3
Consolidated Statements of Changes in Shareholders’ Equity - Three Months Ended March 31, 2016 and 2015 (unaudited)	4
Consolidated Statements of Cash Flows - Three Months Ended March 31, 2016 and 2015 (unaudited)	5
Notes to Consolidated Financial Statements (unaudited)	6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3 - Quantitative and Qualitative Disclosures about Market Risk	49
Item 4 - Controls and Procedures	50
Part II - OTHER INFORMATION
Item 1 - Legal Proceedings	51
Item 1A - Risk Factors	51
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 6 - Exhibits	53
Signatures	54

Glossary of Abbreviations and Acronyms

First Financial Bancorp. has identified the following list of abbreviations and acronyms that are used in the Notes to Consolidated Financial Statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations.

the Act	Private Securities Litigation Reform Act	FDIC	Federal Deposit Insurance Corporation
ALLL	Allowance for loan and lease losses	FHLB	Federal Home Loan Bank
ASC	Accounting standards codification	First Financial	First Financial Bancorp.
ASU	Accounting standards update	First Financial Bank	First Financial Bank, N.A.
ATM	Automated teller machine	Form 10-K	First Financial Bancorp. Annual Report on Form 10-K
Bank	First Financial Bank, N.A.	GAAP	U.S. Generally Accepted Accounting Principles
Basel III	Basel Committee regulatory capital reforms, Third Basel Accord	IRLC	Interest Rate Lock Commitment
BP	basis point	N/A	Not applicable
CDs	certificates of deposits	NII	Net interest income
Company	First Financial Bancorp.	Oak Street	Oak Street Holdings Corporation
ERM	Enterprise Risk Management	OREO	Other real estate owned
EVE	Economic value of equity	SEC	United States Securities and Exchange Commission
FASB	Financial Accounting Standards Board	TDR	Troubled debt restructuring
Fair Value Topic	FASB ASC Topic 825, Financial Instruments

PART I - FINANCIAL INFORMATION

ITEM I - FINANCIAL STATEMENTS

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	March 31, 2016			December 31, 2015
	(Unaudited)
Assets
Cash and due from banks	$	102,675		$	114,841
Interest-bearing deposits with other banks	15,582			33,734
Investment securities available-for-sale, at fair value (amortized cost $1,165,093at March 31, 2016 and $1,203,065 at December 31, 2015)	1,164,319			1,190,642
Investment securities held-to-maturity (fair value $718,277at March 31, 2016 and $731,951 at December 31, 2015)	702,315			726,259
Other investments	53,255			53,725
Loans held for sale	15,369			20,957
Loans and leases
Commercial and industrial	1,744,732			1,663,102
Lease financing	101,135			93,986
Real estate-construction	341,453			311,712
Real estate-commercial	2,261,857			2,258,297
Real estate-residential	508,512			512,311
Home equity	466,010			466,629
Installment	41,627			41,506
Credit card	39,283			41,217
Total loans and leases	5,504,609			5,388,760
Less:  Allowance for loan and lease losses	53,732			53,398
Net loans and leases	5,450,877			5,335,362
Premises and equipment	138,036			136,603
Goodwill and other intangibles	211,533			211,865
FDIC indemnification asset	16,256			17,630
Accrued interest and other assets	323,337			305,793
Total assets	$	8,193,554		$	8,147,411
Liabilities
Deposits
Interest-bearing	$	1,430,963		$	1,414,291
Savings	1,922,892			1,945,805
Time	1,414,313			1,406,124
Total interest-bearing deposits	4,768,168			4,766,220
Noninterest-bearing	1,408,609			1,413,404
Total deposits	6,176,777			6,179,624
Federal funds purchased and securities sold under agreements to repurchase	75,499			89,325
Federal Home Loan Bank short-term borrowings	894,400			849,100
Total short-term borrowings	969,899			938,425
Long-term debt	119,556			119,540
Total borrowed funds	1,089,455			1,057,965
Accrued interest and other liabilities	100,735			100,446
Total liabilities	7,366,967			7,338,035
Shareholders' equity
Common stock - no par value
Authorized - 160,000,000 shares; Issued - 68,730,731 shares in 2016 and 2015	567,497			571,155
Retained earnings	398,224			388,240
Accumulated other comprehensive loss	(23,209		)	(30,580		)
Treasury stock, at cost, 6,875,704shares in 2016 and 7,089,051 shares in 2015	(115,925		)	(119,439		)
Total shareholders' equity	826,587			809,376
Total liabilities and shareholders' equity	$	8,193,554		$	8,147,411

See Notes to Consolidated Financial Statements.

1

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three months ended
	March 31,
	2016			2015
Interest income
Loans, including fees	$	63,399		$	54,464
Investment securities
Taxable	11,373			9,608
Tax-exempt	1,162			1,117
Total interest on investment securities	12,535			10,725
Other earning assets	(1,139		)	(1,181		)
Total interest income	74,795			64,008
Interest expense
Deposits	5,530			4,820
Short-term borrowings	1,170			303
Long-term borrowings	1,540			299
Total interest expense	8,240			5,422
Net interest income	66,555			58,586
Provision for loan and lease losses	1,655			2,060
Net interest income after provision for loan and lease losses	64,900			56,526
Noninterest income
Service charges on deposit accounts	4,381			4,523
Trust and wealth management fees	3,440			3,634
Bankcard income	2,882			2,620
Client derivative fees	1,095			962
Net gains from sales of loans	1,181			1,464
Net gains on sales of investment securities	24			0
FDIC loss sharing income	(565		)	(1,046		)
Accelerated discount on covered/formerly covered loans	971			2,092
Other	2,103			3,364
Total noninterest income	15,512			17,613
Noninterest expenses
Salaries and employee benefits	29,615			26,941
Net occupancy	4,957			5,005
Furniture and equipment	2,213			2,153
Data processing	2,718			2,772
Marketing	1,065			888
Communication	481			570
Professional services	1,813			1,970
State intangible tax	639			577
FDIC assessments	1,132			1,090
Loss (gain) - other real estate owned	(190		)	474
Loss sharing expense	297			301
Other	5,980			5,327
Total noninterest expenses	50,720			48,068
Income before income taxes	29,692			26,071
Income tax expense	9,878			8,450
Net income	$	19,814		$	17,621
Net earnings per common share - basic	$	0.32		$	0.29
Net earnings per common share - diluted	$	0.32		$	0.29
Cash dividends declared per share	$	0.16		$	0.16
Average common shares outstanding - basic	61,036,797			61,013,489
Average common shares outstanding - diluted	61,840,247			61,731,844

See Notes to Consolidated Financial Statements.

2

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
	Three months ended
	March 31,
	2016		2015
Net income	$	19,814	$	17,621
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on investment securities arising during the period	7,043		5,008
Change in retirement obligation	200		183
Unrealized gain (loss) on derivatives	128		(816		)
Unrealized gain (loss) on foreign currency exchange	0		(20		)
Other comprehensive income (loss)	7,371		4,355
Comprehensive income	$	27,185	$	21,976
See Notes to Consolidated Financial Statements.

3

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Dollars in thousands except per share data)

(Unaudited)

	Common Stock	Common Stock			Retained			Accumulated other comprehensive			Treasury stock
	Shares	Amount			Earnings			income (loss)			Shares		Amount			Total
Balance at January 1, 2015	68,730,731	$	574,643		$	352,587		$	(21,409	)	(7,274,184	)	$	(122,050	)	$	783,771
Net income					17,621											17,621
Other comprehensive income (loss)								4,355								4,355
Cash dividends declared:
Common stock at $0.16 per share					(9,818		)									(9,818		)
Excess tax benefit on share-based compensation		99														99
Exercise of stock options, net of shares purchased		(170		)							15,217		256			86
Restricted stock awards, net of forfeitures		(4,807		)							215,123		3,577			(1,230		)
Share-based compensation expense		858														858
Balance at March 31, 2015	68,730,731	$	570,623		$	360,390		$	(17,054	)	(7,043,844	)	$	(118,217	)	$	795,742
Balance at January 1, 2016	68,730,731	$	571,155		$	388,240		$	(30,580	)	(7,089,051	)	$	(119,439	)	$	809,376
Net income					19,814											19,814
Other comprehensive income (loss)								7,371								7,371
Cash dividends declared:
Common stock at $0.16 per share					(9,830		)									(9,830		)
Excess tax benefit on share-based compensation		105														105
Exercise of stock options, net of shares purchased		(85		)							9,937		167			82
Restricted stock awards, net of forfeitures		(4,685		)							203,410		3,347			(1,338		)
Share-based compensation expense		1,007														1,007
Balance at March 31, 2016	68,730,731	$	567,497		$	398,224		$	(23,209	)	(6,875,704	)	$	(115,925	)	$	826,587

See Notes to Consolidated Financial Statements.

4

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Three months ended
	March 31,
	2016			2015
Operating activities
Net income	$	19,814		$	17,621
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses	1,655			2,060
Depreciation and amortization	3,287			3,208
Stock-based compensation expense	1,007			858
Pension expense (income)	(225		)	(300		)
Net amortization of premiums/accretion of discounts on investment securities	1,911			1,741
Gains on sales of investment securities	(24		)	0
Originations of loans held for sale	(42,935		)	(59,541		)
Net gains from sales of loans held for sale	(1,181		)	(1,464		)
Proceeds from sales of loans held for sale	49,381			56,816
Deferred income taxes	0			2,313
Decrease (increase) in interest receivable	(2,471		)	(2,354		)
Decrease (increase) in cash surrender value of life insurance	(493		)	(480		)
Decrease (increase) in indemnification asset	1,374			2,269
(Decrease) increase in interest payable	(1,353		)	0
Decrease (increase) in other assets	(15,305		)	(13,435		)
(Decrease) increase in other liabilities	(3,923		)	5,790
Net cash provided by (used in) operating activities	10,519			15,102
Investing activities
Proceeds from sales of securities available-for-sale	42,696			25
Proceeds from calls, paydowns and maturities of securities available-for-sale	31,974			26,103
Purchases of securities available-for-sale	(36,851		)	(55,005		)
Proceeds from calls, paydowns and maturities of securities held-to-maturity	22,881			27,155
Net decrease (increase) in interest-bearing deposits with other banks	18,152			(2,720		)
Net decrease (increase) in loans and leases	(117,755		)	8,883
Proceeds from disposal of other real estate owned	2,035			4,557
Purchases of premises and equipment	(4,900		)	(2,255		)
Net cash provided by (used in) investing activities	(41,768		)	6,743
Financing activities
Net (decrease) increase in total deposits	(2,847		)	58,848
Net (decrease) increase in short-term borrowings	31,474			(69,750		)
Payments on long-term debt	0			(532		)
Cash dividends paid on common stock	(9,760		)	(9,745		)
Proceeds from exercise of stock options	111			124
Excess tax benefit on share-based compensation	105			99
Net cash provided by (used in) financing activities	19,083			(20,956		)
Cash and due from banks
Net increase (decrease) in cash and due from banks	(12,166		)	889
Cash and due from banks at beginning of period	114,841			110,122
Cash and due from banks at end of period	$	102,675		$	111,011

See Notes to Consolidated Financial Statements.

5

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2016

(Unaudited)

NOTE 1:  BASIS OF PRESENTATION

The Consolidated Financial Statements of First Financial Bancorp., 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.  All significant intercompany transactions and accounts have been eliminated in consolidation.  Certain reclassifications of prior periods' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.  These estimates, assumptions and judgments are inherently subjective and may be susceptible to significant change.  Actual realized amounts could differ materially from these 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 Form 10-K for the year ended December 31, 2015.  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 it is suggested that these interim statements be read in conjunction with 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, 2015 has been derived from the audited financial statements in the Company’s 2015 Form 10-K.

NOTE 2:  RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

In April 2015, the FASB issued an update (ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs) that requires debt issuance costs to be presented as a deduction from the corresponding debt liability. Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements. The provisions of this update became effective January 1, 2016. First Financial early adopted this accounting standard during the third quarter of 2015. Management concluded that the debt issuance costs capitalized in prior periods was immaterial as a component of other assets, total assets, total long-term debt and total liabilities, and as such, the Company's prior periods have not been restated.

In September 2015, the FASB issued an update (ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments) which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. This update requires acquiring companies to recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance in this ASU became effective January 1, 2016 and did not have a material impact on the Company's Consolidated Financial Statements.

In January 2016, the FASB issued an update (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) which will require entities to measure many equity investments at fair value and recognize changes in fair value in net income. This update does not apply to equity investments that result in consolidation, those accounted for under the equity method and certain others, and will eliminate use of the available for sale classification for equity securities while providing a new measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In February 2016, the FASB issued an update (ASU 2016-02, Leases) which will require lessees to record most leases on their balance sheet and recognize leasing expenses in the income statement. Operating leases, except for short-term leases that are subject to an accounting policy election, will be recorded on the balance sheet for lessees by establishing a lease liability and corresponding right-of-use asset. The guidance in this ASU will become effective for interim and annual reporting periods

6

beginning after December 15, 2018, with early adoption permitted. First Financial is currently evaluating the impact of this update on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships) which clarifies that the novation of a derivative contract in a hedge accounting relationship does not, in and of itself, require de-designation of that hedge accounting relationship. In the event of a novation, hedge accounting relationships could continue if all other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments) which clarifies that an assessment of whether an embedded contingent put or call option is clearly and closely related to the debt host requires only an analysis of the four-step decision sequence in ASC 815-15-25-42. Entities are required to apply the guidance to existing debt instruments (or hybrid financial instruments that are determined to have a debt host) using a modified retrospective transition method as of the period of adoption. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-07, Investments-Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting) which will eliminate the requirement to retrospectively apply the equity method when an investment that had been accounted for utilizing another method qualifies for use of the equity method. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting) which will require recognition of the income tax effects of share-based awards in the income statement when the awards vest or are settled (i.e., Additional Paid-in-Capital pools will be eliminated). The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

NOTE 3:  INVESTMENTS

For the first quarter 2016, proceeds on the sale of $42.7 million of available-for-sale securities resulted in gains of $0.3 million and losses of $0.3 million. For the comparable quarter in 2015, proceeds on the sale of $25 thousand of available-for-sale securities resulted in no gains or losses. No held-to-maturity securities were sold.

The following is a summary of held-to-maturity and available-for-sale investment securities as of March 31, 2016:

	Held-to-maturity									Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss			Fair value		Amortized cost		Unrealized gain		Unrealized loss			Fair value
U.S. Treasuries	$	0	$	0	$	0		$	0	$	98	$	3	$	0		$	101
Securities of U.S. government agencies and corporations	14,935		373		0			15,308		8,183		223		0			8,406
Mortgage-backed securities	655,387		15,615		(410		)	670,592		720,407		6,868		(4,493		)	722,782
Obligations of state and other political subdivisions	27,180		480		(2		)	27,658		103,215		3,437		(443		)	106,209
Asset-backed securities	0		0		0			0		258,731		31		(5,266		)	253,496
Other securities	4,813		0		(94		)	4,719		74,459		632		(1,766		)	73,325
Total	$	702,315	$	16,468	$	(506	)	$	718,277	$	1,165,093	$	11,194	$	(11,968	)	$	1,164,319

7

The following is a summary of held-to-maturity and available-for-sale investment securities as of December 31, 2015:

	Held-to-maturity									Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss			Fair value		Amortized cost		Unrealized gain		Unrealized loss			Fair value
U.S. Treasuries	$	0	$	0	$	0		$	0	$	98	$	0	$	(1	)	$	97
Securities of U.S. government agencies and corporations	15,486		121		0			15,607		8,183		157		0			8,340
Mortgage-backed securities	678,318		7,452		(1,999		)	683,771		775,285		2,708		(12,926		)	765,067
Obligations of state and other political subdivisions	27,646		338		(99		)	27,885		105,212		2,655		(730		)	107,137
Asset-backed securities	0		0		0			0		236,411		35		(3,445		)	233,001
Other securities	4,809		0		(121		)	4,688		77,876		523		(1,399		)	77,000
Total	$	726,259	$	7,911	$	(2,219	)	$	731,951	$	1,203,065	$	6,078	$	(18,501	)	$	1,190,642

The following table provides a summary of investment securities by contractual maturity or estimated weighted average life as of March 31, 2016. Estimated lives on amortizing investment securities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	5,105	$	5,207	$	58,659	$	58,493
Due after one year through five years	563,324		574,597		775,602		774,467
Due after five years through ten years	133,886		138,473		303,552		304,623
Due after ten years	0		0		27,280		26,736
Total	$	702,315	$	718,277	$	1,165,093	$	1,164,319

The following tables provide the fair value and gross unrealized losses on investment securities in an unrealized loss position, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:

	March 31, 2016
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Fair value		Unrealized loss			Fair value		Unrealized loss			Fair value		Unrealized loss
Mortgage-backed securities	$	167,950	$	(1,299	)	$	235,099	$	(3,604	)	$	403,049	$	(4,903	)
Obligations of state and other political subdivisions	6,684		(53		)	20,758		(392		)	27,442		(445		)
Asset-backed securities	215,166		(4,217		)	24,018		(1,049		)	239,184		(5,266		)
Other securities	34,001		(1,123		)	16,766		(737		)	50,767		(1,860		)
Total	$	423,801	$	(6,692	)	$	296,641	$	(5,782	)	$	720,442	$	(12,474	)

	December 31, 2015
	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	value		loss			value		loss			value		loss
Securities of U.S. government agencies and corporations	$	97	$	0		$	0	$	0		$	97	$	0
Mortgage-backed securities	500,768		(5,363		)	246,523		(9,563		)	747,291		(14,926		)
Obligations of state and other political subdivisions	5,800		(65		)	29,287		(764		)	35,087		(829		)
Asset-backed securities	189,066		(3,042		)	17,144		(403		)	206,210		(3,445		)
Other securities	30,828		(592		)	24,716		(928		)	55,544		(1,520		)
Total	$	726,559	$	(9,062	)	$	317,670	$	(11,658	)	$	1,044,229	$	(20,720	)

8

Gains and losses on debt securities are generally due to fluctuations in current market yields relative to the yields of the debt securities at their amortized cost. All securities with unrealized losses are reviewed quarterly to determine if any impairment is considered other than temporary, requiring a write-down to fair value. First Financial considers the percentage loss on a security, duration of the loss, average life or duration of the security, credit rating of the security and payment performance as well as the Company's intent and ability to hold the security to maturity when determining whether any impairment is other than temporary. At this time First Financial does not intend to sell, and it is not more likely than not that the Company will be required to sell debt securities temporarily impaired prior to maturity or recovery of the recorded value. First Financial had no other than temporary impairment related to its investment securities portfolio as of March 31, 2016 or December 31, 2015.

For further detail on the fair value of investment securities, see Note 14 – Fair Value Disclosures.

NOTE 4:  LOANS AND LEASES

First Financial offers clients a variety of commercial and consumer loan and lease products with various interest rates and payment terms. Lending activities are primarily concentrated in states where the Bank currently operates banking centers (Ohio, Indiana and Kentucky). Additionally, First Financial has two national lending platforms, one that provides equipment and leasehold improvement financing for franchisees in the quick service and casual dining restaurant sector and another that provides loans secured by commissions and cash collateral accounts primarily to insurance agents and brokers. Commercial loan categories include commercial and industrial, commercial real estate, construction real estate and lease financing. Consumer loan categories include residential real estate, home equity, installment and credit card.

Purchased impaired loans.Loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, are referred to as purchased impaired loans. First Financial accounts for the majority of loans acquired in FDIC transactions as purchased impaired loans, except for loans with revolving privileges, which are outside the scope of FASB ASC Topic 310-30, and loans for which cash flows could not be estimated, which are accounted for under the cost recovery method. Purchased impaired loans include loans previously covered under loss sharing agreements as well as loans that remain subject to FDIC loss sharing coverage.

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 purchased impaired loans. First Financial had purchased impaired loans totaling $177.0 million and $191.6 million, at March 31, 2016 and December 31, 2015, respectively. The outstanding balance of all purchased impaired loans, including all contractual principal, interest, fees and penalties, was $196.2 million and $213.3 million as of March 31, 2016 and December 31, 2015, respectively. These balances exclude contractual interest not yet accrued.

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

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Balance at beginning of period	$	64,857		$	106,622
Reclassification from/(to) nonaccretable difference	318			(1,576		)
Accretion	(4,210		)	(6,357		)
Other net activity (1)	(2,241		)	(6,701		)
Balance at end of period	$	58,724		$	91,988

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

First Financial regularly reviews its forecast of expected cash flows for purchased impaired loans. The Company recognized reclassifications from nonaccretable to accretable difference of $0.3 million for the first quarter of 2016, however, during the three months ended March 31, 2015, the Company recognized reclassifications from accretable to nonaccretable difference of $1.6 million due to changes in the cash flow expectations related to certain loan pools. These reclassifications can result in impairment and provision expense in the current period or yield adjustments on the related loan pools on a prospective basis.

Covered loans. Loans acquired in FDIC-assisted transactions 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 the

9

loss sharing agreements, covered loans are subject to a stated loss threshold whereby the FDIC will reimburse First Financial for 80% of losses up to a stated loss threshold and 95% of losses in excess of the threshold. These loss sharing agreements provide for partial loss protection on single-family, residential loans for a period of ten years and First Financial is required to share any recoveries of previously charged-off amounts for the same time period, on the same pro-rata basis with the FDIC. All other loans subject to loss sharing agreements were provided loss protection for a period of five years and recoveries of previously charged-off amounts must be shared with the FDIC for an additional three year period, on the same pro-rata basis.

The Company's loss sharing agreements with the FDIC related to non-single family loans expired effective October 1, 2014, and the ten year period of loss protection on all other covered loans and covered OREO expires October 1, 2019. Covered loans totaled $109.2 million as of March 31, 2016 and $113.3 million as of December 31, 2015.

Credit Quality. To facilitate the monitoring of credit quality for commercial loans, and for purposes of determining an appropriate ALLL, First Financial utilizes the following categories of credit grades:

Pass - Higher quality loans that do not fit any of the other categories described below.

Special Mention - First Financial assigns a special mention rating to loans and leases with potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in First Financial's credit position at some future date.

Substandard - First Financial assigns a substandard rating to loans or leases that are inadequately protected by the current sound financial worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans and leases have well-defined weaknesses that jeopardize repayment of the debt. Substandard loans and leases are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not addressed.

Doubtful - First Financial assigns a doubtful rating to loans and leases with all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans.

The credit grades described above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

First Financial considers repayment performance to be the best indicator of credit quality for consumer loans. Consumer loans that have principal and interest payments that are past due by 90 days or more are generally classified as nonperforming. Additionally, consumer loans that have been modified in a TDR are classified as nonperforming.

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

	As of March 31, 2016
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,680,764	$	337,472	$	2,182,683	$	99,583	$	4,300,502
Special Mention	22,155		3,417		19,754		0		45,326
Substandard	41,813		564		59,420		1,552		103,349
Doubtful	0		0		0		0		0
Total	$	1,744,732	$	341,453	$	2,261,857	$	101,135	$	4,449,177

(Dollars in thousands)	Real Estate Residential		Home Equity		Installment		Other		Total
Performing	$	499,849	$	460,341	$	41,408	$	39,283	$	1,040,881
Nonperforming	8,663		5,669		219		0		14,551
Total	$	508,512	$	466,010	$	41,627	$	39,283	$	1,055,432

10

	As of December 31, 2015
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,596,415	$	310,806	$	2,179,701	$	93,236	$	4,180,158
Special Mention	27,498		128		19,903		0		47,529
Substandard	39,189		778		58,693		750		99,410
Doubtful	0		0		0		0		0
Total	$	1,663,102	$	311,712	$	2,258,297	$	93,986	$	4,327,097

(Dollars in thousands)	Real Estate Residential		Home Equity		Installment		Other		Total
Performing	$	503,317	$	461,188	$	41,253	$	41,217	$	1,046,975
Nonperforming	8,994		5,441		253		0		14,688
Total	$	512,311	$	466,629	$	41,506	$	41,217	$	1,061,663

Delinquency. 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 date of the scheduled payment.

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

	As of March 31, 2016
(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	$	4,354	$	310	$	3,034	$	7,698	$	1,729,886	$	1,737,584	$	7,148	$	1,744,732	$	0
Real estate - construction	5,002		0		0		5,002		335,689		340,691		762		341,453		0
Real estate - commercial	2,718		0		6,631		9,349		2,141,626		2,150,975		110,882		2,261,857		0
Real estate - residential	858		0		2,020		2,878		450,582		453,460		55,052		508,512		0
Home equity	505		81		3,025		3,611		460,929		464,540		1,470		466,010		0
Installment	133		13		67		213		39,713		39,926		1,701		41,627		0
Other	435		328		59		822		139,596		140,418		0		140,418		59
Total	$	14,005	$	732	$	14,836	$	29,573	$	5,298,021	$	5,327,594	$	177,015	$	5,504,609	$	59

	As of December 31, 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	$	2,255	$	2,232	$	1,937	$	6,424	$	1,648,902	$	1,655,326	$	7,776	$	1,663,102	$	0
Real estate - construction	0		17		0		17		310,872		310,889		823		311,712		0
Real estate - commercial	2,501		913		7,421		10,835		2,124,290		2,135,125		123,172		2,258,297		0
Real estate - residential	1,220		239		2,242		3,701		451,907		455,608		56,703		512,311		0
Home equity	696		248		2,830		3,774		461,647		465,421		1,208		466,629		0
Installment	197		111		48		356		39,206		39,562		1,944		41,506		0
Other	920		302		230		1,452		133,751		135,203		0		135,203		108
Total	$	7,789	$	4,062	$	14,708	$	26,559	$	5,170,575	$	5,197,134	$	191,626	$	5,388,760	$	108

Nonaccrual. 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 90 days or more past due. Generally, loans are classified as nonaccrual due to the continued failure to adhere to contractual payment terms by the borrower, coupled with other pertinent factors such as

11

insufficient collateral value. The accrual of interest income is discontinued and previously accrued but unpaid interest is reversed when a loan is classified as nonaccrual. 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 return to accrual status if collection of future principal and interest payments is no longer doubtful.

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 provision for loan and lease losses or prospective yield adjustments.

Troubled Debt Restructurings. A loan modification is considered a TDR when the borrower is experiencing financial difficulty and 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 restructured terms of the loan agreement.

First Financial had 271 TDRs totaling $37.7 million at March 31, 2016, including $30.1 million on accrual status and $7.5 million classified as nonaccrual. First Financial had $0.4 million of commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs at March 31, 2016. At March 31, 2016, the ALLL included reserves of $2.4 million related to TDRs. For the three months ended March 31, 2016 and 2015, First Financial charged off $0.2 million and $6 thousand respectively, for the portion of TDRs determined to be uncollectible. Additionally, as of March 31, 2016, approximately $10.2 million of accruing TDRs have been performing in accordance with the restructured terms for more than one year.

First Financial had 271 TDRs totaling $38.2 million at December 31, 2015, including $28.9 million of loans on accrual status and $9.3 million classified as nonaccrual. First Financial had $1.8 million of commitments outstanding to lend additional funds to borrowers whose loan terms had been modified through TDRs. At December 31, 2015, the ALLL included reserves of $6.3 million related to TDRs. For the year ended December 31, 2015, First Financial charged off $2.7 million for the portion of TDRs determined to be uncollectible. As of December 31, 2015, approximately $10.3 million of the accruing TDRs had been performing in accordance with the restructured terms for more than one year.

The following tables provide information on loan modifications classified as TDRs during the three months ended March 31, 2016 and 2015:

	Three months ended
	March 31, 2016					March 31, 2015
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial	8	$	2,083	$	2,095	8	$	360	$	359
Real estate - construction	0	0		0		0	0		0
Real estate - commercial	1	42		42		6	12,914		9,343
Real estate - residential	2	281		247		0	0		0
Home equity	4	149		140		0	0		0
Installment	2	7		7		0	0		0
Total	17	$	2,562	$	2,531	14	$	13,274	$	9,702

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The following table provides information on how TDRs were modified during the three months ended March 31, 2016 and 2015.

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Extended maturities	$	486	$	9,481
Adjusted interest rates	0		0
Combination of rate and maturity changes	162		62
Forbearance	0		0
Other (1)	1,883		159
Total	$	2,531	$	9,702

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

First Financial considers repayment performance as an indication of the effectiveness of the Company's loan modifications. Borrowers that are 90 days or more past due on any principal or interest payments, or who prematurely terminate a restructured loan agreement without paying off the contractual principal balance (for example, in a deed-in-lieu arrangement), are considered to be in payment default of the terms of the TDR agreement.

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
	March 31, 2016			March 31, 2015
(Dollars in thousands)	Number of loans	Period end balance		Number of loans	Period end balance
Commercial	1	$	55	0	$	0
Real estate - construction	0	0		0	0
Real estate - commercial	0	0		3	967
Real estate - residential	1	214		1	73
Home equity	1	28		0	0
Installment	1	4		0	0
Total	4	$	301	4	$	1,040

13

Impaired Loans. Loans classified as nonaccrual and loans modified as TDRs are considered impaired. The following table provides information on impaired loans, excluding purchased impaired loans.

(Dollars in thousands)	March 31, 2016		December 31, 2015
Impaired loans
Nonaccrual loans (1)
Commercial	$	3,917	$	8,405
Real estate-construction	0		0
Real estate-commercial	8,577		9,418
Real estate-residential	4,243		5,027
Home equity	5,036		4,898
Installment	113		127
Other	121		122
Nonaccrual loans (1)	22,007		27,997
Accruing troubled debt restructurings	30,127		28,876
Total impaired loans	$	52,134	$	56,873

(1) Nonaccrual loans include nonaccrual TDRs of $7.5 million and $9.3 million as of March 31, 2016 and December 31, 2015, respectively.

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Interest income effect on impaired loans
Gross amount of interest that would have been recorded under original terms	$	754	$	967
Interest included in income
Nonaccrual loans	76		171
Troubled debt restructurings	232		132
Total interest included in income	308		303
Net impact on interest income	$	446	$	664

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 is necessary based on the borrower’s overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. Specific allowances are based on discounted cash flows using the loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans.

14

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

	As of March 31, 2016
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		YTD interest income recognized
Loans with no related allowance recorded
Commercial	$	13,512	$	14,442	$	0	$	14,965	$	74
Real estate - construction	0		0		0		0		0
Real estate - commercial	14,003		18,707		0		15,152		70
Real estate - residential	7,126		8,383		0		7,287		46
Home equity	5,569		7,673		0		5,455		21
Installment	219		236		0		236		1
Other	121		121		0		122		0
Total	40,550		49,562		0		43,217		212
Loans with an allowance recorded
Commercial	973		1,163		400		983		9
Real estate - construction	0		0		0		0		0
Real estate - commercial	8,974		8,974		763		8,663		77
Real estate - residential	1,537		1,551		236		1,542		9
Home equity	100		100		2		101		1
Installment	0		0		0		0		0
Other	0		0		0		0		0
Total	11,584		11,788		1,401		11,289		96
Total
Commercial	14,485		15,605		400		15,948		83
Real estate - construction	0		0		0		0		0
Real estate - commercial	22,977		27,681		763		23,815		147
Real estate - residential	8,663		9,934		236		8,829		55
Home equity	5,669		7,773		2		5,556		22
Installment	219		236		0		236		1
Other	121		121		0		122		0
Total	$	52,134	$	61,350	$	1,401	$	54,506	$	308

15

	As of and for the year December 31, 2015
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		Interest income recognized
Loans with no related allowance recorded
Commercial	$	16,418	$	17,398	$	0	$	10,468	$	258
Real estate - construction	0		0		0		150		0
Real estate - commercial	16,301		20,479		0		19,363		344
Real estate - residential	7,447		8,807		0		8,143		184
Home equity	5,340		7,439		0		5,648		82
Installment	253		276		0		380		7
Other	122		122		0		24		0
Total	45,881		54,521		0		44,176		875
Loans with an allowance recorded
Commercial	993		1,178		357		1,409		26
Real estate - construction	0		0		0		0		0
Real estate - commercial	8,351		8,706		979		12,928		213
Real estate - residential	1,547		1,560		235		1,696		40
Home equity	101		101		2		101		3
Installment	0		0		0		0		0
Other	0		0		0		0		0
Total	10,992		11,545		1,573		16,134		282
Total
Commercial	17,411		18,576		357		11,877		284
Real estate - construction	0		0		0		150		0
Real estate - commercial	24,652		29,185		979		32,291		557
Real estate - residential	8,994		10,367		235		9,839		224
Home equity	5,441		7,540		2		5,749		85
Installment	253		276		0		380		7
Other	122		122		0		24		0
Total	$	56,873	$	66,066	$	1,573	$	60,310	$	1,157

16

OREO. OREO is comprised of properties acquired by the Company primarily through the loan foreclosure or repossession process, or other resolution activity that results in partial or total satisfaction of problem loans.

Changes in OREO were as follows:

	Three months ended
	March 31,
(Dollars in thousands)	2016 (1)			2015 (1)
Balance at beginning of period	$	13,254		$	22,674
Additions
Commercial	786			2,173
Residential	122			1,058
Total additions	908			3,231
Disposals
Commercial	(200		)	(4,145		)
Residential	(1,835		)	(412		)
Total disposals	(2,035		)	(4,557		)
Valuation adjustment
Commercial	(117		)	(418		)
Residential	(71		)	(24		)
Total valuation adjustment	(188		)	(442		)
Balance at end of period	$	11,939		$	20,906

The preceding table includes OREO subject to loss sharing agreements of $38 thousand and $0.3 million at March 31, 2016 and 2015, respectively.

FDIC indemnification asset. 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
	March 31,
(Dollars in thousands)	2016			2015			Affected Line Item in the Consolidated Statements of Income
Balance at beginning of period	$	17,630		$	22,666
Adjustments not reflected in income
Net FDIC claims (received) / paid	362			204
Adjustments reflected in income
Amortization	(1,171		)	(1,195		)	Interest income, other earning assets
FDIC loss sharing income	(565		)	(1,046		)	Noninterest income, FDIC loss sharing income
Offset to accelerated discount	0			(232		)	Noninterest income, accelerated discount on covered loans
Balance at end of period	$	16,256		$	20,397

The accounting for FDIC indemnification assets is closely related to the accounting for the underlying, indemnified assets as well as on-going assessment of the collectibility of the indemnification assets. The primary activities impacting the FDIC indemnification asset are FDIC claims, amortization, FDIC loss sharing income and accelerated discount. For a detailed discussion on the indemnification asset, please refer to the Loans and Leases note in the Company's 2015 Annual Report on Form 10-K.

NOTE 5:  ALLOWANCE FOR LOAN AND LEASE LOSSES

Loans and leases. For each reporting period, management maintains the ALLL at a level that it considers sufficient to absorb probable incurred loan and lease losses inherent in the portfolio. Management determines the adequacy of the allowance based

17

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.

The allowance is increased by provision expense and decreased by 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.

In the third quarter of 2015, First Financial closed its merger with Oak Street. Loans acquired in this transaction were recorded at estimated fair value at the acquisition date with no carryover of the related ALLL. See Note 15 - Business Combinations for further detail.

Covered/formerly covered loans. The majority of covered/formerly covered loans are purchased impaired loans, whereby First Financial is required to periodically re-estimate the expected cash flows on the loans. First Financial updated the valuations related to covered/formerly covered loans during the first quarter of 2016. First Financial recognized negative provision expense, or impairment recapture, of $0.1 million and net charge-offs of $0.8 million during the first quarter of 2016, resulting in an ending allowance of $9.4 million at March 31, 2016. For the first quarter of 2015, First Financial recognized negative provision expense on covered loans of $0.3 million and net recoveries of $0.5 million, resulting in an ending allowance of $10.3 million at March 31, 2015.

Changes in the allowance for loan and lease losses were as follows:

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Changes in the allowance for loan and lease losses on total loans
Balance at beginning of period	$	53,398		$	52,858
Provision for loan and lease losses	1,655			2,060
Loans charged-off	(2,442		)	(5,044		)
Recoveries	1,121			3,202
Balance at end of period	$	53,732		$	53,076

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Year-to-date changes in the allowance for loan and lease losses by loan category were as follows:

	Three months ended March 31, 2016
			Real Estate
(Dollars in thousands)	Comm		Constr			Comm			Resid			Home Equity		Install			Other		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	16,995	$	1,810		$	23,656		$	4,014		$	3,943	$	386		$	2,594	$	53,398
Provision for loan and lease losses	1,432		439			(420		)	8			185		(58		)	69		1,655
Gross charge-offs	479		3			1,262			45			340		73			240		2,442
Recoveries	222		26			442			63			188		99			81		1,121
Total net charge-offs	257		(23		)	820			(18		)	152		(26		)	159		1,321
Ending allowance for loan and lease losses	$	18,170	$	2,272		$	22,416		$	4,040		$	3,976	$	354		$	2,504	$	53,732
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	400	$	0		$	763		$	236		$	2	$	0		$	0	$	1,401
Collectively evaluated for impairment	17,770		2,272			21,653			3,804			3,974		354			2,504		52,331
Ending allowance for loan and lease losses	$	18,170	$	2,272		$	22,416		$	4,040		$	3,976	$	354		$	2,504	$	53,732
Loans
Loans individually evaluated for impairment	$	14,485	$	0		$	22,977		$	8,663		$	5,669	$	219		$	121	$	52,134
Loans collectively evaluated for impairment	1,730,247		341,453			2,238,880			499,849			460,341		41,408			140,297		5,452,475
Total loans	$	1,744,732	$	341,453		$	2,261,857		$	508,512		$	466,010	$	41,627		$	140,418	$	5,504,609

	Three months ended March 31, 2015
				Real Estate
(Dollars in thousands)	Comm			Constr			Comm		Resid		Home Equity		Install		Other		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	13,870		$	1,045		$	27,086	$	3,753	$	4,260	$	407	$	2,437	$	52,858
Provision for loan and lease losses	1,059			147			112		70		472		61		139		2,060
Gross charge-offs	1,568			0			1,870		404		741		167		294		5,044
Recoveries	2,183			45			491		64		288		86		45		3,202
Total net charge-offs	(615		)	(45		)	1,379		340		453		81		249		1,842
Ending allowance for loan and lease losses	$	15,544		$	1,237		$	25,819	$	3,483	$	4,279	$	387	$	2,327	$	53,076
	December 31, 2015
				Real Estate
(Dollars in thousands)	Comm			Constr			Comm		Resid		Home Equity		Install		Other		Total
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	357		$	0		$	979	$	235	$	2	$	0	$	0	$	1,573
Collectively evaluated for impairment	16,638			1,810			22,677		3,779		3,941		386		2,594		51,825
Ending allowance for loan and lease losses	$	16,995		$	1,810		$	23,656	$	4,014	$	3,943	$	386	$	2,594	$	53,398
Loans
Loans individually evaluated for impairment	$	17,411		$	0		$	24,652	$	8,994	$	5,441	$	253	$	122	$	56,873
Loans collectively evaluated for impairment	1,645,691			311,712			2,233,645		503,317		461,188		41,253		135,081		5,331,887
Total loans	$	1,663,102		$	311,712		$	2,258,297	$	512,311	$	466,629	$	41,506	$	135,203	$	5,388,760

NOTE 6:  GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill. Assets and liabilities acquired in a business combination 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. First Financial recorded no additions to goodwill in the first quarter of 2016. Additions to goodwill in 2015 resulted from the acquisition of Oak Street in the third quarter. For further detail on the Oak Street acquisition, see Note 15 – Business Combinations.

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Changes in the carrying amount of goodwill for the quarter ended March 31, 2016 and the year ended December 31, 2015 are shown below.

(Dollars in thousands)	March 31, 2016		December 31, 2015
Balance at beginning of year	$	204,084	$	137,739
Goodwill resulting from business combinations	0		66,345
Balance at end of period	$	204,084	$	204,084

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, 2015 and no impairment was indicated.  As of March 31, 2016, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value.

Other intangible assets. As of March 31, 2016 and December 31, 2015, First Financial has $7.5 million and $7.8 million, respectively, of other intangibles which are included in Goodwill and other intangibles in the Consolidated Balance Sheets and primarily consist of core deposit intangibles.  Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships. Core deposit intangibles are recorded at their estimated fair value at the date of acquisition and are then amortized on an accelerated basis over their estimated useful lives. Core deposit intangibles were $5.6 million and $5.9 million as of March 31, 2016 and December 31, 2015, respectively. First Financial's core deposit intangibles have an estimated weighted average remaining life of 5.4 years. Amortization expense was $0.4 million for the three months ended March 31, 2016 and 2015, respectively.

NOTE 7:  BORROWINGS

Short-term borrowings on the Consolidated Balance Sheets include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, overnight advances from the FHLB and a short-term line of credit. All repurchase agreements are subject to terms and conditions of repurchase security agreements between First Financial Bank and the client. To secure the Bank's liability to the client, First Financial Bank is authorized to sell or repurchase U.S. Treasury, government agency and mortgage-backed securities.

First Financial had $894.4 million in short-term borrowings with the FHLB at March 31, 2016 and $849.1 million as of December 31, 2015. These short-term borrowings are used to manage the Company's normal liquidity needs and support the Company's asset and liability management strategies.

First Financial has a $15.0 million short-term credit facility with an unaffiliated bank that matures on May 30, 2016. This facility can have a variable or fixed interest rate and provides First Financial additional liquidity, if needed, for various corporate activities, including the repurchase of First Financial shares and the payment of dividends to shareholders. As of March 31, 2016 and December 31, 2015, there was no outstanding balance. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this facility as of March 31, 2016 and December 31, 2015.

During the third quarter of 2015, First Financial issued $120.0 million of subordinated notes. The subordinated notes have a fixed interest rate of 5.125% payable semiannually and mature on August 25, 2025. These notes are not redeemable by the Company or callable by the holders of the notes prior to maturity. The subordinated notes are treated as Tier 2 capital for regulatory capital purposes and are included in Long-term debt on the Consolidated Balance Sheets.

Long-term debt also includes $0.4 million and $0.5 million of FHLB long-term advances as of March 31, 2016 and December 31, 2015, respectively. These instruments are primarily utilized to reduce overnight liquidity risk and to mitigate interest rate sensitivity on the Consolidated Balance Sheets.

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The following is a summary of First Financial's long-term debt:

	March 31, 2016				December 31, 2015
(Dollars in thousands)	Amount		Average rate		Amount		Average rate
Subordinated debt	$	118,332	5.20	%	$	118,312	5.20	%
FHLB advances	449		2.39	%	453		2.37	%
Capital loan with municipality	775		0.00	%	775		0.00	%
Total long-term debt	$	119,556	5.15	%	$	119,540	5.15	%

NOTE 8:  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss).  The related tax effects allocated to other comprehensive income and reclassifications out of accumulated other comprehensive income (loss) are as follows

	Three months ended March 31, 2016
	Total other comprehensive income												Total accumulated other comprehensive income (loss)
(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	$	10,975	$	24		$	10,951	$	(3,908	)	$	7,043	$	(4,933	)	$	7,043	$	2,110
Unrealized gain (loss) on derivatives	202		0			202		(74		)	128		(1,599		)	128		(1,471		)
Retirement obligation	0		(317		)	317		(117		)	200		(24,048		)	200		(23,848		)
Total	$	11,177	$	(293	)	$	11,470	$	(4,099	)	$	7,371	$	(30,580	)	$	7,371	$	(23,209	)

	Three months ended March 31, 2015
	Total other comprehensive income															Total accumulated other comprehensive income (loss)
(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	$	7,808		$	0		$	7,808		$	(2,800	)	$	5,008		$	(2,506	)	$	5,008		$	2,502
Unrealized gain (loss) on derivatives	(1,293		)	0			(1,293		)	477			(816		)	(949		)	(816		)	(1,765		)
Retirement obligation	0			(350		)	350			(167		)	183			(17,904		)	183			(17,721		)
Foreign currency translation	(20		)	0			(20		)	0			(20		)	(50		)	(20		)	(70		)
Total	$	6,495		$	(350	)	$	6,845		$	(2,490	)	$	4,355		$	(21,409	)	$	4,355		$	(17,054	)

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The following table presents the activity reclassified from accumulated other comprehensive income into income during the three month period:

	Amount reclassified from accumulated other comprehensive income (1)
	Three months ended
	March 31,
(Dollars in thousands)	2016			2015			Affected Line Item in the Consolidated Statements of Income
Gains and losses on cash flow hedges
Interest rate contracts	$	0		$	0		Interest expense - deposits
Realized gains and losses on securities available-for-sale	24			0			Gains on sales of investments securities
Defined benefit pension plan
Amortization of prior service cost (2)	103			100			Salaries and employee benefits
Recognized net actuarial loss (2)	(420		)	(450		)	Salaries and employee benefits
Amortization and settlement charges of defined benefit pension items	(317		)	(350		)	Salaries and employee benefits
Total reclassifications for the period, before tax	$	(293	)	$	(350	)

(1) Negative amounts are reductions to net income.

(2) Included in the computation of net periodic pension cost (see Note 12 - Employee Benefit Plans for additional details).

NOTE 9:  DERIVATIVES

First Financial uses certain derivative instruments, including interest rate caps, floors and swaps, to meet the needs of its clients while managing the interest rate risk associated with certain transactions.  First Financial does not use derivatives for speculative purposes.

First Financial primarily utilizes interest rate swaps as a means to offer borrowers credit-based products that meet their needs and may from time to time utilize interest rate swaps to manage the interest rate risk profile of the Company.

Interest rate swap agreements establish the basis on which interest rate payments are exchanged with counterparties, referred to as the notional amount. As only interest rate payments are exchanged, the cash requirements and credit risk associated with interest rate swaps are significantly less than the notional amount and the Company’s credit risk exposure is limited to the market value of the instruments. First Financial manages this market value credit risk 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. The Company is currently below all single counterparty and portfolio limits.

At March 31, 2016, the Company had a total counterparty notional amount outstanding of approximately $594.4 million, spread among ten counterparties, with an outstanding liability from these contracts of $24.3 million. At December 31, 2015, the Company had a total counterparty notional amount outstanding of approximately $551.7 million, spread among nine counterparties, with an outstanding liability from these contracts of $13.4 million.

First Financial’s exposure to credit loss, in the event of nonperformance by a borrower, is limited to the market value of the derivative instrument associated with that borrower. First Financial monitors its derivative credit exposure to borrowers by monitoring the creditworthiness of the related loan customers through the normal credit review processes the Company performs on all borrowers. Additionally, the Company monitors derivative credit risk exposure related to problem loans through the Company's ALLL committee. First Financial considers the market value of a derivative instrument to be part of the carrying value of the related loan for these purposes as the borrower is contractually obligated to pay First Financial this amount in the event the derivative contract is terminated.

Client Derivatives. First Financial utilizes interest rate swaps as a means to offer commercial borrowers fixed rate funding while providing the Company with floating rate assets.  The following table details the location and amounts recognized in the Consolidated Balance Sheets for client derivatives:

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		March 31, 2016							December 31, 2015
				Estimated fair value							Estimated fair value
(Dollars in thousands)	Balance sheet location	Notional amount		Gain		Loss			Notional amount		Gain		Loss
Client derivatives - instruments associated with loans
Pay fixed interest rate swaps with counterparty	Accrued interest and other liabilities	$	3,733	$	0	$	(83	)	$	5,216	$	0	$	(120	)
Matched interest rate swaps with borrower	Accrued interest and other assets	590,640		24,740		0			546,458		13,981		(44		)
Matched interest rate swaps with counterparty	Accrued interest and other liabilities	590,640		0		(24,770		)	546,458		44		(14,015		)
Total		$	1,185,013	$	24,740	$	(24,853	)	$	1,098,132	$	14,025	$	(14,179	)

In connection with its use of derivative instruments, First Financial and its counterparties are required to post cash collateral to offset the market position of the derivative instruments under certain conditions. First Financial maintains the right to offset these derivative positions with the collateral posted against them by or with the relevant counterparties. First Financial classifies the derivative cash collateral outstanding with its counterparties as an adjustment to the fair value of the derivative contracts within Accrued interest and other assets or Accrued interest and other liabilities in the Consolidated Balance Sheets.

The following table discloses the gross and net amounts of liabilities recognized in the Consolidated Balance Sheets:

	March 31, 2016							December 31, 2015
(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 assets presented in the Consolidated Balance Sheets
Client derivatives
Pay fixed interest rate swaps with counterparty	$	83	$	0		$	83	$	120	$	0		$	120
Matched interest rate swaps with counterparty	24,770		(24,140		)	630		14,015		(16,710		)	(2,695		)
Total	$	24,853	$	(24,140	)	$	713	$	14,135	$	(16,710	)	$	(2,575	)

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 March 31, 2016:

							Weighted-average rate
(Dollars in thousands)	Notional amount		Average maturity (years)	Fair value			Receive		Pay
Client derivatives
Pay fixed interest rate swaps with counterparty	$	3,733	1.6	$	(83	)	2.55	%	7.19	%
Receive fixed, matched interest rate swaps with borrower	590,640		5.3	24,415			4.30	%	2.63	%
Pay fixed, matched interest rate swaps with counterparty	590,640		5.3	(24,445		)	2.63	%	4.30	%
Total client derivatives	$	1,185,013	5.2	$	(113	)	3.46	%	3.50	%

Credit Derivatives. In conjunction with participating interests in commercial loans, First Financial periodically enters into risk participation agreements with counterparties whereby First Financial assumes a portion of the credit exposure associated with an interest rate swap on the participated loan in exchange for a fee. Under these agreements, First Financial will make payments to the counterparty if the loan customer defaults on its obligation to perform under the interest rate swap contract with the counterparty. The total notional value of these agreements totaled $36.8 million as of March 31, 2016 and $33.6 million as of December 31, 2015. The fair value of these agreements was recorded on the Consolidated Balance Sheets in Accrued interest and other liabilities and was $0.1 million as of March 31, 2016 and December 31, 2015, respectively.

Mortgage Derivatives. First Financial enters into IRLCs and forward commitments for the future delivery of mortgage loans to third party investors, which are considered derivatives. When borrowers secure an IRLC with First Financial and the loan is intended to be sold, First Financial will enter into forward commitments for the future delivery of the loans to third party

23

investors in order to hedge against the effect of changes in interest rates impacting IRLCs and and Loans held for sale. At March 31, 2016, the notional amount of the IRLCs was $30.8 million and the notional amount of forward commitments was $33.1 million. As of December 31, 2015, the notional amount of IRLCs was $18.5 million and the notional amount of forward commitments was $25.1 million. The fair value of these agreements was recorded on the Consolidated Balance Sheets in Accrued interest and other assets and was $0.3 million at March 31, 2016 and $0.1 million at December 31, 2015.

NOTE 10:  COMMITMENTS AND CONTINGENCIES

First Financial offers a variety of financial instruments with off-balance-sheet risk to assist clients in meeting their requirement 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 utilizes the same credit policies in issuing commitments and conditional obligations as it does for credit instruments recorded on the Consolidated Balance Sheets. First Financial’s exposure to credit loss, in the event of nonperformance by the counterparty 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 utilizes the ALLL methodology to maintain a reserve that it considers sufficient to absorb probable incurred losses inherent in standby letters of credit and outstanding loan commitments and records the reserve within Accrued interest and other liabilities on the Consolidated Balance Sheets.

Loan commitments. Loan commitments are agreements to extend credit to a client, absent any violation of conditions established in the commitment agreement.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if deemed necessary by First Financial upon extension of credit, is based on management’s credit evaluation of the client.  The collateral held varies, but may include securities, real estate, inventory, plant or equipment.  First Financial had commitments outstanding to extend credit totaling $2.1 billion at both March 31, 2016 and $2.0 billion at December 31, 2015.

Letters of credit. Letters of credit are conditional commitments issued by First Financial to guarantee the performance of a client to a third party.  First Financial’s portfolio of standby letters of credit consists primarily of performance assurances made on behalf of clients who have a contractual commitment to produce or deliver goods or services.  The risk to First Financial arises from its obligation to make payment in the event of the client's contractual default to produce the contracted good or service to a third party.  First Financial issued letters of credit (including standby letters of credit) aggregating $16.0 million and $16.3 million at March 31, 2016 and December 31, 2015, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Investments in Affordable housing projects. First Financial has made investments in certain qualified affordable housing projects. These projects are an indirect federal subsidy that provide tax incentives to encourage investment in the development, acquisition and rehabilitation of affordable rental housing, and allow investors to claim tax credits and other tax benefits (such as deductions from taxable income for operating losses) on their federal income tax returns. The principal risk associated with qualified affordable housing investments is the potential for noncompliance with the tax code requirements, such as, failure to rent property to qualified tenants, resulting in unavailability or recapture of the tax credits and other tax benefits. First Financial's affordable housing commitments totaled $30.3 million and $31.5 million as of March 31, 2016 and December 31, 2015, respectively. The affordable housing investments resulted in $0.7 million and $0.4 million of tax credits for the three months ended March 31, 2016 and 2015, respectively. First Financial had no affordable housing contingent commitments as of March 31, 2016 or December 31, 2015.

Contingencies/Litigation. First Financial and its subsidiaries are engaged in various matters of litigation, other assertions of improper or fraudulent loan practices or lending violations and other matters from time to time, and have a number of unresolved claims pending. Additionally, as part of the ordinary course of business, First Financial and its subsidiaries are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral and foreclosure interests that are incidental to our regular business activities. While the ultimate liability with respect to these other litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of March 31, 2016. Reserves are established for these various matters of litigation, when appropriate, under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had $0.8 million and $1.3 million of reserves related to litigation matters as of March 31, 2016 and December 31, 2015, respectively.

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NOTE 11:  INCOME TAXES

For the first quarter 2016, income tax expense was $9.9 million, resulting in an effective tax rate of 33.3%, compared with income tax expense of $8.5 million and an effective tax rate of 32.4% for the comparable period in 2015.

At March 31, 2016, and December 31, 2015, First Financial had no FASB ASC Topic 740-10 unrecognized tax benefits recorded. First Financial does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months.

First Financial regularly reviews its tax positions and establishes reserves for income tax-related uncertainties based on estimates of whether it is more likely than not that the tax uncertainty would be sustained upon challenge by the appropriate tax authorities, which would then result in additional taxes, penalties and interest due. These evaluations are inherently subjective as they require material estimates and may be susceptible to significant change.  Management determined that no reserve for income tax-related uncertainties was necessary as of March 31, 2016 and December 31, 2015.

First Financial and its subsidiaries are subject to U.S. federal income tax as well as state and local income tax in several jurisdictions.  The U.S. federal income tax examination for the tax year 2012 was completed in the third quarter of 2015. There was no impact to the Company's financial position and results of operations as a result of this examination. Tax years prior to 2013 have been closed and are no longer subject to U.S. federal income tax examinations. Tax years 2013 through 2015 remain open to examination by the federal taxing authority.

First Financial is no longer subject to state and local income tax examinations for years prior to 2011.  Tax years 2011 through 2015 remain open to state and local examination in various jurisdictions.

NOTE 12:  EMPLOYEE BENEFIT PLANS

First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees and uses a December 31 measurement date for the plan. Plan assets were primarily invested in publicly traded equity mutual funds and fixed income mutual funds. The pension plan does not directly own any shares of First Financial common stock or any other First Financial security or product.

First Financial made no cash contributions to fund the pension plan during the three months ended March 31, 2016, or the year ended December 31, 2015, and does not expect to make cash contributions to the plan through the remainder of the year. As a result of the plan’s actuarial projections, First Financial recorded income of $0.2 million and $0.3 million for each quarter ended March 31, 2016 and 2015, respectively.

The following table sets forth information concerning amounts recognized in First Financial’s Consolidated Statements of Income related to the Company's pension plan:

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Service cost	$	1,308		$	1,175
Interest cost	581			550
Expected return on assets	(2,431		)	(2,375		)
Amortization of prior service cost	(103		)	(100		)
Net actuarial loss	420			450
Net periodic benefit (income) cost	$	(225	)	$	(300	)

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NOTE 13:  EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended
	March 31,
(Dollars in thousands, except per share data)	2016		2015
Numerator
Net income available to common shareholders	$	19,814	$	17,621
Denominator
Basic earnings per common share - weighted average shares	61,036,797		61,013,489
Effect of dilutive securities
Employee stock awards	705,779		567,806
Warrants	97,671		150,549
Diluted earnings per common share - adjusted weighted average shares	61,840,247		61,731,844
Earnings per share available to common shareholders
Basic	$	0.32	$	0.29
Diluted	$	0.32	$	0.29

Warrants to purchase 322,312 and 465,117 shares of the Company's common stock were outstanding as of March 31, 2016 and 2015, respectively. These warrants, each representing the right to purchase one share of common stock, no par value per share, have an exercise price of $12.12 and expire on December 23, 2018.

Stock options and warrants, where the exercise price was greater than the average market price of the common shares, were not included in the computation of net income per diluted share as they would have been antidilutive.  Using the period-end price, there were no out-of-the-money options at March 31, 2016 and 20,626 out-of-the-money options at March 31, 2015.  

NOTE 14:  FAIR VALUE DISCLOSURES

Fair Value Measurement

The fair value framework as disclosed in the 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

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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 previously described are considered Level 3.

First Financial utilizes values provided by third-party pricing vendors to price the investment securities portfolio in accordance with the fair value hierarchy of the Fair Value Topic and reviews the pricing methodologies utilized by the pricing vendors to ensure that the fair value determination is consistent with the applicable accounting guidance.  First Financial’s month-end pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, historical prices and other independent pricing services.  Further, the Company periodically validates the fair values of a sample of securities in the portfolio by comparing the fair values to prices from other independent sources for the same or similar securities.  First Financial analyzes unusual or significant variances, conducts additional research with the pricing vendor, and if necessary, takes appropriate action based on its findings.  The results of the quality assurance process are incorporated into the selection of pricing providers by the portfolio manager.

Other investments. Other investments include holdings in FRB and FHLB stock which are carried at cost.

Loans held for sale. Loans held for sale are carried at 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 market price or 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 and leases. The fair value of commercial and industrial, 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 loans as Level 3 in the fair value hierarchy.

Impaired loans are specifically reviewed for purposes of determining the appropriate amount of impairment to be allocated to the ALLL.  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 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.  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 ALLL 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.

Fair values for purchased impaired loans were estimated using a discounted cash flow methodology that considers factors that include the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, 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 loans are grouped together according to similar characteristics and are treated in the aggregate when applying various valuation techniques. First Financial estimates 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 acquired loans accounted for outside of FASB ASC Topic 310-30 are 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 Company classifies the estimated fair value of covered loans as Level 3 in the fair value hierarchy.

FDIC indemnification asset. Fair value of the FDIC indemnification asset was estimated using projected cash flows related to the loss sharing agreements based on expected reimbursements for losses and the applicable loss sharing percentages. 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 five year period of loss protection expired for the majority of First Financial's covered

27

commercial loans and covered OREO effective October 1, 2014. The Company classifies the estimated fair value of the indemnification asset as Level 3 in the fair value hierarchy.

Accrued interest receivable and payable. The carrying amount of accrued interest receivable and accrued interest payable approximate their fair values and is aligned with the underlying assets or liabilities (Level 1, Level 2 or Level 3).

Deposits. The fair value of demand deposits, savings accounts and certain money-market deposits represents the amount payable on demand at the reporting date.  The carrying amounts for variable-rate CDs approximated their fair values at the reporting date.  The fair value of fixed-rate CDs was estimated using a discounted cash flow calculation which applies the interest rates currently offered for deposits of similar remaining maturities. 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 in 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.  The Company classifies the estimated fair value of long-term debt as Level 2 in the fair value hierarchy.

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 which represents the cost to terminate the swap if First Financial should choose to do so. Additionally, First Financial utilizes an internally-developed model to value the credit risk component of 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.

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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
March 31, 2016
Financial assets
Cash and short-term investments	$	118,257	$	118,257	$	118,257	$	0	$	0
Investment securities held-to-maturity	702,315		718,277		0		718,277		0
Other investments	53,255		N/A		N/A		N/A		N/A
Loans held for sale	15,369		15,369		0		15,369		0
Loans and leases, net of ALLL	5,450,877		5,488,942		0		0		5,488,942
FDIC indemnification asset	16,256		9,077		0		0		9,077
Accrued interest receivable	18,959		18,959		0		6,001		12,958
Financial liabilities
Deposits
Noninterest-bearing	$	1,408,609	$	1,408,609	$	0	$	1,408,609	$	0
Interest-bearing demand	1,430,963		1,430,963		0		1,430,963		0
Savings	1,922,892		1,922,892		0		1,922,892		0
Time	1,414,313		1,418,613		0		1,418,613		0
Total deposits	6,176,777		6,181,077		0		6,181,077		0
Short-term borrowings	969,899		969,899		969,899		0		0
Long-term debt	119,556		123,034		0		123,034		0
Accrued interest payable	3,650		3,650		503		3,147		0

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	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2015
Financial assets
Cash and short-term investments	$	148,575	$	148,575	$	148,575	$	0	$	0
Investment securities held-to-maturity	726,259		731,951		0		731,951		0
Other investments	53,725		N/A		N/A		N/A		N/A
Loans held for sale	20,957		20,957		0		20,957		0
Loans and leases, net of ALLL	5,335,362		5,381,065		0		0		5,381,065
FDIC indemnification asset	17,630		9,756		0		0		9,756
Accrued interest receivable	16,995		16,995		0		5,791		11,204
Financial liabilities
Deposits
Noninterest-bearing	$	1,413,404	$	1,413,404	$	0	$	1,413,404	$	0
Interest-bearing demand	1,414,291		1,414,291		0		1,414,291		0
Savings	1,945,805		1,945,805		0		1,945,805		0
Time	1,406,124		1,406,489		0		1,406,489		0
Total deposits	6,179,624		6,179,989		0		6,179,989		0
Short-term borrowings	938,425		938,425		938,425		0		0
Long-term debt	119,540		118,691		0		118,691		0
Accrued interest payable	5,003		5,003		113		4,890		0

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
March 31, 2016
Assets
Derivatives	$	0	$	25,028	$	0	$	25,028
Investment securities available-for-sale	8,789		1,155,530		0		1,164,319
Total	$	8,789	$	1,180,558	$	0	$	1,189,347
Liabilities
Derivatives	$	0	$	24,952	$	0	$	24,952

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	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
December 31, 2015
Assets
Derivatives	$	0	$	14,111	$	0	$	14,111
Investment securities available-for-sale	8,583		1,182,059		0		1,190,642
Total	$	8,583	$	1,196,170	$	0	$	1,204,753
Liabilities
Derivatives	$	0	$	14,243	$	0	$	14,243

Certain financial assets and liabilities are measured at fair value on a nonrecurring basis.  Adjustments to the fair market value of these assets usually result from the application of lower of cost or fair value accounting or write-downs of individual assets.  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
March 31, 2016
Assets
Loans held for sale	$	0	$	15,369	$	0
Impaired loans	0		0		8,784
OREO	0		0		7,051

	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2015
Assets
Loans held for sale	$	0	$	20,957	$	0
Impaired loans	0		0		8,008
OREO	0		0		7,598

NOTE 15:  BUSINESS COMBINATIONS

Oak Street is a nationwide lender based in Indianapolis, Indiana that provides loans, secured by commissions and cash collateral accounts, primarily to insurance agents and brokers to grow their agency business and maximize their book-of-business value. Oak Street's lending activities are driven by agency acquisitions, agency ownership transitions, the purchase by agencies of books of business, as well as financing general working capital needs.  The underwriting of these loans involves analyses of collateral (through use of Oak Street's proprietary software system) that consists of insurance commissions revenue, which collateral is then monitored by Oak Street Funding throughout the life of the loans. First Financial acquired Oak Street for cash consideration and concurrent with the close of the transaction, First Financial paid off all of Oak Street's existing long-term debt, replacing higher-cost funding with the Company's lower-cost funding sources.

The Oak Street transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available.  As a result, the fair value adjustments for Oak Street may change as information becomes available, but no later than August 2016.

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The following table provides the purchase price calculation as of the acquisition date and the identifiable assets purchased and the liabilities assumed at their estimated fair value:

(Dollars in thousands)	Oak Street
Purchase consideration
Cash consideration	$	110,000
Payoff of long-term borrowings	197,839
Total purchase consideration	$	307,839
Assets acquired
Cash	$	2,248
Loans	237,377
Intangible assets	813
Other assets	2,633
Total assets	$	243,071
Liabilities assumed
Other liabilities	$	1,577
Total liabilities	$	1,577
Net identifiable assets	$	241,494
Goodwill	$	66,345

The goodwill arising from the Oak Street acquisition reflects the business's high growth potential and scalable platform. The acquisition leverages First Financial’s excess capital and is expected to provide additional revenue growth and diversification. The goodwill is not deductible for income tax purposes as the merger was accounted for as a tax-free exchange. The tax-free exchange resulted in a carryover of tax attributes and tax basis to the Company's subsequent income tax filings and was adjusted for any fair value adjustments required in accounting for the acquisitions. For further detail, see Note 6 – Goodwill and Other Intangible Assets.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (MD&A)

FIRST FINANCIAL BANCORP. AND SUBSIDIARIES

(Unaudited)

All reclassifications of prior period amounts, if applicable, have been made to conform to the current period’s presentation and had no effect on the Company's previously reported net income or financial condition.

SUMMARY

First Financial is an $8.2 billion bank holding company headquartered in Cincinnati, Ohio, and through its subsidiaries, operates primarily in Ohio, Indiana and Kentucky.  These subsidiaries include a commercial bank, First Financial Bank, with 101 banking centers and 124 ATMs. First Financial provides banking and financial services products through its five lines of business: commercial, consumer, wealth management, specialty finance and mortgage. The commercial, consumer, specialty finance and mortgage business lines provide credit-based products, deposit accounts, corporate cash management support and other services to commercial and consumer clients. The Bank also has two national lending platforms, one that provides equipment and leasehold improvement financing for franchisees in the quick service and casual dining restaurant sector and another that provides loans secured by commissions and cash collateral accounts primarily to insurance agents and brokers. First Financial Wealth Management provides wealth planning, portfolio management, retail brokerage, trust and retirement plan services and had approximately $2.3 billion in assets under management as of March 31, 2016.

First Financial acquired the banking operations of Peoples Community Bank, Irwin Union Bank and Trust Company and Irwin Union Bank, F.S.B., through FDIC-assisted transactions in 2009. In connection with these FDIC-assisted transactions, First Financial entered into loss sharing agreements with the FDIC. Under the terms of these agreements the FDIC reimburses First Financial for a percentage of losses with respect to certain loans (covered loans) and other real estate owned (covered OREO) (collectively, covered assets). These agreements provide for loss protection on covered single-family, residential loans for a period of ten years and First Financial is required to share any recoveries of previously charged-off amounts for the same time period, on the same pro-rata basis with the FDIC. All other covered loans were provided loss protection for a period of five years and recoveries of previously charged-off amounts must be shared with the FDIC for an additional three year period, on the same pro-rata basis. The Company’s five year loss sharing indemnification period related to non-single-family loans expired effective October 1, 2014. The loss sharing protection related to all other covered loans of approximately $109.2 million will expire October 1, 2019.  Covered assets represented approximately 1.3% of First Financial’s total assets at March 31, 2016.

MARKET STRATEGY AND BUSINESS COMBINATIONS

Oak Street. On August 14, 2015 First Financial Bank completed its acquisition of Oak Street Holdings Corporation, the parent of Oak Street Funding. Formed in 2003, Oak Street Funding is a nationwide lender based in Indianapolis, Indiana that provides loans, secured by commissions and cash collateral accounts, primarily to insurance agents and brokers to grow their agency business and maximize their book-of-business value. Oak Street's lending activities are driven by agency acquisitions, agency ownership transitions, the purchase by agencies of books of business, as well as financing general working capital needs.  The underwriting of these loans involves analysis of collateral (through Oak Street's proprietary technology platform) that consists of insurance commissions revenue, which is then monitored by Oak Street throughout the life of the loans. First Financial acquired Oak Street for cash consideration and concurrent with the close of the transaction, First Financial paid off all of Oak Street's existing long-term debt, replacing higher-cost funding with the Company's lower-cost funding sources.

Oak Street utilizes deep industry knowledge, a proprietary technology platform and partner relationships to offer commission-based commercial financing for insurance professionals and third-party loan servicing for financial institutions nationwide. Oak Street's well-developed business model provides a strong strategic complement to First Financial's existing nationwide franchise finance business and an opportunity to expand and diversify the Company's service offerings.

The following table provides a summary of the purchase consideration, assets acquired and liabilities assumed at their estimated fair value, and the resulting goodwill from the Oak Street acquisition. For further detail on the Oak Street acquisition, see Note 15 - Business Combinations in the Notes to the Consolidated Financial Statements.

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(Dollars in thousands)	Oak Street
Purchase consideration
Cash consideration	$	110,000
Payoff of long-term borrowings	197,839
Total purchase consideration	307,839
Assets acquired
Cash	2,248
Loans	237,377
Intangible assets	813
Other assets	2,633
Total assets	243,071
Liabilities assumed
Other liabilities	1,577
Total liabilities	1,577
Net identifiable assets	241,494
Goodwill	$	66,345

OVERVIEW OF OPERATIONS

First quarter2016 net income was $19.8 million and earnings per diluted common share were $0.32. This compares with first quarter 2015 net income of $17.6 million and earnings per diluted common share of $0.29.

Return on average assets for the first quarter 2016 was 0.98% compared to 0.99% for the comparable period in 2015 and return on average shareholders’ equity for the first quarter 2016 was 9.70% compared to 9.06% for the comparable period in 2015.

A discussion of First Financial's results of operations for the three months ended March 31, 2016 follows.

NET INTEREST INCOME

Net interest income, First Financial’s principal source of income, is the excess of interest received from earning assets, including loan-related fees, over interest paid on interest-bearing liabilities. The amount of net interest income is determined by the volume and mix of earning assets, the rates earned on such earning assets and the volume, mix and rates paid for the deposits and borrowed money that support the earning assets.

For analytical purposes, net interest income is also presented in the table that follows, adjusted to a tax equivalent basis assuming a 35.00% marginal tax rate for interest earned on tax-exempt assets such as municipal loans and investments.  This is to recognize the income tax savings that facilitates a comparison between taxable and tax-exempt assets.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis as these measures provide useful information to make peer comparisons.

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	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Net interest income	$	66,555		$	58,586
Tax equivalent adjustment	1,052			983
Net interest income - tax equivalent	$	67,607		$	59,569
Average earning assets	$	7,398,013		$	6,576,660
Net interest margin (1)	3.62		%	3.61		%
Net interest margin (fully tax equivalent) (1)	3.68		%	3.67		%

⁽¹⁾ Margins are calculated using annualized net interest income divided by average earning assets.

Net interest income for the first quarter 2016 was $66.6 million, increasing $8.0 million or 13.6% from first quarter 2015 net interest income of $58.6 million. Net interest income on a fully tax-equivalent basis for the first quarter 2016 was $67.6 million compared to $59.6 million for the first quarter 2015. Net interest margin on a fully tax equivalent basis was 3.68% for the first quarter 2016 compared to 3.67% for the first quarter 2015.  The increase in net interest income for the first quarter 2016 as compared to the same period in 2015 was primarily driven by higher earning asset balances as a result of strong organic loan growth as well as the Oak Street acquisition. The increase in net interest margin was primarily related to higher yields on loans and securities, partially offset by the higher cost of interest-bearing liabilities.

The increase in net interest income for the first quarter 2016, as compared to the first quarter 2015, was driven by a $10.8 million or 16.9% increase in total interest income to $74.8 million in the first quarter of 2016 from $64.0 million in the first quarter 2015. Partially offsetting the increase in interest income was a corresponding increase in interest expense of $2.8 million, or 52.0%, to $8.2 million in the first quarter 2016 from $5.4 million in the first quarter 2015.

The increase in total interest income resulted from higher interest and fee income earned on the Company's loan portfolio. This was primarily a result of strong organic loan growth in recent periods as well as the impact from the addition of $237.4 million of high-yielding loans acquired in the Oak Street transaction and the impact from the fourth quarter 2015 increase in interest rates. Average loan balances increased $642.5 million or 13.5% in the first quarter 2016 as compared to the first quarter 2015.

Interest expense increased as the average balance of interest-bearing deposits increased $387.7 million, or 8.9%, and average total borrowed funds increased $374.7 million, or 54.2%, from the first quarter 2015. Average interest-bearing deposit balances increased as a result of strong deposit generation efforts in recent quarters and average total borrowed funds increased as a result of the issuance of $120.0 million of subordinated notes during the third quarter of 2015 as well a $303.0 million, or 47.1%, increase in average short-term borrowings utilized to manage the Company's liquidity needs and support organic growth. The cost of funds related to interest-bearing deposits increased 2 bps to 47 bps for the first quarter 2016 from 45 bps for the comparable quarter in 2015, negatively impacting net interest margin.

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CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS

	Quarterly Averages
	March 31, 2016					March 31, 2015
(Dollars in thousands)	Balance			Yield		Balance			Yield
Earning assets
Investments
Investment securities	$	1,938,772		2.59	%	$	1,762,622		2.47	%
Interest-bearing deposits with other banks	24,291			0.53	%	21,255			0.27	%
Gross loans (1)	5,434,950			4.59	%	4,792,783			4.51	%
Total earning assets	7,398,013			4.06	%	6,576,660			3.95	%
Nonearning assets
Allowance for loan and lease losses	(54,882		)			(53,648		)
Cash and due from banks	117,782					112,841
Accrued interest and other assets	658,032					565,460
Total assets	$	8,118,945				$	7,201,313
Interest-bearing liabilities
Deposits
Interest-bearing demand	$	1,391,591		0.16	%	$	1,176,263		0.08	%
Savings	1,938,206			0.26	%	1,914,723			0.27	%
Time	1,419,456			1.05	%	1,270,539			1.07	%
Total interest-bearing deposits	4,749,253			0.47	%	4,361,525			0.45	%
Borrowed funds
Short-term borrowings	946,186			0.50	%	643,187			0.19	%
Long-term debt	119,553			5.17	%	47,825			2.54	%
Total borrowed funds	1,065,739			1.02	%	691,012			0.35	%
Total interest-bearing liabilities	5,814,992			0.57	%	5,052,537			0.44	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits	1,386,768					1,286,067
Other liabilities	95,597					74,198
Shareholders' equity	821,588					788,511
Total liabilities and shareholders' equity	$	8,118,945				$	7,201,313
Net interest income	$	66,555				$	58,586
Net interest spread				3.49	%				3.51	%
Contribution of noninterest-bearing sources of funds				0.13	%				0.10	%
Net interest margin (2)				3.62	%				3.61	%

(1) Loans held for sale, nonaccrual loans, covered loans and indemnification asset are included in gross loans.

(2) The net interest margin exceeds the interest spread as noninterest-bearing funding sources, demand deposits, other liabilities and shareholders' equity also support earning assets.

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RATE/VOLUME ANALYSIS

The impact on net interest income from changes in interest rates as well as the volume of interest-earning assets and interest-bearing liabilities is illustrated in the table below:

	Changes for the three months ended March 31, 2016
	Comparable quarter income variance
(Dollars in thousands)	Rate		Volume		Total
Earning assets
Investment securities	$	546	$	1,264	$	1,810
Interest-bearing deposits with other banks	14		4		18
Gross loans (1)	1,003		7,956		8,959
Total earning assets	1,563		9,224		10,787
Interest-bearing liabilities
Total interest-bearing deposits	203		507		710
Borrowed funds
Short-term borrowings	484		383		867
Long-term debt	310		931		1,241
Total borrowed funds	794		1,314		2,108
Total interest-bearing liabilities	997		1,821		2,818
Net interest income	$	566	$	7,403	$	7,969

(1) Loans held for sale, nonaccrual loans, covered loans and indemnification asset are included in gross loans.

NONINTEREST INCOME

First quarter 2016 noninterest income was $15.5 million, representing a $2.1 million or 11.9% decrease from noninterest income of $17.6 million in the first quarter 2015.  The decrease in noninterest income from the comparable quarter in 2015 was due primarily to a $1.3 million, or 37.5%, decrease in other noninterest income, a $1.1 million, or 53.6%, decrease in accelerated discount on covered loans and a $0.3 million, or 19.3%, decrease in net gains from sales of loans, partially offset by a $0.5 million, or 46.0%, increase in FDIC loss sharing income.

The decrease in other noninterest income was impacted by a $0.7 million recapture of a previously accrued liability due to the favorable resolution of a former Irwin subsidiary matter in the first quarter 2015 as well as a $0.3 million decrease in distributions received from limited partnership investments during the period. The decrease in net gains from sales of loans was primarily related to higher sales volumes during the first quarter 2015 compared to the first quarter of 2016.

Income from the accelerated discount on covered loans declined from $2.1 million during the first quarter 2015 to $1.0 million for the first quarter 2016. Accelerated discounts on covered loans that prepay result from the accelerated recognition of the remaining covered loan discount that would have been recognized over the expected life of the loan had it not prepaid. Lower income from the accelerated discount on covered loans during the first quarter 2016 was related to lower levels of prepayment activity during the period.

FDIC loss sharing income represents the proportionate share of credit losses or recoveries on covered assets that First Financial expects to receive from/pay to the FDIC. FDIC loss sharing income increased from negative loss sharing income of $1.0 million during the first quarter 2015 to $0.6 million of negative loss sharing income for the first quarter 2016. Negative FDIC loss sharing income during the first quarters of 2016 and 2015 reflect a net payable due to the FDIC and a corresponding decrease to the FDIC indemnification asset.

NONINTEREST EXPENSE

First quarter 2016 noninterest expense was $50.7 million compared with $48.1 million for the first quarter of 2015. The $2.7 million, or 5.5% increase from the comparable quarter in 2015 was primarily attributable to a $2.7 million, or 9.9%, increase in salary and employee benefits and a $0.7 million, or 12.3%, increase in other noninterest expenses. These increases were partially offset by a $0.7 million, or 140.1%, decline in OREO losses for the period.

The increase in salaries and benefits was primarily related to the staff additions from the Oak Street acquisition, annual salary adjustments and higher health care costs during the period. The increase in other noninterest expense was primarily related to a

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$0.2 million increase in credit origination expenses resulting from strong origination volume during the first quarter of 2016 as well as a $0.2 million increase in losses on the sale of fixed assets during the period.

Losses on the sale of OREO properties declined in the first quarter of 2016 as the Company incurred $0.5 million of OREO losses in the first quarter of 2015 and $0.2 million of OREO gains in the first quarter of 2016.

INCOME TAXES

Income tax expense was $9.9 million and $8.5 million for the first quarter of 2016 and 2015, respectively. The effective tax rate for the first quarter of 2016 and 2015 was 33.3% and 32.4%, respectively. The increase in the effective tax rate for the first quarter 2016, as compared to the same period in 2015, was primarily the result of a favorable adjustment related to a change in state tax laws recorded during the first quarter of 2015.

While the Company's effective tax rate may fluctuate from quarter to quarter due to tax jurisdiction changes and the level of tax-enhanced assets, the overall effective tax rate for 2016 is expected to be approximately 33.0%.

LOANS

First Financial continued to experience strong loan demand in 2016 as a result of the Company's sales efforts, expanded presence in key metropolitan markets and investments in a diversified product suite. Loans, excluding loans held for sale, totaled $5.5 billion as of March 31, 2016, increasing $115.8 million, or 2.1%, compared to December 31, 2015.  The increase in loan balances from December 31, 2015 was primarily related to an $81.6 million, or 4.9% increase in commercial and industrial loans and a $29.7 million, or 9.5%, increase in construction real estate loans during the period.

First quarter2016 average loans, excluding loans held for sale, increased $642.5 million or 13.5% from the first quarter of 2015.  The increase in average loans, excluding loans held for sale, was primarily the result of a $356.4 million, or 27.4%, increase in commercial and industrial loans, a $141.3 million, or 6.6%, increase in commercial real estate loans and a $107.2 million, or 49.8%, increase in construction real estate loans. Increases in average loan balances were attributable to strong organic loan growth as well as the Oak Street acquisition.

Covered loans declined 3.6% to $109.2 million at March 31, 2016 from $113.3 million as of December 31, 2015.  Declines in covered loan balances were expected as there were no acquisitions of loans subject to loss sharing agreements during the period. The covered loan portfolio will continue to decline through payoffs, loan sales, charge-offs and termination or expiration of loss sharing coverage unless First Financial acquires additional loans subject to loss sharing agreements in the future. The ten year period of loss protection on all remaining covered loans and covered OREO expires October 1, 2019.

ASSET QUALITY

Nonperforming assets consist of nonaccrual loans, accruing TDRs (collectively, nonperforming loans) and OREO. 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 90 days or more past due. Generally, loans are classified as nonaccrual 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 classified as nonaccrual.

Loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, are referred to as purchased impaired loans. Purchased impaired loans were grouped into pools for purposes of periodically re-estimating expected cash flows and recognizing impairment or improvement in the loan pools. Accordingly, 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 provision for loan and lease losses or prospective yield adjustments.

As a result of the Company's strong resolution efforts, nonperforming assets decreased $6.1 million, or 8.7%, to $64.1 million at March 31, 2016 from $70.1 million as of December 31, 2015, due to a $4.7 million, or 8.3%, decline in nonperforming loans and a $1.3 million, or 9.9%, decline in OREO balances during the period. The decline in nonperforming assets during 2016 reflects the Company's disciplined underwriting approach, ongoing resolution efforts and stable credit outlook.

Nonperforming loans declined during the first three months of 2016, as commercial and industrial loans classified as nonaccrual decreased $4.5 million, or 54.4%, nonaccrual commercial real estate loans decreased $0.9 million, or 9.7%, and

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residential real estate loans classified as nonaccrual decreased $0.8 million, or 15.6%. These decreases were partially offset by a $1.3 million, or 4.3%, increase in accruing TDRs during the period.

OREO represents properties acquired by First Financial primarily through loan defaults by borrowers. OREO balances declined during the first three months of 2016 as resolutions and valuation adjustments of $2.2 million exceeded additions of $0.9 million during the period.

Loans are classified as TDRs when borrowers are experiencing financial difficulties and concessions are made by the Company that would not otherwise be considered for a borrower with similar credit characteristics. 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 restructured terms of the loan agreement. TDRs totaled $37.7 million at March 31, 2016, which was a $0.5 million, or 1.3%, decrease from $38.2 million at December 31, 2015.

Classified assets, which are defined by the Company as nonperforming assets plus performing loans internally rated substandard or worse, totaled $133.9 million as of March 31, 2016 compared to $132.4 million at December 31, 2015. Loans 30-to-89 days past due increased to $14.7 million, or 0.27% of period end loans at March 31, 2016, as compared to $11.9 million, or 0.22%, at December 31, 2015.

The table that follows shows the categories that are included in nonperforming and underperforming assets, as well as related credit quality ratios as of March 31, 2016 and the four previous quarters.

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	Quarter ended
	2016			2015
(Dollars in thousands)	Mar. 31,			Dec. 31,			Sep. 30			Jun. 30,			Mar. 31
Nonperforming loans, nonperforming assets, and underperforming assets
Nonaccrual loans (1)
Commercial and industrial	$	3,757		$	8,231		$	7,191		$	6,683		$	6,926
Lease financing	121			122			0			0			0
Real estate - construction	0			0			79			223			223
Real estate - commercial	8,178			9,059			17,228			21,186			29,925
Real estate - residential	4,243			5,027			4,940			5,257			6,100
Home equity	3,018			2,787			2,702			2,735			2,462
Installment	113			127			321			305			278
Covered/formerly covered loans	2,577			2,644			3,252			3,284			3,239
Nonaccrual loans	22,007			27,997			35,713			39,673			49,153
Accruing troubled debt restructurings	30,127			28,876			20,226			20,084			15,429
Total nonperforming loans	52,134			56,873			55,939			59,757			64,582
Other real estate owned	11,939			13,254			15,187			16,401			20,906
Total nonperforming assets	64,073			70,127			71,126			76,158			85,488
Accruing loans past due 90 days or more	59			108			58			70			85
Total underperforming assets	$	64,132		$	70,235		$	71,184		$	76,228		$	85,573
Classified assets, excluding covered/formerly covered	$	113,883		$	106,468		$	97,022		$	106,280		$	109,090
Covered/formerly covered classified assets	20,057			25,963			33,110			33,651			44,727
Total classified assets	$	133,940		$	132,431		$	130,132		$	139,931		$	153,817
Credit quality ratios
Allowance for loan and lease losses to
Nonaccrual loans	244.16		%	190.73		%	149.33		%	133.28		%	107.98		%
Nonperforming loans	103.07		%	93.89		%	95.34		%	88.49		%	82.18		%
Total ending loans	0.98		%	0.99		%	1.02		%	1.09		%	1.11		%
Nonperforming loans to total loans	0.95		%	1.06		%	1.07		%	1.23		%	1.36		%
Nonperforming assets to
Ending loans, plus OREO	1.16		%	1.30		%	1.36		%	1.56		%	1.79		%
Total assets	0.78		%	0.86		%	0.90		%	1.03		%	1.18		%
Nonperforming assets
Ending loans, plus OREO	0.62		%	0.76		%	0.97		%	1.15		%	1.46		%
Total assets	0.41		%	0.51		%	0.65		%	0.76		%	0.97		%
(1) Nonaccrual loans include nonaccrual TDRs of $7.5 million, $9.3 million, $13.6 million, $14.1 million and $20.3 million, as of March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively.

INVESTMENTS

First Financial's investment portfolio totaled $1.9 billion, or 23.4% of total assets, at March 31, 2016 compared with a balance of $2.0 billion, or 24.2% of total assets, at December 31, 2015.  Securities available-for-sale at March 31, 2016 and December 31, 2015 totaled $1.2 billion, while held-to-maturity securities totaled $702.3 million at March 31, 2016 compared to $726.3 million at December 31, 2015.

The investment portfolio declined $50.7 million, or 2.6%, during the first three months of 2016 and the overall duration of the investment portfolio decreased to 3.0 years as of March 31, 2016 from 3.4 years as of December 31, 2015, as the Company adjusted investment strategies in response to market conditions and the position of its balance sheet.

The Company invests in certain securities whose realization is dependent on future principal and interest repayments and thus carry credit risk. As in past quarters, First Financial has avoided adding to its portfolio any particular securities that would

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materially increase credit risk or geographic concentration risk and First Financial continuously monitors credit risk and geographic concentration risk in its evaluation of market opportunities that would enhance the overall performance of the portfolio.

First Financial recorded a $2.1 million unrealized after-tax gain on the investment portfolio at March 31, 2016, as a component of equity in accumulated other comprehensive income. The total unrealized gain on the investment portfolio increased $7.0 million from a $4.9 million unrealized after-tax loss at December 31, 2015 due to favorable movements in interest rates during the first quarter 2016.

First Financial will continue to monitor loan and deposit demand, as well as balance sheet composition, capital sensitivity and the interest rate environment as it manages investment strategies in future periods.

DEPOSITS AND FUNDING

Total deposits as of March 31, 2016 were $6.2 billion, representing a decrease of $2.8 million compared to December 31, 2015, as total interest-bearing deposits increased $1.9 million and total noninterest-bearing deposits decreased $4.8 million.  

Non-time deposit balances totaled $4.8 billion as of March 31, 2016, decreasing $11.0 million, or 0.2%, compared to December 31, 2015, while time deposit balances increased $8.2 million, or 0.6%.

Average deposits increased $488.4 million, or 8.6% from March 31, 2015, to $6.1 billion at March 31, 2016 due to a $215.3 million, or 18.3%, increase in average interest-bearing demand deposits, a $148.9 million, or 11.7%, increase in average time deposits and a $100.7 million, or 7.8%, increase in average noninterest-bearing deposits. The increase in average time deposits was impacted by a $211.5 million increase in brokered CDs that First Financial originated in conjunction with the Oak Street acquisition during the third quarter of 2015.

Borrowed funds totaled $1.1 billion at March 31, 2016 and December 31, 2015. During the third quarter of 2015, First Financial issued $120.0 million of subordinated notes. The subordinated notes have a fixed interest rate of 5.125% payable semiannually and mature on August 25, 2025. These notes are not redeemable by the Company or callable by the holders of the notes prior to maturity. The subordinated notes are treated as Tier 2 capital for regulatory capital purposes and are included in Long-term debt on the Consolidated Balance Sheets. First Financial also had $894.4 million in short-term borrowings with the FHLB at March 31, 2016 and $849.1 million as of December 31, 2015. These short-term borrowings are used to manage the Company's normal liquidity needs and support the Company's asset and liability management strategies.

LIQUIDITY

Liquidity management is the process by which First Financial manages the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost. These funding commitments include withdrawals by depositors, credit commitments to borrowers, shareholder dividends, share repurchases, operating expenses and capital expenditures. Liquidity is derived primarily from deposit growth, principal and interest payments on loans and investment securities, maturing loans and investment securities, access to wholesale funding sources and collateralized borrowings.

First Financial’s most stable source of liability-funded liquidity for both long and short-term needs is deposit growth and retention of the core deposit base. In addition to core deposit funding, First Financial also utilizes a variety of other short and long-term funding sources, which include subordinated notes, longer-term advances from the FHLB and its short-term line of credit.

As of March 31, 2016 and December 31, 2015, outstanding subordinated debt totaled $118.3 million, which included prepaid debt issuance costs of $1.7 million. Long-term debt also included FHLB long-term advances of $0.4 million and $0.5 million as of March 31, 2016 and December 31, 2015, respectively.

First Financial's total remaining borrowing capacity from the FHLB was $257.5 million at March 31, 2016. For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB. First Financial pledged certain eligible residential and farm real estate loans, home equity lines of credit and government and agency securities totaling $3.2 billion as collateral for borrowings from the FHLB as of March 31, 2016.  

In conjunction with the issuance of the subordinated notes, both First Financial and the Bank received investment grade credit ratings from an independent rating agency. These credit ratings impact the cost and availability of financing to First Financial, and a downgrade to these credit ratings could affect First Financial's or the Bank’s abilities to access the credit markets and

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potentially increase borrowing costs, which would negatively impact financial condition and liquidity. Key factors in maintaining high credit ratings include consistent and diverse earnings, strong credit quality and capital ratios, diverse funding sources and disciplined liquidity monitoring procedures.

First Financial maintains a short-term credit facility with an unaffiliated bank for $15.0 million that matures on May 30, 2016. This facility can have a variable or fixed interest rate and provides First Financial additional liquidity, if needed, for various corporate activities, including the repurchase of First Financial shares and the payment of dividends to shareholders. As of March 31, 2016 and December 31, 2015, there was no outstanding balance. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this line of credit as of March 31, 2016 and December 31, 2015.

First Financial's principal source of asset-funded liquidity is marketable investment securities, particularly those of shorter maturities. The market value of investment securities classified as available-for-sale totaled $1.2 billion at March 31, 2016.  Securities classified as held-to-maturity that are maturing within a short period of time are an additional source of liquidity and totaled $5.1 million at March 31, 2016.  Other types of assets such as cash and due from banks, interest-bearing deposits with other banks and loans maturing within one year, are also sources of liquidity.

At March 31, 2016, in addition to liquidity on hand of $118.3 million, First Financial had unused and available overnight wholesale funding of $1.6 billion, or 19.9% of total assets, to fund loan and deposit activities, as well as general corporate requirements.

Certain restrictions exist regarding the ability of First Financial’s subsidiary, First Financial Bank, to transfer funds to First Financial in the form of cash dividends, loans, other assets or advances.  The approval of the Bank's primary federal regulator is required to pay dividends in excess of regulatory limitations.  Dividends paid to First Financial from the Bank totaled $13.0 million for the first three months of 2016.  As of March 31, 2016, First Financial Bank had retained earnings of $458.4 million of which $114.4 million was available for distribution to First Financial without prior regulatory approval. Additionally, First Financial had $50.1 million in cash at the parent company as of March 31, 2016, which approximates the Company’s annual regular shareholder dividend and operating expenses.

First Financial did not repurchase any of the Company's common stock during the first three months of 2016 or 2015.

Capital expenditures, such as banking center expansions and technology investments were $4.9 million and $2.3 million for the first three months of 2016 and 2015, respectively. Management believes that First Financial has sufficient liquidity to fund its future capital expenditure commitments.

Management is not aware of any other events or regulatory requirements that, if implemented, are likely to have a material effect on First Financial’s liquidity.

CAPITAL

Risk-Based Capital. The Board of Governors of the Federal Reserve System approved a final rule implementing changes intended to strengthen the regulatory capital framework for all banking organizations (Basel III) which became effective January 1, 2015, subject to a phase-in period for certain provisions. Basel III establishes and defines quantitative measures to ensure capital adequacy which require First Financial to maintain minimum amounts and ratios of Common Equity tier 1 capital, total and tier 1 capital to risk-weighted assets and tier 1 capital to average assets (leverage ratio).

The rule includes a new minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, which began on January 1, 2016 at 0.625% and will be phased in over a four-year period, increasing by the same amount on each subsequent January 1, until fully phased-in on January 1, 2019. Further, Basel III increased the minimum ratio of tier 1 capital to risk-weighted assets increased from 4.0% to 6.0% and all banks are now subject to a 4.0% minimum leverage ratio. The required total risk-based capital ratio was unchanged. Failure to maintain the required common equity tier 1 capital conservation buffer will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees. 

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Management believes, as of March 31, 2016, that First Financial met all capital adequacy requirements to which it was subject.  The Company's most recent regulatory notifications categorized First Financial as "well-capitalized" under the regulatory framework for prompt corrective action.  To be categorized as well-capitalized, First Financial must maintain minimum Total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage ratios as set forth in the table below. There have been no conditions or events since those notifications that management believes has changed the Company's categorization.

Consolidated regulatory capital ratios at March 31, 2016, included the leverage ratio of 8.27%, common equity tier 1 capital ratio of 10.17%, tier 1 capital ratio of 10.17% and total capital ratio of 12.86%.  All regulatory capital ratios exceeded the amounts necessary to be classified as “well capitalized,” and total regulatory capital exceeded the “minimum” requirement by $274.0 million on a consolidated basis.  

The revised capital requirements also provide strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans, requiring higher capital allocations. First Financial's tier 1 and total capital ratios declined from 10.29% and 13.04%, respectively, as of December 31, 2015 to 10.17% and 12.86% as of March 31, 2016. The declines in the Company's capital ratios were due primarily to an increase in risk-weighted assets resulting from organic loan growth, partially offset by an increase in capital from retained earnings during the period. The leverage ratio declined to 8.27% at March 31, 2016 compared to 8.33% as of December 31, 2015 and the Company’s tangible common equity ratio increased from 7.53% at December 31, 2015 to 7.71% during the current quarter.

The following table presents the actual and required capital amounts and ratios as of March 31, 2016 under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of March 31, 2016 based on the phase-in provisions of the Basel III Capital Rules as well as the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered "well capitalized" are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

	Actual				Minimum capital required - Basel III current period				Required to be considered well capitalized - current period				Minimum capital required - Basel III fully phased-in
(Dollars in thousands)	Capital amount		Ratio		Capital amount		Ratio		Capital amount		Ratio		Capital amount		Ratio
March 31, 2016
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	658,001	10.17	%	$	331,492	5.125	%	N/A		N/A		$	452,770	7.00	%
First Financial Bank	709,620		11.00	%	330,662		5.125	%	$	419,376	6.50	%	451,636		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	658,105		10.17	%	428,514		6.625	%	N/A		N/A		549,792		8.50	%
First Financial Bank	709,724		11.00	%	427,441		6.625	%	516,156		8.00	%	548,415		8.50	%
Total capital to risk-weighted assets
Consolidated	831,924		12.86	%	557,877		8.625	%	N/A		N/A		679,155		10.50	%
First Financial Bank	771,514		11.96	%	556,480		8.625	%	645,195		10.00	%	677,454		10.50	%
Leverage ratio
Consolidated	658,105		8.27	%	318,211		4.00	%	N/A		N/A		318,211		4.00	%
First Financial Bank	709,724		8.93	%	317,920		4.00	%	397,400		5.00	%	317,920		4.00	%

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The following table presents the actual and required capital amounts and ratios as of December 31, 2015 under the regulatory capital rules then in effect.

	Actual			Minimum capital required - Basel III				Required to be considered well capitalized			Minimum capital required - Basel III fully phased-in
(Dollars in thousands)	Capital amount	Ratio		Capital amount		Ratio		Capital amount	Ratio		Capital amount		Ratio
December 31, 2015
Common equity tier 1 capital to risk-weighted assets
Consolidated	$648,748	10.28	%	$	283,866	4.50	%	N/A	N/A		$	441,570	7.00	%
First Financial Bank	647,844	10.30	%	283,080		4.50	%	408,894	6.50	%	440,347		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	648,852	10.29	%	378,488		6.00	%	N/A	N/A		536,192		8.50	%
First Financial Bank	647,948	10.30	%	377,440		6.00	%	503,254	8.00	%	534,707		8.50	%
Total capital to risk-weighted assets
Consolidated	822,431	13.04	%	504,651		8.00	%	N/A	N/A		662,355		10.50	%
First Financial Bank	709,306	11.28	%	503,254		8.00	%	629,067	10.00	%	660,521		10.50	%
Leverage ratio
Consolidated	648,852	8.33	%	311,481		4.00	%	N/A	N/A		311,481		4.00	%
First Financial Bank	647,948	8.33	%	311,205		4.00	%	389,006	5.00	%	311,205		4.00	%

Over an extended period, the Company generally expects to return to shareholders a target range of 60% - 80% of earnings through a combination of its regular dividend and share repurchases while still maintaining capital ratios that exceed internal target thresholds and current regulatory capital requirements under Basel III.

Shareholder Dividends. First Financial paid a dividend of $0.16 per common share on April 1, 2016 to shareholders of record as of March 2, 2016. Additionally, First Financial's board of directors authorized a dividend of $0.16 per common share for the next regularly scheduled dividend, payable on July 1, 2016 to shareholders of record as of June 1, 2016.

Share Repurchases. In October 2012, First Financial's board of directors approved a share repurchase plan under which the Company has the ability to repurchase up to 5,000,000 shares. During the first quarters of 2016 and 2015, First Financial did not repurchase any shares. At March 31, 2016, 3,509,133 common shares remained available for repurchase under the 2012 share repurchase plan.

Shareholders' Equity. Total shareholders’ equity at March 31, 2016 was $826.6 million compared to total shareholders’ equity at December 31, 2015 of $809.4 million.

For further detail, see the Consolidated Statements of Changes in Shareholders’ Equity.

RISK MANAGEMENT

First Financial manages risk through a structured ERM approach that routinely assesses the overall level of risk, identifies specific risks and evaluates the steps being taken to mitigate those risks. First Financial continues to enhance its risk management capabilities and has embedded risk awareness as part of the culture of the Company.  First Financial has identified nine types of risk that it monitors in its ERM framework.  These risks include credit, market, operational, compliance, strategic, reputation, information technology, legal and environmental/external.

For a full discussion of these risks, see the Risk Management section in Management's Discussion and Analysis in First Financial’s 2015 Annual Report. The sections that follow provide additional discussion related to credit risk and market risk.

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CREDIT RISK

Credit risk represents the risk of loss due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms. First Financial manages credit risk through its underwriting process, periodically reviewing and approving its credit exposures using credit policies and guidelines approved by its board of directors.  

Allowance for loan and lease losses. First Financial records a provision for loan and lease losses in the Consolidated Statements of Income to maintain the ALLL at a level considered sufficient to absorb probable incurred loan and lease losses inherent in the portfolio.

The ALLL was $53.7 million as of March 31, 2016 and $53.4 million as of December 31, 2015.  As a percentage of period-end loans, the ALLL was 0.98% as of March 31, 2016 compared to 0.99% as of December 31, 2015. The ALLL was relatively unchanged from December 31, 2015, consistent with the Company's stable overall credit outlook.

The ALLL as a percentage of nonaccrual loans, including nonaccrual TDRs, was 244.2% at March 31, 2016 compared with 190.7% at December 31, 2015. The ALLL as a percentage of nonperforming loans, which include accruing TDRs, increased to 103.1% as of March 31, 2016 compared with 93.9% as of December 31, 2015 due to a $4.7 million, or 8.3%, decrease in nonperforming loans.

First quarter 2016 net charge-offs were $1.3 million or 0.10% of average loans and leases on an annualized basis, compared to net charge-offs of $1.8 million or 0.16% of average loans and leases on an annualized basis for the comparable quarter in 2015. The $0.5 million decrease in net charge-offs from the comparable period in 2015 was primarily the result of lower charge-offs of commercial and industrial, commercial real estate, retail real estate and home equity loans, partially offset by a decrease in recoveries on commercial and industrial loans during the period.

Provision expense is a product of the Company's ALLL model, as well as net charge-off activity during the period. First quarter 2016 provision expense was $1.7 million compared to $2.1 million during the comparable quarter in 2015.

See Note 5 - Allowance for Loan and Lease Losses in the Notes to Consolidated Financial Statements, for further discussion of First Financial's ALLL.

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The table that follows includes the activity in the allowance for loan and lease losses for the quarterly periods presented.

	Three months ended
	2016			2015
(Dollars in thousands)	Mar. 31,			Dec. 31,			Sep. 30			Jun. 30,			Mar. 31
Allowance for loan and lease loss activity
Balance at beginning of period	$	53,398		$	53,332		$	52,876		$	53,076		$	52,858
Provision for loan losses	1,655			1,864			2,647			3,070			2,060
Gross charge-offs
Commercial and industrial	479			777			1,808			1,256			1,567
Real estate-construction	3			0			85			0			0
Real estate-commercial	1,262			4,415			1,082			2,716			1,870
Real estate-residential	45			82			288			755			406
Home equity	340			633			268			249			741
Installment	73			129			155			59			166
All other	240			242			276			237			294
Total gross charge-offs	2,442			6,278			3,962			5,272			5,044
Recoveries
Commercial and industrial	222			841			374			326			2,183
Real estate-construction	26			104			87			17			45
Real estate-commercial	442			2,927			691			1,105			491
Real estate-residential	63			214			237			43			64
Home equity	188			104			236			372			289
Installment	99			216			94			68			85
All other	81			74			52			71			45
Total recoveries	1,121			4,480			1,771			2,002			3,202
Total net charge-offs	1,321			1,798			2,191			3,270			1,842
Ending allowance for loan and lease losses	$	53,732		$	53,398		$	53,332		$	52,876		$	53,076
Net charge-offs to average loans and leases (annualized)
Commercial and industrial	0.06		%	(0.02		)%	0.39		%	0.28		%	(0.19		)%
Real estate-construction	(0.03		)%	(0.14		)%	0.00		%	(0.03		)%	(0.08		)%
Real estate-commercial	0.15		%	0.27		%	0.07		%	0.31		%	0.26		%
Real estate-residential	(0.01		)%	(0.10		)%	0.04		%	0.57		%	0.28		%
Home equity	0.13		%	0.45		%	0.03		%	(0.11		)%	0.40		%
Installment	(0.25		)%	(0.84		)%	0.58		%	(0.08		)%	0.72		%
All other	0.47		%	0.51		%	0.72		%	0.55		%	0.87		%
Total net charge-offs	0.10		%	0.14		%	0.17		%	0.27		%	0.16		%

46

MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, foreign exchange rates and equity prices. The primary source of market risk for First Financial is interest rate risk. Interest rate risk is the risk to earnings and the value of the Company's equity arising from changes in market interest rates and arises in the normal course of business to the extent that there is a divergence between the amount of First Financial's interest-earning assets and the amount of interest-bearing liabilities that are prepaid, withdrawn, re-priced or mature in specified periods. First Financial seeks to achieve consistent growth in net interest income and equity while managing volatility arising from shifts in market interest rates.

First Financial monitors the Company's interest rate risk position using income simulation models and EVE sensitivity analyses that capture both short-term and long-term interest rate risk exposure.  Income simulation involves forecasting NII under a variety of interest rate scenarios including instantaneous shocks. First Financial uses EVE sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital.  EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest-rate scenarios.  For both NII and EVE modeling, First Financial leverages instantaneous parallel shocks to evaluate interest rate risk exposure across rising and falling rate scenarios. Additional scenarios evaluated include implied market forward rate forecasts and various non-parallel yield curve twists.

First Financial’s interest rate risk models are based on the contractual and assumed cash flows and repricing characteristics for all of the Company’s assets, liabilities and off-balance sheet exposure. A number of assumptions are also incorporated into the interest rate risk models, including prepayment behaviors and repricing spreads for assets as well as attrition and repricing rates for liabilities. Assumptions are primarily derived from behavior studies of the Company’s historical client base and are continually refined. Modeling the sensitivity of NII and EVE to changes in market interest rates is highly dependent on the assumptions incorporated into the modeling process.

Non-maturity deposit modeling is particularly dependent on the assumption for repricing sensitivity known as a beta. Beta is the amount by which First Financial’s interest bearing non-maturity deposit rates will increase when short-term interest rates rise. The Company utilized a weighted average deposit beta of 59% in its interest rate risk modeling as of March 31, 2016. First Financial also includes an assumption for the migration of non-maturity deposit balances into CDs for all upward rate scenarios beginning with the +200 BP scenario, thereby increasing deposit costs and reducing asset sensitivity.

Presented below is the estimated impact on First Financial’s NII and EVE position as of March 31, 2016, assuming immediate, parallel shifts in interest rates:

	% Change from base case for  immediate parallel changes in rates
	-100 BP (1)		+100 BP		+200 BP
NII-Year 1	(4.83	)%	0.16	%	1.28	%
NII-Year 2	(7.89	)%	1.59	%	3.73	%
EVE	(6.91	)%	(0.54	)%	1.60	%

(1)Because certain current interest rates are at or below 1.00%, the 100 basis point downward shock assumes that certain corresponding interest rates approach an implied floor that, in effect, reflects a decrease of less than the full 100 basis point downward shock.

“Risk-neutral” refers to the absence of a strong bias toward either asset or liability sensitivity. “Asset sensitivity” is when a company's interest-earning assets reprice more quickly or in greater quantities than interest-bearing liabilities. Conversely, “liability sensitivity” is when a company's interest-bearing liabilities reprice more quickly or in greater quantities than interest-earning assets. In a rising interest rate environment, asset sensitivity results in higher net interest income while liability sensitivity results in lower net interest income. In a declining interest rate environment, asset sensitivity results in lower net interest income while liability sensitivity results in higher net interest income.

First Financial was within all internal policy limits set for interest rate risk monitoring as of March 31, 2016. Projected results for NII and EVE became more asset sensitive during the first quarter 2016 as a result of lower fixed rate securities in the investment portfolio and higher floating rate loan balances. First Financial continues to manage its balance sheet with a bias toward asset sensitivity while simultaneously balancing the potential earnings impact of this strategy.

First Financial continually evaluates the sensitivity of its interest rate risk position to modeling assumptions. The table that follows reflects First Financial’s estimated NII sensitivity profile as of March 31, 2016 assuming both a 25% increase and decrease to the beta assumption on managed rate deposits:

47

	Beta sensitivity (% change from base)
	+100 BP				+200 BP
	Beta 25% lower		Beta 25% higher		Beta 25% lower		Beta 25% higher
NII-Year 1	1.49	%	(1.18	)%	3.19	%	(0.64	)%
NII-Year 2	2.96	%	0.21	%	5.68	%	1.78	%

See the Net Interest Income section of Management’s Discussion and Analysis for further discussion.

CRITICAL ACCOUNTING POLICIES

First Financial’s Consolidated Financial Statements are prepared based on the application of the Company's accounting policies.  These policies require the reliance on estimates and assumptions.  Changes in underlying factors, assumptions or estimates could have a material impact on First Financial’s future financial condition and results of operations. In management’s opinion, certain accounting policies have a more significant impact than others on First Financial’s financial reporting.  For First Financial, these areas currently include accounting for the ALLL, acquired loans, the FDIC indemnification asset, goodwill, pension and income taxes.  These accounting policies are discussed in detail in the Critical Accounting Policies section of Management’s Discussion and Analysis in First Financial’s 2015 Annual Report.  There were no material changes to these accounting policies during the three months ended March 31, 2016.

ACCOUNTING AND REGULATORY MATTERS

Note 2 - Recently Adopted and Issued Accounting Standards in the Notes to Consolidated Financial Statements, discusses new accounting standards adopted by First Financial during 2016 and the expected impact of accounting standards recently issued but not yet required to be adopted.  To the extent the adoption of new accounting standards materially affects financial condition, results of operations or liquidity, the impacts are discussed in the applicable section(s) of Management’s Discussion and Analysis and the Notes to the Consolidated Financial Statements.

FORWARD-LOOKING INFORMATION

Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the Act). In addition, certain statements in future filings by First Financial with the SEC, in press releases, and in oral and written statements made by or with the approval of First Financial which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure and other financial items, statements of plans and objectives of First Financial or its management or board of directors and statements of future economic performances and statements of assumptions underlying such statements. Words such as "believes," "anticipates," "likely," "expected," "intends," and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Management's analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

▪ 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 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, ALLL 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 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 Dodd-Frank Wall Street Reform and Consumer Protection Act and the new capital rules promulgated by federal banking regulators);

48

▪ 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;

▪ the expiration of loss sharing agreements with the FDIC;

▪ mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;

▪ the risk that exploring merger and acquisition opportunities may detract from management's time and ability to successfully manage our business;

▪ expected cost savings in connection with 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 FASB 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 ALLL; and

▪ the costs and effects of litigation and of unexpected or adverse outcomes in such litigation.

In addition, please refer to our Annual Report on Form 10-K for the year ended December 31, 2015, as well as our other filings with the SEC, for a more detailed discussion of these risks and uncertainties and other factors that could cause actual results to differ from those discussed in the forward looking statements. Such forward-looking statements are meaningful only on the date when such statements are made, and First Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made to reflect the occurrence of unanticipated events.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained in “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk” of this report is incorporated herein by reference in response to this item.

49

ITEM 4.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rule 13a-15 of the Securities Exchange Act of 1934, that are designed to cause the material information required to be disclosed by First Financial in the reports it files or submits under the Securities Exchange Act of 1934 to be recorded, processed, summarized, and reported to the extent applicable within the time periods required by the Securities and Exchange Commission’s rules and forms.  In designing and evaluating the disclosure controls and procedures, management recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

As of the end of the period covered by this report, First Financial performed an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective at the reasonable assurance level.

On August 14, 2015, First Financial acquired Oak Street Holdings Corporation. The internal control over financial reporting of Oak Street's operations were excluded from the evaluation of effectiveness of First Financial's disclosure controls and procedures as of the period end covered by this report as a result of the timing of the acquisition. As a result of the Oak Street acquisition, First Financial will be evaluating changes to processes, information technology systems and other components of internal control over financial reporting as part of its integration activities. The acquired Oak Street operations represents 4.5% of total consolidated assets as of the period covered by this report.

Changes in Internal Control over Financial Reporting

No changes were made to the Corporation’s internal control over financial reporting (as defined in Rule 13a-15 under the Securities Exchange Act of 1934) during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

50

PART II-OTHER INFORMATION

Item 1. Legal Proceedings.

There have been no material changes to the disclosure in response to "Part I - Item 3. Legal Proceedings" in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Item 1A. Risk Factors.

There are a number of factors that may adversely affect the Company's business, financial results, or stock price. See "Risk Factors" as disclosed in response to "Item 1A. to Part I - Risk Factors" of Form 10-K for the year ended December 31, 2015.

51

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) The following table shows the total number of shares repurchased in the first quarter of 2016.

Issuer Purchases of Equity Securities

	(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
January 1 to January 31, 2016
Share repurchase program	0	$	0.00	0	3,509,133
Stock Plans	0	0.00		N/A	N/A
February 1 to February 29, 2016
Share repurchase program	0	$	0.00	0	3,509,133
Stock Plans	9,800	17.30		N/A	N/A
March 1 to March 31, 2016
Share repurchase program	0	$	0.00	0	3,509,133
Stock Plans	38,900	18.22		N/A	N/A
Total
Share repurchase program	0	$	0.00	0
Stock Plans	48,700	$	18.04	N/A

(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 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 (collectively 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.  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	1,490,867	None

52

Item 6.         Exhibits

(a)	Exhibits:
Exhibit Number
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 March 31, 2016, 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.(1)

First Financial will furnish, without charge, to a security holder upon request a copy of the documents and will furnish any other Exhibit upon payment of reproduction costs.  Unless as otherwise noted, documents incorporated by reference involve File No. 001-34762.

(1)     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.

53

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		FIRST FINANCIAL BANCORP.
		(Registrant)
/s/ Claude E. Davis		/s/ John M. Gavigan
Claude E. Davis		John M. Gavigan
Chief Executive Officer		Senior Vice President and Chief Financial Officer
		(Principal Accounting Officer)
Date	5/5/2016	Date	5/5/2016

54

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Claude E. Davis, Chief Executive Officer of First Financial Bancorp., certify that:

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:	5/5/2016	/s/ Claude E. Davis
		Claude E. Davis Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, John M. Gavigan, Senior Vice President and Chief Financial Officer of First Financial Bancorp., certify that:

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:	5/5/2016	/s/ John M. Gavigan
		John M. Gavigan Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORT BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-Q for the quarterly period ended March 31, 2016, of First Financial Bancorp. (the “Company”), as filed with the Securities and Exchange Commission on May 5, 2016 (the “Report”), I, Claude E. Davis, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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

Chief Executive Officer

May 5, 2016

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PERIODIC FINANCIAL REPORT BY CHIEF FINANCIAL

OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-Q for the quarterly period ended March 31, 2016, of First Financial Bancorp. (the “Company”), as filed with the Securities and Exchange Commission on May 5, 2016 (the “Report”), I, John M. Gavigan, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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/ John M. Gavigan

John M. Gavigan

Senior Vice President and Chief Financial Officer

May 5, 2016

XML

Document and Entity Information Document - shares	3 Months Ended
	Mar. 31, 2016	May. 03, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	FFBC
Entity Registrant Name	FIRST FINANCIAL BANCORP /OH/
Entity Central Index Key	0000708955
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		61,858,864

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 102,675	$ 114,841
Interest-bearing deposits with other banks	15,582	33,734
Investment securities available-for-sale, at fair value (amortized cost $1,165,093 at March 31, 2016 and $1,203,065 at December 31, 2015)	1,164,319	1,190,642
Investment securities held-to-maturity (fair value $718,277 at March 31, 2016 and $731,951 at December 31, 2015)	702,315	726,259
Other investments	53,255	53,725
Loans held for sale	15,369	20,957
Loans
Commercial	1,744,732	1,663,102
Real estate - construction	341,453	311,712
Real estate-commercial	2,261,857	2,258,297
Real estate-residential	508,512	512,311
Home equity	466,010	466,629
Installment	41,627	41,506
Credit card	39,283	41,217
Lease financing	101,135	93,986
Total loans and leases	5,504,609	5,388,760
Allowance for loan and lease losses	53,732	53,398
Net loans and leases	5,450,877	5,335,362
Premises and equipment	138,036	136,603
Goodwill and other intangibles	211,533	211,865
FDIC indemnification asset	16,256	17,630
Accrued interest and other assets	323,337	305,793
Total assets	8,193,554	8,147,411
Deposits
Interest-bearing	1,430,963	1,414,291
Savings	1,922,892	1,945,805
Time	1,414,313	1,406,124
Total interest-bearing deposits	4,768,168	4,766,220
Noninterest-bearing	1,408,609	1,413,404
Total deposits	6,176,777	6,179,624
Federal funds purchased and securities sold under agreements to repurchase	75,499	89,325
Federal Home Loan Bank short-term borrowings	894,400	849,100
Total short-term borrowings	969,899	938,425
Long-term debt	119,556	119,540
Total borrowed funds	1,089,455	1,057,965
Accrued interest and other liabilities	100,735	100,446
Total liabilities	7,366,967	7,338,035
SHAREHOLDERS' EQUITY
Common stock - no par value Authorized - 160,000,000 shares Issued - 68,730,731 shares in 2015 and 2014	567,497	571,155
Retained earnings	398,224	388,240
Accumulated other comprehensive loss	(23,209)	(30,580)
Treasury stock, at cost, 6,875,704 shares in 2016 and 7,089,051 shares in 2015	(115,925)	(119,439)
Total shareholders' equity	826,587	809,376
Total liabilities and shareholders' equity	$ 8,193,554	$ 8,147,411

XML

CONSOLIDATED BALANCE SHEETS CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Available-for-sale Securities, Amortized Cost Basis	$ 1,165,093	$ 1,203,065
Held-to-maturity Securities, Fair Value	$ 718,277	$ 731,951
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized	160,000,000	160,000,000
Common Stock, Shares, Issued	68,730,731	68,730,731
Treasury Stock, Shares	6,875,704	7,089,051

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest income
Loans, including fees	$ 63,399	$ 54,464
Investment securities
Taxable	11,373	9,608
Tax-exempt	1,162	1,117
Total interest on investment securities	12,535	10,725
Other earning assets	(1,139)	(1,181)
Total interest income	74,795	64,008
Interest expense
Deposits	5,530	4,820
Short-term borrowings	1,170	303
Long-term borrowings	1,540	299
Total interest expense	8,240	5,422
Net interest income	66,555	58,586
Provision for loan and lease losses	1,655	2,060
Net interest income after provision for loan and lease losses	64,900	56,526
Noninterest income
Service charges on deposit accounts	4,381	4,523
Trust and wealth management fees	3,440	3,634
Bankcard income	2,882	2,620
Client derivative fees	1,095	962
Net gains from sales of loans	1,181	1,464
Net gains on sales of investment securities	24	0
FDIC loss sharing income	(565)	(1,046)
Accelerated discount on covered/formerly covered loans	971	2,092
Other	2,103	3,364
Total noninterest income	15,512	17,613
Noninterest expenses
Salaries and employee benefits	29,615	26,941
Net occupancy	4,957	5,005
Furniture and equipment	2,213	2,153
Data processing	2,718	2,772
Marketing	1,065	888
Communication	481	570
Professional services	1,813	1,970
State intangible tax	639	577
FDIC assessments	1,132	1,090
Loss (gain) - other real estate owned	(190)	474
Loss sharing expense	297	301
Other	5,980	5,327
Total noninterest expenses	50,720	48,068
Income before income taxes	29,692	26,071
Income tax expense	9,878	8,450
Net income	$ 19,814	$ 17,621
Earnings per common share
Basic	$ 0.32	$ 0.29
Diluted	0.32	0.29
Cash dividends declared per share	$ 0.16	$ 0.16
Average common shares outstanding - basic	61,036,797	61,013,489
Average common shares outstanding - diluted	61,840,247	61,731,844

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 19,814	$ 17,621
Other comprehensive (loss) income, net of tax
Unrealized gains (losses) on investment securities arising during the period	7,043	5,008
Change in retirement obligation	200	183
Unrealized gain (loss) on derivatives	128	(816)
Unrealized gain (loss) on foreign currency exchange	0	(20)
Other comprehensive income (loss)	7,371	4,355
Comprehensive income	$ 27,185	$ 21,976

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock
Beginning Balances (in shares) at Dec. 31, 2014		68,730,731			(7,274,184)
Beginning Balances at Dec. 31, 2014	$ 783,771	$ 574,643	$ 352,587	$ (21,409)	$ (122,050)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	17,621		17,621
Other comprehensive income (loss)	4,355			4,355
Cash dividends declared :
Common stock at $0.16 per share in 2015 and $0.15 per share in 2014	(9,818)		(9,818)
Excess tax benefit on share-based compensation	99	99
Exercise of stock options, net of shares purchased (in shares)					15,217
Exercise of stock options, net of shares purchased	86	(170)			$ 256
Restricted stock awards, net of forfeitures (in shares)					215,123
Restricted stock awards, net of forfeitures	(1,230)	(4,807)			$ 3,577
Share-based compensation expense	858	$ 858
Ending Balances (in shares) at Mar. 31, 2015		68,730,731			(7,043,844)
Ending Balances at Mar. 31, 2015	795,742	$ 570,623	360,390	(17,054)	$ (118,217)
Beginning Balances (in shares) at Dec. 31, 2015		68,730,731			(7,089,051)
Beginning Balances at Dec. 31, 2015	809,376	$ 571,155	388,240	(30,580)	$ (119,439)
Beginning Balance-Stockholders' Equity, Adjusted Balance at Dec. 31, 2015	809,376
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	19,814		19,814
Other comprehensive income (loss)	7,371			7,371
Cash dividends declared :
Common stock at $0.16 per share in 2015 and $0.15 per share in 2014	(9,830)		(9,830)
Excess tax benefit on share-based compensation	105	105
Exercise of stock options, net of shares purchased (in shares)					9,937
Exercise of stock options, net of shares purchased	82	(85)			$ 167
Restricted stock awards, net of forfeitures (in shares)					203,410
Restricted stock awards, net of forfeitures	(1,338)	(4,685)			$ 3,347
Share-based compensation expense	1,007	$ 1,007
Ending Balances (in shares) at Mar. 31, 2016		68,730,731			(6,875,704)
Ending Balances at Mar. 31, 2016	$ 826,587	$ 567,497	$ 398,224	$ (23,209)	$ (115,925)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Common Stock, Dividends, Per Share, Declared	$ 0.16	$ 0.16

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net income	$ 19,814	$ 17,621
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses	1,655	2,060
Depreciation and amortization	3,287	3,208
Stock-based compensation expense	1,007	858
Pension expense (income)	(225)	(300)
Net amortization of premiums/accretion of discounts on investment securities	1,911	1,741
Gains on sales of investment securities	(24)	0
Originations of loans held for sale	(42,935)	(59,541)
Net gains from sales of loans held for sale	(1,181)	(1,464)
Proceeds from sales of loans held for sale	49,381	56,816
Deferred income taxes	0	2,313
Decrease (increase) in interest receivable	(2,471)	(2,354)
Decrease (increase) in cash surrender value of life insurance	(493)	(480)
Decrease (increase) in indemnification asset	(1,374)	(2,269)
(Decrease) increase in interest payable	(1,353)	0
Increase (decrease) in other assets	(15,305)	(13,435)
(Decrease) increase in other liabilities	(3,923)	5,790
Net cash provided by (used in) operating activities	10,519	15,102
Investing activities
Proceeds from sales of securities available-for-sale	42,696	25
Proceeds from calls, paydowns and maturities of securities available-for-sale	31,974	26,103
Purchases of securities available-for-sale	(36,851)	(55,005)
Proceeds from calls, paydowns and maturities of securities held-to-maturity	22,881	27,155
Net decrease (increase) in interest-bearing deposits with other banks	18,152	(2,720)
Net decrease (increase) in loans and leases	(117,755)	8,883
Proceeds from disposal of other real estate owned	2,035	4,557
Purchases of premises and equipment	(4,900)	(2,255)
Net cash provided by (used in) investing activities	(41,768)	6,743
Financing activities
Net (decrease) increase in total deposits	(2,847)	58,848
Net (decrease) increase in short-term borrowings	31,474	(69,750)
Payments on long-term debt	0	(532)
Cash dividends paid on common stock	(9,760)	(9,745)
Proceeds from exercise of stock options	111	124
Excess tax benefit on share-based compensation	105	99
Net cash provided by (used in) financing activities	19,083	(20,956)
Cash and due from banks:
Net increase (decrease) in cash and due from banks	(12,166)	889
Cash and due from banks at beginning of period	114,841	110,122
Cash and due from banks at end of period	$ 102,675	$ 111,011

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The Consolidated Financial Statements of First Financial Bancorp., 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.  All significant intercompany transactions and accounts have been eliminated in consolidation.  Certain reclassifications of prior periods' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.  These estimates, assumptions and judgments are inherently subjective and may be susceptible to significant change.  Actual realized amounts could differ materially from these 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 Form 10-K for the year ended December 31, 2015.  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 it is suggested that these interim statements be read in conjunction with 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, 2015 has been derived from the audited financial statements in the Company’s 2015 Form 10-K.

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RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

3 Months Ended

Mar. 31, 2016

Recently Adopted and Issued Accounting Standards [Abstract]

Recently Adopted and Issued Accounting Standards Disclosure [Text Block]

RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

In April 2015, the FASB issued an update (ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs) that requires debt issuance costs to be presented as a deduction from the corresponding debt liability. Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements. The provisions of this update became effective January 1, 2016. First Financial early adopted this accounting standard during the third quarter of 2015. Management concluded that the debt issuance costs capitalized in prior periods was immaterial as a component of other assets, total assets, total long-term debt and total liabilities, and as such, the Company's prior periods have not been restated.

In September 2015, the FASB issued an update (ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments) which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. This update requires acquiring companies to recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance in this ASU became effective January 1, 2016 and did not have a material impact on the Company's Consolidated Financial Statements.

In January 2016, the FASB issued an update (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) which will require entities to measure many equity investments at fair value and recognize changes in fair value in net income. This update does not apply to equity investments that result in consolidation, those accounted for under the equity method and certain others, and will eliminate use of the available for sale classification for equity securities while providing a new measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In February 2016, the FASB issued an update (ASU 2016-02, Leases) which will require lessees to record most leases on their balance sheet and recognize leasing expenses in the income statement. Operating leases, except for short-term leases that are subject to an accounting policy election, will be recorded on the balance sheet for lessees by establishing a lease liability and corresponding right-of-use asset. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. First Financial is currently evaluating the impact of this update on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships) which clarifies that the novation of a derivative contract in a hedge accounting relationship does not, in and of itself, require de-designation of that hedge accounting relationship. In the event of a novation, hedge accounting relationships could continue if all other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments) which clarifies that an assessment of whether an embedded contingent put or call option is clearly and closely related to the debt host requires only an analysis of the four-step decision sequence in ASC 815-15-25-42. Entities are required to apply the guidance to existing debt instruments (or hybrid financial instruments that are determined to have a debt host) using a modified retrospective transition method as of the period of adoption. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-07, Investments-Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting) which will eliminate the requirement to retrospectively apply the equity method when an investment that had been accounted for utilizing another method qualifies for use of the equity method. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

In March 2016, the FASB issued an update (ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting) which will require recognition of the income tax effects of share-based awards in the income statement when the awards vest or are settled (i.e., Additional Paid-in-Capital pools will be eliminated). The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. First Financial does not anticipate this update will have a material impact on its Consolidated Financial Statements.

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INVESTMENTS

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

For the first quarter 2016, proceeds on the sale of $42.7 million of available-for-sale securities resulted in gains of $0.3 million and losses of $0.3 million. For the comparable quarter in 2015, proceeds on the sale of $25 thousand of available-for-sale securities resulted in no gains or losses. No held-to-maturity securities were sold.

The following is a summary of held-to-maturity and available-for-sale investment securities as of March 31, 2016:

	Held-to-maturity									Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss			Fair value		Amortized cost		Unrealized gain		Unrealized loss			Fair value
U.S. Treasuries	$	0	$	0	$	0		$	0	$	98	$	3	$	0		$	101
Securities of U.S. government agencies and corporations	14,935		373		0			15,308		8,183		223		0			8,406
Mortgage-backed securities	655,387		15,615		(410		)	670,592		720,407		6,868		(4,493		)	722,782
Obligations of state and other political subdivisions	27,180		480		(2		)	27,658		103,215		3,437		(443		)	106,209
Asset-backed securities	0		0		0			0		258,731		31		(5,266		)	253,496
Other securities	4,813		0		(94		)	4,719		74,459		632		(1,766		)	73,325
Total	$	702,315	$	16,468	$	(506	)	$	718,277	$	1,165,093	$	11,194	$	(11,968	)	$	1,164,319

The following is a summary of held-to-maturity and available-for-sale investment securities as of December 31, 2015:

	Held-to-maturity									Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss			Fair value		Amortized cost		Unrealized gain		Unrealized loss			Fair value
U.S. Treasuries	$	0	$	0	$	0		$	0	$	98	$	0	$	(1	)	$	97
Securities of U.S. government agencies and corporations	15,486		121		0			15,607		8,183		157		0			8,340
Mortgage-backed securities	678,318		7,452		(1,999		)	683,771		775,285		2,708		(12,926		)	765,067
Obligations of state and other political subdivisions	27,646		338		(99		)	27,885		105,212		2,655		(730		)	107,137
Asset-backed securities	0		0		0			0		236,411		35		(3,445		)	233,001
Other securities	4,809		0		(121		)	4,688		77,876		523		(1,399		)	77,000
Total	$	726,259	$	7,911	$	(2,219	)	$	731,951	$	1,203,065	$	6,078	$	(18,501	)	$	1,190,642

The following table provides a summary of investment securities by contractual maturity or estimated weighted average life as of March 31, 2016. Estimated lives on amortizing investment securities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	5,105	$	5,207	$	58,659	$	58,493
Due after one year through five years	563,324		574,597		775,602		774,467
Due after five years through ten years	133,886		138,473		303,552		304,623
Due after ten years	0		0		27,280		26,736
Total	$	702,315	$	718,277	$	1,165,093	$	1,164,319

The following tables provide the fair value and gross unrealized losses on investment securities in an unrealized loss position, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:

	March 31, 2016
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Fair value		Unrealized loss			Fair value		Unrealized loss			Fair value		Unrealized loss
Mortgage-backed securities	$	167,950	$	(1,299	)	$	235,099	$	(3,604	)	$	403,049	$	(4,903	)
Obligations of state and other political subdivisions	6,684		(53		)	20,758		(392		)	27,442		(445		)
Asset-backed securities	215,166		(4,217		)	24,018		(1,049		)	239,184		(5,266		)
Other securities	34,001		(1,123		)	16,766		(737		)	50,767		(1,860		)
Total	$	423,801	$	(6,692	)	$	296,641	$	(5,782	)	$	720,442	$	(12,474	)

	December 31, 2015
	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	value		loss			value		loss			value		loss
Securities of U.S. government agencies and corporations	$	97	$	0		$	0	$	0		$	97	$	0
Mortgage-backed securities	500,768		(5,363		)	246,523		(9,563		)	747,291		(14,926		)
Obligations of state and other political subdivisions	5,800		(65		)	29,287		(764		)	35,087		(829		)
Asset-backed securities	189,066		(3,042		)	17,144		(403		)	206,210		(3,445		)
Other securities	30,828		(592		)	24,716		(928		)	55,544		(1,520		)
Total	$	726,559	$	(9,062	)	$	317,670	$	(11,658	)	$	1,044,229	$	(20,720	)

Gains and losses on debt securities are generally due to fluctuations in current market yields relative to the yields of the debt securities at their amortized cost. All securities with unrealized losses are reviewed quarterly to determine if any impairment is considered other than temporary, requiring a write-down to fair value. First Financial considers the percentage loss on a security, duration of the loss, average life or duration of the security, credit rating of the security and payment performance as well as the Company's intent and ability to hold the security to maturity when determining whether any impairment is other than temporary. At this time First Financial does not intend to sell, and it is not more likely than not that the Company will be required to sell debt securities temporarily impaired prior to maturity or recovery of the recorded value. First Financial had no other than temporary impairment related to its investment securities portfolio as of March 31, 2016 or December 31, 2015.

For further detail on the fair value of investment securities, see Note 14 – Fair Value Disclosures.

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LOANS AND LEASES

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

LOANS AND LEASES

LOANS AND LEASES

First Financial offers clients a variety of commercial and consumer loan and lease products with various interest rates and payment terms. Lending activities are primarily concentrated in states where the Bank currently operates banking centers (Ohio, Indiana and Kentucky). Additionally, First Financial has two national lending platforms, one that provides equipment and leasehold improvement financing for franchisees in the quick service and casual dining restaurant sector and another that provides loans secured by commissions and cash collateral accounts primarily to insurance agents and brokers. Commercial loan categories include commercial and industrial, commercial real estate, construction real estate and lease financing. Consumer loan categories include residential real estate, home equity, installment and credit card.

Purchased impaired loans.Loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, are referred to as purchased impaired loans. First Financial accounts for the majority of loans acquired in FDIC transactions as purchased impaired loans, except for loans with revolving privileges, which are outside the scope of FASB ASC Topic 310-30, and loans for which cash flows could not be estimated, which are accounted for under the cost recovery method. Purchased impaired loans include loans previously covered under loss sharing agreements as well as loans that remain subject to FDIC loss sharing coverage.

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 purchased impaired loans. First Financial had purchased impaired loans totaling $177.0 million and $191.6 million, at March 31, 2016 and December 31, 2015, respectively. The outstanding balance of all purchased impaired loans, including all contractual principal, interest, fees and penalties, was $196.2 million and $213.3 million as of March 31, 2016 and December 31, 2015, respectively. These balances exclude contractual interest not yet accrued.

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

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Balance at beginning of period	$	64,857		$	106,622
Reclassification from/(to) nonaccretable difference	318			(1,576		)
Accretion	(4,210		)	(6,357		)
Other net activity (1)	(2,241		)	(6,701		)
Balance at end of period	$	58,724		$	91,988

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

First Financial regularly reviews its forecast of expected cash flows for purchased impaired loans. The Company recognized reclassifications from nonaccretable to accretable difference of $0.3 million for the first quarter of 2016, however, during the three months ended March 31, 2015, the Company recognized reclassifications from accretable to nonaccretable difference of $1.6 million due to changes in the cash flow expectations related to certain loan pools. These reclassifications can result in impairment and provision expense in the current period or yield adjustments on the related loan pools on a prospective basis.

Covered loans. Loans acquired in FDIC-assisted transactions 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 the loss sharing agreements, covered loans are subject to a stated loss threshold whereby the FDIC will reimburse First Financial for 80% of losses up to a stated loss threshold and 95% of losses in excess of the threshold. These loss sharing agreements provide for partial loss protection on single-family, residential loans for a period of ten years and First Financial is required to share any recoveries of previously charged-off amounts for the same time period, on the same pro-rata basis with the FDIC. All other loans subject to loss sharing agreements were provided loss protection for a period of five years and recoveries of previously charged-off amounts must be shared with the FDIC for an additional three year period, on the same pro-rata basis.

The Company's loss sharing agreements with the FDIC related to non-single family loans expired effective October 1, 2014, and the ten year period of loss protection on all other covered loans and covered OREO expires October 1, 2019. Covered loans totaled $109.2 million as of March 31, 2016 and $113.3 million as of December 31, 2015.

Credit Quality. To facilitate the monitoring of credit quality for commercial loans, and for purposes of determining an appropriate ALLL, First Financial utilizes the following categories of credit grades:

Pass - Higher quality loans that do not fit any of the other categories described below.

Special Mention - First Financial assigns a special mention rating to loans and leases with potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in First Financial's credit position at some future date.

Substandard - First Financial assigns a substandard rating to loans or leases that are inadequately protected by the current sound financial worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans and leases have well-defined weaknesses that jeopardize repayment of the debt. Substandard loans and leases are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not addressed.

Doubtful - First Financial assigns a doubtful rating to loans and leases with all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans.

The credit grades described above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

First Financial considers repayment performance to be the best indicator of credit quality for consumer loans. Consumer loans that have principal and interest payments that are past due by 90 days or more are generally classified as nonperforming. Additionally, consumer loans that have been modified in a TDR are classified as nonperforming.

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

	As of March 31, 2016
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,680,764	$	337,472	$	2,182,683	$	99,583	$	4,300,502
Special Mention	22,155		3,417		19,754		0		45,326
Substandard	41,813		564		59,420		1,552		103,349
Doubtful	0		0		0		0		0
Total	$	1,744,732	$	341,453	$	2,261,857	$	101,135	$	4,449,177

(Dollars in thousands)	Real Estate Residential		Home Equity		Installment		Other		Total
Performing	$	499,849	$	460,341	$	41,408	$	39,283	$	1,040,881
Nonperforming	8,663		5,669		219		0		14,551
Total	$	508,512	$	466,010	$	41,627	$	39,283	$	1,055,432

	As of December 31, 2015
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,596,415	$	310,806	$	2,179,701	$	93,236	$	4,180,158
Special Mention	27,498		128		19,903		0		47,529
Substandard	39,189		778		58,693		750		99,410
Doubtful	0		0		0		0		0
Total	$	1,663,102	$	311,712	$	2,258,297	$	93,986	$	4,327,097

(Dollars in thousands)	Real Estate Residential		Home Equity		Installment		Other		Total
Performing	$	503,317	$	461,188	$	41,253	$	41,217	$	1,046,975
Nonperforming	8,994		5,441		253		0		14,688
Total	$	512,311	$	466,629	$	41,506	$	41,217	$	1,061,663

Delinquency. 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 date of the scheduled payment.

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

	As of March 31, 2016
(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	$	4,354	$	310	$	3,034	$	7,698	$	1,729,886	$	1,737,584	$	7,148	$	1,744,732	$	0
Real estate - construction	5,002		0		0		5,002		335,689		340,691		762		341,453		0
Real estate - commercial	2,718		0		6,631		9,349		2,141,626		2,150,975		110,882		2,261,857		0
Real estate - residential	858		0		2,020		2,878		450,582		453,460		55,052		508,512		0
Home equity	505		81		3,025		3,611		460,929		464,540		1,470		466,010		0
Installment	133		13		67		213		39,713		39,926		1,701		41,627		0
Other	435		328		59		822		139,596		140,418		0		140,418		59
Total	$	14,005	$	732	$	14,836	$	29,573	$	5,298,021	$	5,327,594	$	177,015	$	5,504,609	$	59

	As of December 31, 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	$	2,255	$	2,232	$	1,937	$	6,424	$	1,648,902	$	1,655,326	$	7,776	$	1,663,102	$	0
Real estate - construction	0		17		0		17		310,872		310,889		823		311,712		0
Real estate - commercial	2,501		913		7,421		10,835		2,124,290		2,135,125		123,172		2,258,297		0
Real estate - residential	1,220		239		2,242		3,701		451,907		455,608		56,703		512,311		0
Home equity	696		248		2,830		3,774		461,647		465,421		1,208		466,629		0
Installment	197		111		48		356		39,206		39,562		1,944		41,506		0
Other	920		302		230		1,452		133,751		135,203		0		135,203		108
Total	$	7,789	$	4,062	$	14,708	$	26,559	$	5,170,575	$	5,197,134	$	191,626	$	5,388,760	$	108

Nonaccrual. 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 90 days or more past due. Generally, loans are classified as nonaccrual 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 classified as nonaccrual. 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 return to accrual status if collection of future principal and interest payments is no longer doubtful.

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 provision for loan and lease losses or prospective yield adjustments.

Troubled Debt Restructurings. A loan modification is considered a TDR when the borrower is experiencing financial difficulty and 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 restructured terms of the loan agreement.

First Financial had 271 TDRs totaling $37.7 million at March 31, 2016, including $30.1 million on accrual status and $7.5 million classified as nonaccrual. First Financial had $0.4 million of commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs at March 31, 2016. At March 31, 2016, the ALLL included reserves of $2.4 million related to TDRs. For the three months ended March 31, 2016 and 2015, First Financial charged off $0.2 million and $6 thousand respectively, for the portion of TDRs determined to be uncollectible. Additionally, as of March 31, 2016, approximately $10.2 million of accruing TDRs have been performing in accordance with the restructured terms for more than one year.

First Financial had 271 TDRs totaling $38.2 million at December 31, 2015, including $28.9 million of loans on accrual status and $9.3 million classified as nonaccrual. First Financial had $1.8 million of commitments outstanding to lend additional funds to borrowers whose loan terms had been modified through TDRs. At December 31, 2015, the ALLL included reserves of $6.3 million related to TDRs. For the year ended December 31, 2015, First Financial charged off $2.7 million for the portion of TDRs determined to be uncollectible. As of December 31, 2015, approximately $10.3 million of the accruing TDRs had been performing in accordance with the restructured terms for more than one year.

The following tables provide information on loan modifications classified as TDRs during the three months ended March 31, 2016 and 2015:

	Three months ended
	March 31, 2016					March 31, 2015
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial	8	$	2,083	$	2,095	8	$	360	$	359
Real estate - construction	0	0		0		0	0		0
Real estate - commercial	1	42		42		6	12,914		9,343
Real estate - residential	2	281		247		0	0		0
Home equity	4	149		140		0	0		0
Installment	2	7		7		0	0		0
Total	17	$	2,562	$	2,531	14	$	13,274	$	9,702

The following table provides information on how TDRs were modified during the three months ended March 31, 2016 and 2015.

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Extended maturities	$	486	$	9,481
Adjusted interest rates	0		0
Combination of rate and maturity changes	162		62
Forbearance	0		0
Other (1)	1,883		159
Total	$	2,531	$	9,702

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

First Financial considers repayment performance as an indication of the effectiveness of the Company's loan modifications. Borrowers that are 90 days or more past due on any principal or interest payments, or who prematurely terminate a restructured loan agreement without paying off the contractual principal balance (for example, in a deed-in-lieu arrangement), are considered to be in payment default of the terms of the TDR agreement.

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
	March 31, 2016			March 31, 2015
(Dollars in thousands)	Number of loans	Period end balance		Number of loans	Period end balance
Commercial	1	$	55	0	$	0
Real estate - construction	0	0		0	0
Real estate - commercial	0	0		3	967
Real estate - residential	1	214		1	73
Home equity	1	28		0	0
Installment	1	4		0	0
Total	4	$	301	4	$	1,040

Impaired Loans. Loans classified as nonaccrual and loans modified as TDRs are considered impaired. The following table provides information on impaired loans, excluding purchased impaired loans.

(Dollars in thousands)	March 31, 2016		December 31, 2015
Impaired loans
Nonaccrual loans (1)
Commercial	$	3,917	$	8,405
Real estate-construction	0		0
Real estate-commercial	8,577		9,418
Real estate-residential	4,243		5,027
Home equity	5,036		4,898
Installment	113		127
Other	121		122
Nonaccrual loans (1)	22,007		27,997
Accruing troubled debt restructurings	30,127		28,876
Total impaired loans	$	52,134	$	56,873

(1) Nonaccrual loans include nonaccrual TDRs of $7.5 million and $9.3 million as of March 31, 2016 and December 31, 2015, respectively.

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Interest income effect on impaired loans
Gross amount of interest that would have been recorded under original terms	$	754	$	967
Interest included in income
Nonaccrual loans	76		171
Troubled debt restructurings	232		132
Total interest included in income	308		303
Net impact on interest income	$	446	$	664

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 is necessary based on the borrower’s overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. Specific allowances are based on discounted cash flows using the loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans.

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

	As of March 31, 2016
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		YTD interest income recognized
Loans with no related allowance recorded
Commercial	$	13,512	$	14,442	$	0	$	14,965	$	74
Real estate - construction	0		0		0		0		0
Real estate - commercial	14,003		18,707		0		15,152		70
Real estate - residential	7,126		8,383		0		7,287		46
Home equity	5,569		7,673		0		5,455		21
Installment	219		236		0		236		1
Other	121		121		0		122		0
Total	40,550		49,562		0		43,217		212
Loans with an allowance recorded
Commercial	973		1,163		400		983		9
Real estate - construction	0		0		0		0		0
Real estate - commercial	8,974		8,974		763		8,663		77
Real estate - residential	1,537		1,551		236		1,542		9
Home equity	100		100		2		101		1
Installment	0		0		0		0		0
Other	0		0		0		0		0
Total	11,584		11,788		1,401		11,289		96
Total
Commercial	14,485		15,605		400		15,948		83
Real estate - construction	0		0		0		0		0
Real estate - commercial	22,977		27,681		763		23,815		147
Real estate - residential	8,663		9,934		236		8,829		55
Home equity	5,669		7,773		2		5,556		22
Installment	219		236		0		236		1
Other	121		121		0		122		0
Total	$	52,134	$	61,350	$	1,401	$	54,506	$	308

	As of and for the year December 31, 2015
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		Interest income recognized
Loans with no related allowance recorded
Commercial	$	16,418	$	17,398	$	0	$	10,468	$	258
Real estate - construction	0		0		0		150		0
Real estate - commercial	16,301		20,479		0		19,363		344
Real estate - residential	7,447		8,807		0		8,143		184
Home equity	5,340		7,439		0		5,648		82
Installment	253		276		0		380		7
Other	122		122		0		24		0
Total	45,881		54,521		0		44,176		875
Loans with an allowance recorded
Commercial	993		1,178		357		1,409		26
Real estate - construction	0		0		0		0		0
Real estate - commercial	8,351		8,706		979		12,928		213
Real estate - residential	1,547		1,560		235		1,696		40
Home equity	101		101		2		101		3
Installment	0		0		0		0		0
Other	0		0		0		0		0
Total	10,992		11,545		1,573		16,134		282
Total
Commercial	17,411		18,576		357		11,877		284
Real estate - construction	0		0		0		150		0
Real estate - commercial	24,652		29,185		979		32,291		557
Real estate - residential	8,994		10,367		235		9,839		224
Home equity	5,441		7,540		2		5,749		85
Installment	253		276		0		380		7
Other	122		122		0		24		0
Total	$	56,873	$	66,066	$	1,573	$	60,310	$	1,157

OREO. OREO is comprised of properties acquired by the Company primarily through the loan foreclosure or repossession process, or other resolution activity that results in partial or total satisfaction of problem loans.

Changes in OREO were as follows:

	Three months ended
	March 31,
(Dollars in thousands)	2016 (1)			2015 (1)
Balance at beginning of period	$	13,254		$	22,674
Additions
Commercial	786			2,173
Residential	122			1,058
Total additions	908			3,231
Disposals
Commercial	(200		)	(4,145		)
Residential	(1,835		)	(412		)
Total disposals	(2,035		)	(4,557		)
Valuation adjustment
Commercial	(117		)	(418		)
Residential	(71		)	(24		)
Total valuation adjustment	(188		)	(442		)
Balance at end of period	$	11,939		$	20,906

The preceding table includes OREO subject to loss sharing agreements of $38 thousand and $0.3 million at March 31, 2016 and 2015, respectively.

FDIC indemnification asset. 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
	March 31,
(Dollars in thousands)	2016			2015			Affected Line Item in the Consolidated Statements of Income
Balance at beginning of period	$	17,630		$	22,666
Adjustments not reflected in income
Net FDIC claims (received) / paid	362			204
Adjustments reflected in income
Amortization	(1,171		)	(1,195		)	Interest income, other earning assets
FDIC loss sharing income	(565		)	(1,046		)	Noninterest income, FDIC loss sharing income
Offset to accelerated discount	0			(232		)	Noninterest income, accelerated discount on covered loans
Balance at end of period	$	16,256		$	20,397

The accounting for FDIC indemnification assets is closely related to the accounting for the underlying, indemnified assets as well as on-going assessment of the collectibility of the indemnification assets. The primary activities impacting the FDIC indemnification asset are FDIC claims, amortization, FDIC loss sharing income and accelerated discount. For a detailed discussion on the indemnification asset, please refer to the Loans and Leases note in the Company's 2015 Annual Report on Form 10-K.

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ALLOWANCE FOR LOAN AND LEASE LOSSES

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

ALLOWANCE FOR LOAN AND LEASE LOSSES

ALLOWANCE FOR LOAN AND LEASE LOSSES

Loans and leases. For each reporting period, management maintains the ALLL at a level that it considers sufficient to absorb probable incurred 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.

The allowance is increased by provision expense and decreased by 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.

In the third quarter of 2015, First Financial closed its merger with Oak Street. Loans acquired in this transaction were recorded at estimated fair value at the acquisition date with no carryover of the related ALLL. See Note 15 - Business Combinations for further detail.

Covered/formerly covered loans. The majority of covered/formerly covered loans are purchased impaired loans, whereby First Financial is required to periodically re-estimate the expected cash flows on the loans. First Financial updated the valuations related to covered/formerly covered loans during the first quarter of 2016. First Financial recognized negative provision expense, or impairment recapture, of $0.1 million and net charge-offs of $0.8 million during the first quarter of 2016, resulting in an ending allowance of $9.4 million at March 31, 2016. For the first quarter of 2015, First Financial recognized negative provision expense on covered loans of $0.3 million and net recoveries of $0.5 million, resulting in an ending allowance of $10.3 million at March 31, 2015.

Changes in the allowance for loan and lease losses were as follows:

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Changes in the allowance for loan and lease losses on total loans
Balance at beginning of period	$	53,398		$	52,858
Provision for loan and lease losses	1,655			2,060
Loans charged-off	(2,442		)	(5,044		)
Recoveries	1,121			3,202
Balance at end of period	$	53,732		$	53,076

Year-to-date changes in the allowance for loan and lease losses by loan category were as follows:

	Three months ended March 31, 2016
			Real Estate
(Dollars in thousands)	Comm		Constr			Comm			Resid			Home Equity		Install			Other		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	16,995	$	1,810		$	23,656		$	4,014		$	3,943	$	386		$	2,594	$	53,398
Provision for loan and lease losses	1,432		439			(420		)	8			185		(58		)	69		1,655
Gross charge-offs	479		3			1,262			45			340		73			240		2,442
Recoveries	222		26			442			63			188		99			81		1,121
Total net charge-offs	257		(23		)	820			(18		)	152		(26		)	159		1,321
Ending allowance for loan and lease losses	$	18,170	$	2,272		$	22,416		$	4,040		$	3,976	$	354		$	2,504	$	53,732
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	400	$	0		$	763		$	236		$	2	$	0		$	0	$	1,401
Collectively evaluated for impairment	17,770		2,272			21,653			3,804			3,974		354			2,504		52,331
Ending allowance for loan and lease losses	$	18,170	$	2,272		$	22,416		$	4,040		$	3,976	$	354		$	2,504	$	53,732
Loans
Loans individually evaluated for impairment	$	14,485	$	0		$	22,977		$	8,663		$	5,669	$	219		$	121	$	52,134
Loans collectively evaluated for impairment	1,730,247		341,453			2,238,880			499,849			460,341		41,408			140,297		5,452,475
Total loans	$	1,744,732	$	341,453		$	2,261,857		$	508,512		$	466,010	$	41,627		$	140,418	$	5,504,609

	Three months ended March 31, 2015
				Real Estate
(Dollars in thousands)	Comm			Constr			Comm		Resid		Home Equity		Install		Other		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	13,870		$	1,045		$	27,086	$	3,753	$	4,260	$	407	$	2,437	$	52,858
Provision for loan and lease losses	1,059			147			112		70		472		61		139		2,060
Gross charge-offs	1,568			0			1,870		404		741		167		294		5,044
Recoveries	2,183			45			491		64		288		86		45		3,202
Total net charge-offs	(615		)	(45		)	1,379		340		453		81		249		1,842
Ending allowance for loan and lease losses	$	15,544		$	1,237		$	25,819	$	3,483	$	4,279	$	387	$	2,327	$	53,076
	December 31, 2015
				Real Estate
(Dollars in thousands)	Comm			Constr			Comm		Resid		Home Equity		Install		Other		Total
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	357		$	0		$	979	$	235	$	2	$	0	$	0	$	1,573
Collectively evaluated for impairment	16,638			1,810			22,677		3,779		3,941		386		2,594		51,825
Ending allowance for loan and lease losses	$	16,995		$	1,810		$	23,656	$	4,014	$	3,943	$	386	$	2,594	$	53,398
Loans
Loans individually evaluated for impairment	$	17,411		$	0		$	24,652	$	8,994	$	5,441	$	253	$	122	$	56,873
Loans collectively evaluated for impairment	1,645,691			311,712			2,233,645		503,317		461,188		41,253		135,081		5,331,887
Total loans	$	1,663,102		$	311,712		$	2,258,297	$	512,311	$	466,629	$	41,506	$	135,203	$	5,388,760

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill. Assets and liabilities acquired in a business combination 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. First Financial recorded no additions to goodwill in the first quarter of 2016. Additions to goodwill in 2015 resulted from the acquisition of Oak Street in the third quarter. For further detail on the Oak Street acquisition, see Note 15 – Business Combinations.

Changes in the carrying amount of goodwill for the quarter ended March 31, 2016 and the year ended December 31, 2015 are shown below.

(Dollars in thousands)	March 31, 2016		December 31, 2015
Balance at beginning of year	$	204,084	$	137,739
Goodwill resulting from business combinations	0		66,345
Balance at end of period	$	204,084	$	204,084

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, 2015 and no impairment was indicated.  As of March 31, 2016, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value.

Other intangible assets. As of March 31, 2016 and December 31, 2015, First Financial has $7.5 million and $7.8 million, respectively, of other intangibles which are included in Goodwill and other intangibles in the Consolidated Balance Sheets and primarily consist of core deposit intangibles.  Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships. Core deposit intangibles are recorded at their estimated fair value at the date of acquisition and are then amortized on an accelerated basis over their estimated useful lives. Core deposit intangibles were $5.6 million and $5.9 million as of March 31, 2016 and December 31, 2015, respectively. First Financial's core deposit intangibles have an estimated weighted average remaining life of 5.4 years. Amortization expense was $0.4 million for the three months ended March 31, 2016 and 2015, respectively.

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BORROWINGS

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

Short-term borrowings on the Consolidated Balance Sheets include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, overnight advances from the FHLB and a short-term line of credit. All repurchase agreements are subject to terms and conditions of repurchase security agreements between First Financial Bank and the client. To secure the Bank's liability to the client, First Financial Bank is authorized to sell or repurchase U.S. Treasury, government agency and mortgage-backed securities.

First Financial had $894.4 million in short-term borrowings with the FHLB at March 31, 2016 and $849.1 million as of December 31, 2015. These short-term borrowings are used to manage the Company's normal liquidity needs and support the Company's asset and liability management strategies.

First Financial has a $15.0 million short-term credit facility with an unaffiliated bank that matures on May 30, 2016. This facility can have a variable or fixed interest rate and provides First Financial additional liquidity, if needed, for various corporate activities, including the repurchase of First Financial shares and the payment of dividends to shareholders. As of March 31, 2016 and December 31, 2015, there was no outstanding balance. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this facility as of March 31, 2016 and December 31, 2015.

During the third quarter of 2015, First Financial issued $120.0 million of subordinated notes. The subordinated notes have a fixed interest rate of 5.125% payable semiannually and mature on August 25, 2025. These notes are not redeemable by the Company or callable by the holders of the notes prior to maturity. The subordinated notes are treated as Tier 2 capital for regulatory capital purposes and are included in Long-term debt on the Consolidated Balance Sheets.

Long-term debt also includes $0.4 million and $0.5 million of FHLB long-term advances as of March 31, 2016 and December 31, 2015, respectively. These instruments are primarily utilized to reduce overnight liquidity risk and to mitigate interest rate sensitivity on the Consolidated Balance Sheets.

The following is a summary of First Financial's long-term debt:

	March 31, 2016				December 31, 2015
(Dollars in thousands)	Amount		Average rate		Amount		Average rate
Subordinated debt	$	118,332	5.20	%	$	118,312	5.20	%
FHLB advances	449		2.39	%	453		2.37	%
Capital loan with municipality	775		0.00	%	775		0.00	%
Total long-term debt	$	119,556	5.15	%	$	119,540	5.15	%

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss).  The related tax effects allocated to other comprehensive income and reclassifications out of accumulated other comprehensive income (loss) are as follows

	Three months ended March 31, 2016
	Total other comprehensive income												Total accumulated other comprehensive income (loss)
(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	$	10,975	$	24		$	10,951	$	(3,908	)	$	7,043	$	(4,933	)	$	7,043	$	2,110
Unrealized gain (loss) on derivatives	202		0			202		(74		)	128		(1,599		)	128		(1,471		)
Retirement obligation	0		(317		)	317		(117		)	200		(24,048		)	200		(23,848		)
Total	$	11,177	$	(293	)	$	11,470	$	(4,099	)	$	7,371	$	(30,580	)	$	7,371	$	(23,209	)

	Three months ended March 31, 2015
	Total other comprehensive income															Total accumulated other comprehensive income (loss)
(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	$	7,808		$	0		$	7,808		$	(2,800	)	$	5,008		$	(2,506	)	$	5,008		$	2,502
Unrealized gain (loss) on derivatives	(1,293		)	0			(1,293		)	477			(816		)	(949		)	(816		)	(1,765		)
Retirement obligation	0			(350		)	350			(167		)	183			(17,904		)	183			(17,721		)
Foreign currency translation	(20		)	0			(20		)	0			(20		)	(50		)	(20		)	(70		)
Total	$	6,495		$	(350	)	$	6,845		$	(2,490	)	$	4,355		$	(21,409	)	$	4,355		$	(17,054	)

The following table presents the activity reclassified from accumulated other comprehensive income into income during the three month period:

	Amount reclassified from accumulated other comprehensive income (1)
	Three months ended
	March 31,
(Dollars in thousands)	2016			2015			Affected Line Item in the Consolidated Statements of Income
Gains and losses on cash flow hedges
Interest rate contracts	$	0		$	0		Interest expense - deposits
Realized gains and losses on securities available-for-sale	24			0			Gains on sales of investments securities
Defined benefit pension plan
Amortization of prior service cost (2)	103			100			Salaries and employee benefits
Recognized net actuarial loss (2)	(420		)	(450		)	Salaries and employee benefits
Amortization and settlement charges of defined benefit pension items	(317		)	(350		)	Salaries and employee benefits
Total reclassifications for the period, before tax	$	(293	)	$	(350	)

(1) Negative amounts are reductions to net income.

(2) Included in the computation of net periodic pension cost (see Note 12 - Employee Benefit Plans for additional details).

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DERIVATIVES

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

First Financial uses certain derivative instruments, including interest rate caps, floors and swaps, to meet the needs of its clients while managing the interest rate risk associated with certain transactions.  First Financial does not use derivatives for speculative purposes.

First Financial primarily utilizes interest rate swaps as a means to offer borrowers credit-based products that meet their needs and may from time to time utilize interest rate swaps to manage the interest rate risk profile of the Company.

Interest rate swap agreements establish the basis on which interest rate payments are exchanged with counterparties, referred to as the notional amount. As only interest rate payments are exchanged, the cash requirements and credit risk associated with interest rate swaps are significantly less than the notional amount and the Company’s credit risk exposure is limited to the market value of the instruments. First Financial manages this market value credit risk 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. The Company is currently below all single counterparty and portfolio limits.

At March 31, 2016, the Company had a total counterparty notional amount outstanding of approximately $594.4 million, spread among ten counterparties, with an outstanding liability from these contracts of $24.3 million. At December 31, 2015, the Company had a total counterparty notional amount outstanding of approximately $551.7 million, spread among nine counterparties, with an outstanding liability from these contracts of $13.4 million.

First Financial’s exposure to credit loss, in the event of nonperformance by a borrower, is limited to the market value of the derivative instrument associated with that borrower. First Financial monitors its derivative credit exposure to borrowers by monitoring the creditworthiness of the related loan customers through the normal credit review processes the Company performs on all borrowers. Additionally, the Company monitors derivative credit risk exposure related to problem loans through the Company's ALLL committee. First Financial considers the market value of a derivative instrument to be part of the carrying value of the related loan for these purposes as the borrower is contractually obligated to pay First Financial this amount in the event the derivative contract is terminated.

Client Derivatives. First Financial utilizes interest rate swaps as a means to offer commercial borrowers fixed rate funding while providing the Company with floating rate assets.  The following table details the location and amounts recognized in the Consolidated Balance Sheets for client derivatives:

		March 31, 2016							December 31, 2015
				Estimated fair value							Estimated fair value
(Dollars in thousands)	Balance sheet location	Notional amount		Gain		Loss			Notional amount		Gain		Loss
Client derivatives - instruments associated with loans
Pay fixed interest rate swaps with counterparty	Accrued interest and other liabilities	$	3,733	$	0	$	(83	)	$	5,216	$	0	$	(120	)
Matched interest rate swaps with borrower	Accrued interest and other assets	590,640		24,740		0			546,458		13,981		(44		)
Matched interest rate swaps with counterparty	Accrued interest and other liabilities	590,640		0		(24,770		)	546,458		44		(14,015		)
Total		$	1,185,013	$	24,740	$	(24,853	)	$	1,098,132	$	14,025	$	(14,179	)

In connection with its use of derivative instruments, First Financial and its counterparties are required to post cash collateral to offset the market position of the derivative instruments under certain conditions. First Financial maintains the right to offset these derivative positions with the collateral posted against them by or with the relevant counterparties. First Financial classifies the derivative cash collateral outstanding with its counterparties as an adjustment to the fair value of the derivative contracts within Accrued interest and other assets or Accrued interest and other liabilities in the Consolidated Balance Sheets.

The following table discloses the gross and net amounts of liabilities recognized in the Consolidated Balance Sheets:

	March 31, 2016							December 31, 2015
(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 assets presented in the Consolidated Balance Sheets
Client derivatives
Pay fixed interest rate swaps with counterparty	$	83	$	0		$	83	$	120	$	0		$	120
Matched interest rate swaps with counterparty	24,770		(24,140		)	630		14,015		(16,710		)	(2,695		)
Total	$	24,853	$	(24,140	)	$	713	$	14,135	$	(16,710	)	$	(2,575	)

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 March 31, 2016:

							Weighted-average rate
(Dollars in thousands)	Notional amount		Average maturity (years)	Fair value			Receive		Pay
Client derivatives
Pay fixed interest rate swaps with counterparty	$	3,733	1.6	$	(83	)	2.55	%	7.19	%
Receive fixed, matched interest rate swaps with borrower	590,640		5.3	24,415			4.30	%	2.63	%
Pay fixed, matched interest rate swaps with counterparty	590,640		5.3	(24,445		)	2.63	%	4.30	%
Total client derivatives	$	1,185,013	5.2	$	(113	)	3.46	%	3.50	%

Credit Derivatives. In conjunction with participating interests in commercial loans, First Financial periodically enters into risk participation agreements with counterparties whereby First Financial assumes a portion of the credit exposure associated with an interest rate swap on the participated loan in exchange for a fee. Under these agreements, First Financial will make payments to the counterparty if the loan customer defaults on its obligation to perform under the interest rate swap contract with the counterparty. The total notional value of these agreements totaled $36.8 million as of March 31, 2016 and $33.6 million as of December 31, 2015. The fair value of these agreements was recorded on the Consolidated Balance Sheets in Accrued interest and other liabilities and was $0.1 million as of March 31, 2016 and December 31, 2015, respectively.

Mortgage Derivatives. First Financial enters into IRLCs and forward commitments for the future delivery of mortgage loans to third party investors, which are considered derivatives. When borrowers secure an IRLC with First Financial and the loan is intended to be sold, First Financial will enter into forward commitments for the future delivery of the loans to third party investors in order to hedge against the effect of changes in interest rates impacting IRLCs and and Loans held for sale. At March 31, 2016, the notional amount of the IRLCs was $30.8 million and the notional amount of forward commitments was $33.1 million. As of December 31, 2015, the notional amount of IRLCs was $18.5 million and the notional amount of forward commitments was $25.1 million. The fair value of these agreements was recorded on the Consolidated Balance Sheets in Accrued interest and other assets and was $0.3 million at March 31, 2016 and $0.1 million at December 31, 2015.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

 COMMITMENTS AND CONTINGENCIES

First Financial offers a variety of financial instruments with off-balance-sheet risk to assist clients in meeting their requirement 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 utilizes the same credit policies in issuing commitments and conditional obligations as it does for credit instruments recorded on the Consolidated Balance Sheets. First Financial’s exposure to credit loss, in the event of nonperformance by the counterparty 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 utilizes the ALLL methodology to maintain a reserve that it considers sufficient to absorb probable incurred losses inherent in standby letters of credit and outstanding loan commitments and records the reserve within Accrued interest and other liabilities on the Consolidated Balance Sheets.

Loan commitments. Loan commitments are agreements to extend credit to a client, absent any violation of conditions established in the commitment agreement.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if deemed necessary by First Financial upon extension of credit, is based on management’s credit evaluation of the client.  The collateral held varies, but may include securities, real estate, inventory, plant or equipment.  First Financial had commitments outstanding to extend credit totaling $2.1 billion at both March 31, 2016 and $2.0 billion at December 31, 2015.

Letters of credit. Letters of credit are conditional commitments issued by First Financial to guarantee the performance of a client to a third party.  First Financial’s portfolio of standby letters of credit consists primarily of performance assurances made on behalf of clients who have a contractual commitment to produce or deliver goods or services.  The risk to First Financial arises from its obligation to make payment in the event of the client's contractual default to produce the contracted good or service to a third party.  First Financial issued letters of credit (including standby letters of credit) aggregating $16.0 million and $16.3 million at March 31, 2016 and December 31, 2015, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Investments in Affordable housing projects. First Financial has made investments in certain qualified affordable housing projects. These projects are an indirect federal subsidy that provide tax incentives to encourage investment in the development, acquisition and rehabilitation of affordable rental housing, and allow investors to claim tax credits and other tax benefits (such as deductions from taxable income for operating losses) on their federal income tax returns. The principal risk associated with qualified affordable housing investments is the potential for noncompliance with the tax code requirements, such as, failure to rent property to qualified tenants, resulting in unavailability or recapture of the tax credits and other tax benefits. First Financial's affordable housing commitments totaled $30.3 million and $31.5 million as of March 31, 2016 and December 31, 2015, respectively. The affordable housing investments resulted in $0.7 million and $0.4 million of tax credits for the three months ended March 31, 2016 and 2015, respectively. First Financial had no affordable housing contingent commitments as of March 31, 2016 or December 31, 2015.

Contingencies/Litigation. First Financial and its subsidiaries are engaged in various matters of litigation, other assertions of improper or fraudulent loan practices or lending violations and other matters from time to time, and have a number of unresolved claims pending. Additionally, as part of the ordinary course of business, First Financial and its subsidiaries are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral and foreclosure interests that are incidental to our regular business activities. While the ultimate liability with respect to these other litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of March 31, 2016. Reserves are established for these various matters of litigation, when appropriate, under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had $0.8 million and $1.3 million of reserves related to litigation matters as of March 31, 2016 and December 31, 2015, respectively.

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INCOME TAXES

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

 INCOME TAXES

For the first quarter 2016, income tax expense was $9.9 million, resulting in an effective tax rate of 33.3%, compared with income tax expense of $8.5 million and an effective tax rate of 32.4% for the comparable period in 2015.

At March 31, 2016, and December 31, 2015, First Financial had no FASB ASC Topic 740-10 unrecognized tax benefits recorded. First Financial does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months.

First Financial regularly reviews its tax positions and establishes reserves for income tax-related uncertainties based on estimates of whether it is more likely than not that the tax uncertainty would be sustained upon challenge by the appropriate tax authorities, which would then result in additional taxes, penalties and interest due. These evaluations are inherently subjective as they require material estimates and may be susceptible to significant change.  Management determined that no reserve for income tax-related uncertainties was necessary as of March 31, 2016 and December 31, 2015.

First Financial and its subsidiaries are subject to U.S. federal income tax as well as state and local income tax in several jurisdictions.  The U.S. federal income tax examination for the tax year 2012 was completed in the third quarter of 2015. There was no impact to the Company's financial position and results of operations as a result of this examination. Tax years prior to 2013 have been closed and are no longer subject to U.S. federal income tax examinations. Tax years 2013 through 2015 remain open to examination by the federal taxing authority.

First Financial is no longer subject to state and local income tax examinations for years prior to 2011.  Tax years 2011 through 2015 remain open to state and local examination in various jurisdictions.

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EMPLOYEE BENEFIT PLANS

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees and uses a December 31 measurement date for the plan. Plan assets were primarily invested in publicly traded equity mutual funds and fixed income mutual funds. The pension plan does not directly own any shares of First Financial common stock or any other First Financial security or product.

First Financial made no cash contributions to fund the pension plan during the three months ended March 31, 2016, or the year ended December 31, 2015, and does not expect to make cash contributions to the plan through the remainder of the year. As a result of the plan’s actuarial projections, First Financial recorded income of $0.2 million and $0.3 million for each quarter ended March 31, 2016 and 2015, respectively.

The following table sets forth information concerning amounts recognized in First Financial’s Consolidated Statements of Income related to the Company's pension plan:

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Service cost	$	1,308		$	1,175
Interest cost	581			550
Expected return on assets	(2,431		)	(2,375		)
Amortization of prior service cost	(103		)	(100		)
Net actuarial loss	420			450
Net periodic benefit (income) cost	$	(225	)	$	(300	)

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EARNINGS PER COMMON SHARE

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended
	March 31,
(Dollars in thousands, except per share data)	2016		2015
Numerator
Net income available to common shareholders	$	19,814	$	17,621
Denominator
Basic earnings per common share - weighted average shares	61,036,797		61,013,489
Effect of dilutive securities
Employee stock awards	705,779		567,806
Warrants	97,671		150,549
Diluted earnings per common share - adjusted weighted average shares	61,840,247		61,731,844
Earnings per share available to common shareholders
Basic	$	0.32	$	0.29
Diluted	$	0.32	$	0.29

Warrants to purchase 322,312 and 465,117 shares of the Company's common stock were outstanding as of March 31, 2016 and 2015, respectively. These warrants, each representing the right to purchase one share of common stock, no par value per share, have an exercise price of $12.12 and expire on December 23, 2018.

Stock options and warrants, where the exercise price was greater than the average market price of the common shares, were not included in the computation of net income per diluted share as they would have been antidilutive.  Using the period-end price, there were no out-of-the-money options at March 31, 2016 and 20,626 out-of-the-money options at March 31, 2015.

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FAIR VALUE DISCLOSURES

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

FAIR VALUE DISCLOSURES

Fair Value Measurement

The fair value framework as disclosed in the 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 previously described are considered Level 3.

First Financial utilizes values provided by third-party pricing vendors to price the investment securities portfolio in accordance with the fair value hierarchy of the Fair Value Topic and reviews the pricing methodologies utilized by the pricing vendors to ensure that the fair value determination is consistent with the applicable accounting guidance.  First Financial’s month-end pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, historical prices and other independent pricing services.  Further, the Company periodically validates the fair values of a sample of securities in the portfolio by comparing the fair values to prices from other independent sources for the same or similar securities.  First Financial analyzes unusual or significant variances, conducts additional research with the pricing vendor, and if necessary, takes appropriate action based on its findings.  The results of the quality assurance process are incorporated into the selection of pricing providers by the portfolio manager.

Other investments. Other investments include holdings in FRB and FHLB stock which are carried at cost.

Loans held for sale. Loans held for sale are carried at 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 market price or 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 and leases. The fair value of commercial and industrial, 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 loans as Level 3 in the fair value hierarchy.

Impaired loans are specifically reviewed for purposes of determining the appropriate amount of impairment to be allocated to the ALLL.  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 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.  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 ALLL 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.

Fair values for purchased impaired loans were estimated using a discounted cash flow methodology that considers factors that include the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, 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 loans are grouped together according to similar characteristics and are treated in the aggregate when applying various valuation techniques. First Financial estimates 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 acquired loans accounted for outside of FASB ASC Topic 310-30 are 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 Company classifies the estimated fair value of covered loans as Level 3 in the fair value hierarchy.

FDIC indemnification asset. Fair value of the FDIC indemnification asset was estimated using projected cash flows related to the loss sharing agreements based on expected reimbursements for losses and the applicable loss sharing percentages. 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 five year period of loss protection expired for the majority of First Financial's covered commercial loans and covered OREO effective October 1, 2014. The Company classifies the estimated fair value of the indemnification asset as Level 3 in the fair value hierarchy.

Accrued interest receivable and payable. The carrying amount of accrued interest receivable and accrued interest payable approximate their fair values and is aligned with the underlying assets or liabilities (Level 1, Level 2 or Level 3).

Deposits. The fair value of demand deposits, savings accounts and certain money-market deposits represents the amount payable on demand at the reporting date.  The carrying amounts for variable-rate CDs approximated their fair values at the reporting date.  The fair value of fixed-rate CDs was estimated using a discounted cash flow calculation which applies the interest rates currently offered for deposits of similar remaining maturities. 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 in 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.  The Company classifies the estimated fair value of long-term debt as Level 2 in the fair value hierarchy.

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 which represents the cost to terminate the swap if First Financial should choose to do so. Additionally, First Financial utilizes an internally-developed model to value the credit risk component of 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.

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
March 31, 2016
Financial assets
Cash and short-term investments	$	118,257	$	118,257	$	118,257	$	0	$	0
Investment securities held-to-maturity	702,315		718,277		0		718,277		0
Other investments	53,255		N/A		N/A		N/A		N/A
Loans held for sale	15,369		15,369		0		15,369		0
Loans and leases, net of ALLL	5,450,877		5,488,942		0		0		5,488,942
FDIC indemnification asset	16,256		9,077		0		0		9,077
Accrued interest receivable	18,959		18,959		0		6,001		12,958
Financial liabilities
Deposits
Noninterest-bearing	$	1,408,609	$	1,408,609	$	0	$	1,408,609	$	0
Interest-bearing demand	1,430,963		1,430,963		0		1,430,963		0
Savings	1,922,892		1,922,892		0		1,922,892		0
Time	1,414,313		1,418,613		0		1,418,613		0
Total deposits	6,176,777		6,181,077		0		6,181,077		0
Short-term borrowings	969,899		969,899		969,899		0		0
Long-term debt	119,556		123,034		0		123,034		0
Accrued interest payable	3,650		3,650		503		3,147		0

	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2015
Financial assets
Cash and short-term investments	$	148,575	$	148,575	$	148,575	$	0	$	0
Investment securities held-to-maturity	726,259		731,951		0		731,951		0
Other investments	53,725		N/A		N/A		N/A		N/A
Loans held for sale	20,957		20,957		0		20,957		0
Loans and leases, net of ALLL	5,335,362		5,381,065		0		0		5,381,065
FDIC indemnification asset	17,630		9,756		0		0		9,756
Accrued interest receivable	16,995		16,995		0		5,791		11,204
Financial liabilities
Deposits
Noninterest-bearing	$	1,413,404	$	1,413,404	$	0	$	1,413,404	$	0
Interest-bearing demand	1,414,291		1,414,291		0		1,414,291		0
Savings	1,945,805		1,945,805		0		1,945,805		0
Time	1,406,124		1,406,489		0		1,406,489		0
Total deposits	6,179,624		6,179,989		0		6,179,989		0
Short-term borrowings	938,425		938,425		938,425		0		0
Long-term debt	119,540		118,691		0		118,691		0
Accrued interest payable	5,003		5,003		113		4,890		0

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
March 31, 2016
Assets
Derivatives	$	0	$	25,028	$	0	$	25,028
Investment securities available-for-sale	8,789		1,155,530		0		1,164,319
Total	$	8,789	$	1,180,558	$	0	$	1,189,347
Liabilities
Derivatives	$	0	$	24,952	$	0	$	24,952

	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
December 31, 2015
Assets
Derivatives	$	0	$	14,111	$	0	$	14,111
Investment securities available-for-sale	8,583		1,182,059		0		1,190,642
Total	$	8,583	$	1,196,170	$	0	$	1,204,753
Liabilities
Derivatives	$	0	$	14,243	$	0	$	14,243

Certain financial assets and liabilities are measured at fair value on a nonrecurring basis.  Adjustments to the fair market value of these assets usually result from the application of lower of cost or fair value accounting or write-downs of individual assets.  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
March 31, 2016
Assets
Loans held for sale	$	0	$	15,369	$	0
Impaired loans	0		0		8,784
OREO	0		0		7,051

	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2015
Assets
Loans held for sale	$	0	$	20,957	$	0
Impaired loans	0		0		8,008
OREO	0		0		7,598

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BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

Oak Street is a nationwide lender based in Indianapolis, Indiana that provides loans, secured by commissions and cash collateral accounts, primarily to insurance agents and brokers to grow their agency business and maximize their book-of-business value. Oak Street's lending activities are driven by agency acquisitions, agency ownership transitions, the purchase by agencies of books of business, as well as financing general working capital needs.  The underwriting of these loans involves analyses of collateral (through use of Oak Street's proprietary software system) that consists of insurance commissions revenue, which collateral is then monitored by Oak Street Funding throughout the life of the loans. First Financial acquired Oak Street for cash consideration and concurrent with the close of the transaction, First Financial paid off all of Oak Street's existing long-term debt, replacing higher-cost funding with the Company's lower-cost funding sources.

The Oak Street transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available.  As a result, the fair value adjustments for Oak Street may change as information becomes available, but no later than August 2016.

The following table provides the purchase price calculation as of the acquisition date and the identifiable assets purchased and the liabilities assumed at their estimated fair value:

(Dollars in thousands)	Oak Street
Purchase consideration
Cash consideration	$	110,000
Payoff of long-term borrowings	197,839
Total purchase consideration	$	307,839
Assets acquired
Cash	$	2,248
Loans	237,377
Intangible assets	813
Other assets	2,633
Total assets	$	243,071
Liabilities assumed
Other liabilities	$	1,577
Total liabilities	$	1,577
Net identifiable assets	$	241,494
Goodwill	$	66,345

The goodwill arising from the Oak Street acquisition reflects the business's high growth potential and scalable platform. The acquisition leverages First Financial’s excess capital and is expected to provide additional revenue growth and diversification. The goodwill is not deductible for income tax purposes as the merger was accounted for as a tax-free exchange. The tax-free exchange resulted in a carryover of tax attributes and tax basis to the Company's subsequent income tax filings and was adjusted for any fair value adjustments required in accounting for the acquisitions. For further detail, see Note 6 – Goodwill and Other Intangible Assets.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2016

Basis of Presentation Policy

The Consolidated Financial Statements of First Financial Bancorp., 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.  All significant intercompany transactions and accounts have been eliminated in consolidation.  Certain reclassifications of prior periods' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

Use of Estimates, Policy

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.  These estimates, assumptions and judgments are inherently subjective and may be susceptible to significant change.  Actual realized amounts could differ materially from these estimates.  

Certain Loans and Debt Securities Acquired in Transfer, Recognizing Interest Income on Impaired Loans, Policy

Loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, are referred to as purchased impaired loans. First Financial accounts for the majority of loans acquired in FDIC transactions as purchased impaired loans, except for loans with revolving privileges, which are outside the scope of FASB ASC Topic 310-30, and loans for which cash flows could not be estimated, which are accounted for under the cost recovery method. Purchased impaired loans include loans previously covered under loss sharing agreements as well as loans that remain subject to FDIC loss sharing coverage.

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 purchased impaired loans.

Loans and Leases Receivable, Past Due Status, Policy

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 date of the scheduled payment.

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 90 days or more past due. Generally, loans are classified as nonaccrual 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 classified as nonaccrual. 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 return to accrual status if collection of future principal and interest payments is no longer doubtful.

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 provision for loan and lease losses or prospective yield adjustments.

Loans and Leases Receivable, Troubled Debt Restructuring Policy

A loan modification is considered a TDR when the borrower is experiencing financial difficulty and 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 restructured terms of the loan agreement.

Impaired Financing Receivable, Policy

Loans classified as nonaccrual and loans modified as 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 is necessary based on the borrower’s overall financial condition, resources and payment record, support from guarantors and the realizable value of any collateral. Specific allowances are based on discounted cash flows 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

OREO is comprised of properties acquired by the Company primarily through the loan foreclosure or repossession process, or other resolution activity that results in partial or total satisfaction of problem loans.

Loans and Leases Receivable, Allowance for Loan Losses Policy

For each reporting period, management maintains the ALLL at a level that it considers sufficient to absorb probable incurred 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.

The allowance is increased by provision expense and decreased by 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.

Goodwill and Intangible Assets, Goodwill, Policy

Assets and liabilities acquired in a business combination 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 and Intangible Assets, Goodwill Impairment Policy

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

primarily consist of core deposit intangibles.  Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships. Core deposit intangibles are recorded at their estimated fair value at the date of acquisition and are then amortized on an accelerated basis over their estimated useful lives.

Income Tax, Policy

First Financial regularly reviews its tax positions and establishes reserves for income tax-related uncertainties based on estimates of whether it is more likely than not that the tax uncertainty would be sustained upon challenge by the appropriate tax authorities, which would then result in additional taxes, penalties and interest due. These evaluations are inherently subjective as they require material estimates and may be susceptible to significant change.  

Commitments and Contingencies, Policy

First Financial offers a variety of financial instruments with off-balance-sheet risk to assist clients in meeting their requirement 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 utilizes the same credit policies in issuing commitments and conditional obligations as it does for credit instruments recorded on the Consolidated Balance Sheets. First Financial’s exposure to credit loss, in the event of nonperformance by the counterparty 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 utilizes the ALLL methodology to maintain a reserve that it considers sufficient to absorb probable incurred losses inherent in standby letters of credit and outstanding loan commitments and records the reserve within Accrued interest and other liabilities on the Consolidated Balance Sheets.

Fair Value of Financial Instruments, Policy

Fair Value Measurement

The fair value framework as disclosed in the 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 previously described are considered Level 3.

First Financial utilizes values provided by third-party pricing vendors to price the investment securities portfolio in accordance with the fair value hierarchy of the Fair Value Topic and reviews the pricing methodologies utilized by the pricing vendors to ensure that the fair value determination is consistent with the applicable accounting guidance.  First Financial’s month-end pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, historical prices and other independent pricing services.  Further, the Company periodically validates the fair values of a sample of securities in the portfolio by comparing the fair values to prices from other independent sources for the same or similar securities.  First Financial analyzes unusual or significant variances, conducts additional research with the pricing vendor, and if necessary, takes appropriate action based on its findings.  The results of the quality assurance process are incorporated into the selection of pricing providers by the portfolio manager.

Other investments. Other investments include holdings in FRB and FHLB stock which are carried at cost.

Loans held for sale. Loans held for sale are carried at 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 market price or 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 and leases. The fair value of commercial and industrial, 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 loans as Level 3 in the fair value hierarchy.

Impaired loans are specifically reviewed for purposes of determining the appropriate amount of impairment to be allocated to the ALLL.  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 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.  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 ALLL 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.

Fair values for purchased impaired loans were estimated using a discounted cash flow methodology that considers factors that include the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, 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 loans are grouped together according to similar characteristics and are treated in the aggregate when applying various valuation techniques. First Financial estimates 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 acquired loans accounted for outside of FASB ASC Topic 310-30 are 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 Company classifies the estimated fair value of covered loans as Level 3 in the fair value hierarchy.

FDIC indemnification asset. Fair value of the FDIC indemnification asset was estimated using projected cash flows related to the loss sharing agreements based on expected reimbursements for losses and the applicable loss sharing percentages. 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 five year period of loss protection expired for the majority of First Financial's covered commercial loans and covered OREO effective October 1, 2014. The Company classifies the estimated fair value of the indemnification asset as Level 3 in the fair value hierarchy.

Accrued interest receivable and payable. The carrying amount of accrued interest receivable and accrued interest payable approximate their fair values and is aligned with the underlying assets or liabilities (Level 1, Level 2 or Level 3).

Deposits. The fair value of demand deposits, savings accounts and certain money-market deposits represents the amount payable on demand at the reporting date.  The carrying amounts for variable-rate CDs approximated their fair values at the reporting date.  The fair value of fixed-rate CDs was estimated using a discounted cash flow calculation which applies the interest rates currently offered for deposits of similar remaining maturities. 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 in 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.  The Company classifies the estimated fair value of long-term debt as Level 2 in the fair value hierarchy.

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 which represents the cost to terminate the swap if First Financial should choose to do so. Additionally, First Financial utilizes an internally-developed model to value the credit risk component of 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.

Other Contract-Mortgage

Derivatives, Methods of Accounting, Hedging Derivatives, Policy

First Financial enters into IRLCs and forward commitments for the future delivery of mortgage loans to third party investors, which are considered derivatives. When borrowers secure an IRLC with First Financial and the loan is intended to be sold, First Financial will enter into forward commitments for the future delivery of the loans to third party investors in order to hedge against the effect of changes in interest rates impacting IRLCs and and Loans held for sale.

Credit Risk

Derivatives, Methods of Accounting, Hedging Derivatives, Policy

First Financial manages this market value credit risk 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.

Fair Value Hedges

Derivatives, Methods of Accounting, Hedging Derivatives, Policy

First Financial utilizes interest rate swaps as a means to offer commercial borrowers fixed rate funding while providing the Company with floating rate assets.

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INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016:

	Held-to-maturity									Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss			Fair value		Amortized cost		Unrealized gain		Unrealized loss			Fair value
U.S. Treasuries	$	0	$	0	$	0		$	0	$	98	$	3	$	0		$	101
Securities of U.S. government agencies and corporations	14,935		373		0			15,308		8,183		223		0			8,406
Mortgage-backed securities	655,387		15,615		(410		)	670,592		720,407		6,868		(4,493		)	722,782
Obligations of state and other political subdivisions	27,180		480		(2		)	27,658		103,215		3,437		(443		)	106,209
Asset-backed securities	0		0		0			0		258,731		31		(5,266		)	253,496
Other securities	4,813		0		(94		)	4,719		74,459		632		(1,766		)	73,325
Total	$	702,315	$	16,468	$	(506	)	$	718,277	$	1,165,093	$	11,194	$	(11,968	)	$	1,164,319

The following is a summary of held-to-maturity and available-for-sale investment securities as of December 31, 2015:

	Held-to-maturity									Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss			Fair value		Amortized cost		Unrealized gain		Unrealized loss			Fair value
U.S. Treasuries	$	0	$	0	$	0		$	0	$	98	$	0	$	(1	)	$	97
Securities of U.S. government agencies and corporations	15,486		121		0			15,607		8,183		157		0			8,340
Mortgage-backed securities	678,318		7,452		(1,999		)	683,771		775,285		2,708		(12,926		)	765,067
Obligations of state and other political subdivisions	27,646		338		(99		)	27,885		105,212		2,655		(730		)	107,137
Asset-backed securities	0		0		0			0		236,411		35		(3,445		)	233,001
Other securities	4,809		0		(121		)	4,688		77,876		523		(1,399		)	77,000
Total	$	726,259	$	7,911	$	(2,219	)	$	731,951	$	1,203,065	$	6,078	$	(18,501	)	$	1,190,642

Summary of Investment Securities by Estimated Maturity

The following table provides a summary of investment securities by contractual maturity or estimated weighted average life as of March 31, 2016. Estimated lives on amortizing investment securities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	5,105	$	5,207	$	58,659	$	58,493
Due after one year through five years	563,324		574,597		775,602		774,467
Due after five years through ten years	133,886		138,473		303,552		304,623
Due after ten years	0		0		27,280		26,736
Total	$	702,315	$	718,277	$	1,165,093	$	1,164,319

Age of Gross Unrealized Losses and Associated Fair Value by Investment Category

The following tables provide the fair value and gross unrealized losses on investment securities in an unrealized loss position, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:

	March 31, 2016
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Fair value		Unrealized loss			Fair value		Unrealized loss			Fair value		Unrealized loss
Mortgage-backed securities	$	167,950	$	(1,299	)	$	235,099	$	(3,604	)	$	403,049	$	(4,903	)
Obligations of state and other political subdivisions	6,684		(53		)	20,758		(392		)	27,442		(445		)
Asset-backed securities	215,166		(4,217		)	24,018		(1,049		)	239,184		(5,266		)
Other securities	34,001		(1,123		)	16,766		(737		)	50,767		(1,860		)
Total	$	423,801	$	(6,692	)	$	296,641	$	(5,782	)	$	720,442	$	(12,474	)

	December 31, 2015
	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	value		loss			value		loss			value		loss
Securities of U.S. government agencies and corporations	$	97	$	0		$	0	$	0		$	97	$	0
Mortgage-backed securities	500,768		(5,363		)	246,523		(9,563		)	747,291		(14,926		)
Obligations of state and other political subdivisions	5,800		(65		)	29,287		(764		)	35,087		(829		)
Asset-backed securities	189,066		(3,042		)	17,144		(403		)	206,210		(3,445		)
Other securities	30,828		(592		)	24,716		(928		)	55,544		(1,520		)
Total	$	726,559	$	(9,062	)	$	317,670	$	(11,658	)	$	1,044,229	$	(20,720	)

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LOANS AND LEASES (Tables)

3 Months Ended

Mar. 31, 2016

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
	March 31,
(Dollars in thousands)	2016			2015
Balance at beginning of period	$	64,857		$	106,622
Reclassification from/(to) nonaccretable difference	318			(1,576		)
Accretion	(4,210		)	(6,357		)
Other net activity (1)	(2,241		)	(6,701		)
Balance at end of period	$	58,724		$	91,988

Commercial and Consumer Credit Exposure by Risk Attribute

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

	As of March 31, 2016
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,680,764	$	337,472	$	2,182,683	$	99,583	$	4,300,502
Special Mention	22,155		3,417		19,754		0		45,326
Substandard	41,813		564		59,420		1,552		103,349
Doubtful	0		0		0		0		0
Total	$	1,744,732	$	341,453	$	2,261,857	$	101,135	$	4,449,177

(Dollars in thousands)	Real Estate Residential		Home Equity		Installment		Other		Total
Performing	$	499,849	$	460,341	$	41,408	$	39,283	$	1,040,881
Nonperforming	8,663		5,669		219		0		14,551
Total	$	508,512	$	466,010	$	41,627	$	39,283	$	1,055,432

	As of December 31, 2015
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Leasing		Total
Pass	$	1,596,415	$	310,806	$	2,179,701	$	93,236	$	4,180,158
Special Mention	27,498		128		19,903		0		47,529
Substandard	39,189		778		58,693		750		99,410
Doubtful	0		0		0		0		0
Total	$	1,663,102	$	311,712	$	2,258,297	$	93,986	$	4,327,097

(Dollars in thousands)	Real Estate Residential		Home Equity		Installment		Other		Total
Performing	$	503,317	$	461,188	$	41,253	$	41,217	$	1,046,975
Nonperforming	8,994		5,441		253		0		14,688
Total	$	512,311	$	466,629	$	41,506	$	41,217	$	1,061,663

Loan Delinquency, including Nonaccrual Loans

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

	As of March 31, 2016
(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	$	4,354	$	310	$	3,034	$	7,698	$	1,729,886	$	1,737,584	$	7,148	$	1,744,732	$	0
Real estate - construction	5,002		0		0		5,002		335,689		340,691		762		341,453		0
Real estate - commercial	2,718		0		6,631		9,349		2,141,626		2,150,975		110,882		2,261,857		0
Real estate - residential	858		0		2,020		2,878		450,582		453,460		55,052		508,512		0
Home equity	505		81		3,025		3,611		460,929		464,540		1,470		466,010		0
Installment	133		13		67		213		39,713		39,926		1,701		41,627		0
Other	435		328		59		822		139,596		140,418		0		140,418		59
Total	$	14,005	$	732	$	14,836	$	29,573	$	5,298,021	$	5,327,594	$	177,015	$	5,504,609	$	59

	As of December 31, 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	$	2,255	$	2,232	$	1,937	$	6,424	$	1,648,902	$	1,655,326	$	7,776	$	1,663,102	$	0
Real estate - construction	0		17		0		17		310,872		310,889		823		311,712		0
Real estate - commercial	2,501		913		7,421		10,835		2,124,290		2,135,125		123,172		2,258,297		0
Real estate - residential	1,220		239		2,242		3,701		451,907		455,608		56,703		512,311		0
Home equity	696		248		2,830		3,774		461,647		465,421		1,208		466,629		0
Installment	197		111		48		356		39,206		39,562		1,944		41,506		0
Other	920		302		230		1,452		133,751		135,203		0		135,203		108
Total	$	7,789	$	4,062	$	14,708	$	26,559	$	5,170,575	$	5,197,134	$	191,626	$	5,388,760	$	108

Loans Restructured During Period

The following tables provide information on loan modifications classified as TDRs during the three months ended March 31, 2016 and 2015:

	Three months ended
	March 31, 2016					March 31, 2015
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial	8	$	2,083	$	2,095	8	$	360	$	359
Real estate - construction	0	0		0		0	0		0
Real estate - commercial	1	42		42		6	12,914		9,343
Real estate - residential	2	281		247		0	0		0
Home equity	4	149		140		0	0		0
Installment	2	7		7		0	0		0
Total	17	$	2,562	$	2,531	14	$	13,274	$	9,702

Loans Restructured, Modifications

The following table provides information on how TDRs were modified during the three months ended March 31, 2016 and 2015.

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Extended maturities	$	486	$	9,481
Adjusted interest rates	0		0
Combination of rate and maturity changes	162		62
Forbearance	0		0
Other (1)	1,883		159
Total	$	2,531	$	9,702

(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
	March 31, 2016			March 31, 2015
(Dollars in thousands)	Number of loans	Period end balance		Number of loans	Period end balance
Commercial	1	$	55	0	$	0
Real estate - construction	0	0		0	0
Real estate - commercial	0	0		3	967
Real estate - residential	1	214		1	73
Home equity	1	28		0	0
Installment	1	4		0	0
Total	4	$	301	4	$	1,040

Nonaccrual, Restructured and Impaired Loans

The following table provides information on impaired loans, excluding purchased impaired loans.

(Dollars in thousands)	March 31, 2016		December 31, 2015
Impaired loans
Nonaccrual loans (1)
Commercial	$	3,917	$	8,405
Real estate-construction	0		0
Real estate-commercial	8,577		9,418
Real estate-residential	4,243		5,027
Home equity	5,036		4,898
Installment	113		127
Other	121		122
Nonaccrual loans (1)	22,007		27,997
Accruing troubled debt restructurings	30,127		28,876
Total impaired loans	$	52,134	$	56,873

(1) Nonaccrual loans include nonaccrual TDRs of $7.5 million and $9.3 million as of March 31, 2016 and December 31, 2015, respectively.

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Interest income effect on impaired loans
Gross amount of interest that would have been recorded under original terms	$	754	$	967
Interest included in income
Nonaccrual loans	76		171
Troubled debt restructurings	232		132
Total interest included in income	308		303
Net impact on interest income	$	446	$	664

Investment in Impaired Loans

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

	As of March 31, 2016
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		YTD interest income recognized
Loans with no related allowance recorded
Commercial	$	13,512	$	14,442	$	0	$	14,965	$	74
Real estate - construction	0		0		0		0		0
Real estate - commercial	14,003		18,707		0		15,152		70
Real estate - residential	7,126		8,383		0		7,287		46
Home equity	5,569		7,673		0		5,455		21
Installment	219		236		0		236		1
Other	121		121		0		122		0
Total	40,550		49,562		0		43,217		212
Loans with an allowance recorded
Commercial	973		1,163		400		983		9
Real estate - construction	0		0		0		0		0
Real estate - commercial	8,974		8,974		763		8,663		77
Real estate - residential	1,537		1,551		236		1,542		9
Home equity	100		100		2		101		1
Installment	0		0		0		0		0
Other	0		0		0		0		0
Total	11,584		11,788		1,401		11,289		96
Total
Commercial	14,485		15,605		400		15,948		83
Real estate - construction	0		0		0		0		0
Real estate - commercial	22,977		27,681		763		23,815		147
Real estate - residential	8,663		9,934		236		8,829		55
Home equity	5,669		7,773		2		5,556		22
Installment	219		236		0		236		1
Other	121		121		0		122		0
Total	$	52,134	$	61,350	$	1,401	$	54,506	$	308

	As of and for the year December 31, 2015
(Dollars in thousands)	Current balance		Contractual principal balance		Related allowance		Average current balance		Interest income recognized
Loans with no related allowance recorded
Commercial	$	16,418	$	17,398	$	0	$	10,468	$	258
Real estate - construction	0		0		0		150		0
Real estate - commercial	16,301		20,479		0		19,363		344
Real estate - residential	7,447		8,807		0		8,143		184
Home equity	5,340		7,439		0		5,648		82
Installment	253		276		0		380		7
Other	122		122		0		24		0
Total	45,881		54,521		0		44,176		875
Loans with an allowance recorded
Commercial	993		1,178		357		1,409		26
Real estate - construction	0		0		0		0		0
Real estate - commercial	8,351		8,706		979		12,928		213
Real estate - residential	1,547		1,560		235		1,696		40
Home equity	101		101		2		101		3
Installment	0		0		0		0		0
Other	0		0		0		0		0
Total	10,992		11,545		1,573		16,134		282
Total
Commercial	17,411		18,576		357		11,877		284
Real estate - construction	0		0		0		150		0
Real estate - commercial	24,652		29,185		979		32,291		557
Real estate - residential	8,994		10,367		235		9,839		224
Home equity	5,441		7,540		2		5,749		85
Installment	253		276		0		380		7
Other	122		122		0		24		0
Total	$	56,873	$	66,066	$	1,573	$	60,310	$	1,157

Changes in Other Real Estate Owned

Changes in OREO were as follows:

	Three months ended
	March 31,
(Dollars in thousands)	2016 (1)			2015 (1)
Balance at beginning of period	$	13,254		$	22,674
Additions
Commercial	786			2,173
Residential	122			1,058
Total additions	908			3,231
Disposals
Commercial	(200		)	(4,145		)
Residential	(1,835		)	(412		)
Total disposals	(2,035		)	(4,557		)
Valuation adjustment
Commercial	(117		)	(418		)
Residential	(71		)	(24		)
Total valuation adjustment	(188		)	(442		)
Balance at end of period	$	11,939		$	20,906

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
	March 31,
(Dollars in thousands)	2016			2015			Affected Line Item in the Consolidated Statements of Income
Balance at beginning of period	$	17,630		$	22,666
Adjustments not reflected in income
Net FDIC claims (received) / paid	362			204
Adjustments reflected in income
Amortization	(1,171		)	(1,195		)	Interest income, other earning assets
FDIC loss sharing income	(565		)	(1,046		)	Noninterest income, FDIC loss sharing income
Offset to accelerated discount	0			(232		)	Noninterest income, accelerated discount on covered loans
Balance at end of period	$	16,256		$	20,397

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ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)

3 Months Ended

Mar. 31, 2016

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

Changes in the Allowance for Loan and Lease Losses for the Current and Comparable Quarter

Changes in the allowance for loan and lease losses were as follows:

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Changes in the allowance for loan and lease losses on total loans
Balance at beginning of period	$	53,398		$	52,858
Provision for loan and lease losses	1,655			2,060
Loans charged-off	(2,442		)	(5,044		)
Recoveries	1,121			3,202
Balance at end of period	$	53,732		$	53,076

Allowance for Loan and Lease Losses by Classification

Year-to-date changes in the allowance for loan and lease losses by loan category were as follows:

	Three months ended March 31, 2016
			Real Estate
(Dollars in thousands)	Comm		Constr			Comm			Resid			Home Equity		Install			Other		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	16,995	$	1,810		$	23,656		$	4,014		$	3,943	$	386		$	2,594	$	53,398
Provision for loan and lease losses	1,432		439			(420		)	8			185		(58		)	69		1,655
Gross charge-offs	479		3			1,262			45			340		73			240		2,442
Recoveries	222		26			442			63			188		99			81		1,121
Total net charge-offs	257		(23		)	820			(18		)	152		(26		)	159		1,321
Ending allowance for loan and lease losses	$	18,170	$	2,272		$	22,416		$	4,040		$	3,976	$	354		$	2,504	$	53,732
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	400	$	0		$	763		$	236		$	2	$	0		$	0	$	1,401
Collectively evaluated for impairment	17,770		2,272			21,653			3,804			3,974		354			2,504		52,331
Ending allowance for loan and lease losses	$	18,170	$	2,272		$	22,416		$	4,040		$	3,976	$	354		$	2,504	$	53,732
Loans
Loans individually evaluated for impairment	$	14,485	$	0		$	22,977		$	8,663		$	5,669	$	219		$	121	$	52,134
Loans collectively evaluated for impairment	1,730,247		341,453			2,238,880			499,849			460,341		41,408			140,297		5,452,475
Total loans	$	1,744,732	$	341,453		$	2,261,857		$	508,512		$	466,010	$	41,627		$	140,418	$	5,504,609

	Three months ended March 31, 2015
				Real Estate
(Dollars in thousands)	Comm			Constr			Comm		Resid		Home Equity		Install		Other		Total
Allowance for loan and lease losses:
Balance at beginning of period	$	13,870		$	1,045		$	27,086	$	3,753	$	4,260	$	407	$	2,437	$	52,858
Provision for loan and lease losses	1,059			147			112		70		472		61		139		2,060
Gross charge-offs	1,568			0			1,870		404		741		167		294		5,044
Recoveries	2,183			45			491		64		288		86		45		3,202
Total net charge-offs	(615		)	(45		)	1,379		340		453		81		249		1,842
Ending allowance for loan and lease losses	$	15,544		$	1,237		$	25,819	$	3,483	$	4,279	$	387	$	2,327	$	53,076
	December 31, 2015
				Real Estate
(Dollars in thousands)	Comm			Constr			Comm		Resid		Home Equity		Install		Other		Total
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	357		$	0		$	979	$	235	$	2	$	0	$	0	$	1,573
Collectively evaluated for impairment	16,638			1,810			22,677		3,779		3,941		386		2,594		51,825
Ending allowance for loan and lease losses	$	16,995		$	1,810		$	23,656	$	4,014	$	3,943	$	386	$	2,594	$	53,398
Loans
Loans individually evaluated for impairment	$	17,411		$	0		$	24,652	$	8,994	$	5,441	$	253	$	122	$	56,873
Loans collectively evaluated for impairment	1,645,691			311,712			2,233,645		503,317		461,188		41,253		135,081		5,331,887
Total loans	$	1,663,102		$	311,712		$	2,258,297	$	512,311	$	466,629	$	41,506	$	135,203	$	5,388,760

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill for the quarter ended March 31, 2016 and the year ended December 31, 2015 are shown below.

(Dollars in thousands)	March 31, 2016		December 31, 2015
Balance at beginning of year	$	204,084	$	137,739
Goodwill resulting from business combinations	0		66,345
Balance at end of period	$	204,084	$	204,084

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BORROWINGS (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Summary of Long-term Debt

The following is a summary of First Financial's long-term debt:

	March 31, 2016				December 31, 2015
(Dollars in thousands)	Amount		Average rate		Amount		Average rate
Subordinated debt	$	118,332	5.20	%	$	118,312	5.20	%
FHLB advances	449		2.39	%	453		2.37	%
Capital loan with municipality	775		0.00	%	775		0.00	%
Total long-term debt	$	119,556	5.15	%	$	119,540	5.15	%

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Related Tax Effects Allocated to Other Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

The related tax effects allocated to other comprehensive income and reclassifications out of accumulated other comprehensive income (loss) are as follows

	Three months ended March 31, 2016
	Total other comprehensive income												Total accumulated other comprehensive income (loss)
(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	$	10,975	$	24		$	10,951	$	(3,908	)	$	7,043	$	(4,933	)	$	7,043	$	2,110
Unrealized gain (loss) on derivatives	202		0			202		(74		)	128		(1,599		)	128		(1,471		)
Retirement obligation	0		(317		)	317		(117		)	200		(24,048		)	200		(23,848		)
Total	$	11,177	$	(293	)	$	11,470	$	(4,099	)	$	7,371	$	(30,580	)	$	7,371	$	(23,209	)

	Three months ended March 31, 2015
	Total other comprehensive income															Total accumulated other comprehensive income (loss)
(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	$	7,808		$	0		$	7,808		$	(2,800	)	$	5,008		$	(2,506	)	$	5,008		$	2,502
Unrealized gain (loss) on derivatives	(1,293		)	0			(1,293		)	477			(816		)	(949		)	(816		)	(1,765		)
Retirement obligation	0			(350		)	350			(167		)	183			(17,904		)	183			(17,721		)
Foreign currency translation	(20		)	0			(20		)	0			(20		)	(50		)	(20		)	(70		)
Total	$	6,495		$	(350	)	$	6,845		$	(2,490	)	$	4,355		$	(21,409	)	$	4,355		$	(17,054	)

Other Accumulated Comprehensive income reclassified from AOCI

The following table presents the activity reclassified from accumulated other comprehensive income into income during the three month period:

	Amount reclassified from accumulated other comprehensive income (1)
	Three months ended
	March 31,
(Dollars in thousands)	2016			2015			Affected Line Item in the Consolidated Statements of Income
Gains and losses on cash flow hedges
Interest rate contracts	$	0		$	0		Interest expense - deposits
Realized gains and losses on securities available-for-sale	24			0			Gains on sales of investments securities
Defined benefit pension plan
Amortization of prior service cost (2)	103			100			Salaries and employee benefits
Recognized net actuarial loss (2)	(420		)	(450		)	Salaries and employee benefits
Amortization and settlement charges of defined benefit pension items	(317		)	(350		)	Salaries and employee benefits
Total reclassifications for the period, before tax	$	(293	)	$	(350	)

(1) Negative amounts are reductions to net income.

(2) Included in the computation of net periodic pension cost (see Note 12 - Employee Benefit Plans for additional details).

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DERIVATIVES (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Financial Instruments and Balances

The following table details the location and amounts recognized in the Consolidated Balance Sheets for client derivatives:

		March 31, 2016							December 31, 2015
				Estimated fair value							Estimated fair value
(Dollars in thousands)	Balance sheet location	Notional amount		Gain		Loss			Notional amount		Gain		Loss
Client derivatives - instruments associated with loans
Pay fixed interest rate swaps with counterparty	Accrued interest and other liabilities	$	3,733	$	0	$	(83	)	$	5,216	$	0	$	(120	)
Matched interest rate swaps with borrower	Accrued interest and other assets	590,640		24,740		0			546,458		13,981		(44		)
Matched interest rate swaps with counterparty	Accrued interest and other liabilities	590,640		0		(24,770		)	546,458		44		(14,015		)
Total		$	1,185,013	$	24,740	$	(24,853	)	$	1,098,132	$	14,025	$	(14,179	)

Disclosure by Type of Financial Instrument

The following table discloses the gross and net amounts of liabilities recognized in the Consolidated Balance Sheets:

	March 31, 2016							December 31, 2015
(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 assets presented in the Consolidated Balance Sheets
Client derivatives
Pay fixed interest rate swaps with counterparty	$	83	$	0		$	83	$	120	$	0		$	120
Matched interest rate swaps with counterparty	24,770		(24,140		)	630		14,015		(16,710		)	(2,695		)
Total	$	24,853	$	(24,140	)	$	713	$	14,135	$	(16,710	)	$	(2,575	)

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 March 31, 2016:

							Weighted-average rate
(Dollars in thousands)	Notional amount		Average maturity (years)	Fair value			Receive		Pay
Client derivatives
Pay fixed interest rate swaps with counterparty	$	3,733	1.6	$	(83	)	2.55	%	7.19	%
Receive fixed, matched interest rate swaps with borrower	590,640		5.3	24,415			4.30	%	2.63	%
Pay fixed, matched interest rate swaps with counterparty	590,640		5.3	(24,445		)	2.63	%	4.30	%
Total client derivatives	$	1,185,013	5.2	$	(113	)	3.46	%	3.50	%

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EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Mar. 31, 2016

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 Statements of Income related to the Company's pension plan:

	Three months ended
	March 31,
(Dollars in thousands)	2016			2015
Service cost	$	1,308		$	1,175
Interest cost	581			550
Expected return on assets	(2,431		)	(2,375		)
Amortization of prior service cost	(103		)	(100		)
Net actuarial loss	420			450
Net periodic benefit (income) cost	$	(225	)	$	(300	)

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EARNINGS PER COMMON SHARE (Tables)

3 Months Ended

Mar. 31, 2016

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:

	Three months ended
	March 31,
(Dollars in thousands, except per share data)	2016		2015
Numerator
Net income available to common shareholders	$	19,814	$	17,621
Denominator
Basic earnings per common share - weighted average shares	61,036,797		61,013,489
Effect of dilutive securities
Employee stock awards	705,779		567,806
Warrants	97,671		150,549
Diluted earnings per common share - adjusted weighted average shares	61,840,247		61,731,844
Earnings per share available to common shareholders
Basic	$	0.32	$	0.29
Diluted	$	0.32	$	0.29

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FAIR VALUE DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2016

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:

	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
March 31, 2016
Financial assets
Cash and short-term investments	$	118,257	$	118,257	$	118,257	$	0	$	0
Investment securities held-to-maturity	702,315		718,277		0		718,277		0
Other investments	53,255		N/A		N/A		N/A		N/A
Loans held for sale	15,369		15,369		0		15,369		0
Loans and leases, net of ALLL	5,450,877		5,488,942		0		0		5,488,942
FDIC indemnification asset	16,256		9,077		0		0		9,077
Accrued interest receivable	18,959		18,959		0		6,001		12,958
Financial liabilities
Deposits
Noninterest-bearing	$	1,408,609	$	1,408,609	$	0	$	1,408,609	$	0
Interest-bearing demand	1,430,963		1,430,963		0		1,430,963		0
Savings	1,922,892		1,922,892		0		1,922,892		0
Time	1,414,313		1,418,613		0		1,418,613		0
Total deposits	6,176,777		6,181,077		0		6,181,077		0
Short-term borrowings	969,899		969,899		969,899		0		0
Long-term debt	119,556		123,034		0		123,034		0
Accrued interest payable	3,650		3,650		503		3,147		0

	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2015
Financial assets
Cash and short-term investments	$	148,575	$	148,575	$	148,575	$	0	$	0
Investment securities held-to-maturity	726,259		731,951		0		731,951		0
Other investments	53,725		N/A		N/A		N/A		N/A
Loans held for sale	20,957		20,957		0		20,957		0
Loans and leases, net of ALLL	5,335,362		5,381,065		0		0		5,381,065
FDIC indemnification asset	17,630		9,756		0		0		9,756
Accrued interest receivable	16,995		16,995		0		5,791		11,204
Financial liabilities
Deposits
Noninterest-bearing	$	1,413,404	$	1,413,404	$	0	$	1,413,404	$	0
Interest-bearing demand	1,414,291		1,414,291		0		1,414,291		0
Savings	1,945,805		1,945,805		0		1,945,805		0
Time	1,406,124		1,406,489		0		1,406,489		0
Total deposits	6,179,624		6,179,989		0		6,179,989		0
Short-term borrowings	938,425		938,425		938,425		0		0
Long-term debt	119,540		118,691		0		118,691		0
Accrued interest payable	5,003		5,003		113		4,890		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
March 31, 2016
Assets
Derivatives	$	0	$	25,028	$	0	$	25,028
Investment securities available-for-sale	8,789		1,155,530		0		1,164,319
Total	$	8,789	$	1,180,558	$	0	$	1,189,347
Liabilities
Derivatives	$	0	$	24,952	$	0	$	24,952

	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
December 31, 2015
Assets
Derivatives	$	0	$	14,111	$	0	$	14,111
Investment securities available-for-sale	8,583		1,182,059		0		1,190,642
Total	$	8,583	$	1,196,170	$	0	$	1,204,753
Liabilities
Derivatives	$	0	$	14,243	$	0	$	14,243

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
March 31, 2016
Assets
Loans held for sale	$	0	$	15,369	$	0
Impaired loans	0		0		8,784
OREO	0		0		7,051

	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2015
Assets
Loans held for sale	$	0	$	20,957	$	0
Impaired loans	0		0		8,008
OREO	0		0		7,598

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BUSINESS COMBINATIONS (Tables)

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Purchase price calculation as of the acquisition dates

The following table provides the purchase price calculation as of the acquisition date and the identifiable assets purchased and the liabilities assumed at their estimated fair value:

(Dollars in thousands)	Oak Street
Purchase consideration
Cash consideration	$	110,000
Payoff of long-term borrowings	197,839
Total purchase consideration	$	307,839
Assets acquired
Cash	$	2,248
Loans	237,377
Intangible assets	813
Other assets	2,633
Total assets	$	243,071
Liabilities assumed
Other liabilities	$	1,577
Total liabilities	$	1,577
Net identifiable assets	$	241,494
Goodwill	$	66,345

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INVESTMENTS INVESTMENTS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Gain (Loss) on Investments [Line Items]
Proceeds from sales of securities available-for-sale	$ 42,696	$ 25
Available-for-sale Securities, Gross Realized Gains	300	0
Available-for-sale Securities, Gross Realized Losses	$ 300	$ 0

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INVESTMENTS - Summary of Held-To-Maturity and Available-For-Sale Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investment Holdings [Line Items]
Total	$ 702,315	$ 726,259
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	16,468	7,911
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(506)	(2,219)
Held-to-Maturity Market Value	718,277	731,951
Total	1,165,093	1,203,065
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	11,194	6,078
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	(11,968)	(18,501)
Investment securities available-for-sale	1,164,319	1,190,642
U.S. Treasuries
Investment Holdings [Line Items]
Total	0	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	0	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Held-to-Maturity Market Value	0	0
Total	98	98
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	3	0
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	0	(1)
Investment securities available-for-sale	101	97
Securities of U.S. government agencies and corporations
Investment Holdings [Line Items]
Total	14,935	15,486
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	373	121
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Held-to-Maturity Market Value	15,308	15,607
Total	8,183	8,183
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	223	157
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	0	0
Investment securities available-for-sale	8,406	8,340
Mortgage-backed securities
Investment Holdings [Line Items]
Total	655,387	678,318
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	15,615	7,452
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(410)	(1,999)
Held-to-Maturity Market Value	670,592	683,771
Total	720,407	775,285
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	6,868	2,708
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	(4,493)	(12,926)
Investment securities available-for-sale	722,782	765,067
Obligations of state and other political subdivisions
Investment Holdings [Line Items]
Total	27,180	27,646
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	480	338
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(2)	(99)
Held-to-Maturity Market Value	27,658	27,885
Total	103,215	105,212
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	3,437	2,655
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	(443)	(730)
Investment securities available-for-sale	106,209	107,137
Asset-backed Securities [Member]
Investment Holdings [Line Items]
Total	0	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	0	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Held-to-Maturity Market Value	0	0
Total	258,731	236,411
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	31	35
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	(5,266)	(3,445)
Investment securities available-for-sale	253,496	233,001
Other securities
Investment Holdings [Line Items]
Total	4,813	4,809
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	0	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(94)	(121)
Held-to-Maturity Market Value	4,719	4,688
Total	74,459	77,876
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	632	523
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	(1,766)	(1,399)
Investment securities available-for-sale	$ 73,325	$ 77,000

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INVESTMENTS - Summary of Investment Securities by Estimated Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Held-to-Maturity Amortized Cost
Due in one year or less	$ 5,105
Due after one year through five years	563,324
Due after five years through ten years	133,886
Due after ten years	0
Total	702,315	$ 726,259
Held-to-Maturity Market Value
Due in one year or less	5,207
Due after one year through five years	574,597
Due after five years through ten years	138,473
Due after ten years	0
Held-to-Maturity Market Value	718,277	731,951
Available-for-Sale Amortized Cost
Due in one year or less	58,659
Due after one year through five years	775,602
Due after five years through ten years	303,552
Due after ten years	27,280
Total	1,165,093	1,203,065
Available-for-Sale Market Value
Due in one year or less	58,493
Due after one year through five years	774,467
Due after five years through ten years	304,623
Due after ten years	26,736
Available-for-Sale Market Value	$ 1,164,319	$ 1,190,642

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INVESTMENTS - Age of Gross Unrealized Losses and Associated Fair Value by Investment Category (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	$ 423,801	$ 726,559
Less than 12 Months Unrealized Loss	(6,692)	(9,062)
12 Months or More Fair Value	296,641	317,670
12 Months or More Unrealized Loss	(5,782)	(11,658)
Total Fair Value	720,442	1,044,229
Total Unrealized Loss	(12,474)	(20,720)
Securities of U.S. government agencies and corporations
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value		97
Less than 12 Months Unrealized Loss		0
12 Months or More Fair Value		0
12 Months or More Unrealized Loss		0
Total Fair Value		97
Total Unrealized Loss		0
Mortgage-backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	167,950	500,768
Less than 12 Months Unrealized Loss	(1,299)	(5,363)
12 Months or More Fair Value	235,099	246,523
12 Months or More Unrealized Loss	(3,604)	(9,563)
Total Fair Value	403,049	747,291
Total Unrealized Loss	(4,903)	(14,926)
Obligations of state and other political subdivisions
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	6,684	5,800
Less than 12 Months Unrealized Loss	(53)	(65)
12 Months or More Fair Value	20,758	29,287
12 Months or More Unrealized Loss	(392)	(764)
Total Fair Value	27,442	35,087
Total Unrealized Loss	(445)	(829)
Asset-backed Securities [Member]
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	215,166	189,066
Less than 12 Months Unrealized Loss	(4,217)	(3,042)
12 Months or More Fair Value	24,018	17,144
12 Months or More Unrealized Loss	(1,049)	(403)
Total Fair Value	239,184	206,210
Total Unrealized Loss	(5,266)	(3,445)
Other securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	34,001	30,828
Less than 12 Months Unrealized Loss	(1,123)	(592)
12 Months or More Fair Value	16,766	24,716
12 Months or More Unrealized Loss	(737)	(928)
Total Fair Value	50,767	55,544
Total Unrealized Loss	$ (1,860)	$ (1,520)

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LOANS AND LEASES - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchased impaired loans, carrying balance	$ 177,015,000		$ 191,626,000
Purchased impaired loans	196,200,000		213,300,000
Reclassification from/(to) non-accretable difference	318,000	$ (1,576,000)
Restructured Loans, Nonaccrual Status	7,500,000		9,300,000
Total loans	109,200,000		113,300,000
Write-downs	188,000	442,000
Gain (loss) on sale of other real estate owned	190,000	(474,000)
Real Estate Acquired Through Foreclosure	$ 11,939,000	20,906,000	$ 13,254,000	$ 22,674,000
Covered Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
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%
Real Estate Acquired Through Foreclosure	$ 38,000	300,000
Commercial | Non Covered Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum	250,000
Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Write-downs	71,000	$ 24,000
Residential | Non Covered Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum	$ 100,000

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LOANS AND LEASES LOANS AND LEASES - Carrying Amount of Accretable Yield for Purchased Impaired and Nonimpaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Receivables [Abstract]
Balance at beginning of period	$ 64,857	$ 106,622
Reclassification from/(to) non-accretable difference	318	(1,576)
Accretion	(4,210)	(6,357)
Other net activity	(2,241)	(6,701)
Balance at end of period	$ 58,724	$ 91,988

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LOANS AND LEASES - Commercial and Consumer Credit Exposure by Risk Attribute (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Commercial	$ 1,744,732	$ 1,663,102
Real Estate - Construction	341,453	311,712
Real Estate - Commercial	2,261,857	2,258,297
Lease financing	101,135	93,986
Total Commercial	4,449,177	4,327,097
Real Estate Residential	508,512	512,311
Home equity	466,010	466,629
Loans and Leases Receivable, Gross, Consumer, Installment, Durable Goods	41,627	41,506
Other	39,283	41,217
Total	1,055,432	1,061,663
Pass
Financing Receivable, Recorded Investment [Line Items]
Commercial	1,680,764	1,596,415
Real Estate - Construction	337,472	310,806
Real Estate - Commercial	2,182,683	2,179,701
Lease financing	99,583	93,236
Total Commercial	4,300,502	4,180,158
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Commercial	22,155	27,498
Real Estate - Construction	3,417	128
Real Estate - Commercial	19,754	19,903
Lease financing	0	0
Total Commercial	45,326	47,529
Substandard
Financing Receivable, Recorded Investment [Line Items]
Commercial	41,813	39,189
Real Estate - Construction	564	778
Real Estate - Commercial	59,420	58,693
Lease financing	1,552	750
Total Commercial	103,349	99,410
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Commercial	0	0
Real Estate - Construction	0	0
Real Estate - Commercial	0	0
Lease financing	0	0
Total Commercial	0	0
Performing
Financing Receivable, Recorded Investment [Line Items]
Real Estate Residential	499,849	503,317
Home equity	460,341	461,188
Loans and Leases Receivable, Gross, Consumer, Installment, Durable Goods	41,408	41,253
Other	39,283	41,217
Total	1,040,881	1,046,975
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Real Estate Residential	8,663	8,994
Home equity	5,669	5,441
Loans and Leases Receivable, Gross, Consumer, Installment, Durable Goods	219	253
Other	0	0
Total	$ 14,551	$ 14,688

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LOANS AND LEASES - Loan Delinquency, including Nonaccrual Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	$ 29,573	$ 26,559
Current	5,298,021	5,170,575
Loans and Leases Receivable, Gross	5,327,594	5,197,134
Purchased impaired loans	177,015	191,626
Total loans and leases	5,504,609	5,388,760
> 90 days past due and still accruing	59	108
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	14,005	7,789
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	732	4,062
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	14,836	14,708
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	7,698	6,424
Current	1,729,886	1,648,902
Loans and Leases Receivable, Gross	1,737,584	1,655,326
Purchased impaired loans	7,148	7,776
Total loans and leases	1,744,732	1,663,102
> 90 days past due and still accruing	0	0
Commercial | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	4,354	2,255
Commercial | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	310	2,232
Commercial | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	3,034	1,937
Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	5,002	17
Current	335,689	310,872
Loans and Leases Receivable, Gross	340,691	310,889
Purchased impaired loans	762	823
Total loans and leases	341,453	311,712
> 90 days past due and still accruing	0	0
Real estate - construction | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	5,002	0
Real estate - construction | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	17
Real estate - construction | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Real estate - commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	9,349	10,835
Current	2,141,626	2,124,290
Loans and Leases Receivable, Gross	2,150,975	2,135,125
Purchased impaired loans	110,882	123,172
Total loans and leases	2,261,857	2,258,297
> 90 days past due and still accruing	0	0
Real estate - commercial | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	2,718	2,501
Real estate - commercial | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	913
Real estate - commercial | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	6,631	7,421
Real estate - residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	2,878	3,701
Current	450,582	451,907
Loans and Leases Receivable, Gross	453,460	455,608
Purchased impaired loans	55,052	56,703
Total loans and leases	508,512	512,311
> 90 days past due and still accruing	0	0
Real estate - residential | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	858	1,220
Real estate - residential | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	239
Real estate - residential | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	2,020	2,242
Installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	213	356
Current	39,713	39,206
Loans and Leases Receivable, Gross	39,926	39,562
Purchased impaired loans	1,701	1,944
Total loans and leases	41,627	41,506
> 90 days past due and still accruing	0	0
Installment | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	133	197
Installment | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	13	111
Installment | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	67	48
Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	3,611	3,774
Current	460,929	461,647
Loans and Leases Receivable, Gross	464,540	465,421
Purchased impaired loans	1,470	1,208
Total loans and leases	466,010	466,629
> 90 days past due and still accruing	0	0
Home equity | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	505	696
Home equity | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	81	248
Home equity | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	3,025	2,830
Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	822	1,452
Current	139,596	133,751
Loans and Leases Receivable, Gross	140,418	135,203
Purchased impaired loans	0	0
Total loans and leases	140,418	135,203
> 90 days past due and still accruing	59	108
Other | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	435	920
Other | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	328	302
Other | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	$ 59	$ 230

XML

LOANS AND LEASES - Restructured Loans (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2016 USD ($) loans d	Mar. 31, 2015 USD ($) loans	Dec. 31, 2015 USD ($) loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reclassification from/(to) non-accretable difference	$ 318,000	$ (1,576,000)
Extended Maturities	486,000	9,481,000
Adjusted Interest Rates	0	0
Combined Rate And Maturity	162,000	62,000
Forebearance Agreements	0	0
Other	1,883,000	159,000
Total	$ 2,531,000	$ 9,702,000
Restructured loans, Number of Loans | loans	17	14
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 2,562,000	$ 13,274,000
Restructured loans, Period End Balance	$ 2,531,000	$ 9,702,000
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	4	4
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 301,000	$ 1,040,000
Number of Restructured Loans | loans	271		271
Total restructured loans	$ 37,700,000		$ 38,200,000
Restructured loans on accrual status	30,127,000		28,876,000
Restructured Loans, Nonaccrual Status	7,500,000		9,300,000
Loans and Leases Receivable, Impaired, Commitment to Lend	400,000		1,800,000
Allowance for loan and lease losses lncluded in reserves for restructured loans	2,400,000		6,300,000
Restructured loans uncollectible portion written off	200,000	$ 0	2,700,000
Accruing TDRs performing in accordance with restructured terms for more than one year	$ 10,200,000		$ 10,300,000
Restructured loans performance threshold (days) | d	90
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	8	8
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 2,083,000	$ 360,000
Restructured loans, Period End Balance	$ 2,095,000	$ 359,000
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	1	0
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 55,000	$ 0
Real estate - construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	0	0
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 0	$ 0
Restructured loans, Period End Balance	$ 0	$ 0
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	0	0
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 0	$ 0
Real estate - commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	1	6
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 42,000	$ 12,914,000
Restructured loans, Period End Balance	$ 42,000	$ 9,343,000
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	0	3
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 0	$ 967,000
Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	2	0
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 281,000	$ 0
Restructured loans, Period End Balance	$ 247,000	$ 0
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	1	1
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 214,000	$ 73,000
Installment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	2	0
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 7,000	$ 0
Restructured loans, Period End Balance	$ 7,000	$ 0
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	1	0
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 4,000	$ 0
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	4	0
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 149,000	$ 0
Restructured loans, Period End Balance	$ 140,000	$ 0
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	1	0
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 28,000	$ 0
Non Covered Loans | Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum	$ 100,000

XML

LOANS AND LEASES - Nonaccrual, Restructured and Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	$ 22,007		$ 27,997
Accruing trouble debt restructurings	30,127		28,876
Total impaired loans	52,134		56,873
Restructured loans - nonaccrual status	7,500		9,300
Interest income effect
Gross amount of interest that would have been recorded under original terms	754	$ 967
Interest included in income
Nonaccrual loans	76	171
Troubled debt restructurings	232	132
Total interest included in income	308	303	1,157
Net impact on interest income	446	$ 664
Commercial
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	3,917		8,405
Total impaired loans	14,485		17,411
Interest included in income
Total interest included in income	83		284
Real estate - construction
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	0		0
Total impaired loans	0		0
Interest included in income
Total interest included in income	0		0
Real estate - commercial
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	8,577		9,418
Total impaired loans	22,977		24,652
Interest included in income
Total interest included in income	147		557
Real estate - residential
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	4,243		5,027
Total impaired loans	8,663		8,994
Interest included in income
Total interest included in income	55		224
Installment
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	113		127
Total impaired loans	219		253
Interest included in income
Total interest included in income	1		7
Home equity
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	5,036		4,898
Total impaired loans	5,669		5,441
Interest included in income
Total interest included in income	22		85
Other
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	121		122
Total impaired loans	121		122
Interest included in income
Total interest included in income	$ 0		$ 0

XML

LOANS AND LEASES - Investment in Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Current balance	$ 52,134		$ 56,873
Contractual Principal Balance	61,350		66,066
Related Allowance	1,401		1,573
Average current balance	54,506		60,310
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	212		875
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	96		282
Interest income recognized	308	$ 303	1,157
Commercial
Financing Receivable, Impaired [Line Items]
Current balance	14,485		17,411
Contractual Principal Balance	15,605		18,576
Related Allowance	400		357
Average current balance	15,948		11,877
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	74		258
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	9		26
Interest income recognized	83		284
Real estate - construction
Financing Receivable, Impaired [Line Items]
Current balance	0		0
Contractual Principal Balance	0		0
Related Allowance	0		0
Average current balance	0		150
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	0		0
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0		0
Interest income recognized	0		0
Real estate - commercial
Financing Receivable, Impaired [Line Items]
Current balance	22,977		24,652
Contractual Principal Balance	27,681		29,185
Related Allowance	763		979
Average current balance	23,815		32,291
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	70		344
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	77		213
Interest income recognized	147		557
Real estate - residential
Financing Receivable, Impaired [Line Items]
Current balance	8,663		8,994
Contractual Principal Balance	9,934		10,367
Related Allowance	236		235
Average current balance	8,829		9,839
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	46		184
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	9		40
Interest income recognized	55		224
Home equity
Financing Receivable, Impaired [Line Items]
Current balance	5,669		5,441
Contractual Principal Balance	7,773		7,540
Related Allowance	2		2
Average current balance	5,556		5,749
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	21		82
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	1		3
Interest income recognized	22		85
Installment
Financing Receivable, Impaired [Line Items]
Current balance	219		253
Contractual Principal Balance	236		276
Related Allowance	0		0
Average current balance	236		380
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	1		7
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0		0
Interest income recognized	1		7
Other
Financing Receivable, Impaired [Line Items]
Current balance	121		122
Contractual Principal Balance	121		122
Related Allowance	0		0
Average current balance	122		24
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	0		0
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0		0
Interest income recognized	0		0
Loans with no related allowance recorded [member]
Financing Receivable, Impaired [Line Items]
Current balance	40,550		45,881
Contractual Principal Balance	49,562		54,521
Related Allowance	0		0
Average current balance	43,217		44,176
Loans with no related allowance recorded [member] | Commercial
Financing Receivable, Impaired [Line Items]
Current balance	13,512		16,418
Contractual Principal Balance	14,442		17,398
Related Allowance	0		0
Average current balance	14,965		10,468
Loans with no related allowance recorded [member] | Real estate - construction
Financing Receivable, Impaired [Line Items]
Current balance	0		0
Contractual Principal Balance	0		0
Related Allowance	0		0
Average current balance	0		150
Loans with no related allowance recorded [member] | Real estate - commercial
Financing Receivable, Impaired [Line Items]
Current balance	14,003		16,301
Contractual Principal Balance	18,707		20,479
Related Allowance	0		0
Average current balance	15,152		19,363
Loans with no related allowance recorded [member] | Real estate - residential
Financing Receivable, Impaired [Line Items]
Current balance	7,126		7,447
Contractual Principal Balance	8,383		8,807
Related Allowance	0		0
Average current balance	7,287		8,143
Loans with no related allowance recorded [member] | Home equity
Financing Receivable, Impaired [Line Items]
Current balance	5,569		5,340
Contractual Principal Balance	7,673		7,439
Related Allowance	0		0
Average current balance	5,455		5,648
Loans with no related allowance recorded [member] | Installment
Financing Receivable, Impaired [Line Items]
Current balance	219		253
Contractual Principal Balance	236		276
Related Allowance	0		0
Average current balance	236		380
Loans with no related allowance recorded [member] | Other
Financing Receivable, Impaired [Line Items]
Current balance	121		122
Contractual Principal Balance	121		122
Related Allowance	0		0
Average current balance	122		24
Impaired Financing Receivables With Related Allowance [Member]
Financing Receivable, Impaired [Line Items]
Current balance	11,584		10,992
Contractual Principal Balance	11,788		11,545
Related Allowance	1,401		1,573
Average current balance	11,289		16,134
Impaired Financing Receivables With Related Allowance [Member] | Commercial
Financing Receivable, Impaired [Line Items]
Current balance	973		993
Contractual Principal Balance	1,163		1,178
Related Allowance	400		357
Average current balance	983		1,409
Impaired Financing Receivables With Related Allowance [Member] | Real estate - construction
Financing Receivable, Impaired [Line Items]
Current balance	0		0
Contractual Principal Balance	0		0
Related Allowance	0		0
Average current balance	0		0
Impaired Financing Receivables With Related Allowance [Member] | Real estate - commercial
Financing Receivable, Impaired [Line Items]
Current balance	8,974		8,351
Contractual Principal Balance	8,974		8,706
Related Allowance	763		979
Average current balance	8,663		12,928
Impaired Financing Receivables With Related Allowance [Member] | Real estate - residential
Financing Receivable, Impaired [Line Items]
Current balance	1,537		1,547
Contractual Principal Balance	1,551		1,560
Related Allowance	236		235
Average current balance	1,542		1,696
Impaired Financing Receivables With Related Allowance [Member] | Home equity
Financing Receivable, Impaired [Line Items]
Current balance	100		101
Contractual Principal Balance	100		101
Related Allowance	2		2
Average current balance	101		101
Impaired Financing Receivables With Related Allowance [Member] | Installment
Financing Receivable, Impaired [Line Items]
Current balance	0		0
Contractual Principal Balance	0		0
Related Allowance	0		0
Average current balance	0		0
Impaired Financing Receivables With Related Allowance [Member] | Other
Financing Receivable, Impaired [Line Items]
Current balance	0		0
Contractual Principal Balance	0		0
Related Allowance	0		0
Average current balance	$ 0		$ 0

XML

LOANS AND LEASES - Changes in Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	$ 13,254	$ 22,674
Additions	908	3,231
Disposals	(2,035)	(4,557)
Write-downs	188	442
Balance at end of period	11,939	20,906
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Additions	786	2,173
Disposals	(200)	(4,145)
Write-downs	117	418
Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Additions	122	1,058
Disposals	(1,835)	(412)
Write-downs	$ 71	$ 24

XML

LOANS AND LEASES LOANS AND LEASES - Indemnification Asset Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Receivables [Abstract]
Balance at beginning of period	$ 17,630	$ 22,666
Net FDIC claims received / paid	362	204
Amortization	(1,171)	(1,195)
FDIC loss sharing income	(565)	(1,046)
Offset to accelerated discount	0	(232)
Balance at end of period	$ 16,256	$ 20,397

XML

ALLOWANCE FOR LOAN AND LEASE LOSSES - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Net charge-offs	$ 800	$ (500)
Provision for loan and lease losses	(100)	$ (283)
Allowance for covered loan losses	$ 9,400		$ 10,300

XML

ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in the Allowance for Loan and Lease Losses for the Current and Comparable Quarter and Year-to-Date (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Receivables [Abstract]
Balance at beginning of period	$ 53,398	$ 52,858
Provision for loan and lease losses	1,655	2,060
Loans charged off	(2,442)	(5,044)
Recoveries	1,121	3,202
Balance at end of period	53,732	53,076
Provision for loan and lease losses covered	(100)	(283)
Balance at beginning of period	53,398
Provision for Loan and Lease Losses	1,655	$ 2,060
Balance at end of period	$ 53,732

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ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in the Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Allowance for loan and lease losses:
Balance at beginning of period	$ 53,398	$ 52,858
Provision for loan and lease losses	1,655	2,060
Gross charge-offs	2,442	5,044
Recoveries	1,121	3,202
Total net charge-offs	1,321	1,842
Balance at end of period	53,732	53,076
Ending allowance on loans individually evaluated for impairment	1,401		$ 1,573
Ending allowance on loans collectively evaluated for impairment	52,331		51,825
Loans and Leases:
Ending balance of loans individually evaluated for impairment	52,134		56,873
Ending balance of loans collectively evaluated for impairment	5,452,475		5,331,887
Loans and Leases Receivable, Net of Deferred Income	5,504,609		5,388,760
Non Covered Loans
Allowance for loan and lease losses:
Balance at beginning of period		52,858
Commercial
Allowance for loan and lease losses:
Balance at beginning of period	16,995	13,870
Provision for loan and lease losses	1,432	1,059
Gross charge-offs	479	1,568
Recoveries	222	2,183
Total net charge-offs	257	(615)
Balance at end of period	18,170	15,544
Ending allowance on loans individually evaluated for impairment	400		357
Ending allowance on loans collectively evaluated for impairment	17,770		16,638
Loans and Leases:
Ending balance of loans individually evaluated for impairment	14,485		17,411
Ending balance of loans collectively evaluated for impairment	1,730,247		1,645,691
Loans and Leases Receivable, Net of Deferred Income	1,744,732		1,663,102
Real estate - construction
Allowance for loan and lease losses:
Balance at beginning of period	1,810	1,045
Provision for loan and lease losses	439	147
Gross charge-offs	3	0
Recoveries	26	45
Total net charge-offs	(23)	(45)
Balance at end of period	2,272	1,237
Ending allowance on loans individually evaluated for impairment	0		0
Ending allowance on loans collectively evaluated for impairment	2,272		1,810
Loans and Leases:
Ending balance of loans individually evaluated for impairment	0		0
Ending balance of loans collectively evaluated for impairment	341,453		311,712
Loans and Leases Receivable, Net of Deferred Income	341,453		311,712
Real estate - commercial
Allowance for loan and lease losses:
Balance at beginning of period	23,656	27,086
Provision for loan and lease losses	(420)	112
Gross charge-offs	1,262	1,870
Recoveries	442	491
Total net charge-offs	820	1,379
Balance at end of period	22,416	25,819
Ending allowance on loans individually evaluated for impairment	763		979
Ending allowance on loans collectively evaluated for impairment	21,653		22,677
Loans and Leases:
Ending balance of loans individually evaluated for impairment	22,977		24,652
Ending balance of loans collectively evaluated for impairment	2,238,880		2,233,645
Loans and Leases Receivable, Net of Deferred Income	2,261,857		2,258,297
Real estate - residential
Allowance for loan and lease losses:
Balance at beginning of period	4,014	3,753
Provision for loan and lease losses	8	70
Gross charge-offs	45	404
Recoveries	63	64
Total net charge-offs	(18)	340
Balance at end of period	4,040	3,483
Ending allowance on loans individually evaluated for impairment	236		235
Ending allowance on loans collectively evaluated for impairment	3,804		3,779
Loans and Leases:
Ending balance of loans individually evaluated for impairment	8,663		8,994
Ending balance of loans collectively evaluated for impairment	499,849		503,317
Loans and Leases Receivable, Net of Deferred Income	508,512		512,311
Installment
Allowance for loan and lease losses:
Balance at beginning of period	386	407
Provision for loan and lease losses	(58)	61
Gross charge-offs	73	167
Recoveries	99	86
Total net charge-offs	(26)	81
Balance at end of period	354	387
Ending allowance on loans individually evaluated for impairment	0		0
Ending allowance on loans collectively evaluated for impairment	354		386
Loans and Leases:
Ending balance of loans individually evaluated for impairment	219		253
Ending balance of loans collectively evaluated for impairment	41,408		41,253
Loans and Leases Receivable, Net of Deferred Income	41,627		41,506
Home equity
Allowance for loan and lease losses:
Balance at beginning of period	3,943	4,260
Provision for loan and lease losses	185	472
Gross charge-offs	340	741
Recoveries	188	288
Total net charge-offs	152	453
Balance at end of period	3,976	4,279
Ending allowance on loans individually evaluated for impairment	2		2
Ending allowance on loans collectively evaluated for impairment	3,974		3,941
Loans and Leases:
Ending balance of loans individually evaluated for impairment	5,669		5,441
Ending balance of loans collectively evaluated for impairment	460,341		461,188
Loans and Leases Receivable, Net of Deferred Income	466,010		466,629
All other
Allowance for loan and lease losses:
Balance at beginning of period	2,594	2,437
Provision for loan and lease losses	69	139
Gross charge-offs	240	294
Recoveries	81	45
Total net charge-offs	159	249
Balance at end of period	2,504	$ 2,327
Ending allowance on loans individually evaluated for impairment	0		0
Ending allowance on loans collectively evaluated for impairment	2,504		2,594
Loans and Leases:
Ending balance of loans individually evaluated for impairment	121		122
Ending balance of loans collectively evaluated for impairment	140,297		135,081
Loans and Leases Receivable, Net of Deferred Income	$ 140,418		$ 135,203

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS-Schedule of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Goodwill [Roll Forward]
Balance at beginning of year	$ 204,084	$ 137,739
Goodwill	0	66,345
Balance at end of period	$ 204,084	$ 204,084

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GOODWILL AND OTHER INTANGIBLE ASSETS--Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Net (Excluding Goodwill)	$ 7,500		$ 7,800
Finite-Lived Core Deposits, Gross	5,600		$ 5,900
Finite-Lived Intangible Assets, Amortization Expense	$ 400	$ 400
Core Deposits [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets amortization method	accelerated basis
Estimated weighted average life (in years)	5 years 5 months

XML

BORROWINGS Borrowings - - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Federal Home Loan Bank short-term borrowings	$ 894,400	$ 849,100
Line of Credit Facility, Maximum Borrowing Capacity	15,000
Commitments outstanding to extend credit	0	$ 0
Subordinated debt	$ 120,000
Subordinated Borrowing, Interest Rate	5.125%

XML

BORROWINGS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Amount
Subordinated debt	$ 118,332	$ 118,312
FHLB long-term advances	449	453
Capital loan with municipality	775	775
Total long-term debt	$ 119,556	$ 119,540
Average Rate [Abstract]
Debt, Weighted Average Interest Rate	5.20%	5.20%
Federal Home Loan Bank	2.39%	2.37%
Weighted average rate on other long-term debt	0.00%	0.00%
Total long-term debt	5.15%	5.15%

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Other Comprehensive Income (Loss), before Reclassification Adjustments and Tax [Abstract]
Unrealized gain (loss) on investment securities	$ 10,975	$ 7,808
Unrealized gain (loss) on derivatives	202	(1,293)
Retirement obligation	0	0
Foreign Currency Translation		(20)
Total	11,177	6,495
Other Comprehensive Income (Loss) Reclassifications before Tax [Abstract]
Unrealized gain (loss) on investment securities	24	0
Unrealized gain (loss) on derivatives	0	0
Retirement obligation	(317)	(350)
Foreign Currency Translation		0
Total	(293)	(350)
Transactions Pre-tax
Unrealized gain (loss) on investment securities	10,951	7,808
Unrealized gain (loss) on derivatives	202	(1,293)
Unfunded pension obligation	317	350
Foreign currency translation		(20)
Total	11,470	6,845
Transactions Tax-effect
Unrealized gain (loss) on investment securities	(3,908)	(2,800)
Unrealized gain (loss) on derivatives	(74)	477
Retirement obligation	(117)	(167)
Foreign currency translation		0
Total	(4,099)	(2,490)
Transactions Net of tax
Unrealized gain (loss) on investment securities	7,043	5,008
Unrealized gain (loss) on derivatives	128	(816)
Retirement obligation	200	183
Foreign currency translation	0	(20)
Total	7,371	4,355
Balances Net of tax
Unrealized gain (loss) on investment securities	2,110	2,502	$ (4,933)	$ (2,506)
Unrealized gain (loss) on cash flow hedges	(1,471)	(1,765)	(1,599)	(949)
Retirement obligation	(23,848)	(17,721)	(24,048)	(17,904)
Foreign currency translation		(70)		(50)
Total	$ (23,209)	$ (17,054)	$ (30,580)	$ (21,409)

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ACCUMULATED OTHER COMPREHENSIVE INCOME AMOUNT RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Other Accumulated Comprehensive income reclassified from AOCI [Line Items]
Net gains on sales of investment securities	$ 24	$ 0
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	103	100
Defined Benefit Plan, Amortization of Gains (Losses)	(420)	(450)
Other Comprehensive Income, Reclassification, Amortization of Defined Benefit Plans items, Pre-tax	(317)	(350)
Total	(293)	(350)
Deposits [Member] | Cash Flow Hedging [Member] | Interest Expense | Interest Rate Contracts
Other Accumulated Comprehensive income reclassified from AOCI [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ 0	$ 0

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DERIVATIVES - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) entity	Dec. 31, 2015 USD ($) entity
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
Inerest-bearing deposit liability	$ 1,185,013	$ 1,098,132
Number of counterparties | entity	10	9
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	$ 24,853	$ 14,179
Credit Risk Contract [Member]
Derivative [Line Items]
Inerest-bearing deposit liability	36,800	33,600
Outstanding liability from counterparty contracts	100	100
Interest Rate Lock Commitments [Member]
Derivative [Line Items]
Inerest-bearing deposit liability	30,800	18,500
Other Credit Derivatives [Member]
Derivative [Line Items]
Inerest-bearing deposit liability	33,100	25,100
Outstanding liability from counterparty contracts	300	100
Accrued interest and other liabilities | Derivative [Member]
Derivative [Line Items]
Inerest-bearing deposit liability	594,400	551,700
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	$ 24,300	$ 13,400

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DERIVATIVES - Summary of Derivative Financial Instruments and Balances (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Inerest-bearing deposit liability	$ 1,185,013	$ 1,098,132
Estimate Fair Value Gain	24,740	14,025
Estimate Fair Value Loss	(24,853)	(14,179)
Fair Value Hedges | Pay fixed interest rate swaps with counterparty | Accrued interest and other liabilities
Derivatives, Fair Value [Line Items]
Inerest-bearing deposit liability	3,733	5,216
Estimate Fair Value Gain	0	0
Estimate Fair Value Loss	(83)	(120)
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other liabilities
Derivatives, Fair Value [Line Items]
Inerest-bearing deposit liability	590,640	546,458
Estimate Fair Value Gain	0	44
Estimate Fair Value Loss	(24,770)	(14,015)
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other assets
Derivatives, Fair Value [Line Items]
Inerest-bearing deposit liability	590,640	546,458
Estimate Fair Value Gain	24,740	13,981
Estimate Fair Value Loss	$ 0	$ (44)

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DERIVATIVES DERIVATIVES - Disclosure by Type of Financial Instrument (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Gross amounts of recognized liabilities	$ 24,853	$ 14,135
Derivative Liability, Fair Value, Gross Asset	(24,140)	(16,710)
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	713
Derivative Asset, Fair Value, Amount Not Offset Against Collateral		2,575
Fair Value Hedges | Pay fixed interest rate swaps with counterparty | Accrued interest and other liabilities
Derivatives, Fair Value [Line Items]
Gross amounts of recognized liabilities	83	120
Derivative Liability, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	83
Derivative Asset, Fair Value, Amount Not Offset Against Collateral		(120)
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other liabilities
Derivatives, Fair Value [Line Items]
Gross amounts of recognized liabilities	24,770	14,015
Derivative Liability, Fair Value, Gross Asset	(24,140)	(16,710)
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	$ 630
Derivative Asset, Fair Value, Amount Not Offset Against Collateral		$ 2,695

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DERIVATIVES - Derivative Financial Instruments, Average Remaining Maturity and the Weighted-Average Interest Rates being Paid and Received (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Derivative [Line Items]
Notional Value	$ 1,185,013	$ 1,098,132
Interest Rate Swap
Derivative [Line Items]
Notional Value	$ 1,185,013
Average Maturity (years)	5 years 2 months
Fair Value	$ (113)
Weighted-Average Rate Receive	3.46%
Weighted-Average Rate Pay	3.50%
Interest Rate Swap | Pay fixed interest rate swaps with counterparty
Derivative [Line Items]
Notional Value	$ 3,733
Average Maturity (years)	1 year 7 months
Fair Value	$ (83)
Weighted-Average Rate Receive	2.55%
Weighted-Average Rate Pay	7.19%
Interest Rate Swap | Matched interest rate swaps | Derivative Financial Instruments Receive Fixed Pay Variable
Derivative [Line Items]
Notional Value	$ 590,640
Average Maturity (years)	5 years 3 months
Fair Value	$ 24,415
Weighted-Average Rate Receive	4.30%
Weighted-Average Rate Pay	2.63%
Interest Rate Swap | Matched interest rate swaps | Derivative Financial Instruments Receive Variable Pay Fixed
Derivative [Line Items]
Notional Value	$ 590,640
Average Maturity (years)	5 years 3 months
Fair Value	$ (24,445)
Weighted-Average Rate Receive	2.63%
Weighted-Average Rate Pay	4.30%

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Commitments and Contingencies Disclosure [Line Items]
Commitments outstanding to extend credit	$ 0		$ 0
Letters of credit issued to guarantee performance of a client to a third party	16,000		16,300
Affordable Housing Program Obligation	30,300		31,500
Affordable housing contingent commitment	0		0
Low-income housing tax credit	700	$ 400
Estimated Litigation Liability	800		$ 1,300
Commitments to Extend Credit
Commitments and Contingencies Disclosure [Line Items]
Commitments outstanding to extend credit	$ 2,100,000

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax expense	$ 9,878	$ 8,450
Effective tax rate	33.30%	32.40%

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EMPLOYEE BENEFIT PLANS - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year	$ 0
Pension Contributions	0		$ 0
Pension Expense	$ (225,000)	$ (300,000)

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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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Compensation and Retirement Disclosure [Abstract]
Service cost	$ 1,308	$ 1,175
Interest cost	581	550
Expected return on plan assets	(2,431)	(2,375)
Amortization of prior service cost	(103)	(100)
Defined Benefit Plan, Amortization of Gains (Losses)	420	450
Net periodic benefit cost (income)	$ (225)	$ (300)

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EARNINGS PER COMMON SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator for basic and diluted earnings per share -income available to common shareholders:
Net income	$ 19,814	$ 17,621
Denominator for basic earnings per share - weighted average shares	61,036,797	61,013,489
Effect of dilutive securities -
Employee stock awards	705,779	567,806
Warrants	97,671	150,549
Denominator for diluted earnings per share - adjusted weighted average shares	61,840,247	61,731,844
Basic	$ 0.32	$ 0.29
Diluted	$ 0.32	$ 0.29

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EARNINGS PER COMMON SHARE - Additional Information (Details) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share Disclosure [Line Items]
Investment Warrants, Exercise Price	$ 12.12
Antidilutive Warrants
Earnings Per Share Disclosure [Line Items]
Stock options and warrants with an exercise price greater than the average market price of the common shares not included in the computation of net income per diluted share	322,312	465,117
Antidilutive Stock Options
Earnings Per Share Disclosure [Line Items]
Stock options and warrants with an exercise price greater than the average market price of the common shares not included in the computation of net income per diluted share	0	20,626

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FAIR VALUE DISCLOSURES - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	$ 24,853	$ 14,179
Financial assets
Investment securities held-to-maturity	702,315	726,259
Other investments	53,255	53,725
FDIC indemnification asset	16,256	17,630	$ 20,397	$ 22,666
Deposits
Noninterest-bearing	1,408,609	1,413,404
Savings	1,922,892	1,945,805
Time	1,414,313	1,406,124
Carrying value
Financial assets
Cash and short-term investments	118,257	148,575
Investment securities held-to-maturity	702,315	726,259
Other investments	53,255	53,725
Loans held for sale	15,369	20,957
Loans and leases, net of ALLL	5,450,877	5,335,362
FDIC indemnification asset	16,256	17,630
Interest Receivable	18,959	16,995
Deposits
Noninterest-bearing	1,408,609	1,413,404
Interest-bearing demand	1,430,963	1,414,291
Savings	1,922,892	1,945,805
Time	1,414,313	1,406,124
Total deposits	6,176,777	6,179,624
Short-term borrowings	969,899	938,425
Long-term debt	119,556	119,540
Interest Payable	3,650	5,003
Fair value
Financial assets
Cash and short-term investments	118,257	148,575
Investment securities held-to-maturity	718,277	731,951
Loans held for sale	15,369	20,957
Loans and leases, net of ALLL	5,488,942	5,381,065
FDIC indemnification asset	9,077	9,756
Interest Receivable	18,959	16,995
Deposits
Noninterest-bearing	1,408,609	1,413,404
Interest-bearing demand	1,430,963	1,414,291
Savings	1,922,892	1,945,805
Time	1,418,613	1,406,489
Total deposits	6,181,077	6,179,989
Short-term borrowings	969,899	938,425
Long-term debt	123,034	118,691
Interest Payable	3,650	5,003
Fair Value, Inputs, Level 1 [Member] | Fair value
Financial assets
Cash and short-term investments	118,257	148,575
Investment securities held-to-maturity	0	0
Loans held for sale	0	0
Loans and leases, net of ALLL	0	0
FDIC indemnification asset	0	0
Interest Receivable	0	0
Deposits
Noninterest-bearing	0	0
Interest-bearing demand	0	0
Savings	0	0
Time	0	0
Total deposits	0	0
Short-term borrowings	969,899	938,425
Long-term debt	0	0
Interest Payable	503	113
Fair Value, Inputs, Level 2 [Member] | Fair value
Financial assets
Cash and short-term investments	0	0
Investment securities held-to-maturity	718,277	731,951
Loans held for sale	15,369	20,957
Loans and leases, net of ALLL	0	0
FDIC indemnification asset	0	0
Interest Receivable	6,001	5,791
Deposits
Noninterest-bearing	1,408,609	1,413,404
Interest-bearing demand	1,430,963	1,414,291
Savings	1,922,892	1,945,805
Time	1,418,613	1,406,489
Total deposits	6,181,077	6,179,989
Short-term borrowings	0	0
Long-term debt	123,034	118,691
Interest Payable	3,147	4,890
Fair Value, Inputs, Level 3 [Member] | Fair value
Financial assets
Cash and short-term investments	0	0
Investment securities held-to-maturity	0	0
Loans held for sale	0	0
Loans and leases, net of ALLL	5,488,942	5,381,065
FDIC indemnification asset	9,077	9,756
Interest Receivable	12,958	11,204
Deposits
Noninterest-bearing	0	0
Interest-bearing demand	0	0
Savings	0	0
Time	0	0
Total deposits	0	0
Short-term borrowings	0	0
Long-term debt	0	0
Interest Payable	$ 0	$ 0

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FAIR VALUE DISCLOSURES - Summary of Financial Assets and Liabilities Measure at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets
Derivatives	$ 24,740	$ 14,025
Investment securities available-for-sale	1,164,319	1,190,642
Liabilities
Derivatives	24,853	14,179
Fair Value, Measurements, Recurring
Assets
Derivatives	25,028	14,111
Investment securities available-for-sale	1,164,319	1,190,642
Total	1,189,347	1,204,753
Liabilities
Derivatives	24,952	14,243
Fair Value, Measurements, Recurring | Fair Value Measurements Using Level 1
Assets
Derivatives	0	0
Investment securities available-for-sale	8,789	8,583
Total	8,789	8,583
Liabilities
Derivatives	0	0
Fair Value, Measurements, Recurring | Fair Value Measurements Using Level 2
Assets
Derivatives	25,028	14,111
Investment securities available-for-sale	1,155,530	1,182,059
Total	1,180,558	1,196,170
Liabilities
Derivatives	24,952	14,243
Fair Value, Measurements, Recurring | Fair Value Measurements Using Level 3
Assets
Derivatives	0	0
Investment securities available-for-sale	0	0
Total	0	0
Liabilities
Derivatives	$ 0	$ 0

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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	Mar. 31, 2016	Dec. 31, 2015
Fair Value Measurements Using Level 1
Assets
Loans Held-for-sale, Fair Value Disclosure	$ 0	$ 0
Impaired loans	0	0
Other Real Estate Owned, Fair Value Disclosure	0	0
Fair Value Measurements Using Level 2
Assets
Loans Held-for-sale, Fair Value Disclosure	15,369	20,957
Impaired loans	0	0
Other Real Estate Owned, Fair Value Disclosure	0	0
Fair Value Measurements Using Level 3
Assets
Loans Held-for-sale, Fair Value Disclosure	0	0
Impaired loans	8,784	8,008
Other Real Estate Owned, Fair Value Disclosure	$ 7,051	$ 7,598

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BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Aug. 14, 2015
Business Acquisition [Line Items]
Goodwill	$ 0	$ 66,345
Oak Street Holdings Corporation [Domain]
Business Acquisition [Line Items]
Cash consideration		110,000
Payoff of long-term borrowings		197,839
Total purchase consideration		307,839
Cash			$ 2,248
Loans			237,377
Intangible assets			813
Other assets			2,633
Total assets			243,071
Other liabilities			1,577
Total liabilities			1,577
Net identifiable assets			$ 241,494
Goodwill		$ 66,345