FIRST FINANCIAL BANCORP. |
(Exact name of registrant as specified in its charter) |
Ohio | 31-1042001 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
255 East Fifth Street, Suite 700 Cincinnati, Ohio | 45202 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company o |
Emerging growth company o |
Class | Outstanding at 5/4/2018 | |
Common stock, No par value | 97,810,841 |
Page No. | |
the Act | Private Securities Litigation Reform Act | FASB | Financial Accounting Standards Board | |
ALLL | Allowance for loan and lease losses | FDIC | Federal Deposit Insurance Corporation | |
AOCI | Accumulated other comprehensive income | FHLB | Federal Home Loan Bank | |
ASC | Accounting standards codification | First Financial | First Financial Bancorp. | |
ASU | Accounting standards update | Form 10-K | First Financial Bancorp. Annual Report on Form 10-K | |
ATM | Automated teller machine | FRB | Federal Reserve Bank | |
Bank | First Financial Bank | GAAP | U.S. Generally Accepted Accounting Principles | |
Basel III | Basel Committee regulatory capital reforms, Third Basel Accord | IRLC | Interest Rate Lock Commitment | |
Bp/bps | Basis point(s) | MainSource | MainSource Financial Group, Inc. | |
CDs | Certificates of deposit | N/A | Not applicable | |
C&I | Commercial & Industrial | NII | Net interest income | |
CRE | Commercial Real Estate | Oak Street | Oak Street Holdings Corporation | |
Company | First Financial Bancorp. | OREO | Other real estate owned | |
ERM | Enterprise Risk Management | SEC | United States Securities and Exchange Commission | |
EVE | Economic value of equity | TDR | Troubled debt restructuring | |
Fair Value Topic | FASB ASC Topic 825, Financial Instruments |
March 31, 2018 | December 31, 2017 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Cash and due from banks | $ | $ | |||||
Interest-bearing deposits with other banks | |||||||
Investment securities available-for-sale, at fair value (amortized cost $1,370,844 at March 31, 2018 and $1,348,227 at December 31, 2017) | |||||||
Investment securities held-to-maturity (fair value $623,967 at March 31, 2018 and $653,101 at December 31, 2017) | |||||||
Other investments | |||||||
Loans held for sale | |||||||
Loans and leases | |||||||
Commercial & industrial | |||||||
Lease financing | |||||||
Construction real estate | |||||||
Commercial real estate | |||||||
Residential real estate | |||||||
Home equity | |||||||
Installment | |||||||
Credit card | |||||||
Total loans and leases | |||||||
Less: Allowance for loan and lease losses | |||||||
Net loans and leases | |||||||
Premises and equipment | |||||||
Goodwill and other intangibles | |||||||
Accrued interest and other assets | |||||||
Total assets | $ | $ | |||||
Liabilities | |||||||
Deposits | |||||||
Interest-bearing demand | $ | $ | |||||
Savings | |||||||
Time | |||||||
Total interest-bearing deposits | |||||||
Noninterest-bearing | |||||||
Total deposits | |||||||
Federal funds purchased and securities sold under agreements to repurchase | |||||||
Federal Home Loan Bank short-term borrowings | |||||||
Total short-term borrowings | |||||||
Long-term debt | |||||||
Total borrowed funds | |||||||
Accrued interest and other liabilities | |||||||
Total liabilities | |||||||
Shareholders' equity | |||||||
Common stock - no par value | |||||||
Authorized - 160,000,000 shares; Issued - 68,730,731 shares in 2018 and 2017 | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Treasury stock, at cost, 6,516,908 shares in 2018 and 6,661,644 shares in 2017 | ( | ) | ( | ) | |||
Total shareholders' equity | |||||||
Total liabilities and shareholders' equity | $ | $ |
Three months ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Interest income | |||||||
Loans, including fees | $ | $ | |||||
Investment securities | |||||||
Taxable | |||||||
Tax-exempt | |||||||
Total interest on investment securities | |||||||
Other earning assets | ( | ) | |||||
Total interest income | |||||||
Interest expense | |||||||
Deposits | |||||||
Short-term borrowings | |||||||
Long-term borrowings | |||||||
Total interest expense | |||||||
Net interest income | |||||||
Provision for loan and lease losses | |||||||
Net interest income after provision for loan and lease losses | |||||||
Noninterest income | |||||||
Service charges on deposit accounts | |||||||
Trust and wealth management fees | |||||||
Bankcard income | |||||||
Client derivative fees | |||||||
Net gains from sales of loans | |||||||
Net gains (losses) on sales of investment securities | |||||||
Other | |||||||
Total noninterest income | |||||||
Noninterest expenses | |||||||
Salaries and employee benefits | |||||||
Net occupancy | |||||||
Furniture and equipment | |||||||
Data processing | |||||||
Marketing | |||||||
Communication | |||||||
Professional services | |||||||
State intangible tax | |||||||
FDIC assessments | |||||||
Loss (gain) - other real estate owned | |||||||
Other | |||||||
Total noninterest expenses | |||||||
Income before income taxes | |||||||
Income tax expense | |||||||
Net income | $ | $ | |||||
Net earnings per common share - basic | $ | $ | |||||
Net earnings per common share - diluted | $ | $ | |||||
Cash dividends declared per share | $ | $ | |||||
Average common shares outstanding - basic | |||||||
Average common shares outstanding - diluted |
FIRST FINANCIAL BANCORP. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||
(Dollars in thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net income | $ | $ | |||||
Other comprehensive income (loss), net of tax: | |||||||
Unrealized gains (losses) on investment securities arising during the period | ( | ) | |||||
Change in retirement obligation | |||||||
Unrealized gain (loss) on derivatives | |||||||
Other comprehensive income (loss) | ( | ) | |||||
Comprehensive income | $ | $ | |||||
See Notes to Consolidated Financial Statements. |
Common Stock | Common Stock | Retained | Accumulated other comprehensive | Treasury stock | |||||||||||||||||||||
Shares | Amount | Earnings | income (loss) | Shares | Amount | Total | |||||||||||||||||||
Balance at January 1, 2017 | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ||||||||||||||
Net income | |||||||||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||
Common stock at $0.17 per share | ( | ) | ( | ) | |||||||||||||||||||||
Warrant exercises | ( | ) | |||||||||||||||||||||||
Exercise of stock options, net of shares purchased | ( | ) | |||||||||||||||||||||||
Restricted stock awards, net of forfeitures | ( | ) | ( | ) | |||||||||||||||||||||
Share-based compensation expense | |||||||||||||||||||||||||
Balance at March 31, 2017 | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ||||||||||||||
Net income | |||||||||||||||||||||||||
Reclassification of certain tax effects from AOCI to retained earnings | ( | ) | |||||||||||||||||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | |||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||
Common stock at $0.19 per share | ( | ) | ( | ) | |||||||||||||||||||||
Warrant Exercises | ( | ) | |||||||||||||||||||||||
Exercise of stock options, net of shares purchased | ( | ) | |||||||||||||||||||||||
Restricted stock awards, net of forfeitures | ( | ) | ( | ) | |||||||||||||||||||||
Share-based compensation expense | |||||||||||||||||||||||||
Balance at March 31, 2018 | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ |
Three months ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Operating activities | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan and lease losses | |||||||
Depreciation and amortization | |||||||
Stock-based compensation expense | |||||||
Pension expense (income) | ( | ) | ( | ) | |||
Net amortization (accretion) on investment securities | |||||||
Net (gains) losses on sales of investment securities | ( | ) | |||||
Originations of loans held for sale | ( | ) | ( | ) | |||
Net gains from sales of loans held for sale | ( | ) | ( | ) | |||
Proceeds from sales of loans held for sale | |||||||
Deferred income taxes | ( | ) | |||||
Decrease (increase) cash surrender value of life insurance | ( | ) | |||||
Decrease (increase) in interest receivable | ( | ) | ( | ) | |||
Decrease (increase) in indemnification asset | |||||||
(Decrease) increase in interest payable | ( | ) | ( | ) | |||
Decrease (increase) in other assets | |||||||
(Decrease) increase in other liabilities | ( | ) | ( | ) | |||
Net cash provided by (used in) operating activities | |||||||
Investing activities | |||||||
Proceeds from sales of securities available-for-sale | |||||||
Proceeds from calls, paydowns and maturities of securities available-for-sale | |||||||
Purchases of securities available-for-sale | ( | ) | ( | ) | |||
Proceeds from calls, paydowns and maturities of securities held-to-maturity | |||||||
Purchases of securities held-to-maturity | ( | ) | |||||
Net decrease (increase) in interest-bearing deposits with other banks | |||||||
Net decrease (increase) in loans and leases | ( | ) | |||||
Proceeds from disposal of other real estate owned | |||||||
Purchases of premises and equipment | ( | ) | ( | ) | |||
Net cash provided by (used in) investing activities | ( | ) | ( | ) | |||
Financing activities | |||||||
Net (decrease) increase in total deposits | |||||||
Net (decrease) increase in short-term borrowings | ( | ) | |||||
Proceeds from FHLB borrowings | |||||||
Cash dividends paid on common stock | ( | ) | ( | ) | |||
Proceeds from exercise of stock options | |||||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Cash and due from banks | |||||||
Change in cash and due from banks | ( | ) | ( | ) | |||
Cash and due from banks at beginning of period | |||||||
Cash and due from banks at end of period | $ | $ |
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 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
Securities of U.S. government agencies and corporations | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Mortgage-backed securities - residential | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Obligations of state and other political subdivisions | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Asset-backed securities | ( | ) | ||||||||||||||||||||||||||||||
Other securities | ( | ) | ||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ |
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 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
Securities of U.S. government agencies and corporations | ( | ) | ||||||||||||||||||||||||||||||
Mortgage-backed securities - residential | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Obligations of state and other political subdivisions | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Asset-backed securities | ( | ) | ||||||||||||||||||||||||||||||
Other securities | ( | ) | ||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ |
Held-to-maturity | Available-for-sale | |||||||||||||||
(Dollars in thousands) | Amortized cost | Fair value | Amortized cost | Fair value | ||||||||||||
By Contractual Maturity: | ||||||||||||||||
Due in one year or less | $ | $ | $ | $ | ||||||||||||
Due after one year through five years | ||||||||||||||||
Due after five years through ten years | ||||||||||||||||
Due after ten years | ||||||||||||||||
Mortgage-backed securities - residential | ||||||||||||||||
Mortgage-backed securities - commercial | ||||||||||||||||
Collateralized mortgage obligations | ||||||||||||||||
Asset-backed securities | ||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2018 | ||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair value | Unrealized loss | Fair value | Unrealized loss | Fair value | Unrealized loss | ||||||||||||||||||
U.S. Treasuries | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | ||||||||||||||
Securities of U.S. Government agencies and corporations | ( | ) | ( | ) | ||||||||||||||||||||
Mortgage-backed securities - residential | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Mortgage-backed securities - commercial | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Collateralized mortgage obligations | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Obligations of state and other political subdivisions | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Asset-backed securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Other securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
December 31, 2017 | ||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(Dollars in thousands) | value | loss | value | loss | value | loss | ||||||||||||||||||
U.S. Treasuries | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | ||||||||||||||
Securities of U.S. Government agencies and corporations | ( | ) | ( | ) | ||||||||||||||||||||
Mortgage-backed securities - residential | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Mortgage-backed securities - commercial | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Collateralized mortgage obligations | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Obligations of state and other political subdivisions | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Asset-backed securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Other securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
As of March 31, 2018 | ||||||||||||||||||||
Commercial | Real Estate | Lease | ||||||||||||||||||
(Dollars in thousands) | & industrial | Construction | Commercial | financing | Total | |||||||||||||||
Pass | $ | $ | $ | $ | $ | |||||||||||||||
Special Mention | ||||||||||||||||||||
Substandard | ||||||||||||||||||||
Doubtful | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
(Dollars in thousands) | Residential real estate | Home equity | Installment | Credit card | Total | |||||||||||||||
Performing | $ | $ | $ | $ | $ | |||||||||||||||
Nonperforming | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
As of December 31, 2017 | ||||||||||||||||||||
Commercial | Real Estate | Lease | ||||||||||||||||||
(Dollars in thousands) | & industrial | Construction | Commercial | financing | Total | |||||||||||||||
Pass | $ | $ | $ | $ | $ | |||||||||||||||
Special Mention | ||||||||||||||||||||
Substandard | ||||||||||||||||||||
Doubtful | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
(Dollars in thousands) | Residential real estate | Home equity | Installment | Credit card | Total | |||||||||||||||
Performing | $ | $ | $ | $ | $ | |||||||||||||||
Nonperforming | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
As of March 31, 2018 | ||||||||||||||||||||||||||||||||||||
(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 & industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Lease financing | ||||||||||||||||||||||||||||||||||||
Construction real estate | ||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||
Residential real estate | ||||||||||||||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||||||||||||||
Installment | ||||||||||||||||||||||||||||||||||||
Credit card | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
As of December 31, 2017 | ||||||||||||||||||||||||||||||||||||
(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 & industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Lease financing | ||||||||||||||||||||||||||||||||||||
Construction real estate | ||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||
Residential real estate | ||||||||||||||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||||||||||||||
Installment | ||||||||||||||||||||||||||||||||||||
Credit card | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Three months ended | |||||||||||||||||||||
March 31, 2018 | March 31, 2017 | ||||||||||||||||||||
(Dollars in thousands) | Number of loans | Pre-modification loan balance | Period end balance | Number of loans | Pre-modification loan balance | Period end balance | |||||||||||||||
Commercial & industrial | $ | $ | $ | $ | |||||||||||||||||
Construction real estate | |||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||
Residential real estate | |||||||||||||||||||||
Home equity | |||||||||||||||||||||
Installment | |||||||||||||||||||||
Total | $ | $ | $ | $ |
Three months ended | |||||||
March 31, | |||||||
(Dollars in thousands) | 2018 | 2017 | |||||
Extended maturities | $ | $ | |||||
Adjusted interest rates | |||||||
Combination of rate and maturity changes | |||||||
Forbearance | |||||||
Other (1) | |||||||
Total | $ | $ |
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
Impaired loans | ||||||||
Nonaccrual loans (1) | ||||||||
Commercial & industrial | $ | $ | ||||||
Lease financing | ||||||||
Construction real estate | ||||||||
Commercial real estate | ||||||||
Residential real estate | ||||||||
Home equity | ||||||||
Installment | ||||||||
Nonaccrual loans | ||||||||
Accruing troubled debt restructurings | ||||||||
Total impaired loans | $ | $ |
Three months ended | ||||||||
March 31, | ||||||||
(Dollars in thousands) | 2018 | 2017 | ||||||
Interest income effect on impaired loans | ||||||||
Gross amount of interest that would have been recorded under original terms | $ | $ | ||||||
Interest included in income | ||||||||
Nonaccrual loans | ||||||||
Troubled debt restructurings | ||||||||
Total interest included in income | ||||||||
Net impact on interest income | $ | $ |
As of March 31, 2018 | As of December 31, 2017 | |||||||||||||||||||||||
(Dollars in thousands) | Current balance | Contractual principal balance | Related allowance | Current balance | Contractual principal balance | Related allowance | ||||||||||||||||||
Loans with no related allowance recorded | ||||||||||||||||||||||||
Commercial & industrial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Lease financing | ||||||||||||||||||||||||
Construction real estate | ||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||
Residential real estate | ||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||
Installment | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Loans with an allowance recorded | ||||||||||||||||||||||||
Commercial & industrial | ||||||||||||||||||||||||
Lease financing | ||||||||||||||||||||||||
Construction real estate | ||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||
Residential real estate | ||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||
Installment | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Commercial & industrial | ||||||||||||||||||||||||
Lease financing | ||||||||||||||||||||||||
Construction real estate | ||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||
Residential real estate | ||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||
Installment | ||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Three months ended | |||||||||||||||
March 31, 2018 | March 31, 2017 | ||||||||||||||
(Dollars in thousands) | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||
Loans with no related allowance recorded | |||||||||||||||
Commercial & industrial | $ | $ | $ | $ | |||||||||||
Lease financing | |||||||||||||||
Construction real estate | |||||||||||||||
Commercial real estate | |||||||||||||||
Residential real estate | |||||||||||||||
Home equity | |||||||||||||||
Installment | |||||||||||||||
Total | |||||||||||||||
Loans with an allowance recorded | |||||||||||||||
Commercial & industrial | |||||||||||||||
Lease financing | |||||||||||||||
Construction real estate | |||||||||||||||
Commercial real estate | |||||||||||||||
Residential real estate | |||||||||||||||
Home equity | |||||||||||||||
Installment | |||||||||||||||
Total | |||||||||||||||
Total | |||||||||||||||
Commercial & industrial | |||||||||||||||
Lease financing | |||||||||||||||
Construction real estate | |||||||||||||||
Commercial real estate | |||||||||||||||
Residential real estate | |||||||||||||||
Home equity | |||||||||||||||
Installment | |||||||||||||||
Total | $ | $ | $ | $ |
Three months ended | ||||||||
March 31, | ||||||||
(Dollars in thousands) | 2018 | 2017 | ||||||
Balance at beginning of period | $ | $ | ||||||
Additions | ||||||||
Commercial & industrial | ||||||||
Residential real estate | ||||||||
Total additions | ||||||||
Disposals | ||||||||
Commercial & industrial | ( | ) | ( | ) | ||||
Residential real estate | ( | ) | ( | ) | ||||
Total disposals | ( | ) | ( | ) | ||||
Valuation adjustment | ||||||||
Commercial & industrial | ( | ) | ( | ) | ||||
Residential real estate | ( | ) | ( | ) | ||||
Total valuation adjustment | ( | ) | ( | ) | ||||
Balance at end of period | $ | $ |
Three months ended March 31, 2018 | ||||||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial & industrial | Lease financing | Construction | Commercial | Residential | Home equity | Installment | Credit card | Total | |||||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Provision for loan and lease losses | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Loans charged off | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||
Total net charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of March 31, 2018 | ||||||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial & industrial | Lease financing | Construction | Commercial | Residential | Home equity | Installment | Credit card | Total | |||||||||||||||||||||||||||
Ending allowance balance attributable to loans | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Three months ended March 31, 2017 | ||||||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial & industrial | Lease financing | Construction | Commercial | Residential | Home equity | Installment | Credit card | Total | |||||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Provision for loan and lease losses | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Loans charged off | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||
Total net charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of December 31, 2017 | ||||||||||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial & industrial | Lease financing | Construction | Commercial | Residential | Home equity | Installment | Credit card | Total | |||||||||||||||||||||||||||
Ending allowance balance attributable to loans | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||
Ending allowance for loan and lease losses | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
March 31, 2018 | December 31, 2017 | |||||||||||||
(Dollars in thousands) | Amount | Average rate | Amount | Average rate | ||||||||||
Subordinated notes | $ | % | $ | % | ||||||||||
Unamortized debt issuance costs | ( | ) | N/A | ( | ) | N/A | ||||||||
FHLB borrowings | % | % | ||||||||||||
Capital loan with municipality | % | % | ||||||||||||
Total long-term debt | $ | % | $ | % |
Three months ended March 31, 2018 | |||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | Total accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Prior to Reclass | Reclass from | Pre-tax | Tax-effect | Net of tax | Beginning Balance | Net Activity | Reclass of Stranded Tax Effects | Ending Balance | ||||||||||||||||||||||||||
Unrealized gain (loss) on investment securities | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Unrealized gain (loss) on derivatives | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Retirement obligation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three months ended March 31, 2017 | |||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | Total accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Prior to Reclass | Reclass from | Pre-tax | Tax-effect | Net of tax | Beginning Balance | Net Activity | Ending Balance | |||||||||||||||||||||||
Unrealized gain (loss) on investment securities | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Unrealized gain (loss) on derivatives | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Retirement obligation | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
Amount reclassified from accumulated other comprehensive income (1) | ||||||||||
Three months ended | ||||||||||
March 31, | ||||||||||
(Dollars in thousands) | 2018 | 2017 | Affected Line Item in the Consolidated Statements of Income | |||||||
Realized gains and losses on securities available-for-sale | $ | $ | Net gains on sales of investments securities | |||||||
Defined benefit pension plan | ||||||||||
Amortization of prior service cost (2) | Salaries and employee benefits | |||||||||
Recognized net actuarial loss (2) | ( | ) | ( | ) | Salaries and employee benefits | |||||
Defined benefit pension plan total | ( | ) | ( | ) | ||||||
Total reclassifications for the period, before tax | $ | ( | ) | $ |
March 31, 2018 | December 31, 2017 | |||||||||||||||||||||||||
Estimated fair value | Estimated fair value | |||||||||||||||||||||||||
(Dollars in thousands) | Balance sheet classification | Notional amount | Gain | Loss | Notional amount | Gain | Loss | |||||||||||||||||||
Client derivatives - instruments associated with loans | ||||||||||||||||||||||||||
Matched interest rate swaps with borrower | Accrued interest and other assets | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||
Matched interest rate swaps with counterparty | Accrued interest and other liabilities | ( | ) | ( | ) | |||||||||||||||||||||
Total | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) |
March 31, 2018 | December 31, 2017 | |||||||||||||||||||||||
(Dollars in thousands) | Gross amounts of recognized liabilities | Gross amounts offset in the Consolidated Balance Sheets | Net amounts of assets 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 | ||||||||||||||||||||||||
Matched interest rate swaps with counterparty | $ | $ | $ | $ | $ | $ |
Weighted-average rate | ||||||||||||||||
(Dollars in thousands) | Notional amount | Average maturity (years) | Fair value | Receive | Pay | |||||||||||
Client derivatives | ||||||||||||||||
Receive fixed, matched interest rate swaps with borrower | $ | $ | ( | ) | % | % | ||||||||||
Pay fixed, matched interest rate swaps with counterparty | % | % | ||||||||||||||
Total client derivatives | $ | $ | ( | ) | % | % |
Three months ended | ||||||||
March 31, | ||||||||
(Dollars in thousands) | 2018 | 2017 | ||||||
Service cost | $ | $ | ||||||
Interest cost | ||||||||
Expected return on assets | ( | ) | ( | ) | ||||
Amortization of prior service cost | ( | ) | ( | ) | ||||
Net actuarial loss | ||||||||
Net periodic benefit (income) cost | $ | ( | ) | $ | ( | ) |
Three months ended | ||||||||
March 31, | ||||||||
(Dollars in thousands, except per share data) | 2018 | 2017 | ||||||
Numerator | ||||||||
Net income available to common shareholders | $ | $ | ||||||
Denominator | ||||||||
Basic earnings per common share - weighted average shares | ||||||||
Effect of dilutive securities | ||||||||
Employee stock awards | ||||||||
Warrants | ||||||||
Diluted earnings per common share - adjusted weighted average shares | ||||||||
Earnings per share available to common shareholders | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ |
Carrying | Estimated fair value | ||||||||||||||
(Dollars in thousands) | value | Total | Level 1 | Level 2 | Level 3 | ||||||||||
March 31, 2018 | |||||||||||||||
Financial assets | |||||||||||||||
Cash and short-term investments | $ | $ | $ | $ | $ | ||||||||||
Investment securities held-to-maturity | |||||||||||||||
Other investments | N/A | N/A | N/A | N/A | |||||||||||
Loans held for sale | |||||||||||||||
Loans and leases | |||||||||||||||
Accrued interest receivable | |||||||||||||||
Financial liabilities | |||||||||||||||
Deposits | |||||||||||||||
Short-term borrowings | |||||||||||||||
Long-term debt | |||||||||||||||
Accrued interest payable |
Carrying | Estimated fair value | ||||||||||||||
(Dollars in thousands) | value | Total | Level 1 | Level 2 | Level 3 | ||||||||||
December 31, 2017 | |||||||||||||||
Financial assets | |||||||||||||||
Cash and short-term investments | $ | $ | $ | $ | $ | ||||||||||
Investment securities held-to-maturity | |||||||||||||||
Other investments | N/A | N/A | N/A | N/A | |||||||||||
Loans held for sale | |||||||||||||||
Loans and leases | |||||||||||||||
Accrued interest receivable | |||||||||||||||
Financial liabilities | |||||||||||||||
Deposits | |||||||||||||||
Short-term borrowings | |||||||||||||||
Long-term debt | |||||||||||||||
Accrued interest payable |
Fair value measurements using | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Assets/liabilities at fair value | ||||||||||||
March 31, 2018 | ||||||||||||||||
Assets | ||||||||||||||||
Derivatives | $ | $ | $ | $ | ||||||||||||
Investment securities available-for-sale | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
Liabilities | ||||||||||||||||
Derivatives | $ | $ | $ | $ |
Fair value measurements using | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Assets/liabilities at fair value | ||||||||||||
December 31, 2017 | ||||||||||||||||
Assets | ||||||||||||||||
Derivatives | $ | $ | $ | $ | ||||||||||||
Investment securities available-for-sale | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
Liabilities | ||||||||||||||||
Derivatives | $ | $ | $ | $ |
Fair value measurements using | ||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | |||||||||
March 31, 2018 | ||||||||||||
Assets | ||||||||||||
Impaired loans | $ | $ | $ | |||||||||
OREO |
Fair value measurements using | ||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | |||||||||
December 31, 2017 | ||||||||||||
Assets | ||||||||||||
Impaired loans | $ | $ | $ | |||||||||
OREO |
Three months ended | |||||||
March 31, | |||||||
(Dollars in thousands) | 2018 | 2017 | |||||
Net interest income | $ | 75,812 | $ | 68,932 | |||
Tax equivalent adjustment | 718 | 1,225 | |||||
Net interest income - tax equivalent | $ | 76,530 | $ | 70,157 | |||
Average earning assets | $ | 8,087,848 | $ | 7,695,717 | |||
Net interest margin (1) | 3.80 | % | 3.63 | % | |||
Net interest margin (fully tax equivalent) (1) | 3.84 | % | 3.70 | % |
Quarterly Averages | ||||||||||||||
March 31, 2018 | March 31, 2017 | |||||||||||||
(Dollars in thousands) | Balance | Yield | Balance | Yield | ||||||||||
Earning assets | ||||||||||||||
Investments | ||||||||||||||
Investment securities | $ | 2,042,781 | 3.04 | % | $ | 1,906,699 | 2.76 | % | ||||||
Interest-bearing deposits with other banks | 27,073 | 1.60 | % | 40,985 | 0.80 | % | ||||||||
Gross loans (1) | 6,017,994 | 5.05 | % | 5,748,033 | 4.64 | % | ||||||||
Total earning assets | 8,087,848 | 4.53 | % | 7,695,717 | 4.15 | % | ||||||||
Nonearning assets | ||||||||||||||
Allowance for loan and lease losses | (55,016 | ) | (58,461 | ) | ||||||||||
Cash and due from banks | 116,095 | 115,719 | ||||||||||||
Accrued interest and other assets | 681,249 | 656,096 | ||||||||||||
Total assets | $ | 8,830,176 | $ | 8,409,071 | ||||||||||
Interest-bearing liabilities | ||||||||||||||
Deposits | ||||||||||||||
Interest-bearing demand | $ | 1,415,603 | 0.37 | % | $ | 1,484,427 | 0.20 | % | ||||||
Savings | 2,450,697 | 0.64 | % | 2,224,708 | 0.48 | % | ||||||||
Time | 1,466,440 | 1.41 | % | 1,233,631 | 1.17 | % | ||||||||
Total interest-bearing deposits | 5,332,740 | 0.78 | % | 4,942,766 | 0.57 | % | ||||||||
Borrowed funds | ||||||||||||||
Short-term borrowings | 740,506 | 1.46 | % | 848,721 | 0.68 | % | ||||||||
Long-term debt | 126,342 | 5.07 | % | 119,605 | 5.22 | % | ||||||||
Total borrowed funds | 866,848 | 1.99 | % | 968,326 | 1.24 | % | ||||||||
Total interest-bearing liabilities | 6,199,588 | 0.95 | % | 5,911,092 | 0.68 | % | ||||||||
Noninterest-bearing liabilities | ||||||||||||||
Noninterest-bearing demand deposits | 1,570,572 | 1,499,097 | ||||||||||||
Other liabilities | 130,542 | 127,667 | ||||||||||||
Shareholders' equity | 929,474 | 871,215 | ||||||||||||
Total liabilities and shareholders' equity | $ | 8,830,176 | $ | 8,409,071 | ||||||||||
Net interest income | $ | 75,812 | $ | 68,932 | ||||||||||
Net interest spread | 3.58 | % | 3.47 | % | ||||||||||
Contribution of noninterest-bearing sources of funds | 0.22 | % | 0.16 | % | ||||||||||
Net interest margin (2) | 3.80 | % | 3.63 | % | ||||||||||
Tax equivalent adjustment | 0.04 | % | 0.07 | % | ||||||||||
Net interest margin (fully tax equivalent) (2) | 3.84 | % | 3.70 | % |
Changes for the three months ended March 31, 2018 | ||||||||||||
Comparable quarter income variance | ||||||||||||
(Dollars in thousands) | Rate | Volume | Total | |||||||||
Earning assets | ||||||||||||
Investment securities | $ | 1,345 | $ | 1,021 | $ | 2,366 | ||||||
Interest-bearing deposits with other banks | 81 | (55 | ) | 26 | ||||||||
Gross loans (1) | 5,773 | 3,361 | 9,134 | |||||||||
Total earning assets | 7,199 | 4,327 | 11,526 | |||||||||
Interest-bearing liabilities | ||||||||||||
Total interest-bearing deposits | 2,620 | 753 | 3,373 | |||||||||
Borrowed funds | ||||||||||||
Short-term borrowings | 1,620 | (389 | ) | 1,231 | ||||||||
Long-term debt | (42 | ) | 84 | 42 | ||||||||
Total borrowed funds | 1,578 | (305 | ) | 1,273 | ||||||||
Total interest-bearing liabilities | 4,198 | 448 | 4,646 | |||||||||
Net interest income | $ | 3,001 | $ | 3,879 | $ | 6,880 |
Quarter ended | ||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||
(Dollars in thousands) | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||
Nonperforming loans, nonperforming assets, and underperforming assets | ||||||||||||||||||||
Nonaccrual loans (1) | ||||||||||||||||||||
Commercial and industrial | $ | 6,275 | $ | 5,229 | $ | 9,026 | $ | 15,099 | $ | 9,249 | ||||||||||
Lease financing | 0 | 82 | 87 | 94 | 102 | |||||||||||||||
Construction real estate | 26 | 29 | 824 | 1,075 | 1,075 | |||||||||||||||
Commercial real estate | 16,878 | 10,616 | 12,244 | 12,617 | 14,324 | |||||||||||||||
Residential real estate | 3,324 | 4,140 | 4,333 | 4,442 | 4,520 | |||||||||||||||
Home equity | 3,484 | 3,743 | 3,364 | 2,937 | 3,571 | |||||||||||||||
Installment | 296 | 243 | 240 | 307 | 322 | |||||||||||||||
Nonaccrual loans | 30,283 | 24,082 | 30,118 | 36,571 | 33,163 | |||||||||||||||
Accruing troubled debt restructurings | 14,943 | 17,545 | 19,692 | 20,135 | 29,948 | |||||||||||||||
Total nonperforming loans | 45,226 | 41,627 | 49,810 | 56,706 | 63,111 | |||||||||||||||
Other real estate owned | 1,065 | 2,781 | 3,116 | 5,961 | 5,300 | |||||||||||||||
Total nonperforming assets | 46,291 | 44,408 | 52,926 | 62,667 | 68,411 | |||||||||||||||
Accruing loans past due 90 days or more | 529 | 61 | 84 | 124 | 96 | |||||||||||||||
Total underperforming assets | $ | 46,820 | $ | 44,469 | $ | 53,010 | $ | 62,791 | $ | 68,507 | ||||||||||
Total classified assets | $ | 87,577 | $ | 87,293 | $ | 94,320 | $ | 98,391 | $ | 114,550 | ||||||||||
Credit quality ratios | ||||||||||||||||||||
Allowance for loan and lease losses to | ||||||||||||||||||||
Nonaccrual loans | 179.57 | % | 224.32 | % | 181.07 | % | 150.05 | % | 169.85 | % | ||||||||||
Nonperforming loans | 120.24 | % | 129.77 | % | 109.48 | % | 96.77 | % | 89.25 | % | ||||||||||
Total ending loans | 0.89 | % | 0.90 | % | 0.91 | % | 0.93 | % | 0.98 | % | ||||||||||
Nonperforming loans to total loans | 0.74 | % | 0.69 | % | 0.83 | % | 0.97 | % | 1.10 | % | ||||||||||
Nonperforming assets to | ||||||||||||||||||||
Ending loans, plus OREO | 0.76 | % | 0.74 | % | 0.89 | % | 1.07 | % | 1.19 | % | ||||||||||
Total assets | 0.52 | % | 0.50 | % | 0.60 | % | 0.72 | % | 0.80 | % | ||||||||||
Nonperforming assets, excluding accruing TDRs to | ||||||||||||||||||||
Ending loans, plus OREO | 0.51 | % | 0.45 | % | 0.56 | % | 0.72 | % | 0.67 | % | ||||||||||
Total assets | 0.35 | % | 0.30 | % | 0.38 | % | 0.49 | % | 0.45 | % | ||||||||||
Classified assets to total assets | 0.98 | % | 0.98 | % | 1.08 | % | 1.13 | % | 1.34 | % | ||||||||||
(1) Nonaccrual loans include nonaccrual TDRs of $6.0 million, $6.4 million, $9.1 million, $9.4 million and $7.8 million as of March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. |
First Financial Bancorp | First Financial Bank | |
Senior Unsecured Debt | BBB+ | A- |
Subordinated Debt | BBB | A- |
Short-Term Debt | K2 | BBB+ |
Deposit | N/A | K2 |
Short-Term Deposit | N/A | K2 |
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, 2018 | ||||||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||||
Consolidated | $ | 779,491 | 10.77 | % | $ | 461,597 | 6.375 | % | N/A | N/A | $ | 506,851 | 7.00 | % | ||||||||||||||
First Financial Bank | 818,195 | 11.33 | % | 460,532 | 6.375 | % | $ | 469,562 | 6.50 | % | 505,682 | 7.00 | % | |||||||||||||||
Tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||||
Consolidated | 779,595 | 10.77 | % | 570,208 | 7.875 | % | N/A | N/A | 615,462 | 8.50 | % | |||||||||||||||||
First Financial Bank | 818,299 | 11.33 | % | 568,893 | 7.875 | % | 577,923 | 8.00 | % | 614,043 | 8.50 | % | ||||||||||||||||
Total capital to risk-weighted assets | ||||||||||||||||||||||||||||
Consolidated | 953,243 | 13.17 | % | 715,022 | 9.875 | % | N/A | N/A | 760,277 | 10.50 | % | |||||||||||||||||
First Financial Bank | 880,612 | 12.19 | % | 713,373 | 9.875 | % | 722,404 | 10.00 | % | 758,524 | 10.50 | % | ||||||||||||||||
Leverage ratio | ||||||||||||||||||||||||||||
Consolidated | 779,595 | 9.00 | % | 346,641 | 4.00 | % | N/A | N/A | 346,641 | 4.00 | % | |||||||||||||||||
First Financial Bank | 818,299 | 9.46 | % | 345,934 | 4.00 | % | 432,417 | 5.00 | % | 345,934 | 4.00 | % |
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, 2017 | ||||||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||||
Consolidated | $ | 755,735 | 10.63 | % | $ | 408,746 | 5.750 | % | N/A | N/A | $ | 497,604 | 7.00 | % | ||||||||||||||
First Financial Bank | 794,251 | 11.21 | % | 407,220 | 5.750 | % | $ | 460,336 | 6.50 | % | 495,746 | 7.00 | % | |||||||||||||||
Tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||||
Consolidated | 755,839 | 10.63 | % | 515,376 | 7.250 | % | N/A | N/A | 604,233 | 8.50 | % | |||||||||||||||||
First Financial Bank | 794,355 | 11.22 | % | 513,452 | 7.250 | % | 566,567 | 8.00 | % | 601,978 | 8.50 | % | ||||||||||||||||
Total capital to risk-weighted assets | ||||||||||||||||||||||||||||
Consolidated | 929,148 | 13.07 | % | 657,548 | 9.250 | % | N/A | N/A | 746,406 | 10.50 | % | |||||||||||||||||
First Financial Bank | 856,363 | 12.09 | % | 655,093 | 9.250 | % | 708,209 | 10.00 | % | 743,619 | 10.50 | % | ||||||||||||||||
Leverage ratio | ||||||||||||||||||||||||||||
Consolidated | 755,839 | 8.84 | % | 342,198 | 4.00 | % | N/A | N/A | 342,198 | 4.00 | % | |||||||||||||||||
First Financial Bank | 794,355 | 9.29 | % | 342,113 | 4.00 | % | 427,642 | 5.00 | % | 342,113 | 4.00 | % |
Three months ended | |||||||||||||||||||
2018 | 2017 | ||||||||||||||||||
(Dollars in thousands) | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | ||||||||||||||
Allowance for loan and lease loss activity | |||||||||||||||||||
Balance at beginning of period | $ | 54,021 | $ | 54,534 | $ | 54,873 | $ | 56,326 | $ | 57,961 | |||||||||
Provision for loan losses | 2,303 | (205 | ) | 2,953 | 467 | 367 | |||||||||||||
Gross charge-offs | |||||||||||||||||||
Commercial and industrial | 885 | 1,264 | 4,122 | 3,065 | 1,743 | ||||||||||||||
Lease financing | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Construction real estate | 0 | 1 | 0 | 0 | 0 | ||||||||||||||
Commercial real estate | 2,176 | 10 | 58 | 485 | 485 | ||||||||||||||
Residential real estate | 96 | 128 | 23 | 223 | 61 | ||||||||||||||
Home equity | 242 | 278 | 71 | 384 | 180 | ||||||||||||||
Installment | 16 | 26 | 24 | 126 | 49 | ||||||||||||||
Credit card | 254 | 209 | 201 | 215 | 232 | ||||||||||||||
Total gross charge-offs | 3,669 | 1,916 | 4,499 | 4,498 | 2,750 | ||||||||||||||
Recoveries | |||||||||||||||||||
Commercial and industrial | 436 | 370 | 325 | 693 | 262 | ||||||||||||||
Lease financing | 0 | 0 | 0 | 1 | 0 | ||||||||||||||
Construction real estate | 0 | 0 | 0 | 89 | 0 | ||||||||||||||
Commercial real estate | 752 | 480 | 585 | 1,398 | 256 | ||||||||||||||
Residential real estate | 26 | 77 | 70 | 59 | 9 | ||||||||||||||
Home equity | 429 | 589 | 110 | 222 | 106 | ||||||||||||||
Installment | 48 | 46 | 74 | 43 | 71 | ||||||||||||||
Credit card | 34 | 46 | 43 | 73 | 44 | ||||||||||||||
Total recoveries | 1,725 | 1,608 | 1,207 | 2,578 | 748 | ||||||||||||||
Total net charge-offs | 1,944 | 308 | 3,292 | 1,920 | 2,002 | ||||||||||||||
Ending allowance for loan and lease losses | $ | 54,380 | $ | 54,021 | $ | 54,534 | $ | 54,873 | $ | 56,326 | |||||||||
Net charge-offs to average loans and leases (annualized) | |||||||||||||||||||
Commercial and industrial | 0.10 | % | 0.19 | % | 0.82 | % | 0.53 | % | 0.34 | % | |||||||||
Lease financing | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||
Construction real estate | 0.00 | % | 0.00 | % | 0.00 | % | (0.08 | )% | 0.00 | % | |||||||||
Commercial real estate | 0.23 | % | (0.07 | )% | (0.08 | )% | (0.15 | )% | 0.04 | % | |||||||||
Residential real estate | 0.06 | % | 0.04 | % | (0.04 | )% | 0.13 | % | 0.04 | % | |||||||||
Home equity | (0.16 | )% | (0.25 | )% | (0.03 | )% | 0.14 | % | 0.07 | % | |||||||||
Installment | (0.32 | )% | (0.19 | )% | (0.43 | )% | 0.65 | % | (0.18 | )% | |||||||||
Credit card | 1.90 | % | 1.39 | % | 1.39 | % | 1.28 | % | 1.73 | % | |||||||||
Total net charge-offs | 0.13 | % | 0.02 | % | 0.22 | % | 0.13 | % | 0.14 | % |
% Change from base case for immediate parallel changes in rates | ||||||||
-100 bps | +100 bps | +200 bps | ||||||
NII-Year 1 | (5.89 | )% | 2.88 | % | 5.71 | % | ||
NII-Year 2 | (7.21 | )% | 3.42 | % | 6.84 | % | ||
EVE | (3.56 | )% | 0.85 | % | 1.79 | % |
Beta sensitivity (% change from base) | |||||||||||
+100 BP | +200 BP | ||||||||||
Beta 25% lower | Beta 25% higher | Beta 25% lower | Beta 25% higher | ||||||||
NII-Year 1 | 4.65 | % | 1.12 | % | 9.03 | % | 2.38 | % | |||
NII-Year 2 | 5.16 | % | 1.68 | % | 10.12 | % | 3.57 | % |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(c) | The following table shows the total number of shares repurchased in the first quarter of 2018. |
(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, 2018 | |||||||||||||
Share repurchase program | 0 | $ | 0.00 | 0 | 3,509,133 | ||||||||
Stock Plans | 0 | 0.00 | N/A | N/A | |||||||||
February 1 to February 28, 2018 | |||||||||||||
Share repurchase program | 0 | $ | 0.00 | 0 | 3,509,133 | ||||||||
Stock Plans | 11,800 | 28.54 | N/A | N/A | |||||||||
March 1 to March 31, 2018 | |||||||||||||
Share repurchase program | 0 | $ | 0.00 | 0 | 3,509,133 | ||||||||
Stock Plans | 0 | 0.00 | N/A | N/A | |||||||||
Total | |||||||||||||
Share repurchase program | 0 | $ | 0.00 | 0 | |||||||||
Stock Plans | 11,800 | $ | 28.54 | N/A |
(1) | 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 Incentive Plan for Officers and Employees, Amended and Restated 2009 Non-Employee Director Stock Plan, 2012 Stock Plan, and Amended and Restated 2012 Stock Plan (collectively referred to hereafter as the Stock Plans). The table shows the number of shares purchased pursuant to the Stock 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 |
(a) | Exhibits: | |
Exhibit Number | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
4.5 | ||
4.6 | ||
4.7 | ||
4.8 | ||
4.9 | ||
4.10 | ||
4.11 | ||
4.12 | ||
4.13 | ||
10.1 | ||
10.2 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.1 | Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2018, 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.** |
FIRST FINANCIAL BANCORP. | ||||||
(Registrant) | ||||||
/s/ James M. Anderson | /s/ Scott T. Crawley | |||||
James M. Anderson | Scott T. Crawley | |||||
Executive Vice President and Chief Financial Officer | First Vice President and Controller | |||||
(Principal Accounting Officer) | ||||||
Date | 5/7/2018 | Date | 5/7/2018 |
1. | The Board of Directors of the Company (the "Board") recognizes that it is possible that the Company could terminate Executive's employment with the Company and from time to time the Company may consider the possibility of an acquisition by another company or other change in control transaction. The Board also recognizes that such considerations can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of such a termination of employment or the occurrence of a Change in Control (as defined herein) of the Company. |
2. | The Board believes that it is in the best interests of the Company and its shareholders to provide Executive with an incentive to continue his or her employment with the Company and to motivate Executive to maximize the value of the Company for the benefit of its shareholders. |
3. | The Board believes that it is imperative to provide Executive with certain severance benefits upon Executive's termination of employment and with certain additional benefits following a Change in Control. These benefits will provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change in Control. |
4. | The Company and Executive wish to terminate any and all rights and obligations the Company and/or Executive had under any prior employment, severance practices or change in control agreement in exchange for this Agreement. |
5. | Certain capitalized terms used in the Agreement, and not otherwise defined, are defined in Section 8 below. |
1. | Term of Agreement. This Agreement is expressly conditioned upon the successful completion of the merger of MainSource Financial Group, Inc. with and into First Financial Bancorp. (the “Merger”) as described in the Agreement and Plan of Merger between the parties dated July 25, 2017. |
2. | At-Will Employment. The Company and Executive acknowledge that Executive's employment is and will continue to be at-will, as defined under applicable law. If Executive's employment terminates for any reason, including (without limitation) any termination of employment not set forth in Section 3, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses or pursuant to written agreements with the Company, including equity award agreements. |
3. | Severance Benefits. |
a) | Termination Without Cause and not in Connection with a Change in Control. If the Company terminates Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled (as defined below) or Executive's death at any time (other than in connection with a Change in Control which is exclusively governed by Section 3(b) of the Agreement), then, subject to the terms of this Agreement, Executive will receive the following payments and benefits at the times specified below: |
i. | Severance Payments. Executive will receive severance in an amount equal to 24 months of Executive's base salary as in effect immediately prior to the date of Executive's termination of employment, less all required tax withholdings and other applicable deductions, payable in equal installments over the Restricted Period in accordance with Section 3(f). Notwithstanding the foregoing, the Company in its sole and absolute discretion may accelerate any installment payment or portion thereof to be paid on any date prior to the date the installment payment would otherwise be paid, subject to the limitations of Section 6. |
ii. | Termination Short-Term Bonus Payment. Executive shall be entitled to an annual bonus for the year of termination determined in accordance with the following: |
A. | In the event Executive is a Covered Executive (for purposes of Section 162(m) of the Code) for the year of his or her termination of employment or, as determined in the sole discretion of the Company, would have been a Covered Executive for such year if he or she had continued employment until the end of the year, then to the extent necessary to ensure the deductibility of compensation otherwise payable to Executive under the Company’s annual short term incentive plan, Executive shall receive a lump sum severance payment equal to the lesser of (x) 2 times the Executive’s target annual short-term incentive plan bonus or (y) 2 times the average of the three most recent actual annual bonus awards paid (or payable) to Executive by the Company, or the average actual annual bonus payouts for such lesser number of completed performance years for which Executive was eligible to receive an annual bonus). |
B. | For any year in which the preceding paragraph A does not apply, in lieu of the amount otherwise payable to Executive under paragraph A, Executive shall receive a |
C. | Such amount shall be paid following Executive’s termination of employment, but in no event later than March 15th of the year following the year of Executive’s termination of employment. |
iii. | Continued Executive Benefits. If the Company’s severance practices of general applicability at the time of Executive’s date of termination provides for continued payment by the Company of all or a portion of the cost of the premiums for continuation coverage under the Company’s health care plan pursuant to Section 4980B of the Code (“COBRA Coverage”) and if the Executive timely and properly elects such COBRA Coverage, the Company shall pay on the Executive’s behalf the difference between the monthly COBRA Coverage premium paid by the Executive for himself and his dependents and the monthly premium amount paid by similarly situated active employees for the same coverage. Such reimbursement shall be paid directly to the COBRA Coverage administrator (if any) and shall be treated as a taxable benefit to the Executive. The Executive shall be eligible to receive such reimbursement until the earliest of: (a) the twelve-month anniversary of the Executive’s termination of employment; (b) the date the Executive is no longer eligible to receive COBRA Coverage; or (c) the date on which the Executive otherwise becomes eligible to receive substantially similar coverage from another employer. The Company reserves the right to modify or terminate the COBRA Coverage benefit provided hereunder to the extent necessary to comply with applicable law. |
iv. | During the one‑year period following the date of termination, Executive shall be entitled to full executive outplacement assistance with an agency selected by the Company with the fee paid by the Company in an amount not to exceed five percent (5%) of Executive’s base salary (“Outplacement Assistance”). |
v. | Except as expressly provided in this Section 3(a) and in Section 3(e) below, Executive shall have no right to receive any compensation or other benefits under this Agreement as a result of or in connection with the Company’s termination of Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive's death at any time (other than in connection with a Change in Control under which is exclusively governed by Section 3(b) of the Agreement). Under no circumstances will Executive be entitled to benefits under both Section 3(a) and Section 3(b) of this Agreement. |
b) | Termination Without Cause or Resignation for Good Reason in Connection with a Change in Control. If, immediately prior to a Change in Control (as determined in the sole discretion of the Company) or during the one year period that commences upon a Change in Control, (x) the Company terminates Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive's death, or (y) Executive resigns from such employment for Good Reason, then, subject to the terms of this Agreement, Executive will receive the following severance benefits from the Company, in lieu of the benefits described in Section 3(a) above: |
i. | Severance Payments. Executive will receive severance in an amount equal to 24 months of Executive's base salary as in effect immediately prior to the date of Executive's termination of employment, less all required tax withholdings and other applicable deductions, payable in equal installments in accordance with Section 3(f). Notwithstanding the foregoing, the Company or its successor in its sole and absolute discretion may accelerate any installment |
ii. | Short-Term Bonus Payment. Executive will receive a lump sum severance payment equal to 2 times Executive's full target annual short-term incentive plan bonus as in effect for the fiscal year in which Executive's termination occurs (or, if greater, as in effect for the fiscal year in which the Change in Control occurs), less all required tax withholdings and other applicable deductions. Such amount shall be paid following Executive’s termination of employment, but in no event later than March 15th of the year following the year of Executive’s termination of employment. |
iii. | Continued Executive Benefits. COBRA Coverage as described in Section 3(a)(iii) of this Agreement. |
iv. | Outplacement Assistance as described in Section 3(a)(iv) of this Agreement. |
v. | Except as expressly provided in this Section 3(b) and in Section 3(e) below, Executive shall have no right to receive any compensation or other benefits under this Agreement as a result of or in connection with the Company’s termination of Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive's death or Executive resigns from such employment for Good Reason where such separation of employment occurs immediately prior to a Change in Control (as determined in the sole discretion of the Company) or during the one year period that commences upon a Change in Control. Under no circumstances will Executive be entitled to benefits under both Section 3(a) and Section 3(b) of this Agreement. |
c) | Termination Due to Executive’s Death or Disability, Termination by the Company for Cause or Voluntary Termination by Executive. If, during the Term, Executive’s employment is terminated: (1) by reason of Executive’s death or Disability, (2) by the Company for Cause; or (3) voluntarily by Executive, the Company’s obligations to Executive shall be limited to the payment of the Accrued Obligations, as defined below, and the timely payment or provision of the Other Benefits, as defined below. The Accrued Obligations shall be paid to Executive or his estate or beneficiary in the event of his death, as applicable, in a lump sum in cash within thirty (30) days of the date of termination. Other than the Accrued Obligations and Other Benefits, Executive shall have no right to receive any compensation or other benefits as a result of or in connection with the termination of his employment with the Company due to death or Disability, by the Company for Cause, or by resignation by Executive. |
d) | Cessation of Payments and Benefits. Notwithstanding any other provision of this Agreement to the contrary, the obligation of the Company to pay or provide the benefits under Sections 3(a) and 3(b) shall automatically and immediately terminate upon a breach by Executive of this Agreement, including without limitation a breach of Executive’s obligations under Section 5, other than an immaterial and inadvertent breach of any provision other than those set forth in Section 5 that is discontinued and/or remedied (to the extent subject to cure) by Executive promptly to the Company’s satisfaction. |
e) | Accrued Obligations and Other Benefits. Upon Executive’s separation of employment for any reason, the Company shall pay: (1) Executive’s accrued and unpaid Base Salary through the date of termination, to the extent not theretofore paid (the “Accrued Obligations”), which payments shall not be subject to the Release and shall be paid within thirty (30) days of the date of termination; and (2) any other benefits (other than benefits under any severance or termination |
f) | Timing of Payments. Subject to any specific timing provisions in Section 3(a), 3(b), or 7 as applicable, payment of severance under this Section 3 shall be made or commence to be made as soon as practicable following Executive's termination of employment in equal installments (no less frequently than monthly) in accordance with the Company’s general policies and procedures for the payment of salaries to its executive officers. |
g) | Full Settlement. Except as expressly provided in this Section 3, Executive shall have no right to receive any compensation or other benefits under this Agreement as a result of or in connection with the termination of this Agreement or the termination of Executive’s employment with the Company. If the Company has other severance programs or plans in place during the Term, Executive shall not be eligible for benefits under any such programs or plans. |
4. | Conditions to Receipt of Severance. Executive agrees that in order to receive the benefits provided in Section 3(a) or Section 3(b) (as applicable, the “Severance Benefits”): |
a) | Executive must execute and not thereafter revoke his signature to a general release in a form provided by and acceptable to the Company (the “Release”) by the deadline set by the Company for the return of the Release. The Company will set a deadline for return of the Release (the “Release Deadline”) that will be no later than 60 days following the termination of employment. If the termination of employment occurs at a time during the calendar year where the Release Deadline could occur in the calendar year following the calendar year in which Executive's termination of employment occurs, then any severance payments or benefits under this Agreement that are not exempt from Section 409A will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or such later time as required by (i) the payment schedule applicable to each payment or benefit as set forth in Section 3, (ii) the date the Release becomes effective, or (iii) Section 6; provided that the first payment shall include all amounts that would have been paid to Executive if payment had commenced on the date of Executive's termination of employment. |
b) | The Executive shall comply with requirements of Section 5 both during and after his or her employment. |
5. | Non-Competition, Non-Solicitation, Confidential Information. |
a) | Non‑competition. During the term of Executive’s employment and during the first six-months of the Restricted Period (as defined below), other than following a termination by the Company for Cause (as defined below) in which case this Section 5(a) shall be inapplicable, Executive shall not directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for the Company), enter into, engage in, or promote or assist (financially or otherwise), directly or indirectly, any business which provides any commercial banking, savings banking, mortgage lending, or any similar lending or banking services (the “Restricted Services”) anywhere in the geographic area consisting of any county in which any of the Affiliated Companies operate banking offices at any time during the Executive's employment with the Company or any Affiliated |
b) | Non‑solicitation of Clients. During the Executive's employment with the Company or any Affiliated Companies (as defined below) and for a period of 24 months after Executive is no longer employed by any Affiliated Companies (the “Restricted Period”), Executive shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for the Company or any Affiliated Companies): |
(i) | Solicit or attempt in any manner to persuade any Client of any Affiliated Company to cease to do business, to refrain from doing business or to reduce the amount of business which any Client has customarily done or contemplates doing with any of the Affiliated Companies; or |
(ii) | Interfere with or damage (or attempt to interfere with or damage) any relationship between any Affiliated Company and any Client. |
c) | Non‑solicitation of Employees; No Hire. During the Executive's employment with the Company or any Affiliated Companies and for a period of one year after Executive is no longer employed by the Company or any Affiliated Companies, Executive shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for any Affiliated Company): |
(i) | Solicit any employee, officer, director, agent or independent contractor of any Affiliated Company to terminate his or her relationship with, or otherwise refrain from rendering services to, any Affiliated Company, or otherwise interfere or attempt to interfere in any way with any Affiliated Company's relationship with any of its employees, officers, directors, agents or independent contractors; or |
(ii) | Hire, attempt to hire, employ or engage any person who, at any time within the two-year period immediately preceding such hire, or attempt to hire, employment or engagement, was an employee, officer or director of any Company or Affiliated Company. |
d) | Non-disclosure of Confidential Information. |
(i) | During Executive's employment with Company or any Affiliated Company and after the termination of such employment for any reason, Executive shall not, without the prior written consent of the General Counsel of Company (or such person's designee) or as may be otherwise required by law or legal process, communicate or divulge any Confidential Information to any person or entity other than Company or an Affiliated Company, their employees, and those designated by Company or an Affiliated Company, or use any Confidential Information except for the benefit of Company or an Affiliated Company. Upon service to Executive of any subpoena, court order or other legal process requiring Executive to disclose Confidential Information, Executive shall immediately provide written notice to Company of such service and the content of any Confidential Information to be disclosed. |
(ii) | Immediately upon the termination of Executive's employment with Company or an Affiliated Company for any reason, Executive shall return to Company or the applicable Affiliated Company all Confidential Information in Executive's possession, including but |
e) | Non‑disparagement. Executive shall not, directly or indirectly, at any time (whether during Executive’s employment or thereafter), make any public statement (oral or written), or take any other action, that is disparaging to any Affiliated Company. This Agreement shall not preclude Executive from making truthful statements to correct any false statements made by any Affiliated Company or any person acting on behalf thereof about Executive or prohibit Executive from reporting possible violations of federal law or regulations, including any possible securities laws violations, to any governmental agency or entity, including but not limited to the U.S. Department of Justice or the U.S. Securities and Exchange Commission, or from participating in any investigation by such governmental agency or entity. |
f) | Enforcement; Remedies; Blue Pencil. Executive acknowledges that: (1) the various covenants, restrictions, and obligations set forth in this Section 5 are separate and independent obligations, and may be enforced separately or in any combination; (2) the provisions of this Section 5 are fundamental and essential for the protection of the Company’s and the Affiliated Companies’ legitimate business and proprietary interests, and the Affiliated Companies (other than the Company) are intended third-party beneficiaries of such provisions; (3) such provisions are reasonable and appropriate in all respects and impose no undue hardship on Executive; and (4) in the event of any violation by Executive of any of such provisions, the Company and, if applicable, the Affiliated Companies, will suffer irreparable harm and their remedies at law may be inadequate. In the event of any violation or attempted violation of any provision of this Section 5 by Executive, the Company and the Affiliated Companies, or any of them, as the case may be, shall be entitled to a temporary restraining order, temporary and permanent injunctions, specific performance, and other equitable relief, without any showing of irreparable harm or damage or the posting of any bond, in addition to any other rights or remedies that may then be available to them, including, without limitation, money damages and the cessation of the payments contemplated under Section 3. If any of the covenants set forth in this Section 5 is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such covenant shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining such covenants shall not be affected thereby. |
a. | Although the Company does not guarantee the tax treatment of any payments under the Agreement, the intent of the Parties is that the payments and benefits under this Agreement be exempt from, or comply with, Section 409A of the Code and all Treasury Regulations and guidance promulgated thereunder (“Code Section 409A”) and to the maximum extent permitted the Agreement shall be limited, construed and interpreted in accordance with such intent. In no event whatsoever shall the Company or its affiliates or their respective officers, directors, employees or agents be liable for any additional tax, interest or penalties that may be imposed on Executive by Code Section 409A or damages for failing to comply with Code Section 409A. |
b. | Notwithstanding any other provision of this Agreement to the contrary, to the extent that any reimbursement of expenses constitutes “deferred compensation” under Code Section 409A, such reimbursement shall be provided no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year. |
c. | For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), the right to receive payments in the form of installment |
d. | Notwithstanding any other provision of this Agreement to the contrary, if at the time of Executive’s separation from service (as defined in Code Section 409A), Executive is a “Specified Employee”, then the Company will defer the payment or commencement of any nonqualified deferred compensation subject to Code Section 409A payable upon separation from service (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six (6) months following separation from service or, if earlier, the earliest other date as is permitted under Code Section 409A (and any amounts that otherwise would have been paid during this deferral period will be paid in a lump sum on the day after the expiration of the six (6) month period or such shorter period, if applicable). Executive will be a “Specified Employee” for purposes of this Agreement if, on the date of Executive’s separation from service, Executive is an individual who is, under the method of determination adopted by the Company designated as, or within the category of employees deemed to be, a “Specified Employee” within the meaning and in accordance with Treasury Regulation Section 1.409A-1(i). The Company shall determine in its sole discretion all matters relating to who is a “Specified Employee” and the application of and effects of the change in such determination. |
e. | Notwithstanding anything in this Agreement or elsewhere to the contrary, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “non-qualified deferred compensation” within the meaning of Code Section 409A upon or following a termination of the Executive’s employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” and the date of such separation from service shall be the date of termination for purposes of any such payment or benefits. |
7. | Limitation on Payments Under Certain Circumstances. |
a. | Anything in this Agreement to the contrary notwithstanding, in the event the Accounting Firm (as defined below) shall determine that receipt of all Payments (as defined below) would subject Executive to the excise tax under Section 4999 of the Code, the Accounting Firm shall determine whether to reduce any of the Severance Benefits paid or payable pursuant to this Agreement so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount (as defined below). The Severance Benefits shall be so reduced only if the Accounting Firm determines that Executive would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Severance Benefits were so reduced. If the Accounting Firm determines that Executive would not have a greater Net After-Tax Receipt of aggregate Payments if the Severance Benefits were so reduced, Executive shall receive all Severance Benefits to which Executive is entitled hereunder. |
b. | If the Accounting Firm determines that the aggregate Agreement Payments should be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under this Section 7 shall be binding upon the Company and Executive and shall be made as soon as reasonably practicable and in no event later than thirty (30) days following the date of termination. For purposes of reducing the Severance Benefits so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under this Agreement (and no other payments) shall be reduced. The reduction of the amounts payable hereunder, if applicable, shall be made by |
c. | As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement that should not have been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Safe Harbor Amount hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive that the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, Executive shall promptly (and in no event later than sixty (60) days following the date on which the Overpayment is determined) pay any such Overpayment to the Company together with interest at the rate used to calculate present value under Section 280G of the Code; provided, however, that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Sections 1 and 4999 of the Code or generate a refund of such taxes. If the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event later than sixty (60) days following the date on which the Underpayment is determined) by the Company to or for the benefit of Executive together with interest at the rate used to calculate present value under Section 280G of the Code. Executive shall have no right to any Underpayment unless and until the Accounting Firm determines that an Underpayment is due. |
d. | The Company shall cooperate with Executive in good faith in valuing, and the Accounting Firm shall take into account the value of, services provided or to be provided by Executive (including without limitation Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, including those set forth in Section 5 of this Agreement) before, on or after the date of a change in ownership or control of the Company (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such that payments in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A-44 of the regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of the regulations under Section 280G of the Code in accordance with Q&A-5(a) of the regulations under Section 280G of the Code. |
e. | Definitions. For purposes of this Section, the following terms shall have the meaning set forth below: |
8. | Defined Terms. For purposes of this Agreement, the following terms shall have the meaning set forth below: |
a) | “Affiliated Companies” shall mean the Company, all of its direct or indirect subsidiaries, and any other entities controlled by, controlling, or under common control with the Company, including any successors thereof, except that, following the consummation of a Change in Control, for purposes of Sections 5(a) and 5(b), Affiliated Companies shall be limited to the Company and its subsidiaries as of immediately prior to the consummation of such Change in Control. |
b) | “Cause” shall mean, as determined in the sole discretion of the Company, any one or more of the following: |
1. | an indictment of Executive, or plea of guilty or plea of nolo contendere by Executive, to a charge of an act constituting a felony under the federal laws of the United States, the laws of any state, or any other applicable law, (II) fraud, embezzlement, or misappropriation of assets, (III) willful misfeasance or dishonesty, or (IV) other actions or criminal conduct which materially and adversely affects the business (including business reputation) or financial condition of the Company; |
2. | the continued failure of Executive to (I) perform substantially Executive’s duties with the Company (other than any such failures resulting from incapacity due to physical or mental illness), (II) observe all material obligations and conditions to be performed and observed by Executive under this Agreement, or (III) perform his or her duties in accordance, in all material respects, with the policies and directions established from time to time by the Chief Executive Officer, the Board or a duly authorized Board committee (any such failure, a (“Performance Failure”), and to correct such Performance Failure within not more than fifteen (15) days following written notice from the Chief Executive Officer or the Board delivered to Executive, which notice specifically identifies the manner in which the Chief Executive Officer or the Board believes that Executive has not substantially performed; or |
3. | having corrected (or the Company having waived the correction of) a Performance Failure, the occurrence of any subsequent Performance Failure (whether of the same or different type or nature). |
c) | “Change in Control” has the meaning given such term in the Company’s 2012 Amended and Restated Stock Plan (or a successor plan thereto) as in effect on the Effective Date. |
d) | “Client” shall mean the customers or clients of the Company or any Affiliated Company and shall include any and all individuals, organizations, or business entities that: (a) were actual customers or clients of the Company or any Affiliated Company during Executive’s employment by the Company or any Affiliated Company, or which were prospective customers of the Company or any Affiliated Company during Executive’s employment; and (b) with which or whom Executive had contact or about whom Executive obtained Confidential Information during the Term from the Company or any Affiliated Company. For purposes of this definition, an individual, organization, or business entity is a “prospective” client or customer of the Company or any Affiliated Company if the Executive or any other the Company or any Affiliated Company employee, officer or manager took steps to obtain or secure the business of the individual, organization, or business entity. |
e) | “Code” means the Internal Revenue Code of 1986, as amended. |
f) | “Confidential Information” shall mean all trade secrets, proprietary data, and other confidential information of or relating to any Affiliated Company, including without limitation financial information, information relating to business operations, services, promotional practices, and relationships with customers, suppliers, employees, independent contractors, or other parties, and any information which any Affiliated Company is obligated to treat as confidential pursuant to any course of dealing or any agreement to which it is a party or otherwise bound, provided that Confidential Information shall not include information that is or becomes available to the general public and did not become so available through any breach of this Agreement by Executive or Executive’s breach of a duty owed to the Company. |
g) | “Executive” shall have the meaning provided in Code Section 162(m)(3) and related guidance. |
h) | “Disability” or “Disabled” means, as determined in the sole discretion of the Company, that Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one (1) year. |
i) | “Good Reason” means Executive's termination of employment within ninety (90) days following the expiration of any cure period (discussed below) following the occurrence, without Executive's consent, of one or more of the following: |
i. | A material reduction in Executive's base compensation (except where there is a reduction applicable to all similarly situated executive officers generally); provided, that a reduction of less than ten percent (10%) will not be considered a material reduction in base compensation; or |
ii. | A material breach by the Company of a material provision of this Agreement. |
j) | “Section 409A” means Code Section 409A, and the final regulations and any guidance promulgated thereunder or any state law equivalent. |
k) | “Solicit” shall mean any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, inviting, advising, persuading, encouraging or requesting any person or entity, in any manner, to take or refrain from taking any action; provided, however, that the term “Solicit” shall not include general advertisements by an entity with which Executive is associated or other communications in any media not targeted specifically at any specific individual described in Section 5(b) or 5(c). |
9. | Successors. |
a) | Company Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this Section 9(a) or which becomes bound by the terms of this Agreement by operation of law. |
b) | Executive's Successors. The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. |
10. | Arbitration. |
a) | Arbitration. Subject to the right of the Company and the Affiliated Companies to exercise the remedies described in Section 5 of this Agreement or the right of Executive to challenge, defend or contest same in any court having jurisdiction, the Parties agree that any and all controversies, claims, or disputes between Executive and the Company or any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise arising out of, relating to, or resulting from Executive's employment with the Company or termination thereof, including any breach of this Agreement, will be subject to binding arbitration under the then applicable Commercial Arbitration Rules of the American Arbitration Association. Claims subject to arbitration include but are not limited to claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Sarbanes Oxley Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Ohio Employment Practices Law, the Ohio Whistleblower Protection Law, the Ohio Equal Pay Law, and the Ohio State Wage Payment and Work Hour Laws, claims for breach of contract (express or implied), claims for violation of public policy or wrongful termination, and any other statutory or common law claim. |
b) | Procedure. In any such arbitration, the arbitrators shall consist of a panel of three arbitrators, which shall act by majority vote and which shall consist of one arbitrator selected by each party subject to the arbitration and a third arbitrator selected by the two arbitrators so selected, who shall be either a certified public accountant or an attorney at law licensed to practice in the State of Ohio and who shall act as chairman of the arbitration panel; provided that, if one party selects |
c) | Remedy. Except as otherwise provided by law or this Agreement, arbitration shall be the sole, exclusive, and final remedy for any dispute between Executive and the Company. Accordingly, except as otherwise provided by law or this Agreement, Executive and the Company hereby waive the right to seek remedies for any such disputes in court, including the right to a jury trial. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted. |
d) | Administrative Relief. Executive is not prohibited from pursuing an administrative claim with a local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, including, but not limited to, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National Labor Relations Board, or the Workers' Compensation Board. However, Executive may not pursue court action regarding any such claim, except as permitted by law. |
11. | Voluntary Nature of Agreement. Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that EXECUTIVE IS WAIVING EXECUTIVE’S RIGHT TO A JURY TRIAL. Finally, Executive Agrees that Executive has been provided an opportunity to seek the advice of an attorney of the Executive’s choice before signing this Agreement. |
12. | Notice. |
a) | General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices will be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its chief legal officer. |
b) | Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 12(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts |
13. | Miscellaneous Provisions. |
a) | No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source. |
b) | Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time. |
c) | Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement. |
d) | Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior or contemporaneous representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof. Executive acknowledges and agrees that this Agreement encompasses all the rights of Executive to any severance payments and/or benefits based on the termination of Executive's employment and Executive hereby agrees that he or she has no such rights except as stated herein. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement. |
e) | Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Ohio without giving effect to provisions governing the choice of law. |
f) | Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect. |
g) | Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes, as determined in the Company's reasonable judgment. |
h) | Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. |
i) | Compliance with Applicable Law. The benefits paid and provided under this Agreement are subject to and conditioned upon compliance with applicable requirements of federal, state and local law and regulation, whether currently in effect or subsequently enacted, including without limitation, 12 U.S.C. Section 1828(k) and the regulations promulgated thereunder in 12 C.F.R. |
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: | 5/7/2018 | /s/ Archie M. Brown, Jr. | |
Archie M. Brown, Jr. President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of First Financial Bancorp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | 5/7/2018 | /s/ James M. Anderson | |
James M. Anderson Executive Vice President and Chief Financial Officer |
(1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James M. Anderson |
James M. Anderson Executive Vice President and Chief Financial Officer |
May 7, 2018 |
(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/ Archie M. Brown, Jr. |
Archie M. Brown, Jr. President and Chief Executive Officer |
May 7, 2018 |
Document and Entity Information Document - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
May 04, 2018 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
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 | 97,810,841 |
CONSOLIDATED BALANCE SHEETS CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | $ 1,370,844 | $ 1,348,227 |
Held-to-maturity Securities, Fair Value | $ 623,967 | $ 653,101 |
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 | 6,516,908 | 6,661,644 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 30,506 | $ 24,414 |
Other comprehensive (loss) income, net of tax | ||
Unrealized gains (losses) on investment securities arising during the period | (9,830) | 1,487 |
Change in retirement obligation | 323 | 189 |
Unrealized gain (loss) on derivatives | 156 | 128 |
Other comprehensive income (loss) | (9,351) | 1,804 |
Comprehensive income | $ 21,155 | $ 26,218 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Common Stock, Dividends, Per Share, Declared | $ 0.19 | $ 0.17 |
BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The Consolidated Financial Statements of First Financial Bancorp., a financial holding company principally serving Ohio, Indiana and Kentucky, include the accounts and operations of First Financial and its wholly-owned subsidiary, First Financial Bank. 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. |
RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Recently Adopted and Issued Accounting Standards [Abstract] | |
Recently Adopted and Issued Accounting Standards Disclosure [Text Block] | RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS In May 2014, the FASB issued an update (ASU 2014-09, Revenue from Contracts with Customers) which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under the revised standard, an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. Certain of the ASU’s provisions also apply to transfers of nonfinancial assets, including in-substance nonfinancial assets that are not an output of an entity’s ordinary activities, such as sales of property, plant, and equipment; real estate; or intangible assets. The ASU also requires significantly expanded disclosures about revenue recognition. For further detail, see Note 13 – Revenue Recognition. In January 2016, the FASB issued an update (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) which requires 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. This update also requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The guidance in this ASU became effective in the first quarter of 2018 and did not have a material impact on the Consolidated Financial Statements. In accordance with the guidance, the Company measured the fair value of its financial instruments as of March 31, 2018 using an exit price notion. For further detail, see Note 15 – Fair Value Disclosures. In February 2016, the FASB issued an update (ASU 2016-02, Leases) which requires 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. Given operating leases outstanding as of March 31, 2018, First Financial does not expect this ASU to have a material impact on the income statement, but does anticipate an increase in the Company's assets and liabilities. Decisions to repurchase, modify or renew leases prior to the implementation date will impact this level of materiality. In June 2016, the FASB issued an update (ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments) which significantly changes how entities are required to measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. This update will replace the current incurred loss approach for estimating credit losses with an expected loss model for instruments measured at amortized cost, including loans and leases. Expected credit losses are required to be based on amortized cost and reflect losses expected over the remaining contractual life of the asset. Management is expected to consider any available information relevant to assessing the collectibility of contractual cash flows, such as information about past events, current conditions, voluntary prepayments and reasonable and supportable forecasts, when developing expected credit loss estimates. In addition to the new framework for calculating the ALLL, this update requires allowances for available-for-sale debt securities rather than a reduction of the security's carrying amount under the current other-than-temporary impairment model. This update also simplifies the accounting model for purchased credit-impaired debt securities and loans and will require new and updated footnote disclosures. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for all entities for interim and annual reporting periods beginning after December 15, 2018. First Financial has formed an internal committee that is currently evaluating the impact of this update on its Consolidated Financial Statements. In August 2016, the FASB issued an update (ASU 2016-15 Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments) which may change how an entity classifies certain cash receipts and cash payments on its statement of cash flows to reduce diversity in practice. The update also provides guidance on when an entity should separate cash flows and classify them into more than one class and when an entity should classify the aggregate of those cash flows into a single class based on the predominance principle. The guidance in this ASU became effective in the first quarter of 2018 and did not have a material impact on the Consolidated Financial Statements. In January 2017, the FASB issued an update (ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment) which simplifies the subsequent measurement of goodwill by eliminating Step 2 from goodwill impairment testing. This update requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with any loss recognized not to exceed the total amount of goodwill allocated to that reporting unit. Additionally, the update requires consideration of the income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable, and eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. First Financial early adopted the provisions set forth in this update in 2017. Adoption of this update did not have a material impact on First Financial's Consolidated Financial Statements. In March 2017, the FASB issued an update (ASU 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of the Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost) which requires disaggregation of the service cost component from the other components of net benefit cost. This update also provides explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. The guidance in this ASU became effective in the first quarter of 2018 and did not have a material impact on the Consolidated Financial Statements. In March 2017, the FASB issued an update (ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities) which amends the amortization period for certain purchased callable debt securities held at a premium and shortens the amortization period for the premium to the earliest call date rather than as an adjustment of yield over the contractual life of the instrument. This update more closely aligns the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities, as in most cases, market participants price securities to the call date that produces the worst yield when the coupon is above current market rates (that is, the security is trading at a premium) and price securities to maturity when the coupon is below market rates (that is, the security is trading at a discount) in anticipation that the borrower will act in its economic best interest in an attempt to more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument. The guidance in this ASU will become effective for 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 May 2017, the FASB issued an update (ASU 2017-09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting), which provides clarity and reduces the diversity in practice, cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718 clarifying that an entity will not apply modification accounting to a share-based payment award if the award's fair value (or calculated value or intrinsic value), vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. The guidance in this ASU became effective in the first quarter of 2018 and did not have a material impact on the Consolidated Financial Statements. In August 2017, the FASB issued an update (ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities) to better align financial reporting for hedging activities with the economic objectives of those activities. This update aligns certain aspects of hedge documentation, effectiveness assessments, accounting and disclosures, and expands permissible hedge strategies as of the date of adoption. The guidance in this ASU will become effective for reporting periods beginning after December 15, 2018, with early adoption permitted, and will require a modified retrospective transition method with recognition of the cumulative effect of the change on the opening balance of each affected component of equity. Amended disclosures will be required prospectively. First Financial is currently evaluating the impact of this update on its Consolidated Financial Statements. In February 2018, the FASB issued an update (ASU 2018-02, Income statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminated the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. The amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, and the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not effected. The amendments in this update also require certain disclosures about stranded tax effects. The guidance in this ASU will become effective for reporting periods beginning after December 15, 2018, with early adoption permitted, and will be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. First Financial early adopted the provisions set forth in this update in the first quarter of 2018, and as a result, reclassified $4.9 million from accumulated other comprehensive income to retained earnings. There were no other income tax effects related to the Act that were reclassified as a result of the adoption of the accounting standard.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS For the three months ended March 31, 2018, there were no sales of available-for-sale securities. For the three months ended March 31, 2017, proceeds on the sale of $22.2 million of available-for-sale securities resulted in gains of $0.5 million. The following is a summary of held-to-maturity and available-for-sale investment securities as of March 31, 2018:
The following is a summary of held-to-maturity and available-for-sale investment securities as of December 31, 2017:
The following table provides a summary of investment securities by contractual maturity as of March 31, 2018, except for residential and commercial mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which are shown as single totals due to the unpredictability of the timing in principal repayments.
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, 2018 or December 31, 2017. As of March 31, 2018, the Company's investment securities portfolio consisted of 774 securities, of which 359 were in an unrealized loss position. As of December 31, 2017, the Company's investment securities portfolio consisted of 775 securities, of which 237 were in an unrealized loss position. 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:
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS AND LEASES | LOANS AND LEASES First Financial offers clients a variety of commercial and consumer loan and lease products with distinct interest rates and payment terms. 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. Lending activities are primarily concentrated in states where the Bank operates banking centers (Ohio, Indiana and Kentucky). First Financial also offers two nationwide 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 accounts primarily to insurance agents and brokers that are secured by commissions and cash collateral. 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 highly questionable and improbable, on the basis of currently existing facts, conditions and values. 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 previously described are derived from standard regulatory rating definitions and 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. Purchased impaired loans are not classified as nonperforming assets as the loans are considered to be performing under FASB ASC Topic 310-30. Commercial and consumer credit exposure by risk attribute was as follows:
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:
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. When a loan is classified as nonaccrual, the accrual of interest income is discontinued and previously accrued but unpaid interest is reversed. Any payments received while a loan is on nonaccrual status are applied as a reduction to the carrying value of the loan. A loan classified as nonaccrual 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 204 TDRs totaling $21.0 million at March 31, 2018, including $14.9 million on accrual status and $6.0 million classified as nonaccrual. First Financial had an insignificant amount of commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs, and the ALLL included reserves of $2.0 million related to TDRs at March 31, 2018. For the three months ended March 31, 2018, First Financial charged off $0.1 million for the portion of TDRs determined to be uncollectible. Additionally, as of March 31, 2018, approximately $13.3 million of accruing TDRs have been performing in accordance with the restructured terms for more than one year. First Financial had 214 TDRs totaling $23.9 million at December 31, 2017, including $17.5 million of loans on accrual status and $6.4 million classified as nonaccrual. First Financial had an insignificant amount of commitments outstanding to lend additional funds to borrowers whose loan terms had been modified through TDRs. At December 31, 2017, the ALLL included reserves of $1.3 million related to TDRs, and $17.2 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, 2018 and 2017:
The following table provides information on how TDRs were modified during the three months ended March 31, 2018 and 2017:
(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. There were no TDRs for which there was a payment default during the period that occurred within twelve months of the loan modification for the three months ended March 31, 2018 or March 31, 2017. 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:
(1) Nonaccrual loans include nonaccrual TDRs of $6.0 million and $6.4 million as of March 31, 2018 and December 31, 2017, respectively.
First Financial individually reviews all impaired commercial loan relationships, as well as consumer loan TDRs, greater than $250,000, to determine if a specific allowance is necessary based on the borrower’s overall financial condition, 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:
First Financial's average impaired loans by class and interest income recognized by class was as follows:
OREO. OREO consists 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:
FDIC indemnification asset. The FDIC indemnification asset results from the loss sharing agreements entered into in conjunction with First Financial's FDIC-assisted transactions, and represents expected reimbursements from the FDIC for losses on covered assets. |
ALLOWANCE FOR LOAN AND LEASE LOSSES |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN AND LEASE LOSSES | ALLOWANCE FOR LOAN AND LEASE LOSSES Loans and leases. 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 ALLL 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. The ALLL 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. Changes in the allowance for loan and lease losses by loan category were as follows:
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Mar. 31, 2018 | |
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 had goodwill of $204.1 million as of March 31, 2018 and December 31, 2017, respectively, and recorded no additional goodwill during 2018 or 2017. Goodwill is evaluated 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, 2017 and no impairment was indicated. As of March 31, 2018, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value. |
BORROWINGS |
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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 the Bank and the client. To secure its liability to the client, the Bank is authorized to sell or repurchase U.S. Treasury, government agency and mortgage-backed securities. First Financial had $601.6 million in short-term borrowings with the FHLB at March 31, 2018 and $742.3 million as of December 31, 2017. These short-term borrowings are used to manage 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 29, 2018. 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 common stock and the payment of dividends to shareholders. As of March 31, 2018 and December 31, 2017, 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, 2018 and December 31, 2017. In 2015, First Financial issued $120.0 million of subordinated notes, which 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 $50.2 million and $0.2 million of FHLB long-term advances as of March 31, 2018 and December 31, 2017, respectively. The $50.0 million of additional FHLB long-term advance matures in 2020 with a fixed rate of 2.63%. 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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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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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:
(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 |
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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. First Financial may also utilize interest rate swaps to manage the interest rate risk profile of the Company. Interest rate payments are exchanged with counterparties based on the notional amount established in the interest rate agreement. 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 market value credit risk through counterparty credit policies, which 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, 2018, the Company had a total counterparty notional amount outstanding of $908.6 million, spread among fourteen counterparties, with an outstanding asset from these contracts of $10.4 million. At December 31, 2017, the Company had a total counterparty notional amount outstanding of $837.5 million, spread among thirteen counterparties, with an outstanding liability from these contracts of $1.3 million. 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 classification and amounts recognized in the Consolidated Balance Sheets for client derivatives:
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 client derivative liabilities recognized in the Consolidated Balance Sheets:
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, 2018:
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 $95.6 million as of March 31, 2018 and $95.9 million as of December 31, 2017. The fair value of these agreements is recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets. 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 loans held for sale. At March 31, 2018, the notional amount of the IRLCs was $13.0 million and the notional amount of forward commitments was $10.1 million. As of December 31, 2017, the notional amount of IRLCs was $12.3 million and the notional amount of forward commitments was $15.4 million. The fair value of these agreements was recorded on the Consolidated Balance Sheets in Accrued interest and other assets and was $0.1 million at both March 31, 2018 and December 31, 2017.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES First Financial offers a variety of financial instruments including standby letters of credit and outstanding commitments to extend credit to assist clients in meeting their requirement for liquidity and credit enhancement. 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 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 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 $2.0 billion and $2.1 billion at March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018, loan commitments with a fixed interest rate totaled $75.6 million while commitments with variable interest rates totaled $2.0 billion. At December 31, 2017, loan commitments with a fixed interest rate totaled $44.3 million while commitments with variable interest rates totaled $2.0 billion. The fixed rate loan commitments have interest rates ranging from 0.00% to 21.00% and maturities ranging from less than 1 year to 30 years. 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 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 aggregating $25.0 million and $25.3 million at March 31, 2018 and December 31, 2017, respectively. Management conducts regular reviews of these instruments on an individual client basis. Investments in affordable housing tax credits. First Financial has made investments in certain qualified affordable housing tax credits. These credits 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 the unavailability or recapture of the tax credits and other tax benefits. Investments in affordable housing projects are accounted for under the proportional amortization method and are included in Accrued interest and other assets in the Consolidated Balance Sheets. First Financial's affordable housing commitments totaled $33.2 million and $35.9 million as of March 31, 2018 and December 31, 2017, respectively. The Company recognized tax credits of $1.1 million and $0.8 million for the three months ended March 31, 2018 and 2017, respectively. The Company recognized amortization expense which was included in income tax expense of $1.3 million and $1.0 million for the three months ended March 31, 2018 and 2017, respectively. First Financial had no affordable housing contingent commitments as of March 31, 2018 or December 31, 2017. Investments in historic tax credits. First Financial has noncontrolling financial investments in private investment funds and partnerships which are not consolidated. These investments may generate a return through the realization of federal and state income tax credits, as well as other tax benefits, such as tax deductions from net operating losses of the investments over a period of time. Investments in historic tax credits are accounted for under the equity method of accounting and are carried in Accrued interest and other assets on the Consolidated Balance Sheets. The Company’s recorded investment in these entities was approximately $2.9 million at March 31, 2018 and $3.0 million at December 31, 2017. The maximum exposure to loss related to these investments was $2.9 million at March 31, 2018 and $3.0 million at December 31, 2017, representing the Company’s investment balance and its unfunded commitments to invest additional amounts. Investments in historic tax credits resulted in $0.1 million of tax credits for each of the three months ended March 31, 2018 and 2017, respectively. |
INCOME TAXES |
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Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the first quarter 2018, income tax expense was $7.7 million, resulting in an effective tax rate of 20.1% compared with income tax expense of $10.5 million and an effective tax rate of 30.0% for the comparable period in 2017. ASU 2016-09, Compensation-Stock Compensation Improvements to Employee Share-Based Payment Accounting, requires the recognition of the income tax effects of share-based awards through the income statement as a component of income tax expense. First Financial recorded a $0.4 million and $1.1 million tax benefit as a result of share awards vesting and exercised during the first quarters of 2018 and 2017, respectively. On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. As a result, First Financial valued its deferred tax assets and liabilities as well as its investments in affordable housing projects utilizing a 21% federal rate during the first quarter of 2018 compared to a 35% rate in the first quarter of 2017. At both March 31, 2018 and December 31, 2017, First Financial had $2.9 million of unrecognized tax benefits, as determined in FASB ASC Topic 740-10, Income Taxes that, if recognized, would favorably affect the effective income tax rate in future periods. The unrecognized tax benefits relate to state income tax exposures from taking tax positions where the Company believes it is likely that, upon examination, a state may take a position contrary to the position taken by the Company. The Company believes that resolution regarding our uncertain tax positions is reasonably possible within the next twelve months and could result in full, partial or no recognition of the benefit. First Financial recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. At March 31, 2018 and December 31, 2017, the Company had no interest or penalties recorded. First Financial and its subsidiaries are subject to U.S. federal income tax as well as state and local income tax in several jurisdictions. Tax years prior to 2014 have been closed and are no longer subject to U.S. federal income tax examinations. Tax years 2014 through 2017 remain open to examination by the federal taxing authority. |
EMPLOYEE BENEFIT PLANS |
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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 fixed income and publicly traded equity 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, 2018, or the year ended December 31, 2017, and does not expect to make cash contributions to the plan through the remainder of 2018. As a result of the plan’s actuarial projections, First Financial recorded income of 0.2 million and 0.3 million for the three months ended March 31, 2018 and 2017, 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:
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EARNINGS PER COMMON SHARE |
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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:
Warrants to purchase 101,808 and 112,233 shares of the Company's common stock were outstanding as of March 31, 2018 and 2017, respectively. These warrants, each representing the right to purchase one share of common stock, no par value per share, have an exercise price of $12.11 and expire on December 23, 2018. |
REVENUE RECOGNITION REVENUE RECOGNITION |
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Mar. 31, 2018 | ||||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the guidance set forth in this update while prior period amounts continue to be reported in accordance with legacy GAAP. Adoption of this update did not result in a change to the accounting for any of the in-scope revenue streams. As such, no cumulative effect adjustment to retained earnings was recorded. The majority of the Company's revenues come from interest income and other sources, including loans, leases, securities and derivatives, that are outside the scope of this guidance. The Company's services that fall within the scope of this ASU are presented within Noninterest income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of this guidance include service charges on deposits, wealth management fees, bankcard income, investment brokerage fees and the sale of OREO. Service charges on deposit accounts. The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Similarly, overdraft fees are recognized at the point in time that the overdraft occurs as this corresponds with the Company's performance obligation. Service charges on deposit accounts are withdrawn from the customer's account balance. Trust and wealth management fees. Trust and wealth management fees are primarily asset-based, but can also include flat fees based upon a specific service rendered, such as tax preparation services. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fees. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and wealth management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized as incurred. Bankcard income. The Company earns interchange fees from cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized, concurrent with the transaction processing services provided to the cardholder. Interchange income is presented on the Consolidated Statements of Income net of expenses. Gross interchange income for the first quarter of 2018 was $5.4 million, which was partially offset by $2.0 million of expenses within Noninterest income. Gains/losses on sale of OREO. The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of the executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectibility of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant component is present. Other. Other noninterest income consists of other recurring revenue streams such as transaction fees, safe deposit rental income, insurance commissions, merchant referral income and brokerage revenue. Transaction fees primarily include check printing sales commissions, collection fees, and wire transfer fees which arise from in-branch transactions. Safe deposit rental income arises from services charged to the customer on an annual basis and recognized upon receipt of payment. Insurance commissions are agent commissions earned by the Company and earned upon the effective date of the bound coverage. Merchant referral income is associated with a program whereby the Company receives a share of processing revenue that is generated from clients that were referred by First Financial to the service provider. Revenue is recognized at the point in time when the transaction occurs. Brokerage revenue represents fees from investment brokerage services provided to customers by a third party provider. The Company receives commissions from the third-party service provider on a monthly basis based upon customer activity for the month. The fees are recognized monthly and a receivable is recorded until commissions are paid the following month. Because the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, investment brokerage fees are presented net of related costs. |
FAIR VALUE DISCLOSURES |
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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 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:
N/A = Not applicable The methods utilized to estimate the fair value of financial instruments at December 31, 2017 did not necessarily represent an exit price. In accordance with our adoption of ASU 2016-01 in 2018, the methods utilized to measure the fair value of financial instruments at March 31, 2018 represent an approximation of exit price, however, an actual exit price may differ. The following methods, assumptions and valuation techniques were used by First Financial to measure different financial assets and liabilities at fair value on a recurring or nonrecurring basis. 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 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 value 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. Impaired loans. The fair value of 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 on 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 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. OREO. Assets acquired through loan foreclosure are recorded at fair value less costs to sell, with any difference between the fair value of the property and the carrying value of the loan recorded as a charge-off. If the fair value is higher than the carrying amount of the loan, the excess is recognized first as a recovery and then as noninterest income. Subsequent declines in value are reported as adjustments to the carrying amount and are recorded in noninterest expense. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is subject to fair value adjustments when the carrying value differs from the fair value, less estimated selling costs. Fair value is based on recent real estate appraisals and is updated at least annually. The Company classifies OREO in level 3 of 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, which 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 financial assets and liabilities measured at fair value on a recurring basis in the consolidated financial statements were as follows:
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 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.
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BUSINESS COMBINATION Business Combination with MainSource Financial Group |
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Mar. 31, 2018 | ||||||||||||||||
Subsequent Events [Abstract] | ||||||||||||||||
Subsequent Event, Pro Forma Business Combinations or Disposals [Text Block] | On April 1, 2018, the Company completed its acquisition of MainSource Financial Group, Inc. and its banking subsidiary, MainSource Bank. Under the terms of the merger agreement, shareholders of MainSource received 1.3875 common shares of First Financial common stock for each share of MainSource common stock. Including outstanding options and warrants on MainSource common stock, total purchase consideration was $1.0 billion. The final fair values of assets and liabilities are not yet available. As of March 31, 2018, MainSource had total assets of $4.6 billion, gross loans of $3.0 billion and total deposits of $3.4 billion. The Company anticipates recording goodwill and core deposit intangibles with this acquisition. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Mar. 31, 2018 | |
Off-Balance-Sheet Credit Exposure, Policy [Policy Text Block] | 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 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. |
Basis of Presentation Policy | The Consolidated Financial Statements of First Financial Bancorp., a financial holding company principally serving Ohio, Indiana and Kentucky, include the accounts and operations of First Financial and its wholly-owned subsidiary, First Financial Bank. 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. |
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. When a loan is classified as nonaccrual, the accrual of interest income is discontinued and previously accrued but unpaid interest is reversed. Any payments received while a loan is on nonaccrual status are applied as a reduction to the carrying value of the loan. A loan classified as nonaccrual 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. |
Impaired Financing Receivable, Policy | First Financial individually reviews all impaired commercial loan relationships, as well as consumer loan TDRs, greater than $250,000, to determine if a specific allowance is necessary based on the borrower’s overall financial condition, 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 classified as nonaccrual and loans modified as TDRs are considered impaired. |
Loans and Leases Receivable, Real Estate Acquired Through Foreclosure, Policy | OREO consists 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 | 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 ALLL 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. |
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 evaluated 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 | Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships. Core deposit intangibles are recorded at fair value on the date of acquisition and are then amortized on an accelerated basis over their estimated useful lives. |
Income Tax, Policy | The unrecognized tax benefits relate to state income tax exposures from taking tax positions where the Company believes it is likely that, upon examination, a state may take a position contrary to the position taken by the Company. |
Commitments and Contingencies, Policy | First Financial offers a variety of financial instruments including standby letters of credit and outstanding commitments to extend credit to assist clients in meeting their requirement for liquidity and credit enhancement. GAAP does not require these financial instruments to be recorded in the Consolidated Financial Statements. |
Fair Value Measurement, Policy [Policy Text Block] | 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. |
Fair Value of Financial Instruments, Policy | The following methods, assumptions and valuation techniques were used by First Financial to measure different financial assets and liabilities at fair value on a recurring or nonrecurring basis. 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 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 value 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. Impaired loans. The fair value of 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 on 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 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. OREO. Assets acquired through loan foreclosure are recorded at fair value less costs to sell, with any difference between the fair value of the property and the carrying value of the loan recorded as a charge-off. If the fair value is higher than the carrying amount of the loan, the excess is recognized first as a recovery and then as noninterest income. Subsequent declines in value are reported as adjustments to the carrying amount and are recorded in noninterest expense. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is subject to fair value adjustments when the carrying value differs from the fair value, less estimated selling costs. Fair value is based on recent real estate appraisals and is updated at least annually. The Company classifies OREO in level 3 of the fair value hierarchy. |
Loan Commitments, Policy [Policy Text Block] | 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. |
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 loans held for sale. |
Credit Risk | |
Derivatives, Methods of Accounting, Hedging Derivatives, Policy | First Financial manages market value credit risk through counterparty credit policies, which 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. |
INVESTMENTS (Tables) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2018:
The following is a summary of held-to-maturity and available-for-sale investment securities as of December 31, 2017:
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Summary of Investment Securities by Estimated Maturity | The following table provides a summary of investment securities by contractual maturity as of March 31, 2018, except for residential and commercial mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which are shown as single totals due to the unpredictability of the timing in principal repayments.
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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:
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LOANS AND LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Consumer Credit Exposure by Risk Attribute | Commercial and consumer credit exposure by risk attribute was as follows:
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Loan Delinquency, including Nonaccrual Loans | Loan delinquency, including loans classified as nonaccrual, was as follows:
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Loans Restructured During Period | The following tables provide information on loan modifications classified as TDRs during the three months ended March 31, 2018 and 2017:
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Loans Restructured, Modifications | The following table provides information on how TDRs were modified during the three months ended March 31, 2018 and 2017:
(1) Includes covenant modifications and other concessions, or combination of concessions, that do not consist of interest rate adjustments, forbearance and maturity extensions |
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Nonaccrual, Restructured and Impaired Loans | The following table provides information on impaired loans, excluding purchased impaired loans:
(1) Nonaccrual loans include nonaccrual TDRs of $6.0 million and $6.4 million as of March 31, 2018 and December 31, 2017, respectively.
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Investment in Impaired Loans | First Financial's investment in impaired loans was as follows:
First Financial's average impaired loans by class and interest income recognized by class was as follows:
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Changes in Other Real Estate Owned | Changes in OREO were as follows:
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ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Losses by Classification | Changes in the allowance for loan and lease losses by loan category were as follows:
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BORROWINGS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-term Debt | The following is a summary of First Financial's long-term debt:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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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 periods ended March 31, 2018 and 2017, respectively:
(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, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Derivative Financial Instruments and Balances | The following table details the classification and amounts recognized in the Consolidated Balance Sheets for client derivatives:
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Disclosure by Type of Financial Instrument | The following table discloses the gross and net amounts of client derivative liabilities recognized in the Consolidated Balance Sheets:
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Derivative Financial Instruments, Average Remaining Maturity and the Weighted-Average Interest Rates being Paid and Received | The following table details the derivative financial instruments, the average remaining maturities and the weighted-average interest rates being paid and received by First Financial at March 31, 2018:
|
EMPLOYEE BENEFIT PLANS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [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:
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EARNINGS PER COMMON SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share:
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FAIR VALUE DISCLOSURES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Values of Financial Instruments | The estimated fair values of First Financial’s financial instruments not measured at fair value on a recurring or nonrecurring basis in the consolidated financial statements were as follows:
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Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The financial assets and liabilities measured at fair value on a recurring basis in the consolidated financial statements were as follows:
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Summary of Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | The following table summarizes financial assets and liabilities measured at fair value on a nonrecurring basis.
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RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS - Additional Information (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Reclassification from AOCI, Current Period, Tax | $ 0 |
Retained earnings | |
Reclassification from AOCI, Current Period, Tax | $ 4,942 |
INVESTMENTS INVESTMENTS - Additional Information (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2017 |
|
Gain (Loss) on Investments [Line Items] | |||
NumberOfSecuritiesInSecurityPortfolio | 774 | 775 | |
NumberOfSecuritiesInUnrealizedLossPosition | 359 | 237 | |
Available-for-sale Securities, Gross Realized Gains (Losses), Sale Proceeds | $ 0.0 | $ 22.2 | |
Available-for-sale Securities, Gross Realized Gains | $ 0.5 |
LOANS AND LEASES - Additional Information (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Restructured Loans, Nonaccrual Status | $ 6,000,000.0 | $ 6,400,000 | ||
Write-downs | 123,000 | $ 109,000 | ||
Gain (loss) on sale of other real estate owned | (77,000) | (24,000) | ||
Real Estate Acquired Through Foreclosure | 1,065,000 | 5,300,000 | 2,781,000 | $ 6,284,000 |
FDIC indemnification asset | 0 | $ 1,900,000 | ||
Commercial | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum | 250,000 | |||
Residential real estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum | 250,000 | |||
Write-downs | $ 26,000 | $ 63,000 |
LOANS AND LEASES - Changes in Other Real Estate Owned (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
FDIC indemnification asset | $ 0 | $ 1,900 | |
Balance at beginning of period | 2,781 | $ 6,284 | |
Additions | 629 | 287 | |
Disposals | (2,222) | (1,162) | |
Write-downs | 123 | 109 | |
Balance at end of period | 1,065 | 5,300 | |
Commercial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Additions | 170 | 122 | |
Disposals | (2,104) | (925) | |
Write-downs | 97 | 46 | |
Residential real estate | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Additions | 459 | 165 | |
Disposals | (118) | (237) | |
Write-downs | $ 26 | $ 63 |
GOODWILL AND OTHER INTANGIBLE ASSETS--Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 204,100 | $ 204,084 | |
Intangible Assets, Net (Excluding Goodwill) | 5,000 | 5,300 | |
Finite-Lived Core Deposits, Gross | 3,100 | $ 3,300 | |
Finite-Lived Intangible Assets, Amortization Expense | $ 300 | $ 300 | |
Core Deposits [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets amortization method | accelerated basis | ||
Estimated weighted average life (in years) | 3 years 7 months 6 days |
BORROWINGS Borrowings - - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Debt Disclosure [Abstract] | ||
Federal Home Loan Bank short-term borrowings | $ 601,600 | $ 742,300 |
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% | |
Advances from Federal Home Loan Banks | $ 50,238 | $ 241 |
Long-term Federal Home Loan Bank Advances, Noncurrent | $ 50,000 | |
Federal Home Loan Bank | 2.63% | 1.09% |
BORROWINGS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Amount | ||
Subordinated debt | $ 120,000 | $ 120,000 |
FHLB long-term advances | 50,238 | 241 |
Capital loan with municipality | 775 | 775 |
Total long-term debt | $ 169,695 | $ 119,654 |
Average Rate [Abstract] | ||
Debt, Weighted Average Interest Rate | 5.13% | 5.13% |
Federal Home Loan Bank | 2.63% | 1.09% |
Weighted average rate on other long-term debt | 0.00% | 0.00% |
Total long-term debt | 4.40% | 5.14% |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ (1,318) | $ (1,362) |
ACCUMULATED OTHER COMPREHENSIVE INCOME AMOUNT RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Other Accumulated Comprehensive income reclassified from AOCI [Line Items] | ||
Net gains (losses) on sales of investment securities | $ 0 | $ 516 |
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 103 | 103 |
Defined Benefit Plan, Amortization of Gain (Loss) | (522) | (438) |
Other Comprehensive Income, Reclassification, Amortization of Defined Benefit Plans items, Pre-tax | (419) | (335) |
Total | $ (419) | $ 181 |
DERIVATIVES - Summary of Derivative Financial Instruments and Balances (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Inerest-bearing deposit liability | $ 1,816,432 | $ 1,674,080 |
Derivative Asset | 16,325 | 12,682 |
Estimate Fair Value Loss | (16,327) | (12,687) |
Other Credit Derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Inerest-bearing deposit liability | 10,100 | 15,400 |
Credit Risk Derivative Liabilities, at Fair Value | 100 | 71 |
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Inerest-bearing deposit liability | 908,216 | 837,040 |
Derivative Asset | 13,225 | 5,529 |
Estimate Fair Value Loss | (3,102) | (7,158) |
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Inerest-bearing deposit liability | 908,216 | 837,040 |
Derivative Asset | 3,100 | 7,153 |
Estimate Fair Value Loss | $ (13,225) | $ (5,529) |
DERIVATIVES DERIVATIVES - Disclosure by Type of Financial Instrument (Details) - Fair Value Hedges - Matched interest rate swaps - Accrued interest and other liabilities - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Gross amounts of recognized liabilities | $ 16,327 | $ 12,687 |
Derivative Liability, Fair Value, Gross Asset | 24,475 | 2,279 |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | $ 40,802 | $ 14,966 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 7,653 | $ 10,470 | |
Effective tax rate | 20.10% | 30.00% | |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 400 | $ 1,100 | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 21.00% | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 2,900 | $ 2,900 |
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Retirement Benefits [Abstract] | |||
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year | $ 0 | ||
Payment for Pension Benefits | 0 | $ 0 | |
Pension Cost (Reversal of Cost) | $ (156,000) | $ (319,000) |
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, 2018 |
Mar. 31, 2017 |
|
Retirement Benefits [Abstract] | ||
Service cost | $ 1,295 | $ 1,238 |
Interest cost | 590 | 589 |
Expected return on plan assets | (2,460) | (2,481) |
Amortization of prior service cost | (103) | (103) |
Defined Benefit Plan, Amortization of Gain (Loss) | 522 | 438 |
Net periodic benefit cost (income) | $ (156) | $ (319) |
EARNINGS PER COMMON SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Numerator for basic and diluted earnings per share -income available to common shareholders: | ||
Net income | $ 30,506 | $ 24,414 |
Denominator for basic earnings per share - weighted average shares | 61,654,686 | 61,398,414 |
Effect of dilutive securities - | ||
Employee stock awards | 464,254 | 674,589 |
Warrants | 61,804 | 67,381 |
Denominator for diluted earnings per share - adjusted weighted average shares | 62,180,744 | 62,140,384 |
Basic | $ 0.49 | $ 0.40 |
Diluted | $ 0.49 | $ 0.39 |
EARNINGS PER COMMON SHARE - Additional Information (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Earnings Per Share Disclosure [Line Items] | ||
Investment Warrants, Exercise Price | $ 12.11 | |
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 | 101,808 | 112,233 |
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 | 0 |
REVENUE RECOGNITION REVENUE RECOGNITION (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Revenue Recognition [Abstract] | |
Fees and Commissions, Credit and Debit Cards | $ 5.4 |
Credit card expense | $ 2.0 |
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, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value Measurements Using Level 1 | ||
Assets | ||
Impaired loans | $ 0 | $ 0 |
Other Real Estate Owned, Fair Value Disclosure | 0 | 0 |
Fair Value Measurements Using Level 2 | ||
Assets | ||
Impaired loans | 0 | 0 |
Other Real Estate Owned, Fair Value Disclosure | 0 | 0 |
Fair Value Measurements Using Level 3 | ||
Assets | ||
Impaired loans | 472 | 2,671 |
Other Real Estate Owned, Fair Value Disclosure | $ 215 | $ 1,086 |
BUSINESS COMBINATION Business Combination - Additional Information - Narrative (Details) - USD ($) $ in Thousands |
Apr. 01, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Business Acquisition, Number Of Shares Received by Acquiree | 1.3875 | ||
Business Combination, Consideration Transferred | $ 1,000,000 | ||
Assets | $ 8,898,429 | $ 8,896,923 | |
Loans and Leases Receivable, Net Amount | 6,047,641 | 5,959,162 | |
Deposits | 7,010,504 | $ 6,895,046 | |
MainSource [Member] | |||
Business Acquisition [Line Items] | |||
Assets | 4,600,000 | ||
Loans and Leases Receivable, Net Amount | 3,000,000 | ||
Deposits | $ 3,400,000 |
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