INVESTMENTS

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

For the three months ended March 31, 2024, there were $212.0 million of sales of AFS securities with $0.4 million gross realized gains and gross realized losses of $7.9 million. Additionally, during the first quarter of 2024, First Financial sold its remaining Class B Visa shares, which resulted in proceeds of $11.6 million, with gross realized gains of $2.2 million which is included in Net gain (loss) on sales of investment securities on the Consolidated Statements of Income. For the three months ended March 31, 2023, there were no of sales of AFS securities.

The following is a summary of HTM and AFS investment securities as of March 31, 2024:


	Held-to-maturity								Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss		Fair value		Amortized cost		Unrealized gain		Unrealized loss		Fair value
U.S. Treasuries	$	0	$	0	$	0	$	0	$	34,910	$	0	$	(3,998)	$	30,912
Securities of U.S. government agencies and corporations	0		0		0		0		82,145		0		(12,761)		69,384
Mortgage-backed securities - residential	0		0		0		0		839,802		763		(98,339)		742,226
Mortgage-backed securities - commercial	32,286		0		(4,739)		27,547		428,261		0		(35,560)		392,701
Collateralized mortgage obligations	7,797		0		(662)		7,135		429,785		88		(58,111)		371,762
Obligations of state and other political subdivisions	8,209		71		(270)		8,010		711,149		1,274		(119,217)		593,206
Asset-backed securities	0		0		0		0		561,117		9		(32,470)		528,656
Other securities	31,250		0		(3,092)		28,158		134,211		0		(12,391)		121,820
Total	$	79,542	$	71	$	(8,763)	$	70,850	$	3,221,380	$	2,134	$	(372,847)	$	2,850,667

The following is a summary of HTM and AFS investment securities as of December 31, 2023:


	Held-to-maturity								Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss		Fair value		Amortized cost		Unrealized gain		Unrealized loss		Fair value
U.S. Treasuries	$	0	$	0	$	0	$	0	$	34,904	$	0	$	(3,661)	$	31,243
Securities of U.S. government agencies and corporations	0		0		0		0		81,790		0		(12,010)		69,780
Mortgage-backed securities - residential	0		0		0		0		744,546		2,034		(85,532)		661,048
Mortgage-backed securities - commercial	32,926		0		(4,628)		28,298		543,134		7		(35,911)		507,230
Collateralized mortgage obligations	7,970		0		(539)		7,431		478,744		181		(60,277)		418,648
Obligations of state and other political subdivisions	8,175		130		(215)		8,090		765,223		1,614		(114,320)		652,517
Asset-backed securities	0		0		0		0		600,055		6		(39,813)		560,248
Other securities	31,250		0		(3,381)		27,869		134,208		0		(13,796)		120,412
Total	$	80,321	$	130	$	(8,763)	$	71,688	$	3,382,604	$	3,842	$	(365,320)	$	3,021,126

The following table provides a summary of investment securities by contractual maturity as of March 31, 2024, 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.


	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	$	0	$	0	$	10,537	$	10,514
Due after one year through five years	5,048		5,077		159,964		146,109
Due after five years through ten years	32,733		29,637		225,990		193,606
Due after ten years	1,678		1,454		565,924		465,093
Mortgage-backed securities - residential	0		0		839,802		742,226
Mortgage-backed securities - commercial	32,286		27,547		428,261		392,701
Collateralized mortgage obligations	7,797		7,135		429,785		371,762
Asset-backed securities	0		0		561,117		528,656
Total	$	79,542	$	70,850	$	3,221,380	$	2,850,667

Unrealized gains and losses on debt securities available-for-sale are generally due to fluctuations in current market yields relative to the yields of the securities at their amortized cost. All AFS securities with unrealized losses are reviewed quarterly to determine if any impairment exists, requiring a write-down to fair value. For AFS securities in an unrealized loss position, the Company first assesses whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale in an unrealized loss position that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis.

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 prior to maturity or recovery of the recorded value. Additionally, based on the Company's credit assessment of AFS securities in an unrealized loss position, the Company recorded no reserves for the periods ended March 31, 2024 or December 31, 2023.

As of March 31, 2024, the Company's investment securities portfolio consisted of 970 securities, of which 721 were in an unrealized loss position. As of December 31, 2023, the Company's investment securities portfolio consisted of 1,018 securities, of which 783 were in an unrealized loss position.

Primarily all of First Financial’s HTM debt securities are issued by U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. The remainder of the Company's HTM securities are non-agency collateralized mortgage obligations and obligations of state and other political subdivisions which currently carry ratings no lower than A+. There were no HTM securities on nonaccrual status or past due at March 31, 2024 or December 31, 2023.

Management measures expected credit losses on HTM debt securities on a collective basis by security type. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company did not record an ACL for these securities as of March 31, 2024 or December 31, 2023.

The following tables provide the fair value and gross unrealized losses of AFS investment securities in an unrealized loss position for which an ACL has not been recorded, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:


	March 31, 2024
	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	$	0	$	0	$	30,912	$	(3,998)	$	30,912	$	(3,998)
Securities of U.S. Government agencies and corporations	0		0		69,384		(12,761)		69,384		(12,761)
Mortgage-backed securities - residential	87,732		(787)		566,393		(97,552)		654,125		(98,339)
Mortgage-backed securities - commercial	0		0		373,651		(35,560)		373,651		(35,560)
Collateralized mortgage obligations	10,141		(18)		325,367		(58,093)		335,508		(58,111)
Obligations of state and other political subdivisions	31,689		(209)		510,000		(119,008)		541,689		(119,217)
Asset-backed securities	46,969		(204)		417,895		(32,266)		464,864		(32,470)
Other securities	0		0		116,820		(12,391)		116,820		(12,391)
Total	$	176,531	$	(1,218)	$	2,410,422	$	(371,629)	$	2,586,953	$	(372,847)


	December 31, 2023
	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	$	0	$	0	$	31,243	$	(3,661)	$	31,243	$	(3,661)
Securities of U.S. Government agencies and corporations	0		0		69,780		(12,010)		69,780		(12,010)
Mortgage-backed securities - residential	31,892		(483)		538,863		(85,049)		570,755		(85,532)
Mortgage-backed securities - commercial	1,772		(11)		495,451		(35,900)		497,223		(35,911)
Collateralized mortgage obligations	10,699		(157)		393,884		(60,120)		404,583		(60,277)
Obligations of state and other political subdivisions	15,155		(132)		562,740		(114,188)		577,895		(114,320)
Asset-backed securities	6,853		(15)		542,029		(39,798)		548,882		(39,813)
Other securities	14,605		(396)		105,807		(13,400)		120,412		(13,796)
Total	$	80,976	$	(1,194)	$	2,739,797	$	(364,126)	$	2,820,773	$	(365,320)

The following tables provide the fair value and gross unrealized losses of HTM investment securities in an unrealized loss position for which an ACL has not been recorded, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:


	March 31, 2024
	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	$	0	$	0	$	0	$	0	$	0	$	0
Securities of U.S. Government agencies and corporations	0		0		0		0		0		0
Mortgage-backed securities - residential	0		0		0		0		0		0
Mortgage-backed securities - commercial	0		0		27,547		(4,739)		27,547		(4,739)
Collateralized mortgage obligations	0		0		7,135		(662)		7,135		(662)
Obligations of state and other political subdivisions	2,912		(33)		2,580		(237)		5,492		(270)
Asset-backed securities	0		0		0		0		0		0
Other securities	0		0		28,158		(3,092)		28,158		(3,092)
Total	$	2,912	$	(33)	$	65,420	$	(8,730)	$	68,332	$	(8,763)


	December 31, 2023
	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	$	0	$	0	$	0	$	0	$	0	$	0
Securities of U.S. Government agencies and corporations	0		0		0		0		0		0
Mortgage-backed securities - residential	0		0		0		0		0		0
Mortgage-backed securities - commercial	0		0		28,298		(4,628)		28,298		(4,628)
Collateralized mortgage obligations	0		0		7,431		(539)		7,431		(539)
Obligations of state and other political subdivisions	1,128		(3)		1,488		(212)		2,616		(215)
Asset-backed securities	0		0		0		0		0		0
Other securities	0		0		27,869		(3,381)		27,869		(3,381)
Total	$	1,128	$	(3)	$	65,086	$	(8,760)	$	66,214	$	(8,763)

For further detail on the fair value of investment securities, see Note 17 – Fair Value Disclosures.