Stephanie L. Sullivan |
Senior Assistant Chief Accountant |
Office of Financial Services |
United States Securities and Exchange Commission |
Washington, D.C. 20549 |
In response to your letter dated August 9, 2016, below please find the restated comments of the Division of Corporation Finance (“Division”) followed by the corresponding responses of First Financial Corporation (“Corporation”). |
1. | We note your disclosure that you have three identified portfolio segments, which include commercial loans, residential loans and consumer loans. Your disclosure goes on to state that a characteristic of the commercial loan segment is that the loans are for business purchases. Your disclosure also states that the general component covers non-classified loans as well as non-impaired classified loans and is based on the historical loss experience over the most recent four years, adjusted for current factors. From your disclosure on page 61, it appears the collectively evaluated allowance for commercial loans was $10.3 million, or 51.8% of your total allowance as of December 31, 2015. Your disclosure on page 46 also states that commercial loans are generally well secured which mitigates the risk of loss and has contributed to the low historical loss rate, but that concentrations in commercial real estate along with the potential impact of rising interest rates to commercial real estate raises the risk of loss on commercial loans, and for these reasons, commercial loans have the highest adjustment to the historical loss rate. |
2. | We note your rollforward of the ASC 310-30 loans for the years ended December 31, 2015 and 2014, and the six months ended June 30, 2016 and 2015 in your Form 10-Q for the quarter ended June 30, 2016. Please tell us why you have not recognized any discount accretion for any of these periods presented. |
- | The Corporation is responsible for the adequacy and accuracy of the disclosure in the filing; |
- | Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
- | The Corporation may not assert staff comments as a defense in proceedings initiated by the Commission or any person under the federal securities laws of the United States. |