LOANS (covered) (Tables) (Covered Loans)

3 Months Ended

Mar. 31, 2014

Covered Loans

The following table reflects the carrying value of all covered loans:



	March 31, 2014						December 31, 2013
(Dollars in thousands)	Loans accounted for under FASB ASC Topic 310-30		Loans excluded from FASB ASC Topic 310-30		Total covered loans		Loans accounted for under FASB ASC Topic 310-30		Loans excluded from FASB ASC Topic 310-30		Total covered loans
Commercial	$	32,836	$	1,549	$	34,385	$	41,172	$	1,144	$	42,316
Real estate - construction	8,480		0		8,480		8,556		0		8,556
Real estate - commercial	228,666		6,131		234,797		263,146		5,487		268,633
Real estate - residential	77,768		0		77,768		80,733		0		80,733
Installment	4,534		572		5,106		5,073		568		5,641
Home equity	1,018		45,301		46,319		975		48,649		49,624
Other covered loans	0		2,550		2,550		0		2,370		2,370
Total covered loans	$	353,302	$	56,103	$	409,405	$	399,655	$	58,218	$	457,873

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



	Three months ended
	March 31,
(Dollars in thousands)	2014			2013
Balance at beginning of period	$	133,671		$	224,694
Reclassification (to)/from nonaccretable difference	13,216			7,751
Accretion	(9,717		)	(17,947		)
Other net activity ⁽¹⁾	(5,772		)	(5,828		)
Balance at end of period	$	131,398		$	208,670

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

Covered commercial and consumer credit exposure by risk attribute was as follows:

Covered loan delinquency, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:

Information as to covered nonaccrual loans, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:



(Dollars in thousands)	March 31, 2014		December 31, 2013
Impaired loans
Nonaccrual loans ⁽¹⁾
Commercial	$	968	$	540
Real estate-commercial	1,315		1,349
Installment	0		5
Home equity	2,426		1,893
All other	1		0
Nonaccrual loans	4,710		3,787
Accruing troubled debt restructurings	15		335
Total impaired loans	$	4,725	$	4,122

(1) Nonaccrual loans include nonaccrual TDRs of $1.0 million and $0.9 million as of March 31, 2014 and December 31, 2013, respectively.



	Three months ended
	March 31,
(Dollars in thousands)	2014		2013
Interest income effect on impaired loans
Gross amount of interest that would have been recorded under original terms	$	70	$	138
Interest included in income
Nonaccrual loans	9		7
Troubled debt restructurings	0		0
Total interest included in income	9		7
Net impact on interest income	$	61	$	131

First Financial’s investment in covered impaired loans, excluding loans accounted for under FASB ASC Topic 310-30, was as follows:



	As of March 31, 2014
(Dollars in thousands)	Current Balance		Unpaid Principal Balance		Related Allowance		Average Balance		YTD Interest Income Recognized
Loans with no related allowance recorded
Commercial	$	968	$	1,266	$	0	$	922	$	6
Real estate - commercial	1,315		1,536		0		1,332		1
Installment	0		0		0		3		0
Home equity	2,441		3,914		0		2,167		2
All other	1		1		0		1		0
Total	$	4,725	$	6,717	$	0	$	4,425	$	9



	As of December 31, 2013
(Dollars in thousands)	Current Balance		Unpaid Principal Balance		Related Allowance		Average Balance		Interest Income Recognized
Loans with no related allowance recorded
Commercial	$	875	$	1,131	$	0	$	1,832	$	11
Real estate - commercial	1,349		2,648		0		1,786		4
Installment	5		5		0		2		0
Home equity	1,893		2,899		0		2,611		15
All other	0		0		0		8		0
Total	$	4,122	$	6,683	$	0	$	6,239	$	30

Changes in covered OREO were as follows:



	Three months ended
	March 31,
(Dollars in thousands)	2014		2013
Balance at beginning of period	$	27,120	$	28,862
Additions
Commercial	730		6,462
Residential	28		216
Total additions	758		6,678
Disposals
Commercial	3,981		4,621
Residential	130		344
Total disposals	4,111		4,965
Valuation adjustment
Commercial	707		1,125
Residential	12		105
Total valuation adjustment	719		1,230
Balance at end of period	$	23,048	$	29,345