LOANS (covered) (Tables) (Covered Loans)

9 Months Ended

Sep. 30, 2014

Covered Loans

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

Carrying Value of Purchased Impaired and Nonimpaired Loans

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

	September 30, 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	$	22,403	$	1,341	$	23,744	$	41,172	$	1,144	$	42,316
Real estate - construction	1,748		0		1,748		8,556		0		8,556
Real estate - commercial	178,618		5,295		183,913		263,146		5,487		268,633
Real estate - residential	72,315		0		72,315		80,733		0		80,733
Installment	3,073		497		3,570		5,073		568		5,641
Home equity	1,128		43,730		44,858		975		48,649		49,624
Other covered loans	0		2,117		2,117		0		2,370		2,370
Total covered loans	$	279,285	$	52,980	$	332,265	$	399,655	$	58,218	$	457,873

Carrying Amount of Accretable Yield for Purchased Impaired and Nonimpaired Loans

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

	Three months ended						Nine months ended
	September 30,						September 30,
(Dollars in thousands)	2014			2013			2014			2013
Balance at beginning of period	$	127,764		$	173,920		$	133,671		$	224,694
Reclassification from/(to) nonaccretable difference	(2,295		)	(4,979		)	19,864			(5,687		)
Accretion	(8,158		)	(13,772		)	(26,808		)	(46,971		)
Other net activity (1)	(4,250		)	(8,347		)	(13,666		)	(25,214		)
Balance at end of period	$	113,061		$	146,822		$	113,061		$	146,822

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

Commercial and Consumer Credit Exposure by Risk Attribute

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

	As of September 30, 2014
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Total
Pass	$	14,790	$	1,605	$	150,628	$	167,023
Special Mention	418		0		4,924		5,342
Substandard	8,536		143		28,361		37,040
Doubtful	0		0		0		0
Total	$	23,744	$	1,748	$	183,913	$	209,405

(Dollars in thousands)	Real estate residential		Installment		Home equity		Other		Total
Performing	$	72,315	$	3,570	$	41,416	$	2,117	$	119,418
Nonperforming	0		0		3,442		0		3,442
Total	$	72,315	$	3,570	$	44,858	$	2,117	$	122,860

	As of December 31, 2013
			Real Estate
(Dollars in thousands)	Commercial		Construction		Commercial		Total
Pass	$	25,196	$	1,714	$	182,621	$	209,531
Special Mention	2,011		0		12,904		14,915
Substandard	14,693		6,842		73,108		94,643
Doubtful	416		0		0		416
Total	$	42,316	$	8,556	$	268,633	$	319,505

(Dollars in thousands)	Real estate residential		Installment		Home equity		Other		Total
Performing	$	80,733	$	5,636	$	47,731	$	2,370	$	136,470
Nonperforming	0		5		1,893		0		1,898
Total	$	80,733	$	5,641	$	49,624	$	2,370	$	138,368

Loan Delinquency, including Nonaccrual Loans

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

	As of September 30, 2014
(Dollars in thousands)	30 - 59 days past due		60 - 89 days past due		> 90 days past due		Total past due		Current		Total		> 90 days  past due and accruing
Loans
Commercial	$	0	$	49	$	656	$	705	$	636	$	1,341	$	0
Real estate - commercial	0		144		251		395		4,900		5,295		0
Installment	0		0		0		0		497		497		0
Home equity	361		0		3,086		3,447		40,283		43,730		0
All other	23		3		3		29		2,088		2,117		3
Total	$	384	$	196	$	3,996	$	4,576	$	48,404	$	52,980	$	3

	As of December 31, 2013
(Dollars in thousands)	30 - 59 days past due		60 - 89 days past due		> 90 days past due		Total past due		Current		Total		> 90 days  past due and accruing
Loans
Commercial	$	60	$	335	$	483	$	878	$	266	$	1,144	$	0
Real estate - commercial	184		0		1,263		1,447		4,040		5,487		0
Installment	0		0		5		5		563		568		0
Home equity	239		36		1,727		2,002		46,647		48,649		0
All other	9		4		0		13		2,357		2,370		0
Total	$	492	$	375	$	3,478	$	4,345	$	53,873	$	58,218	$	0

Covered Nonaccrual Loans

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

(Dollars in thousands)	September 30, 2014		December 31, 2013
Impaired loans
Nonaccrual loans (1)
Commercial	$	906	$	540
Real estate-commercial	256		1,349
Installment	0		5
Home equity	3,442		1,893
All other	0		0
Nonaccrual loans	4,604		3,787
Accruing troubled debt restructurings	70		335
Total impaired loans	$	4,674	$	4,122

(1) Nonaccrual loans include nonaccrual TDRs of $0.9 million and $0.9 million as of September 30, 2014 and December 31, 2013, respectively.

	Three months ended				Nine months ended
	September 30,				September 30,
(Dollars in thousands)	2014		2013		2014		2013
Interest income effect on impaired loans
Gross amount of interest that would have been recorded under original terms	$	72	$	81	$	201	$	334
Interest included in income
Nonaccrual loans	18		6		34		20
Troubled debt restructurings	0		3		1		6
Total interest included in income	18		9		35		26
Net impact on interest income	$	54	$	72	$	166	$	308

Investment in Impaired Loans

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

	As of September 30, 2014
(Dollars in thousands)	Current balance		Unpaid principal balance		Related allowance		Average balance		YTD interest income recognized		Quarterly interest income recognized
Loans with no related allowance recorded
Commercial	$	960	$	1,302	$	0	$	936	$	16	$	6
Real estate - commercial	256		395		0		819		2		1
Installment	0		0		0		1		0		0
Home equity	0		4,908		0		2,493		17		11
All other	3,458		0		0		0		0		0
Total	$	4,674	$	6,605	$	0	$	4,249	$	35	$	18

	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 Other Real Estate Owned

Changes in covered OREO were as follows:

	Three months ended				Nine months ended
	September 30,				September 30,
(Dollars in thousands)	2014		2013		2014		2013
Balance at beginning of period	$	19,439	$	22,475	$	27,120	$	28,862
Additions
Commercial	0		8,572		3,937		21,063
Residential	118		95		409		472
Total additions	118		8,667		4,346		21,535
Disposals
Commercial	7,498		2,865		17,429		19,513
Residential	38		76		536		890
Total disposals	7,536		2,941		17,965		20,403
Valuation adjustment
Commercial	718		451		2,186		2,133
Residential	123		0		135		111
Total valuation adjustment	841		451		2,321		2,244
Balance at end of period	$	11,180	$	27,750	$	11,180	$	27,750