10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934

Commission File Number 001-34762

FIRST FINANCIAL BANCORP.

(Exact name of registrant as specified in its charter)

Ohio	31-1042001
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
255 East Fifth Street, Suite 800	45202
Cincinnati, Ohio	(Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code:  (877) 322-9530

Securities registered pursuant to Section 12(b) of the Act:

Common Shares, no par value

Name of exchange on which registered:

The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

x Yes     o No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

o Yes     x  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes     o  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes     o  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (subpart 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes    x  No

The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the sales price of the last trade of such stock as of June 30, 2018, was $2,938,239,000.  (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant.)

As of February 21, 2019, there were issued and outstanding 98,389,491 common shares of the registrant.

Documents Incorporated by Reference:

Portions of the registrant’s Annual Report to Shareholders for the year ended December 31, 2018 are incorporated by reference into Parts I and II.

Portions of the registrant’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 28, 2019 are incorporated by reference into Part III.

			Page
Part I	Item 1	Business	1
	Item 1A	Risk Factors	11
	Item 1B	Unresolved Staff Comments	20
	Item 2	Properties	21
	Item 3	Legal Proceedings	21
	Item 4	Mine Safety Disclosures	21
		Supplemental Item - Executive Officers of the Registrant	22
Part II	Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
	Item 6	Selected Financial Data	26
	Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 7A	Quantitative and Qualitative Disclosures about Market Risk	26
	Item 8	Financial Statements and Supplementary Data	26
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	26
	Item 9A	Controls and Procedures	26
	Item 9B	Other Information	26
Part III	Item 10	Directors, Executive Officers, and Corporate Governance	27
	Item 11	Executive Compensation	27
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	27
	Item 13	Certain Relationships and Related Transactions and Director Independence	27
	Item 14	Principal Accounting Fees and Services	27
Part IV	Item 15	Exhibits, Financial Statement Schedules	28
	Item 16	Form 10-K Summary	32
Signatures			33

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form 10-K, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements specifically identified as forward-looking statements within this document. In addition, certain statements in future filings by us with the SEC, in press releases, and in oral and written statements made by or with our approval, which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include: (i) projections of income or expense, earnings per share, the payment or non-payment of dividends, capital structure and other financial items; (ii) statements of our plans and objectives or our management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the forward-looking statements. We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including those factors and events identified (i) in "Item 1A. Risk Factors" of the Annual Report on Form 10-K and (ii) in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of First Financial's 2018 Annual Report (included within Exhibit 13 to this Annual Report on Form 10-K and incorporated by reference into Item 7 of this Annual Report on Form 10-K).

Forward-looking statements speak only as of the date on which they are made, and, except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified in their entirety by the foregoing cautionary statements.

PART I

Item 1.  Business.

First Financial Bancorp.

First Financial Bancorp., an Ohio corporation (First Financial or the Company), was formed in 1982.  First Financial is a mid-sized, regional bank holding company headquartered in Cincinnati, Ohio, which has elected to become a financial holding company. References in this Form 10-K to “we,” “us” or “our” refer, as the context requires, to First Financial and its subsidiaries, collectively or to First Financial as the holding company.

First Financial engages in the business of commercial banking and other banking and banking-related activities through its wholly owned subsidiary, First Financial Bank (the Bank), which was founded in 1863. Effective December 30, 2016, the Bank converted its charter to an Ohio state chartered bank from a nationally chartered bank.

The range of banking services provided by First Financial to individuals and businesses includes commercial lending, real estate lending and consumer financing.  Real estate loans are loans secured by a mortgage lien on the real property of the borrower, which may either be residential property (one to four family residential housing units) or commercial property (owner-occupied and/or investor income producing real estate, such as apartments, shopping centers, or office buildings).  Risk of loss related to lending activities is managed by adherence to standard loan policies that establish certain levels of performance prior to the extension of a loan to the borrower.  In addition, First Financial offers deposit products that include interest-bearing and noninterest-bearing accounts, time deposits and cash management services for commercial customers. A full range of trust and wealth management services is also provided through First Financial’s Wealth Management line of business.

Commercial and industrial loans are made to all types of businesses for a variety of purposes including, but not limited to, inventory, receivables and equipment.  First Financial works with businesses to meet their shorter term working capital needs while also providing long-term financing for their business plans.  First Financial also offers lease and equipment financing through a wholly-owned subsidiary of the Bank, First Financial Equipment Finance LLC (First Equipment Finance).  Credit risk for lending activities is managed through standardized loan policies, established and authorized credit limits, centralized portfolio management and the diversification of market area and industries.  The overall strength of the borrower is evaluated through the credit underwriting process and includes a variety of analytical activities, including the review of historical and projected cash flows, financial performance, financial strength of the principals and guarantors and collateral values, where applicable.

Commercial and industrial lending activities also include equipment and leasehold improvement financing for franchisees throughout the U.S., principally in the quick service and casual dining sector.  The underwriting of these loans incorporates basic credit proficiencies combined with knowledge of select franchise concepts to measure the creditworthiness of proposed multi-unit borrowers.  The focus is on a limited number of concepts that we believe have sound economics, lower closure rates, and higher brand awareness within specified local, regional or national markets.  Loan terms for equipment are generally up to 84 months fully amortizing and up to 180 months on real estate-related requests.

First Financial also offers secured commercial financing throughout the U.S. through two wholly-owned subsidiaries of the Bank, Oak Street Funding LLC (Oak Street) and First Franchise Capital Corporation (First Franchise). Oak Street lends to the insurance industry, registered investment advisors, certified public accountants and indirect auto finance companies, while First Franchise lends to restaurant franchisees. Together, these niche lending activities are driven by acquisitions, ownership transitions and financing general working capital needs.  The underwriting of Oak Street's loans involves analyses of collateral (through use of Oak Street’s proprietary system) that consists of revenue, which is then continuously monitored by Oak Street throughout the life of the loans.

Commercial real estate loans are secured by a mortgage lien on the real property.  The credit underwriting for both owner-occupied and investor income producing real estate loans includes detailed market analysis, historical and projected cash flow analysis, appropriate equity margins, assessment of lessees and lessors, type of real estate and other analyses.  Market diversification within First Financial’s service area and industry diversification are other means by which First Financial manages the risk.  First Financial does not have a significant exposure to residential builders and developers.

The majority of residential real estate loans originated by the Bank conform to secondary market underwriting standards and are sold within a short timeframe to unaffiliated third parties. The Bank sells the loans with both servicing retained and servicing released, depending on pricing and other market conditions.  The credit underwriting standards adhere to a required

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level of documentation, verifications, valuation and overall credit performance of the borrower.  The underwriting of these loans includes an evaluation of these and other pertinent factors prior to the extension of credit. These underwriting standards increase the marketability and address the credit risk associated with the loans.

Consumer loans are primarily loans made to individuals.  These types of loans include new and used vehicle loans, second mortgages on residential real estate and unsecured loans.  Risk elements in the consumer loan portfolio are primarily focused on the borrower’s cash flow and credit history, which are key indicators of the ability to repay.  A level of security is provided through liens on automobile titles and second mortgage liens, where applicable.  Consumer loans are generally smaller dollar amounts than other types of lending and are made to a large number of customers, increasing diversification within the portfolio.  Economic conditions that affect consumers in First Financial’s markets have a direct impact on the credit quality of these loans.  Higher levels of unemployment, lower levels of income growth and weaker economic growth are factors that may adversely impact consumer loan credit quality.

Home equity lines of credit consist mainly of revolving lines of credit secured by residential real estate.  Home equity lines of credit are generally governed by the same lending policies and subject to the same credit risk as described previously for residential real estate loans.

First Financial has a limited number of foreign currency transactions and, in general, does not have significant exposure to loss from foreign currencies. Foreign currency activities are generally related to services provided to commercial customers.

Information regarding statistical disclosure required by the Securities and Exchange Commission’s Industry Guide 3 is included on the "Statistical Information" page in First Financial's Annual Report to Shareholders for the year ended December 31, 2018, and is incorporated herein by reference.

First Financial's executive office is located at 255 East Fifth Street, Suite 800, Cincinnati, Ohio 45202, and the telephone number is (877) 322-9530.  We maintain a website with the address www.bankatfirst.com. The information contained on our website is not included, a part of or incorporated by reference into this Annual Report on Form 10-K. First Financial makes available its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, free of charge, as soon as reasonably practicable after filing with the Securities and Exchange Commission (SEC), through its website, www.bankatfirst.com under the “Investor Relations” link, under “Financial Reporting.”  Copies of such reports also can be found on the SEC’s website at www.sec.gov.

Employees

At December 31, 2018, First Financial and its subsidiaries had 2,131 full-time and part-time employees.

Subsidiaries

A listing of each of First Financial’s subsidiaries can be found in Exhibit 21 to this Form 10-K.

Business Combinations

In April 2018, First Financial Bancorp acquired MainSource Financial Group, Inc., an Indiana bank holding company in a stock-for-stock transaction and MainSource Bank, a wholly owned subsidiary of MainSource, merged into First Financial 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. At the effective time of the merger, MainSource had assets of approximately $4.5 billion and operated 88 full-service offices in Indiana, Ohio, Illinois and Kentucky.

Market and Competitive Information

First Financial utilizes a community banking business model and serves a combination of metropolitan and non-metropolitan markets through its full-service banking centers primarily in Indiana, Ohio, Kentucky and Illinois.  Market selection is based upon a number of factors, but markets are primarily chosen for their potential for growth, long-term profitability and customer reach.  First Financial’s goal is to develop a competitive advantage through a local market focus, building long-term relationships with clients to help them reach greater levels of financial success.

We also compete on a nationwide basis through Oak Street which lends to the insurance industry, registered investment advisors, certified public accountants and indirect auto finance companies and First Franchise which lends to restaurants franchisees.

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The Company’s markets support many different types of business activities, such as manufacturing, agriculture, education, healthcare and professional services.  Within these markets, growth is projected to continue in key demographic groups and populations.  First Financial’s market evaluation includes demographic measures such as income levels, median household income and population growth.  The Midwestern markets that First Financial serves have historically not experienced the level of economic volatility experienced in other areas of the country, although material fluctuations may occur.  

First Financial believes that it is well positioned to compete in its markets.  Smaller than super-regional and multi-national bank holding companies, First Financial believes that it can meet the needs of its markets through a local decision-making process and that it is better positioned to compete for business than smaller community banks that may have size or geographic limitations.  First Financial’s targeted customers include individuals and small to medium sized businesses within the Bank's geographic footprint. Through its diversified delivery systems of banking centers, ATMs, internet banking and telephone-based transactions, First Financial is able to meet the needs of its customers in an ever-changing marketplace.

First Financial faces strong competition from financial institutions and other non-financial organizations.  Its competitors include local and regional financial institutions, savings and loans and bank holding companies, as well as some of the largest banking organizations in the United States.  In addition, other types of financial institutions, such as credit unions, offer a wide range of loan and deposit services that are competitive with those offered by First Financial. The consumer is also served by brokerage firms and mutual funds that provide checking services, credit cards, margin loans and other services similar to those offered by First Financial.  Online lenders also create additional competition, particularly in the mortgage and consumer lending areas. Major consumer retail stores compete for loans by offering credit cards and retail installment contracts.  It is anticipated that competition from other financial and non-financial services entities will continue and, for certain products and services, intensify.

Supervision and Regulation

First Financial and its subsidiaries are subject to an extensive system of laws and regulations that are intended primarily for the protection of customers, the Deposit Insurance Fund (DIF), and the banking system in general and not for the protection of shareholders.  These laws and regulations govern such areas as capital, permissible activities, allowance for loan and lease losses, loans and investments, interest rates that can be charged on loans and consumer protection communications and disclosures.  Certain elements of selected laws and regulations are described in more detail in the sections that follow.  These descriptions are not intended to be complete and are qualified in their entirety by reference to the full text of the statutes and regulations described.

Bank Holding Company Regulation

We are subject to the provisions of the Bank Holding Company Act of 1956, as amended (the BHCA) and subject to supervision and examination by the Federal Reserve Board.  The BHCA requires prior approval by the Federal Reserve Board of the acquisition of 5% or more of the voting stock or substantially all the assets of any bank within the United States.  In addition, First Financial’s acquisition of a savings and loan association would require Federal Reserve Board approval. Acquisitions are also subject to certain anti-competitive limitations.

The BHCA and the regulations of the Federal Reserve Board prohibit a bank holding company and its subsidiaries from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property, or furnishing of services.  A tie-in arrangement is when a bank uses its ability to offer banking products in a coercive manner to gain a competitive advantage for non-banking products or services. The BHCA also imposes certain restrictions upon dealings by affiliated banks with the holding company and among themselves, including restrictions on inter-bank borrowing and upon dealings in the securities or obligations of the holding company or other affiliates.

The Federal Reserve Board also has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil monetary penalties, issue cease and desist or removal orders, and require that a bank holding company divest subsidiaries (including a subsidiary bank). In general, the Federal Reserve Board may initiate enforcement actions for violations of laws and regulations and unsafe or unsound practices. A bank holding company is required by law and Federal Reserve Board policy to act as a source of financial strength to each subsidiary bank and to commit resources to support such subsidiary bank. The Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to its shareholders if the Federal Reserve Board believes the payment of such dividends would be an unsafe or unsound practice.

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With some exceptions, the Bank Holding Company Act prohibits a bank holding company from acquiring or retaining direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank or bank holding company or from engaging directly or indirectly in activities other than those of banking, managing or controlling banks, or providing services for its subsidiaries. The principal exceptions to these prohibitions involve non-bank activities that, by statute or by Federal Reserve Board regulation or order, are held to be closely related to the business of banking or of managing or controlling banks. A bank holding company that elects to be a financial holding company may, however, engage in additional non-bank activities that are financial in nature or incidental to activities that are financial in nature.

Activities that are considered by the Federal Reserve Board to be “financial in nature” include:

•securities underwriting, dealing and market making;

•sponsoring mutual funds and investment companies;

•insurance underwriting and agency;

•merchant banking; and

•activities that the Federal Reserve Board has determined to be closely related to banking.

A financial holding company must be well-capitalized and well-managed, and each subsidiary bank must be well-capitalized and well-managed and have a CRA rating of at least satisfactory. If a financial holding company or a subsidiary bank fails to meet all requirements for the holding company to maintain financial holding company status, material restrictions may be placed on the activities of the holding company and on the ability of the holding company to enter into certain transactions or obtain regulatory approvals. The holding company could also lose its financial holding company status and be required to divest ownership or control of all banks owned by the financial holding company. If restrictions are imposed on the activities of a financial holding company, such restrictions may not be made publicly available pursuant to confidentiality regulations of the banking regulators.

Economic Growth, Regulatory Relief and Consumer Protection Act

On May 25, 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the "Regulatory Relief Act") was signed into law. The Regulatory Relief Act was designed to provide regulatory relief for banking organizations, particularly for all but the very largest, those with assets in excess of $250 billion. Bank holding companies with assets of less than $100 billion are no longer subject to enhanced prudential standards, and those with assets between $100 billion and $250 billion will be relieved of those requirements in 18 months, unless the Federal Reserve Board takes action to maintain those standards. Certain regulatory requirements applied only to banks with assets in excess of $50 billion and so did not apply to the Company even before the enactment of the Regulatory Relief Act.

The Regulatory Relief Act also provides that the banking regulators must adopt regulations implementing the provision that banking organizations with assets of less than $10 billion are permitted to satisfy capital standards and be considered "well capitalized" under the prompt corrective action framework if their leverage ratios of tangible assets to average consolidated assets is between 8% and 10%, unless the banking organization's federal banking agency determines that the banking organization's risk profile warrants a more stringent leverage ratio. The OCC, the Federal Reserve Board and the FDIC have proposed for comment the leverage ratio framework for any banking organization with total consolidated assets of less than $10 billion, limited amounts of certain types of assets and off-balance sheet exposures, and a community bank leverage ratio greater than 9%. The community bank leverage ratio would be calculated as the ratio of tangible equity capital divided by average total consolidated assets. Tangible equity capital would be defined as total bank equity capital or total holding company equity capital, as applicable, prior to including minority interests, and excluding accumulated other comprehensive income, deferred tax assets arising from net operating loss and tax credit carry forwards, goodwill and other intangible assets (other than mortgage servicing assets). Average total assets would be calculated in a manner similar to the current tier 1 leverage ratio denominator in that amounts deducted from the community bank leverage ratio numerator would also be excluded from the community bank leverage ratio denominator.

The Office of the Comptroller of the Currency (OCC), the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) also adopted a rule providing banking organizations with the option to phase in over a three-year period the day-one adverse effects on regulatory capital that may result from the adoption of new current expected credit loss methodology accounting under U. S. generally accepted accounting principles.

The Regulatory Relief Act also relieves bank holding companies and banks with assets of less than $100 billion in assets from certain record-keeping, reporting and disclosure requirements.

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Depository Institution Regulation

The Bank, as a bank chartered under the laws of the State of Ohio and a member of the Federal Reserve Bank of Cleveland (Federal Reserve Bank), is subject to supervision and examination by the Federal Reserve Board and the Ohio Division of Financial Institutions (ODFI). The Bank's deposits are insured up to the legal limits by the DIF, which is administered by the FDIC and is subject to the provisions of the Federal Deposit Insurance Act (FDIA). The Bank is also subject to regulations of the Consumer Financial Protection Bureau (CFPB), which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and has broad powers to adopt and enforce consumer protection regulations.

Regulatory Capital

Financial institutions and their holding companies are required to maintain capital as a way of absorbing losses that can and cannot be predicted. The Federal Reserve Board has adopted risk-based capital guidelines for bank holding companies as well as state banks that are members of a Federal Reserve Bank. The OCC and the FDIC have adopted risk-based capital guidelines for national banks and state non-member banks, respectively. The guidelines provide a systematic analytical framework that makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy and minimizes disincentives to holding liquid, low-risk assets. Capital levels as measured by these standards are also used to categorize financial institutions for purposes of prompt corrective action regulatory provisions.         

In July 2013, the United States banking regulators issued new capital rules applicable to smaller banking organizations, which First Financial was at the time. These capital rules implement certain of the provisions of the Dodd-Frank Act (the Basel III Capital Rules). Community banking organizations, including First Financial and the Bank, began transitioning to the new rules when the new minimum capital requirements became effective on January 1, 2015. A capital conservation buffer (i.e. common equity) and additional deductions from common equity capital were phased in through January 1, 2019.

The capital rules include (a) a minimum common equity tier 1 capital ratio of at least 4.5%, (b) a minimum Tier 1 capital ratio of at least 6.0%, (c) a minimum total capital ratio of 8.0% and (d) a minimum leverage ratio (tier 1 capital to average assets) of 4.0%.

Common equity for the common equity tier 1 capital ratio includes common stock (plus related surplus) and retained earnings, plus limited amounts of minority interests in the form of common stock, less the majority of certain regulatory deductions.

Tier 1 capital includes common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus and trust preferred securities that have been grandfathered (but which are not permitted going forward), and limited amounts of minority interests in the form of additional Tier 1 capital instruments, less certain deductions.

Tier 2 capital, which can be included in the total capital ratio, includes certain capital instruments (such as subordinated debt) and limited amounts of the allowance for loan and lease losses, subject to new eligibility criteria, less applicable deductions.

The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments and investments in the capital of unconsolidated financial institutions (above certain levels).

The rules also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the Company does not hold a capital conservation buffer greater than 2.5% composed of common equity tier 1 capital compared to its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% at the beginning of the quarter. Effective January 1, 2019, the capital conservation buffer requirement phases were fully phased in.

Federal banking regulators have established regulations governing prompt corrective action to resolve capital deficient banks. Under these regulations, institutions that become undercapitalized become subject to mandatory regulatory scrutiny and limitations, which increase as capital continues to decrease. Each such institution is also required to file a capital plan with its primary federal regulator, and its holding company must guarantee the capital shortfall up to 5% of the assets of the capital deficient institution at the time it becomes undercapitalized.

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In accordance with the Basel III Capital Rules, in order to be “well-capitalized” under the prompt corrective action guidelines, a bank must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, a Tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level or any capital measure. At December 31, 2018, the Bank met the capital ratio requirements to be deemed “well-capitalized” according to the guidelines previously described.

A bank with a capital level that might qualify for well capitalized or adequately capitalized status may nevertheless be treated as though the bank is in the next lower capital category if the bank’s primary federal banking supervisory authority determines that an unsafe or unsound condition or practice warrants that treatment. A bank’s operations can be significantly affected by its capital classification under the prompt corrective action rules. For example, a bank that is not well capitalized generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market without advance regulatory approval. These deposit-funding limitations can have an adverse effect on the bank’s liquidity. At each successively lower capital category, an insured depository institution is subject to additional restrictions. Undercapitalized banks are required to take specified actions to increase their capital or otherwise decrease the risks to the federal deposit insurance fund. Bank regulatory agencies generally are required to appoint a receiver or conservator within 90 days after a bank becomes critically undercapitalized with a leverage ratio of less than 2%. The Federal Deposit Insurance Act provides that a federal bank regulatory authority may require a bank holding company to divest itself of an undercapitalized bank subsidiary if the agency determines that divestiture will improve the bank’s financial condition and prospects.

In September 2017, the Federal Reserve Board, along with other bank regulatory agencies, proposed amendments to its capital requirements to simplify various aspects of the capital rules and thereby reduce regulatory burden for “non-advanced approaches” banking organizations. The Bank is a non-advanced approach bank because it has total consolidated assets less than $250 billion and balance sheet foreign exposures of less than the maximum amount for a non-advanced approach bank. Because the amendments were proposed with a request for comments and have not been finalized, we do not yet know what effect the final rules will have on the Bank’s capital calculations. In November 2017, the federal banking agencies extended, for such non-advanced approaches banks, the existing capital requirements for certain items that were scheduled to change effective January 1, 2018, in light of the simplification amendments being considered.

Debit Card Interchange Fees

The Dodd-Frank Act requires that interchange transaction fees for electronic debit transactions be “reasonable” and proportional to certain costs related to processing the transactions. The Federal Reserve Board established certain standards and prohibitions, including setting interchange fees and allowing for an upward adjustment if the debit card issuer implements policies and procedures designed to prevent fraud. The debit card interchange rules became applicable to First Financial after First Financial’s assets exceeded $10 billion. First Financial expects noninterest income to decline by approximately $13.0 million on an annual basis as a result of the Durbin Amendment, beginning in the third quarter of 2019, with the first full year impact in 2020.

Limitations on Dividends and Other Payments

There are various legal limitations on the extent to which a subsidiary bank may finance or otherwise supply funds to its parent holding company. Under applicable federal and state laws, the Bank may not, subject to certain limited exceptions, make loans or extensions of credit to, or investments in the securities of, First Financial. A subsidiary bank is also subject to collateral security requirements for any loan or extension of credit permitted by such exceptions.

The Bank may not pay dividends out of its surplus if, after paying these dividends, it would fail to meet the required minimum capital levels established by the Federal Reserve Board. The amount of dividends payable by the Bank is also restricted if the Bank does not hold a capital conservation buffer as described above. In addition, the Bank must have the approval of the Federal Reserve Board and the ODFI if a dividend in any year would cause the total dividends for that year to exceed the sum of the Bank’s current year’s net income and the retained net income for the preceding two years, less required transfers to surplus. Under Ohio law, the Bank may pay a dividend from surplus only with the approval of First Financial (as the sole shareholder of the Bank) and the approval of the ODFI. Payment of dividends by the Bank may be restricted at any time at the discretion of its regulatory authorities, if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.

The ability of First Financial to obtain funds for the payment of dividends, for the servicing of indebtedness and for other cash requirements is largely dependent on the amount of dividends that may be declared by the Bank. However, because the Federal Reserve Board expects us to serve as a source of strength to the Bank, as discussed above, payment of dividends by the Bank

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may be restricted at any time at the discretion of the Federal Reserve Board if the Federal Reserve Board deems such dividends to constitute an unsafe and/or unsound banking practice.

The Federal Reserve Board has issued a policy statement with regard to the payment of cash dividends by bank holding companies. The policy statement provides that, as a matter of prudent banking, a bank holding company should not maintain a rate of cash dividends unless its net income available to common shareholders has been sufficient to fully fund the dividends, and the prospective rate of earnings retention appears to be consistent with the bank holding company’s capital needs, asset quality, and overall financial condition. Accordingly, a bank holding company generally should not pay cash dividends that exceed its net income or can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing. Under certain circumstances, a bank holding company must provide notice to the Federal Reserve Board of an intended dividend payment, to which the Federal Reserve Board might object if it determines the payment would be an unsafe or unsound practice.

Insurance of Accounts

The FDIC maintains the DIF, which insures the deposit accounts of the Bank to the maximum amount provided by law.  The general insurance limit is $250,000 per separately insured depositor.  This insurance is backed by the full faith and credit of the United States government.

The FDIC assesses deposit insurance premiums on each insured institution quarterly based on risk characteristics of the institution. As a bank with assets of more than $10 billion, First Financial is subject to a deposit assessment based on a scorecard issued by the FDIC. This scorecard considers, among other things, the Bank’s CAMELS rating, results of asset-related stress testing and funding-related stress, as well as our use of core deposits, among other things. Depending on the results of the Bank’s performance under that scorecard, the total base assessment rate is between 1.5 and 40 basis points. The FDIC may also impose a special assessment in an emergency situation.

Pursuant to the Dodd-Frank Act, the FDIC has established 2.0% as the designated reserve ratio (DRR), which is the ratio of the DIF to insured deposits of the total industry. In March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35% by September 30, 2020, the deadline imposed by the Dodd-Frank Act.  The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.  The FDIC’s rules reduced assessment rates on all banks but imposed a surcharge on banks with assets of $10 billion or more until the DRR reaches 1.35% and will provide assessment credits to banks with assets of less than $10 billion for the portion of their assessments that contribute to the increase of the DRR to 1.35%. The rules also changed the method to determine risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than less risky banks. The reserve ratio reached 1.36% on September 30, 2018, and as a result the surcharge on banks with assets of $10 billion or more will cease with the first assessment invoice in 2019. In addition, once the DRR reaches 1.38%, the FDIC will apply the assessment credits to banks that had assets below $10 billion at any time during the credit calculation period, which includes the Bank. The Bank will also be entitled to assessment credits attributable to MainSource.

In addition, all institutions with deposits insured by the FDIC are required to pay assessments to fund interest payments on bonds issued by the Financing Corporation, a mixed-ownership government corporation established to recapitalize a predecessor to the DIF.  These assessments will continue until the Financing Corporation bonds mature in September 2019. The Financing Corporation has projected that the last assessment will be collected on the March 2019, FDIC invoice.

As insurer, the FDIC is authorized to conduct examinations of and to require reporting by DIF-insured institutions. Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or written agreement entered into with the FDIC.

Consumer Protection Laws and Regulations

Banks are subject to regular examination to ensure compliance with federal statutes and regulations applicable to their business, including consumer protection statutes and implementing regulations. Potential penalties under these laws include, but are not limited to, fines. The Dodd-Frank Act established the CFPB, which has extensive regulatory and enforcement powers over consumer financial products and services. As a bank with total assets in excess of $10 billion, the Bank is primarily examined by the CFPB with respect to consumer protection laws and regulations. The CFPB has adopted numerous rules with respect to consumer protection laws, amending some existing regulations and adopting new ones, and has commenced enforcement actions. The following are just some of the consumer protection laws applicable to the Bank:

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• Community Reinvestment Act of 1977: imposes a continuing and affirmative obligation to fulfill the credit needs of its entire community, including low- and moderate-income neighborhoods.

• Equal Credit Opportunity Act: prohibits discrimination in any credit transaction on the basis of any of various criteria.

• Truth in Lending Act: requires that credit terms are disclosed in a manner that permits a consumer to understand and compare credit terms more readily and knowledgeably.

• Fair Housing Act: makes it unlawful for a lender to discriminate in its housing-related lending activities against any person on the basis of any of certain criteria.

• Home Mortgage Disclosure Act: requires financial institutions to collect data that enables regulatory agencies to determine whether the financial institutions are serving the housing credit needs of the communities in which they are located.

• Real Estate Settlement Procedures Act: requires that lenders provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits abusive practices that increase borrowers’ costs.

• Privacy provisions of the Gramm-Leach-Bliley Act: requires financial institutions to establish policies and procedures to restrict the sharing of non-public customer data with non-affiliated parties and to protect customer information from unauthorized access.

The banking regulators also use their authority under the Federal Trade Commission Act to take supervisory or enforcement action with respect to unfair or deceptive acts or practices by banks that may not necessarily fall within the scope of specific banking or consumer finance law.

In October 2017, the CFPB issued a final rule, referred to as the “Payday Rule,” that addresses commercial lending practices with respect to certain consumer loans. The Payday Rule was effective on January 16, 2018, although compliance with most of its provisions will not be required until August 19, 2019. The first major part of the rule makes it an unfair and abusive practice for a lender to make short-term and longer-term loans with balloon payments (with certain exceptions) without reasonably determining that the borrower has the ability to repay the loan. The second major part of the rule applies to the same types of loans as well as longer-term loans with an annual percentage rate greater than 36% that are repaid directly from the borrower’s account. The rule states that it is an unfair and abusive practice for the lender to withdraw payment from the borrower’s account after two consecutive payment attempts have failed, unless the lender obtains the consumer’s new and specific authorization to make further withdrawals from the account. The rule also requires lenders to provide certain notices to the borrower before attempting to withdraw payment from the borrower’s account.

On February 6, 2019, the CFPB issued two proposals with respect to the Payday Rule. First, the CFPB proposed to delay the compliance date for the mandatory underwriting provisions of the Payday Rule to November 19, 2020. It has requested comments on the proposed delay to be made within 30 days. Second, the CFPB proposed to rescind provisions of the Payday Rule that (1) provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer-term balloon-payment loan without reasonably determining that the consumer has the ability to repay the loan according to its terms; (2) prescribe mandatory underwriting requirements for making the ability-to-repay determination; (3) provide exemptions of certain loans from the mandatory underwriting requirements; and (4) provide related definitions, reporting and recordkeeping requirements. The CFPB has requested comments to be made within 90 days on this proposal. These proposals do not change the provisions of the Payday Rule. The CFPB also stated that it will be considering other changes to the Payday Rule in response to requests received for exemptions of certain types of lenders or loan products and may commence separate additional rulemaking initiatives.

The Company does not currently expect the new Payday Rules to have a material effect on the Company’s financial condition or results of operations.

Community Reinvestment Act

Under the Community Reinvestment Act (CRA), every FDIC-insured institution is obligated, consistent with safe and sound banking practices, to help meet the credit needs of its entire community, including low and moderate income neighborhoods.  The CRA requires the appropriate federal banking regulator, in connection with the examination of an insured institution, to assess the institution's record of meeting the credit needs of its community and to consider this record in its evaluation of

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certain applications to banking regulators, such as an application for approval of a merger or the establishment of a branch.  An unsatisfactory rating may be used as the basis for the denial of an application and will prevent a bank holding company of the institution from making an election to become a financial holding company. As of its last examination, the Bank received a CRA rating of “satisfactory.”

Privacy Rules

Federal banking regulators, as required under the Gramm-Leach-Bliley Act, have adopted rules limiting the ability of banks and other financial institutions to disclose nonpublic information about consumers to non-affiliated third parties.  The rules require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to non-affiliated third parties.  The privacy provisions of the Gramm-Leach-Bliley Act affect how consumer information is transmitted through diversified financial services companies and conveyed to outside vendors.

Fiscal and Monetary Policies

The earnings of banks, and, therefore, the earnings of First Financial (and its subsidiaries), are affected by the fiscal and monetary policies of the United States government and its agencies, including the Federal Reserve Board.  An important function of the Federal Reserve Board is to regulate the national supply of bank credit in an effort to prevent recession and to restrain inflation.  Among the procedures used to implement these objectives are open market operations in U.S. government securities, changes in the discount rate on member bank borrowings, and changes in reserve requirements on member bank deposits. These policies are used in varying degrees and combinations to directly affect the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits.

Volcker Rule

In December 2013, five federal agencies adopted a final regulation implementing the so-called Volcker Rule provision of the Dodd-Frank Act (the Volcker Rule). The Volcker Rule places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions. The trading activity includes a purchase or sale as principal of a security or a derivative, commodity future or option on a security in order to benefit from short-term price movements or to realize short-term profits. The Volcker Rule exempts specified U.S. government, agency and/or municipal obligations, and it excludes trading conducted in certain capacities, including as a broker or other agent, through a deferred compensation or pension plan, as a fiduciary on behalf of customers, to satisfy a debt previously contracted, repurchase and securities lending agreements and risk-mitigating hedging activities. The Volcker Rule also prohibits a banking entity from having an ownership interest in, or certain relationships with, a hedge fund or private equity fund, with a number of various exceptions. The Bank from time to time may engage in trading activities or own the types of funds regulated by the Volcker Rule.

Transactions with Affiliates, Directors, Executive Officers and Shareholders

Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Board Regulation W generally:

• limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate;

• limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates; and

• require that all such transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those provided to a non-affiliate.

An affiliate of a bank is any company or entity which controls, is controlled by, or is under common control with the bank. The term “covered transaction” includes the making of loans to the affiliate, the purchase of assets from the affiliate, the issuance of a guarantee on behalf of the affiliate, the purchase of securities issued by the affiliate, and other similar types of transactions.

A bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the Federal Reserve Board. Among other things, these loans must be made on terms (including interest rates charged and collateral required) substantially the same as those offered to unaffiliated individuals or be made as part of a benefit or compensation program and on terms widely available to employees and must not involve a greater than normal risk of repayment. In addition, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

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Executive and Incentive Compensation

In June 2010, the Federal Reserve Board, the OCC and the FDIC issued joint interagency guidance on incentive compensation policies (the Joint Guidance) intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. This principles-based guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should: (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks; (ii) be compatible with effective internal controls and risk management; and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. The Joint Guidance made incentive compensation part of the regulatory agencies’ examination process, with the findings of the supervisory initiatives included in reports of examination and enforcement actions possible.

In May 2016, the federal bank regulatory agencies approved a joint notice of proposed rules (the Proposed Joint Rules) designed to prohibit incentive-based compensation arrangements that encourage inappropriate risks at financial institutions. The Proposed Joint Rules apply to covered financial institutions with total assets of $1 billion or more. For all covered institutions, including Level 3 institutions like us, the proposed rule:

• prohibits incentive-based compensation arrangements that are “excessive” or “could lead to material financial loss;”

• requires incentive based compensation that is consistent with a balance of risk and reward, effective management and control of risk and effective governance; and

• requires board oversight, recordkeeping and disclosure to the appropriate regulatory agency.

Further, as stock exchanges impose additional listing requirements under the Dodd-Frank Act, public companies are required to implement “clawback” procedures for incentive compensation payments and to disclose the details of the procedures, which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating a restatement due to material noncompliance with financial reporting requirements. This clawback policy is intended to apply to compensation paid within a three-year look-back window of the restatement and would cover all executives who received incentive awards.

Patriot Act

In response to the terrorist events of September 11, 2001, the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the Patriot Act) was signed into law in October 2001. The Patriot Act gives the United States government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. Title III of the Patriot Act takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions. Among other requirements, Title III and related regulations require regulated financial institutions to establish a program specifying procedures for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity. The Bank has established policies and procedures that it considers to be in compliance with the requirements of the Patriot Act.

State Law

As an Ohio-chartered bank, the Bank is subject to regular examination by the ODFI. State banking regulation affects the Bank’s internal organization and corporate governance, capital distributions, activities, acquisitions of other institutions and branching. State banking regulation may contain limitations on an institution’s activities that are in addition to limitations imposed under federal banking law. The ODFI may initiate supervisory measures or formal enforcement actions, and under certain circumstances, it may take control of an Ohio-chartered bank.

In 2017, the State of Ohio completed a substantial re-writing of Ohio’s banking laws that became effective on January 1, 2018. One of the primary purposes of the revision of the law was to adopt one universal bank charter for depository institutions chartered by the state, rather than having separate types of state depository institution charters with different powers and limitations for banks, savings banks and savings and loan associations. The result is that all Ohio-chartered depository institutions are now considered to have full commercial bank powers, unless an institution elects to continue to be governed by federal restrictions applicable to federal savings and loan associations and federal savings banks. While the most substantial changes in the law affect institutions chartered by Ohio as savings banks or savings and loan associations prior to the effectiveness of the new law, some changes also apply to institutions, like the Bank, that were chartered as commercial banks

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prior to the change in the law. The changes for all Ohio-chartered banks include provisions allowing Ohio-chartered banks to exercise the same powers, perform all acts, and provide all services that are permitted for federally chartered depository institutions, with the exception of laws and regulations dealing with interest rates, thereby enhancing opportunities for Ohio-chartered banks to compete with other financial institutions. Other provisions clarify previous laws addressing, or allow more flexibility with respect to, corporate governance matters, mergers and acquisitions and additional reliance on Ohio corporate law generally.

In addition, in October 2017, Ohio-chartered banks received notices of required assessments to be paid to the ODFI.  For two years, the ODFI was funded by State of Ohio excess unclaimed funds allocated to the ODFI by the State of Ohio.  That funding source has ceased to be available, and assessments are once again required.

Item 1A.  Risk Factors.

The risks listed here are not the only risks we face. Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material adverse effect on our financial condition, results of operations, business and prospects.(See also “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations” for certain forward looking statements.)

Risks Related to Economic and Market Conditions

Weakness in the economy and in the real estate market, including specific weakness within our geographic footprint, may adversely affect us, including requiring us to record additional loan loss provisions or to write down loans.

First Financial’s success depends, in part, on economic and political conditions, local and national, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy and other factors beyond First Financial’s control may adversely affect its deposit levels and composition, demand for loans, the ability of borrowers to repay their loans and the value of the collateral securing the loans it makes. Economic turmoil in different regions of the world affect the economy and stock prices in the United States, which can affect First Financial’s earnings and capital and the ability of its customers to repay loans. Due to First Financial's volume of real estate loans, declining real estate values could adversely affect the value of property used as collateral as well as First Financial’s ability to sell the collateral upon foreclosure.

If the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations decline, this could result in, among other things, a deterioration of credit quality or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for loan and lease losses. These factors could also result in higher delinquencies and greater charge-offs in future periods, which would materially and adversely affect our financial condition and results of operations.

There is no assurance that our non-impaired loans will not become impaired or that our impaired loans will not suffer further deterioration in value. The fluctuations in national, regional and local economic conditions, including those related to local residential, commercial real estate and construction markets, may result in increased charge-offs and, consequently, reduce our net income. These fluctuations are not predictable, cannot be controlled and may have a material adverse impact on our operations and financial condition even if other favorable events occur.

Weakness in the real estate market, including the secondary residential mortgage loan markets, could adversely affect us.

Disruptions in the secondary market for residential mortgage loans limit the market for and liquidity of many mortgage loans. The effects of mortgage market challenges, combined with reductions in residential real estate market prices and reduced levels of home sales, could adversely affect the value of collateral securing mortgage loans that we hold, mortgage loan originations and profits on sales of mortgage loans. Such conditions could result in higher losses, write downs and impairment charges in our mortgage loan portfolio and other lines of business. Declines in real estate values, home sale volumes, financial stress on borrowers as a result of job losses, interest rate resets on adjustable rate mortgage loans or other factors could have further adverse effects on borrowers that could result in higher delinquencies and greater charge-offs in future periods, which would adversely affect our financial condition or results of operations. Additionally, decclines in real estate values might adversely affect the creditworthiness of state and local governments, resulting in decreased profitability or credit losses from loans made to such governments. A decline in home values or overall economic weakness could also have an adverse impact upon the value of real estate or other assets which we own upon foreclosing a loan and our ability to realize value on such assets.

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Changes in market interest rates or capital markets could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity.

Given our business mix, and the fact that most of our assets and liabilities are financial in nature, we tend to be sensitive to market interest rate movements and the performance of the financial markets. Our primary source of income is net interest income, which is the difference between the interest income generated by our interest-earning assets (consisting primarily of loans and, to a lesser extent, securities) and the interest expense generated by our interest-bearing liabilities (consisting primarily of deposits and wholesale borrowings). Prevailing economic conditions, fiscal and monetary policies and the policies of various regulatory agencies all affect market rates of interest and the availability and cost of credit, which, in turn, significantly affect financial institutions’ net interest income. If the interest we pay on deposits and other borrowings increases at a faster rate than increases in the interest we receive on loans and investments, net interest income, and, therefore, our earnings, could be adversely affected. Earnings could also be adversely affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings.

In addition to the impact of the general economy, changes in interest rates or in valuations in the debt or equity markets could directly impact us in one or more of the following ways:

• the yield on earning assets and rates paid on interest bearing liabilities may change in disproportionate ways;

• the value of certain balance sheet and off-balance sheet financial instruments or the value of equity investments that we hold could decline;

• the value of assets for which we provide processing services could decline;

• the demand for loans and refinancings may decline, which could negatively impact income related to loan originations; or

• to the extent we access capital markets to raise funds to support our business, such changes could affect the cost of such funds or the ability to raise such funds.

Although we have implemented procedures we believe will reduce the potential effects of changes in interest rates on our results of operations, these procedures may not always be successful. In addition, any substantial or prolonged change in market interest rates could adversely affect our financial condition, results of operations and liquidity.

A transition away from LIBOR as a reference rate for financial contracts could negatively affect our income and expenses and the value of various financial contracts.

LIBOR is used extensively in the United States and globally as a benchmark for various commercial and financial contracts, including adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives. LIBOR is set based on interest rate information reported by certain banks, which may stop reporting such information after 2021. It is uncertain at this time whether LIBOR will change or cease to exist or the extent to which those entering into financial contracts will transition to any other particular benchmark. Other benchmarks may perform differently than LIBOR or alternative benchmarks have performed in the past or have other consequences that cannot currently be anticipated. It is also uncertain what will happen with instruments that rely on LIBOR for future interest rate adjustments and which remain outstanding if LIBOR ceases to exist.

We have a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that are either directly or indirectly dependent on LIBOR. The transition from LIBOR could create considerable costs and additional risk. Since proposed alternative rates are calculated differently, payments under contracts referencing new rates will differ from those referencing LIBOR. The transition will change our market risk profiles, requiring changes to risk and pricing models, valuation tools, product design and hedging strategies. Furthermore, failure to adequately manage this transition process with our customers could adversely impact our reputation. Although we are currently unable to assess what the ultimate impact of the transition from LIBOR will be, failure to adequately manage the transition could have a material adverse effect on our business, financial condition and results of operations.

Declining values of real estate, increases in unemployment, insurance market disruptions and the related effects on local economies may increase our credit losses, which would negatively affect our financial results.

We offer a variety of secured loans, including commercial lines of credit, commercial term loans, real estate, construction, home equity, consumer and other loans. Many of our loans are secured by real estate (both residential and commercial) within our market area. A major change in the real estate market, such as deterioration in the value of collateral, or in the local or national economy, could adversely affect our customers' ability to pay these loans, which in turn could adversely impact our results of operations and financial condition. Additionally, increases in unemployment also may adversely affect the ability of

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certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment, may result in loan defaults and foreclosures and may impair the value of our collateral. Loan defaults and foreclosures are unavoidable in the banking industry, and we try to limit our exposure to this risk by monitoring carefully our extensions of credit.

Additionally, a concentration of natural disasters or a significant disruption in the insurance market could adversely impact the risk relating to our insurance lending business. We cannot fully eliminate credit risk, and as a result, credit losses may increase in the future.

Our financial instruments carried at fair value expose us to certain market risks.

We maintain an available-for-sale investment securities portfolio, which includes assets with various types of instruments and maturities. At times, we also maintain certain assets that are classified and accounted for as trading assets. The changes in fair value of the available-for-sale securities are recognized in shareholders' equity as a component of other comprehensive income. The changes in fair value of financial instruments classified as trading assets are carried at fair value with changes in fair value recognized in earnings. The fair value of financial instruments carried at fair value is exposed to market risks related to changes in interest rates and market liquidity. We manage the market risks associated with these instruments through broad asset/liability management strategies. Changes in the market values of these financial instruments could have a material adverse impact on our financial condition or results of operations. We may classify additional financial assets or financial liabilities at fair value in the future.

Risks Related to Our Business

When we loan money, commit to loan money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, or the risk of loss if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts.

As lending is one of our primary business activities, the credit quality of our portfolio can have a significant impact on our earnings. We estimate and establish reserves for credit risks and probable incurred credit losses inherent in our loan portfolio. This process, which is critical to our financial results and condition, requires difficult, subjective and complex judgments, including reviews of economic conditions and how these economic conditions might impair the ability of our borrowers to repay their loans. As is the case with any such assessments, there is always the chance that we will fail to identify the proper factors or that we will fail to accurately estimate the impacts of factors that we identify. In addition, large loans, letters of credit and contracts with individual counterparties in our portfolio magnify the credit risk that we face, as the impact of large borrowers and counterparties not repaying their loans or performing according to the terms of their contracts has a disproportionately significant impact on our credit losses and reserves.

The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an adverse effect on our business, results of operations and financial condition.

In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements and other financial information. We also may rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Although we regularly review our credit exposure to specific clients and counterparties and to specific industries that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to detect, such as fraud. Moreover, such circumstances, including fraud, may become more likely to occur or be detected in periods of general economic uncertainty. We may also fail to receive full information with respect to the risks of a counterparty. In addition, in cases where we have extended credit against collateral, we may find that we are under-secured, for example, as a result of sudden declines in market values that reduce the value of collateral or due to fraud with respect to such collateral. If such events or circumstances were to occur, it could result in a potential loss of revenue and have an adverse effect on our business, results of operations and financial condition.

Our allowance for loan and lease losses may prove to be insufficient to absorb losses in our loan portfolio.

Like all financial institutions, we maintain an allowance for loan and lease losses to provide for loans in our portfolio that may not be repaid in their entirety. We believe that our allowance for loan and lease losses is maintained at a level adequate to absorb probable incurred losses inherent in our loan portfolio as of the corresponding balance sheet date. However, our allowance for loan and lease losses may not be sufficient to cover actual loan losses, and future provision for loan losses could materially and adversely affect our operating results. The accounting measurements related to impairment and the allowance for loan and lease losses require significant estimates which are subject to uncertainty and change related to new information and changing circumstances. Our estimates of the risk of loss and amount of loss on any loan are complicated by the

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significant uncertainties surrounding our borrowers’ abilities to successfully execute their business models through changing economic environments, competitive challenges and other factors. Because of the degree of uncertainty and susceptibility of these factors to change, our actual losses may vary from our current estimates.

Our regulators, as an integral part of their examination process, periodically review our allowance for loan and lease losses and may require us to increase our allowance for loan and lease losses by recognizing additional provision for losses charged to expense, or to decrease our allowance for loan and lease losses by recognizing loan charge-offs, net of recoveries. Any such additional provision for loan losses or charge-offs, as required by these regulatory agencies, could have a material adverse effect on our financial condition and results of operations.

Projections for new business initiatives and strategies may prove inaccurate.

The introduction, implementation, withdrawal, success and timing of business initiatives and strategies, including, but not limited to, the opening of new banking centers or entering into new product lines, may be less successful or may be different than anticipated, which could adversely affect our business.

The Bank makes certain projections and develops plans and strategies for its banking and financial products. If we do not accurately determine demand for our banking and financial products, it could result in us incurring significant expenses without the anticipated increases in revenue, which could result in a material adverse effect on the Bank’s business.

We may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations and financial condition.

When we sell mortgage loans, whether as whole loans or pursuant to a securitization, we are required to make customary representations and warranties to the purchaser about the mortgage loans and the manner in which they were originated. Our whole loan sale agreements require us to repurchase or substitute mortgage loans in the event we breach any of these representations or warranties. In addition, we may be required to repurchase mortgage loans as a result of borrower fraud. While we have taken steps to enhance our underwriting policies and procedures, there can be no assurance that these steps will be effective or reduce risk associated with loans sold in the past. If the level of repurchase and indemnity activity becomes material, our liquidity, results of operations and financial condition may be adversely affected.

Competition in the financial services industry is intense and could result in our losing business or experiencing reduced margins.

We operate in a highly competitive industry that could become even more competitive as a result of legislative, regulatory and technological changes, and continued consolidation. We face aggressive competition from other domestic and foreign lending institutions as well as from numerous other providers of financial services. The ability of non-banking financial institutions to provide services previously limited to commercial banks has intensified competition. Because non-banking financial institutions are not subject to the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures. Securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. The OCC has recently announced that it will accept applications for national bank charters from non-depository financial technology companies engaged in banking activities. These developments may significantly change the competitive environment in which we conduct business. Some of our competitors have greater financial resources and/or face fewer regulatory constraints. Credit unions that compete with us have advantages that allow them to price products and services more competitively. As a result of these various sources of competition, we could lose business to competitors or be forced to price products and services on less advantageous terms to retain or attract clients, either of which would adversely affect our profitability.

Clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding.

Checking and savings account balances and other forms of client deposits could decrease if clients perceive alternative investments as providing superior expected returns. When clients move money out of bank deposits in favor of alternative investments, we can lose a relatively inexpensive source of funds, increasing our funding costs.

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Consumers may decide not to use banks to complete their financial transactions, or deposit funds electronically with banks having no branches within our market area, which could affect net income.

Technology and other changes allow parties to complete financial transactions without banks. For example, consumers can pay bills and transfer funds directly without banks. Consumers can also shop for higher deposit interest rates at banks across the country, which may offer higher rates because they have few or no physical branches and open deposit accounts electronically. This process could result in the loss of fee income, as well as the loss of client deposits and the income generated from those deposits, in addition to increasing our funding costs.

Our wealth management business subjects us to a variety of investment and market risks.

At December 31, 2018, we had $2.6 billion in assets under management. A sharp decline in the stock market could negatively impact the amount of assets under management and thus subject our earnings to additional risks and uncertainties.

Negative public opinion could damage our reputation and adversely impact business operations and revenues.

As a financial institution, our earnings and capital are subject to risks associated with negative public opinion. Negative public opinion could result from our actual or alleged conduct in any number of activities, including lending practices, the failure of any product or service sold by us to meet our clients’ expectations or applicable regulatory requirements, corporate governance and acquisitions, or from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can adversely affect our ability to attract and/or retain clients and can expose us to litigation and regulatory action. Actual or alleged misconduct by one of our businesses can result in negative public opinion about our other businesses. Negative public opinion could also affect our ability to borrow funds in the unsecured wholesale debt markets.

We rely on other companies to provide key components of our business infrastructure, creating risks of failures by such companies and cybersecurity incidents involving our customers’ information.

Third parties provide key components of our business infrastructure, such as banking services, processing and Internet connections and network access. Any disruption in such services provided by these third parties or any failure of these third parties to handle current or higher volumes of use could adversely affect our ability to deliver products and services to clients and otherwise to conduct business. Technological or financial difficulties of a third-party service provider could adversely affect our business to the extent those difficulties result in the interruption or discontinuation of services provided by that party. These vendors provide services that support our operations, including the storage and processing of sensitive consumer and business customer data, as well as our sales efforts. A cybersecurity breach of a vendor's system may result in theft of our data or disruption of business processes. A material breach of customer data security at a service provider's site may negatively impact our business reputation and cause a loss of customers, result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions, and may result in litigation. We may experience liability to our customers for losses arising from a breach of a vendor's data security system. We rely on our outsourced service providers to implement and maintain prudent cybersecurity controls. Furthermore, we may not be insured against all types of losses as a result of third-party failures, and our insurance coverage may be inadequate to cover all losses resulting from system failures or other disruptions. Failures in our business infrastructure could interrupt the operations or increase the costs of doing business.

We rely on our systems, employees and certain counterparties, and certain failures could adversely affect our operations.

We are exposed to many types of operational risk, including the risk of fraud by employees and outsiders, clerical and record-keeping errors, and computer/telecommunications systems malfunctions. Our businesses are dependent on our ability to process a large number of increasingly complex transactions. If any of our financial, accounting or other data processing systems fail or have other significant shortcomings, we could be adversely affected. We depend on internal systems and outsourced technology to support these data storage and processing operations. Our inability to use or access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of our business operations. In recent years, some banks have experienced denial of service attacks in which individuals or organizations flood the bank's website with extraordinarily high volumes of traffic, with the goal and effect of disrupting the ability of the bank to process transactions. We could be adversely affected if one of our employees causes a significant operational break-down or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems.

We are also at risk of the impact of natural disasters, terrorism and international hostilities on our systems or for the effects of outages or other failures involving power or communications systems operated by others.

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Misconduct by employees could include fraudulent, improper or unauthorized activities on behalf of clients or improper use of confidential information. We may not be able to prevent employee errors or misconduct, and the precautions we take to detect this type of activity might not be effective in all cases. Employee errors or misconduct could subject us to civil claims for negligence or regulatory enforcement actions, including fines and restrictions on our business.

In addition, there have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts. The recent massive breach of the systems of a credit bureau presents additional threats as criminals now have more information about a larger portion of our country's population than past breaches have involved, which could be used by criminals to pose as customers initiating transfers of money from customer accounts. Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers. Such activity can result in financial liability and harm to our reputation.

Unauthorized disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other breaches in the security of our systems could severely harm our business.

As part of our business, we collect, process and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties. Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, theft of information, misplaced or lost data, programming and/or human errors, or other similar events. If information security is breached, information can be lost or misappropriated, resulting in financial loss or costs to us or damages to others. Our systems can be rendered inoperable, resulting in our inability to provide service to our customers. Any security breach involving the misappropriation, loss, destruction or unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, expose us to the risk of litigation and liability, disrupt our operations and have a material adverse effect on our business.

Cybersecurity risk management programs are expensive to maintain and will not protect us from all risks associated with maintaining the security of customer data and our proprietary data from external and internal intrusions, disaster recovery and failures in the controls used by our vendors. Employee error or misconduct may result in failure to implement policies and procedures designed to avoid risks. Moreover, as technology and cyberattacks change over time, we must continually monitor and change systems to guard against new threats. We may not know of and be able to guard against a new threat until after an attack has occurred. In addition, the recent massive breach of the systems of a credit bureau presents additional threats. Congress and the legislatures of states in which we operate regularly consider legislation that would impose more stringent data privacy requirements.

Any of these occurrences could result in our diminished ability to operate one or more of our businesses, potential liability to clients, reputational damage and regulatory intervention in the form of requirements, restrictions and penalties, which could adversely affect us.

Weaknesses of other financial institutions could adversely affect us.

Our ability to engage in routine funding transactions could be adversely affected by the actions and lack of commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry in general, have led in the past to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions in the future. A default, or threatened default, of a large institution could negatively impact the entire financial system, and could expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due us. There is no assurance that any such losses would not materially and adversely affect our financial condition or results of operations.

Maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services.

Our success depends, in part, on our ability to adapt products and services to evolving industry standards. There is increasing pressure to provide products and services at lower prices, which can reduce net interest income and noninterest income from fee-based products and services. In addition, the widespread adoption of new technologies could require us to make substantial capital expenditures to modify or adapt existing products and services or develop new products and services. We may not be successful in introducing new products and services in response to industry trends or developments in technology or those new

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products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to increased costs.

We may not pay dividends on our common shares.

Holders of our common shares are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments. Although we have historically declared cash dividends on our common shares, we are not required to do so and may reduce or eliminate our common share dividend in the future. Additionally, our funds to pay dividends on common shares are dependent upon dividends paid to us by the Bank, which are subject to regulatory restrictions in certain circumstances. A reduction in our dividend rate could adversely affect the market price of our common shares.

Our liquidity is dependent upon our ability to receive dividends from our subsidiaries, which accounts for most of our revenue and could affect our ability to pay dividends, and we may be unable to enhance liquidity from other sources.

We are a separate and distinct legal entity from our subsidiaries, notably First Financial Bank. We receive substantially all of our revenue from dividends from our subsidiaries. These dividends are the principal source of funds to pay dividends on our common shares and interest and principal on outstanding debt. Various federal and/or state laws and regulations limit or restrict the amount of dividends that the Bank and certain of our non-bank subsidiaries may pay us. Additionally, if our subsidiaries’ earnings are not sufficient to make dividend payments to us while maintaining adequate capital levels, we may not be able to make dividend payments to our common shareholders. As of December 31, 2018, the Bank had $181.3 million available to pay dividends to First Financial without prior regulatory approval.

To enhance liquidity, we may from time to time borrow under credit facilities or other indebtedness. Turbulence in the capital and credit markets may cause many lenders and institutional investors to reduce or cease to provide funding to borrowers and, as a result, we may not be able to further increase liquidity through additional borrowings.

Limitations on our ability to receive dividends from our subsidiaries or an inability to increase liquidity through additional borrowings, or inability to maintain, renew or replace existing credit facilities, could have a material adverse effect on our liquidity and on our ability to pay dividends on our common shares and interest and principal on our debt.

As of December 31, 2018, we had indebtedness of $1.6 billion.

Disruptions in our ability to access capital markets may negatively affect our capital resources, liquidity and business.

We depend on wholesale capital markets to provide us with sufficient capital resources and liquidity to meet our commitments and business needs, and to accommodate the transaction and cash management needs of our clients. Other sources of funding available to us, and upon which we rely as regular components of our liquidity risk management strategy, include inter-bank borrowings, repurchase agreements and borrowings from the Federal Home Loan Bank system. Any occurrence that may limit our access to these sources, such as a decline in the confidence of debt purchasers, a downgrade in our credit rating, or our depositors or counterparties participating in the capital markets, may adversely affect our capital costs and our ability to raise capital and, in turn, our liquidity.

Numerous facts and circumstances are considered when evaluating the carrying value of our goodwill. One of those considerations is our market capitalization, evaluated over a reasonable period of time, in relation to the aggregate estimated fair value of the reporting unit. While this comparison provides some relative market information regarding the estimated fair value of our reporting unit, it is not determinative and needs to be evaluated in the context of the current economic and political environment. However, significant and/or sustained declines in First Financial’s market capitalization, especially in relation to First Financial’s book value, could be an indication of potential impairment of goodwill.

A reduction in our credit rating could adversely affect us or the holders of our securities.

The credit rating agencies rating our creditworthiness regularly evaluate the Company, and credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including conditions affecting the financial services industry and the economy and changes in rating methodologies. There can be no assurance that we will maintain our current credit rating. A downgrade of the credit rating of the Company could adversely affect our access to liquidity and capital, and could significantly increase our cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to us or purchase our securities. This could affect our growth, profitability and financial condition, including liquidity.

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We may feel challenged in retaining key officers and employees.

Our future operating results depend substantially upon the continued service of our executive officers and key personnel. Our future operating results also depend in significant part upon our ability to attract and retain qualified management, lending, financial, technical, marketing, sales, and support personnel. Competition for qualified personnel is intense and we cannot ensure success in attracting or retaining qualified personnel. There may be only a limited number of persons with the requisite skills to serve in these positions, and it may be increasingly difficult for us to hire personnel over time.

Our ability to retain key officers and employees may be further impacted by legislation and regulation affecting the financial services industry. For example, legislation and bank regulatory action that places restrictions on executive compensation at, and the pay practices of, financial institutions may further impact our ability to compete for talent with other industries that are not subject to the same limitations as financial institutions.

Our business, financial condition, or results of operations could be materially adversely affected by the loss of any of our key employees, or our inability to attract and retain skilled employees.

Potential acquisitions may disrupt our business and dilute shareholder value, and we may not be able to successfully consummate or integrate such acquisitions.

Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things:

•potential exposure to unknown or contingent liabilities of the target company;

•exposure to potential asset quality issues of the target company;

•difficulty and expense of integrating the operations and personnel of the target company;

•difficulty or added costs in the wind-down of non-strategic operations;

•potential disruption to our business;

•potential diversion of our management’s time and attention;

•the possible loss of key employees and customers of the target company;

•difficulty in estimating the value (including goodwill) of the target company;

•difficulty in receiving appropriate regulatory approval for any proposed transaction;

•difficulty in estimating the fair value of acquired assets, liabilities and derivatives of the target company; and

•potential changes in banking, or tax laws or regulations or accounting rules that may affect the target company.

We regularly evaluate merger and acquisition opportunities and conduct due diligence activities related to possible transactions with other financial institutions and financial services companies. As a result, merger or acquisition discussions and, in some cases negotiations, may take place and future mergers or acquisitions involving cash, debt or equity securities may occur at any time. Acquisitions could involve the payment of a premium over book and market values, and, therefore, some dilution of our tangible book value and net income per common share may occur in connection with any future transaction. Furthermore, any difficulty integrating businesses acquired as a result of a merger or acquisition and the failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition could have an adverse impact on our liquidity, results of operations and financial condition and any such integration could divert management’s time and attention from managing our company in an effective manner.

Any merger or acquisition opportunity that we decide to pursue will ultimately be subject to regulatory approval or other closing conditions. We may expend substantial time and resources pursuing potential acquisitions which may not be consummated because regulatory approval or other closing requirements are not satisfied. Additionally, the banking regulators and applicable laws and regulations may restrict our ability to engage in acquisitions under certain circumstances.

Our accounting policies and processes are critical to how we report our financial condition and results of operations. They require management to make estimates about matters that are uncertain.

Accounting policies and processes are fundamental to how we record and report our financial condition and results of operations. Management must exercise judgment in selecting and applying many of these accounting policies and processes so they comply with Generally Accepted Accounting Principles in the United States (GAAP).

Management has identified certain accounting policies as being critical because they require management’s judgment to ascertain the valuations of assets, liabilities, commitments and contingencies. A variety of factors could affect the ultimate valuation that is made when recording income, recognizing an expense, recovering an asset, valuing an asset or liability, or

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reducing a liability. We have established detailed policies and control procedures that are intended to ensure these critical accounting estimates and judgments are well controlled and applied consistently. In addition, our policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. Because of the uncertainty surrounding our judgments and the estimates pertaining to these matters, we cannot guarantee that we will not be required to adjust accounting policies or re-state prior period financial statements.

See the “Critical Accounting Policies” in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1- Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements, in our 2018 Annual Report (included within Exhibit 13 to this Annual Report on Form 10-K) for more information.

Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition.

From time to time, the Financial Accounting Standards Board (FASB) and SEC change the financial accounting and reporting standards that govern the preparation of our financial statements. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in us restating prior period financial statements.

In June 2016, the FASB issued a new accounting standard for recognizing current expected credit losses, commonly referred to as CECL. CECL will result in earlier recognition of credit losses and requires consideration of not only past and current events but also reasonable and supportable forecasts that affect collectibility. First Financial will be required to comply with the new standard in the first quarter of 2020. Upon adoption of CECL, credit loss allowances may increase, which would decrease retained earnings and regulatory capital. The federal banking regulators have adopted a regulation that will allow banks to phase in the day-one impact of CECL on regulatory capital over three years. CECL implementation poses operational risk, including the failure to properly transition internal processes or systems, which could lead to errors, financial misstatements or operational losses.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934 (Exchange Act) is accurately accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision making can be faulty, that alternative reasoned judgments can be drawn, or that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our system of control, misstatements due to error or fraud may occur and not be detected.

Our revenues derived from investment securities may be volatile and subject to a variety of risks.

We generally maintain investment securities and trading positions in the fixed income markets. Unrealized gains and losses associated with our investment portfolio and mark to market gains and losses associated with our investment portfolio are affected by many factors, including our credit position, interest rate volatility and volatility in capital markets, among other economic factors. Our return on such investments could experience volatility, and such volatility may materially adversely affect our financial condition and results of operations. Additionally, accounting regulations may require us to record a charge prior to the actual realization of a loss when market valuations of such securities are impaired and such impairment is considered to be other than temporary.

Risks Related to the Legal and Regulatory Environment

If our regulators deem it appropriate, they can take regulatory actions that could impact our ability to compete for new business, constrain our ability to fund our liquidity needs and increase the cost of our services.

First Financial and its subsidiaries are subject to the supervision and regulation of various state and federal regulators, including the Federal Reserve Board, the FDIC, the SEC, the Consumer Financial Protection Bureau (CFPB), the Financial Industry

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Regulatory Authority (FINRA), the ODFI, and various other state regulatory agencies. As such, we are subject to a wide variety of laws and regulations. As part of their supervisory process, which includes periodic examinations and continuous monitoring, the regulators have the authority to impose restrictions or conditions on our activities and the manner in which we manage the organization. These actions could impact the organization in a variety of ways, including subjecting us to monetary fines, restricting our ability to pay dividends, precluding mergers or acquisitions, limiting our ability to offer certain products or services, or imposing additional capital, operating, or oversight requirements.

The fiscal and monetary policies of the U.S. government and its agencies could have a material adverse effect on our earnings.

The Federal Reserve Board regulates the supply of money and credit in the United States. Its policies determine in large part the cost of funds for lending and investing and the returns earned on those loans and investments, both of which affect the net interest margin. The resultant changes in interest rates can also materially decrease the value of certain financial assets we hold, such as debt securities. The policies of the Federal Reserve Board can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans. Changes in Federal Reserve Board policies are beyond our control and difficult to predict; consequently, the impact of these changes on our activities and results of operations is difficult to predict.

We are subject to ongoing tax examinations in various jurisdictions. The Internal Revenue Service and other taxing jurisdictions may propose various adjustments to our previously filed tax returns. It is possible that the ultimate resolution of such proposed adjustments, if unfavorable, may be material to the results of operations in the period it occurs.

In the ordinary course of business, we operate in various taxing jurisdictions and are subject to income and non-income taxes. The effective tax rate is based in part on our interpretation of the relevant current tax laws. We believe the aggregate liabilities related to taxes are appropriately reflected in our consolidated financial statements. We review the appropriate tax treatment of all transactions taking into consideration statutory, judicial and regulatory guidance in the context of our tax positions. In addition, we rely on various tax opinions, recent tax audits, and historical experience.

From time to time, we engage in business transactions that may have an effect on our tax liabilities. Where appropriate, we have obtained opinions of outside experts and have assessed the relative merits and risks of the appropriate tax treatment of business transactions taking into account statutory, judicial, and regulatory guidance in the context of the tax position. However, changes to our estimates of accrued taxes can occur due to changes in tax rates, implementation of new business strategies, resolution of issues with taxing authorities regarding previously taken tax positions prior to acquisition and newly enacted statutory, judicial and regulatory guidance. Such changes could affect the amount of our accrued taxes and could be material to our financial position and/or results of operations.

In the event the Internal Revenue Service, State of Ohio, or other state tax officials propose adjustments to our previously filed tax returns (or those of our subsidiaries), it is possible that the ultimate resolution of the proposed adjustments, if unfavorable, may be material to the results of operations in the period it occurs.

Changes in tax laws could adversely affect our performance.

We are subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, property, franchise, withholding and ad valorem taxes. Changes to our taxes could have a material adverse effect on our results of operations. In addition, our customers are subject to a wide variety of federal, state and local taxes. Changes in taxes paid by our customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for our loans and deposit products. In addition, such negative effects on our customers could result in defaults on the loans we have made and decrease the value of mortgage-backed securities in which we have invested.

On December 22, 2017, H.R.1, formally known as the “Tax Cuts and Jobs Act,” was enacted into law. This new tax legislation, among other changes, limits the amount of state, federal and local taxes that taxpayers are permitted to deduct on their individual tax returns and eliminates other deductions in their entirety. Such limits and eliminations may result in customer defaults on loans we have made and decrease the value of mortgage-backed securities in which we have invested.

Item 1B.  Unresolved Staff Comments.

None.

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Item 2.  Properties.

At December 31, 2018, the Company operated 159 banking centers, 37 of which are leased facilities.  Our core banking operating markets are located within the four state region of Ohio, Indiana, Kentucky and Illinois. First Financial's executive office is a leased facility located in Cincinnati, Ohio and we operate 67 banking centers in Ohio, three banking centers in Illinois, 73 banking centers in Indiana and 16 banking centers in Kentucky. In addition, we operate our Commercial Finance division, responsible for our insurance lending business and franchise lending business, from a non-banking center location in Indiana.

Item 3.  Legal Proceedings.

We are from time to time engaged in various litigation matters including the defense of claims of improper or fraudulent loan practices or lending violations, and other matters, and we have a number of unresolved claims pending. In addition, as part of the ordinary course of business, we are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, and foreclosure interests, that are incidental to our regular business activities. While the ultimate liability with respect to these other litigation matters and claims cannot be determined at this time, we believe that damages, if any, and other amounts relating to pending matters are not likely to be material to our consolidated financial position or results of operations, except as described above. Reserves are established for these various matters of litigation, when appropriate under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel.

Item 4. Mine Safety Disclosures.

Not applicable.

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Supplemental Item. Executive Officers of the Registrant.

The following table sets forth information concerning the executive officers of First Financial as of February 21, 2019. The executive officers perform policy-making functions for First Financial. The officers are elected annually at the organizational meeting of the board of directors and serve until the next organizational meeting, or until their successors are elected and duly qualified.

	Position with First Financial Bancorp	Age
Claude E. Davis	Executive Chairman	58
Archie M. Brown, Jr.	President and Chief Executive Officer	58
James M. Anderson	EVP, Chief Financial Officer	47
Anthony M. Stollings	EVP, Commercial Banking	64
Catherine M. Myers	EVP, Consumer Banking	57
John M. Gavigan	EVP, Advanced Solutions and Digital Banking	40
Karen B. Woods	EVP, General Counsel and Chief Risk Officer	50
William R. Harrod	EVP, Chief Credit Officer	51
Amanda N. Neeley	EVP, Chief Marketing Officer	38
Scott T. Crawley	Corporate Controller and Principal Accounting Officer	38

The following is a brief description of the business experience over the past five years of the individuals named above.

Claude E. Davis - Claude Davis became the Executive Chairman of First Financial effective April 1, 2018. Prior to that date, he served as Chief Executive Officer of First Financial and the Bank since October 1, 2004.  He has served on the board of directors of each of First Financial and the Bank since October 1, 2004 and also has been Chairman of the Board of Directors of the Bank since October 1, 2004.  From October 1, 2004 until December 1, 2014, Mr. Davis held the title of President of First Financial.  From October 1, 2004 until August 20, 2013, Mr. Davis held the title of President of the Bank.  Mr. Davis has over 30 years of experience in the financial services industry.

Archie M. Brown - Archie Brown is the President, Chief Executive Officer and a director of First Financial and the Bank, having been appointed to these positions on April 1, 2018 following First Financial’s acquisition of MainSource Financial Group, Inc. Previously, he served as the President and Chief Executive Officer of MainSource from August 2008 until April 2018 and chairman of the board of MainSource from April 2011 until April 2018.

James M. Anderson - Jamie Anderson became the Chief Financial Officer of First Financial and the Bank on April 1, 2018 following the merger of First Financial and MainSource. Previously Mr. Anderson served as the Chief Financial Officer of MainSource from January 2006 to April 2018. Prior to that role, he served in the following roles at MainSource: Administrative Vice President and Principal Accounting Officer from March 2005 to January 2006, Controller and Principal Accounting Officer from March 2002 to March 2005, and Controller from September 2000 to March 2002. Mr. Anderson is a certified public accountant (inactive).

Anthony M. Stollings - Tony Stollings is presently the Executive Vice President, Commercial Banking of First Financial and the Bank. He previously served as President, Chief Banking Officer from April 2017 to January 2018 and as the President of

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Consumer Banking from January 2017 to April 2017.  From December 2014 to January 2017 Mr. Stollings served as the President and Chief Operating Officer of First Financial and Chief Operating Officer of the Bank and from January 2013 through November 2014 he served as the Chief Financial Officer of both companies.  Mr. Stollings has also previously served as the Chief Risk Officer and the Chief Accounting Officer of both companies.

Catherine M. Myers- Cathy Myers serves as Executive Vice President, Consumer Banking for First Financial and the Bank.  She is responsible for Retail Banking, Wealth Management, Mortgage Banking and Business Banking.  Cathy joined First Financial in 2018 and has over 34 years of experience in the banking industry. Prior to joining First Financial, Cathy served in various leadership capacities at U.S. Bank and Key Bank.  Most recently she was the USB Consumer Bank Technology Executive.  She began her career in banking as a Management Trainee for First National Bank of Southwestern Ohio.

John M. Gavigan- John Gavigan is the Executive Vice President, Advanced Solutions and Digital Banking for First Financial where he is responsible for Enterprise Digital Solutions, Information Technology, Operations, Customer Contact Center, Project Management and Corporate Facilities.  Mr. Gavigan was appointed to his current role in late 2018, having previously served as Chief Administrative Officer for the majority of 2018 and Chief Financial Officer from late 2014 through early 2018. He joined the Company in 2008 as Assistant Controller and also served as Corporate Controller from 2011 through 2014. Mr. Gavigan is a certified public accountant (inactive).

Karen B. Woods - Karen Woods serves as General Counsel and Chief Risk Officer of First Financial. She joined First Financial in April 2018 following the merger of First Financial and MainSource. She previously served as Corporate Counsel and Chief Risk Officer of MainSource from January 2016 to April 2018. Prior to joining MainSource, Ms. Woods was a partner at Krieg DeVault LLP in Indianapolis, Indiana. Ms. Woods previously served as a judicial law clerk to the Honorable John G. Baker, Indiana Court of Appeals.

William R. Harrod - Bill Harrod is the Chief Credit Officer of First Financial, a role he has held since October 2017. He is responsible for managing and monitoring the loan portfolio and other related credit functions in a risk appropriate manner including underwriting, approval, and collections. Mr. Harrod first joined First Financial in 2015 and has held various credit and management positions since then in specialty banking, corporate banking, commercial and industrial lending and commercial finance.

Amanda N. Neeley - Mandy Neeley is the Chief Marketing Officer and Strategy Officer of First Financial, a role she has held since 2016.  Ms. Neeley is responsible for the launch and evolution of the First Financial brand, the introduction of the Premier Business Bank acquisition strategy, the advancement of sales process and enterprise CRM, and development of a formalized strategic planning program.  Ms. Neeley has spent her entire career in banking with the Bank, beginning as a part-time teller during summers in college. After graduating, she became a Marketing Coordinator with First Financial starting in 2003 and has held various marketing roles throughout her time with the Bank.

Scott T. Crawley - Scott Crawley is the Corporate Controller and Principal Accounting Officer of both First Financial and the Bank, where he is responsible for the Company’s Accounting department. He was appointed to these roles in December 2014, and January 2017, respectively. He joined First Financial in January 2012 as the Assistant Controller, a position he held until December 2014. Mr. Crawley is a certified public accountant.

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PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

(a)           Market information, holders, dividends

First Financial's common shares are listed on The NASDAQ Global Select Stock Market® under the symbol "FFBC." The information contained in the “Quarterly Financial And Common Stock Data” in First Financial’s Annual Report to Shareholders for the year ended December 31, 2018 with respect to our stock price and dividends, is incorporated herein by reference in response to this item.

As of February 21, 2019, our common shares were held by approximately 4,339 shareholders of record, a number that does not include beneficial owners who hold shares in “street name,” or shareholders from previously acquired companies that have not exchanged their stock. At December 31, 2018, a total of 62,410 stock options and 462,446 shares of restricted stock were outstanding. Additional information about stock options, restricted stock and restricted stock units is included in Note 19 - Stock Options and Awards in the Notes to Consolidated Financial Statements in First Financial’s 2018 Annual Report and in Item 12 below.

The payment of future cash dividends is at the discretion of our Board of Directors and subject to a number of factors, including results of operations, general business conditions, growth, financial condition, regulatory limitation and other factors deemed relevant by the Board. Further, our ability to pay future cash dividends is subject to certain regulatory requirements and restrictions discussed in the Supervision and Regulationsection in Item 1 above. For further information see Note 3 - Restrictions on Cash and Dividends in the Notes to Consolidated Financial Statements of First Financial's 2018 Annual Report (included as Exhibit 13 of this report), which is incorporated by reference in response to this item.

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2018 with respect to compensation plans under which our common shares may be issued:

Securities authorized for issuance under equity compensation plans

	Number of securities to be issued upon exercise of  outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities  remaining available for  future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan category	(a)	(b)		(c) (1)
Equity compensation plans approved by security holders	62,410	$	9.08	1,882,484
Equity compensation plans not approved by security holders	N/A	N/A		N/A

(1) The securities included in this column are available for issuance under the First Financial Bancorp. Amended and Restated 2012 Stock Plan.  The Amended and Restated 2012 Plan includes provisions regarding adjustments to the number of securities available for future issuance under the Amended and Restated 2012 Plan in the event of a merger, reorganization, consolidation, recapitalization, reclassification, split-up, spin-off, separation, liquidation, stock dividend, stock split, reverse stock split, property dividend, share repurchase, share combination, share exchange, issuance of warrants, rights or debentures or other change in corporate structure of First Financial affecting First Financial’s common shares.  In any of the foregoing events, the Amended and Restated 2012 Plan permits the Board of Directors or the Compensation Committee of the board to make such substitution or adjustments in the aggregate number and kind of shares available for issuance under the respective plans as the Board of Directors or the Compensation Committee, as the case may be, determine to be appropriate in its sole discretion.  All of the securities reported in column (c) are available under the Amended and Restated 2012 Plan.

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Stock Performance Graph

The stock performance graph contained in “Total Return to Shareholders” of First Financial's 2018 Annual Report (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item.

(b) Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

(c) The following table shows the total number of shares repurchased in the fourth quarter of 2018.

Issuer Purchases of Equity Securities

	(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
October 1 to October 31, 2018
Share repurchase program	0	$	0.00	0	3,509,133
Stock Plans	0	0.00		N/A	N/A
November 1 to November 30, 2018
Share repurchase program	0	$	0.00	0	3,509,133
Stock Plans	0	0.00		N/A	N/A
December 1 to December 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	0	$	0.00	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) In October 2012, the Board of Directors of First Financial approved a stock repurchase plan under which it authorized the purchase of up to 5,000,000 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

In January 2019, the Board of Directors announced that it approved a new stock repurchase plan in replacement of the plan approved in 2012. The 2019 plan authorizes the purchase of up to 5,000,000 shares of the Company’s common stock.

25

Item 6.  Selected Financial Data.

The information contained in Table 1 of the Management’s Discussion and Analysis section of First Financial's 2018 Annual Report (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results Of Operations.

The information contained in the Management’s Discussion and Analysis section (including certain forward looking statements) of First Financial’s 2018 Annual Report (included as Exhibit 13 of this report) is incorporated herein by reference in response to this item.

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk.

The information contained in the Market Risk section and in Table 14 - Market Risk Disclosure of the Management’s Discussion and Analysis section in First Financial's 2018 Annual Report (included as Exhibit 13 of this report), is incorporated herein by reference in response to this item.

Item 8.  Financial Statements and Supplementary Data.

The consolidated financial statements and the reports of our independent registered public accounting firm included in the Consolidated Financial Statements and the Notes to Consolidated Financial Statements in First Financial’s 2018 Annual Report (included as Exhibit 13 of this report), are incorporated herein by reference.

The Quarterly Financial and Common Stock Data at the end of the Notes to Consolidated Financial Statements in First Financial’s 2018 Annual Report (included as Exhibit 13 of this report), is incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

First Financial’s chief executive officer and chief financial officer, together with other members of senior management, have evaluated First Financial’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act)

as of the end of the fiscal year covered by this report. Based upon that evaluation, First Financial’s chief executive officer and chief financial officer have concluded that such disclosure controls and procedures are effective to ensure that material information required to be disclosed by First Financial, including its consolidated subsidiaries, in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Internal Control Over Financial Reporting

Management's Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm included in First Financial’s 2018 Annual Report (included as Exhibit 13 of this report), are incorporated herein by reference.

Changes in Internal Controls Over Financial Reporting

There were no changes in First Financial’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, First Financial’s internal control over financial reporting.

Item 9B.  Other Information.

None.

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PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

Certain information concerning executive officers of First Financial has been supplied in the “Supplemental Item. Executive Officers of the Registrant” of this Form 10-K. Information appearing under “Election of Directors,” “Corporate Governance - Board Committees,” and “Shareholder Nominations for Election to the Board” of First Financial's Definitive Proxy Statement with respect to the Annual Meeting of Shareholders to be held on May 28, 2019, and which is expected to be filed with the SEC, pursuant to Regulation 14A of the Exchange Act (First Financial’s Proxy Statement) within 120 days of the close of our fiscal year, is incorporated herein by reference in response to this item.

Item 11.  Executive Compensation.

The information appearing under the headings “Meetings of the Board of Directors and Committees of the Board,” “Compensation Discussion and Analysis,” “Executive Compensation,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” in First Financial’s Proxy Statement is incorporated herein by reference in response to this item.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information appearing under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” set forth in Part II, Item 5 and “Shareholdings of Directors, Executive Officers, and Nominees for Director” of First Financial’s Proxy Statement is incorporated herein by reference in response to this item.

Item 13.  Certain Relationships and Related Transactions.

The information appearing in Note 13 - Loans to Related Parties in the Notes to Consolidated Financial Statements included in First Financial’s 2018 Annual Report (included as Exhibit 13 of this report) is incorporated herein by reference in response to this item.  Reference is also made to information appearing under the heading “Corporate Governance-Transactions with Related Parties” in First Financial’s Proxy Statement in response to this item.

Item 14.  Principal Accounting Fees and Services.

Information appearing under the heading “Independent Registered Public Accounting Firm Fees” in First Financial’s Proxy Statement is incorporated herein by reference in response to this item.

27

PART IV

Item 15.  Exhibits, Financial Statement Schedules.

(a)	(1)	The consolidated financial statements (and report thereon) listed below are incorporated herein by reference from First Financial’s 2018 Annual Report (included as Exhibit 13 of this report) as noted:
		Reports of Independent Registered Public Accounting Firm - Incorporated by reference from First Financial’s 2018 Annual Report
		Consolidated Balance Sheets as of December 31, 2018 and 2017 - Incorporated by reference from First Financial’s 2018 Annual Report
		Consolidated Statements of Income for years ended December 31, 2018, 2017, and 2016 - Incorporated by reference from First Financial’s 2018 Annual Report
		Consolidated Statements of Comprehensive Income for years ended December 31, 2018, 2017, and 2016 - Incorporated by reference from First Financial’s 2018 Annual Report
		Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2018, 2017, and 2016 - Incorporated by reference from First Financial’s 2018 Annual Report
		Consolidated Statements of Cash Flows for years ended December 31, 2018, 2017, and 2016 - Incorporated by reference from First Financial’s 2018 Annual Report
		Notes to Consolidated Financial Statements - Incorporated by reference from First Financial’s 2018 Annual Report
	(2)	Financial Statement Schedules: Schedules to the consolidated financial statements required by Regulation S-X are not required under the related instructions, or are inapplicable, and therefore have been omitted
	(3)	Exhibits:

The documents listed below are filed/furnished with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference as noted:

Exhibit

Number

2.1	Purchase and Assumption Agreement Whole Bank All Deposits, among the Federal Deposit Insurance Corporation, receiver of Peoples Community Bank, West Chester, Ohio, the Federal Deposit Insurance Corporation and First Financial Bank, National Association, dated as of July 31, 2009 (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on August 3, 2009 and incorporated herein by reference) (Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K)(File No. 000-12379).
2.2	Purchase and Assumption Agreement Modified Whole Bank All Deposits, among the Federal Deposit Insurance Corporation, receiver of Irwin Union Bank and Trust Company, Columbus, Indiana, the Federal Deposit Insurance Corporation and First Financial, dated as of September 18, 2009 (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on September 23, 2009 and incorporated herein by reference) (Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (File No. 000-12379).
2.3	Purchase and Assumption Agreement Modified Whole Bank All Deposits, among the Federal Deposit Insurance Corporation, receiver of Irwin Union Bank, F.S.B., Louisville, Kentucky, the Federal Deposit Insurance Corporation and First Financial, dated as of September 18, 2009 (filed as Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed on September 23, 2009 and incorporated herein by reference) (Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (File No. 000-12379).
2.4	Agreement and Plan of Merger by and among First Financial Bank, National Association, AG-OSF Holdings, LLC, and Oak Street Holdings Corporation dated July 23, 2015 (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on July 24, 2015 and incorporated herein by reference)(certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (File No. 001-34762).
2.5	Agreement and Plan of Merger By and between First Financial Bancorp. and MainSource Financial Group, Inc. dated as of July 25, 2017 (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on July 27, 2017 and incorporated herein by reference)(certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (File No. 001-34762).

28

3.1	Amended Articles of Incorporation of First Financial Bancorp (reflecting all amendments filed with the Ohio Secretary of State) [for purposes of SEC reporting compliance only - not filed with the Ohio Secretary of State] (filed as exhibit 3.2 to the Form S-3 on July 31, 2014 and incorporated hereby by reference)(File No. 333-197771).
3.2	Amended and Restated Regulations of First Financial Bancorp, amended as of July 28, 2015 (filed as Exhibit 3.1 to the Form 8-K filed on July 29, 2015 and incorporated herein by reference) (File No. 000-34762).
4.1	Letter Agreement, dated as of December 23, 2008, between First Financial Bancorp. and the United States Department of the Treasury, which includes the Securities Purchase Agreement - Standard Terms (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 30, 2008, and incorporated herein by reference) (File No. 000-12379).
4.2	Warrant to Purchase up to 930,233 shares of Common Stock dated as of December 23, 2008 (filed as Exhibit 4.1 to the Form 8-K filed on December 30, 2008 and incorporated herein by reference) (File No. 000-12379).
4.3	Indenture, dated as of August 25, 2015, by and between First Financial Bancorp. and Wells Fargo Bank, National Association, as Trustee. (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on August 26, 2015, and incorporated herein by reference) (File No. 000-34762).
4.4	Supplemental Indenture, dated as of August 25, 2015, by and between First Financial Bancorp. and Wells Fargo Bank, National Association, as Trustee. (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on August 26, 2015, and incorporated herein by reference) (File No. 000-34762).
4.5	Form of 5.125% Subordinated Note due 2025 (included as part of Exhibit 4.4 to this Annual Report).
4.6	Indenture dated as of December 19, 2002 between MainSource Financial Group, Inc., as issuer, and State Street Bank and Trust Company of Connecticut, N.A., as trustee, re: floating rate junior subordinated deferrable interest debentures due 2032 (incorporated by reference to Exhibit 4.6 to the Annual Report on Form 10‑K of MainSource Financial Group, Inc. for the fiscal year ended December 31, 2002 filed March 28, 2003 with the Commission).
4.7	Amended and Restated Declaration of Trust dated as of December 19, 2002 among State Street Bank and Trust Company of Connecticut, N.A., as institutional trustee, MainSource Financial Group, Inc., as sponsor, and James L. Saner Sr., Donald A. Benziger and James M. Anderson, as administrators (incorporated by reference to Exhibit 4.7 to the Annual Report on Form 10‑K of MainSource Financial Group, Inc. for the fiscal year ended December 31, 2002 filed March 28, 2003 with the Commission).
4.8	Guarantee Agreement dated as of December 19, 2002 between MainSource Financial Group, Inc., and State Street Bank and Trust Company of Connecticut, N.A (incorporated by reference to Exhibit 4.8 to the Annual Report on Form 10‑K of MainSource Financial Group, Inc. for the fiscal year ended December 31, 2002 filed March 28, 2003 with the Commission).
4.9	Indenture dated as of April 1, 2003 between MainSource Financial Group, Inc., as issuer, and U.S. Bank, N.A., as trustee, re: floating rate junior subordinated deferrable interest debentures due 2033 (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10‑Q of MainSource Financial Group, Inc. for the quarter ended June 30, 2003 filed August 14, 2003 with the Commission).
4.10	Amended and Restated Declaration of Trust dated as of April 1, 2003 among U.S. Bank, N.A., as institutional trustee, MainSource Financial Group, Inc., as sponsor, and James L. Saner Sr., Donald A. Benziger and James M. Anderson, as administrators (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10‑Q of MainSource Financial Group, Inc. for the quarter ended June 30, 2003 filed August 14, 2003 with the Commission).
4.11	Guarantee Agreement dated as of April 1, 2003 between MainSource Financial Group, Inc., and U.S. Bank, N.A (incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10‑Q of MainSource Financial Group, Inc. for the quarter ended June 30, 2003 filed August 14, 2003 with the Commission).
4.12	Indenture dated as of June 12, 2003 between MainSource Financial Group, Inc., as issuer, and The Bank of New York, as trustee, re: rate junior subordinated deferrable interest debentures due (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10‑Q of MainSource Financial Group, Inc. for the quarter ended June 30, 2003 filed August 14, 2003 with the Commission).
4.13	Amended and Restated Declaration of Trust dated as of June 12, 2003 among The Bank of New York, as institutional trustee, MainSource Financial Group, Inc., as sponsor, and James L. Saner Sr., Donald A. Benziger and James M. Anderson, as administrators (incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10‑Q of MainSource Financial Group, Inc. for the quarter ended June 30, 2003 filed August 14, 2003 with the Commission).
4.14	Guarantee Agreement dated as of June 12, 2003 between MainSource Financial Group, Inc., and The Bank of New York (incorporated by reference to Exhibit 4.6 to the Quarterly Report on Form 10‑Q of MainSource Financial Group, Inc. for the quarter ended June 30, 2003 filed August 14, 2003 with the Commission).
4.15	Form of Amended and Restated Declaration of Trust dated as of October 13, 2006, of MainSource Statutory Trust IV, among MainSource Financial Group, Inc. as sponsor, Wells Fargo Delaware Trust Company as Delaware trustee and Wells Fargo Bank, National Association, as institutional trustee (incorporated by reference to Exhibit 10.1 to the periodic report on Form 8‑K of MainSource Financial Group, Inc. filed October 17, 2006 with the Commission).

29

4.16	Form of Indenture dated as of October 13, 2006, between MainSource Financial Group, Inc. and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 10.2 to the periodic report on Form 8‑K of MainSource Financial Group, Inc. filed October 17, 2006 with the Commission).
4.17	Form of Guarantee Agreement dated as of October 13, 2006, between MainSource Financial Group, Inc., as guarantor, and Wells Fargo Bank, National Association, as guarantee trustee (incorporated by reference to Exhibit 10.3 to the periodic report on Form 8‑K of MainSource Financial Group, Inc. filed October 17, 2006 with the Commission).
4.18	Warrant for the Purchase of Shares of MainSource Financial Group, Inc. Common Stock (incorporated by reference to Exhibit 4.2 to the Report on Form 8‑K of MainSource Financial Group, Inc. filed January 20, 2009 with the Commission).
10.1	First Financial Bancorp. Dividend Reinvestment and Share Purchase Plan, dated April 24, 1997 (filed as Exhibit A to a Registration Statement on Form S-3 filed on April 24, 1997, and incorporated herein by reference) (File No. 333-25745).
10.2	First Financial Bancorp. 1999 Stock Incentive Plan for Officers and Employees, dated April 27, 1999 (filed as Exhibit A to the Registrant's Proxy Statement filed on March 22, 1999, and incorporated herein by reference) (File No. 000-12379).*
10.3	Form of Stock Option Agreement for Non-Qualified Stock Options (2005-2008) under the First Financial Bancorp. 1999 Stock Incentive Plan for Officers and Employees (filed as Exhibit 10.2 to the Form 8-K filed on April 22, 2005 and incorporated herein by reference) (File No. 000-12379).*
10.4	First Financial Bancorp. Director Fee Stock Plan amended and restated effective April 20, 2004 (filed as Exhibit 10.12 to the Form10-Q for the quarter ended June 30, 2004 and incorporated herein by reference).*
10.5	Form of Executive Supplemental Retirement Agreement (filed as Exhibit 10.7 to the Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference) (File No. 000-12379).*
10.6	Form of Endorsement Method Split Dollar Agreement (filed as Exhibit 10.8 to the Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference) (File No. 000-12379).*
10.7	First Financial Bancorp. Amended and Restated Deferred Compensation Plan (filed as Exhibit 10.9 to the Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference) (File No. 000-12379).*
10.8	Employment and Non-Competition Agreement between Claude E. Davis and First Financial Bancorp. dated December 30, 2011 (filed as Exhibit 10.1 to First Financial Bancorp’s Form 8-K filed on January 5, 2012 and incorporated herein by reference) (File No. 001-34762).*
10.9	First Financial Bancorp. Key Executive Short Term Incentive Plan Amended and Restated March 10, 2015 (originally established in 2011)(filed as Exhibit 10.1 to the Form 8-K on May 25, 2016 and incorporated herein by reference) (File No. 001-34762).*
10.10	Agreement for Stock Award pursuant to the 2011 Key Executive Incentive Plan between First Financial Bancorp. and Claude E. Davis (filed as exhibit 10.1 to the Form 10-K for the year ended December 31, 2014 and incorporated herein by reference) (File No. 000-34762).*
10.11	Form of Agreement for Stock Award pursuant to the Key Executive Incentive Plan between First Financial Bancorp. (3-year holding period) (filed as Exhibit 10.21 to First Financial Bancorp’s Annual Report for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.12	First Financial Bancorp. 2012 Stock Plan (filed as Appendix A to the Definitive Proxy Statement filed on April 13, 2012 and incorporated herein by reference) (File No. 001-34762).*
10.13	Form of Agreement for 2015 Performance Stock Awards under the First Financial Bancorp. 2012 Stock Plan (3-year vesting/accrual of dividends) ) (filed as Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.14	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. 2012 Stock Plan (employees of First Financial Bank, 3-year vesting/accrual of dividends) ) (filed as Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.15	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. 2012 Stock Plan (employees of Oak Street Funding, 3-year vesting/accrual of dividends) ) (filed as Exhibit 10.28 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.16	Form of Agreement for Performance Stock Awards under the First Financial Bancorp. 2012 Stock Plan (3-year vesting/accrual of dividends) ) (filed as Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.17	Form of Agreement for Performance Stock Awards under the First Financial Bancorp. 2012 Stock Plan (employees of Oak Street Funding, 3-year vesting/accrual of dividends) ) (filed as Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*

30

10.18	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. 2012 Stock Plan (Directors, 1-year vest/accrual of dividends) ) (filed as Exhibit 10.31 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.19	First Financial Bancorp. Amended and Restated Key Management Severance Plan effective January 1, 2013 (as approved November 28, 2012) (filed as exhibit 10.2 to the Form 10-K for the year ended December 31, 2014 and incorporated herein by reference) (File No. 000-34762).*
10.20	Employment and Non-Competition Agreement between First Financial Bancorp and Anthony M. Stollings, EVP - Chief Financial Officer and Chief Administrative Officer dated November 1, 2013 (filed as Exhibit 10.1 to the Form 8-K filed on November 5, 2013 and incorporated herein by reference) (File No. 001-34762).*
10.21	Executive Supplemental Savings Agreement between First Financial Bancorp. and Claude E. Davis, President and Chief Executive Officer dated December 31, 2013 (filed as Exhibit 10.1 to the Form 8-K filed on January 7, 2014 and incorporated herein by reference) (File No. 001-34762).*
10.22	Severance and Change in Control Agreement between First Financial Bancorp. and John M. Gavigan, Chief Financial Officer dated March 13, 2015 (filed as Exhibit 10.1 to the Form 8-K filed on March 16, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.23	Employment and Non-Competition Agreement between First Financial Bank and Richard S. Dennen, President of Oak Street Funding, LLC dated July 23, 2015 (filed as exhibit 10.37 to the Form 10-K for the year ended December 31, 2015 and incorporated herein by reference) (File No. 001-34762).*
10.24	First Financial Bancorp Amended and Restated 2012 Stock Plan (filed as Exhibit A to the Definitive Proxy Statement filed on April 13, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.25	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. Amended and Restated 2012 Stock Plan (Directors, 1-year vest/accrual of dividends) (filed as Exhibit 10.2 to the Form10-Q for the quarter ended June 30, 2017 and incorporated herein by reference).*
10.26	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. Amended and Restated 2012 Stock Plan (employees of First Financial Bank, 3-year vesting/accrual of dividends) (filed as Exhibit 10.3 to the Form10-Q for the quarter ended June 30, 2017 and incorporated herein by reference).*
10.27	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. Amended and Restated 2012 Stock Plan (employees of Oak Street Funding, 3-year vesting/accrual of dividends) (filed as Exhibit 10.4 to the Form10-Q for the quarter ended June 30, 2017 and incorporated herein by reference).*
10.28	Form of Agreement for Restricted Stock Awards under the First Financial Bancorp. Amended and Restated 2012 Stock Plan (employees of First Franchise Capital Corporation, 3-year vesting/accrual of dividends) (filed as Exhibit 10.5 to the Form10-Q for the quarter ended June 30, 2017 and incorporated herein by reference).*
10.29	Form of Agreement for Stock Awards under the Key Executive Short Term Incentive Plan and the First Financial Bancorp. Amended and Restated 2012 Stock Plan (immediate vest, 1-year holding) (filed as Exhibit 10.8 to the Form10-Q for the quarter ended June 30, 2017 and incorporated herein by reference).*
10.30	Form of Agreement for Performance Stock Awards under the First Financial Bancorp. Amended and Restated 2012 Stock Plan (employees of First Financial Bank) 3-year vesting/accrual of dividends)(filed as Exhibit 10.36 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.31	Form of Agreement for Performance Stock Awards under the First Financial Bancorp. Amended and Restated 2012 Stock Plan (employees of Oak Street Funding, 3-year vesting/accrual of dividends)(filed as Exhibit 10.37 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.32	Employment and Non-Competition Agreement between Archie M. Brown, Jr. and First Financial Bancorp. and First Financial bank, dated as of July 25, 2017 (filed as Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on July 27, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.33	Employment and Non-Competition Agreement between Claude E. Davis and First Financial Bancorp. and First Financial bank, dated as of July 25, 2017 (filed as Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on July 27, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.34	Severance and Change in Control Agreement between John M. Gavigan and First Financial Bank dated September 22, 2017 (filed as exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on September 22, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.35	Severance and Change in Control Agreement between James M. Anderson and First Financial Bank dated September 18, 2017 (filed as exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed on September 22, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.36	Severance and Change in Control Agreement between Bradley Ringwald, First Financial and First Financial Bank, dated March 28, 2018 (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 30, 2018 (incorporated herein by reference) (File No. 001-34762).*

31

10.37	Amended and Restated Employment Agreement and Non-Competition Agreement between First Financial Bank and Anthony M. Stollings dated October 13, 2017 (filed as exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on October 13, 2017 and incorporated herein by reference) (File No. 001-34762).*
10.38	MainSource Financial Group, Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10‑K of MainSource Financial Group, Inc. for the year ending December 31, 2007, filed March 17, 2008 with the Commission).*
10.39	Loan Agreement between U.S. Bank National Association and MainSource Financial Group, Inc., dated April 28, 2016 (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q of MainSource Financial Group, Inc. filed on August 8, 2016).
13	Registrant’s annual report to shareholders for the year ended December 31, 2018.
14.1	First Financial Bancorp. Code of Conduct, as approved October 27, 2017 (filed as Exhibit 14.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 and incorporated herein by reference) (File No. 001-34762).*
14.2	Code of Ethics for the CEO and Senior Financial Officers (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on October 29, 2012 and incorporated herein by reference) (File No. 001-34762).
21	First Financial Bancorp. Subsidiaries.
23	Consent of Crowe LLP, Independent Registered Public Accounting Firm.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith.
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 furnished herewith.
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 furnished herewith.
101.1	Financial statements from the Annual Report on Form 10-K of the Company for the year ended December 31, 2018, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Shareholders’ Equity, and (v) Notes to Consolidated Financial Statements, as blocks of text and in detail.**

First Financial will furnish, without charge, to a security holder upon request a copy of the documents, portions of which are incorporated by reference (Annual Report to Shareholders and Proxy Statement), and will furnish any other Exhibit upon the payment of reproduction costs.

* Compensation plan(s) or arrangement(s).

** As provided in Rule 406T of Regulation S-T, this information shall not be deemed "filed" for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections.

Item 16. Form 10-K Summary.

None.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FIRST FINANCIAL BANCORP.

By:	/s/ Archie M. Brown, Jr.
Archie M. Brown, Jr., Director
President and Chief Executive Officer

Date  2/22/2019

Pursuant to the requirements of the Securities Exchange Act of 1934, the report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Archie M. Brown, Jr.		/s/ James M. Anderson
Archie M. Brown, Jr., Director President and Chief Executive Officer		James M. Anderson, Executive Vice President and Chief Financial Officer
Date	2/22/2019	Date	2/22/2019
/s/ Claude E. Davis		/s/ Scott Crawley
Claude E. Davis, Director		Scott T. Crawley, First Vice President and Controller
Executive Chairman of the Board		(Principal Accounting Officer)
Date	2/22/2019	Date	2/22/2019
/s/ J. Wickliffe Ach		/s/ Kathleen L. Bardwell
J. Wickliffe Ach, Director		Kathleen L. Bardwell, Director
Date	2/22/2019	Date	2/22/2019
/s/ William G. Barron		/s/ Vincent A. Berta
Wiliam G. Barron, Director		Vincent A. Berta, Director
Date	2/22/2019	Date	2/22/2019
/s/ Cynthia O. Booth		/s/ Corinne R. Finnerty
Cynthia O. Booth, Director		Corinne R. Finnerty, Director
Date	2/22/2019	Date	2/22/2019
/s/ Erin P. Hoeflinger		/s/ Susan L. Knust
Erin P. Hoeflinger, Director		Susan L. Knust, Director
Date	2/22/2019	Date	2/22/2019

33

/s/ William J. Kramer		/s/ John T. Neighbours
William J. Kramer, Director		John T. Neighbours, Director
Date	2/22/2019	Date	2/22/2019
/s/ Thomas M. O'Brien		/s/ Richard E. Olszewski
Thomas M. O'Brien, Director		Richard E. Olszewski, Director
Date	2/22/2019	Date	2/22/2019
/s/ Maribeth S. Rahe
Maribeth S. Rahe, Director
Date	2/22/2019

34

EX-13

EXHIBIT 13CELEBRATING 25 YEARS OF PROFITABILITY First Financial Bancorp 2015 Annual Report

first First Financial Bancorp A Foundation for Continuous Growth 2018 ANNUAL REPORT

Dear Fellow Shareholders, 2018 was a year of significant change and exciting accomplishments. First Financial Bancorp and MainSource Financial Group started the year as two separate companies sharing common business goals, and after the execution of the largest merger in either Company’s history, ended 2018 as a successfully integrated Company under the First Financial Bancorp name. As a combined Company, we have gained scale and strength across commercial and retail banking, wealth management and specialty finance to more effectively serve our clients and communities. In addition, we improved the depth of our talent, enhanced our product and service offerings and increased our operating capacity. The implementation of our new strategic plan and risk framework, along with increased scale and improved market share position across our key markets, has strongly positioned the Company for continued growth and success in a rapidly evolving industry. Carefully merging two entities into a successful, forward-looking company is challenging. I am proud of our merger integration work not only because we accomplished a successful systems conversion, but we also made significant strides in our cultural integration while remaining focused on our clients and our communities. At the same time, we took substantial steps in positioning First Financial for future success by developing our new corporate strategic plan, properly aligning our organization, implementing an impressive brand refresh, opening new banking locations, investing in new technologies and impacting the places we live and work. The Company also engaged in the most successful United Way campaign we’ve ever had. I am highly encouraged by the Company’s ability to come together and perform financially. Our strong performance in 2018 enabled us to announce a stock repurchase plan and 10% dividend increase in the first quarter of 2019. We remain confident in our ability to sustain these financial results, and our outlook of future performance continues to be very optimistic. 2018 Highlights Successful completion of $1 billion merger between First Financial Bancorp and MainSource Financial Group Total assets increased $5.1 billion to $14.0 billion Net income increased 78.3% to $172.6 million or $1.93 per diluted share Total deposits increased 47.1% to $10.1 billion Return on average assets increased to 1.37% Strong loan pipelines and robust demand deposit balance growth in the fourth quarter created a strong base for positive momentum in 2019 Significant talent additions across the Company Looking Ahead - 2019 The Company’s growth and solid performance over the past year have added to our strong foundation, which will allow us to operate strategically in the future. In the year ahead, we will drive superior financial results while pursuing continuous improvement and innovation through the implementation of new process, distribution, client experience and technology initiatives. Additionally, we will continue to invest in our associates and build the Company’s reputation as a highly desired place to work. With deeply engaged associates, we can better deliver on our promise of excellent service while improving our level of client satisfaction and loyalty. Finally, we remain committed to making a meaningful impact locally through the work of the First Financial Foundation and that of our associates leading and volunteering in each of the communities we serve. I look forward to what 2019 holds for the Company as we strive to achieve our long-term goals of growth, innovation and positive impact in our communities. Thank you for your continued support. Archie M. Brown, Jr. President & Chief Executive Officer

A history of strength CONSECUTIVE YEARS OF QUARTERS OF STRENGTH and stability 113 PROFITABILITY 155 & STABILITY Client Associate Product A scalable platform Innovation Credit Relationships Engagement Delivery & Administration to facilitate growth & Experience & Technology Strategy Channels $8.8 $10.1 $14.0 Solid financial Total Loans Total Deposits Total Assets performance (dollars in billions) (dollars in billions) (dollars in billions) $6.0 $5.8 $8.9 $5.4 $6.9 $8.4 $6.5 $8.1 $4.8 $6.2 $5.7 $7.2 $172.6 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Earnings Per Share Return on Assets Return on Equity 1.37% $1.93 1.12% 10.78% Net Income 1.07% 10.48% 1.00% 9.85% $1.56 0.96% 9.33% $1.43 8.94% (dollars in millions) $1.21 $1.09 $96.8 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 $88.5 $75.1 $65.0 Total Shareholder Return First Financial Bancorp KBW Regional Bank Index NASDAQ Composite 80% 59% 69% 43% 30% 37% 27% 17% -20% -8% -3% -17% 2014 2015 2016 2017 2018 1 Year 3 Year 5 Year

First Financial Bancorp 2018 Annual Report 1

Leadership Senior Management Claude E. Davis John M. Gavigan James R. Shank Executive Chairman EVP, Advanced Solutions Chief Internal Auditor and Digital Banking Archie M. Brown, Jr. Anthony M. Stollings President and Chief Executive Officer William R. Harrod EVP, Commercial Banking Chief Credit Officer James M. Anderson Karen B. Woods Chief Financial Officer Andrew K. Hauck General Counsel and Commercial Banking Executive Chief Risk Officer Scott T. Crawley Corporate Controller and Catherine M. Myers Principal Accounting Officer EVP, Consumer Banking Richard S. Dennen Amanda N. Neeley President, Oak Street Funding Chief Marketing Officer Board of Directors Claude E. Davis Erin P. Hoeflinger Executive Chairman Senior Vice President, Business Strategy Chairman of the Board, First Financial Bancorp and Execution Aetna J. Wickliffe Ach Lead Independent Director Susan L. Knust Board of Directors of First Financial Bancorp Owner and President Omega Warehouse Services Kathleen L. Bardwell Senior Vice President, Chief Compliance Officer William J. Kramer STERIS Corporation Vice President of Operations Valco Companies, Inc. William G. Barron Chairman and President John T. Neighbours William G. Barron Enterprises General Counsel AmeriQual Group Holdings Vincent A. Berta President and Managing Director Thomas M. O’Brien Covington Capital, LLC Senior Advisor Boston Consulting Group Cynthia O. Booth President and Chief Executive Officer Richard E. Olszewski COBCO Enterprises, LLC Owner/Operator 7 Eleven Food Stores Archie M. Brown, Jr. President and Chief Executive Officer Maribeth S. Rahe First Financial Bancorp and First Financial Bank President and Chief Executive Officer Fort Washington Investment Advisors, Inc. Corinne R. Finnerty Principal McConnell Finnerty PC

2 First Financial Bancorp 2018 Annual Report

FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)	2018			2017			% Change
Earnings
Net interest income	$	449,235		$	283,545		58.4	%
Net income	172,595			96,787			78.3	%
Per Share
Net income per common share-basic	$	1.95		$	1.57		24.2	%
Net income per common share-diluted	1.93			1.56			23.7	%
Cash dividends declared per common share	0.78			0.68			14.7	%
Tangible book value per common share (end of year)	11.72			11.62			0.9	%
Market price (end of year)	23.72			26.35			(10.0	)%
Balance Sheet - End of Year
Total assets	$	13,986,660		$	8,896,923		57.2	%
Loans	8,824,214			6,013,183			46.7	%
Investment securities	3,324,243			2,056,556			61.6	%
Deposits	10,140,394			6,895,046			47.1	%
Shareholders' equity	2,078,249			930,664			123.3	%
Ratios
Return on average assets	1.37		%	1.12		%
Return on average shareholders' equity	9.85		%	10.78		%
Return on average tangible shareholders' equity	17.32		%	14.08		%
Net interest margin	4.05		%	3.59		%
Net interest margin (fully tax equivalent)	4.10		%	3.66		%

First Financial Bancorp 2018 Annual Report 3

2018 Financial Highlights

4 First Financial Bancorp 2018 Annual Report

Glossary of Abbreviations and Acronyms

First Financial Bancorp has identified the following list of abbreviations and acronyms that are used in the Notes to Consolidated Financial Statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations.

AFS	Available-for-sale	FHLB	Federal Home Loan Bank
ABL	Asset based lending	FHLMC	Federal Home Loan Mortgage Corporation
the Act	Private Securities Litigation Reform Act	First Financial	First Financial Bancorp.
ALLL	Allowance for loan and lease losses	FNMA	Federal National Mortgage Association
AOCI	Accumulated other comprehensive income	Form 10-K	First Financial Bancorp. Annual Report on Form 10-K
ASC	Accounting standards codification	FRB	Federal Reserve Bank
ASU	Accounting standards update	GAAP	U.S. Generally Accepted Accounting Principles
ATM	Automated teller machine	GDP	Gross Domestic Product
Bank	First Financial Bank	GNMA	Government National Mortgage Association
Basel III	Basel Committee regulatory capital reforms, Third Basel Accord	HTM	Held-to-maturity
Bp/bps	Basis point(s)	Insignificant	Less than $0.1 million
BOLI	Bank owned life insurance	IRLC	Interest Rate Lock Commitment
CDs	Certificates of deposit	MBSs	Mortgage-backed securities
C&I	Commercial & industrial	MSFG	MainSource Financial Group, Inc.
CLOs	Collateralized loan obligations	N/A	Not applicable
CMOs	Collateralized mortgage obligations	NII	Net interest income
CRE	Commercial real estate	N/M	Not meaningful
Company	First Financial Bancorp.	Oak Street	Oak Street Holdings Corporation
CRE	Commercial real estate	ODFI	Ohio Department of Financial Institutions
ERM	Enterprise Risk Management	OREO	Other real estate owned
EVE	Economic value of equity	SEC	United States Securities and Exchange Commission
Fair Value Topic	FASB ASC Topic 825, Financial Instruments	Special Assets	Special Assets Division
FASB	Financial Accounting Standards Board	TDR	Troubled debt restructuring
FDIC	Federal Deposit Insurance Corporation

First Financial Bancorp 2018 Annual Report 5

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Table 1 • Financial Summary
	December 31,
(Dollars in thousands, except per share data)	2018			2017			2016			2015			2014
Summary of operations
Interest income	$	540,382		$	333,073		$	305,950		$	269,759		$	247,859
Tax equivalent adjustment (1)	5,147			5,259			4,215			4,017			3,224
Interest income tax – equivalent (1)	545,529			338,332			310,165			273,776			251,083
Interest expense	91,147			49,528			33,279			23,257			19,234
Net interest income tax – equivalent(1)	$	454,382		$	288,804		$	276,886		$	250,519		$	231,849
Interest income	$	540,382		$	333,073		$	305,950		$	269,759		$	247,859
Interest expense	91,147			49,528			33,279			23,257			19,234
Net interest income	449,235			283,545			272,671			246,502			228,625
Provision for loan and lease losses	14,586			3,582			10,140			9,641			1,528
Noninterest income	103,382			76,142			69,601			75,202			63,965
Noninterest expenses	323,810			239,942			201,401			201,130			196,034
Income before income taxes	214,221			116,163			130,731			110,933			95,028
Income tax expense	41,626			19,376			42,205			35,870			30,028
Net income	$	172,595		$	96,787		$	88,526		$	75,063		$	65,000
Per share data
Earnings per common share
Basic	$	1.95		$	1.57		$	1.45		$	1.23		$	1.11
Diluted	$	1.93		$	1.56		$	1.43		$	1.21		$	1.09
Cash dividends declared per common share	$	0.78		$	0.68		$	0.64		$	0.64		$	0.61
Average common shares outstanding–basic (in thousands)	88,582			61,529			61,206			61,063			58,663
Average common shares outstanding–diluted (in thousands)	89,614			62,172			61,985			61,848			59,393
Selected year-end balances
Total assets	$	13,986,660		$	8,896,923		$	8,437,967		$	8,147,411		$	7,217,821
Earning assets	12,190,567			8,117,115			7,719,285			7,431,707			6,594,626
Investment securities (2)	3,324,243			2,056,556			1,854,201			1,970,626			1,761,090
Total loans and leases	8,824,214			6,013,183			5,757,482			5,388,760			4,777,235
Interest-bearing demand deposits	2,307,071			1,453,463			1,513,771			1,414,291			1,225,378
Savings deposits	3,167,325			2,462,420			2,142,189			1,945,805			1,889,473
Time deposits	2,173,564			1,317,105			1,321,843			1,406,124			1,255,364
Noninterest-bearing demand deposits	2,492,434			1,662,058			1,547,985			1,413,404			1,285,527
Total deposits	10,140,394			6,895,046			6,525,788			6,179,624			5,655,742
Short-term borrowings	1,040,691			814,565			807,912			938,425			661,392
Long-term debt	570,739			119,654			119,589			119,540			48,241
Shareholders’ equity	2,078,249			930,664			865,224			809,376			784,077
Select Financial Ratios
Average loans to average deposits (3)	87.49		%	88.12		%	89.33		%	84.00		%	83.20		%
Net charge-offs to average loans and leases	0.15		%	0.13		%	0.10		%	0.18		%	0.27		%
Average shareholders’ equity to average total assets	13.89		%	10.42		%	10.24		%	10.73		%	10.75		%
Return on average assets	1.37		%	1.12		%	1.07		%	1.00		%	0.96		%
Return on average equity	9.85		%	10.78		%	10.48		%	9.33		%	8.94		%
Net interest margin	4.05		%	3.59		%	3.62		%	3.60		%	3.71		%
Net interest margin (tax equivalent basis) (1)	4.10		%	3.66		%	3.68		%	3.66		%	3.76		%
Dividend payout	40.00		%	43.31		%	44.14		%	52.03		%	54.95		%

⁽¹⁾ Tax equivalent basis was calculated using a 21.00% tax rate for 2018 and a 35.00% tax rate for 2017, 2016, 2015 and 2014.

⁽²⁾ Includes investment securities held-to-maturity, investment securities available-for-sale and other investments.

⁽³⁾ Includes loans held for sale.

6 First Financial Bancorp 2018 Annual Report

This annual report contains forward-looking statements. See the Forward-Looking Statements section that follows for further information on the risks and uncertainties associated with forward-looking statements. The following discussion and analysis is presented to facilitate the understanding of the financial position and results of operations of First Financial Bancorp. The discussion and analysis identifies trends and material changes that occurred during the reporting periods presented and should be read in conjunction with the Statistical Data, Consolidated Financial Statements and accompanying Notes.

Certain reclassifications of prior years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings, total assets, liabilities and shareholders' equity.

EXECUTIVE SUMMARY

First Financial is a $14.0 billion financial holding company headquartered in Cincinnati, Ohio and operates through its subsidiaries, primarily in Ohio, Indiana, Kentucky and Illinois.  These subsidiaries include a commercial bank, First Financial Bank, with 159 banking centers and 196 ATMs. First Financial provides traditional banking and financial services products to business and retail clients through its six lines of business: Commercial, Retail Banking, Mortgage Banking, Wealth Management, Investment Commercial Real Estate and Commercial Finance. Commercial Finance provides equipment and leasehold improvement financing for franchisees in the quick service and casual dining restaurant sector and commission-based financing, primarily to insurance agents and brokers, throughout the United States. Wealth Management had $2.6 billion in assets under management as of December 31, 2018 and provides the following services: wealth planning, portfolio management, trust and estate, brokerage and retirement planning.

The major components of First Financial’s operating results for the previous five years are summarized in Table 1 – Financial Summary and are discussed in greater detail in the sections that follow.

MARKET STRATEGY

First Financial aims to develop a competitive advantage by utilizing a local market focus to provide superior service and build

long-term relationships with clients while helping them achieve greater financial success. First Financial serves a combination of metropolitan and non-metropolitan markets in Ohio, Indiana, Kentucky and Illinois through its full-service banking centers, and provides financing to franchise owners and clients within the financial services industry throughout the United States. First Financial’s market selection process includes a number of factors, but markets are primarily chosen for their potential for growth and long-term profitability.  First Financial intends to focus plans for future growth and capital investments within its current metropolitan markets and will continue to evaluate other growth opportunities in metropolitan markets located within, or in close proximity to, the Company's current geographic footprint. First Financial's investment in non-metropolitan markets has historically provided stable, low-cost funding sources. Additionally, First Financial will continue to evaluate potential strategic acquisitions that provide product line extensions or industry verticals that compliment our existing business.   

BUSINESS COMBINATIONS

In April 2018, First Financial completed its acquisition of MainSource Financial Group, Inc. and its banking subsidiary,

MainSource Bank. The merger positioned the combined company to better serve the complementary geographies of Ohio,

Indiana, Kentucky and Illinois by creating a higher performing bank with greater scale and capabilities. 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 $1.1 billion. In the merger, First Financial acquired total assets of $4.4 billion, loans of $2.8 billion and

deposits of $3.3 billion, resulting in goodwill of $676.2 million.

The MainSource transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired,

liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance

with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed

are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing

date fair values become available. As a result, the fair value adjustments are preliminary and may change as information

becomes available, but no later than the second quarter of 2019.

See Note 22 – Business Combinations in the Notes to Consolidated Financial Statements, for further discussion of the merger

with MSFG.

First Financial Bancorp 2018 Annual Report 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW OF OPERATIONS

Net income for the year ended December 31, 2018 was $172.6 million, resulting in earnings per diluted common share of $1.93. This compares to net income of $96.8 million and earnings per diluted common share of $1.56 in 2017. First Financial’s return on average shareholders’ equity for 2018 was 9.85%, compared to 10.78% for 2017, and First Financial’s return on average assets was 1.37% and 1.12% for 2018 and 2017, respectively.

Net interest income in 2018increased$165.7 million, or 58.4%, from 2017, to $449.2 million, primarily driven by higher post-merger earning asset balances as well as higher yields earned on the investment and loan portfolios from rising interest rates. The net interest margin on a fully tax equivalent basis was 4.10% for 2018 compared to 3.66% in 2017.

Noninterest income increased$27.2 million, or 35.8%, during the year, from $76.1 million in 2017 to $103.4 million in 2018. The increase in 2018 was driven by higher deposit service charges, bankcard income and other noninterest income.

Noninterest expense increased$83.9 million, or 35.0%, from $239.9 million in 2017 to $323.8 million in 2018. This increase included $37.8 million of merger related expenses.

Income tax expense increased$22.3 million, or 114.8%, from $19.4 million in 2017 to $41.6 million in 2018, with the effective tax rate increasing from 16.7% in 2017 to 19.4% in 2018. The higher effective tax rate in 2018 was primarily related to the recognition of a significant historic tax credit investment in the prior year, which was partially offset by the impact of tax reform.

Total loans increased $2.8 billion, or 46.7%, from $6.0 billion at December 31, 2017 to $8.8 billion at December 31, 2018, primarily as a result of the merger. Total deposits increased $3.2 billion, or 47.1%, from $6.9 billion at December 31, 2017 to $10.1 billion as of December 31, 2018.

The ALLL was $56.5 million, or 0.64% of total loans at December 31, 2018, compared to $54.0 million, or 0.90% of total loans at December 31, 2017. The decline in the ALLL as a percentage of loans reflects the impact of accounting for acquired loans, which are recorded at fair value at acquisition and as such have no related allowance. First Financial's credit quality performance remained strong in 2018, reflecting disciplined underwriting and credit monitoring procedures, as well as stable economic conditions in the Company's markets.

First Financial’s operational results may be influenced by certain economic factors and conditions, such as market interest rates, industry competition, household and business spending levels, consumer confidence and the regulatory environment. For a more detailed discussion of the Company's operations, please refer to the sections that follow.

NET INCOME

2018 vs. 2017. First Financial’s net income increased$75.8 million, or 78.3%, to $172.6 million in 2018, compared to net income of $96.8 million in 2017. The increase was primarily related to a $165.7 million, or 58.4%, increase in net interest income, combined with a $27.2 million, or 35.8%, increase in noninterest income. These increases were partially offset by an $83.9 million, or 35.0%, increase in noninterest expenses and a $22.3 million, or 114.8%, increase in income tax expense during 2018.

2017 vs. 2016. First Financial’s net income increased $8.3 million, or 9.3%, to $96.8 million in 2017, compared to net income

of $88.5 million in 2016. The increase was primarily related to a $22.8 million, or 54.1%, decline in income tax expense, a

$10.9 million, or 4.0%, increase in net interest income and a $6.5 million, or 9.4%, increase in noninterest income. These

increases were partially offset by a $38.5 million, or 19.1%, increase in noninterest expenses during 2017.

For more detail, refer to the Net interest income, Noninterest income, Noninterest expenses and Income taxes sections that follow.

8 First Financial Bancorp 2018 Annual Report

NET INTEREST INCOME

First Financial’s net interest income for the years 2014 through 2018 is shown in Table 1 – Financial Summary. First Financial’s principal source of income is net interest income, which is the excess of interest received from earning assets, including loan-related fees, less interest paid on interest-bearing liabilities. The amount of net interest income is determined by the volume and mix of earning assets, the rates earned on such assets and the volume, mix and rates paid for the deposits and borrowed money that support the earning assets. Earning assets consist of interest-bearing loans to customers as well as marketable investment securities.

For analytical purposes, net interest income is also presented in Table 1 – Financial Summary on a tax equivalent basis assuming a 35.00% marginal tax rate for years 2014 through 2017 and a 21.00% marginal tax rate for 2018. Net interest income is presented on a tax equivalent basis to consistently reflect income from tax-exempt assets, such as municipal loans and investments, in order to facilitate a comparison between taxable and tax-exempt amounts.  Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis as these measures provide useful information to make peer comparisons. First Financial's tax equivalent net interest margin was 4.10%, 3.66% and 3.68% for 2018, 2017 and 2016, respectively.

Table 2 – Volume/Rate Analysis - Tax Equivalent Basis describes the extent to which changes in interest rates as well as changes in the volume of earning assets and interest-bearing liabilities have affected First Financial’s net interest income on a tax equivalent basis during the years presented. Nonaccrual loans and loans held for sale were included in the average loan balances used to determine the yields in Table 2 – Volume/Rate Analysis - Tax Equivalent Basis, which should be read in conjunction with the Statistical Information table.

Loan fees included in the interest income computation for 2018, 2017 and 2016 were $9.1 million, $7.4 million, and $9.9 million, respectively. Loan fees increased in 2018 as a result of higher loan balances subsequent to the merger.

2018 vs. 2017. Net interest income increased$165.7 million, or 58.4%, from $283.5 million in 2017 to $449.2 million in 2018, primarily due to an increase in average earning assets and higher yields earned during 2018. Average earning assets increased from $7.9 billion in 2017 to $11.1 billion in 2018, while the yield on earning assets increased from 4.22% in 2017 to 4.88% in 2018.

Interest income was $540.4 million in 2018, a $207.3 million, or 62.2%, increase from 2017. The increase was primarily attributable to interest income from loans, which increased$167.1 million, or 59.6%, from $280.1 million in 2017 to $447.2 million in 2018 as well as a $36.0 million, or 63.8%, increase in interest income earned on investment securities during the period. The increase in interest income on loans resulted from a merger driven increase in average loan balances, including loans held for sale, of $2.3 billion, or 39.4%, and the impact from purchase accounting accretion, in addition to higher loan yields resulting from rising interest rates. Similar to interest on loans, the increase in interest income on investment securities was driven by a $895.8 million, or 44.8%, merger related increase in average investment balances as well as higher yields earned during the period from rising interest rates.

Interest expense was $91.1 million in 2018, which was a $41.6 million, or 84.0%, increase from 2017. Interest expense increased as the average balance of interest-bearing deposits increased $2.0 billion, or 39.4%, primarily due to the merger. Additionally, rising interest rates during the twelve month period contributed to the cost of funds related to these deposits increasing to 80 bps for 2018 from 69 bps in 2017. Interest expense was also impacted in 2018 by an increase in short-term borrowing rates from 99 bps in 2017 to 1.90% in 2018 as a result of rising interest rates.

2017 vs. 2016. Net interest income increased $10.9 million, or 4.0%, from $272.7 million in 2016 to $283.5 million in 2017,

primarily due to an increase in average earning assets and higher yields earned during 2017. Average earning assets increased

from $7.5 billion in 2016 to $7.9 billion in 2017, while the yield on earning assets increased from 4.07% in 2016 to 4.22% in

2017.

Interest income was $333.1 million in 2017, a $27.1 million, or 8.9%, increase from 2016. The increase was primarily

attributable to interest income from loans, which increased $17.4 million, or 6.6%, from $262.7 million in 2016 to $280.1

million in 2017 as well as a $7.5 million, or 17.3%, increase in taxable interest income earned on investment securities during

the period. The increase in interest income on loans resulted from an increase in average loan balances of $219.3 million, or

3.9%, as well as higher loan yields resulting from rising interest rates. Higher loan balances in 2017 resulted from solid organic

loan growth during the period. The increase in interest income on investment securities was driven by a $142.5 million, or

7.7%, increase in average investment balances as well as higher yields earned during the period.

First Financial Bancorp 2018 Annual Report 9

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Interest expense was $49.5 million in 2017, which was a $16.2 million, or 48.8%, increase from 2016. Interest expense

increased as the average balance of interest-bearing deposits increased $249.6 million, or 5.2%, due to the Company's strong

deposit generation efforts during the period. Additionally, rising interest rates and a higher mix of variable rate deposit balances

during 2017 contributed to the cost of funds related to these deposits increasing to 69 bps for 2017 from 47 bps in 2016. In an effort to contain rising funding costs, First Financial converted approximately $1.5 billion of previously indexed deposits to managed rate products during the third quarter of 2017, while also lowering the rates paid on these products by a weighted average of 35 bps. Interest expense was also impacted in 2017 by an increase in short-term borrowing rates from 51 bps in 2016 to 99 bps in 2017 as a result of rising interest rates.

Table 2 • Volume/Rate Analysis - Tax Equivalent Basis (1)
	2018 change from 2017 due to							2017 change from 2016 due to
(Dollars in thousands)	Volume		Rate			Total		Volume			Rate			Total
Interest income
Loans (2)	$	126,901	$	39,681		$	166,582	$	10,487		$	7,220		$	17,707
Indemnification asset	0		3,871			3,871		2,150			(1,512		)	638
Investment securities (3)
Taxable	21,278		7,230			28,508		2,783			4,682			7,465
Tax-exempt	9,004		(1,112		)	7,892		1,906			222			2,128
Total investment securities interest (3)	30,282		6,118			36,400		4,689			4,904			9,593
Interest-bearing deposits with other banks	25		319			344		101			128			229
Total	157,208		49,989			207,197		17,427			10,740			28,167
Interest expense
Interest-bearing demand deposits	2,641		1,563			4,204		72			2,051			2,123
Savings deposits	3,488		(1,379		)	2,109		2,578			7,804			10,382
Time deposits	11,766		3,701			15,467		(2,091		)	2,155			64
Short-term borrowings	2,228		7,612			9,840		(494		)	4,181			3,687
Long-term debt	11,703		(1,704		)	9,999		60			(67		)	(7		)
Total	31,826		9,793			41,619		125			16,124			16,249
Net interest income	$	125,382	$	40,196		$	165,578	$	17,302		$	(5,384	)	$	11,918

⁽¹⁾ Tax equivalent basis was calculated using a 21.00% tax rate for 2018 and a 35.00% tax rate for 2017 and 2016.

⁽²⁾Includes nonaccrual loans and loans held-for-sale.

⁽³⁾ Includes HTM securities, AFS securities and other investments.

NONINTEREST INCOME AND NONINTEREST EXPENSES

Noninterest income and noninterest expenses for 2018, 2017 and 2016 are shown in Table 3 – Noninterest Income and Noninterest Expenses.

NONINTEREST INCOME

2018 vs. 2017. Noninterest income increased$27.2 million, or 35.8%, from $76.1 million in 2017 to $103.4 million in 2018. The increase was primarily related to a $15.3 million, or 77.5%, increase in service charges on deposits, a $6.9 million, or 52.2%increase in bankcard income, a $3.6 million, or 22.8%, increase in other noninterest income, a $1.3 million, or 19.7%, increase in client derivative fees, and a $1.0 million, or 7.2%, increase in trust and wealth management fees. These increases were partially offset by $1.8 million, or 109.8%, decrease in gains on sale of investment securities.

The increases in service charges on deposits, bankcard income, other noninterest income, derivative fees and wealth management fees were primarily driven by increased scale created by the merger.

2017 vs. 2016. Noninterest income increased $6.5 million, or 9.4%, from $69.6 million in 2016 to $76.1 million in 2017. The

increase was primarily related to a $2.0 million, or 14.8%, increase in other noninterest income, a $1.8 million, or 40.4%

increase in client derivative fees, a $1.4 million, or 604.7%, increase in net gains on sales of investment securities and a $1.2

10 First Financial Bancorp 2018 Annual Report

million, or 9.6%, increase in bankcard income, partially offset by a $1.6 million, or 24.0%, decrease in net gains from sales of

loans.

Other noninterest income increased from $13.7 million in 2016 to $15.8 million in 2017, primarily related to $5.8 million of

income from the early redemption of certain off balance sheet securitizations associated with the 2009 FDIC-assisted

transactions, which was partially offset by a $3.5 million decrease in income from the accelerated discount on covered/formerly

covered loans.

Higher client derivative fees in 2017 reflected strong loan demand and net gains on sales of investment securities increased in

2017 as proceeds from the sale of $190.0 million of AFS securities resulted in gains of $1.8 million and losses of

$0.2 million during the year. Bankcard income increased as a result of deeper client penetration and increased customer activity

during 2017.

Partially offsetting the increase in noninterest income was a decrease in net gains on sales of loans from $6.8 million in 2016 to

$5.2 million in 2017 primarily due to lower sales volume during the period.

Table 3 • Noninterest Income and Noninterest Expenses
	2018					2017				2016
(Dollars in thousands)	Total			% Change		Total		% Change		Total			% Change
Noninterest income
Service charges on deposit accounts	$	35,108		77.5	%	$	19,775	4.4	%	$	18,933		(0.4	)%
Trust and wealth management fees	15,082			7.2	%	14,073		6.6	%	13,200			0.5	%
Bankcard income	20,245			52.2	%	13,298		9.6	%	12,132			4.8	%
Client derivative fees	7,682			19.7	%	6,418		40.4	%	4,570			4.1	%
Net gains from sales of loans	6,071			17.5	%	5,169		(24.0	)%	6,804			5.1	%
Other	19,355			22.8	%	15,760		14.8	%	13,728			(28.2	)%
Subtotal	103,543			39.0	%	74,493		7.4	%	69,367			(5.9	)%
Gains on sales of investment securities	(161		)	N/M		1,649		N/M		234			(84.5	)%
Total	$	103,382		35.8	%	$	76,142	9.4	%	$	69,601		(7.4	)%
Noninterest expenses
Salaries and employee benefits	$	188,990		37.7	%	$	137,240	6.8	%	$	128,549		15.0	%
Net occupancy	24,215			39.2	%	17,397		(5.1	)%	18,329			0.5	%
Furniture and equipment	14,908			76.6	%	8,443		(2.5	)%	8,663			(0.7	)%
Data processing	28,077			100.2	%	14,022		22.9	%	11,406			5.0	%
Marketing	7,598			137.4	%	3,201		(19.3	)%	3,965			6.5	%
Communication	3,167			74.1	%	1,819		(3.7	)%	1,889			(12.6	)%
Professional services	12,272			(18.3	)%	15,023		138.3	%	6,303			(34.5	)%
State intangible tax	4,152			56.4	%	2,655		30.5	%	2,034			(12.7	)%
FDIC assessments	3,969			0.6	%	3,944		(8.1	)%	4,293			(3.4	)%
Loss (gain)-other real estate owned	373			(41.9	)%	642		(153.0	)%	(1,212		)	(165.1	)%
Other	36,089			1.5	%	35,556		106.9	%	17,182			(37.2	)%
Total	$	323,810		35.0	%	$	239,942	19.1	%	$	201,401		0.1	%

First Financial Bancorp 2018 Annual Report 11

Management’s Discussion and Analysis of Financial Condition and Results of Operations

NONINTEREST EXPENSES

2018 vs. 2017. Noninterest expenses increased$83.9 million, or 35.0%, in 2018 compared to 2017, primarily due to a $51.8 million, or 37.7%, increase in salaries and employee benefits, a $14.1 million, or 100.2%, increase in data processing expenses, a $6.8 million, or 39.2%, increase in net occupancy expenses, a $6.5 million, or 76.6%, increase in furniture and equipment expenses, and a $4.4 million, or 137.4%, increase in marketing expenses during the period. These increases were partially offset by a $0.5 million, or 1.5%, increase in other noninterest expenses and a $2.8 million, or 18.3%, decrease in professional services.

Higher salaries and employee benefits in 2018 were attributed to merger related increases in staffing levels, higher severance and retention costs, higher performance-based compensation, increased health care costs and annual compensation adjustments. The increases in data processing, net occupancy, furniture and equipment and marketing expenses were largely attributable to merger related expenses combined with the larger scale of the Company post-merger. Lower other noninterest expenses and professional services in 2018 were mainly due to elevated costs in 2017 as detailed in the section that follows.

2017 vs. 2016. Noninterest expenses increased $38.5 million, or 19.1%, in 2017 compared to 2016, primarily due to an $18.4

million, or 106.9%, increase in other noninterest expenses, an $8.7 million, or 6.8%, increase in salaries and employee benefits,

an $8.7 million, or 138.3%, increase in professional services and a $2.6 million, or 22.9%, increase in data processing expenses

during the period. These increases were partially offset by a $0.9 million, or 5.1%, decrease in net occupancy expenses and an

$0.8 million, or 19.3%, decrease in marketing expenses.

Higher other noninterest expenses during 2017 were primarily driven by an $11.3 million historic tax credit investment writedown, a $5.1 million impairment charge resulting from the preliminary agreement to early terminate the Company's FDIC loss sharing agreements and a $3.0 million charitable contribution to the First Financial Foundation, partially offset by a $1.2

million decrease in regulatory fees. Higher salaries and employee benefits were primarily attributable to $3.4 million of

severance costs related to efficiency efforts during 2017 as well as higher performance-based compensation and health

care costs, in addition to annual compensation adjustments. Elevated professional service costs were primarily the result of

merger-related expenses, while data processing expenses resulted from investments in enterprise data management and system

upgrades, in addition to other software license expenses.

Lower net occupancy expenses were primarily driven by branch consolidation activities during the year, while marketing expenses declined in 2017 as a result of the Company's cost reduction efforts.

INCOME TAXES

First Financial’s income tax expense in 2018 totaled $41.6 million compared to $19.4 million in 2017 and $42.2 million in 2016, resulting in effective tax rates of 19.4%, 16.7% and 32.3% in 2018, 2017 and 2016, respectively. The higher effective tax rate in 2018 was related to the recognition of a significant historic tax credit investment in 2017, which was partially offset by the impact of tax reform. The historic tax credit investment reduced income tax expense by $12.5 million in 2017, and resulted in a $1.1 million increase to net income for the year when netted against the investment write-down included in noninterest expense.

For further information on income taxes, see Note 14 – Income Taxes in the Notes to Consolidated Financial Statements.

LENDING PRACTICES

First Financial remains dedicated to meeting the financial needs of individuals and businesses through its client-focused business model. The loan portfolio is comprised of a broad range of borrowers primarily located in the Ohio, Indiana, Kentucky and Illinois markets; however, the commercial finance line of business serves a national client base.

First Financial’s loan portfolio consists of commercial loan types, including C&I, lease financing (equipment leasing), construction real estate, and commercial real estate, as well as consumer loan types, such as residential real estate, home equity, installment and credit card loans. First Financial's lending portfolios are managed to avoid the creation of inappropriate industry, geographic, franchise concept or borrower concentration risk.

Commercial and Industrial – C&I loans include revolving lines of credit and term loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, leasehold improvements or other projects.  C&I loans are generally underwritten individually and secured with the assets of the Company and/or the personal guarantee of

12 First Financial Bancorp 2018 Annual Report

the business owners.  C&I loans also include ABL, equipment and leasehold improvement financing for select concepts and franchisees in the quick service and casual dining restaurant sector in addition tocommission-based loans to insurance agents and brokers.  ABL transactions typically involve larger commercial clients and are secured by specific assets, such as inventory, accounts receivable, machinery and equipment.  In the franchise lending space, First Financial focuses on a limited number of restaurant concepts that have sound economics, low closure rates and strong brand awareness within specified local, regional or national markets.  Within the insurance lending platform, First Financial serves insurance agents and brokers that are looking to maximize their book-of-business value and grow their agency business.  

First Financial maintains vigorous underwriting processes to assess prospective C&I borrowers' credit worthiness prior to origination, and actively monitors C&I relationships subsequent to funding in order to ensure adequate oversight of the portfolio.

Economic trends, including GDP growth, wage gains and unemployment rates showed further improvement during 2018, however the pace of loan growth remains gradual and business spending levels have not materially increased. First Financial remains optimistic that economic improvements realized in 2017 and 2018, as well as the tax reform legislation passed at the end of 2017, will stimulate business growth and economic investment among current and prospective customers, resulting in additional lending opportunities for the Bank.

Lease Financing– Lease financing consists of lease transactions for the purchase of both new and used business equipment for commercial clients. Lease products may include tax leases, finance leases, lease lines of credit and interim funding. The credit underwriting for lease transactions includes detailed analysis of the lessee's industry and business model, nature of the equipment, equipment resale values, historical and projected cash flow analysis, secondary sources of repayment and guarantor in addition to other considerations.

Construction Real Estate – Real estate construction loans are term loans to individuals, companies or developers used for the construction or development of a commercial or residential property for which repayment will be generated by the sale or permanent financing of the property. Generally, these loans are for construction projects that have been pre-sold, pre-leased or have secured permanent financing, as well as loans to real estate companies with significant equity invested in the project. An independent credit team underwrites construction real estate loans, which are managed by experienced lending officers and monitored through the construction phase by a centralized funding desk that manages loan disbursements.

First Financial has pursued select real estate construction lending opportunities while actively monitoring industry and portfolio-specific credit trends and sector concentrations.

Commercial Real Estate– Commercial real estate loans consist of term loans secured by a mortgage lien on real estate properties such as apartment buildings, office and industrial buildings and retail shopping centers. Additionally, the Company's franchise lending activities discussed in the "Commercial and Industrial" section often include the financing of real estate in addition to equipment. The credit underwriting for both owner-occupied and investor income producing real estate loans includes detailed market analysis, historical and projected cash flow analysis, appropriate equity margins, assessment of lessees and lessors, environmental risks and the type, age, condition and location of real estate, among other factors.

Credit risk is mitigated by limiting total credit exposure to individual borrowers and by requiring borrowers to have adequate down payments or cash equity, thereby limiting the loan balance in relation to the market value of the property. First Financial also regularly reviews borrower financial performance, makes periodic site visits to financed properties and monitors rental rates, occupancy trends, capitalization rates and other factors that could potentially influence real estate collateral values in the Company's markets.

The Company believes its current underwriting criteria, coupled with active credit monitoring, provides adequate oversight of the commercial real estate loan portfolio.

Residential Real Estate– Residential real estate loans represent loans to consumers for the financing of a residence.

These loans generally have a 15 to 30 year term and a fixed interest rate, but may have a shorter term to maturity with an adjustable interest rate, and in most cases, are extended to borrowers to finance their primary residence. First Financial sells residential real estate loan originations into the secondary market on both servicing retained and servicing released bases. Residential real estate loans are generally underwritten to secondary market lending standards, utilizing underwriting processes that rely on empirical data to assess credit risk as well as analysis of the borrower's ability to repay their obligations, credit history, the amount of any down payment and the market value or other characteristics of the property. First Financial also offers a residential mortgage product that features similar borrower credit characteristics but a more streamlined underwriting

First Financial Bancorp 2018 Annual Report 13

Management’s Discussion and Analysis of Financial Condition and Results of Operations

process than typically required to sell to government-sponsored enterprises and thus is retained on the Consolidated Balance Sheets.

While First Financial continues to sell the majority of residential real estate originations into the secondary market, the Company believes its current underwriting criteria coupled with the monitoring of a number of portfolio metrics, including credit scores and loan-to-value ratios, provides adequate oversight of this portfolio.

Home Equity– Home equity lending includes both home equity loans and revolving lines of credit secured by a first or second lien on the borrower’s residence. Home equity lending underwriting considerations include the borrower's credit history as well as to debt-to-income and loan-to-value policy limits.

First Financial believes its current underwriting criteria coupled with the monitoring of a number of portfolio metrics including credit scores, loan-to-value ratios, line size and utilization rates provide adequate oversight of the home equity portfolio.

Installment – Installment lending consists of consumer loans not secured by real estate, including loans secured by automobiles and unsecured personal loans.

Credit Card – Credit card lending consists of secured and unsecured revolving lines of credit to consumer and business customers. Credit card lines are generally available for an indefinite period of time as long as the borrower's credit characteristics do not materially or adversely change, but may be canceled by the Company under certain circumstances.

Underwriting for installment and credit card lending focuses on a borrower's debt-to-income ratios and credit history among other considerations.

Credit Management. Subject to First Financial’s credit policy and guidelines, credit underwriting and approval occur within the market and/or the centralized line of business originating the loan. First Financial has delegated a lending limit sufficient to address the majority of client requests in a timely manner to each market president and line of business manager. Loan requests for amounts greater than those limits require the approval of a designated credit officer or senior credit committee and may require additional approvals from the chief credit officer, the chief executive officer and the board of directors. This allows First Financial to manage the initial credit risk exposure through a standardized, strategic and disciplined approval process, but with an increasingly higher level of authority. Plans to purchase or sell a participation in a loan, or a group of loans, requires the approval of certain senior lending and administrative officers, and in some cases could include the board of directors.

Credit management practices are dependent on the type and nature of the loan. First Financial monitors all significant

exposures on an ongoing basis. Commercial loans are assigned internal risk ratings reflecting the risk of loss inherent in the loan. These internal risk ratings are assigned upon initial approval of credit and are updated periodically thereafter. First Financial reviews and adjusts its risk ratings based on actual experience, which is the basis for determining an appropriate ALLL. First Financial's commercial risk ratings of pass, special mention, substandard and doubtful are derived from standard regulatory rating definitions and facilitate the monitoring of credit quality across the commercial loan portfolio. For further information regarding these risk ratings, see Note 5 – Loans and Leases in the Notes to the Consolidated Financial Statements.

Commercial loans rated as special mention, substandard or doubtful are considered criticized, while loans rated as substandard or doubtful are considered classified. Commercial loans may be designated as criticized/classified based on individual borrower performance or industry and environmental factors. Criticized/classified loans are subject to more frequent internal reviews to assess the borrower’s credit status and develop appropriate action plans.

Classified loans are managed by the Special Assets department. Special Assets is a commercial credit group whose primary focus is to handle the day-to-day management of commercial workouts, recoveries and problem loan resolutions. Special Assets ensures that First Financial has appropriate oversight, improved communication and timely resolution of issues throughout the loan portfolio. Additionally, the Credit Risk Management group within First Financial's Risk Management function provides objective oversight and assessment of commercial credit quality and processes using an independent credit risk review approach.

Consumer lending credit approvals are based on, among other factors, the financial strength and payment history of the borrower, type of exposure and the transaction structure. Consumer loans are generally smaller dollar amounts than other types of lending and are made to a large number of customers, providing diversification within the portfolio. Credit risk in the consumer loan portfolio is managed by loan type, and consumer loan asset quality indicators, including delinquency, are

14 First Financial Bancorp 2018 Annual Report

continuously monitored. The Credit Risk Management group performs product-level performance reviews and assesses credit quality and compliance with underwriting and loan administration guidelines across the consumer loan portfolio.

LOANS AND LEASES

2018 vs. 2017. First Financial experienced significant loan growth in 2018 which was primarily attributed to the merger. Loans, excluding loans held for sale, totaled $8.8 billion at December 31, 2018, increasing$2.8 billion, or 46.7%, compared to December 31, 2017. C&I loans increased $601.9 million, or 31.5%, construction real estate loans increased $81.2 million, or 17.4%, commercial real estate loans increased $1.3 billion, or 50.8%, residential real estate increased $484.3 million, or 102.7%, home equity increased $323.7 million, or 65.6%, and installment increased $51.6 million, or 124.1%, during 2018. Average loan balances, including loans held for sale, increased $2.3 billion, or 39.4%, from $5.8 billion at December 31, 2017 to $8.2 billion at December 31, 2018.

At December 31, 2018, CRE loans represented 42.5% of total loans, C&I loans accounted for 28.5% of loans while construction real estate and lease financing balances represented 6.2% and 1.1% of the portfolio, respectively. Residential real estate loans represented 10.8% of loan balances while home equity, installment and credit card loans represented 9.3%, 1.1% and 0.5%, respectively. Portfolio concentrations were largely in line with 2017, with modest changes driven primarily by the MSFG merger.

Table 4 • Loan and Lease Portfolio
	December 31,
(Dollars in thousands)	2018		2017		2016		2015		2014
Commercial and industrial	$	2,514,661	$	1,912,743	$	1,781,948	$	1,663,102	$	1,315,114
Lease financing	93,415		89,347		93,108		93,986		77,567
Real estate – construction	548,935		467,730		399,434		311,712		197,571
Real estate – commercial	3,754,681		2,490,091		2,427,577		2,258,297		2,140,667
Real estate – residential	955,646		471,391		500,980		512,311		501,894
Home equity	817,282		493,604		460,388		466,629		458,627
Installment	93,212		41,586		50,639		41,506		47,320
Credit card	46,382		46,691		43,408		41,217		38,475
Total loans and leases	$	8,824,214	$	6,013,183	$	5,757,482	$	5,388,760	$	4,777,235

Table 5 – Loan Maturity/Rate Sensitivity indicates the contractual maturity of C&I loans and construction real estate loans outstanding at December 31, 2018 as well as their sensitivity to changes in interest rates.

For discussion of risks associated with the loan portfolio and First Financial's ALLL, see the Credit Risk section included in Management’s Discussion and Analysis.

First Financial Bancorp 2018 Annual Report 15

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Table 5 • Loan Maturity/Rate Sensitivity
	December 31, 2018
	Maturity
			After one
	Within		but within		After
(Dollars in thousands)	one year		five years		five years		Total
Commercial and industrial	$	659,253	$	1,151,884	$	703,524	$	2,514,661
Construction real estate	326,303		160,341		62,291		548,935
Total	$	985,556	$	1,312,225	$	765,815	$	3,063,596
			After one
	Within		but within		After
(Dollars in thousands)	one year		five years		five years		Total
Fixed rate	$	124,671	$	310,447	$	74,414	$	509,532
Variable rate	860,885		1,001,778		691,401		2,554,064
Total	$	985,556	$	1,312,225	$	765,815	$	3,063,596

OFF-BALANCE SHEET ARRANGEMENTS

Off-balance sheet arrangements include commitments to extend credit and financial guarantees.  Loan commitments are agreements to extend credit to a client absent any violation of any condition established in the commitment agreement.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  First Financial had commitments outstanding to extend credit, totaling $3.0 billion and $2.1 billion at December 31, 2018 and 2017, respectively. As of December 31, 2018, loan commitments with a fixed interest rate totaled $174.0 million while commitments with variable interest rates totaled $2.9 billion. The fixed rate loan commitments have interest rates ranging from 0.00% to 21.00% for both December 31, 2018 and 2017. The fixed rate loan commitments have maturities ranging from 1 to 30 years for December 31, 2018 and 1 and 29 years for December 31, 2017.

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.  First Financial has issued letters of credit aggregating $32.7 million and $25.3 million at December 31, 2018, and 2017, respectively. Management conducts regular reviews of these instruments on an individual client basis.

ASSET QUALITY

Nonperforming assets consist of nonaccrual loans, accruing TDRs and OREO. 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, such as insufficient collateral value. The accrual of interest income is discontinued and previously accrued but unpaid interest is reversed when a loan is classified as nonaccrual. Classified assets include nonperforming assets plus performing loans internally rated substandard or worse.

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 are classified as TDRs when borrowers are experiencing financial difficulties and concessions are made by the Company that would not otherwise be considered for a borrower with similar credit characteristics. 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. OREO consists of properties acquired by First Financial primarily through loan defaults by borrowers.

See Table 6 – Nonperforming Assets for a summary of First Financial’s nonaccrual loans, TDRs and OREO.

16 First Financial Bancorp 2018 Annual Report

2018 vs. 2017. Total nonperforming assets increased $43.8 million, or 98.6%, to $88.2 million at December 31, 2018 from $44.4 million at December 31, 2017. Nonaccrual loans increased $46.6 million, which was partially offset by a $1.4 milliondecline in accruing TDRs and a $1.4 milliondecline in OREO.

The increase in nonaccrual loans in 2018 was primarily attributable to the downgrade of two large relationships, one franchise and one agricultural, which contributed $25.3 million to the increase, and $14.7 million of nonaccrual loans acquired in the MSFG merger. The decline in accruing TDR's during 2018 was the result of resolution efforts during the period, while lower OREO balances resulted mostly from the resolution and sale of $3.8 million of commercial and residential real estate properties in addition to $0.8 million of valuation adjustments, which were partially offset by $3.2 million of additions during the year.

First Financial's nonperforming assets as a percentage of total loans plus OREO increased to 1.00% at December 31, 2018 from 0.74% at December 31, 2017 as a result of increased nonperforming loan balances during the period. Additionally, classified asset balances increased $44.4 million, or 50.8%, to $131.7 million at December 31, 2018 from $87.3 million at December 31, 2017.

The increase in nonperforming and classified assets during 2018 is attributed to the merger as well as the previously mentioned deterioration of two large relationships. The U.S. economy has maintained consistent growth levels in recent periods and First Financial's geographic markets have remained economically stable. Management is optimistic that the Company's credit quality trends will remain strong in future periods given the sustained improvement in employment rates and real estate markets, as well as stable levels of business and consumer confidence.

Table 6 • Nonperforming Assets
	December 31,
(Dollars in thousands)	2018			2017			2016			2015			2014
Nonaccrual loans (1)	$	70,700		$	24,082		$	17,730		$	27,997		$	48,469
Accruing troubled debt restructurings (2)	16,109			17,545			30,240			28,876			15,928
Other real estate owned (OREO)	1,401			2,781			6,284			13,254			22,674
Total nonperforming assets	$	88,210		$	44,408		$	54,254		$	70,127		$	87,071
Nonperforming assets as a percent of total loans plus OREO	1.00		%	0.74		%	0.94		%	1.30		%	1.81		%
Accruing loans past due 90 days or more	$	63		$	61		$	142		$	108		$	216
Classified assets	$	131,668		$	87,293		$	125,155		$	132,431		$	154,804

(1) Nonaccrual loans include nonaccrual TDRs of $22.4 million, $6.4 million, $5.1 million, $9.3 million, and $12.3 million as of December 31, 2018, 2017, 2016, 2015 and 2014, respectively.

(2) Accruing troubled debt restructurings include TDRs past due 90 days or more and still accruing of $2.7 million as of December 31, 2016. There were no TDRs 90 days past due and still accruing as of December 31, 2018, 2017, 2015 and 2014, respectively.

INVESTMENTS

First Financial utilizes its investment portfolio as a source of liquidity and interest income, as well as a tool for managing the Company's interest rate risk profile. As such, the Company's primary investment strategy is to invest in debt securities with low credit risk, such as treasury and agency-backed residential MBSs. The investment portfolio is also managed with consideration to prepayment and extension/maturity risk. First Financial invests primarily in MBSs issued by U.S. government agencies and corporations, such as the GNMA, the FHLMC and the FNMA, as these securities are considered to have a low credit risk and high liquidity profile due to government agency guarantees. Government and agency backed securities comprised 58.0% and 60.4% of First Financial's investment securities portfolio as of December 31, 2018 and 2017, respectively.

The Company also invests in certain securities that are not supported by government or agency guarantees, and whose realization is dependent on future principal and interest repayments, thus carrying greater credit risk. First Financial performs a detailed pre-purchase collateral and structural analysis on these securities and limits investments to asset classes in which the

First Financial Bancorp 2018 Annual Report 17

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Company has expertise and experience. The Company further limits these investments to securities with senior positions in the capital structure to provide additional credit protection. First Financial continuously monitors credit risk and geographic concentration risk in its evaluation of market opportunities that would enhance the overall performance of the portfolio. Securities not supported by government or agency guarantees represented 42.0% and 39.6% of First Financial's investment securities portfolio as of December 31, 2018 and 2017, respectively.

The other investments category in the Consolidated Balance Sheets consists primarily of First Financial’s investments in FRB and FHLB stock.

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 as well as payment performance and the Company’s intent and ability to hold the security when determining whether any impairment is other than temporary. First Financial had no other than temporary impairment expense for the years ended December 31, 2018 and 2017.

2018 vs. 2017. First Financial’s investment portfolio at December 31, 2018 totaled $3.3 billion, and represented 23.8% of total assets at December 31, 2018. The $1.3 billion, or 61.6%, increase in the investment portfolio during 2018 was primarily related to the merger with MSFG.

First Financial classified $2.8 billion, or 83.6%, and $1.3 billion, or 65.6%, of investment securities as AFS at December 31, 2018 and 2017, respectively. First Financial classified $429.3 million, or 12.9%, and $654.0 million, or 31.8%, of investment securities as HTM at December 31, 2018 and 2017, respectively. Also in conjunction with the merger, First Financial reclassified $372.1 million of investments HTM as AFS to align with post-merger investment strategies.

First Financial recorded an $11.6 million unrealized after-tax loss on the investment portfolio as a component of equity in AOCI resulting from changes in the fair value of AFS securities at December 31, 2018, which increased $11.4 million from a $0.2 million unrealized after-tax loss at December 31, 2017.

Security debentures issued by the U.S. government and U.S. government agencies and corporations, including the FHLB, FHLMC, FNMA and the U.S. Export/Import Bank represented 1.0% and 1.4% of the investment portfolio at December 31, 2018 and 2017, respectively.

Investments in MBSs, including CMOs, represented 18.2% and 22.5% of First Financial's portfolio at December 31, 2018 and 2017, respectively. MBSs are participations in pools of residential real estate loans, the principal and interest payments of which are passed through to the security investors. MBSs are subject to prepayment risk, particularly during periods of falling interest rates, and extension risk during periods of rising interest rates. Prepayments of the underlying residential real estate loans may shorten the lives of the securities, thereby affecting yields to maturity and market values.

Tax-exempt securities of states, municipalities and other political subdivisions increased to $501.9 million as of December 31, 2018 from $207.9 million as of December 31, 2017 and comprised 15.6% and 10.4% of the investment portfolio at December 31, 2018 and 2017, respectively. The securities are diversified to include states as well as issuing authorities within states, thereby decreasing geographic portfolio risk. First Financial continuously monitors the risk associated with this investment type and reviews underlying ratings for possible downgrades. First Financial does not own any state or other political subdivision securities that are currently impaired.

Asset-backed securities were $509.2 million, or 15.9% of the investment portfolio at December 31, 2018 and $379.0 million, or 18.9% of the investment portfolio at December 31, 2017. First Financial considers these investment securities to have lower credit risk and a high liquidity profile as a result of explicit guarantees on the collateral.

Other securities, consisting primarily of taxable securities of states, municipalities and other political subdivisions and debt securities issued by corporations, decreased to $73.2 million, or 2.3% of the investment portfolio, at December 31, 2018 from $85.1 million and 4.2% at December 31, 2017.

The overall duration of the investment portfolio increased to 3.3 years as of December 31, 2018 from 2.9 years as of December 31, 2017. First Financial has avoided adding to its portfolio any particular securities that would materially increase credit risk or geographic concentration risk and the Company continuously monitors and considers these risks in its evaluation of current market opportunities that would enhance the overall performance of the portfolio.

18 First Financial Bancorp 2018 Annual Report

Table 7 • Investment Securities as of December 31
	2018				2017
			Percent of				Percent of
(Dollars in thousands)	Amount		Portfolio		Amount		Portfolio
U.S. Treasuries	$	97	0.0	%	$	97	0.0	%
Securities of U.S. government agencies and corporations	31,919		1.0	%	27,083		1.4	%
Mortgage-backed securities-residential	584,164		18.2	%	451,136		22.5	%
Mortgage-backed securities-commercial	568,815		17.7	%	404,130		20.2	%
Collateralized mortgage obligations	939,287		29.3	%	448,937		22.4	%
Obligations of state and other political subdivisions	501,868		15.6	%	207,930		10.4	%
Asset-backed securities	509,231		15.9	%	378,977		18.9	%
Other securities	73,202		2.3	%	85,126		4.2	%
Total	$	3,208,583	100.0	%	$	2,003,416	100.0	%

The estimated maturities and weighted-average yields of HTM and AFS investment securities are shown in Table 8 – Investment Securities as of December 31, 2018. Tax-equivalent adjustments, using a 21.00% rate for 2018 and 35.00% rate for 2017, were included in calculating yields on tax-exempt obligations of state and other political subdivisions.

First Financial held cash on deposit with the Federal Reserve of $37.7 million and $34.0 million at December 31, 2018 and 2017, respectively. First Financial continually monitors its liquidity position as part of its ERM framework, specifically through its asset/liability management process.

First Financial will continue to monitor loan and deposit demand, as well as balance sheet composition, capital sensitivity and the interest rate environment as it manages investment strategies in future periods. See Note 4 – Investment Securities in the Notes to Consolidated Financial Statements for additional information on the Company's investment portfolio and Note 21 – Fair Value Disclosures for additional information on how First Financial determines the fair value of investment securities.

First Financial Bancorp 2018 Annual Report 19

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Table 8 • Investment Securities as of December 31, 2018
	Maturity (2)
	Within one year				After one but within five years				After five but within ten years				After ten years
(Dollars in thousands)	Amount		Yield(1)		Amount		Yield(1)		Amount		Yield(1)		Amount		Yield(1)
Held-to-Maturity
Securities of other U.S. government agencies and corporations	$	0	0.00	%	$	0	0.00	%	$	0	0.00	%	$	0	0.00	%
Mortgage-backed securities-residential	0		0.00	%	6,423		1.94	%	19,142		2.36	%	0		0.00	%
Mortgage-backed securities-commercial	0		0.00	%	119,329		2.60	%	28,451		3.05	%	0		0.00	%
Collateralized mortgage obligations	0		0.00	%	12,540		1.72	%	0		0.00	%	0		0.00	%
Obligations of state and other political subdivisions	775		3.48	%	18,565		2.97	%	204,144		3.12	%	19,959		3.03	%
Total	$	775	3.48	%	$	156,857	2.55	%	$	251,737	3.05	%	$	19,959	3.03	%
Available-for-Sale
U.S. treasuries	$	0	0.00	%	$	97	1.97	%	$	0	0.00	%	$	0	0.00	%
Securities of other U.S. government agencies and corporations	0		0.00	%	22,224		1.09	%	9,695		2.90	%	0		0.00	%
Mortgage-backed securities-residential	198		4.98	%	162,252		3.06	%	348,235		3.09	%	47,914		3.02	%
Mortgage-backed securities-commercial	53,855		3.80	%	248,989		3.76	%	80,031		3.05	%	38,160		2.95	%
Collateralized mortgage obligations	889		2.86	%	500,488		3.12	%	387,597		3.23	%	37,773		3.02	%
Obligations of state and other political subdivisions	38,277		3.08	%	119,725		2.93	%	72,634		3.45	%	27,789		3.64	%
Asset-backed securities	38,700		3.77	%	314,460		3.91	%	146,101		3.82	%	9,970		3.91	%
Other securities	499		0.14	%	45,599		5.58	%	27,104		4.93	%	0		0.00	%
Total	$	132,418	3.56	%	$	1,413,834	3.43	%	$	1,071,397	3.31	%	$	161,606	3.16	%

⁽¹⁾ Tax equivalent basis was calculated using a 21.00% tax rate and yields were based on amortized cost.

⁽²⁾ Maturity represents estimated life of investment securities.

DERIVATIVES

First Financial is authorized to use 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.  The Company 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 and achieve the Company's desired interest rate risk profile. These interest rate swaps generally involve the receipt by First Financial of floating rate amounts from swap counterparties in exchange for payments to these counterparties by First Financial of fixed rate amounts received from borrowers. This results in the Company's loan customers receiving fixed rate funding while providing First Financial with a floating rate asset.

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.

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.

20 First Financial Bancorp 2018 Annual Report

See Note 11 – Derivatives in the Notes to Consolidated Financial Statements for additional information regarding First Financial's use of derivative instruments.

DEPOSITS

First Financial solicits deposits by offering commercial and consumer clients a wide variety of transaction and savings accounts, including checking, savings, money-market and time deposits of various maturities and rates.

2018 vs. 2017. First Financial's total deposits increased $3.2 billion, or 47.1%, from $6.9 billion at December 31, 2017 to $10.1 billion as of December 31, 2018. Noninterest bearing deposits increased $830.4 million, or 50.0%, savings deposits increased $704.9 million, or 28.6%, interest-bearing checking deposits increased $853.6 million, or 58.7%, and time deposits increased $856.5 million, or 65.0%, during the period. Total non-time deposit balances were $8.0 billion as of December 31, 2018, increasing $2.4 billion, or 42.8%, compared to December 31, 2017.

Total average deposits for 2018increased $2.7 billion, or 40.4%, from 2017 primarily due to an increase in average time deposits of $748.7 million, or 62.9%, an increase in average noninterest bearing deposits of $677.0 million, or 43.9%, an increase in average interest-bearing demand deposits of $678.3 million, or 45.5%, and an increase in average savings deposits $577.9 million, or 24.0%. The year-over-year growth in average deposits was primarily attributable to the merger.

Table 9 – Maturities of Time Deposits Greater Than or Equal to $100,000 details the contractual maturity of these deposits. Time Deposits Greater Than or Equal to $100,000 represent 13.7% of total deposits outstanding at December 31, 2018.

Table 9 • Maturities of Time Deposits Greater than or Equal to $100,000
	December 31, 2018
(Dollars in thousands)	CDs		IRAs		Brokered CDs		Total
Maturing in
3 months or less	$	67,746	$	4,063	$	145,461	$	217,270
3 months to 6 months	109,643		6,514		186,487		302,644
6 months to 12 months	184,560		21,737		253,106		459,403
over 12 months	231,879		51,212		130,685		413,776
Total	$	593,828	$	83,526	$	715,739	$	1,393,093

BORROWINGS

First Financial's short-term borrowings are utilized to manage normal liquidity needs. These borrowings include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, as well as overnight advances from the FHLB. The Company's long-term borrowings consist of subordinated debt, FHLB long-term advances, repurchase agreements utilizing investment securities pledged as collateral and a capital loan from a municipality.

2018 vs. 2017. Short-term borrowings increased $226.1 million, or 27.8%, to $1.0 billion at December 31, 2018, from $814.6 million at December 31, 2017.

First Financial utilizes short-term borrowings and longer-term advances from the FHLB as wholesale funding sources. First Financial had $857.1 million of short-term borrowings from the FHLB at December 31, 2018 compared to $742.3 million at December 31, 2017. In addition to FHLB borrowings, short term borrowings included repurchase agreements of $84.6 million and $72.3 million at December 31, 2018 and 2017, respectively, and federal funds purchased of $99.0 million as of December 31, 2018.

Total long-term debt was $570.7 million and $119.7 million at December 31, 2018 and 2017, respectively. The long-term debt included FHLB long-term advances of $400.6 million and $0.2 million as of December 31, 2018 and 2017, respectively, as well as an interest-free $0.8 million capital loan outstanding with a municipality at December 31, 2018 and 2017. First Financial's total remaining borrowing capacity from the FHLB was $558.2 million at December 31, 2018. Long-term debt also included subordinated debt of $170.6 million and $120.0 million as of December 31, 2018 and 2017, respectively. The subordinated

First Financial Bancorp 2018 Annual Report 21

Management’s Discussion and Analysis of Financial Condition and Results of Operations

debt is treated as Tier 2 capital for regulatory capital purposes. The subordinated debt also included unamortized discount and debt issuance costs of $8.5 million and $1.4 million as of December 31, 2018 and 2017, respectively.

Both short-term and long-term FHLB advances must be collateralized with qualifying assets, which are typically commercial and residential real estate loans, as well as government and agency-backed securities. For ease of borrowing execution First Financial utilizes a blanket collateral agreement with the FHLB and had $5.7 billion of assets pledged as collateral at December 31, 2018.

See Note 10 – Borrowings in the Notes to Consolidated Financial Statements for additional information on First Financial's borrowings.

LIQUIDITY

Liquidity management is the process by which First Financial manages the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost. These funding commitments include withdrawals by depositors, credit commitments to borrowers, shareholder dividends, share repurchases, operating expenses and capital expenditures. Liquidity is derived primarily from deposit growth, principal and interest payments on loans and investment securities, maturing loans and investment securities, access to wholesale funding sources and collateralized borrowings.

First Financial’s most stable source of liability-funded liquidity for both long and short-term needs is deposit growth and retention of the core deposit base. In addition to core deposit funding, First Financial also utilizes a variety of short and long-term funding sources, which include subordinated notes, longer-term advances from the FHLB and its short-term line of credit.

Both First Financial and the Bank received investment grade credit ratings from Kroll Bond Rating Agency, Inc, an independent rating agency. These credit ratings impact the cost and availability of financing to First Financial, and a downgrade to these credit ratings could affect First Financial's or the Bank’s abilities to access the credit markets and potentially increase borrowing costs, which would negatively impact financial condition and liquidity. Key factors in maintaining high credit ratings include consistent and diverse earnings, strong credit quality and capital ratios, diverse funding sources and disciplined liquidity monitoring procedures. The ratings of First Financial and the Bank at December 31, 2018 were as follows:

	First Financial Bancorp	First Financial Bank
Senior Unsecured Debt	BBB+	A-
Subordinated Debt	BBB	BBB+
Short-Term Debt	K2	K2
Deposit	N/A	A-
Short-Term Deposit	N/A	K2

For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB. First Financial pledged $5.7 billion of certain eligible residential, commercial and farm real estate loans, home equity lines of credit and government, agency and CMBS securities as collateral for borrowings from the FHLB as of December 31, 2018.  

First Financial maintains a short-term credit facility with an unaffiliated bank for $30.0 million that matures in September 2019. 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 shares and the payment of dividends to shareholders. As of December 31, 2018 and December 31, 2017, there was no outstanding balance. The credit agreement requires First Financial to maintain certain covenants related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this line of credit as of December 31, 2018 and December 31, 2017.

First Financial's principal source of asset-funded liquidity is marketable investment securities, particularly those of shorter maturities. The market value of investment securities classified as AFS totaled $2.8 billion and $1.3 billion at December 31, 2018 and 2017, respectively. HTM securities that are maturing within a short period of time are an additional source of liquidity and totaled $0.8 million and $21.8 million at December 31, 2018 and 2017, respectively. Sources of liquidity also include other types of assets such as cash and due from banks, interest-bearing deposits with other banks and loans maturing within one year.

22 First Financial Bancorp 2018 Annual Report

At December 31, 2018, in addition to liquidity on hand of $274.0 million, First Financial had unused and available overnight wholesale funding sources of $3.0 billion, or 21.3% of total assets, to fund loan and deposit activities, in addition to general corporate requirements.

Certain restrictions exist regarding the Bank's ability to transfer funds to the parent company in the form of cash dividends, loans, other assets or advances and the approval of the Bank's primary federal regulator is required to pay dividends in excess of regulatory limitations. Dividends paid to the parent company from its subsidiaries totaled $107.3 million, $54.6 million and $52.7 million for 2018, 2017 and 2016, respectively. As of December 31, 2018, First Financial’s subsidiaries had retained earnings of $637.2 million, of which $181.3 million was available for distribution to First Financial without prior regulatory approval. Additionally, First Financial had $86.9 million in cash at the parent company as of December 31, 2018, which approximates the Company’s regular annual shareholder dividend and operating expenses.

Share repurchases, if any, also impact First Financial's liquidity. For further information regarding share repurchases, see the Capital section that follows.

Capital expenditures, such as banking center expansion, remodeling and technology investments, were $18.2 million for 2018, $6.5 million for 2017 and $9.7 million for 2016. Material commitments for capital expenditures as of December 31, 2018, were $15.9 million. Management believes that sufficient liquidity exists to fund its future capital expenditure commitments.

Management is not aware of any other events or regulatory requirements that, if implemented, are likely to have a material effect on First Financial’s liquidity.

Table 10 • Contractual Obligations as of December 31, 2018
(Dollars in thousands)	Less than one year		One to three years		Three to five years		More than five years		Total
Contractual Obligations
Long-term debt obligations (including interest)
Federal Home Loan Bank borrowings	$	147,176	$	150,578	$	52,775	$	73,244	$	423,773
Subordinated debt	8,851		20,213		19,310		199,188		247,562
Capital loan with municipality	0		0		0		775		775
Operating lease obligations	9,568		17,463		9,285		15,496		51,812
Pension obligations	4,396		10,509		9,656		29,948		54,509
Time deposits	1,407,996		634,758		130,282		528		2,173,564
Total	$	1,577,987	$	833,521	$	221,308	$	319,179	$	2,951,995

CAPITAL

Risk-Based Capital. First Financial and its subsidiary, First Financial Bank, are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory guidelines. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action.

The Board of Governors of the Federal Reserve System approved Basel III in order to strengthen the regulatory capital framework for all banking organizations, subject to a phase-in period for certain provisions.  Basel III established and defined quantitative measures to ensure capital adequacy. These measures require First Financial to maintain minimum amounts and ratios of Common Equity tier 1 capital, total and tier 1 capital to risk-weighted assets and tier 1 capital to average assets (leverage ratio).  

Basel III includes a minimum ratio of common equity tier 1 capital to risk-weighted assets of 6.375% at December 31, 2018, which includes a capital conservation buffer that began on January 1, 2016 at 0.625% and is phased in over a four-year period, increasing by the same amount each subsequent January 1, until fully phased-in at 2.5% of risk-weighted assets on January 1, 2019.  Further, the minimum ratio of tier 1 capital to risk-weighted assets increased to 7.875% at December 31, 2018 and all banks are subject to a 4.0% minimum leverage ratio.  The required total risk-based capital ratio is unchanged. Failure to maintain the required common equity Tier 1 capital conservation buffer will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and pay discretionary compensation to its employees. The capital requirements also provide

First Financial Bancorp 2018 Annual Report 23

Management’s Discussion and Analysis of Financial Condition and Results of Operations

strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans.

First Financial's tier 1 capital increased from 10.63% at December 31, 2017 to 12.28%, at December 31, 2018, while the total capital ratio increased from 13.07% to 14.10% during the same period. The increase in the Company's tier 1 and total capital ratios was primarily due to an increase in capital from higher earnings, partially offset by an increase in risk-weighted assets as a result of the MSFG merger. The leverage ratio increased to 9.71% at December 31, 2018 compared to 8.84% as of December 31, 2017 and the Company’s tangible common equity ratio increased from 8.30% at December 31, 2017 to 8.79% at December 31, 2018.

Management believes that, as of December 31, 2018, First Financial met all capital adequacy requirements to which it was subject. At December 31, 2018 and 2017, regulatory notifications categorized First Financial Bank as well-capitalized under the regulatory framework for prompt corrective action. There have been no conditions or events that management believes has changed the Company’s capital categorization.

For further detail on First Financial's capital ratios at December 31, 2018, see Note 18 – Capital in the Notes to Consolidated Financial Statements.

Table 11 • Capital Adequacy
		December 31,
(Dollars in thousands)		2018			2017
Consolidated capital calculations
	Common stock	$	1,633,256		$	573,109
	Retained earnings	600,014			491,847
	Accumulated other comprehensive loss	(44,408		)	(20,390		)
	Treasury stock, at cost	(110,613		)	(113,902		)
Total shareholders' equity		2,078,249			930,664
	Common equity tier I capital adjustments
	Goodwill and other intangibles	(931,030		)	(209,379		)
Total tangible equity		$	1,147,219		$	721,285
	Total assets	$	13,986,660		$	8,896,923
	Goodwill and other intangibles	(931,030		)	(209,379		)
Total tangible assets		$	13,055,630		$	8,687,544
Common tier 1 capital		$	1,215,613		$	755,735
Tier 1 capital		1,257,366			755,839
Total capital		1,444,146			929,148
Total risk-weighted assets		10,241,159			7,108,629
Average assets (1)		12,948,944			8,554,938
Regulatory capital
	Common tier 1 ratio	11.87		%	10.63		%
	Tier 1 ratio	12.28		%	10.63		%
	Total capital ratio	14.10		%	13.07		%
	Leverage ratio	9.71		%	8.84		%
Other capital ratios
	Total shareholders' equity to ending assets	14.86		%	10.46		%
	Total tangible shareholders' equity to ending tangible assets	8.79		%	8.30		%
(1) For purposes of calculating the Leverage ratio, certain intangible assets are excluded from average assets.

24 First Financial Bancorp 2018 Annual Report

First Financial generally seeks to balance the return of earnings to shareholders through shareholder dividends and share repurchases with capital retention in order to maintain adequate levels of capital and support the Company's growth plans.

Shareholder Dividends. First Financial’s dividend payout ratio, or total dividends paid divided by net income available to common shareholders, was 40.0%, 43.3% and 44.1% for the years 2018, 2017 and 2016, respectively. The dividend payout ratio is continually reviewed by management and the board of directors for consistency with First Financial’s overall capital planning activities and compliance with applicable regulatory limitations. In January 2019, the board of directors authorized an increase to the Company's quarterly dividend from $0.20 to $0.22 per common share, payable on March 15, 2019 to all shareholders of record as of March 1, 2019.

Share Repurchases. In October 2012, First Financial's board of directors approved a share repurchase plan under which the Company has the ability to repurchase up to 5,000,000 common shares. The Company did not repurchase any shares under this plan during 2016, 2017 or 2018. The Company repurchased 40,255 shares for $0.7 million under the 2012 share repurchase plan during 2015 at an average price of $17.32 per share. At December 31, 2018, 3,509,133 shares remained available for purchase under the 2012 share repurchase plan.

In January 2019, First Financial's board of directors approved a share repurchase plan under which the Company has the ability to repurchase up to 5,000,000 shares of the Company's issued and outstanding common stock. Under the plan, the Company can repurchase from time to time, on the open market, in privately-negotiated purchases or otherwise, shares of common stock in such quantities and at such prices, not to exceed 5,000,000 shares. The authority to repurchase will expire in January 2021. Upon the effectiveness of the 2019 repurchase plan, no additional shares will be repurchased under the 2012 repurchase plan.

Shareholders' Equity. Total shareholders’ equity at December 31, 2018 was $2.1 billion, compared to total shareholders’ equity at December 31, 2017 of $0.9 billion. The increase in shareholders' equity is related to the MSFG merger as well as higher earnings.

For further detail, see the Consolidated Statements of Changes in Shareholders’ Equity.

PENSION PLAN

First Financial sponsors a non-contributory defined-benefit pension plan covering substantially all employees. The significant assumptions used in the valuation and accounting for the pension plan include the discount rate, expected return on plan assets and the rate of employee compensation increase. The discount rate assumption was determined based on highly rated corporate bonds, weighted to adjust for their relative size, projected plan cash flows using the annuity substitution method as well as comparisons to external industry surveys. The expected return on plan assets was 7.25% for both 2018 and 2017, and was based on the composition of plan assets in addition to actual returns, economic forecasts and economic trends. The assumed rate of compensation increase was 3.5% and was compared to historical increases for plan participants for reasonableness.

Presented below is the estimated impact on First Financial’s projected benefit obligation and pension expense as of December 31, 2018, assuming shifts in the significant assumptions: 

	Discount rate						Expected return on plan assets					Rate of compensation increase
(Dollars in thousands)		-100 BP		+100 BP			-100 BP		+100 BP			-100 BP			+100 BP
Change in Projected Benefit Obligation		$	5,644	$	(4,507	)	N/A		N/A			$	(488	)	$	709
Change in Pension Expense		234		(77		)	$	1,353	$	(1,353	)	(170		)	292

As a result of the plan’s current funding status and updated actuarial projections for 2018, First Financial recorded expense related to its pension plan of $0.9 million for 2018, while recording income of $0.6 million for 2017 and $1.2 million for 2016 in the Consolidated Statements of Income. Contributions, if necessary, are required to meet ERISA’s minimum funding standards and the estimated quarterly contribution requirements during this period.  First Financial made no cash contributions to fund the pension plan in 2018, 2017 or 2016 and does not expect to make a cash contribution to its pension plan in 2019 given the plan's over-funded status.

See Note 15 – Employee Benefit Plans in the Notes to Consolidated Financial Statements for additional information on First Financial's pension plan.

First Financial Bancorp 2018 Annual Report 25

Management’s Discussion and Analysis of Financial Condition and Results of Operations

ENTERPRISE RISK MANAGEMENT

First Financial considers risk to be any issue that could impact the Company’s ability to meet its objectives or have an adverse impact on its capital or earnings. First Financial manages risks through a structured ERM approach that routinely assesses the overall level of risk, identifies specific risks and evaluates the steps being taken to mitigate those risks. First Financial continues to enhance its risk management capabilities and has, over time, embedded risk awareness as part of the culture of the Company. ERM allows First Financial to align a variety of risk management activities within the Company into a cohesive, enterprise-wide approach and focus on process-level risk management activities and strategic objectives within the risk management culture. Additionally, ERM allows the Company to deliberately develop risk responses and evaluate the effectiveness of mitigation compared to established thresholds for risk appetite and tolerance, in addition to facilitating the consideration of significant organizational changes and consolidation of information through a common process for management and the board of directors.

First Financial has identified nine types of risk that it monitors in its ERM framework.  These risks include credit, market, operational, compliance, strategic, reputation, information technology, cyber and legal.

First Financial uses a robust regulatory risk framework as one of the foundational components of its ERM framework.  This allows for a common categorization across the Company and provides a consistent and complete risk framework that can be summarized and assessed enterprise-wide. Additionally, the risk framework utilized is consistent with that used by the Company’s regulators, which results in additional feedback on First Financial’s ability to assess and measure risk across the organization as well as the ability for management and the board of directors to identify and understand differences in assessed risk profiles.

ERM helps ensure that First Financial continues to identify and adequately address risks that emerge from a combination of new customers, products and associates, changing markets, new lines of business and processes and new or evolving systems.

The goals of First Financial’s ERM framework are to:

• focus on the Company at both the enterprise and line of business levels;

• align the Company's risk appetite with its strategic, operational, compliance and reporting objectives;

• enhance risk response decisions;

• reduce operational deficiencies and possible losses;

• identify and manage interrelated risks;

• provide integrated responses to multiple risks;

• improve the deployment and allocation of capital; and

• improve overall business performance.

Specific enterprise-level objectives include:

• creating a holistic view of risk in which risk is comprehensively considered, consistently communicated and documented in decision making;

• centralizing the oversight of risk management activities;

• defining the risks that will be addressed by the enterprise and each functional area or business unit to create an awareness of risks affecting the Company;

• establishing and maintaining systems and mechanisms to identify, assess, monitor and measure risks that may impact First Financial’s ability to achieve its business objectives;

• creating a process which ensures that, for all new lines of business and new product decisions, management evaluates the expertise needed and assesses the risks involved;

• establishing and maintaining systems and mechanisms to monitor risk responses;

• developing risk occurrence information systems to provide early warning of events or situations that create risk for the Company;

• maintaining a compliance culture and framework that ensures adherence to laws, rules and regulations, fair treatment and privacy of customers and prevention of money laundering and terrorist financing;

• implementing and reviewing risk measurement techniques that management may use to establish the Company’s risk tolerance, assess risk likelihood and impact and analyze risk monitoring processes; and

• establishing appropriate management reporting systems regarding the enterprise-wide risk exposures and allocation of capital.

26 First Financial Bancorp 2018 Annual Report

Line of business-level objectives focus on why the particular business or business unit risk exists; how the business affects the Company’s strategy, earnings, reputation and other key success factors; and whether the line of business objectives are aligned with enterprise objectives.

Board of Directors and Board Risk & Compliance Committees. First Financial’s board of directors is responsible for understanding the Company’s compliance and risk management objectives and risk tolerance, and as such, board oversight of the Company’s compliance and risk management activities is a key component to an effective risk management process. Responsibilities of the board of directors include:

• establishing and guiding the Company’s strategic direction and tolerance for risk, including the determination of the aggregate risk appetite and identifying the senior managers who have the responsibility for managing risk;

• monitoring the Company’s performance and overall risk profile, ensuring that the level of risk is maintained at prudent levels and is supported by adequate capital;

• ensuring that the Company implements sound fundamental principles that facilitate the identification, measurement, monitoring and control of risk;

• ensuring that adequate resources are dedicated to compliance and risk management; and

• ensuring that awareness of risk management activities is evident throughout the organization.

The board of directors has defined broad risk tolerance levels, or limits, to guide management in the decision-making process, and is responsible for establishing information and communication requirements to ensure that risk management activities remain within these tolerance limits. The risk and compliance committees, which are standing committee of the board of directors, are responsible for carrying out the board’s responsibilities in this regard. Other standing committees of the board (audit, compensation, corporate governance and nominating, and capital markets) oversee particular areas of risk assigned specifically to them.

Executive and Senior Management. Members of executive and senior management are responsible for managing risk activities and delegating risk authority and tolerance to the responsible risk owners.

Management must identify which processes and activities are critical to achieving the Company’s business objectives within the designated tolerance levels.  Management must then delegate responsibility, authority and accountability to the appropriate risk owners who are responsible for ensuring that the respective processes and activities are designed and implemented to manage the related risks within those delegated tolerance levels.

Chief Risk Officer. The chief risk officer is responsible for the oversight of the Company’s ERM processes.  The chief risk officer may appoint other officers or establish other management committees as required for effective risk management and governance, including risk identification, risk measurement, risk monitoring, risk control or mitigation and risk reporting.  The chief risk officer is also responsible for the maintenance of procedures, methodologies and guidelines considered necessary to administer the ERM program.

Chief Compliance Officer. The chief compliance officer is responsible for the oversight of the Company’s compliance management function, which includes Bank Secrecy Act/Anti-Money Laundering and all other regulatory compliance.  The chief compliance officer is authorized to implement all necessary actions to ensure achievement of the objectives of an effective compliance program and may appoint other officers or establish other management committees as required for effective compliance management. The chief compliance officer reviews and evaluates compliance issues and concerns and is responsible for monitoring and reporting results of the compliance efforts in addition to providing guidance to the board of directors and senior management team on matters relating to compliance.

Committee Chairs. The ERM program utilizes multiple management committees as its primary assessment and communication mechanism for identified risks.  Committee chairs play key roles in the execution of risk management activities throughout the enterprise and are responsible for continuous updates and communication among committee members in conjunction with the risk management department regarding changes to risk profiles, changes to risk assessments and the emergence of new risks that could impact the Company.

Internal Audit. Internal audit is responsible for planning audit activities to periodically reassess the design and operation of key risk management processes and to make periodic evaluations of the ongoing accuracy and effectiveness of the communications from risk owners to senior management and from senior management to the board of directors.

First Financial Bancorp 2018 Annual Report 27

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Risk Assessment Process. The periodic assessment of risks is a key component of a sound ERM program.  Managers, business line leaders and executives are responsible for developing the risk assessment for their individual departments, business lines and subsidiaries.  The chief risk officer, management and the board risk and compliance committees are responsible for ensuring that risk is viewed and analyzed from a global perspective. Furthermore, interrelated risks are considered, assessing how a single risk or event may create multiple risks.

Risk management programs, in each functional component and in aggregate, accomplish the following:

• identify risks and their respective owners;

• link identified risks and their mitigation to the Company's strategic objectives;

• evaluate the risks and their associated likelihood of occurrence and consequences;

• develop strategies to manage risk, such as avoiding the risk; reducing the negative effect of the risk; transferring the risk to another party; and/or accepting some or all of the consequences of a particular risk;

• prioritize the risk issues with regard to the current risk status and trend;

• provide reports to management and risk owners that will assist them in implementing appropriate risk management processes;

• assist management in assessing the alternatives for managing risks;

• assist management in the development of risk management plans; and

• track risk management efforts.

Monitoring and Reporting. The board of directors oversees risk reporting and monitoring through the board risk and compliance committee, which meets at least quarterly. 

Management continually reviews any risk identified as key, as well as the appropriateness of established tolerance limits and the actions considered as necessary to mitigate key risks.  As circumstances warrant, management provides recommendations to the board risk and compliance committee related to changes or adjustments to key risks or tolerance limits.

First Financial believes that communication is fundamental to successful risk management and productive reporting and communication between the risk management department, management and the board of directors is required for collaborative and effective risk management.

CREDIT RISK

Credit risk represents the risk of loss due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms. First Financial manages credit risk through its underwriting practices, periodically reviewing and approving its credit exposures using credit policies and guidelines approved by the board of directors.

Allowance for loan and lease losses. The ALLL is a reserve accumulated on the Consolidated Balance Sheets through the recognition of the provision for loan and lease losses. First Financial records the provision in the Consolidated Statements of Income to maintain the ALLL at a level considered sufficient to absorb probable incurred loan and lease losses inherent in the portfolio. Actual losses on loans and leases are charged against the ALLL. The recorded values of the loans and leases actually removed from the Consolidated Balance Sheets due to credit deterioration are referred to as charge-offs. 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. All loans charged-off are subject to continuous review and concerted efforts are made to maximize any recovery. In most cases, the borrower’s debt obligation is not canceled even though the balance may have been charged-off. Any subsequent recovery of a previously charged-off loan is credited back to the ALLL.

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 situations that may affect a specific borrower's ability to repay. The evaluation of these factors is the responsibility of the ALLL committee, which is comprised of senior officers from the risk management, credit administration, finance and lending areas.

See Table 12 – Summary of the ALLL and Selected Statistics for a summary of activity impacting the ALLL and Table 13 – Allocation of the ALLL for detail on its composition.

28 First Financial Bancorp 2018 Annual Report

2018 vs. 2017. The ALLL at December 31, 2018 was $56.5 million, or 0.64% of loans, which was a $2.5 million, or 4.7%, increase from $54.0 million, or 0.90% of loans at December 31, 2017. Provision expense increased$11.0 million, or 307.2%, to $14.6 million in 2018 from $3.6 million in 2017.

Net charge-offs increased $4.5 million, or 60.4%, to $12.1 million for 2018 compared to $7.5 million for 2017, while the ratio of net charge-offs as a percentage of average loans outstanding increased slightly to 0.15% in 2018 from 0.13% in 2017. The increase in net charge-offs during 2018 was primarily attributed to two large agricultural relationships; however net charge-offs remain at historically low levels.

The slight change in the ALLL during 2018 reflected stability in the property values and economic conditions across the footprint. The decline in the ALLL as a percentage of loans reflects the impact of accounting for acquired loans, which are recorded at fair value at acquisition and as such have no related allowance. The ALLL as a percentage of nonperforming loans, including accruing TDRs was 65.1% at December 31, 2018 compared with 129.8% at December 31, 2017.

First Financial Bancorp 2018 Annual Report 29

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For further discussion of First Financial's ALLL, see Note 6 – Allowance for Loan and Lease Losses in the Notes to Consolidated Financial Statements.

Table 12 • Summary of the ALLL and Selected Statistics
(Dollars in thousands)	2018			2017			2016			2015			2014
Transactions in the allowance for loan and lease losses:
Balance at January 1	$	54,021		$	57,961		$	53,398		$	52,858		$	62,730
Provision for loan and lease losses	14,586			3,582			10,140			9,641			1,528
Loans charged-off:
Commercial and industrial	11,533			10,194			2,630			5,408			9,156
Lease financing	0			0			0			0			0
Real estate – construction	0			1			93			85			1,348
Real estate – commercial	4,835			1,038			4,983			10,083			9,478
Real estate – residential	422			435			387			1,531			1,454
Home equity	1,725			913			1,445			1,891			2,774
Installment	435			225			386			509			605
Credit card	1,720			857			1,190			1,049			1,158
Total loans charged-off	20,670			13,663			11,114			20,556			25,973
Recoveries of loans previously charged-off:
Commercial and industrial	2,066			1,650			1,155			3,724			4,769
Lease financing	1			1			1			2			63
Real estate – construction	146			89			285			253			381
Real estate – commercial	4,106			2,719			2,502			5,214			7,617
Real estate – residential	211			215			236			558			531
Home equity	1,309			1,027			720			1,001			511
Installment	575			234			335			463			358
Credit card	191			206			303			240			343
Total recoveries	8,605			6,141			5,537			11,455			14,573
Net charge-offs	12,065			7,522			5,577			9,101			11,400
Balance at December 31	$	56,542		$	54,021		$	57,961		$	53,398		$	52,858
Net charge-offs to average loans and leases
Commercial and industrial	0.38		%	0.47		%	0.08		%	0.12		%	0.37		%
Lease financing	0.00		%	0.00		%	0.00		%	0.00		%	(0.05		)%
Real estate-construction	(0.03		)%	(0.02		)%	(0.05		)%	(0.07		)%	0.71		%
Real estate-commercial	0.02		%	(0.07		)%	0.11		%	0.23		%	0.10		%
Real estate-residential	0.03		%	0.05		%	0.03		%	0.19		%	0.20		%
Home equity	0.06		%	(0.02		)%	0.16		%	0.19		%	0.52		%
Installment	(0.15		)%	(0.02		)%	0.11		%	0.11		%	0.50		%
Credit card	3.19		%	1.44		%	2.10		%	2.04		%	2.14		%
Total net charge-offs	0.15		%	0.13		%	0.10		%	0.18		%	0.27		%
Credit quality ratios:
As a percent of year-end loans, net of unearned income:
Allowance for loan and lease losses	0.64		%	0.90		%	1.01		%	0.99		%	1.11		%
Nonperforming loans (1)	0.98		%	0.69		%	0.83		%	1.06		%	1.35		%
Allowance for loan and lease losses to nonperforming loans (1)	65.13		%	129.77		%	120.83		%	93.89		%	82.08		%

⁽¹⁾ Includes loans classified as nonaccrual and troubled debt restructurings.

30 First Financial Bancorp 2018 Annual Report

Table 13 • Allocation of the ALLL
	December 31,
	2018				2017				2016				2015				2014
(Dollars in thousands)	Allowance		Percent of Loans to Total Loans		Allowance		Percent of Loans to Total Loans		Allowance		Percent of Loans to Total Loans		Allowance		Percent of Loans to Total Loans		Allowance		Percent of Loans to Total Loans
Balance at End of Period Applicable to:
Commercial and industrial	$	18,746	28.5	%	$	17,598	31.8	%	$	19,225	31.0	%	$	16,995	30.9	%	$	13,870	27.5	%
Lease financing	1,130		1.1	%	675		1.5	%	716		1.6	%	821		1.7	%	435		1.6	%
Real estate – construction	3,413		6.2	%	3,577		7.8	%	3,282		6.9	%	1,810		5.8	%	1,045		4.2	%
Real estate – commercial	21,048		42.5	%	20,930		41.4	%	26,540		42.2	%	23,656		41.9	%	27,086		44.8	%
Real estate – residential	4,964		10.8	%	4,683		7.8	%	3,208		8.7	%	4,014		9.5	%	3,753		10.5	%
Installment, home equity & credit card	7,241		10.9	%	6,558		9.7	%	4,990		9.6	%	6,102		10.2	%	6,669		11.4	%
Total	$	56,542	100.0	%	$	54,021	100.0	%	$	57,961	100.0	%	$	53,398	100.0	%	$	52,858	100.0	%

MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, foreign exchange rates and equity prices. The primary source of market risk for First Financial is interest rate risk. Interest rate risk is the risk to earnings and the value of the Company's equity arising from changes in market interest rates. Interest rate risk arises in the normal course of business to the extent that there is a divergence between the amount of interest-earning assets and the amount of interest-bearing liabilities that are prepaid, withdrawn, re-priced or mature in specified periods. First Financial seeks to achieve consistent growth in net interest income and equity while managing volatility from shifts in market interest rates.

First Financial monitors the Company's interest rate risk position using income simulation models and EVE sensitivity analyses that capture both short-term and long-term interest rate risk exposure.  Income simulation involves forecasting NII under a variety of interest rate scenarios. EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest-rate scenarios and First Financial uses EVE sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital.  For both NII and EVE modeling, First Financial leverages instantaneous parallel shocks to evaluate interest rate risk exposure across rising and falling rate scenarios. Additional scenarios evaluated include implied market forward rate forecasts and various non-parallel yield curve twists.

First Financial’s interest rate risk models are based on the contractual and assumed cash flows and repricing characteristics for the Company’s assets, liabilities and off-balance sheet exposure. A number of assumptions are incorporated into the interest rate risk models, including prepayment behaviors and repricing spreads for assets in addition to attrition and repricing rates for liabilities. Assumptions are primarily derived from behavior studies of the Company’s historical client base and are continually refined. Modeling the sensitivity of NII and EVE to changes in market interest rates is highly dependent on the assumptions incorporated into the modeling process.

Non-maturity deposit modeling is particularly dependent on the assumption for repricing sensitivity known as a beta. Beta is the amount by which First Financial’s interest bearing non-maturity deposit rates will increase when short-term interest rates rise. The Company utilized a weighted average deposit beta of 61% in its interest rate risk modeling as of December 31, 2018. First Financial also includes an assumption for the migration of non-maturity deposit balances into CDs for all upward rate scenarios beginning with the +100 BP scenario, thereby increasing deposit costs and reducing asset sensitivity.

First Financial Bancorp 2018 Annual Report 31

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Presented below is the estimated impact on First Financial’s NII and EVE as of December 31, 2018, assuming immediate, parallel shifts in interest rates:

	% Change from base case for  immediate parallel changes in rates
	-100 BP	+100 BP	+200 BP
NII - Year 1	(4.13)%	0.88%	1.23%
NII - Year 2	(5.27)%	1.38%	2.08%
EVE	(2.78)%	0.06%	0.43%

“Risk-neutral” refers to the absence of a strong bias toward either asset or liability sensitivity. “Asset sensitivity” is when a company's interest-earning assets reprice more quickly or in greater quantities than interest-bearing liabilities. Conversely, “liability sensitivity” is when a company's interest-bearing liabilities reprice more quickly or in greater quantities than interest-earning assets. In a rising interest rate environment, asset sensitivity results in higher net interest income while liability sensitivity results in lower net interest income. In a declining interest rate environment, asset sensitivity results in lower net interest income while liability sensitivity results in higher net interest income.

First Financial was within internal policy limits set for the above interest rate risk scenarios as of December 31, 2018.  During 2018, the projected results for NII and EVE continue to reflect modest asset sensitivity, but are less asset sensitive than 2017 primarily due to the MSFG merger. First Financial continues to manage its balance sheet with a bias toward neutrality or slight asset sensitivity while simultaneously balancing the potential earnings impact of this strategy.

First Financial continually evaluates the sensitivity of its interest rate risk position to modeling assumptions. The table that follows reflects First Financial’s estimated NII sensitivity profile as of December 31, 2018 assuming both a 25% increase and decrease to the beta assumption on managed rate deposit products:

	Beta sensitivity (% change from base)
	+100 BP				+200 BP
	Beta 25% lower		Beta 25% higher		Beta 25% lower		Beta 25% higher
NII-Year 1	2.51	%	(0.75	)%	4.17	%	(1.70	)%
NII-Year 2	3.00	%	(0.23	)%	4.99	%	(0.82	)%

See the Net Interest Income section of Management’s Discussion and Analysis for further discussion.

Table 14 – Market Risk Disclosure projects the principal maturities and yields of First Financial’s interest-bearing financial instruments at December 31, 2018 for the next five years and thereafter, as well as the fair value of the instruments. For loans, securities and liabilities with contractual maturities, the table presents principal cash flows and related weighted-average interest rates by contractual maturities. For investment securities, including MBSs and CMOs, principal cash flows are based on estimated average lives. For loan instruments without contractual maturities, such as credit card loans, principal payments are allocated based on historical of payment activity trends. Maturities for interest-bearing liability accounts with no contractual maturity dates are estimated according to historical experience of cash flows and current expectations of client behaviors when calculating fair value, but are included in the maturing in one year or less category as they can be withdrawn on demand.

32 First Financial Bancorp 2018 Annual Report

Table 14 • Market Risk Disclosure
																						Fair Value
	Principal Amount Maturing In																					December 31,
(Dollars in thousands)	2019			2020			2021			2022			2023			Thereafter			Total			2018
Rate sensitive assets
Fixed interest rate loans (1)	$	400,326		$	342,057		$	295,071		$	253,218		$	258,668		$	626,583		$	2,175,923		$	2,102,503
Average interest rate	4.05		%	4.34		%	4.38		%	4.58		%	4.84		%	4.16		%	4.32		%
Variable interest rate loans (1)	1,245,843			692,162			568,715			522,641			596,612			2,970,148			6,596,121			6,481,055
Average interest rate	5.26		%	5.12		%	5.33		%	5.29		%	5.60		%	5.21		%	5.26		%
Fixed interest rate securities	80,463			200,971			190,788			367,742			473,286			1,284,267			2,597,517			2,592,306
Average interest rate	2.96		%	3.40		%	3.41		%	2.95		%	3.06		%	3.18		%	3.20		%
Variable interest rate securities	52,730			125,957			69,681			26,098			116,168			220,432			611,066			611,067
Average interest rate	3.85		%	3.93		%	3.76		%	5.77		%	4.08		%	3.72		%	4.00		%
Other earning assets	37,738			0			0			0			0			0			37,738			37,738
Average interest rate	2.50		%	0.00		%	0.00		%	0.00		%	0.00		%	0.00		%	2.50		%
Rate sensitive liabilities
Noninterest-bearing checking (2)	$	2,492,434		$	0		$	0		$	0		$	0		$	0		$	2,492,434		$	2,492,434
Savings and interest-bearing checking (2)	547,440			4,926,956			0			0			0			0			5,474,396			5,474,396
Average interest rate	0.61		%	0.61		%	0.00		%	0.00		%	0.00		%	0.00		%	0.61		%
Time deposits	1,395,677			471,312			163,625			110,178			20,112			12,660			2,173,564			2,146,645
Average interest rate	1.79		%	2.10		%	1.86		%	1.78		%	1.16		%	0.12		%	1.85		%
Fixed interest rate borrowings	1,114,399			104,100			19,013			49,327			0			199,609			1,486,448			1,474,083
Average interest rate	2.12		%	2.21		%	1.08		%	1.71		%	0.00		%	4.10		%	2.36		%
Variable interest rate borrowings	84,591			0			0			0			0			40,391			124,982			124,541
Average interest rate	0.47		%	0.00		%	0.00		%	0.00		%	0.00		%	5.19		%	2.07		%

⁽¹⁾ Includes loans held for sale.

⁽²⁾ Deposits without a stated maturity are represented as maturing within one year due to the ability of the client to withdraw deposited amounts on demand.

OPERATIONAL RISK

Operational risk is the risk of loss due to human behavior, inadequate or failed internal systems and controls and external influences such as market conditions, fraudulent activities, natural disasters and security risks. First Financial continuously strives to strengthen the Company’s system of internal controls and operating processes as well as associates' ability to assess the impact on earnings and capital from operational risk.

COMPLIANCE RISK

Compliance risk represents the risk of regulatory sanctions, reputational impact or financial loss resulting from the Company’s failure to comply with rules and regulations issued by the various banking agencies and standards of good banking practice. Activities which may expose First Financial to compliance risk include, but are not limited to, those dealing with the prevention of money laundering, privacy and data protection, community reinvestment initiatives, fair lending challenges resulting from the Company’s expansion of its banking center network and employment and tax matters.

STRATEGIC AND REPUTATION RISK

Strategic risk represents the risk of loss due to failure to fully develop and execute business plans, failure to assess current and new business opportunities, markets and products and any other event not identified in the defined risk types previously mentioned. Strategic risk focuses on analyzing factors that affect the direction of the institution or improper implementation of decisions.

First Financial Bancorp 2018 Annual Report 33

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Reputation risk represents the risk of loss or impairment of earnings and capital from negative publicity. This affects the ability of First Financial to establish new relationships or services or to continue servicing existing relationships. Reputation risk is recognized by the effect that public opinion could have on First Financial's franchise value and has evolved in recent years with the growth in social media.

Mitigation of strategic and reputation risk elements is achieved through initiatives that help First Financial better understand and report on the various risks it faces each day, including those related to the development of new products and business initiatives.

INFORMATION TECHNOLOGY RISK

Information technology risk is the risk that the information technologies utilized by FFB are not efficiently and effectively supporting the current and future needs of the business, operating as intended or compromise the availability, integrity and reliability of data and information. This risk also considers whether or not the Company’s information technology exposes the Company's assets to potential loss or misuse, or threatens the Company’s ability to sustain the operation of critical business processes.

CYBER RISK

Cyber risk is differentiated from information technology risk by threat interactions that yield high impact consequences and ever-increasing probability. While standard security operations address most day to day incidents, cyber risk includes threats and attacks that often use advanced tools, techniques and processes to evade detection or inflict maximum damage to an organization's information assets. Cyber threats and attacks adapt and evolve rapidly, so First Financial works to continuously strengthen the Company’s posture toward cybersecurity. Critical components to the Company’s cyber risk control structure include corporate governance, threat intelligence, security awareness training and patch management programs. Cyber risk mitigation includes effectively identifying, detecting, responding to, protecting and recovering from cyber threats.

LEGAL RISK

Legal risk encompasses the impact of unenforceable contracts, lawsuits or adverse judgments, which can disrupt or otherwise negatively affect the Company’s operations or condition. Legal risk also includes the exposure from litigation, fiduciary relationships and contractual obligations from both traditional and nontraditional financial institution activities. Legal risk is present in all areas of the Company and its activities.

CRITICAL ACCOUNTING POLICIES

First Financial’s Consolidated Financial Statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements. These policies require the reliance on estimates and assumptions which are inherently subjective and may be susceptible to significant change. Changes in underlying factors, assumptions or estimates could have a material impact on First Financial’s future financial condition and results of operations. In management’s opinion, some of these estimates and assumptions have a more significant impact than others on First Financial’s financial reporting. For First Financial, these estimates and assumptions include accounting for the ALLL, goodwill, pension and income taxes.

ALLL. For each reporting period, 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).

Management's determination of the adequacy of the ALLL is based on an assessment of the probable incurred loan and lease losses inherent in the portfolio given the conditions at the time. The ALLL is generally increased by provision expense and decreased by charge-offs, net of recoveries of amounts previously charged-off. Loans are charged off when management believes that the collection of the principal amount owed in full, either through payments from the borrower or from the liquidation of collateral, is unlikely.

34 First Financial Bancorp 2018 Annual Report

To the extent actual outcomes differ from management’s estimates, additional provision for credit losses may be required that would impact First Financial’s operating results. The Credit Risk section of this annual report provides management’s analysis of the ALLL.

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. The Company is required to evaluate goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. First Financial performs its annual impairment test effective October 1, absent events or changes in circumstances that indicate the carrying value of goodwill may not be recoverable.

The Company’s goodwill is accounted for in a single reporting unit representing the consolidated entity. Fair value is estimated using the market capitalization of the Company, as of the annual impairment testing date. First Financial also utilizes additional information and analysis to corroborate the use of the Company’s market capitalization as a proper indicator of fair value for purposes of the annual goodwill impairment test.

The additional information and analysis compares readily available external market data regarding the Company's value to total shareholders' equity. These analyses include utilizing a multiple of earnings method in which First Financial’s annualized earnings are compared to equity to provide an implied book value-to earnings multiple, which is then compared to current marketplace earnings multiples at which banks are being traded. Also, the analyses use the discounted cash flows of First Financial’s assets and liabilities, to determine an implied fair value of the Company, which is compared to the Company’s book value.

Pension. First Financial sponsors a non-contributory defined-benefit pension plan covering substantially all employees. Accounting for the pension plan involves material estimates regarding future plan obligations and investment returns on plan assets. Significant assumptions used in the pension plan include the discount rate, expected return on plan assets and the rate of compensation increase. First Financial determines the discount rate assumption using published corporate bond indices and the projected cash flows of the pension plan. First Financial also utilizes external surveys for industry comparisons which provided a test for reasonableness. The expected long-term return on plan assets is based on the composition of plan assets as well as a economic forecasts and trends in addition to actual returns, while the rate of compensation increase is compared to historical increases for plan participants. Changes in these assumptions can have a material impact on the amount of First Financial’s future pension obligations, on the funded status of the plan and on the Company's operating results.

Income Taxes. First Financial evaluates and assesses the relative risks and appropriate tax treatment of transactions after considering statutes, regulations, judicial precedent and other information, and maintains tax accruals consistent with its evaluation of these relative risks. Changes to the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by taxing authorities and changes to statutory, judicial and regulatory guidance that impact the relative risks of tax positions. These changes, when they occur, can affect deferred taxes and accrued taxes as well as the current period’s income tax expense and can be material to the Company's operating results.

First Financial regularly reviews its tax positions and establishes reserves for income tax-related uncertainties based on estimates of whether it is more likely than not that the tax uncertainty would be sustained upon challenge by the appropriate tax authorities which would then result in additional taxes, penalties and interest due.  Provisions for tax reserves, if any, are included in income tax expense in the Consolidated Financial Statements.

First Financial Bancorp 2018 Annual Report 35

Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the Act). In addition, certain statements in future filings by First Financial with the SEC, in press releases, and in oral and written statements made by or with the approval of First Financial which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to, projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure and other financial items, statements of plans and objectives of First Financial or its management or board of directors and statements of future economic performances and statements of assumptions underlying such statements. Words such as ''believes,'' ''anticipates,'' “likely,” “expected,” ''intends,'' and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Management's analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

▪ management's ability to effectively execute its business plan;

▪ the risk that the strength of the United States economy in general and the strength of the local economies in which we conduct operations may deteriorate resulting in, among other things, a further deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio, allowance for loan and lease losses and overall financial performance;

▪ U.S. fiscal debt and budget matters;

▪ the ability of financial institutions to access sources of liquidity at a reasonable cost;

▪ the impact of upheaval in the financial markets and the effectiveness of domestic and international governmental actions taken in response, and the effect of such governmental actions on us, our competitors and counterparties, financial markets generally and availability of credit specifically, and the U.S. and international economies, including potentially higher FDIC premiums arising from increased payments from FDIC insurance funds as a result of depository institution failures;

▪ the effect of and changes in policies and laws or regulatory agencies (notably the Dodd-Frank Wall Street Reform and Consumer Protection Act and the capital rules promulgated by federal banking regulators);

▪ the effect of the current interest rate environment or changes in interest rates on our net interest margin and our loan originations and securities holdings;

▪ our ability to keep up with technological changes;

▪ failure or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers;

▪ mergers and acquisitions, including costs or difficulties related to the integration of acquired companies;

▪ the risk that exploring merger and acquisition opportunities may detract from management's time and ability to successfully manage our business;

▪ expected cost savings in connection with acquisitions may not be fully realized or realized within the expected time frames, and deposit attrition, customer loss and revenue loss following completed acquisitions may be greater than expected;

▪ our ability to increase market share and control expenses;

▪ the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the FASB and the SEC;

▪ adverse changes in the creditworthiness of our borrowers and lessees, collateral values, the value of investment securities and asset recovery values;

▪ adverse changes in the securities, debt and/or derivatives markets;

▪ our success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services;

▪ monetary and fiscal policies of the Board of Governors of the Federal Reserve System (Federal Reserve) and the U.S. government and other governmental initiatives affecting the financial services industry;

▪ unpredictable natural or other disasters could have an adverse effect on us in that such events could materially disrupt our operations or our vendors' operations or willingness of our customers to access the financial services we offer;

▪ our ability to manage loan delinquency and charge-off rates and changes in estimation of the adequacy of the allowance for loan and lease losses; and

▪ the costs and effects of litigation and of unexpected or adverse outcomes in such litigation.

36 First Financial Bancorp 2018 Annual Report

Such forward-looking statements are meaningful only on the date when such statements are made, and First Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made to reflect the occurrence of unanticipated events.

These and other risk factors are more fully described in First Financial's Annual Report on Form 10-K for the year ended December 31, 2018 under the section entitled “Item 1A. Risk Factors” and from time to time, in other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those expressed in or implied by any forward-looking statements. Except to the extent required by applicable law or regulation, First Financial undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

First Financial Bancorp 2018 Annual Report 37

Statistical Information
	2018							2017								2016
(Dollars in thousands)	Average Balance			Interest		Average Yield		Average Balance			Interest			Average Yield		Average Balance			Interest			Average Yield
Earning assets
Loans and leases (1), (4)
Commercial and industrial (2)	$	2,518,333		$	150,113	5.96	%	$	1,815,925		$	98,683		5.43	%	$	1,741,084		$	91,278		5.24	%
Lease financing (2)	91,476			3,911		4.28	%	86,662			3,999			4.61	%	96,337			3,968			4.12	%
Construction-real estate	540,014			28,761		5.33	%	429,868			18,076			4.21	%	357,171			13,894			3.89	%
Commercial-real estate	3,310,697			178,235		5.38	%	2,448,570			110,586			4.52	%	2,359,480			106,122			4.50	%
Residential-real estate	821,454			38,543		4.69	%	499,397			19,588			3.92	%	521,654			21,037			4.03	%
Installment and other consumer	868,724			49,202		5.66	%	565,441			31,251			5.53	%	552,891			28,177			5.10	%
Total loans and leases	8,150,698			448,765		5.51	%	5,845,863			282,183			4.83	%	5,628,617			264,476			4.70	%
Indemnification asset	370			0		0.00	%	9,535			(3,871		)	(40.60	)%	14,831			(4,509		)	(30.40	)%
Investment securities (3)
Taxable	2,451,352			79,076		3.23	%	1,791,729			50,568			2.82	%	1,693,105			43,103			2.55	%
Tax-exempt (2)	445,815			16,997		3.81	%	209,658			9,105			4.34	%	165,773			6,977			4.21	%
Total investment securities (3)	2,897,167			96,073		3.32	%	2,001,387			59,673			2.98	%	1,858,878			50,080			2.69	%
Interest-bearing deposits with other banks	32,090			691		2.15	%	30,933			347			1.12	%	21,907			118			0.54	%
Total earning assets	11,080,325			545,529		4.93	%	7,887,718			338,332			4.29	%	7,524,233			310,165			4.12	%
Nonearning assets
Allowance for loan and lease losses	(56,115		)					(56,599		)						(56,860		)
Cash and due from banks	188,971							116,409								119,444
Accrued interest and other assets	1,398,257							663,875								664,886
Total assets	$	12,611,438						$	8,611,403							$	8,251,703
Interest-bearing liabilities
Deposits
Interest-bearing demand	$	2,169,396		$	8,446	0.39	%	$	1,491,114		$	4,242		0.28	%	$	1,465,804		$	2,119		0.14	%
Savings	2,990,731			18,050		0.60	%	2,412,788			15,941			0.66	%	2,022,564			5,559			0.27	%
Time	1,938,709			30,466		1.57	%	1,189,963			14,999			1.26	%	1,355,875			14,935			1.10	%
Total interest-bearing deposits	7,098,836			56,962		0.80	%	5,093,865			35,182			0.69	%	4,844,243			22,613			0.47	%
Borrowed funds
Short-term borrowings	947,427			18,033		1.90	%	830,365			8,193			0.99	%	880,457			4,506			0.51	%
Long-term debt	438,567			16,152		3.68	%	120,794			6,153			5.09	%	119,622			6,160			5.15	%
Total borrowed funds	1,385,994			34,185		2.47	%	951,159			14,346			1.51	%	1,000,079			10,666			1.07	%
Total interest-bearing liabilities	8,484,830			91,147		1.07	%	6,045,024			49,528			0.82	%	5,844,322			33,279			0.57	%
Noninterest-bearing liabilities
Noninterest-bearing demand deposits	2,217,349							1,540,384								1,456,802
Other liabilities	156,998							128,564								105,795
Shareholders' equity	1,752,261							897,431								844,784
Total liabilities and shareholders' equity	$	12,611,438						$	8,611,403							$	8,251,703
Net interest income and interest rate spread (fully tax equivalent)				$	454,382	3.86	%				$	288,804		3.47	%				$	276,886		3.55	%
Net interest margin (fully tax equivalent)						4.10	%							3.66	%							3.68	%
Interest income and yield				$	540,382	4.88	%				$	333,073		4.22	%				$	305,950		4.07	%
Interest expense and rate				91,147		1.07	%				49,528			0.82	%				33,279			0.57	%
Net interest income and spread				$	449,235	3.81	%				$	283,545		3.40	%				$	272,671		3.50	%
Net interest margin						4.05	%							3.59	%							3.62	%
(1) Nonaccrual loans are included in average loan balance and loan fees are included in interest income.
(2) Interest income on tax-exempt investments and on certain tax-exempt loans and leases has been adjusted to a tax equivalent basis using a 21.00% tax rate for 2018 and a 35.00% tax rate for 2017 and 2016.
(3) Includes investment securities held-to-maturity, investment securities available-for-sale, trading investment securities and other investments.
(4) Includes loans held-for-sale.

38 First Financial Bancorp 2018 Annual Report

Management’s Report on Internal Control over Financial Reporting

First Financial’s management is responsible for establishing and maintaining adequate internal control over financial reporting. First Financial’s internal control over financial reporting is a process designed under the supervision of First Financial’s chief executive officer and chief financial officer 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. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation. As of December 31, 2018, First Financial’s management, including the chief executive officer and the chief financial officer, evaluated the effectiveness of First Financial’s internal controls over financial reporting, using as its framework for that evaluation the Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission (2013 framework). Based on the evaluation, we believe that, as of December 31, 2018, our internal control over financial reporting is effective based on those criteria.

Crowe LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K, has issued an attestation report on First Financial’s internal control over financial reporting as of December 31, 2018. The report, which expresses an unqualified opinion on First Financial’s internal control over financial reporting as of December 31, 2018, is included in the information that follows under the heading “Report of Independent Registered Public Accounting Firm."

/s/ Archie M. Brown, Jr.	/s/ James M. Anderson
President and Chief Executive Officer	Executive Vice President and Chief Financial Officer
February 22, 2019	February 22, 2019

First Financial Bancorp 2018 Annual Report 39

Crowe LLP Independent Member Crowe Global

Report of Independent Registered Public Accounting Firm

Shareholders and the Board of Directors of First Financial Bancorp

Cincinnati, Ohio

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of First Financial Bancorp (the "Company") as of December 31, 2018 and 2017, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows each of the years in the three-year period ended December 31, 2018 and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain

40 First Financial Bancorp 2018 Annual Report

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Crowe LLP

We have served as the Company's auditor since 2015, which is the year the engagement letter was signed for the audit of the 2016 financial statements.

Indianapolis, Indiana

February 22, 2019

First Financial Bancorp 2018 Annual Report 41

Consolidated Balance Sheets

	December 31,
(Dollars in thousands)	2018			2017
Assets
Cash and due from banks	$	236,221		$	150,650
Interest-bearing deposits with other banks	37,738			33,974
Investment securities available-for-sale, at fair value (amortized cost $2,792,326 at December 31, 2018 and $1,348,227 at December 31, 2017)	2,779,255			1,349,408
Investment securities held-to-maturity (fair value $424,118 at December 31, 2018 and $653,101 at December 31, 2017)	429,328			654,008
Other investments	115,660			53,140
Loans held for sale	4,372			11,502
Loans and leases
Commercial & industrial	2,514,661			1,912,743
Lease financing	93,415			89,347
Construction real estate	548,935			467,730
Commercial real estate	3,754,681			2,490,091
Residential real estate	955,646			471,391
Home equity	817,282			493,604
Installment	93,212			41,586
Credit card	46,382			46,691
Total loans and leases	8,824,214			6,013,183
Less: Allowance for loan and lease losses	56,542			54,021
Net loans and leases	8,767,672			5,959,162
Premises and equipment	215,652			125,036
Goodwill	880,251			204,084
Other intangibles	40,805			3,786
Accrued interest and other assets	479,706			352,173
Total assets	$	13,986,660		$	8,896,923
Liabilities
Deposits
Interest-bearing demand	$	2,307,071		$	1,453,463
Savings	3,167,325			2,462,420
Time	2,173,564			1,317,105
Total interest-bearing deposits	7,647,960			5,232,988
Noninterest-bearing	2,492,434			1,662,058
Total deposits	10,140,394			6,895,046
Federal funds purchased	183,591			72,265
FHLB short-term borrowings	857,100			742,300
Total short-term borrowings	1,040,691			814,565
Long-term debt	570,739			119,654
Total borrowed funds	1,611,430			934,219
Accrued interest and other liabilities	156,587			136,994
Total liabilities	11,908,411			7,966,259
Shareholders' equity
Common stock - no par value
Authorized - 160,000,000 shares; Issued - 104,281,794 shares in 2018 and 68,730,731 shares in 2017	1,633,256			573,109
Retained earnings	600,014			491,847
Accumulated other comprehensive income (loss)	(44,408		)	(20,390		)
Treasury stock, at cost, 6,387,508 shares in 2018 and 6,661,644 shares in 2017	(110,613		)	(113,902		)
Total shareholders' equity	2,078,249			930,664
Total liabilities and shareholders' equity	$	13,986,660		$	8,896,923

See Notes to Consolidated Financial Statements.

42 First Financial Bancorp 2018 Annual Report

Consolidated Statements of Income

	Years ended December 31,
(Dollars in thousands except per share data)	2018			2017			2016
Interest income
Loans and leases, including fees	$	447,187		$	280,111		$	262,703
Investment securities
Taxable	79,076			50,568			43,103
Tax-exempt	13,428			5,918			4,535
Total interest on investment securities	92,504			56,486			47,638
Other earning assets	691			(3,524		)	(4,391		)
Total interest income	540,382			333,073			305,950
Interest expense
Deposits	56,962			35,182			22,613
Short-term borrowings	18,033			8,193			4,506
Long-term borrowings	16,152			6,153			6,160
Total interest expense	91,147			49,528			33,279
Net interest income	449,235			283,545			272,671
Provision for loan and lease losses	14,586			3,582			10,140
Net interest income after provision for loan and lease losses	434,649			279,963			262,531
Noninterest income
Service charges on deposit accounts	35,108			19,775			18,933
Trust and wealth management fees	15,082			14,073			13,200
Bankcard income	20,245			13,298			12,132
Client derivative fees	7,682			6,418			4,570
Net gain from sales of loans	6,071			5,169			6,804
Net gain (loss) on sales of investment securities	(161		)	1,649			234
Other	19,355			15,760			13,728
Total noninterest income	103,382			76,142			69,601
Noninterest expenses
Salaries and employee benefits	188,990			137,240			128,549
Net occupancy	24,215			17,397			18,329
Furniture and equipment	14,908			8,443			8,663
Data processing	28,077			14,022			11,406
Marketing	7,598			3,201			3,965
Communication	3,167			1,819			1,889
Professional services	12,272			15,023			6,303
State intangible tax	4,152			2,655			2,034
FDIC assessments	3,969			3,944			4,293
Loss (gain) - other real estate owned	373			642			(1,212		)
Other	36,089			35,556			17,182
Total noninterest expenses	323,810			239,942			201,401
Income before income taxes	214,221			116,163			130,731
Income tax expense	41,626			19,376			42,205
Net income	$	172,595		$	96,787		$	88,526
Earnings per common share
Basic	$	1.95		$	1.57		$	1.45
Diluted	$	1.93		$	1.56		$	1.43
Average common shares outstanding - basic	88,582,090			61,529,460			61,206,093
Average common shares outstanding - diluted	89,614,205			62,171,590			61,985,422

See Notes to Consolidated Financial Statements.

First Financial Bancorp 2018 Annual Report 43

Consolidated Statements of Comprehensive Income

	Years ended December 31,
(Dollars in thousands)	2018			2017		2016
Net income	$	172,595		$	96,787	$	88,526
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on debt securities arising during the period	(11,229		)	4,367		384
Change in retirement obligation	(8,180		)	3,172		1,245
Unrealized gain (loss) on derivatives	484			514		508
Other comprehensive income (loss)	(18,925		)	8,053		2,137
Comprehensive income	$	153,670		$	104,840	$	90,663

See Notes to Consolidated Financial Statements.

First Financial Bancorp 2018 Annual Report 44

Consolidated Statements of Changes in Shareholders' Equity

								Accumulated
	Common	Common						other
	stock	stock			Retained			comprehensive			Treasury stock
(Dollars in thousands, except share amounts)	shares	amount			earnings			income (loss)			Shares		Amount			Total
Balance at January 1, 2016	68,730,731	$	571,155		$	388,240		$	(30,580	)	(7,089,051	)	$	(119,439	)	$	809,376
Net income					88,526											88,526
Other comprehensive income (loss)								2,137								2,137
Cash dividends declared:
Common stock at $0.64 per share					(39,578		)									(39,578		)
Warrant exercises		(1,507		)							89,383		1,507			0
Excess tax benefit on share-based compensation		264														264
Exercise of stock options, net of shares purchased		(379		)							65,515		1,105			726
Restricted stock awards, net of forfeitures		(4,505		)							182,974		2,924			(1,581		)
Share-based compensation expense		5,354														5,354
Balance at December 31, 2016	68,730,731	570,382			437,188			(28,443		)	(6,751,179	)	(113,903		)	865,224
Net income					96,787											96,787
Other comprehensive income (loss)								8,053								8,053
Cash dividends declared:
Common stock at $0.68 per share					(42,128		)									(42,128		)
Warrant exercises		(99		)							5,843		99			0
Exercise of stock options, net of shares purchased		(912		)							58,212		987			75
Restricted stock awards, net of forfeitures		(1,708		)							25,480		(1,085		)	(2,793		)
Share-based compensation expense		5,446														5,446
Balance at December 31, 2017, as previously reported	68,730,731	573,109			491,847			(20,390		)	(6,661,644	)	(113,902		)	930,664
Impact of cumulative effect of adoption of new accounting standard					5,093			(5,093		)						0
Net income					172,595											172,595
Other comprehensive income (loss)								(18,925		)						(18,925		)
Cash dividends declared:
Common stock at $0.78 per share					(69,521		)									(69,521		)
Common stock issued in connection with business combinations	35,551,063	1,043,424														1,043,424
Stock options and warrants acquired and converted in connection with business combinations		16,037														16,037
Warrant exercises		(1,120		)							65,354		1,120			0
Exercise of stock options, net of shares purchased		(282		)							32,941		566			284
Restricted stock awards, net of forfeitures		(4,131		)							175,841		1,603			(2,528		)
Share-based compensation expense		6,219														6,219
Balance at December 31, 2018	104,281,794	$	1,633,256		$	600,014		$	(44,408	)	(6,387,508	)	$	(110,613	)	$	2,078,249

See Notes to Consolidated Financial Statements.

First Financial Bancorp 2018 Annual Report 45

Consolidated Statements of Cash Flows

	Year ended December 31,
(Dollars in thousands)	2018			2017			2016
Operating activities
Net income	$	172,595		$	96,787		$	88,526
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan and lease losses	14,586			3,582			10,140
Depreciation and amortization	24,171			12,645			13,037
Stock-based compensation expense	6,219			5,446			5,354
Pension expense (income)	859			(628		)	(1,153		)
Net amortization (accretion) on investment securities	10,846			10,798			8,476
Net (gains) losses on sales of investments securities	161			(1,649		)	(234		)
Originations of loans held for sale	(157,771		)	(157,796		)	(232,526		)
Net (gains) losses on sales of loans held for sale	(6,071		)	(5,169		)	(6,804		)
Proceeds from sales of loans held for sale	167,374			163,300			246,829
Deferred income taxes	6,267			(4,488		)	346
Decrease (increase) cash surrender value of life insurance	(5,454		)	(3,792		)	(186		)
Decrease (increase) in interest receivable	(3,808		)	(5,707		)	(1,456		)
Decrease in indemnification asset	1,900			10,117			5,613
(Decrease) increase in interest payable	5,207			55			46
Decrease (increase) in other assets	34,360			(21,455		)	(1,108		)
(Decrease) increase in other liabilities	(10,043		)	21,478			7,700
Net cash provided by (used in) operating activities	261,398			123,524			142,600
Investing activities
Proceeds from sales of investment securities available-for-sale	290,745			189,962			206,990
Proceeds from calls, paydowns and maturities of securities available-for-sale	387,351			224,690			186,132
Purchases of securities available-for-sale	(852,131		)	(723,131		)	(396,984		)
Proceeds from sales of securities held-to-maturity	0			0			4,862
Proceeds from calls, paydowns and maturities of securities held-to-maturity	36,671			121,903			127,021
Purchases of securities held-to-maturity	(14,014		)	(23,402		)	(11,196		)
Purchases of other investment securities	(31,385		)	(2,353		)	(4,239		)
Net decrease (increase) in interest-bearing deposits with other banks	(3,764		)	48,476			(48,716		)
Net decrease (increase) in loans and leases	(28,577		)	(266,043		)	(376,848		)
Proceeds from disposal of other real estate owned	3,797			6,983			9,356
Purchases of premises and equipment	(18,228		)	(6,537		)	(9,726		)
Net cash acquired from business combinations	64,895			0			0
Net cash paid for branch divestitures	(41,197		)	0			0
Net cash provided by (used in) investing activities	(205,837		)	(429,452		)	(313,348		)
Financing activities
Net (decrease) increase in total deposits	(18,690		)	369,258			346,164
Net (decrease) increase in short-term borrowings	30,531			6,653			(130,513		)
Payments on long-term borrowings	(52,460		)	(94		)	(86		)
Proceeds from FHLB borrowings	150,000			0			0
Cash dividends paid on common stock	(79,655		)	(41,178		)	(39,125		)
Proceeds from exercise of stock options	284			341			801
Excess tax benefit on share-based compensation	0			0			264
Net cash provided by (used in) financing activities	30,010			334,980			177,505
Cash and due from banks
Net (decrease) increase in Cash and due from banks	85,571			29,052			6,757
Cash and due from banks at beginning of year	150,650			121,598			114,841
Cash and due from banks at end of year	$	236,221		$	150,650		$	121,598

46 First Financial Bancorp 2018 Annual Report

Supplemental disclosures
Interest paid	$	84,125	$	49,474	$	33,233
Income taxes paid	$	16,004	$	38,329	$	37,566
Acquisition of other real estate owned through foreclosure	$	1,821	$	4,119	$	2,872
Issuance of restricted stock awards	$	8,797	$	6,416	$	5,759
Securities transferred from AFS to HTM	$	372,128	$	0	$	0
Common stock issued in bank acquisitions	$	1,043,424	$	0	$	0
Supplemental schedule for investing activities
Business combinations
Assets acquired, net of purchase consideration	$	3,342,781	$	0	$	0
Liabilities assumed	$	4,018,948	$	0	$	0
Goodwill	$	676,167	$	0	$	0

See Notes to Consolidated Financial Statements.

First Financial Bancorp 2018 Annual Report 47

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Basis of presentation. The Consolidated Financial Statements of First Financial Bancorp., a financial holding company, principally serving Ohio, Indiana, Kentucky and Illinois, 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 years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

Use of estimates. The preparation of Consolidated 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. Actual realized amounts could differ materially from those estimates.

Cash and due from banks.Cash and due from banks consist of currency, coin and cash items due from banks. Cash items due from banks include noninterest bearing deposits held at other banks.

Investment securities. First Financial classifies debt securities into three categories: HTM, trading and AFS. Management classifies investment securities into the appropriate category at the time of purchase and re-evaluates that classification as deemed appropriate.

Investment securities are classified as HTM when First Financial has the positive intent and ability to hold the securities to maturity. HTM securities are recorded at amortized cost.

Investment securities classified as trading are held principally for resale in the near-term and are recorded at fair value. Fair value is determined using quoted market prices. Gains or losses on trading securities, both realized and unrealized, are reported in noninterest income.

Investment securities not classified as either HTM or trading are classified as AFS. AFS securities are recorded at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.

The amortized cost of investment securities classified as either HTM or AFS is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated life of the security. Such amortization and accretion are considered an adjustment to the yield on the security and included in interest income from investments. Interest and dividends are included in interest income from investment securities in the Consolidated Statements of Income.

Realized gains and losses are based on the amortized cost of the security sold using the specific identification method. AFS and HTM securities are reviewed quarterly for potential impairment. In performing this review, management considers the length of time and extent to which the fair value of the security has been less than amortized cost, the financial condition and near-term prospects of the issuer and the ability and intent of First Financial to hold the security for a period sufficient to allow for any anticipated recovery in fair value. If the fair value of a security is less than the amortized cost and the impairment is determined to be other-than-temporary, the security is written down, establishing a new and reduced cost basis. The related charge is recorded in the Consolidated Statements of Income.

Other investments. Other investments include holdings in FRB stock and FHLB stock, which are both carried at cost, as well as equity securities which are carried at fair value. Changes in the fair value of equity securities are recorded Other noninterest income in the Consolidated Statements of Income.

Loans held for sale. Loans held for sale consist of residential real estate loans newly originated for the purpose of sale to third parties, and in certain circumstances, loans previously originated that have been specifically identified by management for sale based on predetermined criteria. Loans originated to held for sale status are carried at fair value. Any subsequent change in the carrying value of transferred loans, not to exceed original cost, is recorded in the Consolidated Statements of Income. First Financial sells loans with servicing retained or released depending on pricing and market conditions.  

48 First Financial Bancorp 2018 Annual Report

Loans and leases. Loans and leases for which First Financial has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. Loans and leases are carried at the principal amount outstanding, net of unamortized deferred loan origination fees and costs, and net of unearned income. Loan origination and commitment fees received, as well as certain direct loan origination costs paid, are deferred, and the net amount is amortized as an adjustment to the related loan's yield.

Interest income on loans and leases is recorded on an accrual basis. 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 classified as nonaccrual are applied as a reduction to the carrying value of the loan. A loan may return to accrual status if collection of future principal and interest payments is no longer doubtful.

Acquired loans. Acquired loans are recorded at their estimated fair value at the time of acquisition. Estimated fair values for acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, interest rate, term of loan, whether or not the loan was amortizing and a discount rate reflecting the Company's assessment of risk inherent in the cash flow estimates. Acquired loans are grouped together according to similar characteristics and treated in the aggregate when applying various valuation techniques.

First Financial evaluates acquired loans for impairment in accordance with the provisions of FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Acquired loans with evidence of credit deterioration since origination are accounted for under FASB ASC Topic 310-30 and are referred to as purchased impaired loans. Accretion of the difference between the carrying value of the loans and the expected cash flows (accretable difference) is recognized on purchased impaired loans through interest income.

Acquired loans outside of the scope of FASB ASC Topic 310-30 are accounted for under FASB ASC Topic 310-20, Receivables-Nonrefundable Fees and Costs. Discounts created when the loans were recorded at their estimated fair values at acquisition are amortized over the remaining term of the loan as an adjustment to the related loan's yield. The accrual of interest income is discontinued when the collection of a loan or interest, in whole or in part, is doubtful.

Allowance for loan and lease losses. For each reporting period, 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.

Management's determination of the adequacy of the ALLL is based on an assessment of the probable incurred loan and lease losses inherent in the portfolio given the conditions at the time. 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 through payments from the borrower or the liquidation of collateral.

Commercial loan and lease relationships greater than $250,000 that are considered impaired, or designated as a TDR, are evaluated to determine the need for a specific allowance based on the borrower's overall financial condition, resources, payment record, guarantor support and the realizable value of any collateral.

The allowance for non-impaired commercial loans and leases, as well as impaired commercial loan and lease relationships less than $250,000, includes a process of estimating the probable losses incurred in the portfolio by loan type, based on First Financial's internal system of credit risk ratings and historical loss data. These estimates may also be adjusted based upon trends in the values of the underlying collateral, delinquent and nonaccrual loans, prevailing economic conditions and changes in lending strategies, among other influencing factors.

Consumer loans are generally evaluated by loan type, as these loans exhibit homogeneous characteristics. The allowance for consumer loans, which includes residential real estate, installment, home equity, credit card loans and overdrafts, is established by estimating probable losses incurred in each particular category of consumer loans. The estimate of losses is primarily based on historical loss rates for each category and may be adjusted for trends in delinquent and nonaccrual loans, prevailing economic conditions and other significant influencing factors. Consumer loans greater than $250,000 classified as TDRs are individually evaluated to determine an appropriate allowance.

First Financial Bancorp 2018 Annual Report 49

Notes to Consolidated Financial Statements

For purchased impaired loans, expected cash flows are re-estimated periodically with declines in gross expected cash flows recorded as provision expense during the period.

Reserve for unfunded commitments. First Financial maintains a reserve that it considers sufficient to absorb probable losses incurred in standby letters of credit and outstanding loan commitments. First Financial determines the adequacy of the reserve based upon an evaluation of the unfunded credit facilities, which includes consideration of historical commitment utilization experience, credit risk ratings and historical loss rates, consistent with the Company's ALLL methodology. The reserve for unfunded commitments is included in Accrued interest and other liabilities on the Consolidated Balance Sheets and adjustments are recorded in Other noninterest expense in the Consolidated Statements of Income.

Premises and equipment. Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are principally computed on the straight-line method over the estimated useful lives of the assets. Useful lives generally range from 10 to 40 years for building and building improvements; 3 to 10 years for furniture, fixtures and equipment; and 3 to 5 years for software, hardware and data handling equipment. Land improvements are depreciated over 20 years and leasehold improvements are depreciated over the lesser of the term of the respective lease or the useful life of the asset. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Maintenance and repairs are expensed as incurred.

Bank-owned life insurance. First Financial purchases life insurance policies on the lives of certain employees and is the owner and beneficiary of the policies. The Bank invests in these policies to provide an efficient form of funding for long-term retirement and other employee benefits costs. The policies are included within Accrued interest and other assets in the Consolidated Balance Sheets at each policy’s respective cash surrender value with changes recorded in Other noninterest income in the Consolidated Statements of Income.

Goodwill. Under accounting for business combinations, the net assets of entities acquired by First Financial are recorded at their estimated fair value at the date of acquisition. The excess cost of the acquisition over the fair value of net assets acquired is recorded as goodwill. Goodwill and intangible assets deemed to have indefinite lives, if any, are not amortized, but are subject to annual impairment tests. The Company is required to evaluate goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. First Financial performs its annual impairment test effective October 1, absent events or changes in circumstances that indicate the carrying value of goodwill may not be recoverable.

The Company’s goodwill is accounted for in a single reporting unit representing the consolidated entity. Fair value is estimated using the market capitalization of the Company as of the annual impairment testing date. First Financial also utilizes additional information and analyses to corroborate the use of the Company’s market capitalization as a proper indicator of fair value for purposes of the annual goodwill impairment test.

Core deposit intangibles. CDI represent the estimated value of acquired customer deposit relationships. CDI are recorded at fair value at the date of acquisition and are based on a discounted cash flow methodology that gives appropriate consideration to expected customer attrition rates, cost of the deposit base, reserve requirements and the net maintenance cost attributable to customer deposits. Core deposit intangibles are recorded in Other intangibles on the Consolidated Balance Sheets and are amortized on an accelerated basis over their estimated useful lives.

Other real estate owned. 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. OREO properties are recorded at fair value, less estimated disposal costs (net realizable value). Losses arising at the time of acquisition of such properties are charged against the ALLL. Management performs periodic valuations to assess the adequacy of recorded OREO balances and subsequent changes in the carrying value of OREO properties are recorded in the Consolidated Statements of Income. Improvements to OREO properties may be capitalized if the improvements contribute to the overall value of the property, but may not be capitalized in excess of the net realizable value of the property. When management disposes of an OREO property, any gains or losses realized at the time of disposal are reflected in the Consolidated Statements of Income.

Affordable housing projects. First Financial has investments in certain qualified affordable housing projects. These projects are indirect federal subsidies 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 properties to qualified tenants, resulting in unavailability or recapture of the tax credits and other tax benefits. Investments in

50 First Financial Bancorp 2018 Annual Report

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.

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. The Company’s recorded investment in these entities is carried in Accrued interest and other assets on the Consolidated Balance Sheets.

Income taxes. First Financial and its subsidiaries file a consolidated federal income tax return. Each subsidiary provides for income taxes on a separate return basis, and remits to First Financial amounts determined to be currently payable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Interest and penalties on income tax assessments or income tax refunds are recognized as a component of noninterest expense in the Consolidated Statements of Income.

Pension. First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees. The measurement of the accrued benefit liability and the annual pension expense involves actuarial and economic assumptions, which include the discount rate, the expected return on plan assets and the rate of compensation increase.

Derivative instruments. First Financial accounts for its derivative financial instruments in accordance with FASB ASC Topic 815, Derivatives and Hedging. FASB ASC Topic 815 requires all derivative instruments to be carried at fair value on the balance sheet.

The accounting for changes in the fair value of derivatives is based on the intended use of the derivative and the resulting designation.  Derivatives used to hedge the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.  Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

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. Upon entering into an interest rate swap with a borrower, the Bank simultaneously enters into an offsetting swap agreement with an institutional counterparty, with substantially matching terms. These matched interest rate swap agreements generally involve the receipt by First Financial of floating rate amounts from the counterparties in exchange for payments to these counterparties by First Financial of fixed rate amounts received from commercial borrowers over the life of the agreements.

First Financial's matched interest rate swaps qualify as derivatives, but are not designated as hedging instruments. The net interest receivable or payable on matched interest rate swaps is accrued and recognized as an adjustment to interest income.  The fair values of client derivatives are included within Accrued interest and other assets and Accrued interest and other liabilities in the Consolidated Balance Sheets.

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 fair value of these agreements is recorded in the Consolidated Balance Sheets in Accrued interest and other liabilities.

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 and Loans held for sale. The fair value of these agreements is recorded in the Consolidated Balance Sheets in Accrued interest and other assets.

Stock-based compensation. First Financial grants stock-based awards, including restricted stock awards and options to purchase the Company’s common stock. Stock option grants are for a fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. Stock-based compensation expense is recognized in the Consolidated Statements of Income on a straight-line basis over the vesting period. As compensation expense is

First Financial Bancorp 2018 Annual Report 51

Notes to Consolidated Financial Statements

recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from exercise. At the time stock-based awards are exercised, canceled or expire, First Financial may be required to recognize an adjustment to tax expense.

Earnings per share. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding, unvested shares and dilutive common stock equivalents outstanding during the period. Common stock equivalents, which consist of common stock issuable under the assumed exercise of stock options granted under First Financial's stock-based compensation plans and the assumed conversion of common stock warrants, are calculated using the treasury stock method.

Segments and related information. While the Company monitors the operating results of its six lines of business, operations are managed and financial performance is evaluated on a consolidated basis. Accordingly, and consistent with prior years, all of the Company's operations are considered by management to be aggregated in one reportable operating segment.

2. 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 16 – 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.

At adoption, First Financial reclassified $0.2 million of net unrealized gain on AFS equity securities from AOCI to Retained Earnings. Additionally, in accordance with the guidance, the Company measured the fair value of its financial instruments as of December 31, 2018 using an exit price notion. For further detail, see Note 21 – 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. First Financial plans to record a cumulative effect adjustment effective at the beginning of 2019 which will include approximately $62.5 million of lease assets and $68.1 million of related lease liabilities, but the adoption is not expected to have a material impact to net income.

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.

52 First Financial Bancorp 2018 Annual Report

In addition to the new framework for calculating the ALLL, this update requires allowances for AFS 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.

First Financial currently expects to recognize a one-time cumulative effect adjustment to the ALLL as of January 1, 2020. However, in April 2018, the federal banking regulators proposed transitional arrangements to permit banking organizations to phase in the day-one impact of the adoption of this standard on regulatory capital over a three year period. First Financial has formed an internal management committee and engaged a third party vendor to assist with the transition to the guidance set forth in this update. The committee is currently evaluating the impact of this update on First Financial’s Consolidated Financial Statements, but the ALLL is expected to increase upon adoption since the allowance will be required to cover the full expected life of the portfolio.  The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the loan and lease portfolio at the time of adoption.

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 updated its footnote presentation accordingly. This updated did not have a material impact on the Consolidated Financial Statements. For further detail, see Note 15 - Employee Benefit Plans in the Notes to 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

First Financial Bancorp 2018 Annual Report 53

Notes to Consolidated Financial Statements

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 and may reclassify securities from HTM to AFS as a result.

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 is 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 this update.

3. Restrictions on Cash and Dividends

First Financial is required by the FRB to hold cash in reserve against deposit liabilities when total reservable deposit liabilities exceed the regulatory exemption known as the reserve requirement. The reserve requirement is calculated based on a two-week average of daily net transaction account deposits as defined by the FRB and may be satisfied with average vault cash during the following two-week maintenance period. When vault cash is not sufficient to meet the reserve requirement, the remaining amount must be satisfied with average funds held at the FRB. First Financial's deposit at the FRB is recorded in Interest-bearing deposits with other banks on the Consolidated Balance Sheets. The average required reserve balances, based upon the average level of First Financial's transaction deposits were $85.9 million and $66.7 million for 2018 and 2017, respectively.

Dividends paid by First Financial to its shareholders are principally funded through dividends paid to the Company by its subsidiaries, however, certain restrictions exist regarding the ability of the Bank to transfer funds to First Financial in the form of cash dividends, loans or advances. The approval of the Federal Reserve Board and the ODFI is required for the Bank to pay dividends in excess of the regulatory limit, which is equal to the net income of the current year through the dividend date combined with the Bank's retained net income from the two preceding years. As of December 31, 2018, First Financial's subsidiaries had retained earnings of $637.2 million, of which $181.3 million was available for distribution to First Financial without prior regulatory approval.

54 First Financial Bancorp 2018 Annual Report

4. Investment Securities

The following is a summary of HTM and AFS investment securities as of December 31, 2018:

	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	$	99	$	0	$	(2	)	$	97
Securities of U.S. government agencies and corporations	0		0		0			0		32,095		57		(233		)	31,919
Mortgage-backed securities - residential	25,565		0		(1,045		)	24,520		565,071		691		(7,163		)	558,599
Mortgage-backed securities - commercial	147,780		258		(4,385		)	143,653		423,797		819		(3,581		)	421,035
Collateralized mortgage obligations	12,540		0		(633		)	11,907		928,586		4,319		(6,158		)	926,747
Obligations of state and other political subdivisions	243,443		1,954		(1,359		)	244,038		257,300		2,554		(1,429		)	258,425
Asset-backed securities	0		0		0			0		511,430		611		(2,810		)	509,231
Other securities	0		0		0			0		73,948		358		(1,104		)	73,202
Total	$	429,328	$	2,212	$	(7,422	)	$	424,118	$	2,792,326	$	9,409	$	(22,480	)	$	2,779,255

The following is a summary of HTM and AFS investment securities as of December 31, 2017:

	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	$	98	$	0	$	(1	)	$	97
Securities of U.S. government agencies and corporations	11,168		0		(76		)	11,092		15,695		220		0			15,915
Mortgage-backed securities - residential	162,093		2,042		(1,535		)	162,600		290,793		849		(2,599		)	289,043
Mortgage-backed securities - commercial	255,027		1,372		(3,000		)	253,399		150,356		164		(1,417		)	149,103
Collateralized mortgage obligations	143,545		354		(1,602		)	142,297		306,095		1,158		(1,861		)	305,392
Obligations of state and other political subdivisions	82,175		1,804		(266		)	83,713		124,269		2,162		(676		)	125,755
Asset-backed securities	0		0		0			0		377,655		1,628		(306		)	378,977
Other securities	0		0		0			0		83,266		2,147		(287		)	85,126
Total	$	654,008	$	5,572	$	(6,479	)	$	653,101	$	1,348,227	$	8,328	$	(7,147	)	$	1,349,408

During the year ended December 31, 2018, proceeds on the sale of $290.7 million of AFS securities resulted in gains of $0.5 million and losses of $0.6 million, with insignificant tax expense. During the year ended December 31, 2017, proceeds on the sale of $190.0 million of AFS securities resulted in gains of $1.8 million and losses of $0.2 million and tax expense of $0.6 million. During the year ended December 31, 2016, proceeds on the sale of $207.0 million of AFS securities resulted in gains of $1.2 million and losses of $1.0 million and tax expense of $0.1 million. In addition to the sale of certain securities, First Financial reclassified$372.1 millionof HTM securities toAFSto align with post-merger investment strategies during the second quarter 2018.

The carrying value of investment securities pledged as collateral to secure public deposits, repurchase agreements and for other purposes as required by law totaled $1.2 billion at December 31, 2018 and $0.8 billion at December 31, 2017.

First Financial Bancorp 2018 Annual Report 55

Notes to Consolidated Financial Statements

The following table provides a summary of investment securities by contractual maturity as of December 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:

	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	0	$	0	$	5,972	$	5,977
Due after one year through five years	275		279		63,995		64,040
Due after five years through ten years	21,110		21,374		133,360		133,594
Due after ten years	222,058		222,385		160,115		160,032
Mortgage-backed securities - residential	25,565		24,520		565,071		558,599
Mortgage-backed securities - commercial	147,780		143,653		423,797		421,035
Collateralized mortgage obligations	12,540		11,907		928,586		926,747
Asset-backed securities	0		0		511,430		509,231
Total	$	429,328	$	424,118	$	2,792,326	$	2,779,255

Unrealized gains and losses on debt securities are generally due to fluctuations in current market yields relative to the yields of the 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, in addition to 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 December 31, 2018 or 2017.

As of December 31, 2018, the Company's investment securities portfolio consisted of 1,417 securities, of which 504 securities 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:

	December 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	$	0	$	0		$	97	$	(2	)	$	97	$	(2	)
Securities of U.S. government agencies and corporations	0		0			16,777		(233		)	16,777		(233		)
Mortgage-backed securities - residential	186,029		(935		)	264,795		(7,273		)	450,824		(8,208		)
Mortgage-backed securities - commercial	147,754		(369		)	232,363		(7,597		)	380,117		(7,966		)
Collateralized mortgage obligations	194,795		(1,546		)	240,514		(5,245		)	435,309		(6,791		)
Obligations of state and other political subdivisions	62,805		(299		)	86,644		(2,489		)	149,449		(2,788		)
Asset-backed securities	336,437		(2,312		)	37,105		(498		)	373,542		(2,810		)
Other securities	33,752		(884		)	4,570		(220		)	38,322		(1,104		)
Total	$	961,572	$	(6,345	)	$	882,865	$	(23,557	)	$	1,844,437	$	(29,902	)

56 First Financial Bancorp 2018 Annual Report

	December 31, 2017
	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	$	97	$	(1	)	$	0	$	0		$	97	$	(1	)
Securities of U.S. Government agencies and corporations	11,092		(76		)	0		0			11,092		(76		)
Mortgage-backed securities - residential	175,183		(1,109		)	108,782		(3,025		)	283,965		(4,134		)
Mortgage-backed securities - commercial	132,818		(1,713		)	72,139		(2,704		)	204,957		(4,417		)
Collateralized mortgage obligations	164,909		(1,138		)	101,436		(2,325		)	266,345		(3,463		)
Obligations of state and other political subdivisions	38,450		(507		)	21,639		(435		)	60,089		(942		)
Asset-backed securities	44,941		(200		)	24,396		(106		)	69,337		(306		)
Other securities	2,605		(1		)	7,124		(286		)	9,729		(287		)
Total	$	570,095	$	(4,745	)	$	335,516	$	(8,881	)	$	905,611	$	(13,626	)

For further detail on the fair value of investment securities, see Note 21 – Fair Value Disclosures.

5. Loans and Leases

First Financial offers clients a variety of commercial and consumer loan and lease products with various interest rates and payment terms. Commercial loan categories include C&I, CRE, 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, Kentucky and Illinois). 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 primarily to insurance agents and brokers that are secured by commissions and cash collateral accounts.

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 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 of 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.

First Financial Bancorp 2018 Annual Report 57

Notes to Consolidated Financial Statements

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 as 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 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:

	As of December 31, 2018
			Real Estate
(Dollars in thousands)	Commercial & industrial		Construction		Commercial		Lease financing		Total
Pass	$	2,432,834	$	548,323	$	3,664,434	$	90,902	$	6,736,493
Special Mention	24,594		603		38,653		0		63,850
Substandard	57,233		9		51,594		2,513		111,349
Doubtful	0		0		0		0		0
Total	$	2,514,661	$	548,935	$	3,754,681	$	93,415	$	6,911,692

	Residential real estate		Home Equity		Installment		Credit card		Total
Performing	$	939,936	$	811,108	$	93,038	$	46,382	$	1,890,464
Nonperforming	15,710		6,174		174		0		22,058
Total	$	955,646	$	817,282	$	93,212	$	46,382	$	1,912,522

	As of December 31, 2017
			Real Estate
(Dollars in thousands)	Commercial & industrial		Construction		Commercial		Lease financing		Total
Pass	$	1,882,464	$	467,687	$	2,446,999	$	88,078	$	4,885,228
Special Mention	6,226		0		4,436		0		10,662
Substandard	24,053		43		38,656		1,269		64,021
Doubtful	0		0		0		0		0
Total	$	1,912,743	$	467,730	$	2,490,091	$	89,347	$	4,959,911

	Residential real estate		Home equity		Installment		Credit card		Total
Performing	$	463,459	$	489,148	$	41,331	$	46,691	$	1,040,629
Nonperforming	7,932		4,456		255		0		12,643
Total	$	471,391	$	493,604	$	41,586	$	46,691	$	1,053,272

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 due date of the scheduled payment.

58 First Financial Bancorp 2018 Annual Report

Loan delinquency, including nonaccrual loans, was as follows:

	As of December 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	$	13,369	$	41	$	7,423	$	20,833	$	2,488,450	$	2,509,283	$	5,378	$	2,514,661	$	0
Lease financing	352		0		0		352		93,063		93,415		0		93,415		0
Construction real estate	0		0		0		0		548,687		548,687		248		548,935		0
Commercial real estate	6,279		1,158		12,644		20,081		3,682,455		3,702,536		52,145		3,754,681		0
Residential real estate	11,060		2,976		4,535		18,571		902,404		920,975		34,671		955,646		0
Home equity	5,245		1,228		2,578		9,051		804,835		813,886		3,396		817,282		0
Installment	420		37		145		602		92,128		92,730		482		93,212		0
Credit card	541		96		63		700		45,682		46,382		0		46,382		63
Total	$	37,266	$	5,536	$	27,388	$	70,190	$	8,657,704	$	8,727,894	$	96,320	$	8,824,214	$	63

	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	$	755	$	1,657	$	5,078	$	7,490	$	1,901,821	$	1,909,311	$	3,432	$	1,912,743	$	0
Lease financing	485		0		0		485		88,862		89,347		0		89,347		0
Construction real estate	234		0		0		234		467,216		467,450		280		467,730		0
Commercial real estate	1,716		201		8,777		10,694		2,419,969		2,430,663		59,428		2,490,091		0
Residential real estate	526		811		1,992		3,329		430,500		433,829		37,562		471,391		0
Home equity	2,716		394		1,753		4,863		485,127		489,990		3,614		493,604		0
Installment	179		29		205		413		40,529		40,942		644		41,586		0
Credit card	285		87		62		434		46,257		46,691		0		46,691		62
Total	$	6,896	$	3,179	$	17,867	$	27,942	$	5,880,281	$	5,908,223	$	104,960	$	6,013,183	$	62

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 none of the principal and interest is due and unpaid, and the Bank expects repayment of the remaining contractual principal and interest.

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.

First Financial Bancorp 2018 Annual Report 59

Notes to Consolidated Financial Statements

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 196 TDRs totaling $38.5 million at December 31, 2018, including $16.1 million of loans on accrual status and $22.4 million of loans classified as nonaccrual. First Financial had no commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs, and the ALLL included reserves of $1.5 million related to TDRs as of December 31, 2018. For the years ended December 31, 2018, 2017 and 2016, First Financial charged off $0.9 million, $0.3 million and $0.5 million, respectively, for the portion of TDRs determined to be uncollectible. Additionally, as of December 31, 2018, approximately $7.9 million of the 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 of loans 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. 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.

First Financial had 247 TDRs totaling $35.4 million at December 31, 2016, including $30.2 million of loans on accrual status and $5.1 million of loans classified as nonaccrual. First Financial had $0.9 million of commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs. At December 31, 2016, the ALLL included reserves of $1.9 million related to TDRs, and $22.6 million of the accruing TDRs had been performing in accordance with the restructured terms for more than one year.

The following table provides information on loan modifications classified as TDRs during the years ended December 31, 2018, 2017 and 2016:

	Years ended December 31,
	2018					2017					2016
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial & industrial	17	$	23,943	$	23,890	7	$	5,724	$	5,661	18	$	3,402	$	3,508
Construction real estate	0	0		0		0	0		0		0	0		0
Commercial real estate	8	3,385		3,150		8	1,816		1,758		16	5,200		4,752
Residential real estate	13	1,148		1,073		6	416		315		5	840		787
Home equity	5	95		192		1	39		39		5	165		156
Installment	0	0		0		0	0		0		3	9		9
Total	43	$	28,571	$	28,305	22	$	7,995	$	7,773	47	$	9,616	$	9,212

The following table provides information on how TDRs were modified during the years ended December 31, 2018, 2017 and 2016:

	Years Ended December 31,
(Dollars in thousands)	2018		2017		2016
Extended maturities	$	4,093	$	3,261	$	2,571
Adjusted interest rates	52		2,767		0
Combination of rate and maturity changes	0		489		3,046
Forbearance	23,175		1,181		88
Other (1)	985		75		3,507
Total	$	28,305	$	7,773	$	9,212

⁽¹⁾Other includes covenant modifications and other concessions or combination of concessions that do not consist of interest rate adjustments, forbearance and maturity extensions.

60 First Financial Bancorp 2018 Annual Report

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.

For the twelve months ended December 31, 2018, there was one TDR with an insignificant balance for which there was a payment default during the period that occurred within twelve months of the loan modification. For the twelve months ended December 31, 2017 and 2016, there was one TDR and four TDRs, respectively, with balances of $1.5 million and $0.3 million, respectively, for which there was a payment default during the period that occurred within twelve months of the loan modification.

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, as of December 31:

(Dollars in thousands)	2018		2017		2016
Impaired loans
Nonaccrual loans (1)
Commercial & industrial	$	30,925	$	5,229	$	2,419
Lease financing	22		82		195
Construction real estate	9		29		0
Commercial real estate	20,500		10,616		6,098
Residential real estate	13,495		4,140		5,251
Home equity	5,580		3,743		3,400
Installment	169		243		367
Total nonaccrual loans	70,700		24,082		17,730
Accruing troubled debt restructurings	16,109		17,545		30,240
Total impaired loans	$	86,809	$	41,627	$	47,970
Interest income effect
Gross amount of interest that would have been recorded under original terms	$	4,656	$	3,397	$	2,848
Interest included in income
Nonaccrual loans	715		535		375
Troubled debt restructurings	642		710		876
Total interest included in income	1,357		1,245		1,251
Net impact on interest income	$	3,299	$	2,152	$	1,597
Commitments outstanding to borrowers with nonaccrual loans	$	200	$	0	$	0

⁽¹⁾Nonaccrual loans include nonaccrual TDRs of $22.4 million, $6.4 million and $5.1 million as of December 31, 2018, 2017 and 2016, respectively.

First Financial individually reviews all impaired commercial loan relationships greater than $250,000, 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, resources, and 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 Bancorp 2018 Annual Report 61

Notes to Consolidated Financial Statements

First Financial's investment in impaired loans, excluding purchased impaired loans, is as follows:

	December 31, 2018						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	$	36,694	$	42,561	$	0	$	7,162	$	8,460	$	0
Lease financing	22		22		0		82		82		0
Construction real estate	9		26		0		29		60		0
Commercial real estate	23,513		31,375		0		18,423		20,837		0
Residential real estate	17,297		19,975		0		6,876		8,145		0
Home equity	6,351		7,461		0		4,356		5,399		0
Installment	174		563		0		255		422		0
Total	84,060		101,983		0		37,183		43,405		0
Loans with an allowance recorded
Commercial & industrial	939		939		667		169		169		169
Lease financing	0		0		0		0		0		0
Construction real estate	0		0		0		0		0		0
Commercial real estate	1,509		1,509		461		3,119		3,120		448
Residential real estate	301		301		32		1,056		1,063		160
Home equity	0		0		0		100		100		2
Installment	0		0		0		0		0		0
Total	2,749		2,749		1,160		4,444		4,452		779
Total
Commercial & industrial	37,633		43,500		667		7,331		8,629		169
Lease financing	22		22		0		82		82		0
Construction real estate	9		26		0		29		60		0
Commercial real estate	25,022		32,884		461		21,542		23,957		448
Residential real estate	17,598		20,276		32		7,932		9,208		160
Home equity	6,351		7,461		0		4,456		5,499		2
Installment	174		563		0		255		422		0
Total	$	86,809	$	104,732	$	1,160	$	41,627	$	47,857	$	779

62 First Financial Bancorp 2018 Annual Report

	Years ended December 31,
	2018				2017				2016
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized		Average balance		Interest income recognized
Loans with no related allowance recorded
Commercial & industrial	$	14,498	$	360	$	13,167	$	280	$	13,619	$	309
Lease financing	21		0		112		4		150		3
Construction real estate	20		2		601		1		0		0
Commercial real estate	24,738		490		20,935		563		14,252		357
Residential real estate	11,359		301		7,616		196		7,752		199
Home equity	5,541		114		4,032		99		4,830		86
Installment	274		2		332		4		366		7
Total	56,451		1,269		46,795		1,147		40,969		961
Loans with an allowance recorded
Commercial & industrial	900		44		1,204		28		1,098		37
Lease financing	0		0		0		0		214		8
Construction real estate	0		0		0		0		0		0
Commercial real estate	1,402		18		2,634		40		7,792		211
Residential real estate	895		23		1,112		26		1,374		30
Home equity	80		3		101		4		101		4
Installment	0		0		0		0		0		0
Total	3,277		88		5,051		98		10,579		290
Total
Commercial & industrial	15,398		404		14,371		308		14,717		346
Lease financing	21		0		112		4		364		11
Construction real estate	20		2		601		1		0		0
Commercial real estate	26,140		508		23,569		603		22,044		568
Residential real estate	12,254		324		8,728		222		9,126		229
Home equity	5,621		117		4,133		103		4,931		90
Installment	274		2		332		4		366		7
Total	$	59,728	$	1,357	$	51,846	$	1,245	$	51,548	$	1,251

First Financial Bancorp 2018 Annual Report 63

Notes to Consolidated Financial Statements

OREO. OREO is comprised of properties acquired by the Company primarily through the loan foreclosure or repossession process, or other resolution activities that result in partial or total satisfaction of problem loans.

Changes in OREO were as follows:

	Years ended December 31,
(Dollars in thousands)	2018			2017			2016
Balance at beginning of year	$	2,781		$	6,284		$	13,254
Additions
Commercial	1,269			1,732			1,850
Residential	1,913			2,387			1,022
Total additions	3,182			4,119			2,872
Disposals
Commercial	(2,967		)	(5,409		)	(6,993		)
Residential	(830		)	(1,574		)	(2,363		)
Total disposals	(3,797		)	(6,983		)	(9,356		)
Valuation adjustments
Commercial	(355		)	(439		)	(345		)
Residential	(410		)	(200		)	(141		)
Total valuation adjustments	(765		)	(639		)	(486		)
Balance at end of year	$	1,401		$	2,781		$	6,284

6. Allowance for Loan and Lease Losses

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. For further discussion of First Financial's allowance methodology, see Note 1 – Summary of Significant Accounting Policies.

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 ALLL by loan category as of December 31 were as follows:

	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 year	$	17,598		$	675	$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021
Provision for loan and lease losses	10,615			454		(310		)	847			492			829			(85		)	1,744			14,586
Gross charge-offs	(11,533		)	0		0			(4,835		)	(422		)	(1,725		)	(435		)	(1,720		)	(20,670		)
Recoveries	2,066			1		146			4,106			211			1,309			575			191			8,605
Total net charge-offs	(9,467		)	1		146			(729		)	(211		)	(416		)	140			(1,529		)	(12,065		)
Ending allowance for loan and lease losses	$	18,746		$	1,130	$	3,413		$	21,048		$	4,964		$	5,348		$	362		$	1,531		$	56,542

64 First Financial Bancorp 2018 Annual Report

	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 year	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961
Provision for loan and lease losses	6,917			(42		)	207			(7,291		)	1,695			1,778			(90		)	408			3,582
Gross charge-offs	(10,194		)	0			(1		)	(1,038		)	(435		)	(913		)	(225		)	(857		)	(13,663		)
Recoveries	1,650			1			89			2,719			215			1,027			234			206			6,141
Total net charge-offs	(8,544		)	1			88			1,681			(220		)	114			9			(651		)	(7,522		)
Ending allowance for loan and lease losses	$	17,598		$	675		$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021

	2016
							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 year	$	16,995		$	821		$	1,810		$	23,656		$	4,014		$	3,943		$	386		$	1,773		$	53,398
Provision for loan and lease losses	3,705			(106		)	1,280			5,365			(655		)	(175		)	53			673			10,140
Gross charge-offs	(2,630		)	0			(93		)	(4,983		)	(387		)	(1,445		)	(386		)	(1,190		)	(11,114		)
Recoveries	1,155			1			285			2,502			236			720			335			303			5,537
Total net charge-offs	(1,475		)	1			192			(2,481		)	(151		)	(725		)	(51		)	(887		)	(5,577		)
Ending allowance for loan and lease losses	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961

The ALLL balance and the recorded investment in loans by portfolio segment and based on impairment method as of December 31 were as follows:

	December 31, 2018
					Real Estate
(Dollars in thousands)	Commercial & industrial		Lease financing		Construction		Commercial		Residential		Home equity		Installment		Credit card		Total
Ending allowance on loans individually evaluated for impairment	$	667	$	0	$	0	$	461	$	32	$	0	$	0	$	0	$	1,160
Ending allowance on loans collectively evaluated for impairment	18,079		1,130		3,413		20,587		4,932		5,348		362		1,531		55,382
Ending allowance for loan and lease losses	$	18,746	$	1,130	$	3,413	$	21,048	$	4,964	$	5,348	$	362	$	1,531	$	56,542
Loans and Leases
Ending balance of loans individually evaluated for impairment	$	37,633	$	22	$	9	$	25,022	$	17,598	$	6,351	$	174	$	0	$	86,809
Ending balance of loans collectively evaluated for impairment	2,477,028		93,393		548,926		3,729,659		938,048		810,931		93,038		46,382		8,737,405
Total loans	$	2,514,661	$	93,415	$	548,935	$	3,754,681	$	955,646	$	817,282	$	93,212	$	46,382	$	8,824,214

First Financial Bancorp 2018 Annual Report 65

Notes to Consolidated Financial Statements

	December 31, 2017
					Real Estate
(Dollars in thousands)	Commercial & industrial		Lease financing		Construction		Commercial		Residential		Home equity		Installment		Credit card		Total
Ending allowance on loans individually evaluated for impairment	$	169	$	0	$	0	$	448	$	160	$	2	$	0	$	0	$	779
Ending allowance on loans collectively evaluated for impairment	17,429		675		3,577		20,482		4,523		4,933		307		1,316		53,242
Ending allowance for loan and lease losses	$	17,598	$	675	$	3,577	$	20,930	$	4,683	$	4,935	$	307	$	1,316	$	54,021
Loans and Leases
Ending balance of loans individually evaluated for impairment	$	7,331	$	82	$	29	$	21,542	$	7,932	$	4,456	$	255	$	0	$	41,627
Ending balance of loans collectively evaluated for impairment	1,905,412		89,265		467,701		2,468,549		463,459		489,148		41,331		46,691		5,971,556
Total loans	$	1,912,743	$	89,347	$	467,730	$	2,490,091	$	471,391	$	493,604	$	41,586	$	46,691	$	6,013,183

7. Premises and Equipment

Premises and equipment at December 31 were as follows:

(Dollars in thousands)	2018		2017
Land and land improvements	$	57,701	$	41,711
Buildings	161,817		104,576
Furniture and fixtures	66,567		55,165
Leasehold improvements	29,086		19,377
Construction in progress	5,731		1,721
	320,902		222,550
Less: Accumulated depreciation and amortization	105,250		97,514
Total	$	215,652	$	125,036

Rental expense recorded under operating leases in 2018, 2017 and 2016 was $9.1 million, $7.1 million and $7.9 million, respectively.

First Financial's future minimum lease payments for operating leases are as follows: 

(Dollars in thousands)
2019	$	9,568
2020	9,179
2021	8,284
2022	5,016
2023	4,269
Thereafter	15,496
Total	$	51,812

66 First Financial Bancorp 2018 Annual Report

8. 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.

Changes in the carrying amount of goodwill for the years ended December 31, 2018, 2017 and 2016 are shown below.

(Dollars in thousands)	2018		2017		2016
Balance at beginning of year	$	204,084	$	204,084	$	204,084
Goodwill resulting from business combinations	676,167		0		0
Balance at end of year	$	880,251	$	204,084	$	204,084

First Financial recorded additions to goodwill resulting from the merger with MSFG in 2018. During 2017 and 2016, no additions to goodwill were recorded.

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 annual impairment test of goodwill as of October 1, 2018 and no impairment was indicated.  As of December 31, 2018, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value.

Other intangible assets. As of December 31, 2018 and 2017, First Financial had $40.8 million and $3.8 million, respectively, of other intangible assets on the Consolidated Balance Sheets which primarily consist of CDI.  CDI represents the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized on an accelerated basis over their estimated useful lives. CDI was $37.9 million and $3.3 million as of December 31, 2018 and December 31, 2017, respectively, and First Financial recorded $41.7 million of additions to CDI in 2018, while no additions were recorded in 2017 or 2016. First Financial's CDI have an estimated weighted average remaining life of 8.9 years as of December 31, 2018.

Amortization expense recognized on intangible assets for 2018, 2017 and 2016 was $7.7 million, $1.3 million and $1.6 million, respectively. The estimated amortization expense of intangible assets for the next five years is as follows:

(Dollars in thousands)
2019	$	8,800
2020	7,010
2021	5,602
2022	3,417
2023	3,155

9. Deposits

Time deposits that meet or exceed the FDIC insurance limit of $250,000 at December 31, 2018 and 2017 were $284.9 million and $174.8 million, respectively.

First Financial Bancorp 2018 Annual Report 67

Scheduled maturities of time deposits for the next five years were as follows:

(Dollars in thousands)
2019	$	1,407,996
2020	471,183
2021	163,575
2022	110,170
2023	20,112
Thereafter	528
Total	$	2,173,564

10. 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 agreed to by 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.

The following shows the remaining contractual maturity of repurchase agreements by collateral pledged:

(Dollars in thousands)	Overnight and Continuous
Repurchase agreements
Mortgage-backed securities	$	22,369
Collateralized mortgage obligations	62,222
Total	$	84,591

Securities sold under agreements to repurchase are secured by securities with a carrying amount of $85.5 million and $72.8 million, as of December 31, 2018 and 2017, respectively.

First Financial has a $30.0 million short-term credit facility with an unaffiliated bank that matures in September, 2019. 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 December 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 December 31, 2018 and December 31, 2017.

First Financial Bancorp 2018 Annual Report 68

The following is a summary of short-term borrowings for the last three years:

	2018				2017				2016
(Dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
At December 31,
Federal funds purchased and securities sold under agreements to repurchase	$	183,591	1.65	%	$	72,265	0.19	%	$	120,212	0.12	%
FHLB borrowings	857,100		2.48	%	742,300		1.43	%	687,700		0.66	%
Total	$	1,040,691	2.33	%	$	814,565	1.32	%	$	807,912	0.58	%
Average for the year
Federal funds purchased and securities sold under agreements to repurchase	$	87,221	0.58	%	$	69,766	0.19	%	$	89,157	0.05	%
FHLB borrowings	857,028		2.03	%	760,558		1.05	%	791,259		0.55	%
Other short-term borrowings	3,178		4.36	%	41		4.07	%	41		3.56	%
Total	$	947,427	1.90	%	$	830,365	0.98	%	$	880,457	0.50	%
Maximum month-end balances
Federal funds purchased and securities sold under agreements to repurchase	$	183,591			$	130,633			$	122,242
FHLB borrowings	1,170,800				957,700				1,035,000
Other short-term borrowings	10,000				0				0

In 2015, First Financial issued $120.0 million of subordinated notes, which have a fixed interest rate of 5.13% payable semiannually and mature in August 2025. These notes are not redeemable by the Company or callable by the holders of the notes prior to maturity. In addition, First Financial acquired $49.5 million of variable rate subordinated notes in the MSFG merger that were issued to previously formed trusts in exchange for the trust proceeds. Interest on the acquired subordinated notes is payable quarterly, in arrears, and the Company has the option to defer interest payments for a period not to exceed 20 consecutive quarters. The acquired subordinated notes mature 30 years after the date of original issuance and may be called at par following the 5 year anniversary of issuance. First Financial also acquired $8.4 million of 7.40% fixed rate private placement subordinated debt in conjunction with the MSFG merger that was issued in 2015 and matures in 2025. These notes are redeemable by the Company at par following the 5 year anniversary of issuance. 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.

In addition to subordinated notes, long-term debt also includes FHLB long-term advances. These instruments are primarily utilized to reduce overnight liquidity risk and to mitigate interest rate sensitivity on the Consolidated Balance Sheets.

FHLB advances, both short-term and long-term, must be collateralized with qualifying assets, typically certain commercial and residential real estate loans, as well as certain government and agency securities. For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB, and at December 31, 2018, had collateral pledged with a book value of $5.7 billion.

The following is a summary of First Financial's long-term debt:

	2018					2017
(Dollars in thousands)	Amount			Average Rate		Amount			Average Rate
Subordinated debt	$	170,550		5.28	%	$	120,000		5.13	%
Unamortized debt issuance costs	(1,185		)	n/a		(1,362		)	n/a
FHLB	400,599			2.08	%	241			1.09	%
Capital loan with municipality	775			0.00	%	775			0.00	%
Total long-term debt	$	570,739		3.04	%	$	119,654		5.14	%

First Financial Bancorp 2018 Annual Report 69

Notes to Consolidated Financial Statements

As of December 31, 2018, First Financial's long-term debt matures as follows:

(Dollars in thousands)
2019	$	157,914
2020	104,274
2021	19,007
2022	49,404
2023	0
Thereafter	240,140
Total	$	570,739

11. Derivatives

First Financial uses certain derivative instruments, including 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. For discussion of First Financial's accounting for derivative instruments, see Note 1 – Summary of Significant Accounting Policies.

First Financial primarily utilizes interest rate swaps as a means to offer borrowers credit-based products that meet their needs and 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 as 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 this 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.

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 location and amounts recognized in the Consolidated Balance Sheets for client derivatives:

		December 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
Matched interest rate swaps with borrower	Accrued interest and other assets and other liabilities	$	1,359,990	$	17,402	$	(11,787	)	$	837,040	$	7,153	$	(5,529	)
Matched interest rate swaps with counterparty	Accrued interest and other liabilities	1,359,990		11,787		(17,401		)	837,040		5,529		(7,158		)
Total		$	2,719,980	$	29,189	$	(29,188	)	$	1,674,080	$	12,682	$	(12,687	)

At December 31, 2018, the Company had a total counterparty notional amount outstanding of $1.4 billion, spread among thirteen counterparties, with an outstanding liability from these contracts of $4.9 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 Company's normal credit review processes. Additionally, the Company's ALLL committee monitors derivative credit risk exposure related to problem loans. 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.

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. First Financial maintains the right to offset these derivative positions

70 First Financial Bancorp 2018 Annual Report

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:

	December 31, 2018							December 31, 2017
(Dollars in thousands)	Gross amounts of recognized liabilities		Gross amounts offset in the Consolidated Balance Sheets			Net amounts of liabilities presented in the Consolidated Balance Sheets		Gross amounts of recognized liabilities		Gross amounts offset in the Consolidated Balance Sheets		Net amounts of liabilities presented in the Consolidated Balance Sheets
Client derivatives
Matched interest rate swaps	$	29,189	$	(14,577	)	$	14,612	$	12,687	$	2,279	$	14,966

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 December 31, 2018:

							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	$	1,359,990	6.2	$	5,615		4.70	%	4.67	%
Pay fixed, matched interest rate swaps with counterparty	1,359,990		6.2	(5,614		)	4.67	%	4.70	%
Total client derivatives	$	2,719,980	6.2	$	1		4.68	%	4.68	%

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 $138.4 million as of December 31, 2018 and $95.9 million as of December 31, 2017. The fair value of these agreements were recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets was $0.1 million at both December 31, 2018 and December 31, 2017.

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 and loans held for sale. At December 31, 2018, the notional amount of the IRLCs was $20.8 million and the notional amount of forward commitments was $12.3 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 insignificant at December 31, 2018 and $0.1 million at December 31, 2017.

12. Commitments and Contingencies

First Financial offers a variety of financial instruments including 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 losses incurred in letters of credit and outstanding loan commitments and records the reserve within Accrued interest and other liabilities on the Consolidated Balance

First Financial Bancorp 2018 Annual Report 71

Notes to Consolidated Financial Statements

Sheets. First Financial had $0.7 million and $0.5 million of reserves for unfunded commitments recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets as of December 31, 2018 and 2017, respectively.

Loan commitments. Loan commitments are agreements to extend credit to a client absent any violation of any condition 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 $3.0 billion and $2.1 billion at December 31, 2018 and 2017, respectively. As of December 31, 2018, loan commitments with a fixed interest rate totaled $174.0 million while commitments with variable interest rates totaled $2.9 billion. The fixed rate loan commitments have interest rates ranging from 0.00% to 21.00% for both December 31, 2018 and 2017. The fixed rate loan commitments have maturities ranging from 1 to 30 years for December 31, 2018 and 1 and 29 years for December 31, 2017.

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 has issued letters of credit aggregating $32.7 million and $25.3 million at December 31, 2018, and 2017, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Investments in affordable housing projects. 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 $39.4 million and $35.9 million as of December 31, 2018 and 2017, respectively. The Company recognized tax credits of $4.9 million and $3.2 million related to its investments in affordable housing projects for the years ended December 31, 2018 and 2017, respectively. The Company recognized amortization expense which was included in income tax expense of $5.7 million and $4.2 million for the years ended December 31, 2018 and 2017, respectively. First Financial had no affordable housing contingent commitments as of December 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 included in Accrued interest and other assets on the Consolidated Balance Sheets. The Company’s recorded investment in these entities was approximately $3.9 million at December 31, 2018, and $3.0 million at December 31, 2017. The maximum exposure to loss related to these investments was $3.9 million at December 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 $0.5 million and $13.7 million of tax credits for the years ended December 31, 2018 and 2017, respectively. Recognition of a single historic tax credit investment resulted in a $12.5 million reduction in income tax expense and $11.3 million of other noninterest expenses during 2017.

Contingencies/Litigation. First Financial and its subsidiaries are engaged in various matters of litigation from time to time, and have a number of unresolved claims pending. Additionally, as part of the ordinary course of business, First Financial and its subsidiaries are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral and foreclosure interests, that is incidental to our regular business activities. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of December 31, 2018. Reserves are established for these various matters of litigation, when

72 First Financial Bancorp 2018 Annual Report

appropriate, under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had no reserves related to litigation matters as of December 31, 2018 or December 31, 2017.

13. Related Party Transactions

Loans to directors, executive officers, principal holders of First Financial’s common stock and certain related persons were as follows:

(Dollars in thousands)	2018
Beginning balance	$	9,873
Additions	2,108
Deductions	(9,249		)
Ending balance	$	2,732
Loans 90 days or more past due	$	0

Related parties of First Financial, as defined for inclusion in the table above, were clients of, and had transactions with, subsidiaries of First Financial during the periods noted. Similar transactions with related parties may be expected in future periods.

14. Income Taxes

Income tax expense consisted of the following components:

(Dollars in thousands)	2018		2017			2016
Current expense
Federal	$	34,330	$	22,599		$	40,537
State	1,029		1,265			1,322
Total current expense	35,359		23,864			41,859
Deferred expense (benefit)
Federal	4,675		(4,657		)	528
State	1,592		169			(182		)
Total deferred expense (benefit)	6,267		(4,488		)	346
Income tax expense	$	41,626	$	19,376		$	42,205

The difference between the federal income tax rates applied to income before income taxes, and the effective rates were due to the following:

(Dollars in thousands)	2018			2017			2016
Income taxes computed at federal statutory rate on income before income taxes (21% in 2018; 35% in 2017 and 2016)	$	44,986		$	40,657		$	45,756
Benefit from tax-exempt income	(4,499		)	(3,427		)	(2,911		)
Tax credits	(5,439		)	(16,806		)	(2,691		)
Tax rate reduction impact	0			(8,191		)	0
Basis reduction on historic tax credit	0			4,599			0
Tax benefit of equity compensation	(565		)	(1,449		)	(72		)
State income taxes, net of federal tax benefit	2,070			932			741
Affordable housing investments	4,725			2,798			1,923
Other	348			263			(541		)
Income tax expense	$	41,626		$	19,376		$	42,205

First Financial Bancorp 2018 Annual Report 73

Notes to Consolidated Financial Statements

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. As a result, First Financial revalued its deferred tax assets and liabilities as well as its investments in affordable housing projects utilizing a 21% federal rate compared to a 35% rate in prior periods.

The major components of the temporary differences that gave rise to deferred tax assets and liabilities at December 31, 2018, and 2017, were as follows:

(Dollars in thousands)	2018			2017
Deferred tax assets
Allowance for loan and lease losses	$	12,782		$	12,134
Fair value adjustments on business combinations	11,199			369
Deferred compensation	392			384
Postretirement benefits other than pension liability	676			564
Accrued stock-based compensation	1,145			932
OREO write-downs	118			97
Interest on nonaccrual loans	1,160			616
Accrued expenses	5,808			3,051
Net unrealized losses on investment securities and derivatives	3,221			249
State net operating loss	3,119			0
Federal tax credit carryforwards	873			0
Other	425			339
Total deferred tax assets	40,918			18,735
Deferred tax liabilities
Tax depreciation in excess of book depreciation	(9,530		)	(2,510		)
FHLB and FRB stock	(4,044		)	(3,384		)
Mortgage-servicing rights	(2,285		)	(343		)
Leasing activities	(3,881		)	(2,792		)
Retirement obligation	(6,614		)	(8,888		)
Intangible assets	(12,310		)	(11,559		)
Deferred loan fees and costs	(131		)	(371		)
Prepaid expenses	(582		)	(210		)
Limited partnership investments	(2,367		)	(1,230		)
Other	(1,867		)	(2,415		)
Total deferred tax liabilities	(43,611		)	(33,702		)
Total net deferred tax liability	$	(2,693	)	$	(14,967	)

In conjunction with the MSFG merger, First Financial acquired $3.9 million of state net operating losses, which begin to expire in 2022. The Company expects to fully utilize these net operating losses and, therefore, a valuation allowance is not required at December 31, 2018. The Company also acquired $0.9 million of federal alternative minimum tax credit carryforwards in its merger with MSFG, which are expected to be fully utilized in 2019. The acquired MSFG state net operating loss and federal tax credits are subject to IRC Section 382 and are limited annually.

The realization of the Company’s deferred tax assets is dependent upon the Company’s ability to generate taxable income in future periods, the reversal of deferred tax liabilities during the same period and the ability to carry back any losses. The Company has evaluated the available evidence supporting the realization of its deferred tax assets and determined it is more likely than not that the assets will be realized and thus no valuation allowance was recorded at December 31, 2018 and 2017.

With the acquisition of Mainsource in 2018, the Bank’s retained earnings at December 31, 2018 included base-year bad debt reserves, created for tax purposes prior to 1988, of $16.1 million.  Base-year reserves are subject to recapture in the event the Bank redeems its stock, makes distributions in excess of current and accumulated earnings and profits (as calculated for federal income tax purposes), loses its “bank” status or liquidates.  The Bank has no intention of meeting any of the criteria for recapture.  Accordingly, a deferred income tax liability of $3.4 million has not be recorded.

74 First Financial Bancorp 2018 Annual Report

At both December 31, 2018 and 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. A progression of unrecognized tax benefits as of December 31, 2018 and 2017 is as follows:

(Dollars in thousands)	2018		2017
Balance at beginning of year	$	3,735	$	3,735
Additions for tax positions of prior years	0		0
Balance at end of year	$	3,735	$	3,735

The unrecognized tax benefits relate to state income tax exposures where First Financial 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 December 31, 2018 and 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 2015 have been closed and are no longer subject to U.S. federal income tax examinations. Tax years 2015 through 2017 remain open to examination by the federal taxing authority.

First Financial is no longer subject to state and local income tax examinations for years prior to 2011. Tax years 2011 through 2017 remain open to state and local examination by various other jurisdictions.

15. Employee Benefit Plans

Pension plan. 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 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.

The investment objective of the Plan is to structure the assets to mirror the liabilities of the Plan, with the fixed income component matching the identified near and long-term plan distributions and the equity component generating growth of capital to meet other future Plan liabilities. The determination of the overall expected long-term return on plan assets was based on the composition of plan assets and a consensus of estimates from similarly managed portfolios of expected future returns.

As a result of the plan’s updated actuarial projections for 2018, First Financial recorded expense related to its pension plan of $0.9 million for 2018. During 2017 and 2016, First Financial recorded income of $0.6 million and $1.2 million, respectively. First Financial made no cash contributions to the pension plan in 2018, 2017 or 2016 and does not expect to make any contributions in 2019.

First Financial Bancorp 2018 Annual Report 75

Notes to Consolidated Financial Statements

The following tables set forth information concerning amounts recognized in First Financial's Consolidated Balance Sheets and Consolidated Statements of Income related to the Company's pension plan:

	December 31,
(Dollars in thousands)	2018			2017
Change in benefit obligation
Benefit obligation at beginning of year	$	71,154		$	62,729
Service cost	6,501			4,894
Interest cost	2,394			2,325
Actuarial (gain) loss	(4,032		)	6,107
Benefits paid, excluding settlement	(7,731		)	(4,901		)
Benefit obligation at end of year	68,286			71,154
Change in plan assets
Fair value of plan assets at beginning of year	144,349			131,011
Actual return on plan assets	(6,540		)	18,239
Benefits paid, excluding settlement	(7,731		)	(4,901		)
Fair value of plan assets at end of year	130,078			144,349
Amounts recognized in the Consolidated Balance Sheets
Assets	61,792			73,195
Liabilities	0			0
Net amount recognized	$	61,792		$	73,195
Amounts recognized in accumulated other comprehensive income (loss)
Net actuarial loss	$	43,711		$	33,580
Net prior service cost	(1,508		)	(1,921		)
Deferred tax assets	(9,613		)	(12,028		)
Net amount recognized	$	32,590		$	19,631
Change in accumulated other comprehensive income (loss)	$	12,959		$	(3,172	)
Accumulated benefit obligation	$	66,320		$	69,678

76 First Financial Bancorp 2018 Annual Report

Components of net periodic benefit cost
	December 31,
(Dollars in thousands)	2018			2017			2016
Service cost	$	6,501		$	4,894		$	5,034
Interest cost	2,394			2,325			2,262
Expected return on assets	(9,811		)	(9,358		)	(9,644		)
Amortization of prior service cost	(413		)	(413		)	(413		)
Recognized net actuarial loss	2,188			1,924			1,608
Net periodic benefit (income) cost	859			(628		)	(1,153		)
Other changes recognized in accumulated other comprehensive income (loss)
Net actuarial (gain) loss	12,319			(2,775		)	(884		)
Prior service cost	0			0			0
Amortization of prior service cost	413			413			413
Amortization of gain	(2,188		)	(1,924		)	(1,608		)
Total recognized in accumulated other comprehensive income (loss)	10,544			(4,286		)	(2,079		)
Total recognized in net periodic benefit cost and accumulated other comprehensive income (loss)	$	11,403		$	(4,914	)	$	(3,232	)
Amount expected to be recognized in net periodic pension expense in the coming year
Amortization of (gain) loss	$	1,867		$	2,090		$	1,754
Amortization of prior service credit	(413		)	(413		)	(413		)

Pension plan assumptions
	December 31,
	2018		2017		2016
Benefit obligations
Discount rate	4.31	%	3.43	%	3.88	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%
Net periodic benefit cost
Discount rate	3.43	%	3.88	%	4.05	%
Expected return on plan assets	7.25	%	7.25	%	7.50	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%

The fair value of the plan assets as of December 31, 2018 by asset category is shown in the table that follows:

	Fair Value Measurements
(Dollars in thousands)	Total		Quoted Prices in  Active Markets  for  Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash	$	216	$	216	$	0	$	0
U. S. Government agencies	8,053		0		8,053		0
Fixed income mutual funds	74,453		74,453		0		0
Equity mutual funds	47,356		47,356		0		0
Total	$	130,078	$	122,025	$	8,053	$	0

First Financial Bancorp 2018 Annual Report 77

Notes to Consolidated Financial Statements

The fair value of the plan assets as of December 31, 2017 by asset category is shown in the table that follows:

	Fair Value Measurements
(Dollars in thousands)	Total		Quoted Prices in  Active Markets  for  Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash	$	175	$	175	$	0	$	0
U. S. Government agencies	6,853		0		6,853		0
Fixed income mutual funds	69,154		69,154		0		0
Equity mutual funds	68,167		68,167		0		0
Total	$	144,349	$	137,496	$	6,853	$	0

The level within the fair value hierarchy is based on the lowest level of input that is significant in the fair value measurement. See Note 21 – Fair Value Disclosures for further information related to the framework for measuring fair value and the fair value hierarchy.

The following benefit payments, which reflect expected future service, are expected to be paid:

(Dollars in thousands)
2019	$	4,396
2020	5,280
2021	5,229
2022	4,739
2023	4,917
Thereafter	29,948

401(k) plan. First Financial sponsors a defined contribution 401(k) plan which covers substantially all employees. Employees may contribute up to 50.0% of their earnings into the plan, not to exceed applicable limitations prescribed by the Internal Revenue Service. First Financial's contributions to the 401(k) plan are discretionary and vest immediately. First Financial measures the Company's performance compared to its identified peer group in determining whether to recommend a Company contribution, with the amount of the recommended contribution not to exceed 3% of the employee's annual earnings. First Financial recorded no expense related to the Company's contributions to the 401(k) plan during the year ended December 31, 2018. First Financial recorded $1.9 million and $0.8 million of expense related to the Company's contributions to the 401(k) plan during 2017 and 2016, respectively.

16. 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, trust and wealth management fees, bankcard income, gain/loss on the sale of OREO and investment brokerage fees.

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

78 First Financial Bancorp 2018 Annual Report

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 2018 was $31.3 million, which was partially offset by $11.0 million of expenses within Noninterest income.

Gain/loss 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.

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.

First Financial Bancorp 2018 Annual Report 79

Notes to Consolidated Financial Statements

17. 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 accumulated other comprehensive income (loss) are as follows:

	December 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			Cumulative effect of new standard			Ending balance
Unrealized gain (loss) on debt securities	$	(14,461	)	$	(161	)	$	(14,300	)	$	3,071		$	(11,229	)	$	(182	)	$	(11,229	)	$	(190	)	$	(11,601	)
Unrealized gain (loss) on derivatives	628			0			628			(144		)	484			(577		)	484			(124		)	(217		)
Retirement obligation	(12,319		)	(1,775		)	(10,544		)	2,364			(8,180		)	(19,631		)	(8,180		)	(4,779		)	(32,590		)
Total	$	(26,152	)	$	(1,936	)	$	(24,216	)	$	5,291		$	(18,925	)	$	(20,390	)	$	(18,925	)	$	(5,093	)	$	(44,408	)

	December 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 debt securities	$	8,447	$	1,649		$	6,798	$	(2,431	)	$	4,367	$	(4,549	)	$	4,367	$	(182	)
Unrealized gain (loss) on derivatives	810		0			810		(296		)	514		(1,091		)	514		(577		)
Retirement obligation	2,775		(1,511		)	4,286		(1,114		)	3,172		(22,803		)	3,172		(19,631		)
Total	$	12,032	$	138		$	11,894	$	(3,841	)	$	8,053	$	(28,443	)	$	8,053	$	(20,390	)

	December 31, 2016
	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 debt securities	$	751	$	234		$	517	$	(133	)	$	384	$	(4,933	)	$	384	$	(4,549	)
Unrealized gain (loss) on derivatives	809		0			809		(301		)	508		(1,599		)	508		(1,091		)
Retirement obligation	884		(1,195		)	2,079		(834		)	1,245		(24,048		)	1,245		(22,803		)
Total	$	2,444	$	(961	)	$	3,405	$	(1,268	)	$	2,137	$	(30,580	)	$	2,137	$	(28,443	)

80 First Financial Bancorp 2018 Annual Report

The following table details the activity reclassified from accumulated other comprehensive income into income during the period:

	Amount Reclassified from Accumulated Other Comprehensive Income (1)
	December 31,
(Dollars in thousands)	2018			2017			2016			Affected Line Item in the Consolidated Statements of Income
Realized gains and losses on securities available-for-sale	$	(161	)	$	1,649		$	234		Net gain (loss) on sales of investment securities
Defined benefit pension plan
Amortization of prior service cost (2)	413			413			413			Other noninterest expense
Recognized net actuarial loss (2)	(2,188		)	(1,924		)	(1,608		)	Other noninterest expense
Amortization and settlement charges of defined benefit pension items	(1,775		)	(1,511		)	(1,195		)
Total reclassifications for the period, before tax	$	(1,936	)	$	138		$	(961	)

⁽¹⁾ Negative amounts are debits to profit/loss.

⁽²⁾ Included in the computation of net periodic pension cost (see Note 15 - Employee Benefit Plans for additional details).

18. Capital

Risk-based capital. First Financial and its subsidiary, First Financial Bank, are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action.

The Board of Governors of the Federal Reserve System approved Basel III in order to strengthen the regulatory capital framework for all banking organizations, subject to a phase-in period for certain provisions.  Basel III established and defined quantitative measures to ensure capital adequacy. These measures require First Financial to maintain minimum amounts and ratios of Common Equity tier 1 capital, total and tier 1 capital to risk-weighted assets and tier 1 capital to average assets (leverage ratio).  

Basel III includes a minimum ratio of common equity tier 1 capital to risk-weighted assets of 6.375% at December 31, 2018, which includes a capital conservation buffer that began on January 1, 2016 at 0.625% and is phased in over a four-year period, increasing by the same amount each subsequent January 1, until fully phased-in at 2.5% of risk-weighted assets on January 1, 2019.  Further, the minimum ratio of tier 1 capital to risk-weighted assets increased to 7.875% at December 31, 2018 and all banks are subject to a 4.0% minimum leverage ratio.  The required total risk-based capital ratio is unchanged. Failure to maintain the required common equity Tier 1 capital conservation buffer will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and pay discretionary compensation to its employees. The capital requirements also provide strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans. As of December 31, 2018, management believes the Company and the Bank meet all capital adequacy requirements to which they are subject.

First Financial Bancorp 2018 Annual Report 81

Notes to Consolidated Financial Statements

The following tables present the actual and required capital amounts and ratios as of December 31, 2018 and 2017 under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels based on the current phase-in provisions of the Basel III Capital Rules as well as the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered "well capitalized" are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules. All of First Financial's regulatory capital ratios exceeded the amounts necessary to be classified as “well capitalized,” and total regulatory capital exceeded the “minimum” requirement by $432.8 million on a consolidated basis at December 31, 2018.  

	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, 2018
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	1,215,613	11.87	%	$	652,874	6.375	%	N/A		N/A		$	716,881	7.00	%
First Financial Bank	1,279,492		12.50	%	652,590		6.375	%	$	665,386	6.50	%	716,570		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	1,257,366		12.28	%	806,491		7.875	%	N/A		N/A		870,499		8.50	%
First Financial Bank	1,279,596		12.50	%	806,141		7.875	%	$	818,937	8.00	%	870,120		8.50	%
Total capital to risk-weighted assets
Consolidated	1,444,146		14.10	%	1,011,314		9.875	%	N/A		N/A		1,075,322		10.50	%
First Financial Bank	1,344,388		13.13	%	1,010,875		9.875	%	1,023,671		10.00	%	1,074,855		10.50	%
Leverage
Consolidated	1,257,366		9.71	%	517,958		4.00	%	N/A		N/A		517,958		4.00	%
First Financial Bank	1,279,596		9.89	%	517,710		4.00	%	647,138		5.00	%	517,710		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	5.75	%	N/A		N/A		$	497,604	7.00	%
First Financial Bank	794,251		11.21	%	407,220		5.75	%	$	460,336	6.50	%	495,746		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	755,839		10.63	%	515,376		7.25	%	N/A		N/A		604,233		8.50	%
First Financial Bank	794,355		11.22	%	513,452		7.25	%	566,567		8.00	%	601,978		8.50	%
Total capital to risk-weighted assets
Consolidated	929,148		13.07	%	657,548		9.25	%	N/A		N/A		746,406		10.50	%
First Financial Bank	856,363		12.09	%	655,093		9.25	%	708,209		10.00	%	743,619		10.50	%
Leverage
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	%

82 First Financial Bancorp 2018 Annual Report

Share repurchases. In October 2012, First Financial's board of directors approved a share repurchase plan under which the Company has the ability to repurchase up to 5,000,000 common shares. The Company did not repurchase any shares under this plan during 2016, 2017 or 2018. At December 31, 2018, 3,509,133 common shares remained available for purchase under this repurchase plan.

ATM Offering. In March 2017, First Financial initiated an "at-the-market" equity offering program to provide flexibility with respect to capital planning and to support future growth. First Financial was not active through the ATM program during the period.

19. Stock Options and Awards

First Financial follows the provisions of FASB ASC Topic 718, Compensation-Stock Compensation, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation expense over the service period for all awards expected to vest. First Financial recorded share-based compensation expense of $6.2 million for the year ended December 31, 2018 and $5.4 million for the years ended December 31, 2017 and December 31, 2016, within salaries and employee benefits expense related to stock options and restricted stock awards. Total unrecognized compensation cost related to non-vested share-based compensation was $6.9 million at December 31, 2018 and is expected to be recognized over a weighted average period of 1.94 years.

As of December 31, 2018, First Financial had a single active stock-based compensation plan, the Amended and Restated 2012 Stock Plan, under which additional awards may be granted.

In May 2012, shareholders approved the First Financial Bancorp. 2012 Stock Plan. In May 2017, the shareholders amended and restated the 2012 Stock Plan as the First Financial Bancorp. Amended and Restated 2012 Stock Plan. At December 31, 2018, there were 1,877,079 shares available for issuance under the Amended and Restated 2012 Stock Plan.

In April 2018, in conjunction with the MSFG merger, First Financial assumed the existing MSFG options which were converted into 83,551 options to purchase First Financial common stock. The converted MSFG options remain subject to all of the terms and conditions of the plan and grant agreements under which the MSFG Stock Options were originally issued. The assumed options were exercisable at the time of the merger and remain outstanding for 10 years after the initial grant date with all options expiring at the end of the exercise period. At December 31, 2018, 62,410 options were outstanding under the Plan, all of which expire on or before February 3, 2024.

First Financial utilizes the Black-Scholes valuation model to determine the fair value of stock options granted. In addition to the stock option strike price, the Black-Scholes valuation model incorporates the following assumptions: the expected dividend yield based on historical dividend payouts; the expected stock price volatility based on the historical volatility of Company stock for a period approximating the expected life of the options; the risk-free rate based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option; and the expected option life represented by the period of time the options are expected to be outstanding, and is based on historical trends. No options were granted in 2018, 2017 or 2016.

Stock option activity for the year ended December 31, 2018, is summarized as follows:

(Dollars in thousands, except share and per share data)	Number of shares		Weighted average exercise price		Weighted average remaining contractual life	Aggregate intrinsic value
Outstanding at beginning of year	11,800		$	11.64
Granted	0		0.00
Assumed	83,551		8.54
Exercised	(32,941	)	8.62
Forfeited or expired	0		0.00
Outstanding at end of year	62,410		$	9.08	3.72	$	914
Exercisable at end of year	62,410		$	9.08	3.72	$	914

First Financial Bancorp 2018 Annual Report 83

Notes to Consolidated Financial Statements

The intrinsic value of stock options is defined as the difference between the current market value and the exercise price. First Financial uses treasury shares purchased under the Company's share repurchase program to satisfy share-based exercises.

	2018		2017		2016
Total intrinsic value of options exercised	$	734	$	1,533	$	661
Cash received from exercises	$	284	$	341	$	801
Tax benefit from exercises	$	1,439	$	1,991	$	1,958

Restricted stock awards are recorded at fair value as of the grant date as a component of shareholders' equity and amortized on a straight-line basis to salaries and benefits expense over the specified vesting periods, which is currently three years for employees and one year for non-employee directors. The vesting of these awards for employees and non-employee directors may require a service period to be met, and certain awards may also require performance measures to be met.

Activity in restricted stock for the previous three years ended December 31 is summarized as follows:

	2018				2017				2016
	Number of shares		Weighted  average grant date fair value		Number of shares		Weighted  average grant date fair value		Number of shares		Weighted  average grant date fair value
Nonvested at beginning of year	468,372		$	21.63	648,817		$	17.82	643,641		$	17.21
Granted	303,930		28.94		234,529		27.36		317,695		18.13
Vested	(267,031	)	20.94		(307,825	)	18.12		(263,713	)	16.82
Forfeited	(42,825	)	26.38		(107,149	)	21.18		(48,806	)	17.37
Nonvested at end of year	462,446		$	26.39	468,372		$	21.63	648,817		$	17.82

The fair value of restricted stock is determined based on the number of shares granted and the quoted price of First Financial's common stock. The fair value of restricted stock vested during 2018, 2017 and 2016 was $5.6 million, $5.6 million and $4.4 million, respectively.

20. Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per share:

(Dollars in thousands, except share and per share data)	2018		2017		2016
Numerator
Net income	$	172,595	$	96,787	$	88,526
Denominator
Basic earnings per common share - weighted average shares	88,582,090		61,529,460		61,206,093
Effect of dilutive securities
Employee stock awards	514,680		581,329		729,335
Warrants	517,435		60,801		49,994
Diluted earnings per common share - adjusted weighted average shares	89,614,205		62,171,590		61,985,422
Earnings per share available to common shareholders
Basic	$	1.95	$	1.57	$	1.45
Diluted	$	1.93	$	1.56	$	1.43

First Financial had warrants outstanding to purchase the Company's common stock as of December 31, 2018. These warrants were acquired in the MSFG merger and represent the right to purchase 804,858 shares of First Financial's common stock at an exercise price of $10.62 per share and were exercised in January 2019. At December 31, 2017 and 2016, First Financial had

84 First Financial Bancorp 2018 Annual Report

warrants outstanding representing the right to purchase 104,200 shares and 114,678 shares of common stock at an exercise price of exercise price of $12.12 and expired on December 23, 2018.

Stock options and warrants with exercise prices greater than the average market price of the common shares were not included in the computation of net income per diluted share, as they would have been antidilutive.  Using the period end price, there were no antidilutive options at December 31, 2018, 2017, or 2016.

As of December 31, 2018, 2017, and 2016, First Financial was authorized to issue 10,000,000 preferred shares, however no preferred shares were issued or outstanding.

21. Fair Value Disclosures

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:

	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2018
Financial assets
Cash and short-term investments	$	273,959	$	273,959	$	273,959	$	0	$	0
Investment securities held-to-maturity	429,328		424,118		0		424,118		0
Other investments	115,660		N/A		N/A		N/A		N/A
Loans held for sale	4,372		4,372		0		4,372		0
Loans and leases, net of ALLL	8,767,672		8,662,868		0		0		8,662,868
Accrued interest receivable	41,816		41,816		0		13,819		27,997
Financial liabilities
Deposits
Noninterest-bearing	$	2,492,434	$	2,492,434	$	0	$	2,492,434	$	0
Interest-bearing demand	2,307,071		2,307,071		0		2,307,071		0
Savings	3,167,325		3,167,325		0		3,167,325		0
Time	2,173,564		2,146,645		0		2,146,645		0
Total deposits	10,140,394		10,113,475		0		10,113,475		0
Short-term borrowings	1,040,691		1,040,691		1,040,691		0		0
Long-term debt	570,739		557,933		0		557,933		0
Accrued interest payable	12,126		12,126		2,035		10,091		0

First Financial Bancorp 2018 Annual Report 85

Notes to Consolidated Financial Statements

	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	$	184,624	$	184,624	$	184,624	$	0	$	0
Investment securities held-to-maturity	654,008		653,101		0		653,101		0
Other investments	53,140		N/A		N/A		N/A		N/A
Loans held for sale	11,502		11,502		0		11,502		0
Loans and leases, net of ALLL	5,959,162		6,006,656		0		0		6,006,656
Accrued interest receivable	24,496		24,496		0		8,265		16,231
Financial liabilities
Deposits
Noninterest-bearing	$	1,662,058	$	1,662,058	$	0	$	1,662,058	$	0
Interest-bearing demand	1,453,463		1,453,463		0		1,453,463		0
Savings	2,462,420		2,462,420		0		2,462,420		0
Time	1,317,105		1,306,674		0		1,306,674		0
Total deposits	6,895,046		6,884,615		0		6,884,615		0
Short-term borrowings	814,565		814,565		814,565		0		0
Long-term debt	119,654		117,908		0		117,908		0
Accrued interest payable	5,104		5,104		204		4,900		0

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 December 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 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

86 First Financial Bancorp 2018 Annual Report

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.

First Financial Bancorp 2018 Annual Report 87

Notes to Consolidated Financial Statements

The financial assets and liabilities measured at fair value on a recurring basis in the consolidated financial statements were as follows:

	Fair Value Measurements Using						Assets/Liabilities
(Dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
December 31, 2018
Assets
Derivatives	$	0	$	29,543	$	0	$	29,543
Investment securities available-for-sale	97		2,779,158		0		2,779,255
Total	$	97	$	2,808,701	$	0	$	2,808,798
Liabilities
Derivatives	$	0	$	29,336	$	0	$	29,336

	Fair Value Measurements Using						Assets/Liabilities
(Dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
December 31, 2017
Assets
Derivatives	$	0	$	12,757	$	0	$	12,757
Investment securities available-for-sale	2,969		1,346,439		0		1,349,408
Total	$	2,969	$	1,359,196	$	0	$	1,362,165
Liabilities
Derivatives	$	0	$	12,755	$	0	$	12,755

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:

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2018
Assets
Impaired loans	$	0	$	0	$	1,320
OREO	0		0		1,089

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2017
Assets
Impaired loans	$	0	$	0	$	2,671
OREO	0		0		1,086

88 First Financial Bancorp 2018 Annual Report

22. Business Combination

On April 1, 2018, First Financial completed its acquisition of MainSource Financial Group, Inc. and its banking subsidiary, MainSource Bank. Therefore, results of MSFG have been included in the results of operations beginning on April 1, 2018. Under the terms of the merger agreement, shareholders of MSFG received 1.3875 common shares of First Financial common stock for each share of MSFG common stock, with cash paid in lieu of fractional shares. Including outstanding options and warrants to purchase MSFG common stock, the total purchase consideration was $1.1 billion and resulted in goodwill of $676.2 million. The goodwill arising from the acquisition largely reflected synergies and cost savings resulting from combining the operations of the companies. First Financial incurred $37.8 million of merger related expenses related to the acquisition of MSFG during the year ended December 31, 2018.

The acquisition is expected to provide additional revenue growth and diversification. The goodwill is not deductible for income tax purposes as the transaction was accounted for as a tax-free exchange. For further detail, see Note 8 – Goodwill and Other Intangible Assets.

The MainSource transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available.  The Company continues to finalize the fair values of loans, intangible assets and liabilities. As a result, the fair value adjustments are preliminary and may change as information becomes available. Fair value adjustments will be finalized no later than April 2019.

First Financial Bancorp 2018 Annual Report 89

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value. As a condition of the merger, certain acquired assets and liabilities held for sale were divested subsequent to the closing of the merger. There was no gain or loss recorded in the Consolidated Statement of Income in conjunction with this divestiture.

(Dollars in thousands)	MainSource
Purchase consideration
Cash consideration	$	43
Stock consideration	1,043,424
Warrant consideration	14,460
Options consideration	1,577
Total purchase consideration	1,059,504
Assets acquired
Cash	71,688
Investment securities available-for-sale	900,935
Investment securities held-to-maturity	171,423
Other investments	28,763
Loans	2,792,740
Premises and equipment	98,381
Intangible assets	42,887
Other assets	167,693
Assets held for sale	127,775
Total assets acquired	4,402,285
Liabilities assumed
Deposits	3,264,038
Subordinated notes	49,027
FHLB advances	291,887
Other borrowings	205,620
Other liabilities	32,654
Liabilities held for sale	175,722
Total liabilities assumed	4,018,948
Net identifiable assets	383,337
Goodwill	$	676,167

The fair value of net assets acquired includes fair value adjustments to certain loans that were not considered impaired as of the acquisition date as the Company believes that all contractual cash flows will be collected. The fair value adjustments were determined using discounted cash flows. In conjunction with the MSFG merger, First Financial acquired non-impaired loans with a fair value and gross contractual amounts receivable of $2.8 billion and $2.9 billion on the date of acquisition.

First Financial Bancorp 2018 Annual Report 90

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2017. The pro forma information includes adjustments for interest income on acquired loans, amortization of intangible assets arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, merger-related expenses incurred and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed date. The disclosures regarding the results of operations for MSFG subsequent to its acquisition date are omitted as this information is not practical to obtain.

	Twelve months ended
	December 31,
(Dollars in thousands, except per share data) (Unaudited)	2018		2017
Pro Forma Condensed Combined Income Statement Information
Net interest income	$	484,915	$	454,579
Net income	221,122		130,402
Basic earnings per share	$	2.27	$	1.34
Diluted earnings per share	$	2.25	$	1.33

23. First Financial Bancorp (Parent Company Only) Financial Information

Balance Sheets

	December 31,
(Dollars in thousands)	2018		2017
Assets
Cash	$	86,878	$	57,719
Investment securities, available for sale	694		442
Subordinated notes from subsidiaries	7,500		7,500
Investment in subsidiaries
Commercial banks	2,078,655		970,290
Nonbanks	7,194		0
Total investment in subsidiaries	2,085,849		970,290
Premises and equipment	1,361		1,378
Other assets	71,817		26,778
Total assets	$	2,254,099	$	1,064,107
Liabilities
Subordinated debentures	$	171,416	$	118,638
Dividends payable	465		10,965
Other liabilities	3,969		3,840
Total liabilities	175,850		133,443
Shareholders’ equity	2,078,249		930,664
Total liabilities and shareholders’ equity	$	2,254,099	$	1,064,107

First Financial Bancorp 2018 Annual Report 91

Notes to Consolidated Financial Statements

Statements of Incomeand Comprehensive Income

	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Income
Interest income	$	23		$	6		$	48
Noninterest income	0			86			2,596
Dividends from subsidiaries	107,340			54,600			52,700
Total income	107,363			54,692			55,344
Expenses
Interest expense	8,798			6,152			6,151
Salaries and employee benefits	6,413			5,519			5,445
Miscellaneous professional services	5,130			970			711
Other	5,648			4,819			4,841
Total expenses	25,989			17,460			17,148
Income before income taxes and equity in undistributed net earnings of subsidiaries	81,374			37,232			38,196
Income tax expense (benefit)	(6,687		)	(7,080		)	(5,302		)
Equity in undistributed earnings (loss) of subsidiaries	84,534			52,475			45,028
Net income	$	172,595		$	96,787		$	88,526
Comprehensive income	$	153,670		$	104,840		$	90,663

92 First Financial Bancorp 2018 Annual Report

Statements of Cash Flows

	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Operating activities
Net income	$	172,595		$	96,787		$	88,526
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed (earnings) loss of subsidiaries	(84,534		)	(52,475		)	(45,028		)
Depreciation and amortization	194			193			192
Stock-based compensation expense	6,219			5,446			5,354
Deferred income taxes	739			(360		)	584
(Decrease) increase in dividends payable	(10,500		)	579			135
Increase (decrease) in other liabilities	9,979			(889		)	(389		)
Decrease (increase) in other assets	16,346			(6,951		)	(9,065		)
Net cash provided by (used in) operating activities	111,038			42,330			40,309
Investing activities
Capital contributions to subsidiaries	(3,000		)	0			(53,000		)
Net cash acquired (paid) from business combinations	11,353			0			0
Proceeds from calls and maturities of investment securities	0			0			5,978
Purchases of investment securities	0			0			(333		)
Net cash (used in) provided by investing activities	8,353			0			(47,355		)
Financing activities
(Decrease) increase in short-term borrowings	(8,333		)	0			0
Cash dividends paid on common stock	(79,655		)	(41,178		)	(39,125		)
Proceeds from exercise of stock options, net of shares purchased	284			341			801
Excess tax benefit on share-based compensation	0			0			264
Other	(2,528		)	(3,059		)	(1,681		)
Net cash (used in) provided by financing activities	(90,232		)	(43,896		)	(39,741		)
Net increase (decrease) in cash	29,159			(1,566		)	(46,787		)
Cash at beginning of year	57,719			59,285			106,072
Cash at end of year	$	86,878		$	57,719		$	59,285

First Financial Bancorp 2018 Annual Report 93

Quarterly Financial And Common Stock Data (Unaudited)
	Three months ended
(Dollars in thousands, except per share data)	December 31			September 30			June 30			March 31
2018
Interest income	$	153,429		$	149,220		$	147,379		$	90,354
Interest expense	27,470			25,735			23,400			14,542
Net interest income	125,959			123,485			123,979			75,812
Provision for loan and lease losses	5,310			3,238			3,735			2,303
Noninterest income
Gain on sale of investment securities	36			(167		)	(30		)	0
All other	29,468			28,851			28,286			16,938
Total noninterest income	29,504			28,684			28,256			16,938
Noninterest expenses	83,352			85,415			102,755			52,288
Income before income taxes	66,801			63,516			45,745			38,159
Income tax expense	11,787			12,859			9,327			7,653
Net income	$	55,014		$	50,657		$	36,418		$	30,506
Earnings per common share:
Basic	$	0.56		$	0.52		$	0.37		$	0.49
Diluted	$	0.56		$	0.51		$	0.37		$	0.49
Cash dividends paid per common share	$	0.20		$	0.20		$	0.19		$	0.36
Market price
High	$	29.58		$	32.35		$	33.55		$	29.35
Low	$	22.40		$	29.40		$	28.10		$	26.40
2017
Interest income	$	88,538		$	84,918		$	80,789		$	78,828
Interest expense	12,924			14,439			12,269			9,896
Net interest income	75,614			70,479			68,520			68,932
Provision for loan and lease losses	(205		)	2,953			467			367
Noninterest income
Gain on sale of investment securities	19			276			838			516
All other	18,363			22,666			16,616			16,848
Total noninterest income	18,382			22,942			17,454			17,364
Noninterest expenses	82,898			54,443			51,556			51,045
Income before income taxes	11,303			36,025			33,951			34,884
Income tax expense	(13,508		)	11,199			11,215			10,470
Net income	$	24,811		$	24,826		$	22,736		$	24,414
Earnings per common share:
Basic	$	0.40		$	0.40		$	0.37		$	0.40
Diluted	$	0.40		$	0.40		$	0.37		$	0.39
Cash dividends paid per common share	$	0.17		$	0.17		$	0.17		$	0.16
Market price
High	$	29.15		$	28.50		$	28.95		$	28.90
Low	$	25.30		$	23.10		$	25.05		$	26.00

First Financial Bancorp common stock trades on the Nasdaq Stock Market under the symbol FFBC.

94 First Financial Bancorp 2018 Annual Report

Total Return to Shareholders

The following graph compares the five-year cumulative total return to shareholders of First Financial Bancorp common stock with that of companies that comprise the Nasdaq Composite Index and the KBW Regional Bank Index. The KBW Regional Bank Index is comprised of 50 bank holding companies headquartered throughout the country and is used frequently by investors when comparing First Financial Bancorp's stock performance to that of other similarly sized institutions. First Financial Bancorp is included in the KBW Regional Bank Index.

The following table assumes $100 invested on December 31, 2013 in First Financial Bancorp, the Nasdaq Composite Index and the KBW Regional Bank Index, and assumes that dividends are reinvested.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

AMONG FIRST FINANCIAL BANCORP, NASDAQ COMPOSITE INDEX

AND KBW REGIONAL BANK INDEX

	2013	2014	2015	2016	2017	2018
First Financial Bancorp	100.00	110.55	111.30	180.72	171.78	158.79
Nasdaq Composite Index	100.00	114.82	122.99	134.01	173.85	168.96
KBW Regional Bank Index	100.00	102.43	108.57	151.04	153.77	126.88

First Financial Bancorp 2018 Annual Report 95

Shareholder Information Annual Meeting of Shareholders Investor Relations The annual meeting of shareholders will be held on Corporate and investor information, including news Tuesday, May 28, 2019, at 10:00 AM (EDT) via a releases, webcasts, investor presentations, annual reports, virtual shareholder meeting. proxy statements and SEC filings, as well as information on the Company’s corporate governance practices are Common Stock Listing available within the Investor Relations section of our First Financial Bancorp’s common stock trades website at www.bankatfirst.com/investor. on the Nasdaq Stock Market (NASDAQ) under the symbol FFBC. Shareholders, analysts and other investment professionals who would like corporate and financial information on Registrar and Transfer Agent First Financial Bancorp should contact: Computershare Shareholder Services serves as the registrar and transfer agent for First Financial Bancorp Jamie Anderson common stock for registered shareholders. Shareholder Chief Financial Officer account inquiries, including changes of address or First Financial Bancorp ownership, transferring stock and replacing lost 255 East Fifth Street, 29th Floor certificates or dividend checks should be directed to Cincinnati, OH 45202 Computershare Shareholder Services at: (513) 887-5400 Email: InvestorRelations@bankatfirst.com Transfer Agent Computershare Shareholder Services Securities and Exchange Commission Filings P.O. Box 505000 All reports filed electronically by First Financial Bancorp with Louisville, KY 40233 the United States Securities and Exchange Commission (SEC), (800) 368-5948 including the Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current event reports on Form 8-K, as Shareholders of record can also access their shareholder well as any amendments to those reports, are accessible at account records and request information related to their no cost within the Investor Relations section of our website shareholder account via the internet. To register for online at www.bankatfirst.com/investor, or by contacting Investor account access, go to: www.computershare.com/investor. Relations. These filings are also accessible on the SEC’s website at www.sec.gov. Dividend Reinvestment and Stock Purchase Plan Shareholders of record holding 25 shares or more are eligible to participate in our Dividend Reinvestment Plan. Shareholders of record may elect to have cash dividends automatically reinvested in additional common shares and can also purchase additional common shares by making optional cash payments. To obtain a prospectus, enroll in the plan, or to contact Investor Relations, please visit the Investor Relations section of our website at www.bankatfirst.com/investor.

96 First Financial Bancorp 2018 Annual Report

2018 ANNUAL REPORT First Financial Bancorp First Financial Center 255 East Fifth Street Suite 800 Cincinnati, OH 45202-4248 www.bankatfirst.com

EX-21

EXHIBIT 21

FIRST FINANCIAL BANCORP. SUBSIDIARIES (as of 12/31/18)

Name	State of Other Jurisdiction of Incorporation or Organization
First Financial Bank	Ohio
First Financial Collateral, Inc.	Indiana
First Financial Equipment Finance, LLC	Ohio
First Financial Insurance Holding Company	Ohio
First Financial Insurance, Inc.	Ohio
First Franchise Capital Corporation	Indiana
Irwin Home Equity Corporation	Indiana
IHE Funding Corp. II	Delaware
Irwin Union Realty Corporation	Indiana
MainSource Insurance, LLC	Indiana
MSB Investments of Nevada, Inc.	Nevada
MSB Holdings of Nevada, Inc.	Nevada
MSB of Nevada, LLC	Nevada
First Financial Preferred Capital, Inc.	Ohio
New American Real Estate, LLC	Indiana
Oak Street Holdings Corporation	Delaware
Oak Street Funding LLC	Delaware
Oak Street Servicing, LLC	Delaware
CDE Fifty-One Service Corporation	Indiana
FCBKY Holding, LLC	Kentucky
Peoples Building and Savings Service Corporation of Troy, Ohio	Ohio
MainSource Risk Management, Inc.	Nevada
MainSource Statutory Trust I	Connecticut
MainSource Statutory Trust II	Connecticut
MainSource Statutory Trust III	Delaware
MainSource Statutory Trust IV	Delaware
FCB Bancorp Statutory Trust I	Delaware
OSF Insurance Receivables, LLC	Indiana

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of First Financial Bancorp:

Form S-8 No.  338-86781

Form S-3 No.  333-25745

Form S-3 No.  333-156841

Form S-3 No.  333-153751

Form S-8 No.  333-168675

Form S-8 No.  333-188593

Form S-3 No. 333-197771

Form S-8 No. 333-218188

Form S-3 No. 333-219554

Form S-4 No. 333-220583

of our report dated February 22, 2019 relating to the 2018 consolidated financial statements and effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K.

Crowe LLP

Indianapolis, Indiana

February 22, 2019

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Archie M. Brown, Jr., President and Chief Executive Officer of First Financial Bancorp., certify that:

1. I have reviewed this annual report on Form 10-K 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:	2/22/2019	/s/ Archie M. Brown, Jr.
		Archie M. Brown, Jr. President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, James M. Anderson, Executive Vice President and Chief Financial Officer of First Financial Bancorp., certify that:

1. I have reviewed this annual report on Form 10-K 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:	2/22/2019	/s/ James M. Anderson
		James M. Anderson Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORT BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-K for the annual period ended December 31, 2018, of First Financial Bancorp. (the “Company”), as filed with the Securities and Exchange Commission on February 22, 2019 (the “Report”), I, Archie M. Brown, Jr., President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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

February 22, 2019

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PERIODIC FINANCIAL REPORT BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-K for the annual period ended December 31, 2018, of First Financial Bancorp. (the “Company”), as filed with the Securities and Exchange Commission on February 22, 2019 (the “Report”), I, James M. Anderson, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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

February 22, 2019

XML

Document and Entity Information Document - USD ($)	12 Months Ended
	Dec. 31, 2018	Feb. 21, 2019	Jun. 30, 2018
DOCUMENT AND ENTITY INFORMATION [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
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		98,389,491
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 2,938,239,000
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Cash and due from banks	$ 236,221	$ 150,650
Interest-bearing deposits with other banks	37,738	33,974
Investment securities available-for-sale, at fair value (amortized cost $2,792,326 at December 31, 2018 and $1,348,227 at December 31, 2017)	2,779,255	1,349,408
Investment securities held-to-maturity (fair value $424,118 at December 31, 2018 and $653,101 at December 31, 2017)	429,328	654,008
Other investments	115,660	53,140
Loans held for sale	4,372	11,502
Loans and leases
Commercial & industrial	2,514,661	1,912,743
Lease financing	93,415	89,347
Construction real estate	548,935	467,730
Commercial real estate	3,754,681	2,490,091
Residential real estate	955,646	471,391
Home equity	817,282	493,604
Installment	93,212	41,586
Credit card	46,382	46,691
Total loans and leases	8,824,214	6,013,183
Less: Allowance for loan and lease losses	56,542	54,021
Net loans and leases	8,767,672	5,959,162
Premises and equipment	215,652	125,036
Goodwill	880,251	204,084
Other intangibles	40,805	3,786
Accrued interest and other assets	479,706	352,173
Total assets	13,986,660	8,896,923
Deposits
Interest-bearing demand	2,307,071	1,453,463
Savings	3,167,325	2,462,420
Time	2,173,564	1,317,105
Total interest-bearing deposits	7,647,960	5,232,988
Noninterest-bearing	2,492,434	1,662,058
Total deposits	10,140,394	6,895,046
Federal funds purchased	183,591	72,265
FHLB short-term borrowings	857,100	742,300
Total short-term borrowings	1,040,691	814,565
Long-term debt	570,739	119,654
Total borrowed funds	1,611,430	934,219
Accrued interest and other liabilities	156,587	136,994
Total liabilities	11,908,411	7,966,259
Shareholders' equity
Common stock - no par value	1,633,256	573,109
Retained earnings	600,014	491,847
Accumulated other comprehensive income (loss)	(44,408)	(20,390)
Treasury stock, at cost, 6,387,508 shares in 2018 and 6,661,644 shares in 2017	(110,613)	(113,902)
Total shareholders' equity	2,078,249	930,664
Total liabilities and shareholders’ equity	$ 13,986,660	$ 8,896,923

XML

CONSOLIDATED BALANCE SHEETS CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Investment securities available-for-sale, cost	$ 2,792,326	$ 1,348,227
Investment securities held-to-maturity, market value	$ 424,118	$ 653,101
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized	160,000,000	160,000,000
Common Stock, Shares, Issued	104,281,794	68,730,731
Treasury Stock, Shares	6,387,508	6,661,644

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Interest income
Loans and leases, including fees	$ 447,187	$ 280,111	$ 262,703
Investment securities
Taxable	79,076	50,568	43,103
Tax-exempt	13,428	5,918	4,535
Total interest on investment securities	92,504	56,486	47,638
Other earning assets	691	(3,524)	(4,391)
Total interest income	540,382	333,073	305,950
Interest expense
Deposits	56,962	35,182	22,613
Short-term borrowings	18,033	8,193	4,506
Long-term borrowings	16,152	6,153	6,160
Total interest expense	91,147	49,528	33,279
Net interest income	449,235	283,545	272,671
Provision for loan and lease losses	14,586	3,582	10,140
Net interest income after provision for loan and lease losses	434,649	279,963	262,531
Noninterest income
Service charges on deposit accounts	35,108	19,775	18,933
Investment Banking, Advisory, Brokerage, and Underwriting Fees and Commissions	15,082	14,073	13,200
Bankcard income	20,245	13,298	12,132
Client derivative fees	7,682	6,418	4,570
Net gain from sales of loans	6,071	5,169	6,804
Net gain (loss) on sales of investment securities	(161)	1,649	234
Other	19,355	15,760	13,728
Total noninterest income	103,382	76,142	69,601
Noninterest expenses
Salaries and employee benefits	188,990	137,240	128,549
Net occupancy	24,215	17,397	18,329
Furniture and equipment	14,908	8,443	8,663
Data processing	28,077	14,022	11,406
Marketing	7,598	3,201	3,965
Communication	3,167	1,819	1,889
Professional services	12,272	15,023	6,303
State intangible tax	4,152	2,655	2,034
FDIC assessments	3,969	3,944	4,293
Loss (gain) - other real estate owned	373	642	(1,212)
Other	36,089	35,556	17,182
Total noninterest expenses	323,810	239,942	201,401
Income before income taxes	214,221	116,163	130,731
Income tax expense	41,626	19,376	42,205
Net income	$ 172,595	$ 96,787	$ 88,526
Earnings per common share
Basic	$ 1.95	$ 1.57	$ 1.45
Diluted	$ 1.93	$ 1.56	$ 1.43
Average common shares outstanding - basic	88,582,090	61,529,460	61,206,093
Average common shares outstanding - diluted	89,614,205	62,171,590	61,985,422

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 172,595	$ 96,787	$ 88,526
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on debt securities arising during the period	(11,229)	4,367	384
Change in retirement obligation	(8,180)	3,172	1,245
Unrealized gain (loss) on derivatives	484	514	508
Other comprehensive income (loss)	(18,925)	8,053	2,137
Comprehensive income	$ 153,670	$ 104,840	$ 90,663

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock
Balances at January 1, 2016 at Dec. 31, 2015	$ 809,376	$ 571,155	$ 388,240	$ (30,580)	$ (119,439)
Balances at January 1, 2016 at Dec. 31, 2015		68,730,731			(7,089,051)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	88,526		88,526
Other comprehensive loss	2,137			2,137
Cash dividends declared:
Common stock at $0.76 per share in 2018, $0.68 per share in 2017, and $0.64 per share in 2016	(39,578)		(39,578)
Common stock issued in connection with business combinations	$ 0
Treasury Stock, Shares, Acquired	0
Adjustments to Additional Paid in Capital, Other	$ 0	$ (1,507)			$ 1,507
Stock Issued During Period, Shares, Other					89,383
Excess tax benefit on share-based compensation	264	264
Exercise of stock options, net of shares purchased (in shares)					65,515
Exercise of stock options, net of shares purchased	726	(379)			$ 1,105
Restricted stock awards, net of forfeitures (in shares)					182,974
Restricted stock awards, net of forfeitures	(1,581)	(4,505)			$ 2,924
Share-based compensation expense	5,354	$ 5,354
Ending Balances (in shares) at Dec. 31, 2016		68,730,731			(6,751,179)
Ending Balances at Dec. 31, 2016	865,224	$ 570,382	437,188	(28,443)	$ (113,903)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	96,787		96,787
Other comprehensive loss	8,053			8,053
Cash dividends declared:
Common stock at $0.76 per share in 2018, $0.68 per share in 2017, and $0.64 per share in 2016	(42,128)		(42,128)
Common stock issued in connection with business combinations	$ 0
Treasury Stock, Shares, Acquired	0
Adjustments to Additional Paid in Capital, Other	$ 0	(99)			$ 99
Stock Issued During Period, Shares, Other					5,843
Exercise of stock options, net of shares purchased (in shares)					58,212
Exercise of stock options, net of shares purchased	75	(912)			$ 987
Restricted stock awards, net of forfeitures (in shares)					25,480
Restricted stock awards, net of forfeitures	(2,793)	(1,708)			$ (1,085)
Share-based compensation expense	5,446	$ 5,446
Ending Balances (in shares) at Dec. 31, 2017		68,730,731			(6,661,644)
Ending Balances at Dec. 31, 2017	930,664	$ 573,109	491,847	(20,390)	$ (113,902)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification	0		5,093	(5,093)
Net income	172,595		172,595
Other comprehensive loss	(18,925)			(18,925)
Cash dividends declared:
Common stock at $0.76 per share in 2018, $0.68 per share in 2017, and $0.64 per share in 2016	(69,521)		(69,521)
Stock Issued During Period, Shares, Acquisitions		35,551,063
Common stock issued in connection with business combinations	1,043,424	$ 1,043,424
Treasury Stock, Shares, Acquired
Treasury Stock, Value, Acquired, Cost Method
Stock Options and Warrants Acquired And Converted Pursuant To Acquisition	16,037	16,037
Adjustments to Additional Paid in Capital, Other	$ 0	(1,120)			$ 1,120
Stock Issued During Period, Shares, Other					65,354
Exercise of stock options, net of shares purchased (in shares)	32,941				32,941
Exercise of stock options, net of shares purchased	$ 284	(282)			$ 566
Restricted stock awards, net of forfeitures (in shares)					175,841
Restricted stock awards, net of forfeitures	(2,528)	(4,131)			$ 1,603
Share-based compensation expense	6,219	$ 6,219
Ending Balances (in shares) at Dec. 31, 2018		104,281,794			(6,387,508)
Ending Balances at Dec. 31, 2018	$ 2,078,249	$ 1,633,256	$ 600,014	$ (44,408)	$ (110,613)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Common Stock, Dividends, Per Share, Declared	$ 0.78	$ 0.68	$ 0.64

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Operating activities
Net income	$ 172,595	$ 96,787	$ 88,526
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan and lease losses	14,586	3,582	10,140
Depreciation and amortization	24,171	12,645	13,037
Stock-based compensation expense	6,219	5,446	5,354
Pension expense (income)	859	(628)	(1,153)
Net amortization (accretion) on investment securities	10,846	10,798	8,476
Net (gains) losses on sales of investments securities	161	(1,649)	(234)
Originations of loans held for sale	(157,771)	(157,796)	(232,526)
Net (gains) losses on sales of loans held for sale	(6,071)	(5,169)	(6,804)
Proceeds from sales of loans held for sale	167,374	163,300	246,829
Deferred income taxes	6,267	(4,488)	346
Life Insurance, Corporate or Bank Owned, Change in Value	5,454	3,792	186
Decrease (increase) in interest receivable	(3,808)	(5,707)	(1,456)
Decrease in indemnification asset	(1,900)	(10,117)	(5,613)
(Decrease) increase in interest payable	5,207	55	46
Decrease (increase) in other assets	34,360	(21,455)	(1,108)
(Decrease) increase in other liabilities	(10,043)	21,478	7,700
Net cash provided by (used in) operating activities	261,398	123,524	142,600
Investing activities
Proceeds from sales of investment securities available-for-sale	290,745	189,962	206,990
Proceeds from calls, paydowns and maturities of securities available-for-sale	387,351	224,690	186,132
Purchases of securities available-for-sale	(852,131)	(723,131)	(396,984)
Proceeds from Sale of Held-to-maturity Securities	0	0	4,862
Proceeds from calls, paydowns and maturities of securities held-to-maturity	36,671	121,903	127,021
Purchases of securities held-to-maturity	(14,014)	(23,402)	(11,196)
Purchases of other investment securities	(31,385)	(2,353)	(4,239)
Net decrease (increase) in interest-bearing deposits with other banks	(3,764)	48,476	(48,716)
Net decrease (increase) in loans and leases	(28,577)	(266,043)	(376,848)
Proceeds from disposal of other real estate owned	3,797	6,983	9,356
Purchases of premises and equipment	(18,228)	(6,537)	(9,726)
Cash Acquired from Acquisition	64,895	0	0
Payments for (Proceeds from) Businesses and Interest in Affiliates	(41,197)	0	0
Net cash provided by (used in) investing activities	(205,837)	(429,452)	(313,348)
Financing activities
Net (decrease) increase in total deposits	(18,690)	369,258	346,164
Net (decrease) increase in short-term borrowings	30,531	6,653	(130,513)
Payments on long-term borrowings	(52,460)	(94)	(86)
Proceeds from FHLBank Borrowings, Financing Activities	150,000	0	0
Cash dividends paid on common stock	(79,655)	(41,178)	(39,125)
Proceeds from exercise of stock options	284	341	801
Excess tax benefit on share-based compensation	0	0	264
Net cash provided by (used in) financing activities	30,010	334,980	177,505
Cash and due from banks
Net (decrease) increase in Cash and due from banks	85,571	29,052	6,757
Cash and due from banks at beginning of year	150,650	121,598	114,841
Cash and due from banks at end of year	236,221	150,650	121,598
Supplemental disclosures
Interest paid	84,125	49,474	33,233
Income taxes paid	16,004	38,329	37,566
Real Estate Owned, Transfer to Real Estate Owned excluding acquired OREO	1,821
Acquisition of other real estate owned through foreclosure	3,182	4,119	2,872
Issuance of restricted stock awards	8,797	6,416	5,759
Securities transferred from AFS to HTM	372,128	0	0
Common stock issued in bank acquisitions	1,043,424	0	0
Supplemental schedule for investing activities
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Assets, Net Of Purchase Consideration	3,342,781	0	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	4,018,948	0	0
Goodwill	$ 676,167	$ 0	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Notes)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

BASIS OF PRESENTATION

Summary of Significant Accounting Policies

Basis of presentation. The Consolidated Financial Statements of First Financial Bancorp., a financial holding company, principally serving Ohio, Indiana, Kentucky and Illinois, 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 years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

Use of estimates. The preparation of Consolidated 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. Actual realized amounts could differ materially from those estimates.

Cash and due from banks.Cash and due from banks consist of currency, coin and cash items due from banks. Cash items due from banks include noninterest bearing deposits held at other banks.

Investment securities. First Financial classifies debt securities into three categories: HTM, trading and AFS. Management classifies investment securities into the appropriate category at the time of purchase and re-evaluates that classification as deemed appropriate.

Investment securities are classified as HTM when First Financial has the positive intent and ability to hold the securities to maturity. HTM securities are recorded at amortized cost.

Investment securities classified as trading are held principally for resale in the near-term and are recorded at fair value. Fair value is determined using quoted market prices. Gains or losses on trading securities, both realized and unrealized, are reported in noninterest income.

Investment securities not classified as either HTM or trading are classified as AFS. AFS securities are recorded at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.

The amortized cost of investment securities classified as either HTM or AFS is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated life of the security. Such amortization and accretion are considered an adjustment to the yield on the security and included in interest income from investments. Interest and dividends are included in interest income from investment securities in the Consolidated Statements of Income.

Realized gains and losses are based on the amortized cost of the security sold using the specific identification method. AFS and HTM securities are reviewed quarterly for potential impairment. In performing this review, management considers the length of time and extent to which the fair value of the security has been less than amortized cost, the financial condition and near-term prospects of the issuer and the ability and intent of First Financial to hold the security for a period sufficient to allow for any anticipated recovery in fair value. If the fair value of a security is less than the amortized cost and the impairment is determined to be other-than-temporary, the security is written down, establishing a new and reduced cost basis. The related charge is recorded in the Consolidated Statements of Income.

Other investments. Other investments include holdings in FRB stock and FHLB stock, which are both carried at cost, as well as equity securities which are carried at fair value. Changes in the fair value of equity securities are recorded Other noninterest income in the Consolidated Statements of Income.

Loans held for sale. Loans held for sale consist of residential real estate loans newly originated for the purpose of sale to third parties, and in certain circumstances, loans previously originated that have been specifically identified by management for sale based on predetermined criteria. Loans originated to held for sale status are carried at fair value. Any subsequent change in the carrying value of transferred loans, not to exceed original cost, is recorded in the Consolidated Statements of Income. First Financial sells loans with servicing retained or released depending on pricing and market conditions.  

Loans and leases. Loans and leases for which First Financial has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. Loans and leases are carried at the principal amount outstanding, net of unamortized deferred loan origination fees and costs, and net of unearned income. Loan origination and commitment fees received, as well as certain direct loan origination costs paid, are deferred, and the net amount is amortized as an adjustment to the related loan's yield.

Interest income on loans and leases is recorded on an accrual basis. 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 classified as nonaccrual are applied as a reduction to the carrying value of the loan. A loan may return to accrual status if collection of future principal and interest payments is no longer doubtful.

Acquired loans. Acquired loans are recorded at their estimated fair value at the time of acquisition. Estimated fair values for acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, interest rate, term of loan, whether or not the loan was amortizing and a discount rate reflecting the Company's assessment of risk inherent in the cash flow estimates. Acquired loans are grouped together according to similar characteristics and treated in the aggregate when applying various valuation techniques.

First Financial evaluates acquired loans for impairment in accordance with the provisions of FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Acquired loans with evidence of credit deterioration since origination are accounted for under FASB ASC Topic 310-30 and are referred to as purchased impaired loans. Accretion of the difference between the carrying value of the loans and the expected cash flows (accretable difference) is recognized on purchased impaired loans through interest income.

Acquired loans outside of the scope of FASB ASC Topic 310-30 are accounted for under FASB ASC Topic 310-20, Receivables-Nonrefundable Fees and Costs. Discounts created when the loans were recorded at their estimated fair values at acquisition are amortized over the remaining term of the loan as an adjustment to the related loan's yield. The accrual of interest income is discontinued when the collection of a loan or interest, in whole or in part, is doubtful.

Allowance for loan and lease losses. For each reporting period, 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.

Management's determination of the adequacy of the ALLL is based on an assessment of the probable incurred loan and lease losses inherent in the portfolio given the conditions at the time. 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 through payments from the borrower or the liquidation of collateral.

Commercial loan and lease relationships greater than $250,000 that are considered impaired, or designated as a TDR, are evaluated to determine the need for a specific allowance based on the borrower's overall financial condition, resources, payment record, guarantor support and the realizable value of any collateral.

The allowance for non-impaired commercial loans and leases, as well as impaired commercial loan and lease relationships less than $250,000, includes a process of estimating the probable losses incurred in the portfolio by loan type, based on First Financial's internal system of credit risk ratings and historical loss data. These estimates may also be adjusted based upon trends in the values of the underlying collateral, delinquent and nonaccrual loans, prevailing economic conditions and changes in lending strategies, among other influencing factors.

Consumer loans are generally evaluated by loan type, as these loans exhibit homogeneous characteristics. The allowance for consumer loans, which includes residential real estate, installment, home equity, credit card loans and overdrafts, is established by estimating probable losses incurred in each particular category of consumer loans. The estimate of losses is primarily based on historical loss rates for each category and may be adjusted for trends in delinquent and nonaccrual loans, prevailing economic conditions and other significant influencing factors. Consumer loans greater than $250,000 classified as TDRs are individually evaluated to determine an appropriate allowance.

For purchased impaired loans, expected cash flows are re-estimated periodically with declines in gross expected cash flows recorded as provision expense during the period.

Reserve for unfunded commitments. First Financial maintains a reserve that it considers sufficient to absorb probable losses incurred in standby letters of credit and outstanding loan commitments. First Financial determines the adequacy of the reserve based upon an evaluation of the unfunded credit facilities, which includes consideration of historical commitment utilization experience, credit risk ratings and historical loss rates, consistent with the Company's ALLL methodology. The reserve for unfunded commitments is included in Accrued interest and other liabilities on the Consolidated Balance Sheets and adjustments are recorded in Other noninterest expense in the Consolidated Statements of Income.

Premises and equipment. Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are principally computed on the straight-line method over the estimated useful lives of the assets. Useful lives generally range from 10 to 40 years for building and building improvements; 3 to 10 years for furniture, fixtures and equipment; and 3 to 5 years for software, hardware and data handling equipment. Land improvements are depreciated over 20 years and leasehold improvements are depreciated over the lesser of the term of the respective lease or the useful life of the asset. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Maintenance and repairs are expensed as incurred.

Bank-owned life insurance. First Financial purchases life insurance policies on the lives of certain employees and is the owner and beneficiary of the policies. The Bank invests in these policies to provide an efficient form of funding for long-term retirement and other employee benefits costs. The policies are included within Accrued interest and other assets in the Consolidated Balance Sheets at each policy’s respective cash surrender value with changes recorded in Other noninterest income in the Consolidated Statements of Income.

Goodwill. Under accounting for business combinations, the net assets of entities acquired by First Financial are recorded at their estimated fair value at the date of acquisition. The excess cost of the acquisition over the fair value of net assets acquired is recorded as goodwill. Goodwill and intangible assets deemed to have indefinite lives, if any, are not amortized, but are subject to annual impairment tests. The Company is required to evaluate goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. First Financial performs its annual impairment test effective October 1, absent events or changes in circumstances that indicate the carrying value of goodwill may not be recoverable.

The Company’s goodwill is accounted for in a single reporting unit representing the consolidated entity. Fair value is estimated using the market capitalization of the Company as of the annual impairment testing date. First Financial also utilizes additional information and analyses to corroborate the use of the Company’s market capitalization as a proper indicator of fair value for purposes of the annual goodwill impairment test.

Core deposit intangibles. CDI represent the estimated value of acquired customer deposit relationships. CDI are recorded at fair value at the date of acquisition and are based on a discounted cash flow methodology that gives appropriate consideration to expected customer attrition rates, cost of the deposit base, reserve requirements and the net maintenance cost attributable to customer deposits. Core deposit intangibles are recorded in Other intangibles on the Consolidated Balance Sheets and are amortized on an accelerated basis over their estimated useful lives.

Other real estate owned. 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. OREO properties are recorded at fair value, less estimated disposal costs (net realizable value). Losses arising at the time of acquisition of such properties are charged against the ALLL. Management performs periodic valuations to assess the adequacy of recorded OREO balances and subsequent changes in the carrying value of OREO properties are recorded in the Consolidated Statements of Income. Improvements to OREO properties may be capitalized if the improvements contribute to the overall value of the property, but may not be capitalized in excess of the net realizable value of the property. When management disposes of an OREO property, any gains or losses realized at the time of disposal are reflected in the Consolidated Statements of Income.

Affordable housing projects. First Financial has investments in certain qualified affordable housing projects. These projects are indirect federal subsidies 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 properties to qualified tenants, resulting in 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.

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. The Company’s recorded investment in these entities is carried in Accrued interest and other assets on the Consolidated Balance Sheets.

Income taxes. First Financial and its subsidiaries file a consolidated federal income tax return. Each subsidiary provides for income taxes on a separate return basis, and remits to First Financial amounts determined to be currently payable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Interest and penalties on income tax assessments or income tax refunds are recognized as a component of noninterest expense in the Consolidated Statements of Income.

Pension. First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees. The measurement of the accrued benefit liability and the annual pension expense involves actuarial and economic assumptions, which include the discount rate, the expected return on plan assets and the rate of compensation increase.

Derivative instruments. First Financial accounts for its derivative financial instruments in accordance with FASB ASC Topic 815, Derivatives and Hedging. FASB ASC Topic 815 requires all derivative instruments to be carried at fair value on the balance sheet.

The accounting for changes in the fair value of derivatives is based on the intended use of the derivative and the resulting designation.  Derivatives used to hedge the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.  Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

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. Upon entering into an interest rate swap with a borrower, the Bank simultaneously enters into an offsetting swap agreement with an institutional counterparty, with substantially matching terms. These matched interest rate swap agreements generally involve the receipt by First Financial of floating rate amounts from the counterparties in exchange for payments to these counterparties by First Financial of fixed rate amounts received from commercial borrowers over the life of the agreements.

First Financial's matched interest rate swaps qualify as derivatives, but are not designated as hedging instruments. The net interest receivable or payable on matched interest rate swaps is accrued and recognized as an adjustment to interest income.  The fair values of client derivatives are included within Accrued interest and other assets and Accrued interest and other liabilities in the Consolidated Balance Sheets.

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 fair value of these agreements is recorded in the Consolidated Balance Sheets in Accrued interest and other liabilities.

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 and Loans held for sale. The fair value of these agreements is recorded in the Consolidated Balance Sheets in Accrued interest and other assets.

Stock-based compensation. First Financial grants stock-based awards, including restricted stock awards and options to purchase the Company’s common stock. Stock option grants are for a fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. Stock-based compensation expense is recognized in the Consolidated Statements of Income on a straight-line basis over the vesting period. As compensation expense is recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from exercise. At the time stock-based awards are exercised, canceled or expire, First Financial may be required to recognize an adjustment to tax expense.

Earnings per share. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding, unvested shares and dilutive common stock equivalents outstanding during the period. Common stock equivalents, which consist of common stock issuable under the assumed exercise of stock options granted under First Financial's stock-based compensation plans and the assumed conversion of common stock warrants, are calculated using the treasury stock method.

Segments and related information. While the Company monitors the operating results of its six lines of business, operations are managed and financial performance is evaluated on a consolidated basis. Accordingly, and consistent with prior years, all of the Company's operations are considered by management to be aggregated in one reportable operating segment.

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RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

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 16 – 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.

At adoption, First Financial reclassified $0.2 million of net unrealized gain on AFS equity securities from AOCI to Retained Earnings. Additionally, in accordance with the guidance, the Company measured the fair value of its financial instruments as of December 31, 2018 using an exit price notion. For further detail, see Note 21 – 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. First Financial plans to record a cumulative effect adjustment effective at the beginning of 2019 which will include approximately $62.5 million of lease assets and $68.1 million of related lease liabilities, but the adoption is not expected to have a material impact to net income.

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 AFS 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.

First Financial currently expects to recognize a one-time cumulative effect adjustment to the ALLL as of January 1, 2020. However, in April 2018, the federal banking regulators proposed transitional arrangements to permit banking organizations to phase in the day-one impact of the adoption of this standard on regulatory capital over a three year period. First Financial has formed an internal management committee and engaged a third party vendor to assist with the transition to the guidance set forth in this update. The committee is currently evaluating the impact of this update on First Financial’s Consolidated Financial Statements, but the ALLL is expected to increase upon adoption since the allowance will be required to cover the full expected life of the portfolio.  The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the loan and lease portfolio at the time of adoption.

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 updated its footnote presentation accordingly. This updated did not have a material impact on the Consolidated Financial Statements. For further detail, see Note 15 - Employee Benefit Plans in the Notes to 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 and may reclassify securities from HTM to AFS as a result.

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 is 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 this update.

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RESTRICTIONS ON CASH AND DIVIDENDS

12 Months Ended

Dec. 31, 2018

Subsidiaries [Member]

Restrictions on Subsidiary Dividends, Loans or Advances [Line Items]

Restrictions On Cash And Dividends [Text Block]

Restrictions on Cash and Dividends

First Financial is required by the FRB to hold cash in reserve against deposit liabilities when total reservable deposit liabilities exceed the regulatory exemption known as the reserve requirement. The reserve requirement is calculated based on a two-week average of daily net transaction account deposits as defined by the FRB and may be satisfied with average vault cash during the following two-week maintenance period. When vault cash is not sufficient to meet the reserve requirement, the remaining amount must be satisfied with average funds held at the FRB. First Financial's deposit at the FRB is recorded in Interest-bearing deposits with other banks on the Consolidated Balance Sheets. The average required reserve balances, based upon the average level of First Financial's transaction deposits were $85.9 million and $66.7 million for 2018 and 2017, respectively.

Dividends paid by First Financial to its shareholders are principally funded through dividends paid to the Company by its subsidiaries, however, certain restrictions exist regarding the ability of the Bank to transfer funds to First Financial in the form of cash dividends, loans or advances. The approval of the Federal Reserve Board and the ODFI is required for the Bank to pay dividends in excess of the regulatory limit, which is equal to the net income of the current year through the dividend date combined with the Bank's retained net income from the two preceding years. As of December 31, 2018, First Financial's subsidiaries had retained earnings of $637.2 million, of which $181.3 million was available for distribution to First Financial without prior regulatory approval.

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INVESTMENTS

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

Investment Securities

The following is a summary of HTM and AFS investment securities as of December 31, 2018:

	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	$	99	$	0	$	(2	)	$	97
Securities of U.S. government agencies and corporations	0		0		0			0		32,095		57		(233		)	31,919
Mortgage-backed securities - residential	25,565		0		(1,045		)	24,520		565,071		691		(7,163		)	558,599
Mortgage-backed securities - commercial	147,780		258		(4,385		)	143,653		423,797		819		(3,581		)	421,035
Collateralized mortgage obligations	12,540		0		(633		)	11,907		928,586		4,319		(6,158		)	926,747
Obligations of state and other political subdivisions	243,443		1,954		(1,359		)	244,038		257,300		2,554		(1,429		)	258,425
Asset-backed securities	0		0		0			0		511,430		611		(2,810		)	509,231
Other securities	0		0		0			0		73,948		358		(1,104		)	73,202
Total	$	429,328	$	2,212	$	(7,422	)	$	424,118	$	2,792,326	$	9,409	$	(22,480	)	$	2,779,255

The following is a summary of HTM and AFS investment securities as of December 31, 2017:

	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	$	98	$	0	$	(1	)	$	97
Securities of U.S. government agencies and corporations	11,168		0		(76		)	11,092		15,695		220		0			15,915
Mortgage-backed securities - residential	162,093		2,042		(1,535		)	162,600		290,793		849		(2,599		)	289,043
Mortgage-backed securities - commercial	255,027		1,372		(3,000		)	253,399		150,356		164		(1,417		)	149,103
Collateralized mortgage obligations	143,545		354		(1,602		)	142,297		306,095		1,158		(1,861		)	305,392
Obligations of state and other political subdivisions	82,175		1,804		(266		)	83,713		124,269		2,162		(676		)	125,755
Asset-backed securities	0		0		0			0		377,655		1,628		(306		)	378,977
Other securities	0		0		0			0		83,266		2,147		(287		)	85,126
Total	$	654,008	$	5,572	$	(6,479	)	$	653,101	$	1,348,227	$	8,328	$	(7,147	)	$	1,349,408

During the year ended December 31, 2018, proceeds on the sale of $290.7 million of AFS securities resulted in gains of $0.5 million and losses of $0.6 million, with insignificant tax expense. During the year ended December 31, 2017, proceeds on the sale of $190.0 million of AFS securities resulted in gains of $1.8 million and losses of $0.2 million and tax expense of $0.6 million. During the year ended December 31, 2016, proceeds on the sale of $207.0 million of AFS securities resulted in gains of $1.2 million and losses of $1.0 million and tax expense of $0.1 million. In addition to the sale of certain securities, First Financial reclassified$372.1 millionof HTM securities toAFSto align with post-merger investment strategies during the second quarter 2018.

The carrying value of investment securities pledged as collateral to secure public deposits, repurchase agreements and for other purposes as required by law totaled $1.2 billion at December 31, 2018 and $0.8 billion at December 31, 2017.

The following table provides a summary of investment securities by contractual maturity as of December 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:

	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	0	$	0	$	5,972	$	5,977
Due after one year through five years	275		279		63,995		64,040
Due after five years through ten years	21,110		21,374		133,360		133,594
Due after ten years	222,058		222,385		160,115		160,032
Mortgage-backed securities - residential	25,565		24,520		565,071		558,599
Mortgage-backed securities - commercial	147,780		143,653		423,797		421,035
Collateralized mortgage obligations	12,540		11,907		928,586		926,747
Asset-backed securities	0		0		511,430		509,231
Total	$	429,328	$	424,118	$	2,792,326	$	2,779,255

Unrealized gains and losses on debt securities are generally due to fluctuations in current market yields relative to the yields of the 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, in addition to 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 December 31, 2018 or 2017.

As of December 31, 2018, the Company's investment securities portfolio consisted of 1,417 securities, of which 504 securities 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:

	December 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	$	0	$	0		$	97	$	(2	)	$	97	$	(2	)
Securities of U.S. government agencies and corporations	0		0			16,777		(233		)	16,777		(233		)
Mortgage-backed securities - residential	186,029		(935		)	264,795		(7,273		)	450,824		(8,208		)
Mortgage-backed securities - commercial	147,754		(369		)	232,363		(7,597		)	380,117		(7,966		)
Collateralized mortgage obligations	194,795		(1,546		)	240,514		(5,245		)	435,309		(6,791		)
Obligations of state and other political subdivisions	62,805		(299		)	86,644		(2,489		)	149,449		(2,788		)
Asset-backed securities	336,437		(2,312		)	37,105		(498		)	373,542		(2,810		)
Other securities	33,752		(884		)	4,570		(220		)	38,322		(1,104		)
Total	$	961,572	$	(6,345	)	$	882,865	$	(23,557	)	$	1,844,437	$	(29,902	)

	December 31, 2017
	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	$	97	$	(1	)	$	0	$	0		$	97	$	(1	)
Securities of U.S. Government agencies and corporations	11,092		(76		)	0		0			11,092		(76		)
Mortgage-backed securities - residential	175,183		(1,109		)	108,782		(3,025		)	283,965		(4,134		)
Mortgage-backed securities - commercial	132,818		(1,713		)	72,139		(2,704		)	204,957		(4,417		)
Collateralized mortgage obligations	164,909		(1,138		)	101,436		(2,325		)	266,345		(3,463		)
Obligations of state and other political subdivisions	38,450		(507		)	21,639		(435		)	60,089		(942		)
Asset-backed securities	44,941		(200		)	24,396		(106		)	69,337		(306		)
Other securities	2,605		(1		)	7,124		(286		)	9,729		(287		)
Total	$	570,095	$	(4,745	)	$	335,516	$	(8,881	)	$	905,611	$	(13,626	)

For further detail on the fair value of investment securities, see Note 21 – Fair Value Disclosures.

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LOANS

12 Months Ended

Dec. 31, 2018

Loans [Abstract]

LOANS (excluding covered loans)

Loans and Leases

First Financial offers clients a variety of commercial and consumer loan and lease products with various interest rates and payment terms. Commercial loan categories include C&I, CRE, 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, Kentucky and Illinois). 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 primarily to insurance agents and brokers that are secured by commissions and cash collateral accounts.

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 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 of 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 as 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 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:

	As of December 31, 2018
			Real Estate
(Dollars in thousands)	Commercial & industrial		Construction		Commercial		Lease financing		Total
Pass	$	2,432,834	$	548,323	$	3,664,434	$	90,902	$	6,736,493
Special Mention	24,594		603		38,653		0		63,850
Substandard	57,233		9		51,594		2,513		111,349
Doubtful	0		0		0		0		0
Total	$	2,514,661	$	548,935	$	3,754,681	$	93,415	$	6,911,692

	Residential real estate		Home Equity		Installment		Credit card		Total
Performing	$	939,936	$	811,108	$	93,038	$	46,382	$	1,890,464
Nonperforming	15,710		6,174		174		0		22,058
Total	$	955,646	$	817,282	$	93,212	$	46,382	$	1,912,522

	As of December 31, 2017
			Real Estate
(Dollars in thousands)	Commercial & industrial		Construction		Commercial		Lease financing		Total
Pass	$	1,882,464	$	467,687	$	2,446,999	$	88,078	$	4,885,228
Special Mention	6,226		0		4,436		0		10,662
Substandard	24,053		43		38,656		1,269		64,021
Doubtful	0		0		0		0		0
Total	$	1,912,743	$	467,730	$	2,490,091	$	89,347	$	4,959,911

	Residential real estate		Home equity		Installment		Credit card		Total
Performing	$	463,459	$	489,148	$	41,331	$	46,691	$	1,040,629
Nonperforming	7,932		4,456		255		0		12,643
Total	$	471,391	$	493,604	$	41,586	$	46,691	$	1,053,272

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 due date of the scheduled payment.

Loan delinquency, including nonaccrual loans, was as follows:

	As of December 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	$	13,369	$	41	$	7,423	$	20,833	$	2,488,450	$	2,509,283	$	5,378	$	2,514,661	$	0
Lease financing	352		0		0		352		93,063		93,415		0		93,415		0
Construction real estate	0		0		0		0		548,687		548,687		248		548,935		0
Commercial real estate	6,279		1,158		12,644		20,081		3,682,455		3,702,536		52,145		3,754,681		0
Residential real estate	11,060		2,976		4,535		18,571		902,404		920,975		34,671		955,646		0
Home equity	5,245		1,228		2,578		9,051		804,835		813,886		3,396		817,282		0
Installment	420		37		145		602		92,128		92,730		482		93,212		0
Credit card	541		96		63		700		45,682		46,382		0		46,382		63
Total	$	37,266	$	5,536	$	27,388	$	70,190	$	8,657,704	$	8,727,894	$	96,320	$	8,824,214	$	63

	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	$	755	$	1,657	$	5,078	$	7,490	$	1,901,821	$	1,909,311	$	3,432	$	1,912,743	$	0
Lease financing	485		0		0		485		88,862		89,347		0		89,347		0
Construction real estate	234		0		0		234		467,216		467,450		280		467,730		0
Commercial real estate	1,716		201		8,777		10,694		2,419,969		2,430,663		59,428		2,490,091		0
Residential real estate	526		811		1,992		3,329		430,500		433,829		37,562		471,391		0
Home equity	2,716		394		1,753		4,863		485,127		489,990		3,614		493,604		0
Installment	179		29		205		413		40,529		40,942		644		41,586		0
Credit card	285		87		62		434		46,257		46,691		0		46,691		62
Total	$	6,896	$	3,179	$	17,867	$	27,942	$	5,880,281	$	5,908,223	$	104,960	$	6,013,183	$	62

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 none of the principal and interest is due and unpaid, and the Bank expects repayment of the remaining contractual principal and interest.

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 196 TDRs totaling $38.5 million at December 31, 2018, including $16.1 million of loans on accrual status and $22.4 million of loans classified as nonaccrual. First Financial had no commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs, and the ALLL included reserves of $1.5 million related to TDRs as of December 31, 2018. For the years ended December 31, 2018, 2017 and 2016, First Financial charged off $0.9 million, $0.3 million and $0.5 million, respectively, for the portion of TDRs determined to be uncollectible. Additionally, as of December 31, 2018, approximately $7.9 million of the 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 of loans 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. 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.

First Financial had 247 TDRs totaling $35.4 million at December 31, 2016, including $30.2 million of loans on accrual status and $5.1 million of loans classified as nonaccrual. First Financial had $0.9 million of commitments outstanding to lend additional funds to borrowers whose loan terms have been modified through TDRs. At December 31, 2016, the ALLL included reserves of $1.9 million related to TDRs, and $22.6 million of the accruing TDRs had been performing in accordance with the restructured terms for more than one year.

The following table provides information on loan modifications classified as TDRs during the years ended December 31, 2018, 2017 and 2016:

	Years ended December 31,
	2018					2017					2016
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial & industrial	17	$	23,943	$	23,890	7	$	5,724	$	5,661	18	$	3,402	$	3,508
Construction real estate	0	0		0		0	0		0		0	0		0
Commercial real estate	8	3,385		3,150		8	1,816		1,758		16	5,200		4,752
Residential real estate	13	1,148		1,073		6	416		315		5	840		787
Home equity	5	95		192		1	39		39		5	165		156
Installment	0	0		0		0	0		0		3	9		9
Total	43	$	28,571	$	28,305	22	$	7,995	$	7,773	47	$	9,616	$	9,212

The following table provides information on how TDRs were modified during the years ended December 31, 2018, 2017 and 2016:

	Years Ended December 31,
(Dollars in thousands)	2018		2017		2016
Extended maturities	$	4,093	$	3,261	$	2,571
Adjusted interest rates	52		2,767		0
Combination of rate and maturity changes	0		489		3,046
Forbearance	23,175		1,181		88
Other (1)	985		75		3,507
Total	$	28,305	$	7,773	$	9,212

⁽¹⁾Other 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.

For the twelve months ended December 31, 2018, there was one TDR with an insignificant balance for which there was a payment default during the period that occurred within twelve months of the loan modification. For the twelve months ended December 31, 2017 and 2016, there was one TDR and four TDRs, respectively, with balances of $1.5 million and $0.3 million, respectively, for which there was a payment default during the period that occurred within twelve months of the loan modification.

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, as of December 31:

(Dollars in thousands)	2018		2017		2016
Impaired loans
Nonaccrual loans (1)
Commercial & industrial	$	30,925	$	5,229	$	2,419
Lease financing	22		82		195
Construction real estate	9		29		0
Commercial real estate	20,500		10,616		6,098
Residential real estate	13,495		4,140		5,251
Home equity	5,580		3,743		3,400
Installment	169		243		367
Total nonaccrual loans	70,700		24,082		17,730
Accruing troubled debt restructurings	16,109		17,545		30,240
Total impaired loans	$	86,809	$	41,627	$	47,970
Interest income effect
Gross amount of interest that would have been recorded under original terms	$	4,656	$	3,397	$	2,848
Interest included in income
Nonaccrual loans	715		535		375
Troubled debt restructurings	642		710		876
Total interest included in income	1,357		1,245		1,251
Net impact on interest income	$	3,299	$	2,152	$	1,597
Commitments outstanding to borrowers with nonaccrual loans	$	200	$	0	$	0

⁽¹⁾Nonaccrual loans include nonaccrual TDRs of $22.4 million, $6.4 million and $5.1 million as of December 31, 2018, 2017 and 2016, respectively.

First Financial individually reviews all impaired commercial loan relationships greater than $250,000, 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, resources, and 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, excluding purchased impaired loans, is as follows:

	December 31, 2018						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	$	36,694	$	42,561	$	0	$	7,162	$	8,460	$	0
Lease financing	22		22		0		82		82		0
Construction real estate	9		26		0		29		60		0
Commercial real estate	23,513		31,375		0		18,423		20,837		0
Residential real estate	17,297		19,975		0		6,876		8,145		0
Home equity	6,351		7,461		0		4,356		5,399		0
Installment	174		563		0		255		422		0
Total	84,060		101,983		0		37,183		43,405		0
Loans with an allowance recorded
Commercial & industrial	939		939		667		169		169		169
Lease financing	0		0		0		0		0		0
Construction real estate	0		0		0		0		0		0
Commercial real estate	1,509		1,509		461		3,119		3,120		448
Residential real estate	301		301		32		1,056		1,063		160
Home equity	0		0		0		100		100		2
Installment	0		0		0		0		0		0
Total	2,749		2,749		1,160		4,444		4,452		779
Total
Commercial & industrial	37,633		43,500		667		7,331		8,629		169
Lease financing	22		22		0		82		82		0
Construction real estate	9		26		0		29		60		0
Commercial real estate	25,022		32,884		461		21,542		23,957		448
Residential real estate	17,598		20,276		32		7,932		9,208		160
Home equity	6,351		7,461		0		4,456		5,499		2
Installment	174		563		0		255		422		0
Total	$	86,809	$	104,732	$	1,160	$	41,627	$	47,857	$	779

	Years ended December 31,
	2018				2017				2016
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized		Average balance		Interest income recognized
Loans with no related allowance recorded
Commercial & industrial	$	14,498	$	360	$	13,167	$	280	$	13,619	$	309
Lease financing	21		0		112		4		150		3
Construction real estate	20		2		601		1		0		0
Commercial real estate	24,738		490		20,935		563		14,252		357
Residential real estate	11,359		301		7,616		196		7,752		199
Home equity	5,541		114		4,032		99		4,830		86
Installment	274		2		332		4		366		7
Total	56,451		1,269		46,795		1,147		40,969		961
Loans with an allowance recorded
Commercial & industrial	900		44		1,204		28		1,098		37
Lease financing	0		0		0		0		214		8
Construction real estate	0		0		0		0		0		0
Commercial real estate	1,402		18		2,634		40		7,792		211
Residential real estate	895		23		1,112		26		1,374		30
Home equity	80		3		101		4		101		4
Installment	0		0		0		0		0		0
Total	3,277		88		5,051		98		10,579		290
Total
Commercial & industrial	15,398		404		14,371		308		14,717		346
Lease financing	21		0		112		4		364		11
Construction real estate	20		2		601		1		0		0
Commercial real estate	26,140		508		23,569		603		22,044		568
Residential real estate	12,254		324		8,728		222		9,126		229
Home equity	5,621		117		4,133		103		4,931		90
Installment	274		2		332		4		366		7
Total	$	59,728	$	1,357	$	51,846	$	1,245	$	51,548	$	1,251

OREO. OREO is comprised of properties acquired by the Company primarily through the loan foreclosure or repossession process, or other resolution activities that result in partial or total satisfaction of problem loans.

Changes in OREO were as follows:

	Years ended December 31,
(Dollars in thousands)	2018			2017			2016
Balance at beginning of year	$	2,781		$	6,284		$	13,254
Additions
Commercial	1,269			1,732			1,850
Residential	1,913			2,387			1,022
Total additions	3,182			4,119			2,872
Disposals
Commercial	(2,967		)	(5,409		)	(6,993		)
Residential	(830		)	(1,574		)	(2,363		)
Total disposals	(3,797		)	(6,983		)	(9,356		)
Valuation adjustments
Commercial	(355		)	(439		)	(345		)
Residential	(410		)	(200		)	(141		)
Total valuation adjustments	(765		)	(639		)	(486		)
Balance at end of year	$	1,401		$	2,781		$	6,284

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ALLOWANCE FOR LOAN AND LEASE LOSSES

12 Months Ended

Dec. 31, 2018

Receivables [Abstract]

ALLOWANCE FOR LOAN AND LEASE LOSSES

Allowance for Loan and Lease Losses

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. For further discussion of First Financial's allowance methodology, see Note 1 – Summary of Significant Accounting Policies.

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 ALLL by loan category as of December 31 were as follows:

	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 year	$	17,598		$	675	$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021
Provision for loan and lease losses	10,615			454		(310		)	847			492			829			(85		)	1,744			14,586
Gross charge-offs	(11,533		)	0		0			(4,835		)	(422		)	(1,725		)	(435		)	(1,720		)	(20,670		)
Recoveries	2,066			1		146			4,106			211			1,309			575			191			8,605
Total net charge-offs	(9,467		)	1		146			(729		)	(211		)	(416		)	140			(1,529		)	(12,065		)
Ending allowance for loan and lease losses	$	18,746		$	1,130	$	3,413		$	21,048		$	4,964		$	5,348		$	362		$	1,531		$	56,542

	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 year	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961
Provision for loan and lease losses	6,917			(42		)	207			(7,291		)	1,695			1,778			(90		)	408			3,582
Gross charge-offs	(10,194		)	0			(1		)	(1,038		)	(435		)	(913		)	(225		)	(857		)	(13,663		)
Recoveries	1,650			1			89			2,719			215			1,027			234			206			6,141
Total net charge-offs	(8,544		)	1			88			1,681			(220		)	114			9			(651		)	(7,522		)
Ending allowance for loan and lease losses	$	17,598		$	675		$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021

	2016
							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 year	$	16,995		$	821		$	1,810		$	23,656		$	4,014		$	3,943		$	386		$	1,773		$	53,398
Provision for loan and lease losses	3,705			(106		)	1,280			5,365			(655		)	(175		)	53			673			10,140
Gross charge-offs	(2,630		)	0			(93		)	(4,983		)	(387		)	(1,445		)	(386		)	(1,190		)	(11,114		)
Recoveries	1,155			1			285			2,502			236			720			335			303			5,537
Total net charge-offs	(1,475		)	1			192			(2,481		)	(151		)	(725		)	(51		)	(887		)	(5,577		)
Ending allowance for loan and lease losses	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961

The ALLL balance and the recorded investment in loans by portfolio segment and based on impairment method as of December 31 were as follows:

	December 31, 2018
					Real Estate
(Dollars in thousands)	Commercial & industrial		Lease financing		Construction		Commercial		Residential		Home equity		Installment		Credit card		Total
Ending allowance on loans individually evaluated for impairment	$	667	$	0	$	0	$	461	$	32	$	0	$	0	$	0	$	1,160
Ending allowance on loans collectively evaluated for impairment	18,079		1,130		3,413		20,587		4,932		5,348		362		1,531		55,382
Ending allowance for loan and lease losses	$	18,746	$	1,130	$	3,413	$	21,048	$	4,964	$	5,348	$	362	$	1,531	$	56,542
Loans and Leases
Ending balance of loans individually evaluated for impairment	$	37,633	$	22	$	9	$	25,022	$	17,598	$	6,351	$	174	$	0	$	86,809
Ending balance of loans collectively evaluated for impairment	2,477,028		93,393		548,926		3,729,659		938,048		810,931		93,038		46,382		8,737,405
Total loans	$	2,514,661	$	93,415	$	548,935	$	3,754,681	$	955,646	$	817,282	$	93,212	$	46,382	$	8,824,214

	December 31, 2017
					Real Estate
(Dollars in thousands)	Commercial & industrial		Lease financing		Construction		Commercial		Residential		Home equity		Installment		Credit card		Total
Ending allowance on loans individually evaluated for impairment	$	169	$	0	$	0	$	448	$	160	$	2	$	0	$	0	$	779
Ending allowance on loans collectively evaluated for impairment	17,429		675		3,577		20,482		4,523		4,933		307		1,316		53,242
Ending allowance for loan and lease losses	$	17,598	$	675	$	3,577	$	20,930	$	4,683	$	4,935	$	307	$	1,316	$	54,021
Loans and Leases
Ending balance of loans individually evaluated for impairment	$	7,331	$	82	$	29	$	21,542	$	7,932	$	4,456	$	255	$	0	$	41,627
Ending balance of loans collectively evaluated for impairment	1,905,412		89,265		467,701		2,468,549		463,459		489,148		41,331		46,691		5,971,556
Total loans	$	1,912,743	$	89,347	$	467,730	$	2,490,091	$	471,391	$	493,604	$	41,586	$	46,691	$	6,013,183

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PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

PREMISES AND EQUIPMENT

Premises and Equipment

Premises and equipment at December 31 were as follows:

(Dollars in thousands)	2018		2017
Land and land improvements	$	57,701	$	41,711
Buildings	161,817		104,576
Furniture and fixtures	66,567		55,165
Leasehold improvements	29,086		19,377
Construction in progress	5,731		1,721
	320,902		222,550
Less: Accumulated depreciation and amortization	105,250		97,514
Total	$	215,652	$	125,036

Rental expense recorded under operating leases in 2018, 2017 and 2016 was $9.1 million, $7.1 million and $7.9 million, respectively.

First Financial's future minimum lease payments for operating leases are as follows: 

(Dollars in thousands)
2019	$	9,568
2020	9,179
2021	8,284
2022	5,016
2023	4,269
Thereafter	15,496
Total	$	51,812

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GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 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.

Changes in the carrying amount of goodwill for the years ended December 31, 2018, 2017 and 2016 are shown below.

(Dollars in thousands)	2018		2017		2016
Balance at beginning of year	$	204,084	$	204,084	$	204,084
Goodwill resulting from business combinations	676,167		0		0
Balance at end of year	$	880,251	$	204,084	$	204,084

First Financial recorded additions to goodwill resulting from the merger with MSFG in 2018. During 2017 and 2016, no additions to goodwill were recorded.

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 annual impairment test of goodwill as of October 1, 2018 and no impairment was indicated.  As of December 31, 2018, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value.

Other intangible assets. As of December 31, 2018 and 2017, First Financial had $40.8 million and $3.8 million, respectively, of other intangible assets on the Consolidated Balance Sheets which primarily consist of CDI.  CDI represents the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized on an accelerated basis over their estimated useful lives. CDI was $37.9 million and $3.3 million as of December 31, 2018 and December 31, 2017, respectively, and First Financial recorded $41.7 million of additions to CDI in 2018, while no additions were recorded in 2017 or 2016. First Financial's CDI have an estimated weighted average remaining life of 8.9 years as of December 31, 2018.

Amortization expense recognized on intangible assets for 2018, 2017 and 2016 was $7.7 million, $1.3 million and $1.6 million, respectively. The estimated amortization expense of intangible assets for the next five years is as follows:

(Dollars in thousands)
2019	$	8,800
2020	7,010
2021	5,602
2022	3,417
2023	3,155

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DEPOSITS

12 Months Ended

Dec. 31, 2018

Deposits [Abstract]

Deposit Liabilities Disclosures [Text Block]

Deposits

Time deposits that meet or exceed the FDIC insurance limit of $250,000 at December 31, 2018 and 2017 were $284.9 million and $174.8 million, respectively.

Scheduled maturities of time deposits for the next five years were as follows:

(Dollars in thousands)
2019	$	1,407,996
2020	471,183
2021	163,575
2022	110,170
2023	20,112
Thereafter	528
Total	$	2,173,564

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BORROWINGS

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

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 agreed to by 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.

The following shows the remaining contractual maturity of repurchase agreements by collateral pledged:

(Dollars in thousands)	Overnight and Continuous
Repurchase agreements
Mortgage-backed securities	$	22,369
Collateralized mortgage obligations	62,222
Total	$	84,591

Securities sold under agreements to repurchase are secured by securities with a carrying amount of $85.5 million and $72.8 million, as of December 31, 2018 and 2017, respectively.

First Financial has a $30.0 million short-term credit facility with an unaffiliated bank that matures in September, 2019. 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 December 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 December 31, 2018 and December 31, 2017.

The following is a summary of short-term borrowings for the last three years:

	2018				2017				2016
(Dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
At December 31,
Federal funds purchased and securities sold under agreements to repurchase	$	183,591	1.65	%	$	72,265	0.19	%	$	120,212	0.12	%
FHLB borrowings	857,100		2.48	%	742,300		1.43	%	687,700		0.66	%
Total	$	1,040,691	2.33	%	$	814,565	1.32	%	$	807,912	0.58	%
Average for the year
Federal funds purchased and securities sold under agreements to repurchase	$	87,221	0.58	%	$	69,766	0.19	%	$	89,157	0.05	%
FHLB borrowings	857,028		2.03	%	760,558		1.05	%	791,259		0.55	%
Other short-term borrowings	3,178		4.36	%	41		4.07	%	41		3.56	%
Total	$	947,427	1.90	%	$	830,365	0.98	%	$	880,457	0.50	%
Maximum month-end balances
Federal funds purchased and securities sold under agreements to repurchase	$	183,591			$	130,633			$	122,242
FHLB borrowings	1,170,800				957,700				1,035,000
Other short-term borrowings	10,000				0				0

In 2015, First Financial issued $120.0 million of subordinated notes, which have a fixed interest rate of 5.13% payable semiannually and mature in August 2025. These notes are not redeemable by the Company or callable by the holders of the notes prior to maturity. In addition, First Financial acquired $49.5 million of variable rate subordinated notes in the MSFG merger that were issued to previously formed trusts in exchange for the trust proceeds. Interest on the acquired subordinated notes is payable quarterly, in arrears, and the Company has the option to defer interest payments for a period not to exceed 20 consecutive quarters. The acquired subordinated notes mature 30 years after the date of original issuance and may be called at par following the 5 year anniversary of issuance. First Financial also acquired $8.4 million of 7.40% fixed rate private placement subordinated debt in conjunction with the MSFG merger that was issued in 2015 and matures in 2025. These notes are redeemable by the Company at par following the 5 year anniversary of issuance. 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.

In addition to subordinated notes, long-term debt also includes FHLB long-term advances. These instruments are primarily utilized to reduce overnight liquidity risk and to mitigate interest rate sensitivity on the Consolidated Balance Sheets.

FHLB advances, both short-term and long-term, must be collateralized with qualifying assets, typically certain commercial and residential real estate loans, as well as certain government and agency securities. For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB, and at December 31, 2018, had collateral pledged with a book value of $5.7 billion.

The following is a summary of First Financial's long-term debt:

	2018					2017
(Dollars in thousands)	Amount			Average Rate		Amount			Average Rate
Subordinated debt	$	170,550		5.28	%	$	120,000		5.13	%
Unamortized debt issuance costs	(1,185		)	n/a		(1,362		)	n/a
FHLB	400,599			2.08	%	241			1.09	%
Capital loan with municipality	775			0.00	%	775			0.00	%
Total long-term debt	$	570,739		3.04	%	$	119,654		5.14	%

As of December 31, 2018, First Financial's long-term debt matures as follows:

(Dollars in thousands)
2019	$	157,914
2020	104,274
2021	19,007
2022	49,404
2023	0
Thereafter	240,140
Total	$	570,739

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DERIVATIVES

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

Derivatives

First Financial uses certain derivative instruments, including 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. For discussion of First Financial's accounting for derivative instruments, see Note 1 – Summary of Significant Accounting Policies.

First Financial primarily utilizes interest rate swaps as a means to offer borrowers credit-based products that meet their needs and 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 as 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 this 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.

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 location and amounts recognized in the Consolidated Balance Sheets for client derivatives:

		December 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
Matched interest rate swaps with borrower	Accrued interest and other assets and other liabilities	$	1,359,990	$	17,402	$	(11,787	)	$	837,040	$	7,153	$	(5,529	)
Matched interest rate swaps with counterparty	Accrued interest and other liabilities	1,359,990		11,787		(17,401		)	837,040		5,529		(7,158		)
Total		$	2,719,980	$	29,189	$	(29,188	)	$	1,674,080	$	12,682	$	(12,687	)

At December 31, 2018, the Company had a total counterparty notional amount outstanding of $1.4 billion, spread among thirteen counterparties, with an outstanding liability from these contracts of $4.9 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 Company's normal credit review processes. Additionally, the Company's ALLL committee monitors derivative credit risk exposure related to problem loans. 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.

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. 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:

	December 31, 2018							December 31, 2017
(Dollars in thousands)	Gross amounts of recognized liabilities		Gross amounts offset in the Consolidated Balance Sheets			Net amounts of liabilities presented in the Consolidated Balance Sheets		Gross amounts of recognized liabilities		Gross amounts offset in the Consolidated Balance Sheets		Net amounts of liabilities presented in the Consolidated Balance Sheets
Client derivatives
Matched interest rate swaps	$	29,189	$	(14,577	)	$	14,612	$	12,687	$	2,279	$	14,966

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 December 31, 2018:

							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	$	1,359,990	6.2	$	5,615		4.70	%	4.67	%
Pay fixed, matched interest rate swaps with counterparty	1,359,990		6.2	(5,614		)	4.67	%	4.70	%
Total client derivatives	$	2,719,980	6.2	$	1		4.68	%	4.68	%

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 $138.4 million as of December 31, 2018 and $95.9 million as of December 31, 2017. The fair value of these agreements were recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets was $0.1 million at both December 31, 2018 and December 31, 2017.

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 and loans held for sale. At December 31, 2018, the notional amount of the IRLCs was $20.8 million and the notional amount of forward commitments was $12.3 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 insignificant at December 31, 2018 and $0.1 million at December 31, 2017.

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RELATED PARTIES TRANSACTIONS

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Loans to Related Parties

Related Party Transactions

Loans to directors, executive officers, principal holders of First Financial’s common stock and certain related persons were as follows:

(Dollars in thousands)	2018
Beginning balance	$	9,873
Additions	2,108
Deductions	(9,249		)
Ending balance	$	2,732
Loans 90 days or more past due	$	0

Related parties of First Financial, as defined for inclusion in the table above, were clients of, and had transactions with, subsidiaries of First Financial during the periods noted. Similar transactions with related parties may be expected in future periods.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

First Financial offers a variety of financial instruments including 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 losses incurred in letters of credit and outstanding loan commitments and records the reserve within Accrued interest and other liabilities on the Consolidated Balance Sheets. First Financial had $0.7 million and $0.5 million of reserves for unfunded commitments recorded in Accrued interest and other liabilities on the Consolidated Balance Sheets as of December 31, 2018 and 2017, respectively.

Loan commitments. Loan commitments are agreements to extend credit to a client absent any violation of any condition 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 $3.0 billion and $2.1 billion at December 31, 2018 and 2017, respectively. As of December 31, 2018, loan commitments with a fixed interest rate totaled $174.0 million while commitments with variable interest rates totaled $2.9 billion. The fixed rate loan commitments have interest rates ranging from 0.00% to 21.00% for both December 31, 2018 and 2017. The fixed rate loan commitments have maturities ranging from 1 to 30 years for December 31, 2018 and 1 and 29 years for December 31, 2017.

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 has issued letters of credit aggregating $32.7 million and $25.3 million at December 31, 2018, and 2017, respectively. Management conducts regular reviews of these instruments on an individual client basis.

Investments in affordable housing projects. 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 $39.4 million and $35.9 million as of December 31, 2018 and 2017, respectively. The Company recognized tax credits of $4.9 million and $3.2 million related to its investments in affordable housing projects for the years ended December 31, 2018 and 2017, respectively. The Company recognized amortization expense which was included in income tax expense of $5.7 million and $4.2 million for the years ended December 31, 2018 and 2017, respectively. First Financial had no affordable housing contingent commitments as of December 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 included in Accrued interest and other assets on the Consolidated Balance Sheets. The Company’s recorded investment in these entities was approximately $3.9 million at December 31, 2018, and $3.0 million at December 31, 2017. The maximum exposure to loss related to these investments was $3.9 million at December 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 $0.5 million and $13.7 million of tax credits for the years ended December 31, 2018 and 2017, respectively. Recognition of a single historic tax credit investment resulted in a $12.5 million reduction in income tax expense and $11.3 million of other noninterest expenses during 2017.

Contingencies/Litigation. First Financial and its subsidiaries are engaged in various matters of litigation from time to time, and have a number of unresolved claims pending. Additionally, as part of the ordinary course of business, First Financial and its subsidiaries are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral and foreclosure interests, that is incidental to our regular business activities. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, First Financial believes that damages, if any, and other amounts relating to pending matters are not probable or cannot be reasonably estimated as of December 31, 2018. Reserves are established for these various matters of litigation, when appropriate, under FASB ASC Topic 450, Contingencies, based in part upon the advice of legal counsel. First Financial had no reserves related to litigation matters as of December 31, 2018 or December 31, 2017.

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INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

Income Taxes

Income tax expense consisted of the following components:

(Dollars in thousands)	2018		2017			2016
Current expense
Federal	$	34,330	$	22,599		$	40,537
State	1,029		1,265			1,322
Total current expense	35,359		23,864			41,859
Deferred expense (benefit)
Federal	4,675		(4,657		)	528
State	1,592		169			(182		)
Total deferred expense (benefit)	6,267		(4,488		)	346
Income tax expense	$	41,626	$	19,376		$	42,205

The difference between the federal income tax rates applied to income before income taxes, and the effective rates were due to the following:

(Dollars in thousands)	2018			2017			2016
Income taxes computed at federal statutory rate on income before income taxes (21% in 2018; 35% in 2017 and 2016)	$	44,986		$	40,657		$	45,756
Benefit from tax-exempt income	(4,499		)	(3,427		)	(2,911		)
Tax credits	(5,439		)	(16,806		)	(2,691		)
Tax rate reduction impact	0			(8,191		)	0
Basis reduction on historic tax credit	0			4,599			0
Tax benefit of equity compensation	(565		)	(1,449		)	(72		)
State income taxes, net of federal tax benefit	2,070			932			741
Affordable housing investments	4,725			2,798			1,923
Other	348			263			(541		)
Income tax expense	$	41,626		$	19,376		$	42,205

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. As a result, First Financial revalued its deferred tax assets and liabilities as well as its investments in affordable housing projects utilizing a 21% federal rate compared to a 35% rate in prior periods.

The major components of the temporary differences that gave rise to deferred tax assets and liabilities at December 31, 2018, and 2017, were as follows:

(Dollars in thousands)	2018			2017
Deferred tax assets
Allowance for loan and lease losses	$	12,782		$	12,134
Fair value adjustments on business combinations	11,199			369
Deferred compensation	392			384
Postretirement benefits other than pension liability	676			564
Accrued stock-based compensation	1,145			932
OREO write-downs	118			97
Interest on nonaccrual loans	1,160			616
Accrued expenses	5,808			3,051
Net unrealized losses on investment securities and derivatives	3,221			249
State net operating loss	3,119			0
Federal tax credit carryforwards	873			0
Other	425			339
Total deferred tax assets	40,918			18,735
Deferred tax liabilities
Tax depreciation in excess of book depreciation	(9,530		)	(2,510		)
FHLB and FRB stock	(4,044		)	(3,384		)
Mortgage-servicing rights	(2,285		)	(343		)
Leasing activities	(3,881		)	(2,792		)
Retirement obligation	(6,614		)	(8,888		)
Intangible assets	(12,310		)	(11,559		)
Deferred loan fees and costs	(131		)	(371		)
Prepaid expenses	(582		)	(210		)
Limited partnership investments	(2,367		)	(1,230		)
Other	(1,867		)	(2,415		)
Total deferred tax liabilities	(43,611		)	(33,702		)
Total net deferred tax liability	$	(2,693	)	$	(14,967	)

In conjunction with the MSFG merger, First Financial acquired $3.9 million of state net operating losses, which begin to expire in 2022. The Company expects to fully utilize these net operating losses and, therefore, a valuation allowance is not required at December 31, 2018. The Company also acquired $0.9 million of federal alternative minimum tax credit carryforwards in its merger with MSFG, which are expected to be fully utilized in 2019. The acquired MSFG state net operating loss and federal tax credits are subject to IRC Section 382 and are limited annually.

The realization of the Company’s deferred tax assets is dependent upon the Company’s ability to generate taxable income in future periods, the reversal of deferred tax liabilities during the same period and the ability to carry back any losses. The Company has evaluated the available evidence supporting the realization of its deferred tax assets and determined it is more likely than not that the assets will be realized and thus no valuation allowance was recorded at December 31, 2018 and 2017.

With the acquisition of Mainsource in 2018, the Bank’s retained earnings at December 31, 2018 included base-year bad debt reserves, created for tax purposes prior to 1988, of $16.1 million.  Base-year reserves are subject to recapture in the event the Bank redeems its stock, makes distributions in excess of current and accumulated earnings and profits (as calculated for federal income tax purposes), loses its “bank” status or liquidates.  The Bank has no intention of meeting any of the criteria for recapture.  Accordingly, a deferred income tax liability of $3.4 million has not be recorded.

At both December 31, 2018 and 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. A progression of unrecognized tax benefits as of December 31, 2018 and 2017 is as follows:

(Dollars in thousands)	2018		2017
Balance at beginning of year	$	3,735	$	3,735
Additions for tax positions of prior years	0		0
Balance at end of year	$	3,735	$	3,735

The unrecognized tax benefits relate to state income tax exposures where First Financial 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 December 31, 2018 and 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 2015 have been closed and are no longer subject to U.S. federal income tax examinations. Tax years 2015 through 2017 remain open to examination by the federal taxing authority.

First Financial is no longer subject to state and local income tax examinations for years prior to 2011. Tax years 2011 through 2017 remain open to state and local examination by various other jurisdictions.

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EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

Employee Benefit Plans

Pension plan. 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 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.

The investment objective of the Plan is to structure the assets to mirror the liabilities of the Plan, with the fixed income component matching the identified near and long-term plan distributions and the equity component generating growth of capital to meet other future Plan liabilities. The determination of the overall expected long-term return on plan assets was based on the composition of plan assets and a consensus of estimates from similarly managed portfolios of expected future returns.

As a result of the plan’s updated actuarial projections for 2018, First Financial recorded expense related to its pension plan of $0.9 million for 2018. During 2017 and 2016, First Financial recorded income of $0.6 million and $1.2 million, respectively. First Financial made no cash contributions to the pension plan in 2018, 2017 or 2016 and does not expect to make any contributions in 2019.

The following tables set forth information concerning amounts recognized in First Financial's Consolidated Balance Sheets and Consolidated Statements of Income related to the Company's pension plan:

	December 31,
(Dollars in thousands)	2018			2017
Change in benefit obligation
Benefit obligation at beginning of year	$	71,154		$	62,729
Service cost	6,501			4,894
Interest cost	2,394			2,325
Actuarial (gain) loss	(4,032		)	6,107
Benefits paid, excluding settlement	(7,731		)	(4,901		)
Benefit obligation at end of year	68,286			71,154
Change in plan assets
Fair value of plan assets at beginning of year	144,349			131,011
Actual return on plan assets	(6,540		)	18,239
Benefits paid, excluding settlement	(7,731		)	(4,901		)
Fair value of plan assets at end of year	130,078			144,349
Amounts recognized in the Consolidated Balance Sheets
Assets	61,792			73,195
Liabilities	0			0
Net amount recognized	$	61,792		$	73,195
Amounts recognized in accumulated other comprehensive income (loss)
Net actuarial loss	$	43,711		$	33,580
Net prior service cost	(1,508		)	(1,921		)
Deferred tax assets	(9,613		)	(12,028		)
Net amount recognized	$	32,590		$	19,631
Change in accumulated other comprehensive income (loss)	$	12,959		$	(3,172	)
Accumulated benefit obligation	$	66,320		$	69,678

Components of net periodic benefit cost
	December 31,
(Dollars in thousands)	2018			2017			2016
Service cost	$	6,501		$	4,894		$	5,034
Interest cost	2,394			2,325			2,262
Expected return on assets	(9,811		)	(9,358		)	(9,644		)
Amortization of prior service cost	(413		)	(413		)	(413		)
Recognized net actuarial loss	2,188			1,924			1,608
Net periodic benefit (income) cost	859			(628		)	(1,153		)
Other changes recognized in accumulated other comprehensive income (loss)
Net actuarial (gain) loss	12,319			(2,775		)	(884		)
Prior service cost	0			0			0
Amortization of prior service cost	413			413			413
Amortization of gain	(2,188		)	(1,924		)	(1,608		)
Total recognized in accumulated other comprehensive income (loss)	10,544			(4,286		)	(2,079		)
Total recognized in net periodic benefit cost and accumulated other comprehensive income (loss)	$	11,403		$	(4,914	)	$	(3,232	)
Amount expected to be recognized in net periodic pension expense in the coming year
Amortization of (gain) loss	$	1,867		$	2,090		$	1,754
Amortization of prior service credit	(413		)	(413		)	(413		)

Pension plan assumptions
	December 31,
	2018		2017		2016
Benefit obligations
Discount rate	4.31	%	3.43	%	3.88	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%
Net periodic benefit cost
Discount rate	3.43	%	3.88	%	4.05	%
Expected return on plan assets	7.25	%	7.25	%	7.50	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%

The fair value of the plan assets as of December 31, 2018 by asset category is shown in the table that follows:

	Fair Value Measurements
(Dollars in thousands)	Total		Quoted Prices in  Active Markets  for  Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash	$	216	$	216	$	0	$	0
U. S. Government agencies	8,053		0		8,053		0
Fixed income mutual funds	74,453		74,453		0		0
Equity mutual funds	47,356		47,356		0		0
Total	$	130,078	$	122,025	$	8,053	$	0

The fair value of the plan assets as of December 31, 2017 by asset category is shown in the table that follows:

	Fair Value Measurements
(Dollars in thousands)	Total		Quoted Prices in  Active Markets  for  Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash	$	175	$	175	$	0	$	0
U. S. Government agencies	6,853		0		6,853		0
Fixed income mutual funds	69,154		69,154		0		0
Equity mutual funds	68,167		68,167		0		0
Total	$	144,349	$	137,496	$	6,853	$	0

The level within the fair value hierarchy is based on the lowest level of input that is significant in the fair value measurement. See Note 21 – Fair Value Disclosures for further information related to the framework for measuring fair value and the fair value hierarchy.

The following benefit payments, which reflect expected future service, are expected to be paid:

(Dollars in thousands)
2019	$	4,396
2020	5,280
2021	5,229
2022	4,739
2023	4,917
Thereafter	29,948

401(k) plan. First Financial sponsors a defined contribution 401(k) plan which covers substantially all employees. Employees may contribute up to 50.0% of their earnings into the plan, not to exceed applicable limitations prescribed by the Internal Revenue Service. First Financial's contributions to the 401(k) plan are discretionary and vest immediately. First Financial measures the Company's performance compared to its identified peer group in determining whether to recommend a Company contribution, with the amount of the recommended contribution not to exceed 3% of the employee's annual earnings. First Financial recorded no expense related to the Company's contributions to the 401(k) plan during the year ended December 31, 2018. First Financial recorded $1.9 million and $0.8 million of expense related to the Company's contributions to the 401(k) plan during 2017 and 2016, respectively.

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REVENUE RECOGNITION REVENUE RECOGNITION (Notes)

12 Months Ended

Dec. 31, 2018

Revenue Recognition and Deferred Revenue [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, trust and wealth management fees, bankcard income, gain/loss on the sale of OREO and investment brokerage fees.

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 2018 was $31.3 million, which was partially offset by $11.0 million of expenses within Noninterest income.

Gain/loss 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.

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.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

12 Months Ended

Dec. 31, 2018

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 accumulated other comprehensive income (loss) are as follows:

	December 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			Cumulative effect of new standard			Ending balance
Unrealized gain (loss) on debt securities	$	(14,461	)	$	(161	)	$	(14,300	)	$	3,071		$	(11,229	)	$	(182	)	$	(11,229	)	$	(190	)	$	(11,601	)
Unrealized gain (loss) on derivatives	628			0			628			(144		)	484			(577		)	484			(124		)	(217		)
Retirement obligation	(12,319		)	(1,775		)	(10,544		)	2,364			(8,180		)	(19,631		)	(8,180		)	(4,779		)	(32,590		)
Total	$	(26,152	)	$	(1,936	)	$	(24,216	)	$	5,291		$	(18,925	)	$	(20,390	)	$	(18,925	)	$	(5,093	)	$	(44,408	)

	December 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 debt securities	$	8,447	$	1,649		$	6,798	$	(2,431	)	$	4,367	$	(4,549	)	$	4,367	$	(182	)
Unrealized gain (loss) on derivatives	810		0			810		(296		)	514		(1,091		)	514		(577		)
Retirement obligation	2,775		(1,511		)	4,286		(1,114		)	3,172		(22,803		)	3,172		(19,631		)
Total	$	12,032	$	138		$	11,894	$	(3,841	)	$	8,053	$	(28,443	)	$	8,053	$	(20,390	)

	December 31, 2016
	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 debt securities	$	751	$	234		$	517	$	(133	)	$	384	$	(4,933	)	$	384	$	(4,549	)
Unrealized gain (loss) on derivatives	809		0			809		(301		)	508		(1,599		)	508		(1,091		)
Retirement obligation	884		(1,195		)	2,079		(834		)	1,245		(24,048		)	1,245		(22,803		)
Total	$	2,444	$	(961	)	$	3,405	$	(1,268	)	$	2,137	$	(30,580	)	$	2,137	$	(28,443	)

The following table details the activity reclassified from accumulated other comprehensive income into income during the period:

	Amount Reclassified from Accumulated Other Comprehensive Income (1)
	December 31,
(Dollars in thousands)	2018			2017			2016			Affected Line Item in the Consolidated Statements of Income
Realized gains and losses on securities available-for-sale	$	(161	)	$	1,649		$	234		Net gain (loss) on sales of investment securities
Defined benefit pension plan
Amortization of prior service cost (2)	413			413			413			Other noninterest expense
Recognized net actuarial loss (2)	(2,188		)	(1,924		)	(1,608		)	Other noninterest expense
Amortization and settlement charges of defined benefit pension items	(1,775		)	(1,511		)	(1,195		)
Total reclassifications for the period, before tax	$	(1,936	)	$	138		$	(961	)

⁽¹⁾ Negative amounts are debits to profit/loss.

⁽²⁾ Included in the computation of net periodic pension cost (see Note 15 - Employee Benefit Plans for additional details).

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CAPITAL

12 Months Ended

Dec. 31, 2018

Banking and Thrift [Abstract]

CAPITAL

Capital

Risk-based capital. First Financial and its subsidiary, First Financial Bank, are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action.

The Board of Governors of the Federal Reserve System approved Basel III in order to strengthen the regulatory capital framework for all banking organizations, subject to a phase-in period for certain provisions.  Basel III established and defined quantitative measures to ensure capital adequacy. These measures require First Financial to maintain minimum amounts and ratios of Common Equity tier 1 capital, total and tier 1 capital to risk-weighted assets and tier 1 capital to average assets (leverage ratio).  

Basel III includes a minimum ratio of common equity tier 1 capital to risk-weighted assets of 6.375% at December 31, 2018, which includes a capital conservation buffer that began on January 1, 2016 at 0.625% and is phased in over a four-year period, increasing by the same amount each subsequent January 1, until fully phased-in at 2.5% of risk-weighted assets on January 1, 2019.  Further, the minimum ratio of tier 1 capital to risk-weighted assets increased to 7.875% at December 31, 2018 and all banks are subject to a 4.0% minimum leverage ratio.  The required total risk-based capital ratio is unchanged. Failure to maintain the required common equity Tier 1 capital conservation buffer will result in potential restrictions on a bank’s ability to pay dividends, repurchase stock and pay discretionary compensation to its employees. The capital requirements also provide strict eligibility criteria for regulatory capital instruments and change the method for calculating risk-weighted assets in an effort to better identify riskier assets, such as highly volatile commercial real estate and nonaccrual loans. As of December 31, 2018, management believes the Company and the Bank meet all capital adequacy requirements to which they are subject.

The following tables present the actual and required capital amounts and ratios as of December 31, 2018 and 2017 under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels based on the current phase-in provisions of the Basel III Capital Rules as well as the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered "well capitalized" are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules. All of First Financial's regulatory capital ratios exceeded the amounts necessary to be classified as “well capitalized,” and total regulatory capital exceeded the “minimum” requirement by $432.8 million on a consolidated basis at December 31, 2018.  

	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, 2018
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	1,215,613	11.87	%	$	652,874	6.375	%	N/A		N/A		$	716,881	7.00	%
First Financial Bank	1,279,492		12.50	%	652,590		6.375	%	$	665,386	6.50	%	716,570		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	1,257,366		12.28	%	806,491		7.875	%	N/A		N/A		870,499		8.50	%
First Financial Bank	1,279,596		12.50	%	806,141		7.875	%	$	818,937	8.00	%	870,120		8.50	%
Total capital to risk-weighted assets
Consolidated	1,444,146		14.10	%	1,011,314		9.875	%	N/A		N/A		1,075,322		10.50	%
First Financial Bank	1,344,388		13.13	%	1,010,875		9.875	%	1,023,671		10.00	%	1,074,855		10.50	%
Leverage
Consolidated	1,257,366		9.71	%	517,958		4.00	%	N/A		N/A		517,958		4.00	%
First Financial Bank	1,279,596		9.89	%	517,710		4.00	%	647,138		5.00	%	517,710		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	5.75	%	N/A		N/A		$	497,604	7.00	%
First Financial Bank	794,251		11.21	%	407,220		5.75	%	$	460,336	6.50	%	495,746		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	755,839		10.63	%	515,376		7.25	%	N/A		N/A		604,233		8.50	%
First Financial Bank	794,355		11.22	%	513,452		7.25	%	566,567		8.00	%	601,978		8.50	%
Total capital to risk-weighted assets
Consolidated	929,148		13.07	%	657,548		9.25	%	N/A		N/A		746,406		10.50	%
First Financial Bank	856,363		12.09	%	655,093		9.25	%	708,209		10.00	%	743,619		10.50	%
Leverage
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	%

Share repurchases. In October 2012, First Financial's board of directors approved a share repurchase plan under which the Company has the ability to repurchase up to 5,000,000 common shares. The Company did not repurchase any shares under this plan during 2016, 2017 or 2018. At December 31, 2018, 3,509,133 common shares remained available for purchase under this repurchase plan.

ATM Offering. In March 2017, First Financial initiated an "at-the-market" equity offering program to provide flexibility with respect to capital planning and to support future growth. First Financial was not active through the ATM program during the period.

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STOCK OPTIONS AND AWARDS

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK OPTIONS AND AWARDS

Stock Options and Awards

First Financial follows the provisions of FASB ASC Topic 718, Compensation-Stock Compensation, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation expense over the service period for all awards expected to vest. First Financial recorded share-based compensation expense of $6.2 million for the year ended December 31, 2018 and $5.4 million for the years ended December 31, 2017 and December 31, 2016, within salaries and employee benefits expense related to stock options and restricted stock awards. Total unrecognized compensation cost related to non-vested share-based compensation was $6.9 million at December 31, 2018 and is expected to be recognized over a weighted average period of 1.94 years.

As of December 31, 2018, First Financial had a single active stock-based compensation plan, the Amended and Restated 2012 Stock Plan, under which additional awards may be granted.

In May 2012, shareholders approved the First Financial Bancorp. 2012 Stock Plan. In May 2017, the shareholders amended and restated the 2012 Stock Plan as the First Financial Bancorp. Amended and Restated 2012 Stock Plan. At December 31, 2018, there were 1,877,079 shares available for issuance under the Amended and Restated 2012 Stock Plan.

In April 2018, in conjunction with the MSFG merger, First Financial assumed the existing MSFG options which were converted into 83,551 options to purchase First Financial common stock. The converted MSFG options remain subject to all of the terms and conditions of the plan and grant agreements under which the MSFG Stock Options were originally issued. The assumed options were exercisable at the time of the merger and remain outstanding for 10 years after the initial grant date with all options expiring at the end of the exercise period. At December 31, 2018, 62,410 options were outstanding under the Plan, all of which expire on or before February 3, 2024.

First Financial utilizes the Black-Scholes valuation model to determine the fair value of stock options granted. In addition to the stock option strike price, the Black-Scholes valuation model incorporates the following assumptions: the expected dividend yield based on historical dividend payouts; the expected stock price volatility based on the historical volatility of Company stock for a period approximating the expected life of the options; the risk-free rate based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option; and the expected option life represented by the period of time the options are expected to be outstanding, and is based on historical trends. No options were granted in 2018, 2017 or 2016.

Stock option activity for the year ended December 31, 2018, is summarized as follows:

(Dollars in thousands, except share and per share data)	Number of shares		Weighted average exercise price		Weighted average remaining contractual life	Aggregate intrinsic value
Outstanding at beginning of year	11,800		$	11.64
Granted	0		0.00
Assumed	83,551		8.54
Exercised	(32,941	)	8.62
Forfeited or expired	0		0.00
Outstanding at end of year	62,410		$	9.08	3.72	$	914
Exercisable at end of year	62,410		$	9.08	3.72	$	914

The intrinsic value of stock options is defined as the difference between the current market value and the exercise price. First Financial uses treasury shares purchased under the Company's share repurchase program to satisfy share-based exercises.

	2018		2017		2016
Total intrinsic value of options exercised	$	734	$	1,533	$	661
Cash received from exercises	$	284	$	341	$	801
Tax benefit from exercises	$	1,439	$	1,991	$	1,958

Restricted stock awards are recorded at fair value as of the grant date as a component of shareholders' equity and amortized on a straight-line basis to salaries and benefits expense over the specified vesting periods, which is currently three years for employees and one year for non-employee directors. The vesting of these awards for employees and non-employee directors may require a service period to be met, and certain awards may also require performance measures to be met.

Activity in restricted stock for the previous three years ended December 31 is summarized as follows:

	2018				2017				2016
	Number of shares		Weighted  average grant date fair value		Number of shares		Weighted  average grant date fair value		Number of shares		Weighted  average grant date fair value
Nonvested at beginning of year	468,372		$	21.63	648,817		$	17.82	643,641		$	17.21
Granted	303,930		28.94		234,529		27.36		317,695		18.13
Vested	(267,031	)	20.94		(307,825	)	18.12		(263,713	)	16.82
Forfeited	(42,825	)	26.38		(107,149	)	21.18		(48,806	)	17.37
Nonvested at end of year	462,446		$	26.39	468,372		$	21.63	648,817		$	17.82

The fair value of restricted stock is determined based on the number of shares granted and the quoted price of First Financial's common stock. The fair value of restricted stock vested during 2018, 2017 and 2016 was $5.6 million, $5.6 million and $4.4 million, respectively.

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EARNINGS PER COMMON SHARE

12 Months Ended

Dec. 31, 2018

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:

(Dollars in thousands, except share and per share data)	2018		2017		2016
Numerator
Net income	$	172,595	$	96,787	$	88,526
Denominator
Basic earnings per common share - weighted average shares	88,582,090		61,529,460		61,206,093
Effect of dilutive securities
Employee stock awards	514,680		581,329		729,335
Warrants	517,435		60,801		49,994
Diluted earnings per common share - adjusted weighted average shares	89,614,205		62,171,590		61,985,422
Earnings per share available to common shareholders
Basic	$	1.95	$	1.57	$	1.45
Diluted	$	1.93	$	1.56	$	1.43

First Financial had warrants outstanding to purchase the Company's common stock as of December 31, 2018. These warrants were acquired in the MSFG merger and represent the right to purchase 804,858 shares of First Financial's common stock at an exercise price of $10.62 per share and were exercised in January 2019. At December 31, 2017 and 2016, First Financial had warrants outstanding representing the right to purchase 104,200 shares and 114,678 shares of common stock at an exercise price of exercise price of $12.12 and expired on December 23, 2018.

Stock options and warrants with exercise prices greater than the average market price of the common shares were not included in the computation of net income per diluted share, as they would have been antidilutive.  Using the period end price, there were no antidilutive options at December 31, 2018, 2017, or 2016.

As of December 31, 2018, 2017, and 2016, First Financial was authorized to issue 10,000,000 preferred shares, however no preferred shares were issued or outstanding.

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FAIR VALUE DISCLOSURES

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

Fair Value Disclosures

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:

	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2018
Financial assets
Cash and short-term investments	$	273,959	$	273,959	$	273,959	$	0	$	0
Investment securities held-to-maturity	429,328		424,118		0		424,118		0
Other investments	115,660		N/A		N/A		N/A		N/A
Loans held for sale	4,372		4,372		0		4,372		0
Loans and leases, net of ALLL	8,767,672		8,662,868		0		0		8,662,868
Accrued interest receivable	41,816		41,816		0		13,819		27,997
Financial liabilities
Deposits
Noninterest-bearing	$	2,492,434	$	2,492,434	$	0	$	2,492,434	$	0
Interest-bearing demand	2,307,071		2,307,071		0		2,307,071		0
Savings	3,167,325		3,167,325		0		3,167,325		0
Time	2,173,564		2,146,645		0		2,146,645		0
Total deposits	10,140,394		10,113,475		0		10,113,475		0
Short-term borrowings	1,040,691		1,040,691		1,040,691		0		0
Long-term debt	570,739		557,933		0		557,933		0
Accrued interest payable	12,126		12,126		2,035		10,091		0

	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	$	184,624	$	184,624	$	184,624	$	0	$	0
Investment securities held-to-maturity	654,008		653,101		0		653,101		0
Other investments	53,140		N/A		N/A		N/A		N/A
Loans held for sale	11,502		11,502		0		11,502		0
Loans and leases, net of ALLL	5,959,162		6,006,656		0		0		6,006,656
Accrued interest receivable	24,496		24,496		0		8,265		16,231
Financial liabilities
Deposits
Noninterest-bearing	$	1,662,058	$	1,662,058	$	0	$	1,662,058	$	0
Interest-bearing demand	1,453,463		1,453,463		0		1,453,463		0
Savings	2,462,420		2,462,420		0		2,462,420		0
Time	1,317,105		1,306,674		0		1,306,674		0
Total deposits	6,895,046		6,884,615		0		6,884,615		0
Short-term borrowings	814,565		814,565		814,565		0		0
Long-term debt	119,654		117,908		0		117,908		0
Accrued interest payable	5,104		5,104		204		4,900		0

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 December 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 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:

	Fair Value Measurements Using						Assets/Liabilities
(Dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
December 31, 2018
Assets
Derivatives	$	0	$	29,543	$	0	$	29,543
Investment securities available-for-sale	97		2,779,158		0		2,779,255
Total	$	97	$	2,808,701	$	0	$	2,808,798
Liabilities
Derivatives	$	0	$	29,336	$	0	$	29,336

	Fair Value Measurements Using						Assets/Liabilities
(Dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
December 31, 2017
Assets
Derivatives	$	0	$	12,757	$	0	$	12,757
Investment securities available-for-sale	2,969		1,346,439		0		1,349,408
Total	$	2,969	$	1,359,196	$	0	$	1,362,165
Liabilities
Derivatives	$	0	$	12,755	$	0	$	12,755

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:

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2018
Assets
Impaired loans	$	0	$	0	$	1,320
OREO	0		0		1,089

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2017
Assets
Impaired loans	$	0	$	0	$	2,671
OREO	0		0		1,086

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BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

BUSINESS COMBINATIONS

Business Combination

On April 1, 2018, First Financial completed its acquisition of MainSource Financial Group, Inc. and its banking subsidiary, MainSource Bank. Therefore, results of MSFG have been included in the results of operations beginning on April 1, 2018. Under the terms of the merger agreement, shareholders of MSFG received 1.3875 common shares of First Financial common stock for each share of MSFG common stock, with cash paid in lieu of fractional shares. Including outstanding options and warrants to purchase MSFG common stock, the total purchase consideration was $1.1 billion and resulted in goodwill of $676.2 million. The goodwill arising from the acquisition largely reflected synergies and cost savings resulting from combining the operations of the companies. First Financial incurred $37.8 million of merger related expenses related to the acquisition of MSFG during the year ended December 31, 2018.

The acquisition is expected to provide additional revenue growth and diversification. The goodwill is not deductible for income tax purposes as the transaction was accounted for as a tax-free exchange. For further detail, see Note 8 – Goodwill and Other Intangible Assets.

The MainSource transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available.  The Company continues to finalize the fair values of loans, intangible assets and liabilities. As a result, the fair value adjustments are preliminary and may change as information becomes available. Fair value adjustments will be finalized no later than April 2019.

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value. As a condition of the merger, certain acquired assets and liabilities held for sale were divested subsequent to the closing of the merger. There was no gain or loss recorded in the Consolidated Statement of Income in conjunction with this divestiture.

(Dollars in thousands)	MainSource
Purchase consideration
Cash consideration	$	43
Stock consideration	1,043,424
Warrant consideration	14,460
Options consideration	1,577
Total purchase consideration	1,059,504
Assets acquired
Cash	71,688
Investment securities available-for-sale	900,935
Investment securities held-to-maturity	171,423
Other investments	28,763
Loans	2,792,740
Premises and equipment	98,381
Intangible assets	42,887
Other assets	167,693
Assets held for sale	127,775
Total assets acquired	4,402,285
Liabilities assumed
Deposits	3,264,038
Subordinated notes	49,027
FHLB advances	291,887
Other borrowings	205,620
Other liabilities	32,654
Liabilities held for sale	175,722
Total liabilities assumed	4,018,948
Net identifiable assets	383,337
Goodwill	$	676,167

The fair value of net assets acquired includes fair value adjustments to certain loans that were not considered impaired as of the acquisition date as the Company believes that all contractual cash flows will be collected. The fair value adjustments were determined using discounted cash flows. In conjunction with the MSFG merger, First Financial acquired non-impaired loans with a fair value and gross contractual amounts receivable of $2.8 billion and $2.9 billion on the date of acquisition.

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2017. The pro forma information includes adjustments for interest income on acquired loans, amortization of intangible assets arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, merger-related expenses incurred and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed date. The disclosures regarding the results of operations for MSFG subsequent to its acquisition date are omitted as this information is not practical to obtain.

	Twelve months ended
	December 31,
(Dollars in thousands, except per share data) (Unaudited)	2018		2017
Pro Forma Condensed Combined Income Statement Information
Net interest income	$	484,915	$	454,579
Net income	221,122		130,402
Basic earnings per share	$	2.27	$	1.34
Diluted earnings per share	$	2.25	$	1.33

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FIRST FINANCIAL BANCORP. (PARENT COMPANY ONLY) FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

First Financial Bancorp (Parent Company Only) Financial Information

Balance Sheets

	December 31,
(Dollars in thousands)	2018		2017
Assets
Cash	$	86,878	$	57,719
Investment securities, available for sale	694		442
Subordinated notes from subsidiaries	7,500		7,500
Investment in subsidiaries
Commercial banks	2,078,655		970,290
Nonbanks	7,194		0
Total investment in subsidiaries	2,085,849		970,290
Premises and equipment	1,361		1,378
Other assets	71,817		26,778
Total assets	$	2,254,099	$	1,064,107
Liabilities
Subordinated debentures	$	171,416	$	118,638
Dividends payable	465		10,965
Other liabilities	3,969		3,840
Total liabilities	175,850		133,443
Shareholders’ equity	2,078,249		930,664
Total liabilities and shareholders’ equity	$	2,254,099	$	1,064,107

Statements of Incomeand Comprehensive Income

	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Income
Interest income	$	23		$	6		$	48
Noninterest income	0			86			2,596
Dividends from subsidiaries	107,340			54,600			52,700
Total income	107,363			54,692			55,344
Expenses
Interest expense	8,798			6,152			6,151
Salaries and employee benefits	6,413			5,519			5,445
Miscellaneous professional services	5,130			970			711
Other	5,648			4,819			4,841
Total expenses	25,989			17,460			17,148
Income before income taxes and equity in undistributed net earnings of subsidiaries	81,374			37,232			38,196
Income tax expense (benefit)	(6,687		)	(7,080		)	(5,302		)
Equity in undistributed earnings (loss) of subsidiaries	84,534			52,475			45,028
Net income	$	172,595		$	96,787		$	88,526
Comprehensive income	$	153,670		$	104,840		$	90,663

Statements of Cash Flows

	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Operating activities
Net income	$	172,595		$	96,787		$	88,526
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed (earnings) loss of subsidiaries	(84,534		)	(52,475		)	(45,028		)
Depreciation and amortization	194			193			192
Stock-based compensation expense	6,219			5,446			5,354
Deferred income taxes	739			(360		)	584
(Decrease) increase in dividends payable	(10,500		)	579			135
Increase (decrease) in other liabilities	9,979			(889		)	(389		)
Decrease (increase) in other assets	16,346			(6,951		)	(9,065		)
Net cash provided by (used in) operating activities	111,038			42,330			40,309
Investing activities
Capital contributions to subsidiaries	(3,000		)	0			(53,000		)
Net cash acquired (paid) from business combinations	11,353			0			0
Proceeds from calls and maturities of investment securities	0			0			5,978
Purchases of investment securities	0			0			(333		)
Net cash (used in) provided by investing activities	8,353			0			(47,355		)
Financing activities
(Decrease) increase in short-term borrowings	(8,333		)	0			0
Cash dividends paid on common stock	(79,655		)	(41,178		)	(39,125		)
Proceeds from exercise of stock options, net of shares purchased	284			341			801
Excess tax benefit on share-based compensation	0			0			264
Other	(2,528		)	(3,059		)	(1,681		)
Net cash (used in) provided by financing activities	(90,232		)	(43,896		)	(39,741		)
Net increase (decrease) in cash	29,159			(1,566		)	(46,787		)
Cash at beginning of year	57,719			59,285			106,072
Cash at end of year	$	86,878		$	57,719		$	59,285

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

Basis of Presentation Policy

Basis of presentation. The Consolidated Financial Statements of First Financial Bancorp., a financial holding company, principally serving Ohio, Indiana, Kentucky and Illinois, 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 years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on net earnings.

Use of Estimates, Policy

Use of estimates. The preparation of Consolidated 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. Actual realized amounts could differ materially from those estimates.

Investment, Policy

Investment securities. First Financial classifies debt securities into three categories: HTM, trading and AFS. Management classifies investment securities into the appropriate category at the time of purchase and re-evaluates that classification as deemed appropriate.

Investment securities are classified as HTM when First Financial has the positive intent and ability to hold the securities to maturity. HTM securities are recorded at amortized cost.

Investment securities classified as trading are held principally for resale in the near-term and are recorded at fair value. Fair value is determined using quoted market prices. Gains or losses on trading securities, both realized and unrealized, are reported in noninterest income.

Investment securities not classified as either HTM or trading are classified as AFS. AFS securities are recorded at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.

The amortized cost of investment securities classified as either HTM or AFS is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated life of the security. Such amortization and accretion are considered an adjustment to the yield on the security and included in interest income from investments. Interest and dividends are included in interest income from investment securities in the Consolidated Statements of Income.

Realized gains and losses are based on the amortized cost of the security sold using the specific identification method. AFS and HTM securities are reviewed quarterly for potential impairment. In performing this review, management considers the length of time and extent to which the fair value of the security has been less than amortized cost, the financial condition and near-term prospects of the issuer and the ability and intent of First Financial to hold the security for a period sufficient to allow for any anticipated recovery in fair value. If the fair value of a security is less than the amortized cost and the impairment is determined to be other-than-temporary, the security is written down, establishing a new and reduced cost basis. The related charge is recorded in the Consolidated Statements of Income.

Other investments. Other investments include holdings in FRB stock and FHLB stock, which are both carried at cost, as well as equity securities which are carried at fair value. Changes in the fair value of equity securities are recorded Other noninterest income in the Consolidated Statements of Income.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

Loans held for sale. Loans held for sale consist of residential real estate loans newly originated for the purpose of sale to third parties, and in certain circumstances, loans previously originated that have been specifically identified by management for sale based on predetermined criteria. Loans originated to held for sale status are carried at fair value. Any subsequent change in the carrying value of transferred loans, not to exceed original cost, is recorded in the Consolidated Statements of Income. First Financial sells loans with servicing retained or released depending on pricing and market conditions.  

Finance, Loans and Leases Receivable, Policy

Loans and leases. Loans and leases for which First Financial has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. Loans and leases are carried at the principal amount outstanding, net of unamortized deferred loan origination fees and costs, and net of unearned income. Loan origination and commitment fees received, as well as certain direct loan origination costs paid, are deferred, and the net amount is amortized as an adjustment to the related loan's yield.

Interest income on loans and leases is recorded on an accrual basis. 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 classified as nonaccrual are applied as a reduction to the carrying value of the loan. A loan may return to accrual status if collection of future principal and interest payments is no longer doubtful.

Acquired loans. Acquired loans are recorded at their estimated fair value at the time of acquisition. Estimated fair values for acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, interest rate, term of loan, whether or not the loan was amortizing and a discount rate reflecting the Company's assessment of risk inherent in the cash flow estimates. Acquired loans are grouped together according to similar characteristics and treated in the aggregate when applying various valuation techniques.

First Financial evaluates acquired loans for impairment in accordance with the provisions of FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Acquired loans with evidence of credit deterioration since origination are accounted for under FASB ASC Topic 310-30 and are referred to as purchased impaired loans. Accretion of the difference between the carrying value of the loans and the expected cash flows (accretable difference) is recognized on purchased impaired loans through interest income.

Acquired loans outside of the scope of FASB ASC Topic 310-30 are accounted for under FASB ASC Topic 310-20, Receivables-Nonrefundable Fees and Costs. Discounts created when the loans were recorded at their estimated fair values at acquisition are amortized over the remaining term of the loan as an adjustment to the related loan's yield. The accrual of interest income is discontinued when the collection of a loan or interest, in whole or in part, is doubtful.

Loans and Leases Receivable, Allowance for Loan Losses Policy

Allowance for loan and lease losses. For each reporting period, 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.

Management's determination of the adequacy of the ALLL is based on an assessment of the probable incurred loan and lease losses inherent in the portfolio given the conditions at the time. 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 through payments from the borrower or the liquidation of collateral.

Commercial loan and lease relationships greater than $250,000 that are considered impaired, or designated as a TDR, are evaluated to determine the need for a specific allowance based on the borrower's overall financial condition, resources, payment record, guarantor support and the realizable value of any collateral.

The allowance for non-impaired commercial loans and leases, as well as impaired commercial loan and lease relationships less than $250,000, includes a process of estimating the probable losses incurred in the portfolio by loan type, based on First Financial's internal system of credit risk ratings and historical loss data. These estimates may also be adjusted based upon trends in the values of the underlying collateral, delinquent and nonaccrual loans, prevailing economic conditions and changes in lending strategies, among other influencing factors.

Consumer loans are generally evaluated by loan type, as these loans exhibit homogeneous characteristics. The allowance for consumer loans, which includes residential real estate, installment, home equity, credit card loans and overdrafts, is established by estimating probable losses incurred in each particular category of consumer loans. The estimate of losses is primarily based on historical loss rates for each category and may be adjusted for trends in delinquent and nonaccrual loans, prevailing economic conditions and other significant influencing factors. Consumer loans greater than $250,000 classified as TDRs are individually evaluated to determine an appropriate allowance.

For purchased impaired loans, expected cash flows are re-estimated periodically with declines in gross expected cash flows recorded as provision expense during the period.

Commitments and Contingencies, Policy

Reserve for unfunded commitments. First Financial maintains a reserve that it considers sufficient to absorb probable losses incurred in standby letters of credit and outstanding loan commitments. First Financial determines the adequacy of the reserve based upon an evaluation of the unfunded credit facilities, which includes consideration of historical commitment utilization experience, credit risk ratings and historical loss rates, consistent with the Company's ALLL methodology. The reserve for unfunded commitments is included in Accrued interest and other liabilities on the Consolidated Balance Sheets and adjustments are recorded in Other noninterest expense in the Consolidated Statements of Income.

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 losses incurred in letters of credit and outstanding loan commitments and records the reserve within Accrued interest and other liabilities on the Consolidated Balance Sheets.

Property, Plant and Equipment, Policy

Premises and equipment. Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are principally computed on the straight-line method over the estimated useful lives of the assets. Useful lives generally range from 10 to 40 years for building and building improvements; 3 to 10 years for furniture, fixtures and equipment; and 3 to 5 years for software, hardware and data handling equipment. Land improvements are depreciated over 20 years and leasehold improvements are depreciated over the lesser of the term of the respective lease or the useful life of the asset. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Maintenance and repairs are expensed as incurred.

Bank Owned Life Insurance [Policy Text Block]

Bank-owned life insurance. First Financial purchases life insurance policies on the lives of certain employees and is the owner and beneficiary of the policies. The Bank invests in these policies to provide an efficient form of funding for long-term retirement and other employee benefits costs. The policies are included within Accrued interest and other assets in the Consolidated Balance Sheets at each policy’s respective cash surrender value with changes recorded in Other noninterest income in the Consolidated Statements of Income.

Goodwill and Intangible Assets, Policy

Goodwill. Under accounting for business combinations, the net assets of entities acquired by First Financial are recorded at their estimated fair value at the date of acquisition. The excess cost of the acquisition over the fair value of net assets acquired is recorded as goodwill. Goodwill and intangible assets deemed to have indefinite lives, if any, are not amortized, but are subject to annual impairment tests. The Company is required to evaluate goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. First Financial performs its annual impairment test effective October 1, absent events or changes in circumstances that indicate the carrying value of goodwill may not be recoverable.

The Company’s goodwill is accounted for in a single reporting unit representing the consolidated entity. Fair value is estimated using the market capitalization of the Company as of the annual impairment testing date. First Financial also utilizes additional information and analyses to corroborate the use of the Company’s market capitalization as a proper indicator of fair value for purposes of the annual goodwill impairment test.

Goodwill and Intangible Assets, Goodwill, Policy

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.

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 annual impairment test of goodwill as of October 1, 2018 and no impairment was indicated.  As of December 31, 2018, no events or changes in circumstances indicated that the fair value of a reporting unit was below its carrying value.

Core Deposit Intangibles Policy

Core deposit intangibles. CDI represent the estimated value of acquired customer deposit relationships. CDI are recorded at fair value at the date of acquisition and are based on a discounted cash flow methodology that gives appropriate consideration to expected customer attrition rates, cost of the deposit base, reserve requirements and the net maintenance cost attributable to customer deposits. Core deposit intangibles are recorded in Other intangibles on the Consolidated Balance Sheets and are amortized on an accelerated basis over their estimated useful lives.

Other Real Estate Owned Policy

Other real estate owned. 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. OREO properties are recorded at fair value, less estimated disposal costs (net realizable value). Losses arising at the time of acquisition of such properties are charged against the ALLL. Management performs periodic valuations to assess the adequacy of recorded OREO balances and subsequent changes in the carrying value of OREO properties are recorded in the Consolidated Statements of Income. Improvements to OREO properties may be capitalized if the improvements contribute to the overall value of the property, but may not be capitalized in excess of the net realizable value of the property. When management disposes of an OREO property, any gains or losses realized at the time of disposal are reflected in the Consolidated Statements of Income.

Affordable Housing Program Policy

Affordable housing projects. First Financial has investments in certain qualified affordable housing projects. These projects are indirect federal subsidies 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 properties to qualified tenants, resulting in 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.

Investments in Historic Tax Credits [Policy Text Block]

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. The Company’s recorded investment in these entities is carried in Accrued interest and other assets on the Consolidated Balance Sheets.

Income Tax, Policy

Income taxes. First Financial and its subsidiaries file a consolidated federal income tax return. Each subsidiary provides for income taxes on a separate return basis, and remits to First Financial amounts determined to be currently payable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Interest and penalties on income tax assessments or income tax refunds are recognized as a component of noninterest expense in the Consolidated Statements of Income.

Pension and Other Postretirement Plans, Pensions, Policy

Pension. First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees. The measurement of the accrued benefit liability and the annual pension expense involves actuarial and economic assumptions, which include the discount rate, the expected return on plan assets and the rate of compensation increase.

Derivatives, Policy

Derivative instruments. First Financial accounts for its derivative financial instruments in accordance with FASB ASC Topic 815, Derivatives and Hedging. FASB ASC Topic 815 requires all derivative instruments to be carried at fair value on the balance sheet.

The accounting for changes in the fair value of derivatives is based on the intended use of the derivative and the resulting designation.  Derivatives used to hedge the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.  Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

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. Upon entering into an interest rate swap with a borrower, the Bank simultaneously enters into an offsetting swap agreement with an institutional counterparty, with substantially matching terms. These matched interest rate swap agreements generally involve the receipt by First Financial of floating rate amounts from the counterparties in exchange for payments to these counterparties by First Financial of fixed rate amounts received from commercial borrowers over the life of the agreements.

First Financial's matched interest rate swaps qualify as derivatives, but are not designated as hedging instruments. The net interest receivable or payable on matched interest rate swaps is accrued and recognized as an adjustment to interest income.  The fair values of client derivatives are included within Accrued interest and other assets and Accrued interest and other liabilities in the Consolidated Balance Sheets.

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 fair value of these agreements is recorded in the Consolidated Balance Sheets in Accrued interest and other liabilities.

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 and Loans held for sale. The fair value of these agreements is recorded in the Consolidated Balance Sheets in Accrued interest and other assets.

Share-based Compensation, Option and Incentive Plans Policy

Stock-based compensation. First Financial grants stock-based awards, including restricted stock awards and options to purchase the Company’s common stock. Stock option grants are for a fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. Stock-based compensation expense is recognized in the Consolidated Statements of Income on a straight-line basis over the vesting period. As compensation expense is recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from exercise. At the time stock-based awards are exercised, canceled or expire, First Financial may be required to recognize an adjustment to tax expense.

Earnings Per Share, Policy

Earnings per share. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding, unvested shares and dilutive common stock equivalents outstanding during the period. Common stock equivalents, which consist of common stock issuable under the assumed exercise of stock options granted under First Financial's stock-based compensation plans and the assumed conversion of common stock warrants, are calculated using the treasury stock method.

Cash and Cash Equivalents, Policy

Cash and due from banks.Cash and due from banks consist of currency, coin and cash items due from banks. Cash items due from banks include noninterest bearing deposits held at other banks.

Loans and Leases Receivable, Past Due Status, Policy [Policy Text Block]

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 due date of the scheduled payment.

Loans and Leases Receivable, Nonaccrual Loan and Lease Status, Policy

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 none of the principal and interest is due and unpaid, and the Bank expects repayment of the remaining contractual principal and interest.

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 [Policy Text Block]

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.

Impaired Financing Receivable, Policy

Loans classified as nonaccrual and loans modified as TDRs are considered impaired.

Loans and Leases Receivable, Real Estate Acquired Through Foreclosure, Policy

OREO is comprised of properties acquired by the Company primarily through the loan foreclosure or repossession process, or other resolution activities that result in partial or total satisfaction of problem loans.

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 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.

Segment Reporting, Policy

Segments and related information. While the Company monitors the operating results of its six lines of business, operations are managed and financial performance is evaluated on a consolidated basis. Accordingly, and consistent with prior years, all of the Company's operations are considered by management to be aggregated in one reportable operating segment.

Other Contract-Mortgage

Derivatives, Methods of Accounting, Hedging 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 and loans held for sale.

Credit Risk

Derivatives, Methods of Accounting, Hedging Derivatives

First Financial manages this 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

First Financial utilizes interest rate swaps as a means to offer commercial borrowers fixed rate funding while providing the Company with floating rate assets.

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INVESTMENTS (Tables)

12 Months Ended

Dec. 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 HTM and AFS investment securities as of December 31, 2018:

	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	$	99	$	0	$	(2	)	$	97
Securities of U.S. government agencies and corporations	0		0		0			0		32,095		57		(233		)	31,919
Mortgage-backed securities - residential	25,565		0		(1,045		)	24,520		565,071		691		(7,163		)	558,599
Mortgage-backed securities - commercial	147,780		258		(4,385		)	143,653		423,797		819		(3,581		)	421,035
Collateralized mortgage obligations	12,540		0		(633		)	11,907		928,586		4,319		(6,158		)	926,747
Obligations of state and other political subdivisions	243,443		1,954		(1,359		)	244,038		257,300		2,554		(1,429		)	258,425
Asset-backed securities	0		0		0			0		511,430		611		(2,810		)	509,231
Other securities	0		0		0			0		73,948		358		(1,104		)	73,202
Total	$	429,328	$	2,212	$	(7,422	)	$	424,118	$	2,792,326	$	9,409	$	(22,480	)	$	2,779,255

The following is a summary of HTM and AFS investment securities as of December 31, 2017:

	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	$	98	$	0	$	(1	)	$	97
Securities of U.S. government agencies and corporations	11,168		0		(76		)	11,092		15,695		220		0			15,915
Mortgage-backed securities - residential	162,093		2,042		(1,535		)	162,600		290,793		849		(2,599		)	289,043
Mortgage-backed securities - commercial	255,027		1,372		(3,000		)	253,399		150,356		164		(1,417		)	149,103
Collateralized mortgage obligations	143,545		354		(1,602		)	142,297		306,095		1,158		(1,861		)	305,392
Obligations of state and other political subdivisions	82,175		1,804		(266		)	83,713		124,269		2,162		(676		)	125,755
Asset-backed securities	0		0		0			0		377,655		1,628		(306		)	378,977
Other securities	0		0		0			0		83,266		2,147		(287		)	85,126
Total	$	654,008	$	5,572	$	(6,479	)	$	653,101	$	1,348,227	$	8,328	$	(7,147	)	$	1,349,408

Summary of Investment Securities by Estimated Maturity

The following table provides a summary of investment securities by contractual maturity as of December 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:

	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	0	$	0	$	5,972	$	5,977
Due after one year through five years	275		279		63,995		64,040
Due after five years through ten years	21,110		21,374		133,360		133,594
Due after ten years	222,058		222,385		160,115		160,032
Mortgage-backed securities - residential	25,565		24,520		565,071		558,599
Mortgage-backed securities - commercial	147,780		143,653		423,797		421,035
Collateralized mortgage obligations	12,540		11,907		928,586		926,747
Asset-backed securities	0		0		511,430		509,231
Total	$	429,328	$	424,118	$	2,792,326	$	2,779,255

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:

	December 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	$	0	$	0		$	97	$	(2	)	$	97	$	(2	)
Securities of U.S. government agencies and corporations	0		0			16,777		(233		)	16,777		(233		)
Mortgage-backed securities - residential	186,029		(935		)	264,795		(7,273		)	450,824		(8,208		)
Mortgage-backed securities - commercial	147,754		(369		)	232,363		(7,597		)	380,117		(7,966		)
Collateralized mortgage obligations	194,795		(1,546		)	240,514		(5,245		)	435,309		(6,791		)
Obligations of state and other political subdivisions	62,805		(299		)	86,644		(2,489		)	149,449		(2,788		)
Asset-backed securities	336,437		(2,312		)	37,105		(498		)	373,542		(2,810		)
Other securities	33,752		(884		)	4,570		(220		)	38,322		(1,104		)
Total	$	961,572	$	(6,345	)	$	882,865	$	(23,557	)	$	1,844,437	$	(29,902	)

	December 31, 2017
	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	$	97	$	(1	)	$	0	$	0		$	97	$	(1	)
Securities of U.S. Government agencies and corporations	11,092		(76		)	0		0			11,092		(76		)
Mortgage-backed securities - residential	175,183		(1,109		)	108,782		(3,025		)	283,965		(4,134		)
Mortgage-backed securities - commercial	132,818		(1,713		)	72,139		(2,704		)	204,957		(4,417		)
Collateralized mortgage obligations	164,909		(1,138		)	101,436		(2,325		)	266,345		(3,463		)
Obligations of state and other political subdivisions	38,450		(507		)	21,639		(435		)	60,089		(942		)
Asset-backed securities	44,941		(200		)	24,396		(106		)	69,337		(306		)
Other securities	2,605		(1		)	7,124		(286		)	9,729		(287		)
Total	$	570,095	$	(4,745	)	$	335,516	$	(8,881	)	$	905,611	$	(13,626	)

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LOANS (Tables)

12 Months Ended

Dec. 31, 2018

LOANS - Carrying Amount of Accretable Yield for Purchased Impaired and Nonimpaired Loans [Abstract]

Commercial and Consumer Credit Exposure by Risk Attribute

Commercial and consumer credit exposure by risk attribute was as follows:

	As of December 31, 2018
			Real Estate
(Dollars in thousands)	Commercial & industrial		Construction		Commercial		Lease financing		Total
Pass	$	2,432,834	$	548,323	$	3,664,434	$	90,902	$	6,736,493
Special Mention	24,594		603		38,653		0		63,850
Substandard	57,233		9		51,594		2,513		111,349
Doubtful	0		0		0		0		0
Total	$	2,514,661	$	548,935	$	3,754,681	$	93,415	$	6,911,692

	Residential real estate		Home Equity		Installment		Credit card		Total
Performing	$	939,936	$	811,108	$	93,038	$	46,382	$	1,890,464
Nonperforming	15,710		6,174		174		0		22,058
Total	$	955,646	$	817,282	$	93,212	$	46,382	$	1,912,522

	As of December 31, 2017
			Real Estate
(Dollars in thousands)	Commercial & industrial		Construction		Commercial		Lease financing		Total
Pass	$	1,882,464	$	467,687	$	2,446,999	$	88,078	$	4,885,228
Special Mention	6,226		0		4,436		0		10,662
Substandard	24,053		43		38,656		1,269		64,021
Doubtful	0		0		0		0		0
Total	$	1,912,743	$	467,730	$	2,490,091	$	89,347	$	4,959,911

	Residential real estate		Home equity		Installment		Credit card		Total
Performing	$	463,459	$	489,148	$	41,331	$	46,691	$	1,040,629
Nonperforming	7,932		4,456		255		0		12,643
Total	$	471,391	$	493,604	$	41,586	$	46,691	$	1,053,272

Loan Delinquency, including Nonaccrual Loans

Loan delinquency, including nonaccrual loans, was as follows:

	As of December 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	$	13,369	$	41	$	7,423	$	20,833	$	2,488,450	$	2,509,283	$	5,378	$	2,514,661	$	0
Lease financing	352		0		0		352		93,063		93,415		0		93,415		0
Construction real estate	0		0		0		0		548,687		548,687		248		548,935		0
Commercial real estate	6,279		1,158		12,644		20,081		3,682,455		3,702,536		52,145		3,754,681		0
Residential real estate	11,060		2,976		4,535		18,571		902,404		920,975		34,671		955,646		0
Home equity	5,245		1,228		2,578		9,051		804,835		813,886		3,396		817,282		0
Installment	420		37		145		602		92,128		92,730		482		93,212		0
Credit card	541		96		63		700		45,682		46,382		0		46,382		63
Total	$	37,266	$	5,536	$	27,388	$	70,190	$	8,657,704	$	8,727,894	$	96,320	$	8,824,214	$	63

	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	$	755	$	1,657	$	5,078	$	7,490	$	1,901,821	$	1,909,311	$	3,432	$	1,912,743	$	0
Lease financing	485		0		0		485		88,862		89,347		0		89,347		0
Construction real estate	234		0		0		234		467,216		467,450		280		467,730		0
Commercial real estate	1,716		201		8,777		10,694		2,419,969		2,430,663		59,428		2,490,091		0
Residential real estate	526		811		1,992		3,329		430,500		433,829		37,562		471,391		0
Home equity	2,716		394		1,753		4,863		485,127		489,990		3,614		493,604		0
Installment	179		29		205		413		40,529		40,942		644		41,586		0
Credit card	285		87		62		434		46,257		46,691		0		46,691		62
Total	$	6,896	$	3,179	$	17,867	$	27,942	$	5,880,281	$	5,908,223	$	104,960	$	6,013,183	$	62

Loans Restructured During Period

The following table provides information on loan modifications classified as TDRs during the years ended December 31, 2018, 2017 and 2016:

	Years ended December 31,
	2018					2017					2016
(Dollars in thousands)	Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance		Number of loans	Pre-modification loan balance		Period end balance
Commercial & industrial	17	$	23,943	$	23,890	7	$	5,724	$	5,661	18	$	3,402	$	3,508
Construction real estate	0	0		0		0	0		0		0	0		0
Commercial real estate	8	3,385		3,150		8	1,816		1,758		16	5,200		4,752
Residential real estate	13	1,148		1,073		6	416		315		5	840		787
Home equity	5	95		192		1	39		39		5	165		156
Installment	0	0		0		0	0		0		3	9		9
Total	43	$	28,571	$	28,305	22	$	7,995	$	7,773	47	$	9,616	$	9,212

Loans Restructured, Modifications

The following table provides information on how TDRs were modified during the years ended December 31, 2018, 2017 and 2016:

	Years Ended December 31,
(Dollars in thousands)	2018		2017		2016
Extended maturities	$	4,093	$	3,261	$	2,571
Adjusted interest rates	52		2,767		0
Combination of rate and maturity changes	0		489		3,046
Forbearance	23,175		1,181		88
Other (1)	985		75		3,507
Total	$	28,305	$	7,773	$	9,212

⁽¹⁾Other includes covenant modifications and other concessions or combination of concessions that do not consist of interest rate adjustments, forbearance and maturity extensions.

Loan Restructuring, Loans with a Payment Default Within 12 Months of Loan Modification

Nonaccrual, Restructured and Impaired Loans

The following table provides information on impaired loans, excluding purchased impaired loans, as of December 31:

(Dollars in thousands)	2018		2017		2016
Impaired loans
Nonaccrual loans (1)
Commercial & industrial	$	30,925	$	5,229	$	2,419
Lease financing	22		82		195
Construction real estate	9		29		0
Commercial real estate	20,500		10,616		6,098
Residential real estate	13,495		4,140		5,251
Home equity	5,580		3,743		3,400
Installment	169		243		367
Total nonaccrual loans	70,700		24,082		17,730
Accruing troubled debt restructurings	16,109		17,545		30,240
Total impaired loans	$	86,809	$	41,627	$	47,970
Interest income effect
Gross amount of interest that would have been recorded under original terms	$	4,656	$	3,397	$	2,848
Interest included in income
Nonaccrual loans	715		535		375
Troubled debt restructurings	642		710		876
Total interest included in income	1,357		1,245		1,251
Net impact on interest income	$	3,299	$	2,152	$	1,597
Commitments outstanding to borrowers with nonaccrual loans	$	200	$	0	$	0

⁽¹⁾Nonaccrual loans include nonaccrual TDRs of $22.4 million, $6.4 million and $5.1 million as of December 31, 2018, 2017 and 2016, respectively.

Investment in Impaired Loans

First Financial's investment in impaired loans, excluding purchased impaired loans, is as follows:

	December 31, 2018						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	$	36,694	$	42,561	$	0	$	7,162	$	8,460	$	0
Lease financing	22		22		0		82		82		0
Construction real estate	9		26		0		29		60		0
Commercial real estate	23,513		31,375		0		18,423		20,837		0
Residential real estate	17,297		19,975		0		6,876		8,145		0
Home equity	6,351		7,461		0		4,356		5,399		0
Installment	174		563		0		255		422		0
Total	84,060		101,983		0		37,183		43,405		0
Loans with an allowance recorded
Commercial & industrial	939		939		667		169		169		169
Lease financing	0		0		0		0		0		0
Construction real estate	0		0		0		0		0		0
Commercial real estate	1,509		1,509		461		3,119		3,120		448
Residential real estate	301		301		32		1,056		1,063		160
Home equity	0		0		0		100		100		2
Installment	0		0		0		0		0		0
Total	2,749		2,749		1,160		4,444		4,452		779
Total
Commercial & industrial	37,633		43,500		667		7,331		8,629		169
Lease financing	22		22		0		82		82		0
Construction real estate	9		26		0		29		60		0
Commercial real estate	25,022		32,884		461		21,542		23,957		448
Residential real estate	17,598		20,276		32		7,932		9,208		160
Home equity	6,351		7,461		0		4,456		5,499		2
Installment	174		563		0		255		422		0
Total	$	86,809	$	104,732	$	1,160	$	41,627	$	47,857	$	779

	Years ended December 31,
	2018				2017				2016
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized		Average balance		Interest income recognized
Loans with no related allowance recorded
Commercial & industrial	$	14,498	$	360	$	13,167	$	280	$	13,619	$	309
Lease financing	21		0		112		4		150		3
Construction real estate	20		2		601		1		0		0
Commercial real estate	24,738		490		20,935		563		14,252		357
Residential real estate	11,359		301		7,616		196		7,752		199
Home equity	5,541		114		4,032		99		4,830		86
Installment	274		2		332		4		366		7
Total	56,451		1,269		46,795		1,147		40,969		961
Loans with an allowance recorded
Commercial & industrial	900		44		1,204		28		1,098		37
Lease financing	0		0		0		0		214		8
Construction real estate	0		0		0		0		0		0
Commercial real estate	1,402		18		2,634		40		7,792		211
Residential real estate	895		23		1,112		26		1,374		30
Home equity	80		3		101		4		101		4
Installment	0		0		0		0		0		0
Total	3,277		88		5,051		98		10,579		290
Total
Commercial & industrial	15,398		404		14,371		308		14,717		346
Lease financing	21		0		112		4		364		11
Construction real estate	20		2		601		1		0		0
Commercial real estate	26,140		508		23,569		603		22,044		568
Residential real estate	12,254		324		8,728		222		9,126		229
Home equity	5,621		117		4,133		103		4,931		90
Installment	274		2		332		4		366		7
Total	$	59,728	$	1,357	$	51,846	$	1,245	$	51,548	$	1,251

Changes in Other Real Estate Owned

Changes in OREO were as follows:

	Years ended December 31,
(Dollars in thousands)	2018			2017			2016
Balance at beginning of year	$	2,781		$	6,284		$	13,254
Additions
Commercial	1,269			1,732			1,850
Residential	1,913			2,387			1,022
Total additions	3,182			4,119			2,872
Disposals
Commercial	(2,967		)	(5,409		)	(6,993		)
Residential	(830		)	(1,574		)	(2,363		)
Total disposals	(3,797		)	(6,983		)	(9,356		)
Valuation adjustments
Commercial	(355		)	(439		)	(345		)
Residential	(410		)	(200		)	(141		)
Total valuation adjustments	(765		)	(639		)	(486		)
Balance at end of year	$	1,401		$	2,781		$	6,284

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ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)

12 Months Ended

Dec. 31, 2018

Receivables [Abstract]

Changes in the Allowance for Loan and Lease Losses for the Previous Three Years

Changes in the ALLL by loan category as of December 31 were as follows:

	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 year	$	17,598		$	675	$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021
Provision for loan and lease losses	10,615			454		(310		)	847			492			829			(85		)	1,744			14,586
Gross charge-offs	(11,533		)	0		0			(4,835		)	(422		)	(1,725		)	(435		)	(1,720		)	(20,670		)
Recoveries	2,066			1		146			4,106			211			1,309			575			191			8,605
Total net charge-offs	(9,467		)	1		146			(729		)	(211		)	(416		)	140			(1,529		)	(12,065		)
Ending allowance for loan and lease losses	$	18,746		$	1,130	$	3,413		$	21,048		$	4,964		$	5,348		$	362		$	1,531		$	56,542

	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 year	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961
Provision for loan and lease losses	6,917			(42		)	207			(7,291		)	1,695			1,778			(90		)	408			3,582
Gross charge-offs	(10,194		)	0			(1		)	(1,038		)	(435		)	(913		)	(225		)	(857		)	(13,663		)
Recoveries	1,650			1			89			2,719			215			1,027			234			206			6,141
Total net charge-offs	(8,544		)	1			88			1,681			(220		)	114			9			(651		)	(7,522		)
Ending allowance for loan and lease losses	$	17,598		$	675		$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021

	2016
							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 year	$	16,995		$	821		$	1,810		$	23,656		$	4,014		$	3,943		$	386		$	1,773		$	53,398
Provision for loan and lease losses	3,705			(106		)	1,280			5,365			(655		)	(175		)	53			673			10,140
Gross charge-offs	(2,630		)	0			(93		)	(4,983		)	(387		)	(1,445		)	(386		)	(1,190		)	(11,114		)
Recoveries	1,155			1			285			2,502			236			720			335			303			5,537
Total net charge-offs	(1,475		)	1			192			(2,481		)	(151		)	(725		)	(51		)	(887		)	(5,577		)
Ending allowance for loan and lease losses	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961

Allowance for Loan and Lease Losses by Classification

Changes in the ALLL by loan category as of December 31 were as follows:

	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 year	$	17,598		$	675	$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021
Provision for loan and lease losses	10,615			454		(310		)	847			492			829			(85		)	1,744			14,586
Gross charge-offs	(11,533		)	0		0			(4,835		)	(422		)	(1,725		)	(435		)	(1,720		)	(20,670		)
Recoveries	2,066			1		146			4,106			211			1,309			575			191			8,605
Total net charge-offs	(9,467		)	1		146			(729		)	(211		)	(416		)	140			(1,529		)	(12,065		)
Ending allowance for loan and lease losses	$	18,746		$	1,130	$	3,413		$	21,048		$	4,964		$	5,348		$	362		$	1,531		$	56,542

	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 year	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961
Provision for loan and lease losses	6,917			(42		)	207			(7,291		)	1,695			1,778			(90		)	408			3,582
Gross charge-offs	(10,194		)	0			(1		)	(1,038		)	(435		)	(913		)	(225		)	(857		)	(13,663		)
Recoveries	1,650			1			89			2,719			215			1,027			234			206			6,141
Total net charge-offs	(8,544		)	1			88			1,681			(220		)	114			9			(651		)	(7,522		)
Ending allowance for loan and lease losses	$	17,598		$	675		$	3,577		$	20,930		$	4,683		$	4,935		$	307		$	1,316		$	54,021

	2016
							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 year	$	16,995		$	821		$	1,810		$	23,656		$	4,014		$	3,943		$	386		$	1,773		$	53,398
Provision for loan and lease losses	3,705			(106		)	1,280			5,365			(655		)	(175		)	53			673			10,140
Gross charge-offs	(2,630		)	0			(93		)	(4,983		)	(387		)	(1,445		)	(386		)	(1,190		)	(11,114		)
Recoveries	1,155			1			285			2,502			236			720			335			303			5,537
Total net charge-offs	(1,475		)	1			192			(2,481		)	(151		)	(725		)	(51		)	(887		)	(5,577		)
Ending allowance for loan and lease losses	$	19,225		$	716		$	3,282		$	26,540		$	3,208		$	3,043		$	388		$	1,559		$	57,961

The ALLL balance and the recorded investment in loans by portfolio segment and based on impairment method as of December 31 were as follows:

	December 31, 2018
					Real Estate
(Dollars in thousands)	Commercial & industrial		Lease financing		Construction		Commercial		Residential		Home equity		Installment		Credit card		Total
Ending allowance on loans individually evaluated for impairment	$	667	$	0	$	0	$	461	$	32	$	0	$	0	$	0	$	1,160
Ending allowance on loans collectively evaluated for impairment	18,079		1,130		3,413		20,587		4,932		5,348		362		1,531		55,382
Ending allowance for loan and lease losses	$	18,746	$	1,130	$	3,413	$	21,048	$	4,964	$	5,348	$	362	$	1,531	$	56,542
Loans and Leases
Ending balance of loans individually evaluated for impairment	$	37,633	$	22	$	9	$	25,022	$	17,598	$	6,351	$	174	$	0	$	86,809
Ending balance of loans collectively evaluated for impairment	2,477,028		93,393		548,926		3,729,659		938,048		810,931		93,038		46,382		8,737,405
Total loans	$	2,514,661	$	93,415	$	548,935	$	3,754,681	$	955,646	$	817,282	$	93,212	$	46,382	$	8,824,214

	December 31, 2017
					Real Estate
(Dollars in thousands)	Commercial & industrial		Lease financing		Construction		Commercial		Residential		Home equity		Installment		Credit card		Total
Ending allowance on loans individually evaluated for impairment	$	169	$	0	$	0	$	448	$	160	$	2	$	0	$	0	$	779
Ending allowance on loans collectively evaluated for impairment	17,429		675		3,577		20,482		4,523		4,933		307		1,316		53,242
Ending allowance for loan and lease losses	$	17,598	$	675	$	3,577	$	20,930	$	4,683	$	4,935	$	307	$	1,316	$	54,021
Loans and Leases
Ending balance of loans individually evaluated for impairment	$	7,331	$	82	$	29	$	21,542	$	7,932	$	4,456	$	255	$	0	$	41,627
Ending balance of loans collectively evaluated for impairment	1,905,412		89,265		467,701		2,468,549		463,459		489,148		41,331		46,691		5,971,556
Total loans	$	1,912,743	$	89,347	$	467,730	$	2,490,091	$	471,391	$	493,604	$	41,586	$	46,691	$	6,013,183

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PREMISES AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Premises and equipment at December 31 were as follows:

(Dollars in thousands)	2018		2017
Land and land improvements	$	57,701	$	41,711
Buildings	161,817		104,576
Furniture and fixtures	66,567		55,165
Leasehold improvements	29,086		19,377
Construction in progress	5,731		1,721
	320,902		222,550
Less: Accumulated depreciation and amortization	105,250		97,514
Total	$	215,652	$	125,036

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

First Financial's future minimum lease payments for operating leases are as follows: 

(Dollars in thousands)
2019	$	9,568
2020	9,179
2021	8,284
2022	5,016
2023	4,269
Thereafter	15,496
Total	$	51,812

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill for the years ended December 31, 2018, 2017 and 2016 are shown below.

(Dollars in thousands)	2018		2017		2016
Balance at beginning of year	$	204,084	$	204,084	$	204,084
Goodwill resulting from business combinations	676,167		0		0
Balance at end of year	$	880,251	$	204,084	$	204,084

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The estimated amortization expense of intangible assets for the next five years is as follows:

(Dollars in thousands)
2019	$	8,800
2020	7,010
2021	5,602
2022	3,417
2023	3,155

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DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2018

Deposits [Abstract]

Maturities of time deposits [Table Text Block]

Scheduled maturities of time deposits for the next five years were as follows:

(Dollars in thousands)
2019	$	1,407,996
2020	471,183
2021	163,575
2022	110,170
2023	20,112
Thereafter	528
Total	$	2,173,564

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BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule Of Remaining Contractual Maturity Of Secured Borrowings And Class Of Collateral Pledged Under Repurchase Agreements Table [Table Text Block]

(Dollars in thousands)	Overnight and Continuous
Repurchase agreements
Mortgage-backed securities	$	22,369
Collateralized mortgage obligations	62,222
Total	$	84,591

Schedule of Short-term Debt [Table Text Block]

The following is a summary of short-term borrowings for the last three years:

	2018				2017				2016
(Dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
At December 31,
Federal funds purchased and securities sold under agreements to repurchase	$	183,591	1.65	%	$	72,265	0.19	%	$	120,212	0.12	%
FHLB borrowings	857,100		2.48	%	742,300		1.43	%	687,700		0.66	%
Total	$	1,040,691	2.33	%	$	814,565	1.32	%	$	807,912	0.58	%
Average for the year
Federal funds purchased and securities sold under agreements to repurchase	$	87,221	0.58	%	$	69,766	0.19	%	$	89,157	0.05	%
FHLB borrowings	857,028		2.03	%	760,558		1.05	%	791,259		0.55	%
Other short-term borrowings	3,178		4.36	%	41		4.07	%	41		3.56	%
Total	$	947,427	1.90	%	$	830,365	0.98	%	$	880,457	0.50	%
Maximum month-end balances
Federal funds purchased and securities sold under agreements to repurchase	$	183,591			$	130,633			$	122,242
FHLB borrowings	1,170,800				957,700				1,035,000
Other short-term borrowings	10,000				0				0

Summary of Long-term Debt [Table Text Block]

The following is a summary of First Financial's long-term debt:

	2018					2017
(Dollars in thousands)	Amount			Average Rate		Amount			Average Rate
Subordinated debt	$	170,550		5.28	%	$	120,000		5.13	%
Unamortized debt issuance costs	(1,185		)	n/a		(1,362		)	n/a
FHLB	400,599			2.08	%	241			1.09	%
Capital loan with municipality	775			0.00	%	775			0.00	%
Total long-term debt	$	570,739		3.04	%	$	119,654		5.14	%

Schedule of Maturities of Long-term Debt [Table Text Block]

As of December 31, 2018, First Financial's long-term debt matures as follows:

(Dollars in thousands)
2019	$	157,914
2020	104,274
2021	19,007
2022	49,404
2023	0
Thereafter	240,140
Total	$	570,739

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DERIVATIVES (Tables)

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Financial Instruments and Balances

The following table details the location and amounts recognized in the Consolidated Balance Sheets for client derivatives:

		December 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
Matched interest rate swaps with borrower	Accrued interest and other assets and other liabilities	$	1,359,990	$	17,402	$	(11,787	)	$	837,040	$	7,153	$	(5,529	)
Matched interest rate swaps with counterparty	Accrued interest and other liabilities	1,359,990		11,787		(17,401		)	837,040		5,529		(7,158		)
Total		$	2,719,980	$	29,189	$	(29,188	)	$	1,674,080	$	12,682	$	(12,687	)

Disclosure by Type of Financial Instrument [Table Text Block]

The following table discloses the gross and net amounts of client derivative liabilities recognized in the Consolidated Balance Sheets:

	December 31, 2018							December 31, 2017
(Dollars in thousands)	Gross amounts of recognized liabilities		Gross amounts offset in the Consolidated Balance Sheets			Net amounts of liabilities presented in the Consolidated Balance Sheets		Gross amounts of recognized liabilities		Gross amounts offset in the Consolidated Balance Sheets		Net amounts of liabilities presented in the Consolidated Balance Sheets
Client derivatives
Matched interest rate swaps	$	29,189	$	(14,577	)	$	14,612	$	12,687	$	2,279	$	14,966

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 December 31, 2018:

							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	$	1,359,990	6.2	$	5,615		4.70	%	4.67	%
Pay fixed, matched interest rate swaps with counterparty	1,359,990		6.2	(5,614		)	4.67	%	4.70	%
Total client derivatives	$	2,719,980	6.2	$	1		4.68	%	4.68	%

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RELATED PARTIES TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Schedule of Loans to Related Parties [Table Text Block]

Loans to directors, executive officers, principal holders of First Financial’s common stock and certain related persons were as follows:

(Dollars in thousands)	2018
Beginning balance	$	9,873
Additions	2,108
Deductions	(9,249		)
Ending balance	$	2,732
Loans 90 days or more past due	$	0

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INCOME TAXES INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Income tax expense consisted of the following components:

(Dollars in thousands)	2018		2017			2016
Current expense
Federal	$	34,330	$	22,599		$	40,537
State	1,029		1,265			1,322
Total current expense	35,359		23,864			41,859
Deferred expense (benefit)
Federal	4,675		(4,657		)	528
State	1,592		169			(182		)
Total deferred expense (benefit)	6,267		(4,488		)	346
Income tax expense	$	41,626	$	19,376		$	42,205

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The difference between the federal income tax rates applied to income before income taxes, and the effective rates were due to the following:

(Dollars in thousands)	2018			2017			2016
Income taxes computed at federal statutory rate on income before income taxes (21% in 2018; 35% in 2017 and 2016)	$	44,986		$	40,657		$	45,756
Benefit from tax-exempt income	(4,499		)	(3,427		)	(2,911		)
Tax credits	(5,439		)	(16,806		)	(2,691		)
Tax rate reduction impact	0			(8,191		)	0
Basis reduction on historic tax credit	0			4,599			0
Tax benefit of equity compensation	(565		)	(1,449		)	(72		)
State income taxes, net of federal tax benefit	2,070			932			741
Affordable housing investments	4,725			2,798			1,923
Other	348			263			(541		)
Income tax expense	$	41,626		$	19,376		$	42,205

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The major components of the temporary differences that gave rise to deferred tax assets and liabilities at December 31, 2018, and 2017, were as follows:

(Dollars in thousands)	2018			2017
Deferred tax assets
Allowance for loan and lease losses	$	12,782		$	12,134
Fair value adjustments on business combinations	11,199			369
Deferred compensation	392			384
Postretirement benefits other than pension liability	676			564
Accrued stock-based compensation	1,145			932
OREO write-downs	118			97
Interest on nonaccrual loans	1,160			616
Accrued expenses	5,808			3,051
Net unrealized losses on investment securities and derivatives	3,221			249
State net operating loss	3,119			0
Federal tax credit carryforwards	873			0
Other	425			339
Total deferred tax assets	40,918			18,735
Deferred tax liabilities
Tax depreciation in excess of book depreciation	(9,530		)	(2,510		)
FHLB and FRB stock	(4,044		)	(3,384		)
Mortgage-servicing rights	(2,285		)	(343		)
Leasing activities	(3,881		)	(2,792		)
Retirement obligation	(6,614		)	(8,888		)
Intangible assets	(12,310		)	(11,559		)
Deferred loan fees and costs	(131		)	(371		)
Prepaid expenses	(582		)	(210		)
Limited partnership investments	(2,367		)	(1,230		)
Other	(1,867		)	(2,415		)
Total deferred tax liabilities	(43,611		)	(33,702		)
Total net deferred tax liability	$	(2,693	)	$	(14,967	)

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block]

A progression of unrecognized tax benefits as of December 31, 2018 and 2017 is as follows:

(Dollars in thousands)	2018		2017
Balance at beginning of year	$	3,735	$	3,735
Additions for tax positions of prior years	0		0
Balance at end of year	$	3,735	$	3,735

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EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Amounts Recognized in Balance Sheet and Income Statement [Table Text Block]

The following tables set forth information concerning amounts recognized in First Financial's Consolidated Balance Sheets and Consolidated Statements of Income related to the Company's pension plan:

	December 31,
(Dollars in thousands)	2018			2017
Change in benefit obligation
Benefit obligation at beginning of year	$	71,154		$	62,729
Service cost	6,501			4,894
Interest cost	2,394			2,325
Actuarial (gain) loss	(4,032		)	6,107
Benefits paid, excluding settlement	(7,731		)	(4,901		)
Benefit obligation at end of year	68,286			71,154
Change in plan assets
Fair value of plan assets at beginning of year	144,349			131,011
Actual return on plan assets	(6,540		)	18,239
Benefits paid, excluding settlement	(7,731		)	(4,901		)
Fair value of plan assets at end of year	130,078			144,349
Amounts recognized in the Consolidated Balance Sheets
Assets	61,792			73,195
Liabilities	0			0
Net amount recognized	$	61,792		$	73,195
Amounts recognized in accumulated other comprehensive income (loss)
Net actuarial loss	$	43,711		$	33,580
Net prior service cost	(1,508		)	(1,921		)
Deferred tax assets	(9,613		)	(12,028		)
Net amount recognized	$	32,590		$	19,631
Change in accumulated other comprehensive income (loss)	$	12,959		$	(3,172	)
Accumulated benefit obligation	$	66,320		$	69,678

Schedule of Components of Net Periodic Benefit Cost [Table Text Block]

Components of net periodic benefit cost
	December 31,
(Dollars in thousands)	2018			2017			2016
Service cost	$	6,501		$	4,894		$	5,034
Interest cost	2,394			2,325			2,262
Expected return on assets	(9,811		)	(9,358		)	(9,644		)
Amortization of prior service cost	(413		)	(413		)	(413		)
Recognized net actuarial loss	2,188			1,924			1,608
Net periodic benefit (income) cost	859			(628		)	(1,153		)
Other changes recognized in accumulated other comprehensive income (loss)
Net actuarial (gain) loss	12,319			(2,775		)	(884		)
Prior service cost	0			0			0
Amortization of prior service cost	413			413			413
Amortization of gain	(2,188		)	(1,924		)	(1,608		)
Total recognized in accumulated other comprehensive income (loss)	10,544			(4,286		)	(2,079		)
Total recognized in net periodic benefit cost and accumulated other comprehensive income (loss)	$	11,403		$	(4,914	)	$	(3,232	)
Amount expected to be recognized in net periodic pension expense in the coming year
Amortization of (gain) loss	$	1,867		$	2,090		$	1,754
Amortization of prior service credit	(413		)	(413		)	(413		)

Schedule of Assumptions Used [Table Text Block]

Pension plan assumptions
	December 31,
	2018		2017		2016
Benefit obligations
Discount rate	4.31	%	3.43	%	3.88	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%
Net periodic benefit cost
Discount rate	3.43	%	3.88	%	4.05	%
Expected return on plan assets	7.25	%	7.25	%	7.50	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%

Schedule of Changes in Fair Value of Plan Assets [Table Text Block]

The fair value of the plan assets as of December 31, 2018 by asset category is shown in the table that follows:

	Fair Value Measurements
(Dollars in thousands)	Total		Quoted Prices in  Active Markets  for  Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash	$	216	$	216	$	0	$	0
U. S. Government agencies	8,053		0		8,053		0
Fixed income mutual funds	74,453		74,453		0		0
Equity mutual funds	47,356		47,356		0		0
Total	$	130,078	$	122,025	$	8,053	$	0

The fair value of the plan assets as of December 31, 2017 by asset category is shown in the table that follows:

	Fair Value Measurements
(Dollars in thousands)	Total		Quoted Prices in  Active Markets  for  Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash	$	175	$	175	$	0	$	0
U. S. Government agencies	6,853		0		6,853		0
Fixed income mutual funds	69,154		69,154		0		0
Equity mutual funds	68,167		68,167		0		0
Total	$	144,349	$	137,496	$	6,853	$	0

Schedule of Expected Benefit Payments [Table Text Block]

The following benefit payments, which reflect expected future service, are expected to be paid:

(Dollars in thousands)
2019	$	4,396
2020	5,280
2021	5,229
2022	4,739
2023	4,917
Thereafter	29,948

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

12 Months Ended

Dec. 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 accumulated other comprehensive income (loss) are as follows:

	December 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			Cumulative effect of new standard			Ending balance
Unrealized gain (loss) on debt securities	$	(14,461	)	$	(161	)	$	(14,300	)	$	3,071		$	(11,229	)	$	(182	)	$	(11,229	)	$	(190	)	$	(11,601	)
Unrealized gain (loss) on derivatives	628			0			628			(144		)	484			(577		)	484			(124		)	(217		)
Retirement obligation	(12,319		)	(1,775		)	(10,544		)	2,364			(8,180		)	(19,631		)	(8,180		)	(4,779		)	(32,590		)
Total	$	(26,152	)	$	(1,936	)	$	(24,216	)	$	5,291		$	(18,925	)	$	(20,390	)	$	(18,925	)	$	(5,093	)	$	(44,408	)

	December 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 debt securities	$	8,447	$	1,649		$	6,798	$	(2,431	)	$	4,367	$	(4,549	)	$	4,367	$	(182	)
Unrealized gain (loss) on derivatives	810		0			810		(296		)	514		(1,091		)	514		(577		)
Retirement obligation	2,775		(1,511		)	4,286		(1,114		)	3,172		(22,803		)	3,172		(19,631		)
Total	$	12,032	$	138		$	11,894	$	(3,841	)	$	8,053	$	(28,443	)	$	8,053	$	(20,390	)

	December 31, 2016
	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 debt securities	$	751	$	234		$	517	$	(133	)	$	384	$	(4,933	)	$	384	$	(4,549	)
Unrealized gain (loss) on derivatives	809		0			809		(301		)	508		(1,599		)	508		(1,091		)
Retirement obligation	884		(1,195		)	2,079		(834		)	1,245		(24,048		)	1,245		(22,803		)
Total	$	2,444	$	(961	)	$	3,405	$	(1,268	)	$	2,137	$	(30,580	)	$	2,137	$	(28,443	)

Other Accumulated Comprehensive income reclassified from AOCI [Table Text Block]

The following table details the activity reclassified from accumulated other comprehensive income into income during the period:

	Amount Reclassified from Accumulated Other Comprehensive Income (1)
	December 31,
(Dollars in thousands)	2018			2017			2016			Affected Line Item in the Consolidated Statements of Income
Realized gains and losses on securities available-for-sale	$	(161	)	$	1,649		$	234		Net gain (loss) on sales of investment securities
Defined benefit pension plan
Amortization of prior service cost (2)	413			413			413			Other noninterest expense
Recognized net actuarial loss (2)	(2,188		)	(1,924		)	(1,608		)	Other noninterest expense
Amortization and settlement charges of defined benefit pension items	(1,775		)	(1,511		)	(1,195		)
Total reclassifications for the period, before tax	$	(1,936	)	$	138		$	(961	)

⁽¹⁾ Negative amounts are debits to profit/loss.

⁽²⁾ Included in the computation of net periodic pension cost (see Note 15 - Employee Benefit Plans for additional details).

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CAPITAL (Tables)

12 Months Ended

Dec. 31, 2018

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

	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, 2018
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	1,215,613	11.87	%	$	652,874	6.375	%	N/A		N/A		$	716,881	7.00	%
First Financial Bank	1,279,492		12.50	%	652,590		6.375	%	$	665,386	6.50	%	716,570		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	1,257,366		12.28	%	806,491		7.875	%	N/A		N/A		870,499		8.50	%
First Financial Bank	1,279,596		12.50	%	806,141		7.875	%	$	818,937	8.00	%	870,120		8.50	%
Total capital to risk-weighted assets
Consolidated	1,444,146		14.10	%	1,011,314		9.875	%	N/A		N/A		1,075,322		10.50	%
First Financial Bank	1,344,388		13.13	%	1,010,875		9.875	%	1,023,671		10.00	%	1,074,855		10.50	%
Leverage
Consolidated	1,257,366		9.71	%	517,958		4.00	%	N/A		N/A		517,958		4.00	%
First Financial Bank	1,279,596		9.89	%	517,710		4.00	%	647,138		5.00	%	517,710		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	5.75	%	N/A		N/A		$	497,604	7.00	%
First Financial Bank	794,251		11.21	%	407,220		5.75	%	$	460,336	6.50	%	495,746		7.00	%
Tier 1 capital to risk-weighted assets
Consolidated	755,839		10.63	%	515,376		7.25	%	N/A		N/A		604,233		8.50	%
First Financial Bank	794,355		11.22	%	513,452		7.25	%	566,567		8.00	%	601,978		8.50	%
Total capital to risk-weighted assets
Consolidated	929,148		13.07	%	657,548		9.25	%	N/A		N/A		746,406		10.50	%
First Financial Bank	856,363		12.09	%	655,093		9.25	%	708,209		10.00	%	743,619		10.50	%
Leverage
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	%

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STOCK OPTIONS AND AWARDS (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation, Stock Options, Activity [Table Text Block]

Stock option activity for the year ended December 31, 2018, is summarized as follows:

(Dollars in thousands, except share and per share data)	Number of shares		Weighted average exercise price		Weighted average remaining contractual life	Aggregate intrinsic value
Outstanding at beginning of year	11,800		$	11.64
Granted	0		0.00
Assumed	83,551		8.54
Exercised	(32,941	)	8.62
Forfeited or expired	0		0.00
Outstanding at end of year	62,410		$	9.08	3.72	$	914
Exercisable at end of year	62,410		$	9.08	3.72	$	914

Schedule of Cash Proceeds Received from Share-based Payment Awards [Table Text Block] (Deprecated 2017-01-31)

	2018		2017		2016
Total intrinsic value of options exercised	$	734	$	1,533	$	661
Cash received from exercises	$	284	$	341	$	801
Tax benefit from exercises	$	1,439	$	1,991	$	1,958

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

Activity in restricted stock for the previous three years ended December 31 is summarized as follows:

	2018				2017				2016
	Number of shares		Weighted  average grant date fair value		Number of shares		Weighted  average grant date fair value		Number of shares		Weighted  average grant date fair value
Nonvested at beginning of year	468,372		$	21.63	648,817		$	17.82	643,641		$	17.21
Granted	303,930		28.94		234,529		27.36		317,695		18.13
Vested	(267,031	)	20.94		(307,825	)	18.12		(263,713	)	16.82
Forfeited	(42,825	)	26.38		(107,149	)	21.18		(48,806	)	17.37
Nonvested at end of year	462,446		$	26.39	468,372		$	21.63	648,817		$	17.82

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EARNINGS PER COMMON SHARE (Tables)

12 Months Ended

Dec. 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:

(Dollars in thousands, except share and per share data)	2018		2017		2016
Numerator
Net income	$	172,595	$	96,787	$	88,526
Denominator
Basic earnings per common share - weighted average shares	88,582,090		61,529,460		61,206,093
Effect of dilutive securities
Employee stock awards	514,680		581,329		729,335
Warrants	517,435		60,801		49,994
Diluted earnings per common share - adjusted weighted average shares	89,614,205		62,171,590		61,985,422
Earnings per share available to common shareholders
Basic	$	1.95	$	1.57	$	1.45
Diluted	$	1.93	$	1.56	$	1.43

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FAIR VALUE DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2018

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:

	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2018
Financial assets
Cash and short-term investments	$	273,959	$	273,959	$	273,959	$	0	$	0
Investment securities held-to-maturity	429,328		424,118		0		424,118		0
Other investments	115,660		N/A		N/A		N/A		N/A
Loans held for sale	4,372		4,372		0		4,372		0
Loans and leases, net of ALLL	8,767,672		8,662,868		0		0		8,662,868
Accrued interest receivable	41,816		41,816		0		13,819		27,997
Financial liabilities
Deposits
Noninterest-bearing	$	2,492,434	$	2,492,434	$	0	$	2,492,434	$	0
Interest-bearing demand	2,307,071		2,307,071		0		2,307,071		0
Savings	3,167,325		3,167,325		0		3,167,325		0
Time	2,173,564		2,146,645		0		2,146,645		0
Total deposits	10,140,394		10,113,475		0		10,113,475		0
Short-term borrowings	1,040,691		1,040,691		1,040,691		0		0
Long-term debt	570,739		557,933		0		557,933		0
Accrued interest payable	12,126		12,126		2,035		10,091		0

	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	$	184,624	$	184,624	$	184,624	$	0	$	0
Investment securities held-to-maturity	654,008		653,101		0		653,101		0
Other investments	53,140		N/A		N/A		N/A		N/A
Loans held for sale	11,502		11,502		0		11,502		0
Loans and leases, net of ALLL	5,959,162		6,006,656		0		0		6,006,656
Accrued interest receivable	24,496		24,496		0		8,265		16,231
Financial liabilities
Deposits
Noninterest-bearing	$	1,662,058	$	1,662,058	$	0	$	1,662,058	$	0
Interest-bearing demand	1,453,463		1,453,463		0		1,453,463		0
Savings	2,462,420		2,462,420		0		2,462,420		0
Time	1,317,105		1,306,674		0		1,306,674		0
Total deposits	6,895,046		6,884,615		0		6,884,615		0
Short-term borrowings	814,565		814,565		814,565		0		0
Long-term debt	119,654		117,908		0		117,908		0
Accrued interest payable	5,104		5,104		204		4,900		0

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:

	Fair Value Measurements Using						Assets/Liabilities
(Dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
December 31, 2018
Assets
Derivatives	$	0	$	29,543	$	0	$	29,543
Investment securities available-for-sale	97		2,779,158		0		2,779,255
Total	$	97	$	2,808,701	$	0	$	2,808,798
Liabilities
Derivatives	$	0	$	29,336	$	0	$	29,336

	Fair Value Measurements Using						Assets/Liabilities
(Dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
December 31, 2017
Assets
Derivatives	$	0	$	12,757	$	0	$	12,757
Investment securities available-for-sale	2,969		1,346,439		0		1,349,408
Total	$	2,969	$	1,359,196	$	0	$	1,362,165
Liabilities
Derivatives	$	0	$	12,755	$	0	$	12,755

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:

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2018
Assets
Impaired loans	$	0	$	0	$	1,320
OREO	0		0		1,089

	Fair Value Measurements Using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2017
Assets
Impaired loans	$	0	$	0	$	2,671
OREO	0		0		1,086

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BUSINESS COMBINATIONS (Tables)

12 Months Ended

Dec. 31, 2018

Business Acquisition [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value. As a condition of the merger, certain acquired assets and liabilities held for sale were divested subsequent to the closing of the merger. There was no gain or loss recorded in the Consolidated Statement of Income in conjunction with this divestiture.

(Dollars in thousands)	MainSource
Purchase consideration
Cash consideration	$	43
Stock consideration	1,043,424
Warrant consideration	14,460
Options consideration	1,577
Total purchase consideration	1,059,504
Assets acquired
Cash	71,688
Investment securities available-for-sale	900,935
Investment securities held-to-maturity	171,423
Other investments	28,763
Loans	2,792,740
Premises and equipment	98,381
Intangible assets	42,887
Other assets	167,693
Assets held for sale	127,775
Total assets acquired	4,402,285
Liabilities assumed
Deposits	3,264,038
Subordinated notes	49,027
FHLB advances	291,887
Other borrowings	205,620
Other liabilities	32,654
Liabilities held for sale	175,722
Total liabilities assumed	4,018,948
Net identifiable assets	383,337
Goodwill	$	676,167

Business Acquisition, Pro Forma Information, Nonrecurring Adjustments

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2017. The pro forma information includes adjustments for interest income on acquired loans, amortization of intangible assets arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, merger-related expenses incurred and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed date. The disclosures regarding the results of operations for MSFG subsequent to its acquisition date are omitted as this information is not practical to obtain.

	Twelve months ended
	December 31,
(Dollars in thousands, except per share data) (Unaudited)	2018		2017
Pro Forma Condensed Combined Income Statement Information
Net interest income	$	484,915	$	454,579
Net income	221,122		130,402
Basic earnings per share	$	2.27	$	1.34
Diluted earnings per share	$	2.25	$	1.33

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FIRST FINANCIAL BANCORP. (PARENT COMPANY ONLY) FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Schedule of Condensed Balance Sheet

Balance Sheets

	December 31,
(Dollars in thousands)	2018		2017
Assets
Cash	$	86,878	$	57,719
Investment securities, available for sale	694		442
Subordinated notes from subsidiaries	7,500		7,500
Investment in subsidiaries
Commercial banks	2,078,655		970,290
Nonbanks	7,194		0
Total investment in subsidiaries	2,085,849		970,290
Premises and equipment	1,361		1,378
Other assets	71,817		26,778
Total assets	$	2,254,099	$	1,064,107
Liabilities
Subordinated debentures	$	171,416	$	118,638
Dividends payable	465		10,965
Other liabilities	3,969		3,840
Total liabilities	175,850		133,443
Shareholders’ equity	2,078,249		930,664
Total liabilities and shareholders’ equity	$	2,254,099	$	1,064,107

Schedule of Condensed Income Statement

Statements of Incomeand Comprehensive Income

	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Income
Interest income	$	23		$	6		$	48
Noninterest income	0			86			2,596
Dividends from subsidiaries	107,340			54,600			52,700
Total income	107,363			54,692			55,344
Expenses
Interest expense	8,798			6,152			6,151
Salaries and employee benefits	6,413			5,519			5,445
Miscellaneous professional services	5,130			970			711
Other	5,648			4,819			4,841
Total expenses	25,989			17,460			17,148
Income before income taxes and equity in undistributed net earnings of subsidiaries	81,374			37,232			38,196
Income tax expense (benefit)	(6,687		)	(7,080		)	(5,302		)
Equity in undistributed earnings (loss) of subsidiaries	84,534			52,475			45,028
Net income	$	172,595		$	96,787		$	88,526
Comprehensive income	$	153,670		$	104,840		$	90,663

Schedule of Condensed Cash Flow Statement

Statements of Cash Flows

	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Operating activities
Net income	$	172,595		$	96,787		$	88,526
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed (earnings) loss of subsidiaries	(84,534		)	(52,475		)	(45,028		)
Depreciation and amortization	194			193			192
Stock-based compensation expense	6,219			5,446			5,354
Deferred income taxes	739			(360		)	584
(Decrease) increase in dividends payable	(10,500		)	579			135
Increase (decrease) in other liabilities	9,979			(889		)	(389		)
Decrease (increase) in other assets	16,346			(6,951		)	(9,065		)
Net cash provided by (used in) operating activities	111,038			42,330			40,309
Investing activities
Capital contributions to subsidiaries	(3,000		)	0			(53,000		)
Net cash acquired (paid) from business combinations	11,353			0			0
Proceeds from calls and maturities of investment securities	0			0			5,978
Purchases of investment securities	0			0			(333		)
Net cash (used in) provided by investing activities	8,353			0			(47,355		)
Financing activities
(Decrease) increase in short-term borrowings	(8,333		)	0			0
Cash dividends paid on common stock	(79,655		)	(41,178		)	(39,125		)
Proceeds from exercise of stock options, net of shares purchased	284			341			801
Excess tax benefit on share-based compensation	0			0			264
Other	(2,528		)	(3,059		)	(1,681		)
Net cash (used in) provided by financing activities	(90,232		)	(43,896		)	(39,741		)
Net increase (decrease) in cash	29,159			(1,566		)	(46,787		)
Cash at beginning of year	57,719			59,285			106,072
Cash at end of year	$	86,878		$	57,719		$	59,285

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance threshold for impaired and non-impaired commercial loans	$ 250,000
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

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Premises and Equipment (Details)	12 Months Ended
	Dec. 31, 2018
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	20 years
Minimum | Building and Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Minimum | Furniture, Fixtures, and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Minimum | Software, Hardware, and Data Handling Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Maximum | Building and Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	40 years
Maximum | Furniture, Fixtures, and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Maximum | Software, Hardware, and Data Handling Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years

XML

RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Recently Adopted and Issued Accounting Standards [Abstract]
Unrealized gain (loss) on debt securities	$ (190)
Operating Lease, Right-of-Use Asset	62,500
Operating Lease, Liability	68,100
Reclassification from AOCI, Current Period, Tax	$ 4,900

XML

RESTRICTIONS ON CASH AND DIVIDENDS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Restrictions on Subsidiary Dividends, Loans or Advances [Line Items]
Average Restriction on Cash and Due From Bank Accounts	$ 85.9	$ 66.7
Subsidiaries [Member]
Restrictions on Subsidiary Dividends, Loans or Advances [Line Items]
Retained Earnings, Unappropriated	637.2
Amount Available for Dividend Distribution without Affecting Capital Adequacy Requirements	$ 181.3

XML

INVESTMENT SECURITIES INVESTMENTS - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Gain (Loss) on Securities [Line Items]
Proceeds from Sale of Debt Securities, Available-for-sale	$ 290,700	$ 190,000	$ 207,000
Available-for-sale Securities, Gross Realized Gains	500	1,800	1,200
Available-for-sale Securities, Gross Realized Losses	600	200	1,000
Available For Sale Securities Net Realized Gain Loss Tax Provision	0	600	100
Securities transferred from AFS to HTM	372,128	0	0
Proceeds from Sale of Held-to-maturity Securities	0	0	$ 4,862
Pledged Financial Instruments, Not Separately Reported, Securities	$ 1,200,000	$ 800,000
NumberOfSecuritiesInSecurityPortfolio	1,417	775
NumberOfSecuritiesInUnrealizedLossPosition	504	237

XML

INVESTMENTS - Summary of Held-To-Maturity and Available-For-Sale Investment Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Investment Holdings [Line Items]
Amortized cost	$ 429,328	$ 654,008
Held To Maturity Gross Unrealized Gain Accumulated In Investments	2,212	5,572
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	7,422	6,479
Held-to-Maturity Market Value	424,118	653,101
Amortized Cost	2,792,326	1,348,227
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	9,409	8,328
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	22,480	7,147
Investment securities, available for sale	2,779,255	1,349,408
Pledged Financial Instruments, Not Separately Reported, Securities	1,200,000	800,000
U.S. Treasuries
Investment Holdings [Line Items]
Amortized cost	0	0
Held To Maturity Gross Unrealized Gain Accumulated In Investments	0	0
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	0	0
Held-to-Maturity Market Value	0	0
Amortized Cost	99	98
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	0	0
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	2	1
Investment securities, available for sale	97	97
Securities of U.S. government agencies and corporations
Investment Holdings [Line Items]
Amortized cost	0	11,168
Held To Maturity Gross Unrealized Gain Accumulated In Investments	0	0
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	0	76
Held-to-Maturity Market Value	0	11,092
Amortized Cost	32,095	15,695
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	57	220
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	233	0
Investment securities, available for sale	31,919	15,915
Residential Mortgage Backed Securities [Member]
Investment Holdings [Line Items]
Amortized cost	25,565	162,093
Held To Maturity Gross Unrealized Gain Accumulated In Investments	0	2,042
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	1,045	1,535
Held-to-Maturity Market Value	24,520	162,600
Amortized Cost	565,071	290,793
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	691	849
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	7,163	2,599
Investment securities, available for sale	558,599	289,043
Commercial Mortgage Backed Securities [Member]
Investment Holdings [Line Items]
Amortized cost	147,780	255,027
Held To Maturity Gross Unrealized Gain Accumulated In Investments	258	1,372
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	4,385	3,000
Held-to-Maturity Market Value	143,653	253,399
Amortized Cost	423,797	150,356
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	819	164
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	3,581	1,417
Investment securities, available for sale	421,035	149,103
Collateralized Mortgage Backed Securities [Member]
Investment Holdings [Line Items]
Amortized cost	12,540	143,545
Held To Maturity Gross Unrealized Gain Accumulated In Investments	0	354
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	633	1,602
Held-to-Maturity Market Value	11,907	142,297
Amortized Cost	928,586	306,095
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	4,319	1,158
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	6,158	1,861
Investment securities, available for sale	926,747	305,392
Obligations of state and other political subdivisions
Investment Holdings [Line Items]
Amortized cost	243,443	82,175
Held To Maturity Gross Unrealized Gain Accumulated In Investments	1,954	1,804
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	1,359	266
Held-to-Maturity Market Value	244,038	83,713
Amortized Cost	257,300	124,269
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	2,554	2,162
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	1,429	676
Investment securities, available for sale	258,425	125,755
Asset-backed Securities [Member]
Investment Holdings [Line Items]
Amortized cost	0	0
Held To Maturity Gross Unrealized Gain Accumulated In Investments	0	0
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	0	0
Held-to-Maturity Market Value	0	0
Amortized Cost	511,430	377,655
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	611	1,628
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	2,810	306
Investment securities, available for sale	509,231	378,977
Other securities
Investment Holdings [Line Items]
Amortized cost	0	0
Held To Maturity Gross Unrealized Gain Accumulated In Investments	0	0
Held To Maturity Securities Gross Unrealized Loss Accumulated In Investments	0	0
Held-to-Maturity Market Value	0	0
Amortized Cost	73,948	83,266
Available for Sale Securities Gross Unrealized Gain Accumulated In Investments	358	2,147
Available for Sale Securities Gross Unrealized Loss Accumulated In Investments	1,104	287
Investment securities, available for sale	$ 73,202	$ 85,126

XML

INVESTMENTS - Summary of Investment Securities by Estimated Maturity (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Held-to-Maturity Amortized Cost
Amortized cost	$ 429,328	$ 654,008
Held-to-Maturity Market Value
Held-to-Maturity Market Value	424,118	653,101
Available-for-Sale Amortized Cost
Amortized Cost	2,792,326	1,348,227
Available-for-Sale Market Value
Investment securities, available for sale	2,779,255	1,349,408
One Year or Less [Member]
Held-to-Maturity Amortized Cost
Amortized cost	0
Held-to-Maturity Market Value
Held-to-Maturity Market Value	0
Available-for-Sale Amortized Cost
Amortized Cost	5,972
Available-for-Sale Market Value
Investment securities, available for sale	5,977
After One Year Through Five Years [Member]
Held-to-Maturity Amortized Cost
Amortized cost	275
Held-to-Maturity Market Value
Held-to-Maturity Market Value	279
Available-for-Sale Amortized Cost
Amortized Cost	63,995
Available-for-Sale Market Value
Investment securities, available for sale	64,040
After Five Years Through Ten Years [Member]
Held-to-Maturity Amortized Cost
Amortized cost	21,110
Held-to-Maturity Market Value
Held-to-Maturity Market Value	21,374
Available-for-Sale Amortized Cost
Amortized Cost	133,360
Available-for-Sale Market Value
Investment securities, available for sale	133,594
After Ten Years [Member]
Held-to-Maturity Amortized Cost
Amortized cost	222,058
Held-to-Maturity Market Value
Held-to-Maturity Market Value	222,385
Available-for-Sale Amortized Cost
Amortized Cost	160,115
Available-for-Sale Market Value
Investment securities, available for sale	160,032
Collateralized Mortgage Backed Securities [Member]
Held-to-Maturity Amortized Cost
Amortized cost	12,540	143,545
Held-to-Maturity Market Value
Held-to-Maturity Market Value	11,907	142,297
Available-for-Sale Amortized Cost
Amortized Cost	928,586	306,095
Available-for-Sale Market Value
Investment securities, available for sale	926,747	305,392
Asset-backed Securities [Member]
Held-to-Maturity Amortized Cost
Amortized cost	0	0
Held-to-Maturity Market Value
Held-to-Maturity Market Value	0	0
Available-for-Sale Amortized Cost
Amortized Cost	511,430	377,655
Available-for-Sale Market Value
Investment securities, available for sale	$ 509,231	$ 378,977

XML

INVESTMENTS - Age of Gross Unrealized Losses and Associated Fair Value by Investment Category (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Investments, Unrealized Loss Position [Line Items]
Proceeds from Sale of Held-to-maturity Securities	$ 0	$ 0	$ 4,862
Less than 12 Months Fair Value	961,572	570,095
Less than 12 Months Unrealized Loss	(6,345)	(4,745)
12 Months or More Fair Value	882,865	335,516
12 Months or More Unrealized Loss	(23,557)	(8,881)
Total Fair Value	1,844,437	905,611
Total Unrealized Loss	(29,902)	(13,626)
U.S. Treasuries
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	0	97
Less than 12 Months Unrealized Loss	0	(1)
12 Months or More Fair Value	97	0
12 Months or More Unrealized Loss	(2)	0
Total Fair Value	97	97
Total Unrealized Loss	(2)	(1)
Securities of U.S. government agencies and corporations
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	0	11,092
Less than 12 Months Unrealized Loss	0	(76)
12 Months or More Fair Value	16,777	0
12 Months or More Unrealized Loss	(233)	0
Total Fair Value	16,777	11,092
Total Unrealized Loss	(233)	(76)
Residential Mortgage Backed Securities [Member]
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	186,029	175,183
Less than 12 Months Unrealized Loss	(935)	(1,109)
12 Months or More Fair Value	264,795	108,782
12 Months or More Unrealized Loss	(7,273)	(3,025)
Total Fair Value	450,824	283,965
Total Unrealized Loss	(8,208)	(4,134)
Commercial Mortgage Backed Securities [Member]
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	147,754	132,818
Less than 12 Months Unrealized Loss	(369)	(1,713)
12 Months or More Fair Value	232,363	72,139
12 Months or More Unrealized Loss	(7,597)	(2,704)
Total Fair Value	380,117	204,957
Total Unrealized Loss	(7,966)	(4,417)
Collateralized Mortgage Backed Securities [Member]
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	194,795	164,909
Less than 12 Months Unrealized Loss	(1,546)	(1,138)
12 Months or More Fair Value	240,514	101,436
12 Months or More Unrealized Loss	(5,245)	(2,325)
Total Fair Value	435,309	266,345
Total Unrealized Loss	(6,791)	(3,463)
Obligations of state and other political subdivisions
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	62,805	38,450
Less than 12 Months Unrealized Loss	(299)	(507)
12 Months or More Fair Value	86,644	21,639
12 Months or More Unrealized Loss	(2,489)	(435)
Total Fair Value	149,449	60,089
Total Unrealized Loss	(2,788)	(942)
Asset-backed Securities [Member]
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	336,437	44,941
Less than 12 Months Unrealized Loss	(2,312)	(200)
12 Months or More Fair Value	37,105	24,396
12 Months or More Unrealized Loss	(498)	(106)
Total Fair Value	373,542	69,337
Total Unrealized Loss	(2,810)	(306)
Other securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months Fair Value	33,752	2,605
Less than 12 Months Unrealized Loss	(884)	(1)
12 Months or More Fair Value	4,570	7,124
12 Months or More Unrealized Loss	(220)	(286)
Total Fair Value	38,322	9,729
Total Unrealized Loss	$ (1,104)	$ (287)

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LOANS - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2018 USD ($) loans	Dec. 31, 2017 USD ($) loans	Dec. 31, 2016 USD ($) loans	Dec. 31, 2015 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Restructured Loans | loans	196	214	247
Total restructured loans	$ 38,500,000	$ 23,900,000	$ 35,400,000
Restructured Loans, Accrual Status	16,109,000	17,545,000	30,240,000
Restructured Loans, Nonaccrual Status	22,400,000	6,400,000	5,100,000
Loans and Leases Receivable, Impaired, Commitment to Lend	0		900,000
Restructured Loans, Allowance for Loan and Lease Losses Included in Reserves	1,500,000	1,300,000	1,900,000
Restructured Loans, Portion Determined to be Uncollectible	900,000	300,000	500,000
Accruing TDRs performing in accordance with restructured terms for more than one year	7,900,000	17,200,000	22,600,000
Purchased impaired loans, carrying balance	96,320,000	104,960,000
Gain (loss) on sale of other real estate owned	(373,000)	(642,000)	1,212,000
Real Estate Acquired Through Foreclosure	1,401,000	$ 2,781,000	$ 6,284,000	$ 13,254,000
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum	$ 250,000

XML

LOANS - Commercial and Consumer Credit Exposure by Risk Attribute (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment [Line Items]
Commercial & industrial	$ 2,514,661	$ 1,912,743
Real Estate - Construction	548,935	467,730
Real Estate - Commercial	3,754,681	2,490,091
Lease financing	93,415	89,347
Total Commercial	6,911,692	4,959,911
Pass
Financing Receivable, Recorded Investment [Line Items]
Commercial & industrial	2,432,834	1,882,464
Real Estate - Construction	548,323	467,687
Real Estate - Commercial	3,664,434	2,446,999
Lease financing	90,902	88,078
Total Commercial	6,736,493	4,885,228
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Commercial & industrial	24,594	6,226
Real Estate - Construction	603	0
Real Estate - Commercial	38,653	4,436
Lease financing	0	0
Total Commercial	63,850	10,662
Substandard
Financing Receivable, Recorded Investment [Line Items]
Commercial & industrial	57,233	24,053
Real Estate - Construction	9	43
Real Estate - Commercial	51,594	38,656
Lease financing	2,513	1,269
Total Commercial	111,349	64,021
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Commercial & industrial	0	0
Real Estate - Construction	0	0
Real Estate - Commercial	0	0
Lease financing	0	0
Total Commercial	0	0
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	955,646	471,391
Residential Real Estate [Member] | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	939,936	463,459
Residential Real Estate [Member] | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	15,710	7,932
Home Equity Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	817,282	493,604
Home Equity Loan [Member] | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	811,108	489,148
Home Equity Loan [Member] | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	6,174	4,456
Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	93,212	41,586
Consumer Loan [Member] | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	93,038	41,331
Consumer Loan [Member] | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	174	255
Credit card
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	46,382	46,691
Credit card | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	46,382	46,691
Credit card | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	0	0
Installment
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	1,912,522	1,053,272
Installment | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	1,890,464	1,040,629
Installment | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, before Fees, Gross	$ 22,058	$ 12,643

XML

LOANS - Loan Delinquency, including Nonaccrual Loans (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	$ 70,190	$ 27,942
Current	8,657,704	5,880,281
Loans and Leases Receivable, Gross	8,727,894	5,908,223
Purchased impaired loans, carrying balance	96,320	104,960
Total loans and leases	8,824,214	6,013,183
Greater than 90 days past due and still accruing	63	62
30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	37,266	6,896
60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	5,536	3,179
Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	27,388	17,867
Commercial & industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	20,833	7,490
Current	2,488,450	1,901,821
Loans and Leases Receivable, Gross	2,509,283	1,909,311
Purchased impaired loans, carrying balance	5,378	3,432
Total loans and leases	2,514,661	1,912,743
Greater than 90 days past due and still accruing	0	0
Commercial & industrial | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	13,369	755
Commercial & industrial | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	41	1,657
Commercial & industrial | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	7,423	5,078
Lease financing
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	352	485
Current	93,063	88,862
Loans and Leases Receivable, Gross	93,415	89,347
Purchased impaired loans, carrying balance	0	0
Total loans and leases	93,415	89,347
Greater than 90 days past due and still accruing	0	0
Lease financing | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	352	485
Lease financing | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	0	0
Lease financing | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	0	0
Construction real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	0	234
Current	548,687	467,216
Loans and Leases Receivable, Gross	548,687	467,450
Purchased impaired loans, carrying balance	248	280
Total loans and leases	548,935	467,730
Greater than 90 days past due and still accruing	0	0
Construction real estate | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	0	234
Construction real estate | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	0	0
Construction real estate | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	0	0
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	20,081	10,694
Current	3,682,455	2,419,969
Loans and Leases Receivable, Gross	3,702,536	2,430,663
Purchased impaired loans, carrying balance	52,145	59,428
Total loans and leases	3,754,681	2,490,091
Greater than 90 days past due and still accruing	0	0
Commercial real estate | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	6,279	1,716
Commercial real estate | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	1,158	201
Commercial real estate | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	12,644	8,777
Residential real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	18,571	3,329
Current	902,404	430,500
Loans and Leases Receivable, Gross	920,975	433,829
Purchased impaired loans, carrying balance	34,671	37,562
Total loans and leases	955,646	471,391
Greater than 90 days past due and still accruing	0	0
Residential real estate | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	11,060	526
Residential real estate | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	2,976	811
Residential real estate | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	4,535	1,992
Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	9,051	4,863
Current	804,835	485,127
Loans and Leases Receivable, Gross	813,886	489,990
Purchased impaired loans, carrying balance	3,396	3,614
Total loans and leases	817,282	493,604
Greater than 90 days past due and still accruing	0	0
Home equity | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	5,245	2,716
Home equity | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	1,228	394
Home equity | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	2,578	1,753
Installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	602	413
Current	92,128	40,529
Loans and Leases Receivable, Gross	92,730	40,942
Purchased impaired loans, carrying balance	482	644
Total loans and leases	93,212	41,586
Greater than 90 days past due and still accruing	0	0
Installment | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	420	179
Installment | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	37	29
Installment | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	145	205
Credit card
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	700	434
Current	45,682	46,257
Loans and Leases Receivable, Gross	46,382	46,691
Purchased impaired loans, carrying balance	0	0
Total loans and leases	46,382	46,691
Greater than 90 days past due and still accruing	63	62
Credit card | 30 to 59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	541	285
Credit card | 60 to 89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	96	87
Credit card | Greater than 90 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, Past Due	$ 63	$ 62

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LOANS - Restructured Loans (Details)	12 Months Ended
	Dec. 31, 2018 USD ($) loans d	Dec. 31, 2017 USD ($) loans	Dec. 31, 2016 USD ($) loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Extended Maturities	$ 4,093,000	$ 3,261,000	$ 2,571,000
Adjusted Interest Rates	52,000	2,767,000	0
Combined Rate And Maturity	0	489,000	3,046,000
Forebearance Agreements	23,175,000	1,181,000	88,000
Other	985,000	75,000	3,507,000
Total	$ 28,305,000	$ 7,773,000	$ 9,212,000
Number of Restructured Loans | loans	196	214	247
Restructured loans, Number of Loans | loans	43	22	47
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 28,571,000	$ 7,995,000	$ 9,616,000
Restructured loans, Period End Balance	$ 28,305,000	$ 7,773,000	$ 9,212,000
Restructured loans with payment default within 12 months of modification, Number of Loans | loans	1	1	4
Restructured loans with payment default within 12 months of modification, Period End Balance	$ 41,000	$ 1,500,000	$ 300,000
Total restructured loans	38,500,000	23,900,000	35,400,000
Restructured Loans, Accrual Status	16,109,000	17,545,000	30,240,000
Restructured Loans, Nonaccrual Status	22,400,000	6,400,000	5,100,000
Loans and Leases Receivable, Impaired, Commitment to Lend	0		900,000
Restructured Loans, Allowance for Loan and Lease Losses Included in Reserves	1,500,000	1,300,000	1,900,000
Accruing TDRs performing in accordance with restructured terms for more than one year	$ 7,900,000	$ 17,200,000	$ 22,600,000
Restructured loans performance threshold (days) | d	90
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum	$ 250,000
Commercial & industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	17	7	18
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 23,943,000	$ 5,724,000	$ 3,402,000
Restructured loans, Period End Balance	$ 23,890,000	$ 5,661,000	$ 3,508,000
Construction real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	0	0	0
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 0	$ 0	$ 0
Restructured loans, Period End Balance	$ 0	$ 0	$ 0
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	8	8	16
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 3,385,000	$ 1,816,000	$ 5,200,000
Restructured loans, Period End Balance	$ 3,150,000	$ 1,758,000	$ 4,752,000
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	13	6	5
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 1,148,000	$ 416,000	$ 840,000
Restructured loans, Period End Balance	1,073,000	$ 315,000	$ 787,000
Restructured Loans, Loan Relationships, Review Threshold Amount Minimum	$ 250,000
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	5	1	5
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 95,000	$ 39,000	$ 165,000
Restructured loans, Period End Balance	$ 192,000	$ 39,000	$ 156,000
Installment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restructured loans, Number of Loans | loans	0	0	3
Restructured loans, Restructured loans, Pre-Modification Loan Balance	$ 0	$ 0	$ 9,000
Restructured loans, Period End Balance	$ 0	$ 0	$ 9,000

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LOANS - Nonaccrual, Restructured and Impaired Loans (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	$ 70,700	$ 24,082	$ 17,730
Restructured loans - accrual status	16,109	17,545	30,240
Total impaired loans	86,809	41,627	47,970
Interest income effect
Gross amount of interest that would have been recorded under original terms	4,656	3,397	2,848
Interest included in income
Nonaccrual loans	715	535	375
Restructured loans	642	710	876
Impaired Financing Receivable, Interest Income, Accrual Method	1,357	1,245	1,251
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	3,299	2,152	1,597
Loans and Leases Receivable-Nonaccrual, future commitment to lend	200	0	0
Restructured loans - nonaccrual status	22,400	6,400	5,100
Commercial & industrial
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	30,925	5,229	2,419
Total impaired loans	37,633	7,331
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	404	308	346
Lease financing
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	22	82	195
Total impaired loans	22	82
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	0	4	11
Construction real estate
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	9	29	0
Total impaired loans	9	29
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	2	1	0
Commercial real estate
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	20,500	10,616	6,098
Total impaired loans	25,022	21,542
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	508	603	568
Residential real estate
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	13,495	4,140	5,251
Total impaired loans	17,598	7,932
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	324	222	229
Home equity
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	5,580	3,743	3,400
Total impaired loans	6,351	4,456
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	117	103	90
Installment
Financing Receivable, Modifications [Line Items]
Nonaccrual loans	169	243	367
Total impaired loans	174	255
Interest included in income
Impaired Financing Receivable, Interest Income, Accrual Method	$ 2	$ 4	$ 7

XML

LOANS - Investment in Impaired Loans (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Current balance	$ 86,809	$ 41,627	$ 47,970
Contractual Principal Balance	104,732	47,857
Allowance for loan and lease losses	1,160	779
Average Recorded Investment	59,728	51,846	51,548
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	1,269	1,147
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	88	98
Total interest included in income	1,357	1,245	1,251
Commercial & industrial
Financing Receivable, Impaired [Line Items]
Current balance	37,633	7,331
Contractual Principal Balance	43,500	8,629
Allowance for loan and lease losses	667	169
Average Recorded Investment	15,398	14,371	14,717
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	360	280
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	44	28	37
Total interest included in income	404	308	346
Lease financing
Financing Receivable, Impaired [Line Items]
Current balance	22	82
Contractual Principal Balance	22	82
Allowance for loan and lease losses	0	0
Average Recorded Investment	21	112	364
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	0	4
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0	0	8
Total interest included in income	0	4	11
Construction real estate
Financing Receivable, Impaired [Line Items]
Current balance	9	29
Contractual Principal Balance	26	60
Allowance for loan and lease losses	0	0
Average Recorded Investment	20	601	0
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	2	1
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0	0	0
Total interest included in income	2	1	0
Commercial real estate
Financing Receivable, Impaired [Line Items]
Current balance	25,022	21,542
Contractual Principal Balance	32,884	23,957
Allowance for loan and lease losses	461	448
Average Recorded Investment	26,140	23,569	22,044
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	490	563
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	18	40	211
Total interest included in income	508	603	568
Residential real estate
Financing Receivable, Impaired [Line Items]
Current balance	17,598	7,932
Contractual Principal Balance	20,276	9,208
Allowance for loan and lease losses	32	160
Average Recorded Investment	12,254	8,728	9,126
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	301	196
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	23	26	30
Total interest included in income	324	222	229
Home equity
Financing Receivable, Impaired [Line Items]
Current balance	6,351	4,456
Contractual Principal Balance	7,461	5,499
Allowance for loan and lease losses	0	2
Average Recorded Investment	5,621	4,133	4,931
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	114	99
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	3	4	4
Total interest included in income	117	103	90
Installment
Financing Receivable, Impaired [Line Items]
Current balance	174	255
Contractual Principal Balance	563	422
Allowance for loan and lease losses	0	0
Average Recorded Investment	274	332	366
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	2	4
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0	0	0
Total interest included in income	2	4	7
Impaired Financing Receivables With Related Allowance [Member]
Financing Receivable, Impaired [Line Items]
Current balance	2,749	4,444
Contractual Principal Balance	2,749	4,452
Allowance for loan and lease losses	1,160	779
Average Recorded Investment	3,277	5,051	10,579
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method			290
Loans with no related allowance recorded [member]
Financing Receivable, Impaired [Line Items]
Current balance	84,060	37,183
Contractual Principal Balance	101,983	43,405
Allowance for loan and lease losses	0	0
Average Recorded Investment	56,451	46,795	40,969
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			961
Loans with no related allowance recorded [member] | Commercial & industrial
Financing Receivable, Impaired [Line Items]
Current balance	36,694	7,162
Contractual Principal Balance	42,561	8,460
Allowance for loan and lease losses	0	0
Average Recorded Investment	14,498	13,167	13,619
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			309
Loans with no related allowance recorded [member] | Lease financing
Financing Receivable, Impaired [Line Items]
Current balance	22	82
Contractual Principal Balance	22	82
Allowance for loan and lease losses	0	0
Average Recorded Investment	21	112	150
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			3
Loans with no related allowance recorded [member] | Construction real estate
Financing Receivable, Impaired [Line Items]
Current balance	9	29
Contractual Principal Balance	26	60
Allowance for loan and lease losses	0	0
Average Recorded Investment	20	601	0
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			0
Loans with no related allowance recorded [member] | Commercial real estate
Financing Receivable, Impaired [Line Items]
Current balance	23,513	18,423
Contractual Principal Balance	31,375	20,837
Allowance for loan and lease losses	0	0
Average Recorded Investment	24,738	20,935	14,252
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			357
Loans with no related allowance recorded [member] | Residential real estate
Financing Receivable, Impaired [Line Items]
Current balance	17,297	6,876
Contractual Principal Balance	19,975	8,145
Allowance for loan and lease losses	0	0
Average Recorded Investment	11,359	7,616	7,752
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			199
Loans with no related allowance recorded [member] | Home equity
Financing Receivable, Impaired [Line Items]
Current balance	6,351	4,356
Contractual Principal Balance	7,461	5,399
Allowance for loan and lease losses	0	0
Average Recorded Investment	5,541	4,032	4,830
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			86
Loans with no related allowance recorded [member] | Installment
Financing Receivable, Impaired [Line Items]
Current balance	174	255
Contractual Principal Balance	563	422
Allowance for loan and lease losses	0	0
Average Recorded Investment	274	332	366
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method			7
Impaired Financing Receivables With Related Allowance [Member] | Commercial & industrial
Financing Receivable, Impaired [Line Items]
Current balance	939	169
Contractual Principal Balance	939	169
Allowance for loan and lease losses	667	169
Average Recorded Investment	900	1,204	1,098
Impaired Financing Receivables With Related Allowance [Member] | Lease financing
Financing Receivable, Impaired [Line Items]
Current balance	0	0
Contractual Principal Balance	0	0
Allowance for loan and lease losses	0	0
Average Recorded Investment	0	0	214
Impaired Financing Receivables With Related Allowance [Member] | Construction real estate
Financing Receivable, Impaired [Line Items]
Current balance	0	0
Contractual Principal Balance	0	0
Allowance for loan and lease losses	0	0
Average Recorded Investment	0	0	0
Impaired Financing Receivables With Related Allowance [Member] | Commercial real estate
Financing Receivable, Impaired [Line Items]
Current balance	1,509	3,119
Contractual Principal Balance	1,509	3,120
Allowance for loan and lease losses	461	448
Average Recorded Investment	1,402	2,634	7,792
Impaired Financing Receivables With Related Allowance [Member] | Residential real estate
Financing Receivable, Impaired [Line Items]
Current balance	301	1,056
Contractual Principal Balance	301	1,063
Allowance for loan and lease losses	32	160
Average Recorded Investment	895	1,112	1,374
Impaired Financing Receivables With Related Allowance [Member] | Home equity
Financing Receivable, Impaired [Line Items]
Current balance	0	100
Contractual Principal Balance	0	100
Allowance for loan and lease losses	0	2
Average Recorded Investment	80	101	101
Impaired Financing Receivables With Related Allowance [Member] | Installment
Financing Receivable, Impaired [Line Items]
Current balance	0	0
Contractual Principal Balance	0	0
Allowance for loan and lease losses	0	0
Average Recorded Investment	$ 0	$ 0	$ 0

XML

LOANS - Changes in Other Real Estate Owned (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	$ 2,781	$ 6,284	$ 13,254
Additions	3,182	4,119	2,872
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Cost of Investment in Real Estate Sold	3,797	6,983	9,356
Valuation adjustments	(765)	(639)	(486)
Balance at end of year	1,401	2,781	6,284
Commercial & industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Additions	1,269	1,732	1,850
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Cost of Investment in Real Estate Sold	2,967	5,409	6,993
Valuation adjustments	(355)	(439)	(345)
Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Additions	1,913	2,387	1,022
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Cost of Investment in Real Estate Sold	830	1,574	2,363
Valuation adjustments	$ (410)	$ (200)	$ (141)

XML

ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in the Allowance for Loan and Lease Losses for the Previous Three Years (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for loan and lease losses
Balance at beginning of year	$ 54,021	$ 57,961	$ 53,398
Provision for loan and lease losses	14,586	3,582	10,140
Loans charged off	(20,670)	(13,663)	(11,114)
Recoveries	8,605	6,141	5,537
Allowance for Loan and Lease Losses Write-offs, Net	12,065	7,522	5,577
Commercial & industrial
Allowance for loan and lease losses
Balance at beginning of year	17,598	19,225	16,995
Provision for loan and lease losses	10,615	6,917	3,705
Loans charged off	(11,533)	(10,194)	(2,630)
Recoveries	2,066	1,650	1,155
Allowance for Loan and Lease Losses Write-offs, Net	9,467	8,544	1,475
Lease financing
Allowance for loan and lease losses
Balance at beginning of year	675	716	821
Provision for loan and lease losses	454	(42)	(106)
Loans charged off	0	0	0
Recoveries	1	1	1
Allowance for Loan and Lease Losses Write-offs, Net	(1)	(1)	(1)
Construction real estate
Allowance for loan and lease losses
Balance at beginning of year	3,577	3,282	1,810
Provision for loan and lease losses	(310)	207	1,280
Loans charged off	0	(1)	(93)
Recoveries	146	89	285
Allowance for Loan and Lease Losses Write-offs, Net	(146)	(88)	(192)
Commercial real estate
Allowance for loan and lease losses
Balance at beginning of year	20,930	26,540	23,656
Provision for loan and lease losses	847	(7,291)	5,365
Loans charged off	(4,835)	(1,038)	(4,983)
Recoveries	4,106	2,719	2,502
Allowance for Loan and Lease Losses Write-offs, Net	729	(1,681)	2,481
Residential
Allowance for loan and lease losses
Balance at beginning of year	4,683	3,208	4,014
Provision for loan and lease losses	492	1,695	(655)
Loans charged off	(422)	(435)	(387)
Recoveries	211	215	236
Allowance for Loan and Lease Losses Write-offs, Net	211	220	151
Home equity
Allowance for loan and lease losses
Balance at beginning of year	4,935	3,043	3,943
Provision for loan and lease losses	829	1,778	(175)
Loans charged off	(1,725)	(913)	(1,445)
Recoveries	1,309	1,027	720
Allowance for Loan and Lease Losses Write-offs, Net	416	(114)	725
Installment
Allowance for loan and lease losses
Balance at beginning of year	307	388	386
Provision for loan and lease losses	(85)	(90)	53
Loans charged off	(435)	(225)	(386)
Recoveries	575	234	335
Allowance for Loan and Lease Losses Write-offs, Net	(140)	(9)	51
Credit card
Allowance for loan and lease losses
Balance at beginning of year	1,316	1,559	1,773
Provision for loan and lease losses	1,744	408	673
Loans charged off	(1,720)	(857)	(1,190)
Recoveries	191	206	303
Allowance for Loan and Lease Losses Write-offs, Net	$ 1,529	$ 651	$ 887

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ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in the Allowance for Loan and Lease Losses (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	$ 56,542	$ 54,021	$ 57,961	$ 53,398
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	1,160	779
Ending allowance on loans collectively evaluated for impairment	55,382	53,242
Impaired Financing Receivable, Related Allowance	56,542	54,021
Loans and Leases:
Ending balance of loans individually evaluated for impairment	86,809	41,627
Ending balance of loans collectively evaluated for impairment	8,737,405	5,971,556
Loans and Leases Receivable, Net of Deferred Income	8,824,214	6,013,183
Provision for loan and lease losses	14,586	3,582	10,140
Allowance for Loan and Lease Losses, Write-offs	20,670	13,663	11,114
Allowance for Loan and Lease Loss, Recovery of Bad Debts	8,605	6,141	5,537
Commercial & industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	18,746	17,598	19,225	16,995
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	667	169
Ending allowance on loans collectively evaluated for impairment	18,079	17,429
Impaired Financing Receivable, Related Allowance	18,746	17,598
Loans and Leases:
Ending balance of loans individually evaluated for impairment	37,633	7,331
Ending balance of loans collectively evaluated for impairment	2,477,028	1,905,412
Loans and Leases Receivable, Net of Deferred Income	2,514,661	1,912,743
Provision for loan and lease losses	10,615	6,917	3,705
Allowance for Loan and Lease Losses, Write-offs	11,533	10,194	2,630
Allowance for Loan and Lease Loss, Recovery of Bad Debts	2,066	1,650	1,155
Lease financing
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	1,130	675	716	821
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	0	0
Ending allowance on loans collectively evaluated for impairment	1,130	675
Impaired Financing Receivable, Related Allowance	1,130	675
Loans and Leases:
Ending balance of loans individually evaluated for impairment	22	82
Ending balance of loans collectively evaluated for impairment	93,393	89,265
Loans and Leases Receivable, Net of Deferred Income	93,415	89,347
Provision for loan and lease losses	454	(42)	(106)
Allowance for Loan and Lease Losses, Write-offs	0	0	0
Allowance for Loan and Lease Loss, Recovery of Bad Debts	1	1	1
Construction real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	3,413	3,577	3,282	1,810
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	0	0
Ending allowance on loans collectively evaluated for impairment	3,413	3,577
Impaired Financing Receivable, Related Allowance	3,413	3,577
Loans and Leases:
Ending balance of loans individually evaluated for impairment	9	29
Ending balance of loans collectively evaluated for impairment	548,926	467,701
Loans and Leases Receivable, Net of Deferred Income	548,935	467,730
Provision for loan and lease losses	(310)	207	1,280
Allowance for Loan and Lease Losses, Write-offs	0	1	93
Allowance for Loan and Lease Loss, Recovery of Bad Debts	146	89	285
Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	21,048	20,930	26,540	23,656
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	461	448
Ending allowance on loans collectively evaluated for impairment	20,587	20,482
Impaired Financing Receivable, Related Allowance	21,048	20,930
Loans and Leases:
Ending balance of loans individually evaluated for impairment	25,022	21,542
Ending balance of loans collectively evaluated for impairment	3,729,659	2,468,549
Loans and Leases Receivable, Net of Deferred Income	3,754,681	2,490,091
Provision for loan and lease losses	847	(7,291)	5,365
Allowance for Loan and Lease Losses, Write-offs	4,835	1,038	4,983
Allowance for Loan and Lease Loss, Recovery of Bad Debts	4,106	2,719	2,502
Residential real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	4,964	4,683	3,208	4,014
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	32	160
Ending allowance on loans collectively evaluated for impairment	4,932	4,523
Impaired Financing Receivable, Related Allowance	4,964	4,683
Loans and Leases:
Ending balance of loans individually evaluated for impairment	17,598	7,932
Ending balance of loans collectively evaluated for impairment	938,048	463,459
Loans and Leases Receivable, Net of Deferred Income	955,646	471,391
Provision for loan and lease losses	492	1,695	(655)
Allowance for Loan and Lease Losses, Write-offs	422	435	387
Allowance for Loan and Lease Loss, Recovery of Bad Debts	211	215	236
Home equity
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	5,348	4,935	3,043	3,943
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	0	2
Ending allowance on loans collectively evaluated for impairment	5,348	4,933
Impaired Financing Receivable, Related Allowance	5,348	4,935
Loans and Leases:
Ending balance of loans individually evaluated for impairment	6,351	4,456
Ending balance of loans collectively evaluated for impairment	810,931	489,148
Loans and Leases Receivable, Net of Deferred Income	817,282	493,604
Provision for loan and lease losses	829	1,778	(175)
Allowance for Loan and Lease Losses, Write-offs	1,725	913	1,445
Allowance for Loan and Lease Loss, Recovery of Bad Debts	1,309	1,027	720
Installment
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	362	307	388	386
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	0	0
Ending allowance on loans collectively evaluated for impairment	362	307
Impaired Financing Receivable, Related Allowance	362	307
Loans and Leases:
Ending balance of loans individually evaluated for impairment	174	255
Ending balance of loans collectively evaluated for impairment	93,038	41,331
Loans and Leases Receivable, Net of Deferred Income	93,212	41,586
Provision for loan and lease losses	(85)	(90)	53
Allowance for Loan and Lease Losses, Write-offs	435	225	386
Allowance for Loan and Lease Loss, Recovery of Bad Debts	575	234	335
Credit card
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Allowance	1,531	1,316	1,559	$ 1,773
Allowance for loan and lease losses:
Ending allowance on loans individually evaluated for impairment	0	0
Ending allowance on loans collectively evaluated for impairment	1,531	1,316
Impaired Financing Receivable, Related Allowance	1,531	1,316
Loans and Leases:
Ending balance of loans individually evaluated for impairment	0	0
Ending balance of loans collectively evaluated for impairment	46,382	46,691
Loans and Leases Receivable, Net of Deferred Income	46,382	46,691
Provision for loan and lease losses	1,744	408	673
Allowance for Loan and Lease Losses, Write-offs	1,720	857	1,190
Allowance for Loan and Lease Loss, Recovery of Bad Debts	$ 191	$ 206	$ 303

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PREMISES AND EQUIPMENT - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 320,902	$ 222,550
Less accumulated depreciation and amortization	105,250	97,514
Total premises and equipment	215,652	125,036
Operating Leases, Rent Expense	9,100	7,100	$ 7,900
Land and land improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	57,701	41,711
Buildings [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	161,817	104,576
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	66,567	55,165
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	29,086	19,377
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 5,731	$ 1,721

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PREMISES AND EQUIPMENT - Operating leases (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Operating Leased Assets [Line Items]
2019	$ 9,568
2020	9,179
2021	8,284
2022	5,016
2023	4,269
Thereafter	15,496
Total	$ 51,812

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS-Schedule of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Goodwill [Roll Forward]
Balance at beginning of year	$ 204,084	$ 204,084	$ 204,084
Goodwill	676,167	0	0
Balance at end of year	$ 880,251	$ 204,084	$ 204,084

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS-Schedule of Future Amortization Expense (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	$ 8,800
Finite-Lived Intangible Assets, Amortization Expense, Year Two	7,010
Finite-Lived Intangible Assets, Amortization Expense, Year Three	5,602
Finite-Lived Intangible Assets, Amortization Expense, Year Four	3,417
Finite-Lived Intangible Assets, Amortization Expense, Year Five	$ 3,155

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS--Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 676,167	$ 0	$ 0
Other intangibles	40,800	3,800
Finite-Lived Core Deposits, Gross	37,900	3,300
Finite-Lived Intangible Assets, Period Increase (Decrease)	41,700	0	0
Finite-Lived Intangible Assets, Amortization Expense	$ 7,700	$ 1,300	$ 1,600
Core Deposits [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets amortization method	accelerated basis
Estimated weighted average life (in years)	8 years 11 months

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DEPOSITS DEPOSITS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Deposits [Abstract]
Time Deposit Maturities, Next Twelve Months	$ 1,407,996
Time Deposit Maturities, Year Two	471,183
Time Deposit Maturities, Year Three	163,575
Time Deposit Maturities, Year Four	110,170
Time Deposit Maturities, Year Five	20,112
Time Deposit Maturities, after Year Five	528
Time	$ 2,173,564	$ 1,317,105

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DEPOSITS DEPOSITS-Additional Information (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Deposits [Abstract]
Time Deposits, at or Above FDIC Insurance Limit	$ 284.9	$ 174.8

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BORROWINGS BORROWINGS - Repurchase Agreements (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Securities Sold under Agreements to Repurchase	$ 84,591
Carrying Value of Securities Sold under Repurchase Agreements and Deposits Received for Securities Loaned	85,500	$ 72,800
Residential Mortgage Backed Securities [Member]
Securities Sold under Agreements to Repurchase	22,369
Collateralized Mortgage Obligations [Member]
Securities Sold under Agreements to Repurchase	$ 62,222

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BORROWINGS - Schedule of Short-term Debt (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Short-term Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 30,000
Commitments outstanding to extend credit	0	$ 0
Short-term Debt	$ 1,040,691	$ 814,565	$ 807,912
Short-term debt interest rate	2.33%	1.32%	0.58%
Short-term debt, average for the year	$ 947,427	$ 830,365	$ 880,457
Short-term debt, average rate (as a percent)	1.90%	0.98%	0.50%
Federal Funds Purchased and Securities Sold under Agreements to Repurchase [Member]
Short-term Debt [Line Items]
Short-term Debt	$ 183,591	$ 72,265	$ 120,212
Short-term debt interest rate	1.65%	0.19%	0.12%
Short-term debt, average for the year	$ 87,221	$ 69,766	$ 89,157
Short-term debt, average rate (as a percent)	0.58%	0.19%	0.05%
Short-term debt, maximum month-end balances	$ 183,591	$ 130,633	$ 122,242
Federal Home Loan Bank Borrowings [Member]
Short-term Debt [Line Items]
Short-term Debt	$ 857,100	$ 742,300	$ 687,700
Short-term debt interest rate	2.48%	1.43%	0.66%
Short-term debt, average for the year	$ 857,028	$ 760,558	$ 791,259
Short-term debt, average rate (as a percent)	2.03%	1.05%	0.55%
Short-term debt, maximum month-end balances	$ 1,170,800	$ 957,700	$ 1,035,000
Short-term Debt [Member]
Short-term Debt [Line Items]
Short-term debt, average for the year	$ 3,178	$ 41	$ 41
Short-term debt, average rate (as a percent)	4.36%	4.07%	3.56%
Short-term debt, maximum month-end balances	$ 10,000	$ 0	$ 0

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BORROWINGS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Amount
Subordinated Debt	$ 170,550	$ 120,000
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net	(1,185)	(1,362)
FHLB long-term advances	400,599	241
Other Long-term Debt	775	775
Total long-term debt	$ 570,739	$ 119,654
Average Rate [Abstract]
Debt, Weighted Average Interest Rate	5.28%	5.13%
Federal Home Loan Bank	2.08%	1.09%
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	0.00%	0.00%
Long-term Debt, Weighted Average Interest Rate, at Point in Time	3.04%	5.14%
Maturities of Long-term Debt [Abstract]
2019	$ 157,914
2020	104,274
2021	19,007
2022	49,404
2023	0
Thereafter	$ 240,140

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BORROWINGS Borrowings - - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Subordinated Debt	$ 170,550	$ 120,000
Debt, Weighted Average Interest Rate	5.28%	5.13%
Commitments outstanding to extend credit	$ 0	$ 0
Subordinated debt, original issue	$ 120,000
Subordinated Borrowing, Interest Rate	5.125%
Book value of FHLB collateral	$ 5,700,000
Private Placement [Member]
Debt Instrument [Line Items]
Subordinated Debt	$ 8,400
Debt, Weighted Average Interest Rate	7.40%
Subordinated Debt [Member]
Debt Instrument [Line Items]
Subordinated Debt	$ 49,500
Debt Instrument Maturity Period	30 years
DebtInstrumentMinimumCallablePeriod	5 years
Private Placement [Member]
Debt Instrument [Line Items]
DebtInstrumentMinimumCallablePeriod	5 years

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DERIVATIVES - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) entity	Dec. 31, 2017 USD ($) entity
Derivative [Line Items]
Maximum derivative notional position as a percentage of assets	35.00%
Maximum credit exposure as a percentage of capital	3.00%
Maximum single counterparty credit risk exposure	$ 20,000
Number of counterparties | entity	13	13
Derivative Asset	$ 29,189	$ 12,682
Interest-bearing deposit swap	2,719,980	1,674,080
Derivative Liability	29,188	12,687
Other Credit Derivatives [Member]
Derivative [Line Items]
Outstanding liability from counterparty contracts		100
Interest-bearing deposit swap	12,300	15,400
Interest Rate Lock Commitments [Member]
Derivative [Line Items]
Interest-bearing deposit swap	20,800	12,300
Credit Risk Contract [Member]
Derivative [Line Items]
Outstanding liability from counterparty contracts	100	54
Interest-bearing deposit swap	138,400	95,900
Derivative [Member] | Other Liabilities [Member]
Derivative [Line Items]
Derivative Asset	4,900
Interest-bearing deposit swap	$ 1,400,000	837,500
Derivative Liability		$ 1,300

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DERIVATIVES - Summary of Derivative Financial Instruments and Balances (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Interest-bearing deposit swap	$ 2,719,980	$ 1,674,080
Derivative Asset	29,189	12,682
Estimate Fair Value Loss	(29,188)	(12,687)
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other liabilities
Derivatives, Fair Value [Line Items]
Interest-bearing deposit swap	1,359,990	837,040
Derivative Asset	11,787	5,529
Estimate Fair Value Loss	(17,401)	(7,158)
Fair Value Hedges | Matched interest rate swaps | Accrued interest and other assets
Derivatives, Fair Value [Line Items]
Interest-bearing deposit swap	1,359,990	837,040
Derivative Asset	17,402	7,153
Estimate Fair Value Loss	$ (11,787)	$ (5,529)

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DERIVATIVES DERIVATIVES - Disclosure by Type of Financial Instrument (Details) - Fair Value Hedges - Matched interest rate swaps - Accrued interest and other liabilities - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	$ 29,189	$ 12,687
Derivative Liability, Fair Value, Gross Asset	(14,577)	2,279
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	$ 14,612	$ 14,966

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DERIVATIVES - Derivative Financial Instruments, Average Remaining Maturity and the Weighted-Average Interest Rates being Paid and Received (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Derivative [Line Items]
Notional Value	$ 2,719,980	$ 1,674,080
Asset conversion swaps
Derivative [Line Items]
Notional Value	$ 2,719,980
Average Maturity (years)	6 years 2 months
Fair Value	$ 1
Weighted-Average Rate Receive	4.68%
Weighted-Average Rate Pay	4.68%
Asset conversion swaps | Derivative Financial Instruments Receive Fixed Pay Variable
Derivative [Line Items]
Notional Value	$ 1,359,990
Average Maturity (years)	6 years 2 months
Fair Value	$ 5,615
Weighted-Average Rate Receive	4.70%
Weighted-Average Rate Pay	4.67%
Asset conversion swaps | Derivative Financial Instruments Receive Variable Pay Fixed
Derivative [Line Items]
Notional Value	$ 1,359,990
Average Maturity (years)	6 years 2 months
Fair Value	$ (5,614)
Weighted-Average Rate Receive	4.67%
Weighted-Average Rate Pay	4.70%

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RELATED PARTIES TRANSACTIONS (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Loans to Related Parties [Roll Forward]
Beginning balance	$ 9,873
Additions	2,108
Deductions	(9,249)
Ending balance	2,732
Loans 90 days past due	$ 0

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COMMITMENTS AND CONTINGENCIES (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies Disclosure [Line Items]
Reserves for unfunded commitments	$ 700,000	$ 500,000
Letters of credit issued to guarantee performance of a client to a third party	32,700,000	25,300,000
Affordable Housing Program Obligation	39,400,000	35,900,000
Commitments outstanding to extend credit	0	0
Loans and Leases Receivable, Commitments, Variable Rates	2,900,000,000
Effective Income Tax Rate Reconciliation, Tax Credit, Amount	5,439,000	16,806,000	$ 2,691,000
Income tax expense	41,626,000	19,376,000	42,205,000
Other Noninterest Expense	36,089,000	35,556,000	$ 17,182,000
Amortization Method Qualified Affordable Housing Project Investments, Amortization	5,700,000	4,200,000
Affordable housing contingent commitment	0	0
Estimated Litigation Liability	0	0
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets	3,900,000	3,000,000
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount	3,900,000	$ 3,000,000
Loans and Leases Receivable, Commitments, Fixed Rates	$ 174,000,000
Loan Commitments, Fixed Interest Rate Range, Minimum	0.00%
Loan Commitments, Fixed Interest Rate Range, Maximum	21.00%
Loan Commitments, Fixed Rate, Maturities, Minimum	1 year	1 year
Loan Commitments, Fixed Rate, Maturities, Maximum	30 years	29 years
Commitments to Extend Credit
Commitments and Contingencies Disclosure [Line Items]
Commitments outstanding to extend credit	$ 3,000,000,000	$ 2,100,000,000
Minimum
Commitments and Contingencies Disclosure [Line Items]
Loans and Leases Receivable, Commitments, Variable Rates		0.0000
Maximum
Commitments and Contingencies Disclosure [Line Items]
Loans and Leases Receivable, Commitments, Variable Rates		0.2100
Affordable housing investment [Member]
Commitments and Contingencies Disclosure [Line Items]
Effective Income Tax Rate Reconciliation, Tax Credit, Amount	4,900,000	3,200,000
Historic tax credit [Member]
Commitments and Contingencies Disclosure [Line Items]
Effective Income Tax Rate Reconciliation, Tax Credit, Amount	$ 500,000	13,700,000
Income tax expense		12,500,000
Other Noninterest Expense		$ 11,300,000

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INCOME TAXES (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current expense [Abstract]
Federal	$ 34,330	$ 22,599	$ 40,537
State	1,029	1,265	1,322
Total current expense	35,359	23,864	41,859
Deferred (benefit) expense [Abstract]
Federal	4,675	(4,657)	528
State	1,592	169	(182)
Total deferred (benefit) expense	6,267	(4,488)	346
Income tax expense	41,626	19,376	42,205
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Income taxes computed at federal statutory rate on income before income taxes (21% in 2018; 35% in 2017 and 2016)	44,986	40,657	45,756
Benefit from tax-exempt income	(4,499)	(3,427)	(2,911)
Tax credits	(5,439)	(16,806)	(2,691)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	0	(8,191)	0
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount	0	4,599	0
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount	(565)	(1,449)	(72)
State income taxes, net of federal tax benefit	2,070	932	741
Effective Income Tax Rate Reconciliation, ASU 2014-10, Affordable Housing Amortization, Amount	4,725	2,798	1,923
Other	348	263	(541)
Income tax expense	41,626	19,376	42,205
Deferred tax assets [Abstract]
Allowance for loan and lease losses	12,782	12,134
Deferred Tax Assets Fair Value Adjustments On Acquisitions	11,199	369
Deferred compensation	392	384
Postretirement benefits other than pension liability	676	564
Accrued stock-based compensation	1,145	932
Other real estate owned write-downs	118	97
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Impairment Losses	1,160	616
Accrued expenses	5,808	3,051
Deferred Tax Assets, Unrealized Losses on Investment Securities and Derivatives	3,221	249
Deferred Tax Assets, Operating Loss Carryforwards, State and Local	3,119	0
Deferred Tax Assets, Tax Credit Carryforwards	873	0
Other	425	339
Total deferred tax assets	40,918	18,735
Deferred tax liabilities [Abstract]
Tax depreciation greater than book depreciation	(9,530)	(2,510)
FHLB and FRB stock	(4,044)	(3,384)
Mortgage-servicing rights	(2,285)	(343)
Leasing activities	(3,881)	(2,792)
Deferred Tax Liabilities, Prepaid Pension Cost	6,614	8,888
Intangible assets	(12,310)	(11,559)
Deferred loan fees and costs	(131)	(371)
Prepaid expenses	(582)	(210)
Deferred Tax Liabilities, Partnership Interests	2,367	1,230
Other	(1,867)	(2,415)
Deferred Tax Liabilities, Gross	(43,611)	(33,702)
Total deferred tax liabilities	(2,693)	(14,967)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract]
Balance at beginning of year	3,735	3,735
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions	0	0
Balance at end of year	$ 3,735	$ 3,735	$ 3,735
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	35.00%	35.00%
Deferred Tax Assets Operating Loss Carryforwards State And Local Acquired	$ 3,900
Tax Credit Carryforward, Amount	900
Deferred taxes, business combination, valuation allowance	0	$ 0
Retained Earnings For Which No Deferred Income Tax Liability Has Been Recognized	16,100
Deferred Tax Liability Not Recognized Amount Of Liability Related To Allocation Of Previously Acquired Institutions	3,400
Unrecognized tax benefits affecting income tax rate	2,900	2,900
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	$ 0	$ 0

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EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Pension Cost (Reversal of Cost)	$ 859	$ (628)	$ (1,153)
Payment for Pension Benefits	$ 0	0	0
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year				$ 0
Defined Contribution Plan, Maximum Annual Contribution Percent by Employee	50.00%
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of year	$ 71,154	62,729
Service cost	6,501	4,894	5,034
Interest cost	2,394	2,325	2,262
Actuarial gain (loss)	(4,032)	6,107
Defined Benefit Plan, Benefit Obligation, Benefits Paid	7,731	4,901
Benefit obligation at end of year	68,286	71,154	62,729
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	144,349	131,011
Actual return on plan assets	(6,540)	18,239
Defined Benefit Plan, Plan Assets, Benefits Paid	7,731	4,901
Fair value of plan assets at end of year	130,078	144,349	131,011
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract]
Assets				61,792	$ 73,195
Liabilities				0	0
Net amount recognized				61,792	73,195
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), after Tax [Abstract]
Net actuarial loss				43,711	33,580
Net prior service cost				(1,508)	(1,921)
Deferred tax assets				(9,613)	(12,028)
Net amount recognized				32,590	19,631	$ 22,803	$ 24,048
Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Adjustment and Disproportionate Tax Effect Net Of Tax	12,959
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	8,180	(3,172)	(1,245)
Accumulated benefit obligation				66,320	69,678
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	6,501	4,894	5,034
Interest cost	2,394	2,325	2,262
Expected return on plan assets	(9,811)	(9,358)	(9,644)
Amortization of prior service cost	(413)	(413)	(413)
Defined Benefit Plan, Amortization of Gain (Loss)	2,188	1,924	1,608
Net periodic benefit (income) cost	859	(628)	(1,153)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax [Abstract]
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), before Tax	12,319	(2,775)	(884)
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), before Tax	0	0	0
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Prior Service Cost, before Tax	413	413	413
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, before Tax	(2,188)	(1,924)	(1,608)
Total recognized in accumulated other comprehensive income	10,544	(4,286)	(2,079)
Total recognized in net periodic benefit cost and accumulated other comprehensive income	$ 11,403	$ (4,914)	$ (3,232)
Amortization of loss				1,867	2,090	1,754
Amortization of prior service credit				$ (413)	$ (413)	$ (413)
Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
Discount rate				4.31%	3.43%	3.88%
Rate of compensation increase				3.50%	3.50%	3.50%
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Discount rate	3.43%	3.88%	4.05%
Expected return on plan assets	7.25%	7.25%	7.50%
Rate of compensation increase	3.50%	3.50%	3.50%
Fair value measurments	$ 144,349	$ 131,011	$ 131,011	$ 130,078	$ 144,349	$ 131,011
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract]
2019				4,396
2020				5,280
2021				5,229
2022				4,739
2023				4,917
Thereafter				29,948
Defined Contribution Plan [Abstract]
Defined Contribution Plan, Cost	0	1,900	$ 800
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends				130,078	144,349
Fair Value, Inputs, Level 1 [Member]
Defined Contribution Plan [Abstract]
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends				122,025	137,496
Fair Value, Inputs, Level 2 [Member]
Defined Contribution Plan [Abstract]
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends				8,053	6,853
Fair Value, Inputs, Level 3 [Member]
Defined Contribution Plan [Abstract]
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends				0	0
Cash
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	175
Fair value of plan assets at end of year	216	175
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	175	175		216	175
Cash | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	175
Fair value of plan assets at end of year	216	175
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	175	175		216	175
Cash | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
Cash | Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
US Government Agencies Debt Securities [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	6,853
Fair value of plan assets at end of year	8,053	6,853
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	6,853	6,853		8,053	6,853
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	6,853
Fair value of plan assets at end of year	8,053	6,853
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	6,853	6,853		8,053	6,853
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
Fixed income mutual funds
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	69,154
Fair value of plan assets at end of year	74,453	69,154
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	69,154	69,154		74,453	69,154
Fixed income mutual funds | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	69,154
Fair value of plan assets at end of year	74,453	69,154
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	69,154	69,154		74,453	69,154
Fixed income mutual funds | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
Fixed income mutual funds | Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
Equity mutual funds
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	68,167
Fair value of plan assets at end of year	47,356	68,167
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	68,167	68,167		47,356	68,167
Equity mutual funds | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	68,167
Fair value of plan assets at end of year	47,356	68,167
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	68,167	68,167		47,356	68,167
Equity mutual funds | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	0	0		0	0
Equity mutual funds | Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	0
Fair value of plan assets at end of year	0	0
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Fair value measurments	$ 0	$ 0		$ 0	$ 0

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EMPLOYEE BENEFIT PLANS Defined Benefit Plan, Fair Value on Plan Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
defined benefit plan, fair value of plan assets excluding accrued interest and dividends [Line Items]
Defined Benefit Plan, Plan Assets, Benefits Paid	$ 7,731	$ 4,901
Defined Contribution Plan, Cost	0	1,900	$ 800
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends	130,078	144,349
Fair Value, Inputs, Level 1 [Member]
defined benefit plan, fair value of plan assets excluding accrued interest and dividends [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends	122,025	137,496
Fair Value, Inputs, Level 2 [Member]
defined benefit plan, fair value of plan assets excluding accrued interest and dividends [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends	8,053	6,853
Fair Value, Inputs, Level 3 [Member]
defined benefit plan, fair value of plan assets excluding accrued interest and dividends [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets Excluding Accrued Interest and Dividends	$ 0	$ 0

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REVENUE RECOGNITION REVENUE RECOGNITION (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
Revenue Recognition and Deferred Revenue [Abstract]
Interchange income	$ 31.3
Credit card expense	$ 11.0

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Other Comprehensive Income (Loss), before Reclassification Adjustments and Tax [Abstract]
Unrealized gain (loss) on debt securities	$ (14,461)	$ 8,447	$ 751
Unrealized gain (loss) on derivatives	628	810	809
Retirement obligations	(12,319)	2,775	884
Total	(26,152)	12,032	2,444
Other Comprehensive Income (Loss) Reclassifications before Tax [Abstract]
Unrealized gain (loss) on debt securities	(161)	1,649	234
Unrealized gain (loss) on derivatives	0	0	0
Retirement obligation	1,775	1,511	1,195
Total	(1,936)	138	(961)
Transactions Pre-tax
Unrealized gain (loss) on debt securities	(14,300)	6,798	517
Unrealized gain (loss) on derivatives	628	810	809
Retirement obligation	(10,544)	4,286	2,079
Total	(24,216)	11,894	3,405
Transactions Tax-effect
Unrealized gain (loss) on debt securities	3,071	(2,431)	(133)
Unrealized gain (loss) on derivatives	(144)	(296)	(301)
Retirement obligation	2,364	(1,114)	(834)
Total	5,291	(3,841)	(1,268)
Transactions Net of tax
Unrealized gain (loss) on debt securities	(11,229)	4,367	384
Unrealized gain (loss) on derivatives	484	514	508
Retirement obligation	(8,180)	3,172	1,245
Total	(18,925)	8,053	2,137
Cumulative effect of accounting change
Unrealized gain (loss) on debt securities	(190)
Unrealized gain (loss) on derivatives	(124)
Retirement obligation	(4,779)
Total	(5,093)
Balances Net of tax
Unrealized gain (loss) on debt securities	(11,601)	(182)	(4,549)	$ (4,933)
Unrealized gain (loss) on derivatives	(217)	(577)	(1,091)	(1,599)
Retirement obligation	(32,590)	(19,631)	(22,803)	(24,048)
Total	$ (44,408)	$ (20,390)	$ (28,443)	$ (30,580)

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ACCUMULATED OTHER COMPREHENSIVE INCOME AMOUNT RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Realized gains and losses on securities available for sale	$ (161)	$ 1,649	$ 234
Amortization of prior service cost	413	413	413
Recognized net actuarial loss	(2,188)	(1,924)	(1,608)
Other Comprehensive Income, Reclassification, Amortization of Defined Benefit Plans items, Pre-tax	(1,775)	(1,511)	(1,195)
Total reclassifications for the period, before tax	$ (1,936)	$ 138	$ (961)

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CAPITAL - Risk-Based Capital (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Equity Tier One Capital	$ 1,215,613	$ 755,735
Subordinated debt, original issue	120,000
Excess Capital	$ 432,800
Risk Based Ratios [Abstract]
Common Equity Tier One Capital to Risk-Weighted Assets	11.87%	10.63%
Common Equity Tier One Capital Required for Capital Adequacy	$ 652,874	$ 408,746
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets	6.375%	5.75%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy Fully Phased In Basel III	$ 716,881	$ 497,604
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets Fully Phased In Basel III	7.00%	7.00%
Tier One Risk Based Capital	$ 1,257,366	$ 755,839
Tier One Risk Based Capital to Risk Weighted Assets	12.28%	10.63%
Tier One Risk Based Capital Required for Capital Adequacy	$ 806,491	$ 515,376
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.875%	7.25%
Capital Conservation Buffer-Fully Phased-In	2.50%
Capital Conservation Buffer-Phased-In Incremental Change	0.625%
Tier One Risk Based Capital [Abstract]
Tier One Risk Based Capital Required for Capital Adequacy Fully Phased In Basel III	$ 870,499	$ 604,233
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets Fully Phased In Basel III	8.50%	8.50%
Capital	$ 1,444,146	$ 929,148
Capital to Risk Weighted Assets	14.10%	13.07%
Capital Required for Capital Adequacy	$ 1,011,314	$ 657,548
Capital Required for Capital Adequacy to Risk Weighted Assets	9.875%	9.25%
Capital [Abstract]
Capital Required for Capital Adequacy Fully Phased In Basel III	$ 1,075,322	$ 746,406
Capital Required for Capital Adequacy to Risk Weighted Assets Fully Phased In Basel III	10.50%	10.50%
Tier One Leverage Capital	$ 1,257,366	$ 755,839
Tier One Leverage Capital [Abstract]
Tier One Leverage Capital Required for Capital Adequacy Fully Phased In Basel III	$ 517,958	$ 342,198
Tier One Leverage Capital Required for Capital Adequacy to Average Assets Fully Phased In Basel III	4.00%	4.00%
Tier One Leverage Capital to Average Assets	9.71%	8.84%
Tier One Leverage Capital Required for Capital Adequacy	$ 517,958	$ 342,198
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Subsidiaries [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Equity Tier One Capital	$ 1,279,492	$ 794,251
Risk Based Ratios [Abstract]
Common Equity Tier One Capital to Risk-Weighted Assets	12.50%	11.21%
Common Equity Tier One Capital Required for Capital Adequacy	$ 652,590	$ 407,220
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets	6.375%	5.75%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy Fully Phased In Basel III	$ 716,570	$ 495,746
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets Fully Phased In Basel III	7.00%	7.00%
Tier One Risk Based Capital	$ 1,279,596	$ 794,355
Tier One Risk Based Capital to Risk Weighted Assets	12.50%	11.22%
Tier One Risk Based Capital Required for Capital Adequacy	$ 806,141	$ 513,452
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.875%	7.25%
Common Equity Tier One Risk Based Capital Required to be Well Capitalized To Risk Weighted Assets	$ 665,386	$ 460,336
Common Equity Tier One Risk Based Capital Required to be Well Capitalized To Risk Weighted Assets	6.50%	6.50%
Tier One Risk Based Capital [Abstract]
Tier One Risk Based Capital Required for Capital Adequacy Fully Phased In Basel III	$ 870,120	$ 601,978
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets Fully Phased In Basel III	8.50%	8.50%
Capital	$ 1,344,388	$ 856,363
Capital to Risk Weighted Assets	13.13%	12.09%
Capital Required for Capital Adequacy	$ 1,010,875	$ 655,093
Capital Required for Capital Adequacy to Risk Weighted Assets	9.875%	9.25%
Capital [Abstract]
Capital Required for Capital Adequacy to Risk Weighted Assets	$ 818,937	$ 566,567
Capital Required for Capital Adequacy Fully Phased In Basel III	$ 1,074,855	$ 743,619
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	8.00%	8.00%
Capital Required for Capital Adequacy to Risk Weighted Assets Fully Phased In Basel III	10.50%	10.50%
Tier One Leverage Capital	$ 1,279,596	$ 794,355
Tier One Leverage Capital [Abstract]
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	1,023,671	708,209
Tier One Leverage Capital Required for Capital Adequacy Fully Phased In Basel III	$ 517,710	$ 342,113
Capital Required to be Well Capitalized to Risk Weighted Assets	10.00%	10.00%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets Fully Phased In Basel III	4.00%	4.00%
Tier One Leverage Capital to Average Assets	9.89%	9.29%
Tier One Leverage Capital Required for Capital Adequacy	$ 517,710	$ 342,113
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	$ 647,138	$ 427,642
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	5.00%	5.00%

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CAPITAL - Share Repurchase (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018	Oct. 23, 2012
Capital [Abstract]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased				5,000,000
Treasury Stock, Shares, Acquired	0	0
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased			3,509,133

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STOCK OPTIONS AND AWARDS (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 6,219	$ 5,446	$ 5,354
Total unrecognized compensation cost				$ 6,900
Unrecognized compensation cost, period for recognition (in years)	1 year 343 days
Share-based Compensation Arrangement by Share-based Payment Award, Option Term	10 years
Options outstanding at end of year	11,800	11,800		62,410
Number of Shares Available for Grant				1,877,079
Activity for stock option plan [Roll Forward]
Outstanding at beginning of year (in shares)	11,800
Granted (in shares)	0	0	0
Exercised (in shares)	(32,941)
Forfeited or expired (in shares)	0
Outstanding at end of year (in shares)	62,410	11,800
Exercised (in shares)				62,410
Weighted average exercise price, outstanding at beginning of year (in dollars per share)	$ 11.64
Weighted average exercise price, granted (in dollars per share)	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Other Share Increase (Decrease)	83,551
Share-based Compensation Arrangements by Share-based Payment Award, Options, Other Share Increase (Decrease) in Period, Weighted Average Exercise Price	$ 8.54
Weighted average exercise price, exercised (in dollars per share)	8.62
Weighted average exercise price, forfeited or expired (in dollars per share)	0.00
Weighted average exercise price, outstanding at end of year (in dollars per share)	$ 9.08	$ 11.64
Weighted average exercise price, Exercisable (in dollars per share)				$ 9.08
Weighted average remaining contractual term, outstanding at end of year (in years)	3 years 263 days
Weighted average remaining contractual life, exercisable at end of year (in years)	3 years 263 days
Aggregate intrinsic value, outstanding at end of year				$ 914
Aggregate intrinsic value, exercisable at end of year				$ 914
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract]
Total intrinsic value of options exercised	$ 734	$ 1,533	$ 661
Proceeds from exercise of stock options	284	341	801
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options	1,439	1,991	1,958
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested in period, total fair value	$ 5,600	$ 5,600	$ 4,400
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Number of shares nonvested at beginning of year	468,372	648,817	643,641
Number of shares granted	303,930	234,529	317,695
Number of shares vested	(267,031)	(307,825)	(263,713)
Number of shares forfeited	(42,825)	(107,149)	(48,806)
Number of shares nonvested at end of year	462,446	468,372	648,817
Weighted average of shares fair value, nonvested at beginning of year	$ 21.63	$ 17.82	$ 17.21
Weighted average of shares fair value granted	28.94	27.36	18.13
Weighted average of shares fair value vested	20.94	18.12	16.82
Weighted average of shares fair value forfeited	26.38	21.18	17.37
Weighted average of shares fair value, nonvested at end of year	$ 26.39	$ 21.63	$ 17.82

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EARNINGS PER COMMON SHARE - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator for basic and diluted earnings per share -income available to common shareholders:
Net income	$ 172,595	$ 96,787	$ 88,526
Denominator for basic earnings per share - weighted average shares	88,582,090	61,529,460	61,206,093
Effect of dilutive securities -
Employee stock awards	514,680	581,329	729,335
Warrants	517,435	60,801	49,994
Denominator for diluted earnings per share - adjusted weighted average shares	89,614,205	62,171,590	61,985,422
Basic	$ 1.95	$ 1.57	$ 1.45
Diluted	$ 1.93	$ 1.56	$ 1.43

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EARNINGS PER COMMON SHARE - Additional Information (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Earnings Per Share Disclosure [Line Items]
Investment Warrants, Exercise Price	$ 12.12
Preferred Stock, Shares Outstanding	0	0	0
Preferred Stock, Shares Authorized	10,000,000	10,000,000
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	0
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		104,200	114,678
MainSource [Member]
Earnings Per Share Disclosure [Line Items]
Investment Warrants, Exercise Price	$ 10.62
MainSource [Member] | 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	804,858

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FAIR VALUE DISCLOSURES - Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Financial assets
Investment securities held-to-maturity	$ 429,328	$ 654,008
Other investments	115,660	53,140
Deposits
Noninterest-bearing	2,492,434	1,662,058
Savings	3,167,325	2,462,420
Time	2,173,564	1,317,105
Total deposits	10,140,394	6,895,046
Carrying value
Financial assets
Cash and short-term investments	273,959	184,624
Investment securities held-to-maturity	429,328	654,008
Other investments	115,660	53,140
Loans held for sale	4,372	11,502
Loans and leases, net of ALLL	8,767,672	5,959,162
Interest Receivable	41,816	24,496
Deposits
Noninterest-bearing	2,492,434	1,662,058
Interest-bearing demand	2,307,071	1,453,463
Savings	3,167,325	2,462,420
Time	2,173,564	1,317,105
Total deposits	10,140,394	6,895,046
Short-term borrowings	1,040,691	814,565
Long-term debt	570,739	119,654
Interest Payable	12,126	5,104
Fair value
Financial assets
Cash and short-term investments	273,959	184,624
Investment securities held-to-maturity	424,118	653,101
Loans held for sale	4,372	11,502
Loans and leases, net of ALLL	8,662,868	6,006,656
Interest Receivable	41,816	24,496
Deposits
Noninterest-bearing	2,492,434	1,662,058
Interest-bearing demand	2,307,071	1,453,463
Savings	3,167,325	2,462,420
Time	2,146,645	1,306,674
Total deposits	10,113,475	6,884,615
Short-term borrowings	1,040,691	814,565
Long-term debt	557,933	117,908
Interest Payable	12,126	5,104
Fair Value, Inputs, Level 1 [Member] | Fair value
Financial assets
Cash and short-term investments	273,959	184,624
Investment securities held-to-maturity	0	0
Loans held for sale	0	0
Loans and leases, net of ALLL	0	0
Interest Receivable	0	0
Deposits
Noninterest-bearing	0	0
Interest-bearing demand	0	0
Savings	0	0
Time	0	0
Total deposits	0	0
Short-term borrowings	1,040,691	814,565
Long-term debt	0	0
Interest Payable	2,035	204
Fair Value, Inputs, Level 2 [Member] | Fair value
Financial assets
Cash and short-term investments	0	0
Investment securities held-to-maturity	424,118	653,101
Loans held for sale	4,372	11,502
Loans and leases, net of ALLL	0	0
Interest Receivable	13,819	8,265
Deposits
Noninterest-bearing	2,492,434	1,662,058
Interest-bearing demand	2,307,071	1,453,463
Savings	3,167,325	2,462,420
Time	2,146,645	1,306,674
Total deposits	10,113,475	6,884,615
Short-term borrowings	0	0
Long-term debt	557,933	117,908
Interest Payable	10,091	4,900
Fair Value, Inputs, Level 3 [Member] | Fair value
Financial assets
Cash and short-term investments	0	0
Investment securities held-to-maturity	0	0
Loans held for sale	0	0
Loans and leases, net of ALLL	8,662,868	6,006,656
Interest Receivable	27,997	16,231
Deposits
Noninterest-bearing	0	0
Interest-bearing demand	0	0
Savings	0	0
Time	0	0
Total deposits	0	0
Short-term borrowings	0	0
Long-term debt	0	0
Interest Payable	$ 0	$ 0

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FAIR VALUE DISCLOSURES - Summary of Financial Assets and Liabilities Measure at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Assets
Derivatives	$ 29,189	$ 12,682
Investment securities, available for sale	2,779,255	1,349,408
Liabilities
Derivatives	29,188	12,687
Fair Value, Measurements, Recurring
Assets
Derivatives	29,543	12,757
Investment securities, available for sale	2,779,255	1,349,408
Total	2,808,798	1,362,165
Liabilities
Derivatives	29,336	12,755
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member]
Assets
Derivatives	0	0
Investment securities, available for sale	97	2,969
Total	97	2,969
Liabilities
Derivatives	0	0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 [Member]
Assets
Derivatives	29,543	12,757
Investment securities, available for sale	2,779,158	1,346,439
Total	2,808,701	1,359,196
Liabilities
Derivatives	29,336	12,755
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member]
Assets
Derivatives	0	0
Investment securities, available for sale	0	0
Total	0	0
Liabilities
Derivatives	$ 0	$ 0

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FAIR VALUE DISCLOSURES - Summary of Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Detail) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Inputs, Level 1 [Member]
Assets
Impaired loans	$ 0	$ 0
Other Real Estate Owned, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member]
Assets
Impaired loans	0	0
Other Real Estate Owned, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 3 [Member]
Assets
Impaired loans	1,320	2,671
Other Real Estate Owned, Fair Value Disclosure	$ 1,089	$ 1,086

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BUSINESS COMBINATIONS - Additional Information - Narrative (Details) - USD ($) $ in Thousands		12 Months Ended
	Apr. 01, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Business Acquisition, Number Of Shares Received by Acquiree	1.3875
Business Combination, Consideration Transferred	$ 1,100,000	$ 1,059,504
Goodwill		676,167	$ 0	$ 0
Payments for Merger Related Costs		37,800
Loans	2,800,000	$ 2,792,740
Business Combination, Acquired Receivables, Gross Contractual Amount	$ 2,900,000

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BUSINESS COMBINATION BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands		12 Months Ended
	Apr. 01, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Cash consideration		$ 43
Stock consideration		1,043,424
Warrant consideration		14,460
Options consideration		1,577
Total purchase consideration	$ 1,100,000	1,059,504
Cash		71,688
Investment securities available-for-sale		900,935
Investment securities held-to-maturity		171,423
Other investments		28,763
Loans	$ 2,800,000	2,792,740
Premises and equipment		98,381
Intangible assets		42,887
Other assets		167,693
Assets held for sale		127,775
Total assets acquired		4,402,285
Deposits		3,264,038
Subordinated notes		49,027
FHLB advances		291,887
Other borrowings		205,620
Other liabilities		32,654
Liabilities held for sale		175,722
Total liabilities assumed		4,018,948	$ 0	$ 0
Net identifiable assets		383,337
Goodwill		$ 676,167	$ 0	$ 0

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BUSINESS COMBINATION BUSINESS COMBINATIONS - Pro Forma Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Business Combinations [Abstract]
Business Acquisition, Pro Forma Revenue	$ 484,915	$ 454,579
Business Acquisition, Pro Forma Net Income	$ 221,122	$ 130,402
Business Acquisition, Pro Forma Earnings Per Share, Basic	$ 2.27	$ 1.34
Business Acquisition, Pro Forma Earnings Per Share, Diluted	$ 2.25	$ 1.33

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FIRST FINANCIAL BANCORP. (PARENT COMPANY ONLY) FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Cash	$ 150,650	$ 121,598	$ 114,841	$ 236,221	$ 150,650	$ 121,598	$ 114,841
Investment securities, available for sale				2,779,255	1,349,408
Other investments				115,660	53,140
Premises and equipment				215,652	125,036
Total assets				13,986,660	8,896,923
Subordinated Debt				170,550	120,000
Other liabilities				156,587	136,994
Total liabilities				11,908,411	7,966,259
Shareholders’ equity				2,078,249	930,664	865,224	809,376
Total liabilities and shareholders’ equity				13,986,660	8,896,923
Income Statement [Abstract]
Noninterest income	103,382	76,142	69,601
Interest Expense	91,147	49,528	33,279
Salaries and employee benefits	188,990	137,240	128,549
Miscellaneous professional services	12,272	15,023	6,303
Income before income taxes and equity in undistributed net earnings of subsidiaries	214,221	116,163	130,731
Income tax expense (benefit)	41,626	19,376	42,205
Net income	172,595	96,787	88,526
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	153,670	104,840	90,663
Operating activities
Net income	172,595	96,787	88,526
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	24,171	12,645	13,037
Stock-based compensation expense	6,219	5,446	5,354
Deferred income taxes	6,267	(4,488)	346
Decrease (increase) in other assets	34,360	(21,455)	(1,108)
Net cash provided by (used in) operating activities	261,398	123,524	142,600
Investing activities
Proceeds from calls and maturities of investment securities	387,351	224,690	186,132
Purchases of investment securities	(852,131)	(723,131)	(396,984)
Net cash provided by (used in) investing activities	(205,837)	(429,452)	(313,348)
Financing activities
Net (decrease) increase in short-term borrowings	30,531	6,653	(130,513)
Cash dividends paid on common stock	(79,655)	(41,178)	(39,125)
Proceeds from exercise of stock options, net of shares purchased	284	341	801
Excess tax benefit on share-based compensation	0	0	264
Net cash provided by (used in) financing activities	30,010	334,980	177,505
Net increase (decrease) in cash	85,571	29,052	6,757
Cash and due from banks at beginning of year	150,650	121,598	114,841
Cash and due from banks at end of year	236,221	150,650	121,598
Parent Company [Member]
Statement of Financial Position [Abstract]
Cash	57,719	59,285	106,072	86,878	57,719	$ 59,285	$ 106,072
Investment securities, available for sale				694	442
Subordinated notes from subsidiaries				7,500	7,500
Investment in subsidiaries				2,085,849	970,290
Premises and equipment				1,361	1,378
Other assets				71,817	26,778
Total assets				2,254,099	1,064,107
Subordinated Debt				171,416	118,638
Dividends payable				465	10,965
Other liabilities				3,969	3,840
Total liabilities				175,850	133,443
Shareholders’ equity				2,078,249	930,664
Total liabilities and shareholders’ equity				2,254,099	1,064,107
Income Statement [Abstract]
Interest income	23	6	48
Noninterest income	0	86	2,596
Dividends from subsidiaries	107,340	54,600	52,700
Total income	107,363	54,692	55,344
Interest Expense	8,798	6,152	6,151
Salaries and employee benefits	6,413	5,519	5,445
Miscellaneous professional services	5,130	970	711
Other	5,648	4,819	4,841
Total expenses	25,989	17,460	17,148
Income before income taxes and equity in undistributed net earnings of subsidiaries	81,374	37,232	38,196
Income tax expense (benefit)	(6,687)	(7,080)	(5,302)
Equity in undistributed earnings (loss) of subsidiaries	(84,534)	(52,475)	(45,028)
Net income	172,595	96,787	88,526
Operating activities
Net income	172,595	96,787	88,526
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings (loss) of subsidiaries	(84,534)	(52,475)	(45,028)
Depreciation and amortization	194	193	192
Stock-based compensation expense	6,219	5,446	5,354
Deferred income taxes	739	(360)	584
(Decrease) increase in dividends payable	(10,500)	579	135
Increase (decrease) in other liabilities	9,979	(889)	(389)
Decrease (increase) in other assets	16,346	(6,951)	(9,065)
Net cash provided by (used in) operating activities	111,038	42,330	40,309
Investing activities
Capital contributions to subsidiaries	(3,000)	0	(53,000)
Net cash acquired (paid) from business combinations	11,353	0	0
Proceeds from calls and maturities of investment securities	0	0	5,978
Purchases of investment securities	0	0	(333)
Net cash provided by (used in) investing activities	8,353	0	(47,355)
Financing activities
Net (decrease) increase in short-term borrowings	(8,333)	0	0
Cash dividends paid on common stock	(79,655)	(41,178)	(39,125)
Proceeds from exercise of stock options, net of shares purchased	284	341	801
Excess tax benefit on share-based compensation	0	0	264
Other	(2,528)	(3,059)	(1,681)
Net cash provided by (used in) financing activities	(90,232)	(43,896)	(39,741)
Net increase (decrease) in cash	29,159	(1,566)	(46,787)
Cash and due from banks at beginning of year	57,719	59,285	106,072
Cash and due from banks at end of year	$ 86,878	$ 57,719	$ 59,285
Parent Company [Member] | Commercial Banks [Member]
Statement of Financial Position [Abstract]
Investment in subsidiaries				2,078,655	970,290
Parent Company [Member] | Nonbanks [Member]
Statement of Financial Position [Abstract]
Investment in subsidiaries				$ 7,194	$ 0