INVESTMENTS

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

For the three months ended March 31, 2022, there were sales of $5.0 million of AFS securities with insignificant gross realized gains and gross realized losses. For the three months ended March 31, 2021, there were $52.1 million sales of AFS securities with $0.6 million gross realized gains and $0.7 million gross realized losses.

The following is a summary of HTM and AFS investment securities as of March 31, 2022:


	Held-to-maturity								Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss		Fair value		Amortized cost		Unrealized gain		Unrealized loss		Fair value
U.S. Treasuries	$	0	$	0	$	0	$	0	$	34,967	$	1	$	(2,244)	$	32,724
Securities of U.S. government agencies and corporations	0		0		0		0		79,338		0		(5,665)		73,673
Mortgage-backed securities - residential	0		0		0		0		709,888		602		(43,418)		667,072
Mortgage-backed securities - commercial	42,211		0		(1,403)		40,808		754,978		355		(17,903)		737,430
Collateralized mortgage obligations	10,780		0		(287)		10,493		621,240		1,277		(27,662)		594,855
Obligations of state and other political subdivisions	8,356		317		0		8,673		1,071,171		10,441		(49,260)		1,032,352
Asset-backed securities	0		0		0		0		713,587		361		(21,321)		692,627
Other securities	31,250		0		(1,223)		30,027		128,000		710		(1,561)		127,149
Total	$	92,597	$	317	$	(2,913)	$	90,001	$	4,113,169	$	13,747	$	(169,034)	$	3,957,882

The following is a summary of HTM and AFS investment securities as of December 31, 2021:


	Held-to-maturity								Available-for-sale
(Dollars in thousands)	Amortized cost		Unrecognized gain		Unrecognized loss		Fair value		Amortized cost		Unrealized gain		Unrealized loss		Fair value
U.S. Treasuries	$	0	$	0	$	0	$	0	$	34,961	$	4	$	(189)	$	34,776
Securities of U.S. government agencies and corporations	0		0		0		0		78,998		248		(129)		79,117
Mortgage-backed securities - residential	0		0		0		0		728,050		6,635		(10,548)		724,137
Mortgage-backed securities - commercial	46,362		651		0		47,013		729,948		4,294		(2,352)		731,890
Collateralized mortgage obligations	11,882		221		0		12,103		696,258		7,979		(6,497)		697,740
Obligations of state and other political subdivisions	8,926		915		0		9,841		1,058,735		35,591		(8,594)		1,085,732
Asset-backed securities	0		0		0		0		720,638		1,521		(2,578)		719,581
Other securities	31,250		176		(485)		30,941		133,001		2,114		(242)		134,873
Total	$	98,420	$	1,963	$	(485)	$	99,898	$	4,180,589	$	58,386	$	(31,129)	$	4,207,846

The following table provides a summary of investment securities by contractual maturity as of March 31, 2022, except for residential and commercial mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which are shown as single totals due to the unpredictability of the timing in principal repayments.


	Held-to-maturity				Available-for-sale
(Dollars in thousands)	Amortized cost		Fair value		Amortized cost		Fair value
By Contractual Maturity:
Due in one year or less	$	0	$	0	$	11,539	$	11,556
Due after one year through five years	1,072		1,092		89,910		89,562
Due after five years through ten years	36,271		35,340		357,140		348,300
Due after ten years	2,263		2,268		854,887		816,480
Mortgage-backed securities - residential	0		0		709,888		667,072
Mortgage-backed securities - commercial	42,211		40,808		754,978		737,430
Collateralized mortgage obligations	10,780		10,493		621,240		594,855
Asset-backed securities	0		0		713,587		692,627
Total	$	92,597	$	90,001	$	4,113,169	$	3,957,882

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

First Financial does not intend to sell, and it is not more likely than not that the Company will be required to sell, debt securities temporarily impaired prior to maturity or recovery of the recorded value. The Company recorded no reserves on investment securities for the March 31, 2022 or December 31, 2021.

As of March 31, 2022, the Company's investment securities portfolio consisted of 1,440 securities, of which 667 were in an unrealized loss position. As of December 31, 2021, the Company's investment securities portfolio consisted of 1,418 securities, of which 327 were in an unrealized loss position.

Primarily all of First Financial’s HTM debt securities are issued by U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. The remainder of the Company's HTM securities are non-agency collateralized mortgage obligations and obligations of state and other political subdivisions which currently carry ratings no lower than A+. There were no HTM securities on nonaccrual status or past due as of March 31, 2022 or December 31, 2021. Therefore, the Company did not record an ACL for these securities as of March 31, 2022 or December 31, 2021.

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


	March 31, 2022
	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	$	32,624	$	(2,244)	$	0	$	0	$	32,624	$	(2,244)
Securities of U.S. Government agencies and corporations	73,673		(5,665)		0		0		73,673		(5,665)
Mortgage-backed securities - residential	388,740		(26,406)		187,705		(17,012)		576,445		(43,418)
Mortgage-backed securities - commercial	636,688		(16,831)		28,585		(2,475)		665,273		(19,306)
Collateralized mortgage obligations	449,683		(22,616)		52,838		(5,333)		502,521		(27,949)
Obligations of state and other political subdivisions	496,869		(38,448)		132,317		(10,812)		629,186		(49,260)
Asset-backed securities	625,241		(19,707)		22,710		(1,614)		647,951		(21,321)
Other securities	98,897		(2,103)		11,569		(681)		110,466		(2,784)
Total	$	2,802,415	$	(134,020)	$	435,724	$	(37,927)	$	3,238,139	$	(171,947)


	December 31, 2021
	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	$	24,755	$	(190)	$	0	$	0	$	24,755	$	(190)
Securities of U.S. Government agencies and corporations	17,382		(128)		0		0		17,382		(128)
Mortgage-backed securities - residential	459,098		(8,375)		78,090		(2,173)		537,188		(10,548)
Mortgage-backed securities - commercial	205,520		(2,149)		13,818		(203)		219,338		(2,352)
Collateralized mortgage obligations	369,318		(6,110)		12,485		(387)		381,803		(6,497)
Obligations of state and other political subdivisions	380,735		(7,543)		55,568		(1,051)		436,303		(8,594)
Asset-backed securities	482,118		(2,578)		0		0		482,118		(2,578)
Other securities	31,896		(354)		11,877		(373)		43,773		(727)
Total	$	1,970,822	$	(27,427)	$	171,838	$	(4,187)	$	2,142,660	$	(31,614)

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