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FAIR VALUE DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2024

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
September 30, 2024
Financial assets
Cash and short-term investments	$	851,194	$	851,194	$	851,194	$	0	$	0
Investment securities held-to-maturity	77,985		71,126		0		71,126		0
Other investments (1)	11,487		11,487		1,447		10,040		0

Loans and leases	11,394,241		11,348,797		0		0		11,348,797
Accrued interest receivable	72,147		72,147		0		14,170		57,977

Financial liabilities





Deposits	13,947,754		13,945,883		0		13,945,883		0
Short-term borrowings	811,653		811,653		811,653		0		0
Long-term debt	344,086		343,609		0		343,609		0
Accrued interest payable	52,350		52,350		8,936		43,414		0


	Carrying		Estimated fair value
(Dollars in thousands)	value		Total		Level 1		Level 2		Level 3
December 31, 2023
Financial assets
Cash and short-term investments	$	1,006,019	$	1,006,019	$	1,006,019	$	0	$	0
Investment securities held-to-maturity	80,321		71,688		0		71,688		0
Other investments (1)	20,554		20,554		1,194		10,040		9,320

Loans and leases	10,791,743		10,468,144		0		0		10,468,144
Accrued interest receivable	72,620		72,620		0		15,697		56,923

Financial liabilities





Deposits	13,360,797		13,347,319		0		13,347,319		0
Short-term borrowings	937,814		937,814		937,814		0		0
Long-term debt	344,115		350,426		0		350,426		0
Accrued interest payable	51,454		51,454		15,494		35,960		0

(1) FHLB stock and FRB stock of $108.8 million and $109.4 million as of September 30, 2024 and December 31, 2023, respectively, are excluded from the numbers above.

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
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
September 30, 2024
Assets
Investment securities available-for-sale	$	92	$	3,111,093	$	46,080	$	3,157,265
Loans held for sale	0		12,685		0		12,685
Interest rate derivative contracts	0		91,653		0		91,653
Foreign exchange derivative contracts	0		182,282		0		182,282
Interest rate floors	0		4,497		0		4,497
Commodities contracts	0		155		0		155
Total	$	92	$	3,402,365	$	46,080	$	3,448,537

Liabilities
Interest rate derivative contracts	$	0	$	92,257	$	0	$	92,257
Foreign exchange derivative contracts	0		182,282		0		182,282

Commodities contracts	0		155		0		155
Total	$	0	$	274,694	$	0	$	274,694


	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/liabilities at fair value
December 31, 2023
Assets
Investment securities available-for-sale	$	31,243	$	2,956,938	$	32,945	$	3,021,126
Loans held for sale	0		9,213		0		9,213
Interest rate derivative contracts	0		117,344		0		117,344
Foreign exchange derivative contracts	0		145,556		0		145,556
Interest rate floors	0		6,896		0		6,896
Total	$	31,243	$	3,235,947	$	32,945	$	3,300,135

Liabilities
Interest rate derivative contracts	$	0	$	118,105	$	0	$	118,105
Foreign exchange derivative contracts	0		145,556		0		145,556

Total	$	0	$	263,661	$	0	$	263,661

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents a reconciliation for certain AFS securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2024 and September 30, 2023.


	Three months ended				Nine months ended
	September 30,				September 30,
(dollars in thousands)	2024		2023		2024		2023
Beginning balance	$	31,428	$	34,132	$	32,945	$	35,857
Accretion (amortization)	(47)		(30)		(73)		(84)
Increase (decrease) in fair value	(549)		(162)		(527)		(119)
Settlements	(1,924)		(795)		(3,437)		(2,509)
Transfers into level 3	17,172		0		17,172		0
Ending balance	$	46,080	$	33,145	$	46,080	$	33,145

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
September 30, 2024
Assets
Collateral dependent loans
Commercial & industrial	$	0	$	0	$	2,445
Commercial real estate	0		0		12,039
Lease financing	0		0		4,049
OREO	0		0		30


	Fair value measurements using
(Dollars in thousands)	Level 1		Level 2		Level 3
December 31, 2023
Assets
Collateral dependent loans
Commercial & industrial	$	0	$	0	$	1,795
Commercial real estate	0		0		13,538
OREO	0		0		106

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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