Discontinued Operations

9 Months Ended

Jun. 30, 2011

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 12. Discontinued Operations

          On May 26, 2011, First Financial entered into a stock purchase agreement with Hub whereby Hub agreed to acquire all of the stock of First Southeast. On June 1, 2011, First Financial completed the stock sale in exchange for $38.0 million in cash. First Financial has no continuing cash flow from First Southeast.

          First Southeast had experienced a decline in revenues and returns over the last several years, primarily the result of recessionary economy and a generally soft insurance market, which negatively impacted premium pricing. In addition, First Financial evaluated its future capital requirements in light of upcoming regulatory capital changes resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act and determined that re-deploying the capital supporting the insurance agency to support the banking operations would increase overall value and returns to shareholders. The sale of First Southeast also generated tangible capital as it eliminated $28.9 million in goodwill and intangibles.

          The table below summarizes the assets and liabilities of First Southeast as of September 30, 2010.

(in thousands)	September 30, 2010
Assets
Cash and due from banks	$	375
Interest-bearing deposits with banks		4,900
Total cash and cash equivalents		5,275
Premises and equipment, net		763
Goodwill		22,508
Other intangible assets, net		6,671
Other assets		1,257
Total discontinued assets	$	36,474
Liabilities
Other liabilities		2,458
Total discontinued liabilities	$	2,458

          The operating results for the three and nine months ended June 30, 2011 and June 30, 2010 were as follows.

	Three Months Ended June 30,					Nine Months Ended June 30,
(in thousands)	2011			2010		2011			2010
Interest Income	$	4		$	13	$	24		$	31
Noninterest income
Insurance		3,357			5,229		13,860			16,555
Other		(1	)		5		(1	)		4
Total noninterest income		3,360			5,247		13,883			16,590
Noninterest expense
Salaries and employee benefits		3,018			3,376		9,644			9,899
Occupancy costs		145			210		586			635
Furniture and equipment		128			212		542			644
Professional services		7			18		39			34
Advertising and marketing		24			33		113			120
Intangible asset amortization		90			129		361			409
Other expense		1,104			451		2,032			1,380
Total noninterest expense		4,516			4,429		13,317			13,121
(Loss) income from discontinued operations before taxes		(1,156	)		818		566			3,469
Income tax (benefit) expense from discontinued operations		(455	)		312		212			1,338
Net (loss) income from discontinued operations	$	(701	)	$	506	$	354		$	2,131