Discontinued Operations

12 Months Ended

Sep. 30, 2011

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

NOTE 18. Discontinued Operations

     On May 26, 2011, First Financial entered into a definitive agreement with Hub International, LLC. (“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 will receive no additional consideration from the sale of First Southeast. In addition, effective September 30, 2011, First Financial completed the sale of Kimbrell, its managing general insurance agency subsidiary, to Burns & Wilcox, Ltd., a Kaufman Financial Group company (“Burns& Wilcox”). Burns & Wilcox acquired substantially all of the assets of Kimbrell in exchange for cash. In addition, there is a provision for a potential earn-out payable over two years based on specific annual growth goals.

     First Southeast and Kimbrell had experienced a decline in revenues and returns over the last several years, primarily the result of the recessionary economy and a generally soft insurance market, which negatively impacted insurance 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 agencies to support the banking operations would increase overall value and returns to shareholders.

     Both sales were completed prior to, or effective as of, September 30, 2011. As a result, there were no assets or liabilities for the insurance operations in the Consolidated Balance Sheets as of September 30, 2011. The table below summarizes the assets and liabilities of the insurance operations as of September 30, 2010.

(in thousands)	September 30, 2010
Assets
Cash and due from banks	$	375
Interest-bearing deposits with banks		4,899
Total cash and cash equivalents		5,274
Premises and equipment, net		996
Goodwill		27,630
Other intangible assets, net		6,938
Other assets		2,327
Total discontinued assets	$	43,165
Liabilities
Other liabilities		5,526
Total discontinued liabilities	$	5,526

     The operating results of discontinued operations for the years ended September 30, 2011, 2010, and 2009 were as follows.

	Years Ended September 30,
(in thousands)	2011			2010			2009
Net interest income	$	24		$	51		$	29
Noninterest income
Insurance		17,658			25,301			26,757
Gain on sale of line of business		5,919			---			---
Other		(3	)		(12	)		6
Total noninterest income		23,574			25,289			26,763
Noninterest expense
Salaries and employee benefits		12,650			15,533			16,061
Occupancy costs		1,842			1,235			1,256
Furniture and equipment		810			1,081			1,133
Professional services		40			42			18
Advertising and marketing		119			169			177
Goodwill impairment		1,871			---			---
Intangible asset amortization		443			631			734
Other expense		2,839			2,549			3,178
Total noninterest expense		20,614			21,240			22,557
Income from discontinued operations before taxes		2,984			4,100			4,235
Income tax expense from discontinued operations		6,549			1,581			1,628
Net (loss) income from discontinued operations	$	(3,565	)	$	2,519		$	2,607

The income tax expense in fiscal 2011 includes $4.7 million related to the recognition of deferred tax liabilities due to the sales of First Southeast and Kimbrell.