Discontinued Operations

12 Months Ended

Dec. 31, 2012

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 presented in the Financial Statements.

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

(in thousands)	2011			2010
Net interest income	$	24		$	51
Noninterest income
Insurance income		17,658			25,301
Gain on sale of line of business		5,919			—
Other (loss) income		(3	)		(12	)
Total noninterest income		23,574			25,289
Noninterest expense
Salaries and employee benefits		12,650			15,533
Occupancy costs		1,842			1,235
Furniture and equipment		810			1,081
Professional services		40			42
Advertising and marketing		119			169
Goodwill impairment		1,871			—
Intangible asset amortization		443			631
Other expense		2,839			2,549
Total noninterest expense		20,614			21,240
Income from discontinued operations before taxes		2,984			4,100
Income tax expense from discontinued operations		6,549			1,581
Net (loss) income from discontinued operations	$	(3,565	)	$	2,519

The income tax expense in 2011 includes $4.5 million related to the recognition of deferred tax liabilities due to the sale of First Southeast.