INVESTMENTS

6 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

For the three and six months ended June 30, 2019, there were sales of $115.6 million of AFS securities with $0.7 million in gross realized gains and $0.7 million gross realized losses. In conjunction with the adoption of ASU 2017-12 in the first quarter of 2019, First Financial reclassified $268.7 million of HTM securities to AFS resulting in a $0.2 million realized loss recorded in the Consolidated Statement of Income.

For the three and six months ended June 30, 2018, proceeds on the sale of $216.2 million of AFS securities resulted in insignificant gross gains and losses. In addition to the sale of certain securities during the second quarter of 2018, First Financial reclassified $367.9 million of HTM securities to AFS to align with post-merger investment strategies.

The following is a summary of HTM and AFS investment securities as of June 30, 2019:



	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	$	99	$	1	$	0		$	100
Securities of U.S. government agencies and corporations	0		0		0			0		24,709		239		(139		)	24,809
Mortgage-backed securities - residential	23,736		163		(194		)	23,705		507,434		7,716		(1,161		)	513,989
Mortgage-backed securities - commercial	107,810		248		(1,809		)	106,249		482,157		5,815		(1,327		)	486,645
Collateralized mortgage obligations	11,264		0		(181		)	11,083		940,304		18,613		(531		)	958,386
Obligations of state and other political subdivisions	11,517		596		(111		)	12,002		549,546		18,991		(110		)	568,427
Asset-backed securities	0		0		0			0		521,357		1,349		(1,605		)	521,101
Other securities	0		0		0			0		78,546		1,336		(369		)	79,513
Total	$	154,327	$	1,007	$	(2,295	)	$	153,039	$	3,104,152	$	54,060	$	(5,242	)	$	3,152,970

The following is a summary of HTM and AFS investment securities as of December 31, 2018:



	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	$	99	$	0	$	(2	)	$	97
Securities of U.S. government agencies and corporations	0		0		0			0		32,095		57		(233		)	31,919
Mortgage-backed securities - residential	25,565		0		(1,045		)	24,520		565,071		691		(7,163		)	558,599
Mortgage-backed securities - commercial	147,780		258		(4,385		)	143,653		423,797		819		(3,581		)	421,035
Collateralized mortgage obligations	12,540		0		(633		)	11,907		928,586		4,319		(6,158		)	926,747
Obligations of state and other political subdivisions	243,443		1,954		(1,359		)	244,038		257,300		2,554		(1,429		)	258,425
Asset-backed securities	0		0		0			0		511,430		611		(2,810		)	509,231
Other securities	0		0		0			0		73,948		358		(1,104		)	73,202
Total	$	429,328	$	2,212	$	(7,422	)	$	424,118	$	2,792,326	$	9,409	$	(22,480	)	$	2,779,255

The following table provides a summary of investment securities by contractual maturity as of June 30, 2019, 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	$	8,322	$	8,337
Due after one year through five years	0		0		41,902		42,607
Due after five years through ten years	4,284		4,721		156,370		160,519
Due after ten years	7,233		7,281		446,306		461,386
Mortgage-backed securities - residential	23,736		23,705		507,434		513,989
Mortgage-backed securities - commercial	107,810		106,249		482,157		486,645
Collateralized mortgage obligations	11,264		11,083		940,304		958,386
Asset-backed securities	0		0		521,357		521,101
Total	$	154,327	$	153,039	$	3,104,152	$	3,152,970

Unrealized gains and losses on debt securities are generally due to fluctuations in current market yields relative to the yields of the debt securities at their amortized cost. All securities with unrealized losses are reviewed quarterly to determine if any impairment is considered other than temporary, requiring a write-down to fair value. First Financial considers the percentage loss on a security, duration of the loss, average life or duration of the security, credit rating of the security and payment performance, as well as the Company's intent and ability to hold the security to maturity, when determining whether any impairment is other than temporary. At this time, 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. First Financial had no other than temporary impairment related to its investment securities portfolio as of June 30, 2019 or December 31, 2018.

As of June 30, 2019, the Company's investment securities portfolio consisted of 1,347 securities, of which 177 were in an unrealized loss position. As of December 31, 2018, the Company's investment securities portfolio consisted of 1,417 securities, of which 504 were in an unrealized loss position.

The following tables provide the fair value and gross unrealized losses on investment securities in an unrealized loss position, aggregated by investment category and the length of time the individual securities have been in a continuous loss position:



	June 30, 2019
	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	$	0	$	0		$	0	$	0		$	0	$	0
Securities of U.S. Government agencies and corporations	0		0			8,985		(139		)	8,985		(139		)
Mortgage-backed securities - residential	10,507		(67		)	131,539		(1,288		)	142,046		(1,355		)
Mortgage-backed securities - commercial	99,535		(197		)	91,179		(2,939		)	190,714		(3,136		)
Collateralized mortgage obligations	50,381		(103		)	94,939		(609		)	145,320		(712		)
Obligations of state and other political subdivisions	19,676		(38		)	14,123		(183		)	33,799		(221		)
Asset-backed securities	218,191		(829		)	80,710		(776		)	298,901		(1,605		)
Other securities	6,155		(42		)	5,424		(327		)	11,579		(369		)
Total	$	404,445	$	(1,276	)	$	426,899	$	(6,261	)	$	831,344	$	(7,537	)



	December 31, 2018
	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	value		loss			value		loss			value		loss
U.S. Treasuries	$	0	$	0		$	97	$	(2	)	$	97	$	(2	)
Securities of U.S. Government agencies and corporations	0		0			16,777		(233		)	16,777		(233		)
Mortgage-backed securities - residential	186,029		(935		)	264,795		(7,273		)	450,824		(8,208		)
Mortgage-backed securities - commercial	147,754		(369		)	232,363		(7,597		)	380,117		(7,966		)
Collateralized mortgage obligations	194,795		(1,546		)	240,514		(5,245		)	435,309		(6,791		)
Obligations of state and other political subdivisions	62,805		(299		)	86,644		(2,489		)	149,449		(2,788		)
Asset-backed securities	336,437		(2,312		)	37,105		(498		)	373,542		(2,810		)
Other securities	33,752		(884		)	4,570		(220		)	38,322		(1,104		)
Total	$	961,572	$	(6,345	)	$	882,865	$	(23,557	)	$	1,844,437	$	(29,902	)

For further detail on the fair value of investment securities, see Note 16 – Fair Value Disclosures.