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ALLOWANCE FOR LOAN AND LEASE LOSSES
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
ALLOWANCE FOR LOAN AND LEASE LOSSES Allowance for Loan and Lease Losses

Management maintains the ALLL at a level that it considers sufficient to absorb probable incurred loan and lease losses inherent in the portfolio. Management determines the adequacy of the ALLL based on historical loss experience as well as other significant factors such as composition of the portfolio, economic conditions, geographic footprint, the results of periodic internal and external evaluations of delinquent, nonaccrual and classified loans and any other adverse situations that may affect a specific borrower's ability to repay, including the timing of future payments. For further discussion of First Financial's allowance methodology, see Note 1 – Summary of Significant Accounting Policies.

The ALLL is increased by provision expense and decreased by charge-offs, net of recoveries of amounts previously charged-off. First Financial's policy is to charge-off all or a portion of a loan when, in management's opinion, it is unlikely to collect the principal amount owed in full, either through payments from the borrower, or from the liquidation of collateral.

Changes in the ALLL by loan category as of December 31 were as follows:
  
 
2019
(Dollars in thousands)
 
Commercial & industrial
 
Lease financing
 
Construction real estate
 
Commercial real estate
 
Residential real estate
 
Home equity
 
Installment
 
Credit card
 
Total
Allowance for loan and lease losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
 
$
18,746

 
$
1,130

 
$
3,413

 
$
21,048

 
$
4,964

 
$
5,348

 
$
362

 
$
1,531

 
$
56,542

Provision for loan and lease losses
 
23,631

 
3

 
(1,100
)
 
5,107

 
739

 
695

 
2

 
1,521

 
30,598

Gross charge-offs
 
(26,676
)
 
(162
)
 
0

 
(3,689
)
 
(677
)
 
(2,591
)
 
(223
)
 
(1,547
)
 
(35,565
)
Recoveries
 
2,883

 
0

 
68

 
1,113

 
273

 
1,335

 
251

 
152

 
6,075

Total net charge-offs
 
(23,793
)
 
(162
)
 
68

 
(2,576
)
 
(404
)
 
(1,256
)
 
28

 
(1,395
)
 
(29,490
)
Ending allowance for loan and lease losses
 
$
18,584

 
$
971

 
$
2,381

 
$
23,579

 
$
5,299

 
$
4,787

 
$
392

 
$
1,657

 
$
57,650


 
 
2018
(Dollars in thousands)
 
Commercial & industrial
 
Lease financing
 
Construction real estate
 
Commercial real estate
 
Residential real estate
 
Home equity
 
Installment
 
Credit card
 
Total
Allowance for loan and lease losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
 
$
17,598

 
$
675

 
$
3,577

 
$
20,930

 
$
4,683

 
$
4,935

 
$
307

 
$
1,316

 
$
54,021

Provision for loan and lease losses
 
10,615

 
454

 
(310
)
 
847

 
492

 
829

 
(85
)
 
1,744

 
14,586

Gross charge-offs
 
(11,533
)
 
0

 
0

 
(4,835
)
 
(422
)
 
(1,725
)
 
(435
)
 
(1,720
)
 
(20,670
)
Recoveries
 
2,066

 
1

 
146

 
4,106

 
211

 
1,309

 
575

 
191

 
8,605

Total net charge-offs
 
(9,467
)
 
1

 
146

 
(729
)
 
(211
)
 
(416
)
 
140

 
(1,529
)
 
(12,065
)
Ending allowance for loan and lease losses
 
$
18,746

 
$
1,130

 
$
3,413

 
$
21,048

 
$
4,964

 
$
5,348

 
$
362

 
$
1,531

 
$
56,542



 
 
2017
(Dollars in thousands)
 
Commercial & industrial
 
Lease financing
 
Construction real estate
 
Commercial real estate
 
Residential real estate
 
Home equity
 
Installment
 
Credit card
 
Total
Allowance for loan and lease losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
 
$
19,225

 
$
716

 
$
3,282

 
$
26,540

 
$
3,208

 
$
3,043

 
$
388

 
$
1,559

 
$
57,961

Provision for loan and lease losses
 
6,917

 
(42
)
 
207

 
(7,291
)
 
1,695

 
1,778

 
(90
)
 
408

 
3,582

Gross charge-offs
 
(10,194
)
 
0

 
(1
)
 
(1,038
)
 
(435
)
 
(913
)
 
(225
)
 
(857
)
 
(13,663
)
Recoveries
 
1,650

 
1

 
89

 
2,719

 
215

 
1,027

 
234

 
206

 
6,141

Total net charge-offs
 
(8,544
)
 
1

 
88

 
1,681

 
(220
)
 
114

 
9

 
(651
)
 
(7,522
)
Ending allowance for loan and lease losses
 
$
17,598

 
$
675

 
$
3,577

 
$
20,930

 
$
4,683

 
$
4,935

 
$
307

 
$
1,316

 
$
54,021



The ALLL balance and the recorded investment in loans by portfolio segment and based on impairment method as of December 31 were as follows:
 
 
December 31, 2019
(Dollars in thousands)
 
Commercial & industrial
 
Lease financing
 
Construction real estate
 
Commercial real estate
 
Residential real estate
 
Home equity
 
Installment
 
Credit card
 
Total
Ending allowance on loans individually evaluated for impairment
 
$
2,044

 
$
0

 
$
0

 
$
113

 
$
18

 
$
0

 
$
0

 
$
0

 
$
2,175

Ending allowance on loans collectively evaluated for impairment
 
16,540

 
971

 
2,381

 
23,466

 
5,281

 
4,787

 
392

 
1,657

 
55,475

Ending allowance for loan and lease losses
 
$
18,584

 
$
971

 
$
2,381

 
$
23,579

 
$
5,299

 
$
4,787

 
$
392

 
$
1,657

 
$
57,650

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and Leases
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 

 
 

Ending balance of loans individually evaluated for impairment
 
$
27,480

 
$
223

 
$
0

 
$
10,831

 
$
15,162

 
$
5,700

 
$
204

 
$
0

 
$
59,600

Ending balance of loans collectively evaluated for impairment
 
2,438,397

 
88,141

 
493,182

 
4,183,820

 
1,040,787

 
766,169

 
82,385

 
49,184

 
9,142,065

Total loans
 
$
2,465,877

 
$
88,364

 
$
493,182

 
$
4,194,651

 
$
1,055,949

 
$
771,869

 
$
82,589

 
$
49,184

 
$
9,201,665



 
 
December 31, 2018
(Dollars in thousands)
 
Commercial & industrial
 
Lease financing
 
Construction real estate
 
Commercial real estate
 
Residential real estate
 
Home equity
 
Installment
 
Credit card
 
Total
Ending allowance on loans individually evaluated for impairment
 
$
667

 
$
0

 
$
0

 
$
461

 
$
32

 
$
0

 
$
0

 
$
0

 
$
1,160

Ending allowance on loans collectively evaluated for impairment
 
18,079

 
1,130

 
3,413

 
20,587

 
4,932

 
5,348

 
362

 
1,531

 
55,382

Ending allowance for loan and lease losses
 
$
18,746

 
$
1,130

 
$
3,413

 
$
21,048

 
$
4,964

 
$
5,348

 
$
362

 
$
1,531

 
$
56,542

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and Leases
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 

 
 

Ending balance of loans individually evaluated for impairment
 
$
37,633

 
$
22

 
$
9

 
$
25,022

 
$
17,598

 
$
6,351

 
$
174

 
$
0

 
$
86,809

Ending balance of loans collectively evaluated for impairment
 
2,477,028

 
93,393

 
548,926

 
3,729,659

 
938,048

 
810,931

 
93,038

 
46,382

 
8,737,405

Total loans
 
$
2,514,661

 
$
93,415

 
$
548,935

 
$
3,754,681

 
$
955,646

 
$
817,282

 
$
93,212

 
$
46,382

 
$
8,824,214