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Share-Based Payment Arrangements
 12 Months Ended
Sep. 30, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 14. Share-Based Payment Arrangements


     First Financial has two stock option plans from which new options may be granted, the 2005 Performance Equity Plan for Non-Employee Directors and the 2007 Equity Incentive Plan. These plans may issue qualified and non-qualified options, restricted stock awards, and stock appreciation rights to employees and nonemployee directors. First Financial also has four plans that currently have option grants outstanding, but no new issuances may be made since these plans have been abandoned. Any option forfeited under the abandoned plans cannot be reissued. At September 30, 2011, 247,691 options remained outstanding under these four abandoned plans.


     Under the 2005 Equity Performance Plan and the 2007 Equity Incentive Plan, the Board of Directors may issue up to 960,000 options, stock appreciation rights, and restricted stock in the aggregate. At September 30, 2011, First Financial had 471,875 shares related to options and stock appreciation rights and 225,000 shares related to restricted stock awards available for grants.


     Stock options currently granted under the plans generally expire five years from the date of grant. Restrictions on non-vested stock generally lapse in three annual installments beginning on the first anniversary of the grant date.


     Compensation expense for stock options is recognized in salaries and employee benefits in the Consolidated Statements of Operations. First Financial recorded a share-based compensation expense of $432 thousand, as compared with a benefit of $(219) thousand and an expense of $524 thousand for fiscal 2010 and fiscal 2009, respectively. The net benefit in fiscal 2010 was primarily the result of actual forfeitures exceeding the estimated forfeiture rate. First Financial recognized an income tax benefit of approximately$100 thousand in fiscal 2011 related to share-based compensation, as compared with an income tax expense of less than $100 thousand for fiscal 2010and an income tax benefit of approximately $100 thousand for fiscal 2009.


     Compensation cost is measured using the Black-Scholes option pricing model. The determined cost is recognized on a straight line basis over the requisite service period of the award. The following table presents the assumptions used to determine the fair value of options granted in fiscal 2010. There were no options granted or exercised in fiscal 2011.


 

 

 

     

 

 

 

 

 

Year Ended September 30,
2010

   

Weighted average fair value of awards issued

 

$6.67

 

 

 

Assumptions

 

 

Expected volatility

 

65.0% - 66.2%

Weighted-average volatility

65.4%

Expected dividends

 

1.77%

Expected term (years)

4.75

Risk-free rate

 

2.2% - 2.7%

 

 

 

   

A summary of stock option activity is presented below.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
 Shares

 

 

Weighted-
 Average
 Exercise
 Price ($)

 

 

Weighted-
 Average
 Remaining
 Contractual
 Term
 (Years)

 

 

Aggregate
 Intrinsic
 Value
 ($000)

 

 

 

   

 

   

 

   

 

   

Outstanding at September 30, 2009

 

 

841,221

 

 

 

26.62

 

 

 

 

 

 

 

 

 

Granted

 

 

96,371

 

 

 

13.74

 

 

 

 

 

 

 

 

 

Exercised

 

 

(750

)

 

 

11.72

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(215,991

)

 

 

27.54

 

 

 

 

 

 

 

 

 

 

 

     

 

     

 

 

 

 

 

 

 

 

Outstanding at September 30, 2010

 

 

720,851

 

 

 

24.63

 

 

 

 

 

 

 

 

 

Granted

 

 

---

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

---

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(219,214

)

 

 

25.80

 

 

 

 

 

 

 

 

 

 

 

     

 

     

 

 

 

 

 

 

 

 

Outstanding at September 30, 2011

 

 

501,637

 

 

 

24.11

 

 

 

1.94

 

 

 

---

 

 

 

     

 

     

 

     

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2011

 

 

403,689

 

 

 

26.03

 

 

 

1.72

 

 

 

---

 

 

 

     

 

     

 

     

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

     Stock options outstanding and exercisable as of September 30, 2011 are as follows.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

             

 

 

 

Options Outstanding

 

 

Options Exercisable

 

 

 

   

 

   

Range of Exercise Prices
 Low/High Outstanding

 

Number
 of Option
 Shares
 Outstanding

 

 

Weighted-
 Average
 Remaining
 Contractual
 Life (in yrs)

 

 

Weighted-
 Average
 Exercise
 Price

 

 

Number
 of Option
 Shares
 Outstanding

 

 

Weighted-
 Average
 Exercise
 Price

 

                               

 

$8.90 / $13.63

 

 

42,398

 

 

 

3.08

 

 

$

12.17

 

 

 

13,500

 

 

$

12.22

 

 

$14.00 / $16.88

 

 

52,324

 

 

 

3.14

 

 

 

14.54

 

 

 

20,554

 

 

 

15.13

 

 

$17.00 / $19.54

 

 

68,144

 

 

 

2.22

 

 

 

19.54

 

 

 

42,274

 

 

 

19.54

 

 

$20.77 / $23.90

 

 

82,653

 

 

 

1.18

 

 

 

23.25

 

 

 

77,834

 

 

 

23.27

 

 

$24.26/ $28.50

 

 

136,031

 

 

 

1.26

 

 

 

26.49

 

 

 

129,633

 

 

 

26.55

 

 

$29.35 / $31.90

 

 

7,796

 

 

 

2.19

 

 

 

29.79

 

 

 

7,796

 

 

 

29.79

 

 

$32.28 / $38.71

 

 

112,291

 

 

 

2.16

 

 

 

33.23

 

 

 

112,098

 

 

 

33.22

 

 

 

 

     

 

     

 

     

 

     

 

     

 

 

 

 

501,637

 

 

 

1.94

 

 

$

24.11

 

 

 

403,689

 

 

$

26.03

 

 

 

 

     

 

     

 

     

 

     

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     As of September 30, 2011, there was $301 thousand of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans and at September 30, 2010, there was $883 thousand of total unrecognized compensation costs. That cost was expected to be recognized over a weighted-average period of0.8years at September 30, 2011, and 1.0 year at September 30, 2010. The total original fair value of shares vested during the year ended September 30, 2011, was$678 thousand compared with $912 thousand for the fiscal year ended September 30, 2010.