Share-Based Payment Arrangements

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8. Share-Based Payment Arrangements

     At March 31, 2013, First Financial has one share-based compensation plan from which new awards may be granted. This plan may issue qualified and non-qualified options, restricted stock awards and other forms of equity compensation to employees and nonemployee directors. Under the active plan, the Board may issue up to 900,000 options, stock appreciation rights and restricted stock in the aggregate. At March 31, 2013, First Financial had 531,066 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 plan 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.

     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 or terminated. Forfeited or expired options under the abandoned or terminated plans may not be reissued. At March 31, 2013, there were 113,293 options which remained outstanding under the four abandoned or terminated plans.

     Pursuant to the merger agreement entered into with SCBT Financial Corporation on February 19, 2013, no new awards may be issued by First Financial from its share-based compensation plan noted above.

     Compensation expense for stock options is recognized in salaries and employee benefits in the Consolidated Statements of Income. For the three months ended March 31, 2013 and March 31, 2012, First Financial recorded an expense of $27 thousand and $46 thousand respectively. First Financial recognized an income tax benefit of less than $100 thousand in the three months ended March 31, 2013 and March 31, 2012 respectively.

     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.

     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 December 31, 2012	259,189			22.30
Granted	---
Exercised	(6,406	)		13.78
Forfeited or expired	(1,962	)		22.47
Outstanding at March 31, 2013	250,821			22.51		1.20	622
Exercisable at March 31, 2013	233,528			23.13		1.13	505
Outstanding at December 31, 2011	404,387			23.80
Granted	---
Exercised	---
Forfeited or expired	(12,037	)		25.92
Outstanding at March 31, 2012	392,350			23.73		1.70	21
Exercisable at March 31, 2012	339,013			25.15		1.54	6

     Stock options outstanding and exercisable as of March 31, 2013 are as follows.

Range of Exercise Prices		Options Outstanding				Options Exercisable
			Number of Option Shares Outstanding	Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price ($)	Number of Option Shares Outstanding	Weighted- Average Exercise Price ($)
Low Outstanding	High Outstanding
$8.90	$13.63		29,775	1.54	11.87	29,775	11.87
$14.00	$16.88		40,069	2.15	14.15	22,776	14.15
$17.00	$19.54		55,542	0.72	19.54	55,542	19.54
$20.77	$23.90		28,942	1.15	23.66	28,942	23.66
$24.26	$28.50		22,150	0.22	25.21	22,150	25.21
$29.35	$31.90		4,000	1.16	29.92	4,000	29.92
$32.28	$38.71		70,343	1.21	32.38	70,343	32.38
			250,821	1.20	22.51	233,528	23.13

     As of March 31, 2013, there was $18 thousand of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost will be recognized in the second quarter of 2013.