EMPLOYEE BENEFIT PLANS

First Financial sponsors a non-contributory defined benefit pension plan covering substantially all employees and uses a December 31 measurement date for the plan.

First Financial made no cash contributions to fund the pension plan during the six months ended June 30, 2014 and does not expect to make cash contributions to the plan through the remainder of the year. First Financial made no cash contributions to fund the pension plan in 2013. As a result of the plan’s actuarial projections for 2014, First Financial recorded income related to its pension plan of $0.5 million for the six months ended June 30, 2014 and $0.3 million for the second quarter of 2014.

As a result of lump sum distributions from the pension plan during the first half of 2013, First Financial was required to re-measure the plan's assets and liabilities and recognized $4.3 million of pension settlement charges during the second quarter of 2013. Consistent with FASB ASC Topic 715, Compensation - Retirement Benefits, pension settlement charges are an acceleration of previously deferred costs that would have been recognized in future periods and are triggered when lump sum distributions exceed an annual accounting threshold for the plan. Associates are eligible to request a lump sum distribution from the Company's pension plan at retirement or upon leaving the Company. As a result of the pension plan re-measurement and pension settlement charges, First Financial recorded $17.4 million of pre-tax adjustments to other comprehensive income related to changes in the values of the Company's plan assets and pension obligations for the six months ended June 30, 2013.

Including the pension settlement charges discussed above as well as the impact of the plan's updated actuarial projections, First Financial recorded expenses related to its pension plan of $4.2 million for the six months and three months ended June 30, 2013.

The accounting threshold for lump sum distributions from the plan reset on January 1, 2014. However, the Company could incur pension settlement charges again if lump sum distributions exceed the annual accounting threshold in future periods. Associates are eligible to request a lump sum distribution from the Company's pension plan at retirement or upon leaving the Company.

The following table sets forth information concerning amounts recognized in First Financial’s Consolidated Statements of Income related to the Company's pension plan:



	Three months ended						Six months ended
	June 30,						June 30,
(Dollars in thousands)	2014			2013			2014			2013
Service cost	$	1,041		$	898		$	2,082		$	1,873
Interest cost	620			567			1,240			1,186
Expected return on assets	(2,292		)	(2,230		)	(4,584		)	(4,524		)
Amortization of prior service cost	(103		)	(107		)	(206		)	(212		)
Net actuarial loss	482			726			963			1,546
Settlement charge	0			4,316			0			4,316
Net periodic benefit (income) cost	$	(252	)	$	4,170		$	(505	)	$	4,185