First Financial Corporation Having an Outstanding Year.

Business Editors

TERRE HAUTE, Ind.--(BUSINESS WIRE)--Nov. 5, 2002

First Financial Corporation (Nasdaq:THFF) today announced third quarter results which reflected year-to-date net income of $19.5 million, or $2.85 per share, an 8.2% improvement over comparable 2001 net income

Third quarter net income was $6.2 million, or $0.90 per share, substantially the same as for the third quarter of 2001. Higher net interest and non-interest income were offset by increased non-interest expense and a slightly higher provision for loan losses. Third quarter results include the effect of finalizing 2002 pension cost adjustments related to recent acquisitions. Expense accruals had been increased in anticipation of these adjustments, but the pension expense for the quarter was increased by approximately $435,000 ($260,000 after tax) based on final actuarial computations.

Comparing the third quarter of 2002 to 2001, average deposits were up $180.1 million, or 13.9%. These deposits were used to fund an increase in total average loans of $125.5 million, an impressive 9.6% growth, and pay down average borrowings by $36.9 million. Average assets increased $175.7 million, or 8.6%, and average shareholders' equity increased $27.3 million, or 13.0%. The return on average assets increased to 1.21%, a 2.5% improvement in 2002 over 2001. Strong financial performance and unrealized gains on securities pushed book value per share up 9.5% to $35.00 in 2002 from $32.04 in 2001.

The purchase of Community Bank and Trust, N.A. was consummated on January 31, 2002. The average balances reported above include Community's $94.5 million of average loans, $130.3 million of average deposits, and $161.2 million of average total assets.

Non-interest income through September increased $4.8 million, or 31.8%, over 2001, which was driven by increases in fee-based income, higher gains from the sales of mortgage loans and insurance commission income related to the May 2001 acquisition of Forrest Sherer, Inc., a full-line insurance agency in Terre Haute, Ind. Non-interest expenses increased $7.9 million, or 20.5%, driven mainly by increased compensation and benefit costs associated with the personnel added in the recent acquisitions.

In March 2001, the U.S. economy entered into a recession after a record 10 years of economic expansion. Uncertainties remain as to the direction the economy could take. Some factors contributing to these uncertainties include a continuing earnings slump in the corporate sector and the accumulation of debt by the household sector. Net charge-offs year-to-date for 2002 are down compared to 2001, but are up slightly for the quarter. The weakened economy has tempered loan growth and financial institutions of all sizes have experienced credit quality deterioration. The corporation has increased its provision for loan losses by $2.2 million, compared to the first three quarters of 2001, resulting in an increase in the allowance for loan and lease losses to 1.46% of loans at September 30, 2002, compared to 1.36% at December 31, 2001.

Certain factors must be present in this environment for a financial institution to be successful. First Financial continues to focus on proactive risk management, effective corporate governance and adherence to internal controls and routines.

First Financial Corporation is the holding company for Terre Haute First National Bank, First State Bank, First Citizens State Bank, First Farmers State Bank, First Parke State Bank, The Morris Plan Company of Terre Haute and Forrest Sherer, Inc. in Indiana; and First Ridge Farm State Bank, First National Bank of Marshall, First Crawford State Bank, and First Community Bank and Trust, N.A. in Illinois.

                      First Financial Corporation

     For the Quarter and the Nine Months Ending September 30, 2002

          (Dollar amounts in thousands except per share data)


                                  09/30/02     09/30/01      % Change

Year to Date Information:

Net Income                      $   19,451    $   17,983        8.16%
Earnings Per Average Share      $     2.85    $     2.63        8.37%
Return on Assets                      1.17%         1.18%      -0.85%
Return on Equity                     10.89%        11.40%      -4.47%
Net Interest Margin                   4.09%         3.95%       3.54%
Net Interest Income             $   58,839    $   51,971       13.22%
Non-Interest Income             $   19,897    $   15,095       31.81%
Non-Interest Expense            $   46,601    $   38,671       20.51%
Loss Provision                  $    6,621    $    4,464       48.32%
Net Charge Offs                 $    5,775    $    5,985       -3.51%
Efficiency Ratio                     55.76%        53.87%       3.49%


Quarter to Date Information:

Net Income                      $    6,171    $    6,293       -1.94%
Earnings Per Average Share      $     0.90    $     0.92       -2.17%
Return on Assets                      1.12%         1.24%      -9.68%
Return on Equity                     10.50%        11.72%     -10.41%
Net Interest Margin                   4.11%         4.05%       1.48%
Net Interest Income             $   19,293    $   17,909        7.73%
Non-Interest Income             $    7,439    $    5,862       26.90%
Non Interest Expense            $   16,436    $   13,698       19.99%
Loss Provision                  $    2,273    $    1,512       50.33%
Net Charge Offs                 $    1,610    $    1,439       11.88%
Efficiency Ratio                     57.74%        53.96%       7.00%


Balance Sheet:

Assets                          $2,160,140    $2,017,825        7.05%
Deposits                        $1,439,463    $1,251,787       14.99%
Loans                           $1,426,963    $1,336,098        6.80%
Shareholders' Equity            $  238,768    $  219,457        8.80%
Book Value Per Share            $    35.00    $    32.04        9.23%
Average Assets                   2,207,649     2,031,959        8.65%