1st Quarter Results Reported for First Financial Corporation

TERRE HAUTE, IN--(Marketwired - Apr 29, 2013) - First Financial Corporation (NASDAQ: THFF) today announced results for the three months ended March 31, 2013. Net income increased 3.4% to $7.7 million compared to $7.4 million for the same period of 2012. Return on assets for the three months ended March 31, 2013 was 1.05% compared to 1.02% for the three months ended March 31, 2012.

Net interest income for the first quarter of 2013 was $26.2 million, a decrease of 3.65% from the $27.2 million reported for the same period of 2012. The net interest margin at March 31, 2013 was 4.09%, compared to 4.26% reported at March 31, 2012.

The provision for loan losses for the three months ended March 31, 2013 and March 31, 2012 was $3.0 million. The first quarter of 2013 saw recoveries of loan losses exceed charge-offs by $1.0 million.

Non-interest income for the three months ended March 31, 2013 and 2012 was $9.9 and $9.5 million, respectively, a 3.85% increase. Trust fees and income from electronic banking comprised most of the increase.

Non-interest expense for the first quarter of 2013 was $22.2 million compared to $23.4 million in 2012. This decrease of 5.21% is realized largely due to the efficiencies gained from the full transition of the operations of Freestar Bank that was acquired December 30, 2011.

Total loans at March 31, 2013 of $1.82 billion compare to the $1.85 billion reported during the same period a year ago. Deposits increased by $70.2 million to $2.35 billion. The allowance for loan losses increased 38.0% to $25.3 million from the $18.3 million at March 31, 2012. Net charge-offs for 2013 were down $4.4 million from 2012.

Book value per share was $28.43 at March 31, 2013, a 6.05% increase from the $26.81 at March 31, 2012. Shareholders' equity increased 6.6% to $378.4 million from $354.9 million on March 31, 2012.

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois; The Morris Plan Company of Terre Haute; Forrest Sherer Inc. in Indiana; and FFB Risk Management Co. Inc. in Las Vegas, Nevada.

FIRST FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
			March 31,				December 31,
			2013				2012
			(unaudited)
ASSETS
Cash and due from banks			$	78,399			$	87,230
Federal funds sold				54,384				20,800
Securities available-for-sale				769,949				691,000
Loans:				-				-
	Commercial			1,061,798				1,088,144
	Residential			494,001				496,237
	Consumer			266,744				268,507
				1,822,543				1,852,888
Less:
	Unearned Income			(1,012	)			(952	)
	Allowance for loan losses			(25,272	)			(21,958	)
				1,796,259				1,829,978
Restricted Stock				21,292				21,292
Accrued interest receivable				11,622				12,024
Premises and equipment, net				46,940				47,308
Bank-owned life insurance				77,787				77,295
Goodwill				37,612				37,612
Other intangible assets				3,601				3,893
Other real estate owned				7,752				7,722
FDIC Indemnification Asset				1,770				2,632
Other assets				57,585				56,622
	TOTAL ASSETS		$	2,964,952			$	2,895,408
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing			$	454,935			$	465,954
Interest-bearing:
	Certificates of deposit of $100 or more			211,529				213,610
	Other interest-bearing deposits			1,683,312				1,596,570
				2,349,776				2,276,134
Short-term borrowings				39,952				40,551
Other borrowings				114,608				119,705
Other liabilities				82,233				86,896
	TOTAL LIABILITIES			2,586,569				2,523,286
Shareholders' equity
Common stock, $.125 stated value per share;
	Authorized shares-40,000,000
	Issued shares-14,516,113 in 2012 and 14,490,609 in 2012
	Outstanding shares-13,307,498 in 2012 and 13,237,523 in 2012			1,809				1,808
Additional paid-in capital				70,171				69,989
Retained earnings				346,035				338,342
Accumulated other comprehensive income (loss)				(8,925	)			(7,472	)
Less: Treasury shares at cost-1,208,615 in 2013 and 1,253,086 in 2012				(30,707	)			(30,545	)
	TOTAL SHAREHOLDERS' EQUITY			378,383				372,122
	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	2,964,952			$	2,895,408

FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
				Three Months Ended
				March 31,
				2013				2012
				(unaudited)				(unaudited)
INTEREST INCOME:
	Loans, including related fees			$	23,454			$	25,198
	Securities:
		Taxable			3,214				3,523
		Tax-exempt			1,770				1,805
	Other				504				623
TOTAL INTEREST INCOME					28,942				31,149
INTEREST EXPENSE:
Deposits					1,742				2,664
Short-term borrowings					20				46
Other borrowings					1,007				1,274
TOTAL INTEREST EXPENSE					2,769				3,984
NET INTEREST INCOME					26,173				27,165
Provision for loan losses					3,021				2,956
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES					23,152				24,209
NON-INTEREST INCOME:
Trust and financial services					1,526				1,480
Service charges and fees on deposit accounts					2,254				2,204
Other service charges and fees					2,500				2,455
Securities gains/(losses), net					4				(4	)
Insurance commissions					1,963				1,891
Gain on sales of mortgage loans					963				925
Other					667				560
TOTAL NON-INTEREST INCOME					9,877				9,511
NON-INTEREST EXPENSE:
Salaries and employee benefits					13,596				14,419
Occupancy expense					1,522				1,417
Equipment expense					1,501				1,282
FDIC Insurance					557				428
Other					5,023				5,874
TOTAL NON-INTEREST EXPENSE					22,199				23,420
INCOME BEFORE INCOME TAXES					10,830				10,300
Provision for income taxes					3,137				2,857
NET INCOME					7,693				7,443
OTHER COMPREHENSIVE INCOME
Change in unrealized gains/losses on securities, net of reclassifications					(2,778	)			70
Tax effect					1,111				(28	)
					(1,667	)			42
	Change in funded status of post retirement benefits				357				617
	Tax effect				(143	)			(247	)
					214				370
	TOTAL OTHER COMPREHENSIVE INCOME				(1,453	)			412
	COMPREHENSIVE INCOME			$	6,240			$	7,855
EARNINGS PER SHARE:
	BASIC AND DILUTED			$	0.58			$	0.56
Weighted average number of shares outstanding (in thousands)					13,300				13,223

Key Ratios		For the three months ended
		March 31					March 31
		2013					2012
Return on average assets			1.05	%				1.02	%
Return on average common shareholder's equity			8.21	%				8.46	%
Average common shareholder's equity to average assets			12.79	%				12.04	%
End of period tangible common equity to tangible assets			11.53	%				10.88	%
Book value per share		$	28.43				$	26.81
Tangible book value per share		$	25.34				$	23.68
Risk-based capital - Tier 1			15.82	%				14.53	%
Risk-based capital - Total			16.97	%				15.35	%
Net interest margin			4.09	%				4.26	%
Efficiency Ratio			59.25	%				61.32	%
Net charge-offs to loans and leases			-0.23	%				0.73	%
Loan and lease loss reserve to loans and leases			1.39	%				0.99	%
Nonperforming assets to loans and leases			2.59	%				2.59	%
Asset Quality			For the three months ended
			March 31					March 31
			2013					2012
Accruing loans and leases past due 90 days or more		$	1,262				$	3,362
Nonaccrual loans and leases			38,132					36,794
Other real estate owned			7,752					7,722
Total nonperforming assets		$	47,146				$	47,878