News Release

FIRST FINANCIAL CORPORATION

One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000

	For more information contact:
April 29, 2013	Rodger A. McHargue at (812) 238-6334

1st Quarter results reported for First Financial Corporation

TERRE HAUTE, INDIANA – 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