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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2003
----------------
Commission File Number 0-16759
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FIRST FINANCIAL CORPORATION
---------------------------
(Exact name of registrant as specified in its charter)
INDIANA 35-1546989
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(State or other jurisdiction (I.R.S. Employer
Incorporation or organization) Identification No.)
One First Financial Plaza, Terre Haute, IN 47807
- ------------------------------------------ -----
(Address of principal executive office) (Zip Code)
(812)238-6000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
--- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes x No
--- ---
As of April 30, 2003 were outstanding 6,794,085 shares without par value, of the
registrant.
FIRST FINANCIAL CORPORATION
FORM 10-Q
INDEX
PART I. Financial Information Page No.
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Item 1. Financial Statements:
Consolidated Statements of Condition.............................................................. 3
Consolidated Statements of Income................................................................. 4
Consolidated Statements of Shareholders' Equity and Comprehensive Income.......................... 5
Consolidated Statements of Cash Flows............................................................. 6
Notes to Consolidated Financial Statements........................................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..... 8
Item 3. Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk......... 9
Item 4. Controls and Procedures................................................................... 11
PART II. Other Information:
Item 6. Exhibits and Reports on Form 8-K............................................................ 11
Signatures........................................................................................... 12
Certification of Financial Results................................................................... 15
2
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollar amounts in thousands, except per share data)
March 31, December 31,
2003 2002
----------- -----------
(Unaudited)
ASSETS
Cash and due from banks $ 80,398 $ 96,043
Federal funds sold and short-term investments 2,592 50
Securities, available-for-sale 515,439 511,548
Loans:
Commercial, financial and agricultural 327,846 331,316
Real estate - construction 36,889 42,930
Real estate - mortgage 764,459 789,618
Installment 262,379 268,067
Lease financing 4,327 1,281
----------- -----------
1,395,900 1,433,212
Less:
Unearned income (595) (648)
Allowance for loan losses (21,814) (21,249)
----------- -----------
1,373,491 1,411,315
Accrued interest receivable 13,621 15,199
Premises and equipment, net 29,486 29,809
Bank-owned life insurance 48,369 47,736
Goodwill 7,102 7,102
Other intangible assets 4,114 4,289
Other real estate owned 4,474 5,006
Other assets 33,490 41,651
----------- -----------
TOTAL ASSETS $ 2,112,576 $ 2,169,748
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 147,568 $ 146,585
Interest-bearing:
Certificates of deposit of $100 or more 185,678 200,325
Other interest-bearing deposits 1,088,497 1,087,744
----------- -----------
1,421,743 1,434,654
Short-term borrowings 21,513 34,355
Other borrowings 391,873 423,290
Other liabilities 30,558 35,478
----------- -----------
TOTAL LIABILITIES 1,865,687 1,927,777
----------- -----------
Shareholders' equity
Common stock, $.125 stated value per share;
Authorized shares--40,000,000
Issued shares-7,225,483
Outstanding shares--6,794,085 in 2003 and 6,809,445 in 2002 903 903
Additional capital 66,809 66,809
Retained earnings 185,242 178,209
Accumulated other comprehensive income 12,884 14,276
Treasury shares at cost 431,398 in 2003 and 416,038 in 2002 (18,949) (18,226)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 246,889 241,971
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,112,576 $ 2,169,748
=========== ===========
See accompanying notes.
3
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except per share data)
Three Months Ended
March 31,
2003 2002
------- -------
(Unaudited) (Unaudited)
INTEREST INCOME:
Loans, including related fees $24,735 $26,535
Securities:
Taxable 4,318 4,945
Tax-exempt 1,971 2,052
Other 642 773
------- -------
TOTAL INTEREST INCOME 31,666 34,305
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INTEREST EXPENSE:
Deposits 7,302 8,977
Short-term borrowings 84 250
Other borrowings 5,351 5,612
------- -------
TOTAL INTEREST EXPENSE 12,737 14,839
------- -------
NET INTEREST INCOME 18,929 19,466
Provision for loan losses 2,227 1,932
------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 16,702 17,534
------- -------
NON-INTEREST INCOME:
Trust and financial services 914 842
Service charges and fees on deposit accounts 1,532 1,506
Other service charges and fees 2,116 1,255
Securities gains -- 1
Insurance commissions 1,505 1,324
Sales of mortgage loans 1,058 566
Other 954 679
------- -------
TOTAL NON-INTEREST INCOME 8,079 6,173
------- -------
NON-INTEREST EXPENSE:
Salaries and employee benefits 9,012 8,509
Occupancy expense 1,066 939
Equipment expense 860 852
Other 4,487 4,528
------- -------
TOTAL NON-INTEREST EXPENSE 15,425 14,828
------- -------
INCOME BEFORE INCOME TAXES 9,356 8,879
Provision for income taxes 2,323 2,151
------- -------
NET INCOME $ 7,033 $ 6,728
======= =======
EARNINGS PER SHARE:
Basic and Diluted $ 1.04 $ 0.98
======= =======
Weighted average number of shares outstanding (in thousands) 6,794 6,832
======= =======
See accompanying notes.
4
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
Three Months Ended
March 31, 2003, and 2002
(Dollar amounts in thousands, except per share data)
(Unaudited)
Accumulated
Other
Common Additional Retained Comprehensive Treasury
Stock Capital Earnings Income/(Loss) Stock Total
Balance, January 1, 2003 $ 903 $ 66,809 $ 178,209 $ 14,276 $ (18,226) $ 241,971
Comprehensive income:
Net income 7,033 7,033
Change in net unrealized
gains/(losses) on available-
for-sale securities (1,392) (1,392)
Total comprehensive income 5,641
Treasury stock purchase (723) (723)
--------- --------- --------- --------- --------- ---------
Balance, March 31, 2003 $ 903 $ 66,809 $ 185,242 $ 12,884 $ (18,949) $ 246,889
========= ========= ========= ========= ========= =========
Balance, January 1, 2002 $ 903 $ 66,680 $ 158,038 $ 8,299 $ (16,409) $ 217,511
Comprehensive income:
Net income 6,728 6,728
Change in net unrealized
gains/(losses) on available-for-
sale securities (412) (412)
Total comprehensive income 6,316
Treasury stock purchase (516) (516)
--------- --------- --------- --------- --------- ---------
Balance, March 31, 2002 $ 903 $ 66,680 $ 164,766 $ 7,887 $ (16,925) $ 223,311
========= ========= ========= ========= ========= =========
See accompanying notes.
5
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
Three Months Ended
March 31,
2003 2002
-------- --------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 7,033 $ 6,728
Adjustments to reconcile net income to net cash
provided by operating activities:
Net accretion of discounts on investments (31) (411)
Provision for loan losses 2,227 1,932
Securities gains -- 1
Depreciation and amortization 766 791
Other, net 10,409 1,838
-------- --------
NET CASH FROM OPERATING ACTIVITIES 20,404 10,879
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of available-for-sale securities -- 22,776
Maturities and principal reductions on available-for-sale securities 54,118 41,634
Purchases of available-for-sale securities (60,298) (79,662)
Loans made to customers, net of repayments 35,063 5,580
Net change in federal funds sold (2,542) 42,206
Purchase of First Community Financial Corp. -- 14,554
Additions to premises and equipment (268) (622)
-------- --------
NET CASH FROM INVESTING ACTIVITIES 26,073 46,466
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits (12,911) (41,591)
Net change in short-term borrowings (12,842) (21,423)
Dividends paid (4,229) (3,973)
Purchase of treasury stock (723) (516)
Proceeds from other borrowings -- 21,005
Repayments on other borrowings (31,417) (15,669)
-------- --------
NET CASH FROM FINANCING ACTIVITIES (62,122) (62,167)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (15,645) (4,822)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 96,043 68,205
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 80,398 $ 63,383
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 13,309 $ 15,792
======== ========
Income taxes paid $ -- $ 350
======== ========
See accompanying notes.
6
FIRST FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying March 31, 2003 and 2002 consolidated financial statements
are unaudited. The December 31, 2002 consolidated financial statements are as
reported in the First Financial Corporation (the Corporation) 2002 annual
report. The following notes should be read together with notes to the
consolidated financial statements included in the 2002 annual report filed with
the Securities and Exchange Commission as an exhibit to Form 10-K.
1. The significant accounting policies followed by the Corporation and its
subsidiaries for interim financial reporting are consistent with the accounting
policies followed for annual financial reporting. All adjustments which are, in
the opinion of management, necessary for a fair statement of the results for the
periods reported have been included in the accompanying consolidated financial
statements and are of a normal recurring nature. The Corporation reports
financial information for only one segment, banking.
2. A loan is considered to be impaired when, based upon current information and
events, it is probable that the Corporation will be unable to collect all
amounts due according to the contractual terms of the loan. Impairment is
primarily measured based on the fair value of the loan's collateral. The
following table summarizes impaired loan information:
(000's)
March 31, December 31,
2003 2002
--------- -------------
Impaired loans with related allowance for loan losses calculated under
SFAS No. 114.............................................................. $9,007 $8,812
Interest payments on impaired loans are typically applied to principal
unless collection of the principal amount is deemed to be fully assured, in
which case interest is recognized on a cash basis.
3. Securities
The amortized cost and fair value of the Corporation's investments at
March 31, 2003 are shown below. All securities are classified as
available-for-sale.
(000's)
March 31, 2003
Amortized Cost Fair Value
-------------- ----------
United States Government and its agencies $178,139 $181,955
Collateralized Mortgage Obligations 67,173 69,729
States and Municipal 156,080 165,145
Corporate Obligations 96,781 98,610
-------- --------
$498,173 $515,439
======== ========
4. Short-Term Borrowings
Period-end short-term borrowings were comprised of the following:
(000's)
March 31, December 31,
2003 2002
--------- ------------
Federal Funds Purchased $10,115 $16,311
Repurchase Agreements 10,404 13,237
Note Payable - U.S. Government 994 4,807
------- -------
$21,513 $34,355
======= =======
5. Other Borrowings
Other borrowings at period-end are summarized as follows:
(000's)
March 31, December 31,
2003 2002
-------- ------------
FHLB advances $367,273 $397,190
Note payable to a financial institution 18,000 19,500
City of Terre Haute, Indiana economic development revenue bonds 6,600 6,600
-------- --------
$391,873 $423,290
======== ========
7
FIRST FINANCIAL CORPORATION
ITEMS 2. and 3. Management's Discussion and Analysis of Financial Condition and
Results of Operations and Quantitative and Qualitative Disclosures About Market
Risk
The purpose of this discussion is to point out key factors in the
Corporation's recent performance compared with earlier periods. The discussion
should be read in conjunction with the financial statements beginning on page
four of this report. All figures are for the consolidated entities. It is
presumed the readers of these financial statements and of the following
narrative have previously read the Corporation's annual report for 2002.
Forward-looking statements contained in the following discussion are based
on estimates and assumptions that are subject to significant business, economic
and competitive uncertainties, many of which are beyond the Corporation's
control and are subject to change. These uncertainties can affect actual results
and could cause actual results to differ materially from those expressed in any
forward-looking statements in this discussion.
Summary of Operating Results
Net income for the three months ended March 31, 2003 was $7.0 million, a
4.5% improvement from the $6.7 million in the same period in 2002. Basic
earnings per share increased to $1.04 for the first quarter of 2003 compared to
$0.98 for 2002, an 6.1% improvement.
The primary components of income and expense affecting net income are
discussed in the following analysis.
Net Interest Income
The Corporation's primary source of earnings is net interest income, which
is the difference between the interest earned on loans and other investments and
the interest paid for deposits and other sources of funds. Net interest income
decreased to $18.9 million in the first three months of 2003 from $19.5 million
in the same period of 2002, a 2.8% decrease. This was the result of a decrease
of $23.1 million in average interest earning assets and a reduced net interest
margin for 2003. The net interest margin decreased from 4.09% in 2002 to 4.02%
in 2003, a 1.7% decrease driven by a greater decline in the yield on earning
assets than in the average cost of funds.
Non-Interest Income
The financial results for the quarter were driven by a $1.9 million, or
30.9%, increase over comparable 2002 non-interest income. Mortgage interest
rates continue to hover at all-time lows. Selling these low fixed-rate mortgages
in the secondary market has been the over-riding strategy of the Corporation.
Net cash gains on these sales in 2003 account for $492 thousand of the $1.9
million increase.
Non-Interest Expenses
Non-interest expenses increased $597 thousand, or 4.0%. This would include
one additional month of expenses for First Community in 2003 than in 2002, due
to the acquisition occurring on February 1, 2002. Other cost increases would
include merit increases in salaries and higher fringe benefit costs.
8
Allowance for Loan Losses
The Corporation's provision for loan losses increased to $2.2 million for the
first three months of 2003 compared to $1.9 million in the same period of 2002.
At March 31, 2003, the allowance for loan losses was 1.56% of total loans, an
increase from 1.48% at December 31, 2002. Net chargeoffs for the first three
months of 2003 were $1.7 million compared to only $1.5 million for the same
period of 2002. Based on management's analysis of the current portfolio, an
evaluation that includes consideration of historical loss experience and
potential loss exposure on identified problem loans, management believes the
allowance of $21.8 million at March 31, 2003 is adequate.
UNDER-PERFORMING LOANS
Under-performing loans consist of (1) nonaccrual loans on which the
ultimate collectability of the full amount of interest is uncertain, (2) loans
which have been renegotiated to provide for a reduction or deferral of interest
or principal because of a deterioration in the financial position of the
borrower, and (3) loans past due ninety days or more as to principal or
interest. A summary of under-performing loans at March 31, 2003 and December 31,
2002 follows:
(000's)
March 31, 2003 December 31, 2002
-------------- -----------------
Nonaccrual loans $11,550 $11,807
Restructured loans 122 546
------- -------
11,672 12,353
Accruing loans past due over 90 days 4,786 5,899
------- -------
$16,458 $18,252
======= =======
Ratio of the allowance for loan losses
as a percentage of under-performing loans 133% 116%
The following loan categories comprise significant components of the
nonperforming loans:
(000's)
March 31, 2003 December 31, 2002
-------------- -----------------
Non-Accrual Loans:
1-4 family residential $ 2,227 $ 2,382
Commercial loans 7,725 7,813
Installment loans 1,595 1,612
Other, various 3 --
------- -------
$11,550 $11,807
======= =======
Past due 90 days or more:
1-4 family residential $ 2,549 $ 2,817
Commercial loans 1,397 1,934
Installment loans 840 1,128
Other, various -- 20
------- -------
$ 4,786 $ 5,899
======= =======
INTEREST RATE SENSITIVITY AND LIQUIDITY
First Financial Corporation has established risk measures, limits and
policy guidelines for managing interest rate risk and liquidity. Responsibility
for management of these functions resides with the Asset Liability Committee.
The primary goal of the Asset Liability Committee is to maximize net interest
income within the interest rate risk limits approved by the Board of Directors.
9
INTEREST RATE RISK
Management considers interest rate risk to be the Corporation's most
significant market risk. Interest rate risk is the exposure to changes in net
interest income as a result changes in interest rates. Consistency in the
Corporation's net interest income is largely dependent on the effective
management of this risk.
The Asset Liability position is measured using sophisticated risk
management tools, including earning simulation and market value of equity
sensitivity analysis. These tools allow management to quantify and monitor both
short-term and long-term exposure to interest rate risk. Simulation modeling
measures the effects of changes in interest rates, changes in the shape of the
yield curve and the effects of embedded options on net interest income. This
measure projects earnings in the various environments over the next three years.
It is important to note that measures of interest rate risk have limitations and
are dependent on various assumptions. These assumptions are inherently uncertain
and, as a result, the model cannot precisely predict the impact of interest rate
fluctuations on net interest income. Actual results will differ from simulated
results due to timing, frequency and amount of interest rate changes as well as
overall market conditions. The Committee has performed a thorough analysis of
these assumptions and believes them to be valid and theoretically sound. These
assumptions are continuously monitored for behavioral changes.
The Corporation from time to time utilizes derivatives to manage interest
rate risk. Management continuously evaluates the merits of such interest rate
risk products but does not anticipate the use of such products to become a major
part of the Corporation's risk management strategy.
The table below shows the Corporation's estimated sensitivity profile as of
March 31, 2003. The change in interest rates assumes a parallel shift in
interest rates of 100 and 200 basis points. Given a 100 basis point increase in
rates, net interest income would increase 3.85% over the next 12 months and
increase 7.90% over the following 12 months. Given a 100 basis point decrease in
rates, net interest income would decrease 2.41% over the next 12 months and
decrease 6.37% over the following 12 months. These estimates assume all rate
changes occur overnight and management takes no action as a result of this
change.
Percentage Change in Net Interest Income
Basis Point -----------------------------------------
Interest Rate Change 12 months 24 months 36 months
- -----------------------------------------------------------------------------
Down 200 -6.25 -13.40 -16.53
Down 100 -2.41 -6.37 -8.24
Up 100 3.85 7.90 10.01
Up 200 6.77 14.61 18.70
Typical rate shock analysis does not reflect management's ability to react
and thereby reduce the effect of rate changes, and represents a worst-case
scenario.
Liquidity Risk
Liquidity is measured by each bank's ability to raise funds to meet the
obligations of its customers, including deposit withdrawals and credit needs.
This is accomplished primarily by maintaining sufficient liquid assets in the
form of investment securities and core deposits. The Corporation has $6.6
million of investments that mature throughout the coming 12 months. The
Corporation also anticipates $126.7 million of principal payments from
mortgage-backed securities. Given the current rate environment, the Corporation
anticipates $26.5 million in securities to be called within the next 12 months.
With these sources of funds, the Corporation currently anticipates adequate
liquidity to meet the expected obligations of its customers.
Financial Condition
Comparing the first quarter of 2003 to 2002, average loans are down $30.9
million due primarily to continued refinancing and sales of fixed-rate
mortgages. Average deposits were up $11.9 million. These resources were used to
pay down average bank borrowings by $42.5 million. Average shareholders' equity
increased $22.5 million, or 10.1%. Strong financial performance and increased
unrealized gains on securities pushed book value per share up 11.2% to $36.34 in
2003 from $32.68 in 2002. Book value per share is calculated by dividing the
total equity by the number of shares outstanding.
Capital Adequacy
As of March 31, 2003, the most recent notification from the respective
regulatory agencies categorized the Corporation and its subsidiary banks as well
capitalized under the regulatory framework for prompt corrective action. To be
categorized as
10
adequately capitalized the Corporation must maintain minimum total risk-based,
Tier I risk-based and Tier I leverage rations as set forth in the table. There
are no conditions or events since that notification that management believes
have changed the Corporation's category.
To Be Well
March 31, 2003 December 31,2002 Capitalized
-------------- ---------------- -----------
Total risk-based capital ratio 16.68% 14.83% =>10.0%
Tier I risk-based capital ratio 15.49% 13.58% =>6.0%
Tier I leverage capital ratio 10.94% 9.79% =>5.0%
ITEM 4. Controls and Procedures
(a) Within the 90-day period prior to the filing date of this report, an
evaluation was carried out under the supervision and with the participation of
First Financial Corporation's management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934). Based on their evaluation, our Chief Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures are, to the best of their knowledge, effective.
(b) Subsequent to the date of their evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that there were no significant changes in
First Financial Corporation's internal controls or in other factors that could
significantly affect its internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3(i) Amended and Restated Articles of Incorporation of First
Financial Corporation, by reference to Exhibit 3(i) to Form 10-Q as
filed for September 30, 2002
3(ii) Code of By-Laws of First Financial Corporation, by reference
to Exhibit 3(ii) to Form 10-Q as filed for September 30, 2002.
10.1 Deferred Compensation Agreement and Split Dollar Insurance
Agreement for Donald E. Smith, by reference to Exhibit 10.1 to Form
10-Q as filed for September 30, 2002.
10.2 Employment Agreement for Norman L. Lowery
10.3 2001 Long-Term Incentive Plan of First Financial Corporation,
by reference to Exhibit 10.3 to Form 10-Q as filed for September
30, 2002.
99.1 Chief Executive Officer and Chief Financial Officer
Certification pursuant to 18 U.S.C. Section 1350
(b) No reports on Form 8-K were filed during the quarter of the fiscal
year for which this report is filed.
11
FIRST FINANCIAL CORPORATION
PART II OTHER INFORMATION
FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST FINANCIAL CORPORATION
---------------------------
(Registrant)
Date: May 9, 2003 By /s/ DONALD E. SMITH
------------------------------------
Donald E. Smith, Chairman
Date: May 9, 2003 By /s/ NORMAN L. LOWER
------------------------------------
Norman L. Lowery, Vice Chairman
Date: May 9, 2003 By /s/ MICHAEL A. CARTY
------------------------------------
Michael A. Carty, Treasurer & CFO
12
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Norman L. Lowery, certify that:
1 I have reviewed this quarterly report on Form 10-Q of First Financial
Corporation;
2 Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3 Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4 The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5 The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6 The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 9, 2003 Signed: /s/ NORMAN L. LOWERY
-------------------------------
Norman L. Lowery,
Vice Chairman and CEO
13
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Michael A. Carty, certify that:
1 I have reviewed this quarterly report on Form 10-Q of First Financial
Corporation;
2 Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3 Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4 The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5 The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function): a. all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material
weaknesses in internal controls; and b. any fraud, whether or not material,
that involves management or other employees who have a significant role in
the registrant's internal controls; and
6 The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 9, 2003
Signed: /s/ MICHAEL A. CARTY
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Michael A. Carty,
Treasurer and CFO
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