First Financial (THFF) 8-K First Financial Corporation reports 2nd Quarter 2012 results

Exhibit 99.1

News Release

FIRST FINANCIAL CORPORATION

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

	For more information contact:
July 30, 2012	Rodger A. McHargue at (812) 238-6334

First Financial Corporation reports 2nd Quarter 2012 results

TERRE HAUTE, INDIANA–First Financial Corporation (NASDAQ:THFF) today announced results for the six and three months ended June 30, 2012. Net income of $16.1 and $8.7 million for the six and three months, respectively, compares to $17.2 and $8.4 million for the same periods of 2011. Return on assets for the six and three months ended June 30, 2012 was 1.11% and 1.20%, respectively, compared to 1.38% and 1.35% for the six and three months ended June 30, 2011. The first six months of 2012 include income and expenses associated with the purchase of Freestar Bank on December 31, 2011 that are not part of the results for the first six months of 2011.

Net interest income for the second quarter of 2012 was $27.7 million, an increase of 10.0% over the $25.2 million reported for the same period of 2011. Net interest income for the six months ended June 30, 2012 was $54.8 million compared to the $49.9 million reported for the same period of 2011, an increase of $4.9 million. The net interest margin at June 30, 2012 was 4.34%, compared to 4.53% reported at June 30, 2011.

The provision for loan losses for the three months ended June 30, 2012 was $1.8 million compared to the $1.4 million provision for the second quarter of 2011. For the six months ended June 30, 2012 and 2011, the provision expense was $4.7 and $2.5 million, respectively.

Non-interest income for the three months ended June 30, 2012 and 2011 was $9.8 and $7.9 million, respectively, a 23.7% increase. Securities gains and gains from the sale of mortgage loans of $1.1 million comprise most of the increase. For the six months ended June 30, 2012, non-interest income increased $3.1 million to $19.3 million from the $16.2 million for the same period of 2011. All categories of non-interest income increased.

Non-interest expense for the three months ended June 30, 2012 was $23.1 million compared to $19.4 million in 2011. For the six months ended June 30, 2012, non-interest expense was $46.5 million compared to $38.3 for the six months ended June 30, 2011. The 2012 non-interest expense contains salary, benefits and one-time expenses related to the acquisition of the Freestar Bank.

Total loans at June 30, 2012 of $1.88 billion compare to the $1.65 billion reported the same time a year ago. Deposits increased by $359.9 million to $2.25 billion. These increases were primarily driven by the Freestar Bank acquisition.

Book value per share was $27.07, a 3.82% increase from the $26.07 at June 30, 2011. Shareholders’ equity increased 4.05% to $358.3 million from $342.9 million on June 30, 2011. During the second quarter of 2012 the Corporation declared a $0.47 per share dividend. This marked the 24^th consecutive year of dividend increases to shareholders.

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share data)

	June 30, 2012			December 31, 2011
	(Unaudited)
ASSETS
Cash and due from banks	$	84,669		$	134,280
Federal funds sold and short-term investments		27,472			11,725
Securities available-for-sale		658,751			666,287
Loans:		—			—
Commercial		1,101,791			1,099,324
Residential		500,110			505,600
Consumer		276,758			289,717
		1,878,659			1,894,641
Less:
Unearned Income		(936	)		(962	)
Allowance for loan losses		(20,092	)		(19,241	)
		1,857,631			1,874,438
Restricted Stock		21,296			22,282
Accrued interest receivable		11,829			12,947
Premises and equipment, net		44,945			40,105
Bank-owned life insurance		74,187			82,646
Goodwill		37,612			37,612
Other intangible assets		4,539			5,142
Other real estate owned		7,163			4,964
FDIC Indemnification asset		1,608			2,384
Other assets		60,036			59,964
TOTAL ASSETS	$	2,891,738		$	2,954,776
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	496,303		$	435,236
Interest-bearing:		—			—
Certificates of deposit of $100 or more		217,523			242,001
Other interest-bearing deposits		1,539,395			1,597,262
		2,253,221			2,274,499
Short-term borrowings		47,091			100,022
Other borrowings		146,111			146,427
Other liabilities		87,028			86,867
TOTAL LIABILITIES		2,533,451			2,607,815
Shareholders’ equity
Common stock, $.125 stated value per share;
Authorized shares-40,000,000
Issued shares-14,490,609 in 2012 and 14,450,966 in 2011
Outstanding shares-13,237,523 in 2012 and 13,197,880 in 2011		1,807			1,806
Additional paid-in capital		69,571			69,328
Retained earnings		328,056			318,130
Accumulated other comprehensive income (loss)		(9,338	)		(10,494	)
Treasury shares at cost-1,253,086 in 2012 and 2011		(31,809	)		(31,809	)
TOTAL SHAREHOLDERS’ EQUITY		358,287			346,961
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,891,738		$	2,954,776

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Dollar amounts in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
INTEREST INCOME:
Loans, including related fees	$	25,226		$	23,004		$	50,424		$	45,960
Securities:
Taxable		3,508			4,321			7,031			8,516
Tax-exempt		1,810			1,699			3,615			3,363
Other		590			471			1,213			947
TOTAL INTEREST INCOME		31,134			29,495			62,283			58,786
INTEREST EXPENSE:
Deposits		2,169			3,082			4,833			6,365
Short-term borrowings		37			41			83			95
Other borrowings		1,266			1,213			2,540			2,412
TOTAL INTEREST EXPENSE		3,472			4,336			7,456			8,872
NET INTEREST INCOME		27,662			25,159			54,827			49,914
Provision for loan losses		1,789			1,352			4,745			2,534
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		25,873			23,807			50,082			47,380
NON-INTEREST INCOME:
Trust and financial services		1,439			1,191			2,919			2,528
Service charges and fees on deposit accounts		2,402			2,354			4,606			4,503
Other service charges and fees		2,276			2,092			4,731			4,081
Securities gains/(losses), net		664			4			660			7
Total impairment losses		(11	)		(97	)		(11	)		(97	)
Loss recognized in other comprehensive loss
Net impairment loss recognized in earnings		(11	)		(97	)		(11	)		(97	)
Insurance commissions		1,799			1,673			3,690			3,393
Gain on sales of mortgage loans		792			401			1,717			738
Other		396			268			956			1,035
TOTAL NON-INTEREST INCOME		9,757			7,886			19,268			16,188
NON-INTEREST EXPENSE:
Salaries and employee benefits		13,891			11,517			28,310			22,955
Occupancy expense		1,488			1,203			2,905			2,453
Equipment expense		1,399			1,095			2,681			2,229
FDIC Expense		527			536			955			1,279
Other		5,797			5,061			11,671			9,446
TOTAL NON-INTEREST EXPENSE		23,102			19,412			46,522			38,362
INCOME BEFORE INCOME TAXES		12,528			12,281			22,828			25,206
Provision for income taxes		3,823			3,864			6,680			7,986
NET INCOME		8,705			8,417			16,148			17,220
OTHER COMPREHENSIVE INCOME
Change in unrealized gains/losses on securities, net of reclassifications		570			9,158			640			15,507
Tax effect		(228	)		(3,663	)		(256	)		(6,203	)
		342			5,495			384			9,304
Change in funded status of post retirement benefits		670			503			1,287			1,008
Tax effect		(268	)		(201	)		(515	)		(403	)
		402			302			772			605
TOTAL OTHER COMPREHENSIVE INCOME		744			5,797			1,156			9,909
COMPREHENSIVE INCOME	$	9,449		$	14,214		$	17,304		$	27,129
PER SHARE DATA
Basic and Diluted		0.66			0.64			1.22			1.31
Dividends per Share		0.47			0.47			0.47			0.47
Weighted average number of shares outstanding (in thousands)		13,238			13,152			13,230			13,152

Key Ratios	For the six months ended
	June 30, 2012			June 30, 2011
Return on average assets		1.11	%		1.38	%
Return on average common shareholder’s equity		8.96	%		10.34	%
Average common shareholder’s equity to average assets		12.32	%		13.89	%
End of period tangible common equity to tangible assets		11.09	%		10.45	%
Book value per share	$	27.07		$	26.07
Tangible book value per share	$	23.88		$	22.82
Risk-based capital - Tier 1		14.45	%		17.27	%
Risk-based capital - Total		15.35	%		18.39	%
Net interest margin		4.34	%		4.53	%
Efficiency Ratio		60.32	%		55.79	%
Net charge-offs to average loans and leases		0.26	%		0.18	%
Loan and lease loss reserve to loans and leases		1.07	%		0.99	%
Nonperforming assets to loans and leases		2.73	%		3.12	%
Asset Quality	For the six months ended
	June 30, 2012			June 30, 2011
Accruing loans and leases past due 90 days or more	$	7,995		$	2,992
Nonaccrual loans and leases		36,066			43,389
Other real estate owned		7,163			4,964
Total nonperforming assets	$	51,224		$	51,345