FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FIRST FINANCIAL CORPORATION September 30, 1999 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 September 30, 1999 Commission File Number 0-16759 FIRST FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) INDIANA 35-1546989 (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 (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 _____. As of September 30, 1999 were outstanding 6,919,719 shares without par value, of the registrant. 1 FIRST FINANCIAL CORPORATION FORM 10-Q INDEX PART I. Financial Information Page No. 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....................7 Notes to Consolidated Financial Statements...............8 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations.........9 Item 3. Quantitative and Qualitative Disclosures About Market Risk..........................................11 PART II. Other Information: Signatures..................................................................14 2 ITEM 1. Financial Statements FIRST FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CONDITION (Amounts in thousands, except share and per share amounts) September 30, December 31, 1999 1998 (Unaudited) ASSETS Cash and due from banks $58,748 $54,877 Federal funds sold and securities purchased under agreement to resell 4,200 450 Investments available-for-sale, at market 560,414 633,365 Loans: Commercial, financial and agricultural 251,306 233,080 Real estate - construction 41,989 32,880 Real estate - mortgage 680,746 636,615 Installment 216,502 205,251 Lease financing 5,455 5,825 1,195,998 1,113,651 Less: Unearned income 1,920 1,886 Allowance for loan losses 17,886 16,429 1,176,192 1,095,336 Accrued interest receivable 14,065 14,704 Premises and equipment, net 24,825 24,426 Other assets 33,730 26,594 TOTAL ASSETS $1,872,174 $1,849,752 LIABILITIES AND SHAREHOLDERS EQUITY Deposits: Noninterest-bearing $153,241 $148,747 Interest-bearing: Certificates of deposit of $100,000 or more 205,207 196,773 Other interest-bearing deposits 874,731 914,845 1,233,179 1,260,365 Federal funds purchased and securities sold under agreements to repurchase 74,980 100,571 Treasury tax and loan open-end note 7,632 3,061 Advances from Federal Home Loan Bank 360,872 275,449 Other long-term debt 6,610 6,619 Other liabilities 16,638 21,504 TOTAL LIABILITIES 1,699,911 1,667,569 Shareholders equity: Common stock, $.125 stated value per share; authorized 10,000,000 shares; issued and outstanding 903 903 7,225,483 shares for 1998 and 1999 including treasury shares of 91,093 in 1998 and 305,764 in 1999 Additional capital 66,680 66,680 Retained earnings 123,395 110,566 Accumulated other comprehensive income (loss): Unrealized gains (losses) on investments, net of tax -4,819 8,123 Less: Treasury shares at cost -13,896 -4,089 TOTAL SHAREHOLDERS EQUITY 172,263 182,183 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,872,174 $1,849,752 The accompanying notes are an integral part of the consolidated financial statements. 3 FIRST FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 Unaudited Unaudited Unaudited Unaudited (Amounts in thousands, except per share amounts) INTEREST INCOME: Loans $24,772 $23,822 $71,887 $69,577 Investment securities: Taxable 7,104 6,807 21,329 20,079 Tax-exempt 2,001 1,932 6,030 5,968 9,105 8,739 27,359 26,047 Other interest income 23 28 505 550 TOTAL INTEREST INCOME 33,900 32,589 99,751 96,174 INTEREST EXPENSE: Deposits 11,197 12,779 33,853 37,855 Other 5,495 3,989 15,450 11,572 TOTAL INTEREST EXPENSE 16,692 16,768 49,303 49,427 NET INTEREST INCOME 17,208 15,821 50,448 46,747 Provision for loan losses 1,084 1,345 3,644 4,301 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 16,124 14,476 46,804 42,446 NON-INTEREST INCOME Trust income 646 509 1,972 1,594 Service Charges on deposit accounts 309 347 929 992 Other service charges and fees 1,249 1,204 3,906 3,468 Investment securities gains 37 382 194 773 Other 409 487 1,420 1,043 2,650 2,929 8,421 7,870 NON-INTEREST EXPENSE Salaries and employee benefits 6,252 5,712 18,511 17,689 Occupancy expense 726 717 2,192 2,105 Equipment expense 941 836 2,689 2,484 Other 3,035 3,156 9,441 9,346 10,954 10,421 32,833 31,624 INCOME BEFORE INCOME TAXES 7,820 6,984 22,392 18,692 Income Tax Expense 2,300 2,124 6,494 5,162 NET INCOME $5,520 $4,860 $15,898 $13,530 EARNINGS PER SHARE $0.80 $0.67 $2.28 $1.87 Weighted average number of shares outstanding 6,942 7,209 6,988 7,217 The accompanying notes are an integral part of the consolidated financial statements. 4 FIRST FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY Nine Months Ended September 30, 1999 and 1998 Accumulated Other (Dollar amounts in thousands, Common Additional Retained Comprehensive Treasury except per share data) Stock Capital Earnings Income Stock Total Balance, January 1, 1999 $903 $66,680 $110,566 $8,123 $-4,089 $182,183 Comprehensive income: Net income 15,898 15,898 Other comprehensive income, net of tax: Net change in unrealized gains/losses on investments -12,942 -12,942 Total comprehensive income 2,956 Cash Dividends, $.44 per share -3,069 -3,069 Treasury stock purchase -9,807 -9,807 _____________________________________________________________________________ Balance, September 30, 1999 $903 $66,680 $123,395 $-4,819 $-13,896 $172,263 Balance, January 1, 1998 $877 $59,787 $ 98,046 $6,770 - $165,480 Comprehensive income: Net income 13,530 Other comprehensive income, net of tax: Net change in unrealized gains/losses on investments 1,810 1,810 Total comprehensive income 15,340 Issue shares for Morris Plan acquisition 26 6,893 6,919 Cash Dividends, $.40 per share -2,884 -2,884 Treasury stock purchase -1,224 -1,224 _____________________________________________________________________________ Balance, September 30, 1998 $903 $66,680 $108,692 $8,580 $-1,224 $183,631 The accompanying notes are an integral part of the consolidated financial statements. 5 FIRST FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY Three Months Ended September 30, 1999 and 1998 Accumulated Other (Dollar amounts in thousands, Common Additional Retained Comprehensive Treasury except per share data) Stock Capital Earnings Income Stock Total Balance, July 1, 1999 $903 $66,680 $117,875 $-1,541 $-11,849 $172,068 Comprehensive income: Net income 5,520 5,520 Other comprehensive income, net of tax: Net change in unrealized gains/losses on investments -3,278 -3,278 Total comprehensive income 2,243 Treasury stock per share -2,047 -2,047 __________________________________________________________________________ Balance, September 30, 1999 $903 $66,680 $123,395 $-4,819 $-13,896 $172,263 Balance, July 1, 1998 $903 $66,680 $103,832 $ 7,028 $ -780 $177,663 Comprehensive income: Net income 4,860 4,860 Other comprehensive income, net of tax: Net change in unralized gains/losses on investments 1,552 1,552 Total comprehensive income 6,412 Treasury stock per share -444 -444 __________________________________________________________________________ Balance, September 30, 1998 $903 $66,680 $108,692 $ 8,580 $ -1,224 $183,631 The accompanying notes are an integral part of the consolidated financial statements. 6 FIRST FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 1999 1998 (Unaudited) (Amounts in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $15,898 $13,530 Adjustment to reconcile net income to net cash provided by operating activities: Net amortization (Accretion) of discounts on investments 161 -722 Provision for loan losses 3,644 4,301 Investment gains -194 -773 Provision for depreciation and amortization 2,072 1,839 Provision for deferred income taxes -1,180 -604 Net decrease in accrued interest receivable 639 88 Other, net 1,676 680 NET CASH PROVIDED BY OPERATING ACTIVITIES 22,716 18,339 CASH FLOWS FROM INVESTING ACTIVITIES: Sales and maturities of investments available-for-sale 217,400 179,224 Purchases of investments available-for-sale -166,321 -211,551 Loans made to customers, net of repayments -85,022 -54,753 Net increase in federal funds sold -3,750 -1,950 Additions to premises and equipment -2,729 -1,660 NET CASH USED BY INVESTING ACTIVITIES -40,422 -90,690 CASH FLOWS FROM FINANCING ACTIVITIES: Net (decrease) increase in deposits -27,186 28,782 Net increase in short-term borrowings 52,640 2,795 Minority interest investment in subsidiary 400 0 Cash dividends -6,224 -5,624 Purchase of treasury stock -9,807 -1,224 Net increase in long-term debt and advances 11,754 40,564 NET CASH PROVIDED BY FINANCING ACTIVITIES 21,577 65,293 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,871 -7,058 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 54,877 54,285 CASH AND CASH EQUIVALENTS, END OF PERIOD $58,748 $47,227 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $49,508 $48,869 Income taxes paid $7,715 $5,345 The accompanying notes are an integral part of the consolidated financial statements. 7 FIRST FINANCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The accompanying September 30, 1999 and 1998 consolidated financial statements are unaudited. The December 31, 1998 consolidated financial statements are as reported in the First Financial Corporation (the Corporation) 1998 annual report. The following notes should be read together with notes to the consolidated financial statements included in the 1998 annual report. 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. 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 loans collateral. The following table summarizes impaired loan information. (000's) September 30, 1999 1998 Impaired loans with related allowance for loan losses calculated under SFAS No. 114........................ $2,176 $1,874 3. Investments The cost and fair value of the Corporation's investments at September 30, 1999 are shown below. All investments are classified as available-for-sale. (000's) September 30, 1999 Amortized Cost Fair Value Available-For-Sale: United States Government $194,041 $189,143 United States Government Agencies 176,939 172,464 State and Municipal 154,719 153,667 Other 45,816 45,141 $571,515 $560,415 4. Changes in Shareholders' Equity Under the Corporation's common stock repurchase program announced in September 1998, the Corporation has repurchased 305,764 shares as of September 30, 1999 compared to 91,093 shares as of December 31, 1998. 8 FIRST FINANCIAL CORPORATION ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 three of this report. All amounts are for the consolidated entity. It is presumed the readers of these financial statements and the following narrative have previously read the Corporation's annual report for 1998. 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 The Corporation reported record earnings for the nine and three month periods ended September 30, 1999. Net income for the nine months ended September 30, 1999 was $15.9 million, a 17.5% increase above the same period of 1998. Earnings per share of $2.28 for the nine month period was 21.9% more than the $1.87 reported in 1998. For the three month period ended September 30,1999 net income of $5.5 million was 13.6% higher than the $4.9 million reported in 1998, while the $.80 earnings per share for the second quarter was 19.4% better than the $.67 per share reported for 1998. The increased earnings are the result of an increase in average earning assets and a decrease in the efficiency ratio to 52.6% from 54.4% a year earlier. Also, as a result of a 9.9% decrease in net charge-offs and the improvement in the performance of substandard loans, management was able to reduce the provision for loan losses 15.3% and 19.4% for the nine-month and three-month periods respectively. Earnings per share growth was positively effected by a stock repurchase plan that began in the third quarter of 1998. 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 incurred for deposits and other sources of funds. Net interest income increased to $50.4 million in the first nine months of 1999 from $46.7 million in the same period of 1998, while the net interest margin remained the same at 4.14% for both years. The 1999 third quarter net interest income increased to $17.2 million from $15.8 million for the same quarter of 1998, as the net interest margin increased to 4.22% for the third quarter of 1999 from 4.10% in the same quarter of 1998. Non-Interest Income Non-interest income for the nine months of 1999, as compared to the same period of 1998, increased $.6 million or 7.0%. Trust income, other service charges and fees, and other income were $2.0 million, $3.9 million and $1.4 million, which represent increases of 23.7% , 12.6%, and 36.1% respectively, compared to the same period of 1998. The primary factors for the increase of 9 Trust income are increased volume and transaction fees. Other service charges and fees increased mainly from the commissions received from a newly formed insurance company subsidiary for $.3 million. The reasons for the increase of other income are the result of realized gains from the sale of other real estate owned and sale of mortgage loans in the secondary market of $.2 million each. These increases were partially offset by the reduction in realized gains from investment sales of $.5 million. Third quarter non-interest income decreased to $2.7 million from $2.9 million compared to the same quarter of 1998. This decrease is mainly from the decrease of gains realized from sales of investment by $.3 million from the same quarter of 1998. Non-Interest Expenses Non-interest expenses for the first nine months of 1999, as compared to the same period of 1998, increased to $32.8 million from $31.6 million or 3.8%. Most of the components of other expenses increased slightly and no one significant factor contributed to this increase. Third quarter other expenses also increased to $11.0 million from $10.4 million or 5.1% for the same quarter of 1998. Most of the components of other expenses increased slightly while salaries and related benefits, the largest component of this group, increased from $5.7 million to $6.3 million or 9.5%. The primary reason for this increase were higher average salaries and higher pension cost. Allowance for Loan Losses The Corporation's provision for loan losses decreased to $3.6 million from $4.3 million for the first nine months of 1999 compared to the same period a year earlier. At September 30, 1999, the allowance for loan losses was 1.50% of net loans. This compares with an allowance of 1.48% at December 31, 1998. Net chargeoffs for the first nine months of 1999 were $2.2 million compared to $2.4 million for the same period of 1998. The ratio of net chargeoffs to average loans outstanding for the last five years ended December 31, 1998, was .33%. With this experience and based on management's review of the portfolio, management believes the allowance of $17.9 million at September 30, 1999 is adequate. 10 Under-performing Assets Under-performing assets consist primarily of (1) nonaccrual loans and leases on which the ultimate collectability of the full amount of interest is uncertain, (2) loans and leases 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, (3) loans and leases past due ninety days or more as to principal or interest and (4) land sold on contract and others. A summary of under-performing assets at September 30, 1999 and December 31, 1998 follows: (000's) (000's) September 30, 1999 December 31, 1998 Nonaccrual loans and leases $ 3,405 $ 4,103 Renegotiated loans and leases 945 70 Land sold on contract and others 2,858 1,914 Total non-performing assets $ 7,208 $ 6,087 Ninety days past due loans and leases 5,587 8,184 Total under-performing assets $12,795 $ 14,271 Ratio of the allowance for loan losses as a percentage of non-performing assets 248% 270% Ratio of the allowance for loan losses as a percentage of under-performing assets 140% 115% The following loan categories comprise significant components of the under- erforming loans at September 30, 1999 and December 31, 1998. Non-Accrual Loans: (000's) (000's) September 30, 1999 December 31, 1998 1-4 family residential $ 1,683 49% $ 1,927 47% Commercial loans 860 25 587 14 Installment loans 668 20 879 22 Other, various 194 6 710 17 $3,405 100% $4,103 100% Past due 90 days or more: 1-4 family residential $2,083 37% $3,456 42% Commercial loans 2,431 44 2,963 36 Installment loans 801 14 590 7 Other, various 272 5 1,175 15 $5,587 100% $8,184 100% There are no material industry concentrations within the under-performing loans. In addition to the above under-performing loans, certain loans are felt by management to be impaired for reasons other than the current repayment status. Such reasons may include but not be limited to previous payment history, bankruptcy proceedings, industry concerns, or information related to a specific borrower that may result in a negative future event to that borrower. At September 30, 1999 the Corporation had $1.8 million of these loans which are still in accrual status. 11 Interest Rate Sensitivity and Liquidity The Corporation charges the nine subsidiary banks with monitoring and managing their individual sensitivity to fluctuations in interest rates and assuring that they have adequate liquidity to meet loan demand or any potential unexpected deposit withdrawals. This function is facilitated by the Asset/Liability Committee. The primary goal of the committee is to maximize net interest income within the interest rate risk limits approved by the Board of Directors. This goal is accomplished through management of the subsidiary bank's balance sheet liquidity and interest rate risk exposures due to the changes in economic conditions and interest rate levels. Interest Rate Risk and Quantitative and Qualitative Disclosures About Market 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 of changes in interest rates. Consistency in the Corporation's net income is largely dependent on the effective management of this risk. The Committee reviews a series of monthly reports to ensure that performance objectives are being met. The Committee monitors and controls interest rate risk through earnings simulation. Simulation modeling measures the effects of changes in interest rates, changes in the shape of the yield curve, and changes in prepayment speeds on net interest income. The primary measure of Interest Rate Risk is "Earnings at Risk." This measure projects the earnings effect of various rate movements over the next three years on net interest income. It is important to note that measures of interest rate risk have limitations and are dependent upon certain 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 and believes the assumptions to be reasonable. The relationships are continuously monitored for behavioral changes. In its interest rate risk management, the Corporation currently does not utilize derivative products, such as interest rate swaps, futures contracts, or option contracts, and is not engaged in securities trading activity. The Corporation instead invests in assets whose value is derived from an underlying asset. These assets include government agency issued mortgage-backed securities. The performance of these assets in changing rate environments is included in the following table. The table below shows the Corporation's estimated earnings sensitivity profile as of September 30, 1999. Given a 100 basis point increase in rates, net interest income would decrease 1.55% over the next 12 months and decrease 4.42% over the next 24 months. A 100 basis point decrease would result in a .93% decrease in net interest income over the next 12 months and a 1.88% increase over the next 24 month periods. These estimates assume all rates changed overnight and management took no action as a result of this change. Basis Point Percentage Change in Net Interest Income Interest Rate Change 12 months 24 months 36 months Down 300 -4.39% 1.26% -5.52% Down 200 -2.29 2.57 -2.02 Down 100 - .93 1.88 - .49 Up 100 -1.55 - 4.42 -1.99 Up 200 -3.11 -8.58 -3.55 Up 300 - 4.08 -11.30 -3.13 In the near term both the up and down scenarios show decreasing earnings. This is due to the use of products containing options, most notably callable agency securities and putable Federal Home Loan Bank advances. The securities pay a premium rate and the advances charge a discounted rate in exchange for the option. Therefore, there is a benefit to current income by using these products. Typical rate shock analysis does not reflect management s ability to react and thereby reduce the effects of rate changes, and represents a worst case scenario. The model assumes no actions are taken and prices change to the full extent of the rate shock. 12 Liquidity Risk Liquidity is measured by each bank's ability to raise funds to meet the obligations from its customers, including deposit withdrawals and credit needs. This is accomplished primarily by maintaining sufficient liquid assets in the form of investment securities, cash, and deposits with banks. The Corporation has $6.8 million of investments that mature throughout the coming 12 months. The Corporation also anticipates $49.9 million of principal payments from mortgage- backed securities. Given the current interest rate environment, the Corporation anticipates $9.2 million of 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. Capital Adequacy As of September 30, 1999 the Corporation's leverage ratio was 9.45% compared to 9.51% at December 31, 1998. At September 30, 1999 the Corporation's total capital, which includes Tier II capital, was 16.20% compared to 16.29% at December 31, 1998. These amounts exceed minimum regulatory capital requirements. Year 2000 The Year 2000 problem concerns the inability of information systems to properly recognize and process date sensitive information beginning on December 31, 1999. The Corporation has developed a Year 2000 team responsible for ensuring that its information technology (IT) systems and software, and non-IT systems are Year 2000 compliant in time to minimize any significant detrimental effects on operations and service to its customers. The Corporation is currently in the implementation stage, the last stage of a five step Year 2000 program. The awareness, assessment, renovation and testing steps have been completed for all mission critical applications. The Corporation utilizes Fiserv-CBS software for processing all of its core applications. The testing of this software was substantially completed by the end of 1998. The remainder of Year 2000 mission critical testing was completed by June 30, 1999. Currently the Corporation is focusing on maintaining the internal core processing system s readiness and will continue the effort until the Year 2000. In addition, the Corporation will continue to manage third party system relationships, update disaster recovery and contingency plans, and will also continue to test secondary computer systems. The Corporation continues to correspond with its major commercial loan customers and major suppliers and vendors to assess the credit risk related to the Year 2000 problem as well as the risk of business interruption. The majority of the Corporation's non-IT related systems have been assessed as Year 2000 compliant and the final testing phase was completed by June 30, 1999. The total estimated cost related to the Year 2000 issue, including the cost of replacing equipment is $615,000. Total incremental cost incurred through September 30, 1999 is approximately $456,000. The Corporation does not expect that the cost related to the Year 2000 project will have a material effect on the results of its operations or financial condition. The above expectations are subject to inherent uncertainties of the Year 2000 problem, including the readiness of third-party suppliers and regulatory agencies that the Corporation depends upon to meet customers' needs. The failure to correct a material problem could result in an interruption or failure of normal business activities or operations. Such failures could materially affect the Corporation's ability to meet customers' needs and ultimately affect its results of operations and financial condition. The Corporation believes that with the successful completion of its Year 2000 program, the possibility of significant interruptions will be reduced. Concurrently with the Year 2000 program described above, the Corporation has developed contingency plans intended to mitigate the possible disruption in business operations that may result from the year 2000 problem and is estimating the costs for such plans. Contingency plans include increasing cash in vault, ordering extra forms/supplies, establishing trigger dates for activating alternative solutions/vendors, identifying possible alternative vendors, preparing for some manual preparation of checks, forms, etc., and other appropriate measures. Contingency plans and related cost estimates are being continually refined as information becomes available. 13 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: November 12, 1999 By (Signature) Donald E. Smith, President Date: November 12, 1999 By (Signature) John W. Perry, Secretary Date: November 12, 1999 By (Signature) Michael A. Carty, Treasurer 14