EXHIBIT 1
January 25, 1995
Board of Directors
FirstRock Bancorp, Inc.
612 North Main Street
Rockford, Illinois 61103
Members of the Board:
You have requested our opinion as to the fairness of the merger consideration
(the "Merger Consideration"), from a financial point of view, to the
shareholders of FirstRock Bancorp, Inc. ("FirstRock") with respect to the
proposed merger of FirstRock with and into First Financial Corporation ("First
Financial"). FirstRock has entered into an Agreement and Plan of Reorganization
and a related Agreement and Plan of Merger (collectively the "Agreements"), both
dated October 26, 1994, between First Financial and FirstRock. As is set forth
in the Agreements, each outstanding share of common stock of FirstRock will be
converted into and be exchangeable for the number of shares of Common Stock,
$1.00 par value per share, of First Financial equal to a fraction, the numerator
of which shall be equal to $27.10 and the denominator of which shall be equal to
the average closing price per share of Common Stock of First Financial as
reported on the Nasdaq Stock Market for the fifteen trading days ending on the
fourth trading day prior to the Effective Date of the Merger.
During the course of our engagement, we have, among other things:
1) reviewed the Agreements, the audited financial statements of
FirstRock and First Financial for the most recent three fiscal
years, and unaudited financial statements through September 30,
1994 as reported on Form 10-Q, Office of Thrift Supervision ("OTS")
Thrift Financial Reports of FirstRock, as well as other internally
generated FirstRock reports relating to asset/liability management,
asset quality and so forth;
2) reviewed and analyzed other material bearing upon the financial and
operating condition of First Financial and FirstRock and material
prepared in connection with the proposed transaction;
3) reviewed the operating characteristics of certain other financial
institutions deemed relevant to the contemplated transaction;
4) reviewed the nature and terms of recent sale and merger
transactions involving banks, thrifts, bank and thrift holding
companies and other financial institutions that we consider
relevant;
January 25, 1995
Board of Directors
FirstRock Bancorp, Inc.
Page -2-
5) reviewed historical and current market data for First Financial and
FirstRock common stock;
6) reviewed financial and other information provided to us by the
managements' of First Financial and FirstRock;
7) conducted meetings with members of the senior management of First
Financial and FirstRock for the purpose of reviewing the future
prospects of First Financial and FirstRock;
8) reviewed certain information including forecasts pertaining to
prospective cost savings and revenue enhancements relative to the
proposed transactions;
9) evaluated the proforma ownership of First Financial common stock by
FirstRock shareholders, relative to the proforma condition of
FirstRock's assets, liabilities, equity and earnings to the
proforma company.
The Chicago Corporation, as part of its investment banking business, is
continually engaged in the valuation of banks and bank holding companies and
thrifts and thrift holding companies in connection with mergers and acquisitions
as well as initial and secondary offerings of securities as well as valuations
for other purposes. The Chicago corporation is a member of all principal U.S.
Securities exchanges and in the conduct of our broker-dealer activities may from
time to time purchase securities from, and sell securities to, FirstRock and
First Financial and as a market maker buy or sell the equity securities of
FirstRock for our own account and for the accounts of customers. In rendering
this fairness opinion we have acted exclusively on behalf of the Board of
Directors of FirstRock and will receive a fee from FirstRock for our services.
In rendering this opinion, we have relied upon, without independent
verification, the accuracy and completeness of the financial and other
information and representations provided to us by First Financial and FirstRock.
We have relied upon the management of FirstRock and First Financial as to the
reasonableness and achievability of the financial forecasts and projections (and
the assumptions and basis therefore) provided to us, and have assumed that such
forecasts and projections are the best available estimates of management.
Based on the foregoing and our experience as investment bankers, we are of the
opinion that, as of the date hereof, the Merger Consideration to be paid to the
shareholders of FirstRock as described in the Agreements, is fair from a
financial point of view.
Sincerely,
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/s/The Chicago Corporation
THE CHICAGO CORPORATION